Raphael Stevens

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    250 CEOs and execs express 'alarm' over what could become the largest tax hike in New York history

    New York state Gov. Andrew Cuomo speaks at a news conference on September 08, 2020 in New York City.Spencer Platt | Getty ImagesA group of 250 CEOs and business leaders sent a letter to New York’s governor and legislators expressing “alarm” at what they say could become the largest spending and tax increase in the state’s history.The letter, delivered to Gov. Andrew Cuomo and Democratic members of the state Assembly and Senate, urged politicians to postpone any tax increases until after the state and New York City have more fully recovered from the Covid pandemic and workers return. As employers of more than 1.5 million people, the executives said many of their workers have moved out of the city and if taxes increase “they will vote with their feet.””Only about 10% of our colleagues are in the office and prospects for the future of a dense urban workplace are uncertain,” the letter said. “Many members of our workforce have resettled their families in other locations, generally with far lower taxes than New York, and the proposed tax increases will make it harder to get them to return.”Signers of the letters include JPMorgan Chase CEO Jamie Dimon, BlackRock Chairman and CEO Larry Fink, Pfizer Chairman and CEO Albert Bourla, Citigroup CEO Jane Fraser and JetBlue CEO Robin Hayes. The group said “significant corporate and individual tax increases will make it far more difficult to restart the economic engine and reassemble the deep and diverse talent pool that makes New York the greatest city in the world.””This is not about companies threatening to leave the state; this is simply about our people voting with their feet,” the letter said. “Ultimately, these new taxes may trigger a major loss of economic activity and revenues as companies are pressured to relocate operations to where the talent wants to live and work. This is what happened to New York during the 1970s, when we lost half our Fortune 500 companies, and it took thirty years to recover. “Cuomo’s office did not immediately respond to a request for comment.Democratic members of the state Assembly and Senate have proposed a series of tax increases on companies and high earners that could top $6 billion a year. They say the pandemic increased inequality in New York and higher taxes on companies and high earners are needed to fund social programs and reduce the wealth gap.Yet New York’s budget picture has improved recently. The state is set to receive $12.5 billion in unrestricted funds from the federal stimulus bill and New York State Budget Director Robert Mujica said the stimulus funds and stronger-than-expected tax revenues would allow the state to avoid planned budget cuts.The group said it understands the “urgent human needs” and inequities exposed by the pandemic but that proposed tax increases or changes in policy should come after New York’s recovery.”Once we are on a path toward restoring more than one million jobs and thousands of small businesses that New York has lost in the past twelve months, there may well be need to raise new revenues to fill the gaps in our education, health and social welfare systems,” the letter said. Rebecca Bailin, campaign manager for Invest in Our New York, an effort to fund social programs by taxing the wealthy, said the letter was “250 wealthy people in their homes pleading for status quo.” More

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    Fed sets up panels to examine risks that climate change poses to the financial system

