Finance

Take a look at some of the biggest movers in the premarket:
Goldman Sachs (GS) – Goldman gained 2.6% in premarket trading, following upbeat profit and revenue. Second-quarter earnings came in at $7.73 per share, compared to a consensus estimate of $6.58 a share. Goldman’s profit dropped from a year ago, however, as the pace of dealmaking slowed.

Synchrony Financial (SYF) – The financial services company’s stock rallied 3.5% in the premarket after it reported better-than-expected profit and revenue for the second quarter. Synchrony pointed to upbeat loan growth and credit trends, with the consumers remaining strong.
Coinbase (COIN) – Coinbase rallied 6.5% in premarket action, with the cryptocurrency exchange operator’s stock one of several crypto-related stocks rising after the value of bitcoin and ether surged in overnight trading.
Bank of America (BAC) – Bank of America fell 2 cents a share shy of estimates with quarterly earnings of 73 cents per share, though revenue came in slightly above Wall Street forecasts. Bank of America’s results were impacted by a sharp drop in investment banking revenue. The stock initially fell 1.7% in the premarket but then pared those losses.
Twitter (TWTR) – Elon Musk filed a court motion late Friday seeking to deny Twitter’s request for an expedited trial over his move to terminate his $44 billion takeover deal.
Boeing (BA) – Boeing announced that Delta Air Lines (DAL) had ordered 100 Boeing 737 Max jets, and also said that the company was very close to resuming deliveries of its 787 Dreamliner. Boeing jumped 4.2% in premarket trading.

Seagen (SGEN) – The closing of Merck’s (MRK) $40 billion deal to buy Seagen will be delayed, according to people familiar with the matter who spoke to The Wall Street Journal. The delay stems from a wait for data evaluating a study of a Seagen treatment. The stock slid 2.9% in the premarket.
Starbucks (SBUX) – Starbucks rose 1.% in the premarket after the Sunday Times reported that the coffee chain is exploring a possible sale of its U.K. operations.
GlaxoSmithKline (GSK) – The company formerly known as GlaxoSmithKline completed the spin-off of its consumer health business into a separate company known as Haleon, which contains well-known brands such as Advil and Sensodyne. GSK fell 1.3% in the premarket.
Paramount Global (PARA) – The media company’s stock lost 1.8% in premarket trading after Morgan Stanley downgraded it to “underweight” from “equal-weight,” noting the possibility of advertisers and consumers pulling back in a recession scenario.
Fresh Del Monte Produce (FDP) – The fruit and vegetable company’s stock rose 2.8% in premarket trading after Bloomberg reported that private-equity firm I Squared Capital is considering a takeover, as one option to expand a partnership agreement struck in 2021.

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Binance has been fined 3.3 million euros ($3.4 million) fine by the Dutch central bank.
The regulator had warned last year that Binance was offering its services in the Netherlands without authorization.
The development goes against Binance’s recent shift in tone around making peace with global regulators.

The logo of cryptocurrency exchange Binance displayed on a smartphone with stock market percentages in the background.
Omar Marques | SOPA Images | LightRocket via Getty Images

Binance, the world’s largest cryptocurrency exchange, on Monday was slapped with a 3.3 million euro ($3.4 million) fine from the Dutch central bank for operating in the Netherlands without registration.
The penalty came after an August 2021 warning from De Nederlandsche Bank (DNB) last year that Binance had offered crypto services in the country without authorization.

The company was dealt a category 3 fine — the most stringent of DNB’s three levels of enforcement. The charge came in at the upper limit of the 2 million euros to 4 million euros maximum the bank can impose “due to the gravity and degree of culpability of the non-compliance,” DNB said in a statement.
The breach took place over a “prolonged period,” the central bank said, spanning from May 21, 2020, until at least Dec. 1, 2021. “This is why DNB considers the non-compliance to be very grave,” the regulator said.
DNB said it also took into account Binance’s size and “very substantial customer base in the Netherlands.” The company is the biggest crypto exchange globally, with daily spot trading volumes of $15.5 billion, according to CoinGecko data.
Binance filed an appeal against the fine on June 2, DNB said.
A Binance spokesperson said the company is hoping to put the squabble behind it as it pursues its Dutch license.

