<p><a href="http://www.cnbc.com/todd-haselton/" rel="author">Todd Haselton</a> | <span class="twitter-url"><a href="http://twitter.com/@robotodd">@robotodd</a></span></p>
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<p>Apple unveiled its home speaker during WWDC 2017 on Monday. The device, called HomePod, will go toe-to-toe with existing competitors such as the Amazon Echo and Google Home.</p>
<p>Apple marketing boss Phil Schiller said Apple wanted to combine good speakers with smart speakers you can talk to, referencing Sonos and Amazon Alexa. Schiller said the speaker &#8220;needs to rock the house&#8221; free from distortion. It also needs to have &#8220;spatial awareness&#8221; to make the music sound good no matter the room size. It also needs to be fun to use, Apple said.</p>
<p>It&#8217;s powered by an A8 processor that Apple says helps it tap into the cloud and provide the best audio experience in your room. There are seven tweeters inside, too, and 6 microphones that allow you to talk to the speaker. &#8220;Hey Siri,&#8221; brings the speaker to life and then you can ask it to play music.</p>
<p>This isn&#8217;t just about music, though. You can also ask HomePod to control HomeKit devices and adjust the air conditioning or lights. Or you can ask it for the news, weather, traffic, sports scores, to text someone with messages and set reminders.</p>
<p>Also, Schiller made a point to say that Apple cares a lot about its user&#8217;s privacy, so nothing is ever being sent until you say &#8220;Hey Siri.&#8221;It uses an anonymous Siri ID, too, so your searches aren&#8217;t tracked back to you.</p>
<p>Amazon&#8217;s $179.99 <a class="inline_asset" href="https://www.amazon.com/Amazon-Echo-Bluetooth-Speaker-with-WiFi-Alexa/dp/B00X4WHP5E" target="_self">Echo device</a> offers tight integration with Amazon services like shopping and audiobooks, in addition to integrations with services such as Nest, Uber, Fitbit, Domino&#8217;s and Pandora. Amazon also offers a $49.99 Dot speaker and the $229.99 Echo Show, which features a screen. Google&#8217;s $109 competitor, <a class="inline_asset" href="https://store.google.com/product/google_home?utm_source=madeByGoogle&amp;utm_medium=MS&amp;utm_campaign=google_home_BN" target="_self">Google Home</a>, offers similar options.</p>
<p>Apple&#8217;s speaker will launch this December in white or gray and will cost $349.</p>
<p><strong>This story is developing, check back for more.</strong></p>
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Apple just unveiled HomePod, a $349 competitor to Amazon’s Echo

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<p>The bounce in Treasury yields witnessed after the election of <a href="http://www.cnbc.com/donald-trump/" target="_self">Donald Trump</a> is now decaying in the D.C. swamp. If the <a href="http://www.cnbc.com/id/43752521" target="_self">Federal Reserve</a> continues to ignore this slow growth and deflationary signal from the bond market and continues along its current rate hiking path, the yield curve will invert by the end of this year and an equity market plunge and a recession is sure to follow.</p>
<p><a class="inline_asset" title="http://www.investopedia.com/terms/i/invertedyieldcurve.asp?lgl=myfinance-layout-no-ads" href="http://www.investopedia.com/terms/i/invertedyieldcurve.asp?lgl=myfinance-layout-no-ads" target="_self">An inverted yield curve</a>, which has correctly predicted the last seven recessions going back to the late 1960s, occurs when short-term interest rates yield more than longer-term rates. Why is an inverted yield curve so crucial in determining the direction of markets and the economy? Because when bank assets (longer-duration loans) generate less income than bank liabilities (short-term deposits), the incentive to make new loans dries up along with the money supply. And when asset bubbles are starved of that monetary fuel they burst. The severity of the recession depends on the intensity of the asset bubbles in existence prior to the inversion.</p>
<p>The Fed has traditionally controlled overnight lending rates between banks. That all changed when the Fed started to buy longer-term Treasurys and mortgage backed securities as a result of the Great Recession. Nevertheless, outside of these quantitative easing programs, the long end of the yield curve is primarily influenced by the inflationary expectations of investors. The yield curve inverts when central banks believe inflation is headed higher; but bond investors are convinced of the opposite.</p>
<div id="inline_movable_ad"> The last two times the yield curve inverted was in the years 2000 and 2006. The inversion and subsequent recession that began in the year 2000 caused NASDAQ stocks to plummet 80 percent. The following inversion caused the Great Recession in which the S&amp;P 500 dropped 50 percent and, according to the Case/Shiller 20-City Composite Index, home prices fell over 30 percent.</div>
<p>This next inversion will occur in the context of record high equity, real estate and bond market valuations that will require another government bailout. However, this time around the recession will commence with the balance sheets of the Fed and Treasury extremely overleveraged right from the start.</p>
<p>As you can see from the chart below, if the 10-year note yield (orange line) continues to fall along its current trajectory; and the Fed plods along with its avowed Dot Plot hiking path (blue line), the yield curve should invert around the end of 2017. Market chaos and another brutal recession should soon follow.</p>
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<p>What could prevent this baneful scenario from happening?</p>
<p>One of the most popular Wall Street myths is that long-term interest rates rise simply because the Fed is raising the Fed Funds Rate (F.F.R.). This normally occurs because the central bank is trying to catch up to rising inflation and is initially behind the curve. However, later on in the tightening cycle long rates begin to decline as inflation is stamped out of the economy.</p>
<p>For example, from June 2004 thru June 2006 the Fed raised the F.F.R. from 1 percent-5.25 percent; but the 10-year note only increased from 4.7 percent-5.2 percent. That means the benchmark note went up just 50 basis points even though the F.F.R. was raised by 425 basis points. What is especially notable here is that GDP growth was well above 3 percent in both 2005 and 2006; as opposed to today&#8217;s environment of 1.6 percent GDP growth for all of 2016, and just 1.2 percent in the first quarter of 2017. The fear of recession and deflation is the primary reason why the 10-year note yield is currently falling.</p>
<p>The Fed has been tightening monetary policy since it started to taper its $80 billion per month quantitative easing program back in December 2013. It has subsequently raised rates three times and is now most likely already ahead of the curve due to the anemic state of the economy. But, as always, the Fed fails to read the correct economic indicators and is now fixated on the low unemployment rate and its dubious effect on inflation.</p>
<p>Some argue that the yield curve won&#8217;t invert if economic growth stalls because the Fed will then truncate its rate hike path. And indeed there is a lot of evidence for the second quarter recovery narrative to be proven false. For instance, April data on existing home contract closings declined 2.3 percent month over month, to a 5.57 million annual rate versus a forecast of 5.65 million. And new homes weren&#8217;t much better as single family home sales declined 11.4 percent to 569,000 annualized vs. the 610,000 forecast. Pending home sales also disappointed falling 1.3 percent. Then we had durable goods falling 0.7 percent, and core capital goods orders showed no growth at all.</p>
<p>These data points highlight the reality that the second quarter will not spring higher from the anemic first quarter growth rate. But the problem is that the F.F.R. is already close to 1 percent. Therefore, even if we get just two more hikes before the Fed realizes growth is faltering, that rate will be near 1.5 percent. If the economy slows enough that even the Fed takes notice, the 10-year note yield should retreat back to where it was in July of 2015 (1.35 percent). In this second scenario, the yield curve inverts despite the Fed&#8217;s failure to consummate its dot plot plan.</p>
<p>Of course, there is a small chance that the yield curve doesn&#8217;t invert due to an aggressive reverse QE program&#8211;a very quick unwinding of the Fed&#8217;s $4.5 trillion balance sheet. While this may avoid an inversion of the yield curve, it would also siphon off capital from the private sector, as investors divert yet more money to the Treasury.</p>
<p>An aggressive selling of the Fed&#8217;s balance sheet is a very unlikely scenario given the minutes of the May Federal Open Market Committee meeting. In that meeting the Fed decided to merely taper the re-investment of its balance sheet, which is the pace in that it stops reinvesting its assets. With a total debt to GDP ratio of 350 percent, this third scenario has very low odds of occurring; but should remand the economy into a recession even if such a plan is deployed.</p>
<p>Therefore, the only rational way to avoid an inverted yield curve, market chaos and a recession is if long-term Treasury yields reverse their long-term trend lower due to a rapid increase in GDP growth. This would only occur if Trump&#8217;s agenda of repatriation of foreign earnings, tax cuts and infrastructure spending is imminently adopted. But the probability of this happening very soon is getting lower by the day.</p>
<p>An inverted yield curve will lead to market disorder as it did in 2000 and 2006. But this next recession starts with our national debt over $20 trillion dollars and the Feds balance sheet at $4.5 trillion. Therefore, when the yield curve inverts for the third time this century you can expect unprecedented chaos in markets and the economy to follow shortly after. This is because the yield curve will not only invert at a much lower starting point than at any other time in history but also with the Fed and Treasury&#8217;s balance sheets already severely impaired.</p>
<p>There will be unprecedented volatility between inflation and deflation cycles in the future due to these factors. This represents a huge opportunity for those that can identify these inflexion points and know where to invest. To be more specific, sell your long positions and get short once the curve inverts; and then be prepared to hedge against inflation when the Fed responds with helicopter money.</p>
<p><em>Commentary by Michael Pento, the president and founder of Pento Portfolio Strategies. He is also author of the book, &#8220;<a class="inline_asset" href="http://www.amazon.com/Coming-Bond-Market-Collapse-ebook/dp/B00C42S5KE/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1368206596&amp;sr=1-1" target="_blank" rel="noopener noreferrer">The Coming Bond Market Collapse</a>,&#8221; and </em><em>produces the weekly podcast, &#8220;<a class="inline_asset" href="http://pentoport.com/blog/subscription/" target="_blank" rel="noopener noreferrer">The Mid-week Reality Check.</a>&#8220;</em></p>
<p><em><strong>Follow CNBC&#8217;s Opinion section on Twitter <a class="inline_asset" href="http://www.twitter.com/CNBCopinion" target="_blank" rel="noopener noreferrer">@CNBCopinion</a>.</strong></em></p>
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Op-ed: This market indicator has predicted the past 7 US recessions. Here’s what it’s signalling now

