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    How to trade Europe’s incoming ‘revenge spend,’ according to BlackRock

    People sit in a restaurant on the roof of the Selfridges department store on Oxford street, as the coronavirus disease (COVID-19) restrictions ease, in London, Britain April 12, 2021. REUTERS/Henry NichollsHenry Nicholls | ReutersLONDON — As Europe’s economy reopens, consumers have already begun a “revenge spending” spree in some areas, according to BlackRock, who suggested that a strong rebound in economic activity will lead to a deluge of consumer spending on dining, drinking, travel and leisure.”We call this ‘revenge spending’ – people are thrilled to be gaining a taste of freedom, and so splurge on social occasions and discretionary items,” BlackRock Fundamental Equities Co-CIO Nigel Bolton and Sophie Steel, head of the consumer industry group, said in the report published Tuesday.The pandemic-induced lockdowns and unprecedented monetary and fiscal stimulus from central banks and governments have led to huge piles of consumer savings, with Moody’s Analytics estimating that U.S. personal savings are $2.6 trillion greater than they would have been without the pandemic. This equates to around 12% of GDP. Meantime, the increased rollout of vaccines across the developed world has enabled major economies to cautiously reopen and consumers to begin spending again.UBS’ Head of European Equity Strategy Nick Nelson told CNBC on Wednesday that around 700 billion euros ($852.8 billion) of excess savings are waiting to be deployed across Europe and the U.K.Yet Bolton and Steel suggested that consumers will not revert completely to their pre-pandemic spending habits, and many reopening plays have already been well exploited within equity markets.This means investors will need to be actively selective and aim to buy companies with the potential for strong earnings through 2022 and 2023, targeting sectors where “pandemic trends may have inspired new behaviours and preferences,” they said, rather than simply pulling forward demand.Not all revenge spending will stickStock market valuations have already become elevated in many sectors aligned with the reopening, but BlackRock believes there are some areas that may outpace consensus.Due to a slower vaccine rollout and longer lockdowns, European “reopening sectors” have lagged their U.S. counterparts, but BlackRock data scientists believe these sectors will catch up during the remainder of the year.”The latest data show Europe is now vaccinating at the same pace as the U.S. and the UK, implying the recovery-lag should remain fixed at two to three months, rather than grow longer,” they said, adding that Europe’s airlines will likely be at or near 2019 spending levels in two to three months’ time, where the likes of Allegiant and American Airlines currently are.A similar lag was observed in premium dining, with U.S. high-end restaurants surpassing 2019 spending levels in some cases, according to analysis of credit card data, a trend analysts expect to expand as economies open globally.The world’s largest asset manager also noted that demand had already spiked for luxury goods, such as handbags and champagne, in the first quarter of 2021. Social spending has also surged, with sales at U.K. pubs 12% higher than pre-pandemic levels during the first week of reopening, despite only offering outdoor seating during predominantly poor weather conditions.However, Bolton and Steel said consumer behavior had permanently changed in two areas: pandemic pets and mobile food orders.”Dog ownership soared during the pandemic, and people are spending more on their pets. This means premium pet-food companies could be well placed to profit,” they said.Food delivery companies surged amid stay-at-home orders, but BlackRock said there is evidence that the takeout app trend is here to stay, with sales for food delivery apps actually strengthening in some areas of the U.S. despite the re-opening.Based on a survey of around 5,000 consumers across Europe and the U.K., UBS’ Nelson confirmed that travel and hospitality were high on the agenda, but added that mobility sectors such as autos and fuel can also expect a splurge.Pricing power and sustainabilityAlongside new spending themes, BlackRock also encouraged investors to look at the unique pricing environment created by supply disruptions and soaring post-pandemic demand.”Prices of commodities such as steel, wheat and corn have surged in the past year, and there are early signs of wage inflation,” the report said.”In this environment, active managers look for pricing power – those companies that can pass the higher costs of materials and wages on to the end consumer.”Meanwhile, the asset manager said consumers are increasingly balancing share price decisions against criteria of sustainability, suggesting that companies with strong social, environmental and governance are rapidly becoming a “must-have” in investment portfolios. More

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    Software start-up Celonis quadruples valuation to $11 billion in new funding round

