Raphael Stevens

Pfizer said it has launched a new multiyear program to reduce costs as it works to rebound from the rapid decline of its Covid business. 
The reductions are in addition to another $4 billion cost-cutting effort, which Pfizer announced last year as demand for its Covid vaccine and oral drug Paxlovid slumped.
In a securities filing, the pharmaceutical giant said the first phase of its new program is focused on operational efficiencies and is expected to deliver savings of about $1.5 billion by the end of 2027.

Exterior view of the Pfizer headquarters building in New York City on Jan. 29, 2023.
Kena Betancur | Corbis News | Getty Images

Pfizer on Wednesday said it has launched a new multiyear program to reduce costs as it works to rebound from the rapid decline of its Covid business. 
The announcement is in addition to another $4 billion cost-cutting effort, which Pfizer announced last year as demand for its Covid vaccine and oral drug Paxlovid slumped. 

In a securities filing, the pharmaceutical giant said the first phase of its new program is focused on operational efficiencies and is expected to save the company about $1.5 billion by the end of 2027.
One-time costs related to the initial stage of cuts are expected to be about $1.7 billion, including severance for an unspecified number of laid-off employees. The company expects to record the majority of those charges this year. 
Pfizer also expects the program to involve “product portfolio enhancements” and changes to the company’s manufacturing and supply network, a spokesperson told CNBC.
“The program will focus on streamlining our ways of working, reducing complexity and increasing productivity in Pfizer Global Supply,” the spokesperson said in a statement.
Pfizer in the filing added that “given the complexity in manufacturing and longer lead times required to make changes, this program will be a multi-phased effort.”

Pfizer is trying to shore up investor sentiment after its shares fell nearly 50% in 2023, making it the worst-performing pharmaceutical stock last year. That share drop erased more than $100 billion in Pfizer’s market value.
As demand for Covid products plummeted last year, Pfizer also disappointed Wall Street with the underwhelming launch of a new RSV shot, a twice-daily weight loss pill that fell short in clinical trials and an initial 2024 forecast that missed expectations.
But Pfizer pleased investors earlier this month after it reported first-quarter revenue and adjusted profit that beat expectations and hiked its full-year earnings outlook. The pharmaceutical giant said its new profit guidance accounts for its “confidence” in its business and its ability to slash costs.
“We are cautiously optimistic about the year,” Pfizer CEO Albert Bourla said during an earnings call on May 1.
Shares of the company closed 6% higher on that day. Pfizer’s stock is up nearly 14% since then.

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Any significant reductions or a rollback of the Inflation Reduction Act’s support for EVs would benefit China, according to GM board member and former Tesla executive Jon McNeill.
The IRA includes incentives for consumers to buy EVs as well as support for carmakers and suppliers to produce all-electric vehicles and their components in North America.
Trump during a May 1 rally in Wisconsin said upon taking office, he would ” impose an immediate moratorium on all new spending grants and giveaways” like the IRA.

Any significant reduction or a rollback of the Inflation Reduction Act’s support for electric vehicles would benefit China, according to General Motors board member Jon McNeill.
“I think we risk losing the auto manufacturing share to China. We really do, globally,” McNeill, a former Tesla president and cofounder and CEO of DVx Ventures, said Wednesday during CNBC’s “Squawk on the Street.”

The IRA of 2022 includes incentives for consumers to purchase EVs as well as significant support for carmakers and suppliers to produce all-electric vehicles and their components in North America rather than overseas.
McNeill, in an email to CNBC, said the IRA is providing enticements to both the manufacturers and consumers “to level the playing field” against Chinese car companies.
The expansion of Chinese automakers has been a growing concern for companies from Detroit to Germany. Global automakers are worried that BYD and other Chinese rivals could flood their markets, undercutting domestic production and vehicle prices.
The IRA is also a potential issue in the upcoming November presidential election. There have been recent media reports that if former President Donald Trump is elected to a second term, he would gut many of the Biden administration’s clean energy and climate initiatives such as the $430 billion IRA.

Republican presidential candidate and former U.S. President Donald Trump attends a campaign event in Freeland, Michigan, U.S. May 1, 2024.
Brendan Mcdermid | Reuters

Trump has alluded to such moves. He said at a May 1 rally in Wisconsin that upon taking office, he would “impose an immediate moratorium on all new spending grants and giveaways under the Joe Biden mammoth socialist bills like the so-called inflation Reduction Act.”

