Morning Reads
- China Has Second Thoughts About Controlling Prices in Its Multi Trillion-Dollar Housing Market
- China Puts Evergrande’s Billionaire Founder Under Police Control
- What the U.S.-China Chip War Means for a Critical American Ally
- US Investors Want Clarity on Biden’s Vague Curbs on China Tech
- ECB’s Holzmann Floats Tenfold Hike in Minimum Reserves
- IPO Optimism Grows, Fueling Hope for Global Recovery
- US Government Shutdown’s Economic Risks Grow the Longer It Lasts
- DOJ Steps Up Probe Against Credit Suisse, UBS Over Alleged Russian Sanctions Evasion
- Crypto’s Wild D.C. Ride: From FTX at the Fed to a Scramble for Access
- A $12 Million Request to Cover a Crypto Scam Sank a Bank CEO
- Why Now Is a Horrible Time to Refinance Student Loans
- Britain Approves Huge, Controversial Oil and Gas Field in the North Sea
- E.U. Law Sets the Stage for a Clash Over Disinformation
- Lina Khan vs. Jeff Bezos: This Is Big Tech’s Real Cage Match
- How Elon Musk Came to Influence the Fates of Nations
- A Futuristic Plan to Make Steel With Nuclear Fusion
- This Ford vs. GM Feud Could Shape the Future of EVs in America
- Auto Workers Aren’t Striking Only For Higher Wages. They Want Their Pensions Back, Too
- Las Vegas and Its Big, Big Ambitions
- Las Vegas Hospitality Workers Authorize Strike at Major Resorts
- Costco Keeps Members and Investors Guessing
- Who’s Afraid of $100 Oil?
- Can the U.S. Make Solar Panels? This Company Thinks So.
- Slowing, Graying and in Debt, Can China’s Industrial Heartland Be Revived?
- Ford Tried to Sell the Electric Mustang to China the Tesla Way—It Didn’t Work
- Teetering China Property Giants Undercut Xi’s Revival Push
- World’s Mega-Rich Are Betting on US Renters to Grow Their Billions
- The Very Rich Are Often Bad Investors. Here’s Why
- Only Richest 20% of Americans Still Have Excess Pandemic Savings
- Banks in EU Largely Comply with ‘Basel Endgame’, Says Watchdog
- Bond Traders Roiled by Fed See US Shutdown as Next Big Wild Card
- Shutdown Would Blindfold Fed in Piloting Course on Rates
- Dimon Warns World Not Ready for 7% Fed Rate
- Wall Street Echoes Fed’s View on Growth, Higher-for-Longer Rates
- UAW Fight Against Billions in Buybacks Forces Investor Rethink
- Why Biden and Trump Are Courting Striking Autoworkers
- Auto CEOs Make 300 Times What Workers Make. How That Stacks Up
- Why Ford Has Been More Willing to Work With the UAW Than GM or Stellantis
- Corporate America Promised to Hire a Lot More People of Color. It Actually Did
- Cisco’s $28 Billion Splunk Deal May Ignite Software Deal Frenzy
- As Its U.S. Shop Opens, TikTok’s Chinese Merchants Struggle to Sell Their Mops and Soap Dispensers
- Sam Bankman-Fried’s Trial to Test Dueling Explanations for FTX’s Collapse
Todays Open Interest Change
PREMIUM
Prepper
nHollywood writers are poised to return to work this morning after the governing boards of their unions approved a new contract with major studios. The strike, which lasted nearly five months, will still need to be endorsed by the writers themselves in early October, but the new deal will allow them to work during that process. Late-night talk shows will be the first to resume production, but scripted episodes and films will take longer to return, with the Screen Actors Guild still on strike and similar negotiations likely taking place after the Writers Guild of America ratifies its agreement.
What's in the new contract? Writers were able to secure some wins, including salary increases, bonuses for high-performing shows and guarantees for a minimum number of staffers. Among the bigger provisions is the ability to share in the success of content that performs well on streaming services like Netflix (NFLX), or a residual payment based on viewership, which will be calculated by hours streamed and runtime. The cost of the strike is said to be in the billions of dollars, with the market values of Disney (DIS), Paramount (PARA) and Warner Bros. Discovery (WBD) plunging by 20%-45% since early May (NBCUniversal (CMCSA) was the only major studio to buck the trend).
