Is Bankruptcy The Light At The End Of Your Tunnel?

Is Bankruptcy The Light At The End Of Your Tunnel?

Many things can happen in life that can cause personal financial strain. It can be brought on by poor decisions, loss of income or even, a death in the family. No matter More »

How To Pick The Best Personal Bankruptcy Lawyer To Help Your Case

How To Pick The Best Personal Bankruptcy Lawyer To Help Your Case

Personal bankruptcy can be a scary situation for those who are facing repossession from the government and constant calls from debt collectors. If you find yourself in a hole that you cannot More »

Bankruptcy: What Are My Options And Limitations?

Bankruptcy: What Are My Options And Limitations?

Even though filing for personal bankruptcy can seem like something to put off, you should not wait too long to do it. Know what you are about to go through and then More »

Why Personal Bankruptcy Is The Best Option For Some People

Why Personal Bankruptcy Is The Best Option For Some People

Looking into bankruptcy can be like looking into a murky sea. With so many laws and regulations, how do you know what steps to take so you can file for bankruptcy and More »

 

Dow jumps 300 points, heads for a winning week as big market rotation resumes

U.S. stocks moved higher on Friday morning as investors bet again on stocks that would benefit from a potential effective vaccine and economic recovery next year.

The Dow Jones Industrial Average traded 262 points, or 0.9%, higher. The S&P 500 gained 0.8%, while the techy-heavy Nasdaq Composite rose 0.4%.

Shares of Disney gained 2% after reporting better-than-expected results. Shares of Carnival Corp., United Airlines and Boeing rose, capping big gains for the week. Cisco Systems shares were also up on strong quarterly numbers.

“This week’s positive vaccine news is a game-changer in our view, as it allows the market to look through the recent surge in COVID-19 cases to the impending end of the pandemic and broader reopening of the economy,” wrote Marko Kolanovic, JPMorgan’s head of macro quantitative and derivatives strategy, who was among the first to call the market’s turn in March.

The Dow entered Friday’s session up 2.7% for the week after Pfizer’s news on Monday that the vaccine it is developing with BioNTech was more than 90% effective in a trial. This caused a rotation into the cyclical stocks that would benefit from an economic comeback next year. Investors dumped technology shares which have held up during the pandemic.

However, mid-week the rotation paused as traders worried that a rising number of coronavirus cases could hit the economy significantly before a vaccine gets here.

On Thursday, the Dow dropped more than 300 points during the regular session, notching its second straight daily decline. The broader S&P 500 pulled back 1%, leaving it just 0.8% higher for the week. The Nasdaq Composite is down 1.6% for the week.

The pause in the rally this week came as the number of coronavirus cases, and hospitalizations, keeps climbing in the U.S. A CNBC analysis of data compiled by Johns Hopkins University showed average daily new cases are up by at least 5% over the past week in at least 47 states. Hospitalizations, meanwhile, rising in at least 46 states.

Sentiment on Thursday soured even further after Federal Reserve Chairman Jerome Powell said the country’s economic outlook remained uncertain. “With the virus spreading, the next few months could be challenging,” he said.

The resurgence in coronavirus cases has also led some parts of the country to re-adopt stricter social-distancing measures. In Chicago, Mayor Lori Lightfoot asked residents to cancel their Thanksgiving plans and stay indoors as cases rise in the city. In New York state, Gov. Andrew Cuomo said new curfews on bars, restaurants and gyms will take effect on Friday.

Phillip Colmar, partner at MRB Partners, wrote in a note that the global economic recovery “will be sustained, but the V-shaped portion is over, and we have already transitioned to a slower pace of two-steps forward and one back.”

Disney, Cisco jump on earnings

Shares of Dow members Disney and Cisco rose after both companies reported quarterly results that beat analyst expectations.

Disney gained as the company said it now has 73 million paid subscribers for its streaming service, Disney+. The media giant also reported a smaller-than-expected loss for the quarter.

Cisco popped 7% on the back of strong earnings and revenue. The company also issued better-than-expected guidance for the current quarter.

