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    U.S. auto sales next year expected to be best since 2019

    S&P Global, Edmunds and Cox Automotive expect new auto sales to increase year over year by 2.5% or less to achieve the industry’s best results since 2019.
    The increase is expected to be driven by a continuing “normalization” of vehicle inventories, incentives/discounts from automakers, and easing financing and loan rates.
    Electric vehicle sales in the U.S. are forecast to set another record in 2024, with total sales volume near 1.3 million, according to Cox. That would mark roughly 8% market share.

    A sale sign is seen at car dealer Serramonte Subaru in Colma, California.
    Stephen Lam | Reuters

    DETROIT — U.S. new vehicle sales are expected to rise next year to their highest level since 2019, led by lower interest rates and improving affordability, according to industry analysts.
    Cox Automotive expects new light-duty vehicle sales to hit 16.3 million in 2025, slightly higher than forecasts by S&P Global Mobility and Edmunds of roughly 16.2 million sales next year. Such sales would be up from expectations of 15.9 million to 16 million this year and mark the highest results since roughly 17 million in 2019.

    That would equate to a forecast sales gain in new cars and trucks of 2.5% or less. The increase is expected to be driven by a continuing “normalization” of vehicle inventories, incentives/discounts from automakers, and easing financing and loan rates.
    “Consumers are still feeling the pinch, but the market has become a slightly friendlier place for car shoppers than it was at the start of the year,” Jessica Caldwell, Edmunds’ head of insights, said in a Tuesday release.
    One of the largest growth markets is expected to be entry-level and less expensive vehicles. The industry has been dealing with years of elevated prices and lower inventories since the coronavirus pandemic.
    Edmunds reports the average transaction price for new vehicles was $47,465 in 2024, a 0.8% decrease compared with $47,851 in 2023, and a 27.2% increase compared with $37,310 in 2019.

    EVs

    Another expected growth area remains electrified vehicles, including hybrids, plug-in hybrid and all-electric models, according to analysts.

    All-electric vehicle sales in the U.S. are forecast to set another record in 2024, with total sales volume near 1.3 million, according to Cox. That would mark roughly 8% market share, up from 7.6% compared with last year but lower than expectations of 10% earlier this year.
    That’s despite a forecast year-over-year decline in U.S. EV leader Tesla’s sales for the first time since 2014.
    “The top three manufacturers are Tesla, Hyundai Motor Group and General Motors, with GM having the largest increase in market share year over year at 2.7% at the brand level. Even though Tesla’s market share has declined below 50%, the Model Y and Model 3 continue to hold the top two spots,” said Stephanie Valdez Streaty, Cox director of industry insights, on Tuesday. “Various other models are collectively taking away share from Tesla.”
    Cox expects roughly 25% of new vehicle sales to be electrified in 2025, including a more than 10% penetration for all-electric models.
    Valdez Streaty and others cautioned EV sales could be weaker if there’s an end to federal consumer credits for purchasing the vehicles of up to $7,500, which the Trump administration has vowed to kill. 

    ‘Radical disruption’?

    Analysts warned that regulatory uncertainty ahead of President-elect Donald Trump’s inauguration could impact new U.S. vehicle sales. Most notably, Trump’s tariff threats could affect vehicle production in Canada and Mexico.
    Cox Automotive’s chief economist, Jonathan Smoke, said tariffs on those countries, which Trump has said could be 25%, would be “a radical disruption” to the U.S. new vehicle market.

    U.S. President-elect Donald Trump delivers remarks at Mar-a-Lago in Palm Beach, Florida, U.S., December 16, 2024. 
    Brian Snyder | Reuters

    “We know that there are twists that could be coming with policy shifts, but some key assumptions that we’re making are that most of those shifts are likely to take time, and ahead of when they’re implemented, will actually likely drive demand to be pulled forward,” Smoke said Tuesday during a virtual briefing. “As it relates to tariffs, specifically, we are not making any assumptions that major new tariffs will be implemented.”
    The expected increase in U.S. new vehicle sales could actually be counterintuitive for some automakers’ earnings next year due to higher incentive rates and an expected decline in pricing, according to Wall Street analysts.
    “We continue to see signs that pricing is not sustainable,” Wells Fargo analyst Colin Langan said in an investor note Monday, citing rising inventories, increasing incentives, falling dealer profits per vehicle and other overall less pricing power for automakers.
    Pricing remains near-record highs but the growth has slowed, which is good for car buyers but bad for companies.

