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JPMorgan Chase, Wendy’s and more

A sign is posted in front of a Wendy’s restaurant on August 10, 2022 in Petaluma, California.

Justin Sullivan | Getty Images

Check out the companies making headlines in midday trading.

JPMorgan – Shares of the biggest U.S. bank by assets rose more than 2% after the firm posted fourth-quarter profit and revenue that topped expectations. The New York-based bank said profit jumped 6% from the year earlier period to $11.01 billion, or $3.57 per share. Interest income at the bank surged 48% on higher rates and loan growth.

Citigroup — Citigroup’s stock added more than 1% as the company reported a record fourth quarter for fixed income. The bank said net income decreased during the period by more than 21% over last year as it set aside more money for potential credit losses.

Delta Air Lines — The airline stock edged about 4% lower after the company said in its outlook that higher labor costs would hurt its first-quarter profits. Delta topped analysts’ expectations on the top and bottom lines for the fourth quarter.

Wendy’s — The fast-food chain’s stock added 5.7% after Wendy’s shared positive preliminary fourth-quarter results and announced a handful of reshuffles within its corporate structure. A regulatory filing also indicated that Nelson Peltz does not want to take over Wendy’s.

Wells Fargo – The bank stock dipped 0.1% after the firm reported shrinking profits, weighed down by a recent settlement and the need to build up reserves amid a deteriorating economy. Wells Fargo’s net income tumbled 50% to $2.86 billion from $5.75 billion a year ago. The bank set aside $957 million for credit losses after reducing its provisions by $452 million a year ago.

Bank of America —The financial stock rose less than 1% on Friday after Bank of America beat estimates on the top and bottom lines for the fourth quarter. A sharp rise in net interest income helped the results, though management cautioned that the metric could decline sequentially in the first quarter. CEO Brian Moynihan also said that a mild recession was the firm’s baseline assumption for 2023.

Virgin Galactic Holdings — The space tourism company jumped nearly 13% after it said it was on track for a commercial launch in the second quarter of 2023. The company also announced its president of aerospace systems, Swami Iyer, was leaving.

Tesla — Shares of the electric-vehicle maker shed more than 2% after being downgraded to sell from neutral by Guggenheim and cutting prices on its vehicles in the U.S. and Europe. In its downgrade, Guggenheim cited concerns with Tesla’s fourth-quarter estimates.

Bank of New York Mellon — Shares of the mid-sized bank rose 2.5% on Friday after the company reported net income of $509 million for the fourth quarter. That was down 38% year over year but up about 60% from the third quarter. That profit rose to $1.1 billion, or $1.30 per share, when excluding certain items, but it is unclear if those results were comparable to analysts’ estimates.

UnitedHealth — The health-care stock advanced more than 1% after the company surpassed Wall Street’s fourth-quarter expectations. UnitedHealth reported adjusted earnings of $5.34 a share on $82.8 billion in revenue. Analysts polled by Refinitiv expected earnings of $5.17 per share on revenues of $82.59 billion.

Lockheed Martin — The defense stock slipped more than 3% after Goldman Sachs downgraded shares to sell from a neutral rating. The firm said shares could fall if the government trims defense spending. Northrop Grumman shares also dove 5% on Goldman’s downgrade to a sell from neutral rating.

Salesforce — The software stock shed 1% following a downgrade to neutral from overweight by Atlantic Equities. The firm said the stock would likely be hurt by executive departures and slowed growth.

Logitech — Shares of the consumer electronics company dipped 3.3% after Deutsche Bank downgraded the shares to a hold from a buy rating. The decline built on Thursday’s losses after reporting preliminary results that signaled slowing sales and earnings.

Warner Music Group – Shares of Warner Music Group shed 5.5% after Guggenheim cut its rating on the stock to neutral from buy and trimmed its price target to $35 from $38, citing worries about revenue from the music streaming service.

Copa — Shares of the Latin American airline jumped 4.9% following an upgrade to overweight from a neutral rating by analysts at JPMorgan. The bank said shares could rally 50% as air travels resurges.

