What it means for retailers and consumers

A cotton field

Scott Olson | Getty Images

The last time cotton prices were this high was in July 2011.

“In 2011 we needed a prayer meeting”, Levi Strauss Chief Executive Chip Bergh told investors on a conference call Wednesday.

Bergh remembered just going to a denim dealer and finding his way around Levi’s store. But he was also staring down a historic rise in cotton prices. Cotton had skyrocketed to over $ 2 a pound as textile demand recovered from a global financial crisis, while India – a major cotton exporter – curtailed supplies to help its domestic partners.

The price of a cotton T-shirt rose an average of $ 1.50 to $ 2, said Jack Kleinhenz, chief economist for the National Retail Federation. Consumers felt the effects. And it also eats away at companies’ profits.

Bergh sits in the camp with analysts and experts who say current cotton price inflation will be less damaging to the industry. Manufacturers and dealers have pricing power. Businesses can pass the higher costs on without destroying consumer demand.

“It’s a completely different situation today,” said Bergh. “We have been able to accept the pricing for the past 12 months and it remains.

cotton Prices rose to a 10-year high on Friday, hitting $ 1.16 a pound, reaching levels not seen since July 7, 2011. The price of the commodity rose about 6% this week and is up 47% since the start of the year. Analysts note that profits are further boosted by traders rushing to cover their short positions.

The start-up results from a number of factors. Last December, the Trump administration did blocked companies in the United States from importing cotton and other cotton products which originated in the western Xinjiang region of China, as it was feared that it was made with forced labor by the Uyghur ethnic group. The ruling, which remained in effect during the Biden administration, has now forced Chinese companies to buy cotton from the US, manufacture goods with that cotton in China, and then sell it back to the US

Extreme weather, including droughts and heat waves, has also wiped out cotton crops in the United States, the world’s largest exporter of this commodity. In India, poor monsoon rains threaten to affect the country’s cotton production.

The momentum already has shares of Hanes brands, a clothing manufacturer known for its underwear and cotton t-shirts. Historically, HanesBrands stocks fall when cotton prices rise. The stock is down 7% over the past week. On Friday alone, stocks lost 5% to close at $ 16.23.

“Real pricing power”

Credit Suisse analyst Michael Binetti said he felt any worries or setbacks in retail stocks due to soaring cotton prices were exaggerated.

He said only 2% of HanesBrands’ cost of goods comes from buying cotton directly. In 2012 this value was higher at 6%.

After the rise in cotton prices in 2011, HanesBrands had raised the prices of various cotton goods three times by a double-digit percentage by 2012 to offset inflation, Binetti said. HanesBrands’ profits were still shrinking from all of the costs that faced them. But ultimately, the company sustained some of those price increases. Today the company is in a healthier position with higher profit margins, said the Credit Suisse analyst.

“We believe stocks are underestimating the strongest momentum this sector has not had in over a decade. Real pricing power,” said Binetti.

Retailers have achieved this pricing power by proactively deviating from discount channels and reducing excess inventory. The Covid pandemic acted as “cover” for companies to accelerate this change. Persistent bottlenecks in the supply chain have also played a role in the depletion of inventory. This dynamic has driven costs so high that companies are raising prices and consumers are still buying.

“We believe inventory will remain rational, margins will remain strong, and retailers will be able to enforce bigger and more consistent price increases than they have been in over a decade,” said Binetti. He expects cotton inflation to be temporary.

UBS analyst Robert Samuels said the retailers he believes will be hardest hit by soaring commodity prices are those who specialize in denim. Cotton makes up more than 90% of the raw materials used to make jeans and other denim items.

“As if retailers don’t have to worry enough about supply chain constraints and labor shortages,” Samuels said in a message to customers.

A stronger tip

But Levi has already tried to allay fears about his denim business.

In his earnings call, Levi said the majority of its product costs were already being negotiated by the first half of next year amid very low single-digit inflation. A mid-single-digit increase is expected for the second half of the year. And Levi said it plans to offset that increase with the pricing measures it has already taken.

Levi has shifted its business from predominantly wholesale to a mixed base that has a growing share of direct sales to consumers. And with strong consumer demand and tighter inventory, the company was able to sell more products at full price.

Cotton accounts for about 20% of the cost of making a pair of Levi’s jeans, said CFO Harmit Singh, with each pair of jeans containing about two pounds of cotton.

Given the timing of his conference call, Levi was one of the first clothing retailers to speak out publicly about rising cotton prices. Others will publish their third quarter results in the coming weeks.

