Wharton's Jeremy Siegel: Waller is right that the Fed should be lowering rates
Jeremy Siegel, Wharton School professor of finance and Wisdom Tree chief economist, joins CNBC's 'Closing Bell' to discuss market outlooks.
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CNBC
4 hours ago
- CNBC
China's property sector has been in an extended slump. Shrinking population is making it worse
China's real estate sector has grappled with a deepening downturn for years. Now a shrinking population is casting another shadow over the stagnant property market. Goldman Sachs estimates that demand for new homes in Chinese urban cities will remain suppressed at under 5 million units per year in the coming years — one fourth of the peak of 20 million units in 2017. "Falling population and slowing urbanization suggest decreasing demographic demand for housing" in the coming years, Goldman Sachs economists said in a note Monday. The country's population is estimated to fall to below 1.39 billion by 2035 from 1.41 billion, according to World Bank's latest data, said Tianchen Xu, senior economist at Economist Intelligence Unit, citing a combination of fewer newborns and more deaths from an ageing population. Shrinking population will cripple home demand by 0.5 million units every year in the 2020s and a lead to a bigger dent of 1.4 million units annually in the 2030s, Goldman Sachs estimates, compared to the positive contribution of 1.5 million units in the 2010s when population was on a steady rise. Fertility rate in the country has continued to fall even after Beijing relaxed its one-child policy in 2016, and despite Beijing's efforts to incentivize child-bearing via cash incentives. Stagnant incomes, instability over job prospects and a poor social security system have dissuaded Chinese young people from having more babies. Beijing's pronatalist policies will likely have "limited effect" as they do not address the deep-rooted issues, Xu said, such as high economic costs for child-bearing and people's tendency to postpone marriage for career progression and "an embrace of individuality." Underscoring the declining birth rates, nearly 36,000 kindergartens across the country closed down over the past two years, with the number of students in preschools falling by over 10 million. That's according to CNBC's calculation of the official data released the Ministry of Education. Similarly, the number of elementary schools dropped by nearly 13,000 between 2022 and 2024. That is rippling through school-adjacent housing markets that once saw inflated prices on the back of strong demand for better public schools. The once-sizable premium was fueled by access to elite schools and expectations of rising property values. But with a shrinking population and local governments scaling back district-based enrollment policies, the added value of these homes has started diminishing, according to William Wu, China property analyst at Daiwa Capital Markets. A mother of a 7-year-old boy in Beijing told CNBC that the price of her apartment had fallen by about 20% from over two years ago when she bought it. It cost her roughly twice the average price for an apartment in the city, so that her son could attend a good elementary school. The number of children entering primary school in 2023 reached the highest level in over two decades, according to Wind Information, before dropping in 2024, the year her son enrolled. That demographic shift is an additional overhang to the property market, which has struggled to emerge from a painful downturn since late 2020. Despite a raft of central and local government measures since last September, the real estate slump has shown little sign of abating. New home prices fell at their fastest pace in seven months in May, according to Larry Hu, chief China economist at Macquarie, extending a two-year stagnation, despite the government efforts aimed at arresting the decline. New home sales in 30 major cities fell by 11% year on year in the first half of this month, worsening from the 3% drop in May, Hu said. "Holders of investment properties are likely to be net sellers (to owner-occupiers) for the foreseeable future," over expectations that home prices will continue to fall, Goldman Sachs estimates. While Goldman expects the rise in China's urbanization rate to temper in the coming years, hurting urban housing demand, Wu said demographic drag on the property market was not yet "imminent" and may take decades to play out. In the nearer term, "some of this decline will be offset by continued urbanization, and housing upgrade demand," Wu said, as the latter would account for an increasing share of China's total housing demand.
Business Insider
8 hours ago
- Business Insider
Meta's CTO says OpenAI's Sam Altman countered Meta's massive AI signing bonuses
OpenAI CEO Sam Altman said Meta was trying to poach AI talent with $100M signing bonuses. Meta CTO Andrew Bosworth told CNBC that Altman didn't mention how OpenAI was countering offers. Bosworth said the market rate he's seeing for AI talent has been "unprecedented." OpenAI's Sam Altman recently called Meta's attempts to poach top AI talent from his company with $100 million signing bonuses "crazy." Andrew Bosworth, Meta's chief technology officer, says OpenAI has been countering those crazy offers. Bosworth said in an interview with CNBC's "Closing Bell: Overtime" on Friday that Altman "neglected to mention that he's countering those offers." The OpenAI CEO recently disclosed how Meta was offering massive signing bonuses to his employees during an interview on his brother's podcast, "Uncapped with Jack Altman." The executive said "none of our best people" had taken Meta's offers, but he didn't say whether OpenAI countered the signing bonuses to retain those top employees. OpenAI and Meta did not respond to requests for comment. The Meta CTO said these large signing bonuses are a sign of the market setting a rate for top AI talent. "The market is setting a rate here for a level of talent which is really incredible and kind of unprecedented in my 20-year career as a technology executive," Bosworth said. "But that is a great credit to these individuals who, five or six years ago, put their head down and decided to spend their time on a then-unproven technology which they pioneered and have established themselves as a relatively small pool of people who can command incredible market premium for the talent they've raised." Meta, on June 12, announced that it had bought a 49% stake in Scale AI, a data company, for $14.8 billion as the social media company continues its artificial intelligence development. Business Insider's chief media and tech correspondent Peter Kafka noted that the move appears to be an expensive acquihire of Scale AI's CEO, Alexandr Wang, and some of the data company's top executives. Bosworth told CNBC that the large offers for AI talent will encourage others to build their expertise and, as a result, the numbers will look different in a couple of years. "But today, it's a relatively small number and I think they've earned it," he said.
CNBC
9 hours ago
- CNBC
Supreme Court rejects fast track of Trump tariff challenge by toy companies
Key Points President Donald Trump's tariffs, a key part of his trade agenda, have drawn legal challenges from businesses and individuals questioning his authority to implement the high levies. The Supreme Court ruling gives the Trump administration more time to file its response to the challenge from two toy companies. The two toy companies argued that the International Emergency Economic Powers Act did not give Trump the authority to implement his tariffs. The Supreme Court on Friday rejected a request from two toy companies to expedite their challenge to President Donald Trump's tariffs. The ruling from the nation's high court means that the Trump administration now has the standard 30-day window to file its response to the challenge. Two small family-owned companies, Learning Resources and hand2mind, argued that Trump lacked authority under the International Emergency Economic Powers Act to impose his April 2 tariffs. The companies earlier this week asked the Supreme Court to expedite consideration of their challenge and bypass a federal appeals court. "In light of the tariffs' massive impact on virtually every business and consumer across the nation, and the unremitting whiplash caused by the unfettered tariffing power the president claims, challenges to the IEEPA tariffs cannot await the normal appellate process," the companies argued in their request. Rick Woldenberg, the chairman and CEO of Learning Resource and hand2mind, told CNBC that the Friday Supreme Court decision "was a disappointment but honestly just another twist in the road." "You want to win every motion but sometimes you don't," he said, adding that, "ultimately this showdown will be at the Supreme Court." Trump declared a national economic emergency under the IEEPA to justify implementing his tariffs without first getting congressional approval, a strategy that has drawn legal challenges from businesses and individuals questioning his authority The U.S. Court of International Trade last month temporarily blocked Trump's tariffs, saying that the IEEPA, which became law in 1977, does not authorize a president to implement universal duties on imports. But a federal appeals court earlier this month allowed Trump's tariffs to remain in effect until it hears arguments on that case at the end of next month. — CNBC's Lori Ann Wallace contributed reporting.
