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    Here’s the inflation breakdown for October 2023 — in one chart

    The October consumer price index increased 3.2% on an annual basis, according to the Bureau of Labor Statistics’ monthly inflation report.
    That’s down from 3.7% in September and a Covid pandemic-era peak of 9.1% in June 2022.
    Gasoline prices were a big driver of the reduction in October, economists said. Housing inflation also continued to cool.

    A customer holds a fuel nozzle at a Shell gas station in Hercules, California, U.S., on Wednesday, June 22, 2022. President Joe Biden called on Congress to suspend the federal gasoline tax, a largely symbolic move by an embattled president running out of options to ease pump prices weighing on his party’s political prospects. Photographer: David Paul Morris/Bloomberg via Getty Images
    Bloomberg | Bloomberg | Getty Images

    Inflation declined in October, continuing a broad slowdown as gasoline prices retreated during the month. However, price pressures remain under the surface and it may take a while for them to return to their pre-Covid pandemic baseline, economists said.
    “The disinflationary trend is in place,” said Sarah House, senior economist at Wells Fargo Economics. “But we’re getting into a harder part of the cycle.”

    In October, the consumer price index increased 3.2% from 12 months earlier, down from 3.7% in September, the U.S. Bureau of Labor Statistics said Tuesday.

    The CPI is a key barometer of inflation, measuring how quickly the prices of anything from fruits and vegetables to haircuts and concert tickets are changing across the U.S. economy.
    The October reading is a significant improvement on the pandemic-era peak of 9.1% in June 2022 — the highest rate since November 1981. Prices are therefore rising much more slowly than they had been.
    “Inflation is slowly but steadily moderating, and all the trend lines look good,” said Mark Zandi, chief economist at Moody’s Analytics. “It feels like by this time next year inflation will be very close to the [Federal Reserve’s] target, and something the American consumer will feel comfortable with.”
    The Fed aims for a 2% annual inflation rate over the long term.

    Gasoline prices fell in October

    Gasoline prices dropped 5% in October, according to Tuesday’s CPI report.
    Prices for regular-grade gasoline declined by about 33 cents a gallon between Oct. 2 and Oct. 30, from $3.80 a gallon to $3.47, according to the U.S. Energy Information Administration.
    They’ve fallen further since then. Average prices at the pump were $3.37 a gallon nationwide as of Nov. 13, according to AAA.
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    The monthly pullback is an improvement from August and September, when gasoline was a major contributor to increases in overall inflation readings. In August, for example, prices at the pump spiked 10.6% largely due to dynamics in the market for crude oil, which is refined into gasoline.
    “We had a big increase in gasoline prices back in August” and are now seeing an “unwinding of that,” House said.
    “What gas prices give us one month, they can taketh away in another,” she added.

    What’s happening under the surface

    Energy prices can whipsaw inflation readings due to their volatility. Likewise with food.
    That’s why economists like to look at a measure that strips out these prices when assessing underlying inflation trends.
    This pared-down measure — known as the “core” CPI — fell to an annual rate of 4% in October from 4.1% in September. It’s the smallest 12-month change since September 2021, the BLS said.

    Shelter — the average household’s biggest expense — has accounted for more than 70% of the total increase in the core CPI over the past year. Housing inflation declined in October, to 6.7% relative to a year earlier, and has fallen from a peak over 8% in March 2023, according to BLS data.
    A continued moderation in housing costs was “the most encouraging aspect” of the October report and should continue to slow in coming months, Zandi said.
    “It’s got a long way to go to get back to something I think we’d feel comfortable with,” he added. “But we’re heading in that direction.”

    Food inflation was perhaps the one “small blemish” in October, Zandi said. Grocery prices rose 0.3% in October, on a monthly basis, up from 0.1% in September. However, on an annual basis “food at home” inflation increased 2.1% in October, down significantly from a pandemic-era peak over 13% in August 2022, according to BLS data.
    Other categories with “notable” increases in the past year include motor vehicle insurance (which increased 19.2%), recreation (3.2%), personal care (6%), and household furnishings and operations (1.7%), according to the BLS.

    Why inflation is returning to normal

    At a high level, inflationary pressures — which have been felt globally — are due to an imbalance between supply and demand.
    Energy prices spiked in early 2022 after Russia invaded Ukraine.
    Supply chains were snarled when the U.S. economy restarted during the Covid-19 pandemic, driving up prices for goods. Consumers, flush with cash from government stimulus and staying home for a year, spent liberally. Wages grew at their fastest pace in decades, pushing up business’ labor costs.

