Finance

Uber Eats delivery
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Check out the companies making headlines in midday trading.
Uber, DoorDash – Shares of Uber slumped 4.3% and DoorDash fell 7.4% on news that Amazon agreed to take a stake in Grubhub in a deal that will give Prime subscribers a one-year membership to the food delivery service.

Coinbase – Coinbase slipped 6.7% after Atlantic Equities downgraded the crypto exchange to neutral and slashed its price target, citing increased volatility in the industry.
Netflix – Netflix dropped nearly 1% after Barclays slashed its price target for the streaming service to $170 from $275, anticipating a subscriber loss in the second quarter amid increased competition.
Rocket Companies – Shares of the consumer fintech company jumped 4.5% after Wells Fargo upgraded it to an overweight rating and said Rocket’s set up for a big comeback after tumbling more than 42% this year. Despite a “tough mortgage backdrop,” Rocket will “continue to take market share from its peers,” Wells Fargo said.
Rivian — The electric vehicle maker surged more than 10% after saying it’s on track to deliver 25,000 vehicles this year. In its most recent quarter, Rivian said it produced 4,401 vehicles, and delivered 4,467, in line with the company’s expectations.
Energy stocks – Energy stocks slid Wednesday as oil continued its slump from Tuesday, slipping to about $95 a barrel. The S&P 500 Energy sector fell 1.7% with shares of Marathon Oil, Conocophillips and Halliburton falling 2.1%, 1.5% and 1.7%, respectively. Exxon Mobil fell 1.8%.

Cruise stocks – Norwegian Cruise Line Holdings slumped 9.6%, Royal Caribbean fell 7.2%, and Carnival eased 6.8% on concern about second-half cruise ship demand. Norwegian said it would no longer require guests to test for Covid-19 before joining a cruise, unless required by local regulations.
— CNBC’s Tanaya Macheel, Samantha Subin and Sarah Min contributed reporting.

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Voyager commenced bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York on Tuesday.
The company suffered huge losses from its exposure to crypto hedge fund Three Arrows Capital, which went bust last week.
Sam Bankman-Fried’s Alameda Research is listed as Voyager’s largest creditor, with an unsecured claim of $75 million.

Voyager said it has roughly $1.3 billion of crypto on its platform and holds over $350 million in cash on behalf of customers at New York’s Metropolitan Commercial Bank.
Justin Sullivan | Getty Images

Beleaguered crypto brokerage Voyager Digital has filed for Chapter 11 bankruptcy protection, becoming the latest casualty of chaos in digital asset markets.
Voyager commenced bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York on Tuesday, according to a filing from the company. The filing lists assets of between $1 billion and $10 billion, and liabilities in the same range.

In a statement, the company said it has roughly $1.3 billion of crypto on its platform and holds more than $350 million in cash on behalf of customers at New York’s Metropolitan Commercial Bank.
Voyager suffered huge losses from its exposure to crypto hedge fund Three Arrows Capital, which went bust last week after defaulting on loans from a number of firms in the industry — including $650 million from Voyager.
“We strongly believe in the future of the industry but the prolonged volatility in the crypto markets, and the default of Three Arrows Capital, require us to take this decisive action,” Voyager CEO Stephen Ehrlich said in a tweet early Wednesday.
The Toronto-listed company’s shares have lost nearly 98% of their value since the start of 2022.
Voyager says it is still pursuing the recovery of funds from Three Arrows Capital, or 3AC as it’s otherwise known, including through court-supervised proceedings in the British Virgin Islands and New York.

Last week, Voyager paused all withdrawals, deposits and trading on its platform due to “current market conditions.” Ehrlich at the time said Voyager was seeking additional time to explore “strategic alternatives with various interested parties.”
Several other companies, including Celsius, Babel Finance and Vauld, have taken similar steps. On Tuesday, Vauld received a takeover offer from Nexo, a rival firm, after suspending its services.
The crypto market is grappling with a severe liquidity crisis as platforms struggle to meet a flood of withdrawals from customers amid a sharp fall in digital currency prices.
The declines in crypto started with a broad fall in risky assets as the Federal Reserve embarked on monetary tightening, and gathered pace following the collapse of Terra, a so-called stablecoin venture that was worth around $60 billion at its height.
Bitcoin, the world’s largest token, had its worst month on record in June, plunging 38%. Investors are bracing for a much longer downturn in digital currencies known as a “crypto winter.”

