Finance

Consumer prices across the rich world are rising by more than 9% year on year, the highest rate since the 1980s. Worryingly, there is growing evidence that the public is starting to expect consistently high inflation. Figures suggesting that Americans’ medium-term expectations of inflation had risen helped set off the market turmoil of last week, which culminated in the Federal Reserve raising interest rates by three-quarters of a percentage point. Central banks urgently need to convince people that they are serious about getting inflation down. But a range of evidence suggests that changing the public’s mind could be extraordinarily difficult. The difference in views of expert and lay groups has become gaping. Bernardo Candia, Olivier Coibion and Yuriy Gorodnichenko, three economists, look at the inflation expectations of four groups in America (see chart). Those of professional forecasters and financial markets remain close to the Fed’s target of 2%. But consumers’ beliefs increasingly do not. They expect prices to rise by over 5% over the next year. Firms, exposed to surging commodity, wage and other input costs, expect even higher inflation. Expectations are rising outside of America, too. A dataset put together by the Cleveland Fed, Morning Consult, a consultancy, and Raphael Schoenle of Brandeis University gauges public inflation expectations in various places. In May 2021 a respondent in the median rich country thought inflation over the next year would be 2.3%. Now they expect a rate of 4.2%. Central banks face a problem in getting these expectations down again. This is because few people, aside from investors and financial journalists, pay much notice to what they say. A new paper by Alan Blinder of Princeton University and colleagues puts it more drily. “Households and firms have a low desire to be informed about monetary policy.” A survey in 2014 found that only a quarter of Americans could pick out Janet Yellen as the then-chairwoman of the Fed, from a list of four. Four in ten Americans believe that the Fed’s inflation target exceeds 10%. Small wonder that the impact of its policy announcements on inflation expectations is “muted”, according to a recent study by Fiorella De Fiore of the Bank for International Settlements, and colleagues. Nor are Americans alone. In the late 2000s researchers at the Bank of Italy assessed whether people knew what inflation was. Many had only a fuzzy understanding—with half of respondents confusing price changes with price levels. In recent years Japan has implemented forceful monetary easing in order to boost inflation. But in 2021 more than 40% of Japanese people had “never heard” of the plan, according to an official survey. In the years before the pandemic, public apathy to monetary policy did not much matter. Inflation was low and stable. Now it matters a lot. Spiralling expectations could become embedded in wages and prices, pushing headline inflation higher still. Central bankers’ conventional toolkits may do little to bring them down. Even the effect of raising interest rates is not totally clear: twice as many Americans believe that higher rates raise inflation than reduce it, according to a recent The Economist/YouGov poll. What more can be done? History points to several options. One is to make drastic or unexpected announcements. This could involve raising interest rates outside of scheduled meetings—a decision taken by India’s central bank in May. The European Central Bank (ecb) has used this trick in pursuit of another goal: keeping down government-bond spreads, which would otherwise threaten a debt crisis. In 2012 Mario Draghi, then the head of the bank, made an impromptu promise to do “whatever it takes” to save the euro. According to research by Michael Ehrmann of the ecb and Alena Wabitsch of Oxford University, the words generated high traffic on Twitter among non-experts, suggesting they had cut through. The genius of the statement, other research suggests, was that it focused on the end (“preserve the euro”) rather than the means (“buying bonds”), which is easier for the public to understand. The ecb has tried to repeat the trick more recently, such as by calling an emergency meeting to address widening spreads. Others have played the long game. Paul Volcker, the Fed’s chairman from 1979 to 1987, cultivated a reputation as what economists call an inflation “nutter”: someone willing to tolerate high unemployment to defeat the beast. The public eventually got the message. A recent paper by Jonathon Hazell of the London School of Economics and others argues that post-Volcker “shifts in beliefs about the long-run monetary regime” proved more important than any other factor in conquering inflation before covid-19. Andrew Bailey, the head of the Bank of England, has been trying to embrace his inner Volcker, such as by giving Britons the impression that he cares more about inflation than he does their wages. Public enemy number oneAnother solution is for politicians to get involved. This has potential drawbacks. Politicians often advocate crackpot anti-inflation schemes such as price controls. Still, they might be able to help. After all, 37% of Americans believe that the president has “a lot” of control over inflation, compared with 34% for the Fed. Jimmy Carter’s appointment of Volcker in 1979 showed that he was serious about getting inflation down. In Britain, Margaret Thatcher and her henchmen talked tough on price stability; their willingness to slash government budgets probably backed up those words, by cooling the economy. Today in America, President Joe Biden says that “fighting inflation” is his “top economic priority” (though he shows less inclination to tighten fiscal policy). Public apathy towards central banking may be a backhanded compliment to the policymakers of the 1980s and 1990s. No one needed to care about inflation when it was low. Today’s policymakers are constrained by that very success. To get inflation expectations back down, then, they may need to try everything in their power to get people to sit up and listen. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Pandemic-era stimulus checks helped many Americans pay bills, reduce debt and build savings. For some, the payments altered how they think about money.
“The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money,” said Denise Diaz, a recipient who lives outside Orlando, Florida.

