[ad_1]
Lyft Inc. on Thursday reported first-quarter results that beat expectations, but a forecast that fell just shy of analysts’ estimates weighed on the company’s stock.
Lyft shares LYFT fell 15% after hours. They had dropped 1.8% in the regular session to close at $10.69 after a six-day positive streak.
Lyft forecast second-quarter revenue of…
[ad_2]
[ad_1]
An oil tanker being serviced by a bunkering vessel.
Courtesy: Hafnia
If you think that life at sea is like the movie franchise “Pirates of the Caribbean,” think again.
The movies, which feature ambushes, looting and a drunken captain, are far from real life, according to shipping veteran Ralph Juhl.
“That is, of course, a lot of bollocks,” Juhl told CNBC by phone.
For starters, the consumption of alcohol is banned on many ships.
But there is one similarity with the movie, Juhl said: the code of conduct between seafarers. In the franchise, the Pirate’s Code was chronicled in a book kept by character Captain Teague, and loosely followed by some.
For those who sail for a living, there is a similar type of agreement, Juhl said.
The crew on board an oil tanker operated by Hafnia.
Courtesy: Hafnia
“Seafarers, no matter where they come from — India, Ukraine, Denmark, the Philippines — there is this conduct of how you behave on a ship … You can actually endanger both yourself and all of your colleagues if you are not playing that social game, being on board the ship. So, you take responsibility, you follow authority,” Juhl said.
Juhl, an executive vice-president at oil tanker firm Hafnia, has worked in the industry for several decades, starting as an ordinary seaman — the lowest rank of sailor — in 1983.
“When you as a seafarer [go] on board … you are a contribution to the society and you have to fit in … there is this code of the high seas,” he added.
“Pirates of the Caribbean” is a seafaring stereotype familiar to Hafnia’s DSA Dixon, who has been a captain for five years. Dixon — who sails vessels known as product tankers, which transport both refined and unrefined petroleum products around the world — had to convince his parents-in-law that his role was nothing like the movie, he told CNBC by phone.
“A lot of people have a very different representation of a seafarer, looking at Pirates of the Caribbean,” he said.
Captain DSA Dixon (in black) says he invents games to keep his crew’s morale up during months at sea.
DSA Dixon | Hafnia
Dixon might be captaining a ship such as the huge Hafnia Rhine, which is about 230 meters long by 33 meters wide, with a capacity of more than 76,000 deadweight tons — a measure that includes the oil cargo, plus fuel, food, water and crew members, but not the weight of the ship itself.
Where the ship goes depends on where the demand for oil is and Dixon has sailed to every continent bar Antarctica, he said.
Dixon aims to keep to a schedule of three months at sea followed by three months at home in Mumbai, India, he said, and he started his most recent voyage on the Mississippi River in the U.S., sailing to Brazil and going on to Saudi Arabia via Gibraltar and the Suez Canal, before returning to Brazil.
The greatest part of my job is I’ve seen things that an average human being might not.
Compared to someone working an office job, Dixon said he spends more time with his wife and six-year-old son, as when he is at home he’s “completely” there. “I love this part of my life, because when I go back home, I’m Santa Claus,” he said. “It doesn’t get stagnated at any point – when it’s about to get stagnated, I’m back at sea.”
Aside from navigation, Dixon said the most important part of his job is to keep the crew in good spirits, as they spend months at sea together.
“We have at times, 20, 25 people on board, they’re all different nationalities, different cultures, different languages … our ship is as good as the people on it,” Dixon said.
There’s no fixed daily routine, Dixon added. “There’s no one way to describe life on board. It’s challenging of course, but the challenge keeps you motivated all the time,” he said.
Along with navigation and managing the crew, Dixon might be talking to officials who come aboard when the ship is docked or coming up with ways to celebrate religious festivals.
The engine control room of an oil tanker. Hafnia Chief Engineer Dmytro Lifarenko spent around six months on board during the Covid-19 pandemic in 2020.
Courtesy: Hafnia
“Irrespective of nationality, or religion, people celebrate each other’s events or festivals,” Dixon said. “I even invent something like a treasure hunt on board. The ship is massive, I divide [crew] into teams … and let them find their own way,” Dixon added.
These games might sound “kiddish,” but they serve an important purpose, Dixon said. “These are grown-up men, some might be 50 years-old, and they’re doing this, but it’s the way to bond … we need to socialize and a happy ship is always an excellent vessel,” Dixon said.
Dixon makes sure the crew take Sundays off, spending it as they choose: perhaps playing PlayStation, chatting or sleeping. “I make sure there’s an excellent lunch,” Dixon added.
Traveling across oceans means getting to experience some of the world’s natural spectacles, with Dixon seeing the light phenomenon aurora borealis — also known as the northern lights — while sailing near Norway.
An aurora borealis light display in the southern part of Norway, one of the natural spectacles seen by oil tanker captain DSA Dixon during his seafaring life.
Heiko Junge | Afp | Getty Images
“The only regret I have is what I see I’m not able to share it, I want my family to see [things] at that very point, at that very moment, a photograph won’t capture it,” Dixon said. How did he feel seeing the lights? “You feel complete, I will say. You feel abundant,” he said.
“The greatest part of my job is I’ve seen things that an average human being might not,” he added.
Alongside enjoying scenes of wonder, life as a seafarer can be tough.
Hafnia Chief Engineer Dmytro Lifarenko is from Ukraine and was at home when Russia invaded the country in February 2022, fleeing with his wife and children across Europe to Valencia in Spain.
“I don’t know how I would handle … knowing that the bombs were there and I’m on board,” he told CNBC by phone, speculating about how he would have felt if he had been at sea when war broke out.
While his most recent voyage was five months long — sailing from Singapore to France and then Australia — he has recently taken extended leave to settle his family in their new home.
Chief Engineer Dmytro Lifarenko is from Ukraine and was at home when Russia invaded the country in February 2022. He has since moved with his family to Spain.
Dmytro Lifarenko | Hafnia
“I miss my family a lot during the voyage,” Lifarenko said — he and his wife have three children: a daughter of six months, six-year-old son and a 12-year-old daughter.
“Being two parents for three kids, this is fine. Being [effectively] a single mom for our kids, that’s very difficult … to be honest, this is the worst part of the job.”
This is something Juhl is sympathetic to: “That’s a big ‘uncomfort’ for many seafarers, that they are now so involved in their family [while at sea], even though they can’t do anything about it,” he said.
The boiler suit dressed man with a big spanner — it’s not the sailor that we’ll need in the future.
Ralph Juhl
Executive vice president, Hafnia
During the Covid-19 pandemic in 2020, Lifarenko spent about six months onboard, which is longer than his usual voyage. He said guided meditations sent to him by Hafnia were useful to deal with an uncertain situation.
“You keep thinking about the things that you actually cannot change, and that’s quite close to depression, but this [was] like a helpful hand,” he said.
But, despite some downsides, Lifarenko said he loves his job because of its variety. “You cannot say what is your routine, because the routine part is quite small. Most of the time, you are solving some situation, which requires you to use your brain, and you’re thinking, how to fix this … or how can we maintain this in a better way,” he said.
He has also enjoyed seeing the natural world while onboard, including spotting whales and sailing close to the volcanic Canary Islands.
Juhl spent more than a decade as a seafarer, starting at age 16 and sailing to places such as Honduras and South Korea, and becoming a navigator on chemical carrier ships before captaining ferries. He came onshore in 1997 and is now responsible for Hafnia’s technical operations. He described those onboard as “working their butts off.”
“They never go ashore anymore, there are terminals far away from cities and so on. So, this romantic life and impression of seafarers, it is pretty much gone. It’s hard work,” he said.
Oil tanker crew prepare mooring ropes to secure a bunker barge to their vessel for refueling.
Courtesy: Hafnia
This means attracting the next generation of crew is potentially tougher. “It’s a lonely life from time to time. And today you cannot offer young people loneliness,” he said.
Juhl wants to encourage more women to become seafarers and Hafnia is working on a pilot program to operate two ships where half the crew are female, to understand how the culture onboard might change, both positively and negatively, and how to solve that.
However, issues remain: Authorities in countries where women are discriminated against might not deal with female captains, for example, so Hafnia has had to temporarily assign a male captain for port stays in such places, Juhl said.
There has been internet access on board tankers for just a couple of years, Juhl added, and he wants to get creative about what might be possible as technology involves.
He’s especially keen for sailors to be able to communicate with their families at home, he said.
“Hopefully we can soon make holograms where the captain can go to his cabin with his supper, and then he can open his hologram and he can sit and eat with his wife … we have to think that way,” Juhl said. And new technology will mean seafarers need different skills. “The boiler suit dressed man with a big spanner — it’s not the sailor that we’ll need in the future,” he said.
[ad_2]
[ad_1]
Democrats largely have closed ranks behind President Joe Biden ahead of next year’s election, but he isn’t completely without challengers for the party’s nomination.
Author and activist Marianne Williamson has thrown her hat in the ring, pursuing a longshot bid that comes after her 2020 presidential campaign fizzled out before the Iowa caucuses.
Why isn’t she falling in line and supporting her party’s incumbent president? What’s her pitch to people who think she’s not a serious candidate? What are her top economic proposals?
Williamson, 70, tackled those questions and more in a phone interview earlier this week.
Our Q&A with the Democratic presidential hopeful has been edited for clarity and length.
MarketWatch: In a nutshell, could you explain why you’re running for president?
Williamson: I’m running for president because I believe that some things need to be said and some changes need to be made, in order to repair some serious damage that’s been done to our democracy, to our country, to our people and to our environment over the last 50 years.
MarketWatch: You’ve talked about running to address “systemic economic injustices endured by millions of Americans” because of the “undue influence of corporate money on our political system.” What do you see as the top examples of that?
Williamson: During the 1970s, the average American worker had decent benefits, could afford a home, could afford a yearly vacation, could afford a car and could afford to send their child to college. In the last 48 years, there has been a $50 trillion transfer of wealth from the bottom 90% to the top 1% of Americans. That transfer has decimated our middle class. We are now at a point where if you are among 20% of Americans, then the economy’s doing pretty well for you. But, unfortunately, that 20% is surrounded by a vast sea of economic despair. We have 60,000 people in the United States who die every year because they can’t afford healthcare
XLV,
one in four Americans living with a medical debt, and 18 million Americans unable to fill the prescriptions that their doctors give to them.
If you are in the club in America, if you are making it in America — and I have sold some books, so I understand the high side of the free market and have benefited, and I’m grateful for that — but no conscious persons wants to feel that they create wealth at the expense of other people having a chance. That is not American. It’s not what the American Dream is supposed to be.
I’m not trying to whitewash and romanticize American capitalism before this era. I’m not saying we were ever perfect, but it does seem to me that when I was growing up, the social consensus is that we were supposed to try. We knew that the higher good was that there would be this balance between individual liberty, including economic liberty, and a concern for the common good. But today concern for the common good has become almost derided as some quaint notion, and that we shouldn’t really give much more than lip service to it. And that’s a lot of human suffering that occurs because of that change in the social contract.
MarketWatch: Here’s kind of a two-part question. What would be your top economic priorities, and how in particular would you address high inflation and the recent banking
KBE,
crisis?
Williamson: I’d like to see universal healthcare. I want to see tuition-free college at state colleges and universities, which is what we had in this country until the 1960s. There should be free childcare. There should be paid family leave. There should be guaranteed sick pay and a livable wage. And I think Americans are waking up to the fact that those things that I just mentioned are considered moderate issues in every other advanced democracy. They should not be considered left-wing fringe issues. They are granted to the citizens of every other advanced democracy.
That was your first question. The second has to do with high inflation. A lot of that high inflation has to do with price gouging by huge corporations, whether it has to do with food companies, transportation companies and so forth. All of those CEOs should testify before Congress and talk about the ways that they have — for the sake of their own profits — gouged the American people, particularly at such a time as this. And this is what happens when we normalize such a lack of conscience and such a lack of ethics within our system.
