Finance

Displays outside the Nasdaq MarketSite are pictured as dating app operator Bumble Inc. (BMBL) made its debut on the Nasdaq stock exchange during the company’s IPO in New York City, New York, U.S., February 11, 2021.
Mike Segar | Reuters

Check out the companies making headlines in midday trading Monday.
Boeing — Shares of the plane maker rallied 6.1% after CNBC reported the Federal Aviation Administration has approved inspection protocol revisions that should allow the jet maker to resume deliveries of its 787 Dreamliner. Separately, Boeing defense workers will vote on a new proposed labor agreement on Wednesday, aiming to avert a strike.

Target — The retail stock rose 1.3% after Wells Fargo upgraded Target to overweight from equal weight. The firm said investors are too down on the stock, which it considers a “proven share gainer.”
PerkinElmer — Shares of PerkinElmer jumped 5% after the diagnostics and life sciences company reported better-than-expected sales and profit for the second quarter. It also announced plans to divest some of its non-core units to the private equity firm New Mountain Capital for $2.45 billion in cash.
Advanced Micro Devices — Several semiconductor stocks surged, with Advanced Micro Devices gaining 2.5%. Shares of Micron Technology gained 1.1%, Nvidia rose 1.5%, and Intel advanced 1.8%.
Global Payments — Shares of the financial technology company rose 4.6% after a better-than-expected quarterly report. Global Payments reported $2.36 in adjusted earnings per share on $2.28 billion of revenue. Analysts surveyed by Refinitiv had penciled in $2.34 in earnings per share on $2.07 billion of revenue. Global Payments also announced a deal to buy EVO Payments for $34 per share.
Colgate-Palmolive — The consumer products company gained 3% following a Wells Fargo upgrade to equal weight from underweight. The firm said Colgate-Palmolive’s bottom line could show signs of improvement going forward.

Nio — Shares advanced 2.3% after the Chinese electric vehicle company and its rival Li Auto all reported an increase in July car deliveries. Li Auto surged 3.8%.
Check Point Software Technologies — Shares fell 4.5% after the cybersecurity firm reported disappointing billings revenue. Billings came in at $570.6 million, below a StreetAccount estimate of $578.3 million. That overshadowed better-than-expected earnings and revenue for the previous quarter.
Bumble — The dating app company’s stock slipped 5.2% on the back of a downgrade from Jefferies to a hold, citing a decline in paying subscribers going forward.
Jacobs Engineering Group — Shares declined 5.7% after the international technical professional services firm reported calendar second quarter earnings. Jacobs lowered guidance for fiscal year 2022, citing foreign currency translation adjustments, despite otherwise surpassing expectations in its report.
— CNBC’s Yun Li, Tanaya Macheel, Jesse Pound and Samantha Subin contributed reporting

