Finance

ALTHOUGH HIS bill has no chance of becoming law, Jared Golden, a congressman from Maine, delivered an important message last month when he introduced legislation to impose a 10% tariff on all imports into America. It is not just that Mr Golden is the author of the first formal attempt to act on Donald Trump’s proposal for a universal tariff. It is that Mr Golden is a Democrat. His bill is an indication of how tariffs, long seen as an obsolete tool of economic policy, have gained respectability across much of the political spectrum in America. More

EIGHT-THIRTY in the morning on the first Friday of every month is a special time for bond traders: it’s when America’s Bureau of Labour Statistics usually releases its monthly jobs data. Despite the vast sums that some hedge funds spend on alternative data, landmark releases like the employment report or the consumer-price index (CPI) can still convulse markets. When the September payrolls numbers, released on October 4th, blew past expectations, bond yields jumped by eight basis points (0.08 percentage points). Stocks spiked, too, though the move was short-lived. More

Everybody loves a league table. Across areas as varied as sports, education and consumer goods, competitive rankings have a magnetic appeal. The question of what or who rose, fell or clinched the top spot can lend a sense of drama to even the most strait-laced subjects. More

India’s battle with pollution has gone literal. To clean up Delhi’s filthy air, officials now routinely deploy “anti-smog” guns across the capital. The band-aid solution reflects desperation: air pollution, India’s public-health enemy number one, kills around 2m people a year. Recent research, however, suggests that it may be vulnerable to a more abstract weapon: market forces. More

Japanese convenience retailer Seven & i Holdings slashed its earnings forecasts for the fiscal year ending February 2025.
The owner of 7-Eleven stores said it will set up an intermediate holding company for its supermarket food business, specialty store and other businesses, amid growing pressure from investors to trim down its large business portfolios.

A customer is seen inside a 7-Eleven convenience store along a street in central Tokyo on September 9, 2024.  
Richard A. Brooks | Afp | Getty Images

Japanese convenience retailer Seven & i Holdings slashed its earnings forecasts and pressed ahead with restructuring plans that include spinning off non-core businesses into a standalone subsidiary.
The company slashed its profit forecast for the fiscal year ending February 2025 and now expects net income of 163 billion yen ($1.09 billion), a 44.4% reduction from its prior forecast of 293 billion yen. The reduction comes as it reported first-half net profit of 52.24 billion yen on 6.04 trillion yen in revenue. While sales came in higher than forecast, profits significantly below its own guidance for 111 billion yen.

Seven & i said it saw fewer customers at its overseas convenience stores as they took a “more prudent approach to consumption.” The company noted it recorded a charge of 45.88 billion yen related to its spin-off of Ito-Yokado Online Supermarket.
In a separate filing, the owner of 7-Eleven said it will set up an intermediate holding company for its supermarket food business, specialty store and other businesses, amid growing pressure from investors to trim down its portfolio.
The restructuring, which would consolidate 31 units, comes as the Japanese retail group resists a takeover attempt by Canada’s Alimentation Couche-Tard.
In September, Seven & i rejected the initial takeover offer of $14.86 per share, claiming that the bid was “not in the best interest” of its shareholders and stakeholders and also cited U.S. antitrust concerns.
After receiving that proposal, Seven & i sought and obtained a new designation as “core business” in Japan. Under Japan’s Foreign Exchange and Foreign Trade Act, foreign entities need to notify the government and submit to a national security review if they are buying a 1% stake or more in a designated company.

Revised offer

Seven & i confirmed Wednesday that it received a revised bid from ACT, but did not disclose further details. Bloomberg previously reported that the Canadian operator of Circle-K stores had raised its offer by around 20% to $18.19 per share, which would value Seven and i at 7 trillion Japanese yen. If finalized, the deal could become the biggest-ever foreign takeover of a Japanese company.

