Raphael Stevens

New omicron infections in the U.S. have plummeted 90% from a pandemic high in a little over a month.
The U.S. is reporting about 84,000 new cases per day on average, according to data compiled by Johns Hopkins University, down from a pandemic high of more than 800,000 daily cases on Jan. 15
As the nation emerges from the omicron wave, the states and the federal government are trying to move past the crisis mentality that has gripped the nation for two years ago.

A resident receives a Covid-19 swab test during a mobile clinic at Saint Paul MB Church in Cleveland, Mississippi, on Saturday, Jan. 8, 2022.
Rory Doyle | Bloomberg | Getty Images

U.S. health officials are optimistic, albeit cautiously, the country has turned the corner on the unprecedented wave of infection caused by the omicron Covid variant as new cases plummet 90% from a pandemic record set just five weeks ago.
As the nation emerges from the omicron wave, U.S. and state leaders are trying to mentally move past the crisis that has gripped everyone since the pandemic began two years ago. Public health leaders have begun rolling out plans to deal with the virus as a persistent but manageable risk in the future.

The U.S. is reporting about 84,000 new cases per day on average, according to data compiled by Johns Hopkins University, down from a pandemic high of more than 800,000 daily cases on Jan. 15. And the decline is widespread across the nation, with average daily cases down by at least 40% in all U.S. regions over the past two weeks, according to a CNBC analysis of Hopkins data.

Hospitalizations have also fallen sharply. There are about 66,000 patients in U.S. hospitals with Covid as of Monday, according to a seven-day average of data from the Department of Health and Human Services, down from the Jan. 20 peak of 159,000 patients.
The Covid death toll, which typically lags a rise in cases by a number of weeks, is elevated but showing signs of easing. Average daily deaths reached the highest level in about a year on Feb. 1 at nearly 2,600 per day and have since fallen below 2,000.
“While we’re not where we all want to be yet, we’re encouraged by the dramatic declines we’re seeing in cases and hospitalizations nationwide,” Jeff Zients, White House Covid response coordinator, told the public during briefing last week.
The omicron variant caused a surge in cases like no other wave, pushing infections from less than 100,000 a day just after Thanksgiving to a peak of 802,000 by mid-January before falling just as rapidly. “It was really fast, furious, like a flash flood,” said Johns Hopkins epidemiologist Jennifer Nuzzo.

While the U.S. is moving in the right direction, Nuzzo cautioned that the omicron subvariant BA.2 could slow the recovery. BA.2 is more transmissible than the original omicron strain, though it’s currently circulating at a low level in the U.S.
“I don’t think BA.2 is going to cause the huge spike that we saw in the winter,” Nuzzo said, noting that there’s probably a fair amount of immunity in the population after the omicron wave. “But it’s possible it could drag out the decline, the rate of slowdown,” she said.
Though infections remain an important early warning sign, hospitalizations and deaths are the most important indicator of how the U.S. should respond to Covid moving forward, Nuzzo said. Omicron generally doesn’t make people as sick as the delta variant, so infection numbers alone don’t provide a full picture of how the pandemic is impacting society.
The U.S. now has the ability to focus its response on protecting those who remain vulnerable despite being vaccinated, Nuzzo said, such as people with compromised immune systems.
“We’re in a different state now than we were in 2020,” Nuzzo said. “We have vaccines, we have a virus that on a per case basis tends to be less lethal, even though that’s very much tied to the level of immunity that exists in our population. Now we have much more abilities to target our resources.”

