Finance

Retail sales for November grew by 3.9% from a year ago, below the 4.6% year-on-year rise forecast by a Reuters poll.
Industrial production grew by 3.8% in November from a year ago, topping the poll’s 3.6% expectation.

A customer buys zodiac decorations for the Year of the Tiger at a market in Zhangjiagang city, East China’s Jiangsu province, Dec. 10, 2021.
Shi Bairong | Future Publishing | Getty Images

BEIJING — China’s retail sales missed expectations in November, while industrial production beat, according to data from the National Bureau of Statistics out Wednesday.
Retail sales for November grew by 3.9% from a year ago, below the 4.6% year-on-year rise forecast by a Reuters poll.

The miss came as auto sales have fallen in recent months, and despite China’s big Singles Day online shopping festival in early November.
Online sales of physical goods rose by a slower 13.2% pace in November compared to October’s 14.6%, with Singles Day spending offset by inflation, Bruce Pang, head of macro and strategy research at China Renaissance, said in a note.
“Headwinds and uncertainties are clouding the recovery pace of China’s economy,” he said, adding he expects Beijing to increase its support for growth in the coming months.

It remains to be seen if policy supports can stabilize the economy in the coming months.

Zhiwei Zhang
chief economist, Pinpoint Asset Management

Industrial production grew by 3.8% in November from a year ago, topping the poll’s 3.6% expectation.
Fixed asset investment for the year through November grew by 5.2% from the same period a year ago, slower than the poll’s forecast 5.4% gain.

Investment in manufacturing and real estate development grew for the first 11 months of the year from a year ago, but at a slower pace than the January to October period, the data showed.
Investment in manufacturing grew 13.7% in the January to November period, compared to a 14.2% increase in the first 10 months of 2021. Real estate investment grew by 6% in the January to November period, versus 7.2% growth in the first 10 months of this year.
“The economy remained quite weak in November,” Zhiwei Zhang, chief economist, Pinpoint Asset Management, said in a note. He attributed the further weakening in domestic consumption to China’s “zero-tolerance” policy to control Covid-19, a slowdown in the property sector and tight fiscal policy.

“Fiscal policy is about to turn supportive, but the zero tolerance policy will likely stay unchanged, and the property outlook is still unclear. It remains to be seen if policy supports can stabilize the economy in the coming months,” he said.
China’s economy has faced pressure from a slowdown in the property market as Beijing seeks to curb developers’ reliance on debt. Real estate, along with related industries, accounts for about a quarter of China’s gross domestic product, according to Moody’s.
New home prices fell by 0.3% month-on-month in November, according to Reuters’ calculations of official data released Wednesday. It marked a pickup from the 0.2% month-on-month drop in October, and the greatest monthly decline since February 2015, according to Reuters.

Unemployment edges higher

Intermittent travel restrictions to control pockets of Covid cases have also limited tourist and business activity, while consumer spending has been subdued.
Income expectations are a major factor for consumer spending. Pang noted that the official purchasing managers’ index “suggests ongoing job market pressure” in manufacturing and services, while hiring in construction sector has expanded more slowly.
The urban unemployment rate ticked up to 5% in November from 4.9% in October, data from the statistics bureau showed. The jobless rate for those from 16 to 24 years old remained a high 14.3%.

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Exports have remained a bright spot for China’s economy, and rose 22% in November from a year ago.
Chinese authorities have refrained from pouring out stimulus into the economy, and have taken more reserved actions amid rising inflation and tighter monetary policy in other countries.
However, a People’s Bank of China cut to the reserve requirement ratio for most banks took effect on Wednesday.
The move marked the second such reduction this year for the amount of cash banks need to have on reserve. The 0.5 percentage point cut to a weighted average of 8.4% for financial institutions frees up 1.2 trillion yuan ($187.5 million), according to the central bank.
— Correction: This article has been updated to remove an inaccurate reference to the historical pace of growth in China’s retail sales.

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Investor Peter Boockvar is slamming the Federal Reserve over surging inflation that’s driving up the cost of essential, big-ticket items.
As Fed policy makers gather for their two-day meeting on interest rates, Boockvar warnsthere’s little they can do to cool prices.

“Monetary policy mostly and pretty much predominantly influences the demand side of the economy, particularly the interest rate sensitive areas of the economy,” the chief investment officer at Bleakley Advisory Group told CNBC’s “Trading Nation” on Tuesday.
His warning extends particularly to housing and autos.
“A home is up 20% year to year. If you’re looking to rent an apartment or a house, those prices are rising 18%,” said Boockvar. “Car prices are at record highs partly because of supply, but also cheap money influencing demand.”
The latest economic data out Tuesday confirms inflation is booming. The producer price index, which tracks wholesale prices, jumped to its fastest pace on record in November.
Boockvar, who went on inflation watch in mid-2020, sees little relief ahead.

