Finance

Major e-commerce companies used to report gross merchandise value, an industry measure of sales over time, but did not for a third consecutive year amid weak consumer sentiment.
“I do think for many brands it probably will have turned out a bit better than they thought, but on a low level. Probably nobody would say we hit it out of the ballpark,” said Chris Reitermann, CEO of Ogilvy APAC and Greater China.
“There seems to be an uptick” in consumer sentiment over the last six weeks, said Daniel Zipser, senior partner at McKinsey and leader of its Asia Pacific consumer and retail division.

Staff sort express deliveries at China Post’s Zaozhuang branch in east China’s Shandong province on November 10, 2024
Nurphoto | Nurphoto | Getty Images

BEIJING — China’s Singles’ Day shopping festival saw consumers spend more than expected in what has otherwise been a tepid retail environment, consulting executives told CNBC.
The country’s version of Black Friday kicked off this year on Oct. 14, more than a week earlier than in 2023, and wrapped up Monday. Major e-commerce companies used to report gross merchandise value, an industry measure of sales over time, but did not for a third consecutive year amid weak consumer sentiment.

“I do think for many brands it probably will have turned out a bit better than they thought, but on a low level. Probably nobody would say we hit it out of the ballpark,” said Chris Reitermann, CEO of Ogilvy APAC and Greater China. He is also president of WPP China.
Many multinational corporations that sell consumer products in China are more cautious on the market, if not struggling, Reitermann said. But he pointed out many of the companies are still “very profitable” in the country, even if their growth has slowed to the low single digits, instead of high double digits.
For this year’s Singles Day, Alibaba claimed “robust growth” in GMV and a “record number of active buyers,” while JD.com said the number of shoppers on its platform rose by more than 20% year-over-year.
The shopping season that celebrates single people, also known as Double 11, came as the Chinese government has announced a series of stimulus measures since late September, fueling a stock market rally.

“There seems to be an uptick” in consumer sentiment over the last six weeks, said Daniel Zipser, senior partner at McKinsey and leader of its Asia Pacific consumer and retail division. It’s “hard to predict what that means going forward.”

Singles Day exceeded expectations for most brands, Zipser said. But rather than sales rising across the board, he pointed out pockets of growth in categories such as outdoors, pet care and “blind box” toys — in which consumers buy uniformly marked boxes for a chance at winning a new collectible.
He noted that the blind box category is one that went from $0 before Covid-19 to an industry more than $2 billion in size, reflecting the potential speed of consumer adoption in China.
China’s retail sales for October are expected to have risen by 3.8% from a year ago, according to a Reuters poll. That would be an improvement from 3.2% growth in September.
“We saw people spending more this year,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC on Tuesday. The company helps foreign brands — such as Vitamix and IS Clinical — sell online in China and other parts of Asia.
He estimated 16% growth in GMV for the shopping festival from last year, in likely the strongest performance in years. Cooke added that brands didn’t have to cut prices as much.
Research firm Syntun said Tuesday it estimated 20.1% year-on-year growth in sales over the Singles Day period to 1.11 trillion ($150 billion) for Alibaba’s Tmall, JD.com and PDD.
Investors could get more details on China consumption later this week. JD.com is scheduled to release quarterly results Thursday, followed by Alibaba on Friday.
“We’ve seen consumers who have, if you will, save for a rainy day, and they’ve purchased on this Double 11 shopping festival,” Deborah Weinswig, founder and CEO of Coresight Research, said Tuesday on CNBC’s “Squawk Box Asia.”

She said the company’s weekly survey has indicated some “differences” in consumer sentiment over the last month.

Hopes for a recovery in 2025

China’s consumer spending has come under pressure since the Covid-19 pandemic as households grapple with economic uncertainty. A real estate slump has cut into household wealth, while economic growth has slowed.
While premium or mid-tier brands are “disappearing very fast,” higher-end brands such as Lululemon can do well, Reitermann said. He noted generally that local brands are often lower-priced and able to go to market faster.
He expects some rebound in consumer confidence in the second half of next year, after additional stimulus is likely announced in the first half.
China’s Ministry of Finance last week indicated more fiscal support could come in 2025. While China did not hand out cash to consumers during the pandemic, this year, the country did roll out a trade-in program to subsidize a portion of car and home appliance purchases.
— CNBC’s Sonia Heng contributed to this report. More

The stock market could enjoy a bigger boost from President-elect Donald Trump than any previous administration thanks to his pro-business policies, according to Jeremy Siegel, finance professor at the Wharton School of the University of Pennsylvania.
“President-elect Trump is the most pro-stock market president we have had in our history,” Siegel said Monday on CNBC’s “Squawk Box.” “He measured his success in his first term by how well the stock market did. You know, it seems to me very unlikely he’s going to implement policies that are going to be bad for the stock market.”

