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    Cramer's lightning round: Zuora is not a buy

    Monday – Friday, 6:00 – 7:00 PM ET

    It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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    23andMe Holding Co: “At $2, I’m willing to buy the lottery ticket. But make no mistake about it, it is a lottery ticket.”

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    NIO Inc: “I don’t like to buy any of these Chinese stocks. … Let’s move on.”

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    Mirati Therapeutics Inc: “Understand that you can lose all that you put in. But as a pure spec, I think it’s a good one.”

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    Zuora Inc: “Zuora’s losing money. … It does not fit our criteria of what you should own.”

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    Blue Owl Capital Inc: “I’ve got enough problems with major league banks. I do not need to fool around with minor league banks.”

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    Union announces daytime work stoppage at congested Port of Oakland

    A port workers union is shifting a planned work stoppage to daytime hours June 20 at the already-congested Port of Oakland in California, just days before the expiration of the union’s contract.
    According to the CNBC Supply Chain Heat Map, the Port of Oakland is among the worst performing ports for the movement of import containers.
    A port official said the change was made so Black longshoremen could celebrate the Juneteenth holiday, which is June 19, a Sunday, but will be widely observed on June 20.

    In an aerial view, a container ship sits docked at the Port of Oakland on May 20, 2022 in Oakland, California.
    Justin Sullivan | Getty Images

    A crucial port workers union is shifting a planned work stoppage to daytime hours June 20 at the already-congested Port of Oakland in California, just days before the expiration of the union’s contract.
    The Oakland chapter of the International Longshore and Warehouse Union, or ILWU, announced that its work stoppage meeting would be moved from the night shift to the day shift. According to a document obtained by CNBC, the first shift from 8 a.m. to 5 p.m. PT shift would be closed. Operations will resume at the port at 6 p.m.

    A port official told CNBC that the change was made so Black longshoremen could celebrate the Juneteenth holiday, which is June 19, a Sunday, but will be widely observed on June 20.
    The stoppage is bad news for already-snarled supply chains. The day shift is far busier than the evening shift, according to truckers familiar with the port. According to the CNBC Supply Chain Heat Map, the Port of Oakland is the worst performing port for the movement of import containers – a 9.5-day average.
    Port employees were made aware of the change in a Friday morning email.

    Arrows pointing outwards

    Source: CNBC

    The ILWU didn’t immediately respond to CNBC’s request for comment. The contract is set to expire July 1.
    The timing of this meeting change has logistics experts concerned.

    “Given the slowing growth rate of the American economy, interruptions in the flow of exports are never a positive,” said Alan Baer, CEO of shipping company OL USA. “We need all sides of the supply chain functioning as this optimizes the short and long-term outlook for everyone involved.”
    The Port of Oakland has also seen a drop in exports and recently announced a partnership with the USDA to provide financial aid to agricultural exporters.

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    Brokerage industry looks for alternatives to payment for order flow amid SEC's threatened crackdown

    The clearing firm powering SoFi, Webull and other fintechs has been quietly building a marketplace for matching customer orders.
    The “auction” process, as the CEO of Apex Clearing describes it, would let stock exchanges compete directly with market makers like Citadel Securities and Virtu.
    “It creates more competition, which will translate into better prices,” Bill Capuzzi, CEO of Apex, told CNBC. “The big winner is the retail investor.”‘

    Omar Marques | LightRocket | Getty Images

    The brokerage industry is exploring alternatives to payment for order flow as SEC chair Gary Gensler takes aim at the practice.
    One idea is coming from Apex Clearing, CNBC has learned. The clearing firm handles trades for SoFi, Webull and other fintechs and has been quietly building a marketplace for matching customer orders. The “auction” process, as the Apex CEO describes it, could let stock exchanges compete directly with market makers like Citadel Securities and Virtu.

