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Business

Wells Fargo to Pay Record CFPB Fine to Settle Allegations It Harmed Customers

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Wells Fargo

WFC -1.04%

& Co. reached a $3.7 billion deal with regulators to resolve allegations that it harmed more than 16 million people with deposit accounts, auto loans and mortgages.

The settlement with the Consumer Financial Protection Bureau includes a $1.7 billion penalty, the agency’s largest-ever fine, and more than $2 billion in consumer restitution, the regulatory agency said Tuesday.

The consumer watchdog agency said the bank illegally assessed fees and interest charges on loans for cars and homes. Some consumers had their vehicles illegally repossessed while others had overdraft fees unlawfully applied, the agency said.

Wells Fargo’s regulatory troubles continue to ripple through the bank more than six years after its fake account scandal burst into public view. Other problems later surfaced across the San Francisco-based bank, including in its lending and deposit-taking businesses.

The CFPB settlement resolves a major penalty hanging over Wells Fargo but leaves it handcuffed by other regulators. The Federal Reserve has had a cap on the bank’s asset growth in place for nearly five years. Politicians continue to target the bank, and investors have filed a series of class-action lawsuits.

“Wells Fargo is a corporate recidivist,” said CFPB Director

Rohit Chopra,

on a call with reporters Tuesday. He said the settlement “should not be read as a sign that Wells Fargo has moved past its longstanding problems.”

The bank had been negotiating with the CFPB for months in an effort to lump as many outstanding issues into the settlement as possible, according to people familiar with the matter. 

Much of the $2 billion remediation included in the settlement has already been doled out to customers. The bank, for example, has paid $1.3 billion to 11 million customers who had auto-loan servicing issues, the CFPB said.

Wells Fargo has been working for years to resolve a series of regulatory matters stemming from a fake-accounts scandal in 2016. Afterward, other problems surfaced across the bank, including in its mortgage and auto-lending businesses.

The CFPB said the bank’s actions span over a decade. Wells Fargo incorrectly applied auto-loan payments because of technology and compliance failures from 2011 through 2022, the agency said. Errors in its home loan modification process went on from 2011 to 2018, the agency said.

The bank sometimes charged overdraft fees even when a customer had enough funds available to make a debit-card transaction or ATM withdrawal, CFPB said. Wells Fargo is required to refund customers about $205 million in fees since the beginning of last year that weren’t yet reversed. CFPB will oversee that process.

Mr. Chopra, an appointee of President Biden, has said he plans to target repeat offenders. “Corporate recidivism has become normalized and calculated as the cost of doing business,” he said in a speech earlier this year. He has also sought to make his agency more adversarial toward financial firms.

The CFPB said Wells Fargo has accelerated efforts to clean up its act since 2020. Tied to the settlement, the agency will terminate one of the consent orders it had placed on the bank in 2016 and clarify that a 2018 consent order will terminate in no more than three years.

Wells Fargo, led by CEO Charlie Scharf, had signaled for months that it expected another large regulatory penalty.



Photo:

Drew Angerer/Getty Images

“This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us,” Chief Executive

Charlie Scharf

said in a statement.

Mr. Scharf was brought in to clean up the bank in 2019. He has overhauled the top executive ranks, cut its workforce and gave priority to remaking the bank’s back-end systems for managing internal controls and risk. 

The bank had signaled for months that it expected another big regulatory penalty, and it took a $2 billion charge in the third quarter tied to resolving long-running legal and regulatory issues. The bank said Tuesday that it expects an operating losses expense of $3.5 billion in the current quarter.

Shares of the bank fell about 1.5%.

Write to Ben Eisen at ben.eisen@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

U.S. stocks struggling to make ‘crazy’ bounce-back rally stick as earnings season gets under way

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U.S. stocks saw early gains fizzle Friday, with the market turning south after attempting to build on a bounce in the previous session that marked what’s been called one of the craziest market days in history.

Stocks turned lower after a closely watched survey showed consumer inflation expectations were on the rise, while investors were also weighing a round of results from big Wall Street banks as earnings reporting season gets under way.

What’s happening
  • The Dow Jones Industrial Average
    DJIA,
    -0.80%
    fell 223 points, or 0.7%, to 29,815, after rising 390 points at its session high.
  • The S&P 500
    SPX,
    -1.67%
    was down 58 points, or 1.6%, at 3,612.
  • The Nasdaq Composite declined 227 points, or 2.1%, to 10,422.

