Finance

Among the top five priorities China has laid out for boosting consumption is child care subsidies.
A national-level policy of 100 billion yuan ($13.84 billion) for child care subsidies could come soon this year, Jianguang Shen, chief economist at Chinese e-commerce company JD.com, said in Mandarin, translated by CNBC.
In a glimpse of what is already being rolled out, the Inner Mongolian capital of Hohhot, last week announced subsidies of up to 100,000 yuan for children of registered locals who live and work in the city.

Customers browse children’s clothing at a wholesale store in Chongqing, China, on March 1, 2025.
Cheng Xin | Getty Images News | Getty Images

BEIJING — Among the top five priorities China has laid out for boosting consumption is child care subsidies.
It’s an effort to tackle the country’s rapid drop in births, while freeing up cash for discretionary spending.

As with many Chinese policies, the plan released Sunday only lays out a framework: “Strengthen support for childbirth and raising children. Research and establish a system for subsidizing child care.” That’s according to a CNBC translation of the Chinese.
Beijing is moving relatively quickly, however.
The National Health Commission is already drafting an operational plan for subsidizing child care, Li Chunlin, deputy director of the economic planner, the National Development and Reform Commission, told reporters Monday.

A national-level policy of 100 billion yuan ($13.84 billion) for child care subsidies could come soon this year, Jianguang Shen, chief economist at Chinese e-commerce company JD.com, said in Mandarin, translated by CNBC.
That’s based on his estimate of around 9 million births this year, and monthly handouts of around 800 yuan to parents, regardless of income, Shen said. He noted half of the cash could come in the form of vouchers for baby products to prevent households from saving the money.

China recorded 9.54 million births last year, up by 520,000 from the prior year, as many locals considered 2024 an auspicious year for births based on the Chinese zodiac’s year of the Dragon. However, World Bank data showed that the fertility rate, defined as births per woman, was 1.2 in China in 2022, down from 1.8 in 2012.
“The key is to increase fiscal resources,” Shen said, noting that in the context of 300 billion yuan for trade-in subsidies, 100 billion yuan for child care isn’t too much to ask for. He forecasts around 3.5% to 4.5% growth in retail sales this year.
China’s retail sales grew by a modest 3.5% last year, according to official data. The January to February period, which covers the annul Lunar New Year holiday, saw a modest pick up to 4% year on year, the statistics bureau said Monday.

How much is enough?

In a glimpse of what is already being rolled out, the Inner Mongolian capital of Hohhot, last week announced subsidies of up to 100,000 yuan for children of registered locals who live and work in the city.
The couple can enjoy a one-time subsidy of 10,000 yuan upon the birth of their first child. Their second child is eligible for 10,000 yuan in annual subsidies until the age of five. If the couple have a third child, the city will provide 10,000 yuan each year until the child turns 10.
The tech hub of Shenzhen this month said it is considering a smaller-scale subsidy. State media noted that National Health Commission data as of October showed several local governments in more than 20 provinces were already offering some kind of child care subsidy.
“If the childcare subsidy in Hohhot can be extended to the whole country, it could amount to another 0.2% of retail sales in the initial year,” Citi analysts said in a report Tuesday. They said the subsidy could be most meaningful for low-income families and “could become more significant if the central government steps in to share the burden.”
“It remains to be seen if it will be effective in boosting fertility rate in the longer term,” the Citi analysts said, noting the total cost of raising a child in China is reportedly around 538,000 yuan, not to mention the opportunity cost for working mothers.
The per capita disposable income of rural residents was 23,119 yuan in 2024, while that of urban residents was more than two times higher at 54,188 yuan, according to official figures.
Short-term subsidies for child care could still significantly ease financial pressure on Chinese households.
When Beijing resident Song Jingli, now 41, gave birth to her daughter nearly 10 years ago, there was no child care support. Song said she made 8,000 yuan a month at the time, and day care cost 4,000 yuan.
“We didn’t have a choice,” she said. My husband “needed to go to work, I needed to go to work, and my parents-in-law were not able to take care of her.”
By the time her daughter was in kindergarten, Song said, she was able to benefit from a relatively new policy that halved the cost to around 2,000 yuan. The new policies on child care are “right to the point,” she said. “The only pity [is] it’s too late for us who were born in the 1980s. Hopefully younger generations can benefit from these policies.”

