Gamestop – BlackRock vs. Soros Highlights Investors’ China Dilemma
Talk about timing. Just days after George Soros branded
China investment a “tragic mistake,” the world’s largest asset manager has raised 6.7 billion yuan ($1 billion) for its first mutual fund in the country.
It is also the first ever mutual fund solely run by a foreign firm allowed to sell to Chinese individuals. BlackRock has also recommended investors increase their exposure to China.
Soros sees the whole thing very differently and said pouring billions into China would likely lose money for BlackRock’s clients and damage U.S. national security interests.
The timing is merely coincidental but it does serve to highlight the raging debate over China and bets on the world’s second-largest economy.
Those investing in China have had a rough ride this year as Beijing’s ever-widening regulatory crackdown has hammered stocks across a number of sectors. But the narrative seems to be shifting, at least among some, from “don’t touch China with a 10-foot pole” to one that paints the country as a window of opportunity.
Bridgewater Associates founder Ray Dalio added to that sentiment, telling Bloomberg’s Radar event that China cannot be ignored. “It’s part of the world that one can’t neglect and not only because of the opportunities it provides but you lose the excitement if you’re not there,” he said.
ARK Invest’s Cathie Wood perhaps best symbolizes the narrative shift. Having dumped almost all its Chinese stocks at the end of July, the firm has returned to the market in recent weeks.
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SEC Threatens to Sue Coinbase for Its Plan to Pay Out Interest on Crypto Assets
The U.S. Securities and Exchange Commission has sent crypto exchange
a notice that it would sue the company if it goes ahead with a plan to allow users to earn interest by lending crypto assets.
- Coinbase’s chief legal officer, Paul Grewal, wrote in a blog post that because of the SEC Wells notice it would delay the launch of its “Lend” product “until at least October.”
- “We don’t know why” the SEC issued such a notice, Grewal wrote, insisting that Coinbase’s take is that the Lend program is not a security.
- Barron’s emailed the SEC for comment early Wednesday but has yet to receive a reply since the agency’s offices are closed.
- In a similar move last month, New Jersey’s Bureau of Securities ordered crypto platform BlockFi to stop offering interest-bearing accounts.
What’s Next: Regulators around the world have begun to signal the end of the party for the wide world of crypto assets, amid worries that the current lack of oversight might one day compromise financial stability.
Disney’s Shang-Chi Breaks Labor Day Box Office Records
Movies and the theaters have struggled to recover from the pandemic but the waiting is over.
Shang-Chi and the Legend of the Ten Rings grossed $94.4 million over the Labor Day weekend in the U.S. and Canada, more than triple Halloween’s take on the same holiday weekend in 2007.
- Even without the Monday holiday, Shang-Chi raked in $75.5 million in ticket sales from Friday to Sunday, just behind Black Widow’s $80 million at its July debut. While Black Widow was also streamed on Disney+, Shang-Chi was shown only in theaters, to an audience of nearly 7 million.
CEO Adam Aron tweeted “thanks to Shang-Chi, @AMCTheatres posted a new Labor Day Weekend admissions revenue record,” breaking 2013’s record. For the first time, AMC’s theater attendance beat prepandemic numbers for the same days in 2019.
- Colliers Securities analyst Steven Frankel said the Disney flick’s sales beat industry forecasts. Shang-Chi also grossed $83.5 million internationally through Monday, though that excludes China, where authorities have not approved it.
- Nearly 60% of the audience saw the movie in a regular theater, 23% saw Shang-Chi on IMAX and 13% chose a premium large format experience, Deadline reported.
What’s Next: After Shang-Chi’s totals came out,
moved up the debut for Venom: Let There Be Carnage to Oct. 1 from Oct. 15. Originally slated for October 2020, Venom’s release was repeatedly delayed during the pandemic.
—Connor Smith and Janet H. Cho
Ford Lures Back the Engineer Working on Apple’s Secret Car
hired Doug Field, an
executive in charge of the tech company’s secret car project as well as a former
engineer, to help boost the Detroit auto maker’s next-generation technology.
- Car makers are racing to build their software know-how. Field will report to CEO Jim Farley as Ford’s chief advanced technology and embedded systems officer, returning to the company where he began his engineering career in 1987.
