Tag: business news

October 28, 2022

These 13 sell-rated global stocks have serious downside risk, Wall Street analysts say

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Equity analysts have slashed estimates and price targets over recent days as companies continue to report disappointing third-quarter results. CNBC Pro screened almost 1,500 large and mid-cap global stocks and found a number of major companies with sell or underweight ratings from investment banks. Thirteen of these stocks — all part of the MSCI World Index — have median analyst price targets below their current share price, according to FactSet data. Equity analysts at investment banks and research firms rate stocks as sell or underweight if they believe the shares will perform poorly over the next 12 months. There are currently five U.S.-listed stocks on the list that analysts expect to fall below current levels. AMC Entertainment The world’s largest movie theater company once again features at the top of the list. With analysts maintaining their price targets, the rally in AMC ‘s shares over the past two weeks means downside risks to its share price has risen to more than 60%, according to FactSet data. “Structural shifts might be necessary to achieve reasonable profitability, be it a material reduction in sector screen counts, reduced operating lease levels, or incremental support from the studios via improved film splits or longer exclusive theatrical windows,” analysts at Credit Suisse Equity Research said in a note to clients on Oct. 27. They expect the stock to fall to $0.95 – an 85% drop. “With little visibility as to the extent any of these might be achieved near-to-mid term, we maintain our Underperform rating.” T. Rowe Price Group The global investment management firm headquartered in Maryland had either a sell or hold rating by all 9 analysts covering the stock, according to FactSet. Despite shares in the company being down by 44% this year, the median analyst price target of $95.5 means there could be further pain ahead for investors. “While T. Rowe has historically had best-in-class performance, results more recently have deteriorated,” said analysts at J.P. Morgan, who have an underweight rating on the stock. “Furthermore, organic growth continues to weaken with recent results representing some of the slowest organic growth seen for the company.” With a price target of $93 per share, they expect the stock to drop by 14.7% by December next year. Franklin Resources The parent company of fund manager Franklin Templeton also does not have a single buy rating from any of the analysts covering the stock, according to FactSet data. Franklin , which has $1.3 trillion worth of assets under management, is expected to deliver a year-on-year decline in earnings on lower revenues when it reports third-quarter results on Nov. 1, according to Zacks Equity Research. Shares in the company, which suffers from some of the same problems troubling its competitor TROW, have fallen by nearly 30% this year. Global stocks Other stocks with price targets below current trading levels include Japanese multinational retailer AEON , U.S.-listed Clorox , and U.K. financial services company Abrdn plc. German energy giant Uniper — which the German government has agreed to nationalize — and Spanish energy utilities Naturgy Energy also made the list. The European utility sector faces major headwinds as natural gas prices remain more than four times higher than their decade-long average. Shares in Australian corporate giants Fortescue Metals and the Commonwealth Bank of Australia are also trading higher than their projected price targets. France’s Aeroports de Paris , Japanese electronics manufacturer Sharp Corporation , and U.S.-listed energy giant Consolidated Edison were some of the other stocks with the smallest price difference between current share price and median analyst price targets. Four stocks — Amerco , Isracard, Loews , and Erie Indemnity — were excluded from our filter due to a lack of analyst ratings or price targets within the past 100 days.

Equity analysts have slashed estimates and price targets over recent days as companies continue to report disappointing third-quarter results.

CNBC Pro screened almost 1,500 large and mid-cap global stocks and found a number of major companies with sell or underweight ratings from investment banks.

Thirteen of these stocks — all part of the MSCI World Index — have median analyst price targets below their current share price, according to FactSet data.

Sell-rated stocks with targets below their share price

Name	Ticker	Price target	Downside risk
AMC Entertainment	AMC-USA	2.57 USD	-61.3%
T. Rowe Price Group	TROW-USA	95.50 USD	-12.4%
AEON Co., Ltd.	8267-TKS	2400.00 JPY	-12.2%
Uniper SE	UN01-ETR	2.75 EUR	-11.1%
Franklin Resources, Inc.	BEN-USA	21.00 USD	-10.4%
Clorox Company	CLX-USA	128.00 USD	-9.5%
Commonwealth Bank of Australia	CBA-ASX	94.57 AUD	-7.7%
Naturgy Energy Group	NTGY-MCE	23.70 EUR	-6.0%
Aeroports de Paris SA	ADP-PAR	125.00 EUR	-5.8%
Fortescue Metals Group	FMG-ASX	15.14 AUD	-5.8%
Sharp Corporation	6753-TKS	850.00 JPY	-5.3%
Abrdn plc	ABDN-LON	1.50 GBP	-3.4%
Consolidated Edison, Inc.	ED-USA	83.00 USD	-3.2%

Source: CNBC, FactSet

Equity analysts at investment banks and research firms rate stocks as sell or underweight if they believe the shares will perform poorly over the next 12 months.

There are currently five U.S.-listed stocks on the list that analysts expect to fall below current levels.

AMC Entertainment

The world’s largest movie theater company once again features at the top of the list. With analysts maintaining their price targets, the rally in AMC‘s shares over the past two weeks means downside risks to its share price has risen to more than 60%, according to FactSet data.

“Structural shifts might be necessary to achieve reasonable profitability, be it a material reduction in sector screen counts, reduced operating lease levels, or incremental support from the studios via improved film splits or longer exclusive theatrical windows,” analysts at Credit Suisse Equity Research said in a note to clients on Oct. 27.

They expect the stock to fall to $0.95 – an 85% drop. “With little visibility as to the extent any of these might be achieved near-to-mid term, we maintain our Underperform rating.”

T. Rowe Price Group

The global investment management firm headquartered in Maryland had either a sell or hold rating by all 9 analysts covering the stock, according to FactSet. Despite shares in the company being down by 44% this year, the median analyst price target of $95.5 means there could be further pain ahead for investors.

“While T. Rowe has historically had best-in-class performance, results more recently have deteriorated,” said analysts at J.P. Morgan, who have an underweight rating on the stock. “Furthermore, organic growth continues to weaken with recent results representing some of the slowest organic growth seen for the company.” With a price target of $93 per share, they expect the stock to drop by 14.7% by December next year.