In terms of what happened with the bank in Silicon Valley
SIVBQ,
which is what your third question was, right? I think the depositors should be made whole, but the bank executives who were taking multimillion-dollar bonuses for themselves, both before and right after the crash, they certainly should not get those bonuses. And also it’s concerning that some of the tech investors that would benefit the most from those deposits were the ones who caused the run on the bank. I don’t think that they should receive the benefit of what happens when those deposits are made whole. But the average depositor absolutely should be made whole in such cases.
MarketWatch: You mentioned free tuition and child care. Where would the funding for that come from?
Williamson: The funding should come, first of all, from taxation. The 2017 tax cut in this country was a $2 trillion tax cut, and 83 cents of every dollar went to the highest-earning corporations and individuals. Now that tax cut also included the middle-class tax cut, and the middle-class tax cut was good.
That tax cut for the highest earners should be repealed, but the middle-class tax cut should be put back in immediately.
Secondly, we should stop all the corporate subsidies. Why are we giving subsidies to these companies that are already making multibillions of dollars in profit and often then price gouging the American people?
Third, I believe there should be a wealth tax. If somebody has $50 million, I don’t have any problem with their paying an extra 2% tax. And if they have $1 billion, let them pay another 1%. Somebody with a $50 million portfolio, much less $1 billion in assets, would not even feel that change, but the changes in people’s lives that would be created by those shifts would be huge.
MarketWatch: Your campaign often gets described as a real longshot bid. Why are you running when so many people say you have a low chance for success?
Williamson: Well, certainly Donald Trump was considered a longshot. For that matter, when he began Barack Obama was considered a longshot. Surely we remember when Hillary Clinton was considered a shoo-in.
MarketWatch: A recent Monmouth University poll of Democratic voters found 11% had a favorable view of you, 16% had an unfavorable view, 21% had no opinion, and 52% had not heard of you. How do you win over those voters who have an unfavorable view, and how do you reach the folks who haven’t heard of you?
Williamson: Well, there was a poll that came out last week that put me at 10%, including 18% with independents and 21% with people under 30.
It’s very difficult for someone like myself to get the message out when you have such institutional resistance to my even being in the conversation, and that is displayed in various ways. But there is independent media today. God knows there’s TikTok, where my information seems to be doing quite well.
This early, no candidate should be allowing the polls to determine their path forward. I didn’t go into this expecting the approval of institutional forces. And I, as a matter of fact, expected the kind of resistance that I’ve received, but that doesn’t matter. What matters is that a certain agenda be placed before the American people, and I am providing that option — the option of that alternative agenda.
I believe that agenda is the way for the Democrats to win in 2024. But even more importantly, I think it’s the agenda that will lead to the repair of this country.
MarketWatch: You mentioned TikTok, and that has been a hot topic in Washington, D.C., in recent weeks. Do you have a view on the Democratic and Republican proposals to ban TikTok in the U.S.?
Williamson: I think the United States government does need to be concerned with tech
XLK,
surveillance, but I wish they were as concerned when it comes to American-run companies as when it comes to Chinese. It’s a serious issue, it’s a valid issue — the whole issue of surveillance. But it’s a gnarly issue as well, and rushing to shut something down, which is so obviously a platform depended on by millions and millions of Americans for information sharing, is never something that should be done lightly.
MarketWatch: Some Americans may know you only for your spiritual work, and these folks may not think you’re a serious presidential candidate. The White House press secretary indicated she’s in that camp. What’s your message to win those folks over?
Williamson: First of all, I don’t think of my campaign as quote-unquote trying to win anyone over. There’s something that I read years ago that has always guided my work: “If there’s something you genuinely need to say, there’s someone out there who genuinely needs to hear it.” I am speaking to people who I know agree with me. I wouldn’t be doing this if I weren’t aware that millions of people agree with me.
I think it’s very sad that the president would allow a presidential press podium to be used to mock a political opponent, and I think that many people were and are offended by that. This is a democracy. We should have as many voices out there as possible. We should have as many people running in an election as feel moved. Nobody has a monopoly on good ideas. There are ideas on the left and ideas on the right. There are ideas all across the spectrum, and this is a point in American history where we as Americans should hear them all.
MarketWatch: What do you think are some of the main things that President Biden has gotten right, and in what areas has he gone wrong?
Williamson: Well, the first thing he did right was he defeated Donald Trump. The president has taken an incremental approach to America’s problems, and I believe that he does wish to alleviate the suffering of many people whose lives are affected by some deeply unjust systems. But I don’t think that the alleviation of stress is enough right now. We need fundamental economic reform.
We also need a serious answer to climate change, and the president’s approval of the Willow project is not that. The president has said that he recognizes that climate change is an existential crisis, and yet he has given more oil
CL00,
permits than even Donald Trump did, and he has approved the Willow project.
He also said that there will be a raise in the minimum wage. He did that for federal workers, but when it came to the Senate parliamentarian saying that he couldn’t put that raise in a bill, then he conveniently stopped right there and simply acquiesced to what the parliamentarian had said.
The Democratic House and Senate — they did cut child poverty in half with the child tax credit, but then, when that expired six months later, they didn’t bother to permanentize it.
These are the kinds of half-measures and incremental measures which are not enough to change the fundamental economic patterns in this country that lead to so much chronic economic anxiety and despair.
AFP via Getty Images
MarketWatch: One thing that comes up often with President Biden is his age, which is 80, while you’re 70. Do you think his age should be a concern, or is it ageism to bring it up?
Williamson: I think the individual has to consider this themselves. I have a problem, of course, contributing to the conversation because of the issue of ageism. But on the other hand, everybody can see for themselves what they can see for themselves.
I can only say if I were 80, I wouldn’t be running. But you know, I will not take potshots at the president, and I think that veers into potshots.
MarketWatch: Let’s talk about taking on Donald Trump, Ron DeSantis or whomever the Republican nominee ends up being. Why do you think you’re the Democrat who could end up beating one of them?
Williamson: Republicans are going to throw some big lies at the Democrats in 2024, and the only way that we’re going to defeat them, in my opinion, is to tell some big truths. Franklin Roosevelt said we would not have to worry about a fascist takeover in this country as long as democracy delivered on its promises. Democracy has not delivered on its promises. The only way to beat Donald Trump or Ron DeSantis in 2024 is to propose an agenda in which democracy once again delivers on its promises to the majority of the American people. And that would mean the issues I mentioned before: universal healthcare, tuition-free college, free child care, a guaranteed livable wage and paid family leave. Those are given to the citizens in every other advanced democracy, and there is no good reason whatsoever why they are not delivered to the average citizen in the United States.
MarketWatch: There are Democrats who could be challenging President Biden for the party’s 2024 nomination, but they aren’t and instead they’re supporting him. Why aren’t there more efforts in the party to get people to run for president?
Williamson: Well, you’d have to ask them why they’re not running. But there’s clearly a trope that the field should clear, and everybody should simply get in line with the opinion of the Democratic establishment that Biden is the man because they have decided so. I don’t see it that way. I believe the Democratic primary voters — and independent voters and anyone else, if it’s an open primary — they should decide who the Democratic candidate is. To me, that’s what democracy is. That’s what elections are about.
MarketWatch: The Democratic Party is not expected to hold presidential primary debates for 2024. What can you do to change that and get some time on a debate stage?
Williamson: Well, I hope to have a successful campaign. I hope to have high poll numbers. I hope to have a lot of people in those primary states yelling foul. It’s a government of the people, by the people, for the people. The American people should hear what their options are, and that’s what a debate would be. If enough people realize that and believe it and make laws about it, then that is what will happen.
I think sometimes there’s a kind of learned powerlessness on the part of the American people today. We forget the radicalism of the American experiment, which is that the governance of this country is supposed to be in our hands. But the American people have been trained to expect too little and almost trained to give up the power of independent thought. I hope that my campaign and other things that occur in this campaign season will awaken people, and I think a certain kind of awakening is happening already.
MarketWatch: We’re a financially focused publication, so here’s a question along those lines. I looked at your financial disclosure from your 2020 presidential run. It showed some investments in big public companies like Apple
AAPL,
and Mastercard
MA,
…
Williamson: Wait, what are you talking about?
MarketWatch: That’s from your 2019 executive-branch personnel public financial disclosure report. It shows investments in various stocks and funds. The question — for our readers who are investors or people saving for retirement — is could you describe your own approach to investing and preparing for retirement?
Williamson: Socially responsible investing, and that’s why I said, “Whoa, what?” Because I believe in investing in socially responsible companies.
MarketWatch: One last question: What else would you like people to know?
Williamson: America has some serious problems, but we have infinite potential to solve those problems. We need to revisit our first principles, as John Adams said, and find that place in our hearts where, as Americans, as adults in this generation, we recognize that this profound idea of American democracy is put in our hands for safekeeping. And that doesn’t just give us rights; it gives us responsibilities. The political system in the United States speaks to us too often like we’re children, like we’re seventh-graders. Our public dialogue is too often on this kind of seventh-grade level. This is not a time to be an immature thinker, and it’s not a time to get into mean-spiritedness or cynicism either. If we allow ourselves to rise to the occasion, no matter what our politics are, we’re going to repair what has been broken, and we are going to initiate a new beginning. I think that’s possible. Other generations have done it, and we can do it, too.
MarketWatch: Thank you for being available to chat.
Williamson: Thank you very, very much.
Now read: Here are the Republicans running for president — or seen as potential 2024 candidates
[ad_2]
[ad_1]
CHRIS J RATCLIFFE | AFP | Getty Images
Bloated warehouse inventories are an expensive pressure eating away at the bottom line of many companies, and for many, the excess supply and associated costs of storage won’t abate this year, according to a new CNBC Supply Chain Survey.
Just over one-third (36%) said they expect inventories to return to normal in the second half of this year, with an equal percentage expecting the gluts to last into 2024 — 21% saying a return to normal can occur in the first half of the year, and another 15% expecting normal activity by the first half of 2024. But uncertainty about inventory management is significant, with almost one-quarter (23%) of supply chain managers saying they are not sure when gluts will be worked off.
“We don’t expect significant decreases in inventory levels within our network in 2023,” said Paul Harris, vice president of operations for WarehouseQuote. “Several of our manufacturing clients are experiencing dead/bloated inventory challenges due to over-ordering in the container grid-lock from prior quarters. A majority have elected to keep the inventory on hand and are opposed to liquidating.
A total of 90 logistics managers representing the American Apparel and Footwear Association, ITS Logistics, WarehouseQuote, and the Council of Supply Chain Management Professionals, or CSCMP, participated in the survey between March 3-21 to provide information on their current inventories and the biggest inflationary pressures they are facing, and often passing on to the consumer.
Logistics experts tell CNBC that 20% of their excess inventory sitting in warehouses is not seasonable in product nature. Slightly more than half of survey participants said they would keep the items in warehouses. But a little over one-quarter (27%) said they are selling on the secondary market because inventories impact a company’s bottom line through elevated storage prices.
Harris told CNBC many clients with perishable goods are selling them on secondary markets to avoid destroying products. “However, if a secondary market is not an option, they are forced to destroy the product,” he said. “If it’s a consumable, they are donating the goods to take tax deductions.”
Investors are worried about the earnings and margin trends and expect Wall Street to revise estimates lower. The supply chain pressures will be among the factors that weigh on quarterly numbers.
“Inventory carrying costs continue to rise, driven by inflationary pressures and late shipments,” said Mark Baxa, CEO of CSCMP. “This means that with every day that passes, three things are happening … growing sales risk, margin pressure, and D&O [deteriorated and/or obsolete].”
Almost half surveyed said the biggest inflationary pressures they are paying are warehouse costs, followed by the “other” category, which includes rent and labor.
ITS Logistics told CNBC that many clients across industries have been using ocean containers, rail containers and 53-foot trailers for storage because distribution centers were full.
“These charges will start materializing in Q2 or Q3 financial results,” said Paul Brashier, vice president of drayage and intermodal at ITS Logistics.
The survey found 50% of respondents saying the average length of time they are using ocean containers for storage is over four months.
“We are seeing similar trends in our data and ecosystem,” Brashier said.
