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    Fed’s Neel Kashkari isn’t sure if interest rates are high enough to stop inflation

    Minneapolis Fed President Neel Kashkari told CNBC on Wednesday that he’s unsure whether the central bank has raised interest rates enough to tame inflation.
    He cited various concerns suggesting that “we might not be as restrictive as we otherwise would think.”

    Minneapolis Federal Reserve President Neel Kashkari said Wednesday he’s unsure whether the central bank has raised interest rates enough to tame inflation.
    Speaking one day after he penned an essay suggesting that rates may have to go “meaningfully higher” from here in order to bring down prices, Kashkari told CNBC that the neutral rate of interest, or one that is neither holding back the economy nor stimulating it, may have moved higher.

    “I don’t know,” he said on “Squawk Box” when asked whether the current target range for the federal funds rate of 5.25%-5.5% is “sufficiently restrictive” to bring inflation back to the Fed’s 2% goal. “It’s possible given the dynamics of the reopening of the economy, that the neutral rate may have moved up.”
    Some of his concerns stem from the fact that sectors of the economy that normally are affected by rate hikes seem to be ignoring them.
    “So one thing that makes me cautious that we might not be as restrictive as we think, is that consumer spending has remained robust, GDP growth continues to outperform,” Kashkari said. “The two sectors of the economy that are traditionally most sensitive to interest rate hikes, autos and housing, have both added some signs of bottoming and in some cases are starting to show some recovery that makes me cautious that we might not be as restrictive as we otherwise would think.”
    Those comments come one week after the rate-setting Federal Open Market Committee, of which Kashkari is a voting member this year, opted not to raise interest rates but still signaled another quarter-point hike before the end of the year while cutting its outlook to two reductions next year, half the last projection in June.
    Wall Street has been fearful that the continuing tightening of monetary policy could send the economy into recession.

    But Kashkari insisted that is not the Fed’s goal.
    “If we have to keep rates higher for longer, it’s because the economic fundamentals are even stronger than I appreciate and the [economic] flywheel is spinning,” he said. “It isn’t obvious to me that that means that a recession is more likely, it just might mean that we need a higher rate path to get inflation back down to 2%.”
    However, he said “we just don’t know right now” whether the Fed has done enough, adding that “we all want to avoid a hard landing” for the economy. More

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    UAW strikes threaten already vulnerable auto parts suppliers

    Automakers and their larger Tier 1 suppliers likely have the resources to weather an extended work stoppage.
    But a network of smaller auto suppliers could be hit hard by a prolonged strike or even go out of business entirely.
    As of Tuesday, two Detroit-area auto suppliers had already filed notices of potential layoffs with the state of Michigan.

    Members of the United Auto Workers union hold a practice picket in front of Stellantis headquarters in Auburn Hills, Michigan, on Sept. 20, 2023.
    Bill Pugliano | Getty Images

    As the United Auto Workers’ strike against Ford Motor, General Motors and Stellantis moves through its second week, the economic effects are beginning to ripple through the U.S. automakers’ vast supply base.
    While the automakers and their larger Tier 1 suppliers likely have the resources to weather an extended work stoppage, there’s a network of smaller suppliers that could be hit hard by a prolonged strike — or even go out of business entirely.

    That network includes about 5,600 companies — most in the upper Midwest — that provide seats, suspension components, wiring harnesses and thousands of other parts used in brand-name vehicles. It’s substantial, employing an estimated 871,000 workers, according to the American Automotive Policy Council.
    Those smaller suppliers have only recently recovered from the shocks of the Covid-19 pandemic and the resulting global shortage of semiconductors. Now, they’re coming under pressure to increase their own workers’ wages — in an environment where higher interest rates have made it more costly to borrow money — and staring down the threat of ongoing auto workers’ strikes.

    “UAW ON STRIKE” signs stand as members of the United Auto Workers Local 230 union hold a picket line outside the Stellantis Chrysler Los Angeles Parts Distribution Center in Ontario, California, on Sept. 26, 2023.
    Patrick T. Fallon | AFP | Getty Images

    “We represent a lot of suppliers that are very, very concerned about where this is going,” said Dennis Devaney, a Detroit attorney who has represented both GM and Ford and who once served as a board member for the National Labor Relations Board.
    Devaney noted that some suppliers are still struggling with supplies of semiconductors and other components, in part because their Chinese counterparts are still recovering from Covid-related shutdowns and other logistical issues since the global health crisis.
    “The last thing they need from an economic perspective is a strike by the UAW,” he said.

