Finance

Visoot Uthairam | Moment | Getty ImagesAmericans have lost nearly $500 million to Covid-related scams since the start of the pandemic, according to Federal Trade Commission data.And the agency is warning that con artists will likely try to take advantage of families who expect to get monthly payments from the child tax credit, which start Thursday.Around 327,000 people filed a fraud complaint to the federal agency between Jan. 1, 2020 and July 8 this year, the data shows.More from Personal Finance:Child tax credit payments will help offset loss of benefitsIRS sending 4 million unemployment refunds this weekWhy some applaud new leadership at the Social Security AdministrationVictims lost a combined $488 million, according to the Commission. The typical person lost $366.While fewer seniors have been duped relative to other age groups, their losses are almost three times higher — the typical person over age 80 lost $1,000 to fraud.Criminals have used multiple avenues to steal money from unsuspecting Americans, including fraud related to online shopping, travel and government stimulus funds during the pandemic.”While people are scared about their health and finances, con artists are having a field day,” Lucy Baker, a consumer defense associate at advocacy group U.S. PIRG, has told CNBC.The actual amount of fraud may be much higher, since the data only reflects scams that the public reports to the FTC.Online shopping accounted for the largest number of reported scams: 53,000 complaints, or about 16% of the total.Americans increased their online orders during the pandemic as they spent more time indoors. But many were victims of “opportunistic websites” claiming to sell popular items — anything from hand sanitizer to gloves, electronics, clothing and even puppies, according to the FTC. Customers order the item but then never receive it.When money from the government is in the news, we know scammers are about to run their standard playbook.Lisa Lakeconsumer education specialist at the FTCVictims lost the largest amount of total money ($77 million) to vacation and travel scams, say FTC officials. Most fraud relates to refunds and cancellations, the agency said.Travel has rebounded as Covid vaccinations increase — and fraudsters have responded by creating fake airline ticket booking sites or customer service numbers, according to the Better Business Bureau.Some have involved victims searching online for cheap flights and finding what appear to be great deals with major airlines, according to the Bureau. Travelers should use caution and double check a website URL or phone number before providing credit card information, the Bureau suggests.Stimulus and child tax creditScammers have also posed as government agents or other individuals claiming to be able to help ailing households access hundreds of billions of dollars in federal assistance, like stimulus checks, issued during the pandemic.The FTC is warning families that criminals may try preying on families who expect to get up to $300 a month per kid from an advance of the child tax credit. The IRS is sending payments starting Thursday.”When money from the government is in the news, we know scammers are about to run their standard playbook,” Lisa Lake, a consumer education specialist at the FTC, wrote last month.”They may call, email, text or DM you,” she said. “They’ll say they can help you get your payments earlier (they can’t), get you more money (also no), or tell you other lies (for sure).”Only the IRS will send these payments, so anyone trying to “help” you get a child tax credit is a criminal, Lake said. The government will also never randomly call, text, email or send a direct message and ask for money or information such as Social Security, bank account, or debit and credit card numbers, she said. More

[The stream is slated to start at noon ET. Please refresh the page if you do not see a player above at that time.]Federal Reserve Chairman Jerome Powell is speaking Wednesday to members of the House Financial Services Committee.The central bank leader will provide an update on monetary policy and the Fed’s economic views as part of congressionally mandated semiannual appearances.In remarks prepared for the testimony, Powell noted progress the economy made but maintained “there is still a long way to go” before the labor market has healed. He also said inflation has “increased notably” but is likely to back off as the economy returns to normal.Powell will speak again Thursday before the Senate Banking Committee.Read more:Powell says the Fed is still a ways off from altering policy, expects inflation to moderateFed’s Mary Daly says tapering of bond purchases may start this yearFed Chair Powell charged with convincing Congress this week that easy policy is still neededSubscribe to CNBC on YouTube.  More

