Finance

Philadelphia Federal Reserve President Patrick Harker provided a strong endorsement to an interest rate cut on the way.
“I think it means this September we need to start a process of moving rates down,” Harker told CNBC.
Kansas City Fed President Jeffrey Schmid also spoke to CNBC, offering a less direct take on the future of policy, though he leaned toward a cut ahead.

Philadelphia Federal Reserve President Patrick Harker on Thursday provided a strong endorsement to an interest rate cut on the way September.
Speaking to CNBC from the Fed’s annual retreat in Jackson Hole, Wyoming, Harker gave the most direct statement yet from a central bank official that monetary policy easing is almost a certainty when officials meeting again in less than a month.

The position comes a day after minutes from the last Fed policy meeting gave a solid indication of a cut ahead, as officials gain more confidence in where inflation is headed and look to head off any potential weakness in the labor market.
“I think it means this September we need to start a process of moving rates down,” Harker told CNBC’s Steve Liesman during a “Squawk on the Street” interview. Harker said the Fed should ease “methodically and signal well in advance.”
With markets pricing in a 100% certainty of a quarter percentage point, or 25 basis point, cut, and about a 1-in-4 chance of a 50 basis point reduction, Harker said it’s still a toss-up in his mind.
“Right now, I’m not in the camp of 25 or 50. I need to see a couple more weeks of data,” he said.
The Fed has held its benchmark overnight borrowing rate in a range between 5.25%-5.5% since July 2023 as it tackles a lingering inflation problem. Markets briefly rebelled after the July Fed meeting when officials signaled they still had not seen enough evidence to start bringing down rates.

However, since then policymakers have acknowledged that it soon will be appropriate to ease. Harker said policy will be made independently of political concerns as the presidential election looms in the background.
“I am very proud of being at the Fed, where we are proud technocrats,” he said. “That’s our job. Our job is to look at the data and respond appropriately. When I look at the data as a proud technocrat, it’s time to start bringing rates down.”
Harker does not get a vote this year on the rate-setting Federal Open Market Committee but still has input at meetings. Another nonvoter, Kansas City Fed President Jeffrey Schmid, also spoke to CNBC on Thursday, offering a less direct take on the future of policy. Still, he leaned toward a cut ahead.

Schmid noted the rising unemployment rate as a factor in where things are going. A severe supply-demand mismatch in the labor market had helped fuel the run in inflation, pushing wages up and driving inflation expectations. In recent months, though, jobs indicators have cooled and the unemployment rate has climbed slowly but steadily.
“Having the labor market cool some is helping, but there’s work to do,” Schmid said. “I really do believe you’ve got to start looking at it a little bit harder relative to where this 3.5% [unemployment] number was and where it is today in the low 4s.”
However, Schmid said he believes banks have held up well under the high-rate environment and said he does not believe monetary policy is “over-restrictive.”
Harker next votes in 2026, while Schmid will get a vote next year.

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The Russell 2000 may have a profitability problem.
Though the small-cap index gained 10.1% in July, it’s dropped roughly 4% so far in August, as of Thursday morning.

ALPS’ Paul Baiocchi chalks up the volatile moves to the index’s overall composition, with an estimate from Apollo Global showing 40% of those companies have negative earnings.
“[Investors] have basically resigned themselves to the fact that by being in the Russell 2000, I’m just going to have to take the good with the bad,” the firm’s chief ETF strategist told CNBC’s “ETF Edge” this week.
To avoid the profitability drag, Baiocchi suggests investors prioritize quality companies, looking at more selective exchange-traded funds such as his firm’s ALPS O’Shares U.S. Small-Cap Quality Dividend ETF Shares (OUSM).
“The idea is quality companies that pay and grow their dividends, and importantly, have less volatility than their peers,” he said. “It allows advisors and investors who have seen small caps go sideways for five years to be allocated to a category that’s lagged.”
In addition to its profitability screen, the fund contains just 107 stocks — a fraction of what’s inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks and Old Republic International, each sitting at a roughly 2% weighting in the fund, per FactSet.

Shares of the small-cap fund are down 1.5% month to date — outperforming the Russell by more than 2 percentage points in that time.
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Mike Lynch was founder of enterprise software firm Autonomy.
He became the target of a protracted legal battle with Hewlett Packard after the firm accused Lynch of inflating Autonomy’s value in an $11.7 billion sale.
HP took an $8.8 billion write-down on the value of the company within a year of buying it.

Mike Lynch, former chief executive officer at Hewlett-Packard Co.’s Autonomy unit, speaking at a conference on Thursday, April 25, 2013. 
Bloomberg | Bloomberg | Getty Images

LONDON — The body of British technology entrepreneur Mike Lynch, 59, has been retrieved from the wreckage of a yacht that sank off the coast of Sicily, a source familiar with the matter told CNBC on Thursday, confirming earlier reporting by Sky News.
Lynch’s daughter, Hannah, remains unaccounted for, according to the source, who asked not to be identified due to the sensitive nature of the situation. Sky News earlier reported that five bodies pulled from the wreck had been identified by the Italian coast guard, and that Lynch was among the dead.

