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Business

A tangled market web of Tesla-bitcoin-ARK Investment could spell trouble for investors, warns strategist

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Tuesday is shaping up to be a tough one for technology stocks, after a selloff greeted investors to start the week.

The Nasdaq Composite
COMP,
-2.03%
— up 40% over the past 12 months — tumbled 2.5% on Monday over concerns rising bond yields could make those tech stocks look pricey. When so-called “risk-free” yields are climbing, it is that much tougher to justify equity valuations that seem lofty.

Leading techs lower in premarket is electric-car maker Tesla
TSLA,
-5.41%,
down 6% after a roughly 8% drop on Monday. Our call of the day comes from Saxo Bank’s head of equity strategy, Peter Garnry, who has been warning clients that Tesla is tangled up in a “risk cluster” that involves bitcoin and Cathie Wood’s ARK Investment Management firm.

Tesla announced a $1.5 billion bitcoin investment earlier this month. Along with Tesla weakness, bitcoin was down 10% early Tuesday, which some attributed to criticism from Treasury Secretary Janet Yellen (see below). That crypto drop will “obviously illustrate the earnings volatility that Elon Musk has delivered to Tesla,” said Garnry.

Read: Tesla bitcoin gambit already made $1 billion, more than 2020 profit from car sales, estimates analyst

Meanwhile, Tesla “is also the biggest position across all ARK Invest ETFs which added pressure to its biggest fund the ARK Disruptive Innovation Fund
ARKK,
-6.11%
losing 6% yesterday. This is exactly the risk cluster that we have been worrying about and wrote about two weeks ago,” said the strategist.

Read: Stocks aren’t in a bubble, but here’s what is, according to fund manager Cathie Wood

In the Saxo note that deep-dived into the hugely popular, actively managed fund’s holdings, Garnry highlighted ARK’s concentration in biotech names that he said could be risky if the market decides to reverse. And Tesla shares represents 6.7% of total assets under management across ARK’s five actively managed ETFs, according to the data Saxo crunched two weeks ago.

“What it means is, that a correction in equities for whatever reasons, could be higher interest rates or prolonged COVID-19 lockdowns, could set in motion selloffs across either biotechnology stocks or Tesla shares and cause performance to deteriorate which could start net outflow of AUM and then the feedback loop has started,” said Garnry, at the time.

For her part, Wood, the chief executive of ARK Invest and manager of the popular ARK Innovation exchange-traded fund, last week said she was surprised by how fast companies are adopting bitcoin, and that her “confidence in Tesla has grown.”

The markets

Stocks
DJIA,
-0.43%

SPX,
-0.78%

COMP,
-2.03%
are selling off, led by techs, with European stocks
SXXP,
-0.49%
sinking apart from some travel stocks. Asian markets had a mixed day
000300,
-0.32%.
Oil prices
CL00,
-0.19%
are rising, while the closely watched yield on the 10-year Treasury note
TMUBMUSD10Y,
1.360%
is trading at around 1.35%.

The chart

Treasury Secretary Yellen may have let some steam out of bitcoin
BTCUSD,
-13.19%
after repeating some concerns about the cryptocurrency in an interview with the New York Times’ Dealbook. Bitcoin was last down 13% to $48,886, taking a bunch of other cryptos down with it.

The buzz

All eyes on Federal Reserve Chair Jerome Powell, who is kicking off two-day testimony on Capitol Hill. With more than 10 million Americans still jobless, “Mr. Powell will go out of his way, I am sure, to put tapering to bed and rightly so, as I dread to think what a taper-tantrum of the 2020s will look like,” said Jeffrey Halley, senior market analyst, Asia Pacific, Oanda.

We’ll also get the latest home-price indexes from S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency, along with an update on consumer confidence.

Shares of home-improvement retailer Home Depot
HD,
-4.49%
are dropping despite upbeat results.

Shares of special-purpose acquisition company Churchill Capital
CCIV,
-31.65%,
also known as a blank-check company, are sinking. After weeks of rumors, Churchill finally announced a deal to buy electric-vehicle company Lucid Motors.