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    From trees to decorative chickens, holiday decor could boost retailers as shoppers pull back on gifts

    Retailers, including Walmart and Home Depot, are trying to capitalize on customers who are going big on seasonal decor, even as they watch the budget with other discretionary spending.
    Consumers said they planned to spend 9% more on nongift purchases than a year ago, with most of that jump coming from higher spending on holiday decorations, according to Deloitte’s annual holiday survey.
    Yet the National Tree Company said sales of artificial trees are slow, after the pandemic bump and due to inflation’s lingering impact.

    Arrows pointing outwards

    The Milam family turned its front lawn into a holiday-themed putt-putt course. Going all out on Christmas decorations has become a tradition for the Dallas family.
    Courtesy: Mike Milam

    For the holiday season, the front lawn of the Milam family’s house in Dallas has transformed into a mini golf winter wonderland.
    Visitors stop by from nearly sunrise to sunset to admire the Christmas decorations — and to borrow a club to play a round of putt-putt themed around Santa, candy canes, snowflakes and more.

    “You can see not just the excitement and wonderment of kids, but also of adults,” said Mike Milam, a firefighter and father of two.
    Decking out the front yard has become an annual tradition for the Milam family since the Covid pandemic. The family of four’s elaborate decorations capture a trend that many retailers, including Home Depot and Walmart, have sought to capitalize on in recent years: Some customers are going bigger on seasonal decor, even as they watch how much they spend on other discretionary items.
    Consumers are prioritizing decorations and experiences over gifts this holiday season, according to an annual holiday spending survey by consulting firm Deloitte. The survey found that respondents expected to spend a little less on gifts this year – down about 3% year over year. But they planned to spend about 9% more on nongift purchases, with most of that jump coming from holiday decorations.

    The Milam family turned its front lawn into a holiday-themed putt-putt course. Going all out on Christmas decorations has become a tradition for the Dallas family.
    Courtesy: Mike Milam

    Survey respondents said they planned to spend $181 on home-related items, furnishings and holiday decorations, up 22% year over year and nearly 60% more than the pre-pandemic 2019 holiday season.
    Holiday decor is providing a boost for retailers, even those like Target, Dollar General and Dollar Tree, which have noticed a pullback in other categories.

    Target’s Chief Commercial Officer Rick Gomez said on an earnings call in late November that customers are “looking for ways to add a little bit of seasonal decor,” which drove higher sales of accessories including frames, candles and vases in the most recent quarter.
    Dollar General CEO Todd Vasos said on the company’s earnings call in early December that the retailer was pleased by customers’ response to “the discretionary side of Halloween.” He said shoppers’ reactions to that seasonal decor offered “some glimmers of hope” as the dollar store chain headed into the peak of the holiday season.

    Christmas decorations are for sale at a Home Depot store on November 14, 2023, in Miami, Florida. 
    Joe Raedle | Getty Images

    Decor may not save the holidays

    Yet holiday decor sales may not look as as jolly as some companies wish.
    For example, National Tree Company CEO Chris Butler said sales have been slower in the past two years. He said the New Jersey-based company, which sells online through retailers including Kohl’s, Amazon, Macy’s and Home Depot, expects sales to be flat year over year.
    Nearly 70% of the company’s sales typically come from artificial Christmas trees, but it also sells decor like wreaths and garlands, Butler said.
    Sales surged in 2020 and 2021 during the pandemic, when consumers had extra stimulus money to spend and more time at home, Butler said. Since then, 2022 and 2023 “have been down years because we’re getting over that the big boom,” he added.
    Based on the company’s research, consumers typically get a new artificial tree every five to six years. Pandemic purchasing patterns, and the pressure inflation put on families, stretched that replacement period out longer, he said.
    “If you can try and make that tree last one more year, consumers are probably going to do that rather than buy new trees,” Butler said.
    Home Depot, a longtime seller of both real and artificial Christmas trees, has leaned more into seasonal decor — especially after its 12-foot skeleton, Skelly, became a viral sensation during the pandemic. It’s selling an eight-foot Santa and an eight-and-a-half-foot reindeer this year, along with a wide range of other decor like animatronic Disney characters.
    Yet the home improvement retailer struck a balance to attract customers looking to spend less for holiday cheer after the run of high inflation, said Lance Allen, senior merchant of decorative holiday for the home improvement retailer. He said it bought more low-priced artificial Christmas trees, such as a prelit tree that sells for $49, this holiday season compared to past ones.
    He added its “porch greeters” — plastic figurines like a little snowman or a golden doodle in a Santa hat — are also a more wallet-friendly pick at under $40.