    “It creates more competition, which will translate into better prices,” Bill Capuzzi, CEO of Apex, told CNBC. “The big winner is the retail investor.”‘
    Earlier this week, SEC chairman Gary Gensler proposed changing rules that govern how Wall Street handles retail trades. The top securities regulator said his plan would, in part, require firms to compete directly to execute trades from retail investors. Gensler is also looking for more disclosures around fees and data. The SEC chair has been critical of potential conflicts of interest and complained of power being concentrated among select market makers.
    “I asked staff to take a holistic, cross-market view of how we could update our rules and drive greater efficiencies in our equity markets, particularly for retail investors,” Gensler said at a Piper Sandler fintech conference on Wednesday.
    Payment for order flow, or PFOF, refers to payments brokerages receive for directing customer trades to a market maker, such as Citadel Securities or Virtu. While it’s often a fraction of a penny, the arrangement brings in the bulk of revenue for Robinhood and other brokerages, and has allowed them to offer commission-free trading.
    PFOF is widely practiced by the brokerage industry but came under fire during the Gamestop saga. Gensler and the SEC questioned potential conflicts of interest and whether retail traders were getting the best price. Companies are already required to give customers the best price, known as “best execution.”

    While the marketplace — technically called an alternative trading system — is “built and ready to go,” Apex’s Capuzzi said, it has yet to launch and could require SEC approval. But if approved, an auction like this may pre-emptively solve some of the agency’s complaints about how the securities industry operates behind the scenes.
    Rich Repetto, a managing director and senior research analyst at Piper Sandler, said there could be more examples of firms trying to test ideas ahead of any formal SEC moves. That may even reduce the need for any changes to the current rules.
    “Now that the outline was presented by Gensler, there could be innovation in front of it that could get him to where he wants to be without any formal rulemaking,” Repetto told CNBC.
    While still a variation of payment for order flow, a marketplace like the one Apex is building may shrink the profits for wholesale market makers, Repetto said.
    Another alternative to Gensler’s proposals could be the industry moving back to “internalization,” or brokers filling customer orders from a firm’s own inventory, according to Devin Ryan of JMP Securities. The practice is only an option for larger self-clearing brokerages with significant order flow. Fidelity does this, for example. Charles Schwab and E*Trade used to.
    “This scenario could even be more economic for the largest players but would likely lead to more fragmentation in liquidity and more questions on execution quality,” Ryan said.
    Robinhood’s chief legal officer Dan Gallagher, a former SEC commissioner, argued that as things stand retail traders have never had it so good. Gallagher pointed to fast execution, zero commissions and zero account minimums as reasons to keep the status quo.
    “It is a really good climate for retail. To go in and muck with it right now, to me, is a little worrisome,” Gallagher said at the same industry conference Wednesday.
    For traders though, an auction set-up with more competition could result in incrementally better prices. While it might look “miniscule,” around 1 cent for some trades, it eventually adds up, Capuzzi argued.
    “If you do this over and over again, and you’re giving a 10% better execution, that goes back to the retail trader — it’s better execution on both the buy and sell side, so more money in their pockets,” Capuzzi said. “This can make a material impact and change to the positive for the market structure.”
    Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

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    Big landlords jump into the homebuilding business as demand for single-family rentals surges

    The push comes as more Americans have the flexibility to work from anywhere and are looking for larger spaces with outdoor areas.
    According to the National Association of Home Builders, there were 13,000 new single-family homes started as rentals in the first quarter of this year, up 63% from a year ago.
    Homes-built-for-rent still represent just 5% of the home building market, but that’s up from the 2.7% historical average, according to the association.

    Jake and Stephanie Murphy are moving into a new single-family rental home built by American Homes 4 Rent.
    Diana Olick | CNBC Real Estate Correspondent

    As demand for single-family rental homes surges, big landlords are jumping into the homebuilding business to shore up falling supplies.
    The push comes as more Americans have the flexibility to work from anywhere and are looking for larger spaces with outdoor areas.

