Finance

Just 9% of health savings account owners invest a portion of their funds, according to the Employee Benefit Research Institute. The rest, 91%, hold cash.
Ideally, savers would treat HSAs like a retirement account, by investing for future health costs in old age.
However, HSA investing may not be available to everyone. Doing so would mean paying out of pocket for short-term health expenses to let money grow.

The Good Brigade | DigitalVision | Getty Images

The vast majority of health savings account owners aren’t investing their money — and it’s likely shortchanging them over the long term.
Just 9% of accountholders were investing a portion of their HSA balance in 2020, according to an Employee Benefit Research Institute study published Thursday. The remainder — 91% — held their full balance in cash.

HSA owners can invest money in mutual funds (one that tracks the S&P 500 stock index, for example) and other options that are generally available to retirement savers.
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The low share of invested accounts is alarming, as it indicates many people aren’t taking full advantage of HSAs, according to Paul Fronstin, director of EBRI’s health research and education program. Some may have valid reasons for not doing so, though, he said.
“For the same reason you’re hopefully investing your 401(k) in mutual funds, you can do the same thing in your HSA,” Fronstin said.
HSA savers who have the means to invest at least a portion of their money will generally see their savings grow at a more rapid rate and therefore have more money to cover health costs in their older years — when they’re more likely to need care, Fronstin said.

The average retired couple age 65 in 2021 may need roughly $300,000 saved, after taxes, to cover health-care expenses in retirement, according to Fidelity Investments.
Investors also more likely to keep pace with or beat health-care inflation. Savings held fully in cash would likely erode in value relative to the cost of future care, Fronstin said.
In 2020, the average account containing investments other than cash grew by $3,420, whereas the average non-invested account grew by $170, according to EBRI. (Account contributions may account for some of this difference.)

Not available to everyone

HSAs are tax-advantaged savings accounts. They enjoy a unique benefit relative to retirement accounts, in that savings are never taxed if used for qualified medical expenses. (Retirement savings are taxed upon contribution or withdrawal, depending on account type.)
The accounts are only available to people with a high-deductible health plan. These health plans have grown more popular with private-sector employers over the last decade, and HSA use has swelled.
There were about 31 million accounts as of June, around five times more than in 2011, according to Devenir, an HSA provider. They held $93 billion, up from about $12 billion a decade ago.

The share of invested accounts is growing, but slowly. In 2015, 4% of HSAs had at least some savings invested, according to EBRI.
“It’s trending up at a snail’s pace,” Fronstin said.
Of course, not everyone necessarily has the means to invest.
Doing so would mean paying out-of-pocket for short-term health expenses (potentially hundreds or thousands of dollars) in order to keep HSA funds invested and allow more runway for investment growth.
One strategy that may help such savers: Hold enough cash in an HSA to cover you annual health deductible and invest the remainder, Fronstin said.

There are other valid reasons you might not invest HSA savings.
For example, some HSA administrators may not even offer investments to users; many also require a minimum balance (perhaps $1,000 or $2,000) before users can start investing.
The latter requirement could pose a problem for a large share of account holders — about 40% of accounts finished 2020 with less than $500, according to EBRI.

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Richmond Fed President Thomas Barkin told CNBC on Friday that he’s on board with reducing the amount of economic help the central bank is providing.
Officials have indicated that tapering of bond purchases could start as early as November.
Barkin noted that he sees “risk on the inflation side” that he is monitoring.

Richmond Federal Reserve President Thomas Barkin said Friday he’s on board with reducing the amount of economic help the central bank is providing as concerns grow about inflation.
With the Fed indicating that it’s likely to start pulling back on its monthly bond purchases, Barkin said that seems reasonable, and he’s leaning toward beginning the process in November. Minutes from the September Fed meeting indicated that officials want to start tapering either next month or in December.

