Business

U.S. egg prices jumped by two to three times in January.
Fatih Aktas | Anadolu Agency | Getty Images

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U.S. inflation is starting to bite again. But stocks mostly shrugged it off.

What you need to know today

January’s U.S. consumer price index rose 0.5%, higher than the 0.4% forecast by economists. On a year-over-year basis, prices increased 6.4%, compared with the expected 6.2%. Egg prices were still sky-high.

U.S. stocks closed Tuesday mixed. The Dow Jones Industrial Average and the S&P 500 edged lower, while the Nasdaq Composite rose. After a positive trading day, Asia-Pacific shares mostly ended lower, with only China’s Shanghai Composite and Shenzhen Component remaining in the green.

Yields of U.S. Treasurys climbed after a hotter-than-expected inflation report. The 6-month Treasury, notably, surged to close at 5.022%, its highest yield since July 2007.

PRO U.S. Treasury yields are popping again. The 10-year Treasury’s yield hit a five-week high this week, while the 2-year has risen 0.41 percentage points in February alone. This is how pros would play the market.

The bottom line

January’s hotter-than-expected CPI report cast a shadow over U.S. markets yesterday.
Prices in the U.S. last month increased faster than economists had anticipated; they were pushed up by higher food, energy and housing costs. Yet even the core CPI — which strips out the more volatile food and energy prices — saw a monthly bump of 0.4% and a year-over-year jump of 5.6%. Both exceeded respective estimates of 0.3% and 5.5%.  
Is the disinflationary process — in the words of Federal Reserve Chair Jerome Powell — still in play in the U.S.? January’s core CPI of 5.6% is a tiny notch lower than December’s 5.7%, which means that prices are still tapering off. But just barely.
U.S. markets reacted accordingly. Treasury yields rose, suggesting that investors are pricing in higher interest rate hikes by the Fed. Stocks fell. The Dow slipped 0.46% and the S&P dipped 0.03%. However, the Nasdaq, traditionally the most interest rate-sensitive index, closed 0.57% higher, buoyed by a 7.51% surge in Tesla and a 5.43% jump in Nvidia.
Though stocks mostly fell, they were remarkably resilient. A team at JPMorgan had forecast that the S&P would sink between 0.75% to 1.5% should yearly CPI come in at 6.4%. The actual drop in the index: only 0.03%.

The strange disconnect between bond markets and stock markets continues. Investors might be optimistic that consumer spending will remain strong even amid rising prices — as Coca Cola’s earnings report indicated — hence allowing the economy to keep growing. As for that theory, Wednesday’s U.S. retail sales report will put it to the test.
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Smart Tax Planning

The IRS has issued nearly 8 million refunds worth about $15.7 billion.
As of Feb. 3, the average refund amount was $1,963, down from $2,201 at the same time last year.
You can check the status of your refund with the “Where’s My Refund?” online tool or with the IRS2Go app.

Bill Oxford | E+ | Getty Images

Tax season is underway, and the IRS has issued nearly 8 million refunds worth about $15.7 billion as of Feb. 3, the agency reported.
The average refund amount was $1,963, down from last year’s average payment of $2,201 at the same point in the filing season. Of course, the average may change as the IRS processes millions more returns before the April 18 deadline.

While the agency warned refunds may be “somewhat lower” this season, experts say it’s still too early to know for sure.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

As of Feb. 3, the IRS had processed more than 16.7 million returns, 29% more than the previous year, according to the report released last Friday. The nearly 8 million refunds compare to around 4.3 million the previous year.
With almost 85% more refunds issued, the larger number of payments may be reducing the average refund size compared to last season’s payment, said Bill Smith, national director of tax technical services at CBIZ MHM’s national tax office.
Still, “it’s tough to draw too much of a conclusion over a relatively short period of time,” said Eric Bronnenkant, head of tax at Betterment, a digital investment advisor. 

The IRS expects to be more efficient this season

“I think the processing percentage is very telling,” said Smith, noting that the IRS might be more efficient without added pandemic duties and a smaller backlog of unprocessed returns.

The agency kicked off the tax season with a bigger customer service team and enhanced technology as it begins to deploy its nearly $80 billion in funding that Congress approved in August.  
“We have begun to see the light at the end of the tunnel,” National Taxpayer Advocate Erin Collins wrote in her January report to Congress. “I am just not sure how much further we have to travel before we see sunlight.”

