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Stock market live updates: Dow up 300, tech stocks falling, Wells Fargo drops 5% – CNBC

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U.S. economy needs more support, says Fed governor Brainard

The U.S. economy is showing signs of slowing down after a slight recovery, signaling the need for more monetary support, according to Federal Reserve Governor Lael Brainard. “Rolling flare-ups or a broad second wave of the virus may lead to widespread social distancing—whether mandatory or voluntary—which could weigh on the pace of the recovery and could even presage a second dip in activity,” Brainard said in a speech. “Some high-frequency indicators tracked by Federal Reserve Board staff … suggest that the strong pace of improvement in May and the first half of June may not be sustained.” —Fred Imbert

Trump to hold 5 pm press conference

President Donald Trump will hold a press conference at 5 p.m. ET on Tuesday in the Rose Garden. Bloomberg News reported the conference will be regarding China. — Maggie Fitzgerald 

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Gasoline futures down on concern state clampdowns will hurt demand

RBOB gasoline futures fell 1.6% Tuesday, on concern state efforts to halt the spread of the coronavirus by restricting activities will result in less driving and less demand for fuel. In particular, traders are watching Texas to see if Houston and the state more broadly locks down, after California closed indoor dining and other activities Monday.

“While we saw gasoline sales spike prior to the (July 4) holiday, now we’re seeing the impact of states reversing course and closing their economies, which is resulting in a decline in demand again,” said Andy Lipow, president of Lipow Oil Associates.

On Wednesday, the government will release the latest gasoline demand figures. For the week ended July 3, the U.S. consumed 8.8 million barrels a day, about 1 million less than the same time last year. – Patti Domm

Markets at midday: Dow jumps more than 200 points, but tech struggles

The Dow traded more than 200 points higher, or 0.9%, as the market tried to recover from Monday’s late-day swoon amid the start of the corporate earnings season. The S&P 500 gained 0.3%. The Nasdaq Composite, however, slid 0.3% as Big Tech continues to struggle. —Fred Imbert

Stocks making the biggest moves midday: Wells Fargo, Netflix, Ford and more

Wells Fargo — Shares of Wells Fargo fell 5% after the bank posted its first quarterly loss since the Great Recession and slashed its dividend to 10 cents a share. 

Netflix — Alongside the rest of Big Tech, Netflix ticked 3% lower, dragged down by a downgrade to neutral from buy from UBS.

Ford — Shares jumped nearly 4% after Ford unveiled its new Bronco SUVs. The revived brand, positioned as a competitor to Fiat Chrysler’s Jeep Wrangler, has a starting price just under $30,000.

Check out more midday movers here. —Maggie Fitzgerald 

Moderna to begin vaccine trial on July 27

Biotech firm Moderna said Tuesday it will begin its phase 3 coronavirus vaccine trial on July 27. The trial will enroll 30,000 people that are at high infection risk. Shares of Moderna jumped nearly 4% following the news. — Yun Li

Citi says the healthcare ecosystem is on the verge of its ‘Netflix moment’

Citi initiated Teledoc and Livongo Health as buy on Tuesday, and analyst Daniel Grosslight wrote “we believe that a new era of healthcare technology investing has emerged, with a concatenate increase in innovation and disruption. Legacy technology underinvestment and pain points have boiled over (accelerated by COVID-19), and in our view, the healthcare ecosystem is on the verge of its ‘Netflix moment.'” Both stocks are down almost 2% in early trading. — Michael Bloom

Tech stocks continue their struggles from Monday afternoon

After a brief bounce in the opening minutes, tech stocks are once again heading south. Shares of Amazon dropped 2.7%, while Netflix lost 2.9%. Facebook and Microsoft both slid more than 1%. — Jesse Pound

Cramer advises investors to be patient after Monday’s turnaround in stocks 

CNBC’s Jim Cramer urged investors to be cautious after yesterday afternoon’s steep reversal, particularly in large tech stocks. 

