Finance

Tourists visit the Wall Street bull statue in the Financial District, New York City.Drew Angerer | Getty ImagesU.S. stock futures opened slightly lower Tuesday night after the S&P 500 ended a seven-day winning streak, its longest since August.Dow Jones Industrial Average futures fell by 54 points, or 0.16%. S&P 500 and Nasdaq 100 futures dipped 0.10% and 0.06%, respectively.During the regular session, the 30-stock Dow fell 208.98 points, or 0.6%. The S&P 500 ended the day down by 0.2%. The Nasdaq Composite rose nearly 0.2%. The tech-heavy index rose to a fresh all-time high on Tuesday.Investors may be worried the economy might be approaching its peak and that a correction could be on the way. In addition to complacency in the market, the combination of profit-margin pressures, inflation fears, Fed tapering and possible higher taxes could contribute to an eventual drawdown, market strategists say.Recovery-centered stocks like Caterpillar, Chevron and JPMorgan Chase pulled back Tuesday while Big Tech stocks like Amazon, Apple and Alphabet gained. Energy stocks took a hit after West Texas Intermediate crude futures hit their highest level in more than six years before turning negative.The 10-year Treasury yield fell 7.2 basis points to 1.36% as investors react to the potential of slower economic growth. That was its lowest level since February. The yield on the 30-year Treasury bond was 6.4 basis points lower at 1.98%.Investors will be listening more clues on the direction of the Federal Reserve’s monetary policy when it releases its latest meeting minutes Wednesday afternoon, which could be a catalyst for a move in both bonds and stocks.The Fed’s minutes are expected to be dovish with the central bank looking for progress in the labor market and not worried that recent inflation will become a persistent trend. Slowing down the bond buying would be the Fed’s first major retreat from the easy policies it put in place when the economy shut down last year.The end of the Fed’s $120 billion a month in Treasury and mortgage purchases would also signal that the central bank’s next move could be to raise interest rates.Weekly mortgage applications and the Job Openings and Labor Turnover Survey are also scheduled to be released Wednesday.— CNBC’s Patti Domm contributed reporting. More

Nextdoor, a social media app for neighborhoods, announced Tuesday it will go public through a reverse merger with a special purpose acquisition company in a deal valuing the firm at $4.3 billion. “It’s going to bring in a lot of proceeds, $686 million of gross proceeds, on a real blue-chip set of investors” that will help fuel expansion, Nextdoor CEO Sarah Friar told CNBC on Tuesday. The deal with special purpose acquisition company Khosla Ventures Acquisition Co II includes a private investment of $270 million from Baron Capital Group, accounts advised by T. Rowe Price Associates and Cathie Wood’s Ark Invest.On “Squawk on the Street,” Friar said San Francisco-based Nextdoor will continue expanding into new territories, which in turn generates more content for the platform. She said it will continue investing in both small businesses and in its proprietary advertising technology to support its monetization and revenue streams. The platform, created in 2011, allows users to organize events, alert neighbors of danger and spread useful information such as business postings or pandemic-related news. Earlier this year, Nextdoor debuted an anti-racism notification after long facing criticism for racist comments on its platform.Nextdoor is used in more than 275,000 neighborhoods around the world and in nearly 1-in-3 U.S. households, according to a company press release.”Nextdoor is the neighborhood social network, just like LinkedIn is the professional network,” Khosla Ventures founder Vinod Khosla said on “Squawk on the Street,” appearing alongside Friar.