Elon Musk may be luring Apple into a fight with Republicans

Tim Cook walks in the Paddock prior to the F1 Grand Prix of USA at Circuit of The Americas on October 23, 2022 in Austin, Texas.

Jared C. Tilton | Getty Images

Over the past week, Twitter owner Elon Musk has been poking Apple, the big bear of Silicon Valley, which controls app distribution to every iPhone.

Musk has been taking aim at the iPhone maker over a number of topics, including its reduced spending on Twitter advertising and its 30% cut of all digital sales made through apps. He also accused Apple of threatening to pull the Twitter app from the App Store.

In one deleted tweet, Musk suggested he was “going to war.” In another, he asked if Apple hates free speech. Over the weekend, he mused he’d make his own smartphone.

Elon Musk is as 'wrong as you can get' on Apple criticism, says Jim Cramer

Apple has remained a sleeping bear in the face of Musk’s provocations. It has not commented, nor has CEO Tim Cook, and while its app review moderation staffers may be talking to Twitter behind the scenes over questionable content, Apple hasn’t pulled the app. In fact, Twitter got an update through app review last week.

Twitter is not that important to Apple from a business perspective. It’s just one of a vast number of apps on the App Store, and it isn’t a huge moneymaker for Apple through in-app purchases.

But on Tuesday, Florida Gov. Ron DeSantis and Ohio Senator-elect J.D. Vance, both Republicans, made remarks about Apple’s situation that show how Musk could put Apple in a tough spot.

Here’s one way it could go:

  • Musk makes a change to Twitter in order to bypass Apple’s 30% fees, such as allowing users to plug their credit cards in to the app to subscribe to Twitter Blue or other new features.
  • Apple pulls the app because of these violations.
  • Musk frames the dispute with Apple as an issue over free speech and content moderation, and Republican politicians agree.
  • Apple gets caught up in a nationwide debate over free speech and monopoly power focusing on its App Store.

How things could play out

On Tuesday, DeSantis said at a press conference that if Apple were to kick Twitter off, it would show that Apple has monopolistic power and that Congress should look into it. DeSantis framed it as an issue of free speech — many conservatives believe that social networks, including Twitter, generally discriminate against conservative viewpoints.

“You also hear reports Apple is threatening to remove Twitter from the App Store because Elon Musk is actually opening it up for free speech, and is restoring a lot of accounts that were unfairly and illegitimately suspended for putting out accurate information about Covid,” DeSantis said.

“If Apple responds to that by nuking them from the app store, I think that would be a huge, huge mistake, and it would be a really raw exercise of monopolistic power,” he continued.

Vance framed the situation similarly in a tweet, saying that if Apple pulled Twitter, “This would be the most raw exercise of monopoly power in a century, and no civilized country should allow it.”

In fact, Apple’s app review department is unlikely to pull Twitter over content. While Apple regularly bans apps over questionable content, they are rarely big brand names such as Twitter — they’re usually smaller, lesser-known apps. Apple’s rules for apps with significant user-generated content, such as Twitter, focus less on specific kinds of infringing content and more on whether the app has a content filtering system or content moderation procedures. Twitter has both, although Musk’s recent cuts to Twitter’s staff could hurt its ability to flag problem posts.

But Apple would be much more likely to pull the Twitter app if Twitter tries to cut Apple out of its platform fees.

It’s happened before. In 2020, Fortnite added a system inside its iPhone app that allowed users to buy in-game coins directly from Epic Games, cutting out the 30% of sales that Apple typically takes. Apple removed Fortnite from the App Store the same day. The episode kicked off a legal battle, which Apple won on most counts but is currently in appeals.

Google takes a similar cut for Android apps sold through its Play Store but also allows other Android app stores to exist and allows people to “sideload” apps directly onto their phones, while Apple has an exclusive lock on all iPhone app distribution.

Musk has good business reasons to pick this fight.

In particular, Musk wants Twitter to make much more money from direct subscriptions and not advertising. But Apple’s 30% cut of purchases made inside apps is a major hurdle for a company that is slashing costs and has a significant debt load.

So Musk could pull an Epic Games move and enable direct billing, spurring Apple to take action, while at the same time framing the debate around free speech. If that happened, as DeSantis suggested, perhaps Congress would start asking questions. Apple would become a football in political debates. Executives could be forced to testify or provide written responses.

At the very least, you’d have lawmakers such as Vance using the words “monopoly” and “Apple” in the same sentence. That’s a risk to Apple’s brand. Debate over these topics could reenergize pending regulation such as the Open Markets Act which threatens its control over the App Store and its significant profits.

