Finance

A trader works on the floor of the New York Stock Exchange.
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U.S. stock futures opened slightly higher Monday night after the Dow slipped from a record high on Friday before the three-day Labor Day weekend.
Dow Jones Industrial Average futures rose by 82 points, or 0.23%. S&P 500 and Nasdaq 100 futures climbed 0.21% and 0.31%, respectively.

In regular trading Friday, the Dow lost 74.73 points, or 0.21%, while the S&P 500 fell slightly by 0.03%. The tech-heavy Nasdaq rose 0.21%, helping support the broader market.
The losses came after the August jobs report came in short of expectations, highlighting continued concern about the spread of Covid and its delta variant. Nonfarm payrolls increased by 235,000 in August, the Labor Department reported, but economists surveyed by Dow Jones expected 720,000 jobs.
Ryan Detrick, LPL Financial’s chief market strategist, said there could be a strong job rebound “in coming months” and that there are promising signs that the worst of the surge in Covid cases could be behind us. However, the August jobs report has the potential to delay the Fed’s tapering timeline, which is widely expected to begin this year, Detrick said.

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“Fed Chair Powell has made it clear that the labor market will serve as his tell regarding when to begin tapering asset purchases,” he said. “With [Friday’s] big payroll miss, it is clear the labor market is under some near-term pressure, and while these pressures are likely to dissipate the Fed will probably err on the side of caution to avoid acting prematurely.”
One week into September, the major averages are all up, despite a muted kickoff to for the month. Year-to-date, the Dow is up 15.5%, the S&P is up 20.7% and the Nasdaq Composite is up 19.2%, although investors and analysts are still on the lookout for a major correction in September.

“Admittedly, passive investors have yet to feel pain,” Bank of America said in a note Friday, adding that “2021 represents yet another year during which the [S&P 500] has crushed it, but some signs indicate that it may be time to start getting ‘pickier’ when it comes to stocks.”
No economic data is due out Tuesday. Later in the week, Mary Daly, president of the Federal Reserve Bank of San Francisco, is speak at a conference hosted by the Brookings Institute.

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George Town, Grand Cayman
Noel Hendrickson

Europe’s biggest banks are booking an average of 20 billion euros ($23.7 billion) in tax havens every year, according to a new report.
That accounts for 14% of their total profits, the analysis found.

Published Monday, the report from the EU Tax Observatory looked into the activities of 36 systemic European banks, headquartered in 11 countries across Europe, that have been subject to mandatory country-by-country reporting on their actions since 2015.
Seventeen jurisdictions were included in the report’s tax haven list: the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Gibraltar, Hong Kong, Ireland, Isle of Man, Jersey, Kuwait, Luxembourg, Macao, Malta, Mauritius, Panama and Qatar.

The report noted that about 65% of banks’ profits were reported as being made abroad through affiliates between 2014 and 2020, with researchers documenting a misalignment between the countries where profits were booked and those where employees were located. Profits per employee were also far larger in tax havens than in other countries, according to the report, with subsidiaries in tax havens reporting high profitability and profit margins.
Researchers also pointed out that 25% of the banks’ profits were booked in countries where the effective tax rate was lower than 15%.
“Taken together, this evidence indicates a significant presence and stable use of tax havens by European banks over the years,” they said in the report.

“Bank profitability in tax havens is abnormally high: 238,000 euros per employee, as opposed to around 65,000 euros in non-haven countries,” the authors added. “This suggests that the profits booked in tax havens are primarily shifted out of other countries where service production occurs.”

Variation between banks

The use of tax havens varied considerably between banks, the analysis found. The mean percentage of profits booked in tax havens between 2014 and 2020 was around 20%, the data showed, but this ranged from 0% to 58%.
Several banks were identified by researchers as having a “relatively high presence in tax havens.”
“We observe a diversity of situations: for HSBC, the bulk of haven profits come from just one haven [Hong Kong], while in other cases multiple tax havens are involved,” they said in the report.