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Diana Mousaly spent months searching for a home in Windsor, Canada’s southernmost city. It was the height of covid-19 and prices were rising across the country. Ms Mousaly, a 27-year-old clerk at the local police service, viewed nearly 100 homes and made 60 or so offers—often at hundreds of thousands of Canadian dollars above the asking price—before finally closing on a property last September. A decade ago, her parents purchased a home for half the amount. “It’s four times bigger than mine,” she sighs.Ms Mousaly may have bought at the wrong time. For the past two decades, Canada’s white-hot property market has burned ever brighter. Now things are cooling down: prices have fallen for three consecutive months. The same is true in other frothy markets. In New Zealand, where valuations at the end of 2021 were up by 45% since the start of the pandemic, the price of a home has also fallen for three straight months. In Sweden, prices fell by nearly 4% in June, the steepest monthly decline since the global financial crisis in 2007-09. Two in five homes in Australia are worth less than they were three months ago.Even where prices are still rising, higher borrowing costs are dampening buyer enthusiasm. With monthly payments on a typical new mortgage in America now three-quarters higher than three years ago, loan applications are down by more than a quarter from their peak in January. The share of first-time buyers has hit a 13-year low. Some of the froth is also being blown away in Britain. Mortgage approvals in April fell back to pre-pandemic levels. In May, home sales fell by a tenth compared with the previous year. If the global housing boom is finally running out of steam, how far will prices fall? Analysts at Capital Economics, a consultancy, forecast modest drops of 5-10% in America and Britain. In these countries, homeowners are less likely to be forced to sell by rising mortgage costs since fixed-rate loans are common. In Australia and Sweden, the analysts reckon prices could slip by 15%. With higher levels of household debt, and thus more exposure to rate rises, Canada and New Zealand are most vulnerable—prices in these countries could fall by 20%.Two factors should prevent house prices from entering a death spiral. One is the shortage of homes in most rich countries. Depending on the estimate, America is short of either 3.8m or 5.8m homes; England needs an estimated 345,000 new homes a year, and is building half that number; and Canada requires an additional 3.5m by 2030 at the current pace of construction. The other factor is tight labour markets. Low unemployment in many rich countries means people are less likely to fall behind on their debts. Combined with stronger household finances, this should prevent a slump on the scale of the financial crisis in all but the wobbliest markets. But the pain will be unevenly spread. Pandemic hotspots are particularly vulnerable. During lockdowns, the search for large gardens or green space sent housing markets into a frenzy. Parisians fled to the French countryside. Turkish residents left Istanbul for resort towns. Londoners wanting to take advantage of remote work flocked to leafy neighbourhoods like Richmond and Dulwich, or escaped the city altogether for cheaper homes. Cracks have started to appear in these markets. Fewer bidding wars are taking place in the American mountain towns and sunbelt states that attract well-paid Californians and New Yorkers. More than half of homes for sale in Salt Lake City, Utah, had their price cut in June; in Boise, Idaho, three-fifths did. The question now is how low prices will go. The Royal Bank of Canada thinks sales in its home country will plummet from their peak in 2021 by more than 40%, worse even than in the financial crisis when they fell by 38%. Things may not be quite as dramatic elsewhere. But for owners used to prices heading in only one direction, any drop will come as a shock. ■ More

Take a look at some of the biggest movers in the premarket:
Boeing (BA) – Boeing defense workers will vote on a new proposed labor agreement on Wednesday, averting – for now – a strike that could have begun today. Separately, sources tell CNBC the Federal Aviation Administration has approved inspection protocol revisions that should allow the jet maker to resume deliveries of its 787 Dreamliner. Boeing shares jumped 5.4% in the premarket.

Nio (NIO) – Nio rallied 3% in premarket action after the China-based electric car maker announced that it will open its first overseas plant in Europe in September. The plant will be located in Hungary and will make power products for the European market.
Check Point Software (CHKP) – Check Point Software reported better-than-expected revenue and profit for its latest quarter, boosted by a surge in demand for its cybersecurity products amid a worldwide increase in cyberattacks. The stock dipped 4.7% in premarket trading.
Alibaba (BABA) – Alibaba gained 1.6% in the premarket after saying it intended to work to keep its New York Stock Exchange listing. The Chinese e-commerce giant is on a list of companies that could be removed for not meeting auditing requirements.
PerkinElmer (PKI) – The diagnostics and life sciences company rose 1.4% in the premarket after announcing plans to divest several non-core units to private-equity firm New Mountain Capital for $2.45 billion in cash. Separately, PerkinElmer reported better-than-expected sales and profit for the second quarter.
Valvoline (VVV) – The automotive products company announced the sale of its global products business to Saudi Aramco for $2.65 billion in cash. Valvoline gained 2.4% in premarket action.

Global Payments (GPN) – The payments technology company reported better-than-expected second-quarter profit and revenue, and also announced the acquisition of rival fintech company EVO Payments (EVOP) for $34 per share, or $4 billion in cash. Global Payments added 1.6% in the premarket while Evo Payments surged 19.6%.
Edgewell Personal Care (EPC) – Edgewell recalled one of its Banana Boat sunscreen spray products after trace amounts of cancer-causing chemical benzene were found in some samples.
Southern Co. (SO) – Chief Executive Officer Tom Fanning is expected to retire by the end of the year, according to people familiar with the matter who spoke to Bloomberg. Fanning is expected to remain with the utility company in some capacity after stepping down as CEO.

