Finance

Revenue grew by 6% year-on-year to 34.45 billion yuan ($4.72 billion) in the quarter that ended Sept. 30. That was slightly higher than analyst expectations.
It comes after revenue in the previous quarter surged 15% from a year ago, with online and non-online marketing revenue growing by double digits.
“Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate,” Robin Li, Baidu CEO and co-founder of Baidu, said in a release.

Men interact with a Baidu AI robot near the company logo at its headquarters in Beijing, China April 23, 2021.
Florence Lo | Reuters

BEIJING — Chinese tech giant Baidu reported Tuesday third-quarter revenue that beat expectations, although growth was slower than during the previous three months.
The company’s U.S.-listed shares were up around 2% in pre-market trade at 5:00 a.m. ET. The stock is down almost 3% over the year so far.

Revenue grew by 6% year-on-year to 34.45 billion yuan ($4.72 billion) in the quarter that ended Sept. 30. That was slightly higher than analyst expectations of 34.33 billion yuan, according to Refinitiv.
Online marketing revenue at the search engine provider was up by 5% from a year ago, while non-online marketing revenue was 6% higher over the same period.
It comes after revenue in the previous quarter surged 15% from a year ago, with online and non-online marketing revenue growing by double digits.
“Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate,” Robin Li, Baidu CEO and co-founder of Baidu, said in a release.

Adjusted earnings per American Depositary Share were 20.40 yuan in the third quarter, down from 22.55 yuan in the previous three months, but up from 16.87 yuan in the year-ago period.

Baidu reported net income of 6.68 billion yuan for the quarter ended Sept. 30, up from 5.21 billion yuan in the previous quarter.
The company said higher marketing spend contributed to an 11% year-on-year increase in selling, general and administrative expenses which came in at 5.8 billion yuan.

Research and development expenses rose by 6% to 6.1 billion year-on-year, partly due to increased server fees to support Ernie bot research, the company said. That’s a pickup from 1% growth in the second quarter from a year ago.
Ernie bot is Baidu’s version of the artificial intelligence-powered chatbot ChatGPT. Baidu only started charging for Ernie bot in November.
“Baidu Core maintained stable margins in the quarter,” Rong Luo, Baidu CFO, said in a release. “Our ongoing investments in AI have underpinned technological and product innovations. Moving forward, while we will continue prioritizing investments in AI, especially in generative AI and foundation models, we will do so with an unrelenting focus on efficiency and strategic resource allocation.”
The company said its Apollo Go robotaxi business operated 821,000 rides in the third quarter, up from 714,000 rides in the second three months of the year.
In September, the suburban Beijing city district of Yizhuang officially let local robotaxi operators charge fares for fully autonomous taxis, with no drivers inside.
Baidu also announced that Sandy Xu, former CFO of JD.com, would join the company as an independent director of the board starting Jan 1, 2024.

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U.S. financial technology firm Plaid has hired Brian Dammeir, Adyen’s global head of unified commerce, as its new head of Europe, the company told CNBC exclusively.
Dammeir will take over the reins from Ripsy Bandourian, who previously oversaw the company’s expansion across Europe, at a pivotal time for the company.

Plaid’s new head of Europe, Brian Dammeir.

U.S. financial technology firm Plaid has hired former Adyen executive Brian Dammeir as its new head of Europe, the company told CNBC exclusively.
Dammeir was previously Adyen’s global head of unified commerce, a role he led out of the Dutch payment company’s San Francisco office. Dammeir oversaw a key part of Adyen’s business — joining up different payment experiences including online, in-store, and app-based, in one single platform.

Dammeir will take over the reins from Ripsy Bandourian, who previously oversaw the company’s expansion across Europe, at a pivotal time for the company as it branches out into other areas of finance including payments and lending.
Plaid, which was last valued by investors at $13.4 billion in a funding round, offers technology that enables financial technology apps to retrieve data from people’s bank accounts and initiate payments on their behalf.
It is part of a movement in finance and technology known as “open banking,” which encourages the opening up of financial data to non-bank financial institutions to encourage competition in the sector.
Dammeir told CNBC in an exclusive interview Monday that the thing he was most excited by in joining the company was “the opportunity around open finance,” an evolution on open banking that looks to innovate in all areas of finance, including lending.
“When we think about Europe, it’s about how can we be more relevant globally … how can we find more and more use cases outside of our starting point in fintech.” Dammeir told CNBC.

