Raphael Stevens

The FAA’s acting administrator, Billy Nolen, announced a safety review after a series of close calls involving major commercial airlines.
The FAA has called a meeting of airline and general aviation officials to discuss safety next month.

An American Airlines Airbus A319 airplane takes off past the air traffic control tower at Ronald Reagan Washington National Airport in Arlington, Virginia, January 11, 2023
Saul Loeb | AFP | Getty Images

Federal Aviation Administration acting Administrator Billy Nolen told a Senate panel Wednesday that new procedures will avoid a repeat of events that caused an outage and prompted it to halt departing air traffic last month for the first time since the Sept. 11, 2001, terrorist attacks.
The Senate Commerce Committee hearing comes amid growing safety concerns about aviation safety after several close calls involving major U.S. airlines. Nolen said in a memo on Tuesday that he is starting a safety review team and called a meeting of commercial and general aviation leaders next month.

Wednesday’s panel centers on an outage on Jan. 11 of the Notice to Air Missions system, or NOTAM, which provides safety alerts to pilots such as icy runways and other hazards. The system failed when a contractor unintentionally deleted files during an update, the FAA has said.
“After the incident, we implemented a synchronization delay to ensure that bad data from a database cannot affect a backup database,” Nolen said in prepared remarks ahead of the hearing. “Additionally, we have implemented a new protocol that requires more than one individual to be present and engaged in oversight when work on the database occurs.”
The FAA halted departing flights because of the outage for nearly two hours, but delays lasted throughout the day, just weeks after Southwest Airlines holiday travel meltdown in the wake of a severe winter storm.
Texas Sen. Ted Cruz, the committee’s highest-ranking Republican, pressed Nolen on improvements to the NOTAM system: “Can a single screwup ground air traffic nationwide?”
Nolen replied: “Could I sit here and tell you there will never be an issue on the NOTAM system? No, sir, I cannot. What I can say is we are making every effort to modernize and look at our procedures.”

Nolen is facing questions from senators on the recent close calls between large commercial aircraft in New York and Austin, Texas. On Tuesday, the National Transportation Safety Board said it is investigating what occurred on a United Airlines flight that plunged and then recovered shortly after departing from Maui’s Kahului Airport in Hawaii on Dec. 18.
United didn’t immediately comment on the incident, which was first reported on Sunday by The Air Current.

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Diamond Sports, the owner of the largest portfolio of regional sports networks, said it missed an interest payment due to a group of bondholders.
Diamond has been in negotiations with creditors in recent months, and is preparing a prearranged bankruptcy filing for some point during the 30-day grace period, sources said.
The networks have been grappling with $8 billion in debt, on top of a shrinking pay-TV subscriber base, since Sinclair acquired them in 2019.

The Ohio Cup Trophy on top of a Bally Sports logo prior to a game between the Cincinnati Reds and Cleveland Guardians at Progressive Field on May 17, 2022 in Cleveland, Ohio.
George Kubas | Diamond Images | Getty Images

Diamond Sports Group, the owner of the largest portfolio of regional sports networks, is preparing for a likely bankruptcy filing after skipping an interest payment due to bondholders Wednesday, according to people familiar with the matter.
The company, which is an unconsolidated and independently run subsidiary of Sinclair Broadcast Group, said Wednesday it decided to miss about $140 million in interest payments due to its bondholders and would instead enter into a 30-day grace period.

Diamond’s management, creditors and other stakeholders have been in discussions in recent months as it has been looking to restructure its hefty $8 billion debt load. The company said Wednesday it intends to use the 30-day grace period to continue those discussions “regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future.”
The talks have centered on a so-called prearranged bankruptcy filing, said the people, who asked to remain anonymous due to the sensitive nature of the negotiations. Diamond and the creditors have been discussing a debt-for-equity swap, which would see the creditors take some form of ownership of the company, the people said.
This is a likely scenario, but the situation remains fluid and could change as discussions progress, the people said.
A Diamond representative didn’t comment further on the matter. A Sinclair spokesperson didn’t immediately comment.
Sinclair acquired the portfolio of regional sports networks from Disney in 2019 for $10.6 billion, including roughly $8 billion in debt. The deal came after Disney acquired the Fox assets in 2019, and had to divest the sports networks.

