Finance

Everyone wants more metals. In recent months Britain has inked a deal with Zambia, Japan has sealed one with Namibia and the eu has shaken hands with Chile. The bloc’s negotiators also started talks with the Democratic Republic of Congo; America’s, meanwhile, visited Mongolia. This scattershot campaign, which is also targeting the Philippines and Saudi Arabia, has a single aim: obtaining the minerals required for rapid decarbonisation.Seventy-two countries, accounting for four-fifths of global emissions, have committed themselves to net-zero targets. According to the Energy Transitions Commission (etc), a think-tank, hitting them by 2050 will require 15 times today’s wind-power capacity, 25 times more solar, a tripling of the grid’s size and a 60-fold increase in the fleet of electric vehicles (evs). By 2030 copper and nickel demand could rise by 50-70%, cobalt and neodymium by 150%, and graphite and lithium six- to seven-fold. All told, a carbon-neutral world in 2050 will require 35m tonnes of green metals a year, predicts the International Energy Agency, an official forecaster. Adding aluminium and steel to the mix, the etc forecasts that demand between now and then will hit 6.5bn tonnes.Hence why analysts and policymakers worry about an almighty supply crunch towards the end of the decade. The etc expects shortages of market-breaking magnitudes by 2030: some 10-15% for copper and nickel, and 30-45% for other battery metals. When dwindling stocks cause prices to rise, producers will crank up output and customers use scarce materials more efficiently or turn to cheaper alternatives. What demand remains unmet after this will be destroyed, however, as would-be buyers that cannot or will not pay higher prices are forced out of the market. Too much of such demand destruction will kill the green transition. The question, then, is simple. Can the crunch be minimised?Start by considering the metals in question. Three are already widely used in industry: aluminium and steel are the backbone of panels and turbines, and copper is vital for everything from cables to cars. Then come those powering electric vehicles (evs): cobalt, lithium and nickel, which make up battery cathodes, and graphite, the main anode element. Except for nickel, which is also an ingredient in stainless steel, all these have only niche applications. The last group features magnetic rare earths like neodymium, found in ev motors and turbine generators. These are required only in minuscule amounts.image: The EconomistThe search for such metals is made slightly less urgent by a discomforting fact: climate policies are unlikely to restrain global warming to 1.5°C above pre-industrial levels, as assumed by most forecasts. Moreover, many future-gazers also assume demand for green gear, and thus metals, will rise in a linear fashion, even though some countries will no doubt start to sprint only in the final yards. Net-zero projections may therefore be more credible about 2050 than 2030. Steel, for which green uses will remain a drop in the ocean, will probably stay abundant. The supply of cobalt, a byproduct of other sought-after metals, may outpace demand for ever.Yet plenty of difficulties remain. Industry oracles canvassed by The Economist predict copper-supply gaps of 2-4m tonnes, or 6-12% of potential demand, by 2030. They also foresee a shortfall of lithium of 50,000-100,000 tonnes, a 2-4% deficit. Nickel and graphite—plentiful in theory—could cause problems because batteries require a purity of material that is elusive. There are too few smelters to refine bauxite into aluminium. Next to no one produces neodymium outside of China.These will be hard problems to overcome. Yet we find that three levers may lower the pressure without wrecking the transition. First, producers may extract more supply from existing sources, which can be done straight away but will produce limited quantities of metal. Second, firms may open new mines, which could solve the problem entirely but will take time. The limitations of these two levers make a third the most important of all, at least over the course of the next decade: finding ways to circumvent green bottlenecks.Full metal racketQuick wins could come from reusing more material. Such gains will be greatest for aluminium, copper and nickel. All are widely recycled, but higher prices will motivate spending in an unglamorous, fragmented industry. Some of this is already happening. bhp, a big miner, has backed a nickel-recycling upstart in Tanzania. Huw McKay, the firm’s chief economist, reckons that scrap could represent 50% of the total copper supply in a decade, up from 35% now. Rio Tinto, another mining giant, is investing in aluminium recycling centres. Last year startups focused on battery-metal recycling raised $500m, a record.More could come from restarting idle mines. There are not many of them: a post-covid surge in demand has already reduced slack. Even if prices double, cost curves for copper and nickel indicate that just a few mines would reopen. But aluminium is an important exception. Since December 2021 soaring energy costs have caused 1.4m tonnes in annual smelting capacity (2% of the world’s) to shut in Europe. A 25% rise in prices would lure much of that back, reckons Graeme Train of Trafigura, a trader.The greatest hope lies in technologies that squeeze supply from tricky deposits. New firms are developing chemical processes, known as “tail leaching”, that extract copper from ores with low metal content, making waste worth exploiting. Using the tech at scale could yield an extra 1m tonnes of copper a year without costing much, says Daniel Malchuk of Jetti Resources, one such firm. Meanwhile, in Indonesia, the world’s largest nickel producer, miners are using “high-pressure acid leaching” to turn low-grade ores into material fit for electric cars. Three billion-dollar plants have been built already, and nearly $20bn-worth of additional projects have been announced. Daria Efanova of Sucden, a trader, reckons