×

Opinion The Big Crunch

More

  Friday, 11 Aug 2017 | 11:46 AM ET

On earnings calls, corporate leaders openly bemoan DC's lack of direction

Corporate leaders are openly questioning what, if anything, the Trump administration will be able to do for business, given a lack of major action on his promises of corporate tax reform, new health-care policies and a tax on goods coming across the border.

CNBC analyzed the latest round of earnings calls and found that while many CEOs remain optimistic of a pro-business administration, a growing number are unsure of Washington's direction six months after the inauguration.

Companies are putting off share buybacks, delaying capital investments and waiting to spend on business development. And the hesitation is across industries, in companies both big and small.

Pfizer CEO Ian Read said the company needs corporate tax reform settled before it can move forward with any business development opportunities.

"Right now I believe we need to see tax reform or the absence of tax reform to understand what the market values are," he told analysts in an early August earnings call. "Any focus on BD, to my point of view, is somewhat delayed by a resolution of that."

Advertising giant Interpublic blamed D.C.'s dysfunction in late July after earnings missed EPS and revenue expectations. Revenue fell $32 million in the second quarter, compared with the same period in 2016.

"Our results in the quarter reflect the fact that macro uncertainty and political gridlock are affecting spending, particularly in the U.S. with clients demonstrating caution in terms of releasing budgets," CEO Michael Roth said.

Shares in the company fell 12 percent the following day, erasing a year of gains.

Luxury apparel maker Ralph Lauren reported better-than-expected earnings in August, with net income of $59.5 million for the quarter, compared with a loss of $22.3 million the prior year. But executives said the company would not buy back stock with tax policy so up in the air.

"We are not planning share repurchases for fiscal 2018," CFO Jane Nielsen said. "We make this determination based on the cash needs of our businesses, sector dynamics and with consideration for the uncertain environment around U.S. tax reform."

»Read more
  Thursday, 10 Aug 2017 | 2:34 PM ET

Traders speculate Snap is either gonna pop big or drop mightily on Thursday's earnings

Snap co-founders Evan Spiegel (R) and Bobby Murphy walk to ring the opening bell of the New York Stock Exchange, March 2, 2017.
Lucas Jackson | Reuters
Snap co-founders Evan Spiegel (R) and Bobby Murphy walk to ring the opening bell of the New York Stock Exchange, March 2, 2017.

Snap will be anything but boring after the bell Thursday.

That's what the options market thinks. According to options trading data, traders expect Snap shares to move 17 percent in either direction following the company's earnings report on Thursday after the close.

That 17 percent implied is second-highest among 120 stocks reporting earnings Thursday through August 31, with at least $1 billion in market cap and open interest of at least 20,000 options. Wednesday night, Snap was second on the list, beaten out only by another recent problematic IPO: Blue Apron at 19 percent.

Blue Apron fell Thursday morning after reporting a wider-than-expected loss of 47 cents per share. Shares of the meal kit company were down 16 percent Thursay.

These implied volatility moves are based on out-of-the-money put and call options. MKM Partners derivatives strategist Jim Strugger calculated the numbers for CNBC.

»Read more
  Thursday, 10 Aug 2017 | 10:59 AM ET

Snap's suffocating coverage on Wall Street may be stifling growth plan

Snapchat co-founders Bobby Murphy (l) and Evan Spiegel (c) ring the opening bell on March 2, 2017, as NYSE President Thomas Farley looks on.
Getty Images
Snapchat co-founders Bobby Murphy (l) and Evan Spiegel (c) ring the opening bell on March 2, 2017, as NYSE President Thomas Farley looks on.

Snapchat's parent reports earnings Thursday afternoon, and for all the investor hype and media attention surrounding it, it's important to note one thing: Snap is one of the most extremely over-analyzed stocks relative to its overall value.

In fact, the social media company has more analysts covering it than it has billions of dollars in market cap. Not many major companies can make that claim. And the ones that do are often very problematic.

