Raphael Stevens

Unilever said it sold Ben & Jerry’s ice cream operations in Israel.
Avi Zinger’s American Quality Products already licenses Ben & Jerry’s ice cream for sale in the country.
The move will prevent the company from having to end sales of the ice cream in Israel.

Consumer products giant Unilever said it reached a deal that will let its Ben & Jerry’s ice cream business continue selling in Israel.
The company said Wednesday that it sold the Israeli branch of the ice cream brand for an undisclosed sum to Avi Zinger, whose American Quality Products already licenses Ben & Jerry’s ice cream for sale in the country.

The move by Unilever comes after Ben & Jerry’s, which has an independent board, said last summer that it was stopping sales in the territory that has been occupied by Israel since the Six Day War in 1967.  Palestinians want that land for a state of their own and supporters have gotten behind a global campaign known as “BDS,” which stands for boycott, divest and sanction and encourages people to avoid buying from companies that operate in the area.
Unilever’s sale to Zinger effectively overrides the decision by Ben & Jerry’s independent board last summer. American Quality Products said it will continue to sell Ben & Jerry’s under Hebrew and Arabic names throughout the country and occupied territories.
In a phone call with CNBC on Wednesday, Zinger said “this is the best thing that I could have dreamed for me and my employees.”
Ben & Jerry’s and its board chair, Anuradha Mittal, did not immediately respond to requests for comment. Sources inside the company said the board is likely to meet soon to discuss the issue. Mittal was seen as being behind the original decision to pull out of Israel. Ben & Jerry’s Jewish founders, Bennett Cohen and Jerry Greenfield defended the decision in an op-ed to The New York Times last summer.
Ben & Jerry’s decision to pull out of parts of Israel last year was controversial and triggered several states including Florida, Texas, New Jersey and Colorado to start divesting their shares of Unilever.

A scoop on Ben and Jerry’s Cherry Garcia ice cream on Free Cone Day in 2016.
Source: Ben and Jerry’s

A representative for activist investor Nelson Peltz, who is set to join Unilever’s board next month, said in a statement that Trian Partners “commends the Unilever team and Avi Zinger for reaching this new arrangement to keep Ben & Jerry’s in Israel and ensure its ice cream stays available to all consumers. Respect and tolerance have prevailed.”
Trian amassed about 1.5% of the company’s shares over the last year. Peltz was granted a meeting with Unilever CEO Alan Jope late last year as part of his role of board chair for the Simon Wiesenthal Center, which fights antisemitism and the delegitimization of Israel.
Israel’s government sees the occupied territories as part of its economy and any efforts to boycott business in the areas are seen as applying to the country. Stopping sales of the ice cream in the occupied territories would have ended sales throughout Israel.
After learning of Ben & Jerry’s decision last year, Israeli Foreign Minister Yair Lapid instructed consulates in the United States to urge Unilever to reverse Ben & Jerry’s decision. 
“The Ben & Jerry’s factory in Israel is a microcosm of the diversity of Israeli society,” said Lapid, who is also Israel’s incoming prime minister, in a statement. “Today’s victory is a victory for all those who know that the struggle against BDS is, first and foremost, a struggle for partnership and dialogue, and against discrimination and hate.”
American Quality Products directly employs 170 people in Israel, while dairies, delivery firms and others that support the business have an economic ecosystem of about 2,000 Jewish and Arab Israelis, the company said.
“There was a lot of uncertainty but now we know we’ll be able to stay in business forever,” said Zinger, who has run the company for 35 years.

Ben Cohen and Jerry Greenfield, of Ben and Jerry’s Ice Cream, speak at Campaign to End Qualified Immunity in front of the Supreme Court in Washington, May 20, 2021.
Ken Cedeno | Reuters

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Liberty Media’s John Malone
Michael Kovac | Getty Images

Written in the Starz?

Lionsgate is planning a spinoff of Starz, home of “Outlander” and “Power,” by early next year.

Vivendi’s Canal Plus and private equity firm Apollo Global, in tandem with streaming distributor Roku, have both made preliminary bids for a 20% stake, sources say.

A deal could be announced as soon as August.

