Raphael Stevens

It’s been a busy week for the airlines.
Delta reported a profit for the third quarter on Wednesday morning thanks to better demand than a year earlier.

Meanwhile, Southwest Airlines dominated the headlines earlier in the week after a wave of cancellations – the company scrapped more than 2,200 flights from Saturday to Monday, blaming weather and air traffic issues.
The JETS ETF is essentially flat for the week but remains 17% below a peak set in March.
Now Miller Tabak’s chief market strategist, Matt Maley, is watching the charts closely for the next move in the group.
In an email to CNBC, he said the “battle lines” were well drawn on the XAL airline index. He highlights a break above the neckline of an inverse head-and-shoulders pattern, a bullish technical setup that suggests the reversal of a downtrend.

Arrows pointing outwards

Investors should now watch that $101.50 level, a high it has touched in September and October but failed to break through, he said.  

If “they can bounce back strongly and break back above that $101.50 level, that will give it a nice higher high to follow … the upside breakout of the neckline of that inverse head-and-shoulders pattern, and that all would be very, very bullish,” he said further in an interview with CNBC’s “Trading Nation” on Tuesday. “If it breaks above that, it’s going to be quite positive for the group.”
The index closed Tuesday at $95.62. It would need to rally 6% to reach Maley’s target.
Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, said the next few months could prove critical for the airlines.
“Holiday travel is an important litmus test right now,” Sanchez said during the same interview. “The pandemic has actually been featuring a lot of road travel, car trips, road trips, but we haven’t seen the really robust return to plane travel yet.”
The number of travelers moving through TSA checkpoints has averaged 1.79 million since the beginning of August this year. Through the same stretch in 2019, the average was 2.3 million.
Signs that cases of the Covid delta variant are waning and the potential for children aged 5 to 11 to get vaccinated should help support a return to the skies this holiday season, Sanchez said.
“All of those actually set up for the potential for holiday travel come Christmas time so we have to see how that actually pans out, and that will be a make-or-break moment for the airline stocks,” she said.
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Delta’s third-quarter revenue and profit topped analysts’ expectations but was still below 2019 levels.
It was Delta’s first quarterly profit without taking federal aid into account since the start of the Covid crisis.
The airline expects fuel and other costs to rise in the fourth quarter.

Delta Air Lines Airbus A330neo or A330-900 aircraft with neo engine option of the European plane manufacturer, as seen departing from Amsterdam Schiphol AMS EHAM International airport.
Nicolas Economou | NurPhoto | Getty Images

Delta Air Lines on Wednesday reported a quarterly profit and higher-than-expected revenue for the third quarter, but warned that higher fuel costs could pressure its bottom line in late 2021 despite improving travel demand.
The Atlanta-based airline said it expects revenue to continue to recover during the last three months of the year, to a little bit less than three-quarters of the $11.4 billion it brought in in the same quarter in 2019, before the pandemic. Here’s how it performed compared with average analysts’ estimates compiled by Refinitiv:

Adjusted earnings per share: 30 cents versus 17 cents expected.

Revenue: $9.15 billion versus $8.4 billion expected.

Delta’s third-quarter profit of $1.2 billion, which was down 19% from 2019, was its second profit since the pandemic but the first one without U.S. aid. Delta and other airlines received billions of dollars in federal assistance to keep them afloat during the pandemic. Delta’s revenue of $9.15 billion also exceeded analysts’ expectations of $8.4 billion.
The industry has been providing earnings comparisons to 2019, before the pandemic hit.
The carrier said it expects its costs, before fuel expenses, to rise 6% to 8% in the fourth quarter as it ramps up flying. Delta said it would fly 80% of its 2019 capacity, up from 71% in the most recent quarter.
It expects fuel prices to rise to $2.25 to $2.40, from the average $1.97 a gallon in the third quarter.
“While demand continues to improve, the recent rise in fuel prices will pressure our ability to remain profitable for the December quarter,” Delta’s CEO Ed Bastian said in an earnings release. “As the recovery progresses, I am confident in our path to sustained profitability as we continue to provide best-in-class service to our customers, strengthen preference for our brand, while creating a simpler, more efficient airline.”
Delta’s shares were down 1.3% in premarket trading, more than other carriers.

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Jeff Bezos’ Blue Origin is set to launch its New Shepard rocket for the fifth time this year on Wednesday, and Canadian actor William Shatner will join the second crewed spaceflight for the company.

Called NS-18, this New Shepard mission will carry a crew of four: Shatner, Blue Origin VP of mission and flight operations Audrey Powers, Planet Labs co-founder Chris Boshuizen and Medidata co-founder Glen de Vries.

