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U.S. stock market futures were modestly higher in overnight trading Tuesday after the S&P 500 closed in correction territory amid escalating tensions between Russia and Ukraine.
Futures contracts tied to the Dow Jones Industrial Average advanced 85 points. S&P 500 futures gained 0.35%, while Nasdaq 100 futures rose 0.5%.

During regular trading the Dow fell 483 points, or 1.42%, for its fourth straight negative session. At one point the 30-stock benchmark had been down more than 700 points. The S&P 500 shed 1.01%, and is now 10.25% below its Jan. 3 record close, putting the broad market index in correction territory. The Nasdaq Composite declined 1.23% for its fourth straight negative session.
On Tuesday afternoon President Joe Biden announced a first tranche of sanctions against Russia. The measures target Russian banks, the country’s sovereign debt and three individuals.
“While uncertainties remain, our work shows that historically military/crisis events tend to inject volatility into markets and often cause a short-term dip, but stocks tend to eventually rebound unless the event pushes the economy into recession,” Eylem Senyuz, senior global macro strategist at Truist wrote in a note to clients.
“Investor sentiment also suggests the bar for positive surprises is low,” the firm added.
All 11 S&P 500 sectors declined on Tuesday, led to the downside by consumer discretionary stocks, which fell 3%. Energy stocks moved lower despite a jump in oil prices. International benchmark Brent crude traded as high as $99.50 per barrel. West Texas Intermediate crude futures, the U.S. oil benchmark, hit a session high of $96, a price last seen in August 2014.

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“The contagion risk will completely feed into inflationary pressures as energy costs will skyrocket and that will derail large parts of the economic recovery coming out of Covid,” said Oanda’s Ed Moya.
“Geopolitical risks could lead to a slower growth cycle and that could remove the risk of a half-point Fed rate hike at the March 16th FOMC decision,” he added.
Wall Street is betting that there’s a 100% chance of a rate hike at the Federal Reserve’s March meeting, according to the CME Group’s FedWatch tool. With inflation running hot, calls for a 50-basis point hike at the March meeting had been accelerating.
As tensions build between Russia and Ukraine, yields have retreated, with the yield on the benchmark U.S. 10-year Treasury falling below 2% as investors seek out safe-haven assets.
As of Friday 78% of S&P 500 companies that have reported have topped earnings estimates, while 78% have exceeded revenue expectations, according to data from FactSet.

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People shop at a home improvement store in Bethesda, Maryland, on February 17, 2022.
Mandel Ngan | AFP | Getty Images

Check out the companies making headlines in midday trading Tuesday.
Home Depot — Shares of the home improvement retailer fell 8.8% with the broader market sell-off, despite the company reporting a quarterly beat on profit, revenue and comparable store sales for the most recent quarter. Home Depot reported earnings of $3.21 per share and announced a 15% dividend increase.

Medtronic — The medical device maker gained 3.1% after the company reported a mixed quarter, including a revenue miss and an adjusted profit beat. Medtronic said procedure volumes are improving and that strong demand for its heart devices helped drive the quarter.
Kraft Heinz — Shares of the food and beverage company added 5% after the company increased its long-term growth targets and reiterated its adjusted EBITDA guidance for 2022 of between $5.8 billion and $6 billion.
Tempur Sealy — The mattress manufacturer’s shares tumbled 19.4% after the company reported adjusted quarterly earnings that missed analysts’ estimates by 8 cents per share, as well as revenue for the quarter that fell short of forecasts. The company said results were impacted by costs that outpaced sales.
Houghton Mifflin Harcourt — The publishing company saw its shares jump 15.3% following news that private equity firm Veritas Capital would buy it for $21 per share in cash or about $2.8 billion.
SoFi — The digital financial services firm’s shares fell 9.9% after the company announced it will buy Technisys, a maker of banking software, for about $1.1 billion in stock. SoFi said the deal will help it generate up to $800 million in additional revenue through 2025.

