Tag: business

Sweetgreen wants to be the ‘McDonald’s of its generation.’ This rival salad chain could beat it

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The drive-thru entrance to a Salad and Go location.

Source: Salad and Go

When Sweetgreen went public two years ago, co-founder and CEO Jonathan Neman said the salad chain aspired to be the “McDonald’s of its generation.”

But another salad rival could beat Sweetgreen to the punch: Salad and Go.

Founded in 2013, the upstart chain is nearing its publicly traded rival’s store count, with more than 100 locations and counting. With backing from private equity firm Volt Investment, it has ambitious expansion plans for 2024 beyond its roots in the Southwest.

Salad and Go’s appeal comes in no small part from its affordability. One of its 48 ounce salads costs less than $7 and comes with chicken or tofu, while a comparable salad from Sweetgreen costs about $12.

As the chain plots an ambitious expansion path, its C-suite is packed with restaurant industry veterans, including former Wingstop CEO Charlie Morrison. He joined Salad and Go’s board in 2020. Two years later, Morrison took over as chief executive, departing Wall Street’s favorite chicken wing chain after a decade in favor of a little-known salad chain that then had only 50 locations.

“The brand was designed around the idea of completely rebuilding the supply chain, and fixing what I believe is broken today,” Morrison said at the annual ICR Conference earlier this month.

Since Morrison became chief executive, Salad and Go has more than doubled its footprint, which is now around 130 locations across Arizona, Nevada, Oklahoma and Texas. Last year, the chain opened about a restaurant every week, and it plans to keep up that pace in 2024 and enter new markets such as Southern California. For reference, Sweetgreen has 220 open locations, as of Sept. 24.

Morrison said the company is currently profitable in “established mature markets.”

How Salad and Go works

A salad or wrap from Salad and Go starts at one of the chain’s commissary kitchens, where its produce is washed and its proteins are prepared. Those ingredients are then shipped to its 750-square-foot locations, which are roughly the same size as a typical restaurant kitchen. The restaurants have drive-thru lanes, but no indoor seating.

Its small footprint has helped the chain expand quickly with relatively low rent. Other industry disruptors, such as ghost kitchens and the coffee startup Blank Street Coffee, have used a similar real estate strategy to cut overhead costs.

Salad and Go customers order online or in those drive-thru lanes, and a team of two employees makes their customized salads and wraps.

The simplified restaurant kitchen features a walk-in cooler and cooling counters underneath the make lines where workers assemble orders. A few ingredients, such as the eggs for its breakfast burritos and avocados for its salads, are prepared on site, rather than in its commissaries.

But the Salad and Go locations lack the freezers, broilers, fryers, hoods and fire suppression systems that typical fast-food restaurants need — and are often a culprit for delays as locations wait on equipment inspections ahead of opening.

On average, a Salad and Go customer exits the drive-thru line in under four minutes, according to Morrison. Increasingly, its customers are picking up orders for more than just one meal.

“The unique thing about Salad and Go against any other [quick-service restaurant] brands out there is that we enjoy a two-daypart single occasion,” Morrison said. “You can show up at 6:30 in the morning and get your breakfast burrito, get your cold brew coffee or hot coffee, and get your salad for lunch during the same occasion.”

Replacing burgers, not salads

Charlie Morrison, CEO of Salad and Go, speaking on CNBC’s “Power Lunch” in Englewood Cliffs, New Jersey, on Dec. 5 2023.

Adam Jeffery | CNBC

As Salad and Go enters new territory, Morrison is confident that the chain’s salads have universal appeal.

“We’ve been able to put these stores in these differentiated markets, with different income levels, different levels of diversity, different focal points, and found that great performance quite consistent,” Morrison said.

Salad and Go’s first customers in a new market tend to be regular salad eaters anyway, but Morrison said the chain has also been able to attract other consumers because of its cheap prices and tasty food.

“What we see with our fans, with our guests, is this very strong loyalty and affinity,” Salad and Go Chief Marketing Officer Nicole Portwood told CNBC.

Portwood previously helped turn Tito’s Handmade Vodka from a craft distiller to the nation’s most popular vodka. Like Morrison, she started at Salad and Go as a member of its board before being tapped as its CMO in October.

Other salad players, such as Sweetgreen, Just Salad or Salata, are usually in the same markets as Salad and Go. Salad and Go isn’t the only chain to prioritize convenience for on-the-go customers. Sweetgreen has been opening restaurants with drive-thru lanes dedicated to digital orders.

But Morrison told CNBC that the chain doesn’t worry about those options, which usually charge at least double what his company does for their healthy fare.

“Our concept is not tailored to compete against them. It’s tailored to compete against eating occasions that are unhealthy for you, but otherwise you couldn’t afford to eat well,” he said.

In other words, Salad and Go is looking to take down fast-food restaurants such as McDonald’s, which pulled its salads off menus during the Covid-19 pandemic and hasn’t brought them back yet.

Ambitions for thousands of restaurants

Salad and Go is looking to emulate fast-food rivals in other ways, too.

“We have expansion plans that will carry us well into the thousands of restaurants,” Morrison said. “Ultimately, we believe this brand has the potential for a very large footprint.”

Similar to Sweetgreen, Salad and Go owns rather than franchises its restaurants. That approach requires more capital — so do its commissaries, or central kitchens, as Salad and Go calls them. But Morrison said the kitchens mitigate labor challenges, requiring less training for its workers and fewer employees in its actual restaurants.

Today, Salad and Go runs two commissary kitchens: one in Phoenix, and the other in Dallas. The Texas kitchen was Salad and Go’s original prototype, and the chain plans to upgrade to an improved facility by this spring that can service as many as 500 locations in the future, including potential restaurants as far away as Atlanta.

