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    Why a small China-made EV has global auto execs and politicians on edge

    The China-built BYD Seagull, a small all-electric hatchback, starts at just 69,800 yuan (or less than $10,000), and reportedly banks a profit for the increasingly influential Chinese automaker.
    There’s fear among global automakers that BYD and other Chinese rivals could flood their markets, undercutting domestic production and vehicle prices.
    “Ultimately the Chinese will come to the U.S.,” said Marin Gjaja, chief operating officer for Ford’s EV unit, during a recent interview with CNBC.

    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

    LIVONIA, Mich. – A small electric vehicle is having a big impact on the global automotive industry.
    It’s not the EV itself that’s making waves but its price — and its potential to disrupt domestic auto industries around the world.

    The China-built BYD Seagull, a small all-electric hatchback, starts at just 69,800 yuan (or less than $10,000), and reportedly banks a profit for the increasingly influential Chinese automaker.
    That latter point — EV profits where U.S. automakers have mostly failed to turn any — combined with the expansion of Chinese automakers into Europe, Latin America and elsewhere has automotive executives and politicians, from Detroit and Texas to Germany and Japan, on edge.
    The Seagull could be a “clarion call for the rest of the auto industry,” said Terry Woychowski, a former General Motors executive who now serves as president of automotive at engineering consulting firm Caresoft Global. “It’s a significant event.”
    Though the Seagull isn’t yet sold on U.S. soil, BYD is expanding its vehicles globally, and some believe it’s only a matter of time before more China-made vehicles arrive in the U.S.

    Terry Woychowski, president of automotive at engineering consulting firm Caresoft Global, inside the company’s large teardown and benchmarking facility in Livonia, Michigan.
    Caresoft Global

    There’s fear among global automakers that Chinese rivals like the Warren Buffett-backed BYD could flood their markets, undercutting domestic production and vehicle prices to the detriment of their own auto industries.

    “The introduction of cheap Chinese autos — which are so inexpensive because they are backed with the power and funding of the Chinese government — to the American market could end up being an extinction-level event for the U.S. auto sector,” the Alliance for American Manufacturing, a U.S. manufacturing advocacy group, said in a report last month.
    BYD sold 1.57 million battery EVs last year, up from just 130,970 all-electric vehicles in 2020. That sales growth was enough to surpass Tesla to become the world’s largest producer of electric vehicles in late 2023.
    The rise of BYD and other Chinese automakers led Tesla CEO Elon Musk in January to warn that Chinese automakers will “demolish” global rivals without trade barriers.

    Inside Caresoft’s EV area for benchmarking and teardown at its facility in Livonia, Michigan.

    Bernstein reports BYD’s growth, including sales of non-EVs, has come by 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 beginning of the year.
    BYD did not respond for a request for comment.

    How the Seagull stacks up

    Driving the Seagull is no different than driving the Chevrolet Bolt, Nissan Leaf or BMW i3. It accelerates quickly. It’s quiet. It has nice-looking screens and a mix of plastic and soft touch points, including sporty and comfortable seats.
    The Seagull, also known as the BYD Dolphin Mini in Latin America, is slightly smaller than GM’s now-discontinued Chevrolet Bolt EV.
    Its reported range of up to roughly 190 miles on a single charge (or 250 miles for certain models), is below that of many EVs on sale today in the U.S. but in line with many first-generation all-electric vehicles. The vehicle’s top speed of about 80 mph and just 74 horsepower dwindle in comparison with most EVs currently on sale in the U.S.
    But its primary differences come in the construction, batteries and sourcing of parts, according to Caresoft.

    Caresoft, an engineering benchmarking and consulting firm, has already torn down one China-built BYD Seagull and is preparing to do another.
    Michael Wayland / CNBC

    The consulting firm tore apart the BYD Seagull piece by piece to benchmark the small EV against vehicles from other startups and traditional automakers. The Livonia, Michigan-based company, with several offices across the globe, has torn down and benchmarked more than 30 China-built EVs from the likes of BYD, Nio, XPENG and others.
    Caresoft digitally and physically analyzes every part of a vehicle, from bolts and latches to seats, motors and battery casings. It then determines how its clients – mainly automakers and suppliers – can improve efficiencies and cut costs in their products.
    Its initial study of the BYD Seagull found it to be efficiently and simplistically designed, engineered and executed, but with unexpected quality and anticipated reliability.
    “What they did do is done very well,” Woychowski said. “It’s efficiently done.”
    For the price it’s a well-equipped vehicle. (BYD even lowered the starting price of the vehicle by 5% earlier this month, down from a roughly $11,000 price earlier this year.)
    Despite the cheap price, the company still makes “some money” on the Seagull or at a minimum breaks even, Caresoft CEO Mathew Vachaparampil said during an automotive conference hosted by the Chicago Federal Reserve in January.

