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Dow Jones Futures: Netflix Earnings Crush Views, Marijuana Stock Cronos Group Soars; IBM Dives Investor's Business Daily
Shares of Bank of America Corp. BAC, +2.02% rose 1.8% in premarket trading Wednesday, after the bank reported a third-quarter profit that fell less than expected, while revenue surprisingly increased, as consumer and global banking and wealth and investment management revenue increased to offset a slight decline in global markets revenue. Net income fell to $5.78 billion, or 56 cents a share, from $7.17 billion, or 66 cents a share, in the year-ago period. Total revenue rose to $22.81 billion from $22.72 billion, while the FactSet consensus was for a decline to $22.58 billion. Net interest income grew to $12.19 billion from $12.06 billion, above the FactSet consensus of $12.15 billion, and non-interest income slipped to $10.62 billion from $10.66 billion but topped expectations of $10.38 billion. Average loans rose 5% to $9 billion, driven by residential mortgages. Equities revenue grew 13% to $1.1 billion, helped by growth in client financing activities, while fixed income, currency and commodities revenue was flat at $2.1 billion as improvement in mortgages and municipal products was offset by weaker trading in FX and credit products. The stock has gained 2.6% over the past three months through Tuesday, while the Dow Jones Industrial Average DJIA, +0.89% has slipped 1.1%.
Broadcom Corp. signage is displayed outside of the company's headquarters in Irvine, California.
Patrick Fallon | Bloomberg | Getty Images
Broadcom has been ordered to stop applying certain exclusivity deals it has with six of its customers, amid an antitrust investigation carried out by the European Union.
The Brussels-based institution believes that part of Broadcom's business could be creating "serious and irreparable harm to competition."
The European Commission opened an in-depth investigation into the U.S. company in June. As part of this investigation, the Commission announced Wednesday that it's imposing interim measures to prevent any likely "harm" to competition, for three years. Broadcom must comply with these measures within 30 days from Wednesday.
"We have strong indications that Broadcom, the world's leading supplier of chipsets used for TV set-top boxes and modems, is engaging in anti-competitive practices," Margrethe Vestager, the EU's competition chief, said in a statement.
"We cannot let this happen, or else European customers and consumers would face higher prices and less choice and innovation. We, therefore, ordered Broadcom to immediately stop its conduct," Vestager added.
Broadcom, which is a major supplier to Apple, can choose to appeal to Wednesday's decision. Khanh Lam, spokesperson for Broadcom told CNBC via email: "Broadcom's contracts with the customers that the European Commission characterizes as exclusivity-inducing remain in force, other than the provisions at issue, and we intend to continue to support these customers going forward. We do not believe that these provisions have a meaningful effect on whether the customers choose to purchase Broadcom products."
The same spokesperson added: "We intend to appeal the Commission's decision to the European Courts and in the meantime comply with the Commission's order."
Broadcom shares closed at 290.32 on Tuesday, up by about 3% on the day. The stock is about 14% higher over the last 12 months.
Wednesday's decision marks the first time in 18 years that the European Commission has decided to implement interim measures, opening a precedent to ongoing and future competition probes.
"It is for me something special. It doesn't say that now we have all cases lined up, where interim measures will be used, but it means that the tool is on the table and if we find cases that live up to the two things that have to be fulfilled at the same time, yes we will indeed use interim measures more often," Vestager told reporters in Brussels on Wednesday.
JPMorgan Chase (JPM), the largest U.S. bank by assets, reported third-quarter earnings on Tuesday that surpassed Wall Street’s expectations, boosted by broad strength in nearly all its major business lines.
Here were the key figures from the report, compared to consensus expectations compiled by Bloomberg:
Revenue: $29.3 billion vs. $28.46 billion expected
Adj. earnings: $2.68 per share, vs. $2.34 per share expected
Revenue for the quarter set a record, and was even higher on an adjusted basis at $30.06 billion.
“The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels. This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade,” said CEO Jamie Dimon.
JPMorgan maintained its No. 1 spot for global investment banking fees, with 9.3% of the wallet share this year. Dimon noted that the firm had a record quarter for investment banking fees with "particularly strong performance in [Debt Capital Markets] and [Equity Capital Markets]." Banking revenue for the quarter was $3.3 billion, up 2% from the same quarter a year ago. Investment banking revenue was $1.9%, up 8% on higher underwriting fees.
Total markets revenue came in at $5.1 billion, up 14% from last year. Fixed income revenue rebounded 25% to come in at $3.6 billion, "driven by strong client activity across products." Equity markets revenue slipped 5% to $1.5 billion "reflecting lower revenues in derivatives."
Elsewhere, in the consumer and community bank, credit card sales volume rose 10% in the quarter, while merchant processing jumped 11%.
