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    Eli Lilly’s Zepbound and Mounjaro now available in U.S. after shortages, FDA says

    All doses of Eli Lilly’s highly popular weight loss injection Zepbound and diabetes drug Mounjaro are now available in the U.S., according to an update on the U.S. Food and Drug Administration’s drug shortage database.
    The update comes one day after Eli Lilly CEO David Ricks said shortages of Mounjaro and Zepbound would end “very soon.” 
    Demand for weight loss and diabetes drugs has trounced supply for months, pushing Eli Lilly and its rival Novo Nordisk to invest billions to ramp up manufacturing. 

    An injection pen of Zepbound, Eli Lilly’s weight loss drug, is displayed in New York City on Dec. 11, 2023.
    Brendan McDermid | Reuters

    All doses of Eli Lilly’s highly popular weight loss injection Zepbound and diabetes drug Mounjaro are now available in the U.S., according to an update on the U.S. Food and Drug Administration’s drug shortage database on Friday. 
    A previous update said some doses of the treatments were still in short supply. Some doses of Mounjaro have been in shortage since as early as 2022, while doses of Zepbound joined the FDA’s shortage list earlier this year following its U.S. approval in November. 

    Demand for weight loss and diabetes drugs has trounced supply for months, pushing Eli Lilly and its rival Novo Nordisk to invest billions to ramp up manufacturing. 
    The FDA’s update comes one day after Eli Lilly CEO David Ricks told Bloomberg that the shortages of Mounjaro and Zepbound would end “very soon.” 
    “I think actually today or tomorrow we plan to exit that process,” he told the outlet in an interview. 
    A spokesperson for Eli Lilly did not immediately respond to CNBC’s request for comment on the FDA’s update on Friday. 
    All doses of Novo Nordisk’s diabetes injection Ozempic are available in the U.S. as of Friday, according to the FDA’s database. Meanwhile, the FDA said some doses of Novo Nordisk’s weight loss drug Wegovy have limited supply.

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    Mortgage rates plunge to the lowest level in more than a year after weak employment report

    The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% Friday, according to Mortgage News Daily.
    The drop followed a weaker-than-expected monthly employment report, which sent bond yields falling fast.
    The recent high on the 30-year fixed mortgage was 7.52% in late April, and home sales have been falling ever since.

    A “For Sale” sign in front of a home in Arlington, Virginia, on Aug. 22, 2023.
    Andrew Caballero-Reynolds | AFP | Getty Images

    The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% Friday, according to Mortgage News Daily. That is the lowest rate since April 2023. The 15-year fixed rate fell to 5.89%, its lowest level since early May 2023.
    The drop followed a weaker-than-expected monthly employment report, which sent bond yields falling fast. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury.

    “Between [Federal Reserve Chair Jerome] Powell’s equivocal openness to ‘multiple cuts’ in 2024 on Wednesday and this morning’s sharply weaker jobs report (something Powell didn’t even know about on Wednesday), the more aggressive rate cut narrative is quickly coming into focus,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. 
    There are still two inflation reports and another employment report before the Fed’s September meeting, Graham noted, adding, “If they don’t offer strong counterpoints to recent data, the rate cut cycle has not only begun, but it will likely involve a certain sense of urgency.”
    The 30-year fixed rate started the week at 6.81%, so the drop in just the past five days is dramatic. The recent high was 7.52% in late April, and home sales have been falling ever since. Buyers were battling not just high interest rates, but also high home prices and a lack of supply. Supply has since improved, but prices are still overheated.
    The difference in just a few months is stark when it comes to affordability. In April, a buyer looking to purchase a $400,000 home with a 20% down payment and a 30-year fixed mortgage would have been facing a monthly payment of about $2,240, not including insurance and property taxes. Today, that monthly payment would be about $2,000. More buyers would also qualify for the loan at today’s lower rates.
    Mortgage applications to purchase a home have been running about 15% below where they were at this time last year, according to the Mortgage Bankers Association. This latest drop could kick-start demand.
    “The market is moving ahead of the Fed, bringing down longer-term rates including those for mortgages, which should lead to both more home purchases and a pickup in refinance activity,” wrote Mike Fratantoni, chief economist for the Mortgage Bankers Association, in a news release.