    “This market is very undersupplied. There are not enough quality homes for the number of American families,” said David Singelyn, CEO of American Homes 4 Rent, which has built more than 100 rental-only communities in the last five years.
    According to the National Association of Home Builders, there were 13,000 new single-family homes started as rentals in the first quarter of this year, up 63% from a year ago. Homes-built-for-rent still represent just 5% of the home building market, but that’s up from the 2.7% historical average, according to the association.
    In Mooresville, North Carolina – about 30 miles north of Charlotte – American Homes 4 Rent’s newest development includes more than 220 rental homes with access to amenities including a pool and fitness centers. Landscaping and maintenance is included in the rent.
    Jake and Stephanie Murphy, who’ve been able to work remotely since the pandemic, are among those who relocated to the community after selling their home in California. They could afford to buy, but opted to rent a four-bedroom home for their family for $2,400 a month.
    “We’re just not sure if the housing prices will really stay where they are currently. So we didn’t want to buy at the peak and then have them go down in a couple of years,” said Stephanie Murphy, who is 29.

    The Murphys also said they liked the flexibility of renting as they learn about a new area.
    The number of rentals is now falling slightly, as some smaller landlords sell their homes at the top of this pricey market. But Singelyn expects to keep building homes for rent over the next few years based on the strengthening demand he said he’s seeing.
    “How many inquiries are we getting? How many showings? How many applications are we getting on every available home? It’s two to three times greater today than it was two years ago before the pandemic,” Singelyn said.
    Other companies investing in the build-for-rent market include Lennar, DR Horton, Taylor Morrison and Toll Brothers. Invitation Homes, the largest publicly traded landlord, last year went into a joint venture with homebuilder Pulte Homes to build more rental homes.
    Investment in single-family rentals – both buying older homes and building new ones – has grown dramatically. The sector saw investments of about $3 billion in 2020, according to John Burns Real Estate Consulting. In 2021, the figure surged to $30 billion. It’s expected to reach $50 billion this year as larger institutional investors, homebuilders, and landlord rush into the market.
    Like most big landlords, American Homes 4 Rent got into the business during the Great Recession when millions of homes went into foreclosure. The company snapped up cheap, distressed properties, often on the auction block, and turned them into lucrative rentals. 
    There were 11.6 million single-family rental households in 2006, at the last housing peak. That figure rose to 15.5 million in 2014 after the housing market crashed, according to John Burns Real Estate Consulting.

    But the growing demand and tightening supply also mean homes-for-rent are getting less affordable. Nationwide, single-family rents are up more than 13% at from a year ago, according to CoreLogic. 
    “A shortage of single-family properties available for rent has plagued the market, pushing rents up at record-level rates,” said Molly Boesel, principal economist at CoreLogic. She noted the the number of single-family rental properties listed early this year was well below pre-pandemic levels.
    Back in Mooresville, North Carolina the Murphys are watching how the market plays out. But Jake Murphy said he doesn’t believe homeownership is part of the American Dream, and is enjoying renting for now.
    “I’m excited because you look around the neighborhood, there’s like Texas license plates and New York, and then we have California,” he said.

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    Job cuts hit cybersecurity industry despite surging growth from ransomware attacks

    Cybersecurity companies are seeing record growth as ransomware attacks increase and businesses bolster spending to protect their data.
    However, the plunge in tech stocks and freezing of the IPO market has forced a number of high-growth companies to cut jobs.
    “We were not optimized as a business,” said Cybereason CEO Lior Div.

    A construction crew assembles a display for the RSA Conference at Moscone Center in San Francisco, Calif.
    Paul Chinn | San Francisco Chronicle via Getty Images

    Nothing has lowered Cybereason’s expectations for growth. Rather, the continuing rise in ransomware attacks has forced its clients to bolster spending on security systems, putting the security software company ahead of schedule when it comes to revenue.
    But Cybereason is cutting costs anyway, confirming last week that it’s laying off 10% of its workforce, or about 100 employees. The reductions follow the dramatic swing in the economy this year and the beating that software stocks have taken on the public market.

