Finance

In this photo illustration the Robinhood Markets logo is seen on a smartphone and a pc screen. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)SOPA Images | LightRocket | Getty ImagesStock trading app Robinhood — which is expected to go public as soon as next week — warned of a potential slowdown in trading revenue and new clients as the boom in retail investing starts to decelerate.”We expect our revenue for the three months ending September 30, 2021, to be lower, as compared to the three months ended June 30, 2021, as a result of decreased levels of trading activity relative to the record highs in trading activity, particularly in cryptocurrencies, during the three months ended June 30, 2021, and expected seasonality,” Robinhood said in an amended prospectus released Monday.The slowdown is coming off booming levels. The Menlo Park, California-based free-trading pioneer estimates second-quarter 2021 revenue between $546 million and $574 million. This would be a 129% surge from the $244 million in the second quarter of 2020.However, the company estimates a net income loss between $537 million and $487 million in the second quarter of 2021, compared with a $1.4 billion loss in the first quarter.Robinhood — which offers equity, cryptocurrency and options trading, as well as cash management accounts — benefits from more speculative trading practices from its clients. Options trading accounts for about 38% of revenue while crypto is 17% of revenue. Plus, margin and stock lending trading levels have been elevated in 2021.A stagnation in options, trading on margin and crypto — with the price of bitcoin below $30,000 — could hurt Robinhood’s growth as it heads into one of the biggest public debuts of the year.Robinhood also said it anticipates the growth rate of new clients will be lower in the third quarter of 2021, compared to the second quarter, “due to the exceptionally strong interest in trading, particularly in cryptocurrencies, we experienced in the three months ended June 30, 2021 and seasonality in overall trading activities,” the S1 said.Robinhood expects its app to have 22.5 million funded accounts — those tied to a bank account — as of the second quarter, up from 18 million total as of the first quarter of 2021.Robinhood — whose longstanding mission is to “democratize” investing — experienced record levels of new, younger traders entering the stock market during the pandemic. That surge has continued into 2021, marked by frenzied trading around so-called meme stocks.The company alluded to clients who created accounts around January’s GameStop short squeeze, but perhaps have discontinued trading as the frenzy subsided.”We experienced strong growth in new customers during the first six months of 2021,” the filing said. “We do not know whether, over the long term, cohorts comprised of these new customers will have the same characteristics as our prior cohorts. To the extent these new customers do not grow their cumulative net deposits or trading frequency on our platform to the same extent as new customers that joined in prior periods, our ability to expand and grow our relationship with these customers will be impacted.”Robinhood is seeking a market valuation of as much as $35 billion in its upcoming IPO. The stock trading app will attempt to sell its share at a range of $38 to $42 per share.— with reporting from CNBC’s Kate Rooney.Robinhood is a five-time CNBC Disruptor 50 company that topped this year’s list.Sign up for our weekly, original newsletter that offers a closer look at CNBC Disruptor 50 companies like Robinhood, and the founders who continue to innovate across every sector of the economy. More

Bill Ackman, founder and CEO of Pershing Square Capital Management.Adam Jeffery | CNBC Billionaire investor Bill Ackman said Monday that the spread of the delta variant doesn’t pose a significant threat to the economic reopening, and he sees interest rates rising on the back of the big comeback.”I hope what it does is that it motivates anyone who doesn’t get the vaccine to get the vaccine. I don’t think it’s going to change behavior to a great extent,” Ackman said in a interview on CNBC’s “Squawk Box.” “You are going to see a massive, my view, economic boom …. We are going to have an extremely strong economy coming in the fall.”The delta variant is causing flare-ups across unvaccinated pockets of the country and leading to an increase in hospitalizations as cases climb. Ackman, the founder and CEO of Pershing Square Capital Management, said the variant is less deadly than other strains and the U.S. could achieve herd immunity faster as more people recover from the infections.The hedge fund manager believes bond yields will trend much higher in the second half of 2021 as the economy continues to recover from the pandemic-induced recession.”I think rates