Finance

Shares of Chinese companies listed publicly in the U.S. surged Wednesday as China on Wednesday signaled support for the stocks.
Regulators from both countries are progressing toward a cooperation plan on U.S.-listed Chinese stocks, according to Chinese state media.
The move comes as ADRs of Chinese companies have been beaten down recently amid regulatory and delisting fears.

A pedestrian walks past the Alibaba headquarters building in Beijing.
Sheldon Cooper/SOPA Images | LightRocket | Getty Images

Shares of Chinese companies listed publicly in the U.S. surged Wednesday as China on Wednesday signaled support for the stocks.
Regulators from both countries are progressing toward a cooperation plan on U.S.-listed Chinese stocks, according to Chinese state media. The report cited a meeting Wednesday chaired by Vice Premier Liu He, who heads China’s finance committee.

The Chinese government supports the listing of companies overseas and said its crackdown on technology companies should end soon, the state media report said.
Alibaba jumped about 20%, JD.com added 24% and Pinduoduo rallied more than 35% in the premarket Wednesday.

U.S.-listed Chinese stocks

The move comes as American depositary receipts of Chinese companies have been beaten down recently amid regulatory and delisting fears. ADRs are shares of non-U.S. firms traded on U.S. exchanges.
The Nasdaq Golden Dragon China index, which tracks the performance of U.S.-listed Chinese stocks, is down 38.8% in 2022 and 69.2% in the past 12 months.
The Securities and Exchange Commission last week named five U.S.-listed ADRs of Chinese companies that failed to comply with the Holding Foreign Companies Accountable Act.

The act allows the SEC to delist and even ban companies from listing on U.S. exchanges if American regulators cannot review company audits for three consecutive years.
Last summer, Chinese regulators stepped up their oversight on U.S.-listed Chinese stocks. Regulators reportedly asked Chinese ride-hailing giant Didi to delist from the U.S. months after the company’s IPO.
— CNBC’s Evelyn Cheng contributed to this report.

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Check out the companies making headlines before the bell:
DiDi Global (DIDI), Alibaba (BABA), JD.com (JD), Pinduoduo (PDD) – China-based stocks listed in the U.S. are staging strong rallies in premarket trading, helped by state media reports that the Chinese government will take steps to support the markets and the economy, and that the U.S. and China are progressing toward an agreement on regulatory requirements for those companies. Didi surged 36.7% in the premarket, with Alibaba up 19.2%, JD.com rallying 21% and Pinduoduo soaring 32.5%.

Nvidia (NVDA) – The graphics chipmaker’s stock added 2.3% in the premarket after Wells Fargo added it to its “signature picks” list. The firm anticipates upbeat announcements from Nvidia at its upcoming investor day, and also said the recent market downdraft has helped create a favorable risk/reward profile.
Boeing (BA) – Boeing gained 2% in premarket trading after Baird declared the stock a “bullish fresh pick” following a recent sell-off and noted that 737 MAX deliveries to China are close to resuming.
Pfizer (PFE), BioNTech (BNTX) – Pfizer and partner BioNTech have asked the FDA to approve a second booster dose of their Covid-19 vaccine. A decision could come in time for an autumn vaccination campaign. BioNTech jumped 4.4% in premarket trading, while Pfizer rose 0.6%.
Micron Technology (MU) – Micron rallied 4.7% in the premarket following a Bernstein double upgrade to “outperform” from “underperform”. Bernstein said the Ukraine conflict won’t result in any significant memory chip supply or demand destruction, while also noting the recent sell-off in Micron and other semiconductor stocks.
Spotify (SPOT) – The streaming services company signed a stadium and shirt sponsorship deal with Spanish soccer team FC Barcelona, with the Spotify brand on uniform shirts for the next four seasons. Spotify rose 2.6% in premarket action.