“Right now, that’s really about expanding into account-to-account payments as well as into lending and traditional banking,” he added.
Bandourian, a former Booking.com executive, was appointed the company’s first head of Europe last year. She worked with Keith Grose, formerly Plaid’s head of international, who has since left the business to join business-to-business billing platform Sequence.
Bandourian left Plaid to “pursue other passions,” a company spokesperson told CNBC via email. Dammeir had interacted with executives at Plaid for “more than a decade,” the spokesperson added.
Dammeir didn’t take his decision to quit Adyen lightly. The longtime fintech executive held positions at Adyen in its North American and European offices for more than eight years, starting in product, before graduating onto general management and strategy across North America and Europe.
Dammeir said that Plaid wanted to encourage a broader movement toward so-called “open finance,” which would enable the creation of innovative new products in lending, insurance, and other parts of the finance ecosystem.
Payments has been a big focus for Plaid beyond financial data, with payment volumes on the platform having climbed more than 90% in 2023.
Now, Plaid is looking to work with partners beyond just fintechs, Dammeir indicated, without sharing names of any of its potential future partners. The company already works with the likes of Monzo, Checkout.com, Public, and Moneybox. More

China’s property market, which makes up a substantial chunk of the country’s economy, needs more government support to prevent it from deteriorating further, analysts said.
Existing home prices fell in October by the most since 2014, while outstanding property loans fell for the first time in history, Larry Hu, chief economist at Macquarie, said in a note.
Late on Friday, the People’s Bank of China announced it held a meeting with other financial regulators to allow lending to real estate developers that are operating normally, among other signals of support.

Apartment blocks under construction in the Nanchuan area of Xining, Qinghai province, China.
Qilai Shen | Bloomberg | Getty Images

BEIJING — China’s property market, which makes up a substantial chunk of the country’s economy, needs more government support to prevent it from deteriorating further, analysts said.
Existing home prices fell in October by the most since 2014, while outstanding property loans fell for the first time in history, Larry Hu, chief economist at Macquarie, said in a note Friday.

That indicates increased drags on both the demand and the supply side.
Policy so far has focused on boosting demand. But the government hasn’t “addressed the most important issue: credit risk related to developers,” according to a Macquarie report.
“Without a lender of last resort, a self-fulfilled confidence crisis could easily happen as falling sales and rising default risks reinforce each other,” the report said. “Indeed, some large developers have recently seen their credit risks rising rapidly.”

Beijing has sought to reduce real estate developers’ high reliance on debt to fuel growth, while tamping down on a surge in home prices that has made buying an apartment in major cities prohibitively expensive for many young Chinese households.
UBS analysts estimated that real estate and related sectors now account for about 22% of China’s gross domestic product, down from around 25% levels seen in recent years.

Since November 2022, Chinese authorities have rolled out a raft of measures aimed at improving developers’ access to financing and reducing mortgage rates.

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Markets ‘too optimistic’?

Recent figures indicate that property sector troubles are only worsening.
The average price for existing homes across 70 major cities fell by 0.6% in October from the prior month, compared with a 0.5% drop in September, with China’s largest cities leading declines, Nomura analysts said in a report last week citing official data.
That’s concerning since larger cities are expected to have a more sustained demand for homes due to the availability of jobs.
“China’s property sector has yet to bottom out,” the report said. “Markets appear to have been a bit too optimistic about the property stimulus policies over the past two months.”

More high-level signals

Policymakers in the last few days have made an effort to signal more support.
The People’s Bank of China late Friday announced it held a meeting with other financial regulators to allow lending to real estate developers that are “operating normally”, among other signals of support. The authorities also called for developing affordable housing, according to the readout.
“The meeting should help avoid an undesirable contraction of credit extension in the final two months of the year, as financial institutions try to time new loan deals to the new year to engineer a strong start,” Citi analysts said in a report Monday.
“The continued emphasis on supporting real estate financing and LGFV debt resolution will continue [to help] prevent risks [from] escalating,” the report said. “As fragile growth continues to call for an accommodative monetary environment, the meeting is moving along the needed direction while more supports are still needed to boost private sentiment.”
Shares of several major property companies closed higher on Monday, with developer Sunac rising 5.9% in Hong Kong trading. More

