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    Viking Therapeutics stock jumps 16% after drugmaker moves weight loss injection to late-stage trial

    Shares of Viking Therapeutics jumped on Thursday after the biotech company a day earlier announced plans to advance its experimental weight loss injection into a late-stage trial earlier than expected. 
    It brings the drugmaker one step closer to joining the highly popular market for GLP-1s, which analysts say could grow into a $150 billion market by the end of the decade. 
    Viking previously said it was expecting to start another mid-stage trial on its weekly injection, called VK2735, after reporting positive results from another phase two study in February. 

    Weight loss drug concept.
    Cr | Istock | Getty Images

    Shares of Viking Therapeutics jumped 16% in premarket trading Thursday after the biotech company a day earlier announced plans to advance its experimental weight loss injection into a late-stage trial earlier than expected. 
    It brings the San Diego-based company one step closer to joining the highly popular market for GLP-1s, which analysts say could grow into a $150 billion market by the end of the decade. 

    Viking is one of several small and large drugmakers hoping to compete in the space against Novo Nordisk and Eli Lilly, whose weight loss and diabetes GLP-1s have skyrocketed in demand over the last two years. 
    Shares of both Novo Nordisk and Eli Lilly fell around 2% in premarket trading Thursday. 
    Viking previously said it was expecting to start another mid-stage trial on its weekly injection, called VK2735, after reporting positive results from another phase two study in late February. 
    But after receiving written feedback from the Food and Drug Administration, the company has decided to move the injection directly into a phase three trial, CEO Brian Lian said during an earnings call on Wednesday. 
    Lian said the company is preparing to meet with the FDA in the fourth quarter to discuss the design and timing of that phase three trial, with plans to start the study afterward.

    That decision will likely shave a year off of Viking’s development timeline for the injection, BTIG analyst Justin Zelin said in a note on Wednesday. Currently, analysts estimate that the drug will launch in 2029, Zelin said. 
    During the call, Lian added that Viking expects to test VK2735 as a monthly injection in a future study. That could make the treatment a more convenient option than Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy, which are both taken once a week.
    Viking Therapeutics’ drug promotes weight loss by targeting a GLP-1 and another hormone called GIP. Those are the same hormones that Eli Lilly’s Zepbound and diabetes counterpart Mounjaro target.
    Patients who received weekly doses of the Viking’s injection in a phase two trial lost up to 14.7% of their body weight, or 13.1% when compared to placebo, after 13 weeks. 
    Viking is also developing an oral version of VK2735. That pill caused 3.3% weight loss when compared to a placebo in an early-stage trial.  More

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    American shares drop 5% on weak profit forecast after backfired sales plan, industry oversupply

    American Airlines slashed its profit forecast for the year after a backfired sales strategy and an industry-wide glut of flights.
    The carrier’s profit fell 46% during the second quarter even though revenues rose.

    American Airlines shares shed more than 5% in premarket trading Thursday after the carrier slashed its profit forecast for the year after a backfired sales strategy and an industry-wide glut of flights that have forced airlines to discount seats.
    American said it expects to earn an adjusted 70 cents to $1.30 per share this year, well below the $2.25 to $3.25 a share it forecast in April and short of the $1.10 to $2.60 a share that Wall Street analysts were expecting, according to LSEG.

    The Fort Worth-Texas based airline also estimated its unit revenue would drop as much as 4.5% for the third quarter as high travel demand failed to make up for an excess of flights.
    The carrier has been trying to undo policies of a direct-to-consumer sales strategy it adopted that backfired. It said in an earnings release Thursday that it has “taken swift and aggressive action to reorient its sales and distribution strategy” after complaints from travel agents and customers.
    “American has a fleet, network and product built to deliver results, but during the second quarter, we did not perform to our initial expectations due to our prior sales and distribution strategy and an imbalance of domestic supply and demand,” American’s CEO Robert Isom said in a news release.
    Here is how American performed in the second quarter compared with Wall Street estimates compiled by LSEG:

    Earnings per share: $1.09 adjusted vs. $1.05 expected
    Revenue: $14.33 billion vs. $14.36 billion expected

    Southwest’s profit fell 46% during the second quarter to $717 million, or $1.01 per share, even though revenues rose 2% to $14.33 billion.

