Tag: Citigroup Inc

CNBC Daily Open: Can't shake off stubborn inflation

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A customer shops for milk at a grocery store on December 12, 2023 in San Anselmo, California.

Justin Sullivan | Getty Images News | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Price pressures persist
An inflation report for December showed U.S. consumer prices increased more than expected. CPI rose 0.3% in December, according to the Labor Department data, slightly more than expectations of a 0.2% rise. On an annual basis, CPI was up 3.4% year on year, also above a 3.2% rise predicted by economists polled by Dow Jones. The increase in prices was mainly driven by higher shelter costs.

Flat stocks
U.S. stocks ended Thursday right around the flatline as the slightly hotter-than-expected inflation data kept any big moves at bay. Stocks in Asia fell as China’s annual exports dropped, but Japan’s Nikkei 225 bucked the trend to extend its record rally.

Big China export drop
Data from China showed annual exports falling for the first time in seven years in 2023. The country, however, saw higher-than-expected shipments in December. China exports fell 4.6% last year, its first annual drop since 2016, as demand for China made goods weakened amid a global economic slowdown.

Bitcoin ETFs go!
Bitcoin exchange traded fund made its debut on U.S. exchanges on Thursday, tracking wild swings in the prices of the volatile cryptocurrency. There were about 11 ETFs that began trading after the U.S. Securities and Exchange Commission approved the recent rule change, including the Grayscale Bitcoin Trust and the iShares Bitcoin Trust which saw tens millions of shares exchange hands.

[PRO] Goldman Sachs’ favorite Asian tech stocks
Goldman Sachs highlights its top opportunities in the Asian tech hardware industry, on improving cyclical recovery, higher demand for artificial intelligence among other factors. Stocks favored include Taiwan Semiconductor Manufacturing Company and many more.

The bottom line

Thursday was a historic day for cryptocurrencies but the broader theme for markets was the slightly hotter-than-expected inflation reading.

Wall Street’s major indexes ended flat, with the Nasdaq Composite settling at 14,970.19, the Dow Jones Industrial Average eking out a 0.04% gain and the S&P 500 inching 0.07% lower.

Following the the 3.4% annual rise, the road to the U.S. Federal Reserve’s 2% inflation target could be steeper than what many market participants and economists expected.

It also shines the light on the gap between the Fed’s communique and market expectations for rate cuts, which are seen as early as March this year according to the CME FedWatch tool.

“The ‘higher for longer’ party has received one more bullet in its banderole,” said Giuseppe Sette, president of AI-based market research firm Toggle AI said.

“For the entire history of the Fed, rates have always been kept considerably above inflation in any scenario short of a recession. This CPI print pushes the first rate cut further away, possibly not even in 2024.”

But bitcoin ETF trading quickly became an event that would give market players a reason to be excited about.

This allowed regular investors to get a slice of the cryptocurrency pie and spurred hopes that bigger Wall Street institutional traders may also jump into the boat.

Bitcoin, the world’s oldest and most popular cryptocurrency, had a volatile session on Thursday. The cryptocurrency jumped above $49,000, hitting its highest since December 2021 but that rally fizzled out by the end of the day.

Bitcoin ETF also mirrored the choppy moves in the cryptocurrency.

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January 11, 2024
JPMorgan Chase profit falls after $2.9 billion fee from regional bank rescues
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Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled Annual Oversight of Wall Street Firms, in the Hart Building on Dec. 6, 2023.

Tom Williams | Cq-roll Call, Inc. | Getty Images

JPMorgan Chase reported fourth-quarter earnings before the opening bell Friday.

Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG, formerly known as Refinitiv, were expecting:

Earnings per share: $3.04, may not compare with expected $3.32

Revenue: $39.94 billion, vs. expected $39.78 billion

JPMorgan will be watched closely for clues on how banks fared amid volatile interest rates and rising loan losses.

While the biggest U.S. bank by assets has navigated the rate environment capably since the Federal Reserve began raising rates in early 2022, smaller peers have seen their profits squeezed.

The industry has been forced to pay up for deposits as customers shift cash into higher-yielding instruments, squeezing margins. At the same time, rising yields mean the bonds owned by banks fell in value, creating unrealized losses that pressure capital levels.

Concern is also mounting over rising losses from commercial loans, especially office building debt, and higher defaults on credit cards.

Beyond guidance on net interest income and loan losses for this year, analysts will want to hear what CEO Jamie Dimon has to say about the economy and banks’ efforts to tone down coming increases in capital requirements.

Wall Street may provide some help this quarter, with investment banking revenue higher than a year earlier, while trading may be “flattish,” JPMorgan said last month at a conference.

Beaten-down shares of banks recovered in November on expectations that the Fed had successfully managed inflation and could cut rates this year.

Shares of JPMorgan jumped 27% last year, the best showing among big bank peers and outperforming the 5% decline of the KBW Bank Index.

Bank of America, Wells Fargo and Citigroup are scheduled to release results later Friday, while Goldman Sachs and Morgan Stanley report Tuesday.

This story is developing. Please check back for updates.
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January 11, 2024
CNBC Daily Open: That sticky inflation

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Consumers shop for groceries at a retail chain store in Rosemead, California, on December 12, 2023.

Frederic J. Brown | AFP | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Price pressures persist
An inflation report for December showed consumer prices increased more than expected. CPI rose 0.3% in December, according to the Labor Department data, slightly more than expectations of a 0.2% rise. On an annual basis, CPI was up 3.4% year on year, also above a 3.2% rise predicted by economists polled by Dow Jones. The increase in prices was mainly driven by higher shelter costs.

Flat stocks
U.S. stocks ended Thursday right around the flatline as the slightly hotter-than-expected inflation data kept any big moves at bay. Europe’s Stoxx 600 ended lower for the third straight day, with shares of Marks & Spencer falling to the bottom of the index after the British retailer flagged “near-term” challenges.