<p>Stocks most owned by hedge funds and mutual funds managing more than $3 trillion are handily beating the market this year, according to Goldman Sachs.</p>
<p>Technology is by far the favorite sector of professional investors, with hedge funds increasing their bets in the space last quarter by a large amount.</p>
<p>&#8220;Follow the proverbial &#8216;smart money.&#8217; The favorite stocks shared by both mutual fund and hedge funds have generated higher median YTD returns than the consensus most out-of-favor stocks,&#8221; strategist David Kostin wrote in a note to clients Friday.</p>
<p>The firm&#8217;s basket of 13 companies, which are on both the Goldman &#8220;Hedge Fund VIP&#8221; and &#8220;Mutual Fund Overweight Positions&#8221; lists, rallied 21 percent this year through Friday versus the <a class="inline_quotes" href="http://data.cnbc.com/quotes/.SPX" target="_self" data-gdsid="593933" data-inline-quote-symbol=".SPX">S&amp;P 500&#8217;s</a> 9 percent return.</p>
<p>Here are the 13 stocks hedge funds and mutual funds are betting on. Goldman says its analysis covers $1.9 trillion in hedge fund assets and $1.3 trillion in large cap mutual fund assets.</p>
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<p>Goldman noted that technology is the favorite sector by far of professional investors. Hedge funds particularly love the &#8220;FAANG&#8221; stocks: <a class="inline_quotes" href="http://data.cnbc.com/quotes/FB" target="_self" data-gdsid="139619" data-inline-quote-symbol="FB">Facebook</a>, <a class="inline_quotes" href="http://data.cnbc.com/quotes/AAPL" target="_self" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple</a>, <a class="inline_quotes" href="http://data.cnbc.com/quotes/AMZN" target="_self" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon</a>, <a class="inline_quotes" href="http://data.cnbc.com/quotes/NFLX" target="_self" data-gdsid="26444" data-inline-quote-symbol="NFLX">Netflix</a> and Google parent <a class="inline_quotes" href="http://data.cnbc.com/quotes/GOOGL" target="_self" data-gdsid="19004" data-inline-quote-symbol="GOOGL">Alphabet</a>, the firm said.</p>
<p>Hedge funds are increasing their bets on technology, while mutual funds appear to be taking some profits, according to Goldman.</p>
<p>&#8220;Hedge fund managers increased net positioning in Info Tech by 82 bp, ending the quarter 352 bp [basis points] overweight relative to the Russell 3000 (25% vs. 21%),&#8221; the report said.</p>
<p>http://cnbc.africa/news/2016/11/19/wealthy-families-investments/</p>
<p>The two big money manager classes don&#8217;t agree on everything, according to the Goldman report. The financial sector is the most underweight group among hedge funds, but it is the second-most overweight sector by mutual funds, the report said.</p>
<p><em>Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.</em></p>
<p>Reporting by <a href="http://www.cnbc.com/tae-kim/" rel="author">Tae Kim</a> | <span class="twitter-url"><a href="http://twitter.com/firstadopter">@firstadopter</a></span></p>


Goldman: Follow the ‘smart money’ because the stocks most loved by pro investors are crushing the market

<div class="source"><a href="http://www.cnbc.com/leah-ginsberg/" rel="author">Leah Ginsberg</a> | <span class="twitter-url"><a href="http://twitter.com/lginzy">@lginzy</a></span></div>
<p>Would you rather have a house or a handbag? If you have to choose, you can&#8217;t afford the Hermès white Himalaya crocodile diamond Birkin bag that Christie&#8217;s just unloaded for $379,261, making it the most expensive handbag ever sold at auction.</p>
<p>The exclusive white Himalaya Birkin, handmade from Niloticus crocodile with more than 240 diamonds on its 18-karat-gold hardware, is routinely in the top spot for most expensive bag — this year&#8217;s titleholder (sold in Hong Kong) knocked the crown off another white Himalaya Birkin that <a class="inline_asset" title="https://news.artnet.com/market/most-expensive-bag-ever-sold-2016-507656" href="https://news.artnet.com/market/most-expensive-bag-ever-sold-2016-507656" target="_self">sold for a little over $300,000 in 2016</a>.</p>
<div id="attachment_126745" style="width: 610px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-126745" class="wp-image-126745 size-full" src="http://cnbc.africa/wp-content/uploads/2017/06/Expensive_Handbag_in_the_World_sold_at_Christies_Hong_Kong_on_31_May_2017.600x400.jpg" alt="" width="600" height="400" /><p id="caption-attachment-126745" class="wp-caption-text">Hermès matte white Himalaya Niloticus crocodile diamond Birkin sold for more than $379,000 at Christie&#8217;s in Hong Kong</p></div>
<p>Celebrities, of course, love the bag. David Beckham, who is worth $350 million, <a href="http://www.cnbc.com/2017/05/17/david-beckham-gave-wife-victoria-an-expensive-hermes-birkin-bag.html" target="_self">bought his clothing designer wife, Victoria, an albino Nilo crocodile Himalayan Birkin</a> in 2008 for a reported £80,000 (or about $100,000). Kim Kardashian has also been spotted with the Himalayan.</p>
<div id="attachment_126746" style="width: 510px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-126746" class="wp-image-126746 size-full" src="http://cnbc.africa/wp-content/uploads/2017/06/David-Victoria.jpg" alt="" width="500" height="335" /><p id="caption-attachment-126746" class="wp-caption-text">Photo: Flickr.</p></div>
<p>The Himalayan is so-named because the coloring resembles the famous mountain range, and it&#8217;s &#8220;possibly the rarest and most desirable handbag in the world,&#8221; according to Hermès expert <a class="inline_asset" title="http://www.vogue.com/article/most-expensive-hermes-birkin" href="http://www.vogue.com/article/most-expensive-hermes-birkin" target="_self">Jane Finds</a>.</p>
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<p>&#8220;Hermès only very rarely—and very thoughtfully—creates unique pieces of this caliber,&#8221; says Finds. <a class="inline_asset" title="http://www.christies.com/features/Deconstructed-The-Himalaya-Birkin-7219-1.aspx" href="http://www.christies.com/features/Deconstructed-The-Himalaya-Birkin-7219-1.aspx" target="_self">Christie&#8217;s</a> estimates only one or two of the bags are handmade per year.</p>
<p>The bag is so rare and expensive in part because white or albino crocodiles are hard to come by and the dying process for the bag is painstaking.</p>
<p>Even the simplest of Birkin bags <a class="inline_asset" title="http://fortune.com/2015/06/23/hermes-birkin-investment/" href="http://fortune.com/2015/06/23/hermes-birkin-investment/" target="_self">start at about $10,000</a> and are famous for their often months- or years-long waiting lists to purchase.</p>
<p>But Birkins aren&#8217;t just fashion statements or folly — these bags only <a class="inline_asset" title="http://time.com/4182246/hermes-birkin-bag-investment-gold/" href="http://time.com/4182246/hermes-birkin-bag-investment-gold/" target="_self">appreciate in value</a> with time.</p>
<p>Just ask Victoria Beckham. She reportedly has 100 Birkins in a collection that&#8217;s estimated to be worth <a class="inline_asset" title="http://www.vogue.com/article/birkin-celebrity-style-kim-kardashian-west-victoria-beckham" href="http://www.vogue.com/article/birkin-celebrity-style-kim-kardashian-west-victoria-beckham" target="_self">$2 million</a>.</p>


You know you’re rich when you buy this — a $379,261 handbag is the most expensive ever sold at auction