Franklin Resources

The parent company of fund manager Franklin Templeton also does not have a single buy rating from any of the analysts covering the stock, according to FactSet data.

Franklin, which has $1.3 trillion worth of assets under management, is expected to deliver a year-on-year decline in earnings on lower revenues when it reports third-quarter results on Nov. 1, according to Zacks Equity Research.

Shares in the company, which suffers from some of the same problems troubling its competitor TROW, have fallen by nearly 30% this year.

Global stocks

Other stocks with price targets below current trading levels include Japanese multinational retailer AEON, U.S.-listed Clorox, and U.K. financial services company Abrdn plc.

German energy giant Uniper— which the German government has agreed to nationalize — and Spanish energy utilities Naturgy Energy also made the list. The European utility sector faces major headwinds as natural gas prices remain more than four times higher than their decade-long average.

Shares in Australian corporate giants Fortescue Metals and the Commonwealth Bank of Australia are also trading higher than their projected price targets.

France’s Aeroports de Paris, Japanese electronics manufacturer Sharp Corporation, and U.S.-listed energy giant Consolidated Edison were some of the other stocks with the smallest price difference between current share price and median analyst price targets.

Four stocks — Amerco, Isracard, Loews, and Erie Indemnity — were excluded from our filter due to a lack of analyst ratings or price targets within the past 100 days.

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This Guy Fake Died On TikTok 200 Times and Landed His Dream Job

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He’s been absolutely dying for the job.

Josh Nalley, 42, a restaurant manager in Elizabethtown, Kentucky, has been playing dead on TikTok as @living_dead_josh to get a job — and he finally got his wish: to play (you guessed it) a dead body on CSI Vegas, according to The Courier-Journal.

In his TikToks, Nalley dies in creative places, like cornfields, and under a Hardee’s sign and counts how many days he’s been doing this, “until I am cast in a movie or TV show as an un-alive body,” he writes on his videos. (“Un-alive” is a common TikTok slang word for being dead.)

@living_dead_josh #fyp #foryoupage ♬ It’s Corn – Tariq & The Gregory Brothers & Recess Therapy

The New York Times reported that Nalley got outreach from CBS around day 200. He also told the outlet he decided to do this video series due to “boredom.”

“I was spending a lot of time on TikTok and trying to figure out what I could do to get on TikTok and maybe get in a movie with as little effort as I thought would be possible,” Nalley told the Times.

On day 321, he announced he had been cast by CBS in CSI: Vegas. Nalley told the outlet that CBS emailed him saying they saw him on TikTok and wanted to give him a role. He will be in an episode that will air on Thursday, November 3.

@living_dead_josh Tune in to the Season 2 premiere September 29th @csicbs #csivegas #cbs #dreamcometrue #goals #fyp #foryoupage ♬ Who Are You – The Who

“I thought if I was creative enough playing an un-alive person, I could get the attention of a television show or a movie production company, and how about that, it worked,” he told the outlet.

Nalley said he has no acting experience but has now also been contacted by people wanting him to be in music videos or in smaller-budget movies.

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Gabrielle Bienasz

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https://www.youtube.com/watch?v=wq-kmFCrF5Q

Report: Deepfakes Are on the Rise and Stopping Them Will Be Tough

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Deepfakes have become several things — vehicles of misinformation, jokes, an underappreciated art form — but there’s one thing that could make them very attractive to marketers: It’s probably cheaper than hiring a celebrity for your video.

Edward Webb I Wikimedia Commons

This is why, according to the Wall Street Journal, they are becoming more common, harder to spot, and the outlet reports, tough to litigate.

And there might not be anything anyone can do about it.

There isn’t a crystal-clear avenue for someone who’s looking to initiate legal action against a person who’s using a deepfake of their likeness — and in the age of social media, a video might be too widespread to tame, anyway, the outlet reported.

What is a deepfake?

Deepfakes are videos where a face has been digitally manipulated to look like another person’s face. The term was actually created by a Reddit user, whose username was also deepfake, to describe digital face-switching in pornography, according to MIT.

They’re also tough to spot. One expert told the WSJ that deepfakes could make scouting misinformation even more difficult.

“We’re having a hard enough time with fake information. Now we have deepfakes, which look ever more convincing,” Ari Lightman a professor of digital media at Carnegie Mellon told the outlet.

What was the deepfake of Elon Musk?

Last Wednesday, real estate tech startup reAlpha — the same one that posted a deepfake video of Musk in a bathtub — posted another faux Musk.

In this one, he’s being held hostage in a warehouse. The video explains reAlpha’s business model with a few jokes about Musk, such as that the company should have properties on Mars.

It doesn’t quite look like Musk, and the bottom of the video says “This is NOT actually Elon Musk. But we wouldn’t be mad if fake Elon can get Real Elon’s Attention.”

Why are deepfakes becoming more popular?

Deepcake, digital media deepfake company, which is involved in a controversy over whether or not it had the right to make a deepfake of Bruce Willis, told the WSJ that the practice is cost-efficient.

“In six months, we made 10 completely different creatives and concepts with digital Bruce Willis working with different directors,” a Deepcake told WSJ. “It is difficult to imagine such a production with a real actor.”

What celebrities have been deepfaked?

Deepfakes are also used for jokes and memes. One TikToker, Jesse Richards, has made an online career of creating funny videos with convincing deepfakes of videos of people from Millie Bobby Brown to Zac Efron.

@iamjesserichards Replying to @valeriiaaa.24__ you asked #strangerthings #milliebobbybrown ♬ original sound – IAmJesseRichards

Last spring, a deepfake went viral for its uber-realistic portrayal of Tom Cruise.

However, that video points out an important limitation of the technology. The video’s creator, Chris Ume told Vice post-production alone took him 24 hours. His spokesperson also noted the work because of the Cruise imitator he used to film the content.

