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    China’s new ambassador to the U.S. arrives to ‘safeguard’ Beijing’s interests

    Xie Feng, China’s new ambassador to the U.S., arrived in New York Tuesday, according to a release from China’s embassy in the U.S.
    Xie assumes office after a roughly six-month period in which China did not have an ambassador to the U.S.
    The prior ambassador, Qin Gang, was promoted in December to become China’s new foreign minister.

    Xie Feng, China’s new ambassador to the U.S., addresses the media as he arrives at JFK airport in New York City, May 23, 2023.
    Brendan McDermid | Reuters

    China’s new ambassador to the U.S. arrived in New York Tuesday with a call to “safeguard the interests of China,” according to a release from the country’s embassy in the U.S.
    Xie Feng assumes office after a period of about six months in which China has had no ambassador to the U.S. He was most recently a vice foreign minister.

    Xie said Tuesday the bilateral relationship faces “serious difficulties and challenges,” and his mission is to “enhance China-U.S. exchanges and cooperation,” the release said in English.
    The U.S. Department of State did not immediately respond to a CNBC request for comment.
    The prior ambassador, Qin Gang, was promoted in December to become China’s new foreign minister. Earlier this month, Qin met U.S. Ambassador to China Nicholas Burns in Beijing for the first time since assuming his new role.

    Tensions between the two countries escalated in February after the U.S. shot down an alleged Chinese spy balloon over American airspace. U.S. Secretary of State Antony Blinken had planned to visit Beijing around that time, but decided to postpone the trip after the balloon incident.
    Over the weekend, U.S. President Joe Biden said those tensions would “begin to thaw very shortly.”

    “We’re not looking to decouple from China, we’re looking to de-risk and diversify our relationship with China,” Biden told reporters following the Group of Seven meeting in Hiroshima, Japan, according to a White House transcript.

    The most optimistic scenario for a ‘thaw’ is simply a halt in the decline of relations.

    Gabriel Wildau

    He did not discuss potential new rules limiting U.S. businesses’ investment in advanced Chinese technology.
    “The most optimistic scenario for a ‘thaw’ is simply a halt in the decline of relations,” Gabriel Wildau, managing director at consulting firm Teneo, said in a note. “For financial markets and multinational companies operating in China, however, such a halt would be significant.”
    “Even absent concrete policy changes, a general sense that the downward spiral has stopped could reduce risk perceptions and unlock new investment.”

    Read more about China from CNBC Pro

    Correction: This story has been updated to reflect that Nicholas Burns and Qin Gang’s meeting in Beijing this month was their first since the latter assumed his new role as foreign minister. More

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    ‘Hurricane has landed:’ Activist investor Jonathan Litt doubles down on office space short

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    A major activist investor is betting stalled return-to-office plans will stir up more trouble in commercial real estate.
    Land and Buildings’ Jonathan Litt has been shorting REITs with high office space exposure for three years, and he has no plans to shift gears.

    “If you have no rent growth and your vacancies are going up and you have giant operating expenses to run an office building, you’re going backwards fast,” the firm’s chief investment officer told CNBC’s “Fast Money” on Tuesday.
    Litt first warned Wall Street an “existential hurricane” was about to hit the sector in May 2020. Now, he’s saying the “hurricane has landed.”
    He’s doubling down on the call — citing spiking interest rates and high inflation. Litt calls them two factors he didn’t anticipate when he first started shorting these companies in May 2020.
    DC-based JBG Smith Properties is one of Litt’s major shorts. It’s down 58% since the World Health Organization declared Covid-19 as a pandemic on March 11, 2020. So far this year, JBG Smith is off 20%.
    “Washington, DC is one of the toughest markets in the country today,” noted Litt. “They have a substantial office portfolio.”

