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    in Finance

    KKR says China’s real estate correction may only be halfway done

    China’s real estate troubles are likely far from over and industry problems need to be addressed quickly for GDP growth to rise significantly, according to KKR.
    Based on comparisons to housing corrections in the U.S., Japan and Spain, China’s “housing market correction may be just halfway complete” in terms of its depth, the report said.
    China’s GDP can grow by 4.7% this year thanks to growth in new industries, while real estate and Covid-related factors account for a drag of 1.4 percentage points, the report said.

    High-rise buildings are illuminated at night in the West Coast New Area of Qingdao, East China’s Shandong province, on March 22, 2024. 
    Nurphoto | Nurphoto | Getty Images

    BEIJING — China’s real estate troubles are likely far from over and industry problems need to be addressed quickly if overall GDP growth is to pick up significantly, according to a report released Thursday by global investment firm KKR.
    That’s one of the two key takeaways from a recent trip to China by the firm’s head of global and macro asset allocation, Henry H. McVey. It was his fourth visit in just over a year.

    “A fundamentally overbuilt real estate industry needs to be addressed — and quickly,” he said in the report, which counts Changchun Hua, KKR’s chief economist for Greater China, among the co-authors.
    “Second, confidence must be restored to drive savings back down,” McVey said, noting that would spur consumers and businesses to spend on upgrading to higher quality products, as Chinese authorities have promoted.
    Real estate and related sectors once accounted for about one fifth or more of China’s economy, depending on the breadth of analysts’ calculations. The property industry has slumped in the last few years after Beijing’s crackdown on developers’ high reliance on debt for growth.
    Based on comparisons to housing corrections in the U.S., Japan and Spain, China’s “housing market correction may be just halfway complete” in terms of its depth, the KKR report said.
    “Both price and volume must come under pressure to finish the cleansing cycle,” the report said. “To date, though, it has largely been a contraction in volume.”

    While KKR’s report didn’t provide much detail on expectations for specific real estate policy, the authors said more action by Beijing to improve China’s real estate sector “could materially shift investor perception.”
    Amid geopolitical tensions, the country’s property market slump and drop in stocks have given many foreign institutional investors pause about China investing.
    “According to some of our proprietary survey work, many allocators have considered reducing China exposure to 5-6%, down from 10-12% today at a time that we think fundamentals in the economy are likely bottoming,” the KKR report said.
    Much of official Chinese data to start the year beat analysts’ expectations.
    Chinese officials have said the real estate sector remains in a period of adjustment, while Beijing shifts its emphasis toward manufacturing and what it considers “high-quality development.”
    Authorities have also released policies to promote financial support for select property developers, while many local governments — though not necessarily the largest cities — have significantly relaxed home purchase restrictions.

    Real estate’s drag to moderate

    KKR expects a modest slowdown in China’s GDP growth to 4.7% this year, and 4.5% next year, with real estate and Covid-related factors halving their drag on the economy from 1.4 percentage points in 2024 to a 0.7 percentage point drag in 2025.
    “Our bottom line is that: with the ongoing [property] correction as well as some potential further policy support, we think the drag to [the] overall economy should moderate a bit over the next few years,” McVey said in a separate statement. He is also chief investment officer of KKR Balance Sheet.

    Catering, accommodation and wholesale are set to modestly increase their contribution to growth in the next two years, while digitalization and the shift toward more carbon-neutral, green industry are expected to remain the largest drivers of growth, according to the report.
    For investors, the report said a more important development than China’s GDP increase would be whether authorities could make it easier for businesses and households to tap capital markets.
    “Repairing soft spots in [the] economy, especially around housing, will ultimately improve the cost of capital, and will also allow new consumer companies to access the capital markets likely at better prices if real estate and confidence are doing better,” McVey said in the statement.
    Beijing in March announced a GDP target of around 5% for this year. Minister of Housing and Urban-Rural Development Ni Hong said last month that developers should go bankrupt if necessary and that authorities would promote the development of affordable housing.
    Recent data have pointed to some stabilization in the property sector slowdown. The seven-day-moving average of new home sales in 21 major cities fell by 34.5% year-on-year as of Monday, better than the 45.3% drop recorded a week earlier, according to Nomura, citing Wind Information.
    Compared with the same period in 2019, that sales average was only down by 27.8% as of Monday, versus a 47% drop a week earlier, Nomura said, noting most of the improvement was in China’s biggest cities.

