Finance

Check out the companies making headlines before the bell:
Affirm Holdings (AFRM) – Affirm soared 22.4% in the premarket as the “buy now, pay later” company’s revenue easily topped estimates. Active merchant numbers more than quintupled and Affirm issued a positive outlook as well.

Toyota Motor (TM) – The automaker cut its annual production target by 300,000 vehicles as factories in Vietnam and Malaysia were hit by the spread of Covid-19 and the ongoing computer chip shortage. Toyota gained 1.1% in the premarket.
Endo International (ENDP) – Endo surged 19.1% in premarket action after it agreed to pay $50 million to resolve lawsuits by New York State and two counties over the drug maker’s sale and marketing of opioids.
Bausch Health (BHC) – Bausch Health will pay $300 million to settle an antitrust lawsuit involving the company’s diabetes drug Glumetza. Bausch had been accused of illegally maintaining a monopoly on the treatment, with the price increasing nearly 800% in 2015.
Wells Fargo (WFC) – Wells Fargo was fined $250 million by regulators who said the bank has not made sufficient progress in solving ongoing issues in its mortgage business. Regulators had first identified those issues in a 2018 order. Wells Fargo shares added 2% in premarket action.
Nielsen Holdings (NLSN) – Nielsen CEO David Kenny defended the ratings company in a letter to TV industry executives and said Nielsen does need to move faster in adjusting its ratings systems to capture the consumer shift from traditional viewing to streaming. Nielsen shares rose 1.3% in the premarket.

Dave & Buster’s (PLAY) – Dave & Buster’s rallied 7.9% in premarket trading after it reported quarterly earnings of $1.07 per share, well above the 58-cent consensus estimate. The restaurant and arcade chain’s revenue beat Wall Street forecasts and Dave & Buster’s said it continues to see signs of recovery in its business. It expects that to continue, barring any significant Covid-related downturn.
American Outdoor Brands (AOUT) – American Outdoor Brands earned an adjusted 48 cents per share for its fiscal first quarter, 8 cents above estimates. The maker of outdoor recreational products got a boost from increased profit margins and higher sales in both domestic and international markets. It projects full-year earnings of $2.02 to $2.26 compared with a $2.24 consensus estimate. Shares slid 5.4% in the premarket.
Zumiez (ZUMZ) – Zumiez beat estimates by 23 cents with adjusted quarterly earnings of $1.02 per share, but revenue fell short of the consensus view. The maker of streetwear and action sports apparel did not provide an outlook, due to volatile market conditions, and shares fell 5.3% in premarket trading.
Take-Two Interactive (TTWO) – Take-Two is delaying new versions of its “Grand Theft Auto” video game by four months, saying it wants additional time to “further polish” the final products. Take-Two maintained its prior full-year outlook and shares fell 1.9% in the premarket.
Sunrun (RUN), First Solar (FSLR) – Sunrun rose 2.8% in premarket trading, while First Solar added 1.1%. Sunrun was rated “buy” in new coverage at Needham, and the firm initiated coverage on First Solar with a “hold” rating. Needham is upbeat on Sunrun because of its leading market position in the solar industry, while it has near-term concerns about profit margin pressures for First Solar.

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Switzerland’s stock exchange has obtained approval to launch its long-awaited digital bourse.
SIX management has said the company plans to offer stocks in the form of digital tokens.
The firm first unveiled plans to debut an exchange for digital assets back in 2018.

The SIX Swiss Exchange in Zurich, Switzerland.
Stefan Wermuth | Bloomberg via Getty Images

SIX, Switzerland’s stock exchange, has been given regulatory approval to launch its long-awaited digital bourse.
The SIX Digital Exchange said Friday it obtained two licenses from FINMA, the country’s markets watchdog, to operate a stock exchange and depository for blockchain-based securities.

