Connect with us


Dow Tumbles 800 Points As Heavy Selling Returns to Wall Street Following Poor Target, Walmart Results

Rebekah Fuller



U.S. stocks fell Wednesday after another major retailer warned of rising cost pressures, confirming the fears over inflation that have sent major benchmarks to big losses so far this year.

The Dow Jones Industrial Average shed 530 points, or 1.7%, with the average set for its first loss in four days. S&P 500 traded 1.9% lower, while the Nasdaq Composite slipped 1.9%.

Those losses come after a disappointing earnings report from Target. Shares tumbled more than 23% Wednesday after Target reported first-quarter earnings that were much lower than Wall Street estimated because of higher costs for fuel and compensation. The retailer also saw lower-than-expected sales for discretionary merchandise like TVs.

Target’s report comes right after Walmart on Tuesday posted earnings that fell short of expectations as it too cited higher fuel and labor costs. Walmart shares ended Tuesday lower by 11%. They were down another 2% on Wednesday.

“Any company that relies on households and discretionary purchases will likely suffer this quarter because a lot of discretionary income has been funneled to food and energy prices,” said Jack Ablin, founding partner of Cresset Capital.

Loading chart…

Other retailers took a hit on the back of Target’s quarterly earnings miss. Best Buy’s stock price dropped more than 10%, Dollar General’s fell more than 10%, and Dollar Tree’s declined more than 12%. Shares of Macy’s dropped 11%, while shares of Kohl’s fell more than 9%.

Lowe’s shares fell more than 3% after missing sales expectations in its first quarter report as shoppers bought fewer supplies for outdoor projects.

Meanwhile, TJ Maxx-parent TJX Companies was a notable retail outlier as shares surged 9% after the department store chain reported an earnings beat.

Wednesday’s market reversal comes after shares had been mounting a comeback off the year’s lows. On Tuesday, the Dow rose 431 points, or 1.3%, while the S&P 500 gained 2% and the Nasdaq Composite climbed nearly 2.8%.

The Dow has declined for seven straight weeks, but stocks had stabilized over the previous three trading sessions. Last week, the S&P 500 fell to the brink of a bear market — or 20% below its record high — but the index has now gained 4% since Thursday’s close.

Despite the recent comeback, the S&P 500 is down 15% for the year, while the Nasdaq Composite is off by 24%.

Gas prices have steadily marched higher, contributing to inflationary pressures seen across the economy. The national average for a gallon of regular gasoline hit a record $4.567 on Wednesday, according to AAA. Prices are 48 cents more than a month ago, and $1.52 more than what consumers paid last year.

Every single state is now averaging above $4 per gallon, with some states paying much more. In California, the statewide average has crossed $6.

The yield on the benchmark 10-year Treasury note briefly topped 3% on Wednesday morning as investors weighed the prospects of tighter monetary policy.

Stocks and other risk assets have been pressured by inflation and the Federal Reserve’s attempt to tamp down price increases through rate hikes, which has led to concerns about a potential recession. Fed Chair Jerome Powell said at a Wall Street Journal conference on Tuesday that “there won’t be any hesitation” about raising rates until inflation is under control.

— CNBC’s Pippa Stevens contributed to this report.

Read More

Original Source:


Disgraced Rep. Santos Defiant After Local GOP Officials Call for ‘immediate’ Resignation Over Campaign Lies

Rebekah Fuller



(The press conference is scheduled to start at 11:30 a.m. ET. Please refresh the page if the above video doesn’t start at that time.)

The Nassau County Republican Committee and dozens of local elected GOP officials from New York are making a “major announcement” on Wednesday about freshman Rep. George Santos, R-N.Y. who is under scrutiny by federal and local lawmakers for embellishing key elements of his resume.

The Republican county political committee, which is chaired by Joseph Cairo, said in press release announcing the event that Santos is a “disgraced” member of Congress, but he did not provide details on the upcoming remarks. Santos has been caught embellishing and, at times, outright lying, about his past, including his claims that he worked on Wall Street.

Santos has apologized to anyone “disappointed by resume embellishments,” but he vehemently denies committing any crimes.

Cairo has previously said that Santos has “broken the public trust by making serious misstatements regarding his background, experience and education, among other issues.” As a member of Congress, Santos represents parts of Queens and Nassau County, a region of Long Island in New York. House Republican leadership have been quiet regarding Santos since he’s been sworn into Congress.

“Obviously, he’s addressed some of the concerns that we’ve had. In New York, they’re having a lot of internal conversations too. But at the end of the day, you know, he was seated, nobody objected to him being seated,” House Republican Majority Leader Steve Scalise, R-La., told CNBC on Wednesday after being asked whether Santos will serve his full two-year term.

Santos has said that all he’s guilty of is embellishing his resume and has committed no crimes.

The lies and embellishments he told during the election have also led to scrutiny from prosecutors in the Eastern District of New York who are examining Santos’ finances, including potential irregularities involving financial disclosures and an over $700,000 loan Santos made to his campaign while he was running for Congress during the 2022 midterms, according to NBC News.

