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The economic headwinds currently roiling the U.S. economy are fixable in the long-run, meaning investors can afford to relax a bit, BlackRock CEO Larry Fink told CNBC’s Jim Cramer on Wednesday.
“A really famous person called me up, panicking, ‘what should I do, I’ve got to get out, I can’t stand it, I can’t stand it.’ And I said, ‘go on vacation,'” Fink said in an interview on “Mad Money.”

The economic headwinds currently roiling the U.S. economy are fixable in the long-run, meaning investors can afford to relax a bit, BlackRock CEO Larry Fink told CNBC’s Jim Cramer on Wednesday.
“A really famous person called me up, panicking, ‘what should I do, I’ve got to get out, I can’t stand it, I can’t stand it.’ And I said, ‘go on vacation,'” Fink said in an interview on “Mad Money.”

“If you really can’t stand it, then sell it. … But the reality is, we’ve seen this. Inflation is going to be fixed over time,” he added, pointing to falling commodity prices as a sign of deflation.
All the major averages gained on Wednesday, buoyed by a rally in tech stocks. The market’s gains follow its recovery on Tuesday, when investors betting that the market is bottoming picked up riskier assets like tech stocks. These stocks have seen massive sell-offs this year after the Federal Reserve started raising interest rates to tamp down inflation.
When Cramer asked whether persistent inflation, the Fed’s rate increases and the Russia-Ukraine war is a threat to the overall health of the U.S. economy, Fink said that the headwinds are “business as usual” for long-term investors.
“When I started my career, when you started your career, we had much higher inflation, much more problems in our country. We’re going to get through this,” he said.
“Is there risk of a recession? Sure, but even if we’re in one, it’s going to be quite mild. The financial foundation of America is as strong today as ever,” he added.

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United Airlines on Wednesday notched a key profit milestone in its pandemic recovery.
It said it will scale back its growth plans through 2023.
Airlines have reported strong demand as well as high costs for fuel and other expenses.

United Airlines on Wednesday notched a key profit milestone in its pandemic recovery, but said it will scale back its growth plans through 2023.
United reported its first quarterly profit — $329 million — since the Covid-19 pandemic began without the help of federal payroll aid, which expired almost a year ago.

Unit revenues in the second quarter surged 24% over 2019 thanks to strong travel demand, even at sky-high fares, while unit costs, excluding fuel, rose 17% over the April-June period of three years ago. Fuel costs also soared.
“It’s nice to return to profitability — but we must confront three risks that could grow over the next 6-18 months,” United CEO Scott Kirby said in an earnings release. “Industry-wide operational challenges that limit the system’s capacity, record fuel prices and the increasing possibility of a global recession are each real challenges that we are already addressing.”

An aircraft takes off from O’Hare International Airport on January 18, 2022 in Chicago, Illinois.
Scott Olson | Getty Images

The Chicago-based airline estimated its third-quarter capacity would be 85% of the same quarter of 2019 and fourth-quarter capacity would be 90% restored compared with three years ago, before the pandemic hamstrung travel — a relatively conservative plan as it seeks to trim flying in order to become more reliable.
Rival airlines Delta, Southwest, JetBlue and others, have also trimmed their schedules recently.
Next year, United said it plans to expand flying no more than 8% over 2019, down from an earlier forecast for 20% growth.

Shares were down nearly 7% in after-hours trading after the airline reported results.
Here’s how United performed in the second quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

Adjusted loss per share: $1.43 versus an expected $1.95.
Total revenue: $12.11 billion versus expected $12.16 billion.

United’s report comes a week after Delta reported a jump in second-quarter sales and forecast continued travel demand through the end of the peak summer season. American Airlines reports its second-quarter results and third-quarter forecast before the market opens on Thursday.
Costs, including a jump in fuel prices over last year, continue to weigh on airlines’ bottom lines as they try to dig their way out of the pandemic.
United said it expects unit costs excluding fuel to remain elevated through this year, up 16% to 17% in the third quarter and up about 14% in the fourth from three years earlier.
United executives will hold an earnings call with analysts and media at 10:30 a.m. ET on Thursday.

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A union seeking to organize Chipotle workers filed a complaint with the National Labor Relations Board after the burrito chain said it would permanently close a unionizing location.
Chipotle said it’s closing the Augusta, Maine, location because it could not fix staffing issues.

