Raphael Stevens

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    Why spot ETFs may be a game changer for bitcoin

    The Securities and Exchange Commission’s approval of 11 spot bitcoin ETFs this week could be a turning point for cryptocurrency investing.
    Ark Invest CEO and Chief Investment Officer Cathie Wood is behind one of the new ETFs. Her firm partnered with 21Shares to launch the ARK 21Shares Bitcoin ETF.

    “We really believe this is an important moment for us to help with the democratization of bitcoin access, giving more people access,” Wood told “ETF Edge” on Monday.
    The first-ever batch of spot ETFs began trading Thursday. Investor interest in bitcoin leading up to the historic ETF approvals has been on the upswing. As of Friday, the cryptocurrency is up more than 125% in the past 12 months.
    As financial firms begin to get more exposure through the new instruments, Wood said, the impact on bitcoin prices will be noticeable. 
    “If institutions with trillions of dollars under management just put 0.2[%] or 0.5% in, that could really move the needle,” Wood said.
    Ophelia Snyder’s firm 21.co is heavily involved in the cryptocurrency space. According to its website, the firm “bridges traditional finance and decentralized finance for easy crypto access.”

    “It’s also very much part of a new wave of disruptive technology,” the firm’s president and co-founder told “ETF Edge.”
    Snyder contended that bitcoin goes beyond being just a new asset class.

    “It’s also very much part of a new wave of disruptive technology.”

    Ophelia Snyder
    21.CO President and Co-Founder

    “There’s still quite a ways to go in terms of how this actually will interact both with the world at large and sort of our economic systems, as well as, quite frankly, how it will end up interacting with your portfolio,” she said. 
    Snyder also said the impact that wider bitcoin access could have on the broader market “can’t be underestimated.”
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    The Rubik’s Cube turns 50: How a 3-by-3 grid captured hearts and market share

    The Rubik’s Cube turns 50 this year and, under the ownership of Spin Master, it shows no signs of retirement.
    The iconic 3-by-3 grid has graced T-shirts, been turned into keychains, inspired architecture and sparked an entire subgenre of art.
    The cube claims 42% market share in the brain teaser category, and sales are still growing. In 2022, global retail sales of the Rubik’s Cube reached $75.3 million.

    Erno Rubik, inventor of the Rubik’s Cube, holds one of the cubes at the International Toy Fair in Nuremberg, Germany, Jan. 29, 2020.
    Picture Alliance | Getty Images

    It took a month of twisting and turning for the first person to solve a Rubik’s Cube. That person was Erno Rubik, now 79, the iconic puzzle toy’s creator.
    Conceived as a mathematical tool to help his students understand three-dimensional movement, the magic cube, as it was initially called, was first pieced together with cubes made from wood and paper held together with rubber bands, glue and paperclips.

    It was only after the Hungarian sculptor and professor of architecture scrambled his completed cube and tried to realign the colored blocks that he realized he’d created a puzzle.
    “I thought, if I can’t do it, nobody else can do it, or very few can do it,” Rubik told CNBC. “That was proof that it was possible to put in the market, to demonstrate it to the public.”
    A source of pride, envy and frustration, the Rubik’s Cube turns 50 this year and, under the ownership of Spin Master, it shows no signs of retirement.
    “Rubik’s isn’t just a toy,” said Sam Susz, senior director of global marketing at Spin Master. “It’s art. It’s a sport. It’s science. It’s math.”
    Since its inception in 1974, the Rubik’s Cube has spread throughout the pop culture landscape, appearing in movies and TV shows, music videos, comics, video games and museums. The iconic 3-by-3 grid has graced T-shirts, been turned into keychains, inspired architecture and sparked an entire subgenre of art.

    Enthusiasts have raced to shrink the cube creator’s monthlong solving time, with the current world record standing at a mere 3.13 seconds.

    Rami Sbahi auditioning for “America’s Got Talent” in 2014 by solving a Rubik’s Cube both with his feet and with his hands quickly.
    Nbc | Nbcuniversal | Getty Images

    “I would throw Rubik’s in the category of toys and game brands that transcended and became lifestyle brands,” said James Zahn, editor in chief of “The Toy Book” and senior editor of “The Toy Insider.”

