Raphael Stevens

Gordon Brown told CNBC Britain is now being viewed through a “lens of these scandals.”
British Prime Minister Boris Johnson is facing calls for his resignation following reports that his Conservative government broke Covid-19 rules.

The U.K.’s ambitions to position itself as a global power are facing a setback as a string of domestic political dramas continue to distract the government from its international responsibilities, former Prime Minister Gordon Brown has said.
Speaking to CNBC, the ex-leader of the Labour party — currently in opposition to Boris Johnson’s Conservatives — said that Britain is now being viewed through a lens of scandal as Downing Street battles ongoing revelations of misconduct at the highest levels of government.

“People, I’m afraid, are looking at Britain through the lens of these scandals,” Brown told CNBC’s Tania Bryer on Friday.
Current Prime Minister Johnson and his ruling Conservative Party have been embroiled in scandal following reports of parties and gatherings in Downing Street during periods of Covid-19 lockdowns and restrictions.
The scandal, dubbed “partygate,” is the latest in a string of political dramas to have rocked Johnson’s premiership and prompted calls for his resignation — including from within his own party. The outcome of those calls will largely hinge an inquiry into the parties, which is due to be published as soon as this week.
It comes as Britain seeks to establish new diplomatic and trade ties in the face of a post-Brexit future.
“Outside of the European Union, we’ve been trying to formulate this idea that there can be a global Britain, a Britain that can be a problem solver,” said Brown, a staunch advocate of remaining in the EU.

“The problem is, when you’re engulfed in scandal as the government is, it is making very little contribution.”
Among the plethora issues the U.K. should be focusing on are the crisis in Ukraine, global vaccination efforts, the political turmoil in Afghanistan, and climate change, said Brown.
“These are long-term decisions that have got to be made, and if you’re focusing only on the short term survival of a few ministers, then you’re not actually dealing with the big problems that the public want you to address.”

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Kohl’s is fielding takeover offers from at least two suitors.
The news set the company’s stock soaring in premarket trading.
Sycamore is willing to pay at least $65 per share for Kohl’s, implying a 39% premium to the stock’s last close of $46.84, people familiar with the matter tell CNBC.
The offer from Sycamore came two days after Acacia Research, backed by activist investment firm Starboard Value, offered to pay $64 a share for Kohl’s, sources said.

People shop at Kohl’s department store amid the coronavirus outbreak on September 5, 2020 in San Francisco, California.
Liu Guanguan | China News Service | Getty Images

Kohl’s shares soared more than 26% in premarket trading Monday, as the department store chain is fielding takeover offers from at least two suitors.
Private equity firm Sycamore is willing to pay at least $65 per share for Kohl’s, implying a 39% premium to the stock’s last close of $46.84, people familiar with the matter tell CNBC. These people requested anonymity because the talks are private.

The offer from Sycamore came two days after Acacia Research, backed by activist investment firm Starboard Value, offered to pay $64 a share for Kohl’s, according to people familiar with the proposals.
These sources tell CNBC that Acacia and Starboard would likely partner with Oak Street Real Estate Capital to try and sell off Kohl’s real estate to raise more money. In the past, however, Kohl’s has opposed such type of sale-leaseback deal.
Representatives from Sycamore, Acacia, Oak Street Real Estate and Kohl’s didn’t immediately respond to CNBC’s requests for comments.
In recent weeks, Kohl’s also has been facing pressure from activist investors Macellum Advisors and Engine Capital to improve its business and boost its stock price.
Kohl’s responded by saying its strategy is working. It pointed to growing sales and profitability in the fiscal third quarter and the launch of new initiatives, including Sephora shops inside of its stores.

Last April, the department store chain reached a deal with a group of activists that included Macellum to add two of the group’s nominees to its board as independent directors.
Credit Suisse analyst Michael Binetti said he expects that Kohl’s could warrant a per-share value of between $70 and $80, based on the valuation of its retail operations.
“We do think there’s some merit to Kohl’s embracing a slightly more aggressive real estate strategy to bolster shareholder returns today,” said Binetti, in a note to clients.
As of Friday’s market close, Kohl’s had a market cap of $6.5 billion.