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Four Chinese companies on Thursday became the first to issue shares in Switzerland via a China stock connect program that launched in late July.
The China securities regulator approved the new share issuance in “just a few weeks,” said Wang Hang, a partner at Baker McKenzie’s capital markets practice in Beijing.
He said more than 10 Chinese-listed companies plan to offer shares in Switzerland as a result of the new stock connect program.

Four Chinese companies raised about $1.5 billion in July by issuing shares on the Six Swiss Exchange via a new China stock connect program.
Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese companies looking to raise cash overseas have turned to Switzerland — and gotten speedy regulatory approval to do so.
That’s according to Baker McKenzie, which said it acted as legal advisor for the first four Chinese companies to list shares via a new stock connect program with Switzerland on July 28. The companies raised about $1.5 billion.

The China securities regulator approved the new share issuance in “just a few weeks,” said Wang Hang, a partner at Baker McKenzie’s capital markets practice in Beijing. He noted the approval process for other share issuances could take a few months or even half a year.
The China Securities Regulatory Commission did not immediately respond to a CNBC request for comment.
The latest listings are not initial public offerings, but reflect a new channel for Chinese companies listed on the mainland China A share market to raise capital overseas.
The four companies — GEM, Gotion High-tech, Keda Industrial Group and Ningbo Shanshan — issued global depositary receipts (GDR) on the Six Swiss Exchange as part of a new China-Swiss stock connect program with the Shanghai and Shenzhen exchanges. The four companies operate in new energy or manufacturing industries.

Chinese companies’ access to overseas capital markets has come under increased scrutiny since the high-profile suspension of Ant Group’s planned IPO in late 2020 and Beijing’s crackdown on Didi in the summer of 2021.

On the Chinese side, new regulations around user privacy and national security have raised the bar for overseas public offerings. Potential failure to reach an audit agreement with the U.S. threatens the delisting of many Chinese companies from New York stock exchanges.
But companies looking to list in mainland China and Hong Kong often face more stringent requirements than in the U.S. market.
An EY report found that as of June 14, more than 920 companies were in line to go public in mainland China and Hong Kong. That was little changed from March.

Chinese companies lining up

While Chinese companies await clarity on a faster IPO process, some that are able to are turning to Switzerland.
A client contemplating a Hong Kong IPO decided to prioritize a GDR listing in Switzerland, and pursue a Hong Kong listing later, Wang said, citing a conversation the morning of Thursday, July 28.
Since news of the forthcoming China-Swiss connect program earlier this year, “at least 13 Chinese listed companies have already announced their intention” to offer shares, Wang said. “There are other companies planning for that but haven’t made the announcement.”

Read more about China from CNBC Pro

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People pass by a video sign display with the logo for Roku, a Fox-backed video streaming firm, that held it’s IPO at the Nasdaq Marketsite in New York, September 28, 2017.
Brendan McDermid | Reuters

Check out the companies making headlines in midday trading Friday.
Amazon — Shares of the e-commerce giant jumped 10.4%, giving the broader market a boost, after the company reported better-than-expected second-quarter revenue and issued an optimistic outlook. Revenue growth of 7% in the second quarter topped estimates, bucking the trend among its Big Tech peers.

Roku — Roku shares plummeted 23.1% after the streaming company reported disappointing results for the second quarter, as it faces a slowdown in advertising. The company shared disappointing guidance for the current quarter, noting that dwindling ad spending and recessionary fears could continue to impact its business going forward.
Apple — Shares of Apple rose 3.3% after the company beat Wall Street profit and revenue forecasts, and CEO Tim Cook said he expects growth to accelerate despite “pockets of softness.” Sales of its iPhone saw double-digit growth in new customers.
First Solar — Shares of First Solar surged 12.1% after the company reported better-than-expected earnings for the second quarter. Oppenheimer also upgraded the stock to outperform from neutral on Friday citing a deal reached between Sen. Joe Manchin, D-W.V. and Senate Majority Leader Chuck Schumer, D-N.Y., on a bill that includes climate spending.
Chevron, Exxon Mobil — The energy stocks jumped on the back of record profits reported in their second-quarter earnings, boosted by higher oil and gas prices. Chevron jumped 8.9%, and Exxon Mobil added 4.6%.
Bloomin’ Brands — Shares jumped 3.1% after Bloomin’ Brands reported second-quarter earnings that beat analyst expectations. The restaurant company behind Outback Steakhouse and other brands earned 68 cents per share on revenue of $1.13 billion. Analysts expected a profit of 61 cents per share on revenue of $1.1 billion, according to Refinitiv.