SIX said it was now able to launch regulated trading, settlement and custody infrastructure based on distributed ledger technology — also known as the blockchain. Its the system best known for its use in maintaining an immutable list of all cryptocurrency transactions.
The firm did not say when it expects the new product to launch, or which assets it would allow investors to trade. However, the digital bourse could provide a regulated alternative to cryptocurrency exchanges, many of which operate outside the confines of established rules.
Binance, the world’s top crypto exchange, has faced several warnings and threats from authorities around the world. Meanwhile, Coinbase, which is a regulated business, has attracted the ire of the U.S. Securities and Exchange Commission recently.
SIX’s platform would also see Switzerland’s bourse get ahead of major exchanges like the New York Stock Exchange in offering securities based on the blockchain.
Thomas Zeeb, SIX’s global head of exchanges, has previously said the company plans to offer stocks in the form of digital tokens.

“Part of the core MVP (minimum viable product) would be equity listing, trading and settling,” Zeeb told CNBC in a 2019 interview.
“The other products are somewhat dependent on the ongoing dialogue we’re having with our clients around the use cases for bonds, for ETFs (exchange-traded funds), for non-custody assets like artwork or real estate,” he added. “That could take a little longer depending on where the banks are.”

Landmark move

The approval marks a significant milestone in the world of cryptocurrencies, which have been seeing growing acceptance from several big companies and even an entire nation as their prices have surged.
PayPal, Square and Mastercard are among the large financial firms to have offered support for digital currencies, while El Salvador this week became the first country to adopt bitcoin as legal tender.
The move from SIX would make it one of the first major bourses to launch an exchange dedicated to digital assets. The group first unveiled plans to debut a digital bourse back in 2018.
“I can’t afford to do an Uber, it doesn’t work,” Zeeb said in 2019, referring to the ride-hailing company’s notoriety for launching in territories without first asking regulators for permission.
SIX Digital Exchange said it would continue to invest in developing its technology over the coming months. The company added that it hopes to attract clients including banks, insurance firms and institutional investors, and aims to launch its exchange network globally.
In a statement Friday, Zeeb said: “This is an important milestone in bringing the digitalization of capital markets into the mainstream, but it is only the beginning. We will continue to work with our clients, regulators, and other stakeholders to shape the markets of the future.”

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U.S. stock index futures were little changed during overnight trading on Thursday, after stocks registered a fourth-straight day of losses.
Futures contracts tied to the Dow Jones Industrial Average rose 15 points. S&P 500 futures and Nasdaq 100 futures were both also little changed.

During regular trading the Dow shed roughly 150 points, or 0.43%, while the S&P slid 0.46%. It was the fourth consecutive day of losses for each. The Nasdaq Composite dipped 0.25% for its second straight day of losses. It’s the first time since the middle of August that the tech-heavy index has registered back-to-back losses.
All three indices are on track to end the week in the red.

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A better-than-expected weekly jobless claims number capped Thursday’s losses. The Labor Department said that first-time unemployment filings during the prior week dropped to 310,000, the lowest level since the pandemic took hold. Economists surveyed by Dow Jones were expecting a print of 335,000.
For the holiday-shortened week, the consumer discretionary sector is the best-performing S&P group, up about a quarter of one percent. The other ten sectors are all in the red. Industrial and real estate stocks are the biggest losers, with each sector down more than 2%.
Markets are in somewhat of a holding pattern until there’s more clarity around the Federal Reserve’s next move. The central bank kicks off a two-day meeting on Sept. 21, and the Street will be watching for an update on the Fed’s bond-buying program. On Thursday the European Central Bank left its monetary policy unchanged, but said that it will slow the pace of its asset-purchase program.

“The pace of policy changes will be gradual enough not to derail the economic recovery or the equity rally, while the differences between the more hawkish and more dovish central banks will create opportunities,” said Mark Haefele, UBS Global Wealth Management chief investment officer.
“We expect major central banks to remain supportive of growth, keeping rates lower for longer. This is positive for equity markets, particularly cyclical and value areas of the market,” he added.
Despite Thursday’s losses the major averages are still hovering around their all-time highs. The Dow is roughly 2% below its record, while the Nasdaq and S&P are about 1% from theirs.
“New highs in the market are not an issue as long as they are supported by fundamentals,” Keith Lerner, co-chief investment officer at Truist, wrote in a recent note to clients. “The biggest driver behind stock returns this year has been earnings, with a capital E. This is consistent with one of our key themes over the past year, that the earnings power of corporate America was underappreciated,” he added.
Second-quarter earnings season is largely in the rearview mirror. But earnings reports are still trickling out, with Kroger on deck before Friday’s opening bell.