“Even after all that work, you can still see a few glitches,” Ume told the outlet.

As for the less-realistic Musk deepfake, Christie Currie chief marketing officer of reAlpha, told the Journal they worked to make it clear the video was a parody or joke. (Satire is protected free speech.)

One expert told WSJ celebrities can (and have, such as Woody Allen nabbing a settlement in 2009 over an American Apparel commercial) sue under the “Right of Publicity” laws.

This means people have a right to own their own images, per a federal law related to unfair competition, which also grants the “right to protection against false endorsement, association, or affiliation.”

Still, only a few states have passed laws related specifically to deepfake videos — California, Texas, and Virginia.

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Gabrielle Bienasz

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Bitcoin miner Core Scientific issues bankruptcy warning and the stock is down 97% for the year

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An array of bitcoin mining units inside a container at a Cleanspark facility in College Park, Georgia, U.S., on Friday, April 22, 2022.

Elijah Nouvelage | Bloomberg | Getty Images

Core Scientific, one of the largest publicly traded crypto mining companies in the U.S., raised the possibility of bankruptcy in a statement filed with the Securities and Exchange Commission. The company also disclosed that it will not make its debt payments coming due in late Oct. and early Nov.

Core’s stock was down as much as 77% on Thursday following the filing.

Since listing on the Nasdaq through a special purpose acquisition company, or SPAC, Core’s market capitalization has fallen to $90 million, down from a $4.3 billion valuation in July 2021 when the company went public. The stock is now down more than 97% this year. In the event of a bankruptcy, Core says that holders of its common stock could suffer “a total loss of their investment.”

Core Scientific mines for proof-of-work cryptocurrencies like bitcoin. The process involves powering data centers across the country, packed with highly specialized computers that crunch math equations in order to validate transactions and simultaneously create new tokens. The process requires expensive equipment, some technical know-how, and a lot of electricity.

Core, which primarily mints bitcoin, has seen the price of the token drop from an all-time high above $69,000 in Nov. 2021, to around $20,500. That 70% loss in value, paired with greater competition among miners — and increased energy prices — have compressed its profit margins.

The crypto miner said its “operating performance and liquidity have been severely impacted by the prolonged decrease in the price of bitcoin, the increase in electricity costs,” as well as “the increase in the global bitcoin network hash rate” — a term used to describe the computing power of all miners in the bitcoin network.

The filing also blamed “litigation with Celsius Networks LLC and its affiliates” for Core’s financial struggles. Celsius was once one of the biggest names in the crypto lending space, offering annual returns of nearly 19%, until it filed for bankruptcy this spring.

Despite selling nearly all its bitcoin in June, the company is down to $26.6 million in cash. Though Core self-mines bitcoin to re-stock its own coffers ($770,000 worth of bitcoin on Wednesday), the company still warns it could run out altogether by the end of the year, if not before.

The Austin, Texas-based miner, which has operations in North Dakota, North Carolina, Georgia, and Kentucky, says that it may “seek alternative sources of equity or debt financing.” The company is also considering asset sales, as well as delaying larger capital expenditures, including construction projects.

As for its creditors, Core wrote in the filing that they were free to sue the company for nonpayment, take action with respect to collateral, as well as “electing to accelerate the principal amount of such debt.”

Analysts believe Chapter 11 bankruptcy is a real possibility.

“With the substantial decline in mining rig prices in 2022, we believe there’s a significant chance the creditors holding this debt decide to restructure instead of taking possession of the collateral,” wrote analysts from Compass Point. “Still, without knowing how discussions are going with CORZ’s creditors, we think a scenario where CORZ has to file for Chapter 11 protection has to be taken seriously, especially if BTC prices decline further from current levels.”

Core — which is one of the largest providers of blockchain infrastructure and hosting, as well as one of the largest digital asset miners, in North America — isn’t alone in its struggles. Compute North, which provides hosting services and infrastructure for crypto mining, filed for Chapter 11 bankruptcy in Sept., and at least one other miner, Marathon Digital Holdings, reported an $80 million exposure to the bankrupt mining firm.

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5 cheap industrial stocks with upside as investors look outside tech for the next leaders

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NLRB Says Amazon CEO Andy Jassy Broke Labor Laws

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The National Labor Relations Board — which runs unionization recognition and elections in the U.S. — filed a complaint on Wednesday about comments made by Amazon CEO Andy Jassy, The Washington Post reported.

Bloomberg I Getty Images

Andy Jassy in 2021 in Seattle.

In the complaint, the NLRB alleged that Jassy violated labor laws by making comments about unions in press interviews in April and June.

Those interviews took place after the company’s Staten Island warehouse unionized in April, the first Amazon warehouse to do so. Amazon has pushed back against unionization efforts. It lost a bid to overturn the April union election in September.

The NLRB has already tussled with Amazon over its unionization-related practices. This complaint specifically discusses Jassy’s mid-April interview with CNBC’s Squawk Box and one he gave on Bloomberg Television in the summer.

In the CNBC one, he said, “At a place like Amazon that empowers employees… they can go meet in a room, decide how [to] change it and change it. That type of empowerment doesn’t happen when you have unions. It’s much more bureaucratic, it’s much slower. I also think people are better off having direct connections with their managers.”

Jassy made relatively similar statements in the Bloomberg interview, saying “we happen to think they’re better off without a union.”

Per labor laws, employers must follow the TIPS rule: They cannot threaten, interrogate, promise or surveil as it relates to unionization. However, employers do retain the right to express opinions about a union.

According to Bloomberg, a representative of NLRB in Seattle said Jassy was “interfering with, restraining and coercing employees” in the text of the complaint.

The complaint requests the company respond by November 8 or opt to appear in front of an administrative law judge. Amazon told Bloomberg the complaint is “completely without merit.”

An attorney for the Amazon Labor Union praised the decision and told the Post that the company was being “held accountable.”

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Gabrielle Bienasz

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Trump opposes watchdog for financial statements sought by New York Attorney General James in sweeping fraud lawsuit

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Former U.S. President Donald Trump throws caps as he attends a rally in Warren, Michigan, U.S., October 1, 2022.

