Raphael Stevens

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    in Business

    Here's why many people are shopping for cars online

    Car buying has long been a process many Americans hate. Increasingly, dealers and companies are trying to find ways to leverage the appeal of online shopping to make it less painful.
    Historically, buyers who wanted a car had to take a trip to the local dealership, where they might select a vehicle off the lot. The buying process has a reputation for taking hours and being stressful. One of the biggest pain points is the process of negotiating, which many buyers feel underprepared for.

    As online shopping continues to grow, businesses are experimenting with alternatives to this process.
    Traditional automotive dealers are building out their own web presences, offering at-home pickup and delivery services to spare customers the trip to the dealership. Many will allow customers to do paperwork over the internet at their own convenience — in order to address another pain point.
    There are also exclusively online auto sellers, such as Carvana and Vroom. These businesses keep very large inventories. Vroom, for example, offers about 14,000 cars. The company also provides 24-hour shopping experiences, allows buyers to do everything online, and it sell cars with a straightforward sticker price.
    Substantial portions of car buyers still want to be able to see, touch and drive the cars they are about to purchase. But shoppers are becoming more comfortable with buying things online. Decades ago, it was thought consumers would be reluctant to buy clothing or furniture online, and that has changed as well. Many who follow automotive retail think it is only a matter of time before buying online becomes commonplace as well.

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    White House rolls out plan to 'quickly' immunize kids age 5 to 11 against Covid

    Thomas Lo (15) receives a dose of the Pfizer-BioNTech vaccine for the coronavirus disease (COVID-19) at Northwell Health’s Cohen Children’s Medical Center in New Hyde Park, New York, May 13, 2021.
    Shannon Stapleton | Reuters

    The White House on Wednesday outlined its plan to distribute doses of Pfizer and BioNTech’s Covid-19 vaccines to kids ages 5 to 11 as soon as it’s authorized by U.S. drug regulators. 
    The Biden administration said it’s procured enough vaccine to inoculate all 28 million 5- to 11-year-olds in the U.S., and will distribute it in smaller dosing and with smaller needles necessary to immunize kids.

    A key Food and Drug Administration vaccine advisory group is scheduled to meet on Oct. 26 to discuss Pfizer’s data, followed by a Centers for Disease Control and Prevention meeting on Nov. 2. The shots could be approved shortly after that meeting, depending on how quickly the FDA and the CDC move.
    “We know millions of parents who’ve been waiting for Covid-19 vaccine for kids in this age group and should be FDA and CDC authorized the vaccine, we will be ready to get shots in arms,” White House coronavirus response coordinator Jeff Zients told reporters during a press briefing.
    Parents say they are anxious to get their children vaccinated as kids have started the new school year with the delta variant still spreading across America. Over the past week, there were about 131,000 new child Covid cases, with more than 1.1 million child cases added over the past six weeks, according to the American Academy of Pediatrics.
    Pfizer has asked the federal regulators to authorize a two-dose regimen of 10 micrograms — a third of the dosage used for teens and adults.
    The packaging for Pfizer’s vaccine will be changed to accommodate the formula and dose created specifically for 5- to 11-year-olds, administration officials said Wednesday. Pfizer will provide 10-dose vaccine vials in cartons of 10 vials each, giving doctors’ offices and community health groups 100 total doses per package.

    Health providers can store the vaccines for 10 weeks under normal refrigeration, or for 6 months in ultracold temperatures, officials said, adding that the vaccines will also contain smaller needles for children.
    “Kids have different needs than adults, and our operational planning is geared to meet those specific needs, including by offering vaccinations and settings that parents and kids are familiar with,” Zients said.
    Many kids will also be able to get vaccinated at school, officials said. The administration will issue full funding through FEMA for states to launch vaccination sites, purchase medical supplies and provide transportation to community vaccination sites.
    Select schools will also be matched with vaccine providers that will set up immunization clinics for their students, officials said. The White House is also allocating vaccines for hundreds of local health centers and rural clinics to serve the more than 3 million children that receive health care from community medical providers.
    Earlier this month, the White House asked governors to enroll pediatricians and other providers in vaccination programs so they can begin administering shots as soon as the doses are authorized by U.S. regulators for use in young kids.
    More than 25,000 pediatricians’ offices and tens of thousands of pharmacies nationwide will provide vaccines for the rollout to younger age groups. Biden administration officials also said the White House was working with the Children’s Hospital Association to create vaccination sites at over 100 pediatric hospital systems by November.
    The White House said the Department of Health and Human Services will conduct a public education campaign to reach parents and other caregivers with “accurate and culturally-responsive information” about the vaccine and the risks that Covid poses to children.

