Finance

Take a look at some of the biggest movers in the premarket:
PG&E (PCG) – The California utility’s shares jumped 2.3% in the premarket after it reached legal settlements over two fires in Northern California. PG&E will pay $55 million and will not face any criminal prosecution over those fires.

Hewlett Packard Enterprise (HPE) – The enterprise computing company’s stock slid 3.5% in premarket trading after Morgan Stanley downgraded the stock to “underweight” from “equal weight” as part of an overall downgrade of the telecom and networking equipment industry. Morgan Stanley sees softening orders in the second half of 2022.
CarMax (KMX) – The auto retailer’s shares fell 2.2% in the premarket after a bottom-line miss for its latest quarter. CarMax earned 98 cents per share, falling short of the $1.25 per share consensus estimate, though revenue topped Street forecasts. The earnings miss came as sales volumes slowed and average selling prices continued to rise.
Crowdstrike (CRWD) – Crowdstrike jumped 3.6% in premarket action following a Goldman Sachs upgrade to “buy” from “neutral.” Goldman thinks the cloud computing company has shown strong execution while demand continues to ramp higher.
Albertsons (ACI) – The supermarket operator earned 75 cents per share for its latest quarter, 11 cents a share above estimates. Revenues also came in above analysts’ projections. Albertsons said it was able to effectively deal with increased supply chain and product costs.
Deutsche Bank (DB) – An undisclosed shareholder sold 5% stakes in both Deutsche Bank and rival German lender Commerzbank, generating a total of about $1.9 billion. Deutsche Bank lost 1.3% in premarket trading.

Chegg (CHGG) – Chegg slid 3.7% in the premarket after KeyBanc Capital Markets downgraded the stock to “sector weight” from “overweight.” KeyBanc is predicting a downtick in U.S. growth trends for the provider of educational products and services.
Cisco Systems (CSCO) – Citi downgraded Cisco to “sell” from “neutral,” saying that networking equipment competitors Juniper Networks (JNPR) and Arista Networks (ANET) are poised to gain market share from Cisco. The stock lost 2.6% in premarket trading.
CORRECTION: Morgan Stanley downgraded Hewlett Packard Enterprise’s stock to “underweight” from “equal weight.”

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Fintech firm Plaid has hired Ripsy Bandourian, formerly a vice president at Booking.com, as its head of Europe.
Plaid’s former head of international, Keith Grose, now focuses largely on running the U.K. business.
The company says it’s planning an “aggressive” expansion in Europe this year.

Ripsy Bandourian, head of Europe at Plaid.

LONDON — Financial technology firm Plaid has hired Ripsy Bandourian, a long-time Booking.com executive, to head up its European operations.
Bandourian joined Plaid last week and is working out of its Dutch offices in Amsterdam. She’ll be tasked with leading the San Francisco-based start-up’s expansion in continental Europe. Keith Grose, formerly Plaid’s head of international, now focuses largely on running the U.K. business.

The Armenian-born businesswoman brings a mix of experience to the world of fintech. She originally studied molecular biology at Brigham Young University in Provo, Utah, before moving to New York to take on a quantitative analyst job at Goldman Sachs. After a consulting stint with McKinsey, she moved to London to work at Apple’s European division.
Bandourian joined Booking.com in 2014, working for the online travel platform for more than eight years in a variety of roles focusing on product and marketing. She was most recently vice president of global accommodation partnerships, overseeing Booking.com’s relationships with hotel partners.
Bandourian told CNBC her reasons for joining Plaid were “personal” just as much as they were professional.
“I’ve lived my life on three different continents,” Bandourian said. “And there is absolutely no way for me to take my financial history with me. There are no tools, there are no ways to make it easier. And this is a use case.”
Plaid’s technology allows fintech companies like Venmo and Robinhood to connect to customers’ bank accounts so that users can log in and share their financial data securely. It’s part of a fast-growing trend known as “open banking.”

The company, which also offers payment tools in some markets, says it’s planning an “aggressive” expansion in Europe this year. Its services are currently available in seven European countries, including the U.K., Germany and France. Plaid also plans to roll out to other markets including Poland, Belgium and the Nordics soon.
“The plans are quite aggressive,” Bandourian said. “The investment that Plaid is making in Europe speaks to the opportunity that the company sees itself, and how deeply and how fast we’re evolving.”
Among Plaid’s plans for Europe is growing its headcount — the firm currently employs around 80 people in the region — and hiring individual country managers for France and Germany. Plaid’s clients in Europe include crypto exchange Kraken and dating app Bumble.
The open banking trend has gained significant traction in Europe over the years. That’s thanks in part to fintech-friendly regulations introduced in 2018 requiring banks to share user data with third parties at the request of consumers.
The number of open banking users in the continent reached 12.2 million in 2020, according to Statista data, a number that’s expected to rise to 63.8 million by 2024.
Big businesses and investors are taking note. Apple last month acquired Credit Kudos, a London-based fintech that uses consumers’ banking data to make more informed credit checks. Meanwhile, Visa bought Tink, a European competitor to Plaid, for over $2 billion.
Plaid was last privately valued at $13.4 billion after a $5.3 billion deal to be taken over by Visa fell apart.

