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  • Alec Baldwin ‘Rust’ manslaughter case dismissed by judge

    Alec Baldwin ‘Rust’ manslaughter case dismissed by judge

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    US actor Alec Baldwin participates in a pretrial hearing in Santa Fe, New Mexico, on July 8, 2024. 

    Ross D. Franklin | AFP | Getty Images

    A New Mexico judge on Friday dismissed the criminal involuntary manslaughter case against Alec Baldwin on the third day of the actor’s trial, after ruling that prosecutors improperly kept evidence about live ammunition potentially related to the case secret from defense lawyers.

    Judge Mary Marlowe Sommer tossed the case against Baldwin, which related to the October 2021 accidental shooting death of cinematographer Halyna Hutchins on the set of his movie “Rust,” with prejudice. That means prosecutors cannot retry the “30 Rock” actor.

    Baldwin wept as the decision was announced, on what was the third day of trial in the case in state court in Santa Fe. He soon after embraced his wife Hilaria.

    “There is no way for the court to right this wrong,” Sommers said, referring to the prosecution’s actions. “The sanction of dismissal is the only warranted remedy.”

    Under U.S. criminal law, prosecutors must turn over evidence to defense lawyers if that evidence is potentially helpful to a defendant.

    A defense lawyer for Hannah Gutierrez-Reed, who served as the armorer on the “Rust” production, in a statement said he will seek her immediate release from prison, where she is currently serving an 18-month prison sentence after being convicted in March of involuntary manslaughter in Hutchins’ death.

    Guitierrez-Reed’s lawyer, Jason Bowels, said the prosecution in Baldwin’s and his client’s case had engaged in an “absolutely shocking” pattern of misconduct.

    Baldwin in an Instagram post on Saturday morning wrote, “There are too many people who have supported me to thank just now.”

    “To all of you, you will never know how much I appreciate your kindness toward my family,” Baldwin wrote.

    Brian Parrish, a lawyer for Hutchins’ widower Matthew Hutchins, in a statement, said, “We respect the court’s decision,” but vowed to pursue civil claims against Baldwin.

    US actor Alec Baldwin and his wife Hilaria Baldwin embrace during his trial on involuntary manslaughter at Santa Fe County District Court in Santa Fe, New Mexico, on July 12, 2024. 

    Ramsay De Give | AFP | Getty Images

    Hours before she dismissed the case on Friday, Sommer sent jurors home for the weekend after receiving a motion from Baldwin’s attorneys asking her to toss the charges.

    The judge then conducted a hearing on the defense’s claims, which cited the ammunition in the possession of prosecutors, which had not been previously disclosed to Baldwin’s team by prosecutors.

    “We don’t know if it’s a live ammunition match or not,” Baldwin’s attorney Luke Nikas told Sommer, according to the Associated Press. “But we do know that the state had it, and it’s disclosable.”Prosecutors in turn claimed that the ammo was not related to the case.

    On Friday night, Erlinda Johnson Ocampo, who had been a special prosecutor on the team in Baldwin’s case, said she quit the team midday Friday after learning a day earlier that ammunition had been given to law enforcement on the heels of the shooting which had not been disclosed to defense lawyers.

    “We have an obligation as prosecutors, we have an obligation not only to the people, but to the defendant and our obligation is to make sure that all the evidence is turned over,” Ocampo told Chris Cuomon on NewsNation. “We don’t get to decide what the defense is going to be. Our job is to ensure transparency, and to ensure that the defendant has everything that the prosecution has gathered.”

    The dismissal comes 16 months after the charges against Baldwin were first tossed out by prosecutors after they said “new facts” had emerged that required further investigation.

    The case was refiled against him earlier this year.

    Judge Mary Marlowe Sommer speaks during a pretrial hearing in Santa Fe, New Mexico, on July 8, 2024. US actor Alec Baldwin is facing a single charge of involuntary manslaughter in the death of a cinematographer.

    Ross D. Franklin | ADP | Getty Images

    Baldwin was rehearsing a scene when a revolver he was handling fired, killing the 42-year-old Hutchins.

    Since the shooting, Baldwin has denied that he pulled the trigger of the weapon and said that he had been told the gun was unable to be fired when it was handed to him.

    He had faced the possibility of being sentenced to 18 months in prison if convicted in the case.

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  • Wells Fargo shares tumble after net interest income falls short of estimates

    Wells Fargo shares tumble after net interest income falls short of estimates

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    Wells Fargo on Friday reported a 9% decline in net interest income, even though its second-quarter earnings and revenue exceeded Wall Street expectations.

    Here’s what the bank did compared with Wall Street estimates, based on a survey of analysts by LSEG:

    • Earnings per share: $1.33 versus $1.29 cents expected
    • Revenue: $20.69 billion versus $20.29 billion expected

    The San Francisco-based lender recorded $11.92 billion in net interest income, a key measure of what a bank makes on lending, marking a 9% year-over-year decline. That was below the $12.12 billion expected by analysts, according to FactSet. The bank said the drop was due to the impact of higher interest rates on funding costs.

    Shares of Wells Fargo fell nearly 7% in Friday’s trading.

    “We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income,” CEO Charlie Scharf said in a statement. “The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees.”

    Wells Fargo saw net income dip to $4.91 billion, or $1.33 per share, in the second quarter, from $4.94 billion, or $1.25 per share, during the same quarter a year ago. The bank set aside $1.24 billion as provision for credit losses, which included a modest decrease in the allowance for those losses. Revenue rose to $20.69 billion in the quarter.

    The bank repurchased more than $12 billion of common stock during the first half of 2024 and it expects to increase the third-quarter dividend by 14%.

    The stock is up more than 22% this year, outperforming the S&P 500.

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  • Jim Cramer calls this stock the Buffett bank; warns nothing really new on Netflix

    Jim Cramer calls this stock the Buffett bank; warns nothing really new on Netflix

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  • The pool party’s over as Americans ease up on backyard upgrades

    The pool party’s over as Americans ease up on backyard upgrades

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    Americans will be splashing around this summer in the backyard pools they’ve already got, but not splashing out as much on new ones. 

    Swimming pool installations were part of the home improvement frenzy that swept the country during the pandemic as Americans were stuck at home. But recent signs show demand is slowing as households with spending money shift it more toward vacations than renovations.

    Pool Corp., a national pool equipment distributor with a roughly $11 billion market valuation, said last week it expects new pool construction to fall by 15% to 20% this year. Some local contractors across the country are seeing a pullback, too.

    Skip Ast III, sales director at Shasta Pools in the Phoenix metropolitan area, said the local industry has been having a harder time since roughly 2022.

    “If 2023 wasn’t already considered — by pool volume — kind of disastrous, this year’s been worse,” he said, but added that the company has managed to adapt.

    While consumers aren’t cutting back on overall record spending, those with extra money in their budgets are increasingly burning it on experiences like travel, dining out and other service-sector purchases.

    Airlines and hotels are expecting a strong travel seasoncruise lines are seeing record bookings, and tickets for concerts and sporting events are still hot at sky-high prices. By contrast, nonessential household purchases are cooling off amid higher food costs and the Federal Reserve’s push to tame inflation by keeping interest rates elevated — triggering a long stretch of steep mortgage and credit card rates.

    The falloff in big-ticket home purchases has been many months in the making, and pools aren’t the only backyard feature facing slower demand; Traeger Grills reported declining revenues in the first quarter, part of a trend that began early in the post-pandemic recovery. But businesses that rely on Americans’ appetite for home upgrades are still adjusting to leaner times — including pool builders.

    In 2020, installations of all kinds of pools, from in-ground and hot tub pools to typically cheaper inflatable and above-ground models, rose by 20%, according to property analytics firm Cape Analytics.

    At the time, “people started settling in for, ‘OK, we’re going to be at home for a while, we need to bring the vacations into our backyards,’” said Ast, whose family has been in the pool construction business for nearly 60 years. He recalled suppliers struggling to keep up with a crush of orders and contractors facing monthslong backlogs.

