Finance

While British fund manager abdrn predicts that the U.S. economy will see a soft landing, there is still the risk of a prolonged slowdown in 2025, said Kenneth Akintewe, the company’s head of Asian Sovereign Debt.
Is the economy already weaker than the headline data suggests and should the U.S. Federal Reserve already be easing? Akintewe questioned on CNBC’s “Squawk Box Asia.”
In the U.S. on Friday, data showed the personal consumption expenditures (PCE) price index, the Federal Reserve’s favored measure of inflation, ticked up 0.2% last month, as expected. The data seems to back a smaller rate cut.

An eagle tops the U.S. Federal Reserve building’s facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/
Jonathan Ernst | Reuters

While British fund manager abdrn predicts that the U.S. economy will see a soft landing, there is still the risk of a prolonged slowdown in 2025, said Kenneth Akintewe, the company’s head of Asian sovereign debt.
Speaking to CNBC’s “Squawk Box Asia” on Monday, Akintewe asked the question: “Is the Fed already sleepwalking into a policy mistake?”

He pointed to economic data like non-farm payrolls, saying they were later revised to reflect a weaker economic picture. In August, the U.S. Labor Department reported that the U.S. economy created 818,000 fewer jobs than originally reported from April 2023 to March 2024.

As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported 2.9 million from April 2023 through March of this year.
Akintewe said: “Is the economy already weaker than the headline data suggests and [the Fed] should already be easing?”
He added that policy changes by the Fed takes time to move through the economy, “so if the economy is weaker than the headline data suggests, they will need to accumulate [a] sufficient amount of easing, you know, 150, 200, basis points, that will take time.”
“And once you’ve done that amount of easing, it takes six to eight months to transmit that.” A spokesperson for the U.S. central bank wasn’t immediately available when contacted by CNBC.

If the economy suddenly shows signs of more weakness at the start of 2025, Akintewe said it will take until the second half of 2025 to see the effects of any easing transmitted through the economy, which could look “quite different” by that time.
He also argued that the market is too focused on forecasting the size of any possible upcoming cut, asking. “The other question no one seems to ask is, why is the policy rate still at 5.5% when inflation is down [to] almost 2.5%? Like, do you need a 300 basis point real policy rate in this kind of environment with all the uncertainty that we’re facing?”

In the U.S. on Friday, data showed the personal consumption expenditures (PCE) price index, the Federal Reserve’s favored measure of inflation, ticked up 0.2% last month, as expected.
The data seems to back a smaller rate cut, with U.S. rate futures suggesting a lesser chance of a 50 basis-point rate cut later in September.
Currently, markets see an almost 70% chance of a 25-basis-point cut at the Fed’s meeting this month, with the remaining 30% expecting the Fed to slash rates by 50 basis points, according to the CME Fedwatch Tool.
— CNBC’s Jeff Cox contributed to this report. More

China’s first attempt at a top-tier video game has smashed world records, bolstering the industry’s global ambitions after Beijing’s gaming crackdown.
Black Myth: Wukong, an action game set in mythological China, sold more than 10 million units three days after its launch on Aug. 20.
Dino Ying, chairman of Hero Games, which co-published the game and was an early investor in its developer Game Science, spoke with CNBC in an exclusive interview.

People walk past the image of the ‘Monkey King’ character, or ‘Sun Wukong’ of Chinese action role-playing game ‘Black Myth: Wukong’, developed by Chinese video game company Game Science, during its launch day in Hangzhou, in eastern China’s Zhejiang province on August 20, 2024.
Str | Afp | Getty Images

BEIJING – China’s first attempt at a top-tier video game has smashed world records, bolstering the industry’s global ambitions just a few years after Beijing’s gaming crackdown.
Black Myth: Wukong, an action game set in mythological China, sold more than 10 million units three days after its launch on Aug. 20. Ten days later, the title still ranked second by revenue in the U.S., and No. 1 globally, according to the Steam video game platform where it sells for around $60 or more.