‘Mistake was not doing it earlier’

“The Fed needs to pull back,” the CNBC contributor said. “The mistake was not doing it earlier. So, now they’re just playing catchup.”
Boockvar also sounded the alarm on the Fed’s policy impact on the housing market during an August interview on “Trading Nation.” He warned first-time homebuyers paying down payments of 5% or less in this environment were most vulnerable to dramatic losses.
His concerns now stretch into corporate America as inflation takes a toll on profit margins.
“That’s really the key. Companies, at least in the third quarter, had tremendous success… in passing on these higher costs,” he said. “The question is how much more can they get away with that in raising prices to offset those costs, particularly as labor costs.”
Boockvar suggests that balance is a big wildcard for 2022. If multiples and earnings both decline, he said, it would pose a challenge for stocks.
He’s seeking protection in groups that typically prosper as prices rise.
“I’m still bullish on some commodities. Holding silver stocks, oil and gas stocks. Fertilizer stocks is a bull on agriculture,” Boockvar said. “There are still plenty of low multiple stocks in the U.S. We are so used to focusing solely on tech, and there are other parts of the market that have been very much ignored.”
Disclosure: Boockvar owns gold, silver, energy and agriculture stocks.
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A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, December 8, 2021.
Brendan McDermid | Reuters

U.S. stock futures were steady in overnight trading on Tuesday as investors readied for Wednesday’s highly anticipated Federal Reserve decision.
Dow futures rose 15 points. S&P 500 futures were flat and Nasdaq 100 futures rose 0.03%.

On Tuesday, the major averages slipped, exacerbated by selling in software names like Microsoft and Adobe. The Dow Jones Industrial Average lost 106 points. The S&P 500 fell 0.75%.
The technology-focused Nasdaq Composite was the relative underperformer, dipping 1.1% as Facebook-parent Meta Platforms, Amazon, Apple, Netflix and Google-parent Alphabet all closed lower.
Also hurting sentiment Tuesday was the hotter-than-expected inflation reading for November’s producer price index showing a year-over-year increase of 9.6%, the fastest pace on record. This was above the 9.2% expected by economists, according to Dow Jones. The index rose 0.8% month over month, above the 0.5% expected.
The Fed will conclude its two-day policy meeting on Wednesday and the public will hear from central bank Chair Jerome Powell at a 2:30 p.m. ET press conference.
The Fed is grappling with the highest levels of inflation in 39 years and the central bank is widely expected to announce an acceleration of the tapering of its bond-buying program, which was put in place during the pandemic to prop up the economy.

This sets the stage for a dramatic policy shift that will clear the way for a first interest rate hike next year.
A CNBC Fed Survey predicts the Fed will double the pace of the taper to $30 billion at its December meeting, which would roughly end the $120 billion in monthly asset purchases by March. The central bank will then hike rates three times in each of the next two years, starting in June 2022, the survey respondents predict.
“While the chairman is not likely to suggest any specific timeframe for when the funds rate will begin to be lifted, he probably will confirm that some members do want to move more quickly than previously announced in raising interest rates,” said Jim Paulsen, chief investment strategist for Leuthold Group.
“I would not expect the Fed to say much that is not already anticipated by the financial markets,” Paulsen added. “Some of the recent stock market volatility may lessen after this two-day meeting and its press conference is finally concluded.”
While the Fed meeting is in focus, investors are also monitoring the new Covid variant omicron. The World Health Organization on Tuesday warned the new Covid-19 omicron variant is spreading faster than any previous strain, and is likely in most countries of the world.
November’s retail sales data is slated to release at 8:30 a.m. ET on Wednesday. Economists polled by Dow Jones are expecting that retail sales rose 0.8% in November, compared to October’s growth of 1.7%, according to the Commerce Department.

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Dogecoin skyrocketed more than 20% on Tuesday after Elon Musk said Tesla would accept it as payment for some merchandise.
Musk has frequently talked up dogecoin, calling it his favorite digital coin and mentioning it in an appearance on “Saturday Night Live.”
Dogecoin hit a record-high price above 74 cents in May but has since plunged sharply.

Remember dogecoin?
The meme-inspired cryptocurrency skyrocketed as much as 23% on Tuesday after Elon Musk said Tesla would accept dogecoin as payment for some of its merchandise. It last traded 18.9% higher.

