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    in Finance

    Jamie Dimon warns souring commercial real estate loans could threaten some banks

    Commercial real estate is the area most likely to cause problems for lenders, JPMorgan Chase CEO Jamie Dimon told analysts Monday.
    “The off-sides in this case will probably be real estate. It’ll be certain locations, certain office properties, certain construction loans,” Dimon said.
    “You’re already seeing credit tighten up because the easiest way for a bank to retain capital is not to make the next loan,” he added.

    Jamie Dimon, CEO, JP Morgan Chase, during a Jim Cramer interview, Feb. 23, 2023.

    Deposit runs have led to the collapse of three U.S. banks this year, but another concern is building on the horizon.
    Commercial real estate is the area most likely to cause problems for lenders, JPMorgan Chase CEO Jamie Dimon told analysts Monday.

    “There’s always an off-sides,” Dimon said in a question-and-answer session during his bank’s investor conference. “The off-sides in this case will probably be real estate. It’ll be certain locations, certain office properties, certain construction loans. It could be very isolated; it won’t be every bank.”
    U.S. banks have experienced historically low loan defaults over the last few years due to low interest rates and the flood of stimulus money unleashed during the Covid-19 pandemic. But the Federal Reserve has hiked rates to fight inflation, which has changed the landscape. Commercial buildings in some markets, including tech-centric San Francisco, may take a hit as remote workers are reluctant to return to offices.
    “There will be a credit cycle. My view is it will be very normal” with the exception of real estate, Dimon said.
    For example, if unemployment rises sharply, credit card losses might surge to 6% or 7%, Dimon said. But that will still be lower than the 10% experienced during the 2008 crisis, he added.
    Separately, Dimon said banks — especially the smaller ones most affected by the industry’s recent turmoil — need to plan for interest rates to rise far higher than most expect.

    “I think everyone should be prepared for rates going higher from here,” up to 6% or 7%, Dimon said.
    The Fed concluded last month mismanagement of interest-rate risks contributed to the failure of Silicon Valley Bank earlier this year.
    The industry is already building capital for potential losses and regulation by reining in its lending activity, he said.
    “You’re already seeing credit tighten up because the easiest way for a bank to retain capital is not to make the next loan,” he said. More

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    in Business

    Paramount streaming service to merge with Showtime on June 27

    Paramount plans to launch its combined streaming services Paramount+ and Showtime in the U.S. on June 27.
    Paramount+ with Showtime’s premium tier will increase to $11.99 from $9.99, while its lower-priced tier, without Showtime content, will increase by $1 to $5.99.
    The company will sunset its standalone Showtime app, as well as rebrand the premium Showtime cable-TV network, by the end of the year.

    Tom Ryan, CEO and President of Paramount Streaming, speaks during the LG press conference ahead of the Consumer Electronics Show (CES) in Las Vegas, Nevada, on January 4, 2023.
    Patrick T. Fallon | AFP | Getty Images

    Paramount Global’s flagship streaming service Paramount+ will combine with its Showtime app in the U.S. on June 27, the company said Monday.
    With the newly merged streamer will come an increase in pricing, as Paramount had announced earlier this year. The Paramount+ with Showtime premium tier will increase to $11.99 from $9.99, while the Paramount+ option without Showtime content will increase by $1 to $5.99.

    The integration goes beyond Paramount’s streaming options. The premium cable-TV network, known for series like “Yellowjackets” and “Billions,” will also be rebranded as Paramount+ with Showtime, and the company will also sunset the standalone Showtime app by the end of the year.
    Once integrated, the Showtime TV network will also feature content from Paramount+, which has produced original series that spun off from popular franchises like “Yellowstone” and “Criminal Minds.” Showtime is an extra subscription fee on the pay-TV bundle.
    Paramount has said it expects peak losses for its fledgling streaming service Paramount+ this year.
    The combined platforms will also help cut down on content spending, which has been a recent focus for media companies as they look to make streaming profitable.
    Warner Bros. Discovery has been cutting costs since completing its merger. The company is also launching Max on Tuesday, the combination of HBO Max and Discovery+. However, Discovery+ will also remain as a standalone service.
    Disney announced this year it would cut $5.5 billion in costs, including $3 billion on the content said. Last week, CEO Bob Iger said Disney would add Hulu content to its Disney+ platform, a move toward a one-app experience for consumers and to streamline business for advertisers. The company will also focus on adding more ad-supported customers, and plans to increase its ad-free streaming prices later this year. More

