Home prices rose in May for the fourth consecutive month on the S&P CoreLogic Case-Shiller Home Price Index, but regional differences are widening.

The gains came despite a sharp rise in mortgage interest rates during the month.

Prices nationwide rose 0.7% month over month, seasonally adjusted. The index’s 10-city composite rose 1.1%, and the 20-city composite rose 1%.

Prices nationwide were still down 0.5% from May 2022, but only 1% below their June 2022 peak.

The 10-city composite fell 1%, year over year, slightly less than the 1.1% decline in the prior month. The 20-city index fell 1.7%, the same as the year-on-year decline in April.

“US home prices started to decline after June 2022, and the May data reinforced the case that the last month of decline was January 2023,” said Craig Lazzara, managing director at S&P DJI. “It is true that the price gains of the past four months could be capped by increases in mortgage rates or by general economic weakness. But the breadth and strength of the May report dovetails with an optimistic outlook for the months ahead.”

Still, Lazzara noted, “the regional differences are still striking,” with cities in the so-called Rust Belt outperforming the rest of the country. Prices in Chicago rose 4.6%. in Cleveland, 3.9%; and New York, 3.5% — making it the best performer. The Midwest took over the rule of the South as the most powerful region.

“If that sounds like an outlier to you, it does to me, too. It’s been five years a month since a cold-weather city took the lead (and that was Seattle, which wasn’t too cold),” Lazzara added.

Of the 20 cities, 10 saw prices fall in the year ending May 2023 versus the year ending April 2023 and 10 cities saw prices rise.

Cities in the West, where prices inflated the most, were the worst performers in May. Seattle, down 11.3%, and San Francisco, down 11%, were the worst.

Prices are going up again because supply is still so low. Existing homeowners are reluctant to sell, since most of them pay mortgage rates less than half of today’s rates. Demand has returned after the initial jump in mortgage rates, as buyers seem to be getting used to the new normal.

“The housing market remains unaffordable for many buyers, but some areas are seeing high levels of competition as a result of low selling inventory,” said Hannah Jones, Research Analyst for Realtor.com. “The current limited household equity means that many markets are experiencing competition reminiscent of the past few years.”

Correction: Home prices rose in May for the fourth consecutive month on the S&P CoreLogic Case-Shiller Home Price Index. An earlier version misspelled the number of months.

Johnson & Johnson On Monday, it said it plans to reduce its stake by at least 80% in Kenvue, the consumer health company it founded as an independent company earlier this year, via a stock exchange offering.

J&J owns 89.6% of the common shares of Kenvue, which amounts to more than 1.72 billion shares.

The exchange offer, also known as a split, will allow J&J shareholders to swap all or a portion of their shares for Kenvue common stock at a 7% discount. It is expected to be tax deductible, J&J said in a statement.

The company indicated that the split is voluntary for investors and is scheduled to close on the third of August. 18, which is much earlier than expected.

J&J said it received a waiver denying the stock lock period associated with Kenvue’s initial public offering in May. This lockout agreement required J&J to wait 180 days to sell any of its stock.

“We believe now is the right time to distribute Kenvue shares, and we are confident that the split is the appropriate path forward to create value for our shareholders,” J&J CEO Joaquín Duato said in a statement.

Duato added that the split will increase J&J’s focus on its pharmaceutical and medical technology businesses — both of which helped the company beat second-quarter revenue and adjusted earnings last week.

J&J first announced its intention to launch a swap offering in its second-quarter earnings report Thursday, but the company provided few details on the plan. Kenvue shares tumbled after that announcement, despite second-quarter results that also beat Wall Street estimates.

When asked about J&J’s planned swap offering Thursday, Kenvue CEO Thibaut Mongon told CNBC’s “Squawk on the Street” that the company is “pleased with the way shareholders have been received for the IPO.”

“We see a great deal of alignment among our new investors in seeing Kenvue’s potential, but I can tell you we’re absolutely ready to leave as a completely independent company,” he said.

The US military is raising the stakes – and expanding the field – in the high-profile competition for Space Force mission contracts.

The Space Force plans to purchase more rocket launches from companies in the coming years than previously expected, giving more companies a chance to secure billions in potential contracts.

