Nationwide Restaurant Affiliation asks Congress for assist amid omicron

On March 18, 2021, people in New York City dine at an outdoor dining patio set up at a restaurant.

Angela Weiss | AFP | Getty Images

The National Restaurant Association is asking Congress to replenish the Restaurant Revitalization Fund as the Omicron variant hits operators’ businesses.

Last year, lawmakers set up the $28.6 billion fund to help bars and restaurants struggling in the wake of the crisis pandemic. The grants were intended to cover a restaurant’s total pandemic losses of up to $5 million for a single location or $10 million for a business with fewer than 20 locations. Public companies were not eligible, but their franchisees could still apply.

With the fund depleted, restaurants pressed for Congress to refill it. Several lawmakers have introduced legislation to do so, but the bills haven’t gained traction and the Biden administration didn’t seem interested in backing the measure.

but the recent spike in Covid-19 cases and its impact on restaurants could change minds.

The latest National Restaurant Association survey of operators found that 88% of restaurants saw a drop in demand for indoor dining due to the Omicron variant. More than three-quarters of those polled told the trade group that business conditions are worse now than they were three months ago. And the majority of operators said their restaurant is less profitable today than it was before the pandemic.

“Alarmingly, the industry has still not recovered the more than 650,000 jobs lost at the start of the pandemic, a loss 45% more than the closest industry,” trade group top lobbyist Sean Kennedy wrote in a letter to the Congress leadership for both parties .

Kennedy also noted the benefits of the first round of RRF grants. The trade group estimates the first round of funding saved more than 900,000 restaurant jobs, and 96% of recipients said the grant made it more likely they could stay in business. A full replenishment of the fund would save more than 1.6 million jobs, the trade group estimates.

China zero-Covid lockdowns, CNY vacation impression provide chains, ports

Streets in Tianjin, China, empty on January 10, 2022 as the city goes into partial lockdown following a surge in Omicron cases.

Geno Hou | Future Publishing | Getty Images

Covid lockdowns, quarantines and restrictions are causing a backlog at some of China’s major ports, causing “chaos” and increasing air freight by up to 50% in some cases, analysts tell CNBC.

Ahead of the extended Lunar New Year holiday in China, air freight rates have skyrocketed and some shipping companies have suspended services, putting a renewed spotlight on congested supply chains.

It comes as China presses ahead with its zero-Covid strategy – meaning a recent spike in infections has led to lockdowns and restrictions in major port hubs and major cities across the country.

“Although ports are still open, current restrictions — such as mandatory quarantines and testing — continue to slow transportation and cause delays,” Atul Vashistha, founder and chair of supply chain consultancy Supply Wisdom, told CNBC.

China’s top priority right now is to limit the spread of Covid cases ahead of next month’s Winter Olympics and the upcoming Lunar New Year, he added. However, the resulting curbs at the ports have also created a certain “chaos”.

“Products are piling up while ships are banned from entering. Between negative PCR test requests and last minute rerouting, 2022 starts as 2021 ended – chaos,” Vashistha said, referring to the polymerase chain reaction Covid tests.

Cases have been reported in the main port cities of Shenzhen, Tianjin and Ningbo, as well as in the United States Industrial center of Xi’an, spark arrestors and other curbs.

Infections were also reported in other cities, e.g Dalian and anyang.

The capital Beijing reported its first locally transmitted Omicron infection on January 15. On Sunday, less than two weeks before the Winter Olympics, Beijing authorities introduced new restrictions to stem a recent outbreak after nine locally transmitted cases were detected in Beijing the day before.

the Ningbo eruption in December also triggered some curbs and disrupted traffic in the world’s third busiest port, Ningbo-Zhoushan.

Operations have now largely resumed, but shipments have been diverted to Shanghai — the world’s busiest port — causing congestion and delays there too, Judah Levine, head of research at freight-booking platform Freightos Group, told CNBC.

Supply chain tech firm project44 said the shift from the Ningbo port to Shanghai “backfired on some carriers” as congestion mounted in Shanghai. As a result, Shanghai saw an 86% increase in empty runs year-over-year, it said, referring to an industry term for when an airline decides to skip a particular port or the entire journey altogether.

In an email to CNBC last week, Freightos’ Levine said all eyes are on China and the impact strict outbreak containment measures could have on logistics. “Steps have been taken to quell the spread of positive cases, which have been detected in multiple locations including Beijing, Shenzhen, Tianjin, Dalian and several others,” he said Jan. 19.

Rising air freight rates

Spot prices for ocean shipping en route from Asia to the U.S. West Coast were up 4%, Levine said, but they’re unlikely to rise much further because production is on hold as the Lunar New Year holiday approaches and factories shut down for a while be closed for a longer period of time.

However, air freight rates are still rising, he added.

“With enough time to still move cargo by air, the pre-holiday rush coupled with pandemic-constrained capacity is driving air freight rates higher,” he said, adding that the Freightos Air Index showed that the Rate from China to Northern Europe was $9.59 per kg in mid-January – up over 50% from under $6 per kg in early January.

The Lunar New Year is China’s biggest holiday, and hundreds of millions of people traditionally travel back to their hometowns from the cities where they work.

According to Vashistha, some major shipping companies such as Ocean Network Express and Hapag-Lloyd have suspended their services and operations even earlier than last year to celebrate the season. That puts a strain on already fragile supply chains, he said.

This latest shock comes at a bad time for global supply chains. They were already stressed out by the holiday season combined with the omicron variant, but port troubles in China take these complications to a new level.

