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Tag: Goldman Sachs BDC Inc

  • China’s demand for oil and copper is ‘booming,’ says Goldman Sachs

    China’s demand for oil and copper is ‘booming,’ says Goldman Sachs

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    An oil pump at sunset in Daqing, Heilongjiang province, China, on July 13, 2006.

    Lucas Schifres | Getty Images

    China’s demand for many major commodities has been growing at “robust rates,” Goldman Sachs said in a recent note.

    The investment bank observed that China’s demand for copper has risen 8% year on year, while appetite for iron ore and oil are up by 7% and 6%, respectively, all beating Goldman’s full-year expectations.

    “This strength in demand has largely been tied to a combination of strong growth from the green economy, grid and property completions,” the Goldman report observed.

    While China’s embattled property sector is still struggling to recover, the investment bank noted that China’s green economy has shown “significant strength” so far this year, resulting in a demand surge for metals related to the green transition, such as copper.

    Goldman’s economists attributed China’s green copper rush largely to its onshore solar installations, which in 2023 so far have “amounted to the level of all previous years’ installations.”

    Molten copper flowing into molds at a smelting plant in Wuzhou, China.

    He Huawen | Visual China Group | Getty Images

    China’s operating solar capacity has reached 228 GW, more than the rest of the world combined, a June report by the Global Energy Monitor said. And the world’s second-largest economy is on track to double its wind and solar capacity five years ahead of its 2030 goals.

    According to data collated by Goldman Sachs, China’s green copper demand rose 71% in July from a year ago.

    “The most significant strength has come on the renewables side where related copper demand is up 130% y/y year-to-date, led by surging solar related demand,” Goldman wrote in a separate report dated Aug. 25.

    Recovery in China’s manufacturing sector is also boosting demand for base metals like aluminum.

    “The improvement in manufacturing trends so far in Q3 has also coincided with stronger import levels of base metals,” the report stated.

    China’s industrial production grew by 4.5% in August compared to a year ago, beating expectations for 3.9% growth. And within that category, the value added of equipment manufacturing grew 5.4% year on year.

    Goldman predicted demand growth for these metals is set to continue.

    “We see a supportive underpin into next year for onshore aluminum and copper demand, given the current positive drivers are sticky,” the report forecasts.

    China’s oil demand has also been rising on the back of a “rapid recovery” in oil-intensive services sectors such as transportation, although the analysts said a dip could be on the horizon.

    “China’s demand for oil has been supported by record internal mobility, as indicated by robust congestion and domestic flight data,” Goldman observed.

    “In our view, this robust level is sustainable, although we expect growth to decelerate significantly next year.”

    Commodities as a ‘better bet?’

    The surge in commodities comes in spite of a wider, faltering macroeconomic growth story in China.

    “You’re actually seeing commodities responding to the [People’s Bank of China’s] monetary expansion while the Chinese stock market is still trying to find the bottom,” said Grow Investment’s chief economist Hao Hong.

    “So you’re seeing a huge split between the two asset classes,” Hong told CNBC on Tuesday.

    The PBOC recently announced it will continue to boost macro policy adjustments, maintaining stable credit expansion and sufficient liquidity.

    “Traders right now in the Chinese market are seeing commodities as a better bet on sort of a marginal improvement in the Chinese real economy going forward,” he observed.

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  • This major bank’s stock can rally 25% as dealmaking and consumer banking improve, HSBC says

    This major bank’s stock can rally 25% as dealmaking and consumer banking improve, HSBC says

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  • Goldman Sachs is getting back to its core strength so buy the stock, says top analyst

    Goldman Sachs is getting back to its core strength so buy the stock, says top analyst

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  • CNBC Daily Open: Despite Monday’s bounce, stocks are still wobbly

    CNBC Daily Open: Despite Monday’s bounce, stocks are still wobbly

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    A trader works on the floor of the New York Stock Exchange during opening bell in New York City on August 21, 2023. 

    Angela Weiss | AFP | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Markets’ last burst for August
    U.S. stocks started the final week of August on an upbeat note, with all three major indexes closing in the green. All but one sector in the S&P 500 were positive. Asia-Pacific markets followed Wall Street higher Tuesday. Hong Kong’s Hang Seng Index extended gains from yesterday and added around 1.87%. Japan’s Nikkei 225 inched up 0.34% even as the country’s unemployment rate for July was a higher-than-expected 2.7%, compared with the 2.5% consensus.

    Goldman offloads another acquisition
    Goldman Sachs is selling its personal financial management unit to Creative Planning, a wealth management firm. In May 2019, Goldman acquired United Capital Financial Partners for $750 million. CEO David Solomon heralded the deal as a way to reach high net worth clientele (Goldman focuses on ultra high net worth clientele) — but the bank only captured around 1% of that market by February.

    Artificial intelligence, human control
    Artificial intelligence must be “subject to human control,” Microsoft’s president and vice-chairman Brad Smith told CNBC in an exclusive interview. “We need to ensure that we have humans in control,” Smith said. It follows, then, that AI won’t replace jobs, but will serve as a tool to help the humans doing the work, Smith added.

    Monetizing Google Maps data
    Google is planning to license solar and environment data to companies, CNBC has learned. Google has energy data on over 350 million buildings, according to documents CNBC viewed, and sees opportunity to sell the data to companies like Tesla Energy, Aurora Solar and Zillow. The tech giant hopes revenue can hit $100 million in the first year.

    [PRO] ‘Absolutely formidable’ semiconductor firm
    With a market capitalization of $1.15 trillion, Nvidia is the world’s most valuable chipmaker and has been the focus of this year’s AI-fueled frenzy. But there’s a semiconductor company that’s “absolutely formidable” in terms of its dominance in the foundry business, according to an analyst from asset management firm Sanlam Investments UK.

    The bottom line

    “There’s an old adage amongst people who cover consumer markets,” said Michael Zdinak, an economist who leads the U.S. consumer markets service at S&P Global Market Intelligence. “Never bet against the U.S. consumer because we’re always willing to spend money we don’t have.”

    Analysts at Deutsche Bank and Morgan Stanley, however, aren’t so optimistic about the consumer.

    “The consumer is less healthy than it appears,” wrote Morgan Stanley analyst Simeon Gutman. Consumers are spending more on services than goods, according to Gutman, which isn’t good news for consumer retailers. Indeed, the retail sector’s been roiled by volatility the last two weeks amid choppy earnings, said Deutsche Bank analyst Krisztina Katai. And investors should expect more turmoil ahead.

    Maybe that warning comes from an overabundance of caution. After all, retail rallied Monday, along with nine other sectors in the S&P 500 (only utilities dipped by 0.04%). Markets broadly rose: The S&P added 0.63%, the Dow Jones Industrial Average gained 0.62% and the Nasdaq Composite climbed 0.84%.

    Markets are trying to make up for a dismal August — so far, the S&P has shed around 3.4%, the Dow 2.8% and the Nasdaq 4.5% — but that might prove a difficult feat. Monday’s rally was just one data point. Moreover, there are more obstacles ahead.

    “The ‘Wall of Worry’ that had all but disappeared by July is being rebuilt – U.S. 10 year yields above 4%, anxiety rising in China, Europe’s economy slumps, and a more sober tone from some U.S. retailers,” Evercore ISI senior managing director Julian Emanuel wrote in a Sunday note.

    That’s not news investors want to hear heading into September, a historically bad month for stocks. Hence, even if markets manage to claw back some losses by the end of this week, it’d be prudent to brace for another trying month.

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  • An under-the-radar A.I. beneficiary could rally more than 20% from here

    An under-the-radar A.I. beneficiary could rally more than 20% from here

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  • CNBC Daily Open: Tech is back

    CNBC Daily Open: Tech is back

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    Nvidia headquarters in Santa Clara, California, US, on Monday, June 5, 2023.

