Finance

Soccer star David Beckham has signed his latest advertising deal with Alibaba’s international e-commerce platform AliExpress, the business unit said Monday.
The deal comes against the backdrop of China-based rivals PDD Holdings’ Temu and online fashion startup Shein’s rapid global expansion.
AliExpress has joined several Chinese companies in sponsoring the UEFA European soccer championship that kicks off in mid-June.
“AliExpress is helping fans get even closer to UEFA EURO 2024™ this summer, by offering them great prizes as the action takes place on the pitch,” Beckham said in his only statement in the press release.

Alibaba’s international e-commerce platform AliExpress is a UEFA Euro 2024 sponsor and has signed David Beckham as its global brand ambassador.
AliExpress

BEIJING — Soccer star David Beckham will promote Alibaba’s international e-commerce platform, AliExpress, in its biggest global brand ambassador partnership to date, the business unit announced Monday.
The deal comes against the backdrop of China-based rivals PDD Holdings’ Temu and online fashion startup Shein’s rapid global expansion, with the former also advertising at the Super Bowl to gain traction with U.S. customers.

AliExpress, which did not disclose how much it was paying Beckham to be its global brand ambassador, has joined several Chinese companies in sponsoring the UEFA European soccer championship that kicks off in mid-June.
“AliExpress is investing millions of Euros in discounts, deals and engagement during the games,” the company said in a statement, adding that planned promotions include a chance for AliExpress app users to win tickets to games.
“AliExpress is helping fans get even closer to UEFA EURO 2024™ this summer, by offering them great prizes as the action takes place on the pitch,” Beckham said in his only statement in the press release.
Beckham’s company, DRJB Holdings, said in its latest available filing it made 72.6 million pounds ($92.5 million) in revenue in 2022.

Alibaba’s international e-commerce business, which includes AliExpress, is called Alibaba International Digital Commerce Group.

The international unit’s sales surged by 45% year on year in the first three months of 2024 to 27.45 billion yuan ($3.79 billion). That contrasts with 4% growth in revenue during that time from China-focused Taobao and Tmall Group to 93.22 billion yuan, according to Alibaba.
However, the international business unit reported an increase in losses to 4.1 billion yuan, compared with 2.2 billion yuan a year earlier.
The company “made aggressive investments” in the Middle East and other emerging markets in the first three months of the year, Jiang Fan, co-chairman and CEO of the international unit, said in an earnings call earlier this month.
AliExpress said in 2022 it had spent about $7 million in South Korea to attract local consumers with lower product prices. Last year, AliExpress signed actor Don Lee as its first brand ambassador in South Korea.
Other China-based companies have also increased their efforts to expand overseas amid slowing growth at home.
Chinese sponsors of UEFA Euro 2024 include Alibaba-affiliate Alipay, electric car company BYD, home appliance brand Hisense and smartphone company Vivo.
Hisense became the first Chinese sponsor for the European championship in 2016. Three other Chinese businesses subsequently signed partnerships for the games in 2020. More

Baby-boomers were born between 1946 and 1964—and are the luckiest generation in history. Most of the cohort, which numbers 270m across the rich world, have not fought wars. Some got to see the Beatles live. They grew up during strong economic growth. Not all are rich, but in aggregate they have amassed great wealth, owing to a combination of falling interest rates, declining housebuilding and strong earnings. American baby-boomers, who make up 20% of the country’s population, own 52% of its net wealth, worth $76trn (see chart 1).Now the generation is moving into retirement, what are they going to do with their money? The question matters for more than just suppliers of cruises and golf clubs. Since they have deep pockets, boomers’ spending choices will exert a huge influence on global economic growth, inflation and interest rates. And it turns out boomers are remarkably stingy—not just in America but across the rich world. They are not spending their wealth, but trying to preserve or even increase it. The issue for the economy in the 2020s and 2030s will not be why boomers are spending so much, as many had anticipated. It will be why they are spending so little. More

More businesses are offering financial incentives to consumers who pay with cash rather than credit card.
Consumers may save 2% to 4% on their purchase by using cash. They’ll also often save with a debit card, experts said.
Businesses charge more for credit card purchases due to fees they incur per transaction.