HSBC booked a mean 58% of its pre-tax profits in tax havens between 2014 and 2020, according to the study, making it the lender funneling the largest percentage of profits into the EUTO’s list of tax havens.
“HSBC is the largest bank in Hong Kong, with circa 30,000 employees, and because of our heritage, size of operations and strategy, a significant proportion of the group’s profits continue to arise there,” a spokesperson for HSBC told CNBC via email. “HSBC does not employ tax avoidance strategies to artificially divert profits to low-tax jurisdictions.”
Standard Chartered booked an average of around a third of its pre-tax profits in tax havens, according to the report, while Deutsche Bank, Nord LB and RBS all booked, on average, more than 20% of their pre-tax profits in tax havens between 2014 and 2020.
A spokesperson for Standard Chartered told CNBC that the bank has substantial commercial operations in both high tax and low tax jurisdictions.
“We do not artificially divert profits to low tax jurisdictions,” they said in a statement. “Tax is considered as part of relevant business decisions and we only engage in tax planning that supports a genuine commercial activity. We do not enter into transactions whose sole purpose is to minimize or reduce tax cost.”
Meanwhile, a Deutsche Bank spokesperson told CNBC via email that the lender was represented by active subsidiaries and branches in almost 60 countries.
“None of these countries are listed on the current EU list of non-cooperative countries and territories for tax purposes. As a matter of principle, Deutsche Bank reports its profits in the countries in which they are generated, this means that profits are also taxed in those countries,” they said. “Depending on the type of business activity there may be different levels of profit per employee. The effective tax rate of Deutsche Bank Group in 2020 was 39%.” 
At the other end of the scale, Bankia BFA, Erste, Nykredit Realkredit, Swedbank and Banco Sabadell booked none of their profits in tax havens during the seven-year sample period.

Eight banks, including Intesa Sanpaolo and HSBC, increased their presence in tax havens over the sample period, according to the EUTO. Seven lenders kept their presence in havens stable, while 16 banks decreased their use of tax havens.
The mean effective tax rate paid by the banks in the EUTO’s sample was 20%, ranging from 10% to 30%. Seven banks, the EUTO said, “exhibit a particularly low effective tax rate” of 15% or less: RBS, Barclays, Bayern LB, Nord LB, HSBC, KBC and Intesa Sanpaolo.
Spokespersons for Nord LB, RBS, Barclays, Bayern LB, KBC and Intesa Sanpaolo were not immediately available for comment when contacted by CNBC.
The average corporate tax rate in the EU was 20.79% in 2020, having declined every year since 2014. Across the whole of Europe, the 2020 rate was 19.03%, with the rate of corporate tax on the continent also seeing a gradual decline since 2014. Rates vary between European countries.

Call for minimum tax rate

In July, 130 countries backed an OECD plan to reform international frameworks in a bid to ensure multinational companies pay a fair share of tax wherever they operate. The reforms include plans for a global minimum rate of 15% for corporation tax, which the OECD estimates would generate around $150 billion in additional global tax revenues every year.
EUTO researchers calculated that if this rate was imposed globally, the European banks used in its analysis would have to pay 3 to 5 billion euros more in taxes every year. If the global minimum rate was raised to 21%, they would pay an additional 6 to 9 billion euros annually. With a 25% minimum corporation tax rate, the 36 European banks included in the study would pay 10 to 13 billion euros in additional taxes annually.

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Chinese President Xi Jinping announced Thursday a new stock exchange in Beijing would soon launch to help small and medium-sized businesses raise capital.
The initial batch of stocks are set to come from the “select” portion of an existing over-the-counter stock board, according to the securities regulator.
These 66 “select” stocks soared Monday, with about a third briefly surging about 30%.