    Consumer outlook

    KKR said most of its local portfolio is in consumer and services companies, whose business reflect how Chinese people in the middle to higher income range are spending modestly to upgrade their lifestyles.
    “Top line growth is solid, margins are holding, and consumers are spending on less conspicuous items such as ‘smart homes,’ pets, and recreational activities,” the report said. “Domestic travel is also strong.”
    Retail sales rose by a better-than-expected 5.5% year-on-year in January and February, boosted by significant growth in Lunar New Year holiday spending.
    Longer term, KKR still expects that China can follow historical precedent in changing policy to be “more investor friendly.”
    “While our message is not an all-clear signal to lean in,” the report said, “it is a reminder – using history as our guide – that, if China does adjust its domestic policies to be more investor friendly (especially as it relates to supply side reforms), this market could rebound significantly from current levels.” More

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    in Business

    Nearly half of Levi’s sales are happening online and in its shops, a shift as department stores fade

    Levi Strauss’s direct-to-consumer business is booming and now accounts for nearly 50% of all revenue.
    The shift comes as department stores face an uncertain future in the U.S. and Levi’s looks to grow its stores and website.
    The retailer beat Wall Street’s earnings and revenue estimates and raised its full-year profit guidance.

    Levi’s clothing is displayed at a Kohl’s store on April 06, 2023 in San Rafael, California. 
    Justin Sullivan | Getty Images

    Levi Strauss, which has long relied on wholesalers like Macy’s and Kohl’s to drive its business, is now doing nearly half of its sales through its own website and stores, the company said Wednesday when reporting fiscal first-quarter earnings. 
    In the three months ended Feb. 25, direct-to-consumer sales made up a record 48% of overall sales at Levi’s, up from 42% in the year-ago period and 25% higher on a two-year basis, the retailer said. 

    The shift is a boon for Levi’s profits. But it raises questions about the company’s relationships with its wholesale partners and whether it will hurt those retailers as they grapple with their own existential challenges.
    Levi’s also beat Wall Street’s earnings and revenue estimates and raised its full-year guidance. Shares rose as much as 10% in extended trading.
    Here’s how the blue jeans maker did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

    Earnings per share: 26 cents adjusted vs. 21 cents expected
    Revenue: $1.56 billion vs. $1.55 billion expected

    The company swung to a net loss of $10.6 million, or 3 cents per share, during the quarter, compared with a net income of $114.7 million, or 29 cents per share, in the year-ago period. Excluding one-time costs related to Levi’s restructuring, the company reported earnings per share of 26 cents, ahead of Wall Street’s estimates. 
    Sales fell to $1.56 billion, down about 8% from $1.69 billion a year earlier. The sales slump was primarily attributed to a shift in Levi’s wholesale orders, which boosted profits by about $100 million in the year-ago period. 

