Business

Delta issued its forecast ahead of an investor presentation.
The airline expects revenue to return to 2019 levels this quarter, despite higher fuel costs.
Delta had trimmed its schedule in an effort to avoid further disruptions to its schedule.

Delta airplanes are seen at John F. Kennedy International Airport during the spread of the Omicron coronavirus variant in Queens, New York City, U.S., December 26, 2021.
Jeenah Moon | Reuters

Delta Air Lines expects its revenue to return to 2019 levels this quarter thanks to a surge in travel demand and higher fares that helped it cover a jump in fuel costs, the carrier said in a filing Wednesday.
The Atlanta-based airline updated its forecast less than a week after announcing it would trim its schedule to try and stem flight disruptions that impacted tens of thousands of passengers last month. The airline had been more conservative about expanding its schedule compared with competitors.

Still, hundreds of flights operated by Delta and other airlines were canceled or delayed over the key Memorial Day weekend.
Delta had previously forecast sales to be as much as 7% below pre-pandemic levels. The company also raised its margin outlook for the second quarter despite higher costs for fuel and other expenses.
Its shares were up more than 1% in premarket trading.
Consumers have shown they are willing to shell out more for airline tickets after holding off on travel for two years during the pandemic. In some cases, demand returned more quickly than carriers expected. That prompted airlines including Southwest, JetBlue, Spirit and Alaska to trim their schedules to account for challenges from staffing shortages and bad weather.
American Airlines has been more aggressive than Delta and United in restoring capacity to pre-pandemic levels. It said it flew 2.3 million passengers May 27-30 with a schedule that had 28% more flights than its closest competitor.

WATCH LIVEWATCH IN THE APP More

Nio’s sales were up just 4% year over year as the company struggled to build and deliver vehicles amid the latest Covid outbreaks.
Rivals XPeng and Li Auto, in less hard-hit regions of China, fared better.
Nio said orders remain strong and it expects improvements in June.

Nio began deliveries of its new ET7, an upscale electric sedan, on Monday, March 28, 2022.

Chinese electric vehicle maker Nio delivered more than 7,000 vehicles in May, up 4.7% from a year ago but well below its current production capacity, as Covid-related disruptions continued to limit the company’s manufacturing and its ability to deliver vehicles to customers.
Nio said in a statement that its manufacturing had been “gradually recovering” in May from pandemic-related disruptions, but that its ability to deliver vehicles was “still constrained to a certain extent” by lockdowns and other measures imposed to limit the spread of new Covid variants in some regions of China.

Nio is working with its suppliers to boost production in June, it said. It expects deliveries to rise as well, as those Covid-related restrictions have begun to ease.
New orders remain strong, the company said, although it didn’t provide specific numbers.
Not all of China’s emerging electric vehicle makers were hit as hard as Nio in May. Rival Xpeng said it was able to deliver 10,125 vehicles for the month, up 78% from a year ago, as it resumed two-shift production at its factory in mid-May.
XPeng is based in southern China, near the city of Guangzhou — an area that has fared better amid the recent Covid outbreaks than the region around Hefei, where Nio is based, several hundred miles north.
Another rival, Li Auto, said it was able to deliver about 11,500 vehicles in May, up over 160% from a year ago, despite pandemic-related disruptions at its suppliers in the Yangtze River region to its west. Li Auto is based in Changzhou, near Shanghai, on China’s coast.

WATCH LIVEWATCH IN THE APP More

Applications for a mortgage to purchase a home fell 1% last week compared with the previous week, according to the Mortgage Bankers Association.
Volume was 14% lower than the same week one year ago.
Prices continue to rise because there is still so little supply on the market, but different tiers of buyers are seeing different pictures.

A single family home is shown for sale in Encinitas, California.
Mike Blake | Reuters

Mortgage demand slipped to the lowest level since December 2018, even after rates declined slightly last week.
Applications for a mortgage to purchase a home fell 1% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 14% lower than the same week one year ago.