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    Paul Tudor Jones says inflation could be worse than feared, biggest threat to markets and society

    Paul Tudor Jones
    Michael Nagle | Bloomberg | Getty Images

    Billionaire hedge fund manager Paul Tudor Jones believes that inflation is here to stay, posing a major threat to the U.S. markets and economy.
    “I think to me the number one issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory,” Jones said on CNBC’s “Squawk Box” Wednesday. “It’s probably the single biggest threat to certainly financial markets and I think to society just in general.”

    Jones said the trillions of dollars in fiscal and monetary stimulus is the culprit for inflation to run hotter for longer. To rescue the economy from the Covid-19 pandemic, the Federal Reserve has been buying more than $3 trillion in its open-ended quantitative easing program, while the U.S. government has unleashed over $5 trillion in fiscal stimulus.
    “Inflation can be much worse than what we fear. We have the demand side of the equation … and that is $3.5 trillion greater than what it normally would have … just sitting in liquid deposits,” Jone said. “They can go into stocks, or crypto, or real state, or be consumed, so that’s a huge amount of dry powder just sitting waiting to be utilized at some point, which is why inflation is not going away.”
    The longtime trader said price pressures will continue to rise in the coming months. Inflation ran at a fresh 30-year high in August amid supply chain disruptions and extraordinarily strong demand.
    The core personal consumption expenditures price index, which is the Fed’s preferred measure of inflation, increased 0.3% for the month and was up 3.6% from a year ago.
    “It’s absolutely dead for a 60/40 portfolio, for a long stock, long bond portfolio. So the real question is how you defend yourselves against it,” Jones said.

    The founder and chief investment officer of Tudor Investment Corporation said it’s time to double down on inflation hedges including commodities and Treasury Inflation-Protected Securities, and that investors should avoid fixed income in this inflationary and low-rate environment.
    “You don’t want to own fixed income. You don’t want to hold that whatsoever. What they are telling you by their actions is that they will be slow in fighting inflation,” Jones said.
    Still, the legendary investor didn’t sound too dire about stocks, saying that they could be a decent bet amid persistent inflation. Jones said if the Fed moves to address inflation, it could compress equity multiples.
    “Equities are interesting. Certainly in an inflationary world, they are a much better bet than fixed income,” Jones said.
    The S&P 500 is up about 20% in 2021, sitting less than 1% from its all-time high reached early September.
    Jones shot to fame after he predicted and profited from the 1987 stock-market crash. He is also the chairman of non-profit JUST Capital, which ranks public U.S. companies based on social and environmental metrics.

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    Chili's parent stock tumbles 11% after labor challenges and higher food costs hit earnings

    Brinker International’s stock tumbled nearly 11% after labor challenges and higher food costs hit the company’s latest earnings.
    Excluding items, Brinker said it earned 34 cents per share, about half of the 69 cents per share analysts surveyed by Refinitiv estimated.
    Domino’s Pizza reported similar troubles stemming from the challenging labor environment, setting up a theme that will likely appear in other restaurants’ earnings reports.

    Hiring sign at Chili’s bar and grill with plenty of incentives.
    UCG | Universal Images Group | Getty Images

    Shares of Chili’s parent Brinker International fell about 11% in premarket trading Wednesday after the restaurant company released preliminary earnings ahead of its investor day that showed higher labor and food costs ate into its profit margins.
    “Brinker’s first quarter delivered positive sales and continued to significantly outpace the industry in traffic,” Brinker CEO Wyman Roberts said in a statement. “But the COVID surge starting in August exacerbated the industry-wide labor and commodity challenges and impacted our margins and bottom line more than we anticipated.”

