Raphael Stevens

Justin Ellen found himself at a difficult crossroad when he was 17 — should he pursue his passion for baking full-time, or go to college to further his education?
At that time, the youngest contestant of Netflix’s popular baking show was making custom cakes from home as a side-hustle, while also juggling with school.

He was bringing home at least $5,000 a month, but he couldn’t help but compare himself to his peers.
“The thing that got me down was like, I was seeing all my friends [apply for colleges].”
Nonetheless, the young celebrity baker stuck to his guns, believing that “everyone has their own path.”

Just two years later, the full-time entrepreneur and owner of cake business, Everything Just Baked, is earning more than $100,000 a year — and he’s not turning back.
In March this year, he made his debut on Netflix’s “Is It Cake?” — a baking contest where cake artists create edible replicas of everyday objects, such as bowling pins and sewing machines.

The show, which premiered on the streaming service on March 18, was in the Top 10 most-watched list in the U.S. for four weeks. It also raked in more than 100 million hours of views from around the world.
But the path of success is not without failures, Ellen tells CNBC Make It. Sheer hard work and wise words from loved ones also helped prod him along.

‘Who made this cake?’

As a digital native, Ellen knew from the start that having a social media presence would be crucial in building his business. But it took a lot of practice — and courage — to make himself known. 
“In the beginning, my social media wasn’t great … not great photos, they were very blurry. But as I kept on progressing, I realized they have to be super clean.”
Ellen also saw that Instagram was “really pushing” video content on the platform and that’s when he decided to turn the camera on himself, sharing snippets of his life as a young baker. 

“I was definitely shy in the beginning because it was just awkward for me … but the more you do it, it’s like, oh well and honestly no one cares if your hair’s a little frizzy today,” he shared.
“Honestly, it makes you more relatable. People want to know the person behind the brand and if they enjoy you, they’re gonna want to spend money with you.”

Even so, Ellen said that posting on social media was something he “didn’t take seriously” at the start.
“I was just posting for fun. Eventually, [through] word of mouth … people kept asking ‘Can I order a cake?'”
Ellen also slowly built his following and clientele by baking whenever he had the chance, even if it was for family events.
“It doesn’t even have to be a huge cake … just make something small because you don’t know who’s going to be there. Someone’s going to eat it and ask, ‘Who made this cake?'”

People are buying designer purses for thousands of dollars. You have got to make your customers understand the worth in your brand and what you’re providing them …

Justin Ellen
Owner, Everything Just Baked

Before he knew it, he had over 50,000 followers on Instagram and was earning about $5,000 to $9,000 a month in high school.
“I realized, wow, this could be a serious business.”

From baker to entrepreneur  

As he saw his side hustle gain momentum in high school, Ellen started thinking about pursuing baking as a career. But not everyone approved.
“My dad was like, a baker? I feel like there’s a connotation [with baking] like, ‘Oh, you don’t make a lot of money’ or ‘You have to do a lot of work,'” he said.
But Ellen had bigger plans for himself.
“I realized that I didn’t have to think small. There’s so much you could do in the field … think about every lane you could go into.”

“I looked at other bakers who created their business — they have product lines, which I had no idea that that’s something you can even do.”
It was around this time that Ellen, like his friends around him, had to think about what’s next after high school.
“Probably around junior year, when everyone’s like searching for colleges … I was debating [about] going to culinary school. [But] I realized it wasn’t for me,” he said.

If you want to be a baker, then go work for someone else.

Justin Ellen
Owner, Everything Just Baked

“I just felt like it wasn’t worth it and it was a lot of money. And you can’t really teach how to do art in a sense, it’s really just practice — and the more you practice, the easier it’s going to get.”
That was the pivotal moment for Ellen, who realized he was not just a baker in high school anymore.
“[I’m an] entrepreneur first, then a baker. If you want to be a baker, then go work for someone else.”

Best business advice

Social media may have been “completely free” to use as a form of marketing, but Ellen needed help with the initial capital to get his business up and running.
“In the beginning I was selling cookies that I shipped out … I asked my parents for $500 to buy boxes and other materials.”
That was the first and last time he ever asked his parents for money for his business, he said.