How to get a faster tax refund

Smith said he’s curious to see how quickly refunds will reach electronic filers this season. “That’s the one statistic people really want to know,” he said.
Typically, you can expect refunds within 21 days when filing an error-free, electronic return with direct deposit for payment, according to the IRS.

You can avoid unnecessary delays by double-checking all the details on your return, including your address, Social Security number and direct deposit details, Bronnenkant said.  
You can check your refund status with the “Where’s My Refund?” online tool or through the IRS2Go app. But you’ll need to wait 24 hours after electronic filing your 2022 return, and three to four days after e-filing 2020 and 2021 returns. Paper returns may take up to four weeks for a status update.  More

Ford Motor has paused production and shipments of its electric F-150 Lightning pickup due to a potential battery issue.
The EV truck is being closely watched by investors, as it’s the first mainstream electric pickup on the market and a major launch for Ford.
The production halt adds to ongoing “execution issues” detailed to investors earlier this month by Ford CEO Jim Farley.

Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022 at the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC

DETROIT – Ford Motor has paused production and shipments of its electric F-150 Lightning pickup due to a potential battery issue, the company said Tuesday.
Ford spokeswoman Emma Bergg declined to disclose details of the possible battery issue, which is being investigated after a vehicle displayed a potential problem as part of the automaker’s pre-delivery quality inspections.

The stop-shipment order and halt in production was issued at the beginning of last week, according to Bergg. It adds to ongoing “execution issues” detailed to investors earlier this month by Ford CEO Jim Farley that crippled the automaker’s fourth-quarter earnings.
Shares of Ford were down about 1% in midafternoon trading Tuesday. The stock was trading for under $13 a share.
Ford has not established a timeline for when production and the shipments will resume, according to Bergg.
“The team is diligently working on the root cause analysis,” she said, adding the company is “doing the right thing by our customers” to resolve any potential issues before resuming production and shipments.

Ford is unaware of any incidents or issues associated with the potential battery issue, Bergg said. There is no stop-sale for vehicles already on dealer lots, meaning dealers can continue to sell vehicles they have on hand.

The halt in production and shipments was first reported Tuesday by Motor Authority.
The F-150 Lightning is being closely watched by investors, as it’s the first mainstream electric pickup truck on the market and a major launch for Ford.
Automakers routinely have issues and recalls associated with vehicles but problems with batteries are of particular concern and interest, as the automakers invest billions of dollars in the vehicles.
One of the most notable issues has been with General Motors’ Chevrolet Bolt EVs. The Detroit automaker two years ago had to recall all of the vehicles built up until then to address fire issues caused by “rare manufacturing defects” at facilities of its battery supplier LG Battery Solution.
Separate from the F-150 Lightning downtime, production of the traditional F-150 pickup trucks will also be down one shift Wednesday, Ford confirmed Tuesday to CNBC.
The production shift, as well as one for the company’s Transit vans, will be canceled to allow workers at the company’s Kansas City Assembly plant to attend the Super Bowl celebration for the Kansas City Chiefs, according to a memo from the plant’s manager confirmed by Ford.
Night shifts at the plant will resume as scheduled, according to the memo and automaker.

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FanDuel parent Flutter Entertainment is considering listing on a U.S. stock exchange.
FanDuel said it accepted 50,000 bets per minute at its peak during Super Bowl LVII.
Flutter expects a lot more growth in the United States. It and puts the total addressable market at more than $40 billion by 2030.

In this photo illustration the FanDuel logo of a sports betting company is seen on a smartphone.
Pavlo Gonchar| Lightrocket | Getty Images

FanDuel parent Flutter Entertainment said Tuesday it is considering listing on a U.S. stock exchange.
The company said its board is consulting with shareholders to gauge their interest.

The development comes two days after a record Super Bowl for betting. FanDuel said it accepted 50,000 bets per minute at its peak, averaging 2 million active users on its platform during the game.
FanDuel is the nation’s sports betting market leader and is on track for full-year profitability in 2023, according to the company. Its $3 billion in annual revenue makes up the biggest segment of Flutter’s overall business. The company also owns Paddy Power and Betfair, well-known gambling platforms internationally.
Flutter is based in Ireland, and its stock is traded in Europe. A U.S. listing would also expose Flutter to new American investors. Jefferies analysts said it would command a premium, “as market leader in the larger global online gambling market.”
Flutter said an additional listing in the U.S. would elevate its brand and help the company attract and retain talent. Flutter said a listing would provide liquidity and access to deeper capital markets.
“When DraftKings was trading near its all-time highs, there was significant pressure from Flutter shareholders to spin off FanDuel in a U.S. IPO,” said Lloyd Danzig, managing partner of Sharp Alpha Advisors, “to take advantage of the premium multiple that it appeared the market was placing on a US-based digital gaming business.”

