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    'We really want exposure to the consumer' as economy stages powerful recovery, Wells Fargo's Chris Harvey says

    Wells Fargo Securities’ Chris Harvey is building a major part of his strategy on a consumer comeback.From hotels to casinos to restaurants, many of this year’s winning trades will involve spending outside the home, the firm’s head of equity strategy predicts.”We really want exposure to the consumer,” Harvey told CNBC’s “Trading Nation” on Wednesday. “We haven’t seen the consumer this strong coming out of a recession in a long, long time.”Harvey, who’s in the V-shaped economic recovery camp, believes it’s time to boost exposure to consumer plays. He contends a ramp-up in Covid-19 vaccinations will help boost the consumer services group, which he upgraded to overweight from neutral last month.Consumers “want to spend money on themselves, and they want to spend money on their family. That we think is a very, very potent cocktail, especially when you throw in monetary and fiscal policy,” said Harvey.While Harvey focuses on consumer plays, he’s curbing his enthusiasm for early cycle trades. He believes bullish activity surrounding machinery, semiconductors, metals and small caps is in the late innings.”Last year we got real positive on risk, on deep, deep value, small caps,” he said. “They’ve all performed incredibly well, and even better than we ever would have expected.”Now, he wants to focus on groups that are less picked-over and haven’t performed as well relative to the overall market.”Consumers are going to spend a lot of money on services,” said Harvey. “A lot of these names haven’t performed as well as the rest of the cyclical trade has year to date and over the last 12 months.”According to Harvey, shifting money out of growth stocks, which are under pressure from rising Treasury yields, is a prudent way to get exposure.”You want to continue to lighten up on growth and momentum-type stocks — especially on strength,” he said. “These are the areas … where a lot of the stress is going to occur over the next couple of weeks, next couple of months.”His S&P 500 year-end price target is 3,850, which implies a 1% drop from Wednesday’s close.”You could have 12 months ago closed your eyes and woken up and [had] great performance,” Harvey said. “We don’t think that’s going to occur over the next 12 months.”Disclaimer More

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    United Wholesale Mortgage says its crosstown war with Quicken Loans is paying off

    The CEO of United Wholesale Mortgage on Wednesday defended a recent controversial move in a crosstown battle with rival Quicken Loans.UWM earlier this month said it would no longer work with any mortgage brokers who also conducted business with Quicken and another competitor, Fairway Independent Mortgage in Wisconsin.”I know how different people want to portray it, but the decision was not about doing things exclusively,” CEO Matt Ishbia said in an appearance on CNBC’s “Mad Money.”Ishbia told the show’s host Jim Cramer that the Pontiac, Michigan-based company gained an upper hand in the ultimatum: Out of 12,000 brokers, not even 500, chose to continue partnering with Quicken, he said.Quicken, the Detroit-based lending giant owned by Rocket Companies, is the nation’s top mortgage lender, followed by UWM. Ishbia claims Quicken Loans is stunting growth in the mortgage sector, though he said he does not accuse the company of illegal practices.”The reality is, brokers are all in,” Ishbia said. “They understand that Matt and UWM is here to protect the broker channel and consumers because consumers get lower rates when they go through a broker. That’s not an opinion, that’s a fact.”Meanwhile, Rocket tells the Wall Street Journal that its lending platform has grown market share since UWM announced the move. Fairway, for its part, told National Mortgage News that UWM’s agreement with brokers limits their opportunity to find lower interest rates.Questions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More

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    General Mills CEO says company takes food safety very seriously after shrimp tail claims go viral