For now, Salad and Go’s goals for the future are focused on building more restaurants and spreading the word about its salads. When asked about long-term plans for the company, such as an initial public offering, Morrison said all options are in play.

“It’s less of a concern now. The concern for us is just expanding the footprint and getting into the market, fulfilling our mission,” he said. 

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25 ways to stay warm this winter that won’t break the bank | CNN

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Editor’s Note: Get inspired by a weekly roundup on living well, made simple. Sign up for CNN’s Life, But Better newsletter for information and tools designed to improve your well-being.



CNN
 — 

As wintry weather whips across the United States, one challenge may be staying warm if you can’t afford or are cutting back on indoor heating.

Staying warm is necessary “for a variety of health reasons” in addition to comfort, said Dr. Georges Benjamin, the executive director of the American Public Health Association. For people with arthritis, stiffness “in your back and neck and sore joints do occur more in colder weather. … People who have metabolic conditions can be sensitive to the weather, like diabetes, for example, and heart disease. The more cold you are, the more stress you put on your heart.”

A little savvy based on our warm-blooded bodies, food, appliances, furniture, the outdoor elements and more can go a long way. Here are 25 ways to stay warm this winter — with or without indoor heating — that won’t break the bank.

How to warm your body

1. Warm up with store-bought hand warmers, microwavable heating pads, hot water bottles or heated blankets. Following the manufacturer’s instructions and concentrating on your torso are key, said JohnEric Smith, an associate professor in the department of kinesiology at Mississippi State University. “If you warm the core you can warm the hands and feet. It is harder to warm the core by warming the hands and feet.”

Be careful that you don’t burn yourself, Benjamin said. “They’re very effective on a knee or shoulder or the back of the neck. … You rarely put it directly on your skin. You usually wrap it in something, maybe a thin towel.”

2. Move your body. Physical activities like indoor exercise or dancing can help you warm up, but don’t get to the point where you’re sweating, Smith said. “We sweat to lose heat and sweating will make us colder.”

3. Think twice about taking a warm shower or bath. “While a warm bath or shower will feel good for the minute,” Smith said, “you will be cold after you get out and your wet skin is losing heat more quickly.”

4. Cuddle. Snuggles really can keep you warm. “Each of us produces heat through our metabolic processes. We lose our heat to the environment as we maintain body temperature,” Smith said via email. “Increasing skin contact decreases opportunities for the heat to be lost to the environment around us. If two people are under a blanket both of their heat losses combined can increase the temperature under the blanket more quickly than either could do independently.”

5. Change how you perceive cold. Some people have trained their minds to perceive cold as an objective, acceptable sensation rather than something dreadful to control. The best ways to adapt include wearing clothing in layers then removing it, or gradually lowering the thermostat and putting on a sweater, Benjamin said.

Enjoying warm foods and beverages is a two-in-one solution: You get heat from the appliances when you cook the food, then warmth when you eat it.

6. Enjoy warm beverages and foods, and use the oven and stove to cook them. Since foods higher in fat and protein are metabolized slowly by the body, those could make you feel warmer, Smith said. “Consider hearty soups with beans and meat.” Slow cooking meals can help generate heat throughout the day.

Drinking warm beverages “certainly helps take the chill off,” Benjamin said. Leaving the oven or stove on is “a bad idea because it burns fuel,” Benjamin said, “but more importantly, people fall asleep, they forget and leave the stove on. Sometimes things on the stove can catch on fire. So like any tool, you should use it for the purpose in which it was designed.”

“It only has to go poorly once to be life changing,” Smith said. If you don’t have children or pets, when you’re done cooking and you turn off the oven, what doesn’t hurt is leaving the oven door open to let residual heat escape.

Cozying up underneath layers of clothing or blankets (or both) can help insulate you from the cold.

7. Layer on the clothes. “Layering is critical,” Smith said. “Even thin layers added together to increase one’s ability to retain heat … focus on keeping the torso warm. Often an extra shirt or vest can warm your hands and feet more than an extra pair of socks or gloves.” Inexpensive pairs of tights or long johns can be worn underneath clothes. However, be sure that layering doesn’t make your clothing tight, he added, since that could reduce blood flow and thus your body’s ability to get warm blood to those areas. Wearing a hat, too, can also keep the heat in.

8. Wear thick socks and slippers. Fuzzy socks, slippers or a pair of shoes you reserve for wearing around the house can add extra comfort.

9. Pile on the blankets. “The more layers you put on, the better it helps trap the air between you,” your sheets and your blankets, Benjamin said. Since you lose a lot of heat from your head while you’re under blankets, he added, wearing a skull cap can help also.

10. Embrace less breathable clothing and linens. Breathable linens (such as the cotton-based variety) are often recommended during the summer, but linens with other materials and higher thread counts may be better for winter since higher thread counts have more weaving per square inch.

Optimize your home and appliances

There are multiple ways to make your heating system work better, or to create your own warmth.

11. Work with the weather. Open your curtains or blinds to let the sun in during the day, or when outside is warmer than inside your home.

12. Seal your windows and doors. Even if your windows and doors are totally shut and locked, drafts can seep in through small crevices. You can use caulk or shrink film to seal those cracks. Placing inexpensive, transparent shower curtains over windows can keep the sun in but the cold draft out. For the bottoms of doors, cloth draft stoppers are “very effective,” Benjamin said.

13. Close off unoccupied rooms. By shutting the doors of rooms no one is using, you can create additional barriers between yourself and the cold outdoors. This can also aid preventing heat loss from the room you’re in.