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    Walmart will offer pet telehealth in latest bid to compete with Amazon

    Walmart is partnering with veterinary telehealth provider Pawp to offer Walmart+ subscribers free access to virtual veterinarians for a year beginning Tuesday.
    The retailer’s foray into veterinary telehealth comes as the company looks to better compete with Amazon and hold on to higher-income customers by making its subscription service more valuable.
    Some veterinarians say pet telehealth could be risky for animals while others say it helps bridge the access to care amid a nationwide vet shortage.

    A shopper wearing a protective mask pushes a dog in a cart outside a Walmart store in Lakewood, California, July 16, 2020.
    Patrick T. Fallon | Bloomberg | Getty Images

    Walmart is jumping into the burgeoning pet telehealth market. 
    The mega-retailer has inked a deal with veterinary telehealth provider Pawp to offer Walmart+ subscribers access to the startup’s membership for a year, the companies confirmed to CNBC. 

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    Unlimited access to veterinary telehealth via video or text will be available to Walmart+ subscribers beginning Tuesday when Walmart is expected to announce the partnership publicly. Remote veterinarian visits are growing industry wide as consumers seek convenience, but some vets say the practice could be risky for pets.
    The offer will be available for a limited time, Walmart said. Walmart+ subscribers will have until Nov. 19 to opt in.
    The terms of the deal weren’t disclosed. Pawp’s annual membership starts at $99.
    Walmart’s foray into veterinary telehealth comes as the company looks to deepen loyalty with shoppers, attract and hold on to higher-income customers and better compete with Amazon by making its subscription service more valuable with the addition of perks.
    Walmart+ costs $98 annually, or $12.95 a month. Similar to Amazon Prime, the Walmart service gives members access to unlimited free deliveries and a range of other benefits, such as free access to Paramount+ and discounts at the gas pump.

    Amazon Prime, which costs $139 annually or $14.99 monthly, offers its own partnerships, as members currently get free access to GrubHub+ for a year, along with other perks such as photo storage and discounts on prescriptions. By adding Pawp to its subscription, Walmart hopes to keep its membership service competitive with Amazon Prime.
    “It’s undeniable that over the past decade, we started thinking and looking at pets as part of the family,” Pawp’s CEO Marc Atiyeh told CNBC. “[Walmart has] a very strong thesis around the pet category and yes, they want to be a big player in pet care and pet health in general, and Pawp really allows them to leapfrog the competition and do something that none of the other players have done.” 

    Promotional image from Pawp.
    Source: Pawp

    The deal comes as the $123.6 billion U.S. pet market explodes, with more and more American households shelling out big bucks to keep their furry family members healthy and happy. 
    The U.S. market is expected to grow to $200 billion by the end of the decade and pet health care is driving that boom, according to research from Bloomberg Intelligence.
    “During the pandemic there was a huge number of pet adoptions and even more important than just the numbers is how people are treating their pets. Pets are becoming part of the family, people are spending on their pets and spending on their pet’s health care,” Ann-Hunter Van Kirk, a senior biopharmaceutical analyst with Bloomberg Intelligence, told CNBC.
    When an animal had a serious health concern or life-threatening disease in the past, it was common to put the pet down, but now, people are often willing to spend what’s necessary to keep them alive, said Van Kirk. 
    She said Walmart’s partnership with Pawp “makes perfect sense” and shows how eager retailers are to grow their share of the pet market. 
    As Amazon has deepened its investments into human health, including through its $3.9 billion acquisition of primary-care provider One Medical, Walmart has been growing its pet business. It’s already one of the larger players in pet food, prescriptions, insurance and hard goods such as toys and beds.
    Walmart’s expansion into pet telehealth signals the largest U.S. retailer is ready to grow its share of the market.
    “[Walmart] has become the one-stop destination for all the needs of pet parents,” a company spokesperson told CNBC. “By providing simple, convenient shopping and affordable solutions to take care of pets across all areas — from food, treats, toys, apparel, durables and services — Walmart delivers real value, especially during this inflationary time.”
    The telehealth visits can be used to address “many common concerns,” such as allergies, digestive issues or “light limping,” the spokesperson said. The service can also be used for follow-up care.
    Traditional pet-only retailers such as Chewy and Petco have already been investing in pet health care to better compete with big-box stores. Long term, it will be a key factor in whether they can grow and make higher profits over time.