The crew of NS-18, from left: Audrey Powers, William Shatner, Dr. Chris Boshuizen, and Glen de Vries.
Blue Origin

Shatner, who famously played Capt. Kirk in the original “Star Trek” television series, is set to become the oldest person to fly into space at 90. The record was previously held by aerospace pioneer Wally Funk, who at 82 flew on Blue Origin’s first crewed launch in July.
The rocket will launch from Blue Origin’s private facility in West Texas, aiming to reach above 100,000 kilometers (or more than 340,000 feet altitude) before returning to Earth safely a few minutes later. From start to finish, the launch is expected to last about 11 minutes. The crew is set to experience about three minutes of weightlessness.
New Shepard’s capsule will accelerate to more than three times the speed of sound to pass beyond the 80 kilometer boundary (about 50 miles) the U.S. uses to mark the edge of space. The capsule is flown autonomously, with no human pilot, and returns under a set of parachutes to land in the Texas desert.
The New Shepard rocket booster is also reusable, and will attempt to land on a concrete pad near the launch site.

The company also flies New Shepard on cargo missions, such as the one in August, which carry research payloads in the capsule.

This photo provided by Blue Origin, Blue Origin’s New Shepard rocket sits on a spaceport launch pad near Van Horn, Texas, Tuesday, July 20, 2021.
Blue Origin | Reuters

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Sustainable Energy

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The International Energy Agency’s wide-ranging report comes as the planet gears up for the COP26 climate change summit in Glasgow, Scotland.
“The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” says Fatih Birol, the IEA’s executive director.

Lignite mining taking place in Germany with wind turbines in the background.
delectus | iStock | Getty Images

The International Energy Agency issued a sobering warning Wednesday, claiming that clean energy progress remained “far too slow to put global emissions into sustained decline towards net zero.”
The Paris-based organization made its remarks in an announcement accompanying the release of its World Energy Outlook 2021. The wide-ranging report’s publication comes as the planet gears up for the COP26 climate change summit in Glasgow, Scotland, which will take place between Oct. 31 and Nov. 12.

The IEA’s report said that while electric vehicle sales achieved new records in 2020 and renewable sources such as wind and solar photovoltaic continued their rapid growth, “every data point showing the speed of change in energy can be countered by another showing the stubbornness of the status quo.” Photovoltaic refers to a way of directly converting light from the sun into electricity.In a sign of how much work needs to be done, the WEO described how a “rapid but uneven economic recovery from last year’s Covid‐induced recession” had put significant strains on the energy system. This had sparked “sharp price rises in natural gas, coal and electricity markets.”
“For all the advances being made by renewables and electric mobility, 2021 is seeing a large rebound in coal and oil use,” the report continued. “Largely for this reason, it is also seeing the second‐largest annual increase in CO2 emissions in history.”
Challenges ahead
The report goes through a number of scenarios when it comes to looking at the years ahead. These include its Stated Policies Scenario, where “almost all of the net growth in energy demand to 2050 is met by low emissions sources.”
While the above sounds promising, the IEA cautions that this would leave yearly emissions at roughly today’s levels. “As a result, global average temperatures are still rising when they hit 2.6 °C above pre‐industrial levels in 2100.”

Read more about clean energy from CNBC Pro

Another outlook, the Announced Pledges Scenario, looks at what would happen if the net zero commitments made by governments to date were fully implemented on time.

Under this scenario, challenges remain, according to the WEO: “The global average temperature rise in 2100 is held to around 2.1 °C above pre‐industrial levels, although this scenario does not hit net zero emissions, so the temperature trend has still not stabilised.”
The shadow of the Paris Agreement, which was reached at the COP21 summit in December 2015, looms large over both COP26 and the IEA’s report.
Described by the United Nations as a legally binding international treaty on climate change, the accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”
The challenge is huge, and the United Nations has noted that 1.5 degrees Celsius is considered to be “the upper limit” when it comes to avoiding the worst consequences from climate change.
Referencing the current trajectory of CO2 emissions, the U.N. states that “temperature could increase by as much as 4.4°C by the end of the century.”
Commenting on the IEA’s newly published report, Fatih Birol, its executive director, said: “The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems.”
“Governments need to resolve this at COP26 by giving a clear and unmistakeable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future,” Birol said.
“The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense.”
Speaking to CNBC Wednesday morning, Birol expanded on his point.
World leaders coming to Glasgow, he said, “should unite and give an important, unmistakable signal to … investors around the world.”Among other things, Birol continued, this would include telling investors they may risk losing money if they continued to invest in “dirty energy.” More

Demand for high-end watches has surged since the Covid-19 pandemic.
The explosion in online watch buying is lifting the fortunes of a growing number of start-ups, all aiming to become the dominant digital marketplace for pre-owned watches.
Start-ups in the space have been raising money or flirting with the possibility of an IPO.

