Raphael Stevens

A shopper wearing a protective mask checks out at a Costco store in San Francisco, California, on Wednesday, March 3, 2021.David Paul Morris | Bloomberg | Getty ImagesMarch retail sales are expected to be strong, and some economists say stimulus checks may have quickly made their way into the economy, contributing to an even bigger gain of 10% or more.The March sales data, released at 8:30 a.m. ET Thursday, could be the first in a series of powerful reports on consumer spending, as vaccinations increase and the economic reopening continues. The $1,400 fiscal stimulus checks sent to individuals, starting in mid-March, appear to have spurred spending in an environment of pent-up demand.”We expect the March retail sales report to be outstanding with headline and core retail sales both surging more than 11%” month over month, wrote Bank of America economists. “Stimulus, reopening, and better weather served as a potent cocktail for consumer spending.”A multi-month burst of consumer spending is expected to kickstart an economy that is expected to boom this year. The strongest growth is expected in the current quarter, which some economists say could see gross domestic product growth of more than 10%. That compares to the second quarter of last year when the economic shutdowns resulted in a collapse in the economy, with GDP decreasing 33.3%.Economists expect March retail sales rose a consensus 6.1%, or 5.3% excluding autos, according to Dow Jones. That compares to a sales decline of 3% in February, when severe winter weather resulted in a freeze across the south with massive power outages in Texas.Zoom In IconArrows pointing outwardsBut some economists say that spending data shows that sales could be even stronger. “It’s going to be up over 10%.Other than May of last year, it will be a record. There’s a lot of vehicle sales, higher gasoline prices, and then everything else,” said Mark Zandi, chief economist at Moody’s Analytics. “The restaurants are coming back. Clothing stores are up a lot. This is the retail reopening and that’s going to be reflected in the number.”Zandi said he expects retail sales rose 10.3% over February, and should be up 28% from year ago levels.”It’s reopening. It’s stimulus money. It’s weather payback, all conflating to be a gangbuster number,” said Zandi. “I think we’re going to see very strong numbers going forward. We’re off and running.”Zandi said business-to-business spending data supports his view. According to software firm Cortera, recently acquired by Moody’s, spending by all businesses in March was up 14.5% over last year, while spending by retailers was up 9%.Zandi said retailers and other businesses, like airlines, that benefit from a reopening economy did better in March than those businesses catering to working at home for the first time since the beginning of the pandemic.”Spending increased in most retail segments, with restaurants, furniture stores, clothing stores, gas stations, and sporting goods stores leading the charge,” according to Cortera. “Spending declines were seen in food & beverage stores as consumption shifted back to restaurants and bars.”Cortera, which tracks about $1.7 trillion of business spending, found that spending was 14.6% lower than last year for food and beverage stores, but food and beverage services, like bars and restaurants increased, spending just under 20% more than last year.Bank of America’s credit card spending also showed a surge in late March. BofA economists said there was a 67% surge in card spending over the seven day period ended April 3. The spending in that period was also 20% higher than the same period of 2019.”Animal spirits have turned remarkably higher with the conference board measure of confidence increasing to 109.7 in March, the biggest one-month gain since April 2003,” noted Bank of America economists. “Consumers are able to ramp up spending while still increasing savings – we think the saving rate will be about 20% – if not higher – in March.”NatWest chief U.S. economist Kevin Cummins said he expects a 10% gain in March sales and concedes it’s on the high end of forecasts. He expects sales should be boosted by the $1,400 stimulus checks sent to individuals, which started reaching bank accounts around March 17.”The back end of the month should be very strong,” he said. “If you look at auto sales, that was the highest level in four years. It seems like restaurants are getting more crowded, with outdoor seating.”The range of forecasts is unusually wide, with economists expecting 4% to 11.5% gains. That means the market reaction could be volatile.”Normally, prepandemic, the range might be 1 percentage point [apart], maybe 2,” said Michael Schumacher, Wells Fargo diretor of rates.Bank of America economists said the retail sales data could kick off another debate, about whether business will pick up spending to lift the economy after surging consumer spending.”With the data confirming consumer strength, the debate now shifts to the next stage of the recover,” note Bank of America economists. “Will this prove to just be a sugar high with a painful hangover or will it kick-start a positive feedback loop which leads to a sustainable recovery? We expect the latter but it will depend on a positive response from Corporate America.” More