Ciydemimages | E+ | Getty Images

For Denise Diaz, the benefits of pandemic-era stimulus checks went beyond everyday dollars and cents. They rewired how she thinks about money.
Diaz, a mother of three who lives outside Orlando, Florida, received more than $10,000 from three rounds of “economic impact payments.”

They were among the 472 million payments issued by the federal government, totaling about $803 billion. The effort amounted to an unprecedented experiment to prop up households as Covid-19 cratered the U.S. economy.
The checks (and other federal funds) are at the epicenter of a debate as to whether and to what extent the financial assistance helped fuel inflation, which is running at its hottest in about 40 years.

But they undoubtedly offered a lifeline to millions of people during the worst unemployment spell since the Great Depression. Recipients reached by CNBC used the money in various ways — to cover household staples, make debt payments and create rainy-day funds, for example.
Diaz, who co-directs a local nonprofit, Central Florida Jobs With Justice, used the funds to pay off a credit card and a car loan. Her credit score improved. She built an emergency fund — previously nonexistent — which the household was able to lean on when Diaz’s partner lost his job earlier this year.
Consequently, Diaz, 41, feels more financially stable than during any other period of her adulthood.

The financial buffer and associated peace of mind also changed her psychology. She automated bill payments (for utilities, a second family car and credit cards, for example) for the first time.

“We weren’t doing that [before],” Diaz said. “Because you never knew what could happen [financially], so I never trusted it.”
These days, Diaz thinks more about budgeting. Homeownership seems within reach after years of renting.  
“The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money,” she said.

‘Tough to make a dent’

The stimulus checks were the result of legislation — the CARES Act, Consolidated Appropriations Act and American Rescue Plan Act — Congress passed in 2020 and 2021 to manage the fallout from Covid-19.
Households received payments of up to $1,200, $600 and $1,400 a person, respectively. Qualifications such as income limits and payment amounts for dependents changed over those three funding tranches.
Census Bureau survey data shows most households used the funds for food and household products, and to make utility, rent, vehicle, mortgage and other debt payments. To a lesser extent, households used them for clothing, savings and investments and recreational goods.

Salaam Bhatti and Hina Latif, a married couple living in Richmond, Virginia, used a chunk of their funds to reduce credit card debt, which has proven difficult in recent years, especially after having kids. (They have a 3-year-old and a 3-month-old.)
Bhatti and Latif paid off several thousand dollars of the debt during the pandemic and have about $30,000 left, they said.
“It’s been tough to make a dent,” Bhatti, 36, said. “Sometimes it just feels like you’re not making any progress.”
More from Personal Finance:Credit card balances rise after stimulus checks helped cut debtBeware of scams involving jobs, stimulus checks, tax refundsHow effective were those stimulus checks?
The couple had a gross income of about $75,000 during the pandemic. Bhatti was the public benefits attorney at the Virginia Poverty Law Center (he’s now the deputy director), and Latif teaches online at the College of DuPage in Illinois.
Prior to getting the stimulus payments, the duo used a “debt shuffle” approach to stay afloat, Bhatti said. That included taking advantage of multiple balance-transfer offers that carried periods of zero interest, he said.
They also used stimulus funds to help cover higher household costs for groceries and other items like diapers.

The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money.

Denise Diaz
stimulus check recipient in Florida

Bhatti and Latif, like Diaz, also received monthly payments of the enhanced child tax credit — up to $250 or $300 per child, depending on age — that lasted for six months starting in July 2021.
“Costs increased with our new baby so it often feels like we’re scooping water out of a boat with a hole in it,” Bhatti said. “We are not living extravagantly by any means, but because the bulk of our income [is] going to the debt, we are pretty much living paycheck to paycheck.”

