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    Alibaba shares close higher after Beijing orders Ant Group to revamp business

    In this article9988-HKA logo of Ant Group is pictured at the headquarters of the company, an affiliate of Alibaba, in Hangzhou, Zhejiang province, China October 29, 2020.Aly Song | ReutersGUANGZHOU, China — Alibaba shares in Hong Kong closed 0.43% higher on Tuesday after regulators ordered the e-commerce giant’s financial technology affiliate Ant Group to revamp its business.That, along with a 18.23 billion yuan ($2.78 billion) fine Alibaba received as a result of an anti-monopoly investigation by regulators, removed a source of uncertainty for investors.”Following the decision and penalties levied by SAMR’s (State Administration for Market Regulation) anti-monopoly investigation of BABA, we think the street has more color about the latest updates on Ant Group,” Jefferies said in a note published Monday.Hong Kong-listed shares of Alibaba jumped about 4% at the open but pared those gains throughout the day. Alibaba’s U.S.-listed shares closed over 9% higher on Monday but were about 1.6% lower in pre-market trade.Alibaba, owns a roughly 33% stake in Ant Group, the company that runs the massively popular mobile payments app Alipay in China. In November, regulators forced Ant Group to suspend what would have been a record-setting $34.5 billion initial public offering (IPO) in Hong Kong and Shanghai.At the time, changes in the financial technology regulatory environment were blamed for the suspension of the listing.That came just days after Jack Ma, the founder of Ant Group and Alibaba, made some comments that appeared critical of China’s financial regulator.In December, the People’s Bank of China (PBOC) ordered Ant Group to rectify its business. And on Monday, the Chinese central bank outlined concrete details on what the company needs to do.The PBOC asked Ant Group to restructure into a financial holding company. Ant Group must also create more separation between its payment app Alipay and its credit products. Yu’e Bao, Ant Group’s money market fund, which was once the world’s largest, must also be reduced in size, the PBOC said.Both Alibaba’s massive anti-trust fine and the Ant Group restructuring plan are part of a broader push by China to get a tighter grip on the country’s technology companies, which turned into giants largely unencumbered. Their activities often span across sectors from gaming to financial technology as well as cloud computing.While so far Beijing’s eyes have been focused on Jack Ma’s empire, there are signs that the crackdown could broaden to more companies and other areas such as data protection. More

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    Cramer counts Chipotle, Darden among 'last man standing' restaurant plays

    In this articleCMGDRICNBC’s Jim Cramer on Monday revealed a list of stocks he expects will benefit from the “last man standing scenario.””After a year of carnage, big businesses with deep pockets are triumphing over their smaller competitors who didn’t make it,” the “Mad Money” host said.The scenario will play out vividly in the restaurant industry, Cramer said.Last year, in the throes of the Covid-19 pandemic, more than 110,000 eating and drinking establishments shut down temporarily or permanently. The impact led to 2.5 million jobs being cut in the industry, according to the National Restaurant Association.Coronavirus restrictions in New York City also pushed Cramer to shut the doors on his two restaurants in the Brooklyn borough until coronavirus vaccines become widespread and the U.S. health crisis came under control.”As the owner of a couple restaurants, I can tell you that companies like Darden and Chipotle are now taking share from empty storefronts,” he said.In addition to Chiptole and Darden, which is the parent company of Olive Garden, Cramer pointed to Cheesecake Factory, Yum Brands, Texas Roadhouse and Starbucks as beneficiaries of the current environment.”Now that tens of thousands of small businesses have so sadly and unfortunately gone under, their larger rivals are the last men standing, which means they’re going to make a fortune as the country reopens, because there’s no one left to challenge them.”DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More

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    WHO says Covid pandemic is growing 'exponentially' at more than 4.4 million new cases a week