The Campaign Legal Center, a nonpartisan campaign finance watchdog, filed an ethics complaint with the Federal Election Commission against Santos on Monday for allegedly violating campaign finance laws. Santos told reporters that he’s done nothing unethical.

Santos’ fundraising efforts during his successful 2022 run was also based, in part, on some of the false claims he’s made about his past. He would suggest to donors that he was Jewish when he was not and falsely told people he worked at Wall Street banks that don’t have any record of his employment. A Santos campaign staffer impersonated as Kevin McCarthy’s chief of staff in order to raise money for the campaign, CNBC and The Washington Times reported.

Read More


Continue Reading


Bed Bath & Beyond Jumps 50% to Lead ‘nonsense’ Rally in Meme Stocks; AMC Gains 16%

Rebekah Fuller



In this article


A “Store Closing” banner on a Bed Bath & Beyond store in Farmingdale, New York, on Friday, Jan. 6, 2023.
Johnny Milano | Bloomberg | Getty Images

A group of highly speculative stocks rallied double digits on Wednesday as retail investors pushed meme names up again in the new year following a dismal 2022.

Bed Bath & BeyondGameStopAMC Entertainment

Meme stocks rallying one more time

Stock Short interest % float Wed. Gain % off 52W high Bed Bath & Beyond (BBBY)48.9%60%-89%AMC (AMC)21%15%-78%GameStop (GME)21%8%-62%
Source: FactSet

The rally in Bed Bath & Beyond was initially triggered by news that it would lay off more employees in an attempt to reduce costs and stay in business.

The home goods retailer told employees that it is eliminating the chief transformation officer role, which is held by Anu Gupta, on the same day it reported disappointing fiscal third-quarter results. Bed Bath & Beyond is approaching a potential bankruptcy, as its sales decline and losses grow.

“We don’t love the strength in nonsense stocks like AMC, CVNA, GME, BBBY, PRTY, etc.,” said Adam Crisafulli, founder of Vital Knowledge. “This just means people are blindly chasing.”

During early 2021, a band of retail traders joined forces on social media to bid up a slew of heavily shorted stocks, creating massive short squeezes that inflicted high pain on short sellers. These meme stocks experienced big pullbacks last year when risk sentiment shifted amid aggressive rate hikes. GameStop fell 50% in 2022, while AMC tumbled 75% and Bed Bath & Beyond plunged 82%.

While the short interest in these names has come down from its peak after the jaw-dropping episode, it still remains much higher than average.

About 48% of Bed Bath & Beyond’s float shares are sold short, compared with an average of 5% short interest in a typical U.S. stock, according to S3 Partners. For GameStop, the short interest stands at 21%, down from more than 100% at the height of the meme stock mania in 2021, according to FactSet. AMC has also 21% of shares sold short.

A short squeeze happens when a stock jumps sharply higher, it forces short sellers to buy back shares in order to limit their losses. The short covering tends to fuel the stock’s rally further.

Read More


Continue Reading


Crypto Exchange Binance Plans 15%-30% Hiring Spree in 2023 Even As Rivals Slash Jobs

Rebekah Fuller



Zhao Changpeng, founder and chief executive officer of Binance, attends a conference at Porte de Versailles exhibition center in Paris, France June 16, 2022.
Benoit Tessier | Reuters

Binance is planning a hiring spree in 2023, CEO Changpeng Zhao said Wednesday, taking a somewhat contrarian view as crypto firms lay off huge swathes of staff amid continued pressure on coin prices.

Zhao said Binance, the world’s largest cryptocurrency exchange, said the company increased head count in 2022 from 3,000 people to “almost” 8,000.

In 2023, Binance plans to increase the number of staff by between 15% and 30%, Zhao said at the Crypto Finance Conference in St. Moritz, Switzerland.

Rival exchanges have been forced to cut large parts of their workforces after nearly $1.4 trillion was wiped off the crypto market in 2022 and major digital currencies including bitcoinether

In November, Kraken announced it was laying off 30% of staff, and this year Huobi and Coinbasesecond round of job cuts for Coinbase in the last year.

Zhao said Binance needs to get the company “well-organized” ahead of the next crypto bull run and admitted the exchange is “not super efficient.”

“We will continue to build and hopefully we will ramp up again before the next bull market,” Zhao said.

The industry was plagued last year by collapses of major projects, liquidity issues, bankruptcies and the high-profile failure of crypto exchange FTX. Sam Bankman-Fried who founded FTX has been charged with eight criminal counts by U.S. prosecutors, including fraud. He has pleaded not guilty.

Binance had a big role to play in FTX’s collapse. In November, Binance offered to buy FTX’s non-U.S. businesses which were facing liquidity issues but then later backed out of the deal. Zhao said publicly his company was selling its holdings in FTX’s native token, FTT, which exacerbated the collapse of that digital coin, adding to FTX’s downward spiral.

Zhao has said he “did not master plan” the collapse of FTX.

In response to a CNBC question on the sidelines of the CFC St Moritz conference, the Binance CEO said the “actual damage is not that high” on the crypto industry from the FTX collapse. He said FTX “is not a big player, they just make a lot of noise.”

“There’s definitely damage [but] the industry will be fine,” Zhao said.

Read More

Original Post:

Continue Reading