    Celonis co-founders Bastian Nominacher, Alexander Rinke and Martin Klenk.CelonisLONDON — Enterprise software firm Celonis on Wednesday said it had raised $1 billion in a new round of funding, valuing the company at an eye-watering $11 billion.The new investment was co-led by Durable Capital Partners and T. Rowe Price Associates, with Franklin Templeton and Splunk Ventures also participating. Celonis is now worth more than four times the $2.5 billion it was last privately valued at in a 2019 cash injection.Founded in 2011 by three friends in Munich, Germany, Celonis began life as a college project for consulting businesses on improving their IT processes.The firm pioneered a technology called “process mining,” which analyzes data from a company’s event logs to identify problems with certain processes and figure out ways to streamline them.”As companies grow, inefficiency creeps in and business execution becomes a struggle,” Alex Rinke, co-CEO and co-founder of Celonis, said in a statement. “Employees feel it, customers feel it, and it leads to significant financial losses and environmental impact.””We are thrilled and honored that the rise of execution management is defining a new software stack that helps customers reimagine how they execute,” he added. “It is the biggest shift in software since cloud computing.”The company says it’s growing by triple digits each year, boasting a clientele featuring the likes of Dell, L’Oreal and Pfizer. The New York and Munich-headquartered firm now has more than 1,300 employees globally.In addition to announcing a huge funding deal, Celonis said it had appointed Carlos Kirjner, formerly vice president of finance at Google, as its new chief financial officer ahead of an anticipated initial public offering.It’s the latest sign of how investors are gushing over enterprise software businesses with recurring revenue streams and comes at a time when the coronavirus pandemic has accelerated a digital shift for businesses of all shapes and sizes.A slew of software companies have gone public in the U.S. over the past year. Romanian-founded firm UiPath went public in a blockbuster debut on the New York Stock Exchange in April, while cloud company Snowflake listed last September. More

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    Stocks making the biggest moves in the premarket: AMC Entertainment, Lands' End, Ambarella & more

    Take a look at some of the biggest movers in the premarket:AMC Entertainment (AMC) – AMC surged 23.7% in premarket trading following yesterday’s 22.7% jump. That came after the movie theater operator raised more than $230 million in a share sale to hedge fund Mudrick Capital, which is said to have immediately sold those shares at a profit.Lands’ End (LE) – The apparel retailer reported an unexpected profit of 8 cents per share, compared to a consensus forecast for a 29 cents per share quarterly loss. Revenue also exceeded estimates, helped by a jump in digital sales. Lands’ End surged 6.6% in premarket trading.Ambarella (AMBA) – Ambarella beat estimates by 6 cents a share, with quarterly profit of 23 cents per share. The maker of video chips and components also saw its revenue beat Street projections, boosted by strong growth in the company’s automotive business. It also gave an upbeat outlook. Ambarella rallied 4.9% in the premarket.Advance Auto Parts (AAP) – The auto parts retailer earned $3.34 per share for its latest quarter, beating the consensus estimate of $3.08 a share. Revenue came in above estimates as well. Comparable-store sales increased 24.7%, slightly better than the 23% consensus estimate. Advance Auto noted sales strength from both do-it-yourself and professional customers.Etsy (ETSY) – The online crafts marketplace announced a deal to buy fashion resale company Depop for $1.625 billion. London-based Depop will continue to operate as a separate marketplace after the deal is completed. Etsy rose 1% in the premarket.Hewlett Packard Enterprise (HPE) – Hewlett Packard Enterprise reported a quarterly profit of 46 cents per share, beating estimates by 4 cents a share. Revenue also topped Wall Street forecasts. The enterprise computing company posted its first year-over-year revenue growth since 2018, however it also reported a sequential decline in hardware profit margins. Its shares fell 1.8% in premarket trading.Zoom Video (ZM) – Zoom came in 33 cents a share ahead of estimates, with quarterly earnings of $1.33 per share. The video communications platform company’s revenue beat analysts’ forecasts as well, and the company gave upbeat guidance even as more people return to offices. Zoom shares gained 2.4% in the premarket.Taiwan Semiconductor (TSM) – The chip maker has begun construction at a new chip plant in Arizona, according to Chief Executive Officer C.C. Wei. He said the planned factory remains on track to begin chip production in 2024.Cinemark (CNK), IMAX (IMAX) – Goldman Sachs downgraded both stocks to “sell” from “neutral,” saying an expected movie box office recovery in 2021 and 2022 is already reflected in the prices of both stocks and that there are “heightened risks” to that recovery. Cinemark lost 2.8% in premarket action, while IMAX fell 2.5%Tesla (TSLA) – Tesla was reportedly told by the Securities and Exchange Commission, once in 2019 and once in 2020, that it had failed to properly approve tweets by CEO Elon Musk on two occasions. The Wall Street Journal cited documents obtained under the Freedom of Information Act, which point to one tweet about Tesla’s stock price and another about production levels.Moderna (MRNA) – The drugmaker announced a partnership with life sciences company Thermo Fisher Scientific (TMO) to provide manufacturing and packaging services for Moderna’s Covid-19 vaccine as it seeks to ramp up production.Scotts Miracle-Gro (SMG) – Scotts raised its full-year financial outlook, as it expects the pandemic-related boost in sales of lawn and garden products to continue even as the pandemic recedes. Scotts now expects full-year sales growth of 17% to 19%, compared to a prior estimate of 8% to 12%. Scotts shares added 1% in premarket action. More