    He adds the crackdown on lending is compounding the problems.
    “This isn’t a work from home story anymore. This is a financing story. It’s kind of like them mall business went from the mall problem to the financing problem,” Litt said. “Now, it’s a financing problem. And as these debts come due, there’s really nowhere to go because lenders aren’t lending to the space.”
    JBG Smith did not immediately respond to a request for comment.
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    Nike CEO John Donahoe says brands need to stand by their values amid DeSantis, Disney feud

    CNBC’s inaugural CEO Council Summit convenes on the West Coast this week

    Nike CEO John Donahoe sat down with CNBC during its inaugural CEO Council Summit in Santa Barbara, California, and weighed in on the role corporations play in political debates.
    When asked if he’s worried about being labeled a “woke corporation” by Florida Gov. Ron DeSantis, Donahoe said companies need to champion the values integral to their brands.
    The sneaker boss pointed to racial and social justice, youth sports and sustainability as Nike’s most important values.

    Nike CEO John Donahoe interviewed by Sara Eisen at the CNBC CEO Council Summit in Santa Barbara, California.
    Randy Shropshire | CNBC

    As a political battle rages between Florida Gov. Ron DeSantis and Disney, Nike CEO John Donahoe said it’s important for corporations to choose their battles, but fight for the values integral to their brands. 
    During a sit-down interview at the inaugural CNBC CEO Council Summit in Santa Barbara, California, Monday evening, CNBC’s Sara Eisen touched on the DeSantis controversy and asked Donahoe if he was worried Nike would become a target.

    “Aren’t you worried that if Ron DeSantis becomes president, he’s going to go after you as a woke corporation?” Eisen asked Donahoe about the expected Republican presidential contender. 
    In response, Donahoe said companies don’t need to weigh in on every political kerfuffle but should be a loud voice when their brand’s values are under attack. 
    “I think Bob’s doing a great job at this,” Donahoe said of Disney CEO Bob Iger.
    “If it’s core to who you are and your values, then no, you stand up for your values,” he said. “If it’s commenting on some political issue that’s in someone else’s backyard, then we may have that personal feeling, but we don’t comment on it with our brand and publicly.” 
    Iger wasn’t leading Disney when, in February 2022, he publicly slammed Florida Republicans’ controversial bill limiting classroom discussion of sexual orientation, which he and other critics have dubbed “Don’t Say Gay.”

    His tweet the bill “will put vulnerable, young LGBTQ people in jeopardy” put more pressure on Disney’s CEO at the time, Bob Chapek, to break his silence about the legislation.
    After Disney came out against the bill, DeSantis and his allies targeted the Orlando-area special tax district that has allowed Walt Disney World to essentially self-govern its operations for decades. The clash has gone on for more than a year, and it has continued even after Iger returned as CEO in November following Chapek’s ouster.
    Donahoe pointed to three values that are integral to Nike’s brand: racial and social justice, sustainability and youth involvement in sports, particularly for young girls.
    When it comes to racial and social justice, Donahoe said Nike built its brand in partnership with some of the most iconic Black and brown athletes in history, such as Michael Jordan, Serena Williams and LeBron James. 
    “In addition, our core consumer for the Nike brand, the Jordan Brand, the converse brand, are urban Black and brown communities — that’s where sneaker culture started,” Donahoe explained. “And so, we listen to our athletes and to our consumer about what they care about and they care about racial and social justice and so we view that as core to who we are, core to our identity … so it gives us a little more courage to speak out.” 
    The company has focused on youth involvement in sports as young girls are dropping out of athletics at “an alarming rate,” Donahoe said.
    “Turns out one of the biggest reasons girls drop out is they don’t have female coaches when they hit puberty,” said Donahoe. “So, we’re trying to train 20,000 female coaches, moms and other former athletes to be coaches to promote youth. So that’s less of a controversial issue, but it’s one we care about as a value.” 
    On sustainability, Donahoe said as “the leader” in the industry, Nike must set an example for change because if it doesn’t, “it won’t happen.”  More

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    Netflix password-sharing crackdown rolls out in the U.S.