Photo taken on Aug. 19, 2021 shows a stock market trend, Shiyan, Hubei Province, China.
Costfoto | Barcroft Media | Getty Images

BEIJING — Shares of more than 60 little-traded mainland Chinese stocks briefly surged by at least 10% Monday as investors bet on the companies’ potential inclusion in a new Beijing stock exchange.
Chinese President Xi Jinping announced late Thursday the capital city would launch the country’s third stock exchange to help small and medium-sized businesses raise capital.

These and other privately run businesses contribute to more than 80% of jobs nationwide, but have had a harder time than state-owned enterprises in getting financing from banks, the largest of which are state-owned.

The new Beijing exchange will initially draw from stocks already traded over-the-counter in the “select” section of the “New Third Board,” or National Equities Exchange and Quotations (NEEQ), the securities regulator said Friday.
This pool of 66 select stocks all rose in Monday afternoon trading, with nearly a third briefly climbing about 30%. Only five of the companies have market capitalizations of more than $1 billion. Daily trading volume per stock was in the millions of yuan on Monday, compared with hundreds of millions of yuan for the largest stocks traded on the mainland.
Metal sheet manufacturer Speedbird, specialized rubber products manufacturer Tongyi Aerospace and packaged food company Zhulaoliu were among the top 10 advancers.
The Beijing exchange’s launch date has not been announced yet. Authorities are gathering public comment on rules for the new trading venue through Sept. 22.

Yet another stock market

Plans for the Beijing exchange mark Chinese authorities’ latest attempt to improve the ability of the local stock market to serve as a financing channel for companies.
The dominance of sentiment-driven retail investors has contributed to much speculative activity in the mainland stock market. It is the second-largest in the world but far younger than that of the U.S. at about three decades old.
The mainland’s slow IPO-approval system and high earnings requirements have meant that many of China’s largest companies, especially technology giants like Alibaba and Tencent, have instead chosen to list in New York and Hong Kong. However, tighter scrutiny on Chinese listings in the U.S. by both countries’ governments has essentially halted the flow of Chinese IPOs to New York this summer.
In July 2019, China launched the Star board in Shanghai to test a faster registration-based IPO process and higher thresholds for investor access. However, analysts have said the stock board lost momentum amid IPO delays in the last year.
But authorities have expanded some of the practices tested on the Star board, like larger daily stock trading ranges, to other parts of the mainland market.
Analysts are hopeful the Beijing stock exchange will only add to those improvements to the market.
Cao Yanghui, director of the Nanhua Futures Research Institute, a brokerage based in Hangzhou, said in a statement that the establishment of the Beijing exchange indicates changes to the financial market are “proceeding at a relatively fast pace.”
“If everyone felt previously that the (IPO) registration system was rather distant, then it may now be close at hand,” Cao said, according to a CNBC translation of his Mandarin-language comments.
While the new stock exchange will initially draw from the New Third Board’s select group of companies, public materials say a registration-based listing system will be implemented in the future.

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Shares will be allowed to rise or fall by 30% per day, a relatively wide range for Chinese markets.
“We see Beijing Exchange as positioned to support mid/small sized firms and as a hub where the best of those firms can go to list on Shanghai and Shenzhen exchanges,” Morgan Stanley equity analyst Katherine Liu and a team said in a Sept. 2 note.
They added that “near-term sentiment and liquidity should continue to drive the brokers’ rally.”
Stock trading volume has climbed in the last two months. Monday marked the 34th-straight trading day with volume above 1 trillion yuan, according to Wind Information.

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As of Friday, special purpose acquisition companies can list on the Singapore Exchange’s (SGX) mainboard.
Singapore’s benchmark index has traditionally been dominated by finance and property names.
But the exchange has set its sights on drawing tech companies, and it thinks that SPACs will be a good way to do so.
SPACs could provide a much-needed injection of fresh enthusiasm for Singapore’s IPO market, which has been stagnant for years.

SINGAPORE — Singapore’s stock exchange this month launched new rules allowing SPACs to list, a move it hopes will draw more firms to raise funds in the city-state amid an IPO market that has been stagnant for years.
As of Friday, special purpose acquisition companies can list on the Singapore Exchange’s (SGX) mainboard.

