Finance

Beth M. Hammack, 52, will take over as Cleveland Fed President when Loretta Mester steps down June 30. Hammack will take office officially on Aug. 21.
The Cleveland Fed president plays an important role this year as a voter on the rate-setting Federal Open Market Committee.

A Goldman Sachs executive and finance industry veteran will take over as the new president of the Cleveland Federal Reserve.
The central bank district announced Wednesday that Beth M. Hammack, 52, will be the next leader of the central bank district when Loretta Mester steps down June 30. Hammack assumes the office officially on Aug. 21. In the interim, Cleveland Fed First Vice President Mark S. Meder will serve as the president.

“It is a great privilege to serve the Fourth District, and the country, in fulfilling our mission of fostering a strong, stable economy in which all Americans have the opportunity to prosper,” Hammack said in a statement. “I cannot wait to lead the Bank’s talented team, who deliver every day on our important mission.”
As the Fed contemplates its next moves with monetary policy, the Cleveland president plays an important role this year as a voter on the rate-setting Federal Open Market Committee.
Mester mostly has been known for her more hawkish views, meaning she often has favored tighter economic policy to meet the central bank’s inflation mandate. In a recent speech, she offered several recommendations to her colleagues on improving communications, including more detailed post-meeting statements to provide greater explanation about the committee’s actions.
Hammack comes to the Cleveland Fed after serving with Goldman Sachs since 1993 in multiple roles, having been a partner since 2010 after being named managing director in 2003. Most recently, she served as global finance director.
She is a Stanford University graduate, holding degrees in quantitative economics and history.

“Beth has a deep understanding of financial markets and the monetary policy transmission process, expertise in leading complex business lines, and a proven commitment to mission-focused work,” said Heidi Gartland, chief government and community relations officer with University Hospitals and chair of the presidential search committee and the Cleveland Fed’s board of directors.
Current market pricing is pointing towards the likelihood of one interest rate reduction coming later this year, likely in November or December. At the beginning of 2024, markets were expecting at least six cuts.

Don’t miss these exclusives from CNBC PRO More

Crypto exchange Gemini announced Wednesday that it will return $2.18 billion to users of the Earn program, which it paused withdrawals for in November 2022.
It follows a $2 billion settlement from the New York attorney general with Genesis, Gemini’s lending partner, intended to make defrauded crypto investors whole again.

Tyler Winklevoss and Cameron Winklevoss (L-R), creators of crypto exchange Gemini Trust Co., on stage at the Bitcoin 2021 Convention, a cryptocurrency conference held at the Mana Convention Center in Wynwood in Miami, Florida, on June 4, 2021.
Joe Raedle | Getty Images

Customers with funds locked up in crypto exchange Gemini’s defunct crypto lending program are finally going to start getting their money back.
The company, which is owned by tech billionaire twins Cameron and Tyler Winklevoss, announced Wednesday that it will return $2.18 billion of its digital assets to users of the Earn program, which it paused withdrawals for in November 2022.

“Today, we are pleased to let you know that initial Earn distributions — approximately 97% of the digital assets owed to you by Genesis as of the suspension date (November 16, 2022) — are now available in your Gemini account,” Gemini will tell its customers via email Wednesday.
“This follows our previous announcement that we reached a settlement with Genesis and other creditors in the Genesis Bankruptcy, which will result in all Earn users receiving 100% of their digital assets back in kind.”
The email adds: “This means that if you lent one bitcoin in the Earn program, you will receive one bitcoin back. And it means that you will receive any and all increase in the value of your assets since you lent them into the Earn program.”
At $2.18 billion, the fund distribution represents a 232% recovery for users since Gemini froze withdrawals for customers of its Earn program 18 months ago.
First launched in 2021, Earn enabled customers to get high yields on their coins by storing them in Gemini’s scheme. Gemini then lent customers’ crypto to institutional borrowers through Genesis Global Capital, its lending partner of choice.

In November 2022, Genesis Global Capital paused new loan originations and redemptions, forcing Gemini to halt withdrawals from its Earn program. Genesis filed for Chapter 11 bankruptcy protection last January in Manhattan federal court.
Last week, New York Attorney General Letitia James announced a $2 billion settlement with Genesis to repay defrauded investors. More

Climate-focused venture capital firm Clean Energy Ventures said Wednesday it raised $305 million for its second fund.
The fund was oversubscribed amid investor appetite for emissions-reducing technologies.
Areas of focus for the new fund include industrial decarbonization, plastics and grid-enhancing technologies like virtual power plants.
Private equity investment in the energy transition is also growing, hitting nearly $30 billion in 2023.

