Daily News Portal

S&P 500 opens flat as Wall Street struggles to recover from Monday’s sell-off

Home prices rise less than expected

An index surveying home prices in a basket of 20 U.S. cities showed a smaller year-over-year increase than anticipated by analysts.

The 20-city composite of the the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 10.4% year-over-year gain in September. That’s a cooler increase than the 10.9% expected by analysts polled by Dow Jones.

It also reflects a smaller year-over-year increase compared with the prior month. August saw prices up 13.1% in the month compared with the same one a year before.

Of the 20 cities, Miami saw the largest year-over-year gain at 24.6% compared with the same month a year ago.

— Alex Harring

Roku shares fall more than 4% amid KeyBanc downgrade citing challenging road to profitability

Roku shares tumbled 4.1% before the bell following a KeyBanc Capital Markets downgrade of the streaming stock to sector weight from overweight.

The firm highlighted a slew of threats to the company’s profitability outlook among the reasons for the sentiment shift.

“Roku appears to be ceding market share, and has greater tech debt in its [advertising technology] stack than we envisioned,” wrote analyst Justin Patterson. “As resolving these issues requires sustained investment, we believe consensus is too optimistic on 2023E/2024E revenue and gross profit growth.”

CNBC Pro subscribers can read the full story here.

— Samantha Subin

Copper on pace for best month in more than a year

Copper prices have gained 8.6% since the start of the month, putting it on track for its best monthly performance since April 2021.

If copper remains positive through the end of November, it would be its first positive month in the last eight.

Meanwhile, nickel has added 20.9% and is poised for its best monthly performance since March, when it gained 32.2%.

Aluminum has gained 7% so far in November, on track for its strongest month since February. That month, it gained 11.5%.

— Alex Harring

Carson Block says systemic failures within crypto is not surprising

Short seller Carson Block said the fallout in the crypto industry didn’t come as a surprise to him.

“This is a whole edifice that was built on a lot of leverage and there are probably just so many cockroaches hidden within the wall,” the CIO of Muddy Waters Capital said on CNBC’s “Squawk Box.” “The fact that you see these systemic failures within the crypto is not surprising to me given how much leverage existed between these firms.”

Distressed crypto firm BlockFi filed for Chapter 11 bankruptcy protection following the implosion of putative acquirer FTX. BlockFi had already halted withdrawals of customer deposits and admitted that it had “significant exposure” to the now-bankrupt crypto exchange FTX and its sister trading house, Alameda Research.

— Yun Li

JPMorgan management’s `central case’ is for modest recession next year, Credit Suisse says

Daniel Pinto, JPMorgan’s chief executive of corporate and investment bank.

Simon Dawson | Bloomberg | Getty Images

JPMorgan Chase is preparing for a recession that starts in 2023 as the most likely current path for the U.S. economy, Credit Suisse analyst Susan Roth Katzke said Tuesday in a research note.

The New York-based bank’s management considers that its “central case” for the upcoming year, with a so-called soft landing or a severe crisis seen as less likely, Katzke said after meeting with JPMorgan President and Chief Operating Officer Daniel Pinto last week.

The recession scenario is likely to either be a mild downturn in 2023 that sees the Federal Reserve’s benchmark lending rate hit about 5%, or a deeper contraction “occurring somewhat later” that would stretch into 2024 and would see the Fed raising rates to as high as 6%, Katzke said.

JPMorgan’s earning power, reserves for loan losses, diverse business lines and moves to lower risk “ought to render JPMorgan well prepared and well positioned to manage through” the expected downturn, she said.

The bottom line is that the bank wasn’t wavering from its target of a 17% return on tangible common equity, said Katzke.

She reaffirmed her “outperform” rating on JPMorgan shares and her $145 price target and kept her EPS estimates unchanged.

—Hugh Son

Stocks making the biggest early moves: Hibbett, Silvergate Capital and more

These are the stocks making the biggest moves in pre-market trading:

  • Hibbett: The sporting goods retailer’s stock slid 5.7% in the premarket after it missed top and bottom line estimates for its latest quarter.  The company said it was hit by higher expenses that cut into its profit margins, although the company did reaffirm its full-year forecast.
  • Silvergate Capital: The digital assets bank’s shares fell another 2.4% in the premarket, extending yesterday’s 11.1% loss.  Yesterday’s decline followed the bankruptcy filing by cryptocurrency lender BlockFi, and the further drop for Silvergate comes despite a statement that it has minimal exposure to BlockFi.
  • Chemours: Chemours tumbled 6.1% in premarket trading after the chemical maker said its full-year adjusted earnings were tracking slightly below the low end of its prior guidance range. It pointed to a significant decline in demand for titanium dioxide, particularly in Europe and Asia.
  • Generac: Generac fell 2.6% in premarket action after Jefferies downgraded the stock to “underperform” from “hold,” citing the potential impact of electric vehicle bidirectional charging on sales of Generac’s backup power products.

