Raphael Stevens

Demand for raw materials in the paint industry soared over the pandemic as quarantined consumers took to DIY projects and home improvement. But supply just couldn’t keep up.
“The raw-material shortage is still something we have a meeting once a week to discuss what are we out of this week,” Jeff Grasty, president of Florida Paints, told CNBC.

Sales at paint and wallpaper stores in the U.S. spiked 7.8% annually in June 2021 to $1.34 billion. The pace of sales increases has slowed but is nevertheless robust. For example, the latest data available shows a sales total of $1.1 billion in November.
Two of the largest paint companies, Sherwin-Williams and PPG, have said worsening supply chain shortages are impairing their ability to manufacture products.
That impairment is due to a confluence of factors. Paint companies source pigments from global trade networks, making their products vulnerable to supply chain issues and climate change.
“To make a gallon of paint the exact same as the next one, you have to have that same amount of color pigment in it,” Tony Piloseno told CNBC.
Piloseno started his own paint company and now works with Florida Paints. He fell in love with mixing paint at a part-time job during his college years, and now he brings that love of color to his large TikTok following.

“I get orders that sometimes I can’t even keep up with,” Piloseno said.
So far the higher prices haven’t put a lid on sales. Indeed, producer prices for painting and coating manufacturing rose 15.7% in December 2021 from a year ago. For comparison, on a 12-month basis, the producer price index was up 9.7% to end 2021, the highest calendar-year increase since 2010. 
“If nothing else happens in the chemical supply chain, we’re forecasting the fourth quarter of 2022, and possibly into the first quarter of 2023, before we see some sort of normal,” said Dan Murad, CEO of the ChemQuest Group.
Watch the video above to learn more about how the paint supply chain works, what it takes to manufacture paint and why prices are rising.

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Plastic surgery has been booming over the past decade. Pop culture and social media helped to influence a new generation of people being proud and transparent about cosmetic enhancements.
But in 2020, things took a dip. Hospitals and centers closed, staff members were laid off and elective surgeries came to a halt. However, the plastic surgery industry bounced back strong.

Experts point to a phenomenon called the “Zoom effect” or the “Zoom Boom.” Covid limitations shifted in-person meetings and social events to video calls, meaning more people became hyper-critical of their facial features. That dissatisfaction led to a much higher interest in plastic surgery above the shoulder.
Some patients are motivated by the downtime spent at home. An increase in work-from-home policies at some U.S. employers allows for patients to fully recover at home without using their paid time off. 
Others are motivated by the ability to recover in plain sight — more and more people are getting procedures done on features that are covered by their masks. The opposite is also having a moment — surgeons report an increase in patients getting work done above the nose since those features are highlighted when a person is wearing a mask.   
Another big influence? Finances. Many hopeful plastic surgery candidates were able to save substantial amounts of money during stay-at-home restrictions in order to afford their dream procedure.
Doctors say the future of plastic surgery is more plastic surgery. With cosmetic treatments becoming more advanced, more affordable and less taboo, the Covid-19 boom is just the beginning.

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Peloton announced Tuesday it plans to replace CEO John Foley and cut 2,800 jobs, or about 20% of corporate positions.
Barry McCarthy, the former chief financial officer of Spotify and Netflix, will become CEO and president and join Peloton’s board.
Peloton said it expects to slash roughly $800 million in annual costs and reduce capital expenditures by roughly $150 million this year.

John Foley, CEO of Peloton.
Adam Jeffery | CNBC

Peloton is overhauling its C-suite, cutting hundreds of other corporate jobs and slashing millions of dollars in annual costs as it hopes to win back investors’ confidence and reset its business for growth coming out of the pandemic.
The connected fitness company announced Tuesday it plans to replace CEO John Foley and cut 2,800 jobs, or about 20% of corporate positions.

Barry McCarthy, the former chief financial officer of Spotify and Netflix, will become CEO and president and join Peloton’s board. McCarthy currently serves on the board of delivery start-up Instacart.
Peloton shares were falling around 8% in premarket trading on Tuesday, having closed Monday up nearly 21%. As of Monday, the stock is down about 31% year to date, giving Peloton a market value of $9.7 billion.
The job cuts won’t affect Peloton’s instructor roster or content. The company employed 6,743 people in the United States as of June 30, more than double the roughly 3,281 employees it counted a year earlier, according to annual filings.
Peloton said it expects to slash roughly $800 million in annual costs and reduce capital expenditures by roughly $150 million this year.
It plans to wind down the development of its Peloton Output Park, the $400 million factory that it was building in Ohio. It said it will reduce its delivery teams and the amount of warehouse space it owns and operates.