[Nextdoor] has … not only the strong network effects but very strong local online-offline effects, which are very, very rare,” Khosla added, while expressing confidence in the company’s metrics and future potential growth.Friar, who served as Square’s chief financial officer from 2012 to 2018, said that last year Nextdoor saw its daily active users grow by 50%. It also reported accelerating average revenue per user, or ARPU, during the first and second quarters this year, Friar added.The increases for ARPU are driven by growing member engagement on the platform and more sophisticated ad tech platforms, Friar said.The company is also working on other ways to boost revenue, she added, “particularly around local commerce, local businesses, and really interesting ad formats that you can’t get anywhere else.” Friar noted Nextdoor’s collaboration with Moderna and Albertsons Companies grocery stores on a map of Covid vaccine locations.”Only Nextdoor can take that message into a local level and make it happen,” Friar said.Nextdoor, which was included in CNBC’s Disruptor 50 companies in 2015, gets an implied valuation of $4.3 billion through the SPAC deal. In September 2019, the company was valued at just over $2 billion, TechCrunch reported at the time.Nextdoor’s merger with Khosla Ventures’ SPAC is expected to close in the fourth quarter of 2021. The company will trade under the ticker symbol “KIND.”— Reuters contributed to this story. More

In this articleMMMFANGTMEAAPLDIDIAMZNJD.com is one of the biggest e-commerce and logistics company in China.Zhang Peng | LightRocket | Getty ImagesCheck out the companies making headlines in midday trading.Didi — Shares of the Chinese ride-hailing giant Didi Chuxing plunged 19.5% after China announced that new users in the country would not be able to download the app while it conducts a cybersecurity review of the company. The investigation came less than a week after the Chinese app listed on the New York Stock Exchange.Tencent Music — The U.S.-traded shares of several Chinese companies took a hit on Tuesday after the country’s regulators began a security review of Didi. Shares of Tencent Music fell 6.8%, while shares of Baidu declined almost 5%. Kanzhun and Full Truck Alliance, two smaller companies also under review by regulators, dropped 16% and 6.7%, respectively.Nov — Shares of the energy name dipped more than 6% as oil prices pulled back. West Texas Intermediate crude futures hit their highest level in more than six years earlier in the session before turning negative, which weighed on the energy sector broadly. Diamondback Energy also slid about 7%, while Occidental and Halliburton were down more than 6%.Amazon — The e-commerce giant saw its stock rising 4.7% to lead Big Tech shares higher despite overall weakness in the stock market. Andy Jassy officially took over as CEO on Monday, and Jeff Bezos became the executive chairman of the board. This caps off Bezos’ monumental run leading Amazon since its inception in 1994. 3M — The industrial products stock fell 1.5% after Credit Suisse downgraded it to neutral from outperform, saying it has concerns about two “difficult to quantify liabilities” weighing on 3M, including legal issues. “Despite fundamental potential upside from a cyclical upturn in global IP, and potential inventory restocking, we think it will be difficult for 3M to regain its premium multiple at this point in the cycle,” analyst John Walsh said.Pfizer — The pharmaceutical giant saw its stock tumble more than 1% after Israel’s health ministry reported its Covid-19 vaccine showed less effectiveness in preventing infection and symptomatic disease as the highly infectious delta variant spreads worldwide, including in Israel. Israel also said the Pfizer vaccine remains effective in preventing serious illness.Apple — Shares of the technology giant added 1.5% after JPMorgan raised its price target on the stock to $170 from $165 and said to “start buying shares again.” The firm said despite first-half underperformance, Apple’s stock historically outperforms the broader market from July to September leading up to fall iPhone launches, and expects shares to do the same in 2021.Tesla — Tesla shares fell 2.8% despite JPMorgan raising its price target on the automaker Tuesday morning. That change came after Tesla reported Friday that said global deliveries came in slightly ahead of its model. Frontier Communications — The telecommunications cable company’s stock is trading 5.2% up after Goldman Sachs initiated coverage of it with a buy rating, saying it has “an opportunity to create material value as it deploys and drives penetration of its fiber network.”  — CNBC’s Pippa Stevens, Yun Li, Jesse Pound and Hannah Miao 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

