Carson Block says systemic failures within crypto is not surprising
- 1 Carson Block says systemic failures within crypto is not surprising
- 2 JPMorgan management’s `central case’ is for modest recession next year, Credit Suisse says
- 3 Stocks making the biggest early moves: Hibbett, Silvergate Capital and more
- 4 Deutsche Bank upgrades UPS
- 5 Shares of U.S.-listed Chinese companies rise in pre-market trade
- 6 European markets nudge higher as China’s Covid policy takes center stage
- 7 Chinese indexes pop ahead of Covid briefing
- 8 CNBC Pro: Asset manager names 9 ‘cheap’ stocks to buy as recession fears grow
- 9 CNBC Pro: Goldman Sachs names the global automakers exposed to a China slowdown
- 10 Don’t expect dovish language from Federal Reserve Chair Jerome Powell, Trivariate Research’s Adam Parker says
- 11 Investors ramped up bets against crypto-connected firms in November
- 12 Stock futures open flat
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.
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.
— 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.
— Sam Subin
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.
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.
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.”
— 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.
— 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