AutoNation — AutoNation’s stock fell 4.3% as Wells Fargo downgraded the automotive retailer to equal weight from an overweight rating, saying that its valuation looks “reasonable” and estimates look too high.

— CNBC’s Jesse Pound, Yun Li, Michelle Fox, Alex Harring and Carmen Reinicke contributed reporting

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Jim Cramer says he likes these 3 industrial stocks heading into 2023

CNBC’s Jim Cramer on Friday identified three industrial stocks that he believes are worth owning next year, saying he expects them to outperform the sector’s top performers in 2022.

The best-performing industrial stocks in the S&P 500 so far this year have been Northrop Grumman, Lockheed Martin and Deere — up 36.9%, 35.6% and 25.7%, respectively. Looking ahead, though, Cramer said he’d prefer to own the likes of Caterpillar, Illinois Tool Works and railroad operator CSX.

Shares of Caterpillar, which reported strong earnings two months ago, have climbed 12.6% year to date. Cramer said he favors Caterpillar over fellow machinery maker Deere.

“CAT has much more exposure to infrastructure, and I think they’ve got a boost from the oil and gas industry coming,” Cramer said. “Definitely worth owning here at 17 times earnings,” he added.

Illinois Tool Works shares are down more than 12% in 2022 because fears of an economic slowdown have trumped the company’s actual results, Cramer contended. “I like it here, of course more [so] on a pullback,” he said. “But I give you my blessing to buy ITW.”

Transports such as CSX — down nearly 16% year to date — are “totally hated” on Wall Street, Cramer acknowledged. However, he said he believes CSX is attractive for investors with extended time horizons.

“For me, it’s a long-term story. I see our East Coast ports getting more business as shipping companies adjust to the fact that our West Coast ports are dysfunctional. In the meantime, CSX is just minting money with coal,” he said. “I think it’s worth buying going into 2023.”

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What you should know about SLS, Orion

NASA plans to launch the Artemis I mission on Monday from Kennedy Space Center in Florida, sending the Space Launch System (SLS) rocket and Orion capsule on a more than month-long journey around the moon. —

The uncrewed launch marks the debut of the most powerful rocket ever assembled and kicks off NASA’s long-awaited return to the moon’s surface. It’s the first mission in NASA’s Artemis lunar program, which is expected to land the agency’s astronauts on the moon by its third mission in 2025.

While Artemis I will not carry astronauts, nor land on the moon, the mission is critical to demonstrating that NASA’s monster rocket and deep space capsule can deliver on their promised abilities. Artemis I has been delayed for years, with the program running billions over budget.

NASA’s Artemis I Moon rocket is rolled out to Launch Pad Complex 39B at Kennedy Space Center, in Cape Canaveral, Florida, on August 16, 2022.

Chandan Khanna | AFP | Getty Images

The Artemis I mission represents a crucial turning point in NASA’s moon plans.

Despite the delays, and absorbing much of NASA’s relatively small budget by federal agency standards, the Artemis program has enjoyed strong bipartisan political support.

Officials in 2012 estimated that the SLS rocket would cost $6 billion to develop, debut in 2017 and carry a $500 million per launch price tag. But the rocket is only just now debuting, having cost more than $20 billion to develop, and its per launch price tag has ballooned to $4.1 billion.

NASA’s Inspector General, its internal auditor, earlier this year said Artemis is not the “sustainable” moon program that the agency’s officials say it is. The watchdog found more than $40 billion has already been spent on the program, and projected NASA would spend $93 billion on the effort through 2025 – when the first landing is planned.

But even that 2025 date is in doubt, according to NASA’s Inspector General, which said that development technologies needed to land on the moon’s surface are unlikely to be ready before 2026, at the earliest.

NASA’s Artemis plan relies on the success of another monster rocket as well: SpaceX’s Starship. The agency last year awarded SpaceX with a $2.9 billion contract to develop a moon-specific version of the rocket to serve as the crew lunar lander for the Artemis III mission.

SpaceX began testing of its Starship spacecraft in earnest in 2019, but that rocket has yet to reach orbit.

