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  • Buffalo Bills’ Damar Hamlin in critical condition after collapsing on field

    Buffalo Bills’ Damar Hamlin in critical condition after collapsing on field

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    Fans look on as the ambulance leaves carrying Damar Hamlin #3 of the Buffalo Bills. Hamlin collapsed after making a tackle against the Cincinnati Bengals during the first quarter at Paycor Stadium on Jan. 2, 2023 in Cincinnati, Ohio.

    Dylan Buell | Getty Images Sport | Getty Images

    Buffalo defensive back Damar Hamlin was in critical condition early Tuesday after the Bills say he suffered a cardiac arrest on the field after making a tackle hours earlier, leading to the indefinite postponement of Buffalo’s pivotal Monday night showdown against the Cincinnati Bengals.

    “Damar Hamlin suffered a cardiac arrest following a hit in our game versus the Bengals. His heartbeat was restored on the field and he was transferred to the UC Medical Center for further testing and treatment,” the Bills said in a statement. “He is currently sedated and listed in critical condition.”

    In a chilling scene, Hamlin was administered CPR on the field, ESPN reported, while surrounded by teammates, some of them in tears, while they shielded him from public view. He was hurt while tackling Bengals receiver Tee Higgins on a seemingly routine play that didn’t appear unusually violent.

    The NFL announced Hamlin’s condition shortly after he was taken to a hospital, but neither the league nor the hospital released any other details about the 24-year-old’s medical condition. The team’s statement was released before its flight arrived back in Buffalo early Tuesday. There was also no immediate update about the future status of the game.

    On the play Hamlin was injured, Higgins led with his right shoulder, which hit the defensive back in the chest. Hamlin then wrapped his arms around Higgins’ shoulders and helmet to drag him down. Hamlin quickly got to his feet, appeared to adjust his face mask with his right hand, and then fell backward about three seconds later and lay motionless.

    Hamlin was treated on the field by team and independent medical personnel and local paramedics, and he was taken by ambulance to University of Cincinnati Medical Center. Teammate Stefon Diggs later joined Hamlin at the hospital.

    An announcement is displayed on the scoreboard after the game between the Cincinnati Bengals and the Buffalo Bills is postponed following the injury of Damar Hamlin #3 at Paycor Stadium on Jan. 2, 2023 in Cincinnati, Ohio.

    Dylan Buell | Getty Images Sport | Getty Images

    About 100 Bills fans and a few Bengals fans gathered on a corner one block from the emergency room entrance, some of them holding candles.

    Jeff Miller, an NFL executive vice president, told reporters on a conference call early Tuesday that the league had made no plans at this time to play the game, adding that Hamlin’s health was the main focus.

    An ambulance was on the field four minutes after Hamlin collapsed while many players embraced, including quarterbacks Buffalo’s Josh Allen and Cincinnati’s Joe Burrow.

    “Please pray for our brother,” Allen tweeted.

    Hamlin collapsed at 8:55 p.m., and when he was taken off the field about 19 minutes later in what seemed like an eternity, the Bills gathered in prayer. A few minutes after the ambulance left the field, the game was suspended, and players walked off the field slowly and into their locker rooms where they awaited word on Hamlin and the game.

    “I’ve never seen anything like it since I was playing,” NFL executive Troy Vincent, a six-time Pro Bowl cornerback during his career, said in the conference call early Tuesday morning. “Immediately, my player hat went on, like, how do you resume playing after seeing a traumatic event in front of you?”

    Hamlin’s uniform was cut off as he was attended to by medical personnel. ESPN reported on its telecast that Hamlin was also given oxygen.

    Buffalo Bills players kneel after teammate Damar Hamlin #3 collapsed following a tackle against the Cincinnati Bengals during the first quarter at Paycor Stadium on Jan. 2, 2023 in Cincinnati, Ohio.

    Kirk Irwin | Getty Images Sport | Getty Images

    Vincent said the league took no steps toward restarting the game and did not ask players to begin a five-minute warmup period as ESPN’s broadcasters had announced.

    “It never crossed our mind to talk about warming up to resume play,” Vincent said. “That’s ridiculous. That’s insensitive. That’s not a place we should ever be in.”

    Vincent said the Bills were returning early Tuesday morning to the team facility in Orchard Park, New York, with the exception of a few players who stayed behind with Hamlin.

    There was a heavy police presence at Buffalo Niagara International Airport ahead of the team’s arrival. Police tape enclosed the entire parking lot area, cutting off access to where the players park.

    The Bengals led 7-3 in the first quarter of a game between teams vying for the top playoff seed in the AFC. Cincinnati entered at 11-4 and leading the AFC North by one game over Baltimore, while AFC East champion Buffalo was 12-3.

    “The NFLPA and everyone in our community is praying for Damar Hamlin,” the players’ union said in a statement. “We have been in touch with Bills and Bengals players, and with the NFL. The only thing that matters at this moment is Damar’s health and well being.”

    The unfinished game has major playoff implications as the NFL enters the final week of the regular season, with the wild-card playoff round scheduled to begin on Jan. 14.

    The aftermath of the injury was reminiscent of when Bills tight end Kevin Everett lay motionless on the field after making a tackle on the second-half opening kickoff in Buffalo’s 2007 season-opening game against the Denver Broncos.

    Everett sustained a spinal cord injury that initially left him partially paralyzed.

    Hamlin spent five years of college at Pittsburgh — his hometown — and appeared in 48 games for the Panthers over that span. He was a second-team All-ACC performer as a senior, was voted a team captain and was picked to play in the Senior Bowl.

    He was drafted in the sixth round by the Bills in 2021, played in 14 games as a rookie and then became a starter this year once Micah Hyde was lost for the season to injury.

    By late Monday night, a community toy drive organized by Hamlin had surged to more than $1.2 million in donations. His stated goal was $2,500.

    Kathryn Bersani and her mother, Gayle, were among the Bills fans who traveled from Buffalo for the game and went to the hospital from the stadium.

    “This is our family Christmas,” Kathryn Bersani said. “We thought it would be a great game. Joe (Burrow) and Josh (Allen) are such great men. Sad, sad time. Such a shock. I just hope he can live a normal life. It stunned us.”

    Chuck and Janet Kohl went to the hospital after watching the game at home.

    “This is much more important than football,” Chuck Kohl said. “Had to come and pray for Mr. Hamlin.”

    Entering the game, the 6-foot, 200-pound Hamlin had 91 tackles, including 63 solo tackles, and 1 1/2 sacks.

    A tweet from the Pitt football account was simple and clear: “Damar Hamlin is the best of us. We love you, 3,” the tweet said, referring to Hamlin by his college jersey number. “Praying for you.”

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  • Highly immune evasive omicron XBB.1.5 variant is quickly becoming dominant in U.S. as it doubles weekly

    Highly immune evasive omicron XBB.1.5 variant is quickly becoming dominant in U.S. as it doubles weekly

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    Gilnature | Istock | Getty Images

    The Covid Omicron XBB.1.5 variant is rapidly becoming dominant in the U.S. because it is highly immune evasive and appears more effective at binding to cells than related subvariants, scientists say.

    XBB.1.5 now represents about 41% of new cases nationwide in the U.S., nearly doubling in prevalence over the past week, according to the data published Friday by the Centers for Disease Control and Prevention. The subvariant more than doubled as a share of cases every week through Dec. 24. In the past week, it nearly doubled from 21.7% prevalence.

    Scientists and public health officials have been closely monitoring the XBB subvariant family for months because the strains have many mutations that could render the Covid-19 vaccines, including the omicron boosters, less effective and cause even more breakthrough infections.

    XBB was first identified in India in August. It quickly become dominant there, as well as in Singapore. It has since evolved into a family of subvariants including XBB.1 and XBB.1.5.

    Andrew Pekosz, a virologist at Johns Hopkins University, said XBB.1.5 is different from its family members because it has an additional mutation that makes it bind to cells better.

    “The virus needs needs to bind tightly to cells to be more efficient at getting in and that could help the virus be a little bit more efficient at infecting people,” Pekosz said.

    Yunlong Richard Cao, a scientist and assistant professor at Peking University, published data on Twitter Tuesday that indicated XBB.1.5 not only evades protective antibodies as effectively as the XBB.1 variant, which was highly immune evasive, but also is better at binding to cells through a key receptor.

    Scientists at Columbia University, in a study published earlier this month in the journal Cell, warned that the rise of subvariants such as XBB could “further compromise the efficacy of current COVID-19 vaccines and result in a surge of breakthrough infections as well as re-infections.”

    The XBB subvariants are also resistant to Evusheld, an antibody cocktail that many people with weak immune systems rely on for protection against Covid infection because they don’t mount a strong response to the vaccines.

    The scientists described the resistance of the XBB subvariants to antibodies from vaccination and infection as “alarming.” The XBB subvariants were even more effective at dodging protection from the omicron boosters than the BQ subvariants, which are also highly immune evasive, the scientists found.