    Marlena Sloss | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Tech rebound
    U.S. stocks started the week on a positive note, thanks to a     rebound in chipmakers and technology stocks. European markets traded mixed. The regional Stoxx 600 index inched up 0.15%, buoyed by a 4.35% increase in Philips. However, the U.K.’s FTSE 100 slid 0.23% and Spain’s IBEX 35 dipped 0.05%.

    Nvidia, again
    Nvidia shares popped 7% to hit $437.43 after Morgan Stanley released a note reiterating the company’s strengths. “Nvidia remains our Top Pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply demand imbalance that should persist for the next several quarters,” the bank wrote.

    Back to golf, not banking
    Goldman Sachs’ former CEO Lloyd Blankfein can’t imagine returning to his old firm, he told CNBC. Blankfein was disputing a New York Times article that “misquoted” him. “I never used the word ‘return’,” Blankfein said. “I think my days working 100-hour weeks are over.” He then ended the conversation and went back to his golf game.

    The Russian ‘Goldilocks’ for China?
    China’s been one of Russia’s staunchest supporters since Moscow’s unprovoked invasion of Ukraine. But analysts think China wants Russia in a “Goldilocks” situation: Neither so strong that it could challenge Beijing, nor too weak where it leaves China isolated against the West. Other observers, however, argue China’s already risking geopolitical capital to help Russia.

    [PRO] Rate cuts next year?
    Goldman Sachs thinks inflation will fall to a level that the Federal Reserve is comfortable with by the first half of next year. The Fed, in turn, will begin lowering interest rates before the end of June 2024, the bank forecast.

    The bottom line

    Technology stocks and chipmakers helped major U.S. indexes regain their footing after ending last week in the red. The S&P 500 gained 0.58%, the Dow Jones Industrial Average inched up 0.07% and the Nasdaq Composite advanced 1.05%.

    While that’s just a single data point, yesterday’s positive market movement echoes Oppenheimer chief investment strategist John Stoltzfus’ argument that the last two week of losses didn’t signal the end of the bull market. Rather, it was “a pause that refreshes” — a healthy adjustment to “oversold market conditions,” Stoltzfus wrote.

    Still, stocks face pressure from rising bond yields. The two-year U.S. Treasury yield is a hair’s breadth away from 5% while the 10-year yield is 4.2% — pretty healthy returns for a risk-free investment. “Fixed income just looks relatively attractive, especially [relative to] where [we] were just a couple of years ago,” said Kevin Gordon, senior investment strategist at Charles Schwab.

    At the same time, higher yields mean lower prices. That “creates the opportunity to buy bonds at a real rate that we haven’t seen in well over a decade,” Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, told CNBC.

    The tussle between stocks and bonds, however, seems a pretty good problem to have. Recent data show both inflation receding and the U.S. economy expanding more than forecast. Whatever choice investors make, then, it’s made under a backdrop of heathy conditions — something rare since the pandemic.

    Or, as Adam Crisafulli, founder of market intelligence firm Vital Knowledge, put it, “We don’t think investors should dive too far down rabbit holes of despair.”

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  • Why now is the best time to lock in a high APY CD after the Fed’s rate raise

    Why now is the best time to lock in a high APY CD after the Fed’s rate raise

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    The Federal Reserve has raised its benchmark interest rate by 0.25%.

    While we don’t know for sure what moves the Fed will make with interest rates this year, the consensus is the pace of rate increases is expected to slow. Barring something unexpected, the most severe rate hikes are likely in the rearview mirror and the Fed may even begin dropping rates in 2024. This makes now a good time to lock in a fixed rate certificate of deposit (CD) while interest rates are (possibly) peaking.

    Below, CNBC Select goes into more detail about why you should look into that CD, as well as other short-term moves you might want to make in the wake of today’s rate hike.

    3 steps to take now that the Fed has raised rates again

    Today’s interest rates present opportunities and challenges. On the one hand, the cost of borrowing money is increasing. This makes mortgage and auto loans more expensive to take out and increases the cost of variable-rate debt, such as credit cards. The other side is that the annual percentage yield (APY) on savings accounts, CDs and money market accounts is much more generous to savers.

    Here’s what you can do right now to help limit the damage of higher rates or boost your returns.

    Lock in a high rate with a CD

    Your savings account’s interest rate can change at any time as the prevailing rates shift up or down. That means your stellar 5% savings rate may not last, so if you’d prefer to lock in today’s rate for months (or years), you may want to open a CD.

    CDs offer a fixed interest rate for a set period, typically anywhere from three months to five years. CDs offer rates as good or better than what you find with savings accounts, but they aren’t as flexible. If you withdraw the money early, you’ll be hit with penalties. That makes CDs better for money you’ve earmarked for a medium or long-term goal, rather than cash you’d need to quickly access in an emergency.

    Some of the best CD rates are offered by Quontic Bank and Bread Savings™ (formerly Comenity Direct). Bread Savings offers up to 5.35% with no monthly maintenance fees, but there is a $1,500 minimum deposit. Quontic Bank has a smaller $500 minimum deposit with an interest rate of up to 5.30%.

    Bread Savings™ (formerly Comenity Direct) CDs

    Bread Savings™ (formerly Comenity Direct) is a product of Comenity Capital Bank, a Member FDIC.

    • Annual Percentage Yield (APY)

    • Terms

    • Minimum balance

    • Monthly fee

    • Early withdrawal penalty fee

      Early withdrawal penalty applies. For terms shorter than 1 year, the penalty is 90 days simple interest. For terms 12 months to 3 years, the penalty is 180 days simple interest. For terms 4 years and up, the penalty is 365 days simple interest.

    Quontic Bank CDs

    Quontic Bank is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Terms

    • Minimum balance

    • Monthly fee

    • Early withdrawal penalty fee

      Withdrawals before the maturity date are subject to penalties. For time deposits up to 12 months, the penalty will be equal to the interest for the full length of the stated term. For time deposits 12 months to under 24 months, the penalty equals one year interest. For time deposits 24 months and over, the penalty equals two years interest. If the accrued interest exceeds the penalty amount, the excess accrued interest over the penalty amount will be paid to you. If the accrued interest is less than the penalty amount, a reduction of the principal balance may result.

    Maximize your savings account’s interest rate

    Right now, the best high-yield savings accounts have interest rates of around 5%. This means if your savings account earns anywhere near the national average (under 0.50%), you can give your savings a massive boost by opening an account with a higher rate of return.

    Currently, the Western Alliance Bank savings account has an APY of 5.15% with no monthly fee and no overdraft fee. This account has a $1 minimum deposit, and the rate isn’t capped, so you’ll earn this APY on any deposit amount.

    Western Alliance Bank Savings Account

    Western Alliance Bank is a Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      Up to 6 transactions each month

    • Excessive transactions fee

      The bank may charge fees for non-sufficient funds

    • Overdraft fee

    • Offer checking account?

    • Offer ATM card?

    Bask Interest Savings Account

    Bask Bank and BankDirect are divisions of Texas Capital Bank, Member FDIC.

    • Annual Percentage Yield (APY)

    • Minimum balance

    • Monthly fee

    • Maximum transactions

      Up to 6 free withdrawals or transfers per statement cycle

    • Excessive transactions fee

    • Overdraft fee

    • Offer checking account?

    • Offer ATM card?

    Pay down variable-rate debt

    If you plan on taking on debt to pay for school, a home or anything else, rising rates can quickly eat away at your buying power. And any debt with a variable interest rate will also become more expensive to service.