CNBC Health & Science

California rolled out a first-in-the-nation plan last week to move past the crisis phase of the pandemic and deal with the virus as an ongoing manageable risk. Gov. Gavin Newsom said California had to learn to live with the virus, using the tools developed over the past two years to prepare as much as possible for an uncertain future.
“We have all come to understand what was not understood at the beginning of this crisis — that there is no end date, that there is not a moment where we declare victory,” Newsom said during a news conference Thursday.
The California plan relies on wastewater surveillance to detect rising viral transmission early. If state health officials pick up a signal, they would use genetic sequencing to determine whether a new variant is circulating. They would then move to determine within 45 days whether the current vaccines, testing and therapies are still effective against the strain. The state would also surge testing and health-care staff to regions impacted by rising infections.
As the omicron wave recedes, people are eager to shake off public health measures. New York and California let their universal mask mandates for indoor public places expire this month, though their school mask requirements remain in place for now. New Jersey is lifting its school mask mandate in March.
“This is not a declaration of victory as much as an acknowledgment that we can responsibly live with this thing,” New Jersey Gov. Phil Murphy, a Democrat, said earlier this month.
Nuzzo said lifting mask mandates as omicron subsides in states that have high levels of vaccination makes sense. However, she said choosing to wear a mask in crowded indoor spaces is still a good idea.
“We are not saying you don’t need to wear masks. We’re just not making it the job of a person in the Starbucks to have to yell at somebody and possibly call the police because they’re not wearing a mask in the store,” Nuzzo said.
The Centers for Disease Control and Prevention may soon update its mask guidance as well. Right now, the CDC recommends that everyone, regardless of vaccination status, wear masks indoors in areas of high viral transmission. Though omicron is fading, nearly every county in the U.S. still has high transmission, according to CDC data.
However, CDC Director Rochelle Walensky signaled last week week that the public health agency will focus more on hospital admissions when issuing guidance on how to deal with the virus in the future.
“We must consider hospital capacity as an additional important barometer,” Walensky told the public during a White House Covid update Wednesday. “We want to give people a break from things like mask-wearing when these metrics are better, and then have the ability to reach for them again should things worsen.”

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Home Depot wants to get more large, planned orders from home professionals as part of its growth strategy.
The company has set an ambitious target of $200 billion in annual sales, a nearly $50 billion increase from the most recent fiscal year.
Supply chain hubs that can accommodate contractors’ single orders, such as thousands of square feet of flooring or more than 100 doors, are a key part of the plan.

A customer wearing a protective mask loads lumber at a Home Depot store in Pleasanton, California, on Monday, Feb. 22, 2021.
David Paul Morris | Bloomberg | Getty Images

Home Depot’s next CEO Ted Decker said he wants home professionals to think of the company as more than a store of convenient purchases.
The retailer wants to win contractors’ larger, planned orders, like thousands of feet of flooring — not just for last-minute shopping when they scramble to find a tool or finish a job. That significant shift is part of Home Depot’s growth strategy as it tries to sustain momentum beyond the pandemic and reach $200 billion in annual sales.

“We’re sort of the 7-Eleven for pros — convenience, value, tremendous product and brands — but what we’re building now is something completely different and revolutionary to get the pro planned purchase,” Decker, the company’s chief operating officer, said Tuesday on the company’s earnings call. He takes over as CEO on March 1.
Home Depot reported that its sales increased 11% in the fiscal fourth quarter compared with the year-earlier period. But the retailer gave a conservative outlook for the next fiscal year, with sales trends “slightly positive” and earnings per share growing at a low single-digit pace.
Home Depot executives did not say when the retailer expects to hit that $200 billion goal, but it would mark a nearly $50 billion gain from its annual sales in the year ended Jan. 30.
Pandemic-fueled home-improvement projects have lifted Home Depot’s sales by more than $40 billion over the past two years. That’s roughly the same amount of total sales growth the company reported from 2009 to 2018.
About half of total sales come from home professionals, Chief Financial Officer Richard McPhail said. He estimated on the company’s earnings call that the retailer’s total addressable market in North American is more than $900 billion.

