Finance

The New York Stock Exchange welcomes The Walt Disney Company (NYSE: DIS), today, Tuesday, May 4, 2021, in honor of Star Wars Day.
Source: NYSE

Check out the companies making headlines in midday trading.
Occidental Petroleum — Shares of the energy company gained 4% after Truist upgraded the stock to a buy rating based on an expected jump in shareholder returns. The firm also raised its target on the stock from $35 to $50, with the new forecast implying a nearly 60% upside from Friday’s closing price. APA and Diamondback Energy, meanwhile, advanced 2.1% and 0.9%, respectively, on the back of West Texas Intermediate crude futures, the U.S. oil benchmark, rising to its highest level in seven years on Monday.

Zillow — The real estate stock dropped 9.5% after Zillow announced that it would not sign any new contracts to buy homes through the end of the year “due to a backlog in renovations and operational capacity constraints.” In a press release, the company’s CEO cited labor and supply issues as a reason for the backlog.
Walt Disney — Shares of the media giant ticked 3% lower in midday trading after Barclays downgraded Disney to equal weight from overweight. The Wall Street firm cited a slowdown in subscriber growth for Disney+, saying that the company’s long-term subscriber goals seemed optimistic.
Albertsons — Albertsons shares rose 3.3% after the supermarket chain’s quarterly earnings report beat Wall Street’s expectations. The company posted profit of 64 cents per share on revenue of $16.51 billion, versus 45 cents per share on revenue of $15.86 billion expected, according to StreetAccount. Albertsons also increased its quarterly dividend by 20%.
Biogen — Shares of the drugmaker fell 4.1% in midday trading after announcing its late-stage trial of an experiment ALS treatment did not reach its primary goal.
State Street — State Street shares added 2.2% after the financial services firm’s third-quarter earnings beat expectations. The company posted adjusted earnings of $2 per share versus $1.92 per share expected, according to StreetAccount. Revenue also topped projections. State Street said it would resume its share buyback program in the second quarter of 2022.

Virgin Galactic — Shares of Virgin Galactic fell 1.5%, continuing a slide from Friday, after UBS downgraded the stock to sell from neutral. The downgraded followed Virgin’s announcement last week that it was delaying its next flight launch until 2022.
Philips — Shares of Philips fell 3.1% after the Dutch medical technology company reported lower-than-expected quarterly revenue. Philips also lowered its sales and profit outlook for the full year, citing persistent supply chain challenges.
Stellantis — Shares of Stellantis retreated 2% after the automaker announced it would form a joint venture with battery marker LG Energy Solution to produce battery cells and modules for North America. The batteries would be supplied to Stellantis plants in the U.S., Canada and Mexico.
Revance Therapeutics — Shares of Revance Therapeutics plunged 39.2% after the U.S. Food and Drug Administration late last week declined to approve the biotechnology company’s frown line treatment. The treatment was seen as potential competitor to the Botox injection.
NetApp — Shares of NetApp fell 4.3% after Goldman downgraded the cloud computing stock to a sell from neutral. Goldman also cut its price target on the stock to $81 per share from $85.
CDW — CDW shares rose 4.8% after the technology company announced it would acquire Sirius Computer Solutions for $2.5 billion in cash.
Medtronic — Shares of Medtronic fell 5.5% after the company provided an update on a clinical study of its Symplicity Renal Denervation System to lower blood pressure. Medtronic said the study’s independent safety monitoring board did not recommend pausing the trial early.

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Carl Icahn said Monday that U.S. markets could see major challenges over the long term in the face of excessive money supply and rising inflation.
“In the long run we are certainly going to hit the wall,” Icahn said. “I really think there will be a crisis the way we are going, the way we are printing money, the way we are going into inflation.”
The Federal Reserve and Congress have unleased trillions of dollars in stimulus to rescue the economy from the Covid-19 pandemic.
Icahn was adamant about not making a market timing call, but he believes one day over the long term the markets will pay the price for these policies.