Originally the Fox Sports networks, they were later rebranded as Bally Sports in a licensing deal with the casino operator Bally’s Corp.
Diamond Sports instituted its own board for Bally Sports, and in December appointed David Preschlack, a former NBC Sports executive, as its CEO. Diamond Sports’ portfolio includes Bally Sports Detroit, Bally Sports Florida and Bally Sports Southwest. Its networks are home to more than half of MLB, NHL and NBA teams in the U.S., Diamond says.
As consumers flee traditional pay-TV bundles, cable networks, particularly the regional sports networks, have felt the brunt of it. While executives have said ratings remain strong for sports, including these networks, it doesn’t make up for the shrinking customer base. Diamond’s Bally Sports launched a direct-to-consumer streaming option last year.
An impending bankruptcy filing has been of concern for the leagues with teams on the regional sports networks – NBA, NHL and MLB – who get paid large fees for the rights to the games that aren’t nationally aired, according to the people.
Concerns that Diamond could forgo paying the rights payments while under bankruptcy protection have been discussed at the leagues, the people said. However, Diamond has focused on keeping the networks alive and running, which would require the rights to NBA, NHL and MLB games, one of the people said.

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Rich Paul, the sports agent who represents LeBron James, is launching a new sportswear brand with New Balance.
Klutch Athletics says its mission is to provide all athletes with high-quality training apparel and empower them throughout their sports journey.
For New Balance, the partnership offers a fresh new angle in combining sports and culture.

Klutch Athletics will support and serve athletes throughout their athletic journey including youth, collegiate and professional sports
Courtesy: Clutch Athletics

Rich Paul, the sports agent who represents LeBron James, is launching a new sportswear brand with New Balance.
The new brand will be called Klutch Athletics, and the company says its mission is to provide all athletes with high-quality training apparel and empower them throughout their sports journey.

Paul said his goal was to create training products that are both functional and stylish.
“There’s a gap right now that we can fill,” Paul said in a news release. “We’ve seen other brands moving away from youth sports and training, so we’re focused on bringing the new look of training for the next generation.”
The apparel will range in price from $40 for T-shirts to $120 for hoodies. Items will hit select store shelves and be available online beginning April 27.
For New Balance, the partnership offers a fresh new angle in combining sports and culture.
“Rich has deep cultural roots in the world of sport and together we will realize a vision that has yet to be seen by the modern-day athlete. We always strive to take a differentiated approach — this partnership truly exemplifies our independent mindset as a brand,” said Chris Davis, New Balance chief marketing officer.

The Boston-based footwear and apparel brand has seen a resurgence of late, with Foot Locker CEO Mary Dillon calling out the brand’s momentum on her company’s earnings call in November. New Balance sales were up 70% for the sneaker store during the third quarter, Dillon said.

Klutch Athletics Will Launch its First Collection this Spring
Courtesy: Klutch Athletics

Paul, who has been named one of the most powerful sports agents by Forbes, founded the Klutch Sports Group in 2012.
His relationship with NBA superstar James dates back to a random airport run-in more than 20 years ago, when the two men bonded over a Warren Moon jersey. The relationship deepened over the years, and Paul quickly became part of James’ inner circle and his sports agent. Earlier this year, the two invested in Fanatics’ lifestyle brand Mitchell & Ness.
But it’s unlikely James will sport Klutch Athletic clothing: James signed a lifetime deal with Nike in 2015, which would prevent him from wearing competitors’ brands.

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Total mortgage application volume fell 7.7% last week as mortgage rates jumped higher.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6.39% last week from 6.18% the previous week.
Applications to refinance a home loan dropped 13% for the week and were 76% lower than the same week one year ago.