    Now, those pressures have largely eased, economists said. Supply chains have normalized and the labor market has cooled.
    Plus, the Federal Reserve has raised interest rates to their highest level since the early 2000s to slow the economy. This policy tool makes it more expensive for consumers and businesses to borrow, and can therefore tame inflation.
    Fed Chair Jerome Powell last week said the U.S. still “has a long way to go” before getting back to a sustainable 2% inflation target. Fed officials don’t expect that to happen until 2026.
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    Home Depot earnings beat, but retailer offers a tepid outlook as sales slide

    Home Depot posted fiscal third-quarter earnings and revenue that beat expectations.
    The home improvement retailer’s sales declined 3% from the prior-year period.
    Home Depot’s full-year guidance indicated caution ahead.

    Home Depot’s quarterly sales declined 3% from the year-ago period, but topped Wall Street’s expectations as customers chipped away at more modest projects and home repairs.
    The retailer indicated caution about the coming months, as it narrowed its full-year outlook. It said it now anticipates sales will fall by 3% to 4% from the prior year, compared with a previous expectation of a 2% to 5% decline. Home Depot expects earnings per share to slide by 9% to 11%, compared with prior guidance of a 7% to 13% drop.

    In an interview with CNBC, Chief Financial Officer Richard McPhail said the company’s results and forecast reflect that the year “is a period of moderation in home improvement.”
    “A customer who might have remodeled their entire home may be opting for a partial remodel,” he said. “Maybe they won’t redo their entire kitchen. Maybe they’ll just do the countertop and backsplash. And so it’s really just the downscaling of projects that we’ve seen.”
    Here’s what the retailer reported for the fiscal third quarter ended Oct. 29 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

    Earnings per share: $3.81 vs. $3.76 expected
    Revenue: $37.71 billion vs. $37.6 billion expected

    Home Depot reported net income of $3.81 billion, or $3.81 per share, down from $4.34 billion, or $4.24 per share, a year earlier. Revenue fell from $38.87 billion in the year-ago period.
    Comparable sales declined 3.1% year over year, a drop that wasn’t as deep as the 3.6% analysts expected, according to Factset. However, it marked the fourth straight quarter of falling comparable sales, an industry metric that takes out the effect of store openings, closures and renovations.

    Home Depot has faced dual challenges over the past year: elevated mortgage rates have squeezed potential homebuyers, and high inflation makes big-ticket items and major renovations a tougher sell.
    In recent quarters, customers have pulled back on pricier projects and items — a trend that continued in the most recent quarter, McPhail said.
    The housing market has had a mixed effect on Home Depot’s sales, as mortgage rates rise, home values remain high and supply stays low, McPhail said. On the one hand, he said, customers aren’t moving as much and taking on projects that typically come with a new home. Yet on the other hand, some have chosen to spruce up the house where they have a lower fixed-rate mortgage.
    “We don’t quite know how to quantify that balance,” he said. “And obviously that’s something we’ll watch as we progress into next year.”
    Customer transactions fell to 399.8 million from 409.8 million in the year-ago period. When shopping online and in person, customers’ average ticket was $89.36, roughly the same as a year earlier.
    Even before those dynamics intensified, Home Depot anticipated sales would decrease, after so many homeowners ticked off kitchen remodels, painting projects and more during the Covid pandemic. McPhail has also noted a shift in budget priorities to experiences, such as vacations and concerts.
    Still, he said Home Depot’s customers are in good shape financially.
    “The consumer — and particularly the homeowning consumer who is our customer — is healthy,” he said. “They’re employed. They’ve seen income gains and wealth gains in recent years. They have excess savings and they remain engaged in home improvement.”
    Over the past year, the company missed quarterly sales expectations twice, which has caused its stock performance to slide.
    Shares of Home Depot have fallen nearly 9% so far this year, trailing behind the nearly 15% gains of the S&P 500 during the same period. The company’s stock closed Monday at $288.07, bringing Home Depot’s market value to about $288 billion.
    — CNBC’s Robert Hum contributed to this report.

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    Alphabet-backed GoCardless considers takeovers as CEO expects a barrage of consolidation

    GoCardless CEO Hiroki Takeuchi said that his firm was “very open minded” about the prospect of mergers and acquisitions after acquiring the Latvian open banking startup Nordigen last year.
    Takeuchi said he expects a barrage of consolidation to take place in the payments market as some companies struggle to survive challenging macroeconomic conditions.
    “We’ve seen market conditions change over the last 18 to 24 months,” Takeuchi said, adding that fundraising is becoming more difficult for startups.

