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Traders work at the offices of CMC Markets in the City of London on December 10, 2018 as Britain's Prime Minister Theresa May makes a statement in the House of Commons announcing the government's intention to delay the 'meaningful' vote on the Brexit withdrawl agreement.

Daniel Sorabji | AFP | Getty Images

Traders work at the offices of CMC Markets in the City of London on December 10, 2018 as Britain’s Prime Minister Theresa May makes a statement in the House of Commons announcing the government’s intention to delay the ‘meaningful’ vote on the Brexit withdrawl agreement.

Global fund managers have positioned their portfolios for slower growth and lower interest rates, but they do not foresee a recession until the second half of next year at the earliest.

More than half, or 53% of the fund managers in the monthly Bank of America Merrill Lynch survey believe the Fed is done raising interest rates, and just 13% expect higher global short-term rates, the lowest level since August 2012.

But 66% also see below trend economic growth and low inflation, the highest percent since October 2016. Seventy percent expect a global recession to start in the second half of 2020 or later, while 86% do not believe the inversion of the U.S. Treasury yield curve signals an impending recession.

Betting against European stocks was the most crowded trade in April, for a second month. While investors are negative on Europe, the second-most crowded trade favors buying big-cap growth names in the U.S. and China, through FAANG and BAT.

FAANG includes Facebook, Amazon, Apple, Netflix and Alphabet, while BAT represents Baidu, Alibaba and Tencent. The third- and fourth- most crowded trades are long U.S. dollar and then long Treasurys.

There were 187 participants in the survey, which was conducted between April 5-11.

The fund managers continue to see the biggest risks as the trade war and China’s growth slowdown. Trade wars have edged out China’s growth slowdown as the bigger worry in 10 of the last 11 months. The dominant concerns since 2011 have been euro zone debt, possible breakdown of the euro zone, Chinese growth, populism, quantitative tightening and trade wars.

Fund managers did increase their exposure to cyclical risk in the month by adding stocks and reducing cash. But the investing pros are most heavily positioned in utilities, and their allocation to global bank stocks is the lowest since September 2016. They also favor cash and emerging markets, vs. stocks and the euro zone.

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China has plenty of ways to get back at US for treatment of Huawei

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One of Huawei’s booths at MWC Barcelona 2019.

Elizabeth Schulze | CNBC

China has plenty of ways it can make retaliate against the U.S. treatment of Huawei, and U.S. companies could feel the brunt of it.

Both the White House and Commerce Department Wednesday took actions against the telecom company, which would essentially ban it from selling technology in the U.S. market and also stop it from buying the Qualcomm chips it needs for its production. Huawei was put on the Commerce Department’s Entity List which would require companies to apply for a license to sell technology to Huawei, thus limiting its access to U.S. technology.

The U.S. may see the action against Huawei as a lever in its China trade negotiations, which have hit a rough spot and now could take several more months. China’s possible reactions range from encouraging boycotts of U.S. products; favoring other companies over American companies, and conducting nuisance regulatory enforcements and inspections.

China could also use the same tactics it might use if trade talks become more difficult or fall apart, such as limiting purchases of U.S. Treasurys or selling them or weakening its currency. The biggest holder of U.S. Treasurys, China recently reduced its holdings to the lowest level in two years.

Eurasia Group analysts said there’s only now a 15% chance of a deal by the time President Donald Trump and China President Xi Jinping meet at the G-20 meeting at the end of June. They see a 45% chance that negotiations will be extended, and 40% chance there will be no deal or truce.

Citigroup economists still expect a trade deal within the next couple of months, regardless of where Huawei stands. “This is consistent with our view that the tensions between the U.S. and China go beyond trade. What we thought before this event was these issues regarding the technology sector were mostly taken on a different path, so they’re not that tied to having a trade deal,” said Cesar Rojas, global economist at Citigroup.

Analysts speculated one of China’s first responses to the Huawei actions was to formally charge two Canadians Thursday with espionage. The two were arrested in December, and the charges against them were viewed as pay back for Canada’s help in the arrest of Huawei CFO Meng Wanzhou, who is fighting extradition to the U.S.

‘Mobilizing patriotic consumers’

In January, the U.S. charged Huawei and its Meng with wire fraud, obstructing justice, conspiring to launder money and violating the International Emergency Economic Powers Act by doing business with sanctioned Iran. Meng is the daughter of Hauwei’s founder and faces extradition to the U.S. The U.S. has also discouraged the adaption of Huawei technology in other countries, for fear its equipment is not secure and could be used for cyberespionage.

