Finance

Coinbase is confident that a U.S. bitcoin exchange-traded fund will be approved by the Securities and Exchange Commission, the company’s chief legal officer, Paul Grewal, told CNBC.
He didn’t say when that’s likely to happen, and added the caveat that any decision would ultimately be up to the SEC.
But, Grewal said, it’s likely now that the SEC will approve a bitcoin ETF soon, highlighting the regulator’s failure in court to block Grayscale from converting its GBTC bitcoin fund into an ETF.

Coinbase is confident that a U.S. bitcoin exchange-traded fund will be approved by the U.S. Securities and Exchange Commission, the company’s chief legal officer, Paul Grewal, told CNBC.
“I’m quite hopeful that these [ETF] applications will be granted, if only because they should be granted under the law,” Grewal said in an interview with CNBC’s Arjun Kharpal.

The SEC was recently dealt a major court setback when a judge ruled that the regulator had no basis to deny crypto-focused asset manager Grayscale’s bid to turn its huge GBTC bitcoin fund into an ETF.
The SEC last week declined to appeal that ruling by a key deadline, likely paving the way for a bitcoin-related ETF to be approved in the coming months.
“I think that the firms that have stepped forward with robust proposals for these products and services are among some of the biggest blue chips in financial services,” Grewal added.
“So that, I think, suggests that we will see progress there in short order.”
He didn’t say when that’s likely to happen, and added the caveat that any decision would ultimately be up to the SEC.

But, Grewal said, it’s likely now that the SEC will approve a bitcoin ETF soon, highlighting the regulator’s failure in court to block Grayscale from converting its GBTC bitcoin fund into an ETF.

SAN ANSELMO, CALIFORNIA – JUNE 06: In this photo illustration, the Coinbase logo is displayed on a screen on June 06, 2023 in San Anselmo, California. The Securities And Exchange Commission has filed a lawsuit against cryptocurrency exchange Coinbase for allegedly violating securities laws by acting as an exchange, a broker and a clearing agency without registering with the Securities and Exchange Commission. (Photo Illustration by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images

“I think that, after the U.S. Court of Appeals made clear that the SEC could not reject these applications on arbitrary or capricious basis, we’re going to see the commission fulfill its responsibilities. I’m quite confident of that.”
A bitcoin ETF would give investors a way to own bitcoin without having to make a direct purchase from an exchange.
That could be more appealing to retail investors looking to gain exposure to bitcoin without having to actually own the underlying asset.
Coinbase would likely benefit from any bitcoin ETF that is ultimately approved. The company, the largest crypto exchange in the United States, is a common stock held in portfolios designed to give investors exposure to crypto.
Not all is rosy in Grayscale’s bid to turn GBTC into an ETF, however.
The asset management firm’s parent company, Digital Currency Group, along with crypto exchange Gemini and DCG subsidiary Genesis, were accused in a lawsuit from New York’s attorney general of defrauding investors of more than $1 billion.
Still, Grewal sounded a positive note on the prospect of additional bitcoin ETFs being approved — sooner rather than later.
“We think that other ETFs are going to be coming online soon enough as the SEC follows the law and is required to apply the law in a neutral way to the applications that are pending,” he said.

Bitcoin has risen about 72% in the year to date, in a comeback by stealth for the world’s biggest digital currency after huge declines in 2022.
There’s been greater investor demand for the token in recent months, as the market reacts to prospect of the Federal Reserve ending its campaign of persistent interest rate rises, and as anticipation builds around the upcoming bitcoin “halving” event, which will see rewards to bitcoin miners reduced by half, thereby limiting the coin’s supply.
Still, trading volumes have declined, as retail investors have become uninterested in engaging in the market in light of a lack of volatility and in response to severe wounds suffered by once-large industry players like FTX, BlockFi and Three Arrows Capital.
FTX collapsed into bankruptcy last year after investors fled the platform en masse because of concerns over its liquidity. The company and its founder, Sam Bankman-Fried, are accused of defrauding investors in a multibillion-dollar scheme. Bankman-Fried is standing trial over these allegations and has pleaded not guilty.
Addressing the trial, Grewal said he was “quite encouraged and quite optimistic that a number of the bad actors in this space are being held to account through criminal trials and through aggressive regulatory actions.”
“We are quite excited that there are a number of developments we think that are just around the corner, or underway even as we speak, that will bring back investor and consumer interest in crypto,” Grewal added. More

Activision Blizzard, Electronic Arts, Japan’s Nintendo and other public gaming companies currently hold $45.1 billion in cash and cash equivalents, according venture capital firm Konvoy.
Konvoy expects Microsoft’s $69 billion Activision deal will likely lead to further mergers and acquisition activity and create a new generation of gaming companies.
Venture capital investment into video game firms slumped 64% year over year in the third quarter of 2023, according to Konvoy’s report, which was shared exclusively with CNBC.