    The Federal Reserve has taken another step forward in efforts to ensure that the financial system is protected against climate risks.As the central bank turns its attention increasingly toward the matter, the Fed has created a Financial Stability Climate Committee and a Supervision Climate Committee. The panels will focus on “the potential for complex interactions across the financial system,” Fed Governor Lael Brainard said in remarks Tuesday.”Climate change and the transition to a sustainable economy also pose risks to the stability of the broader financial system. So a second core pillar of our framework seeks to address the macrofinancial risks of climate change,” Brainard added.The Supervision Climate Committee will focus on identifying risks and putting together a program to address them. The Financial Stability Climate Committee will address “macroprudential risks” for how climate could pose systemic risks to the institutions the Fed supervises.While taking on the climate issue represents a broadening of the Fed’s role in supervising banks and other financial institutions, officials have stressed the potentially damaging impact weather-related events can have on the system.The central bank had begun asking large institutions to assess the potential impact of climate and how they are prepared to weather significant events. Brainard was the first Fed official to start talking about the issue, saying in late 2019 that she wanted her colleagues to begin considering how climate events could impact monetary policy.”Financial market participants that do not put in place frameworks to assess and address climate-related risks could face significant losses on climate-sensitive assets caused by environmental shifts, by a disorderly transition, or both,” Brainard said.She added that “robust risk management” across a number of areas “can help ensure the financial system is resilient to climate-related risks and well-positioned to support the transition to a sustainable economy.”However, the movement to address climate change has received some pushback from congressional Republicans, who worry that the Fed is exceeding its existing mandate.At a hearing Tuesday before the House Financial Services Committee, Fed Chairman Jerome Powell faced questions about whether the central bank ought to be involved in the matter.For his part, Powell has indicated that climate change is not central to the Fed’s mission but is nonetheless important.”It’s really very early days of trying to understand what this all means. It clearly can have longer-term implications for our economy, our financial system and the people who we all serve,” Powell said. “It’s early days, but we feel like we have the responsibility to start the process of understanding” the risk.Powell said the look into climate change’s impact is part of making sure institutions are “resilient” in the face of risks. More

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    Meet Bentley's new 208-mph Continental GT Speed for $275,000

    2022 Bentley Continental GT SpeedBentleyBentley Motors is not resting on its laurels following a record year of sales in 2020 for the famed British luxury carmaker.The Volkswagen-owned company on Tuesday unveiled the 2022 Continental GT Speed, a new performance version of its bestselling car nameplate. Bentley is calling the vehicle the “most capable, performance-focused Bentley ever.”The car is expected to cost about $274,900 when it goes on sale in the U.S. and Europe in the third quarter, followed by other markets in the fourth quarter.The two-door performance car features a 6.0-liter 12-cylinder engine rated at 650 horsepower and 664 foot-pounds of torque. The car runs 0-60 mph in 3.5 seconds. Its top speed is 208 mph, according to the automaker. The performance is slightly better than the Bentley Continental GT and Continental GT convertible with the same engine. It also features additional performance parts and tuning, officials said.2022 Bentley Continental GT SpeedBentley”The new Continental GT Speed represents the very pinnacle of performance grand touring,” Matthias Rabe, Bentley’s head of engineering, said in a release.The third-generation Continental GT Speed could be one of the last, if not the last, nonelectrified versions of the car. Bentley plans to exclusively offer plug-in hybrid electric or battery electric vehicles by 2026, and full electric vehicles only by 2030.”This is a big change for a company that’s grown up on 6.75-liter engines and W12 engines,” Bentley CEO Adrian Hallmark said during a media event. “We know that legislation, customer taste and the characteristics of battery-electric transmissions fit perfectly with the Bentley strategy, so we’re very excited about it.”2022 Bentley Continental GT SpeedBentleyHallmark said the company does not plan to have plug-in hybrid electric vehicles (PHEVs) with V-12 engines. He said V-8 engines combined with electrification are expected to achieve similar or better performance. PHEVs blend battery technology with internal combustion engines.Bentley sold 11,206 vehicles in 2020 — despite a seven-week closure of its factory in England during the height of the Covid-19 pandemic last spring. It topped the company’s 11,006-unit record in 2019. The Bentley Continental GT and Continental GT Convertible combined to account for 39% of its sales. More

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    After a big first year, expect smaller and choppier gains from the rest of this bull market

