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    Adidas warns of first annual loss in three decades and cuts dividend after Ye split

    The German sportswear giant posted a fourth-quarter operating loss of 724 million euros and a net loss from continuing operations of 482 million euros.
    Adidas scrapped its highly lucrative partnership with rapper and fashion designer Ye — formerly known as Kanye West, the face of Yeezy — in October after he made a series of antisemitic comments.

    “The numbers speak for themselves. We are currently not performing the way we should”, Adidas CEO Bjørn Gulden said in a press release.
    Jeremy Moeller / Contributor / Getty Images

    Adidas on Wednesday reported a big fourth-quarter loss and slashed its dividend after the costly termination of its partnership with Kanye West’s Yeezy brand in October.
    The German sportswear giant posted a fourth-quarter operating loss of 724 million euros ( $763 million ) and a net loss from continuing operations of 482 million euros. The company will recommend a dividend of 70 euro cents per share at its May 11 annual general meeting, down from 3.30 euros per share in 2021.

    Currency-neutral revenues declined by 1% in the fourth quarter as a result of the termination of the company’s Yeezy partnership and will decline at a high-single-digit rate across 2023, the company said.
    Adidas is projecting a full-year operating loss of 700 million euros in 2023, marking its first annual loss for 31 years. The estimate includes a hit of 500 million euros in potential Yeezy inventory write-off and 200 million euros in “one-off costs.”
    Adidas scrapped its highly lucrative partnership with rapper and fashion designer Ye — formerly known as Kanye West, the face of Yeezy — in October, after he made a series of antisemitic comments. The company had previously flagged a severe hit to revenues, if it were unable to shift its huge remaining stock of unsold Yeezy footwear.
    The company said underlying operating profit will be “around break-even level,” reflecting the loss of 1.2 billion euros in potential sales from unsold Yeezy stock.

    New Adidas CEO Bjørn Gulden, who took over from Kasper Rørsted at the turn of the year, said in a statement Wednesday that 2023 will be a “transition year,” as the company looks to reduce inventories and lower discounts in order to return to profitability in 2024.

    “Adidas has all the ingredients to be successful, but we need to put our focus back on our core: product, consumers, retail partners, and athletes,” Gulden said.
    “Motivated people and a strong adidas culture are the most important factors to build a unique adidas business model again. A business model built to focus on serving our consumer through both wholesale and DTC, that balances global direction with local needs, that is fast and agile, and of course, always invests in sports and culture to keep building credibility and brand heat.”
    Over the whole of 2022, currency-neutral revenues were up 1% and grew in all markets except greater China, with double-digit increases observed in North America and Latin America. Operating profit came in at 669 million euros, while net income from continuing operations was 254 million euros.
    “Inventory write-offs and one-off costs relating to the termination of its Yeezy partnership in October have cost Adidas dearly, resulting in an operating loss in the fourth quarter and a decline in sales. On top of that, sales in China fell sharply last year amid Beijing’s strict lockdown measures,” noted Victoria Scholar, head of investment at Interactive Investor.
    “Plus Adidas has been dealing with increased supply chain costs post pandemic and the macroeconomic backdrop which has weakened the consumer and prompted heavy discounting to attract customers.”
    Adidas shares were down 1.7% during morning trade in Europe, but remain up more than 11% on the year.

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    No exit ramp for Fed’s Powell until he creates a recession, economist says

    Fed Chairman Jerome Powell told lawmakers on Tuesday that stronger-than-expected economic data in recent weeks suggests the “ultimate level of interest rates is likely to be higher than previously anticipated.”
    TS Lombard Chief U.S. Economist Steven Blitz suggests the U.S. Federal Reserve cannot estimate its rate ceiling until the economy enters a recession.
    Goldman Sachs raised its terminal rate target range forecast to 5.5-5.75% on Tuesday in light of Powell’s testimony, in line with current market pricing according to CME Group data.