Despite a slight decline, mortgage rates are significantly higher than they were at the start of this year.
This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.33% from 5.46% with points dropping to 0.51 from 0.60 (including the origination fee) for loans with a 20% down payment.
“Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower,” said Joel Kan, an MBA economist.
Rising interest rates and steep gains in home prices are hitting affordability hard. Prices continue to rise because there is still so little supply on the market, but different tiers of buyers are seeing different pictures.
“Demand is high at the upper end of the market, and the supply and affordability challenges are not as detrimental to these borrowers as they are to first-time buyers,” Kan said.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 4.93% from 5.02%. Jumbo loans are mostly held in investor and bank portfolios, as opposed to being sold to Fannie Mae or Freddie Mac. Lenders see them as less risky given the higher credit quality of the borrower to whom they generally go. 
Applications to refinance a home loan, which are more sensitive to rate moves than purchase applications, fell 5% for the week and were 75% lower than the same week one year ago. Even as rates moved off their highs over the past few weeks, refinance demand hasn’t come back because so many borrowers already went through the process when rates were sitting at record lows last year.
Mortgage rates began this week higher, according to a read from Mortgage News Daily, due to volatility in global markets
“High inflation in Europe and and the easing of Covid-related lockdowns in China both took a toll on bonds,” wrote Matthew Graham, COO of Mortgage News Daily. 

WATCH LIVEWATCH IN THE APP More

Rimac raised 500 million euros from investors including SoftBank and Goldman Sachs.
Rimac has a growing list of big automaker clients who want help with high-end EVs, drawn by its super-quick $2.4 million Nevera electric hypercar.
The new funding will help Rimac build out its engineering and manufacturing capabilities to serve those automaker clients.

Rimac Nevera

Rimac Group, the Croatian company best known for its 1,900 horsepower Nevera electric sports car, said it has raised 500 million euros (about $537 million) from investors including Goldman Sachs, Porsche and a technology fund advised by Japan’s SoftBank.
The new funding round values Rimac at over 2 billion euros.

Rimac made headlines last year when it agreed to take a controlling interest in Bugatti, the ultra-exclusive French automaker that had long been part of the Volkswagen Group. As part of that deal, Bugatti and Rimac’s sports-car business were combined in a joint venture between Rimac and VW subsidiary Porsche, with Rimac holding a 55% stake.  
The new investment is expected to accelerate Rimac’s pivot away from its roots as a small-scale manufacturer of high-end electric sports cars. It will continue to manufacture the $2.4 million Nevera via the joint venture with Porsche, as well as a series of new models for Bugatti. But now it plans to focus much of its effort, and most of its fresh capital, on its Rimac Technology subsidiary, which develops and manufactures components for high-performance electric and hybrid vehicles made by other automakers.  
Rimac Technology has already attracted several big-name automaker clients — including Ferrari, Hyundai, Jaguar, Mercedes-Benz, Porsche and Renault — and past investments from both Hyundai and Porsche.
Rimac said it will use this new capital infusion to hire 700 new employees, to open a series of new offices in Europe, and to build out a new headquarters currently under construction near Zagreb, Croatia’s capital.
That new headquarters facility — which will include manufacturing and warehouse space as well as offices and laboratories — will be the largest building in Croatia when it is completed next year, CEO Mate Rimac told reporters in a briefing Tuesday.

WATCH LIVEWATCH IN THE APP More

The figure is up 13% from the NBA’s $1.4 billion in sponsorship revenue in the 2020-21 season.
Sponsorships include deals for arena-naming rights and for companies to put their names or logos on players’ jerseys.
Crypto partnerships are now the second most lucrative sponsorship category for the NBA, behind only the technology category.

In this photo illustration a Coinbase logo is displayed on a smartphone with a NBA logo in the background.
Thiago Prudencio | Sopa Images | Lightrocket | Getty Images

Cryptocurrency companies helped fuel the NBA’s sponsorship revenue to a record $1.6 billion in the 2021-22 season, according to estimates by IEG, a sports partnerships consultancy.
That’s up 13% from the $1.4 billion in the 2020-21 season. In the 2018-19 season, the National Basketball Association raked in $1.2 billion in sponsorship money. Sponsorship agreements can include deals for arena-naming rights and for companies to put their names or logos on players’ jerseys.