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Ford is expanding its Bronco SUV lineup to include a new “desert-racing beast” model that will go on sale later this year.
The 2022 Ford Bronco Raptor adds to an already wide lineup of the popular SUVs as the automaker attempts to fulfill an order bank of more than 100,000 orders and reservations for current models.
Ford CEO Jim Farley called the new vehicle a “desert-racing beast.”

2022 Ford Bronco Raptor

DETROIT – Ford Motor is expanding its Bronco SUV lineup to include a new Raptor model that will go on sale later this year starting at about $70,000.
The 2022 Ford Bronco Raptor adds to an already wide lineup of the popular SUVs as the automaker attempts to fulfill an order bank of tens of thousands of reservation holders for current models. Ford said a majority of the first new Raptor models will be offered to existing reservation holders, followed by orders opening in March and deliveries beginning in the summer.

“We poured all of our passion and all of our Bronco and Raptor know-how into creating this absolute desert-racing beast,” Ford CEO Jim Farley said in a release.

2022 Ford Bronco Wildtrak (left) and 2022 Ford Bronco Raptor

Automakers have increasingly been adding performance models to their lineups as a way to beef-up profit margins on vehicles and generate attention. Most recently, General Motors last week announced a new high-performance Cadillac Escalade model.
Ford uses the Raptor name for performance, high speed off-road variations of its popular F-150 pickup in North America and a Ranger midsize pickup in global markets. The name has a fan following, which Ford will try and replicate with Bronco owners.
“This is truly not only a Bronco, but it has earned the Raptor badge,” Derek Bier, Ford performance vehicle engineering manager, said during a media event.

The Bronco Raptor looks similar to current models but features a host of new performance and off-road parts specifically designed for desert-racing as well as extreme rock crawling. It’s also nearly 10 inches wider than the current models, a trait shared with F-150 Raptors.

The vehicle also features a “FORD” Raptor grill similar to the F-150; enhanced hood, including additional vents for cooling the engine; unique tail lights; and upscale interior, including additional structural bars and a new 12-inch driver instrument cluster.

2022 Ford Bronco Raptor

“It’s a very, very high-performance vehicle,” said Paul Wraith, Bronco design chief. “This is hungry beast. It needs cooling.”
The Bronco Raptor will be powered by a 3.0 liter twin-turbo engine that’s expected to generate more than 400 horsepower, according to Ford. That compares with the Bronco’s current top engine, a 2.7-liter twin-turbo engine with up to 330 horsepower.
The Bronco Raptor will start at $69,995, Ford said. Starting pricing of current Broncos range from about $30,000 to $50,000.

2022 Ford Bronco Raptor

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Fast-food value deals are back in full force after nearly two years underground, but chains are hiking prices as they face higher food costs.
Tougher competition means restaurants want to drive foot traffic to their locations, so some chains are strategically tweaking promotions to avoid a hit to their profit margins.
Other chains are opting to cut discounts instead of making more unilateral menu price hikes.

A Domino’s Pizza delivery driver
Jason Alden | Bloomberg | Getty Images

Fast-food value deals are back in full force after nearly two years underground, but they look a little different.
For the first time in more than two decades, Little Caesars raised the price of its $5 Hot-N-Ready pizza. Popeyes’ Big Box Deal has returned after four years away, only this time it’s an extra dollar for the value meal if you order at the restaurant. And Domino’s Pizza will only offer its $7.99 deal to digital customers.

Faced with climbing food and labor costs, restaurant chains are tweaking their value meals, trying to strike a balance between driving traffic growth in slower months and maintaining profit margins.
“This is a highly promotional time of year. January and February is traditionally when you see a lot of the promotions and discounts,” BTIG analyst Peter Saleh said. “I think restaurants are trying to recapture some of the lost traffic that hasn’t come back because of the pandemic, and many of those are going to require some discounts to get those consumers back in the door.”
The return of promotions means the restaurant industry is getting more competitive, according to Saleh. But now chains are also raising prices on their value meals or focusing on promoting menu items that are experiencing lower inflation.
“There is almost nobody on TV trying to advertise chicken wings,” Saleh said.
In July through September, 17% more restaurant operators were offering value meals on their menus, compared with the same time a year ago, according to Technomic Ignite data.