    Netflix said it began alerting customers that their password-sharing days were over.
    In an email to members, the streamer said: “Your Netflix account is for you and the people you live with — your household.”
    Members can transfer a profile of someone outside of their household so that the person can begin a membership they pay for on their own. Or they can pay an extra fee — $7.99 a month — per person.

    Netflix sign-in page displayed on a laptop screen and Netflix logo displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland, on Jan. 2, 2023.
    Jakub Porzycki | Nurphoto | Getty Images

    Netflix’s crackdown on password sharing has come to the U.S.
    The streaming service said it began alerting members on Tuesday about its new sharing policy, noting that Netflix accounts are only to be shared within a single household.

    “Your Netflix account is for you and the people you live with — your household,” the company said in an email, which it posted to its blog on Tuesday.
    The email goes on to say that members can transfer a profile of someone outside of their household so the person can begin a new membership they pay for on their own. Or they can pay an extra fee – $7.99 a month – per person outside of their household using their account.
    On Netflix’s subscription plans page, it notes that extra members can be added to its standard and premium plans without ads.
    Netflix warned it would be tightening its guidelines on password sharing in a push to boost revenue and subscriber numbers, soon after the company began seeing growth stagnate.

    What Netflix plans cost

    Here’s how Netflix prices its tiers in the United States:

    Standard ad-supported (2 devices at a time): $6.99/month
    Basic (1 device at a time): $9.99/month
    Standard (2 devices at a time): $15.49/month
    Premium (4 devices at a time): $19.99/month

    Originally, Netflix was expected to roll out its crackdown on people who borrow other accounts to create their own profiles late in the first quarter, but alerted investors and customers during an earnings call last month that it was pushing the move until the second quarter.
    The streamer has said than more than 100 million households share accounts, which is about 43% of its global user base. Netflix said this has affected its ability to invest in new content.
    Earlier this year, Netflix outlined password-sharing guidance in four other countries: New Zealand, Canada, Portugal and Spain. Netflix said it would ask members in those countries to set a “primary location” for their accounts, and allow users to establish two sub accounts for those who don’t live in their home base for extra fees.
    Read more: Netflix’s expected password-sharing crackdown puts college students on edge
    In Tuesday’s notice, the company didn’t provide such specifics for U.S. households, and rather gave the two options of either transferring a profile or paying a fee for an extra member.
    The company said it had seen its subscriber growth affected internationally where it had rolled out such initiatives during the first quarter. But Netflix still managed to add 1.75 million customers during the quarter.
    In Latin America, Netflix executives said it saw cancellations after the news was announced, affecting near-term growth. But they found those password borrowers would later activate their own accounts and add existing members as “extra member” accounts. As a result, the company has seen more revenue, the execs said.
    Netflix executives have likened the paid-sharing transition to that of price increases: people initially balk and cancel, then slowly return and sign up for their own accounts.
    In addition to its crackdown on password sharing, Netflix also recently introduced a cheaper, ad-supported tier in an effort to boost revenue. Both measures have come in response shortly after Netflix reported its first subscriber loss in more than a decade in early 2022.
    Media companies across the board have been looking for ways to make their streaming plays profitable, leaning on methods such as content cost-cutting, advertising and finding other ways to attract more customers to their platforms.
    On Tuesday, Warner Bros. Discovery relaunched its streaming service as Max, which is a combination of the HBO Max and Discovery+ services.
    Paramount Global also announced this week that its Paramount+ with the Showtime combined app would be available in late June. Disney has also recently announced it’s adding Hulu content to Disney+. More

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    Stocks making the biggest moves after hours: Palo Alto Networks, Urban Outfitters and more

    Construction workers build a Toll Brothers home in Boca Raton, Florida.
    Joe Raedle | Getty Images

    Check out the companies making headlines in extended trading.
    Palo Alto Networks — Shares gained 3.5% after the company’s fiscal third-quarter earnings and revenue topped estimates. The cybersecurity company posted adjusted earnings of $1.10 per share and revenue of $1.72 billion. Analysts polled by Refinitiv had estimated earnings of 93 cents per share and $1.71 billion in revenue. The company’s earnings guidance for the fiscal fourth quarter also surpassed expectations. 

