Chinese state-owned shipping giant Cosco suspended shipping to Israel through the Red Sea as tensions in the strategic shipping lane continue to rise, Israeli state media reported.
“COSCO’s decision is significant because it cooperates with Israeli shipping line ZIM, which will have to operate more ships on the Far East routes,” Globes reported.
Cosco has another line it jointly operates with Zim. In an e-mail to CNBC, Zim confirmed that it will continue its operations.
“We can confirm that our Tyrrhenian Container Line Service, connecting Israel, Fos Sur-Mer (France), Genoa and Salerno (Italy) which has been operated jointly with COSCO, will continue its operation by ZIM, and is currently planned to maintain a weekly service,” the team said, adding that the updated schedule will be published in the coming days.
Cosco did not immediately respond to a CNBC request for comment.
A pedestrian holds an umbrella as they walk along a street in the rain in Times Square, New York, on Sept. 26, 2023.
Ed Jones | AFP | Getty Images
The state of the U.S. economy may be a chief concern among Americans, but 2023 wound up as a pretty good year for the macroenvironment.
Spending remained high, markets posted big gains and the Federal Reserve’s battle against inflation showed signs of cooling — without freezing. Then there’s the almost logic-defying resilience of the job market.
The U.S. labor market ended the year strong, creating more than 200,000 jobs in December, according to figures released Friday by the U.S. Bureau of Labor Statistics. While previous job creation estimates for October and November were revised downward by a combined 75,000, the unemployment rate remained at a low 3.7%, and December marked the 36th consecutive month of job creation for the U.S. economy.
In total, the U.S. created nearly 2.7 million jobs in 2023, when seasonally adjusted. That figure came despite concerns that the Federal Reserve’s ongoing fight against inflation through interest rate hikes might cool the labor market and put a chill on consumer spending.
Neither of those concerns came to fruition, however. In fact, consumer spending remained robust throughout the year, with monthly advanced retail sales staying above the $600 million mark for most of 2023, proving that despite many economic headwinds, U.S. consumers could not be deterred.
Here are nine other charts that show how the economy rounded out 2023.
While inflation continues to be top of mind for U.S. consumers, the rate of inflation cooled significantly in 2023. Meanwhile, wages rose throughout the year, eventually outpacing price increases.
U.S. consumers were in a mood to spend, particularly on experiences: 2023 was officially the year that travel rebounded, with the Thanksgiving holiday period breaking U.S. records. Nearly 150 million passengers were screened by the Transportation Security Administration across U.S. airports in November and December.
Americans spent on entertainment, too. With major hits such as “Barbie,” “Oppenheimer” and Taylor Swift’s The Eras Tour concert film, the U.S. box office came back in a big way last year from its Covid-19 pandemic lows.
Even assets such as crypto saw a rebound in 2023 after hitting a low in November of the previous year. Bitcoin prices ended the year at almost three times that previous low.
After its historic rate increases in 2022, the Federal Reserve tempered its war on inflation and only raised rates at four of its eight meetings in 2023. While the central bank’s target range for interest rates is the highest it has been since 2006, recent comments from Chair Jerome Powell have Fed watchers optimistic that rate cuts may be coming in 2024.
There were some trouble areas for consumers, however. Mortgage rates continue to be high. The average 30-year fixed rate in October was nearly triple what it was at the end of 2020 — although rates came down significantly by the end of the year — and existing home sales remain low, according to data from the National Association of Realtors. Until more housing inventory comes online, those issues are likely to persist into 2024.
A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.
Justin Sullivan | Getty Images
United Airlines is preparing to ground dozens of its Boeing 737 Max 9 aircraft for inspections, a day after a panel blew out of an Alaska Airlines flight, according to a person familiar with the matter.
The announcement to ground the planes could come as early as Saturday, the person said. Alaska Airlines announced it would ground its Max 9 fleet after the incident on Friday.
No serious injuries were reported aboard Alaska Airlines Flight 1282, according to federal safety officials. The plane returned to Portland shortly after takeoff on Friday after a pressurization issue was reported. Boeing delivered the planes late last year.
The Federal Aviation Administration didn’t immediately comment.
This is breaking news. Please check back for updates.
An Alaska Airlines plane takes off from Los Angeles International Airport (LAX) on December 4, 2023 in Los Angeles, California.
Mario Tama | Getty Images News | Getty Images
Alaska Airlines will temporarily ground its fleet of 65 Boeing 737 Max 9 planes after a section of the plane blew out midflight on Friday, forcing the crew to make an emergency landing.
“Each aircraft will be returned to service only after completion of full maintenance and safety inspections,” CEO Ben Minicucci said. “We anticipate all inspections will be completed in the next few days.”
Alaska Airlines Flight 1282 was heading to Ontario, California from Portland, Oregon, when it returned shortly after departure with 171 passengers and six crew aboard, the airline said.
Images and video of the new Boeing 737 Max 9 shared on social media showed a gaping hole on the side of the plane and passengers using oxygen masks. It landed back in Portland at 5:26 p.m. local time, according to Flightradar24. It had reached an altitude of 16,325 feet before returning to Portland.
The National Transportation Safety Board said “no serious injuries” were reported. It is sending a team to Portland to investigate, arriving later on Saturday. The Federal Aviation Administration also said it plans to investigate.
“While this type of occurrence is rare, our flight crew was trained and prepared to safely manage the situation,” Alaska said.
The plane was certified in November, according to flight-tracking site FlightAware.
Boeing also said it was aware of the incident but declined to comment further.
“We are working to gather more information and are in contact with our airline customer,” it said in a statement. “A Boeing technical team stands ready to support the investigation.”
The incident was described as “an explosive decompression at the window exit,” said Sara Nelson, president of the Association of Flight Attendants-CWA, the labor union that represents Alaska’s cabin crew and flight attendants at United, Spirit and other carriers.
“Our Union strongly believes this decision [to ground the Max 9 fleet] is a prudent and necessary step toward ensuring the safety of all crew and passengers,” she said in a statement. “We will closely monitor the safety inspection process to ensure that aircraft are not returned to service until they are deemed safe for all.”
The Boeing 737 Max 9 has a cabin exit door behind the wings for use in dense seating cabin configurations, like those used by budget airlines, according to Flightradar24.
“The doors are not activated on Alaska Airlines aircraft and are permanently ‘plugged,’” Flightradar23 said.
The airline didn’t immediately respond to a comment about the door and Boeing declined to comment beyond its statement.
United Airlines, which also has 737 Max 9 in its fleet, didn’t immediately comment.
There are 215 Boeing 737 Max 9 planes in service worldwide, according to aviation-data firm Cirium, and Alaska had completed 5,024 flights with the aircraft before Friday’s incident.
The Boeing 737 Max 9 is a larger version of Boeing’s best-selling jetliner, the 737 Max 8. Max planes were grounded worldwide in 2019 after two fatal crashes within five months. The U.S. lifted its flight ban of the jets in late 2020 after software and training updates.
Late last year, Boeing urged airlines to inspect aircraft for a “possible” loose bolt in the rudder control system, the latest in a series of manufacturing flaws on the planes that have prompted additional inspections.
VinFast Auto Ltd. electric vehicle VF8 model at the company’s showroom in Hanoi, Vietnam, on Thursday, Sept. 7, 2023. VinFast is one of Vietnam’s most high-profile companies, backed by the country’s wealthiest man Pham Nhat Vuong who has established Vingroup JSC, a conglomerate spanning homes, hotels, hospitals and shopping malls. The group, together with its affiliates and lenders, have deployed $8.2 billion to fund VinFast’s operating expenses and capital expenditures the last six years. Photographer: Linh Pham/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
Vietnamese electric vehicle maker VinFast on Saturday named its founder and biggest financial backer, Pham Nhat Vuong, as chief executive as it plans an ambitious overseas expansion and ramps up sales via dealerships.
Vuong, 55, replaces Le Thi Thu Thuy, who had held the post since late 2021, VinFast said in a statement. Thuy, a finance expert, will serve as chairwoman and lead engagement with external stakeholders.
Vuong, also the founder and chairman of Vingroup — Vietnam’s biggest conglomerate and VinFast’s parent company — will directly oversee the EV maker’s operations, including global production, sales and marketing, the company said.
He will be VinFast’s fourth chief executive. Previous CEOs include General Motors veteran James Deluca and Michael Lohscheller, who came from Opel and Volkswagen.
In the latest executive changes for the ambitious Vietnamese automaker, VinFast appointed Nguyen Thi Lan Anh, who oversees financial matters at Vingroup’s EV battery arm, as chief financial officer, replacing David Mansfield, who was in place from 2022.
“It is the right time to evolve the Company’s leadership as it enters the next phase of its development,” VinFast’s Board of Directors said.
Founded in 2017, VinFast started manufacturing EVs in 2021 and has continuously received financial support from Vuong, who is Vietnam’s richest man, according to Forbes.
