Finance

China’s Ministry of Commerce said Tuesday it was launching a probe into Calvin Klein-parent PVH Group over alleged business disruptions around its Xinjiang supply chain.
The ministry said the investigation is part of its “unreliable entities” list mechanism, which was launched shortly after the U.S. blacklisted Huawei.
The U.S. Commerce Department on Monday announced plans to ban the import or sale of cars with specific hardware or software linked to China or Russia.

Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.
Aly Song | Reuters

BEIJING — China’s Ministry of Commerce said Tuesday it was launching a probe into Calvin Klein-parent PVH Group over alleged business disruptions around its Xinjiang supply chain.
The ministry said the investigation is part of its “unreliable entities” list mechanism. Launched in 2019 shortly after the U.S. blacklisted Huawei, the list is China’s version of the U.S. Commerce Department’s entity list that restricts named companies from accessing items originating in the U.S.

The U.S. Commerce Department on Monday announced plans to ban the import or sale of cars with specific hardware or software linked to China or Russia.
China’s Commerce Ministry on Tuesday did not state why it was probing PVH now, but said the U.S. retail group had 30 days to respond. U.S. defense companies that previously landed on the “unreliable entities” list are barred from China-related imports or exports.
The Chinese probe alleges PVH “targeted Xinjiang suppliers in violation of the principles of normal market transactions, with disruptions to normal transactions with Chinese businesses, individuals and other people, along with other discriminatory measures,” according to a CNBC translation of the Chinese text.
PVH did not immediately respond to a CNBC request for comment outside of U.S. business hours.

The group, which also owns Tommy Hilfiger, is one of several foreign retail companies that have faced scrutiny in China over efforts to distance themselves from alleged forced labor in China’s Xinjiang region.

In a July 2022 corporate responsibility report, PVH said that Xinjiang is one of the regions where no direct or indirect sourcing is permitted.
International revenue for Calvin Klein and Tommy Hilfiger fell by 4.3% year-on-year to $1.38 billion in the quarter ended Aug. 4, dragged down by a “challenging consumer environment in Asia Pacific, particularly in China and Australia,” PVH said in an earnings release.
That overseas revenue accounted for more than half PVH’s total revenue of $2.07 billion for the quarter.
Xinjiang is home to the Uyghur Muslims, who have been identified by the United Nations, United States, United Kingdom and others as a repressed ethnic group. China has repeatedly denied allegations of forced labor and other abuses in Xinjiang. The government says that facilities there that the U.S., U.K., Canada and human rights groups have characterized as internment camps are actually vocational training centers.
—CNBC’s Sonia Heng contributed to this report. More

China will cut the amount of cash banks need to have on hand, known as the reserve requirement ratio, or RRR, People’s Bank of China Gov. Pan Gongsheng said during a press conference on Tuesday.
Pan, who was speaking to reporters alongside two other financial regulator heads, did not indicate exactly when the central bank would ease policy but indicated it would happen by the end of the year.
The relatively rare high-level press conference was scheduled after the U.S. Federal Reserve cut interest rates last week.

Pan Gongsheng, governor of the People’s Bank of China, delivers a speech during the 2024 Lujiazui Forum on June 19, 2024 in Shanghai, China.
Vcg | Visual China Group | Getty Images

BEIJING — China will cut the amount of cash banks need to have on hand, known as the reserve requirement ratio, or RRR, People’s Bank of China Gov. Pan Gongsheng said during a press conference on Tuesday.
Pan, who was speaking to reporters alongside two other financial regulator heads, did not indicate exactly when the central bank would ease policy but indicated it would happen by the end of the year.

The relatively rare high-level press conference was scheduled after the U.S. Federal Reserve cut interest rates last week. That kicked off an easing cycle that gave China’s central bank further room to cut its rates and boost growth in the face of deflationary pressure.
Pan became PBOC governor in July 2023. During his first press conference as central bank governor in January, Pan said the PBOC would cut the amount of cash banks need to have on hand, known as the reserve requirement ratio, or RRR. Such policy announcements are rarely made during such events, and are typically disseminated through online releases and state media.
He then told reporters in March, alongside China’s annual parliamentary meeting, there was room to cut the RRR further. Such a reduction is widely expected in coming months.
Unlike the Fed’s focus on a main interest rate, the PBOC uses a variety of rates to manage monetary policy. The PBOC on Friday did not change its loan prime rate, a benchmark that affects corporate and household loans, including mortgages.
China’s government system also means that policy is set at a far higher level than that of the financial regulators speaking Tuesday. Such top-level meetings in July called for efforts to reach full-year growth targets and to boost domestic demand.