<p><a href="http://www.cnbc.com/robert-ferris/" rel="author">Robert Ferris</a> | <span class="twitter-url"><a href="http://twitter.com/RobertoFerris">@RobertoFerris</a></span></p>
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<li>Elon Musk said Thursday he will leave his positions on three presidential councils after Trump said the U.S. will leave the Paris Agreement.</li>
<li>Leaving the agreement is &#8220;not good for America or for the world,&#8221; the Tesla and Space X CEO said in a tweet</li>
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<p><a href="http://www.cnbc.com/elon-musk/" target="_self">Elon Musk</a> said Thursday he will leave his positions on three presidential councils.</p>
<p>Musk&#8217;s decision follows an announcement from <a href="http://www.cnbc.com/donald-trump/" target="_self">President Donald Trump</a> that <a href="http://www.cnbc.com/2017/06/01/trump-announces-paris-climate-agreement-decision.html" target="_self">the U.S. will back out of the Paris climate accord.</a></p>
<p>Leaving the agreement is &#8220;not good for America or for the world,&#8221; the <a class="inline_quotes" href="http://data.cnbc.com/quotes/TSLA" target="_self" data-gdsid="74213" data-inline-quote-symbol="TSLA">Tesla</a> and Space X CEO said in a tweet.</p>
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<p dir="ltr" lang="en">Am departing presidential councils. Climate change is real. Leaving Paris is not good for America or the world.</p>
<p>— Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/870369915894546432">June 1, 2017</a></p></blockquote>
<p><script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<p>Musk had served on councils advising Trump on business, manufacturing jobs and infrastructure. He had defended his decision to serve the president, despite criticism. However, on Wednesday Musk warned <a class="inline_asset" title="http://www.cnbc.com/2017/05/31/elon-musk-threatens-to-leave-white-house-councils-if-trump-drops-paris-accord.html" href="http://www.cnbc.com/2017/05/31/elon-musk-threatens-to-leave-white-house-councils-if-trump-drops-paris-accord.html" target="_self">he might quit</a> if Trump withdrew from the Paris Agreement.</p>
<p>The landmark climate deal calls for the U.S. to reduce its greenhouse gas emissions by between 26 and 28 percent below 2005 levels by 2025, among other things.</p>
<p>Trump has said the Paris accord was negotiated to have terms that are unrealistic and unfair to the U.S.</p>
<p>The president is looking to withdraw from the accord and immediately restart talks to set targets that would be more fair. However, <a href="http://www.cnbc.com/2017/06/01/france-italy-germany-firmly-believe-paris-climate-deal-cant-be-renegotiated-reuters-citing-statement.html" target="_self">French, German and Italian officials said they do not believe the agreement can be renegotiated</a>.</p>
<p>The accord was the result of more than 20 years of negotiations, and the only countries in<br />
the United Nations Framework Convention on Climate Change that have not signed on to the deal are Syria and Nicaragua.</p>
<p>Proponents of the deal expect it will help bolster businesses like those that Musk runs. Both electric cars and solar energy can be used to help reach the targets proposed in the deal.</p>
<p>Musk isn&#8217;t the only CEO who has pushed Trump to uphold the deal. Others include <a class="inline_quotes" href="http://data.cnbc.com/quotes/AAPL" target="_self" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple</a> and <a class="inline_quotes" href="http://data.cnbc.com/quotes/MSFT" target="_self" data-gdsid="25619" data-inline-quote-symbol="MSFT">Microsoft</a>.</p>
<p>Silicon Valley investor Doug Derwin, who <a class="inline_asset" title="http://www.cnbc.com/2017/04/17/this-is-man-spending-millions-to-tell-elon-musk-to-dump-trump.html" href="http://www.cnbc.com/2017/04/17/this-is-man-spending-millions-to-tell-elon-musk-to-dump-trump.html" target="_self">had pledged</a> to spend up to $2 million of his own money on a campaign to pressure Musk to quit the councils, welcomed the news.</p>
<p>&#8220;Thanks, Elon, for doing the right thing,&#8221; said Derwin, in a statement sent to CNBC on Thursday. &#8220;Welcome to the resistance.&#8221;</p>
<p><a href="http://video.cnbc.com/gallery/?video=3000623723"><strong>Watch: Macron says Paris climate deal &#8216;irreversible&#8217;</strong></a></p>


Elon Musk is leaving presidential councils over withdrawal from Paris accord

<p>Saheli Roy Choudhury | <span class="twitter-url">@sahelirc</span></p>
<p>HYDERABAD, India — Voice-powered virtual assistants, underpinned by artificial intelligence, like <a class="inline_quotes" href="http://data.cnbc.com/quotes/AAPL" target="_self" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple&#8217;s</a> Siri, <a class="inline_quotes" href="http://data.cnbc.com/quotes/AMZN" target="_self" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon&#8217;s</a> Alexa, <a class="inline_quotes" href="http://data.cnbc.com/quotes/GOOGL" target="_self" data-gdsid="19004" data-inline-quote-symbol="GOOGL">Google</a> Assistant and <a class="inline_quotes" href="http://data.cnbc.com/quotes/MSFT" target="_self" data-gdsid="25619" data-inline-quote-symbol="MSFT">Microsoft&#8217;s</a> Cortana are becoming regular fixtures in people&#8217;s lives. They&#8217;re present at homes, on devices and watches and in cars, sending driving directions, weather updates, meeting reminders and the occasional joke or two when prompted.</p>
<p>http://cnbc.africa/news/technology/2017/01/04/amazon-is-selling-tvs-that-you-can-talk-to/</p>
<p>Beyond that, they remain limited in their ability to hold conversations with users, the same way real people might. Efforts are on, however, to use machine learning and real-time big data analytics to make virtual assistants understand multiple languages, accents, contexts and nuances to hold more human-like conversations.</p>
<p>International Data Corporation <a class="inline_asset" title="http://www.idc.com/getdoc.jsp?containerId=prUS42439617" href="http://www.idc.com/getdoc.jsp?containerId=prUS42439617" target="_self">predicts global spending on cognitive and AI solutions will see significant investments</a> over the next several years, and could achieve a compound annual growth rate of 54.4 percent through 2020.</p>
<p>Microsoft, for example, is turning to an unlikely group to bridge the gap between human-machine interactions: bilinguals. Of specific interest is the practice of code-mixing, which is when speakers switch back and forth between multiple languages in a single sentence or conversation. It&#8217;s commonly found in multilingual societies.</p>
<p>A handful of Microsoft researchers in <a href="http://www.cnbc.com/india/" target="_self">India</a> started Project Mélange, where they are studying the use of code-mixing among Indians online. They are trying to figure out how virtual assistants might be taught to respond to a user switching between, for example, English and Hindi in a conversation.</p>
<p><img loading="lazy" decoding="async" class="alignnone wp-image-41936 size-full" src="http://cnbc.africa/wp-content/uploads/2017/02/microsoft.jpg" alt="" width="800" height="490" /></p>
<p>&#8220;Compartmentalization of mixed languages (by multilinguals) have gone away with each coming generation,&#8221; Kalika Bali, a researcher at Microsoft, told CNBC in an interview. &#8220;So younger people use mixed languages in more and more phases of their lives.&#8221;</p>
<p>&#8220;To have a digital assistant, something like Cortana, you have to be able to understand (the user base),&#8221; she said, adding current systems weren&#8217;t trained to pick up multiple languages in a single conversation.</p>
<p>Microsoft&#8217;s philosophy is that virtual assistants should not be too intrusive on a user&#8217;s space and time, and only show up when they need to, Sundar Srinivasan, general manager of the AI division in India at Microsoft, said in a recent interview. Srinivasan&#8217;s team works on Cortana and Microsoft&#8217;s search engine Bing at the company&#8217;s development center in Hyderabad.</p>
<p>&#8220;A personal assistant is only as effective as you want her to be,&#8221; he said.</p>
<p>Cortana is available on Windows 10 and in selected smartphones running on the Windows operating software. It has about 140 million monthly active users versus about <a href="http://www.cnbc.com/2017/05/10/microsoft-windows-10-on-500-million-devices.html" target="_self">500 million devices currently running Windows 10</a>. The program is not available in many regions, but Srinivasan said Microsoft plans to expand it into other markets and onto more devices in the future.</p>
<p>By comparison, Google Assistant is available on both Android and iOS platforms, which <a class="inline_asset" title="http://www.gartner.com/newsroom/id/3725117" href="http://www.gartner.com/newsroom/id/3725117" target="_self">support about 99.8 percent of all smartphones in the world</a>.</p>
<p>http://cnbc.africa/news/technology/2017/02/27/smartphones-dead-in-five-years/</p>
<p>Srinivasan explained that Cortana was not like other Microsoft products such as Office, where the company could add features as and when needed. Instead, Cortana &#8220;needs to really understand human beings, and the bar for that is very high because that means we have to train the assistant with lots of human speech data,&#8221; he said.</p>
<p>&#8220;It&#8217;s going to take us time.&#8221;</p>
<p>Bali said the researchers&#8217; code-mixing study was inspired by observations from an anthropologist who was looking at the use of technology among Urdu-speaking youth in Hyderabadi slums. They were found using the internet to befriend and interact with girls from Brazil, who primarily spoke Portuguese. English, however, was the primary language for that communication, which piqued Bali&#8217;s interest and she had asked to see the data collected by the anthropologist.</p>
<p>&#8220;When I started seeing this data, I saw that not only were they using this very pidgin English kind of thing, but (they were) effectively communicating with each other,&#8221; Bali said, referring to the type of code-mixing that was happening in these conversations.</p>
<p>The team looks at every aspect of code-mixing, including text, speech, understanding and recognition. Bali said they also look at generational variations and why people switch between languages in a single conversation — for example, sometimes it&#8217;s for humor and at other times it&#8217;s to change topics.</p>
<p>But it may take years before a voice-powered virtual assistant can eloquently switch back and forth in multiple languages to respond to users. The biggest challenge now for Bali and the researchers is getting access to adequate data sets for study.</p>
<p>&#8220;Trying to solve just mono-lingual natural language processing and understanding has taken years. Now we&#8217;re talking about mixed stuff and where are we going to get data from?&#8221; Bali said. &#8220;Because everything is data-driven. And what are we going to do? It just seemed like a very difficult problem to solve but we were all so excited about this that we just went on.&#8221;</p>
<p>Currently, the team uses data collected from Twitter to study how users would switch between languages. Studies, Bali said, already showed Indian men who spoke English and Hindi tended to switch to the latter when they had to express negative sentiments or abuse. Women who are having a conversation in English, however, tended to stick with that language even when the content took a negative turn.</p>
<p>Teaching machines to interpret code-mixing could also potentially lead to developments in areas of opinion mining, customization and a better interpretation of nuances and context, Bali said.</p>
<p>&#8220;I think this would definitely help to bridge the gap in the human-computer interaction. The fact that you can actually talk to a machine the way you would normally talk to your friend is something we still need to wrap our heads around.&#8221;</p>
<p>http://cnbc.africa/news/technology/2017/04/28/artificial-intelligence-will-replace-half-jobs-next-decade-says-widely-followed-technologist/</p>