    BYD Seagull
    Michael Wayland / CNBC

    For BYD to sell the Seagull in the U.S., it would have to meet U.S. federal vehicle requirements that would add additional costs to the car. But the EV could likely still arrive on U.S. shores for tens of thousands of dollars cheaper than the current average price of an EV in the U.S., which Cox Automotive reports is more than $52,000.
    BYD last month announced it would begin selling the Seagull/Dolphin Mini EV in Mexico for 358,800 pesos (or about $20,990).
    BYD has found success in its battery technology; internal sourcing, also known as vertical integration; and production of parts, according to Caresoft. Most notable is BYD’s development of lower-cost battery technologies that are far cheaper to manufacture than lithium-ion batteries commonly used in U.S. EVs.
    BYD, which stands for Build Your Dreams, first pioneered its “Blade” battery technologies in smartphones and has since grown into one of China’s most well-known automakers.
    Its focus on vehicle efficiencies is reminiscent of U.S. EV leader Tesla, which has likewise been able to drive down the cost of its vehicles over the years.
    Traditional automakers are only now attempting to emulate some of Tesla’s processes such as its gigacasting manufacturing process and vertical integration of crucial parts such as motors, batteries and other components. Tesla is also quick to adapt.
    The Tesla Model 3, for example, no longer has a floor. Instead, the car’s highly protected battery case takes the place of a traditional vehicle body at the base. That type of change, enacted at Tesla over the last several years, wouldn’t typically take place at a traditional automaker until a full redesign of a vehicle.

    BYD Seagull
    Michael Wayland / CNBC

    BYD is similarly quick to adapt. The company has quickly rolled out new and updated products. It’s also rapidly established manufacturing, as it has its eyes set on factories in Thailand, Brazil, Indonesia, Hungary, Uzbekistan and, potentially, Mexico.
    Add in other advantages such as government support, lower labor costs and rising production capacity, and the company poses a growing threat to global counterparts.

    Growing concerns

    BYD’s rise comes at a precarious time for global auto industry dynamics.
    While China’s automakers expand, America’s traditional automakers have shrunk in both their domestic market and China.
    Their decline in the U.S. has come with the arrival of Japanese automakers such as Toyota Motor, Nissan Motor and Honda Motor, as well as, more recently, South Korean auto giant Hyundai Motor and its Kia unit.
    The so-called Big Three U.S. automakers — GM, Ford and Chrysler, now owned by Stellantis — have watched their U.S. market share deteriorate from 75% in 1984 to about 40% in 2023, according to industry data.
    Politicians in the U.S., concerned about their local auto industries, have taken aim at Chinese imports and lawmakers in Europe have launched a probe into the rise of China-made EVs.

    U.S. President Donald Trump speaks during a signing ceremony for the U.S.-China “phase-one” trade agreement in Washington, D.C., U.S., on Wednesday, Jan. 15, 2020.
    Zach Gibson | Bloomberg | Getty Images

    “We are very concerned about China bigfooting our industry in the United States even as we are building up now this incredible backbone of manufacturing,” Energy Secretary Jennifer Granholm said March 6 during a discussion panel at an Axios event.
    Republican Sen. Marco Rubio of Florida has proposed sharply boosting tariffs on Chinese vehicle imports by $20,000 per vehicle to stop the country “from flooding U.S. auto markets.”
    Currently, Chinese-built EVs are subject to a 27.5% tariff when imported into the U.S. That includes a 2.5% tariff that generally applies to imported cars plus an additional 25% tariff introduced by the Trump administration in 2018 on China-made vehicles.
    Chinese automakers could still build in Mexico, though, and import vehicles to the U.S. from there through the USMCA, formerly the North American Free Trade Agreement, or NAFTA.
    However, former President Donald Trump – the front-runner among Republicans in the 2024 presidential race – on Saturday suggested instituting a 100% tariff on cars made in Mexico by Chinese companies, should he be elected to a second term.

