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    in Finance

    Watch IMF chief Kristalina Georgieva and Citigroup CEO Jane Fraser discuss the global economy

    [The stream is slated to start at 11:30 a.m. ET. Please refresh the page if you do not see a player above at that time.]
    Spiraling food and energy prices are squeezing households around the world, while central banks are tightening monetary policy to rein in inflation, exerting further pressure on indebted nations, companies and families.

    CNBC’s Geoff Cutmore speaks with a panel of top global leaders — Kristalina Georgieva, managing director of the IMF, François Villeroy de Galhau, governor of the Bank of France, Jane Fraser, CEO of Citi, and David Rubenstein, co-founder and co-chairman at Carlyle — to discuss the headwinds and tailwinds facing the global economy and what mix of policies are needed in this new volatile context.
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    in Business

    Starbucks will exit Russia after 15 years, closing 130 licensed cafes

    Starbucks announced Monday that it will exit Russia.
    The company has 130 locations in the country, which account for less than 1% of its annual revenue.
    Starbucks said it will pay its nearly 2,000 Russian workers for six months.

    A woman drinks coffee in a Starbucks in a mall in Khimki outside Moscow.
    Alexander Natruskin | Russia

    After 15 years operating in Russia, Starbucks will exit the market, joining companies like McDonald’s, Exxon Mobil and British American Tobacco in withdrawing from the country completely.
    The coffee giant announced Monday that it will no longer have a brand presence in Russia. Starbucks has 130 locations in the country, which account for less than 1% of the company’s annual revenue. They are all licensed locations, so the Seattle-based company itself doesn’t operate them.

    Starbucks said it will pay its nearly 2,000 Russian workers for six months and help them transition to new opportunities outside of the coffee chain.
    Both consumers and investors pressured Western companies like Starbucks to cut ties with Russia to show opposition to the Kremlin’s war with Ukraine, but unwinding licensing deals takes time. Starbucks has suspended all business activity with the country since March 8. The pause included shipping all Starbucks products and temporarily shuttering cafes.
    In its latest quarterly results released in early May, the company did not disclose the financial impact of the suspension of business operations. Former CEO Kevin Johnson had pledged to donate royalties from the Russian business to humanitarian causes.
    But it was surely a smaller financial blow than that dealt to McDonald’s, which has been in Russia for over 30 years.
    The fast-food giant said the suspension of its sizable Russian and Ukrainian operations cost it $127 million in its first quarter. The two markets accounted for 9% of its revenue in 2021. The company had roughly 850 restaurants in Russia, most of which were operated by the company instead of licensees.
    On Thursday, McDonald’s announced it would be selling those locations for an undisclosed sum to a Siberian franchisee, who will run them under a new brand.

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    in Finance

    JPMorgan expects to reach 17% returns sooner than planned as rising rates provide a boost

    The lender said that a 17% return on tangible common equity “remains our target and may be achieved in 2022,” according to a presentation.
    That’s a switch from earlier this year, when CFO Jeremy Barnum warned that headwinds, including rising costs, would cause the bank to miss its target for the next one to two years.
    JPMorgan shares rose 2.1% in premarket trading.

    Jamie Dimon, CEO of JPMorgan Chase speaks to the Economic Club of New York in New York, January 16, 2019.
    Carlo Allegri | Reuters

    JPMorgan Chase on Monday reversed course on guidance it gave in January, saying the bank could achieve a key performance target this year after all.
    The lender said that a 17% return on tangible common equity “remains our target and may be achieved in 2022,” according to a presentation. That’s a switch from earlier this year, when CFO Jeremy Barnum warned that headwinds, including rising costs, would cause the bank to miss its target for the next one to two years.