Archrival Lowe’s is also trying to chase the more reliable and lucrative pro customers. Historically, Lowe’s has had a smaller share of its business coming from professionals, with nearly 75% to 80% coming from do-it-yourselfers.
Over the past several years, Home Depot has been investing in supply chain hubs to help it better cater to pros. It’s in the middle of a five-year plan to invest $1.2 billion in its supply chain, including the ongoing construction of large facilities, called flatbed distribution centers, that can store and deliver larger orders.
It built the first one in Dallas and plans to eventually open 40 of them across major U.S. markets. It previously filled such orders out of the stores themselves.
Decker said the giant hubs have allowed Home Depot to carry a wider merchandise mix and given pros more assurance that they can get quantities they need. For example, he said a conventional store could be expected to stock only about 3,000 square feet of flooring — or enough for three odd jobs.
With the flatbed distribution centers, he said Home Depot is getting sizable single orders such as 7,000 square feet of flooring and 150 doors.
Scot Ciccarelli, a retail analyst at Truist Securities, said Home Depot wants to change professionals’ thought processes.
In the past, a pro might run to the Home Depot store when a saw blade breaks, but now, considering the changes, a contractor might be convinced to get doors and millwork, too.
“If you can do a big multifamily project and you can start to gain traction with that, that becomes kind of a big deal,” Ciccarelli said.

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Fat Brands’ stock cratered Tuesday morning after the company disclosed its CEO Andrew Wiederhorn is under investigation.
Investigators are looking into Wiederhorn’s financial dealings, as well as benefits and compensation that his family might have received.
Fat Brands said in a regulatory filing it is cooperating with the investigation.

Pakistani customers eat at a Fatburger outlet in Karachi, Pakistan.
Rizwan Tabassum | AFP | Getty Images

Shares of Fat Brands closed down nearly 23% on Tuesday after the parent of Fatburger and Johnny Rockets disclosed that its CEO has been under investigation for months.
In a regulatory filing, Fat Brands said the U.S. Attorney’s Office for the Central District of California and the Securities and Exchange Commission told the company in December that they had begun investigating CEO Andrew Wiederhorn.

The government is seeking documents and materials related to Fat Brands’ merger with Fog Cutter Capital Group in December 2020 and transactions between Wiederhorn and those entities, according to the filing. Fog Cutter Capital is the largest shareholder of Fat Brands, and Wiederhorn is its majority shareholder.
Investigators are also looking into compensation, extensions of credit and other benefits that Wiederhorn or his family may have received. Wiederhorn’s son Thayer serves as chief operating officer of the company.
The disclosure followed a Los Angeles Times report on Saturday that the allegations against Wiederhorn include securities and wire fraud, money laundering and attempted tax evasion. The newspaper also reported that federal agents raided the home of Thayer Wiederhorn and his wife Brooke — daughter of former “Real Housewives of Beverly Hills” star Kim Richards — in December.
“The government has informed FAT Brands of its investigation and the Company is fully cooperating,” Fat Brands said in a statement to CNBC. “The Company is not a target of the investigation.”
Fat Brands said in the filing that it isn’t able to estimate the outcome or duration of the government investigations at this time.

In a statement to CNBC, Wiederhorn’s attorney Douglas Fuchs said his client categorically denies the allegations and they plan to demonstrate that the government has its facts wrong.
“These loans were completely legitimate and were independently reviewed and approved,” Fuchs said. “In addition, Mr. Wiederhorn’s tax returns were prepared and approved by independent tax professionals and he has been making payments under a plan approved by the IRS.”
Fuchs also said he couldn’t comment more specifically on the allegations because the government hasn’t provided them with a copy of the affidavit despite their requests.
The SEC did not immediately respond to a request for comment from CNBC. A representative from the U.S. Attorney’s office declined to comment.
This isn’t Wiederhorn’s first time under investigation for financial crimes. In 2004, he pled guilty to filing a false tax return and paying an illegal gratuity to an associate while leading Fog Cutter Capital. He paid a $2 million fine and spent more than a year in federal prison in Oregon. During his time in prison, Fog Cutter’s board opted to pay him a bonus equal to the fine and continued paying his salary, a decision that attracted widespread criticism.

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On Tuesday, Macy’s affirmed that it will forge ahead as one retailer, despite pressure from activist Jana Partners to split into two entities.
Importantly, Macy’s decision could also have implications for retailers such as Kohl’s, Nordstrom and Dillard’s, which have all been facing similar pressure to break up.
Analysts say the appeal of an e-commerce spinoff, similar to what Saks Fifth Avenue did early last year, is waning fast as shoppers head back to stores.