Traditionally, warehousing costs and the associated labor costs are passed on to the consumer, increasing or sustaining the price of a product. Nearly half (44%) of survey respondents said they are passing on at least half of their increased costs, if not more, to consumers.
“It’s clear that supply chain challenges and all their associated costs continue to stir inflationary pressures,” said Stephen Lamar, president and CEO of the American Apparel and Footwear Association. “Given ongoing inventory concerns and the fragile nature of our logistics system, there are other pressures and uncertainty.”
His group is calling for West Coast port labor negotiations to be quickly finalized and for the government to “aggressively remove other cost pressures,” a reference to Section 301 tariffs on Chinese imports, which he said continue to make supply chains more expensive.
Recent data on manufacturing has shown a deterioration in the economy, with the ISM Manufacturing index in contraction level based on March data released this week. The U.S. services sector slipped closer to contraction in March, according to the ISM Services Index, with sharp declines in new orders, exports and price.
Looking at the health of manufacturing orders for the next three months, 40% of logistics managers surveyed said they are not cutting orders, while a little under one-fifth (18%) said they are cutting orders by 30%.
Inventory levels and consumer consumption are two factors influencing manufacturing orders.
These orders help gauge China GDP as it reopens from its strict Covid protocols, since the country relies on manufacturing and trade for its economic growth.
FreightWaves SONAR intelligence shows a slight uptick in ocean freight orders and recovery from the massive drop ahead of Lunar New Year, but the longer trend line remains a decrease in ocean bookings.
The inventory glut is affecting trucking logistics in multiple ways. Not only are trucks moving fewer containers from the ports, they are also moving less from the warehouses to the retail stores. Data from Motive, which tracks trucking visits to North American distribution facilities for the top five retailers by volume, shows a drop in truck visits from warehouses.
“The decline in visits to retail warehouses indicates weakness in consumer demand, but surprisingly may also be a sign of recovery in the supply chain,” said Shoaib Makani, founder and CEO of Motive. “With lead times to replenish inventory reduced from 2021 and 2022 highs, retailers are burning off existing inventories with the confidence that they will be able to replenish quickly.”
Even with orders increasing, the inventory headwinds are a source of concern for logistics experts.
“This survey confirms that we remain in an era of serious supply chain cost-to-serve challenges,” Baxa said. “Warehousing costs are contributing to these challenges that shippers are facing today and on the road ahead.”
FreightWaves and ITS Logistics are CNBC Supply Chain Heat Map data providers.
[ad_2]
[ad_1]
It’s been a busy few months for China — and sobering ones for the United States.
Days later, Beijing announced it had brokered a deal that will see Persian Gulf rivals Saudi Arabia and Iran normalize relations, a shocking diplomatic coup in an area long dominated by the United States. Xi was reportedly personally involved in the negotiations.
“This landmark agreement has the potential to transform the Middle East by realigning its major powers,” the journal Foreign Affairs declared, adding that the gambit is “weaving the region into China’s global ambitions. For Beijing, the announcement was a great leap forward in its rivalry with Washington.”
But the biggest news came two weeks ago, when Xi flew to Moscow and met with Vladimir Putin, just days after the International Criminal Court in the Hague issued an arrest warrant for the Russian president on charges of war crimes in Russia’s year-old invasion of Ukraine.
“ ‘China has seen a space where it is hard for the West to really block off — heading into issues [that the Western powers] feel are too intractable or too toxic to touch and trying to demonstrate that there might be a different way to mediate or involve yourself in these problems.’ ”
“There are changes coming that haven’t happened in 100 years,” Xi told Putin as the self-described “dear friends” concluded their talks. “When we are together, we are driving these changes.”
China’s assertiveness comes after three years of COVID restrictions that saw the country close off from the world in an attempt to tame the virus, a policy that was suddenly scrapped in December.
“It has sunk in that China needs friends. It has ended up too isolated, and that has cut across the narrative of the Xi third term, which was due to be somewhat more sunny,” Kerry Brown, director of the Lau China Institute at King’s College London, told MarketWatch.
Others agreed. “China certainly is exiting a period of diplomatic isolation during the height of COVID,” said Victor Shih, the Ho Miu Lam chair in China and Pacific relations at the University of California, San Diego, and an expert on Chinese elite politics.
That exit has been swift, with Beijing taking concrete steps toward a belief that previously had been mostly rhetoric — that the U.S.-led global system is not the only path.
“China has seen a space where it is hard for the West to really block off — heading into issues [that the Western powers] feel are too intractable or too toxic to touch and trying to demonstrate that there might be a different way to mediate or involve yourself in these problems,” Brown said.
Those sentiments are increasingly pervasive across China, particularly in government, academia and media.
“The U.S., which is accustomed to enjoying the spotlight, is now puzzled for it never thought that one day China would be more popular than it,” state tabloid Global Times said in a front-page story last Thursday.
Wang Yong, director of the Center for International Political Economy and the Center for American Studies at Peking University, told MarketWatch, “The rise of China as a great power is facing an increasingly complicated situation, mainly because U.S. elites judge China as the foremost strategic and systemic threat, and attack China’s development.”
Wang highlighted concerns over Washington’s policy toward self-ruled Taiwan, which Beijing claims as a renegade province.
In fact, Taiwanese President Tsai Ing-wen is stopping over in the U.S. this week after visits to the island’s few remaining allies in Central America. Beijing has threatened for weeks against her being welcomed by any high-level American officials.
Those threats turned to ire on Monday, when Republican House Speaker Kevin McCarthy said he would meet with Tsai on Wednesday in California. China said this could lead to “serious confrontation” and that Beijing would “resolutely fight back” — without giving specifics.
“ ‘Why is it assumed we live in a U.S. world?’ ”
“Gradually deviating from the past promise of ‘one China,’ promoting Taiwan independence and using Taiwan to contain China’s development — these could trigger a China-U.S. war,” Peking University’s Wang said from Beijing.
See: U.S. tells China not to ‘overreact’ to Taiwan leader’s stopover
Average citizens including younger people expressed frustration with U.S. policy.
AP/John Minchillo
“Why isn’t it China’s time to lead? Why is it assumed we live in a U.S. world?” asked 27-year-old Alan Ma, a graduate student in politics at Beijing’s Tsinghua University.
Other areas are reaching heightened levels of tension. China’s military said last month it drove out an American destroyer ship that had “illegally” entered the South China Sea. And the CEO of Chinese-owned video sensation TikTok appeared before U.S. lawmakers in hopes of preventing an American ban on the app over national-security concerns.
Context: Biden White House and bipartisan group of 12 senators back TikTok ban
Also: TikTok is the next Chinese product the U.S. could shoot down
But China’s rise, however rapid, must be put in a realistic context, experts said.
“I don’t think that we can say China has entered a new period as a global power until it has deployed large troop contingents overseas on its own,” said UC San Diego’s Shih.
Tanner Brown covers China for MarketWatch and Barron’s.
[ad_2]
[ad_1]
Lyft Inc.’s incoming Chief Executive David Risher looks at the ride-hailing company’s competition with Uber Technologies Inc. as a way to keep both companies “honest and focused,” he said in an interview with MarketWatch on Monday.
“There’s lots of two-service dynamics, or market dynamics, like Coke and Pepsi, or the Nasdaq and the [New York Stock Exchange],” Risher said. “You want that level of competition.”
Lyft
LYFT,
which has lost $2.2 billion, or about a third, of its market capitalization since it reported earnings last month, announced Monday that board director Risher will take over as CEO of the struggling company. He will replace company co-founder Logan Green, who will become chairman of the board.
Lyft is competing with much larger rival Uber
UBER,
which has gained ride-hailing market share in recent years at the expense of Lyft, according to YipitData, which says Uber now has about 74% of U.S. market share vs. Lyft’s 26%. Risher declined to say much about how he would differentiate himself from the outgoing CEO, but he indicated that Lyft will not attempt to compete with Uber in other services, such as delivery.
“I don’t want to get in a car with someone that’s just delivered a pizza,” he said.
“At some point, I don’t think of this as just an Uber battle,” he said. “It’s a battle against staying at home. How do we get people out? How do we get them playing and working together?”
Lyft’s new top executive was for the past 13 years CEO of Worldreader, a nonprofit that focuses on children’s literacy through digital reading. Risher said because of that, he’s familiar with “doing more with less… you have to be more efficient.”
Risher will receive a signing bonus of $3.25 million and have an annual salary of $725,000, according to Lyft’s filing with the Securities and Exchange Commission on Monday. He confirmed to MarketWatch that he intends to donate $3 million of that signing bonus to Worldreader.
“I told the board it’s very important to me that Worldreader become stronger instead of becoming weaker,” Risher said.
Risher is also active in efforts to encourage wealthy philanthropists to give away their money faster. He and his wife, Jennifer Risher, launched a group called Half My DAF in 2020 that aims to move money out of donor-advised funds and into the hands of working charities more quickly.
“My wife and I do that on the side,” Risher said. “For a long time, I’ve been a purpose-driven leader. But Lyft is my No. 1 focus.”
Before leading Worldreader, Risher was an early employee of Amazon.com Inc.
AMZN,
becoming its first head of product and head of U.S. retail, as well as a general manager at Microsoft Corp.
MSFT,
He said that experience gives him an “understanding of competition.”
He said Lyft will compete by focusing on customers and drivers, such as making sure drivers are picking up customers on time. He said there won’t be much difference in the company’s stance on treating drivers as independent contractors when he takes over.
Lyft, like Uber, has been under pressure from investors to become profitable. The way to get there is through making sure to address it from both the “cost side and the volume side,” Risher said.
Risher officially takes the helm on April 17. Like Green, co-founder and President John Zimmer also will relinquish a role in day-to-day operations, but will continue as vice chair of the board.
MarketWatch staff writer Leslie Albrecht contributed to this article.
[ad_2]
[ad_1]
Lyft Inc. is bringing in a new chief executive and removing its co-founders from running the ride-hailing company on a day-to-day basis, sending shares more than 3% higher in after-hours trading Monday.
Lyft
LYFT,
announced after markets closed Monday that board member David Risher will take over as CEO, replacing co-founder Logan Green. Green and Lyft’s other active co-founder — John Zimmer, who had been serving as president — will remain on the company’s board as chair and vice chair respectively, but not actively participate in running the company.
“I’m honored and humbled that Logan, John, and the board have trusted me to lead Lyft,” Risher said in a letter to employees. “And I’ll start by saying this: I want Lyft to lead, and I’m thrilled to lead Lyft.”
Risher worked at Microsoft Corp.
MSFT,
in the 1990s before becoming employee No. 37 at Amazon.com Inc.
AMZN,
according to Lyft’s announcement, which noted that he received a permanent thank you on the Amazon website from founder and former chief executive Jeff Bezos upon his departure in 2002. For the past 13 years, he has been in charge of a nonprofit focused on childhood literacy called Worldreader.
“Across all three organizations, I learned of the power of leading with purpose,” he wrote to employees. “Each organization derived tremendous energy through a singleness of purpose. It’s what attracted and retained great people, allowed us to make focused decisions and inspired our customers.”
In an interview with The Wall Street Journal, Risher — who has been on Lyft’s board since 2021 — admitted that Lyft faces competitive issues, seemingly referencing Uber Technologies Inc.
UBER,
He mentioned “a very aggressive — very aggressive — competitor,” while adding, “I think being a strong No. 2 is a good place to be.”
Lyft shares lost more than a third of their value in a single session in February after Green and Zimmer provided a forecast that missed expectations in what one analyst called “a debacle for the ages.” Monday’s announcement reiterated Lyft’s first-quarter guidance and said Lyft expects to report quarterly results in early May.
D.A. Davidson analyst Tom White told MarketWatch on Monday afternoon that the change at the top could be “a potential model positive.”
“A new leader with broader range of experiences could signal increased willingness to broaden Lyft’s strategic aperture a bit as it relates to other possible adjacent products (delivery?), partners, or ways to create value,” he wrote in an email.
Green and Zimmer began developing the company nearly 15 years ago, and launched the service in 2012, according to their separate letters to employees. They have jointly led the company since, including through a 2019 initial public offering that gave them special shares with stronger voting power.
