A cloud shot up vertically like a plume of smoke in a matter of seconds before a Hawaiian Airlines flight last month hit severe turbulence and 25 people on board were injured, according to a preliminary report Friday by the National Transportation Safety Board.

The captain of the Dec. 18 flight from Phoenix to Honolulu told investigators that flight conditions were smooth with clear skies when the cloud shot up in front of the plane and there was no time to change course, the report said. He called the lead flight attendant and told her there might be turbulence. Within one to three seconds, the plane encountered severe turbulence, the report states.

Shortly afterward, the lead flight attendant told the crew there were multiple injuries in the cabin.

Twenty-five of the 291 passengers and crew members on board were injured, including four passengers and two crew members who were seriously hurt, the report says. The plane sustained minor damage.

Tiffany Reyes, one of the passengers who were taken to hospitals, said the next day that she had just gotten back to her seat from the bathroom and was about to buckle her seatbelt when the flight dipped.

In an instant, Reyes said she found herself on the aisle floor, staring up at caved-in ceiling panels and a cracked bathroom sign that was hanging.

I asked everyone around me, Was that me? Reyes said. They said I had apparently flown into the ceiling and slammed into the ground.

Reyes said she initially thought something had hit the plane and that it was crashing, and that she briefly thought they were going to die because she had never encountered anything so violent on a flight.

Thats the most terrifying experience Ive been through in my whole 40 years of life, Reyes said.

Hawaiian Airlines Chief Operating Officer Jon Snook said at the time that such turbulence is unusual, noting that the airline had not experienced anything like it in recent history. The fasten-seatbelts sign was on at the time, though some of the injured were not wearing them, he said.

It happened about 40 minutes before landing in Honolulu, according to the report.

The report includes factual information but not a probable cause. That is typically included in the final report, which could take a year or two to complete.

An airline spokesperson declined to comment on the report Friday because the NTSB investigation is ongoing.

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Just as investors are celebrating the prospect of peak inflation and potential for a soft landing, this earnings season is likely to show theres still plenty that should keep them up at night.

With costs still on the rise, interest rates starting to bite and consumer spending declining, results are expected to reveal the start of a US earnings recession, which will last until the second half of 2023, according to Bloomberg Intelligence strategists.

While analysts have been busy slashing their forecasts over the past few weeks, the consensus for corporate profits in 2023 remains materially too high with or without an economic recession, according to Morgan Stanleys Michael Wilson, who warns that stocks can fall about 25% in the first quarter under pressure from poor earnings and guidance.

Madison Faller, global strategist at JPMorgan Private Bank, expects management to provide cautious commentaries given rising recession risks, higher than normal inventories and wage pressures.

With developed economies slowing, we think Street estimates will likely continue to move lower, but not collapse immediately, Faller said. Margin degradation will likely continue into 2023 and will be the focus in management discussions with investors.

With Wall Street banks including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. having just kicked things off, here are five key areas that market participants will be watching this earnings season:

Fed pivot

While signals from earnings are important, investors attention is laser-focused on the Federal Reserves next moves. And with US and European interest rates expected to peak by the summer, any comments on the impact of monetary policy are likely to be closely scrutinized. Investors will also be keen to learn whether firms have been able to secure low borrowing costs for the coming years and avoid feeling the pinch from rising interest rates.

Against that backdrop, earnings estimates have fallen for most of last year. Yet theyre still too high, according to strategists like Goldman Sachs Group Inc.s David Kostin, who expects further cuts as the risk of a recession, margin pressure and new corporate taxes outweigh upside risks such as Chinas reopening.

The data is increasingly pointing toward slowing activity across the board, said James Athey, investment director at Abrdn. Very few sectors now seem immune to the slowing. Realistically, I think we are still in the early stages of the impact of Fed tightening.

Consumer spending

Slowing demand will be in focus this reporting season as a harbinger of recession. US economic data showed consumers lost momentum in November amid higher interest rates and elevated inflation. Americans are tapping into savings and leaning more on credit cards, raising the question of whether theyll be able to continue driving economic growth through 2023.