Lynch, who was reported missing Monday, was one of 22 passengers aboard the Bayesian superyacht, which capsized while anchored in the small fishing village of Porticello, in the province of Palermo in Italy.
On Wednesday, Salvatore Cocina, head of the civil protection agency in Sicily, confirmed to NBC News that five bodies had been recovered from the wreckage of the yacht. The only person confirmed dead by authorities so far has been Recaldo Thomas, a Canadian-Antiguan chef.
CNBC has contacted the Italian coast guard and is awaiting a response.
Lynch was founder of enterprise software firm Autonomy. He became the target of a protracted legal battle with Hewlett Packard after the firm accused Lynch of inflating Autonomy’s value in an $11.7 billion sale. HP took an $8.8 billion write-down on the value of the company within a year of buying it.
Lynch was acquitted in June of fraud charges in a surprise victory in U.S. court following a trial that lasted for three months. He had faced charges of wire fraud and conspiracy for allegedly scheming to inflate Autonomy’s revenue. Lynch denied wrongdoing and told jurors HP botched Autonomy’s integration.

Lynch was also founder of Invoke Capital, a venture capital firm endorsing European tech startups. He became a key voice supporting the U.K. technology industry, backing key names like cybersecurity firm Darktrace and legal tech firm Luminance.
Tributes were paid to Lynch following news of his death.
Russ Shaw, founder of technology industry groups Tech London Advocates and Global Tech Advocates, said Lynch “leaves a legacy as one of the great modern British tech entrepreneurs.”
“His ability to understand how tech can solve big challenges, and then successfully commercialise it was truly unique” Shaw said in a statement emailed to CNBC. “Mike will rightly be remembered for his work in nurturing some of Britain’s great tech companies, including Darktrace, Luminance and Sophia Genetics.”
The Royal Academy of Engineering, which made Lynch a fellow in 2008, said its trustee board, fellows and staff are “deeply saddened” to learn of his death and “send our profound condolences to his family.”
“We have fond memories of the active role he played [as a fellow] in the past, as a mentor, donor and former Council member. He was also one of the inaugural members on the Enterprise Committee,” the academy said on the social media platform X. “Our thoughts are with his family and friends at this time.”
Lord John Browne, former CEO of energy firm BP, said in a post on X that Lynch “should be remembered as the person who catalysed a breed of deep tech entrepreneurs in the U.K. His ideas and his personal vision were a powerful contribution to science and technology in both Britain and globally.” More

WeRide delayed its plan for an initial public offering in the U.S., citing the need for more time to complete documents.
It has been a dry market for Chinese IPOs in the U.S. in recent years, and many were watching WeRide’s potential listing for signs of a pickup.
WeRide was expected to offer 6.5 million ADS (American depositary shares) in the range of $15.50 to $18.50.

In this photo illustration, a WeRide logo of Chinese robotaxi firm is seen on a smartphone and a pc screen.
Getty Images

Self-driving technology company WeRide delayed its plan for an initial public offering in the U.S., citing its need for more time to complete documents.
“Updating transaction documents is currently taking longer than expected, and WeRide is working to complete the documentation necessary to move forward with the transaction,” the company said in a statement Thursday.

WeRide was expected to offer 6.5 million ADS (American depositary shares) in the range of $15.50 to $18.50. It was looking to raise up to $440 million in a U.S. listing that had been set for this week. 
The company, which develops self-driving technology for robotaxis, minibuses as well as freight sanitation vehicles, was last valued around $5.11 billion and has raised $1.39 billion, according to Pitchbook data.
Beijing approval for the deal will expire this week and it’s unclear if the company would need to reapply for approval if it misses the deadline.
The firm was founded in Silicon Valley in 2017 and incorporated in the Cayman Islands, before it launched a robotaxi service in Guangzhou, China, in 2019. It filed for an IPO on the Nasdaq in July.
It has been a dry market for Chinese IPOs in the U.S. in recent years, and many were watching WeRide’s potential listing for signs of pick up. If completed, the IPO would be one of the largest U.S. listings by a Chinese company since Didi’s IPO in 2021. More

John Bogle, founder of the Vanguard Group and pioneer of index funds, may have saved investors more money than anyone else in history. By some estimates, his crusade to drive down fees has, over the past five decades, left them with more than $1trn that would otherwise have gone to fund managers. Index funds, through which speculators can invest in the stockmarket as a whole, cut out the middlemen. In doing so, they have transformed the world of investing. More

The profits of European listed firms rose during the second quarter of this year. In much of the rest of the world, that would be unremarkable. On the old continent, 4.3% earnings growth in the three months to June, compared with the year before, was enough to provide a boost to the Stoxx 600, its benchmark index. After all, the growth came after four consecutive quarters of falling earnings. Markets strategists are now talking up European stocks. Morgan Stanley, an investment bank, even says that they are “in the sweet spot”. More

An early-warning system for recessions would be worth trillions of dollars. Governments could dole out stimulus at just the right time; investors could turn a nice profit. Unfortunately, the process for calling a recession is too slow to be useful. America’s arbiter, the National Bureau of Economic Research, can take months to decide. Other countries simply look at gdp data, which emerge with a lag. More

Kamala Harris’s price-gouging ban would be the first of its kind nationally in America. It is far from clear that such a policy is required. But it would have precedent at lower levels of government: 37 states have rules to stop firms from “excessive” price rises. Those decrying Ms Harris’s idea as a step towards communism can be reassured that many are Republican strongholds, from Arkansas to Idaho. More