    Cybereason’s story resonates with many of the 450-plus vendors in attendance at RSA, the premier conference for companies in security software. The size, scale, complexity and potential damage caused by cyberattacks means that no matter how corporate IT and finance departments are responding to inflation and a potential economic slowdown, budgets are expanding when it comes to protecting data and networks.
    The global cybersecurity market is expected to grow at an annual rate of 9.5% a year, reaching almost $375 billion a year by 2028, according to Vantage Market Research. That’s about double the rate of growth forecast for overall IT spending, at least over the next two years, according to Gartner.
    Still, with the IPO window closed, Cybereason’s plans for its next financing round were thwarted. Private capital could have been an option but likely with painful terms and an almost certain markdown from the company’s $3 billion valuation achieved in a funding round last year. CEO Lior Div opted instead to reduce expenses and preserve cash.

    Lior Div, Cybereason
    Kiyoshi Ota | Bloomberg | Getty Images

    “We were working under the assumption that capital would be available, as much as we need and at the same price,” Div said in an interview this week in San Francisco at the annual RSA Conference, referring to the company’s operating plans last year. “We were not optimized as a business.”
    There’s no demand problem.

    A report in April from security company Sophos said that 66% of organizations surveyed were hit by a ransomware attack in 2021, up from 37% the prior year. The average ransom payment increased almost fivefold to over $800,000, the report said.
    Ransomware attacks occur when a hacker group infiltrates a corporate network and then holds the data hostage, demanding a sum of money from the victim to in return for access to the data.

    War in Ukraine makes matters worse

    The crisis has intensified this year, with cyberattacks from Russia on the rise following the country’s invasion of Ukraine in February. Cybersecurity authorities from the U.S. and four ally countries released an advisory in April, warning of a jump in cyber activity “as a response to the unprecedented economic costs imposed on Russia as well as materiel support provided by the United States and U.S. allies and partners.”
    Cybereason’s technology is designed to recognize when and how malicious attacks are taking place by establishing a constant real-time view of what’s happening inside networks. The company has been particularly effective at helping clients fend off ransomware attacks, thanks to a web of sensors across the world that automatically identify anything suspicious or unfamiliar that hits a network.
    Last year, Cybereason raised $325 million, taking advantage of an insatiable demand for high-growth software names. Div said he’d set out to raise just $200 million, but money was so free and easy that the company went bigger.
    Four months later, the Nasdaq peaked. Since then, the tech-heavy index is down 27%. Cybereason’s closest public market rivals, SentinelOne and CrowdStrike, have dropped 66% and 35%, respectively, over that stretch. Meanwhile, SentinelOne reported revenue growth of 109% in the latest quarter from a year earlier, while CrowdStrike grew 61%.

    Arrows pointing outwards

    Cyber stocks plunge

    Across the board, investors have rotated out of high-growth tech, moving into names and sectors that are generally viewed as safer in an environment of rising inflation and interest rates. The IPO market ground to a halt just as Cybereason was confidentially filing paperwork for an upcoming offering.
    “We said, ‘OK, we planned to go out, and now we have to make sure we’re fiscally responsible and can keep running the business for many years,'” Div said.
    While neither SentinelOne nor CrowdStrike have backed off their prior hiring plans, their slide alongside the broader market has forced pre-IPO companies and those at even earlier stages to reassess their prospects based on the new realities of the capital markets.
    Deep Instinct, a start-up that uses deep learning to try and prevent ransomware, cut 10% of its salespeople this week. That’s despite growth of over 200% last year in annual recurring revenue, a rate of expansion that continued into the first quarter of this year.
    Lane Bess, chairman of Deep Instinct, said the company had to get more efficient with its sales operation.
    “We took a look and said, ‘Where are we being most effective in the enterprise?'” Bess said in an interview at RSA. “Are we doing well in the low end of the market, where we have inside salespeople? No. Do we have channel partners that can get to that low end of the market? Yes.'”
    In late May, cloud security software vendor Lacework said it was cutting 20% of its workforce, just six months after raising $1.3 billion at an $8.3 billion valuation. The company said a “seismic shift” in the markets forced it to make modifications.
    “While we do not have control of the environment around us, we do have a responsibility to control how we operate our business and make changes as needed to best position the company for continued and long-term success,” Lacework said in a blog post.
    Lacework ranked 25th on CNBC’s Disruptor 50 list, which was released in May. Cybereason ranked 41st in its second straight appearance on the list.
    The layoffs and hiring freezes at companies that had been in hyper-growth mode is likely to have a trickle-down effect across the labor market in the industry. While every CEO and recruiter will say that competing for top technical talent, particularly in security, remains as tough as ever, the market turmoil has employers reconsidering how they think about compensation.
    “It’s less competitive out there, because there are fewer start-ups,” said Todd McKinnon, CEO of Okta, a company that provides identity management software for corporations. “We want our pay to be at the top of the market, but not more. If the market goes down, we don’t want to be slow to adjust.”