    Hiroki Takeuchi, GoCardless chief executive, on the MoneyConf Stage, attends Web Summit 2021 in Lisbon, Portugal.
    Harry Murphy | Sportsfile | Getty Images

    GoCardless, the British fintech company backed by Alphabet’s venture capital fund GV, is considering more mergers and acquisitions as it looks to grow market share in the highly competitive online payments space.
    “We’re constantly reviewing the market for opportunities that will accelerate our growth, add value to our core payment platform or strengthen our open banking proposition,” Hiroki Takeuchi, GoCardless’ CEO and co-founder, told CNBC in an exclusive interview.

    Last year, GoCardless acquired the Latvian open banking startup Nordigen in its first major acquisition. Financial information was not disclosed. The deal was aimed at expanding access to bank account information for GoCardless’ 85,000 customers globally.
    “Will we do more of that? We’re very open minded, not just for us but in general,” Takeuchi said.
    “In this space I expect there’s going to be a lot of opportunities for consolidation and M&A [mergers and acquisitions], especially in the context that some companies in this space are going to be well positioned to survive these challenging conditions and grow stronger.”
    GoCardless is one of the darlings of the British fintech industry. Co-founded by Takeuchi, Monzo co-founder Tom Blomfield, Jason Bates, Paul Rippon, Gary Dolman, and Jonas Huckestein, in 2011, the business processes more than $30 billion of payments across over 30 countries in a single year.
    The U.K. fintech industry attracted $2.9 billion in the first six months of 2023. That was down 37% from last year, as investors turned their backs on loss-making, high-growth startups in response to the worsening macroeconomic situation.

    Britain is, nevertheless, among the standout countries globally when it comes to the might of its fintech industry. According to CNBC analysis of data from Statista, the country is the second-largest market for so-called fintech “unicorns,” or firms that command a valuation of $1 billion or more.

    Changing market conditions

    Takeuchi pointed to Visa’s $2.2 billion acquisition of Swedish open banking fintech Tink in 2021 as an example of the kinds of deals to watch out for in the coming months.
    In August, London-based fintech Rapyd acquired PayU GPO, a huge slice of the payments business PayU that focuses on emerging markets, from Dutch tech investment firm Prosus for $610 million.

    “We’ve seen market conditions change over the last 18 to 24 months,” he said. “What we’ve been really focused on is making sure that core offering we’re bringing to merchants is as good as it can be and that we’re staying more focused on a few key set of things and getting them right to continue to drive the growth of the business. Open banking is one thing and definitely something we think is really important.”
    GoCardless made revenues of £70.4 million ($85.9 million) in the 2022 fiscal year ended 2022, up 3.5% year-over-year. However, it recorded a loss of £62.7 million for the year, marking a 38% increase from its £46.8 million loss in 2021.
    GoCardless’ technology allows firms to collect direct debit payments from consumers. These payments are typically for subscriptions — think of your gym memberships, news subscriptions, and monthly meal kit orders.
    Without naming any acquisition targets of interest, Takeuchi suggested that the frailty of some players in the payments industry would leave them exposed to corporate takeovers.
    “Some companies, they’re not going to be set up for the longer term. The ability to fundraise in this environment is much harder,” Takeuchi said. “One of the things that is important in this space to achieve is you have to get to significant scale. I know how much it costs to get to that scale because we’ve invested for 10 years.”
    He added, “There will be opportunities for us. We’re open minded. The important thing is that we’re very disciplined on it being aligned to that strategy we have.”
    Takeuchi said that the integration with Nordigen was “going very well” and that the company had invested a lot of time investing in the smooth combination of Nordigen’s teams with GoCardless.

    What is open banking?

    Open banking is a set of nascent technology standards that allows third-party technology companies to obtain access to account information from large incumbent banks and use that data to offer new services.