Bitcoin ETFs go!
Bitcoin exchange traded fund made its debut on U.S. exchanges on Thursday, tracking wild swings in the prices of the volatile cryptocurrency. There were about 11 ETFs that began trading after the U.S. Securities and Exchange Commission approved the recent rule change, including the Grayscale Bitcoin Trust and the iShares Bitcoin Trust which saw tens millions of shares exchange hands.

Tech layoffs
Investors on Thursday also witnessed a series of layoffs across technology companies. In a bet to focus on its “biggest product priorities,” Google parent Alphabet laid off several hundred employees. Discord, a popular messaging service used by gamers, also confirmed it will be slashing 17% of its workforce that tallies to about 170 jobs, while Amazon’s Audible division said it will cut about 5% of its broader workforce.

[PRO] Impact of the new bitcoin ETF
Analysts are already starting to predict what could happen next now that the long-awaited bitcoin ETFs have begun trading on U.S. exchanges. Hopes grow that the move could bring in the likes of old school institutional traders that have been on the sidelines.

The bottom line

Thursday was a historic day for cryptocurrencies but the broader theme for markets was the slightly hotter-than-expected inflation reading.

Wall Street’s major indexes ended flat, with the Nasdaq Composite settling at 14,970.19, the Dow Jones Industrial Average eking out a 0.04% gain and the S&P 500 inching 0.07% lower.

Following the the 3.4% annual rise, the road to the U.S. Federal Reserve’s 2% inflation target could be steeper than what many market participants and economists expected.

It also shines the light on the gap between the Fed’s communique and market expectations for rate cuts, which are seen as early as March this year according to the CME FedWatch tool.

“The ‘higher for longer’ party has received one more bullet in its banderole,” said Giuseppe Sette, president of AI-based market research firm Toggle AI said.

“For the entire history of the Fed, rates have always been kept considerably above inflation in any scenario short of a recession. This CPI print pushes the first rate cut further away, possibly not even in 2024.”

But bitcoin ETF trading quickly became an event that would give market players a reason to be excited about.

This allowed regular investors to get a slice of the cryptocurrency pie and spurred hopes that bigger Wall Street institutional traders may also jump into the boat.

Bitcoin, the world’s oldest and most popular cryptocurrency, had a volatile session on Thursday. The cryptocurrency jumped above $49,000, hitting its highest since December 2021 but that rally fizzled out by the end of the day.

Bitcoin ETF also mirrored the choppy moves in the cryptocurrency.

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January 11, 2024
Janney's Chris Marinac expects banks to report a good quarter to kick off earnings season

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Chris Marinac, Janney Montgomery Scott Director of Research, joins ‘Fast Money’ to talk what to expect from bank earnings tomorrow.

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January 11, 2024
CNBC Daily Open: The long-awaited bitcoin stamp of approval

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Representations of cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken June 16, 2023.

Dado Ruvic | Reuters

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

SEC approves
A highly anticipated and controversial decision finally arrived Wednesday, with the Securities and Exchange Commission allowing the creation of bitcoin exchange-traded funds in the U.S. that will give regular investors access to the world’s oldest and most popular cryptocurrency. The first funds are set to start trading on Thursday. The price of bitcoin, however, shed about 2%.

Wall Street ends higher
U.S. stocks ended Wednesday’s trading session higher as investors awaited the start of earnings season later in the week and also inflation data. Jump in shares of Intuitive Surgical and Lennar boosted markets. In Asia, Japan’s Nikkei 225 index breached the 35,000 mark for the first time since February 1990.

China woos investors
China has now vowed to make foreign investments easier, as was reported by state media. Chinese Vice Premier He Lifeng met with global financial executives Wednesday at a time China’s tensions with the U.S. and worries about its economic growth have kept investors wary of putting money into the country.

Inflation report awaited
December inflation data, set to be released on Thursday, could very well challenge the market’s perception of how soon the Federal Reserve will start cutting interest rates and by how much. Consumer prices would’ve likely edged higher last month, with expectations by Dow Jones pointing to a 0.2% rise in the final month of 2023, and 3.2% increase for the full year.

[PRO] Tesla versus BYD
Tesla has been an investor favorite but a sizable Chinese rival in BYD could give Wall Street’s EV darling a run for its money. The Pros will dissect whether investors should stick with Tesla or buy into the up-and-coming BYD.

The bottom line

Bitcoin just received its biggest stamp of approval, giving crypto bros their most powerful bragging rights yet.

The decision by the SEC to approve the creation and trading of bitcoin ETFs will allow for better adoption of the world’s oldest cryptocurrency by mainstream finance.

Grayscale Bitcoin Trust, that holds about $29 billion of the cryptocurrency, will likely be converted into an ETF following the decision, while big Wall Street’s BlackRock and Fidelity will also enter the playing field.

“Today’s news is possibly Bitcoin’s biggest since its launch but the approval of spot ETFs shouldn’t be viewed in isolation, given the timing of the upcoming halving in April which cuts the BTC supply and historically kickstarts the new bull market. Both these events combined could well send Bitcoin to $100,000 in 2024,” said Antoni Trenchev, co-founder and managing partner of the digital asset firm Nexo.

Trenchev also noted that “there is a temptation to say the approval of spot Bitcoin ETFs is a buy-the-rumour, sell-the-news event.”

The decision comes a day after an official SEC social media account falsely said bitcoin ETF trading had been approved. The SEC confirmed that the account had been compromised.

U.S. stocks also eked out gains Wednesday, with the S&P 500 closing 0.57% higher, while the Dow Jones industrial Average added 0.45%. The Nasdaq Composite gained 0.75%.

Later in the day, investors will also shift focus towards consumer price data which is expected to show inflation edged higher in the last month of 2023.

This could potentially bring into question whether markets are getting ahead of themselves in anticipating rate cuts by the Fed. There still remains a wide gap between what the U.S. central bank has indicated in terms loosening its monetary policy and what the market is expecting.

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January 10, 2024
Citigroup at risk of quarterly loss after charges come in far higher than initially disclosed

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Jane Fraser CEO, Citi, speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, May 1, 2023.

