Finance

The Wall Street forecaster who warned investors to brace for once in a generation inflation has a new concern: Delta variant cases sparking new economic restrictions.According to Jim Bianco, the emerging risk will hinder the ability to pick market winners and losers into fall.”This is the toughest one [risk] for investors to get their head around,” the Bianco Research president told CNBC’s “Trading Nation” on Wednesday.In Bianco’s bearish scenario, rising Covid-19 cases would hurt economic activity and earnings.”You could see a big rotation away from the reopening stocks,” said Bianco, who sees gaming, hotel, airline and cruise line stocks among the most vulnerable groups.On the other hand, he believes the risk could boost technology and stay-at-home trades. If the delta variant continues to spread, Bianco sees a high probability of more stimulus money.”You can take a playbook out of last year and say ‘If we get rising variant and we get restrictions, more stimulus money is coming.’ And, what have we learned about stimulus money? It goes right into the brokerage account. It goes right into the stock market,” said Bianco. “The flows in ETFs’ record was late March when we got the $1200 checks.”Despite the challenging backdrop, Bianco expects the broader market to hold up until the end of the year. “For the next several months, we can argue inflation is transitory or not. We’re not going to get a resolution on that. [The] stock market will be okay,” he said. He expects all that to change by year-end. Bianco has been bracing for a troublesome inflation comeback since last year. He told CNBC’s “Trading Nation” in October an inflation surge may force the Fed to abandon its easy money policy much sooner than intended.And, he’s reminding investors the stock market is not cheap.”It’s near record high valuations,” Bianco said. “It needs to continue to give this blowout earnings like we saw with some of the tech companies in the last day or two.”As of Wednesday’s close, the S&P 500, tech-heavy Nasdaq and Dow are less than 1% from all-time highs.Disclaimer More

Traders work on the floor of the New York Stock Exchange.NYSEU.S. stock futures opened mixed on Wednesday after the Federal Reserve concluded its two-day meeting of the Federal Open Market Committee by making no move on asset purchases.Dow Jones Industrial Average futures rose 40 points, or 0.11%. S&P 500 futures and Nasdaq 100 futures dipped 0.2% and 0.19%, respectively.The moves in futures came after Fed Chairman Jerome Powell cautioned in a press conference that although the economy is making progress toward its goals, it has a ways to go before the central bank would actually adjust its easy policies. Treasury yields inched climbed higher in anticipation of the announcement but pulled back slightly following Powell’s comments.”We have some ground to cover on the labor market side,” Powell said. “I think we’re some way away from having had substantial further progress toward the maximum employment goal. I would want to see some strong job numbers.”In regular trading, the Dow Jones Industrial Average dipped 127.59 points, or nearly 0.4%, to 34,930.93. The S&P 500 ended the session little changed at 4,400.64. The Nasdaq Composite climbed 0.7% to 14,762.58.PayPal and Facebook fell 6% and 4%, respectively, after warning of significant growth slowdown as they reported quarterly earnings.Shares of Ford rose more than 2% after it raised its 2021 outlook, saying it’s selling more cars that are more expensive, though it missed analysts’ estimates on earnings.”The market is understanding we are having a blowout quarter here compared to a year ago,” said Michael Reynolds, vice president of investment strategy at Glenmede. “What’s much more important this season is the guidance we’re getting on quarters ahead, as the economy settles out into what might be the new normal.”The major averages are on track to end the month higher, with the S&P up 2.4% for July. The Nasdaq Composite and Dow are up 1.8% and 1.2%, respectively.Amazon, Pinterest and Anheuser-Busch are set to report earnings Thursday. Traders will also watch out for the latest readings on initial jobless claims and pending home sales. More

