Business

Dubai’s Emirates airline in August announced an investment of over $2 billion to improve its inflight customer experience, including cabin interior upgrades and new menus — with unlimited caviar.
The world’s biggest long-haul carrier will be retrofitting over 120 aircraft with new interiors, as well as dishing up menus with new vegan options and cinema snacks like popcorn, Emirates said in a statement.Other new perks for the carrier’s first-class travelers include unlimited portions of Persian caviar, paired with Dom Perignon vintage champagne.

Those investments come just as Emirates posted a $1.1 billion loss for the year ended March 31.
“While others respond to industry pressures with cost cuts, Emirates is flying against the grain and investing to deliver ever better experiences to our customers,” said the president of Emirates airline, Tim Clark.

What other airlines are doing

Emirates is not the only airline pulling out all the stops to ride the tailwinds of “revenge travel” — the idea that people are making up for time “lost” during the pandemic to travel again.
Earlier this year, Finnair launched a new line of premium economy cabins, featuring seats that provide around 50% more space than their economy seats.

Emirates in August announced an investment of over $2 billion to elevate its inflight customer experience.
Photo: Emirates

Air France, likewise, announced new long-haul business seats in May, complete with sliding dividers for passengers who want their own private space.Emirates told CNBC that it has seen “a lot of interest” in these luxury upgrades, though it said it does not have the full numbers yet.

Is that enough?

One travel analytics company, however, noted a shift in demand toward premium seats.
“During the pandemic, we saw that the numbers of people travelling by air collapsed. However, the proportion of travelers flying in premium cabins increased significantly,” said Olivier Ponti of ForwardKeys told CNBC in an email.Ponti said that before the pandemic, the split between premium and economy seats was a ratio of 13:87, compared with 17:83 in 2022.”While there’s no guarantee that the shift towards premium seats will be maintained as air travel recovers, one can understand why the airlines would want to invest in keeping hold of premium passengers, who, this year have typically spent 575% more on a seat than those flying economy.”
Others are skeptical, however.
Edward Russell, an editor at Skift, a travel industry news site, told CNBC it’s unclear how much of an effect “small” product changes will have on sales.
“Most travelers either fly the airline, or alliance, where they have loyalty, or opt for the cheapest fare. It is only a small subset of travelers who will actually book a flight based on the addition of a sliding door or unlimited caviar.”

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Sustainable Energy

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The Thar Surya 1 project, in Rajasthan, India is being constructed by Italian firm Enel Green Power.
Norwegian embassy describes India, which is on track to become the planet’s most populous country, as a “priority market.”
India wants its renewable energy capacity — excluding large hydro — to hit 175 GW this year, a challenging target.

India is targeting a major ramp up of its renewable energy capacity, but achieving its aims represents a big challenge.
Puneet Vikram Singh | Moment | Getty Images

Norway’s Climate Investment Fund and the country’s biggest pension company, KLP, are set to invest in a 420-megawatt solar power project being developed in Rajasthan, India.
The two parties will invest around 2.8 billion Indian rupees (roughly $35 million) for a 49% stake in the Thar Surya 1 project, which is being constructed by Italian firm Enel Green Power.

According to an announcement from the Norwegian Embassy in India, the Climate Investment Fund is slated to allocate 10 billion Norwegian Krone (approximately $1 billion) to projects over the next five years.
The embassy also described India, which is on track to become the planet’s most populous country next year, as a “priority market.”
That comes as Norway’s development finance institution, Norfund — which manages the Climate Investment Fund — and Enel Green Power have established an India-focused strategic investment partnership.

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“This is the first investment we are making with Enel, and together we have great ambitions to contribute with similar investments in India in the years to come,” Tellef Thorleifsson, CEO of Norfund, said in a statement issued Monday.
While it is investing in renewable energy projects, Norway’s oil and gas reserves make it a major exporter of fossil fuels.

