JPMorgan upped the likelihood it sees for the U.S. economy entering a recession this year, the latest sign of concern around the country’s financial health following the market turbulence this week. The bank raised its probability for a U.S. or global recession to 35% by year end, chief global economist Bruce Kasman told clients in a Wednesday note. That’s up from the 25% figure shared in the bank’s midyear outlook. Meanwhile, JPMorgan kept its odds for a recessionary period by the second half of 2025 at 45%. The move comes as investors have questioned in recent days if an economic slowdown is imminent after last week’s disappointing jobs report. But traders got better news on the labor market front on Thursday, with the volume of weekly jobless claims coming in lower than economists expected. Kasman pointed to a “material positive shift” in the risk profile for U.S. inflation, catalyzed in part by easing pressure on the labor market as demand cools. He also noted wage inflation is slowing down in a way that’s unlike other developed economies. Now, he said America’s unit labor costs have “realigned to a level broadly consistent” with the Federal Reserve’s inflation target. Given this change, the economist decreased the likelihood of scenarios with higher-for-longer interest rates. While the Fed held interest rates steady at its policy meeting last week, Fed funds futures are pricing in a 100% chance of a cut at the September gathering, according to CME’s FedWatch tool. To be sure, despite raising his odds, Kasman said investors should not assume all signs point to a recession. In fact, Kasman described his increase to near-term recession risk as modest. “More fundamentally, the vulnerabilities normally associated with a recession break—sustained profit margin compression or credit market stress, and energy or financial market shocks—are notably absent,” Kasman told clients. Kasman isn’t the only one on Wall Street hiking expectations for thus outcome. Goldman Sachs raised its forecast to 25% from 15% over the weekend, but said a recession is avoidable given the Fed’s ability to decrease rates or buy bonds.
LONDON — Cybersecurity firm Wiz is seeking to hit $1 billion of annual recurring revenues next year, the company’s billionaire co-founder Roy Reznik told CNBC, adding that the firm will go public “when the stars align.”
Wiz makes software that connects to cloud storage providers like Amazon Web Services or Microsoft Azure and scans for everything it stores in the cloud, helping organizations identify and remove risks in their cloud environments. It was founded by four Israeli friends while they served in 8200, the intelligence unit of Israel’s army, and most of Wiz’s engineering personnel are still based in Tel Aviv, Israel.
Earlier this year, the company rejected a $23-billion acquisition bid from Google, which would have marked the tech giant’s largest-ever takeover. At the time, Wiz CEO Assaf Rappaport said the startup was “flattered” by the offer, but would remain an independent company and aim to list instead.
Speaking with CNBC at Wiz’s new office space in London, Reznik said that the company has received offers from “many people that want to get their hands on Wiz stock” — but that, while “very flattering,” the firm still thinks it can do it alone by going public.
“We’ve already broken a few records as a private company, and we believe we can also break a few more records as an independent public company as well,” Reznik said.
Four-year-old Wiz has raised $1.9 billion in venture capital to date, including $1 billion secured this year in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital at a valuation of $12 billion.
In 2022, Wiz said it had reached $100 million in annual recurring revenue (ARR), up from just $1 million in 18 months. At the time, the startup said it was “the fastest software company to achieve this feat.”
Reznik, who is the vice president of research and development at Wiz, said the firm now hopes to double from the $500 million of ARR it achieved this year and hit $1 billion in ARR in 2025, which CEO Rappaport cited as a key condition before the company goes public.
UK expansion
Wiz has been expanding its presence internationally, with a particular focus on Europe, from where it sources 35% of its revenues. Last month, the firm opened its first European office in London.
“I think the talent here is amazing, and the ecosystem is amazing,” Reznik told CNBC. “We have always been very much involved in Europe — and specifically the U.K. — and I feel like it’s a natural evolvement of Wiz to double down even more here in London and the U.K.”
The U.K. represents a major growth opportunity when it comes to cybersecurity, Reznik said, adding that recent events like the cyberattack on National Health Service hospitals and an incident affecting Transport for London have “roof topped” the level of interest in the kinds of products Wiz offers.
“The cloud market is going to reach $1 trillion over the next next few years,” Reznik, who moved from Israel to the U.K. just three months ago, told CNBC. “This year is going to be around $700 million, while security is just 4% out of that, I would say. So that makes it a $30 billion market, which is huge.”
Speaking about the U.K. market, Reznik said: “We see a lot of interest here. Many of the largest banks and retailers, are Wiz customers. But we’re also seeing a huge potential for growth.”
Wiz’s customers include online retailer ASOS and digital bank Revolut as customers in the U.K.