From 2019: 5 things to know about the Lyft IPO
“To say I have loved leading Lyft is an understatement,” Green wrote in his letter to employees. “To say that I will miss working alongside you and this incredible team every day doesn’t even come close. This was an adventure of a lifetime, and I’ve loved every minute of it — the sweetness of the highs, and the pain of the lows that make you appreciate the next win that much more. I’m eternally grateful to this team.”
Lyft shares sold for $72 in its IPO, and closed Monday at $9.60 before moving closer to $10 in the extended session. Lyft stock has plummeted nearly 75% in the past 12 months, dropping 74.4% as the S&P 500 index
SPX,
has declined 12.6%.
[ad_2]
[ad_1]
Press play to listen to this article
Voiced by artificial intelligence.
European Commission President Ursula von der Leyen has declared Europe’s dependence on Russian oil and gas “history.”
But others, from senior Ukrainian officials to MEPs and industry insiders, say that chapter of history is still being written.
Significant quantities of Russian hydrocarbons, particularly oil, are still flowing around sanctions and into the European market, they say, earning payments that fund Vladimir Putin’s war machine.
“I had a friend in New York in the 1990s who complained cockroaches would get into his apartment through any available hole — that’s what Russia is doing with its energy,” Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelenskyy, told POLITICO. “We have to fix these holes to stop Russia receiving this blood money they are using to finance the military machine that is destroying our country and killing our people.”
Crude oil is notoriously difficult to track on global markets. It can easily be mixed or blended with other shipments in transit countries, effectively creating a larger batch of oil whose origins can’t be determined. The refining process, necessary for any practical application, also removes all traces of the feedstock’s origin.
A complex network of shipping companies, carrying the flags of inscrutable offshore jurisdictions, adds a further layer of mystery; some have been accused of helping Russia to hide the origin of its crude exports using a variety of different means.
“Unlike pipeline gas, the oil market is global. Swap and netting systems, and mixing varieties are common practice,” said Mikhail Khodorkovsky, a prominent exiled critic of Putin and the former CEO of oil and gas giant Yukos.
“The result of the embargo is a significant increase in Russian transportation costs, a significant redistribution of income in favor of intermediaries, and some additional discount due to the narrowing of the buyers’ market.”
The EU has largely banned Russian fossil fuels since the invasion of Ukraine in February 2022, with exceptions for limited quantities of pipeline crude oil, pipeline gas, liquefied natural gas (LNG), and oil products.
But large volumes of Russian crude oil — a bigger source of revenue than gas — are still being shipped onto global markets, leading some experts to suspect they are finding their way to Europe’s market through the back door.
“Since the introduction of sanctions, the volumes of crude oil Russia is exporting have remained more or less steady,” said Saad Rahim, chief economist at global commodities trading firm Trafigura. “It’s possible that Russian oil is still being sold on to the EU and Western nations via middlemen.”
One potential route into Europe is through Azerbaijan, which borders Russia and is the starting point of the Baku-Tbilisi-Ceyhan (BTC) pipeline, operated by BP. The port of Ceyhan, in Turkey, is a major supply hub from which crude oil is shipped to Europe; it also receives large quantities from Iraq through the Kirkuk-Ceyhan pipeline.
François Bellamy, a French MEP and member of the European Parliament’s Committee on Industry, Research and Energy, aired suspicions about this route in a recent question to the Commission. Data show that Azerbaijan exported 242,000 barrels a day more than it produced between April and July last year, he said — a large margin over domestic production, which stood at 648,000 barrels a day last month and is in long-term decline, according to ministry figures.
“How can a country diminish its production and increase its exports at the same time? There is something completely inconsistent in the figures and this inconsistency creates suspicions that sanctions are being circumvented,” Bellamy said.
A spokesperson for the Commission said it is working to crack down on loopholes in sanctions regimes and has appointed the EU’s former ambassador to the U.S., David O’Sullivan, as a special envoy tasked with tackling circumvention. The official also pointed out that data cited by Bellamy on Azerbaijani oil transactions, the most recent publicly available, “happened before the sanctions entered into force so there is no question of evasion of sanctions there.”
“Azerbaijan does not export Russian oil to the EU via the BTC pipeline,” said Aykhan Hajizada, spokesperson for the country’s foreign ministry, adding that while “Azerbaijan continues to use all non-sanctioned oil regardless of source,” it “remains committed to conducting its supply and trading operations with the utmost care and diligence, in line with relevant laws and regulations.”
BP has previously been forced to deny that the BTC pipeline carries Russian oil, and data seen by POLITICO for crude shipments from Ceyhan shows a recent dip in the volume of exports to the EU, from around 3 million tons per month (about 700,000 barrels per day) in early 2022 to around 2 million tons a month this year.
At the same time, though, Turkey doubled its direct imports of Russian oil last year and has refused to impose sanctions on Russian crude despite simultaneously offering military and humanitarian support to Ukraine.
Finland’s Centre for Research on Energy and Clean Air (CREA) warned late last year that “a new route for Russian oil to the EU is emerging through Turkey, a growing destination for Russian crude oil,” where it is refined into oil products that are not subject to sanctions and sold on.
“We have enough evidence that some international companies are buying refinery products made from Russian oil and selling them on to Europe,” said Ustenko, the Zelenskyy adviser. “It’s completely legal, but completely immoral. Just because it’s allowed doesn’t mean we don’t need to do anything about it.”
On Monday, British NGO Global Witness released a report that found Russian oil has consistently been sold at prices far exceeding the $60 cap imposed by G7 countries in December last year.
“The fact Russian oil continues to flow round the world is a feature, not a bug, of Western sanctions,” said Mai Rosner, a campaigner who worked on the report. “Governments offered the fossil fuel industry a wide-open back door, and commodity traders and big oil companies are exploiting these loopholes to continue business as usual.”
[ad_2]
Gabriel Gavin
Source link
[ad_1]
THE HAGUE (AP) — The International Criminal Court said Friday it has issued an arrest warrant for Russian President Vladimir Putin for war crimes because of his alleged involvement in abductions of children from Ukraine.
The court said in a statement that Putin “is allegedly responsible for the war crime of unlawful deportation of population (children) and that of unlawful transfer of population (children) from occupied areas of Ukraine to the Russian Federation.”
It also issued a warrant Friday for the arrest of Maria Alekseyevna Lvova-Belova, the Commissioner for Children’s Rights in the Office of the President of the Russian Federation, on similar allegations.
The court’s president, Piotr Hofmanski, said in a video statement that while the ICC’s judges have issued the warrants, it will be up to the international community to enforce them. The court has no police force of its own to enforce warrants.
“The ICC is doing its part of work as a court of law. The judges issued arrest warrants. The execution depends on international cooperation.”
A possible trial of any Russians at the ICC remains a long way off, as Moscow does recognize the court’s jurisdiction — a position reaffirmed earlier this week by Kremlin spokesman Dmitry Peskov — and does not extradite its nationals.
Ukraine also is not a member of the court, but it has granted the ICC jurisdiction over its territory and ICC prosecutor Karim Khan has visited four times since opening an investigation a year ago.
The ICC said that its pretrial chamber found there were “reasonable grounds to believe that each suspect bears responsibility for the war crime of unlawful deportation of population and that of unlawful transfer of population from occupied areas of Ukraine to the Russian Federation, in prejudice of Ukrainian children.”
The court statement said that “there are reasonable grounds to believe that Mr Putin bears individual criminal responsibility” for the child abductions “for having committed the acts directly, jointly with others and/or through others [and] for his failure to exercise control properly over civilian and military subordinates who committed the acts.”
From the archives (February 2023): Russia has committed crimes against humanity in Ukraine, U.S. Vice President Harris says
On Thursday, a U.N.-backed inquiry cited Russian attacks against civilians in Ukraine, including systematic torture and killing in occupied regions, among potential issues that amount to war crimes and possibly crimes against humanity.
The sweeping investigation also found crimes committed against Ukrainians on Russian territory, including deported Ukrainian children who were prevented from reuniting with their families, a “filtration” system aimed at singling out Ukrainians for detention, and torture and inhumane detention conditions.
But on Friday, the ICC put the face of Putin on the child abduction allegations.
Read on:
[ad_2]
[ad_1]
Shares of FedEx Corp. jumped after hours on Thursday after the package deliverer reported third-quarter results that beat expectations and raised its profit forecast, as it tries to battle weaker demand with aggressive cost cuts.
FedEx FDX reported fiscal third-quarter net income of $771 million, or $3.05 a share, compared with $1.11 billion, or $4.20 a share, in the same quarter last year. Revenue fell to $22.2 billion, compared with $23.6 billion in the same quarter last year.
Adjusted…
[ad_2]
[ad_1]
BEIJING (AP) — Is the United States out to sabotage China? Chinese leaders think so.
President Xi Jinping has accused Washington this week of trying to isolate his country and hold back its development. That reflects the ruling Communist Party’s growing frustration that its pursuit of prosperity and global influence is threatened by U.S. restrictions on access to technology, its support for Taiwan and other moves seen by Beijing as hostile.
Xi, China’s most powerful leader in decades, tries to appear to be above problems and usually makes blandly positive public comments. That made his complaint Monday all the more striking. Xi said a U.S.-led campaign of “containment and suppression” of China has “brought unprecedented, severe challenges.” He called on the public to “dare to fight.”
“ In the five months since U.S. President Joe Biden met with Chinese leader Xi Jinping in Indonesia, Washington has approved more weapons sales to Taiwan, criticized Beijing’s stance on Ukraine and put more Chinese companies on export watchlists. ”
On Tuesday, Foreign Minister Qin Gang sharpened the warning, saying Washington faces possible “conflict and confrontation” if it fails to change course.
“The foreign minister is speaking on behalf of a widely held view that the United States is coming after China and they have to defend themselves,” said John Delury, an international relations specialist at Yonsei University in Seoul.
See: China’s foreign minister warns of conflict unless U.S. changes course
China is hardly the only government to fume at Washington’s dominance of global strategic and economic affairs. But Chinese leaders see the United States as making extra effort to thwart Beijing as a challenger for regional and possibly global leadership.
The ruling party wants to restore China’s historic role as a political and cultural leader, raise incomes by transforming the country into an inventor of technology, and unite what it considers the Chinese motherland by taking control of Taiwan, the self-ruled island democracy that Beijing claims as part of its territory.
Beijing sees those as positive goals, but American officials see them as threats. They say Chinese development plans are based at least in part on stealing or pressuring foreign companies to hand over technology. Some warn Chinese competition might erode U.S. industrial dominance and incomes.
Washington has set back Beijing’s plans by putting Chinese companies including its first global tech brand, Huawei, on a blacklist that limits access to processor chips and other technology. That crippled Huawei’s smartphone brand, once one of the world’s biggest. American officials are lobbying European and other allies to avoid Huawei equipment when they upgrade phone networks.
Washington cites security fears, but Beijing says that is an excuse to hurt its fledgling competitors.
The two governments have the world’s biggest trading relationship and common interests in combating climate change and other problems. But relations are strained over Taiwan, Beijing’s treatment of Hong Kong and mostly Muslim ethnic minorities, and its refusal to criticize or isolate Russia for its invasion of Ukraine.
The official Chinese view has soured following an uptick when Xi met U.S. President Joe Biden in November in Indonesia, said Shi Yinhong, an international-relations specialist at Renmin University in Beijing. He noted that in the five months since then, Washington approved more weapons sales to Taiwan, criticized Beijing’s stance on Ukraine and put more Chinese companies on export watchlists, all of which China saw as hostile.
Xi and Qin spoke in a “dramatic way” this week, but “the essence of what they said is China’s long-term stance,” Shi said. The leadership believes “the United States has implemented almost all around, drastic and desperate containment of China in all respects, especially in strategic and military fields.”
“The risk of military conflict between China and the United States is getting bigger,” Shi said.
See: U.S. warns China against overt Kremlin backing as Russia’s invasion of Ukraine nears 1-year mark
A State Department spokesperson, Ned Price, said Washington wants to “coexist responsibly” within the global trade and political system and denied the U.S. government wants to suppress China.