A publicly traded Starz may look to increase in size by targeting other subscale media and entertainment companies.

By “free radicals,” Malone was referring to affordable media companies, such as AMC Networks, which is controlled by the Dolan family, or A&E Networks, co-owned by Hearst and Disney, which lacked the global scale to compete with Disney and Comcast’s NBCUniversal for original programming and A-list talent.
While these companies may wallow independently, banding together would give them balance sheet heft and leverage to increase programming fees on pay-TV providers.
Malone’s vision never materialized. Lionsgate hasn’t made another acquisition of significance since Starz and has seen its market capitalization shrink in recent years. Lionsgate’s current market valuation is just over $2 billion. In 2016, Lionsgate paid $4.4 billion for Starz. Malone is no longer a Lionsgate shareholder, selling the remainder of his voting shares in 2019.
But even without Malone’s influence, and even amid a transforming media and entertainment landscape, Starz may carry the torch of his vision.

Starz to be spun

In the last six years, streaming video has become the media world’s north star. Pushing together companies to gain a negotiation advantage against pay-TV operators in carriage fee disputes is anachronistic as millions of Americans cancel cable each year. Investors have viewed Lionsgate as an also-ran in the streaming wars.
That’s led Lionsgate’s management and board to decide spinning off Starz is its best course of action. As part of the Starz spinoff, a minority stake will likely be sold to help set a market valuation for the new public company. Vivendi’s Canal Plus and private equity firm Apollo Global, in tandem with streaming distributor Roku, have both made preliminary bids for a 20% stake, according to people familiar with the matter.
Starz and Lionsgate “will do great trading separately,” said Jimmy Barge, Lionsgate’s chief financial officer, earlier this month. “They can pursue their own initiatives, opportunities that might not otherwise arise for the combined company.”
A deal could be announced as soon as Aug. 4, Lionsgate’s estimated next earnings date, the people said. A spokesperson for Starz declined to comment.
As an initial valuation, based on the minority stake sale, Starz will likely be pegged somewhere between $2 billion and $4 billion, said the people, who asked not to be named because the discussions are private. In other words, Starz alone may be valued with a higher market valuation than Starz and Lionsgate combined.

After the spinoff

A publicly traded Starz will have to get bigger to compete with Netflix, Disney, Warner Bros. Discovery, Paramount Global, NBCUniversal, Apple and Amazon in the streaming wars. Even several of those companies may not be large enough on their own.
Starz has 24.5 million global streaming subscribers. When combined with Starz’s premium cable network, which competes with HBO and Showtime, it has 35.8 million subscribers worldwide. For comparison, Netflix has 222 million global subscribers.
Starz tends to focus on female and Black audiences and has had some success with shows including “Power,” “Outlander” and “Gaslit,” the recently released series about Watergate based on season one of the “Slow Burn” podcast, starring Sean Penn and Julia Roberts.
“Starz seems to have strong content but is struggling to attract attention,” JPMorgan analyst Philip Cusick wrote in a note to clients. “This is in line with our thesis that streaming is a scale business, and we believe Starz content is better in another distributor’s hands.”
Lionsgate has attempted to sell Starz for years. It got fairly close in 2019, nearly striking a deal with CBS. That sale never crossed the finish line because vice chair and controlling shareholder Shari Redstone chose instead to push Viacom together with CBS. While former CBS Chief Executive Officer Joseph Ianniello had interest in acquiring Starz, Bob Bakish, the CEO of the combined ViacomCBS, now named Paramount Global, didn’t share his vision, two of the people said.
Every large media company has ultimately decided not to acquire Starz. Buying a subscale streaming service with ties to the legacy pay-TV model is a hard sell for Wall Street. Investors don’t want to see large media companies spending their acquisition cash on deals that don’t move the needle on future growth.