    At Walmart, red bows, giant nutcrackers and artificial icicles have been popular so far this holiday season, according to Sheila Wiles, lead merchant for holiday décor at Walmart U.S
    Melissa Repko | CNBC

    Target’s leaders have stressed value, too, as they try to win over consumers who are more discerning in spending on wants rather than needs. The big-box retailer is also tapping into trends, such as pink Christmas decor, mini figurines for mantel landscapes, oversized bows for entryways and walls and nostalgic ceramic ornaments, spokesperson Brian Harper-Tibaldo said.
    And to drive sales, Walmart has chased social media-fueled trends while trying to offer value. It debuted a six-foot tall white nutcracker after it noticed that customers were buying its painted large nutcrackers and redecorating them.
    The nutcrackers sold out when they first went on sale last year, said Sheila Wiles, lead merchant for holiday decor at Walmart U.S. Walmart doubled its inventory of them this year, but they still were nearly sold out before Halloween, she said.
    She said low-priced decor has also been a hit, with customers making their own garlands out of $1.98 red velvet bows and decorating their Christmas trees with 98 cent artificial icicles instead of ornaments.
    Home Depot, Target and Walmart declined to share sales figures for holiday decor this season, or say if the category is performing better than last year.

    The Milam family has decked out the front yard with themes including Nintendo’s Super Mario.
    Courtesy: Mike Milam

    Maximizing decor

    Though the Milam family created a holiday spectacle, it also wanted to find value along the way.
    Instead of buying a lot of decor, the Milam family made most of it. The family spent about $1,000 on its front yard decorations to make the mini golf course, Mike Milam said. Most supplies came from Home Depot, where he bought lumber, paint and other tools. The family of four — Mike; his wife Katie; 12-year-old daughter Merrick; and 10-year-old son Nash — built the putt-putt holes together on nights and weekends starting in the fall.
    This year, the family also bought an eight-foot real Christmas tree from Home Depot for $129 and a festive, plastic Christmas chicken for $20 on Amazon.
    But most of the Milams’ decor is recycled from past years, Mike Milam said. In his neighborhood, he said most families have put up the same decorations and inflatables in the yard as last year.
    Mike Milam said he was “more conscientious” about spending this year. Food and electricity cost more than they used to. Plus, as his kids get older, they have more sports activities that come with a price tag.
    “Everything is a little more expensive,” he said.
    Despite the expense of decorating, he plans to continue decking out his property — and has plenty of other ideas in mind for the front yard. So far, the family has filled out out the front yard with themes including Nintendo’s Super Mario and a Christmas spin on Steven Spielberg’s classic movie “E.T. the Extra-Terrestrial.”
    As he’s spent more money and time on holiday decorations, he’s cut back on spending on gifts for his kids.
    “I’d rather have experiences than stuff,” he said.
    Through the projects, he said his children have become handier by learning how to paint, lay AstroTurf and use an electric saw. It’s become a way for the whole family to get creative and bond.
    “We have probably 12 to 15 years worth of ideas,” he said. “I’ll do it as long as I work and my kids are around and want to be part of it.” More

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    Merck to develop weight loss pill from Chinese drugmaker in up to $2 billion licensing deal

    Merck on Wednesday said it has snagged the rights to an experimental weight loss pill from Chinese drugmaker Hansoh Pharma, in a deal worth up to $2 billion.
    Merck will pay Hansoh $112 million upfront for rights to the drug, with the potential for an additional $1.9 billion in milestone payments and royalties on sales, according to a news release.
    Several other drugmakers, including Pfizer and Roche, are racing to develop more convenient obesity pills that can compete with blockbuster injections from Novo Nordisk and Eli Lilly.