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    Why fear is sweeping markets everywhere

    How quickly the mood turns. Barely a fortnight ago stockmarkets were on a seemingly unstoppable bull run, after months of hitting new all-time highs. Now they are in free fall. America’s Nasdaq 100 index, dominated by the tech giants that were at the heart of the boom, has fallen by more than 10% since a peak in mid-July. Japan’s benchmark Topix index has clocked losses well into the double digits, dropping by 6% on August 2nd alone—its worst day since 2016 and, following a 3% decline on August 1st, its worst two-day streak since 2011. Share prices elsewhere have not been bludgeoned quite so badly, but panic is sweeping through markets (see chart 1). Wall Street’s “fear gauge”, the VIX index, which measures expected volatility through the prices traders pay to protect themselves from it, has rocketed to its highest since America’s regional-banking crisis last year (see chart 2). More

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    Delta CEO offers employees free flights after CrowdStrike-Microsoft chaos

    Delta CEO Ed Bastian told employees that they would get two passes for travel anywhere the airline serves.
    Delta struggled to recover from the botched CrowdStrike software update that sparked an outage of Windows systems around the world.
    The more than 5,000 cancellations and reimbursements to customers cost Delta some $500 million, Bastian told CNBC earlier this week, and it plans to sue for damages.

    Ed Bastian, CEO of Delta Air Lines, speaks during a keynote at CES 2020 in Las Vegas on Jan. 7, 2020.
    Bridget Bennett | Bloomberg | Getty Images

    Delta Air Lines CEO Ed Bastian on Friday offered employees two free travel passes to thank staff members who were caught in massive disruptions last month sparked by a botched CrowdStrike software update that stranded thousands of customers and crew.
    Delta had more trouble than competitors in recovering from the outages that took thousands of Windows machines offline around the world, affecting industries from health care to banking.

    The carrier canceled more than 5,000 flights between July 19 and July 24, more than it did in all of 2019, according to FlightAware. Bastian said earlier this week that the incident cost the company about $500 million, a sum that is equal to about 40% of Delta’s second-quarter profit. A crew-tracking platform was a contributor to the cancellations and disruptions, the airline has said.
    Delta told CNBC’s “Squawk Box” on Wednesday that the airline had to manually reset 40,000 servers.
    The disruption “has been a humbling moment for our company,” Bastian said in his note on Friday, which was seen by CNBC. “I know it’s been extremely difficult, and I’m deeply sorry for what you have endured. An operational disruption of this length and magnitude is simply unacceptable — you and our customers deserve better.”
    Upward of 4,000 Delta flight attendants picked up more than 6,100 trips during the disruptions, receiving extra pay, according to another Delta staff memo on Friday.
    “Your efforts throughout have been nothing short of heroic,” Bastian told staff.

    The two “positive space” passes Bastian offered employees are confirmed seats like a customer would have, different from the free standby flying airline employees often do if there are available seats.
    The Delta organizing committee of the Association of Flight Attendants-CWA, which is in the middle of a campaign to unionize Delta’s flight attendants, said the offer of passes “just isn’t going to cut it.” The organizing committee, in a written statement, said airline management routinely makes “meager adjustments to keep the operation running without making changes significant enough to prevent a future meltdown.”
    Delta’s operation has since stabilized but the flight cancellations and delays stranded thousands and scarred Delta’s high reliability standings. Its executives frequently point out Delta’s successful work to win over both leisure and corporate customers who are willing to pay more to fly the carrier, marketing itself as a premium airline.
    A Delta spokesman earlier this week said the airline has processed “thousands” of refunds and reimbursement requests. 
    The U.S. Department of Transportation is investigating Delta’s disruptions, Transportation Secretary Pete Buttigieg said last week. Similar disruptions at other carriers, such as the massive 2022 holiday meltdown at Southwest Airlines after winter storms, have highlighted how technology issues can severely disrupt air travel.
    Bastian said Delta plans to pursue legal action against CrowdStrike and Microsoft “to recover our losses caused by the outage” and that it has hired law firm Boies Schiller Flexner.
    Microsoft declined to comment. CrowdStrike said it has “no knowledge of a lawsuit and have no further comment.” 

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    Jeff Bezos’ family office is making big investments in AI

    All of the investments made this year by Bezos’ family office — called Bezos Expeditions — have been in artificial intelligence, according to data provided to CNBC by FINTRX, a private wealth intelligence platform.
    Bezos Expeditions has always tilted heavily toward tech.
    Fully 70% of the family office’s investments are in technology, according to FINTRX.
    According to the UBS Global Family Office Report, AI is now the favorite investment category for family offices.

    Jeff Bezos at the Allen & Company Sun Valley Conference in Sun Valley, Idaho, on July 10, 2024.
    David Grogan | CNBC

    A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high net worth investor and consumer. Sign up to receive future editions, straight to your inbox.
    Jeff Bezos has been making headlines for his big-ticket purchases — from a $165 million estate in Los Angeles and a $177 million property on Miami’s Indian Creek to his $500 million yacht.