NortonLifeLock (NLOK) – NortonLifeLock’s $8.6 billion deal to buy British cybersecurity rival Avast may get an in-depth probe by UK regulators, who say the deal raises competitive concerns. NortonLifeLock said it does not intend to submit any potential remedies for those concerns. Its stock slid 5.5% in the premarket.
Lands’ End (LE) – The apparel retailer missed estimates by 10 cents with quarterly earnings of 21 cents per share, while revenue also fell short of Street forecasts. Lands’ End also gave a weaker-than-expected forecast as it faces increasing costs and continued supply chain challenges. Lands’ End tumbled 9.5% in premarket trading.
Shoe Carnival (SCVL) – Shoe Carnival shares slid 3.3% in the premarket despite an upbeat quarterly report which saw it beat estimates on both the top and bottom lines. The shoe retailer issued a full-year revenue and profit forecast range that was largely – but not completely – above current Street forecasts. Shoe Carnival also announced a 29% dividend increase.

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Chinese and U.S. regulators are progressing toward a cooperation plan on U.S.-listed Chinese stocks, state media said, citing a financial stability meeting Wednesday chaired by Vice Premier Liu He.
Days of worries about U.S. delisting risks, on top of existing concerns about economic growth, had sent Chinese stocks plunging in New York and Hong Kong.
Hong Kong’s Hang Seng Index surged in Wednesday afternoon trading, after closing Tuesday at fresh lows not seen in more than six years.

Traders work during the IPO for Chinese ride-hailing company Didi Global Inc on the New York Stock Exchange (NYSE) floor in New York City, U.S., June 30, 2021.
Brendan McDermid | Reuters

BEIJING — China signaled support for Chinese stocks on Wednesday, after days of worries about U.S. delisting risks sent the stocks plunging in New York and Hong Kong.
Chinese and U.S. regulators are progressing toward a cooperation plan on U.S.-listed Chinese stocks, state media said, citing a financial stability meeting Wednesday chaired by Vice Premier Liu He.

Liu also heads the central government’s finance committee and is a member of the Chinese Communist Party’s central committee politburo — the country’s second-highest circle of power.
“The Chinese government continues to support various kinds of businesses’ overseas listings,” the state media report said in Chinese, translated by CNBC. The article said regulators should “complete as soon as possible” the crackdown on internet platform companies.
The report of Wednesday’s meeting also said authorities would work towards stability in Hong Kong’s financial market as well as the struggling real estate sector.

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Hong Kong’s Hang Seng Index extended earlier gains, surging 9% Wednesday afternoon, rebounding from its lowest close in six years. Chinese tech giants Alibaba and Tencent soared more than 20%, while other major Chinese tech stocks jumped.
“China’s top leaders finally broke the silence to respond to the recent market selloff,” Larry Hu, chief China economist at Macquarie, said in a report. “The tone of the meeting is strong, suggesting that policymakers are deeply concerned about the recent market rout.”

Worries about forced Chinese stock delistings from U.S. exchanges had added to investors’ concerns about economic growth following a resurgence of Covid-19 and the Ukraine war. On Monday, JPMorgan China Internet analysts Alex Yao and a team said they considered the sector “uninvestable” for the next six to 12 months, and downgraded 28 of the stocks they cover.
The U.S. Securities and Exchange Commission said last week that U.S.-listed securities for five Chinese companies are at risk of delisting.
It was the first time the regulator had named specific stocks for failing to adhere to the Holding Foreign Companies Accountable Act. Passed in 2020, the act would allow the SEC to delist Chinese companies from U.S. exchanges if American regulators cannot review company audits for three consecutive years.
Beijing’s concerns about information security have generally prevented Chinese companies from allowing such audits.

Early on Friday, the China Securities Regulatory Commission said in a statement that, along with the Ministry of Finance, it has made progress in communication with the U.S. Public Company Accounting Oversight Board.
“We believe that through joint effort both sides will, as soon as possible, be able to make arrangements for cooperation in line with the two countries’ legal and regulatory requirements,” the Chinese securities regulator’s statement said, according to a CNBC translation.
The PCAOB did not immediately respond to a request for comment outside office hours.
In the last two years, the Chinese government has cracked down on large technology companies over alleged monopolistic practices, and real estate developers’ high reliance on debt. Investors began to worry specifically about U.S.-listed Chinese stocks after Beijing clamped down on Didi just days after its New York listing in late June.
Economists said in February the worst of China’s regulatory crackdown is over as Beijing shifts its focus to supporting economic growth.
In late January, the China Securities Regulatory Commission’s director-general of the international affairs department, Shen Bing, told CNBC in an exclusive interview the commission hoped its forthcoming updated rules would help Chinese companies resume their overseas listings.

