Finance

A mechanic works on a motorcycle at a Harley-Davidson showroom and repair shop in Lindon, Utah, on Monday, April 19, 2021.
George Frey | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.
Franklin Resources — Shares of the asset manager jumped 11.6% after the company reported better-than-expected quarterly earnings. Franklin Resources also announced that it agreed to acquire private equity firm Lexington Partners for $1.75 billion.

Align Technology — The clear braces maker popped nearly 6% after the company announced a $100 million accelerated share repurchase program. The stock is up about 23% this year.
Moderna — Shares dropped more than 2% after the drugmaker said the Food and Drug Administration needs more time to review its Covid-19 vaccine for 12- to 17-year-olds before granting emergency use authorization. The agency is specifically studying the risk of myocarditis, or inflammation of the heart muscle, in teens. Moderna said the review may take until January to conclude.
PG&E Corp — The gas and electric company’s shares fell 1.6% after it reported third-quarter results that missed analysts’ expectations. PG&E recorded 24 cents per share, compared with estimates of 26 cents.
Coinbase — Shares of the cryptocurrency exchange jumped 3.6% after competing exchange Binance temporarily halted all crypto withdrawals due to a large backlog.
Aon — The provider of risk mitigation products fell 4% after Wells Fargo Securities downgraded the stock to equal weight from overweight, citing fourth-quarter expenses despite recent strength and an increased price target by the analysts.

Harley-Davidson — Shares of the motorcycle company jumped 9% after the U.S. and the European Union reached an agreement to weaken dueling tariffs on steel, aluminum and motorcycle imports. Wedbush Securities said in a note that the news “eliminates a significant headwind that the company has been dealing with through most of this year.”
Spotify — Shares gained nearly 4% after the streaming platform was named a top pick at Morgan Stanley. Spotify also received an upgrade from Bernstein to market perform from underperform.
Deere — The machinery maker jumped about 4.8% after it reached a tentative six-year deal with workers on strike that would give them higher raises and bonuses. The deal is set to be put to a vote Tuesday.
CrowdStrike  — Shares of the cloud computing company fell 4.4% after BTIG downgraded the stock to neutral from buy, citing rising competition and potentially slowing growth.
GameStop — The stock rose 9% after the company announced Chief Operating Officer Jenna Owens has stepped down from her role after less than a year in the position.
Roblox — Shares of the gaming company ticked 3.4% lower in midday trading following a three-day outage on the platform that began Thursday. The online gaming site is now back online. “We are sorry for the length of time it took us to restore service,” David Baszucki, Roblox’s founder and CEO, said in a blog post Sunday.
 — CNBC’s Yun Li, Hannah Miao, Jesse Pound and Maggie Fitzgerald contributed to this report.

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James Tahaney loads textbooks on to a pallet in preparation for shipping at the Chegg warehouse in Shepherdsville, Kentucky, April 29, 2010.
John Sommers II | Bloomberg | Getty Images

Check out the companies making headlines after the bell: 
Chegg — Shares of Chegg sunk more than 25% in extended trading after a weaker-than-expected quarterly report. The education technology company reported revenue of $171.9 million versus $174.5 million estimated, according to Refinitiv. Chegg also missed subscriber estimates.

Clorox — Clorox shares rose over 5% after hours following an earnings beat. The consumer products company reported an adjusted profit of $1.21 per share on revenue of $1.81 billion. Analysts expected earnings of $1.03 per share on revenue of $1.70 billion, according to Refinitiv.
Avis Budget Group — Shares of Avis Budget Group rose nearly 5% in after-hours trading following a strong third-quarter earnings report. The parent company of car rental brands reported adjusted earnings per share of $10.74, much higher than the Refinitiv consensus of $6.52 per share. Revenue came in higher-than-expected at $3 billion versus $2.715 billion estimated. Avis also announced a $1 billion increase to the company’s existing share repurchase authorization.
NXP Semiconductors — NXP Semiconductors shares whipsawed during extended trading after reporting a slight quarterly revenue beat. The chipmaker reported revenue of $2.86 billion, while analysts expected revenue of $2.85 billion, according to Refinitiv.
Simon Property Group — Simon Property Group shares gained 3% in extended trading after the mall owner beat earnings expectations soundly. The company reported earnings of $2.07 per share versus $1.09 per share expected by analysts surveyed by Refinitv. The company’s revenue also came in higher than expected.

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Treasury Secretary Janet Yellen said she has discussed with President Joe Biden how he should proceed on naming a Fed chairman.
Yellen told CNBC that she thinks current Chairman Jerome Powell has done a “good job.”