14. Reverse your ceiling fan. If possible, send your ceiling fan in a clockwise direction so that it sends the warm air down.

15. Sit near indoor heaters. You can safely use portable heaters if they are space heaters that have automatic shutoffs and can be plugged into a wall outlet instead of an extension cord. Since space heaters are a common cause of fires, they should be at least 3 feet away from any drapes, bedding or furniture. To prevent high levels of carbon monoxide — which can cause potentially fatal poisoning — ensure you have a carbon monoxide monitor installed and that you don’t “use any type of outdoor gas heater or anything that is not electric,” Benjamin said.

16. Move anything that’s blocking heat vents or radiators. The heat will better circulate throughout your home that way.

17. Spend time and sleep in the upper levels of the house. Heat rises, so moving your working, sleeping and living spaces upward may be more comfortable.

18. After showering, don’t run the bathroom fan or close the door. Unless your bathroom is prone to growing humidity-induced mold, the warm steam from the shower can make the nearby air less dry and cool for a short period of time.

19. Buy magnetic vent covers from home improvement stores. Used to cover vents, they can be inexpensive and help to force heat to exit vents in the occupied rooms only.

20. Put down rugs or carpets. These can be warmer to the touch than bare floors.

21. Insulate your attic. If you can afford to, padding your attic with insulation from hardware stores can help to retain some of the heat you usually lose through the attic since heat rises.

22. Research what your residential area offers. Some locations may be running warming centers set up for safety during the pandemic.

Sitting near a fire is a method that's always reliable.

23. Light a fire. If your fireplace runs on wood instead of gas, a fire is another way to keep a room warm and enjoy a cozy night. “Make sure that your flue is properly opened and clean to make sure that smoke doesn’t come back in the home but goes properly up the flue,” Benjamin said. “When the fire is out, you should of course close the flue because it’s like having an open window.”

24. Keep warm and enjoy s’mores. If your state, city, county or neighborhood allows, have a (moderate-size) backyard bonfire to keep warm for a while.

25. Don’t light candles. Candles can emit a small amount of heat, but using them as a source of warmth can be dangerous. “People will light candles and go to sleep, and they fall over,” Benjamin said. “The cat comes in and kicks it over and starts a fire.”

With these tips in mind and any others you find, be “broadly thoughtful about how to stay warm in the winter,” he added. “If it sounds like it’s a bad idea, it probably is. Look it up and check it out before you do it.”

This story has been updated to reflect recent weather advisories.

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These Middle East flashpoints could trigger regional conflict that impacts oil prices

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Why investors should be wary of New Year ‘head fakes’ for this hot asset class

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The first trading day of the New Year looks set to challenge the Santa Rally theory, with Dow futures down over 200 points as bond yields surge. An Apple downgrade may not have helped investor confidence.

This week will bring the minutes of the Federal Reserve’s last meeting and important December jobs data.

“Data that comes in too hot will kill the idea of rate cuts starting as soon as March, and data that comes in too cold will kill the idea of a soft landing. It means Goldilocks must return from her Christmas trip to Aruba and appear this week,” says Michael Kramer, founder of Mott Capital Management.

Read: A stock investor’s guide to the first trading days of 2024

Onto our call of the day from MacroTourist blogger Kevin Muir, who sees a rally in small-cap stocks as one big theme for the coming year, though investors should beware of getting in too soon.

In a post, Muir draws on a 2021 observation from Raoul Paul, co-founder and CEO of Real Vision financial media platform, who posted on Twitter now X, at the time about the perils of piling into “head fakes” or new ideas in January.

Paul noted how hedge funds and asset managers start the new year with a clean investment slate, but then two weeks later start moving into so-called consensus Wall Street year-ahead trades. And once the rest of the investment world gets in, the trend reverses or corrects, and those managers get back to flat or have to start over.

Muir says given the Fed’s pivot away from monetary tightening at the end of 2023, small-caps will end up as stock leaders this year. A bull on that asset class, he flagged his readers to buy in early November and December.

After a tough year, the Russell 2000
RUT
rallied late in 2023 as it became clearer that Fed interest rate increases, particularly hard on smaller companies, were drawing to a close.

As per this Russell 2000 chart, Muir says he did get the timing right on that bullish call:

However, Muir says he’s concerned that the rally was mainly from “hedge fund covering,” and not a solid signal that the bear market for those stocks has ended.

One reason, he notes was that the stocks blasting higher at the end of 2023 were the most heavily shorted — he offers the Goldman Sach’s most-shorted index chart here:

MacroTourist

The chart is evidence of how hedge funds that got caught out when the Fed surprisingly guided toward interest rate cuts at the December meeting. Within a few hours of the Fed announcement, the Most-Short index had rallied 15%. But along with that, the ARKK Innovation ETF
ARKK
also shot higher, a red flag for Muir.

That short index is tightly correlated to ARKK and the Russell 2000 small-cap index, he said.

So says it’s possible the small-cap push was “just a hedge fund short-covering rally that will sag back down now that the buying has flamed out.” And based on Raoul Paul’s theory, it makes sense that hedge funds and other investors may be piling into the asset class.

Muir says he stands by his view that small-caps are cheap and deserving of gains. “However, if this small-cap rally is for real, then it can’t be led by crap. We can’t have the GS Rolling Most-Short leading the charge. We need quality small-cap stocks to rally,” he said.

So the correlation between broader small-cap indexes and the most-shorted index (also tightly correlated with ARKK) will have to break down.