    Exterior view of the entrance to Merck headquarters on February 05, 2024 in Rahway, New Jersey.
    Spencer Platt | Getty Images

    Merck on Wednesday said it has snagged the rights to an experimental weight loss pill from Chinese drugmaker Hansoh Pharma, in a deal worth up to $2 billion.
    The oral drug has not yet entered human trials, and Merck did not specify which diseases it plans to test the drug on first. Still, it boosts the pharmaceutical company’s chances of winning a slice of the booming obesity drug market, which some analysts expect to be worth more than $100 billion a year by the early 2030s.

    Several other drugmakers, including Pfizer and Roche, are racing to develop more convenient obesity pills that can compete with blockbuster injections from Novo Nordisk and Eli Lilly.
    Under the terms of the deal, Merck will gain the exclusive global license to develop, manufacture and commercialize Hansoh Pharma’s HS-10535, an experimental oral drug that targets a gut hormone called GLP-1. Novo Nordisk’s popular weight loss drug Wegovy and diabetes treatment Ozempic similarly target GLP-1 to tamp down appetite and regulate blood sugar.
    Merck will pay Hansoh $112 million upfront for rights to the drug, with the potential for an additional $1.9 billion in milestone payments and royalties on sales, according to a news release.
    Merck said a pre-tax charge of $112 million, or 4 cents per share, will be included in its fourth-quarter results.
    In the release, Dean Li, president of Merck Research Laboratories, said the oral drug has “potential to provide additional cardiometabolic benefits beyond weight reduction.”

    Merck CEO Rob Davis early last year said the company was seeking GLP-1 treatments with benefits beyond weight loss.
    “I think everyone recognizes weight management is a hard thing to get reimbursed. But if you can show cardiovascular outcome, if you can show diabetes outcome, which you’re starting to see data for, if you can see fatty liver disease benefits…that is an area where we think there’s opportunity,” he said at a conference at the time.
    It is the latest transaction involving experimental GLP-1 drugs from China. AstraZeneca last year licensed Chinese company Eccogene’s experimental oral drug, which has since moved into mid-stage development. More

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    UniCredit raises stake in Commerzbank to 28% as Orcel ups ante on pursuit

    Italy’s UniCredit said on Wednesday it has raised its potential stake in Commerzbank to 28% using further derivatives.
    Investors are watching whether UniCredit will take the leap with a buyout of the German lender or pursue its simultaneous bid for Italy’s Banco BPM.
    The German government has so far opposed UniCredit’s courtship of Commerzbank.

    The Commerzbank AG headquarters, in the financial district of Frankfurt, Germany, on Thursday, Sept. 12, 2024.
    Emanuele Cremaschi | Getty Images News | Getty Images

    Italy’s UniCredit said on Wednesday it has raised its potential stake in Commerzbank to 28% using further derivatives, as markets watch whether it will take the leap with a buyout of the German lender.
    This marks an increase from a 21% holding previously.

    Italy’s second-largest bank said its ownership now consists of a 9.5% direct stake and around 18.5% through derivative instruments.
    UniCredit has applied to the European Central Bank for permission to acquire a stake of up to 29.9% in the German bank, as CEO Andrea Orcel simultaneously pursues a bid for Italian peer Banco BPM.
    “This move reinforces UniCredit’s view that substantial value exists within Commerzbank that needs to be crystalized,” UniCredit said in a press release Wednesday. “It reflects the belief in Germany, its businesses and its communities, and the importance of a strong banking sector in powering Germany’s economic development.”
    The lender stressed its position remains “solely an investment” at this time and does not impact its 10-billion-euro ($10.49 billion) offer on Banco BPM. Analysts hold that Orcel could still sweeten his bid and introduce a cash component to pursue domestic consolidation. In a statement accompanying its Banco BPM offer in November, UniCredit noted that such a merger would serve it to “consolidate its competitive position and expand its presence in Italy,” where it is second to Intesa Sanpaolo.
    UniCredit has yet to warm its German takeover target or the Berlin administration to a potential deal. Commerzbank on Wednesday said it has “taken note of the announcement” but declined to comment beyond pointing to its strategy, which is currently being upgraded and will be disclosed on Feb. 13.