Mourning 500,000-plus American lives lost to COVID-19, President Joe Biden observed a moment of silence late on Monday and urged the public to “mask up.”

Social-media group Facebook
FB,
+0.83%
says it will restore links to news articles in Australia, five days after proposed media law changes in the country.

Random read

“I can mouth obscenities at people and they don’t have a clue.” Redditors on pandemic positives.

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Business

Stronger economic data could power stocks that thrive in a rebound in the week ahead

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The bull of Wall Street is seen during the pass of the snowstorm on January 31, 2021 in New York City.

Eduardo MunozAlvarez | VIEW press | Corbis News | Getty Images

A decline in new Covid infections, along with improving economic data and stimulus hopes, could boost stocks that flourish in a resurging economy in the week ahead.

In the past week, expectations for a strong economic rebound helped boost interest rates.

While the broader stock market was choppy, sectors that do well in a rebound – financials, airlines and industrials – stood out as leaders. This is known as the reflation trade.

Those stocks gained at the expense of growth and technology, down 2%. Strategists expect that reflation trade to continue as signs suggest that the economy could make a sharp comeback.

The S&P 500 was down 0.7% on the week to 3,906, while the Dow was up a tiny 0.1% at 31,494. The Nasdaq was off 1.57% for the week, to 13,874, with the decline in tech. Apple, for instance, gave up 4% on the week.

The big event in the week ahead is testimony from Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday and the House Financial Services Committee Wednesday.

He is expected to discuss the increase in interest rates, as well as concerns that inflation could begin to take off.

“He’s going to have to acknowledge that the data is improving and the virus situation is improving quite materially,” said Mark Cabana, head of U.S. rates strategy at Bank of America. “It is going to be hard for him to sound as dovish as he has been.”

But Powell is expected to continue to emphasize that the Fed will keep rates low for a long time and maintain its easy policies to help the economy.

Improving forecasts

Economists this past week ratcheted up tracking forecasts for first quarter gross domestic product, fueled in part by an unexpectedly sharp jump of 5.3% in January retail sales.

Goldman upped first-quarter growth to 6%, and Morgan Stanley said it was tracking at 7.5% for the first quarter. Economists linked the surprise gain in retail sales to stimulus checks sent to individuals under the last $900 billion stimulus program approved by Congress in late December.

The Biden administration has proposed another $1.9 trillion Covid relief package. That could come before the House of Representatives in the coming week.

“[Powell’s] going to stick to the script. The script is lawmakers need to continue to provide support for the economy. He’s going to be supportive of the administration’s effort to get a big package through,” said Mark Zandi, chief economist at Moody’s Analytics.

Key data during the week

Earnings continue to be important. There are more than 60 companies reporting, including Home Depot, Macy’s and TJX.

Key economic reports dropping next week include durable goods on Thursday, along with personal income and spending data on Friday

The Friday report includes the personal consumption expenditure price index, which the Fed monitors. The market is on the lookout for signs of rising inflation.

“I think the boom is going to start sooner than most people think,” said Ed Keon, chief investment strategist at QMA.

He said the stronger economy is helping drive Treasury yields higher, with the 10-year hitting a one-year high of 1.36% on Friday. Keon said the vaccine rollout is helping the outlook, as is the slowing spread of the virus.

“I think people were expecting a second-half boom, but I think the second quarter is going to be very strong, as people change their behavior,” he said.

“The caution when it comes to savings and not going out, that’s going to go away sooner than we think,” Keon said. “Right now, you might see a 10% GDP number in the second or third quarter. That’s also due to the fact we’re likely to get a big stimulus package.”

He said investors are underestimating the surge in economic activity that should start in March and pick up steam in the second and third quarter as more people resume dining out and other activities.

“I think the world is going to look very different than it has over the past 12 months. We’re still bullish. We’re still overweight stocks,” Keon said.

He said a flood of money could hit the economy.

“The size of the U.S. economy last year was about $21 trillion,” Keon added. “Households now have excess savings of about $1.5 trillion and the stimulus package probably will be in the vicinity of $1.2, $1.6 trillion.”

