Finance

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In 2014 tom price, a commodities strategist, visited a “funny little building” in China’s south-west. It was a warehouse where Fanya, a local trading firm, stored metals including gallium, germanium and indium. The company’s “stockpiles” simply sat in boxes on shelves. Yet for some of the minerals, these meagre supplies represented the majority of global stocks. A year later Fanya was closed by China’s government, which kept the stash—as well as the reserves and plants to produce more. Today Western countries wish they, too, could produce some more. On July 4th China announced that it would restrict exports of gallium and germanium, of which it supplied 98% and 60% of global output, respectively, in 2022. Produced in tiny quantities, the metals have little commercial value. They are nevertheless crucial for some military equipment, including lasers, radars and spy satellites. The decision highlights that “critical” minerals are not limited to those which underpin economic growth, such as nickel or lithium. A dozen obscure cousins are also vital for a more basic need: maintaining armies. The eclectic family of war minerals spans generations. Antimony, known in biblical times as a medicine and cosmetic, is a flame retardant used in cable sheathing and ammunition. Vanadium, recognised for its resistance to fatigue since the 1900s, is blended with aluminium in airframes. Indium, a soft, malleable metal, has been used to coat bearings in aircraft engines since the second world war. The family grew rapidly in the cold war. Long before cobalt emerged as a battery material, nuclear tests in the 1950s showed that it was resistant to high temperatures. The blue metal was soon added to the alloys that make armour-penetrating munitions. Titanium—as strong as steel but 45% lighter—also emerged as an ideal weapons material. So did tungsten, which has the highest melting point of any metal and is vital for warheads. Tiny amounts of beryllium, blended with copper, produce a brilliant conductor of electricity and heat that resists deformation over time. The superpowers of other minerals became known decades later, as military technology made further leaps. Gallium goes into the chipsets of communication systems, fibre-optic networks and avionic sensors. Germanium, which is transparent to infrared radiation, is used in night-vision goggles. Rare earths go into high-performance magnets. Very small additions of niobium—as little as 200 grams a tonne—make steel much tougher. The metal is a frequent flyer in modern jet engines. Beyond their varied properties, this group of mighty minerals share certain family traits. The first is that they are rarely, if ever, found in pure form naturally. Rather, they are often a by-product of the refining of other metals. Gallium and germanium compounds, for example, are found in trace amounts in zinc ores. Vanadium occurs in more than 60 different minerals. Producing them is therefore costly, technical, energy-intensive and polluting. And because the global market is small, countries that invested in production early can keep costs low, giving them an impregnable advantage. This explains why the production of war minerals is extremely concentrated (see chart 1). For each of our 13 war materials, the top three exporters account for more than 60% of global supply. China is the biggest producer, by far, for eight of these minerals; Congo, a troubled mining country, tops the ranking for another two; Brazil, a more reliable trading partner, produces nine-tenths of the world’s niobium, though most of it is sent to China. Many minerals are impossible to replace in the near term, especially for cutting-edge military uses. When substitution is possible, performance usually suffers. The combination of concentrated production, complex refining and critical uses means trading happens under the radar. The volumes are too small, and transacting parties too few, for them to be sold on an exchange. Because there are no spot transactions, prices are not reported. Would-be buyers have to rely on estimates. These vary widely. Vanadium is relatively cheap: around $25 per kilogram. Hafnium might cost you $1,200 for the same amount. All this makes building new supply chains much more difficult. America is investing in a purification facility for rare-earth metals in Texas, which is scheduled to come online in 2025. It is nudging Australia and Canada, the only two Western countries with decent reserves, to produce and export more rare metals. It is also doing its best to forge ties with emerging markets in the Indo-Pacific, where there are deposits waiting to be tapped.Even so, America’s army will remain vulnerable to a supply squeeze until at least 2030, reckons Scott Young of Eurasia Group, a consultancy. Its cold-war stockpiles, once sizeable, were liquidated after the fall of the Berlin Wall (see chart 2). Its strategic stash now mostly comprises energy commodities such as oil and gas. Weaning themselves off China might take decades longer for Europe, Japan and South Korea, which are devoid of deposits and lack America’s diplomatic clout. That does not mean their armies will run short of high-tech metals, but they will probably have to buy them from America—at a price already buoyed by their ally’s scramble to rebuild stockpiles. Last year’s gas drama, prompted by Russia’s invasion of Ukraine, amplified Europe’s dependence on American fuel. The metals squeeze threatens to make Uncle Sam a still bigger magnet for panicked procurement officials. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

Public, the U.S. brokerage startup, is rolling out its platform in the U.K. on Thursday.
The company will offer British users the ability to trade 5,000 U.S.-listed securities, including stocks and ETFs.
The move will see Public compete with a flurry of well-established digital brokerage platforms, as well as upstarts like Revolut and Freetrade.