    Scott Payne, a pool installer in Hatfield, Pennsylvania, also saw business explode during the pandemic: “As a company, we doubled revenue five of the first seven years. Two of those years were during Covid.” He described taking eight to 10 calls a day at the peak of demand.

    But despite the more recent declines nationwide, Payne and Ast said their businesses are doing well, even as both have raised prices due to rising materials costs. Both said their work during the pandemic helped lay a foundation to weather this slowdown.

    Responding to surging demand in an affluent area several years ago allowed Payne’s company to develop an “omnipresence” there that it’s still cashing in on, he said. While he has fewer projects in the works today, he’s doing more expensive ones, allowing his business to maintain its higher revenues.

    “A lot of companies have maybe pulled back a little,” he said. “I can’t say we’re not seeing it, but we’re maybe a little isolated from it. We’re very, very busy still.”

    Ast said Shasta’s own moves during the pandemic are also paying off as demand cools. It rolled out an online calculator to help potential clients estimate the costs of their projects, and it launched a new pool care division that offers maintenance services after installation. All these factors combined have allowed the company to take in a greater share of revenue from fewer consumers in the overall market, Ast said.

    Even Pool Corp. pointed to a silver lining in the slowdown: After so many households recently built new pools or upgraded existing ones, there’s higher demand for upkeep services like the kind Shasta now offers.

    “We are encouraged as maintenance-related product sales have remained stable, evidenced by volume growth in chemicals, and equipment sales (excluding cleaners) being down only 2% for the year, an improvement from the 3% decline realized in the first quarter of 2024,” the company said in its earnings release.

    And with climate change contributing to earlier, hotter, more frequent heat waves — like those that scorched much of the country in mid-June — some consumers may be starting to see swimming pools as more of a must-have.

    In Arizona, Ast said, “the lines get blurred a little bit between luxury and need in the middle of the desert.”

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  • Delta goes pasta-only for thousands of international travelers after ‘spoiled’ food forced a flight to divert

    Delta goes pasta-only for thousands of international travelers after ‘spoiled’ food forced a flight to divert

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    A Boeing 767 passenger aircraft of Delta Air Lines arrives from Dublin at JFK International Airport in New York as the Manhattan skyline looms in the background on Feb. 7, 2024.

    Charly Triballeau | Afp | Getty Images

    Delta Air Lines pulled some meal options from dozens of international flights on Wednesday hours after the carrier said reports of “spoiled” food on an Amsterdam-bound flight forced the plane to divert to New York.

    Delta was only serving pasta in the main cabin on about 75 international flights on Wednesday. It wasn’t clear if the menu changes would continue on Thursday.

    “Out of an abundance of caution, Delta teams have proactively adjusted our in-flight meal service on a number of international flights on Wednesday, July 3,” a Delta spokeswoman said in a statement to CNBC.

    Delta apologized to customers over the report of spoiled food in the main cabin on the Detroit-to-Amsterdam flight.

    “This is not the service Delta is known for and we sincerely apologize to our customers for the inconvenience and delay in their travels,” Delta said.

    In an email to staff on Wednesday, Ash Dhokte, who leads onboard service at Delta, said the airline is investigating what went wrong and that “immediate corrective actions have been implemented to avoid recurrence.” 

    Do&Co., a Delta caterer, did not immediately respond to a request for comment.

    “As our last line of defense, please examine the dish before serving it and do not serve any food that may have a contaminant,” Dhokte wrote, noting that onboard food safety incidents are “extremely rare.”

    The incident occurred in the midst of the peak summer travel season, when Delta and its rivals are fighting over travelers. Airlines serve thousands of meals a day to customers and such incidents are rare, said Henry Harteveldt, a travel consultant and founder of Atmosphere Research Group.

    “Delta is taking prudent action. When you have a food scare you don’t want anyone getting sick on a plane,” said Harteveldt. “Going to all pasta is the safest and smartest option.”

    The airline industry is facing another challenge: a possible strike by workers at major inflight caterer Gate Gourmet. Federal mediators released Gate Gourmet and its unions from mediation earlier this week, paving the way for a potential strike at the end of July.

    “Gate Gourmet caters for us at 19 domestic stations and we are reviewing strategies to limit disruptions for you and our customers should an interruption occur,” Delta’s Dhokte said in the staff note Wednesday.

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  • Airbus shares fall 11% as company cuts 2024 guidance on targets, deliveries

    Airbus shares fall 11% as company cuts 2024 guidance on targets, deliveries

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    A Lufthansa Airbus A340-313 aircraft taxis at Los Angeles International Airport before departing for Frankfurt on May 5, 2024 in Los Angeles, California.

    Kevin Carter | Getty Images News | Getty Images

    Shares in Airbus fell by close to 11% on Tuesday after the company said it was cutting its targets for 2024, including aircraft deliveries and earnings.

    Airbus on Monday said it was now expecting its adjusted earnings before interest and taxes to come in at around 5.5 billion euros ($5.9 billion), down from a previous estimate of 6.5 to 7 billion euros affirmed on April 25.

    The company said it was now anticipating to deliver approximately 770 commercial aircrafts this year, compared to a previous outlook near 800. Airbus also delayed its target timeline for ramping up the production of its A320 aircraft.

    Europe-listed shares in the company were down 10.85% at 11:37 a.m. London time.

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    Airbus

    The guidance cuts are partly linked to supply chain issues in Airbus’ commercial aircraft business, the company said.

    “Airbus is facing persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment,” the firm noted.

    Airbus said it was also facing additional costs in its space systems division. It had recognized “commercial and technical challenges” in the business and was therefore recording charges of around 0.9 billion euros in the first half of 2024, Airbus said.  

    “These are mainly related to updated assumptions on schedules, workload, sourcing, risks and costs over the lifetime of certain telecommunications, navigation and observation programmes,” the company said.

    Airbus’ half-year results are set to be released on July 30.

    Earlier this year, Airbus’ operating profit for the first quarter came in weaker than expected, with CFO Thomas Toepfer at the time telling CNBC that company earnings were “not particularly strong.”

    Airbus cuts its 2024 guidance for financial targets and deliveries

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  • The stock market flips and tech falls out of favor — why this move may be hard to stop

    The stock market flips and tech falls out of favor — why this move may be hard to stop

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    Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.

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  • ‘Inside Out 2’ hits $155 million domestic debut, second-highest animation opening ever

    ‘Inside Out 2’ hits $155 million domestic debut, second-highest animation opening ever

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    Disney and Pixar brought a big dose of joy to the box office this weekend.

    “Inside Out 2” debuted with an estimated $155 million domestically, the second-highest theatrical opening of an animated film and the first film since Warner Bros.’ “Barbie” to top $100 million during its debut.

    Of note, Disney does not consider its 2019 live-action remake of “The Lion King,” which generated $191.7 million during its debut, an animation film.

    “Inside Out 2” is expected to haul in $295 million globally for the weekend.

    “Let’s issue a collective ‘welcome back’ to Disney, Pixar, and the summer box office,” said Shawn Robbins, founder and owner of Box Office Theory.”

    Both Pixar and Walt Disney Animation struggled to regain a foothold at the box office after pandemic restrictions lessened and audiences returned to theaters. Disney had opted to debut a handful of animated features directly on Disney+ and so parents were trained to seek out new Disney titles on streaming, not in theaters, even when they did return to the big screen.

    Compounding Disney’s woes, many audience members began to feel that the company’s content had grown overly existential and too concerned with social issues beyond the reach of children.

    “Many narratives have been written about the two studios and moviegoing in recent times, so this powerful debut by ‘Inside Out 2’ is a breath of fresh air,” Robbins said.

    The film is the fifth Pixar feature to surpass $100 million during its debut in North America and the second-biggest opening weekend ticket seller for the studio just behind 2018’s “The Incredibles 2,” which tallied $182.6 million. Around 12 million patrons flocked to cinemas to see the flick, according to data from EntTelligence.

    “This is clearly a big win for theaters,” said Paul Dergarabedian, senior media analyst at Comscore. “It’s an even bigger win for Pixar.”

