Business

Check out the companies making headlines before the bell:
Catalent (CTLT) – The drug delivery and manufacturing technology company beat bottom line estimates for its latest quarter. However, its revenue was short of Wall Street forecasts, as was its full-year revenue outlook. Its stock slid 5.7% in the premarket.

Pinduoduo (PDD) – The China-based e-commerce company’s stock rallied 13.6% in the premarket following better-than-expected quarterly results. The company said its performance was boosted by a recovery in consumer sentiment.
Netflix (NFLX) – Netflix is mulling a $7 to $9 monthly price for its soon-to-debut ad-supported service, according to a Bloomberg report. That compares with the $15.49 price for the company’s most popular current ad-free plan. Netflix fell 1.3% in premarket trading.
Walmart (WMT) – Walmart is offering to buy the 47% of South African retailer Massmart that it doesn’t already own for $377.6 million. That values Massmart at 53% above Friday’s close.
Moderna (MRNA) – Swiss officials gave their approval to the latest version of Moderna’s Covid-19 vaccine, which contains both the original vaccine compound and one that targets the omicron variant.
Etsy (ETSY) – Etsy will require U.S. sellers using the online platform to either self-verify their bank accounts or provide fintech platform Plaid with their user name and password for those accounts. Reuters reports the move is causing pushback from sellers, some of whom are considering leaving Etsy. Etsy fell 1.1% in premarket action.

Dell Technologies (DELL) – The computer products and services company has ceased all operations in Russia after suspending sales in Russia and Ukraine in February. Dell lost 1% in premarket trading.
Dow Inc. (DOW) – The chemical maker’s stock fell 2.8% in the premarket after KeyBanc downgraded it to “underweight” from “sector weight.” KeyBanc said it expects Dow’s margins and earnings this quarter to approach trough or recession levels.

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Fatigue, brain fog, heart palpitations and breathing difficulties. 
Those are just some of the common symptoms of “long Covid” that can affect people in the long term after recovery from infection, according to the Centers for Disease Control. 

However, according to Dr. Greg Vanichkachorn, director of the Mayo Clinic’s Covid Activity Rehabilitation Program, symptoms are only “half of the picture.” 
“The other half is how those symptoms affect a person’s ability to live their lives. Unfortunately, the symptoms of long-haul COVID can be quite limiting.”

He added that over a third of Mayo Clinic’s patients with long Covid report having troubles with some of the most basic activities of life, such as getting dressed, showering, and eating.
“It’s just a bad movie that we still don’t have the ending for,” said Dr. Joan Salge Blake, Boston University’s clinical professor of nutrition. 

Heart disease, certain cancers … you can fight all of those diseases with a knife and a fork. That is empowering because you have control of what’s on your plate and what you eat.

Dr. Joan Salge Blake
Clinical professor, Boston University

Long Covid is essentially post-infection conditions that could linger for weeks, months or years — long after a person tests negative for Covid-19. It can also be referred to as post-Covid conditions or chronic Covid.

Experts who spoke to CNBC Make It said there’s still a lot to learn about long Covid, but nutrition plays a vital role in feeling better. 
“Heart disease, certain cancers, stroke and type two diabetes … you can fight all of those diseases with a knife and a fork,” said Blake. 
“That is empowering because you have control of what’s on your plate and what you eat.”
CNBC Make It finds out what you should and shouldn’t eat if you think you have long Covid.  

1. Mediterranean diet 

Vanichkachorn and Blake both emphasized the importance of a balanced diet, which they say will be beneficial for general health — specifically, a Mediterranean diet, which is rich in vegetables, fruits, olive oil, nuts and whole grains.
Fruits and vegetables, in particular, are “powerhouses” when it comes to essential vitamins and minerals, said Blake.
However, that doesn’t mean forgoing meat or protein, Vanichkachorn said, adding that fish and chicken are good options. 

A Mediterranean diet is rich in vegetables, fruits, olive oil, nuts and whole grains.
Cristina Pedrazzini/science Photo Library | Science Photo Library | Getty Images

Blake added, “Poor protein [intake] can contribute to fatigue, and that’s the one thing you don’t want because Covid is going to give you fatigue … it sure isn’t going to help if you don’t have enough protein in your diet.” 
Fatty fish, like tuna and salmon, is a good source of omega-3 acids, which can improve cardiovascular health.
But ultimately, the focus should be building a well-rounded “super diet,” instead of focusing on “superfoods,” Blake said. Superfoods are those rich in antioxidants, fiber and fatty acids, which are beneficial for health.
“It’s a super diet that will help you fight chronic diseases. When all the vitamins and minerals are working together, that is going to be your best defense.” 

2. Beware of vitamin deficiencies  

Research hasn’t confirmed if specific vitamins are helpful in fighting long Covid, but it is nevertheless important to treat vitamin deficiencies, said Vanichkachorn.
“For example, a deficiency of vitamin B12 can lead to symptoms such as fatigue, shortness of breath, and difficulty thinking,” he said. 
Minerals like iron are important too. A recent study indicated that patients with long Covid may have trouble with how their bodies use and store iron.

Ekaterina Goncharova | Moment | Getty Images

“Iron deficiency can cause many symptoms, including anemia and fatigue. Deficiency can occur from many reasons, such as poor intake, but can also be associated with chronic diseases,” said Vanichkachorn. 
However, he cautioned against using vitamin or mineral supplements without first seeking medical advice.
“If you are worried about vitamin or mineral deficiencies, the first step is to speak to your medical provider,” he said.  

