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Beijing’s municipal government has approved a permit for Baidu’s Apollo Go robotaxi business to collect fares in a part of the capital city.
Other major cities like Shanghai will likely follow suit by early next year, said Wei Dong, vice president and chief security operation officer, at Baidu’s Intelligent Driving Group.
Baidu said it would charge a premium level fare for the robotaxis, without disclosing an exact price.

BEIJING — Baidu can start collecting robotaxi fares in a part of Beijing from Thursday, the Chinese tech giant told CNBC this week, marking a major step toward building its driverless taxi business.
The regulatory approval to support robotaxis in China comes as local governments in the U.S. have been progressing in a similar direction.

However, Beijing city’s move carries additional weight.
Approval from China’s capital marks the first time such a large city in the country has allowed companies to charge the public for robotaxi rides.
It sets the stage for other cities like Shanghai, Guangzhou and Shenzhen to do the same, Wei Dong, vice president and chief security operation officer, at Baidu’s Intelligent Driving Group told CNBC in an exclusive interview.
He expects those cities to act later this year or early next year.

How much will it cost?

Effective Thursday, Baidu’s Apollo unit that runs the robotaxi business can collect fares from passengers taking one of 67 self-driving cars in Beijing’s suburban district of Yizhuang.

While the company did not disclose exact pricing, it said fares would be comparable with the premium level ride-hailing charges available through apps like Didi, which can cost twice as much as ordinary rides.

A safety staff member gets in a self-driving robotaxi on October 13, 2020, in Beijing, China, a few days after Baidu launched trial operations of its Apollo Robotaxi.
Zhao Jing | Visual China Group | Getty Images

Baidu has offered free robotaxi rides in Yizhuang since October 2020. As of Wednesday, the robotaxi app, branded “Luobo Kuaipao,” showed a sample fare of 34 yuan ($5.31) for a 3-kilometer ride (1.86 miles) from a Sam’s Club in Yizhuang to a nearby subway station.
The same route costs about 14 yuan ($2.19) through Didi’s basic express car service. Didi’s sample premium level fare for the same route is 27 yuan.
So far, the novelty of a free, self-driving taxi has drawn a number of regular users in Yizhuang. Wei said more than 20,000 users each take at least 10 rides a month. It’s unclear how many will keep using the service when they have to pay for it, but Wei aims to get an additional 100 robotaxi cars verified each year.

Robotaxis race for U.S., China approval

From the U.S. to China, robotaxis are gaining traction with regulators who hold the keys to letting the public take driverless rides.
Self-driving taxi operators like Alphabet’s Waymo have been testing similar products in the U.S., primarily in California and Arizona. Waymo can charge the public for fares in a part of Phoenix, and its driverless vehicles don’t need a safety driver.

On Nov. 16, Alibaba-backed autonomous driving company AutoX claimed its fully driverless robotaxis now operate in the largest single region in China — 168 square kilometers (65 square miles) in the Pingshan District of the southern city of Shenzhen. AutoX said it began in January to allow the public to sign up for robotaxi rides. It was not immediately clear whether there was a cost to ride.
Baidu’s permit for commercial autonomous vehicle operations covers a 60 square kilometer area, including a town called Yizhuang that’s home to many businesses such as JD.com’s headquarters. The region is about half an hour’s drive south of central Beijing.
The Beijing city government has also made Yizhuang a testing site for autonomous driving by allowing companies to trial their projects there. These include JD’s unmanned delivery vehicles and Baidu’s robotaxi cars.

Baidu’s expansion plans

Last week, Baidu CEO Robin Li said the company planned to expand its Apollo Go robotaxi service to 65 cities by 2025, and to 100 cities by 2030. That’s up from five cities currently.
The company also announced its next generation of robotaxi vehicles would cost half the price to manufacture compared to the prior generation. The models are co-branded with three electric car makers: Chinese start-up WM Motor, Aion — a spin-off of state-owned GAC — and state-owned BAIC Group’s Arcfox.
In June, Baidu and BAIC claimed they could manufacture 1,000 driverless cars for 480,000 yuan ($75,000) each, versus the average of a 1 million yuan for an autonomous car.
Wei joined Baidu’s Intelligent Driving Group in May after seven years at Shouqi Limousine & Chauffeur, where he was CEO. The company operates a high-end version of Didi.
He said Baidu’s strategy for building a robotaxi business is to reduce the cost of self-driving technology and target specific user scenarios.
Rather than fully utilizing lidar technology — which requires costly sensors to create detailed maps before the robotaxi can operate — Wei spoke generally of using algorithms to increase efficient use of hardware.

