Raphael Stevens

More stories

  • 188 Shares179 Views

    in Business

    Merck Covid drug linked to virus mutations that can spread between people, new study says

    A new study said Merck’s widely used antiviral Covid pill can cause mutations in the virus that occasionally spread to other people.
    But there is no evidence that molnupiravir, sold under the brand name Lagevrio, has produced more transmissible or severe variants of Covid, according to the study. 
    The findings may increase scrutiny about the usefulness of the treatment, which was one of the first Covid drugs available to doctors worldwide during the pandemic.

    A worker holds a bottle of Merck & Co.’s molnupiravir antiviral medication in a warehouse in Shoham, Israel, on Jan. 18, 2022.
    Bloomberg | Bloomberg | Getty Images

    A new study released Monday said Merck’s widely used antiviral Covid pill can cause mutations in the virus that occasionally spread to other people, raising questions about whether the drug has the potential to accelerate Covid’s evolution. 
    The findings may increase scrutiny about the usefulness of the treatment, molnupiravir, which was one of the first Covid drugs available to doctors worldwide during the pandemic.

    Molnupiravir works by causing mutations in Covid’s genetic information, which weakens or destroys the virus and reduces the amount of Covid in the body. However, the study published Monday in the scientific journal Nature found that Covid can sometimes survive treatment with molnupiravir, leading to mutated versions of the virus that have been found to spread to other patients. 
    Researchers in the U.S. and U.K. specifically analyzed 15 million Covid genomes to see which mutations had occurred and when. They found that mutations increased in 2022 after molnupiravir was introduced in many countries. 
    There is no evidence that molnupiravir, sold under the brand name Lagevrio, has produced more transmissible or severe variants of Covid, according to the study. 
    But the findings are important for regulators who continue to assess the risks and benefits of molnupiravir, wrote Theo Sanderson, the lead author of the study and a researcher at the Francis Crick Institute in London, in a post on X, formerly Twitter.
    A spokesperson for Merck pushed back on the new study, claiming the researchers assumed that the mutations they analyzed were associated with molnupiravir-treated patients “without documented evidence of that transmission.”

    “Instead, the authors rely on circumstantial associations between the region from which the sequence was identified and timeframe of sequence collection in countries where molnupiravir is available to draw their conclusion,” the spokesperson said.
    The spokesperson added that genomes with the mutations were “uncommon and were associated with sporadic cases.” 
    The company in February also disputed an earlier study by the same team of researchers, which suggested that molnupiravir is giving rise to new mutations of the virus in some patients. Based on data at the time, a spokesperson for Merck said it didn’t believe molnupiravir was likely to contribute to Covid mutations.
    The new study comes as Covid once again gains a stronger foothold in the U.S., primarily driven by newer strains of the virus.
    But the U.S. and other countries appear to be relying less on molnupiravir to fend off Covid this year: Sales of the drug dropped to around $200 million during Merck’s third quarter, down 83% from the more than $1 billion reported during the same period a year ago. 
    Merck’s molnupiravir has long been controversial because of its ability to cause genetic mutations. 
    The U.S. Food and Drug Administration first approved the drug for emergency use in late 2021. But the FDA recommends against using Lagevrio during pregnancy because non-clinical studies suggest that it may cause fetal harm.
    Molnupiravir also isn’t authorized for use in patients under 18 because it may affect bone and cartilage growth. More

  • 163 Shares179 Views

    in Business

    Sierra Space raising nearly $300 million from Japanese consortium at $5 billion valuation

    Sierra Space, the subsidiary of private aerospace contractor Sierra Nevada Corporation, is finalizing a raise of nearly $300 million, CNBC has learned.
    The round values the space company at about $5 billion, according to two people familiar with the transaction.
    The fresh funds come as Sierra Space focuses on getting its Dream Chaser spaceplane flying.

    Artist’s rendering of Sierra Space’s Dream Chaser spaceplane in this undated handout obtained March 25, 2022.
    Sierra Space | via Reuters

    Sierra Space, the subsidiary of private aerospace contractor Sierra Nevada Corporation, is finalizing a raise of nearly $300 million, CNBC has learned.
    The round values the space company at about $5 billion, according to two people familiar with the transaction, who asked to remain anonymous to discuss internal matters. Sierra Space expects to announce the raise as soon as this week, those people said.

