Finance

Three quarters of investors under 40 are driven by competitiveness when investing in a cryptocurrency or other high-risk product, according to the U.K. Financial Conduct Authority.
68% of younger traders compared investing in such assets to gambling, the regulator said.
The FCA previously warned a “new, younger, more diverse group of consumers” was getting involved in higher risk investments.

Casino chips decorated with bitcoin logos.
Andrey Rudakov | Bloomberg | Getty Images

LONDON — The vast majority of traders under 40 are investing in cryptocurrencies and other “high-risk” assets due to a sense of “competition” with friends and family, according to research published by the U.K. financial services watchdog on Wednesday.
Three quarters of younger investors are driven by competitiveness when placing their money in a cryptocurrency or other high-risk products such as foreign exchange or crowdfunding, a survey from the Financial Conduct Authority found.

Meanwhile, 68% of respondents compared investing in such assets to gambling, the FCA said. The regulator says findings were the result of surveys with 1,000 respondents aged 18-40 who invested in one or more high-risk investment products.
More than half (58%) of respondents said they were incentivized to make a high-risk investment after hearing about it on the news or social media, according to the FCA.
Bitcoin is currently near an all-time high after topping $60,000 last week. The world’s biggest digital currency has been known to be incredibly volatile, dropping from more than $64,000 in April to below $30,000 in July. It’s still more than doubled in price so far this year.
Despite the description of bitcoin from its proponents as a long-term means of accumulating wealth, the FCA found that only 21% of under 40s in the U.K. said they were considering holding their most recent investment for more than a year.
“We are seeing more people chasing high returns. But high returns can mean higher risks,” said Sarah Pritchard, executive director of markets at the FCA.

“We want to give consumers greater confidence to invest and help them to do so safely, understanding the level of risk involved.”
The regulator says it’s enlisted the help of Olympic BMX gold medalist Charlotte Worthington for a campaign warning about the dangers of investing in high-risk assets.
It comes after the FCA warned earlier this year that a “new, younger, more diverse group of consumers” was getting involved in higher risk investments, citing the rise of online trading apps as one potential cause.
Amateur investors piled into the stock market this year, using platforms like Robinhood and Reddit, leading to volatile trading in so-called “meme stocks” like GameStop and AMC.
On Monday, the U.S. Securities and Exchange Commission said Robinhood and other online brokerage firms had gamified investing to encourage activity from users.
Cryptocurrencies are not regulated in the U.K., meaning people are not protected by consumer protection laws if their funds are lost for any reason — for example in a hack on an exchange.
At the start of this year, the FCA warned crypto investors should be prepared to lose all their money, echoing a similar warning from Bank of England Governor Andrew Bailey.
Last week, BOE Deputy Governor Jon Cunliffe likened the growth of the crypto market to the rise of subprime mortgages which contributed to the 2008 global financial crisis.

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Mario Tama | Getty Images News | Getty Images

Check out the companies making headlines after the bell: 
United Airlines — Shares of United added about 2% in after-hours trading following the airline’s better-than-expected financial results as travel rebounded in the third quarter. United posted a loss of $1.02 per share, narrower than the $1.67 loss per share expected, according to Refinitiv. The company’s revenue also came in higher than estimated.

Netflix — Netflix shares whipsawed in extended trading after the streaming giant beat Wall Street estimates on earnings and subscriber growth. The company reported profit of $3.19 per share versus the Refinitiv consensus of $2.56 per share. Netflix also saw 4.4 million global paid net subscriber additions in the third quarter, solidly beating the StreetAccount estimate of 3.84 million.
Interactive Brokers — Shares of Interactive Brokers fell about 1% after hours despite an earnings beat. The financial services company reported profit of 78 cents per share versus 76 cents expected, according to Refinitiv.
Omnicom Group — Omnicom Group shares slipped more than 3% during extended trading following the media company’s third-quarter results. The company earned $1.65 per share compared to the $1.37 analysts surveyed by StreetAccount were expecting. Revenue came in at $3.44 billion, slightly short of the expected $3.46 billion.
Brinker International — Shares of Brinker International declined 10% after the company issued preliminary financial results for its fiscal first quarter. “The covid surge starting in August exacerbated the industry-wide labor and commodity challenges and impacted our margins and bottom line more than we anticipated,” CEO Wyman Roberts said in a statement. The Chili’s parent now expects adjusted earnings of 34 cents, compared to the 69 cents Wall Street was expecting. Brinker International will post results on November 3.
—CNBC’s Pippa Stevens contributed to this report.