In April 2023, Vuong provided VinFast with a $1 billion grant.
VinFast, which is yet to make a profit, has entered the EV market at a time when car prices are under pressure, led by cuts at market leader Tesla and a range of Chinese companies, including BYD.
The company closed the third quarter, which ended Sept. 30, with a net loss of $623 million.
In June 2023, Hanoi-born Vuong said that he expected VinFast “to reach break even point by the end of 2024.”
Vuong built his initial fortune in Ukraine, where he moved in the early 1990s after studying engineering in Russia and manufactured instant noodles, before selling the firm to Nestle SA for an undisclosed sum.
He returned to Vietnam in 2002 and established the country’s biggest conglomerate, focused on real estate, resorts, schools, hospitals, shopping malls and, more recently, EVs.
PHOENIX, ARIZONA – FEBRUARY 09: Former NFL player and host Pat McAfee speaks on radio row ahead of Super Bowl LVII at the Phoenix Convention Center on February 9, 2023 in Phoenix, Arizona.
Mike Lawrie | Getty Images
ESPN’s Pat McAfee problem is getting more complicated.
On Friday, the host and former NFL punter publicly attacked longtime ESPN executive Norby Williamson, accusing him of “actively trying to sabotage” him by leaking information to reporters.
The New York Post reported on McAfee’s relatively low ratings Thursday, noting “since the inception of McAfee’s show on ESPN in the fall, Stephen A. Smith and ‘First Take’ are handing McAfee a 583,000 viewer lead-in, and McAfee is maintaining just 302,000, which is a 48% drop.”
McAfee implied Williamson may have leaked the idea for the story to New York Post reporter Andrew Marchand. Marchand declined to comment.
“I believe Norby WIlliamson is the guy who is attempting to sabotage our program,” McAfee said. “I’m not 100% sure. That is just seemingly the only human that has information and then somehow that information gets leaked, and it’s wrong.”
McAfee didn’t specifically say what information was wrong. Over the years, other ESPN talent have speculated that Williamson has leaked private details, including contract information, according to people familiar with the matter. On Friday, former ESPN journalist Jemele Hill posted on social media platform X “I can relate” with regard to McAfee’s comments about Williamson.
There’s no evidence Williamson has leaked information. Williamson, who has worked for ESPN for nearly 40 years, declined to comment through an ESPN spokesperson.
ESPN management values the importance of both McAfee and Williamson and is looking into the details of why McAfee denigrated an executive, according to a person familiar with the matter. There is no planned suspension for McAfee, and ESPN hopes to find a path forward for both Williamson and McAfee, according to a person familiar with the matter.
An ESPN spokesperson declined to comment.
Earlier this week, McAfee found himself in hot water for providing a platform for New York Jets quarterback Aaron Rodgers to disparage a fellow Disney employee. Rodgers, a frequent guest on McAfee’s show, incorrectly suggested ABC late-night talk show host Jimmy Kimmel would be included in court documents related to late sex criminal Jeffrey Epstein. Kimmel fired back Tuesday, tweeting Rodgers’ “reckless words put [his] family in danger.”
“I could see exactly why Jimmy Kimmel felt the way he felt, especially with his position,” McAfee said Wednesday, noting that Rodgers “did go too far.”
ESPN on Friday also addressed Rodgers’ comments about Kimmel.
“Aaron made a dumb and factually inaccurate joke about Jimmy Kimmel. It should never have happened. We all realized that in the moment,” ESPN executive Mike Foss told Front Office Sports.
The New York Post previously reported that McAfee has paid Rodgers “millions” to appear on his show. The former MVP and Super Bowl champion, who has made hundreds of millions of dollars in the NFL, joined the Jets last year after playing for over a decade with the Green Bay Packers. He missed the season with an Achilles tendon injury.
A representative for Rodgers didn’t immediately respond to a request for comment.
The Maersk Sentosa container ship sails southbound to exit the Suez Canal in Suez, Egypt, on Thursday, Dec. 21, 2023.
Stringer | Bloomberg | Getty Images
Danish shipping giant Maersk said Friday it would extend its diversion of vessels from the Red Sea for the “foreseeable future” due to safety concerns amid a spate of attacks by Houthi militants.
“The situation is constantly evolving and remains highly volatile, and all available intelligence at hand confirms that the security risk continues to be at a significantly elevated level,” Maersk said in a statement.
It added that it hoped to now bring customers “more consistency and predictability,” despite delays to deliveries.
The diversion means avoiding the quickest path between Europe and Asia through Egypt’s Suez Canal, and taking the longer Cape of Good Hope route around southern Africa.
Several European firms, including Sweden’s Ikea, British retailer Next and appliance firm Electrolux, have warned of delays on some products due to supply chain disruption.
Maersk had resumed travel through the Red Sea and Gulf of Aden after a December pause, but halted it again on Tuesday after one of its vessels was attacked.
Uncertainty for firms has not eased despite a U.S.-led multinational military operation in the region, which aims to provide a “persistent defensive presence in the Red Sea” and has fired on Houthi boats.
The Houthis are a Yemen-based group backed by Iran. Its leadership has said it is targeting Israel-bound vessels in support of the Palestinian people amid the war in Gaza, but ships bound for multiple destinations have been attacked.
Traveling around Africa can add between two and four weeks to a ship’s transit time between Asia and Europe depending on the speed traveled, Maersk CEO Vincent Clerc told CNBC in a December interview.
Nearly 15% of global seaborne trade transits the Red Sea, according to the U.S. Analysts broadly do not see the current disruption as causing as much upheaval to supply chains as was seen during the coronavirus pandemic due to a sharp increase in supply capacity since 2021.
Maersk‘s Europe-listed shares were choppy after the announcement. It has been one of the top European performers of the new year, gaining more than 16% this week.
German shipping firm Hapag-Lloyd has also said it will continue to divert vessels away from the Red Sea amid Houthi attacks.
“What we can say for the moment [is] we don’t see the passage through the Red Sea and the Suez Canal as safe,” Nils Haupt, head of corporate communications at Hapag-Lloyd, told CNBC’s “Squawk Box Europe” on Friday.
“We had an attack in December, you can’t imagine how hard that was, not only for us as a company but especially for our crew. There were several attacks in the last days and as long as the passage through the Red Sea and Suez Canal is not safe, we won’t pass,” he added.
Jeffrey Epstein and Ghislaine Maxwell attend de Grisogono Sponsors The 2005 Wall Street Concert Series Benefiting Wall Street Rising, with a Performance by Rod Stewart, at Cipriani Wall Street in New York City on March 15, 2005.
Joe Schildhorn | Patrick McMullan | Getty Images
A second batch of court filings related to sex predator Jeffrey Epstein were unsealed in New York on Thursday.
The release comes a day after the first group of more than three dozen court filings were unsealed, making public names of people associated with Epstein, a money manager who accumulated a fortune in excess of $500 million at the time of his death by suicide in 2019.
The fact that peoples’ names appear in the files does not necessarily mean they engaged in wrongdoing.
The new filings Thursday comprise 19 exhibits, totaling 327 pages of previously sealed court documents that were docketed in a Manhattan federal court lawsuit filed by Epstein victim Virginia Giuffre against Epstein’s procurer, Ghislaine Maxwell. That case was settled out of court in 2017.
Names mentioned in the new documents include Doug Band, a former aide to ex-President Bill Clinton, Yucaipa Companies co-founder Ron Burkle, the journalists Vicky Ward and Sharon Churcher, and Eva Dubin, who is the wife of billionaire Glenn Dubin.
A spokesperson for Glenn Dubin on Wednesday told NBC News that he “strongly den[ies] these allegations” that Giuffre was direct to have sex with him, calling them unsubstantiated statements. CNBC has requested comment from Ward, Burkle, and Band.
Churcher told CNBC she had not seen the document released Thursday, which related to Maxwell’s attempt to subpoena her because of her reporting on Giuffre. Maxwell’s lawyer had argued that Church was not acting as a journalist but as a friend to Giuffre in her dealings with her.
“I’m a professional journalist and throughout this saga the only input I’ve had to this saga is as a journalist,” Churcher said. She added, referring to Giuffre, that “I have huge admiration for her character in this.”
Clinton himself is mentioned in the new documents, and he was previously mentioned by name in the first tranche of filings unsealed Wednesday.
A spokesman for Clinton, when asked for comment by NBC News, referred to a statement issued in 2019 that said he “knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago, or those with which he has been recently charged in New York.”
The same statement in 2019 said that Clinton had not spoken to Epstein “in well over a decade.”
The documents include details from a Florida police detective of how Epstein and Maxwell recruited young women to be abused. The detective says in a filing that he learned of 30 victims of Epstein in his probe in the mid-2000s.
Other people were mentioned by name in the context of potentially having insight into the relationship between Epstein and Maxwell.