A ‘for sale’ sign hangs in front of a home on June 21, 2022 in Miami, Florida.
Joe Raedle | Getty Images

After falling for five straight weeks, mortgage rates jumped last week, triggering a decline in mortgage demand.
Total mortgage application volume fell 7.7% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.39% from 6.18%, with points rising to 0.70 from 0.64 (including the origination fee) for loans with a 20% down payment. The rate was 4.05% one year ago.
“Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time,” said Joel Kan, MBA’s vice president and deputy chief economist.
Applications to refinance a home loan dropped 13% for the week and were 76% lower than the same week one year ago. At the current rate, 100,000 fewer borrowers can benefit from a refinance compared with just one week ago, according to data from Black Knight. A year ago, with mortgage rates at 4.05%, there were just under 4 million refinance candidates.
Mortgage applications to purchase a home fell 6% for the week and were 43% lower than the same week a year ago. Real estate agents across the country are reporting a jump in buyer demand in the past few weeks, perhaps indicating an early start to the historically busy spring market.
“I actually thought, my God, this is amazing. Look at how fast it turned on a dime,” said Dana Rice, a real estate agent with Compass, who was running a busy open house in Bethesda, Maryland, on Saturday. “We went from no showings and nobody coming to open houses, that every single thing that I’ve launched in the last couple of weeks has had multiple offers.”

There is, however, an abnormally high level of all-cash buyers in the market. Peter Fang is one of them. He was at the open house.
“I’m very surprised to see so many cash offers in the market. I thought I would be at a much better position but the competition is still there,” Fang said.
Mortgage rates continued to move up this week after a government report on inflation showed it was higher than expected in January.

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5 Things to Know

Tesla opens its EV charging network in a deal with the White House.
Ford halts production of its F-150 Lightning EV pickup over a possible battery problem.
Goldman Sachs scraps plans for a branded consumer credit card.

Traders work on the floor of the New York Stock Exchange (NYSE) on February 14, 2023 in New York City. 
Spencer Platt | Getty Images

Here are the most important news items that investors need to start their trading day:

1. Got to get over the hump

We’ve hit the midpoint of a murky week for stocks. The Dow and the S&P 500 slipped Tuesday after the government’s consumer price index for January showed hotter-than-expected inflation. The Nasdaq, however, finished the session in the green. Even though the inflation print came in higher than economists’ estimates, Wall Street seemed to take it in stride as it still showed the pace of price increases slowing down. Wednesday brings more data, including indicators from the housing market, as well as another handful of corporate earnings reports, including Kraft Heinz before the open and Cisco after the bell. Follow live markets updates.

2. Tesla opens its charging network

Tesla Super Charger
Courtesy: Tesla

In a rare moment of accord between the Biden administration and Elon Musk’s electric vehicle empire, Tesla agreed to open up thousands of its charging stations to EVs made by other companies, according to the White House. Tesla and other companies that build and operate charging networks are also in line to win federal funding if their charging infrastructure lives up to government standards. Tesla agreed to make at least 7,500 chargers in the U.S. available for any compatible EV by the end of next year. That includes 3,500 of the company’s Superchargers that are located on major highways in addition to slower Level 2 destination chargers that Tesla provides at restaurants and hotels, among other locations.

3. Ford’s battery bust

Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022 at the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC

It’s not all good news in the world of EV batteries, though. Ford halted production and shipments of its flagship F-150 Lightning pickup over a possible issue with its batteries. The company did not disclose too many details about the potential problem, which came to light during pre-delivery quality inspections. It’s the latest difficulty facing Ford. Earlier this month, the company posted ugly fourth-quarter results and a net loss for 2022, as it copped to execution problems. Ford is looking to cut costs this year as it seeks a turnaround with EV competition heating up.

4. Goldman continues consumer retreat

David Solomon, Chairman & CEO of Goldman Sachs, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 23rd, 2023. 
Adam Galica | CNBC

Goldman Sachs is giving up on plans for a branded credit card, CNBC’s Hugh Son reported Tuesday, as the Wall Street powerhouse continues to dismantle its consumer-banking strategy. Goldman CEO David Solomon has been moving away from his previous intention to turn the company into a bank for the people since losses started to pile up and consumers started facing inflation and other economic headwinds. Goldman in October split its retail operations. Later, the company said it would close its Marcus personal loans business and give up on offering a checking account to a broad customer base. With all of this happening, it just didn’t make sense to launch a consumer credit card anymore.

