Raphael Stevens

Despite a loss in population during the pandemic, average rents in Manhattan are now up 30% compared to 2019.
The average monthly rent in July was $5,588, up 9% over last year and marking a new record. Median rent, at $4,400 per month, also hit a new record, along with price per square foot of $84.74, according to a report from Miller Samuel and Douglas Elliman.
It was the fourth time in five months that Manhattan rents hit a record.

A view of clouds over Manhattan skyline in New York, United States on August 08, 2023. (Photo by Fatih Aktas/Anadolu Agency via Getty Images)
Anadolu Agency | Anadolu Agency | Getty Images

Rents in Manhattan hit a new high in July, as higher interest rates and low supply continued to drive up prices.
The average monthly rent in July was $5,588, up 9% over last year and marking a new record. Median rent, at $4,400 per month, also hit a new record, along with price per square foot of $84.74, according to a report from Miller Samuel and Douglas Elliman. It was the fourth time in five months that Manhattan rents hit a record.

Despite a loss in population during the pandemic, average rents in Manhattan are now up 30% compared to 2019. Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm, said August rents could mark a new record because it is typically the peak rental month as families look to move before the start of the school year.
“We could see another month of records,” Miller said.
Manhattan’s soaring rents have continued to defy predictions of analysts and economists. The borough’s population dropped by 400,000 between June 2020 and June 2022, according to U.S. Census data. While experts say the population has increased since last year, they say it is still likely below 2019.
What’s more, offices in Manhattan remain less than half occupied due to remote work. According to Kastle Systems, New York offices were only 48% occupied at the end of July.
Yet despite the population loss and rise of remote work, Manhattan rents continue to soar. Brokers say the lack of apartments for sale, due to higher interest rates, have forced many would-be buyers to rent. Younger workers also have flocked to the borough since the pandemic.

Miller said that while the number of apartment listings are below the historical average, inventory of apartments for rent actually rose by 11% in July. At the same time, the number of new leases signed declined by 6% compared to last year.
The combination of rising inventory and falling leases suggests that Manhattan renters may have finally reached their financial limit, Miller said.
“It looks like rents are probably close to the tipping point,” Miller said. “We’re seeing transactions slip because of affordability.”
The increase in rents in July was across the board, from small studio apartments to sprawling three-bedrooms. Yet the larger, more expensive apartments have seen the largest increase in prices since the pandemic.
While studio apartments have seen rent prices up 19%, average rental prices for three-bedroom units are up over 36%.
Brokers say one reason for the dearth of rentals is the growth in Airbnb units. Recent rent regulations have also taken tens of thousands of units off the market, brokers say. Landlords say the laws, which limited rent increases on rent-stabilized units, made it unprofitable to renovate dilapidated apartments. As a result, many are now sitting empty and unrentable.
Brokers add that even with rent hikes of 30% to 40% last year, many renters chose to stay, which also limited supply.
“The vacancy rate is still low, making it very hard for tenants to secure an apartment,” said Janna Raskopf, with Douglas Elliman. “Many tenants renewed their current leases and are staying put. I believe this trend will continue at least for the next couple of months.” More

Novo Nordisk’s obesity drug Wegovy slashed the risk of serious heart problems by 20% in a large clinical trial.
That landmark finding could put more pressure on U.S. insurers to cover the blockbuster medication and similar weight loss treatments.
But organizations representing insurers emphasized that the data is still preliminary, and concerns remain about the high costs of the medications.  

A selection of injector pens for the Saxenda weight loss drug are shown in this photo illustration in Chicago, Illinois, U.S., March 31, 2023. 
Jim Vondruska | Reuters

Novo Nordisk’s obesity drug Wegovy slashed the risk of serious heart problems by 20% in a large clinical trial — a landmark finding that could put more pressure on insurers to cover the blockbuster medication and similar weight loss treatments. 
The data sent weight loss-related stocks soaring on Tuesday, with Novo Nordisk and its main rival Eli Lilly soaring more than 15%. Weight Watchers International, which owns a telemedicine firm that prescribes obesity drugs, jumped as much as 24%. 

