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    in Finance

    Why that ‘last mile’ of the inflation fight may be more challenging

    The consumer price index, a key inflation measure, has declined from a pandemic-era peak of 9.1% to 3.4% in December.
    Reaching the Federal Reserve’s 2% annual target may be harder than what came before, some economists believe.
    Largely, that’s because it may take a while for housing inflation to cool and for wage growth to moderate, they said.

    A man walks past a barbershop in Los Angeles.
    Robyn Beck | Afp | Getty Images

    Inflation in the U.S. economy is on the retreat. But the road to ultimate victory may be harder than what’s come already, some economists argue.
    “The so-called last mile is going to get a lot trickier,” Mohamed El-Erian, chief economic advisor at Allianz and president of Queens’ College at the University of Cambridge, recently told CNBC.

    “We’re not going to have the tailwinds that we had, and we’re going to have some headwinds,” he said.
    Inflation measures how fast prices are rising for goods and services — anything from concert tickets and haircuts to groceries and furniture. Policymakers aim for a roughly 2% annual inflation target.

    Arrows pointing outwards

    The consumer price index — a key inflation barometer — has fallen gradually from a 9.1% pandemic-era peak in June 2022 to 3.4% in December 2023, within striking distance of the target.
    This final disinflationary hurdle will be a challenge without curtailing economic growth and risking recession, a dynamic that would likely crimp consumer demand and rein in prices, economists said.
    “One theme is clear — the transition from 8-4% inflation is easier than the transition from 4-2% inflation,” Gargi Chaudhuri, head of iShares investment strategy for the Americas at BlackRock, wrote about the recent CPI report.

    Why goods won’t be much help

    This difficulty with reducing inflation is largely centered on the “services” side of the economy, according to economists. Think of services as things we can experience, such as rent, auto repairs, haircuts, veterinary visits, theater tickets and medical care.
    Goods, on the other hand, are tangible things such as cars and clothes. They account for 21% of the consumer price index (after stripping out items in the food and energy categories).
    More from Personal Finance:Why egg prices are on the rise againA 12% retirement return assumption is ‘absolutely nuts’Here’s where prices fell in December 2023, in one chart
    Inflation among these so-called “core” goods peaked more than 12% in 2022 but is now near zero as supply chains have normalized.
    That means further broad disinflation likely won’t come from consumer goods, economists said. In fact, attacks by Houthi rebels on ships in the Red Sea threaten to disrupt a key transit corridor and may trigger higher goods inflation if it persists, El-Erian explained.

    Where inflation has been ‘sticky’

    Inflation among services has been more stubborn, though. And consumers spend more on services, which account for 59% of the CPI (after stripping out energy services).
    While down from more than 7% last year, services inflation still sits at 5.3%. A big reason for that persistence is housing, which accounts for more than a third of the overall CPI.
    “The shelter inflation component is the part that has remained quite sticky,” Chaudhuri said in an interview.
    Economists expect shelter inflation to moderate. It’s just a matter of when and how quickly it happens.

    For example, prices for newly signed leases appear to have deflated: The New Tenant Rent Index declined to about -5% in Q4 2023, a significant drop from +3% in Q3, according to Bureau of Labor Statistics data issued last week.
    It takes a while for such data to feed through into the Labor Department’s CPI calculations, economists said.
    “I think it’ll take most of the year to get back to target” on inflation, largely because of shelter, said Mark Zandi, chief economist at Moody’s Analytics.
    Labor-market dynamics are also an important component of “services,” economists said.
    A hot job market has meant strong wage growth for workers. That dynamic can underpin inflation if businesses raise prices quickly to compensate for higher labor costs and if larger paychecks lead to more spending by consumers.

    The so-called last mile is going to get a lot trickier.