    Yet, Bezos’ biggest recent buying binge may be in artificial intelligence, through his family office.
    All of the investments made this year by Bezos’ family office — called Bezos Expeditions — have been in artificial intelligence, according to exclusive data provided to CNBC by FINTRX, a private wealth intelligence platform. While the amounts he invested are not disclosed, Bezos Expeditions participated in funding rounds totaling more than $1 billion.
    In January, the Amazon founder and executive chairman invested in the $73.6 million Series B round of Perplexity AI, an AI-powered search engine company. He also invested in a $63 million follow-on round in April. The value of Bezos Expeditions’ January investment likely doubled by April, since the company says its valuation soared to between $2.5 billion and $3 billion.
    In February, Bezos Expeditions invested in Figure AI, the humanoid-robot company that also counts Nvidia and Microsoft as investors. The venture round totaled $675 million.
    In July, he invested in a $300 million Series A round of Skild AI, which is focused on making AI systems for machines and robotics devices.

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    Bezos Expeditions has always tilted heavily toward tech. Fully 70% of his family office investments are in technology, according to FINTRX. The next-biggest category is consumer goods, at 16%, followed by financial services and manufacturing, both at 13%. But now, his primary focus seems to be AI.
    In a podcast interview in January, Bezos said AI tools are “not inventions, but discoveries” that will have profound effects on technology and change. “These powerful tools are much more likely to help us and save us even than they are to unbalance, hurt us and destroy us,” he said.

    Bezos has plenty of company among family offices. According to the UBS Global Family Office Report, AI is now the favorite investment category for family offices. More than three-quarters, or 78%, of family offices surveyed plan to invest in AI in the next two to three years — the most for any category.
    Amazon has also been ploughing money into AI. The company plans to invest more than $100 billion in data centers over the next decade and invested $4 billion in Anthropic, the AI safety and research firm.
    Bezos recently filed a stock-sale plan to unload another $5 billion worth of Amazon shares this year, after selling $8 billion worth earlier this year. With more than $13 billion in cash, Bezos will now have even more money to bet on the AI boom.

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    Berkshire’s mounting cash pile could top $200 billion as Buffett continues selling stock

    Berkshire Hathaway’s cash hoard is likely to exceed its previous record of $189 billion when it reports second-quarter earnings Saturday morning.
    Buffett has been offloading winning investments in Apple, Bank of America and BYD, making some believe the Oracle of Omaha has grown concerned that the bull market is overheated.
    Buffett confessed at Berkshire’s annual meeting in May that he is open to putting more capital to work, but high prices give him pause.

    Warren Buffett in Omaha, Nebraska, on May 3, 2024.
    David A. Grogan

    Berkshire Hathaway’s highly scrutinized cash pile could top $200 billion — more than the entire annual gross domestic product of Hungary — amid CEO Warren Buffett’s rare sale of some of his favorite stocks.
    The Omaha-based conglomerate is likely to say its cash hoard topped the previous record of $189 billion, set in the first quarter, when it reports second-quarter earnings Saturday morning. Berkshire’s results come at a time when Buffett has been offloading winning investments in Apple, Bank of America and BYD, leading some to believe the Oracle of Omaha has grown concerned that the bull market is overheated.

    “It does look like he wants to de-risk the portfolio a little bit,” Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder, said early in the week. “He’s trimming two top holdings and you don’t get anything more economically sensitive than the banks. The market seems so sure right now of a soft landing, and maybe he’s taking more of a contrarian view.”

    Arrows pointing outwards

    Berkshire has been a net seller of stocks for six straight quarters. Notably, Buffett trimmed his massive Apple bet by 13% in the first quarter for tax reasons after reaping enormous gains. The selling could have resumed in the second quarter as shares of the iPhone maker jumped 23% during the period.
    Meanwhile, in a surprising move, the conglomerate recently started dumping Bank of America shares, its second-biggest holding after Apple. Over the past 12 trading sessions, Berkshire has sold $3.8 billion of the Charlotte-based bank’s shares. The Bank of America sales began in July and will not be reflected in the second-quarter report.
    Buffett’s gigantic war chest has been earning sizeable returns due to the jump in Treasury yields over the past two years, but with interest rates set to decline from multiyear highs, his mounting cash pile could once again draw questions. If invested in three-month Treasury bills at about 5%, $200 billion in cash would generate about $10 billion a year, or $2.5 billion a quarter, but those returns are set to decline once the Federal Reserve starts lowering interest rates.
    “It’s just a question of how long they are going to sit on it,” Andrew Kligerman, TD Cowen’s Berkshire analyst, said in an interview, referring to Berkshire’s enormous cash pile.