According to analysts at Goldman Sachs, given the timing of the contracted cotton purchases, it will be a while before rising cotton costs even show up in retailers’ profit and loss accounts. And it’s worth noting that cotton prices rose to more than $ 2 a pound in 2011, which is well above where the commodity is traded today.

Still, apparel stocks could come under pressure as higher prices persist. As examples, analysts cited companies such as Ralph Lauren, Gap Inc., Office brands, and Calvin Klein owners PVH. Shares in Kontoor Brands, which owns Wrangler and Lee jeans, fell nearly 6% over the past week, while PVH, Gap and Ralph Lauren were each down less than 2% for the week.

—CNBCs Michael Bloom contributed to this reporting.

Being profitable in boxing means not saying you are sorry

Making money boxing means never having to apologize.

Not for Evander Holyfield risking his life at the age of 58 just to make a few dollars. Especially not to steal money from gullible fans for a farce of a pay-per-view show that would have done terrible damage to the sport, if only it hadn’t been so badly damaged.

Nobody apologized – at least loud enough to hear – among the crew of the Triller Fight Club, a young promotional outfit on the verge of boxing. They managed to get Holyfield in Florida licensed and moved the entire map over there from California at short notice after scheduled headliner Oscar De La Hoya withdrew with what he referred to as COVID-19.

Holyfield also made no apologies after being credited with landing just one punch before being stopped in the first round by a former MMA fighter. The Real Deal now apparently lives on the edge of reality as he suggested after the fight he wanted another fight – this one against Mike Tyson.

Somewhere else in boxing, however, there was an apology. A rare and heartfelt apology from a judge who said he screwed up.

The best thing about it? It came out of nowhere, like a perfect left hook.

Stephen Blea was one of three judges on Friday night in Tucson when home hero Oscar Valdez faced Robson Conceicao in a junior lightweight title bout. It was a familiar position for Blea, who valued having directed more than 60 title fights as a referee in wrestling around the world.

That night, the sold-out crowd cheered Valdez – loudly. In his ring seat, Blea dealt with photographers on one side and a camera team in constant motion on the other.

“I honestly thought I could do my job 100% with no excuses,” he said.

But the noise of the crowd affected Blea early on. He scored some rounds for Valdez that could even be scored or for Conceicao.

The story goes on

In the end, Blea got the winner right. But his lead of 117-110 stood out in an extremely close match (the other two judges had 115-112 Valdez).

The predictable online outrage over his score made Blea think he might be wrong. He watched a replay of the bout and concluded that he should have scored 115-112 or 114-113.

So he apologized not only stunningly, but also unprecedented.

All of the terrible decisions made over the years. All the controversy over a terrible score.

Nobody ever apologized for them.

But a judge in Arizona did.

“The 117-110 score is not accurate and does not represent the action in the ring and I feel like I have let my association, the NABF, down; my organization, the WBC; and above all our sport and the fighters in the ring, ”wrote Blea.

Hopefully people will be careful with Triller because they will have to apologize too. Throwing a man in the ring at the last minute who had just moved in just four years after paying social security was not just a mockery of a sport that needs no further ridicule.

It was also about the callousness of risking a man’s life – or rummaging through his brain – just to clear the income statement.

Triller is hardly alone. Boxing has a long history of promoters and managers who sacrificed fighters for the sake of their wallets. They have ruined careers and ruined lives in a sport so dangerous that every stroke can be the last.

It was hard to see the clips of Holyfield for the short time he was in the ring. The fighter who beat up Tyson a quarter of a century ago and then fouled him at the second meeting looked slow and confused as he tried desperately to find some of the old magic.

Even sadder, Holyfield – who made $ 35 million for the 1997 Tyson second fight – was so desperate for money that he was delusional enough to even step into the ring.

Compare that to Blea, who was so upset with his assessment that he plans to take time out and undergo a thorough retraining program before returning to the ring.

“I am an honorable man with deep love, knowledge and respect for the sport,” he said. “I’m sorry I had a bad night and brought unnecessary controversy into such a sensational fight.”

Real excuse. In boxing, of all things.

Imagine.

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Tim Dahlberg is a national sports columnist for The Associated Press. Write to him at tdahlberg@ap.org or https://twitter.com/timdahlberg

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More AP sports: https://apnews.com/hub/apf-sports and https://twitter.com/AP_Sports

Much less college students means empty dorms, much less cash at Pennsylvania’s public universities – WPXI

PITTSBURGH – University officials at eight of the state’s 14 public universities are trying to find a way to deal with falling enrollments, less money, and whole wings and floors of dorm buildings.

