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    Can Germany’s economy stage an unexpected recovery?

    Michel the German, a national personification such as America’s Uncle Sam or Britain’s John Bull, is a sleepy fellow with a nightcap. He is a bit conservative and not all that keen on disruption. Michel is, in other words, a suitable representative for the modern German economy, which has grown by a meagre 0.1% over the past five years and is, according to forecasts, now entering yet another year of stagnation. When voters head to the polls on February 23rd, the miserable state of the economy will be at the front of many minds. More

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    Georgia Meloni has grand banking ambitions

    There are various ways to look at the unexpected €13.3bn ($13.9bn) bid that Monte dei Paschi di Siena (MPS) made for Mediobanca on January 24th. At first glance, it testifies to a remarkable recovery by MPS, the world’s oldest bank, which was bailed out by the Italian state in 2017 at a cost of €5.4bn. And if MPS’s attempted purchase of Italy’s pivotal investment bank is accepted, the deal would lead to welcome consolidation in Italy’s fragmented banking industry. But there is also another way to look at the bid. In a country where politics and money overlap to an unusual degree, it is perhaps the most useful. Consider what the deal would mean for Giorgia Meloni, Italy’s prime minister. More

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    Tech tycoons have got the economics of AI wrong

    Even as economic growth was just taking off, some economists were already pessimistic. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern material civilisation”. Yet it was finite and would soon run out. Although more could be found by digging deeper, it would be increasingly expensive to extract and these higher costs would reduce the competitiveness of Britain’s manufacturers. After all, in other countries the black fuel was still in sight of daylight. Efficiency gains—using less coal to produce the same amount of stuff—would not save the country. Indeed, cleverer use of limited resources would simply provide an incentive to burn even more coal, which would, paradoxically, lead to an even faster use of British reserves. There was no escape, the Victorian economist believed. Coal would be exhausted and the country was likely to “contract to her former littleness”. More

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    Donald Trump’s economic warfare has a new front

    “ESPECIALLY INSANE.” “Drastic.” “Noisy and provocative.” These are just a few of the words used by tax experts—normally an even-keeled bunch—to describe Donald Trump’s threat to hit foreigners with punitive tax rates depending on the policies implemented by their governments. It is a sign of how the potential global economic damage from Mr Trump’s return to the White House goes beyond trade and tariffs. Indeed, tax disputes may end up being even more contentious. More

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    Trump and Musk called for former Starliner astronauts to return ‘as soon as possible.’ Here’s what NASA planned.

    Elon Musk and President Donald Trump took to social media with declarations that a pair of astronauts onboard the International Space Station must return “as soon as possible.”
    Butch Wilmore and Suni Williams have been part of the ISS crew since Boeing’s faulty Starliner spacecraft returned to Earth without them in September.
    NASA has planned to return Wilmore and Williams as part of a crew returning in late March, using SpaceX’s Dragon spacecraft that has been at the ISS for months.
    Neither Musk or Trump specified whether the White House would order NASA to change its plan.

    Elon Musk speaks with U.S. President-elect Donald Trump and guests at a viewing of the launch of the sixth test flight of the SpaceX Starship, in Brownsville, Texas, U.S., November 19, 2024.
    Brandon Bell | Via Reuters

    Elon Musk and President Donald Trump took to social media this week declaring that astronauts left at the space station must return “as soon as possible,” despite NASA’s plan to bring the pair back in a couple months on a SpaceX vehicle.
    Both blamed the previous presidential administration for the decision NASA made in August to return Boeing’s faulty Starliner capsule from the International Space Station without astronauts Butch Wilmore and Suni Williams onboard.

    “The @POTUS has asked @SpaceX to bring home the 2 astronauts stranded on the @Space_Station as soon as possible. We will do so. Terrible that the Biden administration left them there so long,” Musk wrote on X late Tuesday.
    “I have just asked Elon Musk and @SpaceX to ‘go get’ the 2 brave astronauts who have been virtually abandoned in space by the Biden Administration. They have been waiting for many months on @Space Station. Elon will soon be on his way. Hopefully, all will be safe. Good luck Elon!!!” Trump added shortly after, on Truth Social.
    But it’s unclear if the statements would actually change the space agency’s timeline. Neither specified whether the White House would order NASA to change its plan.

    Read more CNBC space news

    During former President Joe Biden’s administration, months before Trump and Musk spoke up on the situation, NASA tasked SpaceX with returning Wilmore and Williams from the ISS.
    The agency adjusted its rotation of astronauts as a result: It sent the Starliner capsule back empty and removed two astronauts from SpaceX’s Crew-9 mission to make room for a delayed return by Wilmore and Williams, originally targeted for February.