The last time Apple pulled an app that was popular with conservatives for lack of content moderation was Parler in January 2021. It was restored in April.

In the interim, Apple faced official inquiries from Republican Sens. Ken Buck and Mike Lee about why Parler was removed from the App Store. Cook appeared on Fox News to defend the company’s decision.

Twitter is a significantly more important and well-known social network than Parler was and would grab more attention.

It’s probably most valuable for Apple if Twitter remains on the platform. The controversy-averse iPhone maker would probably like this whole Elon Musk narrative to go away.

Indeed, it could play out this way: Apple remains silent, working with Twitter behind the scenes on its app, and Musk tweets about the 30% cut when it irks him. Nothing really changes.

But Musk is unpredictable, and if he does really want to “go to war” over 30% fees, Apple could be forced into a tough spot.

Apple and Twitter did not immediately respond to requests for comment.

Cramer says he likes stocks in these 4 industries over tech right now

Jim Cramer on how Roku stock's decline exemplifies the turmoil in tech

CNBC’s Jim Cramer on Tuesday offered investors a list of industries they should eye over tech when managing their portfolios.

Here is his list:

  1. Industrials
  2. Foods
  3. Pharmaceuticals
  4. Oils 

“Why rubberneck when you can invest in stocks of companies that have a lot going for them? I think that’s much better than sifting through the wreckage of tech simply because their stocks are down a great deal,” he said.

Tech stocks have been battered this year by persistent inflation, the Federal Reserve’s interest rate increases, Russia’s invasion of Ukraine and Covid lockdowns in China. 

While some tech firms remain profitable and their stock looks like bargains, investors are better off positioning themselves elsewhere, according to Cramer. His advice on Tuesday echoes his urging last month for investors to buy recession-resilient stocks rather than stick with struggling tech companies.

“Their stocks are down so much that people figure, ‘Well, they can’t possibly go any lower.’ But that’s not true. It can always go lower until it gets to zero,” he said.

He added that while it’s true that the stocks have come down enough that owning them isn’t as risky as it would’ve been earlier this year, tech companies need to reevaluate their priorities before their stocks can start to recover.

“They won’t truly be de-risked until management decides to pivot from a growth at all costs mindset … to a profitability at some costs mindset,” Cramer said.

Jim Cramer says he likes stocks in these 4 industries over tech

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Congressional leaders clear the way for a bipartisan bill to avert a railroad strike

U.S. House Minority Leader Kevin McCarthy attends a meeting with US President Joe Biden (R) and other Congressional Leaders to discuss legislative priorities through the end of 2022, at the White House on November 29, 2022 in Washington, DC.

Kevin Dietsch | Getty Images

WASHINGTON — President Joe Biden hosted a rare meeting of the four House and Senate leaders Tuesday at the White House, where Republicans and Democrats agreed to pass a bill to avert a nationwide rail workers’ strike before the U.S. economy could start to feel its effects as soon as this weekend.

The meeting with Senate Majority Leader Chuck Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., Democratic House Speaker Nancy Pelosi and Republican House Minority Leader Kevin McCarthy, both of California, was a last-minute addition to Biden’s public schedule. It also marked the first time the group known as “the Big Four” has met with Biden since Republicans narrowly won control of the House earlier this month, and Democrats held on to the Senate despite strong political headwinds.

House announces bill aimed at resolving rail worker dispute

The meeting Tuesday was not partisan or contentious even as the power dynamics in Washington are set to change, according to attendees.

“It was a very positive meeting, and it was candid,” Pelosi told reporters at the Capitol after the meeting. “But from a timing standpoint, right now what we need to do is avoid the strike.”

McConnell struck a similar note: “We had a really good meeting, and laid out the challenges that we’re all collectively facing here.”

A rail strike could formally begin on Dec. 9 if no agreement is reached between unions and rail companies. But the effects of it could be felt before then. Freight rail companies are required to alert customers about a potential strike a week ahead of time, to give them time to make contingency plans.

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Congress can intervene using its power through the Constitution’s Commerce Clause to pass legislation ending a strike or a lockout, and to set terms of the agreements between the unions and the carriers. In this case, Congress appears poised to enact a tentative labor agreement that was approved in September by some — but not all — of the sector’s major labor unions.

Pelosi said she planned to bring a bill to the House floor Wednesday morning.

We are taking every step to avoid a rail work stoppage, says Association of American Railroads CEO

“It’s not everything I would like to see. I think that we should have paid sick leave,” she said.

“And I don’t like going against the ability of unions to strike. But weighing the equities, we must avoid a strike,” Pelosi added.

