Finance

LONDON — Top financial institutions are calling for global cooperation on central bank digital currencies.The Bank for International Settlements, the global body for central banks, issued a report Friday saying that central banks should work to achieve “interoperability” between their digital currency projects.This can be achieved through a number of ways, the report said, such as creating common standards and establishing international payment infrastructures.The report was written in collaboration with the International Monetary Fund and the World Bank.Several central banks are exploring digital currencies which would be issued by central banks to commercial banks or directly to the public. Their efforts have intensified over the past year amid a decline in cash usage and growing interest in cryptocurrencies like bitcoin.A photo illustration showing a gold necklace, silver coins and visual representations of bitcoin placed on top of different currencies.Yuriko Nakao | Getty ImagesThe People’s Bank of China has been leading the way, with real-world trials already live in several cities.”I think that each central bank, each country should have its own sovereign currency,” Agustín Carstens, general manager of the Bank for International Settlements, or BIS, told CNBC’s Annette Weisbach on Friday.”Given that pretty much all central banks are thinking about this, it’s a unique opportunity for the different central bank digital currencies to be interoperable,” Carstens said, adding global central banks should ensure their systems are “congruent with each other” and that “transactions in different currencies can be done in a seamless way.”The BIS is an umbrella group for central banks, representing institutions from the U.S. Federal Reserve to the People’s Bank of China. Its report with the IMF and World Bank said that central bank digital currencies, or CBDCs, could enable cheaper and faster cross-border payments.At present, “payment from, let’s say Mexico to the U.S., can take days,” Carstens said. “Sometimes the commissions you pay are 7%. That’s ridiculous.””What we need to do is take advantage of the fact that pretty much everybody is starting from a clean slate, so that we can incorporate from the origin the interconnectedness between the different systems.”However, the BIS report highlighted a number of outstanding issues with CBDCs that still need to be ironed out, such as the role of “private industry” actors.Diem, a digital currency proposed by Facebook, drew widespread condemnation from regulators when it was initially launched in 2019.Meanwhile, so-called stablecoins like tether — which are often backed by sovereign currencies like the dollar — have attracted growing criticism from economists and regulators due to a perceived lack of transparency. More

In this articleAALPeople walk past GM vehicles on display at the General Motors world headquarters building at Detroit’s Renaissance Center.Paul Hennessy | SOPA Images | LightRocket | Getty ImagesTake a look at some of the biggest movers in the premarket:Levi Strauss (LEVI) — The denim maker added about 3% after reporting quarterly earnings Thursday night that crushed Wall Street expectations. Levi reported adjusted earnings of 23 cents per share, on revenue of $1.28 billion. That beat analyst expectations of 9 cents per share on revenue of $1.21 billion, according to Refinitiv.General Motors (GM) — The automaker’s stock rose more than 3% in premarket trading, after Wedbush rated it as an outperform and said its stock could jump more than 50%. As the company proves out its vision for electric vehicles in the coming years “the stock will be re-rated more as a disruptive technology and EV play, rather than its traditional auto valuation,” the Wedbush analyst said.Bank of America (BAC), Citigroup (C) — Bank stocks traded higher as bond yields bounced back up Friday morning, easing concerns about a global economic slowdown that were  heightened when yields fell Thursday. Bank of America and Citigroup shares are higher by about 1.6%. JPMorgan and Wells Fargo are trading about 1% higher. The sector’s profitability is closely linked to the level of rates and generally increases as long-term rates rise.Delta (DAL), United (UAL), American (AAL) Airlines — Airline stocks are moving higher after dipping on Thursday amid concern about the global economic recovery from the pandemic. American Airlines is trading almost 2% higher, and Delta and United shares rose 1.2%.Norwegian Cruise Line (NCLH), Carnival (CCL) — Cruise lines are also bouncing back after sliding Thursday in response to concerns about the economy slowing down. Norwegian Cruise added 2.2% in premarket trading and Carnival rose 2.5%.Didi Global (DIDI), Tencent Music Entertainment (TME) — The U.S. traded shares of several Chinese companies bounced after their big declines earlier in the week, set off by the Chinese government’s crackdown on stocks that trade on U.S. exchanges. Didi shares rose 3.4% in premarket trading and Tencent Music is up 2.4%, while ecommerce platform Pinduoduo has gained more than 3% and search giant Baidu gained 2.3%. Tech giant Alibaba is also up 1.5%.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today More