“This is not about containing China. This is not about suppressing China. This is not about holding China back,” Price said in Washington. “We want to have that constructive competition that is fair” and “doesn’t veer into that conflict.”
“ ‘This is not about containing China. This is not about suppressing China. This is not about holding China back.’”
The United States formed a strategic group, the Quad, with Japan, Australia and India in response to concern about China and its claim to vast tracts of sea that are busy shipping lanes. They insist the group doesn’t focus on any one country, but its official statements are about territorial claims and other issues on which they have disputes with Beijing.
The latest change in tone follows acrimonious exchanges over a Chinese balloon that was shot down after passing over North America. Its electronics and other equipment are being examined by the FBI.
See: U.S. prepares new rules on investment in China
Qin, the foreign minister is “trying to position China as a global force for moderation and for peace” in front of foreign audiences and say “it’s the Americans who are blowing things out of proportion,” Delury said.
Xi’s government is especially irritated by displays of support by American and other Western legislators for Taiwan, which split with China in 1949 after a civil war.
Taiwan never has been part of the People’s Republic of China, but the Communist Party says the island of 22 million people must unite with the mainland, by force if necessary.
Washington is obligated by federal law to see that Taiwan has the weapons to defend itself and has sold it fighter jets and missiles. Chinese leaders complain that encourages Taiwanese politicians who might want to resist unification and possibly declare formal independence, a step Beijing says would lead to war.
Premier Li Keqiang, who is due to step down as China’s No. 2 leader this month, called on Sunday for “peaceful reunification.” But Xi’s government also has stepped up efforts to intimidate the island by flying fighter jets and firing missiles into the sea nearby.
The latest downturn is “testament to the real degradation” of U.S.-Chinese relations, which “never had much trust,” said Drew Thompson, a fellow at the Lee Kuan Yew School of Public Policy at the National University of Singapore.
Chinese leaders “consider any sort of discussion on strategic issues as sensitive and out of bounds,” which leads to “heightened risk of miscalculation,” Thompson said.
“They believe the U.S. is a hegemon that seeks to undermine the Communist Party and its legitimacy, and they have ample evidence of that,” he said. “But should perceptions and the balance of interests change, they could just as easily believe the U.S. is a partner for achieving the party’s objectives.”
More about China and the West:
Germany’s Scholz warns of ‘consequences’ if China sends arms to Russia
[ad_2]
[ad_1]
An Optoro warehouse in Tennessee that handles returns for retailers.
Source: Matt Adams | Optoro
As the markets prepare for the latest consumer price index data to be released on Tuesday, logistics managers are warning of a persistent source of inflation in the supply chain and saying consumers should be ready for the effect it will have on their wallets.
While many sources of supply chain inflation that stoked higher goods prices have come down sharply — including ocean freight rates and transportation fuels — bloated inventories due to a lack of consumer demand are sustaining upward pressure on warehouse rates.
“In 2022, we saw rate levels for international air and ocean and domestic trucking fall back down to earth,” said Brian Bourke, global chief commercial officer at SEKO Logistics. “But inflationary pressures remain where demand outpaces supply in 2023, including in warehousing through most of the United States, domestic parcel and labor.”
One reason for the imbalance between warehouse supply and demand is the lack of new facilities coming into the market.
“National warehousing capacity remains low and will remain tight for the foreseeable future as U.S. industrial construction starts have fallen considerably year-over-year due to rising interest rates,” said Chris Huwaldt, vice president of solutions at WarehouseQuote.
Consumer prices have come down sharply as goods inflation that surged during the pandemic has cooled. And Federal Reserve Chairman Jerome Powell expressed confidence after the most recent Fed meeting that disinflation “has begun.” December’s CPI was the smallest year-over-year increase since October 2021, at 6.5% on an annual basis, down from a 9.1% peak in June 2022.
The Fed is now more focused on services inflation, in particular labor prices, as it expects the pressure in goods inflation to continue a downward trend. But the logistics issues suggest there will be some elements of sticky inflation on the goods side of the equation.
“The market is starting to sense that the very comforting disinflation story is more complex than we would like it to be,” Mohamed El-Erian, Allianz chief economic advisor, told CNBC’s “Squawk Box” on Monday morning. “The comforting story was simple: Goods disinflation continues and service inflation comes down, that wonderful concept that Chair Powell calls core services, ex-housing, comes down and, lo and behold, we don’t have an inflation problem. Now we’re starting to see certain goods reverse this inflationary process so there’s more uncertainty about inflation.”
Some shippers are holding their products in containers on chassis because of full warehouses and distribution centers, but this means they’re incurring charges which are passed on to the consumer. Shippers are given an allotted amount of free time during which they are not charged for holding a container, but once those days expire, they start to be charged per diem charges (i.e., late container charges that are charged for containers out of port).
Containers left on chassis create two costly problems, said Paul Brashier, vice president of drayage and intermodal for ITS Logistics. It prevents those chassis from being used to move newly arriving containers, putting additional stress on chassis pools throughout the U.S., especially inland rail ramp pools. Shippers will also be charged fees for the dwelling chassis — separate from the per diem charge shippers pay per day once the container is out of use beyond its free time. “This can lead to tens of millions of dollars in penalties,” Brashier said.
He predicts that per diem charges are going to surge in the second and third quarters of this year.
“These are on top of charges for warehousing, which are still at historic highs,” Brashier said. “Late fees and warehouse fees are passed onto the consumer, which is why we are not seeing products fall as much as they should.”
Shipping containers at a container terminal at the Port of Long Beach-Port of Los Angeles complex, in Los Angeles, California, April 7, 2021.
Lucy Nicholson | Reuters
National storage pricing is up 1.4% month-over-month and 10.6% year-over-year, according to WarehouseQuote.
Many small businesses, which represent the largest share of the U.S. economy in number but are often the last to benefit from a decline in supply chain pricing, tell CNBC they do not believe inflation has peaked.
For shippers with inventory imbalances, Brashier says these charges could cost tens of millions of dollars per quarter. Brashier warns these charges, on top of weaker consumer demand, will ripple through earnings.
ITS Logistics is advising clients to avoid a hit to their bottom line by considering short-term, pop-up storage offered by third-party logistics providers, or 3PL, and grounding operations. “This will reduce reliance on storing freight in ocean containers,” Brashier said.
3PL providers include C.H. Robinson, Expeditors, UPS Supply Chain Solutions, Kuehne + Nagel (Americas), J.B. Hunt, XPO Logistics, GXO Logistics, Uber Freight, and DHL Supply Chain (North America).
Mark Baxa, president and CEO of the Council of Supply Chain Management Professionals, tells CNBC that inflation and higher interest rates are driving supply chain leaders to critically examine working capital investments in inventory and operations in relation to consumer demand forecasts.
“In the short run, supply chains have moved closer to finance teams to manage cash flow, coupled with greater efforts to manage costs across operations. Considerations have moved to close-in review and total cost management across the business, including people, technology, warehousing and transportation investments,” Baxa said.
One industry facing supply chain inflationary headwinds is construction.
Phillip Ross, accounting and audit practice leader of Anchin’s architecture and engineering group, said supply chain inflation has made it more difficult for companies to manage completion times for projects.
“In some cases, we are looking at six to eight months before materials will be available,” Ross said. “Construction, as one of the largest industries in the U.S., is uniquely impacted by the supply chain, which led to construction companies experiencing not only delays in their work but also increased prices for materials.”
Some inflationary elements stemming from Covid-related supply chain disruptions remain, according to Jim Monkmeyer, president of transportation at DHL Supply Chain. These include higher costs related to diversion of containers to East Coast ports, production disruptions and shortages in China and elsewhere, and intermodal constraints forcing higher cost alternatives, such as air freight and expedited truck.
Even with the rate of inflation slowing, higher consumer prices are expected to remain for a variety of other reasons, from contract terms set with suppliers before recent disinflation and company desire to maintain profit margins.
Steve Lamar, CEO of the American Apparel and Footwear Association, tells CNBC that shippers are also finding it harder to absorb extra costs as a result of the Trump-Biden tariffs on China. “These tariffs are now hitting $170 billion and are baked into the cost of goods and, hence, higher prices at the register,” Lamar said. “The tariffs make it harder for companies to absorb other inflationary costs.”
[ad_2]
[ad_1]
Royal Caribbean Group
did better than anticipated in the fourth quarter, turning in a narrower-than-expected loss and saying bookings were nearing record highs at higher prices.
The stock surged more than 6% in early trading Tuesday. It is now up close to 50% so far in 2023.
[ad_2]
[ad_1]
Rising temperatures offered some hope Friday for frustrated Texans days after they lost power — and in many cases heat — in a deadly winter storm, while a new wave of frigid weather rolling into the Northeast led communities to close schools and open warming centers.
Wind chills in some higher elevations of the Northeast could punch below minus 50º (minus 45º Celsius) as an Arctic front swept in from Canada, forecasters said.
“Some of the most extreme weather was expected atop New Hampshire’s Mount Washington, the Northeast’s highest peak, where winds gusted to nearly 100 miles per hour and wind chills could reach minus 100º Fahrenheit. ”
In Texas, officials in Austin compared damage from fallen trees and iced-over power lines to tornadoes as they came under criticism for slow repairs and shifting timelines to restore power. More than 240,000 customers across the state lacked power early Friday, down from 430,000 on Thursday, according to PowerOutage.us.
“Our heat source is our fireplace … and we’ve been in bed, snuggled up under like five or six blankets,” Edward Dahlke, of Spring Branch, southwest of Austin, told KSAT-TV. “Just think that our utility companies need to do a better job making sure our infrastructure is maintained properly.”
See: Frustrated Texans endure another icy winter storm with no power, heat
Pauline Frerich, also of Spring Branch, told KSAT that she had no way to prepare a meal without electricity, and that she worries about the cost of replacing hundreds of dollars of spoiled food. As the storm swept over this week, the indoor temperature fell to 29 degrees (-1 Celsius), and the sounds of tree limbs breaking unsettled her.
“And you didn’t know, was it on the roof, was it just in the yard?” Frerich told KSAT. “But it’s very nerve-wracking.”
Power failures were most widespread in Austin. Impatience rose there among nearly 123,000 customers days after the electricity first went out.
Thursday night, officials backtracked on early estimates that power would be fully restored by Friday evening. Damage was worse than originally calculated, they said, and they could no longer provide an estimate.
“The city let its citizens down. The situation is unacceptable to the community, and it’s unacceptable to me,” Austin Mayor Kirk Watson, a Democrat, said at a news conference Friday. “And I’m sorry.”
The outages recalled the 2021 blackouts in Texas, when hundreds of people died after the state’s power grid was pushed to the brink of total failure because of a lack of generation. There have been no reports of deaths from this week’s power outages, though the storm and freeze have been blamed for at least 12 traffic fatalities on slick roads in Texas, Arkansas and Oklahoma.
In New England, temperatures began plunging Friday morning.
“The worst part of the upcoming cold snap is going to be the wind,” which has already topped 80 mph (129 kph) in higher elevations, said National Weather Service lead forecaster Bob Oravec. Frigid wind chills — the combined effect of wind and cold air on exposed skin — are expected Saturday.
The worst wind chills in the populated areas of the Northeast shouldn’t go lower than minus 40º (minus 40º Celsius), he said.
Wind gusts as high as 40 mph raised the prospect of power outages in Maine, and communities began opening warming stations.
Even cold-weather sports were curtailed. Some ski resorts scaled back operations, eliminating night skiing and reducing lift operations. A popular weekend pond hockey tournament was postponed, and the National Toboggan Championship pushed Saturday’s races back by a day.
Schools closed Friday in Boston and in Manchester, New Hampshire’s largest city. “In these conditions, frostbite can develop in as little as 30 minutes,” an announcement on the Manchester district’s website read. “This is simply too cold for students who walk home.”
Some of the most extreme weather was expected atop New Hampshire’s Mount Washington, the Northeast’s highest peak and home to a weather observatory, where winds gusted to nearly 100 mph (160 kph) and wind chills could reach minus 100 (minus 73 Celsius).