He said the service sector should start to see a benefit that has been lifting the goods making side of the economy. “You’re going to see an incredible boom.”

Week ahead calendar

Monday 

Earnings: Dish Network, Royal Caribbean, Marathon Oil, Ingersoll-Rand, Occidental Petroleum, Transocean, Zoominfo, ONEOK, HSBC

10:00 a.m. Leading economic indicators

Tuesday

Earnings: Home Depot, Macy’s, Intuit, Thomson Reuters, Square, Toll Brothers, Jazz Pharmaceuticals, McAfee, Medtronic, Pioneer Natural Resources, Bank of Montreal

9:00 a.m. FHFA home prices

9:00 a.m. S&P/Case-Shiller home prices

10:00 a.m. Fed Chairman Jerome Powell semi-annual economic testimony Senate Banking Committee

Wednesday

Earnings: Lowe’s, NVIDIA, Viacom, Public Storage, Booking Holdings, TJX, Brookdale, Royal Bank of Canada, Apache, Petrobras, Pure Storage, L Brands, Casper Sleep

7:00 a.m. Mortgage applications

10:00 a.m. New home sales

10:00 a.m. Fed Chairman Powell semi-annual economic testimony at House Financial Services Committee

Thursday

Earnings: Salesforce.com, Norwegian Cruise Lines, Etsy, Best Buy, HP, Shake Shack, Beyond Meat, Anheuser-Busch Inbev, Dell Technologies, Virgin Galactic, American Tower, Cleveland Cliffs, Airbnb, Carvana, Door Dash

8:30 a.m. Atlanta Fed President Raphael Bostic

8:30 a.m. Jobless claims

8:30 a.m. Durable goods

8:30 a.m. Q4 GDP second reading

10:00 a.m. Pending home sales

10:00 a.m. Advanced economic indicators

10:00 a.m. St. Louis Fed President James Bullard

3:00 p.m. New York Fed President John Williams

Friday

Earnings: Fluor, Cinemark, Draft Kings, Foot Locker, AMC Networks

8:30 a.m. Personal income and spending

8:30 a.m. Advanced trade

9:45 a.m. Chicago PMI

10:00 a.m. Consumer sentiment

Saturday

Earnings: Berkshire Hathaway

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Business

5 things to know before the stock market opens Feb. 19, 2021

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Here are the most important news, trends and analysis that investors need to start their trading day:

1. Dow futures bounce after biggest one-day February loss

The Wall Street sign is seen outside The New York Stock Exchange (NYSE) in New York, February 16, 2021.

Brendan McDermid | Reuters

U.S. stock futures rose Friday after the Dow Jones Industrial Average, S&P 500 and Nasdaq suffered their biggest one-day losses in the red-hot month of February. The Dow, which broke a three-day winning streak and fell from a record closing high, remained on track for a positive week, which would be its third straight. The S&P 500 and Nasdaq are riding three-day losing streaks and are on pace for their first losing weeks in the past three.

Bitcoin — which topped $52,000 this week — hit another all-time high early Friday near $53,000 per unit. After Tesla and other companies recently showed support for the world’s biggest cryptocurrency, major financial firms also appeared to be warming to it. Treasury Secretary Janet Yellen told CNBC on Thursday she believes bitcoin is a “highly speculative asset.”

2. Treasury Secretary Yellen pushes for major Covid stimulus

Treasury Secretary Janet Yellen speaks during a virtual roundtable event with participants from local Black Chambers of Commerce on February 5, 2021 in Washington, DC.

Drew Angerer | Getty Images

As the House aims to pass its version of President Joe Biden’s $1.9 trillion coronavirus relief blueprint by the end of next week, Yellen told CNBC that a large stimulus package is necessary to get the economy back to full strength. “The price of doing too little is much higher than the price of doing something big,” she said.” We think that the benefits will far outweigh the costs in the longer run.” Democrats hope to get their bill through Congress before March 14, when key federal jobless benefit programs expire.