    General Mills CEO Jeff Harmening said that the company takes food safety very seriously after a customer’s claim that he found shrimp tails in his Cinnamon Toast Crunch cereal went viral.”It is amazing the amount of news coverage that this story has generated. I must admit that some of it is kind of humorous, but what I want you to know and your viewers to know is that we take food safety very seriously at General Mills,” Harmening told CNBC’s Sara Eisen on “Closing Bell.”TV writer and podcast host Jensen Karp tweeted on Monday that he found several shrimp tails in a box of the General Mills cereal.Karp also claimed that the other box of Cinnamon Toast Crunch that he purchased appeared to include dental floss and was taped at the bottom.”Based on the information that we have right now, it is highly unlikely that this occurred at a General Mills facility,” Harmening said.Harmening added that General Mills is working with Karp, although the relationship appears to be contentious based Karp’s tweets. Karp tweeted earlier Wednesday that he’s waiting for the envelope from General Mills to arrive in order to send them back pieces.Karp told Yahoo Entertainment that he wants General Mills to pull the cereal from shelves to protect consumers have might have shellfish allergies or keep kosher.Cereal sales received an unexpected lift over the last year from the coronavirus pandemic after years of stagnant growth. Consumers who are working remotely have returned to old favorites, like Cinnamon Toast Crunch or Cheerios. Earlier on Wednesday, General Mills reported that U.S. cereal sales rose 9% in its most recent quarter.Shares of the company dropped 4% in afternoon trading after it fell short of Wall Street’s expectations for its fiscal third-quarter earnings. The stock has risen 21% over the last year, giving it a market value of $35.9 billion. In addition to its booming cereal business during the pandemic, consumers have also been using more of its baking products and buying more of its Blue Buffalo pet food. More

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    IRS had a backlog of nearly 12 million paper tax returns by Christmas, says watchdog

    Samuel Corum/Bloomberg via Getty ImagesThe IRS had a backlog of almost 12 million paper tax returns from individuals and businesses as of Christmas, according to a report from the Treasury Inspector General for Tax Administration.As a result, many taxpayers may not have gotten refunds owed from last year’s filing season, the watchdog said in its briefing, which was publicly released Wednesday.The Covid pandemic hobbled the agency’s ability to receive, sort, distribute and process paper tax returns, according to the report and agency officials.Much of that process, which requires manual entry of data from tax returns, for example, isn’t conducive to telework, they said.More from Personal Finance:IRS makes more people eligible for $10,200 unemployment tax breakAmericans may want to stick to the original tax deadlineRetirement savings can help you get a $1,400 stimulus check”In 2020, the IRS found itself in uncharted waters, as did the entire nation,” Kenneth Corbin, commissioner of the wage and investment division at the IRS, wrote in response to the findings.”The Covid-19 pandemic presented some of the greatest challenges to the IRS in its history, both in terms of being able to carry out our mission and in protecting the health and safety of taxpayers and our own workforce,” he added.Corbin also urged taxpayers to file an electronic tax return this year, given persistent backlogs.”We are hopeful the benefits of electronic filing have been reinforced with the public and that the experience of 2020 encourages traditional paper return filers to convert to electronic filing,” he said in his response, dated March 8.Paper delaysThe processing delay represents a big increase relative to the prior year.By mid-November, the IRS had a backlog of 4.7 million individual paper tax returns that needed processing, according to the report. By comparison, that backlog was just 183,000 returns at the end of 2019.The IRS says it has made “significant progress” in reducing that logjam. It had 2.4 million individual tax returns received prior to 2021 in the processing pipeline as of March 5, according to the agency. The IRS didn’t respond to a request for comment on the progress to date on reducing the logjam.Now, $1,400 stimulus checks and insufficient staffing may hamper the tax collector’s ability to quickly address the backlog as this year’s tax season is underway, according to the report. Last week, the IRS extended the filing season to May 17 from April 15.This may delay refunds and some stimulus payments for individuals, the report said.”Of particular concern is the continued challenges in hiring sufficient staff needed to both continue to work backlog inventory and process Tax Year 2020 tax returns at the same time,” it said. “This could further affect taxpayers awaiting refunds and additional Recovery Rebate Credits associated with these Tax Year 2020 returns.”The IRS temporarily scaled back operations due to the pandemic by closing Submission Processing and Taxpayer Assistance Centers, discontinuing face-to-face operations and suspending telephone help lines, Corbin said.Closing Submission Processing Centers hindered the agency’s ability to process incoming mail such as paper tax returns, some payments and correspondence in a timely manner, he said.The IRS shifted duties remotely to the extent possible, and all but 1,000 of the 11,000 Submission Processing Center employees had reported for in-person duty as of Feb. 24, Corbin said.At the same time, the agency was also tasked with issuing prior rounds of pandemic relief, like $1,200 and $600 stimulus checks. The IRS issued more than 168 million CARES Act payments totaling $280 billion as of Dec. 18, Corbin said.The IRS is also seeking to hire additional staff for the 2021 tax season and to alleviate bottlenecks, he added. More