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Seven & i Holdings

It’s “entirely possible” that ACT’s buyout bid to turn into a hostile takeover attempt, Nicholas Smith, a Japan strategist at CLSA told CNBC’s “Squawk Box Asia” on Thursday. A hostile takeover occurs when an acquiring company attempts to gain control of the target company against the wishes of its management and board of directors.
“We’ve had a lot of problems with poison pills in Japan in recent years, and the legal structure is extremely opaque,” he added. Companies trying to shake off an acquirer may opt to deploy a “poison pill” by issuing additional stock options to dilute the attempted acquirer’s stake.
However, “an outright hostile tender offer would be highly unlikely,” in the view of Jamie Halse, founder and managing director of Senjin Capital, as no banks would be willing to provide the financing.
That said, if the offer gets to a “sufficiently attractive level,” he said it may be difficult for the board to continue to reject it.
“Shareholders are likely already frustrated that no further negotiations have taken place despite the increase in the offer price,” he said, adding that an activist investor may seek to “harness those frustrations” and “effect a change in the board’s composition.”

Seven & i shares were traded at 2,325 Japanese yen as of Thursday close. The Tokyo-listed shares have surged over 33% since the Canadian company’s buyout interest became public in August.
ACT has about 16,800 stores globally, far fewer than Seven & i Holdings’ approximately 85,800 stores.
The newly revised offer indicates ACT leaders are “committed,” Jesper Koll, head of Japan at Monex Group, told CNBC via email. He also pointed out that the new offer price suggests a 53% premium to where shares were trading before the initial offer.
“The money they offer is good, but there is more at stake than just numbers,” Koll said.
“I really can’t see ACT revising up its price tag,” Amir Anvarzadeh, a Japan equity market strategist at Asymmetric Advisors, told CNBC, “the pressure is on Seven & i management to prove that they can speed things up and stay independent.” More

Ripple said it is launching a slew of features aimed at helping banks and fintechs store digital tokens — as part of a broader push into crypto custody.
Crypto custody, a type of service that helps clients crypto assets, is a nascent business for Ripple, which has consolidated its efforts under a single brand called Ripple Custody.
Ripple is primarily known for the XRP cryptocurrency and RippleNet, a distributed interbank payment settlement platform.

Jakub Porzycki | Nurphoto | Getty Images

U.S. blockchain startup Ripple made a major foray into crypto custody on Thursday, launching new services aimed at helping banks and financial technology firms to store digital assets on behalf of clients.

The San Francisco-based company told CNBC it is debuting a slew of features to enable its banking and fintech clientele to keep and maintain digital tokens — as part of a broader push into custody, a nascent business for Ripple under its recently formed Ripple Custody division.
These features include pre-configured operational and policy settings, integration with Ripple’s XRP Ledger blockchain platform, monitoring of anti-money laundering risks to maintain compliance, and a new user interface that’s easier to use and engage.
The move will help Ripple, which is primarily known for the XRP cryptocurrency and its RippleNet platform, to diversify beyond its core payment settlement business. RippleNet is a messaging platform based on blockchain — the technology that underpins cryptocurrencies such as bitcoin — which lets banks share updates on the status of money movements in a global, distributed network.
Thursday’s development marks Ripple’s first significant move to consolidate its custody products under one brand, Ripple Custody, and take on a slew of companies that already offer products and services in this space, such as Coinbase, Gemini, and Fireblocks.

Custodian

Custody is a nascent but fast-growing space within the digital asset space. Custodians play a key role in the crypto market, helping clients safeguard private keys, which are the alphanumeric codes required to unlock access to digital assets and authorize transactions.

Custodians don’t just store crypto. They also help with payments and settlements, trading, and ensuring regulatory compliance with global laws governing digital currencies. The crypto custody market is forecast to reach at least $16 trillion by 2030, according to the Boston Consulting Group.
Ripple said that custody is one of the fastest-growing areas for the startup, with Ripple Custody posting customer growth of over 250% year-over-year growth this year and operating in seven countries. It counts the likes of HSBC, the Swiss arm of BBVA, Societe Generale and DBS as clients.
Gambling that a growing number of real-world assets will become tradable as digital tokens in the future, Ripple said it will allow customers of its custody services to tokenize real-world assets — think fiat currencies, commodities like gold and oil or real estate — by using XRP Ledger.
Ripple said that the integration with its XRP Ledger tech would give firms access to its own native decentralized exchange, a platform that helps match buyers and sellers of a range of digital assets without any middlemen involved for faster, low-fee trading.
“With new features, Ripple Custody is expanding its capabilities to better serve high-growth crypto and fintech businesses with secure and scalable digital asset custody,” Aaron Slettehaugh, senior vice president of product at Ripple, said in a statement shared with CNBC on Thursday.
Last year, Ripple acquired Metaco, a firm that helps other entities store and manage their crypto, in a bid to boost its nascent crypto custody business. The company this year also acquired Standard Custody & Trust Company, another crypto custody firm, to further bolster its efforts.
Ripple’s diversification bid comes at a tenuous time for XRP. Last week, the price of the XRP cryptocurrency tumbled sharply after the U.S. Securities and Exchange Commission filed to appeal a 2023 court ruling that the token should not be considered a security when sold to retail investors.
As the largest holder of XRP coins, Ripple has long battled the SEC over allegations that it sold the cryptocurrency in an illegal securities offering. Ripple denies the cryptocurrency should be considered a security. More