Solar panels and wind turbines in the Netherlands.
Daniel Bosma | Moment | Getty Images

Clean energy stocks may be underperforming in the public market, but there is still great appetite for companies focused on decarbonization in private markets — with Clean Energy Ventures’ new fund serving as the latest example.
The climate tech firm said Wednesday that it raised $305 million for its second fund, five years after closing its first fund. This latest fund was oversubscribed — the initial target stood at $200 million — but interest from limited partners including The Grantham Foundation, Builders Vision and Carbon Equity led to a higher raise.

The firm is already putting the new money to work, focusing on technologies that go beyond the traditional green investments of solar and wind.
Co-founder and managing partner Daniel Goldman identified industrial decarbonization as one compelling vertical — specifically emissions-reducing technology for the cement and steel industries.
“When you think about where do we need to have material impact, and where are sectors that technology really hasn’t changed for many, many decades, steel and cement rank at the top of the list. So we think there’s huge opportunity there,” he told CNBC.
Two other areas of interest for the new fund include plastics — both more efficient recycling as well as cost-competitive bioplastic production — and grid-improving technologies for distributed energy, such as virtual power plants.

Clean Energy Ventures backed 20 companies in its first fund and has already made six investments via its second fund, including Israel-based green ammonia company Nitrofix, as well as sustainable aviation fuel company Oxccu, which is based in the U.K. Clean Energy Ventures is also opening a new office in London, with Goldman calling the European opportunity “really incredible,” while also pointing to opportunities in Israel.

A lot has changed in the renewable energy landscape since 2019 when Clean Energy Ventures launched its first fund, including the rise – and subsequent fall – of special purpose acquisition companies. During the Covid-era, SPACs proved a popular path for clean energy companies to access public markets. Many have performed poorly since, leading some to argue the enthusiasm around SPACs caused companies to go public that simply weren’t ready.
But Goldman said the unwind of the SPAC trade and poor performance of publicly traded clean energy stocks hasn’t damaged investor perception around the value of clean energy investing, or the idea that greener investing comes at the expense of returns. Clean Energy Ventures’ limited partners, which include institutional investors, asset managers, family offices and registered financial advisors, are not impact investors — in other words they’re focused on returns.
None of the companies from Clean Energy Ventures’ first fund have gone public, but the firm views IPOs as a nice to have, rather than a need to have. Goldman said Clean Energy Ventures’ approach has been to instead focus on strategic sales – in other words backing companies developing technologies that a much larger company, say an energy or industrial giant, might be interested in.
No companies from the first fund have been acquired, although Goldman said there have been interested buyers.

Elsewhere in private markets, private equity is playing an increasingly important role in energy-transition related deals. According to Mike Collier at financial advisory firm Weaver, private equity-backed energy transition deals jumped to more than $25.9 billion in 2023, up from just $500 million in 2018.
Private equity plays a critical part because it can be a stepping stone for companies that have outgrown venture capital, but aren’t yet ready for public markets.
Clean Energy Ventures helps its portfolio companies reach the next stage by partnering with private equity, and Goldman said over the last six months the firm’s seen more interest from that market.
“I’m not saying they [private equity] are coming in and taking early stage technology risk, but once you have a demonstration – or first of a kind – they’re able to get comfortable with coming in for those follow-on projects, much sooner than was traditionally the case,” he said. More

The International Monetary Fund raised its forecast Wednesday for China’s growth this year to 5%, from 4.6% previously, due to “strong” first quarter figures and recent policy measures.
China’s economy grew by a better-than-expected 5.3% in the first quarter, supported by strong exports.
Recent real estate policy moves are “welcome,” but more comprehensive action is needed, Gita Gopinath, the IMF’s first deputy managing director, said in a statement.