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On the consumer front, Wei said Apollo would focus on ways to give the user an experience beyond just a mode of transport — such as displaying the streets of Beijing from 20 years ago on the car windows, instead of the current street view.
Another strategy lies in finding ways to utilize the robotaxi for non-travel functions, such as a space for medical treatment or a public library, he said.
Although Apollo is just a small part of Baidu, its development falls in line with the CEO’s attempts to convince investors the broader company’s future lies in artificial intelligence and related areas such as autonomous driving.
The company’s fastest area of revenue growth in the third quarter was in “non-online marketing revenue,” up 76% from a year ago to 5.2 billion yuan ($806 million). Baidu attributed the growth to demand for cloud computing and its other AI businesses.
— CNBC’s Arjun Kharpal contributed to this report. More

Minutes from the November Fed meeting show members concerned about inflation and willing to tighten policy should it continue to run hot.
The meeting summary noted that the officials would be willing to raise interest rates “sooner than participants currently anticipated.”
They also indicated at the meeting that they feel conditions warrant a reduction in monthly asset purchases, with some members pushing for a more aggressive tapering.

Federal Reserve officials at their meeting earlier this month expressed concern about inflation and said they would be willing to raise interest rates if prices keep rising.
The committee that sets interest rates for the Fed on Wednesday released the minutes from the November session where it first signaled that it could be dialing back all the economic help it’s been providing during the pandemic.

The meeting summary indicates a lively discussion about inflation, with members stressing the willingness to act if conditions continue to heat up.
“Various participants noted that the Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee’s objectives,” the minutes stated.
Officials stressed a “patient” approach regarding incoming data, which has shown inflation running at its highest pace in more than 30, the years.
But they also said they would “not hesitate to take appropriate actions to address inflation pressures that posed risks to its longer-run price stability and employment objectives.”
Following the two-day session that concluded Nov. 3, the Federal Open Market Committee indicated it will begin cutting back on the monthly bond-buying program that had seen it purchasing at least $120 billion in Treasurys and mortgage-backed securities.

The goal of the program was to keep money flowing in those markets while maintaining broader interest rates at low levels to boost economic activity.

Federal Reserve Chairman Jerome Powell attends the House Financial Services Committee hearing on Capitol Hill in Washington, U.S., September 30, 2021.
Al Drago | Reuters

In its post-meeting statement, the FOMC said “substantial further progress” in the economy would allow a $15 billion a month reduction in purchases — $10 billion in Treasurys and $5 billion in MBS. The statement said that schedule would be maintained through at least December and probably continue going forward until the program wound down – likely by late spring or early summer 2022.
The minutes noted that some FOMC members wanted an even faster pace to give the Fed leeway to raise rates sooner.
“Some participants suggested that reducing the pace of net asset purchases by more than $15 billion each month could be warranted so that the Committee would be in a better position to make adjustments to the target range for the federal funds rate, particularly in light of inflation pressures,” the minutes said.

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That’s important because inflation has gotten even hotter since the November meeting. In previous cycles, the Fed has raised interest rates to cool the economy, but officials have said they are willing to allow inflation to run hotter than normal to let the employment picture improve.
Markets, though, are anticipating a more aggressive Fed.
Traders in contracts that bet on the future of short-term rates are indicating the Fed will raise its benchmark rate three times in 2022 in25 basis point intervals, though current official projections are for no more than one hike next year. However, those markets are volatile and can change quickly depending on the signals the Fed sends.
FOMC members expressed concern at the meeting that the continued high inflation readings could influence public perception and “expectations were becoming less well anchored” to the Fed’s 2% longer-run target.