The news of Foley stepping down, along with other cost cutting measures, came ahead of the release of Peloton’s fiscal second-quarter results. That release had been planned for after the market Tuesday, but the company moved up the announcement, and will hold a conference call at 8:30 a.m.
In January, Peloton reported preliminary quarterly revenue and subscriber figures, but Tuesday’s announcement also included a lower forecast for this year’s results.
Peloton now anticipates fiscal 2022 revenue within a range of $3.7 billion to $3.8 billion, down from prior expectations of $4.4 billion to $4.8 billion.
The company also anticipates it will end the year with about 3 million connected fitness subscribers. Previously, it projected it would have 3.35 million to 3.45 million.
“Since founding Peloton a decade ago, we’ve grown this brand to engage and motivate a loyal community of more than 6.6 million Members,” Foley said in a press release announcing the leadership changes. “I’m incredibly proud to have worked with such talented teammates over the years who have helped me build Peloton into what it is today, and I’m confident that Barry is the right leader to take the company into its next phase of growth.”
Foley called out McCarthy’s experience manging subscription business models and digital streaming companies.
Foley will become executive chair of the company’s board, while William Lynch, Peloton’s president, will step down from his executive role but remain a director.
Erik Blachford, a director since 2015, will leave the board. And two new directors will be added: Angel Mendez, who runs a private artificial intelligence company focused on supply chain management, and Jonathan Mildenhall, former chief marketing officer of Airbnb.
In a release announcing the board appointments, Pamela Thomas-Graham, chair of the nominating committee, said the appointments came after a several months search. With these changes the board will have 9 directors.
“As Peloton continues to evolve, we are committed to regularly evaluating our Board’s composition to ensure we have the right mix of skills and experience to advance our goals,” she said.
Roughly a week ago, activist Blackwells Capital — which has a less than 5% stake in the company — sent a letter to Peloton’s board urging Foley to quit his role as CEO, and asking the company to consider selling itself.
Reports have since circulated that potential suitors could include Amazon or Nike. However, Foley along with other Peloton insiders had a combined voting control of roughly 80% as of Sept. 30, which would make it practically impossible for any deal to go through without their approval.
Following Tuesday’s news, Blackwells Chief Investment Officer Jason Aintabi said the actions didn’t go far enough.
“Peloton CEO John Foley naming himself Executive Chairman and hiring a new CFO does not address any of Peloton investors’ concerns,” Aintabi said in a statement. “Mr. Foley has proven he is not suited to lead Peloton, whether as CEO or Executive Chair, and he should not be hand-picking directors, as he appears to have done today.”
Foley, 51, founded Peloton in 2012. He previously served as the president at Barnes & Noble. Foley also brought on his wife, Jill, to lead up Peloton’s apparel business.
Lynch, a former Barnes & Noble CEO, was brought on by Foley in 2017 to help drive growth.
The duo helped lead Peloton through its highs during the Covid pandemic, when the company saw consumer demand massively pulled forward, as people in the United States and abroad were looking to exercise without going to the gym. But in order to meet that surge in demand, Foley over invested and Peloton was left with a bloated cost structure that it must now restructure in order for the business to survive.
Peloton’s market value had surged to roughly $50 billion about a year ago, but was recently hovering around just $8 billion, before news over takeover talks started circulating.
On Tuesday morning, shares were on pace to open below their debut price of $29. The stock had fallen below that mark on Jan. 20, after CNBC reported that Peloton was adjusting its production levels to meet lower demand.
Foley had said in a statement that evening, “We are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company.”
Investors have since been awaiting details on what exactly those corrective actions will look like.

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Pfizer expects to sell $32 billion of its Covid-19 shots and $22 billion of its antiviral coronavirus treatment pill Paxlovid.
The company posted mixed fourth-quarter results, beating on earnings but missing on revenue.
Pfizer expects $98 billion to $102 billion in sales for 2022, and adjusted earnings per share of $6.35 to $6.55.
On an unadjusted basis, Pfizer’s fourth-quarter profit increased more than fourfold to $3.39 billion.

Pfizer CEO Albert Bourla addresses a press conference after a visit to oversee the production of the Pfizer-BioNtech COVID-19 vaccine at the factory of U.S. pharmaceutical company Pfizer in Puurs, Belgium April 23, 2021.
John Thys | Pool | Reuters

Pfizer projects it will generate record-high revenue in 2022, saying Tuesday it expects to sell $32 billion of its Covid-19 shots and $22 billion of its antiviral coronavirus treatment pill Paxlovid this year.
However, the company posted mixed fourth-quarter results, beating on earnings but missing on revenue. Pfizer’s stock was down more than 3% in pre-market trading.

Here’s how the company performed compared to what Wall Street expected, based on analysts’ average estimates compiled by Refinitiv:

Adjusted EPS: $1.08 vs. 87 cents expected
Revenue: $23.84 billion vs. $24.12 billion expected

Pfizer’s miss on revenue was driven by lackluster sales in its internal medicine and hospital segments. Fourth-quarter internal medicine sales fell 3% year-over-year to $2.24 billion, while hospital sales were largely flat at $1.88 billion compared to the same quarter in 2020. Pfizer’s oncology sales grew 7% to $3.24 billion compared with the same three months in the previous year.
However, Pfizer’s fourth-quarter revenue more than doubled overall to $23.84 billion year-over year, driven by $12.5 billion in sales of its Covid vaccine. The company’s antiviral pill that fights Covid, Paxlovid, contributed $76 million in U.S. sales during the fourth quarter. The Food and Drug Administration gave the pill emergency approval in December.
On an unadjusted basis, Pfizer’s fourth-quarter profit increased more than fourfold to $3.39 billion from $847 million during the same three months in 2020.
Pfizer expects $98 billion to $102 billion in sales for 2022, and adjusted earnings per share of $6.35 to $6.55.