John Ferguson

economic impact

Shipping costs have fallen in recent months as supply chain backlogs have reduced, but the recent Covid surge and possible port closures will dwarf any progress made, said Paul Gruenwald, chief economist at S&P Global Ratings.

“I would say that this will slow down the improvement that we’ve seen over the past few months,” he told CNBC’s Squawk Box Asia on Thursday.

Impact of China’s zero-Covid on the Winter Olympics

China’s zero tolerance for Covid will have a major impact on global supply chains, said John Ferguson, globalization, trade and finance practice leader at think tank Economist Impact.

“This latest shock comes at a bad time for global supply chains. They were already stressed out by the holiday season combined with the Omicron variant, but port issues in China are taking those complications to a new level,” Ferguson said.

“China’s zero-Covid strategy is critical as further outbreaks will lead to more closures or lockdowns in key areas,” he told CNBC. “With China approaching the Winter Olympics, as well as major political events later in the year, China is unlikely to abandon its Covid strategy in 2022.”

One bright spot is that many companies have already prepared for stressed supply chain scenarios and are now implementing their plans, he said.

Still, not everything will go smoothly.

“While global companies have become more nimble during this crisis, we should still expect some delays from this latest round of supply chain stress,” he added.

Supply Wisdom’s Vashistha summed it up: “Combine the closures with the increase in Covid-related port congestion, China’s zero-tolerance policy and reduced air transport capacity and the problem becomes even clearer: cargo continues to increase, without there being any way to move it or places to go.”

Lab-grown meat start-ups hope to make strides in 2022

Josh Tetrick, co-founder and CEO of cultured meat startup Eat Just, has a vision: he envisions a day when lab-raised meat is available everywhere from Michelin-star restaurants to street vendors and fast food chains .

Getting there, however, will require further investment – ​​and regulatory approvals. Cultured or cultured meats are real animal products made in laboratories and commercial manufacturing facilities. Currently, the process is costly, but researchers and entrepreneurs say manufacturing will become more efficient and cost-effective over time. If consumers switch to cultured meat, it could help reduce greenhouse gases from agriculture and mitigate climate change.

“It’s not inevitable,” Tetrick said in an interview. “This could take 300 years or 30 years. It’s up to companies like ours to do the actual work of building the tech capability…and communicating directly with consumers about what it is and isn’t, and how it can benefit their lives.”

Investors have poured around $2 billion into space over the past two years, according to Crunchbase data. The coming year will bring further investments. Eat Just and others are working to obtain regulatory approval in the United States from the Food and Drug Administration and the Department of Agriculture.

Nick Cooney, managing partner at LeverVC, which invests in the sector, said he expects approval later this year.

“There are several companies in this space that are building large, pilot-scale plants to make cultured meat products, but to produce in fairly large quantities that’s going to take a lot of capital investment and a lot of steel, and that’s just going to take time,” he said.

Eat Just has made major breakthroughs over the last two years. In Singapore it is received its first regulatory approval in December 2020 for its cultured chicken from Good Meat and has since received approval to sell new types of cultured chicken there, including chicken breasts, tenders and shredded chicken products.

“It’s real meat,” Tetrick said. “And instead of taking billions of animals and all the land and water and all the rainforests that you usually have to tear down to get that done, we’re starting with one cell. You can obtain the cell from a biopsy of an animal, such as a fresh piece of meat or a cell bank. Now we don’t need the animal anymore. Then we identify the nutrients needed to nourish that cell and … we make them in a stainless steel vessel called a bioreactor.”

Eat Just also sells mung bean plant-based egg products at stores like Whole Foods and Publix in the US and employs more than 200 people.

To date, more than 700 people in Singapore are said to have been provided with its cultured meat products — a number Tetrick hopes to increase quickly as it wins approvals in other countries.

After approval, Eat Just said it has already laid the groundwork to take off. The company’s Good Meat Division last year announced a $267 million capital raise to build containers and systems that will ramp up production in both the United States and Singapore, where it currently manufactures aiming to have this equipment operational within the next two years. In August, the company also announced it would build a facility in Qatar in partnership with Doha Venture Capital and the Qatar Free Zones Authority, but much more capital is needed to build bioreactors big enough to scale.

According to the nonprofit research association The Good Food Institute, more than 100 start-ups are working on cultured meat products, and larger companies are also expanding their own operations.

JBS, the global protein giant, acquired BioTech Foods in late 2021, Invest $100 million to enter the cultured meat market and set up a research and development center in Brazil. The Spanish biotech company is another leader in the cultured food sector and is focused on developing biotechnology for the production of cultured meat.

These developments come as consumers are increasingly concerned about climate change and want to change their eating habits to combat it. Plant-based meat products have become ubiquitous, appear in menus like KFC‘s or the grocery aisle at Turn Up aim. Cultured meat could offer Americans another alternative, and with products from companies such as B. coexist Beyond meat and impossible foods.

“The world will not reach net-zero emissions without addressing food and land,” said Caroline Bushnell, vice president of corporate engagement at the Good Food Institute.

“The role of our food system in climate change is generally underestimated, but industrial animal husbandry makes an important contribution,” she said. “Alternative proteins, including cultured meats, can be a key aspect of how we reduce emissions from our food system. Without a decline in industrial meat production, we cannot really meet our commitments under the Paris climate agreement.”

Chef Jose Andres, a restaurateur and founder of the nonprofit humanitarian group World Central Kitchen, wants to be part of this solution. Last month he joined the board of Eat Just’s Good Meat division and has pledged to sell the cultured chicken at one of his US restaurants pending regulatory review.