Ryanjlane | E+ | Getty Images

Sometimes, it pays to pay with cash.  
More merchants are offering a lower price to customers who use cash rather than credit card for a purchase. That means opting for paper over plastic may save you money in some cases.

Just how much?
Typically, cash discounts run about 2% to 4% on purchases, though savings can be higher, experts said.
The share of cash payments with a discount is still low — in fact, only about 3% of all cash payments in 2022, according to data from the Federal Reserve Bank of Atlanta.
However, that share is up more than 60% from 2015, when 1.8% of all cash transactions had a discount, Atlanta Fed data shows. While not yet the norm, cash incentives are likely to become more widespread, experts said.

Meanwhile, other businesses add a surcharge when customers use credit cards for purchases. In such cases, paying with cash would also yield savings.

Nearly 7 in 10 cardholders said a business has charged them extra for paying with a credit card, according to a recent LendingTree survey.
The trend comes as consumers have steadily shifted away from using cash for purchases: Consumers made 18% of payments with cash in 2022, down from 31% in 2016, according to the Federal Reserve. Meanwhile, credit cards’ share grew to 31% from 18% during that period.
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“Sometimes, it can make sense to just go ahead and pay cash,” said Matt Schulz, chief credit analyst at LendingTree.
That may be the case even after accounting for credit card rewards, Schulz said. The largest general cash-back return on most credit cards is 2%, for example — a percentage often exceeded by cash discounts, he said.
“If the merchant establishes a discount that’s high enough, even if you have the best rewards card in the world you may still end up paying less if you use cash,” said Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group.

Why businesses give cash incentives

Businesses that offer a break on cash purchases generally do so to reduce costs they incur for credit card transactions.
Credit card-processing companies like Visa and Mastercard generally charge merchants 2% to 4% for each transaction, according to the National Retail Federation. These swipe fees are the second-highest cost for most businesses, behind labor costs, the trade group said.
“The merchant is looking at your dollar and getting 98 cents in the end because you’ve chosen to use a card,” Rust said.

Businesses can take two routes to save money: offering a discount for cash purchases (thereby sidestepping those card fees), or putting a surcharge on credit card transactions to offset those fees.
Either way, such practices may yield lower prices for cash users.
Surcharges aren’t legal in all states, though.
As of May 2023, Connecticut and Massachusetts had outlawed surcharging, while Colorado and Oklahoma limited the maximum surcharge to 2%, according to the North Carolina Restaurant and Lodging Association.
Visa also capped surcharges at 3% in April 2023, down from 4%, the trade group said.
“It’s really important to understand what the cost of that surcharge is going to be, if there is one, before you go ahead and buy,” Schulz said.

When to pay with cash

Consumers are often swayed by cash incentives, even “significantly likely” to switch to cash payments “specifically because of cash discounts offered,” according to research by Joanna Stavins, a senior economist and policy advisor at the Federal Reserve Bank of Boston.
When a cash discount is offered, the odds increase by 19.2% that a consumer who prefers noncash payments will instead opt to pay with cash, Stavins wrote in a 2018 paper. This research controls for transaction value and merchant type.
In addition, small, independent businesses are more likely to offer cash discounts than big national chains, Consumer Federation of America’s Rust said.

Sometimes, it can make sense to just go ahead and pay cash.

Matt Schulz
chief credit analyst at LendingTree

Gas stations have long offered cash incentives to customers. But a rising number are now doing so, and “some major retailers are starting to implement the ability to do this in the future,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
The average cash discount has been about 5 cents to 10 cents per gallon, De Haan said.
Meanwhile, more stations are also offering their own payment platform — like branded debit and credit cards — that yield even more savings than cash, he added.
Discounts are also “very prevalent” when paying for health care, said Carolyn McClanahan, a certified financial planner and physician based in Jacksonville, Florida.
McClanahan is also a member of the CNBC Financial Advisor Council.
Some big-ticket spending — like tax bills and college tuition — is also generally best accomplished with cash, said Schulz. The IRS and many universities pass on payment-processing costs to the consumer. (In these cases, that might mean writing a check.)
“There are certainly some bigger times when you should probably not use credit cards because of the fees involved,” he said.