Pfizer started a clinical trial late last month of a Covid vaccine that targets the omicron variant in adults ages 18 to 55. CEO Albert Bourla has said the company expects to have the vaccine ready by March.
Pfizer and its partner BioNTech are also working with the Food and Drug Administration to expedite authorization of their Covid vaccine for children under 5-years-old this month, the last age group left in the U.S. that is not eligible for immunization. The companies expect kids under 5 will ultimately need three doses, but they are working to get the first two shots FDA authorized while they finish trials on the third dose.
Pfizer is also working to ramp up production and delivery of Paxlovid. Bourla has said Pfizer expects to produce 6 million to 7 million courses in the first quarter this year and 120 million by the end of the year. The U.S. government has ordered 20 million courses, with 10 million expected by June.
This is a developing story. Please check back for updates.

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Tesla is known for sparking an electric vehicle revolution. It’s also brought services to customers, like mobile repairs and over-the-air tune-ups, that were once reserved for only the most elite car companies. 
Unlike the independent dealership model used by companies like Ford, GM, and almost every other car manufacturer in the U.S., where dealerships and service centers are owned and operated separately from the brand itself, Tesla operates all of its own service centers.

But it isn’t easy to change that model, and Tesla has struggled to keep up with service as sales have soared.  Customers have complained about long wait times, a lack of loaner cars, and having to travel hours to get to the nearest service center when a mobile ranger can’t fix the problem.
Other electric vehicle start-ups like Rivian and Lucid are following in Tesla’s footsteps with their service models. But will it be possible for Tesla and others to scale up service fast enough and keep customers happy?
Watch CNBC’s deep dive— the pros and cons of Tesla’s service

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The governor of the Bank of England has sparked serious backlash after telling Britons they should not ask for a pay raise this year.
British Prime Minister Boris Johnson and workers unions have been among those to decry his comments.
Bailey told the BBC last week that businesses should assert “restraint” in pay negotiations to help battle 30-year high inflation.

Andrew Bailey, governor of the Bank of England, speaks at a press conference on the Monetary Policy Report at the Bank of England on Feb. 3, 2022 in London, England.
Dan Kitwood | Getty Images News | Getty Images

The governor of the Bank of England has sparked serious backlash after telling Britons they should not ask for a pay raise this year, even as the country grapples with its greatest cost of living crisis in decades.
British Prime Minister Boris Johnson and workers unions have been among those to decry Andrew Bailey, who last week said that employees should not pressure their bosses into boosting wages as the economy needs time to recalibrate amid soaring inflation.

Speaking to the BBC hours after the central bank imposed back-to-back interest rate hikes, the governor said businesses should assert “restraint” in pay negotiations to help battle 30-year high inflation.
When asked by the BBC whether the Bank was asking workers not to demand big pay rises, Bailey said: “Broadly, yes.”
He said that while it would be “painful” for workers, some “moderation of wage rises” is needed to prevent inflation from becoming entrenched.

Why Bailey is backing lower wages

Bailey’s comments correspond with the economic theory that rising wages lead to higher inflation.
As wages go up, so too does the cost of producing goods and services, leading companies to charge consumers more, thereby inflating living costs. In an already inflationary environment, that could lead to a vicious circle known as the “wage-price spiral” — a phenomenon that Britain experienced in the 1970s.

Such concerns prompted the Bank to raise interest rates to stem inflation, which is forecast to hit 7.25% in April, and bring it closer in line with its 2% benchmark. But the governor’s comments suggest that employees should be proactive, too, to avoid further escalation.
“In the sense of saying, we do need to see a moderation of wage rises. Now that’s painful. I don’t want to in any sense sugar that, it is painful. But we need to see that in order to get through this problem more quickly,” Bailey said.

Outcry as soaring living costs bite

However, the governor’s comments were seen as grossly insensitive, not least because his latest annual pay packet was worth over £575,000 ($777,115) — 18 times the U.K. average for a full-time employee.
Britain is currently battling soaring living costs, with household finances already stretched and post-tax incomes forecast to fall 2% this year.
A spokesperson for Boris Johnson rejected Bailey’s calls for wage restraint, saying it’s not the government’s role to “advise the strategic direction or management of private companies.”
Meanwhile, unions across the country hit out at what they saw as Bailey’s tone-deaf comments.
“Telling the hard-working people who carried this country through the pandemic they don’t deserve a pay rise is outrageous,” said Gary Smith, general secretary of the pan-industry GMB trade union.
“According to Mr Bailey, carers, NHS workers, refuse collectors, shop workers and more should just swallow a massive real-terms pay cut at the same time as many are having to choose between heating and eating.”

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