    One year ago Tuesday, a new bull market was born. Powered by unprecedented stimulus, stocks crawled out of their deep pandemic rout and started sprinting.History indicates that after big bear market declines, strong bull markets usually follow with gains carrying into a second year. However, investors should expect a smaller return over the next 12 months with a choppier road to get there.On March 23, 2020, the S&P 500 hit its bottom after the Covid crisis sent the equity benchmark tumbling 30% in 22 days, the biggest decline in such a short time. There have been five other bear-market sell-offs of 30% or more since World War II, and the market has been up every single time in year two with a near 17% return on average, according to data from LPL Financial.Zoom In IconArrows pointing outwardsStill, the first year’s comeback rally is usually hard to top. Only in the aftermath of the 1987 crash did stocks advance more during year two than year one, according to the data. Plus, the second year of a new bull market is prone to pullbacks with an average drawdown of 10%, LPL said.The S&P 500 has bounced about 80% from its March bottom, marking the best start to a new bull market on record, LPL data showed. This historic beginning could open the door for sophomore slumps and more volatility on the horizon.”Embarking on the second year of the current bull market could be just as exciting for investors, but it is easy to question if the strength will continue,” said Lindsey Bell, chief investment strategist at Ally Invest. “Think of the sports free agent who disappoints after scoring the nine-figure contract, or the sequel that just doesn’t live up to the original.”4% gain from here?Wall Street’s consensus year-end target for the S&P 500 stands at 4,099, representing a 4% gain from Monday’s close of 3,940.59, according to the CNBC Market Strategist Survey that rounds up 15 top strategists’ forecasts.Zoom In IconArrows pointing outwardsThe bull market was officially declared when the S&P 500 wiped out its pandemic losses and reached a record closing high on Aug. 18, then the beginning of a bull cycle was traced back to the market trough with the benefit of hindsight.Still, the “black swan” event of 2020 makes the current bull market one of a kind. Unlike the past few crises where the malfunction of the financial markets was the culprit, this time the downturn was triggered by a pandemic. And in contrast to the slow and steady recovery in the previous cycles, this rebound has been extraordinarily rapid, thanks to trillions of dollars of aid from Congress and the Federal Reserve.”This is the first bull market that any of us have been through where it’s been essentially manufactured by the government and by the Fed,” said Tom Essaye, founder of Sevens Report. “The huge stock gains didn’t come organically. They were essentially decreed by the government taking on enormous amounts of debt and deficits to spur economic activity. That does change the outlook going forward.”While history is on the market’s side, many believe that the lasting power of the new bull hinges on its ability to sustain the rally without massive amounts of stimulus. A new round of stimulus checks just started to hit Americans’ bank accounts this month. Once the stimulus boost fades, Wall Street is betting that corporate earnings will then do the heavy lifting and keep the lofty promises that stock prices have made.What are the risks?At its current level, the S&P 500 is trading more than 21 times projections for next year’s earnings, a level not seen since 2000, according to FactSet.Zoom In IconArrows pointing outwards”You are essentially transitioning from a government-infused rally to what we hope would be an organically economically infused rally where the economy reopens and that in turn just feeds on itself,” Essaye said.Meanwhile, inflation expectations are rising amid the historic economic reopening and massive stimulus, making it harder to justify stocks’ lofty valuations. The concern has manifested itself in the year-to-date underperformance of the tech-heavy Nasdaq Composite as higher inflation and interest rates erode growth-oriented companies’ future earnings.Another possible threat as this bull market ages could be higher tax rates with President Joe Biden set to propose higher duties to fund a grand infrastructure program. Goldman U.S. equity strategist David Kostin warned investors that Biden’s tax plans could curb S&P 500 per-share earnings by 9%.Biden has signaled his willingness to raise the corporate tax rate to 28% in a partial rollback of President Donald Trump’s 2017 tax overhaul. Meanwhile, Biden also endorsed upping the top marginal tax rate to 39.6% and taxing capital gains and dividends at the higher ordinary income tax rate.Wells Fargo believes that corporate tax rates will rise but fall short of Biden’s 28% proposal, and any damage from higher taxes will be softened by stronger corporate earnings.”We believe record-level economic growth and fiscal spending will support higher profits, potentially offsetting the drag from a higher tax regime,” Wells Fargo investment strategy analyst Ken Johnson said in a note.— With assistance from CNBC’s Nate Rattner More

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    Regal Cinemas to reopen in April, strikes new deal with Warner Bros.