    Some of the small suppliers may only be able to hold out a few weeks if the automaker factories they support are struck.
    Harbour Results, a manufacturing advisory firm near Detroit, estimates that about 30% of those smaller suppliers were in poor financial shape — or “unbankable” in Harbour’s view — as of the end of 2022, with another 21% characterized as struggling.  
    The Motor and Equipment Manufacturers Association, or MEMA, a trade group that represents auto suppliers, has asked the White House for aid, writing in a Monday letter to President Joe Biden that it was particularly concerned about smaller suppliers with annual revenues of less than $200 million.

    Members of the United Auto Workers union picket outside the Michigan Assembly Plant in Wayne, Michigan, on Sept. 26, 2023.
    Matthew Hatcher | AFP | Getty Images

    “These suppliers are in every state throughout the U.S. and are often the largest employer in a county or region,” MEMA wrote. “In a recent industry survey, half of these suppliers were identified as financially distressed.”
    MEMA asked President Biden to use existing authority to direct the Small Business Administration to provide low-interest loans to suppliers to help them meet payroll so they can restart quickly once the strike is resolved.
    “Note that it only takes one component that is unavailable from a supplier to shut down an entire production line,” the association wrote. “We urge you to act now to support the vehicle supplier community.”

    Supplier layoffs

    In the face of prolonged strikes, some smaller suppliers are already cutting workers or announcing plans to do so.
    But layoffs could expose suppliers to another risk: In a still-tight labor market, those laid-off employees might be able to find other jobs quickly, meaning they might not be available to come back once the UAW’s strikes are resolved.
    LM Manufacturing, which makes seats for vehicles including the Ford Bronco, temporarily laid off about 650 workers last week in response to the UAW’s strike at the Detroit-area Ford plant that builds the Bronco. The Detroit-based company is a joint venture between privately held LAN Manufacturing and Canadian auto supplier Magna International, a Tier 1 heavyweight.

    GM workers with the UAW Local 2250 Union strike outside the General Motors Wentzville Assembly Plant in Wentzville, Missouri, on Sept. 15, 2023.
    Michael B. Thomas | Getty Images

    As of Tuesday, two additional Detroit-area auto suppliers had already filed notices of potential layoffs with the state of Michigan.
    Parts maker CIE Newcor, a subsidiary of Spain’s CIE Automotive, filed a notice with the state of Michigan on Sep. 14 saying that it will lay off nearly 300 workers early next month if the strike continues. Privately held Eagle Industries, a maker of molded foam products for autos, said on Sep. 21 that it may soon need to lay off an estimated 171 of its 230 employees “due to evolving business circumstances.”
    “For every GM job, there’s six others in the economy that depend on us running,” GM CEO Mary Barra told CNBC. “We’ve got to get back to work.”

    Publicly traded suppliers

    Larger publicly traded suppliers such as Lear Corporation, Dana, Magna International and Adient aren’t expected to come out of the UAW’s strike unscathed. However, they haven’t experienced widespread effects just yet.   
    Barclays previously identified Dana as one of the most affected suppliers from the first round of UAW strikes that halted production at one assembly plant each for the Detroit automakers, beginning Sept. 15. The Ohio-based company — a supplier of axles, driveshafts, transmissions and other parts — makes components for several vehicles affected by the strikes.
    Dana, which did not respond to CNBC’s request for comment, has reportedly announced temporary layoffs of hundreds of Ohio workers due to striking UAW members at Jeep and Ford plants.
    If the UAW’s strike drags on and expands further past its current three assembly plants and 38 parts and distribution centers, Wall Street analysts believe that’s when larger publicly traded suppliers will really start to feel the strain.
    Some analysts also warn that automakers may put additional pressure on suppliers to lower costs in an effort to offset expected multibillion-dollar increases in any tentative agreements reached by GM, Ford and Stellantis, also known as original equipment suppliers, or OEMs.
    “This creates another tension point in the debate in OEM-supplier commercial discussions,” Barclays analyst Dan Levy told CNBC. “There’s some suppliers that probably legitimately can push back but there’s also probably some suppliers where it does create a little more complexity.”
    Historically, automakers have raised prices on new vehicles to offset higher labor costs and protect margins, but inflation as well as higher commodity costs have already pushed vehicle prices up, leaving little room for upward movement.
    Barclays expects the new UAW contracts to add between $2 billion and $3 billion of incremental costs annually to the automakers’ balance sheets.
    Spokespeople with Lear, Magna and Adient did not immediately respond to CNBC’s request for comment. More

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    Shoppers face higher orange juice prices as futures hit another record

    Orange juice future prices hit a record high of $3.69 per pound Tuesday morning.
    The surge was triggered by hurricanes and bad weather reducing Florida’s crop to its lowest in nearly 80 years.