SPACs, which have soared in popularity recently, have no commercial operations and are established solely to raise capital from investors for the purpose of acquiring one or more operating businesses. They raise capital in an initial public offering and use the cash to merge with a private company and take it public.
Singapore’s benchmark index has traditionally been dominated by finance and property names. But the exchange has set its sights on drawing tech companies, and it thinks that SPACs will be a good way to do so.
Mohamed Nasser Ismail, SGX’s head of equity capital markets, told CNBC on Monday that SPACs provide an alternative route for companies to access public markets.

“There is now a growing pool of new technology or new economy companies that are rising across the region that will find the SPACs route … in Singapore to be an attractive, valuable and sustainable way of securing funding going forward,” Nasser told CNBC’s “Squawk Box Asia.”
Companies that pursue a SPAC listing on the SGX must meet a minimum market capitalization of 150 million Singapore dollars ($111 million).

Singapore’s stagnant IPO market

SPACs have exploded in popularity, especially in the U.S. There have been 358 SPAC IPOs so far this year in the U.S., rocketing over 800% from the year before. That accounts for the vast majority of the 379 SPAC IPOs globally so far this year, according to data from consultancy EY. The rest of the SPAC IPOs were in Europe.

Over in Asia, Singapore would be the first bourse to offer the SPAC route, according to Reuters.
That could provide a much-needed injection of fresh enthusiasm for Singapore’s IPO market, which has not drawn much interest from companies – even its own — despite the bourse’s efforts to make listing in the city-state attractive.
Singapore-headquartered ride-hailing giant Grab, for example, plans to list on the Nasdaq when its SPAC merger with Altimeter Growth Corp. is completed.

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In the first half of this year, Singapore drew just three listings — a 50% drop from a year ago, according EY data. In comparison, Hong Kong, considered a rival to Singapore’s financial hub status, attracted 46 listings in the same period.
The amount of money raised was also far less. Singapore’s three IPOs had a total of $200 million in proceeds, while Hong Kong’s 46 listings raised $27.4 billion.
For companies, SGX’s Nasser says that a SPAC “brings certain advantages that a traditional IPO route may not have.”
“SPACs can provide better certainty in terms of timing, valuation and execution,” he said.

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Citi’s commercial banking unit has set up a China desk in Singapore dedicated to helping “emerging” Chinese companies to expand into the city state and Southeast Asia, the bank told CNBC.
Many companies from China have set their eyes on expanding overseas — even as their large home market offers plenty of growth opportunities.
Citi said its revenue from supporting client activity and flows from China to Singapore more than doubled in 2020 compared with the previous year.

Citi’s bank branch in the central business district of Singapore on Feb. 12, 2018.
Ore Huiying | Bloomberg | Getty Images

SINGAPORE — Citi’s commercial banking unit has set up a China desk in Singapore dedicated to helping “emerging” Chinese companies expand into the city-state and Southeast Asia, the bank told CNBC.
Citi Commercial Bank serves growing mid-sized companies with annual revenues of up to $1 billion. Many such companies from China have set their eyes on expanding overseas — even as their large home market offers plenty of growth opportunities.

And Singapore, a business and financial center in Southeast Asia, has emerged as a favored destination among Chinese companies of various sizes. Major Chinese firms that have expanded to Singapore include tech giant Tencent, TikTok-owner ByteDance and video-streaming platform iQiyi.
“Singapore and the broader ASEAN region are key markets for growth for expanding Chinese emerging corporates. A majority of these clients set up holding companies in Singapore for their ASEAN units,” said Lin Hsiu-Yi, ASEAN and Singapore head at Citi Commercial Bank.

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ASEAN refers to the Association of Southeast Asian Nations, an economic bloc comprising 10 countries in the region including Indonesia, Singapore and Vietnam.
The new China desk is headed by Mona Zhang, a banker who previously focused on mid-sized companies at Citi Commercial Bank’s office in China. Citi Commercial Bank’s other China-focused desks are in Hong Kong and India.

