Finance

Elon Musk on Saturday endorsed Howard Lutnick, Trump-Vance transition co-chair, as his pick for Treasury secretary.
Lutnick and Key Square Group founder and CEO Scott Bessent are reportedly top picks to run the Treasury Department.

Elon Musk at the tenth Breakthrough Prize ceremony held at the Academy Museum of Motion Pictures on April 13, 2024 in Los Angeles, California.
The Hollywood Reporter | The Hollywood Reporter | Getty Images

On Saturday, Elon Musk shared who he is endorsing for Treasury secretary on X, a cabinet position President-elect Donald Trump has yet to announce his preference to fill.
Musk wrote that Howard Lutnick, Trump-Vance transition co-chair and CEO and chairman of Cantor Fitzgerald, BGC Group and Newmark Group chairman, will “actually enact change.”

Lutnick and Key Square Group founder and CEO Scott Bessent are reportedly top picks to run the Treasury Department.
Musk, CEO of Tesla and SpaceX, also included his thoughts on Bessent in his post on X.
“My view fwiw is that Bessent is a business-as-usual choice,” he wrote.
“Business-as-usual is driving America bankrupt so we need change one way or another,” he added.
Musk also stated it would be “interesting to hear more people weigh in on this for @realDonaldTrump to consider feedback.”

Howard Lutnick, chairman and chief executive officer of Cantor Fitzgerald LP, left, and Elon Musk, chief executive officer of Tesla Inc., during a campaign event with former US President Donald Trump, not pictured, at Madison Square Garden in New York, US, on Sunday, Oct. 27, 2024.
Bloomberg | Bloomberg | Getty Images

In a statement to Politico, Trump transition spokesperson Karoline Leavitt made it clear that the president-elect has not made any decisions regarding the position of Treasury secretary.
“President-elect Trump is making decisions on who will serve in his second administration,” Leavitt said in a statement. “Those decisions will be announced when they are made.”
Both Lutnick and Bessent have close ties to Trump. Lutnick and Trump have known each other for decades, and the CEO has even hosted a fundraiser for the president-elect.
The Wall Street Journal also reported that Lutnick has already been helping Trump review candidates for cabinet positions in his administration.
On the other hand, Bessent was a key economic advisor to the president-elect during his 2024 campaign. Bessent also received an endorsement from Republican Senator Lindsey Graham of South Carolina, according to Semafor.
“He’s from South Carolina, I know him well, he’s highly qualified,” Graham said. More

Money manager John Davi is positioning for challenges tied to President-elect Donald Trump’s tariff agenda.
Davi said he worries the new administration’s policies could be “very inflationary,” so he thinks it is important to choose investments carefully.

“Small-cap industrials make more sense than large-cap industrials,” the Astoria Portfolio Advisors CEO told CNBC’s “ETF Edge” this week.
Davi, who is also the firm’s chief investment officer, expects the red sweep will help push a pro-growth, pro-domestic policy agenda forward that will benefit small caps.
It appears Wall Street agrees so far. Since the presidential election, the Russell 2000 index, which tracks small-cap stocks, is up around 4% as of Friday’s close.
Davi, whose firm has $1.9 billion in assets under management, also likes staying domestic despite the tariff risks.
“We’re overweight the U.S. I think that’s the right playbook in the next few years until the midterms,” added Davi. “We have two years of where he [Trump] can control a lot of the narrative.”

But Davi plans to stay away from fixed income due to challenges tied to the growing budget deficit.
“Be careful if you own bonds for sure,” said Davi.
Since the election, the benchmark 10-year Treasury yield is up 3% as of Friday’s close.

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Retail sales in October were forecast to have picked up to 3.8% year-on-year growth, according to analysts polled by Reuters, after rising by 3.2% in September.
Industrial production was expected to have risen by 5.6%.
Fixed-asset investment, reported on a year-to-date basis, was anticipated to post 3.5% growth from a year ago.

Pictured here is a Shanghai development under construction on Nov. 4, 2024.
Cfoto | Future Publishing | Getty Images

BEIJING — China’s National Bureau of Statistics is scheduled Friday to release retail sales, industrial production and fixed-asset investment data for October.
Retail sales are expected to have picked up to 3.8% year-on-year growth, according to analysts polled by Reuters, after rising by 3.2% in September.

Industrial production was forecast to have risen by 5.6%, the poll showed, up from 5.4% the prior month.
Fixed-asset investment, reported on a year-to-date basis, was anticipated to post 3.5% growth from a year ago, up from the 3.4% pace in September, according to the poll.
Chinese authorities have ramped up stimulus announcements since late September, fueling a stock rally. The central bank has cut interest rates and extended existing real estate support.
On the fiscal front, the Ministry of Finance last week announced a five-year 10 trillion yuan ($1.4 trillion) program to address local government debt problems, and hinted more fiscal support could come next year.

Manufacturing surveys indicated a pickup in activity last month, while exports surged at their fastest pace in more than a year.