The market already reached new heights in reaction to Trump’s election win as investors bet that his promises of tax cuts and deregulation will propel growth and benefit risk assets.
The S&P 500 soared 4.66% last week for its best week since November 2023, trading above 6,000 for the first time ever. The blue chip Dow Jones Industrial Average also climbed above a new milestone of 44,000 post election.

Stock chart icon

Investments seen as the biggest beneficiaries under a Trump presidency exploded during the week. 
Tesla, whose CEO Elon Musk is a prominent backer of Trump, saw shares skyrocket 29% to return to a $1 trillion market cap. Bank stocks such as JPMorgan Chase and Wells Fargo also had big rallies. Bitcoin continued to hit record highs as traders see looser regulations under Trump.
Siegel believes that Trump’s corporate tax cuts from his first term in 2017 are mostly likely to be extended.

“I think the extension of his 2017 tax cuts, looks pretty much like a slam dunk, but the expansion to all his other tax cuts is certainly going to be much more difficult,” Siegel said.
Still, the president-elect’s trade policy, including his vow to slap steep tariffs on trading partners, could hurt growth and inflame inflationary pressures at a time when the Federal Reserve has spent more than two years raising interest rates to bring down price increases.

Don’t miss these insights from CNBC PRO More

Minneapolis Federal Reserve President Neel Kashkari said that tariffs would hurt long-term inflation if global trade partners were to strike back.
One of Donald Trump’s central economic proposals for his second term is to impose universal tariffs on all imports from all countries — with a specifically targeted 60% rate on China.
Economists, Wall Street analysts and industry leaders have repeatedly expressed concerns over the inflationary impact of that hardline trade approach, just as inflation has begun to come down and the Fed is lowering interest rates.

Neel Kashkari, President and CEO, Federal Reserve Bank of Minneapolis, speaks at the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, U.S., May 7, 2024. 
David Swanson | Reuters

Minneapolis Federal Reserve President Neel Kashkari said Sunday that President-elect Donald Trump’s tariff proposals could worsen long-term inflation if global trade partners were to strike back.
One-time tariffs, Kashkari said on CBS’ “Face the Nation,” “shouldn’t have an effect long run on inflation.”

“The challenge becomes, if there’s a tit for tat and it’s one country imposing tariffs and then responses and it’s escalating. That’s where it becomes more concerning, and, frankly, a lot more uncertain,” Kashkari said.
During his first term, Trump essentially sparked a trade war with China when he imposed a series of import taxes on Chinese goods, which triggered the country to retaliate with its own set of tariffs on the U.S.
One of Trump’s primary economic proposals for his second term is to impose universal tariffs on all imports from all countries — with a specifically targeted 60% rate on China.
Economists, Wall Street analysts and industry leaders have repeatedly expressed concerns over the inflationary impact of that hardline trade approach, especially since inflation has just begun to cool from its pandemic-era peaks.
“We’ve made a lot of progress in bringing inflation down,” Kashkari said. “I mean, I don’t want to declare victory yet. We need to finish the job, but we’re on a good path right now.”

The Fed on Thursday passed its second consecutive interest rate cut, continuing its effort to loosen monetary policy as inflation approaches the central bank’s 2% target. Kashkari said he expects another cut to come in December, but that will depend on “what the data looks like” at that time.
As for Trump’s other major policy proposals like a sweeping immigrant deportation plan, Kashkari noted that the inflation threat is still unclear and so the Fed is still taking a “wait and see” approach before adjusting its policy.
Trump and his backers like billionaire Tesla CEO Elon Musk have also been outspoken about their desire to give the president input on Fed policy decisions. The central bank views its political independence as a core feature that allows it to shape monetary policy exclusively based on the health of the U.S. economy, not election incentives.
But Kashkari said he is not concerned about politics permeating Fed decisions.
“I’m confident that we will continue to focus on our economic jobs,” he said. “That’s what should be dictating what we’re doing and that is what’s dictating what we’re doing.” More

In 1971 John Connally, then the American treasury secretary, told his European counterparts that the dollar was “our currency, but your problem”. Over the following half-century the global economy has transformed, but Connally’s adage still rings true: even though the value of the dollar remains largely set by domestic developments in America, its swings almost always send ripples across the world. One such big swing may be on the cards, as the economic policies promised by Donald Trump, America’s president-elect, look set to turbocharge the greenback. That spells trouble for growth in the rest of the world. More

The exchange-traded fund industry is trying to make pair-trade strategies more accessible to everyday investors.
Tidal Financial Group’s Michael Venuto filed last month for eight two-stock ETFs: going long one stock and short the other.