    Levi’s still expects full-year sales to rise between 1% and 3% as it contends with a slowdown in discretionary spending and an uncertain economy. But it anticipates profits will be higher than it previously thought. The retailer now expects adjusted earnings per share to be between $1.17 and $1.27, up from a previous range of $1.15 to $1.25. 
    Analysts had expected sales to grow 2.4% on a full-year basis and earnings per share of $1.21, according to LSEG. 
    For the last couple of years, Levi’s has been moving away from wholesalers and doing more of its sales through its own stores and website. Selling directly to consumers boosts Levi’s profit and gives it better data on its customers and their shopping patterns. 
    Perhaps more important, shifting away from wholesalers also gives Levi’s greater control over its own destiny and reduces its exposure to department stores, which are continuing to shrink and face an uncertain future in the U.S. 
    In late February, Macy’s – a key wholesale partner for Levi’s — announced it would close 150 stores as activist investors from Arkhouse Management looked to buy the department store and take it private. The firm primarily invests in real estate and is seen to be more interested in monetizing Macy’s sprawling store footprint than running a retail business. 
    In an interview with CNBC, CEO Michelle Gass, who took the helm of Levi’s about two months ago, said wholesale continues to be an important part of the company’s strategy. If Macy’s store closures or other challenges to department stores affects Levi’s business, she expects direct-to-consumer sales will offset those losses. 
    “We work very closely with our key customers because we’re important to them, they’re important to us, and strategically, wholesale is critical for us to amplify reach to the consumer,” said Gass. “While there are pressures, these wholesale customers serve millions of consumers and so there’s still a lot of opportunity to drive market share within that channel.” 
    Levi’s previously said it’s working to get direct-to-consumer sales to account for 55% of all sales, but if that number can get higher, the company is “all for it,” said finance chief Harmit Singh. 
    In the meantime, Gass said Levi’s is working “closely” with its key wholesale customers to ensure the brand is showing up in the “absolute best way.” 
    During the quarter, global wholesale revenues were down 9% compared to the prior year when adjusted for the shift in wholesale orders that happened in the year-ago period. 
    That weakness was driven by Europe, which Gass said saw a “tough” quarter. 
    “As we look forward, we are feeling optimistic. Our pre-books for the second half in Europe wholesale are positive based on the innovation and fashion that we’re bringing,” said Gass. 
    Levi’s has also been in the process of transforming itself into a retailer that does a lot more than just sell jeans. It’s working to offer more skirts, dresses and tops, and wants to be viewed as a denim lifestyle business, not just a blue jeans company. 
    As part of those efforts, the company said it’s imperative to remain at the “center of culture.” On Friday, it got a helpful boost when  Beyoncé named a song after the brand on her new album “Cowboy Carter” titled “Levii’s Jeans.”
    The song, a collaboration with Post Malone, celebrates Levi’s with lyrics like “Love it when you tease me in them jeans” and “you don’t need designer.”
    On a call with analysts, Gass was asked about the song and if it has contributed to a spike in sales. While she stopped short of saying its had any impact on revenue, she did call the homage an “honor.”
    “Denim is having a moment and the Levi’s brand is having a powerful moment around the world,” said Gass. “We place a lot of emphasis and investment is making sure that Levi’s brand remains in the center of culture and I don’t think there’s any better evidence or proof point than having someone like  Beyoncé, who is a culture shaper, to actually name a song after us so we’re super proud of that.”
    During the quarter, sales of items like denim skirts, dresses and tops were up 19% in Levi’s direct-to-consumer channel, said Gass. The products also performed well in wholesale, she said. 
    Levi’s efforts come at a time when consumer spending for discretionary products like clothes and accessories has been under pressure as shoppers look to use their extra dollars on things like eating out and traveling or paying down debt. 
    In late January, Levi’s said it would cut 10% to 15% of its global corporate workforce, which is expected to save the company about $100 million during the fiscal year.

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  • 175 Shares169 Views

    in Finance

    Fed’s Powell emphasizes need for more evidence that inflation is easing before cutting rates

    Federal Reserve Bank Chair Jerome Powell speaks during the Stanford Business, Government and Society Forum at Stanford University on April 03, 2024 in Stanford, California. 
    Justin Sullivan | Getty Images

    Federal Reserve Chairman Jerome Powell said Wednesday it will take a while for policymakers to evaluate the current state of inflation, keeping the timing of potential interest rate cuts uncertain.
    Speaking specifically about stronger-than-expected price pressures to start the year, the central bank leader said he and his fellow officials are in no rush to ease monetary policy.

    “On inflation, it is too soon to say whether the recent readings represent more than just a bump,” Powell said in remarks ahead of a question-and-answer session at Stanford University.
    “We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent,” he added. “Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy.”
    The remarks come two weeks after the rate-setting Federal Open Market Committee again voted to hold benchmark short-term borrowing rates steady. In addition, the committee’s post-meeting statement on March 20 included the “greater confidence” qualifier needed before cutting.