The system is expected to move out of the region Sunday.
[ad_2]
[ad_1]
Press play to listen to this article
Voiced by artificial intelligence.
BERLIN — Germany and its European partners plan to “quickly” send two Leopard 2 tank battalions to Ukraine — suggesting about 80 vehicles — the government in Berlin announced Wednesday, adding that Germany would provide one company of 14 Leopard 2 A6 tanks “as a first step.”
Other countries likely to send Leopards to the war against Russia include Poland, Spain, Norway and Finland.
The decision by Chancellor Olaf Scholz — which emerged on Tuesday evening — marks a decisive moment in Western support for Ukraine in its fight against Russian aggression, which entered its 12th month this week and could soon heat up further as Moscow is expected to launch a new offensive.
German Defense Minister Boris Pistorius told reporters that the training of Ukrainian crews on the tanks will begin “very soon,” and that the Leopards will be arriving in Ukraine in about two months.
Ukrainian President Volodymyr Zelenskyy said he was “very happy” with the promise of tanks from the U.S., Germany and Britain. “But speaking frankly, the number of tanks and the delivery time to Ukraine is critical,” he said, in an interview with Sky News.
Andriy Yermak, the head of Zelenskyy’s office, welcomed the German announcement as a “first step.”
“Leopards are very much needed,” he said on Telegram.
Zelenskyy himself also welcomed the move on Twitter. “Sincerely grateful to the Chancellor and all our friends in” Germany, he said.
Russia’s Ambassador to Germany Sergei Nechaev said in a statement the decision was “extremely dangerous,” and took the conflict “to a new level of confrontation.”
Kyiv had long urged Germany and other partners to supply its army with the powerful German-built Leopard 2 tank, but Scholz hesitated to take the decision, partly out of concern that it could drag Germany or NATO into the conflict. He remained adamant that such a move had to be closely coordinated and replicated by Western allies, most notably the United States.
During a speech in Germany’s parliament on Wednesday, Scholz sought to defend his long hesitations on tank deliveries, saying that it “was right and it is right that we did not allow ourselves to be rushed” into taking a decision but insisted “on this close cooperation” with allies, notably the United States.
Scholz also stressed that Germany would not actively engage in the war but would continue to seek to “prevent an escalation between Russia and NATO.” He also launched a direct appeal to German citizens who might be skeptical: “Trust me, trust the German government: We will continue to ensure … that this support is provided without the risks for our country rising in the wrong direction.”
The news of an imminent announcement by U.S. President Joe Biden to send “a significant number” of American M1 Abrams tanks to Ukraine facilitated the chancellor’s decision. Scholz had come under huge pressure from European partners like Poland, as well as his own coalition partners in government, to no longer block the delivery of the German tank. Since they are German-made, their re-export needed the approval of the German government.
“The goal is to quickly form two tank battalions with Leopard 2 tanks for Ukraine,” a German government spokesperson said.
“As a first step, Germany will provide a company of 14 Leopard-2 A6 tanks from Bundeswehr stocks. Other European partners will also hand over Leopard-2 tanks,” the spokesperson added.
The spokesperson also said the training of Ukrainian crews on the tanks “is to begin rapidly in Germany.” Berlin would also provide “logistics, ammunition and maintenance of the systems.”
In addition to the 14 Leopard 2A6 tanks, Germany will also send two tank recovery vehicles, Deputy Defense Minister Siemtje Möller said in a letter to defense policy lawmakers, seen by POLITICO.
Möller wrote that Ukrainian tank crews will undergo a six-week-training on the Leopards, in Germany which is supposed to start in early February. “This procedure should enable the Leopard 2 A6 to be taken over by Ukraine by the end of the first quarter of 2023.”
Germany will provide partner countries like Spain, Poland, Finland and Norway, which “want to quickly deliver Leopard-2 tanks from their stocks,” the necessary re-export permission, the spokesperson said.
NATO Secretary-General Jens Stoltenberg tweeted that he “strongly welcomes” Berlin’s decision. “At a critical moment in Russia’s war, these can help Ukraine to defend itself, win & prevail as an independent nation.”
Spain, which owns one of the largest fleets of Leopards in the EU, with 347 tanks, has previously said it would send tanks to Kyiv as part of a European coalition, according to El País.
The Norwegian government is considering sending eight of its 36 Leopard tanks to Ukraine, but no decision has been made yet, Norwegian daily DN reported late Tuesday after a meeting of the parliamentary committee on foreign affairs and defense, quoting sources close to the deliberation.
Portugal, which has 37 Leopards, could provide four tanks to the assembling European coalition, a source close to the government told Correio da Manhã late on Tuesday.
The Netherlands, which is leasing 18 Leopards from Germany, is also weighing supplying some of their armored vehicles, Dutch newswire ANP reported, quoting a government spokesperson. On Tuesday, Dutch Prime Minister Mark Rutte said he was “willing to consider” buying the tanks from Germany and shipping them to Ukraine, but that no decision had been made.
On Wednesday, the Swedish defense minister said that Sweden did not exclude sending some of its own tanks at a later stage, according to Swedish daily Svenska Dagbladet.
Wilhelmine Preussen and Zoya Sheftalovich contributed reporting.
This article was updated.
[ad_2]
Hans von der Burchard and Nicolas Camut
Source link
[ad_1]
After one of the worst years in Wall Street’s history, investors have some serious questions for companies. As holiday returns roll in — and with them, forecasts for the months or year ahead — many have the chance to answer those questions, or avoid them.
In the busiest week of the holiday-earnings season so far, three big names will take the stage on back-to-back-to-back afternoons. Here is what to expect:
Microsoft
MSFT,
shed $737 billion in market value last year, the third-most of any S&P 500 company, then announced plans to lay off some 10,000 workers this month. Previously a Wall Street darling thanks to the phenomenal growth of its Azure cloud-computing offering, Microsoft now faces a cutback in enterprise spending on cloud and other products, as companies seek to cut their bills after spending wantonly during the early years of the COVID-19 pandemic.
First Take: Big Tech layoffs are not as big as they appear at first glance
When the company announced layoffs, Chief Executive Satya Nadella admitted customers were cutting, saying “as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.” Analysts believe Azure may be holding up better than rivals, however, and will expect to hear about it when Microsoft results hit Tuesday afternoon.
“Our Azure checks were mixed, but generally better than public cloud sentiment that has turned highly negative over the past few months,” Mizuho analysts wrote. “More specifically, we have heard of increasing levels of optimization, but it is being partially offset by many organizations prioritizing digital transformation.”
From October: The cloud boom has hit its stormiest moment yet, and it is costing investors billions
As cloud growth slows down, expect Microsoft to point to the next big buzzword in tech: Artificial intelligence, specifically ChatGPT, the chatbot product developed by OpenAI, which Microsoft has invested heavily in and expects to incorporate into its products. D.A. Davidson analyst Gil Luria this month wrote that Microsoft’s investments in OpenAI would help it build out more AI technology, including in its search engine Bing.
Tesla
TSLA,
stock suffered a much larger percentage decline than Microsoft in 2022,as the electric-vehicle maker’s shares closed out their worst year on record with their worst quarter and month ever. After the year ended, Tesla began slashing prices in China and the U.S. in hopes of qualifying for more consumer tax incentives and reinvigorating demand, which could lead to questions about previously fat margins.
In-depth: Tesla investors await clues on demand, board actions and weigh downside risks in 2023
For Tesla, which reports fourth-quarter results Wednesday, the results will offer more context on production of the Cybertruck — currently set to start in the middle of the year — demand in China, competition and the impact of price cuts. Auto-information website Edmunds on Thursday said that Tesla’s decision to slash prices by as much as 20% in the U.S. and Europe led to a jump in interest in the vehicles.
While those cuts seem likely to hurt profit, Deutsche Bank analyst Emmanuel Rosner called it “a bold offensive move, which secures Tesla’s volume growth, puts its traditional and EV competitors in great difficulty, and showcases Tesla’s considerable pricing power and cost superiority.” And a survey from Wedbush analysts found that “76% of EV Chinese consumers are considering buying a Tesla in 2023.” But Toni Sacconaghi, an analyst at Bernstein, said Tesla needed more low-cost electric-vehicle offerings, which might not ship until 2025.
Tesla earnings preview: Price cuts in focus as stock hovers around 2-year low
With Tesla’s stock in the gutter, some analysts have raised the possibility of a share buyback to spur investor interest, and Chief Executive Elon Musk said such a plan was being discussed in the previous earnings call. Musk is not in great favor with many investors right now, however, following some heavy selling of Tesla shares in the wake of his purchase last year of Twitter, which some on Wall Street have said has distracted him from the needs of the auto maker. Musk’s tweets have landed him in trouble elsewhere: Opening arguments began last week for a trial centered on allegations that Musk put investors at risk when he tweeted in 2018 that he was “considering” taking Tesla private and had secured the money to do so.
‘He broke the stock’: Why a prominent Tesla investor wants Elon Musk to put him on the board
Intel’s
INTC,
questions were not fresh in 2022, as the chip maker for years has seen rivals like Advanced Micro Devices Inc.
AMD,
and Nvidia Corp.
NVDA,
challenge it in ways that would have been unthinkable in previous generations. Shares still dove more than 43% last year, as declining sales led to plans for $3 billion in cost cuts.
There’s little hope for a big rebound when Intel reports Thursday afternoon. Personal-computer sales have experienced their biggest year-over-year declines ever recorded, and Intel’s long-delayed new data-center offering that is meant to answer AMD’s challenge only began selling this year.
Opinion: The PC boom and bust is already ‘one for the record books,’ and it isn’t over
Intel CEO Pat Gelsinger, though, has a chance to lay out his vision for a long-term Intel rebound, as he attempts to make Intel a chip-manufacturing powerhouse again after years of struggles. He was forced to trim his annual outlook multiple times last year, so it will be important for him to provide attainable numbers this time, but without reducing hopes in the path forward.
Expectations remain low for fourth-quarter earnings season overall, with consumers squeezed by higher prices and interest rates, and hopes fading for any relief from the holiday shopping season. But even with a low bar, the fourth-quarter results from companies so far have been worse than the historical norm, with FactSet senior earnings analyst John Butters writing Friday that “the fourth-quarter earnings season for the S&P 500 is not off to a strong start.”
So far, 11% of S&P 500 companies have reported fourth-quarter results, with roughly one-third reporting earnings better than estimates, Butters reported. That’s lower than the 10-year average of 73%.
Still, Wall Street generally expects strong profit margins for companies in the S&P 500, as earlier price increases — which help businesses offset their own costs and test the limits of consumer demand — mix with more recent cost cuts.
For the week ahead, 93 companies in the S&P 500 index
SPX,
and 12 of the 30 Dow Jones Industrial Average
DJIA,
components, are set to report quarterly results.
Mark your calendars! Here is MarketWatch’s full earnings calendar for the week
Among the highlights: General Electric Co.
GE,
reports Tuesday for the first time since splitting off its GE HealthCare Technologies
GEHC,
business. 3M Co.
MMM,
— which makes Post-it Notes, duct tape, air filters, adhesives and coatings — also reports Tuesday, after the company in October said the costs of raw materials, a big driver of inflation, were showing signs of easing.
And as demand for goods eases amid worries about a downturn, a number of railroad operators that ship those goods report during the week. Union Pacific Corp.
UNP,
whose lines ship across the Western half of the U.S., reports on Tuesday, while CSX Corp.
CSX,
which covers much of the East, reports Wednesday. Norfolk Southern Corp.
NSC,
also reports Wednesday.
Telecom giants Verizon Communications Inc.
VZ,
AT&T Inc.
T,
and Comcast Corp.
CMCSA,
report Tuesday, Wednesday and Thursday, respectively. Results there will offer a clearer sense of the state of demand for Apple Inc.’s
AAPL,
iPhones, as premium models suffer from production snags, and for broadband, which saw heightened demand when more people were staying home due to the pandemic.
Southwest, post-meltdown: Southwest Airlines Co.
