Finance

French business planning software startup Pigment has raised $88 million in a funding round led by ICONIQ, the private investment fund that has managed money for tech billionaires such as Mark Zuckerberg and Jack Dorsey.
Venture capital firms Felix Capital, Meritech, IVP, and FirstMark also participated in the funding round.

The logo of the spreadsheet software Microsoft Excel is shown on the display of a smartphone.
Thomas Trutschel | Photothek | Getty Images

French business planning software startup Pigment has raised $88 million in a funding round led by ICONIQ, the private investment fund that manages the money of tech billionaires such as Mark Zuckerberg and Jack Dorsey.
Pigment is best known for its business planning and forecasting platform that’s designed to be more user-friendly than Microsoft’s spreadsheet software Excel.

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The company, co-founded and helmed by dual CEOs Eleonore Crespo and Romain Niccoli, told CNBC it planned to use the funding to expand its reach in the U.S. and artificial intelligence.
Venture capital firms Felix Capital, Meritech, IVP, and FirstMark also participated in the funding round.
Pigment counts the likes of Klarna, Miro and Tommy Hilfiger owner PVH as its customers.
The company’s tools are mainly used by finance teams to plan and make financial and business decisions. As well as Microsoft, Pigment also views enterprise software tools from giants like Google, SAP and Oracle as rivals.
Crespo said that, in 2022, Pigment grew its revenues by 600% and its total user base increased tenfold — and insisted it was well positioned to compete with behemoth incumbent Microsoft.

“We not only have users in the finance team but outside of finance, and that’s super interesting for investors to hear that we are not a finance platform but a business database that can serve any business leader out there from HR to sales to marketing, to R&D [research and development],” she said.
“We are here to sell [to] any business leader. And not only that, but they have heard from their portfolio companies that we managed to serve the most forward-looking companies out there.”
Pigment also plans to use the latest influx of money to invest in the development of AI products.
It introduced a new service called Pigment AI last month, on the heels of heightened buzz surrounding AI and products like ChatGPT, which lets clients query data, identify patterns and automate analysis and reporting.
Crespo said there are no plans to increase headcount substantially and Pigment was instead looking to grow in a more sustainable way, given the pressure from investors on businesses to achieve profitability in favor of breakneck growth. More

Having flirted with madness, Congress decided to avert a sovereign default and allow the government to resume borrowing. But although the debt-ceiling negotiations are over, their aftershocks will ripple through financial markets for months to come. In order to stave off disaster, the Treasury spent much of the past six months running down its cash holdings, eventually reaching the point where it had almost nothing left. Now it must scramble to replenish its cash, creating a potential hazard for the economy.The Treasury general account—the government’s main account at the Federal Reserve, used for official payments—fell to just $23bn at the start of June, far less than the amount of net spending on a typical day. Normally the Treasury tries to maintain a balance of at least $500bn, enough to cover about a week of cash outflows. Thus its task is to rebuild buffers by selling bills and bonds (it will mostly rely on bills, because it is easier to raise cash quickly via short-term debt sales). At the same time, it will have to sell even more paper to finance the government’s deficit. The result will be a surge in issuance. Mark Cabana of Bank of America forecasts that the Treasury will issue more than $1trn in bills over the next three months, roughly five times its total in an average summer.The concern is where the money will come from and, in particular, if debt sales will drain liquidity from other asset markets. There are two main possible sources of cash, and each poses risks. The first is money-market funds, which are flush at the moment, with more than $5trn invested in them. In principle, these funds could hoover up the bulk of the new bills by simply paring the cash they place at the Federal Reserve via its reverse-repurchase (repo) facility. For that to happen, though, the Treasury may have to offer higher coupon rates than the 5.05% yield on reverse repos. Higher yields, in turn, could translate into higher funding costs for already strained regional banks—an unattractive prospect.The second option is less attractive still. Firms, pension funds and other investors may wind up being the biggest buyers of bills, which would mean moving money out of deposits into Treasuries, reducing the level of bank reserves in the financial system. Banks are sitting on excess reserves of about $3trn; it would not take much for these to fall to $2.5trn, a level seen by many as indicating reserve scarcity (going by the rule of thumb that banks should maintain reserves at about 10% of gdp). Such a development would raise uncomfortable questions about banking stability and could force lenders to offer higher deposit rates to recover reserves.A brief encounter with reserve scarcity would not necessarily spell disaster. The Fed could provide liquidity support if required. And to the extent that money-market funds buy up more bills, pressure on bank reserves would be reduced. Either way, however, the flood of Treasury issuance will almost certainly add to market anxiety and volatility, increasing the risk that something, somewhere breaks. It is one more thing to dislike about America’s perennial debt-ceiling convulsions. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