In this articleCCitigroup on Wednesday posted second-quarter results that benefited from a $1.1 billion boost from releasing reserves the bank had set aside for loan losses.Here’s how the bank did:Earnings: $2.85 a share, topping the $1.96 estimate of analysts surveyed by Refinitiv.Revenue: $17.47 billion, edging out the $17.2 billion estimate.While the bank managed to top expectations for revenue, the figure declined 12% from a year earlier, driven by lower results in fixed income trading, falling credit card loans and dropping interest rates.The firm’s earnings jumped after it released reserves set aside for loan losses, resulting in a $1.1 billion benefit after $1.3 billion in charge-offs. A year ago, the bank had been forced to set aside billions for expected credit losses, resulting in an $8.2 billion credit cost.  Shares of the bank climbed 1.6% after the earnings report.”The pace of the global recovery is exceeding earlier expectations and with it, consumer and corporate confidence is rising,” CEO Jane Fraser said in the release. “We saw this across our businesses, as reflected in our performance in Investment Banking and Equities as well as markedly increased spending on our credit cards. While we have to be mindful of the unevenness in the recovery globally, we are optimistic about the momentum ahead.”Like other Wall Street rivals, Citigroup posted a sharp decline in fixed income trading revenue in the quarter, partially offset by higher equities trading results.Fixed income operations generated $3.2 billion in revenue, below the $3.66 billion estimate, while equities trading revenue of $1.1 billion topped the $879 million estimate.Fraser, who became CEO in February, announced in April that Citigroup was exiting retail operations in 13 countries outside the U.S. to improve returns. Now, analysts wonder what else Fraser has planned for her strategic revamp of Citigroup, the third biggest U.S. bank by assets.Shares of Citigroup have climbed 11% this year before Wednesday, compared with the 26% advance of the KBW Bank Index.Earlier Wednesday, Bank of America posted revenue that missed analysts’ expectations, driven by a drop in interest rates. On Tuesday, JPMorgan Chase and Goldman Sachs each posted results that beat expectations, helped by strong revenue from Wall Street advisory activities.  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 articleBACBank of America shares dropped in Wednesday’s premarket after the banking giant posted second-quarter revenue below analysts’ expectations.Here’s how the bank did:Earnings: $1.03 a share, including a $2 billion tax benefit. Excluding that one-time gain, EPS of 80 cents a share edged out the 77 cents estimate of analysts surveyed by Refinitiv.Revenue: $21.6 billion, just under the $21.8 billion estimate.The company said revenue fell 4% from a year earlier, driven by a 6% drop in net interest income because of lower interest rates. Lower trading revenue and the absence of a $704 million gain a year earlier also hit revenue, the bank said.  Shares fell 1.8% in premarket trading.Bank of America’s results show the impact of falling interest rates on the industry. Banks gather deposits and extend loans; falling interest rates squeeze the margin between what they pay depositors and charge borrowers. The bank’s net interest margin of 1.61% in the quarter was 26 basis points lower than a year earlier and below the 1.67% estimate of analysts surveyed by FactSet.CFO Paul Donofrio cited the “continued challenge of low interest rates” in the bank’s earnings release. The 10-year Treasury yield broke above 1.75% in March amid the economic comeback, hitting its highest level since the pandemic began. But the benchmark rate has pulled back to around 1.40% as of Tuesday.While an industrywide decline in trading revenue was expected, given the strong quarter a year ago driven by central banks’ response to the pandemic, Bank of America appears to have underperformed.  The bank’s fixed income trading operations generated $1.97 billion in revenue, well below the $2.71 billion estimate of analysts surveyed by FactSet. That shortfall was partially made up by the equities division, which produced $1.63 billion in revenue, topping the $1.35 billion estimate.Like other lenders, Bank of America set aside billions of dollars for credit losses last year, when the industry anticipated a wave of defaults tied to the coronavirus pandemic. Instead, government stimulus programs appear to have prevented most of the feared losses, and banks have begun to release reserves this year.The lender said that it had a $1.6 billion boost in the second quarter as it released reserves amid an improved U.S. economic outlook.Still, given the industry’s sluggish loan growth this year, analysts will want to hear CEO Brian Moynihan’s outlook for loans in the second half. The bank said Wednesday that its book of loans grew in the second quarter for the first time since early 2020.Also Wednesday, Citigroup beats analysts’ estimates for profit, thanks to a $1.1 billion boost from releasing reserves the bank had previously set aside for loan losses.On Tuesday, JPMorgan Chase and Goldman Sachs posted results that beat expectations, helped by strong revenue from Wall Street advisory activities.  