“If we do decide to taper at the next meeting, we’re going to have a discussion on which of those two dates, I’m sure, and my instinct would be if you’re going to decide it, go ahead and move,” he told CNBC’s Steve Liesman during a live “Squawk Box” interview. “But I’m certainly going to be open to debates on both sides.”
Fed officials have indicated they’ve met their inflation goal of 2%, though the full and inclusive employment part of the mandate remains elusive despite significant progress.
Like many of his colleagues, Barkin pointed to temporary factors like supply chain problems that have pushed car prices higher as a major factor in driving inflation, which is running around a 30-year high.
But he also conceded that it’s been a bigger problem that he expected.
“I do think there’s risk on the inflation side, and I’m watching that very carefully,” he said.

The minutes showed that the pace of bond purchases likely will slow by about $15 billion each month — $10 billion in Treasurys and $5 billion in mortgage-backed securities.
Fed officials have stressed that even after the start of tapering, it will be some time before interest rate hikes begin. Market pricing currently is for the first increase to come in July 2022, with another likely before the end of the year, according to the CME’s FedWatch tracker.
Barkin said he would base his rates decision on two factors — whether inflation is going to stay elevated or come back to its norm of around 1.5% to 2% of the past 25 years or so, and how close the labor market is to full employment.
“Is the labor market going to be this tight over the next six months? Is inflation going to come down or not?” he said. “Different answers to those questions in my mind would lead me to different points of view on when we would start to increase rates.”
He also was asked his position on whether Fed officials should be allowed to own individual stocks, but declined to answer pending an inquiry Chairman Jerome Powell is leading into best practices. Several officials have come under fire for trading stocks, and two regional presidents have resigned following controversies over their activities.

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Here are the numbers: Earnings of $14.93 a share vs. $10.18 consensus estimate according to Refinitiv.
Revenue: $13.61 billion vs. $11.68 billion consensus estimate.
Shares of the New York-based bank rose 2% in premarket trading.

David Solomon, chief executive officer of Goldman Sachs & Co., speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.
Kyle Grillot | Bloomberg | Getty Images

Goldman Sachs posted third-quarter results on Friday that exceeded analysts’ expectations as investment banking revenue surged nearly 90% and the bank reaped record fees from equities financing.
Here are the numbers:

Earnings: $14.93 a share vs. $10.18 consensus estimate, according to Refinitiv.
Revenue: $13.61 billion vs. $11.68 billion consensus estimate.

Profit at the bank surged 63% to $5.28 billion, or $14.93 a share, as revenue climbed 26% to $13.61 billion. Shares of the New York-based bank rose 2% in premarket trading.
Goldman, led by CEO David Solomon, has the world’s premier investment banking franchise, and analysts had expected strong revenue from mergers and IPO activity in the quarter. That theme played out at rivals from JPMorgan Chase to Morgan Stanley.
But Goldman exceeded expectations, producing $3.7 billion in investment banking revenue, an 88% increase from a year earlier and roughly $750 million more than the StreetAccount estimate. Those results were driven by a rise in completed merger transactions and debt and equity underwriting; the bank said advisory revenue hit a record high.
Its wealth and asset management businesses should benefit from high equity values. And the firm’s consumer banking businesses have continued to grow. All that feeds into Solomon’s efforts to improve the steadiness of results at the company.
Analysts are likely to ask Solomon about the rationale for his $2.24 billion acquisition of fintech lender GreenSky. The deal is expected to close by the first quarter of 2022.

The bank said last month that CFO Stephen Scherr would step down by year-end, to be replaced by Denis Coleman, the current co-head of the firm’s Global Financing Group.
Goldman shares have climbed 47% this year, exceeding the 37% rise of the KBW Bank Index
Goldman is the last of the six biggest U.S. banks to report earnings. JPMorgan Chase, Bank of America, Morgan Stanley, Citigroup, Wells Fargo all exceeded expectations for profit and revenue, helped by reserve releases and strong investment banking revenue.
This story is developing. Please check back for updates.

