Biden to tap Brainard, Bernstein to economic team, leaving Fed gap
President Joe Biden is expected on Tuesday to name Federal Reserve Vice Chair Lael Brainard and his trusted confidant Jared Bernstein as his top economic advisers, a source familiar with the matter said, as he aims to convince skeptical Americans his policies are working.
Brainard’s switch from the independent central bank to a White House role comes as the Fed navigates extensive challenges of its own as it fights to bring down inflation, leaving an intellectual and political hole at a key moment.
Brainard, an experienced fiscal and monetary affairs official, would replace White House National Economic Council (NEC) Director Brian Deese, who has announced his resignation.
In addition, Biden is expected to elevate trusted confidant Jared Bernstein to replace Cecilia Rouse as chair of the Council of Economic Advisers, the source said. Rouse, the first Black American to hold the post, heads back to Princeton University in March, after helping steer the U.S. economy through high inflation to record job growth.
The White House declined to comment. Bloomberg News first reported the changes.
FDA declines to review Soligenix’s cancer drug; shares sink
The U.S. Food and Drug Administration (FDA) has declined to review Soligenix Inc’s application seeking approval of its cancer treatment, the drug developer said on Tuesday, sending its shares down more than 30% in early trading.
The application was rejected on grounds that it was insufficient to permit a review, and the company will work with the agency to clarify a path forward for the treatment.
The drug, HyBryte, is a light-activated ointment to be applied to skin lesions caused by cutaneous T-cell lymphoma – a rare type of cancer that begins in the white blood cells and attacks the skin.
HyBryte is the New Jersey-based company’s lead experimental therapy and Soligenix had previously expected the drug to be approved in the second half of 2023. It had filed the marketing application to the FDA in December.
In November, the company said it was assessing several strategic options including merger and acquisition opportunities. It had $16.9 million in cash as of Sept. 30.
The application was based on a late-stage study in which 16% patients receiving the drug achieved at least a 50% reduction in their lesions, compared with only 4% of patients in the placebo group at 8 weeks during the first treatment cycle.
There is no cure for cutaneous T-cell lymphoma, which affects over 25,000 individuals in the United States, according to the company.
Burger King parent Restaurant Brands names operating chief Kobza as CEO
Burger King owner Restaurant Brands International Inc on Tuesday named company veteran and Chief Operating Officer (COO) Joshua Kobza as its new chief executive.
Kobza, who will take charge on March 1, became the COO in 2019 after serving as Restaurant Brands’ finance chief between 2013 and 2018.
The 36-year-old has also held several senior roles at the company and played a key role in its acquisitions of the Tim Hortons coffee chain in 2014 and fried chicken chain Popeyes in 2017, Restaurant Brands said.
Separately, the company edged past Wall Street estimates for quarterly revenue, boosted by strong demand at three of its main restaurant chains.
However, profit fell short of expectations on higher operating expenses.
Like other fast food companies, Toronto, Canada-based Restaurant Brands has been grappling with elevated costs of transportation, labor and raw materials, and has had to raise prices of its menu items over the past year.
Total revenue rose about 9% to $1.69 billion in the fourth quarter ended Dec. 31, compared to estimates of $1.67 billion, according to IBES data from Refinitiv.
Excluding items, Restaurant Brands earned 72 cents per share, compared with expectations of 73 cents.
Marriott forecasts strong profit as travelers shrug off recession risks
Marriott International Inc on Tuesday forecast first-quarter adjusted profit above Wall Street estimate after the U.S.-based hotel operator benefited from strong travel demand even as the prospects of a global economic recession persist.
Pent-up desire to travel coupled with a strong U.S. dollar and flexible work arrangements have enabled hotel operators to boost their margins through the key holiday season.
The company expects its adjusted profit in the current quarter to come in between $1.82 and $1.88 per share, compared with $1.66 per share, as per Refinitiv data.
Marriott, which owns hotels such as Sheraton, Westin and St. Regis, posted a 28.8% rise in its revenue per available room (RevPAR), a key measure for a hotel’s top-line performance, in the fourth quarter on a constant-currency basis.
Excluding special items, the company earned $1.96 per share, ahead of average analysts’ expectations of $1.83 per share. Its quarterly revenue rose about 33% to $5.92 billion, compared with an estimate of $5.47 billion.
Coca-Cola forecasts upbeat annual profit on steady demand, price hikes
Coca-Cola Co on Tuesday forecast 2023 profit growth above Wall Street expectations after edging past fourth-quarter revenue estimates, as demand for its sodas remains resilient in the face of multiple price hikes to tackle higher costs.
Coca-Cola’s near duopoly in the global carbonated drinks market along with PepsiCo has made it easier for the company to raise prices over the last few quarters to counter higher freight, commodity and labor costs.
The soda giant also saw an increase in operating margin for the first time in three quarters.
Average selling prices rose 12% in the fourth quarter, the maker of Sprite and Fanta said, while unit case volumes slipped 1%.
Coca-Cola forecast full-year adjusted earnings per share to rise between 4% and 5%, compared to the average analyst estimate of 2.96% growth, according to IBES data from Refinitiv.
The company sees 2023 organic revenue growth of 7% to 8%.
The beverage maker’s fourth-quarter net revenue rose 7% to about $10.1 billion compared with estimates of about $10 billion.
Adjusted profit came in line at 45 cents per share, the first time in three years the company failed to beat expectations.
U.S. stocks sink on inflation data
The major U.S. benchmarks are down across the board in the wake of the latest inflation report showing a 6.4% rise in January on an annual basis, while prices held steady vs. the prior month. The latest data may keep the Federal Reserve on an aggressive tightening path for interest rates.
In earnings, shares of Coke and Occidental Petroleum bucked the downtrend following positive earnings.
Commodities like oil and gold also slipped, with the yellow metal off roughly 0.09% to $1,861.90 an ounce and oil off almost 2.73% to $77.95 a barrel.
Oil reserves hit 1983 low after Biden’s sell, price of crude plummets
The price of oil continues to fall on Tuesday, slipping roughly 1.5% to under $80 a barrel after the Biden administration announced another sale of oil from the Energy Department’s Strategic Petroleum Reserve (SPR).
According to the announcement, there are 26 million barrels set to be delivered to the market from April 1 to June 30, which will take the number of barrels in the reserve to a new low dating back to 1983.
Unlike the largest-ever drawdown of the SPR that Biden announced in response to Russia’s war in Ukraine, the latest release of 26 million barrels is in response to a requirement included in two laws enacted by Congress during the Obama administration under the Bipartisan Budget Act of 2015 and the Fixing America’s Surface Transportation (FAST) Act.
The announcement comes ahead of a potential uptick in gas prices as the U.S. nears the summer driving season.
Currently, West Texas Intermediate crude is off approximately 2% year-to-date after slipping around 14% the last year.
Ford shedding 3,800 jobs in Europe
The Ford Motor Company will cut around 3,800 jobs in product development and administration across Europe to cut global costs be more competitive in the electric vehicle market.
One in nine jobs will be lost including 2,300 at the carmaker’s Cologne and Aachen sites in Germany, 1,300 in the UK and 200 in the rest of Europe.
The U.S. group will retain around 3,400 engineers in Europe, while cuts in the UK, which amount to one in five of the workforce there, will be mostly at the carmaker’s research center in Dunton, southeast England.
The cuts in Germany equate to around 12% of the workforce. Ford said it intended to achieve the job reductions through voluntary programs.
Latest consumer inflation data
The consumer price index for January rose more than expected year-over-year, up 6.4%, while prices held compared to the prior month. The latest read presents ongoing challenges for the Federal Reserve’s inflation battle.