See the full list here.

— Peter Schacknow, Alex Harring

Deutsche Bank upgrades UPS

Deutsche analyst Amit Mehrotra upgraded UPS to buy from hold, noting that macro concerns surrounding the stock are now priced in.

“In the near-term, we think market participants are overly focused on volume growth and not on mix and productivity initiatives, which we think can drive positive revenue growth and solid contribution margins despite modestly lower domestic volumes by market participants,” he wrote in a note Monday.

UPS shares rose more than 1% in the premarket.

CNBC Pro subscribers can read the full story here.

— Sam Subin

Shares of U.S.-listed Chinese companies rise in pre-market trade

U.S.-listed shares of Chinese technology companies rose in pre-market trade after Chinese health authorities reported a recent uptick in senior vaccination rates.

Alibaba rose 5.6%, JD.com rose 7.43% in pre-market trading, while Pinduoduo rose 5.08% and Baidu rose 5.39%. Bilibili rose more than 10%.

Hong-Kong listed tech companies also surged after the press briefing by health authorities — the wider Hang Seng Tech index ended its session more than 7.6% higher.

– Jihye Lee

European markets nudge higher as China’s Covid policy takes center stage

European markets were slightly higher on Tuesday as investors continued to monitor news from China over Covid restrictions.

The pan-European Stoxx 600 was up 0.3% in early trade, with basic resources adding 1.6% to lead gains while chemicals fell 0.7%.

Stocks in Hong Kong jumped more than 5% by afternoon trade, leading gains in the Asia-Pacific region alongside Chinese indexes, as Chinese health authorities encouraged the country’s elderly to get vaccinated.

Chinese indexes pop ahead of Covid briefing

Indexes in China jumped more than 2% as investors closely watched for developments in the nation’s zero-Covid policy after seeing losses in the previous session.

China’s CSI 300 index rose 2.97% in the morning session, while the Shanghai Composite climbed 2.2%. The Shenzhen Component Index gained 2.172%.

Local media reported that the Chinese State Council will hold a press conference on Covid measures at 3 p.m. local time, or 2 a.m. ET.

The nation saw a drop in the number of daily infections for the first time in more than a week.

– Evelyn Cheng, Jihye Lee

CNBC Pro: Asset manager names 9 ‘cheap’ stocks to buy as recession fears grow

It’s “critical” for investors to be looking at valuations right now as a recession is looming and inflation looks likely to continue, said Steven Glass, managing director of Pella Funds Management.

In this environment, Glass selected a list of nine stocks that he said, “look particularly cheap given their growth outlook.”

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: Goldman Sachs names the global automakers exposed to a China slowdown

Many global companies are heavily exposed to China, including some of the world’s biggest automakers, which generate between 20% and 40% of their worldwide sales in the country, according to Goldman Sachs.

In a note to clients on Nov. 22 — before the latest protests — the investment bank mapped out the global auto industry’s exposure to Chinese consumers.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Don’t expect dovish language from Federal Reserve Chair Jerome Powell, Trivariate Research’s Adam Parker says

Investors shouldn’t expect a dovish tone out of Federal Reserve Chair Jerome Powell this Wednesday, according to Trivariate Research’s Adam Parker. Powell is scheduled to speak at the Hutchins Center on Fiscal and Monetary Policy at Brookings.

“There’s no way he’s going to get dovish language in the near term, in my view. So we had a fake dovish rally, but we’re not going to get, ‘we’re pivoting here and we’re slowing,'” Parker said Monday on CNBC’s “Closing Bell: Overtime.”

“There’s too many places where they’ve got to try to control inflation,” he added. “I would be surprised if they got dovish.”

— Sarah Min

Investors ramped up bets against crypto-connected firms in November

Investors raised their bets against stocks connected to crypto during the first half of November, according to FactSet data.

As of Nov. 15, short interest in business intelligence company MicroStrategy, which has bought bitcoin, spiked 15% to 3.8 million shares, which is about 40% of their total float. Short interest as a percentage of float refers to the amount of shares available for trading that are being bet against the company.

Meanwhile, short interest in Marathon Digital, which mines cryptocurrencies, rose more than 18% to 38.5 million shares, or about 35% of its total float.

Other companies that experienced a surge in short interest include Beauty Health Company, which saw short interest jump 26% to 32.8 million shares as of mid-November or 32% of float. Meanwhile, short interest in Groupon rebounded 10% to 5.3 million shares or 28% of float. Short interest in the e-commerce name had declined in the latter half of October.

— Sarah Min, Nicholas Wells

Stock futures open flat

U.S. stock futures were flat on Monday night after the major averages came under pressure from Covid protests in China, and as investors anticipated more economic data and commentary from Federal Reserve leaders this week.

Dow Jones Industrial Average futures fell by 11 points, or 0.03%. S&P 500 and Nasdaq 100 futures climbed 0.03% and 0.04%, respectively.

— Sarah Min

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