    Urban Outfitters — The clothing retailer’s stock popped 6%. Urban Outfitters posted earnings of 56 cents per share in the first quarter. Analysts had expected earnings of 35 cents per share, according to Refinitiv. Revenue also beat expectations, with the company reporting $1.11 billion versus consensus estimates of $1.09 billion. 
    Agilent Technologies — Shares of the laboratory technology company declined more than 6%. Agilent posted an earnings and revenue beat in the fiscal second quarter, according to Refinitiv. Guidance for earnings and revenue in the fiscal third quarter was lower than anticipated.
    Intuit — The tax software company’s shares fell more than 5%. While Intuit’s fiscal third-quarter earnings beat estimates, revenue fell below expectations, according to Refinitiv. The company’s earnings outlook for the current quarter was also lower than what analysts had estimated.
    Toll Brothers — Shares gained more than 3% after the company’s fiscal second-quarter earnings and revenue beat analysts’ estimates. The company said the increase in demand that started in January has continued into the start of its third quarter.
    VF Corp. — The apparel company’s shares jumped 2% in extended trading. VF, whose brands include Smartwool and The North Face, posted adjusted earnings of 17 cents per share on revenue of $2.74 billion during its fiscal fourth quarter. Analysts were calling for earnings of 14 cents per share on revenue of $2.73 billion, according to Refinitiv. More

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    BlackRock bond chief Rieder says U.S. economy in ‘much better shape’ than doomsayers say

    Resilient government, consumer spending, improving homebuilder data, low unemployment and more tell BlackRock’s Rick Rieder that the U.S. economy is faring better than many expected.
    “I think the U.S. economy’s in much better shape than people give [it] credit” for, Rieder said Tuesday at an event at BlackRock’s New York headquarters.
    “I’ve never seen so much money sitting in cash, and a lot of it” waiting for a debt ceiling resolution before being deployed, he said.

    Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, speaks during a Reuters investment summit in New York, November 7, 2019.
    Lucas Jackson | Reuters

    NEW YORK — When the bond chief of the world’s biggest asset manager looks at the U.S. right now, he sees a lot to like.
    A combination of resilient government, corporate and consumer spending, improving homebuilder data, $1.5 trillion in excess savings and low unemployment tell BlackRock’s Rick Rieder that the American economy is faring better than many expected.

    “I think the U.S. economy’s in much better shape than people give [it] credit” for, Rieder said Tuesday at an event at BlackRock’s New York headquarters.
    “There’s this thesis that you will have a dramatic slowdown,” he said. “When you break down the numbers, it’s just not apparent.” 
    Talk of a pending recession has been building as the impact of the Federal Reserve’s interest rate increases ripple through the economy. The collapse of three midsized banks this year have stoked concerns that lenders will rein in access to credit, further slowing down the economy. Still, employment figures have confounded expectations, most recently in April, when nonfarm payrolls jumped by 253,000.
    “When people talk about, ‘We’re going to a recession or a deep recession,’ it’s pretty unusual [or] almost impossible when you have an unemployment rate of 3.4%,” Rieder said.

    Lots of cash sidelined

    Rieder, a three-decade market veteran who oversees $2.4 trillion in assets, said he expects the Fed to pause rate increases at its next meeting. It could raise rates one more time, but he suggested the rate-hiking campaign is largely done.