Running a business is expensive. You don’t want to waste money just because you think you have a good idea.

Justin Ellen
Owner, Everything Just Baked

Even though his parents had doubts about his business in the early days, Ellen attributes his success to their wise words: Always reinvest what you earn.
“I was able to reinvest the money that [I got from] people purchasing, back into my business. I didn’t go buy Jordans,” he said with a laugh, referring to Nike’s popular Air Jordan sneakers that can cost at least $200.
That mindset is something that his parents — who run their own real estate company — instilled in him, Ellen said. More

Shares of Southeast Asia’s e-commerce and gaming firm Sea Group popped after its first-quarter revenue beat analysts’ expectations on Tuesday.
Sea’s U.S.-listed shares rose 14% to close at $80.21 after the of Singapore-based internet firm reported revenue that exceeded analysts’ expectations in the first quarter this year.
E-commerce and gaming revenue fell from the previous quarter, a sign business is slowing as countries emerge from the pandemic.

Shares of Southeast Asia’s e-commerce and gaming firm Sea Group popped after its first-quarter revenue beat analysts’ expectations on Tuesday.
Sea’s U.S.-listed shares rose 14% to close at $80.21 after the of Singapore-based internet firm reported revenue that exceeded analysts’ expectations in the first quarter this year.

Here’s how the New York Stock Exchange-listed company did in the January to March period:

Revenue: $2.9 billion vs. $2.76 billion as expected by analysts, according to Refinitiv.
Net Loss: $580.1 billion vs. $722 billion as expected by analysts, according to Refinitiv.

Sea’s revenue rose by 64.4% from the same period a year earlier, but fell around 9.5% from the $3.2 billion it made in revenue in the previous quarter, a sign that after two years of pandemic-driven sales, growth is starting to plateau.
It’s online shopping platform Shopee and gaming arm Garena grew more slowly as countries opened up.

Singapore, Singapore – 2021: A large Shopee logo at the entrance to the e-commerce platform’s headquarters at Science Park. (Exact photography date unknown due to incorrect camera settings)
Kokkai | Istock Unreleased | Getty Images

The company warned that inflation and supply chain disruptions could affect business, even as it continues to be loss-making.
“As we enter a new period, we recognize that the current macro trend and uncertainties could affect our region and world in the near term,” said Forrest Li, Sea’s chief executive officer and co-founder during the earnings call.

Both Shopee and Garena, Sea’s two main money-making divisions, faced lower revenues compared to the previous quarter.

E-commerce: Shopee

E-commerce revenues generated by Shopee was $1.52 billion in the first quarter, down from $1.59 billion in the previous quarter. Heavy logistics and marketing expenses led to $810 million in losses — that’s $131 million less than the previous quarter.
The company revised its full-year revenue guidance for Shopee to between $8.5 billion and $9.1 billion, citing “elevated macro uncertainties.”
Sea’s chief corporate officer Yanjun Wang pointed out that the company was not lowering its guidance, but widening it as a way of caution. Its previous guidance was between $8.9 billion to $9.1 billion.

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But the amount that people spend on each order could trend downwards, according to Kristine Lau, an analyst at research firm Third Bridge.
“Inflation’s impact on discretionary spending is one,” she said, referring to non-essential items such as entertainment and luxury goods.
“For a lot of the high-frequency items or just daily necessities that people had to buy online — either it was out of stock offline or it just made more sense to use Shopee when everything is in lockdown — I think a lot of that would be reallocated to offline retail,” Lau added.

Gaming: Garena

Garena, which has long been Sea’s profit maker, posted sales of $1.1 billion. Net profit for the gaming arm was up 52.2% (or $432 million) from the same period a year ago, but down 23.5% (or $859 million) from the previous quarter
Quarterly active users were down 32.9 million year-on-year, while quarterly paying users dropped by more than 18 million to 61.4 million from 79.8 million a year ago, matching worries that there is now weaker demand for mobile games in a post-pandemic world.
Much of the loss could be attributed to a ban in India too. Earlier this year, India blocked Garena’s hit mobile game Free Fire, along with 53 other apps with links to China.
Chinese tech giant Tencent is a major shareholder of Sea. In January, Tencent sold $3 billion worth of Sea shares, reducing its stake from 21.3% to 18.7%.

