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Politics

High Pennsylvania Republican Vows to Assessment 2020 Election Outcomes

The top Republican in the Pennsylvania State Senate promised this week to carry out a broad review of the 2020 election results, a move that comes as G.O.P. lawmakers continue to sow doubts about the contest’s legitimacy by pushing to re-examine votes in battleground states like Arizona.

State Senator Jake Corman, who serves as president pro tempore of the G.O.P.-controlled chamber, made the comments in an interview with a right-wing radio host, and they were first reported by The Philadelphia Inquirer on Tuesday. His remarks were the strongest sign yet that Pennsylvania — which President Biden won by more than 80,000 votes — may press forward with a review of 2020 results, despite no evidence of voter fraud that would have affected the outcome.

In the interview, Mr. Corman said that he wanted to begin “almost immediately” and that hearings would begin this week. He added that he expected to use the full power of the state’s General Assembly, including subpoenas, to conduct the review, which he referred to as a “forensic investigation.”

“We can bring people in, we can put them under oath, we can subpoena records, and that’s what we need to do and that’s what we’re going to do,” Mr. Corman said. “And so we’re going to move forward.”

Previously, State Senator Doug Mastriano, a Republican and vocal proponent of former President Donald J. Trump’s falsehoods about the election, had called for a review of results in three counties.

Until recently the chair of the Senate Intergovernmental Operations Committee, he sent letters requesting ballots, records and machines from Philadelphia County, which encompasses the state’s largest city and which Mr. Biden won with over 80 percent of the vote; York County, south of Harrisburg, which Mr. Trump won handily; and Tioga County, in the northern part of the state, which Mr. Trump also carried with ease. All three counties refused to comply, and Mr. Mastriano’s legal authority to enforce the requests remains unclear.

Last week, Mr. Corman removed Mr. Mastriano from his position as chair of the committee and installed State Senator Cris Dush, also a Republican, to lead the panel and oversee the review.

In the interview, Mr. Corman expressed his own doubts about the election.

“I don’t necessarily have faith in the results,” he said. “I think that there were many problems in our election that we need to get to the bottom of.”

Mr. Corman’s office did not respond to a request for comment.

Veronica Degraffenreid, who as the acting secretary of the commonwealth oversees Pennsylvania’s elections, has discouraged counties from participating in any election reviews, noting that any inspection of voting machines by uncredentialed third parties would result in their decertification, and that counties would have to bear the considerable costs of replacing the equipment.

“The Department of State encourages counties to refuse to participate in any sham review of past elections that would require counties to violate the trust of their voters and ignore their statutory duty to protect the chain of custody of their ballots and voting equipment,” Ms. Degraffenreid’s office said in a statement last month.

It remains unclear exactly how Mr. Corman and the Pennsylvania Senate will proceed with their review, including what they might seek in terms of equipment and records, and which counties they might focus on. Mr. Corman did say that, after talking with fellow legislators in Arizona, he was looking for a “neutral arbiter” to help carry out the review — a potential nod to how the Maricopa County review became widely ridiculed in part because the chief executive of the company carrying out the re-examination had promoted conspiracy theories about rigged voting machines costing Mr. Trump victory in the state.

“I think it’s important that we get people involved that don’t have ties to anybody, that are professional, that will do the job so that we can stand behind the results,” Mr. Corman said.

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Politics

Trump pushed DOJ to overturn 2020 election outcomes: Home panel

Then-President Donald Trump put pressure on his new acting attorney general to overturn the 2020 vote, telling him, “Just say the election was corrupt + leave the rest to me and the R. Congressmen,” it says a phone call that was posted on Friday to a House Committee.

Trump also suggested he consider replacing the Justice Department leadership, according to the records of then-Assistant Attorney General Richard Donoghue, who called on Dec. 27.

Donoghue’s report on the call shows that Trump “directly directed our nation’s chief law enforcement agency to take steps to overturn a free and fair election in the final days of his presidency,” said House Oversight and Reform Committee Chair Carolyn Maloney, DN.Y in a press release.

The committee has already started scheduling witness interviews “to investigate the full extent of the former president’s corruption,” Maloney said.

Donoghue’s notes do not specify which Republican lawmaker Trump was referring to to overthrow Joe Biden’s victory. But Trump mentioned GOP representatives Jim Jordan from Ohio, Scott Perry from Pennsylvania, and Senator Ron Johnson from Wisconsin elsewhere on the call.

Jordan spokesman Russell Dye told CNBC in a statement that the congressman “has not pressured anyone in the Justice Department about the 2020 election, has not pressured them,” and that he “continues to agree with President Trump that it is perfectly.” is appropriate to raise concerns about electoral integrity. “

Johnson “had no discussions with President Trump about the DOJ questioning the election results,” said his spokeswoman Alexa Henning.

Chairwoman Carolyn Maloney, DN.Y., speaks during a House Oversight and Reform Committee hearing on DC statehood on Tuesday, February 11, 2020.