China’s Ministry of Commerce Spokesman Gao Feng addressed reporters at a regular press conference on April 29, 2021 in Beijing, China.VCG | Visual China Group | Getty ImagesBEIJING — China’s Ministry of Commerce plans to scrutinize foreign investment more closely on the basis of national security.The ministry’s priorities for the next five years — released publicly this week — include reference to the “Measures for Security Review of Foreign Investment” that took effect in January. These measures generally require pre-review of foreign investment plans related to the Chinese military, and important agriculture, energy and technology products.While the brief mention of the review system — on page 43 of the 46-page document — doesn’t necessarily represent new action by Chinese authorities, the reference does indicate foreign investment into China can face greater scrutiny.In the last few years the U.S. has increased its scrutiny of Chinese investment in the country, although American businesses have faced far more restrictions on where they can invest in China.In a section about preventing risks form foreign investment, the commerce ministry said it would “improve the national security review system for foreign investment, and open security investigations into foreign investment that affects or could affect national security.” That’s according to a CNBC translation of the Chinese text.However, the ministry also said it would expand the areas that foreign capital could invest in, including strategic areas such as telecommunications, the internet, education and health care. The ministry said it would further relax the ability of foreigners to make strategic investments in publicly listed companies.The document follows the release of the central government’s 14th five-year plan in March. Beijing issues such economic development priorities every five years, and government departments and local authorities subsequently release details on how they plan to implement national goals.The Ministry of Commerce plan noted the need to respond to the impact of trade tensions with the U.S., while increasing collaboration with U.S. states and local governments.Read more about China from CNBC ProDan Niles says he’s now tempted to buy Chinese tech stocks – here are 2 of his favoritesDelisting of Chinese stocks on U.S. exchanges appears inevitable, Cowen saysCramer questions why anyone would buy a Chinese IPO ever again after Didi debacleThe ministry forecast average annual growth of 5% in retail sales through 2025, with the portion sold online growing at a slightly faster 7.6% pace. Imports and exports of goods will likely grow an average of 2% a year through 2025, the plan said.Overall, the ministry emphasized how it would work to build up China’s domestic market, in line with Beijing’s “dual circulation” plan. More

IN 2016 DANIEL KINUTHIA started a small business in Kenya making shoe uppers for the local subsidiary of Bata, a multinational footwear company. He was short of finance and equipment, and his contract with Bata ended when covid-19 hit. But he says supplying Bata and visiting its factory taught him “what happens, how the shoe is marketed, the kind of shoe that can be sold”. Now he dreams of using those skills to build a factory of his own.Listen to this storyYour browser does not support the element.Enjoy more audio and podcasts on More

Traders on the floor of the New York Stock Exchange.Source: NYSEStock futures were flat in overnight trading Thursday after the major indexes fell amid concerns of a slowdown in economic growth.Futures on the Dow Jones Industrial Average shed 25 points, or 0.07%. S&P 500 futures and Nasdaq futures each dipped 0.10%.Thursday’s losses came as the proliferation of the highly infectious delta Covid variant also fueled worries about the global economic recovery. The Olympics announced a ban of spectators at Tokyo’s summer games as Japan declared a state of emergency to curb the spread of coronavirus.The Dow closed Thursday’s regular session 259.86 points, or 0.75%, lower. The S&P 500 dipped 0.86% while the Nasdaq broke a four-day win streak by falling 0.72%.All three major averages are on track to close lower for the week.Shares of companies tied to the economic comeback weighed on the market Thursday. Major cruise line, airline and home improvement stocks slumped. Chip stocks also dropped and Big Tech names retreated after gaining in previous sessions.”[T]he market continues to contemplate what to do after growth peaks and the Fed turns off the spigot (neither of which have necessarily happened yet) and ahead of a 2Q21 earnings season that starts next Tuesday,” Goldman Sachs’ Chris Hussey said in a note Thursday.The latest jobless claims report released Thursday also indicated a potential slowdown in the labor sector as first-time applicants for unemployment benefits unexpectedly jumped to 373,000 in the week ending July 3. Economists were looking to see 350,000 initial claims, according to Dow Jones. More