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U.S. stock index futures were flat during overnight trading on Tuesday, after the S&P 500 posted its fifth straight winning session as strong earnings numbers lift sentiment.
Futures contracts tied to the Dow Jones Industrial Average gained 19 points. S&P 500 futures were up 0.07%, while Nasdaq 100 futures were flat.

The Dow advanced nearly 200 points, or 0.56%, on Tuesday for its third positive session in the last four days. Johnson & Johnson had the most positive impact on the 30-stock benchmark, while Procter & Gamble was the largest drag.
The S&P 500 added 0.74%, while the Nasdaq Composite advanced 0.71%. Both saw their fifth straight day of gains, the longest daily winning streak since late August.
Netflix posted its hotly-anticipated third-quarter earnings report on Tuesday after the market closed, with the streaming giant adding 4.4 million subscribers during the period. Wall Street analysts were expecting 3.84 additions, according to estimates from StreetAccount. The stock initially ticked higher on the results, before giving back those gains and dipping into the red during extended trading.
United Airlines also posted quarterly results after the bell on Tuesday, with the company beating analyst expectations on the top and bottom line amid an ongoing rebound in travel demand.
So far investors have largely cheered results from the batch of third-quarter earnings that have hit the market since the banks kicked things off last week. Of the S&P 500 components that have reported thus far, 82% have topped expectations, according to FactSet.

However, Jeff Buchbinder, equity strategist for LPL Financial, said investors shouldn’t expect the beats that companies posted as they emerged from the depths of the pandemic.
“We have used most of the superlatives we know to describe corporate America’s stunning performances over the past two earnings seasons,” he said. “We expect solid earnings gains during the upcoming third-quarter earnings season, but upside surprises will be smaller. Unfortunately, we won’t need as many superlatives.”
More than 70 S&P 500 components report earnings this week. On Wednesday Verizon, Biogen and Canadian Pacific Railway are on deck before the opening bell. IBM, Tesla, CSX and Las Vegas Sands are among the names set to report after the market closes.
Elsewhere in the market, bitcoin was in focus on Tuesday as the cryptocurrency inched closer to its all-time high. The first bitcoin-linked ETF — the ProShares Bitcoin Strategy ETF — began trading on Tuesday, pushing the cryptocurrency to a session high of $64,350, according to date from Coin Metrics, just shy of its April 14 record of $64,899.
With stocks’ Tuesday advance, the major averages are approaching their all-time highs. The Dow is 0.49% below its record, while the S&P and Nasdaq Composite sit 0.58% and 1.78% below their highwater marks.

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President Joe Biden’s pick to run one of Washington’s most important banking industry regulators might not have enough support for confirmation in the Senate.
Senate Democrats are fractured over whether to support Saule Omarova, Biden’s indicated choice to lead the Office of the Comptroller of the Currency, jeopardizing her candidacy.
Omarova, a law professor at Cornell University, has for years advocated for far stricter rules over the banking sector, including moving consumer banking to the Fed from private institutions.

Saule Omarova
United States Committee on Banking, Housing and Urban Affairs

President Joe Biden’s pick to run one of Washington’s most important banking industry regulators might not have enough support for confirmation in the Senate.
Senate Democrats are fractured over whether to support Saule Omarova, Biden’s indicated choice to lead the Office of the Comptroller of the Currency, jeopardizing her candidacy.

Any Democratic defection, or an indication of such, could force Senate leadership to scrap the nomination before putting Omarova up to a vote.
Her selection, coupled with her views on how to overhaul the U.S. banking system, prompted several Senate Democrats or their staff to complain to the White House and suggest that the president’s choice will be tough to support on Capitol Hill, according to a person familiar with the matter.
This person declined to be named in order to speak openly about private discussions between the White House and Senate offices.

Others surrounding the OCC nomination process said a handful of moderate Democrats harbor reservations about Omarova and her aspirations to “end banking as we know it,” as she suggested in a Vanderbilt Law Review article.
Those people cautioned that skeptical senators likely haven’t made a final decision yet but are leaning against her candidacy.

