Business

Home prices are still higher than they were a year ago, but gains are shrinking at the fastest pace on record, according to S&P Case-Shiller.
Prices in August were 13% higher nationally compared with August 2021.
That is down from a 15.6% annual gain in the previous month.

House for Sale by Owner, Forest Hills, Queens, New York.
Lindsey Nicholson | UCG | Universal Images Group | Getty Images

Home prices are still higher than they were a year ago, but gains are shrinking at the fastest pace on record, according to one key metric, as the housing market struggles under sharply higher interest rates.
Prices in August were 13% higher nationally compared with August 2021, according to the S&P CoreLogic Case-Shiller Home Price Index. That is down from a 15.6% annual gain in the previous month. The 2.6% difference in those monthly comparisons is the largest in the history of the index, which was launched in 1987, meaning price gains are decelerating at a record pace.

The 10-city composite, which tracks the biggest housing markets in the United States, rose 12.1% year over year in August, versus a 14.9% gain in July. The 20-city composite, which includes a broader array of metropolitan areas, was up 13.1%, compared with a 16% increase the prior month.
“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” wrote Craig Lazzara, Managing Director at S&P DJI in a release. “Price gains decelerated in every one of our 20 cities. These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.”
Leading the price gains in August were Miami, Tampa and Charlotte, with year-over-year increases of 28.6%, 28% and 21.3%, respectively. All 20 cities reported lower price increases in the year ending in August versus the year ending in July.
The West Coast, which includes some of the costliest housing markets, saw the largest monthly declines, with San Francisco (-4.3%), Seattle (-3.9%) and San Diego (-2.8%) falling the most.
A quick jump in mortgage rates from record lows this year has turned the once red-hot housing market on its heels. The average rate on the popular 30-year fixed home loan started this year right around 3%. By June it stretched over 6% and is now just over 7%, according to Mortgage News Daily.

“With monthly mortgage payments 75% higher than last year, many first-time buyers are locked-out of housing markets, unable to find homes with budgets that have lost $100,000 in purchasing power this year,” said George Ratiu, senior economist at Realtor.com.
He also noted that higher home prices combined with higher interest rates are keeping would-be sellers from listing their homes. They appear to be locked in to their lower rates.

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The German sportswear giant had faced pressure from the public and its own employees to cut ties with Ye.
Adidas said this would have a short-term negative impact of up to 250 million euros ($246 million) on net income in 2022 due to high seasonality in the fourth quarter.
Talent agency CAA confirmed it had dropped Ye as a client Monday, and he was let go by Balenciaga last week.

Adidas on Tuesday ended its partnership with Ye, formerly known as Kanye West, after the musician made a series of offensive and antisemitic comments.
Adidas said in a statement: “Adidas does not tolerate antisemitism and any other sort of hate speech. Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”

“After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies. Adidas will stop the Adidas Yeezy business with immediate effect.”
It said this would have a short-term negative impact of up to 250 million euros ($246 million) on net income in 2022 due to high seasonality in the fourth quarter.
It added that it was the “sole owner of all design rights to existing products as well as previous and new colorways under the partnership” and would provide more information during third quarter earnings on Nov. 9.
The German sportswear giant had faced pressure from the public and its own employees to cut ties with Ye, who said on a podcast on Oct. 16: “I can say anti-Semitic things, and Adidas can’t drop me. Now what?”
Calls on Adidas had also come from at least three legal organizations, as well as anti-racism groups. A Change.org petition set up by the Campaign Against Antisemitism urging Adidas to sever ties with Ye had gathered 169,100 signatures by Tuesday morning.

Talent agency CAA confirmed it had dropped Ye as a client Monday, and he was let go by Balenciaga last week.
Twitter and Instagram blocked him over antisemitic remarks. Conservative social media platform Parler then announced Ye had agreed to buy it.
CNBC has contacted representatives for Ye and has yet to receive a reply.