The PayPal app shown on an iPhoneKatja Knupper | DeFodi Images | Getty ImagesCheck out the companies making headlines in after the bell.Facebook — Shares of the social media giant fell more than 3% after warning of significant growth slowdown as it reported quarterly earnings. Facebook surpassed analysts’ estimates for earnings and revenue, and reported its fastest revenue growth, 56%, since 2016.PayPal — PayPal’s stock tumbled over 7% after hours following a miss on its second-quarter earnings and lower than expected guidance for the third quarter. The payments company reported earnings of $1.15 per share for the second quarter, beating analysts’ estimates by 3 cents per share. Ford — The automaker’s stock rose more than 2% after it raised its 2021 outlook, saying it’s selling more cars that are more expensive. Ford reported second-quarter earnings Wednesday afternoon of 13 cents per share, which slightly missed analysts’ estimates due to the ongoing global shortage of semiconductor chips.Qualcomm — Qualcomm shares rose 3% in extended trading after it reported quarterly earnings that beat analyst estimates and gave positive guidance for the fourth quarter. The company reported earnings of $1.92 per share and revenue of $8 billion.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 today More

In this articleATVIA logo outside the Google Store Chelsea in New York, May 28, 2021.Victor J. Blue | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading.Alphabet — Shares of the Google parent popped 3.2% on the back of the company’s stellar quarterly earnings. Alphabet registered a 69% jump in advertising revenue in the second quarter, while it posted an EPS of $27.26, crushing expectations of $19.34 per share, according to Refinitiv. YouTube revenue came in over $7 billion, up 83% from last year.Starbucks — The stock fell 2.9% despite the company reporting fiscal third-quarter sales and profit topping Wall Street’s estimates. The coffee chain posted earnings of $1.01 per share and $7.5 billion in revenue, as same-store sales rebounded both in the U.S. and overseas. Starbucks also raised its fiscal 2021 earnings-per-share forecast.Microsoft — Shares edged down about 0.1% despite beating on both top and bottom lines in its quarterly earnings report. The tech company posted earnings of $2.17 per share, while analysts were looking for earnings of $1.92 per share, according to Refinitiv. The company’s quarterly revenue of $46.15 billion also beat Wall Street estimates. However, Microsoft’s revenue from device makers for Windows licenses in the quarter fell 3%.McDonald’s — Shares of the restaurant chain slipped 1.9% despite the company reporting better-than-expected results in its second-quarter report. McDonald’s earned an adjusted $2.37 in earnings per share on $5.89 billion in revenue, compared with respective projections of $2.11 and $5.6 billion, according to Refinitiv. The stock had gained for six straight days ahead of the report.Boeing — The aircraft maker popped 4.2% after it reported a surprise quarterly profit of 40 cents per share, with analysts having anticipated a loss of 83 cents per share. Revenue also exceeded estimates, helped by higher jet deliveries as aircraft demand rebounds from a pandemic slump.Pfizer — Shares of the drug maker are up by 3.2% after the company reported earnings of $1.07 per share and revenue of $18.9 billion, beating analysts’ estimates for the second quarter. It also raised its full-year forecast, saying it anticipates strong sales of its Covid-19 vaccine to continue.Spotify — The stock sank 5.7% after Spotify reported a loss of 19 cents per share for the second quarter, which is 18 cents higher than the loss projected by Wall Street analysts. The music streaming service also reported that its monthly active user numbers fell below its prior guidance.Generac – Shares of the backup generator company slid 1.8% following the company’s second-quarter results. Generac beat top- and bottom-line estimates for the period and posted record sales of $920 million, but the company said it’s experienced higher input costs due to rising commodities and logistics prices.Mondelez International — The global snack maker saw its shares dip 2.8% after it released its latest quarterly results. Mondelez posted per-share earnings of 66 cents, beating a Refinitiv forecast of 65 cents per share. Mondelez, which owns brands including Oreo and Ritz, saw revenue of $6.6 billion during the three months ended June 30.Advanced Micro Devices — AMD’s stock climbed 7.6% higher after the company reported earnings of 63 cents per share, 9 cents higher than what analysts polled by Refinitiv expected. AMD also posted revenue of $3.85 billion, beating a forecast of $3.62 billion. The chip maker issued strong third-quarter revenue guidance and raised its full-year revenue guidance.Teladoc Health — The telehealth company fell 0.5% after Teladoc reported a wider-than-expected loss for the second quarter. Membership also grew just 1% year over year. Deutsche Bank downgraded the stock to hold from buy following the report.Activision Blizzard — Activision Blizzard shares added about 0.9% as the video game company’s employees are set to stage a walkout to demand better working conditions, particularly for women and other marginalized people. The state of California sued the company, alleging rampant sexual harassment and discrimination.— CNBC’s Tanaya Macheel, Pippa Stevens, 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 today More

