Morning Reads
- Driven by Prices for Energy and Food
- Russia Halts Natural Gas Flows to Germany Again
- Biden Still Undecided on Chinese Tariffs
- Powell Abandons Soft Landing
- Mortgage Demand Falls Even Further
- US Life Expectancy Sees Biggest Two-Year Decline in a Century
- This Remote Mine Could Foretell the Future
- Some Carmakers Say Recycling Car Parts
- Choosing Your Own Hours
- To Meet a New Generation
- Fast-Food Operators Mobilize Against California Wage Bill
- Bed Bath & Beyond Sinks After Saying It May Sell Shares
- HP Warns of Slowing Business Spending as PC Sales Sag
- Frustrations Mount at Washington Post as Its Business Struggles
- While Serena Williams Plays Her Final Matches At U.S. Open, Here’s How She’s Building Her Off-Court Investing
- Japan Declares ‘War’ on the Floppy Disk
Open Interest
Futures
PREMIUM
This Morning
1 in 6 Americans are smoking marijuana these days, a new high in the latest Gallup poll, which highlights how the times are rapidly changing. Only 1 in 8 Americans were toking last year, and that drops down to 7% of the population when going back to 2013. The trend has picked up as recreational use of cannabis becomes legal in nearly half of all U.S. states (with 38 states approving it for medical purposes), supported by shifting attitudes and cultural trends of the American public.
Putting it in perspective: Nearly a third of adult respondents under the age of 35 told Gallup that they smoke marijuana, while nearly half (a total of 48%) of Americans have tried pot at some point in their lifetime. That's up from 4% of the U.S. population that took a hit during the height of the hippie movement in 1969, 24% by 1977, 33% in 1985 and 38% in 2013. Another interesting find is that regular cannabis usage has surpassed cigarette use for the first time, with only 11% of Americans saying they smoke stoges in the poll conducted in July.
"The future of marijuana use is, I would say, somewhat up in the air, but the probability is higher that its use will increase rather than decrease," wrote Gallup Senior Scientist Dr. Frank Newport. "Those who have tried marijuana are particularly likely to say marijuana has positive effects, and the majority of Americans are not convinced that marijuana use is harmful either for its users or for society. In contrast, it should be noted, some authorities argue that marijuana is quite dangerous, particularly for young adults, and it is possible that attitudes toward its use could change if focus on the downsides of marijuana increases in the years ahead."
Legislative front: While Congress is looking to advance cannabis legislation at the federal level, there are still some strong headwinds to the measures being pitched on Capitol Hill. In July, the Cannabis Administration and Opportunity Act was introduced in the Senate to remove marijuana from the list of Schedule I controlled substances, but there are slim odds that the bill will pass. Back in April, the House also passed the Marijuana Opportunity Reinvestment and Expungement Act - which would erase prior marijuana convictions and conduct resentencing hearings - though the measure still needs approval in the Senate. (16 comments)
In an announcement likely to come later today, Snap (SNAP) will lay off about 20% of its workforce, according to The Verge. That would mean over 1,000 job cuts out of its more than 6,400 employees. Shares fell 6% in extended trading on the news, following an 80% slump this year as the company and rivals face a broad advertising slowdown.
Snapshot (no pun intended): The messaging app has faced serious headwinds in the current business environment, even telling shareholders that it wouldn't offer specific guidance for the current quarter. It comes after a two-year expansion driven by pandemic lockdowns, with users spending more time on social media platforms. Rising interest rates have recently weighed on the tech sector and many in the industry have turned to cost-cutting measures to combat a wider economic slowdown.
The macroeconomic conditions have prompted advertisers slash their budgets, while Apple's (AAPL) privacy changes have also made it harder to unleash successful targeted advertising campaigns. As part of the shakeup at Snap, executives Jeremi Gorman, chief business officer, and Peter Naylor, vice president of ad sales for the Americas, are jumping ship to Netflix (NFLX).