In this articleAEOA shopper walks past an American Eagle store in the mall.Tim Boyle | Getty Images News | Getty ImagesAmerican Eagle Outfitters announced Wednesday that its business is pacing ahead of its expectations for the fiscal first quarter, as stimulus checks and pent-up demand are fueling sales of jeans, dressier tops and leggings.Revenue is on track to top $1 billion, it said. Analysts had been calling for American Eagle to earn 23 cents a share on sales of $904.1 million, according to a poll by Refinitiv. The company didn’t provide a fresh earnings estimate.Its shares jumped more than 8% in after-hours trading.The tween-and-teen apparel retailer said demand for goods at both its namesake American Eagle business and at Aerie — which sells comfortable lingerie and loungewear for young females — has been stronger than expected. That’s in part due to external factors, including economic stimulus, renewed consumer optimism and bottled-up demand from customers, it said.American Eagle’s denim business has been particularly strong, and shoppers have also started buying more tops, Chief Executive Jay Schottenstein said during a phone interview with CNBC.”There’s a lot of money out there,” he said. “We think the environment for the next few years, it’s going to be a very good environment. … People will want to spend [and] people are going to want to go out and they’re going to want to get back to what was normal before.”The trends offer another sign that people are ready to dress up again, after months of sitting around the house during the Covid pandemic in sweatpants or pajamas. Other retailers, such as Levi’s, have recently made similar comments about the popularity of denim, especially among Gen Z customers.Within Aerie, which has been growing much faster than American Eagle, the momentum for leggings has not slowed down, said Jennifer Foyle, its global brand president. Retailers such as Lululemon and Gap’s Athleta have benefited from the leggings boom, too. These bottoms are clearly not just for yoga anymore, as more and more women are wearing them basically everywhere.Last summer, in the thick of the health crisis, Aerie carved out a new athleisure brand called Offline by Aerie. The brand sells printed sports bras, jogger pants, graphic tees and other active gear. Although it is sold in Aerie shops, American Eagle plans to open around 25 to 30 Offline by Aerie shops this year.Even though the field is crowded for athleisure, Foyle said the size of the market is huge. “I think there’s room for some market share for us to take,” Foyle said.She added that the company is still on track to double its Aerie business to $2 billion in annual sales by 2023.Additionally, American Eagle said that its profit margins have been improving thanks to it selling more items at full price and relying less on promotions.American Eagle shares are up more than 270% over the past 12 months. It has a market cap of $5.5 billion, which is bigger than its rival and Hollister owner Abercrombie & Fitch.American Eagle is set to present Thursday in a virtual fireside chat at J.P. Morgan’s 7th annual retail roundup. It’s expected to report financial results for the quarter ending May 1 on May 26, after the market closes. More

In this articleAMCPeople wearing protective face masks walk by the closed Cinerama Dome theatre during the coronavirus pandemic on April 18, 2020 in Los Angeles, California.David Livingston | Getty Images Entertainment | Getty ImagesTowering 75 feet tall, the Pacific Cinerama Dome on Sunset Boulevard in downtown Los Angeles is a fixture in the community. On Monday, its owner, Decurion, announced that it would not reopen after shuttering due to the coronavirus pandemic.The decision by the company, which owns the Pacific Theatre and ArcLight Cinema chains, was a crushing blow to a town built on the box office. While Decurion’s portfolio of theaters includes locations in Boston, Chicago and Washington, D.C., it is the Los Angeles-based theaters that are, perhaps, its most treasured.”For the Los Angeles area, the Pacific’s ArcLight Cinemas are not just theaters, they are movie house destinations that offered a complete and curated moviegoing experience,” said Paul Dergarabedian, senior media analyst at Comscore.The crown jewel of Decurion’s theater collection is the ArcLight Hollywood multiplex, with the attached Pacific Cinerama Dome. The iconic theater, with its dome consisting of more than 300 pentagonal and hexagonal panels, has hosted countless Hollywood movie premieres over the span of nearly 60 years. Its closure has led to an outpouring of grief on social media.”It seems to me that there are two separate questions to be raised: What happens to the historic Cinerama Dome in Hollywood — and, as an extension, the ArcLight multiplex it sits next to? Also, what happens