Viewed from one of Istanbul’s glitziest restaurants, the Bosphorus looks sublime. The venue is a favoured haunt of mandarins, businessmen, minor celebrities—and Hamas’s financiers. A man on whom America has imposed sanctions for funding the Islamist group describes his various board seats. “It’s ridiculous,” he says, of America’s accusation, but eventually admits, “now, if you’re asking what our employees do with their own money, why would I know?”Hamas has three sources of power: its physical force inside Gaza, the reach of its ideas and its income. Since Hamas’s attacks on October 7th, Israel has killed more than 12,000 Palestinians in Gaza in seeking to wreck the first. But Israel’s declared goal of destroying Hamas for good requires its financial base to be dismantled, too. Very little of this sits in Gaza at all. Instead, it is overseas in friendly countries. Furnished with money-launderers, mining companies and much else, Hamas’s financial empire is reckoned to bring in more than $1bn a year. Having been painstakingly crafted to avoid Western sanctions, it may be out of reach for Israel and its allies.Hamas’s income pays for everything from schoolteachers’ salaries to missiles. Around $360m each year comes from import taxes on goods brought into Gaza from the West Bank or Egypt. This is the easiest source of cash for Israel to strangle. After withdrawing from the strip in 2005, it strictly limited the movement of goods and people across the border. Now it stops even most basic necessities from getting in.A much larger income stream, though, comes from abroad. Israeli officials reckon this amounts to around $750m per year, making it the main source of funding for Hamas’s current stockpile of arms and fuel. Some comes from friendly governments, the biggest of which is Iran. America reckons that the ayatollahs provide $100m to Palestinian Islamist groups, mainly in military aid. The task for Hamas’s financiers is to move this money around without falling prey to America’s sanctions. In the past month alone, American officials have imposed three rounds of restrictions on people and companies for funding Hamas.Dodging American sanctions requires some ingenuity. Millions of dollars flow to Hamas through crypto markets. “You’d be surprised how much of the market’s activity comes back to [Hamas],” says Firuze Segzin, an economist at Bilkent University. America’s treasury department says Hamas has smuggled more than $20m through Redin, a currency exchange crammed among tourist shops deep in Istanbul’s run-down Fatih neighbourhood.But the lion’s share of Hamas’s money—at least $500m a year, say Israeli officials—comes from its investments, some of which are firms registered in countries across the Middle East. These are run by professionals from Hamas’s investment office and employ its members. American officials say the firms donate to charities which in turn funnel funds to Hamas; Turkish officials say profits are sometimes taken directly. Untangling these revenue streams is tricky for Western regulators. One such firm built the Afra Mall, Sudan’s first shopping mall, while another mines near Khartoum, its capital. A third built skyscrapers in Sharjah, in the United Arab Emirates (uae). Many of these companies boast of their business deals, but deny affiliation with Hamas. Can any revenue streams remaining to Hamas be choked off? That depends on the countries through which they flow. Since 1989, when Israel arrested a handful of Hamas’s top brass in Gaza and the West Bank, its bankers have lived abroad. Over time, though, geopolitical shifts have forced them to keep moving. Hamas abandoned its first financial hub, Amman, after Jordan’s ties to America grew too close.Today, while Hamas’s politicians favour Doha, the capital of Qatar, and its companies range from Algeria and Sudan to the UAE, its financiers live in Istanbul. Zaher Jabarin, accused by Israel of running Hamas’s finances (which he denies), is based there, as are several other individuals under sanctions by America for funding the organisation. Eager to gain regional influence by supporting the Palestinian cause, Recep Tayyip Erdogan, Turkey’s president, offers shelter. Israel says that the Turkish government hands out passports (which it denies) and lets Hamas keep an office in the country.Meanwhile, Turkey’s banking system helps Hamas dodge American sanctions by conducting complex transactions across the world. A booming, lightly regulated crypto market helps. Many of Turkey’s biggest banks, including Kuveyt Turk, have been accused by Israel and America of knowingly storing Hamas’s cash. Some murmur that Mr Erdogan quietly approves. In 2021 the Financial Action Task Force, a G7 watchdog, placed Turkey on its “grey list” of countries doing too little to freeze terrorists’ assets.No one benefits more than Hamas’s businessmen. The Turkish government’s tacit approval “opens doors and makes things smooth in business”, says one of the group’s finance employees. Trend GYO, an Istanbul-listed firm that has been placed under sanctions by America for funnelling funds to Hamas, won an official contract to build Istanbul Commerce University. Construction companies, which feature heavily in Hamas’s portfolio, can quietly swallow huge lumps of cash, and regularly receive large loans. All this allows Turkish officials to say that they are not directly lining Hamas’s pockets.So far, Hamas seems financially bulletproof. Israel has inflicted little harm on either its income or savings; Turkey’s banks have been unco-operative. America’s numerous sanctions are less effective if their targets can keep cash outside its banking system. And Hamas hides its companies well. “Every time you think you’ve got a big fish, it changes its name,” despairs one ex-Treasury official.In fact, the risk is that Hamas’s finances will improve. As Israel steps up its attacks on Gaza, Western governments may blanch at the humanitarian horror. Countries with pro-Palestinian populations may make it even easier for Hamas to earn money. For months, rumours have circulated that some civil servants in Mr Erdogan’s economic ministry are co-ordinating with Hamas’s finance office.For Israel, Hamas growing richer despite the war would be a disaster. With its wealth and financial roots intact, it—or a similar organisation—may well flourish after the destruction. Gazans, meanwhile, have been plunged into tragedy so that Israel can destroy a group whose money and power are safely ensconced elsewhere. Compare their plight to the picture in Istanbul: eating lobster and gazing at the Bosphorus. ■ More