Stanley Black & Decker — Shares of the toolmaker company slid 1.3% on Friday, building on a 16% loss on Thursday that came after a disappointing quarterly report and guidance cut. Wolfe Research downgraded the stock to peer perform from outperform, saying that “negative news flow likely dominates” through the end of this year.
Procter & Gamble — The consumer goods company posted mixed second-quarter results, sending shares down 6.2%. Procter & Gamble also said it expects rising commodity costs will continue to be a challenge ahead.
Church & Dwight — Shares dropped 8.6% after the household products company behind Arm & Hammer reported a revenue miss in its most-recent quarter, citing greater inflationary pressures.
Intel — Shares of the chipmaker tumbled 8.6% after a second-quarter report that came in well short of expectations. Intel reported 29 cents in adjusted earnings per share on $15.32 billion of revenue. Analysts surveyed by Refinitiv had penciled in 70 cents in earnings per share on $17.92 billion of revenue. Third-quarter guidance also came in below expectations. Susquehanna downgraded the stock to negative from neutral, warning that free cash flow could be “significantly depressed for at least the next few years.”
— CNBC’s Yun Li, Tanaya Macheel, Jesse Pound, Carmen Reinicke and Samantha Subin contributed reporting

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Take a look at some of the biggest movers in the premarket:
Amazon.com (AMZN) – Amazon shares rallied 12.5% in premarket trading after it posted better-than-expected quarterly revenue and issued an upbeat outlook. Amazon logged an overall quarterly loss, owing largely to a $3.9 billion negative impact from its investment in electric vehicle maker Rivian (RIVN).

Roku (ROKU) – Roku stock was slammed 23.2% in premarket trading after it reported a larger-than-expected quarterly loss and its revenue missed estimates as well. Roku also issued weaker-than-expected guidance as both ad sales and sales of its video streaming devices remain under pressure.
Intel (INTC) – Intel shares tumbled 11.2% in premarket action after the chip maker’s quarterly profit and revenue fell short of Wall Street forecasts. Its revenue drop from a year ago was its largest in more than a decade, and its current-quarter guidance fell short of forecasts. Intel said supply chain issues and delays in the rollout of new data center chips were among the factors weighing on results.
Chevron (CVX) – Chevron rallied 3.6% in premarket trading after beating top and bottom line estimates for its latest quarter, and increasing the top end of its share buyback guidance to $15 billion from the prior $10 billion.
Procter & Gamble (PG) – Procter & Gamble missed estimates by a penny a share, with quarterly profit of $1.21 per share. Revenue exceeded forecasts. The shares fell 3.6% in the premarket as the consumer products giant predicts organic sales growth of 3% to 5% for the current fiscal year, the slowest since 2019 as consumers grow more cautious.
Exxon Mobil (XOM) – Exxon Mobil added 2% in premarket action after the company posted a better-than-expected second-quarter profit. As with rival Chevron, Exxon benefited from higher prices for oil and natural gas as well as strong margins.

Apple (AAPL) – Apple gained 2.3% in the premarket, after reporting quarterly profit and revenue that exceeded Wall Street forecasts. Earnings were down from a year ago, but Apple did see iPhone sales continue to grow.
Newell Brands (NWL) – The company behind consumer brands like Sunbeam, Mr. Coffee and Crockpot reported better-than-expected earnings for its latest quarter. Its shares fell 2.9% in the premarket, however, after it issued weaker-than-expected current-quarter and full-year guidance, amid a weak macroeconomic environment.

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U.S. President Joe Biden and Chinese President Xi Jinping ended a call Thursday with plans to arrange their first in-person meeting since Biden took office, a senior U.S. official said during a briefing.
Xi stuck to strong words on the Taiwan issue, while Biden said the U.S. position has not changed, according to official readouts from the U.S. and Chinese governments.
The two leaders’ latest conversation came at a tense period between their countries, particularly over recent rhetoric around Taiwan.
“That the call happened is a mild positive and shows both leaders want to maintain a floor under deteriorating bilateral ties,” Eurasia Group analysts said in a note.