A Chipotle Mexican Grill sign is seen in the Park Slope neighborhood in the Brooklyn borough of New York City.
Michael M. Santiago | Getty Images

A union pushing to organize workers at Chipotle Mexican Grill has filed a complaint with the National Labor Relations Board after the burrito chain said it would permanently close a location that was seeking to unionize.
In late June, an Augusta, Maine, Chipotle restaurant became the chain’s first outlet to file for a union election, seeking to organize under Chipotle United, which is not affiliated with any larger unions. The petition came after employees walked out of the restaurant earlier in the month in protest of working conditions and understaffing.

Chipotle said the location has been closed to the public since June 17. Spokesperson Laurie Schalow denied that the permanent closure of the restaurant was due to the union petition. Instead, she said the company was unable to provide enough staffing for the location.
“Our operational management reviewed this situation as it would any other restaurant with these unique staffing challenges. Chipotle respects our employees’ rights to organize under the National Labor Relations Act,” Schalow said in a statement to CNBC.
But Chipotle United workers seeking to organize feel the move is retaliatory and held a rally on Tuesday evening to protest the store’s closure. Organizer Brandi McNease told CNBC the closure will only energize efforts.
“All they are doing is fueling us,” McNease said.
McNease said Chipotle United, which filed its complaint Tuesday, is mainly concerned with crew safety, food safety and short staffing.

Jeffrey Neil Young, the attorney representing Chipotle United, told CNBC this is “union-busting 101.”
“The closing was targeted not just at the Maine workers, but at Chipotle workers around the country who are contemplating forming a union. Organizing drives are currently underway in Michigan, New York, and elsewhere. Closing the store signals to other Chipotle workers that if they organize, they could be out of a job,” Young said in a written statement. He added that the union has asked the NLRB to seek an injunction to compel Chipotle to reopen the store and pay the workers back pay until the store reopens.
Employees at a second Chipotle outlet filed for a union election in early July. Workers in that restaurant, which is located in Lansing, Michigan, are seeking to unionize under the International Brotherhood of Teamsters.

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Marriott this week will open its 108th Ritz Carlton property, a swanky new 500-foot hotel in the NoMad neighborhood of Manhattan.
It’s a bet on the surge in luxury travel and the hopeful return of business travelers this fall.
The Ritz’s debut comes as New York City sees a resurgence in tourists.

The Ritz-Carlton in the NoMad neighborhood of New York City.
Seema Mody | CNBC

Marriott next week will open a swanky new Ritz Carlton hotel in Manhattan, marking a bet on the surge in luxury travel and the hopeful return of business travelers this fall.
“It’s got 10,000 square feet of meeting space, a 7,000-square-foot spa, and four food and beverage outlets. I think it’s uniquely positioned to take care of that pivot from leisure travel to business travel,” Marriott CEO Tony Capuano told CNBC on Tuesday.

The debut of the 108th Ritz Carlton comes as New York City is seeing a resurgence in tourists. The city saw tourism all but dry up in the early days of the pandemic when New York became one of the first epicenters of the outbreak. Now travelers are flocking back, and more developers are signing new deals.
“2019 was the best year in New York’s history. You had over 66 million visitors to New York. There’s a sense we’ll get back to about 85% of that this year,” said Capuano.
New York City hotel occupancy rates are currently the country’s third-strongest, at 83%, according to STR, a provider of hospitality analytics. The top two markets are Portland, Maine, and San Diego, California, with 85% and 84% occupancy levels, respectively.
New York’s rebound marks a strong reversal from the past two years when beach destinations won out.
“People just stayed away from downtown areas. They didn’t want to be around a lot of other people due to Covid … but that has reversed and I think we’re ready for the city vacation,” said Jan Frietag, Costar Group’s national director for hospitality analytics.

As hotel demand rebounds and inflation hovers at a four-decade high, per-night pricing has skyrocketed. The average cost to check in to a hotel in New York City is nearly $300 a night, up 20% from 2019 levels, according to STR.

Capuano said the higher rates are a sign that hotels are commanding pricing power — so long as they can navigate a challenging labor market.
“I think it’s sustainable if we deliver on that service. Obviously, one of the big challenges that the entire travel and tourism sector faces is a labor challenge. We continue to do everything in our power to make sure our hotels are staffed, our teams are trained. If we’re going to continue to experience this strong pricing power, we’ve got to deliver on service,” Capuano said.
The Ritz Carlton joins 11 other hotels that have opened in New York this year. Another 60 projects are in the pipeline with scheduled opening dates for 2022, according to STR.
“That is the highest pipeline in the country for any market,” Freitag said.
But hotel development continues to get tripped up by supply chain delays. The Ritz Carlton broke ground four years ago and is only now opening its doors, due in part to the pandemic and ongoing supply constraints that slowed down construction.
“It’s really hard to open when you want to open due to the ongoing challenges related to supply chain issues,” Freitag said.