On Thursday, the Dow erased a plunge of nearly 550 points to end 828 points higher, while the S&P 500 bounced back from a loss of more than 2% to end 2.6% higher, and the Nasdaq Composite jumped 2.2%.

The Dow’s 2.8% rise was the largest one-day gain since Nov. 9, 2020.

See: Why stocks scored a historic bounce after another hot inflation report

What’s driving markets

Gains early Friday gave way to losses after the University of Michigan’s consumer sentiment survey showed expectations for inflation over the next year rose to 5.1% from September’s one-year low of 4.7%, while expectations for inflation over the next 5 years ticked up to 2.9% from 2.7% last month.

“The uptick in inflation expectations probably is a response to the increase in gas prices in recent weeks, in which case it won’t continue,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note, observing that preliminary readings tend to see big revisions.

“Still, on the heels of the September inflation data this rebound — reversing the drop last month — does not look good, given how closely policy makers appear to track the measure,” Shepherdson said.

The survey’s gauge of consumer sentiment rose to 59.8 in October from 58.6. Economists were expecting a reading of 59, according to a Wall Street Journal poll.

Data Friday also showed U.S. retail sales were unchanged in September, coming in below forecasts for a 0.3% rise. Excluding autos, sales rose 0.3%.

Analysts cited a number of factors to explain the huge rise in stocks on Thursday, which came after equities initially tanked following a hotter-than-expected September consumer-price index reading.

Factors behind the bounce included technical and positioning considerations after a steep selloff that had seen the S&P 500 index tumble for six sessions in a row to end Wednesday at its lowest since November 2020.

“Among the most frequent explanations is that the most pessimistic of all possible scenarios were built into prices: a 75-point rate hike at the next two meetings,” said Alex Kuptsikevich, senior market analyst at FxPro, in a note. “After this, market participants turned their attention to substantial discounts to prices from their highs with a relatively healthy economy that continues to create jobs and raise wages,”

But caution still prevailed on Friday.

“Despite October’s notoriety as a ‘bear market killer’ and an auspicious intraday move, investors should maintain a certain degree of caution. A real change in trend requires a shift in fundamentals. And those changes are still not easy to identify,” Kuptsikevich said.

Rick Rieder, the chief investment officer for fixed income at BlackRock, told MarketWatch’s Christine Idzelis that Thursday’s gyrations marked one of the “craziest” days in market history, coming after data showing U.S. September inflation running at a hotter-than-expected pace.

“One of the largest intraday reversals in recent memory off a closely watched CPI print underscores the oversold condition and sentiment extreme in this market. The vulnerability wasn’t in the number, the vulnerability was in the positioning leading up to the number,” said Jeff deGraaf, founder of Renaissance Macro Research, in a Friday note.

BlackRock’s Rieder advised investors to consider parking their money in short-term bonds, a point recently echoed by hedge-fund legend Ray Dalio.

Shares of JPMorgan Chase & Co.
JPM,
+3.39%
were up 2.7% after the bank and Dow component beat Wall Street targets for earnings and revenue.

Analysts were also weighing results from Wells Fargo & Co.
WFC,
+3.52%
and Morgan Stanley
MS,
-4.25%,
and Citigroup Inc.
C,
+1.43%.

See: JPMorgan profit falls but beats estimates while Wells Fargo misses

Investors were also monitoring developments in the U.K., where Prime Minister Liz Truss fired Kwasi Kwarteng from his role as chancellor of the exchequer. Yields on U.K. government bonds spiked after Kwarteng presented a budget plan that included large tax cuts in late September, sparking a crisis that required the Bank of England to step in with an emergency buying program.

Read: Why Kwasi Kwarteng could not survive the battle with the Bank of England

U.K. bond yields initially dropped on Friday on indications many of the planned tax cuts would be reversed. But they later rose after Truss only reversed corporate tax cuts.

Also see: Larry Summers says U.K. debt market stress could be the ‘tremor’ signaling global economic ‘earthquake’

The Federal Reserve needs to continue raising interest rates but should be careful about the pace of these moves, Kansas City Fed President Esther George said on Friday.