‘Every dollar really matters’

Nestor Moto Jr., 27, largely used his stimulus payments to chip away at student loans. The Long Beach, California, resident received about $4,000 from federal and state-issued payments.
He used about half for loans and 10% for savings. The remainder helped Moto, an office manager for an accounting firm, pay bills (phone and car insurance, for example) when his employer reduced his full-time schedule to about 10 hours a week earlier in the pandemic.

“They really helped me catch up on my student loans,” said Moto, who graduated from California State University Long Beach with a bachelor’s degree in political science. He still owes about $10,000 of an $18,000 initial balance.
Moto wanted to reduce his debt even though the federal government paused payments and interest for the last two-plus years. He’s not expecting the Biden administration to wipe out his outstanding debt.

Sometimes it just feels like you’re not making any progress.

Salaam Bhatti
stimulus check recipient in Virginia

“I saved money,” Moto added. “[The stimulus] really helped put into perspective how much money I make a month and week and how much I spend.
“It showed me how much every dollar really matters.”
While grateful for the financial assistance, Bhatti feels a slight letdown after getting a brush with financial freedom. The U.S. economy has rebounded significantly since early 2021, when lawmakers passed the last broad pandemic aid package for individuals; another doesn’t appear likely despite ongoing financial pressures for some households.
“It feels like such a tease,” Bhatti said of the stimulus payments. “It felt like dangling a carrot in front of you, the government saying, ‘We know we can help you.’ And then eventually choosing not to.”

WATCH LIVEWATCH IN THE APP More

Brex, the Silicon Valley lender to start-ups, is dropping tens of thousands of small business customers to focus on bigger venture-backed clients, according to co-founder Henrique Dubugras.
The company began informing customers this week that they have until Aug. 15 to withdraw funds from online accounts and find new providers, Dubugras told CNBC on Friday in a Zoom interview.
“It’s terrible. It’s the worst outcome for us, too,” he said. “We invested so much money in acquiring these customers, serving them, building the brand, all these things.”

Brex Co-Founder & CEO Henrique Dubugras speaks onstage during TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center on October 02, 2019 in San Francisco, California.
Steve Jennings | Getty Images

Brex, the Silicon Valley lender to start-ups, is dropping tens of thousands of small business customers to focus on bigger venture-backed clients, according to co-founder Henrique Dubugras.
The company began informing customers this week that they have until Aug. 15 to withdraw funds from online accounts and find new providers, Dubugras told CNBC on Friday in a Zoom interview. Axios reported the change Thursday.

The move is the latest sign of a sea change occurring among start-ups as an abrupt shift in market conditions is forcing a new discipline on companies that previously focused purely on growth. The shift began late last year, when the shares of high-flying publicly traded fintech players such as PayPal began to collapse.

Dubugras said that he and his co-founder Pedro Franceschi made the decision in December as their start-up customers became increasingly demanding. Plunging valuations for public companies soon bled over into the private realm, hammering valuations for pre-IPO companies and forcing firms to focus on profitability.
That meant that some of Brex’s biggest customers began to request solutions to help them control expenses and hire cheaper international workers, Dubugras said.
At the same time, the traditional brick-and-mortar small businesses, including retailers and restaurants, that Brex began adding in a 2019 expansion flooded support lines, resulting in worse service for the start-ups they valued more, he said.
“We got to a situation where we realized that if we didn’t choose one, we would do a poor job for both” groups of clients, he said. “So we decided to focus on our core customer that are the start-ups that are growing.”