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The S&P 500 rose on Tuesday for its first gain in four days, as oil prices continued to drop further below $100 and a reading of wholesale inflation came in lighter than expected.
The gains came as traders continued to eye the latest with ceasefire negotiations in Ukraine and China Covid lockdowns that could wreak havoc on tech supply chains. Investors are anticipating a big Federal Reserve monetary decision Wednesday, in which the central bank is expected to hike rates for the first time since 2018.

The broad market index rose 2.1% to 4,262.45, though it remains more than 11% from its record. The Dow Jones Industrial Average added 599.10 points, or 1.8%, to 33,544.34. The tech-heavy Nasdaq Composite gained 2.9% to 12,948.62.
CFRA chief investment strategist Sam Stovall said a volatile and confusing market that has fatigued investors was due for a relief rally, even if it’s just that.
“Because this market has been so weak, so unconvincing since its all-time high on January 3, and because of intraday reversals, no one really knows what will end up being,” Stovall said. “But what is causing the market to be totally in the green today is it’s just getting tired of going straight down for such an extended period. So even if this were simply a relief rally, I think we are due for one.”
Falling oil prices and inflation data are both catalysts for that rally, Stovall added. Additionally, with investors looking forward to the outcome of the Fed’s meeting, Stovall noted that the market remembers stocks tend to rise in the first, third and twelfth months after an initial rate increase.

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“The market expects seven [rate] hikes in 2022. Given the sell-off in the commodity markets, there’s a little less fear of inflation, and when that’s the case, the natural inclination is to go toward the growthier sectors,” Julian Emanuel, Evercore ISI senior managing director of equity, told CNBC’s “Closing Bell” Tuesday.

Tech stocks led the bounce after recent losses. Microsoft and Netflix each rose 3.8% after Wall Street analysts reiterated their overweight ratings. Oracle climbed 4.5%. Chipmakers climbed, with Nvidia 7.7% higher and Advanced Micro Devices up 6.9%.
Disney and McDonald’s added 4% and 2.8%, respectively. Peloton jumped 11.9% after Bernstein initiated coverage of it with an outperform rating and said recent losses make this an “absurdly attractive” entry point for investors.

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Airline stocks got a boost after some major carriers raised their revenue outlooks. United and American each rose more than 9%, while Delta added 8.7%.
Falling oil prices pushed up other travel stocks as well, including cruise lines, hotels, casino and gaming companies and travel booking site operators, which were among the top gainers in the S&P 500. The Invesco Dynamic Leisure and Entertainment ETF gained about 2.7%.
Meanwhile, the drop in oil prices put pressure on energy stocks. Chevron and Exxon each fell about 5%. The Energy Select Sector SPDR Fund was down about 3.7%, for its third straight negative day and its worst day since November.
Oil prices continued their decline Tuesday. U.S. crude futures slid about 6.4% to settle at $96.44 per barrel, after topping $130 about a week ago. Meanwhile, the international Brent benchmark settled 6.5% lower at $99.91 per barrel.
February’s surge in energy prices led wholesale goods prices to their biggest one-month jump on record, the Labor Department reported Tuesday. The headline producer price index (PPI) rose 0.8% in February from the previous month. While that was slightly lower than the 0.9% estimated by Dow Jones, it still showed a 10% gain from the same time last year.
However, core PPI, which excludes food, energy and trade services, rose just 0.2%. That was below the expectation of 0.6%.
In Ukraine, the capital city of Kyiv announced a 35-hour curfew that begins at 8 p.m. local time following Russian missile strikes that hit several residential buildings in the city. Russia and Ukraine resumed talks Tuesday, following a fourth round of negotiations Monday. Meanwhile, Russia is approaching a series of deadlines to make payments on its debt.
On Monday, United States officials held “intense” talks with China to discuss, among other things, concerns that Beijing may attempt to help Russia blunt global sanctions. The discussion followed reports that Moscow requested military equipment from China for its war in Ukraine.
China is also facing its worst Covid outbreak since the height of the pandemic. Shenzhen, a major city in a key manufacturing hub in China, has shut down nonessential businesses and imposed city-wide testing, raising concern over the global economic recovery going forward.
The Federal Reserve kicked off an important two-day meeting Tuesday, with investors expecting a quarter-point rate hike to be announced Wednesday. That would be just the beginning of the central bank’s unwinding of the massive economic aid it provided during the pandemic.
Rising inflation is expected to be the focal point of the meeting, however. At the last update, in December, officials projected inflation would run at 2.7%. However, February’s core personal consumption expenditures price index, the Federal Reserve’s primary inflation gauge, indicated inflation is up 5.2% from a year ago.
Policymakers will also update their outlook for rates as well as GDP, inflation and unemployment.