Tech sell-down

Shares of Sea have been hammered by the broader tech selloff. Its stock has fallen by more than 80% since its October 2021 high when it hit $366.99. Prices fell to a two-year low of around $57 earlier this month.

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Investors are also concerned over its cash-burning model Sea has spent hundreds of millions, even billions of dollars every quarter on marketing, particularly on subsidies to attract consumers and merchants onto Shopee, which competes with the likes of Amazon, Alibaba’s Lazada in Southeast Asia, and Mercado Libre in Latin America.
Shopee has a presence across 13 countries and is in Southeast Asia, Latin America, and Europe. It pulled its Shopee business out of India and France in March this year, just months after venturing into the two countries.

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In 2014, Toyota launched the Mirai, a hydrogen fuel cell sedan.
Alongside the Mirai, Toyota has had a hand in the development of larger hydrogen fuel cell vehicles.
While the Japanese firm looks to push ahead with plans for vehicles that use hydrogen, other influential voices in the automotive sector are not so sure.

One of Toyota’s Sora busess photographed in Japan on Nov. 5, 2021. Toyota started working on the development of fuel-cell vehicles back in 1992.
Korekore | Istock Editorial | Getty Images

Toyota Motor Europe, CaetanoBus and Air Liquide have signed an agreement related to the development of hydrogen-based transport options, as the race to develop low and zero-emission vehicles heats up.
In a statement Tuesday, Toyota said the deal would aim for what it called “closer cooperation in developing opportunities for hydrogen mobility projects in several European countries.” CaetanoBus is based in Portugal and part of Toyota Caetano Portugal and Mitsui & Co.

The firms are set to focus on a number of areas related to hydrogen, including infrastructure connected to distribution and refueling; low-carbon and renewable hydrogen production; and deploying hydrogen in a range of vehicle types.
Toyota said the initial focus would be on “buses, light commercial vehicles and cars, with a further aim to accelerate the heavy-duty truck segment.”

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Toyota started working on the development of fuel-cell vehicles — where hydrogen from a tank mixes with oxygen, producing electricity — back in 1992. In 2014, it launched the Mirai, a hydrogen fuel cell sedan. The business says its fuel cell vehicles emit “nothing but water from the tailpipe.”
Alongside the Mirai, Toyota has had a hand in the development of larger hydrogen fuel cell vehicles. These include a bus called the Sora and prototypes of heavy-duty trucks. As well as fuel cells, Toyota is also looking at using hydrogen in internal combustion engines.
While the Japanese automotive giant looks to push ahead with plans for vehicles that use hydrogen — firms like Hyundai and BMW are also looking at hydrogen — other influential voices in the automotive sector are not so sure.

In June 2020, Tesla CEO Elon Musk tweeted “fuel cells = fool sells,” adding in July of that year: “hydrogen fool sells make no sense.”
In Feb. 2021, Herbert Diess, the CEO of Germany’s Volkswagen Group, also weighed in on the subject. “It’s time for politicians to accept science,” he tweeted.
“Green hydrogen is needed for steel, chemical, aero … and should not end up in cars. Far too expensive, inefficient, slow and difficult to roll out and transport. After all: no #hydrogen cars in sight.”
While Diess and Musk would appear to be wary when it comes to hydrogen’s prospects in cars, their focus on battery electric vehicles puts them in direct competition with other firms like GM and Ford.
The latter’s CEO, Jim Farley, recently said his business planned to “challenge Tesla and all comers to become the top EV maker in the world.”