“Today’s decision marks a long-awaited pivot in our ongoing collaboration with the Dutch Central Bank,” the spokesperson said via email.
“While we do not share the same view on every aspect of the decision, we deeply respect the authority and professionalism of Dutch regulators to enforce regulations as they see fit.”
The development goes against Binance’s recent shift in tone around making peace with global regulators. Binance previously operated largely outside the parameters of the law, with its CEO Changpeng Zhao often boasting of having no official global headquarters.
It has since tried to become a friend rather than foe to regulators — particularly in Europe, where it has secured licenses in France, Italy and Spain.
The Dutch fine was moderated 5% lower because Binance applied for registration and was “relatively transparent” about its operations during the process, DNB said. The central bank says it is still reviewing Binance’s application.

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U.S. stock index futures were modestly higher during overnight trading Sunday as Wall Street looks ahead to a busy week of earnings.
Futures contracts tied to the Dow Jones Industrial Average added 0.25%. S&P 500 futures were up 0.4%, while Nasdaq 100 futures advanced 0.5%.

The major averages are coming off a losing week, despite a Friday relief rally that saw the Dow jump more than 650 points. The 30-stock benchmark shed 0.16% on the week. The S&P 500 and Nasdaq Composite fell 0.93% and 1.57%, respectively.
Friday’s relief rally came as traders bet that the Federal Reserve will be less aggressive at its upcoming meeting. The Wall Street Journal reported Sunday that the central bank is on track to lift interest rates by 75 basis points at its meeting later this month.
Still, it was the second negative week in the last three for all the major averages. Recession fears have been front and center in recent weeks as market participants worry that aggressive action from the Fed — in an effort to tame decades-high inflation — will ultimately tip the economy into a recession.
“Markets are likely to remain volatile in the coming months and trade based on hopes and fears about economic growth and inflation,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a recent note to clients.
“A more durable improvement in market sentiment is unlikely until there is a consistent decline both in headline and in core inflation readings to reassure investors that the threat of entrenched price rises is passing,” he added.

Stock picks and investing trends from CNBC Pro:

A batch of economic data drove last week’s wild market action.
Inflation jumped 9.1% in June, a hotter-than-expected reading and the largest increase since 1981. That, in turn, led traders to bet that the Fed could raise rates by a full percentage point at its meeting at the end of July.
By the end of the week, however, some of those fears retreated on the back of a strong retail sales number as well as comments from some Fed officials.
Fundstrat Global Advisors’ Tom Lee attributed some of Friday’s rally to the retail sales number, which showed the economy is “slowing but not broken.”
“I think this pushes the Fed to be more measured…I think that the upside risk is much greater now than the downside risk,” Lee said Friday on CNBC’s “Closing Bell Overtime.” “I’m in the camp that stocks have bottomed,” he added.
A busy week of earnings is coming up after JPMorgan and Morgan Stanley kicked things off last week.
Bank of America, Goldman Sachs and Charles Schwab are on deck to provide quarterly updates on Monday before the market opens. IBM will post results after the closing bell.
Later in the week, we’ll hear from Johnson & Johnson, Netflix, Lockheed Martin, Tesla, United Airlines, Union Pacific, Verizon and a host of other companies.