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    Yellen supports banks’ share buybacks. Sen. Warren wants BlackRock designated too big to fail

    Treasury Secretary Janet Yellen speaks during a virtual roundtable event with participants from local Black Chambers of Commerce on February 5, 2021 in Washington, DC.Drew Angerer | Getty ImagesBanks have improved their capital positions and should be allowed to continue to buy back their own shares, Treasury Secretary Janet Yellen said Wednesday.Regulators restricted share repurchases in 2020 for the biggest institutions in the country as a precautionary measure after Covid-19 reached pandemic status. After those banks passed a pandemic-focused stress test in December, the Federal Reserve said it would allow buybacks to resume, though with some restrictions.Yellen, speaking Wednesday before the Senate Committee on Banking, Housing and Urban Affairs, said she agreed with allowing the share buybacks.”I have been opposed earlier when we were very concerned about the situation the banks would face about stock buybacks,” Yellen said. “But financial institutions look healthier now, and I believe they should have some of the liberty provided by the rules to make returns to shareholders.”They are expected to do just that as the buyback restrictions ease in the first quarter of 2021.After financial sector companies repurchased just $80.7 billion worth of shares last year, that number likely will “significantly increase,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Of that total, $46.6 billion came in the pre-restriction period.In 2020, S&P 500 companies approved $519.7 billion in buybacks, a 28.7% decline from the previous year, according to Silverblatt.The largest banks still have restrictions as they won’t be able to return to shareholders more than they made in profits the previous year.The Fed’s move to allow buybacks to resume came after the largest institutions showed they could weather worst-case scenarios centered around the pandemic.Central bank officials have largely praised the industry’s Covid response and said the too-big-to-fail firms remain well capitalized.Warren targets BlackRockPedestrians walk with umbrellas in front of BlackRock Inc offices in New York, U.S.Scott Eells | Bloomberg | Getty ImagesHowever, Sen. Elizabeth Warren, D-Mass., said she doesn’t think regulators are going far enough in their oversight.Specifically, she suggested that BlackRock, the institutional money management giant and leading ETF provider, also should be designated as a “systemically important financial institution” or SIFI — that is, a firm that could put the economy at risk if it were to collapse.Warren and Yellen engaged in an at times contentious exchange over the issue, with Warren repeatedly interrupting the Treasury secretary as she sought to respond.BlackRock is the largest money manager in the world, with nearly $9 trillion in assets. The firm last year helped guide the Fed when the central bank was buying corporate bonds.Yellen said “it’s not obvious to me” that the “systemically important financial institution” designation would be “the correct tool to address” risks posed by asset management firms like BlackRock.She did say that examining the issue will be part of the work she does with the Financial Stability Oversight Council in the coming days.”I think it’s important to designate institutions whose failure would pose a material risk to financial stability,” Yellen said.”I understand that when the stock market is going up, it can be easy to ignore risks that can be building up in the system,” Warren countered.”That was the mindset of regulators that led up to the 2008 crash and that is how taxpayers ended up on the hook for a $700 billion bailout of the giant banks,” she added. “When the party is going strong, it’s the job of regulators to take away the punchbowl.”A BlackRock spokesman said the firm already is heavily regulated but should not come under the same rules as banks.”We support financial regulatory reform that increases transparency, protects investors and facilitates responsible growth,” the spokesman said.”The past two administrations in the U.S. and numerous global regulators have studied our industry for a decade and concluded that asset managers should be regulated differently from banks, with the primary focus being on the industry’s products and services,” the statement continued. “BlackRock is not a bank, and as an asset manager, we are a heavily regulated company.” More

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    AstraZeneca missteps threaten to further erode trust in Covid vaccine as company seeks U.S. approval