Gamers play the video game “Star Wars Battlefront II” during the “Paris Games Week” on Oct. 31, 2017.

Publicly listed gaming companies are sitting on a $45 billion pile of cash and cash equivalents — and that could lead to greater consolidation in the $188 billion video games market, according to a new report from venture capital firm Konvoy, which was shared exclusively with CNBC.
The likes of Activision Blizzard, Electronic Arts, Singapore’s Sea, Japan’s Nintendo and Bandai Namco, South Korea’s Nexon, and China’s NetEase, currently hold $45.1 billion in cash and cash equivalents, according Konvoy, which cited these companies’ latest public reports.

Public gaming companies currently hold cash and cash equivalents of $45.1 billion, according to a report from venture capital firm Konvoy.

That would give them more than enough financial firepower to look at potential acquisition targets that could help them build out their intellectual property and products.
In particular, gaming firms are looking to keep gamers more engaged for longer with live-service games that add more content over time and paid subscription packages that offer a certain amount of free games and access to cloud gaming, or the ability to play games via the cloud rather than downloading them to their machines.
Publicly listed gaming companies had a fairly rosy year in 2023, on the whole.
The VanEck Video Gaming and eSports ETF, which seeks to track MVIS Global Video Gaming & eSports Index, has climbed 20% in the year to date, according to Konvoy. The blue-chip S&P 500 index, by contrast, has climbed close to 12% year to date.

The performance of public gaming ETFs since the start of 2023.

The Global X Video Games & Esports ETF, which aims to track a modified market-cap-weighted global index of companies in video games and esports, hasn’t performed as well, slipping 0.4% since the start of 2023.

Big Tech eyes video games

Big Tech firms are also primed with plenty of cash to consider more gaming deals, according to Konvoy.
The VC firm said that the world’s biggest tech firms which includes Amazon, Microsoft, Google, Apple, Meta, Netflix, China’s Tencent, and Japan’s Sony, have a combined $229.4 billion of cash on their balance sheets to deploy on potential deals.

Josh Chapman, a partner at Konvoy, said the company expects the Microsoft-Activision deal — which saw the Redmond, Washington-based technology giant pay $69 billion for U.S. game publisher Activision Blizzard — would likely lead to further mergers and acquisition activity and create a new generation of gaming companies.
“As active gaming investors, we believe that gamers and gaming startups stand to benefit from the deal as it improves the value-proposition for gamers and leads to a vibrant M&A environment for other deals to get closed,” Chapman told CNBC in emailed comments.
Cloud gaming is a key area for Microsoft as it brings Activision into its growing portfolio of game publishers. The company is pushing its cloud gaming service, which does away with the need for traditional consoles likes its Xbox Series X or Sony’s PlayStation 5, with its Xbox Game Pass subscription product.
Chapman said this would lead to “new opportunities for emerging game developers, infrastructure companies and gaming platforms.”
Microsoft’s blockbuster acquisition of Activision Blizzard was approved by the U.K.’s Competition and Markets Authority earlier this month.
The deal, valued at $69 billion, will see Microsoft gain ownership of some of the most lucrative properties in video games, including the massive Call of Duty franchise, Candy Crush, Crash Bandicoot, Warcraft, Diablo, and Overwatch.

VC deal slump

Venture capital investment into video game firms slumped 64% year over year in the third quarter of 2023, according to Konvoy’s report.

Total venture funding into the video games industry in the third quarter of 2023 fell 9% quarter-over-quarter, to $454 million.

It’s a sign of how, despite the boost to the industry from Microsoft’s landmark deal, the boom times for the industry in 2020 and 2021 have ebbed.
Gaming startups raised a combined $454 million globally for the three months to September, down 9% quarter over quarter and more than 64% from the same three-month period a year ago.

Still, Konvoy’s Chapman anticipates the picture for gaming VCs and startups will look brighter next year, as grim venture investing conditions start to improve — however, funding for gaming firms has returned to a ” sustainable new normal” that will continue at the current pace for the next few years.
“As the global venture market rebounds we expect gaming, which was somewhat insulated from the initial impact of the economic downturn, to follow,” Chapman told CNBC. “We anticipate gaming VC funding to see a slight uptick over the next few quarters, when the industry will grow at a similar rate to before the pandemic.”
“Right now, VC deal volume and funding are comparable to pre-pandemic levels, and while we may not see the exponential growth of 2021, we’re excited to see a stable venture funding market in gaming for continued value creation in the industry.”