are going up. Short rates I think are going to go up a lot faster than people think,” Ackman said. “Coming to the turn of the year … I think we are going to have meaningfully higher yields as people realize the economy is going to make a big recovery.”Ackman said the slide in Treasury yields Monday provided investors with a buying opportunity. The 10-year benchmark rate fell 7 basis points to 1.22% to hit a new five-month low.”Today’s move … I would borrow as much as you can in the long term fixed rate on the basis of today’s rates,” Ackman said.The hedge fund manager has been betting big on the rebound in the restaurant, retail and hotel industries. His top holdings at the end of the first quarter included Lowe’s, Hilton, Restaurant Brands and Chipotle. He recently picked up Domino’s Pizza shares following a pullback.In mid-March at the height of the Covid-19 crisis, Ackman came on CNBC to warn investors that “hell is coming” and urge the White House to shut down the country for a month.Days after the interview, Ackman revealed his firm exited the short positions on March 23 just as the S&P 500 bottomed, pocketing more than $2 billion in bets against markets in March.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

choja | E+ | Getty ImagesGreen infrastructure investment firm Generate Capital said Monday that it has raised $2 billion in fresh funding amid a boom in clean-energy projects and interest from Wall Street in emissions-reducing investments. The new capital, which follows a $1 billion raise in February 2020, brings the San Francisco-based company’s balance sheet to around $10 billion. Backers include pension funds from Australia, Sweden and the U.K. Founded in 2014, Generate sits at the intersection of two hot investing trends — clean energy and infrastructure. The firm brings both capital and operational knowledge to the more than 2,000 assets it owns around the world, handling everything from financing to building to day-to-day management. Clients include cities, companies and schools.CEO Scott Jacbos said that what sets Generate apart is its willingness to fund projects that others might not, including small-scale deals as well as backing early-stage technologies that some might deem too risky. Additionally, Generate’s capital has no time restrictions, meaning the firm isn’t incentivized to make decisions with short-term goals in mind.Jacobs said returns are competitive, and pointed to every funding round being oversubscribed — some by as much as seven times — as evidence that sustainable investing does not have to come at the expense of performance. “We have had great success attracting institutional investors because this is a very compelling investment return profile relative to the risk undertaken,” he said.A variety of clientsPotential customers come to the firm with a variety of goals, including infrastructure resilience, a net-zero mandate, or just saving money. Jacobs noted that much of the infrastructure built over the last century has been government driven, large and centrally planned, rather than catering to the needs of local communities.”The infrastructure that customers want and communities need is very different. We call it the four Ds: distributed, decarbonized, digitized and democratized. And that is, in fact, what offers the most compelling value proposition to these customers and communities,” he said.Examples of projects include a partnership with Starbucks to develop community solar projects in New York to supply local Starbucks’ and the areas around the stores with solar power. Generate also worked with the public school system of Hillsborough County in Tampa, Florida, which wanted to reduce its energy needs, carbon footprint and energy bill. Generate’s involvement meant the district didn’t have to shell out any cash up front as the buildings were overhauled. Better HVAC and building management systems were installed, and lights were replaced with energy-efficient bulbs.The company also worked with Chinese battery company BYD, which Warren Buffett’s Berkshire Hathaway owns a stake in, to provide electric buses for customers including Stanford University and Facebook.Jacobs said the $2 billion capital raise is only the beginning in terms of the investment needed to update and overhaul infrastructure in the U.S., much of which is ageing and vulnerable to extreme weather fueled by climate change. And while all of the firm’s funding rounds have been oversubscribed, Jacobs is intentional about balancing the rate of growth with ability to execute. Interest from Wall Street also means the firm can choose to take capital from investors who align with the company’s long-term vision. “Raising capital is just raising capital and it’s not that much to celebrate. But it says though that the model is working — that customers are benefitting, that the world is seeing great advantages from these sustainability solutions that we’ve been putting in place for seven years now,” he said.