A worker rides a bicycle past a housing complex under construction in Beijing on May 17, 2024. 
Jade Gao | Afp | Getty Images

BEIJING — The International Monetary Fund on Wednesday raised its forecast for China’s growth this year to 5%, from 4.6% previously, due to “strong” first quarter figures and recent policy measures.
The upgrade followed an IMF visit to China for a regular assessment. The organization now expects China’s economy to grow by 4.5% in 2025, up from the previous forecast of 4.1%.

But by 2029, they anticipate China’s growth will decelerate to 3.3% due to an aging population and slower productivity growth. That’s down from the IMF’s prior forecast of 3.5% growth in the medium term.
China’s economy grew by a better-than-expected 5.3% in the first quarter, supported by strong exports. Data for April showed consumer spending remained sluggish, while industrial activity picked up.
About two weeks ago, Chinese authorities announced sweeping measures to support the struggling real estate sector, including removing the floor on mortgage rates.

The policy moves are “welcome,” but more comprehensive action is needed, Gita Gopinath, the IMF’s first deputy managing director, said in a statement.
“The priority should be to mobilize central government resources to protect buyers of pre-sold unfinished homes and accelerate the completion of unfinished presold housing, paving the way for resolving insolvent developers,” she said.

“Allowing for greater price flexibility, while monitoring and mitigating potential macro-financial spillovers, can further stimulate housing demand and help restore equilibrium.”
The IMF release said that during her visit to China this month, Gopinath met with People’s Bank of China Governor Pan Gongsheng, Ministry of Finance Vice Minister Liao Min, Ministry of Commerce Vice Minister Wang Shouwen, PBOC Deputy Governor Xuan Changneng, National Financial Regulatory Administration Vice Chairman Xiao Yuanqi.
“Near-term macroeconomic policies should be geared to support domestic demand and mitigate downside risks,” Gopinath said.
“Achieving high-quality growth will require structural reforms to counter headwinds and address underlying imbalances,” she added.
In a meeting Monday, Chinese President Xi Jinping stressed the need to promote “high-quality, sufficient employment,” according to state media.
“Xi specifically stressed improving employment support policies for college graduates and other young people,” Xinhua reported. More

Only 14% of high-income households that traveled internationally last year would go abroad again in 2024, according to a survey released this month by consulting firm Oliver Wyman.
Local governments outside China’s big cities have been stepping up their efforts to attract tourists, primarily through social media.
Within mainland China, smaller cities such as Yangzhou, Luoyang, Qinhuangdao, Guilin and Zibo saw the fastest growth in tourism bookings during the May holiday, Oliver Wyman said.

A night in China’s Guizhou province at the Cliff Hotel, pictured here, starts around $83, according to Trip.com, which says the hotel was built in 2023 with 34 rooms.
Nurphoto | Nurphoto | Getty Images

BEIJING — Chinese travelers are increasingly opting for cheaper domestic destinations over foreign tourist spots.
Only 14% of high-income households that traveled internationally last year plan to go abroad again in 2024, according to a survey released this month by consulting firm Oliver Wyman. The segment covers families in mainland China earning at least 30,000 yuan a month ($4,140, or about $50,000 a year).

The top reason for preferring their home country was “abundant domestic travel options,” the survey found, followed by “too costly” international travel.
The average cost per person for traveling within mainland China is less than 1,000 yuan, versus several thousand yuan for a trip to Hong Kong or Japan, Oliver Wyman said.
Local tourism has been a bright spot in China’s recovery from Covid-19 controls that ended in late 2022. Travel booking site Trip.com said that in 2023, bookings for rural destinations in China grew by 2.6 times versus pre-pandemic levels.

During a public holiday this year from May 1 to May 5, domestic tourism trips and revenue surged versus pre-pandemic levels in 2019, official data showed. International trips were slightly below 2019 levels, according to CNBC analysis of official figures.
Within mainland China, smaller cities such as Yangzhou, Luoyang, Qinhuangdao, Guilin and Zibo saw the fastest growth in tourism bookings during the May holiday, Oliver Wyman said.

“This year, domestic tourism will surpass pre-pandemic levels,” said Ashley Dudarenok, founder of China digital consultancy ChoZan.
She expects recovery in Chinese traveling internationally to take longer, partly as “the feeling that the rest of the world is mad and unsafe is even higher than in 2023.”
In contrast, a record number of people in the U.S. in the last two years have applied for passports to travel abroad. A Skyscanner report said 85% of U.S. travelers plan to take at least as many international trips this year as in 2023, if not more.
U.S. and Chinese officials held a summit in Xi’an city last week to promote tourism between the two countries.