    Mohamed El-Erian
    chief economic advisor at Allianz and president of Queens’ College at the University of Cambridge

    Wage growth needs to be about 3.5% a year, on average, to achieve target inflation, Chaudhuri said. But hourly earnings growth is currently about 4.1% for private-sector workers, for example.
    Further, businesses have learned they can raise prices and consumers will keep spending (so far, at least). That doesn’t give businesses much incentive to pump the brakes, said Sarah House, senior economist at Wells Fargo Economics.
    “I think the taboo of not raising prices on consumers for fear of losing their business was broken in the pandemic,” House said.
    Absent weaker consumer demand — and weaker economic growth — it may be hard to unwind business owners’ mindset, she said.

    Why this may all be ‘nonsense’

    Not all economists think the last mile of disinflation will be harder than what came before, however.
    Paul Ashworth, chief U.S. economist at Capital Economics, called the theory “nonsense” in a recent research note, for example.

    Largely, that’s because, by one measure, the inflation battle is already nearly won, he said. The Federal Reserve’s preferred inflation gauge is the Personal Consumption Expenditures price index; in November, the PCE index was running at a 1.9% six-month annualized rate, “which means it was already below target,” Ashworth said.
    “All the Fed needs to see is that slower pace of price increases being sustained for a little longer,” he wrote. More

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    in Business

    Gilead stock falls after lung cancer study results disappoint

    Shares of Gilead fell after a key drug from the company failed to improve survival in a late-stage trial on patients with advanced lung cancer. 
    The drugmaker said it will discuss the results with regulators and identify whether certain lung cancer patients may still benefit from the drug, called Trodelvy.
    The results are a blow to Gilead, which is working to become a power player in the cancer space.

    Sopa Images | Lightrocket | Getty Images

    Shares of Gilead fell more than 10% on Monday after a key drug from the company did not significantly extend the lives of patients with a certain lung cancer in a late-stage trial.
    The results are a blow to Gilead, which is working to become a power player in the cancer space. The treatment, Trodelvy, is one of Gilead’s best-selling cancer drugs, contributing roughly a third of its $769 million in oncology sales during the third quarter.

    The phase-three study was part of an effort to expand the use of Trodelvy, which is already approved to treat some types of breast and bladder cancers.
    Patients with advanced or metastatic non-small cell lung cancer who took Trodelvy lived longer than those who got chemotherapy alone, according to Gilead. But those results did not meet the trial’s bar for success. 
    The drugmaker said it will discuss the results with regulators and identify whether certain lung cancer patients may still benefit from the drug.
    Trodelvy belongs to a class of widely sought-out treatments called antibody-drug conjugates, or ADCs, which deliver a cancer-killing therapy to specifically target and kill cancer cells and minimize damage to healthy ones. Standard chemotherapy is less selective — it can affect both cancer cells and healthy cells.
    ADCs are one of the hottest areas of the pharmaceutical industry, as large drugmakers ink deals to acquire or co-develop them.

    Jefferies analyst Michael Yee said Gilead’s trial results are not “totally surprising” to the firm because data from early studies was mixed and data for competing drugs was “lackluster.”
    Yee added that the trial results could “dent” investor confidence about whether Gilead will have significant sales in oncology. More

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    in Business

    Why China poses a growing threat to the U.S. auto industry

    China recently reported exports of more than 5 million vehicles in 2023, topping Japan to become the top country for car exports in the world.
    Rising volume from Chinse automakers like SAIC, Dongfeng and BYD comes amid declining U.S. vehicle exports as companies like General Motors have cut international operations.
    Chinese companies are releasing new models in record times, and many are producing EVs efficiently and profitably.

    A BYD Seagull small electric car is on display during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai)
    Vcg | Visual China Group | Getty Images

    DETROIT — Chinese automakers pose a growing threat to their American counterparts — even without selling directly to consumers in the U.S. market.
    Sales of China-made vehicles are rising at notable rates in Asia, Europe and other countries outside those continents. China recently reported exports of more than 5 million vehicles in 2023, topping Japan to become the top country for car exports in the world.