    A no-brainer acquisition

    Toronto-based Spin Master, known for brands such as Hatchimals, Tech Deck and Kinetic Sand, acquired the Rubik’s Cube brand in 2021, five years after snapping up the iconic Etch-a-Sketch.
    “I mean, in the toy and game industry it is not often that you come across the opportunity to acquire an evergreen, iconic brand,” Susz said. “And this brand is just something that has just such incredible staying power.”
    Adding tried-and-true evergreen products to its portfolio allows Spin Master to take risks with new brands, knowing it has a set of products that will always have a space on retail shelves.
    “Rubik’s is just a brand that shows no signs of ever going away,” Zahn said. “It will forever be regarded as a classic.”
    At present, the cube has 42% market share in the brain teaser category, according to Susz. And sales are still growing.
    In 2022, global retail sales of the Rubik’s Cube grew nearly 4% year over year and reached $75.3 million, the result of nearly 6 million units sold. That figure does not include tens of millions of dollars in sales of related, Rubik’s-inspired cubes, Susz said. As of November 2023, year-to-date sales were up 14% over 2022.
    Spin Master generated just over $2 billion in revenue in 2022, making Rubik’s Cube sales just under 4% of the company’s total earnings that year.
    “The one important element of its longevity is the fact that new people keep discovering it each and every year,” said Zahn.
    Much of the Rubik’s Cube staying power is tied to its complex nature — 43 quintillion combinations, Rubik touts — and the human drive to solve problems.

    14-year-old Terence Wilson of Deepdale near Preston, with his Rubik’s Cube and Rubik’s Snake, 28th August 1981.
    Mirrorpix | Getty Images

    Parents and educators have gravitated toward the cube as a way to occupy kids outside the digital world and aid in development of dexterity and critical thinking skills.
    Spin Master is also in the process of starting the Rubik’s Academy, an educational program that provides teachers with lesson plans that integrate the puzzle toy into the classroom.
    “It’s absolutely great for kids with learning difficulties,” said Amanda Gummer, a child development expert and founder of the toy review site “The Good Play Guide.” “It helps them with confidence, and when they’ve mastered it, it’s quite a kind of cool playground boast.”

    The next 50 years

    While the traditional Rubik’s Cube remains popular, Spin Master has been quick to develop new versions of the cube.
    This includes the Rubik’s Phantom, the familiar 3-by-3 cube printed with thermochromic ink that appears all black until the heat from your hands activates the colors, and the Rubik’s Impossible, a cube with iridescent tiles that change color when viewed from different angles.
    “There is probably no harder challenge than to try and innovate something that’s been around for 50 years, and everyone’s done everything under the sun with it,” Susz said.
    Spin Master also wants to make solving the cube more accessible. Alongside online tutorials and a Rubik’s Cube mobile app, the company has developed the Rubik’s Coach Cube, covered in numbered stickers that correspond to each step needed to solve the cube.
    The goal, after 50 years, is to keep momentum.
    Spin Master is working closely with brands such as Mattel’s Barbie, Hello Kitty, Levi and Mercedes to launch new products, from toys to apparel and even a Formula 1 racing car. There’s even a hope that the company will develop a feature film about Rubik’s life, similar to films such as “Air,” “Blackberry” or “Barbie,” Susz said.
    Spin Master expects sales growth to continue in 2024 as it unveils new iterations of the cube.
    “One of the beauties of Spin Master having full control and ownership of Rubik’s globally is that now we can invest in a big way,” Susz said. More

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    Airline stocks tumble after Delta trims profit forecast

    Delta shares fell after the company trimmed its 2024 earnings forecast.
    The company reported a fourth-quarter earnings beat as bookings, both for corporate and leisure travel, continued to pick up from the Covid-19 pandemic lows.
    Airline stocks including United, American and Southwest were also down on the news.

    Delta Air Lines shares slipped about 9% Friday after the company trimmed its 2024 earnings forecast. 
    Delta forecast full-year earnings per share of $6 to $7, below its previous estimate of more than $7 per share for 2024.

    Other major airlines including United, American and Southwest also fell on the new estimate, released alongside quarterly earnings. United and American were down about 10% each, while Southwest fell more than 4%.
    Delta finished 2023 by doubling its quarterly profit as bookings, both for corporate and leisure travel, continued to pick up from the Covid-19 pandemic lows. The company reported $2.04 billion in net income in the fourth quarter, sharply up from the $828 million reported in the year-ago period. 
    Delta CEO Ed Bastian said in a CNBC interview that the airline has recovered almost 90% of its travel demand from its pre-pandemic numbers. Bastian said he expects strong growth in international travel as Americans continue to set their sights on overseas destinations.
    “We expect to see an inflection point in the first part of this new year, in terms of our domestic unit revenues turning positive,” Bastian said.
    Delta is coming off a strong 2023 where shares surged more than 20%, but the stock is still down from its all-time high of $63.16, notched in July 2019. The stock closed Friday at $38.47 per share.Don’t miss these stories from CNBC PRO: More

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    Deflation: Here’s where prices fell in December 2023, in one chart

    Deflation is when prices fall outright for goods and services.
    Prices declined in 2023 in categories such as physical goods, groceries and energy, according to the December consumer price index.
    Supply and demand have normalized and a stronger U.S. dollar makes it cheaper to import goods.

