Finance

The Fed voted last week to hold rates steady once again, and its updated projections showed an expectation of three rate cuts in 2024.
That caused a rally in stocks and bonds, with the Dow Jones Industrial Average jumping to a record.
However, Chicago Fed President Austan Goolsbee suggested on CNBC’s “Squawk Box” on Monday that the reaction wasn’t totally rational given what the central bank actually said.

A Federal Reserve official said Monday that the market may have misunderstood the central bank’s intended message last week after stocks and bonds rallied sharply.
The Fed voted last week to hold rates steady once again, and its updated projections showed an expectation of three rate cuts in 2024. That caused a rally in stocks and bonds, with the Dow Jones Industrial Average jumping to a record high.

“It’s not what you say, or what the chair says. It’s what did they hear, and what did they want to hear,” said Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk Box.” “I was confused a bit — was the market just imputing, here’s what we want them to be saying?”

Stock chart icon

The Dow hit a record high last week.

The Fed president also pushed back against the idea that the Fed is actively planning on a series of rate cuts.
“We don’t debate specific policies, speculatively, about the future. We vote on that meeting,” he said.
Trading in the options market implies that traders see 3.75% to 4.00% as the most likely range for the Fed’s benchmark rate at the end of 2024, according to the CME FedWatch Tool. That would be six quarter-point cuts below the current Fed funds rate, or double what was forecast in the central bank’s summary of economic projections.
Goolsbee did not explicitly say that the market pricing was wrong, but did highlight this difference.

“The market expectation of the number of rate cuts is greater than what the SEP projection is,” Goolsbee said.
Goolsbee is not the only Fed official who has downplayed the meeting in the wake of the market rally. New York Fed President John Williams said on CNBC’s “Squawk Box” on Friday that “we aren’t really talking about rate cuts right now.” More

Improbable has sold The Multiplayer Group, a multiplayer games services company it bought in 2019, to Keywords Studios for £76.5 million ($97.1 million).
Herman Narula, Improbable’s CEO, told CNBC the transaction is part of its “venture builder” strategy, through which it invests in or acquires teams with the option to expand them or spin them out.
The deal to sell MPG, one of Improbable’s many notable bets on gaming, arrives after a series of struggles at the firm.
Narula said he expects to see a “tale of two metaverses” emerge in 2024, where centralized experiences such as Roblox and Fortnite are eschewed in favor of decentralized, “Web3” versions.

Herman Narula, co-founder and CEO of Improbable, speaks during a session at the Web Summit in Lisbon.
Henrique Casinhas | Sopa Images | Lightrocket | Getty Images

Metaverse company Improbable has sold one of its key gaming ventures to London-listed video game developer Keywords Studios for £76.5 million ($97.1 million).
The company closed the deal to sell The Multiplayer Group (MPG), a multiplayer game services firm, to Keywords on Sunday, an Improbable spokesperson told CNBC.

Based in Ireland, Keywords owns more than 70 studios in locations including Los Angeles, France, Brazil, Mexico and Spain. The firm mainly develops games for third-party developers.
Keywords’ shares have fallen around 49% year-to-date. It has been on an acquisition spree lately, earmarking 91.9 million euros ($100 million) to new takeovers.
That led to a shift from a net cash position at the end of last year to a net debt position of €11.4 million as of June 30.
Keywords also reported earnings per share of 18.48 euro cents in its half-year results for the period to June 30, down 40% year over year.
Keywords said its acquisition of MPG was funded primarily through cash and its existing revolving credit facility, and would contribute double-digit revenue growth in 2024.

Keywords expects the transaction to be earnings per share accretive in its first full year post-acquisition.
MPG was founded in 2018 and is known for behind-the-scenes work on games such as Fallout 76 and Medal of Honor: Above and Beyond.
Herman Narula, Improbable’s co-founder and CEO, told CNBC the transaction was part of its “venture builder” strategy, through which it invests in or acquires gaming and metaverse-related teams with the option of expanding or spinning them off at a later point.
“The thought was, if we understand multiplayer well, and we understand metaverses, maybe we can spot opportunities where we can bring things in the den that we can do well with. And then, at the right time, if it makes sense, to either keep growing them or potentially spin them out,” Narula told CNBC in an exclusive interview.
“It became clear that working with MPG and bringing them in house would have let us learn a colossal amount and help them grow.”

