Raphael Stevens

The Food and Drug Administration will announce specific actions to increase baby formula imports in the coming days amid a nationwide shortage, senior administration officials said.
During the first week of May, 43% of baby formula supplies were out of stock at stores across the U.S., according to Datasembly, a company that tracks retail data.
The shortage comes after Abbott Nutrition, the nation’s largest baby formula manufacturer, closed its plant in Sturgis, Michigan, amid a recall due to contamination concerns.
Four infants who consumed products from the plant were hospitalized with bacterial infections. Two of the infants died.

Baby formula is offered for sale at a big box store on January 13, 2022 in Chicago, Illinois.
Scott Olson | Getty Images

The U.S. will increase baby formula imports as part of an effort to ease a nationwide shortage, senior Biden administration officials said on Thursday.
The scarcity of formula was triggered in part by the closure of a Michigan manufacturing plant after two infants who consumed its products caught bacterial infections and died.

The Food and Drug Administration will announce specific actions to boost formula imports in the coming days, the officials said. The U.S. produces 98% of the infant formula its consumes. Chile, Ireland, Mexico and the Netherlands are potential sources for additional imports, according to the officials.
Abbott Nutrition, the nation’s largest baby formula manufacturer, issued a recall in February for several powered formulas. The move came after four infants who consumed products from its Sturgis, Michigan, plant were hospitalized with infections from the bacteria Cronobacter sakazakii. Two of the infants died.

Abbott closed the Sturgis plant and recalled its Similac PM 60/40, Similac, Alimentum and EleCare powered formulas manufactured at the Michigan facility. The company said Cronobacter sakazakii was found at the plant, but not in areas where it makes product. All finished product tested came back negative for the bacteria, according to Abbott.
The FDA and the Centers for Disease Control and Prevention have instructed parents to check Abbott’s website to find out if they have a product under recall. The FDA is advising consumers not to use recalled Similac, Alimentum or EleCare powdered infant formulas.
The plant closure and recall have left parents scrambling to find baby formula.

During the first week of May, 43% of baby formula supplies were out of stock at stores across the U.S., according to Datasembly, a company that tracks retail data. Abbott said it can restart the Sturgis plant within two weeks if the FDA signs off, but it will take up to eight weeks for products to make it to stores.
President Joe Biden met earlier on Thursday with Walmart, Target, Reckitt and Gerber to discuss ways to ease the shortage. Biden has asked the Federal Trade Commission to use its power to monitor reports of price gouging amid the shortage, and the Justice Department is working with state attorneys general to deal with predatory behavior by retailors, the administration officials said.
The CDC has not identified any additional cases of infection related to the powered formula and has closed its investigation. It has called for state health departments to report any infant Cronobacter infections they find.
Cronobacter can cause blood infections or make the linings around the brain and spinal cord swell, according to the CDC. Symptoms include a fever, poor feeding, excessive crying, very low energy and seizures.

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GameStop jumped more than 30% at one point and was halted for volatility multiple times.
GameStop and AMC turned heads early last year when a band of retail investors coordinated trades on online chatrooms to create massive short squeezes in these stocks.
Even with Thursday’s big moves, the stocks remain well below their heights from the first half of 2021.

A screen displays the logo and trading information for GameStop on the floor of the New York Stock Exchange (NYSE) March 29, 2022.
Brendan McDermid | Reuters

Shares of two meme stocks surged on Thursday, adding an unexpected wrinkle for a market that has been dropping in choppy trading for more than a month.
GameStop jumped more than 30% and was halted for volatility multiple times, before finishing the session with a gain of 10.1%. The stock of theater chain AMC Entertainment rose more than 8%, down from a surge of more than 20% at one point.

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GameStop and AMC turned heads early last year when a band of retail investors coordinated trades on online chatrooms to create massive short squeezes in these stocks widely hated by hedge funds and other players. The meteoric rallies inflicted huge pain for many hedge funds and other short sellers involved in these speculative names.
Since then, the stocks have retreated from their peak prices, and short sellers have started to build positions once again. According to FactSet, AMC has short interest of 19.5%, while GameStop sits at 21.4%. Short interest is a measure of what portion of a company’s available shares, or float, is sold short.