    Prioritizing high-interest debt makes sense in today’s high-rate environment. With the average credit card interest rates currently above 20%, paying off your card balance could save you much more than what you would earn by setting aside an equal amount of money in a high-interest account.

    Depending on your situation, it may even make sense to take advantage of a 0% APR credit card. These cards offer no interest for a set timeframe, usually anywhere from six to 21 months. Just pay attention to which purchases qualify for the introductory APR and any balance transfer fees.

    Subscribe to the CNBC Select Newsletter!

    Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.

    Bottom line

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • Goldman Sachs expects ‘all time high’ oil demand to spur large deficits, boosting prices

    Goldman Sachs expects ‘all time high’ oil demand to spur large deficits, boosting prices

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    Oil storage tanks stand at the RN-Tuapsinsky refinery, operated by Rosneft Oil Co., at night in Tuapse, Russia.

    Andrey Rudakov | Bloomberg | Getty Images

    Goldman Sachs expects record demand in oil markets to drive crude prices higher in the near term.

    “We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman’s head of oil research Daan Struyven told CNBC’s “Squawk Box Asia” on Monday.

    He added that the bank forecasts Brent crude to rise from just above $80 per barrel now to $86 per barrel by year-end.

    Global benchmark Brent futures traded 0.39% lower at $80.75 a barrel, while U.S. West Texas Intermediate futures stood 0.42% at $76.75 per barrel.

    ‘Elevated demand uncertainty’

    While Struyven acknowledged that U.S. crude oil production has risen significantly over the past year to 12.7 million barrels per day, he said that pace of growth will slow throughout the rest of 2023.

    “We expect U.S. crude supply growth to slow down pretty significantly to a sequential pace of just 200 barrels per day from here,” he said, pointing to the decline in rig counts. That metric, which tallies the number of active oil rigs, is used as an indicator of drilling activity and future output.

    The U.S. oil rig count recently hit its lowest level in 16 months, down 15% from its late 2022 peak, a recent Goldman report observed, citing data from Baker Hughes and Haver.

    Last week, Baker Hughes reported U.S. oil rigs fell by 7 to 530 the lowest since March 2022.

    Struyven suggested that the lack of an agreement following the G20 energy ministers’ meeting indicates “very substantial” uncertainty about long-run oil demand.

    The Group of 20 energy ministers met in India over the weekend, but left without reaching a consensus on the phasing down of fossil fuels, complicating the transition toward clean energy.

    “Key point here for investors is, with the uncertainty about oil demand being so elevated, investors may require a premium to compensate for the for the elevated risk from such elevated demand uncertainty,” Struyven said.

    The International Energy Agency in June had predicted that global oil demand is on track to rise by 2.4 million barrels per day in 2023, outpacing the previous year’s 2.3 million barrel per day increase. 

    Over the weekend, secretary general of the International Energy Forum Joseph McMonigle had forecast that both India and China will make up 2 million barrels a day of demand pick-up in the second half of 2023.

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  • These 5 stocks are on Goldman’s ‘conviction buy’ list — and it gives one more than 50% upside

    These 5 stocks are on Goldman’s ‘conviction buy’ list — and it gives one more than 50% upside

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  • These companies reporting next week have a history of beating earnings estimates

    These companies reporting next week have a history of beating earnings estimates

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  • Goldman Sachs says A.I. will ‘super-charge’ music creation and names 5 stocks to buy

    Goldman Sachs says A.I. will ‘super-charge’ music creation and names 5 stocks to buy

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    Blend Images – Pbnj Productions | Tetra Images | Getty Images

    The music industry is set for a radical shift due in part to generative AI, according to Goldman Sachs, which described the new technology as providing “significant opportunities” for the sector.

    It named five buy-rated stocks to play the trend: Live Nation, Warner Music Group, French digital music company Believe, China’s NetEase, and Universal Music Group. All of the stocks are on its conviction list of top stocks.

    “Generative AI will super-charge music creation capabilities and improve productivity,” according to Goldman’s analysts in a June 28 note. And investors’ concerns over AI-generated music, such as a track reportedly created using the technology and featuring a “fake Drake” in April, are “overstated,” they suggested.

    Companies such as Deezer and Believe are using AI to detect when a music track has been created by AI, the analysts noted, while publishers are working with streaming sites like Spotify to take artificially generated tracks down.

    The music industry is well set up to protect its intellectual property given that it is dominated by three large companies that own the majority of artists’ catalogs, according to Goldman.

    “We believe the music industry is on the cusp of another major structural change given the persistent under-monetisation of music content, outdated streaming royalty payout structures and the deployment of Generative AI,” the analysts added.

    Streaming means it’s easier than ever for people to access music, but revenue has not matched consumption, the analysts noted. “For example, we estimate that the revenue per audio stream has fallen 20% in the past 5 years and that the revenue per hour streamed of music for Spotify is 4x lower than for Netflix,” the bank stated.

    Goldman likes events promoter Live Nation as it expects artists to tour more frequently due to what it calls the globalization of music. It added that younger generations becoming more aware of performers via social media will also boost the industry.

    On Believe, the bank said: “We expect the company to continue gaining market share with its digital-first approach, particularly in the fast-growing emerging markets across Asia.”

    WMG, meanwhile, is “one of the highest quality long-term growth compounders in our coverage group,” according to the analysts, while its competitor, UMG is on its conviction list for Europe, which comprises.

    “We believe UMG possesses several competitive advantages, including its scale, clear and consistent track record in breaking artists, the depth and breadth of its catalogue, and its ability to spot new trends early, under the stewardship of an experienced management team,” the analysts stated.

    Goldman chose Chinese internet company NetEase, which has a music streaming platform, for its use of AI in its music composition tools.

    — CNBC’s Michael Bloom contributed to this report.

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  • Goldman in talks to offload Apple credit card, savings products to American Express, source says

    Goldman in talks to offload Apple credit card, savings products to American Express, source says

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    Goldman Sachs is in talks to offload its Apple credit card and high-yield savings account products to American Express, a source told CNBC’s Leslie Picker.

    Goldman Sachs, Apple and American Express declined to comment.

    The talks come amid a broader retreat by Goldman from its largely failed consumer banking initiatives, for which CEO David Solomon has taken a great deal of heat. Last week, CNBC reported that the Wall Street giant is preparing to take a huge writedown on its 2021 acquisition of fintech lender GreenSky.

    The Wall Street Journal first reported the Goldman talks with American Express. The newspaper said there’s no assurance of a deal, nor is an agreement close.

    It would mark an abrupt reversal for the two corporate giants. In October, the Journal reported Goldman and Apple renewed their partnership through 2029. And in April, Goldman Chief Financial Officer Denis Coleman touted a deepening of the partnership.

    “This week, we announced the launch of a savings account for Apple Card users. We are excited to deepen our partnership with Apple through this additional offering and to introduce another source of deposit funding for the firm,” Coleman said at the time.

    The Journal also reported Friday that Goldman is talking about unloading its General Motors card partnership. GM declined to comment to CNBC.

    – CNBC’s Steve Kovach, Phil LeBeau and Hugh Son contributed to this report.

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  • Goldman Sachs faces big writedown on CEO David Solomon’s ill-fated GreenSky deal

    Goldman Sachs faces big writedown on CEO David Solomon’s ill-fated GreenSky deal

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    Goldman Sachs CEO David Solomon speaks during the 2023 Forbes Iconoclast Summit at Pier 60 on June 12, 2023 in New York City. 

    Taylor Hill | Getty Images

    Goldman Sachs is likely to take a large writedown for its 2021 acquisition of fintech lender GreenSky after seeking to unload the business, CNBC has learned.

    Bids for the installment-loan business are coming in well below what Goldman had hoped for, according to people with knowledge of the sale process.