    Like its publicly-traded peers, Okta has been hammered this year, with its stock falling 58%. But there’s no shortage of business opportunities. Revenue jumped 65% in the first quarter.
    McKinnon isn’t expecting a flood of talent to suddenly hit the market, because “private companies still have a ton of money,” he said. Venture capitalists poured a record $332.8 billion into U.S. start-ups last year, double the amount from a year earlier, according to the National Venture Capital Association.

    ‘Path to profitability’

    High-valued private security companies like Snyk ($8.5 billion), Tanium (over $9 billion) and Illumio ($2.75 billion) told CNBC that they have no plans for layoffs or to even slow down hiring, as they remain well capitalized and are experiencing a boom in business.
    Snyk CEO Peter McKay acknowledged that “the cost of money has gone up massively from what you could raise before in the multiples going forward,” but he said his company is just fine after raising $530 million last year.
    “We don’t have to raise,” said McKay, whose company’s technology helps customers quickly spot vulnerabilities in their code. “We’ve got a path to profitability, and we’ve accelerated our path to profitability.”
    Charles Ross, the chief customer officer at Tanium, said his team is watching to see what clients are doing, but as of now there’s no sign of a slowdown. The company just closed out its biggest first quarter ever in terms of customers and revenue, after increasing headcount last year by 1,000 people, or more than 80%.
    One thing Ross said he’s hearing from customers is that they’re consolidating their security portfolio into a few essential vendors and cutting elsewhere. Tanium’s technology gives IT managers visibility across their network to assess threats and see where protection is lacking. It typically sits alongside software from endpoint security providers like CrowdStrike or SentinelOne, Ross said.
    “They’re running us as better together,” Ross said, in an interview at RSA.
    And at Illumio, whose software helps prevent ransomware and stops breaches from spreading across networks, CEO Andrew Rubin said the topic of downsizing or letting people go “was not on the agenda” at the latest board meeting last month.
    “We have absolutely no conversation happening inside the company about laying anybody off,” said Rubin, whose company raised $225 million last year. He said the company has “years and years and years and years of runway.”
    WATCH: SentinelOne CEO discusses keeping an eye on possible cyberattacks from Russia More

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    Stocks making the biggest moves premarket: DocuSign, Vail Resorts, Stitch Fix and others

    Check out the companies making headlines before the bell:
    DocuSign (DOCU) – The electronic-signature technology company’s stock plunged 26.1% in the premarket after its quarterly profit and revenue fell short of Wall Street forecasts. DocuSign had previously warned that a return to post-Covid working conditions could cut into its business.

