Finance

In this [email protected] Investor Hall of Famer Richard Bernstein is sounding the alarm on bitcoin.He warns bitcoin is a bubble and crypto fever is pushing investors away from the market groups positioned to grab the biggest gains, particularly oil.”It’s pretty wild,” the CEO and CIO of Richard Bernstein Advisors told CNBC’s “Trading Nation” on Monday. “Bitcoin has been in a bear market, and everybody loves the asset. And, oil has been in a bull market, and it’s basically, you never hear anything about it. People don’t care.”Bernstein, who has spent decades on Wall Street, calls oil the most ignored bull market.”We’ve got this major bull market going on in commodities, and all people are saying is that it doesn’t matter,” he said.WTI crude oil is trading around its highest levels since October 2018. It settled at $70.88 on Monday and is up 96% over the past year.Bitcoin may be up 13% over the past week, but it’s still down 35% over the past two months.Even though bitcoin saw a meteoric rise last year, Bernstein suggests a run back to those levels would be unsustainable. He believes the rush to own bitcoin and other cryptocurrencies has become dangerously parabolic.”Bubbles differ from speculation in that bubbles pervade society. They go outside the financial markets,” he said. “Certainly with cryptocurrencies now, and most likely with most technology stocks, you’re starting to see that happen where people are talking about them at cocktail parties.”Right now, Bernstein is most bullish on companies that aren’t built to innovate or disrupt the economy. He went bearish on technology stocks in 2019.’Your portfolio could suffer a lot'”If you’re on the wrong side of the see-saw over the next year or two years, maybe five years, your portfolio could suffer a lot,” said Bernstein. “The side of that see-saw you want to be on is the kind of pro-inflation side which most people are not investing in.”Bernstein predicts inflation will catch many investors by surprise, but at some point he expects the tide to turn.”In six months or 12 months or 18 months, growth investors are going to be buying energy and materials and industrials because that’s where the growth is going to be,” Bernstein said.Disclaimer More

In this articleJPMJamie Dimon, chief executive officer of JPMorgan Chase & Co.Marlene Awaad | Bloomberg | Getty ImagesJamie Dimon believes cash is king – at least for the time being.JPMorgan Chase has been “effectively stockpiling” cash rather than using it to buy Treasuries or other investments because of the possibility higher inflation will force the Federal Reserve to boost interest rates, Dimon said Monday during a conference. The biggest U.S. bank by assets has positioned itself to benefit from rising interest rates, which will let it buy higher-yielding assets, he said.”We have a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory,” said Dimon, longtime JPMorgan CEO.”If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,” Dimon said. “I do expect to see higher rates and more inflation, and we’re prepared for that.”Dimon waded into the ongoing debate on whether higher inflation is a result of temporary aspects of the reopening, like raw material shortages or supply chain issues, or if it could be more lasting. Fed officials have called the current spike in inflation transitory, meaning temporary and short-lived. But there are increasingly voices, including Deutsche Bank economists and hedge fund billionaires, who warn of consequences should the Fed ignore inflation.Read more from CNBC Pro:How long will rising inflation last? We polled 30 market strategists, and here’s what they saidLater Monday, Morgan Stanley CEO James Gorman told CNBC’s Wilfred Frost on Closing Bell that he, too thinks that higher inflation may be lasting and the Fed may be forced to hike rates earlier than expected.”The question is when does the Fed move?” Gorman said. “It has to move at some point, and I think the bias is more likely earlier than what the current dots suggest, rather than later.”JPMorgan’s move to accumulate cash accounts for about half of the decrease in anticipated net interest income this year, Dimon said. The other half comes from lower credit card balances, he said. The bank now expects $52.5 billion in net interest income in 2021, down from the $55 billion it disclosed in February.In the wide-ranging discussion, Dimon struck on several familiar themes. He warned that banks were under threat from fintech and Big Tech players including PayPal, which has a larger market capitalization than nearly all U.S. banks.Dimon disclosed that the bank’s automated investing service You Invest has garnered about $50 billion in assets, despite the fact that “we don’t even think it’s a very good product yet.”The bank’s second-quarter revenue from trading will be “a little north of $6 billion,” which is lower from the “exceptional” period a year ago, Dimon said. Investment banking revenue is headed about 20% higher than a year ago and could be one of the bank’s best quarters on strength in mergers advice and equity and debt issuance, 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