Promises like these can help bring Tetrick closer to his vision. But costs must also come down.

“A local restaurant or a big fast-food chain won’t take that if it’s a lot more expensive than regular meat. They’ll take it when it’s close — or better yet, when it’s under the cost. And that’s what we have to fight for,” said Andres.

School Cuber makes $8,000 mosaics of sports activities stars from cubes

Dylan Sadiq, known as “The College Cuber”, is charging $8,000 for his cube mosaics. Pro teams, including the NBA’s Detroit Pistons, have purchased the artwork.

Courtesy: Dylan Sadiq | The College Cube

It started with a portrait of his favorite basketball player, Luka Doncic. Then came NBA star Damian Lillard. International football clubs like Manchester United and FC Barcelona took notice. A major league baseball team has come forward, as has the National Football League.

Before he knew it, Dylan Sadiq was inundated with requests for his cube mosaics (as in Rubik’s Cubes, but imitators). Sadiq, 21, is a student at Rutgers University, where he is now known as The College Cubers.

Sadiq charges $8,000 and can create a cube portrait in under four hours. After gaining traction on social media platforms and retweets on Twitter, teams such as the NFL’s Tennessee Titans, the National Hockey League’s New Jersey Devils and Major League Soccer’s Philadelphia Union, as well as the New York Red Bulls sought Sadiqs work.

“I didn’t expect that,” Sadiq told CNBC this week. As he spoke, a new mosaic he created of Kansas City Chiefs star quarterback Patrick Mahomes went viral.

Covid ruined everything

Sadiq is currently in his final semester at Rutgers and plans to graduate in biomedical engineering. However, he does not have a career in this field in mind.

His interests changed during the pandemic as virtual school left him unoccupied.

“When I was personal, I was grinding and studying,” he said. “I immersed myself in my education. But since we’ve been online it’s far from the same, and it’s sad. I feel like I haven’t learned much. If you put me in a situation to make a difference, I don’t know how I can help.”

With no opportunities for personal internships or hands-on experience at school, Sadiq took a detour. He combined his Social Media Accounts and his interest in engineering to master the Rubik’s Cube.

Dylan Sadiq, known as “The College Cuber”, is charging $8,000 for his cube mosaics.

Courtesy: Dylan Sadiq | The College Cube

Sadiq likes to tell the story of how his brother Brandon challenged him to solve the cube when he was 10 years old. His reward was Activision Blizzards Call of Duty video game. Sadiq said it took him a week to complete the task.

In February 2021, Sadiq practiced solving cubes to get faster. He then turned his newfound skills into a path for creating art.

Sadiq bought $1,000 worth of cubes and figured out how to assemble 560 pieces to create one Mosaic by Doncic, the Dallas Mavericks All-NBA guard. He posted it to Instagram in April, and the Mavericks took notice and shared it with the team’s supporters. That sparked another mosaic from Lillard with similar results from the Portland Trail Blazers.

“I’m not sure Luka Doncic has ever seen the mosaic,” Sadiq said. “And Mark Cuban, I’m not sure he saw it either,” he added.

Cuban, the Mavericks’ owner, told CNBC he didn’t see it.

While Sadiq said he’ll almost certainly steer clear of potential engineering jobs, he’s not thinking about his time at Rutgers, which can be expensive over $40,000 a year, as a waste. He said the university hires him for live events, including the October soccer game against Ohio State and the inauguration of the new school president.

“That’s a big part of why I’m the college cuber,” Sadiq said. “Everything was ruined because of Covid. But where I feel valuable is through my artwork.”

Sadiq visited the Lions’ Ford Field last July to create a mosaic for the NFL club.

Courtesy: Dylan Sadiq | The College Cube

Finding motivation in Detroit

In July, the Detroit Pistons became the first professional sports team to pay for a mosaic. Sadiq took a trip to the Motor City and created a portrait of Ben Wallace, the center of the Pistons’ Hall of Fame. While in town, he made a mosaic for the Red Wings for their NHL draft party.

He also made sales to the NFL Lions and for the MLB Tigers he created a mosaic of batman Miguel Cabrera. The team presented it to him to celebrate his 500th home run.

“I didn’t understand what I was doing,” Sadiq said of his Detroit experience. “I was just trying to make an experience out of it.”

As he wandered around Detroit, Sadiq said he was interested in the artworks that promoted black pride in the city. This gave rise to the idea of ​​expanding the College Cuber.

“The artwork was fantastic,” said Sadiq. “One of the things I imagined – I wish I could see the creation live. I felt it deserved an audience because artworks like this have a strong message and look beautiful. It’s colourful, vibrant – I wish I could see it being made before my eyes.”

Dylan Sadiq said black artworks in Detroit motivated him to create live performances of the mosaics. He uses over 500 cubes to assemble the artwork in three hours.

Courtesy: Dylan Sadiq | The College Cube

So Sadiq made it possible. He started charging up to $3,000 for a live performance and can create a work of art in about three hours. For a flat fee of $8,000, customers can see the live event and keep the artwork.

Last September, Sadiq converted College Cuber into a limited liability company. He said that of the $38,000 in revenue he’s made since the Pistons became his first paying client in July, about $27,000 has ended up in profit. He keeps costs down through a deal with a toy wholesaler and pays no rent for his mother’s basement studio where he makes his mosaics.

“She’ll probably start charging me (rent) now,” he joked.