Krispy Kreme — The donut company saw its shares rise 8.3% after it reported its first quarterly profit since becoming a public company, though earnings fell short of Wall Street’s expectations. CEO Mike Tattersfield said Krispy Kreme is, like the broader restaurant industry, experiencing inflation. But, the company took it as an opportunity to raise prices, which it did twice in the quarter.
DraftKings — Shares of the sports betting company gained 7.5% despite a downgrade by Wells Fargo to equal weight from overweight. The firm cut its price target on DraftKings to $19 per share from $41 per share, noting its concern about the company’s path to profitability given its expense increases. Investors may have been buying the dip after the shares fell more than 21% on Friday on a higher than expected adjusted EBITDA loss for 2022.
Ford — The automaker’s shares fell 4.1% after Wells Fargo said in a note that a spin-off of the company’s battery electric vehicle business is not compelling. Wells also reiterated the stock as overweight.
McDonald’s — Shares of the fast food chain gained 1.4% before pulling back, after billionaire investor Carl Icahn launched a proxy fight with the company over its treatment of pigs. Icahn is pushing for two board seats and for the chain to to require all its U.S. suppliers to move to “crate-free” pork.

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Consumers reported losing more than $5.8 billion to fraud in 2021, a 70% increase over the prior year, the Federal Trade Commission said Tuesday.
Almost 2.8 million people filed a fraud complaint, an annual record.
Imposter scams were most prevalent, but investment scams cost the typical victim the most money.

krisanapong detraphiphat | Moment | Getty Images

American consumers reported losing more than $5.8 billion to fraud last year, up from $3.4 billion in 2020 (an increase of more than 70%), the Federal Trade Commission said Tuesday.
Almost 2.8 million consumers filed a fraud report to the agency in 2021 — the highest number on record dating back to 2001, according to the FTC. About 25% of those scams led to a financial loss, with the typical person losing $500.

The true toll is almost certainly higher since some incidents likely weren’t reported to the agency.
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Those figures also don’t include reports of identity theft and other categories. More than 1.4 million Americans also reported being a victim of identity theft in 2021; another 1.5 million filed complaints related to “other” categories (including credit reporting companies failing to investigate disputed information, or debt collectors falsely representing the amount or status of debt). Both sums are annual records, according to the FTC.
Fraud has ballooned during the Covid-19 pandemic, as con artists have preyed on consumer fear and confusion. They peddled fake health products (such as hand sanitizer and masks) and used stolen data to file for unemployment and other benefits in victims’ names, for example.
Imposter scams were the most prevalent form of fraud in 2021, accounting for more than a third of reports, the FTC said. The typical victim lost $1,000.

In such scams, criminals pretend to be someone else to steal money or sensitive personal information. They may include romance scams, as well as people falsely claiming to be a government official, a relative in distress, a well-known business or a technical support expert, for example, according to the FTC.
However, other forms of fraud were costlier on a per-person basis — investment fraud cost $3,000 per victim in 2021, for example, the largest such sum. Business and job-opportunity scams cost the typical victim almost $2,000.
Younger Americans tended to be fraud targets most frequently, but those over age 70 reported losing more money. The typical person over age 80 lost $1,500, triple that of those in their 20s.   

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About 6% of men at age 35 are unemployed, according to RAND Corp. By that age, 64% of the jobless had been arrested as adults and 46% had been convicted.
A criminal record can create an additional barrier to employment that’s unrelated to job skill, if an employer conducts a background check.

Geri Lavrov | Moment | Getty Images

More than half of unemployed men in their 30s have criminal records — a dynamic with implications for hiring practices and ongoing challenges finding workers during the pandemic-era labor crunch, according to research published by economists at RAND Corp.
About 6% of men at age 35 are unemployed, according to the study. By that age, 64% of those jobless males had been arrested as adults. Forty-six percent had been convicted of a crime, and 27% had been incarcerated.