Longtime activist investor Carl Icahn said Monday that the U.S. markets could see major challenges over the long term in the face of excessive money supply and rising inflation.
“In the long run we are certainly going to hit the wall,” Icahn said Monday on CNBC’s “Fast Money Halftime Report.” “I really think there will be a crisis the way we are going, the way we are printing money, the way we are going into inflation. If you look around you, you see inflation all around you and I don’t know how you deal with that in the long term.”

The Federal Reserve and Congress have unleased trillions of dollars in stimulus to rescue the economy from the Covid-19 pandemic. The central bank’s balance sheet swelled by more than $3 trillion amid its open-ended quantitative easing program, while the government has allocated over $5 trillion in stimulus to support Americans through the health crisis.
Icahn was adamant about not making a market timing call, but he believes one day over the long term the markets will pay the price for these policies.
On the back of these unprecedented stimulus programs, the S&P 500 has rapidly wiped out the pandemic-induced losses and rebounded to a new high. The equity benchmark is up more than 19% in 2021, sitting just 1.4% below its all-time high reached early September.
The massive money supply has partly contributed to rising price pressures in the economy. Inflation ran at a fresh 30-year high in August amid supply chain disruptions and extraordinarily strong demand.
The core personal consumption expenditures price index, which excludes food and energy costs and is the Fed’s preferred measure of inflation, increased 0.3% for the month and was up 3.6% from a year ago.

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Berlin-based fintech firm N26 has raised $900 million in a new funding round led by Third Point and Coatue.
The round values the eight-year-old start-up at $9 billion, higher than the market cap of Germany’s second-biggest listed bank.
N26 expects it will be ready to go public within the next 12 to 18 months, co-CEO Maximilian Tayenthal said.

N26’s logo seen displayed on a smartphone.
Rafael Henrique | SOPA Images | LightRocket via Getty Images

LONDON — German digital bank N26 said on Tuesday it has raised $900 million in a new funding round that values the firm at $9 billion.
That’s nearly three times N26’s valuation in its last private fundraising round and means it’s now worth slightly more than Commerzbank, Germany’s second-largest listed lender. Frankfurt-listed Commerzbank has a market cap of 7.6 billion euros ($8.8 billion).

N26, which counts billionaires Peter Thiel and Li Ka-Shing as investors, raised the fresh cash from Third Point, the hedge fund led by U.S. billionaire investor Dan Loeb, and Coatue, while Dragoneer also invested.
Founded in 2013, N26 is one of several start-ups in Europe seeking to challenge established banks with app-based checking accounts and little to no fees. Competitors include Revolut, which was recently valued at $33 billion, and Monzo.
Maximilian Tayenthal, N26’s founder and co-CEO, said the company plans to spend the extra cash on hiring 1,000 people globally and on launching new features like cryptocurrency trading.
“We want to bring in more people with a focus on product, technology and security,” Tayenthal told CNBC in an interview.

IPO ambitions

N26 now has 7 million customers across Europe and the U.S. and is on track to process $90 billion in transactions this year. The company recently acquired a banking license in Brazil, with a team of 40 employees already on the ground in São Paulo. N26 expects to roll out its app publicly in the country within the next year, Tayenthal said.

N26 now has enough “financial leeway” to prepare for an initial public offering, Tayenthal said, adding that he expects the firm to be “structurally IPO-ready” within the next 12 to 18 months.
“We have no hurry to go public,” Tayenthal said. “With increasing profitability, the kind of money we are raising right now, it really takes away any time pressure.”
With plenty of money available in private equity markets, many tech companies are opting to stay private for longer. Stripe, for example, raised funds at a $95 billion valuation earlier this year, making it one of the most valuable start-ups in the U.S.
Several European fintechs have managed to reach multibillion-dollar valuations amid surging investment activity. Revolut was recently valued at $33 billion in a funding round led by SoftBank, for example.
However, some investors have expressed concern about their ability to make a profit.
N26 is still loss-making, racking up losses of 216.9 million euros in 2019. Its European business lost 110 million euros in 2020, down from 165 million a year earlier. Tayenthal said N26 isn’t under pressure from investors to make a profit anytime soon.