“As a proxy for this index, and a hedge against my small-cap long position, I am shorting ARKK. So far, the short covering drove all these smaller capitalized stocks higher, but my bet is that an actual small-cap bull market will see much better differentiation, and that new small-cap leadership will emerge (and it won’t be ARKK),” he says.

The markets

U.S. stock index futures
ES00,
-0.67%

YM00,
-0.26%

NQ00,
-1.19%
are falling sharply as Treasury yields
BX:TMUBMUSD10Y

BX:TMUBMUSD02Y
climb. Gold
GC00,
+0.32%
is up, and oil
CL.1,
+0.14%
is up 2% after Iran sent warships to the Red Sea after the U.S. Navy sank some Houthi militia-backed boats. The Hang Seng
HK:HSI
fell 1.5% after weak China factory activity.

Key asset performance

 Last

 5d

 1m

 YTD

 1y
S&P 500

 4,769.83

 0.32%

 3.81%

 24.23%

 24.23%
Nasdaq Composite

 15,011.35

 0.12%

 4.94%

 43.42%

 43.42%
10 year Treasury

 3.933

 3.28

 -24.22

 5.23

 18.77
Gold

 2,082.50

 0.87%

 1.67%

 0.52%

 13.79%
Oil

 72.78

 -0.97%

 -0.70%

 2.03%

 -9.60%
Data: MarketWatch. Treasury yields change expressed in basis points.

The buzz

U.S. nonfarm payroll data for December is due Friday, with the Institute for Supply Management’s manufacturing report and minutes of the Dec. 12-13 Fed meeting both on Wednesday. Construction spending is due at 10 a.m. on Tuesday.

Read: Health of U.S. labor market looms large on markets’ radar this coming week

Apple
AAPL,
-2.97%
is down 2% in premarket after Barclays’ analysts cut the iPhone maker to underweight from equal weight, on signs of weak iPhone 15 and other hardware sales.

Voyager Therapeutics stock
VYGR,
+29.74%
is up 32% after the biotech announced a licensing deal with Novartis unit Novartis Pharma
NOVN,
+0.99%.

Joyy
YY,
-14.65%
is off 11% after Baidu
BIDU,
-3.40%
cancelled a $3.6 billion offer for the Singapore-based live-streaming platform.

Bitcoin
BTCUSD,
+4.23%
is at $45,447, a high not seen since April 2022, on ETF approval hopes.

Tesla
TSLA,
-0.55%
said it delivered 484,507 EVs in the fourth quarter, producing 494,989. Deliveries grew 83% to 1.81 million for 2023 as a whole. Tesla shares are slipping. Meanwhile, China’s BYD
002594,
-2.73%
sold 3.02 million electric vehicles in 2023, eclipsing Tesla a second-straight year.

Japan’s western coast was hit by several heavy earthquakes on New Year’s Day, leaving at least 30 people dead and more quakes could come. A collision between a Japan coast guard plane and a Japan Airlines flight that caught fire on the runway on Tuesday resulted in the deaths of five people.

Best of the web

This year, resolve to pack a ‘go bag’ to be ready for the next disaster: Here’s what to put in it

Why Suze Orman never goes out to dinner

Topless massages, cage fights and private flights: CEO mishaps of 2023

The chart

More on small-cap caution from Chris Kimble at See It Market. He points out that investors may be getting greedy as some big resistance levels approach for the Russell 2000:


See It Market

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

Ticker

 Security name
TSLA,
-0.55% 		Tesla
MARA,
+7.47% 		Marathon Digital Holdings
NIO,
-5.79% 		Nio
NVDA,
-3.27% 		Nvidia
GME,
-1.14% 		GameStop
AAPL,
-2.97% 		Apple
AMC,
 		AMC Entertainment
COIN,
-2.62% 		Coinbase GLobal
MULN,
-4.69% 		Mullen Automotive
RIOT,
+5.69% 		Riot Platforms

Random reads

New Year’s Eve in a Japanese cat bar.

Woman sues Hershey for $5 million over a faceless Reeses pumpkin.

Viral Burger King worker buys first home after crowdsourcing.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

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Worried about your drinking? Use Dry January to check it | CNN

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Sign up for CNN’s Stress, But Less newsletter. Our six-part mindfulness guide will inform and inspire you to reduce stress while learning how to harness it.



CNN
 — 

There are lots of great reasons to decide to go “dry” in January and give up alcohol. Perhaps you imbibed a bit too much over the holidays or want to start a healthy routine and can’t afford the calories or the zap in energy and motivation that drinking can bring.

“Or it may be someone who truly is starting to wonder or question their relationship with alcohol, and this is an opportunity to really explore that,” said Dr. Sarah Wakeman, medical director of the Substance Use Disorders Initiative at Massachusetts General Hospital.

“For some people saying, ‘I’m not going to drink this entire month,’ might be really hard, so trying to do so may show you how easy or difficult it is for you,” said neuropsychologist Dr. Sanam Hafeez, who conducts classes at Columbia University’s Teachers College.

What is the advice from experts on how to have a successful “dry January”? Read on.

It helps to be clear about your goal to make it a habit, said Wakeman, an associate professor of medicine at Harvard Medical School.

“The research we have on goal setting says goals are more likely to be achieved if they’re really relevant to you as an individual and not abstract like ‘I should stop drinking because drinking is bad,’ ” she said.

Concrete goals such as embracing new sleep habits or an exercise routine will help make giving up drinking easier, she said.

“I really want to stop drinking because I know when I drink heavily I don’t get up the next morning and I don’t work out is a very specific goal,” Wakeman said.

Additional motivation can come from the health gains you can make from reducing or eliminating alcohol, experts say.