    The German government has so far opposed Orcel’s courtship of Commerzbank, but faces its own turbulence after the collapse of the ruling coalition and Chancellor Olaf Scholz’s loss of a no-confidence vote earlier this week cleared the path for elections in February. The German administration retains a 12% holding in Commerzbank, after offloading a 4.5% stake in September in an effort to exit its position in the lender it bailed out during the 2008 financial crisis.
    A merger with Commerzbank in Germany, where UniCredit operates through its HypoVereinsbank division, could create synergies in capital markets, advisors, payments and trade finance activity, analysts have previously signaled.
    UniCredit shares were up 1.1% at 9:44 a.m. London time, with Commerzbank stock rising 3.1%.
    — CNBC’s Greg Kennedy contributed to this report. More

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    Japan’s Honda and Nissan to reportedly begin merger talks

    Nissan and Honda plan to enter into negotiations for a merger to better compete in the rapidly changing automotive industry, the Nikkei newspaper reported Tuesday.
    Honda and Nissan are considering operating under a holding company, and soon will sign a memorandum of understanding, according to the report.

    Makoto Uchida, president and CEO of Nissan Motor, and Toshihiro Mibe, Honda Motor president and CEO, attend their joint press conference in Tokyo, Japan March 15, 2024. 
    Kyodo | Via Reuters

    DETROIT — Japanese automakers Nissan Motor and Honda Motor reportedly plan to enter into negotiations for a merger to better compete in the rapidly changing global automotive industry, the Nikkei newspaper reported Tuesday.
    Honda and Nissan are considering operating under a holding company, and soon will sign a memorandum of understanding, according to the report. They also look to eventually bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company.

    The combined Nissan-Honda-Mitsubishi enterprise would equate to more than 8 million vehicle sales annually, according to Nikkei. That would place the company among the world’s largest automakers, but still below fellow Japanese automaker Toyota Motor, at 11.2 million in 2023, as well as German automaker Volkswagen, which last year reported sales of 9.2 million vehicles.
    In similar statements, Honda and Nissan neither confirmed nor denied the report: “The reported content was not released by our company,” Honda said. “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths. We will inform our stakeholders of any updates at an appropriate time.”
    The merger report follows the two Japanese automakers entering into a strategic partnership earlier this year on shared automotive components and software.
    Such a tie-up would be the largest automotive industry merger since Fiat Chrysler joined with France-based PSA Groupe to form Stellantis in January 2021.
    Automotive consultants and other experts have recently been calling for an increase in mergers and acquisitions to share costs and better compete against rapidly expanding Chinese automakers as well as U.S. all-electric vehicle leader Tesla.
    U.S.-traded shares of Honda closed up about 1% on Tuesday. Over-the-counter shares of Nissan, which is in the middle of a restructuring, jumped more than 11%.

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    Why the Dow is in such a historic funk and how concerned you should be

    The biggest laggard in the Dow Jones Industrial Average has been UnitedHealth, which has contributed to more than half of the decline over the past eight sessions.
    There’s a rotation going on with investors selling out of the cyclical names in the 30-stock Dow that initially popped on Trump’s election in November.
    There are many reasons to believe the Dow’s historic losing streak is not a source for major concern.

    Traders work on the floor at the New York Stock Exchange on Dec. 10, 2024.
    Brendan McDermid | Reuters

    The Dow Jones Industrial Average has been declining for nine straight days, posting its longest losing streak since February 1978. What is going on and how concerned should investors be?
    First off, let’s explain which stocks are driving the losses.

    The biggest laggard in the 30-stock Dow during this losing streak has been UnitedHealth, which has contributed to more than half of the decline in the price-weighted average over the past eight sessions. The insurer has plunged 20% this month alone amid a broad sell-off in pharmacy benefit managers after President-elect Donald Trump’s vow to “knock out” drug industry middlemen. UnitedHealth is also going through a tumultuous period with the fatal shooting of Brian Thompson, the CEO of its insurance unit.

