Stephanie Link: Underlying data in GDP report is better than headline
CNBC's Steve Liesman; Stephanie Link, Hightower Advisors chief investment strategist; and Dan Greenhaus, Solus Alternative Asset Management chief strategist and economist, join 'Closing Bell' to discuss market outlooks, how much to read into the most recent GDP print, and more.
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CNBC
27 minutes ago
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European markets head for negative open, shrugging off China-U.S. trade talks progress
Skyline view of the City of London financial district from the viewpoint in Greenwich Park in London, United Kingdom. Mike Kemp | In Pictures | Getty Images Good morning from London, welcome to CNBC's live blog covering European financial market action as well as the latest regional and global business news, data and earnings. Futures data from IG suggests London's FTSE will open 14 points lower at 8,852, Germany's DAX down 105 points at 23,925, France's CAC 40 down 9 points at 7,788 and Italy's FTSE MIB 95 points lower at 40,082. Global markets are having a mixed reaction to news that U.S. and Chinese officials reached a tentative consensus on trade after a second day of talks in London. The negotiators will now seek approval on the framework from the U.S. and Chinese presidents. Asia-Pacific markets climbed overnight on the apparent breakthrough, but U.S. stock futures inched lower, with investors also looking ahead to May inflation data. — Holly Ellyatt An Aldi supermarket in Alhambra, California, in 2024. Eric Thayer | Bloomberg | Getty Images Global markets will be keeping a close eye on the latest U.S. inflation report for May. Economists polled by Dow Jones expect a 0.2% month-over-month increase, while the headline consumer price index is anticipated to have grown 2.4% on an annual basis. Hotter-than-expected data could spook investors who are already on edge over inflationary pressures and the trajectory of Federal Reserve rate cuts. Traders will be keeping an eye on the Nvidia keynote address at the VivaTech conference in Paris on Wednesday, as well as Goldman Sachs' annual European Financials Conference. Meanwhile, U.K. investors will be looking out for the government's "Spending Review," in which it sets out day-to-day spending and investment plans for all government departments. Earnings are set to come from retail giant Inditex . — Holly Ellyatt
CNBC
2 hours ago
- CNBC
CNBC's The China Connection newsletter: AI hits an already weak jobs market
China's eagerness to adopt artificial intelligence comes just as economic growth is slowing, putting millions of routine jobs at risk. "I'm planning to get rid of 360 [Security Technology's] entire marketing department. This way the company can save tens of millions a year," founder and chair Zhou Hongyi said in a Chinese-language video on Friday night, translated by CNBC. It's since been viewed more than 191,000 times on popular Chinese platform Weibo alone. Zhou, who has nearly 12 million followers on Weibo, said he's attempting to use the company's forthcoming generative AI tool to prepare a press conference for the product by himself in five days. The AI agent plus search tool is due for release on Wednesday. Whether or not it's just another sales ploy by Zhou, who goes by the moniker "Red Shirt Big Uncle Zhou Hongyi," the video captures an emerging reality: companies pressured to cut costs may increasingly replace jobs with AI. Worrying signs are piling up. Last week, U.S. financial giant Citi said it's cutting 3,500 tech jobs in China by October. U.S.-based Anthropic CEO Dario Amodei told Axios last month that AI could lead to unemployment rates of 10-20% over the next one to five years. In China, more companies are discussing AI-driven efficiencies, especially in marketing and coding. Food delivery giant Meituan told investors in late May that about 52% of new code was generated by AI, up from 27% disclosed in March. Big Chinese tech companies are pointedly asking for new young recruits to have AI skills, said Shu Weibing, partner and COO at HangHang AI. "If a student doesn't know how to use AI, then it will be very hard to get a job," Shu said in Mandarin, translated by CNBC. HangHang AI focuses on AI skills training. On June 6, it launched a "Global AI" platform to help entrepreneurs get initial funding for AI projects, even if they are still working a day job. So far, the platform has 70 investors participating and at least 50 projects on board, Shu said. He added that the goal is to invest in 1,000 projects over three years, with each one receiving 10,000 yuan from three backers, totaling 30,000 yuan to jump-start each project. Chinese authorities have encouraged efforts to embrace AI and robots, while increasing support for employment. The Ministry of Finance announced on Tuesday that it has allocated 66.74 billion yuan ($9.29 billion) for employment-related subsidies this year. On Monday, the Ministry of Industry and Information Technology and the Ministry of Civil Affairs announced a two-year pilot program to test the use of robots for senior citizen care. To be sure, AI isn't about to suddenly hit