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    EU travel rules are 'incredibly over-politicized', Wizz Air CEO says

    In this articleWIZZ-GBLONDON — The coordination of travel rules in the European Union has become a politicized process and the rules remain “unpredictable,” the CEO of Wizz Air said as the airline experiences “huge” demand for the summer.”I think the European Union as such has broken down completely, we have failed to come with unified measures and an orchestrated approach dealing with the situation and it has become incredibly over-politicized,” József Váradi, chief executive officer of budget airline Wizz Air told CNBC’s Squawk Box Europe on Wednesday.European consumers are keen to get flying again and spend some time away this summer. However, there are concerns that constant changes to quarantine policies and the need to take Covid tests before and after the holiday might put some travelers off.There is nothing wrong with people’s willingness to travel, the problem is government impos(ing) restrictions.József VáradiCEO of Wizz AirIn addition, France and Germany recently put restrictions on non-essential travel from the U.K. where a more transmissible variant of the coronavirus first discovered in India has spread. Some believe the move could have been somewhat politically motivated following acrimony over the supply of Covid vaccines.Váradi said that restrictions on U.K. travelers was an example of how travel rules had become politicized, noting that “if you look at the U.K. for example the country is very well vaccinated, better than the European so you guys should travel freely within the European Union.”‘Unpredictable’ rules”The European regulatory framework remains very volatile and unpredictable and I think this is really the problem,” Váradi also said.”There is nothing wrong with the consumer, there is nothing wrong with people’s willingness to travel, the problem is government impos(ing) restrictions and the unpredictable nature of that,” he added.Members of the European Union have jointly discussed how to reopen their economies to tourists this summer. However, how and when this is done are ultimately decisions taken at the national level and may differ from what has been suggested by European institutions.  Nonetheless, the 27 EU nations are working to make traveling easier both within the EU and from outside the bloc.A couple of tourists looks at the Balos beach and its lagoon in the north west of the island of Crete, on May 13, 2021.LOUISA GOULIAMAKI | AFP | Getty ImagesVaccinated tourists outside the EU will be allowed to travel into one of the 27 EU nations this summer, provided they have received the last recommended dose at least 14 days before their arrival in the EU. They might however be subject to quarantines upon arrival, depending on the rules of their destination and the epidemiological situation in their country of origin.Similarly, European citizens are also able to fly to other EU nations either by showing proof of vaccination or a negative test. EU citizens have now the chance to combine this information in a digital covid certificate.”Europeans should enjoy a safe and relaxing summer. As vaccination progresses, we propose to gradually ease travel measures in a coordinated way with our common tool: the EU Digital COVID Certificate,” European Commission President Ursula von der Leyen said on Monday.However, quarantines may apply too but the EU’s idea is to lift this requirement to boost intra-EU travel.The European travel and leisure sector traded marginally lower on Wednesday morning, with Wizz Air down about 0.6%. More

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    India will likely see double-digit growth this quarter, but economists warn it's not the full picture