    CNBC Health & Science

    Read CNBC’s latest global health coverage:

    Dr. David Ho, an author on the Columbia study, agreed with the other scientists that XBB.1.5 probably has a growth advantage because it binds better to cells than its XBB relatives. Ho also said XBB.1.5 is about as immune evasive as XBB and XBB.1, which were two of the subvariants most resistant to protective antibodies from infection and vaccination so far.

    Dr. Anthony Fauci, who is leaving his role as White House chief medical advisor, has previously said that the XBB subvariants reduce the protection the boosters provide against infection “multifold.”

    “You could expect some protection, but not the optimal protection,” Fauci told reporters during a White House briefing in November.

    Fauci said he was encouraged by the case of Singapore, which had a major surge of infections from XBB but did not see hospitalizations rise at the the same rate. Pekosz said XBB.1.5, in combination with holiday travel, could cause cases to rise in the U.S. But he said the boosters appear to preventing severe disease.

    “It does look like the vaccine, the bivalent booster is providing continued protection against hospitalization with these variants,” Pekosz said. “It really emphasizes the need to get a booster particularly into vulnerable populations to provide continued protection from severe disease with these new variants.”

    Health officials in the U.S. have repeatedly called on the elderly in particular to make sure they are up to date on their vaccines and get treated with the antiviral Paxlovid if they have a breakthrough infection.

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  • AMC shares hit 52-week low as recent moves and gimmicks fail to win over investors

    AMC shares hit 52-week low as recent moves and gimmicks fail to win over investors

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    The AMC 25 Theatres in Times Square in New York is seen on Tuesday, July 8, 2014.

    Richard Levine | Corbis News | Getty Images

    Branded credit cards and a pay freeze for its CEO have done little to assuage AMC Entertainment shareholders’ growing concerns, as the movie theater chain’s stock hit a fresh 52-week low Wednesday.

    Shares of AMC have fallen more than 85% so far this year, closing at $3.84 a share on Wednesday. The stock drop comes as the company has devised several plans to raise more capital to pay down its debt, and invest in acquisitions and theater upgrades.

    While the company was able to come back from the brink of bankruptcy in 2021, thanks to millions of retail investors who turned its shares into a meme stock, it has struggled to maintain momentum in 2022.

    Concerns about AMC’s massive debt load, which it had amassed prior to the pandemic, have resurfaced as the company dilutes its stock and contends with a slow-to-recover film industry. Additions to the company, including a popcorn business and even a gold mine, have failed to move the needle as the stock price continues to plummet.

    For several quarters, AMC’s revenue has not been enough to outweigh its costs. Much of that is because of a slim slate of Hollywood films, the result of production delays brought on by the pandemic, and lower ticket sales.

    There is little doubt that the domestic and global box office will recover more strongly in 2023, as more films are released to the public. However, moviegoing may not return to prepandemic levels until 2024 or 2025, if at all, analysts warn.

    Where AMC’s trouble lie are in its fundamentals, says Eric Handler, MKM Partners media and entertainment analyst.

    He noted that the recent APE stock issuance and previous stock sales allowed AMC to pay down some of its more than $5 billion in debt, but that the company’s overall valuation hasn’t changed.

    “It’s a negligible impact on valuation,” Handler said. “The credit card is a nice little thing. The popcorn deal is a nice little thing. All these things are low risk and additive to the business.”

    But, he added, things aren’t as nice when you look at AMC’s capital structure – its large number of shares outstanding, combined with its high debt levels.

    “There’s just not a lot of equity value in the shares. And it’s still trading at a substantially higher valuation than where theater operators traditionally trade,” he said. “At some point fundamentals matter.”

    AMC didn’t immediately respond to a request for comment.

    AMC’s latest effort to right the ship is an equity deal with Antara Capital, one of the company’s major debt holders, to raise $110 million via a sale of its APE units to Antara for 66 cents a piece. Antara will also exchange $100 million of AMC notes for 91 million APE units, which would reduce AMC’s annual interest expense by about $10 million.

    “Clearly, the existence of APEs has been achieving exactly their intended purposes,” CEO Adam Aron said in a statement last week. “They have let AMC raise much welcomed cash, reduce debt and in so doing deleverage our balance sheet and allow us to explore possible M&A activity.”

    “However, given the consistent trading discount that we are routinely seeing in the price of APE units compared to AMC common shares, we believe it is in the best interests of our shareholders for us to simplify our capital structure, thereby eliminating the discount that has been applied to the APE units in the market,” he added.

    The company’s board announced last week it intends to hold a special meeting for shareholders to vote on the proposal, which includes seeking permission to enact a reverse stock split of AMC common shares.

    AMC declined to comment further when contacted by CNBC.

    “The steps that they’re taking right now, in terms of converting APE to AMC, if that’s passed, and then doing the reverse stock split, if that’s passed, that gets them pretty much back to where they were in 2019,” said Alicia Reese, an analyst at Wedbush.

    Essentially, AMC wants to provide its shareholders one share for every 10 shares they own, converting the individual stock value from just under to $4 to just under $40.

    This new valuation doesn’t make much sense to several analysts, who note that AMC may have more cash in hand than it did in 2019, but it still has a similar debt load and no dividends.

    “It doesn’t work,” said Reese. “All it’s saying right now is that the shares are still overvalued by quite a lot. And they still have quite a bit to drop.”

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  • U.S. records 100 million Covid cases, but more than 200 million Americans have probably had it

    U.S. records 100 million Covid cases, but more than 200 million Americans have probably had it

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    The U.S. recorded more than 100 million formally diagnosed and reported Covid-19 cases this week, but the number of Americans who’ve actually had the virus since the beginning of the pandemic is probably more than twice as high.

    Covid-19 has easily infected more than 200 million in the U.S. alone since the beginning of the pandemic — some people more than once. The virus continues to evolve into more transmissible variants that dodge immunity from vaccination and prior infection, making transmission incredibly difficult to control as we go into the fourth year of the pandemic.

    The U.S. officially recorded more than 100 million cases as of Tuesday, just under one third of the total population, according to data from the Centers for Disease Control and Prevention. The data isn’t perfect and likely a huge undercount of the actual number of infections, scientists say. While it counts people who’ve tested positive more than once or caught Covid multiple times, it doesn’t capture the number of Covid patients who were asymptomatic and never test or tested at home and didn’t report it.

    Dr. Tom Frieden, former CDC director under the Obama administration, estimates that the reported data reflects less than half of the actual total.

    “There are have been at least 200 million infections in the U.S., so this is a small portion of them,” Frieden said. “The question really is will we be better prepared for Covid and other health threats going forward, and the jury is very much still out on that,” he said.

    The CDC estimated last spring that nearly 187 million people in the U.S. had caught Covid at least once through February 2022, more than double the number of officially reported cases at the time. The estimate was based on a survey of commercial lab data that found about 58% of Americans had antibodies as a result of a Covid infection. The survey did not account for re-infections or antibodies from vaccination.

    The CDC has subsequently recorded more than 21 million confirmed cases from March through Dec. 21 of this year, although this is an underestimate because people who use rapid tests at home are not picked up in the data.

    The more than 21 million additional confirmed cases on top of the CDC’s February estimate of about 187 million total infections gives a low-end estimate of more than 208 million infections since the pandemic began.

    “It’s really hard to stop this virus, and that’s one of the reasons why we’ve shifted the focus to hospitalizations and deaths and not just counting cases,” said Jennifer Nuzzo, an epidemiologist and director of the Pandemic Center at Brown University School of Public Health.

    The U.S. has made significant progress since the darkest days of the pandemic. Deaths have dropped about 90% from the pandemic peak in January 2021 when more than 3,000 people were succumbing to the virus daily before widespread vaccination. Daily hospital admissions are down 77% from a peak of more than 21,000 in January 2022 during the massive omicron surge.

    Despite this progress, deaths and hospitalizations remain stubbornly high given the widespread availability vaccines and treatments. About 400 people are still dying a day from the virus and about 5,000 are admitted to the hospital daily. The virus is still circulating at what would have been considered a high level earlier in the pandemic, with nearly 70,000 confirmed cases reported a day on average, a significant undercount due to testing at home.

    More than a million people have died in the U.S. from Covid since the pandemic began, more than any another country in the world.

    “I think people have gotten hardened to it,” Frieden said of Covid’s toll. “Covid is a new bad thing in our environment, and it’s likely to be here for the long term. We don’t know how this will evolve, whether it will get less virulent, more virulent — have years that get better and worse.”

    White House chief medical advisor Dr. Anthony Fauci, who is stepping down this month, has said the U.S. can consider the pandemic over when Covid hospitalizations and deaths decline to a level similar to the burden from the flu.

    For the first, the two viruses are circulating simultaneously at high levels. From October through the first week of December, flu killed 12,000 people while Covid took more than 27,000 lives during that period.