Shares fall

Adidas fell 4% in morning trading in Frankfurt, Germany, after Bloomberg reported early in the day it was planning to end the partnership.
The company began a review of the partnership on Oct. 6 but had been widely criticized for its inaction since then.

In a LinkedIn post Monday, U.S.-based Adidas employee Sarah Camhi wrote, “It’s been 14 days since Kanye started spewing anti-Semitic rhetoric and adidas has remained quiet; both internally to employees as well as externally to our customers.”
The director for trade marketing added: “We need to do better as a brand. We need to do better for our employees and we need to do better for our communities. Until adidas takes a stand, I will not stand with Adidas.”
The German company began working with Ye in 2013, and in 2016 signed a deal to manufacture and distribute items from his Yeezy clothing line. Adidas has previously said the partnership has had a “tremendous impact” on its business and is one of the most successful collaborations in the history of its industry.
However, Ye has publicly criticized Adidas, along with some of his other corporate partners such as retailer Gap, in recent months.
He told CNBC that Adidas was “copying” his ideas, and also posted social media tirades against the company, specifically targeting Chief Executive Kasper Rorsted and board members.
The Yeezy brand makes nearly $2 billion a year for Adidas, 10% of its revenue, according to Morningstar analyst David Swartz.
“It has been an important product line for Adidas and has helped bring its North America business back to relevance. It has made Adidas relevant in the collectors’ market and probably allows it to reach a demo that it has missed,” Swartz previously told CNBC.
“Adidas struggles to compete with Nike for top sponsorships, so Yeezy was one big advantage,” he added.
In a note Tuesday ahead of the announcement, analysts at Credit Suisse laid out various risks to the company, including a recent profit warning that was greater than expected.
— CNBC’s Jessica Golden contributed to this report

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FA Playbook

In many ways, the highs and lows of fantasy football remind me of how many people approach investing.
Building a stable investment foundation is key to help minimize bad outcomes and positioning for the potential rewards in the capital markets.
How to do that? Understand the impact of your decisions, think long-term, know your investments and work with a financial advisor.

Kikoncos | Getty Images

It’s Sunday morning, and my kids are checking player reports to evaluate their fantasy football lineups. They chatter about wins and losses from the previous week and rumors about a reserve player that looks ripe for a break-out.
During the NFL games, they check their phones for player stats to determine how their teams are performing.

It’s fun to watch them test their player picking skills on NFL Sunday — and throughout the afternoon, they experience a full range of emotions. In many ways, the highs and lows of fantasy football remind me of how many people approach investing.
The global fantasy sports market has exploded in recent years. One reason is that the younger population is growing and has ready access to digital infrastructure, affordable smartphones and fantasy sports apps.

More from FA Playbook:

Here’s a look at other stories impacting the financial advisor business.

Could a similar trend be driving younger investors to speculate in the financial markets?
Today, stock trading programs sit alongside fantasy-sports apps in our smartphones, offering easy access to stock or cryptocurrency trading — and sometimes faster than it would take to pick up a new tight end or place a bet on Sunday morning. But with your investment portfolio, the fantasy can only go so far and the stakes can be much higher.
This may be a good time to think about the difference between speculating and long-term investing — and recognize that your investment decisions have real and lasting consequences. Building a stable investment foundation is key to help minimize bad outcomes and positioning for the potential rewards in the capital markets.

4 steps towards financial prudence

Here are four ways to help ensure you’re making prudent financial decisions:

Understand the impact of your decisions: It may be easy to get caught up in using convenient, digital platforms to pick stocks or time markets. But without a solid investment philosophy, everyone runs a greater risk of getting caught up in the emotional roller coaster of speculation. Convenience and instant gratification are poor substitutes for a strategic, long-term investment approach guided by proven market principles and decades of research into asset behavior and portfolio design.
Think long term: The NFL fantasy football season lasts just a few months. That’s not the same as taking a lifetime view of accumulating and managing wealth. Your investment decisions should be based on a time horizon that matches your goals. Speculating on individual stocks or industry sectors encourages a short-term mindset that can be easily jarred by unpleasant surprises. Investing involves a longer-term perspective that rests upon an historical understanding of markets.
Know your investments: Digital platforms can give access to an ever-expanding range of alternative investments, from cryptocurrency to single-stock exchange-traded funds. To pursue good outcomes, it’s critical to understand the characteristics of stocks, bonds, real estate, and other asset groups — and their specific role in your portfolio. This means evaluating an investment’s expected returns, range of risks and potential costs.
Seek out a qualified financial advisor: One way to create and manage an investment plan is to enlist a professional. Working with a financial advisor can help outline clear financial goals and make investments that are contributing to those goals, instead of simply gambling on the market. An advisor can also help you focus on controllable factors, such as diversification, portfolio rebalancing and tax management. Daily market moves are beyond anyone’s control, but you can choose how to react in a tough market.

Investing is not a game, and it shouldn’t be treated like one. So, sit back and enjoy the rest of the NFL season. If that fantasy league makes it all more interesting, so much the better.
Just understand where in life you can afford to lose — and where you cannot. Financial security is built over years, even decades. Not on any given Sunday.
With a solid investment plan and discipline to match it, you can pursue long-term success without the anxiety and emotions that come with speculation.
— By Dave Butler, Co-CEO at Dimensional Fund Advisors More

General Motors easily beat Wall Street’s earnings expectations during the third quarter, while slightly missing on revenue.
GM did not adjust its guidance for the year.
GM CEO Mary Barra on Tuesday said the company is “actively managing the headwinds we face.”

DETROIT – General Motors easily beat Wall Street’s earnings expectations during the third quarter, while signaling caution and confirming its full-year results are likely to come in near the “mid-point” of its previously announced forecast.
The Detroit automaker on Tuesday stressed that demand for its products remains strong despite outside economic concerns and rising interest rates. But its profits narrowed in the third quarter, as its vehicle inventory slowly rises from record lows.

Here’s how GM performed, compared with analysts estimates as compiled by Refinitiv:

Adjusted earnings per share: $2.25 vs. $1.88
Revenue: $41.89 billion vs. $42.22 billion

The big beat and narrow miss on the top line has been a trend throughout the coronavirus pandemic for the automaker, as tight supplies of vehicles have led to lower sales but higher profits on in-demand SUVs and pickup trucks.
Despite the bottom-line beat, GM did not adjust its guidance for the year as profit margins narrowed. The company expects full-year net income of between $9.6 billion and $11.2 billion and adjusted earnings before interest and taxes of between $13 billion and $15 billion, or $6.50 and $7.50 per share.
GM CFO Paul Jacobson said the company expects to hit the “mid-point” of its earnings guidance for the year. He said the automaker is not ignoring outside economic concerns but has not seen “any direct impact” on its products.
“We’re going to continue to be agile,” he told reporters during a media call. “We continue to see that strong demand.”