Tougher times

Video game publishers have been grappling with a deterioration of macroeconomic conditions, with high inflation and rising interest rates denting consumer appetite for discretionary spending.
Whereas in 2020, when consumers were flush with cash thanks to easy monetary conditions, times have gotten tougher in 2022 and 2023 as central bankers have increased interest rates in a bid to stem rising prices.
Still, the video game player base continues to increase, with a worldwide player base of 3.381 million today, according to Konvoy.
The video game market is still massive, and is projected to reach $188 billion in overall sales in 2023, according to Konvoy. That figure is up a modest 3% from the previous year, when gaming sales totaled $183 billion. But growth has accelerated slightly from 2022, when gaming sales rose only 2%.
That came after the standout year of 2021.
Gaming revenue reached $180 billion that year, climbing more than 8% from $166 billion in 2020 I assume, according to Konvoy’s research.
In 2020, the industry saw even bigger growth — more than 9% year over year. That was when pandemic lockdowns were in full swing, and people had more time to spend playing video games indoors.
Konvoy is projecting long-term growth for the games industry in the coming years, though. The firm said that it expects a compound annual growth rate of 9% in the next five years, with the industry reaching a whopping $288 billion in overall sales by 2028.
WATCH: Bandai Namco Entertainment discusses the success of ‘Elden Ring’ More

Ahead of Siemens Energy’s fourth-quarter earnings, analysts at Kepler Cheuvreux suggested in a research note Tuesday that despite having already warned on profits, the company “remains vulnerable to large negative cashflow swings in the next fiscal year.”
Deutsche Bank earlier this week slashed its 12-month share price forecast for Danish energy giant Ørsted by 36%, citing supplier delays, lower tax credits and rising rates.
ONYX Insight, which monitors wind turbines and tracks over 14,000 across 30 countries, revealed in a report Tuesday that supply chains remain the greatest challenge to operations across the sector.

A Siemens Gamesa blade factory on the banks of the River Humber in Hull, England on October 11, 2021.
PAUL ELLIS | AFP | Getty Images

As the biggest players in wind energy gear up to report quarterly earnings, supply-chain reliability issues are front and center for both stock analysts and industry leaders.
Siemens Energy made the headlines earlier this year when it scrapped its profit forecast and warned that costly failures at wind turbine subsidiary Siemens Gamesa could drag on for years.

It sparked concerns about wider problems across the industry and thrust Europe’s wind energy giants’ earnings into the spotlight.
Siemens Energy is set to report its fiscal fourth-quarter results on Nov. 15. Its shares are currently down more than 35% year-to-date.
Aside from the turbine problems, the German energy giant posted orders of around 14.9 billion euros ($15.7 billion) for its third quarter, a more-than 50% increase from the previous year, primarily driven by large orders at Siemens Gamesa and Grid Technologies. Yet the 2.2 billion euro charge due to Gamesa’s quality issues prompted Siemens Energy to forecast a net loss for the fiscal year of 4.5 billion euros.
Ahead of its fourth-quarter earnings, analysts at Kepler Cheuvreux suggested in a research note Tuesday that despite having already warned on profits, the company “remains vulnerable to large negative cashflow swings in the next fiscal year.”

“We expect Siemens Gamesa to suffer very weak order intake in H1, which will combine with extensive delivery delays and rising customer penalty payments. Challenges at Siemens Gamesa will continue to overshadow resilience in the group’s other divisions,” they added.

Morgan Stanley cut its price target for Siemens Energy from 20 euros per share to 18 euros per share, but retains an overweight long-term strategic position on the company’s stock.
“Valuation for Siemens Energy is currently factoring in a negative value for the Gamesa division, which we believe may have been over penalized,” Morgan Stanley capital goods analyst Ben Uglow said in a research note Monday.
“While we acknowledge the low visibility on Gamesa margin trajectory and that rebuilding investor confidence will take time, we remain Overweight on undemanding valuation and good fundamentals of the Gas & Grid businesses.”
Elsewhere, Deutsche Bank earlier this week slashed its 12-month share price forecast for Danish wind energy producer Ørsted by 36% ahead of its interim earnings report on Nov. 1. The stock has already halved in value so far this year.
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Deutsche Bank just cut its price target on nearly 30 global stocks ahead of earnings — and upgraded 1

Deutsche had previously highlighted challenges in the wind turbine industry including supplier delays, lower tax credits and rising rates. However, Ørsted’s share price tanked further earlier this year when it raised the possibility of a 2.1-billion-euro impairment charge in its U.S. offshore wind portfolio.
Meanwhile, Danish wind turbine manufacturer Vestas — despite continuing to bag significant orders — has seen its shares plunge by around 30% year-to-date as reliability concerns plague the wider industry. Vestas publishes its interim financial report for the third quarter on Nov. 8.
Supply chain worries
ONYX Insight, which monitors wind turbines and tracks over 14,000 across 30 countries, revealed in a report Tuesday that supply chains remain the greatest challenge to the sector, with reliability not far behind.
The analytics firm, which is owned by British energy giant BP, interviewed senior personnel at over 40 owners and operators of wind turbines around the world in order to gauge the mood of industry leaders, and found that 57% cited the supply chain as the main obstacle to their operations.
ONYX Chief Commercial Officer Ashley Crowther said the lingering impacts of Covid-19 on manufacturing had just begun to heal — and then Russia’s invasion of Ukraine and the subsequent surge in inflation hit.