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Air-conditioners are running full blast in central China as much as they are in Texas or on the Iberian peninsula. As many as 900m Chinese people have experienced record temperatures in recent days; more than 80 cities have issued heat alerts. In Zhejiang province, an important manufacturing centre in the east, some energy-intensive factories have been subject to power rationing. Thermometers in the region hit about 42°C on July 13th. Given the humidity, that feels more like 54°C.For China’s leaders the roasting temperatures raise fears of a repeat of the energy crunch of last year. As power suppliers struggled to meet demand, many factories were forced to shut down, and some households experienced blackouts. The authorities have vowed to avoid shortages this time. But the turmoil in global energy markets caused by Russia’s invasion of Ukraine and the Chinese government’s own lofty emissions targets present added complications.The events of both this year and last are laying bare the contradictions between the desire for clean and secure energy and vigorous economic activity. In response, China’s leaders have tried supply-side interventions with varying degrees of heavy-handedness. The experience might prove instructive as governments elsewhere mull market-meddling to counter surging commodity prices.Last year supply disruptions, together with poor policy, led to China’s worst power cuts in a decade. Officials had restricted the output of many of its coal mines, in line with its climate goals. (In 2020 Xi Jinping, the president, won rare praise from Western observers when he said that the country’s carbon emissions would peak before 2030, and that China would become carbon neutral by 2060.) Then the economic recovery from the early phase of the covid-19 pandemic pushed up the demand for energy. But instead of letting prices rise, state planners maintained strict caps on electricity and some coal prices. Power generators began losing money and some eventually stopped operating. Many miners halted work, too. The resulting power shortages took a severe toll on industrial output. This time the economy has been battered by Mr Xi’s “zero covid” policy. According to figures published on July 15th, gdp expanded by a mere 0.4% in the second quarter compared with a year earlier. Sluggish economic growth notwithstanding, surging global energy prices and scorching temperatures have revived concerns about the adequacy of energy supply. Officials are seeking to allay those fears ahead of a Communist Party congress in the autumn, at which Mr Xi is expected to receive a third term as the party’s leader. Their approach includes attempts to increase supply and build up stockpiles, as well as some market reforms. Take coal, which produces 60% of China’s power. Global thermal-coal prices have reached record highs, partly because European countries have reduced their reliance on Russian natural gas. China has this time loosened restrictions on mine production to boost domestic supplies. The country has also been loading up on Russian coal, which is being shunned by the West. Officials are even considering dropping a two-year-old ban on Australian coal imports, according to Bloomberg, a news service.The National Development and Reform Commission (ndrc), the government’s planning agency, has pressed power companies to lock in long-term contracts with miners and to stockpile at least 15 days’ worth of coal. Nonetheless, with market prices elevated and state caps on electricity prices for end-users in place, generators that are still buying on spot markets could be squeezed again if coal prices continue to shoot up.China is highly dependent on foreign oil and gas, importing about 75% and 40% of its consumption of each fuel, respectively. Global prices of both commodities surged after Russia invaded Ukraine, though oil has fallen a little recently. Chinese importers have stocked up on crude from Iran, which is under American sanctions, causing inventories to build up in January and April, according to research by Michal Meidan of the Oxford Institute for Energy Studies. China is also buying more oil from Russia at a discount, as Western buyers pull back; in May Russia overtook Saudi Arabia as its biggest supplier of crude. China’s natural-gas imports are largely locked into long-term contracts, which have so far helped keep prices down. The domestic prices of petrol and diesel, like that of coal, are capped. High global crude prices mean refiners will often make a loss on domestic sales. Strict export quotas stop them from selling more in the international market at higher prices. One Western oil trader says that planners have been leaning on state oil firms to sell even less abroad. Refiners are therefore incentivised to do fewer runs when prices are high, and to stockpile crude instead. “Export controls are a strategy to keep oil in the country just in case there’s a shortage,” says Zhou Xizhou of s&p Global, a rating agency.For now there are no shortages. But that does not necessarily mean that the government’s supply-side interventions have had resounding success. A big factor in keeping shortages at bay has been the sorry state of the economy and the associated muting of demand for energy. Some economists believe China’s oil demand could be flat this year compared with last year, or even lower. Optimistic forecasters see the economy recovering towards the end of the year, even as growth slows or stalls in America and Europe. This could lower global energy prices just as China needs to import more.If factories come roaring back to life earlier than expected, however, then China’s energy policy would face a real test. Miners, refiners and power generators could respond to price caps and export bans by reducing supply. A particularly cold winter could force buyers of gas into the spot market, where prices have rocketed. And officials would start to feel the heat. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Stocks rallied on Friday in response to a new round of bank earnings and promising economic data as fears of a 100 basis point rate hike from the Federal Reserve to subdue rising inflation subsided.
The Dow Jones Industrial Average popped 658.09 points, or 2.15%, to settle at 31,288.26. The S&P 500 jumped 1.92% to 3,863.16, and the Nasdaq Composite bounced 1.79% to 11,452.42.