“Tesla will make some merch buyable with Doge & see how it goes,” the electric auto maker’s CEO said in a tweet.
Musk has frequently talked up dogecoin, calling it his favorite digital coin and mentioning it in an appearance on NBC’s “Saturday Night Live.”
Dogecoin was initially started as a joke by its creators Billy Markus and Jackson Palmer in 2013. It takes its branding from the Japanese shiba inu dog, which inspired the original “doge” meme.
Tweets from Musk and surging interest from a wave of amateur investors fueled a speculative frenzy in the cryptocurrency earlier this year, driving its price higher.
Dogecoin went from being worth just a fraction of a penny at the start of the year to notching a record-high price above 74 cents in May. It has since plummeted sharply — at just 20 cents a coin, the token is down more than 70% from its all-time high.

Some crypto investors say dogecoin is a phenomenon similar to “meme stocks” like GameStop and AMC and shouldn’t be taken seriously.
“I’m actually not convinced … that dogecoin is good for the crypto market,” Brad Garlinghouse, CEO of crypto firm Ripple, told CNBC last month.
Dogecoin recently found a rival in shiba inu, a so-called meme token that bills itself as a “dogecoin killer.” Shiba inu is currently the 13th-biggest coin by market value, having briefly surpassed dogecoin at one point.

Disclosure: NBCUniversal is the parent company of CNBC and NBC, which broadcasts “Saturday Night Live.”

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Beyond Meat “Beyond Burger” patties made from plant-based substitutes for meat products sit on a shelf for sale in New York City.
Angela Weiss | AFP | Getty Images

Check out the companies making headlines in midday trading.
GameStop, AMC Entertainment — Meme stocks rebounded from a steep sell-off in the previous session. GameStop jumped nearly 8%% after losing nearly 14% on Monday. AMC reversed 5.4% higher after dropping as much as 10% earlier in the day. The movie theater operator’s stock fell more than 15% in the prior session. These speculative trades were hit hard Monday amid a broad market sell-off, as investors dumped risky names after a head-turning year.

Beyond Meat — Shares of the alternative meat stock jumped 9.3% after Piper Sandler upgraded Beyond Meat to neutral from underweight. The investment firm said in a note that a potential product launch in McDonald’s in early 2022 could boost Beyond’s results.
Tesla — Shares of the electric vehicle company fell 0.8% after CEO Elon Musk sold another $906 million of his shares on Monday. This brings the total amount of shares he’s sold to 11.9 million as of Tuesday, according to InsiderScore/Verity.
Terminix — The pest control company saw its stock soar 18% after it agreed to be acquired by British rival Rentokil as it seeks to push further into the U.S. market, the largest in the world for pest control. The deal values Terminix at $6.7 billion.
Dell Technologies — Shares of Dell Technologies slipped 2% after Evercore ISI downgraded the stock to in line from outperform. The Wall Street firm said after a 60% rally in 2021, upside is likely to be more muted.
Neogen — Shares of Neogen rallied 8.2% after the company announced a deal to combine with 3M’s food safety business.

Ralph Lauren, Capri Holdings — Ralph Lauren shares retreated 2.7 % after Goldman Sachs double-downgraded the stock to a sell rating from a buy rating. The firm said Ralph Lauren’s brand health is fading and sees limited growth potential ahead. Meanwhile, Capri shares rose 1.7% after Goldman upgraded the Michael Kors-parent to a buy rating from neutral on margin improvements.
— CNBC’s Jesse Pound, Tanaya Macheel, Yun Li and Maggie Fitzgerald contributed reporting

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The American Rescue Plan Act waived federal tax on up to $10,200 of 2020 unemployment benefits per person. President Joe Biden signed the pandemic relief law in March.
The IRS has identified 16 million people to date who may qualify for an associated tax refund or other benefit. The agency had sent more than 11.7 million refunds worth $14.4 billion as of Nov. 1.
The IRS plans to send another tranche by the end of the year.

Tetra Images | Getty Images

Thousands of taxpayers may still be waiting for a tax refund on unemployment benefits collected during the Covid pandemic, as the IRS grapples with a backlog of tax returns.
The American Rescue Plan Act, a pandemic relief law, waived federal tax on up to $10,200 of unemployment benefits a person collected in 2020, a year in which the unemployment rate climbed higher than any time since the Great Depression.

However, many people eligible for the tax break had filed their annual tax returns before President Joe Biden signed the legislation on March 11.