Caroline Brehman | CQ name call | Getty Images

The notes also show that Rosen and Donoghue are trying to inform Trump that his claims of widespread electoral fraud are not supported by evidence. Just four days before the call, Rosen became Trump’s incumbent AG after the resignation of William Barr.

“Much of the information you are receiving is inaccurate,” the phone notes shared with Trump said.

Later in the conversation, Trump claimed, “These people who say the elections are not corrupt are corrupt,” the notes read.

A Trump spokeswoman did not immediately respond to CNBC’s request to comment on the committee’s release. A Perry spokesman also did not immediately respond to a request for comment.

Trump has never admitted defeat to Biden. After his loss, Trump aggressively spread a wide range of baseless conspiracy theories in support of the false claim that the elections were rigged against him.

His lawyers and allies filed dozens of lawsuits in key states, all aimed at undoing Biden’s victory. No one was able to reverse the votes or change the results of the state elections.

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Donoghue’s notes are just the latest material House investigators have held up as evidence of Trump’s efforts to rely on government institutions to contest his electoral defeat.

Last month, Maloney’s committee dumped more than 200 pages of emails between DOJ officials and White House staff allegedly attempting to ask the Supreme Court to overturn major state election results.

Earlier this week, the DOJ announced former Trump administration officials that they would be able to partner with House and Senate investigations into Trump’s election reversal efforts in the final months of his only term in office.

Maloney’s committee has sent letters to Rosen and Donoghue asking them to appear for transcribed interviews. The panel has also asked former White House Chief of Staff Mark Meadows, former Assistant Attorney General Jeffrey Clark, former Assistant Attorney General Patrick Hovakimian, former U.S. Attorney for the Northern District of Georgia Byung Jin Pak, and former Acting U.S. Attorney General Prosecutor for interviewing District Bobby Christine.

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Health

Quidel recollects Lyra Covid take a look at attributable to excessive threat of false detrimental outcomes

A man inquires in a mobile test car in Brooklyn, New York, the United States, Jan.

Brendan McDermid | Reuters

Quidel is recalling its Lyra Covid-19 assay test due to a high risk of false negative results in patients who actually have high levels of the virus.

Quidel is a company that makes diagnostic health products worldwide. The Covid test received emergency approval from the Food and Drug Administration in March. It uses a swab sample from the nasal area to detect RNA that is specific for the SARS-CoV-2 virus.

“False-negative results can lead to delayed diagnosis or inadequate treatment of SARS-CoV-2, which can harm the patient, cause serious illness and death,” the FDA wrote on its website announcing the recall.

False negative results could also spread the virus further into a community, putting others at high risk of injury or death.

Quidel has received five complaints about the product, but there are currently no reports of injury or death from its use. The company’s stock plunged around 5% in after-hours trading.

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Health

CureVac to ‘plow ahead’ with Covid vaccine regardless of trial outcomes     

An employee of the German biopharmaceutical company CureVac will demonstrate research on a vaccine against the coronavirus (COVID-19) disease in a laboratory in Tübingen on March 12, 2020.

Andreas Gebert | REUTERS

LONDON – CureVac plans to continue work on its Covid-19 vaccine despite disappointing results from clinical studies showing the vaccine is only 48% effective.

The German biotech company released its final analysis of the clinical trials of its coronavirus vaccine – known as CVnCoV – on Wednesday, confirming that the vaccine was 48% effective against Covid of all degrees of severity in all ages and 15 variants.

Pierre Kemula, CFO of CureVac, however, defended the vaccine on CNBC Thursday, saying the clinical trials were conducted at a time when several new strains of the virus were spreading around the world.

“We have to speak to the EMA now [European Medicines Agency] and want to make sure we have an open dialogue and share any data we have to assess the way forward, “he told CNBC’s Squawk Box Europe on Thursday.

When asked if it is worth developing the vaccine further when other successful vaccines are already in use in Europe and elsewhere, Kemula said the company had contractual obligations to meet.

“We have a contract with the European Commission to supply 225 million doses of the drug, so I think we need to move forward on that,” he said.

“There are a lot of vaccinations, there are a lot of people under 60 who haven’t had access to the vaccine before. So if we can contribute to the fight – in the short term in the pandemic, but also in the medium term with these other ways of [multivalents] … we are continuing to work on that. “Multivalent or polyvalent vaccines should immunize against more than one virus strain.

The results of the CureVac study, which enrolled 40,000 participants in ten countries in Latin America and Europe, showed that the vaccine was more effective in younger participants. The effectiveness rate among 18 to 60 year olds was 53% for diseases of any severity and increased to 77% for moderate and severe diseases in the same age group.

However, given that Covid-19 carries a higher risk for the elderly, the study results are disappointing, not least because two other vaccines made with messenger RNA (mRNA) – those from Pfizer-BioNTech and Moderna – have an efficacy greater than 90 % of have been shown to prevent Covid-19 infection. CureVac’s shares fell as much as 13% in Thursday’s pre-trading session.

