US stocks stage a rebound

By CNN Business

Updated 10:30 a.m. ET, May 27, 2021
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10:30 a.m. ET, May 27, 2021

'Star of the overdraft show': Elizabeth Warren blasts Jamie Dimon

From CNN Business' Matt Egan

Democratic Senator Elizabeth Warren slammed Jamie Dimon Wednesday for the $1.5 billion in overdraft fees that JPMorgan Chase collected from consumers last year during the pandemic.

“Mr. Dimon, you are the star of the overdraft show,” Warren said during a Senate hearing.

The Massachusetts senator said JPMorgan collects seven times more in overdraft fees per account than its competitors.

“I think your numbers are totally inaccurate,” Dimon said.

A JPMorgan spokesperson called Warren’s comparisons “false,” noting the senator is likely comparing the bank to much smaller retail lenders.

Warren noted that regulators issued guidance in early 2020 recommending banks automatically waive overdraft fees for customers hurt by the twin health and economic crises. However, the joint guidance Warren’s office linked to later on Wednesday does not say the overdraft fees should be “automatically” waived, only that banks should be “responsive to the needs” of impacted customers.

“We waived the fees for customers upon request if they were under stress because of Covid,” Dimon said.

Warren pointed out that overdraft fees are disproportionately paid by Americans making less than $50,000 a year and minorities. And she said JPMorgan would have still made nearly $28 billion last year if it had not charged overdraft fees.

Asked if he would commit to refunding those fees, Dimon simply said, “No.”

“You and your colleagues came in today to talk about how you stepped up and took care of customers during a pandemic,” Warren said, “and it’s a bunch of baloney.”

Update: A JPMorgan spokesperson told CNN Business: “Last year, when customers said they were struggling, we waived fees on over 1 million deposit accounts, including overdraft fees – no questions asked.”

JPMorgan also noted that it does not charge overdraft fees when customers are less than $5 overdrawn at the end of the day or the transaction is for less than $5. The bank added that it offers an account that doesn't have overdraft fees.

4:06 p.m. ET, May 26, 2021

Stocks end modestly higher

From CNN Business' Anneken Tappe

Wall Street closed Wednesday's session modestly higher: The S&P 500 finished up 0.2% and the Nasdaq Composite ended 0.6% higher. The Dow, which turned 125 today, was flat.

Walgreens (WBA) was one of the worst-performing stocks of the day, closing down 4%, following a report that Amazon (AMZN) is mulling physical pharmacies.

2:23 p.m. ET, May 26, 2021

Exxon directors ousted in major climate milestone

From CNN Business' Matt Egan and Alexis Benveniste

In a major climate milestone, at least two ExxonMobil directors were ousted Wednesday following a bruising battle with activist investor Engine No. 1.

Exxon said Engine No. 1 won two of the four board seats it was seeking – and the two additional board seats are still too close to call. 

The hedge fund argued Exxon is dragging its feet on the climate crisis and also pointed to the company’s poor financial performance.  

The proxy battle was the first at a major US company in which the case for directorial change is being built around the shift away from fossil fuels.

1:33 p.m. ET, May 26, 2021

ZipRecruiter is the latest unicorn to go public

From CNN Business' Paul R. La Monica

The labor market is heating up with the broader economy. More people are looking to go back to work and change careers. That's good news for online jobs site ZipRecruiter (ZIP).

The company went public Wednesday via a direct listing of its shares, and the stock popped nearly 16% from its reference price of $18 following its debut. At a price of just under $21 in midday trading, ZipRecruiter is worth $2.8 billion.

ZipRecruiter joins a growing list of high-profile companies that have recently chosen to list existing shares on Wall Street instead of selling new stock via a more traditional initial public offering or through a merger with a blank check firm known as a special purpose acquisition company, or SPAC.

So far in 2021, popular online gaming platform Roblox (RBLX), Coinbase (COIN) and web hosting firm Squarespace (SQSP) have all gone public through direct listings. Spotify (SPOT) and Palantir (PLTR) have also done direct listings in recent years.

ZipRecruiter faces a lot of competition from the likes of CareerBuilder and Indeed, Microsoft's (MSFT) LinkedIn, as well as Monster Worldwide, which is now owned by Dutch HR giant Randstad (RANJY). But ZipRecruiter is profitable, having earned $86 million last year and another $13.4 million in the first quarter of 2021.