Credit cards sometimes have advantages

There are times when credit cards have distinct advantages to cash, Rust said.
For example, unlike cash, credit cards carry certain protections related to fraud and product returns, Schulz said.
That’s why using a card may make more sense — even if there are fees involved — if consumers are first-time shoppers at a particular store, are buying something they may want to return in the future or if purchasing something fragile they’re having delivered, he added.
Additionally, a credit card may be better for those who want to more closely track their spending, or just generally prefer the ease and convenience of using a card, Schulz said.
However, consumers who have trouble paying off their credit card bills in full and on time each month may be better served via another payment method to avoid racking up interest charges, especially as those rates are near record highs.
There’s also a workaround to both cash and credit cards: debit cards. Merchants generally can’t add a surcharge to debit card transactions.
“By and large, debit cards can be a better and cheaper choice in instances where there’s a credit card surcharge,” Schulz said.

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Day passes at hotels and resorts offer guests access to amenities without the cost of reserving a room.
ResortPass holds 95% share of the day-guest market, according to the company, and has partnered with more than 1,300 luxury hotels, including the Waldorf-Astoria, JW Marriott and Fontainebleau.

Wellness travel can be enjoyed with a loved one, the entire family, or even solo.
Getty Images

Avid traveler Lora Bowler is cutting back on vacation spending. That doesn’t mean she’s skipping the resort.
The New York resident said she spent more in 2023 than she had expected to, including on travel, and is now reining in her expenses. She uses travel hacks and benefits to cut some of the cost, and she’s part of a growing number of people turning to hotel day passes as a cheaper option for relaxation.

“It’s like a neat way to escape and feel like you’re at a five-star hotel,” Bowler said, “but you can’t afford to stay.”
Day passes at hotels and resorts offer guests access to amenities without the cost of reserving a room. Bowler said she’s booked daybeds and poolside services and even found a pass that offered a room where her husband could work from his laptop.
Hotels and third-party partners are making day passes more readily available to help bridge the gap between travel-minded consumers and luxury prices.
A typical luxury hotel room in the U.S. between Jan. 1 and April 6 cost roughly $400 per night, according to CoStar, a global provider of real estate data, analytics and news. Those rates are about 1% higher than the same period a year ago.
Luxury hotel room rates in July are expected to be 85% higher than the same month in 2019, before the Covid pandemic, according to the luxury travel company Virtuoso.

“People are back to thinking about travel budgets,” said Hayley Berg, lead economist with travel site Hopper. “They’re prioritizing expenditure on vacations, more so than consumer goods.”
In a survey conducted in July 2023 by Booking.com, more than 60% of respondents said their cost of living will determine their travel planning in 2024, while slightly more than half said they were likely to pay for accommodation upgrades.
A majority of U.S. travelers said they would be willing to pay for day passes to use the amenities in a five-star hotel without staying there, according to a Booking.com press release about the survey. The survey included nearly 28,000 adults from 33 countries who said they planned to travel over the next 12-24 months.
Consumers who indulged in travel splurges after Covid restrictions lifted fueled the “revenge travel” trend, Berg said, driving up demand for lavish accommodations. Now, she said, that trend “has very much run out” and many travelers are working with tighter budgets.
Berg said day passes “give people exactly what they want” and provide a separate source of revenue for hotels.
“Hotels get an incremental revenue stream by providing exactly what they already have,” she said.
One of those hotels is the Virgin Hotels New York City, in Manhattan’s Koreatown neighborhood. On May 8 the hotel opened its rooftop pool for the second time, with the option for day guests to use the amenity.
The pool, with cerulean blue tiles flanked by black-and-white lounge chairs, offers guests views of the Empire State Building and city skyline.
Customers can reserve a pool lounge chair or upgrade to a cabana and invite up to four other people. The cabana includes complimentary services and refreshments such as wine and fruit. Day-pass users at the pool club can also get their own personalized server, depending on their selections. A day pass for the pool club starts at $130.
“Everybody needs a little bit of escape,” said Sarah Payton, the hotel’s head of partnerships and programming.
In May 2023 the hotel partnered with ResortPass, a site that provides day-pass access at luxury hotels, resorts and spas, often at a discounted rate.
ResortPass, launched in 2016, holds 95% share of the day-guest market, according to the company, and has partnered with more than 1,300 luxury hotels, including the Waldorf-Astoria, JW Marriott and Fontainebleau.
The day-guest platform has served more than 3 million users and has rolled out day-pass access in more than 250 cities, the company said, at prices as low as $25.
“What we are really able to do is enable people a more local way of getting away without going away,” ResortPass CEO Michael Wolf said. “I think it compliments other types of travel, and serves potentially in lieu of it.”
The average ResortPass customer purchases all-day access at a cost of about $165, the company said. Customers who buy day passes through ResortPass often splurge on poolside or other hotel amenities more than overnight guests do, Wolf said.
“Our guests on average spent over $250 on the premise of the property, and often quite a bit more than that,” he said.
Wolf said ResortPass is currently working on a membership-like program for customers who use day passes frequently, with an announcement expected later in 2024. More