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 articleTSCOPSTHTSLACheck out the companies making headlines before the bell:AutoNation (AN) – The auto retailer reported quarterly earnings of $4.83 per share, well above the $2.81 consensus estimate. Revenue was also above consensus, with same-store new car sales up 42% over a year ago and used car sales up 37%. AutoNation added 1.1% in premarket trading.Cal-Maine Foods (CALM) – The nation’s largest egg producer posted an unexpected loss of 9 cents per share for its latest quarter after analysts had predicted an 18 cents per share profit. Revenue also fell short of forecasts, amid lower egg prices and a decline in egg volume.Tractor Supply (TSCO) – The farm equipment and services company beat estimates by 23 cents with quarterly earnings of $3.19 per share, with revenue above analysts’ forecasts as well. Tractor Supply also raised its full-year outlook, but the stock fell 2.1% in the premarket.Pershing Square Tontine Holdings (PSTH) – Pershing Square Tontine Holdings has dropped plans to buy 10% of Universal Music, after regulators and investors questioned the idea of buying a minority stake through a special purpose acquisition company. Instead, billionaire investor Bill Ackman plans to buy the stake through his Pershing Square hedge fund.Zoom Video Communications (ZM) – Zoom will buy cloud-based call center operator Five9 (FIVN) for $14.7 billion in stock, representing Zoom’s largest-ever acquisition. Zoom fell 2.7% in premarket trading, while Five9 surged 7.4%.National Grid (NGG) – National Grid will reportedly be stripped of its responsibility to run Britain’s electricity grid. The Times newspaper reports that British officials are preparing plans to award that responsibility to an independent body, with an announcement coming as early as this week.Ingersoll-Rand (IR) – The industrial equipment and services company has been rebuffed in its bid to initiate takeover talks with manufacturing equipment maker SPX Flow (SPXC), according to people familiar with the matter who spoke to Reuters. The sources said the most recent per-share offer was in the low $80s, which SPX Flow is said to have dismissed as inadequate.Johnson & Johnson (JNJ) – J&J is reportedly exploring a plan to offload talc-related liabilities into a new business that would then file for bankruptcy. People familiar with the matter who spoke to Reuters said such a move could result in lower payouts to those who do not settle their cases beforehand. J&J faces numerous allegations that its baby powder and other talc-related products have caused cancer.Tesla (TSLA) – Tesla is offering customers of its “FSD” premium driver assistance service on a subscription basis for $199 per month, rather than for a $10,000 upfront payment. Tesla fell 1.6% in the premarket.Autodesk (ADSK) – Autodesk has ended takeover talks with Australia-based software maker Altium. That comes several weeks after Altium rejected a more than $3.7 billion takeover offer from Autodesk.Xpeng (XPEV) – The China-based electric vehicle maker priced the base model of its new P5 electric sedan at about $24,700, undercutting the price of Tesla’s newly introduced cheaper version of its Model 3 sedan. Xpeng lost 1.9% in the premarket.AMC Networks (AMCX) – AMC will pay $200 million to end a legal dispute over profits from the hit TV show “The Walking Dead”. It will pay $143 million to settle the suit and will pay the remainder to buy the remaining rights to the show from executive producer Frank Darabont and Creative Artists Agency.CORRECTION: This article has been updated to correct the spelling of Cal-Maine Foods. More

In this articleOCAResidential single family homes construction by KB Home are shown under construction in the community of Valley Center, California, U.S. June 3, 2021.Mike Blake | ReutersDirect-to-consumer home insurance technology company Kin Insurance is going public through a reverse merger with Omnichannel Acquisition Corp., the company announced Monday. The agreement values Kin Insurance at roughly $1.03 billion. The company, which currently operates in Florida, Louisiana and California, also announced plans for a national expansion after purchasing an inactive insurer that operates in more than forty states.Kin’s technology-first approach enables customers to insure homes online within minutes. The company is the only pure-play direct-to-consumer digital insurer within the homeowners insurance market, which is valued north of $100 billion. The company crunches thousands of data points that it says allows for more accurate pricing and better underwriting results. This also enables it to operate in markets that are subject to growing weather volatility as a result of climate change. “Access to affordable home insurance is challenging in regions that are impacted by climate change and severe weather; at Kin, our proprietary technology and deep data advantage enables us to best evaluate risk and price home insurance fairly for consumers,” the company said in a statement. “We are growing fast, generating industry-leading unit economics, and are well-positioned to significantly expand our market share moving forward,” the company added.Omnichannel Acquisition Corp. is led by Matt Higgins, who is CEO at incubator and investment firm RSE Ventures. Stephen Ross, Jeff Blau and Bruce Beal of Related Companies and golf pro Rory McIlroy are among Kin’s other backers.