Treasury Secretary Janet Yellen said she has discussed with President Joe Biden how he should proceed on naming a Federal Reserve chairman and praised the current holder of the position.
She did not disclose any specific plans Biden has, though Yellen said she gives solid marks to Chairman Jerome Powell.

“I talked to him about candidates and advised him to pick somebody who is experienced and credible,” Yellen told CNBC’s Ylan Mui. “I think that Chair Powell has certainly done a good job.”
Appointed to the top post by former President Donald Trump, Powell’s term expires in February. Biden is expected to name someone soon, and Powell is widely expected on Wall Street to be renominated.
However, the Powell Fed has come under criticism in recent weeks following disclosures that regional presidents — and Powell himself — had been buying and selling securities tied to the stock and bond markets at a time when Fed policy was underpinning Wall Street.
Two regional presidents resigned shortly after the disclosures. Powell faced some criticism over the matter in a recent congressional appearance, and leading progressive Sen. Elizabeth Warren, D-Mass., said she would vote against Powell if he is nominated for a second term. The Fed has since established an edict barring policymakers and senior officials from owning anything other than mutual funds in most cases.
Despite the controversy, Yellen said Powell has led the Fed well during an extraordinary time. Yellen was Powell’s immediate predecessor as the Fed chair.

“He responded very admirably to the crisis that we saw after the pandemic, and he’s established with his colleagues a new framework that is very focused on achieving full employment,” she said.
The Fed meets this week and is widely expected to announce that it soon will start slowly withdrawing the unprecedented economic help it has been providing since the early days of the pandemic.

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The House Ways and Means Committee passed a measure in September to kill the “backdoor” and “mega backdoor” Roth individual retirement account.
The strategies allow wealthy Americans to funnel more money into Roth IRAs. The accounts allow for tax-free investment growth and future withdrawals, and don’t require distributions after age 72.
The $1.75 trillion Build Back Better framework issued by the White House on Thursday preserves the strategies — for now.

Bill Koplitz | Moment | Getty Images

A retirement tax strategy favored by the wealthy survived in Democrats’ latest social and climate spending plan, after an earlier version had it on the chopping block.
So-called backdoor Roth strategies are a way for the rich to skirt income and savings limits that apply to Roth individual retirement accounts.

At its simplest, the strategy involves an investor contributing money to a non-Roth account and then converting it to a Roth IRA.
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Roth IRAs yield two big benefits for the affluent: Neither investment growth nor account withdrawals are taxable if funds are pulled out after age 59½, and there are no required minimum distributions starting at 72, as there are with traditional retirement accounts.
“The reason rich people do this is they don’t want to pay taxes on their investments,” said Albert Feuer, a tax and employee benefits attorney in Forest Hills, New York. “The fact they don’t have any RMD rules supercharges [the accounts] even further.”
The House Ways and Means Committee proposed ending the loopholes as part of a broad package of reforms to make the tax code fairer and raise money for Democrats’ social and climate agenda (which was then envisioned at up to $3.5 trillion). The Committee passed the measures in September.

However, a $1.75 trillion Build Back Better framework issued Thursday by the White House — the result of months of negotiating between moderate and progressive lawmakers — would keep the loopholes intact.

Until we actually have a law, we can’t be sure what’s going to be in it.

Albert Feuer
tax and employee benefits attorney

The new vision of tax reforms also omits many other retirement measures included in the House package, such as new RMD rules for accounts of more than $10 million.
However, negotiations are ongoing and retirement rules may re-emerge — especially if Democrats add measures that raise the legislation’s total price tag and need to find new funding sources.
Those may include, for example, changes to the current $10,000 cap on a federal tax deduction for state and local taxes.
“Until we actually have a law, we can’t be sure what’s going to be in it,” Feuer cautioned.

Backdoor Roth

Current law disallows any contributions to Roth accounts for single taxpayers whose annual income exceeds $140,000. (The limit is $208,000 for married couples filing a joint tax return.)
However, the law allows higher earners to convert funds in a pre-tax IRA — which doesn’t have an income limit — to a Roth IRA. (They must pay income tax on the converted funds.) Such pre-tax IRAs may hold a substantial sum of money from a 401(k) plan whose funds were rolled over.

(While there isn’t an income limit for contributions to pre-tax IRAs, high earners can’t claim a tax deduction for those contributions beyond a certain income. The threshold varies according to whether the person does or doesn’t have a workplace retirement plan.)  
The House tax proposal would have disallowed conversions of IRA and 401(k) funds to a Roth account. It would have applied in 2032, for single taxpayers with taxable income of more than $400,000 or married taxpayers filing jointly with income above $450,000.