    A medical syringe and vials in front of the AstraZeneca British biopharmaceutical company logo in this illustration photo taken on 18 November 2020.STR | NurPhoto | Getty ImagesU.S. health officials released a bizarre statement early Tuesday that AstraZeneca may have based its Covid-19 vaccine trial results on outdated information.The company’s fumble was just the latest “self-inflicted wound” in a series of missteps that threatens to erode public trust in its shot, experts on public health and vaccines told CNBC.On Monday, AstraZeneca announced the long-awaited results of its phase three clinical trial of the Covid-19 vaccine it developed with the University of Oxford, saying it was 79% effective in preventing symptomatic illness and 100% effective against severe disease and hospitalization. The analysis was based on 32,449 participants across 88 trial centers in the U.S., Peru and Chile, according to the company.Results questionedThe National Institute of Allergy and Infectious Diseases threw the accuracy of those results into question early Tuesday when it said it was informed by the data and safety monitoring board overseeing the trial that the U.K.-based company may have included information in its U.S. vaccine trial results that provided an “incomplete view of the efficacy data.”CNBC Health & ScienceRead CNBC’s latest coverage of the Covid pandemic:AstraZeneca missteps threaten to further erode trust in Covid vaccine as company seeks U.S. approvalUK sets out plan to prevent future pandemics and ‘external’ health threats   As the pandemic fades, some Americans have fallen in love with their ‘Covid caves’ and are anxious about a ‘return to normal’Covid live updates:  Latest news on the coronavirus pandemic”We urge the company to work with the DSMB to review the efficacy data and ensure the most accurate, up-to-date efficacy data be made public as quickly as possible,” the NIAID said in a statement.NIAID Director Dr. Anthony Fauci said the DSMB, an independent group of experts who oversee U.S. clinical trials, raised concerns with the agency because it felt the results in AstraZeneca’s press release looked more favorable than more recent data from the vaccine study had shown, according to Stat News. “I was sort of stunned,” Fauci told Stat, adding that the agency could not remain silent.Unusual statementThe statement from the NIAID, which is part of the National Institutes of Health, was highly unusual, health experts said. The last time a statement from the U.S. agency caused such a stir was in September when one of its panels said there was “insufficient data” to show convalescent plasma works against the coronavirus, contradicting claims made by then-FDA Commissioner Dr. Stephen Hahn.AstraZeneca’s data hiccup is just the latest example in a series of blunders by the company that could affect people’s willingness to take the vaccine, which may be authorized for use in the U.S. as early as next month, said Isaac Bogoch, an infectious disease expert who has sat on numerous data and safety monitoring boards.The problems first began in September after the company failed to promptly notify Food and Drug Administration officials that it halted its trial globally after a participant in a study fell ill, according to The New York Times. AstraZeneca would later face more issues, including criticism after volunteers in its trials were given incorrect vaccine dosages and countries questioning whether its vaccine was appropriate for use in people over 65. Most recently, countries temporarily suspended use of the shot following reports of blood clots in some vaccinated people.Preventable flaws”This has been an endless roller coaster of what I could call preventable communication flaws,” Bogoch told CNBC. “You’ve got to be open, you’ve got to be honest, you’ve got to be transparent. That includes the good news that also includes the bad news.”Bogoch said the missteps aren’t good for public trust in the vaccine, adding, “We’re already dealing with pubic trust issues in the vaccine rollout [overall] and you have to have a public trust to have a successful public health initiative.”Dr. Leana Wen, a public health professor at George Washington University and a former Baltimore health commissioner, said AstraZeneca’s most recent hiccup could not only damage public trust in the company’s vaccine but trust in all Covid-19 vaccines.”At this point, it is really critical for there to be total transparency. We need to know what happened. Why does there seem to be this discrepancy in data?” Wen said. “I cannot recall seeing public disagreements like this. And that, again, raises red flags at a time where we can least afford it.”‘Rest assured’During an interview Tuesday on CNN, President Joe Biden’s senior advisor on the pandemic, Andy Slavitt, attempted to reassure Americans about the vaccines, saying, “the public should rest assured that nothing will get approved unless the FDA does a thorough analysis of this data.”When AstraZeneca’s vaccine goes through FDA review, the agency “will render a judgment on both what the data says, or what it’s saying, and also whether or not it will be approved. And so until that time, this is all just stuff that will happen in the background,” Slavitt said. “We believe that this transparency and the scientific independence is vital for public trust.”While Americans may not trust the vaccine, the data debacle is unlikely to impact the FDA’s review of the shot once the company submits it for emergency use authorization, said Lawrence Gostin, a law professor and director of the World Health Organization’s Collaborating Center on National and Global Health Law.Pivotal”Though, it certainly doesn’t help to have the NIH rebuke you right before you’re applying for authorization,” Gostin said, adding that the number of “self-inflicted wounds” the company has had is “astounding.” “AstraZeneca has got a good and safe vaccine that I think is going to help vaccinate America and the whole world.”Dr. William Schaffner, an epidemiologist who previously sat on two data safety monitoring boards for staphylococcal vaccines, said the FDA’s eventual authorization will be pivotal, not only for the U.S., but for other countries since AstraZeneca’s vaccine is cheaper and easier to distribute that its competitors.”That would resonate around the world and give other ministries of health confidence in this vaccine,” Schaffner said.Correction: This story has been updated to correct the dosing regimen of the AstraZeneca vaccine. It requires two doses. More