Growing pains

Like other fintech companies, N26 has dealt with growing pains lately. The firm faced outcry from staff at its Berlin office last year, who at the time said that trust in management was at an “all-time low.”
Meanwhile, N26 was fined $5 million by BaFin, Germany’s financial services regulator, for being late to submit suspicious activity reports that are used by authorities to investigate money laundering.
On Tuesday, the bank said it had reached an agreement with BaFin to limit how many customers it onboards each month to a maximum of 50,000 to 70,000. The watchdog is expected to publish the decision in an upcoming order, N26 said.
Tayenthal warned the move is likely to slow N26’s growth significantly in the short term.
“For a couple of months, it will be material to the business,” he said.
As for work culture, Tayenthal says the firm has worked to improve employee representation at the company over the past year. The company has also begun to foster a shift toward flexible work during the Covid-19 pandemic, he added.
“We were actually very strong believers in having everyone in the office as much as possible. We are moving away from that,” Tayenthal said.
“There [are] obviously certain roles where you need to be in the office more regularly. And we also believe in bringing people together occasionally, but we are going to move to a more flexible model.”
N26 isn’t the only fintech embracing remote work. Revolut has said it will allow employees to work overseas for up to 60 days a year. Such moves are in contrast with major Wall Street banks like JPMorgan and Goldman Sachs, which are encouraging workers to return to the office. Some big European lenders are taking a more flexible approach.
N26 said it would expand its staff equity ownership scheme to cover all employees. Germany last year unveiled plans to reform its rules on employee stock options, a typical perk at many tech start-ups.

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Scams linked to the Covid-19 pandemic have cost Americans $586 million since the beginning of 2020, according to the Federal Trade Commission.
The typical victim lost $392, as measured by the median fraud loss. Online shopping scams were the most prolific type of fraud.
Pandemic scams are on the decline. The number of daily consumer fraud reports is at its lowest level since mid-March 2020.

boonchai wedmakawand | Moment | Getty Images

Consumers have lost $586 million to fraud linked to the Covid-19 pandemic, according to data from the Federal Trade Commission.
Americans filed more than 269,000 fraud complaints from the beginning of 2020 to Oct. 14, 2021, according to most recent federal data. (Consumers cited Covid, stimulus or related terms in the complaints.)

The typical victim (as measured by the median) lost $392, in a range of schemes targeting online shoppers, travelers and others. The losses skew higher for older Americans: Seniors over age 80 lost $1,000 each.
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However, pandemic-related scams appear to be declining, officials report.
There were 273 consumer complaints filed Thursday (as measured by the rolling 14-day average), according to FTC data. That’s the lowest level since March 16, 2020.
It’s also about eight times less than the 2,100-daily-complaint peak in early April this year, around the time Covid vaccinations were beginning to be deployed more broadly and the federal government was issuing $1,400 stimulus checks authorized by the American Rescue Plan.

Online shopping accounted for the largest number of reported scams to the FTC, at about 57,600 complaints.

Americans increased their online shopping activity during the pandemic, since they were spending more time indoors.
But many were victims of “opportunistic websites” claiming to sell popular, in-demand items — anything from hand sanitizer and gloves to electronics, clothing and even puppies, according to the FTC. Customers ordered the items but then never received them.
Price-gouging was also prevalent. It was the most commonly reported pandemic-related issue in 2020, according to state and local consumer agencies polled by the Consumer Federation of America. Consumers complained of being charged exorbitant prices for sought-after products such as hand sanitizer, toilet paper and masks.

State and local agencies also received Covid-associated complaints in a wide range of other categories, such as evictions, canceled events and travel, schools and child care, the report said.
Victims lost the largest amount of total money ($81 million) to vacation and travel scams, according to FTC data. Most fraud relates to refunds and cancellations, the agency said.
The true scope of consumer complaints and losses is likely much higher than official statistics indicate, since the data is self-reported by consumers.

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Life Changes

Raising a child is often more expensive than parents expect, according to financial advisors.
The average middle-income married couple spends $12,350 to $13,900 a year to do so, the U.S. Department of Agriculture estimates.
Here are some top financial considerations for new and expecting parents, from budgeting to college savings and insurance.