The initial news of the announcement caused mass confusion among Brex customers, spurring Franceschi to tweet about the move, Dubugras said.
Brex is holding onto clients that have secured institutional backing of any kind, including from accelerator programs, angel investors or Web 3.0 tokens, he said. They are also keeping traditional companies that Brex deems midmarket in size, which have “more financial history so we can underwrite them for our credit card,” Dubugras said.
The shift is the latest learning moment for the two young co-founders, Stanford University dropouts who took Silicon Valley by storm when they created Brex in 2017. The company was one of the fastest to reach unicorn status and was last valued at $12.3 billion.
The pair mistakenly thought that expanding services to more traditional small businesses would be a simple move. Instead, the needs of the two cohorts were different, requiring a different set of products, he said.
“We built Brex with 20 people, so we thought, why can’t we just build a different Brex with another 20 people?” Dubugras said. “I learned that focus is extremely important; that’s definitely a lesson I’m going to take with me forever.”
While business leaders have been warning of an impending recession in recent weeks, the decision wasn’t based on concern that small businesses would default on corporate cards, the co-founder said. That’s because most small businesses had to repay their cards on a daily basis, leaving little risk Brex wouldn’t get repaid, he said.
“It’s terrible. It’s the worst outcome for us, too,” Dubugras said. “We invested so much money in acquiring these customers, serving them, building the brand, all these things.”

Brex ranked No. 2 on this year’s CNBC Disruptor 50 list. Sign up for our weekly, original newsletter that goes beyond the annual Disruptor 50 list, offering a closer look at list-making companies and their innovative founders. More

The Kroger supermarket chain’s headquarters is shown in Cincinnati, Ohio.
Lisa Baertlein | Reuters

Check out the companies making headlines in midday trading Friday.
Seagen — Shares of the biotech company surged 12.7% following a Wall Street Journal report that pharmaceutical company Merck is considering buying Seagen. The report, citing people familiar with the matter, said the two companies have been in discussions for a while about a potential deal.

Azek — The building products company rose 6.2% after Bank of America upgraded the stock to buy from neutral, saying Azek is “well positioned” as more products convert to “more resilient” materials from wood.
Utz — Shares of the snack food company jumped 6.5% after Goldman Sachs upgraded Utz to buy from neutral. The investment firm said in a note to clients that Utz was gaining market share in a product category that should be relatively sheltered from inflation concerns.
Moderna — Shares of the pharmaceutical company jumped 5.7% after the Food and Drug Administration authorized Moderna’s and Pfizer’s Covid-19 shots for children as young as 6 months old. The move makes nearly every person in the U.S. eligible for vaccination.
JD.com — The e-commerce company’s stock rose 5.2% after CEO Xin Lijun divulged a possible expansion into food delivery in a Bloomberg interview.
Adobe — Adobe shares dipped 1.2% after the software company issued worse-than-expected current quarter and full-year guidance, citing ongoing challenges from the Ukraine-Russia war.

Meritage Homes — Meritage Homes fell 1.5% after Wells Fargo downgraded the home construction company to underweight from equal weight. Analysts at the firm said they’re worried that homebuilders such as Meritage Homes will get dinged as housing data is “likely to incrementally get worse from here.”
Kroger — Shares dropped 7.3% after the grocery store chain said in its most recent quarterly report that rising inflation is spurring consumers to choose cheaper store brands.
Diamondback Energy, Devon Energy, Marathon Oil — Energy stocks dropped across the board as oil prices fell on fears of a recession. Diamondback dropped 8.5%, Devon Energy fell 8.3%, and Marathon Oil slid 5.9%.
— CNBC’s Michael Bloom, Yun Li and Jesse Pound contributed reporting.

WATCH LIVEWATCH IN THE APP More

It may seem daunting to find a good and trustworthy financial advisor or broker.
There are steps consumers seeking investment advice can take to protect themselves.

Thomas Barwick

Finding a broker or financial advisor you can trust may, at times, seem a daunting task.
That’s especially true when investors see sensational stories of brokers fleeing the police in an underwater getaway or faking their death in an airplane crash. Then there are the high-profile fraudsters such as Bernie Madoff, who masterminded the nation’s biggest investment fraud in history — a Ponzi scheme that cost tens of thousands of investors up to $65 billion.

And there are, of course, less sensational but still notable events. The Securities and Exchange Commission charged a brokerage — Western International Securities Inc. — and five of its brokers on Thursday with violating a new rule that aims to raise investment-advice protections for consumers.  
More from Personal Finance:36% of high earners are living paycheck to paycheckHere are three ways to navigate college tuition bills43% of homeowners delay home improvements due to inflation
The brokers allegedly sold more than $13 million of high-risk, unrated bonds to retirees and others, despite the bonds being inappropriate for these investors due to their illiquidity and speculation, according to the SEC release. The brokerage didn’t respond to a request for comment.
It’s the first time the SEC has filed a lawsuit in connection with Regulation Best Interest, which the federal agency issued in 2019 and firms had to comply with by June 2020. Overall, the rule generally requires brokers and firms to put a client’s interests ahead of their financial or other interests when making an investment recommendation. They must share some of the logic behind a recommendation and disclose conflicts of interest.
There were 690,000 registered brokers and financial advisors in 2021, according to the Financial Industry Regulatory Authority, or FINRA. Here are some tips for consumers to find one they can trust.