Ways for Starz to grow

Starz CEO Jeffrey Hirsch
Source: Starz

That gives Starz one other path to get bigger quickly: acquire or merge with other companies, itself. Two possible targets are, once again, AMC Networks and A&E Networks. AMC Networks has a market valuation of $1.3 billion. An AMC spokesperson declined to comment on a potential merger. An A&E spokesperson didn’t immediately respond for comment.
Investors may be far more sanguine on Starz and AMC Networks merging than a larger company picking off smaller rivals. Bulking up in a series of deals won’t make Starz a major player overnight. But it could give it the size to acquire carve outs and divestitures from other large media companies. Over time, Starz could conceivably become a media company with enough scale to be a competitive threat. Or, at the very least, not an afterthought.
Starz CEO Jeff Hirsch hinted at this possibility in an interview with CNBC in 2020.
“You’ll see these big six players, but over time they’ll also start to look at their portfolio of assets and say ‘ok, does this fit?’,” Hirsch said. “You’ll start to see assets fall out of those big six that will then constitute a new four or five that will come up. You’ve still got Sony, MGM, Lionsgate, AMC. John Malone has talked about putting some of these smaller dots together.” (MGM has since been acquired by Amazon.)
It’s possible AMC Networks and A&E will balk at selling. But they, too, find themselves as legacy holdovers — owners of cable networks with declining values. Starz could act as a sort of “horizontal acquisition machine” in the coming years to stay viable.
If you’ve heard that phrase before, that’s because someone used to it describe his intensions in taking a stake in cable company Charter Communications back in 2013.
That person was Liberty Media Chair John Malone.
WATCH: Liberty Media Chairman John Malone on equity markets and streaming services

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Bed Bath & Beyond has not taken a sale of Buybuy Baby off the table.
“The business is a very attractive business, and we’re not alone in appreciating its value,” interim CEO Sue Gove said on a call with analysts when asked if a sale was off the table.
Over the past two years, the retailer has sold Christmas Tree Shops, Cost Plus World Market, PersonalizationMall.com and One Kings Lane.

A view of the atmosphere during the Whitney Port & Bundle Organics #MomAsYouAre buybuyBABY product launch in Torrance, California.
Randy Shropshire | Getty Images

As Bed Bath & Beyond shakes up its leadership suite and ousts its CEO, the retailer said Wednesday it remains open to another big change: A potential sale of its baby gear chain, Buybuy Baby.
“The business is a very attractive business, and we’re not alone in appreciating its value,” interim CEO Sue Gove said on a call with analysts when asked if a sale was off the table. “We know there is interest.”

For now, she said, the parent company is focused on strategies to drive sales. That includes improving the division’s website and app and attracting more shoppers to its baby registry.
The baby gear chain is part of a new loyalty program, Welcome Rewards, too. That program began rolling out earlier this month. It allows shoppers to earn and redeem points when shopping online or in stores at any of the company’s three banners: Bed Bath & Beyond, Buybuy Baby and personal care brand Harmon Face Values.
Buybuy Baby has been a focal point in a contentious battle between the home goods retailer and activist investor Ryan Cohen. In March, Cohen pointed to the baby gear banner as one of the most valuable pieces of the company, arguing it could be worth several billion dollars, and pushed for a spinoff or selloff. He later came to a truce with the company, after it agreed to add new board members and conduct a strategic review of Buybuy Baby’s future options.
Bed Bath’s stock jumped in April on a report by The Wall Street Journal that the company was fielding interest for the division. At the time, the company did not respond to requests for comment.
The baby gear retailer has been one of Bed Bath’s bright spots, particularly as customer traffic and sales have dropped at its namesake banner. In the holiday quarter, for example, same-store sales for Bed Bath & Beyond stores declined 15% — but Buybuy Baby’s same-store sales grew by low single digits.

That trend didn’t hold up in the most recent three-month period, however. Buybuy Baby’s same-store sales fell by the mid single-digits.
Harriet Edelman, who leads the board of directors as its independent chair, said Wednesday a committee of board members are working closely with strategic and financial advisors as it considers Buybuy Baby’s future.
On the call with analysts, she described Buybuy Baby as “a highly relevant banner with a strong market position and favorable demographics.”
Bed Bath & Beyond over the past two years has sold off other pieces of its business, including Christmas Tree Shops, Cost Plus World Market, PersonalizationMall.com and One Kings Lane.