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Stock futures were flat in overnight trading after the major indexes rallied and oil prices tumbled below $100 a barrel ahead of Wednesday’s Federal Reserve meeting.
Futures on the Dow Jones Industrial Average dipped 40 points, while S&P 500 futures fell 0.1% and Nasdaq 100 futures were flat.

The gains came ahead of a critical Federal Reserve meeting on Wednesday, where the agency is widely expected to raise rates by a quarter-point, the first hike since 2018. Watchers are also expecting the central bank to offer a new quarterly forecast that could indicate five or six more hikes this year.
“My guess is it’s going to sound a little more hawkish than people want it to sound, and that’s going to be a little tough to digest, particularly in the fixed income markets,” David Zervos, chief market strategist at Jefferies told CNBC’s “Closing Bell” on Tuesday. “I think the equity market might digest it a little bit better, but it’s going to be a tough swallow.”
The Fed is expected to announce an interest rate decision and economic projections at 2 p.m. on Wednesday, which will followed by a briefing from Federal Reserve Chair Jerome Powell.
Meanwhile, oil prices cooled off on Tuesday, dropping below $100 after topping a multiyear high of $130 earlier this month, while commodities such as gold, which have been volatile in recent days, fell 1.59%.
The U.S. and global oil benchmarks both settled below $100 a barrel, with West Texas Intermediate and Brent crude falling 6.4% and 6.5%, respectively. The fallback put pressure on some energy stocks, including Exxon and Chevron, which sank about 6% and 5% on Tuesday.

During regular trading on Tuesday, the Dow Jones Industrial Average gained 599 points, or 1.8%, while the S&P 500 jumped more than 2.1%, and broke a three-day losing streak. Meanwhile, the tech-heavy Nasdaq Composite rose about 2.9%.
“U.S. stocks are trading higher Tuesday as investors react positively to a ‘Goldilocks’ mix of economic reports (lower PPI and eroding Empire survey) and another sharp drop in oil prices — all suggesting that the path to sustained high inflation may be less certain than some think,” wrote Goldman Sachs analyst Chris Hussey in a note Tuesday.
Tuesday’s market rally was broad-based, led by sharp gains among technology stocks. Microsoft rose nearly 4%, while chipmakers Nvidia and Advanced Micro Devices climbed roughly 8% and 7%. Peloton rose 12% after Bernstein initiated coverage of the stock with an “outperform” rating, and Coupa Software plummeted 19% on the back of a weaker-than-expected outlook.
Investors continued to monitor the ongoing situation in Ukraine on Tuesday, as Kyiv announced a 35-hour curfew after Russian missile strikes hit some residential buildings. Meanwhile, President Joe Biden signed a government funding bill that included $13.6 billion in aid to Ukraine.
Some European leaders also announced they will visit Ukraine to meet with the country’s president and prime minister, while Russia is expected to default on its debt for the first time in decades as it nears a Wednesday deadline for two payments.
Traders continued to keep an eye on the situation in China, where one of the country’s largest manufacturing hubs has shut down amid rising Covid-19 cases.
Investors will be watching Ukrainian President Volodymyr Zelenskyy address Congress on Wednesday and are awaiting economic data, including the retail sales report for February.

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An American Airlines Boeing 787-9 Dreamliner approaches for a landing at the Miami International Airport on December 10, 2021 in Miami, Florida.
Joe Raedle | Getty Images

Check out the companies making headlines in midday trading.
AMC Entertainment, Hycroft Mining — The movie theater chain saw its shares rally 6.8% after announcing it agreed to purchase a roughly 22% stake in a tiny gold and silver miner, Hycroft Mining. The share price of Hycroft Mining, which is less than $2, gained 9.4%

