Enough 'momentum' to carry through uncertainty?
Jay Jacobs, BlackRock head of U.S. equity ETFs, joins CNBC's Dom Chu on 'ETF Edge' to debate the momentum trade and if it is insulated from the tariff and economic uncertainty. Nate Geraci, ETF Store president, also joins the convo.
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CNBC
4 minutes ago
- CNBC
Russia's ruble rockets: The curious case of the world's best-performing currency this year
In the midst of a long-drawn war, declining oil prices, stiff sanctions, and an economy that's on the downhill, Russia's ruble has been rising. In fact, it is the world's best-performing currency so far this year, according to Bank of America, with gains of over 40%. The ruble's stunning rally in 2025 marks a sharp reversal from the past two years when the currency had depreciated dramatically. What's powering the Russian currency? The strength in the ruble has less to do with a sudden jump in foreign investors' confidence than with capital controls and policy tightening, market watchers told CNBC. The weakness in the dollar comes as an added bonus. Brendan McKenna, international economist and foreign exchange strategist at Wells Fargo, lists three reasons for the ruble's rally. "The central bank has opted to keep rates relatively elevated, capital controls and other FX restrictions have tightened a bit, and [there's been] some progress or attempt at progress in finding a peace between Russia and Ukraine." Russia's central bank has maintained a restrictive stance to curtail high inflation, keeping domestic interest rates high at 21% and tightening credit. The steep borrowing costs are deterring local businesses from importing goods, in turn reducing demand for foreign currency among Russian businesses and consumers, said industry watchers. There's been a decline in foreign currency demand from local importers, given weak consumption and the adequate supply of ruble, said Andrei Melaschenko, an economist at Renaissance Capital. That decline has given the ruble a boost as banks don't need to sell rubles to buy the dollar or yuan. Russian exporters need to be paid in rubles, or at least convert dollar payment into rubles, thereby increasing demand. Importers, on the other hand, have stopped purchasing foreign goods, and so do not need to sell rubles to pay in dollars. In the first quarter of 2025, there was an "overstocking" in consumer electronics, cars and trucks which were actively imported in the second half of last year in anticipation of the increase in import duties, said the Moscow-based economist. The consumer activity cooldown was primarily in the durable goods sector, which made up a sizable portion of Russia's imports, Melaschenko said. Another key reason the Russian ruble has strengthened this year is that Russian exporters, in particular the oil industry, have been converting foreign earnings back into rubles, analysts said. The Russian government requires large exporters to bring a portion of their foreign earnings back into the country and exchange them for rubles on the local market, according to the government. Between January and April, the sales of foreign currencies by the largest exporters in Russia totaled $42.5 billion, data from CBR showed. This is almost a 6% jump compared to the four months before January. CBR shrinking money supply is also supporting ruble, said Steve Hanke, professor of applied economics at Johns Hopkins University. In August 2023, the rate of growth in the money created by the CBR was soaring at 23.9% per year, he said. This figure has turned negative since January — currently contracting at a rate of -1.19% per year, said Hanke. Further, hopes for a peace deal between Ukraine and Russia following the election of U.S. President Donald Trump had also sparked some optimism, said Wells Fargo's McKenna. Expectations of Russia's reintegration into the economy had prompted some capital flows back into ruble-denominated assets, in spite of the capital controls, which have supported the currency's strength to some extent. Despite the ruble's current strength, analysts caution that it may not be sustainable. Oil prices—a major pillar of Russia's export economy — have fallen significantly this year, which could weigh on FX inflows. "We believe that the ruble is close to its maximum and may begin to weaken in the near future," Melaschenko said. "Oil prices have fallen significantly, which should be reflected in a decrease in export revenue and the sale of its foreign currency component," he added. While peace talks between Russia and Ukraine recently have not wielded any concrete developments, McKenna also noted that a concrete peace deal could erode ruble's strength as the controls such as the FX restrictions that have supported the currency might be lifted. "Ruble can selloff pretty rapidly going forward, especially if a peace or ceasefire is reached," he said. "In that scenario, capital controls probably get fully lifted and the central bank might cut rates rather quickly," he added. Exporters are also seeing slimmer margins, industry analysts noted, in particular the country's oil sector against the backdrop of declining global oil prices. The government, too, is feeling the squeeze — lower oil prices combined with a stronger ruble are eroding oil and gas revenues. The government's finances are highly sensitive to fluctuations in crude prices, with oil and gas earnings making up around 30% of federal revenues in 2024, according Heli Simola, senior economist at the Bank of Finland. "The Ministry of Finance has been forced to lean more heavily on the National Welfare Fund to cover spending," Melaschenko said. "And there may be further cuts to non-priority expenditures if this trend continues." That said, aside from the oil trade, Russia has been mostly isolated from the global marketplace. "Meaning, a weaker RUB does not add much to Russia's trade competitiveness," said McKenna.