Some companies have managed to navigate these headwinds, for now at least. Nike Inc.s quarterly sales exceeded Wall Street estimates amid higher demand during the holidays and FedEx Corp. earnings beat analysts estimates due to price increases and cost cuts. In Europe, Ryanair Holdings Plc, the regions biggest discount airline, raised its full-year profit target following a stronger-than-expected Christmas travel period, while holiday sales rose at Tesco Plc and many other UK retailers.

The attempts havent been successful everywhere. Tesla Inc. delivered fewer vehicles than expected last quarter despite offering hefty incentives in its biggest markets, sending its shares tumbling. Macys Inc. also expects to report fourth-quarter sales that were weaker than previously forecast, and sees continued pressure on the consumer in 2023.

Job cuts

Earnings reports will also be watched for further evidence of layoffs as companies react to the deteriorating backdrop. The phenomenon is most pronounced in tech, where firms are slashing jobs at a pace nearing the early days of the pandemic, as evidenced by recent announcements from Amazon.com Inc. and Salesforce Inc. Meanwhile, Facebook owner Meta Platforms Inc., Apple Inc., and Alphabet Inc. are all slowing or pausing hiring, while Taiwan Semiconductor Manufacturing Co. is bracing for weaker-than-expected sales by reducing spending.

Within the banking space, Goldman Sachs, Morgan Stanley, Credit Suisse Group AG and Barclays Plc have all either already fired staff or announced that they plan to do so in coming months. McDonalds Corp. is cutting corporate jobs, the first restaurant chain in the US to do so despite its relatively strong sales performance in recent years.

A lot of companies have become too big for the shrinking economy and the more difficult regulatory environment, and they are indeed in a greater need for right-sizing, said Marija Veitmane, a senior strategist at State Street Global Markets, who stresses the importance of looking at earnings guidance, which is likely to be a lot more negative that currently reflected in consensus estimates.

Energy prices

The impact of falling power prices will be closely monitored after WTI oil tumbled over 35% from its March peaks and gas slid in Europe amid milder weather a vast turnaround for commodities from just six months ago. Exxon Mobil Corp., the largest US oil company, already said lower crude and natural gas prices had a negative impact on fourth-quarter earnings.

US energy firms profits are set for a fourth consecutive quarter of at least double-digit growth, but could post year-over-year earnings declines from the second quarter of 2023 to at least the first quarter of 2025, according to Bloomberg Intelligence.

Slowing global demand for energy commodities will weigh on the energy sector, said Joachim Klement, head of strategy, accounting and sustainability at Liberum Capital. 

On the flip side, Klement noted that lower power prices are good news for sectors that have suffered a margin squeeze in 2021 and 2022. This is particularly pronounced in the consumer discretionary world.

China reopening

Commentary from companies with revenue and cost exposure to China will be closely scrutinized, after the worlds second-largest economy fully reopened on Jan. 8. Mining, technology and luxury firms in the US and Europe derive sizable sales from China, while cosmetics makers in Japan and tourism stocks across Southeast Asia should also get a boost.

However, with Chinese Covid cases surging and many countries imposing border restrictions for travelers from the country, the impact of the reopening on global earnings may be limited in the current quarter.

Elsewhere in corporate earnings:

Asia:

  • Taiwan Semiconductor Manufacturing rose in Taipei, tracking its ADRs higher, after the chipmaker said it was cutting spending as it expects sales weakness ahead. While analysts noted the firms outlook could weigh on the sector, they also saw signs of a potential near-term bottom
  • Shares of Fast Retailing slid after the Uniqlo owners operating profit missed analyst estimates on the impact of the pandemic in China

EMEA:

  • Kindred fell after preliminary 4Q results missed expectations. The online gambling company said betting activity during the football World Cup wasnt enough to make up for the revenue lost from fewer top football league games
  • Partners Group shares declined after the Swiss firm reported assets under management that missed expectations. The significant slowdown was clearly a negative surprise, say Vontobel analysts. Separately, Societe Generale and Citigroup downgraded the stock

Americas:

  • Bank stocks reversed earlier losses to trade higher on Friday, even after executives including JPMorgans Jamie Dimon and Bank of Americas Brian Moynihan warned of an uncertain economic environment as four of the six biggest US lenders reported their fourth-quarter results
  • Wendys shares moved higher as investors focus on better-than-expected preliminary fourth-quarter results, boosted capital allocation, and the removal of Trians strategic review distraction.

