Finance

In this articleHOODAn Institutional Investor Hall of Famer sees an urgent need for investors in some of the most popular trades to diversify.Rich Bernstein, who has spent decades on Wall Street, is waving the red flag on long-duration assets ranging from Big Tech to bitcoin to Reddit rebellion stocks to long-term bonds.”We are right in maybe the biggest bubble of my career,” Bernstein, the CEO and CIO of Richard Bernstein Advisors, told CNBC’s “Trading Nation” on Monday.His warning implies the magnitude is bigger than the dot-com and housing bubbles.’Kryptonite for this bubble'”The Fed has so distorted the long-end of the curve that we are seeing a very natural reaction among long-duration assets which is then taking on a life of its own,” said Bernstein. “Anybody who’s out there in these long-duration assets has to be firmly convinced that long-term interest rates are not going to go up because that’s the kryptonite for this bubble.”Bernstein believes the backdrop is more perilous than June, when he warned on “Trading Nation” that bitcoin was a bubble. The cryptocurrency has rallied since then, but it’s still off about 20% over the past three months.”When you get into a bubble, people become very myopic. They look only at a very small universe of investments,” he said. “People always say to me ‘Okay. Well, you’re so smart. When is the bubble going to burst?’ And, the answer is nobody knows.”Stock picks and investing trends from CNBC Pro:Fundstrat’s Tom Lee expects an ‘everything rally’ when delta wave peaksGold experiences ‘flash crash’ overnight. Traders debate what may happen nextFund manager highlights 3 ‘left behind’ stocks he’s loving right now20 strategists predict when stocks will have the next big tumble — and how far they’ll fallBernstein, who is also known for running strategy at Merrill Lynch, recommends diversifying to groups that have pricing power in an inflationary environment.”That would lead you most towards commodities, towards materials, energy, things like that,” he said. “I find it very interesting that energy over the last six or 12 months has been in a major bull market and everybody says it’s unsustainable. Bitcoin has been in a major bear market, and everybody is waiting for it to come back.”Despite his epic bubble warning, Bernstein is not predicting an overall market meltdown. He views the market as a seesaw.”We’re balancing between these long-duration assets that are very overvalued and a bubble versus the rest of the world,” Bernstein said. “Unless liquidity dries up very rapidly, which seems unlikely, the probability of a major bear market is probably much lower than people might think.”As of Monday’s close, the S&P 500, Dow and Nasdaq were fractions of one percent off their all-time highs.Disclaimer More

A man walks past the AMC Georgetown 14 Theatres in Washington, DC on June 3, 2021.Mandel Ngan | AFP | Getty ImagesAMC Entertainment said Monday it will start accepting bitcoin as payment for movie tickets and concessions if purchased online at all of its U.S. theaters. CEO Adam Aron said during an earnings call Monday that the movie theater chain will have the IT systems in place to take the cryptocurrency as payment by the end of 2021.The move marks a marriage of two highly speculative assets — bitcoin, known for its wild volatility, and AMC, which became a meme stock star favored by retail traders on Reddit’s infamous WallStreetBets forum.The price of bitcoin swung drastically in recent weeks, last trading around $46,000 after falling below $30,000 last month. The recent rebound came amid optimism that a cryptocurrency compromise will be included as part of the bipartisan infrastructure package. The Senate ultimately failed to advance the deal.Tesla had announced plans to allow bitcoin transactions, but it halted car purchases with the digital token in mid-May due to concerns over how mining contributes to climate change. CEO Elon Musk has since commented positively on bitcoin, saying he plans to hold the coin long term.Shares of AMC climbed more than 4% in extended trading on Monday following a better-than-feared earnings report. The company posted a narrower-than-expected loss during the second quarter, along with revenue that topped analysts’ estimates.The stock has rallied nearly 1,500% this year as a band of retail traders who coordinated trades on social media platforms managed to create a massive short squeeze in the shares. The struggling movie theater was a popular short target among hedge funds and other players.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial nowTVWATCH LIVEWATCH IN THE APPUP NEXT | More