    Federal Reserve Chair Jerome H. Powell testifies before a U.S. Senate Banking, Housing, and Urban Affairs Committee hearing on “The Semiannual Monetary Policy Report to the Congress” on Capitol Hill in Washington, March 7, 2023.
    Kevin Lamarque | Reuters

    The U.S. Federal Reserve cannot disrupt its cycle of interest rate increases until the nation enters a recession, according to TS Lombard Chief U.S. Economist Steven Blitz.
    “There is no exit from this until he [Fed Chair Jerome Powell] does create a recession, ’til unemployment goes up, and that is when the Fed rates will stop being hiked,” Blitz told CNBC’s “Squawk Box Europe” on Wednesday.

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    He stressed that the Fed lacks clarity on the ceiling of interest rate increases in the absence of such an economic slowdown.
    “They have no idea where the top rate is, because they have no idea where inflation settles down without a recession.”
    Powell told lawmakers on Tuesday that stronger-than-expected economic data in recent weeks suggests the “ultimate level of interest rates is likely to be higher than previously anticipated,” as the central bank looks to drag inflation back down to Earth.
    The Federal Open Market Committee’s next monetary policy meeting on March 21 and 22 will be critical for global stock markets, with investors closely watching whether policymakers opt for an interest rate hike of 25 or 50 basis points.
    Market expectations for the terminal Fed funds rate were around 5.1% in December, but have risen steadily. Goldman Sachs lifted its terminal rate target range forecast to 5.5-5.75% on Tuesday in light of Powell’s testimony, in line with current market pricing according to CME Group data.

    Bond yields spiked, and U.S. stock markets sold off sharply on the back of Powell’s comments, with the Dow closing nearly 575 points lower and turning negative for 2023. The S&P 500 slid 1.53% to close below the key 4,000 threshold, and the Nasdaq Composite lost 1.25%

    “There’s going to be a recession, and the Fed is going to push the point and they’re gonna get the unemployment rate to at least 4.5%, in my guess it probably ends up getting up to as high as 5.5%,” Blitz said.
    He noted that there are “rumblings” of an economic slowdown in the form of layoffs in the finance and tech sectors and a stalling housing market. Along with weakness in U.S. stock market, Blitz suggested an “asset crunch and the beginnings of the potential for a credit crunch,” in the form of banks pulling back on lending, could be underway.
    “Either you get a recession mid-year and the top rate is 5.5% or there is enough momentum, the January numbers are right, and the Fed keeps going and if they do keep going, my guess is that the Fed’s going to get up to 6.5% on the funds rate before things really start to slow down and reverse,” he said.
    “So in terms of risk assets, it’s not a question of whether, it’s really a question of when, and the longer this thing goes, the higher the rate has to get to.”
    The January consumer price index rose 0.5% month-on-month as rising shelter, gas and fuel prices took their toll on consumers, indicating a potential reversal of the inflation slowdown seen in late 2022.
    The labor market remained red hot to start the year, with 517,000 jobs added in January and the unemployment rate hitting a 53-year low.
    The February jobs report is due from the Labor Department on Friday and the February CPI reading is slated for Tuesday.

    In the research note announcing its increase to the terminal rate forecast, Goldman Sachs said that it expects the median dot in the March Summary of Economic Projections to rise by 50 basis points to 5.5-5.75% regardless of whether the FOMC opts for 25 or 50 basis points.
    The Wall Street giant also expects the data ahead of the March meeting to be “mixed but firm on net,” with JOLTS job openings falling by 800,000 to provide reassurance that rate hikes are working, alongside an above-consensus forecast for a 250,000 payroll gain but a soft 0.3% rise in average hourly earnings.
    Goldman also forecasts a firm 0.45% monthly increase in core CPI in February, and said that the combination of likely data creates “some risk that the FOMC could hike by 50bp in March instead of 25bp.”
    “In recent months we have argued that the drag on GDP growth from last year’s fiscal and monetary policy tightening is fading, not growing, and that this means that the key risk for the economy is a premature reacceleration, not an imminent recession,” Goldman economists said.
    “Last weekend we noted that consumer spending in particular poses upside risk to growth that, if realized, might lead the FOMC to hike by more than currently expected in order to tighten financial conditions and keep demand growth below potential so that labor market rebalancing stays on track.”