“Survey participants are now citing delays on new projects due to longer lead times for supply of new turbines and significant price increases,” Crowther said in the report.
“This is in line with what OEMs have told their investors, for example Vestas noting in their 2022 annual report they ‘increased our average selling prices of our wind energy solutions by 29%’. Similarly for major components, particularly main bearings on newer turbines with large rotor diameters, long delays are leaving turbines offline for extended periods.”
Although supply chain issues are creating problems for operators, the most direct impact has been on OEMs like Siemens Gamesa and Vestas, Crowther noted, as has been evident in recent financial results.
“Major western OEMs have recently reported losses or profit warnings and announced major restructuring projects in order to address the challenges they are facing. Some are even re-thinking their approach to the aftermarket which was always seen as the most profitable part of the business,” he added.
Reliability issues
Those surveyed by ONYX also expressed reliability concerns, with 69% expecting more reliability issues due to aging assets and 56% seeing problems associated with new turbine technology. Just 22% expected fewer reliability issues due to new turbine technology improvements.
“As the sector matures, turbines are getting older and the failure rate of electromechanical systems are increasing with age,” Crowther noted.
“Likewise, the initial operating period of newer turbines are seeing a rash of failures due to shorter development cycles, new turbine designs, and a squeeze on turbine prices. This is resulting in machines that are not durable enough.”
During an initial boom in the wind industry a number of years ago, OEMs faced huge market demand and, in turn, created a variety of turbine designs delivered on short cycles to a customer base seeking to generate more energy with greater efficiency at lower cost, Crowther explained.

“Fast-forward to the present and between the perfect storm of supply chain issues and too many turbine designs to support, OEMs have been losing significant amounts of money, including those paid out in liquidated damages (LDs),” he said.
“Manufacturers have been locked into a price competition spiral, attempting to produce larger turbines for more competitive pricing. But with bigger turbines produced in shorter production cycles, it’s no surprise that manufacturing quality has diminished.” More

Even as the economy has surprised forecasters with its resilience, lenders have cut headcount or announced plans to do so, with the key exception being JPMorgan Chase.
The next five largest U.S. banks cut a combined 20,000 positions so far this year, according to company filings.
A key factor driving the cuts is that job-hopping in finance slowed drastically from earlier years, leaving banks with more people than they expected.

The largest American banks have been quietly laying off workers all year — and some of the deepest cuts are yet to come.
Even as the economy has surprised forecasters with its resilience, lenders have cut headcount or announced plans to do so, with the key exception being JPMorgan Chase, the biggest and most profitable U.S. bank.

Pressured by the impact of higher interest rates on the mortgage business, Wall Street deal-making and funding costs, the next five largest U.S. banks have cut a combined 20,000 positions so far this year, according to company filings.
The moves come after a two-year hiring boom during the Covid pandemic, fueled by a surge in Wall Street activity. That subsided after the Federal Reserve began raising interest rates last year to cool an overheated economy, and banks found themselves suddenly overstaffed for an environment in which fewer consumers sought out mortgages and fewer corporations issued debt or bought competitors.

“Banks are cutting costs where they can because things are really uncertain next year,” Chris Marinac, research director at Janney Montgomery Scott, said in a phone interview.
Job losses in the financial industry could pressure the broader U.S. labor market in 2024. Faced with rising defaults on corporate and consumer loans, lenders are poised to make deeper cuts next year, said Marinac.
“They need to find levers to keep earnings from falling further and to free up money for provisions as more loans go bad,” he said. “By the time we roll into January, you’ll hear a lot of companies talking about this.”

Deepest cuts

Banks disclose total headcount numbers every quarter. While the aggregate figures mask the hiring and firing going on beneath the surface, they are informative.
The deepest reductions have been at Wells Fargo and Goldman Sachs, institutions that are wrestling with revenue declines in key businesses. They each have cut roughly 5% of their workforce so far this year.
At Wells Fargo, job cuts came after the bank announced a strategic shift away from the mortgage business in January. And even though the bank cut 50,000 employees in the past three years as part of CEO Charlie Scharf’s cost-cutting plan, the firm isn’t done shrinking headcount, executives said Friday.
There are “very few parts of the company” that will be spared from cuts, said CFO Mike Santomassimo.
“We still have additional opportunities to reduce headcount,” he told analysts. “Attrition has remained low, which will likely result in additional severance expense for actions in 2024.”