3. Biden to pledge billions in global Covid vaccination aid

President Joe Biden speaks during a meeting with labor leaders on coronavirus relief in the Oval Office on Wednesday, Feb. 17, 2021.

Pete Marovich | Bloomberg | Getty Images

Biden is expected to announce Friday that the U.S. will spend $4 billion on international Covid vaccination efforts. He will make the pledge during his first virtual meeting as president with G-7 leaders. Biden will also urge other nations to put more money toward the global fight against the pandemic.

Later in the day, Biden travels to Michigan to visit Pfizer’s vaccine manufacturing facility in Kalamazoo, a trip that was supposed to happen Thursday but was postponed due winter weather. Biden made his first domestic trip as president Tuesday, traveling to Wisconsin for a CNN town hall on the coronavirus.

4. Uber is dealt a major blow as UK’s top court rules drivers are workers

A driver uses the Uber app to drop off a passenger in London.

Chris J. Ratcliffe | Bloomberg via Getty Images

Shares of Uber dropped 3% in the premarket after the U.K.’s top court ruled Friday that the company’s drivers there should be classified as workers rather than independent contractors. The ruling ends an almost five-year legal battle between Uber and a group of former drivers in Britain. Uber insists its drivers are self-employed and that it acts as more of an “agency” that connects them with passengers through an app. The company weathered a challenge in its home market of California in November, when voters backed a ballot proposal that cemented app-based food delivery and ride-hailing drivers’ status as independent contractors, not employees.

5. Citadel’s Ken Griffin defends controversial Wall Street practice

Ken Griffin, Founder and CEO, Citadel

Mike Blake | Reuters

During Thursday’s GameStop hearing on Capitol Hill, Citadel’s Ken Griffin defended a controversial method brokerages use to make money and said his firm would adapt if new regulations prohibited the practice. Members of Congress spent much of their time prodding about “payment for order flow,” a practice in which a brokerage receives payment from a market maker like Citadel for directing the order to them. This model is how Robinhood and other brokers are able to offer commission-free trading. “I do believe that payment for order flow has been an important source of innovation in the industry,” Griffin said.

— Reuters contributed to this report. Follow all the developments on Wall Street in real time with CNBC Pro’s live markets blog. Get the latest on the pandemic with our coronavirus blog.

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Business

Dow futures up 180 points as stocks look to add to record levels

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Pedestrians walk in snow past the Wall Street subway station near the New York Stock Exchange.

Michael Nagle | Bloomberg | Getty Images

Futures contracts tied to the major U.S. stock indexes rose in extended trading Monday evening after finishing strong last week.

Dow futures rose 180 points, suggested an implied open of about the same magnitude, while S&P 500 contracts added 19.25 points, or 0.5%. Nasdaq 100 futures gained 67.5 points, or 0.5%.

The U.S. stock market was closed on Monday for Presidents Day.

The major averages finished last week with decent gains even as February’s rally appeared to cool off somewhat. The blue-chip Dow Jones Industrial Average posted two little changed days, while the S&P 500 swung within 0.2% for three days in a row.

Still, the S&P 500 finished the week with a gain of 1.2%, while the Dow added 1%. The tech-heavy Nasdaq Composite rose 1.7%. All three closed at record levels on Friday.

Stock strategists say the rollout of the Covid-19 vaccine, economic reopening and expectations for more fiscal stimulus are key to the market’s buoyant February thus far.

“Covid is far from defeated, but the path toward economic normalization is clearer as more vaccines that reduce hospitalizations and eliminate fatalities are approved,” Dennis DeBusschere, strategist at Evercore ISI, said in an email.

“Treasury Secretary [Janet] Yellen’s forceful arguments for additional stimulus followed by Fed Chair [Jerome] Powell describing maximum employment as ‘our national goal’ helped lift bond yields, inflation expectations, and oil prices last week,” he added.

The Dow has gained 4.9% in February, while the S&P 500 and the Nasdaq have rallied 5.9% and 7.8%, respectively. The S&P 500 has raked in ten record closes in 2021.