    Sierra Space’s equity round is being led by Japanese investors MUFG, Kanematsu and Tokio Marine, those people said, with significant participation from prior investors and insiders. Citigroup is advising on the deal.
    Two years ago, Sierra Space raised $1.4 billion at a $4.5 billion valuation from investors including General Atlantic, BlackRock, AE Industrial Partners, Coatue and Moore Strategic Ventures.
    Sierra Space did not respond to CNBC’s request for comment on the fundraise.

    Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

    The fresh funds come as Sierra Space focuses on getting its Dream Chaser spaceplane flying.
    Dream Chaser has been in development for years with a goal to deliver cargo and eventually crew to low Earth orbit as a reusable vehicle. It resembles a miniaturized NASA Space Shuttle in appearance and is built to launch atop a traditional rocket and land on a runway like an airplane.

    The first Dream Chaser launch was previously scheduled for late last year, but delays in the development of United Launch Alliance’s Vulcan rocket pushed back that timeline. Dream Chaser is planned to launch on ULA’s second Vulcan mission, with the first Vulcan launch targeting the fourth quarter of this year.
    Sierra Space is also one of several companies working on a private space station. It plans to launch a “pathfinder” demonstration mission of its LIFE (Large Integrated Flexible Environment) habitat in 2026. More

  • 150 Shares169 Views

    in Business

    The first tour inside Manhattan’s newest private club, with $100,000 membership fees

    From Casa Cipriani and Zero Bond in New York, to the Aster and Heimat in Los Angeles and ZZ’s Club in Miami, new private clubs have redefined the old-world membership clubs and created safe spaces for today’s privacy-minded, highly mobile wealthy.
    The club boom has created an arms race of amenities, with clubs vying to outdo each other with dining spaces, celebrity chefs, wellness spas, gyms, bars, pools, nightclubs, plush hotel suites and high-tech board rooms.

    A battle between elite membership clubs is about to reach a whole new level, as Core Club’s new 60,000-square-foot megaclub prepares to open in Manhattan next month.
    The new Core space, spread over four floors above Midtown, is the latest in a wave of elite membership clubs that have opened in major cities since the pandemic. From Casa Cipriani and Zero Bond in New York, to the Aster and Heimat in Los Angeles and ZZ’s Club in Miami, the clubs have redefined the old-world membership clubs and created safe spaces for today’s privacy-minded, highly mobile wealthy.

    More than a dozen new clubs have opened or announced plans to open in Manhattan since 2020. Some, like Aman, are offshoots of hotel brands. Others, like ZZ’s and Casa Cipriani, leverage the cult-like fan base of their restaurants. Many are geographic expansions of existing hotspots, like LA’s famed San Vicente Bungalows opening in New York.

    A rendering of a bar area at the Core Club, a private membership club in Midtown Manhattan.
    Courtesy: Core Club

    The club boom has created an arms race of amenities, with clubs vying to outdo each other with dining spaces, celebrity chefs, wellness spas, gyms, bars, pools, nightclubs, plush hotel suites and high-tech board rooms. ZZ’s Club, owned by Major Food Group and scheduled to open in Hudson Yards this fall, will boast multiple restaurants and a “culinary concierge” — a team of chefs able to whip up any dish that it’s members request.
    “No one’s ever done this before,” said Jeff Zalaznick, managing partner for Major Food Group. “We’ve got so much talent in this kitchen. If you want your mother’s meatloaf in two days, we can make it. You want fried chicken, we can make it and probably make a great version.”
    The price for access is soaring: the Aman Club in Manhattan, part of Aman New York’s new 83-suite hotel, charges $200,000 for membership along with $15,000 a year in annual dues. Core’s memberships range from $15,000 for an individual membership to $100,000 for a family membership, along with annual dues of $15,000 to $18,000 a year.

    Arrows pointing outwards

    With more clubs scheduled to open in the fourth quarter and beginning of next year, some members worry that New York and other big cities are becoming over-saturated with club offerings, especially if the economy plunges into recession.

