Finance

The Carnival Miracle cruise ship operated by Carnival Cruise Line is docked at Pier 27 in San Francisco, Sept. 30, 2022.
Justin Sullivan | Getty Images

Check out the companies making headlines before the bell:
Carnival, Royal Caribbean— The cruise lines both gained about 2% after being upgraded by Truist. The Wall Street firm moved Royal Caribbean to buy from hold and Carnival to hold from sell, citing forward-looking trends for 2024 and 2025 that look “exceptionally strong.” Truist maintained its hold rating on Norwegian Cruise Lines, which was up more than 1% in premarket trading.

Deere, CNH Industrial — The two stocks slid in the premarket after Evercore ISI downgraded each to in-line from outperform, citing agricultural production cuts. Deere fell 1.4%, CNH declined 1.2%.
Starbucks — Shares fell 1.2% after TD Cowen downgraded the coffee giant over the “worrisome” macro backdrop in China. The firm believes slower consumer spending in China could hit share growth and affect Starbucks’ multiple.
CVS Health — The pharma stock rose less than 1% after Evercore ISI upgraded CVS Health Tuesday to outperform from in-line, saying the stock is currently attractively valued.
Dell Technologies — Shares rose more than 1.2% after Daiwa Capital Markets upgraded the computer stock to outperform from market perform. The Wall Street firm hiked its price target to $80 per share from $50, implying roughly 16% upside from Monday’s close.
Super Micro Computer — The information technology stock added more than 2% after Barclays initiated coverage of Super Micro Computer on Tuesday with an overweight rating. The firm’s $327 price target represents nearly 34% upside from Monday’s close.

Planet Fitness — The recent CEO shakeup at the gym franchise was a contributing factor in JPMorgan downgrading the stock to neutral from overweight. Along with the downgrade, the firm cut its price target on Planet Fitness to $52 from $70, a move that still implies 7% upside. Shares fell about 2% premarket.
Rocket Lab — The aerospace stock plunged 22% after Rocket Lab’s first launch failure in more than two years Tuesday morning. Shares closed Monday at $5.04.
— CNBC’s Michelle Fox and Hakyung Kim contributed reporting More

Among China-focused investment firms, only four U.S. dollar-denominated venture capital funds established between 2015 and 2020 have at least returned investors all the money they put in.
That’s according to a new report “China’s Private Capital Landscape” from Preqin.
While those funds may have a few more years to go before they really need to show performance, their difficulties so far reflect a lack of IPOs — even before the latest market slump.

Pictured here is Shenzhen in southern China. The city is sometimes considered China’s Silicon Valley.
Nurphoto | Nurphoto | Getty Images

BEIJING — In the years since Alibaba’s U.S. listing in 2014, early-stage investing has drawn tens of billions of dollars into China with relatively little to show for it.
Among China-focused investment firms, only four U.S. dollar-denominated venture capital funds established between 2015 and 2020 have at least returned investors all the money they put in.

That’s according to a new report “China’s Private Capital Landscape” from Preqin, an alternative assets research firm. Alternative assets include venture capital, but not publicly traded stocks and bonds.
Preqin looked at an industry metric called distributed paid-in capital (DPI) and listed the 10 funds in the category with the highest DPI.
The other six have yet to give investors back all their money, not to mention any excess returns, the report showed. Preqin doesn’t track every single China VC fund, and only included those with data as of the end of last year or more recently.
While those funds may have a few more years to go before they really need to show performance, their difficulties so far reflect a lack of IPOs — even before the latest market slump.

“The most important trend is the switch of the investment cycle,” Reuben Lai, vice president, private capital, Greater China at Preqin, told CNBC in a phone interview earlier this month.

From around 2015 to 2018, fundraising in China “flourished,“ he said. Now, “people are focusing more on investment itself and exiting, the returns.”
In the world of early-stage investing, “limited partners” (typically institutions) give money to “general partners” (venture capital funds) to invest into startups. Once the startups go public or get acquired, it allows the funds to “exit” — and make a return they can share with the limited partners. The funds also earn asset management fees in the interim.
Fengshion Capital Investment Fund, LYFE Capital USD Fund II and GGV Capital V were the only U.S. dollar-denominated VC funds established between 2015 and 2020 that gave their investors back all their money — and then some, the Preqin data showed.

The market is tough. Not a lot of companies are able to get to the IPO stage.