2:22 p.m. ET, May 26, 2021

Cryptos and carbon neutrality are 'diametrically opposed'

From CNN Business' Anneken Tappe

The issue of Bitcoin's carbon footprint is the big topic of discussion everywhere, not least because everyone's favorite cryptocurrency "expert" Elon Musk (TSLA) has only recently become aware of it.

In essence: it takes a huge amount of energy to fuel the computing power necessary to mine new Bitcoin, and that's not very green.

"The idea of being carbon neutral and cryptocurrencies is diametrically opposed," said Lo Toney, founding managing partner at Plexo Capital, during an interview on CNN Business' digital live show Markets Now.

To be sure, not all cryptocurrencies are mined in the same way and suck up that much energy.

1:14 p.m. ET, May 26, 2021

Green stocks could be the next bubble: Charles Schwab strategist

From CNN Business' Anneken Tappe

Green stocks could be the next bubble, but don't worry, we're not talking about the circa- 2008-housing-market kind of bubble.

Usually investors start worrying about bubbles just as they're about to burst (i.e. way too late) but there are lots of investing opportunities while they're forming, said Jeffrey Kleintop, chief global investment strategist at Charles Schwab (SCHW) on CNN Business' digital live show Markets Now.

With the Biden administration intending to spent big on green infrastructure, Europe following along and China looking to clean up the quality of its own economic growth, companies with a "green" label could do very well.

"There will be billions of dollars being spent on green infrastructure over the coming years," Kleintop told CNN's Alison Kosik.

Elsewhere, Kleintop believes investors should be in cyclical stocks to be well positioned for the post-pandemic economy.

"We like financials and it has to do with many different aspects of their businesses but it's also that their valuations are pretty low," he said. Loan demand is returning, asset prices on their balances are improving and that's a positive in the longer term.

2:21 p.m. ET, May 26, 2021

Here's why the used car market is on fire

From CNN Business' Anneken Tappe

The used car market has been on fire for months as consumers acted on the urge to have more mobility during the pandemic.

The supply of additional vehicles, additional stimulus checks that helped bolster Americans' wallets, as well as chip issues for new cars weighing on the new car market were all reasons that demand for used cars went through the roof, said Bill Nash, president and CEO of CarMax (KMX), America's biggest used car retailer.

"Our inventory is down and it's more a reflection of our production capability versus demand," Nash said on the CNN Business digital live show Markets Now.

So will prices keep rising? Maybe so, but there's a natural ceiling.

"At some point the used car prices bump up against the new car prices," Nash said, who said the market is "pretty self-correcting."

So as long as there's a gap there used car retailers will continue to do well.

1:05 p.m. ET, May 26, 2021

Tech is not dead

From CNN Business' Anneken Tappe

Tech stocks are not dead, according to Lo Toney, founding managing partner at Plexo Capital.

"Overall, long-term we continue to be bullish on the future of technology," Toney told Alison Kosik on the CNN Business digital live show Markets Now.  "We like the opportunities that are going to present themselves as consumers begin to spend more and travel more."

Even as the industry is experiencing some turbulence and investors reposition for an economy that's emerging from the pandemic, there's still reason to be excited about the tech space.

"We're continuing to see positive numbers come out," he said with regards to recent economic reports. "I think that's spurring a lot of optimism."

Jitters concerning higher inflation also seem to be subsiding today, he said.

2:17 p.m. ET, May 26, 2021

The housing market is in a ‘little bit of a bubble,’ Jamie Dimon says

From CNN Business' Matt Egan

Jamie Dimon acknowledged the housing boom may be getting out of hand, but the JPMorgan Chase CEO isn’t worried about a repeat of the Great Recession.

Dimon acknowledged during a Senate hearing on Wednesday that there "is a little bit of a bubble in housing prices." But, he added, “unlike in ’08 and ’09, when there was tremendous leverage and bad mortgage underwriting, there is not much leverage and much better mortgage underwriting.”

His comments came in response to a question from Senator Jon Tester asking if there is a housing bubble. Dimon was the only big bank CEO to outright say there is a bubble, but he stressed the financial system is better positioned this time because banks have stocked up on loss-absorbing capital.

“Our capital runneth over. We have enough capital to withstand multiple crises,” he said.

Goldman Sachs CEO David Solomon said he doesn’t see a bubble, though he urged the Federal Reserve to “get the right balance” in policy to keep booming asset prices in check.

Morgan Stanley CEO James Gorman said while housing is not in a bubble nationally, some markets “look very frothy.”

“This has to be monitored very closely,” Citigroup CEO Jane Fraser said. “It’s too soon to call whether it is [a bubble] or not.”