Companies in focus
  • Wells Fargo
    WFC,
    +3.52%
    shares rose 3.8% after the bank posted stronger-than-expected revenue for the third quarter, offsetting a profit miss.
  • Shares of Morgan Stanley
    MS,
    -4.25%
    fell 4.5% after the investment bank missed Wall Street’s targets for earnings and revenue amid a drop in deal activity.
  • Citigroup
    C,
    +1.43%
    shares rose 1.9% after the bank topped Wall Street forecasts on earnings and revenue.
  • UnitedHealth Group Inc.
    UNH,
    +1.77%
    shares were up 1.6% after the Dow component and health insurer reported third-quarter profit and revenue that rose above expectations, and lifted its full-year outlook for a third-straight quarter.
  • Kroger Co.
    KR,
    -5.04%
    announced a $24.6 billion deal to buy Albertsons Cos. Inc.
    ACI,
    -7.39%.
    Under the terms of the merger agreement, Kroger will acquire all of the shares outstanding of Albertsons’ common and preferred stock for an estimated $34.10 per share. Kroger shares fell 4.9%, while Albertsons was off 7%. Shares of Albertsons jumped more than 11% Thursday on reports of a potential deal, while Kroger rose 2%.
  • Beyond Meat Inc.
    BYND,
    -6.02%
    shares fell 6.2% after the plant-based food company issued a revenue warning, announced a plan to cut about 200 workers and said it’s cutting other costs as it makes a strategic shift aimed at achieving positive cash flow operations.

Also see: Beyond Meat COO Douglas W. Ramsey is leaving the company after being suspended for allegedly biting a man’s nose

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Business

There Are Signs Inflation May Have Peaked, but Can It Come Down Fast Enough?

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Growing signs that price pressures are easing suggest that June’s distressingly high 9.1% increase in consumer prices will probably be the peak. But even if inflation indeed comes down, economists see a slow pace of decline.

Ed Hyman,

chairman of Evercore ISI, pointed to many indicators that  9.1% might have been the top. Gasoline prices have fallen around 10% from their mid-June high point of $5.02 a gallon, according to AAA. Wheat futures prices have fallen by 37% since mid-May and corn futures prices are down 27% from mid-June. The cost of shipping goods from East Asia to the U.S. West Coast is 11.4% lower than a month ago, according to Xeneta, a Norway-based transportation-data and procurement firm.

Easing price pressures and improvements in backlogs and supplier delivery times in business surveys suggest that supply-chain snarls are unraveling. Mr. Hyman noted that money-supply growth has slowed sharply, evidence that monetary tightening is starting to bite.

Inflation expectations also fell recently—an upbeat signal for the Fed, which believes that such expectations influence wage and price-setting behavior and thus actual inflation. The University of Michigan consumer-sentiment survey showed that longer-term inflation expectations slipped from June’s 3.1% reading to 2.8% in late June and early July, matching the average rate during the 20 years before the pandemic.

Bond investors are less worried about inflation, based on the “break-even inflation rate”—the difference between the yield on regular five-year Treasury bonds and on inflation-indexed bonds—which has dropped to 2.67% from an all-time high of 3.59% hit in late March.

Inflation-based derivatives and bonds are projecting that the annual increase in the CPI will fall to 2.3% in just a year, around the Fed’s 2% target (which uses a different price index), according to the Intercontinental Exchange.

Roberto Perli,

economist at Piper Sandler, calls such an outcome “optimistic but not totally implausible.” From February through early June, investors thought inflation would still be between 4% and 5% in a year.

“It’s a step in the right direction, but ultimately, even if June is the peak, we’re still looking at an environment where inflation is too hot,” said

Sarah House,

senior economist at Wells Fargo, who expects fourth-quarter inflation between 7.5% and 7.8%. “So peak or not, inflation is going to remain painful through the end of the year.”

And the slower it is to ebb, the larger the likelihood of a damaging downturn, said

Brett Ryan,

senior U.S. economist at Deutsche Bank.

Core inflation, which strips out volatile food and energy prices and is considered a better measure of inflation trends, was 5.9% in June, down from a peak of 6.5% in March. But Ms. House and Mr. Ryan both expect core inflation to revive and peak sometime around September, as strong price growth for housing and other services combines with low base comparisons in the 12-month calculation.

“The more persistent inflation pressures, the higher the Federal Reserve needs [interest rates] to go to address them,” said Mr. Ryan. “That argues for a larger recession risk.”