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A Gap store in New York, August 2, 2020.
Scott Mlyn | CNBC

Check out the companies making headlines in midday trading.
Gap, Nordstrom — Shares of Gap and Nordstrom plummeted after the companies reported disappointing quarterly results late Tuesday citing rising labor costs, inventory issues, shopping costs and factory closures as challenges. Gap shares dropped 24%. Nordstrom tumbled 29%. Shares of other retailers were hurting Wednesday too. Tapestry fell 4%, Ralph Lauren lost 2% and PVH slid more than 1%.

Autodesk — The software company’s shares fell more than 15% despite reporting a beat on the top and bottom lines for its most recent quarter. Autodesk issued fourth quarter earnings and revenue guidance that were largely below estimates.
HP Inc. — HP shares surged more than 10% after a better-than-expected earnings report. The company posted an adjusted quarterly profit of 94 cents per share, 6 cents above the Refinitv consensus estimate. The computer maker also issued a strong outlook amid solid consumer and business demand for personal computers and printers.
Deere & Co — Shares of the farm equipment maker jumped about 5% after the company issued stronger-than-expected quarterly earnings. Deere posted earnings of $4.12 per share last quarter, surpassing the consensus estimate of $3.90, according to Refinitiv. Deere said solid demand for its products helped cushion the impact of a month-long workers strike. Its revenue came in slightly below analyst forecasts, however.
Dell Technologies — Dell shares rose 4.8% after reporting adjusted quarterly earnings of $2.37 per share, beating the $2.18 consensus estimate amid growing demand for its computers and servers, and issued a stronger than expected current-quarter forecast.
VMware — The cloud computing company’s shares got an almost 2% boost after the company reported a quarterly beat on the top and bottom lines and gave an upbeat current-quarter forecast as global demand for cloud computing services rises.

Pure Storage — Shares of tech and data storage company gained 13% after the company beat earnings estimates for the third quarter and issued a better-than-expected current-quarter revenue outlook. 
Chevron — Shares of the energy giant advanced nearly 1% after RBC upgraded the company to an outperform rating. The firm said Chevron can benefit from “a strong commodity cycle over the coming years,” adding that the company has “much more stability in its portfolio than peers.” RBC believes shares can jump nearly 25% from Tuesday’s closing price. Other names in the industry also advanced on Wednesday, with Devon Energy and Diamondback Energy adding more than 3% and Baker Hughes rising 1.5%.
Buy now, pay later stocks — Installment payment names moved higher heading into the Thanksgiving holiday and the bulk of the holiday shopping season. Shoppers are expected to spend more for gifts this year thanks to higher prices and product shortages. Affirm rose 4%. Afterpay, whose acquisition by Square is expected to close in 2022, gained 3%. Shares of Marqeta, a provider of buy now pay later solutions, soared nearly 10%.
 — CNBC’s Pippa Stevens, Yun Li and Hannah Miao contributed reporting

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Ark Invest’s Cathie Wood is internally testing a fund that bets against major stocks in the benchmarks.
Wood said she wants to test the strategy on Ark’s employees and did not say when the fund would be made available to retail investors.
Wood acknowledged the new method could be quite volatile but believes over the next five years it will be a huge winner as her innovation companies further emerge and the older bellwethers fade away.

Catherine Wood, chief executive officer of ARK Investment Management LLC, speaks during the Milken Institute Global Conference in Beverly Hills, California, on Monday, Oct. 18, 2021.
Kyle Grillot | Bloomberg | Getty Images

Cathie Wood — known for her innovation ETFs that garnered billions in inflows during the pandemic — said Ark Invest is internally testing a fund that takes the strategy a step further by simultaneously betting against major stocks in the benchmarks that are being disrupted.
“We’re testing out a portfolio but it’s really Ark on steroids,” Wood told CNBC’s “Squawk Box” on Wednesday. Wood said she wants to test the strategy on Ark’s employees and did not say when the fund would be made available to retail investors.

