Finance

Pop Mart’s Hong Kong-listed shares dropped more than 5%, extending their slide from the previous session when they had slumped 5.3%.
The high-flying stock is on track for its first negative week since early May — down more than 13%. Its year-to-date gains stand at over 160%.
Morgan Stanley said in a note late Wednesday it was replacing Pop Mart with insurance company PICC P&C in the firm’s China and Hong Kong focus list.
Chinese state media on Friday criticized the “blind box” phenomenon — pioneered by Pop Mart — and called for stricter regulation.

Customers browse a POP MART display filled with Labubu characters and collectible figures from The Monsters series on June 16, 2025 in Chongqing, China.
Cheng Xin | Getty Images News | Getty Images

BEIJING — Shares in Labubu-maker Pop Mart continued to tumble Friday, after Morgan Stanley removed the stock from a focus list and state media called for stronger regulation for “blind box” toys.
The Chinese toymaker first gained popularity with its “blind box” concept, in which consumers buy unmarked boxes — which can cost from about $5 to $10 each — for a chance at getting a unique figurine and building a collection.

People’s Daily, the Chinese Communist Party’s official newspaper, on Friday criticized the “blind box” phenomenon, advocating for stricter regulation. The article did not mention Pop Mart by name and focused more on children and young people who were spending heavily on unmarked packets to collect cards.
China’s customs agency this month also highlighted several times on social media how it stopped cases of Labubu copycats from crossing the border.
Pop Mart’s Hong Kong-listed shares were last down more than 5%, extending their slide from the previous session when they had slumped 5.3%. That’s put the high-flying stock on track for its first negative week since early May — with losses of more than 13% so far. Its year-to-date gains stand at over 160%.
Morgan Stanley said in a note late Wednesday it was replacing Pop Mart with insurance company PICC P&C in the firm’s China and Hong Kong focus list.

The investment bank did not elaborate on why it removed Pop Mart shares. The firm on June 10 had raised its price target on the toy company to 302 Hong Kong dollars ($38.47), up from 224 HKD, on expectations that Pop Mart still had room to grow in the long term.

“We think the market has fully factored in Pop Mart’s exponential growth in 2025 but may not have strong conviction on the long-term outlook,” equity analyst Dustin Wei and a team said in the June 10 report.
“That said, in view of its lofty valuation, we do not expect this level of outperformance to continue in the next few quarters,” the report said.
Pop Mart shares hit a record intra-day high of 283.40 HKD on June 12.
The Beijing-based toy company has rapidly expanded overseas with online sales platforms and physical stores, including in the U.S. and U.K.

The Labubu craze

In the last few months, the company’s “Labubu” series of toys featuring an elf-like character have become a global phenomenon, even drawing the attention of fashion and culture-focused New York Magazine and The New York Times.
Pop Mart has also released Labubu stuffed toys, pillows and related merchandise to capture demand. A 4-foot-tall Labubu sold for the equivalent of $170,000 at an auction in Beijing earlier this month. Many of the more affordable versions of the figurine subsequently went out of stock in mainland China.
“We’ve seen certain trends like that before … There seems to always be some cute thing that people have to have,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC on Friday. The company helps foreign brands — such as Vitamix and iS Clinical — sell online in China and other parts of Asia.
He pointed to interest last year in capybara stuffed toys. Chinese retailer Miniso, which also has stores in the U.S. and other countries, was one of the main sellers of the stuffed animal.