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Bath & Body Works lowered its second-quarter and full-year sales guidance.
The company cited inflation and a more difficult macroeconomic environment.
Shares bounced back Wednesday afternoon after a sharp decline in the morning.

Bath & and Body Works entrance.
Jeff Greenberg | Getty Images

Shares of Bath & Body Works initially fell Wednesday after the company lowered its sales and earnings outlook, citing a more challenging macroeconomic environment.
But the stock clawed its way into positive territory later in the day, closing up 3% at $31.10.

“Our data indicates that customers, particularly lower income customers, have become more cost conscious and are limiting purchases,” the company said in a statement.
For the second quarter, the home fragrance and personal care retailer said it now expects sales to be down 6% to 7% from the same time last year. For the full year, it now expects sales to be down mid- to high-single digits from 2021.
Previously, Bath & Body had forecast second-quarter and full-year sales to grow in the low single digits from a year ago.
Bath & Body Works also said it now expect second-quarter earnings from continuing operations to be 40 to 42 cents per share, down from its previous forecast of 60 to 65 cents a share.
The company said it sought to address the more cautious spending by increasing sales and promotions, but noted that the moves have impacted its margins.

Bath & Body Works is scheduled to report its second-quarter earnings on August 17.
Analysts at Raymond James said Wednesday they were remaining bullish on the stock.
“We continue to rate shares Strong Buy as we believe they already reflect the impact of a more significant slowdown, while the company’s solid innovation pipeline and initiatives such as the loyalty program, as well as margin pressure alleviating, position the company well for medium- to long-term growth,” they wrote.

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FaZe Clan is an online media company made up of 93 members, consisting primarily of esports competitors and content creators, plus a handful of celebrities like Snoop Dogg, who also serves on the company’s board of directors.
FaZe Clan, which started in 2010 with gamers posting videos on Youtube, was ranked the fourth-most-valuable esports company by Forbes.
Many planned SPAC deals remain on hold or were cancelled, and many companies that went public using a SPAC merger in the past few years have performed poorly for investors.
FAZE shares sank in their debut on Wednesday, finishing down nearly 25%.

Digital entertainment and esports brand FaZe Clan began trading on the Nasdaq Wednesday after completing a SPAC merger in a deal valued at $725 million, a big step for creator economy companies to be publicly traded.
FaZe Clan is an online media company made up of 93 members, consisting primarily of esports competitors and content creators, plus a handful of celebrities like Snoop Dogg. FaZe Clan’s social creators have a combined following of over 500 million across multiple platforms such as YouTube, TikTok and Twitch. FaZe Clan was also ranked the fourth-most-valuable esports company by Forbes.

The company began trading on the Nasdaq under the ticker FAZE. FAZE shares sank in their debut on Wednesday, finishing their first day of trading down nearly 25%.
A SPAC, or special purpose acquisition company, purchases an existing private business and takes it to public markets. SPACs gained in popularity during the pandemic as an alternative to the traditional initial public offering. However, the SPAC market has dried up, many planned deals remain on hold or were canceled, and many companies that went public using a SPAC merger in the past few years have performed extremely poorly, losing over half their value in 2022 through the first half of the year.

Arrows pointing outwards

Despite the current market conditions and the threat of new SPAC regulation, FaZe Clan CEO Lee Trink said he feels confident going public via a SPAC was the right decision for his company. 
“I understand why other companies have been criticized for going public via the SPAC vehicle. But for us, it really fits,” Trink said.
FaZe Clan was founded in 2010 by a group that started posting gameplay videos on YouTube. The company then grew in membership and engagement, branching off into new vehicles such as esports where players take part in video game competitions. Trink, who was previously president of Capitol Records, joined the company in 2018 seeing an opportunity in a brand focused on younger audiences.