When valuations and multiples plummeted, the speculation over a FanDuel IPO cooled.

Jeffrey Kamys, chief investment strategist for the iBet ETF, said the decline hurt a lot of gaming companies that got lumped in with DraftKings. But he predicted that a public listing for FanDuel would lift the entire sports betting industry.
“FanDuel would be the Apple of our industry,” Kamys said. “It would be our top holding if they went public.”
In November, at an investor meeting in Manhattan, Flutter CEO Peter Jackson was asked about a potential FanDuel IPO in the U.S. He said there was more retail involvement and engagement in the U.S. markets. “It is one of the things that we consider when we look at the benefits that DraftKings have from their listing is that they have got a lot of their customers able to trade their stock.”
Jackson said Flutter was considering “listing of a small stake in the business and it would remain a controlled subsidiary.”
Tuesday’s announcement makes it clear the parent company is interested in taking advantage of a U.S. public listing, with markets heating up and the cost of capital elevated.
Sharp Alpha’s Danzig said “a U.S. listing is a perfectly sensible way to increase the company’s stature among U.S. investors and provide more robust access to capital to support growth initiatives.”
Flutter expects a lot more growth in the United States. It and puts the total addressable market at more than $40 billion by 2030. That would more than three times bigger than the rest of the world, according Jefferies.
“Flutter’s been the market share leader in the U.S. Getting stock credit for that is what the endeavor is all about,” Jefferies analyst David Katz told CNBC. He predicts a lift for all sports betting stocks if Flutter moves forward, as an expression of confidence in the industry which was pummeled in 2022.
Flutter cautioned that its consultation with shareholders is a preliminary step. If the company moves forward, it would need 75% shareholder support in a vote.
Correction: This story was updated to reflect corrected information from FanDuel about bets per minute on Super Bowl Sunday.

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Ford Motor (F)’s decision to halt production and shipments of its electric pickup truck further undermines our confidence in the automaker. We have little patience left for more missteps and are ready to ditch this long-held holding if there isn’t a significant turnaround this quarter. The company on Tuesday announced it had issued a stop-shipment order and pause in production last week for its electric F-150 Lightning pickup, the result of a potential battery issue. The announcement comes just a day after Ford said it plans to collaborate with Chinese supplier Contemporary Amperex Technology Co. on a new $3.5 billion battery plant for electric vehicles (EV) in Michigan — a move meant to help scale up production. Ford delivered messy fourth-quarter results just under two weeks ago that disappointed investors like us and sent shares tumbling. CEO Jim Farley said the weak earnings were a function of the automaker’s transition to a new business structure that limited production capacity, combined with poor execution. Last year, Ford announced a split of its electric vehicle and internal combustion engine vehicles into separate business units, called Ford Model e and Ford Blue, respectively. Farley told CNBC earlier this month that Ford is still working through higher-than-expected costs, a shortage of semiconductor chips and supply chain snags in order to achieve better profits at its EV division. In late January, Ford said it was cutting prices of its electric Mustang Mach-E crossover , while raising production, weeks after EV industry leader Tesla (TSLA) made a similar move. Shares of Ford slide more than 1% in afternoon trading Tuesday, to $12.94 a share. The Club take Following Ford’s fourth-quarter results on Feb. 3, Jim Cramer drew a line in the sand. “It’s inexcusable that Ford had a bad quarter,” Jim said at the time. “We will boot the stock if this quarter isn’t good,” he added. A battery problem is particularly troubling given Ford is betting its future on EVs, but can’t make the vehicles fast enough to meet consumer demand. We’ve given management one more quarter to get it right. But if Farley can’t demonstrate serious progress when the company reports first-quarter earnings, we’ll have no choice but to move on from the stock. (Jim Cramer’s Charitable Trust is long F. 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.