    “We’re still in the middle of this — it is not over,” Fauci told the radio show “Conversations on Health Care” in November. “Four hundred deaths per day is not an acceptable level. We want to get it much lower than that.”

    Frieden said 95% of people who are dying from Covid aren’t up to date on their shots and 75% of people who would benefit from the antiviral Paxlovid are not receiving it.

    “We should celebrate these great tools we have, but we’re not doing a good job of getting getting them into people and that would not just save lives, but reduce the disruption from from Covid,” he said.

    Dr. Ashish Jha, the White House Covid taskforce coordinator, has said people who are up to date on their vaccines and get treated when they have a breakthrough infection face almost no risk of dying from Covid at this point in the pandemic. Jha has called on the older Americans in particular, who are more vulnerable to severe illness, to get boosted so they have more protection during the holidays.

    “There are still too many older Americans who have not gotten their immunity updated who have not gotten themselves protected,” Jha told reporters at the White House last week.

    Michael Osterholm, a leading epidemiologist, said new Covid variants will pose the biggest threat to progress the U.S. has made in 2023.

    China has eased its stringent zero Covid policy, which sought to crush outbreaks of the virus, in response to widespread social unrest during the fall. Infections are now soaring in the country, raising concern that Covid now has even more space to mutate.

    The virus has continued to mutate into ever more transmissible versions of omicron over the past year, at the same time that immunity from vaccination or prior infection has waned off.

    “We want to believe that after three years of activity, all the immunity that we should have acquired through either vaccination or previous infection should protect us,” said Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “But with waning immunity and the variants — we can’t say that.”

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  • Southwest cancels 60% of flights while air travel disruptions ease elsewhere

    Southwest cancels 60% of flights while air travel disruptions ease elsewhere

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    Aircraft are deiced at General Mitchell International Airport in Milwaukee

    Reuters

    Flight cancellations eased further on Monday but disruptions from severe winter weather across the U.S. lingered, particularly for Southwest Airlines, at the tail end of Christmas weekend.

    Airlines have canceled more than 17,000 U.S. flights since Wednesday, according to FlightAware, as storms brought snow, ice, high winds and bitter cold around the country, derailing air travel from coast to coast. Those conditions slowed down ground crews as they faced severe conditions at airports.

    Carriers are likely to detail the costs of the disruptions when they report results next month, if not earlier.

    Southwest Airlines was hit particularly hard by winter weather over the holiday travel period, along with other issues including unexpected fog in San Diego and staffing shortages at a fuel vendor in Denver, the carrier’s chief operating officer told staff.

    Delta Air Lines, American Airlines, United Airlines, JetBlue Airways and Alaska Airlines were among the carriers affected by the weather that hit last week but had a smaller share of cancellations on Monday.

    Southwest had been canceling many flights proactively in an effort to stabilize its operation, COO Andrew Watterson said. From Wednesday through Saturday, about a quarter of Southwest’s flights were canceled, and two-thirds were delayed, according to FlightAware data.

    The airline apologized to employees for the chaos, which left many struggling to get a hold of crew scheduling services, making it harder to get reassignments or make other changes, or get hotel rooms. Southwest also offered flight attendants working over the holiday extra pay.

    “Part of what we’re suffering is a lack of tools,” Southwest CEO Bob Jordan said in a message to staff on Sunday. “We’ve talked an awful lot about modernizing the operation, and the need to do that. And Crew Scheduling is one of the places that we need to invest in. We need to be able to produce solutions faster.”

    Some pilots were forced to sleep at airports because they were unable to find hotel rooms, said Casey Murray, president of Southwest Airlines Pilots Association, the pilots’ union.

    Southwest’s problems continued on Monday while other carriers stabilized. The carrier had canceled more than 2,300 flights, 58% of its schedule, and 820 more were delayed. Delta had canceled 8% of its mainline flights on Monday, United 5% and American less than 1% with 12 flights scrubbed.

    More than 3,200 U.S. flights were canceled on Monday, and close to 5,000 were delayed.

    Airlines often cancel flights proactively during bad weather to avoid having planes, crews and customers out of place, problems that can make recovery from a storm more difficult.

    Carriers also planned smaller schedules for Christmas Eve and Christmas Day compared with the days leading up to the holidays, making it harder for them to rebook travelers on other flights, and bookings had spiked.

    Passengers check in at the Delta counter at Detroit Metro Airport in Romulus, Michigan, on December 22, 2022. 

    Jeff Kowalsky | AFP | Getty Images

    An American Airlines spokeswoman said the “vast majority of our customers affected by cancellations were able to be reaccommodated.”

    Delta is “seeing steady recovery in our operations, and expect the improvements to continue over the next several hours,” a spokesman said Monday.

    Passengers also faced delayed luggage, however.

    Bill Weaver, 41, said he, his wife and five children drove from Wichita, Kansas to Dallas Fort Worth International Airport for a Friday flight to Cancun after their connecting flight into the American Airlines hub was canceled. The American Airlines flight to Cancun arrived on time but their luggage didn’t get to in Cancun until Monday, and hadn’t made it to their hotel by mid-morning, so they had to spend hundreds of dollars to buy clothing and other essentials at their hotel.

    Weaver, who works in software sales, said he used to travel frequently.

    “I’m used to missing bags and things happen but this is by far the worst I’ve ever seen,” he said.

    Extreme cold and high winds slowed ground operations at dozens of airports. More than half of U.S.-based airlines’ flights arrived late from Thursday through Saturday, with delays averaging 81 minutes, according to FlightAware.

    “Temperatures have fallen so low that our equipment and infrastructure have been impacted, from frozen lav systems and fuel hoses to broken tow bars,” said United Airlines message to pilots on Saturday. “Pilots have encountered frozen locks when trying to re-enter the jet bridge after conducting walk arounds.”

    The FAA said it had to evacuate its tower at United hub Newark Liberty International Airport in New Jersey because of a leak on Saturday.

    JetBlue, meantime, offered flight attendants triple pay to pick up trips on Christmas Eve due to staffing shortages.

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  • Nike stock surges after earnings and revenue top expectations

    Nike stock surges after earnings and revenue top expectations

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    People walk past a store of the sporting goods retailer Nike Inc. at a shopping complex in Beijing, China March 25, 2021.

    Florence Lo | Reuters

    Nike on Tuesday reported quarterly results that easily topped Wall Street’s expectations, even as higher costs squeezed the company’s margins.

    Shares of Nike rose more than 12% after hours Tuesday.

    Here’s how Nike did in its second fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

    • Earnings per share: 85 cents vs. 64 cents expected
    • Revenue: $13.32 billion vs. $12.57 billion expected

    The company reported net income for the three-month period ended November 30 of $1.33 billion, or 85 cents per share, compared with $1.34 billion, or 83 cents per share, a year earlier.

    Nike reported revenue of $13.32 billion, up 17% from $11.36 billion a year earlier.

    Over the past three quarters, Nike has beaten Wall Street’s expectations, but like other retailers, has struggled with inflated inventory levels that arose from supply chain disruptions, rising consumer demand and unpredictable in-transit shipping times.

    Inventories were up 43% to $9.3 billion in the quarter, compared to last year. The merchandise glut led to aggressive markdowns, which helped reduce Nike’s gross margin to 42.9% from 45.9% a year ago. However, inventories declined from $9.7 billion in the previous quarter.

    The company also saw a 10% year-over-year uptick in selling and administrative expenses to $4.1 billion, mostly led by advertising and marketing costs and investment in Nike Direct as the company continues to move away from wholesalers.

    While the focus on Nike Direct was largely to blame for the increased administrative expenses, the investment has paid off. Nike Direct sales were up 16% for the quarter at $5.4 billion and digital sales were up 25%. For the last several quarters, wholesale revenue has been effectively flat but was up 19% for the quarter.

    Nike’s sales in China, its third biggest market by revenue, dropped by 3% compared to last year, continuing a trend the retailer has been contending with as the country deals with lingering Covid lockdowns and a slowdown in retail spending. Overall retail sales in the country fell by 5.9% in November compared to a year ago and clothes and shoe sales plunged by 15.6%, according to the National Bureau of Statistics of China.

    After earnings from Nike’s fiscal first quarter were released in September, executives said the company’s inventory had grown 65% over the last year in North America alone and as a result, the company enacted an aggressive promotional strategy to liquidate the merchandise and make way for new products.

    The plan was a key part of Nike’s strategy to shift its sales directly to consumers and away from wholesalers by improving the in-store experience and enticing customers to shop directly from the company online.

    On Friday, Nike announced its new “Jordan World of Flight Milan” store located on Via Torino, a famed shopping district in the Italian locale well known for its designer shoe stores.

    The initiative reflects the steps Nike is taking to grow the company as a direct-to-consumer brand.