The study is the first to estimate the prevalence of a criminal record among the unemployed population, according to RAND.
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Many of these individuals have had difficulty finding employment despite arrests and convictions that happened years earlier, which suggests the stigma of a criminal record hurts job seekers for years, according to Shawn Bushway, lead author of the study and a senior policy researcher at RAND, a nonprofit research organization.
That stigma hurts an applicant’s chances and compounds issues such as lower levels of education that already diminish their likelihood of success, he said.
“These folks often … have an additional barrier unrelated to job skill: the ability to get a job if there’s a background check,” said Bushway, who’s also a professor of public administration and policy at the State University of New York at Albany.

“If you’re an employer and have a background check that’s very restrictive, you’re going to not hire a lot of people,” he added.

Meanwhile, employers have had a tough time finding workers to fill vacancies. There have been record job openings and levels of quitting in recent months, trends linked to the “Great Resignation” or “Great Reshuffle.”
Millions of Americans have stayed out of the workforce even as the U.S. economy has come out of hibernation — whether due to Covid-related health fears, child care duties, early retirements or other reasons — effectively shrinking the labor pool.
However, research suggests a criminal record reduces access to job opportunities.
Applicants without criminal records were 60% more likely to get a job callback from employers, even though the records of other applicants were minor (a single low-level, nonviolent felony approximately two years earlier), according to a 2017 University of Michigan study.

“There are lots of people who get convicted once and never get convicted again. The majority of people who go to prison don’t go back,” Bushway said. “How long does this record have to hang over their head?”
The probability of unemployed men in their 30s having a criminal record isn’t correlated to race — the chances are similar across white, Black and Hispanic jobless men, according to RAND.
However, this doesn’t mean the labor experience is felt similarly across racial groups. That’s because 35-year-old Black men are almost twice as likely as white men to be unemployed (a 9% unemployment rate versus 5%, respectively), according to the study. Black men are also much more likely than other groups to have a criminal record.
The RAND study analyzed data from the National Longitudinal Survey of Youth, examining the experience of about 9,000 men from 1997 through 2017. The study defines unemployment as being without a job for four weeks or more over the past year.

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Check out the companies making headlines before the bell:
Home Depot (HD) – The home improvement retailer’s stock rose 1% in the premarket after its quarterly profit and revenue beat Wall Street forecasts. Home Depot earned $3.21 per share, 3 cents above estimates, and comparable-store sales also beat estimates. Home Depot also announced a 15% dividend increase.

Macy’s (M) – Macy’s beat estimates by 45 cents with adjusted quarterly earnings of $2.45 per share, and the retailer’s revenue beat estimates as well. Macy’s also authorized a new $2 billion share buyback program and announced a 5% dividend increase. The stock rallied 7.9% in premarket action.
Tempur Sealy (TPX) – The mattress company’s stock slid 5% in the premarket after its adjusted quarterly earnings of 88 cents per share missed estimates by 8 cents, and revenue fell short of Street forecasts. Tempur Sealy’s results were impacted by costs that grew faster than sales.
Medtronic (MDT) – The medical device maker’s shares reported a mixed quarter. Revenue missed forecasts and its adjusted quarterly profit beat estimates by a penny at $1.37 per share. Medtronic said it is seeing improved procedure volumes, and its most recent quarter was driven by strong demand for its heart devices. The stock initially slid 1.2% in the premarket but then erased that loss.
Houghton Mifflin (HMHC) – The publishing company agreed to be bought by private equity firm Veritas Capital for $21 per share in cash or about $2.8 billion. The stock surged 14.9% in premarket trading.
SoFi Technologies (SOFI) – The financial technology firm announced a deal to buy banking software maker Technisys for about $1.1 billion stock, saying the addition will generate up to $800 million in additional revenue through 2025. SoFi fell 2.7% in premarket action.