The cost of breakfast value meals climbed 19.6%, and snack value meals saw their prices rise 11.5%. However, the overall average price of value meals fell by 1.3% compared with the year-ago period, the researcher said.
David Henkes, principal at Technomic, said the decline in value meals’ costs, as shown in the data, could be caused by restaurants switching their focus to limited-time offers with higher margins. He added that another reason could be fast-food chains using lower-cost ingredients or reducing portion sizes to make the meal look cheaper, even though it’s different than the original value meal.
Domino’s is one of the fast-food chains making changes to its national promotions this year. CEO Ritch Allison told investors at the virtual ICR Conference earlier in the month that the decision was spurred on by higher food basket costs.
The first promotional offer to receive a makeover is its $7.99 weeklong carryout offer. In addition to only being available for digital customers, the chicken wings and boneless wings will be downsized from 10 pieces to just eight.
“Moving the offer to online has several benefits,” Allison told conference attendees. “One is a higher ticket, two is a lower cost to serve because we’re not having to answer the phones and third is that we get access to critical data.”
The pizza chain opted not to change the pricing on the deal because of customers’ existing familiarity with the $7.99 price.
Popeyes is using a similar strategy. Its Big Box deal will only be $5 — its previous price — when customers order it for pickup through the fried chicken chain’s app or website. But if they order at the restaurant or in the drive-thru lane, they’ll have to pay an extra dollar. The Restaurant Brands International chain said in a statement to CNBC that it designed this year’s promotion to help drive digital growth.
Big chains aren’t the only ones tweaking their promotional menus. Leanna Olbinsky, director of restaurant success for point-of-sale company Table Needs, said she’s seeing independent restaurants take a new approach to value meals and focusing more on using ingredients already stocked in their fridges and shelves.
“For example, if you have a really popular burger that utilizes bacon, now we’re going to make an appetizer available as a happy hour deal option, utilizing all the ingredients we already have,” she said.
Still, some restaurant chains are planning on fewer promotions altogether. Darden Restaurants’ Olive Garden likely will never bring back its Never-Ending Pasta Bowl deal, incoming CEO Rick Cardenas said on the company’s December earnings call. El Pollo Loco interim CEO and CFO Laurance Roberts said in November that the chain would look at cutting discounts rather than raising prices across its menu. And Carrols Restaurant Group, the largest U.S. Burger King franchisee, said at the virtual ICR Conference that lower discounts will continue throughout the first quarter.

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Conditions are ripe for Covid-19 to mutate into more new variants, and it is dangerous to assume the pandemic is approaching its endgame, the WHO’s top official warned on Monday.
Last week, an average 100 cases were reported every three seconds, Dr. Tedros Adhanom Ghebreyesus added, and someone lost their life to the virus every 12 seconds.
However, Tedros was optimistic that with the right course of action, the pandemic could reach a turning point in 2022.

WHO Director-General Tedros Adhanom Ghebreyesus speaks during a press conference on December 20, 2021 at the WHO headquarters in Geneva
Fabrice Coffrini | AFP | Getty Images

Conditions are ripe for Covid-19 to mutate into more new variants, and it is dangerous to assume the pandemic is approaching its endgame, the WHO’s top official warned on Monday.
Addressing the WHO’s executive board, Director-General Tedros Adhanom Ghebreyesus said since the omicron variant was identified just nine weeks ago, more than 80 million Covid cases had been reported to the WHO — more than were reported in the whole of 2020.

Last week, an average 100 cases were reported to the WHO every three seconds, Tedros added, and someone lost their life to the virus every 12 seconds.
While cases have been surging, Tedros noted that the “explosion” in cases had not been matched by a surge in deaths, although fatalities were rising in all regions, particularly in Africa where countries were struggling to access vaccines.
“It is dangerous to assume that omicron will be the last variant or that we’re in the endgame,” Tedros warned. “On the contrary, globally the conditions are ideal for more variants to emerge. To change the course of the pandemic, we must change the conditions that are driving it.”