    Coca-Cola Co.’s Minute Maid and Simply Orange brand orange juices sit on display in a supermarket in Princeton, Illinois.
    Daniel Acker | Bloomberg | Getty Images

    Orange juice is the latest item to succumb to higher prices at the grocery store, with futures on the commodity good reaching an all-time high this week.
    Future prices for the breakfast staple have been steadily climbing over the past few months, hitting a record high of $3.69 per pound Tuesday morning. That number is up 13% month to date and almost 78% year to date.

    With the price hike, the juice joins other major grocery store items facing high prices even as inflation slows, including raw sugar and cocoa.
    The drink’s price has shot up due to hurricanes and bad weather that slammed Florida — the main producer of orange juice for the U.S. — last year, which reduced the crop to its lowest level in nearly 80 years. A late freeze at the end of last year also devastated the crops.
    In July, the U.S. Department of Agriculture said it expected Florida to produce just around 15.9 million boxes of oranges this year, down 70% from the 2020-21 season.
    Other exporters such as Brazil and Mexico also lowered their estimated yields for the year, citing crop difficulties from warmer weather. More

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    Ozempic, Wegovy drug prescriptions hit 9 million, surge 300% in under three years

    U.S. health care providers wrote more than nine million prescriptions for Ozempic, Wegovy and similar and obesity drugs during the last three months of 2022, according to a new analysis.
    The report also shows that prescription volumes for those drugs increased 300% between early 2020 and the end of last year.
    The data further confirms the rise in demand for GLP-1s, which have fueled a frenzy for their ability to cause significant weight loss.

    A pharmacist displays boxes of Ozempic, a semaglutide injection drug used for treating type 2 diabetes made by Novo Nordisk, at Rock Canyon Pharmacy in Provo, Utah, U.S. March 29, 2023. 
    George Frey | Reuters

    U.S. health care providers wrote more than nine million prescriptions for Ozempic, Wegovy and similar diabetes and obesity drugs during the last three months of 2022, according to a new analysis released Wednesday.
    The report, from analytics firm Trilliant Health, shows that quarterly prescriptions for those drugs increased 300% between early 2020 and the end of last year.

    Novo Nordisk’s weekly diabetes injection Ozempic accounted for more than 65% of total prescriptions as of the end of 2022, and was primarily prescribed off-label for its ability to help patients lose weight. 
    The data further confirms the rise in demand for that group of drugs, which have fueled a frenzy among Americans and on Wall Street for their ability to cause significant weight loss. Those treatments, known as GLP-1s, mimic a hormone in the gut to suppress a person’s appetite. 
    But the rate of future prescription volumes will largely depend on whether manufacturers of those drugs, Novo Nordisk and Eli Lilly, can resolve widespread supply shortages affecting most of their treatments in the U.S., among other factors, according to the report.
    The analysis is based on insurance claims data for about 300 million Americans. Among the other drugs prescribed are Eli Lilly’s diabetes drug Mounjaro and an older GLP-1 drug from Novo Nordisk called Saxenda, which isn’t as effective for weight loss as Ozempic and Wegovy.
    But the total number of GLP-1 prescriptions is likely an undercount since some health plans don’t cover weight loss treatments like Wegovy, leaving some patients to pay for them out of pocket. 

    Some people, such as Hollywood celebrities and billionaire tech mogul Elon Musk, are wealthy enough to pay for the drugs themselves. 
    Ozempic’s list price tops $935 per monthly package, and its weight loss counterpart Wegovy is about $1,300. The drugs are meant to be taken indefinitely to keep weight off, just like cholesterol-lowering drugs or blood pressure medications that have to be taken for life. 
    Other drugmakers are jockeying to capitalize on the budding weight loss industry. And analysts say Eli Lilly’s Mounjaro has the potential to overtake drugs from Novo Nordisk after its approved in the U.S. for weight loss. 
    More than two in five adults have obesity, according to the National Institutes of Health. About 1 in 11 adults have severe obesity. More

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    Landmark marijuana financing bill set to move forward in the Senate

    A new bill aimed at establishing a safe harbor for financial institutions serving legal marijuana businesses is expected to advance to the Senate floor Wednesday.
    The Secure and Fair Enforcement Regulation Banking Act was introduced by a bipartisan group of senators last week.
    If passed, the bill will pave the way for the sector to secure greater financing and scale into a broader market.