    A Walmart logo seen from the parking lot of its store in Bloomsburg, Pennsylvania.
    Paul Weaver | SOPA Images | Lightrocket | Getty Images

    Walmart’s partnership with Pawp will allow it to better compete with Amazon and could boost sales of its pet products. The deal will also solve a crucial problem for Pawp: customer acquisition. 
    Walmart has yet to publicly disclose its Walmart+ subscriber numbers, but Morgan Stanley estimates membership has reached 19.3 million and is steadily growing, according to an April research note. 
    Industry insiders have pointed to gaining new customers as one of the steepest hurdles pet telehealth providers must overcome to scale their businesses, because the practice is still new, and its value proposition can be limited. 
    Pawp, which has raised $27.5 million in funding since its inception in 2020, according to Crunchbase, also doesn’t share its membership numbers. But it will now have access to millions of potential customers through the partnership. 

    The risks and benefits of pet telehealth

    Pet telehealth is just one arm of the overall pet health market and has been rapidly growing since the Covid-19 pandemic, when it first arose out of necessity. 
    Chewy was one of the first major retailers to offer the service, which is currently free for its customers. Now, a slew of startups and large veterinarian chains offer telehealth to pet parents. 
    The practice has come under scrutiny from some veterinarians who have expressed concerns the service could put pets at risk. It has become a major point of debate in the veterinary community. 
    Some veterinarians have told CNBC it’s difficult to assess health concerns, including life-threatening conditions, when examining a pet virtually, and said there’s no substitute for a physical exam.
    Others have argued pet telehealth helps bridge the access to care as pet owners contend with a nationwide veterinary shortage and swaths of pet health deserts across rural America.

    Promotional image from Pawp.
    Source: Pawp

    The space is also subject to a maze of regulatory challenges both on the state and federal level, which has held Chewy back from scaling its telehealth service, CEO Sumit Singh told CNBC previously.
    Most states forbid veterinarians from diagnosing conditions or prescribing medications virtually unless they have previously examined the pet in person and established what’s called a veterinary client patient relationship, or VCPR.  
    During the Covid-19 pandemic, several states temporarily rolled back those guidelines to respond to the global health emergency, but some states have made the changes permanent. It’s sparked a growing lobbying movement to change VCPR regulations nationally, which Chewy and Mars Veterinary Health, a subsidiary of pet food and candy conglomerate Mars, has helped to fund. 
    The American Veterinary Medical Association, the nation’s leading advocacy group for veterinarians, maintains outside of an emergency such as a global pandemic, a VCPR can only be established after an in-person exam. The group’s ethical standards allow vets to diagnose conditions, prescribe medication or treat animals virtually, but only after a VCPR has been established in person. 
    In states that allow a virtual VCPR, Pawp’s veterinarians are prescribing medications and diagnosing where appropriate. But the company’s founder defended the practice and said the best pet care comes when “physical and digital get married.” 
    “More often than not, especially within our industry, regulations lag behind what I would say is the latest innovation, latest kind of like findings, so we want to make sure that we strike the right balance,” said Atiyeh, Pawp’s CEO.
    “We have a huge shortage of vets, right?” he continued. “The last thing you want is a pet that is in need of a certain medication … to not get the proper care that they need, to not get the medication that they need only because they couldn’t get physical access to that vet.” 
    He said the company’s medical team is constantly reviewing medications to determine what kinds are safe to prescribe virtually, such as flea and tick prescriptions, regardless of what the regulations say. 
    “Number one is can we prescribe? Number two is what kind of medications we are comfortable prescribing,” said Atiyeh. “We still have a very high bar on what we believe is the right thing to do for pets.”
    — CNBC’s Melissa Repko contributed to this report. More

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    in Finance

    What happens if America defaults on its debt?