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Bitcoin surged as high as $59,920, notching its highest level since May. 10, but struggled to break above the $60,000 mark.
Traders are optimistic about the chances of the SEC giving the green light to the first bitcoin futures exchange-traded fund.
Approval of an ETF that gives mainstream investors exposure to bitcoin would be a landmark for the crypto industry.

Bitcoin on display.
Chesnot | Getty Images

Bitcoin climbed Friday to hit a five-month high, and was inches away from hitting $60,000.
The world’s biggest cryptocurrency surged as high as $59,920, notching its highest level since May. 10. But it struggled to break above the $60,000 mark.

Bitcoin was last trading 3% higher in the last 24 hours, at a price of $59,274, according to Coin Metrics data.
Traders are optimistic about the chances of the U.S. Securities and Exchange Commission giving the green light to the first bitcoin futures exchange-traded fund, according to analysts.
The ProShares Bitcoin Strategy ETF is scheduled to debut at the New York Stock Exchange on Tuesday, and experts believe the SEC unlikely to object to the product.
Approval of an ETF that gives mainstream investors exposure to bitcoin would be a landmark for the crypto industry, which has long been pushing for greater acceptance of digital assets on Wall Street.

“The ETF news is being priced in with the market expecting an approval on Monday. This is driving the price up,” Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, told CNBC.

“However, we are at high time frame resistance here around 58-60K, hence a rejection on the ETF application could send Bitcoin back to 53-55K levels. But overall the trend is still bullish and there are a number of other ETF applications in the pipeline as well.”
The CME bitcoin futures contract for Nov. 1 was last trading at about $60,515.
Not all cryptocurrencies got a boost from the ETF news Friday. Ether, the second-largest coin, rose 1% to $3,771 on spot exchanges. However, XRP and ada were both down about 2%.
Bitcoin and other cryptocurrencies have been on a wild ride this year. The number one digital coin hit an all-time high of nearly $65,000 in April, before slumping sharply on the back of a crackdown on the crypto market in China. It’s since staged a comeback and has more than doubled in price so far this year.

Regulators have been taking a tougher line on crypto this year, as interest from investors has surged. The industry has been putting up a fight though, with Coinbase on Thursday calling on the U.S. to create a new regulator to oversee digital assets.
Earlier this week, Bank of England Deputy Governor Jon Cunliffe warned cryptocurrencies could spark a global financial crisis of similar magnitude to the 2008 crash.
“When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice,” Cunliffe said in a speech Wednesday.

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Check out the companies making headlines before the bell:
Moderna (MRNA) – Moderna added 3.2% in premarket trading after rising 3.2% yesterday, following an FDA panel recommendation for a booster dose of its Covid-19 vaccine. The panel recommended approval of a booster for people 65 and over as well as those at high risk.

Virgin Galactic (SPCE) – Virgin Galactic shares tumbled 18.4% in the premarket after it said it would delay the launch of its commercial space service to the fourth quarter of 2022 from the third quarter. The company is taking the extra time to work on improvements to its space vehicles.
Truist Financial (TFC) – The bank beat estimates by 21 cents with adjusted quarterly earnings of $1.42 per share and revenue also above estimates. Truist’s results were helped by stronger fee income as well as loan and deposit growth.
PNC Financial (PNC) – PNC reported adjusted quarterly earnings of $3.75 per share, compared with a consensus estimate of $3.20 and revenue also topping Wall Street forecasts. PNC benefited from the recapture of credit loss provisions as well as the integration of BBVA USA, a deal that closed last October. PNC rose 1.3% in premarket trading.
Pearson (PSO) – Pearson tumbled 12.2% in premarket trading after the educational materials company said higher education sales have fallen 7% so far this year, even though the company maintained its full-year guidance. Pearson said enrollments at community colleges in the U.S. appear to have been hit by the delta variant of Covid-19.
Corsair Gaming (CRSR) – Corsair shares slid 5.9% in the premarket after the maker of video game-related peripheral products said supply chain issues were hurting sales. Corsair said 2021 will still be a “strong growth year.”