    Crowds of people are seen shopping during a weekly market at Kandivali.SOPA Images | LightRocket | Getty ImagesIndia is expected to see double-digit expansion in the three months ending in June — but economists warn that the data won’t be painting the full picture of the country’s growth trajectory.South Asia’s largest economy released fourth quarter GDP data Monday that showed an expansion of 1.6% from the same period a year ago, driven mostly by state spending and manufacturing sector growth. Full year GDP is estimated to have contracted 7.3% compared to a 4% growth in the previous year.Since February, India has been battling a devastating second wave of coronavirus that accelerated in April and peaked in early May. The infection forced most of India’s industrial states to implement localized lockdown measures to slow the spread of the virus.”With the lockdowns which are there, we think that going ahead, the economy will tend to slow down,” Madan Sabnavis, chief economist at Care Ratings, said Tuesday on CNBC’s “Street Signs Asia.””The numbers which we get for the first quarter of fiscal 2022 — that is for the quarter ending in June — may be very much misleading,” he said. India’s fiscal year begins in April and ends in March the following year.On (a) sequential basis, we are going to see a double digit contraction when we do a seasonally adjusted data, but on the year-on-year comparison, you are going to see a strong double-digit growth.Radhika RaoDBS GroupFor the April-June quarter last year, the economy contracted 23.9% as a months-long national lockdown hammered the country. Economists argue that while the reported year-on-year figure for the current quarter will likely show a double-digit growth, the strong number will be due to the low base from last year’s negative print.”On (a) sequential basis, we are going to see a double digit contraction when we do a seasonally adjusted data, but on the year-on-year comparison, you are going to see a strong double-digit growth,” Radhika Rao, an economist with Singapore’s DBS Group, said Tuesday on CNBC’s “Squawk Box Asia.””That’s because it’s coming on the back of a 24% drop the same time last year,” she added.Still, experts agree that the economic impact of the second wave may not be as severe as the one seen last year. India has, thus far, avoided another national lockdown, allowing states to implement localized shutdowns instead. Economists agree that the country is generally on track to revive its growth but at a delayed pace.Data is likely to show that consumption lost momentum this quarter on a sequential basis due to the second wave as households had to prioritize more of their spending on hospitalization and medical expenses, Rao explained.”So, domestic demand, which is the main component for growth, is not going to look that good. Plus you have got contact-intensive services, most of which had been shut down,” she said, adding, “Only into June now, some of the states are starting to talk about reopening. But, certainly, it’s a very staggered and a very unpredictable path, in terms of the unwinding of restrictions.”Many economists have trimmed their full fiscal 2022 growth predictions for India. Goldman Sachs, for example, lowered its full-year real GDP growth forecast from 11.1% to 9.9%. More

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    U.S. Treasury Secretary Yellen and China's vice premier talk about cooperation and economic recovery

    The flags of China, U.S. and the Chinese Communist Party are displayed in a flag stall at the Yiwu Wholesale Market in Yiwu, Zhejiang province, China, May 10, 2019.Aly Song | ReutersBEIJING — China’s Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen spoke Wednesday for the first time since President Joe Biden took office.Both the U.S. and China said the two leaders talked about the economy and cooperation, and “frankly” discussed issues of concern.Yellen discussed the Biden administration’s plans to “support a continued strong economic recovery and the importance of cooperating on areas that are in U.S. interests,” the Treasury said in a statement.Liu and Yellen agreed the two countries’ economic relationship is “very important,” Chinese state media said, according to a CNBC translation. The report said the leaders held a wide-ranging discussion on the macroeconomic situation and multilateral cooperation.Neither side shared further details on the conversation. The world’s two largest economies have remained close trading partners despite geopolitical tensions.The U.S. dollar has been weakening as the U.S. central bank keeps interest rates low to support the economy’s recovery from the coronavirus pandemic. Partly as a result, the Chinese yuan is at its strongest against the greenback in about three years. That makes Chinese goods relatively more expensive for American buyers.Many economists in China are also concerned about spillover effects from massive U.S. government spending meant to support growth.Investors have been betting on a recovery, sending commodity prices surging. The rising prices have hit Chinese businesses, prompting the central Chinese government to announce additional support and clamp down on market speculation.Chinese state media characterized the two leaders’ discussion Wednesday as one bearing an attitude of “mutual respect,” a phrase Beijing often uses when calling for more favorable communication with the U.S.Last week, Liu spoke with U.S. Trade Representative Katherine Tai for the first time since Biden took office. More