    Under CEO David Solomon, Goldman bought Atlanta-based GreenSky for $2.24 billion to help accelerate its push into consumer finance. But just 18 months after the bank’s September 2021 release announcing the deal, Solomon said he was selling the business after mounting losses and dysfunction in Goldman’s consumer division forced a strategic shift.

    KKR, Apollo Global Management, Sixth Street Partners, Warburg Pincus and Synchrony Bank were among the asset managers and lenders involved in the first round of bids, which began early June, according to the people, who declined to be identified speaking about the sale. The companies declined to comment.

    “Everybody’s been coming in low, and the Goldman team keeps pushing back, pounding the table about the value of it,” said one of the bidders.

    The bank is continuing negotiations with a smaller group of bidders this week with the hope of ratcheting up the ultimate price, according to the sources.

    Dual-track process

    Goldman has been pursuing offers for GreenSky’s loan origination business and its book of existing loans separately as well as offers for a single deal, according to the people familiar.

    One bidder said the origination platform is worth roughly $300 million, while another said it was worth closer to $500 million.

    If a deal closed at anywhere near that valuation, it would represent a steep discount to what Goldman paid for it, forcing the company to disclose a writedown hitting its bottom line in an upcoming quarter.

    While the all-stock acquisition was announced with a $2.24 billion valuation, it was worth closer to $1.7 billion by the time the transaction closed six months later, according to a person with knowledge of the matter.

    Goldman President John Waldron acknowledged the potential for “some noise” to the bank’s results as a result of the GreenSky sale. The transaction could wipe out $500 million in goodwill tied to buying the lender, and the sale of loans could trigger other one-time accounting hits, he told analysts at a June 1 conference.

    The turbulence marks the latest fallout from Solomon’s decision to exit most of the bank’s consumer efforts after pushing hard for his vision to transform Goldman into a fintech disruptor.

    “We’re pleased with the participation by bidders,” Goldman spokesman Tony Fratto said in a statement. “We’re in the middle of the process and we’ll learn more as we go forward.”

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  • China opens a new era of ‘proactive easing’ as the economic recovery turns sour

    China opens a new era of ‘proactive easing’ as the economic recovery turns sour

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    SHANGHAI, CHINA – NOVEMBER 04, 2022: Buildings at Lujiazui Financial District are illuminated to celebrate the opening ceremony of the 5th China International Import Expo (CIIE) on November 4, 2022 in Shanghai, China.

    Vcg | Visual China Group | Getty Images

    A central bank move in Beijing this week is being seen by economists as a starting gun on a new era of monetary policy as China’s Covid-19 reopening fails to gather pace.

    On Tuesday, the People’s Bank of China cut its seven-day reverse repurchase rate from 2% to 1.9% — the such first cut in nine months — as the economy loses momentum and hard data starts to disappoint. Top China economists at Wall Street banks viewed the move as the start of much more easing to come.

    “This is the first cut since August 2022, and confirms further that policymakers have switched to proactive easing from wait-and-see,” Citi economists, led by Xiangrong Yu, said in a Tuesday research note shortly after the PBOC’s announcement.

    “Our thesis of timely easing is playing out, and more measures of small steps that don’t have a high threshold could follow in coming weeks,” they said, adding that the upcoming July Politburo meeting in Beijing would be closely watched for more significant measures to follow.

    China’s sovereign bonds rose in price following the latest move by the central bank while the Chinese yuan dipped to its weakest levels since November.

    Stock Chart IconStock chart icon

    Pointing to soft economic figures from China, including credit data, Citi economists said “stimulus seems to be underway with the weak readings.”

    China’s new bank loans for the month of May rose by 11.4% to 1.36 trillion yuan ($190 billion), missing estimates from a Reuters poll and strengthening the case for further stimulus, as the economy continues to see tumbling industrial profits on soft demand and falling exports.

    Barclays economists, writing in a Tuesday note titled “Entering a rate cut cycle,” predict China will deliver a cut for every quarter until early 2024. The bank predicts a 10 basis-point cut in the medium-term lending facility rate on Thursday, as well as a cut to its loan prime rate next week (two monetary levers the PBOC uses).

    “In the next nine months, based on our economic analysis and reasoning, we now expect the central bank to continue its monetary easing cycle with additional 30bp [basis point] policy rate cuts in total, 50bp RRR cuts and 60-80bp mortgage rate cuts for both new and existing home loans,” Barclays economists led by Jian Chang said in a note.

    Read more about China from CNBC Pro

    Goldman Sachs economists including Hui Shan said the firm expects the central bank to cut its medium-term lending facility rate on Thursday and its loan prime rate by 10 basis points next week. China’s central bank controls the benchmark one-year lending and deposit rates, which affect the borrowing costs for banks, businesses and individuals across the country.

    Noting that the PBOC has never never cut policy rates and the reserve requirement ratio in the same month before, Goldman Sachs economists expect a full RRR cut to be delivered in the third quarter of this year. The reserve requirement ratio refers to the amount of money that banks must hold in their coffers as a proportion of their total deposits.

    Goldman Sachs also expects the PBOC to deliver another 25 basis point RRR cut in the third quarter of this year, their economists said, adding that the firm expects another cut in the final quarter as well.

    “Sluggish activity growth, potentially weak credit extensions, and low confidence are the reasons behind this cut, in our view,” they said.

    Is it enough?

    Mizuho Bank’s Head of Economics and Strategy for Asia Vishnu Varathan argued that the latest actions from China’s central bank “does not cut it.”

    “Markets were justifiably unimpressed as credit data details suggest a worrying private sector confidence deficit that is likely to diminish run-of-the-mill stimulus efforts,” he said.

    He predicted a more significant plan would be necessary — at the risk of overshooting and harming stability in the economy.

    China's weak economic data should be a 'wake-up call' for more stimulus, KraneShares says

    “Save for a more comprehensive stimulus plan that may necessarily imperil financial stability, it looks like PBOC rate cuts may just not cut it,” Varathan said.

    Societe Generale economists also said, “much more easing is needed, particularly fiscal backed by central gov funding.”

    “However, the drip mode of easing – preferred by Chinese policymakers – may not be well suited to containing the mounting deleveraging pressure within the economy,” SocGen economists said.

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  • CNBC Daily Open: Tech is loving the possible rate pause

    CNBC Daily Open: Tech is loving the possible rate pause

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    Tim Cook, chief executive officer of Apple Inc., beside an Apple Vision Pro mixed reality (XR) headset during the Apple Worldwide Developers Conference at Apple Park campus in Cupertino, California, US, on Monday, June 5, 2023.

    Philip Pacheco | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    • China’s economy and stocks aren’t doing as hot as Japan’s. The Shanghai Composite fell around 0.1% and the yuan hit a 6-month low as the People’s Bank of China cut a short-term borrowing rate in an attempt to boost liquidity. Analysts think it’s a signal that the central bank will cut its medium-term and loan prime rate in the weeks ahead.
    • Goldman Sachs CEO David Solomon told CNBC that commercial real estate’s in such a bad shape that his bank will write down bad loans and drop valuations in its real estate investments. Still, Solomon said he’s “surprised” by the resilience of the U.S. economy.
    • JPMorgan Chase’s prepared to pay $290 million to settle a lawsuit brought against it by a victim of late sexual predator Jeffrey Epstein, a source told CNBC. However, the bank’s litigation with the U.S. Virgin Islands and its claims against Jes Staley, a former executive who was friends with Epstein, are still pending.

    The bottom line

    Hopes for a pause in interest rates helped to send stocks higher Monday. The technology sector, which is more sensitive to rate fluctuations, especially benefitted. (Higher rates today lower the value of tech’s growth tomorrow.)