Those large bets against the company can sometimes lead to dramatic one-day moves in a stock, as hedge funds move to close out their short positions when a stock rises, thus creating more buying pressure. This process is known as a short squeeze.
Even with Thursday’s big moves, the stocks remain well below their heights from the first half of 2021. GameStop, which rose as high as $483 per share on an intraday basis last January, finished at $89.57 per share on Thursday.
AMC, which hit an intraday high of $72.62 last June, closed at $11.20 per share on Thursday.

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Because the market caps of the companies have fallen so much, it could be easier for just a few trading shops, or even one large fund, to force a new short squeeze.
However, Ihor Dusaniwsky of financial analytics firm S3 Partners said Thursday’s move was likely to cause a short squeeze due to the health of the short positions.
“A wild ride for these stocks, but although there might be some short sellers getting squeezed out of their positions in order to realize recent mark-to-market profits, today’s losses on the short side are a drop in the bucket relative to the profits they’ve made in these names over the last week and month,” Dusaniwsky said.
In 2021, both AMC and GameStop took advantage of their temporarily elevated share prices to sell additional stock and raise capital. AMC CEO Adam Aron has made a major effort to embrace the retail investors who participated in the rally, answering questions from small-dollar traders on earnings calls and introducing shareholder perks at the physical movie theaters.
AMC has used the cash it raised in part to buy up other theaters around the country. However, the company also purchased a stake in a small gold mining company earlier this year that has a shaky financial history.
— CNBC’s Yun Li contributed to this report.

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Tornado season already is under way, and the Atlantic hurricane season starts June 1 and runs through Nov. 30.
Not all damage caused by weather or other natural events are covered under standard homeowners policies.
Here’s what to check for in your coverage.

Win McNamee | Getty Images

As spring warmth takes hold, homeowners may want to make sure they’re prepared for the severe weather that will likely soon follow.
That preparation should include checking your insurance coverage.

Whether you live in an area prone to hurricanes, tornados, flooding, hail, wildfires or severe storms — all of which are becoming more prevalent amid a warming climate — it’s important to know which types of weather-related damage your homeowners insurance covers, excludes or charges a separate (and likely higher) deductible for.
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“Take time to understand how the policy [covers] severe weather and natural disasters,” said Steve Wilson, senior underwriting manager at insurer Hippo.
Tornado season already is under way, and the Atlantic hurricane season starts June 1 and runs through Nov. 30. Meanwhile, much of the western part of the U.S. is experiencing drought conditions, which is conducive to wildfires.
Depending on where you live and the weather that’s typical for that area, your policy may provide coverage for some of the more location-specific events, and state law often dictates what’s required of policies offered in their jurisdiction.

It’s worth noting that in Florida, the insurance industry is in crisis, largely due to rampant roof replacement schemes that result in litigation and have cost insurers an estimated $3.4 billion in underwriting losses over the past two years, according to Mark Friedlander, spokesman for the Insurance Information Institute. 
Florida homeowners in 2021 saw their premiums increase by an average of 25%, compared with 4% for the rest of the U.S., Friedlander said. The institute projects average increases of 30% to 40% this year, with many households seeing increases of 100% or more.
Regardless of where you live, here’s what you should review about your weather-related coverage.

What to look for

While many weather-related events are covered under the standard part of your policy, some fall under a different section that comes with a separate deductible.
If you live in a state along the East Coast or Gulf of Mexico, there’s a good chance your policy has a hurricane deductible. Likewise, in states more prone to wind-related events — i.e., tornadoes — you’re likely to have a wind deductible.
Either way, those amounts typically range from about 1% to 5% (with a minimum $500) depending on the specifics of your insurance. Some homeowners might opt for an even higher deductible if it’s available. 

Take time to understand how the policy [covers] severe weather and natural disasters.

Steve Wilson
Senior underwriting manager at Hippo

Be aware that for those percentage-based deductibles, the amount is based on your insured value, not the damage caused.
So if your home is insured for $500,000 and you have a 5% hurricane deductible, you’d be responsible for covering the first $25,000 regardless of the total cost of the damage. 
Also, earthquakes are not covered by standard homeowners policies, even in quake-prone California (you’d have to purchase separate insurance). Nor, typically, are other types of earth movement (i.e., landslides, sinkholes).