Dr. Franz-Werner Haas, CEO of CureVac, defended the results in a statement on Wednesday, saying the vaccine “shows strong public health value” for those aged 18 to 60 and will be an “important contributor to tackling Covid.” -19 pandemic and the dynamic distribution of variants. “

He also cited “the current context of an increasingly diverse environment of Covid-19 variants”.

Several variants have emerged over the course of the pandemic, some of which are more virulent than others – like the alpha variant first discovered in the UK and the delta variant first identified in India – and Kemula said he believed mutations would continue to occur.

“As more and more people become infected with coronavirus, we are prepared for the disease to continue to develop as it progresses and has more and more variants,” said Kemula. The industry must think ahead, “how we can cope better with the current vaccines, but also possibly with various boosters (booster vaccinations),” he added.

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Politics

New York Mayor’s Race in Chaos After Elections Board Pulls Again Outcomes

The New York City mayor’s race plunged into chaos on Tuesday night when the city Board of Elections released a new tally of votes in the Democratic mayoral primary, and then removed the tabulations from its website after citing a “discrepancy.”

The results released earlier in the day had suggested that the race between Eric Adams and his two closest rivals had tightened significantly.

But just a few hours after releasing the preliminary results, the elections board issued a cryptic tweet revealing a “discrepancy” in the report, saying that it was working with its “technical staff to identify where the discrepancy occurred.”

By Tuesday evening, the tabulations had been taken down, replaced by a new advisory that the ranked-choice results would be available “starting on June 30.”

Then, around 10:30 p.m., the board finally released a statement, explaining that it had failed to remove sample ballot images used to test its ranked-choice voting software. When the board ran the program, it counted “both test and election night results, producing approximately 135,000 additional records,” the statement said. The ranked-choice numbers, it said, would be tabulated again.

The extraordinary sequence of events seeded further confusion about the outcome, and threw the closely watched contest into a new period of uncertainty at a consequential moment for the city.

For the Board of Elections, which has long been plagued by dysfunction and nepotism, this was its first try at implementing ranked-choice voting on a citywide scale. Skeptics had expressed doubts about the board’s ability to pull off the process, though it is used successfully in other cities.

Under ranked-choice voting, voters can list up to five candidates on their ballots in preferential order. If no candidate receives more than 50 percent of first-choice votes in the first round, the winner is decided by a process of elimination: As the lower-polling candidates are eliminated, their votes are reallocated to whichever candidate those voters ranked next, and the process continues until there is a winner.

The Board of Elections released preliminary, unofficial ranked-choice tabulations on Tuesday afternoon, showing that Mr. Adams — who had held a significant advantage on primary night — was narrowly ahead of Kathryn Garcia in the ballots cast in person during early voting or on Primary Day. Maya D. Wiley, who came in second place in the initial vote count, was close behind in third place. The board then took down the results and disclosed the discrepancy.

The results may well be scrambled again: Even after the Board of Elections sorts through the preliminary tally, it must count around 124,000 Democratic absentee ballots. Once they are tabulated, the board will take the new total that includes them and run a new set of ranked-choice elimination rounds, with a final result not expected until mid-July.

Some Democrats, bracing for an acrimonious new chapter in the race, are concerned that the incremental release of results by the Board of Elections — and the discovery of an error — may stir distrust of ranked-choice voting and of the city’s electoral system more broadly.

In a statement late Tuesday night, Ms. Wiley laced into the Board of Elections, calling the error “the result of generations of failures that have gone unaddressed,” and adding: “Sadly it is impossible to be surprised.”

“Today, we have once again seen the mismanagement that has resulted in a lack of confidence in results, not because there is a flaw in our election laws, but because those who implement it have failed too many times,” she said. “The B.O.E. must now count the remainder of the votes transparently and ensure the integrity of the process moving forward.”

Ms. Garcia said the release of the inaccurate tally was “deeply troubling and requires a much more transparent and complete explanation.”

“Every ranked choice and absentee vote must be counted accurately so that all New Yorkers have faith in our democracy and our government,” she said. “I am confident that every candidate will accept the final results and support whomever the voters have elected.”

And Mr. Adams noted the “unfortunate” error by the Board of Elections and emphasized the importance of handling election results correctly.

“It is critical that New Yorkers are confident in their electoral system, especially as we rank votes in a citywide election for the first time,” he said in a statement released on Tuesday night. “We appreciate the board’s transparency and acknowledgment of their error. We look forward to the release of an accurate, updated simulation, and the timely conclusion of this critical process.”

If elected, Mr. Adams would be the city’s second Black mayor, after David N. Dinkins. Some of Mr. Adams’s supporters have already cast the ranked-choice process as an attempt to disenfranchise voters of color, an argument that intensified among some backers on Tuesday afternoon as the race had appeared to tighten, and is virtually certain to escalate should he lose his primary night lead to Ms. Garcia, who is white.

Surrogates for Mr. Adams have suggested without evidence that an apparent ranked-choice alliance between Ms. Garcia and another rival, Andrew Yang, could amount to an attempt to suppress the votes of Black and Latino New Yorkers; Mr. Adams himself claimed that the alliance was aimed at preventing a Black or Latino candidate from winning the race.