The moment you go viral you will have thousands of tourists at your doorsteps.

Ashley Dudarenok
ChoZan, founder

It’s unclear as to what extent tourist interest in less developed parts of China will persist, and whether it will translate into sustainable growth. But the near-term impact on some localities is significant.
The southern Guangxi autonomous region, home to Guilin’s famous limestone hills, issued a plan for boosting consumption this year by increasing publicity and tourist subsidies.
In the first quarter, officials said the region’s tourism revenue rose by nearly 24% year on year to 258.18 billion yuan. Local authorities said performing arts subsidies from the local governments helped generate 48.3 million yuan in ticket sales to 230,000 people, stimulating about 460 million yuan in economic activity.
About 2.5-hour-long flight to the east of Guangxi is the Nanjing city wall tourist site. It received nearly 1.3 million visitors in the first quarter, generating a revenue of 19.2 million yuan — double that of 2019, according to local media.

Competition for media eyeballs

Local governments outside China’s big cities have been stepping up their efforts to attract tourists, primarily through social media.
Guangxi officials earlier this month said its promotional videos on apps such as ByteDance’s Douyin and Xiaohongshu, known in English as “Little Red Book” or “Red,” had millions of viewers.
“They try to go viral, they try to involve their community, cultural heritage, put it all online,” Dudarenok said. “The moment you go viral you will have thousands of tourists at your doorsteps.”
People have flocked to the town of Zibo in the eastern province of Shandong after its barbecue skewer culture took off on social media last year. Similarly, three million visitors poured into Harbin city over the three-day New Year’s Eve holiday after its ice sculptures and unique northern customs gained traction on social media.
TV Shows featuring specific regions have also helped boost tourism.
Thanks to a television drama set in Altay, the remote part of Xinjiang province in the far west saw a nearly 38% surge in visitors from a year ago during the first three days of this year’s May holiday, according to iQiyi, which released the mini-series.
“The TV shows are a great draw,” Dudarenok said, adding that “food is always the most important reason for Chinese tourists to travel.”
China’s expansive network of high-speed trains and flights has made it easier for people to visit small towns, even for just two or three days.
Domestic air ticket bookings on Trip.com surged by 30% in the first quarter from a year ago, the company said last week. It noted that Chinese consumers are now placing greater emphasis on “emotional fulfillment,” prompting interest in personalized trips.
“Intensifying marketing efforts in many provinces effectively encouraged travelers to explore diverse destinations,” Trip.com management said on its earnings call, according to a FactSet transcript.
Businesses and local governments are collaborating in other ways to boost attention, if not revenue.
Officials from tourist spots and local governments have reached out to Miss Tourism Asia pageant for promotions, said Yang Hua, president of the organizing committee.
“Right now, China’s domestic tourism industry is relatively scattered,” Yang said in Mandarin, translated by CNBC. He hopes to create destination-specific events for cities that can attract visitors for the next several years.
Miss Tourism Asia filmed a promotional fashion video last year of contestants in the desert around Xinjiang’s Aral city, and held the pageant’s finals on Jan. 1, 2024, in the southern city of Dongguan in Guangzhou province.
Chinese consumers’ current preference for domestic travel means that a full recovery in international travel to 2019 levels likely won’t come until late 2025, half a year later than previously forecast, according to Oliver Wyman.
In the longer-term, Dudarenok expects that international tourist destinations will need to upgrade their experience to match the rise of stylish, modern hotels and other travel services in China.
“Chinese tourists [are] not so easy to please,” she said.
— CNBC’s Greg Iacurci and Yulia Jiang contributed to this report. More

Starting Tuesday, trades of stocks and several other securities will need to be settled by the end of the next business day.
For most retail traders, the change is expected to be seamless.
The change comes after the GameStop mania in 2021 put the settlement process under closer scrutiny.

The New York Stock Exchange in New York, March 28, 2023.
Victor J. Blue | Bloomberg | Getty Images

Years of work on Wall Street to pick up the pace of trading will be put to the test this week. If all goes well, most people won’t notice the difference.
Starting Tuesday, trades of stocks and several other securities will need to be settled by the end of the next business day. Settlement involves the actual swap of money for a security. This so-called T+1 settlement accelerates the previous process that allotted two business days.