U.S. President Joe Biden and Chinese President Xi Jinping held a phone call Thursday. Pictured here is their virtual meeting on Nov. 15, 2021.
Mandel Ngan | Afp | Getty Images

BEIJING — U.S. President Joe Biden and Chinese President Xi Jinping ended a call Thursday with plans to arrange a face-to-face meeting for the first time since Biden took office, a senior U.S. official said during a briefing.
However, Xi stuck to strong words on the Taiwan issue, while Biden said the U.S. position has not changed, according to official readouts from the U.S. and Chinese governments.

The readouts did not mention plans for an in-person meeting, but noted both sides plan to maintain communication. The U.S. official was briefing reporters after the call.
“There was an exchange at the end about … a conversation about a face-to-face meeting being worked out between the teams,” the official said, according to a White House transcript. “From my perspective, there was very much a clear, affirmative agenda that was put forward and agreed to.”
China’s Ministry of Foreign Affairs did not immediately respond to a request for comment.
The two leaders’ latest conversation came during a tense period between their countries, particularly over recent rhetoric around Taiwan. Beijing considers the democratically self-ruled island as part of its territory.
“That the call happened is a mild positive and shows both leaders want to maintain a floor under deteriorating bilateral ties,” Eurasia Group analysts said in a note. “Any future cessation of top-level US-China dialogue would be a negative sign for global stability.”

Why tensions between China and Taiwan are on the rise

“Xi did not escalate China’s threats but he did appear to warn indirectly that Pelosi’s trip could inflame Chinese nationalism,” the report said.
Beijing has warned “strong and resolute measures” if Speaker of the U.S. House of Representatives Nancy Pelosi visits Taiwan this summer, as the Financial Times has reported, citing sources.

Don’t play with fire

During Thursday’s call, China’s leader maintained a firm line on the consequences of support for Taiwan’s independence.
“Resolutely safeguarding China’s national sovereignty and territorial integrity is the firm will of the more than 1.4 billion Chinese people,” Xi said during the call, according to an official English-language release from China’s Ministry of Foreign Affairs.
“Those who play with fire will perish by it,” the statement cited Xi as saying, in a section about his comments on China’s position on Taiwan. “It is hoped that the U.S. will be clear-eyed about this.”
The U.S. “one China policy” of the last few decades has recognized Beijing as the sole legal government of China. The U.S. also maintains unofficial relations with Taiwan, with a policy of making sure the island has the resources to defend itself.

Read more about China from CNBC Pro

Biden said during Thursday’s call with Xi that U.S. policy on Taiwan has not changed, according to official readouts from China and the White House.
Tensions between the U.S. and China escalated during the Trump administration, which put tariffs on billions of U.S. dollars’ worth of goods from China and banned U.S. businesses from selling supplies to some Chinese tech companies.
Biden’s administration has cast the bilateral relationship as one of strategic competition.

Areas of cooperation

The call — which lasted about 2 hours and 20 minutes — discussed areas of potential cooperation such as climate change and health security, the U.S. official said.
The Chinese readout noted Xi emphasized the need for both countries to communicate on “coordinating macroeconomic policies,” stabilizing supply chains, and protecting the security of global energy and food.
Both leaders, who last spoke in March, also discussed the Russia-Ukraine war, the U.S. and Chinese governments said. Beijing has refused to call Moscow’s attack on Ukraine an invasion.

There was never any chance the U.S. would violate its own one-China policy. Even a visit by Pelosi wouldn’t change that.

Scott Kennedy
Center for Strategic and International Studies

The call marked “a step forward in being able to discuss deeply sensitive matters in a workman-like [way],” said Scott Kennedy, senior advisor and Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies.
“There was never any chance the U.S. would violate its own one-China policy,” Kennedy said. “Even a visit by Pelosi wouldn’t change that.”
The two countries described the call as “candid” and said it was initiated by the U.S.
The Chinese readout noted Biden requested the call. The White House said the call was part of the Biden administration’s “efforts to maintain and deepen lines of communication between the United States and the [People’s Republic of China] and responsibly manage our differences and work together where our interests align.”

