Finance

The Philippines’ Securities and Exchange Commission sent letters to Google and Apple requesting the removal of Binance apps from their respective app stores.
The agency accused Binance of offering unregistered securities to Filipinos and operating as an unregistered broker.
The regulator said that blocking Binance from app stores would help “prevent the further proliferation of its illegal activities in the country.”

Zhao Changpeng, founder and chief executive officer of Binance, attends the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 16, 2022. 
Benoit Tessier | Reuters

The Philippines’ Securities and Exchange Commission (SEC) has ordered Google and Apple to remove cryptocurrency exchange Binance from their app stores.
In a press release out on Tuesday, the regulator said it had sent letters to Google and Apple requesting the removal of applications controlled by Binance from the Google Play Store and Apple App Store, respectively.

SEC Chairperson Emilio Aquino said that the Philippine public’s continued access to Binance sites and apps “poses a threat to the security of the funds of investing Filipinos.”
The agency accused Binance of offering unregistered securities to Filipinos and operating as an unregistered broker, adding that this violates the country’s securities laws.
Binance, Google, and Apple were not immediately available for comment when contacted by CNBC.
Aquino said that blocking Binance from the Google and Apple app stores would help “prevent the further proliferation of its illegal activities in the country, and to protect the investing public from its detrimental effects on our economy.”

The Philippines’ National Telecommunications Commission has previously moved to block access to websites used by Binance in the country.

The SEC says it earlier warned the Philippines public against using Binance and began studying the possibility of blocking Binance’s services in the Philippines as early as November last year.
The SEC said that Binance has been actively promoting its services on social media to attract funds from Filipinos, despite not being licensed by the regulator.
The watchdog said it is urging Filipinos with investments in Binance to immediately close their positions, or to transfer their crypto holdings to their own crypto wallets or exchanges registered in the Philippines.
The action adds to a litany of woes for Binance, which recently replaced its CEO with Richard Teng, the former chief of UAE regulator Abu Dhabi Global Markets, in November 2023, after a U.S. government settlement ordering the company to pay a $4.3 billion fine for alleged money laundering violations.
Former Binance CEO Changpeng Zhao was charged with violating the Bank Secrecy Act and agreed to step down. Zhao’s sentencing is expected to take place on April 30.
Binance has separately been sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission over alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the U.S. More

Walmart’s majority-owned fintech startup One has begun offering buy now, pay later loans for big-ticket items at some of the retailer’s more than 4,600 U.S. stores, CNBC has learned.
The move puts One in direct competition with Affirm, the BNPL leader and exclusive provider of installment loans for Walmart customers since 2019.
One’s expanding role at Walmart raises the possibility that the company could force Affirm, Capital One and other third parties out of some of the most coveted partnerships in American retail.

Customers shop in a Walmart Supercenter on February 20, 2024 in Hallandale Beach, Florida.
Joe Raedle | Getty Images News | Getty Images

Walmart’s majority-owned fintech startup One has begun offering buy now, pay later loans for big-ticket items at some of the retailer’s more than 4,600 U.S. stores, CNBC has learned.
The move puts One in direct competition with Affirm, the BNPL leader and exclusive provider of installment loans for Walmart customers since 2019. It’s a relationship that the Bentonville, Arkansas, retailer expanded recently, introducing Affirm as a payment option at Walmart self-checkout kiosks.

It also likely signals that a battle is brewing in the store aisles and ecommerce portals of America’s largest retailer. At stake is the role of a wide spectrum of players, from fintech firms to card companies and established banks.
One’s push into lending is the clearest sign yet of its ambition to become a financial superapp, a mobile one-stop shop for saving, spending and borrowing money.
Since it burst onto the scene in 2021, luring Goldman Sachs veteran Omer Ismail as CEO, the fintech startup has intrigued and threatened a financial landscape dominated by banks — and poached talent from more established lenders and payments firms.
But the company, based out of a cramped Manhattan WeWork space, has operated mostly in stealth mode while developing its early products, including a debit account released in 2022.
Now, One is going head-to-head with some of Walmart’s existing partners like Affirm who helped the retail giant generate $648 billion in revenue last year.