The Pennsylvania State System of Higher Education continues to finalize the details of the merger between a number of the state’s universities as the fall semester rapidly approaches. According to our partners at TribLive.com, the system’s Chancellor Dan Greenstein proposed that $ 12.5 million be allocated this year to pay off dorm building debt. A review of state records found that more than $ 1 billion in dormitory debt remained in 13 out of 14 public universities.

Some schools have done better than others since the turn of the millennium. At Indiana University Pennsylvania officials began a massive dormitory construction and overhaul project from 2006 to 2010, priced at $ 250 million. By 2019, the occupancy rate in IUP’s dormitories had dropped to 68%.

Edinboro University officials embarked on a $ 115 million project to build dormitories and restaurants shortly after the IUD. The occupancy rate fell to 42% by 2019.

In the entire university system, roughly one in five beds was empty.

It is a problem that PSSHE is working to combat, as it is slated to create two new massive institutions by autumn 2022. There are 11 aging buildings slated to be demolished across multiple campuses in the system.

Sustainable investing now not means decrease returns

The CEO of the banking giant Swiss credit told CNBC that the coronavirus pandemic “has greatly accelerated the trend towards ESG and sustainability,” and has sought to highlight the investment opportunity across the board.

“The demand we see – from both our residential and institutional customers – for ESG-compliant products is growing all the time,” said Thomas Gottstein, who spoke with CNBC’s Geoff Cutmore. “It’s also clearly seen as an opportunity to improve returns.”

“Sustainable investments and sustainable returns are not a contradiction in terms, on the contrary,” adds Gottstein. “In many cases, sustainable investments even bring a higher return than non-sustainable investments.”

CNBC Pro Stock Pick and Investment Trends:

There seems to be a shift going on. In February, the Morgan Stanley Institute for Sustainable Investing found that in 2020, “US sustainable equity funds outperformed their traditional benchmark funds by an average total return of 4.3 percentage points”.

“Sustainable US bond funds outperformed their traditional benchmark funds by an average total return of 0.9 percentage points,” it said.

In a statement released at the time, Audrey Choi, Chief Sustainability Officer of Morgan Stanley and CEO of the Institute for Sustainable Investing, said: “The strong risk and return performance of sustainable funds during an exceptionally turbulent year further undermines the persistent misconception that sustainable investing requires a sacrifice. “

The growing influence of ESG

The term ESG stands for environment, social and governance. It has become a hot topic in recent years as a multitude of companies seek to improve their credentials by developing business practices that align with ESG-related criteria.

In his interview with CNBC, Gottstein described the sustainability and ESG movement as “global”.

As an institution, Credit Suisse has placed ESG integration in its “spectrum for sustainable investing”, which also includes thematic investing, impact investing and exclusion.

The bank describes the latter as a strategy in which investors “can decide to actively exclude sectors or companies in controversial business areas – for example weapons or tobacco”.

Regulation and CO2 taxes

Gottstein was also asked if he believed heavy emitters and extractive industries would have to pay higher capital costs and if he saw Credit Suisse having a role in enforcing such a penalty.

Read more about clean energy from CNBC Pro

“I think it’s already happening to some extent,” he replied. “I think companies that are lagging behind the curve in terms of sustainability are already being forced to pay higher costs of capital, be it for borrowing costs or cost of equity,” he added.

“So I’m not a big fan of regulation and enforce higher capital costs from the outside or unnaturally or through regulatory measures because it happens.”

The EU executive, the European Commission, is expected to present plans for a mechanism to adjust CO2 limits in the near future. According to the Commission, this would set “a carbon price for certain goods imported from outside the EU”.

Gottstein was cautious about the introduction of a carbon tax in Europe on imports and his view of using the tax system to encourage behavior change.

“I’m not convinced of the CO2 tax,” he said. “I think market forces are so strong now that I’m not sure if this is necessary because investor demand is now so focused on sustainable products that, in my opinion, no CO2 tax is necessary.”

Why The Jobs Report Means Extra Simple Cash From The Federal Reserve

WASHINGTON, April 28, 2021 – Photo taken on April 28, 2021 shows the Federal Reserve in … [+] Washington, DC, USA. The US Federal Reserve held its key interest rates unchanged at record lows of near zero on Wednesday as economic recovery picks up on advances in COVID-19 vaccination and strong fiscal support. (Photo by Ting Shen / Xinhua via Getty) (Xinhua / Ting Shen via Getty Images)

Xinhua News Agency / Getty Images

The economy created 559,000 new jobs in May, which fell short of Street’s estimate by 671,000. Meanwhile, the unemployment rate slipped to 5.8%, below the Street estimate of 5.9% and below April’s 6.1% figure.