What to watch next

China’s efforts to boost consumption also include calls for increasing the minimum wage, stabilizing the stock market, boosting farmers’ income and resolving payment delays for businesses.
“The direction of [China’s] consumption-boosting measures is correct,” Goldman Sachs analysts said in a report Monday, “but both funding and implementation matter for the effectiveness of China’s consumption stimulus.”
“The announcement of a nationwide childcare subsidy and the April Politburo meeting are key to watch in coming months,” the analysts said, referring to a high-level policy meeting typically held in late April. More

Spencer Platt | Getty Images

Individual investors, whose assets are more tied to the stock market than ever, have abandoned their tried-and-true dip-buying mentality as the S&P 500 recently fell into a painful, 10% correction.
Retail outflows from U.S. equities rose to about $4 billion over the past two weeks as tariff chaos and mounting economic concerns caused a three-week pullback in the S&P 500, according to data from Barclays. During March’s sell-off, 401(k) holders have been aggressively trading their investments, to the tune of four times the average level, according to Alight Solutions’ data going back to the late 1990s.

“If people were trying to buy the dip and get their stocks on sale, maybe you would see people actually buying large-cap equities. But instead we see people selling from large cap-equities,” said Rob Austin, director of research at Alight Solutions. “So this does appear to be a bit of a reactionary trading activity.”

Arrows pointing outwards

The increased selling came as American households are more sensitive than ever to the turbulence in the stock market. U.S. household ownership of equities has reached a record level, amounting to nearly half their financial assets, according to Federal Reserve data.
Dip-buying had served investors well over the past two years as Main Street rode the artificial intelligence-inspired bull market to record highs. At one point, the S&P 500 went more than 370 days without even a 2.1% sell-off, the longest such stretch since the global financial crisis of 2008-09.
But lately, markets began to sour as President Donald Trump’s aggressive tariffs and sudden changes in policy stirred up volatility, stoking fears of dampened consumer spending, slower economic growth, weaker profits and maybe even a recession. The S&P 500 officially entered a correction late last week, and is now sitting some 8.7% below its February all-time high.

Stock chart icon

Still, retail traders are far from throwing in the towel. For example, the net debit of margin accounts, a “popular proxy for retail investors’ sentiment,” continues to stay elevated, according to Barclays data.

“There is plenty of room for retail investors to further disengage from the equity market,” analysts led by Venu Krishna, Barclays head of U.S. equity strategy, said in a note Tuesday to clients. “We are of the view that retail investors have in no way capitulated.”
Barclays’ proprietary euphoria indicator shows sentiment has been brought down to levels similar to where it was around the time of the U.S. presidential election in November, but is still high by historic standards.
“It’s not like everybody is going out there saying the sky is falling. Most people, it looks like, are not making any sort of reactions,” Austin said. More

Think of America as a vast economic experiment. The country left the covid-19 pandemic full of stimulus, and with a roaring stockmarket. Which places managed to channel this vigour into new companies, houses, power stations and intellectual property? And which let rents and prices surge instead? More