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The drive to find zero and low emission alternatives to diesel and gasoline comes at a time when major economies are laying out plans to reduce the environmental footprint of road-based transportation.
In Europe, for instance, the European Commission, the EU’s executive arm, has proposed a 100% reduction in CO2 emissions from cars and vans by 2035.  
On Tuesday, Ford Europe, Volvo Cars and a number of other high-profile businesses signed a joint letter asking EU governments and the European Parliament to give the Commission’s proposal the green light.
The letter called on EU government representatives and MEPs to “put in place an EU-wide phase-out for sales of new internal combustion engine passenger cars and vans (including hybrids) no later than 2035.”
“This should be enshrined into legislation by setting the 2035 fleet-wide CO2 target at 0 gram CO2/km for vehicle manufacturers,” the letter said. More

A report from the Food and Agriculture Organization of the U.N. describes seaweed farming as being “dominated by countries in East and Southeast Asia.”
Toward the end of April, a project dubbed the U.K.’s “first dedicated seaweed industry facility” celebrated its official opening.
The U.S. is also home to an emerging sector, with the NOAA stating there are now “dozens of farms” in waters off New England, Alaska and the Pacific Northwest.

Like many coastal communities around the world, people living by the sea in the United Kingdom have harvested and consumed seaweed for centuries.
In Wales, Welsh laverbread — made from cooking a type of seaweed called laver — is a culinary delicacy so revered that it enjoys Protected Designation of Origin status.

Seaweed’s uses do not end at the dinner table, either: Today, it’s found in everything from cosmetics and animal feed to gardening products and packaging.
With concerns about the environment, food security and climate change mounting, this wet, edible treasure of the sea — of which there are many varieties and colors — could have a major role to play in the sustainable future of our planet, and the U.K. wants in on the act.  
Toward the end of April, a project dubbed the U.K.’s “first dedicated seaweed industry facility” celebrated its official opening, with those involved hoping it will help kickstart the commercialization of a sector that’s well established in other parts of the world.
The Seaweed Academy, as it’s known, is located near the Scottish town of Oban. Funding of £407,000 (around $495,300) for the project has been provided by the U.K. government.
It will be run by the Scottish Association for Marine Science in partnership with its trading subsidiary SAMS Enterprise and educational institution UHI Argyll.

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According to a statement from SAMS, one of the academy’s goals centers around stimulating “the growth of UK seaweed aquaculture.” On top of this, the project will look to explore “high-value markets” and use research to boost the worldwide competitiveness of U.K. products.
Rhianna Rees is a seaweed researcher and Seaweed Academy coordinator at SAMS Enterprise. In a recent interview with CNBC, she provided an insight into the type of jobs that went on at a seaweed farm.
“It’s a lot less industrial than it might come across,” she said. “When you think of farming you think of big machinery, you think of mechanical harvesting, and that’s not at all what seaweed farming is about.”
“When you look at it from the outside, all you can see are buoys in the water and then under the water are these long lines of rope with … huge swathes of seaweed,” she went on to explain.
“When you want to harvest it, you go in and you get the rope and you pull it into the boat — and that’s basically it,” she said.
The apparent simplicity of the process is one thing, but setting up a farm in the first place can be a different story altogether.
“Getting licenses from … the different organizations within England and Scotland — it can be incredibly expensive and time consuming,” Rees said. “So there are major challenges to entering the industry in the first place.”
There were also other factors to consider. “You get storm events, you get maybe years where it doesn’t grow particularly well, fluctuations in nutrients,” she said.
There was innovation on the horizon, Rees went on to note, but it would “take a few years to get to the area where we see the kind of optimization that we need for real scalability.”
Cross country
The U.K.’s interest in cultivating and harvesting seaweed is not restricted to the work being planned in and around Oban.
In the picturesque county of Cornwall on the southwest tip of England, the Cornish Seaweed Company has been harvesting since 2012, providing a glimpse of how the wider industry could develop in the years ahead.
Tim van Berkel, who co-founded the company and is its managing director, told CNBC the firm wild-harvested seaweed from the shores for food purposes.
In 2017, the business supplemented this shore-based harvesting when it started to farm seaweed from spores at the site of an existing mussel farm in waters off Porthallow, a Cornish fishing village. 
“They grow on lines suspended in the water, like buoys really,” van Berkel said, adding that it was “similar to mussel farming.” The business was farming two types of seaweed at the site, van Berkel said: sugar kelp and alaria.