Sen. Elizabeth Warren told CNBC on Wednesday she’s skeptical that bitcoin will prove to be a reliable hedge against inflation over the long run, a key reason some investors choose to own it.”People can make their own investment decisions, but to do that somehow assumes two things. One is that what’s happening with bitcoin or any other cryptocurrency is somehow going to be divorced from what’s happening elsewhere in the economy,” the Massachusetts Democrat, a frequent Wall Street and crypto critic, said on “Squawk Box.”The second assumption, according to Warren, is “crypto coins are not going to have their own inflationary pressures.” She countered such a notion, saying inflation “may come from a different source than what happens with dollars, but look at what’s happened in the high volatility in the price of these things.” “The idea that they’re somehow a protection or a hedge, I don’t think that’s going to be borne out over time,” she added.Many crypto bulls believe bitcoin represents a durable, long-term store of value, providing protection against what they see as too much government fiscal spending on top ultra-accommodative monetary policies by global central banks causing problematically high inflation. Their reasoning is that eventual supply of bitcoin is capped at 21 million tokens. Currently, the world’s largest cryptocurrency by market value has 18.77 million tokens in circulation.New bitcoins come into the market when so-called miners use high-powered computers to verify transactions across the blockchain, a decentralized digital ledger. That reward is systematically reduced roughly every four years in a technical event known as the “halving.” The most recent occurred in May 2020.Many critics, Warren among them, point to bitcoin’s penchant for wild price swings and believe it undercuts the premise of bitcoin as a store of value.In recent months, inflation concerns have permeated across the U.S. and other parts of the world as economies pick up steam from pandemic-related slowdowns. Against that backdrop, however, bitcoin tumbled from its all-time high near $65,000 in mid-April to below $30,000 this summer. As of Wednesday morning, bitcoin traded back near $40,000.Mike Novogratz, founder and CEO of crypto financial services firm Galaxy Digital, told CNBC earlier Wednesday that he believes theories about bitcoin’s store-of-value potential cannot be shot down yet.”Bitcoin is 13 years old, so we’re still very early in the adoption of these new technologies and these new assets. People are buying bitcoin because they have worries that our fiscal and monetary policy is out of control. So, yes, it’s a broader debasement-of-currency hedge. It’s a broader debasement-of-fiat-money hedge. That’s mostly an inflation hedge. It doesn’t mean it’s going to go tick for tick with every CPI number,” Novogratz said, referring to the consumer price index, a monthly inflation reading released by the U.S. Bureau of Labor Statistics.Warren wants to root out ‘snake oil salesmen’In the wide-ranging interview, which also touched on her wealth-tax proposal, Warren called for cryptocurrencies to face tighter regulation, suggesting it will help root out “snake oil salesmen” and may shore up the confidence of investors in the nascent asset class.She likened it to the formation of the Food and Drug Administration in the early 20th century and the agency’s crucial role in regulating medicines and treatments.”Once we really had an FDA that stood up and that said, ‘You know what, we’re going to test the drugs before they go onto the market. We’re going to assure the public that they are safe.’ Then look what happened. We got a whole lot more investment and obviously a much bigger market that helped the entire world,” said Warren, a former Harvard Law School professor and key architect of the Consumer Financial Protection Bureau.She pushed back on concerns that increased regulation would stifle innovation for still-emerging digital assets and blockchain technology.”I want people to have freedom to invest. I just don’t want a system where the big guys, where the shadowy guys, where the guys you never quite see, can get out there and do pump-and-dump [schemes],” Warren said.”I think the question is not just regulation. The question is how it’s aimed. Who takes advantage of their being no rules? It’s the big guys. Who wins when there’s no cop on the beat? It’s the big guys,” she added. “That’s the part that I care about and I care about it happening before a lot of people have been wiped out.”In the interview, Warren also made a fresh push for wealth tax, saying “Yes, Jeff Bezos, I’m looking at you.”  More

