Here we go! Earnings season is underway

By CNN Business

Updated 6:33 a.m. ET, May 6, 2021
11 Posts
Sort byDropdown arrow
9:30 a.m. ET, April 16, 2021

Morgan Stanley lost nearly $1 billion on hedge fund meltdown -- and it could've been much worse

From CNN Business' Matt Egan

Jeenah Moon/Bloomberg/Getty Images
Jeenah Moon/Bloomberg/Getty Images

Morgan Stanley disclosed Friday it lost $911 million during the first quarter due to a “single prime brokerage client.” That client was Archegos Capital Management, a person familiar with the matter told CNN Business.

Morgan Stanley (MS) was among the many banks that lent Archegos vast sums of money before its collapse last month. However, it avoided the more dramatic losses suffered by peers like Credit Suisse (CS), which lost $4.7 billion.

“I’m very pleased with how the institution came together and responded to this very complex situation,” Morgan Stanley CEO James Gorman said during a conference call Friday.

Despite the losses, Morgan Stanley managed to report record revenue and profit during the quarter.

Gorman said the bank liquidated “very large” single stock positions late in March, fire sales that cost it $644 million.

The Morgan Stanley boss said a “management decision" was made to "completely de-risk” the remaining smaller positions, causing another $267 million in losses.

“We decided we would be out of the risk as rapidly as possible,” Gorman said. “I regard that decision as necessary and money well spent.”

The broader question is how a little-known firm, run by an executive with a checkered past, was able to amass such risky positions in the first place. Archegos's structure as a family office, a type of firm with limited transparency requirements, played a role.

Gorman said he thinks disclosure rules "made it more difficult to understand exactly who is holding what where.”

4:11 p.m. ET, April 15, 2021

Dow and S&P 500 notch record highs

From CNN Business' Anneken Tappe

US stocks rallied Thursday, boosted by corporate earnings and several better-than-expected economic reports.

The Dow ended at an all-time high and above 34,000 points for the first time in history. The index rose 0.9%, or 305 points. The S&P 500 rallied 1.1%, also closing at a record high.

The Nasdaq Composite, which ended the day up 1.3%, is also closing in on record territory, ending above 14,000 points for the first time in two months. Its all-time high was about 14,095 on February 12.

2:26 p.m. ET, April 15, 2021

Stocks are on track for record highs

From CNN Business' Anneken Tappe

Angela Weiss/AFP/Getty Images
Angela Weiss/AFP/Getty Images

Wall Street is having a great day, and there is indeed plenty for investors to be excited about: Earnings season kicked off with a bang (just look at all those bank profits) and the economic data from Thursday, April 15, was better than expected across the board. This included lower jobless claims and a massive jump in retail sales in March.

All this propelled the market higher. With just under two hours left in the trading day, the Dow and the S&P 500 are on track for record highs. The Nasdaq Composite could also print its first close above 14,000 points since February. A good ol' rally all around.

As of the early afternoon, the Dow is up 0.7%, or 251 points. The S&P 500 is up nearly 1%. and the Nasdaq is up 1.3%.

10:38 a.m. ET, April 15, 2021

America's addiction to Funyuns is helping Pepsi rake in a massive profit

From CNN Business' Danielle Wiener-Bronner

TonelsonProductions/Shutterstock
TonelsonProductions/Shutterstock

America's appetite for Funyuns helped boost PepsiCo's sales in the first quarter.

The snacks and beverage giant reported net revenue growth of 6.8% in the 12 weeks that ended on March 20 compared to the same period last year. That's a pretty good showing, given the pantry loading frenzy that took hold of Americans around this time last year.

What's behind the sales boost? PepsiCo's strategic acquisitions and people's love for snacks, among other things.

Lay's had low-single digit growth, the company said Thursday. Tostitos and Doritos grew in the mid-single digits, while Ruffles delivered high-single digits sales growth during the quarter.

But the small and mighty Funyuns brand posted double-digit growth, as did Off The Eaten Path, which has veggie puffs and hummus crisps.

PepsiCo also called out its Doritos 3D Crunch and Cheetos Crunch Pop Mix as growth drivers. Some of its beverages, like Bubly and ready-to-drink coffee beverages it sells in partnership with Starbucks, also delivered high growth during the quarter.

10:14 a.m. ET, April 15, 2021

BlackRock now manages more than $9 trillion in assets

From CNN Business' Paul R. La Monica

Jeenah Moon/Bloomberg/Getty Images
Jeenah Moon/Bloomberg/Getty Images

The stock market boom is sweet music to the ears of BlackRock investors and executives: The world's largest money manager reported strong earnings and revenue that topped forecasts on Thursday.

BlackRock now manages more than $9 trillion for clients around the globe, with more than $2.8 trillion of that total invested in exchange-traded funds. BlackRock runs the popular iShares family of ETFs.

Shares of BlackRock (BLK) rose more than 2% on the news, hitting a new record high in the process.