With assistance from Ishika Mookerjee

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China said almost 60,000 people died at medical institutions from Covid-related causes since early December, offering some clues on the cost of an abrupt and ill-prepared shift of its virus policy. 

A total of 59,938 deaths were reported at hospitals across the country between Dec. 8 and Jan. 12 linked to Covid-19, according to the National Health Commission on Saturday. Of these, 5,503 died from respiratory failure and 54,435 died from other diseases but were infected with Covid.

The average age of those who died was 80.3 years and more than 90% of them had other diseases including cardiovascular diseases, advanced tumors and metabolic diseases, the commission said. The number of deaths of the elderly is relatively high because of increased incidence of respiratory diseases and aggravation of cardiovascular diseases in the winters among older people, said Jiao Yahui, an official at the commission. That, coupled with Covid infections, aggravated the situation, Jiao said. 

It has become increasingly difficult to gauge the impact of Covid in China as authorities stopped the frequent release of data and recently adopted a narrower definition of a Covid fatality only those who die from respiratory failure caused by the virus are counted. 

Reports of surging deaths across a swathe of the country on social media suggest the actual number of those who died from the infection may be much higher than the official count.

With assistance from Michelle Fay Cortez

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The move ups the ante in whats already a high-stakes battle over President Joe Bidens energy agenda and conservationists fighting to protect an endangered wildflower found only at the proposed mine site on a high desert ridge halfway between Reno and Las Vegas.

Ioneer Ltd. has hoped to begin mining at Rhyolite Ridge by 2026 in Esmerelda County. The Energy announcement said the site could produce enough lithium to support production of about 370,000 electric vehicles annually for decades.

The loan would be the latest project to demonstrate the Biden administrations commitment to strengthen the nations battery supply chain, electrify the transportation sector and cut reliance on fossil fuels and foreign supplies of raw materials, the Department of Energy said.

Jigar Shah, director of DOEs Loans Programs Office, said his office is excited to further develop an environmentally responsible U.S. supply chain for critical materials.

Rhyolite Ridge is a major step towards bolstering domestic lithium production for clean energy technologies, he said.

James Calaway, executive chairman of Ioneer, said the conditional commitment highlights the projects strategic role in strengthening the nations critical mineral supply chain in providing a secure, sustainable and reliable domestic source of lithium for the growing vehicle ecosystem. Bernard Rowe, Ioneers managing director, said it came after 23 months of discussion and due diligence by Energy and represents a significant milestone for the project.

But the project still faces a significant legal and regulatory challenge in developing a mining operations plan that will provide adequate protection for the endangered Nevada wildflower, Tiehms buckwheat.

The U.S. Fish and Wildlife Service said in declaring it endangered last year that it is on the brink of extinction and the mining project posed the single biggest threat to its survival.

Conservationists have sued in the past to protect the 6-inch-tall plant with yellow blooms and vowed on Friday to do so again if necessary.

What this looks like is a fairly transparent effort by the Biden administration to build political and economic momentum for the project in an effort to steamroll the U.S. Fish and Wildlife Service and the Endangered Species Act, said Patrick Donnelly, Great Basin director for the Center for Biological Diversity.

Ioneer is going to have to completely overhaul the design of this mine if they expect to pass through permitting, he said in an email to The Associated Press. Weve sued or initiated lawsuits over Tiehms buckwheat four times already, and we wont back down until every buckwheat is saved.

The Energy Department announcement said the Ioneer project is working to minimize impact on the plant. It said the loan is contingent on completion of an environmental impact statement in accordance with the National Environmental Policy Act (NEPA).

The Biden administration has made a plan for half a million charging stations for electric vehicles a signature piece of its infrastructure goals. That effort, and the growth of electric vehicle companies such as Tesla, will require much more lithium to make batteries.

Although lithium reserves are distributed widely across the globe, the U.S. is home to just one active lithium mine, in Nevada. Worldwide demand for lithium was about 350,000 tons (317,517 metric tons) in 2020, but industry estimates project demand will be up to six times greater by 2030.