    The store, called a “first-of-its-kind retail experience” by the company in a news release, has a built-in members lounge and will include interactive shopping experiences tailored to fans of the renowned sneaker brand.

    Read the company’s earnings release here.

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  • FedEx earnings sink as soft demand persists

    FedEx earnings sink as soft demand persists

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    FedEx Cargo Plane

    Leslie Josephs | CNBC

    FedEx said Tuesday that its quarterly earnings and sales fell from a year ago and warned of ongoing weakened demand, but said its “aggressive” cost-cutting measures were softening the blow.

    The package delivery giant’s net income fell to $788 million in the three months ended Nov. 30 from $1.04 billion a year earlier. Sales fell to $22.8 billion in that period, down from $23.5 billion a year earlier, falling short of estimates.

    Adjusting for one-time items, FedEx posted per share earnings of $3.18, ahead of analyst estimates but below the $4.83 a share it reported during the same period of last year.

    FedEx forecast earnings-per-share of between $13 and $14, shy of analysts’ expectations for $14.08 per share for the fiscal year.

    Here’s how FedEx performed in its fiscal second quarter of 2023 based on Refinitiv consensus estimates:

    • Earnings per share: $3.18 adjusted vs. $2.82 expected
    • Revenue: $22.8 billion vs. $23.74 billion expected

    In September, FedEx announced cost-cutting measures that included parking planes and closing some offices. It also raised package-delivery rates. The company at the time withdrew guidance, and CEO Raj Subramaniam said he expects the economy to enter a “worldwide recession.” 

    “Our teams have an unwavering focus on rapidly implementing cost savings to improve profitability,” FedEx’s CFO Michael Lenz said in an earnings release. “As we look to the second half of our fiscal year, we are accelerating our progress on cost actions, helping to offset continued global volume softness.”

    FedEx shares are down about 36% for the year as of Tuesday’s close, compared with the S&P 500’s roughly 20% decline.

    FedEx executives will hold a call with analysts to discuss results at 5:30 p.m. ET. They are likely to face questions about the global economy, holiday travel demand and reliability, and its costs for the coming year.

    This is breaking news. Check back for updates.

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  • American Airlines is dropping regional carrier Mesa, citing financial and operational problems

    American Airlines is dropping regional carrier Mesa, citing financial and operational problems

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    American Eagle Bombardier CRJ-900ER aircraft seen at Phoenix Sky Harbor International Airport.

    Alex Tai | SOPA | Getty Images

    American Airlines said Saturday that it will drop Mesa Air for some of its regional flying, citing concerns about its partner’s financial and operational problems, issues that are tied to a rise in costs and the industry’s pilot shortage.

    “As a result, we have concerns about Mesa’s ability to be a reliable partner for American going forward,” Derek Kerr, American’s chief financial officer and president of American’s regional brand American Eagle, said in a staff note, which was seen by CNBC on Saturday. “American and Mesa agree the best way to address these concerns is to wind down our agreement.”

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    The final Mesa flight for American will be on April 3, though American is slashing Mesa flights in March, Kerr said in his note.

    Now, Arizona-based Mesa is planning to transition “all of our CRJ900 flying to United Airlines,” a carrier it already flies for, Mesa’s CEO Jonathan Ornstein said in a note to staff on Saturday, which was seen by CNBC.

    United declined to comment.

    Large carriers like American, United and Delta Air Lines routinely contract regional airlines to fly many shorter routes, and they account for roughly half of departures, though that varies by airline.

    The heart of the problem stems from a shortage of pilots, which is most acute at regional carriers, and has become more severe since travel demand snapped back after a pandemic travel slump. Mesa and other regional airlines have sharply raised wages to attract and retain aviators. American raised wages at its regional subsidiaries.

    American declined to fund higher pilot rates for other regional partners, Mesa’s CEO told staff, adding that they were penalized for not being able to meet pre-Covid contract obligations.

    “With that in mind, we are excited to announce we have negotiated a wind down of our operations with American and are finalizing a new agreement with United which would transition all CRJ900s currently flying for American Eagle to United Express,” Mesa’a Ornstein said.

    American didn’t comment on the Mesa note to staff.

    Mesa had a net loss of about $67 million in the nine months ended June 30, according to a securities filing. Last week, the airline postponed its quarterly earnings report.

    As of Sept. 30, 2021, about 45% of Mesa’s revenue came from American and 52% from United, according to the company’s last annual filing, which was published a year ago. Mesa also flies for DHL.

    American said its agreement with Mesa was mostly tied to its hubs at Dallas/Fort Worth International Airport and Phoenix Sky Harbor International Airport.

    American plans to concentrate its flying with its wholly owned regional subsidiaries like Envoy and PSA, as well as an independent regional carrier SkyWest. Air Wisconsin will also fly for the American Eagle brand, starting its agreement earlier than originally planned, Kerr said.

    “The flying previously done by Mesa will be backfilled by these high-quality regional carriers as well as our mainline operation, ensuring we can continue to build and deliver the very best global network for our customers,” Kerr wrote.

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  • ‘Avatar: The Way of Water’ review roundup: See it on the biggest screen possible, critics say

    ‘Avatar: The Way of Water’ review roundup: See it on the biggest screen possible, critics say

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    James Cameron’s long-awaited sequel to 2009’s “Avatar” arrives in theaters this weekend and it has critics captivated and exasperated.

    Disney’s “Avatar: The Way of Water,” which clocks in at over three hours long, is being hailed as a stunning piece of cinema, generating a “Fresh” rating on Rotten Tomatoes. But, its narrative is thin and, like the original, doesn’t hold up against Cameron’s lofty technical ambitions, several critics said.

    “The Way of Water” follows Jake Sully (Sam Worthington) and Neytiri (Zoe Saldana) who are now the parents of four Na’vi children. The family is driven from their forest home when humans return to re-colonize parts of Pandora.

    Read more: “Avatar: The Way of Water” could be headed for a $175 million opening weekend

    Critics are adamant that audiences should watch “The Way of Water” on the biggest screen possible, lauding the film for its you-won’t-believe-this-is-computer-generated visuals and bombastic sound design.

    But the film’s long runtime was a fault point for many, who found that Cameron’s script was too thin to justify three hours in a theater.

    Here’s what critics thought of “Avatar: The Way of Water” before its Friday release.

    Eric Francisco, Inverse

    Avatar: The Way of Water

    Courtesy: Disney Co. 

    Charlotte O’Sullivan, Evening Standard

    Wenlei Ma, News.com.au

    Those that found themselves returning to the theater again and again to see “Avatar” on the big screen a decade ago, “The Way of Water” is “vivid and enthralling.”

    For those that found the first film overly long and thin on story, “The Way of Water” won’t do much to endear you to the world of Pandora.

    “This sequel will repeat your experience of the first,” wrote Wenlei Ma in her review of the film for News.com.au.

    Avatar: The Way of Water

    Courtesy: Disney Co.

    Justin Chang, Los Angeles Times

    Avatar: The Way of Water

    Courtesy Disney Co.

    Mick LaSalle, San Francisco Chronicle

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  • Gen Z loves Minions, horror and Dwayne ‘The Rock’ Johnson

    Gen Z loves Minions, horror and Dwayne ‘The Rock’ Johnson

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    Group of cheerful people laughing while watching movie in cinema.

    Zoran Zeremski | Istock | Getty Images

    Gen Z has been an enigma to the entertainment industry for years. But now there’s more insight into what they like.

    The short answer: Minions and Dwayne “The Rock” Johnson, according to new data from decision intelligence company Morning Consult.

    The long answer: Generation Z fits into some of the same molds as previous young generations, namely sharing a love for comedy and horror, but this current demographic is also very conscious about how they spend their time, preferring shorter episodes of TV and shorter feature films. They also spend less time consuming news from traditional media sources.

    Aged 13 to 25, this cohort grew up with the internet and social media and was set to inherit a strong economy with a near record-low unemployment rate.

    Then the pandemic hit.

    Studios were already struggling to reach this tech-savvy group before Covid-19 shuttered movie theaters and pushed audiences toward streaming options and social media entertainment like TikTok. Now, Hollywood is scrambling to not only ramp up production, but also to adapt to this younger generation of viewers. And it will be vital for showbiz to understand the generation’s tastes as it matures.

    Minions, Minions, Minions

    “It might not be too much of a surprise that Gen Z is all over social media,” said Saleah Blancaflor, the business of entertainment reporter at Morning Consult. “Our Morning Consult research found that the majority of Gen Z hear about upcoming releases from people posting about them on social media.”

    Blancaflor pointed to the “#GentleMinions” trend, which gained popularity on TikTok during this year’s release of Universal and Illumination’s “Minions: The Rise of Gru,” as a prime example of how Gen Z hears about film releases and can rally to drive box office ticket sales.