    It has enabled fintech firms like Coinbase and Robinhood to seamlessly connect to customers’ bank accounts to allow them to top up their accounts and make payments.
    That can include money management apps that give consumers more visibility over their spending, or lending products that determine a user’s creditworthiness based on their past spending decisions rather than going through the established credit reference agencies.
    Takeuchi said that GoCardless has also received interest from payment service providers (PSPs) about plugging into its technology to add the option of direct debit capabilities. That’s as businesses are beginning to become more selective about which providers they use for their payment needs due to tighter macroeconomic conditions.
    Half of businesses use three or more PSPs for their payment needs, according to GoCardless’ own data, while one in 10 firms use a minimum of five providers. Cost reduction is the top priority for businesses with two thirds of companies surveyed by GoCardless looking to reduce the number of PSPs they use and 34% planning to do so in the next 12 months.
    Takeuchi declined to comment on which payment service providers the firm was in contact with, but cited Stripe and Adyen as examples of the kinds of companies that would fall under the umbrella of PSPs. More

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    Former St. Louis Fed president says the FOMC still has ‘a ways to go’ on inflation

    Between March 2022 and July 2023, the FOMC enacted a run of 11 rate hikes to take the Fed funds rate from a target range of 0.25-0.5% to 5.25-5.5%, and inflation has since fallen substantially.
    October’s consumer price index slated for release Tuesday is expected to show an increase of 0.1% month-on-month and 3.3% annually, according to a Dow Jones poll of economists.

    James Bullard at Jackson Hole, Wyoming.
    David A. Grogan | CNBC

    Former St. Louis Fed President Jim Bullard says the Federal Reserve still has “a ways to go” in fighting inflation and that there is still a risk that prices pick up once again.
    Between March 2022 and July 2023, the FOMC enacted a run of 11 rate hikes to take the Fed funds rate from a target range of 0.25-0.5% to 5.25-5.5%, and inflation has since fallen substantially.

    Although markets now believe interest rates have peaked and have begun looking forward to cuts next year, Bullard — who stepped down as head of the St. Louis Fed in August — suggested the central bank’s work is far from over.
    “It’s been so far so good for the FOMC. Inflation has come down, core PCE inflation on a 12-month basis down from 5.5% to 3.7% — pretty good but that’s still only halfway back to the 2% target so you’ve still got a ways to go,” he told CNBC’s Joumanna Bercetche on the sidelines of the UBS European Conference in London.
    “I think you have to watch the data carefully and it’s very possible that inflation will turn around and go the wrong way.”
    October’s consumer price index slated for release Tuesday is expected to show an increase of 0.1% month-on-month and 3.3% annually, according to a Dow Jones poll of economists.
    “That’s just one month’s number, but still I think the risk for the FOMC is that the nice disinflation that we’ve seen over the last 12 months won’t persist going forward and then they’ll have to do more,” Bullard said. More

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    UBS sees a raft of Fed rate cuts next year on the back of a U.S. recession

    UBS sees slower growth, rising unemployment and disinflation to lead the Fed to cut its benchmark rate to a target range ending the year between 2.50% and 2.75%.
    Arend Kapteyn, UBS global head of economics and strategy research, told CNBC on Tuesday that the starting conditions are “much worse now than 12 months ago,” particularly in the form of the “historically large” amount of credit that is being withdrawn from the U.S. economy.

    U.S. Federal Reserve Chairman Jerome Powell takes questions from reporters during a press conference after the release of the Fed policy decision to leave interest rates unchanged, at the Federal Reserve in Washington, U.S, September 20, 2023.
    Evelyn Hockstein | Reuters

    UBS expects the U.S. Federal Reserve to cut interest rates by as much as 275 basis points in 2024, almost four times the market consensus, as the world’s largest economy tips into recession.
    In its 2024-2026 outlook for the U.S. economy, published Monday, the Swiss bank said despite economic resilience through 2023, many of the same headwinds and risks remain. Meanwhile, the bank’s economists suggested that “fewer of the supports for growth that enabled 2023 to overcome those obstacles will continue in 2024.”

    UBS expects disinflation and rising unemployment to weaken economic output in 2024, leading the Federal Open Market Committee to cut rates “first to prevent the nominal funds rate from becoming increasingly restrictive as inflation falls, and later in the year to stem the economic weakening.”
    Between March 2022 and July 2023, the FOMC enacted a run of 11 rate hikes to take the Fed funds rate from a target range of 0.25-0.5% to 5.25-5.5%.
    The central bank has since paused at that level, prompting markets to mostly conclude that rates have peaked, and to begin speculating on the timing and scale of future cuts.
    However, Fed Chairman Jerome Powell said last week that he was “not confident” the FOMC had yet done enough to return inflation sustainably to its 2% target.

    UBS noted that despite the most aggressive rate-hiking cycle since the 1980s, real GDP expanded by 2.9% over the year to the end of the third quarter. However, yields have risen and stock markets have come under pressure since the September FOMC meeting. The bank believes this has renewed growth concerns and shows the economy is “not out of the woods yet.”