Imports, however, fell as domestic demand remained soft. The core consumer price index that strips out more volatile food and energy prices rose by 0.2% in October from a year ago, modestly better than the 0.1% increase seen in September.
Beyond a trade-in program to encourage car and home appliance sales, Beijing’s stimulus measures have not targeted consumers directly.
China’s Golden Week holiday in early October affirmed a trend in more cautious consumer spending, but several consultants said that sales during the Singles Day shopping festival, which recently ended, had beat low expectations.
The country’s gross domestic product in the first three quarters of the year grew by 4.8%. The country has set a target of around 5% growth for the year.
This is a developing story. Please check back later for updates. More

Federal Reserve Chair Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in Dallas.

Federal Reserve Chair Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in remarks for a speech to business leaders in Dallas. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

(Watch Powell’s remarkets live here.)
In an upbeat assessment of current conditions, the central bank leader called domestic growth “by far the best of any major economy in the world.”
Specifically, he said the labor market is holding up well despite disappointing job growth in October that he largely attributed to storm damage in the Southeast and labor strikes. Nonfarm payrolls increased by just 12,000 for the period.
Powell noted that the unemployment rate has been rising but has flattened out in recent months and remains low by historical standards.

Federal Reserve Chair Jerome Powell delivers remarks in Dallas on Nov. 14, 2024.
Ann Saphir | Reuters

On the question of inflation, he cited progress that has been “broad based,” noting that Fed officials expect it to continue to drift back toward the central bank’s 2% goal. Inflation data this week, however, showed a slight uptick in both consumer and producer prices, with 12-month rates pulling further away from the Fed mandate.

Still, Powell said the two indexes are indicating inflation by the Fed’s preferred measure at 2.3% in October, or 2.8% excluding food and energy.
“Inflation is running much closer to our 2 percent longer-run goal, but it is not there yet. We are committed to finishing the job,” said Powell, who noted that getting there could be “on a sometimes-bumpy path.”
Powell’s cautious view on rate cuts sent stocks lower and Treasury yields higher. Traders also lowered their expectations for a December rate cut.
The remarks come a week after the Federal Open Market Committee lowered the central bank’s benchmark borrowing rate by a quarter percentage point, pushing it down into a range between 4.5% and 4.75%. That followed a half-point cut in September.
Powell has called the moves a recalibration of monetary policy that no longer needs to be focused primarily on stomping out inflation and now has a balanced aim at sustaining the labor market as well. Markets still largely expect the Fed to continue with another quarter-point cut in December and then a few more in 2025.
However, Powell was noncommittal when it came to providing his own forecast. The Fed is seeking to guide its key rate down to a neutral setting that neither boosts nor inhibits growth, but is not sure what the end point will be.
“We are confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained, with inflation moving sustainably down to 2 percent,” he said. “We are moving policy over time to a more neutral setting. But the path for getting there is not preset.”
Powell added that the calculus of getting the move to neutral rate will be tricky.
“We’re navigating between … the risk that we move too quickly and the risk that we move too slowly. We want to go down the middle and get it just right so that we’re providing support for the labor market but also helping enable inflation to come down,” he said. “So going a little slower, if the data let us go a little slower, that seems like a smart thing to do.”
The Fed also has been allowing proceeds from its bond holdings to roll off its mammoth balance sheet each month. There have been no indications of when that process might end.

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U.S. Securities and Exchange Commission Chair Gary Gensler testifies before a House Financial Services Committee oversight hearing on Capitol Hill in Washington, D.C., on Sept. 27, 2023.
Jonathan Ernst | Reuters

Securities and Exchange Commission Chairman Gary Gensler spoke this morning at the Practising Law Institute’s 56th annual conference on securities regulation. 
It sounded awfully close to a farewell speech. 

“It’s a remarkable agency,” Gensler said of the SEC, which he has led since April 2021.
“It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.” 
Gensler reviews accomplishments 
Gensler offered a review of what he has accomplished.  
Most notably, Gensler highlighted the many disclosure rules the SEC has enacted, including disclosure on data breaches, executive pay versus performance and additional disclosures on those seeking to control and buy more than a 5% stake in a company. 
Gensler made only passing reference to his most controversial disclosure rule, on climate change, which has been challenged in court. 

“Congress put in place important provisions about disclosure because information about securities creates a public good,” he said. 
On market structure, Gensler noted he had put in place new rules on central clearing of Treasuries and shortening of the settlement cycle for stocks from two days to one day, and had recently passed rules that allow stocks to be quoted in increments of less than a penny. 
Defense of crypto stance 
Gensler offered a full-throated defense of his approach to crypto. 
Gensler repeated his assertion that while bitcoin is not a security, the SEC’s focus “has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities” and are therefore subject to the SEC’s purview. 
He again asserted anyone offering to sell securities needs to register, and that intermediaries such as broker-dealers, exchanges and clearinghouses also need to be registered. 
He said that the failure to properly police the crypto industry had resulted in “significant investor harm” and that “the vast majority of crypto assets have yet to prove out sustainable use cases.” 
Proud to serve 
Gensler did not say he was resigning, but the tone was clear.
“I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance,” he said at the end of his speech. More

Venture capitalists at Web Summit — one of Europe’s biggest tech events — say things have become more difficult for tech investors as they’re unable to cash out of long-term bets.
“In the VC world, it’s really all about liquidity stupid,” Edith Yeung, general partner at Race Capital, said in a CNBC-moderated panel.
Larry Aschebrook, founder and managing partner of G Squared, said the hunt for liquidity is getting harder, despite “nuts” funding rounds for AI firms like OpenAI.