In this articleLEVIGMPSMTACCDA sign in front of the Levi Strauss & Co. headquarters on April 09, 2021 in San Francisco, California.Justin Sullivan | Getty ImagesCheck out the companies making headlines after the bell Thursday: Levi Strauss — Shares of Levi Strauss added 3.2% after the retailer crushed Wall Street expectations in its fiscal second-quarter results. Levi reported adjusted earnings of 23 cents per share on revenue of $1.28 billion. Analysts expected earnings of 9 cents per share on revenue of $1.21 billion, according to Refinitiv.General Motors — General Motors shares gained 1.3% after Wedbush initiated coverage of the stock with an outperform rating and $85 price target. That target implies an upside of more than 51% from Thursday’s close. “CEO Mary Barra along with other key executives has led the legacy auto company back to the top of the auto industry in the United States,” Wedbush’s Dan Ives said in a note.PriceSmart — Shares of PriceSmart rose 2.4% in thin trading on the back of the warehouse club operator’s third-quarter earnings report. PriceSmart posted earnings of 73 cents per share, compared with a FactSet estimate of 65 cents per share expectation.Accolade — Accolade shares added 1.2% in low-volume trading following after the company released its latest quarterly numbers. The health-care technology company reported revenue of of $59.5 million versus analysts’ $55.8 million estimate, according to FactSet. Accolade also posted a smaller-than-expected EBITDA loss. More

In this articleCOINNVDADIDISCHWJPMKSUA pedestrian walks past a Charles Schwab office in New York.Scott Eells | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading.Charles Schwab — Shares of the online broker dipped over 3% after Goldman Sachs downgraded the stock to neutral from buy. The Wall Street firm said investors should back away from the brokerage after a surge in customer trading activity helped to push the stock close to its fair value.Didi Global — The Chinese ride hailing company’s shares slid 5.8% on Thursday as it undergoes a security review from regulators in its home country. The Chinese government has blocked downloads of the company’s app, stifling further growth. The stock is now down nearly 28% for the week.Railroad stocks — The share prices of major railroads took a hit on Thursday after the Wall Street Journal reported that the Biden administration is targeting consolidation among railroads and ocean shipping companies. Kansas City Southern is trading 7.8% lower, while Norfolk Southern shares fell 7.1%. CSX is down 6% and Union Pacific is down 4.3%.Banks — Banks are under pressure Thursday amid growing concern about the pace of the economic recovery. Financial institutions like banks are typically viewed as cyclical stocks whose performance is tied to the path of the economy. JPMorgan Chase fell 1.7%, and Bank of America dropped 2.4%. Wells Fargo is down 2.5%, and Citigroup shares tumbled 1.7%.Coinbase — Coinbase shares fell more than 3% Thursday in tandem with the price of bitcoin, which tumbled about 6% to approximately $32,000. Coinbase’s business is closely tied to the price of bitcoin and ether, though that may change in the future as it expands. The RealReal — Shares of The RealReal added 5% after Needham initiated coverage of the authenticated luxury consignment stock with a buy rating. The firm said it sees “upside earnings revisions” for the retailer. Needham also noted “there is pent-up demand, as evidenced by spending on apparel and accessories climbing almost 70% YTD through May.”Advanced Micro Devices, Nvidia — Chip stocks are in the red, amid concern about global growth. The declines came despite Oppenheimer raising its price target on Nvidia and Goldman Sachs raising its price target on Advanced Micro Devices Thursday morning. Advanced Micro Devices is down almost 1% and Nvidia is down 2.3% — CNBC’s Maggie Fitzgerald, Hannah Miao, Jesse Pound contributed reportingBecome a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today More