Mega backdoor Roth

Current law also allows for a “mega backdoor Roth” strategy to get even more money into a Roth IRA.
IRAs have an annual $6,000 contribution limit. (People over age 50 can put in an extra $1,000 a year.)
But 401(k) and other workplace plans have much higher limits. In certain cases, workers can save up to $58,000 a year (or $64,500 for those over age 50) by making “after-tax” contributions.

Unlike Roth accounts, investment growth in this after-tax savings is taxable. However, wealthy investors generally avoid tax by quickly converting this after-tax money to a Roth IRA — the so-called mega backdoor strategy.
The House tax proposal would have prohibited all after-tax contributions from employees and barred after-tax contributions being converted to a Roth account. The measure would have applied for all income levels starting in 2022.
(Just 1 in 5 of 401(k) plans currently allow for these after-tax contributions, according to the Plan Sponsor Council of America.)

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Little-known cryptocurrency mana surged to an all-time high over the weekend amid excitement over Facebook changing its name to Meta.
Mana is the native digital token of Decentraland, a self-proclaimed metaverse platform where users can buy and sell virtual properties.
Crypto investors view Facebook’s rebrand as a sign of growing acceptance of the metaverse trend.

A smartphone with Facebook’s logo is seen in front of displayed Facebook’s new rebrand logo Meta in this illustration taken October 28, 2021.
Dado Ruvic | Reuters

Mana, a little-known cryptocurrency used for buying and selling virtual land, saw its price spike over the weekend amid excitement over Facebook’s rebrand.
The price of mana hit an all-time high of $4.16 on Saturday evening, according to CoinMarketCap data, up 400% from where it was trading shortly after Facebook announced it was changing its name to Meta. It has fallen since, having last changed hands at around $3.16.

Facebook’s rebrand was aimed at shifting the embattled social media company’s focus toward the “metaverse,” a kind of shared virtual reality in which multiple users can interact with each other and digital objects.
Launched in 2017, mana is the native digital token of Decentraland, a self-proclaimed metaverse platform where users can buy and sell virtual properties. Ownership of the land is purchased through nonfungible tokens, a type of digital asset meant to track who owns what. It runs on Ethereum, the blockchain network behind ether, the world’s second-largest digital currency.

Vijay Ayyar, head of Asia-Pacific at cryptocurrency exchange Luno, said mana and other metaverse-focused cryptocurrencies were rallying on the back of Facebook’s rebrand, which is being seen as a sign of growing acceptance of the metaverse trend.
“I read it as an interpretation of a vote of confidence amongst both speculators and investors that this concept of a metaverse is now taking a serious turn in terms of reaching mainstream consciousness and — soon — adoption,” Ayyar said.
Other cryptocurrencies, including the tokens of blockchain-based games Axie Infinity and The Sandbox, have also seen solid gains the past few days.

Investors are looking to smaller alternative cryptocurrencies, or “altcoins,” as interest in bitcoin has begun to peter out after the world’s largest digital coin hit a record high of nearly $67,000 last month, according to Luno’s Ayyar.
“Typically, once Bitcoin crosses an all-time high, we see money flow into other altcoins,” he said.
Last week, shiba inu — a “meme token” challenging dogecoin — rallied sharply amid speculation over whether Robinhood could add the coin to its trading platform. It now ranks ahead of dogecoin, with a market capitalization of more than $39.6 billion.

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Barclays CEO Jes Staley will stand down following an investigation into his relationship with Jeffrey Epstein.
C.S. Venkatakrishnan (known as Venkat), currently head of global markets at Barclays, is set to take over as chief executive with immediate effect.
The bank said the investigation had not found that Staley “saw, or was aware of, any of Mr Epstein’s alleged crimes.”

Jes Staley, CEO, Barclays Plc
Christopher Goodney | Bloomberg | Getty Images

LONDON — Barclays CEO Jes Staley will stand down following an investigation into his relationship with Jeffrey Epstein, the bank said in a statement Monday.
C.S. Venkatakrishnan (known as Venkat) will take over as chief executive with immediate effect, subject to regulatory approval.

Barclays and Staley “were made aware on Friday evening of the preliminary conclusions” of a probe by the U.K.’s Financial Conduct Authority and the Prudential Regulation Authority, Barclays said.
It added that the investigation was into “Mr Staley’s characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays’ response to the FCA.”

“In view of those conclusions, and Mr Staley’s intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays,” the bank said.
Shares of Barclays were trading 1.2% lower Monday morning after the announcement.
The bank said the investigation “makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.”

Billionaire financier Epstein was arrested in July 2019 on child sex trafficking charges but hanged himself a month later in a Manhattan federal jail.