    “The expansion bears the increasing weight of higher interest rates. Credit and lending standards appear to be tightening beyond simply repricing. Labor market income keeps being revised lower, on net, over time,” UBS highlighted.
    “According to our estimates, spending in the economy looks elevated relative to income, pushed up by fiscal stimulus and maintained at that level by excess savings.”
    The bank estimates that the upward pressure on growth from fiscal impetus in 2023 will fade next year, while household savings are “thinning out” and balance sheets look less robust.
    “Furthermore, if the economy does not slow substantially, we doubt the FOMC restores price stability. 2023 outperformed because many of these risks failed to materialize. However, that does not mean they have been eliminated,” UBS said.

    “In our view, the private sector looks less insulated from the FOMC’s rate hikes next year. Looking ahead, we expect substantially slower growth in 2024, a rising unemployment rate, and meaningful reductions in the federal funds rate, with the target range ending the year between 2.50% and 2.75%.”
    UBS expects the economy to contract by half a percentage point in the middle of next year, with annual GDP growth dropping to just 0.3% in 2024 and unemployment rising to nearly 5% by the end of the year.
    “With that added disinflationary impulse, we expect monetary policy easing next year to drive recovery in 2025, pushing GDP growth back up to roughly 2-1/2%, limiting the peak in the unemployment rate to 5.2% in early 2025. We forecast some slowing in 2026, in part due to projected fiscal consolidation,” the bank’s economists said.
    Worst credit impulse since the financial crisis
    Arend Kapteyn, UBS global head of economics and strategy research, told CNBC on Tuesday that the starting conditions are “much worse now than 12 months ago,” particularly in the form of the “historically large” amount of credit that is being withdrawn from the U.S. economy.
    “The credit impulse is now at its worst level since the global financial crisis — we think we’re seeing that in the data. You’ve got margin compression in the U.S. which is a good precursor to layoffs, so U.S. margins are under more pressure for the economy as a whole than in Europe, for instance, which is surprising,” he told CNBC’s Joumanna Bercetche on the sidelines of the UBS European Conference.

    Meanwhile, private payrolls ex-health care are growing at close to zero and some of the 2023 fiscal stimulus is rolling off, Kapteyn noted, also reiterating the “massive gap” between real incomes and spending that means there is “much more scope for that spending to fall down towards those income levels.”
    “The counter that people then have is they say ‘well why are income levels not going up, because inflation is falling, real disposable incomes should be improving?’ But in the U.S., debt service for households is now increasing faster than real income growth, so we basically think there is enough there to have a few negative quarters mid-next year,” Kapteyn argued.
    A recession is characterized in many economies as two consecutive quarters of contraction in real GDP. In the U.S., the National Bureau of Economic Research (NBER) Business Cycle Dating Committee defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” This takes into account a holistic assessment of the labor market, consumer and business spending, industrial production and incomes.
    Goldman ‘pretty confident’ in the U.S. growth outlook
    The UBS outlook on both rates and growth is well below the market consensus. Goldman Sachs projects the U.S. economy will expand by 2.1% in 2024, outpacing other developed markets.
    Kamakshya Trivedi, head of global FX, rates and EM strategy at Goldman Sachs, told CNBC on Monday that the Wall Street giant was “pretty confident” in the U.S. growth outlook.
    “Real income growth looks to be pretty firm and we think that will continue to be the case. The global industrial cycle which was going through a pretty soft patch this year, we think, is showing some signs of bottoming out, including in parts of Asia, so we feel pretty confident about that,” he told CNBC’s “Squawk Box Europe.”
    Trivedi added that with inflation returning gradually to target, monetary policy may become a bit more accommodative, pointing to some recent dovish comments from Fed officials.
    “I think that combination of things — the lessening drag from policy, stronger industrial cycle and real income growth — makes us pretty confident that the Fed can stay on hold at this plateau,” he concluded. More

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    Stellantis offers buyouts to roughly half of U.S. salaried workers

    Chrysler parent Stellantis will offer buyouts to roughly half of its U.S. white-collar employees to reduce headcount and cut costs of the automaker’s North American operations.
    The voluntary separation packages will be offered to 6,400 of its 12,700 nonbargaining unit U.S. employees, the company said Monday.
    This marks the second round of salaried buyouts this year for Stellantis and comes weeks after the automaker struck a tentative deal with the UAW for unionized workers.