Reuben Lai

The 10th best-performer, BioTrack Capital Fund I, only returned 8.1% of capital to its investors as of March, about five years since the $186 million fund was launched.
The same trend held true for U.S. dollar-denominated private equity funds established in that same 2015 to 2020 period — just four giving investors back more money than they’d put in, Preqin said.
The outperforming funds were: Loyal Valley Capital Advantage Fund I, Hillhouse Fund II, Oceanpine USD Fund I and HighLight Capital USD Fund II.
Sequoia didn’t make the top 10 lists for highest DPI, according to Preqin’s data. The Sequoia Capital China Growth Fund V ranked 6th on another metric, internal rate of return (IRR) among U.S. dollar-denominated private equity funds established between 2015 and 2020.
IRR is an estimate of expected annual returns based on cash flows and the valuation of unrealized assets.
Several of the funds with high DPI also did well on an IRR basis, the Preqin report showed.

IPO alternatives

Far more money, however, is still waiting to be returned to investors.
Private equity funds in China have about $1.3 trillion in assets under management, with at least $20 billion to $40 billion in exits every year, Alex Shum, a managing director at TPG NewQuest, said in early September at the AVCJ conference in Beijing, a major annual gathering of China-focused venture capital firms.
That means existing assets need roughly 20 to 30 years to exit, he said, noting the need to diversify away from IPOs to mergers and acquisitions, or general partner-led deals — or deals that involve the sale of an investment fund between different limited partners.
Preqin’s Lai said there’s been an uptick in such general partner-led deals.

“The market is tough. Not a lot of companies are able to get to the IPO stage. With the elongated fundraising period … people have to hold onto the portfolio a bit longer,” said Lai. “Hence they have to switch the owner using a secondary fund, transaction it to somebody else.”
Lai said it’s difficult to know what the returns on such transactions are.
“It’s a pretty secretive thing. People don’t want people to know they are doing secondary returns because it means they are doing badly,” he said. “We’re seeing [sellers] offering a more generous discount compared to the previous few years. People are, I guess you can say, more desperate.”

Another option is selling the company to one listed on China’s mainland stock market.
Jinjian Zhang, founding partner of venture capital firm Vitalbridge, said last week at the AVCJ conference that his firm sold an investment to a listed company in March, about three months after the initial deal.
That deal was one of 10 projects he said the fund invested in during the second half of 2022, as soon as the Shanghai lockdown was lifted.

For a long-term investor, today part of [the situation] is regulation, but part of it is the emotions brought about by regulation.

Jinjian Zhang
founding partner, Vitalbridge

In 2021, Zhang said Vitalbridge raised more money than it had aimed to, but the firm generally held off on new investments because the market was overvalued. Zhang said people who provided investment term sheets hadn’t actually seen the projects in question, and startups were demanding excessively high prices.
In the two years since, sentiment has shifted dramatically with a slew of regulation aimed at education, gaming and internet platform companies.
This year, Beijing has signaled a softer stance.

Read more about China from CNBC Pro

The U.S. and China last year also reached an audit agreement that reduces the risk of Chinese companies having to delist from U.S. stock exchanges.
Several China-based companies, mostly small, have listed in the U.S. so far this year.
“For a long-term investor, today part of [the situation] is regulation, but part of it is the emotions brought about by regulation,” Zhang said in Mandarin, translated by CNBC.
“So at this point, [if you] look beyond regulation to do a 10-year VC fund, there are lots of opportunities,” he said. “We are focused on what those opportunities are, not what the sentiment around regulation is.” More

In an aerial view, the Valero Houston refinery is seen on August 28, 2023 in Houston, Texas.
Brandon Bell | Getty Images

Check out the companies making headlines in midday trading.
Oil stocks — Petroleum refiners Valero Energy and Marathon Petroleum gained 1.4% and 1.5%, respectively, as West Texas Intermediate and Brent crude prices reached their highest levels since November, 2022. The oil services ETF and S&P 500 Energy Index both rose 1%.