In this articleGNRCA worker inspects a 24-kilowatt Generac home generator at Captain Electric on February 18, 2021 in Orem, Utah.George Frey | Getty ImagesShares of backup power company Generac fell more than 12% on Wednesday at the lows after the company warned about ongoing supply chain constraints and inflationary pressures.The stock’s double-digit percentage drop made it the worst-performing S&P component, despite the company beating top- and bottom-line estimates during the second quarter.Generac earned $2.39 per share on an adjusted basis, which was ahead of the $2.31 analysts were expecting, according to estimates compiled by StreetAccount. The company saw record sales of $920 million, which also topped the expected $867.2 million.Around 11:30 a.m. on Wall Street the stock had recovered some of its losses, and last traded down 7%.”We’re particularly proud of achieving this tremendous top-line growth along with the record levels of adjusted earnings, despite the ongoing significant cost pressures, logistic challenges, and various capacity constraints we faced in the quarter across the supply chain,” the company said on its earnings call.Generac’s gross profit margin declined year over year from 38.2% to 36.9% thanks to higher input costs including around raw materials, labor and logistics.Still, Generac said demand for its generators remains “incredibly robust” amid “significantly higher power outage activity over the past several quarters” including in Texas and California. The company also said it saw “tremendous growth” for its energy storage systems as consumers turn to clean energy and the growing solar plus storage market.Even with Wednesday’s decline shares are up nearly 80% for 2021, making the stock the fifth best-performer in the S&P 500.Generac is far from the only company experiencing supply chain problems. Shares of Enphase Energy also dipped at the opening Wednesday after the company said it, too, cannot keep up with demand.”Demand for our microinverter systems remained well ahead of supply in the second quarter of 2021, as component availability continued to be constrained,” the company said Tuesday in a statement.Enphase said it expects the issues to persist during the third quarter, but is optimistic that the picture will be significantly better by the fourth quarter.The stock slid as much as 5.5% before recovering those losses and trading in the green.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 today More

Getty ImagesLONDON — Britain’s financial watchdog has proposed changing the rules for companies listed on the U.K. stock market to include a “comply or explain” requirement for not meeting diversity targets. The U.K.’s Financial Conduct Authority put forward its proposals on diversity and inclusion in a consultation paper published Wednesday. It proposed that at least 40% of company boards should consist of women, including those who self-identify as a woman. As of January 2021, women accounted for 36% of company board positions on the U.K.’s main FTSE 100, according to data from the Hampton Alexander review.  In addition, the FCA said companies should have at least one woman holding the senior board positions of chair, CEO, senior independent director or chief financial officer. The FCA also proposed that at least one member of a company’s board be from a non-White ethnic minority background. A report by Green Park Business Leaders, published in February, found that just 10 of the 297 people in the top three roles of FTSE 100 companies had ethnic minority backgrounds. The financial regulator said it wanted listed companies to publicly disclose whether they had met specific board diversity targets in their annual financial statements. If not, companies would have to explain why they had failed to meet these goals, also known as a “comply or explain” requirement.”This allows companies flexibility to provide relevant context on their approach to board diversity, whether or not these targets are met,” the FCA said in its paper. Along with these targets, the FCA said it wanted firms to publish data on the composition of their boards and the most senior members of executive management teams. Nasdaq