Whistleblower scandal

Staley’s links to the dead financier have been the subject of an investigation by the U.K.’s financial watchdog and the Bank of England’s regulatory authority. Barclays said the “regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions” of the investigation.

Staley became CEO of Barclays in October 2015. He has previously said his relationship with Epstein, which he regrets, ended in late 2015, Reuters reported.
The news agency also said Monday that Staley told staff in an internal memo, seen by Reuters, that he did not want his “personal response” to the investigations to be a distraction.
“Although I will not be with you for the next chapter of Barclays’ story, know that I will be cheering your success from the sidelines,” he said, according to Reuters.
Fahed Kunwar, an equity analyst at Redburn, told CNBC on Monday that detail was still lacking around the financial regulators’ probe. He pointed out that Staley had a somewhat difficult relationship with Britain’s financial regulators who fined him in 2018 for trying to identify a whistleblower who sent letters criticizing a Barclays employee.
“Clearly we need to see what the review says. But I think this adds to the widening picture of his relationship with the regulators being difficult and I think that is why he has stepped down so quickly today,” Kunwar told CNBC’s “Squawk Box Europe,” describing Staley’s departure as a shock for investors nonetheless.
“In the last couple of years, the investment bank has had such a solid performance I think Mr Staley’s position had become quite entrenched and so investors had really changed their mind on him and liked the direction of travel of Barclays,” he added.

Venkat as CEO

Regarding the appointment of Venkat, Barclays said its board “has had succession planning in hand for some time, including reviewing potential external appointees, and identified Venkat as its preferred candidate for this role over a year ago, as a result of which he moved from the position of Group Chief Risk Officer to Head of Global Markets.”

Barclays said it was confident that under his leadership, the bank “will continue its strategic direction and improve performance in line with the progress of recent years.”
Before joining Barclays in 2016, Venkat worked at JPMorgan Chase from 1994, holding senior roles in asset management and investment banking.

Epstein’s contacts

Any former association with Epstein is now proving toxic for a variety of high-profile people.
Epstein’s close associate and former girlfriend, British socialite Ghislaine Maxwell, is herself awaiting trial on charges that she recruited underage girls to be sexually abused by Epstein. She denies the charges.
One of Epstein’s accusers, Virginia Giuffre, has claimed that Prince Andrew of Britain, the Duke of York, had sex with her when she was underage and in the clutches of Epstein and Maxwell. The prince denies the allegations.
Epstein is also known to have socialized with former U.S. Presidents Donald Trump and Bill Clinton, both of whom have sought to distance themselves from Epstein, insisting they knew nothing of his crimes.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, commented on Monday that “‘the repercussions from the Jeffrey Epstein scandal stretch far and wide, and now Barclays finds itself at the centre of the storm.”
“While the probe did not centre on Mr Staley’s role at Barclays but what he disclosed about his previous position at JP Morgan, what was under question was how he characterised his former relationship with the disgraced financier,” she said in a note.
“It’s understood Mr Staley will contest the conclusions, and clearly the board want to distance Barclays from what could be a long drawn out process.”

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Digital Currency Group is selling shares in a deal that values the crypto conglomerate at $10 billion.
SoftBank led the round, with participation from Google’s CapitalG and Ribbit Capital as those firms look for exposure to the digital asset class outside of bitcoin.
Digital Currency Group is the parent company of several big names in the crypto space. Until now, its valuation was somewhat of a mystery as it had only raised $25 million in primary capital since launching.

Barry Silbert, Founder and CEO, Digital Currency Group 
David A. Grogan | CNBC

Digital Currency Group is selling shares to SoftBank and Google’s venture capital arm in a deal that values the crypto conglomerate at more than $10 billion. 
The Manhattan-based, private company announced a secondary round on Monday, in which existing investors are selling shares to new backers. The $700 million deal was led by SoftBank and included Google’s CapitalG and Ribbit Capital, among others. 

Digital Currency Group is the parent company of several big names in the crypto space. Until now, its valuation was somewhat of a mystery as it had only raised $25 million in primary capital since launching six years ago.
One subsidiary, Grayscale Investments, is the world’s biggest digital asset manager with $50 billion under management. Its flagship Grayscale Bitcoin Trust is the largest bitcoin fund in the world, and recently applied to convert into an ETF. DCG, as it’s also called, owns prime brokerage and institutional lending firm Genesis, as well as news outlet CoinDesk, and has backed more than 200 blockchain companies.
“We’re the best proxy for investing in this industry,” Barry Silbert, founder and CEO of Digital Currency Group, told CNBC in an interview. “We were looking for the type of backers that could be, and hopefully will be with, with us on this journey for the next couple of decades.” 
Silbert said CapitalG brings Google’s expertise in data and consumer companies, while Softbank has the global footprint and ability to turbo-charge portfolio companies. The investment also signals new interest by venture capital firms looking for exposure to the digital asset class outside of bitcoin.
CapitalG founder and general partner David Lawee said he saw this as a way to back a potential winner in crypto financial services. Lawee has invested in Lyft, Airbnb, Robinhood and Snapchat during his time at CapitalG and before that, founded an online gaming community that was acquired by Viacom. The crypto space is evolving faster than anything Lawee said he saw in the dot com era, making the ability for companies to adapt even more important.

