Finance

Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. The S & P 500 and Nasdaq on Thursday retreated from their record highs, set in the previous session, after a cooler-than-expected inflation report sent investors out of Big Tech stocks and into smaller-cap names. June’s consumer price index (CPI) print, a measure of costs for goods and services, fell to its lowest levels since 2021, bolstering the case for the Federal Reserve to lower interest rates sooner rather than later. Club holdings Nvidia, Apple and Microsoft all tumbled. “This CPI is really in control today,” Jim Cramer said. Shares of Morgan Stanley , Stanley Black & Decker and Best Buy surged Thursday, giving us a glimpse at which portfolio names will benefit from a lower rate environment. Morgan Stanley’s wealth management margins will be less pressured once borrowing costs come down. Meanwhile, lower rates can spur more housing market activity, which means stronger demand for toolmaker Stanley Black & Decker’s offerings. Finally, Best Buy sales should increase when U.S. consumer spending on PCs and electronics picks back up. Wells Fargo will kick off the banking sector’s quarterly earnings season on Friday. The Club is watching for changes to management’s net interest income (NII) guidance. The Wall Street firm previously forecasted a 7% to 9% decline in NII for 2024 as customers take their deposits to higher-yielding alternatives. We’re hoping these estimates were conservative in order to temper investor expectations. The stock is up 0.8% on Thursday. (Jim Cramer’s Charitable Trust is long BBY, SWK, MS, WFC, NVDA, AAPL, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

China’s paramount leader, Xi Jinping, contains multitudes. His economic philosophy touts both self-reliance and openness. His vision of policymaking embraces top-down design, but also bottom-up experimentation. During the covid-19 pandemic, he urged local officials to eliminate infections (which often required lockdowns) and promote growth (which required mobility). His recent call to cultivate “new productive forces” entails championing cutting-edge technologies, but without neglecting traditional industries. Communists are taught to believe in the power of contradictory forces, as Trivium, a consultancy, once put it. So Mr Xi “will expect his comrades to cope”. More

Rachel Reeves, Britain’s new chancellor, says that she has inherited the worst fiscal circumstances since the second world war. An exaggeration, perhaps, but only a small one. To address the squeeze, Ms Reeves will seek the help of Britain’s retirement savings. On July 8th she said that she wants the country’s pension funds “to drive investment in homegrown businesses and deliver greater returns to pension savers”. More

“We cannot carry on trade without war, nor war without trade,” wrote Jan Pieterszoon Coen, a brutal governor-general of the Dutch East India Company, to shareholders in 1614. Four centuries later, things sound a bit different. “Let’s make no mistake: assertiveness is a prerequisite for keeping our markets open,” says Sabine Weyand, the EU’s top trade negotiator. After decades during which America supported the global rules-based trade order and European commerce thrived, the bloc now has to learn how to do business in a fractious world. More

In the early 20th century, for brief periods, the most frenetic American trading pits were not the raucous markets in which stocks were traded, nor the venues where bonds were exchanged. The real action was in the market for betting on the next president. “Crowds formed in the financial district…and brokers would call out bid and ask odds as if trading securities,” write Paul Rhode and Koleman Strumpf, two economists. Markets were deep, liquid and smart: in 15 presidential elections from 1884 to 1940, the favourite won 11 times and three races were essentially tied (in odds and result). Only once did markets miss the mark. More

In markets it is known as the “Trump trade”, a bet that Donald Trump’s return to the White House would herald more inflation and higher interest rates. Many of Mr Trump’s core policies push in this direction: tariffs would add to import costs, deportations of immigrants could push up wages and deficit-financed tax cuts would juice the economy. Amid mounting inflation, the Federal Reserve would have little choice but to opt for higher rates.In the wake of Joe Biden’s calamitous debate on June 27th, a preview of the trade played out. As investors grappled with the likelihood that Mr Trump would romp to the presidency, they sold off Treasuries, which led to a brief surge in yields. The big fear is that much worse would come to pass. If Mr Trump fought the Fed on rates, he might sow doubts about the central bank’s independence, undermining confidence in America’s markets and the dollar. That is the economic nightmare scenario for a second Trump administration.But as with any nightmare, the bogeyman of Trumponomics may be more terrible than its reality. Mr Trump and his advisers have many rotten ideas. They also have some decent ones. And their ability to implement damaging policies will be constrained, with Congress, America’s institutions and markets all serving as checks. More

China’s yearslong effort to develop robotaxis is starting to gain traction with consumers —but it’s also rattling taxi drivers worried about losing their jobs as a result of increasing competition.
Baidu’s robotaxi unit Apollo Go became one of the top 10 trending hashtags on social media platform Weibo on Wednesday amid reports of rapid user adoption in Wuhan city, where the company began operating fully staffless vehicles in certain districts 24/7 in March.
China had more than 7 million registered ride-hailing drivers as of the end of May, roughly twice as many versus the 3.51 million drivers reported for July 2021, according to the Ministry of Transport.

More than 70% of Baidu Apollo Go robotaxi rides in Wuhan were fully driverless as of April, and the company said in May it expected 100% of the rides to be completely autonomous in coming quarters.
Bloomberg | Bloomberg | Getty Images

BEIJING — China’s yearslong effort to develop robotaxis is starting to gain traction with consumers — but it’s also rattling taxi drivers worried about losing their jobs as a result of increasing competition.
Just as GM’s Cruise and Alphabet’s Waymo have rolled out driverless taxis in San Francisco and Phoenix, Arizona, local Chinese governments from Beijing to Guangzhou have allowed domestic players to operate robotaxi rides for the public.