    Traders are betting there’s a 72% chance the Federal Reserve will keep rates unchanged at this week’s meeting, according to the CME Group’s FedWatch tool. That’s because economists think the consumer price index, coming out later today, will show May’s inflation slowing to just 0.1% from the previous month, or 4% year over year. That’s a “headline number [that] is going to feel good,” said Mark Zandi, chief economist at Moody’s Analytics.

    Big Tech stocks mostly rose at least 1%; Apple even hit an all-time high of $183.79 per share. Meanwhile, Oracle’s better-than-expected earnings report pushed its shares 3% higher in extended trading.

    The Nasdaq popped 1.53% to reach its highest level since April. The S&P 500 added 0.93%, further adding to the gains it’s accumulated over the past few days, and the Dow Jones Industrial Average climbed 0.56%.

    Despite those big moves, it was a relatively light trading day. On an average day, 80.6 million shares of the SPDR S&P 500 ETF Trust, a tracker of the broad S&P 500 index, are traded. Yesterday, only 31.5 million exchanged hands. That’s probably wise, considering inflation data coming out tomorrow and the Fed meeting happening right after that. Tech greatly benefits from lower interest rates, but remember that the converse applies too.

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  • CNBC Daily Open: Everyone’s expecting inflation to slow down

    CNBC Daily Open: Everyone’s expecting inflation to slow down

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    The Nasdaq MarketSite in New York, US, on Friday, June 9, 2023. T

    Michael Nagle | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    • Goldman Sachs CEO David Solomon told CNBC his bank will write down bad loans and dropping valuations in Goldman’s commercial real estate holdings. That’ll have a negative impact on the bank’s earnings report in the current quarter.

    The bottom line

    Hopes for a pause in interest rates helped to send stocks higher Monday. The technology sector, which is more sensitive to rate fluctuations, especially benefitted. (Higher rates today lower the value of tech’s growth tomorrow.)

    Traders are betting there’s a 72% chance the Federal Reserve will keep rates unchanged at this week’s meeting, according to the CME Group’s FedWatch tool. That’s because economists think the consumer price index, coming out later today, will show May’s inflation slowing to just 0.1% from the previous month, or 4% year over year. That’s a “headline number [that] is going to feel good,” said Mark Zandi, chief economist at Moody’s Analytics.

    Big Tech stocks mostly rose at least 1%; Apple even hit an all-time high of $183.79 per share. Meanwhile, Oracle’s better-than-expected earnings report pushed its shares 3% higher in extended trading.

    The Nasdaq popped 1.53% to reach its highest level since April. The S&P 500 added 0.93%, further adding to the gains it’s accumulated over the past few days, and the Dow Jones Industrial Average climbed 0.56%.

    Despite those big moves, it was a relatively light trading day. On an average day, 80.6 million shares of the SPDR S&P 500 ETF Trust, a tracker of the broad S&P 500 index, are traded. Yesterday, only 31.5 million exchanged hands. That’s probably wise, considering inflation data coming out tomorrow and the Fed meeting happening right after that. Tech greatly benefits from lower interest rates, but remember that the converse applies too.

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  • Goldman Sachs slashes oil price forecast by nearly 10% as Russian supply recovers

    Goldman Sachs slashes oil price forecast by nearly 10% as Russian supply recovers

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    The Johan Sverdrup oil field in the North Sea

    Carina Johansen | AFP | Getty Images

    Goldman Sachs analysts slashed their oil price forecast by almost 10% on the back of whey they see as increasing supply and slower demand for crude.

    According to a report released late Sunday, the investment bank lowered its Brent outlook for December to $86 a barrel, down from $95 a barrel. In the same report, Goldman also revised down its WTI forecast for December from $89 per barrel to $81.

    The revised projection marks Goldman’s third downward revision in six months, and comes in spite of last week’s announcement that OPEC kingpin Saudi Arabia is cutting production by another million barrels per day, effective July. Overall, the oil cartel made no changes to its planned oil production cuts for the rest of the year.

    “Significant supply beats from Iran and Russia have driven speculative positioning to near record-lows,” Goldman analysts led by the bank’s Global Head of Commodities Research Jeffrey Currie said in the research report.

    Russia’s oil production has remained resilient even in the face of Western sanctions, with Deputy Energy Minister Pavel Sorokin in April ascertaining that Moscow’s oil production will remain stable until 2025, according to the Neftegazovaya Vertikal magazine.

    “After an initial sharp 1.5 million barrels per day drop, Russian supply has nearly fully recovered despite the decision by many companies to stop buying Russian barrels,” Goldman’s economists said.

    The bank made upward revisions for oil supply forecasts coming from nations facing sanctions, with “2024 upgrades for Russia, Iran, and Venezuela of 0.4/0.35/0.05 mb/d, respectively.”

    While reports of an interim nuclear deal between the U.S. and Iran have been described as false, market watchers have previously estimated that a successful agreement could see at least an additional million barrels a day in crude exports.

    “Hope of a U.S.-Iran deal within grasp is one thing. But guarantee of a quick and unencumbered passage of such a complex, layered deal is quite another,” Mizuho’s Vishnu Varathan said in a daily research note.

    Goldman is of the view that the additional cuts implemented by Saudi Arabia are unlikely to result in a price spike, even as the kingdom’s output will see a decline to 9 million barrels per day from around 10 million barrels in May.

    “The extra Saudi cut and our expectation that OPEC+ will extend half of its April voluntary cut in 2024 will likely only partly offset these bearish shocks,” the report continued.

    International benchmark Brent crude futures traded at $73.99 a barrel, down 1.07%, on Monday morning, while U.S. West Texas Intermediate futures stood at $69.43, dipping 1.05%.

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  • CNBC Select’s best personal loans of 2023

    CNBC Select’s best personal loans of 2023

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    Editor’s Note: APRs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. Select will update as changes are made public.

    Personal loans are a form of installment credit that must be paid back in regular increments over a set period of time. Many people use personal loans as an affordable alternative to credit cards because they often have lower interest rates and consumers can use them to cover a wide range of expenses. These loans typically range from $1,000 to $50,000, but you may be able to borrow smaller or larger amounts of money with some lenders.

    CNBC Select evaluated dozens of lenders to round up the best personal loans of 2023. We looked at key factors like interest rates, fees, loan amounts and term lengths offered, plus other features including how your funds are distributed, autopay discounts, customer service and how fast you can get your funds. (Read more about our methodology below.)

    The best personal loans of 2023

    • Best overall: LightStream Personal Loans
    • Best for debt consolidation: Happy Money
    • Best for refinancing high-interest debt: SoFi Personal Loans
    • Best for smaller loans: PenFed Personal Loans
    • Best for next-day funding: Discover Personal Loans
    • Best for a lower credit score: Upstart

    Best overall

    LightStream Personal Loans

    • Annual Percentage Rate (APR)

      7.49%—24.49%* with AutoPay

    • Loan purpose

      Debt consolidation, home improvement, auto financing, medical expenses, and others

    • Loan amounts

    • Terms

      24 to 144 months* dependent on loan purpose

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • Same-day funding available through ACH or wire transfer (conditions apply)
    • Loan amounts up to $100,000
    • No origination fees, no early payoff fees, no late fees
    • LightStream plants a tree for every loan

    Cons

    • Requires several years of credit history
    • No option to pay your creditors directly
    • Not available for student loans or business loans
    • No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)

    Who’s this for? LightStream, the online lending arm of SunTrust Bank, offers low-interest loans with flexible terms for people with good credit or higher. LightStream is known for providing loans for nearly every purpose except for higher education and small business. You could get a LightStream personal loan to buy a new car, remodel the bathroom, consolidate debt, or cover medical expenses, according to the company’s website. 