Goldman firings

Meanwhile, after several rounds of cuts in the past year, Goldman executives said that they had “right-sized” the bank and don’t expect another mass layoff like the one enacted in January.
But headcount is still headed down at the New York-based bank. Last year, Goldman brought back annual performance reviews where people deemed low performers are cut. In the coming weeks, the bank will terminate around 1% or 2% of its employees, according to a person with knowledge of the plans.
Headcount will also drift lower because of Goldman’s pivot away from consumer finance; the firm agreed to sell two businesses in deals that will close in coming months, a wealth management unit and fintech lender GreenSky.

Pedestrians walk along Wall Street near the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images

A key factor driving the cuts is that job-hopping in finance slowed drastically from earlier years, leaving banks with more people than they expected.
“Attrition has been remarkably low, and that’s something that we’ve just got to work through,” Morgan Stanley CEO James Gorman said Wednesday. The bank has cut about 2% of its workforce this year amid a protracted slowdown in investment banking activity.
The aggregate figures obscure the hiring that banks are still doing. While headcount at Bank of America dipped 1.9% this year, the firm has hired 12,000 people so far, indicating that an even greater amount of people left their jobs.

Citigroup’s cuts

While Citigroup’s staff figures have been stable at 240,000 this year, there are significant changes afoot, CFO Mark Mason told analysts last week. The bank has already identified 7,000 job cuts linked to $600 million in “repositioning charges” disclosed so far this year.
CEO Jane Fraser’s latest plan to overhaul the bank’s corporate structure, as well as sales of overseas retail operations, will further lower headcount in coming quarters, executives said.
“As we continue to progress in those divestitures … we’ll see those heads come down,” Mason said.
Meanwhile, JPMorgan has been the industry’s outlier. The bank grew headcount by 5.1% this year as it expanded its branch network, invested aggressively in technology and acquired the failed regional lender First Republic, which added about 5,000 positions.
Even after its hiring spree, JPMorgan has more than 10,000 open positions, the company said.
But the bank appears to be the exception to the rule. Led by CEO Jamie Dimon since 2006, JPMorgan has best navigated the surging interest rate environment of the past year, managing to attract deposits and grow revenue while smaller rivals struggled. It’s the only one of the Big Six lenders whose shares have meaningfully climbed this year.  
“All these companies expanded year after year,” said Marinac. “You can easily see several more quarters where they go backwards, because there’s room to cut, and they have to find a way to survive.”

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– CNBC’s Gabriel Cortes contributed to this article. More

Federal Reserve Chairman Jerome Powell acknowledged recent signs of cooling inflation, but said Thursday that the central bank would be “resolute” in its commitment to its 2% mandate.
In a widely anticipated speech delivered to the Economic Club of New York, Powell evaded committing to a specific policy path but gave no indication that he was leaning toward a push higher for interest rates.

As Powell spoke, futures market traders erased any possibility of a rate hike in November and decreased the chances of a move even in December. He acknowledged the progress made toward bringing inflation back down to a manageable level but stressed vigilance in pursuing the central bank’s goals.
“Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said in prepared remarks. “We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters.”
“While the path is likely to be bumpy and take some time, my colleagues and I are united in our commitment to bringing inflation down sustainably to 2 percent,” Powell added.
The speech comes with questions over where the Fed heads from here after a succession of interest rate hikes aimed at cooling inflation. Stocks turned higher after Powell spoke and the 10-year Treasury yield backed off its highs for the session.
Powell said he doesn’t think rates are too high now.

“Does it feel like policy is too tight right now? I would have to say no,” he said. Still, he noted that “higher interest rates are difficult for everybody.”
Powell noted the progress made toward the Fed’s twin goals.

Federal Reserve Chairman Jerome Powell speaks during a meeting of the Economic Club of New York in New York City, U.S., October 19, 2023. 
Brendan Mcdermid | Reuters