“Drinking less over time can have really measurable benefits in your health in terms of your blood pressure, your risk of cancer, your risk of liver disease and other conditions,” Wakeman said.

“Over the course of a month, you may notice some short-term benefits like better sleep, a better complexion due to improvements in your skin, feeling more clearheaded and having more energy,” she added.

READ MORE: Why my ‘Sober October’ lasted a year

Many of us may be familiar with SMART goals from work or school settings. They are used to help people set attainable goals. The acronym stands for:

  1. Specific: Set an achievable goal, such as cutting back on drinking three days a week. You can add days until you reach your final goal.
  2. Measurable: How many drinks will you cut — and what are the drink sizes? A beer is 12 ounces, a glass of wine is 5 ounces and a serving of spirits is 1.5 ounces.
  3. Achievable: Make sure there are not a bunch of social engagements where alcohol is likely to be served during your month of abstention.
  4. Relevant: How is not drinking going to help me with my life and health?
  5. Time based: Set a reasonable time frame to finish your efforts. If you like, you can set another goal later.

“If you set a bar too high, you may fail, so it’s better to set smaller goals to achieve it,” Hafeez said. “Nothing starts without an honest conversation with yourself.”

Informing a few friends or family members of your goal can help you reach it, experts say. For some people it may work to announce their plan on social media — and invite others to join in and report back on their progress.

“That’s where I think ‘dry January’ has kind of caught on,” Wakeman said. “If you publicly state you’re going to do something, you’re more likely to stick with it than if you keep it to yourself.”

READ MORE: How much you drink could have an influence on how your teen drinks

Drinking is often associated with social gatherings or fun times. That can train your brain to see alcohol as a positive. You can combat those urges by replacing your drink of choice with something equally festive or flavorful, experts say.

“For some people it can be just sparkling water, and for other people it’s actually having a mocktail or some sort of (nonalcoholic) drink that feels fun and celebratory,” Wakeman said.

“Substituting one behavior for another can work because you’re tricking your brain,” Hafeez said. “That can absolutely help you avoid temptation.”

An entire industry is devoted to making nonalcoholic drinks that taste (at least a bit) like the real thing. Some even claim to have added ingredients that are “calming” or “healthy.”

“I’m skeptical of anything that claims to relax you or have amazing health benefits that comes in a glass regardless of what it is,” Wakeman said. “But if it’s an alternative that allows you to feel like you’re not missing out on a social situation and helps you make the changes that you want to your alcohol consumption, I don’t think there’s any downside to that.”

READ MORE: How to stop using alcohol as a confidence crutch

5. Track your progress, goal and feelings

Even if you don’t end up cutting out all alcohol, tracking your emotions and urges to discover your triggers can be helpful, Wakeman said.

“Even just measuring your behavior, whether it’s alcohol or exercise or your diet, can be an intervention in and of itself,” she said.

“Even if someone’s not yet ready to make changes, just keeping a diary of when you’re drinking, what situations you’re drinking more and how you’re feeling at those times, can really help you identify sort of trigger situations where you may be more likely to drink,” Wakeman added.

There’s an additional piece that’s important in accomplishing a “dry January,” experts say. It’s important to notice if you — or a loved one — are showing any negative symptoms from cutting back or eliminating alcohol. It could be a sign that you need professional help to reach your goal.

“The first thing to be mindful of is whether or not you actually have an alcohol use disorder,” Wakeman said. “If someone’s been drinking very heavily ev

ery single day and is at risk for withdrawal symptoms, then it can actually be dangerous to stop abruptly.”

A person with an alcohol use disorder, who has gotten used to having a certain level of alcohol in their body every day, can go into withdrawal and experience severe physical symptoms such as shakiness, sweating, rapid heart rate and seizures.

“That would be a real indication that you need to talk to a medical professional about getting medical treatment for withdrawal and not stopping on your own,” Wakeman said.

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The Magnificent 7 dominated 2023. Will the rest of the stock market soar in 2024?

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

2023 will go down in history for the start of a new bull market, albeit a strange one.

Despite some year-end catch-up by the rest of the S&P 500 index, megacap technology stocks, characterized by the so-called Magnificent Seven, have dominated gains for the large-cap benchmark
SPX,
which is up 23.8% for the year through Friday’s close.

That’s the result of “extreme speculation,” according to Richard Bernstein, CEO and chief investment officer of eponymously named Richard Bernstein Advisors. And it sets the stage for investors to take advantage of “once-in-a-generation” investment opportunities, he argued, in a phone interview with MarketWatch.

MarketWatch’s Philip van Doorn last week noted that, weighting the Magnificent Seven — Apple Inc.
AAPL,
-0.55%
 , Microsoft Corp.
MSFT,
+0.28%,
 Amazon.com Inc.
AMZN,
-0.27%,
 Nvidia Corp.
NVDA,
-0.33%,
 Alphabet Inc.
GOOG,
+0.65%

GOOGL,
+0.76%,
 Tesla Inc.
TSLA,
-0.77%,
 and Meta Platforms Inc. 
META,
-0.20%
— by their market capitalizations at the end of last year, the group had contributed 58% of this year’s roughly 26% total return for the S&P 500, and that’s down from a breathtaking 67% at the end of November.

The chart below shows that the percentage of stocks in the S&P 500 that have outperformed the index in the year to date remains well below the median of 49% stretching back to 1990:


Richard Bernstein Advisors

Meanwhile, the tech-heavy Nasdaq Composite
COMP
has soared more than 40% this year, while the more cyclically weighted Dow Jones Industrial Average
DJIA,
which hit a string of records this month, is up 12.8%.