Mike Blake | Reuters

Citigroup warned investors late Wednesday that charges tied to the decline of the Argentine peso as well as the bank’s reorganization came in far higher than disclosed by the company’s CFO just weeks ago.

The bank said its fourth-quarter results, scheduled to be released Friday morning, were impacted by $880 million in currency conversion losses from the peso and $780 million in restructuring charges tied to CEO Jane Fraser’s corporate simplification project.

Those charges are significantly higher than the “couple hundred million dollars” apiece that CFO Mark Mason told investors to expect at a Dec. 6 conference hosted by Goldman Sachs.

“They gave guidance just a month ago, and now its several hundred million dollars higher for two categories,” veteran banking analyst Mike Mayo of Wells Fargo said in a phone interview. “If your problem is credibility with investors, then you shouldn’t be doing this type of thing.”

Fraser faces a key moment this week as Citigroup reports fourth-quarter and full-year 2023 earnings in the middle of restructuring efforts aimed at making the bank into a leaner, more profitable company. Throughout the past two decades, Citigroup has been dogged by high expenses and eroding credibility after Fraser’s predecessors underdelivered on targets. That’s left Citigroup the lowest-valued among the six biggest U.S. banks.

Beyond the two charges, Citigroup disclosed Wednesday that it needed to build reserves by $1.3 billion because of its exposure to Argentina and Russia, and that it would post a $1.7 billion expense for a special FDIC assessment tied to the 2023 regional bank failures.

All told, the charges are likely to result in a $1 per share fourth-quarter loss, according to Mayo. Despite his own skepticism that the bank can achieve its targets, Mayo recommends Citigroup stock, saying it is so beaten down that it can double within three years.

Shares of the bank dipped about 1% in after hours trading Wednesday.

A Citigroup spokeswoman declined to comment on the bank’s shifting guidance, instead pointing to remarks from Mason published late Wednesday.

“While these items are meaningful for our 2023 results, we remain on track to meet the 2023 expense guidance (excluding FDIC and divestitures) and all of our medium-term targets,” Mason said. “The items we disclosed today do not change our strategy.”

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January 10, 2024
What to look for when the major banks report earnings, according to Jim Cramer

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CNBC’s Jim Cramer analyzed several major banks’ performances on Wednesday, telling investors what to look out for when JPMorgan, Citigroup, Bank of America and Wells Fargo release earnings reports on Friday.

These reports can set the tone for earnings season, he said.

“If you believe, as I do, that interest rates have peaked and that our economy’s almost certainly in for a soft landing — thank you, [Fed Chair] Jay Powell — then the banks should be worth owning right now,” he said. “But let’s see what happens when the four big money centers report on Friday.”

Cramer listed JPMorgan as one outfit that remains fairly well-liked on Wall Street, betting that its stock “can grind higher” over time, but may not be a top pick for the year. Bank of America and Citigroup need a few positive quarters to earn investors’ trust, with the latter especially having to prove a comeback story after it announced a major restructuring effort in September, he said.

Cramer said he’s most excited about Wells Fargo’s prospects, even though the stock recently saw two analyst downgrades. He said the company’s new management is committed to cutting costs and improving technology and suggested there may be an imminent buying opportunity.

According to Cramer, investors should pay special attention to net interest income and net interest margin, which measure what banks earn from borrowing deposits and then lending those funds at higher rates. This data can indicate the performance of a bank’s core business.

Investors should also follow commentary closely, especially about the state of consumer and corporate credit, Cramer said. Banking stocks could decline if credit quality proves to be poor, but robust credit could lead to higher earnings estimates for the rest of the year. As major credit card issuers, these outfits may also offer insight into consumer spending habits.

Finally, Cramer advised to keep an eye on financial institutions’ investment banking operations. He said there is optimism on Wall Street for a comeback this year in the sector, spurred by a burgeoning initial public offering market and more bond issuance.

“We’ve also seen a pickup in M&A, which is great for investment bankers — the advisory fees they get on these deals are phenomenal,” he said. “An investment banking comeback could allow the financials to give us some excellent performance this year.”

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January 10, 2024
CNBC Daily Open: An unpleasant surprise for crypto bros

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Omar Marques | Lightrocket | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Bitcoin slides after false ETF approval post
Bitcoin slid Tuesday after the Securities and Exchange Commission‘s social media account — which was compromised — sent a false social media post stating the regulatory agency had approved a long-awaited bitcoin exchange-traded fund. Immediately after the first post, the world’s largest cryptocurrency jumped to as high as $47,901 to its highest level since March 2022, but later traded lower by 3%.

Markets retreat
Wall Street’s benchmark S&P 500 index ended with small declines on Tuesday, closing 0.15% lower, while the Dow Jones Industrial Average shed 0.42%. The Nasdaq Composite, however, inched 0.09% higher by close as it bounced off a 0.9% slide from earlier in the session. Shares of tech stocks continued to rise and stave off bigger declines. Asia stocks bucked that trend, with Japan’s Nikkei 225 index blowing past 33-year highs after jumping more than 2%, as health tech and consumer services stocks rose.

Is China’s consumption story over?
China’s consumer sentiment may finally start to improve from here, after last year’s uneven recovery as the economy struggled to rebound from the pandemic doldrums. Goldman Sachs says that while a slowdown is somewhat inevitable, it still expects services consumption to show more resilience than goods.

HPE to buy Juniper Networks
Hewlett Packard Enterprise will buy Juniper Networks for about $14 billion in an all-cash deal, the company confirmed. That works out to about $40 per share — Juniper shares jumped 22% to close at $37.05 after the news. The acquisition will bolster HPE’s existing networking business — which was the company’s top-performing segment — and speed up growth, the company said.

[PRO] AI-related plays
Bank of America picked its “key AI suppliers,” naming its top stock picks with significant upside potential at a time when artificial intelligence is all the rage.

The bottom line

Bitcoin is arguably the world’s most popular cryptocurrency and has had a dramatic run-up in gains last year. Most of it was fueled by hype around a bitcoin exchange-traded fund that sparked a jump of about 60% in the cryptocurrency over the last three months.