While the PBOC kept the loan prime rate unchanged in the days since the Fed’s cut, it has moved to lower a short-term rate, which determines the supply of money. The PBOC on Monday lowered the 14-day reverse repo rate by 10 basis points to 1.85%, but did not reduce the 7-day reverse repo rate, which was cut in July to 1.7%. Pan has indicated he would like the 7-day rate to become the main policy rate.
China’s economic growth has slowed, dragged down by the real estate slump and low consumer confidence. Economists have called for more stimulus, especially on the fiscal front. More

You may sense that governments are not as competent as they once were. Upon entering the White House in 2021, President Joe Biden promised to revitalise American infrastructure. In fact, spending on things like roads and rail has fallen. A flagship plan to expand access to fast broadband for rural Americans has so far helped precisely no one. Britain’s National Health Service soaks up ever more money, and provides ever worse care. Germany mothballed its last three nuclear plants last year, despite uncertain energy supplies. The country’s trains, once a source of national pride, are now always late. More

Minneapolis Fed President Neel Kashkari said Monday that he expects policymakers to dial down the pace of interest rate cuts after last week’s half percentage point reduction.
Speaking separately Monday morning, Atlanta Fed President Raphael Bostic indicated he expects the Fed to move aggressively in getting back to a neutral rate.

Minneapolis Federal Reserve President Neel Kashkari said Monday that he expects policymakers to dial down the pace of interest rate cuts after last week’s half percentage point reduction.
“I think after 50 basis points, we’re still in a net tight position,” Kashkari said in a CNBC “Squawk Box” interview. “So I was comfortable taking a larger first step, and then as we go forward, I expect, on balance, we will probably take smaller steps unless the data changes materially.”

In a decision that came as at least a mild surprise, the rate-setting Federal Open Market Committee last week voted to reduce its benchmark overnight borrowing rate by half a percentage point, or 50 basis points. It was the first time the committee had cut by that much since the early days of the Covid pandemic, and, before that, the financial crisis in 2008. One basis point equals 0.01%.
While the move was unusual from a historical perspective, Kashkari said he thought it was necessary to get rates to reflect a recalibration of policy from a focus on overheating inflation to more concern about a softening labor market.
His comments indicate the central bank could move back to more traditional moves in quarter-point increments.
“Right now, we still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market, and a lot of the recent inflation data is coming in looking very positive that we’re on our way back to 2%,” he said. “So I don’t think you’re going to find anybody at the Federal Reserve who declares mission accomplished, but we are paying attention to what risks are most likely to materialize in the near future.”
As part of the committee’s rotating schedule, Kasharki will not get a vote on the FOMC until 2026, though he does get a say during policy meetings.

The rate cut last week signaled that the Fed is on its way to normalizing rates and bringing them back to a “neutral” position that neither pushes nor restricts growth. In their latest economic projections, FOMC members indicated that rate is probably around 2.9%; the current fed funds rate is targeted between 4.75% and 5%.
Speaking separately Monday morning, Atlanta Fed President Raphael Bostic indicated he expects the Fed to move aggressively in getting back to a neutral rate.
“Progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer,” said Bostic, who does vote this year on the FOMC. “In this moment, I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago.”
Bostic also noted that last week’s cut puts the Fed in a better position on policy, in that it can slow the pace of easing if inflation starts to peak up again, or accelerate it if the labor market slows further.
Market pricing anticipates a relatively even chance of the FOMC cutting by either a quarter- or half-percentage point at its November meeting, with a stronger likelihood of the larger move in December, for a total of 0.75 percentage point in further reductions by the end of the year, according to the CME Group’s FedWatch measure. More

The world’s second-largest economy has remained under pressure from a real estate slump and tepid consumer confidence.
“We believe the risk that China will miss the ‘around 5%’ full-year GDP growth target is on the rise, and thus the urgency for more demand-side easing measures is also increasing,” Goldman Sachs analysts said in a report.
“The current policy to stabilize the property market is clearly not enough,” said Xu Gao, Beijing-based chief economist at Bank of China International.

Local residents with umbrellas walk out of a metro station in rain during morning rush hour on September 20, 2024 in Beijing, China. 
China News Service | China News Service | Getty Images

BEIJING — More economists are calling for China to stimulate growth, including those based inside the country.
China should issue at least 10 trillion yuan ($1.42 trillion) in ultra-long government bonds in the next year or two for investment in human capital, said Liu Shijin, former deputy head of the Development Research Center at the State Council, China’s top executive body.