Restructuring plan

Voyager said the bankruptcy proceedings would allow it to implement a restructuring process so that customers can be reimbursed.

If all goes according to plan, users would receive a combination of crypto in their accounts, proceeds from the recovery of funds from Three Arrows Capital, shares of the newly reorganized company and Voyager tokens.
Clients with U.S. dollar deposits will regain access to their funds once a reconciliation and fraud prevention process with Metropolitan Commercial Bank is complete, Voyager said.
Alameda Research, the quant trading shop of billionaire Sam Bankman-Fried, had extended Voyager a line of credit worth $500 million in cash and crypto last month in a futile attempt to tide the company over.
Alameda was listed as Voyager’s largest creditor in the bankruptcy filing Tuesday, with an unsecured claim of $75 million.
Bankman-Fried, who also founded crypto exchange FTX, has become a lender of last resort for the troubled industry. He recently agreed to a deal giving FTX the option to buy crypto lending company BlockFi for up to $240 million — a dramatic drawdown from the $3 billion it was last privately valued at.
Some have likened Bankman-Fried’s efforts to the role played by famous banker John Pierpont, or J.P., Morgan in rescuing Wall Street lenders from collapse after a series of bank runs known as the Panic of 1907, which preceded the establishment of the Fed.

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Check out the companies making headlines before the bell:
Uber (UBER), DoorDash (DASH) – Uber fell 3.1% in the premarket while DoorDash tumbled 7.5%, following the news that Amazon (AMZN) struck a deal to add membership in rival food delivery service Grubhub as a free benefit for its “Prime” members. Amazon’s deal also gives it the option to take a stake in Grubhub.

Spirit Airlines (SAVE) – Spirit won the right to operate peak-hour afternoon and evening flights at Newark-Liberty International Airport. Spirit had been trying to win the slots that Southwest Airlines (LUV) vacated when it stopped operating at Newark in 2019, but the FAA initially opted not to award them while it assessed traffic conditions at the airport.
Altria (MO) – Altria gained 2.7% in the premarket after the FDA temporarily suspended its ban on Juul e-cigarette products. Altria has a 35% stake in Juul, which will be allowed to keep its products on the market while it appeals the FDA’s ban.
Coinbase Global (COIN) – Coinbase was downgraded to “neutral” from “overweight” at Atlantic Equities, which cites a number of factors including questions about the cryptocurrency exchange operator’s ability to attract talent. Coinbase fell 3.3% in premarket trading.
Rocket Companies (RKT) – Rocket Companies rallied 4.4% in premarket trading after Wells Fargo Securities upgraded the fintech company’s stock to “overweight” from “equal weight.” Rocket shares have fallen about 41% so far this year.
Sempra Energy (SRE) – Sempra Energy was upgraded to “buy” from “neutral” at Goldman Sachs, which feels the energy company’s stock is undervalued after falling more than 9% over the past month.

Resolute Forest Products (RFP) – The paper and wood products maker agreed to be acquired by Montreal-based paper products producer Paper Excellence Group for $20.50 per share, plus a contingent value right. Resolute Forest Products soared 66.8% in premarket action.
Kornit Digital (KRNT) – The Israel-based developer of digital printing technologies for the apparel industry saw its stock tumble 24.3% in the premarket. That came after Kornit slashed its current-quarter guidance almost in half and said the third quarter may see a similar slowdown, due to a pullback in e-commerce following the pandemic-induced surge.

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Fast Money Podcast
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The recent tech rally may be doomed.
Money manager Dan Suzuki of Richard Bernstein Advisors warns the market is far from bottoming — and it’s a concept investors fail to grasp, particularly when it comes to growth, technology and innovation names.