“We’re gonna save all that money. It’s not helping you at all. It’s not doing anything for you. It’s just, it’s just like a political game,” Trump said.
To actually get a wholesale IRA repeal, Trump would need Republican majorities in both chambers of Congress, which is unlikely, though possible. Moreover, those hypothetical Republican majorities would need to put IRA rollbacks at the top of their legislative priority list, which is also not guaranteed.
However, in a second term, Trump could further delay implementation of the IRA’s policies, which have been already been rolling out more slowly than some would like due to the complexities of the law.
McNeill said he has been closely watching the political environment regarding the IRA. He said any changes should be a bipartisan discussion rather than any sort of Republican rollback or reduction.
McNeill noted the Chinese government has been supporting its domestic automakers in the form of billions of dollars in assistance and subsidies, 0% financing and lower labor costs, among other incentives.

Production is now set to begin at the former Detroit-Hamtramck assembly plant, less than two years after GM announced the massive $2.2 billion investment to fully renovate the facility to build a variety of all-electric trucks and SUVs.
Photo by Jeffrey Sauger for General Motors

“It gets very difficult to compete at that price level or that cost level from the U.S., which is why it’s really important, a lot of people believe, to protect the U.S. manufacturers from that,” he said.
To help U.S. automakers compete with Chinese companies, President Joe Biden last week announced plans to quadruple tariffs on China-made electric vehicles, raising them to 100% from 25%.
However, several automotive and trade experts told CNBC the increased tariffs are a near-term protectionism act that may delay, but won’t stop, Chinese automakers from coming to the U.S. with EVs.
The EV tariffs, and other increases on battery materials, were part of a larger package of new tariff rates on $18 billion worth of Chinese imports.
— CNBC’s Rebecca Picciotto contributed to this report. More

The median price of an existing home sold in April was $407,600, an increase of 5.7% year over year.
Inventory in April rose 9% month to month and was up 16% from the year before, but still just a 3.5-month supply at the current sales pace.
First-time buyers made a slight comeback, making up 33% of April sales, up from 29% the year before.

Homes in the Issaquah Highlands area of Issaquah, Washington, US, on Tuesday, April 16, 2024. 
David Ryder | Bloomberg | Getty Images

Sales of previously owned homes fell 1.9% in April from March to 4.14 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors. The forecast had been for a slight gain.
Sales were also down from April 2023, off 1.9% from last year.

These sales are based on closings, so contracts likely signed in February and March. Mortgage rates jumped at the start of February and then held around 7% for the next two months before moving even higher in April.
“When we see these mortgage rates, which is a 300 basis point increase from pre-Covid pace, we are in a new territory as to how the lock-in effect will restrain home sales,” said Lawrence Yun, chief economist for the Realtors.
Total housing inventory at the end of April was 1.21 million units, up 9% month to month and up 16% from the year before, but still just a 3.5-month supply at the current sales pace. A six-month supply is considered balanced between buyer and seller. The supply of homes priced at more than $1 million, however, was up 34% year over year, which is why that segment of the market is most active.
Sales of homes priced below $100,000 fell 7.1% year over year, while sales of those priced over $1 million jumped 40%.
Tight supply kept prices under pressure. The median price of an existing home sold in April was $407,600, an increase of 5.7% year over year. That is another record high price for April. With multiple offers, due to strong demand, 27% of homes sold above list price.

“Home prices reaching a record high for the month of April is very good news for homeowners,” said Yun. “However, the pace of price increases should taper off since more housing inventory is becoming available.”
First-time buyers made a slight comeback, making up 33% of April sales, up from 29% the year before. The all-cash share was still relatively high, at 28% of all transactions.
Regionally, sales in the Northeast fell 4% from March and 4% from April 2023. The median price in the Northeast was $458,500, up 8.5% year over year.
In the Midwest, sales dropped 1% month to month and were also down 1% year over year. The median price in the Midwest was $303,600, up 6% from April 2023.
Sales in the South dropped 1.6% from March and 3.1% from the year before. The median price in the South was $366,200, up 3.7% from last year.
And in the West, sales were down 2.6% for the month and rose 1.3% from one year before. The median price in the West was $629,600, up 9.3% from April 2023.
Correction: The supply of homes priced at more than $1 million was up 34% year over year. An earlier version misstated the percentage.

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General Motors is hoping its new all-electric Equinox will have the same success in the EV segment as the traditional vehicle has for gas-powered crossovers.
The new EV is shipping to dealers, with a roughly $35,000 entry-level model expected later this year.
Affordable EV pricing has long been a goal for GM, Tesla and others as Chinese rivals like BYD and Nio grow their sales beyond China.