Mass layoffs: As it slashes 20% of its workforce, the deep cuts won't land evenly. The company is eliminating staff that work on developing mini-apps and games inside Snapchat, as well as social mapping unit Zenly - and its hardware division, which works on Snap Spectacles and the recently shelved Pixy drone. (37 comments)
G20 climate ministers are meeting in Indonesia at a time that some say is more important than ever, while others consider it more of a reality check. Developed and developing nations have been upping their use of fossil fuels over the past year, given an energy crisis that was only exacerbated by the war in Ukraine. Environment representatives are hoping to reverse that trend, with the G20 accounting for nearly 80% of the globe's economic output and greenhouse gas emissions, as well as two-thirds of the world's population.
Quote: "It is our responsibility to be part of the solution. We build bridges, not walls," Indonesia's Siti Nurbaya said before today's gathering, warning that a failure to work together would push the planet toward "unchartered territory," or to a point "where no future will be sustainable."
Team USA is being represented by John Kerry, who is serving in the newly created role of Special Presidential Envoy for Climate. He'll be pushing for "enhanced cooperation on the climate crisis and highlight the positive climate impact of the Inflation Reduction Act."
Go deeper: The media won't have any access to any of the closed-door meetings in Bali, but expect a joint communique later on Wednesday. Ministers will discuss ways to prevent a 1.5 degree Celsius rise in global temperatures in line with the Paris Agreement, with a specific focus on a sustainable recovery, resource mobilization, and land-based and ocean-based climate action. They'll all search for ways that developed countries can maintain their own climate commitments, as well as climate financing for developing nations. (5 comments)
It's not so easy to ditch your assets in Russia these days, especially if you're an energy company. That's because Vladimir Putin has signed a decree barring companies from "unfriendly countries" from shifting control of their operations or divesting stakes at least through the end of 2022. Moscow uses the term "unfriendly" to refer to nations that have adopted sanctions in response to its invasion of Ukraine.
Exxon's dilemma? The Western supermajor is trying to exit the country, specifically selling its 30% stake in the Sakhalin-1 venture in Russia's Far East. It had previously hoped to invest billions of dollars in the project, which wasn't covered by prior sanctions, but has since declared force majeure and reduced production from 220K to 10K barrels of oil and gas per day. Exxon (XOM) has also taken hefty writedowns, posting a $3.4B accounting charge related to its Russian exit in Q1.
However, with Putin's decree inhibiting its rights and impeding its ability to safely exit the project's operations, Exxon is taking its fight directly to the Kremlin. The company has threatened to sue the Kremlin, in a lawsuit that could move to international courts for arbitration and financial damages. While the step looks like a long shot, the key project is difficult to manage and is located in an inhospitable climate, meaning Exxon could have some leverage if it just throws away the keys.
Commentary: Exxon could benefit from Western sanctions on Russia, "as it now has a lifetime opportunity to increase its market share in various regions across the globe at Russia's expense," Bohdan Kucheriavyi writes in a newly published bullish analysis on Seeking Alpha. (48 comments)
Today's Markets
In Asia, Japan -0.4%. Hong Kong flat. China -0.8%. India closed.
In Europe, at midday, London -1.2%. Paris -0.8%. Frankfurt -0.5%.
Futures at 6:30, Dow flat. S&P +0.2%. Nasdaq +0.6%. Crude -3.3% to $88.66. Gold -0.8% to $1723.10. Bitcoin -0.6% to $20,294.
Ten-year Treasury Yield +3 bps to 3.14%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:00 Fed's Mester Speech
8:15 ADP Jobs Report
9:45 Chicago PMI
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
3:00 PM Farm Prices
6:00 PM Fed's Logan Speech
6:30 PM Fed's Bostic Speech
Companies reporting earnings today »
What else is happening...
Eurozone CPI hits another record at 9.1% as food and energy soar.
What to watch for in Bed Bath & Beyond's (BBBY) strategy update?
HP (HPQ) plummets after missing estimates, lowers earnings outlook.
U.S. home prices rise less than expected in June - Case-Shiller Index.
Recession odds now at 60%, UBS says; BofA turns to defensives.
Russia's Gazprom (OTCPK:OGZPY) posts record profit, will pay dividends.
Musk files amendments seeking delay of Twitter (TWTR) trial to November.
Royal Caribbean (RCL) plans to roll out Starlink on all cruises.
Trump's Truth Social (DWAC) barred from Google Play over moderation.
Key rate will need to be restrictive 'for some time' - NY Fed's Williams