    ‘Bumpy path’

    Markets widely expect the FOMC to start easing policy this year, though they have had to recalibrate their outlook for the timing and extent of cuts as inflation has held stubbornly higher. Other economic variables, particularly in the labor market and consumer spending, have held up as well, giving the Fed time to assess the current state of affairs before moving.
    The Fed’s preferred inflation measure, the personal consumption expenditures price index, showed a 12-month rate of 2.5% for February, or 2.8% for the pivotal core measure that excludes food and energy. Virtually all other inflation gauges show rates in excess of 3%.

    “Recent readings on both job gains and inflation have come in higher than expected,” Powell said. “The recent data do not, however, materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path.”
    Other Fed officials speaking this week have made remarks consistent with the Fed’s patient approach.
    Atlanta Fed President Raphael Bostic told CNBC on Wednesday that he thinks just one cut might be in the offing as prices of some important items have turned higher. San Francisco Fed President Mary Daly said three cuts is a “reasonable baseline” but noted there are no guarantees, while Cleveland’s Loretta Mester also said cuts are likely later this year while adding that rates over the longer term may be higher than anticipated. All three are FOMC voters.
    Powell reiterated that decisions are being made “meeting by meeting” and noted only that cuts are “likely to be appropriate … at some point this year.”
    The uncertainty about rates has caused some consternation in markets, with stocks falling sharply earlier this week as Treasury yields moved higher. The market stabilized Wednesday, but traders in the fed funds futures market again repriced their rate expectations, casting some doubt on a June cut as the market-implied probability moved to about 54% at one point, according to CME Group data.

    Election ahead

    Along with his comments on rates, Powell spent some time discussing Fed independence.
    With the presidential election campaign heating up, Powell noted the importance of steering clear of political issues.
    “Our analysis is free from any personal or political bias, in service to the public,” he said. “We will not always get it right — no one does. But our decisions will always reflect our painstaking assessment of what is best for our economy in the medium and longer term — and nothing else.”
    He also talked about “mission creep,” specifically as it relates to some demand for the Fed to get involved in climate change issues and the preparations financial institutions take for related events.
    “We are not, nor do we seek to be, climate policymakers,” he said.
    Correction: Powell’s remarks come two weeks after the Federal Open Market Committee again voted to hold rates steady. An earlier version misstated the timing. Raphael Bostic is president of the Atlanta Fed. An earlier version misstated the city.

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    in Business

    Disney wins proxy fight against activist investor Nelson Peltz, as shareholders reelect full board

    Disney prevailed in the proxy fight against Nelson Peltz’s Trian Partners.
    Peltz failed to win a seat as shareholders voted to reelect the company’s full board
    It’s a defeat for Peltz and a stamp of approval for efforts by Disney’s board and CEO Bob Iger to turn around the company.

    (L to R) Chief executive officer and chairman of The Walt Disney Company Bob Iger and Mickey Mouse look on before ringing the opening bell at the New York Stock Exchange (NYSE), November 27, 2017 in New York City. 
    Drew Angerer | Getty Images

    Disney shareholders on Wednesday reelected the media conglomerate’s full board, preliminary results show, handing a stinging defeat to activist Nelson Peltz and former Marvel CEO Ike Perlmutter, both of whom agitated for change at one of America’s most storied companies.
    The widely expected victory caps a combative monthslong process and affirms the board’s decisions, from the move to bring back CEO Bob Iger to his efforts to reinvigorate the $223 billion media company. Peltz-led Trian Partners wanted to oust two directors, Maria Elena Lagomasino and Michael Froman, citing sustained share underperformance, a failed succession process, and billions in misdirected investments.

    Peltz lost to Lagomasino by a 2-to-1 margin, a person familiar with the matter said. Retail voters overwhelmingly supported Disney, that person added, helping to deliver Iger 94% of the overall vote. Former Disney Chief Financial Officer Jay Rasulo, whom Trian also nominated, lost to Lagomasino by an even larger 5-1 margin. The person characterized it as Peltz’s largest loss ever.
    Percentage-wise, turnout for the director vote was in the mid-60s, another person familiar with the matter said. In 2023, around 63% of Disney shareholders voted.
    A second activist, Blackwells, also failed to win board seats in its own long shot bid.
    “I want to thank our shareholders for their trust and confidence in our Board and management. With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said in a release.
    Disney deployed significant resources in the proxy fight. The company called in support from its founding family, Star Wars creator George Lucas, JP Morgan CEO Jamie Dimon and Laurene Powell Jobs, the widow of Pixar and Apple CEO Steve Jobs.