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    China plans to revamp finance, tech oversight

    China plans to overhaul its financial regulatory system by consolidating aspects of the central bank and securities regulator under a new entity, while doing away with the existing banking regulator.
    That’s according to a draft released late Tuesday as part of China’s ongoing annual parliamentary meeting.
    The latest plan also calls for the establishment of a National Data Bureau and greater Chinese Communist Party oversight of scientific research.

    Delegates and officials gather at The Great Hall of the People in Beijing on March 5, 2023, for the opening of the annual National People’s Congress.
    Lintao Zhang | Getty Images News | Getty Images

    BEIJING — China plans to overhaul its financial regulatory system by consolidating aspects of the central bank and securities regulator under a new entity, while doing away with the existing banking regulator.
    That’s according to a draft released late Tuesday as part of China’s ongoing annual parliamentary meeting, known as the “Two Sessions.” Delegates are set to approve a final version on Friday.

    The changes follow similar adjustments to China’s government structure that have occurred roughly every five years over the last few decades. The moves also come as Beijing has increased regulation on parts of the economy that had developed quickly, with little oversight.
    The latest plan calls for the establishment of a National Financial Regulatory Administration, which replaces the China Banking and Insurance Regulatory Commission and expands its role.
    The new regulator is set to oversee most of the financial industry — except for the securities industry. Responsibilities include protecting financial consumers, strengthening risk management and dealing with violations of the law, the draft said.

    The China Securities Regulatory Commission’s investor protection responsibilities are set to shift to the new financial regulator.
    The People’s Bank of China’s responsibilities for protecting financial consumers and regulating finance holding companies and other groups are also set to shift to the new administrator.

    “China’s regulatory reforms will strengthen regulators’ capability to establish and enforce a unified regulatory framework, as well as reduce the room for regulatory arbitrage,” David Yin, vice president, senior credit officer, at Moody’s Investors Service, said in a note.
    “In addition, the reform targets to strengthen the central government’s control of financial regulation at the local government level, which will improve regulatory enforcement and reduce local governments’ influence on financial institutions,” Yin said.
    Separately, the draft proposed the PBoC consolidate its local branches with greater central control, and changing the securities regulator’s designation within the State Council from one similar to the council’s Development Research Center to that of the customs agency.
    “China’s consolidated financial regulatory body is [a] paradigm shift to ramp up oversight of its vast financial system,” said Winston Ma, adjunct professor of law at New York University.

    A new data bureau

    The proposed changes also establish a new National Data Bureau for coordinating the establishment of a data system for the country and promoting the development of the so-called digital economy, which includes internet-based services.
    The proposal did not go into much detail, but noted the new bureau would take on some of the cybersecurity regulator’s responsibilities.
    Ma said he expects the new regulatory agencies would develop new approval processes for data-intensive internet companies wanting to go public overseas.
    The National Data Bureau is set to operate under the National Development and Reform Commission, which is the economic planning department of the State Council — the Chinese government’s top executive body.

    Party-state relationship

    The proposed changes to the State Council come as the ruling Communist Party of China is expected to significantly increase its direct control of the government.
    Party leaders already fill top government roles. For example, Xi Jinping is general secretary of the party and president of the People’s Republic of China.
    Xi is set to formally gain an unprecedented third term as president on Friday.
    Over the 10 years of his first two terms, Xi has pushed for unifying the country under the Chinese Communist Party and “Xi Jinping Thought.”
    Further changes to increase the party’s control of China’s government are expected to be revealed this month. The draft of changes to the State Council’s structure cited a document — that translates literally from the Chinese text as “Party State Institutional Reform Plan” — passed last week at a regular meeting of the Chinese Communist Party’s Central Committee.

    Changes for tech

    Changes to the party and state institutions “strengthen the centralized and unified leadership of the Chinese Communist Party’s Central Committee over science and technology work,” State Councilor and Secretary-General of the State Council Xiao Jie said in a supplementary document explaining the proposed structural changes. That’s according to a CNBC translation of the Chinese text.
    The changes “establish the Central Science and Technology Commission,” whose responsibilities are borne by the restructured Ministry of Science and Technology, Xiao said.
    The State Council restructuring draft released Tuesday led with plans to overhaul the Ministry of Science and Technology, to strengthen its work in areas such as research and national laboratory construction.