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Author: Fred Imbert

Unemployment claims are falling. But that’s not necessarily because people found work

Volunteers distribute food to the needy in Orlando, Fla.
Paul Hennessy/NurPhoto via Getty Images

Claims for unemployment benefits are falling. But it’s not all because people are returning to work.

Instead, many workers may be running out of jobless benefits altogether or falling through the cracks of the system, according to labor experts.

Even the unemployment rate may be artificially low, since millions of unemployed workers likely aren’t being counted by official statistics, the experts said.

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These are important distinctions as policymakers gauge the vigor of the economic recovery and weigh the necessity of additional financial relief, like one-time stimulus checks and enhanced unemployment benefits.

Continuing claims

Continuing claims for unemployment benefits are the best available proxy for the total number of people receiving jobless aid. Claims have fallen by more than 10 million since the early summer.

There were around 21 million continuing claims through state and federal programs at the end of October, according to the Labor Department. That figure is elevated by historical standards, but down from nearly 33 million at the end of June.

A return to work likely accounts for a large portion of the decrease, said Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research.

Other statistics seem to point to such a trend, she said.

For example, the U.S. unemployment rate fell to 6.9% in October — less than half the 14.7% peak at the height of the coronavirus-fueled downturn in April, according to the Bureau of Labor Statistics.  

Blind spots

However, blind spots in the data make the extent of that positive impact unclear, experts said.

“There’s really no way to know,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.

For one, workers are starting to exhaust their entitlement to unemployment benefits, Evermore said.

That’s true for self-employed and other workers in the Pandemic Unemployment Assistance program, for example, Evermore said.

These workers are generally eligible for up to 39 weeks of benefits dating back to the end of January. Such workers would have stopped getting aid around the end of October or early November.  

Cracks in the system

“There are [also] tons of opportunities for people to fall off benefits,” Evermore said.

Most states pay up to six months of traditional state unemployment insurance. (Some pay less.) Workers that exhaust these benefits can transition into temporary programs that continue aid.

The federal CARES Act relief law offered an extra 13 weeks of benefits through year-end. A separate “extended benefits” program pays additional aid (generally 13 weeks) in states with high unemployment rates.

OLIVIER DOULIERY | AFP | Getty Images

But shifting in and out of these choke points isn’t a seamless process, according to labor experts. Some states aren’t notifying workers of these programs or that they need to apply for the extra benefits, experts said.

Some may drop off benefit rolls for weeks, amounting to temporary drops in claims, or fall off altogether.

“Any of these transition points can lead to attrition,” said Eliza Forsythe, an assistant professor and labor economist at the University of Illinois.

Millions of workers are also poised to drop off unemployment rolls after the end of the year if Congress doesn’t extend certain programs like Pandemic Unemployment Assistance.

Unemployment rate

While jobs have clearly bounced back since the spring (albeit at a slowing pace in recent months), the true unemployment rate may be higher than the official 6.9%.

For example, nearly 4 million people had dropped out of the labor force by September compared with pre-pandemic levels in February and will likely return once the pandemic is under control, Forsythe and other labor economists said in a recent paper.

These people — who may not be able to work due to childcare responsibilities or may be discouraged from looking for work until the job market improves — are technically jobless, but aren’t counted in the official unemployment rate.

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Author: Greg Iacurci

Ex-Wells Fargo CEO John Stumpf misled investors in fake accounts scandal, SEC says

John Stumpf, chief executive officer of Wells Fargo & Co., waits to begin a House Financial Services Committee hearing in Washington, D.C., U.S., on Thursday, Sept. 29, 2016.
Andrew Harrer | Bloomberg | Getty Images

Ex-Wells Fargo CEO John Stumpf and former deputy Carrie Tolstedt were charged by the Securities and Exchange Commission with misleading investors about the bank’s success in selling multiple products to customers.

Stumpf agreed to pay a $2.5 million civil penalty to resolve the matter, allowing him to avoid admitting or denying the charges, the SEC said Friday.

The two executives had certified in 2015 and 2016 investor disclosures that touted the firm’s supposedly robust “cross-sell” metric, despite knowing it was misleading, the SEC said in a statement. The metric is an industry term for how many products a single customer has.