“In recent years, Norway has supplied between 20 and 25 per cent of the EU and United Kingdom gas demand,” Norwegian Petroleum says.
“Nearly all oil and gas produced on the Norwegian shelf is exported, and combined, oil and gas exceeds half of the total value of Norwegian exports of goods,” it adds.
India’s goals
India’s Ministry of New and Renewable Energy says that, over the past seven and a half years, the country’s solar capacity has increased from around 2.6 gigawatts to over 46 gigawatts.
India wants its renewable energy capacity — excluding large hydro — to hit 175 GW this year, a challenging target. On June 30, installed renewable energy capacity, excluding large hydro, stood at 114.07 GW, according to a recent statement from India’s minister of state for new and renewable energy.
Despite its renewable energy goals, India remains reliant on fossil fuels. At the end of June, fossil fuels’ share of India’s total installed generation capacity stood at 58.5%, according to the Ministry of Power.

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At last year’s COP26 climate change summit, India and China, both among the world’s biggest burners of coal, insisted on a last-minute change of fossil fuel language in the Glasgow Climate Pact — from a “phase out” of coal to a “phase down.” After initial objections, opposing countries ultimately conceded.
During a speech delivered to The Energy and Resources Institute’s World Sustainable Development Summit in Feb. 2022, Indian Prime Minister Narendra Modi said he firmly believed that “environmental sustainability can only be achieved through climate justice.”
“Energy requirements of the people of India are expected to nearly double in the next twenty years,” Modi said. “Denying this energy would be denying life itself to millions. Successful climate actions also need adequate financing.”
He added, “For this, developed countries need to fulfill their commitments on finance and technology transfer.”
European interest
The Norwegian interest in India’s renewable energy sector represents the latest example of major organizations and businesses making a play in the country.
Earlier this year, for example, German energy giant RWE and India’s Tata Power announced a collaboration focused on developing offshore wind projects in India.
“India has excellent wind resources, which can help to meet the country’s increasing energy demands,” Sven Utermohlen, RWE Renewables’ CEO for offshore wind, said in a statement.
“If clear regulations and an effective tender scheme are in place, we expect India’s offshore wind industry will gain a real momentum,” he said.
— CNBC’s Sam Meredith contributed to this report. More

Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Rhythm Pharmaceuticals: “Very interesting company. Does weight loss, but I’ve got a company that does weight loss and a lot of other things and it’s called Eli Lilly. It is owned by my Charitable Trust, and we talk about it a lot with the Investing Club.”

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Snap: “I have no reason to buy Snap — it is losing money — other than the fact it’s a $10 stock. I can’t make that be the only reason why I recommend the stock.

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Vista Outdoor: “You know, Vista Outdoor if you actually got rid of the guns — I am a hunter — if you got rid of the guns and had just all the other stuff, I think the stock would be higher because that’s the world we’re in. Not saying it’s a good world, bad world, but it is the world we’re in.”

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Eagle Bulk Shipping: “All the bulk shippers have the same problem. They’ve got these giant yields, but I’m telling you, they are not worth it. I don’t like the risk. I don’t like the risk.”
Disclosure: Cramer’s Charitable Trust owns shares of LLY.

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“Shazam! Fury of the Gods,” which was slated for Dec. 21, has been pushed to March 17, 2023.
“Aquaman and the Lost Kingdom,” which was set to debut on that March date is now arriving on Christmas Day in 2023.
The release date shifts comes amid a tumultuous time for the newly formed Warner Bros. Discovery. CEO David Zaslav has been ramping up cost-cutting measures in recent weeks, including layoffs and content eliminations from streaming service HBO Max.

Source: Warner Bros. | DC Comics

The release dates for the sequels to “Aquaman” and “Shazam” are being shuffled, as Warner Bros. Discovery seeks to cut costs following its pricey merger.
“Shazam! Fury of the Gods,” which was slated for Dec. 21, has been pushed to March 17, 2023. “Aquaman and the Lost Kingdom,” which was set to debut on that March date is now arriving on Christmas Day in 2023.