Singapore’s appeal

The move by several Chinese tech companies to set up or expand operations in Singapore in the past year also comes as a regulatory clampdown on big tech is underway in China. Regulators have targeted monopolistic practices, the collection and use of data — and have now turned their attention to how companies use algorithms to sell products to consumers.
Citi said its revenue from supporting client activity and flows from China to Singapore more than doubled last year compared with the previous year. The number of China-based clients that the American banking giant works with in Singapore grew 35% last year, said Citi.

Citi shrinks retail banking

The set up of Citi Commercial Bank’s new China desk in Singapore followed the bank’s announcement in April that it plans to exit retail banking in 13 markets. Many of those markets are in Asia-Pacific, including Australia, China, India and Indonesia.   
Citi Chief Executive Jane Fraser told CNBC in April that the bank was “doubling down” in areas such as institutional banking globally and wealth management in the U.S. and Asia. Commercial banking is part of Citi’s institutional business.
Within Asia, the “strong presence” of China in trade flows and business activity means the bank will look to expand the China desk in Singapore and set up new ones in other markets, said Rajat Madhok, head of Citi Commercial Bank in Asia-Pacific.
Citi Commercial Bank operates in 11 Asia-Pacific markets, which contribute around one-third of the bank’s global commercial banking revenue.

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THE ECONOMIC recovery from the covid-19 pandemic is lopsided in many ways. Vaccinations have allowed some countries to bounce back rapidly, even as others struggle. Demand is surging in some sectors but still looks weak in others. Another big source of unevenness is slowly becoming clear. As national economies come back to life, cities are lagging seriously behind. Before the pandemic cities seemed invincible, with economic and cultural power becoming ever more concentrated in tiny geographical areas. In 2000 the total daily salary bill for everyone working in inner London was twice what it was in the outer boroughs; by 2019 it was three times as high. Over the same period job growth in Sydney’s inner districts was 40% faster than elsewhere in its metropolitan area. “Triumph of the City”, a book published in 2011 by Edward Glaeser of Harvard University, summed up the urban-centric mood. The fact that Mr Glaeser has chosen to call his latest book (written with David Cutler) “Survival of the City” shows how much has changed. The exodus from urban areas at the start of the pandemic, which was motivated by fear of catching the virus and which many assumed would be temporary, now looks more permanent and indicative of a deeper shift in preferences. The big question is whether this is something to worry about.One way to take the pulse of global cities is to use real-time mobility indicators. The Economist has constructed an “exodus index” using Google data on visits to sites of retail and recreation, public transport and workplaces, and which compares mobility in large cities with that in their respective countries. In America, Britain, France and Japan activity remains substantially lower in cities than it does nationally (see chart 1). According to OpenTable, a booking platform, restaurant reservations in cities are low compared with elsewhere. Bookings in Canada are 8% above their pre-pandemic level but 9% lower in Toronto. Only a fifth of San Franciscan office workers are in the building, suggest data from Kastle Systems, a technology firm. Some parts of San Francisco feel more like an abandoned Rust Belt city than a tech hub.Rural areas are not the prime beneficiaries of this shakeout. In the early part of this year sparsely populated American counties were a lot busier than dense ones, compared with their pre-pandemic levels. But in most places their advantage has faded (though activity in Japan may still be shifting slightly into the most sparsely populated areas). The data point more clearly to a different sort of reallocation. Like an egg broken onto a pan, economic activity is gradually seeping outward from the centre. What were once the liveliest urban areas are becoming less so. The less glamorous ones are taking more of the spoils.Our mobility index hints at this trend. Central Paris is still much less lively than the rest of Île-de-France. In America rents in the 300 densest postcodes have fallen by 5% since the pandemic began, but are unchanged in the 300 next-densest areas. Large companies report similar trends. “Suburban-type stores have done better than the urban stores,” said Peter Nordstrom, the president of the eponymous department-store chain, on an earnings call; Starbucks’s chief executive said that “transactions in the current