3. Stay hydrated 

Vanichkachorn stressed that all patients with long haul Covid should stay hydrated. 
“When individuals have acute Covid, they are often resting and sleeping for prolonged periods of time. With this, their nutrition gets thrown off, particularly hydration,” he added. 
“Unchecked, dehydration can make anyone feel miserable, not just patients who are experiencing long-haul COVID.” 

If plain water is too boring, you can also add a piece of fruit such as lemon or lime to help with the taste.

Dr. Greg Vanichkachorn
Director, Mayo Clinic’s Covid Activity Rehabilitation Program

Acknowledging that patients often need reminders to stay hydrated, Vanichkachorn encouraged those with long Covid to carry a bottle with them.
He added, “If plain water is too boring, you can also add a piece of fruit such as lemon or lime to help with the taste. These simple changes can make staying hydrated so much easier.” 

4. What to stay away from 

Because acute Covid can cause “very significant inflammation” in the body, said Vanichkachorn, it’ll be good to stay away from anything that will worsen it. 
“We have seen some markers of inflammation … be elevated in this patient population [suffering from long Covid]. The inflammation likely is secondary to immune system abnormalities, perhaps even autoimmune type probabilities,” he added.

Acute Covid can cause significant inflammation in the body and it’ll be a good idea to stay away from sugary drinks and dessert, said Vanichkachorn.
Elizabeth Perez Holowaty | Moment | Getty Images More

To learn more about the CNBC CFO Council, visit cnbccouncils.com/cfo-council/

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When Amazon announced plants to acquire One Medical earlier in the summer, it seemed likely that something had to give: either the One Medical brand or Amazon Care.
Amazon decided to shut down what had been a high-profile health startup inside its own operations, whereas its retail drug acquisition PillPack was folded into Amazon Pharmacy.
One Medical was the better, more advanced primary care business, and with reports of Amazon now bidding on Signify Health, the internet retail giant seems to be more in a buy than build mood in health care.

In this photo illustration, the Amazon Basic Care logo is displayed on a smartphone with an Amazon logo in the background.
Thiago Prudêncio | SOPA Images | Lightrocket | Getty Images

Chalk up another failure in health care for Amazon, one of the ultimate market disruptors.
First, its much-hyped effort with JPMorgan and Berkshire Hathaway to reform health care, Haven, ended its short life.

Now, Amazon Care, its effort to tackle telemedicine and primary care for the employer market on a national basis – which Amazon itself trumpeted as gaining more and more clients – is being shut down.Is that all the proof we needed of what many people have said over the years: health care is just harder to disrupt than most industries?

Maybe not, though maybe it is a signal of a change in the approach to how Amazon will attempt to gobble up more health industry market share. The shutdown of Amazon Care may come back to a simple choice that companies, especially those with a lot of cash, have to make when it comes to breaking into new markets: build or buy?
For some health-care industry watchers, it’s no surprise that Amazon Care is going away as a stand-alone entity. When Amazon made the decision in July to acquire primary care company One Medical, which does what Amazon Care was hoping to ultimately do on a national basis, it was the writing on the wall that something was going to change. And for a cash-rich company looking for opportunities to buy into a stock market that had pushed down the value of recently public health companies – One Medical had traded as high as $58 in 2021 and Amazon announced plans to buy it for $18 a share – Amazon may have been more opportunistic than anything else in plotting the next stage of its future in health.
Buying into a market where it wants more share and where it requires a physical presence isn’t new to Amazon, nor is being opportunistic in the timing. As Amazon’s acquisition of Whole Foods reaches the five-year mark, it’s worth remembering that Amazon’s shares went up in value as much on the day it announced the acquisition of Whole Foods as the purchase price for the then-troubled high-end grocer.
“It’s not surprising they’re shutting it down,” said Sari Kaganoff, general manager of consulting at Rock Health, which invests as a VC in health start-ups and has a health advisory and research arm. “Their vision always was to have a primary care integrated solution and now it will have a better solution than what they could build,” Kaganoff said.

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It was a little surprising, maybe, that Amazon announced the shutdown before the One Medical deal even closed, but One Medical has many more markets, many more offices and many more companies that are clients than Amazon ever did (it had to boast about signing up Whole Foods, which it owns, as a client for Amazon Care). Maybe also surprising: it didn’t wait to rebrand One Medical as part of Amazon Care. PillPack, its acquisition in the pharmacy space, still has a brand but is now folded within Amazon Pharmacy.
By Amazon’s own account, Amazon Care was a failure, at least in the terms conveyed in the internal memo provided to the press about the shuttering. There’s no doubt it struggled with the problem of building up an in-person care component nationwide, staffing up in a sector where it has limited history, and getting corporate customers to sign on. While telemedicine is a nice have, it’s not a full health-care solution, and Amazon would have had to ramp up investment considerably to build a true national hybrid health-care practice with sites and physicians and clinics.
In the end, let’s say Amazon Care was a test run for a business, and once Amazon learned enough to know what it wanted in the long-term, it bought the better company at a time when its value was depressed.
“I don’t think they failed, because One Medical is great,” Kaganoff said.
Amazon learned a lesson that has influenced the fortunes of many health disruptors in recent years: it’s hard to make a stand-alone startup work in the sector — even if you’re one of the richest companies in the world — consolidation is increasingly the way to go.
“Amazon Care was no different than any other stand-alone health startup in terms of needing to be consolidated,” Kaganoff said. “They played around with it a bit,” she added, enough to know their ambitions remain validated on the market, but just not the way there.
“One of the ways we’ve worked towards this vision for the past several years has been with our urgent and primary care service offering, Amazon Care. During that time, we’ve gathered and listened to extensive feedback from our enterprise customers and their employees, and evolved the service to continuously improve the experience for customers. However, despite these efforts, we’ve determined that Amazon Care isn’t the right long-term solution for our enterprise customers,” the internal memo said.
While Amazon’s health-care efforts in recent years have been associated with direct battles to unseat recent health disruptors (e.g., Amazon Care vs. Teladoc), Wall Street analysts have said the market should worry more about Amazon making a string of acquisitions that speak to broader aims.
That’s what seems to be happening.
Amazon isn’t done yet pushing its cash around in buying more in health-care, with recent headlines reporting it is among bidders for Signify Health, which has an overlap with the Iora Health business of One Medical, focused on a more complicated, Medicare-centric market than standard national care practices. 