    The American constitution vests legislative power in Congress. Over the coming days the political body may arrogate to itself a metaphysical power: transforming the utterly unthinkable into hard reality. By failing to raise America’s debt ceiling in time, Congress could drive the country into its first sovereign default in modern history. A collapse in stockmarkets, a surge in unemployment, panic throughout the global economy—all are within the realm of possibility.The path to a default is clear. America has until roughly June 1st to raise its debt limit—a politically determined ceiling on total gross federal borrowing, currently at $31.4trn—or it will run out of cash to cover all its obligations, from paying military salaries to sending cheques to pensioners and making interest payments on bonds.The country has faced such deadlines in the past, lulling observers into the belief that it will, once again, raise its debt limit at the last minute. But its politicians are more fractious than during past standoffs. Kevin McCarthy, the Republican speaker of the House of Representatives, is pushing for swingeing spending cuts, as he is required to do to keep his narrow, quarrelsome majority together. Joe Biden, for his part, may lose the support of progressive Democrats if he is seen as having capitulated to Republican demands.The Treasury, working with the Federal Reserve, has a fallback plan if Congress does not raise the debt limit. Known as “payment prioritisation”, this would stave off a default by paying interest on bonds and cutting back even more from other obligations. Yet putting bondholders ahead of pensioners and soldiers would be unpalatable, and may prove unsustainable. Moreover, prioritisation would rely on the continued success of regular auctions to replace maturing Treasury bonds. There is no guarantee that investors would trust such a dysfunctional government. With each passing day, an American default would loom as an ever more serious risk.Default could come in two flavours: a short crunch or a longer crisis. Although the consequences of both would be baleful, the latter would be much worse. Either way, the Fed would have a crucial role to play in containing the fallout; this crucial role would, however, be one of damage-limitation. Every market and economy around the world would feel the pain, regardless of the central bank’s actions.America is home to the world’s biggest sovereign debt market: with $25trn of bonds in public hands, it accounts for about one-third of the global total. Treasuries are seen as the ultimate risk-free asset—offering a guaranteed return for corporate cash managers, governments elsewhere and investors big and small—and as a baseline for pricing other financial instruments. They are the bedrock of daily cash flows. Short-term “repo” lending in America, worth about $4trn a day and a lifeblood for global financial markets, largely runs by using Treasuries as collateral. All of this would be thrown into doubt.By definition, a default would initially be a short-term disruption. An official at the Fed says it would resemble a liquidity crisis. Assume that the government defaults on bills and bonds coming due after the “x-date” when it runs out of cash (this is estimated by Treasury to be June 1st, if not perhaps a little after that, depending on tax receipts). Demand may still remain firm for debt with later maturities on the assumption that Congress would come to its senses before long. A preview of the divergence can already be seen. Treasury bills due in June currently have annualised yields of about 5.5%; those in August are closer to 5%. This gap may widen precipitously in the event of a default.To start with, the Fed would treat defaulted securities much as it treats normal securities, accepting them as collateral for central-bank loans and potentially even buying them outright. In effect, the Fed would replace impaired debt with good debt, working on the assumption that the government would make payment on the defaulted securities, just with some delay. Although Jerome Powell, chairman of the Fed, described such steps as “loathsome” in 2013, he also said that he would accept them “under certain circumstances”. The Fed is wary of both inserting itself at the centre of a political dispute and taking actions that seem to break the wall between fiscal and monetary policies, but its desire to prevent financial chaos would almost certainly override these concerns.The Fed’s response would, however, create a paradox. To the extent that the central bank’s actions succeed in stabilising markets, they would reduce the need for politicians to compromise. Moreover, running a financial system based, in part, on defaulted securities would pose challenges. Fedwire, the settlement system for Treasuries, is programmed to have bills disappear once they pass their maturity date. The Treasury has said it will intervene to extend the operational maturities of defaulted bills to ensure that they remain transferable. Yet it is easy to imagine this kind of jury-rigged system eventually breaking down. At a minimum, investors would demand higher interest to compensate for the risk, leading to a tightening of credit conditions throughout global markets.However this works out, America would already be in the throes of extreme fiscal austerity. The government would be unable to borrow more money, meaning it would have to cut spending by the gap between current tax revenues and expenditures—an overnight reduction of roughly 25%, according to analysts at the Brookings Institution, a think-tank. Moody’s Analytics, a research outfit, estimates that in the immediate aftermath of a default, America’s economy would shrink by nearly 1% and its unemployment rate would rise from 3.4% to 5%, putting about 1.5m people out of work. In the short-term scenario, Congress responds by raising the debt ceiling, allowing markets to recover. A default that lasts for a few days would be a black eye for America’s reputation and probably induce a recession. Yet with deft management, it would not be the stuff of nightmares. A longer default would be more dangerous. Mark Zandi of Moody’s calls it a potential “tarp moment”, referring to the autumn of 2008 when Congress initially failed to pass the Troubled Asset Relief Program to bail out the banks, prompting global markets to crater. Continued failure to lift the debt ceiling, even after a default occurs, could have a similar impact.The Council of Economic Advisers, an agency in the White House, estimates that in the first few months of a breach, the stockmarket would fall by 45%. Moody’s reckons it would fall by about 20%, and that unemployment would shoot up by five percentage points, which would mean somewhere in the region of 8m Americans losing their jobs. The government, constrained by the debt ceiling, would be unable to respond to the downturn with fiscal stimulus, making for a deeper recession.An avalanche of credit downgrades would add to these troubles. In 2011, during a previous debt-ceiling standoff, Standard & Poor’s, a ratings agency, downgraded America to a notch below its top aaa rating. After a default, ratings agencies would be under immense pressure to follow suit. This could lead to a nasty chain reaction. Institutions backstopped by the American government such as Fannie Mae, a crucial source of mortgage finance, would also be downgraded, translating into higher mortgage rates and undercutting the all-important property sector. Yields on corporate bonds would spike as investors scrambled for cash. Banks would pull back their lending. Panic would spread.There would also be bizarre, unpredictable twists. Normally, the currencies of defaulting countries suffer badly. In the case of an American breach, investors might initially flock to the dollar, viewing it as a haven during a crisis, as is normally the case. Within America, people might turn to deposits at too-big-to-fail banks, believing that the Fed will stand behind them come what may. But any signs of resilience would carry an almighty caveat: America would have violated the trust that the world has long placed in it. Questions about alternatives to the dollar and to the American financial system would gain urgency. Faith, once destroyed, cannot easily be restored. ■ More