The stock, traded on the New York Stock Exchange, jumped more than 2% from Monday’s close to trade near $119.
JPMorgan kicked earnings season off for the big financials. Goldman Sachs (GS), Wells Fargo (WFC), Citigroup (C) will report results on Tuesday, followed by Bank of America (BAC) on Wednesday and Morgan Stanley (MS) on Thursday.
This story is developing.
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Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.
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A WeWork logo is seen at a WeWork office in San Francisco, September 30, 2019.
Kate Munsch | Reuters
WeWork is expected to lay off at least 2,000 people, about 13% of its staff, as soon as this week, the Guardian newspaper reported.
WeWork staff told the Guardian that they believe the cuts will not stop there, suggesting more of the company's 15,000 person workforce could be sacked. The Information reported in September that executives and bankers have discussed cutting up to a third of those workers. The embattled start-up is attempting to turn its fortunes around with painful cost reduction measures.
Employees also told the Guardian that little to no work is getting done at the company and new projects have been put on hold.
WeWork declined to comment to the Guardian. Representatives for the company did not immediately respond to CNBC's request for additional comment.
Last month, the start-up pulled the plug on plans to go public. Its much-anticipated IPO prospectus in August revealed a massive $900 million loss in the first six months of 2019 and drew skepticism over its corporate governance. WeWork had a private market valuation of about $47 billion but its potential value in the public market had been slashed significantly.
There has also been a showdown between former CEO Adam Neumann and SoftBank chief Masayoshi Son, who has invested billions into the start-up. Neumann stepped down last month. It was also reported that SoftBank has readied a financing package to take control of the company and further sideline Neumann, who is also a co-founder.
WeWork rents out office spaces to start-ups, freelancers and enterprises by investing in real estate in some of the most expensive markets around the world. It makes money back over time as companies and individuals pay their rent or membership fees.
Read more about the Guardian's report on WeWork's plans to sack 2,000 staff here.
— CNBC's Alex Sherman and Lauren Feiner contributed to this report.
A WeWork logo is seen at a WeWork office in San Francisco, September 30, 2019.
Kate Munsch | Reuters
WeWork is expected to lay off at least 2,000 people, about 13% of its staff, as soon as this week, the Guardian newspaper reported.
WeWork staff told the Guardian that they believe the cuts will not stop there, suggesting more of the company's 15,000 person workforce could be sacked. The Information reported in September that executives and bankers have discussed cutting up to a third of those workers. The embattled start-up is attempting to turn its fortunes around with painful cost reduction measures.
Employees also told the Guardian that little to no work is getting done at the company and new projects have been put on hold.
WeWork declined to comment to the Guardian. Representatives for the company did not immediately respond to CNBC's request for additional comment.
Last month, the start-up pulled the plug on plans to go public. Its much-anticipated IPO prospectus in August revealed a massive $900 million loss in the first six months of 2019 and drew skepticism over its corporate governance. WeWork had a private market valuation of about $47 billion but its potential value in the public market had been slashed significantly.
There has also been a showdown between former CEO Adam Neumann and SoftBank chief Masayoshi Son, who has invested billions into the start-up. Neumann stepped down last month. It was also reported that SoftBank has readied a financing package to take control of the company and further sideline Neumann, who is also a co-founder.
WeWork rents out office spaces to start-ups, freelancers and enterprises by investing in real estate in some of the most expensive markets around the world. It makes money back over time as companies and individuals pay their rent or membership fees.
Read more about the Guardian's report on WeWork's plans to sack 2,000 staff here.
— CNBC's Alex Sherman and Lauren Feiner contributed to this report.
U.S. stock index futures were higher Tuesday morning, as traders look ahead to a new earnings season.
At around 04:10 a.m. ET, Dow futures rose 100 points, indicating a positive open of more than 102 points. Futures on the S&P and Nasdaq were both also higher.
Overall, market players are monitoring developments on the trade front. U.S. Treasury Secretary Steven Mnuchin told CNBC that tariffs will go up in December if there is no deal in place with China.
"I have every expectation if there's not a deal those tariffs would go in place, but I expect we'll have a deal," Mnuchin said Monday.
Furthermore, the U.S. has also decided to stop trade negotiations with Turkey and raised its steel prices to 50%. The decision followed an earlier U.S. announcement to remove all U.S. troops from the northern border of Syria with Turkey.
Investors are also looking ahead to a new earnings season. BlackRock, Citigroup, Goldman Sachs, Wells Fargo and J.P. Morgan Chase are set to release their latest performance numbers before the bell. United Airlines and Interactive Brokers will also release earnings after the bell.
On the data front, the Empire State manufacturing figures are due to be released at 08:30 a.m. ET.