He added that the world cannot “gamble on a virus whose evolution we cannot control or predict.”
Last week, another top WHO official warned that even though the spread of omicron cases was slowing in some countries, high infection rates around the world would likely lead to new variants by allowing the virus to mutate.

Covid emergency ‘can end this year’

However, Tedros was optimistic that with the right course of action, the pandemic could reach a turning point in 2022.
Recognizing that people were tired of the pandemic, and that many governments were “walking a tightrope” to try to balance infection control with what is acceptable to their populations, Tedros said there were “no easy answers.”
But he added: “If countries use all of [the WHO’s] strategies and tools in a comprehensive way, we can end the acute phase of the pandemic this year — we can end Covid-19 as a global health emergency, and we can do it this year,” he said.

‘Critical juncture’

Tedros’ address to the WHO’s executive board on Monday came after he held a press conference during a meeting with Svenja Schulze, Germany’s minister for economic cooperation and development.
During the conference, Tedros praised Germany — the biggest donor to the WHO — for approaching global public health with “solidarity and multilateralism.”
“These qualities are more important than ever, because the Covid-19 pandemic is now entering its third year and we are at a critical juncture,” Tedros told reporters.
“We have the tools to end the acute phase of this pandemic. But we must use them equitably and wisely.”
Noting Germany’s commitment to international cooperation and tackling the pandemic under its newly adopted G-7 presidency, Tedros praised the country’s efforts as “an example for all” but warned that “we still have a long road ahead.”
Globally, more than 71 million new cases of Covid were recorded over the past four weeks, according to data from Johns Hopkins University. While the U.S. and France recorded the highest number of cases during that period, with 18.3 million and 7.6 million respectively, Yemen and Vanuatu have suffered the highest case fatality rates in the world throughout the crisis, JHU data shows.

CNBC Health & Science

In Yemen, where a civil war is raging and less than 2% of the population has been vaccinated, almost one in five people who have contracted Covid-19 died, according to JHU. Meanwhile, in Vanuatu — where cases have remained low throughout the pandemic but just a third of the population is immunized against the virus — the case fatality rate is 14%.
But according to Tedros, vaccinations are not the only thing world leaders need to consider when looking at ways to help lower income countries protect their populations from the effects of the virus.
“Vaccines alone will not end the pandemic,” Tedros said. “Many countries need diagnostics, life-saving therapeutics — including oxygen and support for vaccine rollout.”

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It comes as China pushes ahead with its zero-Covid strategy — which means a recent spike in infections has resulted in lockdowns and curbs in the largest port hubs and major cities across the country.
Sea shipping spot rates crept up 4% on the Asia to U.S. West Coast route, ahead of the Lunar New Year holiday. However, air cargo rates spiked more.
Some shipping firms have suspended services earlier, straining the system further.

Streets in Tianjin, China, empty out on Jan. 10, 2022, as the city enters partial lockdown following a spike in omicron cases.
Geno Hou | Future Publishing | Getty Images

Covid lockdowns, quarantines and restrictions are causing a backlog in some of China’s major ports, resulting in “chaos” and pushing up air freights by as much as 50% in some cases, analysts tell CNBC.
Ahead of the extended Lunar New Year holiday in China, air freight rates have spiked and some shipping firms have suspended services, putting the spotlight on overwhelmed supply chains again.

It comes as China pushes ahead with its zero-Covid strategy — which means a recent spike in infections has resulted in lockdowns and curbs in the largest port hubs and major cities across the country.
“Although ports are still open, current restrictions – like mandatory quarantines and testing – continue to slow down transport and cause delays,” Atul Vashistha, founder and chairman of supply chain consultancy Supply Wisdom, told CNBC.
China’s key priority right now is to limit the spread of Covid cases ahead of next month’s Winter Olympics and the upcoming Lunar New Year, he added. However, the ensuing curbs at ports have also let to some “chaos.”
“Products are piling up while ships are banned entry. Between negative PCR-test requirements and last-minute re-routing, 2022 is starting off like 2021 ended – chaos,” Vashistha said referring to polymerase chain reaction Covid tests.
Cases have been reported in the key port cities of Shenzhen, Tianjin and Ningbo, as well as the industrial hub of Xi’an, sparking lockdowns and other curbs.