    Bochnia Hospital paramedics wear protective equipment as they transport a patient suffering of COVID-19 to a local hospital on March 17, 2021 in Bochnia, Poland.Omar Marques | Anadolu Agency | Getty ImagesThe World Health Organization said Monday the trajectory of the coronavirus pandemic is now “growing exponentially,” with more than 4.4 million new Covid-19 cases reported over the last week.Maria Van Kerkhove, the agency’s technical lead for Covid-19, said “we’re in a critical point of the pandemic,” as some countries ease restrictions even as new cases per week are more than eight times higher than a year ago.”This is not the situation we want to be in 16 months into a pandemic where we have proven control measures. It is the time right now where everyone has to take stock and have a reality check of what we need to be doing,” she said during a press briefing. “Vaccines and vaccinations are coming online, but they aren’t here yet in every part of the world.”Covid-19 cases climbed by 9% across the globe last week — the seventh consecutive weekly increase — and deaths jumped 5%, she said, asking governments to support their citizens in implementing pandemic safety measures.CNBC Health & Science Read CNBC’s latest coverage of the Covid pandemic:CDC chief says Michigan should ‘shut things down,’ vaccinating alone won’t stop Covid surgeWHO says Covid pandemic is growing ‘exponentially’ at more than 4.4 million new cases a weekIndia overtakes Brazil to become the second-worst hit country as Covid cases soarU.S. hits daily vaccination record over the weekend as case counts reach summer peaksLast month, WHO officials warned of a steady rise in Covid-19 cases and deaths, urging people to stick with mask mandates and social distancing rules as the world enters a critical phase of the pandemic.The virus is “stronger, it’s faster” with the emergence of new variants that spread more easily and are more deadly than the original wild strain of the virus, Dr. Mike Ryan, the head of the WHO’s health emergencies program, said March 31. “We’re all struggling” with and sick of restrictive lockdowns, he said.India has overtaken Brazil as the second worst-infected country behind the United States after Covid-19 cases continued to surge across India where a double-mutant variant researchers say could be more contagious has emerged and is rapidly spreading.In the U.S., B.1.1.7, the highly contagious coronavirus variant first identified in the United Kingdom is now the most common strain circulating, Centers for Disease Control and Prevention Director Dr. Rochelle Walensky said last week.Hospitals are also seeing a rise in young people being admitted, she said.Walensky said the U.S. needs to accelerate its vaccination efforts, which are averaging about 3.1 million shots per day. “We must continue to vaccinate as many Americans as we can each day,” Walensky said, adding it will cause new cases and deaths to decline.The WHO urged the public and world leaders to continue to practice safety measures, including social distancing, wearing masks, washing hands and avoiding crowded spaces. More

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    American inflation shoots up to 2.6%

    IN THE SPRING of 2020 American consumer prices fell for three consecutive months as the pandemic struck. Rents collapsed; hotel rooms went empty and oil prices turned negative. All sudden spurts of deflation or inflation make headlines twice: first when they happen and then a year later, when they distort comparisons that look back by 12 months. Sure enough on April 13th statisticians announced that consumer prices in March were fully 2.6% higher than a year earlier, up from 1.7% in February. The increase in headline inflation was the biggest since November 2009, when similar “base effects” were in play after the global financial crisis.It would be wrong, however, to dismiss the rise in inflation as a mere mathematical quirk. America’s economy is emerging from the pandemic downturn at great speed as jobs return and vaccinated consumers start spending. In March alone prices rose by 0.6% compared with the previous month, the fastest pace since 2012. Much of that was driven by a big increase in petrol prices but even the “core” consumer-price index (CPI), which strips out food and energy prices, was up by 0.3% (an annualised pace of 4.1%). Services prices in particular have started to rebound: hotel rooms were 4.4% dearer than a month earlier and rent, a big component of the index, has firmed in recent months. Capital Economics, a consultancy, predicts that the combination of base effects and a boomy reopening will drive the headline annual rate of inflation close to 4% by May.The Federal Reserve targets annual inflation of 2%, but on a different measure—the price index for personal consumption expenditures—which tends to run about a third of a percentage point cooler than CPI. Still, if prices rise at a monthly pace consistent with the Fed’s target, as they roughly have in recent months, base effects mean that the target will soon be exceeded in annual terms (see left-hand panel on chart). Any heat in the economy will lead to further overshooting.The path of inflation matters more than usual because of the amount of economic uncertainty in the air. The relaxation of social-distancing restrictions, President Joe Biden’s enormous $1.9trn economic stimulus and the unusual doveishness of the Fed, which is employing a new monetary-policy framework, together comprise an inflation experiment. It has turned some doves into hawks, with economists such as Larry Summers, a former treasury secretary, and Olivier Blanchard, a former chief economist of the IMF, warning that an overheat is on its way. And, as the administration follows up its stimulus with an infrastructure bill, how the experiment pans out will help determine how much more deficit spending the economy can take.The Fed and the White House both expect any pickup in inflation this year to be temporary. Financial markets are less sure. They are pricing in both a growing risk of a prolonged period of inflation above the Fed’s target and increases in interest rates in 2022—whereas at the Fed’s most recent meeting in March the median monetary-policymaker did not forecast lift-off until after 2023. The central-banking view stems chiefly from the state of the labour market, which remains about 8.4m jobs short of the level of employment in February 2020 and even further behind where it would have been had the pre-pandemic trend continued. That amount of economic slack should keep inflation subdued.Yet investors could be forgiven for asking questions of the economists’ models. These have consistently underestimated the pace of America’s jobs rebound. In the second quarter of 2020 the median respondent to the Philadelphia Federal Reserve Bank’s survey of professional forecasters thought unemployment two quarters later would average 11%; in fact it turned out to be only 6.8%. That was the biggest overestimate in the history of the survey and more than three times the next highest such error. In February this year forecasters expected unemployment in the second quarter to average 6.1%, only for it to fall below that rate in March. If the labour market continues to outperform expectations the economy will eat up slack and push up inflation sooner.At that point the Fed will face a choice. Its new policy framework seeks to overshoot its 2% target temporarily after recessions, in order to make up lost ground. But it has been vague about what this “average-inflation targeting” means in practice. Some recent speeches by officials have suggested that the central bank needs to compensate for lost inflation since last spring. Others have implied that August is the starting point for catch-up policy, as that is when the framework changed. But there has been no inflation shortfall since August (see right-hand panel on chart). If the springtime bump in inflation does not melt away, the central bank will be forced to decide precisely what it wants. More