that Indonesia could produce some 400,000 tonnes of top-grade nickel by 2030, filling part of the 900,000-tonne supply gap she projects.Yet these new techniques are uncertain, and in some cases come with drawbacks such as pollution. The resulting supply cannot be taken for granted. Starting new mines, the second lever, would bring larger gains, even if slowly. McKinsey, a consultancy, calculates that if the 382 projects in cobalt, copper, lithium and nickel that have at least commenced a pre-feasibility study were to be completed by 2030, it would keep markets just about balanced. These projects would represent a huge increase in production: there are around 500 cobalt, copper, lithium and nickel mines operating worldwide at present. To open on time, they will have to overcome a number of difficulties.image: The EconomistThe first is a shortage of money. McKinsey estimates that to fill supply gaps predicted by 2030 annual capital expenditure in mining has to double to $300bn. cru, another consultancy, reckons that spending on copper alone must hit $22bn in 2027, compared with an average of $15bn in 2016-21. Although not yet by fast enough, investment by big miners is rising. Customers are entering the fray, too. General Motors, a carmaker, is investing $650m in Lithium Americas, a miner in Nevada. catl, a Chinese battery firm, is spending billions to source cobalt and lithium. Since the start of the year pension and sovereign funds have invested $3.7bn in private mining assets, the most since 2013. And about $21bn in capital raised by private-equity firms since 2010 is also chasing deals.This will take time to make a difference, however, since digging new mines takes ages—from 4-7 years for lithium to an average of 17 for copper—and delays have been worsened by a paucity of permits. Egged on by activists, governments and regulators are increasingly blocking projects on environmental grounds. Between 2017 and 2021 it took an average of 311 days for new mines in Chile to gain approval, compared with 139 in 2002-06. Meanwhile, the metal content of copper ores mined in placid countries is falling, forcing miners to look to dicier locations. Two-thirds of the new supply planned by 2030 sits in countries that in 2020 ranked below 50th in the World Bank’s “ease of doing business” index. Reko Diq, a project led by Barrick Gold, a Canadian firm, containing one of the world’s largest untapped copper deposits, sits between Iran and Pakistan.All this means new supply can only be a solution in the long run, perhaps after a spell of high prices. Thus the lion’s share of adjustment in the next decade will come down to demand—our third lever. This side of the equation, which is more difficult to model than future production, is poorly understood. But it is probably more flexible than commonly realised.Auto- and battery-makers are a type of buyer the metals market has never seen before. Fiercely innovative, price-sensitive and risk-averse, such firms work around problems at the first sign of a squeeze in supply. They have already achieved a lot through “thrifting”—the continuous discovery of small ways to use less metal. The typical electric-car battery now contains just 69kg of copper, down from 80kg in 2020. Simon Morris of cru reckons that the next generation may need just 21-50kg, saving up to 2m tonnes of copper a year by 2035. He thinks that the lithium intensity of batteries may halve by 2027.More can be achieved through substitution. Nickel-manganese-cobalt chemistries that contain as much cobalt as nickel, known as nmc 111, are being phased out in favour of nmc 721 and 811, which contain more nickel but little cobalt. These account for a quarter of ev-battery cathodes, up from zero in 2017. Meanwhile, the cheaper but less energy-dense lithium-iron phosphate (lfp) mix is now conquering the booming Chinese market, where city dwellers are less concerned by a shorter driving range. Indeed, lfp now represents 30% of ev cathodes worldwide.Graphite anodes are also being doped with silicon, which is hyperabundant. In March Tesla, an ev-maker, said it would build a motor that did not need rare earths. Sodium-ion batteries, which replace lithium with sodium, the sixth most abundant element on Earth, may in time triumph. Because of their low energy density, they will first be used for stationary storage, where volume is less of a constraint.Customer preferences will play a part. Today people want to be able to drive their ev for 600km on a single charge—but few travel such distances often. As lithium runs scarce, carmakers may design shorter-range vehicles that can be augmented by bolting on a portable battery, radically reducing the size of the standard pack. At the right price, adoption could be fast.Copper, which cannot easily be engineered out of grids, is the chief problem. But here, too, consumption shifts could help. cru estimates that green demand as a share of total copper demand will rise from 7% now to 21% in 2030—a bigger chunk, but still a fraction. That leaves many grams of copper that could be transferred to green applications when supply gaps emerge. As the cost of metal rises, sales of phones and washing machines, which also contain copper, will probably decline sooner than those of wires and solar panels—especially if the clean-tech market is propped up by subsidies and government orders.By the late 2030s there will probably be enough new mines and recycling for the transition to proceed as planned. The question is how much disturbance there will be in the interim. Things will be tight. Since supply will be concentrated in a few countries, local unrest, geopolitical conflict or even bad weather could hit markets: simulations by Liberum Capital, a bank, suggest a miners’ strike in Peru, or three months of droughts in Indonesia, would tip the copper or nickel markets in 2028 into 5-15% supply deficits. But with nimble buyers, steadfast governments and a dash of luck, the green-metal bump need not cause an electric-car crash. ■ More