The release date shifts comes amid a tumultuous time for the newly formed Warner Bros. Discovery. CEO David Zaslav has been ramping up cost-cutting measures in recent weeks, including layoffs and content eliminations from streaming service HBO Max.
This includes shelving the $90 million “Batgirl” flick that was set to debut on the platform as well as removing nearly 200 “Sesame Street” episodes and dozens of other shows.
It’s likely that the shift of the “Shazam” and “Aquaman” sequels are part of a similar strategy. Marketing theatrical releases is costly, so WarnerBros. Discovery is likely looking to spread out these tentpole releases across two years.
After all, the Dwayne Johnson-led “Black Adam” is set to hit theaters Oct. 21. So instead of having three major DC films released within the span of six months, Warner Bros. Discovery will have five in 14 months. “The Flash” hits theaters June 23, 2023 and “Blue Beetle” arrives August 18, 2023.
Other changes to Warner Bros. Discovery’s release calendar includes dating “House Party” for Dec. 9, 2022, “Evil Dead Rise” for April 21, 2023 and “The Nun 2” for Sept. 8, 2023.
“Salem’s Lot,” which was due out April 21, 2023 is now no longer on the release calendar.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer said Wednesday he believes the bear market bottom is in.
The “Mad Money” host said he believes Wall Street’s lows in June will be a durable floor for stocks.

CNBC’s Jim Cramer said Wednesday he believes the bear market bottom is in, suggesting Wall Street’s June lows will prove to be durable floor for stocks.
The S&P 500’s closing low this year came on June 16 at 3,666.77, at which point the broad U.S. stock index was down roughly 24% from its all-time highs. It has rallied since then, up about 13% based on Wednesday’s close.

“I like where we are now,” the “Mad Money” host said, while acknowledging the market could “test June’s lows,” because there are “plenty of reasons to be apprehensive.” However, he added, “I’m betting the market will bend, not break, through a rough September, and when we get through that period, that June low will hold.”
Cramer said he came to this conclusion based on what’s happened outside equities. Specifically, he pointed to the fact both the 10-year Treasury yield and the per-barrel price of crude oil topped out around mid-June, as well.

The 10-year Treasury yield notched an 11-year high of nearly 3.5% two days before the S&P 500’s June 16 low.
West Texas Intermediate crude, the U.S. oil benchmark, also has rolled over since early-to-mid-June, when it settled north of $120 per barrel on multiple days.

“Since the June lows, nothing has happened that would shatter the illusion — or reality — of a bottom,” Cramer said, noting that oil has remained well below $120 and “the vast majority of companies” that reported earnings in July and August “did fine.” In fact, he said there’s been “very few true disappointments.”
“Without a spike in oil, which would cause a collapse in corporate earnings, then I think the June lows will hold. Notice I didn’t say they should hold, I said they will hold. The trial will come when the Fed starts selling its own bond holdings with reckless abandon as they keep raising rates. That could create a test of the lows in September, again, but I’m confident they’ll hold.”
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New Biden administration rules that put homemade firearm kits used to build “ghost guns” in the same legal category as traditional firearms went into effect on Wednesday.
The regulations require that the main components used to manufacture ghost guns – the frames and receivers – be assigned serial numbers.
They also require that buyers undergo background checks before purchasing the components and that dealers be federally licensed to sell the kits and keep records of sales.

AR-15 style rifles are displayed for sale at Firearms Unknown, a gun store in Oceanside, California, U.S., April 12, 2021.
Bing Guan | Reuters

New Biden administration rules that put homemade firearm kits used to build “ghost guns” in the same legal category as traditional firearms went into effect on Wednesday after federal judges declined requests to pause the change. 
The regulations require that the main components used to manufacture ghost guns — the frames and receivers — be assigned serial numbers. They also require that buyers undergo background checks before purchasing the components and that dealers be federally licensed to sell the kits and keep records of sales.

The rules, which the White House announced in April, went into effect despite injunction requests from plaintiffs to stop the Bureau of Alcohol, Tobacco, Firearms and Explosives from enforcing them. 
On Tuesday, Chief U.S. District Judge Peter Welte in North Dakota denied a request for a preliminary or permanent injunction as a part of a suit filed by a coalition of state Republican attorneys general, gun groups and a gun store owner. The judge determined the Biden rule “was and remains constitutional under the Second Amendment.” 
In a federal lawsuit filed in Texas, a judge ruled that seller Division 80’s prediction that the rule would “destroy” its entire business was not enough to grant the company’s request to block the rule with a nationwide injunction.
The National Rifle Association, the country’s largest gun-rights group, has criticized the regulations.
In recent years, sales of ghost gun kits have caused concern for all levels of law enforcement. From the federal Justice Department to city police departments, authorities struggled to curb the proliferation of these weapons, which were increasingly being recovered at crime scenes across the country. According to the White House, there were approximately 20,000 suspected ghost gun recoveries reported to ATF last year alone.