“You don’t just snap out of that in one day. There are too many people who bought at the top who are trying to figure out, ‘Lord get me back to even,'” Cramer said on “Squawk on the Street.” “Let this play out.” 

The “Mad Money” host said it’s not clear which theme of stocks will emerge as the predominant trade, underscoring the need for investors to be patient.  “Will it be the companies that do better because people think a vaccine is upon us? I can’t buy into that theory but that was the theory yesterday afternoon,” he said. — Kevin Stankiewicz

Wells Fargo tanks 8% after posting first quarterly loss since 2008 and slashing dividend

Shares of Wells Fargo plunged as much as 8% minutes after the opening bell on Tuesday. The bank posted its first quarterly loss since the Great Recession as the bank set aside $8.4 billion in loan loss reserves tied to the coronavirus pandemic. The bank had a net loss of $2.4 billion in the second quarter, or a loss of 66 cents a share, worse than the 20 cents a share loss expected by analysts surveyed by Refinitiv. Meanwhile, Wells Fargo cut its quarterly dividend to 10 cents a share from 51 cents previously. – Yun Li, Hugh Son

Nasdaq massive reversal should serve as reality check, Bespoke says

The drastic intraday reversal in the Nasdaq Composite on Monday raised eyebrows on Wall Street. The tech-heavy benchmark went from rising nearly 2% to hit an all-time high to finishing the day more than 2% lower. Such a reversal (when the Nasdaq swings more than 2% while hitting a record) only happened two other times, going back to 1985, according to Bespoke Investment Group. Those two days were on Jan. 24 and March 7 of 2000, right before the burst of the tech bubble, the firm said. “Although the Nasdaq was up the following day both times, you don’t need us to remind you what happened over the long-term from there,” Bespoke said in a note Tuesday.

Many on Wall Street have sounded the alarms that the Nasdaq’s comeback rally has gone too far, too fast. It was the first major U.S. equity benchmark to reclaim a new high after the coronavirus sell-off, soaring 15% this year. “Given the nonstop rally of late in the Nasdaq and earnings season on the horizon, Monday’s reversal should at least serve as a reality check that the market isn’t a one-way street,” Bespoke said. –Yun Li

Tech stocks fall at the open

The Nasdaq opened in the red on Tuesday as major tech stocks including Apple and Microsoft fell. The index was down 0.7% after the opening bell, while the Dow and S&P 500 registered smaller losses. — Jesse Pound

New biggest Tesla bull on the Street

Piper Sandler raised its target on Tesla to a new Street high of $2,322, implying a 55% rally ahead for shares of the electric vehicle maker. The new target firmly establishes Piper as the Street’s biggest bull, prompting CEO Elon Musk himself to respond to the call. Tesla shares jumped more than 4% during premarket trading on Tuesday.

CNBC PRO subscribers can read more here. — Pippa Stevens 

Here are Tuesday’s biggest analyst calls of the day: Netflix, Tesla, Mastercard, Spotify & more

  • Goldman Sachs initiated Visa and Mastercard as buy.
  • Credit Suisse upgraded Hanesbrands to outperform from neutral.
  • UBS downgraded Spotify to sell from buy.
  • UBS downgraded Netflix to neutral from buy.
  • Piper Sandler raised its price target on Tesla to $2,322 from $939.
  • Deusche Bank added a catalyst call buy on Stanley Black & Decker.
  • BMO upgraded Harley-Davidson to outperform from market perform.
  • SunTrust downgraded Carnival to sell from hold and Royal Caribbean and Norwegian to hold from buy.
  • Northcoast downgraded Lyft to neutral from buy.
  • Wedbush upgraded Wayfair to outperform from neutral.
  • Macquarie downgraded Royal Caribbean, Carnival, and Norwegian to neutral from outperform.