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    in Finance

    Stocks making the biggest moves midday: PacWest, DraftKings, Pfizer, Foot Locker and more

    Earlier Monday, UBS upgraded the DraftKings stock to buy from neutral on strong growth in new states.
    Pfizer shares popped more than 3% after a study said an oral drug from Pfizer for weight loss showed similar and faster results than competitor Novo Nordisk’s Ozempic.
    Shares of Apple dipped less than 1% after a downgrade from Loop Capital, which warned the tech giant could miss its revenue forecast for the June quarter.

    Pacific Western Bank signage is displayed outside a bank branch in Beverly Hills, California, May 4, 2023.
    Patrick T. Fallon | AFP | Getty Images

    Check out the companies making headlines in midday trading.
    PacWest Bancorp — Shares rose 19.6%. The closely followed regional bank sold around $2.6 billion worth of construction loans to a subsidiary of Kennedy-Wilson Holdings.

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    DraftKings — Shares of the sports gambling platform added 4.6% in midday trading. Earlier Monday, UBS upgraded the stock to buy from neutral on strong growth in new states.
    Zions Bancorporation — The bank stock jumped 4.9% after Hovde Group initiated coverage of Zions at outperform, with a $40 price target, according to FactSet. That’s about 49% upside from where shares closed Friday.
    Pfizer — Pfizer shares popped more than 5.4% after a peer-reviewed study said an oral drug from Pfizer for weight loss showed similar and faster results than competitor Novo Nordisk’s Ozempic.
    Meta Platforms — The social media company rose 1.1% to hit a 52-week high even after news the firm has been fined a record 1.2 billion euros ($1.3 billion) by European privacy regulators over the transfer of EU user data to the U.S. The stock has rallied about 106% this year, buoyed by investor optimism around the artificial intelligence space.
    Nike, Foot Locker — Nike shares declined nearly 4% Monday. Citi added a negative catalyst watch on the athletic apparel company in a Monday note. The firm said Foot Locker’s worse-than-expected earnings report last week signals difficulties ahead for Nike. Meanwhile, Foot Locker shares dropped 8.5%.