The report also showed that we still have 7.6 million jobs below the February 2020 high. The major industries that grew the most were leisure / hospitality, public and private education, and health and welfare in May.

It is important to note that due to government subsidies, supply shortages, higher inflation and concerns about capacity production, many workers are still staying at home.

With the number of jobs missing estimates in both April and May, the US Federal Reserve is likely to have relieved pressure to curb its bond-buying program. Remember that the Fed has a dual mandate: to promote employment and to keep inflation close to 2%.

If the labor market data were stronger than expected, it would have put pressure on the Fed to end its contingency measures earlier than originally expected. Right now, the Fed has a long way to go to keep printing money, and that tends to be bullish on stocks and other “asset” prices.

Cash Isn’t Pouring Into U.S. Shares. What It Means for the Market.

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According to Bank of America, the average institutional equity fund has 4% of its assets in cash. A lower number would be a sell signal.

Dream time

Many investors are already fully invested in the US stock market – a negative signal for stock prices.

Money has not been aggressively pouring into stocks lately, and this trend is unlikely to reverse anytime soon. It may seem counterintuitive considering that tThe market has grown significantly this yearBut fund managers just don’t get a lot of capital to use.

The net cash flow into U.S. mutual funds and exchange-traded equity funds has been around $ 100 billion so far in 2021, according to Citigroup. That’s not weak, but the deluge of money flowing into stock funds that focus on assets outside of the US has more than doubled.

And with Stock trading at a high levelMoney managers don’t seem ready to buy. The average institutional equity fund, which includes mutual funds and ETFs, currently holds a relatively low 4% of its portfolio in cash, according to strategists at Bank of America. A lower value would be a sell signal and an increase of up to 5% would be a buy indicator. The less cash they have, the less willing they are to use that money to buy stocks.

One of the main reasons money doesn’t pile up in equity funds is that households have had the largest proportion of their wealth in stocks for more than 50 years. Household holdings now account for 47% of total assets, according to Citi.

Citi’s data shows that returns will decline in subsequent years as households invest more in the stock market. When investors were last so heavily invested in 1970, the

S&P 500‘s

The calculated annual return over the next 10 years was less than 5%, while the historical average for the index’s annual return is in the high single digits.

Returns have been negative for the decade after 1999, when stock holdings relative to total assets hit another high, rising to their highest level between 1970 and today.

With demand for stocks likely to be limited, “there is no need to pour cash into the asset class,” Tobias Levkovich, chief US stocks strategist at Citi, wrote in a note.

Stocks can go up from here, but this is further evidence that earnings can be unspectacular compared to for years to come The run since the market bottomed on March 23, 2020.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

New merger means United Manner prescription card might prevent more cash on drugs

MACON, Ga. – The United Way of Central Georgia announced that it is merging its FamilyWize prescription drug card with the SingleCare rebate plan.

That means you could save even more money than you did before.

The merger offers a larger network of pharmacies and bigger prescription discounts.

According to United Way, the card has saved Central Georgians an average of 45% on prescriptions, but now those savings can increase to 80%.

“This card really works for everyone. If you get a prescription and give them the individual care information, the drugstore will run it and they’ll give you either the single card price, the insurance price, or the retail price, which is always lower,” said George McCanless .

The card is free, you don’t have to register and there are no conditions of participation.

Voucher enlargement means much less cash for public colleges | Garrett Clipper

The expansion of vouchers means less money for public schools

As a math teacher at a public school for 26 years, let me first state that I was never against private or religious schools. I believe the voucher initiative began with an honorable mission: to give the poor the opportunity to choose the school of their choice.

Unfortunately, this year it has grown into an elite system with an income of $ 94,500. $ 110,000 next year and $ 145,000 in 2023 – not exactly income for the disadvantaged.

And where does it all end?

On January 31, 2021, our governor commented on the budget, stating that public school teachers would receive 2 percent for the first year and 1 percent for the second year, while the Indiana Education Committee chairman said “no salary increases for school teachers.”

“Really?” Teachers are already buying supplies out of their own pockets. Indiana public schools deserve much more than the 35th place out of 50 states.

Is it the goal of our lawmakers and governors to exempt and / or completely exempt Indiana from all public schools? You have already robbed us of the right:

• Vote for the state superintendent for public education. Now choose for us; and

• Use our taxpayers’ money on education to help make choices. Why are they so against public schools and their teachers?