    The theatrical industry has struggled this year with fewer titles, as production shutdowns from the pandemic were exacerbated by a dual labor strike that closed movie sets for nearly five months last year. The result has been a 26% decline in ticket sales compared to 2023 and a 42% drop from 2019 levels, according to data from Comscore. Heading into this weekend, the domestic box office stood at $2.8 billion.

    While there have been some standout performances from films like Warner Bros. and Legendary Entertainment’s “Dune: Part Two,” Warner Bros. and Toho’s “Godzilla x Kong: The New Empire” and Universal’s “Kung Fu Panda 4,” the 2024 box office has struggled to hit a consistent pace of releases and ticket sales.

    Missing from this year’s early summer slate for the first time since 2009 was a Marvel Cinematic Universe title. Typically, these films average $100 million to $200 million openings, with 2019’s “Avengers: Endgame” hitting a record $357.1 million. Instead, this year, Universal’s “The Fall Guy” opened to $28 million.

    Fewer films and fewer blockbusters could push the summer box office down as much as $800 million compared with 2023, according to Comscore’s Dergarabedian, and have ripple effects for the whole year. After all, the key summer period, which runs from the first weekend in May through Labor Day, typically accounts for 40% of the total annual domestic box office.

    “Inside Out 2” is a bright spot for the industry. It boasts the biggest domestic debut of 2024, surpassing “Dune: Part Two” and its $82.5 million in opening weekend ticket sales.

    “Does this performance wipe away all concerns of evolving consumer behavior? Of course not, but it should stay the hand of those thinking Disney or Pixar had permanently lost their commercial gravitas after an overly aggressive streaming strategy and undercooked films which together eroded some of their audiences in the past few years,” Robbins said.

    And some heavy hitters are coming to close out the summer and finish up the year.

    “Deadpool and Wolverine,” Marvel’s first R-rated feature, is due in theaters in July and is expected to deliver a strong opening weekend as well as a steady stream of ticket sales throughout its run.

    Then “Beetlejuice Beetlejuice” arrives in early September, “Joker: Folie a Deux” hits in October alongside “Venom: The Last Dance,” and November sees “Gladiator II,” “Moana 2” and “Wicked.” Additionally, December will have “Kraven the Hunter,” “Sonic the Hedgehog 3″ and “Mufasa: The Lion King.”

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

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  • Robotics startup cofounded by Synapse CEO is raising funds with exaggerated claims about GM ties

    Robotics startup cofounded by Synapse CEO is raising funds with exaggerated claims about GM ties

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    3alexd | E+ | Getty Images

    A humanoid robotics startup cofounded by the CEO of bankrupt fintech firm Synapse has canvassed Silicon Valley investors for funds by claiming close ties and an imminent investment from General Motors — claims rejected by the automaker.

    The company, called Foundation Robotics Labs, is seeking the last $1 million in funds for an $11 million seed round, according to documents obtained by CNBC. The investor pitch claimed GM had already committed to an investment, along with the Menlo Park-based VC firm Tribe Capital.

    “Foundation is building humanoid robots to take over work that humans do in factories, warehouses and eventually homes,” the startup declared.

    On top of the seed investment, the fundraising document said GM was set to be Foundation’s first customer, with a targeted $300 million purchase order, and had also provided access to its factories to help them train its robots.

    “GM agreed to let us collect the ground truth data in their factories,” Foundation said in the document. “Our team is in their Mexico factory this week to start the collection process. We would probably be the only company in this space with a dataset like this.”

    ‘Fabricated’ claims

    But, according to GM and one of the startup’s founders, most of Foundation’s claims related to the automaker are exaggerated or untrue.

    While GM met with Foundation executives a few times, it hasn’t allowed data collection from its factories, has no agreements for robot orders and isn’t planning an investment, according to a GM spokesman.

    “GM has never invested in Foundation Robotics and has no plans to do so,” spokesman Darryll Harrison said in an emailed statement. “In fact, GM has never had an agreement of any kind with the company. Any claims to the contrary are fabricated.”

    In a phone interview with CNBC, one of Foundation’s cofounders, Mike LeBlanc, confirmed GM’s points and said he was embarrassed that marketing materials existed that overstated their relationship.

    “The engineering stuff we’ve done is really incredible, and it’s the bedrock of what this company will be,” LeBlanc said. “That, to me is what Foundation Robotics is.”

    New Foundation

    Foundation was started in April by Synapse CEO Sankaet Pathak, Tribe Capital CEO Arjun Sethi, and LeBlanc, cofounder of Cobalt Robotics, a maker of autonomous security guards, according to the company’s fundraising pitch.

    It’s raising money at a time when American corporations look to automate more of their labor: 25% of capital spending by industrial companies in the coming years will be on automated systems, according to McKinsey.

    The misleading fundraising pitch was shared in an email group with about 1,500 startup executives and investors this month, according to one of the recipients. The contents of the document were confirmed by someone with direct knowledge of Tribe Capital.

    Tribe Capital and its cofounder Sethi declined to comment, while Pathak didn’t respond to messages seeking comment.

    Fintech meltdown

    The robotics startup finds itself in the spotlight after the implosion of Pathak’s other company, Synapse, which enabled fintech brands like Mercury and Dave to offer banking services by connecting them to FDIC-backed banks.

    Cofounded by Pathak in 2014, Synapse went bankrupt earlier this year after some of its largest clients, including Mercury, left its platform. Mercury, which instead pursued a direct relationship with Evolve, later had disagreements with Synapse over contract issues.

    The mess has left more than 100,000 Americans with a combined $265 million in deposits locked out of their accounts for more than a month, according to a trustee appointed to oversee the firm’s bankruptcy proceedings.

    Making matters worse, there is an $85 million shortfall between what partner banks of Synapse are holding and what depositors are owed, and no answers yet on what happened to the missing funds, according to the trustee.

    Pathak’s move to his next venture, coming on the heels of the still-ongoing Synapse failure, has raised eyebrows among some founders and investors in the startup community.

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  • GameStop shares jump 30% as ‘Roaring Kitty’ schedules YouTube livestream for Friday

    GameStop shares jump 30% as ‘Roaring Kitty’ schedules YouTube livestream for Friday

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    Pavlo Gonchar | SOPA Images | Lightrocket | Getty Images

    Shares of GameStop shot to session highs Thursday after meme stock leader Roaring Kitty scheduled a livestream on Youtube, which would be his first one in almost four years.

    Roaring Kitty, whose real name is Keith Gill, set the time for his live chat at noon Friday, which traders speculated would be a bullish discussion about his massive GameStop stake. The investor hosted three-hour livestreams in August 2020 explaining his investing thesis behind his favorite brick-and-mortar video game retailer.

    GameStop popped 30% higher to trade around $40 apiece. It surged 40% at one point after this livestream update and trading was briefly halted for volatility. The stock is up more than 80% this week.

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    GameStop, 1-day

    There were already more than 10,000 people waiting in the livestream and countless comments were flowing through the chat box.

    Gill, who goes by DeepF——Value on Reddit, resurfaced online recently more than three years after sparking the historic trading mania in 2021 that burned short-selling hedge funds. Last Sunday, he started posting screenshots of his E-trade portfolio holding 5 million shares of GameStop common shares and 120,000 call options. Combined, they have a market value of at least $200 million now.

    He seemed to have held onto his positions as of Monday night. Gill stopped posting updates after the Wall Street Journal reported that Morgan Stanley’s E-Trade broker was considering booting him because of the worry that what he was doing could amount to market manipulation. 

    The investor is a former marketer for Massachusetts Mutual Life Insurance. The mania in 2021 led to a series of congressional hearings, featuring Gill, around brokers’ practices and gamifying retail trading.

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  • How Walmart turned Bentonville, Arkansas into a boomtown

    How Walmart turned Bentonville, Arkansas into a boomtown

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    Walmart’s hometown of Bentonville, Arkansas has become a boomtown with many amenities you might expect to find in New York or San Francisco – fancy restaurants, craft cocktails, bike paths and a world-class art museum. The town has more cranes per capita than any other U.S. city as Walmart builds a 350-acre new headquarters. Bentonville’s population is expected to triple by 2050. But with the boom comes big-city economic challenges. CNBC’s Melissa Repko travels to Bentonville for the story.