But it is likely that more data of this type will be necessary before the U.S. sees increased insurance coverage for obesity drugs.
While the trial results demonstrate that obesity drugs may have significant health benefits beyond shedding unwanted pounds, organizations representing U.S. insurers emphasized that the data is still preliminary. They also said concerns remain about the high costs involved with covering those medications, which are nearly $1,350 per month for a single patient. 
While the initial results “offer potentially encouraging news … it’s impossible to evaluate the efficacy and long-term effectiveness of a prescription drug based solely on a drug manufacturer’s press release,” said David Allen, a spokesperson for America’s Health Insurance Plans, a trade association of health insurance companies that cover hundreds of millions of American.  
“Health insurance providers will continue to analyze new evidence as it becomes available,” he added. 
Ceci Connolly, CEO of the Alliance of Community Health Plans, acknowledged the promise of the data but said “outrageous prices should give everyone pause.” The organization represents regional, community-based health plans that cover more than 18 million Americans across the U.S. 

Drugs like Wegovy and Novo Nordisk’s diabetes drug Ozempic have skyrocketed in popularity in the U.S. — while drawing increasing investor interest — for helping people achieve dramatic weight loss over time. Those treatments are known as GLP-1s, a class of drugs that mimic a hormone produced in the gut to suppress a person’s appetite. 
Eli Lilly and Pfizer are working to roll out their own GLP-1s in a bid to capitalize on a weight loss drug market that some analysts project could be worth up to $200 billion by 2030. Nearly 40% of U.S. adults are obese.
But insurance coverage for these drugs is a mixed bag: The federal government’s Medicare program, most state Medicaid programs and some commercial insurance plans don’t cover the treatments. Some of the nation’s largest insurers, such as CVS Health’s Aetna, do. 
Meanwhile, more health insurers are pulling back on coverage. A July survey by Found, a company that provides obesity-care services to 200,000 people, showed that 69% of its patient population do not have insurance coverage for GLP-1 drugs to treat diabetes or weight loss. The results represent a 50% decline in coverage since December 2022. 

Challenging old views of obesity drugs

The new data from Novo Nordisk challenges a long-standing narrative driving the hesitancy among insurers about covering obesity drugs: that Wegovy and similar treatments are merely lifestyle products that offer a cosmetic, not medical benefit. 
“There’s now a long-term, large clinical trial that proves that there’s a big cardiovascular health benefit for patients staying on these drugs,” Jared Holz, Mizuho health-care sector analyst, told CNBC. 
“It’s just going to open up the market to a bigger patient population over time,” he added. 

Debra Tyler’s daughter takes her new medication at home in Killingworth, Conn. She was on successful medication for obesity, however her family insurance dropped coverage on the drug, leaving the Tylers with difficult financial decisions.
Joe Buglewicz | The Washington Post | Getty Images

The study, which began almost five years ago, followed more than 17,600 adults with established cardiovascular disease who were overweight or suffered from obesity. It excluded people with a prior history of diabetes.
A weekly injection of Wegovy achieved the trial’s primary objective of reducing the risk of cardiovascular events, such as heart attacks, strokes and heart condition-related deaths by 20% compared with a placebo.
The new Wegovy data mirrors some of the reduced morbidity and mortality observed in people who undergo bariatric surgery, which involves making changes to the digestive system to help a patient lose weight, according to Dr. Eduardo Grunvald, medical director of the UC San Diego Health Center for Advanced Weight Management.
Around 45% of U.S. employers cover that weight loss procedure, while only 22% cover obesity drugs, according to a 2022 survey released by the International Foundation of Employee Benefit Plans.
Grunvald added that the data challenges the “outdated” idea that obesity is “purely a lifestyle problem or one of weak character and lack of willpower, and hence treatment should not be covered.”

High cost to coverage

Then there’s the high cost of the treatments, at more than $1,000 per patient, per month.
The University of Texas System decided to ratchet down its coverage of those drugs dramatically, noting in July that the cost of covering the drugs under two of its plans is more than $5 million per month, up from around $1.5 million per month 18 months ago, when demand for obesity treatments was lower.
The university is one of the largest employers in Texas, with more than 116,000 employees across the state. Its plans will no longer cover Wegovy starting Sept. 1.
UTS did not immediately respond to a request for comment on whether it will reconsider coverage in light of the Novo Nordisk’s new data. 