Dieu-nalio Chery | Reutersm

Former President Donald Trump and related defendants are opposing New York Attorney General Letitia James’ call for an independent monitor to oversee the Trump Organization’s submission of financial statements to third parties as part of a bombshell fraud lawsuit, according to a new court filing.

James has asked a judge to name a watchdog who would review financial information that the company and defendants give lenders, insurers and accountants pending the outcome of the lawsuit.

The attorney general’s office requested the watchdog as part of a sweeping September lawsuit accusing Trump, three of his adult children, their company and others of a decadelong fraud related to financial statements.

In their court filing Wednesday, Trump’s lawyers said James’ request for an outside monitor for the company is “a politically motivated attempt to nationalize a highly successful private enterprise.” The lawyers argued that it “is precluded under our Constitution and must and should therefore be rejected.”

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James’ suit in Manhattan Supreme Court accuses the former president and the Trump Organization of repeatedly misstating the value of various real estate assets and his net worth on financial statements that were used to obtain loans, insurance policies and tax benefits.

She claims Trump overstated his net worth by billions of dollars, and has asked federal prosecutors in Manhattan and the IRS to investigate him for possible federal crimes. James said evidence obtained during her three-year civil probe of Trump indicated possible crimes of bank fraud and making false statements to financial institutions.

James’ suit seeks about $250 million in penalties.

The Trump defense filing Wednesday flatly rejects her allegations of fraud.

“Even the excerpted and selected transcripts and documents fail to show the Trump Parties have ever even been late on so much as one loan payment over the past decade much less engaged in any actual fraud,” the filing said.

Trump’s lawyers accuse the attorney general of manufacturing “a bill of grievances based on nothing more than a misapplication of standard accounting principles and gross exaggeration of routine valuation differences between counter parties to complex commercial lending transactions,” according to the filing.

The filing said the monitor she requests would possess “staggeringly overbroad” powers because the person would have access to “all of the Trump Parties’ financial records, compelling the Trump Parties to make onerous informational disclosures to the monitor, and grant the monitor operational oversight over the financial affairs of private businesses.”

James’ request “would effectively allow the NYAG to nationalize the Trump business empire,” the lawyers claimed.

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The biggest tech stocks have lost $3 trillion in market cap the last one year

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FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

So here’s a good trivia question: Of the “FAANG” megacap tech stocks, which has lost the most market value over the past year?

Amid the earnings-related bloodbath so far this week, there have been huge losses. Alphabet, Microsoft and Meta have already posted their results, and tumbled in the wake of the reports. Thursday afternoon, Amazon and Apple are on tap.

A staggering $3 trillion in combined market cap has been lost in one year. Most of the losses have occurred across six of these stocks, but it’s hard to leave Apple off the list.

Remarkably, Apple shares have basically been flat – losing a measly $35 billion, by comparison.

It’s also worth realizing that the total losses would have been much worse had Netflix shares not rebounded.

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In pre-releasing some results last month, Ford attributed the lower-than-expected earnings to parts shortages affecting 40,000 to 50,000 vehicles as well as an extra $1 billion in unexpected supplier costs during the quarter.

Ford reveals third-quarter net loss, weighed down by supply chain problems and Argo A.I. investment

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2023 Ford F-150 Raptor R

Ford

DETROIT – Ford Motor recorded a net loss of $827 million during the third quarter, weighed down by supply chain problems and costs related to disbanding its autonomous vehicle unit Argo AI.

Still, the automaker was able to narrowly beat Wall Street’s subdued expectations for the period and guided to the lowest end of its previously forecast earnings for the year.

Shares of the company were down roughly 1.5% in extended trading following the report.

Here’s how Ford performed during the third quarter, compared with analysts estimates as compiled by Refinitiv:

Adjusted earnings per share: 30 cents vs. 27 cents estimated
Automotive revenue: $37.2 billion vs. $36.25 billion estimated

The auto industry’s earnings and forecasts are being closely watched by investors for any signs that consumer demand could be weakening amid rising interest rates and looming recession fears. However, both Ford and crosstown rival General Motors continue to say demand for their products remains strong despite outside economic concerns and rising interest rates.

Ford reported adjusted earnings of $1.8 billion for the quarter, down 40% from a year earlier but slightly above its own previously announced expectations, set last month.

Ford in September partially pre-released its results, including projected adjusted earnings before interest and taxes in the range of $1.4 billion to $1.7 billion — some analysts had been expecting a quarterly profit closer to $3 billion — but affirmed full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.

On Wednesday Ford updated its guidance to forecast full-year adjusted earnings before interest and taxes of about $11.5 billion. It raised its full-year adjusted free cash flow forecast, however, to between $9.5 billion and $10 billion – up from $5.5 billion to $6.5 billion – on strength in the company’s automotive operations.

Argo A.I.

Ford recorded a $2.7 billion non-cash, pretax charge on its investment in Argo AI, which the company initially invested in starting in 2017. It later split its ownership of Argo AI with German automaker Volkswagen in 2019.

Ford CFO John Lawler said the company is winding down the operations to focus on advanced driver-assist systems such as its BlueCruise hands-free highway driving system and other operations that aren’t considered “fully autonomous.”

“It’s become very clear that profitable, fully autonomous vehicles at scale are still a long way off,” he told reporters. “We’ve also concluded that we don’t necessarily have to create that technology ourselves.”

Some of the roughly 2,000 employees for Argo AI are expected to be offered positions at Ford or Volkswagen, officials said. Volkswagen said in a statement that it will no longer invest in Argo AI.

Ford’s Q3

Lawler on Wednesday said the company still expects to finish those vehicles and have them shipped to dealers by the end of the year.

The vehicles, largely high-margin pickups and SUVs, dragged down Ford’s North American profits. The company’s adjusted profit margin for the region was just 5%, down from 10.1% a year earlier.