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  • Boeing Starliner to make another attempt at launching NASA astronauts

    Boeing Starliner to make another attempt at launching NASA astronauts

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    [The live stream above is scheduled to start at 9:45 a.m. ET. If you don’t see a video player at that time, please refresh the page.

    Boeing aims to launch its first Starliner flight with astronauts on Wednesday, in the latest attempt to fly the long-delayed spacecraft.

    The launch is scheduled for 10:52 a.m. ET from Cape Canaveral, Florida. Two NASA astronauts will be aboard the Starliner capsule, which will be carried by United Launch Alliance’s Atlas V rocket to the International Space Station.

    Wednesday is the latest in a series of attempts to launch the mission, which is known as the Boeing crew flight test. On Saturday, a launch attempt was called off in the final minutes of the countdown due to a problem with one of the computer’s that provides ground support to the rocket. In early May, another attempt was called off due to an issue detected with the rocket itself.

    If the launch is postponed again, Boeing has a backup opportunity scheduled for Thursday.

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

    United Launch Alliance – or ULA, a joint venture of Boeing and Lockheed Martin – replaced the rocket’s problematic valve after the May attempt and replaced a faulty part in the ground infrastructure computer after Saturday’s attempt.

    The United Launch Alliance (ULA) Atlas V rocket with Boeing’s CST-100 Starliner spacecraft sits to Space Launch Complex 41 at the Kennedy Space Center in Cape Canaveral, Florida on June 3, 2024. 

    Miguel J. Rodriguez Carrillo | AFP | Getty Images

    The astronauts

    NASA astronauts Butch Wilmore, left, and Suni Williams.

    Credit: Kim Shiflett | NASA

    Butch Wilmore and Suni Williams are flying on Starliner, with the former serving as the spacecraft’s commander and the latter as its pilot.

    Wilmore joined NASA in 2000 and has flown to space twice previously on the Space Shuttle and Russia’s Soyuz. Before NASA, Wilmore was a U.S. Navy pilot.

    Williams was selected by NASA in 1998 and has also flown to space twice before, on the Space Shuttle and then the Soyuz. Williams was also a Navy pilot, like Wilmore, before joining the space agency.

    The rocket and capsule

    Boeing’s Starliner spacecraft atop the United Launch Alliance Atlas V rocket is seen on the launch pad of Space Launch Complex-41 at Cape Canaveral Space Force Station in Florida on Thursday, May 30, 2024.

    Isaac Watson | NASA

    Starliner launches on ULA’s Atlas V. The rocket debuted in 2002, and the Starliner crew flight test represents its 100th launch.

    The capsule itself is built to carry as many as four NASA astronauts per flight and more than 200 pounds of research and cargo. The spacecraft lands using a parachute and airbag system. Starliner is reusable, with each capsule designed to fly as many as 10 missions.

    The mission

    Boeing’s crew flight test aims to certify the Starliner system as capable of carrying NASA astronauts to and from the ISS.

    If Starliner launches on Wednesday, it will fly in space for about 25 hours before a planned docking with the International Space Station at 12:15 p.m. on Thursday. The astronauts will then spend about a week on the ISS, focused on testing Starliner, before returning to Earth.

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  • Nutritional needs are ‘shifting’ amid rise of weight loss drugs, says Nestle CEO

    Nutritional needs are ‘shifting’ amid rise of weight loss drugs, says Nestle CEO

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    The meteoric rise of weight loss drugs means consumers’ nutritional needs are “shifting” which provides new opportunities for food companies, Nestle CEO Mark Schneider told CNBC.

    Investors were initially concerned about the popularity of GLP-1 drugs such as Wegovy and Ozempic as it was assumed that people on the drugs would consume less food, Schneider told CNBC’s Silvia Amaro.

    But that perspective has since changed, he said. “I think what since has emerged is that nutritional needs don’t go away. They’re just shifting. So, you know before, during, after GLP-1 therapy — consumers still have nutritional needs, but they may be different from someone who is not on a weight loss regimen.”

    According to Schneider, consumers who are on weight loss medication simply have different nutritional needs. Users of the GLP-1 drugs need to focus more on protein intake to retain muscle mass and ensuring enough vitamins and micronutrients are consumed, he said.

    This serves as an opportunity for Nestle to bring science to the table and then “work on what we call companion products, products that really then address some of the specific consumer needs during that treatment,” Schneider said.

    ‘An interesting addition’ to the food industry

    Nestle is looking to capitalize on the popularity of the GLP-1 drugs with its “ambitious goal to push the healthier products,” the CEO said.

    The GLP-1 drugs will “certainly be an interesting addition to all the other needs that we’re trying to meet in the food industry,” Schneider told CNBC, adding that even as the importance of the drugs grows, they will not become the sole focus for food and drink companies.

    While GLP-1 users may look out for products that are tailored to their diet and impacts of the medication such as feeling satiety sooner than before, not all consumers will have the same goals.

    “Remember, there’s going to be a lot of consumers out there that are not on an GLP-1 diet. And there is lots of situations where a snack and a chocolate product may still be of a lot of interest. So it doesn’t go away,” Schneider explained.

    Consumers will also all be at different life stages, from infancy to the elderly, and therefore have different nutritional requirement that are met with different products, he added.

    Frozen food range for GLP-1 users

    Even though long-term effects of GLP-1 weight loss treatments are still uncertain and concerns about side effects persist, Schneider said it is important to respond to them as a “major consumer trend.”

    The Swiss food and beverage giant announced earlier this month that it was launching Vital Pursuit, a frozen food range that targets those taking GLP-1 drugs. Twelve products are set to hit supermarkets later this year, including pastas, pizzas, and sandwich melts. All meals will include at least one essential nutrient such as calcium or iron.

    Foods that are traditionally not linked to weight loss like Pizza will be included to provide consumers with variety, Schneider told CNBC.

    “But the most important part is all of them are going to be portion controlled,” he said. “Then the micronutrient status is very important. So we’re adding vitamins to be sure that all the central needs of these consumers are met.”

    Nestle is also planning other “companion offerings” for consumers taking weight loss drugs, both in the U.S., where Vital Pursuit products will launch, and elsewhere, Schneider said.

    “Some of these products will also make a lot of sense to consumers, if they’re not on a GLP-1 treatment, but another type of weight loss treatment, because the same fundamentals apply, and that is you want to be sure that you’re losing fat and not lean muscle mass and you want to be sure that you don’t develop any vitamin deficiencies,” Schneider said.

    Nestle announces Vital Pursuit frozen-food brand targeting GLP-1 users

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  • Climate change is behind increasing flight turbulence, Transportation Sec’y Pete Buttigieg says

    Climate change is behind increasing flight turbulence, Transportation Sec’y Pete Buttigieg says

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    U.S. Secretary of Transportation Pete Buttigieg speaks during a press briefing the day after the collapse of the Francis Scott Key Bridge in Baltimore, at the White House in Washington, U.S., March 27, 2024. 

    Elizabeth Frantz | Reuters

    Transportation Secretary Pete Buttigieg says that climate change is one of the culprits behind an increase in flight turbulence.

    “The reality is, the effects of climate change are already upon us in terms of our transportation,” Buttigieg said on CBS’ “Face the Nation” on Sunday, forecasting that turbulence is something that will continue to “affect American travelers, whether here or abroad.”

    “We’ve seen that in the form of everything from heat waves that shouldn’t statistically even be possible threatening to melt the cables of transit systems in the Pacific Northwest, to, as you mentioned, hurricane seasons becoming more and more extreme and indications that turbulence is up by about 15%,” he continued. “That means assessing anything and everything that we can do about it.”

    A study published in the journal Geophysical Research Letters last year found that there have been increases in clear-air turbulence (CAT) between 1979 and 2020, with “severe-or-greater” turbulence – the strongest category of CAT – becoming 55% more frequent over the North Atlantic over the course of that time period.