Despite Friday’s rally, all the major averages closed out the week with losses. The Dow slipped close to 0.2% while the S&P and Nasdaq fell 0.9% and nearly 1.6%, respectively. The session’s moves left the S&P 500 roughly 19% off its highs.
“The market is getting a little bit more convinced that the Fed is probably not going to be delivering a full point rate increase at the end of the month and that we’re getting close to seeing peak Fed tightening get priced into the market,” said Edward Moya, a senior analyst at OANDA. That’s “giving some relief for investors to scale back into equities.”
A new round of bank results from Wells Fargo and Citigroup offered further insight into the state of the economy. Wells Fargo popped about 6.2% even as quarterly profits declined 48% and the bank set aside funds for bad loans. Citigroup soared 13.2% as it beat estimates and benefited from a rising rate environment.

A day earlier, investors combed through troubling reports from JPMorgan Chase and Morgan Stanley, which kicked off major bank earnings. Investors also weighed the likelihood of larger interest rate hikes from the Federal Reserve and looming recession concerns.
Along with fresh bank earnings, traders digested strong preliminary consumer sentiment data and retail sales that beat expectations. Those numbers appeared to soothe concerns that the Fed will hike by 100 basis points at upcoming policy meetings and indicated that consumers are bolstering retail spending even as inflation hits record highs.

Meanwhile, comments from Atlanta Fed President Raphael Bostic on Friday indicated that he likely would not support a potential higher rate move. He cautioned that swiftly increasing rates could “undermine a lot of those things that are working well.”
“The market seems to be welcoming the news, although retail strength could only add fuel to the Fed’s fire to continue its rate hike campaign to cool the economy and tame inflation,” said Mike Loewengart, managing director of investment strategy at Morgan Stanley’s E-Trade Capital Management, noting that the numbers are not adjusted for inflation.
Friday’s results motivated a broad-based rally across the S&P 500, with all major sectors ending the session in positive territory. Financials jumped 3.5% boosted by surging bank shares while the health-care sector bounced about 2.5% following strong earnings results from UnitedHealth. Consumer staples marked the only sector to close out the week marginally higher.
Battered tech stocks also jumped on Friday. Meta Platforms, Salesforce and Amazon gained 4.2%, 3.9% and 2.6%, respectively. Netflix soared 8.2%. UnitedHealth, JPMorgan Chase and American Express led the Dow’s recovery, rising about 5.4%, 4.6% and 4.4%, respectively.
In other news, Pinterest shares surged nearly 16.2% following a Wall Street Journal report that said activist investor Elliott Management took a stake of more than 9% in the social media company.
Lea la cobertura del mercado de hoy en español aquí.

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Citigroup offices in New York City. 
Adam Jeffery | CNBC

Check out the companies making headlines in midday trading.
Pinterest — Shares of the image-sharing social media company surged 16.2% on a report from the Wall Street Journal that Elliott Management has acquired a more than 9% stake.