    Club owners and managers say they see no slowdown in demand, as the wealthy seek communities and private spaces where they can work, play, stay and network in a secure and exclusive space.
    Industry watchers say the U.S. may be moving toward the London model of social clubs, where storied institutions like Annabel’s, 5 Hertford Street and White’s play a central role in the social and professional lives of the upper crust. Soho House, founded in London in 1995 by restauranteur Nick Jones, has expanded to become the global goliath of the private club world, with dozens of locations around the world and a publicly traded stock.

    Casa Cipriani private membership club in New York.

    Core Club’s founder and CEO, Jennie Enterprise, said that after the pandemic, the wealthy value privacy and a sense of community more than ever.
    “I think the proliferation of private clubs is a reflection of an exceptional business model,” she said. “The annuity subscription-based business model in any industry is attractive. The activity in the space certainly reflects a desire for curated communities and experiences. And probably with a dynamic of social media, and a lack of privacy, I think that discretion and private communities are probably something that is more aligned with the culture of the moment.”

    A rendering of a terrace at the Core Club, a private membership club in Midtown Manhattan.
    Courtesy: Core Club

    Club owners say members often join multiple clubs, since each has its own focus and atmosphere. Zero Bond, founded by nightclub impresario Scott Sartiano, has more of a nightclub vibe and has hosted Kim Kardashian, Pete Davidson and Gigi Hadid. Aman has the hushed (some say eerily quiet) feel of a zen resort, while Casa Cipriani features the flashy, people-watching theater of Cipriani’s storied New York eateries.
    Zalaznick said his affluent clientele is “spending more than ever” at ZZ’s Club in Miami and the company’s high-end restaurants, which bodes well for the forthcoming ZZ’s Club New York.
    “The things that bring people back are great food, great service, great experiences, great connections and the staff’s ability to cater to people’s needs or desires,” he said. “That’s our focus, and that’s what will give us longevity in the club space.”
    Core gave CNBC an exclusive first tour of its new club at 711 Fifth Avenue, scheduled to open in mid-October. The group opened its first space in 2005 at a nearby location on 55th street and became the most successful of the new breed of modern, business-oriented membership clubs. In need of more space and a fresh look, Core leased four floors on the top of the former Coca-Cola building and spent two years and tens of millions of dollars building the ideal layout.
    Spanning the 15th through 18th floors, Core has over 6,000 square feet of outdoor terrace space with views of Central Park and the glass towers of Midtown.
    The 15th floor houses 11 luxury hotel suites, which are between 500 and 750 square feet apiece. Priced at around $1,500 per night, the rooms will be available for guests or their family members. The same floor also houses a spa with treatment rooms and a salon.

    A rendering of the Core Club, a private membership club in Midtown Manhattan.

    The 16th floor is home to the gym, juice bar and the Dangene Institute, which features the latest in anti-aging skincare technology.
    On the 17th floor, members will find a speakeasy-style lounge, which includes a stylish bar, blue velvet couches and a glass wine and champagne vault, called the wine library. Another set of glass doors leads to the culinary lab, a U-shaped table where celebrity chefs from around the world will serve up special dishes for members.

    A rendering of the Core Club, a private membership club in Midtown Manhattan.
    Courtesy: Core Club

    The 18th floor houses the more formal dining area, which will serve mostly Mediterranean fare during the day and a more seasonal, varied menu at night. Core’s culinary program is headed by Chef Michele Brogioni, the celebrated former executive chef at Giorgio Armani. The club’s bread and pastries (including what is arguably New York’s best lemon cake) is overseen by head pastry chef Mauro Pompili.
    The 18th floor also houses state-of-the art conference and board rooms, a screening room and a flexible events space and gallery that can be used for exhibits, parties and big gatherings.
    Along with the Manhattan club, Core has new locations in Milan and San Francisco and has plans for several others in the coming years, Enterprise said.