AJ_Watt | E+ | Getty Images

There are a lot of “firsts” for new parents — and measures to shore up household finances are among them.
Expenses for a new baby are often higher than parents expect, according to financial advisors.

The average middle-income married couple spends $12,350 to $13,900 a year to raise a child, according to most recent estimates published by the U.S. Department of Agriculture. (The data, for a 2015 birth, includes costs like housing, food, child care and health care. It doesn’t include pregnancy or college costs.)
But there are important factors beyond everyday costs, too. Here are some top considerations for new and expecting parents.

Finetune your budget

Budgeting might seem like an obvious necessity.
But managing cash flow goes beyond saving for big upfront costs like medical bills for hospital stays, clothes, nursery furniture and baby gear, according to Eric Roberge, a certified financial planner and founder of Beyond Your Hammock in Boston.
“While it is smart to save in advance for these expenses, you also need to consider the fact that having kids introduces more ongoing fixed costs into your normal spending,” Roberge said.

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Such costs may include baby formula, bottles, diapers and wipes, for example. Parents should weigh these fixed expenses alongside others that may also arise, like a higher monthly rent or mortgage for a larger living space, Roberge added.
Expecting parents should also cut back on unnecessary expenses, and save or pay down debt (like credit cards, car loans and student loans) aggressively before the baby arrives to free up wiggle room in their budget, according to Sophia Bera, CFP, founder of Gen Y Planning in Austin, Texas.
Parents should also determine how their health plan covers birth costs and what they may need to be paid out of pocket, Bera said. Further, they should review their maternity and paternity leave benefits, and determine how to optimize them. (For example, should each parent use the benefits at the same time or stagger them? Will parents need, and be able to afford, extra, unpaid time off?)

Buy life insurance

Nitat Termmee | Moment | Getty Images

Life insurance offers financial protection for a new child in the event of a parent’s untimely death (and associated loss of income).
Financial advisors recommend buying it before the baby arrives, if possible. Term insurance, which lasts for a specified period, is typically easiest and cheapest and has a fixed premium.
A 20- or 30-year policy is appropriate for most families, to cover children through high school or college to legal adulthood, advisors said.
Parents should buy enough insurance to cover 10 to 15 times their current income, according to CFP Stacy Francis, president and chief executive of Francis Financial in New York.

For example, someone earning $100,000 would buy a policy with a $1 million to $1.5 million death benefit. (The premiums may amount to less than $1,000 a year for someone in their 30s, depending on health and amount, Francis said.)
One important consideration: Families may wish to get additional insurance on a stay-at-home parent who doesn’t earn an income, since the surviving spouse would likely incur higher costs via child care, for example, Francis said.
Another factor: It’s worth exploring insurance offered through an employer, which is typically cheaper than private insurance, but it’s not always possible or inexpensive for a parent to take the policy with them if they leave the job, Roberge said.

Start a college savings plan

JGI | Jamie Grill | Blend Images | Getty Images

A 529 college savings plan is a tax-advantaged investment account. Think of it like a 401(k) plan, but for education instead of retirement savings.
529 contributions and investment earnings can be used for qualified expenses like college tuition, fees, books, and room and board.
There are many available options, but parents can consult a resource like SavingforCollege.com, which consolidates information on state-sponsored plans, Bera said.
It’s tough to know exactly what college will cost and how much to save. But the most important thing is for parents to start as soon as possible so the money has more time to grow, Bera said. Parents can start with $1,000 up front and then $100 or $200 a month afterward, she said.

“That compound interest really goes far,” Bera said.
Parents can also request contributions to a 529 in lieu of physical gifts for a child, Roberge said.
Putting 100% of one’s college-savings budget into a 529 may not be the best approach for all families, he cautioned. For flexibility, some clients put half their college-savings budget in a 529; they put the rest in a taxable brokerage account or fund remaining college costs from cash flow in the future, he said. (That’s because parents may face penalties if they need to withdraw 529 savings for anything other than qualified education costs.)