A macro of a Rolex Explorer II GMT watch.
xrrr | iStock Editorial | Getty Images

A rush of companies are vying to become the eBay of high-end horology — including the storied online marketplace itself.
Demand for high-end watches exploded during the Covid-19 pandemic. But the Big Four watch brands — Rolex, Patek Philippe, Audemars Piguet and Richard Mille — are holding firm on the limited production runs that make their timepieces so rare. The result is an online boom in the business of buying, selling and flipping pre-owned and vintage watches and a growing number of start-ups competing to become the dominant digital marketplace.

McKinsey estimates that pre-owned watch sales hit $18 billion in 2019, and could top $30 billion by 2025. Pre-owned watch sales will be about half the size of the market for new, retail watches by 2025, up from about a third today, according to the consulting firm.
“The pre-owned watch market is still very much like the Wild West,” said Toby Bateman, CEO of Hodinkee, a popular watch collector site. “There are a lot of watch-selling platforms. And customers don’t necessarily know who they’re buying the watch from. They can’t guarantee that it is authentic. They can’t guarantee that it’s not a Frankenwatch. And they can’t guarantee that the watch is working properly.”
On Tuesday, Hodinkee launched its pre-owned watch shop, here it will buy and sell watches produced after 1990. The company — which raised $40 million in December from the likes of NFL quarterback Tom Brady, singer John Mayer, Apple alum Tony Fadell and investor Peter Chernin — aims to be the “world’s preeminent brand for all things watches.”
Hodinkee’s pre-owned shop will start with an assortment of 250 pre-owned watches and offer authentication and refurbishing from its state-of-the-art watch facility in Atlanta. Bateman said Hodinkee’s advantage over its growing list of competitors is its expertise and history as a trusted name in watches.
Still, rivals are attracting investor attention. Germany-based Chrono24 recently raised 100 million euros ($116 million) from investors including General Atlantic and LVMH CEO Bernard Arnault’s Aglae Ventures. The investment valued Chrono24 at more than $1 billion, making it the first “unicorn” in the segment. The company said it carries about 500,000 watches from more than 3,000 retailers and over 30,000 private sellers.

Meanwhile, Switzerland-based Chronext was planning to raise about $270 million in an initial public offering, which would have valued the company at more than $1 billion. Yet Chronext said last week it was postponing its debut due to “adverse market conditions for high-growth companies.”
Chronext has put together a star-studded board — including former Facebook marketing chief Gary Briggs and former Barneys New York CEO Daniella Vitale — and aims to expand in the U.S. and Asia.
Companies like Watchfinder, WatchBox and Watchmaster are also expanding and pushing for market share. Even eBay is taking aim at the Rolex crowd, launching an authenticity guarantee program and targeting higher-end watch collectors.
The question is how long can the current watch boom continue, and whether there are enough online sales to go around. The Big Four watch brands that drive most of the high-end collecting are all privately owned and have maintained their low production numbers despite huge demand, in order to preserve their storied quality and exclusivity. According to a report from Morgan Stanley, Rolex sold 810,000 watches last year, while Patek sold 53,000 watches, Audemars 40,000 and Richard Mille 4,300.
Demand is expected to continue to outstrip supply, at least in the near term. With stainless steel sports watches and other popular models all but impossible to buy at retail, with long waiting lists and scarce allocations, prices in the secondary market are rising. A Patek Philippe Ref. 5711 Green Dial, which retails for $35,000, auctioned in July for $490,000. Values for the Audemars Piguet Royal Oak 15500ST (blue dial) have nearly tripled since 2017, to more than $55,000, while the value of the Rolex Day-Date 40 is up 76% since 2017 to over $50,000, according to Chronext.
Industry executives say soaring global wealth, driven by stocks and crypto, along with a proliferation of online watch collector and information sites have spawned a whole new generation of young collectors buying and selling watches online. Social media has also powered sales, as more collectors like to flash their Swiss status symbols on Instagram and TikTok. For watch buyers and sellers, start-ups and online marketplaces, it remains to be seen how many of those new traders will stick around if pre-owned prices and demand falls.
“There are a lot more people today that consider themselves to be collectors and enthusiasts than there were even just a few years ago,” Bateman said.

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Russia has vehemently denied new accusations claiming that Russian spies stole the “blueprint” for the Oxford-AstraZeneca vaccine and used it to create its own Sputnik V shot.
The head of Russia’s sovereign wealth fund called the claims “scientific nonsense.”
There have been fresh reports in the British press this week alleging that U.K. security services told ministers they had evidence that Russia stole the blueprint.