Fed Chairman

Jerome Powell

has said the central bank wants to see clear and convincing evidence that price pressures are subsiding before slowing or suspending rate increases.

“The moment of truth comes at the end of this year,” said Mr. Hyman. “If the Fed keeps on raising rates, then they’d invert the yield curve. I think that would increase the odds of recession enormously. It would probably also lower inflation, although it also seems to already be slowing, and will probably be even slower by then.”

Aichi Amemiya,

U.S. economist at Nomura, said that though it is too early to call it, his forecast sees June as the peak for the annual measure of overall inflation. However, the month-over-month change in core CPI will be key to watch in coming months, he said. If it slows from June’s pace of 0.7% to 0.3% on a sustained basis by year-end, he expects the Fed to start planning to ease up on rate increases. That, however, will be hard to achieve, said Mr. Amemiya, “which means the Fed will likely continue tightening even after the economy enters a recession.”

Around the turn of the year, economists were generally confident that inflation would peak in early 2022, as energy prices stabilized and supply-chain pressures eased. Then Russia invaded Ukraine, and energy prices soared. Buzz about  “the peak” crescendoed again when inflation slid to an 8.3% annual rate in April, from 8.5% in March. But gasoline prices flared up again, and gains in food and rent picked up, too.

There is plenty of potential for another reversal in coming months, said Ms. House.

“When we look at ongoing core inflation pressures, it wouldn’t take much in the way of a commodities price shock for us to reach another high,” she said, adding that possible examples include an escalation of the Russia-Ukraine conflict, a hurricane that shuts down an oil refinery, or an outage at a key semiconductor or auto plant. “We all hope we’re at the peak. But hope is not really an inflation strategy right now.”

Write to Gwynn Guilford at gwynn.guilford@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Morgan Stanley Posts Higher Profit, Capping Mixed Quarter for Big Banks

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A booming market for deals and brisk demand for financial advice lifted

Morgan Stanley’s

MS 1.83%

fourth-quarter earnings and helped the Wall Street firm set a full-year profit record.

The bank posted a profit of $3.7 billion, up 9%, or $2.01 a share. Analysts expected $1.94 a share, according to FactSet. Revenue rose 7% to $14.5 billion in the quarter, which fell just short of expectations.

Morgan Stanley capped off a mixed quarter for the nation’s biggest banks. Windfall trading revenues across Wall Street are slowing down as market volatility subsides. Banks are offering bigger paydays to attract and keep employees in a tight labor market.

Goldman Sachs Group Inc.,

JPMorgan Chase

& Co. and

Citigroup Inc.

all reported lower fourth-quarter profits, ending a streak of big gains. Morgan Stanley,

Bank of America Corp.

and

Wells Fargo

& Co. saw profits rise.

Morgan Stanley shares closed up 1.8% on Wednesday.

Deal making remains a bright spot. Morgan Stanley’s investment banking revenue rose 6% in the fourth quarter. Goldman, JPMorgan and Citigroup also reported gains in investment banking.

The year is off to a good start, with a healthy pipeline for new deals, Morgan Stanley Chief Financial Officer

Sharon Yeshaya

said on a conference call with analysts. “That said, a lot will depend on monetary and fiscal policy and its impact on sentiment,” she added.

Stock and bond trading revenue fell 6% in the fourth quarter. Trading revenue also fell at Goldman, JPMorgan and Citigroup.

Full-year compensation expenses at Morgan Stanley rose 18% to $24.6 billion. Banks increased salaries for junior bankers across Wall Street in 2021, and firms are also paying up to keep senior executives.

“We feel good that we’ve paid for performance,” Ms. Yeshaya said in an interview.

JPMorgan Chief Executive

Jamie Dimon

said last week that his bank would remain competitive in compensating its traders and bankers, even if it pressured profit margins.

Morgan Stanley’s wealth-management division grew fourth-quarter revenue 10% from a year earlier. The unit’s net interest income, a measure of its lending profitability, grew 16%. That growth could continue in the year ahead, as the Federal Reserve has signaled that several interest-rate increases are likely in 2022.

SHARE YOUR THOUGHTS

What do you find most interesting in Morgan Stanley’s quarterly report? Join the conversation below.

The number of retail-trading clients at Morgan Stanley was 7.4 million, in line with the third quarter total. The average daily number of retail trades the company handled for the quarter topped one million but was down 6% from a year ago.