    Carlos Tavares, CEO of Stellantis, poses during a presentation at the New York International Auto Show in Manhattan, New York, on April 5, 2023.
    David Dee Delgado | Reuters

    DETROIT — Chrysler parent Stellantis is offering buyouts to roughly half of its U.S. white-collar employees to reduce headcount and cut costs for the automaker’s North American operations.
    The voluntary separation packages will be offered to 6,400 of its 12,700 nonbargaining unit U.S. employees with five or more years of employment, the company said Monday.

    The move marks the latest cost-cutting efforts for the U.S. auto industry, as companies attempt to reduce costs amid economic concerns and billions of dollars in new investments for emerging technologies such as electric vehicles. Both General Motors and Ford Motor also have cut salaried workers over the past year.
    “As the U.S. automotive industry continues to face challenging market conditions, Stellantis is taking the necessary structural actions to protect our operations and the Company,” Stellantis said in an emailed statement. “As we prepare for the transition to electric vehicles, Stellantis announced today that it will offer a voluntary separation package to assist those non-represented employees who would like to separate or retire from the Company to pursue other interests with a favorable package of benefits.”
    A Stellantis spokeswoman declined to comment on how many people or total costs the company would like to cut. She also declined to comment on whether involuntary layoffs are planned if not enough employees accept the buyouts.
    Stellantis North American Chief Operating Officer Mark Stewart informed employees Monday of the program, which was first reported by The Wall Street Journal.
    Employees will have until Dec. 8 to accept buyout offers, the company said.

    This marks the second round of salaried buyouts this year for Stellantis. In April, the company extended voluntary buyouts to about 33,500 U.S. employees, including 31,000 hourly employees with at least one year of employment and 2,500 salaried, nonunion employees who had 15 or more years with the company.

    Read more CNBC auto news

    The latest buyouts come weeks after the automaker struck a tentative deal with the United Auto Workers union for new labor contracts covering its 43,000 unionized workers.
    The tentative agreement between Stellantis and the UAW, which must still be ratified by union members, also includes voluntary buyouts.
    The UAW has said the voluntary incentive plan for retirement will be for $50,000 pretax for an unlimited number of eligible production and skilled-trade members in 2024 and again in 2026.
    The Stellantis spokeswoman said the salaried buyout offers are not directly connected to expected increases in U.S. labor costs as a result of the deal with the UAW.
    The tentative union agreement includes 25% wage increases, including 11% upon ratification; reinstatement of cost-of-living adjustments; additional contributions for retirees; billions in new investments; and other benefits.Don’t miss these stories from CNBC PRO: More

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    Fisker reports wider-than-expected losses, underwhelming deliveries for the third quarter

    Electric vehicle startup Fisker on Monday reported a third-quarter loss that was wider than Wall Street expected.
    It said it delivered only about 1,100 Ocean electric SUVs in the third quarter.
    But, it said, deliveries have accelerated since quarter-end, with over 1,200 Oceans delivered in October and “hundreds” more en route to customers now.

    Fisker began deliveries of its battery-electric Ocean SUV in the second quarter of 2023.
    Courtesy: Fisker

    Electric vehicle startup Fisker on Monday reported a third-quarter loss that was wider than Wall Street expected, and said it delivered only about 1,100 Ocean electric SUVs in the third quarter.
    But, it said, deliveries have accelerated since quarter-end, with over 1,200 Oceans delivered in October and “hundreds” more en route to customers now.

    Fisker shares were down more than 10% in after-hours trading immediately following the news.
    The company said it and its manufacturing partner, Magna International, built 4,725 Oceans in the third quarter and delivered 1,097 to customers. Fisker produced 1,022 Oceans in the second quarter of 2023.
    “We are rapidly scaling our delivery infrastructure to support even higher volumes of deliveries of our class-leading product to our loyal customers,” CEO Henrik Fisker said in a statement. “We are gaining momentum and delivered more units in the month of October than in all of the third quarter.”
    The company said in a statement on Sept. 26 that it expected to be delivering 300 Oceans per day before the end of 2023.
    The news came as part of Fisker’s third-quarter earnings report Monday.

    Stock chart icon

    Fisker’s stock falls after third-quarter results.

    Fisker’s net loss for the quarter was $91 million, or 27 cents per share, wider than the 19 cents expected by Wall Street analysts polled by LSEG, formerly known as Refinitiv.
    Revenue for the period was $71.8 million. Wall Street had been expecting revenue of $109 million, but CNBC isn’t comparing reported revenue to projections because of thin analyst coverage.
    A year ago, Fisker reported a net loss of $149.3 million, or 49 cents per share, and revenue of about $14,000.
    Fisker had $625 million in cash and cash equivalents on hand as of Sept. 30, versus $521.8 million as of June 30. The EV maker raised an additional $300 million via a convertible note offering in July, and another $150 million in September.
    Fisker didn’t immediately update its production guidance for the full year. It said in August that it expected Magna to build 20,000 to 23,000 Oceans at its contract manufacturing plant in Austria by year-end.