Microsoft researchers are trying to humanize virtual assistants

<p>Pete Johnston&#8217;s plan to build &#8220;the world&#8217;s most badass recruitment engine&#8221; could put a dent in Microsoft&#8217;s plans to wring money from LinkedIn&#8217;s 500 million users.</p>
<p>Johnston, a former designer for Google and ad giant M&#038;C Saatchi in London, and his backers, including PayPal co-founders Max Levchin and Peter Thiel, are betting that managing contract workers will one day become as valuable to corporations as hiring and paying their own staff.</p>
<p>The start-up, formerly known as Lystable and now renamed Kalo, charges 3 percent of what its customers pay to contractors they hire through the platform. It&#8217;s a bet on the growth of the freelance economy.</p>
<p>A report out this month from consulting firm McKinsey suggested that the gig economy will be here sooner than later. The study said 20 to 30 percent of workers in the U.S. and Europe already do &#8220;independent work.&#8221;</p>
<p>For his part, Johnson said that &#8220;we know who they are, what they worked on and have access to their financial data.&#8221;</p>
<p>But before he and his 50-person start-up take on the world&#8217;s largest software maker, Johnston first has to get used to a new name for the company, which until last week was called Lystable.</p>
<p>That name had an air of exclusivity — as in, you needed special qualifications to be &#8220;listable&#8221;—and Johnston wanted to move away from that. So the company asked the 50,000 freelancers registered on its website to come up with ideas. Johnston also hired a consulting firm that came up with another 30 names.</p>
<p>Yet the company&#8217;s new moniker came not from either of those sources, but from a much more serendipitous process.</p>
<p>Johnston earlier this month looked out onto San Francisco Bay, and saw two ships passing each other. As they crossed, the name of one was truncated to Kalo — and the proverbial light bulb went on.</p>
<p>&#8220;It was an emotional decision,&#8221; says Johnston.</p>
<p><strong>Managing freelancers is a mess</strong></p>
<p>He got the idea for the company while sitting in his Dublin apartment in 2014. He&#8217;d been working for a Google design unit in London that had just seven staff employees, but used more than 150 freelancers per year.</p>
<p>The process, run on a platform made by &#8220;a large enterprise software company&#8221; he declined to name, was worse than cumbersome.</p>
<p>Workers often were not paid quickly — and thus not exactly happy when Johnston and his co-workers asked them to come back for another project.</p>
<p>At first, the software was designed to identify workers and assign them tasks.</p>
<p>But those two steps weren&#8217;t enough, Johnston said, as &#8220;the (freelance) process would then go into this dark place&#8221; when it came time to pay them.</p>
<p>So the company, then based in London and still called Lystable, built a payment module, started charging a fee, and began signing up customers including Google, Airbnb, Expedia and The Economist.</p>
<p>Soon Johnston, a native of Belfast in Northern Ireland, moved to San Francisco, convinced two marquee investors to back him, and opened a new office in this city&#8217;s Financial District early this year.<br />
<strong><br />
Microsoft&#8217;s LinkedIn deal as validation</strong></p>
<p>&#8220;This is the sweet spot,&#8221; Johnston told CNBC, while pointing to a group of silos he&#8217;s drawn on the white board of the only conference room in Kalo&#8217;s new headquarters.</p>
<p>The silos represent various back-office functions now run largely by software from tech giants like SAP, IBM and Microsoft.</p>
<p>Putting together back-office data on contractors &#8220;is the key to building the world&#8217;s most badass recruitment engine,&#8221; said Johnston.</p>
<p>His talk of silos echoed one of the rationales given by Microsoft when the software giant acquired the professional social network LinkedIn for $26 billion last year.</p>
<p>&#8220;Today, all the information a professional needs to be successful are in silos,&#8221; according to a presentation Microsoft prepared to explain the deal.</p>
<p>&#8220;By connecting all these apps and data, we can create more connected, intelligent and productive experiences,&#8221; Microsoft said.</p>
<p>Yet Johnston believes that managing contract workers will become more valuable as their ranks grow, and that &#8220;any company that tries to manage them like staff workers is going to run into problems&#8221; like those he saw at Google&#8217;s London office.</p>
<p>He added that Microsoft&#8217;s LinkedIn&#8217;s deal validates his business model, but is confident Kalo can measure up.</p>
<p>&#8220;Do I think they&#8217;ll attack the freelance market and build a module as fast as us? No,&#8221; Johnston said.</p>


This ex-Googler is building a LinkedIn killer

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<div id="player_0_104489338_0" class="asset cnbcvideo imgasset desc_size600_400 featuredPromo theplatform-video__docked" data-autoplay="1" data-dockable="1">Bitcoin has more than doubled in price this year alone, but it has been outperformed by its closest rival Ether, which is up over 2,300 percent.</div>
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<p>On January 1, bitcoin was trading at the day&#8217;s high of $1,003.25. On Wednesday, it broke through the $2,300 barrier for the first time to hit a fresh record high of $2,377.32, according to CoinDesk, marking a year-to-date rise of 137 percent. <a href="http://www.cnbc.com/2017/05/19/bitcoin-price-record-high-japan-fork.html" target="_self" rel="noopener">To find out what&#8217;s driving bitcoin&#8217;s rally, read more here</a>.</p>
<p>Meanwhile, bullishness around bitcoin has stoked appetite for other cryptocurrencies. One in particular known as ether is getting traction. Ether has risen from $8.24 on January 1, to a high of $203.30, according to data from Coinmarketcap.com. This represents a 2,367 percent rise year-to-date.</p>
<div id="inline_movable_ad"><strong>What is Ether?</strong></div>
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<p>Ether runs on an underlying technology called Ethereum, which is a different blockchain to the one that underpins bitcoin.</p>
<p>While ether does have digital &#8220;coins&#8221; like bitcoin, companies are more focused on how the Ethereum blockchain could be used in real-world applications.</p>
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<div class="pro-video-chapters fall dyperf dyMonitor" data-adid="535383||1594|||">Ethereum has been designed to support so-called smart contract applications. A smart contract is a computer program that can automatically execute the terms of a contract when certain conditions are met, potentially taking a lot of the human involvement out of completing a deal. <a class="inline_quotes" href="http://data.cnbc.com/quotes/BARC-GB" target="_self" data-gdsid="10720" data-inline-quote-symbol="BARC-GB" rel="noopener">Barclays</a> for example, have <a href="http://www.cnbc.com/2016/04/19/barclays-used-blockchain-tech-to-trade-derivatives.html" target="_self" rel="noopener">used a form of this technology</a> to trade derivatives.</div>
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<h4 class="subtitle">How is it different to bitcoin?</h4>
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<p>Firstly, Ethereum is a lot younger having only been started in 2014, whereas bitcoin began in 2009. Ether&#8217;s market cap is at $18.6 billion versus bitcoin&#8217;s $39.2 billion, according to Coinmarketcap.com.</p>
<p>Ethereum is also <a href="http://www.cnbc.com/2017/03/14/ether-ethereum-cryptocurrency-hits-all-time-high-and-2-billion-market-cap-bitcoin.html" target="_self" rel="noopener">focused on smart contracts</a>, while bitcoin is very much about payment technology.</p>
<p>http://cnbc.africa/news/2017/01/02/bitcoin-three-year-high/</p>
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<h4 class="subtitle">Why has ether rallied so much?</h4>
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<p>While bitcoin has been getting support from certain governments and investors, the Ethereum blockchain has been backed by corporates wishing to use the technology for smart contract applications.</p>
<p>A group called the Enterprise Ethereum Alliance (EEA) was recently founded to connect large companies to technology vendors in order to work on projects using the blockchain. Companies involved in the launch include JPMorgan, Microsoft and Intel.</p>
<p><a href="http://www.cnbc.com/2017/05/23/bigger-than-bitcoin-enterprise-ethereum-alliance-grows-in-size.html" target="_self" rel="noopener">On Tuesday, the EEA announced</a> another 86 firms joined the alliance, which is adding growing legitimacy to the cryptocurrency.</p>
<p>At the same time, the rally in bitcoin has seen investors turn to alternative digital currencies as well as attracting a broader investment base. A year ago, over 83 percent of ether buying happened with bitcoin, according to data from CryptoCompare, showing that it was mainly crytocurrency enthusiasts interested in it. As of Wednesday, bitcoin accounted for just over 32 percent of trade while fiat currencies such as the U.S. dollar and Korean won have risen sharply.</p>
<p>&#8220;Yes the direct fiat flow options are a fleshing out of the ethereum ecosystem and show its broad appeal,&#8221; Charles Hayter, CEO of CryptoCompare, told CNBC by email.</p>
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<h4 class="subtitle">Will the rally last?</h4>
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<p>Not all in the market are convinced that the ether rally will last. Bitcoin trader Jason Hamilton is worried that products like Ethereum could be cloned.</p>
<p>&#8220;People are buying a specific blockchain, but the big interests are in the technology. They&#8217;ll probably make their own clones and the ether tokens everyone is buying won&#8217;t be used for much except trading. Who knows, though,&#8221; Hamilton told CNBC via a direct message on Twitter.</p>
<p>&#8220;I don&#8217;t usually trade ether. I&#8217;m afraid of that bubble bursting, but it could go on bubbling up for a long time still.&#8221;</p>
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Bitcoin may have more than doubled this year, but this rival is up 2,000 percent. Here’s why