That means they overpaid their federal tax bill and may qualify for a refund. (In other cases, an overpayment is applied to unpaid taxes and debts.)
To date, the IRS has identified more than 16 million total people who may qualify for the tax break. The agency has sent over 11.7 million refunds worth $14.4 billion, according to the most recent data.
Payments started in May; the IRS had indicated they’d continue into the summer and fall. It’s unclear how many people are still waiting, though. (Not all the people the IRS identified as potential candidates will necessarily qualify.)

The IRS plans to issue another tranche of refunds before the end of the year. The agency sent about 430,000 refunds totaling more than $510 million in the last batch, issued around Nov. 1. The average refund was about $1,189.

An IRS spokesperson didn’t specify how many payments the agency is releasing or when it’s doing so.

Complex returns

Delays have largely affected taxpayers with complex returns. They may include, for example, a married couple in which each spouse received benefits in 2020.
A couple’s tax calculation can be more complicated than it is for a single taxpayer. Each spouse is entitled to exclude up to $10,200 of benefits from federal tax. But that doesn’t mean the couple, as a tax unit, always gets tax waived on double the amount ($20,400).
More from Personal Finance:Monthly child tax credit payments may expire at the end of the yearInflation is hitting the 3 big areas of household budgetsWhy unemployment claims are at their lowest in decades
Let’s say one spouse collected $5,000 in unemployment benefits in 2020, and the other got $25,000. This couple would exclude $15,200 of benefits from tax (instead of the full $20,400). That’s because the latter spouse can only exclude up to $10,200 of benefits.
“The review of returns and processing corrections is nearly complete as the IRS already reviewed the simplest returns and is now concentrating on more complex returns,” according to an agency statement in November.

Not all taxpayers qualify for the unemployment tax break. For example, they’re not eligible if their modified adjusted gross income (which doesn’t include unemployment compensation) was $150,000 or more.
Congress hasn’t passed legislation offering a tax break on benefits collected in 2021.  

IRS backlog

The IRS is contending with a backlog of individual tax returns. The bureau had 6.7 million unprocessed individual returns as of Dec. 4.
The IRS has had a busy year (implementing new rules around stimulus checks, unemployment compensation and monthly payments of the enhanced child tax credit, for example) following one in which the pandemic upended its in-person operations. It has also been contending with an elevated rate of identity fraud.

Most unprocessed returns include those with errors or that require “special handling” from an IRS employee. In these cases, it’s taking the IRS more than the typical 21-day time frame to issue related refunds, in some instances stretching to between 90 days and 120 days.
The number of returns requiring special handling hit a historical high of 9.8 million on May 1 this year; the agency had whittled that down to 61,000 by Dec. 4.
“We’re working hard to get through the backlog,” the agency said. “Please don’t file a second tax return or contact the IRS about the status of your return.”
An IRS website has answers to some frequently asked questions about tax refunds.

Amended return

Most taxpayers will receive their unemployment refunds automatically, via direct deposit or paper check. They don’t need to file an amended tax return.
There are some exceptions, though.
For example, excluding up to $10,200 of unemployment compensation from one’s income may make some taxpayers eligible for a tax credit or deduction that they didn’t claim on their original return. In this instance, taxpayers would need to file an amended tax return to claim that new credit or deduction.

(However, this isn’t the case with all credits and deductions, such as the Recovery Rebate Credit, Premium Tax Credit, or Earned Income Tax Credit with no qualifying children; the IRS will calculate and send payments automatically in these cases. The IRS is also sending notices to some taxpayers who may now qualify for the child tax credit; taxpayers who respond to the notice don’t have to file an amended return.)
Taxpayers can consult this IRS website for questions related to the unemployment tax break.

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Tesla CEO Elon Musk sold another 934,091 shares of his electric car company, which are worth around $906.49 million, according to financial filings out late Monday.
Musk also exercised options to buy 2.134 million shares of Tesla at the strike price of $6.24 per share granted to him via a 2012 compensation package.
Musk, who is the wealthiest person in the world and who was just named Time magazine’s 2021 Person of the Year, still has millions of stock options that he needs to exercise by August 2022.

Maja Hitij | Getty Images News | Getty Images

SpaceX and Tesla CEO Elon Musk sold another 934,091 shares of his electric car company, which are worth around $906.49 million, according to a pair of financial filings with the Securities and Exchange Commission published late Monday.
He also exercised options to buy 2.13 million shares at the strike price of $6.24 per share granted to him via a 2012 compensation package.