Heed red flags in regulator databases, online searches

Oliver Rossi

There are some surefire warning signs that an advisor you’re considering may not be a good pick. 
Financial regulators have online databases consumers can reference for background information on specific individuals and firms. The SEC has one, the Investment Adviser Public Disclosure website, for financial advisors. FINRA’s resource, BrokerCheck, lists brokers. (A person or firm may appear in both.)
First, check to see that the person appears in either system and that they are licensed or registered with a firm.

This means they have met a minimum level of credentials and background to work in the industry, according to Andrew Stoltmann, a Chicago-based attorney who represents consumers in fraud cases.
“If they’re not, that’s the uber-red flag,” Stoltmann previously told CNBC. “If not, it could be some guy cold-calling from his mom’s basement.”
Prospective clients should also Google the advisor or broker’s name to see if any news articles about past indiscretions or lawsuits appear. If so, it’s another bad sign. The regulatory databases will also list any disclosures, complaints, arbitrations or settlements involving the individual.
Experts recommend checking for nefarious financial behavior such as sales abuse practices, unsuitable recommendations, and excessive or unauthorized trading.

Review account statements for other warning signs

Asia-pacific Images Studio | E+ | Getty Images

However, just because these warning signs aren’t initially found doesn’t mean consumers should let their guard down. There are other signals to watch for after deciding to trust an advisor with your money.
One of the lessons from Madoff’s multibillion-dollar fraud was ensuring your money is being held at a reputable, third-party custodial firm such as Fidelity or Charles Schwab, Stoltmann said.
That makes it much harder for an advisor to steal money or take advantage of a client, since the assets aren’t held in-house and clients aren’t making checks out to the advisory firm, he said.
Think of this as a firewall like two-factor authentication — the custodial firm has certain procedures for withdrawing money, which often involve contact with the client, Stoltmann said.

Customers can check their regular account statements for this information.
Further, losing money isn’t necessarily a red flag, especially if it occurs in a down market.
But it might be a bad sign if an investor’s portfolio is tracking well below customary stock and bond benchmarks, according to George Friedman, an adjunct law professor at Fordham University and a former FINRA official.
“At some point you start asking questions,” he told CNBC.

Hyper trading activity, as outlined in an investor statement, is another telltale sign. Such account churning generates fees and commissions for advisors but financially harms the client.
Proprietary investments — for example, owning a mutual fund run by your brokerage firm — aren’t necessarily a fraud signal, but may be a sign that an advisor or firm is making money at your expense, Friedman said.
“I’d review account statements every month,” he said. “If you see something funny or unusual, that’s a flag.”
Of course, investor statements could be doctored to hide such information.

Ask questions about investment recommendations

Hispanolistic | E+ | Getty Images

Unsatisfactory or delayed responses to client questions should prompt clients to escalate their case to the firm’s compliance department.
Being asked to communicate outside of an advisory firm’s official channels, such as company email, is also a major red flag.
And, importantly, understand your investments; only place your money with reputable asset and fund managers, experts said. If you can’t understand it, it’s a bad sign, as is an investment that seems too good to be true.
Micah Hauptman, director of investor protection at the Consumer Federation of America, suggests asking a broker or advisor to verify in writing what they’re recommending and why they didn’t recommend a simpler, less costly option.
“If they can’t give a simple, specific, clear, concise answer to ‘Why this as opposed to anything else on market, based on product cost and quality,’ then that could raise some red flags,” Hauptman said.