“There has been some signaling about maybe mobilizing patriotic consumers, so you could maybe see a boycott of U.S. products. That’s been pretty limited so far. That’s been the main response,” said Adam Segal, director of digital and cybersecurity at the Council on Foreign Relations.

He said Apple would be the most likely target because it’s products are sold directly to consumers, but China may not want to rev up consumers too much. “There is a worry that if you mobilize too much nationalist sentiment, that you can’t control it,” said Segal.

Segal said China could use anti-competition inspections on China-based operations of U.S. companies, as it did with Microsoft several years ago. “They could search your factory. At 5 o’clock in the morning, inspectors show up and demand to see your books,” he said.

China would likely move toward developing its own sources for chips. “It will reinforce the sentiment of the Chinese leadership that they have to double down on their own investment, longer term investing in AI, 5G, and all the other technologies that we’re worried about,” he said. 5G is essentially the next generation of mobile networking that should result in faster internet and allow users to conduct a whole new operations linking smart phones to more everyday tasks.

Analysts noted that Oracle is one company, now moving operations from China. It is reported to be laying off 900 people at its research center in Beijing.

“Oracle has a toe hold in China, and given the noise, that’s a smart move for them to take a step away,” said Dan Ives, managing director and technology analyst at Wedbush. He said Oracle can do business cheaper elsewhere because of the tariffs.

Ives said Apple is the company at most risk for retaliation, but China may not want to be too hard on Apple since it employes 1.4 million people there including at Foxconn. “But realistically, I think that could only impact 3 to 5% iPhone purchases in the country. That’s what i would call a pretty contained issue for Apple.”

Chip companies are even less at risk since they are not as vulnerable to consumer boycotts, he said. “There’s limited strategic moves China can do because Qualcomm on 5G is so integral on the smart phones, ” said Ives.

“Qualcomm is as integral to the Chinese smart phone market as Tiger Woods is to golf. It’s that intertwined. Micron and Skyworks are also key, especially Micron, but it also speaks to the semi food chain. China needs to handle that with kid gloves, if they went after it, it would have worse implications domestically that would far outweigh the benefits of retaliation..China knows that and that’s why the U.S. knows when it comes to Huawei, that they know that ‘s a card they could play,” Ives said.

The pain for Huawei will clearly be greater than for U.S. suppliers. “Our assessment is Huawei, just like all large tech companies, remains highly dependent on a global supply chain, and possibly will experience a notable disruption without a continuous supply from the US. For suppliers, losses of Huawei may be mitigated by the gain of Huawei’s rivals, but short-term setbacks are hard to avoid,” Bernstein analysts wrote. Analysts believe Huawei has been stockpiling chips, and that could help it for awhile.

Eurasia Group analyst said since Trump reversed a similar action against Huawei rival, ZTE, last year, it may be that Huawei is permitted to buy some U.S. technology.

“It is still not clear the extent which the administration is using this as a new weapon in its campaign against Huawei (our preliminary take) or a negotiating tactic in trade talks,” the analysts wrote. They noted Huawei could be ultimately crippled and denied access to its hardware and software suppliers for moblie infrastructure and handsets.

“This would also quickly put at risk both the company itself and the networks of Huawei customers around the world, as the firm would be unable to upgrade software and conduct routine maintenance and hardware replacement. It would hit virtually all of Huawei’s products, including high-end smart phones, mobile infrastructure, data centers and cloud services, and have immediate global implications for any company utilizing Huawei’s products or services. European carriers, in particular, are likely to be affected quickly,” the Eurasia Group analysts noted.

Stocks of Qualcomm and other Huawei suppliers, Skyworks and Micron were all moving sharply lower on Thursday.

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Pinterest reports Q1 2019 earnings

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Chairman, Co-Founder and CEO of Pinterest, Ben Silbermann, speaks in front of the companies logo at the New York Stock Exchange (NYSE), during the company’s IPO on April 18, 2019 in New York City.

Johannes Eisele | AFP | Getty Images

Pinterest tanked as much as 12% after releasing its first quarterly earnings report as a public company after markets close on Thursday.

Here are the numbers Pinterest reported for its first quarter of 2019:

  • Loss per share: 32 cents, excluding certain items, vs. 11 cents, according to Refinitiv consensus estimates
  • Revenue: $201.9 million, vs. $200.6 million, according to Refinitiv

Pinterest has shown its strength among certain key demographics, but has had to work harder to expand beyond its core audience. The company revealed in its S-1 filing that it 80% of its total U.S. audience is comprised of moms ages 18-64, based on an independent Comscore study. It also claimed that more than half of U.S. millennials use its service.

