Finance

Check out the companies making headlines before the bell:
Dick’s Sporting Goods (DKS) – The sporting goods retailer’s shares jumped 4.9% in the premarket, as its quarterly earnings beat estimates. The company also announced a $5.50 per share special dividend and a 21% increase in its quarterly dividend. Dick’s earned an adjusted $5.08 per share for its latest quarter, beating the consensus estimate of $2.80.

Johnson & Johnson (JNJ) – Johnson & Johnson said study data supports the benefits of a booster shot for recipients of its Covid-19 vaccine. The dose sharply increased levels of antibodies in two early-stage trials.
Express (EXPR) – Shares of the apparel retailer rallied 4.1% in the premarket after the company reported an unexpected profit for its latest quarter. Express earned 2 cents per share, compared with forecasts of a 30 cents per share loss, and revenue also came in above analyst forecasts.
Shoe Carnival (SCVL) – The shoe retailer reported a quarterly profit of $1.54 per share, more than double the 75 cent consensus estimate, with revenue also exceeding Wall Street forecasts and comparable sales rising 11.4%. Shoe Carnival gained 1.2% in the premarket.
Cassava Biosciences (SAVA) – The biotechnology company said claims posted online late yesterday challenging its scientific integrity are false and misleading. The issue revolved around study data for an Alzheimer’s disease treatment. Cassava released a statement refuting each of 15 claims that the company calls “fiction.” Cassava tumbled 23.1% in the premarket.
Urban Outfitters (URBN) – Urban Outfitters earned $1.28 per share for its latest quarter, beating the 77 cents consensus estimate. The apparel retailer’s revenue was also above forecasts. Urban Outfitters benefited from a sizeable increase in digital sales compared with pre-pandemic levels. However, the company also mentioned that it is dealing with supply chain issues, and its shares lost 4.7% in premarket trading.

Nordstrom (JWN) – Nordstrom tumbled 11.3% in premarket trading after its quarterly report showed revenue for its latest quarter was still below pre-pandemic levels. The department store operator did beat the 27 cents estimate for its latest quarter with earnings of 49 cents per share, and revenue above forecasts. Nordstrom raised its full-year outlook as well.
Toll Brothers (TOL) – Toll Brothers reported quarterly earnings of $1.87 per share, 32 cents above the consensus estimate, with the luxury home builder’s revenue essentially in line with Wall Street forecasts. Low overall inventories in the housing market and low mortgage rates helped boost the company’s results. Toll Brothers gained 2.1% in premarket action.
Intuit (INTU) – Intuit beat estimates by 38 cents with adjusted quarterly earnings of $1.97, while the financial software company’s revenue topped estimates. The maker of TurboTax also issued an upbeat outlook, raised its dividend and boosted its stock buyback program. The stock added 2.2% in the premarket.
Meme Stocks – So-called “meme” stocks remain on watch after late Tuesday rallies. GameStop (GME), AMC Entertainment (AMC), Koss (KOSS), Robinhood (HOOD) and ContextLogic (WISH) all surged despite a lack of news on any of those companies. Koss rose 4.2% in the premarket, AMC jumped 4.4% and Robinhood fell 1%.
Campbell Soup (CPB) – Campbell Soup was downgraded to “neutral” from “overweight” at Piper Sandler, which cited increasing commodity costs among other factors. Campbell shares slid 1.2% in premarket trading.

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Seven months since U.S. President Joe Biden took office, his administration has yet to establish a policy on trade with China.
U.S. Trade Representative Katherine Tai said Tuesday the “Biden-Harris Administration and USTR are conducting a comprehensive review of U.S.-China trade policy,” according to a readout of a meeting with two business associations.
China’s Ministry of Commerce said last week that the two countries remained in “normal communication” regarding trade, according to a CNBC translation.

Flags of U.S. and China are displayed at American International Chamber of Commerce (AICC)’s booth during China International Fair for Trade in Services in Beijing, China, May 28, 2019.
Jason Lee | Reuters

BEIJING — Seven months since U.S. President Joe Biden took office, his administration has yet to establish a trade policy with China.
U.S. Trade Representative Katherine Tai said Tuesday the “Biden-Harris Administration and USTR are conducting a comprehensive review of U.S.-China trade policy,” according to a readout of a virtual meeting with two business associations, the U.S. Chamber China Center Advisory Board and the U.S.-China Business Council.