Look for a fiduciary, fee-only advisor

MoMo Productions

Brokers generally remain a lower-cost option relative to advisors for consumers who trade stocks and mutual funds infrequently and hold them for a long time.
Consumers who want ongoing, holistic advice and to reduce exposure to conflicts of interest as much as possible should seek out a fee-only financial advisor, according to consumer advocates.
They can search for such advisors in networks such as the National Association of Personal Financial Advisors, Garrett Planning Network, XY Planning Network and Alliance of Comprehensive Planners.
Such advisors must have a baseline competency such as the certified financial planner, or CFP, designation for financial planners and only receive flat fees for their hourly service, monthly subscriptions or fees based on the assets they manage for clients, Ron Rhoades, a CFP himself and director of the personal financial planning program at Western Kentucky University, told CNBC.
“This is the easiest way for a consumer to find somebody who is definitely on their side,” Rhoades said.
Consumers should interview at least three different advisors after conducting a search to ensure the right fit, he said.

WATCH LIVEWATCH IN THE APP More

Thirty-six percent of U.S. employees with salaries of $100,000 or more are living paycheck to paycheck, double the share in 2019, according to Willis Towers Watson.
The highest earners are the only income group that reported an increase over that time.

South_agency | E+ | Getty Images

More than a third of high-earning American workers feel strapped for cash — a share that has risen dramatically in recent years.
Thirty-six percent of U.S. employees with salaries of $100,000 or more are living paycheck to paycheck — twice as many who said they were in 2019, according to a survey conducted by Willis Towers Watson, a consulting firm.

That’s more than the 34% of workers who earn $50,000 to $100,000 a year who are living paycheck to paycheck, though lower than the 52% of paycheck-to-paycheck workers with incomes of less than $50,000, according to the survey.
However, the high earners are the only group that saw an increase in their paycheck-to-paycheck ranks in the last three years.
More from Personal Finance:How young adults can start building creditInflation forces tough spending choices on some older AmericansCost to finance a new car hits a record $656 per month
“Employees at higher pay levels aren’t immune to living paycheck to paycheck,” said Mark Smrecek, the financial wellbeing market leader for North America at Willis Towers Watson.
Willis Towers Watson polled 9,658 full-time employees from large and midsize private employers in December and January 2022, before the most recent inflation readings.

The findings are similar to a recent LendingClub survey that found 36% of people earning at least $250,000 a year live paycheck to paycheck.

Inflation may push more to live paycheck to paycheck

Quickly rising costs for food, transportation and other areas of household budgets may put further stress on families’ ability to save money, Smrecek said.
The Consumer Price Index was up 8.6% in May from a year earlier, the highest inflation reading in about 40 years. The Federal Reserve raised its benchmark interest rate by 0.75 percentage points on Wednesday — the largest increase since 1994 — as part of an ongoing effort to rein in consumer costs.
“These numbers are likely to increase if we see these inflation results continue,” Smrecek said of people living paycheck to paycheck.

Housing expenses, debt present budget challenges

The drivers of financial stress differ depending on income. The highest earners cited housing expenses as the most acute challenge, whereas low earners were more likely to report difficulties with debt, for example, Smrecek said.
While the survey doesn’t break down specific housing expenses, employers have anecdotally pointed to increased costs for rents and mortgages as workers relocated residences during the pandemic, Smrecek added. Higher-income employees are more likely than lower earners to have jobs that allow them to work remotely.
Some financial planners recommend Americans who are strapped for cash try adopting a 50-20-30 rule to bring their spending into line. This involves allocating 50% of after-tax income to essential expenses, 30% to discretionary expenses, and the remaining 20% to savings, investment and debt reduction.

WATCH LIVEWATCH IN THE APP More

“Today our cooperation between Russia and China are rising,” Chinese President Xi Jinping said, according to an official English translation carried by Russian state broadcaster RT.
“Trade over the first half of this year has been [in the tens of billions of U.S. dollars] and we can expect new records in upcoming months, which is a testament to the great cooperation between our two nations,” Xi said.
The Chinese leader was speaking via video at the St. Petersburg International Economic Forum’s plenary session, which Russian President Vladimir Putin opened with a speech over an hour long.

Chinese President Xi Jinping spoke Friday via video at the St. Petersburg International Economic Forum’s plenary session, which Russian President Vladimir Putin opened with a speech over an hour long. This picture is from Putin’s visit to Beijing in early February 2022.
Alexei Druzhinin | AFP | Getty Images

BEIJING — Chinese President Xi Jinping on Friday emphasized his country’s commitment to trading with Russia, despite Western sanctions against Moscow over its invasion of Ukraine.
“Today our cooperation between Russia and China [is] rising,” Xi said, according to an official English translation carried by Russian state broadcaster RT. He cited Russian President Vladimir Putin’s visit to Beijing in early February.