Walmart’s Fintech startup One is now offering BNPL loans in Secaucus, New Jersey.
Hugh Son | CNBC

On a recent visit by CNBC to a New Jersey Walmart location, ads for both One and Affirm vied for attention among the Apple products and Android smartphones in the store’s electronics section.
Offerings from both One and Affirm were available at checkout, and loans from either provider were available for purchases starting at around $100 and costing as much as several thousand dollars at an annual interest rate of between 10% to 36%, according to their respective websites.
Electronics, jewelry, power tools and automotive accessories are eligible for the loans, while groceries, alcohol and weapons are not.
Buy now, pay later has gained popularity with consumers for everyday items as well as larger purchases. From January through March of this year, BNPL drove $19.2 billion in online spending, according to Adobe Analytics. That’s a 12% year-over-year increase.
Walmart and One declined to comment for this article.

Who stays, who goes?

One’s expanding role at Walmart raises the possibility that the company could force Affirm, Capital One and other third parties out of some of the most coveted partnerships in American retail, according to industry experts.
“I have to imagine the goal is to have all this stuff, whether it’s a credit card, buy now, pay later loans or remittances, to have it all unified in an app under a single brand, delivered online and through Walmart’s physical footprint,” said Jason Mikula, a consultant formerly employed at Goldman’s consumer division.
Affirm declined to comment about its Walmart partnership.
For Walmart, One is part of its broader effort to develop new revenue sources beyond its retail stores in areas including finance and health care, following rival Amazon’s playbook with cloud computing and streaming, among other segments. Walmart’s newer businesses have higher margins than retail and are a part of its plan to grow profits faster than sales.
In February, Walmart said it was buying TV maker Vizio for $2.3 billion to boost its advertising business, another growth area for the retailer.

‘Bank of Walmart’

When it comes to finance, One is just Walmart’s latest attempt to break into the banking business. Starting in the 1990s, Walmart made repeated efforts to enter the industry through direct ownership of a banking arm, each time getting blocked by lawmakers and industry groups concerned that a “Bank of Walmart” would crush small lenders and squeeze big ones.
To sidestep those concerns, Walmart adopted a more arms-length approach this time around. For One, the retailer created a joint venture with investment firm firm Ribbit Capital — known for backing fintech firms including Robinhood, Credit Karma and Affirm — and staffed the business with executives from across finance.
Walmart has not disclosed the size of its investment in One.
The startup has said that it makes decisions independent of Walmart, though its board includes Walmart U.S. CEO, John Furner, and its finance chief, John David Rainey.
One doesn’t have a banking license, but partners with Coastal Community Bank for the debit card and installment loans.
After its failed early attempts in banking, Walmart pursued a partnership strategy, teaming up with a constellation of providers, including Capital One, Synchrony, MoneyGram, Green Dot, and more recently, Affirm. Leaning on partners, the retailer opened thousands of physical MoneyCenter locations within its stores to offer check cashing, sending and receiving payments, and tax services.

From paper to pixels

But Walmart and One executives have made no secret of their ambition to become a major player in financial services by leapfrogging existing players with a clean-slate effort.
One’s no-fee approach is especially relevant to low- and middle-income Americans who are “underserved financially,” Rainey, a former PayPal executive, noted during a December conference.
“We see a lot of that customer demographic, so I think it gives us the ability to participate in this space in maybe a way that others don’t,” Rainey said. “We can digitize a lot of the services that we do physically today. One is the platform for that.”
One could generate roughly $1.6 billion in annual revenue from debit cards and lending in the near term, and more than $4 billion if it expands into investing and other areas, according to Morgan Stanley.
Walmart can use its scale to grow One in other ways. It is the largest private employer in the U.S. with about 1.6 million employees, and it already offers its workers early access to wages if they sign up for a corporate version of One.

Walmart’s next card

There are signs that One is making a deeper push into lending beyond installment loans.
Walmart recently prevailed in a legal dispute with Capital One, allowing the retailer to end its credit-card partnership years ahead of schedule. Walmart sued Capital One last year, alleging that its exclusive partnership with the card issuer was void after it failed to live up to contractual obligations around customer service, assertions that Capital One denied.
The lawsuit led to speculation that Walmart intends to have One take over management of the retailer’s co-branded and store cards. In fact, in legal filings Capital One itself alleged that Walmart’s rationale was less about servicing complaints and more about moving transactions to a company it owns.
“Upon information and belief, Walmart intends to offer its branded credit cards through One in the future,” Capital One said last year in response to Walmart’s suit. “With One, Walmart is positioning itself to compete directly with Capital One to provide credit and payment products to Walmart customers.”