    “Our climate is evolving,” Buttigieg said. “Our policies and our technology and our infrastructure have to evolve accordingly, too.”

    His comments come as turbulence has wreaked havoc on a number of flights so far this year.

    On Sunday, 12 people became injured after a Qatar Airways flight from Doha to Dublin was hit with turbulence while flying over Turkey. Six passengers and six crew members were injured, eight of whom were taken to the hospital after assessment, Dublin Airport said in a post on X.

    The aircraft landed just before 1:00 p.m. local time and was met by emergency services – including airport police and the fire and rescue department – upon landing, the airport said in a separate post on X.

    Severe turbulence also struck a Singapore Airlines flight last week, resulting in the death of one person and leaving 30 others injured.

    While Buttigieg called the deadly turbulence on the Singapore Airlines flight “very rare,” he added that “turbulence can happen and sometimes it can happen unexpectedly.”

    “Now, there are protocols and patterns for things like how pilots who encounter turbulence can notify those who might be coming in the path,” he said. “But I do think we need to continually re-evaluate that in the face of the reality that these things are more frequent and more severe than before.”

    ‘Err on the side of reporting’

    Boeing revealed on Friday that it’s seen a 500% increase in the number of employee submissions about quality and safety concerns during the first two months of 2024 compared to the same period a year ago.

    The aerospace giant noted that the rise in submissions occurred after a section of an Alaska Airlines 737 Max 9 plane blew out midflight on January 5. The company said this increase is “a sign of progress toward a robust reporting culture.”

    When asked about Boeing’s findings, Buttigieg backed up that claim, saying it’s “encouraging” to see that aviation employees are fostering a culture of “if you see something, say something.”

    “We want you to err on the side of reporting,” he said. “The concerning part, of course, is that any of those issues are happening at all.”

    Boeing leaders are set to meet with the Federal Aviation Administration on Thursday to present its plan on improving quality control. The agency announced in late February that it gave the company 90 days to develop the plan.

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  • Here’s what it’s like inside the operating room when someone gets a brain implant

    Here’s what it’s like inside the operating room when someone gets a brain implant

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    Dr. Joshua Bederson places Precision Neuroscience’s electrodes onto a brain.

    Ashley Capoot

    As the lights dimmed in an operating room at The Mount Sinai Hospital in New York City, Dr. Joshua Bederson prepared to make history.

    Bederson, system chair for the Department of Neurosurgery at Mount Sinai Health System, is no stranger to long hours in an operating room. The former competitive gymnast has completed more than 6,500 procedures in his career, and he said he visualizes the steps for each one as if he’s rehearsing for a routine.   

    On this particular morning in April, Bederson was readying for a meningioma resection case, which meant he would be removing a benign brain tumor. Bederson said his primary focus is always on caring for the patient, but in some cases, he also gets to help advance science. 

    This procedure was one such case. 

    A small crowd gathered as Bederson took his seat in the operating room, his silhouette aglow from the bright white light shining on the patient in front of him. Health-care workers, scientists and CNBC craned forward – some peering through windows – to watch as Bederson placed four electrode arrays from Precision Neuroscience onto the surface of the patient’s brain for the first time. 

    An electrode is a small sensor that can detect and carry an electrical signal, and an array is a grid of electrodes. Neurosurgeons use electrodes during some procedures to help monitor and avoid important parts of the brain, like areas that control speech and movement.

    Precision is a three-year-old startup building a brain-computer interface, or a BCI. A BCI is a system that decodes neural signals and translates them into commands for external technologies. Perhaps the best-known company in the field is Neuralink, which is owned by Tesla and SpaceX CEO Elon Musk.

    Other companies like Synchron and Paradromics have also developed BCI systems, though their goals and designs all vary. The first application of Precision’s system will be to help patients with severe paralysis restore functions like speech and movement, according to its website. 

    Stephanie Rider of Precision Neuroscience inspects the company’s microelectrode array

    Source: Precision Neuroscience

    Precision’s flagship BCI is called the Layer 7 Cortical Interface. It’s a microelectrode array that’s thinner than a human hair, and it resembles a piece of yellow scotch tape. Each array is made up of 1,024 electrodes, and Precision says it can conform to the brain’s surface without damaging any tissue.

    When Bederson used four of the company’s arrays during the surgery in April, he set a record for the highest number of electrodes to be placed on the brain in real-time, according to Precision. But perhaps more importantly, the arrays were able to detect signals from the patient’s individual fingers, which is a far greater amount of detail than standard electrodes are able to capture.

    Using Precision’s electrode array is like turning a pixilated, low-resolution image into a 4K image, said Ignacio Saez, an associate professor of neuroscience, neurosurgery and neurology at the Icahn School of Medicine at Mount Sinai. Saez and his team oversee Precision’s work with Mount Sinai.

    “Instead of having 10 electrodes, you’re giving me 1,000 electrodes,” Saez told CNBC in an interview. “The depth and the resolution and the detail that you’re going to get are completely different, even though they somehow reflect the same underlying neurological activity.”

    Bederson said accessing this level of detail could help doctors be more delicate with their surgeries and other interventions in the future. For Precision, the ability to record and decode signals from individual fingers will be crucial as the company works to eventually help patients restore fine motor control. 

    The data marks a milestone for Precision, but there’s a long road ahead before it achieves some of its loftier goals. The company is still working toward approval from the U.S. Food and Drug Administration, and it has yet to implant a patient with a more permanent version of its technology. 

    “I think these are little baby steps towards the ultimate goal of brain-computer interface,” Bederson told CNBC in an interview.

    Inside the operating room

    Dr. Joshua Bederson prepares for surgery at The Mount Sinai Hospital.

    Ashley Capoot

    Bederson’s surgery in April was not Precision’s first rodeo. In fact, it marked the 14th time that the company has placed its array on a human patient’s brain. 

    Precision has been partnering with academic medical centers and health systems to perform a series of first-in-human clinical studies. The goal of each study varies, and the company announced its collaboration with Mount Sinai in March. 

    At Mount Sinai, Precision is exploring different applications for its array in clinical settings, like how it can be used to help monitor the brain during surgery. In these procedures, surgeons like Bederson temporarily place Precision’s array onto patients who are already undergoing brain surgery for a medical reason. 

    Patients give their consent to participate beforehand. 

    It’s routine for neurosurgeons to map brain signals with electrodes during these types of procedures. Bederson said the current accepted practice is to use anywhere between four to almost 100 electrodes – a far cry from the 4,096 electrodes he was preparing to test. 

    Electrode arrays from Precision Neuroscience displayed on a table.

    Ashley Capoot

    Precision’s arrays are in use for a short portion of these surgeries, so CNBC joined the operating room in April once the procedure was already underway. 

    The patient, who asked to remain anonymous, was asleep. Bederson’s team had already removed part of their skull, which left an opening about the size of a credit card. Four of Precision’s arrays were carefully laid out on a table nearby.

    Once the patient was stabilized, Precision’s employees trickled into the operating room. They helped affix the arrays in an arc around the opening on the patient’s head, and connected bundles of long blue wires at the other end to a cart full of equipment and monitors.

    Dr. Benjamin Rapoport, Precision’s co-founder and chief scientific officer, quietly looked on. Every major procedure presents some risks, but the soft-spoken neurosurgeon’s calm demeanor never wavered. He told CNBC that each new case is just as exciting as the last, especially since the company is still learning. 

    Experts help set up the wiring for Precision Neuroscience’s technology.

    Ashley Capoot

    Bederson entered the operating room as Precision’s preparations neared their end. He helped make some final tweaks to the set up, and the overhead lights in the operating room were turned off. 

    Ongoing chatter quieted to hushed whispers. Bederson was ready to get started. 

    He began by carefully pulling back a fibrous membrane called the dura to reveal the surface of the brain. He laid a standard strip of electrodes onto the tissue for a few minutes, and then it was time to test Precision’s technology. 

    Using a pair of yellow tweezers called long bayonet forceps, Bederson began placing all four of Precision’s electrode arrays onto the patient’s brain. He positioned the first two arrays with ease, but the last two proved slightly more challenging. 