Pro subscribers can read more here. — Michael Bloom

Consumer price index rose faster than expected in June

The U.S. consumer price index rose 0.6% in June. Economists surveyed by Dow Jones expected an increase of 0.5%. The Labor Department said in a release that rising gas prices accounted for more than half of last month’s increase. — Jesse Pound

UBS double downgrades Spotify

UBS cut its rating on Spotify to sell from buy, saying that the stock’s climb in recent months has gone too far. Shares of the streaming audio company were down 3.1% in premarket trading amid light volume. CNBC Pro subscribers can read more about the call here. — Jesse Pound

Citigroup beats estimates

Shares of Citigroup gained 1.8% in premarket trading after the bank reported a surge in trading revenues for the second quarter that helped it beat Wall Street expectations. The bank reported earnings of 50 cents per share on $19.77 billion of revenue. Analysts expected earnings of 28 cents per share and $19.12 billion of revenue, according to Refinitiv. — Jesse Pound, Fred Imbert

Wells Fargo slashes dividend

Shares of Wells Fargo dropped more than 2% in premarket trading after the bank announced that it was cutting its dividend to 10 cents per share and reported a $2.4 billion loss for the second quarter. This was the first quarterly loss since the financial crisis. Wells Fargo previously paid a quarterly dividend of 51 cents per share. — Jesse Pound, Hugh Son

Cruise stocks down in premarket after downgrades

Shares of Carnival dipped 1.5% in premarket trading on Tuesday, while Norwegian Cruise Line and Royal Caribbean slid about 1% each after SunTrust downgraded these cruise line operators due to expected delays in their restarting plans. The Wall Street firm slashed its ratings on Carnival to sell and Norwegian and Royal Caribbean to hold, saying cruising in any meaningful way in North America for the major brands will not resume until at least the second quarter of 2021. –Yun Li

JPMorgan shares jump after record trading revenue drives strong earnings

Shares of JPMorgan rose 2.5% in premarket trading on Tuesday after the bank reported better-than-expected second-quarter earnings bolstered by a 79% surge in trading revenue.  The bank posted earnings of $4.69 billion, or $1.38 a share, exceeding the $1.04 per share estimate of analysts surveyed by Refinitiv. Revenue of $33 billion exceeded the $30.3 billion estimate. Shares of Goldman Sachs, Morgan Stanley and Bank of America climbed at least 1% each in premarket following JPMorgan’s strong trading results. — Yun Li, Hugh Son

Stock futures point to a higher open

The market is set to open Tuesday’s session in the green as traders digest corporate earnings from big U.S. banks. Futures on the Dow Jones Industrial Average jumped about 140 points, indicating an opening gain of 150 points. S&P 500 and Nasdaq 100 futures rose 0.3% and 0.1%, respectively. The S&P 500 will attempt to erase 2020 losses on Tuesday after briefly turning green in Monday’s roller-coaster session. The equity benchmark is now down 2.3% on the year after losing 0.9% in the previous session.  A big rollover in technology shares took the market down on Monday. — Yun Li

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USD/JPY moving around, swings helped by thinning liquidity ahead of Bank of Japan decision – ForexLive

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Tech giant Nvidia unveils higher performing ‘superchips’ to power AI – Al Jazeera English

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Nvidia CEO Jensen Huang tells developers conference that computing is advancing at an ‘insane’ rate.

Nvidia has unveiled its latest family of chips for powering artificial intelligence as it seeks to consolidate its position as the major supplier to the AI frenzy.

“We need bigger GPUs. So, ladies and gentlemen, I would like to introduce you to a very, very big GPU,” CEO Jensen Huang said on Monday at a developers conference in California, referring to the graphics processors that are vital in the creation of generative AI.

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The event, dubbed the “AI Woodstock” by Wedbush analyst Dan Ives, has become a can’t-miss date on big tech’s calendar due to Nvidia’s singular role in the AI revolution that has taken the world by storm since the introduction of ChatGPT in late 2022.

“I hope you realise this is not a concert, this is a developers’ conference,” Huang joked as he took the stage in a packed arena usually reserved for ice hockey games and concerts.

Nvidia’s powerful GPU chips and software are an integral ingredient in the creation of generative AI, with rivals like AMD or Intel still struggling to match the power and efficiency of the company’s blockbuster H100 product, launched in 2022.