In the final days of the race, Ms. Garcia and Mr. Yang campaigned together across the city, especially in neighborhoods that are home to sizable Asian American communities, and appeared together on campaign literature.

To advocates of ranked-choice voting, the round-by-round shuffling of outcomes is part of the process of electing a candidate with broad appeal. But if Ms. Garcia or Ms. Wiley were to prevail, the process — which was approved by voters in a 2019 ballot measure — would likely attract fresh scrutiny, with some of Mr. Adams’s backers and others already urging a new referendum on it.

By Tuesday night, though, it was the Board of Elections that was attracting ire from seemingly all corners.

Betsy Gotbaum, the city’s former public advocate who now runs Citizens Union, a good-government group, warned that “the entire country is watching” the Board of Elections. “New Yorkers deserve elections, and election administrators, that they can have the utmost faith in,” Ms. Gotbaum added.

A comparison between first-place vote totals released on primary night and those released on Tuesday offered some insight into how the 135,000 erroneous votes were distributed. The bottom four candidates received a total of 42,000 new votes, roughly four times their actual vote total; the number of write-in ballots also skyrocketed to 17,516 from 1,336. Mr. Adams and Mr. Yang received the highest number of new votes.

It was not known, however, how the test votes were reallocated during the ranked-choice tabulations, making it impossible to determine how they affected the preliminary results that were released and then retracted.

When accurate vote counts are in place, it is difficult, but not unheard-of for a trailing candidate in a ranked-choice election to eventually win the race through later rounds of voting — that happened in Oakland, Calif., in 2010, and nearly occurred in San Francisco in 2018.

The winner of New York’s Democratic primary, who is almost certain to become the city’s next mayor, will face Curtis Sliwa, the founder of the Guardian Angels, who won the Republican primary.

According to the now-withdrawn tabulation released Tuesday, Ms. Wiley, a former counsel to Mayor Bill de Blasio, nearly made it to the final round. She finished closely behind Ms. Garcia, the former sanitation commissioner, before being eliminated in the penultimate round of the preliminary exercise.

After the count of in-person ballots last week, Ms. Garcia had trailed Ms. Wiley by about 2.8 percentage points. Asked if she had been in touch with Ms. Wiley’s team, Ms. Garcia suggested there had been staff-level conversations.

“The campaigns have been speaking to each other,” Ms. Garcia said in a phone call on Tuesday afternoon, saying the two candidates had not yet spoken directly. “Hopefully we don’t have to step in with attorneys. But it is about really ensuring that New York City’s voices are heard.”

Ms. Wiley ran well to the left of Ms. Garcia on a number of vital policy matters, including around policing and on some education questions. Either candidate would be the first woman elected mayor of New York, and Ms. Wiley would be the city’s first Black female mayor.

Mr. Adams, a former police captain and a relative moderate on several key issues, was a non-starter for many progressive voters who may have preferred Ms. Garcia and her focus on competence over any especially ideological message.

But early results suggested that Mr. Adams had significant strength among working-class voters of color, and some traction among white voters with moderate views.

City Councilman I. Daneek Miller, an Adams supporter who is pressing for a new referendum on ranked-choice voting, suggested in a text message on Tuesday that the system had opened the door to “an attempt to eliminate the candidate of moderate working people and traditionally marginalized communities,” as he implicitly criticized the Yang-Garcia alliance.

“It is incumbent on us now to address the issue of ranked voting and how it is being weaponized against a wide portion of the public,” said Mr. Miller, the co-chair of the Black, Latino, and Asian Caucus on the City Council.

Other close observers of the election separately expressed discomfort with the decision to release a ranked-choice tally without accounting for absentee ballots.

“There is real danger that voters will come to believe a set of facts about the race that will be disproven when all votes are in,” said Ben Greenfield, a senior survey data analyst at Change Research, which conducted polling for a pro-Garcia PAC. “The risk is that this could take a system that’s already new and confusing and increase people’s sense of mistrust.”

Dana Rubinstein, Jeffery C. Mays, Anne Barnard, Andy Newman and Mihir Zaveri contributed reporting.

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Politics

The Supreme Court docket’s Latest Justices Produce Some Sudden Outcomes

Justice Alito was aghast. “Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two,” he wrote, joined by Justice Gorsuch. “In all three episodes, with the Affordable Care Act facing a serious threat, the court has pulled off an improbable rescue.”

Richard J. Lazarus, a law professor at Harvard, said the decisions “suggest that several key justices are willing to temper their views to join the chief’s longstanding battle to have the court decide cases more narrowly and with a more unified voice.”

But he added a note of caution. “What remains to be seen,” he said, “is whether, notwithstanding the chief’s best efforts, his battle to promote a nonpartisan image for the court is ultimately a losing one.”

So far this term, the court’s three Democratic appointees have voted with the majority 73 percent of the time in divided cases, slightly ahead of the 72 percent rate of the six Republican appointees. In the term that ended last year, the gap was 14 percentage points in favor of Republican appointees.