The Public.com app displayed on a smartphone.
Gabby Jones | Bloomberg | Getty Images

American stock brokerage startup Public launched its services in the U.K. Thursday, marking its first international expansion its launch in 2017.
The app, backed by celebrities including Will Smith and skateboarding legend Tony Hawk, will offer U.K. users commission-free trading in over 5,000 U.S.-listed stocks during the country’s regular trading hours.

Public hopes to broaden its U.K. offering over time to include other asset classes already available in the U.S., such as ETFs, U.S. government bonds, and cryptoassets. The company also plans to launch an “investment plans” tool in the future that lets users come up with customized recurring investments.
Public’s U.K. debut will see it compete with a flurry of well-established digital brokerage firms like AJ Bell and Hargreaves Lansdown, which make money from commission charges and management fees, as well as upstarts such as Revolut, Freetrade and eToro, where revenue comes mainly from subscriptions and other fees.
It is a heavily congested market — but Leif Abraham, Public’s co-CEO, touted the company’s lower foreign exchange fees as one element separating it from the pack in the U.K. 
“Most of our competitors in the U.K. will charge currency conversion fees on every single trade,” Abraham told CNBC in an interview. “We only do it with the money deposited, and our fees are going to be dramatically lower than most of our competitors.”
Public will charge 30 basis points, or 0.3%, on each deposit to convert British pounds into U.S. dollars.

The firm has European roots, having been founded in September 2019 by Jannick Malling and Abraham, from Denmark and Germany, respectively, who now serve as co-CEOs.
The platform, which lets people build portfolios and invest in stocks and cryptocurrency, hit more than 1 million users in 2021.
It benefited significantly from the GameStop saga of early 2021, which saw the share price of the U.S. game retailer and other heavily-shorted companies skyrocket on the back of buzz from an online community of investors.
The period shone a light on the controversial “Payment for Order Flow” (PFOF) practice, where brokerages are paid by market makers like Citadel Securities to route customer orders to the firm.
In 2021, Public removed PFOF from its platform, concerned it was driving customers to unhealthy day trading habits. It also added “safety labels” to certain stocks to inform users when certain companies are facing heightened bouts of volatility or the risk of bankruptcy.
PFOF is already banned in the U.K., while the European Union is planning to follow suit with its own prohibition of the practice.
Public has gone down the route of partnering with a firm that is already regulated to provide its services in the U.K., rather than apply for its own license. “A ton of fintechs have gone through this route,” Dann Bibas, the company’s head of international, told CNBC.
Public will operate in the U.K. as an appointed representative of Khepri Advisers Limited, which is authorized and regulated by the Financial Conduct Authority.

Bibas said that, for now, the U.K. is the only country Public is focusing on for its international expansion. In the future, it hopes to take learnings from its U.K. launch to open in other European markets. Public has offices in New York, Copenhagen, London, and Amsterdam.

Tough market conditions

Online brokerage platforms have had a tough time lately. The rising cost of living has made it tougher for consumers to part with the cash they were flush with during the days of Covid. 
Freetrade, the U.K. brokerage startup, slashed its valuation by a whopping 65% last month to £225m in a crowdfunding round, citing a “different market environment.”
Abraham said Public didn’t face the same problems facing many retail brokerage apps, which have been left facing a funding crunch due to a rise in interest rates.
“We have a very healthy cash balance,” Abraham said. “Hence why we can do things like expanding into the U.K., the U.S., and so on.”
Public, he said, saw no reason to raise cash at this stage. It has already raised $300 million from investors including Accel, Greycroft and Tiger Global. The company was last valued at $1.2 billion, giving it coveted “unicorn” status.
Abraham said that higher interest rates have actually benefited Public to some extent, as it is earning yields on the cash customers deposit and seeing increased interest in other assets such as U.S. Treasurys.

Can Public succeed where others have failed?

