Finance

In this articleMSMorgan Stanley on Thursday posted second-quarter profit and revenue that exceeded analysts’ expectations on strength in equities trading and investment banking.Here’s how the bank did:Earnings: $1.85 a share vs. the $1.65 estimate of analysts surveyed by Refinitiv.Revenue: $14.8 billion vs. the $13.98 billion estimate.While rival banks reported a steep slowdown in fixed-income trading revenue — a dynamic that ensnared Morgan Stanley’s bond traders as well — the bank’s strength has traditionally been in its equities-trading franchise, the biggest in the world.That business outperformed in the second quarter, producing $2.83 billion in revenue, more than $400 million over what analysts had expected. It made up for the shortfall in fixed income, which produced $1.68 billion in revenue, below the $2 billion estimate.Stock trading has thrived in the second quarter for Wall Street, as have wealth management businesses, both of which have benefited from high asset values and robust IPO activity. Another area that has flourished is investment banking, propelled by robust merger activity and related financings.Like rival Goldman Sachs, Morgan Stanley posted strong investment banking results, with revenue of $2.38 billion exceeding the $2.1 billion estimate.That helped the firm’s institutional securities business, which houses its trading and advisory operations, post $7.1 billion in revenues, about $350 million more than expected.The two other major divisions at New York-based Morgan Stanley also exceeded expectations in the quarter.The bank’s massive wealth management business, bolstered by the E-Trade acquisition last year, posted $6.1 billion in revenue, edging out the $5.9 billion estimate.Its investment management division, helped in part by the purchase of Eaton Vance last year, posted $1.7 billion in revenue, topping the $1.53 billion estimate.Through a series of savvy acquisitions, CEO James Gorman has built up the bank’s wealth management franchise to be one of the largest in the world. He also helped rehabilitate the firm’s trading operations and maintained its leading merger advisory practice.”The firm delivered another very strong quarter, with contributions from all of our businesses,” Gorman said in the earnings release. “With our transformed business model providing more stable and durable earnings, we have doubled our dividend and announced a $12 billion buyback as we move to return our excess capital to shareholders.”Shares of the bank dipped 1.3% in premarket trading amid a broader sell-off. Before Thursday, Morgan Stanley shares have climbed 35% this year, compared with the 26% rise of the KBW Bank Index.Morgan Stanley is the last of the six largest U.S. banks to report second-quarter earnings.JPMorgan Chase, Bank of America, Wells Fargo and Citigroup beat analysts’ profit expectations by releasing money set aside earlier for loan losses. Goldman beat estimates on strong advisory results.  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 articleMSAMCCheck out the companies making headlines before the bell:Morgan Stanley (MS) – Morgan Stanley beat estimates by 20 cents with second-quarter earnings of $1.85 per share, while revenue topped forecasts as well, helped by an acceleration in investment banking activity. Despite the beat, Morgan Stanley shares fell 1.6% in the premarket.American International Group (AIG) – AIG shares surged 5% in premarket trading after it announced a deal to sell a 9.9% stake in its life insurance and retirement services unit to Blackstone (BX) for $2.2 billion. The deal also calls for Blackstone to manage an initial $50 billion in assets backing AIG’s life insurance policies and annuities, increasing to about $100 billion over the next six years.AMC Entertainment (AMC) – AMC tumbled another 6.2% in the premarket after the movie theater operator’s stock fell for the fourth straight day and the eighth time in nine sessions Wednesday. The skid was capped by a 15% drop in yesterday’s session, bringing its total loss over that time to about 41%.UnitedHealth Group (UNH) – The health insurer saw its second-quarter profit fall by more than a third from a year ago, as consumers resumed elective medical care that they had postponed due to the pandemic. However, UnitedHealth did beat estimates on the top and bottom lines, earning an adjusted $4.70 per share compared to a consensus estimate of $4.43.Bank of NY Mellon (BK) – Bank of NY Mellon beat estimates by 13 cents with quarterly earnings of $1.13 per share and revenue topping estimates as well. Its board also reauthorized the repurchase of up to $6 billion in common stock.Truist Financial (TFC) – The bank that resulted from the 2019 merger of SunTrust and BB&T reported an adjusted quarterly profit of $1.55 per share, beating the $1.19 consensus estimate, while revenue also came in above Wall Street projections. Results were helped by strong fee and wealth management income, among other factors.US Bancorp (USB) – US Bancorp earned $1.28 per share for the second quarter, 14 cents above estimates, with revenue beating estimates as well. Its results got a boost from an improving economy which helped boost credit and debit card revenue and allowed it to lower its credit loss provision.Norton LifeLock (NLOK) – Norton LifeLock is in talks to buy fellow cybersecurity firm Avast, in a deal that would expand Norton’s presence in consumer software. Avast said the two sides were in advanced discussions about a possible cash-and-stock deal. Norton LifeLock fell 2.6% in the premarket.Johnson & Johnson (JNJ) – Johnson & Johnson is recalling some batches of its Neutrogena and Aveeno spray sunscreen products after benzene was found in some samples. Johnson & Johnson said benzene – which can potentially cause cancer – is not used in the manufacture of the products and it is investigating how it wound up in some products. Shares fell 1% in the premarket.General Motors (GM) – NHSTA urged owners of about 50,000 Chevy Bolts to park outside after charging the electric vehicles, due to fire risks. GM, which makes the Bolt, had issued a similar warning earlier in the day about vehicles from the 2017 to 2019 model years.Netflix (NFLX) – Netflix hired former Facebook executive Mike Verdu to lead its video games unit, as it steps up efforts to grow beyond its flagship video streaming business. The stock rose 1.8% in premarket action.Beyond Meat (BYND) – Beyond Meat opened an online store in China on e-commerce platform JD.com (JD), as it tries to boost sales of its plant-based meat alternatives in that country. More

Nikolay Storonsky, founder and CEO of Revolut, on stage at the 2019 Web Summit technology conference in Lisbon, Portugal.Harry Murphy | Sportsfile for Web Summit via Getty ImagesLONDON — British fintech firm Revolut said Thursday it has raised $800 million in a new funding round led by SoftBank and Tiger Global.Revolut, which offers banking and trading services through an app, is now valued at $33 billion, a sixfold increase on the $5.5 billion the company was worth last year.The latest financing round makes Revolut the second-largest fintech unicorn — a private start-up worth over $1 billion — in Europe, behind buy-now-pay-later giant Klarna, according to data from CB Insights. It is also now the biggest fintech in the U.K., leaping ahead of payments firm Checkout.com.The fresh cash comes from Japanese conglomerate SoftBank’s Vision Fund 2 and U.S. hedge fund Tiger Global, which collectively hold a less than 5% stake in the company.Revolut will use the money to invest in marketing, product development and international expansion, Chief Financial Officer Mikko Salovaara told reporters Thursday. The firm is heavily focused on ramping up growth in the United States and India, he added.Fintech start-ups have been on a funding spree lately, raising a record $33.7 billion in the second quarter of 2021, according to CB Insights. In Europe, the likes of Germany’s Trade Republic and the Netherlands’ Mollie have raised hundreds of millions of dollars from investors.Salovaara said Revolut had no immediate plans for an initial public offering, having just raised a sizable amount of funding. He didn’t rule out an IPO this year but suggested it was unlikely. Last week, money transfer giant Wise went public in London’s biggest tech listing by market cap.Revolut reported annual losses of £167.8 million ($231.9 million) in 2020, higher than the £106.7 million the company lost in the previous year. The fintech made £222.1 million in revenue last year. That means Revolut’s new market value is more than 100 times its 2020 sales.Revolut managed to break even toward the latter half of 2020 and was “strongly profitable” in the first quarter of this year, Salovaara said.The company is banking on its expansion into new services such as crypto, stock trading and business accounts to reach profitability in the long run, CEO and co-founder Nik Storonsky told CNBC in a recent interview. More

A McDonald’s delivery worker walks past pig statues outside an art museum in Beijing on July 10, 2021.Jade Gao | AFP | Getty ImagesBEIJING — China reported second-quarter GDP growth that came in slightly below expectations, while retail sales and industrial production grew faster than forecast in June.The country’s gross domestic product increased 7.9% in the second quarter from a year ago, the National Bureau of Statistics said Thursday. That fell short of Reuters’ estimate of 8.1% growth for the April to June period.”Overall, China’s economy looks to be on track for recovery, with the 6% annual growth goal in reach,” Chaoping Zhu, global market strategist at JPMorgan Asset Management, said in a note.”However, downside and structural risks in domestic demand are concerning,” he said, pointing to weak growth in long-term credit and uncertainty over market regulation.Second-quarter GDP rose 1.3% from the first quarter, faster than the 0.6% pace between the first quarter