    You can receive your funds on the same day, if you apply on a banking business day, your application is approved and you electronically sign your loan agreement and verify your direct deposit banking account information by 2:30 p.m. ET.

    LightStream offers the lowest APRs of any lender on this list, including a discount when you sign up for autopay. Interest rates vary by loan purpose, and you can view all ranges on LightStream’s website before you apply. This is subject to change as the Fed rates fluctuate.

    If you select the invoicing option for repayment, your APR will be 0.50% higher than if you sign up for autopay. The APR is fixed, which means your monthly payment will stay the same for the lifetime of the loan. Terms range from 24 to 144 months, dependent on loan purpose — the longest-term option among the loans on our best-of list.

    LightStream does not charge any origination fees, administration fees or early payoff fees.

    Best for debt consolidation

    Happy Money

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation/refinancing

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

      0% to 5% (based on credit score and application)

    • Early payoff penalty

    • Late fee

      5% of monthly payment amount or $15, whichever is greater (with 15-day grace period)

    Pros

    • Peer-to-peer lending platform makes it easy to check multiple offers
    • Loan approval comes with Happy Money membership and customer support
    • No early payoff fees
    • No late fees
    • Fast and easy application
    • U.S.-based customer service

    Cons

    • Higher loan minimums ($5,000)
    • Must submit soft inquiry to see origination fees and other details

    How Payoff is designed to help you stay motivated:

    • Offers borrowers a dedicated “Empowerment Science” team that is available to take questions and provide encouragement
    • Free personality tests, stress assessments and cash flow trackers to help borrowers understand their money management style and nail down better habits
    • Free FICO tools help members track their progress*

    *Based on a study of Happy Money Members between February 2020 to August 2020, members who use a Happy Money Loan to eliminate at least $5,000 of credit card balances reportedly see an average FICO Score boost of 40 points. (Results may vary and are not guaranteed.)

    Who’s this for?  A Happy Money personal loan is a good choice if you’re looking to consolidate your credit card debt and pay it down over time at a lower interest rate.

    Happy Money’s mission is to help consumers get out of credit card debt once and for all, which is why its loans are geared specifically toward debt consolidation. You can’t use a Happy Money loan for home renovations, major purchases, education, etc.

    Borrowers can take out loan amounts between $5,000 and $40,000, and the loan terms range from 24 to 60 months. There’s a soft inquiry tool on its website, which allows you to look at possible loan options based on your credit report without impacting your credit score.

    Happy Money doesn’t charge late payment fees, or early payoff penalties if you decide to pay off your debt faster than you initially intended, but there is an origination fee of up to 5% based on your credit score and application. The higher your score, the lower your origination fee and interest rates are likely to be.

    Unlike some lenders, Happy Money allows you to deposit the money you borrow into your linked bank account or send it directly to your creditors. Another perk you get from taking out a Happy Money loan is access to various financial literacy tools, such as free FICO score updates, a team that performs quarterly check-ins with you during your first year of working with Happy Money and tools to help members improve their relationship with money through personality, stress and cash flow assessments.

    Best for refinancing high-interest debt

    SoFi Personal Loans

    • Annual Percentage Rate (APR)

      8.99% to 25.81% when you sign up for autopay

    • Loan purpose

      Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • No origination fees required, no early payoff fees, no late fees
    • Unemployment protection if you lose your job
    • DACA recipients can apply with a creditworthy co-borrower who is a U.S. citizen/permanent resident by calling 877-936-2269
    • Can have more than one SoFi loan at a time (state-permitting) 
    • May accept offer of employment (to start within the next 90 days) as proof of income
    • Co-applicants may apply

    Cons

    • Applicants who are U.S. visa holders must have more than two years remaining on visa to be eligible
    • No co-signers allowed (co-applicants only)

    Who’s this for? SoFi got its start refinancing student loans, but the company has since expanded to offer personal loans up to $100,000 depending on creditworthiness, making it an ideal lender for when you need to refinance high-interest credit card debt.

    If you have high-interest debt on one or more card, and you want to save money by refinancing to a lower APR, SoFi offers a simple sign-up and application process, plus a user-friendly app to manage your payments.

    Another unique aspect of SoFi lending is that you can choose between a variable or fixed APR, whereas most other personal loans come with a fixed interest rate. Variable rates can go up and down over the lifetime of your loan, which means you could potentially save if the APR goes down (but it’s important to remember that the APR can also go up). However, fixed rates guarantee you’ll have the same monthly payment for the duration of the loan’s term, which makes it easier to budget for repayment.

    By setting up automatic electronic payments, you can earn a 0.25% discount on your APR. You can also set up online bill pay to SoFi through your bank, or you can send in a paper check.

    Once you apply for and get approved for a SoFi personal loan, your funds should generally be available within a few days of signing your agreement. You can both apply for and manage your loan on SoFi’s mobile app.

    While taking on a sizable loan can be nerve-wracking, SoFi offers some help if you lose your job: You can temporarily pause your monthly bill (with the option to make interest-only payments) while you look for new employment. You may still incur interest, but your payment history will remain unharmed. You can read more about SoFi’s Unemployment Protection program in its FAQs.

    Best for smaller loans

    PenFed Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, home improvement, medical expenses, auto financing and more

    • Loan amounts

    • Terms

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • Credit union membership available to anyone
    • Loans as low as $600
    • Can pick up a physical at a branch
    • May apply with a co-borrower

    Cons

    • Funds come as a physical check
    • Must be a member to get funds (no membership needed to apply)
    • Must pay for expedited shipping to get your funds next day
    • Maximum loan amount of $50,000
    • Late fee of $29

    Who’s this for? PenFed is a federal credit union that offers membership to the general public and provides a number of personal loan options for debt consolidation, home improvement, medical expenses, auto financing and more.

    While most lenders have a $1,000 minimum for loans, you can get a $600 loan from PenFed with terms ranging from one to five years. You don’t need to be a member to apply, but you will need to sign up for a PenFed membership and keep $5 in a qualifying savings account to receive your funds.

    While PenFed loans are a good option for smaller amounts, one drawback is that funds come in the form of a paper check. If there is a PenFed location near you, you can pick up your check directly from the bank. However, if you don’t live close to a branch, you have to pay for expedited shipping to get your check the next day.

    Unlike some lenders, PenFed doesn’t offer a discount for autopay.

    Best for next-day funding 

    Discover Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, home improvement, wedding or vacation

    • Loan amounts

    • Terms

      36, 48, 60, 72 and 84 months

    • Credit needed

    • Origination fee

    • Early payoff penalty

    • Late fee

    Pros

    • No origination fees, no early payoff fees
    • Same-day decision (in most cases)
    • Option to pay creditors directly
    • 7 different payment options from mailing a check to pay by phone or app

    Cons

    • Late fee of $39
    • No autopay discount
    • No cosigners or joint applications

    Who’s this for? Discover Personal Loans can be used for consolidating debt, home improvement, weddings and vacations. You can receive your money as early as the next business day provided that your application was submitted without any errors (and the loan was funded on a weekday). Otherwise, your funds will take no later than a week. 

    While there are no origination fees, Discover does charge a late fee of $39 if you fail to repay your loan on time each month. There’s no penalty for paying your loan off early or making extra payments in the same month to cut down on the interest. 

    If you’re getting a debt consolidation loan, Discover can pay your creditors directly. Once you’re approved for and accept your personal loan, you can link the credit card accounts so Discover will send the money directly. You just need to provide information such as account numbers, the amount you’d like paid and payment address information.

    Any money remaining after paying your creditors can be deposited directly into your preferred bank account.