Visitors at the Tesla booth at the World Artificial Intelligence Conference in Shanghai, July 6, 2023.
Costfoto | Nurphoto | Getty Images

Check out the companies making headlines in midday trading.
Tesla — Shares of the electric vehicle maker jumped more than 10% after Morgan Stanley upgraded the stock to overweight from equal weight. Analyst Adam Jones said the firm is on the verge of a major leap in autonomous driving.

J.M. Smucker, Hostess — Smucker lost 7% after it agreed to buy Twinkies-maker Hostess Brands for $34.25 a share in a cash and stock transaction, valued at approximately $5.6 billion. hares of Hostess popped 19.1%, reaching a new 52-week high. 
Tenable Holdings — The exposure management solutions provider added 3.1% on the back of an upgrade to overweight from neutral by JPMorgan. The firm said the company should see improved fundamentals going forward.
Kenvue — Shares of the Band-Aid maker gained 3.6% after being upgraded by Deutsche Bank to buy from hold on Sunday. The Wall Street firm called Kenvue a high-quality company and believes the stock’s slide has created an attractive entry point. The J&J spinoff has lost 15% since going public in May.
Alibaba — The Chinese tech company shed 1.5% on the news that outgoing CEO Daniel Zhang would unexpectedly quit its cloud business. In June, the company had announced Zhang was leaving as chairman and CEO of Alibaba Group to focus on the cloud intelligence unit. 
Meta — The tech giant gained 3.2% after the Wall Street Journal reported Meta is developing a new AI system as capable as OpenAI’s most advanced model, and more powerful than the one it released two months ago called Llama 2. According to the report, Meta is aiming to launch the product by next year. 

Nubank – The U.S.-traded shares of the Brazilian financial firm rose more than 8% after JPMorgan upgraded Nubank to overweight from neutral. JPMorgan said in a note to clients that Nubank should continue to gain market share in Brazil for multiple years and is trading at a “good entry point” after a recent stock price decline. 
Qualcomm — The chip stock jumped 3.9% after the company announced that it will supply Apple with 5G modems for smartphones through 2026. The continued sales to Apple will boost Qualcomm’s handsets business, and could soften the blow of potentially losing a critical customer. 
Media stocks — Shares of Disney and Charter Communications gained 1.1% and 3.2%, respectively, as both companies are nearing a deal that would end the blackout fight between the two companies. Shares of media peers Warner Bros. Discovery and Paramount also traded 2.3% higher on the news.
AstraZeneca — The pharmaceutical company’s shares lost 2.3% Monday. Per Reuters, the pullback comes after a Sunday report in the Mail saying Chief Executive Pascal Soriot privately discussed leaving the company as early as next year.
Moderna — Shares of the drugmaker fell 1.7% after it announced it is partnering with German drug developer Immatics to further cancer vaccine developments. Moderna will give Immatics $120 million in upfront cash as part of the deal.
— CNBC’s Alexander Harring, Samantha Subin, Yun Li, Jesse Pound, Michelle Fox and Tanaya Macheel contributed reporting More

Car shoppers are showing more interest in vehicles selling under $50,000, according to car site Edmunds. That reverses a recent trend that saw shoppers splurging on higher-end models with more features.
But cars under that price point can be harder to find.
Consumers looking for a good value can take a few general steps to save money at the dealership.

Used car sales are soaring all over the U.S., and companies from Autonation to CarMax, Carvana and Buffalo, New York-based used car start-up ACV Auctions are benefitting.
Patrick T. Fallon | Bloomberg | Getty Images

During the pandemic, shoppers splurged on higher-end new cars. Now, given the current high car costs and interest rates, drivers are shifting their focus to less expensive models. Finding one, however, might not be easy.
More shoppers are opting for vehicles that fall in the $45,000-$50,000 range, the price point of mid-to-high-trim three-row SUVs, said Joseph Yoon, an Edmunds consumer insights analyst.