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    China must work faster to achieve self-reliance in tech “in the face of severe international scientific and technological competition and external containment and suppression,” Xiao said.
    The Biden administration has increased restrictions on the ability of Chinese businesses to obtain critical tech for the use and development of high-end semiconductors.
    The new Ministry of Science and Technology’s responsibilities include resource allocation and supervision, while oversight of agriculture science and biotech are set to be moved to other ministries, Xiao said in the supplementary document.
    High-tech development and industrialization plans fall under the Ministry of Industry and Information Technology, the document said.

    State-owned enterprises

    The proposed changes to the State Council’s structure also called for separating the ownership and operation of state-owned institutions that are overseen by central government financial management, Citi analysts pointed out.
    They said they see the move as further leveling the playing field between state-owned and non-state-owned enterprises.

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    BlackRock says the Federal Reserve could hike interest rates to a peak of 6%

    “We think there’s a reasonable chance that the Fed will have to bring the Fed Funds rate to 6%, and then keep it there for an extended period” BlackRock’s Rick Rieder wrote.
    The probability of a half-point hike moved to 73.5% on Asia’s Wednesday afternoon, according to the CME Group’s FedWatch tracker of fed funds futures bets.

    Rick Rieder, managing director and chief investment officer of fundamental fixed income for BlackRock Inc., speaks during the Institute of International Finance Annual Membership Meeting in Washington, D.C., U.S., on Friday, Oct. 11, 2013.
    Bloomberg | Bloomberg | Getty Images

    The world’s largest asset manager sees the U.S. federal funds rate peaking at 6% after Fed Chair Jerome Powell warned interest rates are likely to head higher than the central bank previously expected.
    “We think there’s a reasonable chance that the Fed will have to bring the Fed Funds rate to 6%, and then keep it there for an extended period to slow the economy and get inflation down to near 2%,” BlackRock’s chief investment officer of global fixed income Rick Rieder wrote in response to Powell’s testimony before the Senate Banking Committee on Tuesday.

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    The economy is more resilient than expected, Rieder said, pointing to the most recent jobs report and consumer price index reading.
    “This is partly due to the fact that today’s economy is no longer as interest-rate sensitive as that of past decades, and its resilience, while a virtue, does complicate matters for the Fed,” he wrote in the note.

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    BlackRock’s call for a terminal rate of 6% comes as Morgan Stanley economists said Powell’s commentary opened the door to resume to larger hikes of 50 basis points.
    In February, the central bank raised rates by 25 basis points, bringing the federal funds rate to a range of 4.50% to 4.75%.
    The probability of a half-point hike moved to 73.5% in Asia’s Wednesday afternoon, according to the CME Group’s FedWatch tracker of fed funds futures bets. A 50 basis point hike would bring the rate to a range of 5% to 5.25%.

    The Federal Reserve is slated to meet on March 21-22.
    Emphasizing the U.S. economy’s resilience, Rieder compared it to polyurethane, a durable material described by the American Chemistry Council as “flexible foam.”
    “We’ve recently likened the U.S. economy to polyurethane, which is a remarkable material that displays flexibility and adaptability, but also durability and strength,” he wrote in the note.
    “The material’s ability to be stretched, bent, stressed and flexed without breaking, while in fact returning to its original condition, is what makes it so chemically unique,” he said.
    In its latest report, the U.S. reported an increase of 517,000 nonfarm payrolls in January, significantly exceeding market estimates, while the unemployment rate fell to 3.4%, the lowest level since May 1969.
    The next report is expected Friday and is likely to continue to show a resilient labor market despite the Fed’s aggressive rate hikes to tame inflation. Economists surveyed by Dow Jones estimate 225,000 jobs were added last month.
    – CNBC’s Patti Domm and Jeff Cox contributed to this report.