A host of aerospace contractors across the U.S. support the hardware, infrastructure and software for NASA’s Artemis I – Boeing, Lockheed Martin, Northrop Grumman, Aerojet Rocketdyne and Jacobs lead the effort. According to NASA, the Artemis program supports about 70,000 jobs around the country.

Multiple NASA centers are involved as well, beyond Kennedy as the launch site – including the DC headquarters, Marshall in Alabama, Stennis in Mississippi, Ames in California, and Langley in Virginia.

In the event that technical issues or weather delay the Aug. 29 launch attempt, NASA has back-up launch dates scheduled for Sept. 2 and Sept 5.

Here’s what you should know about the launch:

The rocket: SLS

NASA’s SLS moon mega rocket topped by the Orion spacecraft rolls out of the Vehicle Assembly Building at the Kennedy Space Center on its way to launch complex 39B for a launch rehearsal on March 17, 2022 in Cape Canaveral, Florida.

Paul Hennessy | Anadolu Agency | Getty Images

Standing as high as a skyscraper at 322 feet tall, the SLS rocket is a complex vehicle built on technologies used and improved on from NASA’s Space Shuttle and Apollo programs.

Fully fueled, SLS weighs 5.7 million pounds, and produces up to 8.8 million pounds of thrust – 15% more than the Saturn V rockets last century. SLS uses four liquid-fueled RS-25 engines, which flew on the Space Shuttle before being refurbished and upgraded, as well as a pair of solid rocket boosters.

SLS’s core stage gets its orange color from the thermal protection system that covers it, which is a spray-on foam insulation. For the first three Artemis missions, NASA is using a variation of SLS known as Block 1. For later missions, NASA plans to roll out an even more powerful variation, known as Block 1B.

The capsule: Orion

NASA’s Orion spacecraft

Source: NASA

NASA’s Orion capsule can carry four astronauts on missions up to 21 days long without docking with another spacecraft. At its core is the crew module, which is designed to endure the harsh conditions of flying into deep space.

After launch, Orion is fueled and propelled by the European Service Module, which was built by the European Space Agency and contractor Airbus.

For Artemis I, there will be three mannequins inside the Orion capsule to collect data via sensors about what astronauts will experience on the trip to-and-from the moon. The return to Earth will be especially crucial, as Orion will re-enter the Earth’s atmosphere at about 25,000 miles per hour. A heat shield protects the exterior of Orion, and a set of parachutes will slow it down for a splash landing in the ocean

The mission around the moon

NASAs Artemis I Moon rocket sits at Launch Pad Complex 39B at Kennedy Space Center, in Cape Canaveral, Florida, on June 15, 2022.

Eva Marie Uzcategui | AFP | Getty Images

Artemis I will travel about 1.3 million miles over the course of 42 days, spanning several phases. After separating from SLS, the capsule will deploy solar arrays and begin a multi-day journey to the moon – departing from Earth’s orbit in what is known as a “trans-lunar injection.”

NASA plans to fly Orion as close as 60 miles above the moon’s surface, before moving into a wide orbit around the lunar body. To return, Orion will use the moon’s gravity to assist it in setting a trajectory back into Earth’s orbit.

Orion is expected to splash down in the Pacific Ocean – off the coast of San Diego, California – where a team of NASA and Department of Defense personnel will recover the capsule.

In addition to the mannequins onboard Orion, Artemis I carries several payloads such as cube satellites, technology demonstrations and science investigations.

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Jeff Bezos’ Blue Origin unveils Ocean Reef private space station

A rendering of the “Ocean Reef” space station in orbit.

Blue Origin

WASHINGTON – Jeff Bezos’ Blue Origin on Monday unveiled its plan for a private space station called “Orbital Reef,” which it will build in partnership with multiple space companies and expects to deploy between 2025 and 2030.

Blue Origin describes the Orbital Reef station, which would be habitable for up to 10 people, as a “mixed use business park” in space – as well as capable of “exotic hospitality” for space tourists.

Ocean Reef is designed to have almost as much habitable volume as the International Space Station.

The company’s primary partner for the station is Sierra Space, a subsidiary of aerospace contractor Sierra Nevada Corporation, with the team also including Boeing, Redwire Space, and Genesis Engineering.