Both Pelosi and McCarthy said Tuesday that they believed the rail strike bill had the votes it needed to pass the House.

But in the Senate, where it only takes one objecting senator to hold up a bill, the emergency rail strike legislation could face new hurdles.

Sen. Marco Rubio, R-Fla., has already announced he will oppose the bill.

 “Just because Congress has the authority to impose a heavy-handed solution does not mean we should,” Rubio said in a statement Tuesday.

An unlikely ally for Rubio on other side of the political spectrum may be Sen. Bernie Sanders, a Vermont independent, who criticized the agreement when it was first reached in September. On Tuesday, he refused to say whether he would support the bill.

“Workers all over this country who work for the railroads, people who are working at dangerous jobs in inclement weather, have zero paid sick leave. That is outrageous,” Sanders told reporters in the Capitol on Tuesday.

“I think it’s incumbent upon Congress to do everything that it can to protect these workers to make sure that the railroad starts treating them with the respect and the dignity that they deserve,” he added.

Either Rubio or Sanders, or any other senator, could decide to mount a filibuster of the bill, potentially holding it up for days under Senate rules.

McConnell declined to speculate Tuesday on how many Republicans would back the bill.

“You’ll have to ask our members,” he told reporters. “I think some may be inclined to vote against it, and others are arguing that the economic price of doing that is too great.”

The House is expected to pass a version of the bill Wednesday morning. After that, the timeline becomes more difficult to predict, given the flexibility afforded senators under the chamber’s debate and filibuster rules.

Double-digit percentage drop will hit stocks in 2023: Morgan Stanley

A lot of two-way risk in the market right now, warns Morgan Stanley's Mike Wilson

Investors may be on the doorstep of a deep pullback.

Morgan Stanley’s Mike Wilson, who has an S&P 500 year-end target of 3,900 for next year, warns corporate America is getting ready to unleash downward earnings revisions that will pummel stocks.

“It’s the path. I mean nobody cares about what’s going to happen in 12 months. They need to deal with the next three to six months,” he told CNBC’s “Fast Money” on Tuesday. “That’s where we actually think there’s significant downside. So, while 3,900 sounds like a really boring six months. No… it’s going to be a wild ride.”

Wilson, who serves as the firm’s chief U.S. equity strategist and chief investment officer, believes the S&P could drop as much as 24% from Tuesday’s close in early 2023.

“You should expect an S&P between 3,000 and 3,300 some time in probably the first four months of the year,” he said. “That’s when we think the deacceleration on the revisions on the earnings side will kind of reach its crescendo.”

On Tuesday, the S&P 500 closed at 3,957.63, a 17% decline so far this year. Wilson’s year-end price target was 3,900 for this year, too.

“The bear market is not over,” he added. “We’ve got significantly lower lows if our earnings forecast is correct.”

And he believes the pain will be widespread.

“Most of the damage will happen in these bigger companies — not just tech, by the way. It could be consumer. It could be industrial,” Wilson said. “When those stocks had a tough time in October, the money went into these other areas. So, part of that rally has been driven just be repositioning from the money moving.”

Wilson’s forecast comes on the heels of prior pullback warnings on “Fast Money.” In July, he warned the June low was probably not the final move downward. On Oct. 13, the S&P 500 reached its 52-week low of 3491.58.

‘Not a time to sell everything’

Yet Wilson does not consider himself a full-fledge bear.

“This is not a time to sell everything and run for the hills because that’s probably not until the earnings come down in January [and] February,” he said.

Wilson expects bullish tailwinds to push stocks higher over the next few weeks.

“It’s our job to call these tactical rallies. We’ve got this one right,” Wilson said. “I still think this tactical rally has legs into year end.”

Disclaimer

Kroger and Albertsons executives defend proposed merger at hearing

Albertsons and Kroger supermarkets

Bridget Bennett | Bloomberg | Getty Images; Brandon Bell | Getty Images

The battle over whether grocery giants Kroger and Albertsons should be allowed to combine is heating up.

On Tuesday, leaders of the two companies defended their proposed merger at a congressional hearing in Washington, where they faced a series of questions about how the deal could shake up the competitive landscape — and potentially the prices that consumers pay at the store.

“I just don’t see less competition going forward,” Kroger CEO Rodney McMullen said at the hearing by the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights. “It’s easy for customers to make a right turn or a left turn.”

Kroger announced plans in October to acquire Albertsons in a deal valued at $24.6 billion. The Cincinnati-based company is the second-largest grocer by market share in the United States, behind Walmart, and Albertsons is fourth, after Costco, according to market researcher Numerator. Together, Kroger and Albertsons would be a closer second to Walmart.