Investment management revenue rose 59% from a year earlier. That rate was boosted by Morgan Stanley’s acquisition of Eaton Vance, which closed last March.

Write to Charley Grant at charles.grant@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Bank of America to Cut Overdraft Fees to $10 From $35

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Bank of America Corp. said Tuesday it would cut overdraft fees to $10 from $35 beginning in May, following other big banks that have rolled back or ditched such charges.

Overdraft fees, which are charged when customers don’t have enough cash in their accounts to cover their purchases, are under scrutiny by regulators and politicians who say they unfairly exploit cash-strapped families. Under the Biden administration, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency have pressed banks to scale them back. In a December report, the CFPB flagged Bank of America, JPMorgan Chase & Co. and Wells Fargo & Co. on their overdraft fees.

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Business

There’s a lesson from Charlie Munger’s increased bet on Alibaba

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You wouldn’t expect a 97-year-old to necessarily have a lot of patience, but legendary investor Charlie Munger is doing just that with one of his holdings.

Munger’s Daily Journal
DJCO,
+2.17%
nearly doubled its stake in Chinese internet giant Alibaba Group Holding
BABA,
+8.26%
in the third quarter, a Securities and Exchange Commission filing released this week showed. (Holdings in Bank of America
BAC,
-0.27%,
Posco
PKX,
+1.37%,
US Bancorp
USB,
+0.70%
and Wells Fargo
WFC,
-0.23%
were unchanged.)

Munger, also the vice chairman of Berkshire Hathaway
BRK.B,
+0.97%,
now has about 18% of Daily Journal’s portfolio in Alibaba, at a basis of between $180 and $200 per share, says Tom Hayes, chairman and managing member of Great Hill Capital, who has also invested in Alibaba. Alibaba closed Thursday at $156.

Hayes says there are key lessons to be learned from Munger’s investment. “For starters, successful people do what unsuccessful people won’t. He’s willing to take some short-term pain for long-term gain. Not on the basis of wishing or hoping, but on the basis of facts and data,” says Hayes.

Granted, yes, Alibaba has been fined for monopolistic practices, and China has aggressively sought to tame its big businesses. There also are efforts afoot by the Securities and Exchange Commission to delist Chinese companies, though Hayes points out that Alibaba’s auditor is PwC, and he doesn’t believe Chinese listings with big four auditors will be removed.

Alibaba has been growing its top line, and cash flow is forecast to more than double in the next few years. You can now pay less for Alibaba than it was when the company was less than a third of its current size, says Hayes. And it will be tough to find one billion users elsewhere. “And that’s why Buffett and Munger are the best investors around,” Hayes said.

The chart

The spread between the yield on the 10-year Treasury note and the 3-month bill has the highest correlation to gross domestic product growth one year out, of any yield curve indicator. And, at the current spread, the economy will expand at 2.3% next year, a far cry from the 3.8% the Federal Reserve is projecting. “While the yield curve may not be able to give an exact estimate of future economic activity, it sure can give an indication about the general direction of growth. And right now, what the curve is saying is that growth will be way below where the consensus and the Fed expect it to be, thus leaving enough room for disappointment,” said David Rosenberg, chief economist and strategist at Rosenberg Research.

The buzz

The big event of the day is the Canadian jobs report. Nah, just kidding, it’s the U.S. nonfarm payrolls report, which is expected to show a 500,000 increase in jobs and the unemployment rate ticking down to 5.1%. Federal Reserve officials have set a low bar for this report to clear in order to initiate the bond taper program, with Chair Jerome Powell saying it only has to be “reasonably good.”

Strategists at Bank of America point out that 10 of the last 12 payrolls report have sparked risk-on behavior in markets.

U.S. stock futures
ES00,
+0.12%

NQ00,
+0.09%
were a touch higher ahead of the report, while the yield on the 10-year Treasury
TMUBMUSD10Y,
1.585%
edged up to 1.58%.

The Senate voted Thursday night to lift the debt ceiling by $480 billion, moving the legislation to the House, which is expected to do likewise.

Electric-car maker Tesla
TSLA,
+1.39%
announced it was moving its headquarters to Texas from California.

Oshkosh
OSK,
+1.16%
warned that supply-chain and logistics disruptions were hurting its ability to make and ship units, as it lowered guidance for its fiscal fourth quarter.