    Adjusting for one-time items, the airline reported earnings of $1.09 per share.
    American’s results come after Southwest Airlines also reported a 46% drop in its quarterly profit and said it is taking “urgent” steps to increase revenue.

    Read more CNBC airline news

    This is breaking news. Check back for updates. More

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    Berkshire Hathaway dumps $2.3 billion of Bank of America shares in a 6-day sale

    Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, May 4, 2024.

    Berkshire Hathaway dumped more Bank of America shares this week, making it six straight trading days that Warren Buffett’s conglomerate has reduced its stake in the bank.
    The Omaha, Nebraska-based holding company sold another 18.9 million shares via transactions on Monday, Tuesday and Wednesday at an average price of $42.46, raising $802.5 million, a new regulatory filing showed.

    Over the last six trading sessions, Berkshire has unloaded 52.8 million Bank of America shares worth $2.3 billion, reducing the stake to 12.5%. Berkshire still owns 980.1 million Bank of America shares with a market value of $41.3 billion, a distant second to its $172.5 billion holding in Apple.
    Berkshire is required to disclose its stock moves within two business days after they are made, when the stake in any company exceeds 10%.
    Buffett could be trimming the bet on valuation concerns after Charlotte-based Bank of America outperformed the broader market this year. The bank stock is up more than 25% in 2024, compared to almost 14% for the S&P 500.
    It marked the first time since the fourth quarter of 2019 that Berkshire cut its Bank of America stake. In 2011, the Oracle of Omaha bought $5 billion worth of the bank’s preferred stock and warrants to shore up confidence in the lender as it grappled with losses related to subprime mortgages in the aftermath of the financial crisis.
    Just last year, Buffett spoke highly of the leadership at Bank of America, even as he offloaded other financial names. In 2022, Berkshire exited a handful of longtime bank positions, including JPMorgan, Goldman Sachs, Wells Fargo and U.S. Bancorp. 
    “I invited myself in, many years earlier, and they made a very decent deal for us. And I like Brian Moynihan enormously, and I just don’t want to, I don’t want to sell it,” Buffett said in 2023 of holding Bank of America. More

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    Southwest profit falls 46% as airline takes ‘urgent’ steps to increase revenue

    Southwest forecast an increase of as much as 13% in nonfuel costs for the third quarter.
    The carrier plans to start assigning seats and offering an extra-legroom product to increase sales.
    Southwest is under pressure from an activist investor after it lagged competitors.

    Southwest Airlines on Thursday forecast a potential drop in unit revenue for the third quarter as an oversupplied U.S. market has forced airlines to discount tickets during what is usually the most lucrative period of the year.
    Southwest said unit revenue for the current quarter could fall as much as 2% over last year and nonfuel costs could rise as much as 13%, with higher expenses weighing on the airline through the end of 2024.

    Shares of Southwest fell more than 6% in premarket trading Thursday.
    Here is how Southwest performed in the second quarter compared with Wall Street expectations, according to consensus estimates from LSEG:

    Earnings per share: 58 cents adjusted vs. an expected 51 cents
    Revenue: $7.35 billion vs. $7.32 billion expected

    The Dallas-based airline said its second-quarter revenue rose 4.5% from last year to $7.35 billion, a record, but its profit dropped more than 46% to $367 million, or 58 cents a share. Revenue per available seat mile, a gauge of airline pricing power, fell 3.8%, roughly in line with the carrier’s reduced forecast last month.
    Southwest reported adjusted per-share earnings of 58 cents a share, above analysts’ expectations.
    “Our second quarter performance was impacted by both external and internal factors and fell short of what we believe we are capable of delivering,” CEO Bob Jordan said in an earnings release.