to the other ArcLight Cinemas and Pacific Theatres locations?” said Erik Davis, managing editor of Fandango.Decurion did not detail the reasons behind its decision to shutter roughly 300 screens, only saying in a statement earlier this week that the company had “exhausted all potential options” and that it doesn’t have a “viable way forward.” That statement didn’t disclose its plans for either the Pacific or ArcLight locations.Representatives for Decurion did not respond to CNBC’s request for comment.The lack of clarity has led some to speculate that the company is using these closure announcements to drum up investments or to coax potential buyers. Decurion does own some of its cinema properties but leases the rest from landlords. Since the company is private, it is unclear what its debt situation is or what its real estate portfolio looks like.The loss of a monument to cinemaMovie lovers and prominent filmmakers collectively grieved the closure of the ArcLight Hollywood and Pacific Cinerama Dome on social media, sharing memories of visiting the venue over the years.For many, this particular theater was the place where they fell in love with cinema.Built in only 16 weeks, the Cinerama Dome was designed by the same firm that worked on the Music Center, Capitol Records Building and the Beverly Hilton. It celebrated its grand opening in 1963 with the premiere of “It’s a Mad, Mad, Mad, Mad World.”The landmark was originally created as a prototype for a new kind of cinema experience where three 35mm projectors would run simultaneously on a large curved screen. However, very few theaters were built in this style in the U.S., making the Cinerama Dome a rare example.It was declared a historic monument in 1998. So fans of the famed location can rest easy, it won’t likely be torn down.What becomes of the Cinerama Dome?”At this time, reports indicate that nothing is up for sale yet, and so it’s difficult to say what will ultimately happen,” Davis said. “That Hollywood location, and specifically the Cinerama Dome, is rich with history, and among the most iconic locations in Los Angeles. It’s also one of the highest performing theaters in the country. It certainly feels like that location will be saved, if it is indeed in need of saving.”Real estate experts say Decurion could seek to sell all of its owned theaters as part of a single bundle or sell off locations individually. It depends on the company’s debt situation and how many theaters are completely paid off, said Mark Hunter, managing director of retail asset services at CBRE.Potential buyers for any of Decurion’s owned cinema locations will likely be other movie theater companies or groups that are seeking to get into the theatrical business, he said. After all, it is incredibly expensive to retrofit movie theaters into other retail spaces due to their design. Non-cinema businesses would likely have to demolish the location and rebuild on top of it if they wanted to use the space for any other purpose.It’s unlikely at this time that a major movie theater chain would seek to buy out Decurion’s locations, as the pandemic has crippled the industry and led its most stalwart brands toward bankruptcy. AMC Entertainment only narrowly escaped filing for Chapter 11 in the last year and other chains are still ramping up operations at limited capacity.Adding debt by purchasing Decurion’s theaters, particularly when the pandemic is still ongoing, would likely garner the ire of a company’s shareholders. Although, there is still a possibility a company could swoop in and acquire the brand.Any mall locations are likely owned by other landlords and would be rented to another theater group.Movie theaters, whether they are part of a mall or a standalone site, are anchors in the retail world. They drive traffic to stores and restaurants, said Chris Wilson, national agency lead for retail at JLL.As more vaccinations are administered and local restrictions are loosened, Wilson predicts, the movie theater business will see a significant boost. At present, he pointed to the health club industry. JLL has seen a surge in new leases for fitness centers, a business that was also hit hard by the pandemic.”I believe that that same level of optimism will show up for theaters,” Wilson said.If Decurion sells off its assets and doesn’t seek investments to revitalize its business, the Cinerama Dome and adjoining ArcLight Hollywood location would likely be a prime target.”I suspect that you’ll see a group in time that will find a way to resurrect it,” said Eric Schiffer, CEO and chairman of Patriarch Organization, a private equity firm.Schiffer, who also is chairman of Reputation Management Consultants, sees this particular building as an opportunity for an investor group looking to own a cinema, or even a chance for a prominent filmmaker to buy a piece of history. Other possibilities are that a streaming service or studio could scoop up the property to use it for premieres.”It’s not the end of the ArcLight,” he said. “I think you’ll see someone step up for these assets.”Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Fandango. More