    That volume from well-established, government-owned companies like SAIC and Dongfeng, as well as newer players like BYD, Nio and others, has catapulted China from the sixth ranking to the top seed since 2020. It comes amid declining U.S. vehicle exports as companies such as General Motors have cut international operations. U.S. auto exports in 2022, the most recent data available, were down 25% from their peak in 2016, according to the U.S. Bureau of Economic Analysis.
    America — fourth globally in vehicle exports prior to 2020 — ranked sixth in the world last year, falling behind No. 5 Mexico, No. 4 South Korea and No. 3 Germany, according to global consulting firm AlixPartners.
    “My No. 1 competitor is the Chinese carmakers,” said Carlos Tavares, CEO of Chrysler parent Stellantis, during a virtual media roundtable Friday. “This is going to be a big fight. There is no other way for a global carmaker like Stellantis that is operating all over the world than to go head-on with the Chinese carmakers. There is no other way.”
    The threat extends beyond export volumes. Chinese automakers have set a new standard for vehicle production and pricing. They’re releasing new models in record times, and many are producing EVs efficiently and profitably — something that has alluded global automakers including America’s GM and Ford Motor.

    BYD dominance

    Automotive experts have pointed to BYD Co. as a prime example of the rise of China’s automakers. The company, backed by the Beijing government, last year topped Tesla to become the world’s largest seller of EVs.

    Tesla CEO Elon Musk, whose company operates a large plant in China, has said Chinese automakers are the greatest competitors for his Texas-based company.
    “There’s a lot of people who are out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong,” Musk said at The New York Times’ Dealbook conference in November.
    Rhodium Group estimates that BYD received approximately $4.3 billion in state support between 2015 and 2020, according to The Economist. Beijing has also offered subsidies to incentivize buyers of electric cars.

    Stellantis CEO Carlos Tavares holds a news conference after meeting with unions, in Turin, Italy, March 31, 2022.
    Massimo Pinca | Reuters

    BYD has cracked a code for low-priced EVs that seemingly transcends borders: Its BYD Seagull, a tiny EV that starts at roughly $11,400, would significantly undercut U.S. EV prices at less than $15,000 even when factoring in America’s 27.5% tariff on Chinese-made vehicles.
    “This is a car that scares me,” said Kristin Dziczek, automotive policy advisor for the Federal Reserve Bank of Chicago’s Detroit branch, during the organization’s Automotive Insights Symposium last week. “How are we going to cut the price of EVs in half? China’s already done it.”
    Mathew Vachaparampil, CEO of auto teardown and consulting firm Caresoft Global, estimates BYD is making $1,500 off each Seagull unit sold. At worst, the company breaks even, he said.
    And the company is shipping more vehicles outside China: Overseas markets accounted for about 10% of BYD’s more than 3 million sales last year, doubling that share from the the beginning of the year, according to Bernstein.
    “BYD has an unparalleled cost structure and product innovation ability, that stems from its high degree of vertical integration which will enable the company to thrive in the ongoing EV race in China and abroad,” Bernstein analyst Eunice Lee said in an analyst note last week. “Despite growing pricing pressure in China, we expect the company’s focus on overseas and premium segments will support 29% [compound annual growth rate] in earnings through 2025.”

    Growth gone global

    Backed by local and federal governments, the growth of Chinese automakers began in their home country — taking share away from mandatory joint ventures between non-domestic automakers and Chinese companies.
    For example, GM’s share of the Chinese market, including its joint ventures, has plummeted from roughly 15% in 2015 to 8.6% at the end of the third quarter last year.
    “What’s going on in China at home? These [new energy vehicle] brands have become dominant,” Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, said at the Chicago Fed’s auto conference. “They were 26% [market share] a few years ago, up to more than 50% in 2022 and headed towards two-thirds by the end of the decade.”

    BYD’s new luxury brand Yangwang is selling its first model, the U8, for more than 1 million yuan (US$160,000).
    CNBC | Evelyn Cheng

    And the growth hasn’t stayed home. Chinese companies have begun expanding into Mexico, Europe and elsewhere, Wakefield said. They’ve largely done so through cheap, relatively inexpensive models — some of which American automakers have given up on — as well as EVs, which experts view as an open market for the companies.
    Chinese companies accounted for 8% of Europe’s all-electric vehicle sales as of September last year and could increase their share to 15% by 2025, according to the European Union. The EU believes Chinese EVs are undercutting the prices of local models by about 20% in the European market.
    The influx of Chinese EVs has spurred the European Union to launch government support for the industry.
    In Mexico, China-built vehicles with internal combustion engines increased from 0% market share to 20% of the country’s light-duty vehicle sales over the past six years, according the Chicago Fed’s Dziczek.
    “Mexico is the second-largest market for China-made vehicles other than Russia,” she said. “They’re going to be on our shores in Mexico in the not-too-distant future.”