    Brinker said it earned 34 cents per share, excluding items. That’s about half of the average analyst estimates of 69 cents per share from a Refinitiv survey.
    The company’s revenue and traffic came in as analysts were forecasting, but weren’t strong enough to offset the higher costs. Brinker reported net sales of $876.4 million, in line with Wall Street’s estimates. Same-store sales for Chili’s and Maggiano’s Little Italy also met analysts’ expectations, although they dipped in August before recovering in September.
    Other restaurant companies that are also dealing with industry-wide labor issues haven’t been so lucky. Domino’s Pizza’s quarterly U.S. same-store sales growth turned negative for the first time in more than a decade in its latest quarter. CEO Ritch Allison blamed the labor environment, saying that the shortage of workers put pressure on the number of orders restaurants could receive. Some locations even shortened hours. 
    It’s likely a theme that will pop up again in other restaurants’ earnings reports, and it weighed on a few of the stocks of Brinker’s rivals Wednesday. Shares of Darden Restaurants fell 2%, while Cheesecake Factory’s stock dropped by 3%.
    Brinker said it is raising prices to fight the higher labor and commodity costs, with a target of 3% to 3.5% for its fiscal year, above its prior range of 2% to 2.5%. According to Raymond James analyst Brian Vaccaro, this action follows several years, before the pandemic, of having lower menu prices than the competition. While hiking prices helps Brinker protect its margins, it also runs the risk that customers will trade down to cheaper restaurants or opt to eat at home instead.
    Brinker’s stock has fallen 22% this year, dragging its market value down to $2.02 billion. The company is expected to report its full fiscal first-quarter results Nov. 3.

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    Record out-of-stocks, shipping delays expected this holiday season. Here's who shoppers blame

    Out-of-stock messages online are expected to be up 172% this holiday season compared with 2020 levels, and up 360% on a two-year basis, according to new data from Adobe Analytics.
    The apparel category is forecast to have the highest out-of-stock levels, Adobe said, followed by sporting goods, baby products and electronics.
    A separate survey by consulting firm Deloitte found people are most likely going to cast blame on delivery providers, such as UPS or FedEx, for delays.

    Two workers load boxes into an Amazon truck

    The looming holiday season will likely exacerbate a global supply chain calamity that’s already underway, as shoppers rush into stores and onto websites to secure presents for loved ones.
    Experts warn shoppers can expect to find record out-of-stocks as they scan retail websites and may face prolonged shipping delays. Fortunately for retailers, customers are more likely to cast blame for late packages on delivery carriers, one survey found.

    Out-of-stock messages on the internet are expected to be up 172% this holiday season compared with 2020 levels, and up 360% on a two-year basis, according to new data from Adobe Analytics. The apparel category is forecast to have the highest out-of-stock levels, Adobe said, followed by sporting goods, baby products and electronics.
    “We’ve never seen levels like this before,” said Vivek Pandya, lead analyst at Adobe Digital Insights. “This is very much not the norm.”
    To compile its holiday expectations, Adobe tracks more than 1 trillion visits to retailers’ websites in the United States and monitors over 100 million items sold online.
    A separate survey by consulting firm Deloitte found about a third of consumers would point the finger at couriers and delivery companies, such as UPS or FedEx, for shipping delays and other supply chain issues. Twenty-seven percent of people told Deloitte they would fault external factors, such as weather. Only 21% say they blame retailers.

    Deloitte polled 4,315 consumers from Sept. 7 to Sept. 14 about their shopping plans and expectations for the season.