    Best for a lower credit score

    Upstart Personal Loans

    • Annual Percentage Rate (APR)

    • Loan purpose

      Debt consolidation, credit card refinancing, home improvement, wedding, moving or medical

    • Loan amounts

    • Terms

    • Credit needed

      Credit score of 300 on at least one credit report (but will accept applicants whose credit history is so insufficient they don’t have a credit score)

    • Origination fee

      0% to 10% of the target amount

    • Early payoff penalty

    • Late fee

      The greater of 5% of last amount due or $15, whichever is greater

    Pros

    • Open to borrowers with fair credit (minimum 300 score)
    • Will accept applicants who have insufficient credit history and don’t have a credit score
    • No early payoff fees
    • 99% of personal loan funds are sent the next business day after completing required paperwork before 5 p.m. Monday through Friday

    Cons

    • High late fees
    • Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before it’s delivered to you)
    • $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
    • Must have a Social Security number

    Who’s this for? Upstart is ideal for individuals with a low credit score or even no credit history. It is one of the few companies that look at factors beyond your credit score when determining eligibility. It also allows you to apply with a co-applicant, so if you don’t have sufficient credit, you still have the opportunity to receive a lower interest rate.

    Upstart considers factors like education, employment, credit history and work experience. If you want to find out your APR before you apply, Upstart will perform a soft credit check. Once you apply for the loan, the company will perform a hard credit inquiry which will temporarily ding your credit score.

    You can choose a three-year or five-year loan and borrow anywhere from $1,000 to $50,000. Plus, Upstart has fast service — you’ll get your money the next business day if you accept the loan before 5 p.m. EST Monday through Friday. 

    One other major draw for Upstart is that this lender doesn’t charge any prepayment penalties. However, if you’re more than 10 days late on a payment, you’ll owe 5% of the unpaid amount or $15, whichever is greater. You’ll also have to pay an origination fee of up to 12% of the loan amount.

    Get matched with personal loan offers

    FAQs

    How do personal loans work?

    Personal loans are a form of installment credit that can be a more affordable way to finance the big expenses in your life. You can use a personal loan to fund a number of expenses, from debt consolidation to home renovations, weddings, travel and medical expenses.

    Before taking out a loan, make sure you have a plan for how you will use it and pay it off. Ask yourself how much you need, how many months you need to repay it comfortably and how you plan to budget for the new monthly expense. (Learn more about what to consider when taking out a loan.)

    Most loan terms range anywhere from six months to seven years. The longer the term, the lower your monthly payments will be, but they usually also have higher interest rates, so it’s best to elect for the shortest term you can afford. When deciding on a loan term, consider how much you will end up paying in interest overall.

    Once you’re approved for a personal loan, the cash is usually delivered directly to your checking account. However, if you opt for a debt consolidation loan, you can sometimes have your lender pay your credit card accounts directly. Any extra cash left over will be deposited into your bank account.

    Your monthly loan bill will include your installment payment plus interest charges. If you think you may want to pay off the loan earlier than planned, be sure to check if the lender charges an early payoff or prepayment penalty. Sometimes lenders charge a fee if you make extra payments to pay your debt down quicker, since they are losing out on that prospective interest. The fee could be a flat rate, a percentage of your loan amount or the rest of the interest you would have owed them. None of the lenders on our list have early payoff penalties.

    Once you receive the money from your loan, you have to pay back the lender in monthly installments, usually starting within 30 days.

    When your personal loan is paid off, the credit line is closed and you can no longer access it.

    See if you’re pre-approved for a personal loan offer.

    What is a good interest rate on a personal loan?

    Most personal loans come with fixed-rate APRs, so your monthly payment stays the same for the loan’s lifetime. In a few cases, you can take out a variable-rate personal loan. If you go that route, make sure you’re comfortable with your monthly payments changing if rates go up or down.

    Personal loan APRs average slightly above 10%, while the average credit card interest rate is nearly 20%. Given that the average rate of return in the stock market tends to be around 10% when adjusted for inflation, the best personal loan interest rates would be below 10%. That way, you know that you could still earn more than you’re paying in interest.

    However, it’s not always easy to qualify for personal loans with interest rates lower than 10% APR. Your interest rate will be decided based on your credit score, credit history and income, as well as other factors like the loan’s size and term.

    How much do personal loans cost?

    Some lenders charge origination, or sign-up, fees, but none of the loans on this list do. All personal loans charge interest, which you pay over the lifetime of the loan. The lenders on our list do not charge borrowers for paying off loans early, so you can save money on interest by making bigger payments and paying your loan off faster.

    How is my personal loan rate decided?

    As you shop for a low-interest loan or credit card, remember that banks are looking for reliable borrowers who make timely payments. Financial institutions will look at your credit score, income, payment history and, in some cases, cash reserves when deciding what APR to give you.

    To get approved for any kind of credit product (credit card, loan, mortgage, etc.), you’ll first submit an application and agree to let the lender pull your credit report. This helps lenders understand how much debt you owe, what your current monthly payments are and how much additional debt you have the capacity to take on.

    Once you submit your application, you may be approved for a variety of loan options. Each will have a different length of time to pay the loan back (your term) and a different interest rate. Your interest rate will be decided based on your credit score, credit history and income, as well as other factors like the loan’s size and term. Generally, loans with longer terms have higher interest rates than loans you bay back over a shorter period of time.

    CNBC Select now has a widget where you can put in your personal information and get matched with personal loan offers without damaging your credit score.

    Don’t miss: The best personal loans if you have bad credit but still need access to cash

    What is a loan term?

    The loan’s term is the length of time you have to pay off the loan. Terms are usually between six months and seven years. Typically, the longer the term, the smaller the monthly payments and the higher the interest rates. 

    How big of a personal can I get?

    Lenders offer a wide range of loan sizes, from $500 to $100,000. Before you apply, consider how much you can afford to make as a monthly payment, as you’ll have to pay back the full amount of the loan, plus interest.

    Common personal loan definitions you should know

    Here are some common personal loan terms you need to know before applying.

    • Co-applicants or joint applications: A co-applicant is a broad term for another person who helps you qualify by attaching their name (and financial details) to your application. A co-applicant can be a co-signer or a co-borrower. Having a co-applicant can be helpful when your credit score isn’t so great, or if you’re a young borrower who doesn’t have much credit history. If your co-applicant has a good credit score, you might be offered better terms, including qualifying for a lower APR and/or a bigger loan. At the same time, both applicants’ credit scores will be affected if you don’t pay back your loan, so be sure that your co-applicant is someone you feel comfortable sharing financial responsibility with. 
    • Co-signers: A co-signer agrees to help you qualify for the loan, but they are only responsible for making payments if you are unable to. The co-signer does not receive the loan, nor do they necessarily make decisions about how it is used. However, the co-signers credit will be negatively affected if the main borrower misses payments or defaults.
    • Co-borrower: Unlike a co-signer, a co-borrower is responsible for paying back the loan and deciding how it is used. Co-borrowers are usually involved in decisions about how the loan is used. Some lenders will only consider two co-borrowers who share a home or business address, as this is a firm indicator that they are sharing the responsibility of money in mutually beneficial ways. Both co-borrowers’ credit scores are on the hook if either one stops making payments or defaults.
    • Direct payments: Some lenders offer direct payments when you select debt consolidation as the reason for taking out a personal loan. With direct payments, the lender pays your creditors directly, and then deposits any leftover funds into your checking or savings account. Until you see your account balance is fully paid off, it’s best to keep making payments so that you don’t get hit with additional late fees and interest charges.
    • Early payoff penalty: Before you accept a loan, look to see if the lender charges an early payoff or prepayment penalty. Because lenders expect to get paid interest for the full term of your loan, they could charge you a fee if you make extra payments to pay your debt down quicker. The fees could equal either the remaining interest you would have owed, a percentage of your payoff balance or a flat rate.
    • Origination fee: An origination fee is a one-time upfront charge that your lender subtracts from your loan to pay for administration and processing costs. It is usually between 1% and 5%, but sometimes it is charged as a flat-rate fee. For example, if you took out a loan for $20,000 and there was a 5% origination fee, you would only receive $19,000 when you got your funds. Your lender would get $1,000 of the loan off the top, and you’d still have to pay back the full $20,000 plus interest. It’s best to avoid origination fees if possible. Having a good to excellent credit score helps you qualify for loans that don’t have origination or administration fees. 
    • Unsecured versus secured loans: Most personal loans are unsecured, meaning they are not tied to collateral. However, if your credit score is less-than-stellar and you’re finding it hard to qualify for the best loans, you can sometimes use a car, house or other assets to act as collateral in case you default on your payments. When you put an asset up as collateral, you are giving your lender permission to repossess it if you don’t pay back your debts on time and in full.