George Frey | Reuters

“Given that so many Americans would potentially qualify for these treatments, and the cost is so high, widespread coverage could pose a threat to [an insurance] company’s profitability,” UCSD’s Gunvald said.
He noted, however, that new drugs entering the obesity market could drive competition and potentially lower prices. For example, Eli Lilly’s diabetes drug Mounjaro could get approved for weight management over the next year. Other drugmakers are still years away from rolling out their own medications. 
But obesity is a chronic condition, meaning it doesn’t simply go away when a patient loses weight. So patients must continue to take drugs like Wegovy to keep the pounds off and maintain other health benefits, which would further strain insurers’ budgets.
“It’s very difficult to justify that expense because the insurance would never recoup that,” said Dr. Ethan Lazarus, an obesity medicine physician and past president of the Obesity Medicine Association. That group is the largest organization of physicians, nurse practitioners and other health-care providers dedicated to treating obesity. 
“I find it unlikely that we’re going to prove the cost-effectiveness of these medications at a price of $12,000 a year,” he said. 
The cost barrier may be even higher in the public sector. A recent article in the New England Journal of Medicine warned that if just 10% of obese Medicare beneficiaries were to take Wegovy, it would cost the program $27 billion a year. 
The federal program had 65 million enrollees as of March and currently doesn’t cover the treatments.  
A provision of a 2003 law established that Medicare Part D plans can’t cover drugs used for weight loss, but the program does cover obesity screening, behavioral counseling and bariatric surgery.
Lazarus noted that a group of bipartisan lawmakers have aintroduced legislation that would eliminate the provision, but said its fate in Congress is far from certain.

Need for more data

Lazarus said there may also be a need for more data demonstrating the heart-health benefits of obesity drugs before more insurers decide to cover them. 
“I think we need two or three more of these,” he said. “It becomes more compelling if we see it as an effect for the class of drugs versus an effect for one company’s drug.” 
Eli Lilly is conducting its own study on whether its diabetes drug Mounjaro prevents heart attacks, strokes and other cardiovascular conditions. It’s unclear when the company will release its data. 
But experts and analysts are already confident that Mounjaro could have similar — if not better — heart-health benefits as Wegovy. 
Wells Fargo analyst Mohit Bansal noted that Wegovy causes around a 17% weight reduction in patients, while Mounjaro causes roughly 22%. 
“By that logic, it does seem it could have better cardiovascular benefit,” he told CNBC.  More

President Joe Biden signed the CHIPS and Science Act into law one year ago, and semiconductor companies across the U.S. have promised to spend $231 billion on building chip manufacturing hubs on American soil.
Now, as the shovels hit the ground to begin construction, companies are realizing how difficult it is to find talent.
Taiwan Semiconductor Manufacturing Company said it had to delay production at its $40 billion Arizona plant due to a lack of workers in the U.S.

A push to re-shore semiconductor manufacturing in the U.S. has spurred massive spending, and with it, concerns about the size of the skilled workforce.
President Joe Biden signed the CHIPS and Science Act into law one year ago, and semiconductor companies across the U.S. have promised to spend $231 billion on building chip manufacturing hubs on American soil. Now, as the shovels hit the ground to begin construction, companies are realizing how difficult it is to find talent.

Taiwan Semiconductor Manufacturing Company, the largest contract chipmaker in the world, said it had to delay production at its $40 billion Arizona plant due to a lack of workers in the U.S.
“We’re still looking for more qualified skilled tradespeople across the board,” said TSMC Arizona President Brian Harrison. “We are installing our unique-to-the-United-States and extremely advanced pieces of equipment.”
TSMC is bringing in workers from Taiwan to handle the high-tech equipment and train U.S. workers.
“[U.S. workers] just don’t have experience on these specific tools and techniques,” Harrison said.

But not everyone is a fan of TSMC’s approach. The Arizona Pipe Trades 469 union has helped fund a website called Stand with American Workers accusing TSMC of overlooking Arizona workers in favor of Taiwanese counterparts in an attempt to “exploit cheap labor.”