5. That tricky housing market

A ‘For Sale’ sign is posted in front of a single family home on October 27, 2022 in Hollywood, Florida.
Joe Raedle | Getty Images

If you want a fresh example of just how sensitive the economy is to shifts in interest rates, look no further than Wednesday’s mortgage demand report. Total mortgage application volume fell 7.7% last week, according to the Mortgage Bankers Association, as the popular 30-year fixed rate rose to 6.39% from 6.18%. Refinance applications fell 13% week over week, while applications to purchase a home were down 6%. “Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time,” said Joel Kan, a top economist for the MBA.
– CNBC’s Hakyung Kim, Lora Kolodny, John Rosevear, Michael Wayland, Hugh Son and Diana Olick contributed to this report.
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Chipotle Mexican Grill is opening a new brand called Farmesa Fresh Eatery in a Santa Monica ghost kitchen.
Farmesa marks Chipotle’s first spinoff attempt during CEO Brian Niccol’s tenure and will have a soft opening in late February.
The brand’s bowls will feature a protein, green or grain, two sides, one of five sauces and a topping option. Prices will range from $11.95 to $16.95.

Chipotle is launching Farmesa Fresh Eatery first at Kitchen United’s upcoming Santa Monica location.
Source: Chipotle Mexican Grill

Chipotle Mexican Grill is launching a new spinoff, called Farmesa Fresh Eatery, in a California ghost kitchen.
It’s the latest attempt by the burrito chain to branch out into new cuisines. Its past spinoffs — Asian ShopHouse and Tasty Made — occurred under founder Steve Ells’ leadership and were shut down by 2017. The company also invested in Pizzeria Locale.

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Farmesa marks the first such experiment during CEO Brian Niccol’s tenure, and the company is taking a more measured approach this time around, leaning on its tried-and-true customizable bowls.
The brand will have a soft opening in late February with a limited menu and shorter hours before its official launch in March.
Farmesa’s bowls will feature a protein, green or grain, two sides, one of five sauces and a topping option. Prices will range from $11.95 to $16.95. The brand’s name is a portmanteau of “farm” and “mesa,” the Spanish word for table, in an attempt to communicate its farm-to-table approach.
The full menu, created by Farmesa’s director of culinary innovation, chef Nate Appleman, will include whipped potatoes, golden beets and everything spice-crusted Ora King salmon. Appleman, who won a James Beard award in 2009, previously helped Chipotle add to its sparse menu in the 2000s.
Chipotle isn’t planning on using its own branding much for Farmesa. Nate Lawton, Chipotle’s vice president of new ventures and the architect behind the spinoff, said the company will initially introduce it to customers as a new brand from Chipotle. And, “when the time is right,” Lawton said, Chipotle will use its loyalty program database to attract potential Farmesa customers.

Customers will be able to order Farmesa at the upcoming location at Kitchen United Mix on 3rd Street in Santa Monica, California, or for pickup or delivery through third-party delivery apps, like DoorDash and UberEats. When opened, the Santa Monica location will be Kitchen United’s 24th ghost kitchen.
Ghost kitchens, which are also known as cloud or dark kitchens, allow restaurants to prepare food solely for delivery. Startups like Kitchen United, which had raised $175 million as of late July, house multiple restaurant brands within one location and tout their models as more efficient since they lower labor and rent costs for eateries.
For Chipotle, Kitchen United’s model allows the restaurant chain to test out the new brand with reduced risk.
“We’ve really tried to build in a local, low-cost, flexible and fast way to learn, which I think was one of the key learnings we took away from our past work,” said Lawton, who joined Chipotle last year after two decades at Procter & Gamble.
Farmesa can easily tweak its menu based on customer feedback, and Kitchen United will handle expediting orders and dealing with customers, leaving the brand to focus on learning as much as it can. Lawton said the initial location is meant to understand what customers do and don’t want and the economics of the new brand.
And while Chipotle executives noted earlier this month that delivery sales fell 15% in the fourth quarter compared with the year-earlier period, Lawton said Santa Monica consumers order delivery nine times more often than the national average, another factor that made Kitchen United attractive for the company.
For now, Chipotle’s chief purpose with the location is simply to learn, but that doesn’t mean Farmesa won’t grow.
Lawton said there’s a “variety of ways” that the company could move forward with the new brand, although it plans to keep it separate from Chipotle restaurants.
“While one location does not beget a chain, we think the Farmesa Fresh Eatery brand does signal the company sees an opportunity to grow beyond its core concept utilizing many of attributes of the Chipotle brand (e.g., simple menu, ‘real’ ingredients, easy operations),” Citi Research analyst Jon Tower wrote in a Jan. 24 note to clients before Chipotle officially announced Farmesa’s launch.

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