His comments echoed those of GM CEO Mary Barra in a letter to shareholders Tuesday. She said the company reaffirmed its guidance “despite a challenging environment because demand continues to be strong for GM products and we are actively managing the headwinds we face.”
Shares of the automaker were up about 4% in premarket trading following the company’s quarterly report.
Most investors were expected to look past the Detroit automaker’s results in favor of any change in guidance or comments regarding larger economic issues. Inflation in particular has already dominated the conversation on Wall Street at the start to earnings season.
The auto industry’s earnings and forecasts are being closely watched by investors for any signs that consumer demand could be weakening amid rising interest rates and looming recession fears.
Jacobson said the automaker has completed about 75% of the 95,000 vehicles in its inventory that were manufactured without certain components as of June 30. GM said it expects that “substantially all of these vehicles” will be completed and sold to dealers before the end of 2022.
For the third quarter, GM reported adjusted net income of $4.3 billion, up from $2.9 billion a year earlier. Its adjusted profit margin for the quarter narrowed to 10.2% compared with 10.7% during the third quarter of 2021.
On an unadjusted basis, net income was $3.3 billion, up $885 million from a year earlier. The company’s earnings powerhouse, as it has been, was North America with adjusted earnings of $3.9 billion, up from $2.1 billion a year earlier. Earnings also increased $60 million in China compared with the third quarter of 2021, while the company’s financial arm saw its earnings drop to $911 million, down $182 million from a year earlier.
Jacobson brushed off any concerns about slowing growth and pricing concerns in China, the world’s largest vehicle market. He described it as an “important market” but not “decisive” to its financial performance, despite being GM’s top sales market.
GM Financial’s lower earnings follow strong results throughout the coronavirus pandemic, as consumers, up until recently, easily financed vehicles amid low interest rates and record-high prices.
Jacobson said the company has expected GM Financial’s earnings to decline from their record highs but said the business is expected to continue to perform well.
“We still see a lot of goodness out of GM Financial, and the team has done a great job, positioning their credit portfolio to weather any storm that we might see,” he said.
Cruise, GM’s majority-owned autonomous vehicle subsidiary, has lost $1.4 billion through September, including $500 million in the third quarter. The company started offering fared rides in self-driving vehicles earlier this year.
GM on Tuesday also announced it will host an investor day webcast on Nov. 17.

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A Russian court denied WNBA star Brittney Griner’s appeal on Tuesday after the American athlete was convicted on drug charges earlier this year.
Griner, who plays professional basketball in Russia during the WNBA offseason, was arrested in February after Russian authorities found vape canisters containing cannabis oil in her luggage.
In August, Griner was sentenced to nine years in prison.
Griner’s lawyers told NBC News before the hearing that the two-time Olympic gold medalist is “quite pessimistic” that the judge will overrule the court’s original verdict.

US’ Women’s National Basketball Association (NBA) basketball player Brittney Griner, who was detained at Moscow’s Sheremetyevo airport and later charged with illegal possession of cannabis, stands inside a defendants’ cage before a court hearing in Khimki outside Moscow, on August 4, 2022. 
Evgenia Novozhenina | AFP | Getty Images

WASHINGTON — A Russian court denied WNBA star Brittney Griner’s appeal on Tuesday after the American athlete was convicted on drug charges earlier this year.
Griner has about eight years left on her sentence though another appeal is possible through Russia’s court of cassation, the highest court of appeals.

Griner’s lawyers told NBC News before the hearing that the two-time Olympic gold medalist is “quite pessimistic” that the judge will overrule the court’s original verdict.
“She hopes there will be some reduction in her sentence,” Maria Blagovolina, Griner’s lawyer, told Andrea Mitchell of NBC News, adding the 32-year-old athlete will appear in court via video conference.
Griner, who plays professional basketball in Russia during the WNBA offseason, was arrested in February after Russian authorities found vape canisters containing cannabis oil in her luggage at Moscow’s Sheremetyevo Airport.
Her lawyers said Griner only uses cannabis medically and unintentionally packed the cannabis canisters in her suitcase because the professional athlete was in a hurry.
Under Russian law, the charge carried a penalty of up to 10 years in prison. In August, Griner was found guilty and sentenced to nine years. She was also ordered to pay 1 million rubles, approximately $16,301.

The court’s decision came as the Biden administration scrambled to secure her release.
A week before the verdict, the Biden administration confirmed it made an offer to the Russian government for the release of Griner and the former U.S. Marine Paul Whelan.