Tegna (TGNA) – The TV station operator’s shares jumped 7.4% in the premarket after agreeing to a $24 per share buyout deal with private equity firms Standard General and Apollo Global Management (APO).
McDonald’s (MCD) – Investor Carl Icahn launched a proxy fight for two board seats at the restaurant chain, as part of his push for more ethical treatment of pigs by McDonald’s suppliers. McDonald’s fell 1% in the premarket.
Krispy Kreme (DNUT) – The doughnut chain fell a penny shy of forecasts with adjusted quarterly earnings of 8 cents per share, although revenue topped Wall Street forecasts. Krispy Kreme was able to offset wage and commodity inflation with price increases. Krispy Kreme added 1.2% in premarket trading.
DraftKings (DKNG) – The sports betting company’s stock slid 5.5% in the premarket after Wells Fargo downgraded it to “equal weight” from “overweight” and cut the price target to $19 per share from $41. Wells Fargo is concerned with the company’s path to profitability given the pace of the increase in expenses. DraftKings has fallen for the past three sessions, including a 21.6% plunge Friday following its quarterly report.

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Bitcoin sank as low as $36,370 early Tuesday, its lowest level in more than two weeks.
Analysts attributed the drop to escalating tensions over the Russia-Ukraine crisis.

A Bitcoin coin lies on a screen showing the Bitcoin – US dollar exchange rate.
Fernando Gutierrez-Juarez | picture alliance | Getty Images

Digital currencies took a beating Tuesday as geopolitical tensions over Ukraine roiled global markets.
Bitcoin sank as low as $36,370 in early morning trade, its lowest level in more than two weeks. The world’s biggest cryptocurrency later pared its losses, last trading down 3% in 24 hours to a price of $37,495.

Other digital assets also tumbled, with ether falling 4% and XRP sinking 10%.
Analysts attributed the drop to escalating tensions over the Russia-Ukraine crisis. Russian President Vladimir Putin on Monday ordered troops into two breakaway regions in eastern Ukraine, moments after declaring them as independent.
The move has fueled fears of a full-blown invasion, sending global stocks sharply lower as traders’ appetite for risk declines.

“Bitcoin, and crypto more generally, moved in lock step with Asian stock indices overnight as Russian-Ukraine headlines drove price movements,” Chris Dick, a quantitative trader at London-based crypto market maker B2C2, told CNBC.
“First a sell off as Putin announced he was ordering troops into Ukraine and then a bounce back as the market processed the headlines.”

Bitcoin is often touted by its proponents as a safe haven asset akin to gold, meaning it should offer a store of value in times of uncertainty.
However, the case for bitcoin as a sort of “digital gold” has broken down as more institutional investors have started to trade it, and the cryptocurrency is becoming more closely aligned with fluctuations in traditional markets like equities.

Bitcoin is now well below the all-time highs above $68,000, which it reached in November 2021, and some investors believe this is as good as it’s going to get for the cryptocurrency for some time.
Du Jun, co-founder of crypto exchange Huobi, said the next bitcoin bull market is unlikely to take place until 2024 at the earliest, when the next so-called “halving” event is due to take place.
“Following this cycle, it won’t be until end of 2024 to beginning of 2025 that we can welcome next bull market on bitcoin,” Du said.
The bitcoin halving reduces the rewards that miners of the cryptocurrency get for verifying transactions, effectively squeezing the supply of new coins in issuance.

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China will cut taxes and fees on a greater scale this year, while focusing on supporting the nation’s tech development, Finance Minister Liu Kun said Tuesday.
Escalating tensions with the U.S. have cut China off from suppliers of key technologies, and prompted Beijing to introduce policies for supporting homegrown technology.
During Tuesday’s press conference, finance ministry officials also emphasized more support for small businesses, timely pension payments to retirees and greater transfer of payments from the central government to local governments.