    The trend saw groups of young moviegoers dress in formal attire to attend showings of the film. The film grossed $107 million domestically on its opening weekend, with people aged 13 to 24 accounting for 56% of box office receipts, according to PostTrak data from Comscore.

    “Minions: The Rise of Gru” is the sequel to the 2015 film, “Minions,” and spin-off/prequel to the main “Despicable Me” film series.

    Universal

    The Despicable Me franchise that includes “Rise of Gru” has a larger fan base among American Gen Zers than any other entertainment property, according to Morning Consult.

    Sony’s “Jumanji” franchise is second, buoyed by Gen Z’s love of The Rock — Morning Consult said 73% of respondents had a favorable opinion of the action star.

    Next come Disney’s Marvel Cinematic Universe and “Pirates of the Caribbean,” and then Universal’s “Jurassic Park.” Netflix’s “Stranger Things” is sixth, and the DC Universe, owned by Warner Bros. Discovery, ranks 10th.

    Gen Z has grown up with the Minions. The first “Despicable Me” was released a little more than 12 years ago.

    “A lot of the properties that are mentioned in the survey that we did tend to be a little more popular with millennials,” Blancaflor explained. “Lord of the Rings and Star Wars were a little bit lower on the list than Minions or Jumanji. Those films, and even a lot of the Marvel movies, came out a little bit before Gen Z was starting to come to age.”

    This likely means Universal is on the right track greenlighting more Minions content. “Despicable Me 4” is slated for release in July 2024.

    They like to be scared

    In addition to enjoying comedy content, Morning Consult determined that Gen Z likes horror movies significantly more than the general public.

    The firm’s data shows that 1 in 3 Gen Z adults saw a horror movie in theaters this fall, a significant turnout considering Hollywood studios and movie theaters have found it difficult to bring back audiences on a consistent basis since the pandemic.

    “Gen Z is becoming a more reliable audience,” Blancaflor wrote in her report on the cohort. “Particularly, for scary stuff.”

    She noted that recent original horror releases like Sony Pictures’ “Barbarbian” and Paramount Pictures’ “Smile” have surpassed expectations at the domestic box office on the strength of this younger audience.

    “Message to studios: more horror, comedy and horror-comedy Gen Zers’ taste in genres is versatile,” Blancaflor wrote. “They want films and TV shows to scare them almost as much as they want them to make them laugh.”

    As Hollywood looks to lure moviegoers, particularly younger ones, back to theaters, Morning Consult suggests they put marketing dollars toward advertising on platforms like TikTok where Gen Z lives.

    Data shows the majority of the generation hears about upcoming film and television shows from social media posts. More than half of Gen Zers saw, read or heard about the #GentleMinions trend on TikTok and were encouraged to see the film in cinemas and record themselves dressed up in suits and sunglasses.

    Similar results were seen for the social media marketing of “Smile,” which saw hired actors attending televised MLB games, among other locations, and giving creepy smiles in view of cameras.

    How much is too much?

    Additionally, apps like TikTok have shaped how much Gen Z wants to spend watching TV or sitting through a film, Morning Consult reported.

    While prestige TV ushered in the age of lengthy TV shows, like hour-plus-long episodes of “Game of Thrones” on HBO, and blockbusters have evolved to run in excess of three hours, Gen Z is balking at this trend.

    Gen Z wants TV episodes to be 45 minutes or less, Morning Consult reports, with 35% of respondents calling it an ideal runtime and 34% preferring 30-minute episodes. For films, Gen Z said they prefer them to fall between two and two and a half hours in length.

    While some streaming services, like Netflix, have experimented with show length, others have course-corrected too far, Blancaflor said. She pointed to Quibi, the failed short-form entertainment app that tried to make 10-minute episodes of television.

    While Quibi may have understood that younger audiences enjoy more condensed content, its execution was lacking, Blancaflor said, leading the app to shut down after just a few months.

    “How this generation spends their time is important and precious to them,” she said.

    Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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  • SpaceX launches lunar lander for Japanese venture ispace, which aims to create an economy around the moon

    SpaceX launches lunar lander for Japanese venture ispace, which aims to create an economy around the moon

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    A long exposure photo shows the path of SpaceX’s Falcon 9 rocket as it launched the ispace mission on Dec. 11, 2022, with the rocket booster’s return and landing visible as well.

    SpaceX

    Japanese lunar exploration company ispace began its long-anticipated first mission on Sunday, with a SpaceX Falcon 9 rocket launching the venture’s lunar lander from Florida.

    “This is the very, very beginning of a new era,” ispace founder and CEO Takeshi Hakamada told CNBC.

    The Tokyo-based company’s Mission 1 is currently on its way to the moon, with a landing expected near the end of April.

    Founded more than a decade ago, ispace originated as a team competing for the Google Lunar Xprize under the name Hakuto – after a mythological Japanese white rabbit. After the Xprize competition was canceled, ispace pivoted and expanded its goals, with Hakamada aiming to create “an economically viable ecosystem” around the moon, he said in a recent interview.

    Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

    The company has grown steadily as it worked toward this first mission, with over 200 employees around the world – including about 50 at its U.S. subsidiary in Denver. Additionally, ispace has steadily raised funds from a wide variety of investors, bringing in $237 million to date through a mixture of equity and debt. The investors of ispace include the Development Bank of Japan, Suzuki Motor, Japan Airlines, and Airbus Ventures.

    The ispace Mission 1 lander carries small rovers and payloads for a number of government agencies and companies – including from the U.S., Canada, Japan, and the United Arab Emirates.

    The ispace Mission 1 spacecraft deploys from the upper stage of the Falcon 9 rocket on Dec. 11, 2022.

    SpaceX

    Before the launch, ispace outlined 10 milestones for the mission – with the company having completed the first three so far: Preparation for launch, deployment after launch, and then establishing a communication link. Next up is to maneuver in orbit, and then a one-month period flying through space before entering the moon’s orbit. The milestones demonstrate the complexity and difficulty of ispace’s mission, with Hakamada emphasizing both his confidence in the mission, as well as noting that each milestone represents another step forward for the company’s goals.

    “I have 100% trust in our engineering team, they have been doing the right things to accomplish our successful landing on the lunar surface,” Hakamada said.

    If successful, ispace would be the first private company to land on the moon – a feat previously accomplished by global superpowers.

    The lunar landeer for the company’s Mission 1.

    ispace

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  • Lululemon shares fall after company offers weak fourth quarter guidance

    Lululemon shares fall after company offers weak fourth quarter guidance

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    People line up to enter a store during Black Friday shopping at Fashion Outlets of Chicago in Rosemont of Greater Chicago Area, Illinois, the United States, on Nov. 26, 2021.

    Joel Lerner | Xinhua News Agency | Getty Images

    Lululemon on Thursday reported sales and profit that topped estimates, but the company offered softer guidance than expected for the fourth quarter.

    Shares of the company fell more than 8% after hours.

    Here’s what the company reported for the three-month period compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

    • Earnings per share: $2, adjusted, vs. $1.97 expected
    • Revenue: $1.86 billion vs. $1.81 billion expected

    The athletic apparel retailer is a popular mall destination that’s known for its trendy — and pricey — workout apparel and loungewear. Even as inflation hits Americans’ wallets and people dress up again, investors have bet that the brand can keep drawing shoppers and getting them to spend.

    Lululemon’s third-quarter net income rose to $255.5 million, or $2 per share, from $187.8 million, or $1.44 per share a year ago.

    The company’s guidance for the holiday quarter came in weaker than analysts had projected. Lululemon sees fourth quarter per-share earnings of $4.20 to $4.30, compared to estimates of $4.30. It expects revenue of between $2.605 billion to $2.655 billion, versus a projected $2.649 billion.

    The retailer raised its forecast in September, saying it expects 2022 revenue of between $7.865 billion and $7.940 billion, up from the range of $7.610 billion to $7.710 billion it stated last quarter. It also raised its adjusted earnings per share outlook to a range of $9.75 to $9.90, from last quarter’s guidance of $9.35 to $9.50 adjusted.

    Shares of the company are down more than 4% so far this year. The stock has outperformed the S&P 500 Index, which is down about 17% during the same period. It closed Thursday at $374.51, bringing the market cap to $47.75 billion.

    We haven't seen a drop in demand over inflation concerns, says Ledbury CEO

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  • Carvana shares tank as bankruptcy concerns grow for used car retailer

    Carvana shares tank as bankruptcy concerns grow for used car retailer

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    Ernest Garcia III, CEO of Carvana, speaks to CNBC on the floor of the New York Stock Exchange, March 7, 2019.

    Brendan McDermid | Reuters

    Shares of Carvana plummeted by more than 40% in Wednesday morning trading after the embattled online used car retailer’s largest creditors signed a deal binding them to act together in negotiations with the company.

    The pact, as first reported by Bloomberg, includes creditors such as Apollo Global Management and Pacific Investment Management that hold around $4 billion of Carvana’s unsecured debt, or about 70% of the total outstanding. The agreement will last at least three months.