‘I’m terrified I might be here forever’

US WNBA basketball superstar Brittney Griner stands inside a defendants’ cage before a hearing at the Khimki Court, outside Moscow on July 26, 2022. 
Alexander Zemlianichenko | AFP | Getty Images

Days before she pleaded guilty last month, Griner wrote a letter to President Joe Biden asking for his direct help with her case.
“I sit here in a Russian prison, alone with my thoughts and without the protection of my wife, family, friends, Olympic jersey, or any accomplishments, I’m terrified I might be here forever,” the professional athlete wrote in a July 5 letter.
“I realize you are dealing with so much, but please don’t forget about me and … other American detainees. Please do all you can to bring us home,” Griner wrote.
After receiving the letter, Biden and Vice President Kamala Harris called the WNBA star’s wife, Cherelle Griner. Biden also wrote a response to Griner that U.S. diplomats hand-delivered in Moscow.
Biden reassured her wife that he is working to secure Griner’s release as soon as possible, according to a White House readout of the call. He also told Cherelle Griner that he is working to release Whelan, who is serving a 16-year sentence in Russia.
Whelan was arrested in 2018 on charges of acting as a spy for the United States. At the time he was arrested, Whelan was visiting Russia to attend a wedding, according to his brother, David Whelan. 
Griner’s arrest and subsequent detention came as the West issued repeated warnings to Russian President Vladimir Putin to draw down the hundreds of thousands of troops staged along Ukraine’s border. In the wake of Russia’s full-scale invasion of its ex-Soviet neighbor, the U.S. and its allies unleashed a slew of punishing sanctions on Moscow and built up a multibillion-dollar war chest for Kyiv.
Two months into the war, Russia agreed to release former U.S. Marine Trevor Reed in a prisoner exchange.
Reed was accused of assaulting a Russian police officer and detained by authorities there in 2019. He was later sentenced to nine years in a Russian prison. Reed and his family have maintained his innocence, and the U.S. government described him as unjustly imprisoned.
For Reed’s release, Biden agreed to free Konstantin Yaroshenko, a Russian pilot serving a 20-year federal prison sentence for conspiracy to smuggle cocaine into the U.S.

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When Domonique Brown was growing up, she was the only Black kid in her class. “It was definitely tough for me to find things that represented me,” she said.
She remembers how her father would go out of his way to find a store that had images of Black families on greetings cards, and how her parents would purchase Black art prints from dealers because nearby retailers didn’t carry them.

Those beginnings helped her to come up with her own brand, DomoINK, in 2020. She makes her drawing creations with crayons and markers and now collaborates with the likes of Target, Disney, and the L.A. Lakers. She makes original art and also prints her designs on everything from socks to laptop cases to sneakers.
During the day Brown works remotely from home as a marketing manager, but after she logs off she gets going on her artwork side hustle that brings in up to $267,000 per year.

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JetBlue Airways eked out a $57 million profit for the third quarter.
Strong travel demand and higher fares helped the carrier cover more expensive fuel and other costs.
Other U.S. airlines this month said they aren’t seeing a slowdown in travel demand.

A JetBlue Airways Corp. plane prepares for landing at LaGuardia Airport in New York, U.S., on Tuesday, April 18, 2017.
Bloomberg | Bloomberg | Getty Images

JetBlue Airways eked out a $57 million profit for the third quarter as strong travel demand and higher fares helped the carrier cover more expensive fuel and other costs.
The New York-based airline’s revenue rose 30% during the quarter from the same period last year to $2.56 billion, in line with analysts’ estimates. JetBlue’s operating margin narrowed to 5.4% from 9.4% a year earlier after expenses rose nearly 36% from the same period of 2021.

JetBlue’s CEO Robin Hayes said the carrier expects “another solid quarter of mid-single-digit pre-tax margins in the fourth quarter, and we’ll look to expand on that further in 2023 as we continue to restore our earnings power.”
Here’s how JetBlue performed in the third quarter, compared with Wall Street expectations according to Refinitiv consensus estimates:

Adjusted earnings per share:  21 cents vs. an expected 23 cents.
Total revenue: $2.56 billion vs. an expected $2.56 billion.