Epstein killed himself in 2019, a month after being arrested on federal child sex trafficking charges.
The British socialite Maxwell is serving a 20-year federal prison sentence for charges related to recruiting and grooming young women to be sexually abused by her former boyfriend Epstein.
The Maersk Sentosa container ship sails southbound to exit the Suez Canal in Suez, Egypt, on Thursday, Dec. 21, 2023.
Stringer | Bloomberg | Getty Images
Attacks on ships in the Red Sea continue to push ocean freight rates higher, triggering warnings of inflation and delayed goods.
To avoid strikes by Iran-backed Houthi militants based in Yemen, carriers have already diverted more than $200 billion in trade over the past several weeks away from the crucial Middle East trade route, which, along with the Suez Canal, connects the Mediterranean Sea to the Indian Ocean.
This has created a multiple-front storm for global trade, according to logistics managers: Freight rates increasing daily, additional surcharges, longer shipping times, and the threat that spring and summer products will be late due to vessels arriving late in China as they travel the long way around South Africa’s Cape of Good Hope.
“The supply chain pressures that caused the ‘transitory’ part of inflation in 2022 may be about to return if the problems in the Red Sea and Indian Ocean continue,” said Larry Lindsey, chief executive of global economic advisory firm the Lindsey Group. “Neither the Fed nor the ECB can do anything about them and will likely ‘look through’ the inflation they cause, potentially leading to rate cuts despite somewhat heightened inflation pressures.”
The persistent violence against commercial ships drew a stern warning from the United States, Japan, the United Kingdom and nine other nations on Wednesday. “The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways,” the countries said in a joint statement.
In the meantime, about 20% of vessel capacity isn’t being used due to a massive drop in manufacturing orders, according to industry experts. Instead, ocean carriers continue to cut their sailings while tight capacity and longer travel times are fueling rate increases.
Rates for freight traveling from Asia to northern Europe more than doubled this week to above $4,000 per 40-foot-equivalent unit (container). Asia-Mediterranean prices climbed to $5,175 per container. Some carriers have announced rates above $6,000 per 40-foot container for Mediterranean shipments starting mid-month, with surcharges ranging from $500 to $2,700 per container.
A cargo ship crosses the Suez Canal, one of the most critical human-made waterways, in Ismailia, Egypt on December 29, 2023.
Fareed Kotb | Anadolu | Getty Images
“Given the sudden upward movement of ocean freight pricing, we should expect to see these higher costs trickle down the supply chain and impact consumers as we move through the first quarter,” said Alan Baer, CEO of shipping firm OL-USA. Companies, reflecting lessons they learned during the supply chain chaos of 2021-22, will adjust prices sooner rather than later, he added.
Rates from Asia to North America’s East Coast have risen by 55% to $3,900 per 40-foot container. West Coast prices climbed 63% to more than $2,700. More shippers are expected to start avoiding the East Coast and favor the West Coast ports. Likewise, rates are on track to rise again starting Jan. 15 due to previously announced increases.
“This is a big deal as it’s been mostly the fall in goods prices that have eased the inflation strain,” Peter Boockvar, investment chief at Bleakly Financial Group, told CNBC. “And while the battles going on in the Red Sea could end at any moment if the war in Gaza ends, it’s a reminder to the Fed that they can’t get complacent with their inflation fight if they don’t want to repeat the 1970s.”
Diversions from Egypt’s Suez Canal, which feeds into the Red Sea, are hurting capacity. Rerouting vessels around the Cape of Good Hope adds two to four weeks to a round-trip voyage, according to Honour Lane Shipping (HLS). Ocean alliances need more ships on each Asia-East Coast route to maintain an efficient network schedule.
“Some 25%-30% of global container shipping volumes pass through the Suez Canal (mainly on Asia-Europe trade), and it is estimated that widespread re-routing around Africa could reduce effective global container shipping capacity by 10%-15%,” said the note. “While the disruption continues, carriers may have to reduce the number of port calls to offset the impact of longer routes.”
A grab from handout footage released by Yemen’s Huthi Ansarullah Media Centre on November 19, 2023, reportedly shows members of the rebel group during the capture of an Israel-linked cargo vessel at an undefined location in the Red Sea. Israeli ships are a “legitimate target”, Yemen’s Huthi rebels warned on November 20, a day after their seizure of the Galaxy Leader and its 25 international crew following an earlier threat to target Israeli shipping over the Israel-Hamas war.
– | Afp | Getty Images
The longer travel time could also delay the arrival of spring goods that are traditionally picked up before the Chinese Lunar New Year, set for February, when factories close and employees go on vacation. Containers that were supposed to arrive on the East Coast in December are arriving now, according to logistics managers. Items include spring and summer clothing, pools, pool supplies, Easter products, patio furniture, and home and garden products.
North American East Coast ports in December, amid the Houthi attacks, “lost” several calls, which were instead pushed into January, according to data from maritime intelligence firm eeSEA. The vessels will instead arrive in January and February.
So vessels are not only late in dropping off their containers to their final destinations, they’re also late getting back to Asia to load containers. As a result, HLS is urging clients to book their container space four to five weeks in advance to secure a spot.
It’s reminiscent of what freight companies experienced during Covid’s earlier days.
“We used to book out four to six weeks out during Covid,” said OL-USA’s Baer. “During Covid, we had way too much cargo, and all the ships were full, so you have to forecast your bookings out. Now while there is vessel capacity, the vessels are late, so it’s a scramble to make sure you get your container on that vessel.”
Ocean carriers are also expanding land-freight services for those using West Coast ports intead of the East Coast. This is a similar strategy deployed by Hapag-Lloyd during Covid, when it offered clients service across land to the West Coast from the East Coast because it was faster.
These diversions in trade will create opportunities for West Coast railroad companies, Union Pacific and BNSF, a subsidiary of Berkshire Hathaway. The extra containers will also be a boost for trucking companies that also service those ports.
“Coming out of the holiday break we are seeing significant volumes being routed from Asia to the U.S. West Coast and via the Panama Canal to the U.S. East Coast to avoid the Suez Canal,” said Paul Brashier, vice president of drayage and intermodal at ITS Logistics. “We are forecasting this activity to increase as we get closer to the Lunar New Year peak season.”
A PGA TOUR logo is seen after play was suspended due to severe storms during the third round of THE PLAYERS Championship held at THE PLAYERS Stadium course at TPC Sawgrass on May 14, 2011 in Ponte Vedra Beach, Florida.
Streeter Lecka | Getty Images
PGA Tour and LIV Golf are working to extend their proposed merger deadline, which was originally set at Dec. 31, Commissioner Jay Monaha told players in a memo on Sunday.
“While we had initially set a deadline of December 31, 2023, to reach an agreement, we are working to extend our negotiations into next year based on the progress we have made to date,” according to the memo obtained by CNBC.
Monahan told players their goal for 2024 is to reach agreements with Strategic Sports Group (SSG), the Public Investment Fund (PIF) and DP World Tour, bringing them on board as minority co-investors in PGA Tour Enterprises.
The PGA Tour recently announced that it was in the final round of negotiations with a coalition of U.S. investors, called Strategic Sports Group. The SSG is led by Fenway Sports Group. Monahan said they have made “meaningful progress” and have provided SSG with the due diligence information they requested.
“These partnerships will allow us to unify, innovate and invest in the game for the benefit of players, fans and sponsors,” he said.
The competing golf leagues are expected to make a formal decision on the combination ahead of the Masters tournament in April, according to The Telegraph, which first reported the extension.
The delay is the latest update in a long and tumultuous saga between the PGA Tour and Saudi Public Investment Fund-backed LIV Golf that has divided players and could dramatically change professional golf if the merger is completed.
The two entities agreed in June to combine commercial operations, shocking the global golf community and raising questions around competition and human rights considerations. Under the structure of the agreement, PGA Tour would hold a permanent controlling interest in the new entity’s board of directors and PIF would be a noncontrolling minority investor.
If the proposed merger is completed, PIF is prepared to invest $1 billion into the new commercial business. The agreement also includes the DP World Tour, also known as the PGA European Tour.
The deal is subject to likely antitrust scrutiny from the U.S. Federal Trade Commission and Justice Department.
Before the agreement, PGA Tour and LIV were locked in heated litigation as LIV Golf lured Tour players away, offering big contracts. LIV Golf most recently signed world No. 3 player Jon Rahm to a contract worth a reported $300 million.
Last month, the Tour told players it would begin offering direct equity ownership in the new company after it reaches a deal with investors.
In late November, PGA Tour Commissioner Jay Monahan told Andrew Ross Sorkin at the DealBook Summit that he was meeting with Yasir Al-Rumayyan, chairman of LIV Golf and PIF governor, to continue discussions.