“I think the next triple-A game is likely very close, because Black Myth: Wukong has shown everyone that a China-made AAA game can reach such high global sales,” said Dino Ying, chairman of Hero Games, which co-published the game and was an early investor in its developer Game Science. That’s according to a CNBC translation of his Mandarin-language remarks in an exclusive interview Thursday.
Ying said he knew of at least one such game under development, which his business partner at Hero Games has invested in. But he declined to share a timeframe.
As for how well Black Myth: Wukong has done, Ying only said sales have since increased by “much more” than the 10 million unit figure, although he indicated it had not yet doubled.

He said that in the future, the company’s game releases will have a global strategy from the start. He also expects foreign AAA game developers to realize how large China’s market is and tailor more features to Chinese players.
AAA games generally refer to titles with high graphics quality and significant marketing. That’s meant such video games have tended to come from companies such as Nintendo, Ubisoft and Electronic Arts.

“China is a big country. We’re talking about 1 million concurrent players,” said Ivan Su, senior equity analyst at Morningstar. “China has 600 million gamers.”
He said the reason why China hasn’t previously developed its own AAA game, which are typically played on computers and consoles, is the years-long production time. “It’s much more cost-effective if you create mobile games,” Su said.

Apple’s Tim Cook visited Hero Games

When Hero Games first invested in Game Science, Apple CEO Tim Cook visited in 2017 and was so impressed by the first game, Art of War: Red Tides, he gave it the front page of the iOS App store in 178 countries, Ying said.
But that wasn’t a commercial success.

Apple CEO Tim Cook visited the office of Hero Games in 2017 after it invested in Game Science, which went on to develop Black Myth: Wukong.
Hero Games

Hero Games had already spent three years investing 60 million yuan (about $8.5 million today) in two failed projects from Game Science when the developer approached Ying and his team in August 2020 about Black Myth: Wukong, he said.
“We’re very lucky, we didn’t give up on Game Science before it succeeded,” Ying said, noting his business partner Daniel Wu, now CEO of Hero Games, had first discovered the startup.
“We aren’t saying to blindly wait for all people,” he said. “When you see that kind of talent, you need to be confident that that talent has been underappreciated. It may not have found the right direction. [So you just need to] help it to find it.”

‘Best game that I have seen’ 

Two days before Game Science planned to release a promotional video for Black Myth: Wukong, the company showed it to Ying and asked his team for at least 100 million yuan more, he said. If not, he said the startup planned to ask Bilibili, a major Chinese video streaming and game platform.
After watching the video, Ying said he told his team that “I really don’t want to miss this opportunity because this is the best game that I have seen in my life.”
Tencent then bought a 5% stake, but said it would not interfere with Game Science’s plans, Ying said. “Because this was an AAA game, under the normal process of a big business, there was no way it would have been approved.”
Hero Games’ initial investment in Game Science was for a 20% stake.

Beijing has only in the last two years started to approve games, after suspending new titles and limiting how many hours minors could play in 2021.
Black Myth: Wukong got China’s government approval in February. No part of the game needed to be changed for it to pass, Ying said.
“Personally I think in the past two years the regulation is increasingly respectful of the game industry and is beneficial to its development,” Ying said, noting that one or two years ago, there “was a misunderstanding.”

Massive market potential

In the first half of this year, domestic game sales in China reached 147.27 billion yuan, said Ashley Dudarenok, founder of China digital consultancy ChoZan, citing industry figures.
But console game revenue was just 0.5% of that, she said.
Ying pointed out that many people in China bought PlayStations or upgraded their graphics cards after Black Myth: Wukong’s release, similar to how many people first bought the Nintendo Switch because of Zelda.

Something that’s lasted 1,000 years, people will definitely like it

Hero Games, chairman

As for the global market, Dudarenok said overseas sales of China-developed games rose to $16.4 billion in 2023, up from $11.6 billion in 2019.
“Chinese games often incorporate rich cultural elements that appeal more and more to a global audience,” she said. “This unique cultural flavor sets them apart from games developed in other regions”
Ying said he expects China has at least five to 10 other stories that have been passed down over the last millennia that can be turned into games.
“If I create a new thing, I don’t know if people will like it. But something that’s lasted 1,000 years, people will definitely like it,” Ying said. “We don’t know why it was preserved over so many years. But we just need to respect the [original] artisans.”
He said Game Science sent teams and equipment to ancient temples in China to scan and replicate the designs, boosting the game’s immersive feel.