Twenty-one analysts are focusing on the company, according to Yahoo Finance, and its market cap before reporting earnings is around $16 billion. That means there are 1.3 analysts watching the company for every billion in value.

Consider the companies that have even more analysts than Snap but with even less market value. They include Chipotle, Under Armour, Foot Locker, Ulta, Coach, Trip Advisor, Viacom and Garmin.

On the other extreme, you have the major economically important firms with over $10 billion in market cap per analyst. Tech giants like Apple, Microsoft, Facebook, Amazon and Alphabet range from $13 billion to $24 billion in market cap per analyst, averaging $18 billion.

»Read more
  Wednesday, 19 Jul 2017 | 2:52 PM ET

Half of American jobs are at risk from automation, new study suggests

Posted ByNick Wells
Robotic arms weld body shells in an auto manufacturing plant.
Oliver Bunic | Bloomberg | Getty Images
Robotic arms weld body shells in an auto manufacturing plant.

The American workforce is under tremendous pressure, with change coming on multiple fronts. That uncertainty is leading to political and social turbulence, a new research paper suggests.

One in four American jobs are at risk of being shipped overseas in the coming years and about half could be replaced by automation, according to Ball State University's Center for Business and Economic Research. A new paper titled, "How Vulnerable are American Communities to Automation, Trade, and Urbanization?" combines several recent studies on employment trends to present a stark view of the future job situation for certain parts of the country.

"Some places and people observe robust benefits while others observe primarily costs" from the changes underway, the researchers wrote. "This has important economic, social, and political implications."

»Read more
  Monday, 17 Jul 2017 | 1:56 PM ET

Emojis changing the way people and businesses communicate

As ridiculous as it sounds, Monday is celebrated as World Emoji Day.

That's because July 17 is the day that appears on the iPhone emoji for "calendar." The day was picked because it's the birthday of Apple's iCal product.

Emojis, those digital images people send each other by text and social media, reflect the changing nature of communication, both for individuals and for businesses. Think about it: We went from the phone to email. Then from email to text messages. Now, we're going from actual language just to pictures.

Consider that the majority of Instagram users employ emojis in their posts, according to social media analytics blog quintly. About 76 percent of Americans said they used emoji in business communications, according to a survey cited by The Atlantic.

There are 2,666 official emojis in the Unicode Standard, as of May, that always work. Plus there are countless unofficial emojis introduced by companies, brands and even individual celebrities. Apple marked World Emoji Day by releasing final versions of a few new emojis that will be part of iOS 11, which comes out this fall. There's a new "bearded person," "breastfeeding" and a mushroom-cloud-exploding head, plus a zombie and some others.

»Read more
  Friday, 14 Jul 2017 | 11:57 AM ET

These AI bots are so believable, they get more dates than you

"You sound cute, got a picture?"

"Nicole, your [sic] beautiful, are you single?"

"I love you, Jen."

Those may sound like messages from a dating app, but they're actually real emails people have sent to customer service representatives at places like car dealerships, insurance companies and education firms.

The problem: Those customer service reps aren't human. They're algorithm-powered software programs created by Conversica, a company that specializes in conversational artificial intelligence.

The conversation around machines moving into the American workforce usually focuses on robots taking jobs hard skills like automated manufacturing and fast food cashiers. But a new breed of artificial intelligence is emerging that focuses more on soft skills for jobs like sales and marketing. The chatbots from companies like Conversica allow sales teams to ignore dead-end leads and focus their human power on actual sales.

Advances in natural language processing and buzzword terms like "machine learning" allow increasingly sophisticated communication between humans using artificial intelligence programs.

»Read more

About The Big Crunch

  • The Big Crunch is CNBC’s unique data-driven lens at the juncture of information that moves markets, money and culture. Your daily destination, going behind all the key stats and facts you need to know.

 

Market probability explorer

  • In some cases, an asset will be down substantially but rebound by year's end. CNBC's Big Crunch lets users create their own scenarios based on data.