“We think we’re the first Gen Z native brand to go public; we’re certainly the first creator-based brand to go public,” Trink said.
FaZe Clan announced the plan for a SPAC merger last October, marking the deal at $1 billion. Nine months later, the deal is now worth $725 million.
“The initial plan was to go public in the first quarter of this year. That obviously didn’t happen,” said Tobias Seck, business analyst with The Esports Observer. 
In March, FaZe Clan received a $20 million bridge loan from B. Riley Principal Commercial Capital, the special purpose acquisition company with which it is merging.
“​​It seems to be their best attempt at securing capital, especially in the rather rough economic times we’re currently in,” Seck said. “It’s obviously still nascent, and most of the organizations are still trying to figure out how to actually make money,” he added.
In an amended June filing related to the deal, the company reported estimated 2021 revenue of roughly $50 million and a forecast for $90 million in revenue in 2022, but a wider adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss than it had previously forecast, of $19 million.
FaZe Clan plans to bring on more creators and help them grow their own community, an alternative to reliance on advertising revenue from existing social media brands.
“FaZe Clan will fund investments and we will create the product and we’ll own a bigger piece of the upside. That’s the future of the creator economy,” Trink said.
Trink projects that the esports business will be a smaller part of FaZe Clan’s revenue in the future. Upcoming projects may include expanding a gambling business with DraftKings, a delivery-only dining option similar to fellow influencer MrBeast’s Burger, and play-to-earn gaming which allows streamers to be paid.
FaZe Clan is expected to raise nearly $60 million in proceeds from the SPAC deal, according to market sources familiar with the deal, with current stockholders continuing to own 77% of the company after going public.
The creator economy is a growing force in the markets. The global market size is estimated to be over $13 billion, according to Statista, and is primarily focused on a younger generation.
FaZe Clan prides itself on capturing a younger audience, reporting that 80% is made up of 13 to 34-year-olds. 
“Gen-Z is not about your parents’ brands. Gen-Z wants connectivity and proximity,” Trink said. “We are the translators and what we do know is how to reach this audience,” he added. More

Two of the world’s biggest technology companies, Apple (AAPL) and Amazon (AMZN), are the subjects of fresh Wall Street research. We own shares of both, so we’re breaking down the analyst calls to see how well they gibe with our thinking as we approach their earnings releases next week. Morgan Stanley cautious on Apple ahead of earnings Investors may be getting Amazon’s core retail for free, says Jefferies 1. Morgan Stanley cautious on Apple ahead of earnings The news: One of the Club’s favorite analysts covering Apple expects its third-quarter results to come in lower than the Wall Street consensus when the iPhone maker reports July 28. Morgan Stanley’s Katy Huberty projects Apple to earn $1.10 per share on third-quarter sales of $80.6 billion. That compares to Street estimates of $1.16 per share and $82.5 billion in revenue. The firm also revised its price target to $180 per share, down from $185, and warned of “relatively guarded” macro commentary on the earnings call. Despite Huberty’s near-term caution, she’s hardly telling investors to stay away from the stock. In fact, she told clients to look for opportunities to buy Apple on any “pricing dislocations,” or dips to laypeople. Huberty maintains an overweight rating on the stock. “Apple remains a best of breed consumer electronics company able to invest through cycles, and with 60%+ of revenue more staples-like in nature, strong brand loyalty, and continued product/services innovation, we believe it is better insulated relative to peers during a downturn, which has resulted in 18 points of outperformance (vs. our coverage), on average, late in the economic cycle,” Huberty wrote. She’s referencing Morgan Stanley analysis that found Apple shares, historically, have gained 13% on average late in the economic cycle compared with a decline of 5% for the rest of the firm’s IT hardware companies. Those other companies include Dell Technologies (DELL) and Logitech (LOGI). Our take: This report struck us as a little mixed. But as for what to do with the stock, we hold an outlook similar to Morgan Stanley. As we communicated earlier in July during the Club’s “Monthly Meeting,” we are concerned Apple’s third-quarter results could be weak, which is in line with what Huberty is advising clients. Among our reasons for caution is Apple faced multiple Covid-related challenges in China in its third quarter. Those likely weighed on both supply and demand in the country, which is Apple’s second-biggest end market behind the U.S. All in all, Apple has warned it could see a sales hit between $4 to $8 billion in the third quarter because of supply constraints. Apple shares have had a nice little rally over the past month, up around 16% and outperforming the S & P 500’s nearly 8% gain in the same stretch. We continue to believe this is a name to own, not trade. However, for investors looking to add to their positions, we think it’s prudent to wait for weakness to do so, especially considering the stock’s recent strength and the upcoming earnings print. As Jim Cramer said on “Mad Money” earlier this week , “If you’re thinking about buying something that’s about to report, why not wait until you hear what they have to say?” 2. Investors may be getting Amazon’s core retail for free, says Jefferies The news: Jefferies analyst Brent Thill makes the case that Amazon’s current market valuation ascribes pretty much no value to the company’s core e-commerce operations. He explained his reasoning in a larger note, explaining that he sees Amazon shares “returning to outperformance in [second half of 2022] as top-line accelerates and profit improves, supported by a continuation of attractive growth at the highest margin businesses.” The analyst’s commentary on the retail business was particularly interesting. He arrived there using what’s known in finance as a sum-of-the-parts (SOTP) valuation. It basically values all the different parts of a company individually by applying multiples based on peer businesses, then adds them up to see what the entire enterprise could be worth. Amazon’s current market cap is just over $1.2 trillion. When Jefferies does its sum-of-the-parts valuation for Amazon, the firm determined the non-core retail divisions to be worth nearly $1.2 trillion: about $800 billion for Amazon Web Services, $328 billion for its advertising business and $40 billion for subscription services. “Our SOTP implies the current stock price is ascribing virtually zero value to Core-Retail, which is meaningfully below our Base Case estimate of $287B and results in a $29/share free option at AMZN’s current price,” Jefferies wrote. “This suggests the stock is already pricing-in meaningful headwinds from a recession/cost inflation, limiting downside and creating an attractive risk-reward.” Our take: We’ve warmed up to Amazon shares recently, believing the stock has almost seen enough pain. As we said last week discussing impressive Prime Day sales, we are tempted to upgrade our rating on Amazon from a 2 to 1, meaning we’d be buyers at its current levels. Our logic is not necessarily based on a sum-of-the-parts valuation like Jefferies employed. However, we are both looking closely at the retail side of things for Amazon. Stocks are forward-looking assets, and we think we’re approaching the point where the slowdown in retail sales is fully baked into Amazon shares. Amazon management still has work to do to correct some cost and over-expansion issues, and we should get an update next Thursday, July 28, when the company releases second-quarter earnings. But in general, we’re willing to be patient there. It’s not a one or two week process, and our big-picture reasons for owning Amazon — continued growth of cloud computing, benefiting AWS, and further e-commerce adoption — remain intact. (Jim Cramer’s Charitable Trust is long AAPL and AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