23andMe (ME) – The consumer genetics company’s stock surged 9.3% in premarket trading, following a positive mention by EMJ Capital founder and portfolio manager Eric Jackson on CNBC’s “Closing Bell” Thursday. Jackson said 23andMe should be more properly thought of as a therapeutics company in addition to being a subscription service, which he thinks bodes well for future growth.
Alcoa (AA) – Alcoa reported an adjusted quarterly profit of $2.05 per share, beating the consensus estimate of $1.80. The aluminum producer’s revenue topped estimates as well on higher aluminum prices. Alcoa jumped 6.7% in premarket action.
fuboTV (FUBO) – fuboTV’s Sportsbook unit struck a deal with Nascar to become the racing circuit’s authorized gaming operator. fuboTV shares added 2.1% in premarket trading.
Del Taco (TACO) – The restaurant chain reported adjusted quarterly earnings of 11 cents per share, a penny above estimates, with revenue essentially in line with Wall Street forecasts. However, comparable sales rose 1.8%, short of the 2.1% estimate from analysts surveyed by FactSet. Shares slid 3.6% in the premarket.

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Property giant Evergrande has $300 billion in liabilities and missed yet another payment to investors in U.S. dollar-denominated debt on Oct. 11.
The risks posed by Evergrande are “controllable,” Zou Lan, director of the People’s Bank of China’s financial markets department, said in Mandarin at a press conference Friday, according to a CNBC translation.
Zou added that authorities would protect individual consumers when it came to their house purchases, and provide financial support for the resumption of construction.

An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018.
Bobby Yip | Reuters

BEIJING — The People’s Bank of China said Friday that indebted developer China Evergrande is its own case, and that most real estate businesses in the country are stable.
Property giant Evergrande has $300 billion in liabilities and missed yet another payment to investors in U.S. dollar-denominated debt on Oct. 11. The developer ranks second in China by sales, prompting some concerns of fallout similar to a “Lehman Moment.” Economists have noted that Evergrande’s large holdings of land and physical properties set it apart from the U.S. investment bank’s financial assets.

The risks posed by Evergrande are “controllable,” Zou Lan, director of the People’s Bank of China’s financial markets department, said in Mandarin at a press conference Friday, according to a CNBC translation.
“China Evergrande Group’s problems in the real estate industry are an individual phenomenon,” he said, noting that property prices have remained stable. “Most real estate businesses are operating stably and have good financial indicators, and the real estate industry overall is healthy.”

Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s estimates. The central bank and other authorities held a rare meeting with Evergrande executives in late August and told the company to resolve its debt issues.
A few days later the developer warned investors of potential default. In the weeks since, there has been news of Evergrande selling parts of its business to raise cash.
Zou added Friday that authorities would protect individual consumers when it came to their house purchases, and provide financial support for the resumption of construction.

Many new apartments in China are sold to consumers ahead of completion. This means that Evergrande’s financial troubles and incomplete projects have left many buyers with their savings gone or large mortgages, and no clarity on when — or if — their apartments will be completed.
The central bank did not indicate Friday that major changes to monetary policy were ahead. The department head, Sun Guofeng, told reporters that the PBoC would continue to implement normal monetary policy. He added that factors like inflation were controllable.

Read more about China from CNBC Pro

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CNBC tracked China’s 2021 gross domestic product forecasts from more than a dozen major banks.
Negative factors for growth have mounted this year, ranging from slower-than-expected consumer spending to disruptive floods.

Workers labor in a factory of bathing suits in Jinjiang in southeast China’s Fujian province Tuesday, Sept. 28, 2021.
Feature China | Barcroft Media | Getty Images

BEIJING — Ahead of China’s quarterly growth numbers due out on Monday, most major investment banks have trimmed their economic predictions for the year and warned that abrupt power cuts and a property market slump may drag down growth.
CNBC tracked estimates for China’s full-year GDP from 13 major banks, 10 of which have cut their forecasts since August. The median prediction is growth of 8.2% this year, following the latest cuts. That’s down 0.3 percentage points from the prior median forecast.