“We’re just beginning to understand the tremendous implications that microgravity research, development and manufacturing can mean, for not only for exploring the universe and making discoveries but improving life on Earth,” Redwire executive vice president Mike Gold told CNBC.

Shares of Redwire Space were halted temporarily by the New York Stock Exchange after surging following the announcement. The stock jumped as much as 40% in trading from its previous close of $12.16.

Blue Origin will provide the space station’s “utility systems” and “core modules,” and plans to use its New Glenn rocket to launch Ocean Reef.

Sierra Space is contributing its LIFE habitat (Large Integrated Flexible Environment; essentially an inflatable space station module), and plans to use its Dream Chaser spacecraft to transport cargo and crew to-and-from the station.

Redwire Space, which went public in September, will run the station’s payload operations and build deployable structures. Redwire also plans to use Orbital Reef for microgravity research, development and manufacturing.

Boeing will build Ocean Reef’s science-focused module and run the station’s operations, as well as conduct maintenance engineering. The aerospace giant also plans to utilize its Starliner capsule for transporting crew and cargo to the station.

Genesis Engineering will contribute its “Single Person Spacecraft” system, which the company describes as an alternative to a spacesuit.

In a conference call with reporters, executives representing the companies of the team declined to specify how much each expect to invest in Orbital Reef.

Blue Origin vice president Brent Sherwood said the team is not going to give “a specific number” on how much the Ocean Reef space station will cost, adding that the financial numbers are commercially sensitive.

Bezos’ company has been looking at building a space station for more than a year, as CNBC previously reported, and earlier this month added a number of job postings for its “Orbital Destinations” team.

Bezos’ vision: Living and working in space

Founder, Chairman, CEO and President of Amazon Jeff Bezos gives a thumbs up as he speaks during an event about Blue Origin’s space exploration plans in Washington, U.S., May 9, 2019.

Clodagh Kilcoyne | Reuters

Orbital Reef fits squarely at the center of Bezos’ vision for Blue Origin, which is to get to where “millions of people are living and working in space to benefit Earth,” especially by moving “industries that stress Earth into space.”

Bezos has personally increased his involvement at Blue Origin, after he stepped down as the CEO of Amazon this summer. While the company has had success with its suborbital New Shepard rocket, having flown two successful crewed flights to date, Blue Origin has come under scrutiny due to soaring employee turnover and allegations of safety issues, as well as a “toxic” work culture, by former employees.

Blue Origin has teamed up with other major space companies before, having partnered with Lockheed Martin, Northrop Grumman and Draper to build a crewed lunar lander for NASA’s HLS program.

However, while the Blue Origin-led team won a $579 million award for early development, it lost the following $2.9 billion contract to Elon Musk’s SpaceX earlier this year. Blue Origin has since taken NASA to court, filing a lawsuit against the space agency to reverse the lunar lander award.

Space station race heating up

Blue Origin intends to bid for one of NASA’s expected contracts for the “Commercial LEO Destinations” program, but Bezos’ company is not alone. NASA director of commercial spaceflight, Phil McAlister told CNBC last month that the program “received roughly about a dozen proposals” from a variety of companies for contracts.

With NASA planning to retire the International Space Station by the end of the decade, the CLD program represents an effort to turn to private companies for new space stations – with the space agency expecting to save more than $1 billion annually as a result.

“We are in a second golden age of space exploration and development,” Redwire’s Gold said.

Last week, another private space station was announced by a separate team of companies: Nanoracks, Voyager Space, and Lockheed Martin are building a station called Starlab, which plans to be operational by 2027.

Starlab is designed to be crewed by up to four astronauts, with about a third of the volume of the ISS.

Concept art of a “Starlab” space station

Nanoracks

NASA has already begun funding the ambitions of one company under a separate contract from the CLD program, having awarded Axiom Space with $140 million. Axiom plans to build modules that will connect to the ISS. When the ISS retires, Axiom then would detach its modules and turn it into a free-flying space station.

An illustration of three of the company’s modules connected to the International Space Station.