    A rendering of a dining area at the Core Club, a private membership club in Midtown Manhattan.
    Courtesy: Core Club

    Yet Core’s main draw, she said, isn’t the spaces or the amenities, but the community and well-spring of ideas. Core produces between 150 and 200 cultural events a year, from performances, exhibits and talks, to tastings, interviews and showcases.
    “We’re ideas-led, not amenities-led,” Enterprise said. “Clearly we have beautiful, world-class amenities. But what defines us is the quality of our ideas. We curate a community of relentlessly curious and like-minded people from across the spectrum. So people can intersect with other people from media sports, fashion, finance, science, technology, design and beyond. Our commitment to cultural programming reflects a desire for our members to endlessly cultivate themselves.”
    While Core never discloses the names of any of its members, some cited in past media reports include Blackstone CEO Stephen Schwarzman, NFL Commissioner Roger Goodell, fashion designer Tory Burch, Vornado CEO Steven Roth and Estee Lauder Executive Chairman William Lauder.
    Since the new location is nearly twice the size as its prior outpost and can accommodate more members, Core is accepting and starting to review new applications.
    “We are getting a lot of applications,” Enterprise said. “There is no single requirement. We look for interesting, curious people who will add to the community.”

    A rendering of the Core Club, a private membership club in Midtown Manhattan. More

  • 138 Shares149 Views

    in Finance

    Corporate pensions are at their healthiest in more than a decade

    Pension plan funding has improved steadily since the Great Recession, according to Aon data.
    A pension’s so-called funded ratio is one gauge of plan health. It measures a plan’s assets versus the future payouts it must make to beneficiaries.
    A better funded status makes it more likely companies will keep their pensions active and reduces the risk of benefit cuts for some workers, experts said.

    10’000 Hours | Digitalvision | Getty Images

    Pension plans for the largest U.S. companies are at their healthiest in more than a decade — and that’s largely good news for the workers who participate in such plans, said retirement experts.
    Public companies in the S&P 500 stock index had an average pension “funded ratio” of 102% as of Sept. 21, according to data tracked by financial services firm Aon. That’s the highest level since at least the end of 2011, when the ratio was around 78%.

    A funded ratio is one way to gauge pension health. It measures a company’s pension assets versus its liabilities. In other words, it assesses the money a pension has on hand versus the funds a company needs to pay future pension income to workers.
    More from Personal Finance:Social Security’s trust funds are running dry. 4 things to knowThis account is like an ‘extra strength’ Roth IRA’Financial vortex’ may reduce retirement savings by up to 37%
    A funded level of 100% or more means it currently has the assets on hand to meet it future obligations.
    “This is a really good thing,” Byron Beebe, global chief commercial officer for Aon, said of the current funding level. “It’s at the highest it’s been in a really long time.”
    Of course, pension funding is merely a “financial snapshot … at a single moment,” according to the American Academy of Actuaries. It can change based on factors such as the health of the U.S. economy. Each plan is unique, meaning funded status alone isn’t the only gauge for pension health, it said.

    Why pension funding is important for workers

    Pensions in the private sector have become rarer over the decades as companies have replaced them with 401(k)-type plans.
    Pension plans are also known as “defined benefit” plans, since workers’ future benefit is defined according to a formula based on factors such as tenure and salary.
    At their peak, in 1983, there were 175,000 defined-benefit plans in the private sector, according to U.S. Department of Labor data. By 2020, that number had declined to about 46,000.

    Many of those plans are “frozen” and no longer allow workers to accrue benefits, however.
    As a result, there are fewer “active” participants who continue to earn pension credits. In 1975, there were 27.2 million active participants. By 2019, the number had fallen by more than half, to 12.6 million, according to the Congressional Research Service.
    In total, there are about 32 million participants in corporate pensions, including both active participants and those no longer accruing benefits, according to the Labor Department.
    Having a healthy pension plan makes it more likely companies with active plans will hold onto them and won’t terminate or freeze them, Beebe said.

    This is a really good thing. It’s at the highest it’s been in a really long time.

    Byron Beebe
    global chief commercial officer for Aon

    In extreme cases, underfunding can also lead to a benefit cut, experts said.
    Companies with failed pensions may transfer their obligations to the federal Pension Benefit Guaranty Corp., which serves as a financial backstop that guarantees pension benefits.
    However, beneficiaries aren’t assured to get their fully promised payout. That’s because PBGC insures benefits up to a limit, based on age. Most pensioners aren’t affected by this limit, PBGC said, but those who are would get a benefit reduction.  