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Cooke saw Pop Mart as “more lucky than anything,” although he pointed out it reflects growing interest in toys not just for children but also adults.
Indicating the soaring popularity of its toys, Pop Mart’s overseas sales in 2024 have already surpassed the company’s overall sales in 2021.
The company reported total sales, primarily domestic, of 4.49 billion yuan ($624.6 million) in 2021. In 2024, overseas sales alone surpassed that to hit 5.1 billion yuan, up 373% from a year ago, while mainland China sales climbed to 7.97 billion yuan. More

A little more than a century ago, in July 1918, the wives of fishermen in Toyama began to protest against the export of rice from their prefecture. The unrest, which was triggered by the staple grain’s surging price, then spread across Japan. Ultimately, the so-called rice riots were violently extinguished by 100,000 troops; an action that would in time bring down the government. More

Japan, a heavily indebted country, is not known for its fiscal hawks. Yet for a few weeks in May austere types were ascendant. As long-dated bond yields surged worldwide, the Japanese market wobbled and their warnings seemed prescient. After a dodgy auction revealed weak investor demand, 40-year yields reached 3.7%, a record, having started the year at 2.6%. Was a buyer’s strike afoot? Ishiba Shigeru, the prime minister, certainly seemed worried: “Our country’s fiscal situation is undoubtedly extremely poor, worse than Greece,” he told parliament on May 19th. More

Japan, a heavily indebted country, is not known for its fiscal hawks. Yet for a few weeks in May austere types were ascendant. As long-dated bond yields surged worldwide, the Japanese market wobbled and their warnings seemed prescient. After a dodgy auction revealed weak investor demand, 40-year yields reached 3.7%, a record, having started the year at 2.6%. Was a buyer’s strike afoot? Ishiba Shigeru, the prime minister, certainly seemed worried: “Our country’s fiscal situation is undoubtedly extremely poor, worse than Greece,” he told parliament on May 19th. More

A Chinese entrepreneur raked in $7.65 million after streaming using an interactive digital avatar.
That was more than what he earned from his previous livestream, which he hosted personally.
“This is a DeepSeek moment for China’s entire livestreaming and digital human industry,” an analyst said.

Chinese influencer Luo Yonghao and co-host Xiao Mu tried out livestreaming on Sunday, June 15, 2025, using interactive digital avatars based on Baidu’s generative artificial intelligence model.
Screenshot

BEIJING — Avatars generated by artificial intelligence are now able to sell more than real people can, according to a collaboration between Chinese tech company Baidu and a popular livestreamer.
Luo Yonghao, one of China’s earliest and most popular livestreamers, and his co-host Xiao Mu both used digital versions of themselves to interact with viewers in real time for well over six hours on Sunday on Baidu’s e-commerce livestreaming platform “Youxuan”, the Chinese tech company said. The session raked in 55 million yuan ($7.65 million).

In comparison, Luo’s first livestream attempt on Youxuan last month, which lasted just over four hours, saw fewer orders for consumer electronics, food and other key products, Baidu said.
Luo said that it was his first time using virtual human technology to sell products through livestreaming.
“The digital human effect has scared me … I’m a bit dazed,” he told his 1.7 million followers on social media platform Weibo, according to a CNBC translation.
Luo started livestreaming in April 2020 on ByteDance’s short video app Douyin, in an attempt to pay off debts racked up by his struggling smartphone company Smartisan. His “Be Friends” Douyin livestream account has nearly 24.7 million followers.
Luo’s and his co-host’s avatars were built using Baidu’s generative AI model, which learned from five years’ worth of videos to mimic their jokes and style, Wu Jialu, head of research at Luo’s other company, Be Friends Holding, told CNBC on Wednesday.

“This is a DeepSeek moment for China’s entire livestreaming and digital human industry,” Wu said in Mandarin, translated by CNBC. DeepSeek, China’s version of OpenAI, rattled global investors in January with its claims of rivaling ChatGPT at far lower costs and using an open-source approach.
AI avatars can sharply reduce costs since companies don’t need to hire a large production team or a studio to livestream. The digital avatars can also stream nonstop without needing breaks.
“We have always been skeptical about digital people livestreaming,” Wu said, noting the company had tried out various kinds of digital humans over the years.
But he said that Baidu now offers the best digital human product currently available, compared to the early days of livestreaming e-commerce five or six years ago.