Shah said large projects like this go forward step by step.

We clearly are not committing any capital to the project yet, Shah said Friday in a telephone interview with AP. They still have to meet the conditions. But by doing this, it gives their equity investors some comfort that they should continue to invest in the project.

Sen. Jacky Rosen, D-Nev., is among those backing the project.

I applaud the Energy Department for providing this loan to help support the mining and processing of Nevadas critical minerals, help reduce greenhouse gas emissions, and contribute to the creation of jobs in our state, she said in a statement.

Lithium is fundamental to the battery technology that is most common in electric vehicles and battery electric storage systems. But many engineers are working on alternative battery chemistries because lithium involves rock mining, which means major disturbance to the environment.

Ioneer is a lithium focused company based in New South Wales, Australia and Reno.

Another new lithium mining project in development in the U.S. is proposed for Thacker Pass by Lithium Americas near the Oregon line. That northern Nevada mine would make millions of tons of lithium available, but it too faces legal challenges. Native American tribes have argued that its located on sacred lands near where dozens of their ancestors were massacred in 1865.

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Bitcoin surged over $21,000 on Saturday amid optimism that it may have bottomed and inflation has peaked.

The largest cryptocurrency rose as much as 7.5% to $21,299, before paring gains as the day progressed. It hadnt been above $20,000 since Nov. 8, and Saturday was the 11th straight day of advances. Second-largest token Ether surged as much as 9.7%, and others such as Cardano and Dogecoin also notched gains. Solana soared as much as 35%.

The overall market cap of the crypto universe rose above $1 trillion for the first time since early November, according to data from CoinGecko.

There has been a steady grind higher since the start of the year, said Cici Lu, chief executive officer of Venn Link Partners Pte. It feels like we hit a supply air pocket and breaking through $20,000 resistance took out some stops. Optically, $20,000 for many is a key level. 

US short-term inflation expectations fell in early January to the lowest in nearly two years, providing a bigger-than-expected boost to consumer sentiment, according to the University of Michigans preliminary survey reading. A separate report showed consumer prices rising 6.5% in the 12 months through December, marking the slowest inflation rate in more than a year. 

The Federal Reserve is on track to downshift to smaller interest-rate increases following the further cooling in prices, though its likely to keep hiking until pressures show more definitive signs of slowing. Thats helped boost risk assets like the Nasdaq 100 stock index, which has gained for six straight days.

Cryptoassets performed well following the soft CPI print, suggesting that cryptos correlation to macro is not going away anytime soon, said Sean Farrell, head of digital asset strategy at Fundstrat. This weeks follow-through in price action is certainly encouraging, and barring any forced liquidations from troubled crypto company DCG, there is a high probability that the absolute bottom is in for crypto prices.

The price of Bitcoin was stuck in a narrow range around $16,000 to $17,000 for weeks before the latest breakout. The upward moves have caught shorts by surprise crypto short liquidations have topped $100 million in five of the past six days, according to data from Coinglass. Saturdays total was the highest, topping $449 million.

Katie Stockton, co-founder of Fairlead Strategies, offered a caution about the rally, which has taken Bitcoin above its 200-day moving average for the first time in a year.

Deeply overbought short-term readings challenge positive momentum, so we would not chase the rally at these levels, she said in a note Friday. She sees resistance near $21,500, where theres a 61% Fibonacci retracement level. 

Still, the upward trajectory could inject even further optimism into a market thats been struggling to find good news in recent months.

Declining CPI coupled with the announcement that the FTX liquidators have recovered $5 billion in liquid assets have given crypto markets plenty of factors to forget the macro picture, which is still bearish, said Hayden Hughes, chief executive officer of social-trading platform Alpha Impact. Markets have plenty of positive momentum heading into the next FOMC meeting later this month.

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Maine scored its first Mega Millions jackpot and someone beat the ill fortune of Friday the 13th  when a ticket purchased in the state matched the winning numbers for the lotterys estimated $1.35 billion grand prize.

The lucky combination of numbers drawn late Friday night were: 30, 43, 45, 46, 61 and gold Mega Ball 14. The winning ticket was sold at Hometown Gas & Grill in Lebanon, Maine, according to the Maine State Lottery.