“When this gets finalized, the PGA Tour is going to be in a position where the athletes are owners in their sport and you’ve got not only the PIF, but you’ve likely got another co-investor with significant experience in business, in sport and [in] brand that’s going to help take the PGA Tour to another level,” Monahan said at the time.
Enfimil infant formula, made by Mead Johnson Nutrition Co., sits on display in a supermarket in New York, U.S.
Daniel Acker | Bloomberg News | Getty Images
Baby formula maker Reckitt Benckiser’s Mead Johnson Nutrition has voluntarily chosen to recall certain batches of baby formula powder due to possible bacterial contamination, according to the U.S. Food and Drug Administration.
The possibly impacted batches of Nutramigen Powder, an infant formula specially designed for children allergic to cow’s milk, were produced in June and distributed throughout the summer.
“Based on the limited availability of the remaining stock of this special infant formula, it is believed that much, if not all, of the products recalled in the United States have been consumed,” Reckitt said in a statement published by the FDA on Sunday.
The company said no “illnesses or adverse events” have been recorded yet but urged consumers who have purchased Nutramigen to check the bottom of the can to see if they have one of the possibly contaminated batches.
The impacted batch numbers and their corresponding can sizes are as follows:
ZL3FHG, 12.6 oz cans
ZL3FMH, 12.6 oz cans
ZL3FPE, 12.6 oz cans
ZL3FQD, 12.6 oz cans
ZL3FRW, 19.8 oz cans
ZL3FXJ, 12.6 oz cans
The possible bacterial infection in the product can cause potentially fatal infections like sepsis and meningitis, which often have symptoms like jaundice, temperature change, poor feeding, irritability, trouble breathing and unusual movements.
The Force remains strong with the Star Wars franchise.
Despite not releasing a theatrical film since 2019, Star Wars has been named the top film franchise of 2023 by Fandom, the world’s largest platform for entertainment fans.
“The Star Wars brand has no peer when it comes to the unprecedented goodwill, cultural ubiquity, character mythology and sheer revenue-generating power achieved across most every vertical in the entertainment ecosystem,” said Paul Dergarabedian, senior media analyst at Comscore.
Fandom’s top 10 film franchises of 2023
Star Wars
Disney
Harry Potter
The Marvel Cinematic Universe
The DC Extended Universe
The Hunger Games
Jurassic Park
Dune
James Bond
Avatar
Source: Fandom
Fandom’s scoring is based on five metrics: how many content pages the franchise has on Fandom’s site; ratings from critics and fans; how often the franchise is represented in the real world through conventions and fan events; cultural relevance to those who are not core to the fan base; and the amount of new content from the franchise to sustain interest.
Star Wars’ No.1 ranking suggests that Disney’s revitalization of the brand, which took a hit in the wake of a sequel trilogy for the films, is working. Disney appears at No. 2 on the list, representing its animated films, and its Marvel and Avatar franchises also make the cut.
Disney’s success with Star Wars can also offer a blueprint to other film franchises that are in the process or restarting or evolving — namely Marvel and Warner Bros. Discovery’s Harry Potter and DC Studios.
After buying Lucasfilm in 2012, Disney went straight to work, cooking up new theatrical content from the Star Wars brand. “The Force Awakens” arrived in theaters in 2015 and instantly recaptured fan interest worldwide. The film snapped up more than $2 billion globally and became the basis for billion-dollar theme park expansions at both Disneyland and Disney World.
However, it quickly became clear that Disney didn’t have a singular plan when it set out to make its new trilogy of Star Wars films. The narrative thread that was supposed to link the trilogy together was improvised and resulted in three films that aren’t cohesive and riddled with plot holes.
Rey and Kylo Ren face off in “Star Wars: The Rise of Skywalker.”
Disney
Each movie seems to be a total departure from the previous one. If 2015’s “The Force Awakens” was criticized for being too much of a mirror of the original trilogy, 2017’s “The Last Jedi” was criticized for doing the exact opposite. “The Rise of Skywalker” in 2019 undid major story lines from its predecessor and sidelined major characters. Emperor Palpatine, who was killed by Darth Vader in 1983’s “Return of the Jedi,” returned — somehow.
In between each film in the sequel trilogy, Disney released a film that harkened back to an important plot point from past Star Wars films. “Rogue One: A Star Wars Story,” which followed the rebels who stole the Death Star plans given to Princess Leia in the original “Star Wars,” was generally well-received across the board when it hit theaters in 2018, but two years later, “Solo,” which centered on Han Solo’s origin, fell flat with critics and many in the fan community.
“At the time, Disney’s strategy was to essentially release one new Star Wars film theatrically each year,” said Peter Csathy, founder and chair of advisory firm Creative Media. “But each year brought diminishing box office returns.”
A new generation of Star Wars films at the global box office
“The Force Awakens” (2015) — $2.07 billion
“Rogue One: A Star Wars Story” (2016) — $1.05 billion
“The Last Jedi” (2017) — $1.33 billion
“Solo: A Star Wars Story” (2018) — $393.1 million
“The Rise of Skywalker” (2019) — $1.077 billion
Source: Comscore
While “Solo” was the only true box office flop, Disney decided to suspend its theatrical Star Wars releases and regroup. It was already seeing success from the first season of TV spinoff “The Mandalorian,” which launched in late 2019. The series was proof that Star Wars can strike a balance between nostalgia and innovation — and that the franchise didn’t need to be in theaters to thrive.
“The Mouse House pivoted to a strategy of scarcity for the big screen, while fleshing out the characters and storylines on TV and introducing them — and the entire Star Wars universe — to new generations with new viewing habits, essentially going where the audience was going,” Csathy said. “This, in turn, builds anticipation and buzz for future main marquee events at a theater near you.”
Disney isn’t set to release another Star Wars film in cinemas until 2026. But, in crafting its televised Star Wars content, it is rebuilding goodwill within its established community and drawing in new fans.
Overall, the live-action Star Wars series — “The Mandalorian,” “The Book of Boba Fett,” “Andor,” “Kenobi” and “Ahsoka” — have been well-received by critics and fans alike.
While these stories explore past Star Wars tales, either harkening back to characters seen in past installments or exploring a piece of the Star Wars timeline, and are unlikely to connect to future theatrical entrants, they provide moviegoers with a sense of cohesion and quality.
Rosario Dawson as Ahsoka Tano in “The Mandalorian” on Disney+.
Disney
In animation, Disney released a final season in the “Clone Wars” saga, where fan-favorite Ahsoka Tano debuted, and continued following a number of clone troopers from this era in “The Bad Batch.” Additionally, through streaming, Disney has given audiences several different ways to watch Star Wars stories.
There’s “Tales of the Jedi,” which explored the backstories of Ahsoka and Count Dooku; “Young Jedi Adventures,” which caters to a preschool demographic; and “Visions,” a collection of animated shorts from different genres and featuring different levels of maturity.
In establishing such variety, Disney is entertaining its existing fanbase and offering olive branches to newcomers of all ages.
“I think that creators in these worlds have to find ways to build them and expand the audiences while making sure that it doesn’t skew too much from what the core fans love about it,” said Stephanie Fried, chief marketing officer at Fandom.
Another key for Disney has been parsing these series out slowly over the course of several years.
“A critical takeaway is that franchise theatrical releases need room to breathe,” said Csathy. “We are seeing diminishing returns by the rapid release schedule of the past several years, and now there is a broad realization that anticipation needs to build for box office dynamite to ignite.” That, and the fact that none of these shows are required viewing for future Star Wars projects.
Diego Luna as Cassian Andor and Alan Tudyk as K-2SO in “Rogue One: A Star Wars Story.”
Disney | Lucasfilm
Disney found itself in a tough spot with its Marvel Cinematic Universe because it began introducing key characters in its Marvel streaming shows before they appeared in theatrical projects. This required fans to catch up on hours of television content to understand what was happening on the big screen.
While some viewers might want to catch up on episodes of “Clone Wars” before diving into “Ahsoka,” for example, audiences could in many cases tune into these shows without having to do any homework.
The lessons Disney has learned in revitalizing Star Wars are some that it could apply to another struggling franchise, Marvel, and that Warner Bros. Discovery’s DC and Harry Potter universes may take to heart as they embark on their own refreshes.
At Marvel, life after “Avengers: Endgame” has been riddled with inconsistency and uncertainty. That has taken a toll on box office returns. “The Marvels” posted the worst opening of a MCU film ever in November, leaving the industry and audiences questioning how Disney can save its own superheroes.
Rival DC Studios, with a similarly fervent fan base and similar challenges, appears to be headed in the right direction, tapping James Gunn (“Guardians of the Galaxy” and “The Suicide Squad”) and long-time DC film producer Peter Safran as co-heads of the studio in late 2022.
The story is much the same at Warner Bros.’ Harry Potter franchise. After the wild success of the eight Harry Potter films, Warner Bros. tapped author J.K. Rowling to develop a five-film series based on “Fantastic Beasts and Where to Find Them,” a supplementary informational book about the different creatures in the Harry Potter universe.