That shift shows in so-called “days to turn” numbers, which measure how long cars are in dealer inventory before being sold. Vehicles selling for under $50,000 currently linger for just 26 days on the lot, on average, compared to 40 days for those with a higher sticker price, according to Edmunds data.
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“We’re seeing the overall effect of the economy at play here,” said Yoon.
“People have stopped going for top-of-the-line cars and are going for mid-trim cars,” he added, “That’s where we’re starting to see the shift.”
Even so, the average transaction price for a new car was $47,941 in August, up 0.8% from July and up 1.6% from a year earlier, Edmunds found. Interest rates for new-vehicle financing also climbed 7.4% in August, marking the highest rate since 2008.

As a result, the average monthly payment for new vehicles reached a record $738.

Models averaging under $20,000 are rare

Drivers in search of a new ride are likely to quickly discover that it’s harder to find cheap new cars these days.
The $20,000-or-below barometer is a sort of unofficial price threshold for an affordable new car, said Brian Moody, executive editor for Kelley Blue Book.
“There aren’t as many inexpensive new cars as there used to be,” Moody said.

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In fact, only one car model had the average new-vehicle transaction price below $20,000 in July, according to Kelley Blue Book data: the Mitsubishi Mirage.
Consumers looking for a car that sells for a price within the $20,000-$50,000 threshold are likely to find more options. Of 35 makes, 14 — Buick, Chevrolet, Chrysler, Fiat, Honda, Hyundai, Kia, Mazda, Mini, Mitsubishi, Nissan, Subaru, Toyota and Volkswagen— had average transaction prices under $50,000 in July, according to Kelley Blue Book.
Transaction price doesn’t tell the full story, of course, experts said. That price records what the average buyer pays — a variable that depends on factors such as markups and promotions by car dealers and any add-ons selected by buyers at the time of purchase.

‘Americans don’t like not having features’

Consumers were able to find entry-level vehicles with a $15,000 starting price as recently as a few years ago, said Paul Waatti, an industry analyst at market research firm AutoPacific.
The dearth of cheaper options today is due to a multitude of factors, experts said. 
Among them is consumer preferences — people tend to want models with more features, Waatti said.
“Culturally, Americans don’t like not having features in their car,” such as automatic climate control, a car play screen and parking sensors, said Yoon.

Auto manufacturers know this to be true and use it to their advantage in marketing, Waatti said.
“Automakers obviously want to be able to tell that they’re offering an affordable vehicle and they can do that in messaging,” he added. “But when it comes down to it, they’re not building many of those lower-price models.” 
Instead, automakers will make more of the higher-end models with features that consumers want, added Yoon.
In fact, car sales in the luxury market segment have increased, Moody said. They now account for about 20% of total new car sales, up from roughly 10% to 13% before the Covid-19 pandemic, he said.

When it comes down to it, they’re not building many of those lower-price models.

Paul Waatti
industry analyst at AutoPacific

Five years ago, there were 12 vehicles selling for an average price of more than $100,000. Today, there are 32 vehicles, according to Kelley Blue Book data. Both tallies exclude “super exotics” from companies such as Ferrari, Lamborghini and Rolls-Royce.
Inflation for new and used cars also surged during the pandemic era, leading to higher vehicle prices. Materials and supplies became more expensive, driving up production costs for auto companies, said Waatti, and those higher costs are at least partly passed on to buyers.
Higher interest rates may also be keeping would-be buyers out of the car market right now, experts said.
Since buyers who generally shop for the least expensive cars tend to be budget-constrained, their absence from the market may be skewing average purchase prices higher, they said.
The average new-vehicle purchase price today is about $48,000, up from about $30,000 in 2012, according to Kelley Blue Book.

4 tips for finding cars at a good price

Here are some general tips for consumers to find a reasonably priced car, courtesy of Tom McParland, owner of Automatch Consulting, a car-buying service for consumers:
1. Know your budget — really
Most car buyers use monthly payments to conceptualize how expensive a car is.
However, consumers should know their overall budget before shopping by using an online auto loan calculator, said McParland. Otherwise, it’s hard to know if you’re getting a good deal, he added.

