Tag Archives: Wells Fargo & Co

Business

Companies Thought They Had a Plan for Fall. Now They Are Scrapping It

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Up until a few weeks ago, corporate leaders felt confident about what to expect this fall.

Offices would reopen after Labor Day. Business travel would resume more broadly. Long-delayed work gatherings, conventions and off-site meetings would finally take place.

The pandemic has, once again, upended many of those plans.

The swift, startling resurgence of Covid-19 cases and hospitalizations across the U.S. is causing corporate leaders to rip up playbooks for the next few months.

No longer is a September return a target for many companies. Some employers, such as banking giant Wells Fargo & Co. and managed-care company Centene Corp. , have in recent days shifted return-to-office dates to October. Meanwhile, a range of other prominent companies now predict it will be 2022 until most workers return.

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Business

Stock futures open mostly flat ahead of the kickoff of earnings season

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Traders work on the floor of the New York Stock Exchange.

NYSE

Stock futures opened mostly flat late Sunday as earnings season kicks off this week.

Futures on the Dow Jones Industrial Average added 25 points, or 0.07%. S&P 500 futures edged 0.08% higher and Nasdaq 100 futures rose 0.17%.

The three major indexes closed at record highs on Friday after a sell-off Thursday as investors worried about a potential slowdown in U.S. economic growth. Friday’s rally brought the averages into the green for the week; the Dow added 0.24% week-to-date, while the S&P 500 and Nasdaq each rose about 0.4% in the same period.

Stocks tied to the economic recovery that fell during Thursday’s session logged gains on Friday. Financial names rebounded, with Bank of America and Goldman Sachs both jumping more than 3%. Travel-related stocks also rose; Royal Caribbean popped 3.6%, Wynn Resorts gained close to 2%, and American Airlines and United Airlines both added more than 2%.

The major averages’ record highs come ahead of the start of quarterly earnings reports. S&P 500 companies’ profits are expected to be up 65% from the same quarter a year ago, according to Refinitiv, bouncing back from the worst of the pandemic. The expected surge in profits would be the strongest earnings growth since the fourth quarter of 2009, as stocks recovered from the financial crisis.

“The second quarter could be as good as it gets for economic growth,” Callie Bost, senior investment strategist at Ally Invest, said. “Earnings growth may slow, but analysts still expect S&P profits to grow by double digits in the next two quarters. It’s crucial not to lose faith in the market just because the economy’s strongest growth may be behind us.”

JPMorgan Chase, Goldman Sachs and PepsiCo kick off earnings season with results due out before the bell on Tuesday. Bank of America, Citigroup, Wells Fargo, Delta Air Lines and BlackRock report on Wednesday, and Morgan Stanley, Truist and UnitedHealth post results on Thursday.

Investors also anticipate important data to be released this week, including key readings on inflation on Tuesday and Wednesday, and June retail sales on Friday.

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Business

Sen. Elizabeth Warren slams bank for potential credit score hit to its customers

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U.S. Senator Elizabeth Warren (D-MA) questions Charles P. Rettig, commissioner of the Internal Revenue Service, during the Senate Finance Committee hearing titled The IRS Fiscal Year 2022 Budget, in Dirksen Senate Office Building in Washington, D.C., June 8, 2021.

Tom Williams | Pool | Reuters

Wells Fargo’s decision to pull customers’ credit lines was lambasted by Sen. Elizabeth Warren.

The bank has been notifying customers that their personal lines of credit would be closed, a move that could potentially damage their credit scores, CNBC reported Thursday.

“Not a single customer should see their credit score suffer just because their bank is restructuring after years of scams and incompetence,” Warren, a Massachusetts Democrat, tweeted Thursday evening. “Sending out a warning notice simply isn’t good enough – Wells Fargo needs to make this right.”

It was the latest controversy to afflict Wells Fargo since its fake accounts scandal emerged in 2016. Bank employees were found to have improperly created millions of unneeded accounts to hit aggressive sales goals. The Federal Reserve took the unusual step of constraining the bank’s balance sheet in 2018, a restriction that has forced it to shun deposits and pare products.

Wells Fargo didn’t immediately respond to a request to reply to Warren’s comments.