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Official measures of producer and consumer prices in China rose in March by more than analysts expected, according to data released Monday.
“Rising food and energy price inflation limits the space for the PBoC to cut interest rates, despite the rapidly worsening economy,” Nomura’s chief China economist Ting Lu and a team said in a note.
The yield on China’s 10-year government bond fell below that of the U.S. for the first time in 12 years on Monday, according to Reuters.

Transportation fuel prices rose by 24.1% in China in March 2022 from a year ago, the largest increase within the country’s consumer price index.
Vcg | Visual China Group | Getty Images

BEIJING — Persistent inflation in China narrows the window for when the People’s Bank of China can cut interest rates and support growth, economists said.
Official measures of producer and consumer prices in China rose in March by more than analysts expected, according to data released Monday.

“Rising food and energy price inflation limits the space for the PBoC to cut interest rates, despite the rapidly worsening economy,” Nomura’s chief China economist Ting Lu and a team said in a note Monday.
Lu referred to his team’s report earlier this month that noted how China’s 1-year benchmark deposit rate is only slightly above the rate of consumer price increases. That reduces the relative value of Chinese bank deposits.
On an international level, higher U.S. interest rates narrows the gap between the benchmark U.S. 10-year Treasury yield and its Chinese counterpart, reducing the relative attractiveness of Chinese bonds. Cutting rates in China would reduce that gap further.
The yield on China’s 10-year government bond fell below that of the U.S. for the first time in 12 years on Monday, according to Reuters. Previously the Chinese bond yield tended to trade at a 100 to 200 basis point premium to the U.S.

“We think April could be the last chance for China to have a rate cut in the near term before [the] Fed’s potential balance sheet shrink,” said Bruce Pang, head of macro and strategy research at China Renaissance.

Fed meeting minutes released last week showed how policymakers generally agreed to reduce the central bank’s holdings of bonds, likely starting in May, at about double the rate prior to the pandemic. U.S. consumer price data is due out overnight.
“Rising inflation, if [it] continues, could further limit China’s room for policy maneuvers,” Pang said.
He noted how Chinese investors increasingly expect the PBOC to act after high-level government comments this month.
China will adjust monetary policy “when appropriate” to support growth, Premier Li Keqiang said at a meeting last week of the State Council, the top executive body.

Profit margin squeeze

The producer price index rose by 8.3% in March, slower than the 8.8% increase in February and the lowest since April 2021, according to Wind data. Coal and petroleum products contributed some of the largest gains.
Within the consumer price index, the largest increase was in transportation fuel, up by 24.1% year-on-year in March. The global price of oil has surged since the Russia-Ukraine war began in late February.
China’s consumer price index rose by 1.5% in March, up from 0.9% in February and the fastest since consumer prices rose by the same pace in December, Wind data showed. A sharp, 41.4% year-on-year decline in pork prices continued to drag down food inflation. Vegetable prices rose by 17.2%.
“China’s inflation dynamics implied a continued margin pressure on Chinese corporates,” said Bruce Liu, Beijing-based CEO of Esoterica Capital, an asset manager.
“March inflation was not the only force that brought down Chinese equity markets [on Monday], and the rising-real-yield-induced equity sell-off last Friday in the U.S. spilled over,” Liu said. “More Covid worries in multiple places outside Shanghai (Guangzhou, Beijing, etc.) also weighed on market sentiment, and investors got their hands full at the moment.”
The U.S. 10-year Treasury yield climbed to a three-year high Friday and rose further overnight on Monday to 2.793%, its highest since January 2019. China’s 10-year government bond yield held around 2.8075% Tuesday, according to Wind Information.

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Citi analysts expect the PBOC could, as soon as this month, cut at least a policy rate or the reserve requirement ratio — a measure of how much cash banks need to have on hand. They said the prolonged omicron wave requires more monetary easing.
“Inflation won’t constrain monetary policy for now, in our view,” the analysts said, “but could become more a source of concern in H2.”
They expect the producer price index to moderate due to last year’s high base — for a 5.6% annual increase — while the consumer price index will likely rise slightly — rising 2.3% for the year— as food prices remain elevated.
— CNBC’s Chris Hayes contributed to this report.