Many employers that sponsor 401(k) plans have adopted “automatic escalation.”
The mechanism automatically raises workers’ savings rate over time.
401(k) investors should ideally save at least 15% of their annual pay, according to one financial advisor.

Aleksandarnakic | E+ | Getty Images

You may be saving more money for retirement and not even know it.
An increasing share of employers are automating how people save in their company 401(k) plans, in a bid to overcome the inertia that often keeps us from building a nest egg.

“Automatic escalation” — or auto-escalation, for short — is one of those popular mechanisms.
It automatically raises workers’ savings rate each year, often by 1 percentage point at a time up to a cap. The intent is to help boost savings when workers might not take action on their own.

However, the amount of additional money coming out of each paycheck may be indiscernible to many people.
“I have a bet they don’t realize it,” said Ellen Lander, founder of Renaissance Benefit Advisors Group, based in Pearl River, New York.
However, it’s generally a good thing.

In an ideal world, workers would be saving at least 15% of their annual pay in a 401(k) plan, Lander said. This includes both their own contributions and employer contributions like a company match. The ideal rate may fluctuate depending on factors like age and outside savings.
“Philosophically, I think auto-escalation makes perfect sense,” Lander said. “We want people to save as much as they can.”

Automated 401(k) savings is more widespread

Auto-escalation has become more widespread alongside automatic enrollment, which is when employers divert a portion of workers’ paychecks into a 401(k) if they don’t sign up voluntarily.
About 64% of companies with a 401(k) plan automatically enrolled workers in 2022, according to an annual survey by the Plan Sponsor Council of America, a trade group.
Of those companies, 78% also automatically increased workers’ savings, up from 65% in 2013, according to the poll.
Most, or 84%, of these 401(k) plans raise workers’ savings rate by 1 percentage point a year.
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Here’s a basic illustration of how it works: Let’s say a worker earns $75,000 a year, contributes 6% of their annual salary to a 401(k), and is paid twice a month. This person saves $4,500 a year, or $187.50 per paycheck.
Raising the savings rate to 7% brings annual savings to $5,250, or $218.75 per pay cycle — amounting to just $31.25 more per paycheck.
(This example doesn’t account for additional financial factors like taxes or annual pay increases.)
Employees can opt out of the arrangement. Employers are also obligated to send a notice to workers communicating that they are being automatically enrolled into a 401(k) and their savings rate will be increased, but such communiques may go unnoticed.

Many companies are hesitant to add auto-escalation altogether because they fear it may be “onerous” and place too much of a financial burden on some workers, Lander said.
Among 401(k) plans that use automatic enrollment, just 40% automatically escalate savings for all workers, according to data from the Plan Sponsor Council of America. About 12% do so only for investors who are “under-contributing.” And 26% make escalation a voluntary choice for workers, while d 22% don’t offer it at all.
The vast majority of 401(k) plans don’t automatically raise savings beyond a cap, and nearly two-thirds, or 63%, limit those automated worker contributions to 10% or less of annual pay.
Of course, reaching the cap doesn’t necessarily mean workers are saving enough. Workers can voluntarily set their savings rate higher.