Certain auto loan calculators let consumers work backwards, by plugging in a monthly payment that fits their budget, along with other estimated information such as the loan’s term and interest rate. The output: the total vehicle price a buyer can afford.
“This is probably the best step any customer can take,” McParland said.
2. Look outside your local market
Casting a wide net during a car search yields more potential inventory and leverage against dealerships, McParland said. Some markets are “better than others,” and looking even an hour or two away will “very likely get you a more competitive deal,” he added.
3. Get prices in writing beforehand
Confirm car prices in writing with a dealer before walking in the door, McParland said. A refusal to do so is a red flag, he said.
“It’s code for, ‘We’re going to try to rip you off,'” he said.
4. Shop your financing
Don’t depend on a dealer’s financing offer.
Dealers can profit off consumers by offering a higher-than-necessary interest rate, experts said. That’s why it’s a good idea to get pre-approval for an auto loan — perhaps from a local bank, credit union or online lender — before setting foot in the dealership, they said.
These offers can provide leverage for a better rate at the dealership and are especially useful for buyers with credit scores below 700, who are unlikely to qualify for the best available rates, McParland said. More

JPMorgan Chase CEO Jamie Dimon said Monday that while the U.S. economy is doing well, it would be a “huge mistake” to believe that it will last for years.
Topping his concerns include central banks reining in liquidity programs via “quantitative tightening,” the Ukraine war, and governments around the world “spending like drunken sailors,” the CEO said.
“To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake,” Dimon said.

Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, US, on Thursday, Oct. 13, 2022.
Ting Shen | Bloomberg | Getty Images

JPMorgan Chase CEO Jamie Dimon said Monday that while the U.S. economy is doing well, it would be a “huge mistake” to believe that it will last for years.
Healthy consumer balance sheets and rising wages are supporting the economy for now, but there are risks ahead, said Dimon, who was speaking at a financial conference in New York. Topping his concerns include central banks reining in liquidity programs via “quantitative tightening,” the Ukraine war, and governments around the world “spending like drunken sailors,” the executive said.

“To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake,” he said.
The world’s largest economy has defied expectations for a downturn for the past year, including from prognosticators like Dimon, head of the biggest U.S. bank by assets. Last year, he warned that a potential economic hurricane was on the way, citing the same concerns around central banks and the Ukraine conflict. But the U.S. economy has proven resilient, leading more economists to expect that a recession might be avoided.
“Businesses feel pretty good because they look at their current results,” Dimon said. “But those things change, and we don’t know what the full effect of all this is going to be 12 or 18 months from now.”
While JPMorgan and other banks have been “over-earning” on lending for years because of historically low default rates, strains were emerging in parts of real estate and subprime auto lending, Dimon said.
“If and when you have a recession, which you’re eventually going to have, you’ll have a real normal credit cycle,” Dimon said. “In a normal credit cycle, something always does worse than” expected, he added.

Dimon on regulations, markets, China

Dimon struck a note of caution throughout the panel discussion. JPMorgan is repurchasing stock at a “lower level” than before, a pace which might last through 2024, he said, as the bank husbands capital to adhere to upcoming rules.
He called the new regulatory mandates “hugely disappointing” and pushed for greater transparency from regulators, saying that JPMorgan would have to hold about 30% more capital than European banks.
“Is that what they want? Is that good, long term?” Dimon asked. “What was the goddamn point of Basel in the first place?”
When asked about whether the IPO and merger markets were picking up given the upcoming Arm listing, Dimon said he encouraged CEOs to take action rather than waiting too long.
“I think the uncertainties out there ahead of us are still very large, and very dangerous,” Dimon said.
Among those risks is the deterioration in relations with China, he said. Prospects for JPMorgan operations in China went from looking bright to only “just OK” because of the rising risks, he said.
“I don’t expect war in Taiwan, but this can go south,” Dimon said. More

Qualcomm CEO Cristiano Amon.
Carlo Allegri | Reuters

Check out the companies making headlines in premarket trading Monday.
Tenable Holdings — The exposure management solutions provider rose 3% before the market opened following an upgrade to overweight from neutral at JPMorgan. The bank said the company is positioned to see better business fundamentals in the future.

Alibaba — Shares lost 1% after outgoing CEO Daniel Zhang unexpectedly quit its cloud business. In June, the company had said Zhang was leaving as chairman and CEO of Alibaba Group to focus on the cloud intelligence unit.
Qualcomm — The semiconductor stock jumped 7.4% premarket after saying Monday it will supply Apple with 5G modems for smartphones through 2026. Continued sales to Apple will benefit Qualcomm’s handsets business and could soften the blow of potentially losing a critical customer, analysts said. Apple’s shares were 1% higher premarket.
Kenvue — Shares added 3% in early trading after Deutsche Bank upgraded to buy from hold. The Wall Street firm said the slide in the Band-Aid maker has created an attractive entry point. The J&J spinoff has shed 15% since going public in May.  
Oracle — The database software provider gained 1.2% ahead of its quarterly earnings due postmarket Monday. Analysts surveyed by FactSet estimate earnings per share of $1.15 against company guidance of $1.12 to $1.16, and revenue of $12.47 billion. The stock has gained nearly 55% so far this year, boosted by excitement around generative AI.
Tesla – The electric vehicle stock popped more than 6% before the bell after Morgan Stanley upgraded shares to overweight from equal weight, citing autonomous driving growth. The Wall Street firm called software and services revenue the “biggest value driver” for Tesla.