    And then there’s a rotation going on with investors selling out of the cyclical names in the Dow that initially popped on Trump’s election in November. Sherwin-Williams, Caterpillar and Goldman Sachs, all stocks that typically gain when the economy is revving up, are each down at least 5% in December, dragging down the Dow significantly. These names all had a big November as they were seen as beneficiaries of Trump’s deregulatory and pro-economy policies.
    The Dow, largely comprised of blue-chip consumer discretionary and industrial names, is widely viewed as a proxy for overall economic conditions. The extended sell-off did coincide with renewed concerns about a weaker economy in light of a small jump in jobless claims data released last week. However, investors still remain quite optimistic about the economy for 2025 and see nothing on the horizon like the stagflationary period of the late 1970s.
    Most investors are shrugging it off
    There are many reasons to believe the Dow’s historic losing streak is not a source for major concern and just a quirk of the price-weighted metric that’s more than a century old.
    First and foremost, the Dow anomaly comes at a time when the broader market is still thriving. The S&P 500 hit a new high on Dec. 6 and sits less than 1% from that level. The tech-heavy Nasdaq Composite just reached a record on Monday.

    Meanwhile, while the length of Dow’s sell-off is alarming, the magnitude is not the case. As of Tuesday midday, the average is only down about 1,582 points, or 3.5% from the closing level on Dec. 4, when it first closed above the 45,000 threshold. Technically, a sell-off of 10% or greater would qualify as a “correction” and we are far from that.
    The Dow was first created in the 1890s to model a regular investor’s portfolio — a simple average of the prices of all constituents. But it could be an outdated method nowadays given its lack of diversification and concentration in just 30 stocks.

    “The DJIA hasn’t reflected its original intent in decades. It is not really a reflection of industrial America,” said Mitchell Goldberg, president of ClientFirst Strategies. “Its losing streak is more of a reflection of how investors are gorging themselves on tech stocks.”
    The Dow price-weighted nature means that it’s not capturing the massive gains from megacap stocks as well as the S&P 500 or the Nasdaq. Although Amazon, Microsoft and Apple are in the index and are all up at least by 9% this month, it’s not enough to pull the Dow out of the funk.
    Many traders believe the retreat is temporary and this week’s Federal Reserve decision could be a catalyst for a rebound especially given the oversold conditions.
    “This pullback will be the pause that refreshes before a reversal higher to close 2024,” said Larry Tentarelli, founder and chief technical strategist of the Blue Chip Daily Trend Report. “We expect buyers to come in this week. … Index internals are showing oversold readings.”
    — CNBC’s Michelle Fox, Fred Imbert and Alex Harring contributed reporting.

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    After taking morning profits, we’re afternoon buyers of 2 stocks in an oversold market

    We’re buying 25 shares of Home Depot at roughly $407 each and 15 shares of Blackrock at roughly $1,041. Following Tuesday’s trades, Jim Cramer’s Charitable Trust will own 200 shares of HD, increasing its weighting to 2.25% from about 2%. The Trust portfolio, used by the CNBC Investing Club, will own 75 shares of BLK after the trade, increasing its weighting to about 2.15% from about 1.75%. This is our second trade alert of the day. We raised cash Tuesday morning by trimming our position in Broadcom to lock in triple-digit percentage gains into the stock’s recent parabolic move; and also by selling Advanced Micro Devices shares on fundamental concerns. Those were sales made out of discipline. But there is another discipline we must honor: the S & P 500 Short Range Oscillator . This technical tool showed that the market became a little more oversold after Monday’s session. When the market is oversold, according to the Oscillator, we view broader market weakness as an opportunity to buy stock of quality companies. That’s why we are putting cash to work. HD YTD mountain Home Depot YTD One quality stock we’re buying into its recent weakness is Home Depot. Shares of the home improvement retailer have pulled back about 6% from its recent high and have dipped slightly since the company reported a better-than-expected third quarter . We were very encouraged by Home Depot’s earnings report, which showed the smallest decline in comparable sales in nearly two years. This was a good sign that business is bottoming and will inflect positively next year. BLK YTD mountain BlackRock YTD We’re also adding to our position in the world’s largest asset manager, BlackRock. Our most recent buy was last Monday shortly after the firm announced its $12 billion acquisition of HPS Investment Partners. This was a great deal for BlackRock because it will make it a leader in private credit, which is one of the fastest-growing areas of finance. Once the acquisition is completed, BlackRock will become a top-five credit manager with about $220 billion in pro-forma private credit client assets. Not only does the deal add to BlackRock’s growing fee base, we would argue that the stock should command a higher price-to-earnings multiple in the market as a result. The company’s recent buying spree into faster-growing opportunities like HPS and the recently closed Global Infrastructure Partners deal should cause the stock’s multiple to re-rate from a traditional money manager to that of an alternative manager, which generally gets a higher valuation in the market. (Jim Cramer’s Charitable Trust is long BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