A false social media post about the approval of such an ETF by the SEC was the last thing eager crypto bros were hoping for.

Market participants were anticipating an update from the regulatory authority as soon as Wednesday as it would mark the deadline for the SEC to approve or deny the application.

But bitcoin quickly sold off after the SEC said its X account had been compromised, confirming that it had not approved the Ark 21 Shares spot bitcoin ETF application, among others.

In early Asia hours, social media X said it had completed a preliminary probe into the compromised account of the SEC, noting that it was not due to any breach of X’s systems, but rather due to a “third party” and “unidentified individual.”

“The sell-off is showing a rattled market,” said Michael Rinko, research analyst at Delphi Digital. “This kind of high-volume boomerang event probably spooked some people and led to people taking some risk off the table but the initial market reaction is encouraging.”

It is, however, still widely expected to be approved by the SEC but some investors believe that considering bitcoin’s spectacular rally, it could also mean the day one effect of an approval may just turn out to be a sell-the-news event.

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January 9, 2024
CNBC Daily Open: A crypto bro’s false dream

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A neon sign indicates that Bitcoin is accepted inside the venue of the Paralelni Polis project, an organization combining art, social sciences and modern technology, in Prague, Czech Republic, on Friday, Jan. 5, 2024.

Milan Jaros | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Bitcoin slides after false ETF approval post
Bitcoin slid Tuesday after the Securities and Exchange Commission‘s social media account — which was compromised — sent a false social media post stating the regulatory agency had approved a long-awaited bitcoin exchange-traded fund. Immediately after the first post, the world’s largest cryptocurrency jumped to as high as $47,901 to its highest level since March 2022, but later traded lower by 3%.

Markets retreat
Wall Street’s benchmark S&P 500 index ended with small declines on Tuesday, closing 0.15% lower, while the Dow Jones Industrial Average shed 0.42%. The Nasdaq Composite, however, inched 0.09% higher by close as it bounced off a 0.9% slide from earlier in the session. Shares of tech stocks continued to rise and stave off bigger declines. Europe’s Stoxx 600 also ended 0.17% lower as most its main sectors fell along with other regional bourses.

Worst decade of growth
The World Bank has forecast the global economy will likely grow 2.4% in 2024. That’s lower than the 2.6% recorded in 2023, and will be the third year in a row where growth slows, according to the organization’s “Global Economic Prospects” report. Sluggish global trade and tight financial conditions will hit developing economies the hardest, the World Bank says.

HPE to buy Juniper Networks
Hewlett Packard Enterprise will buy Juniper Networks for about $14 billion in an all-cash deal, the company confirmed. That works out to about $40 per share — Juniper shares jumped 22% to close at $37.05 after the news. The acquisition will bolster HPE’s existing networking business — which was the company’s top-performing segment — and speed up growth, the company said.

[PRO] What Wall Street expects this earnings season
Big banks including Citigroup, Bank of America, JPMorgan Chase and Wells Fargo will be kicking off earnings season later this week. Investors will be looking for hints of what such companies expect for the new year, while analysts expect a “negative catalyst.”

The bottom line

Bitcoin is arguably the world’s most popular cryptocurrency and has had a dramatic run-up in gains last year. Most of it was fueled by hype around a bitcoin exchange-traded fund that sparked a jump of about 60% in the cryptocurrency over the last three months.

A false social media post about the approval of such an ETF by the SEC was the last thing eager crypto bros were hoping for.

Market participants were anticipating an update from the regulatory authority as soon as Wednesday as it would mark the deadline for the SEC to approve or deny the application.

But bitcoin quickly sold off after the SEC said its X account had been compromised, confirming that it had not approved the Ark 21 Shares spot bitcoin ETF application, among others.

“The sell-off is showing a rattled market,” said Michael Rinko, research analyst at Delphi Digital. “This kind of high-volume boomerang event probably spooked some people and led to people taking some risk off the table but the initial market reaction is encouraging.”

It is, however, still widely expected to be approved by the SEC but some investors believe that considering bitcoin’s spectacular rally, it could also mean the day one effect of an approval may just turn out to be a sell-the-news event.

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January 9, 2024
CNBC Daily Open: December jobs data is startlingly strong

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A ‘now hiring’ sign is displayed in a retail store in Manhattan on January 05, 2024 in New York City.

Spencer Platt | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Hot jobs market
The U.S. labor market added 216,000 jobs in December. That’s much more than the 170,000 expected by economists surveyed by Dow Jones, and the downwardly revised 173,000 jobs added in November. The unemployment rate held steady at 3.7%, defying estimates of a 10-basis-point rise. Meanwhile, average hourly earnings rose 4.1% from a year earlier, higher than the 3.9% forecast.

Losing week
U.S. stocks inched up slightly Friday, but couldn’t reverse a weekly decline. Treasury yields ticked up for the second day, with the 10-year yield closing at 4.051%. The pan-European Stoxx 600 index retreated 0.27%. Retail stocks fell 1.1%, leading sector losses, after data showed German retail sales fell 2.5% for the month, much more than estimates of a 0.1% slide.

Grounded airplanes
The U.S. Federal Aviation Administration has ordered a temporary grounding of the Boeing 737 Max 9 aircraft, which means airlines won’t be able to use those particular Boeing models for flying. The directive comes after a piece of the aircraft blew out in the middle of an Alaska Airlines flight, leaving a gaping hole on the side of the plane.

Potential Apple lawsuit
Apple just can’t catch a break. Fresh off a downgrade to its shares by Barclays and Piper Sandler, the technology giant is potentially facing an antitrust lawsuit by the U.S. Department of Justice, according to a report from The New York Times. The lawsuit could target how the Apple Watch works exclusively with the iPhone, as well as the company’s iMessage service, which excludes non-Apple devices.