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Michael Arougheti, Ares Management Corporation Co-Founder, CEO & President
Adam Jeffery | CNBC

The explosion of private credit has been met with a whole host of concerns, but among the louder ones more recently is that the industry has not experienced a downturn at scale. And therefore, what does that mean for borrowers when there’s some kind of crisis?
When asked about the migration of assets to the non-bank sector during JPMorgan’s Investor Day earlier this week, Chairman and CEO Jamie Dimon said, “we’ll compete. We’re going to be fine.” But he added that the “question they should be asking is, what does it mean for the United States of America?” 

“A lot of those folks who took private-credit loans will be stranded when [obscenity] hits the fan,” Dimon said. “Banks tend to work with the borrower and the middle-market loan in the crisis…in the mark-to-market world of private credit, they have to, as a fiduciary, book it at par.” 
In other words, he said, “private credit hasn’t dealt with high interest rates, hasn’t dealt with the recession, and it hasn’t dealt with high spreads.”
We don’t know how those workouts will…work. 
The next day, the CEO of one of the largest private-credit firms defended the industry and how it will act in times of stress. When asked on CNBC about Dimon’s recent comments, Ares Management CEO Michael Arougheti responded: “False.” 
“We’ve been investing in the private markets for 30 years; A loan is a loan whether it’s held on a bank balance sheet or held in a private-credit fund,” Arougheti said. “[Ares has] invested $150 billion into the private-credit market since we founded the firm, and we had a loss rate of one basis point. So everything that we’ve seen over the last 30 years would indicate that the risk people are trying to argue exists in our market just isn’t true.” 

Stock chart icon

Ares Management (ARES), 1 year

Ares’ Executive Chairman Tony Ressler, sitting next to Arougheti in the CNBC interview, said the growth in private credit will “actually reduce systemic risk.” 
“These assets are going onto the balance sheets of companies that are not highly levered and that do not finance themselves with short-term liabilities or customer deposits,” Ressler said. 

Private credit default rates

In January, the Federal Reserve looked at default rates in private credit and how they compare with loans made by traditional banks (leveraged loans and high-yield bonds). Citing KBRA DLD data, the Fed showed, “despite seniority in debt structure, private-credit loans have relatively low recovery rate upon default (or equivalently, exhibit high loss given default) compared to syndicated loans or HY bonds.”
We obtained updated figures on Thursday from KBRA DLD, which showed more of a mixed picture when it comes to implied recoveries. The average post-default value of a direct loan was about 53.1 percent, below that of syndicated loans, which were 57.5 percent but higher than high-yield bonds, which were 46.3 percent
The Fed attributes some of that gap to private credit exposure being more tilted to sectors with lower collateralizable or tangible assets, like software, financial services or healthcare services. 
But the quicker private credit grows, the more interconnected it becomes with the traditional banking space. JPMorgan executives at Investor Day said the firm is the largest financier of private-credit portfolios, and it already has dedicated capital on the balance sheet that it uses in a direct-loan format for corporate borrowers. The firm is also developing a co-lending program to boost the amount of capital it can deploy in this space. 
So if the eventual downturn does manifest in the economy, it’s likely that you-know-what will hit the fan for everyone. Some borrowers will feel the hit more than others.  More

Nvidia shares surged to a record high Thursday after the company beat earnings and revenue estimates for the fiscal first quarter.
The chipmaker also announced a 10-for-1 stock split on Wednesday in its report.
Wall Street analysts have since grown more bullish following the results.

Nvidia CEO Jensen Huang delivers a keynote address during the Nvidia GTC Artificial Intelligence Conference at SAP Center on March 18, 2024 in San Jose, California. 
Justin Sullivan | Getty Images

Nvidia shares jumped more than 9% on Thursday after the company on Wednesday reported earnings that topped Wall Street estimates and showed that there’s still ferocious demand for its artificial intelligence chips. The company’s data center revenue grew by a whopping 427% during the quarter.
Shares closed above $1,000 for the first time, reaching a high of $1,037.99. Its previous high of $953.86 was set on May 21.