    Coming to America

    For decades, Chinese auto companies have said they will begin selling vehicles in the U.S. under their own brands, but none have succeeded.
    That’s not to say China doesn’t compete in the U.S. market. Aside from major supply chain ties, there are also a handful of auto brands owned by Chinese companies operating in the U.S., such as Lotus, Volvo (including its Polestar spin-off) and niche EV maker Karma.
    American companies, such as GM and Ford already, or plan to, manufacture some vehicles in China to be imported and sold in the U.S. GM imports its Buick Envision from China to the U.S., while Ford last year said it would import its forthcoming Lincoln Nautilus crossover from China.
    But as of yet, a U.S. driver can’t easily buy a Dongfeng, BYD or other Chinese-made vehicle stateside.

    2024 Lincoln Nautilus

    Aside from potential regulatory hurdles and protectionism acts, some believe Chinese automakers could find success in expanding to the U.S. market the same way Japan’s Toyota Motor and South Korea’s Hyundai Motor have done.
    Those automakers made their entrances to the U.S. market with affordable, accessible vehicles, then increased their offerings to boost quality and safety and ultimately expanded to higher-end models.
    “The Japanese carmakers came to the U.S. in the ’70s,” Stellantis’ Tavares said. “They needed 50 years to reach the top of the market with some of the competitors that we know well. I don’t see any reason why this would not happen with the Chinese.”
    — CNBC’s Michael Bloom contributed to this article. More

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    Trump’s proposed 10% tariff plan would ‘shake up every asset class,’ strategist says

    The former president, and overwhelming favorite to secure the Republican nomination for the 2024 race, plans to impose a 10% tariff on all imported goods.
    The center-right American Action Forum think tank said the plan would “distort global trade, discourage economic activity, and have broad negative consequences for the U.S. economy.”
    Rabobank’s Michael Every said the plan was aimed at “structurally breaking the global system by hook or by crook, to basically reindustrialize the U.S. in a neo-Hamiltonian manner.”

    Former U.S. President and Republican presidential candidate Donald Trump holds a rally in advance of the New Hampshire presidential primary election in Rochester, New Hampshire, U.S., January 21, 2024. 
    Mike Segar | Reuters

    Markets need to begin thinking about the structural impact of Donald Trump’s proposed 10% tariff increase, which “shakes up every asset class,” according to Michael Every, global strategist at Rabobank.
    The former president, and overwhelming favorite to secure the Republican nomination for the 2024 race, plans to impose a 10% tariff on all imported goods, trebling the government’s intake and aiming to incentivize American domestic production.

    Treasury Secretary Janet Yellen said earlier this month that the plan would “raise the cost of a wide variety of goods that American businesses and consumers rely on,” though she noted that tariffs are appropriate “in some cases.”
    Criticism of the policy has been relatively bipartisan. The Tax Foundation think tank highlights that such a tariff would effectively raise taxes on U.S. consumers by more than $300 billion a year, along with triggering retaliatory tax increases by international trade partners on U.S. exports.
    The center-right American Action Forum estimated, based on the assumption that trading partners would retaliate, that the policy would result in a 0.31% ($62 billion) decrease to U.S. GDP, making consumers worse off and decreasing U.S. welfare by $123.3 billion.

    After Republican rival Ron DeSantis ended his bid for the GOP nomination, Every told CNBC’s “Street Signs Asia” on Monday that markets were “not going to be caught napping” by a potential Trump presidency, as they were in 2016. He suggested one of investors’ top concerns would be the 10% tariff on all U.S. imports.
    “First of all, they can’t model that because they don’t really understand what the second and third order effects are, and more importantly, they don’t grasp that Trump isn’t talking about a 10% tariff just because it’s a 10% tariff,” Every said.