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Chinese President Xi Jinping headed an economic meeting Thursday held regularly with China’s leadership, known as the Politburo.
In the second half of the year, authorities said they would stabilize employment and prices, according to a state media readout of the leaders’ meeting.
That high-level mention of stabilizing prices indicates there won’t likely be any additional expansionary policies, Wang Jun, a director at the China Chief Economist Forum, said in a phone interview.
However on Thursday, China’s leaders did not signal any change in the country’s “dynamic zero-Covid” policy.

A worker in a protective suit cleans the floor at a subway station, after the lockdown placed to curb the coronavirus disease (COVID-19) outbreak was lifted in Shanghai, China June 2, 2022. 
Aly Song | Reuters

BEIJING — China’s top leaders signaled Thursday that no big stimulus for economic growth was on the way, and downplayed the necessity of achieving the “around 5.5%” GDP target.
In the second half of the year, authorities said they would stabilize employment and prices, according to a state media readout of the leaders’ meeting Thursday. Chinese President Xi Jinping headed the economic meeting, held regularly with China’s leadership, known as the Politburo.

That high-level mention of stabilizing prices indicates there won’t likely be any additional expansionary policies, Wang Jun, a director at the China Chief Economist Forum, said in a phone interview. He noted high inflation overseas, and expected China would face greater inflationary pressure in the coming months.

One of the largest stimulus announcements came in late May when China’s State Council, the country’s top executive body, announced 33 economic support measures ranging from tax refunds to infrastructure investment.
While Wang expected continued use of credit and local government bonds to support the economy, he said authorities would not likely “force” 5.5% growth. That’s according to a CNBC translation of his Mandarin-language remarks.
China’s gross domestic product grew by just 2.5% in the first half of the year from a year ago, after the economy slumped in the second quarter. The country’s worst Covid-19 outbreak since 2020 locked down the metropolis of Shanghai in April and May, while related restrictions in other parts of China hit business activity.

Sticking to zero-Covid

However, on Thursday China’s leaders did not signal any change in the country’s “dynamic zero-Covid” policy.

“Regarding the relationship between pandemic control and the development of the economy and society [we must] … take the long view, especially from a political point of view, calculate the political cost,” the state media readout of the Politburo meeting said in Chinese, according to a CNBC translation.
The readout did emphasize how local governments should take a more localized approach, especially on economic policy and resolving problems in real estate.
“Provinces with the conditions to achieve the economic targets should strive to,” the readout said.
Shanghai’s GDP contracted by 5.7% in the first half of the year from a year ago, while Beijing city’s grew by just 0.7%, according to data accessed through Wind Information. The provinces of Shanxi, Jiangxi and Fujian were among the fastest growing, by at least 4.6% in the first six months of 2022.
The leaders’ meeting reflects “a more flexible and pragmatic attitude toward [the] GDP target,” said Bruce Pang, chief economist and head of research for Greater China at JLL.
He estimated the year’s urban unemployment rate of 5.5% can still be achieved if the economy rebounds by about 5% or more in the second half of the year.

Real estate: A local matter

On real estate, the Chinese leaders stuck with their mantra that “houses are for living in, not speculation,” while stating that local governments are responsible for delivering completed houses.
Developers in China typically sell apartments before finishing construction, generating an important source of cash flow. However, recent construction delays have prompted many homebuyers in the last month to suspend mortgage payments, putting developers’ future sales at risk.
The meeting readout also noted how policy for resolving real estate problems shouldn’t be the same across all cities, said Qin Gang, executive director of China real estate research institute ICR.
Instead, he said the readout encouraged local governments to take a localized approach in supporting people’s purchases of a first home or an upgraded property.

The tech crackdown

On the internet tech crackdown that’s hit companies from Alibaba to Didi, Chinese authorities again signaled they were reaching a turning point.
The Politburo meeting readout called for the continued “healthy” development of the “platform economy” and “completing” the businesses’ adjustments. The leaders also said lists of allowable “greenlit” investment areas should be published.
The readout said policy must also support business confidence, so that, among other items, foreign businesses “dare to invest.”

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