Sen. Jon Tester, D-Mont., told CNBC on Tuesday that he has concerns about Omarova’s candidacy. Tester, known in the Senate as a champion of community banks, did not indicate whether he opposes her outright.
“Some of Ms. Omarova’s past statements about the role of government in the financial system raise concerns about her ability to impartially serve at the Office of the Comptroller of the Currency,” he said. “I’m looking forward to meeting with her to discuss them.”
Tester, a moderate member of the Senate banking committee, would also vote on whether to recommend Omarova to the broader chamber. A representative for Sen. Mark Warner, another moderate on the banking committee, said the Virginia Democrat has not yet made a decision on whether to support Omarova.
Biden in September announced his intent to nominate Omarova as Comptroller of the Currency, the top position in an independent branch of the Treasury Department that oversees the nation’s largest banks, including JPMorgan Chase, Wells Fargo and Bank of America.
The office of banking committee Chairman Sen. Sherrod Brown, D-Ohio, a fierce advocate of Omarova’s, reiterated its support for Biden’s pick.
“Senator Brown and the White House continue to push back against Republicans’ misleading statements against Ms. Omarova’s character and policy positions,” a spokesperson said.
The White House continues to support Omarova’s nomination, an official said.
Notably, the White House has yet to formally submit nomination papers to the Senate, notwithstanding Biden’s stated intent to nominate. If confirmed, Omarova, hailed by her supporters as a brilliant communicator with sterling credentials, would be the first comptroller who is not a white man.

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The OCC is considered among the nation’s most powerful bank regulators, similar in function and rank to the Federal Deposit Insurance Corporation and the Federal Reserve.
The comptroller regulates about 1,200 banks with total assets around $14 trillion, or two-thirds of the entire U.S. banking system. Its representatives work inside the nation’s largest lenders to ensure banks are safe by abiding by federal law, providing fair access to financial services and otherwise examining bank management.
In a committee split between 12 Democrats and 12 Republicans and in a Senate split 50-50, a single “nay” from the majority could doom a presidential nominee. Republicans are universally opposed to her candidacy.
The office of Senate Majority Leader Chuck Schumer, D-N.Y., did not respond to multiple requests for comment.
With precious little time left between now and year’s end, Schumer would likely be hard-pressed to devote resources to a thorny OCC nomination and risk embarrassing the party with the possibility of a failed vote.
Instead, Schumer wants to maximize time and energy sorting out Democrats’ multitrillion-dollar antipoverty and climate reconciliation bill, a defense appropriations measure and another debate about the debt limit.
Omarova, a law professor at Cornell University, has for years advocated for far stricter rules over the banking sector, including moving consumer banking to the Fed from private institutions. Cornell did not immediately reply to CNBC’s request seeking comment from Omarova.
Many Republicans have warned against her candidacy since Biden announced his intent to nominate her last month.
Sen. Pat Toomey, a Pennsylvania Republican and ranking member of the banking committee, said in a press release earlier this month that he doesn’t think he’s “ever seen a more radical choice for any regulatory spot in our federal government.”
“There’s a lot that’s extraordinary and radical here—but maybe the heart of it is that Ms. Omarova doesn’t just want tightened regulation of banks,” he added. “She clearly has an aversion to anything like free market capitalism … in an October 2020 paper called ‘The People’s Ledger,’ she outlined a plan for ‘radically reshaping the basic architecture and dynamics of modern finance.'”
In a recent paper, Omarova championed the “democratization” of money by restructuring the Fed for generating and allocating financial resources across the U.S. economy as a means to combat the advent of thousands of new digital monies and risks posed by cryptocurrencies.
“This Article offers a blueprint for reshaping the basic architecture and dynamics of modern finance,” she wrote. “Doing so is especially urgent in light of the ongoing digitization of finance, which includes rapid proliferation of privately issued digital money and privately run digital payments systems.”
The Biden administration has failed to fill the OCC job to date. Progressive opposition forced the White House to abandon prior nominee Michael Barr earlier this year, leaving former Fed official Michael Hsu to serve as the acting OCC chief since May.

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Fans gather at local Ulta Beauty in Houston to greet Kylie Jenner at the launch of her cosmetics line on November 18, 2018 in Houston, Texas.
Rick Kern | Getty Images

Check out the companies making headlines in midday trading.
Ulta — Shares of the cosmetics store dropped 10.6% after the company released long-term financial targets during its investor day. Some investors might be disappointed that Ulta didn’t issue guidance for full-year 2021. The stock is up more than 34% this year.