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    America’s inflation spike begins

    IN THE SPRING of 2020 American consumer prices fell for three consecutive months as the pandemic struck. Rents collapsed, hotel rooms went empty and oil prices turned negative. All sudden spurts of deflation or inflation make the news twice: first when they happen and then a year later, when they distort comparisons that look back 12 months. Sure enough on April 13th statisticians announced that consumer prices in March were fully 2.6% higher than a year earlier, up from 1.7% in February. The increase in headline inflation was the biggest since November 2009, when similar “base effects” were in play after the global financial crisis.It would be wrong, however, to dismiss the rise in inflation as a mere mathematical quirk. America’s economy is emerging from the downturn at great speed as jobs return and vaccinated consumers start spending. In March alone prices rose by 0.6% compared with the previous month, the fastest pace since 2012. Much of that was driven by a big increase in petrol prices but even the “core” consumer-price index (CPI), which strips out food and energy prices, was up by 0.3% (an annualised pace of 4.1%). Services prices in particular have started to rebound: hotel rooms were 4.4% dearer than a month earlier and rent, a big component of the index, has firmed in recent months. Capital Economics, a consultancy, predicts that the combination ofbase effects and a boomy reopening will drive the headline annual rate of inflation close to 4% by May.The Federal Reserve targets annual inflation of 2%, but on a different measure—the price index for personal consumption expenditures—which tends to run about a third of a percentage point cooler than CPI. Still, if prices rise at a monthly pace consistent with the Fed’s target, as they roughly have in recent months, base effects mean that the target will soon be exceeded in annual terms (see chart). Any heat in the economy will lead to further overshooting.The path of inflation matters more than usual because of the amount of economic uncertainty in the air. The relaxation of social-distancing restrictions, President Joe Biden’s enormous $1.9trn economic stimulus and the unusual doveishness of the Fed, which is employing a new monetary-policy framework, together comprise an inflation experiment. It has turned some doves into hawks, with economists such as Larry Summers, a former treasury secretary, and Olivier Blanchard, a former chief economist of the IMF, warning of the risk of overheating. And, as the administration follows up its stimulus with an infrastructure bill, how the experiment pans out will help determine how much more deficit spending the economy can take.The Fed and the White House both expect any pickup in inflation this year to be temporary. Financial markets are less sure. They are pricing in both a growing risk of a prolonged period of inflation above the Fed’s target and the possibility of higher interest rates in 2022—whereas at the Fed’s most recent meeting in March the median monetary-policymaker did not forecast lift-off until after 2023. The central-banking view stems chiefly from the state of the labour market, which is about 8.4m jobs short of the level of employment in February 2020 and even further behind where it would have been had the pre-pandemic trend continued. That amount of economic slack should keep inflation subdued.Yet investors could be forgiven for asking questions of the economists’ models. These have consistently underestimated the pace of America’s jobs rebound. In the second quarter of 2020 the median respondent to the Philadelphia Federal Reserve Bank’s survey of professional forecasters thought unemployment two quarters later would average 11%; in fact it turned out to be only 6.8%. That was the biggest overestimate in the history of the survey and more than three times the next highest such error. In February this year forecasters expected unemployment in the second quarter to average 6.1%, only for it to fall below that rate in March. If the labour market continues to outperform expectations the economy will eat up slack and push up inflation sooner.At that point the Fed will face a choice. Its new policy framework seeks to overshoot its 2% target temporarily after recessions, in order to make up lost ground. But it has been vague about what this “average-inflation targeting” means in practice. Some recent speeches by officials have suggested that the central bank needs to compensate for lost inflation since last spring. Others have implied that August is the starting point for catch-up policy, as that is when the framework changed. But there has been no inflation shortfall since August (see bottom panel on chart). If the springtime bump in inflation does not melt away, the central bank will be forced to decide precisely what it wants.■This article appeared in the Finance & economics section of the print edition under the headline “Base jumping” More