Shares of Bank of America have climbed 31% this year before Wednesday, exceeding the 16% gain of the S&P 500 Index.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 articleWFCWells Fargo on Wednesday reported second-quarter earnings and revenue results that topped Wall Street’s expectations as it continued to release funds it had set aside during the Covid-19 pandemic to safeguard against widespread loan losses.Shares of the bank rose 0.5% in premarket trading following the earnings announcement. Here’s how the second-quarter compared with Wall Street estimates.Earnings: $1.38 in earnings per share versus 97 cents a share expected, according to Refinitiv, a sharp reversal from the loss it suffered in the second quarter of 2020.Revenue: $20.27 billion versus $17.77 billion expected, per Refinitiv estimates, reflecting a 10% increase compared with the same quarter one year ago.Wells Fargo results were boosted by a $1.6 billion release of its credit loss reserves as consumers’ perform better than the bank anticipated amid the pandemic recession. Financial firms have started to release those reserves as the recovery has accelerated in 2021, boosting profits as a result.Wells also reported a net interest margin — a measure of how much a bank earns from the difference between what it pays on deposits and what it takes in on loans — of 2.02% for the quarter. Analysts were expecting 2.05%, according to FactSet. Persistent low interest rates have continued to weigh on that part of the bank business.CEO Charlie Scharf said in a press release that demand for the bank’s loans remains somewhat muted despite the economic recovery.Charles Scharf, chief executive officer of Wells Fargo & Co., listens during a House Financial Services Committee hearing in Washington, D.C., U.S., on Tuesday, March 10, 2020.Andrew Harrer | Bloomberg | Getty Images”Wells Fargo benefited from the continued economic recovery, strong markets that helped drive gains in our affiliated venture capital businesses, and our progress on improving efficiency, but the headwinds of low interest rates and tepid loan demand remained,” Scharf said in the earnings release. “Our top priority continues to be building an appropriate risk and control infrastructure for a company of our size and complexity and we continue to invest in additional resources and devote significant management attention to this work.”Scharf, who took over in late 2019, is laser-focused on improving his company’s costs and public image after a fake accounts scandal in 2016 sparked scrutiny from federal lawmakers and led to multiple departures from the company’s top brass.The Federal Reserve in response capped the bank’s asset growth and compelled the bank’s new executive to focus on expenses.The bank reported an efficiency ratio of 66% compared with the FactSet estimate of 76.1%, indicating that its operating expenses as a proportion to its revenues had improved from 80% in the June quarter of 2020.The financial update from the San Francisco-based lender came nearly one week after CNBC reported that it is shutting down all existing personal lines of credit in coming weeks and has stopped offering the product.Wells Fargo’s credit lines had let customers borrow $3,000 to $100,000. The bank billed the lines as a means to consolidate higher-interest credit card debt, pay for home renovations or avoid overdraft fees on linked checking accounts.Wells said in a letter to customers that the move will allow it to focus on credit cards and personal loans.Though the move did anger some customers, Wells is otherwise posting a comeback in 2021 amid an economic turnaround in the U.S. thanks to the resumption of normal business activity. The improving jobs market and accelerating capital spending thanks to the rollout of the Covid-19 vaccine have helped bank equity breeze by the broader stock market since January.Wells Fargo is up 43.2% so far this year, while peers Bank of America and JPMorgan Chase are up 31.5% and 22.4%, respectively. The S&P 500 is up 16.3% over the same period.Of the largest six U.S. banks, Wells has the smallest trading and investment banking divisions, areas that peers have grown in recent months thanks to a flurry of initial public offerings and easy monetary policy,Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