J. M. Smucker, Hostess —  J.M. Smucker slumped 10% in early trading after the peanut butter and jelly maker agreed to buy Twinkies maker Hostess Brands for $34.25 per share in cash and stock, valuing the cupcake maker at roughly $5.6 billion, including debt. Shares of Hostess popped 17.3%. The deal’s expected to close by the end of January, 2024.
Meta — The Facebook parent rose 1.5% after the Wall Street Journal said Meta is developing a new AI system as capable as OpenAI’s most advanced model, and more powerful than the one it released two months ago called Llama 2. Meta hopes its new AI model will be ready next year, the report said.
RTX — Shares of the company formerly known as Raytheon Technologies fell 3% after it revealed an engine manufacturing flaw would lower its pretax earnings by $3 billion. The problem forced it to speed up inspections.
— CNBC’s Alex Harring, Hakyung Kim, Michelle Fox Theobald, Samantha Subin, Sarah Min and Kif Leswing contributed reporting. More

In a filing Monday, Instacart said it is setting an offer price of between $26 and $28 for its IPO.
At the higher end of the pricing scale, Instacart will be looking to net roughly $616 million in proceeds.
The IPO could also value Instacart at up to $9.3 billion on a fully diluted basis.

Instacart on Monday submitted an updated filing for its upcoming initial public offering, saying it is looking to raise up to $616 million of fresh capital alongside existing shareholders at a valuation of as much as $9.3 billion.
In the filing, Instacart said it is setting an offer price of between $26 and $28 for its IPO. Instacart said it would issue 22 million shares in total, comprising 14.1 million of newly issued shares from the company and 7.9 million shares from selling stockholders. At the higher end of that pricing scale, Instacart will be looking to net roughly $616 million in proceeds.

Instacart looks set to attract a valuation of between $8.6 billion and $9.3 billion. On a fully diluted basis, its share count will total 331 million. That’s including restricted stock units, stock options, and warrants.
Instacart previously said that multinational food giant PepsiCo would come on board as an investor in the company, purchasing $175 million of shares in a concurrent private placement. Goldman Sachs, one of the underwriters, will act as an agent in connection with the private placement and receive a fee equal to 1.5% of the total purchase price of shares sold.
Instacart said in its filing that Norges Bank Investment Management, Norway’s massive sovereign wealth fund, had also expressed interest in becoming a cornerstone investor in the firm’s IPO. Alongside TCV, Sequoia Capital, D1 Capital Partners, and Valiant Capital Management, the fund would purchase up to roughly $400 million in the offering.
However, underwriters “could determine to sell more, fewer, or no shares to any of the cornerstone investors, and any of the cornerstone investors could determine to purchase more, fewer, or no shares in this offering,” Instacart added.

Instacart, one of the largest U.S. online grocery delivery firms, will be among the biggest public flotations to take place this year. The company competes with traditional retailers, as well as tech firms like Amazon, DoorDash, GoPuff, and Grubhub.

The company’s updated IPO filing comes as British chip design firm Arm prepares for a blockbuster debut that could value it at as much as $52 billion. Last week, Arm said the New York IPO could fetch it up to $4.87 billion in fresh capital.
The debuts will put the IPO market to the test after a year-long freeze on stock market listings as a result of higher interest rates and rising inflation. Investors are hoping for a good showing from the latest raft of public offerings — but performance will depend heavily on market conditions when the companies actually list.
Clarification: The headline of this story has been updated with the valuation using the total share count on a diluted basis. More

Over 2,500 attendees are gathered to hear hip-hop legends Method Man and Redman, and financial headliners like Jeremy Siegel, Jeff Kleintop, Emily Roland, Cliff Asness, Jeff Gundlach and Jan van Eck. 
Plus there’s dancing, swimming, surfing, yoga, pizza and sushi and beer and wine sessions.
Over four days, the emphasis is on personal interaction, with numerous “networking dinners” — giant parties for young RIAs and investors to get together and socialize. 

Beach goers take to the water to cool off amid high temperatures Wednesday, June 10, 2020 in Huntington Beach, CA.
Allen J. Schaben | Los Angeles Times | Getty Images

Huntington Beach, California
Over 2,500 investors and financial advisors have descended on Huntington Beach, California — a.k.a. Surf City USA —for a financial conference. 

A financial conference on a beach? In Huntington Beach, home to nine miles of shoreline and the world center of beach volleyball? 
Yep.  And I mean, it is on the beach. 
And who are attendees coming to see? They’re coming to see big stars. 
They’re coming to see Method Man & Redman. 
Wait, who? They’re coming to see hip-hop legends Method Man (Wu-Tang Clan) & Redman (Def Squad), who will perform Tuesday night. 