Apple, Microsoft and Amazon have also developed chips with AI in mind but for now are stuck trying to get their hands on Nvidia’s coveted products to deliver on their own AI promises.

That linchpin role in the AI revolution has seen Nvidia’s share price rise by roughly 250 percent over the last 12 months, propelling the company above Amazon when measured by market capitalisation, behind only Microsoft and Apple.

Not letting up, Nvidia told the audience of developers and tech executives it was releasing an even more powerful processor and accompanying software, on a platform called Blackwell – named after David Blackwell, the first Black academic inducted into the National Academy of Science.

Blackwell GPUs were AI “superchips” four times as fast as the previous generation when training AI models, Nvidia said.

“The rate at which computing is advancing is insane,” Huang said.

They would also deliver 25 times the energy efficiency, Nvidia said, a key claim when the creation of AI is criticised for its ravenous needs for energy and natural resources when compared with more conventional computing.

Unlike its rivals Intel, Micron and Texas Instruments, Nvidia, like AMD, does not manufacture its own chips, but uses subcontractors, mainly the Taiwan Semiconductor Manufacturing Co.

Given the geopolitical concerns with Taiwan and China, this could be a potential weak spot, and the US has banned Nvidia from sending its most powerful chips to Chinese companies.

Nvidia also announced other AI developments, including a platform for training humanoid robots.

Project Gr00t, which Nvidia said was not named after the Guardians of the Galaxy movie character Groot, was described as the “world’s first human foundation model”.

Gr00t-powered robots will be designed to understand what people say and mimic people’s movements, learning from experience how to interact with the world, according to Nvidia.

The models “will enable a robot to learn from a handful of human demonstrations so it can help with everyday tasks and emulate human movement just by observing us”, Nvidia said.

Nvidia said it was also working with Apple to put AI capabilities into the newly-released Vision Pro spatial computing gear.

The collaboration comes as Apple is under pressure to show it is not being left behind by Amazon, Google, Meta and OpenAI when it comes to artificial intelligence.

Nvidia also unveiled the Earth-2 Cloud Platform for predicting climate change, using simulation by AI supercomputers.

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This business owner brought most of her manufacturing home from China — and feels punished for it

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A Canadian company that manufactures children’s toy couches finds itself facing a stiff bill for import tariffs after bringing production home to this country.

While Barumba Play is no longer importing a majority of its product, a single component of the couches has been reclassified by the Canada Border Services Agency and is no longer tariff-free.

The company’s flagship product is a couch for children made of pieces that can be easily taken apart and reassembled for play. Sara Feldstein founded the company in Markham, Ont., in 2021 and initially produced the couches entirely in China.

As the couches were classified as a children’s toy, Feldstein told CBC News they were not subject to tariffs and were brought into Canada without import fees. Tariffs can be used by the Canadian government as a form of taxation on imports to protect Canadian economic development.

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Trouble started for her in 2023, when Feldstein opted to move production of the couches to Canada from China.

“I on-shored my manufacturing to Canada from China and have been penalized for it,” she said.

A woman is sitting on a pink toy couch.
Business owner Sara Feldstein sits on a Barumba Play couch. ‘I on-shored my manufacturing to Canada from China and have been penalized for it,’ she said. (Anis Heydari/CBC)

Feldstein was able to manufacture every part of the couch in Canada except for cloth slipcovers, which she had to keep producing in China.

She received a letter from the Canada Border Services Agency in the summer of 2023 indicating it felt classifying the slipcovers as part of a toy was incorrect. This contradicted what Feldstein was told to expect from business advisors and industry experts that she turned to for advice before opting to transfer manufacturing most of her product to Canada.

Instead, Feldstein says the slipcovers have been lumped in with textiles such as carpets, bed linens and table linens — and now she’s expected to pay 18 per cent duty on imports.