    “There’s a very good chance this year” of hitting the target and exceeding it next year if there’s a “benign” credit environment, CEO Jamie Dimon told investors Monday in opening remarks for the bank’s Investor Day meeting.
    JPMorgan shares rose 2.1% in premarket trading.
    JPMorgan is holding its first Investor Day since 2020 in response to questions from investors and analysts about the bank’s strategy and investments. The bank’s shares began tanking in January after it revealed an unexpected jump in fourth-quarter expenses and management said that it would likely miss its 17% target for returns.
    On Monday, the bank said that while guidance around 2022 expenses was unchanged at about $77 billion, rising interest rate expectations as the Federal Reserve combats inflation may be proving a boost. The bank said net interest income in 2022 could exceed $56 billion, well above the $50 billion estimate given in January.
    The U.S. economy remains strong and borrowers of all kinds continued to repay their loans at a high rate, Barnum told analysts. The “unusually low” level of credit-card charge-offs will persist into next year, he said.

    Before the investor meeting, analysts had wanted greater detail on the types of investments in technology, personnel and acquisitions embedded within expectations for an 8% increase in expenses this year to $77 billion.
    “This issue is certain to us: front-loaded spending for less certain back-ended benefits,” veteran bank analyst Mike Mayo wrote in a January note in which he slashed his recommendation on JPMorgan shares.
    Since then, JPMorgan executives realized that they erred in not giving more disclosure around their business plans, which include roughly $15 billion in investments for 2022 alone, according to a person with knowledge of the bank.
    In recent years, the biggest U.S. bank by assets has aggressively invested in technology and personnel to compete with both traditional and emerging fintech players. That has helped it win market share in business lines from credit cards to deposits to Wall Street trading.
    Apart from Dimon and his CFO, division heads including Daniel Pinto, Marianne Lake and Jennifer Piepszak are expected to give presentations on Monday.
    JPMorgan shares have posted the worst performance among the six biggest U.S. banks, falling about 26% this year before Monday and exceeding the 19% drop of the KBW Bank Index.
    This story is developing. Please check back for updates.

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    Christine Lagarde says crypto is worth nothing

    Bitcoin and other cryptocurrencies are “worth nothing,” European Central Bank President Christine Lagarde said.
    Lagarde said she thinks crypto should be regulated to protect inexperienced investors.
    Her comments come at a time of heightened regulatory scrutiny of the crypto market.

    The European Central Bank is exploring whether to issue its own digital alternative to cash.
    Olivier Matthys | AFP | Getty Images

    European Central Bank President Christine Lagarde thinks cryptocurrencies aren’t worth a dime.
    “My very humble assessment is that it is worth nothing,” Lagarde said of crypto in an interview with Dutch talk show “College Tour” that aired Sunday.

    “It is based on nothing,” she added. “There is no underlying asset to act as an anchor of safety.”
    Lagarde called on global policymakers to put rules in place to protect inexperienced investors making big bets on digital assets. Cryptocurrencies have plunged across the board this year, with bitcoin — the world’s largest — erasing more than half of its value since its November all-time highs.
    “I’m concerned about those people who think it’s going to be a reward, who have no understanding of the risks, who will lose it all, and who will be terribly disappointed, which is why I believe that should be regulated,” Lagarde said.
    One member of the show’s audience said they lost 7,000 euros ($7,469) after buying the token cardano, to which Lagarde responded: “That hurts.”
    The former International Monetary Fund chief’s skepticism of crypto isn’t new. She’s previously raised concerns about the environmental impact of digital currencies, as well as their potential use in money laundering and sanctions evasion.

    Her latest comments arrive at a time of heightened scrutiny of the crypto market as regulators react to the fallout from the collapse of terraUSD, a controversial so-called stablecoin that was meant to always be worth $1.
    Several central banks are working on their own virtual alternatives to cash in response to the rapid growth of digital currencies — the ECB being one of them. A digital euro would be “vastly different” from private cryptocurrencies, Lagarde said.

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    Stocks making the biggest moves in the premarket: Electronic Arts, VMWare, GameStop and more

    Take a look at some of the biggest movers in the premarket:
    Electronic Arts (EA) – The video game maker’s shares rose 2.5% in the premarket after Puck News reported that the company was actively seeking a buyer or merger partner. EA has reportedly held talks with Walt Disney (DIS), Apple (AAPL) and Amazon (AMZN), among others.