    Read more CNBC auto news

    Fisker had originally planned to report its third-quarter results last week, before the U.S. markets opened on Nov. 8. But it abruptly postponed its report early that morning, saying that the departure of its chief accounting officer on Oct. 27 and the appointment of a new one on Nov. 6 had “delayed the completion of the financial statements and related disclosures.”  
    Fisker didn’t explain why its chief accounting officer left.
    Fisker’s chief technology officer, Burkhard Huhnke, also left the company in late October for “personal reasons,” according to a regulatory filing. The company named David King, a senior engineer who had previously led its vehicle-body engineering team, to the post on Nov. 3. More

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    As Target shutters some stores, retailer looks to prove it can grow and avoid new setbacks

    Target’s store closures, which it attributed to theft, were the latest in a string of public setbacks.
    Sales at the company have slowed as inflation weighs on household budgets, and Target has faced backlash for its Pride collection and losses from organized retail crime.
    The big-box retailer is scheduled to report earnings on Wednesday, as it looks for steady growth again.

    Target’s store in Harlem is one of nine locations that the retailer recently shuttered. It blamed the closures on high levels of theft and safety risks.
    Melissa Repko | CNBC

    In the Harlem neighborhood of New York City, Target’s first store to open in Manhattan has permanently shut its doors. The retailer has closed eight other city stores around the country.
    Target’s closures, which the company blamed on theft and violence at a time when sales have stagnated, marked the latest in a series of public setbacks for the big-box retailer— a jarring turnabout for a company seen as a major Covid pandemic winner.

    Yet as Target tries to pull itself out of a recent rut, Chief Operating Officer John Mulligan said the company sees “lots more opportunity to grow in New York,” including city neighborhoods. He pointed to closures and openings in Target’s hometown of Minneapolis-St. Paul and in Chicago as evidence that shuttering stores does not mean the company has run out of room to grow.
    “If you go back through time, this is something we’ve done over and over again,” he said. “And when we close a store in a market, it doesn’t mean we stop investing in that market.”
    This week, Target for the first time since the surprise store closures will update investors on its sales trends and efforts to overcome a string of challenges. It’s scheduled to report fiscal third-quarter earnings on Wednesday and share with investors where it plans to go from here. The company, in many ways, embodies both the benefits retailers saw during the Covid pandemic spending boom and the unique challenges they have faced coming out of it.
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    Like other retailers, Target is dealing with softer sales — a reflection that shoppers have less to buy after a stimulus-fueled shopping spree and have pinched pennies because of inflation. It has coped with other dynamics, too, including stocking too much of the wrong inventory, backlash over its Pride collection, and losses from theft and organized retail crime.

    Some other retailers, such as Nordstrom and Walmart, have also shut stores in major cities — though they have not specifically blamed theft. Those companies’ closed stores, in San Francisco and Chicago, respectively, may have also felt the impact of people moving to suburbs or spending half or more of their workweeks at home.
    Target’s Mulligan said evaluating and closing stores is a routine part of operating a company. Some locations don’t work, he said, and Target believed the nine stores that it closed in the New York, Seattle, Portland, Oregon, and San Francisco areas weren’t safe anymore.
    But Greg Melich, a retail analyst at Evercore ISI, said the shuttered locations represent a bigger challenge for Target: it has struggled to win shoppers and get back on a path to growth. Theft and safety concerns likely contributed to already underperforming stores, he said.
    “They’ve got to get their customer back,” he said. “That’s the fundamental problem.”

    A bumpy ride for Target

    For more than a year, Target has endured rocky sales and stock performance.
    Shares of the company had fallen about 27% this year as of Friday, trailing far behind the S&P 500’s performance and trading for less than half of their peak value during the pandemic years.
    Target cut its full-year forecast in August, after already warning investors it expected lower sales than a year ago. For the fiscal year, it projects comparable sales to decline by about mid single digits and earnings per share to range from $7 to $8.