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It’s clear Amazon still plans to be a formidable player in the health-care space. It can leverage its ability to personalize its offerings, connect to its pharmacy, and ultimately pose a threat to many other retail giants aiming to upend healthcare. Walmart acquired telehealth company MeMD in 2021; CVS, which already offers telemedicine through a deal with American Well, is another rumored bidder for Signify; and Walgreens has VillageMD and is opening up hundreds of offices in markets around the country.
That retail disruption is only going to grow, for a bottom-line reason. When you look at the share of wallet, from consumers to employers, the health-care market is a big part of spending. Amazon is already in almost every chunk of the wallet, maybe not banking (though it does have credit cards).
What’s the biggest chunk of the market they are not in?
“It’s healthcare, and they already have so many things consumer-health oriented, it just makes sense to go big in health care,” Kaganoff said.
When Haven — which disbanded after three years — debuted to much fanfare, people thought the combined might of Berkshire Hathaway, JPMorgan and Amazon could result in a significant driving down of costs throughout the health-care system that Warren Buffett has called a tapeworm on the national economy.
And that’s still part of the story. Anything Amazon does is partially about driving down cost and driving up efficiency. “Better care at a lower cost,” is what Cano Health CEO Marlow Hernandez told CNBC last week is the paradigm shift for all players in the space.
Amazon’s consumer internet business may be the ultimate in transactional disruptors, but the transactional system of health care is under threat and people don’t want to treat it like just another form of retail. “What patients have been demanding is that integrated platform where they can build relationships and no longer be a number,” Hernandez said.
That’s referred to as value-based care — and maybe it is a sign of just how messed up the U.S. health-care system is that “value” for patient is a novel idea — and it is leading to a lot of consolidation. Hernandez projects the primary care market will grow from $1.8 trillion to $3.7 trillion by 2030.
And that speaks to the underlying aim for any big company like Amazon and its rivals.
“I think it’s just market share,” Kaganoff said.
The end of Amazon Care did seem abrupt. But as Amazon moves from primary care, into more complicated care, and potentially even chronic care – and combines pharmacy and over-the-counter medication with all its offerings – everyone from private health start-ups to Teladoc to retail competitors and health-care incumbents should continue to worry. Amazon Care’s failure may have come at a cost and may have come as a surprise, even to some within Amazon, but what the company ultimately is buying and building off may still make it the stronger disruptor. More

Established automakers and startups alike are rolling out new electric vehicles in an effort to meet growing demand.
Rising costs and new federal regulations are adding new pressures to what was already an expensive process.
CNBC runs through where some of the most prominent American EV startups of the last few years stand when it comes to cash on hand.

Production of electric Rivian R1T pickup trucks on April 11, 2022 at the company’s plant in Normal, Ill.
Michael Wayland / CNBC

In the transition from gas-powered vehicles to electric, the fuel every automaker is after these days is cold hard cash.
Established automakers and startups alike are rolling out new battery-powered models in an effort to meet growing demand. Ramping up production of a new model was already a fraught and expensive process, but rising material costs and tricky regulations for federal incentives are squeezing coffers even further.

Prices of the raw materials used in many electric-vehicle batteries — lithium, nickel and cobalt — have soared over the last two years as demand has skyrocketed, and it may be several years before miners are able to meaningfully increase supply.
Complicating the situation further, new U.S. rules governing EV buyer incentives will require automakers to source more of those materials in North America over time if they want their vehicles to qualify.
The result: new cost pressures for what was already an expensive process.
Automakers routinely spend hundreds of millions of dollars designing and installing tooling to build new high-volume vehicles — before a single new car is shipped. Nearly all global automakers now maintain hefty cash reserves of $20 billion or more. Those reserves exist to ensure that the companies can continue work on their next new models if and when a recession (or a pandemic) takes a bite out of their sales and profits for a few quarters.
All that money and time can be a risky bet: If the new model doesn’t resonate with customers, or if manufacturing problems delay its introduction or compromise quality, the automaker might not make enough to cover what it spent.

For newer automakers, the financial risks to designing a new electric vehicle can be existential.
Take Tesla. When the automaker began preparations to launch its Model 3, CEO Elon Musk and his team planned a highly automated production line for the Model 3, with robots and specialized machines that reportedly cost well over a billion dollars. But some of that automation didn’t work as expected, and Tesla moved some final-assembly tasks to a tent outside its factory.
Tesla learned a lot of expensive lessons in the process. Musk said later called the experience of launching the Model 3 “production hell” and said it nearly brought Tesla to the brink of bankruptcy.
As newer EV startups ramp up production, more investors are learning that taking a car from design to production is capital-intensive. And in the current environment, where deflated stock prices and rising interest rates have made it harder to raise money than it was just a year or two ago, EV startups’ cash balances are getting close attention from Wall Street.
Here’s where some of the most prominent American EV startups of the last few years stand when it comes to cash on hand:

Rivian

Production of electric Rivian R1T pickup trucks on April 11, 2022 at the company’s plant in Normal, Ill.
Michael Wayland / CNBC

Rivian is by far the best-positioned of the new EV startups, with over $15 billion on hand as of the end of June. That should be enough to fund the company’s operations and expansion through the planned launch of its smaller “R2” vehicle platform in 2025, CFO Claire McDonough said during the company’s earnings call on Aug. 11.
Rivian has struggled to ramp up production of its R1-series pickup and SUV amid supply chain snags and early manufacturing challenges. The company burned about $1.5 billion in the second quarter, but it also said it plans to reduce its near-term capital expenditures to about $2 billion this year from $2.5 billion in its earlier plan to ensure it can meet its longer-term goals.
At least one analyst thinks Rivian will need to raise cash well before 2025: In a note following Rivian’s earnings report, Morgan Stanley analyst Adam Jonas said that his bank’s model assumes Rivian will raise $3 billion via a secondary stock offering before the end of next year and another $3 billion via additional raises in 2024 and 2025.
Jonas currently has an “overweight” rating on Rivian’s stock, with a $60 price target. Rivian ended trading Friday at roughly $32 per share.

Lucid

People test drive Dream Edition P and Dream Edition R electric vehicles at the Lucid Motors plant in Casa Grande, Arizona, September 28, 2021.
Caitlin O’Hara | Reuters

Luxury EV maker Lucid Group doesn’t have quite as much cash in reserve as Rivian, but it’s not badly positioned. It ended the second quarter with $4.6 billion in cash, down from $5.4 billion at the end of March. That’s enough to last “well into 2023,” CFO Sherry House said earlier this month.
Like Rivian, Lucid has struggled to ramp up production since launching its Air luxury sedan last fall. It’s planning big capital expenditures to expand its Arizona factory and build a second plant in Saudi Arabia. But unlike Rivian, Lucid has a deep-pocketed patron — Saudi Arabia’s public wealth fund, which owns about 61% of the California-based EV maker and would almost certainly step in to help if the company runs short of cash.
For the most part, Wall Street analysts were unconcerned about Lucid’s second-quarter cash burn. Bank of America’s John Murphy wrote that Lucid still has “runway into 2023, especially considering the company’s recently secured revolver [$1 billion credit line] and incremental funding from various entities in Saudi Arabia earlier this year.”
Murphy has a “buy” rating on Lucid’s stock and a price target of $30. He’s compared the startup’s potential future profitability to that of luxury sports-car maker Ferrari. Lucid currently trades for about $16 per share.

Fisker

People gather and take pictures after the Fisker Ocean all-electric SUV was revealed at Manhattan Beach Pier on November 16, 2021 in Manhattan Beach, California.
Mario Tama | Getty Images

Unlike Rivian and Lucid, Fisker isn’t planning to build its own factory to construct its electric vehicles. Instead, the company founded by former Aston Martin designer Henrik Fisker will use contract manufacturers — global auto-industry supplier Magna International and Taiwan’s Foxconn — to build its cars.
That represents something of a cash tradeoff: Fisker won’t have to spend nearly as much money up front to get its upcoming Ocean SUV into production, but it will almost certainly give up some profit to pay the manufacturers later on. 
Production of the Ocean is scheduled to begin in November at an Austrian factory owned by Magna. Fisker will have considerable expenses in the interim — money for prototypes and final engineering, as well as payments to Magna — but with $852 million on hand at the end of June, it should have no trouble covering those costs.
RBC analyst Joseph Spak said following Fisker’s second-quarter report that the company will likely need more cash, despite its contract-manufacturing model — what he estimated to be about $1.25 billion over “the coming years.”
Spak has an “outperform” rating on Fisker’s stock and a price target of $13. The stock closed Friday at $9 per share.

Nikola

Nikola Motor Company
Source: Nikola Motor Company

Nikola was one of the first EV makers to go public via a merger with a special-purpose acquisition company, or SPAC. The company has begun shipping its battery-electric Tre semitruck in small numbers, and plans to ramp up production and add a long-range hydrogen fuel-cell version of the Tre in 2023.
But as of right now, it probably doesn’t have the cash to get there. The company has had a tougher time raising funds, following allegations from a short-seller, a stock price plunge and the ouster of its outspoken founder Trevor Milton, who is now facing federal fraud charges for statements made to investors.
Nikola had $529 million on hand as of the end of June, plus another $312 million available via an equity line from Tumim Stone Capital. That’s enough, CFO Kim Brady said during Nikola’s second-quarter earnings call, to fund operations for another 12 months — but more money will be needed before long.
“Given our target of keeping 12 months of liquidity on hand at the end of each quarter, we will continue to seek the right opportunities to replenish our liquidity on an ongoing basis while trying to minimize dilution to our shareholders,” Brady said. “We are carefully considering how we can potentially spend less without compromising our critical programs and reduce cash requirements for 2023.”
Deutsche Bank analyst Emmanuel Rosner estimates Nikola will need to raise between $550 million and $650 million before the end of the year, and more later on. He has a “hold” rating on Nikola with a price target of $8. The stock trades for $6 as of Friday’s close.

