The latest global market volatility has reinforced China’s status as a distinct market, even if its growth has slowed recently. While U.S. tech stocks plunged and Japanese stocks swung wildly in a historic two days of price action , Chinese stocks suffered less . As of the end of the Asia trading week Friday, before the U.S. market open, the Nasdaq 100 and Nikkei 225 were both down by about 2.5% over the last five trading days, according to Wind Information. In contrast, the Shanghai composite was down by 1.5% and the MSCI China index was up by 0.2%. Hong Kong’s Hang Seng Index was up by 0.9%. “If we continue [to have] volatile markets in the US and other developed markets, people are going to look elsewhere to generate returns,” Matt Wacher, chief investment officer, Asia-Pacific, for Morningstar Investment Management, said in a phone interview Friday. “We think the fundamentals will win out in the end and capital will come back to some of the companies in China because they’re too compelling an investment opportunity to pass up,” he said. Fund flow data from EPFR showed that international investors significantly increased their purchases of Chinese stocks on Monday, Aug. 5, before trimming holdings the next day. The investors remained net buyers of Chinese stocks for the third quarter so far as of Aug. 6, the data showed. “We believe that there are reasons for international investors to look towards redeploying some allocation back to the China equity market after being relatively lightly positioned,” William Yuen, investment director, Invesco, said in an emailed statement Friday. “Valuations of Chinese equities are near historical lows and the stock market is broad and deep enough to enable investors to search for growth opportunities,” he said. “The economy has also shown signs of stabilizing, as policy easing measures take effect. Finally, the low correlation of the China stock market with the U.S. stock market could provide investors with diversification benefits.” Chinese stocks, especially those traded on the mainland, have historically been less correlated to global market moves due to Beijing’s capital controls and other restrictions. International investors without operations in China have gradually been able to access some of those mainland stocks, called A shares, via stock-connect programs through Hong Kong. However, this year ”foreign long-only funds and hedge funds have been actively selling” A shares, HSBC analysts pointed out in an Aug. 6 report. That’s left net inflows from both fund types at 13 billion yuan ($1.81 billion) for the year through Aug. 2, the report said. On the flip side, semiconductor company Montage Technology and state-owned train company CRRC — both listed in Shanghai — led net inflows during that time, according to HSBC. Both stocks have fallen over the last five trading days. The latest global market volatility was spurred in part by the unwinding of the Japanese yen carry trade, after the Bank of Japan’s rate hike and growing expectations for U.S. rate cuts. A carry trade is a practice in which investors borrow money in a currency from a country with low interest rates, and invest in currencies with higher yields. The investors then profit from the difference in rates, but can lose money if this suddenly changes. A worrying U.S. jobs report on Aug. 2 helped fuel expectations that the Federal Reserve will soon finally cut interest rates, shifting assumptions about how much certain assets might yield in returns versus others. It hasn’t been hard for investors to choose where to put most of their money when the 10-year Treasury yield has traded above 4% — versus 2.17% for the Chinese equivalent. HSBC’s multi-asset team expects a stock market sell-off from unwinding the Japanese yen carry trade could last one month. If the Fed does cut rates, that could support the case for Chinese stocks, Steven Sun, head of research, HSBC Qianhai Securities, and a team said in the Aug. 6 report. U.S. rate cuts would mean the People’s Bank of China could then further ease its monetary policy, “which is critical for China’s nascent property market recovery,” the analysts said. They added that a weaker U.S. dollar makes the Chinese yuan more attractive to foreign inflows, while U.S. rate cuts are generally positive for emerging markets such as China. China’s latest trade and inflation data released in the last several days indicated that domestic demand is holding up, although the economy isn’t necessarily firing on all cylinders. The National Bureau of Statistics is scheduled to release additional data for July on Thursday, of which retail sales will be key to watch after it grew by just 2% in June. However, global institutions’ caution on Chinese stocks won’t likely change quickly. “Investors should still prefer the US to Chinese financial markets,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said in an email. “Times of economic stress typically favor US markets, even when the US is the source of stress. We believe that’s because the US economy is more diverse than those that are export-oriented (as China’s still is).” “The real problem with China’s