“We think the benchmarks are where the big risks are long-term because they are filling up with value-traps, those companies that have done very well historically but are going to be disintermediated and disrupted by the massive amount of innovation that’s taking place,” Wood added.
Wood has long waved the flag about the so-called value traps in the major averages. She categorizes these companies as those that catered to short-term oriented shareholders by leveraging their balance sheets to pay dividends and buy back shares. As a result, these companies did not invest enough in innovation.
“What we would be doing is shorting stocks that are in the big benchmarks and when we get into a risk-off situation, what happens is portfolio managers and analysts generally run back to those stocks, get closer to their benchmarks and they dump our stocks, which are either small parts of benchmarks or not in benchmarks. Great opportunity for us, as we have experienced during these last few days, to pick up those stocks because its simply a risk-off move to get closer to benchmarks,” she said.

Arrows pointing outwards

With Wood’s flagship fund, Ark Innovation ETF, down nearly 15% in 2021 and the S&P 500 up 25%, this new strategy could see some big losses.
Wood acknowledged the new method could be quite volatile but believes over the next five years it will be a huge winner as her innovation companies further emerge and the older bellwethers fade away.

“In five years, the world will look nothing like it does today and we’re invested in all the disruptors, the winners, that are going to disrupt the traditional world order,” Wood added.
Tesla is Ark Innovation’s top holding, with other names like Coinbase, Teladoc, Unity Software, Roku and Zoom Video. Wood has consolidated into her highest-conviction names in 2021 amid a rotation from growth into value. She continues to buy the dip in beaten down names.
To put numbers to Wood’s theory, she said that innovation is currently priced in the public global market place at roughly between $10 and $15 trillion. In ten years, disruptive innovation will be about $200 trillion of that market capitalization.
“It will go from a little bit more than 10% of global equity market caps to what we believe could be more than half,” said Wood. “That’s how much disruption is evolving thanks to DNA sequencing, robotics, energy storage, artificial intelligence and blockchain technology.”

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Check out the companies making headlines before the bell:
Deere & Co. (DE) – The farm equipment maker reported quarterly earnings of $4.12 per share, beating the consensus estimate of $3.90, although revenue came in slightly below analyst forecasts. Deere said solid demand for its products helped cushion the impact of a month-long workers strike. Deere rallied 3.7% in the premarket.

Nordstrom (JWN) – Nordstrom plummeted 25% in premarket trading after it reported earnings of 39 cents per share for its latest quarter, shy of the 56 cent consensus estimate. The retailer was hurt by rising labor costs and inventory issues and said inventories were especially short in women’s apparel and shoes, where demand rebounded more strongly than it had expected. 
Gap (GPS) – Gap reported adjusted quarterly profit of 27 cents per share, well short of the 50 cents analysts had been anticipating, and also cut its full-year forecast. The apparel retailer has been hit by higher costs for shipping, as well as extended factory closures in Vietnam where it sources about 30% of its products. Gap plunged 20% in premarket trading.
Booking Holdings (BKNG) – The parent of Priceline and other online travel services is buying Swedish travel agency Etraveli from private equity firm CVC Capital for $1.83 billion.
VMware (VMW) – VMware beat forecasts by 18 cents with adjusted quarterly earnings of $1.72 per share. The software company also gave an upbeat current-quarter forecast amid growing global demand for cloud computing services. Nonetheless, the stock slid 2.6% in premarket action.
HP Inc. (HPQ) – HP Inc. came in 6 cents above consensus with adjusted quarterly profit of 94 cents per share, with the computer maker also issuing a strong outlook as consumer and business demand for personal computers and printers remains robust. HP jumped 5.6% in premarket trading.

Dell Technologies (DELL) – Dell reported adjusted quarterly earnings of $2.37 per share, beating the $2.18 consensus estimate, with Dell seeing strong demand for its personal computers and servers. Dell also issued a stronger than expected current-quarter forecast. Dell added about 2% in the premarket.
Pure Storage (PSTG) – Pure Storage surged 11.1% in premarket trading after beat estimates by 10 cents with adjusted quarterly profit of 22 cents per share. The maker of flash-based storage systems also issued a better-than-expected current-quarter revenue outlook. 
Chevron (CVX) – The energy producer was upgraded to “outperform” from “sector perform” at RBC Capital Markets, which said Chevron has a relatively stable portfolio compared to its industry peers.
Jack In The Box (JACK) – The restaurant chain’s stock was downgraded to “hold” from “buy” at Stifel Financial, which points to a number of factors including weak comparable restaurant sales. Jack In The Box slid 3% in the premarket.