<p>Ken Dilanian, Peter Alexander and Courtney Kube</p>
<div class="embed-container image">
<div class="caption">White House senior advisor Jared Kushner (C) sits alongside U.S. President Donald Trump (L) and Commerce Secretary Wilbur Ross (2nd L) as they prepare to meet with Saudi Arabia&#8217;s King Salman bin Abdulaziz Al Saud and the Saudi delegation at the Royal Court in Riyadh, Saudi Arabia May 20, 2017.</div>
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<p><a href="http://www.cnbc.com/jared-kushner/" target="_self">Jared Kushner</a>, <a href="http://www.cnbc.com/donald-trump/" target="_self">the president</a>&#8216;s son-in-law and one of his senior advisers, has come under FBI scrutiny in the Russia investigation, multiple U.S. officials told NBC News.</p>
<p>Investigators believe Kushner has significant information relevant to their inquiry, officials said. That does not mean they suspect him of a crime or intend to charge him.</p>
<p>The FBI&#8217;s scrutiny of Kushner places the bureau&#8217;s sprawling counterintelligence and criminal investigation not only on the doorstep of the White House, but on the cusp of the Trump family circle. The Washington Post first reported last week that <a class="inline_asset" title="http://www.cnbc.com/2017/05/19/a-white-house-official-close-to-trump-is-a-significant-person-of-interest-in-russia-probe-wapo.html" href="http://www.cnbc.com/2017/05/19/a-white-house-official-close-to-trump-is-a-significant-person-of-interest-in-russia-probe-wapo.html" target="_self">a senior White House official close to Trump was a &#8220;person of interest,&#8221;</a> but did not name the person. The term &#8220;person of interest&#8221; has no legal meaning.</p>
<p><a class="inline_asset" title="http://www.nbcnews.com/news/us-news/jared-kushner-now-under-fbi-scrutiny-russia-probe-say-officials-n764826" href="http://www.nbcnews.com/news/us-news/jared-kushner-now-under-fbi-scrutiny-russia-probe-say-officials-n764826" target="_self">Read the full NBC News report here.</a></p>
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Jared Kushner Now Under FBI Scrutiny in Russia Probe, Say Officials: NBC

<p>Gemma Acton | Sam Meredith</p>
<p>Oil prices fell on Thursday morning as traders reacted to comments from OPEC delegates ahead of a widely anticipated extension of the OPEC-led production cut agreement.</p>
<p>&#8220;Nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick,&#8221; Khalid Al-Falih, Saudi Arabia&#8217;s energy and industry oil minister told CNBC.</p>
<p>Saudi Arabia&#8217;s delegate explained while all options had been considered ahead of the announcement &#8211; including deeper cuts and a possible six-month extension &#8211; he suggested reaching an agreement to curtail oil production by a further nine months appeared the &#8220;safe bet&#8221;.</p>
<p><em><strong>This is a breaking news story, please check back later for more.</strong></em></p>
<p>A nine-month extension of the deal is the most likely outcome to be announced at OPEC&#8217;s post-meeting press conference due to be held at 5:00 p.m. local time in Vienna, according to analysts at Barclays.</p>
<p>A key risk to OPEC only agreeing a six-month extension is that it would expire shortly ahead of the seasonally weak first quarter in 2018, bringing idle capacity back online at a time of poor market demand, said the Barclays&#8217; note.</p>
<p>The international crude oil <a class="inline_asset" href="http://data.cnbc.com/quotes/lcocv1" target="_self" data-nodeid="100583837">Brent</a> benchmark was trading around 1 percent higher at $54.51 a barrel just after 09:00 a.m. London time with the U.S. <a class="inline_asset" href="http://data.cnbc.com/quotes/@CL.1" target="_self" data-nodeid="100279044">West Texas Intermediate</a> (WTI) benchmark edging up by nearly the same amount to sit at $51.84 a barrel.</p>
<p>Brent and WTI futures prices have tracked 13 percent and 14 percent higher respectively since this month&#8217;s lows were reached on May 4, as hopes for a nine-month extension have risen on the back of increasingly supportive comments from Saudi Arabia, Iran and Iraq for such a result.</p>
<div id="attachment_113526" style="width: 970px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-113526" class="size-full wp-image-113526" src="http://cnbc.africa/wp-content/uploads/2017/03/Oil-2-Pixabay.jpg" alt="" width="960" height="540" /><p id="caption-attachment-113526" class="wp-caption-text">Photo: Pixabay.</p></div>
<p>However, even a nine-month extension would be woefully insignificant, according to Johannes Benigni, chairman of JBC Energy Group, who claims market observers have always been too optimistic and that oil supply and demand will not be balanced before the end of 2019.</p>
<p>&#8220;OPEC now giving a signal they&#8217;re going to 2018 is great but you will see they have to roll on with their cuts. They will have to go to the end of next year and beyond,&#8221; said Benigni, talking to CNBC outside of OPEC&#8217;s Vienna headquarters ahead of the cartel&#8217;s meeting on Thursday.</p>
<p>Reading through Benigni&#8217;s predictions to get a sense of potential prices, the oil industry veteran warns that given the market is unlikely to be tight even as far out as 2020, forecasts for a $60 or $70 per barrel oil price are overly optimistic.</p>
<p>Furthermore, the reaction of U.S. shale producers will be a key factor in establishing price levels, said Benigni, adding &#8220;this supply response is a little bit of a risk for OPEC so if prices go really up it may not be in their interest.&#8221;</p>
<p>The U.S. shale market is currently in the process of rebalancing, according to the JBC chairman, who says that the era of falling production costs has now been replaced by stability but could soon turn to a climate of rising costs.</p>
<div id="attachment_91202" style="width: 970px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-91202" class="size-full wp-image-91202" src="http://cnbc.africa/wp-content/uploads/2017/03/Oil-Pixabay.jpg" alt="" width="960" height="639" /><p id="caption-attachment-91202" class="wp-caption-text">Photo: Pixabay.</p></div>
<p>Turning to the question of compliance with the agreement, which is key to its success, Benigni warns that Kazakhstan may not be hugely interested in demonstrating discipline. With regards to Russia, he believes that domestic oil companies will fall in line with President Vladimir Putin&#8217;s wishes. Therefore, provided Putin is on board, Russia should co-operate – however, the price the president and his compatriots will pay for participation is rising.</p>
<p>&#8220;Up to now, Russia managed very well with maintenance of their fields to basically make a natural cut but going forward they have much more potential. For them now not to produce as much as they can is very difficult to do,&#8221; Benigni explained.</p>
<p>Turning to other key deal participants, Benigni highlights that Iran and Iraq are coming from very different starting points.</p>
<p>&#8220;The Iranians don&#8217;t yet have more volume to offer so they must be very happy with this on the table. For the Iraqis it is more of a question mark because they could do much more &#8211; so for them not to do it is like – really?&#8221;</p>


Saudi energy minister says 9-month extension is the ‘safe bet’ which should do the trick