Sadiq believes he can surpass $100,000 in sales this year. So far, the Chiefs have bought the mosaic from Mahomes, and Titans running back Derrick Henry is looking for a piece.

The NFL paid $8,000 for a mosaic by league commissioner Roger Goodell, named after Joe Favorito, a well-known sports PR guru and sports business professor University of Columbia, saw a video of one of Sadiq’s mosaics. Favorito said he was “blown away right away” and coordinated a performance.

“Sometimes we take creative talent for granted,” Favorito said. “I think it’s our job to help these young content creators do something really unique. His technical and scientific background connects him in a special way and this is how he is able to do it. The fact that he can do it almost in his head, and then knowing which pieces to put up and create something remarkable and unique in a matter of hours is a gift.”

It all started on the trip to Detroit.

“I learned so much from this experience,” said Sadiq. “I went from being a kid making videos online to an action. I would say that weekend in Detroit changed my whole life.”

Sadiq is shown creating a mosaic of NBA star Kevin Durant for the Philadelphia Union football team. Durant is co-owner of the MLS franchise.

Courtesy: Dylan Sadiq | The College Cube

Make money on social media

Sadiq isn’t the first person to monetize cube mosaics. 2019, CNBC profiled Italian artist Giovanni Contardi using Rubik’s products to create art. Contardi sold a mosaic of the late Amy Winehouse for approximately $5,000 and caught social media attention for an article about NBA star LeBron James.

Sadiq has contacted Rubik’s about a trademark deal. The company is owned by a Canadian toy manufacturer Spin Master, which is traded on the over-the-counter marketplace.

“The pandemic has been a problem for him, but it has also created digital opportunities that he can take advantage of,” Favorito said.

Social media is central to College Cuber’s business. His Instagram account was authorized Facebook’s Bonus program that pays creators to post Roll. Sadiq said he’s made about $550 from Instagram so far. He also joined TikTok creator fund after his Mahomes mosaic garnered over 100,000 views.

For additional revenue, he creates mosaics and charges clients $750 for the video that companies can post in their ads.

But Sadiq does not charge professional sports teams for video contribution. Instead, he looks for retweets or reposts to get attention. Manchester United and Barcelona have helped with football fans, and the NBA’s Orlando Magic also sponsored the work Twitter.

Sadiq said he plans to use the extra attention as a force for good.

Last year, courtesy of the New York Knicks, he attended his first NBA game after creating a mosaic of All-Star Julius Randle. Sadiq, a native of New Jersey, said visiting Madison Square Garden was “life-changing” as he was able to “feel the culture and unity of [sports] fans.”

Sadiq is now asking teams who become customers to provide free tickets to fans who have never attended a sporting event.

“That’s what I want to experience with my artwork – to bring the fans together,” he said.

Speaking of building College Cuber, Sadiq said, “It was just something that came into existence and I recognize the value I bring to people.”

CLOCK: The 24-year-old creates portraits from hundreds of Rubik’s Cubes

Behind GM, Ford’s new EV technique is old-time financing: Money

The cab to a Ford all-electric F-150 Lightning truck prototype is seen on an automated guided vehicle (AGV) at the Rouge Electric Vehicle Center in Dearborn, Michigan, September 16, 2021.

Rebecca Cook | Reuters

Detroit’s automakers have brought a surprisingly conservative financial strategy to making EVs the next vehicle of choice for American consumers.

They’re paying cash.

General Motors other ford are investing $65 billion between them – $35 billion at GM and $30 billion for Ford – and, so far, don’t propose to borrow any of it. Instead, the most radical change in auto products in a century is being paid for out of the companies’ operating cash flow – seriously reducing the risk to the companies over time, and, for now, boosting their stock prices.

“The short answer is that they are doing it because they can,” said Nishit Madlani, automotive sector lead at bond rating agency Standard and Poor’s. “The popularity of trucks [since the pandemic began] and strong pricing is giving them confidence.”

Detroit’s aggressive investment and conservative financing has been years in the making. It has been aided by $4 billion borrowed by GM in May 2020, and by Ford drawing down a revolving credit line by $15 billion around the same time, moves intended to cushion a feared sales implosion from Covid-19. As sales declined more modestly than feared in 2020 and then began to bounce back in 2021, cash flow remained strong, taking the companies’ stock prices higher and letting Ford repay high-interest debt.

At the same time, both companies held on to cash by suspending dividends and share repurchases. And the companies have cut billions in annual costs, by slashing whole lines of unprofitable sedans, withdrawing from unprofitable markets overseas, and focusing tightly on trucks, which remain the most profitable part of their business.

Put all of this together, and the two biggest native-born US automakers have the cash to take on the industry’s biggest technological transformation since its founding.

Record car profits, record car prices

“Auto manufacturers are expecting record profits once we get through supply chain issues and chip shortages, which we expect to last most of this year,” CFRA Research analyst Garrett Nelson said. “The existing business is good, and the driver is car prices at a record high.”

The Detroit 2’s financing strategy stands in stark contrast to how Tesla, then a start-up, financed its push into EVs over the last decade. The EV leader repeatedly raised money from the stock and bond markets to pay for its plans, filing paperwork with federal regulators for $10 billion in stock sales as recently as 2020. Tesla’s first EV factory in California was financed with a loan that was federally guaranteed in 2010, when the EV market was nascent, before the company went public or had material revenue.

GM and Ford are ready to spend even more.

“If anything, it will go up from there,” a Ford spokesman said.