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LVMH’s Moet Hennessy division on Wednesday announced it has acquired California wine-maker Joseph Phelps Vineyards.
The deal delivers Moet one of the best-known California wine makers, famous for its red table wines and trophy Insignia label.
Moet Hennessy CEO Philippe Schaus told CNBC demand in Europe is “on fire” thanks in part to the return of European tourism.

A winemaker samples a glass of Joseph Phelps Insignia at the Culinary Institute of America, in St. Helena, Calif.
Eric Risberg | AP

LVMH’s Moet Hennessy division on Wednesday announced it has acquired California wine-maker Joseph Phelps Vineyards, as the French luxury goods giant continues to broaden its drinks portfolio.
The deal delivers Moet one of the best-known California wine makers, famous for its red table wines and premium Insignia label, and deepens its foothold in the U.S., its largest market. Terms of the deal were not disclosed.

Moet Hennessy Chairman and CEO Philippe Schaus told CNBC the company had been looking around the world for larger winemakers that had the same dedication to quality, craftsmanship and entrepreneurship as LVMH. Phelps, founded in 1973 by the pioneering winemaker Joseph Phelps, produces around 750,000 bottles a year and had the right mix of scale, brand, product offerings and quality to add to the Moet Hennessy portfolio, Schaus said.
“It’s an iconic name and an iconic winery,” he said. “It’s important for us that we are acquiring a family business with a legacy and heritage. It’s super important that we keep that heritage.”
Phelps has become a staple of private wine cellars and steakhouses. Insignia, a Bordeaux-style blend, typically retails for at least $250 a bottle, depending on the vintage.
The deal comes as Moet Hennessy — whose dozens of brands include Dom Perignon, Moet & Chandon, Hennessy, Cloudy Bay and Belvedere — continues to ride the surge in high-end champagnes, wine and spirits despite fears of recession and inflation.
Schaus said Moet Hennessy aims to serve “all the different moments of consumption” — from aperitifs, champagne and fine dining wines to bars, clubs and cocktails. The company’s Cloudy Bay brand covers white wines, and its Whispering Angel line offers rose, but Schaus said, “we were missing a strong red wine.”

Moet Hennessy reported revenue of 1.64 billion euros for the first quarter, up 8% over 2021. Schaus said demand in Europe is “on fire” thanks in part to the return of European tourism.
“We’re seeing huge demand in Europe,” he said, “especially in the resort towns and nightlife.”
In the U.S., Schaus said the company has seen a slight drop-off in demand in lower-priced segments. But high-end consumers — looking for premium-priced products — continue to buy for now. “The summer will be strong, people are traveling and consuming,” he said. “After the summer, we could see a different situation. It’s hard to predict inflation and prices.”
While Moet Hennessy was constrained by supply chain problems in the first quarter, Schaus said the company was able to “catch up” to many of those issues.
“We think this quarter will be very strong,” he said.
The high-end champagne shortage, however, is unlikely to end anytime soon, Schaus said.
Dom Perignon, Krug and other pricey brands are increasingly hard to find at some retailers and restaurants since supply remains limited. Dom Perignon, for instance, ages for 10 years before it’s sold to the public, making it difficult to flex supply to meet exploding demand, Schaus said.
“Every bottle I will sell over the next 10 years is already in the cellar,” he said. “And Dom Perignon uses only the highest level of grapes, so we simply have more demand than nature can provide.”
Schaus also highlighted Armand de Brignac, the champagne brand co-owned by Jay-Z whose gold bottles have become fixtures at flashy parties and clubs. The brand. he said, is quickly catching on in night clubs in Japan and the French Riviera and has “clearly exceeded our expectations.”
“With Armand de Brignac as well, there is just a limited supply,” he said.

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The battle between Frontier and JetBlue for discount airline Spirit is the most contentious in recent years.
Spirit and Frontier in February announced they planned to merge, but JetBlue swooped in with a surprise, all-cash bid in April.
Spirit shareholders are scheduled to vote on the Frontier deal on Thursday.

A Frontier Airlines plane near a Spirit Airlines plane at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.
Joe Raedle | Getty Images

The most heated airline battle in recent years comes to a head on Thursday when Spirit Airlines’ shareholders vote on a proposed tie-up with fellow discount carrier Frontier Airlines while rival suitor JetBlue Airways circles with increasingly sweetened takeover bids.
Spirit has repeatedly rebuffed sweetened, all-cash bids from JetBlue, arguing that such a takeover wouldn’t pass muster with regulators, and has stuck with its plan to combine in an also-sweetened cash-and-stock deal to combine with Frontier, first announced in February.