CNBC
28 minutes ago
- CNBC
What the Musk-Trump feud could mean for Tesla stock
The spat between U.S. President Donald Trump and Elon Musk, the world's richest person, entered new territory on Thursday — with Tesla getting caught up in the fallout. What began with Musk publicly slamming Trump's spending bill has evolved into a full-blown row between the two, with the president threatening to withdraw billions of dollars' worth of government contracts for Musk's companies. Musk, meanwhile, claimed Trump would never have won a second term in office without his input in the campaign, and said SpaceX would immediately decommission its Dragon spacecraft due to Trump's threats to cut funding. As the pair — who once enjoyed a friendly relationship that landed Musk a job in Trump's administration — publicly traded jibes, Tesla saw $152 billion wiped from its market cap on Thursday. That's the biggest hit to its valuation ever. Shares of the company have shed nearly 30% of their value so far this year, but were last 5% higher in pre-market trade on Friday. Overlook the 'schoolyard spat'? Market watchers said the falling out between Musk and Trump was adding renewed pressure to Tesla , which has already been battling poor car sales and questions over Musk's ability to lead the company given his other ventures, including SpaceX and xAI . Tom Hulick, CEO of Strategy Asset Managers, told CNBC's "Squawk Box Europe" on Friday that there would naturally be concern mounting in markets with "two people going at each other's throats just like Trump and Musk are right now." However, he urged investors to overlook what he labeled the "schoolyard spat" and focus on energy infrastructure developments in the U.S. and beyond, as well as data from the company on earnings, savings and investments. "We're really seeing more positive signs than negative, and whether there's a spat between Trump and Musk or between two different nations, I think people are going to settle down and cooler heads are going to prevail," Hulick, a Tesla bull, told CNBC. Strategy Asset Managers owns Tesla stock. Hulick added on Friday that although the EV giant was under a lot of pressure given the media attention on Musk. "You can't deny [Tesla is] an industry leader in a lot of things." "I think [this is] temporary," he added. "What happens to Tesla beyond this point … is really dependent on what the earnings outlook is for the company. I think down the road there's so much positive in there for the EV industry and for Tesla. We're not going to focus on that near-term stress." Rico Luman, a senior economist specializing in the transport, logistics and automotive sectors at ING Research, told CNBC on Friday that Musk's political career "hasn't done anything good for Tesla" — and the escalation of his row with Trump had only exacerbated the impact. "Tesla's market value is built largely on future growth expectations (unit sales growth but also software autonomous driving and adjacent fields like robotisation)," he explained in an email, noting that the stock price had already come under pressure due to disappointing production and delivery figures. Tesla missed estimates on its top and bottom lines when it reported its first-quarter earnings in April, with auto revenue dropping 20% from a year earlier. However, Luman argued, "slowing global demand for EVs is just part of this story." "The company is suffering headwinds in all three large regional blocks across the globe, including the U.S.," he told CNBC. "In order to deliver on its growth ambition, it requires regulatory accommodation in its home and most important market the US. Soured relations with the government may impact this negatively. Markets seem to price in higher regulatory risk." Tesla shareholders stuck in a 'battle zone' In a note on Thursday, Wedbush's Dan Ives, a longtime fan of Tesla, also likened the deterioration of Musk's relationship with Trump to a "high school friends feud." "This situation … must start to be calmed down on the Musk and Trump fronts and it's not good for either side," he said. "This feud does not change our bullish view of Tesla and the autonomous view but clearly does put a fly in the ointment of the Trump regulatory framework going forward. It's another Twilight Zone moment." Russ Mould, investment director at AJ Bell, noted the boost Tesla's shares got last year as Musk and Trump's relationship blossomed. "Investors thought Musk — and therefore Tesla by default —would get special treatment," he said in a note on Friday morning. However, Trump now seems to be on a mission to make Musk's life difficult, Mould added. "Tesla shareholders are stuck in the middle of the battle zone, as whatever happens to Musk will act as a proxy for the car company's share price." Labeling Musk's outspokenness a "liability" for Tesla shareholders, Mould suggested his position at the head of the firm could ultimately come into question. "[Musk] recently pledged to stay on as CEO for at least another five years, but if he cannot be restrained from stoking fires on the public stage, Tesla's board might have to think long and hard about his future with the business," he said. CNBC has contacted Musk and Tesla for comment.
