Raphael Stevens

The U.S. and EU reached an agreement to extend a suspension of EU tariffs on American whiskey.
A 50% levy was set to take effect at the start of next year, and the suspension will last until March 31, 2025.
U.S. whiskey distillers worried the tariffs could hamper their business in a key market.

Jack Daniel’s Tennessee Whiskey.
Getty Images

U.S. whiskey distillers are breathing a sigh of relief as they will avoid a looming 50% tax on shipments to Europe.
The European Union said Tuesday it would extend the suspension of tariffs on U.S. whiskey until March 31, 2025. The 50% levy, which came in the context of a broader steel and aluminum dispute between the U.S. and the European bloc, was set to take effect in the new year.

“For the past two years, the United States and European Union have been engaged in critically important negotiations,” said U.S. Trade Representative Katherine Tai, who oversaw the deal. “Our goal is to forge a forward-looking arrangement that will allow us to join forces economically to incentivize fair and clean production and trade in the steel and aluminum sectors.”
American whiskey makers found themselves in the middle of a trade dispute that started in 2018 after former President Donald Trump imposed tariffs on steel and aluminum. The EU responded with taxes on a variety of select U.S. products, as they aimed to apply pressure on politicians in Republican and swing states.
The EU initially set the whiskey tariff at 25%. American whiskey exports to the EU then plunged 20% from 2018 to 2021, falling from $552 million to $440 million, according to analysis by industry trade association Distilled Spirits Council of the U.S.
The measure was suspended in October 2022 as part of a mutual agreement to put the U.S. metals levies and EU tariffs on hold until Jan. 1 next year. They would have doubled to 50% at that time.
American whiskey exports to the EU increased 29% in 2022 compared to 2021, reaching pre-trade dispute levels of $566 million that year.

“I am glad the EU has announced that it is taking steps to join us in extending the time for these negotiations and will follow our recommendation by continuing to suspend its tariffs on U.S. products,” Tai said.
In order to fulfill the agreement, the U.S. still needs to extend a suspension on steel and aluminum taxes to the E.U.
DISCUS also urged President Joe Biden to negotiate an end to tariff disputes.
“Until the threat of these tariffs returning is fully removed,” DISCUS President and CEO Chris Swonger said. “The uncertainty will continue to restrict American Whiskey export growth in our most important international market.”

‘Whiskey River’ runs dry

The deal is good news for American whiskey makers at a time when the spirit is losing market share.
Whiskey popularity is falling among American consumers. In 2022, agave-based spirits tequila and mezcal overtook American whiskey to become the second-fastest growing spirits category by revenue and volume within the U.S., according to analysis by DISCUS.
Brown-Forman — maker of Jack Daniels and Woodford Reserve — reported weak whiskey sales for the first half of its current fiscal year.
Whiskey net sales at the company fell 2% year over year, while net sales for the company’s tequila portfolio grew 2%.
“I do think American whiskey and tequila are still the two strongest categories in the U.S. spirits business,” said Brown-Forman CEO Lawson Whiting on the company’s latest earnings call. “Tequila is coming down off of sky-high numbers where American whiskey was steady. High, but not as high as tequila.”Don’t miss these stories from CNBC PRO: More

“Aquaman and the Lost Kingdom” arrives in theaters, marking the final installment in the DC Extended Universe film franchise and likely Jason Momoa’s final turn as the titular hero.
Audiences have been lackluster on superhero flicks this year across the board.
One bright spot for the “Aquaman” sequel is that it faces limited competition in theaters this weekend and could benefit from the upcoming holidays.

Jason Momoa stars as Arthur Curry, aka Aquaman, in Warner Bros.’ “Aquaman and the Lost Kingdom.”
Warner Bros. Discovery

Stick a trident in it.
“Aquaman and the Lost Kingdom” opens Friday, marking the final installment in Warner Bros. Discovery’s DC Extended Universe film franchise and likely Jason Momoa’s final turn as the titular hero.