Singapore’s immaculate Changi airport is the perfect place to witness a shift in the balance of power between global cities. Since the city-state’s final covid-19 border restrictions were lifted last year, it has welcomed crowds of bankers, consultants and lawyers, fresh off a four-hour flight from Hong Kong or Shanghai, and often arriving without a return ticket. Singapore’s neutrality is pivotal in a region where the rupture between America and China feels especially immediate.In most cities the twin blows of covid and geopolitical tension have proved more of a problem. In order to assess which are thriving in this new era, The Economist has compiled a rough-and-ready index. It scrutinises a sample of ten locations, looking at changes in four measures—population, economic growth, office vacancies and house prices—over the past three years. We rank each city by how it has performed on the measures to create an overall score.Miami claims top spot thanks to strong economic growth and an extremely perky property market: real house prices leapt by 39.5% from 2019 to 2022. Singapore is next, benefiting from gdp growth of 6.9%, and only a small rise in office vacancies. Dubai, meanwhile, has seen its population jump by 5.8%. It is also the only city in the index where office vacancies have dropped. At the other end of the table is San Francisco, where the population has fallen by 8.3%.What explains this contrasting performance? Covid plays a part. Cities in bits of the world that did not go overboard with restrictions, such as Dubai and Miami, benefited—sometimes at the expense of those that did, like San Francisco. International overnight visits to Singapore may have been three-quarters lower at the end of 2022 than before covid, according to Oxford Economics, a consultancy, but life was pretty good when compared with its rivals, Hong Kong and Shanghai, where tough restrictions on movement lasted longer. Indeed, thanks to falling rents, Hong Kong has lost its top spot in a ranking by hsbc, a bank, of the world’s most expensive cities.Singapore has also sucked up firms and workers fleeing Xi Jinping’s authoritarianism. Much like Dubai in the Middle East, it serves as a place where anyone can do business with anyone. Dubai and Singapore share other advantages as well. Both offer year-round warm weather (important when people can work remotely) and lenient regulation (helpful for those annoyed with Western red tape). Singapore has thrown tax breaks at family offices, helping lift their number to 1,500 in 2022, from 50 in 2018. Dubai has introduced social reforms, decriminalising alcohol and the cohabitation of unmarried couples. Local leaders can make a difference. Miami has worked hard to attract financial business, with firms such as Blackstone and Citadel setting up shop recently. By contrast, San Francisco has lots going against it: a victim of the tech bust, it is expensive and sometimes dangerous, with high taxes and increasingly bad public services. Businesses are walking away, especially those based downtown, with Anthropologie, Office Depot and Whole Foods all closing stores in recent weeks. Johannesburg, which aspires to be the commercial capital of South Africa, if not the whole continent, suffers from deteriorating power and water infrastructure, as well as increasingly unstable politics: the city has had six mayors in the past two years. Locals with means are rushing to “semigrate” to better-run Cape Town.One problem faced by all cities in the index, bar Dubai, is what to do with surplus office space. Vacancies represent a multibillion-dollar fiasco for owners of commercial property, and leave city budgets exposed. In February San Francisco proposed annual tax breaks of up to $1m for new office-based companies. Meanwhile, cities including New York, Paris and Singapore hope to convert offices to much-needed housing. The success of such schemes will determine the cities’ economic health, and their position in next year’s rankings. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