    “He’s talking about structurally breaking the global system by hook or by crook to basically reindustrialize the U.S. in a neo-Hamiltonian manner which is how the U.S. originally industrialized, putting up a barrier between it and the rest of the world so it’s cheap to produce in America and more expensive to produce everywhere else if you’re importing into America.”
    A second Trump term
    Every added that a return to this type of trade policy “shakes up every asset class — equities, FX, bonds, you name it — everything gets put in a box and shaken around, so that’s what markets should start thinking about.”
    In the American Action Forum’s November report, data and policy analyst Tom Lee concluded that in the most likely scenario that trading partners impose retaliatory tariffs, a new 10% duty on all goods imported to the U.S. would “distort global trade, discourage economic activity, and have broad negative consequences for the U.S. economy.”

    Read more CNBC politics coverage

    Trump floated the 10% tariff during an interview last year with Fox Business’ Larry Kudlow, his former White House economic advisor, saying “it’s a massive amount of money.”
    “It’s not going to stop business because it’s not that much,” he claimed, “but it’s enough that we really make a lot of money.”
    During his first term in office, Trump triggered a trade war with China by unilaterally slapping $250 billion worth of tariffs on goods imported from China, which the AAF estimated have cost Americans an extra $195 billion since 2018.
    China responded with its own tariffs on U.S. goods, and Trump also imposed tariffs on steel and aluminum imports from most countries, including many of Washington’s biggest allies.

    Keen to maintain a firm stance on Beijing, President Joe Biden’s administration has largely kept these tariffs in place, though converted some of the metal tariffs into tariff-rate quotas, which allow a lower tariff rate on particular product imports within a specified quantity.
    Dan Boardman-Weston, CEO of BRI Wealth Management, said the macroeconomic and geopolitical landscape is now very different and more challenging than when Trump’s first term began in 2017, and added that his erratic approach to policy decisions would add to the kind of uncertainty that markets most dislike.
    “In 2017, markets really appreciated the Trump presidency because of all the tax cuts and deregulation, and there was a more conducive market environment I think back then, with where rates were, for markets to move higher,” he told CNBC’s “Squawk Box Europe” on Monday.
    “I think this time is going to be very different, and I do think the geopolitical risks across the world are rising, and this doesn’t seem to be on investors’ radars as of yet.”
    He noted Trump’s tendency to “change his mind” so frequently on geopolitical issues that “people won’t know where his thinking is at.”

    Trump has claimed that he would stop Ukraine’s war with Russia within 24 hours, but has been economical with details of his supposed peace plan, and throughout his political career has lavished praise on Russian President Vladimir Putin.
    He was also impeached by the U.S. House of Representatives for allegedly threatening to withhold U.S. military aid to Ukraine unless President Volodymyr Zelenskyy sanctioned a politically motivated investigation into his then-leading electoral challenger Biden. Trump was acquitted by the Senate.
    “That unpredictable approach to how he will approach the war in Ukraine or how he will approach relations with China and Taiwan I think lead to heightened risks from a geopolitical perspective, which I think will impact into market valuations,” Boardman-Weston said.
    “It’s that added element of uncertainty in an already very uncertain world.” More

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    in Business

    The buy now, pay later holiday debt hangover has arrived, as consumers wonder how they’ll pay bills

    Buy now, pay later helped fuel record holiday spending online, surging 14% year over year, but now that those bills are coming due, consumers aren’t sure how they’ll pay them.
    The surge in use of buy now, pay later comes as credit card debt is at a record high and delinquency rates have nearly doubled over the past two years.
    It’s unclear how often buy now, pay later bills go unpaid, but the people who use the services are more than twice as likely to be delinquent on another credit product, such as a car loan or mortgage.