The newly minted heads of DC Studios, James Gunn and Peter Safran, are set to reboot of the franchise starting in 2025 with “Superman: Legacy.” At present, Aquaman isn’t front and center character in the nearly dozen film and TV projects unveiled during Gunn and Safran’s slate announcement in January.
Prior to Momoa’s rugged and snappy performances as the character, Aquaman was long the butt of jokes among comic book fans and Hollywood, making for a memorable extended gag on the HBO showbiz comedy “Entourage.” But the former “Game of Thrones” star made the character cool.
Nonetheless, “Aquaman and the Lost Kingdom” is a film released in limbo, with everything and nothing riding on its success. If it flops, it can be relegated to a bygone era of DC storytelling. If it becomes a bona fide blockbuster, it’s a final feather in the cap of a beleaguered decade of superhero storytelling.
Safran is hopeful that audiences will show up to theaters to support Momoa, and he left the door open to the star perhaps returning.
“If it’s the end of the journey, fine. If it goes on, that’s also fine,” he told attendees Tuesday at an IWC Schaffhausen event celebrating the collaboration between the watchmaker and the studio.

“Jason will always have a home at DC and Warner Brothers,” added Safran, a producer on both “Aquaman” movies. “I really hope that people will come out and support his potentially last stand as Aquaman.”
Momoa, for his part, has said publicly that he’s hopeful there is space for him to return to the character in the future. But he admitted that “it’s not looking too good.”
The film is expected to open between $32 million and $42 million at the domestic box office, which would be around half of what the first “Aquaman” film generated during its debut in 2018. Similarly, the long-term domestic box office forecast is that it will reach $105 million to $168 million before the end of its run, half of what the original tallied five years ago.
It should be noted that the review embargo for “Aquaman and the Lost Kingdom” doesn’t lift until Thursday, leaving little time for audiences to read through reviews before deciding to see the film this weekend. In some cases, a narrow window between the critics’ embargo and a movie’s release can be a sign that a studio lacks confidence in the film and fears poor reviews could keep moviegoers away. In others, it is employed as a way of preventing major spoilers from leaking out to the public.
One bright spot for the “Aquaman” sequel is that it faces limited competition in theaters this weekend and could benefit from the upcoming holidays, as kids are on school vacation and parents seek out-of-home entertainment.
Also set for release this weekend is Universal’s newest animated feature “Migration,” which will likely entice families with younger children. There’s also Warner Bros.’ “Wonka,” which is entering its second week in theaters. “Aquaman and the Lost Kingdom” will rely less heavily on these younger moviegoers and more so on the male demographic aged 18 to 34 for whom there is limited stock in theaters this month.
“‘Aquaman and the Lost Kingdom’ [should] be judged when the dust settles in early January and not on its opening weekend performance,” said Paul Dergarabedian, senior media analyst at Comscore.

Rough seas for superheroes

Marvel Studios’ “Ant-Man and the Wasp: Quantumania.”

Still, audiences have been lackluster on superhero flicks this year across the board. Last month, Disney’s Marvel Cinematic Universe posted its worst-ever opening weekend in its history with “The Marvels.” The film has grossed less than $200 million globally since its Nov. 10 release. Disney stopped reporting theatrical grosses for the film after Dec. 3.
DC has also faced difficulties at the box office. “Shazam: Fury of the Gods” and “Blue Beetle” both tallied less than $150 million during their global run in theaters this year, and the much-hyped “The Flash” secured less than $275 million worldwide.
“Marvel and DC have fallen into the trap that every genre eventually runs into — becoming predictable,” said Jeff Bock, senior box office analyst at Exhibitor Relations. “After so much success this was bound to happen. Time to break up the multiverse and concentrate on making singular superhero movies that stand on their own. Not every comic book flick needs connective tissue.”
The new “Aquaman” film has a lot to live up to, as well. The first film surprised Hollywood when it generated more than $1 billion at the global box office, making it the highest-grossing film in the DC Extended Universe franchise, which is traced back to 2013’s “Man of Steel.” Much of the interest from fans came following the 2017 release of “Justice League,” as moviegoers expected “Aquaman” to launch the franchise forward.
“The first ‘Aquaman’ back in December of 2018 was an enormous hit that went on to earn over $1 billion at the global box office,” said Dergarabedian. “But with 71% of the revenue coming from outside of North America this was clearly a franchise that relies heavily on the considerable star power of Jason Momoa internationally and the interest of audiences outside of The United States.”
The new “Aquaman” will also be released in China. But non-Chinese movies have not seen the same benefit in China as in the pre-pandemic years.
While Disney and 20th Century’s “Avatar: The Way of Water” secured $245 million in China, American superhero flicks have failed to drum up interest in the country in the last year. Marvel’s “Ant-Man and the Wasp: Quantumania” generated only $40 million in ticket sales, DC’s “The Flash” took in just $25 million from the region, and the MCU’s “Black Panther: Wakanda Forever” grabbed just $15 million. “Guardians of the Galaxy: Vol. 3” grossed $86 million in China.