    Micron Technology — The chip stock shed about 2.9% after China’s Cyberspace Administration barred operators of “critical information infrastructure” in that country from purchasing products from Micron. Beijing said the company poses a “major security risk.”
    Catalent — Catalent rebounded to trade 0.9% higher. The stock was down in premarket trading Monday. The action comes after JPMorgan Chase on Friday downgraded the pharmaceutical stock to neutral from overweight. The Wall Street firm cited macro headwinds for the rating change.
    Norfolk Southern — Norfolk Southern gained 0.2% during midday trading. Citi upgraded the railroad stock to buy from neutral, while Wells Fargo upgraded Norfolk to overweight from equal weight.
    Apple — Shares of the tech giant dipped 0.5% after a downgrade from Loop Capital, which warned Apple could miss its revenue forecast for the June quarter. Shares of Apple are up more than 30% year to date.
    JetBlue Airways, American Airlines — Shares of JetBlue Airways and American Airlines declined 2.1% and nearly 3%, respectively, after the Department of Justice on Friday won a lawsuit to end their partnership in the Northeast, saying it was anti-competitive.
    — CNBC’s Brian Evans, Michelle Fox, Alexander Harring, Hakyung Kim, Yun Li and Jesse Pound contributed reporting. More

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    in Business

    Ford lays out its plans to ramp EVs and boost profits in key capital markets day

    Ford Motor made its case to Wall Street at an investor event Monday, sharing details of its plan to profitably build millions of EVs while growing its traditional operations.
    Ford CEO Jim Farley kicked off the day discussing the company’s growth plans for its gas-powered, fleet, and electric business units.
    Doug Field, chief advanced product development and technology officer, touted a push into software and subscription revenue models.

    Ford Mustang on display at the NY Auto Show, April 6, 2023.
    Scott Mlyn | CNBC

    DEARBORN, Mich. – Ford Motor made its case to Wall Street at an investor event Monday, sharing details of its plan to profitably build millions of EVs while growing its traditional operations.
    Ford CEO Jim Farley kicked off the day discussing the company’s growth plans for its gas-powered, fleet, and electric business units.

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    “I’m not here to tell you that we’re undervalued, you’ll make your own decision,” Farley said.
    Ford said early Monday that it is maintaining its 2023 guidance of between $9 billion and $11 billion in adjusted EBIT and about $6 billion in adjusted free cash flow.
    The company ahead of the event also announced a series of new deals for the supply of lithium products in support of its plan to dramatically ramp up production of electric vehicles.
    Ford is targeting an 8% EBIT margin on its electric vehicle unit and a 2 million EV production run rate by 2026, up from an expected 600,000 by year-end.
    Ford went into greater detail about its profit expectations for each of its main business units but did not announce any significant changes to its plans, which some on Wall Street have criticized as being ambitious, if not unrealistic.

    Farley focused much of his time on how Ford’s plans aim to bust the company out of the industry’s current valuation penalty box for traditional automakers compared to the likes of Tesla.
    Ford estimated its total costs are $7 billion higher than its competition.
    Ford CFO John Lawler was frank with analysts toward the end of the morning: “We’ve talked about this for years. You’re not going to believe us until we start delivering it … Because we’ve told you this before. That’s the truth. We have, and we haven’t delivered. So we have to prove it.”
    The automaker is expected to lose about $3 billion on its “Model e” electric vehicle business this year, offset from profits in its traditional “Blue” and “Pro” fleet businesses. The company separated the businesses and began reporting them individually this year.
    Growth projections
    For the first quarter, Ford said the EV operations’ loss widened to $722 million from $380 million a year earlier. The company’s traditional car business earned $2.6 billion, and the automaker’s fleet operations reported $1.4 billion in earnings. 
    The company expects to simplify its operations and increase margins from traditional products to low double-digit EBIT margins up from 7.2% in 2022. For example, Ford said it has removed more than 2,400 parts from its next-generation F-150 compared with the current vehicle.
    For the traditional business, Kumar Galhotra, president of the operations, said 8 percentage points of margin are expected to come from reductions in structural and controlled costs. That will assist in off-setting 6 percentage points in net pricing.
    “Demand continues to outstrip capacity for our key [internal combustion] vehicles,” Galhotra said. “In the next 10 months, Ford Blue will increase its capacity by over 160,000 units.”
    That increase may be surprising, as the company invests billions into EVs. Galhotra said while Ford expects its sales of traditional vehicles to begin declining after 2025 in exchange for EVs, vehicles with internal combustion engines will be around “well into” the next decade, he said.
    Profitably balancing the shift from traditional vehicles with engines to EVs is an increasingly difficult challenge for traditional automakers such as Ford.
    Doug Field, chief advanced product development and technology officer, said a key to doing so is increasing efficiencies in its next-generation EVs that are set to begin production in 2025.