Fund other accounts

damircudic | E+ | Getty Images

New parents should weigh funding other tax-advantaged accounts, like flexible spending accounts and dependent daycare FSAs, offered through the workplace, advisors said.
FSA contributions are pre-tax savings that cover out-of-pocket medical costs like copayments, deductibles and some drugs — which are likely to rise due to more frequent doctor visits. Dependent care FSAs cover costs like daycare, summer day camp, and before- or after-school programs.
Parents can sign up for these benefits during their employer’s annual open-enrollment period. There’s a cap on annual contributions and employers may not offer the benefits.
Here’s an example of the tax savings, provided by benefits firm HealthEquity. Let’s say a family has a 30% effective tax rate, $300 a month in daycare costs, $50 a month in after-school programs, and a $500 summer camp. This family would save $1,350 a year in taxes by paying for the costs with a dependent care FSA.

Update your will

Parents should also update their wills, advisors said.
This step will ensure parents’ money and other assets go to a child in the event they pass away unexpectedly, and that the child is cared for by a trusted and willing guardian, Francis said.
Parents should also update beneficiaries on investment and other accounts, she said. More

Take a look at some of the biggest movers in the premarket:
Zillow (Z) – Zillow slid 6.4% in premarket trading, following a Bloomberg report that the company has temporarily stopped its home-buying service due to overwhelming demand.

Revance Therapeutics (RVNC) – Revance shares plunged 33.2% in the premarket after the Food and Drug Administration declined to approve an injectable treatment for facial lines, noting deficiencies following the FDA’s inspection of manufacturing facilities. The company said no other concerns were raised in the FDA’s response. The treatment is seen as a possible competitor to the best-selling treatment Botox.
Walt Disney (DIS) – Disney lost 1.8% in the premarket after Barclays downgraded the stock to “equal weight” from “overweight,” citing concerns about a significant slowdown in growth for the Disney+ streaming service.
Albertsons (ACI) – The supermarket operator earned 64 cents per share for its latest quarter, beating the 45 cents a share consensus estimate. Revenue also topped Wall Street forecasts. Albertsons increased its quarterly dividend by 20% to 12 cents per share. Its shares jumped 3.6% in premarket action.
Netflix (NFLX) – Netflix estimates the value of its hit series “Squid Game” at nearly $900 million, according to an internal document seen by Bloomberg. The series cost just $21.4 million to produce.
Philips (PHG) – Philips reported lower-than-expected sales for the third quarter, and the Dutch medical technology company lowered its sales and profit outlook for the full year. Philips is taking a hard hit from a respirator recall and a global shortage of electronic components. Its shares fell 2.1% in the premarket.

Stellantis (STLA) – Stellantis is forming a joint venture with South Korean battery maker LG Energy Solution to produce batteries and components for the North American market. The batteries will be produced at the automaker’s plants in the U.S., Canada and Mexico. Stellantis shares slid 1% in premarket trading.
Goldman Sachs (GS) – Goldman received approval from China regulators to take full ownership of a local securities unit. Goldman did not disclose how much it paid for the 49% it did not own in the business that it has co-owned since 2004.
Biogen (BIIB) – The drugmaker said a late-stage trial of an experiment ALS treatment did not reach its primary goal, but noted favorable trends in other measures of progress toward treating the fatal disease. Its shares lost 1% in premarket action.
Southwest Airlines (LUV) – Southwest asked a federal court to reject an effort by its pilots to block the airline from enforcing a Covid vaccine mandate. The pilots union said Southwest changed work rules unilaterally without negotiating first.
NetApp (NTAP) – NetApp was downgraded to “sell” from “neutral” at Goldman Sachs, which cites the 2022 IT spending environment. It also cut its price target for the cloud computing company’s stock to $81 per share from $85. NetApp shares fell 2.2% in premarket trading.

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The Sustainable Future Forum Europe session on Monday focused on responsibility and regulation.
The way in which we achieve a sustainable future is everyone’s responsibility. From big business regulation and government targets to SME initiatives and personal consumer choices. We are all now environmental activists, but the way we engage with the issue is always unique.

CNBC breaks down the demographics of change and the laws and regulations that can guide it.
The lineup for Monday’s session is below, and click here for the full schedule of the week.