    Such creditor agreements are viewed as a way to streamline negotiations around new financing or a debt restructuring. They have assisted in preventing creditor fights that have complicated other debt restructurings in recent years.

    A person with knowledge of the situation who is not authorized to speak publicly on the matter confirmed details of the deal Wednesday to CNBC. They downplayed the deal signaling any increased concerns for bankruptcy, citing the company’s meaningful liquidity runway.

    Following the creditor deal, Wedbush analyst Seth Basham said Wednesday that bankruptcy is becoming more likely for Carvana and downgraded its stock to underperform from neutral and slashed his price target to $1 from $9 per share.

    JPMorgan said Wednesday that the creditor deal signals that Carvana “may have initiated debt restructuring negotiations with bond holders” but the “possibility of imminent Ch. 11 filing seems low.”

    “We believe CVNA has enough cushion through shortterm revolvers to get through till end of 2023, and a severe recession could accelerate this by 1-2 quarters,” Rajat Gupta said in an investor note.

    Carvana did not immediately respond for comment. Pimco and Apollo declined to comment.

    Trading of Carvana shares was briefly halted Wednesday morning after the stock fell below $5 a share for the first time since the company went public in 2017. The stock fell below $4 a share after the halt was lifted. Carvana’s stock has plummeted by about 97% this year after reaching an all-time intraday high of $376.83 per share on Aug. 10, 2021.

    Carvana has received a litany of analyst downgrades since the company reported disappointing third-quarter earnings last month and gave a bleak outlook.

    The company grew exponentially during the coronavirus pandemic, as shoppers shifted to online purchasing rather than visiting a dealership, with the promise of hassle-free selling and purchasing of used vehicles at a customer’s home.

    But Carvana did not have enough vehicles to meet the surge in consumer demand or the facilities and employees to process the vehicles it did have in stock. That led Carvana to purchase ADESA and a record number of vehicles amid sky-high prices as demand slowed amid rising interest rates and recessionary fears.

    Carvana has repeatedly borrowed money to cover its losses and growth initiatives, including an all-cash $2.2 billion acquisition earlier this year of Adesa’s U.S. physical auction business from KAR Global.

    Last week, Bank of America downgraded Carvana to neutral, saying that the company badly needs more liquidity as it struggles to turn profitable. Analyst Nat Schindler said the company “is likely to run out of cash by the end of 2023. There is no indication yet of a potential cash infusion.” 

    And last month, Morgan Stanley pulled its rating and price target for the stock. Analyst Adam Jonas cited deterioration in the used car market, company’s debt and a volatile funding environment for the change. He also said the company’s stock could be worth as little as $1.

    — CNBC’s Michael Bloom contributed to this report.

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  • Senate approves bill enforcing railroad labor agreement before strike deadline, sends to Biden

    Senate approves bill enforcing railroad labor agreement before strike deadline, sends to Biden

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    The Senate passed legislation that would force a tentative rail labor agreement and thwart a national strike.

    A separate vote on adding seven days of paid sick leave to the agreement failed.

    The approved bill, passed by a vote of 80 to 15, now goes to President Joe Biden, who had urged Congress to act quickly before this month’s strike deadline and “send a bill to my desk for my signature immediately.” The measures come after talks had stalled between the railroads and four unions, which had previously rejected the agreement.

    Biden has said he was reluctant to override the vote against the contract by some unions but stressed that a rail shutdown would “devastate” the economy. Labor groups have said that enforcing an agreement with the legislation denies them the right to strike.

    In a statement after the Senate vote, Biden said he would sign the bill into law “as soon as Congress sends it to my desk.”

    “I know that many in Congress shared my reluctance to override the union ratification procedures. But in this case, the consequences of a shutdown were just too great for working families all across the country,” Biden said in the statement.

    An aerial view of shipping containers and freight railway trains at the BNSF Los Angeles Intermodal Facility rail yard in Los Angeles, California, September 15, 2022.

    Bing Guan | Reuters

    The legislation, which was approved by the House on Wednesday, enacts new contracts providing railroad workers with 24% pay increases over five years from 2020 through 2024, immediate payouts averaging $11,000 upon ratification and an extra paid day off.

    The House on Wednesday approved a separate measure that would have added seven days of paid sick leave to the contract instead of just one. That measure was defeated in the Senate vote. Paid sick leave has been the main point of disagreement during negotiations between railroads and the unions.

    SMART Transportation Division, which represents some of the rail workers, said in a statement it was “unfortunate” that its members weren’t able to approve the labor agreement, but thanked Biden and congressional leadership for attempting to “achieve more.”

    “Our members are forced to work more hours, have less stability, suffer more stress and receive less rest. The ask for sick leave was not out of preference, but rather out of necessity,” the union said. “No American worker should ever have to face the decision of going to work sick, fatigued or mentally unwell versus getting disciplined or being fired by their employer, yet that is exactly what is happening every single day on this nation’s largest freight railroads.”

    Rail union presidents: We will support those who support us now in the general election

    Jeremy Ferguson, president of SMART-TD, told CNBC earlier Thursday there’s growing concern that some rail workers will quit after receiving their backpay without guaranteed paid sick time.

    “I keep hearing that some are going to do that. It’s always a possibility,” he said. “I hope that doesn’t happen. I want every member to stay employed and enjoy all the benefits that we do have and we are going to need more employees if we’re going to have adequate time off.”

    The parties had until Dec. 9 to reach an agreement before workers promised a strike, which the industry estimated would cost the U.S. economy $2 billion per day. Without an agreement, rail movement of certain goods was set to be curtailed as soon as this weekend in preparation for the strike.

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  • Tesla is still dominant, but its U.S. market share is eroding as cheaper EVs arrive

    Tesla is still dominant, but its U.S. market share is eroding as cheaper EVs arrive

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    A Tesla Model 3 vehicle is on display at the Tesla auto store on September 22, 2022 in Santa Monica, California. Tesla is recalling over 1 million vehicles in the U.S. because the windows can pinch a person’s fingers while being rolled up.

    Allison Dinner | Getty Images

    Tesla is still the top-selling electric vehicle brand in the U.S., but its dominance is eroding as rivals offer a growing number of more affordable models, according to a report Tuesday by S&P Global Mobility.

    The data firm found that Tesla’s market share of new registered electric vehicles in the U.S. stood at 65% through the third quarter, down from 71% last year and 79% in 2020. S&P forecasts Tesla’s EV market share will decline to less than 20% by 2025, with the number of EV models expected to grow from 48 today to 159 by then.

    A drop in Tesla’s U.S. market share was expected, but the rate of the decline could be concerning for investors in Elon Musk’s autos and energy company. As Musk focuses attention on fixing his recently acquired social media company, Twitter, Tesla shares closed down by about a point to $180 on Tuesday. Tesla’s stock has declined by almost half year to date.

    S&P reported that Tesla is slowly losing its stranglehold on the U.S. EV market to fully electric models that are now available in price ranges below $50,000, where “Tesla does not yet truly compete.” Tesla’s entry-level Model 3 starts at about $48,200 with shipping fees, but the vehicles typically retail for higher prices with options.

    “Tesla’s position is changing as new, more affordable options arrive, offering equal or better technology and production build,” S&P said in the report. “Given that consumer choice and consumer interest in EVs are growing, Tesla’s ability to retain a dominant market share will be challenged going forward.”

    Read more about electric vehicles from CNBC Pro

    The new data follows a Reuters report Monday that Tesla is developing a revamped version of its entry-level Model 3 aimed at cutting production costs and reducing the components and complexity in the interior.

    During the company’s third-quarter earnings call in October, Musk said Tesla was finally working on a new, more affordable model that he first teased in 2020.

    “We don’t want to talk exact dates, but this is the primary focus of our new vehicle development team, obviously,” he said, adding that Tesla had completed “the engineering for Cybertruck and for Semi.”

    He described the future vehicle as something “smaller,” that will “exceed the production of all our other vehicles combined.”

    Stephanie Brinley, associate director of AutoIntelligence for S&P Global Mobility, noted that Tesla’s unit sales are expected to increase in coming years despite the decline in its market share.

    Tesla’s current leadership in EVs is over a relatively insignificant market. Despite the amount of attention surrounding EVs, sales of all-electric and plug-in hybrid electric vehicles — which include electric motors as well as an internal combustion engine — remain miniscule.

    Of the 10.22 million vehicles registered in the U.S. through the third quarter, roughly 525,000, or 5.1%, were all-electric models. That’s up from 334,000, or 2.8%, through the third quarter of 2021, according to S&P.

    The majority of the EVs registered through September — or nearly 340,000 — were Teslas, according to S&P. The remaining vehicles were divided, very unevenly, among 46 other nameplates.

    But Tesla’s success in the market as well as government incentives have all but forced traditional automakers to make an effort in the growing EV segment.