    Southwest said Thursday that it is in talks for compensation from Boeing as its sole supplier of airplanes struggles to deliver aircraft on time because of its safety and manufacturing crises. Southwest said it continues to expect just 20 deliveries from Boeing this year — less than half of what it had previously forecast.
    The airline is in the middle of an overhaul as pressure mounts from investors to do more to increase revenue. Elliott Investment Management disclosed a nearly $2 billion stake in the carrier last month and called for a leadership change.

    Read more CNBC airline news

    Earlier Thursday, Southwest announced that it will do away with its open seating plan and offer some seats on its Boeing aircraft that have extra legroom and add overnight flights, the biggest changes to its business model in its more than five decades of flying. The changes, which start next year, would make Southwest more like its network carrier rivals.
    “We are taking urgent and deliberate steps to mitigate near-term revenue challenges and implement longer-term transformational initiatives that are designed to drive meaningful top and bottom-line growth,” Jordan said in the release.
    Delta Air Lines and United Airlines executives earlier this month said they expect to see U.S. capacity begin to moderate in August, which could lead to higher fares.

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    Southwest to get rid of open seating, offer extra legroom in biggest shift in its history

    Southwest plans to offer pricier seats with extra legroom and end open seating on its planes.
    The shifts are the most major in the airline’s more than five decades of flying.
    Southwest expects to start selling seats with the new cabin option next year.

    A Southwest commercial airliner takes off from Las Vegas on Feb. 8, 2024.
    Mike Blake | Reuters

    Southwest Airlines is ending open seating and will offer extra legroom seats on its airplanes as mounting pressure on the carrier to increase revenue prompts the biggest changes to its business model in its 53 years of flying.
    The airline plans to start selling the first flights that will offer extra legroom next year, it said Thursday. It also plans to begin overnight flights, starting in February.

    Southwest executives have said for years that they were studying such changes and hinted in April that the airline was seriously considering assigning seats and offering pricier seats with more legroom. The airline currently puts customers in one of three boarding groups and assigns a number, setting off a mad dash to check in a day before the flight. Customers can get earlier boarding though if they pay for a higher-priced ticket, they’ll get a better boarding slot.
    When travelers choose a competitor over Southwest, the airline found in its research that its open seating model was the No. 1 reason for that choice, the carrier said in a release that outlined the changes. It also said 80% of its own customers prefer an assigned seat.
    “Although our unique open seating model has been a part of Southwest Airlines since our inception, our thoughtful and extensive research makes it clear this is the right choice — at the right time — for our Customers, our People, and our Shareholders,” CEO Bob Jordan said in a news release Thursday.
    Southwest did not, however, unveil any changes to its beloved two free checked bags policy.
    The airline is under even more pressure now to segment its product like other airlines after activist investor Elliott Investment Management disclosed in June a nearly $2 billion stake in Southwest and called for new leadership as the carrier underperformed competitors.

    “We will adapt as our customers’ needs adapt,” Jordan said at an industry event last month.

    Read more CNBC airline news

    Southwest said it expects about a third of the seats on its Boeing 737s will offer “extended legroom, in line with that offered by industry peers on narrowbody aircraft.” The Federal Aviation Administration would need to approve the cabin layouts, the airline added.
    The Dallas-based carrier had prided itself and raked in steady profits for most of its more than five decades of flying on its simple business model. Jordan said last month that not assigning seats was easier to offer when planes weren’t so full.
    Analysts criticized Southwest for moving too slowly. Rival carriers offer a host of options to upsell customers like extra legroom seats, premium economy or business class. Other airlines, however, like Delta, United and American, four years ago took a cue from Southwest and ended flight change fees for most tickets.
    Southwest will provide more details about the upcoming changes at an investor day at the end of September.