    A view of the Regal Loews Cinemas movie theater in Times Square in New York City.Noam Galai | Getty ImagesAs lockdowns ease, Regal Cinemas will reopen in the U.S. after six months of being shuttered.The movie theater chain owned by Cineworld, is set to reopen around 500 locations on April 2 at limited capacity based on local guidelines. In most cases, attendance is capped at 25% to 50%.Regal Cinemas will showcase Warner Bros.’ film “Godzilla vs. Kong” during its first weekend open. The studio’s “Mortal Kombat” will play in its theaters starting April 16.Warner Bros. made the decision to release all of its 2021 films simultaneously in theaters and on its streaming service HBO Max. This meant that it had to renegotiate deals with each cinema company to ensure that its films would be played on the big screen.Cineworld is the latest theater chain to agree to these terms and to strike a long-term deal with the studio to ensure that after 2021 there will be a longer time period between a film’s release in theaters and its availability in the home market.Warner Bros. and Cineworld signed a multiyear agreement that begins in 2022 and stipulates that Warner Bros.’ features will have to play in theaters for 45 days before moving to streaming platforms or video on demand.In the U.K., the deal is for 31 days and can be extended to 45 for films that open with a high enough box-office gross.Regal Cinemas is the second-largest theater chain in the U.S., just behind AMC Theatres. The company had opted to shutter its movie theaters six months ago.At the time, Mooky Greidinger, CEO of Cineworld, told CNBC that closing locations in the U.S. and the U.K. was a way to stem the “bleeding.” He said his business lost less money by not operating.With local restrictions loosening in places like California and New York, it seems Regal has more confidence that its theaters will be able to thrive and become profitable once again.The two states together account for 21.5% of the total U.S. box-office receipts each year, according to data from Comscore.Movie theaters in New York City were permitted to reopen at limited capacity during the first week of March and cinemas in Los Angeles were granted permission to restart two weeks ago.New York City makes up nearly 24% of all of New York state’s total box office and Los Angeles accounts for around 30% of California’s. These cities have above-average ticket prices and population density, as well as being hubs of the entertainment industry, making them vitally important to the industry’s financial well-being.Having those two cities reopened for business gives studios the confidence to release major blockbuster films and movie theater operators the confidence to reopen locations. As of last weekend, around 51% of North American theater were open to the public, according to data from Comscore. More

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    Stocks making the biggest moves midday: Peloton, AstraZeneca, Boeing & more

    A Peloton Interactive Inc. logo on a stationary bike at the company’s showroom in Dedham, Massachusetts, U.S., on Wednesday, Feb. 3, 2021.Adam Glanzman | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading. Microsoft — Shares of the tech giant jumped about 1.5% as the company reportedly looks to buy Discord, according to Bloomberg. The chat app popular with video gamers is reportedly for sale for around $10 billion, according to people cited in Bloomberg’s article.Boeing — The industrial giant saw its stock dropping 2.9% during midday trading after the company reached a deal for a $5.28 billion two-year revolving credit agreement. Boeing was originally in the market for a $4 billion deal. The aerospace company still grapples with prolonged slowdown in commercial air travel triggered by the pandemic.ViacomCBS — Shares of the media company fell 6.7% after ViacomCBS announced that it was selling $3 billion combined of common and preferred stock. The company said it would use the money for general corporate purposes, including streaming video. ViacomCBS’s class B shares are still up nearly 150% year to date.Peloton — The at-home fitness start-up’s shares gained more than 2.6% after Bloomberg News reported a flurry of deal-making activities. Peloton recently bought three companies with technology and expertise in wearable devices, artificial intelligence, digital voice assistants, and interactive workout mats, Bloomberg reported.Discovery — Shares of Discovery dropped more than 4% after UBS downgraded the media company’s stock to sell from neutral. The Wall Street firm cited Discovery’s valuation after the stock nearly quadrupled over the past 12 months.Tencent — Tencent shares advanced more than 2% after the company announced a multiyear agreement with Warner Music. The companies also announced that they will launch a new joint venture record label. Separately, Tencent reported revenue of $1.28 billion for the fourth quarter, which was slightly shy of the the $1.29 billion analysts surveyed by FactSet were expecting.AstraZeneca — Shares of the drugmaker fell 2.7% after a Data Safety Monitoring Board raised concern that AstraZeneca may have included outdated information in its initial release of Covid-19 vaccine trial data. The company said that the figures it published on Monday were based on data through February 17.– CNBC’s Maggie Fitzgerald, Jesse Pound, Pippa Stevens, and Yun Li contributed reporting. More