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    Stock futures are little changed after muted start to June

    U.S. stock index futures were little changed during overnight trading on Tuesday, following muted action on the first day of June.Futures contracts tied to the Dow Jones Industrial Average gained just 23 points. S&P 500 futures and Nasdaq 100 futures both hovered above the flatline.During regular trading, the Dow gained 47 points, or 0.14%, after rising more than 300 points at one point. The S&P broke a 3-day win streak to close down just 2 points. The Nasdaq Composite was the relative underperformer, shedding 0.09% for its second negative session in three.Despite the muted action, there were some gainers during the session, notably in stocks connected to the reopening. Airline and cruise operator companies saw their stocks jump as Covid cases in the U.S. continue to decline.Inflation fears, and the ways in which the Federal Reserve might respond, have weighed on sentiment recently, although the major averages are still hovering around all-time highs.”Markets remain strong,” said Cliff Hodge, chief investment officer for Cornerstone Wealth. “Economic growth is robust, monetary conditions remain extremely easy and consumers are flush with cash from stimulus as virus cases fall and the economy reopens.”The S&P 500 and Dow are down 0.8% and 1.5%, respectively, from their May records. The Nasdaq has a little more ground to make up following a rotation out of growth-oriented areas of the market. The tech-heavy index is currently 3.3% from its April all-time high.Looking forward, strategists at Morgan Stanley said to favor defensive and reasonably priced quality names during the mid-cycle transition.”We think superior execution during the reopening phase and earnings stability are traits the market will reward,” the firm wrote in a note to clients.Energy was the top-performing S&P 500 group on Tuesday following a jump in oil prices that sent West Texas Intermediate crude futures to the highest level in more than two years.Shares of AMC were another notable mover, jumping 22% after the company said in a filing that it raised $230.5 million through a stock sale.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today More

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    Coinbase Pro opens up to dogecoin after cryptocurrency's 6,000% gain this year

    In this articleCOINMonitors display Coinbase signage during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, on Wednesday, April 14, 2021.Michael Nagle | Bloomberg | Getty ImagesCoinbase is finally getting into dogecoin.Starting Tuesday, the crypto exchange is offering its Pro users the option to trade dogecoin, a cryptocurrency that was started as a joke and has taken off this year, helped by the frequent tweeting of Tesla CEO Elon Musk.Dogecoin is currently trading at 32 cents, up almost 6,000% for the year. However, it’s dropped by more than 50% since reaching a high in May.Coinbase is one of the largest crypto exchanges on the planet, and its Pro service, as the name suggests, is designed for professional traders. Dogecoin is also available for purchase on Robinhood’s app and through Gemini.Coinbase said in a blog post that it will “immediately” begin accepting inbound transfers to Coinbase Pro. If there is enough liquidity, trading of dogecoin will begin on or after 9 a.m. Pacific Time on Thursday, in supported locations. However, trading will be staggered.The company says it plans to launch in three phases: post-only, limit-only and full trading.”If at any point one of the new order books does not meet our assessment for a healthy and orderly market, we may keep the book in one state for a longer period of time or suspend trading,” the company wrote, citing its trading rules.Read more about cryptocurrencies from CNBC ProJPMorgan says big investors are not buying the bitcoin dip, prices could fall furtherGoldman, Roubini and Novogratz explain where they stand on bitcoin and etherCathie Wood sees deflation returning, boosting innovation stocks and bitcoinDogecoin is not yet available on Coinbase’s primary website or its consumer mobile apps. The company said there will be a “separate announcement if and when this support is added.” For now, that means that retail investors will have to look elsewhere.Coinbase, which went public in April, makes most of its money from the trading and storage of bitcoin and ethereum, the largest cryptocurrencies.CEO Brian Armstrong has been a public advocate of the meme-inspired dogecoin. On the company’s May 13 earnings call, Armstrong said that “asset addition is something near and dear” to his heart.He referenced dogecoin as one of the cryptocurrencies that’s getting a lot of attention and shared the company’s plan to list the token in six to eight weeks. More