LUV,
which reports on Thursday, will offer executives with plenty to answer for, after bad weather and an overloaded, aging scheduling system caused thousands of flight cancellations over the holidays.
For more: Southwest Airlines turns to repairing its reputation after holiday meltdown
The implosion has raised questions about the air carrier’s investments in its own technology — after restarting dividend payments shortly before the disruptions — and airlines’ ability to handle the post-lockdown travel rebound. The breakdown has underscored the airline industry’s bigger issues with understaffing, after 2020’s wave of departures, as carriers try to reload flight schedules to meet pent-up travel demand.
Scott Kirby, chief executive at United Airlines Holdings Inc.
UAL,
said during his company’s earnings call last week that he felt the industry’s goals to expand their flight coverage this year and beyond were “simply unachievable.” And he said that airlines that tried to follow prepandemic patterns were destined to face trouble. He said manufacturers were suffering from delays in building jets, engines and other parts, and that airlines had outgrown their technology infrastructure.
For more: United Airlines swings to profit despite ‘worst’ winter storm’
“All of us, airlines and the FAA, lost experienced employees and most didn’t invest in the future,” he said. “That means the system simply can’t handle the volume today, much less the anticipated growth.”
American Airlines Group Inc.
AAL,
Alaska Air Group Inc.
ALK,
and JetBlue Airways Corp.
JBLU,
are also expected to report results Thursday morning, along with Southwest.
Visa, Mastercard and consumer spending: The return of travel and entertainment, along with rising prices, have helped prop up consumer spending. But as Visa Inc.
V,
Mastercard Inc.
MA,
American Express Co.
AXP,
and Capital One Financial Corp.
COF,
prepare to report, their finance-industry counterparts are getting nervous — and taking more steps to pad themselves against the fallout from consumers struggling to pay their bills.
Credit-card issuer Capital One reports results on Tuesday, while card payments-network providers Visa and Mastercard report on Thursday, with Amex on Friday morning. They’ll report after shares of Discover Financial Services
DFS,
got hit last week after the company, which also offers credit cards and loans, set aside more money to cover souring credit, and reported a bump in its net charge-off rate — a measure of debt a company thinks is unlikely to be recovered.
Larger banks, like JPMorgan Chase & Co.
JPM,
have also set aside more money to guard against credit losses.
[ad_2]
[ad_1]
After one of the worst years in Wall Street’s history, investors have some serious questions for companies. As holiday returns roll in — and with them, forecasts for the months or year ahead — many have the chance to answer those questions, or avoid them.
In the busiest week of the holiday-earnings season so far, three big names will take the stage on back-to-back-to-back afternoons. Here is what to expect:
Microsoft
MSFT,
shed $737 billion in market value last year, the third-most of any S&P 500 company, then announced plans to lay off some 10,000 workers this month. Previously a Wall Street darling thanks to the phenomenal growth of its Azure cloud-computing offering, Microsoft now faces a cutback in enterprise spending on cloud and other products, as companies seek to cut their bills after spending wantonly during the early years of the COVID-19 pandemic.
First Take: Big Tech layoffs are not as big as they appear at first glance
When the company announced layoffs, Chief Executive Satya Nadella admitted customers were cutting, saying “as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.” Analysts believe Azure may be holding up better than rivals, however, and will expect to hear about it when Microsoft results hit Tuesday afternoon.
“Our Azure checks were mixed, but generally better than public cloud sentiment that has turned highly negative over the past few months,” Mizuho analysts wrote. “More specifically, we have heard of increasing levels of optimization, but it is being partially offset by many organizations prioritizing digital transformation.”
From October: The cloud boom has hit its stormiest moment yet, and it is costing investors billions
As cloud growth slows down, expect Microsoft to point to the next big buzzword in tech: Artificial intelligence, specifically ChatGPT, the chatbot product developed by OpenAI, which Microsoft has invested heavily in and expects to incorporate into its products. D.A. Davidson analyst Gil Luria this month wrote that Microsoft’s investments in OpenAI would help it build out more AI technology, including in its search engine Bing.
Tesla
TSLA,
stock suffered a much larger percentage decline than Microsoft in 2022,as the electric-vehicle maker’s shares closed out their worst year on record with their worst quarter and month ever. After the year ended, Tesla began slashing prices in China and the U.S. in hopes of qualifying for more consumer tax incentives and reinvigorating demand, which could lead to questions about previously fat margins.
In-depth: Tesla investors await clues on demand, board actions and weigh downside risks in 2023
For Tesla, which reports fourth-quarter results Wednesday, the results will offer more context on production of the Cybertruck — currently set to start in the middle of the year — demand in China, competition and the impact of price cuts. Auto-information website Edmunds on Thursday said that Tesla’s decision to slash prices by as much as 20% in the U.S. and Europe led to a jump in interest in the vehicles.
While those cuts seem likely to hurt profit, Deutsche Bank analyst Emmanuel Rosner called it “a bold offensive move, which secures Tesla’s volume growth, puts its traditional and EV competitors in great difficulty, and showcases Tesla’s considerable pricing power and cost superiority.” And a survey from Wedbush analysts found that “76% of EV Chinese consumers are considering buying a Tesla in 2023.” But Toni Sacconaghi, an analyst at Bernstein, said Tesla needed more low-cost electric-vehicle offerings, which might not ship until 2025.
Tesla earnings preview: Price cuts in focus as stock hovers around 2-year low
With Tesla’s stock in the gutter, some analysts have raised the possibility of a share buyback to spur investor interest, and Chief Executive Elon Musk said such a plan was being discussed in the previous earnings call. Musk is not in great favor with many investors right now, however, following some heavy selling of Tesla shares in the wake of his purchase last year of Twitter, which some on Wall Street have said has distracted him from the needs of the auto maker. Musk’s tweets have landed him in trouble elsewhere: Opening arguments began last week for a trial centered on allegations that Musk put investors at risk when he tweeted in 2018 that he was “considering” taking Tesla private and had secured the money to do so.
‘He broke the stock’: Why a prominent Tesla investor wants Elon Musk to put him on the board
Intel’s
INTC,
questions were not fresh in 2022, as the chip maker for years has seen rivals like Advanced Micro Devices Inc.
AMD,
and Nvidia Corp.
NVDA,
challenge it in ways that would have been unthinkable in previous generations. Shares still dove more than 43% last year, as declining sales led to plans for $3 billion in cost cuts.
There’s little hope for a big rebound when Intel reports Thursday afternoon. Personal-computer sales have experienced their biggest year-over-year declines ever recorded, and Intel’s long-delayed new data-center offering that is meant to answer AMD’s challenge only began selling this year.
Opinion: The PC boom and bust is already ‘one for the record books,’ and it isn’t over
Intel CEO Pat Gelsinger, though, has a chance to lay out his vision for a long-term Intel rebound, as he attempts to make Intel a chip-manufacturing powerhouse again after years of struggles. He was forced to trim his annual outlook multiple times last year, so it will be important for him to provide attainable numbers this time, but without reducing hopes in the path forward.
Expectations remain low for fourth-quarter earnings season overall, with consumers squeezed by higher prices and interest rates, and hopes fading for any relief from the holiday shopping season. But even with a low bar, the fourth-quarter results from companies so far have been worse than the historical norm, with FactSet senior earnings analyst John Butters writing Friday that “the fourth-quarter earnings season for the S&P 500 is not off to a strong start.”
So far, 11% of S&P 500 companies have reported fourth-quarter results, with roughly one-third reporting earnings better than estimates, Butters reported. That’s lower than the 10-year average of 73%.
Still, Wall Street generally expects strong profit margins for companies in the S&P 500, as earlier price increases — which help businesses offset their own costs and test the limits of consumer demand — mix with more recent cost cuts.
For the week ahead, 93 companies in the S&P 500 index
SPX,
and 12 of the 30 Dow Jones Industrial Average
DJIA,
components, are set to report quarterly results.
Mark your calendars! Here is MarketWatch’s full earnings calendar for the week
Among the highlights: General Electric Co.
GE,
reports Tuesday for the first time since splitting off its GE HealthCare Technologies
GEHC,
business. 3M Co.
MMM,
— which makes Post-it Notes, duct tape, air filters, adhesives and coatings — also reports Tuesday, after the company in October said the costs of raw materials, a big driver of inflation, were showing signs of easing.
And as demand for goods eases amid worries about a downturn, a number of railroad operators that ship those goods report during the week. Union Pacific Corp.
UNP,
whose lines ship across the Western half of the U.S., reports on Tuesday, while CSX Corp.
CSX,
which covers much of the East, reports Wednesday. Norfolk Southern Corp.
NSC,
also reports Wednesday.
Telecom giants Verizon Communications Inc.
VZ,
AT&T Inc.
T,
and Comcast Corp.
CMCSA,
report Tuesday, Wednesday and Thursday, respectively. Results there will offer a clearer sense of the state of demand for Apple Inc.’s
AAPL,
iPhones, as premium models suffer from production snags, and for broadband, which saw heightened demand when more people were staying home due to the pandemic.
Southwest, post-meltdown: Southwest Airlines Co.
LUV,
which reports on Thursday, will offer executives with plenty to answer for, after bad weather and an overloaded, aging scheduling system caused thousands of flight cancellations over the holidays.
For more: Southwest Airlines turns to repairing its reputation after holiday meltdown
The implosion has raised questions about the air carrier’s investments in its own technology — after restarting dividend payments shortly before the disruptions — and airlines’ ability to handle the post-lockdown travel rebound. The breakdown has underscored the airline industry’s bigger issues with understaffing, after 2020’s wave of departures, as carriers try to reload flight schedules to meet pent-up travel demand.
Scott Kirby, chief executive at United Airlines Holdings Inc.
UAL,
said during his company’s earnings call last week that he felt the industry’s goals to expand their flight coverage this year and beyond were “simply unachievable.” And he said that airlines that tried to follow prepandemic patterns were destined to face trouble. He said manufacturers were suffering from delays in building jets, engines and other parts, and that airlines had outgrown their technology infrastructure.
For more: United Airlines swings to profit despite ‘worst’ winter storm’
“All of us, airlines and the FAA, lost experienced employees and most didn’t invest in the future,” he said. “That means the system simply can’t handle the volume today, much less the anticipated growth.”
American Airlines Group Inc.
AAL,
Alaska Air Group Inc.
ALK,
and JetBlue Airways Corp.
JBLU,
are also expected to report results Thursday morning, along with Southwest.
Visa, Mastercard and consumer spending: The return of travel and entertainment, along with rising prices, have helped prop up consumer spending. But as Visa Inc.
V,
Mastercard Inc.
MA,
American Express Co.
AXP,
and Capital One Financial Corp.
COF,
prepare to report, their finance-industry counterparts are getting nervous — and taking more steps to pad themselves against the fallout from consumers struggling to pay their bills.
Credit-card issuer Capital One reports results on Tuesday, while card payments-network providers Visa and Mastercard report on Thursday, with Amex on Friday morning. They’ll report after shares of Discover Financial Services
DFS,
got hit last week after the company, which also offers credit cards and loans, set aside more money to cover souring credit, and reported a bump in its net charge-off rate — a measure of debt a company thinks is unlikely to be recovered.
Larger banks, like JPMorgan Chase & Co.
JPM,
have also set aside more money to guard against credit losses.
[ad_2]
[ad_1]
Wall Street’s biggest bank CEOs, from Jamie Dimon at JPMorgan to Brian Moynihan at Bank of America, were talking a recession as the “base case” as part of earnings reports on Friday morning.
It might be a “mild” one, as Moynihan predicts, but from the world of global trade, there are several indicators backing up the bank chiefs’ view of the macroeconomic landscape, flashing warning signals of continued consumer weakness for the first quarter.
The flow of trade is a real-time and forward-looking indicator of consumer spending and the economy because it shows supply, demand, and consumption. Here are four indicators to watch and what they are currently showing.
Warehouse inventory is a good indicator of the health of the consumer because it gauges how much product is sitting in storage. The more product sitting in storage, the more it takes up valuable space and increases the price of storage. According to WarehouseQuote’s Warehouse Pricing Index report for Q1 2023, warehouse rates remain at high levels as a result of warehouse inventories not coming down significantly in November and December.