“This is a huge deal,” Doug Pentecost, deputy program executive officer at the US Space Force’s Space Systems Command, told reporters during a briefing this week.

Earlier this year, the Space Force began the process of purchasing five years’ worth of launches, under a lucrative program known as National Security Space Launch (NSSL) Phase III.

The United States sees increasing momentum to improve its military capabilities in space, spurring the need to nearly triple the number of third-stage launches it has purchased in second-stage in 2020.

“It just amazes me,” said Pentecost. “We only estimated 36 missions for Phase 2. For Phase 3, we estimate 90 missions.”

In February, the Space Force outlined a “mutual fund” strategy to purchase launches from the companies. NSSL divided Stage 3 into two groups. Track 1 is the new approach, with lower requirements and a more flexible bidding process that allows companies to compete as rockets debut over the coming years. Path 2 represents the current approach, in which the Space Force plans to select a select number of companies for missions that meet the most demanding requirements.

Pentecost said the Space Force hosted an industry day in February to review details of the program and 22 companies attended. Since then, Space Force has made a number of tweaks to Phase 3. It has added more missions, introduced a price cap, expanded Path 2, and established an annual schedule of missions.

The government weighs bids according to a company’s “gross estimated price” to launch. This is broken down into “launch service,” which means the cost of building and launching a missile, and “launch service support,” which covers special requirements the military might have for a launch. The maximum launch service subsidy amount is $100 million per year, per company.

“We’ve implemented some cost constraints so we don’t get inflated. We don’t want to [a situation where] Everyone gets a mission—you get a mission, you get a mission, you get a mission—because there’s no real competition after that,” Pentecostals said.

“We believe all of our partners in the industry want to be the first man, so we think that will provide competitive pricing to keep our costs down,” he added.

While track 1 is expected to attract the most bids and award 30 missions, track 2 is the big show.

With Lane 2, the Space Force awards the most valuable contracts to launch national security satellites at the highest stakes.

“These are billion dollars [satellite] “The payload going into unique orbits,” said Pentecost.

Not only has Lynn 2 seen an increase in the number of missions available for grabs — it’s currently estimated at 58 launches, up from 39 in February — but Space Force also made the decision to expand the slots available for final prizes to three companies, rather than limiting them to two.

Elon Musk’s SpaceX and United Launch Alliance, the joint venture of Boeing And Lockheed MartinThey were supposed to be the main contenders for Lane 2, but now there’s an open door for another company like Jeff Bezos’ Blue Origin.

Space Force will allocate 60% and 40% of the 51 missions to the two largest bidders, respectively, and the remaining seven launches will go to the third-place bidder.

Regardless of where a company ranks, it must demonstrate that it can meet all of Track 2’s requirements, which include having launch sites on both the East Coast and West Coast, and the ability to reach nine high-accuracy “reference” orbits, many of which are much farther from Earth than the LEO requirements of Track 1.

Asked by CNBC how many companies are developing missiles that can meet these requirements by the launch deadline, a Space Force spokesperson declined to specify, saying the Army is “tracking several” that are “expanding their launch capabilities into most of these orbits.”

“Hopefully, not only will ULA, SpaceX, and Blue Origin compete for that, there are others who have interest in the past.” Chad Mellon, chief of procurement and integration at Space Systems Command, said during the briefing.

Space Force presents an annual festival for the month of October. 1 Deadline for assignment of tasks to companies that have won a contract.

Pentecost clarified that the first missions will end in October 2025, but the aforementioned contracts do not guarantee assignments, which protects the Space Force from delays that companies may experience in developing and flying missiles.

“You could have won the contract already, and you had this great plan about how you were going to fly [fiscal year] 2027. But since you haven’t flown yet, and I have a satellite that needs to fly in a couple of years, we’re not going to give you that task—we’re going to pass it on to the other person,” Pentecostal said.

Space Force aims to finish its solicitation for bidders by September and then submit all proposals by December, with contracts awarded in October 2024.

The main driver for this push, Space Force officials said, is “capacity assurance,” since there are “a lot of other companies” trying to buy satellite launches and the Space Force needs to close their orders.

“We wanted to make sure that we basically hedged against the scarcity of launches that could happen because if there is absolutely too much demand and everyone is [buying]”The prices can be very high,” Mellon said.