They’re not the only stars. There will be financial luminaries as well. Jeremy Siegel from Wharton/WisdomTree. Jeff Kleintop from Charles Schwab. Emily Roland from John Hancock. Cliff Asness from AQR. Jeff Gundlach from DoubleLine. ETF and commodity maven Jan van Eck. 
But this is one of those conferences where the social interaction is as important as the content. 
Reinventing the financial conference 
Welcome to FutureProof, billed as “the largest gathering of top-tier wealth management professionals, CEOs, CTOs, COOs, and fast-growing financial advisors.” 
It’s the brainchild of Barry Ritholtz, co-founder, chairman, and chief investment officer of Ritholtz Wealth Management, and CEO Josh Brown. 
“Coming out of the pandemic, it was obvious to us that the traditional financial conference was past its sell-by date,” Ritholtz told me. “Everybody was bored with lectures and tedious panels forecasting the future in giant windowless conference centers. Instead, we imagined what it would be like if events were more social and interactive and useful and (dare I say) fun! That was how FutureProof came about.” 
Yoga?  It’s so 2008 except… 
Those of you accustomed to going to conferences with a Yoga class at 5:45 a.m. on the agenda (who goes to those things?), prepare for the New Hipness. 
Straight Yoga? It’s so 2008. Oh sure, there’s a yoga class, but you’ll have a special instructor. You’ll have: 
Seaside Yoga: The Path to Mindfulness with a Goldman Sachs Instructor. Seriously? Goldman Sachs will teach me how to do yoga? What’s next? Acupuncture with Morgan Stanley? Chiropractic with Wells Fargo? Massage therapy with JP Morgan? 
Keep dancing, you fools 
Forget yoga. There’s a concerted effort to keep everyone dancing and swimming, starting with the FutureProof Kickoff Party (“relax, unwind and connect”) and continuing with: 
Health is Wealth: Surfing.  “We invite you to join us and embrace the thrill of learning to surf!” 
Dance Culture: An Interactive Session.  “Immerse yourself in the rhythm, movements, and rich history of Salsa dancing!” 
OK that’s an improvement, but I think I’d rather go to: 
Battle of the Buds: Wine vs. Craft Beer.  “Engage in a lively and interactive debate as you explore the unique characteristics, flavor profiles and food pairings of both wine and craft beer.” 
Now I’m starting to get interested. I’ll have to squeeze that in between: 
Mastering Pizza Dough: Techniques for any Home Pizza Maker.  “Learn the secrets to achieving the ideal texture, flavor, and elasticity as you explore different kneading, proofing and shaping techniques.” 
Let’s Roll: The Art of Sushi Making. “This interactive session offers a unique opportunity to unleash your creativity and refine your knife skills.”  Refine your knife skills?  OK…might be safer to just go to Mastering the Grill:  Barbecue Techniques. 
Oh yeah. The financial content
Last year’s conference attracted 2,000 attendees, about half mostly young RIAs (Registered Investment Advisors), several hundred active trader types, ETF sponsors and a smattering of vendors. 
Not surprisingly, much of the content is geared toward RIAs, with topics like, “The Personal Brand Blueprint: 5 Easy Steps to Attract High-Value Clients in 2023.” 
For investors, there is the ubiquitous tech bull Dan Ives from Wedbush, with “Five Tech Predictions for 2024.” 
DoubleLine’s Jeff Gundlach will return again this year, and will speak with my CNBC colleague Scott Wapner on Halftime Report on Tuesday. 
I will moderate a panel on “Global Macro Predictions” with Professor Siegel, Jeff Kleintop and Emily Roland. 
Morningstar will also be out in force, with stalwarts Christine Benz, Jeffrey Ptak, Ben Johnson and PitchBook’s Nizar Tarhuni talking about everything from retirement to 401(k) planning to the difficulty of market timing to private equity investing. 
Ritholtz Wealth Management’s bloggers and podcasters Michael Batnick and Ben Carlson will also dispense advice. 
But even amidst this ocean of content over four days, the emphasis is still on personal interaction. There’s numerous “networking dinners” which, if they are anything like last year’s, are giant parties for young RIAs and investors to get together and socialize. 
And that is where much of the real action happens. Last year I met a 35-year old RIA at one of these parties on the beach on a Monday night. He had flown in with his team the day before. 
“I brought all seven members of my team,” he told me. “It’s a team-building thing. I’m going to see a bunch of the speakers, but mostly I’m here to meet other people who do what I do.” 
And that seems to be the theme:  “Meeting other people who do what I do.” RIAs. Young investors. Financial stars. Bloggers. ETF sponsors. Hip-hop stars. 
It’s a strange brew, but exhilarating.  
Who knows what could happen? Maybe Method Man will announce Wu-Tang Clan is going on tour and is launching an ETF.  
Hey, a typical conference it’s not. More