In recent days, data has shown that while inflation remains well above the target rate, the pace of monthly increases has decelerated and the annual rate has slowed to 3.7% from more than 9% in June 2022.
“Incoming data over recent months show ongoing progress toward both of our dual mandate goals —maximum employment and stable prices,” he said.
The speech was delayed at the onset by protesters from the group Climate Defiance who charged the dais at the club’s dinner and held up a sign saying “Fed is burning” surrounded by the words “money, futures and planet.”
After a short delay, Powell noted the labor market and economic growth may need to slow to ultimately achieve the Fed’s goal.
“Still, the record suggests that a sustainable return to our 2 percent inflation goal is likely to require a period of below-trend growth and some further softening in labor market conditions,” Powell said.
Fed officials have been using interest rate hikes in part to try to level out a supply-demand imbalance in the jobs market. The Fed has raised rates 11 times since March 2022 for a total of 5.25 percentage points. Coming from the near-zero level for the fed funds rate, that has taken the benchmark rate to its highest level in some 22 years.
“We’re very far from the effective lower bound, and the economy is handling it just fine,” Powell said.
The comments come the same day initial jobless claims hit their lowest weekly level since early in 2023, indicating that the labor market is still tight and could exert upward pressure on inflation.
Robust job creation in September and a slow pace of layoffs could put progress on inflation at risk.
“Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy,” he said.
In recent days, other Fed officials have said they think the Fed can be patient from here. Even some members who favor tighter monetary policy have said they think the Fed can halt rate hikes at least for now while they watch the lagged impact the rate hikes are expected to have on the economy.
Markets widely expect the Fed to hold off on additional rate hikes, though there remain questions over when officials might begin cutting rates.
Powell was noncommittal on the future of policy.
Given the uncertainties and risks, and how far we have come, the Committee is proceeding carefully. We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks,” he said. More

Americans will soon need to apply for a travel authorization to visit 30 countries in Europe.
The application has a nonrefundable fee of 7 euros a person, or about $7.40.
Travelers must get the authorization via the European Travel Information and Authorisation System prior to their trip. It’s expected to be operational sometime in 2024.
The new system is meant as a security measure.

Vernazza, a village in Cinque Terre, Italy.
Mstudioimages | E+ | Getty Images

Americans will soon have to apply for a travel authorization to visit Europe, and failing to get one may ruin your next trip.
The requirement, slated to start in 2024, currently applies to 30 European nations, including popular destinations such as France, Germany, Greece, Italy, Portugal and Spain.

Travelers must apply for the travel authorization via the European Travel Information and Authorisation System, or ETIAS, prior to their trip.
The online application carries a nonrefundable fee of 7 euros a person, or $7.40 at prevailing exchange rates as of noon ET on Thursday. People under 18 years old or over 70 years old are exempt from payment.
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Europe is the top destination region for international travelers from the U.S., according to travel app Hopper. But Americans won’t be allowed to visit without the authorization.
“If you forget to do it, you won’t board the plane,” said Sofia Markovich, a travel advisor and founder of Sofia’s Travel.

Why Europe is requiring a travel authorization

Mstudioimages | E+ | Getty Images

The authorization isn’t a visa and doesn’t guarantee entry. Travelers with a valid visa don’t need the authorization.
In 2016, the European Commission proposed to establish the ETIAS to strengthen security checks on Americans and nationals from roughly 60 other nations who are able to visit Europe’s Schengen area without a visa.  
The new European system is similar to one the U.S. put in place in 2008.
“After 9/11, things changed in the world,” Markovich said. “It’s really about keeping things safe and knowing who comes in and who goes out.”

When travelers should apply

A couple walking around the Sagrada Familia church in Barcelona, Spain.
Jordi Salas | Moment | Getty Images

The good news: Travelers don’t have to do anything yet.
The European Union expects the ETIAS to be operational in 2024 but hasn’t set a firm rollout date. The program isn’t yet accepting applications.
“There is nothing anyone can do or needs to do now,” Sally French, a travel expert at NerdWallet, said. “But it’s something they need to keep tabs on.”
The requirement has already been delayed a few times and could be again, French said. It was initially meant to take effect in 2021 and then in 2023.

Most applications will be processed in minutes and within 96 hours at the latest, according to the EU. However, it can take up to an additional 30 days for travelers asked to provide extra information or documentation or do an interview with national authorities, the EU said.
“As soon as you make the booking, make sure you file for your ETIAS,” Markovich said.
The EU even strongly advises obtaining the travel authorization before buying tickets and booking hotels.
“Seven euros is small potatoes in the scheme or your European trip,” French said of the application fee. “You don’t want to have paid for the flights, hotels and tours, and realize you can’t take the trip because of this small step.”
The ETIAS authorization is valid for three years or until your passport expires, whichever comes first. Travelers with a valid ETIAS don’t need to apply for a new one each time they visit Europe.Don’t miss these CNBC PRO stories: More

Global fintech giant Airwallex said it has acquired MexPago, a rival payments company based out of Mexico, for an undisclosed sum.
The deal will help Airwallex, which is backed by the likes of Tencent and Li-Kashing, Hong Kong’s richest man, expand in the Americas.
Latin America is a particularly attractive spot for fintech companies, not least because of its high proportion of young people in the population.