    That expectation, combined with slowing inflation, gives investors a good backdrop, even if he does expect the economy to slow later this year.
    The biggest threat to Rieder’s thesis is a potential U.S. default on its sovereign debt, which could usher in panic and be “potentially catastrophic” for the economy, according to experts including JPMorgan Chase CEO Jamie Dimon. Treasury Secretary Janet Yellen has said tha the U.S. could lose the ability to pay its bills as soon as June 1.
    Rieder puts a “very high probability” of the Biden administration striking a deal with Republican lawmakers, he said.
    “I’ve never seen so much money sitting in cash, and a lot of it” waiting for a debt ceiling resolution before being deployed, he said. More

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    Nike CEO John Donahoe says breaking up with China would be ‘disastrous’ amid rising geopolitical tensions

    CNBC’s inaugural CEO Council Summit convenes on the West Coast this week

    Nike’s CEO John Donahoe weighed in on growing geopolitical tensions with China during CNBC’s inaugural CEO Council Summit in Santa Barbara, California.
    The sneaker boss said there is risk everywhere for global companies but decoupling from the region would be “disastrous.”
    “If you really look at the trade flows, both ways, they play a mutually valuable role,” he said.

    A Nike store is pictured in Sanlitun on March 27, 2021 in Beijing, China.
    VCG | Getty Images

    Nike CEO John Donahoe acknowledged geopolitical tensions are rising with China – one of its largest markets – but said decoupling from the region would be “disastrous” for global trade. 
    During a sit-down interview at the inaugural CNBC CEO Council Summit in Santa Barbara, California, on Monday evening, CNBC’s Sara Eisen asked Donahoe about the threat of China invading Taiwan and Beijing’s position in Russia’s war with Ukraine. 

    “You have to be wondering about first of all, non-zero-percent chance that China invades Taiwan, and then creates a major issue with the United States, that China supplies Russia with military aid, I mean, what happens to Nike in these scenarios, which will create even more tension between the U.S. and China?” Eisen asked Donahoe. 
    In response, Donahoe said risk is everywhere for companies like Nike that operate on a global scale.
    “If you’re a global company, you’ve got to just accept that and try to steer a course that is consistent with your strategy and consistent with their values,” said Donahoe. 
    “The business has to step up when the political institutions are in the state they’re in today and so we’re committed to being a global company, whether that be in China, whether it be in other markets, and yes, there’s risk and you know, we’ve done some contingency planning like all of us have, but we’re clear, we’re going to try to keep moving forward,” he said.

    Donahoe said global trade is a good thing for the economy – and geopolitical relations. He said consumers around the world benefit from it. 

    “We believe that frankly, it can almost help promote peace and understanding,” he said. 
    When asked if there are any plans to “decouple” from the region, Donahoe said no. 
    “I think decoupling would be disastrous economically between the U.S. and China or China and the European Union. If you really look at the trade flows, both ways, they play a mutually valuable role,” he said. “Again, we believe in global trade and we’ll continue to try to do everything we can to support that. … We believe that both economies and the European economy as well benefits from thoughtful balanced trade.” 
    Donahoe said China – the sneaker giant’s third-biggest market by revenue – is vital to Nike. He added it is important to adhere to the country’s local standards, while not violating any “global rules,” such as human rights violations. 
    “We very much understand ourselves to be a local citizen with our China consumers and our China team,” Donahoe said. “We’re trying to maintain very much of a long-term view during this period, there have been ups and downs over history and we’re blessed where we have strong leadership position.” More

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    Stocks making the biggest moves midday: Yelp, AutoZone, Lowe’s, Apple and more

    Yelp Inc. signage is displayed on a monitor on the floor of the New York Stock Exchange.
    Michael Nagle | Bloomberg | Getty Images

    Check out the companies making headlines in midday trading.
    Yelp — Shares of the online reviewing company jumped 5.7% after activist investor TCS Capital Management took a stake in the firm, saying in an open letter the company should explore strategic alternatives, including a sale. TCS built up a more than 4% position in Yelp, becoming one of the company’s top five shareholders. TCS said Yelp is “shockingly undervalued” and could be sold to a private equity buyer for at least $70 per share, a more than 120% premium.

