Raphael Stevens

The average price for a house in the Hamptons hit a record $3 million in the first quarter.
Brokers say that despite stock market volatility, rising mortgage rates, layoffs in tech and finance and fears of recession, the wealthy are still bidding and buying.
The lack of homes for sale, however, has led to a sharp drop in total deals, with sales volume down 57% in the first quarter.

The average price for a house in the Hamptons hit a record $3 million in the first quarter, highlighting a shortage of trophy beach homes for sale and the resilience of wealthy buyers.
The average sales price in the New York beach community jumped 18% in the first quarter to $3.1 million, according to a report from Douglas Elliman and Miller Samuel. The average price in the Hamptons is now more than $1 million higher than the average sales price in Manhattan. That marks the largest gap between the two markets since data started being collected in 2005, according to Miller Samuel.

The surge reflects the continued shortage of homes listed for sale, along with sustained demand from wealthy homebuyers looking for a piece of the coveted Hamptons real estate. Brokers say that despite stock market volatility, rising mortgage rates, layoffs in tech and finance and fears of recession, the wealthy are still bidding and buying.
“We have more buyers than sellers,” said Todd Bourgard, CEO of Douglas Elliman’s Long Island, Hamptons and North Fork region. “The buyers are out there.”
The high end of the Hamptons market is the strongest. In the luxury market — representing the top 10% of sales — both the median and average sales price broke records during the first quarter, with the average luxury price surging 33% to $16.1 million, according to Jonathan Miller, CEO of Miller Samuel.
More than 14% of sales in the luxury market were the result of bidding wars, Miller said.
“The high end remains unfazed to a certain degree,” he said. “You have people who are making moves with less concern for the macro environment.”

A beachfront residence is seen in East Hampton, New York.
Jeffrey Basinger | Reuters

The Hamptons saw a number of mega-home sales in the first quarter. A 6.7-acre estate in East Hampton sold for $91.5 million in March, more than twice what it sold for in 2020. A 3,000-square foot home in Montauk once owned by Bernie Madoff sold for $14 million. A modern, 5,500 square-foot oceanfront home in Bridgehampton sold in an off-market deal for around $35 million, brokers say.
Even small homes in the Hamptons are fetching big prices: A mobile home in the Montauk Shores community sold for $3.75 million.
The lack of homes for sale, however, has led to a sharp drop in total deals. Sales volume in the first quarter plunged 57% to their lowest level in 14 years, according to Miller Samuel. While the inventory of listed homes increased by one-third from the first quarter of 2022, inventory is still about half the pre-Covid levels, Miller said.
Brokers add that many of the current listings are over-priced, making the number of sellable homes even lower. Brokers say that while demand from wealthy buyers is strong, they’re disciplined on price and refuse to pay the peak prices of 2021 and early 2022.
“A lot of properties coming on to the market are not priced right,” Miller said.
Brokers say sales could pick up over the summer, if more homes come on the market.
“As we go into spring and start heading into the summer, I think the market will get stronger,” Bourgard said. More

Southwest’s CEO said the company will have to “moderate” hiring because of Boeing’s delivery delays.
The airline expects to receive only 70 new Boeing 737 Max planes this year, down from 90.
Airlines have been hamstrung to grow capacity by aircraft and pilot shortages.

Southwest Airlines is reducing its hiring targets for this year because of delays in new aircraft from Boeing, the carrier’s CEO Bob Jordan said Thursday.
The Dallas-based airline expects to receive just 70 new 737 Max planes from Boeing this year, down from a previous forecast of 90, which will reduce its capacity growth plans by one percentage point, Southwest said in quarterly filing.

Southwest is one of Boeing’s best customers and operates a fleet of all 737s. It has orders for 564 Boeing 737 Max planes through the end of the decade, according to the quarterly report. Those aircraft are more fuel-efficient and will both replace older jets and help the company grow.
Jordan told CNBC’s “Squawk on the Street” following its quarterly report that the company planned to add a net 7,000 people to its staff this year, but will now have to “moderate” its targets.
The company didn’t respond to a request to elaborate on how much it will need to reduce its hiring plans.

Boeing employees sign a banner in front of a 737 MAX 8 produced for Southwest Airlines as Boeing celebrates the 10,000th 737 to come off the production line in Renton, Washington, U.S. March 13, 2018.
REUTERS/Jason Redmond

Jordan said the company is trying to be “prudent” about its expectations for deliveries, which have repeatedly been delayed.
“You plan way in advance to set your schedules, to set your capacity, and you’re wrong. It’s just really difficult to change that close in,” Jordan told CNBC’s Phil LeBeau in the interview.