    While Peltz will not end up on the Disney board, he and his firm have claimed some credit for the rebound in the company’s shares.
    “While we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders. We are proud of the impact we have had in refocusing this Company on value creation and good governance,” Trian said in a statement.
    The company also spent an estimated $40 million fighting off Peltz. The full-court press worked. Disney’s two largest shareholders, Vanguard and BlackRock, decided to back management in the final days before Wednesday’s meeting.

    Ultimately, the activists failed to convince enough retail or institutional shareholders that he had a meaningful plan to fix the House of Mouse. While Peltz’s candidacy picked up meaningful support from proxy advisors and smaller institutional investors, shareholders were less compelled by Rasulo.
    Though its choices did not win board seats, Blackwells cheered the fact that Peltz was not elected.
    “Blackwells’ primary objective was achieved — keeping Nelson Peltz out of the Disney Boardroom,” Blackwells said in a statement. “The company would have benefited from any one of our candidates for the hard work needed over the next few years to advance this iconic company, but we respect the will of the shareholders and the outcome.”

    Jay Rasulo and Nelson Peltz.
    Patrick T. Fallon | Bloomberg | Getty Images | Adam Jeffery | CNBC

    Peltz, who dislikes being called an activist but has orchestrated successful campaigns at iconic companies like PepsiCo, P&G and Wendy’s, controls a $3.98 billion stake in Disney, or about 2% of total shares outstanding. Most of those shares are owned by Perlmutter.
    With Disney shares up nearly 50% since Peltz’s campaign first began, Trian and Perlmutter gained a lot despite their board defeat. Peltz is partially on the hook for an estimated $25 million spent on the fight, a small amount compared to the paper gains in the stake he controls.

    As it moves past the battle with Peltz, Disney still faces unprecedented challenges. ESPN has shed subscribers for years, raising questions about whether it is prepared to go toe-to-toe with streaming upstarts. Disney’s streaming business has spent billions to win subscribers and is losing money as it tries to catch market leader Netflix.
    Perhaps most significantly, the company is searching for a successor to Iger for the second time in five years. Disney’s botched succession, where Iger’s hand-picked replacement Bob Chapek was ousted just two years into his tenure, was a key point Trian used against the company.
    “Thank you for your trust and confidence in the Disney project management, and the ambitious strategy we’re implementing across our businesses to build for the future,” Iger said after the preliminary vote was reported. “Now that this distracting proxy contest is behind us, we’re here to focus 100% of our attention on our most important priorities, growth and value creation for our shareholders and creative excellence for our consumers. Thank you again for your support and for your continued investment in this.”

    Nelson Peltz, founding partner and CEO of Trian Fund Management, speaks with CNBC’s Andrew Ross Sorkin on July 17, 2013 in New York.
    Heidi Gutman | CNBC, NBCU Photo Bank, NBCUniversal via Getty Images

    There is evidence that major proxy advisors agreed with Peltz’s argument that the board was ill-equipped to take on a second search process.
    Shareholder advisory firms Glass Lewis and ISS both noted the succession issues in their recommendations to investors. Glass Lewis sided with Disney and asserted Iger’s return, paired with this year’s nominations of Morgan Stanley executive chairman James Gorman and former Sky CEO Jeremy Darroch to the board, have given the company “adequate opportunity to launch a more credible succession program and develop, communicate and execute on several key initiatives which appear to reasonably target acknowledged operational and financial weaknesses at Disney.”
    Investors rallied around Disney in February after the company made a series of major announcements durings its earnings call, including that it had obtained the exclusive streaming rights to Taylor Swift’s Eras Tour concert film, a $1.5 billion strategic investment in Epic Games as well as a flagship ESPN streaming service.
    Peltz called the slew of announcements a “spaghetti-against-the-wall” plan that was meant to “distract shareholders.”
    Shares of Disney have jumped 23% since Disney’s fiscal first-quarter earnings report in early February.
    Disclosure: Sky News is owned by Comcast, CNBC’s parent company.