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    Progressive group targets FedEx, Nike in campaign calling for higher corporate taxes

    In this articleFDXNKEA FedEx employee loads up deliveries in San Francisco.Getty ImagesA progressive group pushing Congress to raise the corporate tax rate is launching an ad campaign targeting FedEx and Nike, two large American companies with light federal tax bills, the group said Monday.Tax March, which held dozens of demonstrations in 2017 calling on former President Donald Trump to release his tax returns, plans to release ads targeting FedEx on Tuesday. The TV ads will air in Washington, D.C., and in Memphis, Tennessee, where FedEx is headquartered.A report by the Institute on Taxation and Economic Policy says FedEx “zeroed out its federal income tax on $1.2 billion of U.S. pretax income in 2020 and received a rebate of $230 million.” The report says the lack of payments in taxes by some corporations is likely linked to historic tax breaks as well as Trump’s 2017 tax reform plan and certain elements of the coronavirus relief bill known as the CARES Act.Tax March also plans to target Nike with a newspaper ad next week in the shoe giant’s home state of Oregon, according to Dana Bye, the campaign director for the group. She said the newspaper ad will have a message similar to that of the TV spot focusing on FedEx.The institute’s report said Nike “didn’t pay a dime of federal income tax on almost $2.9 billion of U.S. pretax income last year, instead enjoying a $109 million tax rebate.”CNBC PoliticsRead more of CNBC’s politics coverage:Secretary of State warns Moscow of consequences as Russian troops amass near UkraineBiden has options beyond a corporate tax hike to pay for infrastructure, as negotiations get underwayHouse Ethics Committee launches investigation into Rep. Matt Gaetz”FedEx pays all U.S. federal, state, and local taxes, totaling over $20 billion between 2016 and 2020. During that time Congress adopted new tax laws to help companies like FedEx make additional investments in its people, providing pay increases and funding pensions, and in local economies, adding new jobs and improving infrastructure. These changes were laws, not loopholes,” company spokeswoman Isabel Rollison said in a statement after this story was published.After issuing her initial statement, Rollison later clarified to CNBC saying “FedEx pays all U.S. federal, state, and local taxes, totaling over $9 billion between 2016 and 2020.””FedEx has collected and remitted over $20 billion in taxes in the U.S. (federal, state and local individual income, payroll, customs duties and state & local sales tax) during the last five fiscal years 2016-2020,”she added. A representatives for Nike didn’t respond to CNBC’s request for comment.President Joe Biden has said he wants to raise the corporate tax rate to 28% to help pay for his $2 trillion infrastructure reform package. He has since said that he’s willing to negotiate on the potential corporate tax hike as moderate Democrats such as Sen. Joe Manchin, D-W.Va., have pushed back on raising the rate to 28%.Bye said the campaign as a whole will cost almost $500,000. It will also include digital ads on Facebook and other platforms.The TV ad, first reviewed by CNBC, takes aim at FedEx as one of several companies that paid little to no federal corporate income taxes recently.”Tell Congress: It’s time to put the people first,” a voiceover on the FedEx ad says. “Make corporations like FedEx pay their fair share.”FedEx recently told CNBC that it is against raising corporate taxes as way to pay for Biden’s infrastructure plan. Advocacy groups such as the Chamber of Commerce and the Business Roundtable have also opposed the idea of raising the corporate tax rate as a way to pay for infrastructure.”I think the biggest statement we are trying to make through this campaign is that we can’t let corporate tax dodgers like FedEx drive the debate on taxes,” Bye said.Tax March is a project of the Sixteen Thirty Fund, a dark money 501(c)(4) organization that contributed just over $60 million to Democratic-aligned groups during the 2020 election, including millions to super PACs backing Biden, according to data from the nonpartisan Center for Responsive Politics.The campaign by Tax March is one of the first to take on corporations since Biden became president. It comes as corporations are under pressure to respond to new voting laws such as those recently passed in Georgia. More