    Vail Resorts (MTN) – Vail Resorts rallied 6.7% in premarket trading after the resort operator posted better-than-expected quarterly results. Vail benefited from an easing of Covid-related restrictions and noted successful efforts to attract visitors outside of its peak skiing season.
    Stitch Fix (SFIX) – Stitch Fix shares slumped 15.4% in premarket action after the online clothing styler posted a wider than expected quarterly loss and gave weaker than expected revenue guidance. Stitch Fix also said it would cut 330 jobs, about 4% of its total workforce.
    Rent The Runway (RENT) – The fashion rental company posted a smaller-than-expected quarterly loss while its revenue came in above Wall Street forecasts. Sales doubled from a year earlier and Rent The Runway also issued an upbeat current-quarter revenue forecast. Shares jumped 8.2% in the premarket.
    Illumina (ILMN) – The maker of gene-based therapies saw its shares decline 4.2% in the premarket after announcing the departure of Chief Financial Officer Sam Samad, who is taking the CFO role at Quest Diagnostics (DGX).
    Netflix (NFLX) – Netflix slid 4.7% in premarket trading after Goldman Sachs downgraded the stock to “sell” from “neutral” and cut the price target to $186 per share from $265. Goldman said it was focusing on a number of factors, including an increased focus on profitability and lower investor tolerance for long-term investments as Netflix and other web-based businesses mature. In the same report, Goldman also cut to “sell” from “neutral” video game company Roblox (RBLX), down 4.7% in the premarket, and eBay (EBAY), down 3.6%.

    Angi (ANGI) – The home services company reported a 24% jump in May revenue, compared with a year earlier, even as service requests fell 7%. Separately, the company announced the departure of Chief Financial Officer Jeff Pederson.
    CME Group (CME) – The exchange operator’s stock gained 2.3% in the premarket after Atlantic Equities upgraded it to “overweight” from “neutral.” The firm said CME has the strongest fundamental backdrop among U.S.-based exchanges and that a recent drop in the stock provides an attractive entry point.
    Kontoor Brands (KTB) – Goldman Sachs downgraded the stock to “neutral” from “buy,” noting that increasing cost pressures have been weighing on results and earnings growth for the parent of the Lee and Wrangler apparel brands. Kontoor Brands fell 1% in the premarket.

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    'Buy now, pay later' firms were already in trouble. Apple just gave them one more thing to worry about

    The iPhone maker announced plans to launch Apple Pay Later, which would allow users to pay for things over monthly installments without interest.
    That puts “buy now, pay later” players like PayPal, Affirm and Klarna in an awkward spot.
    A triple whammy of rising inflation, higher interest rates and slowing economic growth have put the industry’s future in doubt.

    Apple Pay Later will let users pay for things over four equal installments.
    Jakub Porzycki | Nurphoto | Getty Images

    AMSTERDAM — Apple’s move into the crowded “buy now, pay later” space has raised the stakes for the fintech companies that pioneered the trend.
    The iPhone maker announced plans to launch its own “pay later” loans on Monday, expanding an array of financial services products which already includes mobile payments and credit cards. Called Apple Pay Later, the service will allow users to pay for things over four equal installments, paid monthly without interest.

    That puts BNPL players like PayPal, Affirm and Klarna in an awkward spot. The fear is that Apple, a $2 trillion company and the world’s second-largest smartphone manufacturer, could draw clients away from such services. Shares of Affirm have sunk 17% so far this week on the news.
    The BNPL market had already been showing signs of trouble. Last month, Klarna laid off 10% of its global workforce, blaming the war in Ukraine and fears of a recession.
    A triple whammy of rising inflation, higher interest rates and slowing economic growth have put the industry’s future in doubt. Climbing borrowing costs have already made debt more expensive for some BNPL firms.
    “It’s going to end up in trouble because credit always has to unwind and get paid back,” Charles McManus, CEO of U.K. fintech firm ClearBank, told CNBC at the Money 20/20 Europe fintech conference in Amsterdam.
    “As interest rates start rising and inflation starts rising, all the chickens will come home to roost.”