An American airlines Airbus A321-200 approaches Washington Ronald Reagan National Airport (DCA) in Arlington, Virginia on February 24, 2021.Daniel Slim | AFP | Getty ImagesAmerican Airlines is expanding its summer schedule in a bet that the resurgence of travel demand will continue as more people get vaccinated.This summer, American plans to fly more than 90% of the domestic schedule and 80% of the international schedule it operated during the peak season of 2019, adding 150 new routes for the peak vacation season. American said its first-quarter capacity was down more than 43% compared with the same period of 2019.Airlines eager to capture a rebound in travel are weighing how much capacity to deploy this summer. Demand has climbed as more people have been vaccinated against Covid-19, travel restrictions ease and more attractions, like Disneyland, prepare to reopen. Airline executives will start briefing investors on their strategies this week, when Delta kicks off quarterly reporting on Thursday.”Throughout the pandemic, our trademark has been to build a schedule based on what customers tell us they want and need,” Brian Znotins, American’s vice president of network planning, said in a news release. “And today, they are telling us they’re eager to get back to travel.”With international travel still depressed, American plans to use some of its Boeing 777s widebody aircraft on domestic flights to New York and Los Angeles from its Miami hub. American and competitors like United and Delta have added flights to destinations with outdoor attractions like beaches and mountains, as travelers seek vacations where they can physical distance from others. More

In this articleMRNAModerna hopes to have a booster shot for its two-dose Covid vaccine available in the fall, CEO Stephane Bancel told CNBC on Wednesday.”I want to make sure there are boost vaccines available in the fall so that we protect people as we go into the next fall and winter season in the U.S.,” Bancel said in an interview on “Squawk Box.”Last month, the National Institutes of Health began testing a variety of offerings from Moderna to use as a third shot designed to boost immunity protection as concern grows about emerging variants — including the one first discovered in South Africa, also known as the B.1.351 variant.The Food and Drug Administration’s approach to authorizing modified Covid vaccines is similar to that of annual flu vaccines, meaning they could be cleared for emergency use without lengthy clinical trials.Massachusetts-based Moderna hopes to submit data to regulators within a few months, Bancel added. “Our goal is to work really hard to get this ready before the fall,” he reiterated.Bancel’s comments came one day after Moderna announced its existing vaccine was more than 90% effective at protecting against Covid up to six months after the second dose. It was more than 95% effective against severe disease within that same time frame, the biotech firm said in its update, which could bring it closer to obtaining full regulatory approval.There are currently 453 reported cases in the U.S. involving the B.1.351 variant, according to data compiled by the Centers for Disease Control and Prevention. That variant, in particular, has concerned public health experts. It’s been shown to reduce the effectiveness of existing Covid vaccines, including from Moderna.Bancel on Wednesday reiterated his belief that annual Covid vaccine boosters will be commonplace going forward, saying the coronavirus “is not going away” and it’s “not leaving the planet.””I anticipate in the next year or so, we’re going to see a lot of variants. But as more and more people get vaccinated or naturally infected, the pace of the variant is going to slow down and the virus is going to stabilize like you see with flu,” he said.Eventually, Bancel added, Moderna hopes to be able to have a two-in-one vaccine of sorts that protects against seasonal flu and Covid. The company in September announced its intentions to make a flu vaccine.”What we’re trying to do at Moderna actually is to get a flu vaccine in the clinic this year and then combine our flu vaccine to our Covid vaccine so you only have to get one boost at your local CVS store … every year that would protect you to the variant of concern against Covid and the seasonal flu strain,” Bancel said.”We believe we can get to a high efficacy flu vaccine,” he added. On any given year, current flu vaccines are roughly between 40% and 60% effective, according to the CDC.Bancel also weighed in on U.S. regulators recommending Tuesday that states pause using Johnson & Johnson’s single-shot Covid vaccine after concerns arose around rare but severe blood clots developing in recipients.The move shows “the FDA will not hesitate to be very cautious to analyze the data, to take the time required to do so, to protect the safety of the American people,” he said, contending that the way regulators are handling the J&J situation would reduce vaccine hesitancy not increase it. More