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    Cramer sees upside in Boeing after stock pulled back on new 737 Max issue

    In this articleBAFBCNBC’s Jim Cramer advised buying the dip in Boeing after shares traded lower for two straight sessions.”Even with some short-term turbulence, Boeing’s perfectly positioned as the great reopening goes into full swing,” the “Mad Money” host said Monday.Dozens of 737 Max jets, manufactured by Boeing, were temporarily grounded Friday to address an electrical power system issue in the aircraft. Boeing shares have declined 2% since the announcement, closing below $250 a share Monday.Cramer, however, said the circumstances do not warrant dumping the stock as Boeing is at an inflection moment.”Boeing’s got too much going for its shareholders to get spooked by a bad headline,” he said. “I regard that today’s decline on some negative sell-side research about corporate governance as a non-issue, too.”Boeing’s 737 Max returned to service late last year after it was grounded globally in the wake of two fatal crashes that killed hundreds of people.Air travel demand is rising as consumers become less worried about contracting coronavirus. Meanwhile, airlines are ordering more planes, which can be financed at low-interest rates, Cramer said. Southwest Airlines, for example, announced last month it was buying 100 units of the smallest Max model.”This small issue aside, the 737 Max really is back. See, this used to be Boeing’s most popular plane and it got recertified right as the airlines were getting ready to start placing orders again in anticipation of the great reopening,” he said. “That’s why we own this one for the charitable trust and so far our thesis is playing out as expected.”Despite selling off over the past four weeks, Boeing shares are up more than 16% this year. The stock is outperforming the S&P 500, which is up 10% year to date.Disclosure: Cramer’s charitable trust owns shares of Boeing.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More

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    Jim Cramer says Nvidia shares will 'end up looking cheap' next year as stock nears record high

    In this articleNVDACNBC’s Jim Cramer said Monday it’s a mistake for investors to write Nvidia stock off as overvalued.The U.S. chipmaker earlier unveiled new product launches and revealed it expects to beat profit estimates in the company’s current fiscal quarter.”Nvidia’s stock looks expensive because the company almost always beats the earnings estimates and beats them handily,” the “Mad Money” host said. “That means those projections are borderline irrelevant, people. The stock ultimately turns out to be cheap in retrospect”The comments come after shares of Nvidia, which is valued at $377 billion, climbed more than 5%, closing at $608.36. Year to date, shares are up 16.5%.”Nobody in the world has a vision like [CEO] Jensen Huang, so Nvidia the stock lives on even though it pole-vaulted $32 today,” Cramer said. “I think it will end up looking cheap a year from now based on what the company’s actually going to earn, which will most likely be a lot more than predicted.”Amid a global supply shortage for semiconductors, Nvidia said it now figures total revenue for the first quarter will top the $5.3 billion it initially forecast.Nvidia produces chips for a range of applications in various industries, including graphics, gaming and vehicle components.Some of Nvidia’s new offerings include a server chip called Grace and components used for artificial intelligence, chatbots, speech recognition and self-driving cars.Disclosure: Cramer’s charitable trust owns shares of Nvidia.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More