    ‘Different kind of revenue’

    Field also touted a push into software and subscription revenue models, using the automaker’s BlueCruise hands-free highway driving system as as example.
    “As we build out our next gen platforms, we aspire to deliver [BlueCruise] to as many customers as possible,” Field said. “When you can take your eyes off the road, everything changes.”
    Ford for the 2024 model year expects to build 500,000 vehicles equipped with the hands-free technology. At an expected take rate of 20%, Field said BlueCruise alone could amount to $200 million in revenue.
    “My finance and business partners tell me that this is a different kind of revenue,” he said. “They use these words like accretive to margins, less cyclical than vehicle sales.”
    Field said that Ford’s approach to creating EVs is radically different from its traditional strategy for vehicle development, emphasizing that software will define and control many new features – including features Ford hasn’t yet developed, but will add to existing vehicles in the future via updates.
    “The products we make are not living rooms,” Field said. “They are moving, working robots. And our software ambition goes way beyond deep into how our products move, how they collect data, and how they support people who are going to use them for real work.
    “We call them unimaginably great products, because the best things we will make are the ones we haven’t thought of yet.” More

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    Pfizer oral weight loss drug may be as effective as Ozempic injection by Novo Nordisk, study says

    An oral drug from Pfizer causes a similar amount of weight loss as the blockbuster Ozempic injection, made by rival Novo Nordisk, according to results from a phase two clinical trial. 
    The results were presented at a medical conference late last year but JAMA Network now has released the full peer-reviewed study.
    New York-based Pfizer’s pill could also offer an advantage as an oral treatment option rather than a frequent injection.  
    Hollywood celebrities, social media influencers and even billionaire tech mogul Elon Musk have reportedly used popular weight loss drugs like Ozempic and Wegovy to get rid of unwanted weight.

    Weight-loss drugs have become a hot topic as public heath authorities and pharmaceutical companies seek to find solutions to the growing global obesity epidemic.
    Florian Gaertner | Photothek | Getty Images

    An oral drug made by Pfizer causes a similar amount of weight loss as rival Novo Nordisk’s blockbuster injection Ozempic, according to a peer-reviewed study of phase 2 clinical trial results released Monday.
    The results were presented at a medical conference late last year, and did not compare Pfizer’s drug with Ozempic or other weight loss medications. JAMA Network only now is releasing a peer-reviewed study.

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    Pfizer’s trial followed 411 adults with Type 2 diabetes who either took the company’s pill, danuglipron, twice a day or a placebo. 
    Body weight was “statistically significantly reduced” after patients took either 120-milligram or 80-milligram versions of danuglipron for 16 weeks, the study found.
    Patients who took a 120-milligram version lost around 10 pounds on average over that time period, the study found.
    Pfizer’s drug could offer an advantage as an oral treatment option rather than a frequent injection. 
    The study results also suggest danuglipron may be as effective for weight loss as Ozempic, though there are stark differences in dosage levels. 

    A phase 3 clinical trial on Ozempic found that adults who took a 1-milligram version of the injection lost around 9.9 pounds on average over 30 weeks. Patients take that shot once a week. 
    Ozempic is authorized in the U.S. to treat diabetes and is now being used off-label for weight loss.
    Novo Nordisk’s other drug, Wegovy, is the same medication, but it is approved for “chronic weight management.”
    A phase 3 clinical trial on Wegovy found that adults who took a 2.4-milligram version of the injection each week lost about 33 pounds on average over 68 weeks.
    Danuglipron, Ozempic and Wegovy are part of a class of drugs called glucagon-like peptide-1 agonists.
    They mimic a hormone produced in the gut called GLP-1, which signals to the brain when a person is full. 
    The drugs can also help people manage Type 2 diabetes because they encourage insulin release from the pancreas, lowering blood sugar levels.