“They should come out probably in about two or three months,” Venuto, the firm’s chief investment officer and co-founder, said on CNBC’s “Halftime Report” this week.

Arrows pointing outwards

These new ETFs aim to simplify long-short trades by bundling both positions into one product and eliminating the need for separate trades, according to U.S. Securities and Exchange Commission filings.

Arrows pointing outwards

VettaFi’s Todd Rosenbluth noted the convenience these ETFs bring to investors.
“Instead of having to short something yourself, the ETF is going to do that for you. And so, there’s a convenience factor that’s out there,” the firm’s head of research said on CNBC’s “ETF Edge” this week.
This streamlined approach could attract investors looking for ease of access in balancing market positions.

Rosenbluth also pointed out the potential popularity of these ETFs.
“I think the ETF adoption is going to continue, even if we have some of these niche-oriented products sitting side by side with Vanguard 500 in a portfolio,” Rosenbluth said.
CORRECTION: This article has been updated to reflect the Securities and Exchange Commission’s filings description of two-stock ETFs.

Disclaimer More

China on Friday announced a five-year package totaling 10 trillion yuan ($1.4 trillion) to tackle local government debt problems, while signaling more economic support would come next year.
The debt swap program, however, fell short of many investors’ expectations for more direct fiscal support.

BEIJING – China on Friday announced a five-year package totaling 10 trillion yuan ($1.4 trillion) to tackle local government debt problems, while signaling more economic support would come next year.
Minister of Finance Lan Fo’an told reporters Friday that authorities planned to “actively use” the available deficit space that can be expanded next year. He called back to October, when he had said that the space to take this step was “rather large.”

His comments, translated by CNBC, came after the standing committee for China’s parliament, the National People’s Congress, on Friday wrapped up a five-day meeting that approved a proposal to allocate an additional 6 trillion yuan to increase the debt limit for local governments.
The program takes effect this year and will run through the end of 2026 for around 2 trillion yuan a year, Lan told reporters.
He added that, starting this year, central authorities would issue an annual 800 billion yuan in local government special bonds over a five-year stretch, for a total of 4 trillion yuan.
The policies would contribute to local governments’ efforts to reduce their so-called “hidden debt,” which Lan estimates could drop from 14.3 trillion yuan as of the end of 2023 to 2.3 trillion yuan by 2028, Lan said. He noted how the new measures would alleviate pressure on local authorities and free up funds for supporting economic growth.
“The local government’s hidden debt resolution measures introduced by China today are a concrete manifestation of the central government’s economic policy shift, with a total debt amount beating market expectations, to a certain extent,” said Haizhong Chang, executive director for corporates at Fitch Bohua.

“Compared with the amount of debt resolution in recent years, the scale is significantly larger this time,” he said.
The debt swap program, however, fell short of many investors’ expectations for more direct fiscal support. The iShares China Large-Cap ETF (FXI) was nearly 5% lower in premarket trading.
“While the market may have to wait for more substantial policy changes, the potential for future monetary and fiscal measures remains,” Chaoping Zhu, Shanghai-based global market strategist at J.P. Morgan Asset Management, said in a note. “Factors such as a deep stock market correction, export headwinds, or mounting fiscal pressures on local governments could serve as catalysts for policy escalation.”

Stimulus steps

Authorities here have ramped up stimulus announcements since late September, fueling a stock rally. On Sept. 26, President Xi Jinping led a meeting that called for strengthening fiscal and monetary support and stopping the real estate market slump.
While the People’s Bank of China has already cut several interest rates, the country’s fiscal policy governed by the Ministry of Finance would require major increases in government debt and spending, which need parliamentary approval.
During a similar meeting in October of last year, authorities had approved a rare increase in China’s deficit to 3.8%, from 3%, according to state media. This year’s gathering did not announce such a change.
Daily official readouts of the parliamentary meeting this week had said officials were reviewing the proposal to increase the local government debt limit to address hidden debt.
Analysts expect an increase in the scale of fiscal support after Donald Trump — who has threatened harsh tariffs on Chinese goods — won the U.S. presidential election this week. But some are still cautious, warning that Beijing may remain conservative and not issue direct support to consumers.
“We don’t expect policymakers to increase stimulus this year, as they need to know more about the new U.S. trade policy,” Larry Hu, chief China economist at Macquarie, said in a report Friday. “As such, the NPC meeting this week focused on debt swap rather than new stimulus.”
When discussing planned fiscal support at a press conference last month, Lan emphasized the need to address local government debt problems.