“The cryptocurrency category’s sponsorship sending spree is like nothing we have ever seen before,” said said Peter Laatz, IEG’s global managing director.
Crypto partnerships are now the second most lucrative sponsorship category for the NBA, behind only the technology category. Among the NBA’s crypto deals this season was a league agreement with crypto trading platform Coinbase. CNBC reported that the deal is worth $192 million over four years.
Other categories estimated to pay the NBA over $100 million annually include banks, telecom and merchandise, according to IEG. Companies spending at least $50 million include Anheuser-Busch, Pepsi, and AT&T.
Among the big four sports leagues, the NBA ranks third in sponsorship revenue. The NFL is No. 1 with nearly $2 billion in sponsorship deals for its 2021 season, according to IEG. And in March, CNBC reported MLB made $1.7 billion in sponsorships last season. The NHL secured $676 million in sponsorship money for the 2020-21 season.
IEG’s projections come as the NBA Finals are set to begin on Thursday, when the Golden State Warriors will host the Boston Celtics in Game 1 at Chase Center.

On the team front, the Los Angeles Lakers agreed to a 20-year arena-naming rights contract worth $700 million with platform Crypto.com. And the Warriors signed a $10 million global rights agreement with FTX, a crypto derivatives exchange. The company also secured arena naming rights for the Miami Heat.

Jayson Tatum #0 of the Boston Celtics drives to the basket during the game against the Golden State Warriors on March 16, 2022 at Chase Center in San Francisco, California.
Jed Jacobsohn | National Basketball Association | Getty Images

NBA jersey ads grow

Another category helping the NBA’s bottom line: ads on players’ jerseys.
The NBA is expected to bring in more than $200 million this season from jersey patch deals. They include the Brooklyn Nets securing $30 million a season from brokerage trading platform Webull in September 2021. The deal led the NBA at the time, but the Warriors overtook the top spot earlier this month when it renewed its deal with Japanese e-commerce company Rakuten.
The terms of that deal weren’t publicly undisclosed. But league sources told CNBC Rakuten will pay the Warriors north of $40 million annually. That’s up from $20 million for the previous deal.
The people spoke to CNBC on the condition of remaining anonymous because they’re restricted from publicly discussing team agreements.
Jersey sponsorships have expanded in pro leagues over the last year. The NHL, for example, added patches on uniforms and helmets during the pandemic. And the MLB approved team uniform patches in its new labor agreement with players in March of this year. The NFL doesn’t allow patches on uniforms.
Growing revenue from ads on uniforms and other sponsorship deals could help the NBA reach its projected $10 billion in total revenue this season. NBA Commissioner Adam Silver has said total revenue in the 2020-21 season was down about 35% from the previous year after the pandemic trimmed the season to just 72 games. Revenue in the 2019-20 season, which was also partially impacted by the pandemic, was $8.3 billion, down from $8.8 billion in 2018-19.
The league’s sponsorship revenue is expected is poised to keep growing.
The league’s data rights deal with Switzerland-based Sportradar — reportedly worth $1 billion — starts in the 2023-24 season. The NBA’s TV deal also expires after the 2024-25 season and sports executives expect that’ll eclipse its current $24 billion value, or roughly $2 billion per season. The NBA also has a merchandise deal with e-commerce powerhouse Fanatics and a deal with Dapper Labs, the creator of NBA Top Shot NFTs.
In league deals, companies also commit to buying advertisements for national NBA games.
For 2021-22 regular-season games, national ad spend on NBA games reached $470.7 million, according to media tracking company iSpot.  

WATCH LIVEWATCH IN THE APP More

The United Auto Workers union is accusing a new General Motors joint venture of denying access to workers to conduct a preliminary organizing vote.
GM leaders said in announcing the plant in 2019 that any organizing at such joint venture facilities would be up to workers to vote on.