A visual representation of digital currencies.Yuriko Nakao | Getty ImagesLONDON — Cryptocurrencies aren’t yet big enough to pose a systemic risk to financial stability, Bank of England Deputy Governor Jon Cunliffe said Wednesday.”The speculative boom in crypto is very noticeable but I don’t think it’s crossed the boundary into financial stability risk,” Cunliffe told CNBC’s Joumanna Bercetche in an exclusive interview.Bitcoin and other digital currencies shot up in value at the start of the year, briefly becoming a $2.5 trillion market. Backers of bitcoin claimed it could offer an alternative store of value as savers struggle to find yield due to ultra-low interest rates.However, cryptocurrencies are highly volatile, and the market has lost more than $1 trillion in value since May. Bitcoin has fallen from a record high of nearly $65,000 reached in April to around $32,500 as of Wednesday.Regulators have increasingly been sounding the alarm about crypto. China in particular has sought to crack down on the industry, in a series of measures that have weighed on investor sentiment in recent weeks.Meanwhile, Binance, the world’s largest crypto exchange, was banned from operating in the U.K. by the Financial Conduct Authority last month. Binance was one of many exchanges that failed to register with the regulator due to not meeting anti-money laundering requirements.Cunliffe said crypto speculation was mainly limited to retail investors for now, reiterating the central bank’s position that people investing in digital assets should be prepared to lose all their money.”There are issues of investor protection here. These are highly speculative assets,” he said. “But they’re not of the size that they would cause financial stability risk, and they’re not connected deeply into the standing financial system.””Were we to start to see those links develop, were we to start to see it move out of retail more into wholesale and see the financial sector more exposed, then I think you might start to think about risk in that sense,” he added.The Bank of England official added a distinction should be drawn between speculative crypto assets like bitcoin and so-called “stablecoins” which are backed by existing financial assets.Tether, for example, is the world’s largest stablecoin with more than $60 billion worth of tokens in circulation. It is meant to be backed 1:1 by U.S. dollars to maintain a stable value, however tether has garnered controversy due to concerns it doesn’t have enough reserves to justify its dollar peg.Cunliffe said he thinks stablecoins should come under regulatory supervision.”I think the international community needs to at least be developing standards to actually be able to distinguish but also to have regulatory standards for that sort of product,” he said.It comes as several central banks around the world — including the Bank of England — are exploring digital currencies of their own, in response to dwindling cash use and growing interest in crypto. More

In this articleLBCheck out the companies making headlines before the bell:Bank of America (BAC) – Bank of America shares slid 2.2% in the premarket after it reported a quarterly profit of $1.03 per share, including a one-time tax benefit. The consensus estimate was 77 cents. The bank’s revenue came in below Wall Street forecasts and it also reported higher expenses.BlackRock (BLK) – The asset management firm reported an adjusted quarterly profit of $10.03 per share, beating the consensus estimate of $9.46, while revenue was also above Wall Street forecasts. Assets under management surged to a record $9.49 trillion during the quarter. Despite the beat, BlackRock fell 1.4% in premarket action.Delta Air Lines (DAL) – Delta lost $1.07 per share for the second quarter, less than the $1.38 per share loss that analysts were anticipating. Revenue topped forecasts, with Delta noting accelerated customer demand and a “solid” pretax profit for the month of June. Delta gained 2.6% in premarket action.Peloton (PTON) – Pelton shares fell 2.2% in the premarket after Wedbush Securities downgraded the fitness equipment maker’s stock to “neutral” from “outperform”. Wedbush points out that consumers now have a growing number of workout alternatives, as well as the post-pandemic option of out-of-home workouts.American Airlines (AAL) – American expects to report positive cash flow for the second quarter, the first time that’s happened since the pandemic began. At the height of the global travel shutdown, American was burning about $100 million per day in cash. American shares jumped 2.9% in premarket trading.Broadcom (AVGO) – The chipmaker is no longer in talks to buy software company SAS Institute, according to people familiar with the matter who spoke to the Wall Street Journal. The end of the discussions reportedly came after SAS co-founders Jim Goodnight and John Sall changed their minds about possibly selling the company.Apple (AAPL) – Apple is asking suppliers to build as many as 90 million next-generation iPhones, according to people with knowledge of the