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    Britain will soon lay out new plans to regulate ‘buy now, pay later’ firms like Klarna after delays

    A U.K. Treasury department spokesperson said the government will set out plans to regulate “buy now, pay later” plans “shortly.”
    This echoed comments from Tulip Siddiq, the new economic secretary to the U.K. Treasury, to Parliament earlier in the week.
    U.K. BNPL legislation has faced multiple setbacks, not least because of political instability in the country, plus lobbying from some of the biggest names in the industry.

    Buy now, pay later firms like Klarna and Block’s Afterpay could be about to face tougher rules in the U.K.
    Nikolas Kokovlis | Nurphoto | Getty Images

    Britain’s new Labour government will soon set out updated plans to regulate the “buy now, pay later” industry, a government spokesperson told CNBC.
    A Treasury department spokesperson said the government will do so “shortly,” echoing earlier comments from Tulip Siddiq, the new economic secretary to the U.K. Treasury, to Parliament on Wednesday.

    “Regulating Buy Now Pay Later products is crucial to protect people and deliver certainty for the sector,” the Treasury spokesperson told CNBC via email Thursday.
    Earlier this week, Siddiq, who was selected as the U.K.’s new city minister following the landslide election victory of Keir Starmer’s Labour Party, told lawmakers that the new government is “looking to work closely with all interested stakeholders and will set out its plans shortly.”
    This follows multiple delays to the roadmap for BNPL legislation in Britain. The government first set out plans to regulate the sector in 2021. That followed a review from former Financial Conduct Authority boss Christopher Woolard, which found more than one in 10 BNPL customers were in arrears.
    BNPL plans are flexible credit arrangements that enable a consumer to purchase an item and then pay off their debt at a later date. Most plans charge customers a third of the purchase value up front, then take the remaining payments the following two months.
    Most BNPL companies make money by charging fees on a per-transaction basis to their merchant partners, as opposed charging interest or late payment fees. Some BNPL firms do charge missed payment fees. But the model isn’t standardized across the board.

    This disparity in services among different BNPL lenders is partly why campaigners have been calling for regulation. A key reason, though, is that people — particularly younger consumers — are increasingly stacking up debt from these plans, sometimes from multiple providers, without being able to afford it.

    Gerald Chappell, CEO of online lending firm Abound, which uses consumer bank account information to inform credit decisions, said he’s seen data processed through his firm’s platform showing customers racking up “thousands of pounds” from as many as three to four BNPL providers.
    While BNPL can be considered a credit “innovation,” Chappel said, “there’s a bit of me that can’t help feeling that was a product of a zero-interest rate environment. And now you go into a higher interest rate environment: is that still sustainable?”
    “You have a weaker economy, more credit defaults. You’ve got a massive accelerating adoption of buy now, pay later, which also increase debt burdens. So I think a lot of those firms are struggling and are going to continue to struggle.”
    Chappell said he wouldn’t be surprised if the Financial Conduct Authority, which is responsible for financial regulation in the U.K., ends up regulating the BNPL industry within the next 24 months.