The change may be explained by strategic voting. The court’s Democratic appointees have not hesitated to join unanimous decisions with conservative outcomes, as labeled by the Supreme Court Database at Washington University. The percentage of liberal decisions in unanimous cases so far this term is just 30, the lowest since at least 1953.

But the story changes in divided cases, where 64 percent of decisions have been labeled liberal, the highest since 1968.

“Going into this term,” Professor Epstein said, “the expectation was a bunch of divided decisions with the three Democratic appointees getting the short end of the stick. So far that prediction is way off the mark. In divided cases, the Trump appointees have moved the court to the left. If anyone got the short end of the stick, it’s this year’s most conservative justice, Alito.”

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World News

Virgin Galactic SPCE earnings Q1 2021 outcomes

Virgin Galactic’s carrier aircraft releases its Unity spacecraft during a glide test.

Virgo Galactic

Virgin Galactic delivered its first quarter results after the market closed on Monday and announced that it has not yet set a target date for the next space test that the company had previously planned for this month.

“The timing of the next flight test is currently being evaluated,” said the company in a press release.

The space tourism company reported an adjusted EBITDA loss of $ 55.9 million, slightly below the previous quarter’s loss of $ 59.5 million and below its adjusted EBITDA loss of $ 63.6 million, analysts at FactSet expected.

The company had revenue of $ zero for the quarter, like the previous quarter. Virgin Galactic had approximately $ 617 million in cash at the end of the first quarter compared to approximately $ 666 million in the fourth quarter.

Virgin Galactic shares fell more than 3% after close of trading after closing 8% on Monday at $ 17.95 per share.

The stock is down 24% since the start of the year – after falling more than 70% from its highs above $ 60 per share in February.

Virgin Galactic’s share losses have accelerated in the past two months following delays in its trial program as well as share sales by Chairman Chamath Palihapitiya, founder Richard Branson and Cathie Wood’s new space ETF. The stock also fell after Jeff Bezos’ company Blue Origin announced plans to launch the first crew flight of its space tourism rocket on July 20. UBS cautioned against removing Virgin Galactic’s first mover advantage.

The company is working to complete development of its SpaceShipTwo system. Four test flights remain before Virgin Galactic’s commercial service begins in 2022.

Virgin Galactic attempted the first of these four space tests in December, but the mission was interrupted by an engine anomaly. The company planned to rerun the attempt to fly in February, but then delayed it to May to allow more time to fix an electromagnetic interference issue on the spacecraft’s flight computer. Virgin Galactic said in its first quarter report that corrective work on this issue has been completed and said VSS Unity is “ready to begin pre-flight procedures for the flight.”

The fourth space test, expected later this year, will promote members of the Italian Air Force for professional astronaut training. It will be Virgin Galactic’s first “full revenue” flight that the company announces will generate $ 2 million – or the equivalent of $ 500,000 per seat.

Meanwhile, in March, Virgin Galactic unveiled the next starship in its fleet, VSS Imagine, the first of its next-generation SpaceShip III-class.

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World News

S&P 500 is flat amid combined earnings outcomes, looming Fed resolution

US stocks were flat on Wednesday as investors digested key technology earnings and prepared for the recent Federal Reserve policy announcement.

The S&P 500 hovered over the flatline but hit a new intraday record at the beginning of the session. The Dow Jones Industrial Average lost 140 points, hurt by a 7% decline in Amgen stock. The Nasdaq Composite was up 0.1%.

Boeing lost about 2% after posting its sixth straight quarterly loss, which also weighed on the Dow.

The Google parent alphabet reported a better-than-expected result on Tuesday after the bell, sending the tech giant’s shares up more than 4%. Alphabet saw sales grow 34% year over year.

Meanwhile, Microsoft shares fell about 2.5% even after the company beat analyst earnings. Microsoft saw the largest revenue growth since 2018, in part due to the increase in PC sales due to the coronavirus-induced shortage last year.

AMD and Visa holdings were higher after results turned out to be better than expected.

The Fed concludes its two-day meeting on Wednesday. The central bank is not expected to take action, but economists expect it to defend its policy of temporarily heating inflation. Fed Chairman Jerome Powell will hold a press conference 30 minutes after the decision is announced at 2:30 p.m. ET. These comments could move the markets.

“Any advice given in the Board of Directors’ statement or in the subsequent press conference about a possible reduction in QE – when and how quickly – would likely move both the equity and bond markets,” said Paulsen.

Tech darlings Apple and Facebook will report their winnings on Wednesday after the bell.

“Lots of FAANGs are reporting this week and the stock market can wait for some of these key reports to be released before deciding on the next major direction,” said Jim Paulsen, Leuthold Group’s chief investment strategist.

On Tuesday, the most important averages around the flatline were traded. The Dow Jones Industrial Average only rose 3 points. The S&P 500 closed flat after hitting an all-time high on Monday. The Nasdaq Composite was the relative underperformer, falling 0.34% while Tesla fell 4.5%.