    Pedestrians walk by an advertisement for Klarna.
    Daniel Harvey Gonzalez | In Pictures via Getty Images

    When she started shopping for the holidays late last year, Kiki Andersen was struggling to buy her loved ones gifts. So she turned to a novel solution to get through the season: Buy now, pay later. 
    The 31-year-old comedian from Los Angeles used Klarna and PayPal to split a variety of purchases into four interest-free payments spread out over a series of weeks. At the time, her upfront cost was about a quarter of the overall purchase price. 

    But now that January has arrived and the other installments are starting, Andersen isn’t sure how she’s going to pay them off. She has found herself buried under a mountain of micro payments, wondering how she’s going to cover her bills. 
    “I’ve definitely been selling clothes … if I have to go sell a pair of shoes to make a payment, I will,” Andersen told CNBC of the roughly $1,700 she racked up in buy now, pay later debt. “I’m definitely worried about [the payments]. It’s definitely a concern and I’m definitely going to have to find a way to come up with the money.”
    Andersen is one of many Americans who turned to buy now, pay later to fund their holiday shopping last year to avoid credit card debt but are now having trouble paying off those bills. 
    In an era where persistent inflation and record-high interest rates are shaping financial decisions for many shoppers, the service helped fuel a boom in overall online spending that topped out at $222 billion from Nov. 1 through the end of December. During the season, buy now, pay later usage hit an all-time high, rising a staggering 14% from the prior year and contributing $16.6 billion to online spending.
    On Cyber Monday alone, buy now, pay later use spiked nearly 43%, Adobe said. 

    “Sales, especially online sales, were probably juiced to some extent because of buy now, pay later usage,” said Ted Rossman, senior analyst at Bankrate. “A lot of people are drawn to this financing method as an alternative to something like a credit card where the average interest rate is a record high 20.74%. I would caution that you can still get into trouble with buy now, pay later … it can still encourage you to overspend and kind of trick yourself.”
    The surge in use of buy now, pay later comes as credit card debt hits a record high and delinquency rates have nearly doubled over the past two years. While delinquencies were at historic lows during the Covid-19 pandemic, the rate of people who’ve gone more than 30 days without paying their credit card bill recently topped pre-pandemic levels, according to the Federal Reserve. 
    It’s tough to say how buy now, pay later fits into the country’s overall debt picture. Providers that offer the service don’t typically disclose how often those bills go unpaid, and the debts aren’t reported to credit bureaus. Klarna, PayPal and Affirm all declined to share buy now, pay later delinquency rates with CNBC. 
    Affirm has said the short-term and high-velocity nature of its buy now, pay later service makes traditional credit metrics less relevant. It writes off those unpaid loans within 120 days, which is why it doesn’t disclose delinquency rates for the service. It does disclose other credit metrics for its longer-term loans.
    Klarna and Affirm previously told CNBC their underwriting strategies ensure that only people who can pay back the short-term loans can access the service because their business models wouldn’t work if people frequently missed payments. While Klarna charges late fees that top out at 25% of the purchase price, according to a review of its terms and conditions, Affirm does not.
    Klarna said its global default rate for its overall business including buy now, pay later is less than 1%. In the U.S., 35% of consumers pay the company back early, it said.
    The opacity surrounding the novel service has created a so-called phantom debt phenomenon that has left economists, regulators and even shoppers concerned about the effect it could have on the economy.
    “It’s just this nebulous cloud of debt. Nobody really knows how it works and it’s just floating around us all the time and it definitely feels like a pending housing crisis, almost like 2008 but for shopping,” Andersen joked. “That’s the myth that Klarna and PayPal sell you on, is that you can have this lifestyle, you can have these things, but the truth is, you can’t.” 