    Why plan funding has improved

    Thomas Barwick | Digitalvision | Getty Images

    Corporate pension funding languished after the 2008 financial crisis.
    The recent improvement is largely attributable to three factors: a rise in interest rates, strong stock performance and policy changes to how some companies fund their plans, said John Lowell, partner at October Three, a pension consulting firm.  
    Due to how pension liabilities are calculated, having a higher interest rate on bonds generally means companies don’t have to contribute as much money to their pensions today to satisfy future benefits, Lowell said.
    The insurance premiums companies pay to the PBGC also generally rise according to a plan’s level of underfunding, and those premiums have increased significantly, Lowell said. As a result, companies are more proactive about making contributions to their plans to ensure they’re fully funded, Lowell said.    
    Aside from a few periods such as 2022, asset classes such as stocks “have been performing well for a solid 10 years or more,” boosting plan assets, Lowell said. The S&P 500 lost more than 19% in 2022, its worst showing since 2008.
    Companies have also adopted investment strategies that fluctuate less with the whims of the investment markets, said Beebe at Aon. In a simple sense, with a portion of the portfolio, they buy bonds whose income matches that of future pension promises, offering more predictability, he said. More

  • 88 Shares129 Views

    in Finance

    Why China may struggle to escape stagnation

    On a Typical evening Zhengzhou’s manufacturing district should be teeming with workers heading back to their dormitories. For more than a decade the city of 13m in central China has been home to Foxconn employees who assemble iPhones in a local megafactory—meaning activity at hole-in-the-wall eateries and dank internet cafes provides an informal gauge of the health of the local economy. But now one of the main dormitory areas is vacant. Labourers are stripping out what remains of internet cafés and hauling off sofas that once furnished dorms. Many workers fled, never to return, in October last year, escaping a lockdown that had confined them to their dorms, sometimes ten to a room, for weeks on end.Zhengzhou has become one of China’s most problematic cities. gdp per person in Henan province, of which it is the capital, sits at 27% below the national average. The city’s difficulties—including a lack of work, falling property prices and banking instability—are acute examples of those facing China at large. They also emerged earlier than those in much of the rest of the country. As such, Zhengzhou has become a laboratory for potential remedies, some of which have since been rolled out on a national level.China’s recent economic data, released on September 15th, indicates that the economy is at least starting to stabilise. The annual rate of growth in industrial production rose to 4.5% in August. Retail sales were up by 4.6%. Both beat analysts’ expectations. But the floor total area of new homes under construction fell by 7.1% in the first eight months of the year, continuing its decline. And even if the situation has begun to stabilise, Zhengzhou’s experience shows how hard it will be for China to truly escape from its economic malaise—and how long any recovery will take.The region’s troubles began to accelerate in 2020, with the default of Yongcheng Coal, a local energy firm. The next year floods swept the city, submerging a metro line and killing almost 400 people. Local officials, including the party secretary, were sacked for hiding the true number of casualties. In 2022 bank depositors around the country discovered they could not withdraw their funds from several banks in the province, leading to weeks of protests outside the Zhengzhou branch of China’s central bank. The city also experienced tough treatment during covid-19. Locals shudder at the memory of a four-month lockdown endured before the abandonment of “zero-covid” policies.As one woe after another has been visited upon the city, its property market has worsened. China has been in the throes of a real-estate crisis since 2021. Developers have come up short on the cash needed to finish flats. And because most buyers pay upfront, they have found themselves taking out mortgages without receiving homes. In July last year dissidents began tracking mortgage boycotts—and found Zhengzhou to be at the centre. By some counts, 600,000 local homebuyers have bought flats in troubled developments. cric, a research firm, estimates that one in every 13 households has been affected.The situation has forced local policymakers to act. Henan’s plans to ease joblessness have included a 100-day, military-style campaign, which began in May and recently came to an end. It aimed for “zero-dynamic clearing” of youth unemployment, borrowing language from the zero-covid policy. Staff at universities were told to identify youngsters who were struggling to find jobs and to connect them with public institutions, state-owned enterprises and even employers in the countryside. Since the campaign has only just concluded, the results are not yet clear—but it seems unlikely to have discovered thousands of new employment opportunities. With a poor job market and 870,000 new university graduates this year alone, Henan’s public servants would have had to have been working overtime to have put even the slightest dent in the problem.Other reforms are a little more thought-through. In March Zhengzhou became the first big city to drop restrictions on buying second homes, in an attempt to prop up demand. Last month it led the way again as the first city to launch reforms that instructed banks to lower mortgage rates, exempted new graduates from deed taxes and handed out subsidies of up to 30,000 yuan ($4,100) for home purchases for families with three children. It also lifted a rule that banned people from reselling their homes within three years of purchase.By early September work appeared to have restarted on some of the city’s largest stalled property developments. One of these, named Qifucheng, had been paused since 2019. The development, with more than 6,000 residential units, has been called Zhengzhou’s largest lanweilou, or abandoned building site. Last year the developer behind it was accused of putting a few workers on site in order to appear as if work was taking place, perhaps to avoid being sued. Now trucks are moving in and out of the site, and many workers are on the job. If work on similar projects resumes, people looking for new flats might even shake off their distrust of the sector. This will take time, however. Property prices in the city are still heading in the wrong direction—they fell by 0.5% month-on-month in August—which bodes ill for a rapid recovery in other second-tier cities.Perhaps Zhengzhou’s most daring reform has been to relax the constraints of the hukou, a household-registration system. A year ago city officials announced that migrants with local jobs and residences would qualify for a registration necessary to buy homes or access education, abandoning a system that has created a two-tier society across China. In theory, ditching the hukou could relieve many of the city’s problems. Talented young people looking to live in a big, central city might move to Zhengzhou. Some might even launch startups, attracting workers from around the country. All of this should help boost property prices. Yet since policymakers introduced the reform, other provinces have made similar moves, increasing competition for potential arrivals. In August, for instance, Jiangsu, a prosperous coastal region, said that it would relax hukou requirements for many of its cities.After months of delay, the central government has begun to show that it is taking the country’s economic stagnation seriously. Meanwhile, the central bank has loosened monetary policy. But questions remain over whether China’s leaders will be able to solve local crises, which is necessary if the country is to raise its long-run growth. So far, the message has been that local leaders will need to solve many of their own problems. It is unfortunate, then, that Zhengzhou’s experience suggests that doing so will be a struggle. ■ More