    In reality, the slowdowns stem from a number of factors. There are container shortages, floods, Covid-19 outbreaks that backlogged ports, and a dearth of truck drivers and warehouse workers, to name a few. It’s all putting retailers in a crunch to get enough goods to keep shelves fully stocked.
    “The problem goes beyond just the couriers,” said Rod Sides, vice chair of Deloitte’s U.S. retail and distribution practice. “There’s a ripple effect back into the country of origin.”
    “There have been a number of countries that have shut down manufacturing capabilities,” Sides said. “We’re just finding some of that manufacturing capacity coming back online. And it takes time to work its way out.”
    Still, delivery providers’ service levels have been taking a hit. On-time performance was 85.1% for FedEx in September, according to ShipMatrix, a software provider that analyzes shipping data, compared with 95.2% at UPS, and 95.5% at the U.S. Postal Service. Those levels were all down from August, ShipMatrix said.
    Representatives from the Postal Service, UPS and FedEx weren’t immediately available to comment.
    Last Wednesday, President Joe Biden launched an effort to ease supply chain blockages and avoid stock-outs ahead of the holiday season. As part of that plan, major delivery providers and retailers including FedEx, UPS, Walmart and Home Depot are going to be working nonpeak hours at West Coast ports.
    “There are a bunch of different players who have to have seats at the table to be able to make that happen,” Sides said about Biden’s efforts. “Working around the clock is perfectly fine. The challenge is going to be that [labor] costs are going to continue to go up.”
    Shoppers are getting the messaging to plan ahead. Thirty-nine percent of people polled by Deloitte said they intend to start shopping early to give enough lead time for orders and to avoid finding items are unavailable. Consumers are most concerned about not being able to purchase electronics, toys and home items on their holiday wish lists, Deloitte found.
    And despite the supply struggles, consumer demand is expected to be strong into the new year. Online sales are still surging, even as more people return to malls to shop.
    Adobe expects U.S. digital sales from Nov. 1 to Dec. 31 to hit at least $207 billion, which would represent a 10% increase from 2020. Digital sales could climb as much as 15% year over year, according to Adobe, in certain scenarios and dependent on how things progress with the Covid-19 pandemic.

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    Goldman Sachs enlists American Express to take on cash management titans like Citigroup

    The investment bank is leaning on the biggest global issuer of business charge cards in its quest to displace competitors that handle trillions of dollars in deposits and payments for corporations.
    The move could help Goldman accelerate growth in its nascent business because users of corporate AmEx cards — the dominant player with relationships with almost 60% of the Fortune Global 500 — will now have reason to switch to the Goldman product.
    Goldman reached $50 billion in commercial deposits by the third quarter this year, several years ahead of target, CEO David Solomon told analysts last week.

    A Goldman Sachs logo is seen displayed on a smartphone screen.
    Omar Marques | SOPA Images | LightRocket | Getty Images

    Goldman Sachs is partnering with American Express to upgrade its digital cash management offering, CNBC has learned.
    The investment bank is leaning on the world’s biggest issuer of business charge cards in its quest to displace rivals that handle trillions of dollars in deposits and payments for corporations. By integrating virtual card technology from AmEx into its platform, Goldman has automated the cumbersome process of sorting and paying bills to vendors and suppliers, according to executives of the two firms.

    “This a one-stop solution to a highly fragmented business-to-business payments landscape for large corporates,” Hari Moorthy, Goldman’s global head of transaction banking, said in a phone interview. “It lets CFOs and treasurers have better financial planning because now you have a seamless way to track the flow of funds, irrespective of the payment rails used.”

    Hari Moorthy, Goldman Sachs global head of transaction banking.
    Source: Goldman Sachs

    Cash management — the business of holding companies’ deposits and helping them make payments — is the commercial counterpart to Goldman’s better-known efforts to break into retail banking.
    Introduced in early 2020 as part of CEO David Solomon’s plans to add more stable sources of revenue, the transaction banking business has already begun gaining traction. Goldman reached $50 billion in deposits by the third quarter this year, several years ahead of target, Solomon told analysts last week.
    Built using cloud technology to offer a slick experience for users, Goldman’s platform employs algorithms to help decide which payment form is best to use — card, wire, or Automated Clearing House — to save companies time and maximize card rewards. It also offers greater visibility into the status of payments and levels of cash.
    That’s an upgrade from the patchwork of decades-old systems used by competitors, which force users to shuttle between multiple programs to manage thousands of daily payments, according to Dean Henry, executive vice president of global commercial services at AmEx. Citigroup, JPMorgan Chase and other global banks are the dominant players in cash management.