Ford CEO Jim Farley pats a Ford F-150 Lightning truck before announcing at a press conference that Ford Motor Company will be partnering with the world’s largest battery company, a China-based company called Contemporary Amperex Technology, to create an electric-vehicle battery plant in Marshall, Michigan, on February 13, 2023 in Romulus, Michigan.
Bill Pugliano | Getty Images News | Getty Images

Ford Motor (F)’s decision to halt production and shipments of its electric pickup truck further undermines our confidence in the automaker. We have little patience left for more missteps and are ready to ditch this long-held holding if there isn’t a significant turnaround this quarter. More

Last summer European leaders began hearing a huge sucking sound. The source of the din? The Inflation Reduction Act (IRA), a 725-page doorstopper of legislation passed in August to speed up American decarbonisation. Europe’s budding clean-tech industry, they feared, would be hoovered up across the Atlantic by the promise of handouts, which amount to around $400bn over ten years. To stop this from happening, some EU politicians argued, the bloc would have at the very least to match the IRA’s sums.So far the noise has turned out to be mostly in the politicians’ heads. Worries about a green exodus, bordering on panic in some quarters, have subsided. When the continent’s heads of government gathered for a summit last week in Brussels, they did not shower billions of euros more on the EU’s greening efforts—which are already, it turns out, comparable to the IRA in their generosity. Nor did they (for the time being) further water down rules against state aid to favoured businesses, which would have given freer rein to member states keen to splurge. Instead, they focused on making the system for doling out this money more efficient. This is music to the ears of Europa SA. In the eyes of its European fans, the beauty of the IRA is less its size than its simplicity. Rules are the same all over America. Getting tax credits, grants or soft loans will be straightforward provided a firm meets certain criteria, such as investing in one of the targeted sectors. The law sets aside sums for specific technologies, which can create markets, such as solar energy, carbon capture and storage and “green” hydrogen, made from renewable power (see chart). Producers of such hydrogen, for example, can get tax credits of up to $3 per kilogram of the gas.Replicating this set-up exactly would be unthinkable in Europe. The EU may see itself as an ever-closer union, but taxes are still a national affair, which rules out continent-wide tax incentives. If member states want to institute their own credits, or other forms of subsidies, they typically need the approval of the European Commission in Brussels, whose job it is to ensure a level playing field in the EU’s single market. To the resulting cacophony of national schemes, the EU has in recent years added a few bloc-wide grant programmes, such as InvestEU and Innovation Fund, to support clean tech.The upshot is ear-splitting, particularly for smaller green-tech firms in need of funds to scale up their projects, says Craig Douglas of World Fund, a venture-capital firm, who has a long experience in dealing with the EU’s subsidy bureaucracy. To have a chance at tapping one of the many pots, startups often have to hire pricey consultancies to help them write grant proposals. “We would need at least four people full-time to figure this out,” explains Vaitea Cowan, co-founder of Enapter, a maker of electrolysers, machines that produce hydrogen. Once an application is filed, it often takes months, if not years, before a decision is made. In the case of Plastic Energy, which recycles plastic waste, it once took so long that “we had to file again because the delay made us miss a deadline”, reports Carlos Monreal, the firm’s chief executive. And decisions tend to come without explanation. “It’s a black box. There should be a dialogue,” says Henrik Henriksson, boss of H2 Green Steel, which is erecting a steel mill in northern Sweden that is powered by green hydrogen. The EU’s green subsidies are also often poorly targeted. Jules Besnainou of Cleantech for Europe, a lobby group, points out that most of the European money does not go to the continent’s startups, which tend to be more innovative, but to big established firms, which do not always need government support.The commission’s draft “Green Deal Industrial Plan”, unveiled on February 1st, tries to deal with these shortcomings. The plan is meant to simplify the EU programmes and streamline the approval of national green-finance tools in Brussels. It proposes an “administratively light” auction, the winners of which will receive a premium, based on their bids, for each kilogram of renewable hydrogen produced over ten years. The scheme will offer incentive to the tune of €800m ($860m). The IRA has clearly shocked the EU into thinking harder about its green subsidies, says Jeromin Zettelmeyer, who heads Bruegel, a think-tank in Brussels. That may be so. Still, those who have read the eight pages dedicated to “speeding up access to finance”, which mention no fewer than a dozen different acronym-rich programmes, may be excused for not holding their breath. Claudio Spadacini, CEO of Energy Dome, an Italian firm which uses liquid carbon-dioxide to store energy, approves of the EU’s moves but still hopes to take advantage of the IRA. Ms Cowan of Enapter, whose firm has just built a factory in Germany, is getting lots of calls from American state governments since the IRA was passed. “They are rolling out the red carpet,” she says. Whoosh. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Sandwich giant Subway confirmed Tuesday it is exploring a possible sale.
The company has hired JPMorgan as advisors during the sale exploration.
Subway, which has over 37,000 restaurants in more than 100 countries, said earlier this month its same-store sales climbed 9.2% last year.