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 articleUALAALU.S. stock index futures were lower during overnight trading on Sunday, after the major averages posted their first negative week in four.Futures contracts tied to the Dow Jones Industrial Average slid 169 points. S&P 500 futures and Nasdaq 100 futures both also traded in negative territory.The Dow and S&P fell 0.52% and 0.97% last week, respectively. The Nasdaq Composite, meanwhile, was the relative underperformer, dropping 1.87%, to post its worst week since May.Inflation fears weighed on stocks, with a U.S. consumer sentiment index from the University of Michigan released on Friday showing that consumers believe prices will jump 4.8% over the next year. This is the steepest climb since August 2008. Earlier in the week, the June Consumer Price Index showed that inflation jumped 5.4% year-over-year, spooking investors.On the flip side, retail sales numbers released Friday came in better-than-expected, rising 0.6% in June compared to expectations of a 0.4% decline.”Inflation is still being driven by a relatively narrow range of goods and services impacted by the pandemic,” UBS said in a recent note. “We do not see inflation yet as a barrier to further gains in equity markets,” the firm added. UBS recently hiked its June 2022 price target for the S&P 500 to 4,650.A busy week of earnings is on deck, with nine Dow components set to report and 76 S&P companies will provide quarterly updates. United Airlines and American Airlines will report, as will social media companies Snap and Twitter. CSX, Johnson & Johnson, Coca-Cola, Honeywell, IBM, Intel and Netflix are also on the docket.The largest banks kicked off earnings season last week, and analysts at BMO noted that ahead of the start to earnings season 66 companies in the S&P 500 issued positive earnings guidance for the quarter, which is the largest since at least 2006.”Q2 earnings season is here and another stellar reporting period is expected for US stocks with the S&P 500 y/y EPS growth rate currently sitting at 65.5%, which would mark the strongest clip since Q4 ’09,” the firm said in a recent note to clients.On the economic data front, the National Association of Home Builders will release its latest survey results on Monday, giving consumers a glimpse into sentiment across the housing market. Economists polled by Dow Jones expect the reading to be unchanged from the prior month at 81. Anything above 50 is considered positive sentiment.For the month of July, the Nasdaq Composite is down 0.5%. The S&P 500 and Dow are in the green, however, rising 0.7% and 0.5%, respectively. The Russell 2000 is down more than 6% amid weakness in small caps.”The composition of recent data suggests that inflation will largely prove transitory as the Fed has stated,” said LPL Financial Chief Market Strategist Ryan Detrick. “Just how long ‘transitory’ will prove to be is the big question. We are in the middle of the season when we expected to see some hot prints, so this week has not necessarily been a surprise.”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

The investor who sold his bear fund as the 2008 financial crisis was unfolding is delivering a grim long-term prognosis to Wall Street.From the S&P 500 to Big Tech to bitcoin, David Tice warns it’s a “very dangerous period” for investors right now.”The market is very overpriced in terms of future earnings. We are adding debt like we’ve never seen,” the former Prudent Bear Fund manager told “Trading Nation” on Friday. “We have the Treasury market acting very strange with rates falling dramatically.”Tice, who’s known for making bearish bets during bull markets, now advises the AdvisorShares Ranger Equity Bear ETF, which has $70 million in assets under management. The fund is up 3% over the past month, but it’s off 62% over the last two years.He acknowledges it’s tough to time the next major pullback, and he’s often early. However, Tice is convinced a market meltdown is unavoidable.”We’re not out of the woods yet, and this is a dangerous market,” Tice reiterated.He’s encouraging investors to weigh the risks: Try to earn 3% to 5% near-term gains while contending with the threat of a 40% pullback? Tice thinks it’s a bet not worth taking.Tice is particularly worried about Big Tech and the FAANG stocks, which include Facebook, Apple, Amazon, Netflix and Alphabet, formerly known as Google.”A lot of money has been thrown at Alphabet and Microsoft, Apple and Facebook, Twitter, etc.,” noted Tice. “Costs are going up in that sector.”Bitcoin is ‘very dangerous to hold today’He’s also urging investors to be vigilant in the cryptocurrency space. Tice, who came into the year as a bitcoin bull, turned bearish on bitcoin when it hit all-time highs in March.”We had a bitcoin position when bitcoin was at $10,000,” Tice said. “However, when it got to $60,000 we felt like that was long in the tooth… Lately, there’s been a lot more uproar from central bankers, Bank for International Settlements [and] the Bank of England have made profound negative statements. I think it’s very dangerous to hold today.”Read more about cryptocurrencies from CNBC ProGundlach says the bitcoin chart looks pretty scary here, and he wouldn’t own itInvesting in Ethereum? What you need to know about it and why it’s not just another bitcoinBitcoin’s ‘mining difficulty’ is about to fall. Here’s what that means for the cryptocurrencyDue to his overall bearishness, Tice co-founded hedge fund Morand-Tice Capital Management almost exactly a year ago. It’s devoted to metal and mining stocks. Tice, a long-time gold and silver bull, believes it’s a once in a decade opportunity for investors.”You look at this lack of discipline in monetary and fiscal markets. Gold is truly the place to be,” said Tice. “Over 5,000 years, gold and silver do very well as protection against fiat money.”Gold closed at $1,812.50 an ounce on Friday. It’s down 4% so far this year and up 28% over the past two years. Tice expects the precious metal to rally 10% to $2,000 by December.”I would be owning gold, especially gold and silver mining companies. These companies have never been cheaper. Many are at single digit multiples yet have potentially 15 to 20% growth rate in earnings even with this flat gold price,” Tice said. “But then you add on what we think is going to be a 20% annual increase in the gold price, and these companies are going to be outstanding opportunities.”Disclosure: David Tice owns gold, silver and mining stocks.Disclaimer More

IN “GAME OF THRONES”, a fantasy drama, a duel takes place between Khal Drogo, a fearsome warrior, and a rival. Khal Drogo comes off unscathed from the brutal battle, suffering only a scratch to his chest. But the wound festers, gradually weakening the fighter. A few scenes later, Khal Drogo falls off his horse and eventually dies.Many economists worry that economies in the rich world could face a similar fate. The past 18 months of lockdowns have left surprisingly few economic scars. A brisk recovery is underway. But has the damage from covid-19 been avoided, or merely deferred? As government stimulus schemes put into place last year come to an end, the question may soon be answered.When they first imposed lockdowns, governments in the rich world introduced a raft of measures to support firms and households, from doling out stimulus cheques and setting up furlough schemes to offering low-interest loans to businesses and announcing moratoriums on tax, interest and rent payments. Many of these are now coming to an end, or have done so already. In the euro area at least three-quarters of debt holidays have expired; in Germany an insolvency moratorium ended in April. In America half of states are abolishing a $300 weekly top-up to unemployment benefits in June and July; the rest follow in September. A federal moratorium on evictions ends on July 31st. Britain’s and Canada’s job-retention programmes end in the autumn.Taken together, all these schemes have been remarkably successful in preventing much of the economic scarring usually seen after a recession. That is not to deny that many people have suffered deprivation; global extreme poverty, for instance, has risen sharply. Yet in the rich world overall family finances look surprisingly strong. Real disposable income per person rose by 3% in 2020 even as GDP tanked (see chart 1). Government spending on extra unemployment benefits and cash transfers, which came to 2.3% of rich countries’ GDP, undoubtedly helped. In America the poverty rate has risen only slightly from 10.7% in January 2020 to 11% in June this year, albeit with oscillations in-between.Resilient household finances ensured robust demand for goods and services even in the depths of lockdown. That, plus a series of rescue measures, means that firms too look unscathed. In stark contrast to usual recessions, business bankruptcies did not soar but fell sharply in most rich countries last year (see chart 2).The