An employee holds a vial containing Sputnik V vaccine against the coronavirus disease (COVID-19) made with ingredients and technology supplied by Russia at Brazilian pharmaceutical company Uniao Quimica in Guarulhos, Brazil May 20, 2021.
Amanda Perobelli | Reuters

Russia has vehemently denied new accusations claiming that Russian spies stole the “blueprint” for the Oxford-AstraZeneca vaccine and used it to create its own Sputnik V shot, with the head of Russia’s sovereign wealth fund calling the claims “scientific nonsense.”
There have been fresh reports in the British press this week alleging that U.K. security services told British ministers they had solid proof that Russia stole the blueprint for the British-made vaccine and used it to create Sputnik V.

The Sun tabloid newspaper first reported the allegations made by the British security services although Downing Street declined to comment. It’s not the first time that Russia has been accused of trying to steal and hack Covid vaccine data but Moscow has repeatedly denied the accusations, with RDIF calling the latest report “fake” and a “blatant lie.”
The head of the country’s sovereign wealth fund, RDIF, echoed that sentiment on Wednesday, calling the accusations a “scientific nonsense.”
“There is no merit [to these claims] and we’re very clear about this,” Kirill Dmitriev told CNBC on Wednesday. “This report is a complete scientific nonsense, it has zero merit and frankly it’s a lie.”

Calling the report “nonsense from anonymous sources,” Dmitriev said the latest accusations were part of a “smear campaign against Sputnik V because some politicians don’t like Russia and because some big pharma companies, who are afraid of the success of Sputnik V, continue to attack Sputnik V and Sputnik Light [its one-dose booster shot] from day one, so we’re used to these attacks,” he told CNBC’s “Street Signs Europe.”
Dmitriev insisted that the developers behind Sputnik V wanted to be partners with other vaccine producers and cited a joint clinical trial taking place with AstraZeneca (to determine if mixed Covid vaccine doses work), noting “we believe in a joint approach to working with other vaccine producers and Sputnik V is a partner to other vaccines.”

What’s next

The Russian Direct Investment Fund, or RDIF, is one of the world’s leading sovereign funds with a reserved capital of $10 billion under management. The fund backed the development of Russia’s main coronavirus vaccine, Sputnik V, which was the first Covid vaccine in the world to be authorized — by Russia — in August 2020.
The Sputnik V vaccine has been the subject of suspicion — first over its clinical data and efficacy — and most recently, accusations over its origin and development.
Interim analysis of phase 3 clinical trials of the shot, involving 20,000 participants and published in the peer-reviewed medical journal The Lancet in early February, found that it was 91.6% effective against symptomatic Covid-19 infection. 
Still, the vaccine has not been authorized for use by drug authorities in the U.S., U.K. and EU. The World Health Organization has said it is still assessing the vaccine but has not indicated if and when it might grant the shot emergency use listing.
Not to be deterred, Russia has developed several other Covid vaccines and has since worked on a one-shot “Sputnik Light” vaccine designed to be used as a booster shot. In August, RDIF said Sputnik Light had proved “highly effective against Covid among more than 320,000 subjects who had received the vaccine based on the data collected by July 30, 2021.” It cited an efficacy rate of 93.5%.
RDIF’s Dmitriev told CNBC that Russia expects the Sputnik V vaccine to be approved by the end of 2021 and that he hopes the one-shot Sputnik Light could soon be used as a booster shot in conjunction with other vaccines.
“We’ve seen very positive signals from the WHO lately and they really appreciate what we are doing … ‘Sputnik Light’ can be a booster to other vaccines such as AstraZeneca and Moderna to many other vaccines, so we believe in a very positive solution with the WHO as early as the fall … definitely we expect an approval very soon,” he said.

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Russia has hit a grim new record in its Covid-19 pandemic.
On Tuesday, the country had reported 28,190 new coronavirus cases and 973 deaths, data from the government’s coronavirus taskforce showed.
In total, Russia has recorded over 7.8 million cases of the virus and over 219,000 deaths.

OMSK, RUSSIA OCTOBER 9, 2021: Cemetery workers in protective gear bury people who died of causes related to COVID-19 at Novo-Yuzhnoye Cemetery. Yevgeny Sofiychuk/TASS (Photo by Yevgeny SofiychukTASS via Getty Images)
Yevgeny Sofiychuk | TASS | Getty Images

Russia has hit a grim new record in its Covid-19 pandemic, with the number of daily deaths caused by the virus hitting a new high for the second day in a row.
On Wednesday, Russia reported 28,717 new Covid cases and 984 deaths caused by the virus, marking the second day in a row that the country has recorded a record-high number of daily fatalities.