A worker in a dust-proof suit controls an LED epitaxy chip production line at a semiconductor workshop in Nanchang, Jiangxi Province, on Jan. 26, 2022.
Future Publishing | Future Publishing | Getty Images

BEIJING — China will cut taxes and fees on a greater scale this year, while focusing on supporting the nation’s tech development, Finance Minister Liu Kun said Tuesday.
China’s economic growth slowed after a rebound from the initial shock of the coronavirus pandemic in early 2020. Analysts expect more fiscal and monetary policy support this year.

The first fiscal policy task is to cut taxes and fees by a greater scale than last year, Liu told reporters at a press conference, without specifying a figure. Those reductions totaled 1.1 trillion yuan ($173.5 billion) in 2021.
The second point Liu brought up was support for technological “self-reliance” and stable manufacturing supply chains. National expenditures on science and technology rose by 7.2% in 2021 to 970 billion yuan, he said, noting the funds supported development of chips and new energy vehicles.
Escalating tensions with the U.S. have cut China off from suppliers of key technologies, and prompted Beijing to introduce policies to support homegrown tech. Last year, the central government announced it planned to increase spending on research and development by more than 7% a year between 2021 and 2025.
“The Ministry of Finance sticks to the priority of ensuring the national development strategy of scientific and technological self-reliance and self-improvement,” vice minister Yu Weiping told reporters at the same meeting, in response to a question about the ministry’s work on tech. That’s according to a CNBC translation of the Chinese.

Yu said the central government increased spending on basic research last year by 15.3% to an unspecified amount, primarily to support work at state-run institutions.

He claimed that during the first three quarters of 2021, businesses in China received 1.3 trillion yuan in additional deductions for research and development expenses, and more than 330 billion yuan in tax cuts.
During Tuesday’s press conference, the finance ministry officials also emphasized more support for small businesses, timely pension payments to retirees and greater transfer of payments from the central government to local governments.

Real estate sector

There was no mention of real estate, a giant industry that has contributed significantly to local government revenues.
China’s property market has slumped in the last several months amid Beijing’s crackdown on developers’ high reliance on debt for growth.

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In 2019, more than 20% of regional and local government revenue, or 25.7 trillion yuan, came from land sales — mostly to property developers, according to Moody’s.
For some provinces, the share of revenue was more than 40%, the ratings agency said. Altogether, property and related sectors account for more than a quarter of China’s GDP, according to Moody’s.
The central Chinese government is set to release its budget and economic growth target for the year at an annual parliamentary meeting in early March.

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The Swiss bank has denied any wrongdoing and said it “strongly rejects” the allegations published by dozens of global media outlets following a coordinated investigation.
Swiss regulator FINMA has confirmed that it is in contact with the bank over the leaks.
The European People’s Party — the conservative grouping commanding the largest number of seats in the European Parliament — on Monday urged the European Commission to “re-evaluate Switzerland as a high-risk money-laundering country.”

The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021.
Arnd Wiegmann | Reuters

LONDON — Credit Suisse is facing fresh scrutiny from Swiss regulators and the European Parliament after leaked data purported to show the bank had served human rights abusers, corrupt politicians and businessmen under sanctions for decades.
The Swiss bank has denied any wrongdoing and said it “strongly rejects” the allegations published by dozens of global media outlets following a coordinated investigation. The leak of client data was initially sent to a German newspaper before being picked up by the Organized Crime and Corruption Reporting Project and 46 other news organizations.

Credit Suisse said the ensuing report, entitled “Suisse Secrets,” detailed “predominantly historical” matters and was based on “partial, inaccurate, or selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct.”
“Approximately 90% of the reviewed accounts are today closed or were in the process of closure prior to receipt of the press inquiries, of which over 60% were closed before 2015.
Swiss regulator FINMA said it was aware of the articles, though couldn’t comment on individual media reports.