<ul>
<li>The average expense ratio for mutual funds and exchange-traded funds hit a record low in 2016, according to Morningstar.</li>
<li>Fees paid fell amid a major shift for investors from active funds to passive funds.</li>
<li>Vanguard, the firm Jack Bogle founded, has been a major beneficiary of the shift.</li>
</ul>
<p>Jeff Cox | <span class="twitter-url">@JeffCoxCNBCcom</span></p>
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<div class="headline">Investors are paying the lowest fees ever for funds in which they invest, a testament to the growing universe of lower-cost alternatives.</div>
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<p>The average expense ratio paid by investors — operating expenses divided by assets — in 2016 fell to 0.57 percent, down from 0.61 percent in 2015 and 0.65 percent in 2014, according to a study released Tuesday by Morningstar.</p>
<p>But it wasn&#8217;t because the funds themselves were getting cheaper. Instead, investors took advantage of the growing array of options available to them and shifted cash to lower-expense exchange-traded funds.</p>
<p>Indeed, the top 2,000 funds in terms of asset size carried an average expense ratio of 0.72 percent, the same as in the previous two years.</p>
<p>&#8220;This indicates that the decline in average mutual fund fees paid by investors stems largely from investors&#8217; migration to lower-costs funds and not from fee cuts by the fund management industry,&#8221; Patricia Oey, senior analyst at Morningstar, said in the report.</p>
<p>The record low in fees paid comes amid a massive shift in investor money <a href="http://www.cnbc.com/2017/02/24/why-chasing-high-flying-investment-managers-is-usually-a-really-bad-idea.html" target="_self">from mostly actively managed mutual funds to passively managed exchange-traded funds</a>. The key differences are that active funds employ managers who pick individual stocks and can move in and out of positions while ETFs track market indexes and carry substantially lower fees.</p>
<p>In 2016, the average active fund carried a 0.75 percent expense ratio, while passive funds averaged 0.17 percent, according to Morningstar. What&#8217;s more, fewer than 1 in 5 active managers beat the basic market index they are measured against. Active fund fees have declined 19 percent over the past three years while active funds have seen fees drop just 6 percent despite the intense competition.</p>
<p>In all, passive funds attracted a net $563 billion from investors during 2016 while active funds gushed $325.6 billion. The flows haven&#8217;t been quite as dramatic this year as about half of large-cap managers have been beating their benchmarks.</p>
<p>Investors have gotten considerably more picky when it comes to choosing funds.</p>
<p>In 2015 and 2016, active funds that Morningstar considers the most expensive saw outflows of $627 billion, while the cheapest 20 percent of funds saw inflows of $41 billion.</p>
<p>In terms of individual firms, investors have flocked to <a href="http://www.cnbc.com/2017/02/02/charles-schwab-just-fired-the-latest-shot-in-the-passive-investing-price-war.html" target="_self">Vanguard and BlackRock amid a price war</a> among asset managers.</p>
<p>Vanguard founder <a href="http://www.cnbc.com/jack-bogle/" target="_self">Jack Bogle</a> was one of the pioneers of index fund investing, though he is not as big a fan of ETFs. Over the past three years, Vanguard has raked in $739 billion of inflows while BlackRock has taken in $262 billion.</p>
<p>No other firm is close. Overall, BlackRock has $1.13 trillion in ETF assets while Vanguard is next with $711.5 billion and State Street has $521.3 billion, according to ETF.com. The latest data from the Investment Company Institute put total ETF assets at $2.77 trillion while the mutual fund industry excluding money market funds, has $14.3 trillion.</p>
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Winning! Investing costs have never been this cheap

<p>Britain has increased its security threat level to &#8220;critical&#8221; from &#8220;severe&#8221; following a suicide attack in Manchester that killed 22 people, including children, Prime Minister <a href="http://www.cnbc.com/theresa-may/" target="_self">Theresa May</a> said on Tuesday.</p>
<p>May also said members of the armed forces would boost security at key sites and military personnel might be deployed at public events such as concerts and sports events.</p>
<p>May said the independent body which sets the threat level had recommended it be raised after a man named by police as Salman Abedi set off an improvised bomb on Monday night as crowds streamed out of a concert.</p>
<p>&#8220;It is now concluded on the basis of today&#8217;s investigations that the threat level should be increased for the time being from severe to critical,&#8221; she said in a televised statement following a meeting of the government&#8217;s crisis response committee.</p>
<p>&#8220;This means that their assessment is not only that an attack remains highly likely but that a further attack may be imminent.&#8221;</p>


UK Prime Minister May raises threat level to critical

<p>Eustance Huang | CNBC</p>
<p>Once known as the next frontier for tech investments, <a href="http://www.cnbc.com/india/" target="_self">India</a> has seen many of its top start-ups seem to be going through a bit of a rough patch lately.</p>
<p>According to News Corp VCCEdge&#8217;s quarterly deal report for 2017&#8217;s calendar year first quarter, the value of start-up deals in India faced the worst quarterly performance since the third quarter of 2013 — with 165 deals made at a value of $237 million.</p>
<blockquote><p>&#8220;Unicorns in India are facing issues related to profitability and (a) slowdown in funding,&#8221; said Satish Meena, senior forecast analyst at Forrester Research.</p>
<div id="attachment_122356" style="width: 650px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-122356" class="wp-image-122356 size-large" src="http://cnbc.africa/wp-content/uploads/2017/05/start-up-shutterstock-1024x738.jpg" alt="" width="640" height="461" /><p id="caption-attachment-122356" class="wp-caption-text">Photo: Shutterstock.</p></div></blockquote>
<p>Meena told CNBC that most of the companies, especially those in online retail, are struggling to bring profitability into their business as a result of over-expenditure on customer acquisition following Amazon&#8217;s entrance into the Indian market in 2013.</p>
<p>Furthermore, Meena said, the problem has been exacerbated by an increasingly challenging regulatory environment — with more rules on discounts — and the government&#8217;s push for demonetization in November 2016, making it difficult for start-ups to realize aggressive targets.</p>
<p>Echoing Meena&#8217;s statements, Marcelo Ballvé, research director at CB Insights said &#8220;several of India&#8217;s prominent e-commerce and food delivery unicorns have not fared well recently.&#8221;</p>
<p>As a result, multiple high-profile unicorns have faced a reduction in valuation and fund raising efforts and the sector has seen an increase in consolidation.</p>
<p>For example, Ballvé cited the recent fundraising round for India&#8217;s largest e-commerce retailer Flipkart, in which the company&#8217;s overall valuation slid despite raising more than $1 billion.</p>
<p>Just a month before, its rival Snapdeal announced that it was laying off up to 600 employees due to over-expansion and diversification. In recent weeks, rumors have even started spreading about the possibility of an acquisition between the two companies, <a class="inline_asset" title="https://www.vccircle.com/snapdeal-flipkart-may-ink-merger-next-week/" href="https://www.vccircle.com/snapdeal-flipkart-may-ink-merger-next-week/" target="_self">with VCCircle reporting</a> that the deal could happen as early as this week.</p>
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<p>Ballvé also added that food delivery unicorn Zomato was &#8220;losing millions every year and has not raised in nearly 600 days.&#8221;</p>
<p>On the transportation front, a recent Economic Times article reported that transportation application company Ola suffered losses of Rs 2,313.66 crore (about $356 million) in the financial year of 2016 — nearly 3 times what it lost in the last previous financial year. The losses were a result of fierce competition from a foreign rival — Uber.</p>
<p>CNBC has reached out to Flipkart, Snapdeal, Zomato and Ola for comments regarding their recent performance, but has yet to receive a reply.</p>
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<h4 class="subtitle">The uncertain way ahead</h4>
<div class="group">
<p>As with start-ups in many countries, India&#8217;s unicorns are fighting to survive in a rapidly changing environment after enjoying years of venture capital funding.</p>
<p>&#8220;The reality is that India is by no means an immature market for VC,&#8221; Ballvé said. &#8220;It may soon be time to put up or shut up as the market has not done a great job generating venture-level exits.&#8221;</p>
<p>There have only been four exits valued at more than $500 million in the last 2 years in India, and none of them came from VC-backed companies, he said.</p>
<p>Ballvé did, however, offer some signs of hope, suggesting that investor sentiment remains positive as Flipkart&#8217;s down round was backed by big names like Tencent, Microsoft and eBay. Flipkart even folded eBay India under its umbrella.</p>
<p>Ballvé also highlighted bootstrapped software as a service company Zoho, an Indian company officially headquartered in the U.S. which he said was &#8220;reported to be doing $310 million per annum in revenue.&#8221; Also of note was payments unicorn One97 Communications, which was &#8220;seemingly doing very well,&#8221; Ballvé added.</p>
<p>At present, only two out of India&#8217;s 10 known unicorns have achieved profitability.</p>
<div id="attachment_121636" style="width: 1034px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-121636" class="size-full wp-image-121636" src="http://cnbc.africa/wp-content/uploads/2017/05/Innovation_Flickr.jpg" alt="" width="1024" height="683" /><p id="caption-attachment-121636" class="wp-caption-text">Photo: Flickr.</p></div>
<p>They are data analytics firm Mu Sigma — which was the county&#8217;s first unicorn to achieve profitability and has been profitable for a number of years — along with InMobi, the mobile advertising platform which announced to the Times of India last month that it has been profitable since June 2016.</p>
<p>Despite the struggles of many Indian start-ups, some observers say the sector is simply getting started. On the mobile front, smartphone penetration in India lags well behind fellow unicorn-incubator China.</p>
<p>The latest research by the Pew Research Center reported that in 2016, smartphone ownership in India stood at 18 percent — up from its 12 percent figure in 2013. China, meanwhile, has smartphone ownership of about 68 percent and has been growing at a steady rate from 37 percent in 2013.</p>
<p>&#8220;The e-commerce market in India has a lot of room to grow as the market is still in the early stages with low penetration and not well-established online shopping behavior,&#8221; said Sandy Shen, research director at Gartner.</p>
<p>Sounding positive on the future of e-commerce in India, Shen said consumers were likely to benefit in the form of better services as a result of increased competition. She added that competition from global players was likely to import the latest technologies and best practices from abroad, hastening the learning process for India&#8217;s startups.</p>
<p>&#8220;The market is big enough to accommodate at least three major players. Of course, e-commerce is a scale game, so whoever gets bigger faster will also win big.&#8221;</p>
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</div>


Are India’s top start-ups losing their sheen?