Taylor Swift’s record-smashing “Eras” tour could end up being one of the most lucrative in musical history, possibly even minting the world’s newest billionaire. But Ms Swift has another thing going for her personal finances. When courted to invest in ftx, a now defunct crypto exchange, she reportedly balked: “Can you tell me that these are not unregistered securities?”American regulators are asking similar questions. On June 6th the Securities and Exchange Commission (sec) sued Coinbase, the country’s largest crypto exchange, for failing to register as a broker, exchange or clearinghouse of securities. When markets opened, Coinbase’s share price dropped by a fifth. The day before the sec had sued Binance, the world’s largest crypto exchange—alleging both that it offered securities-trading services without the necessary registrations, and that it had placed customer funds in a trading outfit owned by its boss, Changpeng Zhao. Binance rejected all the allegations and said it would “vigorously defend” itself. At the core of both lawsuits is the idea that many cryptocurrencies are in fact securities. American law defines securities to include any “investment contract” that produces an asset for which an owner can expect to accrue returns depending on the effort of a promoter. The sec has suggested bitcoin, the world’s most valuable cryptocurrency, does not meet this standard. It has also avoided making definitive statements about ether, the second most valuable token. But Gary Gensler, the sec’s chairman, has made clear that he thinks most other cryptocurrencies fit the bill. Absent legislation or friendlier regulators, the lawsuits place the fate of America’s crypto industry in judicial hands. An entity’s issuance of crypto tokens is strikingly similar to the issuance of equity shares. If the organisation does well, the value of its tokens goes up. This makes it hard to argue they are not securities. The flipside is that some cryptocurrencies, like bitcoin, do not have such a promoter, since there is no centralised outfit that stands to profit from the token’s growth. And others, like some stablecoins, are used mainly for liquidity, such as facilitating trade within a crypto protocol, rather than investment. Coinbase is listed in America. Binance, which has no formal headquarters, is a trickier case. It separated American operations from international ones, but regulators say it turned a blind eye to Americans trading on the international platform. The sec’s lawsuit notes a damning message sent by its chief operating officer to colleagues: “We are operating as a fking unlicensed securities exchange in the usa bro.”The exchanges, for their part, argue that the sec is “regulating by enforcement” and has failed to provide clear guidelines on what is permitted. In this narrow sense, they may have a point. If the rules had been clear earlier then years of investment and talent could have been better allocated. There are two big implications of America’s crackdown. First, if the sec wins, America could in effect join the 25 of 45 markets tracked by the Atlantic Council, a think-tank, that have fully or partly banned crypto. Even if regulators create a path for firms to exist within the law, crypto’s value will shrink, as it becomes more difficult to avoid the costly red tape that applies to regular financial institutions. Second, more crypto firms will move to places with friendlier regulation and shun doing business in America altogether. Dubai will be one winner. It has set up a specialist crypto regulator and opened its arms to offices from Binance, Crypto.com and Bybit. The game of regulatory cat-and-mouse is not over just yet. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