  • 125 Shares199 Views

    in Finance

    Some soft commodity prices are surging, adding to consumer woes

    A farmer cutting a cocoa pod to collect the beans inside on a farm in Azaguie, Ivory Coast, on Friday, Nov. 18, 2022.
    Bloomberg | Bloomberg | Getty Images

    Surging prices for soft commodities, from orange juice to live cattle, are complicating the inflation picture. 
    A host of agricultural commodities have climbed in recent months, driven by weather-related damage and rising climate risks around the globe, resulting in tighter supplies. The higher prices add another layer of pain to consumers’ wallets at a time when stubborn core inflation, excluding food and energy, stood at 4.3% in August.

    Futures contracts on orange juice, live cattle, raw sugar and cocoa each hit their highs for the year this month. All are in “supply-driven bull markets right now,” said Paul Caruso, director of commodity investments at Ancora.
    The S&P GSCI Softs index, a sub-index of the S&P GSCI commodities index that measures only soft commodities, has jumped more than 18% so far this year.

    Orange juice has shot up due to a short global citrus supply and hurricanes last fall that hit Florida, the primary producer of orange juice for the U.S. Major exporters, including Brazil and Mexico, also lowered their estimated orange crop yields for the year due to warmer temperatures making harvests more difficult.
    The juice futures market reached a record $3.50 per pound this month. Live cattle futures similarly hit a record, reaching $1.9205 per pound. 
    Meat prices have been driven by shrinking U.S. cattle herds, continued beef demand, plus higher input costs for labor and fuel. A prolonged drought in the Midwest earlier this year damaged grasslands and hay crops, forcing some farmers to cull their herds. Data from the U.S. Department of Agriculture forecasts declining supplies this year and next, and potentially through 2025 and 2026, before supplies are rebuilt.It’s not just breakfast or lunch that has gotten more expensive — so has dessert.