Ford’s North American operations recorded adjusted earnings of $1.3 billion during the third quarter, down 46% from a year earlier. The automaker recorded earnings gains in Europe and South America, while its operations in China lost $193 million.

Ford’s overall revenue during the quarter, which includes its financial arm, was $39.4 billion, a 10% increase from a year earlier. Through the third quarter, the company’s year-to-date revenue was $114.1 billion, a 16% increase compared to that same time period in 2022.

Ford’s earnings come a day after crosstown rival General Motors significantly outperformed Wall Street’s earnings expectations but slightly missed on revenue. GM’s adjusted profit margin for the quarter narrowed to 10.2% compared with 10.7% during the third quarter of 2021, including 10% in North America.

– CNBC’s John Rosevear contributed to this report.

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Oil giant Shell reveals plans to hike dividend as it reports third-quarter profit

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The logo of Shell on an oil storage silo, beyond railway tanker wagons at the company’s Pernis refinery in Rotterdam, Netherlands, on Sunday, Oct. 23, 2022.

Bloomberg | Bloomberg | Getty Images

British oil major Shell reported a third-quarter profit Thursday, but lower refining and trading revenues brought an end to its run of record quarterly earnings.

Shell posted adjusted earnings of $9.45 billion for the three months through to the end of September, meeting analyst expectations of $9.5 billion according to Refinitiv. The company posted adjusted earnings of $4.1 billion over the same period a year earlier and notched a whopping $11.5 billion for the second quarter of 2022.

The oil giant said it planned to increase its dividend per share by around 15% for the fourth quarter 2022, to be paid out in March 2023. It also announced a new share buyback program, which is set to result in an additional $4 billion of distributions and expected to be completed by its next earnings release.

Shares of Shell are up over 41% year-to-date.

The London-headquartered oil major reported consecutive quarters of record profits through the first six months of the year, benefitting from surging commodity prices following Russia’s invasion of Ukraine.

Shell warned in an update earlier this month, however, that lower refining and chemicals margins and weaker gas trading were likely to negatively impact third-quarter earnings.

On Thursday, the company said a recovery in global product supply had contributed to lower refining margins in the third quarter, and gas trading earnings had also fallen.

“The trading and optimisation contributions were mainly impacted by a combination of seasonality and supply constraints, coupled with substantial differences between paper and physical realisations in a volatile and dislocated market,” Shell said in a its earnings release.

Change in leadership

The group’s results come soon after it was announced CEO Ben van Beurden will step down at the end of the year after nearly a decade at the helm.

Wael Sawan, currently Shell’s director of integrated gas, renewables and energy solutions, will become its next chief executive on Jan. 1.

A dual Lebanese-Canadian national, Sawan has held roles in downstream retail and various commercial projects during his 25-year career at Shell.

“I’m looking forward to channelling the pioneering spirit and passion of our incredible people to rise to the immense challenges, and grasp the opportunities presented by the energy transition,” Sawan said in a statement on Sept. 15, adding that it was an honor to follow van Beurden’s leadership.

“We will be disciplined and value focused, as we work with our customers and partners to deliver the reliable, affordable and cleaner energy the world needs.”

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Traders have made peace with the three-quarter point hike next week. But they now see just a 36% chance for another such move at December’s Federal Open Market Committee meeting, after earlier rating it a near 80% probability, according to CME Group data.

Powell again is facing political pressure as worries mount over the economy

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Jerome Powell, chairman of the US Federal Reserve, speaks during a Fed Listens event in Washington, D.C., US, on Friday, Sept. 23, 2022.

Al Drago | Bloomberg | Getty Images

Political questioning of Federal Reserve Chair Jerome Powell about the central bank’s policy moves is intensifying, this time from the other side of the aisle.

No stranger to political pressure, the Fed chief this week found himself the focus of concern in a letter from Sen. Sherrod Brown. The Ohio Democrat warned in the letter about potential job losses from the Fed’s rate hikes that it is using to combat inflation.

“It is your job to combat inflation, but at the same time you must not lose sight of your responsibility to ensure that we have full employment,” Brown wrote. He added that “potential job losses brought about by monetary over-tightening will only worsen these matters for the working class.”

The letter comes with the Fed less than a week away from its two-day policy meeting that is widely expected to conclude Nov. 2 with a fourth consecutive 0.75 percentage point interest rate increase. That would take the central bank’s benchmark funds rate to a range of 3.75% to 4%, its highest level since early 2008 and represents the fastest pace of policy tightening since the early 1980s.

Without recommending a specific course of action, Brown asked Powell to remember the Fed has a two-pronged mandate — low inflation as well as full employment — and requested that “the decisions you make at the next FOMC meeting reflect your commitment to the dual mandate.”

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The last time the Fed raised interest rates, from 2016 to December 2018, Powell faced withering criticism from former President Donald Trump, who on one occasion called the central bankers “boneheads” and seemed to compare Powell unfavorably with Chinese President Xi Jinping when he asked in a tweet, “Who is our bigger enemy?”

Democrats, including then-presidential hopeful Joe Biden, criticized Trump for his Fed comments, insisting the central bank be free of political pressure when formulating monetary policy.

Standing firm

Brown’s stance was considerably more nuanced than Trump’s — though equally unlikely to move the dial on monetary policy.

“Chair Powell has made it pretty clear that the necessary conditions for the Fed to achieve its full employment objective is low and stable inflation. Without low and stable inflation, there’s no way to achieve full employment,” said Mark Zandi, chief economist for Moody’s Analytics. “He’ll stick to his guns on this. I don’t see this as having any material impact on decision making at the Fed.”

To be sure, while it’s most likely a reaction to a changing tone from some Fed officials and a slight shift in the economic data, market expectations for monetary policy have altered a bit.

That change in sentiment has come following cautionary remarks about overly aggressive policies from several Fed officials, including Vice Chairman Lael Brainard and San Francisco regional President Mary Daly. In remarks late last week, Daly said she’s looking for a “step-down” point where the Fed can slow the pace of its rate moves.