Wells Fargo was later found to have inflated that metric by putting millions of customers into products without their consent, a scandal that cost Stumpf his job in 2016 and even that of his successor Tim Sloan. Current CEO Charlie Scharf took over a year ago and has been tasked with overhauling the fourth biggest U.S. bank and satisfying regulators’ demands for better controls.

“If executives speak about a key performance metric to promote their business, they must do so fully and accurately,” said Stephanie Avakian, director of the SEC’s Division of Enforcement.

The SEC’s complaint, filed in California, charges Tolstedt with fraud and seeks penalties and to ban her from being an officer or director of a public company.

According to the SEC’s complaint, Tolstedt publicly endorsed the firm’s vaunted cross-sell metric from 2014 through 2016, despite the fact that it was “inflated by accounts and services that were unused, unneeded, or unauthorized.”

Earlier this year, Wells Fargo paid $3 billion to settle several U.S. probes into its operations, including a $500 million deal with the SEC. The regulator said it will distribute money collected from Stumpf and the bank to investors.

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Author: Hugh Son

Dow rises 250 points, heads for winning week

U.S. stocks moved higher on Friday morning as investors bet again on stocks that would benefit from a potential effective vaccine and economic recovery next year.

Shares of Disney gained 3% after reporting better-than-expected results. Shares of Carnival Corp., United Airlines and Boeing rose in early trading, capping big gains for the week.

The Dow Jones Industrial Average traded 255 points, or 0.9%, higher. The S&P 500 gained 0.8%, while the techy-heavy Nasdaq Composite rose 0.7%.

“This week’s positive vaccine news is a game-changer in our view, as it allows the market to look through the recent surge in COVID-19 cases to the impending end of the pandemic and broader reopening of the economy,” wrote Marko Kolanovic, JPMorgan’s head of macro quantitative and derivatives strategy, who was among the first to call the market’s turn in March.

The Dow entered Friday’s session up 2.7% for the week after Pfizer’s news on Monday that the vaccine it is developing with BioNTech was more than 90% effective in a trial. This caused a rotation into the cyclical stocks that would benefit from an economic comeback next year. Investors dumped technology shares which have held up during the pandemic.

However, mid-week the rotation paused as traders worried that a rising number of coronavirus cases could hit the economy significantly before a vaccine gets here.

On Thursday, the Dow dropped more than 300 points during the regular session, notching its second straight daily decline. The broader S&P 500 pulled back 1%, leaving it just 0.8% higher for the week. The Nasdaq Composite is down 1.6% for the week.

The pause in the rally this week came as the number of coronavirus cases, and hospitalizations, keeps climbing in the U.S. A CNBC analysis of data compiled by Johns Hopkins University showed average daily new cases are up by at least 5% over the past week in at least 47 states. Hospitalizations, meanwhile, rising in at least 46 states.

Sentiment on Thursday soured even further after Federal Reserve Chairman Jerome Powell said the country’s economic outlook remained uncertain. “With the virus spreading, the next few months could be challenging,” he said.

The resurgence in coronavirus cases has also led some parts of the country to re-adopt stricter social-distancing measures. In Chicago, Mayor Lori Lightfoot asked residents to cancel their Thanksgiving plans and stay indoors as cases rise in the city. In New York state, Gov. Andrew Cuomo said new curfews on bars, restaurants and gyms will take effect on Friday.

Phillip Colmar, partner at MRB Partners, wrote in a note that the global economic recovery “will be sustained, but the V-shaped portion is over, and we have already transitioned to a slower pace of two-steps forward and one back.”

Disney, Cisco jump on earnings

Shares of Dow members Disney and Cisco rose after both companies reported quarterly results that beat analyst expectations.

Disney gained as the company said it now has 73 million paid subscribers for its streaming service, Disney+. The media giant also reported a smaller-than-expected loss for the quarter.

Cisco popped 7% on the back of strong earnings and revenue. The company also issued better-than-expected guidance for the current quarter.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

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Author: Fred Imbert