Federal Reserve officials at their September meeting agreed to cut interest rates but were unsure how aggressive to get.
Minutes released Wednesday indicated that “a substantial majority of participants” favored cutting by half a percentage point, through some expressed misgivings about going that large.
Since the meeting, economic indicators have showed that the labor market is perhaps stronger than officials favoring the 50 basis point move had expected.

WASHINGTON – Federal Reserve officials at their September meeting agreed to cut interest rates but were unsure how aggressive to get, ultimately deciding on a half percentage point move in an effort to balance confidence on inflation with worries over the labor market, according to minutes released Wednesday.
The meeting summary detailed reasons that policymakers decided to approve a jumbo rate cut of 50 basis points for the first time in more than four years, and showed members divided over the economic outlook.

Some officials hoped for a smaller, quarter percentage point reduction as they sought assurance that inflation was moving sustainably lower and were less worried about the jobs picture.
Ultimately, only one Federal Open Market Committee member, Governor Michelle Bowman, voted against the half-point cut, saying she would have preferred a quarter point. But the minutes indicated that others also favored a smaller move. It was the first time a governor had dissented on an interest rate vote since 2005 for a Fed known for its unity on monetary policy.
“Some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision,” the minutes stated.
“Several participants noted that a 25 basis point reduction would be in line with a gradual path of policy normalization that would allow policymakers time to assess the degree of policy restrictiveness as the economy evolved,” the document added. “A few participants also added that a 25 basis point move could signal a more predictable path of policy normalization.”
Markets moved little following the release, with major averages continuing on pace for big gains.

Since the meeting, economic indicators have showed that the labor market is perhaps stronger than officials favoring the 50 basis point move had expected.
In September, nonfarm payrolls increased by 254,000, much more than expected, while the unemployment rate dipped to 4.1%.
The data has helped cement expectations that while the Fed likely is in the early days of an easing cycle, future cuts likely would not be as aggressive as the September move. Chair Jerome Powell and other Fed officials in recent days have backed the expected 50 basis points in reductions by the end of 2024 as indicated by the “dot plot” unofficial forecast released after the September meeting.
The minutes noted that the vote to approve the 50 basis point cut came “in light of the progress on inflation and the balance of risks” against the labor market. The minutes noted that “a substantial majority of participants” favored the larger move, without specifying how many were opposed. The term “participants” suggests involvement of the full FOMC rather than just the 12 voters.
The minutes also noted that some members favored a reduction at the July meeting that never materialized.
Though the document was more detailed about the debate over whether to approve the 25 basis point cut, there was not as much information about why voters supported the larger move.
At his post-meeting news conference, Powell used the term “recalibration” to sum up the decision to cut, and the term also appears in the minutes.
“Participants emphasized that it was important to communicate that the recalibration of the stance of policy at this meeting should not be interpreted as evidence of a less favorable economic outlook or as a signal that the pace of policy easing would be more rapid than participants’ assessments of the appropriate path,” the minutes stated.
Such a recalibration would bring policy “into better alignment with recent indicators of inflation and the labor market.” Supporters of the 50 basis point cut “also emphasized that such a move would help sustain the strength in the economy and the labor market while continuing to promote progress on inflation, and would reflect the balance of risks.”
Under normal circumstances, the Fed prefers to cut in quarter-point increments. Previously, the central bank moved by half a point only during Covid and, before that, the 2008 financial crisis.
Market pricing is pointing to the fed funds rate ending 2025 in the 3.25%-3.5% range, about in line with the median projection of a 3.4% rate, according to the CME Group’s FedWatch. Futures markets previously had been indicating a more aggressive path and in fact now are pricing in about a 1-in-5 chance that the Fed does not cut at its Nov. 6-7 meeting.
The bond market, though, has been acting differently. Since the Fed meeting, both the 10- and 2-year Treasury yields have surged about 40 basis points.