Fifty-seven percent of people tip 15% or less for a sit-down meal at a restaurant, according to a Pew Research Center poll.
Of those, 37% said 15% is their standard tip and 18% tip something less than 15%. An additional 2% tip nothing, Pew found.
Restaurant meals are the most commonly tipped service. When we tip, it’s often due to social approval instead of service quality, one expert said.

Thomas Barwick | Digitalvision | Getty Images

When it comes to dining, tipping at least 15% to 20% is traditional etiquette, say experts.
It seems many Americans disagree.

Almost 1 in 5, 18%, of people tip less than 15% for an average meal at a sit-down restaurant — and an additional 2% tip nothing at all, according to a Pew Research Center survey, which polled 11,945 U.S. adults. More than a third, 37%, said 15% is their standard tip.
“That did surprise me,” Drew DeSilver, co-author of the study, said of finding that more than half of people, 57%, tip 15% or less.
“The U.S. has a more highly developed tipping culture than most other countries,” he added. “But there’s such a lack of agreement about [it].”
Pew hasn’t done historical polling on tips, so it’s unclear how these shares have trended over time.
More from Personal Finance:Here’s how to save on Thanksgiving costs despite inflationMore people turn to their parents to buy a house in today’s market100-year-old explains how he still has $1 million saved

Why consumers are getting tip fatigue

Americans are more likely to tip for a sit-down meal than any other service: Two-thirds of U.S. adults always tip a server when they dine, according to Bankrate. The Pew survey found that 81% always tip for a restaurant meal, a higher percentage than those who tip for haircuts, food delivery, buying a drink at a bar or using a taxi or ride-hailing service, for example.
Etiquette expert Diane Gottsman recommends tipping 15% to 20% for sit-down restaurant service in 2023.
However, studies suggest “tip fatigue” has led tip amounts to decline recently. For example, the average nationwide tip at full-service restaurants fell to 19.4% of the total check in the second quarter of 2023 — the lowest amount since the start of the Covid-19 pandemic, according to Toast data.
And the share of people who always tip restaurant waitstaff fell by 4 percentage points from 2019 to 2022, according to Bankrate.

“People’s willingness to tip, even in restaurant settings, is going down,” said Michael Lynn, a professor at Cornell University’s School of Hotel Administration and an expert on consumer behavior and tipping.
Americans became more generous tippers in the early days of the pandemic, embracing the practice as a way to help service workers and their employers. Now, they’re getting “fed up,” Lynn said.   
“You can understand why: We’re being asked to tip in circumstances and for services that aren’t traditionally tipped,” he said. “And the amounts we’re being asked to tip are higher.”
The proliferation of tip prompts has come to be known as “tip creep.” It comes at a time when pandemic-era inflation — which peaked last year at a high unseen in four decades — has pinched household budgets.