A future for Momoa’s Aquaman?

Source: Warner Bros. | DC Comics

“The big question that needs to be answered: Can Aquaman exist outside the DC Universe in the same way Batman does?” Bock said.
Matt Reeves’ 2022 “The Batman,” a standalone film starring Robert Pattinson as the dark knight, generated more than $750 million in ticket sales globally and was not connected to any other project within the DC universe.
Similarly, Sony has seen success with its Spider-Verse films, generating nearly $400 million worldwide from the first animated film “Spider-Man: Into the Spider-Verse” and nearly $700 million globally from 2023’s “Spider-Man: Across the Spider-Verse.”
“It’s not canon. It lives in its own lane. And people love the character and that two versions can coexist,” said Josh Brown, CEO at Ritholtz Wealth Management and a CNBC contributor.
Even if DC Studios is willing to keep Momoa on as Aquaman in a pocket universe, there’s still the question of when a film like that could be released. Right now, Safran and Gunn’s new DC slate has five films on the docket, starting with the 2025 Superman flick. Characters to be featured include Supergirl, the duo of Batman and Damian Wayne, Swamp Thing and The Authority superhero team.
On the TV side, DC is leaning into the Lantern Corps., the Amazons of Themyscira, Booster Gold, and Amanda Waller from “Suicide Squad” and “Peacemaker.”
“There are only so many times that franchise comics characters can be retooled, reimagined, and repackaged within a certain limited time-frame,” said Peter Csathy, founder and chair of advisory firm Creative Media. “Disney’s Marvel films are experiencing that reality play out right now in the marketplace.”
Csathy also pointed to Disney’s Star Wars franchise, which paused its theatrical slate in favor of developing long-form television series to rebuild the series’ quality and bolster its fan base.
“Audiences need time to pass before excitement and anticipation builds again,” said Csathy.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Migration.” More

Interest rates fell again, but mortgage demand was “tepid” last week, according to the Mortgage Bankers Association.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.83% from 7.07%.
The Mortgage Bankers Association also predicted good news ahead for the housing market, despite expecting a “mild recession” in the first half of next year.  

House for sale with “For Sale” real estate sign in yard in spring or summer season. No people.
Fstop123 | E+ | Getty Images

Mortgage demand fell last week compared with the previous week, despite a continued drop in rates, according to the Mortgage Bankers Association’s seasonally adjusted index. 
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.83% from 7.07%, with points increasing to 0.60 from 0.59 (including the origination fee) for loans with a 20% down payment, the group said Wednesday. Even with the recent decline, rates are still much higher than they were at the start of the Covid pandemic.

“With the positive news about the drop in inflation, and the FOMC [Federal Open Market Committee] projections proclaiming a pivot towards rate cuts, the 30-year fixed mortgage rate reached its lowest level since June 2023,” said Mike Fratantoni, MBA senior vice president and chief economist.
“At least as of last week, borrowers’ response to this rate move was rather tepid,” Fratantoni said.
Applications to refinance a home loan dropped 2% for the week ended Friday, after jumping 19% the week before, according to the MBA. Refinance demand was 18% higher than the same week one year ago, however.
Applications for a mortgage to purchase a home declined 1% for the week and were 18% lower than the same period last year.
Despite the drop in demand, the Mortgage Bankers Association predicted good news ahead for the market, despite expecting a “mild recession” in the first half of next year.  

“We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market,” the group said, referring to the Federal Reserve’s recent signal that it is looking to cut its benchmark rate multiple times next year. “We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations.”
The association said it expects mortgage origination volume to increase 22% in 2024 to $2 trillion, with a 14% rise in purchase volume and a 56% jump in refinance demand.
Due to next week’s Christmas holiday, the MBA will release mortgage application data for the weeks ending Dec. 22 and 29 on Jan. 3.
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Drugmakers are closing out a year when they marked historic firsts that will shape the broader pharmaceutical industry in 2024 and beyond. 
Covid vaccines and treatments were the biggest losers this year, as demand plummeted to new lows while cases and public concern about the virus dwindled.
Wall Street turned its focus to a handful of newer treatments in different disease areas, including weight loss medications and a new Alzheimer’s drug.