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    Rivian shares fall as EV maker looks to raise $1.3 billion amid growing demand concerns

    Rivian Automotive plans to raise $1.3 billion in cash via a sale of convertible notes.
    The EV maker had $12.1 billion on hand as of the end of 2022.
    Earnings reports from Rivian and fellow EV maker Lucid revealed concerns around demand for electric vehicles.

    The Rivian name is shown on one of their new electric SUV vehicles in San Diego, U.S., December 16, 2022.
    Mike Blake | Reuters

    Rivian Automotive plans to raise $1.3 billion in cash via a sale of convertible notes, joining a growing list of EV makers scrambling to hoard cash as demand falters.
    Shares of Rivian closed down over 14% on Tuesday.

    Rivian said late Monday it plans to sell the convertible notes — bonds that can be paid back with cash, stock or a mix of the two — to help fund the development and launch of its upcoming smaller R2 series of vehicles, now expected in 2026. The institutional investors purchasing the notes will have the option to buy additional notes worth up to $200 million, if they choose, above the initial $1.3 billion.
    Rivian isn’t in an urgent cash crunch, at least not yet. The EV maker had $12.1 billion on hand as of the end of 2022, it said during its fourth-quarter earnings presentation Feb. 28, enough to fund its operations through 2025. But it recently made a series of moves to conserve cash, laying off 6% of its workforce and pushing the R2 launch out a year.

    Rivian also said last week that it expects to produce 50,000 vehicles in 2023, fewer than the roughly 60,000 that Wall Street analysts had expected. That may be a sign that demand for its high-priced pickups and SUVs is falling short of its expectations.
    Lucid, another startup making high-priced electric vehicles, also guided investors to lower-than-expected production in 2023 and said that it plans to ramp up its marketing in coming months, suggesting that it too is seeing fewer orders than expected.
    Rivian raised nearly $12 billion when it went public in late 2021, helping it amass a cash hoard that still dwarfs that of most other EV startups. The company’s shares have lost over 80% of their value since the debut, though.

    Rivian said the convertible notes will qualify as “green bonds,” meaning they meet a set of criteria that tends to attract institutions willing to accept lower returns in exchange for supporting sustainable development.
    The notes will mature in March 2029. The interest rate and other terms will be decided when the offering is priced.

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    Rupert Murdoch suggested Fox News hosts ‘went too far’ with election fraud claims

    Dominion and Fox released hundreds of pages of evidence gathered in the $1.6 billion lawsuit, including testimony from depositions, text messages, and emails.
    Court papers show further communications from Fox Chairman Rupert Murdoch questioning whether the TV network hosts “went too far.”
    Fox said the evidence it gathered showed Dominion has been “using distortions and misinformation in their PR campaign against Fox News.”

    A billboard truck seen outside Fox News HQ. Members of the activist groups Truth Tuesdays and Rise and Resist gathered at the weekly FOX LIES DEMOCRACY DIES event outside the NewsCorp Building in Manhattan, this time with a billboard truck.
    Erik Mcgregor | Lightrocket | Getty Images

    More revelations from Fox Corp. Chairman Rupert Murdoch’s testimony, as well as evidence gathered from Fox executives and TV hosts in the months following the 2020 election, came to light on Tuesday as part of Dominion Voting Systems’ $1.6 billion defamation lawsuit.
    Hundreds of pages of gathered evidence from both sides – including full excerpts of testimony from depositions, text messages and emails – were published on Tuesday, providing glimpses into the back-and-forth at the right-wing TV network in the months following the 2020 election.

    “Maybe Sean [Hannity] and Laura [Ingraham] went too far. All very well for Sean to tell you he was in despair about Trump but what did he tell his viewers?” Murdoch said in an email to Fox News CEO Suzanne Scott on Jan. 21, 2021, in an apparent reference to Fox News hosts Sean Hannity and Laura Ingraham. The exchange came 15 days after the Jan. 6, 2021, Capitol insurrection.
    A Delaware judge ordered the documents unsealed. While portions of the depositions and evidence have been released in recent weeks, Tuesday’s filings are the most extensive revelations regarding private communications at Fox Corp. and Fox News.