“The democratization of the Fed is the issue for the market, how much power the other members have versus the chairman. It’s difficult to know,” said Quincy Krosby, chief equity strategist at LPL Financial. Regarding Brown’s letter, Krosby said, “I don’t think it’s going to affect him. … It’s not the pressure coming from the politicians, which is to be expected.”

A Fed spokesman acknowledged that Powell received the Brown letter and said normal policy is to respond to such communication directly. In the past, Powell has been generally dismissive when asked if political pressure can factor into decision making.

Employment data will be key

Along with the nudging from Brown, Powell also has faced criticism from others on Capitol Hill.

Sen. Elizabeth Warren, the ultra-progressive Massachusetts Democrat and former presidential contender, has called Powell dangerous and recently also warned about the impact rate hikes could have on employment. Also, Sen. Joe Manchin, D-W. Va., last year criticized Powell for what was seen as the Fed’s flat-footed response to the early rise of inflation.

“I don’t necessarily think that Powell will buckle to the political pressure, but I’m wondering whether some of his colleagues start to, some of the doves who have become hawkish,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Employment’s fine now, but as months go on and growth continues to slow and layoffs begin to increase at a more notable pace, I have to believe that the level of pressure is going to grow.”

Payroll gains have been strong all years, but a number of companies have said they are either putting a freeze on hiring or cutting back as economic conditions soften. A slowing economy and stubbornly high inflation is making the backdrop difficult for the November elections, where Democrats are expected to lose control of the House and possibly the Senate.

With the high stakes in mind, both markets and lawmakers will be listening closely to Powell’s post-meeting news conference next Wednesday, which will come six days before the election.

“He knows the pressure. He knows that the politicians are increasingly nervous about losing their seats,” Krosby said. “There’s very little he could do at this point, by the way, to help either party.”

Jim Cramer says consumers are undeterred by higher prices in the reopening economy

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Metaverse-obsessed Mark Zuckerberg refuses to cut costs. It’s no wonder the stock tanked

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Meta Platforms' build-the-metaverse-or-die-trying approach to spending is incredibly frustrating.

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Kanye West Was Just Escorted Out of Skechers’ LA Office

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Embattled musician Kanye West showed up uninvited and unannounced at Skechers corporate offices in LA earlier today.

According to a company statement, he was also “engaged in unauthorized filming.”

After a brief conversation, two Skechers executives escorted Ye, his new legal name, and his party out of the building.

“Skechers is not considering and has no intention of working with West,” the company said. “We condemn his recent divisive remarks and do not tolerate antisemitism or any other form of hate speech.”

At press time, Ye had no comment about what he was doing at Skechers with a film crew.

The fallout continues

Skechers is just one of a growing list of companies and personalities that have distanced themselves from Ye and denounced his anti-semitic comments.

Earlier today, Peloton announced that it will no longer include the artist’s music in any of its new classes.

In a statement, the fitness company said:

“Thank you for sharing your concerns. We take this issue very seriously and can confirm Peloton indefinitely paused the use of Kanye West’s music on our platform. This means our instructors are no longer using his music in any newly produced classes, and we are not suggesting any class that includes his music in our proactive recommendations to Members.”

On Monday, popular Peloton instructor Alex Toussaint told riders that he will no longer play Kanye West’s music in his classes.

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Jonathan Small

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The Viral Negroni Sbagliato Drink Is a Boon for Prosecco, Campari Sales

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When Louie Catizone’s wife showed him the viral TikTok, he didn’t think much of it.

@hbomax I’ll take one of each. #houseofthedragon ♬ a negroni sbagliato w prosecco l hbo max – hbomax

In the viral post, Emma D’Arcy — who plays Princess Rhaenyra Targaryen in HBO’s House of Dragons — said their “drink of choice” was a Negroni Sbagliato, a variation on the traditional drink that swaps the cocktail’s traditional gin for Prosecco.

Catizone, who owns Brooklyn-based distillery, St. Agrestis, makes a bitter that’s used in Negronis as well as pre-made Negroni drinks.

After the video was posted, Catizone’s personal cell number — which is listed on Google Maps for his business — began to ring with inquiries about the Negroni Sbagliato. His retail clients asked for cases. They received “dozens” of messages on Instagram, doubling the usual rate.

So, Catizone took advantage: On Thursday, St. Agrestis released a limited edition, pre-made Negroni Sbagliato in eight-pack form. The drink received orders in the “hundreds” — the most the website has ever received in a single day, he said. This week, Catizone and St. Agrestis will be making a 2,000-liter run of the Negroni Sbagliato for their pre-made product – likely the largest one ever, he estimates.

According to data provided by Drizly, an alcohol delivery service, orders of Prosecco and Campari jumped more than 40 percent the weekend following the TikTok.

But the popularity of the drink has not stopped there.

Julka Villa, CMO of Italy-based Campari Group, which owns the widely-known eponymous bitter for the Negroni and Negroni Sbagliato (as well as brands like SKYY Vodka) told Entrepreneur that they have seen “massive” search increases since the TikTok was posted.

“Never was a person more straightforward, clear, and inviting. That is the power of virality,” Villa added.

What is a Negroni Sbagliato?

A traditional Negroni has three ingredients in equal parts: gin, a bitter, (most often the Italian Campari), and sweet vermouth.

The lighter Prosecco, adds a “zippy” note, Catizone said, along with the “earthy, herbaceous, note from the vermouth, and the bracingly bitter red aperitif.”

The Washington Post I Getty Images

Why did the Negroni Sbagliato go viral?

HBO debuted House of Dragons in late August. In an interview clip posted on October 1, D’Arcy and Olivia Cooke (who plays Queen Alicent Hightower in the show) answered questions from cards, including “What’s your drink of choice?” Emma D’Arcy said, “A Negroni… Sbagliato… with Prosecco in it.”

Cooke replies, in a Northern English accent, “Oh, stunnin’.”

“It’s incredible how effective it was, that video,” Villa said. “I think Emma D’Arcy interpreted the nature of this cocktail in a way that couldn’t have been possible if [they were] briefed.”