[PRO] Numbers to watch
The U.S. consumer price index report comes out Thursday this week, and will be the major catalyst for markets as investors assess if the U.S. Federal Reserve is edging closer to its goal of keeping inflation at 2%. But don’t neglect Friday, which is jam-packed with earnings reports from big banks such as JPMorgan Chase, Citigroup and Bank of America.

The bottom line

The headline number on the U.S. jobs report’s undeniably startling — 216,000 new jobs in December, compared with an expected 170,000. The unemployment rate defied forecasts for it to fall, while average hourly earnings were higher than estimates too.

The data suggests the U.S. labor market’s still running hot despite the 11 interest-rate hikes implemented by the Federal Reserve.

But the numbers aren’t so drastic that rate hikes could be back on the table. Look more closely and you’ll find pockets of weakness in the report.

The headline number, expectation-busting as it is, probably won’t persuade the Fed to resume hiking.

“While the Dow Jones estimate is for a nonfarm payrolls gain of 170,000, Art Hogan, chief market strategist at B. Riley Financial, said the acceptable range is really something like 100,000-250,000,” CNBC’s Jeff Cox noted.

Consider also how October and November’s jobs numbers were downwardly revised, which point to a weaker-than-expected labor market last quarter. And when viewed on an annual basis, 2023 saw job growth of 2.7 million, dramatically lower than 2022’s addition of 4.8 million jobs.

The theme of growth continuing — but slowing — was also seen in December’s ISM services index, which measures business activity, such as price and inventory levels. The reading came in at 50.6%, indicating growth in the service sector, but that’s nearly two percentage points below expectations as well as November’s reading.

That’s probably why stocks managed to eke out small gains Friday, despite the shock of the headline jobs number.

The S&P 500 added 0.18%, the Dow Jones Industrial Average inched up 0.07% and the Nasdaq Composite ticked up 0.09%.

But those marginal increases couldn’t prevent major indexes from registering their first negative week in 10. For the week, the S&P fell 1.52%, the Dow lost 0.59% and the Nasdaq slumped 3.25%, its biggest decline since September.

Investors hoping for a positive catalyst for markets will be keeping their fingers crossed, hoping December’s consumer price index report comes in cooler than expected.

— CNBC’s Jeff Cox contributed to this report.

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January 7, 2024
The Fed's July rate increase is likely its last which is good for bank stocks: RBC's Cassidy

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Gerard Cassidy, RBC, joins 'Closing Bell Overtime' to talk bank stocks and his 2024 playbook.

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December 29, 2023
Bank stocks are poised to outperform broader markets in 2024, says RBC's Gerard Cassidy

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RBC's Gerard Cassidy joins 'Fast Money' to talk his outlook for bank stocks in 2024.

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December 28, 2023
CNBC Daily Open: Worst day in months for markets as FedEx slumps

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Parcels are seen in a street nearby UPS and FedEx trucks in a street of the Manhattan borough in New York City on December 4, 2023.

Charly Triballeau | AFP | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Worst day in months
U.S. markets fell Wednesday, with all major indexes snapping their winning streaks in one of their worst trading sessions in months. Still, U.S. Treasury yields continued to dip. Asia-Pacific markets lost ground Thursday, following Wall Street lower. South Korea’s Kospi Index slipped 0.77% even as the country’s producer prices rose at their slowest pace in four months.

Citi shutters another unit
Citigroup is closing its global distressed-debt group, CNBC has learned from people with direct knowledge of the move. That closure follows last week’s announcement that the bank’s shuttering its municipal-bond trading operations. CEO Jane Fraser is in the process of restructuring Citigroup, exiting businesses with poor returns to help the bank hit its performance targets.

Clock’s ticking on watch ban
Apple has failed in its bid to delay a ban on sales of Apple Watch, according to an International Trade Commission filing. That means only a White House intervention will let Apple continue selling its watches in the U.S. Joe Kiani, CEO of Masimo — the company involved in the intellectual property dispute with Apple — told CNBC on Monday that Apple had not reached out to settle.

Tesla’s the “it” stock
Out of all securities on the U.S. market, Tesla’s on pace to attract the most amount of individual investor dollars in 2023, according to data from Vanda Research. That means inflows into the stock will surpass the SPDR S&P 500 ETF Trust, which tracks the largest index in the world. To put Tesla’s popularity in perspective, it wasn’t even among the top 20 stocks retail investors bought before 2019.

[PRO] Diversify your portfolio
The upcoming year presents several challenges to investors. A recession might hit the U.S. economy, geopolitical risks might escalate and inflation might rebound. CNBC Pro spoke to three investment experts to find out how to create a diversified portfolio that can hedge against volatility in 2024.

The bottom line

FedEx‘s performance is often seen as a bellwether for the general economy. When businesses ship fewer parcels, it tends to indicate a slowdown in economic activity.

So, when FedEx issued a worse-than-expected forecast for its current fiscal year, and reported disappointing second-quarter results, it wasn’t solely a warning for investors in the company. FedEx, whose stock sank 12.05%, may also signal trouble for the broader market, according to Wolfe Research.

″[W]hile volatile at times, the correlation between FDX and the S&P has been a solid one,” Wolfe Research managing director Rob Ginsberg wrote on Monday. “Now, it probably won’t derail the year-end melt-up, but given the multitude of overbought conditions and stretched indicators, a market pricing in perfection just got a bit of troubling news.”

And markets indeed had a bad day. The S&P 500 tumbled 1.47%, the most it’s lost in one session since September. Meanwhile, the Dow Jones Industrial Average fell 1.27% and the Nasdaq Composite lost 1.5% — both indexes snapped their nine-day winning streaks in their worst day since October.

That disappointing showing, however, doesn’t necessarily mean the start of a prolonged slide for markets. Treasury yields are still dipping, which tends to boost stocks. There were also pockets of strength amid the sell-off yesterday. Alphabet, for instance, gained 1.24% and touched a new 52-week high during the session. Consumer confidence in December also picked up, according to the Conference Board.

Keith Buchanan, senior portfolio manager at Globalt Investments, said market losses were “more technical than fundamental,” meaning it was more the breakneck pace at which stocks had been rallying that posed a risk, rather than their intrinsic value.