    Bederson was working with a small section of brain tissue, which meant the arrays needed to be angled just right to lay flat. For reference, imagine arranging the ends of four separate tape measures within a surface area roughly the size of a rubber band. It took a little reconfiguring, but after a couple of minutes, Bederson made it happen.

    Real-time renderings of the patient’s brain activity swept across Precision’s monitors in the operating room. All four arrays were working.  

    In an interview after the surgery, Bederson said it was “complicated” and “a little bit awkward” to place all four arrays at once. From a design perspective, he said two arrays with twice as many points of contact, or longer arrays with greater spacing would have been helpful.  

    Bederson compared the arrays to spaghetti, and the description was apt. From where CNBC was watching, it was hard to tell where one stopped and the next began.  

    Once all the arrays were placed and actively detecting signals, Precision’s Rapoport stood with his team by the monitors to help oversee data collection. He said the research is the product of a true team effort from the company, the health system and the patient, who often doesn’t get to see the benefits of the technology at this stage. 

    “It takes a village to make this sort of thing move forward,” Rapoport said. 

    CNBC left the operating room as Bederson began removing the tumor, but he said the case went well. The patient woke up afterward with some weakness in their foot since the surgery was within that part of the brain, but Bederson said he expected the foot would recover in around three to four weeks. 

    Employees from Precision Neuroscience collecting data.

    Ashley Capoot

    Rapoport was present at this particular surgery because of his role with Precision, but he’s well acquainted with the operating rooms at Mount Sinai. 

    Rapoport is a practicing surgeon and serves as an assistant professor of neurosurgery at the Icahn School of Medicine at Mount Sinai. Rapoport reports to Bederson, and Bederson said the pair have known one another since Rapoport was in residency at Weill Cornell Medicine.

    Dr. Thomas Oxley, the CEO of the competing BCI company Synchron, is also a faculty member under Bederson. Synchron has built a stent-like BCI that can be inserted through a patient’s blood vessels. As of early February, the company had implanted its system into 10 human patients. It is also working toward FDA approval. 

    Bederson has an equity stake in Synchron, but he told CNBC he didn’t realize how much it would prevent him from participating in research with the Synchron team. He has no monetary investment in Precision. 

    “I really did not want to have any financial interest in Precision because I think it has an equally promising future and wanted to advance the science as fast as I could,” Bederson said. 

    Rapoport also helped co-found Musk’s Neuralink in 2017, though he departed the company the following year. Neuralink is building a BCI designed to be inserted directly into the brain tissue, and the company recently received approval to implant its second human patient, according to a report from The Wall Street Journal on Monday. 

    As the BCI industry heats up, Bederson said the amount that scientists understand about the brain is poised to “explode” over the next several years. Companies like Precision are just getting started. 

    Dr. Joshua Bederson helps set up Precision Neuroscience’s electrode arrays.

    Ashley Capoot

    “I really feel like the future is where the excitement is,” Bederson said.

    Rapoport said Precision is hoping to receive FDA approval for the wired version of its system “within a few months.” This version, which is what CNBC saw in the operating room, would be for use in a hospital setting or monitored care unit for up to 30 days at a time, he said. 

    Precision’s permanent implant, which will transmit signals wirelessly, will go through a separate approval process with the FDA. 

    Rapoport said Precision hopes to implant “a few dozen” patients with the wired version of its technology by the end of the year. That data collection would give the company a “very high level of confidence” in its ability to decode movement and speech signals in real-time, he said. 

    “Within a few years, we’ll have a much more advanced version of the technology out,” Rapoport said.

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  • Mercedes-Benz workers in Alabama vote against UAW union membership

    Mercedes-Benz workers in Alabama vote against UAW union membership

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    United Auto Workers (UAW) members and supporters on a picket line outside the ZF Chassis Systems plant in Tuscaloosa, Alabama, US, on Wednesday, Sept. 20, 2023.

    Andi Rice | Bloomberg | Getty Images

    Mercedes-Benz workers in Alabama have voted against union representation by the United Auto Workers, the National Labor Relations Board said Friday.

    The results are a blow to the UAW’s organizing efforts a month after the Detroit union won an organizing drive of roughly 4,330 Volkswagen plant workers in Tennessee. Voting started Monday and ended Friday.

    Union organizing failed with 56% of the vote, or 2,642 workers, casting ballots against the UAW, according to the NLRB, which oversaw the election. More than 90% of the 5,075 eligible Mercedes-Benz workers voted in the election, according to the results.

    The NLRB said 51 ballots were challenged and not counted, but they aren’t determinative to the outcome of the election. There were five void ballots. 

    The union and company have five business days to file objections to the election, including any alleged interference, according to the NLRB. If no objections are filed, the election result will be certified, and the union will have to wait one year to file for a union election for a similar bargaining unit.

    Mercedes-Benz in a statement said company officials “look forward to continuing to work directly with our Team Members to ensure [Mercedes-Benz US International] is not only their employer of choice, but a place they would recommend to friends and family.”

    United Auto Workers President Shawn Fain (right) and UAW Secretary-Treasurer Margaret Mock (left) lead a march outside Stellantis’ Ram 1500 plant in Sterling Heights, Michigan after the union called a strike at the plant on Oct. 23, 2023.

    Michael Wayland / CNBC

    The loss is expected to hurt the UAW in an unprecedented organizing drive launched late last year of 13 non-union automakers in the U.S. after securing record contracts with Detroit automakers Ford Motor, General Motors and Stellantis. Those agreements included significant wage increase, reinstatement of cost-of-living adjustments and other benefits.

    UAW President Shawn Fain said while the Mercedes-Benz vote was obviously not the result the union wanted, it was a valiant effort, adding the vote “isn’t a failure” but a “bump in the road.”

    “While this loss stings, I’ll tell you this, we’re going to keep our heads up, keep our heads up high. These workers have nothing to do but be proud in the effort they put forth and what they’ve done,” he said Friday during a media conference. “We fought the good fight and we’re going to continue on, continue forward. Ultimately, these workers here are going to win.”

    The Mercedes-Benz vote was expected to be more challenging for the union than the Volkswagen plant in Tennessee, where the union had already established a presence after two failed organizing drives in the past decade and where it faced less opposition from the automaker.

    Stephen Silvia, author of “The UAW’s Southern Gamble: Organizing Workers at Foreign-Owned Vehicle Plants,” noted Mercedes-Benz replaced the plant’s leader weeks ahead of the election. He said companies routinely do this, promising workers changes at their facilities in an effort to stave of organizing.

    “Companies do anti-union campaigns because they can be effective, and I think this one was effective,” said Silvia, a professor at American University in Washington, D.C. “A common piece of an anti-union campaign is firing the plant manager … That seems to have persuaded enough of the workers to vote against the union.”

    Alabama Gov. Kay Ivey, who was one of six Republican governors to condemn the union’s organizing drive, hailed the outcome of the vote.

    “The workers in Vance have spoken, and they have spoken clearly! Alabama is not Michigan, and we are not the Sweet Home to the UAW. We urge the UAW to respect the results of this secret ballot election,” she said.

    Workers at Mercedes-Benz’s Tuscaloosa plant, located about 60 miles southwest of Birmingham, have produced more than 4 million vehicles since the plant opened in 1997, including 295,000 vehicles in 2023, according to the plant’s website.

    The Alabama plant currently produces vehicles such as the gas-powered GLE and GLS Maybach SUVs as well as the all-electric EQS and EQE SUVs.

    The NLRB last week said it continues to process and investigate open unfair labor practice charges filed by the UAW against automakers, including six unfair labor practice charges against Mercedes-Benz since March.

    Fain said Friday the union would continue to move forward with those charges. He declined to say whether the union plans to challenge the election results, saying he’d “leave that” to the union’s legal team.

    The charges allege that Mercedes-Benz has “disciplined employees for discussing unionization at work, prohibited distribution of union materials and paraphernalia, surveilled employees, discharged union supporters, forced employees to attend captive audience meetings, and made statements suggesting that union activity is futile,” the NLRB said.