The bank also hasn’t responded to e-mailed questions about why customer credit scores would be affected. However, by reducing the amount of credit a customer has available, the closures could raise their credit utilization ratios. This means borrowers would be using a greater percentage of their available credit, which may have a negative impact on their scores.

Wells Fargo told customers it made the decision to cull the lines, which ranged from $3,000 to $100,000 in revolving credit, to focus on its credit cards and personal loans. Yesterday, after publication of the CNBC piece, the bank issued this statement:

“We realize change can be inconvenient, especially when customer credit may be impacted,” bank spokesman Manny Venegas said in an e-mail. “We are providing a 60-day notice period with a series of reminders before closure, and are committed to helping each customer find a credit solution that fits their needs.”

This story is developing. Please check back for updates.

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Business

The bond market is dictating stock trading

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Tech stocks climbed Friday to end the week on a high note, but CNBC’s Jim Cramer expects more downside in the tech cohort as investors continue to rotate out of high-growth names.

“Like it or not, stocks are joined at the hip with the bond market right now,” the “Mad Money” host said.

As bond rates rise amid early signs of an economic recovery, investors are fleeing from riskier growth stocks to cyclical ones, particularly bank and industrial stocks that have underperformed, Cramer said.

The tech-heavy Nasdaq Composite has fallen in recent weeks and remains down 7% from its high about a month ago. The rotation from tech to value stocks, however, won’t last forever, Cramer said.

“Either tech stocks get too low … or long-term interest rates get too high. Until that happens, the rotation will just continue to play out,” he said. “We aren’t there yet, but I’m confident that we’ll get there eventually because that’s what always ends these vicious kinds of rotations.”

Cramer revealed what’s circled on his calendar in the week ahead. Corporate performance projections are based on FactSet estimates:

Tuesday: GameStop, Adobe

GameStop

  • Q4 earnings release: after market; conference call: 5 p.m.
  • Projected EPS: $1.35
  • Projected revenue: $2.21 billion

“The bulls hope to learn on this call more about [Ryan] Cohen’s plan when the company reports, and if there’s anything good at all about these results, well I expect to see a ton of buying the next day,” Cramer said.

Adobe

  • Q1 2021 earnings release: after market; conference call: 5 p.m.
  • Projected EPS: $2.79
  • Projected revenue: $3.76 billion

“Unfortunately, the results are less important than the state of the Wall Street fashion show,” he said. “If Adobe reports a great quarter and rates are soaring that day, with the yield on the 10-year approaching 2%, then the earnings won’t matter at all.”

Wednesday: RH, GrowGeneration, General Mills

RH

  • Q4 earnings release: after market; conference call: 5 p.m.
  • Projected EPS: $4.73
  • Projected revenue: $797 million

GrowGeneration

  • Q4 earnings release: after market; conference call: Thursday, 9 a.m.
  • Projected EPS: 7 cents
  • Projected revenue: $61.5 million

“You rarely hear those two mentioned in the same sentence, but right now they represent the most exciting parts of retail,” Cramer said about RH and GrowGeneration.

“I suspect they’ll both report excellent quarters,” he said. “Home furnishings are the most popular part of retail purchasing right now, as we saw from the incredible quarter Williams-Sonoma just delivered, and the cannabis culture … [has] been an unstoppable force as state after state embraces legalization.”

General Mills

  • Q3 2021 earnings release: before market; conference call: 9 a.m.
  • Projected EPS: 84 cents
  • Projected revenue: $4.45 billion

“I like this one as a way to take the temperature of the pantry stocks,” the host said. “I think the reaction will be tepid, but then again Smucker surprised to the upside and I like Hormel very much. So let’s take a listen.”

Thursday: Darden Restaurants

Darden Restaurants

  • Q3 2021 earnings release: before market; conference call: 8:30 a.m.
  • Projected EPS: 68 cents
  • Projected revenue: $1.61 billion

“Do you know we have 150,000 [restaurants] that have closed? It means that the survivors should be in an incredible position, which is why I expect them to crush numbers,” Cramer said of Darden. “The stock’s had a big run, but I think the scarcity value of the stock and the last-man-standing thesis make it compelling.”

Disclosure: Cramer’s charitable trust owns shares of Facebook, Amazon, Goldman Sachs, JPM organ Chase and Wells Fargo.

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