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5 things to know before the stock market opens Monday

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5 Things to Know

Here are the most important news, trends and analysis that investors need to start their trading day:

1. Wall Street set to start the week lower after Friday’s rally

Traders work on the floor of the New York Stock Exchange (NYSE) on October 15, 2021 in New York City.
Spencer Platt | Getty Images

Dow futures dropped more than 150 points Monday ahead of a busy week for corporate earnings against the backdrop of increasing U.S. oil prices and a tick-up in bond yields. Dow component Disney also pressured the broader market, losing more than 2% in the premarket after Barclays downgraded the stock to equal weight from overweight, citing concerns about a significant slowdown in growth for the Disney+ streaming service. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq rallied Friday and for all of last week.

  • The flood of earnings takes a pause Monday but picks back up Tuesday with Netflix, Johnson & Johnson, United Airlines and Procter & Gamble reporting.
  • So far, 41 S&P 500 companies have delivered third-quarter results, with 80% of them topping EPS expectations, according to data from FactSet.
  • Taking into account those already out and estimates for the rest, third-quarter profit growth would total 30%, the third-highest quarterly profit growth rate for S&P 500 firms since 2010.
  • The Dow was less than 1% from its Aug. 16 record close. The S&P 500 was nearly 1.5% away from its Sept. 2 record close. The Nasdaq was 3.1% from its Sept. 7 record close.

2. WTI tops $83 per barrel; bond yields move higher

U.S. oil prices, as measured by West Texas Intermediate crude, jumped another 1%, topping $83 per barrel, their highest level since October 2014. Behind the march higher are continued recovering demand as Covid-depressed business activity picks up, and as high natural gas and coal prices encourage a switch to fuel oil and diesel for power generation. WTI was already up three straight sessions and surged 3.7% last week for its eighth positive week in a row, the best weekly winning streak May 2015.

The 10-year Treasury yield started the week moving back up toward 1.62%. Before topping those levels earlier this month, the last time it was that high was in June. The 10-year yield, which moves inversely to price, was boosted Friday after data showed that U.S. retail sales rose by 0.7% in September, versus an expected decline of 0.2%. Industrial production figures for September are out at 9:15 a.m. ET, with estimates calling for a 0.2% increase following a 0.4% jump in August.

3. China GDP disappoints, third-quarter growth slows to 4.9%

Many factories had to stop production in late September as a surge in the price of coal and a shortage of electricity prompted local authorities to abruptly cut off power. The struggles of giant developer China Evergrande came to the forefront in August. Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s estimates.

4. ProShares says bitcoin ETF set to debut Tuesday

Bitcoin on display.
Chesnot | Getty Images

Bitcoin crept close to its April all-time highs near $65,000, rising about 1.5% to more than $61,000 early Monday, before turning lower. An ETF from ProShares, which will track the bitcoin futures market, will begin trading on the NYSE on Tuesday under the ticker BITO, the company confirmed. The world’s biggest digital currency hit a six-month high above $60,000 on Friday in anticipation of ETFs coming to market. After April’s record, bitcoin, known for its volatility, slumped and even traded below $29,000 in June before recovering.

5. Apple likely to finish transforming its MacBook lineup

2020 MacBook Air with M1 chip
Todd Haselton | CNBC

Apple is holding a launch event Monday to announce new products, likely including a redesigned MacBook Pro. The company has a chance to drive continued momentum to its Macs ahead of the holiday shopping season, especially since it’s expected to announce more computers that run on its own chips instead of Intel’s processors. Last month, Apple announced and subsequently released new iPhones, iPads and Apple Watches, leaving Macs as the remaining major product line that hasn’t been updated this fall. Apple is also likely to provide a release date for macOS Monterey, the latest version of Mac software, which was announced in June but has not yet been officially released.

— Reuters contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC’s coronavirus coverage.