Fireside: How you can profit by fixing the world’s problems6:30 p.m. SGT/HK | 11:30 a.m. BST
Paul Polman, co-founder and chair of Imagine.
Climate change and inequality — and other profound shifts like pandemics, resource pressures, and shrinking biodiversity — threaten our very existence. Government cannot tackle this alone and business must step up. So says former Unilever boss Paul Polman in his seminal book, “A Net Positive,” co-written with sustainable business guru Andrew Winston. They reveal for the first time key lessons from Unilever and pioneering companies around the world on how you can profit by fixing the world’s problems, not creating them. To thrive today and tomorrow, they argue, companies must become “net positive” — giving more to the world than they take.
Add to calendar

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Gross domestic product grew 4.9% in the third quarter from a year ago, the National Bureau of Statistics said Monday. That missed expectations for a 5.2% expansion, according to analysts polled by Reuters.
Industrial production rose by 3.1% in September, below the 4.5% expected by Reuters. 
“Since entering the third quarter, domestic and overseas risks and challenges have increased,” Fu Linghui, spokesperson for the National Bureau of Statistics, said at a press conference Monday in Mandarin, according to a CNBC translation.

Aerial view of coal being unloaded from a cargo ship at Lianyungang port on Oct. 14, 2021 in Lianyungang, Jiangsu Province of China.
Wang Jianmin | Visual China Group | Getty Images

BEIJING — China’s third-quarter GDP grew a disappointing 4.9% as industrial activity rose less than expected in September.
The National Bureau of Statistics said Monday that gross domestic product grew 4.9% in the third quarter from a year ago. That missed expectations for a 5.2% expansion, according to analysts polled by Reuters.

Industrial production rose by 3.1% in September, below the 4.5% expected by Reuters. 
“Since entering the third quarter, domestic and overseas risks and challenges have increased,” Fu Linghui, spokesperson for the National Bureau of Statistics, said at a press conference Monday in Mandarin, according to a CNBC translation.

The power shortage had a “certain impact” on normal production, Fu said, but he added that the economic impact “is controllable.”
Many factories had to stop production in late September as a surge in the price of coal and a shortage of electricity prompted local authorities to abruptly cut off power. The central government has since emphasized it will boost coal supply and ensure the availability of electricity.
Monday’s data release also showed businesses were less keen to put money into future projects.

Real estate worries

Fixed asset investment for the first three quarters of the year came in weaker than expected, data from the National Bureau of Statistics showed. It was up 7.3% from a year ago compared to the expected 7.9% figure.
“Investment activities have been subdued as a result of the tight credit conditions,” said Chaoping Zhu, global market strategist at J.P. Morgan Asset Management.
Zhu estimated that fixed asset investment declined by 2.5% in September from a year ago, primarily dragged down by a 3.5% drop in real estate investment.

Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s estimates. In the last 18 months, Beijing has increased its efforts to reduce developers’ reliance on debt.
The struggles of giant developer Evergrande came to the forefront in August, when the company warned of default and subsequently missed payments to investors in its offshore U.S. dollar-denominated debt. China’s central bank said Friday that Evergrande is a unique case and that most developers had stable operations.

On Monday, the statistics bureau’s Fu noted there was a slowdown in the contribution of the real estate sector to the economy in the third quarter.
But he maintained that the impact to overall growth was limited.
The latest data showed consumer spending held up, despite pockets of coronavirus-related restrictions, and a fourth-straight monthly decline in auto sales.
Retail sales beat expectations, rising 4.4% in September from a year ago. The Reuters poll had predicted 3.3% growth.
The urban unemployment rate in September was 4.9%. However, that for those aged 16 to 24 remained far higher, at 14.6%.

China’s growth outlook

Read more about China from CNBC Pro

“On the regulation side, we think the authorities will better manage the pace and intensity of the regulatory campaign in order to complete major economic and social development targets set for this year and the next 5-10 years,” he said. “Officials can better communicate with the market about the motives behind the regulatory push and telegraph future regulatory hotspots, in our view.”
— CNBC’s Yen Nee Lee contributed to this report.

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