Dana Neely | Stone | Getty ImagesThe Biden administration made it easier for many families to qualify for aid toward funeral costs after loosening rules for a Covid-era program.The Federal Emergency Management Agency, which administers the program, changed its funeral-assistance policy related to deaths that occurred in the early months of the pandemic.Applicants for funeral assistance — up to $9,000 per deceased person and $35,500 per application — initially had to provide a death certificate listing Covid-19 as the cause of death.More from Personal Finance:How some companies play ‘fast and loose’ with executive benefitsHow much do you know about claiming Social Security?Retirees feel the sting of inflationBut early on, death certificates may not have cited the virus. Testing wasn’t as widespread and the coronavirus wasn’t as well understood by the medical community, for example. Many families may have been denied as a result.FEMA’s tweak offers reimbursement if applicants submit a statement or letter from the death certificate’s certifying official, medical examiner, or coroner that attributes the death to Covid-19, according to the agency.The change applies to deaths between Jan. 20 and May 16 last year.The new policy offers flexibility to attribute a death to Covid without amending the death certificate, according to FEMA. It also covers the period before the Centers for Disease Control and Prevention published death-certificate guidance in the spring of 2020, the agency said.Individuals must still submit a death certificate linking the fatality to Covid-19 for deaths occurring after May 16.Program funds can reimburse costs associated with funeral services, cremation, a casket or urn, burial plot, marker or headstone, and transportation for up to two people to identify the deceased individual, for example.The program has $2 billion of total funding and opened to applicants in April.Since then, more than 78,000 applicants have received $525 million in assistance, according to FEMA. More than 605,000 people have died from Covid-19, according to Johns Hopkins University data.Scammers targeted the program early on, when there was a high volume of applicants. Criminals posed as government agents who offered to register applicants for assistance, but instead tried to steal money or sensitive personal information, according to the Federal Trade Commission. More

Traders work during the IPO for Chinese ride-hailing company Didi Global Inc on the New York Stock Exchange (NYSE) floor in New York City, U.S., June 30, 2021.Brendan McDermid | ReutersTake a look at some of the biggest movers in the premarket.Didi — Shares of Didi sunk about 20% in premarket trading after Chinese regulators announced a cybersecurity review of the ride hailing company late Friday. The move came less than a week after Didi’s public debut on the New York Stock Exchange.Full Truck Alliance and Boss Zhipin — Chinese regulators also launched an investigation into Boss Zhipin and subsidiaries of Full Truck Alliance, which are both listed in the U.S. Shares of Boss Zhipin, listed under the name “Kanzhun,” fell roughly 10% in early trading. Full Truck Alliance shares plunged about 16% in the premarket.Other Chinese companies — Shares of other Chinese companies publicly traded in the U.S. also dropped after regulators announced cybersecurity reviews. Baidu, Pinduoduo and JD.com shares fell roughly 2% in premarket trading.Oil stocks — Oil company shares rose as oil prices rose to 6-year highs after talks between OPEC and oil-producing allies were postponed indefinitely. The S&P Oil and Gas ETF gained 1.8% in the premarket, while shares of Occidental Petroleum added 1.9%, ConocoPhillips shares increased 1.7% and APA Corporation’s stock ticked 2.2% higher.American Express — American Express shares gained 2.5% premarket after Goldman Sachs upgraded the stock to buy from neutral. The firm also set a price target of $225 per share for American Express, more than 33% above where the stock closed on Friday. Goldman Sachs said the card stock should gain from an increase in consumer spending as the economy recovers.3M —Shares of 3M fell slightly in early trading after Credit Suisse downgraded the industrial products stock to neutral from outperform, citing challenges with legal issues. “Despite fundamental potential upside from a cyclical upturn in global IP, and potential inventory restocking, we think it will be difficult for 3M to regain its premium multiple at this point in the cycle with two, still difficult to quantify liabilities,” analyst John Walsh said.Pfizer — Shares of the pharmaceutical company fell roughly 1% after Israel’s health ministry reported a decrease in effectiveness in Pfizer’s Covid-19 vaccine in preventing infection and symptomatic disease. However, Israel said Pfizer’s Covid vaccine remained highly effective at preventing serious illness. The announcement comes as the highly infectious delta variant spreads in Israel and around the world.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