The narrowness of the rally gave some technical analysts pause over the course of the year. They warned that that it was uncharacteristic of early bull markets, which typically see broader leadership amid growing confidence in the economic outlook.

Bernstein, previously chief investment strategist at Merrill Lynch, sees parallels with the late-1990s tech bubble, which holds lessons for investors now.

The market performance indicates investors have convinced themselves there are only “seven growth stories,” he said. It’s the sort of myopia that’s characteristic of bubbles.

The consequences can be dire. In the 1990s, investors focused on the economy-changing potential of the Internet. And while those technological advances were indeed economy-changing, an investor who bought the tech-heavy Nasdaq at the peak of the bubble had to wait 14 years to get back to break-even, Bernstein noted.

Today, investors are focused on the economy-changing potential of artificial intelligence, while looking past other important developments, including reshoring of supply chains.

“I don’t think anyone is arguing AI won’t be an economy-changing technology,” he said, “ the question is, what’s the investing opportunity.”

For his part, Bernstein argues that small-cap stocks; cyclicals, or equities more sensitive to the economic cycle; industrials; and non-U.S. stocks are all among assets poised to play catch-up.

“I don’t think one has to be overly sexy on this one…it may not make a huge difference as to how you decide to execute and invest” in those areas, he said. “There’s a bazillion different ways to play this.”

Those areas are showing signs of life in December. The Russell 2000
RUT,
the small-cap benchmark, has surged more than 12% in December versus a 4.1% advance for the S&P 500. The Russell still lags behind by a wide margin year to date, up 15.5%, or more than 8 percentage points behind the S&P 500.

Meanwhile, an equal-weighted version of the S&P 500
XX:SP500EW,
which incorporates the performance of each member stock equally instead of granting a heavier weight to more valuable companies, has also played catchup, rising 6.2% in December. It’s now up 11% in 2023, still lagging behind the cap-weighted S&P 500 by more than 8 percentage points.

Bernstein sees early signs of broadening out, but expects it to be an “iterative process.” What investors should be aiming for, he said, is “maximum diversification,” in direct contrast to 2023’s historically narrow market, which reflects investors rejecting the benefits of diversification and taking more concentrated positions in fewer stocks.

To be sure, while the Magnificent Seven-dominated stock-market rally has attracted plenty of attention, it doesn’t mean those individual stocks have been the sole winners in 2023.

“I will say, ‘magnificent’ is in the eye of the beholder,” said Kevin Gordon, senior investment strategist at Charles Schwab, in a phone interview.

The seven stocks that account for such a large share of the S&P 500’s gains do so mostly due to their extremely “mega” market caps rather than outsize price gains. And that’s just, by definition, how market-cap-weighted indexes work, analysts note.

That doesn’t mean the megacap stocks are necessarily the best performers over 2023. While Nvidia, up 243%, and Meta, up 194%, top the list of year-to-date price gainers in the S&P 500, Apple Inc.
AAPL,
-0.55%
is only the 59th best performing stock, with a 49% gain. Combine that with a $3 trillion market cap, however, and Apple proves one of the biggest movers of the overall index.

What was bizarre about the 2023 rally wasn’t so much the megacap tech performance, Gordon said, but the fact that the rest of the market languished to such a degree until recently.

Clarity around the economic outlook and interest rates help clear the way for the rest of the market to play catch-up, he said. Fears of a hard economic landing have faded, while the Federal Reserve has signaled its likely finished raising rates and is on track to deliver rate cuts in 2024.

For stock pickers that didn’t latch on to the few winners, 2023 was brutal. Passive investors who just bought S&P 500-tracking ETFs should feel good.

So why not just chase the index? Bernstein argues that could spell trouble if the megacap names are due to falter. That could make for a mirror image of this year where gains for a wider array of individual stocks is offset by sluggish megacap performance.

Gordon, however, played down the prospect of “binary outcomes” in which investors sell megacaps and buy the rest of the market.

If troubled segments of the economy, such as the housing sector, recover in 2024, investors “could definitely see a scenario where the rest of the market catches up but it doesn’t have to be at the expense of highfliers,” he said.

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Universal banks on ‘Migration’ to expand its animation lead over Disney

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Universal and Illuminations latest animated film centers on a family of ducks who decides to leave the safety of a New England pond for an adventurous trip to Jamaica. However, their well-laid plans quickly go awry when they get lost and wind up in New York City.

Universal

Disney dropped the animation crown. Universal has picked it up.

And, with “Migration” opening Friday, the studio is looking to strengthen its grip.

“Migration,” a comic tale about a family of New England ducks that leave their pond for Jamaica, but end up in New York City, is expected to tally $25 million during its domestic debut. Universal has more conservative expectations, forecasting between $10 million and $15 million in ticket sales for the film’s opening.

While that pales in comparison to the $100 million-plus debuts of Illumination/Universal’s “The Super Mario Bros. Movie” and the latest “Minions” film, it’s comparable to the studio and DreamWorks Animation’s “Puss in Boots: The Last Wish,” which ran in theaters for several months, securing nearly $500 million globally.

“‘Migration,’ with solid word-of-mouth and strong reviews, will have to be judged more on its long-term results than the opening weekend splash,” said Paul Dergarabedian, senior media analyst at Comscore.

Disney’s most recent animated film “Wish” failed to connect with audiences. After generating $31.6 million domestically over the five-day Thanksgiving holiday, the film has grossed a total of $55.2 million in the U.S. and Canada. Globally, the film has reached $127.1 million. The film had a budget of $200 million, not including marketing costs.