A man checks his phone as he walks past Macy’s flagship store in New York City.
Getty Images

Macy’s isn’t breaking up after all.
On Tuesday, the department store chain affirmed that it will forge ahead as one retailer, despite pressure from activist Jana Partners to split into two entities.

During a call with analysts, Macy’s Chief Executive Jeff Gennette explained that the department store chain had been working closely with advisors to consider a number of scenarios, including Macy’s separating its website from its stores. The conclusion of the review process, he said, was that Macy’s is already on the right track with its turnaround plans and will accelerate those plans even more so in the coming months.
Importantly, Macy’s decision could also have implications for retailers such as Kohl’s, Nordstrom and Dillard’s, which have all been facing similar pressure to break up. Analysts say the appeal of an e-commerce spinoff, similar to what Saks Fifth Avenue did early last year, is waning fast as shoppers head back to stores and online-only entities incur heftier expenses to acquire customers and to handle shipping and returns.
Gennette gave four key reasons as to why Macy’s decided not to spin off its e-commerce arm. One is that Macy’s isn’t currently constrained for capital to invest in its business. Second is that a breakup would come with high separation costs, he said. Third is that running two separate businesses would come with heightened ongoing expenses. And lastly, according to Gennette, is the risk that a breakup could deter customers from shopping the Macy’s brand.
“In every alternative scenario we considered, the execution risk for the business and our customers was too high,” the CEO said. “We determined that Macy’s has a stronger future as a fully integrated business … with Macy’s and Bloomingdale’s together with a broad range of brands, price points and customers across digital and stores.”
Macy’s Chief Financial Officer Adrian Mitchell echoed this sentiment on the earnings conference call and said that Macy’s long-term strategy is durable. “It’s important to acknowledge that today we’re in just a much different competitive position than we were even just two years ago,” he said.

In turn, Macy’s says it will ramp up plans to open additional small-format stores and create more of its own private labels. It also has been working on a digital marketplace that’s expected to debut later this year.
Jefferies analyst Stephanie Wissink said it isn’t a big surprise that Macy’s rejected the idea of splitting online from stores. Activist heat has cooled off in recent months, she said, and the risks of a breakup was too high for Macy’s.
Jana had slashed its holdings in Macy’s by 84% in the last months of 2021, according to a regulatory filing, following its push in October for the retailer to break up. Jana didn’t give a reason for the selling at the time.
A representative for Jana didn’t immediately respond to CNBC’s request for comment.
GlobalData Retail Managing Director Neil Saunders added about Macy’s that, “Management knows that stores and online are part of the same ecosystem and that the business works best when both are fully aligned and part of the same entity.”
“What is in the interest of Wall Street investors making short term gains, is not necessarily in the interest of the long-term health of the company,” Saunders added.
To be sure, he noted that Macy’s is resisting the urge to split from a position of strength, on the heels of its better-than-expected results for the fiscal fourth quarter. Kohl’s and Nordstrom are not performing as well, Saunders said, which could make it all the more difficult for them to dismiss calls from investors who are looking to make changes.
Nordstrom is said to be working with AlixPartners to review a potential spinoff of its off-price division, Nordstrom Rack. Kohl’s, meantime, has seen pressure from activists to pursue a spinoff of its online division similar to Saks. Kohl’s has also come under pressure to consider an outright sale.
Both Kohl’s and Nordstrom are expected to report quarterly results next Tuesday.
Though Saks and now Saks.com are two privately held entities, management has been very public about the appeal of a split, particularly in the luxury segment.
Run by President Larry Bruce, Saks stores are still entirely owned by HBC. Saks’ digital unit, however, received an investment from the venture capital firm Insight Partners, which now has a minority stake in the business. Marc Metrick, formerly chief executive officer of the combined Saks businesses, leads the digital side.
Under Metrick, Saks.com was reportedly preparing for an initial public offering, targeting the first half of this year. But it’s unclear if that timeline has changed at all, or if those plans are still on the table.
A representative from Saks didn’t immediately respond to CNBC’s request for comment.
Macy’s shares closed Tuesday down about 5%, in spite of the department store chain issuing an upbeat outlook for 2022. The stock is up nearly 60% over the past 12 months.
Kohl’s is down 3% over the same period, while Nordstrom has dropped 46%. Dillard’s has surged 188% over the past 12 months.