Improbable acquired MPG in 2019, and it has grown dramatically since. Employee numbers rose sixfold in the past four years to 360.
And MPG’s valuation has more than doubled to £76.5 million from Improbable’s original purchase price of £30 million.
While the move suggests a potential scaling back of Improbable’s gaming-related investments, Narula disputed the idea that a sale of MPG marks any sort of retrenchment from that space.
“We’re not in any way selling any technology, or in any way ceasing to operate with games companies,” Narula said. “MPG provide a very specific, specialised service.”
A series of games built on Improbable’s original SpatialOS technology have been canceled in recent years.
They include the open-world game Nostos, developed by NetEase, Worlds Adrift, made by Bossa Studios, and the console version of Scavengers, a game developed by Midwinter Entertainment.
Midwinter was sold by Improbable earlier this year to Behaviour Interactive.
Morpheus, a technology platform developed by Improbable, is now the company’s primary product. Morpheus is designed to host mass-scale multiplayer online games.
Improbable has hosted new experiences using its Morpheus tech, including virtual Major League Baseball games, and the “Otherside” metaverse developed in partnership with blockchain firm Yuga Labs.

Trying to sell investors on ‘metaverse’

Founded in 2012, Improbable is a British firm that aims to build what it calls a network of metaverses. In June, Improbable launched MSquared, a metaverse creation suite, and granted developers access to the platform.
MSquared includes its own network, tech stack, and open-source metaverse markup language.

The deal to sell MPG, one of Improbable’s many notable bets on gaming, arrives after a series of struggles at the firm.
Improbable has undergone substantial cost reductions.
The firm, which scored a $3.4 billion valuation in October 2022, laid off dozens of staffers late last year after raising substantial sums from SoftBank and Andreessen Horowitz.
But valuations of once buzzy metaverse and Web3-related startups have been knocked this year and last year by waning investor enthusiasm for the space.
Improbable has more recently touted itself as artificial intelligence-enabled, saying this has helped lower costs. The company slashed its losses by 85% in 2022 to £19 million.

‘Tale of two metaverses’

Improbable originally set out to build large-scale computer simulations that have applications in gaming and defense.
But its metaverse bets have now become its main focus.
Improbable sold its defense business to Noia Capital in September, marking an exit from a loss-making venture for the firm.
Narula says he expects to see a “tale of two metaverses” emerge next year. Centralized gaming experiences such as Roblox and Fortnite will be eschewed in favor of decentralized, “Web3” metaverses, Narula said.

Web3 refers to the idea of a more decentralized and open version of the web, outside the control of a handful of powerful tech companies like Amazon and Meta.
Blockchain is a key technology involved.
“Ultimately, they [Roblox and Fortnite] are games with different modes made by users and by brands. But people can’t build businesses that they have control over, or that can do commercial things that would be appropriate,” Narula said.
“The other branch of the metaverse, which is driven in some ways by Web3 and in other ways by companies like ours … is really about creating a network of sovereign metaverses.”
Analysts have expressed skepticism about the ability for Improbable to commercialize its technology, not least owing to the technical limitations and high costs involved.
“The jury is still out if they have a viable business model going forward, or whether the reality will ever match the ‘virtual’ hype,” Greg Martin, co-founder and managing director of Rainmaker Securities, a private market trading firm, told CNBC.
Narula said he is hoping to sign up many more partners for MSquared in the future.
Improbable, which is focusing on putting on large-scale metaverse events, ran 30 such gatherings in 2023, up from only three last year. The company plans to raise that number to 300 in 2024. More

U.S. consultancy Mercer issues a closely-watched annual report that analyzes 47 different retirement income systems around the world — with European nations often coming out on top.
Another list from wealth management firm Blacktower, released back in 2021, ranks a much higher number of European nations and placed Belarus last using several key factors.

Amsterdam, The Netherlands.
Alexander Spatari | Moment | Getty Images

Moving to another country to eventually retire requires a lot of careful research and planning, taking into account social security, health care, and finances.
U.S. consultancy Mercer issues a closely-watched annual report that analyzes 47 different retirement income systems around the world — with European nations often coming out on top.