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The semiconductor shortage is affecting consumers’ ability to buy cars, smartphones and virtually all electronics — and there may be little relief in sight.
According to economist John Rutledge, the Covid-19 pandemic will continue to inflict pain on the global supply chain and contribute to the semi logjam into 2023.

“The nature of epidemics is that they don’t just have a one-and-done wave of infections. They have many waves of infections,” Safanad’s chief investment strategist told CNBC’s “Trading Nation” on Thursday.
Rutledge, who played a major role in President Ronald Reagan’s economic plan, warns that Covid variants will continue to close ports. It’s something that happened last month at China’s Ningbo-Zhoushan port, which is the third busiest in the world.
“That’s because of a small number of infections that developed there,” Rutledge said. “Seamen have not been inoculated around the world. So, some port, somewhere, is going to close again, and it’ll hit semis, but other things as well.”
He notes the closures, along with a lack of supplies and materials, are having widespread global impact.
“Mostly, you produce more slowly, and that’s what hits GDP,” said Rutledge, a CNBC contributor. “If you can’t get the materials you need, you have to slow down production.”

Rutledge also lists worker shortages as a major reason why supply chain troubles will linger.
“It’s not clear how many of those workers are afraid to go to work, don’t want to go to work or still have plenty of cash,” he said. “But it’s pretty clear to me that this worker shortage is not going to go away in three months or six months or 12 months.”
Rutledge attributes half of inflation to supply chain troubles. But what’s hurting production may be bullish for the market and the medium- to longer-term prognosis for the economic recovery.
“Growth is going to be a net positive, like the initial claims number we saw,” Rutledge said. “The global recovery is proceeding. It’s proceeding in waves.”
Disclosure: John Rutledge owns shares of Applied Materials, Taiwan Semiconductor, Nvidia and the iShares Semiconductor ETF.
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The Office of the Comptroller of the Currency said Thursday that the bank engaged in “unsafe or unsound practices” tied to its loan-modification program and violated the terms of a 2018 consent order that was critical of its risk-management systems.
Wells Fargo acknowledged the OCC’s regulatory action and said that a separate issue, a Consumer Financial Protection Bureau consent order from 2016, had expired.

Charles Scharf
Qilai Shen | Bloomberg | Getty Images

Wells Fargo was hit with a $250 million fine from a banking regulator after it failed to properly execute a mortgage loss mitigation program.
The Office of the Comptroller of the Currency said Thursday that the bank engaged in “unsafe or unsound practices” tied to its loan modification program and violated the terms of a 2018 consent order that was critical of its risk management systems.

“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” Acting Comptroller of the Currency Michael J. Hsu said in a statement. “In addition to the $250 million civil money penalty that we are assessing against Wells Fargo, today’s action puts limits on the bank’s future activities until existing problems in mortgage servicing are adequately addressed.”
In its own release, Wells Fargo acknowledged the OCC’s regulatory action and said that a separate issue, a Consumer Financial Protection Bureau consent order from 2016, had expired. Shares of the bank climbed 1.6% on the news.
Wells Fargo has paid more than $4 billion in penalties since its 2016 fake accounts scandal was uncovered. But the satisfaction of the CFPB consent order, one of the first actions it faced, could show that progress is being made. The bank had been operating under a dozen consent orders; one of them, from the Federal Reserve, limits the company’s ability to grow its balance sheet.
“Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority,” Wells Fargo CEO Charlie Scharf said in the statement. “The OCC’s actions today point to work we must continue to do to address significant, longstanding deficiencies.”
The OCC’s new enforcement action requires the bank to take “broad and comprehensive corrective” steps to improve the mortgage program and bars it from using third-party mortgage servicers.

Scharf said the expiration of the CFPB consent order tied to its sales practices is “representative of progress we are making” to resolve the bank’s many regulatory issues.
“We have done substantial work designed to ensure that the conduct at the core of the consent order – which was reprehensible and wholly inconsistent with the values on which this company was built – will not recur,” Scharf said.