Wall Street analysts endorsed Capital One , and the Club stock bounced Tuesday — one day after a sharp slide on concerns about possible regulatory hurdles to the company’s pending Discover acquisition. The news Citi, KBW, and Jefferies all said they still expect the $35 billion deal to be completed despite a Monday afternoon report from The Capital Forum subscription service, which indicated the Justice Department may challenge it on anticompetitive grounds concerning subprime credit card concentration of the combined company. Shares of Capital One and Discover closed down nearly 4% and 7%, respectively, on Monday. KBW maintained its buy-equivalent rating on Capital One, calling Monday’s market reaction to the report “overblown.” Citi said that if the DOJ is concerned then Capital One will likely find a way to appease regulators. “Our view remains that if the DOJ finds issue with this subprime concentration, COF will work with regulators to find a compromise which could include selling part of the Discover card portfolio but retaining the network, which is the crown jewel of the deal,” the analysts said. Jefferies also speculated on a possible sale of Discover’s subprime portfolio, forecasting a “modest impact to pro forma EPS.” But the analysts said they “still see the deal as very accretive.” A spokesperson for Capital One told CNBC in a statement that the merger meets all legal requirements and remains “well-positioned to gain approval” COF YTD mountain Capital One Financial (COF) year-to-date performance Big picture The news comes amid a legal battle between Capital One and the family business of President Donald Trump . Earlier this month, the Trump Organization filed a lawsuit alleging Capital One violated consumer protection laws by closing the company’s accounts following the Jan. 6, 2021 attack on the U.S. Capitol. For its part, Capital One has said it does not close customer accounts for political reasons. To be sure, the regulatory consideration of the Discover purchase will be a major test of post-election expectations that a Trump administration would favor more mergers and acquisitions than former President Joe Biden ‘s. Bottom line Against this complex backdrop, we agree with Wall Street’s optimism about the Capital One-Discover deal eventually getting approval. Like the analysts, we’re not ruling out remedies if required by regulators. That’s because it doesn’t seem like Capital One CEO Richard Fairbank would let a divestiture of the combined company’s subprime portfolio stand in the way of the deal. “Owning a payment network, that’s the holy grail” for Capital One, said Jeff Marks, director of portfolio analysis for the Investing Club. “That’s what they want most, not necessarily being this huge subprime owner.” The Discover acquisition is a big reason why we initiated a position in Capital One in the first place on March 6 and subsequently made five more small additions since then, including a buy on Friday . If completed, Capital One will own the Discover Global Network, which will decrease the firm’s reliance on industry heavyweights Mastercard and Visa — and, in turn, lower what it pays out in fees. “I think our thesis hinges on this deal being approved,” Marks added. “We certainly thought under a Trump regime, it would be more likely to be approved. That’s why we started to buy the stock down at these lower levels.” (Jim Cramer’s Charitable Trust is long COF. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Screens display the logos and trading information for Capital One Financial and Discover Financial as traders work on the floor at the New York Stock Exchange on Feb. 20, 2024.
Brendan Mcdermid | Reuters More

“Capital markets are realizing that the place to be is Texas,” Abbott said on CNBC’s “Squawk Box.”
On Tuesday, the Nasdaq announced that it would open a regional headquarters in Dallas.

Texas is continuing to stake a claim as a rival to Wall Street as a key financial hub in the United States, with Gov. Greg Abbott on Tuesday saying his state has a “stronger brand than New York.”
“Capital markets are realizing that the place to be is Texas,” Abbott said on CNBC’s “Squawk Box.”

Abbott’s comments come as Texas continues to emerge as a financial center, complete with its own stock exchange. The Texas Stock Exchange plans to launch in 2026 and recently announced several key hires for its exchange-traded products business.
The financial industry’s leading companies are also working to increase their presence in the Lone Star State. The New York Stock Exchange announced in February it would relocate its Chicago operations to Texas, and on Tuesday, Nasdaq announced it will open a regional headquarters in Dallas.
“Nasdaq is deeply ingrained in the fabric of the Texas economy, and we look forward to maintaining our leadership as the partner of choice for the state’s most innovative companies,” Adena Friedman, Nasdaq’s CEO, said in a press release.
Trading at most major stock exchanges around the world, including the NYSE and the Nasdaq, is done almost entirely electronically. Stocks can trade on multiple exchanges in different locations although they have one designated primary listing.
Texas is also making a play to rival Delaware as a legal home to major companies, touting a more business-friendly legal environment. That includes making it harder for small shareholders to sue companies, as happened to Tesla in Delaware in a legal fight over CEO Elon Musk’s compensation. Tesla has since shifted its state of incorporation to Texas.
“A guy who had the [stock holdings] value of less than a Tesla vehicle was able to try to upend the entire corporate practice of the Tesla company,” Abbott said Tuesday. “That’s just wrong. What we are trying to codify in Texas is ownership of at least 3% of a business before a derivative action can be brought against a company.”