    Hurricane Milton advances towards Florida in a view from Dragon Endeavor docked with the International Space Station October 9, 2024.
    Matthew Dominick | NASA | Via Reuters

    NASA, in a statement to CNBC on Wednesday, did not address whether it would alter mission plans after the posts from Trump and Musk.
    “NASA and SpaceX are expeditiously working to safely return the agency’s SpaceX Crew-9 astronauts Suni Williams and Butch Wilmore as soon as practical, while also preparing for the launch of Crew-10 to complete a handover between expeditions,” a NASA spokesperson said.

    Expedition rotations

    The Expedition 72 crew poses for a group portrait on Oct. 23, 2024.

    While both Musk and Trump claimed the astronauts are “stranded” and “abandoned” on the ISS, NASA has had a spacecraft at the station since September that could return the crew at any time — a Dragon capsule operated by Musk’s SpaceX.
    Additionally, allegations from Musk that “the Biden administration left them there” and Trump that the astronauts “have been waiting for many months” both misstate the situation.
    To understand the circumstances onboard the ISS, it’s important to note that crews rotate onboard the orbiting research laboratory.
    For 25 years, the ISS has been continuously staffed by crews called Expeditions — each typically lasting about six months, with a mix of primarily U.S. and Russian crew members. Since SpaceX began regularly flying crews for NASA in 2020, the agency has been sending up four astronauts at a time. Each group works until the next arrives at the ISS, when a ceremonial “handover” occurs before the departing crew heads back down to Earth.
    NASA deemed Boeing’s Starliner too risky to return Wilmore and Williams. Starliner was initially expected to be in space for about nine days, but it spent roughly three months at the ISS while Boeing investigated an issue with the capsule’s thrusters. 
    Instead, it decided to remove astronauts Zena Cardman and Stephanie Wilson from the September launch of SpaceX’s Crew-9 mission. That meant Wilmore and Williams, who were already on the ISS, would stay on as part of Expedition 72. They would then return on SpaceX’s Dragon alongside astronaut Nick Hague and Russian cosmonaut Aleksandr Gorbunov.
    Notably, NASA recently delayed the launch of SpaceX’s Crew-10 mission by a month, to “late March” from February. The agency said it and SpaceX required more time to “complete processing” of the newly built Dragon capsule.

    NASA astronauts Butch Wilmore, left, and Suni Williams pose inside the hatch connecting Boeing’s Starliner to the International Space Station on

    Earlier this month, NASA broadcast a discussion with the astronauts onboard the ISS, including Williams and Wilmore.
    “So, what you’re telling us is you’re not channeling ‘Cast Away’ and you don’t have a volleyball with a handprint on it that you call Wilson?” then-NASA deputy chief Pam Melroy asked the crew.
    “No, we’ve got a whole team up here so we’re not worried about that and there’s a lot to do as well. … We have tons of science experiments. … We’ve got space walks coming up,” Wilmore said.
    “It’s just been a joy to be working up here,” Wilmore added, having just shown with her NASA counterparts how they do a synchronized flip in zero gravity. More

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    DoubleLine’s Gundlach says his base case is one rate cut this year, two reductions maximum

    DoubleLine Capital CEO Jeffrey Gundlach said Wednesday he expects only one rate cut for 2025 — two reductions at most — as the Federal Reserve patiently awaits incoming data to assess the state of the labor market and inflation.
    The central bank kept interest rates unchanged Wednesday after three consecutive cuts to end 2024.

    Jeffrey Gundlach speaking at the 2019 SOHN Conference in New York on May 6, 2019.
    Adam Jeffery | CNBC

    DoubleLine Capital CEO Jeffrey Gundlach said Wednesday he expects only one rate cut for 2025 — two reductions at most — as the Federal Reserve patiently awaits incoming data to assess the state of the labor market and inflation.
    “Maximum two cuts this year. And I mean maximum, I’m not predicting two cuts. I just think that’s the most you can possibly think about,” Gundlach said on CNBC’s “Closing Bell.” “At the present moment, if you had made me pick a number, I would say now one cut would be the base case and maximum two.”

    The central bank kept interest rates unchanged Wednesday after three consecutive cuts to end 2024. Fed Chair Jerome Powell emphasized that the central bank is in no hurry to adjust its policy stance, particularly as the economy remains strong.