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In light of Russia’s unprovoked invasion of Ukraine, European leaders have been forced to rapidly accelerate plans to reduce their outsized dependence on Russian energy.
“For the continent, the war is much more of a game-changer than the pandemic ever was. I’m not talking just in terms of security and defense policies but notably about the entire economy,” said ING Head of Global Macro Research, Carsten Brzeski.

German Chancellor Olaf Scholz, French President Emmanuel Macron and Polish President Andrzej Duda attend a news conference ahead of a Weimar Triangle meeting to discuss the ongoing Ukraine crisis, in Berlin, Germany, February 8, 2022.
Hannibal Hanschke | Reuters

The war in Ukraine and the ensuing economic sanctions imposed on Russia will cause far bigger shifts for Europe’s economy and markets than previous crises like the coronavirus pandemic, economists have said.
In light of Russia’s unprovoked invasion of Ukraine, European leaders have been forced to rapidly accelerate plans to reduce their outsized dependence on Russian energy. The European Parliament on Thursday called for an immediate and total embargo of Russian oil, coal, nuclear fuel and gas.

However, this aggressive decoupling comes at a price for the European economy, driving up already high inflation to record levels and threatening to undermine the manufacturing recovery that began last year as economies attempted to re-emerge from the Covid-19 pandemic.
ING Head of Global Macro Research Carsten Brzeski noted last week that Europe is particularly at the risk of losing international competitiveness as a result of the war.
“For the continent, the war is much more of a game-changer than the pandemic ever was. I’m not talking just in terms of security and defense policies but notably about the entire economy,” Brzeski said.

“The eurozone is now experiencing the downside of its fundamental economic model, that of an export-oriented economy with a large industrial backbone and a higher dependency on energy imports.”
Having benefited from globalization and the division of labor in recent decades, the euro zone is now having to ramp up its green transition and pursuit of energy autonomy, while at the same time boosting spending on defense, digitization and education. Brzeski characterized this as a challenge that “can and actually must succeed.”

“If and when it does, Europe should be well-positioned. But the pressure on household finances and incomes will remain huge until it gets there. Corporate profits, meanwhile, will remain high,” he said.
“Europe is facing a humanitarian crisis and significant economic transition. The war is taking place in the ‘breadbasket’ of Europe, a key production area for grain and corn. Food prices will rise to unprecedented levels. Higher inflation in developed economies could be a matter of life and death in developing economies.”
Brzeski concluded that financial markets were “misguided” as European stocks attempt to grind higher, adding that “there’s no return to any sort of normality of any kind right now.”
Debt sustainability concerns
This tectonic shift for the European, and indeed global, economy will place additional pressure on central banks and governments caught between a rock and a hard place in juggling inflation against fiscal sustainability, economists acknowledge.
In a note Thursday, BNP Paribas predicted that a faster drive to decarbonize, higher government spending and debt, more intense headwinds to globalization and higher inflationary pressures would be an enduring theme.
“This backdrop presents central banks with a more challenging environment in which to conduct policy and keep inflation on target, not only diminishing their ability to commit to a certain policy path but making policy mistakes more likely,” BNP Paribas Senior European Economist Spyros Andreopoulos said.
He also noted that raising interest rates to rein in inflation will eventually make life difficult for fiscal authorities.

“While this is not an immediate concern, not least because governments have generally lengthened the average maturity of their debt in the low interest rate years, a higher interest rate environment may change the fiscal calculus as well. Eventually, debt sustainability concerns could resurface,” Andreopoulos said.
Low inflation throughout the euro zone’s recent history meant the European Central Bank was never forced to choose between fiscal sustainability and pursuing its inflation targets, since low inflation necessitated the accommodative monetary policy that aided fiscal sustainability.
“Politically, the ECB was able to – convincingly, in our view – deflect accusations that it was helping governments by pointing to low inflation outcomes,” Andreopoulos said.
“This time around, the ECB is having to tighten policy to rein in inflation against the backdrop of even higher public debt, a legacy of the pandemic, and continued pressures on the public purse.”

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U.S. stock futures inched higher in overnight trading as investors braced for a key inflation report Tuesday.
Futures on the Dow Jones Industrial Average gained 40 points or 0.1%, while S&P 500 futures and Nasdaq 100 futures rose marginally higher.