The US car market’s bounce back to nearly 15 million units sold in 2021 provided the financial cushion Detroit needed to push forward aggressively, according to Nelson. The collapse was not nearly as large as the one that accompanied the 2008 financial crisis, when the US passenger vehicle market fell to slightly more than 10 million cars and trucks. The brief, shallow dip helped assure that the war chests of the two companies were big enough to meet the need for billions of dollars in new investment, Madlani said.

“We prepared for the known and the unknown,” said the Ford spokesman. “The unknown part was the pandemic. The known was that we needed to be a leader in electric vehicles.”

The sales rebound, while still well below pre-pandemic pace, has translated into $7.8 billion in free cash flow over the nine months that ended in September at Ford. At GM, where automotive operations barely broke even on operating cash flow in the first nine Months of 2020, liquidity was still strong enough to let the company spend more than $4 billion on capital expenditures. GM is due to report fourth-quarter results on Feb. 1, with Ford set to announce its results Feb. 3.

Analysts expect Ford to report profits of 42 cents a share on $35.8 billion of revenue, up 75% since the September quarter, according to Thomson Reuters data. GM is forecast to earn $1.11 a share, down from $1.52 in the third quarter. GM raised its own forecast for the full year in December, saying it will earn $14 billion in earnings before interest and taxes, up from $11.5 billion to $13.5 billion it had previously predicted.

Ford and GM profits have held up, even though US industry unit sales are off the 17 million-vehicle annual pace before Covid, because the companies aggressively cut costs to prepare for the transition, Nelson said. Ford got almost entirely out of the business of making sedans, for example, and GM laid off 4,000 salaried workers in 2019. That’s in addition to factory closings that included GM’s storied Lordstown, Ohio plan, later sold to EV start-up Lordstown Motors.

On top of that, the companies are holding plenty of extra cash as a reserve if their cash flow misses forecasts. As long ago as 2019, analysts who spoke warily of all the money Ford needed to invest in its business respectfully noted that it also had $37 billion in cash and short-term securities. Ford now has $46.4 billion, and generated more than $12 billion in operating cash in the first nine months of 2021.

Ford, GM EV forecasts

Both companies have had plenty to say about financing strategy, and EV planning, at investor conferences in the last year. The common theme: Building Ford’s EV strategy around existing model names like the Mustang and especially the F-150 pickup truck, for which the company has garnered 200,000 pre-orders, is paying off in both customer acceptance and cost containment.

“Within the next 24 months, based on the demand for these products, [we] would be the number two EV automaker, probably close to 600,000 EVs a year globally [from Ford’s current product lineup] and we don’t plan to stop there,” Ford’s North American chief operating officer Lisa Drake told a Goldman Sachs-sponsored investor conference in December. “The complexity of the product in EV space is much less than at [internal combustion engines]. …And that’s going to allow us to be more efficient with our capital and more efficient with the labor and the assembly plants.”

At GM, the EV strategy includes a wave of new vehicles using new and existing nameplates – most recently, the company unveiled a $42,000 electric version of its Chevrolet Silverado SUV – as well as its Cruise joint venture with Honda, Microsoft and other investors to build an EV-centered autonomous- car business.

That has meant manufacturing complexes devoted to EV production that are in progress – or in production – in two Michigan towns and in Spring Hill, Tennessee, with planned battery plants near the sold-off Lordstown plant and in Spring Hill. GM chief financial officer Paul Jacobson said in March the company saves $1 billion to $1.5 billion per plant by converting existing car factories rather than developing all-new ones, which will reach $20 billion to $30 billion by the time GM’s EV effort reaches its full scale .

For now, the challenge is that electric vehicles are much less profitable than the big pickups and SUVs that dominate the two companies’ business, Nelson says, but that isn’t likely to last. Nelson says that as battery costs continue to drop and Ford and GM build scale in their EV business, they can surpass the profitability of internal combustion powered vehicles – noting that Tesla is more profitable, per dollar of sales, than Ford or GM’s auto businesses. Ford says its Mustang Mach E is profitable even though it sold fewer than 30,000 units in 2021.

“We do eventually expect to match [internal combustion engine] profitability with EVs as battery cell costs decline and we scale our operations,” a GM spokesman wrote in an e-mail.

At Morgan Stanley, analyst Adam Jonas – a longstanding EV bull – says Ford’s surge which led its stock to outperform Tesla last year, suggests that its EV-focused businesses are now worth about $50 billion, with every 100,000 sales of EVs likely to add $2 to its stock price. But he warned in a Jan. 13 report that hard-to-avoid bumps in the rollout of the electric F-150 and other vehicles will likely cause the stock to dip temporarily later this year.

“From a $25 level, we believe expectations for Ford’s success in EVs, while possible to achieve, are difficult to exceed,” Jonas wrote.

Why you is likely to be renting not shopping for your subsequent sofa

Shironosov | iStock | Getty Images

Before eventually moving to California, the grandson of a wealthy client of interior designer Phyllis Harbinger, who had just graduated from college, decided to rent furniture instead of her for an apartment he and his girlfriend found in the New York area to buy.

“They said, ‘We don’t know what we want to do. We don’t want to be married to anything and we want to be sustainable,'” said Harbinger, vice chairman of the department of interior design at Fashion Technological Institute. “This generation is really into that reuse and buyback mentality to save the planet for them and their kids.”

Office furniture rental has a long history, but the demand for home furniture rental is growing – particularly among younger consumers who prefer a more mobile lifestyle than was typical for older generations.