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    Stocks making the biggest moves after the bell: Rite Aid, RH & more

    Pedestrians cross a street in front of a Rite Aid store in Oakland, California.David Paul Morris | Bloomberg | Getty ImagesCheck out the companies making headlines after the bell on Wednesday:KB Home – Shares of the homebuilding company slid 3% after the company reported mixed fiscal first-quarter results. KB home reported earnings per share of $1.02 on revenue of $1.14 billion. Analysts polled by Refinitiv expected earnings per share of 92 cents on revenue of $1.21 billion.RH – The furniture retailer’s stock popped 8% after the company posted fourth-quarter results that topped analyst expectations. RH posted earnings per share of $5.07 on revenue of $813 million. Analysts surveyed by Refinitiv predicted earnings per share of $4.76 on revenue of $798 million.Rite Aid – Rite Aid shares plunged 16% on the news that the company cut its fiscal 2021 EBITDA. The company expects full-year EBITDA to range between $425 million and $435 million. That’s down from a previous guidance of $490 million to $520 million. Rite Aid added that a weak flu season hurt its same-store sales for the previous quarter. More

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    Harry Potter could make HBO Max a streaming giant, but JK Rowling and a deal with NBC stand in the way

    British author and screenwriter J.K. Rowling poses upon arrival to attend the UK premiere of the film ‘Fantastic Beasts: The Crimes of Grindelwald’ in London on November 13, 2018.TOLGA AKMEN | AFP | Getty ImagesWarnerMedia owns the rights to one of the most powerful franchises in the world, but a series of controversial statements from the woman who created it threatens to tarnish the brand irrevocably.The Harry Potter books have been a commercial success since they were first published in 1997 and become a key part of the cultural zeitgeist over the last two decades. However, author J.K. Rowling has faced public backlash in recent years for comments about transgender men and women that have been seen as transphobic and oppressive.These remarks have turned the very people who were once inspired by the Harry Potter novels and films against Rowling, leading to a temporary dip in book sales and threats of boycotts against future content.These fans, including members of the LGBTQ community, helped the franchise garner more than $9 billion at the global box office over the course of eight films and led to the sales of more than 500 million copies of Rowling’s Harry Potter books worldwide.There has been speculation for months that WarnerMedia would utilize the franchise to bolster sign-ups for its fledgling streaming service HBO Max. After all, Disney’s streaming platform Disney+ has seen great success from transitioning its blockbuster Star Wars and Marvel franchises into digital series.Rumors have circulated that AT&T-owned HBO Max could launch a TV show based on the books or turn Rowling’s co-written stage play “The Cursed Child” into a feature-length film.However, WarnerMedia in January quickly quashed reports that a show based on the beloved book series was coming to HBO Max.Still, WarnerMedia CEO Jason Kilar more recently reiterated the company’s support for Potter. “There’s this little thing called Harry Potter, which is one of the most beloved franchises,” Kilar said earlier this month during the Morgan Stanley Technology, Media & Telecommunications Conference in a session that was webcast. “And we’re incredibly thankful to be able to partner with J.K. Rowling and so I would argue there’s a lot of fun and potential there as well.”Kilar didn’t elaborate beyond that, but it stands to reason that WarnerMedia would seek to dive deeper into the Wizarding World. The company has already begun to explore this universe in the decades before Harry Potter’s birth in its Fantastic Beasts film series.Still, there are two things that may stand in the way of these plans — Rowling and a 2016 licensing deal that gave NBCUniversal the exclusive TV rights to the Harry Potter films.The Rowling conundrumRowling’s comments about transgender men and women surfaced in late 2019. The author expressed support for Maya Forstater, who had lost an employment tribunal over comments she had made on social media about transgender people.Forstater had disagreed with the U.K. government’s plans to allow people to self-identify their gender, as she does not believe that it is possible for a person to change sex. Her opinion is that