Axiom Space

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Comcast, Merck, Tempur Sealy, Yum and others

Check out the companies making headlines before the bell:

Comcast (CMCSA) – Comcast rose 1.9% in the premarket after reporting adjusted quarterly earnings of 84 cents per share, beating the consensus estimate of 67 cents. The NBCUniversal parent also reported better-than-expected revenue, helped by a rebound in ad sales and a reopening of theme parks.

Merck (MRK) – The drug maker matched estimates with adjusted quarterly profit of $1.31 per share, with revenue beating Street forecasts. Sales of cancer drug Keytruda jumped 23%, in line with expectations. Merck fell 1.8% in premarket trading.

Tempur Sealy (TPX) – The mattress maker earned an adjusted 79 cents per share for its latest quarter, 22 cents above estimates, with revenue topping forecasts as well. Tempur Sealy also raised its full-year outlook, and the stock jumped 4.9% in premarket action.

Yum Brands (YUM) – The parent of KFC, Taco Bell and Pizza Hut came in 20 cents ahead of estimates with adjusted quarterly earnings of 1.16 per share, and revenue also beating analyst projections. Results got a boost from restaurant reopenings as well as continued strong demand in online orders. Yum rallied 2.3% in premarket trading.

Molson Coors (TAP) – Molson Coors added 1.8% in the premarket after its adjusted quarterly earnings of $1.58 per share beat the consensus estimate of $1.34. The beer brewer’s revenue was above Wall Street forecasts as well.

Northrup Grumman (NOC) – The defense contractor reported adjusted quarterly earnings of $6.42 per share, beating the $5.84 consensus estimate, with revenue also topping estimates. The company was helped by continued strength in its satellite and missile-making units, and the stock rose 1.1% in premarket trading.

Facebook (FB) – Facebook shares fell 3.7% in premarket trading after the company said revenue growth will slow during the second half of the year as a change in Apple’s (AAPL) privacy policies will hurt Facebook’s ability to target ads. For the second quarter, Facebook reported earnings of $3.61 per share compared to a consensus estimate of $3.03, with revenue also topping Wall Street forecasts.

Ford (F) – Ford surprised analysts with an adjusted quarterly profit of 13 cents per share. The automaker had been expected to report a second-quarter loss of 3 cents per share, due in large part to a chip shortage crimping production. However, Ford said it expected that situation to improve in the second half, and it raised its full-year outlook. Ford jumped 4% in the premarket.

PayPal (PYPL) – PayPal beat estimates by 3 cents with adjusted quarterly earnings of $1.15 per share, with the payment service’s revenue essentially in line with analyst projections. However, shares came under pressure after it gave a lower-than-expected outlook, as former PayPal parent eBay (EBAY) continues its transition to its own payment platform. The stock slid 5.6% in premarket trading.

Qualcomm (QCOM) – Qualcomm reported adjusted quarterly earnings of $1.92 per share, beating the $1.68 consensus estimate, with the chip maker’s revenue also exceeding Street forecasts. Qualcomm also gave an upbeat forecast as it expects supply chain disruptions to ease. Qualcomm added 3.2% in the premarket.

Uber Technologies (UBER) – Uber dropped 5.1% in premarket trading after sources told CNBC that Japanese investment giant Softbank is selling a chunk of its stake in Uber to cover losses related to its investment in another ride-hailing company, Didi Global (DIDI). Didi itself is in the news, denying an earlier Wall Street Journal report that it was considering going private. Didi had been up well over 30% in the premarket before that denial, before trimming that still-large gain to 17.5%.

iRobot (IRBT) – iRobot shares plunged 11.5% in premarket trading after it reported a second-quarter loss and cut its full-year outlook. The maker of the Roomba robotic vacuum cleaner said the worldwide chip shortage would continue to hurt its ability to fulfill orders during the second half of the year.

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NASA Commercial LEO Destinations project for private space stations

SpaceX’s Crew Dragon Endeavour seen docked with the International Space Station on July 1, 2020.

NASA

The National Aeronautics and Space Administration last year marked two decades of astronauts continuously onboard the International Space Station. But, as the floating research laboratory ages, the space agency is turning to private companies to build and deploy new free flying habitats in low Earth orbit.