Among all the central banks, the Bank of England has been the most aggressive in selling the bonds purchased to bolster the economy during the quantitative easing era, according to Christopher Mahon of Columbia Threadneedle.
Yields on benchmark 10-year U.K. gilts rose from around 2.99% in early February to a 13-year high of almost 4.75% in mid-August, before moderating slightly. Yields move inversely to prices.
“In our view, the actions of the … Bank of England could again mark the bottom of the market,” Mahon said.

People walk outside the Bank of England in the City of London financial district, in London, Britain, January 26, 2023.
Henry Nicholls | Reuters

LONDON — The Bank of England’s rapid pace of bond sales is creating a “selling gold at the bottom” moment for investors, according to Christopher Mahon, head of dynamic real return at Columbia Threadneedle.
In the aftermath of the 2008 financial crisis, the central bank spent 13 years buying up £895 billion ($1.12 trillion) of U.K. government bonds — known as gilts — while interest rates were historically low.

Now, despite the fact that the value of gilts has fallen dramatically since then, the central bank is unwinding those holdings, and fast.
Among all the central banks, the Bank of England has been the most aggressive in selling the bonds purchased to bolster the economy during the quantitative easing era, according to Mahon.

“Selling bonds on this scale has never been done before, nor has it been tried when bond markets have had to digest the ramifications of both high inflation and substantial rate hikes,” he said in a video blog last week.
The BOE is crystallizing massive losses as a result of the sales, which are being backstopped by the U.K. Treasury. In late July, the central bank estimated that it would require the Treasury to indemnify £150 billion ($189 billion) of losses on its asset purchase facility (APF).
“Our analysis suggests the reduction has been the equivalent of around 7.5% of all outstanding government debt,” Mahon said. “This is a huge amount, and is effectively additional issuance that the market has had to digest.”

Yields on benchmark 10-year U.K. gilts have risen from around 2.99% in early February to a 13-year high of almost 4.75% in mid-August, before moderating slightly. Yields move inversely to prices.
Columbia Threadneedle’s analysis suggests that the pace of bond sales is 70% faster than that of the U.S. Federal Reserve and around twice the rate of the European Central Bank.
“It’s unclear to us why the Bank has been so hasty. The fast pace of these sales has been pushing down on gilt prices, it’s been worsening the losses for the taxpayer, and worse, it crystallizes what would have been paper losses into a drain that the U.K. Treasury has to make good,” Mahon said.
“For markets, the pace of such hefty selling pressure by the U.K. central bank is in our view, one factor why gilts have struggled this year and struggled to find buyers.”

Investment opportunity?

The U.K. certainly has a shaky track record when it comes to the mass disposal of assets.
Between 1999 and 2002, the U.K. controversially offloaded 401 metric tons of gold — out of a total holding of 715 tonnes — at what turned out to be the bottom of the market for the precious metal.

For Mahon, there are clear similarities in how the Bank of England is now disposing of its gilt stock.
“Similar pre-announcements of sales are used which act to depress the prices, similar disinterest is expressed by the Bank of England in the prices achieved or the scale of the losses crystallized, and similarly, there is a big fear in the market that the pace of the sales could even increase,” he said.
“In our view, the actions of the … Bank of England could again mark the bottom of the market.”
A spokesperson for the Bank declined to comment when contacted by CNBC.
Mahon added that, with inflation coming down and peak interest rates in sight, this could provide an opportunity for investors and “is one of the reasons why we think that gilts and indeed fixed income are very attractively priced.”

Next meeting

The central bank’s Monetary Policy Committee is next due to meet on Sept. 21. At its last meeting, the committee did not provide any further information on its plans for gilt sales, but Deputy Governor Dave Ramsden in July suggested that the pace of quantitative tightening could be set to increase.
In a research note last month, BNP Paribas economists predicted that the central bank will hike the pace of gilt sales from £80 billion a year to £95 billion.
The Bank of England, for its part, disputes that the asset sales are affecting markets in any substantive way. In his July speech, Ramsden said analysis of the evidence to date suggested that “QT [quantitative tightening] effects on gilt yields, while greater than zero, appear to be materially smaller than the effects of QE [quantitative easing].”
“Given our experience so far, as a very rough indication of scale, Bank staff estimate that a one-off additional £80 billion of QT relative to expectations is likely to increase 10-year gilt yields by less than 10 bps in prevailing market conditions,” Ramsden added. More