The overnight moves come as investors await the release of March’s highly anticipated consumer price index on Tuesday. The data is expected to show an 8.4% annual increase in prices — the highest level since December 1981 — according to economists polled by Dow Jones, with rising food costs, rents and energy prices expected as the main contributors to the spike.
“I think by the summer we’ll probably see the CPI inflation rate peaking and then the consumption deflator is going to peak somewhere between 6 and 7% and then come down to maybe 3 to 4% by the second half of the year going into next year,” Ed Yardeni, president of Yardeni Research told CNBC’s “Closing Bell: Overtime” on Monday.
During regular trading on Monday, the Dow Jones Industrial Average fell 413.04 points, or 1.19%, to 34,308.08, while the S&P 500 dropped 1.69% to 4,412.53. The tech-heavy Nasdaq Composite sank 2.18% to 13,411.96.
All 11 sectors ended the day in the red, with technology facing the brunt of the losses as investors continued to search for stability. Microsoft fell nearly 4%, while semiconductor Nvidia dropped more than 5%.

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Energy companies including ConocoPhillips and Occidental Petroleum also fell as oil prices declined on fears that lockdowns in China could hit demand. Oil prices have fluctuated in recent weeks amid the war in Ukraine, and WTI settled down 4.04% to $94.29 on Monday while Brent fell 4.18% to $98.48.

Meanwhile, shares of AT&T rose more than 7% after closing its WarnerMedia spinoff. Airline stocks including Delta Air Lines and Southwest also ended the day in the positive.
The 10-year Treasury yield topped 2.79%, its highest level since January 2019.  
Along with March CPI, investors are awaiting the start of earnings season set to kick off Wednesday with JPMorgan and Delta Air Lines, followed by several big banks on Thursday.

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Life Changes

Twenty-one percent of American workers took a new job in the past 12 months, according to a Grant Thornton survey.
Of them, 40% are actively looking for another job.
Such job-switchers may account for a large share of the labor-market churn in the near term as the Great Resignation continues.

Cecilie_arcurs | E+ | Getty Images

Two of every five workers who switched jobs over the past year are looking for work again, according to a new survey published by Grant Thornton, a consulting firm.
These workers will likely account for a good deal of churn in the labor market as the so-called Great Resignation continues, and this suggests employers may need to reconsider pay, benefits and other workplace issues.

“The power is going to the employee right now,” said Tim Glowa, who leads Grant Thornton’s employee listening and human capital services team. “They are in the driver’s seat.”

More from Life Changes:

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

Twenty-one percent of American workers took a new job in the past 12 months, according to the firm’s most recent State of Work in America survey published last week, which polled more than 5,000 employees.
Of those recent job-switchers, 40% are already actively looking for another job.
That’s a higher share than the 29% of all full-time employees who are actively looking — which means recent job-switchers are more likely to want a new gig than the overall population of American workers.

There’s likely some shared responsibility between workers and businesses for this “buyer’s remorse,” Glowa said.

For one, it may be due to a misalignment in job expectations versus reality — perhaps a bad manager or lack of career advancement possibilities, Glowa said. The dynamic is similar to buying a car and then realizing it’s a lemon, he added, likening it to a bait-and-switch by businesses.
Workers are benefiting from a hot labor market in which job openings are near record highs and pay has increased at its fastest clip in years, as businesses are forced to compete for talent.
“They’ve made the [recent] switch, and it’s proven to be very easy,” Glowa said of active job seekers. “So they’re willing to make that switch again.”

Almost 48 million people left their jobs voluntarily in 2021, an annual record. The demand from businesses for labor has rebounded faster than the supply of workers as the economy has emerged from its pandemic hibernation, which has helped create the favorable conditions for workers.
Almost 60% of those who recently took new jobs had two or more competing offers when they made their decision, according to the survey.
“The war for talent is continuing,” Glowa said. “It’s really not showing any signs of slowing down.”
Some workers may have also jumped at a big raise before weighing all the pros and cons of the prospective offer, he said.
Of the workers who switched jobs in the last year, 40% got a pay increase of at least 10%, according to Grant Thornton. That’s more than double the 18% of all survey respondents.  

Employees who switched jobs in the last year cited pay (37%), advancement opportunities (27%) and benefits other than health and retirement (18%) as the top three reasons for leaving. Pay and benefits were also the two biggest reasons respondents turned down other offers (42% and 33%, respectively).  
A yet-to-be-published Grant Thornton survey of human-resources managers demonstrates that companies are somewhat out of touch with the sources of employee stress — which means it may be tough for them to offer enticing benefits, Glowa said.
For example, employees cited personal debt, medical issues, mental health, daily inconveniences and the ability to retire as their top five drivers of stress. However, human resources leaders accurately guessed just one of those top stress-related issues (medical issues). More

A pedestrian walks in front of an AT&T location in New York.
Scott Mlyn | CNBC

Check out the companies making headlines in midday trading Monday:
AT&T — Shares of AT&T jumped 7.5% after the telecom giant announced that it closed its transaction with Discovery to spin off its WarnerMedia business. The combined company is called Warner Bros. Discovery. It began trading on the Nasdaq on Monday under the new ticker symbol WBD. JPMorgan also assigned an overweight rating to AT&T.