Don’t miss these insights from CNBC PRO More

IN A SCRAPPY office that is more startup than ivory tower Yossapong Laoonual, head of the Electric Vehicle Association of Thailand, strikes a bullish tone. Clinging to the internal-combustion engine is “like doubling down on horse-drawn carriages long after motorised vehicles became the standard”, he says. A stroll around Mr Yossapong’s campus at KMUTT, an engineering college in Bangkok, makes such optimism seem natural. Three electric buses sit beside a charging point. Signs outline the university’s plan for carbon neutrality. More

Probability of a recession rose to 36% from 23% in January, according to the CNBC Fed Survey, which polls fund managers, strategists and analysts.
The average 2025 GDP forecast declined to 1.7% from 2.4% with tariffs now seen as the top threat to the U.S. economy, replacing inflation.
Three-quarters of respondents forecast two or more quarter-point cuts this year.

Respondents to the March CNBC Fed Survey have raised the risk of recession to the highest level in six months, cut their growth forecast for 2025 and raised their inflation outlook.
Much of the change appears to stem from concern over fiscal policies from the Trump administration, especially tariffs, which are now seen by them as the top threat to the U.S. economy, replacing inflation. The outlook for the S&P 500 declined for the first time since September.

The 32 survey respondents, who include fund managers, strategists and analysts, raised the probability of recession to 36% from 23% in January. The January number had dropped to a three-year low and looked to have reflected initial optimism following the election of President Trump.  But like many consumer and business surveys, the recession probability now shows considerable concern about the outlook.
“We’ve had an abundance of discussions with investors who are increasingly concerned the Trump agenda has gone off the rails due to trade policy,” said Barry Knapp of Ironsides Macroeconomics. “Consequently, the economic risks of something more insidious than a soft patch are growing.”
“The degree of policy volatility is unprecedented,” said John Donaldson, director of fixed income at Haverford Trust.
The average GDP forecast for 2025 declined to 1.7% from 2.4%, a sharp markdown that ended consecutive increases in the three prior surveys dating back to September. GDP is forecast to bounced back to 2.1% in 2026, in line with prior forecasts.

Arrows pointing outwards

CNBC Fed Survey

“The risks to consumers’ spending are skewed to the downside,” said Neil Dutta, head of economic research at Renaissance Macro Research. “Alongside a frozen housing market and less spending across state and local governments, there is meaningful downside to current estimates of 2025 GDP.”

Fed rate cut outlook

Most continue to believe the Fed will cut rates at least twice and won’t hike rates, even if faced with persistently higher prices and weaker growth. Three-quarters forecast two or more quarter-point cuts this year. Part of the reason is that two-thirds believe that tariffs will result in one-time price hikes rather than a broader outbreak of inflation. But the policy uncertainty has created a wider range of views on the Fed than normal with 19% believing the Fed won’t cut at all.

Arrows pointing outwards

CNBC Fed Survey

Still, higher tariffs and weaker growth are a dilemma for the Fed.
“Powell is really stuck here because of the tariff overhang,” said Peter Boockvar, chief investment officer, Bleakley Financial Group. “If he gets more worried about growth because of them and cuts rates as unemployment rises but then Trump removes all the tariffs, he’s jumped the gun.”
More than 70% of respondents believe tariffs are bad for inflation, jobs and growth. 34% say tariffs will decrease US manufacturing with 22% saying they will result in no change. Thirty-seven percent of respondents believe tariffs will end up in greater manufacturing output. More than 70% believe the DOGE effort to reduce government employment is bad for growth and jobs but will be modestly deflationary.
“A global trade war, haphazard DOGE cuts to government jobs and funding, aggressive immigrant deportations, and dysfunction in DC threaten to push what was an exceptionally performing economy into recession,” said Mark Zandi, chief economist, Moody’s Analytics.