For comparison, “Trolls Band Together,” which was released the week before Thanksgiving, secured $30 million for its three-day debut and nearly $180 million worldwide. The film had a budget of $95 million, not including marketing costs.

Representatives from Disney did not immediately respond to CNBC’s request for comment.

How Disney lost the crown

Ariana DeBose stars as Asha in Disney’s new animated film “Wish.”

Disney

Disney established its animated feature empire in the early 20th century with 1937’s “Snow White and the Seven Dwarfs” and continued to dominate, more or less, into the 1980s and 1990s with “The Little Mermaid” and “Beauty and the Beast.”

Later, it acquired Pixar, which together with Walt Disney Animation, generated billions in box-office receipts for the company.

“The world of feature animation has been dominated for decades by Disney and for good reason,” said Dergarabedian. “They set the gold standard.”

Then came the Covid pandemic. While theaters closed, Disney sought to pad its fledgling streaming service Disney+ with content, stretching its creative teams thin, and sending theatrical movies during the pandemic straight to digital.

The decision trained parents to seek out new Disney titles on streaming, not theaters, even when Disney opted to return its films to the big screen. Compounding Disney’s woes was a general sense from audiences that the company’s content had grown overly existential and too concerned with social issues beyond the reach of children.

As a result, no Disney animated feature from Pixar or Walt Disney Animation has generated more than $480 million at the global box office since 2019.

“I think what’s changed is that Disney doesn’t get the benefit of the doubt,” said Josh Brown, CEO at Ritholtz Wealth Management and a CNBC contributor. “And people will not go to a movie just because it’s the latest Disney movie in the way that previous generations did.”

Universal appeal

Meanwhile, Universal’s two animation arms — Illumination and DreamWorks — have thrived.

Illumination’s “Minions: The Rise of Gru,” which opened in 2022, tallied $942 million worldwide, DreamWorks’ “Puss in Boots: The Last Wish” capped at $485 million after its holiday 2022 opening, and Illumination’s “The Super Mario Bros. Movie” soared to more than $1.3 billion in 2023.

Even the Magic Kingdom was impressed with the box office of “Super Mario.” Disney CEO Bob Iger praised the rival studio back in May during the company’s fiscal second-quarter earnings call.

But as moviegoers have returned to cinemas in the wake of the pandemic, more are gravitating toward Universal’s fare.

“Simply put, Illumination Animation’s only agenda is entertainment,” said Jeff Bock, senior box-office analyst at Exhibitor Relations. “Their animated films are sweet and simple and family audiences appreciate that. Disney sometimes attempts to pack too much into their animated features, and lately have been losing sight of the simplicity of the genre.”

Not to mention, Universal has been revisiting tried and true fan-favorite stories and characters. In fact, Illumination hasn’t released a nonfranchise film since 2016, and only three of the last 10 DreamWorks features have been original stories.

For comparison, of the last eight films released by a Disney animation studio, seven have been original films with just 2022’s “Lightyear,” a “Toy Story” spinoff, tied to an existing franchise. Previously, Disney has thrived bringing new animated material to audiences, but in the post-pandemic world, it has struggled.

It is the exact opposite strategy of Disney’s live-action theatrical releases, which have relied heavily on established franchises. Think “Indiana Jones and the Dial of Destiny,” “The Little Mermaid,” Marvel franchise films and “Haunted Mansion.”

Iger has said that Disney will continue to make sequels, without apology, but admitted that the company needs to be more selective in which franchises it revisits.

“I think there has to be a reason to make them, you have to have a good story,” Iger said during The New York Times’ DealBook Summit in late November.

“Minions: The Rise of Gru” is the sequel to the 2015 film, “Minions,” and spin-off/prequel to the main “Despicable Me” film series.

Universal

In animation, returning to popular characters and worlds is an easy way to capture the attention of parents and kids.

“Because they have seen these characters and related stories before, they have high confidence that they will be high quality, entertaining and ‘brand safe’ for their kids,” said Peter Csathy, founder and chair of advisory firm Creative Media. “And they may even anticipate franchise animated films as much as their kids.”

In developing consistent franchise content like Minions and Trolls, Universal is now able to introduce a new film like “Migration” with a sense of clout. Parents who see that the film is from the same studio that brought other fan favorites to the big screen are then more likely to come out to see it.

It’s what Pixar was able to do so well for nearly three decades.

“With ‘Minions,’ ‘Secret Life of Pets’ and ‘Sing,’ I think Illumination is a brand people are aware of by now,” said Bock. “And that awareness will boost ‘Migration’s’ flight pattern, likely extending its box-office run. That’s key. The long play.”

So far, “Migration” has generally favorable reviews from critics. If audiences respond well, and spread the word, the film could see a solid run, adding to the prestige of Universal’s animation brand.

“The kids animation market opportunity will never grow old, so those playing at the top of the game – as is Illumination – hold the promise and possibility of becoming the next go-to brand for quality animation after Pixar,” said Csathy.

Next year, Disney and Pixar are set to release “Inside Out 2” in June, while Universal and Illumination’s “Despicable Me 4” is scheduled to hit theaters weeks later in July.

Disclosure: NBCUniversal is the parent company of Universal Pictures and CNBC.

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Nike sinks 12% after it slashes sales outlook, unveils $2 billion in cost cuts

Post By Business , , , , , , , , , , , , ,

Nike on Thursday unveiled plans to cut costs by about $2 billion over the next three years as it lowered its sales outlook.

The stock fell about 12% in premarket trading Friday. Nike shares were up 4.7% so far this year through Thursday’s close, lagging far behind the S&P 500’s gains for the year. Retailer Foot Locker, which has leaned heavily on Nike products, fell about 8% in extended trading.