Lordstown

Lordstown Motors gave rides in prototypes of its upcoming electric Endurance pickup truck on June 21, 2021 as part of its “Lordstown Week” event.
Michael Wayland / CNBC

Lordstown Motors is in perhaps the most precarious position of the lot, with just $236 million on hand as of the end of June.
Like Nikola, Lordstown saw its stock price collapse after its founder was forced out following a short-seller’s allegations of fraud. The company shifted away from a factory model to a contract-manufacturing arrangement like Fisker’s, and it completed a deal in May to sell its Ohio factory, a former General Motors plant, to Foxconn for a total of about $258 million.
Foxconn plans to use the factory to manufacture EVs for other companies, including Lordstown’s Endurance pickup and an upcoming small Fisker EV called the Pear.
Despite the considerable challenges ahead for Lordstown, Deutsche Bank’s Rosner still has a “hold” rating on the stock. But he’s not sanguine. He thinks the company will need to raise $50 million to $75 million to fund operations through the end of this year, despite its decision to limit the first production batch of the Endurance to just 500 units.
“More importantly, to complete the production of this first batch, management will have to raise more substantial capital in 2023,” Rosner wrote after Lordstown’s second-quarter earnings report. And given the company’s difficulties to date, that won’t be easy.
“Lordstown would have to demonstrate considerable traction and positive reception for the Endurance with its initial customers in order to raise capital,” he wrote.
Rosner rates Lordstown’s stock a “hold” with a price target of $2. The stock closed Friday at $2.06.

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Recent inflation data shows that rental prices across the U.S. are finally easing, but on Main Street it’s a different story, with small business owners increasingly unable to make full rent payments, according to a survey from Alignable.
Small businesses are caught in an inflation compounding effect, with prices for inputs, labor, transportation and energy all cutting into margins, while rent prices soared too, and now landlords are pressing the most since Covid began for full payments as the economy cools and sales slow.
There are options, from negotiating with landlords who don’t want empty storefronts, to business-to-business (B2B) owners making the decision to go fully remote.

Brian Snyder | Reuters

The Federal Reserve chair Jerome Powell said on Friday there will be “pain” to come in the economy as a result of the central bank’s battle with inflation, and right now, small businesses are experiencing that pain on both sides of the fight.
Inflation has been the No. 1 concern of small businesses for some time, as high prices in raw materials, labor, energy and transportation cut into margins. Higher rents, and landlords feeling more aggressive the farther away the nation moves from the peak of Covid, have compounded the hit from inflation being felt on Main Street. While there are some signs of inflation easing across the economy, that’s because the Fed is intentionally cooling demand, and that has small business owners anticipating a sales decline.

What does it all add up to? According to a new national survey of small business owners by Alignable, a big jump in August in the percentage of small business owner who couldn’t pay full rent in August.
Nationally, apartment rental prices, which have soared, are among the inflation indicators that may have recently peaked. But the Alignable data shows that the rent inflation crisis for small businesses is actually getting worse. Forty percent of small business said they could not pay their rent in full this month, up 6% month over month and setting a record for 2022.
“I’ve been following this closely every month since March 2020, and I was shocked,” said Chuck Casto, head of research and communications for Alignable.
The percentage of small business owners unable to make rent hasn’t been this high since March 2021. “This is a number we would have expected right in the middle of the pandemic, when a third of places were shut down, everyone was wearing masks or not going out to restaurants,” Casto said.
Alignable’s poll was conducted from August 13-August 22 among 7,331 randomly selected small business owners. 

Arrows pointing outwards

The small business rent crisis could make the holiday quarter of the year, always the most important for consumer-facing Main Street entrepreneurs, a critical one for survival.

It is not new that inflation has become a much bigger concern than Covid on Main Street, but until it eases “and eases significantly,” Casto said, all the small business costs are adding up to another existential crisis for Main Street, highlighted by the concerns over rent.
Forty-five percent of small business owners surveyed by Alignable say they’re paying at least 50% more in rent than they did prior to Covid. Twenty-four percent say their landlords have doubled rent; 12% say they are now paying three times more.

Back to peak Covid concerns about business survival

The Alignable data also shows that many small business are still struggling to get back to pre-Covid revenue levels, just as the Fed is taking steps that are slowing overall demand. Casto said Alignable would hope that the numbers would be trending down among small business owners who say they have not returned to pre-Covid sales marks, but that’s not happening now. Last December, amid the critical holiday season for many small businesses, 43% said they were “fully back,” according to Alignable. “It’s 23% now,” Casto said, “and has just been slipping. … even people who thought they were out of the woods in December or January, all of a sudden they’re not.”
That’s the worst this indicator has been in over a year, according to Alignable.
The Alignable data matches the recent CNBC|SurveyMonkey Small Business Survey in mood, which showed small business confidence hitting an all-time low. And Casto says the rent data is critical because it is a tell about the full picture of what is going on with the finances of small businesses.
Alignable asks small businesses if inflationary pressures including increased rent could jeopardize their ability to stay open over the next six months, and while that data point has not changed considerably in August, it remains uncomfortably high, at roughly 47%-48%. Of that, 20% are “highly concerned.”
As recently as the spring, that figure was as low as 28%.
Casto said that’s the key figure he will be watching in the months ahead alongside the data on ability to pay rent.
“Many of them still haven’t bounced back from Covid, and then you have inflation on top of it, and then, whether you consider this a recession or not, we have an economic slowing and consumer spending down,” he said.
The CNBC small business survey found that expectations of lower sales were the biggest contributor to the quarterly decline in confidence, and many small business owners believe the recession has already begun.
“We’re definitely seeing things recede in terms of activity and customer counts in stores,” Casto said. The inability to get back to pre-Covid sales in terms of monthly revenue generated doesn’t even take into account the extra expenses that inflation has created and a slowing economy. “It’s a combination of everything … everything builds on itself,” he added.