She acknowledged the significance of the U.S.-China trade relationship, and said the U.S. remains committed to “addressing China’s unfair trade policies and non-market practices that undermine American businesses and workers,” the readout said.
Michael Hirson, practice head for China and Northeast Asia at consulting firm Eurasia Group, has pointed out that Biden was able to persuade major G-7 countries to make strong statements against China.
However, Biden has “not yet articulated a trade strategy or another approach that would really be effective in countering China’s economic strength,” Hirson said.

Trade tensions between the world’s two largest economies escalated under former President Donald Trump. A dispute that began with tariffs on billions of dollars’ worth of goods from both sides has since spilled over into technology and finance.
American companies and other foreign businesses have had longstanding complaints about unequal access to the Chinese market, lack of intellectual property protection and forced technology transfer.

Read more about China from CNBC Pro

China’s Ministry of Commerce said last week the two countries remained in “normal communication” regarding trade, according to a CNBC translation.
Trade between the U.S. and China has grown despite the political tensions.
China’s exports to the U.S. for the first seven months of the year rose 36.9% compared to the same period in 2020, while imports climbed 50.4% year-on-year in the January to July period, according to customs data accessed through Wind Information.
China’s trade surplus with the U.S. rose further in July to $35.42 billion, despite Trump’s efforts to reduce that surplus.

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IN THE CLASSIC 1980s arcade game, Pac-Man is pursued by killer ghosts as he attempts to achieve his goal of gobbling up little dots. These colourful ghosts have various tactics to scupper Pac-Man: “Blinky” (the red one) gives chase; “Pinky” and “Inky” (the pink and the blue spooks) obstruct his path and attempt to corner him.Bill Ackman, a hedge-fund tycoon turned sponsor of a “special-purpose acquisition company” (SPAC) has become a financial Pac-Man of sorts. The goal of a SPAC is to gobble up a private company and take it public. It raises capital from investors that is held in a listed vehicle while it seeks a merger target. In July last year Mr Ackman raised $4bn for Pershing Square Tontine Holdings, making it by far the biggest SPAC created. But he has been pursued by a bevy of ghosts.First came Pinky and Inky, the obstructors. For most Wall Street endeavours the more capital the better, but for SPACs too much cash can complicate matters. They typically take a minority stake in a private company, so a heavyweight fund must limit itself to the tiny pool of such firms worth more than $20bn-40bn. After months of searching Mr Ackman tried to strike a deal in June to buy shares in Universal Media Group, a subsidiary being carved out of Vivendi, a listed entertainment conglomerate based in Paris. This was an unusual use of SPAC capital: it used only some of the vehicle’s funds, and planned to buy shares in a firm that, at the point of the transaction, would already be public. The Securities and Exchange Commission (SEC), America’s markets regulator, objected to the deal, leading Mr Ackman to write to investors on July 19th that he would no longer pursue it. Next came Blinky, the hunter. On August 17th George Assad, a shareholder in the SPAC, sued it, alleging that it was actually an investment fund, which must be registered with the sec and abide by all kinds of rules. The claim is that the only activities the SPAC had ever undertaken were investing in securities and equities, namely Treasuries and the attempt to buy listed shares—the terrain of investment funds. Mr Ackman’s SPAC is a particularly good target for this complaint, even though its bid to buy public shares eventually failed. But the argument could apply to SPACs in general: all hold their assets in Treasuries from their inception until they consummate a merger. If successful the suit would probably require all SPACs to be registered as investment funds. Given the resulting onerous disclosure requirements and fee caps, this could kill SPACs altogether. Whether the lawsuit will succeed is unclear. The sec has treated SPACs as distinct from investment funds for decades. Writing to investors on August 19th, Mr Ackman argued that the lawsuit was “meritless”. But it might have spelled game over for his SPAC regardless. SPACs have just two years to find a merger target and, he wrote, “the mere existence of the litigation may deter potential merger partners”. He announced that he plans to dissolve his SPAC and return the capital raised. Yet Mr Ackman is not defeated. In June he filed a registration for a new gambit: a “SPARC”, or special-purpose acquisition rights company. This is like a SPAC, but without the pot of capital. Rather than issuing shares at $10 or $20 a pop to raise a pot of money that is invested in Treasuries while the sponsor hunts for a target, he plans to distribute the right to buy shares at $20 once a deal is announced. He plans to liquidate his SPAC, return the capital to shareholders and distribute free SPARCs to them instead.The new structure still requires regulators’ consent. But in many ways it could be more efficient. It eliminates the opportunity cost of locking up investors’ funds for two years. Shareholders can still approve or reject a deal: whereas with SPACs they can opt out, by claiming their money back or voting against the merger, with SPARCs they opt in. Playing SPACman may not have been fun any more, but Mr Ackman has moved on to a new game.For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Accounts holding roughly $50 million or more worth of bitcoin have steadily increased their buying since the end of June, according to new data from blockchain firm Chainalysis.
Bitcoin “whale” activity has been tightly correlated to price action this year, with larger investors often acting as a “driving force” in the market, says Philip Gradwell, chief economist at Chainalysis.
Bitcoin hit a three-month high this week, continuing its steady climb since mid-July.