“We can confirm that we are in contact with the bank in this context. Compliance with money laundering regulations has been a focus of our supervisory activities for years now. We refer to FINMA’s measures and procedures in the context of combating money laundering in recent years,” FINMA added.
Meanwhile, the European People’s Party (EPP) — the conservative grouping commanding the largest number of seats in the European Parliament — on Monday urged the European Commission to “re-evaluate Switzerland as a high-risk money-laundering country,” suggesting it could be included on the EU’s blacklist for countries notorious for laundering dirty money.

“The ‘Swiss Secrets’ findings point to massive shortcomings of Swiss banks when it comes to the prevention of money laundering,” said Markus Ferber, the EPPs coordinator on economic affairs.
“When Swiss banks fail to apply international anti-money laundering standards properly, Switzerland itself becomes a high-risk jurisdiction.”
In its recent earnings report and in the aftermath of the resignation of its former chairman Antonio Horta-Osorio – who was found to have broken Covid-19 quarantine rules on multiple occasions – Switzerland’s second-largest bank had emphasized focus on overhauling its corporate culture.
The bank was burned badly by litigation costs in the fourth quarter of 2021 as the fallout continued over its involvement with collapsed U.S. hedge fund Archegos Capital and insolvent supply chain finance company Greensill.
This resulted in Credit Suisse setting aside “major litigation provisions of 1.1 billion Swiss francs ($1.2 billion) and posting a full-year net loss of 1.57 billion Swiss francs for 2021.

Thomas Gottstein, designated new CEO of Swiss bank Credit Suisse attends an interview with Reuters in Zurich, Switzerland February 7, 2020.
Arnd Wiegmann | Reuters

Credit Suisse also recently became the first Swiss bank to answer criminal charges and faces a court case involving millions of euros in alleged money laundering for drug gangs between 2004 and 2008.
A banker accused of money laundering told the court last week that Credit Suisse learned of murders and cocaine trafficking allegedly linked to a Bulgarian mafia organization, but proceeded to manage the cash in question. Both the banker and Credit Suisse deny any wrongdoing.
In October 2021, FINMA concluded an investigation into a number of legacy anti-money laundering issues dating back decades before 2014, and some between 2016 and 2019. The regulator imposed measures on the group and continues to track their implementation.
Scandals have plagued Credit Suisse for years. Former CEO Tidjane Thiam resigned in early 2020 after a bizarre spying saga that also resulted in the death of a contractor and the ousting of its COO Pierre-Olivier Bouee.
Horta-Osorio was brought in to right the ship with regards to corporate culture, only to be forced to step down himself. CEO Thomas Gottstein told CNBC following the bank’s latest earnings report that righting risk management and controls was a top priority following a “challenging year.”

‘Extremely weak risk management’

Credit Suisse stock is already down more than 9.5% year-to-date and trades at a discount compared to its peers, at around 0.47% of the sector average in Europe.
DBRS Morningstar, which covers Credit Suisse stock, told CNBC on Monday that the recent news “highlights additional risk management shortcomings at Credit Suisse, including anti money laundering procedures and lack of internal controls and management accountability.”
“We consider the news adds to the significant failures observed in 2021 and point to extremely weak risk management and controls at the Group level and across the different businesses, to now include Wealth Management, after the Archegos issue in the Investment bank and the Supply Fund Chains issue in Asset Management,” Maria Rivas, senior vice president of financial institutions at DBRS Morningstar, told CNBC.

“This is another hit for CSG and the new Chairman and management team, who are trying to make a clean start and announced a 2022 transition year to restore confidence and improve risk management.”
Rivas suggested that despite new leadership’s focus on overhauling the bank’s risk culture and controls, these changes could “take years to materialize” given the complexity and scale of the group’s global structure.
“Also, there could be further implications for CSG if this is considered a breach of Swiss banking secrecy under the Swiss Banking Act article 47, as it is a federal crime to disclose the information or activity of clients banking domestically to foreign entities,” she added.

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