THU, JUN 29, 2023

MORNING SQUAWK

1. Powell looms

Stocks were mixed Wednesday after Federal Reserve Chairman Jerome Powell again warned that tighter monetary policy was on the way. That may include rate hikes at consecutive Fed policy-setting meetings after the central bank hit pause in June. Still, equities are on track to finish the first half of the year on a high note. The broad S&P 500 is up more than 6% this quarter, which would be its third straight positive period. Meanwhile, investors will keep their eye on weekly jobless claims data Thursday morning. Follow live market updates.

2. All about the game and how you play it

Don’t you just hate when a video game is only available on one system? Microsoft CEO Satya Nadella is with you. Granted, Microsoft’s XBox system has exclusives, as do Sony’s PlayStation and Nintendo’s Switch. But Nadella, testifying in federal court, says he has “no love for that world.” It’s one of the core topics at the center of Microsoft’s fight with the Federal Trade Commission. The regulator is trying to block the tech giant’s nearly $70 billion deal to buy Activision Blizzard, which produces the lucrative Call of Duty series, over concerns Microsoft will limit or block games’ availability for other consoles. In turn, Microsoft has offered 10-year deals to make Call of Duty available to Nintendo and Sony after a sale closes. Sony, which already carries Call of Duty games, doesn’t like it. “I believe that this transaction is bad for competition,” Sony Interactive Entertainment chief Jim Ryan said in a video deposition.

3. Passing grades

The 23 biggest banks passed the Federal Reserve’s annual stress test, although results varied across the board. This year, the banks faced a “severe global recession” scenario that included a jump to 10% unemployment and a 38% decline in housing prices. The stress test came as the banking sector contends with the fallout from March’s regional bank failures, including the potential for tighter regulation. “We should remain humble about how risks can arise and continue our work to ensure that banks are resilient to a range of economic scenarios, market shocks, and other stresses,” said Michael Barr, the Fed’s vice chair for supervision.

4. Bed Bath's great beyond

Bed Bath & Beyond is dead. Long live Bed Bath & Beyond – online. Overstock.com, which acquired the bankrupt home goods retailer’s intellectual property and digital assets in an auction, will change its website’s name to Bed Bath & Beyond in the coming weeks. Overstock is betting that the name recognition will pay off. “Bed Bath & Beyond is an iconic consumer brand, well-known in the home retail marketplace,” Overstock CEO Jonathan Johnson said. Still, while Bed Bath was once known for its ubiquitous 20% off coupons and rummage sale-style store layouts, the brand has also become associated with plunging sales, failure and bankruptcy. It’s also not quite as nostalgic as, say, Toys R Us – which has effectively become the toy section of hundreds of Macy’s stores.

5. Still no clarity out of Russia

The deal that ended the Wagner Group’s armed insurrection over the weekend in Russia may still be under negotiation, according to analysts. The mercenary leader Yevgeny Prigozhin is exiled in Belarus, and yet Russian President Vladimir Putin appears to be on a warpath to punish those who helped with the aborted mutiny. The Institute for the Study of War said Russian bloggers are speculating that the rebellion is “already having widespread impacts on the Russian command structure.” Follow live war updates.

— CNBC’s Mike Calia wrote this newsletter. Yun Li, Jordan Novet, Hugh Son, Gabrielle Fonrouge, Jacob Pramuk and Ruxandra Iordache contributed.

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