- Field played a key role at Tesla developing the compact Model 3 and its related vehicle, the Model Y compact sport-utility vehicle. But during the Model 3 production troubles, Apple lured him to join its secret car project.
- Ford recently debuted the Mustang Mach-E crossover and the F-150 Lightning pickup truck, for which the company recently said it has racked up more than 130,000 orders.
- Apple scheduled its new-gadget reveal for Sept. 14, when it is expected to unveil a new Watch and AirPods and perhaps a new iPhone but might not mention anything about a car.
What’s Next: Ford is boosting its investment in electric vehicles, components and infrastructure to more than $30 billion by 2025, which is more than the $22 billion target it set in February.
GameStop’s Earnings Are Coming
is back in the spotlight. Its earnings report after the close could kick-start yet another wave of frenzied trading in the meme stock.
- The consensus among the four analysts still covering the stock calls for a fiscal second-quarter adjusted net loss of 67 cents a share, according to FactSet. They forecast sales of about $1.23 billion, down from $1.28 billion in the first quarter.
Investors will be looking for updates from the company’s new management team. Chewy co-founder Ryan Cohen became board chairman of GameStop in June. CEO Matt Furlong and Chief Financial Officer Mike Recupero—both
alums—started in their roles at GameStop on June 21 and July 12, respectively. This will be their first GameStop earnings report.
- Aside from hiring a swath of executives with substantial e-commerce experience, and investing in fulfillment capabilities, Cohen has signaled he wants to revamp GameStop’s digital presence and customer service.
What’s Next: Wedbush analyst Michael Pachter told Barron’s he doesn’t expect any substantive updates. “They want to be like Amazon,” Pachter says. “I expect them to keep the mystery alive.”
Biden Touts Climate Change Urgency After Visiting Ida’s Northeast Victims
President Joe Biden visited areas of New Jersey and New York hardest hit by the flooding, wind damage and tornadoes from Hurricane Ida that killed at least 69 people in six states. The White House asked Congress for $24 billion for recovery costs for Ida and other natural disasters.
- In New Jersey, where 27 people died and four are still missing, “any amount of climate resiliency infrastructure …instantly is a game changer for our state,” said Gov. Phil Murphy. He earlier told CBS’ “Face the Nation” that the state’s “infrastructure was built for a different reality.”
- Hurricane Ida, which slammed into the Gulf Coast on Aug. 29, left thousands without power and caused billions of dollars in estimated damage from the Gulf to the Northeast. More people died in New Jersey and New York than in Louisiana.
- Biden called for federal spending to fortify infrastructure to defend people and property and make power grids, sewers and drainage systems more resilient against future storms. With wildfires, hurricanes, tornadoes, flooding and extreme weather becoming more frequent and devastating, “We don’t have any more time,” he said.
- Biden, who is headed to a United Nations Climate Change summit in Scotland in November, said climate change requires a global response. “We either act or we’re going to be in real, real trouble. Our kids are going to be in real trouble,” he said.
What’s Next: Congress already has a long to-do list this month, including raising the debt ceiling and passing $3.5 trillion in social spending programs through the budget reconciliation process and approving the $1 trillion bipartisan infrastructure plan. The outcome could set the stage for next year’s midterm elections.
—Janet H. Cho
My husband and I have been married for a year, but have been together for over seven years. We’re in our late 50s, early 60s, and we each own a small business.
Neither one of us makes a ton of money, but we’re happy to help the other out when times have been tough. (Think coronavirus.) The house and all utilities are in my name, and are set up for autopay through my checking account. I also buy the majority of the groceries.
He has never balked at my asking him for money to help. We have never had a system to split expenses. He feels that unless I specifically ask for money, then I must not have any need for additional funds. He goes on about his life and doesn’t give it a thought.
After two or three months with only getting an auto check from him for half the monthly mortgage, I think it’s not my job to remind him that the utilities don’t get paid by themselves. I resent having to ask for money for living expenses. Do I have to take on that job too?
I can’t imagine living in his house and not keeping up with my share of the expenses. For me, it’s the principle of the matter. He’s a wonderful man and I love him dearly. I would love to be able to take this issue off the table for good.
Is this issue always mine to deal with?
Read The Moneyist’s response here.
—Newsletter edited by Liz Moyer, Matt Bemer, Camilla Imperiali, Steve Goldstein, Rupert Steiner