    “It’s going to be a slow process to get to a hurdle to cut rates again. … I don’t think you’re going to see a cut at the next Fed meeting,” Gundlach said. “He’s obviously focused on the stability in the unemployment rate right now in terms of not feeling a need to cut rates.”
    The notable fixed income investor thinks long-duration Treasury yields have more room to rise. He noted that the benchmark 10-year rate has increased about 85 basis points since the Fed cut rates for the first time last year.
    “I think that rates have not peaked on the long end,” he said. “I think rates will have another move up on the long end.”
    Gundlach cautioned against owning high-risk assets right now because of his view on long-term interest rates and his observation that valuations are high.

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    Levi beats earnings estimates but expects pressure this year from strong U.S. dollar

    Levi Strauss beat Wall Street’s expectations on the top and bottom lines but expects sales to slow next year in part due to a strong U.S. dollar.
    The company expects sales to slide between 1% and 2%, but stripping out currency exchange rates and one fewer selling week, it anticipates revenue will grow.
    The denim maker has been making inroads with women and growing direct-to-consumer sales under the leadership of CEO Michelle Gass.

    A customer shops for Levi’s clothing at a department store in Chicago on Jan. 29, 2024.
    Scott Olson | Getty Images

    Levi Strauss issued dismal guidance for its current fiscal year on Wednesday, as the denim maker grapples with unfavorable currency exchange rates, one fewer selling week and a loss in revenue from its Denizen and footwear businesses. 
    The company said it expects sales to decline between 1% and 2%, well behind estimates of 3.7% growth, according to LSEG. 

    It also anticipates adjusted earnings per share will be between $1.20 and $1.25, below estimates of $1.37, according to LSEG. 
    Shares fell about 6% in extended trading.
    CEO Michelle Gass told CNBC the expected drop in revenue in the current fiscal year does not reflect slower demand, but is more due to the currency trends, one fewer fiscal week and the divested businesses.
    Levi ended fiscal 2024 on a high note and reported earnings and sales that both topped expectations. 
    Here is how the apparel company fared during its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

    Earnings per share: 50 cents adjusted vs. 48 cents expected
    Revenue: $1.84 billion vs. $1.73 billion expected

    The company’s reported net income for the three-month period that ended Dec. 1 was $182.6 million, or 46 cents per share, compared with $126.8 million, or 32 cents per share, a year earlier. Excluding one-time expenses related to impairments, restructurings, acquisitions and leases, among other items, Levi reported adjusted net income of $202 million, or 50 cents per share, compared with adjusted profits of $179 million, or 44 cents per share, a year earlier. 
    Sales rose to $1.84 billion, up about 12% from $1.64 billion a year earlier. Organic sales, which exclude an extra 53rd week Levi had during the quarter, along with foreign exchange effects and divested businesses, grew 8%. 
    Since Gass took the helm of Levi a year ago, she has moved swiftly to cut aspects of the business that weren’t working, grow higher margin sales on its website and stores, boost profitability and bring more female customers to the brand. Under her leadership, Levi inked a high-profile marketing partnership with Beyonce in September after she released a song about the brand on her album “Cowboy Carter” earlier in the year. 
    “Of course, we have to acknowledge the Beyonce effect. We are very pleased with the launch of that campaign, which we’re seeing drive demand across the business,” Gass said in an interview with CNBC.
    Gass has been working to bring more women to Levi, which traditionally has drawn more men, because women tend to spend more money and shop for new clothes more often. Women’s apparel is now about 36% of Levi’s overall business, up slightly from a year ago, but Gass said it should represent about half over time.
    The company has won female shoppers over not only with loose and wide-legged denim fits, but also with a wide range of new tops such as woven shirts and blouses. 
    During the quarter, Levi saw strong sales increases across all of its regions, brands and channels. Sales in the Americas grew 12%, Europe increased 15% and Asia expanded 9%. Sales for its Beyond Yoga brand spiked 10%. Direct-to-consumer sales increased 19% and made up 45% of total organic net sales, which includes the extra selling week, currency fluctuations and the divested businesses. 
    Wholesale revenues, which have been soft across the industry, grew 7% during the quarter. 
    Since President Donald Trump was elected for a second term, all eyes have been on the retail industry to see what kind of effect his proposed tariffs could have on consumer prices and company profits. 
    Levi’s finance chief Harmit Singh said the company sources its products from 25 countries and less than 1% of it comes from China, which Trump has threatened with 10% tariffs. In Canada and Mexico, where Trump has suggested duties as high as 25%, Levi’s exposure is minimal, as it only imports about 5% of products from Mexico and nothing from Canada. 
    When asked if the company will raise prices if broad-based tariffs are implemented, Singh said it plans to work with its suppliers and look at its own costs so it can spare consumers as much as possible. 
    The “first objective would be to minimize the impact on the consumer. So we work internally with our suppliers, we look at our cost base, we look at other pricing opportunities and if we cannot cover it, obviously we got to protect the structural economics of the business,” said Singh. “At that point, we’ll decide, you know, what should be passed on to the consumer or not, but we won’t start from that. That’s where we will end.”
    During the quarter, Levi posted what it called a record gross margin of 61.3%, up from 57.8% in the year-ago period, driven by lower product costs, higher full price sales and a better mix between direct and wholesale revenue. 
    Still, Levi reported $111.4 million in impairment charges related to its Beyond Yoga brand for fiscal 2024, on top of the $90.2 million it reported in fiscal 2023, bringing those costs to $201.6 million in the years since it acquired the athleisure company in 2021 for $400 million. 
    The brand and yoga category overall is growing, but Singh said Levi was potentially a bit “aggressive” in its expectations “of how quickly the brand could grow.” 
    The good news, he said, is Beyond Yoga is now led by Nancy Green, the former CEO of Gap’s Athleta, who is credited with scaling the athleisure brand into a billion-dollar business. 
    “It’s a category that’s growing big time. I know there are other competitors, but we feel good about the management team and good about the potential growth for the business,” said Singh.