GM’s 2024 Chevrolet Equinox EV during a media launch event for the vehicle on May 16, 2024 in Detroit.
Michael Wayland / CNBC

DETROIT — The Chevrolet Equinox has been a crucial part of General Motors’ lineup for two decades. The vehicle is a quintessential family hauler and a go-to car for people seeking an economical compact crossover for everyday driving.
GM is hoping the 2024 Chevrolet Equinox EV can do the same for its growing all-electric vehicle portfolio as it begins shipping the crossover to dealers amid slower-than-expected demand for EVs. The rollout marks the latest test for mass-market adoption as well as the company’s production of new “Ultium” EV technologies.

“It’s very important to us but, more importantly, it’s very important to customers and people who want affordability and electric vehicles,” GM President Mark Reuss told CNBC last week. “This is about $27,500 [including up to $7,500 in federal incentives] for an over 300-mile range car, which is right in the heart of everything.”
Offering a new EV for around $25,000 has long been a target for automakers such as GM, Tesla and others. The importance of such a vehicle has grown more apparent as Chinese automakers like BYD and Nio grow their sales of less expensive EVs outside of China.
The Equinox EV is launching with higher-priced models that start at roughly $43,000 to $51,100 (without any incentives). The entry-level Equinox LT model, starting at about $35,000, is expected later this year.

“The Equinox EV is the vehicle that’s really going to make a difference for a lot of customers that maybe previously haven’t been interested or looked at EVs,” Kathleen Murawski, marketing and advertising manager for gas-powered and Equinox EVs and Chevy Blazer EVs, told CNBC.
GM sells hundreds of thousands of gas-powered Equinox crossovers annually, including 212,701 last year. The crossover is typically one of GM’s bestselling vehicles and top five in sales for its segment, according to Autopacific.

Testing GM

The Equinox EV is GM’s new entry point for all-electric vehicles in the U.S. after the automaker discontinued the Chevy Bolt last year. It’s expected to be GM’s top-selling EV.
With such lofty sales expectations, it also will test the legacy automaker’s ability to successfully mass produce an Ultium-based EV following pricier vehicles such as the $110,000 GMC Hummer EV, $60,000 Cadillac Lyriq and a botched launch of the Blazer EV, starting at roughly $55,000, due to software issues.
“We’ve got the launch on this vehicle right. We’ve got the quality of this vehicle right. We’ve got the software of this vehicle right. We’re just super excited to see now where it goes,” GM President of Global Markets Rory Harvey told CNBC. “We think we’ve got a product that’s out there to win.”

The Equinox EV is arriving to market following the Blazer EV and alongside GM’s more than $96,000 Silverado EV RST. The company has already launched a work truck version of the Silverado EV.
The production ramp-up of GM’s new EV vehicles — using what the automaker calls its “Ultium” platform, batteries and other technologies — has been slower than the company and investors had expected. The Equinox will change that, according to GM North America President Marissa West.
“We’ve eliminated the production constraints, and now it’s about meeting the customer demand with the most affordable, longest-range vehicle on the market in the heart of our Chevrolet lineup, which is … the heart and soul of General Motors,” West said during an interview Monday.
Paul Waatti, director of industry analysis at AutoPacific, agrees. He called the Equinox a critical product for GM’s EV plans as well as a potential redemption opportunity for the company following its disappointing ramp-up of current Ultium-based products.
“GM is going to start to see real volume in their EV portfolio,” Waatti said. “It was a slow start, but now they’re going to have the big volume players in the mix. It’s really a turning point for GM.”
“[The Equinox is] undoubtedly the most significant Ultium launch for GM yet,” he added. “It might just be the most compelling EV on the market right now.”

Equinox EV

All of that being said, the Equinox EV is an Equinox in name only. It shares little to nothing with the traditional gas-powered vehicle, which the company redesigned to look more rugged for the 2025 model year.
The Equinox EV is wider and lower than the traditional crossover. It’s a result of GM’s Ultium EV platform, aerodynamics and other targeted features for the vehicle, including an up to EPA-estimated 319 miles of range on a single charge.
A standard front-wheel-drive Equinox EV has a 213 horsepower and 236 foot-pounds of torque, according to company estimates. GM says optional all-wheel-drive models have an estimated 288-horsepower and 333 foot-pounds of torque.
Outside of the U.S., the Equinox EV will be sold in Canada, Mexico, the Middle East and some South American markets such as Brazil.