A courier for Missfresh grocery delivery drives past Chinese ride-hailing company Didi’s offices. Both companies went public in the U.S. in June 2021.Gilles Sabrie | Bloomberg | Getty ImagesBEIJING — For investors in Chinese IPOs like Didi, reading the fine print will become more critical for avoiding losses.Ride-hailing app Didi — dubbed the “Uber of China” — raised $4.4 billion on Wednesday in the biggest U.S. initial public offering of any Chinese company since Jack Ma’s e-commerce giant Alibaba went public in 2014.Two days later, Didi’s shares fell 5.3% after Chinese regulators announced a cybersecurity investigation into the company, suspending new user registrations. Then on Sunday, the agency ordered Chinese app stores to remove Didi’s main app over data privacy concerns. Existing customers can still use the ride-hailing app.Warning signsWhile many investors in the U.S. may never use Didi or know much about China’s regulatory environment, the company — and other Chinese IPOs — disclosed some warning signs in their prospectuses filed with the U.S. Securities and Exchange Commission ahead of the stock offering.On the second page of a section titled “Risks Relating to Doing Business in China,” Didi said it had two meetings with regulators in April and May, along with industry peers. The company warned that in both cases, it could not ensure that efforts to comply would satisfy regulators.The government realized the internet companies, especially the internet giants (were) becoming too powerful to comply with the regulations.Ming LiaoProspect Avenue CapitalIn addition, Didi said in its prospectus it had “not obtained the required permits for all cities where we are required to do so” and “not all drivers on our platforms have gone through the process to obtain the requisite licenses in each city where we operate.””The rules are there, but the internet companies normally ignored these regulations and (venture capital firms) ignored the compliance issues,” said Ming Liao, founding partner of Beijing-based Prospect Avenue Capital, which manages $500 million in assets. The firm expects a few of its invested companies will list in the U.S. this year.Before its IPO, Didi was valued at $62 billion as one of the five largest privately held start-ups in the world, according to CB Insights.Goldman Sachs Asia, Morgan Stanley and J.P. Morgan were among the slew of investment banks that underwrote Didi’s IPO, while SoftBank was a major investor, according to a filing.However, Didi did not disclose all aspects of its businesses in China, such as its finance technology arm.Increased regulations in the last yearThe heightened scrutiny on Didi is the latest move by authorities to tighten regulation in the last 10 months.Last fall, Alibaba founder Jack Ma gave a speech in Shanghai that served as a wake-up call for authorities, Liao said.Ma’s comments appeared to criticize regulators, and came shortly before the company’s fintech affiliate Ant was set to list in Hong Kong and Shanghai in November. Days before the stock offering, Chinese regulators abruptly suspended the IPO, and subsequently fined Alibaba $2.8 billion in an anti-monopoly probe.”The government realized the internet companies, especially the internet giants (were) becoming too powerful to comply with the regulations,” Liao said.Three days after China announced a cybersecurity probe into Didi, the same agency announced an investigation into businesses held by two Chinese stocks that went public in the U.S. in the last month — Full Truck Alliance and Boss Zhipin, which filed under the name “Kanzhun.””The regulatory crackdown is one that is not intended to completely curtail profitability for these large companies,” Timothy Moe, chief Asia Pacific equity strategist at Goldman Sachs, said Monday on CNBC’s “Street Signs Asia.””We think broadly it’s an attempt to update a regulatory framework that is needed in a rapidly changing environment,” he said. The investment bank expects stocks affected by regulatory concerns to rise over the next six months.Risks for investorsAhead of Full Truck Alliance’s IPO, the company disclosed in its prospectus a history of data privacy violations. Boss Zhipin said it could face fines of up to 10,000 yuan ($1,562.50) per office space lease for not registering the agreements as required by Chinese law.The three companies above also discussed general uncertainty about Chinese government actions, growing scrutiny against monopolistic practices and U.S.