Newsweek
32 minutes ago
- Newsweek
Private Capital Is Missing the Opportunity of the Century
Climate adaptation has many challenges, but the disconnect between the world of finance and the universe of innovations and solutions to help us live on a hotter planet is arguably the most astonishing. It is perhaps the biggest market failure of our times. Around the world, scientists are working on new crop strains that are resistant to drought, flooding, and the increase in salinity of river delta soils. They are producing ever-more accurate and detailed weather forecasting tools. They are devising new technologies to harvest and save water, to fight disease, to control pests. This is vital work aimed at protecting us from the next famine, the next pandemic, or the next climate shock. But all too often, innovations die in the lab. Scientists already struggle to get their research funded. Finding additional backers for setting up pilot projects and testing new ideas in a commercial setting is often beyond their means. Women in the rice fields in the countryside of Hanoi, Vietnam. Women in the rice fields in the countryside of Hanoi, Vietnam. Getty Images This finance gap is frustrating because the commercial opportunities are real, and enormous. BlackRock, the global asset manager, sees climate adaptation emerging as "a new investment theme," with "extensive investment needed in products and solutions that build climate resilience." And GIC, the sovereign wealth fund of Singapore, estimates that annual global revenues from selected climate-adaptation solutions will grow to $4 trillion by 2050, from $1 trillion today. The corresponding investment opportunity is expected to surge from $2 trillion to $9 trillion over the same period. GIC predicts that climate adaptation will fuel growth across emerging technologies such as weather intelligence and traditional sectors such as construction and materials for more resilient buildings and infrastructure. Yet globally, less than 3 percent of adaptation actions are financed by private capital. Scaling Up Private Finance Why are financiers missing this opportunity? Partly, they are deterred by the perceived riskiness and uncertain returns integral to any new economic activity. Will governments, companies, and individuals be prudent enough to invest now that they face the rising probability of bad things happening in the future? How do we value innovations whose main purpose—like vaccines—is to prevent catastrophes from happening? Is a lack of information—dare we say imagination—to blame? We need more visibility, more foresight, and more awareness of the commercial opportunities climate resilience offers to bridge the finance gap for adaptation solutions. And that means engaging the full force of private capital—venture capitalists, private equity, and institutional investors—who are best placed to take early bets on scalable solutions. Consider Mirova's €350 million Sustainable Land Fund, which blends public and private capital to invest in nature-positive agriculture and land use. This kind of structure offers a powerful model for de-risking investment and catalyzing private capital at scale. Or look at the success of agritech startups raising early-stage VC funding in Kenya and India to deploy mobile platforms that deliver climate-resilient farming advice to smallholders—proving both commercial viability and impact. From an institutional perspective, we must also be smarter in the way we allocate public funding for adaptation. With public finances under pressure and development aid budgets shrinking, we need to make every cent count. Norway's strategy is to deploy public funds to leverage private capital for climate adaptation. In Africa, it is supporting a program to extend insurance against climate disasters to governments, cities, humanitarian organizations, and NGOs. The funds go toward helping insurers mitigate the risks of underwriting disaster relief policies. Climate adaptation often involves quite simple solutions that nonetheless require big investments. In South Africa, Norfund, the Norwegian Investment Fund for Developing Countries, has invested in ANB Group, a citrus and tropical fruit producer and exporter that needed to install nets to protect its crops from hail and other forms of extreme weather. The Global Center on Adaptation, meanwhile, has joined forces with CGIAR, a global network of agricultural research institutions, to scale up innovation for climate adaptation. Together, they are helping some of the largest financiers in Africa, including the African Development Bank, invest in the most effective new techniques. Accelerating Impact Often, a private partner's technological knowhow can be as valuable as its funding for turning great ideas into products that help people adapt to climate change. Artificial intelligence (AI) is a prime example. CGIAR has secured funding from the philanthropic arm of the tech champion, to use AI to screen some 132,000 strains of rice held in its gene banks around the world. The aim is to identify the most nutritious, high-yielding, and climate-resilient varieties in a fraction of the time it used to take. It is this creative union of technology, financing, and research power that gives us hope for the future. Many solutions to adapt, and even thrive, in a warming planet exist. The only missing piece in the equation is the entrepreneurship and capital needed to take these solutions to market. The climate adaptation ecosystem is a $4 trillion opportunity. Why say no to that? Åsmund Grøver Aukrust is Norway's minister for international development. Professor Patrick V. Verkooijen is president and CEO of the Global Center on Adaptation. The views expressed in this article are the writers' own.