While the first film performed well at the box office, generating more than $800 million globally, the rest of the franchise saw diminishing returns and critical reception faltered.
Warner Bros. is due to release fourth and fifth installments of the series, though it has provided few specifics. It also intends to remake the original Harry Potter novels into a 10-season television series for the company’s streaming platform Max, expected in 2025 or 2026.
Star Wars, meanwhile, is set to release two films in 2026 — one in May and one in December — seven years after the last Star Wars film arrived in cinemas.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of the Jurassic World films.
Universal and Illuminations latest animated film centers on a family of ducks who decides to leave the safety of a New England pond for an adventurous trip to Jamaica. However, their well-laid plans quickly go awry when they get lost and wind up in New York City.
Universal
Disney dropped the animation crown. Universal has picked it up.
And, with “Migration” opening Friday, the studio is looking to strengthen its grip.
“Migration,” a comic tale about a family of New England ducks that leave their pond for Jamaica, but end up in New York City, is expected to tally $25 million during its domestic debut. Universal has more conservative expectations, forecasting between $10 million and $15 million in ticket sales for the film’s opening.
While that pales in comparison to the $100 million-plus debuts of Illumination/Universal’s “The Super Mario Bros. Movie” and the latest “Minions” film, it’s comparable to the studio and DreamWorks Animation’s “Puss in Boots: The Last Wish,” which ran in theaters for several months, securing nearly $500 million globally.
“‘Migration,’ with solid word-of-mouth and strong reviews, will have to be judged more on its long-term results than the opening weekend splash,” said Paul Dergarabedian, senior media analyst at Comscore.
Disney’s most recent animated film “Wish” failed to connect with audiences. After generating $31.6 million domestically over the five-day Thanksgiving holiday, the film has grossed a total of $55.2 million in the U.S. and Canada. Globally, the film has reached $127.1 million. The film had a budget of $200 million, not including marketing costs.
For comparison, “Trolls Band Together,” which was released the week before Thanksgiving, secured $30 million for its three-day debut and nearly $180 million worldwide. The film had a budget of $95 million, not including marketing costs.
Representatives from Disney did not immediately respond to CNBC’s request for comment.
Ariana DeBose stars as Asha in Disney’s new animated film “Wish.”
Disney
Disney established its animated feature empire in the early 20th century with 1937’s “Snow White and the Seven Dwarfs” and continued to dominate, more or less, into the 1980s and 1990s with “The Little Mermaid” and “Beauty and the Beast.”
Later, it acquired Pixar, which together with Walt Disney Animation, generated billions in box-office receipts for the company.
“The world of feature animation has been dominated for decades by Disney and for good reason,” said Dergarabedian. “They set the gold standard.”
The decision trained parents to seek out new Disney titles on streaming, not theaters, even when Disney opted to return its films to the big screen. Compounding Disney’s woes was a general sense from audiences that the company’s content had grown overly existential and too concerned with social issues beyond the reach of children.
As a result, no Disney animated feature from Pixar or Walt Disney Animation has generated more than $480 million at the global box office since 2019.
“I think what’s changed is that Disney doesn’t get the benefit of the doubt,” said Josh Brown, CEO at Ritholtz Wealth Management and a CNBC contributor. “And people will not go to a movie just because it’s the latest Disney movie in the way that previous generations did.”
Meanwhile, Universal’s two animation arms — Illumination and DreamWorks — have thrived.
Illumination’s “Minions: The Rise of Gru,” which opened in 2022, tallied $942 million worldwide, DreamWorks’ “Puss in Boots: The Last Wish” capped at $485 million after its holiday 2022 opening, and Illumination’s “The Super Mario Bros. Movie” soared to more than $1.3 billion in 2023.
But as moviegoers have returned to cinemas in the wake of the pandemic, more are gravitating toward Universal’s fare.
“Simply put, Illumination Animation’s only agenda is entertainment,” said Jeff Bock, senior box-office analyst at Exhibitor Relations. “Their animated films are sweet and simple and family audiences appreciate that. Disney sometimes attempts to pack too much into their animated features, and lately have been losing sight of the simplicity of the genre.”
Not to mention, Universal has been revisiting tried and true fan-favorite stories and characters. In fact, Illumination hasn’t released a nonfranchise film since 2016, and only three of the last 10 DreamWorks features have been original stories.
For comparison, of the last eight films released by a Disney animation studio, seven have been original films with just 2022’s “Lightyear,” a “Toy Story” spinoff, tied to an existing franchise. Previously, Disney has thrived bringing new animated material to audiences, but in the post-pandemic world, it has struggled.
It is the exact opposite strategy of Disney’s live-action theatrical releases, which have relied heavily on established franchises. Think “Indiana Jones and the Dial of Destiny,” “The Little Mermaid,” Marvel franchise films and “Haunted Mansion.”
“I think there has to be a reason to make them, you have to have a good story,” Iger said during The New York Times’ DealBook Summit in late November.
“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
In animation, returning to popular characters and worlds is an easy way to capture the attention of parents and kids.
“Because they have seen these characters and related stories before, they have high confidence that they will be high quality, entertaining and ‘brand safe’ for their kids,” said Peter Csathy, founder and chair of advisory firm Creative Media. “And they may even anticipate franchise animated films as much as their kids.”
In developing consistent franchise content like Minions and Trolls, Universal is now able to introduce a new film like “Migration” with a sense of clout. Parents who see that the film is from the same studio that brought other fan favorites to the big screen are then more likely to come out to see it.
It’s what Pixar was able to do so well for nearly three decades.
“With ‘Minions,’ ‘Secret Life of Pets’ and ‘Sing,’ I think Illumination is a brand people are aware of by now,” said Bock. “And that awareness will boost ‘Migration’s’ flight pattern, likely extending its box-office run. That’s key. The long play.”
So far, “Migration” has generally favorable reviews from critics. If audiences respond well, and spread the word, the film could see a solid run, adding to the prestige of Universal’s animation brand.
“The kids animation market opportunity will never grow old, so those playing at the top of the game – as is Illumination – hold the promise and possibility of becoming the next go-to brand for quality animation after Pixar,” said Csathy.
Next year, Disney and Pixar are set to release “Inside Out 2” in June, while Universal and Illumination’s “Despicable Me 4” is scheduled to hit theaters weeks later in July.
Disclosure: NBCUniversal is the parent company of Universal Pictures and CNBC.
Tesla is recalling more than 120,000 vehicles over doors that fail to comply with U.S. government regulations.
In a letter posted on the National Highway Traffic Safety Administration’s website Thursday, Tesla acknowledged the affected doors can be unlocked during a crash, which could cause the door to unlatch and open, increasing the risk of injury.
Affected vehicles include Tesla Models S and X manufactured for model years 2021 through 2023. Tesla said it was not aware of any injuries as a result of the issue as of Dec. 14.
As a remedy, Tesla is releasing an over-the-air (OTA) software update free of charge. Owner notification letters are expected to be sent out Feb. 17, 2024.
Last week, Tesla announced a recall for nearly all its U.S. vehicles — some 2 million — due to concerns about the safety of its autopilot driver-assistance feature. A federal investigation found that its autosteer function may have led some drivers to abandon responsibility for the operation of their vehicles.
That recall came after one in February affecting more than 360,000 vehicles related to Tesla’s “full self-driving” software.
Tesla did not respond to multiple requests for comment.
In a post last week on X, formerly known as Twitter, Tesla issued a statement accusing some news outlets of misconstruing “the nature of our safety systems,” adding that “incontrovertible data” shows Tesla’s features are “saving lives and preventing injury.”
Elon Musk owns X and Tesla.
A NHTSA spokesperson told NBC News last week that its investigation into Tesla’s autopilot features “remains open as we monitor the efficacy of Tesla’s remedies and continue to work with the automaker to ensure the highest level of safety.”
Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea in this photo released on Nov. 20, 2023.
Houthi Military Media | Via Reuters
Drone and missile attacks by Yemen-based Houthi militants have upended shipping through the Red Sea and Suez Canal, a narrow waterway through which some 10% of the world’s trade sails.
U.S. Central Command over the weekend said it shot down “14 unmanned aerial systems launched as a drone wave from Houthi-controlled areas of Yemen.” A day later, oil major BP announced it would “temporarily pause” all transits through the Red Sea, following similar decisions by shipping giants Maersk, MSC, Hapag-Lloyd, and CMA CGM.
The Pentagon said Monday it was forming a maritime security coalition with allies to counter the threat and provide protection for shippers, who as of Tuesday had diverted more than $30 billion worth of cargo away from the Red Sea.