Pedestrians walk past a snow covered bull sculpture during a late season nor’easter in New York.

Lucas Jackson | Reuters

Still, DeBusschere warned that rising interest rates and an uncertain policy outlook could keep trading from growing too frothy in the near term and recommended investors stick to cyclical stocks that could see the most upside as the U.S. economy recovers.

Those so-called cyclical sectors, those most sensitive to an economic rebound, have led the rally in February. Energy is up more than 13% month to date, with financials and materials also among the leading sectors.

Freezing weather in regions across the U.S. sparked another rally in energy futures on Monday and put West Texas Intermediate crude contracts above $60 a barrel for the first time since the early days of the coronavirus pandemic.

In corporate news, CVS Health, Occidental Petroleum, Palantir and others will report earnings on Tuesday.

Executives from Robinhood, Melvin Capital and Citadel are scheduled to testify before the House Financial Services Committee on Thursday. Lawmakers are likely to grill the group on the wild trading in GameStop and other heavily shorted equities.

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Business

Despite surging stocks and home prices, U.S. inflation won’t be a problem for some time

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When America’s amusement parks and baseball stadiums no longer must serve as COVID-19 mass vaccination sites, some investors believe that households pocketing pandemic financial aid from the government might start to splurge.

While a consumer splurge could initially boost the parts of the economy devastated by the pandemic, a bigger concern for investors is that a sustained spending spree also could cause prices for goods and services to rise dramatically, dent financial asset values, and ultimately raise the cost of living for everyone.

“I don’t think inflation is dead,” said Matt Stucky, equity portfolio manager at Northwestern Mutual Wealth Management Company. “The desire by key policy makers is to have it, and it’s the strongest it’s ever been. You will see rising inflation.”

Wall Street investors and analysts have become fixated in recent weeks on the potential for the Biden Administration’s planned $1.9 trillion fiscal stimulus package that targets relief to hard-hit households to cause inflation to spiral out of control.

Economists at Oxford Economics said on Friday they expect to see the “longest inflation stretch above 2% since before the financial crisis, but it’s unlikely to sustainably breach 3%.”

Severe inflation can hurt businesses by ratcheting up costs, pinching profits and causing stock prices to fall. The value of savings and bonds also can be chipped away by high inflation over time. 

Another worry among investors is that runaway inflation, which took hold in the late 1970s and pushed 30-year mortgage rates to near 18%, could force the Federal Reserve to taper its $120 billion per month bond purchase program or to raise its benchmark interest rate above the current 0% to 0.25% target sooner than expected and spook markets.

At the same time, it’s not far-fetched to argue that some financial assets already have been inflated by the Fed’s pedal-to-the-metal policy of low rates and an easy flow of credit, and might be due for some cooling off.

U.S. stocks, including the Dow Jones Industrial Average
DJIA,
+0.09%,
S&P 500 index
SPX,
+0.47%
and Nasdaq Composite
COMP,
+0.50%
closed on Friday at all-time highs, while debt-laden companies can now borrow in the corporate “junk” bond, or speculative-grade, market at record low rates of about 4%.

Read: Stock market stoked by stimulus hopes — what investors are counting on

In addition to rallying stocks and bonds, home prices in the U.S. also have gone through the roof during the pandemic, despite the U.S. still needing to recoup almost as many jobs from the COVID-19 crisis as during the worst of the global financial crisis in 2008.

This chart shows that jobs lost to the pandemic remain near to levels seen in the aftermath of that last crisis.

Job losses need to be tamed


LPL Research, Bureau of Labor Statistics

Fed Chairman Jerome Powell said Wednesday that he doesn’t expect a “large or sustained” outbreak of inflation, while also stressing that the central bank remains focused on recouping lost jobs during the pandemic, as the U.S. looks to makes serious headway in its vaccination program by late July. 

Treasury Secretary Janet Yellen on Friday reiterated a call on Friday that the time for more, big fiscal stimulus is now.

“Broadly, the guide is, does it cost me more to live a year from now than a year prior,” Jeff Klingelhofer, co-head of investments at Thornburg Investment Management, said about inflation in an interview with MarketWatch.