At the hearing Tuesday, McMullen said that the combined company could help lower food prices and improve the customer experience, especially at a time when grocers are racing to adapt to changes like online shopping. He said retailers have to keep reinventing themselves to stay relevant and convince customers to drive to their stores.

Yet the proposed merger has faced intense pushback from elected officials of both political parties and opposition from the United Food and Commercial Workers, a major grocery union that represents thousands of the grocers’ employees.

Sen. Amy Klobuchar, a Democrat from Minnesota, led the hearing Tuesday along with Sen. Mike Lee, a Republican from Utah. Both challenged the companies on their actions, including Kroger’s $1 billion in share buybacks announced last year and plans to pay dividends to shareholders as well as previous deals, such as Albertsons’ acquisition of Safeway.

They emphasized that the proposed deal comes at a time when groceries are taking up more of American families’ budgets. Food prices have surged as inflation hovers near four-decade highs. Prices of everyday items, including butter, eggs, poultry and milk have jumped by double-digits from the year-ago period as of October, according to the most recent federal data available.

Skeptical senators, workers

The hearing offers a preview of the bigger antitrust battle ahead.

For Kroger and Albertsons, the argument is clear: combining will help them weather dramatic industry changes. Online grocery sales are eating into already thin margins. New players, such as deep discounters like Aldi and e-commerce players like Amazon, are also pressuring traditional grocers.

“The marketplace for groceries over the past decade has completely transformed making the competition for consumers fierce,” said Albertsons CEO Vivek Sankaran said at the hearing. “The best way to compete with mega stores like Walmart and highly capitalized online companies like Amazon will be through a merger with Kroger.”

He argued that even as a combined company, Kroger and Albertsons will still be small compared to Walmart, Costco and Amazon.

Ahead of the hearing, members of the UCFW — which represents over 100,000 Kroger and Albertsons workers — shared their worries at a press conference on Capitol Hill. Their concerns ranged from the potential loss of their pension plans to higher food prices to job losses.

Albertsons employees who belong to the union remembered the impact of past mergers. Judy Wood, a longtime cake decorator for the grocery giant, said she and her coworkers were shocked by the store closures that resulted after Safeway’s merger with Albertsons, which was announced in 2014.

Union members also railed against the private equity firms that will benefit from the proposed $4 per share special dividend for Albertsons shareholders announced in conjunction with the deal. Cerberus Capital Management owns a 28.4% stake in Albertsons, according to Factset. For now, the dividend payout is on hold until at least Dec. 9 due to a ruling in Washington state court.

McMullen said on Tuesday that the company does not plan to close stores or lay off employees, but said it will work with the Federal Trade Commission, if needed, to spin off stores for competitive reasons.

As part of its original proposal, Kroger said it already had a plan to overcome concerns about the merger − divesting between 100 and 375 stores in a spinoff. Kroger and Albertsons would work together — and with the FTC — to decide which stores would be part of the spinoff company.

On Tuesday, McMullen said the company is in “active conversations” with unions about the deal and what it means for its workforce. He said the deal would ultimately expand opportunities for employees. Kroger will also spend $1 billion on higher wages and better benefits for store employees after the deal closes, he said.

“A successful business is what creates his job security,” he said. “And we believe we’ll have an incredibly successful business that creates job security.”

Some grocery competitors and industry experts also opposed the deal at the hearing.

Michael Needler, chief executive officer of Fresh Encounter, an independent grocery chain based in Northwest Ohio, said companies like Walmart and Amazon use their size to pressure suppliers for lower prices and better terms. Instead of creating an even playing field, he said, the Kroger-Albertsons deal would create yet another power player who makes it difficult — if not impossible — for smaller grocers to compete.

For instance, he said, larger grocers have run predatory campaigns against his own chain by offering coupons for free groceries.

“I don’t know any other way to point out predatory pricing than buying your competition,” he said.

Sumit Sharma, a senior researcher who specializes in antitrust matters and competition at Consumer Reports, also said at the hearing that he does not see any benefits to combining the companies. Instead, he said retailers would have less reason to increase employee wages. Shoppers would have fewer choices and more sticker shock.

“Even if they sell a few stores, that is going to take competition out of the market,” he said. “So prices will go up.”

CNBC’s Amelia Lucas contributed to this report.

Rails, unions draw lines in sand as Biden asks Congress to stop strike

The National Railway Labor Conference and The Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED) are drawing their lines in the sand after President Joe Biden called on Congress to pass legislation that would enforce the tentative rail labor agreement.