    The union has filed other charges against automakers Honda, Hyundai, Lucid, Rivian, Tesla and Toyota, according to the NLRB.

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  • Warner Bros. Discovery misses first-quarter estimates despite streaming growth

    Warner Bros. Discovery misses first-quarter estimates despite streaming growth

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    In this photo illustration, the Warner Bros. Discovery logo is displayed on a smartphone screen.

    Rafael Henrique | SOPA Images | Lightrocket | Getty Images

    Warner Bros. Discovery reported first-quarter results on Thursday, missing analyst expectations on both the top and bottom lines.

    Here is how Warner Bros. Discovery performed, compared with estimates from analysts surveyed by LSEG:

    • Loss per share: 40 cents vs. 24 cents loss expected
    • Revenue: $9.96 billion vs. $10.231 billion expected

    Warner Bros. Discovery — which owns streaming service Max, a portfolio of cable TV networks including TNT and Discovery, and a film studio — said revenue fell 7% to $9.96 billion compared to the same quarter last year.

    Warner Bros. Discovery posted a net loss attributable to the company of $966 million, or 40 cents per share, an improvement from the year-ago quarter when it reported a loss of $1.07 billion, or 44 cents per share.

    The company said total adjusted earnings before interest, taxes, depreciation and amortization were down roughly 20% during the first quarter to $2.1 billion, noting its “Suicide Squad: Kill the Justice League” video game generated significantly lower revenues.

    The company’s cash position improved, with free cash flow increasing to $390 million, a $1.3 billion improvement from the same quarter last year, the company noted.

    Warner Bros. Discovery has been working to reduce its debt load, which now stands at $43.2 billion, stemming from the merger of Warner Bros. and Discovery in 2022. On Thursday the company said it repaid $1.1 billion in debt during the quarter, and also announced a $1.75 billion cash tender aimed at further reducing its debt.

    Besides paying down its debt, Warner Bros. Discovery has been working to make its streaming segment profitable.

    The company announced on Wednesday it would bundle its streaming services with those of Disney — tying together Max, Disney+ and Hulu — and offer it to consumers this summer, a callback to the traditional pay-TV package. Pricing has yet to be disclosed, but it will be offered at a discount, CNBC reported.

    Warner Bros. Discovery said Thursday it added 2 million direct-to-consumer streaming subscribers during the quarter, bringing its total to 99.6 million.

    That segment earned an adjusted $86 million during the quarter, an improvement of $36 million from the prior-year quarter, the company said.

    This story is developing. Please check back for updates.

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  • Warren Buffett’s Berkshire Hathaway cut Apple investment by about 13% in the first quarter

    Warren Buffett’s Berkshire Hathaway cut Apple investment by about 13% in the first quarter

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    Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024. 

    David A. Grogen | CNBC

    OMAHA, Nebraska — Warren Buffett’s Berkshire Hathaway cut its gigantic Apple stake in the first quarter as the “Oracle of Omaha” continued to downsize his one-time favorite bet.

    In its first-quarter earnings report, Berkshire Hathaway reported that its Apple bet was worth $135.4 billion, implying around 790 million shares. That would mark a decline of around 13% in the stake. Apple was still Berkshire’s biggest holding by far at the end of the quarter.

    This is the second quarter in a row that the Omaha-based conglomerate has trimmed the stake in the iPhone maker. It sold about 10 million Apple shares (just 1% of its massive stake) in the fourth quarter. This filing, when accounting for the change in Apple’s stock price, would imply Berkshire sold about 116 million shares.

    Buffett became a big fan of Apple after one of his investing managers Ted Weschler or Todd Combs convinced him to buy the stock years ago. Buffett even called the tech giant his second-most important business after Berkshire’s cluster of insurers.

    Stock Chart IconStock chart icon

    Apple

    Many has speculated that the 93-year-old investing icon reduced his favorite stake due to valuation concerns. Apple’s stock gained a whopping 48% in 2023 as megacap tech shares led the market rally. At its peak, Apple ballooned in Berkshire’s equity portfolio, taking up 50% of it. The shares are trading at more than 27 times forward earnings.

    Shares of the iPhone maker got a big boost in the past week after the firm announced that its board had authorized $110 billion in share repurchases, the largest in company history. However, Apple posted a decline in overall sales and in iPhone sales. The shares are down more than 4% so far this year amid concerns about how it will revive growth.

    It’s not without precedent that the Berkshire CEO would adjust the Apple bet. He sold a bit of the stock in the fourth quarter of 2020, but Buffett admitted then that it was “probably a mistake.” Also it’s not usual for Buffett to trim a position that has grown so large.

    Even with the sale, Berkshire is still Apple’s largest shareholder outside of exchange-traded fund providers.

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  • The next airport terminal lounge or club you pass may also be a bank branch

    The next airport terminal lounge or club you pass may also be a bank branch

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    Nicolette Nelson was running late for her return flight to Fairbanks as she sprinted towards her gate at Cincinnati/Northern Kentucky International Airport (CVG). Overcome by a medical issue, she didn’t make it to her gate and wound up spending the night in a Cincinnati hospital. By the next day, she had recovered and awaited her flight home, but it was repeatedly delayed.

    So Nelson spent hours of her delay in a quiet cubicle in an unlikely place — a bank — waiting for her flight and wiling away the time on electronic devices.

    “It’s been really, it’s quiet and that is what I need,” Nelson said.

    Fifth Third Bank was trying to appeal to this type of traveler when it rechristened its 40-year-old CVG branch last month as a combination lounge and lending center. Weary travelers and constantly working entrepreneurs stake out prime spots in the bank away from the airport hubbub, while corporate travelers use the center to squeeze out more business.

    “One woman wanted to rent my office to work,” remembers Lisa Slocum, the airport Fifth Third Bank branch manager. Slocum directed the woman to other options in the branch.

    Other customers use the bank on a purely transactional basis. On a recent day, Hannah Thelen and her mother, Ashley Thelen, were passing through on their way to Spain and stopped in to convert currency.

    “I love the central location,” Ashley Thelen said as she converted dollars to euros. 

    It’s a central location for a flyer, but a maze of trams, moving sidewalks, and concourses need to be navigated to get to it in Terminal B, and it is past the TSA checkpoint, so the branch doesn’t get customers off the street.

    Fifth-Third Bank isn’t the first financial institution to create an airport lounge vibe. Capital One closed its branch at Washington, D.C.’s Dulles International Airport in 2020, instead creating “airport lounges” for cardholders in Dulles, along with similar spots at airports in Denver and Dallas. The lounges offer amenities on par with an airline rewards club but are only for Capital One card holders, and banking services are not a part of the experience like they are at Fifth-Third’s CVG branch.

    Capital One Lounge inside Dulles International Airport in Washington, D.C.

    Capital One

    If CVG were a city, it’d be the fourth or fifth largest in Kentucky on most days, with 16,000 workers employed on the airport campus daily, according to Mindy Kershner, CVG’s senior manager of communications, plus the nine million passengers going through the gates yearly. That’s a lot of potential banking customers. Yet full-service airport bank branches are a relative rarity, surprising in a retail landscape that often resembles an upscale mall more than a terminal.

    Wings Credit Union has a small full-service branch at the Minneapolis-St. Paul International Airport, and Wings Vice President of Marketing Brent Andersen said the branch is also more about serving the large number of airport employees who are members than the traveling public. He adds, however, that in terms of visibility and advertising, even with the higher airport rent, the branch is a no-brainer.

    “We’d have to spend a lot more in other advertising to get that kind of visibility,” Andersen said, crediting the branch with also landing new members.

    For Fifth Third Bank, and a handful of other retail banking players, the airport branches are more than just expensive advertising for the brand (though that’s certainly part of the appeal). They are also functional financial centers, and in a digital era when bank branches are under existential scrutiny, some financial companies are betting on airports as a viable and visible place to keep their shingle hung.