    Our methodology

    To determine which personal loans are the best, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions, that come with no origination or signup fees, fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

    When narrowing down and ranking the best personal loans, we focused on the following features:

    • No (or low) origination or signup fee: The majority of lenders on our best-of list don’t charge borrowers an upfront fee for processing your loan. For the ones that do, the fee is relatively low and only applies if you have a low credit score.
    • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
    • Flexible minimum and maximum loan amounts/terms: Each lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
    • No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
    • Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
    • Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
    • Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
    • Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.50%.
    • Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $500 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

    After reviewing the above features, we sorted our recommendations by best for overall financing needs, debt consolidation and refinancing, small loans, next-day funding and lower credit scores.

    Note that the rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more. 

    Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date

    Subscribe to the CNBC Select Newsletter!

    Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.

    *Your LightStream loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 7.99% APR with a term of three years would result in 36 monthly payments of $313.32.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • CNBC Daily Open: China reported an economic boom

    CNBC Daily Open: China reported an economic boom

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    Tourists bustle in front of Huawei’s global flagship store near Nanjing Road Pedestrian street in Shanghai, China, March 21, 2023.

    CFOTO | Future Publishing | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    China’s economy boomed in the first three months of the year. In the U.S., regional banks’ earnings reports weren’t a disaster, but neither were they a picture of health.

    What you need to know today

    • Markets expect the Federal Reserve to continue hiking rates at its next meeting, but central banks in Asia-Pacific are already hitting the brakes on rate increases — and some might even start cutting rates this year.
    • Samsung is reportedly considering switching from Google to Microsoft’s Bing as the default search engine on its phone. If the South Korean conglomerate carries through on its plan, Alphabet, Google’s parent, could lose billions of dollars in advertising. Alphabet sank 2.66% on the news.
    • PRO Higher interest rates helped big U.S. banks reap huge profits and revenue. But they’re hurting smaller banks like State Street, which fell short of earnings expectations. Here’s why rates affect those banks’ revenue differently.

    The bottom line

    China’s economy is rebounding on multiple fronts, according to data released Tuesday by the country’s National Bureau of Statistics. Last month, gross domestic product shot up, retail sales boomed, industrial output rose and fixed asset investment climbed.

    Admittedly, some of those figures were lower than expected. Real estate investment declined, indicating China’s property sector is still a weak point in the country’s economy. Detractors can also point to China’s lower-than-expected 0.7% rise in March’s consumer price index, year on year, as a sign that consumption might not be as robust as retail sales suggest.

    Indeed, the tepid reactions of stock markets on the mainland and in Hong Kong reinforce the idea that the red-hot numbers aren’t as significant as they initially seem.

    Meanwhile, regional banks in the U.S. began reporting results Monday. It wasn’t the disaster many had feared, but it didn’t paint a picture of health in the sector, either.

    First, the good news. Charles Schwab’s first-quarter net income rose 14% from a year ago to $1.6 billion, while its revenue increased 10% to $5.12 billion. Its revenue didn’t reach Wall Street’s estimate, but it’s pretty remarkable the bank (which also functions as a brokerage) managed to increase its profit despite being one of the hardest-hit financial institutions amid SVB’s collapse. Investors thought so too, pushing Charles Schwab shares 3.94% higher.

    M&T Bank, a bank with assets of $201 billion (as of 2022), posted even better results. It beat first-quarter expectations on both the top and bottom lines, causing its stock to surge 7.78%.

    But other banks didn’t fare as well. State Street, which is a custodian bank that holds financial assets like stocks and bonds, saw a 5% decline in first-quarter net income, to $549 million, even though its total revenue rose. The report made investors unload State Street stock, which plunged 9.18%.

    Bank of New York Mellon, another large custody bank, sank 4.59% after State Street posted its earnings.

    Earnings aside, all banks that reported Monday revealed a drop in deposits. Those at State Street and M&T shrank about 3%, while Charles Schwab saw an 11% drop in deposits from the prior quarter. However, when juxtaposed against the banks’ stock movement, it seems investors were more concerned about profitability than the size of deposits, which could be a promising signal that it’s back to business as usual in the sector.

    Subscribe here to get this report sent directly to your inbox each morning before markets open.

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  • CNBC Daily Open: The regional banks are OK. Sort of

    CNBC Daily Open: The regional banks are OK. Sort of

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    UNITED STATES – JUNE 30: Pedestrians pass by a Charles Schwab brokerage, in New York, Friday, June 30, 2006. (Photo by Stephen Hilger/Bloomberg via Getty Images)

    Stephen Hilger | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    Regional banks’ earnings reports weren’t a disaster, but neither were they a picture of health.

    What you need to know today

    • PRO Higher interest rates helped big U.S. banks reap huge profits and revenue. But they’re hurting smaller banks like State Street, which fell short of earnings expectations. Here’s why rates affect those banks’ revenue differently.

    The bottom line

    Regional banks in the U.S. began reporting results Monday. It wasn’t the disaster many had feared, but it didn’t paint a picture of health in the sector, either.

    First, the good news. Charles Schwab’s first-quarter net income rose 14% from a year ago to $1.6 billion, while its revenue increased 10% to $5.12 billion. Its revenue didn’t reach Wall Street’s estimate, but it’s pretty remarkable the bank (which also functions as a brokerage) managed to increase its profit despite being one of the hardest-hit financial institutions amid SVB’s collapse. Investors thought so too, pushing Charles Schwab shares 3.94% higher.

    M&T Bank, a bank with assets of $201 billion (as of 2022), posted even better results. It beat first-quarter expectations on both the top and bottom lines, causing its stock to surge 7.78%.

    But other banks didn’t fare as well. State Street, which is a custodian bank that holds financial assets like stocks and bonds, saw a 5% decline in first-quarter net income, to $549 million, even though its total revenue rose. The report made investors unload State Street stock, which plunged 9.18%.

    Bank of New York Mellon, another large custody bank, sank 4.59% after State Street posted its earnings.

    Earnings aside, all banks that reported Monday revealed a drop in deposits. Those at State Street and M&T shrank about 3%, while Charles Schwab saw an 11% drop in deposits from the prior quarter. However, when juxtaposed against the banks’ stock movement, it seems investors were more concerned about profitability than the size of deposits, which could be a promising signal that it’s back to business as usual in the sector.

    The major U.S. indexes all rose, but only mildly. The S&P 500 added 0.33%, the Dow Jones Industrial Average 0.3% and the Nasdaq Composite rose 0.28%. Investors are still waiting for companies in other industries to report this week — some, like health care and communications, may disappoint investors, according to Sam Stovall, chief investment strategist at CFRA Research.

    ″It’s sort of a wait and see,” Stovall said, “because what the banks giveth, the rest of the market might taketh away.”

    Subscribe here to get this report sent directly to your inbox each morning before markets open.

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