Bitcoin’s biggest investors appear to be upping their positions as the price recovers.
Cryptocurrency accounts holding roughly $50 million or more worth of bitcoin have steadily increased their buying since the end of June, according to new data from blockchain firm Chainalysis. That bullishness continued into late August as prices rebounded above $50,000.

“The bitcoin accumulated by recent large investors is related to the medium-term change in bitcoin price,” Philip Gradwell, chief economist at Chainalysis, told CNBC.
Bitcoin “whale” activity has been linked to price action this year. Those larger investors were a “driving force” in the market until late February, Gradwell said. As big investors acquire more digital assets, prices typically rise over 28 days. When they sell, prices fall, Chainalysis found.

Arrows pointing outwards

Whale activity has fluctuated with the digital asset’s volatility. While they were strong buyers to start the year, whales began selling off as prices briefly dropped in March and sold at the peak around April, according to the data.
From late June through Aug. 22, those large investors acquired the equivalent of nearly $10 billion at Tuesday’s prices. Whale holdings are now back at February levels, according to the data firm.
Those larger investors also tend to be long-term holders. Whales measured by Chainalysis tend to retain at least 75% of the bitcoin they buy, on average.

Bitcoin hit a three-month high this week, continuing a steady climb since mid-July. The value of the entire cryptocurrency market also crossed $2.2 trillion, after once again passing the $2 trillion mark earlier this month, according to data from Coinmarketcap.
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U.S. stock index futures were little changed during overnight trading Tuesday, after the S&P 500 and Nasdaq Composite closed at record highs during regular trading.
Futures contracts tied to the Dow Jones Industrial Average gained 18 points. S&P 500 futures and Nasdaq 100 futures were modestly higher.

The S&P 500 advanced 0.15% on Tuesday for its fourth-straight positive session, hitting both a record intraday and closing high. It’s the benchmark index’s 62nd record intraday high this year. The Nasdaq Composite rose 0.52%, also hitting intraday and closing records.
The Dow Jones Industrial Average gained 0.09%, although the 30-stock benchmark failed to hit a new milestone, with Home Depot acting as the biggest drag.
The S&P may have hit a record, but Wells Fargo Securities head of equity strategy Christopher Harvey sees more gains on the horizon. He lifted his year-end target to 4,825 on Tuesday, which is 7.5% above where the index finished the day. Harvey’s call is based on the S&P’s strength through August carrying over into the final months of the year.
“Over the last 31 years, there have been nine instances where the S&P 500 had a price return of 10%+ in the first eight months of the year; over the next four months, the index averaged another +8.4%. None of these instances produced a negative return during those last four months,” he wrote in a note to clients.
The much anticipated Jackson Hole symposium kicks off on Thursday, where central bankers will potentially provide updates on their plan around tapering monetary stimulus. The Federal Reserve has been purchasing at least $120 billion of bonds per month to curb longer-term interest rates and jumpstart economic growth as the pandemic wreaked havoc on the economy.

Chairman Jerome Powell is slated to make remarks on Friday.
“Taper talk is the worry, but if inflation continues to run hot and economic data continues to be mixed the timing of tapering could get pushed,” noted Lindsey Bell, chief investment strategist at Ally Invest. “It’s unlikely that the Fed will force a taper on an economy that isn’t ready, and the outlook is becoming less certain with the rise of the Delta variant.”
Bell added that the deciding factor could be August’s jobs report, given that Covid cases have jumped in the past month as the delta variant spreads.
Several tech companies will report earnings on Wednesday after the market closes, including Dow component Salesforce. Box and Snowflake are also on deck.