“These guns have often been sold as build-your-own kits that contain all or almost all of the parts needed to quickly build an unmarked gun. And anyone could sell or buy these guns without a background check,” Attorney General Merrick Garland said in a statement Wednesday.
“That changes today. This rule will make it harder for criminals and other prohibited persons to obtain untraceable guns,” he said. “It will help to ensure that law enforcement officers can retrieve the information they need to solve crimes. And it will help reduce the number of untraceable firearms flooding our communities.” 
In recent weeks, ghost gun retailers were racing to offload their inventory ahead of the deadline, with some online dealers selling out completely. 
Besides the new federal rule, several states and territories already restrict or ban ghost guns, including California, Connecticut, Hawaii, New Jersey, New York, Rhode Island, Washington and the District of Columbia.   

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The death knell for corporate America’s greatest individual experiment in mergers and acquisitions sounded in November 2021 when General Electric announced its intention to split in three. A thousand deals were struck by Jack Welch, its notoriously gung-ho boss who ran the American industrial and financial giant between 1981 and 2001, a pace that did not slacken under his successor, Jeffrey Immelt. The result has been a monumental destruction of shareholder wealth. The firm’s market value peaked at $594bn in 2000. Today it is a relatively measly $83bn.This lesson notwithstanding, bosses just cannot shake the need to shake hands. In 2021 dealmaking reached fever-pitch: a record $5.9trn-worth were announced globally, $3.8trn by operating companies and the balance by private-equity funds and special-purpose acquisition companies. Competition for assets was fierce and due diligence frenetic. The cost of capital was historically low and buyers paid top-notch prices, at a record median valuation of 15.4 times earnings before interest, tax, depreciation and amortisation (ebitda), according to Bain, a consultancy. The number of deals for highly-valued technology firms soared, accounting for a quarter of the total volume.If history is any judge, many of these deals will destroy value. It is easy to identify disastrous deals: large goodwill write-downs or even bankruptcy are useful signposts. But measuring the performance of the average deal is tough; relative share price performance is a quick but noisy measure and asking a counterfactual “what if” question is crystal-ball stuff. A recent review of academic literature by Geoff and J. Gay Meeks at Cambridge University, estimates that only a fifth of studies conclude that the average deal produces higher combined profits or increases the wealth of the acquirer’s shareholders. McKinsey, another consultancy, reckons that firms pursuing large deals between 2010 and 2019 had only a coin-flip chance of creating excess shareholder returns. Enough to put average Joes off dealmaking, but not budding Neutron Jacks. Those chances of success are further reduced by the circumstances in which the latest crop of deals were struck. Times of frenzy, like last year, are particularly bad for matching suitable buyers and sellers. Dealmaking tends to snowball as chief executives, keen to expand their dominions (and compensation), watch others make their moves and are unable to stand idly by while competitors make hay. Unprecedented competition from private-equity funds only intensifies the urge to move fast. Compounding their zeal are the middlemen. Investment bankers, who get paid by the deal rather than by the hour, convince them anything is possible: flattery is hard currency in the market for advice.There are few brakes on this train. Where activist investors might agitate on the sell-side of a transaction for a higher price (often successfully), this kind of scrutiny is less common on the buy-side. Strong shareholder dissent in reaction to Unilever’s abortive $66bn bid for gsk’s consumer health-care division in December 2021 is an all-too-rare example of owners holding trigger-happy management to account. Today the division, called Haleon, is listed on the London Stock Exchange, valued at around half of Unilever’s offer.The result is ambitious deals made at high prices. Lower asset values are already exposing the flawed logic of some struck at the top of the market. In August Just Eat Takeaway.com, a European food-delivery firm, announced a write-down of the value of Grubhub, its distracting American misadventure, by $3.3bn, barely a year after completing this $7.3bn deal.As equity markets tumbled this year, the shotgun weddings announced in 2021 were being consummated. After the thrill of courtship begins the hard task of post-merger integration. This complex process is the domain of consultants, organisational charts and budgeting, rather than clandestine negotiations and punchy projections. It is being turned on its head by a mix of inflation and slowing growth. Bosses bet big that high prices would be justified by higher profits. They are now running new businesses in a new world. Buyers tend to overestimate the operational benefits of lumping two firms together (“synergies” in corporate speak). Often promised but seldom fully delivered, these projections persuade bosses that the pin factory is better in their hands than those of private-equity’s financial wizards. Scale was the idée fixe of dealmaking during 2021. Such deals are usually predicated on heavy cost cutting, which is far harder while inflation rages. Add current supply-chain chaos to yo-yoing input costs, and managers soon find their powers waning. That difficulty is apparent at Warner Bros Discovery, an American media giant formed in April 2022 through the merger of Discovery and WarnerMedia. In an industry among the worst at realising such targets came a promise of $3bn of annual savings. Rising costs and cyclical pressures on advertising revenue mean that integration will be more difficult than planned. Expectations for ebitda in 2023 are now $12bn, rather than $14bn when the merger was announced. The response of David Zaslav, the firm’s boss, has been to tighten the screws even further (see next article). Labour is often the first cost bosses turn to, even if heavy layoffs grow the chance of rifts between new bedfellows. Many of the most spectacular blow-ups have involved cultural transplant-rejection at the highest levels, though as in aol and Time Warner’s ill-fated $165bn tie-up in 2001 this is usually a symptom rather than cause of strategic mismatch. Yet the real risks occur further down the food-chain as labour markets continue to convulse. The ability to retain good workers (“talent” in the integration dictionary) is critical. It comes high on the list of reasons why deals succeed in a recent survey conducted by Bain.The war for talent has quickly turned into a great hiring freeze in the technology sector, but elsewhere labour shortages are the norm. Significant challenges await the integration of Canadian Pacific Railway and Kansas City Southern, a $31bn deal announced in September 2021 which is awaiting its final regulatory stamps. The merger in 1968 of Pennsylvania and New York Central Railroad provides a warning from history. Shortly before the new entity’s bankruptcy in 1970, an internal report laid bare the role of high staff turnover in its failed integration: 61% of train masters, 81% of transport superintendents and 44% of division superintendents had been in their job for less than a year.The dealmakers of 2021 entered the present inflationary period with a high bar to clear in order to justify the top-of-market deals they struck. As of now the mega-disasters of this wave of mega-deals are matters of speculation, though no one doubts they will emerge. Even this will not be enough to convince bosses to kick their dealmaking habit, at least while corporate balance-sheets remain strong, and activity has been remarkably resilient in 2022. Until bosses can be persuaded of other uses for their profits, new challenges mean only new types of deals. At least this year there may be a few bargains to be had. ■ More