    Dominion has argued in its suit that Fox and its ring-wing cable TV channels and talent falsely claimed that its voting machines rigged the results of the 2020 election. 
    Fox News on Tuesday said the documents it filed showed “Dominion has been caught red handed using more distortions and misinformation in their PR campaign to smear FOX News and trample on free speech and freedom of the press. We already know they will say and do anything to try to win this case, but to twist and even misattribute quotes to the highest levels of our company is truly beyond the pale.”  
    The company points to Fox Corp. CEO Lachlan Murdoch’s testimony about being “kept awake at night” regarding ratings and competition following the 2020 election. Dominion has said and pointed to text messages between talent regarding fears about audience following Fox’s election night call of Arizona for Joe Biden. Lachlan Murdoch said in general ratings were something that have kept him up at night.

    “You know, you get a few gray hairs from being awake at – sports ratings or news ratings or entertainment ratings are probably the worst so,” Lachlan Murdoch said, according to court papers.
    A spokesperson for Dominion said Thursday: “The emails, texts, and deposition testimony speak for themselves. We welcome all scrutiny of our evidence because it all leads to the same place — Fox knowingly spread lies causing enormous damage to an American company.”
    Trump has repeatedly spread false claims that the 2020 election between him and now-President Joe Biden was rigged. He attempted to pressure a top official in Georgia to “find” votes for him have become the subject of a criminal probe in the state, which Trump lost to Joe Biden. 
    In an exchange between host Maria Bartiromo and former top Trump advisor Steve Bannon, Bartiromo said she was “so depressed.”
    “I want to see massive fraud exposed Will he be able to turn this around. I told my team we are not allowed to say [president] elect at [all]. Not in scripts or banners on air. Until this moves through the courts,” Bartiromo said in a text message exchange. Bannon replied, “71 million voters will never accept Biden This process is to destroy is presidency before it even starts; IF it even starts.”
    Fox News has consistently denied that it knowingly made false claims about the election. It has alleged Dominion is “cherry picking” quotes from depositions and documents gathered through discovery. 
    Fox Corp. has also said in court papers that the past year of discovery has shown the media company played “no role in the creation and publication of the challenged statements – all of which aired on either Fox Business Network or Fox News Channel.” 
    Also Tuesday, attorneys for Dominion and Fox met before a Delaware judge to discuss next steps leading into the scheduled trial that is to begin in mid-April. Before then, Dominion and Fox will meet again in Delaware court on March 21 regarding their motions for summary judgement.

    ‘They endorsed’

    The exhibits filed to a Delaware court on Tuesday comes after weeks of court filings that have unveiled parts of the gathered evidence and depositions of Murdoch, other top Fox Corp. brass, as well as top talent.
    In the filings, some of which were released last week, Murdoch acknowledged that some of Fox’s top TV anchors parroted false claims in the months following the 2020 presidential election, and that some even endorsed the claims. 
    “Some of our commentators were endorsing it,” Murdoch said in his response during the deposition. “They endorsed.” 
    Court papers also show Murdoch and his son, Fox Corp. CEO Lachlan Murdoch, were close to Fox News CEO Suzanne Scott during the time regarding coverage on the network. Depositions and evidence such as text messages show personalities like Tucker Carlson, Hannity and Ingraham expressed disbelief in the claims being made on air. 
    The case is being closely watched by First Amendment watchdogs. Libel lawsuits are typically focused on one falsehood, but in this case Dominion cites a long list of examples of Fox’s cable channels and its hosts making false claims even after they were proven to be untrue. Media companies are often broadly protected by the First Amendment. 
    The lawsuit has also provided a window into what happens behind the scenes at Fox News, as well as other events tied to the 2020 election fraud claims that were covered on Fox’s networks.
    For instance, court filings show that Fox Corp. executives had vetoed Trump’s attempt to appear on the network’s air on the evening of Jan. 6, 2021, after a violent mob of Trump supporters attacked the Capitol in a bid to prevent Congress from confirming Biden’s victory.
    That evening, top Fox host Tucker Carlson texted his producer, calling Trump “a demonic force.”
    Court papers also show that Murdoch also said it was “wrong” for Carlson to host MyPillow CEO Mike Lindell, an ally of Trump who promoted conspiracy theories tied to the election, weeks after Jan. 6.
    Carlson, along with top anchors including Sean Hannity and Laura Ingraham, had expressed disbelief in what Sidney Powell, a pro-Trump attorney who had aggressively promoted claims of election fraud, had said at the time, too.
    On Tuesday, Senate Majority Leader Chuck Schumer, a Democrat from New York, blasted Fox News host Tucker Carlson for airing Jan. 6 footage on Monday in a way that portrayed it as a peaceful visit to the U.S. Capitol. Schumer also criticized House Speaker Kevin McCarthy, R-Calif., for giving Carlson and Fox News exclusive access to 44,000 hours of Capitol security footage.
    Meanwhile, Schumer and House Minority Leader Hakeem Jeffries, D-N.Y., last week sent a letter to Murdoch and Fox News leadership, calling on them “to stop spreading false election narratives and admit on the air that they were wrong to engage in such negligent behavior.” The letter was released in the days after further revelations in the case. 