The RealReal exteriorSoruce: CNBCCheck out the companies making headlines after the bell on Monday.Kansas City Southern — The railway holding company is up 6.2% amid reports that Canadian Pacific Railway is planning to make an increased offer on it of $300 per share in a cash-and-stock deal. People familiar with the situation confirmed the offer to CNBC Monday.AMC Entertainment — AMC’s stock jumped 6.7% after releasing its earnings report Monday afternoon. It reported a loss of 71 cents per share, which was less than the 91 cents per share loss analysts expected. The movie theater chain reported revenue of $444.7 million, higher than the $382.1 million analysts had expected. “AMC’s journey through this pandemic is not finished, and we are not yet out of the woods,” CEO Adam Aron said in a statement Monday.The RealReal — Shares of the luxury consignment brand are down 5.7% after reporting a quarterly loss, though it was still less than analysts’ estimates by 97 cents. The company had strong gross merchandise value of $350 million, up 91% year over year and said as they restart at-home appointments, units per appointment exceed pre-pandemic levels. Still, the company missed revenue forecasts.Planet Fitness — The discount fitness stock fell 4.3% after it released quarterly earnings. Planet Fitness missed on earnings per share by 2 cents but beat on revenue, according to Refinitiv. It also announced it will expand its footprint to Mexico and plans to open 80 new shops in the next five years.Chegg – Education tech company Chegg’ stock is 3% higher in extended trading following a strong quarterly earnings report that beat on both earnings per share and revenue. The company reported earnings of 43 cents per share, beating estimates by 6 cents.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial todayTVWATCH LIVEWATCH IN THE APPUP NEXT | More

In this articleVSCOTSLAOXYDVNFANGHOODThe Tesla logo seen on a Supercharger rapid battery charging station for the electric vehicles company Tesla Motors.SOPA Images | LightRocket | Getty ImagesCheck out the companies making headlines in midday trading.Diamondback Energy — Shares of the exploration and production company slid 3.5% amid a dip in oil prices. At one point on Monday West Texas Intermediate crude futures, the U.S. oil benchmark, dipped more than 4%. Occidental fell nearly 3%. NOV and Pioneer Natural Resources both declined about 2%. Schlumberger and Devon Energy each dropped more than 1%.Tesla — The electric vehicle stock rose 2.1% after Jefferies upgraded the company to buy from hold. The Wall Street firm said that Tesla was “leading the way on earnings momentum and capital allocation.” Jefferies hiked its price target to $850 per share from $700.Coinbase – Shares of the cryptocurrency exchange’s stock jumped 8.6% ahead of its quarterly earnings report, which it will release Tuesday. Because Coinbase generates most of its revenue from trading, the stock price is closely tied to the price of bitcoin, which reached $46,000 Monday for the first time since May and broke its 200-day moving average.Robinhood — Shares of the newly public online brokerage popped 3.3% Monday. Robinhood’s stock has been volatile since its IPO, and it has been getting major attention from the retail investor crowd.Tyson Foods — Tyson Foods shares added 8.7% after the beef and poultry producer reported a better-than-expected quarterly earnings report. The company posted quarterly earnings of $2.70 per share, well above the consensus estimate of $1.62 per share, according to Refinitiv.Sanderson Farms — Shares of Sanderson Farms jumped 7.4% after the poultry producer announced it would be acquired by privately-held food producer Cargill and agriculture investment firm Continental Grain for $203 per share. The all-cash deal represents an 11.3% premium over the stock’s Friday closing price.Victoria’s Secret — Shares of Victoria’s Secret surged about 20% after JPMorgan Chase initiated coverage of the lingerie retailer with an overweight rating. The firm said the stock’s current price makes a “compelling entry point” and noted the company is the top market share player in the lingerie category.Darden Restaurants — Shares of the restaurant company dropped 4.5% after Evercore ISI downgraded the stock to in line from outperform. The firm said in a note to clients that inflation, including rising wages, will hurt the stock as the economic recovery progresses.— CNBC’s Tanaya Macheel, Maggie Fitzgerald, Jesse Pound and Yun Li contributed reportingBecome a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial todayTVWATCH LIVEWATCH IN THE APPUP NEXT | More