A Capital One Walmart credit card sign is seen at a store in Mountain View, California, United States on Tuesday, November 19, 2019.
Yichuan Cao | Nurphoto | Getty Images

Capital One said last month that it could appeal the decision. The company declined to comment further.
Meanwhile, Walmart said last year when its lawsuit became public that it would soon announce a new credit card option with “meaningful benefits and rewards.”
One has obtained lending licenses that allow it to operate in nearly every U.S. state, according to filings and its website. The company’s app tells users that credit building and credit score monitoring services are coming soon.

Catching Cash App, Chime

And while One’s expansion threatens to supersede Walmart’s existing financial partners, Walmart’s efforts could also be seen as defensive.
Fintech players including Block’s Cash App, PayPal and Chime dominate account growth among people who switch bank accounts and have made inroads with Walmart’s core demographic. The three services made up 60% of digital player signups last year, according to data and consultancy firm Curinos.
But One has the advantage of being majority owned by a company whose customers make more than 200 million visits a week.
It can offer them enticements including 3% cashback on Walmart purchases and a savings account that pays 5% interest annually, far higher than most banks, according to customer emails from One.
Those terms keep customers spending and saving within the Walmart ecosystem and helps the retailer better understand them, Morgan Stanley analysts said in a 2022 research note.
“One has access to Walmart’s sizable and sticky customer base, the largest in retail,” the analysts wrote. “This captive and underserved customer base gives One a leg up vs. other fintechs.”

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The Department of Energy approved the first state application for federal funding via the Home Energy Rebates program.
The Inflation Reduction Act allocates $8.8 billion in total funding for consumers who make their homes more energy efficient.
Consumers can access up to $14,000 or more per household, and perhaps more in some states depending on the design of the program. Many will likely be able to start accessing rebates within months.

Ryanjlane | E+ | Getty Images

Rebates tied to home energy efficiency and created by the Inflation Reduction Act may start flowing to many consumers within months.  
The federal government is issuing $8.8 billion for Home Energy Rebates programs through states, territories and tribes, which must apply for the funding. The U.S. Department of Energy approved the first application for New York on April 18, awarding it an initial $158 million.

The DOE is hopeful New York will open its program to consumers by early summer, according to Karen Zelmar, the agency’s Home Energy Rebates program manager. The state has the fourth-largest total funding allocation, behind California, Texas and Florida.   
The federal rebates — worth up to $14,000 or more per household, depending on a state’s program design — are basically discounts for homeowners and landlords who make certain efficiency upgrades to their property.
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The rebates aim to partially or fully offset costs for efficiency projects like installing electric heat pumps, insulation, electrical panels and Energy Star-rated appliances.
Their value and eligibility vary according to factors like household income, with more money flowing to low- and middle-income earners.

The DOE also expects the programs to save households $1 billion a year in energy costs due to higher efficiency, Zelmar said.

Eleven other states have also applied for funding: Arizona, California, Colorado, Georgia, Hawaii, Indiana, Minnesota, New Hampshire, New Mexico, Oregon and Washington. Many other states are also far along in their application process, Zelmar said.  
“We certainly hope to see all the programs launched … by this time next year, and hopefully much sooner than that for many of the states,” she said.
States must notify the Energy Department they intend to participate by Aug. 16, 2024. Applications are due by Jan. 31, 2025.

These are key details about the rebates

The Inflation Reduction Act earmarked $369 billion in spending for policies to fight climate change, marking the biggest piece of climate legislation in U.S. history. President Biden signed the measure into law in August 2022.
The IRA divided $8.8 billion in total rebate funding between two programs: the Home Efficiency Rebates program and the Home Electrification and Appliance Rebates program.
New York’s application was approved for the the latter program. So far, just four states — Georgia, Oregon, Indiana and New Mexico — have applied for both.
“I hope that at this time next year we have 50 states with rebate programs,” said Kara Saul Rinaldi, CEO and founder of AnnDyl Policy Group, a consulting firm focused on climate and energy policy.
While their goals are the same — largely, to reduce household energy use and greenhouse gas emissions — the two programs’ approach to household energy savings differs, Saul Rinaldi said.
The Home Electrification and Appliance Rebates program
The Home Electrification and Appliance Rebates program pays consumers a maximum amount of money for buying specific technologies and services, Saul Rinaldi said.
Here are some examples from the Energy Department:

ENERGY STAR electric heat pump water heater — worth up to $1,750
ENERGY STAR electric heat pump for space heating and cooling — up to $8,000
ENERGY STAR electric heat pump clothes dryer — up to $840
ENERGY STAR electric stove, cooktop, range, or oven — up to $840
Electric load service center — up to $4,000
Electric wiring — up to $2,500
Insulation, air sealing and ventilation — up to $1,600

This program pays up to $14,000 to consumers. It’s only available to low- and moderate-income households, defined as being below 150% of an area’s median income. (These geographical income thresholds are outlined by the U.S. Department of Housing and Urban Development.)
Low-income earners — those whose income is 80% or less of the area median — qualify for 100% of project costs. Others are limited to half of project costs. (Both are subject to the $14,000 cap.)
Renters can also take advantage of the program, as long as they communicate to their landlord about the purchase of an appliance, Zelmar said.
Home Efficiency Rebates program
In contrast, the Home Efficiency Rebates program is technology neutral, Saul Rinaldi said.
The value of the rebates are tied to how much overall energy a household saves via efficiency upgrades. The deeper the energy cuts, the larger the rebates, Saul Rinaldi said.
For example, the program is worth up to $8,000 for households who cut energy use by at least 35%. It’s worth a maximum $4,000 for those who reduce energy by at least 20%.
The program is available to all households, regardless of income. Low-income earners can qualify for the most money, as with the other rebate program.
With Energy Department approval, states can opt to increase the maximum rebate to more than $8,000 for low earners. In this way, the Home Efficiency Rebates’ value can technically exceed that of the Home Electrification and Appliance Rebates one, Zelmar said.

How consumers can access the rebates

Consumers can’t double dip, however. For example, a consumer who gets a rebate for buying an electric heat pump generally can’t also apply the energy savings from that heat pump to the calculation for a whole household rebate, experts said.
However, consumers may be able to use the rebates in conjunction with existing programs available through states and local utilities, experts said. Consumers who want to make upgrades before these rebate programs are in place may be able to take advantage of other Inflation Reduction Act funding like tax breaks tied to home efficiency.
Rebates are also meant to be delivered at the point of sale. That may be at a retailer via an upfront discount on purchase price, or from a contractor who gives consumers a rebated amount off the project cost at the point of sale, Zelmar said.
These details will vary by state, experts said. States must develop and publish an approved contractor list as part of their program design.

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There are about 28,420 centimillionaires globally, largely concentrated in New York City, the Bay Area, Los Angeles, London and Beijing, according to WRISE Wealth Management Singapore.
“They don’t invest in get rich, quick things, illiquid things today,” said Salvatore Buscemi, CEO of Dandrew Partners.

Yana Iskayeva | Moment | Getty Images

The uber wealthy live a world apart and their investing strategies also look vastly different from the average investor’s portfolio.
“While there is no official threshold, centimillionaires or individuals with a total net worth of over $100 million, is a good benchmark as entry into the 0.001% club,” said Kevin Teng, CEO of WRISE Wealth Management Singapore, a wealth enterprise for ultra-high net worth individuals.

Globally, the population of centimillionaires stands at around 28,420 individuals, and are largely concentrated in New York City, the Bay Area, Los Angeles, London and Beijing, according to data from WRISE.

They bestow knighthood on you in the United States when you buy an NFL team.

Salvatore Buscemi
CEO of Dandrew Partners

“These cities boast robust financial infrastructure, vibrant entrepreneurial ecosystems, and lucrative real estate markets, making them attractive destinations for the ultra-wealthy,” Teng told CNBC. 
And this demographic that “epitomizes extreme wealth” is selective when it comes to investments, Teng said.
“They don’t invest in get rich, quick things, illiquid things today. For example, that means they don’t really do publicly traded equities,” said Salvatore Buscemi, CEO of Dandrew Partners, a private family investment office.
“They actually don’t even invest in crypto, believe it or not,” Buscemi told CNBC via Zoom. “What they’re looking for is to preserve their legacy and their wealth.”

1. Real estate

As a result, centimillionaire portfolios often feature “very strong, stable pieces of real estate,” Buscemi said. These wealthy individuals gravitate toward “trophy asset” Class A properties, or investment-grade assets that typically were built within the last 15 years.

Monaco Harbor on the French Riviera.
Silvain Sonnet | Getty Images

Michael Sonnenfeldt, founder and chairman of Tiger 21 — a network of ultra-high net worth entrepreneurs and investors — told CNBC that real estate investments typically represent 27% of these individuals’ portfolios.