In fact, three countries have dominated the Mercer CFA Institute’s global index since 2021. Namely, Iceland (a 84.6 average), the Netherlands (a 84.4 average) and Denmark (a 81.8 average) have been considered to have the best pension systems over these past three years.
“All three have large industry funds with defined contributions from workers and employers. They have mandatory or quasi-mandatory schemes. These countries benefit from good economies of scale versus more fragmented markets like the U.K. for occupational pensions,” Eimear Walsh, Mercer’s head of investments and wealth, told CNBC.
The Netherlands got the highest overall index value (85.0) this year thanks to good benefits, a strong asset base and sound regulation, while popular European destinations such as Spain, Italy and Croatia have faced some shortcomings.  
The Mercer index is made up of three sub-categories where it rates a pension system: adequacy, sustainability and integrity.

Adequacy of income

A key aim of any pension system should be to provide adequate income for retired people, essentially a safety net. The ability of governments to create incentives for average-income earners to save for retirement plays an important role for the health of any system.

The design of the payment plan is also key, according to Mercer’s ranking, and whether workers can continue to accrue benefits when they are temporarily out of the workforce, for childcare or illness.
Portugal took the top spot on this metric with a score of 86.7 in Mercer’s latest report, due to its earnings-based public pension system. Netherlands was a close second, with a score of 85.6. Both systems have a minimum pension rate, creating a net for even the lowest-income groups. The lowest rating in Europe was Poland which came 31st globally with a 59.8 score.
Portugal was also named the best European country for retirement by Moving to Spain, a relocation company. In a June report, it ranked European countries on several factors like visas, beaches, safety and home prices.
Another list from wealth management firm Blacktower, released back in 2021, ranks a much higher number of European nations and placed Belarus last using several key factors.

Integrity

Funded pension plans provided by the private sector also play an important role in the stability of a country’s retirement system. The Mercer index looks at whether private pension plans in countries generate enough value for members and if there’s enough confidence in the public for these programs.
Finland had the best score on integrity with a 90.9 rate in 2023. Belgium came in second with an 88.2 score and Netherlands ranked in third place with a score of 87.7. France was the worst performer in Europe, with a score of 54.4. Notably, the U.S. is also placed well below the global average with 59.5 points in this category.

Finland has a happiness score that is significantly ahead of all other countries, according to the report.
Westend61 | Westend61 | Getty Images

Finland is also classed as a “happy place” to retire by a Natixis Index. Despite not making it into Natixis’ top 10 in overall scores, Finland has led the investment bank’s “quality of life” category for five consecutive year. A high happiness score, high air quality, water and sanitation, and biodiversity are the main drivers of Finland’s number one position, it said.
Norway was the top performer in the Natixis index for 2023, retaining its place from last year and boasting an overall score of 83%. Switzerland ranks second in the overall index and tops the “finances in retirement category.”

Sustainability of the system

Mercer believes the economic growth of a country in the long term also plays a crucial role, as this directly affects the number of people in the workforce and the amount of money saved for retirement. Additionally, the amount of debt a country has and the amount of public money it spends on pensions, affect the sustainability of its retirement system.

Based on these factors, Iceland has the most sustainable system in Europe with a rating of 83.8. Denmark and Netherlands come right after, with 82.5 and 82.4 respectively. Italy has the lowest score in Europe with 23.7, followed by Spain with a score of 28.5.
However, Mercer’s Walsh noted that there are some soft factors that the index doesn’t take into account which could still make countries like Italy and Spain popular retirement destinations for many people.
“We focus a lot on the pensions system but that’s not the only thing to consider. It’s an important balance. A lot of it also depends on the tax system, the climate and culture of the country, and whether people can actually be happy there,” she said. More

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Market optimism over the potential for interest rate cuts next year is dangerously overdone, according to former FDIC Chair Sheila Bair.
Bair, who ran the FDIC during the 2008 financial crisis, suggested Federal Reserve Chair Jerome Powell was irresponsibly dovish at last week’s policy meeting by creating “irrational exuberance” among investors.