Online furniture startups like Feather and Fernish are offering customers the chance to rent furniture for as little as three months at a time, with the option to swap parts during or at the end of a contract period if they fancy something different.

Appealing to a young, mobile customer

Feather and Fernish “are responding to the needs of people who have lots of money but don’t have time to buy furniture, and maybe don’t want to commit to owning large, bulky furniture because they expect to move again – and that’s a younger demographic,” says Susan Inglis, executive director of the Sustainable Furniture Council.

The hire-to-own option offered by these startups also appeals to people who don’t have enough cash to buy now but want good pieces they can live with right away, she said.

Feather’s customers are typically in their 20s and 30s and live and work in cities. The service is well-suited for people who have recently moved or are about to move, live with roommates and move every six months to a year, wrote Ilyse Kaplan, the company’s president and chief operating officer, in an email.

It’s also more affordable for people moving to a new state, which can cost anywhere from $4,300 to $4,800, or even moving down the street in most cities, which costs an average of $1,250, Kaplan said. Feather customers “can set up a basic studio for as little as $105 a month or a basic 1 bedroom for $150 a month.”

Feather cited “significant growth” in new residential leases since the onset of Covid-19 and the onset of remote and hybrid work, greater financial uncertainty and the need for more flexible living arrangements. “As living conditions have changed in response to the pandemic, we’ve seen dining room items decline in exchange for more functional home office items,” Kaplan said.

Rent furniture to be more sustainable

Stationary furniture brands such as IKEA are also examining leasing models. For the Swedish retailer, experimenting with renting is part of a broader plan to move to a circular business model by 2030, with the aim of ultimately using only renewable or recycled raw materials and improving design principles to allow for less wear and tear on the products assembled and dismantled as well as the refurbishment and reuse of used goods or their components.

IKEA began testing a circular furniture subscription model in 2019, but its progress has been somewhat delayed by pandemic-related restrictions, wrote Kicki Murbeck, circular business designer on Ingka Group’s Circular Innovation Team, in an email. Ingka Group is the main franchisee of the IKEA brand, with retail stores in 32 markets, accounting for approximately 90% of IKEA’s total retail sales.

Building on previous tests in several European countries, in 2021 the company introduced a limited launch of a B2B edition called IKEA Rental in six markets: Finland, Sweden, Denmark, Norway, Spain and Poland. After testing multiple contract options, including contract lengths, and banking partners, IKEA is evaluating the results before deciding on next steps, Murbeck said.

Inglis sees interest in renting higher quality furniture as a backlash to the growing popularity in recent decades of “quick furniture,” which relies on cheaper materials to accommodate a more nomadic lifestyle and often ends up in landfill.

“People are fed up with throwing away trash and the furniture industry as a whole did itself a disservice years ago by really trying hard to create furniture that would throw away,” she said.

Currently serving ten major markets in the US, including New York, Washington, DC, San Francisco and Los Angeles, Feather allows customers to change furniture pieces even during a rental period if their space, needs or aesthetic preferences change , and offers one free swap to every retail customer and additional changes for a fee. Around 14% of customers currently use the swap option.

“We are actively working to keep furniture of all types out of landfills” by renovating and repurposing each item multiple times, Kaplan said, noting that furniture currently accounts for about 7% of all landfill waste.

While Feather’s furniture is constructed from durable materials and a system of parts to aid in this process, “our first step is to work with our like-minded partners at FloorFound to find the furniture when parts are no longer useful for the next customers will be deemed new homes. If we are unable to resell an item, we will donate it through our partnership with Habitat for Humanity,” Kaplan said.

Inglis said she expects the trend towards retailers offering refurbishment services to increase dramatically in the coming years.

Before furniture leasing gains popularity, customer perception issues must be resolved. IKEA has heard customers looking for longer-term leases raise concerns about how they care for products and what conditions apply if something breaks or isn’t treated well. This must be clear to both sides.

IKEA finds that the shift in thinking needed to fully understand a subscription model is easier for younger consumers than older ones. Generation X and older consumers tend to associate subscriptions with the rent-to-buy model, which has historically made them pay more than buying upfront, but also the full scope of repair, maintenance, and return services excludes that retailers are now offering.

IKEA franchisees also need to develop a digital product tracking system to move away from a linear sales model and distribute products from one customer to another and expand the subscription service.

IKEA already sells refurbished and reused products in certain markets and plans to expand this as a key part of its circular economy transition. Also, in November 2020, the company opened a second-hand pop-up store in a shopping center in Eskilstuna, Sweden, targeting retailers selling reused, organic or sustainably produced products. More than 30,000 IKEA products were given a second life in the pop-up store during the first year of the trial period, and in December 2021 IKEA extended the program for another year.

“The circular furniture subscription service we tested is not only about the products as such, although of course these are very important, but also about understanding what the customer needs and wants and being able to to meet these changing needs over time,” Murbeck said.

– By David Bogoslaw, specially for CNBC.com

Jim Cramer says he’d purchase Disney after shares slid on Netflix information

CNBC’s Jim Cramer said on Friday he sees the sell-off in Disney as a buying opportunity for investors.

Shares of the media and entertainment giant fell 6.94% to hit a fresh 52-week low during the session. However, the “Bad Money” Host said he won’t shy away from the stock because its sharp decline seemed linked to it Netflix‘s prognosis of Subscriber growth slowdown.

Netflix’s outlook — offered Thursday night when the company reported its earnings — spooked investors, and the company’s shares plunged 21.8% on Friday.