U.S. stock futures were steady in overnight trading on Monday after the Nasdaq Composite and S&P 500 registered new record highs ahead of the Federal Reserve’s latest monetary policy meeting.Dow futures fell just 20 points. S&P 500 futures were flat and Nasdaq 100 futures ticked 0.09% lower.On Monday, S&P 500 gained 0.2% to close at a new record of 4,255.15. The Dow Jones Industrial Average, however, fell 85 points.The Nasdaq Composite was the relative outperformer, gaining 0.8% to close at an all-time high of 14,174.14. Investors are pouring back into growth stocks as bond yields keep falling. The 10-year Treasury rate hit a three-month low last Friday and hovered around 1.5% on Monday.Bitcoin rose to $40,000 on Monday after Tesla CEO Elon Musk said Sunday that the company will resume bitcoin transactions once it confirms there is reasonable clean energy usage by miners.The Federal Reserve’s two-day policy meeting starts on Tuesday, and it’s a focal point for the markets this week. The central bank is not expected to take any action. However, commentary on interest rates, inflation and the economy could drive market moves.Traders will listen closely for comments on inflation and the Fed’s eventual tapering plans.Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that this Fed meeting could be the most important in Chairman Jerome Powell’s career. Jones also warned that Powell could spark a big sell-off in risk assets if he doesn’t do a good job of signaling a taper.Investors will also be watching for another inflation gauge released on Tuesday. The Producer Price Index — which measure the prices paid to producers as opposed to prices on the consumer level — is expected to rise 0.5% in May, according to Dow Jones estimates. The core PPI — which excludes volatile items like foods, energy and trade services — is also estimated to increase 0.5%.May’s retail sales data are also slated for release at 8:30 a.m. ET. Economists polled by Dow Jones are expecting a drop of 0.6% for last month. Excluding autos, economists expect May’s retail sales rose 0.5%. Retail sales in April were unchanged as the boost from stimulus checks faded.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

In this articleAXPAmerican ExpressAmerican Express, best known for its array of personal and corporate cards, is making a push into territory held by banks and a growing list of fintech players.The card company is launching its first checking account for small businesses by leaning on technology acquired last year in the acquisition of online lender Kabbage, CNBC has learned.The product, called Kabbage Checking, is a no-fee digital account that pays 1.1% interest on up to $100,000 in balances. It includes mobile check deposits, a debit card, bill pay and targeted savings features as well as access to a network of ATMs and retail locations for cash transactions.It’s the latest move to shake up the increasingly competitive world of small business banking. For decades, big U.S. lenders were mostly content to offer bare-bones checking accounts and credit cards to small business owners. Entrepreneurs who needed access to more working capital were often out of luck.That gave rise to online lenders like OnDeck Capital and Kabbage more than a decade ago. More recently, fintech players like Square, Brex and Intuit have rushed to offer small business checking accounts. And banking giants like JPMorgan Chase have been fighting back by rolling out fintech-inspired services and hardware for merchants.Regardless of their starting point, many of the competitors are morphing into all-encompassing providers of cash management, transaction and lending services for small businesses. Key to this strategy is the humble checking account, which enables access to deposits — a foothold to offer complementary services and data on money flows.Kathryn Petralia, co-Founder of Kabbage, which was acquired by American Express last year.Source: American Express”The checking account is sort of the financial operating system for a business, it’s one of the first things a business gets” after being created, Kabbage co-founder Kathryn Petralia said last week in an interview. “With the record number of new businesses being created last year, we