of this year and fourth quarter of 2020. However, the latest quarterly increase was still slower than the 2.6% pace of the fourth quarter.In the first quarter, GDP grew 18.3%, up from a contraction a year ago.”China’s economy sustained a steady recovery,” the statistics bureau said in a release. But the bureau added there were still concerns about the global spread of the pandemic and “unbalanced” recovery domestically.Retail sales rose 12.1% in June from a year ago, more than the expected 11% level forecast by Reuters. The fastest-growing category was beverages, up 29.1% year-on-year.Retail sales growth has lagged that of the overall economy, and missed analysts’ expectations for the first two months of the second quarter.Consumption declined year-on-year in May for four provincial capitals — Wuhan, Guiyang, Shijiazhuang and Yinchuan — according to analysis of public data by Pinpoint Asset Management.Industrial production grew by 8.3%, greater than the 7.8% Reuters estimate.In the last three months, Chinese authorities have also announced support for companies affected by the surge in commodity prices.The urban survey unemployment rate held steady at 5% in June, while unemployment for the younger 16 to 24 age category climbed to 15.4% — the same as June 2020.Read more about China from CNBC ProChinese tech stocks face other risks on top of tighter regulation, says portfolio managerCathie Wood explains her strategy on Chinese stocks in light of the crackdownDan Niles says he’s now tempted to buy Chinese tech stocks – here are 2 of his favoritesOn Thursday, a cut to the reserve requirement ratio (RRR), or the amount of funds banks must hold in reserve, was set to take effect. Authorities’ initial hint of such a cut surprised investors last week, and signaled concerns of slower growth.The cut is expected to release about 1 trillion yuan (or $154 billion) into the economy.Meanwhile, China’s customs agency said earlier this week that exports rose a more-than-expected 32.2% in June.Exports growth will likely slow in the second half of the year, said Bruce Pang, head of macro and strategy research at China Renaissance. He cited factors such as a high level of growth in the second half of last year and weaker growth in commodity prices.China’s slower pace of economic recovery “is still clouded with uncertainties and unbalanced growth, as employment, household income, consumption, manufacturing investment, the service sector and private companies have yet to return to pre-pandemic levels,” Pang said.— CNBC’s Yen Nee Lee contributed to this report. More

SINGAPORE — As most of Southeast Asia continues to grapple with Covid, Singapore stocks are a standout regionally, according to HSBC Private Banking & Wealth Management’s James Cheo.”We are just generally a little bit more cautious on Southeast Asia region, but within which, we are actually positive on Singapore,” Cheo, Southeast Asia chief investment officer at the firm, told CNBC’s “Street Signs Asia” on Wednesday.He cited Singapore’s improving management of the pandemic as a factor behind this view. The country has gradually started to ease social distancing measures that were re-imposed in early May.In contrast, several other countries in Southeast Asia have been struggling with a surge in infections.CNBC Health & Science Read CNBC’s latest global coverage of the Covid pandemic:Covid cases are surging again in Latin America and the U.S., WHO officials warnCovid cluster at hotel hosting Olympic athletes raises concerns as Tokyo cases surge Hospitalizations rising again as delta variant spreads among the unvaccinated, doctors saySouth Korea reports 1,600 new Covid cases as it tackles outbreak on military vessel Vaccination rates in Singapore have also far surpassed those of its regional peers.As of July 12, 40.47% of Singapore’s population was fully vaccinated against Covid-19, according to Our World in Data. In comparison, Malaysia had fully inoculated 11.38% of its population while the figure was even lower in Indonesia and Thailand at 5.5% and 4.74%, respectively.Beyond Singapore’s improving pandemic management situation, Cheo added that economic data and earnings out of the country appear “extremely strong.”In the second quarter, Singapore posted its strongest economic growth in 11 years, rebounding from last year’s economic slump. In absolute terms, gross domestic product in the April-to-June period this year was still 0.9% below the second quarter of 2019, before the pandemic.Preference for financials, industrialsCheo highlighted financials and industrials in Singapore as two sectors that he liked at the moment.Stock picks and investing trends from CNBC Pro:There’s a ‘better hedge’ against rising inflation — and it’s not gold, says fund managerFund manager explains her top asset picks for the second halfGoldman says don’t bail on the Big Tech giants because of antitrust fearsFirms in the Singapore’s financial sector “look interesting” and are expected to perform well along with global cyclicality and the economic recovery, Cheo said.Meanwhile, the industrial sector is also set to benefit for similar reasons, he added.”As the economy reopens, you’re gonna get more activity in various parts of the economy,” Cheo said. “Some of the the real estate plays, some of the consumption plays in Singapore, I think those could actually be supported as the economy recovers into the second half of this year.”— CNBC’s Yen Nee Lee contributed to this report. More