“The focus still needs to be on inflation,” Bair told CNBC’s “Fast Money” on Thursday. “There’s a long way to go on this fight. I do worry they’re [the Fed] blinking a bit and now trying to pivot and worry about recession, when I don’t see any of that risk in the data so far.”
After holding rates steady Wednesday for the third time in a row, the Fed set an expectation for at least three rate cuts next year totaling 75 basis points. And the markets ran with it.
The Dow hit all-time highs in the final three days of last week. The blue-chip index is on its longest weekly win streak since 2019 while the S&P 500 is on its longest weekly win streak since 2017. It’s now 115% above its Covid-19 pandemic low.
Bair said she believes the market’s bullish reaction to the Fed is on borrowed time.
“This is a mistake. I think they need to keep their eye on the inflation ball and tame the market, not reinforce it with this … dovish dot plot,” Bair said. “My concern is the prospect of the significant lowering of rates in 2024.”

Bair still sees prices for services and rental housing as serious sticky spots. Plus, she worries that deficit spending, trade restrictions and an aging population will also create meaningful inflation pressures.
“[Rates] should stay put. We’ve got good trend lines. We need to be patient and watch and see how this plays out,” Bair said.
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Almost everyone expected a global recession in 2023, as central bankers fought high inflation. They were wrong. Global GDP has probably grown by 3%. Job markets have held up. Inflation is on the way down. Stockmarkets have risen by 20%.But this aggregate performance conceals wide variation. The Economist has compiled data on five economic and financial indicators—inflation, “inflation breadth”, GDP, jobs and stockmarket performance—for 35 mostly rich countries. We have ranked them according to how well they have done on these measures, creating an overall score for each. The table below shows the rankings, and some surprising results.Top of the charts, for the second year running, is Greece—a remarkable result for an economy that was until recently a byword for mismanagement. Aside from South Korea, many of the other standout performers are in the Americas. The United States comes third. Canada and Chile are not far behind. Meanwhile, lots of the sluggards are in northern Europe, including Britain, Germany, Sweden and, bringing up the rear, Finland.Tackling rising prices was the big challenge in 2023. Our first measure looks at “core” inflation, which excludes volatile components such as energy and food and is therefore a good indicator of underlying inflationary pressure. Japan and South Korea have kept a lid on prices. In Switzerland core prices rose by just 1.3% year on year. Elsewhere in Europe, though, many countries still face serious pressure. In Hungary core inflation is running at around 11% year on year. Finland is also struggling.In most countries inflation is becoming less entrenched—as measured by “inflation breadth”, which calculates the share of the items in the consumer-price basket where prices are rising by more than 2% year on year. Central banks in places like Chile and South Korea increased interest rates aggressively in 2022, sooner than many others in the rich world, and now seem to be reaping the benefits. In South Korea inflation breadth has fallen from 73% to 60%. Central bankers in America and Canada, where inflation breadth has dropped even more sharply, can take some credit, too.Our next two measures—growth in employment and GDP—hint at the extent to which economies are delivering for ordinary people. Nowhere fared spectacularly well in 2023. But only a small minority of countries saw GDP decline. Ireland was the worst performer, with a drop of 4.1% (take this with a pinch of salt: there are big problems with the measurement of Irish GDP). Britain and Germany also performed poorly. Germany is struggling with the fallout from an energy-price shock and rising competition from imported Chinese cars. Britain is still dealing with the consequences of Brexit.America did well on both GDP and employment. It has benefited from record-high energy production as well as the effects of a generous fiscal stimulus implemented in 2020 and 2021. The world’s largest economy may have pulled up other countries. Canada’s employment has risen smartly. Notwithstanding its war with Hamas, Israel, which counts America as its largest trading partner, comes fourth in the overall ranking.You might think that the American stockmarket, filled with firms poised to benefit from the revolution in artificial intelligence, would have done well. In fact, adjusted for inflation it is a middling performer. The Australian stockmarket, filled with commodities firms managing a comedown from high prices in 2022, underperformed. Share prices in Finland have slumped. Japan’s firms, by contrast, are experiencing something of a renaissance. The country’s stockmarket is one of the best performers this year, rising in real terms by nearly 20%.But for glorious equity returns, look thousands of miles west—to Greece. There the real value of the stockmarket has increased by over 40%. Investors have looked afresh at Greek companies as the government implements a series of pro-market reforms. Although the country is still a lot poorer than it was before its almighty bust in the early 2010s, in a recent statement the imf, once Greece’s nemesis, praised “the digital transformation of the economy” and “increasing market competition”. While underperforming Finns can console themselves this Christmas by drowning their sorrows in their underwear (or getting päntsdrunk, as it is known locally), the rest of the world should raise a glass of ouzo to this most unlikely of champions. ■ More

BNY Mellon’s global head of ETFs suggested exchange-traded funds using options overlays could become next year’s hot product.
“We are absolutely going to see more of these options-based products come to market,” Ben Slavin told CNBC’s “ETF Edge” on Monday. “We see it in our own book.”