-China tensions.Another risk for investors is that founding executives typically retain a large controlling stake the U.S.-listed Chinese companies.Didi’s two co-founders Will Cheng and Jean Liu hold a combined 58.1% of aggregate voting power. Boss Zhipin’s founder Peng Zhao had 76.2% of voting power, and Full Truck Alliance’s founder Peter Zhang had 83.4%, filings showed.While analysts said China’s lax regulatory environment allowed start-ups to experiment and grow rapidly, the lack of enforcement has also attracted speculators and permitted business practices that sometimes came at the expense of consumer savings or safe labor conditions.Meanwhile, differences in regulation and language allowed some Chinese companies to raise money in the U.S. with less scrutiny and investor understanding that an American company might have faced.Cases of fraudIn 2018, the American documentary “The China Hustle” estimated that pension funds and retirement funds lost at least $14 billion to Chinese stocks that turned out to be frauds.Last year, revelation that a Nasdaq-listed Luckin Coffee executive fabricated sales worth about $314 million prompted the stock’s delisting. Later in the year, the collapse of Danke, a Chinese residential rental business owned by U.S.-listed Phoenix Tree Holdings, also led to its delisting from the New York Stock Exchange.U.S.-listed Chinese companies often used a listing structure that allowed the stock to exist in a grey zone between the U.S. and China, said Winston Ma, former managing director and head of North America for China Investment Corporation (CIC), a sovereign wealth fund.Read more about China from CNBC ProCathie Wood bought shares of this recent China IPO every day this weekJPMorgan picks its favorite Chinese stocks on everything from hydrogen to EV batteriesWedbush says Tesla faces a ‘moment of truth’ in China with recallNow, both countries are stepping up regulation.”In the future, similar companies may go through a more prolonged regulatory review process for (an) IPO,” Ma said, who is co-author of the book “The Hunt for Unicorns: How Sovereign Funds Are Reshaping Investment in the Digital Economy.What this could mean for Chinese IPOsThe increased regulatory action will likely slow the rush of Chinese IPOs in the U.S., analysts said.Chinese companies have clamored to list in New York, often for branding purposes, regardless of U.S.-China tensions. Last year, 30 China-based IPOs in the U.S. raised the most capital since 2014, according to Renaissance Capital.As recent as late April, about 60 Chinese companies were still planning to go public in the U.S. this year, according to a representative for the New York Stock Exchange. An update wasn’t available as of Tuesday.Another Chinese company that listed last week, grocery delivery company Dingdong, cut its offering size by 70% following the poor debut of industry rival Missfresh a few days earlier.Each prospectus lists more than 35 points on which the companies “cannot assure” investors of growth and different aspects of business success. More

BYD’s Han electric car, pictured here at the 2021 Shanghai auto show, is one of the most popular new energy vehicles in China.Evelyn Cheng | CNBCBEIJING — Chinese automaker BYD sold fewer all-electric passenger cars in the first six months of this year than the same period in 2019, before the coronavirus pandemic.The company, backed by U.S. billionaire Warren Buffett, said Monday it sold 20,016 all-electric passenger cars in June for a total of 93,440 units in the first half of the year — double the year-ago figure.But that growth still fell short of sales of 95,779 all-electric passenger cars in the first six months of 2019.In June, BYD also sold 84 more hybrid-powered passenger cars than all-electric ones. That contrasted with a recent trend of BYD’s all-electric cars outselling hybrid ones.Passenger car sales in China likely fell 14.9% in June from a year ago, the China Association of Automobile Manufacturers said Monday. Vehicle sales overall likely fell to 1.93 million units in June, a decline of 16.3% year-on-year and down 9.5% from the prior month, the association said.The figures indicate China’s vehicle sales still rose over the last two years.Based on the association’s estimate, data from Wind shows China would have sold 12.8 million vehicles