In a statement, the BMWED said pressuring Congress to pass legislation does not fix the problems or concerns of their workers.

“It both denies railroad workers their right to strike while also denying them of the benefit they would likely otherwise obtain if they were not denied their right to strike,” the statement says. “Additionally, passing legislation to adopt tentative agreements that exclude paid sick leave for railroad workers will not address rail service issues. Rather, it will worsen supply chain issues and further sicken, infuriate, and disenfranchise railroad workers as they continue shouldering the burdens of the railroads’ mismanagement.”

The BMWED says it is calling upon President Biden and any member of Congress “that truly supports the working class to act swiftly by passing any sort of reforms and regulations that will provide paid sick leave for all Railroad Workers.”

The posturing from the NRLC and the unions came after President Biden called on Congress to pass the tentative agreement on Monday night. “Congress, I think, has to act appropriately. It’s not an easy call, but I think we have to do it,” Biden said. “The economy is at risk.”

After Biden met with Congressional leaders on Tuesday, several leading figures on Capitol Hill including Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, and Senate Minority Leader Mitch McConnell expressed support for legislation passing quickly.

“Tomorrow morning we will have a bill on the floor,” Pelosi told reporters after the meeting.

In a press conference on rail preparations, Association of American Railroads (AAR) President and CEO Ian Jefferies told reporters that, “If the unions are interested in a holistic discussion for structural changes as it relates to their sick time, I think absolutely the railroad carriers would be up for a holistic discussion but [they] have not done it in the zero hour.”

According to the AAR, the Presidential Emergency Board reviewed the union’s request for additional paid sick days and instead offered additional salary. Each union has its own sick day policy, according to the National Railway Labor Conference. If an employee is sick, they need to be out of work between 4 to 7 days before they collect their version of sick pay. In the tentative deal, the PEB offered one additional personal day for their use. This would bring a total of three personal days for railroad workers. A worker must provide 48 hours notice to request a personal day.

Brendan Branon, National Railway Labor Conference chairman, told CNBC the future of collective bargaining is in the hands of Congress and urged that the legislation they pass follow the recommendations of the PEB, a board created by Biden in July to resolve the ongoing dispute between major freight rail carriers and their unions. The board crafts its recommendations under a principle known as pattern bargaining, which is a collective bargaining principle used to promote settlement of disputes. Now that 8 of the 12 unions have ratified the agreement, what is known as a “pattern” has been established – in this case railroads argue with the pattern of unions approving tentative agreements based upon the PEB set, that is the only acceptable path to resolve the round.

“Pattern bargaining promotes stability in collective bargaining, and it encourages settlement,” Branon said. “There’s any number of arbitrators and PEBs who have recognized that this is not only acceptable, this is the most appropriate form to settle complex negotiations, especially multi-employer, multi-craft agreements.” Branon said a number of industries including the railroads have developed a set of clear practices in bargaining and the additional negotiating by the unions after the tentative agreement departs from the framework recommended by the PEB.

“Departing from a pattern would establish a precedent that there’s still a better outcome achievable and I think it would pose significant stress and risk for collective bargaining in the future for the railroad industry,” Branon said. “I think it would also apply to the airline industry as well, where there are a number of significant outstanding negotiations, especially with the large pilot groups. Not to mention the ongoing Amtrak negotiations and all of those other industries under the National Labor Relations Act (NLRA).”

The railroad industry forecasts that a strike could inflict economic damage of $2 billion per day. Other industry groups have also warned of a direct hit to GDP as well as an increase in inflation. According to the AAR, 40% of cargo based by weight and long distance freight is moved by rail.

The alignment of the four unions that have voted not to ratify a labor deal has provided a clear timeline for strike prep plans among the freight railroads and with sensitive cargo including chemicals.

The Brotherhood of Railroad Signalmen (BRS) announced last week it was extending its status quo period through December 8 to align with the BMWED (Brotherhood of Maintenance of Way Employees), SMART-TD, and the International Brotherhood of Boilermakers. If no agreement is reached by then and Congress does not intervene, a coordinated strike could start on December 9. Railroad unions that voted for ratification have said they will not cross the picket lines and will support their fellow union workers, posing the risk of a nationwide freight rail shutdown. Their deals are moving forward.

According to federal safety measures, railroad carriers begin prepping for a strike seven days before the strike date. The carriers start to prioritize the securing and movement of security-sensitive materials like chlorine for drinking water and hazardous materials in the rail winddown.

Ninety-six hours before a strike date, chemicals are no longer transported. According to the American Chemistry Council, railroad industry data shows a drop of 1,975 carloads of chemical shipments during the week of September 10 when the railroads stopped accepting shipments due to the previous threat.