    The Ford Mustang Mach-E, ranked third in EV registrations, is the only non-Tesla vehicle in the top five rankings, S&P said. Those EVs were followed by the Chevrolet Bolt and Bolt EUV, Hyundai Ioniq 5, Kia EV6, Volkswagen ID.4 and Nissan Leaf.

    S&P noted that the growth in EVs is largely coming from current owners of Toyota and Honda vehicles. Both of the automakers are well-known for fuel-efficient vehicles but have been slow to transition to all-electric models.

    To help curb carbon and other emissions from traditional gas-powered vehicles, several states and the federal government are encouraging the transition to fully electric vehicles with incentives such as tax breaks.

    Transportation is responsible for 25% of carbon emissions from human activity globally, according to estimates by the nonprofit International Council on Clean Transportation.

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  • Kroger, Albertsons CEOs defend grocery tie-up, say deal won’t hurt competition

    Kroger, Albertsons CEOs defend grocery tie-up, say deal won’t hurt competition

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    Albertsons and Kroger supermarkets

    Bridget Bennett | Bloomberg | Getty Images; Brandon Bell | Getty Images

    The battle over whether grocery giants Kroger and Albertsons should be allowed to combine is heating up.

    On Tuesday, leaders of the two companies defended their proposed merger at a congressional hearing in Washington, where they faced a series of questions about how the deal could shake up the competitive landscape — and potentially the prices that consumers pay at the store.

    “I just don’t see less competition going forward,” Kroger CEO Rodney McMullen said at the hearing by the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights. “It’s easy for customers to make a right turn or a left turn.”

    Kroger announced plans in October to acquire Albertsons in a deal valued at $24.6 billion. The Cincinnati-based company is the second-largest grocer by market share in the United States, behind Walmart, and Albertsons is fourth, after Costco, according to market researcher Numerator. Together, Kroger and Albertsons would be a closer second to Walmart.

    At the hearing Tuesday, McMullen said that the combined company could help lower food prices and improve the customer experience, especially at a time when grocers are racing to adapt to changes like online shopping. He said retailers have to keep reinventing themselves to stay relevant and convince customers to drive to their stores.

    DC AG Karl Racine sues Albertsons, Kroger over $4 billion dividend payout

    Yet the proposed merger has faced intense pushback from elected officials of both political parties and opposition from the United Food and Commercial Workers, a major grocery union that represents thousands of the grocers’ employees.

    Sen. Amy Klobuchar, a Democrat from Minnesota, led the hearing Tuesday along with Sen. Mike Lee, a Republican from Utah. Both challenged the companies on their actions, including Kroger’s $1 billion in share buybacks announced last year and plans to pay dividends to shareholders as well as previous deals, such as Albertsons’ acquisition of Safeway.

    They emphasized that the proposed deal comes at a time when groceries are taking up more of American families’ budgets. Food prices have surged as inflation hovers near four-decade highs. Prices of everyday items, including butter, eggs, poultry and milk have jumped by double-digits from the year-ago period as of October, according to the most recent federal data available.

    Skeptical senators, workers

    The hearing offers a preview of the bigger antitrust battle ahead.

    For Kroger and Albertsons, the argument is clear: combining will help them weather dramatic industry changes. Online grocery sales are eating into already thin margins. New players, such as deep discounters like Aldi and e-commerce players like Amazon, are also pressuring traditional grocers.

    “The marketplace for groceries over the past decade has completely transformed making the competition for consumers fierce,” said Albertsons CEO Vivek Sankaran said at the hearing. “The best way to compete with mega stores like Walmart and highly capitalized online companies like Amazon will be through a merger with Kroger.”

    He argued that even as a combined company, Kroger and Albertsons will still be small compared to Walmart, Costco and Amazon.

    Ahead of the hearing, members of the UCFW — which represents over 100,000 Kroger and Albertsons workers — shared their worries at a press conference on Capitol Hill. Their concerns ranged from the potential loss of their pension plans to higher food prices to job losses.

    Albertsons employees who belong to the union remembered the impact of past mergers. Judy Wood, a longtime cake decorator for the grocery giant, said she and her coworkers were shocked by the store closures that resulted after Safeway’s merger with Albertsons, which was announced in 2014.

    Union members also railed against the private equity firms that will benefit from the proposed $4 per share special dividend for Albertsons shareholders announced in conjunction with the deal. Cerberus Capital Management owns a 28.4% stake in Albertsons, according to Factset. For now, the dividend payout is on hold until at least Dec. 9 due to a ruling in Washington state court.

    McMullen said on Tuesday that the company does not plan to close stores or lay off employees, but said it will work with the Federal Trade Commission, if needed, to spin off stores for competitive reasons.

    As part of its original proposal, Kroger said it already had a plan to overcome concerns about the merger − divesting between 100 and 375 stores in a spinoff. Kroger and Albertsons would work together — and with the FTC — to decide which stores would be part of the spinoff company.

    On Tuesday, McMullen said the company is in “active conversations” with unions about the deal and what it means for its workforce. He said the deal would ultimately expand opportunities for employees. Kroger will also spend $1 billion on higher wages and better benefits for store employees after the deal closes, he said.

    “A successful business is what creates his job security,” he said. “And we believe we’ll have an incredibly successful business that creates job security.”

    Some grocery competitors and industry experts also opposed the deal at the hearing.

    Michael Needler, chief executive officer of Fresh Encounter, an independent grocery chain based in Northwest Ohio, said companies like Walmart and Amazon use their size to pressure suppliers for lower prices and better terms. Instead of creating an even playing field, he said, the Kroger-Albertsons deal would create yet another power player who makes it difficult — if not impossible — for smaller grocers to compete.

    For instance, he said, larger grocers have run predatory campaigns against his own chain by offering coupons for free groceries.

    “I don’t know any other way to point out predatory pricing than buying your competition,” he said.

    Sumit Sharma, a senior researcher who specializes in antitrust matters and competition at Consumer Reports, also said at the hearing that he does not see any benefits to combining the companies. Instead, he said retailers would have less reason to increase employee wages. Shoppers would have fewer choices and more sticker shock.

    “Even if they sell a few stores, that is going to take competition out of the market,” he said. “So prices will go up.”

    CNBC’s Amelia Lucas contributed to this report.

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  • Amazon used AWS on a satellite in orbit to speed up data analysis in ‘first-of-its kind’ experiment

    Amazon used AWS on a satellite in orbit to speed up data analysis in ‘first-of-its kind’ experiment

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    An image captured by the ION Elysian Eleonara satellite in January 2022.

    D-Orbit

    Amazon’s cloud computing division successfully ran a software suite on a satellite in orbit, in a “first-of-its-kind” experiment, the company announced Tuesday.

    AWS, or Amazon Web Services, conducted the prototype satellite software demonstration through partnerships with Italian company D-Orbit and Swedish venture Unibap. The experiment was conducted over the past 10 months in low Earth orbit, using a D-Orbit satellite as the test platform.

    The success of the AWS demo has implications across the space industry, as spacecraft – meaning anything from space stations to satellites – face a bottleneck in both data storage and communications while in orbit.

    A “downlink,” the process of transferring data from orbit, requires a spacecraft connect to a ground station, with limitations such as the speed of the connection, or the time window in which the spacecraft is above the ground station.

    AWS’ software automatically reviewed images to decide which were the most useful to send to the ground. It also reduced the size of images by up to 42%.

    “We demonstrated the capability to increase the [satellite’s] productivity,” AWS vice president Max Peterson told CNBC.

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    Peterson added that the experiment also showed that AWS can help companies perform “insight operations on the satellite, instead of having to wait until you can downlink back to Earth.”

    “We can train models to recognize practically anything … [giving] the ability to both improve the utilization of a really expensive asset in space, and be able to take huge amounts of data and get insights and translate it into action faster,” Peterson said.

    AWS has steadily built out its Aerospace and Satellite Solutions unit since its establishment in 2020, with the company providing cloud services to a variety of customers and partners across the space sector.

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  • U.S. criticizes China’s zero Covid strategy, says Beijing needs to boost vaccination among elderly

    U.S. criticizes China’s zero Covid strategy, says Beijing needs to boost vaccination among elderly

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    People hold white sheets of paper and flowers in a row as police check their IDs during a protest over coronavirus disease (COVID-19) restrictions in mainland China, during a commemoration of the victims of a fire in Urumqi, in Hong Kong, China November 28, 2022. 

    Tyrone Siu | Reuters

    The White House on Monday criticized Beijing’s zero Covid strategy as ineffective and said the Chinese people have a right to peacefully protest.

    “We’ve long said everyone has the right to peacefully protest, here in the United States and around the world. This includes in the PRC,” a spokesperson for President Joe Biden’s National Security Council said in a statement.