in the first half of 2021. That’s up 24.8% from a year ago and above the 12.3 million units sold in the same period in 2019.Read more about electric vehicles from CNBC ProBank of America: Billions are about to pour into EV infrastructure — and these stocks will benefitUBS cuts Tesla price target by roughly 10%, citing growing competitionWedbush says Tesla faces a ‘moment of truth’ in China with recallBYD’s overall vehicle sales of 246,689 units in the first half of the year exceeded the 228,072 units sold during the same period in 2019.The company announced in June it shipped 100 all-electric cars to Norway, the first batch of a planned 1,500 vehicles set for delivery to the country by the end of the year.The automaker’s latest all-electric car sales also kept BYD well ahead of start-up rivals.Nio delivered more than 41,900 electric cars during the first half of 2021.However, Elon Musk’s Tesla remained a global leader in electric cars, delivering 201,250 vehicles in the second quarter alone. More

The Pleo app pictured on a smartphone next to one of the fintech firm’s corporate cards.PleoLONDON — There’s a new fintech unicorn in town.Danish start-up Pleo, which sells corporate expense management software and linked “smart” payment cards, has boosted its valuation to $1.7 billion in a $150 million equity financing round.The investment, led by Bain Capital Ventures and Thrive Capital, makes Pleo the latest privately-held tech company in Europe to surpass the coveted $1 billion “unicorn” valuation.”The whole digitization and automation of finance processes has been going on for a while,” Jeppe Rindom, CEO and co-founder of Pleo, told CNBC in an exclusive interview.Pleo makes about 70% of its revenue from interchange fees taken from a merchant’s bank account every time a customer uses their card. The other main chunk of the company’s sales comes from paid subscriptions.The coronavirus pandemic has been an “accelerator” for Pleo, Rindom said, adding that the working-from-home trend offset a decline in international business travel. The company’s customer base more than doubled over the course of 2020 to 17,000, he said.Following the investment, Bain Capital Ventures’ Keri Gohman will join Pleo’s board. Gohman previously held executive positions at accounting software provider Xero and U.S. bank Capital One.Pleo is also a rare example of a billion-dollar tech company emerging in Denmark. Pleo’s founders were early employees at Tradeshift, a $1.1 billion fintech that was originally based in Copenhagen but relocated to San Francisco.Fintech is on fireSeveral fintech start-ups have raised funds at staggeringly high valuations lately.Sweden’s Klarna was valued at $45.6 billion in a round led by SoftBank. Checkout.com raised hundreds of millions of dollars at a $15 billion valuation in January. Meanwhile, a relatively little-known payments software company called Mollie raised money at a $6.5 billion value only a couple weeks ago.”I think we’ve only seen the beginning,” Rindom said. “Obviously we have some awesome players like Wise, Revolut, Adyen and Klarna, some of which are moving into double-digit billion valuations.””If you compare it to the value of the whole banking industry, it’s still very small,” he added. “This is going to take time — we’re talking about a couple of decades. But I do think that the players that are customer-first and technology-first will win the whole financial industry in the long run.”Expansion plansWith its latest cash infusion, Pleo has raised $228.8 million to date. The firm plans to use the fresh funds to boost its presence in countries like the U.K. and ramp up marketing and PR. Pleo’s main markets are currently Denmark, Sweden, Germany, Spain, Britain and Ireland.The business is not yet profitable, and Rindom said he’s not aiming for profitability any time soon. Many venture-backed start-ups focus on rapid growth over making money. Rindom said Pleo is growing fast, and was currently on track to hit $100 million in annual recurring revenue.Further down the line, Pleo — which solely operates in Europe — is considering an expansion into another continent. Rindom said the U.S. was a contender but no firm decisions had been made.Pleo has been expanding its range of products to include features like invoice management and employee reimbursement. Rindom said the company also planned to roll out lending at some point, following in the footsteps of fintechs such as Square and Stripe which have also moved into credit. More