<ul>
<li>The budget would cut $1.7 trillion in spending over 10 years.</li>
<li>Medicaid, student loans and food stamps would see big reductions.</li>
<li>EPA, State Department and Education Department funds would be slashed.</li>
<li>Economists doubt the White House&#8217;s growth projections.</li>
</ul>
<p>The White House is seeking to slash federal spending by $3.6 trillion over the next decade through steep cuts across most agencies and tough new restrictions on aid to the poor — a dramatic rethinking of the role of government in the American economy.</p>
<p>About half of the money — $1.7 trillion over 10 years — comes from changes to programs such as Medicaid, food stamps and federal student loans that swelled during the Great Recession and long recovery. It also includes previously announced double-digit spending cuts next fiscal year for the Environmental Protection Agency, the State Department and the Education Department, among others, and eliminates popular institutions such as the National Endowment for the Arts.</p>
<p>The president&#8217;s proposed fiscal 2018 budget became public Monday night.</p>
<p><a href="http://www.cnbc.com/defense/" target="_self">Defense</a> is one of the few areas slated for increased funding. The White House is requesting an additional $25 billion next fiscal year, following a similar bump in the current budget. Veterans Affairs would also get a boost next year, along with the National Nuclear Security Administration.</p>
<blockquote>
<h2><span class="quote">&#8220;We are no longer going to measure compassion by the number of programs or the number of people on those programs. We will measure compassion and success by the number of people who get off those programs.&#8221;</span><span class="author">-Mick Mulvaney, director, OMB </span></h2>
</blockquote>
<p>Office of Management and Budget Director Mick Mulvaney on Monday called the proposal a &#8220;taxpayer-first budget.&#8221;</p>
<p>&#8220;We are no longer going to measure compassion by the number of programs or the number of people on those programs,&#8221; he told reporters. &#8220;We will measure compassion and success by the number of people who get off those programs.&#8221;</p>
<p>Reforming entitlement programs has long been a goal for Republican leadership — and some were disappointed that <a href="http://www.cnbc.com/donald-trump/" target="_self">President Donald Trump</a> vowed on the campaign trail not to touch the two biggest ones, Social Security and Medicare. But Trump left the door open to overhauling the patchwork system of other safety net programs that Republicans argue have become unwieldy and wasteful. Social Security disability insurance, for example, is in the crosshairs, though retirement payments are not. The proposal estimates that eliminating fraud and waste alone will save the government $143 billion over a decade.</p>
<p>&#8220;I think that it is a key step toward putting the budget toward a sustainable path to balance,&#8221; said Romina Boccia, a fellow at the Heritage Foundation, a conservative think tank. &#8220;While I think this is a good start, and the budget includes important reforms, we do need to continue to push for broader reforms to Medicare and Social Security because they are the key drivers of our growing spending and debt.&#8221;</p>
<p>Tackling entitlement programs puts the White House on politically treacherous terrain: Trump will need backing from at least some Democrats for his proposals to pass the Senate. But several line items they had dubbed &#8220;poison pills&#8221; during negotiations over the 2017 budget have reappeared in the new proposal, including funding for a wall along the Mexican border.</p>
<p>And on Monday, Democrats were already starting to draw battle lines, calling the programs critical for workers who are still struggling to recover from the recession.</p>
<p>&#8220;It&#8217;s a budget that takes a meat cleaver to the middle class by gutting the programs that help them the most, including many that help create jobs and power the economy,&#8221; Senate Minority Leader <a href="http://www.cnbc.com/chuck-schumer/" target="_self">Chuck Schumer</a> (D-N.Y.) said Monday on the floor.</p>
<p>The size and scope of the White House&#8217;s proposed cuts could make it tough to swallow even among Republicans. The proposal includes, for example, changing the funding formula for Medicaid, which some GOP moderates and state governors have opposed. It also calls for changes to &#8220;CHIP,&#8221; which provides benefits for low-income children who do not qualify for Medicaid. Finance Committee Chairman Orrin Hatch (R-Utah) was one of the original sponsors of the bill that created the program.</p>
<blockquote>
<h3><span class="quote">&#8220;The president &#8230; should not rely on unrealistic and rosy economic growth projections to pay for his proposals or fix our debt. It is not a good idea to spend as if you won the lottery in hopes that you actually do.&#8221;</span><span class="author">-Judd Gregg and Edward Rendell, co-chairmen, Campaign to Fix the Debt</span></h3>
</blockquote>
<p>The budget assumes the White House will be able to dramatically lower tax rates for households and businesses. The administration has proposed reducing the corporate rate to 15 percent and streamlining individual rates from seven brackets to just three. The White House provided no additional details about its proposal Monday but said it is a key component to pushing economic growth to 3 percent.</p>
<p>Mulvaney said the deep spending cuts, coupled with faster growth, will reduce the deficit as a percentage of GDP starting next year. He said the budget will balance by 2027.</p>
<p>However, many economists doubt the administration will be able to reliably and repeatedly hit a 3 percent target — even with significant tax cuts — due to the country&#8217;s aging population and declining productivity. The Congressional Budget Office currently estimates growth at about 1.9 percent.</p>
<p>&#8220;The president is right to focus on job creation and tax reform. But he should not rely on unrealistic and rosy economic growth projections to pay for his proposals or fix our debt,&#8221; said Judd Gregg and Edward Rendell, co-chairmen of the Campaign to Fix the Debt. &#8220;It is not a good idea to spend as if you won the lottery in hopes that you actually do.&#8221;</p>
<p>But Mulvaney said the administration stands by its forecast and that economists are underestimating the benefits of Trump&#8217;s proposals.</p>
<p>&#8220;That assumes a pessimism about America, about the economy, about the people, about its culture that we&#8217;re simply refusing to accept,&#8221; Mulvaney said. &#8220;We do not believe that [3 percent] is something fanciful.&#8221;</p>


White House 2018 budget proposal is out, and it slashes the social safety net

<ul>
<li>Attack in Manchester killed at least 19, injured scores</li>
<li>PM May calls it an &#8220;appalling terrorist attack&#8221;</li>
</ul>
<p>British Prime Minister Theresa May and opposition leader Jeremy Corbyn have agreed to suspend election campaigning until further notice following an explosion that killed 19 and injured dozens in the northern English city of Manchester.</p>
<p>May said on Tuesday that authorities were working to establish the details of the blast, adding that it was being treated as an &#8220;appalling terrorist attack&#8221;.</p>
<p>&#8220;We are working to establish the full details of what is being treated by the police as an appalling terrorist attack,&#8221; she said in a statement. &#8220;All our thoughts are with the victims and the families of those who have been affected.&#8221;</p>
<p>Her comments come as Britain prepares for <a href="http://www.cnbc.com/2017/05/21/uk-conservatives-lead-halved-ahead-of-election-according-to-this-poll.html" target="_self">a general election on June 8</a>.</p>
<p>Initial signs pointed to a suicide bomber as the cause of the blast, said two U.S. officials who spoke on condition of anonymity.</p>
<p>Earlier, British police had carried out a controlled explosion on a suspect device as a precaution, adding that the destroyed item turned out to be abandoned clothing rather than something suspicious.</p>
<p>The U.S. Department of Homeland Security said it was closely monitoring the situation in Manchester. In a statement, it said had &#8220;no information to indicate a specific credible threat involving music venues in the United States.&#8221;</p>
<p>&#8220;However, the public may experience increased security in and around public places and events as officials take additional precautions,&#8221; the statement said.</p>
<p>Monday&#8217;s explosion took place at a concert by Ariana Grande and five hours following the incident, the pop singer made her first comment in a tweet.</p>
<blockquote class="embed-container twitter-tweet twitter-tweet-error" data-twitter-extracted-i1495516168827528887="true"><p><a class="inline_asset" href="https://twitter.com/ArianaGrande/status/866849021519966208" target="_self">&#8220;broken. from the bottom of my heart, i am so so sorry. i don&#8217;t have words.&#8221;</a></p></blockquote>


British PM May, opposition leader Corbyn agree to suspend election campaigning

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<p><a class="inline_quotes" href="http://data.cnbc.com/quotes/F" target="_self" data-gdsid="17077" data-inline-quote-symbol="F">Ford Motor</a> reportedly shuffled its senior leadership team, with plans to replace CEO Mark Fields with executive chief Jim Hackett as a steep <a href="http://www.cnbc.com/2017/05/02/gm-ford-stocks-stocks-slammed-as-poor-sales-raise-red-flag-about-economy.html" target="_self">stock price decline</a> prompted a review of management, reports said on Monday, citing sources.</p>
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<p><img loading="lazy" decoding="async" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/04/23/104420710-fields-fortt.530x298.jpg?v=1492981533" alt="CNBC's Jon Fortt (l), seated with Ford CEO Mark Fields (r)." width="530" height="298" /></p>
<div class="attribution">CNBC</div>
<div class="caption">CNBC&#8217;s Jon Fortt (l), seated with Ford CEO Mark Fields (r).</div>
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<p>The changes were reported by both Forbes and <a class="inline_asset" title="https://www.nytimes.com/2017/05/21/business/ford-motor-chief-executive.html?_r=0" href="https://www.nytimes.com/2017/05/21/business/ford-motor-chief-executive.html?_r=0" target="_self">the New York Times</a>, citing unnamed officials.</p>
<p>&#8220;We are staying focused on our plan for creating value and profitable growth. We do not comment on speculation or rumors,&#8221; a Ford spokesman said in response to CNBC&#8217;s emailed request for comment.</p>
<div id="inline_movable_ad"> Last week, sources told CNBC that the automaker was planning to <a href="http://www.cnbc.com/2017/05/16/ford-cutting-jobs-to-jump-start-stalled-stock.html" target="_self">cut 10 percent of its jobs around the world</a> in a bid to increase profits and lift the stock, which is hovering near a five-year low.</div>
<p>Ford&#8217;s share price has dropped nearly 40 percent since <a class="inline_asset" title="CEO Mark Fields" href="http://ceo%20mark%20fields/" target="_self">CEO Mark Fields</a> took the job in 2014. Hackett is currently chairman of Ford Smart Mobility, a Ford Unit started to design, build, grow and invest in emerging mobility services, according the Ford website. He was named to the position March 10, 2016.</p>
<p><a class="inline_asset" title="https://www.nytimes.com/2017/05/21/business/ford-motor-chief-executive.html?_r=0" href="https://www.nytimes.com/2017/05/21/business/ford-motor-chief-executive.html?_r=0" target="_self">Read the full New York Times report here</a>.</p>
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Ford Motor is replacing Mark Fields as CEO