Edith Yeung, general partner at Race Capital, and Larry Aschebrook, founder and managing partner of G Squared, speak during a CNBC-moderated panel at Web Summit 2024 in Lisbon, Portugal.
Rita Franca | Nurphoto | Getty Images

LISBON, Portugal — It’s a tough time for the venture capital industry right now as a dearth of blockbuster initial public offerings and M&A activity has sucked liquidity from the market, while buzzy artificial intelligence startups dominate attention.
At the Web Summit tech conference in Lisbon, two venture investors — whose portfolios include the likes of multibillion-dollar AI startups Databricks Anthropic and Groq — said things have become much more difficult as they’re unable to cash out of some of their long-term bets.

“In the U.S., when you talk about the presidential election, it’s the economy stupid. And in the VC world, it’s really all about liquidity stupid,” Edith Yeung, general partner at Race Capital, an early-stage VC firm based in Silicon Valley, said in a CNBC-moderated panel earlier this week.
Liquidity is the holy grail for VCs, startup founders and early employees as it gives them a chance to realize gains — or, if things turn south, losses — on their investments.
When a VC makes an equity investment and the value of their stake increases, it’s only a gain on paper. But when a startup IPOs or sells to another company, their equity stake gets converted into hard cash — enabling them to make new investments.
Yeung said the lack of IPOs over the last couple of years had created a “really tough” environment for venture capital.
At the same, however, there’s been a rush from investors to get into buzzy AI firms.

“What’s really crazy is in the last few years, OpenAI’s domination has really been determined by Big Techs, the Microsofts of the world,” said Yeung, referring to ChatGPT-creator OpenAI’s seismic $157 billion valuation. OpenAI is backed by Microsoft, which has made a multibillion-dollar investment in the firm.

‘The IPO market is not happening’

Larry Aschebrook, founder and managing partner at late-stage VC firm G Squared, agreed that the hunt for liquidity is getting harder — even though the likes of OpenAI are seeing blockbuster funding rounds, which he called “a bit nuts.”
“You have funds and founders and employees searching for liquidity because the IPO market is not happening. And then you have funding rounds taking place of generational types of businesses,” Aschebrook said on the panel.
As important as these deals are, Aschebrook suggested they aren’t helping investors because even more money is getting tied up in illiquid, privately owned shares. G Squared itself an early backer of Anthropic, a foundational AI model startup competing with Microsoft-backed OpenAI.
Using a cooking analogy, Aschebrook suggested that venture capitalists are being starved of lucrative share sales which would lead to them realizing returns. “If you want to cook some dinner, you better sell some stock, ” he added.

Looking for opportunities beyond OpenAI

Yeung and Aschebrook both said they’re excited about opportunities beyond artificial intelligence, such as cybersecurity, enterprise software and crypto.
At Race Capital, Yeung said she sees opportunities to make money from investments in sectors including enterprise and infrastructure — not necessarily always AI.
“The key thing for us is not thinking about what’s going to happen, not necessarily in terms of exit in two or three years, we’re really, really long term,” Yeung said.
“I think for 2025, if President [Donald] Trump can make a comeback, there’s a few other industries I think that are quite interesting. For sure, crypto is definitely making a comeback already.”
At G Squared, meanwhile, cybersecurity firm Wiz is a key portfolio investment that’s seen OpenAI-levels of growth, according to Aschebrook.
The startup, which turned down a $23 billion acquisition bid from Google, hit the $500 million annual recurring revenue (ARR) milestone just four years after it was founded.
Wiz is now looking to reach $1 billion of ARR in 2025, doubling from this year, Roy Reznik, the company’s co-founder and vice president of research and development, told CNBC last month.
“I think that there’s many logos … that aren’t in the press raising $5 billion in two weeks, that do well in our portfolios, that are the stars of tomorrow, today,” Aschebrook said. More

WHEN JIMMY Carter, the Democratic candidate for American president in 1976, wanted to criticise the record of the incumbent Gerald Ford, he reached for a number invented by the economist Arthur Okun. A rough-and-ready indicator of the state of the economy, what Okun called the economic discomfort index added together the unemployment rate with the level of inflation. Four years later Ronald Reagan, the Republican candidate, renamed the indicator to the pithier misery index and used it against Mr Carter, who had presided over rising inflation and unemployment. Reagan went on to win the election and the subsequent one, in 1984, as the index fell on his watch. More