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Stripe isn’t ruling out accepting cryptocurrency as a method of payment in the future, co-founder John Collison said Tuesday.
The company ended support for bitcoin payments in 2018, citing volatility and a lack of efficiency in making everyday transactions.
Asked whether Stripe would offer crypto support again, Collison said: “We don’t yet but I think it’s not implausible that we would.”

John Collison, President and co-founder of Stripe, attends the 2018 Viva Tech conference in Paris.
Christophe Morin | IP3 | Getty Images

Stripe isn’t ruling out accepting cryptocurrency as a method of payment in the future, according to co-founder John Collison.
The online payments company ended support for bitcoin payments in 2018, citing the digital coin’s notoriety for volatile price swings and a lack of efficiency in making everyday transactions.

“Crypto obviously means a lot of different things to a lot of different people,” Collison said at a CNBC-moderated panel at the Fintech Abu Dhabi festival on Tuesday.
Collison said there were some aspects to crypto — such as its use as a speculative investment — that are “not that relevant to what we do at Stripe.”
But, he added: “There have been a lot of developments of late with an eye to making cryptocurrencies better and, in particular, scalable and acceptable cost as a payment method.”

Asked whether Stripe would start accepting crypto as a method of payment again, Collison said: “We don’t yet, but I think it’s not implausible that we would.”
The company recently formed a team dedicated to exploring crypto and “Web3,” a buzzword in tech that refers to a new, decentralized version of the internet.

The effort is being led by Guillaume Poncin, Stripe’s head of engineering. Earlier this month, the company appointed Matt Huang, co-founder of crypto-focused venture capital firm Paradigm, to its board of directors.

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Collison said there are a number of innovations emerging in digital assets that have potential, including solana — a competitor to ethereum, the world’s second-biggest digital currency — to “Layer 2” systems like bitcoin’s Lightning Network, which aim to speed up transactions and process them at a lower cost.
Founded in 2009, Stripe has quickly become the largest privately-held fintech company in the U.S. The company was last valued at $95 billion and counts the likes of Baillie Gifford, Sequoia Capital and Andreessen Horowitz as investors.
The company, which processes payments for the likes of Google, Amazon and Uber, has expanded into a number of other areas in finance lately, including loans and tax management.