Airwallex’s cofounders, from left to right, Xijing Dai, Lucy Liu, Jack Zhang and Max Li.

Global fintech giant Airwallex on Thursday said it has agreed to acquire MexPago, a rival payments company based out of Mexico, for an undisclosed sum to help the firm expand its Latin America footprint.
The company, which competes with the likes of PayPal, Stripe, and Block, sells cross-border payment services to mainly small and medium-sized enterprises. Airwallex makes money by pocketing a fee each time a transaction is made.

The deal, which is subject to regulatory approvals and customary closing conditions, marks a major push from Airwallex into Latin America, a market that has become more attractive for fintech firms thanks to a primarily younger population and increasing online penetration.
Jack Zhang, SumUp’s CEO, said the company was looking at Mexico as something as a hedge as it deals with geopolitical and economic uncertainty going on between the U.S. and China.
“U.S. people export to Mexico to sell to the consumer there,” Zhang told CNBC. “Because of the supply chain, you can also export out of Mexico to other countries like the United States.”
“You get both the inflow and outflow of money,” he added. “That’s really what we like the most. We can take a global company to Mexico and also help the global companies making payments to the supply chain.”
U.S.-China trade tensions have escalated in recent years, as Washington seeks to address what it sees as China’s race to the bottom on trade.

The U.S. alleges China has been deliberately devaluing its currency by buying lots of U.S. dollars, thereby making Chinese exports cheaper and U.S. exports more expensive, and worsening the U.S. trade deficit with China.
China has sought to address these concerns, agreeing to “substantially reduce” the U.S. trade deficit by committing to “significantly increases” its purchases of American goods, although it’s struggled to make good on those commitments.
“Mexico is one of the largest populations in Latin America,” Zhang added. “As the trade war intensifies in China and the US, a lot is shifting from Asia to Mexico.”
“[Mexico] is very close to the U.S. Labour is cheaper compared to the U.S. domestically. A lot of the supply chain is shipping there. There’s a lot of opportunity from e-commerce as well.”

A maturing fintech

Airwallex operates around the world in markets including the U.S., Canada, China, the U.K., Australia, and Singapore. The Australia-founded company is the second-most valuable unicorn there, after design and presentations software startup Canva, which was last valued at $40 billion.

The company, whose customers include Papaya, Zip, Shein and Navan, processes more than $50 billion in a single year. It has also partnered with the likes of American Express, Shopify and Brex, to help it expand its services internationally.
It has been a tough environment for fintech companies to operate in lately, given how interest rates have risen sharply. That has made it more costly for startup firms to raise capital from investors.
For its part, Airwallex has raised more than $900 million in venture capital to date from investors including Salesforce Ventures, Sequoia, Tencent and Lone Pine Capital. The company was last valued at $5.6 billion.

At this stage we are still expanding against our mission, which is to enable those smaller businesses to operate anywhere in the world and keep building software on top.

Jack Zhang
CEO, Airwallex

Zhang said that the company is at a stage where it has reached enough maturity to consider an initial public offering — the company says it now processes more than $50 billion in annualized transactions. However, Airwallex won’t embark on the IPO route until it gets to a certain amount of annual revenue, Zhang added.
Zhang is targeting $100 million of annual recurring revenue (ARR) for the business within the next year or two. Once Airwallex reaches this point, he says, it will then look at a public listing.
“At this stage we are still expanding against our mission, which is to enable those smaller businesses to operate anywhere in the world and keep building software on top … to protect our margins [and] grow our margins from a cost point of view, not just infrastructure,” Zhang said.
MexPago offers much of the same services as Airwallex — multi-currency accounts for small and medium-sized businesses, foreign exchange services, and payment processing — but there are a few more payment methods it has on offer which Airwallex doesn’t currently provide.

Why Latin America?

A big selling point of the MexPago deal, Zhang said, is the ability to obtain a regulatory license in Mexico without having to embark on a long process of applying with the central bank. The company has secured an Institution of Electronic Payment Funds (IFPE) license from MexPago.