A growing industry

Livestream shopping took off in China after the pandemic forced businesses to find alternative sales channels. More people are turning to livestreaming to earn money from commissions and virtual gifts amid slower economic growth.
Livestreaming generated so many sales on Douyin last year that the app surpassed traditional e-commerce company JD.com to become China’s second-largest e-commerce platform — and ate into the market share of lead player Alibaba, according to a report from Worldpanel and Bain & Company last week. Both JD.com and Alibaba’s Taobao also offer livestreaming sales portals.
Meanwhile, other Chinese companies, including tech giant Tencent, have developed tools to create digital people that can be used as news anchors. In late 2023, several businesses started trying out virtual human livestreamers during the Singles Day shopping holiday.
But analysts have cautioned that products sold via livestreams tend to have a high return rate as they are often impulse purchases.
The biggest challenge for using virtual humans to livestream is no longer the technology, but compliance and platform requirements, Wu said. Digital humans need to be trained to adhere to regulations about product advertising, while major livestreaming platforms may have different rules about allowing virtual people to host the sessions, he said.

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For example, Douyin has rolled out restrictions on using the technology, especially if the virtual people do not interact with viewers.
While Luo’s next virtual human appearance hasn’t been set yet, Wu said he expects it will be very soon. And in the future, he said, digital humans could easily livestream in multiple languages to reach users outside China. More

The Federal Reserve kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December.
However, the central bank expects inflation to remain elevated and sees lower economic growth ahead.
Still, the Federal Open Market Committee expects to make two rate reductions later this year, according to the closely watched “dot plot.”

WASHINGTON – The Federal Reserve on Wednesday kept interest rates steady amid expectations of higher inflation and lower economic growth ahead, and still pointed to two reductions later this year.
With markets expecting no chance of a central bank move this week, the Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December.

Along with the rate decision, the committee indicated, through its closely watched “dot plot,” that two cuts by the end of 2025 are still on the table. However, it lopped off one reduction for both 2026 and 2027, putting the expected future rate cuts at four, or a full percentage point.
The plot indicated continued uncertainty from Fed officials about the future of rates. Each dot represents one official’s expectations for rates. There was a wide dispersion on the matrix, with an outlook pointing to a fed funds rate around 3.4% in 2027.
Seven of the 19 participants indicated they wanted no cuts this year, up from four in March. However, the committee approved the policy statement unanimously.
Economic projections from meeting participants pointed to further stagflationary pressures, with participants seeing the gross domestic product advancing at a 1.4% pace in 2025 and inflation hitting 3%.

GDP forecast comes down

The revised forecasts from the last update in March represented a decrease of 0.3 percentage point for GDP and an increase of the same amount for the personal consumption expenditures price index. Core PCE, which eliminates food and energy prices, was projected at 3.1%, also 0.3 percentage point higher. The unemployment outlook saw a small revision, up to 4.5%, or 0.1 percentage point higher than March and 0.3 percentage point above the current level.

The FOMC statement changed little from the May meeting. Broadly speaking, the economy grew at a “solid pace,” with “low” unemployment and “somewhat elevated” inflation, the committee said.
Moreover, the committee indicated less concern about the gyrations of the economy and the clouds over White House trade policy.
“Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate,” the committee said.
During a news conference, Federal Reserve Chairman Jerome Powell suggested there is time to wait for more clarity.
“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies,” Powell said.
U.S. stocks were wavering near flatline in the wake of the announcement.