2. Family offices as investment vehicles

Individuals of such wealth generally have their money managed by single family offices, which handle everything including their inheritance, household bills, credit cards, immediate family expenses, etc., said Andrew Amoils, an analyst at global wealth intelligence firm New World Wealth.
“These family offices often have foundation arms for charities and venture capital arms that invest in high growth startups,” said Amoils.
The number of family offices in the world has tripled since 2019, topping 4,500 worldwide last year with an estimated $6 trillion in assets under management combined. 

3. Alternative investments?

Ultra high net worth individuals also explore potentially buying stakes in professional sports teams, said Dandrew’s Buscemi.
“That’s a very, very insulated group to get into and requires a lot more than just money,” he said.
The exclusivity is a major appeal as these wealthy individuals want to mingle with people of similar status, Buscemi explained. Owning a stake in a sports team is a way for these individuals to legitimize their status, he said.

Owner Jerry Jones of the Dallas Cowboys welcomes fans to training camp at River Ridge Complex on July 24, 2021 in Oxnard, California.
Jayne Kamin-Oncea | Getty Images Sport | Getty Images

“They bestow knighthood on you in the United States when you buy an NFL team,” he said, like how American businessman and billionaire Jerry Jones bought the Dallas Cowboys in 1989.
WRISE’s Teng also noted that 0.001% individuals pay more attention to fixed income, private credit and alternative investments. He said private credit is gaining traction as investors seek sources of yield outside of conventional markets. 
“This trend reflects a growing appetite for non-traditional assets that offer unique risk-return profiles,” said Teng, noting that alternative investments include venture capital, private equity and real assets. More