    Raw sugar and cocoa prices have soared in recent months. Sugar futures reached 27.62 cents per pound last week, the highest since 2012, while cocoa futures soared to $3,763 per metric ton this month, also the highest level in more than a decade.
    Prices for sugar spiked earlier this year as rising demand combined with downward crop revisions from key producing countries, such as India and Thailand, resulting from extreme weather. India, for example, is the world’s second largest sugar producer after Brazil.
    “Soft commodities in particular are very fragile and very sensitive to weather change,” which can disrupt production, said Darwei Kung, head of commodities and natural resources at DWS. “That’s why we’re seeing the price go up, and there’s no short term solution because there’s only so much people can produce. And that’s not sensitive to demand as much as it is to the production side.”
    Given that food and energy are not included in calculations of core inflation, Kung added that consumers may experience higher daily prices than are taken into account by central bank policymakers. That could create a “bifurcation” of perspectives around inflation that’s tougher on consumers, at least in the short-term, he said.
    Shoppers are bearing the brunt of the higher prices as the world’s largest food companies try and pass along their rising input costs.
    “It’s certainly not the time to talk about deflation [or] price decreases because of the significant decrease that we have seen in gross margin…We still see a high level of input cost inflation,” Nestlé’s chief financial officer François-Xavier Roger said at Barclays Consumer Staples Conference earlier this month.
    The Nestlé executive noted increased costs for sugar, cocoa and Robusta beans for coffee, adding that, “obviously, some other items have declined like energy, like transportation, but net-net, still a few billions up in terms of input cost inflation in 2023.”
    Unilever’s chief financial officer Grame David Pitkethly similarly noted at the Barclays conference that the company — maker of Ben & Jerry’s, Magnum and Breyers ice cream — is still seeing inflation in its nutrition and ice cream categories. In late July, Unilever reported a 12.6% rise in “underlying prices” within nutrition and 11.5% within ice cream, the latter being Unilever’s most discretionary category where “private label is attractive to the consumer,” Pitkethly said. 
    “We’ve got lots and lots of inflation and pricing…the consumer feels that pricing,” the CFO said.
    To be sure, prices of other agricultural commodities, such as corn and wheat, have fallen from their highs earlier this year, brightening the outlook for consumers. 

    Benchmark soybean futures fell to a one-month low last week after the USDA reported weaker-than-expected soy export sales. Corn and wheat hit their year-to-date highs in January and February, and have fallen since.
    Some analysts are counting on higher interest rates and slower economic to curb consumer appetites.
    “I think that volatility persists as we understand what the harvest is, but as important as the harvest is, it’s all about understanding the demand,” said Jeff Kilburg, founder and CEO of KKM Financial.
    If demand suffers, it might even foreshadow a pullback in stocks, Kilburg said. More

  • 150 Shares199 Views

    in Business

    Nissan says all new models launched in Europe will be fully electric

    Nissan announced Monday that all new models it launches in Europe will be fully electric.
    The Japanese carmarker said it was “pressing ahead” with the existing target just a week after the U.K. pushed back a ban on the sale of new gasoline and diesel car sales from 2030 to 2035.
    “There is no turning back now,” Makoto Uchida, Nissan president and CEO, said in a statement.

    Japanese carmarker Nissan announced Monday that all new models it launches in Europe will be fully electric, as it reaffirmed its aim for solely electric vehicle sales on the continent by 2030.
    It said it was “pressing ahead” with the existing target just a week after the U.K. pushed back a ban on the sale of new gasoline and diesel car sales from 2030 to 2035.

    “There is no turning back now,” Makoto Uchida, Nissan president and CEO, said in a statement. “We believe it is the right thing to do for our business, our customers and for the planet.”
    It says one-third of the more than 1 million EVs it has sold worldwide have been in Europe.
    Globally, Nissan plans to launch 27 electric and hybrid vehicles, which includes 19 all-electric models, by 2030. The company was an early pioneer in the EV space but has struggled with competition from Tesla and China’s BYD.
    It also plans to introduce cobalt-free technology to reduce the cost of EV batteries by 65% by fiscal 2028 and launch a vehicle with its own all-solid-state batteries (ASSB) by that year. It claims these will reduce current charging times by two thirds.
    Nissan partner Renault, as well as rivals Ford and Stellantis, have all announced plans to make their European passenger ranges fully electric by 2030.