Starbucks — Shares of the coffee chain jumped 4.8% after it announced a partnership with Volvo Cars to research the usage and potential scalability of electric vehicle chargers at Starbucks stores nationwide. Meanwhile, Starbucks also unveiled the latest steps it’s taking to reduce its disposable cup use.
Delta Air Lines, United Airlines, Southwest Airlines — Shares rose after Delta, United and Southwest said bookings came in ahead of expectations and the recovery in travel demand has been faster than projected. Delta jumped 8.7%, United added 9.2%, Southwest gained 4.9% and American Airlines rallied 9.3%.
Coupa Software — Shares plunged 19.2% a day after the business software company issued a much weaker-than-expected full-year outlook. However, Coupa beat expectations for profit and revenue results for its most recent quarter.
GitLab — Shares of GitLab rose 7.8% after the development operations platform beat analysts’ estimates in the fourth quarter and issued better-than-expected guidance.
Peloton — Shares of the at-home fitness company jumped 11.9% after Bernstein initiated coverage of the stock with an “outperform” rating. The analyst mentioned Peloton’s healthy underlying business, new management and recent stock price plunge. Her $40 price target implies the stock could nearly double over the next year.

Planet Fitness — Planet Fitness shares are up 2.5% after Evercore ISI initiated coverage of the company with an outperform rating. Evercore issued a $130 price target on the fitness center operator, representing 60% upside from the stock price at Monday’s close.
Toast — Toast shares jumped 6.9% after Baird upgraded the restaurant software company to outperform from neutral and said its shares could rally nearly 54%. Toast may profit from “above-GDP growth” in the restaurant industry and international expansion opportunities, Baird said.
GoodRx — Shares jumped 10.4% after Baird upgraded the stock to outperform. The sell-off in GoodRx this year offers “attractive entry point” for investors, according to the firm
eBay — The retailer’s stock price gained 3.6%. On Tuesday, Deutsche Bank initiated coverage of eBay with a buy rating, saying investors are underappreciating the firm’s position in the resale market. Analysts expect growth in the company’s luxury resale market in European markets.
— CNBC’s Tanaya Macheel, Samantha Subin, Jesse Pound, Sarah Min and Yun Li contributed reporting

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The smallest 401(k) plans charge fees of 0.88% a year, while the largest charge 0.41%, according to Morningstar research.
Those fees are levied annually as a percentage of a worker’s total savings. The extra costs can amount to a lot of money.

Yongyuan | E+ | Getty Images

Workers who save in a 401(k) plan offered by a small business pay fees that are twice as high as those paid by employees who work at the largest companies in the U.S.
The smallest workplace retirement plans (those with less than $25 million in aggregate savings) charge total fees of 0.88% a year, while the largest (those with more than $500 million) charge 0.41% annually, according to a Morningstar Center for Retirement and Policy Studies report.

Workers pay these 401(k) fees annually to financial firms like investment managers and plan administrators. The fees are automatically withdrawn from workers’ accounts as a percentage of their total savings.

“The U.S. [retirement] system does not work nearly as well for people who are not fortunate enough to work for larger, established employers,” said the study’s authors, Aron Szapiro, head of retirement studies and public policy, and Lia Mitchell, senior policy research analyst.
The study looks at median fees (those right in the middle of a group) in 2019, the most recent year of complete federal data. Many plans within size groups carry fees both lower and higher than the median.
More than 30% of the smallest plans have total costs exceeding 1% a year, according to Morningstar.
The difference between small and large plans can amount to a lot of money over decades of saving for retirement.

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“Workers at employers with smaller plans who are saving just as much as those at employers with larger plans could have around 10% less in assets at retirement because of higher fees,” Szapiro said.
Employers with so-called “mega” plans can negotiate much lower fees from investment managers and other service providers than businesses with small 401(k) plans. They’ve also been more likely to adopt investments other than mutual funds that tend to be lower-cost.
There are just 2,115 employers offering so-called “mega” plans (those with more than $500 million). But their plans account for a big portion (43%) of all 401(k) investors, according to Morningstar.

Meanwhile, there are 649,000 small plans (with less than $25 million), but they account for 27% of all 401(k) savers, Morningstar found.
(The remaining savers fall somewhere in the middle of small and mega plans.)
While many workers have access to a low-cost 401(k) plan at work, the data speaks to a fragmented system that relies heavily on the largest businesses to succeed.
“The jobs of the future may not be with employers who offer these savings opportunities,” according to Szapiro and Mitchell. “Moreover, this concentration underscores that policymakers must maintain incentives that these large employers find attractive.”