    McManus said the sector is pushing people into debt they can’t afford to pay back and should therefore be regulated. The U.K. is seeking to push through BNPL regulation, while U.S. regulators have opened a probe into the sector.
    “Do I pay my gas bill or do I pay off the armchair I bought three years ago on interest-free credit that is coming due?” McManus said, warning that “excesses always come back.”
    Apple said it will handle lending and credit checks for Apple Pay Later through an internal subsidiary, taking Goldman Sachs — which has previously worked with the firm on its credit card — out of the equation. The move is a significant step that will give Apple a much bigger role in financial services than it currently plays.
    Speaking on CNBC Friday, Klarna CEO Sebastian Siemiatkowski said the launch of Apple Pay Later was an “amazing” thing for consumers and defended his company’s business model.
    “This is a better model for consumers than the traditional one of credit cards,” he said. Klarna is a more agile lender compared to banks and “actually extremely recession-proof,” Siemiatkowski added.
    Ken Serdons, chief commercial officer of Dutch payments start-up Mollie, said Apple’s BNPL feature “raises the bar” for fintechs operating in the market. Mollie offers installment loans through a partnership with fellow fintech firm in3.
    “The BNPL space is getting crowded with lots of new players still entering the market,” he said.
    “It will be hard for players with a subpar proposition to compete effectively against the best players out there.”
    However, James Allum, senior vice president of Europe at payments firm Payoneer, said there’s enough room in the market for various different companies to compete.
    “Businesses should be looking at opportunities for collaboration rather than competition and threats,” he said.

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    Diseases suppressed during Covid are coming back in new and peculiar ways

    As the Covid-19 pandemic and resultant social restrictions have abated in much of the world, other viruses are rearing their heads in new and unusual ways.
    Influenza, Respiratory syncytial virus, adenovirus, tuberculosis and monkeypox are among a number of viruses to have spiked and exhibited strange behaviors in recent months.
    Health experts say Covid-19 restrictions could have reduced exposure and lowered immunity to infectious diseases, making society more vulnerable to new outbreaks.

    Dowell | Moment | Getty Images

    The Covid-19 pandemic has abated in much of the world and, with it, many of the social restrictions implemented to curb its spread, as people have been eager to return to pre-lockdown life.
    But in its place have emerged a series of viruses behaving in new and peculiar ways.

    Take seasonal influenza, more commonly known as the flu. The 2020 and 2021 U.S. winter flu seasons were some of the mildest on record both in terms of deaths and hospitalizations. Yet cases ticked up in February and climbed further into the spring and summer as Covid restrictions were stripped back.
    “We’ve never seen a flu season in the U.S. extend into June,” Dr. Scott Roberts, associate medical director for infection prevention at Yale New Haven Hospital, told CNBC Tuesday.
    “Covid has clearly had a very big impact on that. Now that people have unmasked, places are opening up, we’re seeing viruses behave in very odd ways that they weren’t before,” he said.
    And flu is just the beginning.

    We are seeing very atypical behaviors in a number of ways for a number of viruses.

    Dr Scott Roberts
    associate medical director for infection prevention, Yale New Haven Hospital

    Respiratory syncytial virus, a cold-like virus common during winter months, exhibited an uptick last summer, with cases surging among children in Europe, the U.S and Japan. Then, in January this year, an outbreak of adenovirus 41, usually responsible for gastrointestinal illness, became the apparent cause of a mysterious and severe liver disease among young children.

    Elsewhere, Washington State has been experiencing its worst flare-up of tuberculosis in 20 years.
    And now, a recent outbreak of monkeypox, a rare viral infection typically found in Central and West Africa, is baffling health experts with over 1,000 confirmed and suspected cases emerging in 29 non-endemic countries.

    Viruses behaving badly

    At least two genetically distinct monkeypox variants are now circulating in the U.S., likely stemming from two different spillover infections from animals to humans, the U.S. Centers for Disease Control and Prevention said last week.
    The World Health Organization noted earlier last week that the virus, whose symptoms include fever and skin lesions, may have been going undetected in society for “months or possibly a couple of years.”