Tips buy social approval

One of the challenges relative to tip amounts is the lack of a “centralized authority” to guide norms, Lynn said.
Most people — 77% — cite service quality as a “major factor” when choosing whether and how much to tip, according to Pew.

However, service is ultimately a weak predictor of consumer behavior, Lynn said; social approval — from our dining partners, waitstaff and others — is a much stronger determinant.
“We’re buying approval” with tips, Lynn said.
Just 23% of Pew survey respondents cited social pressure as a major factor.
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Mastercard told CNBC exclusively Monday that it’s partnered with Feedzai, a regulatory technology platform, to improve monitoring and blocking of fraud in crypto.
Feedzai will integrate with Mastercard’s CipherTrace Armade platform, which is used to help banks monitor transactions from over 6,000 crypto exchanges for fraud.
The move marks a major push from Mastercard into crypto — specifically, efforts to clean the space up of fraud and scams.

BARCELONA, SPAIN – MARCH 01: A view of the MasterCard company logo on their stand during the Mobile World Congress on March 1, 2017 in Barcelona, Spain. (Photo by Joan Cros Garcia/Corbis via Getty Images)
Joan Cros Garcia – Corbis | Corbis News | Getty Images

Mastercard is doubling down on its efforts to detect and prevent fraud that’s routed through cryptocurrency exchanges.
The company told CNBC exclusively that it’s partnered with Feedzai, a regulatory technology platform that aims to combat money laundering and financial scams online using artificial intelligence.

Through the partnership, Feedzai will integrate directly with Mastercard’s CipherTrace Armada platform, which is used to help banks monitor transactions from over 6,000 crypto exchanges for fraud, money laundering and other suspicious activity.
CipherTrace Armada will be embedded directly in Feedzai’s technology, rather than accessed through an API, or application programming interface, with Feedzai “inhaling” the data to enable real-time alerts about suspicious crypto transactions.
“This will increase fraud detection by protecting unwary consumers, but will also detect potential money laundering activity and mule accounts,” Feedzai CEO and co-founder Nuno Sebastio told CNBC. Mule accounts are accounts of users that fraudsters exploit to launder their ill-gotten funds.
An estimated 40% of scam transactions exit directly from a bank account to a crypto exchange today, according to Feedzai data.
The tie-up will also give Mastercard access to Feedzai’s artificial intelligence smarts. Feedzai says its software can identify and block suspicious transactions in a matter of nanoseconds — but also recognize transactions that are legitimate.

Feedzai’s RiskOps platform analyzes transactions worth over $1.7 trillion annually. Co-headquartered in Coimbra, in Portugal, and San Mateo, California, in Silicon Valley, the firm holds close to 100 patents and secures an average of 10 patents per year to safeguard its technology. 
“Numerous banks that believe they are preventing illegitimate cryptocurrency transactions are, in fact, only blocking transactions involving the widely recognised and regulated entities within the crypto space and omitting the rest,” Sebastio said.

Crypto entering the mainstream?

The move marks a push from Mastercard into the market for legitimizing crypto as a mainstream financial asset that can be subjected to the same rules and compliance frameworks as traditional assets.