    The ‘beast’ of buy now, pay later

    Alaina Fingal, a New Orleans-based financial coach and the founder of The Organized Money, typically receives five or six emails at the beginning of January from people who overspent during the holidays and need help managing their finances. 
    This year, it was closer to 20 or 25. 
    “Most people used all of their cash, they ran out of cash, then they would put it on a credit card and then if they maxed out credit cards, then they would go to other services like buy now, pay later,” Fingal told CNBC.
    Fingal said she spoke with one client who had two maxed-out credit cards and used two buy now, pay later services, leaving her struggling to make payments.
    “Since she couldn’t afford it in the first place, those minimum payments are causing her to struggle a lot to cover food and her regular bills for this month,” said Fingal. “So it just creates this cycle that becomes harder and harder to come out of.” 
    While it’s unclear how often buy now, pay later bills go unpaid, the people who use them are more than twice as likely to be delinquent on another credit product, such as a car loan, personal loan or mortgage, according to a 2023 study from the Consumer Financial Protection Bureau. People who use the service also tend to have higher balances on other credit products and lower credit scores, according to the CFPB. 
    As more shoppers use the products, consumers are torn about how they feel about it. In the weeks after Christmas, some on the social media platform X, formerly known as Twitter, said they were grateful for buy now, pay later and wouldn’t have been able to buy holiday gifts without it.
    Others called it “dangerous” and vowed to stop using it as a New Year’s resolution. At least one shopper said they had to use their rent money to pay their buy now, pay later bill. 
    “Buy now, pay later is a beast. It definitely is. But you have to be the bigger beast,” said Hensley Resiere, a loyal Klarna user, in response to the difficulties some shoppers have with the service.
    In an interview with CNBC, the 34-year-old refugee caseworker from Jersey City, New Jersey, said Klarna helped her provide an “amazing” Christmas for her family. But when she first started using buy now, pay later during the Covid-19 pandemic, she had trouble keeping track of the payments and found herself overdrafted by hundreds of dollars and crushed with fees. 
    “When I realized I can still get what I want, like designer items, and not have to pay the full purchase on spot, I lost my damn mind. … It was like a kid in a candy store,” Resiere recalled. “Let’s say Klarna gave me $1,000. In my head, I was like, ‘Oh my God, that’s free money.’ So I’m spending the whole thousand, forgetting that I have rent, car note, car insurance, all these bills, groceries, everything.” 
    Resiere was in a cycle where she had to wait to get paid to cover her overdraft fees. These days, she has a system in place to manage the payments so they don’t interfere with her other bills. 
    “Even though I’m in my career now and of course making more money, any way that I can split my payments and not worry about bills, I’m definitely, definitely all for,” said Resiere. “It splits the payments so I don’t really feel it. Yes, I’m paying the same amount but the fact that it’s being spread out, it doesn’t hurt as much.”
    Branika Pride, a mom of three who lives in Birmingham, Alabama, and works in higher education, told CNBC she used Afterpay, Block’s buy now, pay later service, this Christmas to buy her kids an icemaker, a PlayStation 5 and Drake concert tickets. She uses a variety of providers, depending on what the retailer offers. Pride said the service came in handy this Christmas because she waited until the last minute to start shopping and was reluctant to put down the full cost of the purchases at once.
    “I’ve used it in the past, not as heavy as I did this time,” she said, adding that she racked up about $1,300 in buy now, pay later debt over the holidays. “I just really didn’t get into the holiday spirit until the week of Christmas. So it was just kind of funny at the end when I was just making all the purchases I was like, ‘Ooh, I’m gonna regret this in two weeks.'” 
    Pride said she’s never had trouble covering her buy now, pay later payments and typically uses the service around payday, so she knows she’ll have the funds by the time the next installment rolls around. She appreciates the flexibility that it offers her, but acknowledged that it can promote overspending or get in the way of her larger financial goals. Without it, she probably wouldn’t buy as many discretionary items as she does.
    “Every year I say I don’t want to take it into the New Year,” said Pride. “But somehow, it always comes with me.”Don’t miss these stories from CNBC PRO: More

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    ‘We have scouts all over the world’: Former NBA All-Star Danny Ainge takes a money shot for global talent

    Monday – Friday, 12:00 – 1:00 PM ET

    Halftime Report Podcast

    The Utah Jazz is casting its net wide for international players. 
    “We have scouts all over the world — almost every basketball country throughout the world,” Danny Ainge, the team’s CEO and governor, told CNBC’s “Halftime Report” on Friday.