    Employees work on Buick Envision SUVs at General Motors’ Dong Yue assembly plant, officially known as SAIC-GM Dong Yue Motors Co., Ltd., on Nov. 17, 2022, in Yantai, Shandong Province of China.
    Tang Ke | Visual China Group | Getty Images

    “What we’ve seen over time is automotive manufacturers eventually enter all the markets that matter … Ultimately the Chinese will come to the U.S.,” said Marin Gjaja, chief operating officer for Ford’s EV unit, during a recent interview with CNBC.
    Gjaja said while Ford can’t control regulations or Chinese expansion, it can “get really, really competitive on the technologies that customers want” and get more efficient to win customers.
    To compete with Chinese brands such as BYD, Woychowski contends traditional automakers must learn, unlearn and change quickly.
    He said companies such as the Detroit automakers each have a century of procedures, standards and other workflows that they must rethink to better compete against Chinese automakers before vehicles such as the BYD Seagull land on U.S. shores.
    “You have to learn. You have to unlearn and you have to do it quickly,” he said. “Because you’ve been doing something for 100 years, doesn’t mean you should keep doing it. It’s no longer appropriate.”
    – CNBC’s Evelyn Cheng and Dylan Butts contributed to this report. More

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    Nike shares slide on lackluster outlook, slowing China sales

    Nike reported holiday sales that beat expectations, but its growth in China continued to slow.
    The company is in the midst of a broad restructuring to cut costs by about $2 billion over the next three years.
    Sales in North America grew 3%, higher than analysts had expected.

    The Nike logo is displayed at a Nike Well Collective store on February 16, 2024 in Glendale, California. 
    Mario Tama | Getty Images

    Nike’s China sales continued to slow during its holiday quarter, but the retailer beat estimates on the top and bottom line, helped by better than expected growth in North America and price changes.
    Here’s how the company performed in its fiscal 2024 third quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

    Earnings per share: 77 cents vs. 74 cents expected
    Revenue: $12.43 billion vs. $12.28 billion expected

    The company’s reported net income for the three-month period that ended Feb. 29 was $1.17 billion, or 77 cents per share, compared with $1.24 billion, or 79 cents per share, a year earlier. Excluding 21 cents per share related to restructuring charges, earnings per share would have been 98 cents, the company said.
    Sales rose to $12.43 billion, up slightly from $12.39 billion a year earlier.
    In North America, where demand has been unsteady, sales rose about 3% to $5.07 billion, compared with estimates of $4.75 billion, according to StreetAccount.
    Meanwhile, sales in the rest of Nike’s regions came in below estimates. In China, sales reached $2.08 billion, just below the $2.09 billion analysts had expected. Revenues in the region climbed 5%, but growth there has decelerated as demand normalizes after Covid-19 lockdowns.
    In Europe, the Middle East and Africa, revenue fell 3% to $3.14 billion, worse than the $3.17 billion that analysts had expected, according to StreetAccount. In China, sales grew 5% to $2.08 billion, just below the $2.09 billion analysts had expected. Sales in Asia Pacific and Latin America rose 3% to $1.65 billion, below the $1.69 billion analysts had expected, according to StreetAccount.