To their critics central-bank digital currencies (CBDCs) are a fad—a solution in search of a problem. To their supporters CBDCs are a necessary response to a digitising world. Central bankers everywhere are studying the idea. Recently several have signed up to an argument in their favour: that CBDCs will be needed to anchor the value of money in a cashless financial system. It is a notion that could prompt governments to rebuild their banking and payment systems. But does it withstand scrutiny?The logic has recently been set out by the Bank of England, whose public consultation concerning CBDCs closes on June 30th. It goes as follows. People have the confidence to hold bank deposits (money issued by the private sector) in part because they know that they can at any time withdraw it as notes and coins (money that is issued directly by the state). But physical cash is declining in both use and usefulness. You cannot spend it on the internet; a growing number of shops insist on digital payment. Deprived of their convertibility into publicly issued money that is useful, bank deposits might lose their competitive advantage over emerging competitors that are similarly removed from public money, such as stablecoins or even foreign digital currencies.In Britain, the Treasury and Bank of England therefore judge a retail CBDC to be probably necessary “to anchor the value and robustness of all monies circulating in the UK”, as Sir Jon Cunliffe, a deputy governor at the bank, has put it. A similar judgment has been reached in Frankfurt, where the European Central Bank must ensure “the money we issue maintains its role as a monetary anchor”, according to Fabio Panetta of the bank’s governing council.Yet the argument that CBDCs will be needed to anchor the value of money is unconvincing. It is also failing to catch on in America, where the Federal Reserve is unenthused by the idea. “Physical currency can effectively disappear, and everything still works,” Chris Waller of the Fed has argued. David Andolfatto of the University of Miami agrees. The absence of physical money would be of “no consequence whatsoever”, he says. The evidence that physical cash underpins confidence in banks is flimsy. Depositors in most rich countries are able to take comfort from deposit insurance, which pays out up to a certain limit if banks fail; the knowledge that central banks will lend freely in emergencies; and the ability to transfer funds to other banks. A paper cited in the Bank of England’s consultation, by Hanna Armelius of Sweden’s central bank and two co-authors, notes that with such measures in place “neither cash nor a CBDC seems fundamental to the monetary [system]”, although the authors speculate that CBDCs could support “a sense of control” among depositors who distrust banks.Would such depositors trust a CBDC, however? The Bank of England’s draft proposal is for a “platform” CBDC, in which the digital currency is held in digital wallets offered by the private sector. For most consumers such a CBDC would be “absolutely indistinguishable from ordinary retail deposits”, says George Selgin of the Cato Institute, an American think-tank. The unique feature of the CBDC wallet—that it would be fully backed by public money—is something many people already mistakenly think is true of bank deposits. Whether held in wallets or not, it seems optimistic to think that CBDCs would reinforce confidence in banks among particularly mistrustful customers, given the many conspiracy theories circulating about the plans.The paranoid will continue to crave cold, hard cash. Fortunately notes and coins might continue to reassure them even as their use in transactions declines. “All the central bank needs to do is promise to provide the currency if requested,” according to Mr Waller. “Eliminating currency is a policy choice…not an economic outcome.” It is true that physical cash has less utility as it becomes more difficult to spend. But it maintains its status as “legal tender”, meaning, in most contexts, that creditors must accept it as a means of repaying debts. The rule protects the function of cash as a store of value even as it becomes less useful for payments. As for the threat from stablecoins, it is hard to see why creating CBDCs would be the simplest way to prevent monetary fragmentation. Stablecoins pegged to domestic currencies are a lot like bank deposits and could be regulated as such to ensure a 1:1 exchange rate between private and public monies. Central bankers talk of CBDCs acting as a “bridging asset” between different digital coins. Yet digital state-issued money that can be used to settle transactions involving multiple banks already exists in the form of the deposits, called reserves, that they hold at central banks. It would be more straightforward to expand this system than to build a retail CBDC, says Mr Andolfatto.Common centsEconomists have long argued that the power of governments to choose the currency in which they levy taxes creates some demand for that currency, in whatever form the state prefers. “A prince who should enact that a certain proportion of his taxes should be paid in a paper money of a certain kind might thereby give a certain value to this paper money,” wrote Adam Smith in “The Wealth of Nations”. Unless the Treasury is about to start accepting crypto assets as tax payment, in other words, the Bank of England probably need not worry about losing its grip. The widespread use of a stablecoin backed by sterling-denominated assets would in any case leave the bank in control of interest rates, which would flow through the stablecoin’s balance-sheet much as they flow through those of banks at present.Over the years plenty of people have argued that the monetary system could not function well without certain anchors, such as to gold or the dollar, only to be proved wrong. The idea that the system needs government-issued money to be in widespread use is likely to suffer the same fate. ■Read more from Free exchange, our column on economics:What does the perfect carbon price look like? (Jun 1st)What performance-enhancing stimulants mean for economic growth (May 25th)Robert Lucas was a giant of macroeconomics (May 18th)For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