Arm Holdings — Shares declined 7.4% on the back of the company’s blockbuster Nasdaq debut Thursday, when it surged nearly 25%. Bernstein initiated coverage of the chip designer with an underperform rating on Monday, saying it’s “too early” to name Arm an AI winner. Needham initiated coverage of the chip designer with a hold rating on Friday, saying Arm’s valuation looks “full” in a post-smartphone era.
Moderna — The pharmaceutical company lost more than 8% Monday, making it the biggest decliner in the S&P 500. Co-founder and board chairman Noubar Afeyan sold 15,000 shares for approximately $1.64 million, according to a Securities and Exchange Commission filing. Pharmaceutical peer Pfizer said in a press conference Monday that it expects a 24% vaccination rate for Covid-19 shots in the U.S. this year. Moderna’s updated Covid vaccines have been approved in both the U.S. and the U.K.  
Tesla — Shares of the electric vehicle maker slipped 3% after Goldman Sachs lowered its earnings estimate. Analyst Mark Delaney cited the potential for further price cuts and lower margins as reasons for the reduction.
PayPal — The payment platform slipped 1.5% following a downgrade to market perform from outperform by MoffetNathanson. The firm said PayP still faces challenges as a new CEO takes the helm.
Ralph Lauren — The luxury retailer saw its shares rise 0.7% after Guggenheim upgraded the stock to buy from neutral. The Wall Street firm said Ralph Lauren’s earnings are set to benefit from several cyclical tailwinds, including clean inventories, lower freight expenses and lower cotton cost, adding that the recent pullback has provided an attractive entry point.

Enphase Energy — Shares lost 2.6% after Citi lowered its price target on shares to $170 from $209 while keeping its buy rating. The new price target implies 41% upside from Friday’s close.
Tenable Holdings — Shares gained 2.6% after TD Cowen initiated coverage of the cybersecurity stock with an outperform rating. Cowen said Tenable appears well positioned to benefit from tailwinds in a total addressable market of $25 billion.
Vertex — Shares of the tax software stock climbed 2.4% Monday. Morgan Stanley resumed coverage of Vertex on Monday with an overweight rating. Analyst Chris Quintero highlighted the growth opportunity for the company following a strong investment cycle.
DoorDash — Shares of the food delivery service ended flat Monday, after adding as much as 1.6% midday. Mizuho upgraded the company to buy from neutral in a Monday note, citing continued market share gains.The company also expanded its partnership with Aldi to allow alcohol orders, in addition to adding new grocery providers, including Lowe’s Markets and Eataly.
Micron Technology — The stock gained 0.9% after Deutsche Bank upgraded the memory and storage semiconductor maker to buy from hold on Sunday, and also raised its target price. The firm said Micron’s pricing power in direct random access memory is hitting an inflection point, and could push the company to beat expectations for its fiscal first-quarter revenue and earnings guidance in November.
Paramount Global — Shares of the entertainment company fell 3.2% Monday. Raymond James began research coverage with a market perform rating, while giving peers Disney and Warner Bros Discovery outperform ratings.
Simply Good Foods — Shares of the food and beverage company added 3.6% following a Morgan Stanley upgrade to overweight from equal-weight on Monday. The investment bank bumped up the stock’s price target to $40 from $37, citing Simply Good Foods’ diverse product offering and shifting consumer preferences to healthier choices as catalysts.
Iridium Communications – The satellite company’s stock jumped more than 5% following an upgrade from Deutsche Bank to buy from hold. The firm said it sees an attractive entry point for Iridium shares, which have plunged 19.4% quarter to date. 
ASGN — Shares of the digital innovations solutions company rallied nearly 3% Monday. Wells Fargo started research coverage with an overweight rating on the company, encouraging investors to buy the dip. The stock is little changed in 2023.
— CNBC’s Alex Harring, Brian Evans, Samantha Subin, Yun Li, Lisa Kailai Han, Pia Singh and Michelle Fox contributed reporting More

A pay transparency law in New York state took effect on Sunday. Certain employers are required to disclose a salary range in job advertisements.
California, Colorado and Washington state have adopted similar laws since 2021. Various cities and municipalities have passed laws, too.
In August, 50% of online job listings advertised salary, up from 18.4% in February 2020, according to Indeed Hiring Lab data.

Westend61 | Westend61 | Getty Images

Pay transparency is on the rise for job applicants — and momentum suggests that trend will continue, experts said.
In August, 50% of online job listings advertised salary, up from 18.4% in February 2020, according to Indeed Hiring Lab, the economic research arm of career site Indeed. Such businesses disclose an exact salary or a salary range.

The growth is largely attributable to recent pay transparency laws enacted by states and municipalities. In addition, job seekers also recently had historically high leverage as employers clamored to hire workers at the reopening of post-pandemic economy.
“With the growth of such pay transparency, the lingering norms and policies around pay secrecy have simply lost their teeth,” Tomasz Obloj and Todd Zenger, professors at Indiana University and the University of Utah, respectively, recently wrote in Harvard Business Review.
More from Personal Finance:Tipping in restaurants falls for the first time in yearsThe wage gap costs women $1.6 trillion a year, new report findsWomen are likely to face financial curveballs in retirement
It appears pay transparency rates “will continue to climb,” said Cory Stahle, an economist at Indeed.
The Indeed stats don’t include ads that post only a maximum salary, due to the ambiguity of the practice, Stahle said. (Those might say a worker can earn “up to” $20 an hour, without stipulating a floor, for example.)