Pending home sales, a measure of signed contracts on existing homes, dropped 19.9% in July compared with July 2021.
The figure has fallen for eight of the past nine months as rising mortgage rates made housing less affordable.

Pending home sales, a measure of signed contracts on existing homes, slipped 1% from June to July, according to the National Association of Realtors. Compared with a year ago, sales were down 19.9%.
The figure, a future indicator of closed sales, has fallen for eight of the past nine months as rising mortgage rates made housing less affordable. Higher rates pushed the typical mortgage payment up by 54% from a year ago, according to the NAR.

The drop in sales was smaller than previous months and could be a sign of the market settling, even if for a brief period.

A sign is posted in front of a home for sale on July 14, 2022 in Corte Madera, California.
Justin Sullivan | Getty Images

“We may be at or close to the bottom in contract signings,” said Lawrence Yun, chief economist for the Realtors association. “This month’s very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at lower price points is hindering transaction activity.”
Mortgage rates have been climbing steadily this year, peaking in June before dropping slightly in July. Rates resumed their rise this week and are now approaching 6% again, according to Mortgage News Daily.
Regionally, pending home sales in the Northeast fell 1.9% for the month and were down 15.4% from July 2021. In the Midwest, sales dropped 2.7% monthly and are down 13.4% year over year.
The South saw sales decline 1.1% from the previous month and 20% from a year ago. The West was the only region to see a monthly gain, up 2.2%. But sales were still down 30.1% from July 2021.

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