But despite that fear, Pentecost said that 2026 “looks like the sweet spot” when a number of the companies’ rockets will be developed and ready to fly. And the companies that stay on the right track will have the upper hand in the third phase of the NSSL.

“If you fly before then, or if your schedule shows you will fly before then, you will have significant strengths, which will put you in a better position to win the best provider or second best in this competition,” said Pentecost.

Most consumers have cut back on spending because inflation is squeezing their wallets, but they haven’t stopped paying for brand-name health and personal care products, said Kenvue CEO Thibaut Mongon.

Mongon told CNBC on Thursday that consumers are still willing to spend on the company’s branded products — even if they cut discretionary spending at retail stores and cut back on some essential items by changing their usual purchase size or switching brands at lower prices.

the Johnson & Johnson pop-up consumer Kenvue beat second-quarter revenue and adjusted earnings estimates on Thursday, helped by resilient demand for the company’s wealth from widely recognized brands like Band-Aid, Tylenol, Listerine, Neutrogena and Aveeno.

However, the company’s share price fell after J&J announced that it would launch an exchange bid to reduce its stake in Kenvue much earlier than expected.

Kenvo also noted that “private label” penetration into the consumer health products market was stable during the quarter. Private label refers to products that are manufactured and sold under a specific retailer’s name and are sold at a lower price and are intended to compete with branded products such as Kenvue.

These spending trends could bode well not only for Kenvue, but also for other companies in the consumer health, beauty, and beverage industries that may not see consumers turning to cheaper products as often despite higher prices.

“We are now living in a volatile environment with continued consumer uncertainty and continued inflationary pressures,” Mongon told CNBC. “But I think people are very focused on their health and well-being right now.”

“They want to make sure they are doing what it takes to improve their health,” he said. “They’re looking for reliable, scientifically backed, and effective solutions to take better care of their health, and that’s what we and our brands do. It’s what we’ve been doing for a long time.”

Kenvue expects continued strong demand in the coming quarters. The company expects 2023 sales to increase between 4.5% and 5.5% over last year.

RBC Capital analyst Nick Moody expressed confidence in Kenvue’s ability to “maintain its momentum,” highlighting consumer confidence in the company’s brands, health and personal care products in general.

He noted that trade reduction pressures have increased for some companies, based on their market share changes over the past few months. Meanwhile, Kenvue has gained market share, and will likely continue to do so despite the broader environment.

“If we were going to see a decline in trade with them, we would have started to see it already,” Modi said.

Like Kenvue, some beauty and beverage companies may not see the same kind of trade declines as some core consumer sectors during the current period of macroeconomic uncertainty, according to Modi.

He said beauty products such as makeup are increasingly seen as an “affordable luxury” even as inflation squeezes consumers’ budgets.

“They don’t want to feel bad about their situation and buy cheaper makeup,” Modi said.

companies like Hollandwhich sells cosmetics, skin and hair care, and other beauty products, has benefited from the flexibility of the beauty category.

Earlier this year, Ulta said its 2022 revenue exceeded $10 billion, while annual net income exceeded $1 billion — both company records. Ulta also reported first-quarter earnings that beat expectations in May, largely driven by demand for its beauty products.

Oddity Tech, a beauty and wellness company that uses artificial intelligence to develop cosmetics, also appeared to be harnessing the power of the beauty category when it made its public market debut on Wednesday. Shares of the direct consumer platform rose 35%.

Beverage companies are also well positioned, Modi said, noting that big brand names such as Coca-Cola are not at great risk of private label penetration.

Coca-Cola’s first-quarter earnings beat expectations for higher demand for its beverages. But price increases for its products, which were implemented to mitigate the impact of inflation, also helped support results.

Monjon said consumers are turning to brands and products they “know and trust” during tough economic times.

The behavior — and a growing focus on health and well-being — is fueling demand for Kenvue products, which have been “in homes for years, decades, sometimes generations,” he said.

Modi agreed, adding that the Covid-19 pandemic has greatly increased consumers’ attachment to brands, especially those that help people take care of their health.

For example, demand for Tylenol soared and outpaced other pain relievers during the pandemic as people scrambled to stock up on essential health products.