    Multiple delays to BNPL rules

    Executives from two major BNPL firms, Klarna and Block, pushed back on those proposed measures, saying they threatened to drive people toward more expensive credit options like credit cards and car financing plans.
    A spokesperson for Clearpay, the U.K. arm of Afterpay, said the company welcomes the government’s update that it’s planning an announcement on BNPL regulation soon. Afterpay is the BNPL arm of Jack Dorsey-owned fintech Block.
    “We have always called for fit-for-purpose regulation of the sector that prioritises customer protection and delivers much-needed innovation in consumer credit,” Clearpay’s spokesperson told CNBC via email.
    “Clearpay already has safeguards in place to protect consumers but we recognise that not every provider has the same approach. This is why we continue to advocate for proportionate and appropriate regulation that sets high industry standards across the board,” this spokesperson added.
    A Klarna spokesperson told CNBC via email that the firm has “supported BNPL regulation for a long time, ensuring clear info, protection from bad actors & access to zero-cost credit.” “We’re pleased the government has committed to introducing this so soon after taking office,” they said.
    “Too many lenders are offering unregulated BNPL that in turn doesn’t impact the credit scores of their customers, meaning other responsible lenders don’t have the full picture, so consumers don’t get the safeguards they deserve,” said Philip Belamant, CEO of BNPL company Zilch. “It’s time we level the playing field and remove this exemption. Regulation of this important sector is long overdue.”
    Rival BNPL firm PayPal was not immediately available for comment when contacted by CNBC Thursday.
    BNPL loans are a largely unregulated part of the financial services ecosystem, not just in the U.K., but globally. In the United States, the Consumer Financial Protection Bureau said customers of BNPL companies should be offered the same protections as credit card users.
    The regulator unveiled an “interpretive rule” for the industry, meaning BNPL lenders, like Klarna, Affirm and PayPal must make refunds for returned products or canceled services, must investigate merchant disputes and pause payments during those probes, and must provide bills with fee disclosures. More

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    Keurig Dr Pepper earnings meet estimates as higher prices fuel U.S. soda sales

    Keurig Dr Pepper’s second-quarter earnings and revenue met Wall Street’s expectations.
    The company’s U.S. coffee division struggled, while its domestic refreshment division saw higher sales, thanks to price increases.
    The beverage giant also reiterated its full-year outlook.

    In this photo illustration, cans of Dr Pepper soda are displayed on June 03, 2024 in San Anselmo, California.
    Justin Sullivan | Getty Images

    Keurig Dr Pepper reported quarterly earnings and revenue that met analysts’ expectations on Thursday as higher prices fueled its U.S. soda sales.
    Shares of the company rose 2% in premarket trading.

    Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

    Earnings per share: 45 cents adjusted, in line with estimates
    Revenue: $3.92 billion, in line with estimates

    The beverage company reported second-quarter net income of $515 million, or 38 cents per share, up from $503 million, or 36 cents per share, a year earlier.
    Excluding items, Keurig Dr Pepper earned 45 cents per share.
    Net sales rose 3.5% to $3.92 billion. Volume, which excludes pricing and currency changes, increased 1.8% during the quarter, while prices were up 1.6% compared with the year-ago period.
    Keurig Dr Pepper’s U.S. refreshment beverages division, which includes Snapple, Canada Dry and Sunkist, reported sales growth of 3.3%. Prices for its drinks were up 2.9% compared with the year-ago period.

    Dr Pepper also recently overtook Pepsi as the second-most consumed soda in the U.S., trailing only Coca-Cola, according to Beverage Digest. Its parent company’s larger rivals have seen their performances diverge in recent quarters; PepsiCo’s price hikes have driven away some consumers from its drinks and snacks, while Coca-Cola’s premium offerings like Fairlife and strong international demand have bolstered its results.
    Keurig Dr Pepper’s U.S. coffee division’s sales shrank 2.1% to $1 billion in the quarter, fueled by a 2.9% decline in pricing. Shipments of its K-Cup pods were roughly flat, which the company credited to strong market share trends.
    The company’s international division saw sales climb 15.5% for the quarter, but it accounts for less than a sixth of Keurig Dr Pepper’s revenue.
    The company also reiterated its prior full-year outlook of constant currency revenue growth in the mid-single digit range and adjusted earnings per share growth in the high-single digits. More

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    China to use ultra-long bonds for consumer, trade-in policy support as worries about retail sales slump grow

    China on Thursday announced its most targeted measures yet for boosting consumption, which has remained lackluster since the pandemic.
    Authorities announced they would allocate 300 billion yuan ($41.5 billion) in ultra-long special government bonds to expand an existing trade-in and equipment upgrade policy.
    The policy at least doubles the subsidies for new energy and traditional fuel-powered vehicle purchases to 20,000 yuan and 15,000 yuan per car, respectively.