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    WeightWatchers stock surges 70% after company agrees to buy obesity treatment platform

    WW International’s stock surged after the company said it agreed to buy Sequence, a telehealth platform that helps treat obesity.
    WeightWatchers has struggled over the past year as it attempted to adapt its weight-loss messaging for wellness culture.
    The trend of using obesity medications for weight loss has led to a shortage for those who use it to treat conditions like diabetes.

    Shares of WW International, also known as WeightWatchers, skyrocketed Tuesday after the company said it planned to buy Sequence, a telehealth platform that provides treatment for obesity.
    The stock closed 79% higher on Tuesday. Its market value stood at more than $488 million.

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    “It is our responsibility, as the trusted leader in weight management, to support those interested in exploring if medications are right for them,” WW CEO Sima Sistani said in a Monday announcement.
    Tuesday’s jump follows a year of sagging performance for the stock. Shares of the company were down 57% over the past year as it struggled to pivot to wellness and move away from weight loss.
    Sistani took over as chief executive at the end of February, steering the company back toward weight loss messaging.
    The Sequence announcement comes as companies across the weight loss industry look to offer obesity medications as a pathway to customers looking to shed pounds.
    The trend has led to a shortage in medications like Ozempic, which are commonly prescribed for Type 2 diabetes.

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    Used vehicle prices rising at an unseasonably strong rate

    Cox Automotive on Tuesday reported wholesale used vehicle prices increased 4.3% in February from January — marking the largest increase between the two months since 2009.
    Although the prices were were down 7% from inflated levels a year earlier, they’re trending back toward record levels, according to Cox’s Manheim Used Vehicle Value Index.

    DETROIT — Consumers hoping for a deal this spring on a used car or truck might be out of luck, as wholesale used vehicle prices increased for a third consecutive month in February.
    Cox Automotive on Tuesday reported wholesale used vehicle prices increased 4.3% in February from January — marking the largest increase between the two months since 2009.

    Although the prices were down 7% from inflated levels a year earlier, they’re trending back toward record levels, according to Cox’s Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions.
    The unseasonably strong increase is bad news for consumers hoping for a deal, as well as for the Biden administration, which has seen pre-owned vehicle prices as a barometer for easing inflation.
    Federal Reserve Chairman Jerome Powell on Tuesday cautioned that interest rates are likely to head higher than central bank policymakers had expected, citing data that inflation has reversed the deceleration it showed in late 2022.

    Higher interest rates mean vehicles become less affordable for consumers, who have been dealing with record-high new and used vehicle prices for several years now.
    Cox reports the average listed price of a used vehicle was $26,510 in January, the most recent data available, down from record highs last year of more than $28,000. Retail prices for consumers traditionally follow changes in wholesale prices.

    Cox estimates that used vehicle retail sales declined 5% from January to February and were down 9% from a year earlier.
    Used vehicle prices have been elevated since the start of the coronavirus pandemic, as the global health crisis, combined with supply chain issues, caused production of new vehicles to sporadically idle. That led to a low supply of new vehicles and record-high prices amid resilient demand. The costs and scarcity of inventory led consumers to buy used vehicles, increasing those prices as well.

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