This week, the rising prominence of robotaxis in China began trending on social media.
As of Thursday morning, videos about fully autonomous driving taxi experiences were the 12th most popular topic on Douyin, Bytedance’s China version of TikTok.
Baidu’s robotaxi unit Apollo Go became one of the top 10 trending hashtags on social media platform Weibo on Wednesday following reports of rapid user adoption in Wuhan city.
The company began operating fully driverless vehicles in certain districts of Wuhan, 24/7 in March.
Wuhan is the largest operational region for Baidu’s Apollo Go, one of the largest robotaxi operators in China. The company has more than 500 robotaxis operating in the city and plans to increase that to 1,000 by the end of the year.

When contacted by CNBC, Baidu had no official updates to share.
The increased attention on robotaxis comes as major Chinese cities ramp up support, while smaller cities restricted ride-hailing apps in the last few months.

Top social media posts on Wednesday were quick to extrapolate from Wuhan’s robotaxi tests, predicting an impending nationwide rollout and spawning hashtags like: “Are driverless ride-hailing cars stealing people’s rice bowls.” That’s according to a CNBC translation of the Chinese.
Also making the rounds on social media was an appeal in late June by a taxi company in Wuhan seeking reduced taxes and more restrictions on Apollo Go robotaxis as well as the number of ride-hailing cars.
CNBC was unable to independently verify the document, which claimed the taxi company had to stop operating four of its 159-car fleet since April due to falling income.
Wage growth in China overall has slowed from around 10% annual increases prior to the pandemic, to 4% in recent years, according to Goldman Sachs analysis published last month. The pace improved to 5.6% year-on-year growth in the first quarter, the report said.

Ride-hailing drivers on the rise

A surge of new companies and ride-hailing drivers have meanwhile prompted some local governments to restrict the industry.
The city of Guyuan in Ningxia autonomous region announced that as of May 12, it was suspending online ride-hailing businesses.
“Our city’s taxi market is already saturated,” the announcement said in Chinese, translated by CNBC.
Separately, the southwestern city of Guiyang had suspended new ride-hailing licenses for half a year through June. The announcement said authorities were able to remove some non-compliant ride-hailing businesses and cars.
China had more than 7 million registered ride-hailing drivers as of the end of May, according to the Ministry of Transport.
That’s roughly twice as many versus the 3.51 million drivers reported for July 2021, and 570,000 more drivers than the ministry reported as of November.
In comparison, the U.S. had nearly 400,000 taxi and ride-hailing drivers, shuttle drivers and chauffeurs in 2022, according to the latest available figures from the Bureau of Labor Statistics.
The number of ride-hailing companies in China has also climbed, from 241 in 2021 to 351 in May this year, according to the Ministry of Transport.

China pushes ahead with robotaxi support

Multiple Chinese ministries in January released a plan to promote cloud-connected cars, including tests of at least 200 low-speed unmanned vehicles in each pilot region. Last week, the same authorities released a list of 20 initial pilot cities, including Beijing, Shanghai, Chongqing and Wuhan.
Those cities have already allowed robotaxi operators to test cars in suburban areas.
Beijing city in November 2021 started to allow Baidu’s Apollo Go and startup Pony.ai to collect fares from the public for rides with a safety driver inside the robotaxis.
Last year, Beijing city let the operators remove all staff from a few of the vehicles. The city last month released draft rules that put the responsibility of a robotaxi traffic violation on the car owner and manager if there is no driver.
The public-facing rides are currently subsidized, and the number of vehicles on the road are still far lower than those of traditional taxis.
The Apollo Go app showed Thursday that a 45-minute robotaxi ride from Daxing airport to a southern suburb of Beijing would be fully subsidized – the entire 193.84 yuan ($26.66) cost was waived. The app also showed a 16-minute robotaxi ride within that Beijing suburb would cost 10.36 yuan, about half the 20 yuan fare listed by ride-hailing apps, which can call taxis.

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Baidu CEO Robin Li told investors in May that more than 70% of Apollo Go robotaxi rides in April were fully driverless, with no human staff inside. He predicted that share would reach 100% in the coming quarters — and allow Apollo Go to break even in Wuhan first.
The city is the capital of Hubei province, which proclaimed in a June 1 article its efforts to become the world’s first autonomous driving city.
“I just got my driver’s license … and there’s already driverless cars? What was the point of me taking the test?” according to a Chinese comment on the article, translated by CNBC.
“In the short term, there’s no way autonomous driving can replace drivers,” the Hubei government account said in its reply. More

Wall Street is getting ready for a new batch of cryptocurrency exchange-traded funds: ethereum. 
Spot ether ETFs could hit the market as soon as this week, pending U.S. Securities and Exchange Commission approval, and Bitwise Asset Management’s Matthew Hougan plans to get in on the action.

“What you’re seeing is this sort of the birth of a new asset class,” the firm’s chief investment officer told CNBC’s “ETF Edge” on Monday.
Hougan’s firm is applying for spot ether ETFs.
“If you want to invest in the growth of tokenization, ethereum is like the picks and shovels play,” Hougan said. “It underpins all of it. … I think that is going to appeal to a lot of people.”
He thinks cryptocurrency ETFs overall are a multiyear story. Hougan is referring to the first spot bitcoin ETFs that launched in January. He sees their success as a good indicator of the future.
“It’s [bitcoin] moving into the mainstream,” he noted. “That’s going to be a multiyear story.”

Spot bitcoin ETFs have attracted about $15 billion since their launch and currently hold two of the top ETF inflows this year, according to FactSet.
Hougan views bitcoin’s recent success as unprecedented and sees it as a bullish indicator for spot ether ETFs. 
“If we get five or 10 or 15 billion dollars in the first two years of these ethereum ETFs, that is a massive runaway success,” Hougan said.

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