ProShares Bitcoin Strategy ETF — Shares of the long-awaited bitcoin ETF jumped 4.5% in its trading debut on the New York Stock Exchange Tuesday. The fund tracks CME bitcoin futures, or contracts speculating on the future price of bitcoin, not the digital currency itself. It’s the first bitcoin-linked ETF to trade in the U.S.
Intuitive Surgical — The medical robotics company ticked 1.2% higher in midday trading after releasing encouraging preliminary data from its ION platform’s peripheral lung nodule biopsies. ION is Intuitive’s FDA-approved, robotic-assisted platform for minimally-invasive lung biopsy.
Johnson & Johnson — Shares of Johnson & Johnson rose 2.3% after the company beat third-quarter earnings-per-share expectations by 25 cents per share. The pharmaceutical company said it sold $502 million of its Covid-19 vaccine in the third-quarter.
Alibaba — Shares of the Chinese e-commerce giant popped 6.1% after the company announced it has developed a custom computer chip that it will use to power its data center servers. 
ChargePoint Holdings — The electric vehicle infrastructure company rallied 6.4% after Stifel initiated coverage of ChargePoint with a buy rating. The Wall Street firm said it sees positive free cash flow as early as 2024 for the electric vehicle infrastructure company.

Procter & Gamble — Shares of the consumer giant dipped 1.2% after the company raised its forecast for commodity and freight costs for the remainder of the fiscal year amid persisting inflation. P&G reported fiscal first-quarter net income of $4.11 billion, or $1.61 per share, down from $4.28 billion, or $1.63 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $1.59.
Travelers — The insurance stock rose 1.6% after a better-than-expected third-quarter report. Travelers earned $2.60 per share on $8.81 billion in revenue, boosted by a gain in net written premiums.
Walmart — Shares of the retail giant rose 2.1% after Goldman Sachs added the stock to its conviction buy list. Goldman said in a note to clients that Walmart’s investments in e-commerce and its supply chain should boost profits.
— with reporting from CNBC’s Jesse Pound, Hannah Miao, Tanaya Macheel and Yun Li.

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House Democrats proposed a prohibition on converting pre-tax IRA and 401(k) plan funds to Roth savings for wealthy taxpayers.
The repeal on such Roth conversions would start after a decade, in 2032, however.
That would give ample time for individuals to carry out a conversion, and generate more tax revenue for Democrats’ policy agenda, according to tax experts.

Photo by Mike Kline (notkalvin) | Moment | Getty Images

House Democrats proposed a rule to forbid Roth conversions for the wealthy as part of a broad package of tax increases on affluent Americans.
But there’s an irony in the proposal, according to tax experts.

A Roth conversion is a mechanism that allows taxpayers to switch their traditional (pre-tax) retirement savings to after-tax Roth funds. The person must pay income tax on the converted amount.
Unlike other aspects of Democrats’ tax package, most of which would take effect in 2022, the prohibition on Roth conversions of pre-tax funds doesn’t kick in for 10 years. The long lead time would give more wealthy taxpayers the ability to convert their retirement accounts before being disallowed — which would eke out extra tax revenue for Democrats’ policy agenda, experts said.
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But the provision would also promote the very conversions they’re trying to curtail, according to Ed Slott, an accountant and retirement expert based in Rockville Centre, New York.
“[The legislation] encourages an acceleration of Roth conversions,” Slott said. “[Democrats] need the money.

“They still want all the conversion tax revenue to pay for everything else in the bill.”
Of course, after the 10 years, the wealthy would no longer be able to use Roth conversions to skirt existing income limits on Roth individual retirement accounts.

Currently, single individuals can’t contribute to Roth IRAs if they make at least $140,000 of income in 2021. (There’s a $208,000 limit for married couples who file a joint tax return.)
But there isn’t an income limit on Roth conversions – allowing the wealthy to get a “backdoor” Roth IRA.
Roth IRAs are financially attractive due to tax-free investment earnings, no future taxes upon withdrawal, and no annual required minimum distributions.
However, Democrats’ tax proposal, passed last month by the House Ways and Means Committee, would disallow Roth conversions from a pre-tax IRA or employer-sponsored retirement plan for single taxpayers with over $400,000 of annual income (and married couples with more than $450,000) after 2031.

“By keeping Roth conversions up for high-income taxpayers on the table for another decade, legislators can count on the income from those conversions for budget projections,” wrote certified financial planner Jeffrey Levine and Michael Kitces, respectively chief planning officer and head of planning strategy for St. Louis-based Buckingham Wealth Partners, in an analysis of the tax proposals.
A spokesperson for the House Ways and Means Committee didn’t return a request for comment on the proposal’s timeline.
The Joint Committee on Taxation, Congress’ tax scorekeeper, estimates the provision would raise $749 million through 2031. That’s a sliver of the $2 trillion or so that would be raised over a decade by other tax provisions aimed at the wealthy and corporations, which would fund measures to expand education, child care, paid leave and health care, among other things.
The Senate hasn’t yet unveiled its tax-reform package, which may not include the Roth-conversion prohibition.