That’s according to a CNBC translation of Liu’s Mandarin-language remarks available on financial data platform Wind Information.
His presentation Saturday at Renmin University’s China Macroeconomy Forum was titled: “A basket of stimulus and reform, an economic revitalization plan to substantially expand domestic demand.”
Liu said China should make a greater effort to address challenges faced by migrant workers in cities. He emphasized Beijing should not follow the same kind of stimulus as developed economies, such as simply cutting interest rates, because China has not yet reached that level of slowdown.

After a disappointing recovery last year from the Covid-19 pandemic, the world’s second-largest economy has remained under pressure from a real estate slump and tepid consumer confidence. Official data in the last two months also points to slower growth in manufacturing. Exports have been the rare bright spot.
Goldman Sachs earlier this month joined other institutions in cutting their annual growth forecast for China, reducing it to 4.7% from 4.9% estimated earlier. The reduction reflects recent data releases and delayed impact of fiscal policy versus the firm’s prior expectations, the analysts said in a Sept. 15 note.

“We believe the risk that China will miss the ‘around 5%’ full-year GDP growth target is on the rise, and thus the urgency for more demand-side easing measures is also increasing,” the Goldman analysts said.
China’s highly anticipated Third Plenum meeting of top leaders in July largely reiterated existing policies, while saying the country would work to achieve its full-year targets announced in March.
Beijing in late July announced more targeted plans to boost consumption with subsidies for trade-ins including upgrades of large equipment such as elevators.
But several businesses said the moves were yet to have a meaningful impact. Retail sales rose by 2.1% in August from a year ago, among the slowest growth rates since the post-pandemic recovery.

Real estate drag

China in the last two years has also introduced several incremental moves to support real estate, which once accounted for more than a quarter of the Chinese economy. But the property slump persists, with related investment down more than 10% for the first eight months of the year.
“The elephant in the room is the property market,” said Xu Gao, Beijing-based chief economist at Bank of China International. He was speaking at an event last week organized by the Center for China and Globalization, a think tank based in Beijing.
Xu said demand from China’s consumers is there, but they don’t want to buy property because of the risk the homes cannot be delivered.
Apartments in China have typically been sold ahead of completion. Nomura estimated in late 2023 that about 20 million such pre-sold units remained unfinished. Homebuyers of one such project told CNBC earlier this year they had been waiting for eight years to get their homes.
To restore confidence and stabilize the property market, Xu said that policymakers should bail out the property owners.
“The current policy to stabilize the property market is clearly not enough,” he said, noting the sector likely needs support at the scale of 3 trillion yuan, versus the roughly 300 billion yuan announced so far.

Different priorities

China’s top leaders have focused more on bolstering the country’s capabilities in advanced manufacturing and technology, especially in the face of growing U.S. restrictions on high tech.
“While the end-July Politburo meeting signaled an intention to escalate policy stimulus, the degree of escalation was incremental,” Gabriel Wildau, U.S.-based managing director at consulting firm Teneo, said in a note earlier this month.
“Top leaders appear content to limp towards this year’s GDP growth target of ‘around 5%,’ even if that target is achieved through nominal growth of around 4% combined with around 1% deflation,” he said.
In a rare high-level public comment about deflation, former People’s Bank of China governor Yi Gang said in early September that leaders “should focus on fighting the deflationary pressure” with “proactive fiscal policy and accommodative monetary policy.”
However, Wildau said that “Yi was never in the inner circle of top Chinese economic policymakers, and his influence has waned further since his retirement last year.”