Public is hoping to avoid the fate of its U.S. peer Robinhood, which abandoned its U.K. operation in 2020 to prioritize its home market. Abraham said he’s convinced this won’t happen in Public’s case.
“We don’t have to reinvent our business model in order to enter a new market,” he told CNBC.
“It’s not like – to take the other extreme – like the last-mile delivery company, where you have to now have a massive footprint,” Abraham added. “We can actually expand in other markets with a fairly lean team that’s responsible for that.”
Robinhood does have plans to reenter the U.K., however – it is set to launch in the country at some point in the near future following its acquisition of cryptocurrency trading app Ziglu last year. More

A pedestrian walks by a Domino’s Pizza restaurant in San Francisco, Feb. 23, 2023.
Justin Sullivan | Getty Images News | Getty Images

Check out the companies making the biggest moves midday.
Domino’s Pizza — The stock popped 11.09% after Domino’s announced U.S. consumers can now order its products through Uber’s Uber Eats and Postmates apps. The agreement has the potential to add incremental orders from Uber Eats to 70% of Domino’s stores, the company said.

DraftKings — Shares of the sports betting app rallied 5.28% following an upgrade to buy by analysts at Bank of America. The Wall Street firm cited an “inflection point” in margins and profitability.
Roku — Shares of the streaming provider gained 1.18%. The company said Tuesday it’s teaming up with Shopify to allow viewers to purchase straight from Roku TV. Viewers will be able to simply press a button on their Roku remote to place an order upon seeing an ad for a Shopify merchant, the company said.
Lazard, Jefferies Financial — Shares of Lazard added 4.22% while Jefferies gained 4.88% after both were upgraded by Morgan Stanley, which said it expects growing merger and acquisition activity. Lazard was upgraded to overweight from equal weight, while Jefferies was upgraded to equal weight from underweight.
Bank stocks — Bank stocks jumped after consumer prices came in lighter than expected. Citigroupand Goldman Sachs gained 1.83% and 1.72%, respectively. KeyCorp rallied 3.12%, while Zions added 2.81% and Comerica Bancorporation rose 3.12%.
Lucid Group — The electric-vehicle maker sank 11.82% after its second-quarter deliveries fell short of analysts’ estimates. Lucid delivered 1,404 of its electric Air luxury sedans, while analysts polled by FactSet expected 2,000 deliveries.

SunPower — Shares jumped 8.19% after the solar power company was upgraded by Raymond James to strong buy from outperform. Analyst Pavel Molchanov called this year’s sell-off “excessive.” His price target of $21 implies 120% upside from Tuesday’s close.
Stellantis — The vehicle manufacturer stock added 2.67% after being upgraded by Bank of America to buy. The firm said Stellantis could benefit against peers due to ample exposure to the U.S.
Beyond Meat — The plant-based meat alternative rose 13.52% following the company’s announcement Tuesday that its steak product will now be sold at about 14,000 stores across the U.S., including Wegmans and Whole Foods. Beyond Meat shares added 4% in the previous session.
Acadia Healthcare — Shares tumbled 5.12% after the company revealed in a filing that a New Mexico jury found Acadia responsible for damages totaling $485 million in a lawsuit. According to reports, the suit is related to a sexual assault in one of its now-defunct residential treatment facilities. Acadia said it is evaluating all legal options and will challenge the verdict.
Holley Inc. — Shares of the auto parts maker jumped 21.14% following upgrades by Bank of America and JPMorgan Chase. JPMorgan said the company was “back on track,” while Bank of America noted it is “firing on all cylinders.”
— CNBC’s Yun Li, Alex Harring, Samantha Subin and Michael Bloom contributed reporting. More

Packages of Beyond Meat Inc.’s plant-based products, Beyond Burger and Beyond Sausage, are displayed at a supermarket in Katwijk, Netherlands, November 19, 2020.
Yuriko Nakao | Getty Images

Check out the companies making headlines in premarket trading.
Roku — The streaming provider climbed 2% before the opening bell. A day earlier, the company announced a partnership with Shopify to allow purchases straight from Roku TV.

Beyond Meat — The plant based meat alternative added 2% on Wednesday morning. The company said Tuesday that its steak product would expand to be now be sold at roughly 14,000 stores across the U.S., including Whole Foods and Wegmans. Beyond Meat shares popped 4% in the previous session.
SunPower — The solar power company soared nearly 6% in premarket trading after an upgrade from Raymond James, which said the stock’s recent weakness is “excessive.”
Carvana — The car retailer climbed roughly 2% after an upgrade from JMP to outperform Wednesday morning, with analyst Nicholas Jones noting the company could be on the cusp of a return to growth thanks to “durable positive” EBITDA.
Netflix — The streaming giant added 0.4% Wednesday morning after UBS increased its price target on Netflix to $525 per share, implying upside of nearly 20%. Netflix will report quarterly results on July 19.
Holley Inc. — The auto parts company soared more than 15% after an upgrade to buy from Bank of America, citing improving sales momentum and better sourcing. JPMorgan Chase upgrades shares to overweight from neutral.
Stellantis — The vehicle manufacturer gained 2% after an upgrade to buy from Bank of America, which said the company could benefit against peers thanks to ample exposure to the U.S. More

John Kerry, special presidential envoy for climate, is set to visit Beijing from July 16 to 19, according to announcements from both the U.S. and China.
Kerry’s trip will mark the third time in a month that a high-level U.S. official has traveled to China for talks.
Climate talks were briefly suspended after then-U.S. House Speaker Nancy Pelosi visited Taiwan in August.