Real estate options to consider

It’s not all bad news on Main Street. By some recent measures, many small businesses in the service sector, in particular, are doing better and benefitting from the shift in consumer behavior from goods to services purchases. That’s what Intuit data shows, and small business is its biggest lines of business. But the Alignable data on rent shows that the impact of inflation remains broad across sectors of the small business economy, even as some sectors are getting hitter harder and faster than others. In real estate, 40% of small businesses said they couldn’t make rent in August, up from 18% last December.
“Lots of storefronts, even in fancy towns, are no longer there,” Casto said. “We’re not quite to ghost town level, but we’re worried. … We’re at another level of ‘paying rent or not paying rent’. … It’s a much bigger issue.”
There are options for small businesses that are facing a rent crisis. One is negotiating with landlords, though that is getting tougher to do the farther away we move from peak Covid.
“Landlords feel like they let it slide for a year and a half and did everything they could, but now, two years in the hole, need to start asking for money,” Casto said. “Because they could lose their buildings, they are paying mortgages.”
Comments Alignable is receiving from small business owners it surveyed show that more are afraid to ask landlords at this point for even more rent relief, and landlord patience after the past two years is running thin. But the survey also indicates that many landlords still prefer to have a tenant making a good faith effort to pay rent, and catch up on any past due rent, than face an empty storefront during the economic slowing.
“Sometimes these landlords are happy to have the place filled even if it is just getting a portion of the rent, it’s better than not getting any of it,” Casto said.
For business to business owners, he recommends at least considering the ability to go fully remote, and take that overhead from real estate and apply it to other areas of the business. This is a move that Alignable says more B2B owners are making, according to the comments it receives in with the survey data.
The situation makes the fourth quarter, always the most critical for B2C small businesses, and for whom rent is now the No. 1 or No. 2 issue, even more important this year. Small businesses always count on holiday sales to be the biggest sales period of the year, and that’s no different this year, but it’s jut escalated to make-or-break for many businesses.
As the Fed seeks a “soft landing” for an economy it says has not entered a recession, there is the chance that if inflation’s trajectory continues lower, that will mean lower costs across the board for small businesses, and a potential equilibrium point for Main Street could be reached between a smaller hit on margins and the lower sales that will come with a weaker economy. Small businesses have been adjusting for these past few years, pivoting during the pandemic, taking on side gigs to make their financials work (sometimes more than one), and in some cases, retiring earlier than expected (those numbers are up, too). But if there’s a soft landing for Main Street, it’s not likely to be apparent until after the end of this year.
“We’ve heard from small businesses they are counting on Q4,” Casto said. “Q4 will really be telling, and if these numbers don’t improve in Q4, I don’t even want to say what could happen based on what I am seeing. … Hopefully, it will be a ‘make it’ situation for most of them.” More

President Joe Biden’s student loan forgiveness plan is limited to those making less than $125,000 per year or $250,000 for married couples filing together or heads or household.
The limits are based on adjusted gross income, or AGI, which may be different than your gross salary.
Here’s how to calculate your AGI for student loan forgiveness.

JGI/Jamie Grill

If you’re one of the millions of Americans with student loans, President Joe Biden’s forgiveness plan may be welcome relief.
However, there are some key things to know about the income limits, experts say.

Biden will cancel $10,000 for most borrowers or up to $20,000 for Pell Grant recipients, limited to those making less than $125,000 per year or $250,000 for married couples filing together or heads of household.
And financial advisors have already received a flurry of client questions, including whether their income may be too high to qualify for the debt relief.
More from Personal Finance:Are your student loans eligible for federal forgiveness? What we knowWhat President Biden’s student loan forgiveness means for your taxes’It’s a game changer.’ Pell Grant recipients react to student loan forgiveness
“I have a lot of clients who are somewhere on the cusp,” many of whom are mid-career, dual-earning households, said Ethan Miller, a certified financial planner and founder of Planning for Progress, specializing in student loans in the Washington, D.C., area. 

Adjusted gross income is the ‘magic number’

While eligibility may be simpler for borrowers far below or above the limits, it may be trickier for those near the $125,000 or $250,000 thresholds.

That’s because the number is based on so-called adjusted gross income, or AGI, which may be different than your gross salary.
“It’s the magic number,” Miller said, noting the U.S. Department of Education uses AGI for existing income-based student loan repayment plans.

You may be eligible for forgiveness if your AGI was below the $125,000 or $250,000 thresholds in either the 2020 or 2021 tax year.
And 2020 may be significant for anyone who lost a job or earned less during the first year of the pandemic, according to CFP Tommy Lucas, an enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

How to calculate adjusted gross income

You calculate AGI by adding up your earnings — including salary, interest and more — and subtracting the items on Part II of Schedule 1 on your tax return, explained Lucas.
Some of those items may include deductible individual retirement account or health savings account contributions, educator expenses and more, he said.
For example, eligible couples under 50 who made deductible IRA deposits may have reduced adjusted gross income by $12,000 for 2020 or 2021. 

For most individuals, your gross income and adjusted gross income are going to be pretty close, if not the same.

Tommy Lucas
Financial advisor at Moisand Fitzgerald Tamayo

“The big one is the deductible IRA,” Lucas said. However, the deadline for 2020 or 2021 IRA contributions has already passed.
But if you made a deductible IRA contribution for either year, you’ll want to make sure it was included on Schedule 1 of your tax return and reflected in your AGI.
If not, you can consider amending your tax return electronically, especially if reducing your AGI by that amount “makes or breaks it” for forgiveness eligibility, Lucas said.
Of course, it may take time for the IRS to process an amended return, so you’ll want to act quickly, he said.