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BY THE END of the month the only food Emer can prepare is plain pasta. Occasionally she goes to bed hungry. “I can’t even afford anchovies,” the retired nurse says outside a vegetable market in Maltepe, a middle-class neighbourhood in Istanbul. She and her two sons have to get by on her monthly pension of 3000 lira, or about $250. Emer is behind on gas and electricity bills and loan payments. She is not alone. Soaring prices and a plummeting currency are turning the savings and incomes of most Turks to dust.Turkey’s crisis is beginning to spin out of control. The latest rout began after the president, Recep Tayyip Erdogan, defended recent interest-rate cuts, foresaw new ones and suggested he was deliberately pursuing a weaker currency to drive growth. “The competitive force of the exchange rate leads to increase in investment, production and employment,” Mr Erdogan said on November 22nd. He got what he bargained for the next day, when unnerved investors began dumping the lira. Within hours the currency fell by 15%, its worst showing in years, before erasing some of its losses the next day. Small protests erupted in parts of Istanbul and Ankara. Mr Erdogan claims Turkey is waging an “economic war of independence”. It is causing grave collateral damage.Egged on by Mr Erdogan, who has sacked three of its governors in under three years, the central bank has slashed interest rates by a cumulative four percentage points since September, to 15%, despite an official inflation rate of nearly 20%. (Four out of five Turks are convinced actual inflation is much higher, according to one survey.) The result is that the lira has lost nearly 40% against the dollar since the start of the year (see chart). Mr Erdogan’s latest comments poured fuel on the fire.There is some method to the president’s madness. A weak currency and negative real interest rates may help borrowers who do not have foreign-currency debt, exporters who do not have to rely on foreign suppliers, and the construction sector, says Selva Demiralp of Koc University. But almost everyone else will suffer. Many potential investors will shy away from taking out loans because the economic climate is simply too volatile.Meanwhile, Turks will be scratching their heads, wondering why, if a weak currency is desirable, their central bank has burned through at least $165bn in precious reserves to prop up the lira for more than two years. “After the exchange rate explodes and everything gets more expensive, the government says they know what they’re doing and that now we will grow because exports will increase,” says Ali Babacan, a former economy minister now at the head of Deva, an opposition party. “It’s like falling off your horse and saying you were going to dismount anyway.”An even more alarming prospect is that Mr Erdogan has decided to test his conviction, which turns basic economic thinking on its head, that cutting rates is the way to tackle inflation. As the central bank dances to his tune, the strategy risks impoverishing millions of Turks. Many blue-collar workers, students and pensioners are no longer able to buy meat or basic household necessities. Attempts by the pro-government media to put a positive spin on this sound like cruel jokes. A television pundit recently celebrated the impact of the crisis on the minimum wage, which had sunk from the equivalent of around $380 monthly at the start of the year to $220, as a chance for foreign companies to move production to Turkey. One ruling-party parliamentarian helpfully suggested Turks should eat less.For middle-class Turks, holidays abroad and scores of imported goods are out of reach. Many young professionals say they no longer see a future in Turkey. Since the start of last year, some 3,000 doctors are believed to have moved, mostly to Germany. Another 8,000 are planning to join them. Newlyweds Taner and Busra, he a physician and she a paramedic, both in their late 20s, say they can no longer dream of buying an apartment or a new car. “We’re getting poorer each day,” Taner says. They are starting to take German classes.Turkey has confronted currency collapse before. On a few occasions, most recently late last year, Mr Erdogan eventually gave in and let the central bank raise rates. This time he seems determined to hold out. Ordinary Turks will continue to pay the price. “Interest is the cause and inflation is the result,” Mr Erdogan likes to say. The true cause is the president, and the result is a broken economy. More

Traders work on the floor of the New York Stock Exchange (NYSE) on November 15, 2021 in New York City.
Spencer Platt | Getty Images

U.S. stock futures were little changed on Tuesday night after tech shares sold off for the second day in a row, pressured by rising rates that gave a boost to energy and financial stocks.
Dow Jones Industrial Average futures fell 0.1%. S&P 500 and Nasdaq 100 futures were about 0.1% lower too.

Retail stocks took a hit in extended trading following quarterly results. Nordstrom tumbled about 22% and Gap fell more than 15%. Both companies reported earnings misses for the most recent quarter.
Computer hardware company HP’s shares got a 7% lift from company earnings that beat on the top and bottom lines and higher first-quarter earnings guidance.
In regular trading, however, most tech stocks were in the red. The tech-heavy Nasdaq Composite lost 0.50% in Tuesday’s session, while the S&P 500 added 0.17% and bank and energy stocks helped push the Dow Jones Industrial Average 194 points higher.
The divergence in the sectors moved in tandem with Treasury yields, which tend to lift bank stocks and crush tech and other high-growth companies. Yields have been rising since President Joe Biden’s renomination of Jerome Powell as chairman of the Federal Reserve on Monday.
“It’s certainly a story of more rotation,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “The market is now with the Powell renomination thinking this is a reopening story, which sets aside any of the risks or concerns we might have about rising Covid infection rates.”

On Friday, just before the announcement of Powell’s renomination, investors were spooked by a resurgence of Covid-19 in Europe, which pushed tech shares higher.
Trading could slow in the coming days due to the Thanksgiving holiday, but investors will be watching a slew of economic data due out Wednesday, including weekly unemployment claims, a GDP update, personal income, consumer confidence reads and Federal Reserve FOMC minutes.
Most, though not all, companies have reported their financial results for the third quarter. Deere is scheduled to report before the bell Wednesday.

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