Many tankers and cargo ships that would normally transit via the Suez Canal to the Indian Ocean are instead being rerouted around the continent of Africa, which adds 14 to 15 days on average to sea voyages. International logistics firm DHL warned that “the diversion will significantly increase transit times between Asia and Europe and require shipping lines to increase planned capacity.”
The changes have already spiked insurance premiums on ships and contributed to a bump in oil prices. And U.S. military might in the area may not be enough to quell the disruptions.
“A dedicated naval task force will be able to more effectively intercept drone and missile attacks and prevent boarding operations, but the task force won’t be able to be everywhere all at once,” Ryan Bohl,senior Middle East and North Africa analyst at Rane, told CNBC.
“So long as there are significant numbers of civilian ships moving through this area, the Houthis will have plenty of targets to choose from.”
But who are the militants attacking the ships, and why are they doing it? And will a U.S.-led naval security coalition be effective enough to make the Red Sea trade routes safe for trade again?
The Houthis are a Shiite sect of Islam called Zaydi Muslims, a minority in mostly-Sunni Yemen whose roots there go back hundreds of years. They emerged as a political and militant organization in the 1990s, opposing the Yemeni government over issues like corruption, U.S. influence and perceived mistreatment of their group.
After carrying out insurgencies against the state from the early 2000s onward, the Houthis capitalized on the instability that followed the 2011 Arab Spring to increase their following. In 2003, influenced by the Lebanese Shiite militant organization Hezbollah, they adopted the official slogan: “God is the greatest, death to America, death to Israel, a curse upon the Jews, victory to Islam.”
Supporters of the Houthi movement shout slogans as they attend a rally to mark the 4th anniversary of the Saudi-led military intervention in Yemen’s war, in Sanaa, Yemen March 26, 2019.
Khaled Abdullah | Reuters
In 2014, Houthi rebels took over the capital Sanaa, setting off a war with the Saudi and Western-backed Yemeni government. A Saudi-led Arab coalition in 2015 launched an offensive against Yemen which went on to create what the U.N. called one of the worst humanitarian crises in the world.
The war continues to this day with limited cease-fires, and the Houthis have launched hundreds of drone and projectile attacks on Saudi Arabia since it began, with many of the weapons allegedly provided by Iran.
The Houthis now control most of Yemen, including Sanaa and the important Red Sea port of Hodeida, and their ranks have massively expanded along with their military capabilities, aided significantly by Iran.
Some call the group an Iranian proxy, but many Yemen experts say it is not a direct proxy of the Islamic Republic. Rather, the two have a mutually beneficial relationship but the Houthis pursue their own interests, which often align with Iran’s, and they enjoy Tehran’s military and financial support.
Yemen’s Houthis have made clear their intention of targeting Israeli ships and any ships headed to or from Israel, in retaliation for the country’s war in Gaza that has so far killed more than 20,000 people there and triggered a humanitarian catastrophe. Israel launched its offensive on Oct. 7, after the Palestinian militant group Hamas carried out a brutal terrorist attack that killed some 1,200 people in Israel’s south and took another 240 hostage.
Mock drones and missiles are displayed at a square on December 07, 2023 in Sana’a, Yemen.
Mohammed Hamoud | Getty Images
So far, the Houthis have deployed direct-attack drones, anti-ship missiles, and even physically seized a merchant ship via helicopter landing. And they don’t plan on stopping.
Mohammed al-Bukaiti, asenior Houthi political official, said during a news conference Tuesday: “Even if America succeeds in mobilizing the entire world, our military operations will not stop unless the genocide crimes in Gaza stop and allow food, medicine, and fuel to enter its besieged population, no matter the sacrifices it costs us.”
The U.S.-led naval coalition, which is still being formed, “is collectively capable of deploying a considerable maritime force in the Red Sea,” said Sidharth Kaushal, sea power research fellow at the London-based Royal United Services Institute. Other members of themultinational initiative include the U.K., Bahrain, Canada, France, Italy, the Netherlands, Norway, and Spain.
“As we have seen with the USS Carney’s recent activity in the region, modern vessels can provide considerable protection to both themselves and other ships in a theatre against air and missile threats,” Kaushal said, referencing the American guided-missile destroyer that shot down 14 drones on Saturday.
The Galaxy Leader, recently seized by Yemen, shown in close-up satellite imagery near Hodeida, Yemen.
Maxar | Getty Images
But the challenge remains, Kaushal said, because of the “relatively low cost of the drones and missiles” targeting shipping and the fact that naval ships still have to return to friendly ports to reload their air defense interceptors.
Another major risk is the threat of escalation. The most effective way to take out the Houthi threat is to attack their launch sites — which “would not automatically result in a regional conflagration, but could raise the risks of one,” Kaushal said, adding that “I don’t think that either the Houthis and Iran or the U.S. wants a wider escalation at this point in time.”
Corey Ranslem, CEO of maritime security firm Dryad Global, expects the threat to shipping “to continue for the foreseeable future as long as the conflict continues in Gaza,” he told CNBC.
“Depending on how the U.S.-led coalition comes together, we could also see the threat level against commercial shipping decline if their efforts are effective,” he said.
Ranslem predicts minimal economic impact in the short term. But each year there are “approximately 35,000 vessel movements … primarily trading between Europe, the Middle East and Asia” in the Red Sea region, accounting for roughly 10% of global GDP, he said.
That means that if the threats continue, countries in those regions could see significant economic impacts. Israel’s economy could be seriously affected as well if more shipping companies decline to take on cargo destined there; two companies have already done just that.
“For the Houthis, the challenge will be to present enough of a threat to deter shipping companies from passing through the Bab al-Mandab while avoiding actions that could trigger an overwhelming military response from the U.S.-led coalition,” said Torbjorn Soltvedt,principal MENA analyst at Verisk Maplecroft.
“The Houthis don’t need to physically prevent ships from passing through the Red Sea; they only need to cause enough disruption to make maritime insurance premiums prohibitive or compel most shipping liners to suspend activities there.”
A FedEx plane lands at Shanghai Pudong International Airport in Shanghai on April 27, 2023.
Vcg | Visual China Group | Getty Images
FedEx shares tumbled more than 10% in premarket trading Wednesday, the morning after the package delivery giant lowered its revenue forecast as weaker demand hit sales.
The company said it expects a low-single-digit decline in revenue for the fiscal year, down from a previous forecast for flat sales year over year. Analysts had expected a revenue drop of less than 1% in the current fiscal year, according to LSEG, formerly known as Refinitiv.
It’s the second consecutive quarter FedEx has lowered its sales outlook.
The company’s Express unit, its largest, was especially challenged in the quarter with lower demand, surcharges and customers shifting to cheaper services, FedEx said.
“In the remainder of [fiscal] 2024, we expect revenue will continue to be pressured by volatile macroeconomic conditions, negatively affecting customer demand for our services across our transportation companies,” FedEx said in a filing. Its fiscal year ends May 31.
The company said, however, that operating income would improve thanks to its cost-cutting plan.
Here’s how FedEx performed versus Wall Street’s expectations:
Adjusted earnings per share: $3.99 vs. $4.18, according to analysts surveyed by LSEG
Automotive revenue: $22.17 billion vs. $22.41 billion expected
For the three-month period ending Nov. 30, FedEx reported net income of $900 million, or $3.55 a share, versus $788 million, or $3.07 a share, a year earlier. Adjusting for certain items, the company posted earnings of $1.01 billion or $3.99 per share, up more than 25% from a year earlier but below analyst forecasts.
The company credited cost-cutting initiatives for its higher profit. Revenue fell 3% to $22.17 billion from a year earlier.
“FedEx has delivered an unprecedented two consecutive quarters of operating income growth and margin expansion even with lower revenue, clear evidence of the progress we are making on our transformation as we navigate an uncertain demand environment,” FedEx CEO Raj Subramaniam said in a news release.
Tesla Model Y, equipped with FSD system. Three front facing cameras under windshield near rear view mirror.
Mark Leong | The Washington Post | Getty Images
Tesla drivers in the U.S. were involved in accidents at a higher rate than drivers of any other brand of vehicle over the past year, according to a new study of 30 automotive brands by LendingTree.
The researchers analyzed quotes from people looking to insure their own vehicles, and did not include accident or incident data involving drivers of rental cars, a spokesperson for LendingTree told CNBC by email on Tuesday.
The study said, “It’s hard to nail down why certain brands may have higher accident rates than others. However, there are indications that certain types of vehicles attract riskier drivers than others.”
With 24 accidents per 1,000 drivers during the period from mid-November 2022 to mid-November 2023, Tesla drivers clocked in with the worst accident rate in the U.S., followed by Ram drivers who were involved in about 23 accidents, and Subaru drivers who were involved in about 21 accidents per 1,000 drivers during the year.
By contrast, drivers of Pontiac, Mercury and Saturn vehicles were all involved in fewer than 10 accidents per 1,000 drivers during the period of the study.