“During the time frame of Covid, you were looking to save your family or get your kids through a difficult period of time with certain medicines and products, and I think that kind of emotional connection and sharing helped sustain the brand,” Modi told CNBC.

“Consumers tend to trust these brands during the most traumatic moments in their lives, so I think that’s why we’re seeing brands like Kinview remain so resilient despite the overall pressure,” he said.

The pandemic has made consumers more able to “take their health into their own hands at home,” added Navan Tai, an analyst at BNP Paribas Ixan.

This shift is likely to benefit Kenvue and others in the consumer health field, she said, and is “an additional differentiation from other consumer categories.”

I’ve noted that Kenvue isn’t “totally immune” from decline and private-label competition. But she said product recommendations by healthcare professionals offer “some protection”.

Third-party surveys of some healthcare practitioners in the United States from 2020 to 2022 found that Tylenol was the top adult pain medication recommended by physicians nationwide, according to an April Kenvue IPO filing.

Those surveys also found that neutrogena was the leading sunscreen and acne treatment brand in the united states, while listerine was the top dentist-recommended mouthwash.

Mongon noted during the company’s earnings call that these recommendations “ultimately foster a lifetime of loyalty to our brands, loyalty that is passed down from generation to generation.”

Artificial intelligence is having a huge impact on the automotive industry.

Revenue from sales of self-driving cars is expected to reach $70 billion by 2033, according to Future Market Insights. But AI self-driving cars aren’t the only change – AI technology has already been integrated into car production.

As part of this industry-wide trend, the BMW Group is now shifting gears to rely more on artificial intelligence to create a leaner and more efficient manufacturing process.

Over the past few years, BMW has She upgrades her Spartanburg, South Carolina factory to include new AI capabilities. The plant spans over 8 million square feet and produces approximately 60% of all BMW vehicles sold in the United States which amounts to more than 1,500 vehicles produced daily.

At The Body Shop, robots weld between 300 and 400 metal studs into the frame of each SUV. That’s about half a million studs a day that are applied by machines and now run by AI.

On top of that, AI technology checks to make sure each bolt is precisely positioned, according to BMW Group Principal Curtis Tingle. If a stud is out of place, the system tells the robots to correct it. No human intervention needed.

“It’s a complete closed loop,” Tingle told CNBC. “[AI] It removes human thinking, human manual intervention, right out of the equation.”

Tingle said the new technology has greatly improved efficiency. “We are achieving five times more than we thought possible even before, with what AI is achieving now.”

According to Tingle, the AI ​​nail correction laser has already saved the company more than $1 million annually. He said the new technology allowed BMW to remove six workers from the line and redeploy them to other jobs at the plant.

BMW told CNBC that the AI ​​technology is patent pending and developed within the Spartanburg plant.

On the factory floor, Camille Roberts, Project Head of IT at BMW Group, explains that the new artificial intelligence software is helping speed up the carmaker’s existing inspection process.

Even SUVs are moving down the line, 26 different cameras around the grounds are taking pictures. That’s when, according to Roberts, “the AI ​​kicks in, identifies problems and reports them for a human to fix,” thus preventing the imperfect car from being shipped.

Roberts told CNBC that prior to the new AI upgrade, human workers could not inspect every vehicle as often as they can now, adding, “It’s not really possible to inspect every vehicle. … Production numbers are not going to meet global demand.”

There is still room to run for BMW’s AI technology, said Oliver Bilstein, BMW Group Vice President for Logistics and Production Control.

Workers at the plant wear what Bilstein calls factory scanners that take high-resolution measurements and images of every centimeter of the plant.

These images are used to build a 3D “digital twin” of the plant, Bilstein said, allowing BMW to instantly make adjustments and understand how they affect production before it implements a change in the real world. BMW plant planners around the world can access these detailed plans online.

With the help of the new AI software, Bilstein said, the scanning process now takes days instead of months.

Ultimately, this kind of AI technology will be able to learn, on its own, how to discover and recommend new ways to make the BMW Group’s automated assembly line more efficient, he said.

AMC Entertainment It dropped plans to charge customers variable prices for cinema seats.

The company announced its “Sightline” pricing strategy in February and tested it at select locations in three US markets. The program costs moviegoers more to get the best theater seats, or “preferred line of sight” seats.