    ‘Things aren’t attractive’
    Buffett, who turns 94 at the end of the month, confessed at Berkshire’s annual meeting in May that he is open to putting more capital to work, but high prices give him pause.
    “I think it’s a fair assumption that [cash holdings] will probably be about $200 billion at the end of this quarter,” the investment icon said at the time. “We’d love to spend it, but we won’t spend it unless we think [a business is] doing something that has very little risk and can make us a lot of money … it isn’t like I’ve got a hunger strike or something like that going on. It’s just that … things aren’t attractive.”

    Stock chart icon

    Berkshire Hathaway

    Weakness in noninsurance
    Investors will also closely study the quarterly results for Berkshire’s BNSF Railway and Berkshire Hathaway Energy utility business, which recently showed signs of weakness. BNSF is grappling with wage increases and revenue declines, while BHE faces pressure from being held liable for damage caused by wildfires.
    “The non-insurance side will weigh on the results, whether it’s the sluggish volumes in railroad coupled with higher labor costs, or utilities, which could put up a good quarter, but nobody’s going to be excited about that just given the liability exposure,” said TD Cowen’s Kligerman, who recently initiated research coverage of Berkshire with a hold rating.
    Conversely, Berkshire’s insurance business has been a bright spot, with a 185% year-over-year increase in insurance underwriting earnings in the first quarter.
    Shares of Berkshire have rallied more than 21% this year, outperforming the S&P 500’s 14% return, through Thursday. The conglomerate’s market capitalization has ballooned to $956 billion, close to joining the tiny number of U.S. stocks valued at $1 trillion or more.

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    NASA weighs Boeing vs. SpaceX choice in bringing back Starliner astronauts

    NASA management has been discussing this week whether it should return the agency’s astronauts on board Boeing’s misfiring Starliner capsule or send back the spacecraft empty.
    SpaceX’s Crew Dragon spacecraft would serve as the likely alternative to return the crew from the ISS.
    For its part, Boeing remains confident that Starliner can return the astronauts safely, and no decision has been made yet.
    But the concerns reveal that there is less confidence internally on Starliner than the agency has publicly disclosed.

    Boeing spacecraft Starliner is seen from the window of SpaceX’s Dragon capsule “Endeavour” on July 3, 2024 while docked with the International Space Station during the crew flight test.

    NASA management has been in deep discussion this week about whether to return the agency’s astronauts on board Boeing’s misfiring Starliner capsule or to go with the alternative of using a SpaceX craft to rescue the crew.
    The agency’s concern with Starliner — which flew NASA astronauts Butch Wilmore and Suni Williams to the International Space Station in early June — comes from not having identified a root cause for why multiple of the spacecraft’s thrusters failed during docking, a person familiar with the situation told CNBC.

    NASA this week has been discussing the possibility of returning Starliner empty and instead using SpaceX’s Crew Dragon spacecraft to return its astronauts. There is no consensus among those responsible for making the decision, that person said, calling the outcome of NASA’s ongoing discussions unpredictable given the variety of factors involved.
    The Starliner capsule “Calypso” has now been in space 59 days and counting. The mission is intended to serve as the final step toward proving Boeing’s long-delayed spacecraft is safe to fly lengthy crew missions to-and-from the ISS.
    The Boeing crew flight was initially planned to last a minimum of nine days. But it has been extended several times while the company and NASA conduct testing both back on the ground and in space in an attempt to understand the thruster problem.
    While NASA and Boeing leadership have publicly characterized the extensions as a data-gathering exercise, the concerns raised in recent days reveal that there is less confidence internally on whether Starliner is safe to return the astronauts than the agency has disclosed.

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    Ars Technica first reported NASA’s mixed opinion on Starliner’s situation. NASA previously noted that SpaceX serves as a backup but has sought to deemphasize that possibility, calling Boeing’s spacecraft the “primary option” for return.

    For its part, Boeing says it has the “flight rationale” to return Starliner with the astronauts on board, meaning the company believes the spacecraft can return without too much risk.
    “We remain confident in the Starliner spacecraft and its ability to return safely with crew. We are supporting NASA’s requests for additional data, analysis and data reviews to affirm the spacecraft’s safe undocking and landing capabilities,” a Boeing spokesperson said in a statement to CNBC on Friday.
    If Starliner returns empty, the most likely alternative would be to bring the astronauts back using SpaceX’s Crew Dragon by removing two astronauts from the Crew-9 mission — currently planned to launch four people in the coming weeks. That would open up two seats for Wilmore and Williams.