investment outlook isn’t the current market volatility, but the Chinese economy’s ongoing weakness and the disappointing policy response so far,” he said. “Deflation is the central problem.” He noted that last month’s ” Third Plenum ” meeting focused on “resilience to external shocks” instead of a range of domestic problems. Chinese stocks have struggled to rebound amid dour sentiment about the massive property market and other economic challenges since the Covid-19 pandemic. Hong Kong’s Hang Seng Index is clinging to gains for the year so far — after a record losing streak of four down years. “I think what you saw over the last few days has been that some of those names, Alibaba , Tencent , have held up pretty well in the face of that global volatility,” Morningstar’s Wacher said. “I think that’s because they’re already priced pretty reasonably from a valuation perspective, not much more to fall.” Tencent, the largest stock by market capitalization in the Hang Seng Index, and Alibaba’s Hong Kong-listed shares both closed Friday with gains of more than 3% for the week. “In Alibaba’s case, it’s still got a very good management team, similar to Tencent,” Wacher said, pointing to efforts aligned with investors’ interests in balance sheets and cutting costs. “We think that their inwardly focused on China consumption, and China consumption will turn around,” he said. “They’re going to generate most of their income within China, less susceptible to trade wars and shenanigans that go on in the global economy. Compelling opportunities from that perspective.”
Barrons Roundtable discusses reports that Gen Z members are aggressive about wanting to retire.
Gen Z is the youngest generation of adults today, but with many struggling to make ends meet, a growing proportion say they do not expect to retire and few are socking away money to do so.
A new report from the TIAA Institute and UTA’s NextGen Practice found that a greater share of these adults age 27 and below do not anticipate retiring – at least in the traditional sense – after prior data showed nearly half of young adults either don’t want to retire, don’t believe they will be able to afford to, or are not thinking about it at all.
Gen Z as a whole has a very different view of retirement than previous generations, and a growing proportion of young adults say they do not plan on retiring at all. (iStock / iStock)
What’s more, just 20% of Gen Z respondents of working age say they are saving for retirement at all. While planning for retirement is important for everyone, saving for the future is critical for this generation that is projected to live past 100 years old. Yet, a higher cost of living could be impacting their ability to do so.
The study found that almost one-third of Gen Z (29%) are living paycheck-to-paycheck, with most of their money going to funding their basic needs, making it increasingly difficult for them to achieve financial milestones like homeownership while saving for their financial futures.
“Thirty-six percent of respondents cited high debt or low income as the primary reason they are not saving for retirement,” Surya Kolluri, head of the TIAA Institute told FOX Business. “Gen Z is spending more on essentials than previous generations.”
Inflation is weighing on Gen Z’s finances more than prior generations, data shows. (iStock / iStock)
Kolluri said it is true that Gen Z is bearing the brunt of inflation more than the generations that preceded them, noting that as of this year, the annual inflation rate for Gen Z was half a percent higher than it was for other generations at the same age.
But Kolluri pointed to some positive findings in the data, too. He said that while only 1 in 5 reported saving for retirement, 66% of those who are saving for retirement are doing so through 401(k)s.
Empower President and CEO Ed Murphy discusses retirement planning on ‘The Claman Countdown.’
There is also at least an awareness amid Gen Z’ers that it is important to save for the future. Eighty-four percent report saving a portion of their income each month (albeit not for retirement), and 57% say they have a budget that they stick to.
Kolluri noted 52% of Gen Z reported putting savings into savings accounts because they value the liquidity that supports current financial freedom.
“They do not equate saving for retirement as helping to ensure their financial freedom later in life…and ‘freedom’ is a concept that is very important to Gen Z,” he said. “They want flexibility and access to savings if and as they want.”
LONDON — Cybersecurity firm Wiz is seeking to hit $1 billion of annual recurring revenues next year, the company’s billionaire co-founder Roy Reznik told CNBC, adding that the firm will go public “when the stars align.”
Wiz makes software that connects to cloud storage providers like Amazon Web Services or Microsoft Azure and scans for everything it stores in the cloud, helping organizations identify and remove risks in their cloud environments. It was founded by four Israeli friends while they served in 8200, the intelligence unit of Israel’s army, and most of Wiz’s engineering personnel are still based in Tel Aviv, Israel.