On Tuesday, the country had reported 28,190 new coronavirus cases and 973 deaths, data from the government’s coronavirus taskforce showed. In total, Russia has recorded over 7.8 million cases of the virus and over 219,000 deaths.
Russian Health Minister Mikhail Murashko delivered sharp warnings on the public health crisis in Russia on Tuesday, telling a cabinet meeting that that incidence of Covid in Russia had increased 16% over the past week and in some regions, the growth rate was more than 30%.
Russia has about 255,000 beds for Covid patients, of which about 235,000 are occupied, Murashko said, with 11% of Russia’s hospitalized Covid patients in a serious or critical condition “and practically all of them are patients who have not been vaccinated,” Murashko said, according to the TASS news agency.

Russia is desperate to increase vaccination rates in the country but many members of the public have been reluctant to take up the Covid shot, primarily the Russian-made Sputnik V vaccine, often despite the offer of incentives including money, shopping coupons and gift cards, and easy access to facilities such as walk-in immunization centers.
So far, however, the Kremlin has resisted making Covid vaccination mandatory for the wider public although there is a wide swathe of workers in several regions, and in several sectors such as retail, health care and education, that must have a Covid vaccine now or risk losing their jobs.

Read more: Putin says Russia won’t make Covid vaccines compulsory, but skepticism remains a problem
Nonetheless, vaccination figures remain low with around 31% of Russia’s 144 million population fully vaccinated, according to Our World in Data.

The frustration at the sluggish acceptance of Covid vaccines has been palpable in Russia, with President Vladimir Putin making numerous attempts to extol the benefits of the vaccine to the reticent public.
On Tuesday, that effort continued with Putin reportedly telling a meeting of State Duma (parliament) deputies that they needed to work harder to increase Russia’s vaccination rates.
“We need to persistently and patiently work with people, explain to them all the advantages associated with the prevention of this dangerous disease,” he said, TASS reported.
Still, there are no signs that Russia is willing to implement a nationwide lockdown with the power to lock down granted to Russian regions where restrictions vary widely.

Vaccine skepticism

Russia was one of the first countries in the world to approve a Covid vaccine, in August 2020, and to roll out the shots. So were it not for public reluctance, Russia could have vaccinated far more people to date.
Reluctance has been seen as resulting from concerns over Sputnik V’s safety and efficacy credentials, particularly as Russia authorized the shot before clinical trials had been completed in a move that raised suspicions in the international scientific community.
However, the Sputnik V vaccine was found to be 91.6% effective in preventing people from developing Covid, according to peer-reviewed results from its late-stage clinical trial that were published in The Lancet medical journal in February.

People walk through the Red Square in a sunny autumn day in Moscow on October 9, 2021.
DIMITAR DILKOFF | AFP | Getty Images

Despite this, a poll by Russia’s Levada polling center published in March found that 62% of people did not want to get the vaccine, with the highest level of reluctance found among 18-to-24-year-olds.
The latest data from Levada published in early September, shows that skepticism towards the vaccine remains high but has declined over the summer, with 52% of Russians polled not wanting to get vaccinated with a Russian vaccine. In the poll of 1,619 people conducted in August, 14% said they were ready to be vaccinated with around a third saying they were already vaccinated.
More than half of the Russians polled (55%) said they were not afraid of contracting coronavirus too, indicators that have hardly changed since the beginning of 2021 despite more recent warnings about the spread of the more virulent delta variant.
Read more: Fully vaccinated people are still getting infected with Covid. Experts explain why
Murashko warned on Tuesday that youth was no longer a guard against Covid, telling the cabinet meeting that “we have seen patients of up to 30 years old who are in intensive care with severe complications.”
“Young age, therefore, today is not insurance against illness and its complications,” he said, according to the TASS news agency.

There’s no love lost between Russia and its neighbor Ukraine, given the former’s illegal annexation of Crimea in 2014 and subsequent pro-Russian uprising in east Ukraine, but both countries have in common their difficulties overcoming the Covid crisis.
Like Russia, Ukraine registered a near-record number of deaths in the last 24 hours, reporting 471 coronavirus-related deaths and very near to the record daily toll of 481, the health ministry reported Wednesday.
— CNBC’s Hadley Gamble moderates a panel with Russian President Vladimir Putin and the CEOs of BP, TotalEnergies, ExxonMobil and Daimler at Russian Energy Week. Watch live at 1 p.m. Moscow time/11 a.m. London time on Wednesday, Oct. 13.

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