    related investing news

    AutoZone — The auto retailer’s shares fell 6% after missing revenue expectations for the fiscal third quarter. AutoZone posted $4.09 billion in revenue, less than the $4.12 billion consensus estimate of analysts polled by Refinitiv. Earnings of $34.12 per share topped analysts’ $31.51 forecast. Inventory increased 7.4% year over year.
    Lowe’s Companies — The home improvement retailer advanced 1.7% on a first-quarter earnings report that beat analyst expectations, but the company cut its full-year outlook.
    Chevron — The San Ramon, California-based energy producer added 2.9% in midday trading. HSBC upgraded Chevron to buy from hold earlier Tuesday, citing a potential rebound in oil prices.
    Zoom Video Communications — Shares tumbled 8.1% following the video conferencing stock’s first-quarter report. While the company beat Wall Street expectations for both earnings per share and revenue, Zoom’s expectations for the current quarter were only in line with expectations, according to Refinitiv.
    Broadcom — Broadcom shares added 1.2% after Apple announced a multibillion-dollar chip deal with Broadcom. The multiyear plan stems from the iPhone maker’s commitment to funnel $430 billion into the U.S. economy.

    BJ’s Wholesale — Shares dropped 7.3% after the wholesale club’s quarterly revenue was modestly worse than estimates from analysts polled by Refinitiv. Comparable club sales excluding gasoline also came in slightly weaker than expected.
    Peloton — Shares lost 1.1% after the connected fitness equipment company, largely known for its at-home exercise bike, unveiled a fresh marketing strategy to grab new customers. The brand relaunch, which comes as Peloton tries to turn itself around, includes a new pricing structure for its digital app.
    Advanced Micro Devices — The semiconductor company’s shares rose 0.1%, hitting a new 52-week high. Bank of America reiterated the chipmaker as a buy in a Tuesday note, saying AMD is on the “verge of another large opportunity” stemming from artificial intelligence demand.
    Chimerix — The biotech stock rose 2.1% after Baird began research coverage with an outperform rating. The firm said it’s bullish on a “first-in-class agent” treatment for tumors.
    Lifecore Biomedical — The stock jumped 50.2% after Lifecore announced $150 million in new financing, the repayment of outstanding term loans and a new supply agreement.
    Integra Lifesciences — Shares fell 20.2% after the medical technology company gave weak guidance for its second quarter. The company said earnings per share should reach 55 cents to 59 cents, less than the prior range of 75 cents to 79 cents and the consensus estimate of 77 cents from analysts polled by FactSet. Integra said revenue should total between $372 million and $376 million, lower than prior guidance of $396 million to $400 million and the FactSet consensus of $398.1 million.
    Quanterix, Myriad Genetics — The health technology stocks surged 9.2% and 13%, respectively, following upgrades to buy from neutral at Goldman Sachs. The bank said Quanterix has better operating leverage than the market expects, and Myriad has a differentiated financial profile that’s currently discounted.
    Snowflake — Shares rose 1.9% ahead of the cloud computing stock’s quarterly report due Wednesday. Wells Fargo said it was bullish heading into the company’s earnings and reiterated an overweight rating.
    CCC Intelligent Solutions — Shares of CCC Intelligent Solutions gained 0.8% following an upgrade to outperform from in line at Evercore ISI. The firm said the software services provider for the property and casualty insurance sector “has been on an ‘AI journey’ long before it became the trend du jour.”
    Spotify — The music streaming service lost 0.6% despite Guggenheim reiterating the stock as a buy, noting usage trends remain strong and can help Spotify power a healthy growth cycle.
    Regional banks — Several regional banks rose Tuesday. Closely followed PacWest jumped 7.9%, while Comerica and Zions added 2% and 4.6%, respectively.
    — CNBC’s Hakyung Kim, Michelle Fox, Samantha Subin, Brian Evans, Yun Li, Sarah Min and Michael Bloom contributed reporting. More