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5 things to know before the stock market opens Thursday

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5 Things to Know

Here are the most important news, trends and analysis that investors need to start their trading day:

1. Dow set to drop after hitting an intraday record

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 20, 2021.
Brendan McDermid | Reuters

2. Southwest, American report adjusted losses but better revenues

A Southwest Airlines Co. Boeing 737 passenger jet arrives at Midway International Airport (MDW) in Chicago, Illinois, U.S., on Monday, Oct. 11, 2021.
Luke Sharrett | Bloomberg | Getty Images

Southwest Airlines on Thursday reported a third-quarter profit thanks to a boost from federal payroll aid. However, excluding one-time items, the carrier posted a per-share loss of 23 cents. Revenue was also better than analysts had expected. Southwest earlier this month canceled more than 2,000 flights, blaming the issues on bad weather in Florida and air traffic control issues compounded by staffing shortages. The airline said the cancellations and customer refunds cost $75 million. Shares of Southwest — up just 6% this year — rose slightly in the premarket.

Pilots talk as they look at the tail of an American Airlines aircraft at Dallas-Ft Worth International Airport.
Mike Stone | Reuters

American Airlines on Thursday reported a profit for the third quarter thanks to federal payroll support. Excluding one-time items, American posted a loss of 99 cents per share. Revenue for the quarter was also better than expectations. Shares of American — up nearly 24% in 2021 — gained 1% in the premarket.

3. Tesla beat on earnings, revenue; delivered lots more cars

A Tesla car charges at a Tesla Supercharger station on April 26, 2021 in Corte Madera, California.
Justin Sullivan | Getty Images

Shares of Tesla — up more than 20% in 2021 and up 100% over the past 12 months — slipped 1% in Thursday’s premarket, the morning after the electric automaker reported third-quarter earnings and revenue that best estimates. Tesla delivered about 73% more vehicles than it had in the same quarter a year ago. Despite citing a variety of challenges, including semiconductor shortages and rolling blackouts, Tesla reiterated prior guidance that it expects to “achieve 50% average annual growth in vehicle deliveries” over a multiyear horizon.

4. WeWork to go public in a SPAC deal at much lower valuation

General view of WeWork Weihai Road flagship is seen on April 12, 2018 in Shanghai, China. World’s leading co-working space company WeWork will acquire China-based rival naked Hub for 400 million U.S. dollars. (Photo by Jackal Pan/Visual China Group via Getty Images)
VCG | Getty Images

WeWork is set to start trading as a public company Thursday, two years after its much-anticipated planned IPO imploded due to investor concerns over its business model and founder Adam Neumann’s management style. After Neumann was ousted, Japan’s SoftBank, already a major investor, bailed out the teetering WeWork. In March, the office-sharing company agreed to merge and go public in a deal with special purpose acquisition company BowX Acquisition. It values WeWork at $9 billion, a far cry from its steep valuation in 2019 of $47 billion.

5. Trump announces social media platform launch plan, SPAC deal

Homepage and app announcement of “Truth Social”. Former US President Donald Trump wants to start an alternative social network. Apart from the announcement, however, there is not much to see yet.
Christoph Dernbach | picture alliance | Getty Images

Former President Donald Trump announced Wednesday he will be launching his own media network, including a social media platform. The app appears to be the first project of the Trump Media and Technology Group, which will go public through a SPAC merger with Digital World Acquisition. That’s according to an announcement tweeted out by spokeswoman Liz Harrington. Trump, while president, was notoriously banned by major social media giants earlier this year, following his posts related to the Jan. 6 riot at the U.S. Capitol.

— Reuters contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC’s coronavirus coverage.

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Sustainable jet fuel targets could push food prices higher, Ryanair CEO O’Leary warns

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Sustainable Future

  • As concerns about sustainability and the environment mount, discussions about aviation have increasingly focused on how new innovations and ideas could reduce the sector’s environmental footprint.
  • In comments made during a discussion at CNBC’s Sustainable Future Forum, Michael O’Leary says: “I do worry over the longer term, though, on sustainable aviation fuels … what’s that going to do to food prices going forward?”
  • Ryanair and Trinity College Dublin launched a sustainable aviation research center backed by a 1.5 million euro ($1.75 million) donation from the airline.  