Three cloth slipcovers are pictured on the floor.
These are some of the play couch slip covers that the Canada Border Services Agency has classified as textiles, rather than a component part of a toy. (Submitted by Sara Feldstein)

The CBSA declined an interview request from CBC News. After this article was published, it issued a statement that the Customs Act doesn’t allow it to speak about individual cases, but explained that goods are assessed for tariffs based on how they are “presented at the border,” and that changes to what is being imported can result in a change to tariff classifications.

The CBSA also said if someone importing goods disagrees with a tariff decision, they can appeal, but only after they’ve paid all amounts owed, plus interest.

According to Feldstein, her business now owes at least $47,000 in retroactive tariffs, and she expects costs could escalate up to $70,000 while she waits for the appeals process to play out.

WATCH | How a classification change led to surprise tariffs for this Canadian company: 

Ontario company hit with unexpected tariffs for manufacturing in Canada

5 hours ago

Duration 1:54

After bringing home her manufacturing from China to Canada, Barumba Play founder Sara Feldstein received a letter from the Canada Border Services Agency saying they had reclassified her children’s toy couches from the category of toys to textiles, resulting in an 18 per cent duty that they’re applying retroactively to the past several years of operation. She can appeal but would still need to front the full amount of money owed first. 

Businesses must pay, even during appeals

It’s a cost she’s not sure her business can bear, because she must pay the tariffs now even while she tries to appeal the decision.

That appeal process could take close to a year, according to the CBSA’s current processing times.

“It would make me want to tell others, don’t bother bringing your business back to Canada. Do it overseas. It’s safer that way,” she said.

It’s not unusual for businesses to be caught in the complicated web of tariffs, according to lawyer David Rotfleisch of TaxPage.com, a law firm specializing in tax and business.

A bald man with blue geometric eyeglasses is pictured in front of a bookcase, wearing a suit.
Tax lawyer David Rotfleisch says businesses have to pay tariffs as assessed before appeals are heard. (Gary Morton/CBC)

He confirmed that businesses such as Feldstein’s need to pay assessed tariffs even while mounting a legal challenge because collection is not paused or halted when an appeal is launched.

“Tariff classifications are complex and make income tax look relatively simple,” Rotfleisch said.

“Wrong assessments affect a lot of businesses because they can’t pay it, and by the time the appeal process runs its course, it’s going to take time and [businesses] can’t manage it. So they have to literally shut their doors.”

Suspending payments may not be solution

But eliminating the requirement to pay, even before appeals are exhausted, may not be the right solution, according to Jenifer Bartman, a business advisor based in Winnipeg.

“You could have companies not paying attention to the rules, saying, ‘We’ll go ahead and do this, and if it goes wrong, we’re not going to be out of pocket any time soon,'” she said.

A woman with long blonde hair in a blue sweater faces the camera on a video call.
Business advisor Jenifer Bartman says companies must seek out advice before changing supply chains across borders. (Anis Heydari/CBC)

Bartman pointed out that importing products to Canada, whether partial or fully manufactured, requires a lot of preparation and advice.

“It’s really important for business leaders, especially if they’re venturing into a new aspect of their supply chain …  to understand what the rules are in advance because they can save themselves a lot of time and trouble down the line.”

Business owner says she did her research

For her part, business owner Feldstein said she did consult with experts prior to repatriating manufacturing of her couches to Canada. The decision by CBSA to reclassify surprised her.

Feldstein maintains the slipcovers currently being classified as textiles by CBSA should still be considered just a part of the couches she sells as a children’s toy, and not a separate linen that could be used on its own.

If the slipcovers are a part of the toy couch, they would not have the tens of thousands of dollars in tariffs assessed.

According to the CBSA’s website, to be considered a “part,” the item must meet criteria including that it has no alternative function, be marketed and shipped along with other parts of the product, needed for “safe and prudent use” of the item, and be “committed” to use with the unit.

Barumba Play’s founder isn’t sure what comes next, but until the problem is resolved she’s holding off on growing her business.

“I’m very hesitant to spend money on other items right now when this is in limbo,” said Feldstein.

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