    “These large companies in the Fortune 250 are dealing with big banks that tend to have legacy, more fragmented solutions that don’t provide the capabilities that Goldman Sachs and American Express can provide,” Henry said.
    Some of the companies’ clients are already using the platform, which will be more broadly available early next year. The two firms were set to announce their collaboration later Wednesday.

    Fending off fintechs

    The project took roughly nine months to complete, according to people with knowledge of the matter. Top executives at the two financial giants — whose headquarters are across the street from each other in downtown Manhattan — had been casting about for ways to collaborate, the people said.
    Both companies get something out of it.
    The move could help Goldman accelerate growth in its nascent business because users of the ubiquitous AmEx business card will now have reason to switch to the Goldman platform. AmEx says it has relationships with more than half the Fortune Global 500 companies.
    For AmEx, companies that sign up for Goldman’s software will have less reason to one day switch to the new generation of fintech providers of business software and charge cards.
    Start-ups including Brex and Ramp have rapidly gained eye-popping valuations this year by peeling off clients of established players like AmEx. The disruptors began with corporate charge cards but have rapidly expanded offerings in an attempt to provide all-in-one business management solutions.
    The fintech players have mostly targeted start-ups rather than the big corporations Goldman and AmEx are seeking. But at some point, they could begin to make gains there as well.
    “There are fintechs attempting this style of solution, but American Express and Goldman Sachs have the brand, the trust and the balance sheet to really help these big companies, and that’s what fintechs don’t have,” Henry said.

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    NYC Expands Vaccine Mandate to All Public Employees, Eliminates Test-Out Option

    An MTA worker is seen wearing a mask on the subway after The Port Authority of New York and New Jersey and the Metropolitan Transportation Authority (MTA) announced a mandatory coronavirus vaccination or weekly test mandate for employees in New York City, New York, August 2, 2021.
    Andrew Kelly | Reuters

    COVID-19 vaccines work, research shows. So do vaccine mandates. That’s why New York City officials are expanding the requirement to all public employees — with no test-out option, the mayor’s office announced Wednesday.
    Effective immediately, city employees will receive $500 in their paychecks if they get their first shot at a city-run vaccination site, according to the mayor’s office.

    The new rules affect more than 160,000 workers (including police, firefighters and correctional officers), 70% of whom already had at least one shot.
    “There is no greater privilege than serving the people of New York City, and that privilege comes with a responsibility to keep yourself and your community safe,” Mayor Bill de Blasio said in making the announcement on Wednesday.
    “We have led the way against COVID-19 — from fighting for the right to vaccinate frontline workers, to providing nation-leading incentives to creating the Key to NYC mandate,” the Democrat continued. “As we continue our recovery for all of us, city workers have been a daily inspiration. Now is the time for them to show their city the path out of this pandemic once and for all.”
    De Blasio said the city will begin impact bargaining with affected unions immediately.