Striking United Auto Workers members and supporters attend a speech by Vermont Sen. Bernie Sanders outside General Motors’ Detroit-Hamtramck Assembly plant on Sept. 25, 2019 in Detroit.
Michael Wayland / CNBC

DETROIT – The United Auto Workers union is accusing a new General Motors joint venture of denying access to workers to conduct a preliminary organizing vote.
UAW Vice President Terry Dittes, in a letter to union leaders Tuesday obtained by CNBC, said leaders of the joint venture between GM and LG Energy Solution, called Ultium Cells, have “flat out rejected” the union’s proposal of a “card check agreement” to assess interest in organizing.

Dittes said the agreement would allow union officials into the joint venture’s battery plant in Ohio to collect organizing cards, as one of the first steps to establishing UAW representation at the facility.
“This process has been agreed to by many employers for a smooth and peaceful recognition of the UAW,” Dittes said in the letter. “Ultium flat out rejected those simple basic features of a card check recognition we proposed.”
The UAW did not immediately respond for comment. GM referred questions to an Ultium spokeswoman, who confirmed the company has talked with the UAW about the process but no agreement has been reached.
“The UAW has expressed interest in representing a portion of the Ultium Cells workforce and we have had initial discussions around a Neutrality Agreement that could enable a card check process at our facility in Warren, Ohio,” Ultium spokeswoman Brooke Waid said in a statement. “We are, and always have been, supportive of the process that allows our people to determine their own representation status, which is a matter of personal choice.”
The contention comes amid a broader union organizing effort across the country, as workers from large corporations such as Starbucks and Amazon have sought to establish representation.

GM leaders said in announcing the plant in 2019 that any organizing at the company’s joint venture facilities would be up to workers to vote on. GM CEO Mary Barra has said the positions are expected to pay lower than top wages at the automaker’s assembly plants, however, will be “very good paying jobs.”
Ultium Cells has announced three U.S. facilities, though none have begun operations. The $2.3 billion Lordstown plant is expected to begin production in August. It is expected to create 1,100 jobs in Northeast Ohio. GM shuttered its nearby Lordstown Assembly plant in 2019, eliminating 1,700 hourly, UAW-represented jobs.
Dittes said in the letter to members the union has started an organizing drive for the facility, but additional details “cannot be disclosed at this time or made public.”
“We will represent the employees there and at all the future Ultium sites currently under construction,” Dittes said. “We will not be slowed down to organize workers who want to join our Union!”
Joint venture battery facilities are viewed as crucial for the labor union to grow and add members, as automakers such as GM transition to electric vehicles. The union’s organizing efforts also come ahead of a crucial leadership vote this summer as well as collective bargaining negotiations next year with GM, Ford Motor and Stellantis.

WATCH LIVEWATCH IN THE APP More

Russia’s invasion of Ukraine has altered the global oil trade.
EU leaders agreed to ban the majority of Russian crude imports, but even prior to the official action imports to Northwest Europe were down.
More Russian oil is now heading to nations including India and China.

European Union leaders reached an agreement this week to ban the majority of Russian crude oil and petroleum product imports, but nations were already shunning the country’s oil, altering global flows for the commodity that powers the world.
Russian oil exports had already been hurt by some EU members acting preemptively in anticipation of potential measures, in addition to bans from countries including the United States, according to commodity data firm Kpler.

The amount of Russian crude oil that’s “on the water” surged to nearly 80 million barrels this month, the firm noted, up from less than 30 million barrels prior to the Ukraine invasion.

“The rise in the volume of crude on the water is because more barrels are heading further afield —specifically to India and China,” said Matt Smith, lead oil analyst for the Americas at Kpler.
“Prior to the invasion of Ukraine, a lot more Russian crude was moving to nearby destinations in Northwest Europe instead,” he added.
Russia’s invasion of Ukraine at the end of February has sent energy markets reeling. Russia is the largest oil and products exporter in the world, and Europe is especially dependent on Russian fuel.
EU leaders had been debating a sixth round of sanctions for weeks, but a possible oil embargo became a sticking point. Hungary was among the nations that did not agree to a blanket ban. Prime Minister Viktor Orban, an ally of Russian President Vladimir Putin, said a ban on Russian energy would be an “atomic bomb” for Hungary’s economy.