BMW drivers were the most likely to engage in driving under the influence, the researchers found. They were involved in about 3 DUIs per 1,000 drivers in a year, about twice the rate of DUIs among Ram drivers, who were the second worst drivers in this regard.
For driving incidents overall, which included not only accidents but also DUIs, speeding, and other citations, Ram drivers had the highest incident rate, while Tesla drivers had the second-highest incident rate in the U.S.
Accidents, DUIs, speeding and other citations can all lead to higher insurance rates for drivers. Lending Tree found that one speeding ticket can bump up the price of vehicle insurance by 10% to 20%, accidents can increase rates by around 40%, while DUIs can lead to a rate increase of 60% or more.
The Lending Tree findings about drivers with the highest rates of accidents and incidents by vehicle brand followed an Autopilot software recall by Tesla in the U.S. that impacts some 2 million of the company’s electric vehicles.
Tesla EVs come standard with an advanced driver assistance system (ADAS) marketed as Autopilot. The company sells more extensive driver assistance packages called Enhanced Autopilot and Full Self-Driving (or FSD) options in the U.S. as well. Those who pay for FSD can also test software features that are not fully debugged yet on public roads.
Tesla’s ADAS technology is meant to help drivers with steering, acceleration and braking. CEO Elon Musk claimed in 2021 that a Tesla driver using Autopilot was about 10 times less likely to crash than a driver of the average car. While Tesla publishes its own safety reports, the company has not allowed third-party researchers to evaluate their data to confirm or debunk such claims.
Musk has also touted Tesla’s systems as if they are already, or will soon be, safe to use hands-free — yet Autopilot and Full Self-Driving systems still require Tesla drivers to remain attentive to the road and ready to steer or brake in response at all times.
A two-year investigation by the National Highway Traffic Safety Administration (or NHTSA) found that Tesla’s Autosteer feature, which is part of Autopilot and FSD, had safety defects that may cause an “increased risk of a collision.” NHTSA said it found that Tesla drivers can too easily misuse the cars’ Autosteer feature and may not even know whether it is engaged or switched off.
According to filings with the federal vehicle safety regulator, Tesla did not concur with NHTSA’s findings but agreed to conduct a voluntary software recall, and promised to make safety improvements to Autosteer with “over-the-air” updates. The updated software will nag drivers to pay attention to the road more often, and lock drivers out of using Autopilot if Tesla’s systems detect irresponsible use.
Tesla did not respond to a request for comment about the Lending Tree study and why the accident and incident rates may have been so high among Tesla drivers in the U.S. over the past year.
Read the full Lending Tree study of the best and worst drivers in the U.S. by auto brand, here.
After a two-year slump below its pandemic high, online shopping made a comeback this holiday season. The CNBC All-America Economic Survey finds 57% of Americans naming online shopping as their top one or two destinations for Christmas gifts.
In 2006, online shopping accounted for just 18% of responses. It hit an all-time high in 2020, at the height of the pandemic, when 55% responded it was the top destination. It scaled back to 51% last year, holding on to some but not all of its pandemic gains. But this year, hit yet another all-time high.
The survey of 1,002 Americans throughout the country was conducted Dec. 8 through 12 and has a margin of error of +/-3.1%.
The reason for the surge is unclear but a look at those spending more online this year suggests it could center around a search for bargains to combat inflation. Among those groups spending more online are women 50 and older who as a group reported more frugal holiday spending plans than average and are more concerned about inflation and the overall condition of the economy. Still, the group shops less online than younger women aged 18-49. Also spending more online this year than last are those with incomes below $30,000 and those who plan to spend only $200 on gifts, far below the $1,300 average.
“We know from the rest of the data that inflation is a major factor in why people are spending less and more,” said Micah Roberts of Public Opinion Strategies, the Republican pollster for the survey. “Everything costs more, so you’re going to have to spend more to buy it.”
While groups differ over how much they spend online, where they spend is fairly uniform: Amazon. Once again — and continuously since the question was first asked six years ago — Amazon is the No. 1 destination for online shopping and no one else is really close. Back in 2017, just 35% of the public said Amazon was their top online destination. Today, that percentage has risen to a commanding 74%, unchanged from last year but below its 2019 high.
The only other competitor, Walmart, has made some modest gains, rising to 16% from 12% last year and from just 4% in 2017. Specialty goods stores, like Etsy and local store websites, also gained from 8% to 14%.
Americans say they plan to use debt to pay for gifts this year in about the same percentages as prior, with 31% saying they will carry a balance from holiday spending, up 1 point from last year. But 10% say they will use “buy-now-pay-later” plans.
Target’s shuttered small-format store on Folsom Street in San Francisco’s SoMa neighborhood, November 2023.
Gabrielle Fonrouge
On Sept. 26, Target set off a national firestorm when it said it would close nine stores in four states because theft and organized retail crime had made them too dangerous to run.
On its face, Target’s announcement was evidence that retail crime was preventing one of the country’s most prominent retailers from operating stores profitably and safely. It challenged skeptics who believed that retailers had exaggerated the impact of organized retail crime and used it as an excuse for poor financial performance.
There was just one problem with the explanation Target gave for closing stores: The locations it shuttered generally saw fewer reported crimes than others it chose to keep open nearby, a monthslong CNBC investigation has found.
In some cases, Target chose to keep operating stores in busier areas that had better foot traffic or higher median incomes, even though the locations saw more theft and violence, the probe revealed. In those areas, police departments may be better funded due to higher tax bases, and shoppers may have more to spend on discretionary goods.
Many of the locations Target closed were “small-format” stores the company opened over the last five years as part of an experiment to expand its footprint in dense, urban areas. The moves followed Target’s decision to shutter four similar stores in the spring that it said were underperforming, Retail Dive previously reported.
At the time it announced the nine store closures in September, Target said, “We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance. We can only be successful if the working and shopping environment is safe for all.”
The news came just hours after the National Retail Federation issued a key annual retail security survey — in which it said violence at stores had increased but losses from theft hadn’t changed much — and exactly one month before the trade group was planning to lobby Congress for stiffer punishment for organized theft offenders. Target CEO Brian Cornell sits on the NRF’s board of directors and is a member of its executive committee.
One longtime retail executive and expert questioned whether Target’s claims about theft at the stores were designed to mask its struggles, as the retailer’s sales fell from the prior year in both its second and third quarters.
“I don’t want to use the word ‘stunt,’ because I don’t know exactly what went on in Minneapolis [where Target is based], but to me, it read like a stunt, looking to divert attention from the company’s lack of performance overall,” said Mark Cohen, a professor and director of retail studies at Columbia Business School who previously served as the CEO of Sears Canada, Bradlees and Lazarus department stores.
“They did not disclose their actual shortage statistics,” he added. “They talked about it in general terms; they did not disclose any other factors that would have caused them to decide to close any of those stores. They implied that the only reason they were closing the stores was because of theft. That may or may not be true. My guess is: Not true.”
In response, Target spokesperson Jim Joice told CNBC that as a growth company, Target is “continuously opening new stores, initiating remodels, investing in our team and infrastructure, and refining our operations as we seek to deliver the shopping experience that people have come to expect of Target.”
“In 2023 alone, we opened 21 new stores and remodeled 150 stores as part of our nearly $5 billion investment in strategic initiatives. The recently announced store closures related to safety, retail theft, and unsustainable business performance represent less than 0.5% of our U.S. footprint, with 1,956 stores currently operating and serving our guests,” Joice said.
Target shoppers are encouraged to call for help accessing products that are kept in locked cases.
Gabrielle Fonrouge
CNBC used public record requests and law enforcement sources to obtain crime statistics and 911 call data for 21 Target stores in New York City, Seattle, the San Francisco Bay Area, and Portland, Oregon — the four areas where the retailer closed stores. The data includes the nine stores Target shuttered and similar locations it kept open nearby, spanning from January 2021 through September 2023, when the closures were announced. The records show how many times Target was listed as the victim of a crime at the locations, or how many times police were called to the stores and arrested someone, said they addressed the issue or generated a report or log of what occurred.
The records paint a startling picture of the frequent crime at the locations. But they also show a clear trend. Nearly every store the retailer closed saw less police activity and fewer reportedcrime incidents than the locations it kept open nearby.
Only one of the nine stores that Target closed across the four regions, a location in Pittsburg, California, saw more crime and police activity than its closest comparable location, in Antioch, California, according to CNBC’s analysis.
Store-specific crime data for the nine locations Target closed has not been previously reported.
Like most data on theft, organized retail crime, and “shrink,” or retailers’ inventory loss, the records obtained by CNBC are not complete. Theft and crime overall are difficult to measure, as they frequently go unreported and undetected, experts have told CNBC.
Target declined to provide its internal crime figures. Without those numbers, the records obtained by CNBC are “the only picture that you’re going to get” about what crime looked like at the locations the retailer closed and the ones it didn’t, said Christopher Herrmann, an assistant professor at John Jay College of Criminal Justice and an expert in crime analysis and mapping.