Elsewhere later on Wednesday, President Joe Biden will unveil a $ 1.8 trillion new spending and tax credit plan aimed at helping families. The Biden government’s new spending plan would raise the highest income tax rate for the richest Americans to 39.6% and raise capital gains taxes to 39.6% for households earning more than $ 1 million, according to senior government officials. Stocks had taken a hit last week when reports of the tax hike surfaced.

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Business

Pandemic booms and busts will make outcomes troublesome to gauge

A shopper walks past shelves in a paper product aisle of a store in Burbank, California on November 19, 2020.

Robyn Beck | AFP | Getty Images

In a typical profitable season, the rules of the game for investors can be relatively simple: rising profits and strong year-on-year sales growth signal success.

This formula won’t work in the quarters to come.

Some companies, including Walmart and Dollar General, have started making challenging year-over-year comparisons. That means sales growth and ecommerce gains can look disappointing compared to the rising numbers during the height of the pandemic. Others, like clothing retailers like Macy’s and Kohl’s, major airlines like Delta Air Lines, and hotel chains like Wyndham, are facing growth that will look stunning compared to a time when malls were closed and nearing the bottom.

Due to the pandemic, investors will again be navigating in uncharted waters. You need to work out the importance of companies’ quarterly performance, as the way people lived, worked and spent a year ago skewed the numbers. And they need to filter out factors that reflect unusual times rather than sustained demand, such as shopping sprees fueled by stimulus checks and a reopening economy.

“Welcome to the upside-down world,” said Jharonne Martis, director of consumer research at Refinitiv. “We’ve never had a comparable time. What’s good doesn’t mean it’s good. And what’s negative could actually mean they are.” [the companies] well done.”

Customers shop in the meat department of the Kroger Marketplace in Versailles, Kentucky, USA on Tuesday, November 24th, 2020.

Scotty Perry | Bloomberg | Getty Images

Different approaches

Investors are excited to see how companies do on the rebound. The question is: compared to what?

Some pandemic beneficiaries like Dollar General and Kroger share a new metric: a two-year stack that ties comparable sales for the past year and this year. Comparable sales, also known as sales in the same store, are an industry term that measures year-on-year growth, with the exception of locations that are newly opened or renovated.

Dollar General, for example, saw above-average sales growth in the same store during the pandemic, but expects some of that to fade as consumers become more free to spend their dollars. For example, some shoppers went into stores and refilled larger baskets because they were stopping for safety reasons or because the competitors were temporarily closed.

CFO John Garratt said during a profit call that the discounter expects sales in the same store to decline 4% to 6% year over year. In two years, however, the same performance looks better: Dollar General expects sales in the same store to grow by around 10% to 12% over two years.

The airlines took a different approach and, depending on the data point, provided a mix of 2019 and 2020 comparisons in the results reports. Delta Air Lines attributed its approach to “the drastic and unprecedented impact of the pandemic”.

“Comparing our results from 2021 to 2019 will provide an understanding of the full impact of the COVID-19 pandemic and the progress of our recovery,” the airline said.

The pandemic ravaged the travel industry perhaps more than any other, and US airlines combined lost more than $ 35 billion in 2020. The number of passengers dropped more than 60% to about 370 million people, the lowest number since 1984, and the airlines reduced flight operations In Response.

Demand for air travel has rebounded from the depths of the pandemic as more people are vaccinated, governments lift travel restrictions and open more tourist attractions, but it is still far from pre-pandemic levels as people continue to be largely on business and long haul forego international travel.

The Transportation Security Administration examined an average of 1.4 million people from April through Wednesday. That’s more than 13 times the 103,000 people screened a year ago when the US first closed, but it’s a 35% decrease over the same period in 2019.

Savanthi Syth, an airline analyst at Raymond James, said she’s comparing results and projections with 2019 but will use year-on-year comparisons next year. In a research report, she said comparing this year to 2019 “gives you an idea of ​​how 2021 compares to” normal “”.

Coca-Cola and CarMax have also compared their numbers with pre-pandemic numbers. Coke, in its call for a profit this week, stressed that global case volume fell back to 2019 levels in March, although aggregate demand in the first quarter was still below pre-health crisis levels as Europe and North America rebounded.

Bill Nash‌‍, CEO of CarMax, said the used car dealer’s “very volatile year” reflected government restrictions, not consumer demand. Because of this, on a earnings call earlier this month, he said 2019 was a better reference point.

For example, he said, CarMax’s California locations lagged significantly behind the rest of the company as the state’s demand for lower occupancy restricted customer pedestrian traffic – and ultimately revenue.

“Smooth”

When companies excavated from the global financial crisis in 2010, there were unusually high growth rates, said John Butters, senior earnings analyst at FactSet. Just like then, investors need to “keep the growth rate in context”.

“The result is improving, but you are comparing it to a very weak base and so some of those numbers are much larger than we normally see,” he said.

After the pandemic, however, there will be different groups: companies that are booming from extremely weak sales and companies that have slowed or worsened sales growth as the pandemic tailwind wears off, and possibly a third group: companies that have the Maintain momentum.

