Raphael Stevens

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    Can Europe cope with a free-spending Germany?

    The market moves were bigger than expected. On March 5th German long-term yields jumped by 0.3 percentage points, the largest single-day rise in almost 30 years, and the euro surged. European stockmarkets, which would normally have suffered owing to higher rates, held on to their recent rises. Germany’s bombshell of a fiscal package—currently under negotiation—represents more than just the start of deficit spending on defence. It is the beginning of a new European growth model. The continent will depend more on internal demand, and less on the world. More

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    More testosterone means higher pay—for some men

    Testosterone replacement therapy is popular. In men with a deficiency, injections should provide pep, a stronger libido and lower anxiety. Now many with normal levels hope to achieve the same benefits, as well as slower ageing, even though the jabs are unproven and risk side-effects including infertility. Adherents include Joe Rogan, a podcaster; Robert F. Kennedy junior, America’s health secretary; and Robbie Williams, a singer portrayed as a monkey in a recent biopic. More

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    Why “labour shortages” don’t really exist

    Talk to a business owner in any country and, before long, they will voice a familiar complaint. In low-unemployment America, a third of firms say they experience recruitment challenges as candidates lack the right skills. In high-unemployment Italy, a quarter have the same complaint. Labour shortages are, apparently, not just a problem in rich countries. Goldman Sachs, a bank, reports that officials, regulators and private-sector folk in India worry about a lack of skilled labour. From Hong Kong to Guatemala, over two-thirds of employers moan about a talent shortage, according to a survey by ManpowerGroup, a consultancy. More

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    Your guide to the new anti-immigration argument

    Nothing unites and propels the world’s nationalists quite like hostility to immigration. And in the 2020s there has been lots of it: the number of long-term migrants to the rich world rose by 28% from 2019 to 2023. This wave has helped Donald Trump return to the White House and benefited hard-right parties across Europe. Immigration is arguably the present era’s defining political issue. More

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    American Eagle says consumer is slowing down, issues weak guidance

    American Eagle said shoppers are pulling back on spending as it issued mixed holiday-quarter results.
    The apparel retailer beat on the bottom line and posted comparable sales that came in better than expected.
    “Entering 2025, the first quarter is off to a slower start than expected, reflecting less robust demand and colder weather,” CEO Jay Schottenstein said in a news release.

    American clothing and accessories retailer American Eagle store seen in Hong Kong.
    Budrul Chukrut | Lightrocket | Getty Images

    American Eagle warned investors on Wednesday that consumers are pulling back on spending and it’s seen a “slower start” to the year than it expected. 
    “Entering 2025, the first quarter is off to a slower start than expected, reflecting less robust demand and colder weather,” CEO Jay Schottenstein said in a news release. “While we anticipate improvement as the Spring season gets underway, we are also taking proactive steps to strengthen the top-line, manage inventory and reduce expenses. As we navigate through an uncertain consumer and operating landscape, we will also remain focused on our long-term strategic priorities.” 

    Shares fell about 5% in extended trading.
    The downbeat commentary, which came along with weak guidance for the current quarter and year ahead, is the latest warning sign that the consumer might be slowing down as shoppers contend with persistent inflation and concerns around tariffs.
    Over the past couple of weeks, a string of other retailers, including both strong companies and ones that tend to struggle, issued weak guidance and cautious commentary about the current macroeconomic conditions and warned 2025 might be a weaker than expected year for sales. 
    Beyond its outlook, American Eagle issued mixed holiday results and comparable sales that beat expectations. Here’s how the apparel company did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

    Earnings per share: 54 cents vs. 50 cents expected
    Revenue: $1.60 billion vs. $1.60 billion expected

    The company’s reported net income for the three-month period that ended Feb. 1 was $104 million, or 54 cents per share, compared with $6.31 million, or 3 cents per share, a year earlier.