US climate envoy John Kerry (L) gestures as he speaks next to China’s special climate envoy Xie Zhenhua (R) during a session at the World Economic Forum annual meeting in Davos on May 24, 2022.
Fabrice Coffrini | Afp | Getty Images

BEIJING — John Kerry, special presidential envoy for climate, is set to visit Beijing from July 16 to 19, according to announcements from the U.S. and China.
“During meetings with [People’s Republic of China] officials, Secretary Kerry aims to engage with the PRC on addressing the climate crisis, including with respect to increasing implementation and ambition and promoting a successful COP28,” the U.S. State Department said in a statement.

Kerry’s trip will mark the third time in a month that a high-level U.S. official has traveled to China for talks.
Although the meetings have yet to yield specific action, they mark a resumption of in-person communication that fell off due to the pandemic and geopolitical tensions.
Treasury Secretary Janet Yellen ended a four-day trip to Beijing on Sunday. Secretary of State Antony Blinken visited Beijing in late June, months after he was originally scheduled to travel there in February.
Blinken postponed his initial plans after news of an alleged Chinese spy balloon over U.S. airspace. Beijing claims it was a weather balloon that blew off course.

While Blinken’s trip to China led to a general agreement on the need to increase flights between the two countries, the secretary of State said he failed to reinstate military-to-military communication.

“It’s clearly in the interest of both countries to avoid any kind of miscalculations, especially military,” Blinken said in an interview Tuesday with MSNBC’s Andrea Mitchell, according to a State Department transcript. “So that’s something we’ll continue to look for.”
Blinken added the “lengthy discussions” he and Yellen had covered where the U.S. and China have “deep differences,” as well as areas of cooperation. “That’s going to continue,” he said.

An area of cooperation

The U.S. and China have noted they can cooperate on climate and the macroeconomy. Climate talks were suspended after then-U.S. House Speaker Nancy Pelosi visited Taiwan in August. Her trip had angered Beijing, which considers the democratically self-ruled island part of its territory.
After U.S. President Joe Biden and Chinese President Xi Jinping met in person in November, the two countries resumed communication on climate issues.
Xie Zhenhua, China’s special climate envoy, in April attended a virtual meeting of the U.S.-led Major Economies Forum on Energy and Climate, according to a White House readout. Xie also attended a U.S.-led event at COP 27 in Egypt in November, Kerry said in a readout.
Regarding his upcoming trip to Beijing, the U.S. and China did not specify which Chinese officials Kerry would meet.
The two sides are set to “exchange views on cooperation for tackling climate change,” China’s Ministry of Ecology and Environment said in a statement.

Rising global temperatures

The average national temperature in June was 0.7 degrees Celsius (33 degrees Fahrenheit) higher than a year ago — and the second-hottest for the month going back to 1961, according to the China Meteorological Administration.
Daily temperature highs in Beijing have neared 37.8 degrees Celsius (100 degrees Fahrenheit) or more for the last few weeks. Different parts of the country have also seen heavy rainfall or warned of flash floods.
Meanwhile, wildfires in Canada due to record heat and drought have sent smoky air over New York and other U.S. cities.
Kerry, secretary of State during the Obama administration, became special presidential envoy for climate in 2021 when Biden was inaugurated.
Disclosure: NBCUniversal is the parent company of MSNBC and CNBC. More

Rafael Henrique | Lightrocket | Getty Images

Check out the companies making headlines in midday trading.
Shutterstock — Shares of the stock image, video and music provider jumped 9% after Shutterstock announced a six-year, expanded partnership with OpenAI, the maker of ChatGPT.