JetBlue’s surprise all-cash bid in April set off a fight over Spirit that last month turned hostile.
If Spirit shareholders vote in favor of the tie-up with Frontier, it would put the carriers on the path to creating a budget airline behemoth. The two carriers share a similar business model based on low fares and fees for almost everything else from seat selection to carry-on bags.
If shareholders vote against the deal it opens the door for a takeover by JetBlue, which would retrofit Spirit’s yellow planes to look like JetBlue’s, including cabins with seatback screens and more legroom.
“JetBlue does not have many options to achieve a step-change in growth, and that explains why JetBlue has pursued this deal so doggedly,” said Samuel Engel, aviation consultant at ICF.
JetBlue and Frontier have each argued their proposed transactions are key to their future growth, helping them better compete with large U.S. carriers and get fast access to Airbus narrow-body planes and pilots.

Either deal would create the fifth-largest U.S. airline.

Arrows pointing outwards

Late Monday, JetBlue said it would raise the reverse breakup fee if regulators don’t approve a JetBlue takeover of Spirit to $400 million from $350 million. It also raised the amount it would pay up in advance to $2.50 a share, from $1.50 and added a 10 cent-a-share monthly payment to shareholders starting next year until the deal is consummated or terminated.
JetBlue previously offered to divest some assets in crowded markets to calm antitrust fears, but hasn’t said it would give up its alliance with American Airlines in the Northeast U.S., which Spirit has called out as a sticking point in that deal.
JetBlue’s latest offer came after Frontier late Friday raised the cash portion of its offer by $2 per share to $4.13 and increased the reverse breakup fee to $350 million to match JetBlue’s then-offer.
Spirit has stuck with the Frontier deal. CEO Ted Christie on Tuesday called the Frontier offer “very compelling” and told CNBC the airline wants to “focus our efforts on convincing the shareholders it’s the right thing to do.”
Proxy advisory firm Institutional Shareholder Services on Tuesday said that “the enhancements by JetBlue may be enough to offset the potential upside of the proposed merger with Frontier” but said it didn’t want to change its recommendation in favor of the deal with so little time before the vote.
Spirit postponed the vote from June 10 to continue deal talks with Frontier and JetBlue.

War of words

For weeks, JetBlue has argued that Spirit’s board hasn’t negotiated in good faith or fully considered its offer. It has repeatedly urged the budget airline’s shareholders to vote against the Frontier deal.
“The Spirit Board consistently ignored or refused to engage with JetBlue until faced with certain defeat on the original shareholder meeting date and then, in an attempt to avoid the widespread perception of its poor corporate governance, pretended to engage with JetBlue,” JetBlue said in a letter Wednesday again urging Spirit shareholders to vote against the Frontier deal.
Spirit has repeatedly denied claims that it hasn’t engaged with JetBlue in good faith. The airline didn’t immediately comment Wednesday on JetBlue’s latest letter.
All three carriers have launched heated words as they try to win over Spirit shareholders before the shareholder vote.
JetBlue late Monday wrote a letter to Spirit shareholders detailing its latest sweetened bid and accusing Spirit of making “misleading statements” regarding its antitrust doubts.

Frontier fired back in a lengthy news release Tuesday saying that “a Spirit acquisition by JetBlue would lead to a dead end — a fact that no amount of money, bluster, or misdirection will change.”
The high drama is coming from an already-consolidated industry that hasn’t seen a major airline deal since 2016, when JetBlue lost out to Alaska Airlines for Virgin America.
“This is as much as a potboiler for the summer than any trashy novel,” said Henry Harteveldt, a former airline manager and president of of Atmosphere Research Group.