    Activists from the DC Marijuana Justice (DCJM) wave flags during a rally to demand Congress to pass cannabis reform legislation on the East Lawn of the US Capitol in Washington, DC on October 8, 2019
    Olivier Douliery | AFP | Getty Images

    A new bill that aims to give the marijuana industry access to banking services is expected to move forward in the Senate on Wednesday.
    The Secure and Fair Enforcement Regulation Banking Act was introduced by a bipartisan group of senators last week. The bill would provide legal protection to banks or other financial institutions that offer services to state-legal marijuana businesses.

    The Senate Banking Committee will mark up the bill Wednesday, and the panel is expected to vote to advance it to the full chamber’s floor.
    The bill is being led by Sens. Jeff Merkley, D-Ore.; Steve Daines, R-Mont.; Kyrsten Sinema, I-Ariz.; and Cynthia Lummis, R-Wyo., as well as Majority Leader Chuck Schumer, D-N.Y.

    Senator Jeff Merkley, a Democrat from Oregon, speaks during a news conference at the U.S. Capitol in Washington, D.C., on Jan. 25, 2020.
    Zach Gibson | Bloomberg | Getty Images

    “This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the senators said in a joint statement.
    “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk,” they added.
    Even as 39 states have legalized marijuana for recreational or medical use, the sector has struggled to scale. Marijuana’s classification as a Schedule I substance, or one with no currently accepted medical use and a high potential for abuse, along with federal prohibition, pose a risk to banking institutions. This, in turn, has limited access to financing and a broader market.

    Moreover, without access to financial services, state-legal cannabis businesses are forced to operate their businesses solely using cash, which can result in robbery, money laundering and organized crime.
    Due to the opening of new adult-use markets in individual states, combined U.S. medical and recreational cannabis sales are expected to reach $33.6 billion by the end of 2023, according to analysis from the MJBiz Factbook from industry news outlet MJBizDaily.
    The landmark vote Wednesday will mark the first time the Senate has considered the legislation. An earlier version of the bill, the SAFE Banking Act, passed in the House seven times previously but has never advanced through the Senate under both Democratic and Republican control. Late last year, lawmakers excluded it from a $1.7 trillion government funding bill.
    The bill may face a tougher path to passage if it ends up before the GOP-controlled House.
    “I think it probably passes the banking committee, but I think it doesn’t go anywhere in the House,” said Ian Katz, an analyst with Capital Alpha Partners who covers banking and financials.
    “Republicans seem to be souring on it,” he added.
    The new bill includes stricter requirements for federal regulators, such as prohibiting them from terminating any marijuana-related accounts without “valid reason,” or from denying banking services based on “personal beliefs or political motivations.” More

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    Gensler is testifying before Congress and facing increasing lawsuits over his many rule changes

    SEC Chair Gary Gensler participates in a meeting of the Financial Stability Oversight Council at the U.S. Treasury in Washington, D.C., July 28, 2023.
    Kevin Dietsch | etty Images

    Securities and Exchange Commission Chair Gary Gensler is testifying before the House Financial Services Committee today. It will be very much like his testimony two weeks ago to the Senate Banking Committee: a forum for Republicans to attack Gensler for being overzealous and overreaching in his rulemaking proposals. 
    Republicans are increasingly apoplectic about the more than 40 rules Gensler has been proposing, especially now that he has begun adopting them. 

    That’s not new. Republicans have been critical of Gensler from the get-go. 
    What’s different, nearly three years into the Biden administration, is that the financial services industry (hedge funds, mutual funds, market makers, trading firms, exchanges) are increasingly abandoning attempts to negotiate with Gensler and adopting a more confrontational stance. 
    Some are suing him. 
    “The industry (brokers and exchanges alike) are left with the only remaining tool at their disposal – a tool of last resort — litigation against the Commission,” Kirsten Wegner, CEO of the Modern Markets Initiative, wrote in a recent editorial in Trader’s Magazine. 
    The complaints from the industry have been mounting for over a year: too many rules. No time for industry input. No roundtable discussions. No sharing of data used to make the policy decisions. 