Local government constraints

China’s latest report on retail sales, industrial production and fixed asset investment showed slower-than-expected growth.
“Despite the surge in government bond financing, infrastructure investment growth slowed markedly, as local governments are constrained by tight fiscal conditions,” Nomura’s Chief China Economist Ting Lu said in a Sept. 14 note.
“We believe China’s economy potentially faces a second wave of shocks,” he said. “Under these new shocks, conventional monetary policies reach their limits, so fiscal policies and reforms should take the front seat.”
The PBOC on Friday left one of its key benchmark rates unchanged, despite expectations the U.S. Federal Reserve’s rate cut earlier this week could support further monetary policy easing in China. Fiscal policy has been more restrained so far.
“In our view, Beijing should provide direct funding to stabilize the property market, as the housing crisis is the root cause of these shocks,” Nomura’s Lu said. “Beijing also needs to ramp up transfers [from the central government] to alleviate the fiscal burden on local governments before it can find longer-term solutions.”
China’s economy officially still grew by 5% in the first half of the year. Exports surged by a more-than-expected 8.7% in August from a year earlier.
In the “short term, we must really focus to be sure [to] successfully achieve this year’s 2024 growth goals, around 5%,” Zhu Guangyao, a former vice minister of finance, said at the Center for China and Globalization event last week. “We still have confidence to reach that goal.”
When asked about China’s financial reforms, he said it focuses on budget, regional fiscal reform and the relationship between central and local governments. Zhu noted some government revenue had been less than expected.
But he emphasized how China’s Third Plenum meeting focused on longer-term goals, which he said could be achieved with GDP growth between 4% and 5% annually in the coming decade. More

A major exchange-traded fund and mutual fund manager finds the winning gold trade isn’t talked about as much as the artificial intelligence trade — but maybe it should be.
VanEck CEO Jan van Eck thinks the best investment this year is “the hedge against political cycles.” To him, that means investing in gold. 

“It is quietly the best performing asset this year,” Van Eck told CNBC’s “ETF Edge” from the Future Proof conference in Huntington Beach on Monday.
Gold hit another record on Friday, its 37th record this year. As of Friday’s market close, it is up 28% since the start of the year.
Van Eck, whose firm runs the VanEck Gold Miners ETF, expects foreign investments in bullion will continue to give the commodity a boost. It should also help in lifting gold miners higher, which started the year lagging the commodity. But as of Friday, the VanEck Gold Miners ETF has started to outperform, up 31% this year.
“I think you own both because the miners, if they catch up at all, it’s going to rip,” he said.
As for the AI trade, van Eck says it’s “amazing” how investors refuse to give up on it.

“It’s like part of people’s model portfolios, or core portfolios, is to have this tactical overweight to semis. And some of our biggest clients actually bought on the dip over the last week or two,” the VanEck CEO said.
Last month, his firm launched the VanEck Fabless Semiconductor ETF. It’s a companion to its VanEck Semiconductor ETF that excludes companies that run their own foundries, such as Intel.
FactSet reports the new ETF’s top holdings as Nvidia, Broadcom and Advanced Micro Devices as of Friday.
“Why spend billions of dollars on building the chips if you don’t have to?” van Eck said. “Nvidia doesn’t build its own chips. So that’s another kind of investment strategy.”
Since launching on Aug. 28, the VanEck Fabless Semiconductor ETF is up a half percent.
Disclaimer More

Fed Reserve Governor Christopher Waller told CNBC that he supported a 50 basis point rate reduction at this week’s meeting because inflation is easing faster than he had expected.
Waller indicated there are a number of scenarios that could unfold relative to future cuts, with each depending on how the economic data runs.

Federal Reserve Governor Christopher Waller said Friday he supported a half percentage point rate cut at this week’s meeting because inflation is falling even faster than he had expected.
Citing recent data on consumer and producer prices, Waller told CNBC that the data is showing core inflation, excluding food and energy, in the Fed’s preferred measure is running below 1.8% over the past four months. The Fed targets annual inflation at 2%.

“That is what put me back a bit to say, wow, inflation is softening much faster than I thought it was going to, and that is what put me over the edge to say, look, I think 50 [basis points] is the right thing to do,” Waller said during an interview with CNBC’s Steve Liesman.
Both the consumer and producer price indexes showed increases of 0.2% for the month. On a 12-month basis, the CPI ran at a 2.5% rate.
However, Waller said the more recent data has shown an even stronger trend lower, thus giving the Fed space to ease more as it shifts its focus to supporting the softening labor market.
A week before the Fed meeting, markets were overwhelmingly pricing in a 25 basis point cut. A basis point equals 0.01%.
“The point is, we do have room to move, and that is what the committee is signaling,” he said.