Earlier this year, the company rejected a $23-billion acquisition bid from Google, which would have marked the tech giant’s largest-ever takeover. At the time, Wiz CEO Assaf Rappaport said the startup was “flattered” by the offer, but would remain an independent company and aim to list instead.
Speaking with CNBC at Wiz’s new office space in London, Reznik said that the company has received offers from “many people that want to get their hands on Wiz stock” — but that, while “very flattering,” the firm still thinks it can do it alone by going public.
“We’ve already broken a few records as a private company, and we believe we can also break a few more records as an independent public company as well,” Reznik said.
Four-year-old Wiz has raised $1.9 billion in venture capital to date, including $1 billion secured this year in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital at a valuation of $12 billion.
In 2022, Wiz said it had reached $100 million in annual recurring revenue (ARR), up from just $1 million in 18 months. At the time, the startup said it was “the fastest software company to achieve this feat.”
Reznik, who is the vice president of research and development at Wiz, said the firm now hopes to double from the $500 million of ARR it achieved this year and hit $1 billion in ARR in 2025, which CEO Rappaport cited as a key condition before the company goes public.
UK expansion
Wiz has been expanding its presence internationally, with a particular focus on Europe, from where it sources 35% of its revenues. Last month, the firm opened its first European office in London.
“I think the talent here is amazing, and the ecosystem is amazing,” Reznik told CNBC. “We have always been very much involved in Europe — and specifically the U.K. — and I feel like it’s a natural evolvement of Wiz to double down even more here in London and the U.K.”
The U.K. represents a major growth opportunity when it comes to cybersecurity, Reznik said, adding that recent events like the cyberattack on National Health Service hospitals and an incident affecting Transport for London have “roof topped” the level of interest in the kinds of products Wiz offers.
“The cloud market is going to reach $1 trillion over the next next few years,” Reznik, who moved from Israel to the U.K. just three months ago, told CNBC. “This year is going to be around $700 million, while security is just 4% out of that, I would say. So that makes it a $30 billion market, which is huge.”
Speaking about the U.K. market, Reznik said: “We see a lot of interest here. Many of the largest banks and retailers, are Wiz customers. But we’re also seeing a huge potential for growth.”
Wiz’s customers include online retailer ASOS and digital bank Revolut as customers in the U.K.
Check out the companies making headlines in after-hours trading: Netflix — The streaming stock popped more than 4% after third-quarter earnings topped expectations. Netflix earned $5.40 per share on $9.83 billion in revenue, while analysts forecast $5.12 a share and $9.77 billion in revenue. The company also said its ad-tier memberships jumped 35% quarter over quarter. Intuitive Surgical — Shares jumped about 5% after the maker of the da Vinci surgical robot posted better-than-expected third-quarter results. Intuitive Surgical earned $1.84 per share on $2.04 billion in revenue. Analysts surveyed by LSEG had estimated earnings of $1.63 per share on $2 billion in revenue. WD-40 — The maintenance product maker’s shares dropped more than 4% after a disappointing fiscal fourth-quarter earnings report. The company earned $1.23 per share, and said it expects fiscal 2025 profits of between $5.20 and $5.45 per share. OceanFirst Financial — Shares advanced 2.8% after OceanFirst announced that it earned 39 cents per share in the third quarter, a penny above the consensus estimates from FactSet. On the other hand, net interest income and net interest margin both came in lower than forecast. MGP Ingredients — The spirits and food ingredient maker’s stock tumbled nearly 20% after the company warned of disappointing third-quarter results and lowered its full year guidance. CEO David Bratcher said its performance was hurt by weak alcohol trends and elevated whiskey inventories. Marten Transport — Shares of the trucking company slid almost 3% after third-quarter earnings came in lower than analysts anticipated. Revenue and operating income were also lower than the forecasts from three analysts polled by FactSet. Supernus Pharmaceuticals — Shares popped as much as 5% after Supernus Pharmaceuticals announced results from a Phase 2a study of an antidepressant therapy that showed a “rapid and substantial decrease” in depressive symptoms. — CNBC’s Hakyung Kim and Sarah Min contributed reporting.