The carrier plans to reduce flight plans in the last few months of the year because of the delays, COO Andrew Watterson said on the quarterly call on Thursday.
On Wednesday, Boeing said it plans to ramp up output of 737 Max planes to 38 a month this year from a current rate of about 31 a month, a long-planned increase that was delayed by supply chain problems and labor shortages.
American Airlines CEO Robert Isom also complained about delivery delays when the rival airline reported quarterly results on Thursday.
“In terms of the aircraft manufacturers, both Boeing and Airbus, they have to do a better job,” Isom said in an interview with CNBC’s “Squawk Box” following that report. “When we don’t receive a delivery on time, guess what? We’re going out and having to cancel flights. That affects thousands of customers.”
“We’ve got to hold them accountable,” Isom said. More

Lawmakers from both parties reintroduced the Secure and Fair Enforcement (SAFE) Banking Act, which the cannabis industry views as a financial lifeline.
The legislation is expected to go before the Senate Banking Committee, a key step toward what would be the first Senate vote on the measure.
The bipartisan proposal would ensure that legal cannabis businesses have access to critical banking and financial services.

Aaron Smith, chief executive officer of the National Cannabis Industry Association, speaks during a news conference on the Safe Banking Act outside the US Capitol in Washington, D.C., US, on Wednesday, Sept. 14, 2022.
Ting Shen | Bloomberg | Getty Images

A group of bipartisan lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in the House and Senate on Wednesday, after the legislation designed to free up banking services for the cannabis industry stalled in last year’s Congress.
The bill, which has been tweaked since last session, was introduced by Sen. Jeff Merkley, D-Ore., Sen. Steve Daines, R-Mont., Rep. Dave Joyce, R-Ohio, and Rep. Earl Blumenauer, D-Ore.

If the critical banking and financial protections advance through committees, they could see a vote on the Senate floor for the first time. The bill, which has always had strong bipartisan support, passed in the House seven times previously.
“For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate,” Merkley said in a statement. “Let’s make 2023 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, their businesses, and their communities safe.”
Senate Majority Leader Chuck Schumer, D-N.Y., expressed his support for the legislation on Thursday and said he would work to make sure the legislation includes criminal justice provisions when it reaches the floor.
Cannabis stocks Curaleaf Holdings, Trulieve Cannabis Corp, and Terrascend Corp all rose by double-digit percentages on Thursday. The bipartisan nature of the SAFE Banking Act’s reintroduction appeared to boost hopes of more relief to come in the industry.
“The SAFE Banking Act will provide urgently needed relief to cannabis businesses of all sizes and act as a stepping stone to broader reforms,” said Matt Darin, CEO of multistate cannabis operator Curaleaf, in a statement after the bill’s reintroduction.

Under current federal law, banks and credit unions face federal prosecution and penalties if they provide services to legal cannabis businesses because cannabis is still a Schedule I substance, the same classification as heroin and LSD. Schedule I substances are defined as drugs with no currently accepted medical use and a high potential for abuse, according to the federal Drug Enforcement Administration.
Without access to financial services, state legal cannabis businesses are forced to operate their businesses solely using cash, which can result in robbery, money laundering, and organized crime.
“This legislation will save lives and livelihoods. It is past time that Congress addresses the irrational, unfair, and unsafe prohibition of basic banking services to state-legal cannabis businesses,” said Blumenauer, founder and co-chair of the Congressional Cannabis Caucus. 

The weeds

Key components of the bill protect banks that work with state-legal cannabis businesses from being penalized by federal regulators.
Under SAFE Banking, federal regulators are barred from taking several punitive steps against banks, according to the legislation:

Prohibit, penalize or discourage a bank from providing financial services to legal cannabis businesses
End or limit a bank’s federal deposit insurance if the bank provides those services
Recommend or incentivize a bank to halt or downgrade providing banking services to cannabis businesses
Take any action on a loan to an owner or operator of a cannabis business

The legislation also creates a safe harbor from criminal prosecution, liability and asset forfeiture for banks, their officers or employees. Moreover, a new component includes the safe harbor statute extended for underserved communities who face challenges in accessing capital and provide affordable access to financial services.

Executives sound off

SAFE Banking, which has 38 additional cosponsors in the Senate and eight additional cosponsors in the House, will be a boon for an industry that has seen a downturn. Top cannabis executives have pushed Congress for years to take action on banking and other federal reforms needed to fortify their businesses.
Brady Cobb, the CEO of Sunburn Cannabis, a leading Florida dispensary chain, said in a statement, “All eyes should be on the Senate Banking Committee to call the measure up for its first hearing in the Senate.”
“SAFE will serve as a springboard for the US banking and financial sectors to meaningfully participate in this budding industry, and most importantly it will significantly reduce the safety risks faced by the thousands of employees of this all cash business,” he said.
Morgan Paxhia, co-founder and managing director at Poseidon, a cannabis investment firm, called the measure’s reintroduction a major advancement for the industry.
“We have seen many firsts in legal cannabis and that now includes the scheduling of a hearing of cannabis banking reform in the Senate,” added Paxhia. “This is an historic step for the Senate.” More

Gap plans to lay off 1,800 employees across its workforce in an effort to streamline operations and cut costs.
The cuts will affect headquarter positions and those in “upper field” roles, or workers who hold leadership titles outside of a headquarter office.
The layoffs will “release untapped potential” across Gap’s brands – its namesake line, Old Navy, Banana Republic and Athleta, interim CEO Bob Martin said. 