Another big reason behind the strike was to secure protections against the use of artificial intelligence. Under the new contract that runs until May 2026, writers have the right to use AI with consent from their production partners, but they can't be forced into using or incorporating AI-generated content (which must come along with disclaimers). AI-generated storylines will also not be regarded as "literary material," meaning computers cannot get screen credits or associated rights, though the language surrounding the usage of writers' material to train AI was more controversial.
Will it be enough? "They spent months trying to craft words to protect writers from AI and they ended up with a paragraph that protected nothing from no one," according to media mogul Barry Diller, former CEO of Paramount Pictures and founder of the Fox Broadcasting Company. "Fair use needs to be redefined, because what they have done is sucked up everything and that violates the basis of the copyright law. All we want to do is establish that there is no such thing as fair use for AI, which gives us standing."
In the crosshairs
Amazon (AMZN) fell 4% on Tuesday after it was formally sued by the FTC and 17 states on charges that it used anticompetitive strategies to maintain its monopoly power. As widely expected, the lawsuit claimed the e-commerce giant's actions blocked competitors and sellers from lowering prices, overcharged sellers, and prevented rivals from fairly competing. "The lawsuit is wrong on the facts and the law, and we look forward to making that case in court," Amazon responded in a statement. This is a landmark antitrust suit, as Amazon controls about 40% of the e-commerce market, with SA analyst Bradley Guichard seeing three potential outcomes to the case. (243 comments)
Rising theft
Target (TGT) will shutter nine underperforming stores in the U.S. on Oct. 21 due to increased violence and organized retail crime at the locations. The store closures are expected to have a positive impact on margins. Retail theft has been on the rise in the U.S., climbing nearly 20% last year, according to the National Retail Federation. The top five areas that were affected were Los Angeles, San Francisco/Oakland, Houston, New York and Seattle. Other retailers such as Dick’s Sporting (DKS), Lowe’s (LOW) and Macy’s (M) have also pointed to a rise in crime as a factor in reduced earnings and expect the trend to continue. (140 comments)
ChatCIA
The Central Intelligence Agency is slated to roll out a new software tool to help it sift through the mountain of publicly available data, akin to ChatGPT - the popular chatbot created by Microsoft (MSFT)-backed OpenAI. The CIA did not say what model will be used to train the tool or how it will protect data from getting onto the internet, but the model will be available to 18 different government agencies, including the FBI and NSA. ChatGPT has taken the world by storm ever since its launch, resulting in an explosion of investment in generative AI. Riding the AI wave, OpenAI has reportedly held talks with investors about an existing share sale that could value it at $80B-$90B. (19 comments)
Today's Markets
In Asia, Japan +0.2%. Hong Kong +0.8%. China +0.2%. India +0.3%.
In Europe, at midday, London -0.2%. Paris flat. Frankfurt -0.2%.
Futures at 7:00, Dow +0.2%. S&P +0.3%. Nasdaq +0.3%. Crude +1.6% to $91.83. Gold -0.4% at $1,911.80. Bitcoin +0.7% to $26,425.
Ten-year Treasury Yield -5 bps to 4.51%.
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Durable Goods
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $24B, 2-Year FRN Auction
1:00 PM Results of $49B, 7-Year Note Auction
Companies reporting earnings today »
What else is happening...
President Biden joins United Auto Workers on the picket line.
Fed's Kashkari sees 40% chance of 'significantly' higher rates.
JPMorgan (JPM) to pay $75M to settle lawsuit over Epstein ties.
Samsung SDI to invest $2B in EV battery plant with Stellantis (STLA).
UPS (UPS) plans to hire 100K seasonal workers for holiday rush.
China Evergrande (OTC:EGRNF) chairman under police watch.
Costco in charts: Adjusted comp sales growth continues to slow.
VMware/Broadcom deal spread narrows on China review update.
Liberty Media (LSXMK) proposes combination with Sirius XM.
Peloton (PTON) cofounder, product chief Cortese to step dow