    More from NBC New York

    Under an executive order signed by the mayor last month, NYPD officers must either be vaccinated or show proof of a negative COVID-19 test each week but the new order expected to become official later Wednesday means about 20,000 unvaccinated officers must get at least one dose by Oct. 29 or be placed on unpaid leave, officials said. The deadline is 5 p.m. that day.
    The NYPD has about 34,500 uniformed personnel and about 17,700 people in non-uniformed support positions. It had a vaccination rate of 61% last month, but that number increased to 68% in less than two weeks, according to NYPD Commissioner Dermot Shea.
    The mandate goes into effect on December 1 for uniformed members of the Department of Corrections.
    The two commissioners who oversee the largest police and fire departments in the U.S. have already said earlier this month that they support the mandate for the members of their respective departments. Shea had even made impassioned pleas to officers in a video message, urging them to get inoculated.
    The new mandate comes shortly after the city reached an 85% milestone of residents with at least one dose of the vaccine.
    The five boroughs were the first to enact one of the nation’s strictest vaccine mandates, a sweeping measure that requires shots for everyone entering a bar, restaurant, nail salon, gym or sports games, to boost the overall percentage of the population protected from COVID-19.
    Mayor de Blasio continues to encourage those who have not gotten vaccinated to do so. At the rate the city is going, he says, there are only about one million adult New Yorkers left who are unvaccinated.
    “At this point, there is only about one million adults left to be vaccinated and they keep coming in. The incentives the mandates, everything’s working,” de Blasio said.

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    Stocks making the biggest moves before the bell: Biogen, Novavax, Netflix, Verizon & more

    A customer enters a Verizon store in San Francisco, California, U.S., on Tuesday, July 20, 2021.
    Bloomberg | Getty Images

    Check out the companies making headlines before the bell:
    Anthem (ANTM) — The health insurer reported adjusted quarterly profit of $6.79 per share, beating the $6.37 per share consensus estimate from Refinitiv, with revenue also topping forecasts. Anthem also raised its full-year outlook amid higher premiums for its Medicare and Medicaid businesses. 

    Biogen (BIIB) — The drug maker’s stock rose 2.2% in the premarket after the company beat estimates on the top and bottom lines and raised its full year forecast. Biogen earned an adjusted $4.77 per share for the quarter, compared with a consensus estimate of $4.11 per share. The company is still optimistic about prospects for its Alzheimer’s drug Aduhelm, despite slower than expected adoption.
    Novavax (NVAX) — The drug maker’s shares tumbled 26.1% in the premarket following a Politico report saying it was having trouble meeting Food and Drug Administration quality standards for its Covid-19 vaccine.
    Winnebago (WGO) — The recreational vehicle maker beat estimates by 56 cents with adjusted quarterly earnings of $2.57 per share, while revenue exceeded estimates as well. Results were helped by strong consumer demand, which allowed the company to raise prices amid higher input costs. Winnebago added 2.4% in premarket trading.
    Verizon (VZ) — Verizon beat estimates by 5 cents with an adjusted quarterly profit of $1.41 per share, though revenue was slightly below Street forecasts. Verizon also increased its full-year guidance, as growing 5G adoption boosts sales. Verizon rose 1% in the premarket.
    Netflix (NFLX) — Netflix reported quarterly earnings of $3.19 per share, beating the Refinitiv consensus estimate of $2.56 per share, with revenue in line with forecasts. Netflix added 4.4 million new subscribers during the quarter, exceeding expectations, but it did forecast current quarter earnings below consensus. Netflix fell 2.2% in premarket action. 

    United Airlines (UAL) — United lost an adjusted $1.02 per share for the third quarter, smaller than the loss of $1.67 per share that Wall Street had anticipated. United said the spread of the Covid delta variant has slowed, but not derailed, its recovery. United shares were up 1.6% in the premarket.
    Canadian National Railway (CNI) — The railroad’s CEO Jean-Jacques Ruest will retire at the end of January. Investors had been calling for his exit after the company’s failed bid for Kansas City Southern (KSU). The stock rallied 3.3% in the premarket.
    Brinker International (EAT) — Brinker said its profit margins have been dented by higher labor and commodities costs. The parent of Chili’s and other restaurant chains said the surge in the Covid delta variant exacerbated those issues. Brinker tumbled 13.7% in premarket trading.
    WD-40 (WDFC) — WD-40 shares slumped 11% in the premarket after the lubricant maker reported a lower-than-expected profit and revenue for its latest quarter. CEO Garry Ridge said the pandemic had created abnormal swings in the company’s sales results.
    Tegna (TGNA) — Tegna gained 1.2% in premarket trading following a Bloomberg report that media mogul Byron Allen has received additional backing for his $23 per share offer for the TV broadcasting company. 

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