Of the firms CNBC tracked, Japanese investment bank Nomura has the lowest full-year forecast for China at 7.7%. Southeast Asia’s largest bank, DBS, has the highest at 8.8%.
Here are banks’ forecasts for the full year:

Banks that cut China’s GDP forecast

August

ANZ: Cut to 8.3%, from 8.8%
Morgan Stanley: Cut to 7.9%, from 8.2%

September

Bank of America: Cut to 8%, from 8.3%
Citi: Cut to 8.2%, from 8.7%
Deutsche Bank: Cut to 8.4%, from 8.9%
Goldman Sachs: Cut to 7.8%, from 8.2%
HSBC: Cut to 8.3%, from 8.5%
Nomura: Cut to 7.7%, from 8.2%

October

Standard Chartered: Cut to 8.2%, from 8.8%
JPMorgan: Cut to 8.3% from 8.7%

Banks that didn’t change China forecast

Credit Suisse: 8.2%.
DBS: 8.8%.
UBS: 8.2%.

China’s economic landscape

Negative factors for growth have mounted this year, ranging from slower-than-expected consumer spending to disruptive floods. Adding to uncertainty is Beijing’s wide-ranging regulatory crackdown, including on indebted real estate developers and allegedly monopolistic behavior by internet tech giants.
Strong export growth remains a bright spot. China’s economic expansion is still on pace to exceed the IMF’s global growth prediction of 5.9%.
Analysts have said China is taking the opportunity this year to make painful but necessary adjustments to the economy. The official GDP target of more than 6% this year is far lower than what investment banks are betting.
— CNBC’s Gabrielle See contributed to this report.

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U.S. stock index futures were little changed during overnight trading on Thursday, after the S&P 500 posted its best day since March on stronger-than-expected earnings.
Futures contracts tied to the Dow Jones Industrial Average gained 36 points. S&P 500 futures advanced 0.11%, while Nasdaq 100 futures were up 0.12%.

During regular trading the S&P 500 advanced 1.71%, registering its best day since March 5. The Dow gained 1.55%, snapping a four-day losing streak. The 30-stock benchmark had its best day since July 20. The Nasdaq Composite gained 1.73% for its best day since May. All three averages are on track to end the week in the green.
The gains come amid a strong start to earnings season. Eight members of the S&P 500 posted quarterly results on Thursday morning, with each one topping Wall Street’s expectations. Financial heavyweights Bank of America, Morgan Stanley and Citigroup were among the names that reported.
“The banks painted a strong and healthy picture of the US consumer,” noted Edward Moya, senior market analyst at Oanda. “Wall Street can’t turn negative on the economy after seeing reserve releases, moderating trading revenue, mixed loan growth, and a consumer willing to take on debt,” he added.
Goldman Sachs, J.B. Hunt and PNC Financial are among the names that will report quarterly results on Friday.

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A better-than-expected employment reading also boosted sentiment on Thursday. Weekly jobless claims for the prior week totaled 293,000, the Labor Department said, which was the first time the reading came in below 300,000 since the start of the pandemic.

Thursday’s gains came despite hot inflation readings, which some have warned could derail the economic recovery. The consumer price index jumped 0.4% in September and 5.4% year over year, according to data from the Labor Department.
“One thing that is clear is that inflation has been persistently higher than expectations over the summer, and the Fed is beginning to take notice,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
“The higher levels of inflation are making it difficult for the Fed to ignore and some market participants have called into question the ‘transitory’ view on inflation…we believe higher levels of inflation are forcing the Fed to bring forward their exit strategy from high levels of monetary stimulus,” he added.
On the economic data front, retail sales numbers will be released Friday at 8:30 a.m. ET, while the University of Michigan Consumer Sentiment reading will hit the tape at 10 a.m. ET.

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