AGI may vary more for self-employed borrowers

If you’re a full-time Form W-2 worker without other income or deductible IRA contributions, it’s less likely you’ll see a difference between gross income and adjusted gross income, Lucas said.
Self-employed filers or contract workers, however, typically have more opportunities to reduce AGI, including certain retirement plan deposits, health insurance premiums, one-half of self-employment tax and more, he said.
“But for most individuals, your gross income and adjusted gross income are going to be pretty close, if not the same,” Lucas said.

Where to find your AGI

While calculating adjusted gross income may involve a few steps, you can also find the number on your tax return.
To confirm your AGI for 2020 and 2021, look for line 11 on the front page of your tax return, known as Form 1040, Miller said.
“I think that it’s pretty straightforward for most people,” he added.

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NASA plans to launch the Artemis I mission on Monday from Kennedy Space Center in Florida, sending the Space Launch System (SLS) rocket and Orion capsule on a more than month-long journey around the moon.
The uncrewed launch marks the debut of the most powerful rocket ever assembled and kicks off NASA’s long-awaited return to the moon’s surface.
Artemis I will travel about 1.3 million miles over the course of 42 days.

NASA plans to launch the Artemis I mission on Monday from Kennedy Space Center in Florida, sending the Space Launch System (SLS) rocket and Orion capsule on a more than month-long journey around the moon. —
The uncrewed launch marks the debut of the most powerful rocket ever assembled and kicks off NASA’s long-awaited return to the moon’s surface. It’s the first mission in NASA’s Artemis lunar program, which is expected to land the agency’s astronauts on the moon by its third mission in 2025.

While Artemis I will not carry astronauts, nor land on the moon, the mission is critical to demonstrating that NASA’s monster rocket and deep space capsule can deliver on their promised abilities. Artemis I has been delayed for years, with the program running billions over budget.

NASA’s Artemis I Moon rocket is rolled out to Launch Pad Complex 39B at Kennedy Space Center, in Cape Canaveral, Florida, on August 16, 2022.
Chandan Khanna | AFP | Getty Images

The Artemis I mission represents a crucial turning point in NASA’s moon plans.
Despite the delays, and absorbing much of NASA’s relatively small budget by federal agency standards, the Artemis program has enjoyed strong bipartisan political support.
Officials in 2012 estimated that the SLS rocket would cost $6 billion to develop, debut in 2017 and carry a $500 million per launch price tag. But the rocket is only just now debuting, having cost more than $20 billion to develop, and its per launch price tag has ballooned to $4.1 billion.
NASA’s Inspector General, its internal auditor, earlier this year said Artemis is not the “sustainable” moon program that the agency’s officials say it is. The watchdog found more than $40 billion has already been spent on the program, and projected NASA would spend $93 billion on the effort through 2025 – when the first landing is planned.

But even that 2025 date is in doubt, according to NASA’s Inspector General, which said that development technologies needed to land on the moon’s surface are unlikely to be ready before 2026, at the earliest.
NASA’s Artemis plan relies on the success of another monster rocket as well: SpaceX’s Starship. The agency last year awarded SpaceX with a $2.9 billion contract to develop a moon-specific version of the rocket to serve as the crew lunar lander for the Artemis III mission.
SpaceX began testing of its Starship spacecraft in earnest in 2019, but that rocket has yet to reach orbit.
A host of aerospace contractors across the U.S. support the hardware, infrastructure and software for NASA’s Artemis I – Boeing, Lockheed Martin, Northrop Grumman, Aerojet Rocketdyne and Jacobs lead the effort. According to NASA, the Artemis program supports about 70,000 jobs around the country.
Multiple NASA centers are involved as well, beyond Kennedy as the launch site – including the DC headquarters, Marshall in Alabama, Stennis in Mississippi, Ames in California, and Langley in Virginia.
In the event that technical issues or weather delay the Aug. 29 launch attempt, NASA has back-up launch dates scheduled for Sept. 2 and Sept 5.
Here’s what you should know about the launch:

The rocket: SLS

NASA’s SLS moon mega rocket topped by the Orion spacecraft rolls out of the Vehicle Assembly Building at the Kennedy Space Center on its way to launch complex 39B for a launch rehearsal on March 17, 2022 in Cape Canaveral, Florida.
Paul Hennessy | Anadolu Agency | Getty Images

Standing as high as a skyscraper at 322 feet tall, the SLS rocket is a complex vehicle built on technologies used and improved on from NASA’s Space Shuttle and Apollo programs.
Fully fueled, SLS weighs 5.7 million pounds, and produces up to 8.8 million pounds of thrust – 15% more than the Saturn V rockets last century. SLS uses four liquid-fueled RS-25 engines, which flew on the Space Shuttle before being refurbished and upgraded, as well as a pair of solid rocket boosters.
SLS’s core stage gets its orange color from the thermal protection system that covers it, which is a spray-on foam insulation. For the first three Artemis missions, NASA is using a variation of SLS known as Block 1. For later missions, NASA plans to roll out an even more powerful variation, known as Block 1B.