Soumyabrata Roy | Nurphoto | Getty Images

Drugmakers are closing out a year when they achieved several historic firsts that will shape the pharmaceutical industry in 2024 and beyond. 
The weight loss drug market transformed into the pharmaceutical industry’s newest gold rush this year, as demand for costly but highly effective treatments from Novo Nordisk and Eli Lilly surged. Patients and investors also saw that the benefits of the medicines could extend beyond their original purposes.

The Alzheimer’s disease space also got plenty of attention, with the approval and launch of the first-ever treatment proven to slow the progression of the memory-robbing condition.
What’s more, the world’s first vaccines against respiratory syncytial virus rolled out in several markets this fall, and U.S. regulators last week approved the first-ever gene-editing therapy, which will be used to treat sickle cell disease. 
Covid vaccines and treatments were the biggest losers of this year, as demand plummeted to new lows while cases and public concern about the virus dwindled from their pandemic peaks. For the first time, those products became an enormous burden on the industry, prompting Wall Street to turn its focus to the breakthroughs in weight loss drugs and other treatments.
A new, controversial policy also rocked the pharmaceutical industry this year: Medicare drug price negotiations, which aim to rein in prescription drug costs in the U.S. To drugmakers, the policy is a new headache that could eat into revenue and profits. 

Weight loss drugs soared in popularity

For years, the weight loss market was stagnant with products that were ineffective or carried unpleasant side effects. Newer obesity and diabetes drugs such as Wegovy and Ozempic from Novo Nordisk and Mounjaro from Eli Lilly changed that, raking in billions for the drugmakers and catapulting them to the center stage of the pharmaceutical industry.

Shares of Eli Lilly are up about 58% this year, making it the largest U.S. pharmaceutical company based on its market cap of more than half a trillion dollars. Novo Nordisk’s stock is up about 47% for the year, and the drugmaker briefly became Europe’s most valuable company in September. 
Now, some analysts believe weight loss and diabetes drugs could grow into a $100 billion market by 2030. 
The popularity of those treatments has even prompted some analysts to speculate that the drugs could reshape other industries, though it’s still unclear what long-term effect they will have on food producers and restaurants, among other businesses. 

George Frey | Bloomberg | Getty Images

Other drugmakers, including Pfizer and Amgen, are scrambling to capitalize on the weight loss drug industry gold rush. Many companies released early trial results on their experimental obesity drugs this year, and expect to publish more data in 2024. 
But the weight loss drug market also faced several hurdles this year — and the issues aren’t expected to go away in 2024.
High demand pushed Wegovy, Ozempic and Mounjaro into supply shortages. Some analysts expect improvements in 2024 as Eli Lilly and Novo Nordisk increase production capacity, but the issue could take years to fully resolve. 
Also, many U.S. insurers and employers don’t cover weight loss drugs due to fears that the treatments, which cost $1,000 or more per month, will strain their budgets. Medicare is prohibited by law from covering weight loss treatments, but lawmakers have introduced a bill aiming to change that.

Leqembi was the Alzheimer’s drug breakthrough 

The first drug found to slow the progression of Alzheimer’s disease won approval by the Food and Drug Administration this year, marking a historic moment for the 6 million older Americans who have the hard-to-treat condition. The drug, sold under the name Leqembi, is from the Japanese drugmaker Eisai and its partner Biogen. 
Medicare started covering the treatment, under some conditions, as soon as it was approved, which was a crucial step for accessibility. Eisai has priced Leqembi at $26,500 per year before insurance.
Leqembi is not a cure. But the medication slowed cognitive decline from early Alzheimer’s disease by 27% over 18 months in a clinical trial. 
The drug, which targets a brain protein associated with Alzheimer’s disease, is administered twice monthly at specialized treatment centers through intravenous infusion. An injectable, more convenient form of the therapy could be on the horizon. 