That will allow Airwallex’s customers, both in Mexico and around the world, to gain access to local payment methods such as SPEI, Mexico’s interbank electronic payment system, and OXXO, a voucher-based payment method that lets shoppers order things online, get a voucher, and then fulfill their order with cash.
“The ability to access the license for the native infrastructure over there will give us a significant advantage with our global proposition,” Zhang told CNBC.
Airwallex has seen huge levels of growth in the Americas in the past year — the company reported a 460% jump in revenues there year-over-year.
Airwallex isn’t the only company seeing the potential in Latin America.
SumUp, the British payments company, has been active in Latin America since 2013, opening an office in Brazil back in 2013. The firm’s CFO Hermione McKee told CNBC in June at the Money 20/20 conference that it plans to ramp up its expansion in the region.
“We’ve had very strong success in Latin America, in particular, Chile recently,” McKee told CNBC in an interview.
“We are looking at launching new countries over the coming months.”
More than 156 million people in Latin America and the Caribbean are between the ages of 15 and 29, accounting for over a fourth of its population. These consumers tend to be more digital-native and mistrusting of established banks. More

Net worth for the typical U.S. household grew 37%, after inflation, from 2019 to 2022, according to the Federal Reserve’s triennial Survey of Consumer Finances, issued Wednesday.
That growth was the highest on record, fueled by higher home and stock prices and pandemic-era government stimulus.
However, not all groups saw wealth grow equally, and large wealth gaps persist. Poverty also rose in 2022.

Standret | Istock | Getty Images

Net worth surged for the typical family during the pandemic era, largely on the back on higher home and stock prices and government stimulus measures, the Federal Reserve reported Wednesday in its triennial Survey of Consumer Finances.
Net worth is a measure of household assets after accounting for liabilities. After accounting for inflation, median net worth jumped to $192,900, a 37% increase from 2019-22, the Fed found.

That percentage growth was the largest since the Fed started its modern survey in 1989. It was also more than double the next-largest increase on record: Between 2004 and 2007, right before the Great Recession, real median net worth rose 18%.
Increases in net worth were “near universal across different types of families,” the Fed said.
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“Americans got a lot wealthier during the pandemic,” said Mark Zandi, chief economist of Moody’s Analytics.
In large part, that was due to the Federal Reserve lowering interest rates to rock bottom at the onset of the pandemic, easing borrowing costs for consumers, Zandi said. An expanded social safety net made it less likely people had to take on debt. And when became clear the U.S. economy would recover quickly from the early pandemic shocks, due to government support and vaccines, asset prices like stocks and homes “took off,” Zandi said.

Of course, not everyone benefited equally: Assets like homes and stocks are generally not held by families in the bottom 20% by income, for example, the Fed said.

And wealth gaps are still big: Families in the bottom 25% by wealth had a median net worth of $3,500 in 2022. The top 10% had $3.8 million.
“Those that have big a net worth in America keep getting bigger and those have no net worth are not making much progress,” said certified financial planner Ted Jenkin, CEO and founder of oXYGen Financial in Atlanta and a member of CNBC’s Advisor Council.

Home and stock values increased significantly

The pandemic saw an unprecedented scale of federal relief funds — like stimulus checks, and enhanced unemployment benefits and child tax credits — issued to prop up households. The government also took measures that alleviated debt burdens, like a pause on student loan payments and interest.
The typical family’s “transaction account” balances — like checking, savings and money market accounts — jumped 30% to $8,000 from 2019 to 2022, according to Fed data.
At the same time, the values of financial assets like homes and stocks increased significantly.

Those that have big a net worth in America keep getting bigger and those have no net worth are not making much progress.

Ted Jenkin
CEO and founder of oXYGen Financial

For example, the median net value of a house rose to $201,000 in 2022, from $139,100 in 2019 — a 45% increase, the Fed said. The S&P 500 stock index grew by roughly 20% from the end of 2019 through 2022. Balances of the typical retirement account like 401(k) or individual retirement account grew by 15% to $86,900, according to Fed data.
Not only did stock values grow, but more people also began investing. Direct ownership of stocks also increased “markedly” between 2019 and 2022, from 15% to 21% of families, the largest change on record, the Fed said.

Racial wealth gap narrowed, but remains significant

The racial wealth gap also narrowed over that three-year time frame, as home, stock and business ownership all increased relatively more for non-white than for white families, the Fed said.
However, these gaps are still large: The typical white family had about six times as much wealth as the typical Black family, and five times as much as the typical Hispanic family, the Fed said.
And, when it comes to income, Black and Hispanic families’ wages after inflation stagnated over 2019-22, the Fed added.

There are also signs many families are struggling despite pandemic-era wealth gains. The poverty rate jumped to 12.4% in 2022 — up 4.6 percentage points from 2021 and up 0.6 points from the pre-pandemic rate in 2019, according to the Census Bureau. (This poverty rate reflects the Supplemental Poverty Measure, which factors government benefits like food stamps and housing subsidies into income measures.)
The expanded pandemic-era social safety net had largely withered away by 2022, right around the same time that inflation was hitting 40-year highs.
In fact, household wealth likely peaked in mid-2022, Zandi said.
“If the Fed did another survey today, I suspect they’d find net worth is lower, particularly for folks in the lowest income groups, in part because their debt loads are now higher,” Zandi said. “They have been borrowing quite aggressively since the government support wore off.” More