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The average American is living longer.
But older people live fewer years in good health. Their “health span” is shrinking.
Chronic medical conditions are generally associated with higher healthcare expenses.

Momo Productions | Digitalvision | Getty Images

First, the good news: Americans are living longer than they used to.
Now, the bad news: Older Americans are spending more years in poor health. That dynamic often comes with negative financial consequences, medical and financial experts say.

Since 1960, the average U.S. life span has increased to 77.5 from roughly 70 years old, according to the Centers for Disease Control and Prevention.
But “health spans” are simultaneously shrinking.
A health span is the number of years older people spend in fundamentally good health, said Susan Roberts, a professor of medicine and epidemiology and senior associate dean for foundational research at Dartmouth College.

Today, the average person spends about 10 years with chronic ailments like diabetes, cancer, arthritis, cardiovascular disease, dementia, cataracts or osteoporosis — roughly double the duration in the 1960s, Roberts said.
As a result, there’s a “widening gap” between one’s life and health spans, she said.

This is because medicine has gotten better at keeping sick people alive, though not necessarily treating them, Roberts said. Obesity, which is an underlying cause of many chronic diseases, is also more widespread, she said. Obesity affects 42% of U.S. adults, according to CDC data released in 2021.

How health impacts wealth

Fatcamera | E+ | Getty Images

The concept of a health span is “increasingly important” for a household’s finances, said Stacy Francis, a certified financial planner based in New York and member of CNBC’s Advisor Council.
Adults are spending more time “living a life where they’re not in their best state,” said Francis, president and CEO of Francis Financial. “And it results in significant expenses.”
About 90% of the nation’s $4.5 trillion in annual health care costs are for people with chronic diseases and mental health conditions, according to the CDC.
Medical costs get “worse and worse” once people have a chronic ailment, Roberts said.
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The average 65-year-old retiring this year will spend about $165,000 in out-of-pocket health and medical expenses in retirement, up 5% from 2023, according to Fidelity Investments.
Out-of-pocket treatment costs and early retirements due to poor health are two big ways chronic conditions impact households financially, experts said.
Early retirement might mean claiming Social Security earlier than expected — perhaps resulting in a lower monthly benefit, said Carolyn McClanahan, a physician and CFP based in Jacksonville, Florida.
“A person’s health directly impacts their wealth — and this connection becomes even more acute as people age,” Susan Silberman, senior director of research and evaluation at the National Council on Aging, said in a 2022 briefing.

Of course, this isn’t to say healthy people avoid significant medical expenses.
They may ultimately pay more over the long term relative to an unhealthy individual if they need long-term care, for example, which can be costly and more likely with age, said McClanahan, the founder of Life Planning Partners and a member of CNBC’s Advisor Council.
Plus, healthy people experience more “go-go” years, meaning they can travel and spend on fun things, she said.

Invest in yourself

“When you are in your 40s and 50s, it’s the point of no return,” McClanahan said.
If adults don’t start tending to their health by this age, they become more susceptible to chronic diseases like diabetes and high blood pressure, which can lead to sudden issues like strokes and heart attacks, she said.
Treat purchases of healthy food, gym memberships or exercise classes as an investment in yourself, said Francis. Prioritize the spending on your health and, if it feels like too much money, try to cut back on spending that “doesn’t increase your health span,” she said.

“I think of that like an investment I put in my 401(k),” Francis said.
“Those extra dollars … will add years to your life and you’ll make up for it,” she said.
More than half of people can reverse a diabetes diagnosis by losing 10% of their weight within the first seven years of that diagnosis, Roberts said.
The “biggest tragedy” of chronic ailments is that “they’re preventable,” Roberts said. A few dietary tweaks — eliminating sugary drinks like soda and juice, and eating small, healthy snacks like an apple — can make a “dramatic difference,” she said.
“Learning to like healthy foods is actually not that difficult,” Roberts said. “Practice it for a couple weeks and be patient with yourself.” More