environment have migrated from dense metro centres to suburbs and from cafés to drive-throughs”.Opinion is divided on whether the spreading out of economic activity is welcome. Certainly if you own commercial property downtown you might be facing losses. But economists have two longer-term concerns. The first relates to employment. As a new paper by Lukas Althoff of Princeton University and colleagues describes, emptier offices and fewer tourists in cities could mean less employment for low-wage workers such as baristas and taxi drivers. The second worry is productivity. A core insight of urban economists is that cities, by cramming lots of different people into a small space, help foster new ideas and technologies. Messrs Glaeser and Cutler worry that a world of remote work, and thus of less vibrant cities, could be one in which people find it harder to make personal bonds and soak up knowledge from others. That would hit living standards. Are the two concerns valid? On employment, there is reason for optimism. It is certainly true, as Mr Althoff and colleagues show, that low-skill service workers in big cities bore much of the brunt of the downturn, as well-paid folk retreated to their home offices. In January this year lower-skilled workers in America’s densest commuting zones, making up 40% of all workers in them, accounted for almost 60% of working hours lost since the start of 2020. Yet economies have been extraordinarily quick at reallocating jobs away from struggling city centres to places with more demand, raising overall employment. On a recent earnings call the CEO of Shake Shack, a purveyor of sugar and fat, said that its focus in the coming year would be “predominantly suburban Shacks”. The nearest Pret A Manger to The Economist’s office in London has closed; but one is opening next to the Underground station near your correspondent’s house. Employment in Britain’s suburbs is up by 2% compared with a year ago, even as nationwide employment is down. In America, too, labour demand is shifting away from the biggest cities (see chart 2). There is, however, less evidence of egg-cracking in Australia, which until recently had largely escaped the ravages of covid-19. Employment in Sydney continues to be concentrated in dense areas. It is harder to know whether the shift from city centres will harm productivity. Were people stuck at home all the time, making new connections and discovering new ideas would be difficult. However, even spending just 30% of working time at the office—the current average across American cities—might not hit innovation all that much. At home white-collar workers can complete taxing tasks in peace, giving them time to collaborate when in the office. That is the message from recent research by Humu, a software firm, which analysed call-centre employees at a large company before the pandemic. One or two work-from-home days a week may make people more productive on both their at-home and in-office days. By contrast with past recessions, productivity growth in America has sped up during the pandemic, instead of slowing down.Cities could yet snap back to their pre-pandemic state: tourism could recover and bosses could insist that people return to the office. But even if that does not happen, cities may not be not finished.Mayors are shifting their focus from attracting firms to attracting residents, and thus the property and consumption taxes they bring, by improving quality of life. Edinburgh’s George Street and London’s Oxford Circus are likely soon to be pedestrianised; San Francisco plans to make it permanently easier to set up outdoor dining. Some California state senators also want to make it easier to turn underused retail property into the badly needed residential sort, part of a wider push to boost housing supply. The pandemic will not destroy cities—but it will change them. ■ More

Federal unemployment benefits end this weekend for millions of people. They’ve been in place since the CARES Act was passed in March 2020.
Many recipients reached by CNBC are scared of what’s to come. The Covid delta variant threatens their ability to find new jobs.
Ending enhanced jobless benefits will likely push some workers off the sidelines, but could also hurt the economy if households cut spending in response.

A woman waits in a line outside a temporary unemployment office in Frankfort, Kentucky in June.
Bryan Woolston | Reuters

Pandemic unemployment benefits

The federal government expanded the safety net for the jobless to a historic degree last year, when the U.S. was in the throes of its most rapid economic downturn in history. The CARES Act, passed in March 2020, raised weekly jobless benefits by $600 a week (and later, $300 a week), offered aid to workers typically ineligible for traditional state benefits, such as self-employed, gig workers and part-timers, and extended how long people could collect aid. 