Nike now expects full-year reported revenue to grow approximately 1%, compared to a prior outlook of up mid-single digits. In the current quarter, which includes the second half of the holiday shopping season, Nike expects reported revenue to be slightly negative as it laps tough prior year comparisons, and sales to be up low single digits in the fourth quarter.

“Last quarter as I provided guidance, I highlighted a number of risks in our operating environment, including the effects of a stronger U.S. dollar on foreign currency translation, consumer demand over the holiday season and our second half wholesale order books. Looking forward, the impact of these risks is becoming clearer,” finance chief Matthew Friend said on a call with analysts.

“This new outlook reflects increased macro headwinds, particularly in Greater China and EMEA. Adjusted digital growth plans are based on recent digital traffic softness and higher marketplace promotions, life cycle management of key product franchises and a stronger U.S. dollar that has negatively impacted second-half reported revenue versus 90 days ago.”

The company still expects gross margins to expand between 1.4 and 1.6 percentage points. Excluding restructuring charges, it expects to deliver on its full-year earnings outlook.

As part of its plan to cut costs, Nike said it’s looking to simplify its product assortment, increase automation and its use of technology, streamline the overall organization by reducing management layers and leverage its scale “to drive greater efficiency.”

It plans to reinvest the savings it gets from those initiatives into fueling future growth, accelerating innovation and driving long-term profitability.

“As we look ahead to a softer second-half revenue outlook, we remain focused on strong gross margin execution and disciplined cost management,” Friend said in a press release.

The plan will cost the company between $400 million and $450 million in pretax restructuring charges that will largely come to fruition in Nike’s current quarter. Those costs are mostly related to employee severance costs, Nike said.

Earlier this month, The Oregonian reported that Nike had been quietly laying off employees over the past several weeks and had signaled that it was planning for a broader restructuring. A series of divisions saw cuts, including recruitment, sourcing, brand, engineering, human resources and innovation, the outlet reported.

The company didn’t immediately respond to CNBC’s request for comment on The Oregonian’s report.

During Nike’s fiscal second quarter, it posted a strong earnings beat, indicating its cost-savings initiatives were already underway. But, for the second quarter in a row, it fell short of sales estimates, which is the first time Nike has seen consecutive quarters of revenue misses since 2016.

Here’s how the sneaker giant performed compared to what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: $1.03 vs. 85 cents expected
  • Revenue: $13.39 billion vs. $13.43 billion expected

The company reported net income for the three-month period that ended Nov. 30 was $1.58 billion, or $1.03 per share, compared to $1.33 billion, or 85 cents per share, a year earlier.

Sales rose about 1% to $13.39 billion, from $13.32 billion a year earlier.

Nike is considered a leader among industry peers such as Lululemon, Adidas and Under Armour, but its profits have been under pressure and it has been in the middle of a strategy shift that has seen it rekindle its relationships with wholesalers including Macy’s and Designer Brands, the parent company of DSW.

Focus on margins

For the past six quarters, Nike’s gross margin has declined compared to the prior-year period, but the story turned around on Thursday. Nike’s gross margin increased 1.7 percentage points to 44.6%, slightly ahead of estimates, according to StreetAccount.

This time last year, Nike’s inventories were up a staggering 43% and the retailer was in the middle of an aggressive liquidation strategy to clear out old styles and make way for new ones, which weighed heavily on its margins. Several quarters later, however, Nike is in a far better inventory position, which is a boon for margins.

During the quarter, inventories were down 14% to $8 billion.

Nike’s gross margin turnaround came as the retail environment overall has been flooded with steep promotions and discounts as retailers struggle to convince inflation-weary consumers to pay full price. In September when Nike reported fiscal first-quarter earnings, finance chief Friend said Nike was “cautiously planning for modest markdown improvements” given the overall promotional environment.

While the company repeatedly pointed out the overall promotional environment, it said the average sales price of footwear and apparel were up during the quarter and the average selling price grew across channels with higher-priced products proving particularly “resilient.”

The company attributed the gross margin uptick to “strategic pricing actions and lower ocean freight rates,” saying it was partially offset by unfavorable foreign exchange rates and higher product input costs.

As one of the last retailers to report earnings before the December holidays, investors are eager to hear good news when it comes to Nike’s expectations for the crucial shopping season. When many retailers issued holiday-quarter guidance in November, the commentary was largely tepid and cautious as companies looked to under promise and over deliver in an increasingly uncertain macro environment.

Nike struck a note that hit somewhere in the middle. Its sales miss and focus on cost cuts signal larger demand issues, but CEO John Donahoe was upbeat when discussing Black Friday week sales.

“We outpaced the industry, driving growth of close to 10%, Nike digital had its strongest Black Friday week ever and a record number of consumers shopped in our stores over the long Thanksgiving weekend,” said Donahoe.

China is another key part of the Nike story. As the region emerges from the Covid-19 pandemic and widespread lockdowns, China’s economic recovery has so far been a mixed bag. In November, retail sales climbed 10.1% in the region.

It was the fastest pace of growth since May, but those numbers were up against easy comparisons and the growth was largely driven by car sales and restaurants, according to a research note from Goldman Sachs.

During the quarter, China sales came in at $1.86 billion, which fell short of the $1.95 billion analysts had expected, according to StreetAccount. Sales in Europe, the Middle East and Africa also fell short of estimates, but revenue came in ahead in the North America, Asia-Pacific and Latin America markets, according to StreetAccount.

Read the full earnings release here.

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2024 energy outlook: What investors can expect from crude prices, and how to play it

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