Citigroup — Citigroup rallied 13.2% after second-quarter earnings beat on the top and bottom lines. Citigroup was the only one of the four major banks that reported earnings this week to surpass expectations on revenue.
Wells Fargo — Shares of Wells Fargo surged 6.2% after the bank reported quarterly earnings Friday morning. The bank missed analysts’ revenue estimates but beat on adjusted earnings per share, coming in at 82 cents versus 80 cents expected. Higher interest rates helped the bank during the quarter as net interest income climbed 16% on the year — which should help the bank offset further pressure on its mortgage unit and other operations going forward.
State Street — Shares jumped 9.7% after the financial services fiduciary reported a beat on earnings per share estimates. State Street reported earnings of $1.94 per share on revenue of $2.95 billion. Analysts polled by Refinitiv were expecting earnings of $1.73 per share on revenue of $2.99 billion.
Bank of New York Mellon — The bank holding company jumped 7.3% after a beat on revenue in its second-quarter earnings. Bank of New York Mellon reported revenue of $4.25 billion, compared with Refinitiv consensus estimates of $4.17 billion.
U.S. Bancorp — U.S. Bancorp gained 5.2% after quarterly earnings that surpassed revenue expectations. The bank posted revenue of $6.01 billion against analysts polled by Refinitiv who were expecting revenue of $5.89 billion.

UnitedHealth Group — Shares jumped 5.4% after the health insurer’s quarterly earnings topped expectations. UnitedHealth reported earnings of $5.57 per share on revenue of $80.33 billion. UNH was expected to report earnings of $5.20 per share on revenue of $79.68 billion, according to consensus estimates from Refinitiv.
Sunrun — Solar stocks declined Friday following an NBC News report that said Sen. Joe Manchin would not support a bill increasing spending to address climate change. The story cited a Democrat briefed on the conversations. Sunrun fell 6.4%, First Solar declined 8.1%, SunPower dipped 3.4% and SolarEdge Technologies lost 1.2%.
—CNBC’s Samantha Subin and Carmen Reinicke contributed reporting.

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Here’s what the bank reported compared with what Wall Street was expecting: Earnings per share of $2.19 vs $1.68 expected
Revenue of $19.64 billion vs $18.22 billion expected

Jane Fraser, CEO of Citi, says she is convinced Europe will fall into recession as it faces the impact of the war in Ukraine and the resultant energy crisis.
Patrick T. Fallon | AFP | Getty Images

Citigroup on Friday posted second-quarter results that beat analysts’ expectations for profit and revenue as the firm benefited from rising interest rates and strong trading results.
Here’s what the bank reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $2.19 vs $1.68 expected
Revenue: $19.64 billion vs $18.22 billion expected

Shares of the bank rose 4.9% in premarket trading.
Profit declined 27% to $4.55 billion, or $2.19 per share, from $6.19 billion, or $2.85, a year earlier, the New York-based bank said in a statement. That handily exceeded expectations for the quarter as analysts have been slashing earnings estimates for the industry in recent weeks.
Revenue rose a bigger-than-expected 11% in the quarter to $19.64 billion, more than $1 billion over estimates, as the bank reaped more interest income and saw strong results in its trading division and institutional services business.
Of the four major banks to report second-quarter results this week, only Citigroup topped expectations for revenue.
“In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to weather uncertain times, given our liquidity, credit quality and reserve levels,” Citigroup CEO Jane Fraser said in the release.

Corporate cash management, Wall Street trading and consumer credit cards performed well in the quarter, she noted.
Bank stocks have been hammered this year over concerns that the U.S. is facing a recession, which would lead to a surge in loan losses. Like the rest of the industry, Citigroup is also contending with a sharp decline in investment banking revenue, offset by the boost to trading results in the quarter.
Despite Friday’s stock gain, Citigroup remains the cheapest of the six biggest U.S. banks from a valuation perspective. The stock was down 27% in 2022, as of Thursday’s close, when its shares hit a 52-week low.
To help turn around the firm, Fraser has announced plans to exit retail banking markets outside the U.S. and set medium-term return targets in March.
Earlier Friday, Wells Fargo posted mixed results as the bank set aside funds for bad loans and was stung by declines in its equity holdings.
On Thursday, bigger rival JPMorgan Chase posted results that missed expectations as it built reserves for bad loans, and Morgan Stanley disappointed on a worse-than-expected slowdown in investment banking fees.
Bank of America and Goldman Sachs are scheduled to report results on Monday.
This story is developing. Please check back for updates.