New York just adopted a pay transparency rule

New York on Sunday became the latest state to adopt a pay transparency law. Employers in the state with at least four employees must make a “good faith” salary disclosure in job postings.
It joins California, Colorado and Washington state, as well as New York City.
The pay transparency movement is relatively new. Colorado was the first state to pass such a law, in 2019, and it took effect on Jan. 1, 2021.

Other local governments — like the city of Ithaca, along with Albany and Westchester counties in New York, and Jersey City in New Jersey — have enacted pay transparency laws, according to the National Conference of State Legislatures.
Other states have taken “a slightly more flexible approach,” NCSL said.
For instance, states and municipalities such as Cincinnati and Toledo in Ohio; Maryland; Connecticut; Rhode Island; and Nevada have passed laws that allow employers to disclose salary ranges to job applicants upon request, according to the National Women’s Law Center.
A “profusion” of websites — like Glassdoor.com, Payscale.com, and Salary.com — have also provided “rather open access to employer pay information,” Obloj and Zenger said.

There are pros and cons

Westend61 | Westend61 | Getty Images

Greater access to salary information in job postings poses clear benefits for both workers and businesses, experts said.
For instance, transparency can help close persistent pay gaps, especially for women and people of color, said Mandi Woodruff-Santos, a career and money coach.
“It levels the playing field,” she said. “At least they have a starting-off point.”
Salary information also reduces frictions in applying and hiring, since workers can more easily filter and determine the jobs for which they’d prefer to apply, Stahle at Indeed said. It also might help young workers and recent graduates when doing career planning, he said.

It levels the playing field. At least they have a starting-off point.

Mandi Woodruff-Santos
career and money coach

Further, 75% of job seekers are more likely to apply for a job if the salary range is listed in the posting, according to a 2022 Indeed survey. Fifty-six percent are more likely to apply for a company — even if they don’t recognize the company name — if the salary range is listed, Indeed found.
However, there may be drawbacks.
For one, pay transparency may lower overall wages of the broader population of employees, even while raising them for the “inequitably underpaid,” Obloj and Zenger said. That’s because, data suggests, employers might push back against salary negotiations and the practice may therefore “lower employees’ relative bargaining power,” they said.
The practice might also lower worker productivity and change workers’ on-the-job priorities, the duo wrote.

‘There’s still plenty to negotiate’ beyond salary    

Of course, applicants aren’t necessarily beholden to the salary or the pay range posted on a job ad, Woodruff-Santos said. They can ask for more.
“I wouldn’t take it as the final, final word until you’ve asked and they’ve told you,” she said.
Even if there’s not wiggle room on salary, “there’s still plenty to negotiate,” Woodruff-Santos added.
The “big whale” is work-from-home flexibility, which isn’t a direct form of financial compensation but offers value to many workers, she said.

Workers might also be leaving money on the table when quitting an old job, and a new employer can help eat some or all of that financial cost, she said. For example, workers might have to pay back a signing bonus if they depart an employer before the end of a contract period; they might also have an unvested 401(k) match or restricted stock units, for which a new employer may be able to offer financial compensation, Woodruff-Santos said.
Workers may also be able to negotiate a relocation-benefit package if they must move for a new job, or a professional-development budget allowing them to attend conferences or classes to invest in their skills.
They should also generally consider other forms of compensation when applying for a job: wellness benefits like mental health services; health insurance; commuter benefits; tuition reimbursement; retirement benefits; and dependent-care flexible spending accounts, for example, Woodruff-Santos said. More

Morgan Stanley plans to announce that an assistant it created with OpenAI’s latest software is “fully live” for financial advisors and their support staff.
Called the AI @ Morgan Stanley Assistant, the tool gives financial advisors speedy access to a database of about 100,000 research reports and documents.
One adjustment for advisors is that they’ll need to phrase questions in full sentences as though they were speaking to a human assistant, instead of leaning on keywords.

Shannon Stapleton | Reuters

Morgan Stanley has officially kicked off the generative AI era on Wall Street.
The bank plans to announce Monday that the assistant it created with OpenAI’s latest generative AI software is “fully live” for all financial advisors and their support staff, according to a memo obtained by CNBC.