Traders on the floor of the New York Stock Exchange.Source: NYSEU.S. stock futures were steady in overnight trading on Wednesday as investors readied for more corporate earnings and labor market data.Dow futures fell just 10 points. S&P 500 futures were flat and Nasdaq 100 futures gained only 0.04%.On Wednesday, the Dow rose 44 points, helped by a 2.4% gain in Apple’s stock. The S&P 500 climbed 0.12% after hitting an intraday record earlier in the session. The Nasdaq Composite was the relative underperformer, dipping 0.2%. However, the Nasdaq 100 closed at an all-time high.The small-cap benchmark Russell 2000 lost 1.7% on Thursday, bringing its week-to-date losses to more than 3.4%.Federal Reserve Chair Jerome Powell — in testimony to the House Committee on Financial Services — quelled investors fears about a rollback of the central bank’s easy policies anytime soon, even in the face of inflation. The producer prices from June showed higher than expected inflation on Thursday.”At our June meeting, the Committee discussed the economy’s progress toward our goals since we adopted our asset purchase guidance last December. While reaching the standard of ‘substantial further progress’ is still a ways off, participants expect that progress will continue,” Powell said.Powell is scheduled to testify before the Senate on Thursday.”Fed chair Powell helped calm fears by again suggesting these bad inflation reports were merely transitory,” said Jim Paulsen, chief investment strategist at the Leuthold Group, noting the drop in bond yields following the hot inflation report. “Evidently, Bond investors are buying the Fed’s inflation narrative.”Earnings season continued on Wednesday with strong results of banks like Bank of America and other corporations; however, stock reactions remained tempered. All 12 of the S&P 500 companies that have posted quarterly fiscal results this week up to Wednesday morning have beaten earnings-per-share estimates, but the group is averaging a 0.56% decline following the results.Reports will continue to roll in on Thursday with Morgan Stanley, U.S. Bancorp., UnitedHealth, Cintas and Progressive all releasing results.Investors will also get a glimpse at the recovery in the labor picture in the U.S. on Thursday.Last week’s initial filings for unemployment insurance are due to be released at 8:30 a.m. on Thursday. Economists polled by Dow Jones are expecting first-time jobless claims of 360,000, compared to 373,000 for the week ended July 3.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

A pint of Oatly brand ice cream is arranged for a photograph in the Brooklyn borough of New York, U.S., on Wednesday, Sept. 16, 2020.Gabby Jones | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading.Bank of America — Shares of the banking giant fell 2.5% after reporting quarterly earnings of $1.03 per share, including a one-time tax benefit. While that was higher than the consensus estimate of 77 cents, the company reported revenue below Wall Street forecasts and reported higher expenses. Citi and PNC also reported better-than-expected earnings Wednesday morning and are trading lower.BlackRock — The asset management firm’s stock fell 3% despite reporting a better-than-expected quarterly profit Wednesday. BlackRock brought in $10.03 per share, beating the consensus estimate for the second quarter by 57 cents. Assets under management rose to a record $9.49 trillion during the quarter.Energy stocks — Energy stocks are falling after the International Energy Agency warned Tuesday about the prospect of a deepening supply deficit if OPEC+ can’t reach a deal on its production policy. Marathon Petroleum and Valero are down 3.9%, Occidental has lost more than 7% and Cabot Oil & Gas fell 5%.Oatly — Shares of Oatly fell 2.7% after the alternative dairy company was accused of questionable accounting practices and misrepresenting its sustainability practices. The Swedish oat-based milk substitute company made its U.S. public debut about two months ago.Peloton — Shares of the at-home workout empire dropped more than 5% after Wedbush Securities downgraded its stock to “neutral” from “outperform.” Wedbush noted the number of fitness alternatives is growing and as the economy reopens customers are leaving their homes again for out-of-home workouts.Lululemon — The athleisure brand’s stock rose 1.6% after Goldman initiated coverage with a “buy” rating and included it on its “Conviction Buy” list. Even as people swap their leggings and sweatpants