Newell Brands — Shares of the consumer goods company jumped more 11% after Canaccord initiated its coverage with a buy rating. The Wall Street firm said better days are ahead with new management at the helm, and it also expects modest top-line growth, improving profitability and cash flows, plus reduced leverage at the company.
Zillow — Zillow popped 9.1% after Piper Sandler upgraded the real estate stock to an overweight rating, saying new initiatives and improvement in the housing market could help boost shares more than 30%.
Salesforce — Shares gained nearly 4% after the software company announced it would hike prices across its cloud-based offerings starting in August.
WD-40 — WD-40 shares popped more than 18% on strong fiscal third-quarter results. The company said total net sales rose 15% from a year ago and issued better-than-expected guidance.
3M — 3M added 4.9% on the back of an upgrade to hold from underperform by Bank of America. The firm said litigation settlements, restructuring and the planned spinoff for the health-care business could all help the stock going forward.

Amazon — The stock added about 1.3% as the e-commerce giant kicked off its two-day Prime Day summer sale. Wells Fargo also named Amazon a top pick, citing better expectations for Amazon Web Services, Prime Day revenue growth and a positive risk/reward heading into earnings.
JetBlue Airways — The airline stock lost 2.6% after Evercore ISI downgraded shares to underweight, citing valuation concerns and recent negative catalysts, including a ruling to end its alliance with American Airlines in the Northeast.
Xpeng — U.S.-listed shares of Xpeng rose 5.8% after Goldman Sachs initiated coverage of the Chinese electric-vehicle company with a buy rating, citing a “compelling” model that fosters revenue and margin expansion. Goldman also expects Xpeng to benefit from ongoing declines in battery prices.
JPMorgan Chase — The bank stock gained 1.5% after Jefferies upgraded shares to a buy from a hold rating, citing a stable earnings outlook and “best-in-class” return on equity potential.
Novo Nordisk — Novo Nordisk, which makes weight-loss drug Wegovy, lost 3% after a study conducted by a pharmacy benefits manager for Reuters showed most patients stop using weight-loss drugs within a year.
Scotts Miracle-Gro — Scotts Miracle-Gro shares gained 10.7% after Truist upgraded the stock to buy from hold. The bank said the maker of consumer lawn and garden products is set to return to counter-season outperformance, with lower debt risk.
Generac — Generac shares rallied 4.5% as Argus Research upgraded the generator maker to a buy rating, citing recent cost-cutting initiatives and better growth than expected within the company’s commercial and industrial segment.
U.S. Bancorp — Shares gained more than 3% after Bank of America upgraded them to buy from neutral, saying earnings and strong execution should foster outperformance.
Iovance Biotherapeutics — Shares sank nearly 10% after the biotechnology company announced the pricing of its underwritten public offering of $150 million in common stock.
— CNBC’s Alex Harring, Michelle Fox, Sarah Min and Yun Li contributed reporting. More

Bank of America engaged in deceptive practices that hurt hundreds of thousands of its customers in recent years, the Consumer Financial Protection Bureau said Tuesday.
The bank charged multiple $35 overdraft fees for the same transaction, failed to properly issue rewards to credit card users and signed up customers for card accounts without their consent, the CFPB said in a statement.
The company has to pay $150 million in fines, as well as about $80.4 million to customers who were unfairly charged bogus fees, on top of the $23 million it already paid to customers who were improperly denied card awards.

A man walks past an ATM outside Bank of America Corp. headquarters in Charlotte, North Carolina, May 2, 2016.
Chris Keane | Bloomberg | Getty Images

Bank of America, the second-largest U.S. bank by assets, engaged in deceptive practices that hurt hundreds of thousands of its customers in recent years, the Consumer Financial Protection Bureau said Tuesday.
The bank charged multiple $35 overdraft fees for the same transaction, failed to properly issue rewards to credit card users and signed up customers for card accounts without their consent, the CFPB said in a statement.

Charlotte, North Carolina-based Bank of America was ordered to pay a total of $150 million in penalties to the CFPB and another regulator, the Office of the Comptroller of the Currency. It also has to pay about $80.4 million to customers who were unfairly charged bogus fees, on top of the $23 million it already paid to customers who were improperly denied card awards.
“These practices are illegal and undermine customer trust,” CFPB Director Rohit Chopra said in the release. “The CFPB will be putting an end to these practices across the banking system.”
Bank of America spokesman Bill Halldin said in a response the lender “voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022,” resulting in a 90% drop in revenue from those fees.
The announcement Tuesday is the latest sign that some of the practices exposed by the Wells Fargo fake accounts scandal in 2016 weren’t confined to that bank.
Regulators have punished Wells Fargo for a sales culture that led to the creation of 3.5 million fake accounts. But other lenders have had similar lapses, including U.S. Bank, which paid a $37.5 million fine last year for putting customers into unauthorized accounts. More