think it’s important to help them get products that a brand new business wouldn’t be able to get from a traditional institution.”That’s why AmEx acquired Kabbage in August, reportedly paying as much as $850 million for the start-up. While the New York-based company is the largest issuer of small business cards in the country, executives have acknowledged it needed a digital storefront for a full suite of products beyond just plastic.”We have great cards, we’re an industry leader for small business cards,” AmEX president of global commercial services Anna Marrs said last month at a conference. “It’s when you try to go beyond that that we don’t always have the skills in-house, we don’t always have the products on the shelf.”Competitors, in particular the Silicon Valley firm Brex, have seen surging growth by providing more credit to start-ups than traditional competitors dared and quickly rolling out new products beyond its corporate charge card. Brex, which is ranked No. 6 on the CNBC Disruptor 50 list, more than doubled its valuation this year to $7.4 billion.Kabbage had been close to completing its checking account around the time the coronavirus pandemic struck in the U.S., according to Petralia. Even though AmEx is itself a bank holding company, the checking account is backed by Green Dot, a partner to technology and fintech firms.AmEx is betting that its cardholders may be frustrated with the limitations and fees of traditional banks and open to an alternative. But it also has no minimum balance requirement and offers a relatively high interest rate; most small business checking accounts pay virtually no interest, though they often offer cash sign-on bonuses.Kabbage Checking by American ExpressSource: American ExpressSome U.S. business owners may have soured on Kabbage, however. Months before the takeover, Kabbage abruptly halted lending during the pandemic, slashing some customers’ credit lines. The start-up pivoted to administering Paycheck Protection Program loans, but when AmEx bought Kabbage, it excluded the fintech firm’s loan book.Borrowers who had used Kabbage for the first round of PPP loans had to rely on K Servicing, a new entity, for follow-up loans. That business has garnered less-than-stellar reviews from people desperate for rescue loans.After AmEx completed the Kabbage acquisition, it began piloting the fintech’s services to its cardholders earlier this year. The card company has begun offering credit lines of $1,000 to $150,000 for small businesses, leaning on Kabbage’s automated underwriting software.As part of its cash management platform, the company will be able to deliver insights to users including when to pay vendors and borrow money, Petralia said.”That’s the beauty of having a suite of products that all work together to help customers manage cash flow,” she said. Business owners “are not folks with finance degrees; they’re ordering inventory and making products and dealing with customers. We’re trying to simplify their lives.”AmEx CEO Stephen Squeri told Jim Cramer in an interview set to air Monday evening that he believed the accounts would be a hit with cardholders. “With Kabbage, we’re taking a fintech platform and combining that with a scale business,” Squeri 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

Bank of America CEO Brian Moynihan on Monday detailed the financial firm’s approach to bringing employees back to the office, telling CNBC that those who have received the coronavirus vaccine are the priority for now.In an interview on “Squawk Box,” Moynihan said Bank of America began to ask staff whether they had received a Covid shot a few months ago.”About 60,000 people in the U.S. … have told us that status,” Moynihan said, adding that the number stands around 70,000 for employees outside the U.S.”Now we’re in the process of inviting those people back to work. We give them 30 days-plus notice,” he said. “The basic concept is from now to Labor Day or mid-September, you’re kind of in that transition mode. The idea is the vaccinated teammates should be back to work after Labor Day.”Charlotte, North Carolina-based Bank of America had 212,201 employees as of March 31, the company said in its latest earnings report.Moynihan’s comments Monday came on the same day that Goldman Sachs’ U.S. employees were required to return to the office. In the runup, Goldman required U.S. employees to inform the company of their vaccination status.Companies across Wall Street and corporate America more broadly have adopted various approaches — some more strict than others — to bringing staff back to the office after the coronavirus pandemic last year prompted an unprecedented adoption of remote work.Some