    Nike shares rose about 5% after its report came out, but later dropped by as much as 7% after it released its guidance for the current quarter and fiscal 2025.
    Excluding restructuring charges, the company reiterated its sales outlook for fiscal 2024, and said it expects revenue to grow by 1%, in line with expectations of up 1.1%, according to LSEG. For the current quarter, it expects revenue to be up slightly, compared to estimates of up 2%, according to LSEG.
    Nike anticipates gross margins will grow 1.6 to 1.8 percentage points, helped by “strategic price increases, lower ocean freight rates, lower product input costs and improved supply chain efficiency,” finance chief Matthew Friend told analysts.
    The improvements are offset by higher markdowns and reduced benefits from Nike’s channel mix, along with foreign exchange headwinds, Friend said. Those shifts in mix are related to changes in how often consumers are shopping online versus in stores or with Nike’s wholesale partners.
    For the full year, it expects gross margins to grow about 1.2 percentage points, below the 1.4 to 1.6 percentage point uptick that analysts had expected, according to StreetAccount. 
    For fiscal 2025, Nike expects revenue and earnings to grow versus the prior year, but it didn’t say by how much. Analysts had expected revenue guidance of up 5.6%, according to LSEG. 
    Friend said Nike is “prudently planning” for revenue in the first half of fiscal 2025 to be down low single digits, reflecting “a subdued macro outlook around the world.” 
    As consumers pull back on spending on discretionary items like clothes and shoes, Nike has spent the past few months focused on what it can control: cutting costs and becoming more efficient so it can drive profits and protect its margins. 
    In December, it announced a broad restructuring plan to reduce costs by about $2 billion over the next three years. It also cut its sales guidance as it warned of softer demand in the quarters ahead. 
    Two months later, it said it was shedding 2% of its workforce, or more than 1,500 jobs, so it could invest in its growth areas, such as running, the women’s category and the Jordan brand.
    The early innings of Nike’s cost cuts, which involve simplifying its assortment, reducing management layers and increasing automation, likely helped the retailer beat earnings expectations in the three months ended Nov. 30, even as it missed sales estimates for the second quarter in a row. 
    The cuts, along with “strategic pricing actions and lower ocean freight rates,” also contributed to a 1.7 percentage point gain in gross margin — the first time the company saw its gross margin increase compared to the prior year in at least six quarters. 
    Nike’s gross margin recovery continued during the quarter. The retailer’s gross margin grew by 1.5 percentage points to 44.8%, driven by “strategic pricing actions and lower ocean freight and logistics costs.” The gains were partially offset by higher product input costs and restructuring charges, company said.
    Nike is still considered a market leader in the sneaker and apparel space, but the category has become more crowded and the retailer has had to work harder to compete. Some analysts say its assortment has lost focus and say the company has fallen behind on innovation, giving up market share to newer entrants like Hoka and On Running, as well as legacy brands like Brooks Running and New Balance. 
    Last month, Nike launched the Book 1, its latest basketball shoes with NBA star Devin Booker. But the release wasn’t well received because it “looked more like a casual sneaker instead of [a] basketball shoe,” according to a research note from Jane Hali & Associates. 
    The firm is now neutral on Nike long term, compared to its previous rating of positive, because it’s unclear where the brand is headed, said senior analyst Jessica Ramirez.
    She’s noticed that Nike has removed a lot of products from its offering, which indicates it’s preparing to bring in new styles. But it’s still unclear exactly what those changes will look like.
    “They’ve already said [those changes are] going to take some time,” Ramirez told CNBC prior to Nike’s earnings release. “Its a little concerning to know they don’t have a solid plan that we know of yet.”
    Read the full earnings release here. More

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    Lululemon shares plunge 10% on weak guidance, slowing North America growth

    Lululemon’s holiday earnings topped expectations, but its growth in North America is stagnating as it laps tougher comparisons and grapples with a slowdown in demand.
    Sales in North America rose 9% compared a 29% increase in the year-ago period.
    The athletic apparel retailer, known for its yoga pants and belt bags, issued weak guidance that came in below estimates.

    Canadian sportswear clothing band, Lululemon store in Hong Kong.
    Budrul Chukrut | Lightrocket | Getty Images

    Lululemon on Thursday reported holiday earnings that topped expectations, but the athletic apparel retailer’s guidance came in below estimates as its growth in North America stagnates.
    Here’s how the company did in its fourth fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

    Earnings per share: $5.29 vs. $5.00 expected
    Revenue: $3.21 billion vs. $3.19 billion expected

    The company’s reported net income for the three-month period that ended Jan. 28 was $669.5 million, or $5.29 per share, compared with $119.8 million, or 94 cents per share, a year earlier. 
    Sales rose to $3.21 billion, up about 16% from $2.77 billion a year earlier.
    Shares fell about 10% in extended trading Thursday.
    Like its peers, Lululemon has been grappling with uncertain demand and a slowdown in discretionary spending that’s hit the apparel space particularly hard. Investors have watched how Lululemon performs in North America, its largest region by sales, as it laps tougher prior year comparisons and contends with consumers who are choosing experiences over goods like clothes and shoes. 
    During the quarter, sales rose 9% in the Americas, compared to 29% growth in the year-ago period. While Lululemon is still growing in the region, the rate has slowed down significantly as Lululemon focuses on expanding internationally.