for business casual attire, Goldman said Lululemon can expand into new categories geographically and categorically.Delta Airlines — The air carrier’s shares are down 1.5% after reporting it lost $1.07 per share for the second quarter, which was less of a loss than analysts expected. The airline topped revenue estimates, however, noting accelerated customer demand and a “solid” pretax profit for the month of JuneAmerican Airlines — American Airlines saw its stock rise more than 3% ahead of its second-quarter earnings report next week. The company said it expects a “slight” pretax profit for the second quarter. L Brands — Shares of the retailer advanced more than 1% after the company raised its second-quarter earnings guidance. The optimistic outlook comes amid strength in L Brands’ Victoria’s Secret and Bath & Body Works divisions. The company also announced plans to sell 20 million shares held by founder Leslie Wexner and others.Apple — Apple is trading over 2% higher after reports that the company asked suppliers to ramp up production of next-generation iPhones by 20%. That news follows another report from Tuesday that the tech company is working with Goldman Sachs on a buy-now-pay-later service.AMC Entertainment — The movie theater chain saw its stock tumbling more than 15% to around $33 apiece on Wednesday, less than half of its all-time high of $72.62 in early June. The decline brought its month-to-date losses to nearly 40%. The stock is still up more than 1,500% this year thanks to the meme stock mania earlier this year. — CNBC’s Hannah Miao, Pippa Stevens 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

In this articleCLNECLOVWGMEAMCThe price of AMC Entertainment stock has been cut in half from its peak amid a big rout in meme stocks this month as the reality of bubble-like rallies and failing businesses started to become apparent for Reddit-obsessed investors.The movie theater chain’s stock tumbled 15% to $33.43 apiece on Wednesday, less than half of its all-time high of $72.62 in early June. The decline brought its month-to-date losses to 41%. GameStop, the original meme stock king, has fallen more than 21% this month, while newcomers Clover Health and Clean Energy Fuels have plunged 34.8% and 22.6% in July, respectively.Zoom In IconArrows pointing outwardsWhile the pullback doesn’t make a huge dent in their monstrous 2021 rallies, it could be a sign that investors have begun to lose patience and rush for the exits as AMC’s and GameStop’s turnaround plans fell short for many. Meanwhile, their recent stock sales also diluted existing shareholders’ ownership to a great extent.”While the declines in these asset prices has been rapid, their levels are still historically elevated, which could lead to further pain in the future,” Maneesh Deshpande, Barclays head of U.S. equity strategy and global equity derivatives, said of meme stocks in a note.AMC shares are still up more than 1,400% on the year, and GameStop has a rally over 780% in 2021 under its belt. The massive gains largely came from a band of retail traders who coordinated trades on Reddit’s WallStreetBets’ chat room, aiming to squeeze out short sellers. The rally has pushed GameStop to the Russell 1000 Index of large-cap stocks from the small-cap Russell 2000.While short sellers betting against these meme stocks suffered huge losses earlier this year, they are not letting up. In fact, the short interest in many of these speculative names has gone up in recent weeks, according to data firm S3 Partners.AMC has 13.8% of its float shares sold short after a 6.2% increase in shorted shares over the past week, S3 data said. The short interest in GameStop rose 9.4% in the past week to 13.3%, the data said.’Little hope’AMC last week that it has tabled a proposal that would have asked its shareholders to allow the company to issue up to 25 million more shares. The decision followed a series of stock offerings in the second quarter that raised a total $1.246 billion for AMC.Still, AMC is heavily leveraged with $4.5 billion of net debt and deferred rent at year-end, according to an estimate from Loop Capital Markets.”AMC has little hope of gaining significant market share and will have to pay cash for acquisitions, debt retirement and executive compensation,” Alan Gould, analyst at Loop Capital, said in a note.For GameStop, the video game retailer has raised about $1.7 billion in recent stock sales, aiming to use to proceeds to accelerate its e-commerce transformation. The company announced two high-profile executive hires from Amazon last month. Still, many remained skeptical of GameStop’s ambition to revive its business.”Big Short” investor Michael Burry told Barron’s this month that he believes meme stocks are set to crash like the dot-com and housing market bubbles of previous decades.None of the Wall Street analysts covering AMC and GameStop have a buy rating on the stocks, according to FactSet.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More