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Despite establishing the site at Porthallow, for now the company’s core focus relates to its shore-based harvesting. “That’s really still the main business,” van Berkel said. “There’s five, six, other seaweeds that we harvest … from the wild, from the shores, which is going on year round.”
Other companies looking to make their mark include SeaGrown, which is based in the coastal town of Scarborough, Yorkshire, and is working on setting up a seaweed farm in the North Sea.
Further north, Seaweed Farming Scotland’s operations are located in Oban and focused on the cultivation of species native to the waters there.
The global picture

An aerial view of people working at a seaweed farm in Zhejiang province, China, on November 24, 2021.
Jiang Youqing | Visual China Group | Getty Images

In 2020, a report from the Food and Agriculture Organization of the U.N. described seaweed farming as being “dominated by countries in East and Southeast Asia.”
The industry is big business, with the FAO separately noting that the seaweed sector generated $14.7 billion in “first-sale value” in 2019.
With the U.K.’s commercial seaweed sector still in its early stages, it has a way to go before it competes on the global stage.
Seaweed farming in Asia can often be large-scale, with sites spread across quite considerable areas, as shown in the above photo of a farm in the province of Zhejiang, China.
The U.S. is also home to a seaweed farming sector, with the National Oceanic and Atmospheric Administration stating there are now “dozens of farms” in waters off New England, Alaska and the Pacific Northwest.
Alongside the commercial products resulting from seaweed farming, there are other benefits too, an obvious one being that it does not require fresh water.
For its part, the NOAA says that “seaweeds are incredibly efficient at sucking up carbon dioxide and using it to grow.” In addition, it notes that “seaweeds also gobble up nitrogen and phosphorus.”
While there are concerns related to permitting in some parts of the U.S., the industry there has expanded in recent years, with the NOAA calling it the “fastest-growing aquaculture sector.”
It adds that 2019 saw Alaska-based farmers produce over 112,000 pounds of sugar, ribbon, and bull kelp. “That’s a 200 percent increase over the state’s first commercial harvest in 2017,” it says.
Worldwide, the industry seems to have been on a rapid course of expansion over the past two decades or so. The FAO’s report said global marine macroalgae — another name for seaweed — production had risen from 10.6 million metric tons in 2000 to 32.4 million metric tons in 2018.
It’s not all been plain sailing, however. “Global production of farmed aquatic algae, dominated by seaweeds, experienced relatively low growth in the most recent years, and even fell by 0.7 percent in 2018,” the FAO’s report noted.

An aerial view of a site used for seaweed farming in waters off Bali, Indonesia.
Sasithorn Phuapankasemsuk | Istock | Getty Images

And while there would appear to be a multitude of products and benefits linked to seaweed farming, there are also issues those working in the industry will need to address and carefully manage going forward. 
The World Wildlife Fund, for example, notes that, in some instances, species of seaweed have become “invasive when grown outside their natural range.”
The WWF also cites the “entanglement of protected species with seaweed farm rope structures” as a “potential concern” but adds that such an occurrence is unlikely and “no credible documented marine entanglements” have taken in place in 40 years.
Back in Scotland, the Seaweed Academy’s Rees is optimistic for what the future holds. “I think we’re really poised to see the growth,” she said. “I just hope that the hype isn’t hype for the wrong reasons.”
“And as long as we’re all … working together to get the message and to get the training and to get development right, along with support from governments and investors, then we’ll see something that’s really beneficial for the world, really sustainable.” More

Air travel in United States, Europe and Latin America are seeing strong growth rates, hitting 60% of where they used to be in 2019, said the International Air Transport Association.
Drew Angerer | Getty Images

International air travel is making strong recovery this year, with the exception of the Asia-Pacific region, which is “lagging significantly behind,” according to the International Air Transport Association.
“Last year, international travel was at about 25% of where it was in 2019. First quarter of this year across the globe, it’s up 42%,” Willie Walsh, the director general of the industry body, told “Squawk Box Asia” on Tuesday.
Air travel in Asia is “only about 13% of where it was in 2019,” Walsh added.