The last time Japan’s Nikkei 225 stock index was as high as it is today, the Soviet Union was collapsing, the internet was in its infancy and Emperor Akihito had just ascended to the Chrysanthemum throne. Japanese stocks are now only a fifth short of their all-time high, which was set in December 1989—at the absolute zenith of Japan’s bubble-era exuberance (see chart).A wave of interest in the country’s stocks, which have risen by 24% so far this year, may yet propel the market further. The cheap yen has padded the bottom line of firms that make money abroad. Optimism about corporate-governance reforms, and interest from Warren Buffett, an American investor, have provided a boost. A dearth of compelling options in other parts of the world also helps. So far this year, foreign investors have bought ¥3.8trn ($27bn) more in Japanese stocks than they have sold, the most since 2013. Beneficiaries include Japan’s cheaply priced value stocks, such as the five sogo shosha (general trading companies) that Mr Buffet has bought stakes in. The share prices of these firms have comfortably beaten the market this year, rising by between 28% and 45%. Shareholder activism at cheaply valued firms, once anathema in stuffy Japanese boardrooms, hit a new record this year, as measured by shareholder proposals at annual general meetings.But experienced investors know that the land of the rising sun has had more than its fair share of false dawns. The Nikkei 225 rose by over 40% between the end of 1999 and a peak in March 2000, after which the dotcom bubble burst. It rose by over 50% between the end of 2004 and mid-2007, before the global financial crisis. It more than doubled in the couple of years after Shinzo Abe was elected prime minister in 2012, promising to lift growth. The Abe rally was not just larger in size than the present one; it also saw more foreign participation. In 2013 overseas buyers snapped up ¥16trn of Japanese stocks, four times the amount they have purchased this year. Even though the quality of Japanese governance has improved markedly in the past decade, foreign investors have sold practically all the shares they accumulated during that burst of optimism. This is because the growth Abe promised has mostly failed to materialise. Revenues per share on the msci Japan index are, in dollar terms, still below the levels they reached before the global financial crisis, and are marginally worse than on the humdrum stockmarkets of Britain and the euro zone. Some analysts foresee better economic conditions. Udith Sikand of Gavekal Research, a consultancy, argues that the return of inflation to Japan—prices excluding fresh food and fuel rose by 4.1% in the year to April—heralds the beginning of a virtuous cycle, which will lift wages and consumer spending. However if such a cycle is coming, the evidence so far is thin. Wages have risen by just 1% in nominal terms over the past year, meaning workers are enduring real-terms pay cuts. The improved profitability and returns that result from shareholder-friendly governance have helped lift the Japanese stockmarket. Improved valuations would lift it higher still. Yet solid economic growth is practically a precondition for sustaining a prolonged rally—meaning another generation of investors in Japan may soon have their fingers burned. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More

China’s six state-owned commercial banks cut deposit rates Thursday, according to CNBC checks.
Those cuts help improve banks’ profitability, while setting the stage for the People’s Bank of China to reduce other interest rates, Nomura analysts said.
China’s economic recovery from the pandemic has slowed in recent months.

Bank of China is one of the major state-owned banks in China. Pictured here is a branch in Shanghai on March 27, 2023.
Bloomberg | Bloomberg | Getty Images

BEIJING — China’s largest banks cut interest rates for savers on Thursday in a bid to boost growth in an economy where consumption has been slow to recover.
The country’s six state-owned commercial banks’ websites all showed updated yuan-denominated demand deposit interest rates of 0.2%, down from 0.25% last year, according to CNBC checks. Demand deposits allow withdrawals at any time.

The banks cut rates for other deposit products, including reducing the interest rate for five-year time deposits to 2.5% from 2.65%, according to their websites. The state-run Securities Times reported the deposit rate cuts in the Thursday edition of the newspaper.
Those cuts help improve banks’ profitability, and set the stage for the People’s Bank of China to reduce other interest rates, Nomura analysts said.

“We believe the cut in banks’ deposit rates sends a strong signal that the PBOC is paving the way for a cut in benchmark lending rates (MLF) to guide down LPR,” Nomura’s chief China Economist Ting Lu and a team said in a report.
The medium-lending facility interest rate is due out June 15, while the loan prime rate is scheduled for release on June 20.

The more important issue is to bring unemployment rate down. Households with stronger confidence in their jobs would spend more.

Zhiwei Zhang
Pinpoint Asset Management, chief economist

“This new round of deposit rate cuts, as well as rapidly worsening exports, broadening property distress, ongoing disinflation, and a likely Fed pause, raise our conviction of this call on rate cuts,” the analysts said, noting they have been calling for a 10-basis-point cut to the MLF and LPR interest rates since mid-May.