    Sales dropped to $1.60 billion, down slightly from $1.68 billion a year earlier. Similar to other retailers, American Eagle benefited from an extra week in the year-ago period, which has negatively skewed results.
    Comparable sales, which don’t include the effect of one less selling week, were up 3% during the quarter, ahead of expectations of up 2.1%, according to StreetAccount. Aerie, American Eagle’s intimates and activewear line, drove the company’s growth during the quarter with comps up 6%. Meanwhile, the company’s namesake banner saw comparable sales up 1%.
    For the current quarter, American Eagle is expecting to see a mid-single-digit decline in sales, while analysts expected revenue to increase 1.3%, according to LSEG. For the full year, it is expecting sales to decline by a low single digit, compared with expectations of 3% growth, according to LSEG.
    On a call with analysts, finance chief Michael Mathias said Aerie sales are expected to be positive for the year but that growth will be offset by a steeper decline at the American Eagle banner.
    Tariffs are also expected to weigh on results, Mathias said. The company currently sources just under 20% of its products from China and is expecting a $5 million to $10 million hit from the new duties in fiscal 2025, which will also affect American Eagle’s gross margin. At the moment, the company isn’t planning on passing those costs on to the consumer and is working to get its China exposure down to under 10% by the end of the fiscal year, Mathias said.
    Over the past year, American Eagle has made significant strides in improving profitability but has seen slower sales growth. In the three prior quarters, it missed Wall Street’s sales expectations, and on Wednesday, it issued revenue numbers that were in line with analysts’ forecasts but didn’t exceed them. 
    During the quarter, the company acknowledged it had some product misses and had certain items that were out of stock, which affected sales, but American Eagle’s stores are also weighing on its results. The company still has a large mall footprint, and while there are some signals that malls are seeing a resurgence, traffic is still down significantly at U.S. malls, which means fewer people are coming into the retailer’s stores. For example, online sales are expected to be positive during the first quarter while store sales are expected to fall steeper than a mid-single-digit.
    To combat the effect of declining malls, rival Abercrombie & Fitch has worked to move its stores to locations outside of malls while American Eagle has been working to remodel its existing fleet. Currently, the company’s stores are on average 12 years old, and it’s working to get that down to seven. In fiscal 2024, it remodeled around 56 stores, and in the year ahead, the company plans to remodel between 90 and 100 doors as part of its $300 million capex guidance.
    In prior quarters, American Eagle has said it’s been contending with an uncertain economic environment and a consumer that tends to only come out and shop during key moments, but now a wide range of other retailers are reporting similar dynamics as cracks in the economy spread.
    In February, consumer confidence saw the biggest drop since 2021, job growth slowed more than expected and unemployment ticked up. These signals and the effect they’ve had on the markets have led to concerns that a recession could be coming, especially if President Donald Trump’s trade war with Canada, Mexico and China continues.
    A slowing economy is bad news for any retailer but especially those that primarily sell discretionary goods such as new clothes. During a call with analysts, Schottenstein shared his thoughts on the consumer and said the biggest thing affecting shoppers is uncertainty.
    “They have the fear of the unknown, not just tariffs, not just inflation. They see the government cutting people off. They don’t know how that’s going to affect them. They see programs being cut, they don’t know how that’s gonna affect them,” said Schottenstein. “They just don’t know how it’s gonna affect them … they get very conservative.”

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    Here’s the inflation breakdown for February 2025 — in one chart

    The consumer price index rose 2.8% in February from 12 months earlier, a deceleration from January.
    Steel and aluminum tariffs took effect Wednesday. Economists fear that an escalating trade war could stall or reverse progress on inflation.
    Eggs saw by far the highest inflation rate among other categories in February.

    A customer shops for eggs at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas. 
    Brandon Bell | Getty Images

    Inflation receded in February on the back of easing price pressures for consumer staples like gasoline, groceries and housing, amid worries that President Donald Trump’s tariff policies could stall progress.
    The consumer price index rose 2.8% for the 12 months ended in February, the U.S. Bureau of Labor Statistics reported Wednesday. That’s down from 3% in January.

    The deceleration is encouraging after fears in recent months that inflation had become entrenched and wasn’t falling back to target.

    “Progress is bumpy,” said Michael Pugliese, senior economist at Wells Fargo Economics. “It’s not a linear path down. There are still risks, but there are no signs of a reacceleration with the data in hand.”
    The consumer price index measures how quickly prices rise or fall for a basket of goods and services, from haircuts to coffee, clothing and concert tickets.
    CPI inflation has declined significantly from its pandemic-era high of 9.1% in June 2022. However, it remains above the Federal Reserve’s target. The central bank aims for a 2% annual rate over the long term.

    “Excluding any major policy changes, I’d expect [inflation] to continue gradually slowing,” Pugliese said. “Of course, the big question on everyone’s mind is, what are the big policy changes that will happen over the course of this year?”

    Trump imposed a fresh round of tariffs on foreign steel and aluminum imports on Wednesday, triggering retaliatory tariffs from Europe on about $28 billion of U.S. goods starting in April. The Trump tariffs follow on others he’s already imposed on Canada, China and Mexico, the three largest trading partners of the U.S.
    More from Personal Finance:’Wealthy tax dodgers’ could benefit from IRS layoffs, Democrats warnConsumer outlook sinks as recession fears take holdTrump says Education Dept. shouldn’t handle student loans
    Tariffs, a tax paid by U.S. importers, add costs for businesses that ultimately get passed to consumers, economists said. Steel tariffs, for example, could make steel-intensive items like cars, homes and machinery more expensive, they said.
    The president has proposed additional tariffs, though it’s unclear if they’ll take effect or for how long.

    Egg prices are up 59%

    Egg prices spiked by 59% over the past year, by far the largest increase for any item in February.
    An outbreak of avian flu — which is highly contagious and lethal among birds — has killed millions of egg-laying chickens and reduced egg supply, economists said. The U.S. Justice Department also opened an investigation into potential antitrust issues related to the surging price of eggs, according to news reports.