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Goldman said the new policy starts Sept. 7 and applies to everybody, including employees and clients, according to a memo sent Tuesday to U.S. workers.
Those who aren’t fully vaccinated by then will have to work from home, according to a person with direct knowledge of the memo.

American flags in front of Goldman Sachs Group Inc. headquarters in New York, on Friday, March 5, 2021.
Michael Nagle | Bloomberg | Getty Images

Goldman Sachs said Tuesday that only vaccinated people can enter its buildings starting next month.
The leading global investment bank said the new policy starts Sept. 7 and applies to everybody, including employees and clients, according to a memo sent to U.S. workers.  Those who aren’t fully vaccinated by then will have to work from home, according to a person with direct knowledge of the memo.

Goldman Sachs is the latest bank to require employees be vaccinated to return to offices, following similar edicts from Morgan Stanley and Citigroup. The move comes a day after the U.S. Food and Drug Administration gave full approval to the Pfizer-BioNTech vaccine, clearing the way for more corporations to mandate their employees be vaccinated.
The bank is also implementing a mandatory weekly testing program for vaccinated workers on Sept. 7, according to the person, who declined to be identified when speaking about personnel matters. The memo was reported earlier by The New York Times.
Goldman will also require mask-wearing in all common areas including lobbies, hallways, gyms and cafeterias, except when seated and eating or drinking. In cities including San Francisco and Washington, masks will be required at all times, except when eating or drinking, because of local health guidance.

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Shoppers leave a Nordstrom store on May 26, 2021 in Chicago, Illinois.
Scott Olson | Getty Images

Check out the companies making headlines in after hours trading.
Nordstrom — Shares of the retailer slid more than 3% in extended trading despite Nordstrom beating top- and bottom-line estimates during the second quarter. The company earned 49 cents per share on $3.66 billion in revenue. Analysts surveyed by Refinitiv were expecting the company to earn 27 cents per share on $3.36 billion in revenue.

Toll Brothers — Toll Brothers’ shares dipped more than 2% after the company missed revenue estimates during the third quarter. The company posted sales of $2.23 billion, slightly short of the $2.24 billion analysts surveyed by Refinitiv were expecting. The company earned $1.87 per share, which was ahead of the expected $1.54.
Urban Outfitters — Shares of the retailer dipped 2% following the company’s second-quarter results. Urban Outfitters earned $1.28 per share, which was ahead of the 77 cents analysts surveyed by Refinitiv were expecting. Revenue came in at $1.16 billion, also ahead of the expected $1.08 billion.

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Dado Ruvic | Reuters

Meme stock king GameStop rallied 27% on Tuesday as some retail investors came back in full force despite an otherwise quiet market.
The video game retailer surged as much as 36.5% to $225 apiece in heavy trading volume. More than 14 million shares changed hands, seven times more than its 30-day average, according to FactSet.

Other meme stocks also popped.
Shares of AMC Entertainment jumped 20.3%. The movie theater chain was the most active stock on Fidelity’s trading platform as of 2:30 p.m. ET, according to the broker’s website.
Clover Health climbed nearly 10%. Bed Bath & Beyond rose more than 4%. Robinhood, which has also earned a meme stock status, advanced 9% Tuesday on no apparent news.

Meme stocks rally

Outside of the group favored by retail investors, the stock market seemed to be dull, with most investors eagerly awaiting a key Federal Reserve summit Thursday and Friday. The S&P 500 closed Tuesday’s session 0.2% higher.
Overall volume was light Tuesday with the SPDR S&P 500 ETF trading 30 million shares, about half of its 30-day average, according to FactSet.

The Fed’s Jackson Hole symposium is expected to be market-moving, as central bankers could detail their plans for tapering monetary stimulus. The Fed has started discussions to pull back its minimum $120 billion a month bond-buying program by the end of this year.
The short interest in these meme stocks remained elevated. About 28% of AMC’s float shares are sold short, compared with an average of 5% short interest in a typical U.S. stock, according to S3 Partners. For GameStop, the short interest has declined drastically, to about 10% from more than 100% in January at the height of the meme stock mania.

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