every single industry. But since the Covid-19 pandemic, a persistent story, seen on Chinese social media and in casual conversations, is one of job uncertainty. Record graduates. More people getting some support from their parents and pursuing higher degrees. Companies cutting wages, clawing back bonuses and closing departments, if not shutting down altogether. Individuals and businesses have turned to social media and selling products via livestream, where competition is still fierce but the potential for overnight success remains. Complicating the job market further is a local culture that prizes work, even if it means regular overtime and weekend conferences. The unhealthy competition is most apparent in China's electric car market, where fierce competition has led to a race to the bottom, prompting government warnings to stop what's colloquially known as "neijuan," or involution. That's not even accounting for the economic impact of escalating trade tensions, which resulted in a 34% plunge in China's exports to the U.S. last month, official data showed Monday. About 16 million jobs in China are tied to U.S. exports, Goldman Sachs has estimated. Monthly business surveys for May showed contraction in the labor market across the board. The data indicate a situation rarely seen in the past decade, Goldman Sachs' Hui Shan pointed out in an analysis published last week. "Labor markets are very weak, especially in construction and among small businesses." But "labor market weakness could be a catalyst" for more stimulus, the report said. China's top leaders typically hold a policy meeting in late July. Mark Smith, CEO of mineral development company NioCorp, says that the U.S. needs to find a way to get along with China for its supply of heavy rare earths while the former builds up its supply chain, and that stockpiling of critical minerals is unlikely to be effective, as China is the sole supplier. Robin Xing, Chief China Economist at Morgan Stanley, discussed the ongoing differences between the U.S. and China, ranging from trade to EVs, and how that affects sentiment in China. Meituan's Keeta unit launched drone deliveries in Hong Kong, extending its existing routes in Mainland China. Meituan's Vice President Yinian Mao spoke with Emily Tan about the company's drone delivery dreams and how they fit into its broader operations. U.S.-China agree on framework following London talks. The U.S. and China have reached an agreement on trade, representatives from both sides said Wednesday after a second day of high-level talks in London. U.S. President Donald Trump and Chinese President Xi Jinping spoke by phone late last week, stabilizing what had become a fraught relationship with both countries accusing each other of violating the Geneva trade agreement. China's consumer price index fell in May. It was the fourth-straight negative read. Core CPI, which excludes food and energy prices, did recover from a high last seen in January. Trade data pointed to modest growth in exports in May, while imports fell far more than expected, another sign of weak domestic demand. U.S. has exaggerated Huawei's chip developments. So says the Chinese telecommunications company's CEO, in an interview published on the front page of the Chinese Communist Party's newspaper on Tuesday. Ren Zhengfei said while Huawei chips are one generation behind those of U.S. peers, the company is finding ways to offset the gap. Chinese and Hong Kong stocks climbed in early trade on Wednesday after leaders from the U.S. and China said they have reached an agreement on trade. Mainland China's CSI 300 was up 0.8% to its highest level in over two weeks, while Hong Kong's Hang Seng Index — which includes major Chinese companies — rose 0.6% as of 11 a.m. local time. The CSI 300 has lost roughly 0.97% while the Hang Seng Index has gained over 21.54% so far this year. June 11: Xpeng G7 car launch June 13: Chinese Vice Premier He Lifeng is scheduled to depart the U.K. after U.S.-China trade talks and other meetings June 16: China retail sales, industrial production and investment data for May
Boston Globe
2 hours ago
- Boston Globe
Musk says Tesla's robotaxi service to ‘tentatively' launch in Austin on June 22
Last month, Musk told CNBC that the taxis will be remotely monitored at first and 'geofenced' to certain areas of the city deemed the safest to navigate. He said he expected to initially run 10 or so taxis, increase that number rapidly and start offering the service in Los Angeles, San Antonio, San Francisco and other cities. Advertisement Musk has been promising fully autonomous, self-driving vehicles 'next year' for a decade, but the pressure is on now as Tesla actually begins to operate a self-driving taxi service. Sales of Tesla's electric vehicles have sagged due to increased competition, the retooling of its most popular car, the Model Y, and the fallout from Musk's turn to politics. The Austin rollout also comes after Musk had a public blowup with President Donald Trump over the administration's tax bill. Some analysts have expressed concern that Trump could retaliate by encouraging federal safety regulators to to step in at any sign of trouble for the robotaxis.