    The tone of the industry commentary toward Gensler has become increasingly hostile and bitter: “”Comment letters’ are a facade because it is all but impossible for the market to digest, process and respond to thousands of pages of draft regulation in only a few months’ time, and regardless, their points are often dismissed without meaningful study or explanation,” Wegner wrote.
    Litigation starts 
    Last month, Grayscale Bitcoin Trust, which is seeking to convert to a bitcoin ETF, successfully sued the SEC on the grounds that it had already approved a “similar” product in bitcoin futures and its actions were arbitrary and capricious. The SEC is weighing an appeal. 
    Now that Gensler has adopted several of the rules that had been in the proposal stage, the industry has begun to take a more litigious stance. 
    For example, six financial trade associations this month sued the SEC over its new Private Funds Adviser Rule, which requires registered private fund advisers to undergo an annual financial statement audit. The trade associations claim the SEC exceeded its statutory authority and acted arbitrarily and capriciously.
    Gensler also appears to be in open warfare with Virtu Financial, one of the world’s largest market makers.  The SEC recently sued Virtu, claiming it failed to provide measures to protect sensitive customer data, and for making materially false and misleading statements regarding information barriers to prevent the misuse of that information. 
    These types of cases would normally result in a quiet settlement, but that doesn’t appear likely. 
    Virtu claims that this suit was an “escalation” of a years-long investigation because Virtu CEO Doug Cifu has been openly critical of the SEC’s market structure rule proposals, which have yet to be adopted. 
    “Unfortunately, the SEC’s position appears to be driven by politics and headlines rather than the facts and the law,” Cifu said in a recent statement. “Therefore, under these circumstances, we look forward to vigorously defending ourselves in court against these meritless allegations while maintaining our focus on serving clients and markets globally and creating long-term value for our shareholders.” 
    Gensler grilled for proposed and adopted rules 
    Republicans will be particularly keen to talk about some of the bigger issues Gensler has been tackling. 
    Take Climate-Related Disclosures, which were proposed in March 2022 but have not been adopted yet. They would require publicly-traded companies to disclose detailed emissions data and climate risk management strategies, including direct and indirect greenhouse gas emissions from their supply chains.  Republicans have claimed this is beyond the SEC’s mandate. Gensler, in his prepared testimony, says the SEC “has no role as to climate risk itself. We, however, do have an important role in helping to ensure that public companies make full, fair, and truthful disclosure about the material risks they face.” 
    Other rules that have been adopted (like cybersecurity, which mandates disclosure of a cybersecurity incident within four business days after a company determines the incident is material) will again be attacked for overreaching. 
    Then there’s crypto. Gensler has brought numerous enforcement actions against crypto intermediaries on the grounds that the tokens they offer are securities. Republicans will again attack him for over-reaching. 
    And what about that bitcoin ETF lawsuit? Gensler made it clear he “will not be able to comment on any active, ongoing litigation.” Translation: don’t ask about the bitcoin ETF lawsuit. 
    What’s next? 
    By now, it’s clear Gensler is not backing down and will continue passing new rules because he has a 3-2 majority at the commission. 
    Gensler will repeat that he is being reasonable and listening to industry complaints. On the climate change proposal, for example, Gensler noted that the SEC has received more than 15,000 comments and that it “will consider adjustments to the proposed rule that the staff, and ultimately the Commission, think are appropriate in light of those comments.” 
    Given what has happened already, that will not mollify the critics. 
    Some are hoping that a few Democrats will join the Republicans and ask Gensler to slow down. Last year, a dozen Senate Democrats did just that, sending a letter to Gensler urging him to extend the deadlines for proposed rules and to provide a sufficient period for notice and comment.  
    But given the head of steam Gensler has worked up, that too is unlikely to sway him much. 
    Now that he has begun adopting many of these rules, the financial services industry seems to be saying, “See you in court.” More

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    The U.S. is weaker now than when we downgraded in 2011, former S&P ratings chairman says

    The world’s largest economy is once again facing the prospect of a government shutdown unless lawmakers in Washington can pass a spending bill before an Oct. 1 deadline.
    S&P downgraded the long-term credit rating from AAA representing a “risk free” rating to AA+ as early as 2011, citing political polarization after a debt ceiling squabble in Washington.

    Washington, D.C. – March 17, 2023: President Joe Biden and House Speaker Kevin McCarthy speak outside the Annual Friends of Ireland Luncheon at the U.S. Capitol.
    Drew Angerer | Getty Images News | Getty Images

    The U.S. is in a weaker position now than when S&P downgraded its sovereign credit rating in 2011, according to the former chairman of the agency’s sovereign rating committee.
    The world’s largest economy is once again facing the prospect of a government shutdown unless lawmakers in Washington can pass a spending bill before an Oct. 1 deadline.