“When I think back to the nineties, very few companies I met still exist — it’s very hard to evolve as quickly as technology evolves — you need to be a pretty nimble company to take advantage of it,” Lawee said. “DCG has a lot of flexibility to make investments and to get into new businesses.”
DCG also holds various digital assets, including bitcoin. The world’s largest cryptocurrency hit an all-time high above $66,000 in October and ended the month up more than 40%. Silbert is bullish on the world’s largest cryptocurrency, which he described is unstoppable at this point.” But most are worthless, he said.
“Ninety nine percent of the digital assets that exist today are overvalued, and most don’t really have a reason to exist,” Silbert said. “But I’m also a believer in creative destruction and that’s okay that they aren’t going to be valuable —  what’s going to come out of it is some incredibly valuable, impactful protocols.” 
DCG is now among the most valuable privately held companies in the space alongside Ripple, Kraken and Circle. Silbert said he wouldn’t rule out an IPO, but it’s “not in the plans and not being discussed right now.” The company is profitable and is on track to top $1 billion in revenue for the year, according to its CEO. Silbert also said he did not sell shares in this secondary round.
“The typical reason companies do go public or rush go public is to address liquidity, or to raise money for acquisitions but we don’t have those pressures,” Silbert said. “I enjoy building this as a private company.” 

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Take a look at some of the biggest movers in the premarket:
Harley-Davidson (HOG) – The motorcycle maker’s shares soared 9.4% in the premarket after the U.S. and the European Union ended a dispute involving steel and aluminum tariffs. Harley could have paid European tariffs of 56% if the dispute had not been resolved.

Spotify (SPOT) – The music streaming service’s stock rose 2.1% in premarket trading after it was named a “top pick” at Morgan Stanley, on the prospects for accelerating growth in its Premium service and expanding profit margins.
Trivago (TRVG) – The travel services company saw its stock jump 4.2% in the premarket after it reported an unexpected profit and better-than-expected revenue for its latest quarter. Trivago cited improving travel trends as pandemic restrictions ease and vaccinations increase.
AMC Entertainment (AMC) – The movie theater operator’s stock rallied 2.6% in premarket action after AMC said its theater admissions revenue in October was the highest in any month since February 2020.
Barclays (BCS) – Barclays CEO Jes Staley will step down following an investigation into his relationship with disgraced financier Jeffrey Epstein by British regulators. Staley plans to contest the investigation’s findings, and has said in the past that he regrets any association with Epstein. Barclays fell 1.5% in premarket trading.
Deere (DE) – Deere reached a tentative contract agreement with striking workers, with a vote on the six-year pact set for Tuesday. The deal will give workers higher raises and bonuses and would end Deere’s first strike in 35 years. Deere shares gained 1.8% in premarket trading.

Crowdstrike (CRWD) – The cloud computing company’s stock fell 2.3% in the premarket after it was downgraded to “neutral” from “buy” at BTIG. The firm points to increasing competition as well as the prospects for slowing growth.
GameStop (GME) – GameStop Chief Operating Officer Jenna Owens is leaving the videogame retailer after just seven months. GameStop did not give a reason for the departure of Owens, who had been a top executive at Amazon and Google before joining GameStop.
Roblox (RBLX) – Roblox is back online after the online gaming site suffered an outage that lasted from Thursday night through Sunday afternoon. The company did not give a specific cause of the outage but told The Wall Street Journal that there was no evidence of an external intrusion. Roblox shares rose 1% in premarket action.
Moderna (MRNA) – Moderna said the Food and Drug Administration had delayed a decision on the use of its Covid-19 vaccine in adolescents aged 12 to 17, while the agency studies whether the shot increases the chance of myocarditis — an inflammation of the heart muscle. The drugmaker said a final decision from the FDA would likely not come until January. The stock lost 3.1% in the premarket.
Xpeng (XPEV) – Xpeng shares jumped 3.7% in premarket trading after the Chinese electric vehicle maker said it delivered 10,138 cars in October, an increase of 233% over a year ago.

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