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    Pfizer begins early stage clinical trial testing oral antiviral drug for Covid

    Pfizer said Tuesday it has begun an early stage clinical trial of an experimental oral antiviral drug for Covid-19.The New York-based company said the phase one trial of the drug – called PF-07321332 – is being conducted in the United States. The drug is part of a class of medicines called protease inhibitors and works by inhibiting an enzyme that the virus needs to replicate in human cells.Protease inhibitors are used to treat other viral pathogens such as HIV and hepatitis C.”Tackling the COVID-19 pandemic requires both prevention via vaccine and targeted treatment for those who contract the virus,” Pfizer’s chief scientific officer, Mikael Dolsten, said in a press release. “Given the way that SARS-CoV-2 is mutating and the continued global impact of COVID-19, it appears likely that it will be critical to have access to therapeutic options both now and beyond the pandemic.”The trial comes as Pfizer is also working on an intravenously administered protease inhibitor, known as PF-07304814. That drug is currently in a phase 1b clinical trial in patients hospitalized with Covid-19.A person walks past the Pfizer building in New York City, March 2, 2021.Carlo Allegri | ReutersPfizer already has an authorized vaccine in the U.S. with German drugmaker BioNTech, but health experts say the world will still need an array of drugs and vaccines to end the pandemic, which has infected more than 29.8 million Americans and killed at least 542,991 in a little over a year, according to data compiled by Johns Hopkins University.The company said preclinical studies have shown the oral drug, the first protease inhibitor taken by mouth for Covid-19 to be evaluated in clinical studies, demonstrates “potent” antiviral activity against the virus.Because it is taken by mouth, the drug could be used outside of hospitals for people who are newly infected with the virus. Researchers hope the medication will keep the disease from progressing and keep people out of the hospital.Pfizer said it will provide more details on the drug at the Spring American Chemical Society meeting on April 6. More

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    Chipotle will open its first Canadian restaurant since 2018 as it accelerates international expansion

    A chicken burrito, guacamole, bag of tortilla chips, and a drink at a Chipotle Mexican Grill Inc. restaurant in El Segundo, California.Patrick T. Fallon | Bloomberg | Getty ImagesChipotle Mexican Grill said Tuesday it will open a new restaurant in Canada for the first time since 2018 as it accelerates its Canadian expansion over the next 12 months.The new restaurant will open March 30. The burrito chain said it will add eight new locations in Canada, including one with a drive-thru “Chipotlane” for digital-order pickups. Chipotle operates 23 Canadian restaurants, most of which are concentrated in and around Vancouver and Toronto.”We will be experimenting with different location formats and restaurant designs throughout the country to gauge consumer preferences in the various markets,” CFO Jack Hartung said in a statement.Chipotle has taken longer than its peers to build its international presence as it focused on reviving U.S. sales after a series of foodborne illness outbreaks several years ago battered its business. Chipotle implemented new safety measures and added menu items to lure customers back. It has also built several locations with Chipotlanes.The company has more than 2,750 locations globally, most of which are in the U.S.Shares of Chipotle are up more than 5% this year, giving it a market value of more than $41 billion. The stock gained 1.6% on Tuesday. More