    In a recent interview with CNBC’s Becky Quick, CEO Brian Cornell said Target has even noticed shoppers buying fewer groceries as they feel pinched by “really sticky inflation” on everyday items like baby formula and pet food.
    As Target looks to the holiday season, he said the company will contend with consumers juggling the higher cost of carrying a credit card balance, a steeper mortgage rate for homeowners and an extra expense as student loan payments resume.
    Cornell doesn’t expect that mentality to change anytime soon.
    “That’s the caution we’re seeing right now as consumers think about the balance of the year and going into 2024,” he said. “How do they manage their budgets? And I think we’ll see them spending much more carefully.”
    To drum up holiday sales, he said the company is “leaning into affordability” and offering fresh items that inspire them to open their wallets.
    But Michael Baker, a retail analyst at D.A. Davidson, said he expects Target will miss fiscal third-quarter revenue expectations and have a rougher holiday season than its rivals.
    Target’s problems come in part from the fact that its merchandise skews heavily toward discretionary items that customers often skip when the budget is tight. Walmart, for example, draws more than half of its annual sales from groceries.
    But Target’s aggressive push to get rid of excess inventory last year may have led to an overcorrection, Baker said.
    “When you’re in a period of drawing down inventory and being really conservative in your inventory, it’s harder for merchants to make bets and take risks,” he said.

    Target’s store dilemma

    Target could boost sales by opening new stores, too — a challenge as it tries to gauge where people will shop most in the post-pandemic world.
    Target has opened 21 stores across the country since late January, including in new markets like the Outer Banks of North Carolina and Grass Valley, California, a small town about an hour northeast of Sacramento. More stores are on the way, including new ones in Oahu, Hawaii, and Detroit.
    At the same time, Target’s high-profile closures raised fresh questions about whether the company — and other major retailers — still want to be in city centers where rents are high and foot traffic, in some cases, is less predictable because of hybrid work.
    Some pandemic trends and demographic shifts have led retailers out of major cities and traditional malls. Nordstrom shut its San Francisco flagship, citing changing market dynamics, but has opened more of its off-price banner, Nordstrom Rack, in suburban strip malls. Macy’s newest locations are outside of malls and in suburban strip centers, too.
    Demand for retail real estate has flipped. Availability in suburban areas has grown tighter than urban areas for the past five quarters that began in July 2022, said Brandon Isner, head of retail research for the Americas at real estate firm CBRE.
    Grocers, “the front-line heroes of the pandemic,” have become the hot neighbors that many retailers want, he said.
    “If it’s a trying economic time, people might not go to the mall, but they’re going to go to the grocery store still every single week,” he said.
    Isner added that within cities, some retailers are moving from one area to another. Sometimes, they’re moving away from an area that has struggled with crime, and in other cases, they’re choosing to go to a neighborhood with more foot traffic, a newer space or a lower rent.
    Mulligan said Target will continue to open stores both in the suburbs and in cities. For instance, he said, Target wants to have more stores in Charlotte, North Carolina, because of its population growth. It wants to have locations in New York City that capture business from tourists who returned in droves after the pandemic.
    Some of Target’s stores in cities and near college campuses are smaller. Its fleet of locations also serve an important role for the company’s online business, since more than 90% of its online orders are picked and packed there rather than in faraway fulfillment centers.
    Since closing the Harlem store, Target has opened a new location in New York City’s Union Square. It plans to open a new store in Central Harlem, about a mile and a half away from the location it shuttered.
    Mulligan said the store will be “significantly smaller” than the old location and closer in size to its other Manhattan stores. The company has not announced the opening date.
    For some, the location that’s coming doesn’t lessen the disappointment of seeing their nearby location close. Some shoppers also questioned the logic of opening so close by, if theft is a problem, and said the smaller store may not carry the same groceries and essentials they need.
    It’s a calculation Target has to make as it tries to close stores, but retain customers, at a time when shoppers are opening their wallets less often for items they don’t use every day.
    Tyrone Davis went to the Target in Harlem for weekly shopping trips with his girlfriend, Julissa Patoja, a teacher. They appreciated its cheaper prices and larger selection of everyday items, such as cereal, shampoo and laundry detergent — along with discretionary items like pumpkin-themed decor for Pantoja’s pre-kindergarten classroom.
    He said he’s not sure if the new Harlem store will have that same mix.
    In the final days of the store, items like greeting cards, Halloween costumes and books lingered on shelves as the grocery aisles were wiped clean.
    In the hours after it closed, customers including Davis and Patoja arrived to the store with empty carts and tote bags for purchases.
    Shoppers were confused and frustrated. Some didn’t realize the store was closing at all. Others said without a local Target, they would turn to other retailers, or consider shopping online at Walmart or Amazon.
    “It’s a shocking move to everyone,” Davis said. “It’s definitely a loss.”
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