Congress twice extended the programs, last December and again this March, but opted not to do so a third time. 
That means about 9 million people are poised to lose those benefits by Labor Day, according to an estimate from The Century Foundation. Another 3 million or so will see their weekly benefits reduced.

Families are scared of what comes next. 
“It is going to leave some folks in a bad situation,” Sylvia Allegretto, an economist and co-chair of the Center on Wage and Employment Dynamics at the University of California, Berkeley, said of this weekend’s unemployment cliff. 
“The economy, for many reasons, has not been fully recovered and won’t be for quite a while given this unfortunate but massive surge in Covid we’re seeing across the country,” she added. 
The delta variant has added pressure to an already uneven economic recovery. The U.S. added 235,000 jobs in August, a marked slowdown from the roughly 1 million in both June and July. 

Disincentive to work?

Of course, some economists believe the programs should end now, arguing that enhanced federal benefits offer an incentive to stay home rather than look for work. White House officials also recently signaled that federal benefits should cease as planned in most states.
There were a record 10 million job openings in June, which exceeds the number of officially unemployed individuals. That dynamic has led some economists to question why those who are out of work aren’t rushing in to take available jobs.
“It’s hard to justify having a program that’s encouraging people not to work at the same time employers are struggling to keep their business [going],” said Rachel Greszler, a research fellow in economics, budget and entitlements at the Heritage Foundation, a right-leaning think tank.

About half of U.S. states, primarily led by Republican governors, withdrew from most or all of the federal programs in June or July to encourage people to jump back into the labor market. 
“I think it’s [a] misjudgment,” said Aaron Davison, a 28-year-old unemployed Orlando resident. “I was grateful for my job.”
Florida ended a $300-a-week federal supplement to benefits in June; the remaining programs lapse this weekend.
Davison, who had been a turnstile attendant at the Universal Studios Florida theme park, has been using unemployment benefits to help support his parents, with whom he lives and who are unable to work due to medical issues. Though he’s been actively applying for jobs for several weeks, he hasn’t landed anything yet. 
Without work or unemployment benefits, he expects to rely on money raised from a GoFundMe page to help make ends meet.
“[An] extension could have saved families from financial ruin,” Davison said.

Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh urged states with high unemployment rates to continue issuing aid to gig workers and the long-term unemployed using federal funds allocated by the American Rescue Plan.
It appears few if any plan to do so, though. The U.S. Department of the Treasury declined comment. The U.S. Department of Labor isn’t tracking state decisions because it doesn’t oversee use of those federal funds, a spokeswoman said.
Some economists are concerned that cutting off benefits too soon, while people are struggling to find jobs, could further slow the economic recovery. 
For example, unemployed workers were more likely to find jobs in states that ended federal benefits in June relative to those that didn’t, according to a recent paper written by researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto.

But about 7 in 8 benefit recipients in those states were still not re-employed by early August, leading to a roughly $2 billion aggregate decrease in household spending.
Tammy Dotson, 52, has had to cut spending after officials in South Carolina withdrew federal benefits in June. Dotson, who fixed up rental houses before the pandemic, is having a hard time drumming up business, which she attributes to Covid-related fears about in-person work. 
“We’re struggling to pay our bills,” said Dotson, who was self-employed. “What about the [people] who can’t go back to work, or something is stopping them so they can’t seek work?” she asked. 

Factors beyond benefits

Factors beyond enhanced unemployment benefits may be playing a larger role in keeping many Americans from returning to work, according to labor economists. Some, for example, have reassessed their job flexibility and careers after months out of work. 
Danielle Miess, 30, a former travel agent in Philadelphia, doesn’t want to return to a 9-to-5 job. She plans to rely on freelance work including housesitting, pet sitting, selling clothing and vacation planning to pay her bills when her unemployment benefits end. 
If she can’t make enough money to cover her expenses that way, she could also drive for Instacart, she said.
“I think I have enough backups that I should be OK,” she said. 