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    Grubhub to pay $25 million in FTC settlement over harmful practices against diners, workers

    Grubhub will pay $25 million to settle a lawsuit over alleged unlawful practices that harmed diners, workers and small businesses, the FTC announced on Tuesday.
    The complaint claims that Grubhub deceived diners about delivery costs and blocked access to their accounts.
    Rising prices among third-party food delivery services has continued to frustrate Americans looking to reduce extra fees.

    An app-based delivery worker waits outside of a restaurant in New York City on July 7, 2023.
    Spencer Platt | Getty Images

    Grubhub will pay $25 million to settle a lawsuit from the Federal Trade Commission and Illinois Attorney General Kwame Raoul over alleged unlawful practices that harmed diners, workers and small businesses, the FTC announced on Tuesday.
    The complaint claims that Grubhub deceived diners about delivery costs and blocked access to their accounts. The company also deceived workers about how much money they would make delivering food and listed restaurants on its platform without their permission.

    “Our investigation found that Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhub — all in order to drive scale and accelerate growth,” FTC Chair Lina Khan said in a press release.
    Grubhub has had as many as 325,000 unaffiliated restaurants on its platform, more than half of all of the available restaurants on Grubhub, according to the complaint. The company allegedly listed unaffiliated restaurants to drive growth, but diners often had to pay more in delivery fees from those restaurants which, in turn, damaged their reputations.
    The complaint further alleged that Grubhub would often avoid removing unaffiliated restaurants off the platform when requested, instead trying to sell them paid partnerships.
    As part of the settlement, the food delivery company will stop adding surprise fees that are often labeled as “service fees” or “small order fees,” stop listing unaffiliated restaurants on the platform, be more transparent about driver earnings, notify customers if their account has been blocked and provide more simple methods to cancel memberships.
    Rising prices among third-party food delivery services have continued to frustrate Americans looking to reduce extra fees. Between 2022 and 2024, consumers reported higher yearly increases in their total checks on third-party apps compared to orders made directly through restaurant sites, according to Technomic.

    The FTC complaint alleged that Grubhub would add on junk fees to delivery costs, often labeled as “service fees” or “small order fees,” despite having advertised that diners would pay a single, low-cost amount for Grubhub’s services tied to deliveries.
    “At Grubhub, we’re committed to transparency so that every single day diners, restaurants and drivers can make well-informed choices to do business with us,” a Grubhub spokesperson wrote in a statement to CNBC. “While we categorically deny the allegations made by the FTC, many of which are wrong, misleading or no longer applicable to our business, we believe settling this matter is in the best interest of Grubhub and allows us to move forward.”
    The settlement includes a monetary judgment of $140 million, but is partially suspended as Grubhub is unable to pay the full amount, according to the press release. The company will instead pay $25 million, nearly all of which will be used to refund consumers harmed by the company’s conduct. If Grubhub is found to have misrepresented its financial status, the full judgment would become immediately due, according to the press release.
    “We believe the FTC agreed to suspend a portion of the judgment because we negotiated with them in good faith and provided extensive details about our business and financial performance,” the Grubhub spokesperson said. “Monetary judgments are not intended to cause irreparable harm or undue hardship for companies.”

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