“It’s interesting that they’re using public safety, or employee safety, as an excuse, kind of, for closing the stores,” said Herrmann. “Because the reality is, they’re not closing the stores with the highest rate of retail theft.”
In response, Target’s Joice told CNBC that “store-level incidents vary widely in severity, and police data won’t show the full extent of what our teams experience on the ground.”
“We have repeatedly shared financial data and internal data on the increase of theft-related crime,” Joice said. “We have also consistently conveyed our emphasis on safety and highlighted team members’ experiences that demonstrate the impact that theft and organized retail crime have had on our company, our guests, and the communities we serve.”
“We continue to invest heavily in safety, including strategies to prevent and stop theft and organized retail crime in our stores, as well as partnering with law enforcement, legislators, and retail peers to seek long-term solutions,” Joice said.
Target closed three stores in the San Francisco Bay Area — one in San Francisco, one in Oakland and another in Pittsburg, a suburb about 40 miles outside the city.
All the locations were within a few miles or a short drive away from another Target that remained open, which could have played a role in the company’s decision to shutter them, experts said.
Retailers often “miscalculate how much the new store will cannibalize existing stores,” said Cohen, of Columbia Business School.
Target opened its now-closed small-format store in Oakland in 2019, just two miles away from its Emeryville location. Between January 2021 and September 2023, 96 crime incidents were reported at the Oakland store compared with 440 at the Emeryville store over the same time frame.
Target’s Emeryville, California, location remains open about two miles away from a store the retailer closed in Oakland.
Gabrielle Fonrouge
The findings reflect some overall theft trends in Oakland and Emeryville in 2023. Overall theft, excluding car theft, was down 15% in Oakland from Jan. 1 to Oct. 29, compared with the same period a year ago, according to police records. In Emeryville, petty theft and grand theft were up 16% and 14%, respectively, for the period from Jan. 1 to Oct. 31, compared with the same period a year ago, police records show.
Demographics is another factor that could be at play.In the ZIP code where the Oakland store is located, the median income level is $76,953, compared with $114,286 in Emeryville, according to U.S. Census Data.
People with higher incomes tend to have more money to spend on discretionary goods.Police departments in those areas may also be more inclined to enforce property crimes such as theft if there is less violent crime to attend to, which could explain the difference in police responses between stores, experts who study crime have told CNBC.For example, one homicide and three rapes have been reported in Emeryville so far this year. In comparison, 106 homicides and 159 rapes have been reported in Oakland in the same time frame.
Looters rob a Target store during protests in Oakland, California, on May 30, 2020, over the death of George Floyd.
Josh Edelson | AFP | Getty Images
Within the city of San Francisco, the small-format store on Folsom Street that Target closed saw at least 84 crime incidents that resulted in police reports between January 2021 and September 2023.
Two miles away at Target’s sprawling Union Square location, which remains open, 486 incidents were recorded during the same time frame.
The stores’ neighborhoods and the foot traffic they saw also differentiated them.
The Target sign from its Mission Street store in San Francisco’s Union Square glows on a building across the street, November 2023.
Gabrielle Fonrouge
The closed store was sandwiched between a car dealership and a freeway in an area that locals said had light foot traffic and had attracted a homeless encampment during the Covid pandemic. In comparison, Target’s Union Square location is in the heart of San Francisco’s bustling tourist and shopping district.
Target closed three stores in the city of Portland that saw less crime than locations it kept open.
For example, the Target on Southeast Washington Street, which remains open, had 718 reported incidents between January 2021 and the end of September 2023, which is more than all three closed stores saw combined over the same time period, according to police records.
One of the locations, a small-format store on Northeast Halsey Street, was open for less than three years before it was closed.
Based on available data in Portland, CNBC’s findings echo some area crime statistics.
In the Hazelwood neighborhood, where Target’s store on Southeast Washington Street remains open, reported larcenies are up 5% in 2023 between Jan. 1 and the end of October, compared with the same period a year ago. In Hollywood and Richmond, where Target closed stores, reported larcenies were down 37% and 8%, respectively, for the same time period.
However, in downtown Portland, where Target’s store on Southwest Morrison Street was closed, reported larcenies were up 13% for that time period.
Target closed two stores in Seattle, both small-format locations that saw fewer crimes than the nearest Target stores.
For example, the shuttered Targets on Northwest Market Street and University Way Northeast had 235 and 395 reported incidents, respectively, between January 2021 and the end of September 2023. In comparison, two locations about five miles away that remain open, on Second Avenue and Northeast Northgate Way, saw 878 and 901 reported incidents, respectively, during the same time period.
In some cases, the data also matches local crime statistics. Between Jan. 1, 2021, and Oct. 31, 2023, reported larcenies were 30% lower in the area of Target’s Northwest Market Street location and 33% lower in the area of the University Way store, both of which were closed, than in the area where Target’s Northeast Northgate Way store remains open.
Target closed one store in New York City. The location was in East Harlem and housed within a larger shopping complex that borders the East River, about a 15-minute walk from the nearest subway station.
It recorded at least 844 incidents between January 2021 and the end of September 2023, but the figures pale in comparison with those during the same time period at other Target stores dotted across the Big Apple.
A store on Greenwich Street in Lower Manhattan saw 2,090 reported incidents, more than double the number in East Harlem in that time period. At another location, on Grand Street, 1,628 incidents were recorded.
The locations are vastly different. The two Lower Manhattan locations are in busier areas with more foot traffic and higher median income levels. In the ZIP code where the East Harlem store was located, the median income is $36,989, compared with more than $250,000 in the area around the Greenwich Street store and $43,362 in the area around the Grand Street location, U.S. Census data shows.
Target closed the East Harlem location — because of crime and safety, it said — at the same time it planned to open a store about a mile and a half away on West 125th Street in Harlem. Crime trends are worse in the area where the new store is opening, according to police records.
Target’s New York City store in East Harlem was housed within a larger shopping complex.
Gabrielle Fonrouge
At the time Target announced the East Harlemclosure, reported petty theft incidents were down 2.5% between Jan. 1 and Sept. 24, 2023, in the area where the East Harlem store was and up 9% during the same period in the area where the proposed store will be, compared with the same period a year ago. Target did not comment on the discrepancy.
Methodology: When analyzing 911 call logs and other crime data for this report, CNBC included in its tally only incidents that led to an arrest, police report or log, or incidents that police said they responded to and handled. Unfounded complaints, duplicate calls, requests for backup, and store and welfare checks were weeded out from the logs and not counted, along with other irrelevant information. Mental health crises, overdoses, vehicle thefts, vehicle burglaries and other events that weren’t directly related to Target or appeared to happen outside the confines of the store were also not included.
U.S. ports are receiving multimillion dollar grants to upgrade cargo handling infrastructure.
The grants are part of the Biden administration’s $21 billion commitment to modernize port infrastructure in the U.S.
Midsize port cities such as Baltimore are among the 2023 grant recipients. In November, the Port of Baltimore received a $47 million grant to kick-start an offshore wind manufacturing hub, among other improvements. For example, the funds will pay for a new berth, or dock, for rolling cargo. Baltimore is the top U.S. destination for rolling cargo imports, a category including farm machinery from John Deere and light-duty vehicles from BMW, according to the Maryland Port Administration.
More than $653 million in Port Infrastructure Development Program grants were awarded to U.S. ports in 2023 by the U.S. Department of Transportation, Maritime Administration. Other projects receiving federal funds include the Port of Tacoma Husky Terminal Expansion in Washington state ($54.2 million), and the North Harbor Transportation System Improvement Project in Long Beach, California ($52.6 million).
Baltimore isn’t the only city with a growing port according to maritime economists. Experts say gateways along the U.S. southeast coast are moving more cargo as major points of entry clog up with truck traffic.
“All of the ports on the East Coast are upgrading their infrastructure and capacity,” said Walter Kemmsies, managing partner at the Kemmsies Group, a maritime economics consulting firm currently working with the Port Authority of Georgia in Savannah. “What that does is it makes it more attractive to the ocean carriers. They like to be able to go in and out of a port very quickly, and they like to go to several ports.”
Ports America formed a public-private partnership with the state of Maryland to manage equipment and operations in sections of the Port of Baltimore. The group told CNBC that $550 million in upgrades have gone into Seagirt Marine Terminal alone for densification of the container yard since the partnership began in 2010.
These upgrades build on past plans to revive America’s declining industrial cities. In Baltimore, public officials are addressing bottlenecks along the supply chain beyond the Port. They believe that the Howard Street Tunnel expansion project will increase double-stack rail capacity out of Baltimore, which could help the companies working at the port move goods to and from points in the Midwest.
Watch the video above to see more of the upgrades coming to the Port of Baltimore.