Shares of Tesla closed down 5% at $966.41 on Monday.
The latest insider transactions by the Tesla chief and centibillionaire were part of a “Rule 10b5-1” trading plan dated Sept. 14, the filings said. This type of plan allows company insiders to execute trades in their own company’s stock for a set, future date.
Musk, who is the wealthiest person in the world and who was just named Time magazine’s 2021 Person of the Year, still has millions of stock options that he needs to exercise by August 2022. He revealed at the 2021 Code Conference on Sept. 28 that he would likely sell a large chunk of stock in the fourth quarter. 
Ever the showman, on Nov. 6, Musk asked his legions of Twitter followers to vote on whether or not he should sell a 10% chunk of his holdings in the electric car and solar business. In his Twitter poll, Musk wrote: “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?”

He gave his tens of millions of followers the option of a “Yes” or “No” vote, and said he would abide by the results, whichever way the poll went. Twitter’s poll results display said that about 3.5 million responded, with 57.9% voting “Yes.”

After Musk’s poll, Senate Finance Committee Chairman Ron Wyden, D-Ore. wrote a tweet of his own. “Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll,” he wrote. “It’s time for the Billionaires Income Tax.”
Musk, who is against a billionaire’s tax and President Joe Biden’s Build Back Better spending, responded to Wyden with a crude retort.
More recently, Musk said at The Wall Street Journal’s CEO Council Summit, that “If you zeroed out all the billionaires, you still wouldn’t solve the deficit” in the United States. He also cursed about the “anti-billionaire” sentiment in the U.S.
Musk still needs to sell about another 5 million shares of Tesla to fulfill the promise he made in his Twitter poll.
Earlier this month, the CEO also sold Tesla shares in batches amounting to about $963.2 million, and $1.01 billion worth of stock, bringing his total sold in December to more than $2.87 billion so far. He sold a total of $9.85 billion in Tesla stock in November.
Besides Musk, Tesla execs including CFO Zachary Kirkhorn, Chief Accounting Officer Taneja Vaibhav and Senior Vice President of Powertrain and Energy Engineering Drew Baglino have also sold Tesla shares and exercised options in December.

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Check out the companies making headlines before the bell:
GameStop (GME) – The videogame retailer – one of the so-called “meme” stocks – lost another 3.1% in the premarket following a nearly 14% tumble yesterday to its lowest close since March. GameStop had seen its stock slide last week after reporting a wider quarterly loss.

AMC Entertainment (AMC) – The movie theater operator’s stock slid 6% in premarket trading, after extending a losing streak to 3 days with a more than 15% plummet Monday. Last week, CEO Adam Aron sold most of his holdings in AMC while CFO Sean Goodman sold all of his AMC stock.
Beyond Meat (BYND) – The maker of plant-based meat substitutes saw its stock jump 4.8% in premarket action, putting it in a position to break a 3-day losing streak. Piper Sandler upgraded the stock to “neutral” from “underweight,” saying a nationwide launch at McDonald’s (MCD) could happen within less than 3 months.
Pfizer (PFE) – The drugmaker said a final study of its antiviral Covid-19 pill showed it to be 89% effective in preventing hospitalizations and deaths in high-risk patients, similar to what earlier studies had shown. It added that the drug appears to be effective against the omicron variant.
Tesla (TSLA) – Tesla shares slid 1.5% in premarket trading after CEO Elon Musk sold more of his holdings to cover tax bills generated by the exercising of stock options. Tesla has dropped more than 20% from its all-time high and its overall market value has fallen back under the $1 trillion mark.
Weibo (WB) – Weibo slid 5.3% in the premarket after the China-based social networking company was fined 3 million yuan (about $471,000) by regulators, who said some of Weibo’s accounts and content violated various laws and regulations.

Terminix Global (TMX) – The pest control company’s shares soared 21.9% in the premarket after it agreed to be acquired by British rival Rentokil for $6.7 billion in cash and stock.
Alcoa (AA) – The aluminum producer’s shares rallied 4.2% in premarket trading following news that the stock will be added to the S&P Midcap 400 Index prior to the opening of trading next Monday. It replaces Hill-Rom Holdings, which is being acquired by Baxter International (BAX).
Dell Technologies (DELL) – The computer maker’s stock was downgraded to “in line” from “outperform” at Evercore, which notes Dell’s nearly 60% appreciation this year ahead of what it sees as a moderating personal computer market. Dell lost 1.7% in the premarket.
Ralph Lauren (RL) – The apparel maker slid 3% in the premarket after a Goldman Sachs double downgrade to “sell” from “buy” on the thesis that brand momentum indicators are fading.
Neogen (NEOG) – The food safety company’s stock surged 12.1% in premarket trading after it announced a deal to combine itself with the food safety division of 3M (MMM).
CORRECTION: This article has been updated to show that AMC CEO Adam Aron sold most of his holdings in the company last week, while CFO Sean Goodman sold all of his AMC stock.

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