In this articleWFCA man walks past a Wells Fargo Bank branch on a rainy morning in Washington.Gary Cameron | ReutersWells Fargo is ending a popular consumer lending product, angering some of its customers, CNBC has learned.The bank is shutting down all existing personal lines of credit in coming weeks and no longer offers the product, according to customer letters reviewed by CNBC.The revolving credit lines, which typically let users borrow $3,000 to $100,000, were pitched as a way to consolidate higher-interest credit card debt, pay for home renovations or avoid overdraft fees on linked checking accounts.”Wells Fargo recently reviewed its product offerings and decided to discontinue offering new Personal and Portfolio line of credit accounts and close all existing accounts,” the bank said in the six-page letter. The move would let the bank focus on credit cards and personal loans, it said.Wells Fargo CEO Charles Scharf has been forced to make difficult decisions during the coronavirus pandemic, offloading assets and deposits and stepping back from some products because of limitations imposed by the Federal Reserve. In 2018, the Fed barred Wells Fargo from growing its balance sheet until it fixes compliance shortcomings revealed by the bank’s fake accounts scandal.The asset cap has ultimately cost the bank billions of dollars in lost earnings, based on the balance sheet growth of rivals including JPMorgan Chase and Bank of America over the past three years, analysts have said.It has also affected Wells Fargo’s customers: Last year, the lender told staff it was halting all new home equity lines of credit, CNBC reported. Months later, the bank also withdrew from a segment of the auto lending business.With its latest move, Wells Fargo warned customers that the account closures “may have an impact on your credit score,” according to a frequently asked questions segment of the letter.Another part of the FAQ asserted that the account closures couldn’t be reviewed or reversed: “We apologize for the inconvenience this Line of Credit closure will cause,” the bank said. “The account closure is final.”Simplify offeringsWells Fargo didn’t directly answer questions as to what role, if any, the Fed asset cap played in its latest move.The bank gave this statement: “In an effort to simplify our product offerings, we’ve made the decision to no longer offer personal lines of credit as we feel we can better meet the borrowing needs of our customers through credit card and personal loan products.”After publication of this article, a Wells Fargo spokesman gave additional remarks: “We realize change can be inconvenient, especially when customer credit may be impacted,” the bank said, adding that it was “committed to helping each customer find a credit solution that fits their needs.”Customers have been given a 60-day notice that their accounts will be shuttered, and remaining balances will require regular minimum payments at a fixed rate, according to the statement. When it was offered, the credit lines had variable interest rates ranging from 9.5% to 21%.The move is a strange one given the banking industry’s need to boost loan growth.  After a burst of commercial lending during the early days of the pandemic, loan growth has been hard to muster. Corporations have used money raised in stock and debt issuance to retire bank credit lines, and consumers stuck at home had fewer reasons to use credit cards.In fact, last year big banks experienced the first aggregate drop in loans in more than a decade, according to Barclays bank analyst Jason Goldberg. Of the four largest U.S. banks, Wells Fargo saw the worst decline.After banks saw that borrowers held up far better than they had initially feared, the industry recently began marketing new credit cards with large sign-on bonuses in an effort to boost lending.Making the switchWells Fargo doesn’t disclose how many customers used the credit lines it is eliminating. It had $24.9 billion in loans in a category called “other consumer” as of March, which was 26% lower than the year-earlier period.One customer said the change is prompting him to switch banks after more than a decade with Wells Fargo. Tim Tomassi, a Portland, Oregon, programmer, said he used a personal line of credit linked to his checking account to avoid expensive overdraft fees.”It’s a bit upsetting,” Tomassi said in a phone interview. “They’re a big bank, and I’m a small person, and it feels like they’re making decisions for their bottom line and not for customers. A lot of people are in my position, they need a cushion every once in a while from a line of credit.”Tomassi said he is considering opening an account at Ally or Chime, banking players that don’t charge overdraft fees.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today. More