In this photo illustration, a Subway sandwich is seen on a table at a Subway restaurant on January 12, 2023 in Austin, Texas.
Brandon Bell | Getty Images

Sandwich giant Subway confirmed Tuesday it is exploring a possible sale.
A deal could value the chain at more than $10 billion, according to an article last month from The Wall Street Journal, which first reported the company had hired advisors to explore a sale.

Subway said Tuesday that JPMorgan is advising the Connecticut-based company and will conduct the sale exploration process. The company didn’t outline any timing and cautioned the process may not result in a sale.
“The management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience,” Subway said in the release.
Subway, which has over 37,000 restaurants in more than 100 countries, said earlier this month its same-store sales climbed 9.2% last year. Same-store sales at North American locations jumped 7.8% in 2022, Subway said, surpassing decade-old average weekly sales records.
Subway is not required to disclose its financial results as it is privately owned, but has recently shared sales updates as it undergoes a turnaround effort.
The company has reported eight consecutive quarters of sales growth, it said in a release earlier this month. Digital sales have more than tripled since 2019. The improvements mark a stark reversal after years of sales declines.

Subway is also operating in a smaller footprint: The company’s location count fell 22% from 2015 to 2021. It plans to remodel 3,600 North American locations and improve franchisee profitability this year, CNBC previously reported.
The foundation for Subway co-founder Peter Buck, who died in November 2021, announced he left his 50% ownership to the organization, meaning it will soon be half-owned by a charity. It is unclear if that will impact a potential sale.
— CNBC’s Amelia Lucas contributed to this report.

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Production of Alec Baldwin’s “Rust,” which has been marred by the shooting death of cinematographer Halyna Hutchins, is set to resume this spring.
Hutchins was killed by a bullet from a gun Baldwin was holding in 2021. Baldwin is facing civil action and criminal charges over it.
Matthew Hutchins will also serve as an executive producer of a new documentary on his late wife’s life and work.

In this image from video released by the Santa Fe County Sheriff’s Office, Alec Baldwin stands in costume and speaks with investigators following a fatal shooting last year on a movie set in Santa Fe, N.M. on Friday, Nov. 11, 2022
Santa Fe County Sheriff’s Office

Production of Alec Baldwin’s “Rust,” which has been marred by the shooting death of cinematographer Halyna Hutchins, is set to resume this spring, the producers said Tuesday.
Hutchins was killed by a bullet from a gun Baldwin was holding in 2021. Baldwin is facing civil action and criminal charges over it.

Matthew Hutchins, the widower of Halyna Hutchins, will join as an executive producer on the movie, along with the original producers. Bianca Cline, the cinematographer for the Oscar-nominated “Marcel the Shell with Shoes On,” will take over as the “Rust” cinematographer. Cline is donating her salary to a charity in honor of Hutchins and says she will aim to complete the original vision.
Matthew Hutchins will also serve as an executive producer of a new documentary on his late wife’s life and work.
The “Rust” production company has hired new “safety officers” to help oversee filming and said it will not allow any working weapons or any form of ammunition on set.
“Rust” director Joel Souza, who was shot in the shoulder by the same bullet that killed Hutchins, will stay in his role, along with the original stunt coordinator, costume designer and other crew members.
“Though bittersweet, I am grateful that a brilliant and dedicated new production team joining former cast and crew are committed to completing what Halyna and I started,” said Souza.

The producers had been originally planned to resume filming in January after settling a lawsuit with Matthew Hutchins, which led to his becoming a producer on the film. Halyna Hutchins’ mother, father, and sister filed a separate civil suit against Baldwin last week, which Matthew is not directly involved in.
Baldwin and the film’s armorer Hannah Gutierrez-Reed both face involuntary manslaughter charges filed by Santa Fe prosecutors. The prosecution alleges that Baldwin was “distracted” during necessary gun trainings and that Gutierrez-Reed knew he did not adequately participate. Most recently, Baldwin’s attorneys filed to try and reduce the penalties of his charges.
The next hearing in the criminal case is set for Feb. 24.

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