    House Speaker Kevin McCarthy cannot afford to lose more than four votes among fellow Republicans in the House of Representatives, but faces resistance from hard-right members within his caucus, who are demanding deeper domestic spending cuts.
    Moody’s earlier this week warned that a government shutdown would harm the country’s credit, after Fitch downgraded the long-term U.S. sovereign credit rating by one notch in August on the back of the latest political standoff over raising the debt ceiling.
    S&P controversially downgraded the long-term credit rating from AAA representing a “risk free” rating to AA+ as early as 2011, citing political polarization after another debt ceiling squabble in Washington.
    John Chambers, former chairman of the Sovereign Rating Committee at S&P Global Ratings at the time of that 2011 downgrade, told CNBC’s “Capital Connection” on Tuesday that a government shutdown is likely and that the whole episode was a “sign of weak governance.”
    This was a factor that led to S&P’s downgrade of 2011, and Chambers said the U.S. fiscal position is now even weaker than it was back then.

    “Right now the deficit of the general government — which is the federal and the local governments combined — is over 7% of GDP and the government debt is 120% of GDP. At the time, we forecasted that it might get to 100% of GDP, and the government ridiculed us for being too scaremongering,” he said.

    “The external position is about the same, but I think the governance has weakened and the fractiousness of the political settings is much worse, and that has led to government shutdowns, it’s led to fears that the government might default on its debt because of the debt ceiling, and it’s led to a failed coup d’état on the 6th [of] January, 2021.”
    House Speaker McCarthy needs almost all of his Republican colleagues on the side, but the Freedom Caucus, which had 49 members in January, has stalled budget negotiations by demanding harsher domestic spending cuts.
    McCarthy may seek help from Democrats to shore up the necessary votes to avoid a shutdown, but hard-line Republicans have discussed ousting him as speaker if such a compromise is agreed.
    In May of this year, another standoff between the White House and opposition Republicans over raising the U.S. debt limit once again pushed the world’s largest economy to the brink of defaulting on its bills, before President Joe Biden and McCarthy struck a last-minute deal.
    In its August downgrade, Fitch cited “expected fiscal deterioration over the next three years” and an erosion of governance in light of “repeated debt-limit political standoffs and last-minute resolutions.”
    However, the downgrade was dismissed by many big-name bank bosses and economists as largely immaterial. More

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    Stocks making the biggest moves premarket: Levi Strauss, Costco, ChargePoint, Mattel and more

    The Levi Strauss & Co. label is seen on jeans in a store at the Woodbury Common Premium Outlets in Central Valley, New York, U.S., February 15, 2022. 
    Andrew Kelly | Reuters

    Check out the companies making headlines in premarket trading.
    Sirius XM — Shares of the media company fell roughly 2% in premarket trading. A day earlier, Liberty Media proposed combining the Sirius XM tracking stock with the radio company. A special committee composed of board members of Sirius XM is currently considering the proposal.

    Levi Strauss — The apparel maker advanced 1.3% in premarket trading after TD Cowen initiated coverage of the stock at an outperform rating. TD Cowen said Levi’s is in the “early innings of a favorable denim cycle.”
    Costco — Shares of the club retailer fell more than 1% even though Costco’s fiscal fourth-quarter response came in better than expected. The company generated $4.86 in earnings per share on $78.9 billion of revenue. Analysts surveyed by LSEG were looking for $4.79 per share on $77.9 billion of revenue. Comparable sales were up just 0.2% in the U.S., however.
    ChargePoint – The electric vehicle charging stock popped more than 4% after UBS initiated coverage of ChargePoint with a buy rating, saying that the recent stock performance creates an attractive risk-reward.
    XPO — The trucking company climbed about 2% following an upgrade to outperform from Evercore ISI. Analyst Jonathan Chappell forecast greater margin expansion and pricing power from the company.
    Lucid, Rivian —- Shares of the electric vehicle makers ticked up 2.1% and 2%, respectively. Both stocks rose a day earlier as the United Auto Workers strike deepened and garnered support from President Joe Biden, who joined a picket line in Michigan.

    Mattel — Shares of the toymaker gained 2.4% in premarket trading Wednesday after Morgan Stanley initiated Mattel with an overweight rating, calling it a top pick. The firm said Mattel offers some of the best risk-adjusted returns despite a tough macroeconomic environment.
    — CNBC’s Alex Harring, Jesse Pound, Samantha Subin and Pia Singh contributed reporting More