The CEO of Ryanair has acknowledged the need for ambitious sustainable aviation fuel targets while also expressing concerns about how food prices could be affected.

During a discussion at CNBC’s Sustainable Future Forum on Wednesday, Michael O’Leary said his firm was investing “a lot of money” with Trinity College Dublin on research into sustainable aviation fuel, or SAF. In April, the two organizations launched a sustainable aviation research center backed by a 1.5 million euro ($1.75 million) donation from the airline.  

As well as focusing on SAF, the center will look at noise mapping and zero-carbon propulsion systems for aircraft.

Ryanair has itself set a target of powering 12.5% of its flights with SAF by the year 2030. But speaking to CNBC’s Steve Sedgwick, O’Leary said he thought it was “a very ambitious target – I’m not sure we’ll get there.”  

He went on to articulate his feelings about the wider effects of increasing SAF usage. “I do worry over the longer term, though, on sustainable aviation fuels … what’s that going to do to food prices going forward?”

Read more about clean energy from CNBC Pro

“I think we’re going to reach a point in the next 10 or 20 years where there will be challenges posed not just for the airline industry, but for industry in general, around sustainable aviation fuels where it may have an upward impact on food prices.”  

Although the European Union Aviation Safety Agency says there’s “not a single internationally agreed definition” of sustainable aviation fuel, the overarching idea is that it can be used to reduce an aircraft’s emissions. 

Aircraft-maker Airbus describes sustainable aviation fuels as being “made from renewable raw material,” for example, “crops based or used cooking oil and animal fat.”

Despite his concerns, O’Leary said he was certain that ambitious targets needed to be put in place.

“The European Union has set a target of 5% of sustainable aviation fuel by 2030,” he said. “We think we can do better than that – I think we’ll get to 10%.”

“Whether we can get to 12 and a half percent, I’m not sure, but I know if we don’t invest in the research and that technology now, we certainly won’t get there.”

Huge challenges

According to the International Energy Agency, carbon dioxide emissions from aviation “have risen rapidly over the past two decades,” hitting almost 1 metric gigaton in 2019. This, it notes, equates to “about 2.8% of global CO2 emissions from fossil fuel combustion.”

Elsewhere, the World Wildlife Fund describes aviation as “one of the fastest-growing sources of the greenhouse gas emissions driving global climate change.” It adds that air travel is the most carbon intensive activity an individual can do.

As concerns about sustainability and the environment mount, discussions about aviation have increasingly focused on how new innovations and ideas could reduce the sector’s environmental footprint.

More from CNBC Climate:

In September 2020, for instance, a hydrogen fuel-cell plane capable of carrying passengers took to the skies over England for its maiden flight.

The same month also saw Airbus release details of three hydrogen-fueled concept planes, with the European aerospace giant claiming they could enter service by the year 2035.  

O’Leary was cautious when it came to the outlook for new and emerging technologies in the sector.

“I think … we should be honest again,” he said. “Certainly, for the next decade … I don’t think you’re going to see any — there’s no technology out there that’s going to replace … carbon, jet aviation.”

“I don’t see the arrival of … hydrogen fuels, I don’t see the arrival of sustainable fuels, I don’t see the arrival of electric propulsion systems, certainly not before 2030,” he went on to say.

“So it will certainly be after my career in the airline industry is finished … but I hope it will get here before the end of our mortal lives.”

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The cheapest way to ‘own’ a superyacht? Buy an apartment on one

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CNBC Travel

Travelers who fantasize about owning a superyacht may be able to turn their dreams into reality — at a much lower price.