Take a look at some of the biggest movers in the premarket:Sanderson Farms (SAFM) – The poultry producer agreed to be acquired for about $4.5 billion, or $203 per share, by privately-held food producer Cargill and agriculture investment firm Continental Grain. The all-cash deal represents an 11.3% premium over Friday’s closing price for Sanderson Farms. Sanderson shares surged 8.3% in the premarket.Tesla (TSLA) – Tesla gained 1.6% in the premarket after Jefferies upgraded the stock to “buy” from “hold,” based on what the firm feels is more efficient capital deployment and an improved ability by auto manufacturers to increase profit margins over time.U.S. Foods (USFD) – The foodservice distributor’s shares rallied 6.5% in the premarket after beating Street forecasts with its second-quarter profit and revenue. U.S. Foods earned 58 cents per share, 22 cents a share above estimates, helped by strong demand for its products and services as the industry recovers from the pandemic.Tyson Foods (TSN) – The beef and poultry producer reported quarterly earnings of $2.70 per share, well above the consensus estimate of $1.62 a share. Revenue also came in above analysts’ projections. Results got a boost from strong consumer demand as well as restaurant reopenings. Tyson shares rose 2.6% in premarket trading.ovidNorwegian Cruise Line (NCLH) – A federal judge ruled that the cruise line can ask passengers for proof of Covid-19 vaccination, temporarily blocking a Florida law banning that practice.Berkshire Hathaway (BRK.B) – Berkshire shares rose 1.2% in premarket trading after it reported a 7% increase in second-quarter earnings. Berkshire’s results were helped by a rebound across its businesses including its railroad and energy companies.Veoneer (VNE) – The auto parts maker said it would begin talks with Qualcomm (QCOM) about the chip maker’s takeover bid, which topped a bid from automotive software maker Magna International (MGA) that had been previously approved by Veoneer’s board. Qualcomm’s bid is worth $4.6 billion, compared to the approximately $3.8 billion value of Magna’s deal. Veoneer slid 3.3% in premarket trading.Exact Sciences (EXAS) – The molecular diagnostics company has approached genetic testing firm Invitae (NVTA) about a possible merger, according to people familiar with the matter who spoke to Bloomberg. The people said the two sides are not in active talks and that a seal would likely be a low-premium, all-stock transaction. Invitae surged 7.2% in the premarket while Exact Sciences fell 2%.Dollar Tree (DLTR) – The discount retailer was downgraded to “hold” from “buy” at Deutsche Bank, which expressed concerns about the impact of increased freight and labor costs on profit margins. Dollar Tree lost 1.5% in premarket action.Exxon Mobil (XOM), Chevron (CVX) – These and other energy companies are under pressure as oil prices slide following new China virus measures as well as a U.N. report on the impact of climate change. Exxon fell 1.3% in premarket trading, while Chevron was down 1.6%.Victoria’s Secret (VSCO) – JPMorgan Chase initiated coverage on the women’s apparel retailer with an “overweight” rating, noting its dominant market position in lingerie and nightwear and expansion opportunities in swimwear. Victoria’s Secret added 1.6% in the premarket.NetEase (NTES) – The China-based online services company surged 2.3% in premarket trading, following a Reuters report that it has delayed a planned $1 billion Hong Kong initial public offering of its Cloud Village music streaming service. People with direct knowledge of the matter said the delay was due to volatile trading in China’s major tech companies.TVWATCH LIVEWATCH IN THE APPUP NEXT | More

Signage outside Lordstown Motors Corp. headquarters in Lordstown, Ohio, on Saturday, May 15, 2021.Dustin Franz | Bloomberg | Getty Images(Click here to subscribe to the new Delivering Alpha newsletter.)SPACs are getting hit by a rising number of class-action lawsuits as more hyped-up deals turn out to be flops.Shareholder lawsuits against post-merger special purpose acquisition companies rose to 15 through the first half of 2021, tripling from just five cases in all of 2020, according to data from Woodruff Sawyer. The jump in the segment came even as overall securities cases fell 13% this year, the data said.”That’s a lot of litigations for one section of the capital markets in a short period of time,” said Priya Huskins, partner at Woodruff Sawyer. “SPACs have been marketed as a way to go public faster and easier compared to a traditional IPO, but that might tend to attract companies that are perhaps not ready for public company scrutiny. It is certainly the case the plaintiffs are trying to prove.”These cases are so-called stock drop litigations when negative announcements lead to a significant decline in share prices. Plaintiffs would argue that the stock price was inflated as the company had made material misstatements or omissions in their earlier public statements.The SPACs that found themselves in legal battles this year include electric vehicle start-ups Lordstown Motors and Canoo as well as Chamath Palihapitiya-backed Clover Health, all of which are currently undergoing inquiries by the Securities and Exchange Commission. Churchill Capital Corp IV, Purecycle Technologies, XL Fleet and More