The hedge fund’s branding is a clue. 1789 Capital was set up last year and named for the year Congress proposed America’s bill of rights. It offers investors the chance to put money into what it says are three key themes: a parallel conservative economy catering to consumers who want to avoid being bombarded with liberal ideas; the shift away from free trade; and firms that have been penalised by the environment, social and governance (ESG) investment trend. Its founder, Omeed Malik, a former banker, has hosted fundraisers for Robert Kennedy junior, an anti-vaccination, long-shot presidential candidate.1789 Capital is part of an increasingly important trend: American politics is infecting investing. A gap has opened up between how Democrats and Republicans view the world; many Americans want to express their political identities by any means possible; and others see their money as a way to sway business behaviour. All of this is influencing investment decisions. The amount of money invested in, say, novelty exchange-traded funds (ETFs), such as those tracking the portfolios of certain politicians, is small, but other developments are more significant. Some $13bn has been withdrawn from BlackRock’s accounts, for instance, as red states boycott asset managers that support ESG. A bitterly fought rematch between Donald Trump and Joe Biden will most likely supercharge the trend.Chart: The EconomistAccording to a forthcoming paper by Elena Pikulina of the University of British Columbia and co-authors, the portfolios of Democrat and Republican retail investors began to diverge half-way through Barack Obama’s presidency, before consistently widening. By combining data from investment advisers with county-level election results, the researchers show that investors in Republican-leaning counties shun stocks from firms where the chief executive has made donations to the Democrats, while those in Democrat-leaning counties are less likely to invest in a firm when there are concerns about its treatment of workers. Voters also indirectly influence decisions made by their political representatives, as can be seen with the ESG boycotts.What motivates this behaviour? One possibility is that Democrats and Republicans simply disagree about the direction of the economy and, as a result, about which investments will perform best. Under this reading, rather than being the result of investors trying to achieve political outcomes, the divide is a product of politically inflected views of the world. Indeed, a paper by Maarten Meeuwis of Washington University in St Louis and colleagues finds that the risk appetite of American investors shifts according to who is in the White House. After the presidential election in 2016 some Democrat-leaning investors sold stocks and bought bonds—a sign they were worried about the future. Republicans did the opposite. Although only a relatively small number of people made such moves, those who did typically shifted more than a quarter of their holdings.The authors argue this reflects differing interpretations of economic data. After all, it mirrors a divide between Democrats and Republicans when it comes to consumer confidence. Both are more confident about the economy when the president is from their own party, controlling for inflation and unemployment. A consumer-sentiment survey by the University of Michigan finds a significant divergence along political lines—bigger than that along lines of age or income. During Mr Biden’s time in office, Republicans have on average expected 2.4 percentage points more inflation in the year ahead than Democrats.Yet different world views do not entirely explain the trend. It seems partisans are buying shares as an expression of support, too, much as they might put up a candidate’s poster. Truth Social, Mr Trump’s social-media holding firm, surged when it listed on the Nasdaq in March, as supporters rushed to buy the stock. After Mr Trump’s win in 2016, punters in Democrat-leaning counties invested more in clean-energy firms, even though the result was likely to be bad news for such businesses. To these investors, returns matter less than identification with the cause, says Stephen Siegel of the University of Washington, one of Ms Pikulina’s co-authors.Partisan investors also hope to change business behaviour. Since red states began to pull money from BlackRock, the firm’s boss, Larry Fink, has begun to shy away from referring to esg. So have other prominent asset managers and bankers. Meanwhile, a study by Matthew Kahn of the University of Southern California and colleagues finds that when an American state’s pension fund becomes more Democrat-aligned—say, when a new governor comes in—the firms it is invested in reduce their carbon emissions more quickly.Partisan investing is both problem and opportunity for financiers. The rise of ESG investing at first allowed asset managers to distinguish themselves from rivals. Around $120bn flowed into such funds in 2021. But in the final quarter of 2023 they saw net outflows for the first time. The difficulty now is to sell to both sides without annoying either—a task that is becoming increasingly hard as new topics are dragged into the fray. In October Ron DeSantis, governor of Florida, gave Morningstar Sustainalytics, a financial-data firm, 90 days to either “clarify its business practices or cease its boycott of Israel”. He argued that its ESG metrics classified companies as a risk for having invested in Israel. An independent report commissioned by Morningstar recommended dropping a specific tag for companies that operate in “occupied territories”—advice that the firm intends to follow. Florida has since removed Morningstar from the warning list.It is not just conservatives making a fuss. Vanguard, an asset manager, has been targeted by activists for quitting the Net Zero Asset Managers Initiative, an industry body. In January the Sunrise Project, a campaign group, began running advertisements in Pennsylvania, the firm’s home state, accusing it of giving in to bullies.At the same time, smaller firms can indulge partisans. There have long been funds that apply a liberal lens to investment decisions, such as Parnassus Investments, which was established in 1984. They are being joined by right-wing ones. As well as 1789 Capital, there is Strive Asset Management, set up in 2022 by Vivek Ramaswamy, an ertswhile Republican presidential candidate, which offers investors an American energy etf that focuses on fossil fuels and has the ticker DRLL.Taking a stand can be expensive. Researchers at the Federal Reserve and the University of Pennsylvania have found that anti-ESG boycotts raised the cost of borrowing for Texan municipalities by $300m-500m as banks with ESG policies withdrew from underwriting bond sales. Democrats who shifted out of stocks when Mr Trump won in 2016 would have lost out on a post-election rally. In the year after the vote, the S&P 500 rose by 21%.Markets thrive on differences of opinion: every seller needs a buyer and every buyer needs a seller. Funds that offer investors a chance to express those opinions are not necessarily a bad thing. But American capitalism has been built on the pursuit of profit at all costs. In recent decades, investors have flocked to index funds, which track the market, offering diversification and low fees. To the extent that partisan investors are trying to reshape the economy to align with their values, rather than betting on beliefs about the economy, they are going to pay for it. ■ More

Investors should consider commodities due to a “big change” involving international expansion, according to VanEck CEO Jan van Eck.
“The world economy started growing again,” van Eck told CNBC’s “ETF Edge” this week.

He singles out China, the world’s second-largest economy behind the U.S., as a key driver in the expansion.
“China which has been such a huge driver of growth and so negative for growth over the last year or two. Manufacturing PMI is now positive in China as of March,” said van Eck. “You now have growth. … So, that leads to your reflation trade.”
His firm has exposure to commodities from gold to energy to copper. Its exchange-traded funds include the VanEck Gold Miners ETF (GDX) and VanEck Oil Refiners ETF (CRAK). They’re up 10% and 9%, respectively, year to date.
Van Eck highlights copper’s momentum as a positive sign for demand. The industrial metal is up almost 16% this year, as of Friday’s close.
“It’s a good measure of global economic growth and energy prices. [They] probably have gotten a little bit ahead of themselves, but they’re reflecting the world is growing,” he said.