    The U.K.’s pushback of the 2030 sales target was criticised by Ford UK Chair Lisa Brankin, who said it created uncertainty and risked taking focus away from the EV transition.
    Nissan confirmed one of its upcoming EVs will be made in its plant in Sunderland in the U.K.
    “Sunderland is one of our major plants where we have history, cost competitiveness … and we would like to further show our electrification strategy here in this country,” Uchida told CNBC’s Arjun Khapal at the Nissan Design Europe studio in London.
    Uchida said the automotive industry was “evolving and challenging everywhere in the world.”
    In China, he said the company would look to launch cars more quickly and launch new models targeting specific consumers. More

  • 163 Shares169 Views

    in Business

    Writers reach tentative deal with studios to end strike after nearly 150 days

    Hollywood scribes initiated a work stoppage in early May as negotiations broke down with studios including Disney, Paramount, Universal and Warner Bros. Discovery.
    Talks between the Writers Guild of America and the Alliance of Motion Picture and Television Producers resumed last week after months of starts and stops.
    The WGA and AMPTP are still drafting the final contract language.

    Hollywood’s writers and studios have a preliminary labor agreement.
    Talks between the Writers Guild of America and the Alliance of Motion Picture and Television Producers resumed last week after months of starts and stops, ultimately leading to a tentative deal that would end the ongoing writers strike.

    The WGA and AMPTP are still drafting the final contract language.
    “What we have won in this contract — most particularly, everything we have gained since May 2nd — is due to the willingness of this membership to exercise its power, to demonstrate its solidarity, to walk side-by-side, to endure the pain and uncertainty of the past 146 days,” the WGA negotiation committee wrote in a letter to members Sunday night. “It is the leverage generated by your strike, in concert with the extraordinary support of our union siblings, that finally brought the companies back to the table to make a deal.”

    Striking members of the Writers Guild of America and supporters march toward the La Brea Tar Pits in Los Angeles, June 21, 2023.
    Irfan Khan | Los Angeles Times | Getty Images

    Hollywood scribes initiated a work stoppage in early May as negotiations broke down with studios including Disney, Paramount, Universal and Warner Bros. Discovery. Television and film writers sought protections against the use of artificial intelligence, in addition to increases in compensation for streamed content.
    The WGA did not disclose what provisions ultimately made it into the preliminary contract, but told union members that “this deal is exceptional — with meaningful gains and protections for writers in every sector of the membership.”
    Once the WGA and AMPTP agree on the language within the contract, the negotiating committee will vote on whether to recommend the agreement and send it to the Writers Guild of America West Board and the Writers Guild of America East Council for approval. Then, the board and council will vote on whether to authorize a contract ratification vote by membership.

    WGA leadership noted that the strike is not over and no members of the guild are to return to work until the agreement is officially ratified. Members were encouraged to continue standing in solidarity with striking actors on the picket lines.
    “SAG-AFTRA congratulates the WGA on reaching a tentative agreement with the AMPTP after 146 days of incredible strength, resiliency and solidarity on the picket lines,” the Screen Actors Guild-American Federation of Television and Radio Artists wrote in a statement Sunday. “While we look forward to reviewing the WGA and AMPTP’s tentative agreement, we remain committed to achieving the necessary terms for our members.”
    Following negotiations with writers, the AMPTP will need to turn its attention to SAG-AFTRA. The acting guild’s members have been on strike since mid-July and are seeking contract updates similar to those requested by the writers.
    Hollywood performers are looking to improve wages, working conditions, and health and pension benefits, as well as establish guardrails for the use of AI in future television and film productions. Additionally, the union is seeking more transparency from streaming services about viewership so that residual payments can be made equitable to linear TV.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is a member of the Alliance of Motion Picture and Television Producers. More