The Gap logo is displayed at a Gap store on April 25, 2023 in Los Angeles, California.
Mario Tama | Getty Images

Gap will lay off about 1,800 employees as part of a broad effort to cut costs and streamline operations, the company said Thursday. 
The cuts, first revealed on Tuesday, are more than three times larger than the 500 layoffs it announced in September. The layoffs will affect roles at Gap’s headquarter locations along with upper field positions, or workers such as regional store leaders who hold leadership titles outside of a headquarter office, the company said.

The job cuts come as the apparel retailer struggles to return to profitability while sales sag. The layoffs are expected to result in annualized savings of $300 million, Gap’s interim CEO Bob Martin said in a statement. 
“We are taking the necessary actions to reshape Gap Inc. for the future – simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience,” Martin said. 
“These changes include the consistent brand leadership structures we announced last month aimed at flattening the organizational structure to improve the quality and speed of decision-making, while in turn reducing overhead expense,” he added.
The layoffs will “release untapped potential” across Gap’s brands – its namesake line, Old Navy, Banana Republic and Athleta, Martin said. 
“This means saying goodbye to friends and team members we care about, and I represent the collective voice of the company in expressing a sincere appreciation to every employee for the dedication, energy, and heart they have given to Gap Inc.,” Martin said. 

During an earnings call in March, Martin said the company planned to decrease management layers. But he did not say at the time how many positions would be cut. 
He noted during the call the apparel retailer’s staff has been “dampened by a complicated organizational structure, bureaucracy, and outdated processes” that have held the company back. 
As of late January, Gap employed about 95,000 staff members, 81% of which work in retail locations, according to securities filings. About 9% of its global staff work in headquarter locations. 
The retailer has been grappling with a string of losses, inventory woes and the absence of a permanent CEO. 
In the three months that ended Jan. 28, Gap posted $4.24 billion in sales — a 6% decrease from the prior-year period — and a net loss of $273 million, or 75 cents a share. It reported annual net losses in both 2020 and 2022. 
Gap’s stock has fallen about 17% this year. Shares are hovering around $9, giving the company a market cap of about $3.4 billion.  More

Patients who took Eli Lilly’s weight loss drug tirzepatide lost up to 34 pounds, or 16% of their body weight, the company said in clinical trial results.
Patients in the placebo group who did not take the pill lost 7 pounds on average.
Eli Lilly plans to complete its application for FDA approval in the coming weeks and expects regulatory action as early as later this year.

A pharmacist displays a box of Mounjaro, a tirzepatide injection drug used for treating type 2 diabetes and made by Lilly at Rock Canyon Pharmacy in Provo, Utah, May 29, 2023.
George Frey | Reuters

Patients who took Eli Lilly’s weight loss drug tirzepatide lost up to 34 pounds on average, or 16% of their body weight, the company said in clinical trial results released Thursday.
Eli Lilly plans to complete its application for Food and Drug Administration approval of the drug in the coming weeks and expects regulatory action as early as later this year. The FDA approved tirzepatide for Type 2 diabetes last year, but the drug is not cleared for weight loss.

The approval would open “up the opportunity for many more people to benefit from tirzepatide,” Eli Lilly CEO David Ricks said Thursday on CNBC’s “Squawk Box.” He added that the drug sets a “new bar for weight loss and people with diabetes.” 
The data come as companies try to capitalize on increased consumer demand for weight-loss treatments. Some experts have criticized the increased use of the drugs as a potentially damaging extension of diet culture.
The phase three trial followed 938 adults who were overweight and had type 2 diabetes. Patients who took a 10 milligram version of the injection after 72 weeks lost nearly 30 pounds on average, while those who took 15 milligrams lost 34 pounds on average.
Patients in the placebo group who did not take the pill lost an average of seven pounds.
About 86% of patients in the trial who took tirzepatide lost at least 5% of their body weight, compared to about 30% in the placebo group

The level of average weight loss seen in the trial “has not been previously achieved in phase 3 trials for obesity or overweight and type 2 diabetes,” Jeff Emmick, Eli Lilly’s senior vice president of product development, said in a statement.
Tirzepatide also reduced levels of A1C, which measures the body’s average blood sugar level over the past three months. Higher levels of A1C are associated with a higher risk of diabetes complications.
Eli Lilly said it will continue to monitor results from the trial. The company will present the findings at a medical conference in June and submit the research to a peer-reviewed journal.

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Drugs like tirzepatide and rival Novo Nordisk’s Ozempic and Wegovy catapulted to the national spotlight in recent years for being weight loss “miracles.”
Social media influencers, Hollywood celebrities and even 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.
Tirzepatide works by mimicking two naturally produced hormones in the gut called GLP-1 and GIP. The hormones signal to the brain when a person is full, suppressing their appetite.
Ozempic and Wegovy only target GLP-1. Patients who took Ozempic in a 2021 clinical trial lost nearly 15% of their body weight.
Eli Lilly earlier this month registered a new clinical trial that will pit tirzepatide against Wegovy in 700 patients who have obesity or are overweight with weight-related health conditions. The company expects to complete the study in 2025. More