The actor demonstrated the intrigue, and relaxed nature they try to convey with Campari/negroni brand, in “just six words,” Villa added.

D’Arcy, meanwhile, has said since they are “so embarrassed” it became a meme.

The video first gained traction in LGBTQ TikTok (D’Arcy is nonbinary) and joking videos emerged that the drink was becoming popular at lesbian bars. Part-time bartender Sib Irizarry, who also works in fashion, saw interest in the drink pick up pretty much right away at South Beach Bar and Grill in East Orange, NJ.

@raynemcgowan negroni spagliatowith prosecco in it #wlwtiktok #lesbiansoftiktok #emmadarcy #cubbyholenyc ♬ original sound – Rayne McGowan

“We don’t even sell Negronis,” they said.

But now they do. The bar had to order cases of Campari and Prosecco. Irizarry said they made probably three times more Negroni’s and variants so far in October than all of September.

Other bars are feeling the spritz, too.

Hank Tolley, a full-time bartender at Midnights, a bar in Brooklyn, New York, told Entrepreneur that he had made “hardly any” Negronis or variants in September. Now, he makes six to ten a week, and he said it hasn’t slowed down.

It works for him because he likes to see people try other cocktails.

“I’ve seen people kind of groan about it like it’s a bad thing, but the Spagliato is a classic, delicious drink, Tolley said. “It’s almost easier to make than a negroni,” because it requires a little less stirring, he added.

Even brands like Four Loko have taken part:

Sbagliato is actually Italian for Loko

— Four Loko (@fourloko) October 24, 2022

Villa said Campari sales have been growing for the last few years, and that the company has been doubling down on U.S. marketing since 2013 with its Negroni Week event. The week grew from about a hundred bars to into the thousands this past year.

The TikTok was “sort of cherry on the cake,” Villa said.

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Gabrielle Bienasz

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Elon Musk ‘Chief Twit’ Visits Twitter HQ Ahead of Deal Deadline

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Elon Musk delivered innuendo about his Twitter deal — on Twitter — Wednesday afternoon, ahead of the October 28 deadline to acquire the company after he had tried to back out of the deal.

He Tweeted a video of him entering what he said was Twitter’s San Francisco campus. “Entering Twitter HQ – let that sink in!” he wrote.

Entering Twitter HQ – let that sink in! pic.twitter.com/D68z4K2wq7

— Elon Musk (@elonmusk) October 26, 2022

Neither Musk nor Twitter had said if the deal is closed yet.

Twitter confirmed that Musk’s video tweet was real to the AP, but didn’t comment.

At some point, he also changed his bio to “Chief Twit.”

Musk’s dealings with Twitter have spiraled into an epic public drama over the past several months. He bought up shares of the social media company, joined then un-joined its board, moved to acquire it in April, attempted to back out of the acquisition in July, and then faced a lawsuit from Twitter compelling him to complete it.

In early October, Musk publicly stated he will move forward with the acquisition at its original price, about $44 billion. He said on a Q3 Tesla earnings call that he is “obviously overpaying” for the company.

Twitter’s lawyers actually did not respond well to this comment, saying it was an “invitation to further mischief and delay.”

Judge Kathaleen St. Jude McCormick of the Delaware Chancery Court gave Musk until October 28 to close the deal, at which point the billionaire is supposed to have re-pulled-together the billions needed to finance the acquisition. However, various outlets have noted that this is coming together in a much different economic environment than when the original buy was planned in April.

Bloomberg reported Tuesday that Musk had told bankers he planned to close the deal and that the plans to move the money were in motion, per “people with knowledge of the matter.”

Musk has discussed what could be in store for the platform, from railing against content moderation to laying off 75% of its staff to creating an everything app.

Buying Twitter is an accelerant to creating X, the everything app

— Elon Musk (@elonmusk) October 4, 2022

Twitter did not immediately respond to a request for comment.

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Gabrielle Bienasz

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Homebuyers are making the biggest down payments in these 5 metros. Here’s how much you actually need for a house

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nd3000 | iStock | Getty Images

Despite signs of a cooling housing market, home prices are still relatively high, resulting in bigger down payments.

Over the past year, average down payments in the country’s 50 biggest metros have grown by more than 35%, according to a LendingTree report, based on 30-year fixed-rate mortgage data from Jan. 1 through Oct. 10, 2022.

While high home prices and interest rates may push some buyers to the sidelines, those still in the market may have “deeper resources,” particularly if they’re downsizing, explained Keith Gumbinger, vice president of mortgage website HSH.

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Here are the top five metros with the largest down payments.

5 metros with the biggest down payments

In 2022, these five metros have had the highest down payments based on LendingTree mortgage data from from Jan. 1 through Oct. 10, 2022.

San Jose, California: $142,006
San Francisco, California: $131,631
Los Angeles, California: $104,749
San Diego, California: $98,593
Seattle, Washington: $96,056

With higher average mortgages and annual household incomes, it’s not surprising these metros topped the list. And these down payments represent a large share of yearly earnings.

How a bigger down payment lowers mortgage costs

“In general, the more you can afford to put down, the lower your ultimate costs are going to be,” said Gumbinger.

A larger down payment means a smaller mortgage, which can “certainly help offset the cost of rising interest rates to a degree,” he said.

While certain kinds of mortgages allow down payments as low as 3%, you’ll have to pay mortgage insurance on loans with less than 20% down, and you may see higher interest rates, Gumbinger said.

The average interest rate for 30-year fixed-rate mortgages of $647,200 or less is still above 7% for loans with a 20% down payment.

“More is generally better because that helps to lower your costs overall,” he added.

In 2021, the median down payment was 13%, with nearly 4 in 10 using proceeds from a previous home sale, according to a 2022 report from the National Association of Realtors.

With high prices, many buyers struggle to put down 20%

Despite softening demand, home prices are still “significantly higher than two years ago,” with many buyers struggling to put 10% or 20% down, said Melissa Cohn, regional vice president at William Raveis Mortgage.