He also sees U.S. government spending as bullish catalyst for the commodities trade.
“Fiscal spending is running so super high,” van Eck said. “That’s leading to this global growth trade, too. So, that’s why I like commodities because I think it’s more than just a headline.”
As of Friday’s close, the S&P GSCI Index Spot, which tracks commodities from crude oil to cocoa, is up 10% so far this year.

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A four-day work week could be coming as AI proliferates — and these companies could capitalize

Disclaimer More

Excitement around artificial intelligence lifted a slate of tech stocks to astronomical heights, contributing to the rise of the Magnificent Seven in 2023.
But these names can see plenty of volatility. On Friday, the tech-heavy Nasdaq Composite slid more than 2% as Nvidia plummeted 10%.
Investors examining the AI space should look into names with staying power and remain diversified. Selecting ETFs that incorporate dozens of names can be a lower-risk way to diversify, one expert said.

Fotografielink | Istock | Getty Images

Artificial intelligence has shaken up the investing landscape since the groundbreaking launch of ChatGPT in November 2022.
Since then, investors have poured money into all things related to AI as they hunt for the next big winners. In 2023, a group of major technology players dubbed the Magnificent Seven — Tesla, Amazon, Meta Platforms, Apple, Microsoft, Alphabet and Nvidia — contributed to a large chunk of the market’s rally.

Those tail winds continued into 2024, but even the winners eventually reach their limit. Indeed, some of this year’s highest fliers came down to earth on Friday, with Big Tech names dragging down the Nasdaq Composite by more than 2%.
“You have to do your work,” said Jay Woods, chief global strategist at Freedom Capital Markets. “You want to do the research, you want to know what you’re buying, you want to know the risks involved. In AI right now, there are a lot of unknowns.”
AI is poised to be a central theme as the technology transitions from early-stage winners to second-stage adopters. Portfolio and wealth managers say investors may want to undertake certain strategies if they’re looking for long-term plays in the space.
What to look for
There’s no secret formula to investing and picking artificial intelligence stocks, but investors can keep an eye on certain metrics and trends when weeding out the winners from the duds.
When investing in any new industry, Carol Schleif, chief investment officer at BMO Family Office, recommends that investors keep an eye on companies’ cash burn and how they are spending their money. Be attentive to the fine details, including how a company works through a backlog and how much money it devotes toward infrastructure.

When it comes to chip stocks, Schleif also recommends taking a look at government grants. The industry won big in 2022 when President Joe Biden signed the CHIPS Act into law. The measure allocated funds toward building out semiconductor production on U.S. soil.
Samsung Electronics is in line to receive funding from CHIPS for making semiconductors in Texas, while Intel has been awarded up to $8.5 billion from the measure.
“Focus on the underlying fundamentals, and are they moving in the right direction, [rather] than just last quarter’s earnings,” Schleif advised.
Investors should also avoid blindly chasing the hot winners that have benefited from AI enthusiasm. For Laffer Tengler Investments CEO and CIO Nancy Tengler, that means looking at some of the old-economy stocks embracing the new digital wave. She likes Microsoft and IBM, a pair of tech industry veterans.
When building any portfolio, financial advisors and portfolio managers stress the importance of diversification — and the same applies to AI.
An exchange-traded fund might be a good way to get that diversified exposure to a basket of stocks that could benefit from the AI theme, rather than sticking with one or two promising names.
Consider diversifying through ETFs
Selecting ETFs that incorporate dozens of names can be a lower-risk way to diversify, said Marguerita Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.
She highlighted the Global X Robotics and Artificial Intelligence ETF (BOTZ), the First Trust Nasdaq AI and Robotics ETF (ROBT) and the Global X Artificial Intelligence & Technology ETF (AIQ).
“That’s one way to get some exposure without putting the proverbial all the eggs in that one basket,” said BMO’s Schleif. “You want to be able to focus on a few different avenues such that you can withstand the volatility.”