The capsule: Orion

NASA’s Orion spacecraft
Source: NASA

NASA’s Orion capsule can carry four astronauts on missions up to 21 days long without docking with another spacecraft. At its core is the crew module, which is designed to endure the harsh conditions of flying into deep space.
After launch, Orion is fueled and propelled by the European Service Module, which was built by the European Space Agency and contractor Airbus.
For Artemis I, there will be three mannequins inside the Orion capsule to collect data via sensors about what astronauts will experience on the trip to-and-from the moon. The return to Earth will be especially crucial, as Orion will re-enter the Earth’s atmosphere at about 25,000 miles per hour. A heat shield protects the exterior of Orion, and a set of parachutes will slow it down for a splash landing in the ocean

The mission around the moon

NASAs Artemis I Moon rocket sits at Launch Pad Complex 39B at Kennedy Space Center, in Cape Canaveral, Florida, on June 15, 2022.
Eva Marie Uzcategui | AFP | Getty Images

Artemis I will travel about 1.3 million miles over the course of 42 days, spanning several phases. After separating from SLS, the capsule will deploy solar arrays and begin a multi-day journey to the moon – departing from Earth’s orbit in what is known as a “trans-lunar injection.”
NASA plans to fly Orion as close as 60 miles above the moon’s surface, before moving into a wide orbit around the lunar body. To return, Orion will use the moon’s gravity to assist it in setting a trajectory back into Earth’s orbit.
Orion is expected to splash down in the Pacific Ocean – off the coast of San Diego, California – where a team of NASA and Department of Defense personnel will recover the capsule.
In addition to the mannequins onboard Orion, Artemis I carries several payloads such as cube satellites, technology demonstrations and science investigations.

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Traffic to restaurants fell 2% in the second quarter, but breakfast transactions were unchanged from a year ago, according to The NPD Group.
Breakfast items are typically less expensive than other restaurant offerings.
The French toast stick wars are one example of fast-food chains using breakfast to grow sales.

Getty Images

Consumers may be dining out less, but breakfast sales are holding steady as people return to offices and grab a quick bite or iced coffee on the way to work.
Overall traffic to restaurants fell 2% in the second quarter from a year ago as inflation drove menu prices up, according to market research firm The NPD Group. The only category that was unchanged: breakfast and morning snacks.

Restaurant companies like Starbucks say morning sales are being driven in part by people returning to their pre-pandemic work routines. David Portalatin, NPD’s food and beverage analyst, also noted the relative affordability of breakfast items.
“For a lot of people, it’s simply a cup of coffee and maybe a specialty coffee that they’re paying a premium price for, but it’s sort of more manageable,” he said.
The cost for food away from home rose 7.6% over the 12 months ended in July, according to the Bureau of Labor Statistics. Prices for food at home climbed even higher, rising 13.1%.
Kathleen Flynn, a 26-year-old photo producer in New York, said she’s rarely eating out these days and has been cutting back spending. But she still stops by a coffee shop, La Cabra, each morning for a cardamom bun and a cappuccino.
“I have to do this because it’s my joy,” Flynn said.

A return to normalcy

Before the pandemic, the restaurant industry saw breakfast as the biggest opportunity to grow sales and gain loyal new customers. Fast-food chains stepped up the quality of their coffee and morning menus to convince people to swing through the drive-thru on the way to work or school.
In early 2020, just weeks before lockdowns, Wendy’s launched its breakfast menu nationwide, joining the likes of McDonald’s, Taco Bell, Burger King and Chick-fil-A in offering the morning meal.
But when the pandemic hit and shuttered offices and schools, breakfast saw the sharpest decline in sales. Starbucks reported that customers were buying lattes and macchiatos later in the day. Many Taco Bell locations opted to skip serving breakfast and opened later in the morning because of staffing challenges. By contrast, General Mills and Kellogg saw sales of pantry staples like cereal and Pop Tarts surge, while demand for orange juice climbed for the first time in years.
More recently as people started going out more often and reestablishing their daily routines, the trend is reversing. Total spending at quick-serve eateries, which includes fast food locations and coffee shops, climbed 32% in the 52-week period ended June 12, compared with 2019 levels, according to data from market research firm Numerator.
“Now that we’re getting back to more normalized behaviors, we’re really just returning to the oldest trend where breakfast was generally outpacing the growth of other dayparts,” Portalatin said.
More Starbucks customers are buying their coffee in the morning again. The company’s outgoing Chief Operating Officer John Culver told investors in early August that 51% of the chain’s sales in its latest quarter happened in the morning, closer to pre-pandemic levels. The company expects morning sales to strengthen even more as commuters return to offices.
Strong breakfast sales bolstered McDonald’s U.S. same-store sales growth of 3.7% in the second quarter, executives said in late July. The chain hasn’t brought back its popular all-day breakfast menu, which means Egg McMuffin fans have to get up earlier in the morning now.
Doughnut lovers are buying picking up their boxes of Krispy Kreme earlier in the day as well.
“People are starting to engage in the doughnut for the office et cetera in the morning time, so we see some growth there,” Krispy Kreme CEO Mike Tattersall told CNBC.
Paris Baguette, a South Korean-based chain of bakery cafes, has seen its U.S. breakfast traffic climb 20% compared with pre-pandemic levels, according to Nick Scaccio, the company’s U.S. vice president of operations. He attributed the chain’s strong growth to a coffee partnership with Lavazza and its efforts to build brand awareness.

The French toast stick wars

Breakfast remains a largely untapped opportunity for the restaurant industry, with many people still opting to eat cereal or eggs at home. The meal accounts for 20% about of restaurant transactions, according to NPD.
And in terms of spending, breakfast only accounts for about 13% of total fast-food sales, according to Technomic principal David Henkes.
But restaurants and convenience stores were gaining new customers in the morning before the pandemic. And as they look to build back their traffic and sales in the months ahead, many are putting more effort into marketing their morning menus.
The push is apparent in this summer’s French toast stick wars. After Sonic and Burger King added versions of the portable treats to their permanent menus, Jack in the Box brought back its version as a limited-time offer. Then earlier this month, Wendy’s introduced its Homestyle French Toast Sticks.
“[Fast-food chains] especially are really innovating around new menu items to try and capture those incremental sales as consumers start to return to the breakfast daypart within restaurants,” Henkes said.

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