Nvidia — Nvidia’s stock fell 5.2% after Baird downgraded the chipmaker to neutral from outperform, citing concerns about order cancellations driven in part by a slowdown in consumer demand for PCs.
SailPoint Technologies — The cybersecurity company saw shares soar 29.2% after announcing Monday it will be acquired by private-equity firm Thoma Bravo for $6.9 billion, or $65.25 per share. The all-cash deal is expected to close in the second half of 2022.
Occidental Petroleum — Energy stocks were among the top decliners in the S&P 500, as oil prices dropped amid fears Covid lockdowns in China would depress global demand. Occidental Petroleum and Diamondback Energy fell 6.3% and 4.9%, respectively, while APA slid 4.5%. ConocoPhillips lost 4.9%.
Microsoft, Apple — Shares of tech giants were lower Monday as the 10-year Treasury yield climbed to its highest level since January 2019. Microsoft lost 3.9%, while Alphabet dipped 3.4%. Apple and Meta Platforms declined 2.6% and 2.6%, respectively.
Coinbase — Shares of the cryptocurrency services company fell 4.4% as the price of bitcoin dropped to its lowest level since March amid a broader sell-off in risk assets. Coinbase’s stock price is tied closely to the price of bitcoin since so much of its revenue being derived from trading fees.

KeyCorp — Regional bank stocks advanced as rates climbed. Regions Financial rose 1.9%, and Zions Bancorporation added 0.5%. KeyCorp, which was also upgraded by Wells Fargo, gained about 0.4%.
JetBlue — Shares of the airline gained 1.1% after the company said it’s cutting back its summer schedule in an effort to avoid flight disruptions, as it works to ramp up hiring this summer to meet a surge in travel demand.
 — CNBC’s Yun Li, Jesse Pound, Samantha Subin and Hannah Miao contributed reporting.

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Take a look at some of the biggest movers in the premarket:
Nio (NIO) – The China-based electric carmaker’s shares slumped 8.4% in premarket action after it suspended production due to Covid-19 related supply chain disruptions.

Veru (VERU) – The drugmaker’s shares surged 24.8% in the premarket after it reported “overwhelming” evidence of efficacy for its experimental drug for treating hospitalized Covid-19 patients. It will meet with the Food and Drug Administration to seek emergency use authorization for the treatment.
Sailpoint Technologies (SAIL) – The cybersecurity company’s shares soared 29.5% in premarket trading after it agreed to be acquired by private-equity firm Thoma Bravo for $6.9 billion or $65.25 per share.
Twitter (TWTR) – Twitter fell 1.5% in the premarket following the announcement that Elon Musk will not be joining Twitter’s board. Musk revealed a 9.2% stake last week, followed by news that he would be joining the board. Neither side gave a reason for the reversal.
Shopify (SHOP) – The e-commerce platform company’s stock added 1.1% in the premarket after it proposed a 10-for-1 stock split, as well as the creation of a new “founder share” that would increase CEO Tobi Lutke’s voting power to 40% from the current 34%.
AT&T (T) – AT&T added 1.9% in the premarket after completing the spin-off of its WarnerMedia unit to Discovery Communications late Friday, with the stock of the newly combined Warner Brothers Discovery (WBD) set to begin trading today under its new name and ticker symbol. Separately, Deutsche Bank named Warner Brothers Discovery a “top pick” given its robust entertainment content.

Nvidia (NVDA) – The graphics chipmaker’s stock slid 3% in premarket action, following the announcement that it would seek shareholder approval to double the number of authorized shares. That would give Nvidia the flexibility to take actions like stock splits and issuing equity incentives without a further shareholder vote.
Lowe’s (LOW) – Lowe’s fell 1% in the premarket after announcing the departure of David Denton as chief financial officer. Denton is leaving the home improvement retailer to take the same job at drugmaker Pfizer (PFE). He’ll be replaced by Senior Vice President Brandon Sink effective April 30.
JetBlue (JBLU) – The airline is cutting back its summer schedule in an effort to avoid flight disruptions, while working to ramp up hiring. JetBlue added 1% in premarket trading.

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