The Fed’s action to cut by half a percentage point, or 50 basis points, brought its key borrowing rate down to a range between 4.75%-5%. Along with the decision, individual officials signaled the likelihood of another half point in cuts this year, followed by a full percentage point of reductions in 2025.
Fed Governor Michelle Bowman was the only Federal Open Market Committee member to vote against the reduction, instead preferring a smaller quarter percentage point cut. She released a statement Friday explaining her opposition, which marked the first “no” vote by a governor since 2005.
“Although it is important to recognize that there has been meaningful progress on lowering inflation, while core inflation remains around or above 2.5 percent, I see the risk that the Committee’s larger policy action could be interpreted as a premature declaration of victory on our price stability mandate,” Bowman said.
As for the future path of rates, Waller indicated there are a number of scenarios that could unfold, with each depending on how the economic data runs.
Futures market pricing shifter after Waller spoke, with traders now pricing in about a 50-50 chance of another half percentage point reduction at the Nov. 6-7 meeting, according to the CME Group’s FedWatch.
“I was a big advocate of large rate hikes when inflation was moving much, much faster than any of us expected,” he said. “I would feel the same way on the downside to protect our credibility of maintaining a 2% inflation target. If the data starts coming in soft and continues to come in soft, I would be much more willing to be aggressive on rate cuts to get inflation closer to our target.”
The Fed gets another look at inflation data next week when the Commerce Department releases the August report on the personal consumption expenditures price index, the central bank’s preferred measure. Chair Jerome Powell said Wednesday that the Fed’s economists expect the measure to show inflation running at a 2.2% annual pace. A year ago, it had been at 3.3%. More

A 401(k) match is often considered free money.
Most employers offering a 401(k) plan make a matching contribution on workers’ savings.
Workers may need to stay at the company for a certain number of years before the match is fully theirs, however.

Nitat Termmee | Moment | Getty Images

There are few certainties when it comes to investing.
The stock market can seem to gyrate with little rhyme or reason, guided up or down by unpredictable news cycles and fickle investor sentiment. Average stock returns have historically trended up over long time periods, but their trajectory is hardly assured on a daily, monthly or annual basis. As the common investment disclosure goes, “Past performance is no guarantee of future results.”

Yet, according to financial advisors, there is an outlier in the realm of investing: the 401(k) match.
The basic concept of a 401(k) match is that an employer will make a matching contribution on workers’ retirement savings, up to a cap. Advisors often refer to a match as free money.

For example, if a worker contributes 3% or more of their annual salary to a 401(k) plan, the employer might add another 3% to the worker’s account.
In this example — a dollar-for-dollar match up to 3% — the investor would be doubling their money, the equivalent of a 100% profit.
A match is “one of the rare guarantees on an investment that we have,” said Kamila Elliott, a certified financial planner and co-founder of Collective Wealth Partners, based in Atlanta.

“If you were in Vegas and every time you put $1 in [the slot machine] you got $2 out, you’d probably be sitting at that slot machine for a mighty long time,” said Elliott, a member of CNBC’s Advisor Council.
However, that money can come with certain requirements like a minimum worker tenure, more formally known as a “vesting” schedule.

Most 401(k) plans have a match

About 80% of 401(k) plans offer a matching contribution, according to a 2023 survey by the Plan Sponsor Council of America.
Employers can use a variety of formulas that determine what their respective workers will receive.

The most common formula is a 50-cent match for every dollar a worker contributes, up to 6%, according to the PSCA. In other words, a worker who saves 6% of their pay would get another 3% in the form of a company match, for a total of 9% in their 401(k).
“Where else can you get a guaranteed return of more than 50% on an investment? Nowhere,” according to Vanguard, a 401(k) administrator and money manager.
More from Personal Finance:The ‘billion-dollar blind spot’ of 401(k)-to-IRA rolloversPlanning delayed retirement may not prevent poor savingsHow high earners can funnel money to a Roth IRA
Consider this example of the value of an employer match, from financial firm Empower: Let’s say there are two workers, each with a $65,000 annual salary and eligible for a dollar-for-dollar employer 401(k) match up to 5% of pay.
One contributes 2% to their 401(k), qualifying them for a partial match, while the other saves 5% and gets the full match. The former worker would have saved roughly $433,000 after 40 years. The latter would have a nest egg of about $1.1 million. (This example assumes a 6% average annual investment return.)
Financial advisors generally recommend people who have access to a 401(k) aim to save at least 15% of their annual salary, factoring in both worker and company contributions.

Keeping the match isn’t guaranteed, however

That so-called free money may come with some strings attached, however.
For example, so-called “vesting” requirements may mean workers have to stay at a company for a few years before the money is fully theirs.

About 60% of companies require tenure of anywhere from two to six years before they can leave the company with their full match intact, according to the PSCA. Workers who leave before that time period may forfeit some or all their match.
The remainder have “immediate” vesting, meaning there is no such limitation. The money is theirs right away. More