    Extreme-photographer | E+ | Getty Images

    As inflation continues to throttle back across the broad U.S. economy, some consumer categories have sunk into outright deflation.
    In other words: Americans are seeing prices decline for certain items.

    Those pullbacks have largely been among physical goods rather than services, economists said.

    Demand for goods soared early in the Covid-19 pandemic, as consumers were confined to their homes. The health crisis also snarled global supply chains for those goods. These dynamics drove up prices. Now, they’re falling back to earth.
    “You have seen some [price] give-back in some categories that were most affected by the shift in consumer demand, as well as being affected most severely by some of the supply-chain issues we saw over the course of the pandemic,” according to Sarah House, senior economist at Wells Fargo Economics.

    A shift away from spending on goods

    For example, average prices have declined in these categories, among others, since December 2022: toys (by 4.5%), college textbooks (4.9%), televisions (10.3%), men’s suits, sport coats, and outerwear (6%), sporting goods (2.5%), furniture and bedding (4.3%), and computer software and accessories (9.9%), according to the consumer price index.
    “We bought a lot of goods because we couldn’t go out, travel, go to ballgames” early in the pandemic, said Mark Zandi, chief economist at Moody’s Analytics. “There has been a shift from goods to things we couldn’t do when we were shut in.”

    Prices for used cars and trucks have also fallen, by 1.3%, according to CPI data.
    Used and new vehicle prices were among the first to surge when the U.S. economy reopened broadly early in 2021, amid a shortage of semiconductor chips essential for manufacturing.
    However, price levels on used cars remain more than 30% higher than they were pre-pandemic, meaning there’s likely still ample room for a reversal, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

    There are other deflationary dynamics

    Broadly, a historically strong U.S. dollar relative to other global currencies has also helped rein in goods prices, Zandi said. This makes it cheaper for U.S. companies to import goods from overseas, since the dollar can buy more.
    The Nominal Broad U.S. Dollar Index is higher than at any pre-pandemic point dating to at least 2006, according to U.S. Federal Reserve data as of early January. The index gauges the dollar’s appreciation relative to currencies of the U.S.′ main trading partners such as the euro, Canadian dollar, British pound, Mexican peso and Japanese yen.
    More from Personal Finance:Here’s the inflation breakdown for December 2023Deflation vs. disinflation: One is ‘the more ideal outcome’Why workers’ raises are smaller in 2024
    Falling energy prices have also put downward pressure on goods prices, due to lower transportation and energy-intensive manufacturing costs, economists said.
    However, attacks by Houthi militias on merchant ships in the Red Sea — a major trade route — are causing freight costs to spike, potentially leading some goods deflation to reverse, Zandi said.

    Lower energy prices also put downward pressure on food transportation to store shelves.
    Egg and lettuce prices, for example, have also declined significantly after having soared in 2022. Among the reasons for those initial shocks: a historic outbreak of avian influenza in the U.S., which is extremely lethal among birds such as egg-laying hens, and an insect-borne virus that raged through the Salinas Valley growing region in California, which accounts for about half of U.S. lettuce production.

    How measurement quirks affect price data

    Elsewhere, some deflationary dynamics are happening only on paper.
    For example, the U.S. Bureau of Labor Statistics, which compiles the CPI report, controls for quality improvements over time. Electronics such as televisions, cellphones and computers continually get better. Consumers get more for roughly the same amount of money, which shows up as a price decline in the CPI data. 
    Health insurance, which falls in the “services” side of the U.S. economy, is similar.

    The Bureau of Labor Statistics doesn’t assess health insurance inflation based on consumer premiums. It does so indirectly by measuring insurers’ profits. This is because insurance quality varies greatly from person to person. One person’s premiums may buy high-value insurance benefits, while another’s buys meager coverage.
    Those differences in quality make it difficult to gauge changes in health insurance prices with accuracy.
    The 27.1% decline in health insurance prices last year reflects smaller insurer profits in 2021 relative to 2020.
    These sorts of quality adjustments mean consumers don’t necessarily see prices drop at the store — only on paper. More

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    Flight cancellations pile up as winter storm, 737 Max 9 grounding disrupt travel

    Airlines canceled about 2,000 U.S. flights Friday as severe winter weather and the grounding of the Boeing 737 Max 9 disrupted travel.
    Storms in the Midwest helped drive more than 4,500 nationwide delays and disruptions at major hubs in Chicago and Detroit.
    Alaska Airlines announced Friday they would cancel all flights on the Max 9 through Sunday.