NASA this past week unveiled the Commercial LEO Destinations (CLD) project, with plans to award up to $400 million in total to as many as four companies in the fourth quarter of 2021 to begin development on private space stations.

The agency is seeking to replicate the success of its Commercial Cargo and Commercial Crew programs. Those programs saw three companies take over for NASA as its means of sending cargo and astronauts to the International Space Station.

NASA commercial LEO director Phil McAlister said he thinks about the domain of low Earth orbit as having three main activities: “Cargo transportation, crew transportation, and destinations.” NASA has transferred over responsibility of the former two activities to private companies, with the agency paying SpaceX and Northrop Grumman to send cargo spacecraft to the ISS, as well as SpaceX and Boeing to launch astronauts. McAlister highlighted that previously, NASA had full ownership of all three activities.

“If it were to always remain that way, our aspirations in low Earth orbit would always be limited by the size of NASA’s budget,” McAlister said in a briefing on Tuesday. “By bringing the private sector into these sections and into these areas, as suppliers and users, you expand the pot, and you have more people in low Earth orbit.”

NASA is opening up the International Space Station for tourists with the first mission as early as 2020.

Stocktrek Images | Getty Images

The potential cost savings of NASA being a user of space stations, rather than an owner and operator, is a key motivator for the CLD program. The International Space Station costs NASA about $4 billion a year to operate. Moreover, the ISS cost a total of $150 billion to develop and build, with NASA picking up most of that bill while Russia, Europe, Japan and Canada each contributed.

NASA last year estimated that the Commercial Crew program alone is estimated to have saved the agency between $20 billion and $30 billion, while funding development of two spacecraft, rather than just one. While Boeing has yet to complete development testing, suffering an extended setback after its first uncrewed Starliner capsule launch in December 2019 failed due to multiple anomalies, SpaceX’s Crew Dragon spacecraft is now flying NASA astronauts operationally.

Another motivator for beginning the CLD program is the ISS’s aging hardware, as much of the space station’s core structures were manufactured in the 1990s and the final pressurized structure was added in 2011. Last year Russian cosmonauts worked to patch a small air leak in a space station module.

“The ISS is an amazing system but, unfortunately, it won’t last forever,” McAlister said. “It could experience an unrecoverable anomaly at any time.”

NASA sees the CLD program as a way to have multiple companies develop and build new habitats in the next few years, so that the agency has an overlap period before the ISS is retired. McAlister noted that, separate from the CLD program, NASA awarded spaceflight specialist Axiom Space with an $140 million contract to build modules to add to the ISS. When the ISS retires, Axiom plans to detach its modules and turn it into a free-flying space station.

“We’re making progress there and very pleased about that,” McAlister said. “We would like to have competition in the supply area, which is why we’re doing [CLD]. It’s always been part of our plan to both attach modules as well as have free fliers.”

An Axiom spokesperson, in a statement to CNBC, said that the company “broadly supports NASA’s vision of a multifaceted economy in LEO.”

“We are raising private funding to design and develop our world’s-first commercial destination to demonstrate that truly commercial leadership can advance the LEO economy. Constructing Axiom Station initially as an extension of the International Space Station will expand the work that can be done on-station in the near-term and best enable a timely and seamless transition when the ISS reaches the end of its life,” Axiom said.

A NASA list of organizations registered for the briefing revealed a wide variety of aerospace and space companies, including: Airbus U.S., Blue Origin, Boeing, Collins Aerospace, Firefly Aerospace, General Dynamics, ispace, Lockheed Martin, Moog, Nanoracks, Northrop Grumman, Raytheon, Redwire Space, RUAG Space, Sierra Nevada Corporation, SpaceX, Virgin Galactic, Virgin Orbit, Voyager Space Holdings, and York Space Systems.

Already, one of those companies announced that it will soon unveil its plan for a free-flying space station. Sierra Nevada Corporation, or SNC, said it will host a virtual press conference on March 31 to reveal the design of the “SNC Space Station.”

NASA will release a final announcement for CLD proposals in May, with the first phase of funding awards expected between October and December. NASA’s Johnson Space Center will manage the CLD program through its commercial LEO development office.

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