Corey Rosenbusch, president and CEO of The Fertilizer Institute, told reporters that railroad carriers have told their members that ammonia shipments, a critical component for fertilizer companies, will not be allowed on the rail on December 4.

“It traditionally takes 5-7 days for the supply chain to catch up when you have a shutdown,” said Rosenbusch. “Fertilizer manufacturing would have to be curtailed.”

The four railroads typically move more than 80% of the agricultural freight traffic, according to the National Grain and Feed Association (NGFA). “We are looking for alternatives now to position our product,” said Mike Seyfert, president and CEO of NGFA. “We have zero elasticity right now. There are zero drivers, and the barge situation with the low water levels has only added to this challenge.”

AAR said that 467,000 trucks and trailers would be needed to move the amount of rail-bound freight per day in the event of a strike.

McConnell criticizes Trump meeting with Kanye West, Nick Fuentes

U.S. Senate Minority Leader Mitch McConnell (R-KY) speaks to reporters as he returns from a meeting at the White House with President Joe Biden, to the U.S. Capitol in Washington, November 29, 2022.

Jonathan Ernst | Reuters

Senate Minority Leader Mitch McConnell suggested Tuesday that Donald Trump is “highly unlikely” to regain the presidency as a result of his recent dinner with the rapper now known as Ye and white supremacist Nick Fuentes.

Trump has been condemned for dining with both men, who have espoused anti-Semitic beliefs, at his Mar-a-Lago club in Palm Beach, Florida, last week.

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“First, let me just say that there is no room in the Republican Party for anti-Semitism or white supremacy,” McConnell, R-Kentucky, told reporters.

“And anyone meeting with people advocating that point of view, in my judgment, are highly unlikely to ever be elected president of the United States,” McConnell said.

Former President Donald Trump announces bid for White House in 2024

Asked by a reporter if he would support Trump if Trump won the 2024 GOP presidential nomination, McConnell reiterated his statement about there being no room in the party for anti-Semitism or white supremacy.

“And that would apply to all of the leaders in the party who will be seeking offices,” McConnell added.

Trump, who earlier this month announced his candidacy for the White House, has said he was unaware of who Fuentes was when he arrived with Ye at Mar-a-Lago. Ye was previously known as Kanye West.

Senate Majority Leader Mitch McConnell (R-KY) listens as U.S. President Donald Trump speaks during a meeting Republican Congressional leaders in Washington, D.C.

Joshua Roberts | Reuters

Earlier Tuesday, House Republican leader Kevin McCarthy of California — who aims to become speaker of the House when Republicans regain control in January — criticized Fuentes.

“I condemn his ideology,” McCarthy said. “It has no place in society at all.”

The California lawmaker later said, “The president can have meetings with who he wants — I don’t think anybody, though, should have a meeting with Nick Fuentes.

McCarthy added: “And his views shouldn’t — are nowhere within the Republican Party or within this country itself.”

Social Security retirement benefits and ‘unretirement’: What to know

Viktorcvetkovic | E+ | Getty Images

A combination of high inflation and plentiful job openings may tempt some retirees into rejoining the workforce.

But if you’re thinking about working, either part time or full time, and you’re already collecting Social Security retirement benefits, there are a few things you may want to know first.

Social Security beneficiaries who go back to work may stand to earn more in the short term and also may eventually increase their monthly benefit checks, according to Joe Elsasser, founder and president of Covisum, a provider of Social Security claiming software.

But they could also be subject to short-term benefit changes that are worth planning for. “That’s the surprise that people want to avoid, is not knowing the earnings test is going to happen and that they’re going to have a penalty,” Elsasser said.

Why Americans are finding it more difficult to retire

Here are a few things to know about your Social Security benefits before unretiring.

1. Your benefits may be reduced temporarily

2. You could get a bigger benefit check later on

3. Tell Social Security about your return to work

If you plan to return to work, you should notify the SSA right away, Elsasser advised. That way, the agency can start to reduce your checks now.

If you don’t, you could be in for an unwelcome surprise early the next year when the IRS reports your earnings to the SSA.

If that happens, you may get an unexpected letter from the SSA notifying you that they are stopping your benefit right away until any earnings penalty from the prior year is made up.

That may disrupt your cash flow, which you may not be expecting.

Netflix’s plan kept ‘Glass Onion’ from more box office millions

Netflix probably left hundreds of millions of dollars on the table by not keeping Rian Johnson’s “Glass Onion” in theaters.