“The two certainties in this world of uncertainty today is that profits growth is going to continue to slow and liquidity is going to continue to tighten,” the firm’s deputy chief investment officer told CNBC’s “Fast Money” on Tuesday. “That’s not a good environment to be jumping into these speculative bubble stocks.”
Fresh off the holiday weekend, the tech-heavy Nasdaq bounced back from a 216-point deficit to close almost 2% higher. The S&P 500 also mustered a turnaround, erasing a 2% loss earlier in the day. The Dow closed 129 points lower after being off 700 points in the session’s early hours.
Suzuki suggests investors are playing with fire.
It’s kind of a do not touch story,” he said. “The time to be bullish on these stocks as a whole is if we are going to see signs of a bottoming in profits or you’re seeing signs that liquidity is going to get pumped back into the system.”
However, the Federal Reserve has been taking back the punch bowl. And it has serious implications for almost all U.S. stocks, according to Suzuki.

“Whatever company you want to pick, whether it’s the cheapest companies, the companies that are putting up the best cash flows or the highest quality companies, the thing that they all have in common is that they benefit tremendously from the past five years of record liquidity,” he said. “It basically created a bubble.”
Suzuki and his firm’s bubble call stems back to June 2021. Last May, Suzuki told “Fast Money” a bubble was hitting 50% of the market. He’s still telling investors to play defense and target contrarian plays.
“Look for things that are bucking the trend, things that have a lot of positive, absolute upside from here,” said Suzuki, who’s also a former Bank of America-Merrill Lynch market strategist.
The best option may be going halfway around the world. He only sees China as attractive, and investors will need a 12 to 18 month time horizon.

China: ‘Precipice’ of bull market?

“China’s market [is] much, much cheaper on a valuation basis. From a liquidity perspective, they’re like the only major economy out there that’s trying to pump liquidity into its economy,” noted Suzuki. “That’s the opposite of what you’re seeing outside of China and the rest of the world.”
He believes it could be on the “precipice” of a bull market as long as profits growth carries into the broader economy.
Even if he’s right, Suzuki urges investors to be prudent.
“If we’re in a global slowdown that may ultimately turn into a global recession, this is not the time to be pedal to the medal in risk anywhere in the portfolio,” Suzuki said.
Disclaimer

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Traders on the floor of the New York Stock Exchange, June 28, 2022.
Source: NYSE

U.S. equities futures were flat Tuesday night after the market staged a big midday reversal, with falling bond yields giving a boost to growth stocks, and ahead of a batch of economic data.
Futures tied to the Dow Jones Industrial Average hovered around the flat line. S&P 500 futures and Nasdaq 100 futures were also little changed.

In regular trading, the Dow lost 129 points to start the holiday-shortened week, trimming steeper losses from earlier in the session. The S&P 500 rallied back from a 2% loss in the final hour of trading and finished the day up 0.2%. The tech-heavy Nasdaq Composite outperformed, jumping 1.75%.
Whether the market is about to fall into a recession continued to worry investors after the benchmark 10-year U.S. Treasury yield fell below the 2-year yield. The so-called yield curve inversion historically has been a warning sign that the economy may be falling or has already fallen into recession.
Oil prices tumbled below $100 a barrel Tuesday, further reflecting a potential economic slowdown. Energy stocks were the top decliners Tuesday. The sector as a whole fell 4%. It was the top performing sector in the S&P 500 for the first half of they year, the benchmark index’s worst first half since 1970.
However, Wall Street analysts say a recession could be mild. On Tuesday Credit Suisse said it sees the U.S. dodging a recession as it slashed its year-end S&P 500 target to reflect the effect of higher capital cost on stock valuations.
“[The market] has been bracing for [a recession], and now it may actually be embracing it, the idea being: let’s just get it over with, we’re going have a recession, let’s do it. Let’s clean out the excesses and start all over again,” said Ed Yardeni of Yardeni Research on CNBC’s “Closing Bell: Overtime.”

“The market starting to look ahead into next year and that could very well be a recovery year from whatever this recessionary environment turns out to be,” he added. “We’re all kind of doing a Hamlet recession – to be or not to be. I’m kind of thinking that there’s going to be a mild recession.”