JetBlue’s shares were down roughly 3% in premarket trading after releasing results Tuesday.
“While the revenue outlook is strong, we have to continue to be thoughtful about every penny we spend, particularly in today’s environment, since our entire business model of competing with lower fares is based on having lower costs relative to the legacy airlines,” JetBlue’s CFO Ursula Hurley wrote in a note to employees, which was reviewed by CNBC.
Hurley said despite the return to quarterly profit, the airline won’t post a full-year profit in 2022 “after the bumps we faced in the first half of the year with the Omicron variant and operational challenges.”

Larger U.S. carriers have been upbeat about travel demand and largely outperformed analysts’ expectations on resilient travel demand, particularly on the return of international trips.
Airline executives say they are limited in how much capacity they can add because of shortfalls in aircraft and pilots, which is helping keep fares high. Airlines have also held back on adding flights after a host of costly operational meltdowns prompted them to add more slack in the system.
JetBlue said it plans to expand flying 1% to 4% in the fourth quarter compared with 2019 levels. Airlines are comparing capacity levels with those of three years ago to show their recovery from the pandemic.
“Given the continued fragile aviation ecosystem, we are taking a cautious approach to operational investments and more conservative planning assumptions that we put in place for the summer,” CFO Hurley said in the earnings release.
The airline forecast fourth-quarter unit costs, excluding fuel, to be up as much as 10.5% from three years ago. It expects unit revenues up as much as 19%. Unit revenues in the third quarter were up more than 23% from three years earlier.
Hurley said the airline has hedged about 27% of its fourth-quarter fuel consumption.
JetBlue executives will discuss results on a 10 a.m. ET call on Tuesday, when they are likely to face questions about the airline’s planned acquisition of budget airline Spirit. Spirit’s shareholders last week overwhelmingly voted in favor of the $3.8 billion takeover, which now faces a high hurdle with Biden’s Justice Department.

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Coca-Cola on Tuesday raised its full-year outlook for comparable earnings per share and organic revenue growth.
Coke’s organic revenue grew 16% in the third quarter, and its unit case volume rose 4%.
The company also said it expects commodity prices to remain volatile in 2023.

Coca-Cola on Tuesday raised its full-year outlook after beating Wall Street’s expectations for its quarterly earnings and revenue.
The company also provided a look toward 2023, saying that it expects inflation to keep raising its expenses and commodity prices to stay volatile. Foreign currency is also projected to weigh on Coke’s earnings and revenue. However, the company won’t provide its full outlook for next year until early 2023.

Shares of the company rose 3% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: 69 cents adjusted vs. 64 cents expected
Revenue: $11.05 billion adjusted vs. $10.52 billion expected

The beverage giant reported third-quarter net income of $2.83 billion, or 65 cents per share, up from $2.47 billion, or 57 cents per share, a year earlier.
Excluding items, Coke earned 69 cents per share.
Adjusted net sales rose 10% to $11.05 billion, topping expectations of $10.52 billion. Organic revenue climbed 16%, fueled by higher prices across Coke’s portfolio.

Unit case volume, which strips out the impact of currency and price changes, grew 4% in the quarter. Other consumer giants, like Tide maker Procter & Gamble, have seen their volume fall as consumers feel inflation hit their wallets. Coke said it’s been trying to appeal to budget-conscious consumers through product offerings like value packs in North America.
Coke’s sparkling soft drinks segment, which includes its namesake soda, reported volume growth of 3%. Coke Zero Sugar was once again a standout, with its volume rising 11% in the quarter.
The company’s hydration, sports, coffee and tea division saw volume growth of 5%, fueled by Powerade, Bodyarmor and the expansion of Costa Coffee.
Coke’s nutrition, juice, dairy and plant-based beverages division reported flat volume for the quarter. Coke said the lackluster performance was due to declining demand for local brands in Eastern Europe.
For 2022, Coke now expects comparable earnings per share growth of 6% to 7%, up from its prior range of 5% to 6%. The company also raised its outlook for organic revenue growth to 14% to 15% from a range of 12% to 13%.
In the fourth quarter, Coke is forecasting that foreign currency will weigh on its comparable net sales by 8% and comparable earnings per share by 9%, including the impact of hedged positions.

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