International air travel has been making a strong recovery this year, with the exception of the Asia-Pacific region, which is “lagging significantly behind,” according to the International Air Transport Association (IATA).
“Last year, international travel was at about 25% of where it was in 2019. First quarter of this year across the globe, it’s up 42%,” Willie Walsh, the director general of the industry body, told “Squawk Box Asia” on Tuesday.

“In fact, what we’re seeing is very strong growth rate in some markets, from the U.S., Europe, Latin America, all touching around 60%.”
For example, United Airlines’ shares added more than 3% in extended trading on Monday, after the company issued an update on its second-quarter outlook.
In contrast, air travel in Asia is “only about 13% of where it was in 2019,” Walsh added.
China is still pursuing its zero-Covid policy, with Shanghai and Beijing tightening restrictions on business and travel. But China’s travel restrictions will not play a big role in global air travel recovery, he said.

“The positive is that there are lots of other markets opening up so airlines have an opportunity to expand their network … to those markets,” he added.

‘Premium’ travel uptick

When asked if the business segment of the airline industry will be returning to pre-pandemic levels, Walsh said that recovery will be “a bit slower.”
“We get a lot of business people traveling in economy … business recovery is lagging slightly,” he added.
“But I think everybody would now accept that it’s not going to have a fundamental structural shift that we all believed might happen.”
In contrast, he observed that there are more “premium” travelers who are travelling in first class or business class.
“That points to what has been a very important segment of the market, which we call premium leisure … what we’re seeing there is people have more disposable income and are prepared to pay for that premium and experience.”
“I fully expect premiums [to] continue to recover quickly,” Walsh added.

To meet that demand, airlines are offering luxury cabins in the hope of getting high-paying customers to shell out for more space on board.
For example, Singapore Airlines observed that business-class seats on planes have been selling out before economy seats, which is a “reversal of a pre-pandemic trend.”

Challenges for air cargo

Even as recovery for air travel gains momentum, the IATA sees “some challenges” for the global air cargo market.
“We had record performance in 2021 and continues to improve in 2022 … but it’s just dipped a little bit behind those highs of 2021.”
Walsh attributed it mostly to Russia’s attack on Ukraine. “A lot of cargo was carried by Russian cargo operators, security has been totally destroyed,” he added.
IATA said in a report that air cargo volume dropped 5.2% year on year in March.
“The war in Ukraine led to a fall in the capacity used to serve Europe, as several airlines based in Ukraine and Russia were crucial carriers in the region,” it wrote.
“The ongoing spread of Omicron in Asia, and China in particular, is causing new lockdowns and labor shortages. These have strongly impacted manufacturing centers in China and Asia that in turn have hurt air cargo transport in markets linked the region.”

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U.S. stock futures were mixed on Tuesday evening as investors looked to build on a solid rally.
Futures for the Dow Jones Industrial Average added just 9 points. S&P 500 futures sat below the flatline and Nasdaq 100 futures ticked about 0.1% lower.

The move in futures came as the stock market’s recent sell-off appeared to have paused. On Tuesday, the Dow rose 431 points, or 1.3%, while the S&P 500 gained 2% and the Nasdaq Composite climbed nearly 2.8%.
The Dow has declined for seven straight weeks, but stocks have stabilized over the last three trading sessions.
Last week, the S&P 500 fell to the brink of a bear market — or 20% below its record high — but the index has now gained 4% since Thursday’s close.
Stocks and other risk assets have been pressured by inflation and the Federal Reserve’s attempt to tamp down price increases through rate hikes, which has led to concerns about a potential recession. Fed Chair Jerome Powell said at a Wall Street Journal conference on Tuesday that “there won’t be any hesitation” about raising rates until inflation is under control.
However, some recent economic data, including the jobs report and retail sales data from April, still show the U.S. economy growing.