diversity proposalThe FCA’s proposals follow a push by U.S. exchange operator Nasdaq to increase diversity among the 3,000 companies listed on its stock exchange.It filed a proposal in December asking the Securities and Exchange Commission to approve new rules on the make-up of company boards. The Nasdaq proposed requiring the majority of companies to have at least two diverse board directors: one woman and one person who identifies as either an underrepresented minority or LGBTQ. It also put forward a “comply or explain” requirement.As of March, however, the Nasdaq’s proposal had been delayed as the SEC took more time to review the plan.Speaking in March at the launch of a charter on women in finance, FCA CEO Nikhil Rathi said that the Nasdaq had taken the lead with its listing rules and said the U.K. watchdog was exploring similar requirements.He said: “I would encourage all capital markets participants to consider the reasons why there are so few female CEOs and CFOs or CEOs and CFOs of color presenting during IPOs or when capital is being raised — are there challenges in the culture of private equity, underwriting, equity syndication? What more can we do to sponsor and celebrate female business leaders and entrepreneurs?”The FCA is asking for feedback on its proposals, as part of its consultation period, which closes in October. It said it would seek to make any rules formal by late 2021. More

Dubai-based mobility company Swvl said Wednesday that it plans to go public through a reverse merger with Queen’s Gambit Growth Capital. The special purpose acquisition company is led entirely by women. Founded in 2017, Swvl provides ridesharing services in emerging markets that don’t always have reliable public transportation.Unlike ride-hailing services that focus on one-off and individual rides, Swvl focuses on mass transit. This both reduces emissions, and cuts the cost for what otherwise might be a prohibitively expensive ride. The company utilizes a proprietary algorithm to figure out the fastest routes, including for things like going to school or to work.The deal with Queen’s Gambit values Swvl’s equity at around $1.5 billion, making it the largest Middle East-based unicorn to debut on the Nasdaq. An expected closing date for the merger was not given, but once complete the company will trade under the ticker SWVL. Reverser mergers involve private companies going public by buying a controlling share of a public firm.Swvl currently operates in 10 cities across the Middle East and Africa, and it has its sights set on entry into new markets. The company’s 2020 revenue was roughly $26 million, and Swvl expects that number to rise to $79 million during 2021. All told, Swvl values the global mass transit market at $1 trillion.The company did not disclose 2020’s net income or net loss.”Mass transit systems in cities around the world are riddled with deficiencies, resulting in congestion, environmental concerns and reduced productivity,” said Swvl founder and CEO Mostafa Kandil. Since the company’s founding 1.4 million riders have booked more than 46 million rides through the platform.”Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” added Victoria Grace, founder and CEO of Queen’s Gambit. SPACs going greenGrace first announced the SPAC in December, and in January said the fund had raised $300 million, which was above the initial target. Grace subsequently launched a second blank-check company in February called Queen’s Gambit Growth Capital II. Grace said in a statement that she was looking to identify and grow a “disruptive platform that solves complex challenges and empowers underserved populations,” noting that in Swvl she found “each of those things and more.”The merger comes amid a boom in SPAC investing that began in 2020. Last year so-called blank check companies raised a then record $83.4 billion, according to SPACInsider. For 2021 thus far $115 billion has been raised, although regulatory pressures and some high-profile instances of lackluster performance have somewhat cooled the enthusiasm. SPACs have been a popular path to the public market for clean tech companies on the heels of a surge in ESG investing. Since March 2020 55 SPAC deals in the clean tech space have been announced, according to data from Raymond James.The firm noted that the mergers span industry, size and business stages, but said that electric vehicle-focused deals dominate the list. For its part, Swvl claims to have prevented roughly 245 million pounds of carbon emissions since its inception relative to single-rider options.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 today More