CEO Larry Fink, who wrote about stepping up the company's diversity and ESG efforts in his most recent annual shareholder letter, said in the BlackRock earnings release that the company's “deep sense of responsibility to help more and more people experience financial well-being has guided significant investments in our business over time."

Fink added that BlackRock plans "to stay ahead of clients’ needs," and will continue to focus on "sustainable investing" strategies.

Fink isn't just talking a good game, either. Investors clearly want what BlackRock is selling. Fink noted that BlackRock brought in $172 billion in new client money during the first quarter — a record for BlackRock that also marked the fourth consecutive quarter in which inflows exceeded $100 billion.

10:05 a.m. ET, April 15, 2021

Why Citi’s consumer bank is quitting China and a dozen other markets

From CNN Business' Matt Egan

Budrul Chukrut/SOPA Images/LightRocket/Getty Images
Budrul Chukrut/SOPA Images/LightRocket/Getty Images

Citigroup’s consumer banking business is exiting Australia, China, India, Russia and nine other markets around the world to focus its resources elsewhere.

The decision, the first major strategic move by new CEO Jane Fraser, marks a significant shift for Citi (C) , which historically has had the largest global footprint among big US banks.

Fraser, who is under pressure to boost Citi’s returns, said Citi’s consumer banking franchise in Asia, Europe, the Middle East and Africa will operate solely in four wealth centers: Singapore, Hong Kong, London and the United Arab Emirates.

“While the other 13 markets have excellent businesses, we don’t have the scale we need to compete,” Fraser said in a statement Thursday. “We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia.”

The decision means Citi’s consumer business is exiting Indonesia, the Philippines, Vietnam, Poland, Korea, Taiwan, Bahrain, Malaysia and Thailand. In total, the 13 markets Citi is leaving brought in $4.2 billion in revenue last year.

Fraser took over for Michael Corbat in a February, making her the first woman to lead a major US bank.

9:46 a.m. ET, April 15, 2021

Delta stopped burning through cash in March

From CNN Business' Chris Isidore

Since the pandemic hit America last March, US airlines have been burning through millions of dollars a day. But for Delta Air Lines, at least, that cash burn finally ended in March.

By last month, Delta was generating positive cash of about $4 million a day, the company said in its quarterly earnings report on Thursday. (The company still logged an average cash burn of $11 million a day throughout Q1.)

Delta also still lost $2.3 billion in the first three months of the year, excluding special items.

Cash generation and cash burn aren't the same thing as profit and loss. There are many expenses — including depreciation on equipment like planes — that don't factor into the cash burn rate.

But being cash flow positive is a critical milestone for a US airline to hit, as they have been burned through so much cash during the last year — forcing them to raise huge amounts of money from Wall Street and slash expenses to ride out the crisis. 

8:47 a.m. ET, April 15, 2021

Bed Bath and Beyond earnings disappoint as company looks to a more digital future

From CNN Business' Anneken Tappe

Luke Sharrett/Bloomberg/Getty Images
Luke Sharrett/Bloomberg/Getty Images

Shares of Bed Bath & Beyond (BBBY) have fallen some 10% following the company's earnings earlier Wednesday.

The retailer said it will close 200 stores by the end of fiscal 2021 as the company "moves into a digital era," according to its CEO Mark Tritton.

"I think [the pandemic] has both accelerated and complicated our ability to transform," he said on the CNN Business digital live show Markets Now.

Bed Bath & Beyond's online sales jumped during the pandemic, but brick and mortar retail looked very different. The pandemic allowed the company to address the number of stores it had.

"We'll continue to look at the profitability of our stores" to create a business for the future, said Tritton, who joined the company in 2019 after stints at Target and Nordstrom.

7:26 a.m. ET, April 15, 2021

Goldman Sachs benefits from the market boom

From CNN Business' Paul R. La Monica

Happy days are here again on Wall Street — and that's great news for investment banking powerhouse Goldman Sachs.

Shares of Goldman Sachs (GS) were up about 4% in early trading Wednesday after the company reported results for the first quarter that easily topped Wall Street forecasts. Goldman Sachs said revenue more than doubled compared to Q1 of last year, to $17.7 billion. The company posted a profit of $6.8 billion.

Goldman Sachs is benefiting from the boom in the stock market and resulting surge in dealmaking activity on Wall Street. The company said it posted a record quarter for revenue in its asset management business as well as for its equity underwriting unit, the division that helps companies go public through initial public offerings (IPOs) and trendy special purpose acquisition company (SPAC) transactions.

CEO David Solomon said in the earnings release that the company is helping clients “in preparation for a world beyond the pandemic and a more stable economic environment."

Goldman Sachs shares are now up nearly 30% this year, making it one of the best performers in the Dow. Rival JPMorgan Chase (JPM), which is also in the Dow, and Wells Fargo (WFC) also reported strong earnings Wednesday. But their stocks dipped on concerns about consumer loan growth.