Banks and other large financial institutions have shown increased interest in experimenting with crypto in their products and services. But the next step, deploying commercially available crypto products as part of their core offerings, has proven more elusive.
Banks have been wary of digital assets’ lack of comprehensive regulations and applications in fraud and scams.
Last year, the amount of theft and scams led to a global increase of 79% in crypto-related losses from the previous year, according to data from blockchain analysis firm Chainalysis. Illicit addresses received $14 billion in 2022 year-over-year, almost twice what they received in 2020.
Mastercard’s vast network is used by banking institutions worldwide to process and monetize payments.
The company competes with fellow payments giant Visa, which is also in the business of supporting card payments, among other fintech services.
In the U.K., banks have shown hesitation when it comes to being associated with crypto. Several larger lenders have halted transactions with crypto exchanges on their networks, citing the risk of fraud. 
Top banks including JPMorgan, NatWest, and HSBC have restricted or blocked crypto transactions. This led to criticisms from Coinbase CEO Brian Armstrong, who said the development jarred with the U.K.’s ambition to become a global “Web3” hub.
Ajay Bhalla, president of cyber and intelligence solutions for Mastercard, told CNBC that the “interconnectedness of life today and increasing digital penetration of finance has brought risk as well as opportunity.”
“Our latest data shows fraud on transactions where people are buying crypto is 5 times higher than regular fiat transactions,” Bhalla said via email, adding that, with Mastercard’s new tie-up with Feedzai, financial institutions will “be able to tell good transactions from bad.”
The partnership builds on Mastercard’s deal to acquire U.S. blockchain sleutching firm CipherTrace. Mastercard bought CipherTrace in 2021, and the following year launched its first product using the firm’s technology, called CryptoSecure, to analyze and block transactions from fraud-prone crypto exchanges. More

Legendary value investor Jeremy Grantham is betting on a special caliber of stocks with his firm’s first active ETF: the GMO U.S. Quality ETF.  
And he put GMO partner Tom Hancock in charge of it.

“There’s a lot more interest in active ETFs than there was even a few years ago,” Hancock told CNBC’s “ETF Edge” this week. “Coming from our clients, a lot of them are really excited about investing in ETFs. Of course, there are the tax advantages. But even amongst our institutional clients, just the ease of trading them is pretty material.”
Hancock says the new ETF is built around companies that can sustainably deploy capital and high rates of return, with a focus on technology, health care and consumer staples. 
According to GMO’s website, as of November 17th, the ETF’s top holdings include Microsoft, UnitedHealth and Johnson & Johnson.
“[These companies] can do things competitors can’t. Moats around their business. They have strong balance sheets,” he said. “These are battleship companies that are going to remain relevant and important going forward.”
Yet, the stocks’ performance is mixed so far this year. Microsoft is up almost 54% so far this year. Shares of UnitedHealth are virtually flat while Johnson & Johnson is down more than 15%.

‘Better chance at outperformance’

ETF Store President Nate Geraci sees active ETFs as natural evolution in the industry.
“If you think of an active manager attempting to generate after tax alpha, the ETF wrapper helps lower that hurdle. It offers a better chance at outperformance,” Geraci said.
He adds ETFs can give active managers a better chance at long-term success.
Since its Wednesday launch, the GMO U.S. Quality ETF is up less than a half a percent.

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Boston Federal Reserve President Susan Collins said Friday that more interest rate hikes could yet be needed to bring down inflation.
Inflation reports this week showed a slowing pace in both consumer and producer prices. However, Collins said recent data has been “noisy.”

Despite recent encouraging signs on inflation, Boston Federal Reserve President Susan Collins said Friday that more interest rate hikes could yet be needed.
“I understand the tendency to really enjoy good news, and there was some good news in some of the numbers — and I think that we need to appreciate that. But I don’t see additional firming off the table,” the central bank official told CNBC’s Steve Liesman during a “Squawk on the Street” interview. “I think the key point is we need to really stay the course.”

Other Fed officials have been saying much of the same, essentially that inflation is showing progress towards the Fed’s 2% 12-month target but still has a way to go. Policymakers are leery over repeating the mistakes of the past, where the Fed quit too early in efforts to bring down inflation and ended up paying for it.
Inflation reports this week showed a slowing pace in both consumer and producer prices. However, Collins said recent data has been “noisy.”
“We need to look holistically at the data,” she said. “So [there has been] promising news, which is great. But I remain focused on really looking at the kind of full complement of information that we’re getting and making assessments in real time about the right thing to do.”
Markets think there’s virtually no chance the Fed will hike any more during this cycle. The central bank’s benchmark borrowing rate is targeted in a range between 5.25%-5.5%, the highest in 22 years. Market pricing projects the Fed will start cutting in May and lop a full percentage off the fed funds rate by the end of 2024, according to the CME Group’s FedWatch gauge.
Collins noted the progress made in stabilizing the labor market and tightening financial conditions, but said it’s “important for us to be patient and recognize that [we’re] far from declaring victory.”

Collins will not be a voting member on the rate-setting Federal Open Market Committee until 2025.
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