“I think what we need to watch is wage inflation,” he said, adding that higher wages for upper income earners were mostly flat for much of the past decade. Also, many lower-wage households hardest hit by the pandemic have been left out of the past decade’s climb in financial asset prices and home values, he said.

“For the folks who haven’t taken that ride, it feels like a perpetuation of inequality that’s played out for some time,” he said, adding that the “only way to get broad inflation is with a broad overheating of the economy. We have the exact opposite. The bottom third are no where near overheating.”

Klingelhofer said it’s probably also a mistake to watch benchmark 10-year Treasury yields for signs that the economy is overheating and for inflation since, “it’s not a proxy for inflation. It’s just a proxy for how the Fed might react,” he said.

The 10-year Treasury yield
TMUBMUSD10Y,
1.209%
has climbed 28.6 basis points in the year to date to 1.199% as of Friday.

But with last year’s sharp price increases, is the U.S. housing market at least at risk of overheating?

“Not at current interest rates,” said John Beacham, the founder and CEO at Toorak Capital, which finances apartment buildings and single family rental properties, including those going through rehabilitation and construction projects.

“Over the course of the year, more people will go back to work,” Beacham said, but he added that it’s important for policy makers in Washington to provide a bridge for households through the pandemic, until spending on socializing, sporting events, concerts and more can again resemble a time before the pandemic.

“Clearly, there likely will be short-term consumption increase,” he said. “But after that it normalizes.”

The U.S. stock and bond markets will be mostly closed on Monday for the Presidents Day holiday.

On Tuesday, the only tidbit of economic data comes from the New York Federal Reserve’s Empire State manufacturing index, followed Wednesday by a slew of updates on U.S. retail sales, industrial production, home builders data and minutes from the Fed’s most recent policy meeting. Thursday and Friday bring more jobs, housing and business activity data, including existing home sales for January.

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Business

Microsoft, BlackBerry, GE, Leon Black – 5 Things You Must Know

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Here are five things you must know for Tuesday, Jan. 26:

1. — Stock Futures Move Higher on Solid Earnings

Stock futures moved mostly higher Tuesday following solid earnings reports from Johnson & Johnson  (JNJ) – Get Report, 3M  (MMM) – Get Report and General Electric  (GE) – Get Report.

Equities had wavered for most of the premarket session on the possibility that a U.S. coronavirus relief package could be delayed. 

Contracts linked to the Dow Jones Industrial Average rose 56 points, S&P 500 futures rose 2 points and Nasdaq futures were down 7 points ahead of earnings reports from some of the biggest tech companies.

Senate Majority Leader Chuck Schumer said Monday an aid package was unlikely before mid-March. That is when federal unemployment benefits authorized by last $900 billion package will expire.

President Joe Biden said he was open to negotiations on his proposed $1.9 trillion plan to send $1,400 to most Americans and deliver other support for the economy, including funds for vaccine distribution.

A bipartisan group of senators already have voiced opposition to the size of Biden’s plan.

The coronavirus pandemic, meanwhile, has killed more than 421,000 in the U.S. and concerns have been growing about the bumpy rollout of vaccines in the country. Biden said he anticipates vaccines will be available to anyone in the U.S. by spring, but to meet that projection vaccine makers will have to sharply increase production.

Stocks finished mixed on Monday amid questions about whether the Biden White House will be able to deliver another round of stimulus. The S&P 500 and Nasdaq, however, did manage to close at record highs.

2. — Tuesday’s Calendar: Microsoft and AMD Earnings, Federal Reserve Meeting

General Electric  (GE) – Get Report reported fourth-quarter adjusted earnings of 8 cents a share, 1 cent below analysts’ estimates. Total revenue of $21.93 billion topped forecasts.

Johnson & Johnson  (JNJ) – Get Report posted stronger-than-expected fourth- quarter earnings and said Tuesday it would provide an update on its vaccine development progress “soon.”