The PBOC has not changed the two rates for nine months. The MLF’s one-year interest rate was 2.75% in May, while the one-year LPR was 3.65% and the five-year LPR was 4.3%.
China has kept its interest rates low, in contrast to the U.S. and other major countries that have aggressively raised rates to curb inflation.

Impact on consumption

Lower interest rates give businesses more incentive to borrow. Cutting deposit rates makes it more expensive for people to keep their money in the bank, and theoretically gives them more incentive to spend.
In the first quarter, 58% of household depositors said they would prefer to save rather than spend or invest, according to a PBOC survey. That was the lowest level in a year.
However, it’s not a given that lower deposit rates will translate immediately into greater spending.

Read more about China from CNBC Pro

The cuts are “positive on the margin but unlikely to be a significant boost for household spending,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in an email.
“The more important issue is to bring unemployment rate down. Households with stronger confidence in their jobs would spend more,” he said.
Youth unemployment hit a record high in April at more than 20%. China is set to release retail sales and unemployment data for May on June 15. More

Gabby Jones | Bloomberg | Getty Images

Check out the companies making the biggest moves midday.
Affirm — Shares of the payments company gained 2.4% after Affirm and Amazon announced a new compatibility feature. Affirm’s Adaptive Checkout, which offers customers pay-over-time plans, will now be a payment option through merchants offering Amazon Pay.

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Stitch Fix — The stock soared 27.99% after the online personalized styling service company reported a narrower-than-expected loss for the fiscal third quarter. Stitch Fix posted a loss of 19 cents per share, compared with the 30-cent loss per share anticipated by analysts, according to Refinitiv. Revenue also beat expectations.
Warner Bros. Discovery — Shares popped 8.43% following the announcement CNN CEO Chris Licht is leaving the company after a tumultuous reign of just over a year.
Dave & Buster’s — Shares of the entertainment giant jumped 18.29% a day after Dave & Buster’s posted a beat on earnings. The company reported first-quarter earnings of $1.45 per share, while analysts polled by Refinitiv called for $1.24 per share. Revenue fell short of expectations, however, coming in at $597 million, versus the $602 million estimated by Wall Street.
GameStop — The meme stock added 5.75% ahead of its quarterly results following Wednesday’s close. Analysts polled by FactSet are forecasting a quarterly loss of 15 cents per share.
Petrobras — Shares gained 2.92% after Morgan Stanley upgraded the Brazilian oil giant to overweight from equal weight. The Wall Street firm said Petrobras could deliver a larger dividend to investors this year than it has historically.

Tesla — Shares added 1.47% after the electric vehicle maker posted an update on its website that showed new Model 3 and Model Y cars are eligible for a $7,500 tax credit from the Inflation Reduction Act.
Yext — Shares of the online marketing firm soared 38.44% in midday trading due to an earnings beat. On Tuesday, the company reported an adjusted 8 cents per share on $99.5 million in revenue, while analysts forecast 5 cents and $98.5 million, according to FactSet.
Super Micro Computer — The chip stock added 2.84% after Rosenblatt initiated coverage with a buy rating and $300 price target, which implies nearly 29% upside from Tuesday’s close. The Wall Street firm called Super Micro Computer a top artificial intelligence beneficiary.
Campbell Soup — Shares fell 8.91% after the company reaffirmed its full-year guidance of $2.95 to $3.00 for adjusted earnings per share, below the $3.01 expected from analysts polled by StreetAccount. However, its fiscal third-quarter earnings topped estimates, while revenue was in line.
Mobileye Global — The autonomous vehicle technology stock added 2.84% after Canaccord Genuity initiated coverage with a buy rating. The Wall Street firm called Mobileye a sustainable play that will also improve supply chains.
Coinbase — The crypto exchange gained 3.2%, after losing 12% in the previous session. The U.S. Securities and Exchange Commission sued Coinbase on Tuesday, alleging the company was operating as an unregistered exchange and broker. Ark Invest’s Cathie Wood snapped up shares after the news Tuesday.
— CNBC’s Jesse Pound, Brian Evans and Darla Mercado contributed reporting. More