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Tuesday’s session from Europe of the Sustainable Future Forum focused on providing energy.
No discussion on our Sustainable Future would be complete without taking a look at how we are going to power the change. Fossil fuels are still our main source of energy but things are changing.

CNBC took a look at the energy transition, from the role incumbent energy providers will play, to the new start-ups that are looking to change the business model one green-step at a time.
The lineup for Tuesday’s sessions are below, and click here for the full schedule of the week.

Panel: Can hydrogen power the energy transition?6:30 p.m. SGT/HK | 11:30 a.m. BST
Marco Alverà, CEO of Snam, and Christian Bruch, CEO of Siemens Energy. 
With the clean energy transition underway, hydrogen is back in the spotlight. Offering a light, storable and energy-dense solution to providing cleaner energy, green hydrogen is playing an increasingly important role in the journey to a low-carbon future. We’ll hear from Italian energy infrastructure operator Snam and Germany’s Siemens Energy about the role hydrogen can play in powering the energy transition, whether that transition is coming fast enough and what investment is still needed.
Add to calendar

Fireside: Accelerating the energy transition7 p.m. SGT/HK | 12 p.m. BST
Ignacio Galán, chairman and CEO of Iberdrola.
Ignacio Galán, the CEO of Iberdrola, has long been a champion of renewable energy, transforming the company from an operator of fossil fuel plants into an offshore wind and solar powerhouse. He wants there to be a sense of urgency in Europe’s transition to cleaner energy, and will discuss how we get there, what his strategy is to double Iberdrola’s renewable power capacity by 2025, and what impact the gas crisis will have on Europe’s long-term decarbonization goals.

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Take a look at some of the biggest movers in the premarket:
Procter & Gamble (PG) – The consumer products giant beat estimates by 2 cents a share, with quarterly earnings of $1.61 per share. Revenue also topped Wall Street forecasts. P&G said it was facing increasing commodity and transportation costs, however, and its shares fell 1.1% in the premarket.

Johnson & Johnson (JNJ) – J&J shares rose 1% in premarket trading after the company reported quarterly profit of $2.60 per share, 25 cents a share above estimates. Revenue was slightly below analysts’ forecasts. J&J also raised its full-year outlook, noting strength across all its businesses.
Travelers (TRV) – The insurance company’s stock jumped 3.3% in premarket action after it beat top and bottom line estimates for the third quarter. Travelers earned $2.60 per share, well above the $1.67 a share consensus estimate, helped by strong investment and underwriting results.
Bank of New York Mellon (BK) – The bank came in 3 cents a share ahead of estimates, with quarterly earnings of $1.04 per share. Revenue also came in above consensus, benefiting from funds released from credit loss provisions, as well as increased fee income.
Halliburton (HAL) – The oilfield services company matched forecasts, with quarterly profit of 28 cents per share. Revenue fell short of analysts’ predictions. Halliburton results were helped by rising oil prices, and the company expects that trend to continue. Its shares fell 1% in premarket trading.
Walmart (WMT) – Walmart added 1.9% in the premarket after Goldman Sachs added the retailer’s stock to its “Conviction Buy” list, citing the company’s increasing ability to generate earnings growth.

Philip Morris International (PM) – The tobacco producer came in 3 cents a share ahead of estimates, with quarterly earnings of $1.58 per share. An increase in shipment volumes helped revenue rise above forecasts as well.
Alibaba (BABA) – Alibaba announced it has developed a custom computer chip that the China-based tech giant will use to power its data center servers. The chip will not be available for use outside of Alibaba. The stock gained 1.8% in the premarket.
BioNTech (BNTX), Pfizer (PFE), Moderna (MRNA) – The drugmakers are on watch list after multiple reports that the Food and Drug Administration was set to approve “mix and match” Covid-19 vaccine booster doses this week, allowing people to receive boosters with a different vaccine than they originally received. BioNTech jumped 2.7% in premarket trading, while Moderna added 1.8%.
Sinclair Broadcast Group (SBGI) – Sinclair is still working to contain a cybersecurity breach that disrupted operations throughout its TV broadcast stations and networks. The company said it could not yet determine if the disruption will have a material impact on its financial results.
Zions Bancorp (ZION) – Zions beat estimates by 10 cents a share, with quarterly earnings of $1.45 per share. The bank’s revenue fell below Wall Street forecasts. Zions said loan demand has recovered after several weak quarters. Its stock slid 2.1% in the premarket.

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