High regulatory bar

Either combination of airlines would face high regulatory scrutiny from the Justice Department, after President Joe Biden has made ensuring competition a priority.
“Our duty is to litigate, not settle, unless a remedy fully prevents or restrains the violation. It is no secret that many settlements fail to preserve competition,” Assistant Attorney General Jonathan Kanter said in prepared remarks for a speech in Chicago April.
The Justice Department last year sued to undo JetBlue’s partnership with American. A trial date has been set for late September.
Frontier has argued that its Spirit deal has a higher chance of passing muster, especially as concerns build over high inflation. Both Frontier and JetBlue say their proposed deals would mean lower fares for consumers.
“In a world where everybody is worried about inflation and the American family, and the American consumer is getting pinched in everything they buy, giving them the option of lower prices is something that I think consumers are going to want,” Frontier CEO Barry Biffle said in an interview. “Ultimately, we believe regulators will see it the same way at some point.”

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Bed Bath and Beyond said its CEO Mark Tritton has left the company.
The home goods retailer sharply missed Wall Street’s expectations for quarterly revenue and earnings.
Tritton was tapped to lead the company’s turnaround effort, but Bed Bath has struggled with disappointing sales and supply chain woes.

A pedestrian walks by a Bed Bath and Beyond store in San Francisco, California.
Justin Sullivan | Getty Images

Bed Bath & Beyond said Wednesday that it is replacing CEO Mark Tritton as part of a leadership shakeup as the retailer’s quarterly sales and earnings sharply missed Wall Street expectations.
Shares fell more than 14% in premarket trading.

Sue Gove, an independent director on the board, will step in as interim chief executive, the company said. It said she will focus on reversing recent results, addressing supply chain and inventory issues and strengthening the company’s balance sheet.
“I step into this role keenly aware of the macro-economic environment,” Gove said in a statement, citing steep inflation and shifting buying habits.
Still, she said the company needs to improve its performance and that its first quarter results are “not up to our expectations.” Bed Bath & Beyond said it expects same-store sales to recover in the second half of the fiscal year, but did not provide a specific forecast.
The home goods retailer will also get a new chief merchandising officer. Mara Sirhal, who most recently served as general merchandise manager of health, beauty and consumables, will replace Joe Hartsig, who is leaving the company.
Here’s how the retailer did in the three-month period ended May 28 compared with what analysts were anticipating, based on Refinitiv data:

Loss per share: $2.83 vs. $1.39 expected
Revenue: $1.46 billion vs. $1.51 billion expected

The company’s net loss widened to $358 million, or $4.49 per share, from $51 million, or 48 cents per share, a year earlier. On an adjusted basis, the company’s net loss was $2.83 per share. That was more than the $1.39 that analysts expected, according to Refinitiv.
Sales fell to $1.46 billion from $1.95 billion a year earlier. Wall Street expected sales of $1.51 billion.
Same-store sales, a key retail metric, declined 24% in the quarter compared with a year ago, worse than the 20.1% drop that analysts expected, according to StreetAccount. Online sales fell by 21% year over year. The figures include a 27% drop for its Bed Bath & Beyond banner and a mid single-digits decline for the Buybuy Baby banner.
To win back sales, Gove told analysts in a conference call that the company will embrace a “back to basics mantra that prioritizes knowing our customer and delivering the experience they deserve whenever they interact with us.” 
Bed Bath has been under pressure from activist investor Ryan Cohen, chairman of GameStop and co-founder of Chewy. Early this year, Cohen’s firm, RC Ventures, revealed a 10% stake in the company. Cohen called for sweeping changes, criticized top executives’ high pay and urged the sale or spinoff of the company’s baby gear chain, Buybuy Baby.
Bed Bath and Cohen came to a truce in late March. The retailer agreed to add new independent directors to its board and look into alternatives for the Buybuy Baby chain. But the challenges for the home goods retailer have not let up.
Shares of the company are down 55% so far this year and hit a fresh 52-week low earlier this month. On Tuesday, shares of the company closed at $6.53, down more than 3%.
Bed Bath on Wednesday said a board committee is looking into ways to maximize the value of its baby chain, including by boosting its registry program and by improving its website and app. Gove did not rule out a potential sale of the business.
“The business is a very attractive business and we’re not alone in appreciating its value. We know there is interest,” she said on the call with analysts.
Inventory in the quarter rose about 15% from a year ago. As the company racked up merchandise, shoppers’ demand for those goods fell, Chief Financial Officer Gustavo Arnal said. He said the company will move quickly to clear excess inventory, a problem other retailers including Target are also working through. The company will reduce full-year capital expenditures by at least $100 million to about $300 million, Arnal said.
Bed Bath & Beyond said it hired retail advisory firm Berkeley Research Group to look at its inventory and balance sheet. It has also hired national search firm, Russell Reynolds, to look for a permanent CEO.
Read the company’s earnings release here.
This story is developing. Please check back for updates.