Martis from Refinitiv pointed out two examples that capture this “wrong” dynamic. Delta’s revenue growth rate is expected to more than quadruple year over year in the second quarter of fiscal year, according to Refinitiv. However, estimated revenue for the quarter is $ 6.22 billion – less than half of the $ 12.54 billion reported in the same quarter of 2019 before the pandemic.

On the other hand, Walmart’s revenue growth rate is expected to decline 2.2% year over year in the first quarter of fiscal year – a decline that usually indicates weakness and is cause for concern. However, the estimated revenue of $ 131.66 billion is likely to be higher than the pre-pandemic revenue of $ 123.93 billion in the same quarter of 2019.

Even so, Refinitiv doesn’t plan to use two-year stacks, Martis said.

“It masks the dramatic changes we see in percentage changes. It smooths them out,” she said. “But it really doesn’t compare to the old days.”

Martis and Butters both said their financial data firms would instead try to explain what the numbers mean – and how to jump or drop off sharply with a grain of salt.

She said she saw 2021 as a year of transition. She anticipates consumption patterns to evolve rather than snap back as people gradually start receiving vaccines, becoming comfortable in changing rooms again, or realizing the need to buy new pairs of shoes or work clothes. It could be early next year for companies and investors to see more predictable patterns, she said.

“2021 is almost like pressing a reset button,” she said.

“Your worst enemy”

For many, the worst pandemic comparisons won’t begin until the second quarter, said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. Only a week or two of home behavior were recorded in the first calendar quarter.

First, he said, the comparisons will make some companies that have seen a sharp downtrend during the pandemic look good – only to potentially bite them when spending patterns turn into some sort of normal. For home based businesses, this will come first. It could kick in again for those experiencing a shopping spree in 2021 that will cool off in 2022.

“The comps will go from your best friend to your worst enemy,” he said.

Other data points will also be meaningful, said Martis of Refinitiv. Among them, she said, is e-commerce growth. She will see retailers cling to recent profits. She said she’ll also watch companies’ margins to see how much money everyone can make. This will show whether discounts were needed to move goods and whether retailers learned to juggle brick and mortar and online stores efficiently.

Forecasts are back

Butters of FactSet said it would help if many companies returned to forecasting – something that was largely discontinued last year. The analysts’ guidelines and estimates provide helpful benchmarks, and it remains a positive sign if companies can outperform these benchmarks.

Even more than in the past, assessing a company’s strengths or weaknesses will be “a very company-specific task,” said Zack Fadem, senior equity analyst at Wells Fargo. The background for the industry is different, he said. Some companies are in hot sectors – like home improvement retailers – who will continue to benefit from the real estate market even as the pandemic-induced “nesting” subsides. For these, he said, the “wall of concern” could be postponed until next year for comparable numbers.

Also, consumer spending could rise across the board if Americans put money they put in savings or received from the government. He said if the overall pie is growing, it’s important to compare a company to its competitors and see if its market share grows or shrinks.

“With the benefits of incentives and heavy consumers, you have to comb through other sounds to see if business has gotten better or worse,” he said.

– CNBC’s Leslie Josephs contributed to this story. Nate Rattner contributed to the data visualization.

Categories
Politics

Donations Surge for Republicans Who Challenged Election Outcomes

WASHINGTON – Republicans who vocalized the loudest urge to come to Washington on January 6th to try to undo the loss of President Donald J. Trump, overturn the elections and fuel the grievances that make the deadly one The Capitol Rebellion sparked have profited amply in the aftermath, according to new campaign data.

Senators Josh Hawley from Missouri and Ted Cruz from Texas, who led the challenges to President Biden’s victory in their chamber, raised more than $ 3 million each in the three months following the January 6 attack on the Capitol in campaign donations.

Georgia Republican Representative Marjorie Taylor Greene, who described the rampage as the “1776 moment” and was later exempted from committee duties for advocating bigoted conspiracy theories and advocating political violence, raised $ 3.2 million – more as the solo campaign of Rep. Kevin McCarthy, the minority leader, and almost every other member of the house leadership.

An analysis by the New York Times of the recent Federal Election Commission revelations shows how the leaders of the effort to undo Mr Biden’s election victory have benefited from the indignation of their supporters for raising huge sums of campaign money. Far from being punished for promoting the protest that became fatal, they have performed well in a system that often rewards the loudest and most extreme voices and uses insurrection anger to build their political brands . The analysis examined the individual campaign accounts of the legislature, not the joint fundraising committees or the leadership’s political action committees.

“The outrage machine is powerful at generating political input,” said Carlos Curbelo, a former Republican Congressman from Florida.

Shortly after the storming of the Capitol, some prominent corporations and political action committees vowed to end support for the Republicans who had fanned the flames of anger and conspiracy that led to violence. But any financial setback for Corporate America seems to have been dwarfed by a flood of cash from other areas.

North Carolina representative Madison Cawthorn, a freshman who urged his supporters to “gently threaten” Republican lawmakers to get them to question the election results, collected more than $ 1 million. Representative Lauren Boebert from Colorado, who, like Ms. Greene, compared January 6 to the American Revolution, raised nearly $ 750,000.