have decided to embrace a so-called hybrid model permanently, requiring workers to come into the office a few days per week. Other companies have gone further, allowing most employees to work remotely full-time even after the pandemic ends.Moynihan noted that certain Bank of America employees such as those at bank branches have long been working in person during the pandemic and “done a spectacular job.” For those who are continuing to work remotely, Moynihan said he believes there’s a desire to return to the office.”People want to get back to work,” said Moynihan, whose firm is the second-largest bank in the U.S. by assets. “It was interesting, I was at this wedding over the weekend and a bunch of young kids working in our industry for a competitor, and they’re all … tired of working out of their rooms.”Moynihan said bringing employees back to the office who haven’t been vaccinated against Covid remains a bit tricky. “That’s why we’re concentrating on the vaccinated people,” he said, while emphasizing the importance of controlling coronavirus spread in order for the economic recovery to persist.”The key is not to lose track of the virus vaccine path and the virus infection path. The No. 1 risk to our economy still is that question,” Moynihan said. More

In this article.BBKACartons of Oatly brand oat milk are 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.Lordstown Motors — The electric truck maker’s stock fell 18.8% after announcing CEO Steve Burns and CFO Julio Rodriguez resigned. The moves came just days after Lordstown said it had substantial doubt about its ability to continue as a going concern due to challenges funding the production of its vehicles.Oatly — Shares of the oat milk company dipped 4.7% after a number of Wall Street firms began coverage of the stock. JPMorgan slapped a neutral rating on the company, saying competition is set to increase in the space. Morgan Stanley rated the company equal weight, with Oppenheimer initiating coverage with a perform rating. Other firms, however, are bullish, with Jefferies, Credit Suisse and Piper Sandler putting a buy-equivalent rating on the stock. Shares of Oatly are still up more than 15% for the month. Square — Shares of the payments company rose 5.3% after Deutsche Bank reiterated its buy rating on the stock. “SQ has morphed into a two-sided financial ecosystem that continues to expand total addressable market and beat expectations and we see continued momentum on the horizon,” Deutsche Bank told clients.Philips — Philips shares dropped about 4% after the Dutch medical equipment company issued a recall of ventilators and sleep apnea machines. The company determined that a type of foam used in the devices could degrade and be toxic to users.Chipotle Mexican Grill — Shares of the Mexican chain restaurant climbed 1.7% after Raymond James upgraded the stock to “strong buy” from “outperform.” The Wall Street firm said the company has room to raise prices and the move will boost its financial results. Chipotle said last week that it had hiked menu prices 4% to cover rising wages.Ferrari — Shares of the luxury automaker dipped 2.9% after Goldman Sachs double downgraded the stock to sell from buy. The firm said Ferrari’s pivot to electric vehicles could hurt cash flow in the near term.Royal Dutch Shell – The energy stock traded about 2% higher as Royal Dutch Shell is reportedly considering a sale of shale assets in Texas. The holdings could be worth more than $10 billion. The deal isn’t imminent, but the company is in ongoing talks with buyers.Reddit favorites — Movement in stocks popular on Reddit’s WallStreetBets forum continued on Monday after weeks of volatile trading. AMC Entertainment surged about 15.4%, and ContextLogic jumped 12.7%. Clean Energy Fuels increased 3.4%, whileWendy’s ticked about 1% higher. Meanwhile, Bed Bath & Beyond fell 5.5%, GameStop dipped 1.7%, and Clover Health lost 2.5%, and BlackBerry was 0.9% lower.— CNBC’s Jesse Pound, Maggie Fitzgerald, Pippa Stevens, Yun Li and Tanaya Macheel 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