GM’s 2024 Chevrolet Equinox EV (right) next to a gas-powered Chevy Equinox on May 16, 2024 in Detroit.
Michael Wayland / CNBC

Brad Franz, director of Chevy car and crossover marketing, said retaining the familiar names for the EVs was a “strategic decision” to leverage names people know and trust.
“The Chevy proposition here is these can make your life easier. Not only easier, but better,” he said Thursday during a media event. “How are we going to tackle that? We’ll start with just leveraging our brand reputation.”
Keeping the same names also aligns with the company’s target to exclusively offer EVs to consumers by 2035. While the automaker hasn’t shifted that goalpost in light of slower-than-expected sales of EVs, it has recently shifted its messaging to note the transition will be based on customer demand.
GM ranked fourth in U.S. market share of all-electric vehicles during the first quarter, representing 6.1% of new EVs sold, according to data provided by Motor Intelligence. Tesla, at 52.3%, is by far the leader in estimated U.S. EV sales, followed by Hyundai, including Kia, at 9.3% and Ford Motor at 7.5%.

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Over the past seven years, the number of outdoor public park pickleball courts in major cities has skyrocketed 650%, according to a new report by the Trust for Public Land.
Courts have become big business as franchises, country clubs and fitness clubs build and convert space.
Companies like Life Time and Invited Clubs boast hundreds of courts across the country.

People play pickleball at Central Park on April 8, 2023 in New York City. 
Wang Fan | China News Service | Getty Images

America’s fastest-growing sport is also rapidly growing its footprint.
Over the past seven years, the number of outdoor public park pickleball courts in major cities has skyrocketed 650%, according to a new report by the Trust for Public Land, a nonprofit organization dedicated to connecting people to the outdoors.

In 2017, fewer than half of the largest U.S. cities offered formalized pickleball courts. Today, parks and recreation departments have embraced the sport, spurring the installment of more than 3,000 courts across 100 of the most populated cities in the country.
And it’s not just local parks where you hear the infamous “pock” of pickleball. Courts have become big business as franchises, country clubs and fitness clubs build and convert space.
“There’s nothing that comes anywhere close to that growth among major park trends,” said Will Klein, associate director of parks research at Trust for Public Land. “When you look at playgrounds, ball fields, basketball courts, you know, you see very modest increases. So this is off-the-charts growth.”

Louisville, Kentucky; Madison, Wisconsin; and Honolulu are home to the most courts per capita, according to the report.
Klein said pickleball has helped attract people of all ages and backgrounds to public parks.

Public access

One community reaping the rewards of pickleball’s rapid growth: City Pickle in New York City.
Founded in 2022 by longtime friends and tennis players Erica Desai and Mary Cannon, City Pickle operates 14 courts in Central Park’s Wollman Rink. With court access starting at just $5 per hour in off-peak times (and running up to $120 during peak times), the group is now hosting hundreds of events each year and has 74,000 people booking court time through their app.
City Pickle has since expanded into other locations in Manhattan, Brooklyn and Long Island City.
“We have found New York City parks to really understand the popularity of pickleball and also the need for more courts,” said Cannon.
Yet, the co-founders are keeping their eye on the ball as they see new competition arise.
“At some point, there will become an oversaturation in suburban markets,” Desai said. “We are watching that. It’s a concern of ours, and it’s why we are very intentional about the locations and the geography that we’re seeking.”

Members only

Pickleball Kingdom, the world’s largest indoor pickleball facility, announced Tuesday more than 25 new locations scattered throughout the country.
Pickleball Kingdom first opened in 2022 and today, through franchising, has grown to over 100 clubs.
“The growth of pickleball in the United States has been extraordinary. We’re excited to meet the increasing demand and bring Pickleball Kingdom’s premier indoor pickleball to the masses,” said Ace Rodrigues, founder and CEO of Pickleball Kingdom.
Pickleball courts are also popping up at gyms throughout the country.
Life Time, an “athletic country club,” currently boasts almost 700 pickleball courts across its 170 U.S. locations.
On Monday, the company announced it is converting a former Bed Bath & Beyond location in Annapolis, Maryland, into a Life Time facility that will include 11 indoor pickleball courts.
The company said it is expecting to reach nearly 1,000 courts in the near future after seeing a 51% growth in pickleball players at its clubs last year.

Andre Agassi, Life Time Founder and CEO, Bahram Akradi, Ben Johns, Collin Johns, Anna Bright, Tyson McGuffin play Pickleball at the new Life Time PENN 1 next to Madison Square Garden on May 04, 2024 in New York City. 
Mike Stobe | Getty Images Sport | Getty Images

Life Time founder and CEO Bahram Akradi said pickleball has been a major growth driver of late for the company. He estimates Life Time has invested about $60 million in adding new outdoor courts and converting legacy club basketball courts into spaces for pickleball.
“If you look at our growth chart, it’s like Covid never happened,” he said, referencing the pandemic-era slump in gym attendance.
At Invited Clubs, the largest owner and operator of private golf clubs, CEO David Pillsbury had barely even heard of pickleball three years ago.
Today, the company maintains just under 500 courts, hosts tournaments and plans to continue investing in the sport.
“Pickleball is a bustling micro-community,” Pillsbury said. “We are in the business of curating and facilitating micro-communities, because they’re sticky and they create members who we are able to retain. They stay at clubs, they’re extremely active, and they spend.”
Pillsbury said Invited Clubs has invested between $10 million and $12 million into the sport over the past three years.