Indie Chinese games 

In the more niche market of independent games, Chinese companies are also on the rise.
Shanghai-based Cotton Game, which has a staff of 70 people, won the 2024 award for best development team in indie games from the French-supported Game Connection organization and ChinaJoy, which runs a major annual game conference in China.
“It depends on how capable we are, but [we hope to] use games as a way to share art, philosophy and thoughtful content,” the company’s CEO, who goes by the English name Cotton Guo, said in Mandarin translated by CNBC.
Cotton Game’s Sunset Hills – which took five years to draw by hand – also won the “Game of the Year” and “Best Indie Game” awards. The $20 game launched on Aug. 21 on Steam after raising $13,000 on Kickstarter.
The game follows an anthropomorphic dog through a Europe-like village, accompanied by the sounds of nature and music. Players solve puzzles along the way.
“Everyone is quite tired. In society today, the speed of life is very fast,” Robin Luo, the manager of Sunset Games. Its main character is based on his own dog. “So my hope while making Sunset Hills was that everyone playing the game could [find it] refreshing.” More

A sign hangs above a Dollar General store in Chicago on Aug. 31, 2023.
Scott Olson | Getty Images

Dollar General shares tumbled Thursday after the discount retailer slashed its sales and profit guidance for the full year, suggesting its lower-income customers are struggling in this economy.
Shares of the retailer, which caters to more rural areas, tumbled 25% in premarket trading after the earnings report.

The company now expects fiscal 2024 same-store sales to be up 1.0% to 1.6%, lower than prior outlook for a 2% to 2.7% increase. Earnings per share for the year are expected to be in the range of just $5.50 to $6.20, versus the prior forecast of $6.80 to $7.55 per share.
“While we believe the softer sales trends are partially attributable to a core customer who feels financially constrained, we know the importance of controlling what we can control,” said CEO Todd Vasos in a statement.
Dollar General also reported disappointing numbers for the latest quarter. EPS of $1.70 per share came in below an LSEG estimate of $1.79 per share, while revenue of $10.21 billion was also lower than the analyst expectation of $10.37 billion.
Competitor Dollar Tree was falling in sympathy, off by more than 9% in premarket trading.

Don’t miss these insights from CNBC PRO More

U.S. national security advisor Jake Sullivan said he raised concerns about the country’s focus on economic security in meetings with Chinese officials.
Earlier Thursday, a statement from Chinese President Xi Jinping said he told Sullivan that Beijing hopes Washington will find “a right way” to get along.
Tensions between the world’s two largest economies have escalated in recent years spilling over from trade into finance and technology.

US National Security Advisor Jake Sullivan shakes hands with China’s President Xi Jinping (R) during their meeting at the Great Hall of the People in Beijing on August 29, 2024. 
Trevor Hunnicutt | Afp | Getty Images

BEIJING — U.S. national security advisor Jake Sullivan said he raised concerns about the country’s focus on economic security in meetings with Chinese President Xi Jinping and other officials this week.
Just as the U.S. has cited national security concerns for its own restrictions on Chinese tech imports, China has increasingly emphasized the need to protect its economic security.

Foreign businesses in China have complained of vague data rules and preferential treatment for local players, as well as subsidies that allow Chinese businesses to sell at far lower prices.
Sullivan told reporters Thursday that he had discussed the impact such issues have on Western businesses and supply chains.
“We had a vigorous give and take on the issue, obviously didn’t come to agreement,” Sullivan told reporters during a press conference at the end of the trip.
Sullivan, advisor to the outgoing Biden administration, said his trip to China was part of an effort to manage the bilateral relationship ahead of the inauguration of a new U.S. president in January.

U.S. National Security Advisor Jake Sullivan attends a press conference at the U.S. embassy in Beijing, China August 29, 2024. 
Tingshu Wang | Reuters

It comes just over a month after U.S. President Joe Biden dropped out of the presidential race and endorsed his Vice President Kamala Harris as the Democrat nominee.