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    in Business

    Ulta shares fall as CEO warns beauty demand is slowing

    Shares of Ulta fell on Wednesday, as the retailer warned of cooling demand in the beauty category.
    CEO Dave Kimbell said Ulta expected demand to moderate, but the slowdown has been “a bit earlier and bit bigger than we thought.”
    Many retailers, including Macy’s and Kohl’s, have been trying to drive sales growth by expanding their focus on beauty.

    People walk past an Ulta Beauty store in the Manhattan borough of New York City, New York, U.S., March 8, 2022. 
    Carlo Allegri | Reuters

    Ulta Beauty shares tumbled about 13% on Wednesday as CEO Dave Kimbell warned of cooling demand for beauty products.
    Other stocks in the segment, including E.L.F. Beauty, Estee Lauder and Coty, also fell on Wednesday morning.

    “We have seen a slowdown in the total category,” Kimbell said at an investor conference hosted by JPMorgan Chase. “We came into the year — and we talked about this on our [earnings] call a few weeks ago — expecting the category to moderate. It has [had], as I said, several years of strong growth. We did not anticipate it would continue at the rate that it’s been growing.”
    He said Ulta expected sales to grow in the mid single-digits for the year.
    But Kimbell added that slowdown has been “a bit earlier and bit bigger than we thought.” He said that trend has cut across price points and different beauty categories, but has been more significant in prestige makeup and haircare.
    Beauty has stood out as one of the hottest categories in retail. Even as U.S. consumers watch their spending on discretionary items like clothing, they have continued to spring for makeup, skincare items and other beauty products. The strength of the category has inspired many retailers to make bigger bets on beauty.
    Target has opened a growing number of Ulta Beauty shops in its stores. Kohl’s plans to open Sephora shops in all of its locations. Macy’s is expanding its beauty chain Bluemercury.

    In his remarks on Wednesday, however, Kimbell said beauty shoppers aren’t immune to feeling economic pressures, even in a category that’s been red hot. He referred to dynamics that may cause them to pull back on spending, including rising credit card debt, geopolitical conflicts and the upcoming presidential election.
    “It just creates this soup of activity for our consumers that they’re trying to navigate through,” he said.
    Ulta said last month on an earnings call that it expected net sales to range from $11.7 billion to $11.8 billion for its 2024 fiscal year. That would be higher than the $11.2 billion of sales that it reported for the most recent fiscal year.
    The retailer said it anticipates comparable sales, a metric that takes out the impact of opening and closing stores, to increase by 4% to 5% this fiscal year. That would be a slowdown from growth of 5.7% in the previous fiscal year and 15.6% in fiscal 2022.
    Ulta’s stock was trading around $447 midday on Wednesday. Its shares hit a 52-week high of $574.76 in mid-March, just ahead of its release of holiday-quarter results. So far this year, Ulta shares are down nearly 8%, trailing the nearly 10% gains of the S&P 500. More

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    in Finance

    Half of adults globally are stressed about their finances, and inflation is a key reason

    YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

    At least half of adults in a range of major economies said they were stressed about their personal finances, the International Your Money Financial Security Survey conducted by SurveyMonkey found.
    Half of adults in Australia, Germany and the U.K. said they were worse off than they were five years ago.
    Of adults who considered themselves middle class, between 45% and 62% said they were “living paycheck to paycheck.”

    Roughly half of adults are stressed about personal finance, a new survey spanning various advanced economies found.
    D3sign | Moment | Getty Images

    At least half of adults in a range of major economies report being stressed about their personal finances, and say inflation is one of the main reasons.
    A significant number also say they feel worse-off financially than their parents, and are pessimistic about their children’s financial futures, the International Your Money Financial Security Survey conducted by SurveyMonkey found.

    In the U.S., Australia, Spain and Mexico, around 70% of adults said they were “very or somewhat stressed” about money. The percentage reduced slightly to 63% in the U.K., 57% in Germany, 55% in Switzerland, and roughly half of people in Singapore and France.