Don’t overlook flood risk

Flooding has become an increasing risk for homeowners as sea levels rise and storms grow larger. Yet just 15% of homeowners are insured to protect against flood damage.
“One of the most important policies to consider for hurricane protection that can be overlooked is flood insurance,” Wilson said.

If you’re in a high-risk flood zone, your mortgage lender likely requires you to have it. Yet 1 in 4 flood claims come from homeowners outside of those areas, according to the government’s National Flood Insurance Program.
You can get coverage through either a private insurer or the federal program (which is how most homeowners get a policy). There are exclusions and limitations on what is covered, however. And, outside of a few exceptions, policies take 30 days to become effective.
The average yearly cost is $985, although that can vary widely. The Federal Emergency Management Agency recently implemented Risk Rating 2.0, an actuarily sound approach to better assess individual flood risk, which is causing premiums to rise for some homeowners and fall for others, Friedlander said.

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Shares of General Motors on Thursday hit a new 52-week low and closed down 4.6%, after Wells Fargo downgraded the stock and significantly slashed its target price for the company.
Wells Fargo lowered GM’s rating after market close Wednesday to “underweight” and cut the company’s price target from $74 a share to $33 a share.
It also downgraded Ford to “underweight” and cut its price target in half from $24 a share to $12 a share.

Mary Barra, Chair and CEO of the General Motors Company (GM), speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon | AFP | Getty Images

DETROIT — Shares of General Motors on Thursday hit a new 52-week low and closed down 4.6%, after Wells Fargo downgraded the stock and significantly slashed its target price for the company.
Wells Fargo analyst Colin Langan lowered GM’s rating after market close Wednesday to “underweight” from “overweight” and cut the company’s price target from $74 a share to $33 a share.

This year could represent a profit peak for legacy automakers, with the shift toward electric vehicles eroding profits in the years ahead, he said in a note to investors.
“We see headwinds from price normalization, inflationary costs, and the 2023 UAW contract negotiations. Therefore, we are concerned that 2022 could be the peak profits as GM will be increasingly forced to absorb BEV losses to meet high 2026 US regulatory hurdles,” he said.
For the same reasoning, Langan on Wednesday also downgraded Ford Motor to “underweight” and cut its price target in half from $24 a share to $12 a share.
GM shares fell by as much as 7.2% during intraday trading Thursday, reaching a new low of $34.58 a share. The company’s market cap is nearly $52 billion.
Shares of Ford on Thursday declined 3% to $12.44. The stock’s 52-week low is $11.28 a share from May 2021. Ford’s market cap is about $50 billion.

Ford Chair Bill Ford during the company’s annual shareholder meeting Thursday said he remains bullish on the automaker’s long-term business plans, despite the stock’s performance this year.
“2021, our stock was on fire. This year it’s come back to Earth a bit. The whole market is coming back to Earth, but I’ve never been more confident of our future,” he said. Later he added, “you can’t manage the business for stock price, you manage the business to build a great and enduring company.”
Shares for the Detroit automakers were already under pressure before the double downgrade from Wells Fargo. Both stocks have declined nearly 40% this year.

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Coach owner Tapestry said Thursday it’s expecting lockdowns in Shanghai will be lifted at the beginning of June, followed by gradual improvements thereafter.
The retailer reported fiscal third-quarter sales and profit ahead of Wall Street’s estimates, fueled by strong consumer demand in North America.
But it also trimmed its profit outlook for fiscal 2022, with lockdowns in China poised to dent demand in the region.

Customers walk past a Coach store at Shanghai New World Daimaru department store on August 12, 2019 in Shanghai, China.
VCG | Visual China Group | Getty Images

Coach owner Tapestry shares climbed nearly 16% Thursday after the retailer said it’s expecting lockdowns in Shanghai will be lifted at the beginning of June, followed by gradual improvements thereafter.
The stock was initially down after Tapestry trimmed its profit outlook for fiscal 2022, with lockdowns in China poised to dent consumer demand for its high-end purses and accessories. It also reported fiscal third-quarter sales and profit ahead of Wall Street’s estimates.