    VMWare (VMW) – The cloud computing company’s stock surged 21.3% in premarket trading following multiple reports that it is in advanced talks to be bought by chipmaker Broadcom (AVGO). The two companies are said to be discussing a cash-and-stock deal which could happen soon, according to people familiar with the matter. Broadcom slid 4.3%.
    GameStop (GME) – GameStop jumped 3.5% in premarket trading after the video game retailer launched a digital wallet for cryptocurrencies and NFTs.
    HP Inc. (HPQ) – The computer and printer maker was downgraded to “neutral” from “buy” at Citi, based on moderating demand for PCs in the near to mid-term. HP fell 2.7% in premarket action.
    Pfizer (PFE) – Pfizer and partner BioNTech (BNTX) said three doses of their Covid-19 vaccine offered strong protection for children under 5, according to preliminary data. BioNTech rose 1.8% in premarket trading, while Pfizer edged higher by 0.2%.
    Motorola Solutions (MSI) – Morgan Stanley upgraded the communications equipment and software company’s stock to “overweight” from “equal-weight,” with a number of favorable trends in place including an increase in demand for video surveillance. Motorola Solutions gained 2.5% in the premarket.

    Emergent BioSolutions (EBS) – The biopharma company’s stock rallied 11.1% in premarket trading, amid the increasing concerns about the spread of monkeypox. Emergent is a supplier of smallpox vaccine, which can be used as protection against monkeypox.
    Autodesk (ADSK) – The design software company’s stock fell 3.9% in premarket action after RBC cut its price target on the stock to $255 per share from $295 a share. RBC said Street earnings consensus may be too high and that Autodesk needs to establish consistency in its results to increase investor confidence.
    Boeing (BA) – Boeing rose 1% in premarket trading after its Starliner spacecraft successfully docked with the International Space Station over the weekend.
    Corning (GLW) – The materials science company’s stock slid 2.6% in the premarket after Citi downgraded it to “neutral” from “buy,” citing lower PC and tablet demand impacting Corning’s optical components business. Citi also notes uncertainty about demand recovery for premium and large-size televisions.

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    Tether withdrawals top $10 billion as regulators raise alarm about stablecoins

    Tether has seen its circulating supply plunge from a record $84 billion on May 11 to around $73 billion as of Monday.
    Regulators have raised concerns about stablecoins after the collapse of UST, which at one point was the world’s third-biggest stablecoin.
    The panic over UST has drawn attention to other stablecoins — tether, in particular.

    Tether claims its dollar-pegged token is “fully backed.”
    Justin Tallis | Afp | Getty Images

    Investors have yanked more than $10 billion out of tether in the past two weeks amid heightened regulatory scrutiny over stablecoins.
    Tether, the world’s largest stablecoin, has seen its circulating supply plunge from a record $84.2 billion on May 11 to around $73.3 billion as of Monday, according to data from CoinGecko. About $1 billion was withdrawn late Friday evening.

    The cryptocurrency, which is meant to be pegged to the U.S. dollar, temporarily dipped as low as 95 cents on May 12 after another type of stablecoin, terraUSD — or UST — plunged well below $1. That resulted in a sell-off in UST’s associated luna token, which in turn wiped out more than $40 billion in holders’ wealth.
    The fallout from the collapse of Terra, the blockchain behind UST and luna, sent shockwaves through the crypto market, with bitcoin and other cryptocurrencies tumbling sharply. That’s causing concern for regulators.
    “Whenever there’s a failure or a catastrophe in crypto, the fear is always that someone will misread the situation and overcorrect in a position that’s not helpful for the entire community writ large,” Kathleen Breitman, a co-creator of the Tezos blockchain, told CNBC.
    “As much as I relish seeing things that don’t make sense fail, there’s always a tinge of like, ‘Are people going to extrapolate from this that everything that’s a stablecoin is unsound?’ That’s always the big fear.”

    Arrows pointing outwards

    Unlike tether, UST wasn’t backed by fiat currency held in a reserve. Instead, it relied on some complex engineering where price stability was maintained through the destruction and creation of UST and its sister token luna. Investors were lured in by the promise of 20% savings yields from Anchor, Terra’s flagship lending platform, a rate many investors said was unsustainable.