    Meanwhile, international sales grew 54% on a reported basis, with sales in China growing 78% and 36% in the rest of Lululemon’s markets.
    Comparable sales rose 12% during the quarter, just shy of the 12.3% uptick analysts had expected, according to StreetAccount.
    For the current quarter, Lululemon expects net revenue to be between $2.18 billion and $2.20 billion, representing growth of 9% to 10%. Analysts were expecting a forecast of $2.25 billion, or growth of 12.5%, according to LSEG.
    It expects diluted earnings per share to be between $2.35 and $2.40, below the $2.55 analysts had expected, according to LSEG.
    For the full year, it expects sales to be between $10.7 billion and $10.8 billion, compared with estimates of $10.9 billion, according to LSEG.
    It anticipates diluted earnings per share will be between $14 and $14.20 for the year, compared to estimates of $14.13, according to LSEG.
    “As you’ve heard from others in our industry, there has been a shift in the U.S. consumer behavior of late and we’re navigating what has been a slower start to the year in this market,” CEO Calvin McDonald said on a call with analysts Thursday. “We view this as an opportunity to keep playing offense as we lean into investments that will continue our growth trajectory. Outside the U.S., our business remains strong, and all our international markets in Canada.”
    McDonald added that both traffic and conversions are down in the U.S. He attributed that to a lack of products in sizes zero to four, key sizes for the U.S. customer base, and not enough colorful items.
    Lululemon has long been one of the market leaders for women’s athletic apparel, but the Vancouver-based company is facing more competition than ever. Newer entrants like Alo Yoga and Vuori have been nipping at Lululemon’s market share, and it’s had to work harder to set itself apart in the more crowded category. 
    The retailer has been working to build out its footwear offering and grow its men’s business. During the quarter, it opened its first men’s store in Beijing — a key growth market for the company. In February, it debuted its first men’s sneaker, CityVerse, and plans to launch new running styles for both men and women as performance sneakers continue to be a bright spot in an otherwise stagnant shoewear market. 
    Headed into the holidays, McDonald said Black Friday was the “single biggest day” in the company’s history and he was “encouraged” by the trends he was seeing at the start of the season. But the retailer’s holiday-quarter outlook came in a bit short of analysts’ expectations. 
    In January, it raised that guidance after it saw sales “balanced across channels, categories, and geographies,” finance chief Meghan Frank said in a news release. 
    Read the full earnings release here.  More

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    United starts letting friends and family pool frequent flyer miles

    United is allowing up to five MileagePlus members to pool loyalty points that can be redeemed for flights and other products.
    JetBlue and Frontier already allow customers to pool frequent flyer miles.

    Passengers check in for United Airlines flights at O’Hare International Airport in Chicago, Illinois, Dec. 13, 2022.
    Scott Olson | Getty Images

    Here’s a friendship test: Would you share your frequent flyer miles with your pals? United Airlines is betting customers will be open to it.
    The airline on Thursday started allowing members of its MileagePlus loyalty program to pool their frequent flyer miles and tap into that stash for trips on United.

    A “pool leader” can pick up to four other family members or friends to participate in the joint account. The leader has to be at least 18 years old, but pool members can be any age, so families can use their children’s miles piles toward tickets.
    Customers will still retain their own MileagePlus accounts and can decide how much they want to contribute to the pool. Those miles can be redeemed for flights and other products on United’s site or app.
    Individuals can decide how much to contribute to the pool, and there’s a commitment: “Once those miles are in the pool …they stay in the the pool,” said Luc Bondar, chief operating officer of United’s MileagePlus loyalty program.
    United isn’t the first airline to offer loyalty points pooling. JetBlue Airways lets up to seven customers pool frequent flyer miles, while Frontier Airlines allows up to eight people to pool miles. Airlines also generally allow customers to transfer miles to others, but that often comes with a fee.
    “The strategy for mileage pooling is to appeal to less-frequent to moderately frequent travelers and get them and their family members engaged in the program,” said Henry Harteveldt, a travel analyst and founder of the consulting firm Atmosphere Research Group. “By allowing members of a family to pool their award points together, it increases brand preference across the family … just like with toothpaste.”

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    Medicare can now cover certain weight loss drugs in a big step for patients

    Medicare can start covering certain weight loss drugs – as long as they are approved in the U.S. for an added health benefit. 
    The Centers for Medicare and Medicaid Services said it has issued the new guidance allowing Medicare Part D plans to cover weight loss drugs which receive that approval.
    The agency’s guidance will allow Medicare patients to get coverage for Novo Nordisk’s weight loss injection Wegovy as long as it is prescribed to reduce their risk of heart attacks and strokes.