    Rare protests broke out against Covid lockdowns in Beijing, Shanghai, Urumqi and other cities over the weekend. Nearly three years after the virus first emerged in Wuhan, China is still imposing strict social controls to quash Covid outbreaks, while countries such as the U.S. have largely returned to normal life.

    “We’ve said that zero COVID is not a policy we pursuing here in the United States,” the NSC spokesperson said. “And as we’ve said, we think it’s going to be very difficult for the People’s Republic of China to be able to contain this virus through their zero COVID strategy.”

    The U.S. Covid response is focused on increasing vaccination rates and making testing and treatment more accessible, the spokesperson said.

    China’s stringent Covid controls have kept deaths very low compared to the U.S., but the measures have also deeply disrupted economic and social life. In China, more than 30,000 people have died from Covid since the pandemic began, according to the World Health Organization. In the U.S., more than 1 million people have died.

    Dr. Anthony Fauci, the top infectious disease expert in the U.S., said China’s approach to Covid “doesn’t make public health sense.” Vaccination rates among the elderly, one of the groups most vulnerable to Covid, are low in China compared to other countries. The vaccination campaign in China focused on people in critical positions first, those ages 18 to 59 next, and only then people ages 60 and over.

    “If you look at the prevalence of vaccinations among the elderly, that it was almost counterproductive, the people you really needed to protect were not getting protected,” Fauci told NBC’s Meet the Press on Sunday.  A temporary lockdown might make sense if the goal was to buy time to boost vaccination rates but China doesn’t seem to be doing that, he said.

    “It seems that in China, it was just a very, very strict extraordinary lockdown where you lock people in the house but without any seemingly endgame to it,” Fauci said.

    As of August, about 86% of people ages 60 and older in China were fully vaccinated and 68% had received a booster, according to a September report from China’s Center for Disease Control and Prevention. By comparison, 92% of older Americans were fully vaccinated and 70% had received a booster during that same period.

    Fauci said China’s domestically developed vaccines are also not very effective.

    The authors of the China CDC report said older people are more skeptical of the vaccine. The clinical trials didn’t enroll enough older people and as a consequence there wasn’t sufficient data on the vaccine’s safety and efficacy for this age group when the immunization campaign started, they wrote.

    Dr. Ashish Jha, head of the White House Covid task force, said China should focus on making sure the elderly get vaccinated.

    “That I think is the path out of this virus. Lockdowns and zero COVID is going to be very difficult to sustain,” Jha told ABC’s “This Week” on Sunday.

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  • Black Friday online sales to hit new record, expected to top $9 billion

    Black Friday online sales to hit new record, expected to top $9 billion

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    A Black Friday sale sign in the clothing department of the Macy’s flagship store on Black Friday in New York, US, on Friday, Nov. 25, 2022.

    Jeenah Moon | Bloomberg | Getty Images

    This will likely end up the biggest Black Friday ever online.

    Overall online sales for the day after Thanksgiving are expected to top $9 billion, according to Adobe, which tracks sales on retailers’ websites. That would be a record.

    Through 6 p.m. ET, shoppers spent $7.28 billion at websites. That number could balloon to as much as $9.2 billion before the day is done, Adobe said.

    The record-breaking spending comes on the heels of a strong day of Thanksgiving shopping, in which consumers shelled out an all-time high $5.29 billion online, up 2.9% year-over-year. Typically, shoppers spend about $2 billion to $3 billion online in a day, according to Adobe. 

    The company said shoppers were picking up Apple products such as watches and AirPods, smart speakers and televisions, espresso machines, and gaming consoles, as well as toys from Funko, Hatchimals and Squishmallows.

    Adobe noted that mobile shopping also hit a record high this year, with sales from smartphones accounting for 55% of online sales on Thanksgiving Day. These sales are expected to account for 53% of total Black Friday sales, the company predicts.

    Additionally, strong discounts enticed inflation-weary consumers to put more items in their carts. The average order volume was up 12% during the season. Toys, in particular, drove significant demand, with deals as high as 33% off.

    For retailers, these numbers may be a promising indicator about the weeks ahead. Early holiday forecasts have been muted. Target, Macy’sNordstrom and other companies reported a lull in sales in late October and early November. Consumer sentiment has weakened in the past month as inflation hovers near four-decade highs.

    That has ratcheted up the pressure for retailers on Black Friday weekend — a time that’s often associated with the biggest deals of the holiday shopping season.

    Adobe expects Cyber Week, the five days from Thanksgiving Day through Cyber Monday, will generate around $34.8 billion in online spending, up nearly 3% compared to 2021. Cyber Monday is expected to be the biggest online shopping day, with sales slated to top $11.2 billion, the company forecast.

    — CNBC’s Melissa Repko contributed to this report.

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  • Omicron boosters probably aren’t very effective against mild Covid illness, but will likely prevent hospitalizations, experts say

    Omicron boosters probably aren’t very effective against mild Covid illness, but will likely prevent hospitalizations, experts say

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    A healthcare worker administers a dose of the Pfizer-BioNTech Covid-19 vaccine at a vaccination clinic in the Peabody Institute Library in Peabody, Massachusetts, U.S., on Wednesday, Jan. 26, 2022.

    Vanessa Leroy | Bloomberg | Getty Images

    The new omicron Covid boosters probably aren’t very effective at preventing Covid infections and mild illness, but they will likely help keep the elderly and other vulnerable groups out of the hospital this winter, experts say.

    The Centers for Disease Control and Prevention, in a real-world study published this week, found the boosters are less than 50% effective against mild illness across almost all adult age groups when compared to people who are unvaccinated.

    For seniors, the booster was 19% effective at preventing mild illness when administered as their fourth dose, compared to the unvaccinated. It was 23% effective against mild illness when given as their fifth dose.

    Though the vaccine’s effectiveness against mild illness was low, people who received the boosters were better off than those who did not. The booster increased people’s protection against mild illness by 28% to 56% compared to those who only received the old shots, depending on age and when they received their last dose.

    The Food and Drug Administration authorized the boosters in late August with the goal of restoring the high levels of protection the vaccines demonstrated in late 2020 and early 2021. At that time, the shots were more than 90% effective against infection. But the first real-world data from the CDC indicates that the boosters aren’t meeting those high expectations.

    “The boosters give you some additional protection but it’s not that strong, and you shouldn’t rely on it as your sole protective device against infection,” said John Moore, a professor of microbiology and immunology at Weill Cornell Medical College.

    Moore said people at higher risk from Covid have every reason to get a booster since it modestly increases protection. But he said common sense measures such as masking and avoiding large crowds remain important tools for vulnerable groups since the boosters aren’t highly effective against infection.

    The CDC study looked at more than 360,000 adults with healthy immune systems who tested for Covid at retail pharmacies from September to November when omicron BA.5 was dominant. The participants received either the booster, got two or more doses of the old shots or they were unvaccinated. It then compared those who tested positive for Covid with those who did not.

    The study did not evaluate how well the boosters performed against severe disease, so it’s still unclear whether they will provide better protection against hospitalization than the old shots. The CDC in a statement said it will provide data on more severe outcomes when it becomes available.

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    Andrew Pekosz, a virologist at Johns Hopkins University, said the fact that the shots are providing some protection against infection in an era of highly immune evasive omicron subvariants is a good sign that they will provide strong protection against hospitalization. The vaccines have always performed better against severe disease than mild illness, he said.

    “It’s better than nothing. Certainly, it doesn’t sort of show that the protection is incredibly high against infection,” Pekosz said. “I would expect that you would then see even greater protection from hospitalization or death.”

    Dr. Paul Offit, a member of the FDA’s vaccine advisory committee, said trying to prevent mild illness is not a viable public health strategy because the antibodies that block infection simply wane over time.

    “Protection against mild disease just isn’t that good in the omicron subvariant era. The goal is protecting against severe disease,” said Offit, an infectious disease expert at Children’s Hospital of Philadelphia who helped develop the rotavirus vaccine.

    Dr. Celine Gounder, a senior public health fellow at the Kaiser Family Foundation, said she’s not alarmed by the data. Reducing risk by even a modest amount at the individual level can have a significant positive effect on public health at the population level.

    “If you can reduce risk among the elderly by even 30%, even 20%, that is significant when 90% of the COVID deaths are occurring in that group,” Gounder said. “For me, what’s really gonna matter is are you keeping that 65 year old out of the hospital.”

    The boosters, called bivalent vaccines, target both omicron BA.5 and the original Covid strain that first emerged in Wuhan, China in 2019. The original shots, called monovalent vaccines, only include the first Covid strain.

    It’s still unclear how the boosters will perform against more immune evasive omicron subvariants, such as BQ.1 and BQ.1.1, which are now dominant in the U.S. Pfizer and Moderna last week said early clinical trial data shows the boosters induce an immune response against these subvariants.

    About 11% of those eligible for the new booster, or 35 million people, have received it so far, according to CDC data. About 30% of seniors have received the shot.

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