Finally, I want to thank David Hockley for his letter to the editor: NE teachers have kept schools open that pose a risk to themselves. “And Grace Householder for her editorial,” Teachers who help keep our communities together. ” Thank you both! Reading everyone was a breath of fresh air.

Much less driving throughout COVID means much less cash for CDOT

Pumped people less fuel during the COVID, leaving the Colorado Department of Transportation lacking the funding they normally expect. What is the problem?

DENVER – It’s a catch-22.

Working from home means fewer cars on the road, which leads to less traffic.

Fewer cars on the road means less need to top up the pump.

Less refueling means the Colorado Department of Transportation (CDOT) lacks the funds normally expected.

Due to the pandemic that resulted in changes in work behavior and delayed vehicle registrations, CDOT reported a shortfall of $ 33.7 million for the fiscal year ended June 2020.

Taking into account three budget cycles from July 2019 to June 2022, CDOT expects a vacancy rate of USD 117 million.

“We are trying to future-proof the system by generating both short-term revenue and building a new revenue structure that won’t deteriorate like the gas tax,” said Rep. Matt Gray, D. -Broomfield.

Gray is one of the top Democrats on the House Transportation & Local Government Committee. He worked for years with Senator Faith Winter (D-Westminster), the chairman of the Senate Committee on Transportation and Energy, on solutions for road finance.

“We met 51 meetings today,” said Winter.

CONNECTED: CDOT receives $ 60.7 million for I-70 improvements

PREVIOUS: COVID-19 Costs CDOT Millions of Dollars; That means that for road projects

PREVIOUS: I-70 traffic at a 40-year low in the Eisenhower-Johnson Tunnels

The two have held dozens of stakeholder meetings. Tuesday’s Zoom meetings included talks with engineers and environmentalists.

“We haven’t had a single stakeholder meeting where people say I’m not willing to pay a little more,” said Gray.

What are you working on And who would pay more and how much more?

“Delivery,” said Winter. “Uber and Lyft and ridesharing and car sharing and rental cars.”

All of these industries could receive a new fee for their services that would be used directly on road projects.

“Every time an Amazon package is delivered to my home, every time Grubhub is delivered to my home, I rely on good roads,” said Winter. “You pay for the roads that bring you your service.”

“If you charge more for an Uber or Lyft ride or an iPhone or iPad, the consumer has to pay that in order for that consumer to receive a tax,” said Senator Ray Scott (R-). Grand Junction). “You get into this argument, is a fee a tax or a tax a fee? And obviously people are using creative language with a fee because they don’t want to talk about TABOR, because TABOR is asking voters to approve it.

TABOR, the Taxpayer’s Bill of Rights, requires a vote on all tax increases.

“I spoke to the governor and the governor said he didn’t want anything on the ballot. I understand that the voters said no because of the last five or four attempts,” said Scott.

Most recently, voters rejected three questions about road financing.

In 2019, 54% voted against Proposition CC, which would have used TABOR reimbursement funds on road projects instead of reimbursing them to residents.

Two election questions were rejected in 2018.

Proposal 109 would have funded certain projects by allowing the state to borrow money.

Proposal 110 would have increased the state sales tax on road finance.

Both failed with around 60% against.

“It stinks. We never got it right. Whether legal or on the ballot, we just can’t get it right,” said Scott.

Scott believes there is money to be found, maybe not all of the money needed, but enough of it, with CDOT scrutinizing the checkbook.

“I’m one of those people who say there is always efficiency in government,” said Scott. “Trust me when I tell you there are efficiencies that can be found and get more money on the streets because honestly all Coloradans want the money there. Just put it on the streets and bridges.”

Another idea that Winter and Gray are considering is a fee that everyone pays regardless of the industry.

“The road users also pay a gasoline fee,” said Winter.

A gas fee would be an additional fee that each driver pays at the pump, in addition to state and federal fuel taxes. Fees do not require the vote of the people as they do with tax increases.

“It makes it a difficult discussion when we’re trying to come up with ideas for efficiency and accountability, but the Democrats come right back out with a fee,” said Scott.

How much would any of these fees cost? The ones at the gas pump or for delivery services?

“We haven’t given any numbers to anyone. What we’re doing is listening,” said Gray. “We’re not trying to figure out how we’re going to do it in the next year or two. If we’re back to normal, hopefully it’s the next 50 years. That’s about the next 100 years.”

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