    China’s retail sales grew by 3.7% in the first half of the year from a year ago.
    CNBC | Evelyn Cheng

    SHANGHAI — China on Thursday announced its most targeted measures yet for boosting consumption, which has remained lackluster since the Covid-19 pandemic.
    Authorities announced they would allocate 300 billion Chinese yuan ($41.5 billion) in ultra-long special government bonds to expand an existing trade-in and equipment upgrade policy. The document was jointly published by the National Development and Reform Commission — China’s economic planning agency — and the Ministry of Finance.

    “There have never been such specific measures” aimed at consumption, Bank of China’s chief researcher Zong Liang said in a phone interview Thursday, according to a CNBC translation of his Mandarin-language remarks.
    He noted how the new policy links Beijing’s ultra-long bond program — announced in March — with consumption.
    “This is a very important measure for implementing the Third Plenum,” Zong said. He was referring to a high-level meeting of Chinese leaders last week that only occurs twice every 10 years, and which typically sets the tone for economic policy.

    The latest Third Plenum concluded with the release of several major guiding documents over the past weekend that reaffirmed Beijing’s long-term interest in bolstering advanced tech. The official communique focused on “deepening reform.” It also said China would work to achieve its full-year national targets, but disappointed many analysts by not indicating major policy changes.
    Policymakers have started to act in the last week. The People’s Bank of China unexpectedly cut interest rates on Monday, amid other changes, and on Thursday cut its medium term facility lending rate.

    The National Development and Reform Commission on Thursday then announced the expanded policy to support consumption.
    “The move is a three-birds-with-one-stone action: Spurring consumption, absorbing industrial output, and [solidifying] economic growth to meet the pledged target of 5%,” said Bruce Pang, chief economist and head of research for Greater China at JLL.
    The policy at least doubles the subsidies for new energy and traditional fuel-powered vehicle purchases to 20,000 yuan and 15,000 yuan per car, respectively.
    The measures subsidize a range of equipment upgrades, from those used in farming to apartment elevators. Officials noted Thursday that about 800,000 elevators in China have been used for more than 15 years, and that 170,000 of those had been used for more than 20 years.
    The policy also laid out specific subsidies for home renovations and consumer purchases of refrigerators, washing machines, televisions, computers, air conditioners and other home appliances. The document said each consumer could get subsidies of up to 2,000 yuan for one purchase in each category.
    In allocating the roughly 300 billion yuan in ultra long-term bonds for local government to use for the subsidies, the policy noted the central government would take back any unused funds by the end of 2024.
    “This means they’re stressing the money must be spent,” Zong said. He noted that the 300 billion yuan designation also reflects “a new way of thinking” which can have impact at scale.

    Sluggish retail sales

    The measures are coming at a time in which China’s consumers have been unwilling to spend, partly due to uncertainty about future income and the real estate slump.
    China’s retail sales grew at a slower 2% year-on-year pace in June, which Zong said “was not ideal.”
    Concerns about China’s lackluster consumer spending have recently gained a higher profile in a country where public discussion can be tightly controlled.
    Trip.com co-founder James Liang this month called for Beijing to issue consumption vouchers, according to “The East is Read” newsletter that cited Liang’s post on Chinese social media platform WeChat. The same publication pointed out that Li Yang, head of the National Institution for Finance & Development (NFID), in late May highlighted China’s declining consumption.
    China reported retail sales growth of 3.7% in the first half of the year, slower than the 8.2% pace recorded in the year-ago period.
    That means “the pressure on spurring consumption is rather large,” Liu Xiaoguang, a professor at the Academy of Development and Strategy at China’s Renmin University, said in a presentation to reporters Thursday, according to a copy seen by CNBC. That’s according to a CNBC translation of the Chinese.
    Liu noted that the housing market has yet to reach a clear turning point, and it would take time for one to solidify.
    But he said with China’s recently announced plans for “deepening reforms,” the economy could grow by 5.3% this year, versus 5.1% without such measures. More