The program also lowered prices for seats deemed less attractive to patrons, such as those in the front row of theaters.

The change comes as the movie theater industry struggles during its slow summer blockbuster season. And theaters are counting on this week’s releases of Barbie and Oppenheimer to bring much-needed foot traffic to theaters.

Shares of AMC Entertainment fell less than 1% on Thursday. The stock is up more than 5% this year, lagging behind the broader market.

Preferred Sightline seats included select locations in the middle of the auditorium that were preferred by some moviegoers, while Value Sightline seats were those usually located in the front row.

The chain said the program will end at participating locations in the coming weeks.

The decision comes after the pilot program showed moviegoers had little or no interest in sitting in the front row, despite lower prices. The company said it also found that most moviegoers continued to choose the seats they preferred, even at higher prices.

The company added that the focus is ensuring that AMC’s ticket prices remain competitive. Other theater chains like the Regal don’t charge higher prices for better seats.

The movie theater chain said it will now focus on testing front-row seats with more comfortable seats at select locations in the US later this year.

CNBC has reached out to AMC for additional comment.

The main takeaway from NetflixSecond quarter earnings are business… good.

correct. The core business of a large media and entertainment company is fine.

Netflix added 5.9 million subscribers in the quarter, a sign that its primary initiative for 2023 — cracking down on password sharing and launching a cheaper $6.99 per month ad category — is bringing in new subscribers. Netflix added 1.2 million subscribers in the US and Canada in the quarter — its biggest regional quarterly gain since 2021.

This is not the story for the rest of the media industry. Disney And Warner Bros. Discovery The year was spent cutting content from streaming services to avoid paying waste and saving on licensing fees. Both companies have laid off thousands of employees over the past 12 months to boost free cash flow. Paramount Global And ComcastBoth NBCUniversal affiliates said that 2023 would be the largest annual loss ever for their broadcast businesses.

Meanwhile, Netflix boosted its free cash flow estimate to $5 billion for the year. Previously, the company had estimated it would have $3.5 billion in revenue, but strikes by actors and writers would reduce spending on content. This means that Netflix will actually get more money than you previously thought.

In the next quarter, Netflix expects subscriber gains to be around 6 million again. The company said revenue will accelerate in the second half of the year as it sees the “full benefits” of its password-sharing campaign and steady growth in its ad-supported plan.

In the past year, Netflix’s rating has dropped 60% as subscriber counts have stalled. The company spent a significant amount of time on earnings conference calls focusing on and explaining its new video game business, which was introduced in mid-2021, to help kick-start a new growth narrative.

This quarter’s shareholder letter barely addresses video games.

Why? Because unlike the rest of the media industry, Netflix doesn’t need a new narrative. The old one still works. The flow is increasing. Stacks of liquidity are on the rise. The announcement excites investors. Netflix has a steady pipeline of international content and a deep library to outpace the extended writers and actors strike.

“The lack of references to video games in the shareholder letter suggests advertising is the shiny thing that dominates most of the company’s focus,” said Ross Bennis, an analyst with research firm Insider Intelligence.

Shares of Netflix fell 5% after hours. That’s more of a symptom of profit-taking after Netflix’s big gains this year (up more than 62% as of Wednesday’s close) than anything to chafe in its preliminary quarterly numbers.

After a sharp fall last year, the company is back on track. And you didn’t even need to switch trains.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

— CNBC’s Lillian Rizzo contributed to this article.

Medicare plans to expand its coverage of PET scans that are used to help diagnose Alzheimer’s disease, a major policy shift that could make it easier for patients to access new treatments entering the US market.

The proposal would abolish the current Medicare policy nationwide. Currently, the Seniors Program will cover one PET scan per age for patients participating in clinical trials.

Medicare’s proposal would allow regional organizations, called Medicare Administrative Contractors, to decide whether to cover the diagnostic tool. These regional contractors make coverage decisions based on whether the service is “reasonable and necessary” for a diagnosis.

Chiquita Brooks-LaSure, president of the Centers for Medicare and Medicaid Services, said in a statement Monday that the proposed policy “fulfills CMS’s commitment to allow broader coverage of this diagnostic test.” A CMS spokesperson said a final decision could come within 90 days.