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Peloton’s connected fitness services appear to be working again for most users, after the company suffered a major outage Tuesday morning.
In a note posted on its website at 12:11 p.m. ET, Peloton wrote: “We are seeing widespread recovery of Peloton services.”

A Peloton store in Walnut Creek, California, U.S., on Monday, Feb. 7, 2022.
David Paul Morris | Bloomberg | Getty Images

Peloton’s connected fitness services appear to be working again for most users, after the company suffered a major outage Tuesday morning that meant members were unable to take live and on-demand fitness classes.
In a note posted on its website at 12:11 p.m. ET, Peloton wrote: “We are seeing widespread recovery of Peloton services. We are still working to confirm all services are back and operational. We apologize for any impact this may have had on your workout.”

A little before 11 a.m. the company said it was investigating the service issue, which it said “may impact your ability to take classes or access pages on the web.”
Peloton shares closed the day down 3.6%.
The cause of the outage wasn’t immediately clear, though it impacted both Peloton’s Bikes and its treadmill machines, known as Treads. Salesforce-owned Slack was also down for some users on Tuesday morning, hampering workplace communications.
Some Peloton members took to Twitter to express their frustration with the online services down. Some said they had just been gearing up for a workout as the app crashed — others were in the middle of one.
Earlier this month, Peloton got a new CEO in Barry McCarthy, a former Spotify and Netflix executive. Peloton founder and former CEO John Foley has transitioned to executive chairman of the connected fitness company.

McCarthy has been tasked with right-sizing costs and resetting the business after it experienced tremendous growth during the Covid pandemic.
Peloton shares are down about 77% over the past 12 months.

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AT&T is the first major provider to wind down its 3G services by Tuesday, followed by T-Mobile and Verizon later this year.
The shutdowns – known as network sunsets – are expected to impact millions of vehicles that use 3G networks for updates and remote communication.
Effects for vehicle owners will vary from nothing to losing some in-car emergency and convenience features.

The planned shutdown of outdated 3G networks will affect the connected systems of dozens of vehicle models that hit the market anytime from 2010 to as recently as 2021, in some cases.
Dusan Petkovic | iStock | Getty Images

Millions of vehicles in the U.S., including Teslas, Audis, Hondas and Nissans, will lose some emergency and convenience features by Tuesday, as AT&T becomes the first telecommunications company to disable its 3G network this year.
The shutdowns – known as network sunsets – affect older cellphones but also other products such as home security systems and vehicles that use 3G networks for updates and remote communication.

The impact for vehicle owners will vary based on their car or truck, millions of which were made during the past decade or so with 3G connectivity. Some owners may not experience any problems, while others could lose automatic emergency response services in the event of a crash and certain infotainment and convenience features such as real-time navigation and smartphone app features such as pre-cabin conditioning.

“This is crazy times, when you think about it. 3G did not come out that long ago and the first sunset is already happening,” said Kenny Hawk, CEO of Mojio, a mobility services company that is partnering with Volkswagen and Audi to maintain emergency services. “You’ve got a lot of vehicles out there … that had 3G embedded telematics control units, modems and antennas that will only work on 3G networks.”
To be clear, the discontinuation of the 3G networks is not expected to make any vehicles obsolete but could cause inconveniences and reduce emergency safety features that can save lives. Resale values of the vehicles also could be impacted, as some functionality may not work as they did when the vehicles were new.

‘A slow motion disaster’

AT&T is the first major provider to wind down its 3G services, which will be discontinued Tuesday, followed by T-Mobile and Verizon later this year. Other smaller carriers that rely on those networks such as Cricket, Boost and Straight Talk also will be impacted.
The telecommunications companies are conducting the 3G sunsets to free up infrastructure and capital to support newer ones, such as emerging 5G services.