“Financial advisors will always be the center of Morgan Stanley wealth management’s universe,” Morgan Stanley co-President Andy Saperstein said in the memo. “We also believe that generative AI will revolutionize client interactions, bring new efficiencies to advisor practices, and ultimately help free up time to do what you do best: serve your clients.”
Morgan Stanley, a top investment bank and wealth management juggernaut, made waves in March when it announced that it had been working on an assistant based on OpenAI’s GPT-4. Competitors including Goldman Sachs and JPMorgan Chase have announced projects based on generative AI technology. But Morgan Stanley is the first major Wall Street firm to put a bespoke solution based on GPT-4 in employees’ hands, according to Jeff McMillan, head of analytics, data and innovation at Morgan Stanley wealth management.
Called the AI @ Morgan Stanley Assistant, the tool gives financial advisors speedy access to the bank’s “intellectual capital,” a database of about 100,000 research reports and documents, McMillan said in a recent interview.
By saving advisors and customer service employees time when it comes to questions about markets, recommendations and internal processes, the assistant frees them to engage more with clients, he said.

Human speech

The tool, a simple window of text, belies the difficulty in making sure the program would produce quality responses, according to McMillan. The bank spent months curating documents and using human experts to test responses, he said.

One adjustment for advisors is that they’ll need to phrase questions in full sentences as though they were speaking to a human, instead of leaning on keywords as they would with a search engine query, said McMillan.
“No different than how I would ask you a question, that’s how you talk to this machine,” he said. “People are not accustomed to that.”
It’s just the first in a series of solutions based on generative AI planned by the bank, according to McMillan. The firm is piloting a tool called Debrief that automatically summarizes the content of client meetings and generates follow-up emails.

‘Completely disruptive’

Using OpenAI software required a fundamentally different approach than with previous technology efforts, he said. OpenAI’s ChatGPT uses large language models, or LLMs, to create human-sounding responses to questions.
“The traditional way in which you would solve those things is you would write code,” McMillan said. “In the new world, you give examples of what ‘good’ looks like, and the system learns what good is. It’s actually able to ‘reason’ and apply logic that a human would apply.”
Excitement over AI has bolstered the stock market this year and forced entire industries to contend with its implications, leading some experts to declare it the next foundational technology.
“I’ve never seen anything like this in my career, and I’ve been doing artificial intelligence for 20 years,” McMillan said. “We saw a window of opportunity that was just completely disruptive, and I think as an organization, we didn’t want to get left behind.” More

Your Money

The wage gap costs women in the U.S. about $1.6 trillion a year, a new report finds.
Women earned 78 cents for every dollar that men made in 2022, according to the National Partnership for Women and Families.
“We’ve had the pay gap for so long, people have become desensitized to it and think it’s normal,” said Jocelyn Frye, the group’s president.

Marco Vdm | E+ | Getty Images

The wage gap costs women in the U.S. about $1.6 trillion a year, a new report finds.
Women earned 78 cents for every dollar that men made in 2022, according to National Partnership for Women and Families.

Researchers calculated the total cost to women of the wage gap by using statistics from the U.S. Census Bureau, specifically data on all women who worked, whether in full- or part-time jobs, and those who took time off for illness or caregiving.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

“We’ve had the pay gap for so long, people have become desensitized to it and think it’s normal,” said Jocelyn Frye, president of the National Partnership for Women and Families. “But it’s not anything that we should consider normal, and we ought not to normalize disparities that ought not to exist.”
While the numbers are discouraging, experts say the information should motivate women to be more aggressive during pay negotiations.
“I don’t want it to dissuade women or make them feel less motivated to go out there and get the pay they deserve,” said career and money expert Mandi Woodruff-Santos.

3 factors behind the wage gap

Three factors are contributing to the persistent pay gap, said Frye:

Caregiving responsibilities: Women on average tend to work fewer hours because they assume many of the caregiving responsibilities in their families, she said. For instance, women last year spent roughly 2.68 hours a day caring for household children under the age of 6, according to the American Time Use Survey. 
Occupational segregation: Women are concentrated in jobs that pay less and are often shut out from higher-paying jobs through occupational segregation, she said. Forty-two percent of the wage gap is the result of occupational segregation, which was exacerbated by the pandemic, the U.S. Department of Labor has found.
Workplace discrimination: Women continue to face gender bias and discrimination. To that point, half of U.S. adults said women being treated differently by employers contributes to the pay gap, the Pew Research Center found.

“If you intervene in those three issues alone, you could cut that gap significantly,” said Frye.