The amounts reflect an emerging incentive structure in Washington where the biggest provocateurs can convert their notoriety into achievements of small donors who can help them achieve even higher levels of notoriety. It also shows the appetite of a Republican electorate who subscribes to Mr Trump’s false claims of widespread electoral fraud and seeks to reward those who have worked to undermine the outcome of a free and fair election.

Most of the dozen companies that pledged to cut off Republicans who advocated overturning the elections kept that promise and withheld political action committee donations for the last quarter. But that didn’t matter to the loudest voices on Capitol Hill, as a energetic base of pro-Trump donors stood by their side and more than made up for the deficit.

“We’re really seeing small donors emerge in the Republican Party,” said Alex Conant, a Republican strategist. “In the past, the Democrats have benefited most from small dollar donations. We see Republicans catch up quickly. “

Legislators have long benefited greatly from divisive reporting, particularly on important events that match the emotions of an angry or fearful electorate. However, the new records illustrate a growing gap between those who raise money through a bombastic profile – often supported by substantial fundraising expenses – and those who have turned their attention to serious political work.

When provocative newbies like Ms. Greene, Ms. Boebert, and Mr. Cawthorn took in high dollar numbers, other more conventional members of their class in competitive districts – even those who were praised for their fundraising ability – had lagged significantly.

For example, Ashley Hinson of Iowa and Young Kim of California, both against the election challenges and working on bipartisan bills, each made less than $ 600,000.

Ms. Greene, Ms. Boebert, and Mr. Cawthorn raised more money than the top Republicans on the most powerful committees in Congress, such as Funds, Budget, Education and Labor, Foreign Policy and Homeland Security.

In many cases, Republican lawmakers who started the flames of violence on January 6 have since benefited from posing and appealing to their supporters as victims of a political backlash developed by the Washington establishment.

“Pennsylvania didn’t obey its own state’s electoral law, but the establishment didn’t want to hear it. But that’s not what I work for, ”Hawley wrote in a fundraising message in January. “I objected because I wanted to make sure your voice was heard. Now Biden and his woken up mob are coming after me. I need your help.”

Ms. Greene raised funds from a successful attempt to ban her from committees, led by angry Democrats who were outraged by her earlier talk in support of the execution of Speaker Nancy Pelosi and who encouraged her supporters to say “Stop the Steal” on January 6th In the days before and after the unusual vote, she raised $ 150,000 every day, surpassing it every time.

“The DC swamp and fake news media are attacking me because I am not one of them,” was one such call. “I am one of you. And they hate me for it. “

However, Mr. Trump’s polarizing nature also helped some Republicans who held him accountable for his conduct in connection with the January 6th events.

Representative Liz Cheney of Wyoming, the No. 3 Republican who voted for the indictment against Mr. Trump, raised $ 1.5 million, and Representative Adam Kinzinger of Illinois, who founded an organization, raised $ 1.5 million to lead the Republican Party away from allegiance to Mr. Trump. raised more than $ 1.1 million.

“It is obvious that there is a strong market for Trumpism in the Republican base,” said Curbelo. “There is also a strong market for truth-finding and constitutional support.”

Mr. Conant questioned how the increase in fundraising for some candidates was directly related to the Capitol attack. He said the conservative news media had generally “moved on” from reporting.

Instead, he said Republican voters were “very nervous” about the direction of the country under democratic control and ready to support Republicans who they saw as a fight against a liberal agenda.

“It’s worth being high-profile,” said Conant. “It’s further evidence that Milquetoast doesn’t offer a lot of grassroots support in the middle of the road. That doesn’t mean you have to be pro-Trump. It just means that you have to take strong positions and then connect with those supporters. “

But if the Republican Civil War has paid campaign dividends for both sides, individual Democrats involved in prosecuting Mr Trump for the insurrection in his impeachment have not achieved similar success.

With $ 3.2 million in the quarter, Ms. Greene raised more than the sum of all nine impeachment executives – although she received widespread applause in liberal circles for her case against the former president. According to the data, three of the managers have raised less than $ 100,000 each in the past three months.

With money flowing into campaigns, the January 6 attack also resulted in high security spending.

The Federal Election Commission expanded guidelines allowing lawmakers to use campaign submissions to install home security systems in their homes, and Capitol Hill Top Security urged lawmakers to consider upgrading their home security systems to Include panic buttons and key rings.

Campaign filings show that nearly a dozen lawmakers have made payments of $ 20,000 or more to security companies in the past three months, including Senator Patrick J. Toomey, Republican of Pennsylvania, who voted to convict Mr. Trump; Representative Alexandria Ocasio-Cortez, Democrat of New York, who gave a harrowing report on the uprising; and Representative Eric Swalwell, Democrat of California and one of the impeachment executives against Mr. Trump.

Mr. Cruz and Mr. Hawley were also some of the biggest security issues.

Lauren Hirsch and Jeanna Smialek contributed to the coverage.