But management assured analysts and investors, during a post-earnings conference call, that consumer demand remains healthy in North America and other parts of the world, and can offset near-term losses in Asia.
Chief Executive Officer Joanne Crevoiserat said shoppers have responded well to gradual price hikes, even younger customers who are willing to pay more for a high-end hand bag or pair of shoes.
Tapestry joins a growing list of companies, from Apple to Estee Lauder, that have flagged the impact of China’s Covid controls on their businesses. Since March, mainland China has battled an outbreak of the omicron variant by turning to swift lockdowns and travel restrictions. Not only does this hurt demand in the region, but it also fractures manufacturing.
The hope is that these challenges won’t last much longer.
Tapestry acknowledged it will take a hit in its fiscal fourth quarter, resulting in a downbeat outlook for the year. It forecasts annual earnings to be $3.45 per share, compared with a prior estimate of between $3.60 and $3.65 a share. The new guidance includes an expected headwind of 25 cents to 30 cents due to Covid-related pressures in China, it said.

“We started the [third] quarter quite strong, and then as Covid disruptions happened, we saw traffic drop off,” Crevoiserat said in a phone interview, regarding the China business. “The digital business is also pressured because of the logistics challenges in the region.”
In addition to Coach, Tapestry also owns the Kate Spade and Stuart Weitzman brands.
Tapestry reported adjusted earnings for the three-month period ended April 2 of 51 cents per share, on revenue of $1.44 billion. Analysts had been looking for earnings per share of 41 cents on sales of $1.42 billion, according to a Refinitiv survey.
Sales in North America rose 22% in the quarter from a year earlier, fully offsetting a mid-teens decline in China, the company said.
For the year, Tapestry expects revenue to total about $6.7 billion, which would represent a high-teens percentage jump from fiscal 2021. Analysts expect revenue of about $6.75 billion.
“We see growing traction in our brands, really around the world, that more than offset the temporary disruptions we’re seeing in China,” said Crevoiserat.
Tapestry shares are down roughly 24% year to date.

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The IRS destroyed data for an estimated 30 million filers in March 2021, according to the Treasury Inspector General for Tax Administration.
The decision, prompted by a backlog of paper filings, has sparked anger in the tax community.
“It just further damages the IRS’ reputation in the business community and in the public,” said Larry Harris, director of tax services at Parsec Financial.

courtneyk | E+ | Getty Images

An audit by the Treasury Inspector General for Tax Administration revealed the IRS has tossed data for millions of payers, sparking anger from the tax community.
The material, known as paper-filed information returns in accounting parlance, is sent yearly by employers and financial institutions, and covers taxable activity, such as W-2 forms, with copies sent to taxpayers and the IRS.

“The continued inability to process backlogs of paper-filed tax returns contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” according to the report.
The IRS backlog, created by years of budget cuts, understaffing, pandemic-related office closures and added duties, is expected to clear by December, according to Commissioner Charles Rettig.
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While the report doesn’t specify which information returns the agency chucked, the news has triggered angry responses from tax professionals, particularly after another difficult filing season.
“I was horrified when I read the report describing the destruction of paper-filed information returns,” said Phyllis Jo Kubey, a New York-based enrolled agent and president of the New York State Society of Enrolled Agents.

CNBC has reached out to the IRS for comment.
Missing information returns can cause a “mismatch” at the IRS, delaying refunds because the agency can’t verify details on a taxpayer’s returns, she explained.
While the eventual consequences of the decision are unknown, tax professionals have long complained about the stream of automated IRS notices, with limited options to reach the agency. 

“If they’re not putting those into the system, there’s going to be discrepancies, which means potential notices that are sent out,” said Dan Herron, a San Luis Obispo, California-based certified financial planner and CPA with Elemental Wealth Advisors.
Although the IRS halted more than a dozen types of automated notices in February, Herron says the constant correspondence is still creating headaches for taxpayers and advisors.Brian Streig, a CPA with Calhoun, Thomson and Matza LLP in Austin, Texas, said the news was a “break of our trust,” pointing to the burden on the business community.
“Small businesses stress out every year in January trying to accurately prepare these informational returns and get them filed on time,” he said. “To see the IRS just destroy these is almost like the IRS admitting they don’t really care.” 

Larry Harris, a CFP and director of tax services at Parsec Financial in Asheville, North Carolina, voiced similar concerns, questioning the agency’s ability to stay compliant. 
“It just further damages the IRS’ reputation in the business community and in the public,” he added.

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