Sullivan said he told Chinese officials how Harris has been a “central member” of Biden’s foreign policy team, and is known to China’s top leaders, including having had a meeting with Xi.
The security advisor said Harris “shares” Biden’s view for responsibly managing competition so that it doesn’t veer into confrontation, and that high-level communication is the way to manage that.

Xi-Biden meeting?

Sullivan arrived in Beijing Tuesday for two days of meetings in his first trip to China as national security advisor. He is scheduled to depart China later Thursday.
Sullivan met with Chinese President Xi Jinping, China’s top diplomat Wang Yi, and Zhang Youxia, vice chairman of the Chinese Communist Party’s Central Military Commission on his visit.
Biden and Xi are planning to speak by phone in “coming weeks,” the White House said Wednesday, and Sullivan indicated to reporters that the leaders would likely meet in person later this year on the sidelines of a multilateral conference.
Earlier Thursday, a statement from Xi said he told Sullivan that Beijing hopes Washington will find “a right way” to get along.

Zhang Youxia, Vice Chairman of the CPC Central Military Commission holds a meeting with White House national security adviser Jake Sullivan, at the Bayi building in Beijing, Thursday, Aug. 29, 2024. 
Ng Han Guan | Via Reuters

“While great changes have taken place in the two countries and in China-U.S. relations, China’s commitment to the goal of a stable, healthy and sustainable China-U.S. relationship remains unchanged,” Xi said, according to an English-language release shared by China’s Ministry of Foreign Affairs.
Tensions between the world’s two largest economies have escalated in recent years, spilling over from trade into finance and technology.
The Chinese leader said Thursday that he hopes the U.S. would view China’s economic growth “in a positive” light and “work with China to find a right way for two major countries to get along with each others,” according to Beijing. China surpassed Japan in 2010 to become the world’s second-largest economy, behind the United States.

The last official trip to China by a U.S. president’s national security advisor was in 2016, when Susan Rice traveled to Beijing under the Obama administration.
While the outcome of November’s U.S. presidential election remains unclear, being tough on Beijing is a rare issue that both U.S. political parties agree on.
Harris’ current national security advisor, Phil Gordon, said in May at a Council on Foreign Relations event that the “China challenge” is much greater than Taiwan, and requires ensuring that Beijing “doesn’t have the advanced technology, intelligence and military capabilities that can challenge us.” More

Visitors to Tokyo in the 1990s arrived in a city that looked like the future. A megalopolis of high-rise buildings, neon lights and new technology left a mark on those who witnessed it. But the city has not changed all that much since. Today some travellers joke that Tokyo still looks like a vision of the future—just one planned in 1990. More

An unusual sort of business will soon open in Shelby, North Carolina. It will take over premises previously run by a flooring company, tucked in beside shops selling clothes, paint and fast food. But it will not sell anything itself. Instead, willing donors, paid around $40 a pop, will sit connected to an apheresis machine. Over the course of an hour, the machine will extract their blood, siphon out plasma and recirculate the remaining fluid. The plasma will then be made into medicines, such as clotting factors for haemophiliacs and intravenous immunoglobulins for those suffering from autoimmune diseases. More

Imagine that you are about to enter a room with a group of nine other people. You will display a number—any between, say, 2,500 and 3,000. Once the group enters the room other players will start to come in. Each will choose one of your group, picking the lowest number. You do not know how quickly or slowly the other players will trickle in to pick from the group. What is the highest number you can display while still getting picked quickly? More

Not long ago central bankers everywhere were jacking up interest rates. No longer. In June the European Central Bank reduced rates for the first time since before the covid-19 pandemic. In July policymakers at the Bank of England voted to cut rates. Other central banks, ranging from those in Canada and Chile to Denmark, are also in on the action. Before long America will follow. On August 23rd Jerome Powell, chair of the Federal Reserve, noted that “the time has come for policy to adjust”. And as central bankers loosen policy, they are daring to dream, for a “soft landing” is within reach. More