    An Embraer E175LR passengers aircraft of American Eagles airlines (C) taxxing before take-off to Pittsburg is seen at La Guardia Airport on January 9, 2024.
    Charly Triballeau | Afp | Getty Images

    Airlines canceled about 2,000 U.S. flights Friday as they grapple with winter weather and the grounding of Boeing 737 Max 9 planes. 
    Storms in the Midwest helped drive more than 4,500 delays, with major disruptions around Chicago and Detroit, major hubs for the largest U.S. carriers, according to flight-tracker FlightAware.

    About 40% of flights at Chicago’s O’Hare International Airport, a hub for United Airlines and American Airlines, were canceled after a snowstorm led to an over two-hour ground stop. Detroit Metropolitan Wayne County Airport, a hub for Delta Air Lines, had about 20% of flights Friday either delayed or canceled due to the storms.
    Southwest Airlines, which has a big operation out of Chicago Midway, canceled more than 400 flights, while more than 900 were delayed.
    United canceled about 10% of its mainline flights and delayed about 20%.
    Last week, the Federal Aviation Administration grounded Boeing 737 Max 9s after a door plug blew off an Alaska Airlines flight, so the jets can undergo inspections. That grounding has continued to disrupt travel for both United and Alaska Airlines, the only two U.S. airlines that operate the aircraft.
    Alaska Airlines said Friday it would cancel all flights on the Max 9 through Sunday as it waits for documentation from Boeing and the FAA to begin inspections.

    About 20% of the carrier’s flights were canceled Friday and more than 10% were delayed, FlightAware data showed. Alaska said that between 110 and 150 flights per day would be impacted by the grounding of the Max 9. 
    “We regret the significant disruption that has been caused for our guests by cancellations due to these aircraft being out of service,” the company said. More

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    FAA says it will audit Boeing’s production line after 737 Max 9 accident

    The FAA said it will audit Boeing’s production line after a door plug blew out on an Alaska Airlines 737 Max 9 a week ago.
    The agency said it is considering the use of an independent third party to oversee Boeing inspections and quality.
    The FAA grounded more than 170 Boeing 737 Max 9s, most of the world’s fleet, after that incident.

    The Federal Aviation Administration on Friday said it will audit Boeing’s production line, a week after a door plug blew off an Alaska Airlines 737 Max 9.
    The agency said it is considering using “an independent third party” to oversee Boeing inspections and quality of its manufacturing.

    The FAA grounded more than 170 Boeing 737 Max 9s, most of the world’s fleet, after that incident. The agency said the audit applies to Boeing’s production line for that plane model and its suppliers “to evaluate Boeing’s compliance with its approved quality procedures.”
    “The results of the FAA’s audit analysis will determine whether additional audits are necessary,” said the agency.
    The FAA said it will also evaluate risks around Boeing’s ability to self-monitor quality control and other aspects of airplane production. The agency on Thursday announced an investigation into whether the manufacturer failed to ensure its planes were airworthy and conformed to their design.
    “The grounding of the 737-9 and the multiple production-related issues identified in recent years require us to look at every option to reduce risk,” FAA Administrator Mike Whitaker said in a statement.
    Boeing said in a statement it welcomes the FAA’s announcement will “cooperate fully and transparently with our regulator. We support all actions that strengthen quality and safety and we are taking actions across our production system.”

    Earlier this week, Boeing CEO Dave Calhoun told staff that the company acknowledges its “mistake” and said it would move past the incident, the latest defect and the most serious in recent years from Boeing.
    No serious injuries were reported on the Alaska Airlines flight, and no one was seated next to the panel that blew out nor in the next seat over.
    Still, the incident ramps up scrutiny on Boeing’s quality problems and on regulators that oversee the industry.
    “The FAA conducts final safety checks and issues airworthiness certificates for newly produced Boeing 737s,” the agency said.Don’t miss these stories from CNBC PRO: More

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    Citigroup is cutting 10% of its workforce in CEO Jane Fraser’s corporate overhaul

    Citigroup said it was cutting 10% of its workforce in a bid to help boost the embattled bank’s results and stock price.
    In November, CNBC reported that managers and consultants involved in CEO Jane Fraser’s restructuring discussed job cuts of 10%.
    The company has since executed several waves of layoffs, with another round of cuts set for Jan. 22, according to a source.