    Members of NASA’s Crew-9 stand by SpaceX’s Falcon 9 rocket. From left: NASA pilot Nick Hague,

    NASA did not respond to CNBC’s request for comment on the ongoing Starliner discussions, but told Ars Technica in a statement that the agency “is evaluating all options for the return.”
    “No decisions have been made and the agency will continue to provide updates on its planning,” NASA said.

    Trusting the thrust

    After testing this past weekend, NASA noted that 27 of Starliner’s 28 thrusters appear to be healthy. The thrusters, also known as its reaction control system, or RCS, engines, help the spacecraft move in orbit.
    But from an engineering perspective, not having a root cause for why five of the thrusters failed on the flight to the ISS means that risk remains for more thrusters to malfunction during the return flight.
    Boeing’s Mark Nappi, vice president of the Starliner program, said during a press conference on July 25 that testing of the thrusters has resulted in “very significant” findings that “are likely the root cause.” But despite that, the company has not identified the root cause yet.
    “We’re going to continue to take that hardware apart so that we can finally prove this,” Nappi said at the time.
    NASA now needs to decide if it’s willing to trust that the unknown issue with Starliner’s thrusters does not arise again, or even potentially cascade into other problems.

    An unpredictable outcome

    NASA’s lack of consensus arose when the Commercial Crew Program Control Board met earlier this week to discuss Starliner’s return. PCBs are a standard part of NASA’s decision-making process, dating back to the Space Shuttle era, and are an effort to make sure any risks can be elevated to the highest levels of the agency’s authority.
    The PCB, chaired by Commercial Crew program manager Steve Stich, did not come to a decision on whether to move forward with a flight readiness review, the next major agency step toward establishing a date for Starliner to return. The next PCB meeting is expected in the coming days, with NASA noting in a blog post on Thursday that return planning will continue into next week.
    If any members of the PCB dissent on the decision to return Starliner with crew, the decision would go up the chain of command until the dissent is addressed. As it stands, the discussions within the PCB do not have a predictable outcome as NASA personnel discuss the level of risk involved on returning crew with Starliner.

    Making a choice

    NASA often emphasizes that “astronaut safety remains the top priority” for the agency in making decisions about human spaceflight, an inherently risky endeavor.
    But the choice NASA faces has further ramifications, which threaten Boeing’s involvement in the agency’s Commercial Crew Program. Already, Boeing’s Starliner losses total more than $1.5 billion due to repeated setbacks and years of delays in developing the spacecraft.
    If NASA backs Boeing and returns Wilmore and Williams on Starliner, the agency is accepting a currently unquantifiable amount of risk. A major failure during the return, with the astronauts’ lives at stake, would put NASA leadership under pressure to end Boeing’s contract and involvement in the program.
    If NASA decides to send Starliner back empty, it’s a vote of no confidence in Boeing that may lead the company to cut its losses and withdraw from the program.
    Additionally, if NASA takes the SpaceX alternative and Starliner returns home without incident, the agency faces blowback from being seen as overreacting to a situation that it publicly declared for weeks was not a significant risk. More

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    Here’s where the jobs are for July — in one chart

    The information services sector was a notable weak spot for July, posting a job loss of 20,000.
    Professional and business services and financial activities experienced payroll declines of 1,000 and 4,000, respectively.

    People walk through a Manhattan mall on July 05, 2024 in New York City.
    Spencer Platt | Getty Images News | Getty Images

    Hiring in the U.S. slowed significantly last month, with information and financial sectors registering job losses.
    The information services sector was a notable weak spot for July, posting a job loss of 20,000. Professional and business services and financial activities experienced payroll declines of 1,000 and 4,000, respectively.

    “These sectors are known for creating higher-wage, higher-quality jobs,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market is clearly no longer normalizing. Further deterioration could set off a negative cycle of job losses, consumer spending declines, business revenue declines and more job cuts.”

    Nonfarm payrolls grew by just 114,000 for the month, well below the Dow Jones estimate for 185,000. The unemployment rate climbed to 4.3%, its highest since October 2021.
    To be sure, there were some relative bright spots.
    Health care again led in job creation, adding 55,000 to payrolls. Other notable gainers included construction (25,000), government (17,000), and transportation and warehousing (14,000). Leisure and hospitality, another leading gainer over the past few years, added 23,000.
    “The latest snapshot of the labor market is consistent with a slowdown, not necessarily a recession. However, early warning signs suggest further weakness,” said Jeffrey Roach, chief economist at LPL Financial.

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