“Trade over the first half of this year has been [in the tens of billions of U.S. dollars] and we can expect new records in upcoming months, which is a testament to the great cooperation between our two nations,” Xi said.
The Chinese leader was speaking via video at the St. Petersburg International Economic Forum’s plenary session, which Putin opened with a speech over an hour long.
The official Chinese state media readout of Xi’s remarks did not mention “new records” in trade between China and Russia. The readout did call for the removal of trade barriers and greater cooperation with other countries, including Russia.
In both the Chinese readout and RT’s translation, Xi emphasized how China’s economic potential has not changed and talked about the further development of the Belt and Road Initiative.

Trade between China and Russia totaled $65.81 billion in the first five months of this year, up 28.9% from a year ago, according to China customs data. Most of the growth came from Chinese imports from Russia.

Beijing has refused to call Russia’s attack on Ukraine an invasion. After a high-profile meeting between Xi and Putin in early February, a readout said there were “no limits” or “forbidden areas” of cooperation, without mentioning Ukraine.
Earlier this week, Xi said in a phone call with Putin that Kyiv and Moscow “should push for a proper settlement” in the ongoing war in Ukraine, according to a Chinese readout of the call.
“China, they have their national interest in mind,” Putin said Friday following Xi’s remarks, according to RT’s English translation. “But we do not contradict each other.”
He described Russia’s relations with China as “friendly,” but noted that “it doesn’t mean China should play along with us in everything. We don’t need that.”
Xi has not spoken with Ukrainian President Volodymyr Zelenskyy since Russia invaded Ukraine in late February. From Germany to Japan, many countries have joined the U.S. in freezing the assets of Russian oligarchs, restricting access of Russia’s biggest banks to the global financial system, and cutting off Russia from critical technology.

Diverging ‘Davos’ events

WATCH LIVEWATCH IN THE APP More

Check out the companies making headlines before the bell:
Adobe (ADBE) – Adobe shares fell 3.7% in premarket trading after the software company issued weaker-than-expected financial guidance for the current quarter and the full year. Adobe is facing headwinds from the war in Ukraine and unfavorable foreign exchange rates, although its most recent quarter did beat Wall Street estimates for profit and revenue.

JD.com (JD) – JD.com is exploring a possible expansion into food delivery, according to CEO Xin Lijun in an interview with Bloomberg. That would put the Chinese e-commerce giant in direct competition with Alibaba and Meituan, which dominate that business in China. JD.com jumped 8.9% in the premarket.
U.S. Steel (X) – U.S. Steel rallied 7.7% in the premarket after issuing better-than-expected guidance for the current quarter. The steel producer’s results are being helped by rising demand and higher steel prices.
Roku (ROKU) – Roku shares gained 3.4% in premarket action after it announced a partnership with retail giant Walmart (WMT). Users of Roku devices will be able to purchase items with their remotes while streaming TV programs.
Alibaba (BABA) – Alibaba surged 9.2% in premarket trading after Reuters reported that China’s central bank approved Alibaba-affiliate Ant Group’s application to form a financial holding company. That revives hopes of a possible Ant Group initial public offering.
Centene (CNC) – Centene rose 1.9% in the premarket after the health insurer raised its earnings outlook and added $3 billion to its share repurchase program. It also plans to reduce its real estate footprint.

Bausch Health (BHC) – Bausch Health suspended plans to take its Solta Medical unit public, pointing to a number of factors including challenging market conditions. Solta sells aesthetic technology for treatments like skin smoothing and body contouring. Bausch added 3% in premarket trading.
Snap (SNAP) – The social media company’s stock added 2% in the premarket following news that Snap is testing a paid subscription model that would give users access to exclusive and pre-release features.
American Express (AXP) – The financial services giant was upgraded to “outperform” from “neutral” at Baird, which said that “relentless panic selling” has provided an attractive buying opportunity. American Express gained 1.5% in premarket action.
Utz Brands (UTZ) – The snack maker’s stock jumped 5.4% in the premarket after Goldman Sachs upgraded it to “buy” from “neutral.” Goldman cites Utz’s strong position in the fast-growth salty snack category, among other factors.

WATCH LIVEWATCH IN THE APP More