But Harrison argued that’s a misconception. “It actually is more expensive to bring the workers from Taiwan, pay them a fair U.S. salary while they’re in the U.S. and pay for all their relocation and housing and support.”
Much of the semiconductor supply chain is based overseas, which means there are fewer qualified workers to staff these facilities here in the U.S.
The chip industry in the U.S. is projected to grow by nearly 115,000 jobs by 2030, according to a new study from Oxford Economics and the Semiconductor Industry Association. The study finds 67,000 of those jobs for technicians, computer scientists and engineers risk going unfilled by 2030 due to a lack of educational training programs and school funding.

A microchip and flag of the U.S. are seen in this multiple exposure photo taken in Krakow, Poland, April 12, 2023.
Jakup Porzycki | Nurphoto | Getty Images

Intel CEO Pat Gelsinger agreed that the industry’s workforce could be better skilled but laid some of the blame in navigating those challenges on TSMC.
“I think they’re inexperienced operating on a global fashion. Samsung hasn’t complained as they’re building in the U.S., but they’re very much a global company,” Gelsinger said.
“That said, we do see that skilled labor — in the construction, as well as skilled labor for our fabs — is something we got to work on,” he added.

More than 50 community colleges announced new or expanded semiconductor workforce programs since the CHIPS Act was passed last year.
Student applications for full-time jobs posted by semiconductor firms were up 79% in the 2022-23 academic year, compared with 19% for other industries, according to student job posting website Handshake. Many chip firms are investing heavily in building their own pipeline of talent through collaborations with local middle schools, high schools, community colleges and universities.
Semiconductor manufacturer GlobalFoundries, for example, has partnerships with the Georgia Institute of Technology and Purdue University to collaborate on semiconductor research and education.
But GlobalFoundries CEO Tom Caulfield said there’s more work to be done.
“I think the industry will come under a lot of pressure. And therefore, we will too, as we try to double the amount of [manufacturing] capacity in the U.S. over the next decade,” he said. More

Viasat reportedly quarterly results on Wednesday, with the company continuing to investigate its recent satellite malfunction and exploring options to supplement the service it expected to add.
“We are currently working closely with our antenna supplier to assess the status of the antenna,” Viasat said.
Viasat brought in $780 million of revenue during the fiscal year 2024 first quarter, a 36% increase compared to the period a year prior, and reported a net loss of $77 million, up from a net loss of $21.6 million a year ago.

Viasat offices are shown at the company’s headquarters in Carlsbad, California, March 9, 2022.
Mike Blake | Reuters

Viasat reported a jump in quarterly revenue Wednesday, as the company continues to investigate its recent satellite malfunction and explores options to make up for some of the service it expected to add this year.
The company, which reported fiscal 2024 first-quarter results, wrote in a letter to shareholders that the problem with the ViaSat-3 Americas communications satellite disclosed last month “creates unanticipated challenges that we are already addressing.”

“We are currently working closely with our antenna supplier to assess the status of the antenna,” Viasat Chairman and CEO Mark Dankberg and President K. Guru Gowrappan wrote in the letter.
Dankberg added on the company’s earnings call that Viasat expects to give an update on “corrective actions” for the the satellite at the end of its second quarter. Viasat has approximately $420 million in insurance on the malfunctioning satellite, “which is nearly half of the net book value” of ViaSat-3 Americas, putting its value at about $750 million.
Viasat stock rose about 3% in after-hours trading from its close at $28.20 a share.

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Viasat brought in $780 million in revenue during the quarter, a 36% increase compared to the same period last year.
It reported a net loss of $77 million for the quarter, wider than a net loss of $21.6 million a year ago. It cited higher interest expenses, as well as costs related to its acquisition of Inmarsat. As of the end of quarter, Viasat had $5.5 billion in net debt, with about $2 billion in cash and equivalents.