“Markets were becoming overbought, and a pullback like this is natural given those conditions,” Buchanan said.

As any recipient of a FedEx package knows, a delayed delivery isn’t the end of the world; you just have to move past the hiccup. The same goes for markets.

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December 20, 2023
CNBC Daily Open: Markets see worst day in months on FedEx slump

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A FedEx truck and cars commute on Highway 101 during heavy rain in San Francisco Bay Area of California, United States on December 20, 2023.

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This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Worst day in months
U.S. markets fell Wednesday, with all major indexes snapping their winning streaks in one of their worst trading sessions in months. Still, U.S. Treasury yields continued to dip. Europe’s Stoxx 600 climbed 0.19%, while the U.K.’s FTSE 100 jumped 1.02% to hit a three-month high on positive inflation news.

UK inflation’s looking OK
U.K. inflation slid to 3.9% in November, the lowest annual reading since September 2021. That figure’s lower than the 4.4% economists had expected, and the 4.6% reading in October. Moreover, prices actually fell 0.2% for the month, compared with estimates of a 0.1% rise. Core consumer price index was also lower than expected, prompting a sharp fall in U.K. 10-year gilt yield.

Citi shutters another unit
Citigroup is closing its global distressed-debt group, CNBC has learned from people with direct knowledge of the move. That closure follows last week’s announcement that the bank’s shuttering its municipal-bond trading operations. CEO Jane Fraser is in the process of restructuring Citigroup, exiting businesses with poor returns to help the bank hit its performance targets.

Tesla’s the “it” stock
Out of all securities on the U.S. market, Tesla’s on pace to attract the most amount of individual investor dollars in 2023, according to data from Vanda Research. That means inflows into the stock will surpass the SPDR S&P 500 ETF Trust, which tracks the largest index in the world. To put Tesla’s popularity in perspective, it wasn’t even among the top 20 stocks retail investors bought before 2019.

[PRO] Due for a breather
Despite the massive rally in markets last week — and, indeed, since November — several strategists are cautioning their clients to be defensive, especially when it comes to the new year. The “rally is ripe for a breather,” wrote one Wall Street strategist, because earnings might falter in 2024.

The bottom line

FedEx‘s performance is often seen as a bellwether for the general economy. When businesses ship fewer parcels, it tends to indicate a slowdown in economic activity.

So, when FedEx issued a worse-than-expected forecast for its current fiscal year, and reported disappointing second-quarter results, it wasn’t solely a warning for investors in the company. FedEx, whose stock sank 12.05%, may also signal trouble for the broader market, according to Wolfe Research.

″[W]hile volatile at times, the correlation between FDX and the S&P has been a solid one,” Wolfe Research managing director Rob Ginsberg wrote on Monday.

“Now, it probably won’t derail the year-end melt-up, but given the multitude of overbought conditions and stretched indicators, a market pricing in perfection just got a bit of troubling news.”

And markets indeed had a bad day. The S&P 500 tumbled 1.47%, the most it’s lost in one session since September. Meanwhile, the Dow Jones Industrial Average fell 1.27% and the Nasdaq Composite lost 1.5% — both indexes snapped their nine-day winning streaks in their worst day since October.

That disappointing showing, however, doesn’t necessarily mean the start of a prolonged slide for markets. Treasury yields are still dipping, which tends to boost stocks. There were also pockets of strength amid the sell-off yesterday. Alphabet, for instance, gained 1.24% and touched a new 52-week high during the session. Consumer confidence in December also picked up, according to the Conference Board.

Keith Buchanan, senior portfolio manager at Globalt Investments, said market losses were “more technical than fundamental,” meaning it was more the breakneck pace at which stocks had been rallying that posed a risk, rather than the their intrinsic value.

“Markets were becoming overbought, and a pullback like this is natural given those conditions,” Buchanan said.

As any recipient of a FedEx package knows, a delayed delivery isn’t the end of the world; you just have to move past the hiccup. The same goes for markets.

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December 20, 2023
Citigroup to close global distressed-debt business as part of CEO Jane Fraser's overhaul

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A trader works underneath a monitor displaying Citigroup Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on June 3, 2016.

Michael Nagle | Bloomberg | Getty Images

Citigroup is shuttering another Wall Street business as CEO Jane Fraser pushes ahead with her overhaul of the bank, CNBC has learned.

The company decided to close its global distressed-debt group, according to people with direct knowledge of the move.

Citigroup is exiting businesses with poor returns to bolster the bank’s odds of hitting Fraser’s performance targets. Fraser announced the latest overhaul of the third biggest U.S. bank by assets in September, and has since moved to trim executives and pare back businesses. Internally, the effort is known as Project Bora Bora.

Last week, the bank announced it was closing its municipal-bond trading operations, a once-thriving business with about 100 employees that had fallen on hard times.

The distressed-debt group, which trades the bonds and other securities of companies in or approaching bankruptcy, employs about 40 people, said the people, who declined to be identified speaking about strategic moves.

Citigroup didn’t immediately comment for this piece.

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December 20, 2023
Citigroup employees, on edge over layoffs, told they can work remotely until the new year

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Jane Fraser, CEO of Citigroup, testifies during a Senate Banking Committee hearing at the Hart Senate Office Building on December 06, 2023 in Washington, DC.

Win Mcnamee | Getty Images

Citigroup told most of its employees that they can work remotely the final two weeks of December, CNBC has learned.

Workers can log in remotely from anywhere in their country of employment from Monday to Dec. 29, a Friday, making this week the last in-person experience this year for many staffers, according to people with knowledge of the situation.

The policy applies to hybrid workers, which make up the majority of the bank’s 240,000 employees, said the people, who declined to be identified speaking about personnel.

Unlike last year, when the perk was introduced, employees are on edge over CEO Jane Fraser‘s sweeping corporate reorganization, and some expressed concern over whether their jobs will still exist next year. Citigroup has said that Fraser’s review of the third biggest U.S. bank by assets will be complete by the end of March.