The sequel to Johnson’s critically acclaimed “Knives Out” opened in nearly 700 theaters, the largest release of any Netflix original film to date, last Wednesday ahead of the Thanksgiving holiday weekend. “Glass Onion” leaves theaters Tuesday. It will arrive on Netflix Dec. 23.

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The movie snared an estimated $13 million to $15 million during the five-day stretch, a solid opening for a film released in only a limited number of theaters.

Box office analysts, however, say that figure could have been much higher if Netflix had opted for a traditional wide release of 2,000 to 4,000 theaters. The truncated run for “Glass Onion” also prompted industry insiders to again question the streamer’s theatrical release strategy. Netflix has backtracked on its previous policies, including by introducing an ad-supported subscription option, leading many to wonder whether the company should rethink its resistance to the traditional Hollywood movie release model as it looks for new ways to grow revenue.

“With a traditional wide release, premium screen spread, and full marketing campaign, I think ‘Glass Onion’ could have generated at least $50 million to $60 million to lead the entire market,” said Shawn Robbins, chief analyst at BoxOffice.com.

Instead, Disney and Marvel Studio’s “Black Panther: Wakanda Forever” continued to lead the box office, tallying $45.9 million in domestic ticket sales during the regular three-day weekend and $64 million for the five-day holiday period.

Netflix declined to provide box office receipts for the film, breaking with standard procedures other studios adhere to each weekend, so it is unclear what “Glass Onion” generated in ticket sales Friday, Saturday and Sunday.

But in 2019, “Knives Out” snared $312 million globally on a budget of just $40 million. The first film’s performance at the box office has provoked questions about why Netflix has limited the release of “Glass Onion” to just one week in a limited number of theaters. After all, the streamer reportedly shelled out $400 million for the rights to two sequels.

Box office analysts predicted the film could have hauled in more than $200 million in ticket sales before the end of its run if it had been given a wider global release.

“This is exactly the kind of movie adults want to see in theaters right now,” said Robbins. “The family element made ‘Knives Out’ a perfect Thanksgiving release for audiences across the country three years ago. Daniel Craig’s return as Benoit Blanc, Rian Johnson’s sharp storytelling, and another round of positive reviews for ‘Glass Onion’ are building on the excellent goodwill from the prior film as this semi-sequel reaps some rewards, but it arguably could have achieved even more.”

Word of mouth was a huge factor in the success of “Knives Out,” as evidenced by the film’s low drop in ticket sales from week to week after its opening. Typically, films will see weekend sales drop by 50% or more in each week after its opening. But “Knives Out” ticket sales declines remained consistently under 40% until Christmas, when sales got a 50% boost, and then only fell between 10% and 30% weekly until February.

This indicates that audiences were talking about the film and encouraging others to go out and see it, leading to a strong hold in ticket sales.

“Glass Onion” earned a 93% “Fresh” rating on Rotten Tomatoes from 238 reviews and an audience score of 92%, suggesting that it too could have generated the same kind of word of mouth.

Some executives within Netflix reportedly lobbied co-CEO Ted Sarandos earlier this year to consider longer stints in theaters and wider releases for some films, but Sarandos nixed the idea. Top brass at the company have said repeatedly that the future of entertainment is streaming.

The company’s strategy in the past with limited theatrical releases — such as with Martin Scorsese’s “The Irishman” — has been to build buzz for subscribers before the film arrives on its service. That’s the play here, too, the company said during last quarter’s earnings video.

“We’re in the business of entertaining our members with Netflix movies on Netflix,” Sarandos said during the call.

He said that Netflix has brought films to festivals and has given them limited runs in theaters because filmmakers have demanded it.

“There [are] all kinds of debates all the time, back and forth, but there’s no question internally that we make our movies for our members and we really want them to watch them on Netflix,” he said.

Netflix declined to comment further.

While Sarandos and co-CEO Reed Hastings have remained adamant that subscribers don’t want Netflix content in theaters, some Wall Street analysts don’t think that’s the case.

“Subscribers don’t care at all,” said Michael Pachter, analyst at Wedbush. “The talent, on the other hand, cares a lot. … The talent needs that to help negotiate future deals, and thrives on the prestige of awards nominations.”

“Netflix did not do this for the money,” he added. “They did it because of pressure from the talent.”

To others, like streaming expert Dan Rayburn, Netflix’s cross-platform promotion of putting “Glass Onion” in theaters for a week to tease its release on the streamer a month later “makes a lot of sense.”

The streaming giant would have also had to shell out more in marketing costs to promote the film over time. Additionally, Netflix’s business model relies on new films and TV shows to decrease subscriber churn and lure in new audiences to its platform. The fact that “Glass Onion” drew patrons to theaters is a sign to Netflix that there is demand for the film and it will likely perform well once it debuts on the streaming service.