Viasat said it is investigating the root cause of the ViaSat-3 Americas problem to determine how to avoid the issue on its upcoming ViaSat-3 EMEA (Europe, the Middle East, and Africa) satellite. Beyond a problematic reflector, which appears to have been made by Northrop Grumman, Viasat said the Americas satellite’s other systems “are performing as expected, or better.”
The company said it expects “to gain additional bandwidth from the existing in-orbit fleet” through improvements to its ground network. After its acquisition of Inmarsat, Viasat has 22 satellites in space.
“We believe these augmentations will allow us to provide the high-quality experience our mobility customers have come to expect and allow us to support our near- and intermediate-term growth objectives,” Viasat said.
While broadband service to U.S. residential customers makes up about 13% of Viasat’s current revenue, the company expects “that percentage will decline” after the satellite malfunction. Part of Viasat’s mitigation strategy is to “assure service” to high demand and key customers, as growth in VIasat’s fixed broadband business is expected to be delayed.
Despite the issues, Viasat forecast that revenue will grow further in fiscal year 2025. More

Subscriber losses continued over the last three months, with the company reporting 146.1 million Disney+ subscribers during the most recent quarter, a 7.4% decline.
Disney recorded $2.65 billion in one-time charges and impairments, dragging the company to a rare quarterly net loss.
One bright spot for the company was its parks, experiences and products division, which saw a 13% increase in revenue to $8.3 billion during the quarter.

Members of the Writers Guild of America and the Screen Actors Guild walk the picket line outside of Disney Studios in Burbank, California, on July 18, 2023. 
Robyn Beck | AFP | Getty Images

Disney posted mixed results for its fiscal third quarter despite ongoing streaming woes and massive restructuring costs resulting from pulling content from its platforms.
Subscriber losses continued over the last three months, with the company reporting 146.1 million Disney+ subscribers during the most recent quarter, a 7.4% decline from the previous quarter and a larger loss than Wall Street expected.

The majority of subscriber losses came from Disney+ Hotstar, where the company saw a 24% drop in users after it lost out on the rights to Indian Premier League cricket matches.
Facing dwindling users and falling revenue in its media and entertainment distribution segment, Disney announced Wednesday it would raise the price on its ad-free streaming tier in October and that it would crack down on password sharing, as streaming rival Netflix did earlier this year.
Shares of Disney gained 4% in extended trading Wednesday after news of the streaming updates.
“Moving forward, I believe three businesses will drive the greatest growth and value creation over the next five years,” CEO Bob Iger said on the company’s earnings call. “They are our film studios, our parks business and streaming, all of which are inextricably linked to our brands and franchises.”
Here are the key numbers from Disney’s report:

EPS: $1.03 per share, adjusted, vs. 95 cents per share expected, according to a Refinitiv consensus survey
Revenue: $22.33 billion vs. $22.5 billion expected, according to Refinitiv
Disney+ total subscriptions: 146.1 million vs. 151.1 million expected, according to StreetAccount

Disney recorded $2.65 billion in one-time charges and impairments, dragging the company to a rare quarterly net loss. The majority of those charges were what Disney called “content impairments” related to pulling content off its streaming platforms and ending third-party licensing agreements.
Disney swung to a net loss of $460 million, or 25 cents per share, for the quarter ended July 1 from a net income of $1.41 billion, or 77 cents per share, during the year-ago period. Excluding those impairments, the company earned an adjusted $1.03 per share.
Revenue increased 4% to $22.33 billion, just short of Wall Street estimates of $22.5 billion.