The winner, whose name is not yet known, overcame steep odds of 1 in 302.6 million, which led to three months of drawings without a claim on the jackpot.

Congratulations to the Maine State Lottery, which has just won its first-ever Mega Millions jackpot, Pat McDonald, Ohio lottery director and lead director of the Mega Millions Consortium, said in a statement early Saturday.

The jackpot was the second largest in Mega Millions history and the fourth time the game has had a billion-dollar win. The largest Mega Millions jackpot in October 2018 was $1.53 billion claimed by a single ticket holder in South Carolina.

Fridays prosperous drawing also marked the seventh time there was a grand prize winner on Friday the 13th, a date superstitiously considered unlucky.

To claim the full $1.35 billion, the winner would need to take the money in an annuity with annual payments over 29 years. Most jackpot recipients prefer the reduced but quicker cash option, which for Friday nights drawing was an estimated $724.6 million.

The next grand prize drawing on Tuesday will drop to an estimated $20 million and a cash option of $10.7 million.

Until Friday night, there had been 25 straight drawings without a jackpot winner.

There were more than 7 million winning tickets across nine prize tiers Friday. Beyond Maines jackpot, 14 tickets matched five white balls to claim the second-tier prize of $1 million. Four were sold in New York, two in California and one each in Florida, Illinois, Kansas, Kentucky, Missouri, North Carolina, Pennsylvania and Texas, Mega Millions said.

Mega Millions is played in 45 states as well as Washington, D.C., and the U.S. Virgin Islands.

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The late co-founders of Subway, Fred DeLuca and Peter Buck, had little inkling decades ago their sandwich shop in Bridgeport, Conn., would grow into one of the worlds largest restaurant chains. But now, their heirs stand to become some of the richest people in America. 

The sandwich giant is exploring a sale that could value it at more than $10 billion, and has retained advisors with that in mind, according to the Wall Street Journal, citing people familiar with the situation

A Subway spokesperson wrote to Fortune, As a privately held company, we dont comment on ownership structure and business plans. We continue to be focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable.

In 1965 a teenaged DeLuca asked Buck, a family friend and nuclear physicist, for advice on funding his college education, according to Insider. That led to Buck lending him $1,000 to start a sandwich shopa move that eventually made both men billionaires. 

DeLuca ran the company for decades as it rapidly expanded in the U.S. and internationally. Buck became a largely silent co-owner after the company switched to a franchise model in 1973.

From its humble beginnings as Petes Super Submarines shopwhich did indeed pay for DeLucas University of Bridgeport educationthe company went on to dwarf McDonalds (and every other restaurant chain) by number of U.S. outlets. Its roughly 21,000 domestic locations registered $9.4 billion in sales in 2021, up 13% from 2020, and worldwide it had about 37,000 stores, according to the Journal. 

Subway has all along remained a private business with two families behind the scenes. After DeLuca was diagnosed with leukemiahe died in 2015 at 67his sister Suzanne Greco became CEO, until she retired in 2018. 

In 2019, the company finally brought in an outsider, picking former Burger King CEO John Chidsey to take the helm.

According to the Journals sources, a sale of Subway could attract both private equity firms and corporate buyers.

Because Subway never went public, its financesand how much money went to DeLuca, Buck, and their relativeshave never been open for public scrutiny. 

But as Bloomberg reported Thursday, hints have emerged here and there. Buck, by the time of his death at age 90 in 2021, had become one of the largest U.S. landowners, and he won a tussle with the IRS over gifting land to his sons at a steep discount. 

DeLuca collected $1 million per day in royalties in the early 2000s, according to a deposition from banker Fran Saavedra in 2017, as reported by Insider. He remained frugal despite his wealth, to the consternation of some relatives. 

Now, if a sale of the company comes to pass, the families of both men could become substantially wealthier. Its unclear who in the families are in line to receive a windfall, but DeLuca, for example, was survived by his son Jon, who serves as director of the Frederick A. DeLuca Foundation and, according to a 2021 article in Fort Lauderdale Illustrated, is raising children with TV personality Kavita Channe.

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