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<p>Economists have long argued that marriage rates are lower in poorer and less well-educated areas because men in those communities aren&#8217;t good financial bets. Without steady incomes, they can&#8217;t reliably contribute to a household, so while women might have children with them, they won&#8217;t commit to men for life. That&#8217;s been the assumption, anyway.</p>
<p>Fracking booms gave two researchers in the Economics Department at the University of Maryland, College Park, a perfect chance to test the hypothesis. What happens when money pours into a place, enriching the men, specifically, and giving them good jobs? More of them will get married, right?</p>
<p>As they discovered, to their surprise, the answer is no.</p>
<div id="inline_movable_ad"> Melissa S. Kearney and Riley Wilson published their findings in a <a class="inline_asset" title="http://papers.nber.org/tmp/96135-w23408.pdf" href="http://papers.nber.org/tmp/96135-w23408.pdf" target="_self">new paper</a> covered by <a class="inline_asset" title="https://www.washingtonpost.com/news/wonk/wp/2017/05/16/women-just-arent-that-into-the-marriageable-male-anymore-economists-say/?utm_term=.70583aaa1b45" href="https://www.washingtonpost.com/news/wonk/wp/2017/05/16/women-just-arent-that-into-the-marriageable-male-anymore-economists-say/?utm_term=.70583aaa1b45" target="_self">the Washington Post</a> that concludes, &#8220;there is no evidence of an increase in marriage rates. The pattern of results is consistent with positive income effects on births, but no associated increase in marriage.&#8221;</div>
<p>In other words, fracking money made more men dad-material, but it didn&#8217;t make them husband-material.</p>
<div id="dart_wrapper_responsiverectangle" class="dart_wrapper dart_ads_noniframe_responsiverectangle badge-ad">Though in more conservative parts of the country like Appalachia, infusions of steady jobs for men in the 1970s and 80s led to more marriages and then more children born in wedlock, the Washington Post reports, this time, though fracking-related wealth produced a localized baby boom, there wasn&#8217;t a corresponding boom in marriages.</div>
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<p>Kearney tells the Post, &#8220;There was a different response this time, and it&#8217;s sobering,&#8221; adding, &#8220;The commitment to childbearing with marriage in the 70s and 80s is just no longer there.&#8221;</p>
<p>The decline in marriage rates in the working class has been going on for long enough now that, in 2012, The New York Times printed a column titled, &#8220;<a class="inline_asset" title="https://economix.blogs.nytimes.com/2012/02/06/marriage-is-for-rich-people/?_r=0" href="https://economix.blogs.nytimes.com/2012/02/06/marriage-is-for-rich-people/?_r=0" target="_self">Marriage is for rich people</a>.&#8221; It concludes, &#8220;Rich men are marrying rich women, creating doubly rich households for them and their children. And the poor are staying poor and alone.&#8221; <a class="inline_asset" title="http://www.pewsocialtrends.org/2015/12/17/1-the-american-family-today/" href="http://www.pewsocialtrends.org/2015/12/17/1-the-american-family-today/" target="_self">40 percent of all babies</a> now are born to single moms or to unmarried partners.</p>
<p>That can be rough on families for numerous reasons. Pooling resources can make many aspects of life easier, from affording a home to being involved at school. Coupling up also helps people stay healthier and live longer, especially <a class="inline_asset" title="http://www.health.harvard.edu/newsletter_article/marriage-and-mens-health" href="http://www.health.harvard.edu/newsletter_article/marriage-and-mens-health" target="_self">men</a>.</p>
</div>
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<div class="group-container ">
<div class="embed-container image">Staying single can be a better bet for women, though, many of whom appreciate having more flexibility in terms of how to structure their personal lives than they did several decades ago. Sociology professor Pepper Schwartz <a class="inline_asset" title="http://www.cnn.com/2014/10/15/opinion/schwartz-single-women/" href="http://www.cnn.com/2014/10/15/opinion/schwartz-single-women/" target="_self">writes</a>, &#8220;Women now have choices that allow them to customize the arc of their lives and some of them find that it is best for them to put marriage aside.&#8221; Husbands who are &#8220;nonworking, noninvolved,&#8221; she points out, can be &#8220;useless.&#8221;</div>
<div class="group">
<p>Schwartz concludes that, now that they generally have economic and cultural freedom, women no longer are willing to settle: &#8220;While most women still want marriage, they don&#8217;t want it at just any price. They don&#8217;t want it if it scuttles their dreams.&#8221;</p>
<p>A lengthy article in Yes! Magazine makes the case that <a class="inline_asset" title="http://www.yesmagazine.org/issues/gender-justice/why-not-getting-married-is-smart-economics-for-women-20160512" href="http://www.yesmagazine.org/issues/gender-justice/why-not-getting-married-is-smart-economics-for-women-20160512" target="_self">this is both a logical and positive development for women overall</a>. And that assessment seems to be shared by popular recent TV shows ranging from the sweet (CW&#8217;s &#8220;Gilmore Girls,&#8221; whose four-episode epilogue was released in 2016 on Netflix) to the salty (HBO&#8217;s &#8220;Girls,&#8221; which just finished its six-season run). Despite their differences in tone, both shows foreground a version of success for their heroines that has a lot to do with individual fulfillment and little to do with marriage.</p>
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<p>That said, affluent, professional women usually have an easier time being single by choice, and two-parent households, which tend to have more time as well as more money, have been shown to be good for kids. &#8220;Children whose mothers are continuously married grow up to make higher incomes at age 40 than children raised at some point by single parents,&#8221; <a class="inline_asset" title="https://www.washingtonpost.com/news/wonk/wp/2014/09/08/children-with-married-parents-are-better-off-but-marriage-isnt-the-reason-why/?utm_term=.128d0dffd1ab" href="https://www.washingtonpost.com/news/wonk/wp/2014/09/08/children-with-married-parents-are-better-off-but-marriage-isnt-the-reason-why/?utm_term=.128d0dffd1ab" target="_self">reports</a> the Post. &#8220;Children with married parents also have more engaged parents, and it&#8217;s the engagement that really matters.&#8221;</p>
<p>Given that the Times also <a class="inline_asset" title="https://www.nytimes.com/2015/06/11/upshot/the-north-south-divide-on-two-parent-families.html" href="https://www.nytimes.com/2015/06/11/upshot/the-north-south-divide-on-two-parent-families.html" target="_self">finds</a> that &#8220;the sharp rise in single-parent families has <a class="inline_asset" href="http://www.nytimes.com/2012/07/15/us/two-classes-in-america-divided-by-i-do.html" target="_self">contributed to</a> sky-high inequality,&#8221; many economists have struggled to figure out how to induce working-class couples to marry. But if a steady income doesn&#8217;t make a man marriageable anymore, what does?</p>
</div>
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<div class="pro-video-chapters fall dyperf dyMonitor" data-adid="535383||4729|||">Well, larger <a class="inline_asset" title="https://www.nytimes.com/2015/06/11/upshot/the-north-south-divide-on-two-parent-families.html" href="https://www.nytimes.com/2015/06/11/upshot/the-north-south-divide-on-two-parent-families.html" target="_self">religious and cultural expectations</a> can help. But <a class="inline_asset" title="http://www.pewsocialtrends.org/2015/12/17/1-the-american-family-today/" href="http://www.pewsocialtrends.org/2015/12/17/1-the-american-family-today/" target="_self">education certainly seems to help most</a>, possibly because it speaks to a person&#8217;s long-term job prospects and earning potential.</div>
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<p>Kearney and Wilson say as much in their intro, noting, &#8220;non-marital childbearing has become the norm among young mothers and mothers with low levels of education.&#8221; And according to the Times, states with high rates of education also tend to produce stable families: In &#8220;Minnesota, New Jersey, Massachusetts and Connecticut, at least 51 percent of teenagers are being raised by both biological parents, among the highest rates in the nation.&#8221;</p>
<p>If you want your son to be marriageable one day, tell him to stay in school now.</p>
<p><em>Reporting by <a href="http://www.cnbc.com/ester-bloom/">Ester Bloom</a></em></p>
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</div>


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Apple just unveiled HomePod, a $349 competitor to Amazon’s Echo

Op-ed: This market indicator has predicted the past 7 US recessions. Here’s what it’s signalling now

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British PM May, opposition leader Corbyn agree to suspend election campaigning

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Economists: Men now need more than just money to be ‘marriageable’

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