men who undergo reassignment surgery are still men, even if the law recognizes them as women.”Dress however you please,” Rowling wrote in a tweet on Dec. 19, 2019. “Call yourself whatever you like. Sleep with any consenting adult who’ll have you. Live your best life in peace and security. But force women out of their jobs for stating that sex is real?”For people like Forstater and Rowling, there is a belief that gender identity is separate from biological sex and should not be given priority when it comes to lawmaking and policy. These with similar beliefs often call themselves gender critical feminists, fear that sex is being argued into nonexistence and that it will erode women’s rights.These feminists are often referred to as “trans-exclusionary radical feminists” or TERFs. This is usually used in a negative context.”Social media, despite inherent flaws, can serve as a mechanism to empower voices that have been traditionally disenfranchised, like trans individuals, and also to demand accountability for those in positions of power whose words may cause harm to groups with historically less power,” said Caty Borum Chattoo, executive director of the Center for Media & Social Impact at American University.Anti-government protesters hold signs calling out J.K. Rowling’s transphobic twitter comments as they take part in a Harry Potter themed rally in front of Democracy Monument on August 3, 2020 in Bangkok, Thailand. The pro-democracy protest called for demonstrators to “Cast the Patronus Charm to Protect Democracy”. This event was part of a string of protests.Lauren DeCicca | Getty Images News | Getty ImagesRowling addressed her opinions about sex and gender identity again in June 2020.”If sex isn’t real, there’s no same-sex attraction,” she wrote in one of several tweets on June 6. “If sex isn’t real, the lived reality of women globally is erased. I know and love trans people, but erasing the concept of sex removes the ability of many to meaningfully discuss their lives. It isn’t hate to speak the truth.”A few days later, after facing criticism, Rowling penned a 3,600-word essay on her personal website defending her comments. Rowling argued that trans women, in particular, erode women as a political and biological class, calling them “predators.”It was at this point that LGBTQ groups like GLAAD and the Human Rights Campaign, and even the actors who brought her work to life, began to speak out against her.The most notable voices were from the trio of Daniel Radcliffe, Emma Watson and Rupert Grint, who portrayed Harry Potter, Hermione Granger and Ron Weasley, respectively, in the original films.Grint reiterated his support for trans people in an interview with Esquire published last Friday.”I felt like I had [speak out] because I think it was important to,” he said. “Just out of kindness, and just respecting people. I think it’s a valuable group that I think needs standing up for.”Representatives from Rowling’s public relations team declined to comment, directing CNBC to speak with Warner Bros., but the company’s spokespeople didn’t immediately respond to CNBC’s request for comment.The financial costRowling’s reputation isn’t the only thing taking a hit, particularly, after she posted a number of comments that have been dubbed “anti-trans.”While overall fiction book sales rose 31.4% in June 2020, compared with May, Rowling’s titles only saw a 10.9% increase, according to NPD BookScan. A year prior, Rowling’s book sales were higher than the industry’s 33.2% rise. Other Harry Potter licensed titles that Rowling did not author also saw a slight drop, with sales increasing only 7.7% last June.Sales of Rowling’s books also dipped in July and August, but they rebounded in September. An analyst for NPD said the sales slump could have been due to Rowling’s comments or because of a seasonal shift in book sales.Ultimately, Rowling’s sales were up 16% in 2020, beating the performance of the juvenile fiction segment, which rose 11%, and adult fiction, which was up 6%.”So if the news had an impact, it was short,” the analyst said.People pose for photgraphers with copies of J.K. Rowlings new book ‘Harry Potter and the Cursed Child’ during an event to mark the book launch at a mall in Chennai, India on July 31, 2016.Arun Sankar | AFP | Getty ImagesStill, the controversy could come back to haunt AT&T. When it was reported that HBO Max might be making a new Harry Potter series, ardent fans, who traditionally would have clamored for more Wizarding World content were torn. As much as they would like to