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Target’s fiscal first-quarter earnings missed estimates, as its sales fell about 3% year over year.
The retailer saw consumers buy fewer everyday items like groceries and paper towels along with discretionary goods like apparel and home decor.
CEO Brian Cornell said the results show “continued soft trends in discretionary categories.” 

A customer shops at a Target store in Miami, Florida, on May 20, 2024.
Joe Raedle | Getty Images

Target on Wednesday posted a year-over-year sales decline and missed Wall Street’s earnings estimates, as consumers fatigued from high prices bought both fewer discretionary items and groceries. 
The Minneapolis-based discounter’s revenue in the fiscal first quarter was about in line with expectations.

On a call with reporters, CEO Brian Cornell said the company’s results reflect “continued soft trends in discretionary categories.” 
He said the company wants to make sure it offers customers value and communicates that in a clear way, with moves like its relaunched loyalty program. Target also announced Monday it was cutting prices on thousands of everyday items, including milk, bread, paper towels and diapers.
Target stuck with its prior full-year forecast, saying it expects comparable sales will range from flat to up 2% and adjusted earnings per share will be $8.60 to $9.60. Company leaders said the retailer is on track to return to sales growth in the second quarter.
Shares of the company fell about 8% in premarket trading.
Here’s what Target reported for the three-month period that ended May 4 compared with what Wall Street expected, based on a survey of analysts by LSEG:

Earnings per share: $2.03 vs. $2.06 expected

Revenue: $24.53 billion vs. $24.52 billion expected

It marked the first time since November 2022 that Target missed earnings expectations. 
Target’s net income for the period fell by less than 1% to $942 million, or $2.03 per share, from $950 million, or $2.05 per share, in the year-ago quarter. 
Total revenue declined about 3% from $25.32 billion in the prior year.
Like other retailers, Target has tried to win over consumers who are not spending as freely on clothing, home goods or other discretionary items. The cheap chic retailer has been particularly hurt by the dynamic because it gets less of its sales from food than rival Walmart, which draws about 60% of its U.S. sales from groceries. That compares with roughly 20% at Target.
Inflation cooled slightly in April, but the consumer price index was still up 3.4% on a year-over-year basis. The key measure gauges how much goods and services cost at the cash register.
Target acknowledged that challenge with this week’s price cuts. 
The company is also competing with other discounters, including Walmart, Aldi and Lidl, that are chasing deal-hunting shoppers.
Walmart, for example, has gained market share from higher-income shoppers and recently introduced a premium food brand with most items under $5. The company’s CFO, John David Rainey, also said last week that customers are turning to its grocery aisles for cheaper meals because of the rising prices of fast food.

Target’s sales challenges

In Target’s first quarter, customer traffic, which includes online and stores, fell 1.9%. The average amount that customers spent on those visits dropped 1.9%, too.
Digital sales grew 1.4%. It marked the first increase in digital sales in more than a year.
Comparable sales, also called same-store sales, tumbled 3.7%, as shoppers bought beauty items but less of other discretionary categories like apparel and home. That decline was in line with what analysts expected, according to StreetAccount.
Discretionary merchandise wasn’t the only part of the store under pressure. Sales in frequency categories, food and beverage and beauty and household essentials, declined by low single digits, Chief Growth Officer Christina Hennington said on a call with reporters.
Still, Hennington said Target is seeing some encouraging trends compared with recent quarters. Sales of apparel improved by nearly 4 percentage points from the fiscal fourth quarter, as customers bought outfits for spring.
She said Target’s limited-time collection with Diane von Furstenberg drove millions of unique visits to the retailer’s website each day of the launch week and lifted the size of customers’ baskets by around 15% on average.
Other unique items also drove spending, she said. They included its partnership with tennis and lifestyle brand Prince to sell pickleball gear and Taylor Swift’s latest album, which Target capitalized on with in-store events and photo ops.
Shares of Target closed Tuesday at $155.78, bringing its market value to $72.07 billion. As of Tuesday’s close, the company’s shares are up about 9% so far this year, lagging the S&P 500’s nearly 12% gains.
– CNBC’s Robert Hum contributed to this report.

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