What the pay gap means for women of color

Asian American women earned the most among female workers, making 89 cents for every dollar white, non-Hispanic male workers earn, the National Partnership for Women and Families found.
That pay scale worsens for each major racial or ethnic group in the country, with white female workers paid 74 cents to the dollar; Black female workers, 66 cents; and Latina female workers, 52 cents. More

A DoorDash Inc. delivery bag sits on the floor at Chef Geoff’s restaurant in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images

Check out the companies making headlines in premarket trading.
PayPal – Shares of the payments giant fell more than 1% premarket after MoffettNathanson downgraded the stock to market perform from outperform and cut its price target 10 days before PayPal’s next CEO, Alex Chriss, is scheduled to take the helm. The firm said it’s excited about the new leadership, but that Chriss could have a challenging start after a difficult 18 to 24 months. MoffettNathanson sees the potential for further downside to its estimates.

DoorDash — Shares added nearly 2% after being upgraded by Mizuho Securities to buy from neutral on Sunday. The Wall Street firm said solid market share and strong consumer spending on food should help the delivery company surpass forecasts in the second half.
Micron Technology — The stock gained about 1.6% premarket after Deutsche Bank upgraded the memory and storage solutions company to buy from hold on Sunday, and also raised its target price. The firm said Micron’s pricing power with semiconductor direct random access memory is hitting an inflection point, and could push the company to beat first-quarter expectations.
Arm Holdings — Shares of the semiconductor company fell 3.7% in premarket trading as the newly public Arm tries to find its level in the market. Bernstein initiated coverage on Monday with an underperform rating, saying it was too early to say Arm will be an AI winner.
— CNBC’s Tanaya Macheel, Jesse Pound and Michelle Fox Theobald contributed reporting. More

Venture capital firms in China invested $26.7 billion in 3,072 deals in the first half of 2023, PitchBook said.
On an annualized basis, that indicates a 31.4% drop from 2022 levels, — on pace to fall below that of 2016, the report said.
On the fundraising front, PitchBook said only three funds denominated in U.S. dollars closed in the first half of the year.

Chinese ride-hailing giant Didi delisted from the New York Stock Exchange just months after its June 2021 IPO after a now-resolved regulatory probe that had forced Didi to suspend new user registrations.
Brendan McDermid | Reuters

BEIJING — Slowing growth and geopolitical tensions are stifling the Chinese startup world that once spawned unicorns such as ByteDance and Didi, according to a PitchBook report Monday.
China’s economic rebound from the pandemic has slowed. U.S.-China tensions have spilled over to finance, dampening already subdued market sentiment. Chinese regulation in the last two years has also made it harder for companies to go public overseas.

Venture capital firms in China invested $26.7 billion in 3,072 deals in the first half of 2023, PitchBook said.
On an annualized basis, that indicates a 31.4% drop from 2022 levels — on pace to fall below that of 2016, the report said.
Most investments were also small.
The annualized value of mega-deals — $100 million or larger — were on pace for their lowest level since 2015, PitchBook said.

While China’s economy showed signs of picking up in the last several weeks, the slowdown in early-stage investing is a steep one to recover from.

Second-quarter deals marked the fourth-consecutive quarter of declines in deal value, according to PitchBook.
A drop in foreign participation was a factor.
The niche but once-burgeoning world of early-stage investors in China had seen firms raise billions of dollars from overseas institutions to invest in domestic startups, which would then hold an initial public offering in the U.S.

Anecdotally, we’ve heard that some US investors have pulled back from allocating to China mainly due to geopolitical concerns and several other factors…

A record low of 10% of deals included an investor based outside of Greater China, down from about 16% in 2018, PitchBook said. On the fundraising front, the report said only three funds denominated in U.S. dollars closed in the first half of the year.
“Anecdotally, we’ve heard that some US investors have pulled back from allocating to China mainly due to geopolitical concerns and several other factors, including a Chinese economic slowdown and crackdowns on the tech sector,” the report said.

Read more about China from CNBC Pro

Growth of yuan-denominated funds and mid-sized funds helped boost overall Greater China fundraising activity to $28 billion — on pace to exceed 2022 levels, but still a sharp slowdown from $131.4 billion raised in 2018, PitchBook said.
Difficulties at the end of the venture capital investing process persisted as market sentiment for IPOs in Hong Kong and the U.S. remained subdued.
The number of exits in the first half of the year fell to 130 from 177 in the second half of 2022, while exit value fell to $77.5 billion from $100.2 billion, PitchBook said. More