This is significant because holiday items were brought in early in 2022 to avoid any delays as shippers saw in 2021. Holiday products were shipped from China to the U.S. between March and May of 2022, leading to increased storage in a warehouse, and that resulted in some massive inventory pileups during the summer from the biggest retailers including Walmart and Target. During the holiday season, it took hefty markdowns from retailers to move products. Where products were being moved more successfully was through internet-based sales.
“Based on the inventory, we see more consumers purchased online rather than in-store,” said Jordan Brunk, chief marketing officer of WarehouseQuote.com. “We had more e-commerce inventory from the warehouse than inventory heading to the brick-and-mortar stores.”
Overall, it expects the lack of warehouse capacity, combined with the lack of new square footage coming online due to the rising cost of capital and slower economy, to keep prices elevated even in a weaker consumer environment.
In Maersk‘s TransPacific Report at the end of December, it said weak demand was “expected to continue into 2023 due to a combination of high inventory levels and the likelihood of a global recession that could already be underway.”
The first indicator is manufacturing orders. Orders continue to be down, based on CNBC reporting, with the high inventories and a lack of consumer demand.
“We are still seeing a 40% drop in current manufacturing orders,” said Alan Baer, CEO of OL USA. “The first quarter is going to be challenging.”
The decrease in orders is based on what the factories normally receive from companies.
As a result of the decrease in factory orders, there is less demand to book freight on a vessel. The SONAR Freightwaves chart below shows the steady decrease in global ocean orders.
The health of the U.S. consumer and the state of inventories for U.S. companies can be tracked by the amount of global product being brought in by ocean carriers. Ninety percent of all U.S. trade is moved on the ocean. The following chart from SONAR FreightWaves shows the diminished volumes on a global basis.
Blank sailings are a tool used by ocean carriers as a way to artificially constrict available vessel capacity which influences ocean freight rates. As a result of the drop in manufacturing orders and ocean orders, there are too many ships. Because of the lack of demand for the movement of ocean freight, due to the reduced manufacturing orders, ocean rates have precipitously dropped in all trade routes.
According to Xeneta and Sea-Intelligence, ocean carriers canceled more than six times the number of sailings on Asia to the U.S. West Coast trade route ahead of the Chinese New Year than they did during the same time frame in 2019.
“In a normal year, we tend to see very few blanked sailings in the run-up to this major Chinese holiday as shippers stock up on their inventories,” said Peter Sand, chief analyst at Xeneta. “So, this is a worrying development for carriers and, no doubt, a bad omen of what’s to come for the year ahead.”
Canceled sailings on the other leading trade routes also are elevated. The Far East to the U.S. East Coast skyrocketed by 340% over the same time period. Asia to North Europe has had a 715% increase in blanked sailings.
“This really demonstrates the low level of demand gripping the industry,” Sand said.
[ad_2]
[ad_1]
This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.
Below is a list of the 20 stocks in the S&P 500
SPX,
that have declined the most in 2022.
First, here’s how the 11 sectors of the benchmark index have performed this year:
| S&P 500 sector | 2022 price change | Forward P/E | Forward P/E as of Dec. 31, 2021 |
| Energy | 57.8% | 9.6 | 11.1 |
| Utilities | -0.5% | 18.8 | 20.4 |
| Consumer Staples | -2.7% | 20.9 | 21.8 |
| Healthcare | -3.2% | 17.4 | 17.2 |
| Industrials | -6.7% | 18.0 | 20.8 |
| Financials | -12.1% | 11.7 | 14.6 |
| Materials | -13.4% | 15.6 | 16.6 |
| Real Estate | -27.7% | 16.2 | 24.2 |
| Information Technology | -28.8% | 19.6 | 28.1 |
| Consumer Discretionary | -37.4% | 20.7 | 33.2 |
| Communication Services | -40.4% | 14.0 | 20.8 |
| S&P 500 | -19.2% | 16.5 | 21.4 |
| Source: FactSet | |||
The energy sector has been the only one to show a gain in 2022, and it has been a whopper, even as West Texas Intermediate crude oil
CL.1,
has given up most of its gains from earlier in the year. Here’s why investors are still confident in the supply/demand setup for oil and energy stocks.
Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc.
TSLA,
and Amazon.com Inc.
AMZN,
which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc.
META,
along with Match Group Inc.
MTCH,
which is down 69% for 2022, and Netflix Inc.
NFLX,
which is down 52% this year.
There have been many reasons easy to cite for Big Tech’s decline, such as a questionable change in strategy for Facebook’s holding company, Meta, as CEO Mark Zuckerberg has put so much of the company’s resources into developing a new world that most people don’t wish to enter, at least yet. Meta’s shares were down 64% for 2022 through Dec. 29.
You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500
SPX,
traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively. So Tesla no longer appears to be a very expensive stock, especially for a company that increased its vehicle deliveries by 42% in the third quarter from a year earlier.
Analysts polled by FactSet expect Tesla’s stock to double during 2023. It nearly made this list of 20 EV stocks expected to rebound the most in 2023.
Here are the 20 stocks in the S&P 500 that fell the most for 2022 through the close on Dec. 29.
| Company | Ticker | 2022 price change | Forward P/E | Forward P/E as of Dec. 32, 2021 |
| Generac Holdings Inc. |
GNRC, |
-71.4% | 13.7 | 30.2 |
| Match Group Inc. |
MTCH, |
-68.9% | 20.1 | 48.5 |
| Align Technology Inc. |
ALGN, |
-67.7% | 27.4 | 48.7 |
| Tesla Inc. |
TSLA, |
-65.4% | 21.7 | 120.3 |
| SVB Financial Group |
SIVB, |
-65.4% | 10.8 | 23.0 |
| Catalent Inc. |
CTLT, |
-64.6% | 13.0 | 32.5 |
| Meta Platforms Inc. Class A |
META, |
-64.2% | 14.7 | 23.5 |
| Signature Bank |
SBNY, |
-64.1% | 6.2 | 18.6 |
| PayPal Holdings Inc. |
PYPL, |
-62.6% | 14.8 | 36.0 |
| V.F. Corp. |
VFC, |
-62.5% | 11.9 | 20.4 |
| Warner Bros. Discovery Inc. Series A |
WBD, |
-59.9% | N/A | 7.5 |
| Carnival Corp. |
CCL, |
-59.8% | 38.1 | N/A |
| Stanley Black & Decker Inc. |
SWK, |
-59.8% | 17.0 | 15.9 |
| Lumen Technologies Inc. |
LUMN, |
-57.8% | 7.7 | 7.8 |
| Zebra Technologies Corp. Class A |
ZBRA, |
-56.7% | 14.5 | 30.1 |
| Dish Network Corp. Class A |
DISH, |
-56.5% | 8.6 | 10.9 |
| Caesars Entertainment Inc. |
CZR, |
-55.7% | 51.4 | 144.5 |
| Lincoln National Corp. |
LNC, |
-55.1% | 3.4 | 6.2 |
| Advanced Micro Devices Inc. |
AMD, |
-55.0% | 17.8 | 43.1 |
| Seagate Technology Holdings PLC |
STX, |
-53.1% | 15.0 | 12.4 |
| Source: FactSet | ||||
Click on the tickers for more information about the companies.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
It is one thing to have a large decline based on the share price, but that doesn’t tell the entire story. How much of a decline have investors seen in the holdings of their shares during the year? The S&P 500’s total market capitalization declined to $31.66 trillion as of Dec. 28 (the most recent figure available) from $40.36 trillion at the end of 2021, according to FactSet.
Shareholders of these companies have suffered the largest declines in market cap during 2022.
| Company | Ticker | 2022 market capitalization change ($bil) | 2022 price change |
| Apple Inc. |
AAPL, |
-$851 | -27.0% |
| Amazon.com Inc. |
AMZN, |
-$832 | -49.5% |
| Microsoft Corp. |
MSFT, |
-$728 | -28.3% |
| Tesla Inc. |
TSLA, |
-$677 | -65.4% |
| Meta Platforms Inc. Class A |
META, |
-$465 | -64.2% |
| Nvidia Corp. |
NVDA, |
-$376 | -50.3% |
| PayPal Holdings Inc. |
PYPL, |
-$141 | -62.6% |
| Netflix Inc. |
NFLX, |
-$138 | -51.7% |
| Walt Disney Co. |
DIS, |
-$123 | -43.7% |
| Salesforce Inc. |
CRM, |
-$118 | -47.8% |
| Source: FactSet | |||
So there is your surprise for today: Apple is this year’s biggest stock-market loser.
Don’t miss: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices
[ad_2]
[ad_1]
GRAND RAPIDS, Mich. (AP) — The co-leader of a plot to kidnap Michigan Gov. Gretchen Whitmer was sentenced Wednesday to 16 years in prison for conspiring to abduct the Democrat and blow up a bridge to ease an escape.
Adam Fox returned to federal court Tuesday, four months after he and Barry Croft Jr. were convicted of conspiracy charges at a second trial in Grand Rapids, Mich.
They were accused of being at the helm of a wild plot to whip up anti-government extremists just before the 2020 presidential election. Their arrest, as well as the capture of 12 others, was a stunning coda to a tumultuous year of racial strife and political turmoil in the U.S.
The government had pushed for a life sentence, saying Croft offered bomb-making skills and ideology while Fox was the “driving force urging their recruits to take up arms, kidnap the governor and kill those who stood in their way.”
But Judge Robert J. Jonker said that while Fox’s sentence was needed as a punishment and deterrent to future similar acts, the government’s request for life in prison is “not necessary to achieve those purposes.”
“It’s too much. Something less than life gets the job done in this case,” Jonker said, later adding that 16 years in prison “is still in my mind a very long time.”
In addition to the 16-year prison sentence, Fox will have to serve five years of supervised release.
Fox and Croft were convicted at a second trial in August, months after a different jury in Grand Rapids couldn’t reach a verdict but acquitted two other men. Croft, a trucker from Bear, Del., will be sentenced Wednesday.
Fox and Croft in 2020 met with like-minded provocateurs at a summit in Ohio, trained with weapons in Michigan and Wisconsin and took a ride to “put eyes” on Whitmer’s vacation home with night-vision goggles, according to evidence.
“People need to stop with the misplaced anger and place the anger where it should go, and that’s against our tyrannical … government,” Fox declared that spring, boiling over COVID-19 restrictions and perceived threats to gun ownership.
Whitmer wasn’t physically harmed. The FBI, which was secretly embedded in the group, broke things up by fall.
“They had no real plan for what to do with the governor if they actually seized her. Paradoxically, this made them more dangerous, not less,” Assistant U.S. Attorney Nils Kessler said in a court filing ahead of the hearing.
In 2020, Fox, 39, was living in the basement of a Grand Rapids–area vacuum shop, the site of clandestine meetings with members of a paramilitary group and an undercover FBI agent. His lawyer said he was depressed, anxious and smoking marijuana daily.
Christopher Gibbons said a life sentence would be extreme.
Fox was regularly exposed to “inflammatory rhetoric” by FBI informants, especially Army veteran Dan Chappel, who “manipulated not only Fox’s sense of ‘patriotism’ but also his need for friendship, acceptance and male approval,” Gibbons said in a court filing.
He said prosecutors had exaggerated Fox’s capabilities, saying he was poor and lacked the capability to obtain a bomb and carry out the plan.
Two men who pleaded guilty to conspiracy and testified against Fox and Croft received substantial breaks: Ty Garbin already is free after a 2½-year prison term, while Kaleb Franks was given a four-year sentence.
AP/Carlos Osorio/File
In state court, three men recently were given lengthy sentences for assisting Fox earlier in the summer of 2020. Five more are awaiting trial in Antrim County, where Whitmer’s vacation home is located.
When the plot was extinguished, Whitmer, a Democrat, blamed then-President Donald Trump, saying he had given “comfort to those who spread fear and hatred and division.” In August, 19 months after leaving office, Trump said the kidnapping plan was a “fake deal.”
[ad_2]