First-quarter revenue came in higher than expected at $26.04 billion compared with the LSEG estimate of $24.65 billion. And the demand isn’t wavering.
The company issued strong guidance, saying it expects $28 billion in revenue for the current quarter, beating the LSEG estimate of $26.61 billion.
Despite some analysts fearing an “air pocket,” others have grown even more bullish on the company since its results. Bernstein’s Stacy Rasgon increased the firm’s price target to $1,300, writing in a note to investors that the narrative surrounding the company is “clearly nowhere near its end, or likely nowhere near its peak.” He wrote that shares seem inexpensive.
Jefferies raised its target on the stock to $1,350 due to a strong ramp for its new AI graphics processors called Blackwell and anticipation of an acceleration in “magnitude of beats” later this year when the platform launches.
Nvidia posted net income of $14.88 billion, or $5.98 per share, a dramatic pop from the $2.04 billion, or 82 cents per share, it reported in the year-ago quarter.
Nvidia on Wednesday announced a 10-for-1 stock split, with shares set to begin trading on a split-adjusted basis at market open on June 10. More

Norfolk Southern has agreed to pay $310 million to settle charges over the East Palestine, Ohio, train derailment that occurred in February 2023, with the majority of that going to cleanup costs.
The company will pay a $15 million fine for alleged violations of the Clean Water Act as part of the federal settlement.
Norfolk Southern is estimating it will spend $1.7 billion in total costs associated with the incident.

Officials continue to conduct operation and inspect the area after the train derailment in East Palestine, Ohio, United States on February 17, 2023. 
EPA | Anadolu | Getty Images

Norfolk Southern has agreed to pay $310 million to settle charges over a toxic train derailment in East Palestine, Ohio, in February 2023, the company announced on Thursday.
The majority of the settlement is an estimated $235 million to cover all past and future cleanup costs. Per the agreement, the company will also pay a $15 million civil penalty to resolve alleged violations of the Clean Water Act.

The agreement resolves a lawsuit filed in March 2023 by the EPA and the U.S. Department of Justice against Norfolk Southern for allegedly violating the Clean Water Act after the derailment of a freight train carrying hazardous substances ignited a dayslong fire that forced local residents to evacuate and contaminated the soil and waterways.
“We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community’s needs and our mission to be the gold standard of safety in the rail industry,” Alan Shaw, president and CEO of Norfolk Southern, said in a statement. “We will continue keeping our promises and are invested in the community’s future for the long-haul.”

Smoke rises from a derailed cargo train in East Palestine, Ohio, on February 4, 2023.
Dustin Franz | Afp | Getty Images

The settlement, if approved by the U.S. District Court for the Northern District of Ohio, would require Norfolk Southern to not only “take measures to improve rail safety” but also “pay for health monitoring and mental health services for the surrounding communities,” among other actions, the EPA said Thursday. That includes paying an estimated $7 million for remediation projects to curb pre-existing pollution and boost the region’s water quality.
“No community should have to experience the trauma inflicted upon the residents of East Palestine,” said EPA Administrator Michael Regan in a statement. “Today’s enforcement action delivers on this commitment, ensures the cleanup is paid for by the company, and helps prevent another disaster like this from happening again.”

US President Joe Biden receives an operational briefing from officials on the continuing response and recovery efforts at the site of a train derailment which spilled hazardous chemicals a year ago in East Palestine, Ohio on February 16, 2024. 
Mandel Ngan | Afp | Getty Images

Norfolk Southern is estimated to have spent approximately $1.7 billion in total costs associated with the incident. The company said Thursday’s settlement won’t add to that total figure because it had already set aside money and had been anticipating the cost.

The entire cleanup effort is currently anticipated to conclude on or around November 2024, but that “may change,” according to EPA spokesman Remmington Belford.
The resolution with the EPA comes one month after the company agreed to pay $600 million in a class-action lawsuit settlement related to the 2023 derailment. More