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Thousands of workers who applied for federal unemployment benefits weeks or months ago are likely still waiting for their funds to arrive.
They can collect, despite the official expiration of federal benefits on Labor Day.
However, many individuals who are eligible for aid but haven’t yet applied have a limited time in which to do so.

Spencer Platt | Getty Images News | Getty Images

Federal unemployment benefits lapsed on Labor Day. But there’s good news for Americans who’ve been waiting weeks or months for that aid to arrive: They can still collect back pay past the cutoff date.
Workers who haven’t yet applied for the federal assistance can still do so, but many have less than 30 days to act.

Delayed unemployment benefits have been a common occurrence during the Covid-19 pandemic. State unemployment offices have contended with hurdles such as a historic volume of claims, understaffing, antiquated technology, elevated levels of fraud, and implementation of new rules and programs.
Data suggests thousands of people may still be waiting for aid to arrive.
About 19% of applicants — or about 104,000 people — whose first payment of state benefits arrived in July had waited at least 70 days to receive the funds, according to U.S. Department of Labor data. (By comparison, less than 1% waited that long before the pandemic.)

Back pay

However, states will still disburse any federal benefits owed to eligible applicants.
Those now-expired benefits include funds for the long-term unemployed and others (like the self-employed, independent contractors and gig workers) who don’t qualify for state unemployment insurance. They also include a $300 weekly supplement.

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“Any weeks of unemployment that occurred before these programs expire can still be paid retroactively if a claimant is later determined to be eligible for those weeks of benefits,” according to California’s Employment Development Department.
Federal benefits lapsed on either Saturday or Sunday (ahead of the official Monday cutoff) in all states due to their administrative rules. Nearly 9 million people were poised to lose all benefits and another 3 million were set for a $300 weekly cut in aid, according to Labor Department data issued Thursday.

Workers in Michigan, for example, who are waiting for a ruling from the state on their qualification for benefits can also get those funds retroactively, according to Michigan’s Department of Labor and Economic Opportunity.
“All protests and adjudications that have not been resolved by Sept. 4 will continue through the process despite the federal programs ending,” according to the department. “Benefits will be paid to claimants who are determined to be eligible.”
These individuals should continue to certify for benefits through Sept. 4, the agency added.

Limited time left to apply

Many jobless individuals eligible for federal benefits before Labor Day have a limited time in which to apply, if they haven’t already done so.
States must accept new applications for Pandemic Unemployment Assistance for 30 days after the program expired, according to a Sept. 3 memo issued by the Labor Department. (The PUA program, which is for self-employed and gig workers, would have ended on Sept. 4 or 5, depending on the state.)

Workers in the 26 states that ended some or all federal benefits early are out of luck, though. The 30-day application window in those states started in June or July, when they withdrew from the programs; that time period has already elapsed.
The long-term unemployed eligible for Pandemic Emergency Unemployment Compensation also seem to have a time limit to submit applications. However, that window isn’t as straightforward — it varies from state to state, based on its respective law for late filing of claims, according to a Labor Department memo published in July.

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Retail investors looked past the lack of clarity on GameStop turnaround plans and piled into the meme star.
The initial drop came as the company failed to provide an outlook for the upcoming quarters and details on its e-commerce transformation, which disappointed Wall Street analysts.

A man looks at GameStop at 6th Avenue on February 25, 2021 in New York.
John Smith | Corbis News | Getty Images

GameStop staged a stunning intraday comeback from its post-earnings sell-off on Thursday as retail investors looked past the lack of clarity on turnaround plans and piled into the meme star.
Shares of the video game retailer closed the session 0.2% higher at $199.18 in heavy trading after losing as much as 10.5% at its session low of $178 apiece.