The Federal Reserve is risking its credibility by keeping policy so loose and allowing inflation to grow in a way that may not be temporary, billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday.This week could see “the most important meeting in [Chairman] Jay Powell’s career, certainly the most important Fed meeting of the past four or five years,” Jones told CNBC’s Andrew Ross Sorkin during a “Squawk Box” interview.That statement comes even though the policymaking Federal Open Market Committee is not expected to change its approach to interest rates, which are near zero, or its $120 billion a month asset purchase program.The Fed’s bond-buying program was intended to create liquidity during the pandemic and keep interest rates low.When the two-day meeting concludes Wednesday, the market expects that at most Fed officials may address the idea of when it will start pulling back on its bond buying.”The reason why [the meeting is so important] is because we’ve had so much incoming data that challenges both their mission and their model,” Jones said. “So how they react to that will be extraordinarily important and I think for investors as to how they should deal with their portfolios going forward.”Specifically, Jones said consecutive consumer price index readings put price pressures well ahead of the Fed’s 2% inflation goal. Fed officials, though, continue to insist that the current readings are transitory and unlikely to persist.”It’s an intellectual incongruity that risks damaging their forecasts if they’re wrong on inflation,” he said.He also cited current trends that show a record 9.3 million jobs are available, a development that he said could allow the Fed to “declare victory” on its employment mandate.”At the same time, right now we’re instead quantitative easing and juicing an economy that’s already red hot,” Jones said.All the Fed easing has come along with more than $5 trillion in congressional stimulus and the possibility of even more coming in infrastructure spending.The consumer price index for May showed headline inflation increasing at a 5% annual clip, the fastest since the financial crisis, while core inflation rose the most since 1992.”You’ve got the craziest mix of fiscal and monetary policy since the Federal Reserve Board was created,” Jones said.”It turned economic orthodoxy upside down, and that’s why this meeting is so important. Things are actually ‘bat-s’ crazy,” he added. “At some point, we have to say, ‘OK, let’s slow down. We’re going to get back in the lane and we’re going to drive like we used to.'”The investment implications are important, he said.Specifically, Jones pointed to the rise of special purpose acquisition companies as well as surges in bitcoin and gold prices, all while the stock market also hovers around record highs.The Fed’s messaging surrounding inflation will be critical for the road ahead, he said.”If they treat these numbers with nonchalance, then I think it’s just a green light to bet heavily on every inflation trade,” Jones 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

American consumers are spending more freely as the economy continues to open up, according to Bank of America CEO Brian Moynihan.Transaction volumes on customers’ credit and debit cards and over the Zelle payment network has grown by 20% so far this year compared to this point in 2019, Moynihan told CNBC’s Becky Quick Monday on CNBC’s “Squawk Box.” The comparison excludes 2020, an abnormal year in many respects because the onset of the pandemic led to widespread stay-at-home orders.”People got a lot of stimulus money and they’ve been spending it,” Moynihan said. “The unemployment rate is coming down and people are going back to work. People can go to amusement parks, they can go on an inside-the-U.S. trip, they can go out to eat. You’re seeing everything open.”When lawmakers passed President Joe Biden’s stimulus bill in March, the total amount of coronavirus stimulus reached $5 trillion, a massive response to an unprecedented situation. That helped the country avoid the wave of borrower defaults across credit-cards, mortgages and auto loans that was expected at the onset of the pandemic.Nearly all spending categories have recovered with the exception of travel, which is still as much as 15% lower than in 2019, Moynihan said. Bank of America is the second biggest U.S. bank by assets after JPMorgan Chase and has relationships with roughly half of American households.Stimulus checks and bolstered unemployment benefits have pumped up customers’ checking accounts, Moynihan said. Accounts with about $1,000 to $2,000 in average balances are “up 6 to 7 times what they were before the pandemic,” he said.”They’re starting to spend a little of that money,” Moynihan said. “The money’s still there and they’re spending as they have opportunities.”During the wide-ranging interview, Moynihan said that cybersecurity spending at his bank has climbed from around $300 million annually when he started as CEO to well over $1 billion a year.He also said that 60,000 employees in the U.S. have informed the bank of their vaccination status and are being invited back to office work, a process that will continue through Labor Day.This story is developing. Please check back for updates.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