A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York, August 5, 2021.Andrew Kelly | ReutersStock futures were flat in overnight trading Sunday after the Dow Jones Industrial Average notched a record close Friday following a stronger-than-expected jobs report.Futures on the Dow added 2 points, or 0.01%. S&P 500 futures edged 0.06% lower and Nasdaq 100 futures dipped 0.13%.U.S. senators reconvened Sunday to work toward the passage of a $1 trillion infrastructure bill, a top political priority of President Joe Biden. The Senate is slated to hold another key procedural vote late Sunday and vote on final passage Tuesday. The bipartisan package is expected to have sufficient Republican support to pass in the Senate and move to the House for consideration in September.The moves in futures trading came after the Dow rose 144.26 points, or 0.4%, to close at an all-time high of 35,208.51. The S&P 500 rose 0.17% to reach its own record close of 4,436.52. The Nasdaq Composite bucked the trend, dipping 0.4% to 14,835.76. All three major indexes ended the week higher and saw their second positive week in three.The Labor Department jobs report Friday showed the U.S. economy added 943,000 jobs in July. Economists expected 845,000 new jobs last month, according to Dow Jones estimates. The unemployment rate dropped to 5.4%, below the expectation of 5.7%.”You saw a lot more jobs being created in those areas that are reopening — restaurants, hotels, logistics, transportation,” Raymond James Chief Investment Officer Larry Adam said. “That’s a good sign. I think that puts more spending power behind the consumer going forward and I think that that’s ultimately a good thing for the economy.”The signs of a strong economic recovery could prompt the Federal Reserve to pull back its monetary support measures and prepare to begin tapering its bond-buying program.”If it does continue to this magnitude, that probably does bring the Fed a little sooner into the game when it comes to tapering,” Adam said.The yield on the benchmark 10-year Treasury note jumped as high as 1.3% after the better-than-expected jobs report. The 10-year yield this summer has pulled back significantly from its highs in March, when it neared 1.8%.The financial sector led gains Friday as rates edged up, increasing banks’ profitability prospects. Industrials, retailers and energy stocks also moved higher as the strong jobs report eased concerns about the economic recovery.Meanwhile, technology stocks retreated after the jump in rates. Rising rates discount the value of future earnings and therefore can hit growth stocks like technology names particularly hard.Investors are awaiting key inflation data scheduled for release this week. The consumer price index and the producer price index are scheduled to come out Wednesday and Thursday, respectively.Several Fed officials are scheduled for speaking appearances in the week ahead, with investors listening with a close ear for insights into the central bank’s tapering decision making. Atlanta Fed President Raphael Bostic, Richmond Fed President Thomas Barkin, Chicago Fed President Charles Evans and Kansas City Fed President Esther George are all set to speak this week.Companies including Tyson Foods, AMC Entertainment, Coinbase, Lordstown Motors, Bumble, Palantir, Disney, Airbnb and DoorDash are set to report quarterly earnings this week.TVWATCH LIVEWATCH IN THE APPUP NEXT | More

The latest jobs report may not be a game changer for the Federal Reserve’s easy money policies.According to Wells Fargo Securities’ Michael Schumacher, it’s premature to assume July’s strong numbers will push the Fed meaningfully closer to tapering its monthly bond purchases.”This report was pretty strong. Not a blockbuster,” the firm’s head of macro strategy told CNBC’s “Trading Nation” on Friday. “If there’s another strong one after it, it’s conceivable the Fed may start talking about tapering in a pretty serious way. Let’s say in October.”Under Schumacher’s scenario, the Fed could start to implement tapering as soon as this November. The move would likely put upward pressure on the benchmark 10-year Treasury Note yield.But there’s a wildcard to Schumacher’s forecast: Covid-19 delta variant cases. The surge could put negative pressure on yields.”It’s an open question just how severely delta turns out to be and also how aggressively governments react to it,” he said.Schumacher doubts the government will issue dramatic lockdowns, but he warns new constraints on movement would hurt economic activity.However, his overall worry affecting the bond market is sticker than expected inflation. Schumacher is concerned it would spark a significant jump in yields.”The thing is no one has really dealt with a pandemic. We haven’t had one in a hundred years,” he said. “So for anyone to say with a lot of confidence that inflation is going to go up and come down pretty dramatically and be back to ‘normal in four months or six months’ or something like that seems a bit foolish to us.”On Friday, the 10-year yield closed at 1.30%. It rose 5% last week and is up 42% so far this year. Ultimately, Schumacher believes it will rise and end the year between 1.60% and 1.90%, below the forecast he delivered on “Trading Nation” in June.”As far as the bond market goes, I’d say you want to stay out of trouble,” Schumacher said. “The way to really avoid difficulty there is to stay pretty short maturity. So perhaps three years and in, something like that. No one is going to make a ton of money doing that, but at least they’ll be relatively safe.”Disclaimer More