Monday’s agreement among the bloc’s leaders targets Russian seaborne crude, leaving room for countries, including Hungary, to continue importing supplies via pipeline.
In March, oil prices surged to the highest level since 2008 as buyers fretted over energy availability, given the market’s already tight conditions. Demand has rebounded in the wake of the pandemic, while producers have kept output in check, which means prices were already rising prior to the invasion.
“Russia’s invasion of Ukraine has sparked an unraveling of how the global market historically sourced barrels,” RBC said Tuesday in a note to clients.
The International Energy Agency said in March that 3 million barrels per day of Russian oil output was at risk. Those estimates have since been revised lower, but data collected prior to the EU agreeing to ban Russian oil show that exports of Russian fuel into Northwest Europe had already fallen off a cliff.

But Russian oil is still finding a buyer, at least for now, as the country’s Urals crude trades at a discount to international benchmark Brent crude.
More oil than ever is heading to India and China, according to data from Kpler.

Wolfe Research echoed this point, saying that while Russian oil production has declined since the start of the war, exports have remained “surprisingly resilient.”
The firm said that Russia has rerouted exports to places including India, which shows up in vessel traffic through the Suez Canal. Analysts led by Sam Margolin noted that traffic through the key waterway is up 47% in May as compared with this time last year.
“Rerouting Black Sea tankers down Suez as opposed to Europe is a longer route and therefore inflationary to oil prices, and these ‘last resort’ trade patterns can portend bigger supply problems in the future because the market is clearly down to its last options to clear,” the firm said.
— CNBC’s Gabriel Cortes contributed reporting.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer explained technical analysis from veteran chartist Larry Williams that suggests the market’s recent rebound could last for the next few months.
“Larry Williams perfectly called the bottom the week before last. Now his analysis suggests we’ve got a lot more room to run,” Cramer said.
“He thinks this is not just a short-term bounce, it’s a move that could last through the end of August,” the “Mad Money” host said.

CNBC’s Jim Cramer explained technical analysis from veteran chartist Larry Williams that suggests the market’s recent rebound could last for the next few months.
“Larry Williams perfectly called the bottom the week before last. Now his analysis suggests we’ve got a lot more room to run. He thinks this is not just a short-term bounce, it’s a move that could last through the end of August,” the “Mad Money” host said.

The Dow Jones Industrial Average and the S&P 500 last week saw their best weekly gains since November 2020, though the three major indices, including the Nasdaq Composite, are well below their highs. 
To explain Williams’ analysis, Cramer first examined the monthly chart of the S&P 500 going back to 2008:

Arrows pointing outwards

The vertical red lines indicate moments where 95% of the index advanced, according to Cramer. He noted there were six instances since 2008 before last week, with each instance a buying opportunity.
“If history’s any guide, this kind of swift rebound should be a major inflection point for our beaten-down stock market,” he said. “According to Williams, we’re dealing with a very bullish situation here. In other words, he thinks last week’s gargantuan rally may be the beginning, not the end.”
Further supporting Williams’ prediction that the market’s rally will last is a 12-year cycle he’s noticed for rebounds in the Dow, Cramer said.

Here’s the chart:

Arrows pointing outwards

“The last time this 12-year cycle predicted a major move off the bottom was none other than 2010, which turned out to be an excellent time to buy. Now it’s 12 years later … we had a monster move last week,” Cramer said, adding Williams sees an “extremely bullish sign.”
Williams noticed yet another pattern  — this one a dominant 75-day cycle in the Dow — that shows that the market is due for a rally through Sept. 1, according to Cramer.

Arrows pointing outwards

“In short, he thinks it’s going to be a very nice summer,” the host said.
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Disclaimer

Questions for Cramer?Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer’s world? Hit him up!Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the “Mad Money” website? [email protected]

WATCH LIVEWATCH IN THE APP More