    Terra creator Do Kwon had also accumulated billions of dollars’ worth of bitcoin and other tokens through his Luna Foundation Guard fund, but nearly all of the funds were depleted in a futile effort to save UST.
    Nevertheless, the panic over UST has drawn attention to other stablecoins — tether, in particular.
    Regulators and economists have long questioned whether Tether has enough assets in its reserves to justify its stablecoin’s purported peg to the dollar.
    The company previously claimed tether was backed one-to-one by dollars in a bank account, but subsequently revealed it was using other assets including commercial paper — short-term corporate debt — and even digital tokens as collateral after a settlement with the New York attorney general.
    Last week, Tether said it reduced the amount of commercial paper it owns and increased its holdings of U.S. Treasury bills. For the first time, the British Virgin Islands-based firm said it also holds some foreign government debt. Tether declined to comment further on the source of its funds, but said it is pursuing a more thorough audit of its reserves.

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    China demand must remain weak or we'll have big trouble in the oil markets, IEA chief says

    Speaking to CNBC on Monday, Fatih Birol paints a stark picture of the current situation, describing oil prices as being “very high.”  
    “They are risky for economic recovery around the world, but especially in the importing countries in the emerging world,” he says.
    Birol also stresses importance of spending money on solar, wind and hydrogen.

    Speaking to CNBC on Monday, the executive director of the International Energy Agency spoke about the intricacies of the energy transition and the competing challenges that will need to be balanced in the years ahead.
    Imaginima | E+ | Getty Images

    The executive director of the International Energy Agency spoke of the current challenges facing global oil markets on Monday, highlighting the significant influence Chinese demand could have over the next few months.
    In an interview with CNBC at the World Economic Forum in Davos, Switzerland, Fatih Birol painted a stark picture of the current situation, describing oil prices as being “very high.”  

    “They are risky for economic recovery around the world, but especially in the importing countries in the emerging world,” he said. “It’s a big risk, together with the food prices being very, very high, and I think that it may well trigger us, the world … step by step to a recession.”
    With geopolitical tensions elevated following Russia’s invasion of Ukraine and continued concerns about supply casting a shadow over oil markets, the price of Brent crude currently sits at around $113 a barrel.

    More from CNBC Climate:

    Looking ahead, Birol went on to lay out some of the challenges markets may face in the coming months.
    “I very much hope that the increase coming from [the] United States, from Brazil, Canada this year, [will] be accompanied by the increase coming from the key producers in Middle East and elsewhere,” he said.
    “Otherwise, we have only one hope that we don’t have big trouble in the oil markets in summer, which is hoping … that the Chinese demand remains very weak.”

    Chinese oil demand weakened in recent months as the country imposed a number of stringent lockdowns in a bid to curb the spread of Covid-19.
    If China went back to the usual oil consumption and oil demand trends, “then we will have a very difficult summer around the world,” Birol said.

    During his interview with CNBC, Birol was also asked about the “enormous” profits being made by a lot of hydrocarbon based companies — as well as exploration companies — and what should be done with them.
    His response illustrated the intricacies of the global energy transition and the competing challenges that will need to be balanced in the years ahead.
    “In the last five years, on average, [the] oil and gas industry made revenues [of] about $1.5 trillion,” he said.
    “And this year, from 1.5 it will go to 4 trillion U.S. dollars, more than two times increase in the oil and gas companies’ revenues.”
    It was not only businesses that were making money, he added, namechecking countries such as Saudi Arabia, Iraq, Iran, Russia, Angola and Nigeria.
    “Of course, money should go, in my view, to replace the Russian oil and gas, in terms of the traditional assets,” Birol said.
    “But I very much hope that money also goes to clean energy, clean and secure energy technologies, ranging from solar, wind, carbon capture and storage, hydrogen.”
    “We are [responding to] … this immediate crisis,” Birol said. “But our response should not lock in our energy infrastructure to a terrible world which is much, much hotter than today and with a lot of problems — extreme weather events and so on.” More

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    ABBA hopes to go one better than Elvis and Michael Jackson with new immersive performance

    Founding member Bjorn Ulvaeus confirmed to CNBC that the much-loved band’s 2021 chart-topping “Voyage” album – their first in 40 years — will be their last.
    ABBA — Agnetha Faltskog, Bjorn Ulvaeus, Benny Andersson and Anni-Frid Lyngstad — launched onto the world stage after winning the Eurovision Song Contest with “Waterloo” in 1974. 
    The band has gone on to sell over 400 million records worldwide, and once reportedly came only second to Volvo as one of Sweden’s biggest exports. 