“There’s a big difference between corrections in the equity markets and outright bear markets,” said Matt Stucky, a senior portfolio manager at Northwestern Mutual Wealth Management. “The difference being bear markets are almost always sort of associated with some kind of recessionary macroeconomic environment, or at least an inevitable one in the forecast horizon over the next six-to-12 months. For us, as we sit here today, we just don’t see that.”
A busy week of retail earnings continues on Wednesday, with Target and Lowe’s reporting results before the opening bell.
Investors will also get an updated look at the housing market, with data for housing starts and building permits for April due out Friday morning.

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House Democrats have introduced legislation to beef up Food and Drug Administration baby formula inspections in response to the plant closure that triggered a supply shortage.
The House will hold hearings on the infant formula shortage with FDA Commissioner Robert Califf.

House Democrats will hold hearings on the baby formula shortage in the U.S., and move to pass legislation to increase Food and Drug Administration inspection staff to ensure that imported products are safe for infants to consume.
Rep. Rosa DeLauro, chair of the House Appropriations Committee, introduced legislation on Tuesday that would provide the FDA with $28 million in emergency funding to ramp up inspections at baby formula plants around the world.

The FDA is increasing baby formula imports from other countries to help ease the shortage. It stems in part from the closure of Abbott Nutrition’s plant in Sturgis, Michigan, due to bacterial contamination at the facility. The U.S. normally produces 98% of the infant formula that Americans buy, and four manufacturers — Abbott, Mead Johnson Nutrition, Nestle USA and Perrigo — control 90% of the domestic market.

Rep. Rosa DeLauro, D-Conn., left, the House Appropriations Committee chair, and Speaker of the House Nancy Pelosi, D-Calif., confer during a news conference on the House Democrats $28 million emergency spending bill to address the shortage of infant formula in the United States, at the Capitol in Washington, Tuesday, May 17, 2022.
J. Scott Applewhite | AP

To sell formula in the U.S., foreign companies are required to submit applications to the FDA, which would then review whether their products are safe and nutritious for infants.
However, DeLauro said the FDA told her that it only has nine people to inspect domestic formula plants, along with seven facilities in Europe and two in Mexico. The FDA could eventually have to inspect more plants if it approves additional submissions to sell formula.
“Those facilities have to be inspected. FDA does not have the adequate inspection force to be able to do that and to do it in a timely way,” DeLauro, D-Conn., told reporters during a news conference Tuesday. The legislation also includes funding for supply chain monitoring and money to root out fraud, she said.
DeLauro said House Democrats are also considering legislation that would strengthen the FDA’s authority to hold companies accountable. The drug regulator does not have the power to order manufacturers to recall unsafe products. It can only recommend a recall when it finds safety issues.

“The FDA has no power to recall. We say recall, but it really is a moral suasion issue,” House Speaker Nancy Pelosi, D-Calif., said at the news conference.

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A House Appropriations Subcommittee on Agriculture will hold a hearing on Thursday with FDA Commissioner Robert Califf on the infant formula shortage, DeLauro said. The House Energy and Commerce Committee has set another hearing on May 25 with Califf and the FDA’s food policy chief, Frank Yiannas, according to Rep. Frank Pallone, the committee chairperson.
Representatives from infant formula manufacturers Abbott, Gerber and Reckitt will also attend next week’s hearings, Pallone said.
The Justice Department, in a complaint filed in federal court Monday, alleged that Abbott introduced adulterated infant formula into the consumer market. Four infants who consumed formula made at the Sturgis plant were hospitalized with bacterial infections, two of whom died.
Abbott in a statement Monday maintained there’s “no conclusive evidence” to tie the infant illnesses to the company’s products.
As Democrats ramp up their efforts to address the crisis, they have also increased their calls for accountability.
“I think there might be a need for an indictment,” Pelosi said, without specifying who should face indictment. The speaker’s office did not response to requests for clarification.
Abbott and the FDA reached an agreement, subject to federal court enforcement, to reopen the plant after the company brings in outside experts to fix unsanitary conditions at the plant. However, Abbott has said it will take about two weeks to reopen, subject to FDA approval. It could take up to eight weeks for product to arrive in stores.
Abbott is subject to the agreement, called a consent decree, for at least five years. If it does not comply with the decree, the company is subject to $30,000 in damages for every day it’s in violation.
Abbott is required to shut down the Sturgis plant again if any product tests positive for Cronobacter sakazakii or Salmonella. It must then dispose of the product, find the contamination source and correct the problem.
Abbott would only be able to restart the plant when it receives clearance from the FDA.