The move is the latest evolution to make the plumbing of Wall Street look more like the front end, which is increasingly moving toward trading apps and around-the-clock markets.
“For everyday investors who sell their stock on a Monday, shortening the settlement cycle will allow them to get their money on Tuesday. Shortening the settlement cycle also will help the markets because time is money and time is risk. It will make our market plumbing more resilient, timely, and orderly,” Securities and Exchange Commission Chair Gary Gensler said in a statement on May 21.
For most retail traders, the change is expected to be seamless. As physical paper versions of equity shares are all but extinct, most brokerage firms handle settlement automatically for their customers.
It could be trickier for large dollar trades and funds, especially those that hold international stocks since not all markets are aligned on settlement time frame.
“When you start talking about larger trades, block liquidity, that’s where you may see the movements in cost depending on the product, depending on the underlying market,” said Tim Huver, managing director at investment bank Brown Brothers Harriman.

This is not the first time that the SEC has shortened settlement time on trades, with the move to T+2 from T+3 happening in 2017. The SEC officially adopted the change to T+1 in February, though many industry experts had long expected the move.
The latest change comes after the GameStop mania in 2021 put the settlement process under closer scrutiny. The wild swings in so-called meme stocks meant that the agreed-upon price for trades was significantly different from the market price when the trade was actually settled. Additionally, there were increased instances of “failure to deliver,” or trades where settlement did not occur, during that period.
The excitement around GameStop and other meme stocks has had a resurgence in 2024. Shares of the video game retailer surged on Tuesday after disclosing that it had raised more than $900 million through an additional stock sale.

Don’t miss these exclusives from CNBC PRO More

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, a group that produces 40% of the world’s crude, wants to keep oil prices high and stable. Lately they have certainly been stable, even if not that high. Despite the recent death of Iran’s president and the escalating war in Gaza, prices of Brent crude, the global benchmark, have stayed within $2 of $82 a barrel since the start of May.Part of the reason why OPEC is failing to keep prices high is because its members are failing to keep to their output targets. In March the group’s leaders and Russia extended production cuts, vowing a reduction of 2.2m barrels a day (b/d), or 2% of global supply, until the end of June, on top of 3.7m b/d of previously agreed cuts for 2024. Yet the cartel is now overproducing so much that its daily output in 2024 is little changed from the last quarter of 2023. This will create tensions when members get together to decide their strategy at OPEC’s ministerial meeting on June 2nd. More

A top exchange-traded fund provider is betting on the long-term popularity of GLP-1 weight loss drugs.
Roundhill Investments’ GLP-1 & Weight Loss ETF (OZEM), which began trading last week, pairs leaders Eli Lilly and Novo Nordisk with players developing new treatments for weight loss and diabetes. CEO Dave Mazza said his firm is capitalizing on explosive growth potential in the industry.

“The ability to have active management to overweight companies that are actually in market producing the drugs and then go down the line to identify those that are in particular phases is powerful,” Mazza told CNBC’s “ETF Edge” last Monday.
Eli Lilly and Novo Nordisk each hold a roughly 20% weighting in the ETF, per Roundhill’s website as of Friday. The three next largest positions are Zealand Pharma, Amgen and Chugai Pharmaceutical, each of which have a weighting under 5%.
In the past year, Eli Lilly is up 90%, while Novo Nordisk has gained 68%, as of Friday’s market close. Mazza waived concerns that investors have missed out on the rally, noting the weight loss drug industry is still in its “early days.”
“The marketplace has plenty of room for growth with other companies coming in, whether they’re with more powerful drugs or with things that actually you don’t need to have an injectable.”
He also sees GLP-1 drugmakers following a similar trajectory to AI-linked stocks.

“It’s a little bit like thinking about Nvidia with AI. They just have a head start,” Mazza said. “[Eli Lilly and Novo Nordisk] pivoted to focus on diabetes and weight loss drugs a few years ago, were able to get in market and produce results that are remarkable.”
After last Tuesday’s launch, shares of Roundhill’s GLP-1 & Weight Loss ETF ended the week down by almost 2%.

Don’t miss these exclusives from CNBC PRO More