Check out the companies making headlines in after-hours trading: Netflix — The streaming stock popped more than 4% after third-quarter earnings topped expectations. Netflix earned $5.40 per share on $9.83 billion in revenue, while analysts forecast $5.12 a share and $9.77 billion in revenue. The company also said its ad-tier memberships jumped 35% quarter over quarter. Intuitive Surgical — Shares jumped about 5% after the maker of the da Vinci surgical robot posted better-than-expected third-quarter results. Intuitive Surgical earned $1.84 per share on $2.04 billion in revenue. Analysts surveyed by LSEG had estimated earnings of $1.63 per share on $2 billion in revenue. WD-40 — The maintenance product maker’s shares dropped more than 4% after a disappointing fiscal fourth-quarter earnings report. The company earned $1.23 per share, and said it expects fiscal 2025 profits of between $5.20 and $5.45 per share. OceanFirst Financial — Shares advanced 2.8% after OceanFirst announced that it earned 39 cents per share in the third quarter, a penny above the consensus estimates from FactSet. On the other hand, net interest income and net interest margin both came in lower than forecast. MGP Ingredients — The spirits and food ingredient maker’s stock tumbled nearly 20% after the company warned of disappointing third-quarter results and lowered its full year guidance. CEO David Bratcher said its performance was hurt by weak alcohol trends and elevated whiskey inventories. Marten Transport — Shares of the trucking company slid almost 3% after third-quarter earnings came in lower than analysts anticipated. Revenue and operating income were also lower than the forecasts from three analysts polled by FactSet. Supernus Pharmaceuticals — Shares popped as much as 5% after Supernus Pharmaceuticals announced results from a Phase 2a study of an antidepressant therapy that showed a “rapid and substantial decrease” in depressive symptoms. — CNBC’s Hakyung Kim and Sarah Min contributed reporting.
Check out the companies making the biggest moves midday: Taiwan Semiconductor — Shares surged 12% after the company, which is the world’s largest producer of advanced chips, reported a 54% gain in net profit for the third quarter driven by strong AI-related demand. Shares of chip giants Nvidia and Micron each rose about 3% in sympathy following the quarterly results. Nvidia — The AI-darling was up nearly 3% after hitting a record high earlier in the trading session. Taiwan Semiconductor, which is rallying on its earnings report, is a major Nvidia supplier. Expedia , Uber — Shares of the companies moved in opposite directions following a Financial Times report, which cited people familiar with the process, that Uber explored a potential takeover bid for Expedia. The paper said Uber’s interest in the online travel company was at a “very early stage.” Following the report, Expedia rose more than 3%, while Uber fell more than 2%. Elevance Health — The health insurer dropped 12% after reporting a profit of $8.37 per share for the third quarter, excluding items, while analysts polled by LSEG anticipated $9.66 a share. The company cited “unprecedented challenges” in the Medicaid business. However, Elevance saw $44.72 billion in revenue, above the consensus forecast of $43.37 billion. Travelers — Shares jumped 7.6% after the insurance company posted a big earnings beat before the bell. Travelers’ third-quarter earnings came in at $5.24 per share, topping the $3.55 a share expected from analysts polled by LSEG. However, revenue missed estimates. Lucid Group — The electric vehicle maker tumbled 15% after the company announced a public offering of almost 262.5 million shares of its common stock to raise $1.67 billion. Blackstone — The stock rallied nearly 7% on the back of the alternative asset managers’ financial report. Blackstone reported third-quarter earnings of $1.01 per share on revenue of $2.43 billion. Analysts polled by LSEG had expected EPS of 92 cents on revenue of $2.41 billion. CSX — Shares slipped 5.9% after the transportation company reported disappointing third-quarter results. CSX’s earnings were 46 cents per share on revenue of $3.62 billion. That’s below the consensus estimate of 48 cents per share and $3.67 billion in revenue, per LSEG. Nokia — U.S.-listed shares of the Finnish telecommunications giant fell 3% after the company posted an 8% dip in third quarter sales due to a slowdown in the Indian market. However, its quarterly profit increased 22%. Alcoa — The aluminum producer’s stock shed more than 3% after the company reported third-quarter revenue of $2.90 billion, below the $2.97 billion LSEG consensus estimate. However, its adjusted earnings of 57 cents per share topped the 28 cents a share expected from analysts. Equifax — Shares fell 2.6% after the company’s guidance fell short of expectations. Equifax expects fourth-quarter adjusted earnings per share between $2.08 and $2.18, versus the $2.20 a share estimate from analysts polled by FactSet. The company guided for full-year adjusted EPS between $7.25 and $7.35, short of the $7.36 consensus estimate. Revenue for both the fourth quarter and full year also came in below expectations. Steel Dynamics — The stock gained nearly 5% after the steel producer beat earnings and revenue expectations for the third quarter. For the period, Steel Dynamics posted earnings of $2.05 per share on $4.34 billion in revenue, above the $1.97 per share on $4.18 in revenue that analysts were expecting, according to LSEG. Looking toward 2025, the company said it expects steel pricing to recover. Synovus Financial — Shares popped 5% after the company reported better-than-expected adjusted earnings per share for the third quarter. Synovus also guided for fourth-quarter adjusted revenue of $560 million to $575 million, above the $558 million expected from analysts polled by FactSet. Walgreens Boots Alliance — The stock dropped about 5%, paring some of the 15.8% it gained in the prior session and now on pace for its worst day since Aug 27. On Wednesday, Walgreens reported a fourth-quarter earnings beat and said it plans to close about 1,200 stores over the next three years. — CNBC’s Sean Conlon, Hakyung Kim, Alex Harring and Pia Singh contributed reporting.