    The price of instant coffee has also increased about 9% in the past year, according to the CPI data. Weather patterns like droughts fueled by climate change have disrupted major coffee growers including Brazil, reducing supplies of coffee beans.
    Overall, though, inflation for groceries is relatively low, at 1.9% in the past 12 months.

    Gasoline inflation was also tame in February. Prices were down 1% from January to February, and down 3% in the past year, according to CPI data.
    Shelter is the largest component of the CPI, and movements up and down can have a significant impact on overall inflation readings. Annual inflation for shelter was at 4.2% in February, the lowest since December 2021.
    “Housing inflation is historically the ‘stickiest’ component of inflation, meaning it takes longer to buck price trends,” Gargi Chaudhuri, BlackRock’s chief investment and portfolio strategist for the Americas, wrote in an emailed note Wednesday. “The recent trend in housing prices keeps us optimistic on the future trajectory of inflation.”
    Correction: The consumer price index was down from 3% in January. An earlier version misstated the timing.

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    What sparks an investing revolution?

    What prompts a revolution? When it comes to investing, no change has been as great as that produced by researchers at the University of Chicago in the 1960s. Their financial-theory revolution changed the way that almost everyone invests, making speculators many trillions of dollars in the process. More

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    Take a look inside the world’s largest 3D printed housing development

    Lennar and Icon, a 3D technology company, partnered to print 100 homes in Georgetown, Texas. The real estate company says about 75% of them have already sold.
    The homes have all the amenities of a conventionally built Lennar community. They come in 2- and 3-bedroom models and start at just under $400,000.
    The companies are planning a second development in Texas, with more homes and at lower cost.

    Just outside Austin, in Georgetown, Texas, brand new planned communities sprawl out as far as the eye can see, which is pretty far in this part of the country. But one small subdivision instantly draws focus. Just completed, it is now the world’s largest 3D-printed community.
    Two years ago, Lennar, the nation’s second-largest homebuilder, partnered with Icon, a 3D technology company, to print 100 homes in the Wolf Ranch development. The companies say about 75% of them have already sold.

    All the walls have rounded edges, as that’s how the printers navigate with the concrete. The layering process makes it feel like hard, wide-wale corduroy. The roofing is the only part of the structures not 3D-printed, and, in this community, is made of metal. Each home is solar-powered.

    Lennar and Icon 3D printed homes.
    Diana Olick | CNBC

    “We have a durable product here that if you look at its wind resistance for hurricanes, its fire resistance for fire-worn areas — the ability to adapt modern product to what we need for the future in housing and building a healthier housing market is amazing,” said Stuart Miller, chairman and co-CEO of Lennar.
    Icon started the project at Wolf Ranch in 2022, using two 40-foot robotic printers. By the second year, the company was using 11 machines, cutting print time in half and squeezing out two homes per week. Each printer does the job of more than a dozen construction workers. The systems operated 24 hours a day.
    “All the learnings about this technology need to happen at scale,” said Jason Ballard, CEO of Icon. “The truth is in the field, not in the lab.”
    Ballard said his team had to work out large-scale logistics with Lennar’s teams, everything from laying foundations to printing walls, installing interior systems and adding roofing.

    “Figuring out how to integrate with Lennar’s operations, who are probably the best scale builders in the world, was a real growing up moment for our company,” Ballard said.

    Lennar and Icon 3D printed homes. 
    Diana Olick | CNBC

    The homes have all the amenities of a conventionally built Lennar community. They come in 2- and 3-bedroom models and start at just under $400,000.
    Holly Feekings and her husband, both retired, moved into their 3D-printed home about a year ago. She said the best part of living in the printed home is her electric bill — just $26 last month. Concrete retains its temperature, heat or cold air, better than her previous standard colonial, Feekings said. She also likes the home’s durability.
    “I feel safer in this house than any house I’ve ever lived in, because it’s so well built, it’s not going to burn down,” said Feekings.
    Around the corner, Pierre Megie and his girlfriend were drawn in by the look and feel of the home.
    “We wanted tall doors, taller ceilings, cement floors, somehow, and this home had everything. Really just a combination of energy efficiency, the practicality, the price point, and then the aesthetics,” said Megie.

    Lennar and Icon 3D printed homes. 
    Diana Olick | CNBC

    The community was an experiment for Lennar. The cost to stand it up, according to Miller and Ballard, was slightly higher than anticipated as they worked through the kinks.
    Miller said Lennar is now planning its second 3D-printed community in Texas with Icon, roughly 200 homes, which will cost even less to build, given what the companies learned in Georgetown. The next community will have larger homes, and Ballard expects them to go up even faster, and cheaper.
    “We’ve seen our costs go down by half. We’ve seen our cycle time go down by half. This is significant improvement in evolving a housing market that has the ability to change over time and being more adaptable and more functional in providing affordable and attainable housing for a broader swath of the market,” said Miller.
    As for the rising risk of tariffs between U.S. and trade partners, Ballard said all of the concrete his company uses is sourced stateside. More