    A section of skin tissue, harvested from a lesion on the skin of a monkey, that had been infected with monkeypox virus, is seen at 50X magnification on day four of rash development in 1968. 
    CDC | Reuters

    “The two strains probably indicate this has been going on longer than we first thought. We’re at a concerning time right now,” said Roberts. He noted that the coming weeks will be telling for the course of the virus, which has an incubation period of 5 to 21 days.
    It is not yet clear whether the smallpox-like virus has mutated, though health experts have reported that it is behaving in new and atypical ways. Most notably, it appears to be spreading within the community — most commonly through sex — as opposed to via travel from places where it is typically found. Symptoms are also appearing in new ways.
    “Patients are presenting differently than we were previously taught,” said Roberts, noting that some infected patients are bypassing initial flu-like symptoms and immediately developing rashes and lesions, specifically and unusually on the genitals and anus.
    “There’s a lot of unknowns that do make me uneasy. We are seeing very atypical behaviors in a number of ways for a number of viruses,” he said.

    Restrictions reduce exposure, immunity

    One explanation, of course, is that Covid-induced restrictions and mask-wearing over the past two years have given other infectious diseases little opportunity to spread in the ways they once did.
    Where viruses did manage to slip through, they were frequently missed as public health surveillance centered largely on the pandemic.
    That indeed was the case in Washington’s tuberculosis outbreak, according to local health authorities, who said parallels between the two illnesses allowed TB cases to go undiagnosed.

    During the Covid pandemic, access to primary care, including childhood vaccinations, was unavailable to many children.

    Jennifer Horney
    professor of epidemiology, University of Delaware

    Now, as pandemic-induced restrictions have eased and usual habits resumed, viruses that were in retreat have found a fertile breeding ground in newly social and travel-hungry hosts.
    The recent monkeypox outbreak is thought to have stemmed, at least in part, from two mass events in Europe, a lead adviser to the WHO said last month.
    Meantime, two years of reduced exposure have lowered individual immunity to diseases and made society as a whole more vulnerable. That is especially true for young children — typically germ amplifiers — who missed opportunities to gain antibodies against common viruses, either through their mother’s womb or early years socializing.

    Missed childhood vaccinations

    That could explain the uptick in curious severe acute hepatitis cases among children, according to health experts who are looking into possible links to Covid restrictions.
    “We are also exploring whether increased susceptibility due to reduced exposure during the Covid-19 pandemic could be playing a role,” the U.K. Health Security Agency said in April.

    Morsa Images | Digitalvision | Getty Images

    The Centers for Disease Control and Prevention has also expressed concern that lockdowns may have caused many children to miss childhood vaccinations, potentially raising the risks of other vaccine-preventable illnesses such as measles and pertussis.
    “During the Covid pandemic, access to primary care, including childhood vaccinations, was unavailable to many children,” Jennifer Horney, professor of epidemiology at the University of Delaware, told CNBC.
    “To prevent increases in these diseases, catch-up vaccination campaigns are needed globally,” she added.

    Beware surveillance bias

    That said, there is also now greater awareness and surveillance of public health issues in the wake of the pandemic, making diagnoses of some outbreaks more commonplace.
    “Covid has raised the profile of public health matters so that we are perhaps paying more attention to these events when they occur,” said Horney, adding that public health systems set up to identify Covid have also helped diagnose other diseases.
    Professor Eyal Leshem, infectious disease specialist at Sheba Medical Center, agreed: “The general population and the media have become much more interested in zoonotic outbreaks and infectious diseases.”

    It’s not that the disease is more prevalent, but that it gets more attention.

    Professor Eyal Leshem
    infectious disease specialist, Sheba Medical Center

    However, he also warned of the role of “surveillance bias,” whereby individuals and medical professionals are more likely to report cases of diseases as they grow more high profile. That suggests that some viruses, such as monkeypox, may appear to be growing when in fact they were previously underreported.
    “It’s not that the disease is more prevalent, but that it gets more attention,” Leshem said.
    Still, the increased monitoring of infectious disease outbreaks is no bad thing, he noted. With the increased spread and mutation of infectious diseases — as seen with Covid-19 — the more awareness and understanding of the changing nature of diseases, the better.
    “The public and media attention will help governments and global organizations direct more resources into surveillance and protection of future pandemics,” Leshem said, highlighting research, surveillance and intervention as three key areas of focus.
    “These investments have to occur globally to prevent and mitigate the next pandemic,” he said.

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