    The two-time champion of the National Basketball Association and former NBA All-Star highlighted having scouts in countries throughout South America, Europe and Asia, as well as every region in the U.S.
    “It’s a worldwide sport, and we got to find them all,” he said.
    His remarks come after the NBA announced in October that a record 125 international players — five of which were on the Utah Jazz — were on opening-night rosters for the 2023-24 season. Those players hailed from 40 countries and territories across six continents, with a record from Canada at 26 and France at 14.
    All 30 NBA teams feature at least one international player this season.
    International ticket sales also saw a 120% increase from last season, according to StubHub. Fans are traveling from a total of 92 countries to North American games, which is up from 68 countries last season.

    Ainge joined the Utah Jazz as CEO in December 2021 after leading basketball operations for the Boston Celtics for 18 years.
    Utah Jazz’s valuation currently sits at $3.09 billion, according to data from research firm Statista. This marks a 52.59% increase from last year and a 76.57% increase since the year Ainge joined the franchise.

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    Spot bitcoin ETFs are taking Wall Street by storm. Experts say options are next

    Exchange-traded fund experts anticipate spot bitcoin ETFs, which debuted this month, to spark a new wave of crypto products.
    Cboe Global Markets’ Catherine Clay believes options are a natural progression for bitcoin ETFs.

    “We believe that the utility of the options, what they provide to the end investor in terms of downside hedging, risk-defined exposures into bitcoin, really would help the end investor and the ecosystem,” the firm’s global head of derivatives told CNBC’s “ETF Edge” this week.
    The Cboe, the largest U.S. options exchange, filed with the SEC on Jan. 5 to offer options linked to bitcoin exchange-traded products. It expects those options to begin trading later this year, per its news release.
    According to Dave Nadig, financial futurist at VettaFi, options on the crypto funds could appeal to institutional investors, who have been more reluctant to invest in the digital asset class.
    “You’re going to start seeing all sorts of hedge fund players in the space,” he said in the same interview. “Folks who might not have been traditionally speculating on crypto directly in the crypto ecosystem are now going to have something to play with.”
    Nadig also suggested that zero-day options — contracts that expire the same day they’re traded, commonly known as “0DTEs” — would be the ultimate goal for bitcoin derivatives products.

    “If what happens in bitcoin is what’s happened in single stocks, we’re going to see retail in particular and a lot of institutions move towards zero days to expiration options trading on bitcoin itself,” he said.
    Still, Cboe’s Clay cautioned that those products could be very far away.
    “We still have not even received approval to list options, so let’s not get ahead of ourselves and think about 0DTEs,” she said. “We want to get options on these ETFs in a very intelligent and thoughtful way that actually … really builds the ecosystem of new entrants into the market.”
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    How Denver International Airport became one of the fastest-growing airports in the world

    Last year was Denver International Airport’s busiest on record.
    While airline stocks have yet to fully recover to pre-pandemic levels, passengers have returned in droves — and millions of them are flying through the Colorado hub.

    “We will end 2023 much higher than our forecast at about 78 million passengers annually,” said Phil Washington, CEO of the Denver International Airport. “So this has been tremendous growth.”
    The airport, known as DIA to Colorado locals, opened in 1995. It was originally built to handle 50 million passengers per year, but now that number is expected to reach more than 100 million people per year by 2027, according to DIA estimates.
    OAG, a global travel data provider, said Denver went from the 21st busiest airport in the world in 2019 to the sixth in 2023. 
    United Airlines is Denver’s biggest operator with 46.7% market share, followed by Southwest at 30.7% and Frontier Airlines at 9.7%, according to DIA.The midcontinent airport has become United’s busiest hub. It recently invested nearly $1 billion in Denver to add more gates, flights and destinations, and opened the largest lounge in its network.
    “About 60% of our customers are connecting from other places. Forty percent of our customers are local Denver, and it’s a fast growing city,” said Jonna McGrath, vice president of Denver Airport operations for United Airlines. “We want to grow before 2030 to about 650 flights a day.”
    CNBC got a behind-the-scenes look at United’s Denver operations and explored how the airport and the airline plan to keep up with demand.Watch the video to learn more. More