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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 5.84% from 5.98% last week, causing mortgage refinance demand to rise slightly.
Homebuyer demand was flat for the week and down 24% from a year ago.

After rising steadily for three weeks, mortgage rates dipped slightly last week, prompting a small increase in refinance activity. Activity from homebuyers, however, pulled back further, leaving total mortgage demand basically flat from 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 ($647,200 or less) decreased to 5.84% from 5.98%, with points decreasing to 0.64 from 0.77, including the origination fee, for loans with a 20% down payment.

Applications to refinance a home loan rose 2% for the week but were 80% lower than the same week one year ago. The refinance share of mortgage activity increased to 30.3% of total applications from 29.7% the previous week.
Mortgage demand to purchase a home increased 0.1% for the week after rising more solidly the previous week. It was, however, 24% lower year over year.
“Overall purchase activity has weakened in recent months due to the quick jump in mortgage rates, high home prices, and growing economic uncertainty,” said Joel Kan, an MBA economist. “The average purchase loan amount declined to $413,500, which highlights an ongoing downward trend seen since it hit a record $460,000 in March 2022.”
The drop in the loan size is likely the result of moderating price growth due to higher mortgage rates and buyers not being able to borrow as much at those higher rates. 
After that brief drop, mortgage interest rates popped back up at the end of last week and continued this week, according to another read from Mortgage News Daily. The average rate on the 30-year fixed is now approaching 6% again.

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Delta says passengers won’t have to pay a fare difference if they change tickets booked July 1-4.
Delta and other carriers have trimmed their summer schedules to give themselves more wiggle room to recover when things go wrong.
Fourth of July weekend is expected to be the busiest for air travel since before the pandemic.

An Airbus A330-323 aircraft, operated by Delta Air Lines.
Benoit Tessier | Reuters

Delta Air Lines is allowing travelers to change their tickets for free during the busy Fourth of July weekend, allowing fliers to avoid paying a fare difference and skip the airport during a “potentially challenging” few days.
The unusual offer, normally extended for bad weather and limited to certain airports, comes as Delta and other airlines gear up for what could be the busiest travel period since before the Covid pandemic and scramble to keep a lid on elevated rates of flight delays and cancellations.

Delta travelers booked July 1-4 can rebook their trip with no change fee or difference in fare — provided they keep the same origin and destination and take a new trip by July 8.
The offer applies to all ticket classes, including no-frills basic economy.
“Delta people are working around the clock to rebuild Delta’s operation while making it as resilient as possible to minimize the ripple effect of disruptions,” the carrier said late Tuesday. “Even so, some operational challenges are expected this holiday weekend. This unique waiver is being issued to give Delta customers greater flexibility to plan around busy travel times, weather forecasts and other variables without worrying about a potential cost to do so.”
Delta last month said it would cut about 100 flights a day from its schedule in July and part of August. United Airlines, JetBlue Airways and Alaska Airlines have also trimmed their schedules in hopes of improving reliability.
Airlines have blamed the issues on bad weather, such as thunderstorms, and staffing shortfalls of air traffic controllers, though carriers have also been aggressively staffing up.

The Federal Aviation Administration and Department of Transportation have blamed airlines’ planning for some of the delays and cancellations, criticizing the companies for encouraging employees to take early retirement during the pandemic despite $54 billion in taxpayer aid set aside for payrolls.
“A lot of people, including me, are expecting to get to loved ones over this holiday weekend and we need a system that’s resilient enough to get them there, plus good customer service when an issue does come up,” Transportation Secretary Pete Buttigieg said in an interview with NBC’s “Nightly News” that aired Tuesday.

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