matter who spoke to Bloomberg. That would represent an up to 20% increase over 2020 levels. Apple rose 1.8% in the premarket.EBay (EBAY) – eBay agreed to sell part of its stake in Norway’s Adevinta to satisfy a demand from Austrian competition regulators. Austria wanted eBay to cut its stake to no more than 33%, in order to give its approval for a tie-up between the classified ad businesses of the two companies. EBay will sell a 10.2% Adevinta stake to private equity firm Permira for $2.25 billion.L Brands (LB) – L Brands raised its fiscal second-quarter earnings guidance, thanks to better-than-expected profit margins and improved sales at its Victoria’s Secret and Bath & Body Works units. Separately, L Brands filed to sell 20 million shares held by founder Leslie Wexner and affiliated stockholders. The company will not receive any proceeds from the sale. L Brands fell 2.1% in the premarket.Jefferies Financial (JEF) – Japan’s Sumitomo Mitsui Financial Group is considering buying a 5% stake in Jefferies for about $380 million, according to multiple reports. Sumitomo did acknowledge it was considering a financial alliance with Jefferies and would announce further details once they are worked out. Jefferies shares rallied 3.5% in premarket trading.Lululemon (LULU) – The apparel maker’s shares rose 1.1% in the premarket after Goldman initiated coverage with a “buy” rating and inclusion on the firm’s “Conviction Buy” list. Goldman said the post-Covid recovery period has been favorable for apparel and strong brands. More

A used car dealership is seen in Laurel, Maryland on May 27, 2021, as many car dealerships across the country are running low on new vehicles as a computer chip shortage has caused production at many vehicle manufactures to nearly stop.Jim Watson | AFP | Getty ImagesPrice increases in used cars, car rentals — as well as a rebound in airfares, lodging and food — are behind the biggest inflation surge since 2008 as the U.S. economy reopens.The consumer price index jumped 5.4% from a year earlier, the largest increase since before the worst of the financial crisis, the Labor Department reported Tuesday. Excluding the volatile food and energy categories, inflation increased 4.5%, the largest move since September 1991. On a monthly basis, headline and core prices rose 0.9% against 0.5% Dow Jones estimates.Looking at item-level data provided by the Bureau of Labor Statistics, prices of used cars and car rentals led the increase in overall prices. The pandemic kept many Americans home last summer, but car rental and sale prices have skyrocketed as many consumers are venturing out of their homes for the first time in months. A global shortage in auto parts and components also exacerbated the price pressures.For the 12-month period, used car and truck prices leaped 45.2%, while car and truck rental costs skyrocketed 87.7%, the Labor Department reported.”Consumers have cash in their pockets and rental car companies are looking to rebuild fleets at a time when auto output is being constrained by component shortages,” ING Economics chief international economist James Knightley said in a note.Bank of America economists believe this may be the peak of used car-price strength as the increase in sticker prices for consumers has now exceeded the jump in wholesale used car prices, which started to moderate in June.Additionally, multiple types of fuel including gasoline, fuel oil and other motor fuels were among the categories that saw the biggest price increases. Gasoline futures have climbed more than 60% this year as Americans have gone on a post-pandemic driving spree.Pricing rebound in airfares, food and lodgingMeanwhile, categories tied to the broad economic comeback from the pandemic also contributed to the surge in inflation.Public transportation, which includes airline fares, recorded a 17.3% jump year over year, while lodging away from home including hotels and motels saw a 16.9% year-over-year burst.During Memorial Day weekend, air traveler volumes hit the highest levels since before the coronavirus pandemic began. And air travel demand is expected to rebound amid the peak vacation season in the summer.Excluding price increases in used cars, new cars, lodging and transportation services, the core CPI would have risen only by 0.18% month over month, which in normal times would be a relatively healthy increase in prices, according to Bank of America.Certain grocery and food item also experienced a price increase as of late. Notably, fresh fruits, limited service meals and snacks and food from vending machines all recorded at least a 5% increase year over year.PepsiCo and Conagra Brands said Tuesday they plan to pass along higher input costs to customers as inflation accelerates. The two cited rising costs for some ingredients, freight and labor.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More