Options overlays are a way for investors to hedge against downside.
“Ultimately, there’s going to be more issuers that are continuing to chase this trend that we’re seeing,” Slavin said.
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Citigroup told most of its employees that they can work remotely the final two weeks of December, CNBC has learned.
Workers can log in remotely from anywhere in their country of employment from Dec. 18 to Dec. 29, according to people with knowledge of the situation.
The policy applies to hybrid workers, which make up the majority of the bank’s 240,000 employees, said the people, who declined to be identified.

Citigroup told most of its employees that they can work remotely the final two weeks of December, CNBC has learned.
Workers can log in remotely from anywhere in their country of employment from Monday to Dec. 29, a Friday, making this week the last in-person experience this year for many staffers, according to people with knowledge of the situation.

The policy applies to hybrid workers, which make up the majority of the bank’s 240,000 employees, said the people, who declined to be identified.
Unlike last year, when the perk was introduced, employees are on edge over CEO Jane Fraser’s sweeping corporate reorganization, and some expressed concern over whether their jobs will still exist next year. Citigroup has said that Fraser’s review of the third-biggest U.S. bank by assets will be complete by the end of March.
The project, known internally by its code name Bora Bora, has already resulted in executive departures and the shuttering of the firm’s municipal bond business. Citigroup will disclose severance expenses tied to the project in January and again in April, the bank has said.
“This past year has been one of significant change across the firm, and as we approach the end of 2023, we look forward to this special time of year,” Citigroup’s human resources chief said last week in a staff memo announcing the remote policy.
“We hope that you will enjoy a break from commuting while continuing to stay focused on closing out the year,” the HR chief said.

Read more: Citigroup considers deep job cuts for CEO Jane Fraser’s overhaul, called ‘Project Bora Bora’Don’t miss these stories from CNBC PRO: More

Scammers may try to dupe people expecting a package with fake shipping and delivery notifications, the Federal Trade Commission warned.
Thieves can use them to steal money and sensitive personal information.
According to one estimate, about 82 million parcels per day will ship during the peak holiday season.

Andresr | E+ | Getty Images

Are you expecting a package delivery this holiday season?
If so, scammers may try to dupe you with bogus emails or text messages about a shipment to steal your personal information, the Federal Trade Commission warned in a consumer alert.

People who buy items online typically get several notifications related to that purchase, such as order, shipping and delivery confirmations.
But scammers send seemingly identical notes: They may send messages about a missed delivery attempt, urging you to click a link to reschedule delivery, according to the FTC. The scammers might also say an item is ready to ship but the buyer needs to update their shipping preferences.
More from Personal Finance:How this 77-year-old widow lost $661,000 in a common tech scamQR codes may be a gateway to identity theft, FTC warns’Phantom hacker’ scams that target seniors’ savings are on the rise, FBI says
These con artists try to coax people to click fake website links, where unsuspecting victims may enter their personal or financial information, the FTC said.
“It’ll capture all the information you enter,” Alvaro Puig, a consumer education specialist, wrote in the alert. “The link could also install harmful malware on your phone or computer that steals your information.”

Usernames and passwords to online banking, email or social media accounts may be compromised, he said. Scammers can use that data to steal a victim’s identification and open new accounts in their name.
Such digital frauds happens all year round, but people may be especially susceptible during the holidays, when shippers are expected to send about 82 million parcels a day, according to ShipMatrix.

To protect yourself, don’t click on links in messages about unexpected package deliveries, the FTC warns.
Further, if you think the message may be legitimate, don’t contact the shipper via information provided in the note. Reach out via a website or phone number you know is real. Look up delivery status on the site where you bought the item, according to the FTC.Don’t miss these stories from CNBC PRO: More