    Citigroup CEO Jane Fraser at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2023.
    Adam Galica | CNBC

    Citigroup said it was cutting 10% of its workforce in a bid to help boost the embattled bank’s results and stock price.
    About 20,000 employees will be let go over the “medium term,” New York-based Citigroup said Friday in a slideshow tied to fourth-quarter earnings. While it wasn’t immediately clear how long that is, the bank has previously used that term to denote a three- to five-year period.

    Citigroup had roughly 200,000 workers at the end of 2023, excluding Mexican operations that are in the process of being spun out, according to the presentation.
    Citigroup CEO Jane Fraser announced a sweeping overhaul of the third-largest U.S. bank by assets in September. The company has been left behind by peers since the 2008 financial crisis as Fraser’s predecessors couldn’t get a handle on expenses and is the lowest valued among the six biggest U.S. banks.
    In November, CNBC reported that managers and consultants involved in the effort — known internally by the code name “Project Bora Bora” — discussed job cuts of 10% in several major businesses.

    Next round of cuts

    The company has since executed several waves of layoffs, beginning with the top layers of the bank, with another round of cuts set for Jan. 22, according to a person familiar with the matter. A Citigroup spokeswoman declined to comment.
    American banks have been trimming jobs all throughout the past year, led by Wells Fargo and Goldman Sachs, to lower costs amid stagnant revenue. Citigroup had been a notable outlier, maintaining staffing levels at around 240,000 for all of 2023, including its Mexico operations.

    Citigroup said Friday it booked a $780 million charge in the fourth quarter tied to Fraser’s restructuring project, and that it may post another $1 billion in severance and other expenses in 2024. The moves could help trim up to $2.5 billion in costs over time, the bank said.

    Permanent vacation

    In a footnote to its presentation, Citigroup said the 20,000 job cuts could be “slightly lower” if it chooses to use internal resources rather than outsource functions.
    Given the outlook for thousands of more job cuts over the next few years, some Citigroup employees are using vacation time or mental health leave to search for their next position, said the person familiar with the matter, who declined to be identified speaking about personnel matters.
    “People are looking aggressively,” the person said. “I know senior VPs who are on vacation now, but they’re never coming back.”

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    Bill Ackman is creating an activist organization to fight antisemitism, reform higher education

    Hedge fund billionaire Bill Ackman said Friday that he’s starting an activist organization to fight antisemitism and reform higher education.
    The Pershing Square Capital CEO was one of the loudest critics of Harvard, his alma mater, as well as the University of Pennsylvania and the Massachusetts Institute of Technology, after Hamas’ Oct. 7 attack on Israel, charging their presidents with not taking a strong stance against antisemitism on campus.

    Hedge fund billionaire Bill Ackman, who recently fought a high-profile battle against Harvard University, said Friday that he’s starting an activist organization to fight antisemitism and reform higher education.
    “It’s going to be a ‘think-and-do tank.’ It’s going to be an activist,” Ackman said in an interview with CNBC’s Andrew Ross Sorkin on “Squawk Box.” “I’m standing up an organization very shortly to focus on precisely what’s going on. … We’re going to study these issues. And we’re going to come up with solutions to problems and we’re going to implement.”

    The Pershing Square Capital CEO was one of the loudest critics of Harvard, his alma mater, as well as the University of Pennsylvania and the Massachusetts Institute of Technology, after Hamas’ Oct. 7 attack on Israel, charging their presidents with not taking a strong stance against antisemitism on campus.
    Harvard president Claudine Gay later resigned following sharp criticism of her testimony before Congress in early December where she and other academic leaders were grilled over tolerance of antisemitism on campus. In addition, Gay faced accusations of plagiarism in her own published work.
    Ackman’s fight took a turn when online publication Business Insider posted a story that included similar accusations of plagiarism against his wife, Neri Oxman, who is an architect, designer and a former professor at MIT.
    “It started with antisemitism on campus, and then I got concerned about governance at Harvard. … Then I have broader concerns about higher education generally,” Ackman said. “I think these are very important issues. And these are issues that will require resources to be focused on.”
    Ackman, whose Pershing Square oversees nearly $15 billion in assets under management, said he’s going to hire a CEO and put together a board of directors for the new organization.

    “This kind of activism now requires… a serious team,” Ackman said. “We’re going to go after these issues in a very aggressive way.”Don’t miss these stories from CNBC PRO: More