Nomura estimates that China has 50 trillion yuan to 60 trillion yuan ($7 trillion to $8.4 trillion) in such hidden debt, and expects Beijing could allow local authorities to increase deb issuance by 10 trillion yuan over the next few years.
That could save local governments 300 billion yuan in interest payments a year, Nomura said.
In recent years, the country’s real estate slump has drastically limited a significant source of local government revenues. Regional authorities have also had to spend on Covid-19 controls during the pandemic.
Even before then, local Chinese government debt had grown to 22% of GDP by the end of 2019, far more than the growth in revenue available to pay that debt, according to an International Monetary Fund report. More

Jeffrey Gundlach speaks at the 24th Annual Sohn Investment Conference in New York, May 6, 2019.
Adam Jeffery | CNBC

DoubleLine Capital CEO Jeffrey Gundlach said Thursday that interest rates could shoot higher if Republicans end up controlling the House, securing a governing trifecta that gives President-elect Donald Trump free rein to spend as he pleases.
Gundlach, a noted fixed-income investor whose firm manages over $96 billion, believes the higher government spending would require more borrowing through Treasury issuance, putting upward pressure on bond yields.

“If the House goes to Republicans, there’s going to be a lot of debt, there’s going to be higher interest rates at the long end, and it’ll be interesting to see how the Fed reacts to that,” Gundlach said on CNBC’s “Closing Bell.”
The race to control the House is undecided as of Thursday after Republicans clinched their new Senate majority. The Federal Reserve cut rates Thursday, and traders expect the central bank to cut again in December and several times in 2025.
Notable investors such as Gundlach have been voicing concerns about the challenging fiscal situation. Fiscal 2024 just ended with the government running a budget deficit in excess of $1.8 trillion, including more than $1.1 trillion dedicated solely to paying financing costs on the $36 trillion U.S. debt.
“Trump says he’s going to cut taxes … he’s very pro cyclical stimulus,” Gundlach said. “So it looks to me that there will be some pressure on interest rates, and particularly at the long end. I think that this election result is very, very consequential.”
If the Trump administration extends the 2017 tax cuts or introduces new reductions, it could add a significant amount to the nation’s debt in the next few years, worsening the already troublesome fiscal picture.

Still, Gundlach, who had predicted a recession in the U.S., said the Trump presidency makes such an economic downturn less likely.
“I do think that it’s right to see the Trump victory as being as reducing the odds for near-term recession fairly substantially,” Gundlach said. “Certainly, the odds of recession drop when you have this type of agenda being promoted in plain English for the past three months by Mr. Trump.” More

Expectations for a December interest rate cut remained strong after the Federal Reserve trimmed rates by a quarter percentage point in November.
On Thursday afternoon, the U.S. central bank lowered the federal funds rate to a target range of 4.5% to 4.75%.

Federal Reserve Chair Jerome Powell speaks during a news conference following the Nov. 6-7, 2024, Federal Open Market Committee meeting at William McChesney Martin Jr. Federal Reserve Board Building in Washington, D.C., on Nov. 7, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images

Expectations for a December interest rate cut remained strong after the Federal Reserve trimmed rates by a quarter percentage point in November, but market pricing is suggesting the likelihood of a “skip” in January.
On Thursday afternoon, the U.S. central bank lowered the federal funds rate, which determines what banks charge each other for overnight lending, to a target range of 4.5% to 4.75%.

Before the Fed released this decision at 2 p.m. ET, market pricing pointed toward a 67% chance of another quarter-point cut in December and a 33% chance of a pause that month, according to the CME FedWatch Tool.
The probability of a quarter-point December rate cut rose to more than 70% following the meeting, while the chances of a pause slipped to nearly 29%. Future rate probabilities found in the CME FedWatch Tool are derived from trading in 30-day fed funds futures contracts.
Meanwhile, the odds that the Federal Reserve would skip an interest rate cut in January was around 71%. This was slightly higher from 67% before the release of the Fed’s November decision on Thursday afternoon.
— CNBC’s Jeff Cox contributed to this report.

Don’t miss these insights from CNBC PRO More