Still, it’s hard for investors to see all the money left on the table — especially when Netflix continues to spend heavily on content as subscriber numbers slow.

In recent years, the streamer has spent big on flashy, blockbuster-style action movies like “The Gray Man” and “Red Notice,” which cost the company $200 million each. The films are the first steps in bids to spark event-level franchises. But they’re costly, and it’s unclear how positive they have been for Netflix’s bottom line.

Unlike rival studios Universal and Disney, Netflix doesn’t have a wide breadth of sources to generate revenue. Its only option, until recently, for recouping its spending has been through subscription growth. The company is hoping its ad-tier will help generate more funds to subsidize its $17 billion annual spending on content.

Box office analysts and Wall Street see theatrical releases as a smart way for Netflix to market its content and spark revenue growth.

“Here’s hoping ‘Knives Out 3’ is given the chance to build further on this watershed moment of cooperation between Netflix and theatrical exhibitors,” Robbins said. “It would be a win-win for the entire industry.” 

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Rotten Tomatoes.

Shopper turnout hit record over Black Friday weekend, trade group says

A customer searches for shoe products inside a Macy’s store during Black Friday sales on November 25, 2022 in Jersey City, New Jersey.

Kena Betancur | Getty Images

A record number of holiday shoppers – 196.7 million – flocked back to stores and hunted for deals from Thanksgiving Day to Cyber Monday, according to a survey by the National Retail Federation, which tracks the figure for in-person and online shopping.

The trade group did not estimate spending over the weekend, but said Tuesday that sales for the overall holiday shopping season are on track to meet its forecast. It anticipates that holiday sales will rise by 6% to 8% from last year to between $942.6 billion and $960.4 billion. Some of that increase will come from nearly four-decade high inflation.

The National Retail Federation defines the holiday season as November 1 through December 31. The sales forecast excludes spending at automobile dealers, gasoline stations and restaurants.

Shoppers spent an average of about $325 on holiday-related purchases over the weekend. That’s higher than last year’s average of $301.

NRF CEO Matt Shay said the weekend’s biggest takeaways are that Americans are eager to shop in-person again and that they’re hungry for big bargains. More than 122.7 million people visited brick-and-mortar stores over the weekend, a jump of 17% from 2021.

As inflation hits Americans’ wallets, he said, promotions have become a important motivator.

“Consumers are out shopping, but they’re out shopping when they see deals and when they get the promotions that meet what it is they’re looking for, and so you can get them engaged, but you’ve got to deliver value and price,” he said on a call with reporters.

Retailers have nevertheless been cautious about their holiday outlooks, particularly as families feel the pinch of inflation. Walmart has spoken about customers skipping over discretionary items and trading down to cheaper proteins like hot dogs and peanut butter. Target cut its forecast for the holiday quarter. And Best Buy said customers have had a higher interest in shopping during sales events.

So far, though, industry-watchers have reported a strong start to the shopping season. Figures from Adobe Analytics showed that online spending hit record highs on key days during the holiday shopping weekend. Black Friday sales hit $9.12 billion and Cyber Monday sales hit $11.3 billion, according to the company, which tracks sales on retailers’ websites.

On average, consumers said in the NRF survey that they are about halfway done with holiday shopping. That means retailers can expect more purchases in the weeks ahead, Shay said.

NRF said Tuesday that its tally of shoppers over the holiday weekend topped last year’s turnout of 179 million during the same period last year. The group, which began tracking the figure in 2017, had forecast a turnout of 166.3 million for this year.

A bigger turnout and record spending this holiday season could be a result of a variety of factors. It could indicate that consumers are willing to buy − but only if items are on deep discount. It could also signal a return to the pre-pandemic timetable of holiday shopping, with people concentrating their gift-buying around Black Friday and in the final sprint before Christmas Day.

Or it could portend a more challenging 2023. If Americans are funding shopping spree by slashing savings rates and tallying up big balances on credit cards or through ‘Buy Now Pay Later,’ that could leave them with less to spend in the months ahead.

The National Retail Federation, a major trade group, has taken a bullish stance on consumer spending — saying a strong job market has encouraged Americans to keep spending.

Shay also shook off concerns about a recession on Tuesday, but acknowledged another risk for retailers: the threat of a railway strike. While retailers may have most of their holiday merchandise, he said a work stoppage could be a blow to consumer confidence.

“We think that the holiday season would be the worst possible time,” he said.

We haven't seen a drop in demand over inflation concerns, says Ledbury CEO