Positron emission tomography scans are an important diagnostic tool that detects the presence of a protein amyloid in the brain associated with Alzheimer’s disease. Screenings are the most common way to help diagnose patients.

People on Medicare generally pay 20% of the cost of a PET scan after the deductible is met. The cost of a one-time scan would be about $313 per patient, according to one estimate in a study published in the medical journal JAMA Internal Medicine.

doctor. It’s possible for regional contractors to come to different coverage decisions for PET scans, said Sean Tunis, CMS’ former chief medical officer. But these organizations generally work together on key issues and there’s no reason to think their policies on PET scans will differ widely across the United States, said Tunis, now a consultant at Rubix Health.

Medicare’s coverage of PET scans should make it easier for patients to access new treatments like Leqembi, which was approved by the Food and Drug Administration earlier this month.

Medicare agreed to cover Leqembi’s treatment for Eisai and Biogen’s Alzheimer’s, but requires patients diagnosed with mild cognitive impairment or mild Alzheimer’s disease with documented evidence of amyloid on the brain.

Most patients choose positron emission tomography to confirm the presence of amyloid because imaging is less invasive than alternative diagnostic tools such as spinal taps. Blood tests are also in development, and some are already in use, but not yet widely deployed.

Medicare said it would also cover other antibody therapies for Alzheimer’s with the same terms if they receive approval from the Food and Drug Administration. Eli Lilly The US Food and Drug Administration (FDA) expects to make a decision on its treatment, donanimab, by the end of the year.

The Alzheimer’s Association, a pressure group that advocates for people living with the disease, said the new policy proposed by Medicare would remove unnecessary barriers for patients. Maria Carrillo, the consortium’s chief scientific officer, called the decision “a huge step forward”.

Marriott And MGM Resorts International On Monday, it announced a partnership to connect its loyalty programs and give customers more options to take advantage of.

Under the deal, MGM guests in the US can earn Marriott Bonvoy Rewards points and Bonvoy members, in turn, will have access to 17 MGM properties when they spend their points.

The 40,000 rooms MGM offers will increase Marriott’s global portfolio by 2.4%.

The partnership seeks to take advantage of frequent or business travelers, who can be fiercely loyal to certain hotel brands in an effort to cash in on the rewards. These loyalty programs are driving businesses and helping to differentiate themselves from competitors at a time when travel continues to recover from a pandemic shutdown.

“The value is in the quantity and quality of the customer,” MGM CEO Bill Hornbuckle told CNBC in an interview Monday.

Bonvoy has more than 180 million members. If members want to use their rewards points for stays on the Las Vegas Strip, currently, their only hotel option is Hotel Cosmopolitan, which MGM bought in 2022.

When the new partnership launches this fall, Bonvoy members will be able to redeem their rewards at 12 more resorts in the strip and five more MGM resorts nationwide.

Marriott CEO Tony Capuano said MGM Resorts brings a wealth of intellectual property to the portfolio in addition to entertainment, upscale culinary options and other one-of-a-kind experiences.

“It is really an exciting opportunity for our members,” said Capuano.

Capuano said last month that the global hotel chain raised its revenue per available room forecast based on a 26% increase in group business this year.

The convention business has yet to fully recover from the lows of the Covid-19 pandemic. However, the conference calendar is packed, and there is optimism that teamwork, along with increased international visits, may push the results even higher.

Las Vegas is one of the top destinations in the United States for conferences, conventions, and meetings.

When asked if the Bonvoy program would give MGM a competitive edge in the syndicated business against competitors such as CaesarHornbuckle said, “The answer is unequivocally yes.”

Meanwhile, casinos face tough year-over-year comparisons in the second half of 2023, and a partnership with Marriott could give MGM a competitive edge in sports betting business BetMGM, which is jointly owned. get.

MGM sportsbook customers will earn Bonvoy points on certain transactions, and Bonvoy members will see marketing of MGM sportsbooks on the Marriott website.

Adam Greenblatt, CEO of BetMGM, stated in a press release announcing the deal that it would create “a truly powerful rewards program that connects our players and Marriott guests to the comprehensive omnichannel BetMGM experience.”

— CNBC’s Don Gil, Jessica Golden and Casey O’Brien contributed to this report.