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CNBC’s Jim Cramer said Tuesday that while the price of crude oil might see some gains, it’ll be limited in duration and scale, according to analysis from DeCarley Trading market strategist Carley Garner.
“Just keep in mind that while oil rallies, they tend to happen in the blink of an eye, oil sell-offs are just as quick,” the “Mad Money” host said.

CNBC’s Jim Cramer said Tuesday that while the price of crude oil might see some gains, it’ll be limited in duration and scale, leaning on analysis from DeCarley Trading commodity strategist Carley Garner.
“The charts, as interpreted by Carley Garner, suggest that the good news for oil might be mostly baked in, meaning the upside is limited. … Just keep in mind that while oil rallies, they tend to happen in the blink of an eye, oil sell-offs are just as quick,” the “Mad Money” host said.

Before getting into Garner’s interpretation, Cramer laid out two fundamental facts investors should be aware of to understand the analysis.

The U.S. West Texas Intermediate crude oil futures contract is a major benchmark for the overall price of oil. It’s also “among the healthiest, least volatile energy futures in the world,” Cramer said. 
It’s difficult to predict oil prices in a wartime situation. “We’ve got lots of political and economic turmoil, with the end result being tremendous volatility in the energy markets, coupled with shocking moments of illiquidity … as traders react to tight oil and gas supplies while they attempt to hedge against inflation,” he said.

Cramer started his explanation of Garner’s analysis by examining the weekly chart of the West Texas Intermediate crude. 
WTI crude settled $1.80, or 1.58%, lower at $112.40 per barrel on Tuesday.

Arrows pointing outwards

Garner says that measuring bull and bear markets by 20% swings shows the chart’s already had a year’s worth of price movements, according to Cramer. “In early March, we were seeing 20% swings practically every day. Since then, the volatility’s gotten less” intense but is still wild compared to history, Cramer said.
He also said that the price of WTI crude broke through its trendline ceiling of resistance when Russia invaded Ukraine, while before it had an “expanding wedge pattern,” according to Garner.

“If West Texas crude breaks down below $102, down about $10 from where it’s currently trading, then we can potentially go back to the wedge. If that happens, Garner thinks it could potentially lead to mass liquidation that takes oil back to the $70s,” he said, adding that high prices and global efforts to tamp down inflation will eventually slow demand.
Cramer also examined the Relative Strength Index, a momentum indicator, at the bottom of the chart. “While it’s currently pointing higher, it’s also nearing overbought levels. In the short-term, Garner thinks crude could have more upside, but eventually, she sees prices coming back down to the levels we would’ve seen before Russia invaded Ukraine. We just don’t know how long it will take,” he said.
Next, the monthly chart of WTI crude shows that since the widespread adoption of fracking, oil has had a ceiling at $120 a barrel – with prices briefly going higher when Russia invaded Ukraine – but failed to close above that level on a monthly basis. Garner doesn’t believe oil will be able to breach the $120 ceiling on its second attempt, Cramer said.

Arrows pointing outwards

The monthly Relative Strength Index is already overbought, he added. “That tells Garner oil prices are already extended and vulnerable to a swift decline if traders are ever given a reason to change course.”
Next, Cramer looked at the daily WTI chart, which he said shows that oil prices have shed a triangle pattern.

Arrows pointing outwards

“That’s catapulted crude higher, and while Garner could see a bit more upside in the near future, there’s also two ceilings of resistance, one at $115 and one at $120. Plus, as time goes on, she expects Wall Street’s focus to shift from supply constraints to the demand side of the equation,” he said, adding that he disagrees with her assessment.
“At the moment, I think oil still looks good. … As long as Russia’s a pariah state, oil’s got a strong floor underneath it,” he said.
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