Danielle Miess, 30, decided that she doesn’t want to return to a traditional day job post-pandemic.
Danielle Miess

Others may still be on the sidelines due to the ongoing public health risk, childcare constraints and insufficient pay or benefits, according to Fiona Greig, co-president of the JPMorgan Chase Institute. 
Chenon Hussey, 42, got pandemic unemployment benefits after the pandemic dried up work for her small motivational speaking business in West Bend, Wisconsin. A few months ago, she found part-time work as a mental health counselor for a county government, but her hours aren’t consistent week to week. 
Hussey and her husband have four children living at home, a 6-year-old and three teenage daughters, one with developmental disabilities. They are worried that they may have to move their special needs child to a group home if they can’t continue to pay out of pocket for the intensive care she requires. 

Chenon Hussey, left, and her husband are worried about providing for their family, including one child with special needs, once federal unemployment insurance benefits end.
bgraves photography

“We don’t know what we’re going to do,” said Hussey, who also co founded Wisconsin Unemployment Action Group during the pandemic.
Her husband, a master welder, also lost his job during the pandemic but was able to draw on state unemployment. Still, his weekly checks will decrease by $300 when benefits end this weekend. He’s been applying to jobs but hasn’t found anything suitable yet, according to Hussey. 
“Every job that he has applied for has been a $20-an-hour pay cut,” Hussey said. “That isn’t worth it.
“That would cost our family more than it would gain.” 
Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

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Visitors crowd around the Nvidia booth at the 2016 China Digital Entertainment Expo, known as ChinaJoy, in Shanghai.
STR | AFP | Getty Images

Check out the companies making headlines in midday trading.
Didi Global — Shares of the Chinese ride-hailing giant climbed 2.3%, on pace for double-digit gains on the week amid a Bloomberg News report of Beijing potentially taking over the company. Beijing is eyeing a plan to take Didi under state control by acquiring a stake through government-run firms including Beijing Tourism Group, the report said. It is still an early-stage proposal pending government approval, according to the report, which cited people familiar with the matter.

MongoDB — Shares of the database company surged more than 26% Friday after reporting quarterly results late Thursday. The firm recorded a loss of 24 cents per share, which was narrower than the loss of 39 cents estimated by analysts. However, it beat revenue estimates and gave positive revenue guidance for the current quarter.
PagerDuty — Software company PagerDuty jumped nearly 7% after reporting quarterly results. It reported an adjusted loss of 13 cents per share, compared to the 11 cents analysts estimated, but issued a strong outlook for current-quarter revenue.
DocuSign — The e-signature solution provider saw its stock rise 5.2% after reporting adjusted earnings of 47 cents per share, which beat Wall Street forecasts by 7 cents. DocuSign also raised its full-year guidance for total revenue, subscription revenue and billings.
Joann Inc — Shares of the crafts company sunk more than 19% after Telsey downgraded the stock to market perform from outperform and lowered its price target on the stock to $14 from $18. The firm said there is “limited visibility” into how sales will normalize in a post-Covid era, after Joann saw heightened demand during the pandemic.
Broadcom — The chipmaker climbed more than 1% after reporting quarterly earnings. The company recorded adjusted earnings of $6.96 per share, beating estimates by 8 cents. It also beat slightly on quarterly revenue and gave an upbeat outlook on the current quarter, saying it’s still seeing strong demand in the 5G mobile market.

fuboTV — The sports streaming company nearly 1% after Arizona’s gaming department granted FuboTV a mobile betting license in the state. That makes Arizona the second state to allow mobile betting for Fubo, after its recent approval by the state of Iowa.
Nvidia — Shares gained 2% after Jefferies reiterated its buy rating on the stock and hiked its price target to $260 from $233. The firm said Nvidia can run even higher due to its growing data center and software segments.
 — CNBC’s Yun Li and Hannah Miao contributed reporting

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