“I want to own the stocks of longtime, great Americans who have fallen into a guilt fiasco, and that’s exactly what happened to Disney stock today,” Cramer said, while noting that he was prevented from adding to his shares Charitable Trust on Friday changed Disney’s position after mentioning the stock on morning TV. Cramer’s ethics policy is that he waits 72 hours before executing a trade in any stock that he discusses on CNBC’s television programs.

Cramer’s trust Bought back from Disney in September, about three months after leaving his position entirely for the first time in 16 years. Confidence was added to the stock end of November and then back in December.

Cramer admitted on Friday that he was “too early” at Disney, alluding to the fact that the stock is trading lower than when the trust made its purchases.

“But it’s time to mix speculative stories with investment-grade stories. A lot of the stocks wiped out here belong to companies that don’t have much in the way of earnings, companies that trade mostly on hype or hope,” Cramer said.

He said he sees a number of speculative assets — including cryptocurrencies and stocks that went public through a reverse merger with a special purpose vehicle — that deserve to fight now as Wall Street braces for likely Federal Reserve rate hikes .

“But you can’t just extrapolate the weakness of a company that’s done very well, Netflix, with a whole bunch of other big brand name companies that make amazing products and make good revenue, like Disney,” Cramer said.

“I’m not saying Netflix isn’t worth owning. At a certain price, it sure will,” he added. “What I’m saying is that there are a lot of quality companies that are in distress because of Netflix today, and these were the best ones to buy.”

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Exactly How Credit Card Pre-approvals Work

If you have a credit card, or perhaps if you don’t, you have probably received a stack of credit card letters in the message, telling you that you are’ pre-approved ‘for a wonderful credit card deal. Although a few of these credit card offers are genuine, numerous are not what they seem or are also full frauds. If you recognize want to see to it that you don’t succumb these poor deals, then right here is some suggestions on the ins and outs of upgrade card pre approval.

What does pre-approval mean?

Although in various other areas pre-approval might indicate that you have secured a guaranteed quantity and definite terms with a loan provider, depending upon final credit checks, with credit card pre-approval mail it does not suggest this. It merely suggests that you have a credit score that matches the requirements to let you apply for one of these cards. You are not guaranteed details terms, neither are you even guaranteed to be accepted.

Why do I get sent these letters?

Often, credit companies send you these letters because your credit score matches their criteria for card applications. Card business are constantly searching for new clients, however if they merely sent out letters to everybody it would cost them a great deal of money for little return. Instead, they look non-mortgage consumer debt rankings to try to find individuals who match details requirements. Whether this is a good credit score for high limitation cards or a negative credit score for the sub-prime market, you are targeted due to the fact that they think you are most likely to respond to their deal.

Are these offers genuine?

Although many of these offers are not what they initially seem, they are not practically prohibited. They are supplying you the opportunity of’ up to’ a specific credit limit, as well as they are not saying you are approved, only’ pre-approved ‘or ‘ pre-selected. This means that they can change all of the problems of the card you are sent and also they are still not practically lying to you. Although this does appear morally wrong, it is your responsibility to inspect the info prior to applying.

Typical techniques used

These deals are usually deceptive, and there are certain tricks that the card providers make use of in order to make more cash out of you. Typically these terms are noted in the fine print, but since many people don’t look at this they know they can get away with it. One typical technique made use of is to bill you an extremely high rate of interest, but put a clause in the contract saying you have to transfer your entire present equilibrium from one more card onto the brand-new card. This implies that they are putting an equilibrium on the card instantly at a higher rate of interest than you may currently pay. Another common trick is to offer you’ approximately’ an enormous credit limit, but then offer you something a lot reduced. As an example, they might supply you’ as much as’ ₤ 10,000, yet just give you ₤ 1,000.

Check out the terms

The only method to really quit on your own being caught out by these deals is to review the fine print very carefully if you are considering using. Nevertheless, the very best way to not get caught is to simply shred the deals and placed them in the bin. You are far more most likely to obtain a much better deal, despite the same card issuer, if you inquire on your own as well as search for the best offer.

5 issues to know earlier than the inventory market opens Friday, Jan. 21

Here are the top news, trends and analysis investors need to start their trading day:

1. Wall Street looks set to extend its losing streak

Traders work on the floor of the New York Stock Exchange (NYSE) on January 20, 2022 in New York City.

Spencer Platt | Getty Images

US stock futures fell Friday, with the Nasdaq Looking for Wall Street’s biggest drop again Netflix Shares tumbled in the premarket on slowing subscriber growth. The Nasdaq fell for a third straight session, ending Thursday almost 12% below its last record close in November. the S&P500 It also fell for three straight days, closing 6.5% below its record close earlier this month. the Dow Jones industry average fell for five straight sessions, ending more than 5.6% below its record close from early January. All three stock benchmarks were up to speed for big weekly losses.

2. Netflix’s slump would wipe out profits through April 2020

Netflix’s shares fell 20% premarket on Friday, suggesting opening prices below $410 each, erasing more than 20 months of gains and over 40% below its all-time high in November. Investors punished the stock after Thursday’s after-the-bell earnings report, which revealed a Decrease in net paid subscriber additions worldwide in the fourth quarter and an even worse forecast for the current first quarter.

  • The video-streaming giant beat fourth-quarter earnings estimates and matched sales, but Wall Street was more concerned about the future.
  • Netflix said it plans to have a more back-end weighted content slate in the first quarter, with big premieres slated for March.