Infections have also been reported in other cities such as Dalian and Anyang.
The capital of Beijing reported its first locally transmitted omicron infection on Jan. 15. On Sunday, less than two weeks before the Winter Olympics, Beijing’s authorities introduced new restrictions to contain a recent outbreak after nine locally transmitted cases were found in Beijing a day earlier.
The Ningbo outbreak in December also sparked some curbs, and disrupted traffic at the world’s third busiest port, Ningbo-Zhoushan.
Operations have since largely resumed, but shipments were diverted to Shanghai — the busiest port in the world — causing congestion and delays there too, Judah Levine, head of research at freight booking platform Freightos Group, told CNBC.
Supply chain tech firm project44 said that the shift from Ningbo port to Shanghai “backfired on some shippers” as congestion at Shanghai increased. As a result, Shanghai recorded an 86% increase year-over-year in blank sailings, it said, referring to an industry term for when a carrier decides to skip a particular port or the entire voyage altogether.
In an email to CNBC last week, Levine from Freightos said all eyes were on China and the impact that strict outbreak containment measures might have on logistics. “Steps were taken to quash the spread of positive cases detected in multiple places including Beijing, Shenzhen, Tianjin, Dalian and several others,” he said on Jan. 19.

Rising air freight rates

Sea shipping spot rates crept up 4% on the Asia to U.S. West Coast route, Levine said, but they’re not likely to go up much further, amid a pause in manufacturing as the Lunar New Year holiday approaches and factories shut down for an extended period.
However, air cargo rates are still spiking, he added.

“With enough time to still move cargo by air, the pre-holiday rush, along with pandemic-restricted capacity is pushing air cargo rates up,” he said, adding that the Freightos Air Index showed the China to North Europe rate was at $9.59 per kg in mid January— up over 50% from below $6 per kg at the start of January.
The Lunar New Year is China’s largest holiday and hundreds of millions of people traditionally travel back to their home towns from the cities they work in.
Some major shipping firms, such as Ocean Network Express and Hapag-Lloyd, suspended services and operations even earlier than last year to celebrate the season, according to Vashistha. That’s straining already-fragile supply chains, he said.

This latest shock comes at a bad time for global supply chains. They were already stressed from the Christmas period combined with the omicron variant, but port issues in China take these complications to a new level.

John Ferguson
Economist Impact

Shipping costs have been falling over the past couple of months as the supply chain backlog eased, but the recent Covid surge and any potential port closures are going to cast a shadow over any progress that has been made, said Paul Gruenwald, chief economist at S&P Global Ratings.
“I would say that this is going to slow the improvement we’ve been seeing over the last couple of months,” he told CNBC’s “Squawk Box Asia” on Thursday.

Impact of China’s zero-Covid on Winter Olympics

China’s zero-tolerance for Covid will have a major impact on global supply chains, said John Ferguson, practice lead for globalization, trade and finance for think tank Economist Impact.
“This latest shock comes at a bad time for global supply chains. They were already stressed from the Christmas period combined with the omicron variant, but port issues in China take these complications to a new level,” Ferguson said.
“China’s zero-Covid strategy is key as further outbreaks will result in more closures or lockdowns in key areas,” he told CNBC. “Given that China has the Winter Olympics coming up, as well as important political events later in the year, it is unlikely that China will abandon its Covid strategy in 2022.” 

One bright spot is that many companies have already been preparing for stressed supply chains scenarios, and are now putting their plans in place, he said.
Still, it won’t be all plain sailing.
“While global companies have become more nimble in this crisis, we still should expect some delays from this latest round of supply chain stress,” he added.
Supply Wisdom’s Vashistha summed it up: “Combine the shutdowns with the rise in Covid-induced port backlogs, China’s zero tolerance policy, and along with reduced aviation capacity, and the problem becomes even more clear: Cargo continues to surge with no way to move it or places to go.”

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