Trump pushes for rate cuts

While the Fed’s statement did not elaborate on why uncertainty has ebbed, President Donald Trump has eased some of his fiery trade rhetoric and the White House is in the midst of a 90-day negotiating period over tariffs.
Trump’s rhetoric toward the Fed, however, has not softened.
Earlier Wednesday, the president again slammed Powell and his colleagues for not easing. Trump said the fed funds rate should be at least 2 percentage points lower and derided Powell as “stupid” for not pushing the committee to cut.
Fed officials have been reluctant to move, fearful that tariffs Trump implemented this year could cause inflation in the coming months. Price gauges so far have not indicated that the duties are having much of an impact. A delay in feed-through of the tariffs along with softening consumer demand and a buildup of inventories ahead of the April 2 “liberation day” announcement have helped deflect their impact.
“Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs because someone has to pay for the tariffs,” Powell said.
The conflict between Israel and Iran adds another wild card to the policy mix, with prospects of higher energy prices a potential additional factor in keeping the Fed from cutting. The statement did not mention influence from the Middle East fighting.
A gradually softening economy could provide incentive to cut later this year.
Recent labor market data shows layoffs creeping higher, long-term unemployment also rising and consumers spending less. Retail sales tumbled nearly 1% in May and recent data has reflected a cooling housing market, with starts hitting their lowest level in five years.
“Effectively they are sitting on their hands, waiting to see if tariffs increase inflation or the jobs market starts to falter, and whichever part of their dual mandate is impacted first will likely guide whichever direction they take, although the bias is still toward cutting rates (or at least keeping rates unchanged; not raising rates),” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
Zaccarelli wasn’t surprised that rates held steady. However, he said the market was surprised by the comment that uncertainty had “diminished.”
For Trump, though, the importance of lower rates stems from the high cost the government is paying to finance its $36 trillion debt.
Interest on the debt is on track to total $1.2 trillion this year and exceeds all other budget items except Social Security and Medicare. The Fed last cut in December, and Treasury yields have held higher throughout the year, putting additional pressure on a budget deficit likely to approach $2 trillion, or more than 6% of GDP.
Correction: The meeting participants expect gross domestic product to advance at a 1.4% pace in 2025. An earlier version of the story misstated the year.

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U.S. Federal Reserve Chair Jerome Powell speaks during a conference marking the 75th anniversary of the International Finance Division of the Federal Reserve Board in Washington, D.C., on June 2, 2025.
Andrew Caballero-Reynolds | AFP | Getty Images

The Federal Reserve sees inflation rising again to top 3% this year amid the uncertainty around President Donald Trump’s trade policies and intensifying geopolitical risk.
Federal Open Market Committee participants said at their June meeting that they expect the core personal consumption expenditures price index, which excludes food and energy, to increase at a 3.1% rate in 2025, higher than their prior forecast of 2.8% in March.

The PCE price index was at 2.1% in April, matching its lowest level since February 2021. Excluding food and energy, core PCE stood at 2.5%. The latter is a gauge Fed officials believe to be a better measure of longer-term trends.
Central bank officials also see further slowing in economic growth, projecting the gross domestic project expanding just 1.4% this year. In March, they expected a 1.7% pace in GDP growth.
Fed Chair Jerome Powell said in the post-meeting news conference that the recent uptick in inflation expectations could be tied to tariffs.
“Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs because someone has to pay for the tariffs,” Powell said. “It will be someone in that chain that I mentioned, between the manufacturer, the exporter, the importer, the retailer, ultimately somebody putting it into a good of some kind or just the consumer buying it.”
“All through that chain, people will be trying not to be the ones who can take up the cost but ultimately, the cost of the tariff has to be paid. And some of it will fall on the end consumer,” he said.

Fed officials have been reluctant to lower rates, worrying that Trump’s tariffs could cause inflation to reaccelerate in the coming months. The conflict between Israel and Iran adds another wild card to the policy mix, as high oil prices could prevent the Fed from easing policy. 
Still, the so-called dot plot — which indicates individual members’ expectations for rates — showed officials see their benchmark lending rate falling to 3.9% by the end of 2025. That’s equivalent to a target range of 3.75% to 4%, pointing to two reductions later this year.
Seven of the 19 participants indicated they wanted no cuts this year, up from four in March. Participants also see fewer cuts in 2026 and 2027.
Here are the Fed’s latest targets from 19 FOMC members, both voters and nonvoters:

Arrows pointing outwards More

This is a comparison of Wednesday’s Federal Open Market Committee statement with the one issued after the Fed’s previous policymaking meeting in May.
Text removed from the May statement is in red with a horizontal line through the middle.

Text appearing for the first time in the new statement is in red and underlined.
Black text appears in both statements.

Arrows pointing outwards More