China’s smartphone market could decline in the second quarter as the country experiences a resurgence of covid cases, analysts said. But Apple could fare quite well, the analysts said as it continues to attract users in the high-end of the market.
Future Publishing | Future Publishing | Getty Images More

The Transportation Department recorded 2,413 complaints against U.S. airlines in May compared to only 814 in the same period in 2019.
DOT recorded more complaints and cases of mishandled wheelchairs and bags compared with last year.
On-time arrivals in May 2022 were similar to the same month in 2019.

Travelers at LaGuardia Airport (LGA) in the Queens borough of New York, US, on Friday, July 2, 2022.
Angus Mordant | Bloomberg | Getty Images

Staffing shortages. Delays. Lost luggage. Massive lines. High fares. Air travelers in 2022 have plenty to complain about.
By many measures travel is worse than last year, but here’s how this year’s problems compare with before the pandemic:

The U.S. Department of Transportation recorded 2,413 complaints against U.S. airlines in May, compared with only 814 in the same month of 2019, according to a report published Wednesday.
Complaints relating to flight cancellations, delays and missed connections more than doubled since before the pandemic.
Compliments for these airlines rose to two received in May, up from one in May 2019.

This past May, just 77.2% of flights to U.S. airports arrived on time, down from 77.9% in May of 2019.
These numbers, the latest available, don’t include the chaotic summer rush which has forced airlines like United, Delta and others to trim their schedules. The difficulties also prompted an intervention from the FAA over congestion in some of the country’s busiest airspace. American and United executives will face investors Thursday when they discuss their operations on quarterly earnings calls.
Delta on Wednesday sent members of its frequent flyer program 10,000 miles because of recent disruptions if those customers flights were cancelled or delayed more than three hours for trips from May 1 through the first week week of July.
“While we cannot recover the time lost or anxiety caused, we are automatically depositing 10K miles toward your SkyMiles account as a commitment to do better for you going forward and restore the Delta Difference you know we are capable of,” said the e-mail, a copy of which was seen by CNBC.
The DOT also recorded a jump in complaints about baggage with over 516 baggage-related issues reported in May 2022, up from 190 three years ago. However, the rate of mishandled bags — lost, damaged, delayed, or pilfered — are actually lower than the same month of 2019, with 0.56 out of 100 enplaned bags in May, down from 0.63 per 100 bags in May three years earlier.

Mishandlings of wheelchairs and scooters across the two periods was similarly steady. While total mishandlings increased by 159 incidents, the percentage of such occurrences was similar, at about 1.53% in May.
The rate and number of mishandled bags as well as wheelchairs and scooters, however, was up from last year.
Read the May 2022 report here, and the May 2019 report here.
– CNBC’s Leslie Josephs contributed to this report.

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