see additional content, they didn’t want to reward Rowling’s recent behavior with their wallets.”I actually talked to students about this particular issue a few months ago, right before I retired,” said Garland Waller, former director of the TV graduate program at Boston University. “They are very conflicted. They said things like, ‘Harry Potter was such a part of my life, but now I feel guilty if I watch any of the old HP movies.'”Fans worldwide have been outspoken about the betrayal they have felt from Rowling’s comments. Harry Potter is a story that inspired so many to embrace themselves, whether that be through accepting their own sexual orientation or gender identity or sharing their true selves with the people they love. Many have also pointed to the Harry Potter series as a catalyst for them to deal with bullies and grief.Social media is filled with comments from fans who now feel conflicted about supporting new content that would ultimately benefit Rowling financially.An unbreakable vowAside from Rowling, WarnerMedia also faces a challenge from a deal it struck with NBCUniversal in 2016.The agreement, worth in the north of $250 million, allows the Comcast-owned NBC to show all of the Harry Potter films on cable until 2025. WarnerMedia had previously had a similar deal with Disney’s ABC network.Because the deal was struck before HBO Max or Comcast’s Peacock launched, the two companies negotiated a pact that would allow them to share the digital rights to the films, a representative from WarnerMedia told CNBC. This allowed HBO Max to launch last May with all of the Harry Potter films in its digital library. Peacock then took over in October. But there appears to be some confusion about the digital rights going forward. WarnerMedia told CNBC that over the course of the next four years, the two streamers will continue to swap custody of the franchise.However, a representative from NBCUniversal says NBC solely owns the digital and TV rights to the films through 2025 and that there is no deal in place for shared custody of the digital rights. Instead, WarnerMedia would need to negotiate a new deal to get access to the digital rights of the films.CNBC has reached out to both companies for clarity on the matter.Daniel Radcliffe as Harry Potter in “Harry Potter and the Sorcerer’s Stone.”Warner Bros.”No doubt that AT&T’s WarnerMedia now regrets its decision to license Harry Potter for streaming by NBCUniversal until 2025 – a decision that reflected a short-term, immediate-gain minded ‘head in the sand’ mentality of streaming-first realities,” said Peter Csathy, founder and chairman of digital media consulting firm CreaTV Media.”WarnerMedia earned the immediate bucks, but gave up the long-term marketing punch for HBO Max that only Harry Potter could have given,” he said. “They will not make that same mistake twice. Once NBCU’s license is over in 2025, WarnerMedia will never let go of the Harry Potter franchise ever again. Harry Potter will play the leading role in WarnerMedia’s overall long-term corporate strategy.”The next stepWaller noted that people feel hurt by Rowling’s comments and want the author and WarnerMedia to make “an honest effort to do the right thing.”That could be through donations to trans organizations, bringing on a trans showrunner or producer to oversee future content, ensuring that production jobs go to trans individuals as part of diversity initiatives, and having continued and frank discussions about diversity.”My experience with students these days is that they spot a fake a mile away,” Waller said. “They are tired of corporate types blathering on about how open they are and how much they care. If it’s a superficial, lame effort, the powers that be will be pilloried. Authenticity is the key.”It is unlikely that Rowling’s recent commentary will tarnish the Harry Potter brand for too long, Csathy suggested, calling it a “rare, timeless, enduring” franchise that will ultimately eclipse its creator.”Yes, some fans understandably will be turned off forever due to J.K. Rowling’s rants – and tune out forever because of it – but the vast majority of Harry Potter fans not only will stick with the franchise,” he said. “They will crave more. And Warner Bros. will happily give it to them, inspired by Disney and its burgeoning multichannel vision for Star Wars.”Disclosure: Comcast is the parent company of NBCUniversal and CNBC. In addition to holding the exclusive TV rights to the Harry Potter films, NBC also operates Harry Potter-theme lands at its amusement parks. More