Stock picks and investing trends from CNBC Pro:

NewEdge Wealth chief investment officer Cameron Dawson echoed that sentiment.
“Do we have a kind of drawdown that looks to be in that 30% range, which is the average for recessions, or something that looks closer to down 50%, which is what we saw back in the early 2000s and 2008 where we had two debt crises?” she said. “We don’t see a debt crisis. We think that we could start to find some value around that 3,400-3,500 level because that’s what gets us back to the pre-Covid highs.”
There are no major earnings reports scheduled for Wednesday, but there will be a slew of economic reports coming out, including the minutes of the Federal Reserve’s June meeting in the afternoon.
Investors are also looking forward to the latest reading on the Mortgage Bankers Association’s mortgage purchase index at 7:00 a.m. ET Wednesday. The latest Markit and Institute for Supply Management manufacturing PMI data will be released at 9:45 a.m. and 10:00 a.m., respectively. The Job Openings and Labor Turnover Survey, or JOLTS, will also be released at 10:00 a.m.

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A Ford F-150 Lightning on display at the New York Auto Show, April 13, 2022.
Scott Mlyn | CNBC

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Two years ago scarcely anyone in mainstream finance had heard of Sam Bankman-Fried, or ftx, the cryptocurrency exchange he launched in 2019. Both gained greater prominence, first as the crypto craze reached fever pitch and then as crypto fell to Earth. Mr Bankman-Fried (widely known as sbf) has lately been at the centre of attempts to rescue beleaguered firms. To some observers, the role calls to mind the rescue missions organised by John Pierpont Morgan and America’s other banking scions in the early 20th century. The comparison is surprisingly instructive. The recent slump has left destruction in its wake. Some crypto-lending firms, notably Celsius, have collapsed; some stablecoins, like terra, have been obliterated. At least one crypto hedge fund, Three Arrows Capital, has gone bust. Estimates of sbf’s personal wealth have tumbled, too, from $26bn just over three months ago to nearer $8bn now. Nonetheless, his companies (ftx and Alameda, a trading firm) seem to be the great survivors of the recent chaos. ftx had kept employee numbers relatively low; sbf has said the exchange is still profitable. Well-timed funding rounds early this year saw its global and American arms raising $400m each. That has enabled sbf to help others in need. In June Voyager Digital, a broker, secured loans worth $485m from Alameda. BlockFi, another trader, has received a revolving line of credit from ftx’s American arm.To some this harks back to America’s banking panic of 1907. The economy was in recession; towards the end of that year the thinly capitalised Knickerbocker Trust Company, one of America’s largest financial firms at the time, collapsed. J.P. Morgan went on to orchestrate a series of private rescues with other financiers, offering deposits in the tens of millions of dollars to various banks in order to prevent runs. Those actions are usually credited with preventing a deeper, more damaging crisis. No other trusts went under.At first glance, then, the comparison is a flattering one for sbf. But 1907 was not the Morgan family’s only attempt at a big bail-out. When the Wall Street crash struck in 1929, J.P. Morgan junior, like his father, sought to bring together a gang of plutocrats to stem the tide. Several bankers and brokers pledged to buy $125m in stocks, equivalent to around 0.1% of America’s gdp at the time (which would be about $27bn today). The plan failed miserably. The purchases perhaps pushed out the stockmarket’s collapse by a few days, but did not prevent it imploding. The Dow Jones Industrial Average index of stocks fell by around 35% between early September 1929 and the end of the year. By its nadir in 1932, it was almost 90% lower. Historians are divided over why one intervention worked but not the other. Perhaps the panic in 1929 was too far gone for private purchases to make a difference, for instance. Other research suggests that the success of 1907 may have been overplayed, and that it was action by the Bank of France to calm domestic markets that spilled over to America and halted the mayhem. The debate suggests that identifying sbf’s role in quelling chaos today may be just as hard. The rout could simply continue; conversely, what might look like a success for sbf may in fact reflect something else. A cynic might point out that sbf might be striking deals with other crypto firms not because he wants to save the industry from collapse, but because he has spotted an opportunity to snap up some of his competitors’ operations for pennies on the dollar. On July 1st Zac Prince, BlockFi’s chief executive, said that the firm’s credit line from ftx had been increased to $400m, and included an option to acquire BlockFi for up to $240m. That looks like a bargain compared with the valuation of $5bn that BlockFi was reportedly seeking during a fundraising round last year. Even if sbf is not attempting to save crypto, though, history remains relevant. The banking panic of 1907 was a proximate reason for the creation of the Federal Reserve and the beginnings of the progressive taxation of income in America, as well as a big expansion of antitrust law. Instead of being hailed as a hero Morgan senior became the focal point for concerns that power was excessively concentrated in the hands of a small number of financiers. Now, too, there is a possibility that chaos leads to more stringent oversight, particularly if the volatility in digital assets spills over to other markets, galvanising regulators. Boosters may see a J.P. Morgan in Sam Bankman-Fried and ftx. They might come to regret needing one.Read more from Buttonwood, our columnist on financial markets:What past market crashes have looked like (Jun 30th)How attractively are shares now priced? (Jun 25th)Is trading on America’s stockmarket fair? (Jun 16th)For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Nexo has signed a term sheet with Vauld giving it 60 days of exclusive talks to explore an all-equity acquisition of the company.
If successful, Nexo said it plans to restructure the company and pursue an expansion in Southeast Asia and India.
Vauld on Monday paused operations and said it was exploring restructuring options due to “financial challenges.”