The project, known internally by its code name Bora Bora, has already resulted in executive departures and the shuttering of the firm’s municipal bond business. Citigroup will disclose severance expenses tied to the project in January and again in April, the bank has said.

“This past year has been one of significant change across the firm, and as we approach the end of 2023, we look forward to this special time of year,” Citigroup’s human resources chief said last week in a staff memo announcing the remote policy.

“We hope that you will enjoy a break from commuting while continuing to stay focused on closing out the year,” the HR chief said.

Read more: Citigroup considers deep job cuts for CEO Jane Fraser’s overhaul, called ‘Project Bora Bora’

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December 15, 2023
Citigroup closes municipal underwriting and market-making unit, memo shows

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The Citigroup Center in midtown Manhattan is shown in this July 14, 2014 photo.

Timothy A. Clary | AFP | Getty Images

Citigroup has decided to close its municipal underwriting and market-making activities, according to a memo seen by Reuters.

“The economics of these activities are no longer viable given our commitment to increase the firm’s overall returns,” said the memo, signed by Citigroup’s head of markets Andy Morton and Peter Babej, interim head of banking.

The memo added that the bank will unwind the unit in the first quarter and that most people working there will leave. Discussions about the future of the unit led to a team of bankers leaving for Jefferies last month.

Bloomberg reported the memo earlier on Thursday.

Citi’s municipal offering business has been under scrutiny from the Texas attorney general, who in January halted the bank’s ability to underwrite most municipal bond offerings in Texas, saying the bank had discriminated against the firearms sector.

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December 14, 2023
Regulators caught Wells Fargo, other banks in probe over mortgage pricing discrimination

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People pass by a Wells Fargo bank on May 17, 2023 in New York City.

Spencer Platt | Getty Images

Wells Fargo was snared in an industrywide probe into mortgage bankers’ use of loan discounts last year, CNBC has learned.

The discounts, known as pricing exceptions, are used by mortgage personnel to help secure deals in competitive markets. At Wells Fargo, for instance, bankers could request pricing exceptions that typically lowered a customer’s APR by between 25 to 75 basis points.

The practice, used for decades across the home loan industry, has triggered regulators’ interest in recent years over possible violations of U.S. fair lending laws. Black and female borrowers got fewer pricing exceptions than other customers, the Consumer Financial Protection Bureau has found.

“As long as pricing exceptions exist, pricing disparities exist,” said Ken Perry, founder of a Washington-based compliance firm for the mortgage industry. “They’re the easiest way to discriminate against a client.”

Wells Fargo received an official notice from the CFPB called an MRA, or Matter Requiring Attention, on problems with its discounts, said people with knowledge of the situation. It’s unclear if regulators accused the bank of discrimination or sloppy oversight. The bank’s internal investigation on the matter extended into late this year, said the people.

Wells Fargo, until recently the biggest player in U.S. mortgages, has repeatedly felt regulators’ wrath over missteps involving home loans. In 2012, it paid more than $184 million to settle federal claims that it charged minorities higher fees and unjustly put them into subprime loans. It was fined $250 million in 2021 for failing to address problems in its mortgage business, and more recently paid $3.7 billion for consumer abuses on products including home loans.

The behind-the-scenes actions by regulators at Wells Fargo, which hadn’t been reported before, happened in the months before the company announced it was reining in its mortgage business. One reason for that move was the heightened scrutiny on lenders since the 2008 financial crisis.

Wells Fargo later hired law firm Winston & Strawn to grill mortgage bankers whose sales included high levels of the discounts, said the people, who declined to be identified speaking about confidential matters.

‘Proud’ bank

In response to this article, a company spokeswoman had this statement:

“Like many in the industry, we take into consideration competitor pricing offers when working with our customers to get a mortgage,” she said. “As part of our renewed focus on supporting underserved communities through our Special Purpose Credit Program, we have spent more than $100 million over the last year to help more minority families achieve and sustain homeownership, including offering deep discounts on mortgage rates.”

Wells Fargo was “proud to be the largest bank lender to minority families,” she added.

The bank had this additional statement later Monday: “While we cannot comment on any regulatory matters, we don’t discriminate based on race, gender or age or any other protected basis.”

Wells Fargo stock vs the Financial Select Sector SPDR Fund

Regulators have ramped up their crackdown on fair lending violations recently, and other lenders besides Wells Fargo have been involved. The CFPB launched 32 fair lending probes last year, more than doubling the investigations it started since 2020.

Several banks received MRAs about lending practices last year, the agency said without naming any of the institutions. The CFPB declined to comment for this article.

‘Statistically significant’

The issue with pricing exceptions is that by failing to properly track and manage their use, lenders have run afoul of the Equal Credit Opportunity Act (ECOA) and a related anti-discrimination rule called Regulation B.

“Examiners observed that mortgage lenders violated ECOA and Regulation B by discriminating against African American and female borrowers in the granting of pricing exceptions,” the CFPB said in a 2021 report.

The agency found “statistically significant disparities” in the rates in which Black and female borrowers got pricing exceptions compared to other customers.

After its initial findings, the CFPB conducted more exams and said in a follow-up report this year that problems continued.

“Institutions did not effectively monitor interactions between loan officers and consumers to ensure that the policies were followed and that the loan officer was not coaching certain consumers and not others regarding the competitive match process,” the agency said.

Honor system

In other cases, mortgage personnel failed to explain who initiated the pricing exception or ask for documents proving competitive bids actually existed, the CFPB said.

That tracks with the accounts of multiple current and former Wells Fargo employees, who likened the process to an “honor system” because the bank seldom verified whether competitive quotes were real.

“You used to be able to get a half percentage off with no questions asked,” said a former loan officer who operated in the Midwest. “To get an additional quarter point off, you’d have to go to a market manager and plead your case.”

Pricing exceptions were most common in expensive housing regions of California and New York, according to an ex-Wells Fargo market manager who said he approved thousands of them over two decades at the company. In the years the bank reached for maximum market share, top producers chased loan growth with the help of pricing exceptions, this person said.