3. Peloton is taking “significant corrective action,” CEO says

peloton said its fiscal second-quarter earnings late Thursday will be within the previously forecast range, as it takes action to reduce costs and improve profitability. However, the fitness equipment maker said it added fewer subscribers than previously expected in the most recent period, which ended Dec. 31.

The stock rallied 8% in pre-market on Friday in the morning after falling nearly 24% in the regular session following a CNBC report that the connected fitness equipment maker temporarily halted production of its stationary bikes and treadmills due to the explosive Demand eased off at the start of the Covid pandemic. Peloton’s stock opening price on Friday would mark an 85% drop from its all-time high of $171.09 set in January 2021.

4. Intel plans to build $20 billion chip manufacturing facility in Ohio

Intel CEO Pat Gelsinger at the groundbreaking ceremony for two new chip manufacturing facilities in Chandler, Arizona on Friday, September 24, 2021.

Intel Corporation

intel will invest $20 billion in two new plants in Ohio to manufacture advanced chips, The company announced this on Friday, the first step toward a “mega-site” capable of housing eight $100 billion chip fabs. The proposed investment includes 3,000 permanent jobs and 7,000 construction jobs on the 1,000-acre site outside of Columbus. Intel CEO Pat Gelsinger is driving Intel’s expansion plans, particularly in Europe and the US, to compete with global rivals and respond to a global microchip shortage. In September, Intel broke ground on two factories in Arizona as part of its turnaround plan to become a major maker of chips for external customers.

5. US and Russia far apart on Ukraine crisis as top diplomats meet

U.S. Secretary of State Antony Blinken greets Russian Foreign Minister Sergei Lavrov before their meeting January 21, 2022 in Geneva, Switzerland.

Alex Brandon | Reuters

The US and Russia try to avoid Another conflict in Europe. However, top diplomats from both nations warned on Friday that no breakthrough was imminent as fears mounted that Moscow was planning to invade Ukraine. US Secretary of State Antony Blinken and Russian Foreign Minister Sergey Lavrov met in Geneva at what the American called a “critical moment”. Lavrov called the talks “constructive and useful”. Moscow wants a promise that Ukraine, a former Soviet republic, will never be allowed to join NATO and is demanding the withdrawal of allied troops and military equipment from parts of Eastern Europe. The US and NATO have rejected these demands. In 2014, Russia conquered the Ukrainian peninsula of Crimea.

— Reuters and Associated Press contributed to this report. Follow all market action like a pro CNBC Pro. Get the latest on the pandemic with you CNBC’s coronavirus coverage.

Jim Cramer says these are his favourite financial institution shares in 2022

CNBC’s Jim Cramer on Thursday reviewed the latest list of big bank earnings and explained why his nonprofit investment trust is sticking with his property MorganStanley and Wells Fargo.

“Banks are everywhere this earnings season, which just goes to show how important individual stock selection is,” he said “Bad Money” host said. “All banks are not created equal,” he added, although he expects 2022 to be a solid year overall for financials due to likely Federal Reserve rate hikes.

Citigroup

When Citigroup reported Friday, it indicated an 18% year-on-year increase in operating costs. That’s disappointing for Wall Street, Cramer said, because the company’s revenue rose just 1%.

Cramer said the best thing he could say about Citi stock is that it’s cheap, trading at about 80% of its tangible book value. However, he did concede that the stock, which is down nearly 5% over the past week, could see a rebound this quarter if Citi resumes share buybacks; The bank suspended its buyback program in December due to regulatory issues.

JPMorgan

Investors were disappointed too JPMorgan‘s leap in interest-free spending up 11% YoY‘ Cramer said. While it’s no secret that JPMorgan is investing in its business to fend off fintech competition, Cramer said the Street was a little surprised by the amount of capital tied up.

Cramer said he thinks JPMorgan’s sharp sell-off after earnings was a bit overdone. “After that drop, JPMorgan is trading at just 13 times earnings despite being the most expensive in the group [a book value basis]. I think you can do better,” he said.

Wells Fargo

Owned by Cramer’s Wells Fargo Charity Foundation exceeded analysts’ expectations for sales and earnings. “Most importantly, Wells is very interest rate sensitive. So when you see bond yields rising, think Wells Fargo,” Cramer said, adding that the bank’s about-face under CEO Charlie Scharf is “finally paying off.”

Goldman Sachs

Cramer reiterated his positivity on Goldman Sachs, and states that he believes the investment banking giant can do it continue his record in 2021 with another strong performance this year. “Goldman is one of the best franchises in the world, but for heaven’s sake it’s selling for less than nine times its profits,” he said.

He said the only reason his charitable foundation doesn’t own Goldman Sachs is because it already owns Morgan Stanley. “I’m a big believer in diversification — you don’t have to have two investment banks in your portfolio,” he said.

MorganStanley

Cramer said he was very impressed Morgan Stanley’s earnings results for Wednesday, noting that sales and earnings per share exceeded Street’s expectations. Its investment banking unit and wealth management are doing well, Cramer said, and spending remains under control.

“Oh, and they’re aggressively buying back shares. asked Cramer rhetorically.

Bank of America

said Cramer Bank of America, the also reported on Wednesday, delivered solid numbers, including the fact that revenue growth of 10% outpaced spending growth of 6%.

“Like Wells Fargo, Bank of America is very sensitive to interest rates, which means it’s in a great position going into 2022,” Cramer said, adding that the only reason his charitable foundation doesn’t own Bank of America is because of that that he likes Wells Fargo better .

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