    Big banks are adding hundreds of branches

    The banks and credit unions adding airport branches are just another indicator that the long-predicted demise of in-person banking at the hands of digital isn’t happening exactly as expected. The long-term trend is still less retail footprint, but branches have been staging a bit of a comeback. In fact, FDIC data shows that 2023 saw the first annual gain in branch count nationwide, to nearly 70,000, in a decade. This rebound comes as banking giants JPMorgan Chase and PNC have announced plans to open more branches — Chase up to 500, plus 1,700 renovations, while PNC is adding 100 new branches and renovating another 1,000 at a cost of $1 billion over the next three to five years.

    When Fifth Third Bank, the nation’s tenth-largest bank by deposits, rechristened its 40-year-old CVG location last month, it did so with plenty of local media coverage, cementing its commitment to airport banking.

    “There are very few full-service branches in airports, and this is one of a kind,” said John Sieg, regional retail executive for Fifth Third Bank. The bank is trying to create something like Delta’s Sky Club, except with on-site banking — cashing checks, checking balances, and converting currency — and open to all. And you won’t get dinged with an overdraft fee for lounging on their sofas.

    “Our objective is for travelers to have a place to do their full-service banking and hang out with us. They could hang out with us all day if they have a delayed flight. We have had customers that have done it,” Sieg said.

    Wells Fargo operates a full-service branch in Las Vegas’s Harry Reid International Airport, and according to a bank spokeswomen, has a multi-year relationship with the airport that involves both the branch and multiple ATMs throughout terminals. Although Wells Fargo had little to say about the branch, it’s not difficult to imagine why it might be popular in Vegas, where slots are as much a part of the landscape as espresso machines.

    Truist Bank, formerly SunTrust, operates a full-service bank branch at Hartsfield-Jackson Atlanta International Airport, where serving customers remains a top priority, but Brian Davis, director of consumer and small business banking communications, also noted that being at the airport provides the bank with “a high level of brand visibility for the millions of passengers who pass through.”

    Still, not everyone in the industry is sold on mixing anxiety about getting through security and to the gate on time with personal finance.

    “I think it’s a bad idea,” says Paul McAdam, senior director of banking and payments intelligence at analytics firm J.D. Power. McAdam says ATMs and advanced-function kiosks are one thing, but a full-service branch, except maybe in the largest markets, is overkill. JFK Airport in New York City has three credit unions in its terminals.

    “I sense that bank branches in airports would handle a lot of transaction volume but very little value-added volume of customers looking to open accounts or receive advice. Who wants to open a new account in an airport?” McAdam said.

    Financial giants are testing the concept of bank-branded destinations more widely. Capital One has opened some cafes in New York that cater to the remote worker, offering a financial vibe without vaults of money and tellers watching your every move. 

    With most travelers focused on traveling, Fifth Third conceded that banking isn’t top of mind for many airport customers. Sieg says the CVG branch does about 1,700 transactions a month.

    “That is probably on the smaller side of what a transaction count would be at a traditional bank mart or office,” he said, but the visibility of the branch makes up for lower volume.

    The branch offers an array of spaces, including a service bar where travelers can tap away at their tablets while watching coffee-clutching, harried travelers racing for their gates. The bank also includes a fully private office with phones, a hydration station, sofas, and overstuffed chairs, an enticement for remote workers. 

    “Regardless of whether you are a customer or a non-customer, we wanted to put out the best welcome sign we could have. Everybody is invited and can use this space,” Sieg said.

    However, if someone feels a need to apply for a mortgage during their layover or open a savings account, the branch has that functionality.

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  • Long-predicted consumer pullback finally hits restaurants like Starbucks, KFC and McDonald’s

    Long-predicted consumer pullback finally hits restaurants like Starbucks, KFC and McDonald’s

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    It’s finally here: the long-predicted consumer pullback.

    Starbucks announced a surprise drop in same-store sales for its latest quarter, sending its shares down 17% on Wednesday. Pizza Hut and KFC also reported shrinking same-store sales. And even stalwart McDonald’s said it has adopted a “street-fighting mentality” to compete for value-minded diners.

    For months, economists have been predicting that consumers would cut back on their spending in response to higher prices and interest rates. But it’s taken a while for fast-food chains to see their sales actually shrink, despite several quarters of warnings to investors that low-income consumers were weakening and other diners were trading down from pricier options.

    Many restaurant companies also offered other reasons for their weak results this quarter. Starbucks said bad weather dragged its same-store sales lower. Yum Brands, the parent company of Pizza Hut, KFC and Taco Bell, blamed January’s snowstorms and tough comparisons to a strong first quarter last year for its brands’ poor performance.

    But those excuses don’t fully explain the weak quarterly results. Instead, it looks like the competition for a smaller pool of customers has grown fiercer as the diners still looking to buy a burger or cold brew become pickier with their cash.

    The cost of eating out at quick-service restaurants has climbed faster than that of eating at home. Prices for limited-service restaurants rose 5% in March compared with the year-ago period, while prices for groceries have been increasing more slowly, according to the Bureau of Labor Statistics.

    “Clearly everybody’s fighting for fewer consumers or consumers that are certainly visiting less frequently, and we’ve got to make sure we’ve got that street-fighting mentality to win, irregardless of the context around us,” McDonald’s CFO Ian Borden said on the company’s conference call on Tuesday.

    Outliers show that customers will still order their favorite foods, even if they’re more expensive than they were a year ago. Wingstop, Wall Street’s favorite restaurant chain, reported its U.S. same-store sales soared 21.6% in the first quarter. Chipotle Mexican Grill, whose customer base is predominantly higher income, saw traffic rise 5.4% in its first quarter. And Restaurant Brands International’s Popeyes reported same-store sales growth of 5.7%.

    “What we’ve seen with the consumer is, if they are feeling pressure, they have a tendency to pull back on more high-frequency [quick-service restaurant] occasions,” Wingstop CEO Michael Skipworth told CNBC.

    He added that the average Wingstop customer visits just once a month, using the chain’s chicken sandwich and wings as an opportunity to treat themselves rather than a routine that can easily be cut due to budget concerns. Skipworth also said that Wingstop’s low-income consumers are actually returning more frequently these days.

    Even so, many companies in the restaurant sector and beyond it have warned consumer pressures could persist. McDonald’s CEO Chris Kempczinski told analysts the spending caution extends worldwide.

    “It’s worth noting that in [the first quarter], industry traffic was flat to declining in the U.S., Australia, Canada, Germany, Japan and the U.K.,” he said.

    Two of the chains that struggled in the first quarter cited value as a factor. Starbucks CEO Laxman Narasimhan said occasional customers weren’t buying the chain’s coffee because they wanted more variety and value.

    “In this environment, many customers have been more exacting about where and how they choose to spend their money, particularly with stimulus savings mostly spent,” Narasimhan said on the company’s Tuesday call.

    Yum CEO David Gibbs noted that rivals’ value deals for chicken menu items hurt KFC’s U.S. sales. But he said the shift to value should benefit Taco Bell, which accounts for three-quarters of Yum’s domestic operating profit.

    “We know from the industry data that value is more important and that others are struggling with value, and Taco Bell is a value leader. You’re seeing some low-income consumers fall off in the industry. We’re not seeing that at Taco Bell,” he said on Wednesday.

    It’s unclear how long it will take fast-food chains’ sales to bounce back, although executives provided optimistic timelines and plans to get sales back on track. For example, Yum said its first quarter will be the weakest of the year.

    For its part, McDonald’s plans to create a nationwide value menu that will appeal to thrifty customers. But the burger giant could face pushback from its franchisees, who have become more outspoken in recent years. While deals drive sales, they pressure operators’ profits, particularly in markets where it is already expensive to operate.

    Still, losing ground to the competition could motivate McDonald’s franchisees. This marks the second consecutive quarter that Burger King reported stronger U.S. same-store sales growth than McDonald’s. The Restaurant Brands chain has been in turnaround mode over the last two years and spending heavily on advertising.

    Starbucks is also betting on deals. The coffee chain is gearing up to release an upgrade of its app that allows all customers — not just loyalty members – to order, pay and get discounts. Narasimhan also touted the success of its new lavender drink line that launched in March, although business was still sluggish in April.

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