“We continue to progress our Covid-19 vaccine candidate and look forward to sharing details from our Phase 3 study soon. Johnson & Johnson was built for times like these, and I am extremely confident in our ability to deliver lasting value and continued innovation in 2021 and for years to come,” said CEO Alex Gorsky.

Earnings reports are also expected Tuesday from Microsoft  (MSFT) – Get Report, Advanced Micro Devices  (AMD) – Get Report, Starbucks  (SBUX) – Get Report, Verizon  (VZ) – Get Report, Lockheed Martin  (LMT) – Get Report, American Express  (AXP) – Get Report, 3M  (MMM) – Get Report, Xilinx  (XLNX) – Get Report, Raytheon Technologies  (RTX) – Get Report and Texas Instruments  (TXN) – Get Report.

Microsoft, Advanced Micro Devices and Starbucks are holdings in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

The U.S. economic calendar on Tuesday includes the first day of a two-day meeting of the Federal Reserve. The central bank isn’t expected to move on interest rates and has signaled it will keep them near zero through 2023.

Mark Heppenstall, chief investment officer at Penn Mutual Asset Management, said the central bank likely will reiterate its “commitment to prolonged monetary accommodation” at the meeting.

“Uncertainty surrounding the pandemic’s near-term course and signs of weakening labor markets suggest recent taper talk by Fed officials is still premature,” Heppenstall added, referring to when the Fed might  begin tapering asset purchases.

The calendar also includes the Case-Shiller Home Price Index for November at 9 a.m. ET and Consumer Confidence for January at 10 a.m.

3. — Leon Black Will Step Down as CEO of Private-Equity Giant Apollo

Leon Black, the founder and CEO of private-equity giant Apollo Global Management  (APO) – Get Report, will step down as chief executive after it was revealed he made larger-than-expected payments to Jeffrey Epstein, the disgraced financier.

Black paid Epstein $158 million in fees for trust- and estate-tax planning in the five years to 2017, far more than was previously known, according to a report from law firm Dechert. 

The review by Dechert found no evidence that Black was involved in the criminal activities of the late Epstein, who was indicted in 2019 on federal sex-trafficking charges involving underage girls. Epstein committed suicide in prison while awaiting child sex charges.

Apollo also never retained Epstein for any services, the report concluded. 

Black wrote in a letter to Apollo’s fund investors that he would cede the role of CEO to co-founder Marc Rowan on or before his 70th birthday on July 31, while retaining the role of chairman. 

The Wall Street Journal was first to report on the contents of the report and letter.

Shares of Apollo Global rose 3.86% to $47.65 in after-hours trading on Monday.

4. — BlackBerry Shares Surge Again

BlackBerry  (BB) – Get Report was jumping more than 11% in premarket trading Tuesday, following the stock’s more than 28% gain in the previous session as it received a boost from retail traders and was being heavily mentioned on online message boards such as Reddit.

BlackBerry, the security software and services company, said in a statement that it was unaware of reasons for the stock move.

Shares of BlackBerry rose 11.87% to $20.17 in premarket trading Tuesday. The stock has gained 172% so far in 2021.

BlackBerry Rises Again, Gets Lift From Expanded Baidu Partnership

Analysts at RBC cut the stock to underperform from sector perform, citing valuation and saying there has been no change to the company’s fundamental outlook. Analyst Paul Treiber maintained his price target at $7.50.

BlackBerry has become a favorite on the Reddit message board, much like GameStop  (GME) – Get Report and Express  (EXPR) – Get Report.

What Is Happening to GameStop Stock? Jim Cramer Explains

5. — Apple Lead Hardware Engineer Shifting to ‘New Project’

Apple  (AAPL) – Get Report said its leading hardware engineer, Dan Riccio, was moving to a new project and will be replaced by John Ternus, currently a vice president of hardware engineering.

Riccio has been with Apple since 1998 and has worked on most of the company’s major products over that time, from the first iMac computers to the latest 5G phones.

Apple didn’t specify what project Riccio will lead. But recent speculation has focused on efforts by the company to develop a high-end virtual reality headset, or augmented reality glasses.

Apple is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.



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