Don’t miss these insights from CNBC PRO More

Chinese electric car company Zeekr is releasing advanced driver-assistance capabilities to its local customers for free as competition heats up, Zeekr CEO Andy An told CNBC ahead of a launch event Tuesday.
It’s the latest Chinese electric vehicle brand to upgrade its driver-assistance products as Tesla tries to attract more buyers of its own version, called Full Self Driving, in China.
Over the last two years, driver assistance has increasingly become a selling point for new energy vehicles in China, which include battery-only and hybrid-powered cars.

The view from inside a Zeekr Mix electric vehicle at one of the company’s showrooms in Shanghai, China, on March 16, 2025.
Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese electric car company Zeekr is releasing advanced driver-assistance capabilities to its local customers for free as competition heats up, Zeekr CEO Andy An told CNBC ahead of a launch event Tuesday.
The tech enables the car to drive nearly autonomously from one pre-set destination to another, as long as drivers keep their hands on the steering wheel and there is regulatory approval — which is increasingly the case in most major Chinese cities.

It’s the latest Chinese electric vehicle brand to upgrade its driver-assistance products as Tesla tries to attract more buyers of its own version, called Full Self Driving, in China.
After initial criticism that the 64,000 yuan ($8,850) software was too expensive, some Chinese social media users said Monday that Tesla was offering some users the driver-assistance system for free through April 16. Tesla did not immediately respond to a request for comment.
Zeekr’s version will be free, rolled out to a pilot group initially and then released to the public in April, according to the company.
“Right now, in this period of development, I think subscriptions aren’t that meaningful,” CEO An said in an interview Friday, according to a CNBC translation of his Mandarin-language remarks.
Given intense competition, he said, Zeekr needs to close the gap on driver assistance with market leaders and become a top player. “So we need to bear some cost,” An said, noting Zeekr previously only offered more basic driver-assistance capabilities, such as for parking.

Zeekr, which is listed in the U.S., is scheduled to release quarterly earnings on Thursday ahead of the U.S. market open. Shares are up about 6% year-to-date.

Nvidia chips

CEO An said that Zeekr’s driver-assistance system uses two Nvidia Orin X chipsets and one lidar, or a light detection and ranging unit that allows a vehicle to navigate roads without relying too much on sunlight conditions.
He said a forthcoming version of the system will use Nvidia’s more advanced Thor automotive chip, one long-range lidar and four shorter-range lidar units.
“Using lidar may increase cost, but this reflects how much we value safety,” An said. He said the driver-assistance system for Zeekr cars sold overseas will not use the Nvidia chips for now, given different regulations and local market demand.
Zeekr’s driver-assistance system will also be used for fellow EV brand Lynk & Co.’s cars, An said, and potentially vehicles from parent company Geely. Zeekr officially acquired Lynk & Co. this year.

From price war to driver-assistance competition

Sales of Nvidia’s “self-driving platforms” helped drive the chipmaker’s revenue from automotive and robotics to a record $570 million in the fourth quarter of the 2025 fiscal year.
Also reflecting market demand, major lidar producer Hesai said this month that its lidar shipments have more than doubled annually for four straight years as of 2024.
Hesai’s CFO Andrew Fan told CNBC last week that the company expects significant growth in advanced driver-assistance systems this year from last year, and noted an industry joke that China’s electric car market has shifted from a price war to a war over driver assistance.
Over the last two years, the technology has increasingly become a selling point for new energy vehicles in China, which include battery-only and hybrid-powered cars.
NEV giant BYD in February announced it was rolling out driver-assist capabilities to more than 20 of its car models. While current features mostly focus on parking and highway navigation, the company said an upgrade with point-to-point driver assistance would likely be issued by the end of 2025.
The most basic version of BYD’s driver-assistance system uses Horizon Robotics’ chipset along with Nvidia’s Orin, while more advanced versions only use other Nvidia chips, according to Nomura’s research.
Chinese EV startup Xpeng, another Nvidia customer which made advanced driver assistance an early selling point, has delivered more than 30,000 cars a month since November, thanks in part to its new P7+ car that also did away with requiring additional subscriptions for driver assistance.
Nio has advertised subscriptions for its driver-assistance features but has yet to charge users for them, according to the company. More