    Swedish music band ABBA, shown here as wax figures, have sold over 400 million records worldwide.
    Jonathan Nackstrand | Afp | Getty Images

    Pop legends ABBA are taking a big punt on their latest immersive project, founding member Bjorn Ulvaeus has told CNBC.
    The much-anticipated immersive performance called ABBA Voyage is billed as “a concert 40 years in the making,” and features digital avatars of the Swedish supergroup accompanied by a 10-piece live band.

    Speaking in late April ahead of its long-awaited world premiere in London, U.K., this week, Ulvaeus told CNBC it was “a hell of a risky project in so many ways.”
    “The risk is, of course, that people won’t find it to be the experience that I think and hope it will be. That is the main thing. If people would go from the concert thinking, yeah, well, that wasn’t bad but … We want them to feel, you know, emotional and to feel that they’ve gone through something that they’ve never seen before.”  

    Last album

    The pop icon also confirmed to CNBC that the much-loved band’s 2021 chart-topping “Voyage” album – their first in 40 years — will be their last.
    ABBA — Agnetha Faltskog, Bjorn Ulvaeus, Benny Andersson and Anni-Frid Lyngstad — launched onto the world stage after winning the Eurovision Song Contest with “Waterloo” in 1974. 

    The band has gone on to sell over 400 million records worldwide, and once reportedly came only second to Volvo as one of Sweden’s biggest exports. 

    It’s been 40 years since the band last performed together and Ulvaeus said he was “nervous and thrilled.”
    He said he expects this week’s opening of the ABBA Voyage digital concert to be “so incredibly special” and beat any other moment in his professional life so far.
    In the latest episode of “The CNBC Conversation,” Ulvaeus says the idea first came about five years ago — to create digital “ABBA-tar” copies of the band from their 1979 prime, in a cutting-edge technology concert.
    He said trials had been done before with Michael Jackson and Elvis, but the team behind the technology were keen to use it with living figures.
    “It’s better to do it with someone who is still alive because your cranium, even though the rest of your body falls apart … the measurements in the cranium are the same, so it’s easier to recreate a younger copy of yourself if you’re still alive,” Ulvaeus said.
    To create the human-like avatars, the four members of the band, who are now in their seventies, dressed in motion capture suits and performed all of the songs on stage in a specially constructed studio in Stockholm, Sweden.

    “They would dress us in kind of tight costumes, black with dots on them and there were dots on our faces, and we would have helmets. And then we’d go on that stage and we would perform a song almost as if we had performed it on ‘Top of the Pops,’ the old British [TV] program,” he said.
    “It was weird at first. I mean, I was looking around and there’s Agnetha doing her stuff, and Benny, just like the old days. But in the end, it was fun.”

    Deep fakes

    Ulvaeus said the band were leading the way with the technology behind ABBA Voyage. 
    “We are pioneers in this field, to make avatars, to build digital copies that are as human beings — to the pores, through the hairs in the nose, through everything [it] will make you feel after a while that this is a human being, this is not digital, this is a video of a human being, and it’s great fun to be the pioneer and to do it in this context,” he said.
    But the celebrated star said he does worry about how the technology could be misused by those wanting to create “deep fake.”
    “I realized that it could be misused, and it will be misused. Not our avatars, but other avatars will be used as vehicles saying things that the original people don’t mean, fake, I mean, deep fake. Deep fake is going to be indistinguishable from the real thing going forward and that’s something we really have to watch out for,” he said.
    “But somebody was going to do it anyway, so I thought maybe to do it in a positive way as pioneers would be good to show how it can be used.”

    A purpose-built “ABBA Arena” which can hold a 3,000-strong audience has been created in the Queen Elizabeth Olympic Park in London.
    The ABBA Voyage concert performances open to the public on May 27 and Ulvaeus told CNBC they can expect a hit parade with a few not so well-known songs, and some from their latest album.

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