Bitcoin, the world’s biggest cryptocurrency, is down more than 50% since the start of 2022.
Nurphoto | Getty Images

Beleaguered cryptocurrency lender Vauld has been thrown a lifeline from larger competitor Nexo, in a sign of mounting consolidation in the crypto market.
Nexo said Tuesday it had signed a term sheet with Vauld giving it 60 days of exclusive talks to explore an all-equity acquisition of the company. If successful, Nexo said it plans to restructure the company and pursue an expansion in Southeast Asia and India.

Vauld on Monday paused operations and said it was exploring restructuring options due to “financial challenges” posed by a sharp plunge in cryptocurrencies. The Singapore-based company is backed by the likes of Coinbase and Silicon Valley billionaire Peter Thiel.
It’s the latest firm to get caught up in the chaos gripping the crypto world lately. In the last month alone, Celsius, another crypto lending firm, put an indefinite pause on withdrawals citing “extreme market conditions.” Meanwhile, Three Arrows Capital, a crypto hedge fund, applied for bankruptcy protection days after collapsing into liquidation.

Asked how much Nexo was willing to pay for Vauld, co-founder Antoni Trenchev said it was “premature” to speak about a valuation at this stage. However, he added he was “optimistic” about reaching a deal.
“We are starting the due diligence,” Nexo’s chief told CNBC. “We have a 60-day window of exclusivity where they will open up the books. You will see everything. Is there a hole? How big is the hole? Where are the assets? Who are the counterparties?”
Nexo previously gave Celsius a letter of intent offering to buy the company, however it said the company refused its offer.

With no government to turn to, several crypto firms have sought the help of their peers in hopes of a bailout instead.

Sam Bankman-Fried, the billionaire behind crypto exchange FTX, has become a lender of last resort for the industry. Last week, FTX signed a deal giving it the option to buy crypto lending firm BlockFi, while Bankman-Fried’s quant trading shop Alameda Research also extended a credit line to Voyager Digital, an embattled crypto brokerage that last week froze all operations.
Trenchev compared the current market situation to the “panic of 1907,” a series of bank runs that preceded the establishment of the Federal Reserve in 1913. Without a central bank to depend on at the time, the remaining lenders that survived the crash were rescued by top financiers, most notably J. P. Morgan.
“I do think we’re going to see a period of consolidation and mergers and acquisitions. And it will end up with fewer companies, but stronger ones with better business practices,” he said.
Bitcoin had its worst month on record in June, losing more than 38% of its value. The world’s largest cryptocurrency is down more than 50% since the start of 2022.

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