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The initial drop came as GameStop failed to provide an outlook for the upcoming quarters and details on its e-commerce transformation, which disappointed Wall Street analysts. But signs emerged that small investors on Reddit’s chatroom WallStreetBets decided to buy the dip in the name, pushing the stock higher.
GME was the single most popular ticker mention on the forum, overtaking previous stars of the show Clover Health and SPY (the exchange-traded fund that tracks the S&P 500), according to alternative research provider Quiver Quantitative.
GameStop was also the most active trade on Fidelity as of 3 p.m. ET with nearly three times as many buy orders as sell orders, according to the broker’s website. Other meme stocks were also among the top buys on the platform, including AMC Entertainment, Vinco Ventures and Support.com.
On Thursday, about 7.5 million shares of GameStop changed hands, more than doubling its 30-day average trading volume, according to FactSet.
While GameStop fell short in terms of forward guidance, the retailer did post a narrower loss for the second quarter and higher sales.

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Moderna’s sign is seen outside of their headquarters in Cambridge, MA on March 11, 2021.
Boston Globe | Getty Images

Check out the companies making headlines in midday trading.
Moderna — Shares of the drug maker rose 7.8% after announcing it’s developing a two-in-one vaccine booster shot that protects against both Covid-19 and the seasonal flu. The new vaccine, which the company is calling mRNA-1073, combines Moderna’s current Covid vaccine with a flu shot that’s also under development, according to a press release.

Lululemon — The athleisure brand jumped 10.5% and hit an all-time high after reporting strong second-quarter earnings and said it’s on track to hit a 2023 revenue target ahead of schedule. The company has outperformed other retailers during the pandemic and is poised to continue to even as people return to offices.
GameStop — Shares of the video game retailer pared losses from a steep post-earnings sell-off to close 0.2% higher as retail investors rallied around the Reddit favorite. GameStop fell as much as 10% before punching back into the green intraday. The company posted a narrower loss in the second quarter compared with a year prior and rising sales. The retailer was light on providing an outlook for the upcoming quarters and details on its e-commerce transformation, which disappointed Wall Street analysts. The meme stock favored by Reddit traders is still up over 900% this year.
Boston Beer — Shares of the alcoholic beverage lost 3.8% after it pulled its earnings guidance late Wednesday amid a slowdown in sales of its hard seltzer brand Truly. That development came just a few weeks after the company blamed weaker-than-expected second-quarter earnings on poor Truly sales, leading it to cut its full-year forecast.
RH — Shares of the furniture retailer popped 7.8% after beating on the top and bottom lines of its quarterly results. RH earned $8.48 per share, topping estimates of $6.48 per share, according to Refinitiv. Revenue came in at $988.8 million, above expectations of $975.4 million.
Caesars Entertainment — Caesars shares gained 0.7% after the company announced it will sell the non-U.S. assets of its William Hill sports betting unit to British gambling firm 888 Holdings. The deal is worth about 2.2 billion pounds, or roughly $3 billion.

NetEase — Chinese regulators summoned NetEase and other gaming companies to remind them of restrictions on game time for children. Shares of NetEase retreated 2.1%.
Analog Devices — Analog Devices shares added 3.1% after the company announced its acquisition of rival chip maker Maxim Integrated Products is expected add to adjusted earnings in 12 months after closing, six months sooner than previously expected. Analog Devices said it expects the acquisition to be neutral to adjusted earnings in fiscal 2022.
Macy’s — Shares of the retailer gained 1.9% after Cowen upgraded the stock to an outperform rating, saying the stock can jump almost 30%. The firm pointed to the retailer’s digital push, as well as product innovation and pricing management as factors that will drive upside. Shares of Macy’s have nearly doubled this year.
Ford — Shares of Ford dipped 2.1% after the automaker said it would end vehicle production in India, costing about $2 billion. The company is shutting down two large plants in the country and about 4,000 people are expected to lose their jobs.
Blade Air Mobility — Shares of Blade surged 18.8% after JPMorgan said the aerial ride-sharing company could be the Uber of the skies. The firm predicts an 80% rally ahead for Blade and believes the aerial ride-sharing market could be worth tens of billions of dollars within a decade.
Leslie’s — Shares of Leslie’s rose 3.2% after Stifel initiated coverage of the pool stock with a buy rating. The firm said the stock is currently undervalued as Leslie’s is poised to “build upon its leading market share” in the pool and spa market.
— CNBC’s Pippa Stevens, Yun Li, Maggie Fitzgerald and Tanaya Macheel contributed reporting

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