    As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

    Across those countries, between a half and two thirds of people said they considered themselves to be part of the middle class — except in the U.K., where it was a lower 37%.
    Yet despite the middle classes traditionally being considered financially comfortable, between 45% and 62% of those who put themselves in that group described themselves as “living paycheck to paycheck.”

    Half of adults in Australia, Germany and the U.K. said they were worse off than they were five years ago.
    Meanwhile, of the countries surveyed, only adults in Singapore and Mexico were more likely than not to say they were better-off financially than their parents.

    Inflation was widely cited as the source of financial stress, along with a lack of savings, economic instability and rising interest rates.
    The study of 4,342 adults was carried out in March and released on Wednesday,
    “The health of the global economy, though muted in some areas, is not being reflected in the perceptions of the average person … Despite the performance of the economy writ large, roughly half of adults are stressed about their personal finances in every country studied around the world,” said Eric Johnson, CEO of SurveyMonkey, in an accompanying article.
    Global economic growth is slowing yet most developed economies have avoided the recessions that were forecast amid high inflation and interest rate hikes. Labor markets have proved resilient, but numerous surveys have suggested grim sentiment among consumers who have been hit hard by price rises in household bills and everyday goods. More

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    in Business

    Disney’s largest shareholder Vanguard reportedly backing management over Peltz in board fight

    Vanguard has voted for incumbent Disney directors over Nelson Peltz’s Trian Partners nominees ahead of Wednesday’s shareholder meeting, Bloomberg News reported, citing people familiar with the matter.
    The index fund manager is Disney’s largest shareholder and a key vote for both sides.
    Vanguard and BlackRock, the company’s two largest shareholders, have now both reportedly backed Disney’s current board and CEO Bob Iger.

    Bob Iger, CEO of The Walt Disney Company, speaks during the grand opening ceremony of Shanghai Disney Resort’s Zootopia-themed attraction at Shanghai Disney Resort on December 19, 2023 in Shanghai, China.
    Visual China Group | Getty Images

    Disney’s largest shareholder, index fund manager Vanguard, plans to support management over Nelson Peltz’s Trian Partners in Wednesday’s board vote, Bloomberg News reported Tuesday, citing unnamed people familiar with the matter.
    Institutional shareholders have until Wednesday to change their vote. Vanguard owns 7.8% of Disney shares. BlackRock, Disney’s second-largest shareholder with 4.2% of shares, is also supporting the incumbent board and CEO Bob Iger, The Wall Street Journal reported Monday.

    The reporting on how Disney’s largest shareholders are supposedly voting prompted harsh criticism from onetime activist investor Bill Ackman on Tuesday evening.
    “Only the company and its advisors have access to how shareholders have voted before the day of the annual meeting,” Ackman wrote on social media platform X. “The reason why the progress of an election for directors must be kept confidential until the results are final is that leaking the results can affect the ultimate outcome.”
    Disney shareholders should support Peltz’s efforts, Ackman wrote, both because he would be “greatly additive” to Disney and because the media leaks, which Ackman alleged came from Disney or its advisors, raised the question of why management was “fighting so hard to keep him off.”
    It would be a significant blow to Peltz’s ambitions to join Disney’s board if both BlackRock and Vanguard move to back the media company’s candidates. That would leave only State Street and Geode Capital Management, the company’s third- and fourth-largest shareholders respectively, as unknowns.
    Through an arrangement with former Marvel Chairman Ike Perlmutter, Trian controls 1.8% of Disney shares, making it the fifth largest shareholder. Retail investors have until 11:59 p.m. ET Tuesday to submit their vote by phone or online.

    Trian has won support from other, smaller shareholders, including Neuberger Berman and CalPERS. For its part, Disney has called in some of the most prominent names in the corporate and media world, including JPMorgan Chase CEO Jamie Dimon and Star Wars creator George Lucas.
    Disney’s shareholder meeting begins Wednesday at 1 p.m. ET.
    Vanguard declined to comment to CNBC.
    Read the full Bloomberg report here.

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