    CNBC Health & Science

    Read CNBC’s latest global health coverage:

    New York-based Pfizer is the latest pharmaceutical company to dip into the blockbuster weight loss drug market. 
    Novo Nordisk’s Ozempic and Wegovy catapulted to the national spotlight in recent years for being weight loss “miracles.”
    Hollywood celebrities, social media influencers and billionaire tech mogul Elon Musk have reportedly used the popular injections to get rid of unwanted weight. 
    But experts say the medicines may further perpetuate a dangerous diet culture that idealizes weight loss and thinness.
    Some patients who stop taking the drugs also complain about a weight rebound that is difficult to control.
    More than 2 in 5 adults have obesity, according to the National Institutes of Health. About 1 in 11 adults have severe obesity.
    Clarification: This article’s headline has been updated to remove a reference to evidence showing that Pfizer’s drug might work more quickly than Ozempic. While the amount of weight loss from Pfizer’s drug occurred in roughly half of the time for the same amount of weight seen with Ozempic, the dosage of Pfizer’s drug was markedly higher than Ozempic. More

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    SpaceX delivers private Axiom crew to the space station, carrying Saudi astronauts

    SpaceX delivered another quartet of astronauts to the International Space Station on Monday morning.
    Axiom Space booked the roughly week-long trip, known as the Ax-2 mission, to the ISS with Elon Musk’s company.
    The private flight carries two Americans and two Saudis, including the first woman to fly in space from the Arab nation.

    SpaceX’s Crew Dragon capsule, named Freedom, is seen docked with the International Space Station, May 22, 2023.

    SpaceX delivered another quartet of astronauts to the International Space Station on Monday morning, on a private flight that included government astronauts from Saudi Arabia as the Arab kingdom leverages U.S. companies to expands its ambitions in space. 
    Axiom Space booked the roughly week-long trip, known as the Ax-2 mission, to the ISS with Elon Musk’s company. SpaceX launched the four people Sunday evening from Florida. Its Falcon 9 rocket launched from NASA’s Kennedy Space Center and the company’s Crew Dragon capsule, named Freedom, reaching the ISS about 16 hours later.

    CAPE CANAVERAL, FLORIDA, UNITED STATES – MAY 21: A SpaceX Falcon 9 rocket with the Crew Dragon spacecraft lifts off from pad 39A at the Kennedy Space Center for the Axiom Space Mission 2 (Ax-2) on May 21, 2023 in Cape Canaveral, Florida. The four-person private astronaut Ax-2 crew, which will spend eight days on the International Space Station, includes former NASA astronaut Peggy Whitson, pilot John Shoffner, and Saudi Space Commission astronauts Ali Alqarni and Rayyanah Barnawi, the first Saudi woman to fly to space. (Photo by Paul Hennesy/Anadolu Agency via Getty Images)
    Anadolu Agency | Anadolu Agency | Getty Images

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    Ax-2 is commanded by retired NASA astronaut Peggy Whitson, who has spent more time in space than any other American or woman, and piloted by businessman and auto racer John Shoffner, who purchased a seat on the flight through Axiom. Whitson is also Axiom’s director of human spaceflight.
    The Kingdom of Saudi Arabia bought the final two seats on Axiom’s mission, with Rayyanah Barnawi and Ali al-Qarni flying as mission specialists. Barnawi is the first Saudi woman to fly in space.
    The mission will feature a busy slate of research and technology experiments, with over 20 different science investigations.

    Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

    For SpaceX, the Ax-2 mission is the company’s 10th human spaceflight. The company has flown seven government-booked crew missions and three private flights since launching astronauts for the first time in May 2020.
    The mission featured the first time SpaceX returned a Falcon 9 booster to land back near the launch site, rather than on a ship in the ocean, after a crew launch. The company continues to expand the technical capabilities of its fleet.

    This was also the second launch for the company’s reusable Freedom capsule, which previously carried NASA’s Crew-4 mission on a six-month mission to and from the ISS.
    Axiom and SpaceX have not disclosed financial details about the Ax-2 mission. NASA has previously disclosed a SpaceX crew launch costs about $55 million per seat, so the price for these private missions is expected to be high. Axiom has booked four crewed flights from SpaceX to date.
    Although SpaceX is providing the rocket and capsule, Axiom is leading the mission’s management from training to the return to Earth. More