AI ETFs and their performance in 2024

Ticker
Name
Expense ratio
%chg ytd

BOTZ
Global X Robotics and Artificial Intelligence ETF
0.68%
0.53%

ROBT
First Trust Nasdaq AI and Robotics ETF
0.65%
-10.34%

AIQ
Global X Artificial Intellligence & Technology ETF
0.68%
0.90%

CHAT
Roundhill Generative AI and Technology ETF
0.75%
3.20%

Source: fund websites, FactSet

Volatility can be a bitter pill, particularly for newer investors. Stocks tend to rise at first when a new theme hits the mainstream, but often suffer at some point from volatility and pullbacks, said Helen Dietz, a CFP and managing director at Aspiriant.
“The newer the trend, the more volatile the trend,” she said. “The corrections of those individual stocks, or those sectors, can be quite violent at times, which is not unusual, and the investing public gets scared out of that.”
To that effect, Nvidia’s shares suffered a setback on Friday when they tumbled 10% and posted their worst day since March 2020. The decline put a sizable dent into the chip stock’s year-to-date gains, but it remains up nearly 54% in 2024. Fellow AI play Super Micro Computer also took a nosedive that day, dropping 23%.
ETFs typically include a range of names and can vary in weighting. Though the BOTZ ETF and the Roundhill Generative AI and Technology ETF (CHAT), both currently lag some of this year’s popular AI winners. However, the underlying names are varied: BOTZ holds Nvidia and robotics play Intuitive Surgical, while CHAT’s top holdings include Microsoft, Meta and ServiceNow.
Schleif recommends looking for ETFs with high trading volume and backed by reputable companies. Investors should also be mindful of fees, which can take a bite out of returns if they are too high.
While the gains may fall short of the surge seen in stocks such as Nvidia and Meta, ETFs allow investors to obtain lower-risk exposure to the sector, Woods said. Longer term, investors can also use the leadership in these funds to consider picking out individual names further down the road.
“The old cliché is timing the market and then hoping you find that individual stock that can really be the big performer,” Woods said. “If you want to be involved, you want to be diversified and I think an ETF is the best way to do that.”

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China’s fiscal stimulus is losing its effectiveness and is more of a strategy to buy time for industrial and consumption policies, S&P Global Ratings said.
High debt levels limit how much fiscal stimulus a local government can undertake, regardless of whether a city is considered a high or low-income region, the S&P report said.
The Chinese government earlier this year announced plans to bolster domestic demand with subsidies and other incentives for equipment upgrades and consumer product trade-ins.

Pictured here is a commercial residential property under construction on March 20, 2024, in Nanning, capital of the Guangxi Zhuang autonomous region in south China.
Future Publishing | Future Publishing | Getty Images

BEIJING — China’s fiscal stimulus is losing its effectiveness and is more of a strategy to buy time for industrial and consumption policies, S&P Global Ratings senior analyst Yunbang Xu said in a report Thursday.
The analysis used growth in government spending to measure fiscal stimulus.

“In our view, fiscal stimulus is a buy-time strategy that could have some longer-term benefits, if projects are focused on reviving consumption or industrial upgrades that increase value-add,” Xu said.
China has set a target of around 5% GDP growth this year, a goal many analysts have said is ambitious given the level of announced stimulus. The head of the top economic planning agency said in March that China would “strengthen macroeconomic policies” and increase coordination among fiscal, monetary, employment, industrial and regional policies.
High debt levels limit how much fiscal stimulus a local government can undertake, regardless of whether a city is considered a high or low-income region, the S&P report said.
Public debt as a share of GDP can range from around 20% for the high-income city of Shenzhen, to 140% for the far smaller, low-income city of Bazhong in southwestern Sichuan province, the report said.

“Given fiscal constraints and diminishing effectiveness, we expect local governments will focus on reducing red tape and taking other measures to improve business environments and support long-term growth and living standards,” S&P’s Xu said.

“Investment is less effective amid [the] drastic property sector slowdown,” Xu added.
Fixed asset investment for the year so far picked up pace in March versus the first two months of the year, thanks to an acceleration of investment in manufacturing, according to official data released this week. Investment in infrastructure slowed its growth, while that into real estate dropped further.
The Chinese government earlier this year announced plans to bolster domestic demand with subsidies and other incentives for equipment upgrades and consumer product trade-ins. The measures are officially expected to create well over 5 trillion yuan ($704.23 billion) in annual spending on equipment.
Officials told reporters last week that on the fiscal front, the central government would provide “strong support” for such upgrades.

S&P found that local governments’ fiscal stimulus has generally been bigger and more effective in richer cities, based on data from 2020 to 2022.
“Higher-income cities have a lead because they are less vulnerable to declines in property markets, have stronger industrial bases, and their consumption is more resilient in downturns,” Xu said in the report. “Industry, consumption and investment will remain the key growth drivers going forward.”
“Higher-tech sectors will continue to drive China’s industrial upgrade and anchor long-term economic growth,” Xu said. “That said, overcapacity in some sectors could spark price pain in the near term.” More