Residential yachts, as they are called, are essentially apartment buildings at sea. Buyers purchase apartments on massive yachts, rather than own and operate their own smaller vessels.

Once most of the apartments are sold, the yacht functions much like a luxury cruise line, and travels around the globe with onboard staff and access to restaurants, spas, wine cellars and gyms.

The price tag?

One residential yacht is Somnio, a 728-foot-long superyacht currently being built by the Norwegian shipbuilder Vard. It will be the world’s largest yacht once it’s completed in 2024, according to Vard’s website.

Somnio has 39 apartments, and prices start at 9.5 million euros ($11 million), said Erik Bredhe, Somnio’s co-founder and captain. Prices depend on the apartment’s size and location, with higher units costing more, he said.

The beauty of owning your own apartment is that you don’t have the worry of maintenance and planning.
Erik Bredhe
Somnio, co-founder

While $11 million is more than enough to purchase a private yacht, it doesn’t get close to the cost of a superyacht.

Yacht influencer Denis Suka — known as “The Yacht Mogul” to his more than 550,000 Instagram followers — told CNBC he is helping to design a 295-foot superyacht called Mogul.

When completed, it will cost around $150 million with just one buyer, he said.

Somnio is more than twice the length of Mogul.

Apartment vs. private yacht

Total privacy isn’t necessarily what every yacht buyer wants, according to Bredhe. He said a major selling point of residential yachts is the ability to “mix with like-minded community members.”

“The single biggest factor is an intimate community with whom to share a truly global itinerary,” he told CNBC, adding that “the beauty of owning your own apartment is that you don’t have the worry of maintenance and planning that comes with your own yacht.”

The yacht’s staff will handle maintenance, repairs, fuel and food supplies, as well as shore tours, according to Somnio. Staff will also plan journey routes, though residents can recommend destinations too, according to the company’s website.

Entry-level apartments on Somnio (rendering shown) sell for $11 million for 1,960 square feet of space.
Somnio | Winch Design

These don’t come free though. Buyers must pay an annual charge, which covers expenses related to maintenance, fuel, food and personal services, said Bredhe. There is, however, a “no tipping policy” on Somnio, he said, which can range from 15% to 20% of yacht charter costs.

Ownership on the boat is by invitation only, said Bredhe. Some buyers have directly approached the company while others have come from personal recommendations, he added.

An appreciable asset?

Unlike most boats, residential yacht apartments may rise in value over time, said Bredhe.

This is true for another residential yacht named The World, which launched in 2002.

“All residence types have increased significantly in value since the ship’s launch, driven by demand from prospective buyers globally,” a company representative told CNBC.

The World yacht has 165 private apartments, some of which are currently for sale.

Owners cannot, however, make money by renting out their apartments, though family members and guests can use the apartment if the owner is not onboard, said Bredhe.

Other boats

At 644 feet long, The World has more than four times as many apartments as Somnio.

It has studios as well as one- to three-bedroom apartments ranging from $2 million to $15 million, a small number of which are currently for sale, a company representative told CNBC.

“When we saw The World sail into Rio de Janeiro and learned of its unique concept, we knew we had to be a part of it,” said a current resident who asked to remain anonymous to protect his privacy.

The resident has lived on the yacht for four years, during which time he explored Madagascar, Indonesia and the Mediterranean, he told CNBC.

The residential superyacht, The World.

“We like the carefree nature of being able to go to our home on The World whenever we like and only having to take hand luggage — as we have both summer and winter wardrobes aboard,” he said.

He said he never considered buying a private yacht because “our friends who have private yachts seem to have nothing but problems with either staff or mechanical issues, which seem to somewhat spoil their enjoyment.”

Since its launch, The World has traveled to places such as Greenland, the British Isles and the “White Continent” — Antarctica.

Another superyacht — the 948-foot-long Njord — is scheduled to be completed by 2025. It, too, is planning to sell apartments onboard to buyers who want the thrill of ocean travel without the responsibility of yacht ownership.

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