    Boxes of Wegovy made by Novo Nordisk are seen at a pharmacy in London, Britain March 8, 2024. 
    Hollie Adams | Reuters

    Medicare can start covering certain weight loss drugs for the first time — as long as they are approved for an added health benefit, the Centers for Medicare and Medicaid Services said Thursday.
    That opens the door for broader coverage of some highly popular weight loss medications such as Novo Nordisk’s Wegovy, which is now approved in the U.S. for heart health. Those treatments have skyrocketed in demand over the past year despite their hefty price tags and spotty insurance coverage.

    Under the new CMS guidance, Medicare Part D plans can cover obesity treatments that receive Food and Drug Administration approval for an additional health benefit. Medicare prescription drug plans administered by private insurers, known as Part D, currently cannot cover those drugs for weight loss alone.
    The agency’s guidance means Medicare patients could soon get coverage for Wegovy, as long as they have obesity and a history of heart disease and are prescribed the treatment to reduce their risk of heart attacks and strokes. Earlier this month, the Food and Drug Administration approved Wegovy for that purpose.
    The guidance also will open the door to future coverage of other weight loss medications, many of which are being tested for additional health conditions.
    Drugmakers such as Novo Nordisk, which also makes the diabetes drug Ozempic, and Eli Lilly are studying their weight loss medicines as treatments for fatty liver disease, chronic kidney disease, sleep apnea and more. To be covered, those drugs would need to return late-stage trial results and then be submitted for FDA approval for those uses.
    Wegovy is part of a class of drugs called GLP-1s which mimic a hormone produced in the gut to suppress a person’s appetite and help regulate blood sugar. Coverage for those treatments when used for weight loss is a mixed bag. 

    Roughly 110 million American adults are living with obesity and approximately 50 million of them have insurance coverage for weight loss drugs, a spokesperson for Novo Nordisk said in a statement last week.
    Some of the nation’s largest insurers, such as CVS Health’s Aetna, also cover the treatments.
    But many employers don’t. An October survey of more than 200 companies by the International Foundation of Employee Benefit Plans, or IFEBP, found only 27% provided coverage for GLP-1s for weight loss, compared with the 76% that covered those drugs for diabetes. Notably, 13% of employers indicated they were considering coverage for weight loss.
    A provision of a 2003 law established that Medicare Part D plans can’t cover drugs used for weight loss, but the program does cover obesity screening, behavioral counseling and bariatric surgery. A group of bipartisan lawmakers have introduced legislation that would eliminate the provision, but its fate in Congress is far from certain.
    A CMS spokesperson told CNBC last week that Medicaid programs would be required to cover Wegovy specifically for its new cardiovascular use. By law, Medicaid must cover nearly all FDA-approved medications, but weight loss treatments are among a small group of drugs that can be excluded from coverage. Around 1 in 5 state Medicaid programs currently cover GLP-1 drugs for weight loss.

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    The top 10 richest cities in America

    New York remains the richest city in the U.S. and the world with nearly 350,000 millionaires and 60 billionaires.
    Its millionaire population has grown 48% over the past decade.

    A new report found that New York City is the No. 1 place for ultra-high-net-worth individuals to own a property.
    Alexander Spatari | Moment | Getty Images

    A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
    New York still leads the U.S. and the world when it comes to wealthy cities.

    With nearly 350,000 millionaires and 60 billionaires, the Big Apple is the richest city in America, according to the USA Wealth Report from Henley & Partners and New World Wealth. Despite all the headlines about the rich leaving the city, its millionaire population has grown 48% over the past decade.
    The San Francisco Bay Area ranks as the second richest city in America, despite topping New York for billionaires, with more than 305,000 millionaires and 68 billionaires. The Bay Area’s growth rate over the past 10 years has been even more impressive, with its millionaire population soaring 82%. The surge in investment and growth in artificial intelligence is expected to add another boost to the area.
    The fastest-growing U.S. city for the ultra wealthy among the top 10 is Austin, Texas, which has more than doubled its millionaire population over the past decade to nearly 33,000. Miami is up there too, with 87% growth in millionaires over the past decade — but with one-tenth the New York City total.
    The numbers show that the twin wealth hubs in the U.S. endure, despite wealth migration to the Sun Belt — which is roughly defined as the southern third of the U.S. known for its sunny weather and lower tax states.
    “Despite the recent rise of major wealth hubs in Texas and Florida, the Bay Area and New York City are expected to remain America’s wealthiest cities for many more decades to come,” said Andrew Amoils, head of research at New World Wealth.