“Since February of 2019, we have worked with automotive manufacturers to help them transition their connected cars to newer technology before 3G services end February 22. Customers have received, and will receive additional, communications as we work with them on this transition, including direct mail, bill messages, emails and text messages,” AT&T said in an emailed statement Monday.
Even though cellular providers have been warning that their 3G networks will shut down permanently for some time, many automakers still installed devices that use the older network until as recently as the 2021 model year.

William Wallace, Consumer Reports’ manager of safety policy, described the situation as “a slow motion disaster,” as automakers are either doing nothing or scrambling to maintain services for owners.
“We’re talking about millions of vehicles that will lose features that were promised to owners, and that no longer will be delivered,” he said. “In some cases, those features are safety features, things that can help them from dying or getting seriously injured after a crash.”
Consumer Reports has a large list of impacted vehicles by automotive brand. Owners, if they haven’t been contacted by automakers already, also can check brand websites to find out if their vehicle is affected.

Auto impact

Solutions from automakers to fix the problems vary greatly. They range from discontinuing some services to offering software and hardware upgrades, some of which require owners to pay one-time fees or enroll in new monthly or annual subscriptions.
“It’s hit and miss. Not every automaker’s solution is the same,” said Autotrader executive editor Brian Moody.
Tesla, for example, is charging $200 for owners of Model S vehicles built before June 2015 to upgrade their vehicle’s modem, according to its website. Without the update, Tesla says drivers will lose several remote capabilities and certain infotainment features, including navigation, maps and live traffic updates.
Owners of some Hondas have until Tuesday to download new software free of charge. Otherwise, they will have to pay upward of $900 for a hardware upgrade or lose certain features, according to Consumer Reports.

A view of the dashboard in a Tesla Model S car.
Getty Images

“Manufacturers, on a case-by-case, are taking a look at how many people are actually impacted by this shutdown of 3G and as they inevitably do with anything, they’re making a decision about are there enough people that are going to be impacted by this to justify developing some sort of upgrade?” said Guidehouse Insights principal analyst Sam Abuelsamid.
Others such as Volkswagen, Audi and Stellantis, which owns the Jeep, Ram and Chrysler brands, are offering third-party alternatives for some services.
Mojio’s solution with Audi and Volkswagen is a plug-in device that connects to the vehicle’s telematics, or OBD, port to maintain many emergency services. It will be offered free for Audi customers for a certain period before moving to a subscription service, Hawk said.
Wallace criticized some automakers for taking advantage of the situation to try and charge owners for services that were promised to them for free when they purchased the vehicle.
General Motors, which builds Chevrolet, Buick, GMC, and Cadillac vehicles, has been sending out remote updates to maintain services since October, according to a spokeswoman. Other automakers such as Toyota Motor are simply letting services expire.
“Although these circumstances were created by factors beyond our control, we sincerely regret any inconvenience this may cause,” Toyota said in a statement on its website about the end of the services scheduled for Nov. 1.
Owners of Ford Motor vehicles, including its luxury Lincoln brand, will be relatively unimpacted by the 3G sunset other than an older version of an app no longer being offered, a spokesman said.

Safeguarding auto tech

Network sunsets aren’t new for the automotive industry, but the effect on consumers is becoming more widespread, as automakers have expanded their connected vehicle fleets and services for greater revenue opportunities.
“The difference this time is in the past the number of vehicles that were impacted by it was comparatively small, as a percentage of the overall vehicle population,” Abuelsamid said.

OnStar’s 4G LTE dash system is displayed on a Chevrolet Impala.
Daniel Acker | Bloomberg | Getty Images

Automakers are attempting to safeguard future vehicles from network sunsets to ensure they can handle or easily be upgraded to support newer networks, according to company officials. Wallace contends automakers, telecommunications companies and federal regulators need to prepare more for when 4G, which is widely being used in new vehicles, ends.
“Congress needs to get on this and make sure that this total disaster doesn’t happen again with 4G,” Wallace said.

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