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Here are the numbers: Earnings per share of 74 cents, including an 8 cent per share impact tied to impairments.
Revenue: $17.03 billion versus $17.53 billion estimate
CEO Charlie Scharf noted in his statement that he expected “credit losses to increase from these incredibly low levels” in the future.

Charles Scharf
Qilai Shen | Bloomberg | Getty Images

Wells Fargo said Friday that second-quarter profit declined 48% from a year earlier as the bank set aside funds for bad loans and was stung by declines in its equity holdings.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: 82 cents adjusted vs 80 cents expected
Revenue: $17.03 billion vs $17.53 billion expected

Profit of $3.12 billion, or 74 cents per share, fell sharply compared with $6.04 billion, or $1.38, a year earlier, the bank said in a statement. Shares of the company dropped nearly 1% in premarket trading.
Excluding the impairment, the bank would have earned 82 cents per share in the quarter, edging out the 80 cents per share estimate from analysts surveyed by Refinitiv.
“While our net income declined in the second quarter, our underlying results reflected our improving earnings capacity with expenses declining and rising interest rates driving strong net interest income growth,” CEO Charlie Scharf said in the release.
Analysts and investors have been closely poring over bank results for any signs of stress on the U.S. economy. While borrowers of all types have continued to repay their loans, the possibility of a looming recession triggered by surging interest rates and broad declines in asset values has begun to appear in results.
Wells Fargo said “market conditions” forced it to post a $576 million second-quarter impairment on equity securities tied to its venture capital business. The bank also had a $580 million provision for credit losses in the quarter, which is a sharp reversal from a year earlier, when the bank benefited from the release of reserves as borrowers repaid their debts.

Scharf noted in his statement that he expected “credit losses to increase from these incredibly low levels.”
Notably, the bank’s revenue fell 16% to $17.03 billion in the quarter, roughly half a billion dollars below analysts’ expectation, as fees from mortgage banking plummeted to $287 million from $1.3 billion a year earlier. The company also said that it had divested operations that earned $589 million in the year-earlier period.
Higher interest rates did provide a tail wind in the quarter, however. Net interest income climbed 16% from a year earlier; Scharf said that the benefit from higher rates would “more than offset” further pressure on fees in their mortgage unit and other operations.
Last month, Wells Fargo executives disclosed that second-quarter mortgage revenue was headed for a 50% decline from the first quarter as sharply higher interest rates curtailed purchase and refinance activity.
It’s one of the impacts of the Federal Reserve’s campaign to fight inflation by raising rates by 125 basis points in the second quarter alone. Wells Fargo, with its focus on retail and commercial banking, was widely expected to be one of the big beneficiaries of higher rates.
But concerns that the Fed would inadvertently tip the economy into a recession have grown this year, weighing heavily on the shares of banks. That’s because more borrowers would default on loans, from credit cards to mortgages to commercial lines of credit, in a recession.
Led by Scharf since October 2019, the bank is still operating under a series of consent orders tied to its 2016 fake accounts scandal, including one from the Fed that caps its asset growth. Analysts will be keen to hear from Scharf about any progress being made to resolve those orders.
Shares of Wells Fargo have dropped 19% this year, roughly in line with the decline of the KBW Bank Index.
Citigroup also disclosed results on Friday; the bank topped estimates for profit and revenue on rising interest rates and strong trading results.
On Thursday, bigger rival JPMorgan Chase posted results that missed expectations as it built reserves for bad loans, and Morgan Stanley disappointed on a worse-than-expected slowdown in investment banking fees.
Bank of America and Goldman Sachs are scheduled to report results Monday.
This story is developing. Please check back for updates.

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