Jay Reinstein, right, who suffers from Alzheimer’s, sits with his father, Max Reinstein, prior to receiving a PET scan that will determine whether he is eligible to take Leqembi, at MedStar Georgetown University Hospital in Washington, D.C., June 20, 2023.
Michael Robinson Chávez | The Washington Post | Getty Images

Eisai and Biogen said the rollout of Leqembi had a slow start this year, partly because providers needed to establish more treatment centers after the approval. 
Eisai reported $2 million in third-quarter sales of Leqembi. Some analysts had projected $12 million in revenue from the drug. 
About 800 people had received Leqembi as of Biogen’s third-quarter earnings report in November. That makes Biogen’s target of 10,000 patients by the end of March 2024 look increasingly difficult to hit.
But Biogen CEO Chris Viehbacher noted during the earnings call that “this was always going to be a gradual launch.”

Covid products sank, while RSV shots gained steam 

The once-booming market for Covid products saw a steep drop in demand this year as the world emerged from the pandemic and began to rely less on protective vaccines and treatments, including a new round of shots that rolled out this fall. 
Covid vaccine makers saw their sales and shares plunge. 
Pfizer’s stock is down about 45% this year and is trading below where it was at the start of the pandemic. The company announced a sweeping cost-cutting plan before it swung to a loss in the third quarter, largely due to inventory write-offs for unused Covid products.
Shares of Moderna have fallen about 50% this year. Falling revenue is pressuring Moderna’s bottom line, and the company posted a loss for two consecutive quarters. 

Pharmacist Aaron Sun administers Pfizer’s new Covid vaccine to Jimmy Smagula at a CVS Pharmacy in Eagle Rock, California, Sept. 14, 2023.
Irfan Khan | Los Angeles Times | Getty Images

Both companies hope that other products, including vaccines against RSV, can help turn things around.
Pfizer and GlaxoSmithKline made history this year after they launched the world’s first RSV vaccines, which won FDA approval for older adults. Pfizer’s RSV shot for expectant mothers, which passes on protection to their fetuses, also won approval this year. 
The rollout of those shots appears to be off to a fast start: GSK in November said its shot pulled in about $860 million in its first few months on the market and “has lots of headroom to grow.” 
Pfizer in November said its RSV shot raked in $375 million, which was considerably less than GSK, but the company still called it “very fast uptake” that will continue in 2024. 
Meanwhile, Moderna expects the FDA to decide whether to approve its RSV shot for older adults in 2024. 

Medicare drug negotiations garnered controversy

For the first time in history, Medicare is starting to negotiate the prices of prescription drugs with manufacturers as part of President Joe Biden’s Inflation Reduction Act. 
That controversial process aims to make costly medications more affordable for older Americans, but the pharmaceutical industry views the process as a threat to its revenue growth, profits and drug innovation.
The Biden administration in August unveiled the first 10 drugs that will be subject to price talks, which include blood thinners from Bristol-Myers Squibb and Johnson & Johnson, and diabetes drugs from Merck and AstraZeneca. The agreed-upon prices for those drugs are scheduled to go into effect in 2026. 

First 10 drugs subject to price negotiations

Eliquis, made by Bristol-Myers Squibb, is used to prevent blood clotting to reduce the risk of stroke.
Jardiance, made by Boehringer Ingelheim, is used to lower blood sugar for people with Type 2 diabetes. 
Xarelto, made by Johnson & Johnson, is used to prevent blood clotting, to reduce the risk of stroke.
Januvia, made by Merck, is used to lower blood sugar for people with Type 2 diabetes.
Farxiga, made by AstraZeneca, is used to treat Type 2 diabetes.
Entresto, made by Novartis, is used to treat certain types of heart failure.
Enbrel, made by Amgen, is used to treat rheumatoid arthritis. 
Imbruvica, made by AbbVie, is used to treat different types of blood cancers. 
Stelara, made by Janssen, is used to treat Crohn’s disease.
Novo Nordisk’s Fiasp and NovoLog are insulins; multiple variations will be considered as one drug for the purposes of negotiation.

In October, all companies that make the drugs on the list signed agreements to join the negotiations. But more than a third of the companies have sued the federal government to halt the negotiations, and most of those cases are still playing out in federal courts across the U.S. 
Notably, a federal judge in September denied a preliminary injunction sought by the Chamber of Commerce, one of the nation’s largest lobbying groups, which aimed to block the price talks.
The negotiation process officially begins in 2024. Medicare will make an initial drug price offer to manufacturers in February, and the companies have a month to accept or make a counteroffer. The negotiations will end in August, with agreed-upon prices published Sept. 1. More