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    Trump Media surges after expansion into financial services including crypto and ETFs

    The announcement comes after complaints from Republicans that banks have treated some conservatives unfairly.
    Trump Media’s Truth.Fi financial products would focus on “American growth, manufacturing, and energy companies as well as investments that strengthen the Patriot Economy,” according to the release.
    President Donald Trump indirectly owns 114,750,000 shares of the parent company, held in a revocable trust.

    This illustration shows an image of President-elect Donald Trump next to a phone screen that is displaying the Truth Social app, in Washington, D.C., on Feb. 21, 2022.
    Stefani Reynolds | AFP | Getty Images

    Trump Media is expanding into financial services, including investment vehicles, the firm announced Wednesday.
    Shares of the Truth Social parent company, which trade under the ticker DJT, jumped 6.8% on Wednesday. President Donald Trump indirectly owns 114,750,000 shares of the company, held in a revocable trust.

    The financial services division will be known as Truth.Fi, and it will be started with up to $250 million from the company that will be custodied with brokerage firm Charles Schwab, according to a news release. That money will be allocated to customized exchange-traded funds and cryptocurrencies, among other investment vehicles.
    The company said it expects to launch products and services, including its own investment vehicles, later this year.
    “Truth.Fi is a natural expansion of the Truth Social movement. We began by creating a free-speech social media platform, added an ultra-fast TV streaming service, and now we’re moving into investment products and decentralized finance,” Trump Media CEO and Chairman Devin Nunes said in the release.
    “Developing American First investment vehicles is another step toward our goal of creating a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, debanking, and privacy violations committed by Big Tech and woke corporations,” added Nunes, a former congressman from California.
    The release did not specify what types of investment vehicles Truth.Fi would offer, but said Schwab would “broadly advise” the company’s investments and strategy. The products would focus on “American growth, manufacturing, and energy companies as well as investments that strengthen the Patriot Economy,” according to the release.

    Samantha Schwab, a granddaughter of the namesake founder of Charles Schwab, recently became the deputy chief of staff at the U.S. Department of the Treasury.
    The announcement comes after complaints from Republicans that banks have treated some conservatives unfairly. During a remote appearance last week at the World Economic Forum in Davos, Switzerland, Trump complained to Bank of America CEO Brian Moynihan that the firm was locking out and de-banking conservatives.
    “I hope you start opening your bank to conservatives because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America,” Trump said.
    The president also took on Jamie Dimon, CEO of JPMorgan Chase, the largest U.S. bank by assets.
    “You and Jamie and everybody, I hope you’re going to open your banks to conservatives because what you’re doing is wrong,” Trump said.
    The remarks continued a simmering feud between Republicans and the nation’s largest banks, with a flashpoint coming last year when a group of state attorneys general filed a complaint alleging that the institutions were discriminating against customers based on religious and political affiliations. Officials at the banks have denied wrongdoing.
    Complaints about de-banking are also common among the crypto community, which was aligned with Trump during his presidential campaign.
    Truth.Fi comes on the heels of the Trump memecoin, which launched shortly before the inauguration and resulted in on-paper gains of billions of dollars for the Trump Organization and its affiliates.
    The new financial services firm may end up being a competitor to Elon Musk’s X, which announced a deal with Visa on Tuesday as part of its push to expand beyond social media. Musk is a close advisor to President Trump.

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