    Here are the top 10:

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    Target doubles bonuses for salaried employees as profits recover

    Target is doubling its bonus payments to salaried employees as its profits recover.
    The Minneapolis-based retailer has dealt with a rough stretch marked by weaker discretionary spending, inflated supply chain costs and higher levels of theft.

    A Target store in New York, US, on Monday, March 4, 2024. 
    Shelby Knowles | Bloomberg | Getty Images

    Target will double its bonus payments to salaried employees this year, as the big-box retailer’s profits recover from a bumpy nearly two-year stretch.
    Salaried employees at the Minneapolis-based retailer receive an annual bonus, based on Target’s performance and the eligible amount set as part of their compensation. The retailer will pay 100% of employees’ eligible annual bonus amounts for the most recent fiscal year, a company spokesperson said Thursday. That is an increase from 50% in the prior year.

    In a statement, Target said the annual bonus payout is based on how the retailer performs against sales and profit goals set at the beginning of the fiscal year.
    “Based on Target’s performance in 2023, including the $2 billion in additional profit growth our team delivered that exceeded the goals we set at the beginning of the year, we’re rewarding our team accordingly,” the company statement said.
    Target will pay out the annual cash bonuses in late March. The amount paid out won’t be as high as it could be, however. It tops out at 175% of each employee’s eligible bonus amount.
    The vast majority of Target’s approximately 415,000 employees, such as those at its stores and warehouses, are paid hourly and do not qualify for the bonuses. Yet it does offer bonuses to store and supply-chain leaders, along with many corporate employees. Top executives at Target have a different bonus structure. 
    The increased bonus payout was first reported by Bloomberg.

    Target has dealt with a challenging nearly two-year stretch marked by inventory troubles, weaker discretionary spending, inflated supply chain costs and higher levels of theft. In the holiday quarter, Target’s comparable sales declined for the third quarter in a row, and its e-commerce sales also dropped compared with the year-ago period.
    The discounter said it expects the sales challenges will continue. For the full year 2024, Target said it anticipates comparable sales will be flat to up 2%.
    But the company has improved profits and margins as Target has kept a sharper focus on inventory and as some of its costs, such as freight, have fallen. For the fiscal year, Target said, it expects adjusted earnings per share will range from $8.60 to $9.60. The higher end of that range would top the adjusted earnings per share of $8.94 that it reported for the previous fiscal year.

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    February home sales spike 9.5%, the largest monthly gain in a year, as supply improves

    Sales of existing homes surged 9.5% in February from January to 4.38 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors.
    Inventory rose 5.9% year over year to 1.07 million homes for sale at the end of February.
    Higher demand continued to push the median price higher, up 5.7% from the year before to $384,500.

    Jeff Greenberg | Universal Images Group | Getty Images

    Sales of existing homes surged 9.5% in February from January to 4.38 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors. Housing analysts had been expecting a slight drop.
    Sales were down 3.3% year over year, but it was the largest monthly gain since February 2023. Sales surged the most in the West, up 19.4%, and the South, up 16.4%. Sales in the Northeast were unchanged.

    “Additional housing supply is helping to satisfy market demand,” said Lawrence Yun, NAR’s chief economist. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”
    Inventory rose 10.3% year over year to 1.07 million homes for sale at the end of February. That represents a still low 2.9-month supply at the current sales pace.
    Higher demand continued to push the median price higher, up 5.7% from the year before to $384,500 — the eighth straight month of annual gains. Competition was stiff, with 20% of homes selling above list price.
    The sales count is based on closings, so contracts likely signed in December and January, when the 30-year fixed mortgage rate dropped to the mid 6% range. It is now over 7%, according to Mortgage News Daily.
    First-time buyers, however, did not surge with overall sales. They represented just 26% of buyers in February, down from 28% in January. Roughly 40% is the historical norm. All-cash sales were at 33%, up from 28% the year before.
    “The stock market, maybe that is helping, or the record-high home prices. People from expensive states like California are going to more affordable markets like Florida or Georgia and paying all cash,” Yun said, adding that consumers may be accepting a “new normal” for mortgage rates.

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