The company has since begun making strides internationally, claiming “significant growth” in international MAUs over the past few years as it has focused on localizing content. Pinterest said in its IPO filing that it expects this demographic to continue to outpace U.S. user growth in the near term.

Pinterest said it had 80 million monthly active users in the U.S. in the first quarter of 2018, growing to 82 million in the last quarter of the year. Internationally, Pinterest counted 160 million monthly active users in the first quarter of last year compared to 184 million in the last quarter.

Still, U.S. users remain a larger source of revenue for Pinterest, generating an average revenue per user (ARPU) of $1.59 in the first quarter of 2018 and growing to $3.16 by the last quarter. International ARPU was 5 cents in Q1 2018 and grew to 9 cents in Q4 2018. For Pinterest’s first quarter of 2019, there were not enough analyst estimates to get a clear sense of expectations on MAU and ARPU growth.

Pinterest is much smaller than some of its social media peers, like Twitter, which counts more than 300 million MAUs and Facebook, which claims over 2 billion. But Pinterest’s leadership has resisted the label of social media in the first place, with CEO Benjamin Silbermann telling CNBC on the stock’s debut day that it was really “a utility.”

That mentality has kept Pinterest largely out of the focus of discussion about the spread of misinformation online as regulators narrow their sights on tech companies. Pinterest notably suspended search results for terms related to vaccination in February when it found out false anti-vaccine information was spreading on its service.

Still, Pinterest is very much dependent on other tech companies to keep its own operations running smoothly. The company disclosed that a change to Facebook’s login authentication system negatively impacted its user growth in the second quarter of 2018.

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Watch: How Pinterest makes money by filling your feed with promoted pins

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Pinterest reports Q1 2019 earnings

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Ben Silbermann, co-founder and chief executive officer of Pinterest Inc., center, rings the opening bell on the floor on the New York Stock Exchange during the company’s initial public offering (IPO) in New York, on Thursday, April 18, 2019.

Michael Nagle | Bloomberg | Getty Images

Pinterest is set to release its first quarterly earnings report as a public company after markets close on Thursday.

Here are the numbers analysts are expecting for Pinterest’s first quarter of 2019:

  • Loss per share: 11 cents, according to Refinitiv consensus estimates
  • Revenue: $200.6 million, according to Refinitiv

Pinterest has shown its strength among certain key demographics, but has had to work harder to expand beyond its core audience. The company revealed in its S-1 filing that it 80% of its total U.S. audience is comprised of moms ages 18-64, based on an independent Comscore study. It also claimed that more than half of U.S. millennials use its service.

The company has since begun making strides internationally, claiming “significant growth” in international MAUs over the past few years as it has focused on localizing content. Pinterest said in its IPO filing that it expects this demographic to continue to outpace U.S. user growth in the near term.

Pinterest said it had 80 million monthly active users in the U.S. in the first quarter of 2018, growing to 82 million in the last quarter of the year. Internationally, Pinterest counted 160 million monthly active users in the first quarter of last year compared to 184 million in the last quarter.

Still, U.S. users remain a larger source of revenue for Pinterest, generating an average revenue per user (ARPU) of $1.59 in the first quarter of 2018 and growing to $3.16 by the last quarter. International ARPU was 5 cents in Q1 2018 and grew to 9 cents in Q4 2018. For Pinterest’s first quarter of 2019, there were not enough analyst estimates to get a clear sense of expectations on MAU and ARPU growth.

Pinterest is much smaller than some of its social media peers, like Twitter, which counts more than 300 million MAUs and Facebook, which claims over 2 billion. But Pinterest’s leadership has resisted the label of social media in the first place, with CEO Benjamin Silbermann telling CNBC on the stock’s debut day that it was really “a utility.”

That mentality has kept Pinterest largely out of the focus of discussion about the spread of misinformation online as regulators narrow their sights on tech companies. Pinterest notably suspended search results for terms related to vaccination in February when it found out false anti-vaccine information was spreading on its service.

Still, Pinterest is very much dependent on other tech companies to keep its own operations running smoothly. The company disclosed that a change to Facebook’s login authentication system negatively impacted its user growth in the second quarter of 2018.

Subscribe to CNBC on YouTube.

Watch: How Pinterest makes money by filling your feed with promoted pins

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