The median home sales price was $454,900 during the third quarter of 2022, compared to $337,500 during the third quarter of 2020, according to Federal Reserve data.

Many buyers take advantage of lower down payment options, she said, such as 3% or 5% for conventional mortgages or 3.5% for Federal Housing Administration loans.

“With a smaller down payment, it’s more expensive every which way,” Cohn said. “But for many people, it’s the only way they can afford to get into their home.”

While smaller down payments mean higher interest rates and mortgage insurance, home buyers may reduce these expenses in the future, she said. When interest rates drop, there may be a chance to refinance, and buyers may remove mortgage insurance once they reach 20% equity in the home, Cohn said.

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Apple’s new App Store rules over ‘boosted ads’ provoke Facebook again

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Meta Platforms CEO Mark Zuckerberg speaks at Georgetown University in Washington on Oct. 17, 2019.

Andrew Caballero-Reynolds | AFP | Getty Images

Apple recently updated its App Store guidelines with changes that, yet again, impact Facebook’s ad business.

The new rule, introduced Monday, says that companies like Meta, which owns Facebook and Instagram, can offer apps that allow people to buy and manage advertising campaigns in dedicated apps without using Apple’s payment system, but it considers buying an ad in a social media app to be a digital purchase, from which Apple takes a 30% cut.

Meta wasn’t happy with the change. A Meta spokesperson told CNBC, “Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy.”

The episode is the latest skirmish from companies like Meta that feel that Apple has too much power over mobile distribution and the ever expanding and changing rules of Apple’s App Store, which is the only way to install apps on an iPhone.

Meta and Apple have been battling for years, but the rivalry has grown more heated recently after Apple introduced App Tracking Transparency in the iPhone operating system last year. The privacy feature allows users to decline to offer app developers like Meta a unique device ID that can be used to track ad performance. Meta says the change could cost it $10 billion this year.

Meta and Apple also appear poised to compete in the world of consumer hardware, after Meta released the Quest Pro headset and Apple has been developing a competing VR headset for years that could reportedly launch next year.

Apple told CNBC that even before the new guideline the company considered social boosts to be the kind of digital purchase that needed to use Apple in-app purchases, and that the rule is more of a clarification than a new restriction.

“For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use In-App Purchase,” an Apple spokesman told CNBC. “Boosting, which allows an individual or organization to pay to increase the reach of a post or profile, is a digital service — so of course In-App Purchase is required. This has always been the case and there are many examples of apps that do it successfully.”

This individual restriction has long been a sticking point, and Meta, back when it was still named Facebook, negotiated with Apple over social media boosts and whether they would fall under Apple’s digital purchase rules, according to The Wall Street Journal.

Boosting features are offered by several social media companies. But most, like Twitter, already use Apple’s in-app purchase mechanism that lists boosted posts for $9.99 on Apple’s App Store. TikTok sells coins, or a currency used to promote posts, through in-app purchases as well.

For Meta, it thinks Apple’s recent clarification crosses a line in taking a piece of advertising revenue, not just app sales. Meta points to previous Apple executive statements, some made as part of the Epic Games trial over App Store rules, where it said it didn’t take a cut of ads.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind. We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps,” the Meta spokesperson told CNBC.

Apple isn’t asking for a cut of every ad served through the Facebook or Instagram apps. But Meta clearly feels targeted by Apple’s increasing power over its platforms, and worries that the company could argue that it deserves a piece of Meta’s total ad sales through its ads manager app, according to The Verge, which first reported Meta’s complaint.

It’s unclear how big the boost market is. Most big advertisers use dedicated portals or apps to buy ads. Eric Seufert, an ads industry watcher and the founder of Mobile Dev Memo, wrote Monday that he suspects it is a “negligible proportion of revenue” to the social media companies.

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Is Meta a broken stock? Earnings will help answer some lingering questions

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Alito says leaked abortion opinion made conservative justices ‘targets for assassination’

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Associate Justice Samuel Alito poses during a group photo of the Justices at the Supreme Court in Washington, April 23, 2021.

Erin Schaff | Pool | Reuters

Supreme Court Justice Samuel Alito said Tuesday night that the leak of the draft opinion to overturn Roe v. Wade this year endangered the lives of justices by putting a target on their backs.

“It was a great betrayal of trust by somebody, and it was a shock, because nothing like that had happened in the past, so it certainly changed the atmosphere at the court for the remainder of last term,” Alito said at an event at the Washington-based Heritage Foundation in response to a question about how the leak has affected the court.

“The leak also made those of us who were thought to be in the majority in support of overruling Roe and Casey targets for assassination, because it gave people a rational reason to think they could prevent that from happening by killing one of us,” he added. The court also overturned its related 1992 decision in Planned Parenthood v. Casey in the ruling in June.

Alito, who was nominated by former President George W. Bush and is part of the court’s 6-3 conservative majority, authored the draft and the final opinion that removed constitutional protections for abortion.

In his remarks Tuesday, Alito referred to the charges against Nicholas John Roske, of Simi Valley, California, who was armed with a handgun, a knife, pepper spray and burglary tools when he was arrested in June near Justice Brett Kavanaugh’s home, between the release of the leaked draft and the court’s eventual ruling. Roske has pleaded not guilty to trying to kill Kavanaugh.

“But that was last term. Now we’re in a new term,” Alito said Tuesday, adding that the justices and staff members “want things to get back to normal, the way they were before all of this last term, before Covid.”

Alito’s comments echoed, in part, Chief Justice John Roberts’ statement shortly after the leak in May confirming the authenticity of the draft while condemning what he called a “betrayal of the confidences of the court.”

Roberts said at the time that he ordered the marshal of the court to launch an investigation to identify the leaker. No findings from the probe have been made public.

Additional security measures were put in place in the aftermath of the leak and in response to demonstrations outside several justices’ homes. Last week, a Georgia man was arrested on weapons charges after police said they found two handguns and a shotgun in a van he was driving in Washington with plans to “deliver documents” to the Supreme Court.

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