Segments and studios

One bright spot for the company was its parks, experiences and products division, which saw a 13% increase in revenue to $8.3 billion during the quarter. Disney saw strength at its international parks, while domestic parks, particularly Walt Disney World in Florida, saw a slowdown in attendance and hotel room purchases.
Similar slowdowns were seen by Comcast’s Universal theme parks in Florida.
The rest of Disney’s business has been in relative flux in recent months since Iger returned as CEO.
Linear advertising and television subscriptions are down, its movie studio has been hit or miss at the box office and Hollywood’s actors and writers are on strike.
Iger said Wednesday the company would be looking to improve the quality of its studio films as well as reduce the number of released titles and the cost per title.
His comments come as Disney has struggled to gain traction with audiences at the global box office in recent months. While “Avatar: The Way of Water” and “Guardians of the Galaxy: Vol. 3” have generated more than $3 billion globally, other films have not performed as expected.
Pixar’s “Elemental,” which cost around $200 million to make, not including marketing costs, stalled at the box office, generating $423 million globally. Similarly, “Indiana Jones and the Dial of Destiny” cost around $300 million to produce, not including marketing costs, and has tallied just $369 million worldwide.
“The performance of some of our recent films has definitely been disappointing, and we don’t take that lightly,” Iger said on the call. “As you’d expect we’re focused on improving the quality of the films we’ve got coming up. It’s something I’m working closely with the studio on.”
Meanwhile, Iger has hinted that Disney’s TV networks, excluding ESPN — which has been searching for strategic partners and on Tuesday announced a sportsbook partnership with Penn Entertainment — “may not be core” to the business anymore.
Separately, Iger is looking to take full control of Hulu, which Disney shares ownership of with Comcast. Buying out the remaining one-third stake is expected to cost at least $9 billion before negotiations.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
This is breaking news. Please check back for updates.
Correction: Disney recorded $2.65 billion in one-time charges and impairments for its fiscal third quarter. A previous version misstated the figure. The company said it would increase the price of its ad-free streaming tier in October. A previous version misstated the timeline. More

Disney said Wednesday it is actively exploring methods to stop account sharing on its streaming services.
The company expects to share more details at the end of this year and begin rolling out tactics in 2024.
Disney follows Netflix, which has been rolling out a new account sharing policy in recent months.

The Disney+ website on a laptop computer in the Brooklyn borough of New York, US, on Monday, July 18, 2022.
Gabby Jones | Bloomberg | Getty Images

Disney is joining the streaming fight against password sharing.
CEO Bob Iger said on Wednesday’s earnings call that the company is exploring account sharing for streaming and will provide additional details on its policy to curb it later this year.

“We already have the technical capability to monitor much of this,” Iger said Wednesday. “I’m not going to give a specific number, except to say that it is significant.”
The company will roll out tactics to mitigate password sharing in 2024. While Iger said Disney should see some effects from the rollout in 2024, the initiatives to prevent password sharing won’t be completed next year.
The move comes as Disney and its peers have looked for ways to make streaming profitable — methods that have included cutting content spending, introducing cheaper, ad-supported options and preventing account sharing. Disney follows the lead of Netflix, which began rolling out a new account sharing policy earlier this year.
Iger said Wednesday the strategy is a “real priority” for the company.
Disney has three streaming services under its umbrella: the flagship Disney+, Hulu and ESPN+. The three services are also available in a bundle for a cheaper price. The company has previously said it would soon be offering a “one app experience” in the U.S. that incorporates Hulu content into Disney+, although standalone options will still remain.

Streamers have also used price increases to grow revenue.
On Wednesday, Disney said it would raise prices on almost all of its streaming services. Ad-free Disney+ will cost $13.99 a month, a 27% bump. The price of Hulu without ads is increasing to $17.99 a month, a 20% hike. The ad-supported options of Hulu and Disney+ will see prices stay the same.
Iger has said the company views advertising as a key way to reach profitability.
As the company eliminates password sharing, it does not know how the action will affect subscriber growth, Iger said.
“Obviously, we believe there will be some, but we’re not speculating,” he said, adding the change will be an opportunity to grow the business.
Netflix has been a pioneer among streaming services in cracking down on password sharing. It was one of the initiatives Netflix discussed after it began to see subscriber growth stagnate in 2022 and looked for methods to boost revenue. Netflix, like Disney+, added a cheaper, ad-supported tier.
In July, Netflix reported that it added 5.9 million customers during the second quarter as its password sharing crackdown began to take hold in the U.S.
Netflix had previously said that more than 100 million households, or about 43% of its global user base, shared accounts. The company said that affected its ability to invest in new content.
Netflix started to roll out account sharing initiatives internationally first. It notified its U.S. customers in May that they would have to stop sharing accounts.
Netflix subscribers sharing accounts they were given a few options. Members could either transfer a profile of someone outside of their household so the person could begin a new membership and pay on their own. Or, the main account holder could pay an extra fee of $7.99 a month per person outside of their household using their account.
It’s unclear what methods Disney will use to reduce account sharing. More