uncertainty now is how this picture will change once stimulus ends. In a recent report the Bank for International Settlements, a club for central bankers, identified a “wave of firms’ insolvencies” as a “big question-mark clouding the outlook”. There are three areas of concern: that reduced cash transfers cut household incomes and hit spending; that the end of job-protection schemes puts millions out of work; and that a host of deferred bills and debt repayments comes due, crimping spending or forcing bankruptcies.Consider cash transfers first. Just as unemployment insurance is becoming stingier in America, Britain too is reducing its main welfare payment by £20 ($27) a week. Some people will surely reduce their outgoings as benefits are pared back.Yet overall spending may not suffer much. Households in aggregate have saved far more than normal (see chart 3). Our analysis of OECD data puts the level of “excess” savings across the club of mostly rich countries at $3trn, worth a tenth of overall annual consumer spending. The big worry about consumers in 2021 is not that an already large cash pile is no longer being topped up, but that people choose not to spend their savings.The second concern relates to job-protection schemes. Research by UBS, a bank, suggests that roughly 5% of employees in the four largest euro-area economies and Britain remain on these programmes. If they cannot find work once the schemes end, the average unemployment rate across the five countries will exceed the peak seen in the global financial crisis.Whether or not this happens depends in part on how strong spending, and thus demand for labour, proves to be. In May the Bank of England expected joblessness in Britain to increase “only slightly” after furloughs end, in part because of a “stronger projection for output”. But the fate of unemployment also depends in part on how many people work in sectors that consumers no longer want to or cannot patronise.Here Australia offers hope. Its job-retention scheme, which a year ago was supporting 3.5m people, ended in March. Since then the unemployment rate has dropped to its lowest in a decade. Nine out of ten people on the scheme have moved back into work. As in many rich countries the problem in Australia is not an abundance of labour but a shortage. The pandemic has created new demands and job vacancies, which are proving hard to fill.The third concern is perhaps the most significant—and is also the hardest to judge. It relates to bills that are due but as yet unpaid, from taxes and interest to rents. These are extremely difficult to measure. Although companies rushed to borrow and issue debt early on in the pandemic, indebtedness has grown less rapidly since. But it is far from clear how company or national accounts treat bills that are overdue or deferred.Game of loansDebtors themselves may not know where they stand. Non-payment of rent by American businesses in 2020 “occurred privately and in a somewhat disorganised way”, according to a paper by Goldman Sachs, a bank, leaving “lingering disagreements about whether rents have been truly abated or merely deferred”. Estimates of the “back rent” owed by American households to their landlords vary by a factor of six.In its financial-stability review the European Central Bank nods to the uncertainty, arguing that moratoriums on debt repayments “have likely masked some asset-quality risks”. The Bank of England’s financial-stability report notes that “businesses may face substantial repayments as VAT [valued-added tax] and rent deferrals begin to lapse.”The scale of the problem may be manageable in aggregate. Take commercial rent in America. Estimates of unpaid rent vary, but a report by the city of San Francisco reckons that local businesses failed to pay up to $400m in the nine months to December. Scaling that up as an inevitably rough guide suggests missed rent of about $30bn in America as a whole—about 3% of annual commercial rents paid in a normal year.So far the evidence suggests that bills are being largely repaid. In Britain over 80% of households taking out deferrals on mortgage payments have since returned to full repayments, suggesting many people may have made use of the scheme out of caution rather than need. In the eurozone loans emerging from moratoriums have performed only slightly worse than the rest of banks’ loan books thus far.But as with so many things in the pandemic, the likeliest outcome is that withdrawing stimulus will hit people at the bottom hardest. Cutting welfare may push some people into poverty and in America, millions of renters could face eviction. The least productive firms might go bust. In 2020 governments were quick to introduce universal, generous stimulus schemes. The task now is to scale those back and enable creative destruction, while still protecting those in need. More