The 2021 Nobel Peace Prize was awarded to journalists Maria Ressa of the Philippines and Dmitry Muratov of Russia for their fight for freedom of expression.

Random reads

Walmart’s
WMT,
+1.18%
Sam’s Club is offering bigger turkeys this year. Here’s why.

A six-year-old is Georgia’s youngest certified farmer.

A remote stun gun-style device is being used — to quiet dancing grannies in China.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

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Business

Wells Fargo Stock Is Dropping on Report of Regulatory Concerns

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Text size

It has been about five years since it emerged that Wells Fargo staff had been opening accounts for customers without their permission.


Justin Sullivan/Getty Images


Wells Fargo

‘s regulatory trouble aren’t yet in the rearview mirror. The stock is tumbling because of it.

On Tuesday, Bloomberg reported that the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau were disappointed in Wells Fargo’s (ticker: WFC) progress in remunerating victims from its fake- accounts scandal and beefing up its internal controls. The slower-than-hoped-for pace could mean that the bank will face additional sanctions, according to the report.

Wells Fargo shares fell 5.6% Tuesday and were down nearly 4% in Wednesday’s trading. Representatives from Wells Fargo declined to comment, as did the CFPB and the OCC.

Wells Fargo’s recent trading is a blip for a stock that had been soaring both on hopes of a recovering economy and expectations that the bank would soon get out of the regulatory penalty box. Just three weeks ago, Wells Fargo shares were up nearly 70% on the year, outpacing the

SPDR S&P Bank ETF

(KBE), which is up nearly 25%.

Wall Street had been giving credit to Chief Executive Charlie Scharf, who took the helm nearly two years ago. Under Scharf, the bank made changes to its leadership ranks and worked on cost-cutting and other measures to improve its operations. While Scharf has warned that the path to recovery may be uneven, Wall Street wasn’t anticipating Tuesday’s negative news.

“This marks an unfortunate and unexpected turn,” Scott Siefers, managing director at Piper Sandler, wrote in a note Tuesday, reiterating his Neutral rating on the shares. “We believe the market had hoped that any incremental news would be good, rather than akin to what we learned [on Tuesday].”

Other analysts were similarly cautious, calling the report a near-term negative for shares. John Pancari, analyst at Evercore ISI, noted that the Bloomberg report didn’t appear to reveal regulatory concerns about additional wrongdoing by the bank, but that the prolonged recovery could mean higher expenses.

“[The] risk of incremental regulatory action is a negative given implications for the timing of resolution, as well as impact to operating costs,” he wrote. “Additionally, we cannot rule out that these issues could impact investors’ perception of management’s ability to address the various concerns,”

Pancari maintained his Outperform rating on the shares.

The negative news comes almost exactly five years after it emerged that Wells Fargo employees—anxious to hit aggressive sales targets—were opening accounts for clients without their permission. The unauthorized accounts led to extra fees and dings to clients’ credit scores. Quantifying the impact and compensating victims accordingly has proven to be a challenge.

Write to Carleton English at carleton.english@dowjones.com

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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

Goldman, Morgan Stanley Limit Losses With Fast Sale of Archegos Assets

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Goldman Sachs Group Inc. and Morgan Stanley were quick to move large blocks of assets before other large banks that traded with Archegos Capital Management, as the scale of the hedge fund’s losses became apparent, according to people with knowledge of the transactions. The strategy helped limit the U.S. firms’ losses in last week’s epic stock liquidation, they said.

Losses at Archegos, run by former Tiger Asia manager Bill Hwang, have triggered the liquidation in excess of $30 billion in value. Banks were continuing to sell blocks of stocks linked to Archegos Monday, traders said.

“This is a challenging time for the family office of Archegos Capital Management, our partners and employees. All plans are being discussed as Mr. Hwang and the team determine the best path forward,” a company spokeswoman said in a statement Monday evening.

Archegos took big, concentrated positions in companies and held some positions in a mix of stock and swaps. Swaps are a common arrangement in which a trader gets access to the returns generated by a portfolio of shares or other assets in exchange for a fee.

Losses threatened to spill over into the so-called prime brokerage businesses that have been handling the firm’s trading. The group of large Wall Street banks includes Goldman, Morgan, Credit Suisse Group AG, Nomura Holdings Inc., UBS Group AG and Deutsche Bank AG , said people familiar with the firm’s trading.

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