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ConsenSys has raised $450 million in a funding round backed by the likes of Microsoft, SoftBank and Temasek.
The investment more than doubles ConsenSys’ valuation to $7 billion.
Tech giants from Microsoft to Twitter are becoming increasingly interested in Web3, a movement that calls for a more decentralized internet based on the blockchain.

Joseph Lubin, co-founder of Ethereum.
Adam Jeffery | CNBC

Blockchain start-up ConsenSys has raised $450 million in a new round of funding that more than doubles its valuation to $7 billion.
The cash injection was led by ParaFi Capital, ConsenSys said Tuesday, with Microsoft, Japan’s SoftBank and Singapore’s Temasek also joining as new investors in the company.

New York-headquartered ConsenSys was founded in 2014 by Joseph Lubin, a co-founder of Ethereum. Ethereum is the blockchain platform behind ether, the world’s second-biggest cryptocurrency.
Whereas bitcoin is mostly used for transactions, Ethereum can be used to create decentralized applications, or dapps — think Facebook or TikTok, but on the blockchain, a shared record-keeping system for crypto transactions. ConsenSys develops software that runs on the Ethereum network.

It marks a rare crypto-related bet from Microsoft. The company previously led an early-stage investment in Palm NFT Studio, a start-up also co-founded by Lubin.
Microsoft’s involvement highlights growing interest from the world’s largest tech firms in Web3, a loosely-defined term that refers to efforts to create a decentralized version of the internet based on blockchain technology.
It’s a term that has attracted a lot of chatter — and money — in Silicon Valley. Blockchain start-ups raised a record $25 billion in venture capital funding globally last year, according to CB Insights data. Other tech giants exploring Web3 include Facebook-parent Meta and Twitter.

ConsenSys is viewed by investors as one of the companies that will power Web3. It’s benefited from a flood of investment into emerging crypto trends such as decentralized finance, or DeFi, and nonfungible tokens, otherwise known as NFTs.
The company’s most popular products include the MetaMask cryptocurrency wallet and Infura, a suite of tools that helps developers create Ethereum apps.
MetaMask allows people to store and manage their tokens through a web browser extension or a mobile app. People can also access popular blockchain-powered apps like Uniswap and Axie Infinity. The bulk of ConsenSys’ revenues currently comes from fees for trading different tokens on MetaMask.

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MetaMask topped 30 million monthly active users in January, ConsenSys said, up 42% in the last four months. The U.S., Philippines, Brazil, Germany and Nigeria are its most active markets. Infura, meanwhile, is used by over 430,000 developers and recently topped $1 trillion in annualized transaction volumes.
ConsenSys said all the proceeds from its latest round would be converted into ether. The funds will go toward hiring 600 more employees, a redesign of MetaMask slated for release later this year, and building out ConsenSys’ growing NFT business.

Web3 hype

Just as Web3 has generated a lot of hype, it’s also drawn some notable critics, including tech billionaires Elon Musk and Jack Dorsey.
Dorsey dismissed Web3 as a centralized technology owned by venture capitalists rather than the crypto community, while Musk says he thinks it’s more “buzzword” than reality.
For his part, Lubin doesn’t see it that way.
“What Jack may be concerned about is how a small number of VCs are grabbing the lion’s share of equity or tokens in many of the best projects,” ConsenSys’ CEO said. “I’m not concerned at all.”

“Decentralized protocol technology is anti-fragile, as is its global community,” Lubin added. “The community will interpret centralization as suboptimal and an opportunity, and will relentlessly decentralize.”

U.S. regulation

The crypto world has also been keeping a close watch on regulatory developments out of the U.S., after President Joe Biden issued an executive order calling for a coordinated response from the government to industry oversight.
Bitcoin, ether and other digital tokens initially reacted positively, only to subsequently turn south as investors grew concerned by a lack of detail in Biden’s plan.
The U.S. government “has a big policy decision on its hands,” Lubin said, adding ConsenSys “is ready and eager to assist policymakers however we can.”
“At the end of the day, permissionless blockchain networks are global, and they will grow and change our everyday lives whether or not the U.S. is a leader,” he added.

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