Change of policy

In an apparent response to the regulatory pressure, Wells Fargo adjusted its policies at the start of this year, requiring hard documentation of competitive bids, said the people. The move coincided with the bank’s decision to focus on offering home loans only to existing customers and borrowers in minority communities.

Many lenders have made pricing exceptions harder for loan officers to get and improved documentation of the process, though the discounts haven’t disappeared, according to Perry.

JPMorgan Chase, Bank of America and Citigroup declined to comment when asked whether they had received MRAs or changed their internal policies regarding rate discounts.

With reporting from CNBC’s Christina Wilkie

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December 11, 2023
CNBC Daily Open: Caution in the air as stock rally stalls

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The Wall Street and Broad Street signs outside the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 4, 2023.

Bloomberg | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Rally falters
The Dow Jones Industrial Average and the S&P 500 closed lower for a third straight day Wednesday — a first for both indexes since October. The Dow fell 0.19%, while the S&P 500 shed 0.39%. The Nasdaq Composite dropped 0.58%. Investors assessed data indicating falling inflation and awaited the monthly jobs report. Asia markets also fell, with Japan’s Nikkei 225 leading losses, down 1.72%.

Jobs slowdown
Payrolls processing firm ADP said Wednesday that private sector job creation slowed further in November and wages showed their smallest growth in more than two years. Companies added 103,000 workers for the month, slightly below the downwardly revised 106,000 in October and missing the 128,000 Dow Jones estimate.

Crypto demons
Jamie Dimon, CEO of JPMorgan Chase, lashed out at bitcoin and its peers, suggesting cryptocurrencies should be banned in remarks on Wednesday on Capitol Hill. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” he said. “The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance.” “If I was the government, I’d close it down,” he added. The price of bitcoin recently topped $44,000.

Oil slips
The West Texas Intermediate contract for January fell $2.94, or 4.07%, to settle at $69.38 a barrel Wednesday, closing at the lowest level since late June. Retail gasoline prices hit their lowest since January ahead of the holiday shopping and travel season. The Brent contract for February declined $2.90, or 3.76%, to settle at $74.30 a barrel.

[PRO] Forget the ‘obvious’ AI stocks
Artificial intelligence has been a huge theme this year, with investors rushing into many AI-related stocks. Nvidia soared over 200% year to date, and Microsoft around 56%. But not all AI-related stocks are necessarily too expensive to buy right now.

The bottom line

Wall Street's main indexes are starting to show signs of not being able to sustain a fiery rally that led to a five-week winning streak.

The blue-chip Dow and the benchmark S&P 500 have now fallen for three straight days. Caution is in the air.

A string of labor data through the week has set the tone for markets ahead of the Federal Reserve's last policy meeting of the year next week.

The numbers so far have shown that the U.S. central bank's aggressive policy stance has taken hold.

November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Fed, was easing.

"ADP's payroll data shows the Fed's anti-inflation treatment is now really taking effect," said David Russell, global head of market strategy at online investing platform TradeStation.

"The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It's the Fed's battle to lose at this point."

Data on Tuesday which showed job openings in October fell to the lowest level since March 2021.

But as the week edges closer to an end, the focus will mainly shift to the Labor Department's keenly watched November employment report on Friday.

— Jeff Cox contributed to this story.

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December 6, 2023
CNBC Daily Open: Three days is a streak

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People walk by the New York Stock Exchange (NYSE) on November 02, 2023 in New York City.

Spencer Platt | Getty Images News | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Rally falters
The Dow Jones Industrial Average and the S&P 500 closed lower for a third straight day Wednesday — a first for both indexes since October. The Dow fell 0.19%, while the S&P 500 shed 0.39%. The Nasdaq Composite dropped 0.58%. Investors assessed data indicating falling inflation and the monthly jobs report loomed. European markets on the other hand, closed higher, with the Stoxx 600 index up 0.6%.

Jobs slowdown
Payrolls processing firm ADP said Wednesday that private sector job creation slowed further in November and wages showed their smallest growth in more than two years. Companies added 103,000 workers for the month, slightly below the downwardly revised 106,000 in October and missing the 128,000 Dow Jones estimate.

Crypto Demons
Jamie Dimon, CEO of JPMorgan Chase, lashed out at bitcoin and its peers, suggesting cryptocurrencies should be banned in remarks on Wednesday on Capitol Hill. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” he said. “The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance.” “If I was the government, I’d close it down,” he added. The price of bitcoin recently topped $44,000.

Oil slips
The West Texas Intermediate contract for January fell $2.94, or 4.07%, to settle at $69.38 a barrel Wednesday, closing at the lowest level since late June. Retail gasoline prices hit their lowest since January ahead of the holiday shopping and travel season. The Brent contract for February declined $2.90, or 3.76%, to settle at $74.30 a barrel.

[PRO] Bitcoin’s path to $50,000
After spending much of 2023 stuck near $30,000, bitcoin broke above $40,000 last weekend and has remained above that level for much of this week. Now the next stop could be close to $50,000.

The bottom line

Wall Street's main indexes are starting to show signs of not being able to sustain a fiery rally that led to five straight weeks of gains.

The blue-chip Dow and the benchmark S&P 500 have now clocked a three-day losing streak. Caution is in the air.

A string of labor data through the week has set the tone for markets ahead of the Federal Reserve's last policy meeting of the year next week.

The numbers so far have shown that the U.S. central bank's aggressive policy stance has taken hold.

November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Fed, was easing.

"ADP's payroll data shows the Fed's anti-inflation treatment is now really taking effect," said David Russell, global head of market strategy at online investing platform TradeStation.

"The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It's the Fed's battle to lose at this point."

Data on Tuesday which showed job openings in October fell to the lowest level since March 2021.

But as the week edges closer to an end, the focus will mainly shift to the Labor Department's keenly watched November employment report on Friday.

— Jeff Cox contributed to this story.

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December 6, 2023