Daily Brew // Morning Brew // Update

August 02, 2024

PRESENTED BY

Good morning. The swimmer making the biggest splash in the pool at the Paris Olympics is Canada’s Summer McIntosh, who yesterday set the Olympic record for the women's 200m butterfly, winning her second gold medal and third overall. She was also born in 2006. She’s 17 years old.

Here’s what we accomplished by 17:

Neal: placed 9th in the Massachusetts state geography bee
Matty: learned how to French braid
Adam: got kicked out of radio club for laughing on the air
Cassandra: competed in the World Irish Dance Championships
Molly: got rejected from Northwestern
Dave: got accepted to Rutgers

—Molly Liebergall, Cassandra Cassidy, Matty Merritt, Adam Epstein, Neal Freyman

MARKETS

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ECONOMY

Today’s jobs report is a big ’un

Anna Kim

Fresh employment numbers coming out this morning are expected to provide economists with more receipts in the debate they’ve been having for weeks: Is it time to cut interest rates before the cooling economy cools too much and triggers a recession?

In case you’ve been plugging your ears: The American economy is actually…doing well, for now. That may feel wrong against a backdrop of stagnating wage growth and rising costs of living (though grocery inflation is finally settling), but the numbers don’t lie:

The Federal Reserve’s historic interest rate hikes have reined in inflation from over 9% in 2022 to 2.5%, according to The New York Times—just above Jerome Powell’s 2% target threshold for rate cuts.
Today’s Labor Department report is expected to show that the US is still adding jobs, marking the 43rd straight month of workforce gains.
The employment growth rate is also projected to continue slowing, which is a good thing: A market with more job openings than applicants fuels inflation because companies are pressured to stay competitive by offering higher wages.

All eyes on joblessness. Here’s where everyone is considering thinking about possibly starting to panic, maybe: Unemployment surpassed 4% in June for the first time since November 2021, reflecting a cooling job market in which the ratio of openings per unemployed person has fallen to 1.2 from a peak of nearly 2-to-1 in 2022. While moderating the job market gets a thumbs up, leaving a thumb on the scale for too long could freeze workers out of employment and send the economy spiraling.

In brief…today’s jobs report will likely show that the labor market is softening but not crashing, which tells the Federal Reserve that the current 5.25–5.5% interest rate has done its job. Wall Street would be shocked if JPow—who’s spoken positively about the economy’s progress in recent weeks—didn’t issue the first of many rate cuts at the Fed’s next meeting in September.—ML

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WORLD

Tour de headlines

Wall Street Journal Reporter Evan Gershkovich, Radio Free Europe journalist Alsu Kurmasheva, and former U.S. Marine Paul Whelan pose with an American flag

Handout/Getty Images

Evan Gershkovich was freed in a historic prisoner swap. The Wall Street Journal reporter, who was wrongfully detained in Russia last year on bogus espionage charges, was released by the country yesterday as part of what the WSJ called “the largest and most complex East-West prisoner swap since the Cold War.” The release of Gershkovich and more than a dozen others held by Russia, including former US Marine Paul Whelan, came after months of negotiations between the US, Russia, and multiple other countries. The deal hinged on the release of convicted Russian assassin Vadim Krasikov, who murdered a Chechen dissident in Berlin in 2019. President Biden called the exchange “a feat of diplomacy” and promised to continue working to secure the release of Americans held hostage around the world. National Security Advisor Jake Sullivan said anti-Putin activist Alexei Navalny was supposed to be part of the swap before his sudden death in a Russian prison in February.

Don Lemon is suing Elon Musk and X over their scrapped partnership. In a lawsuit filed in San Francisco court, the former CNN anchor accused Musk of luring him “through false promises” to invest in creating a talk show for the social media platform before abruptly canceling the deal and refusing to pay the $1.5 million Lemon believes he was owed. The content partnership fell apart when Musk grew angry after Lemon asked him about the rise in hate speech on X and his use of the drug ketamine in a March interview.

New iPads helped Apple beat revenue estimates. In a bright spot for Big Tech in an otherwise yucky day, Apple reported a sales surge of 5% to $85.8 billion in the last quarter, in part due to its new line of iPads making up for sluggish results in China. Amazon also reported earnings, missing on revenue expectations amid increased competition from Temu and Shein. Both Apple and Amazon continue to spend heavily on artificial intelligence to catch up to rivals.

FINANCE

Bill Ackman lost a huge bet on...himself

Sylvain Gaboury/Getty Images

You can get rich and then become Twitter famous…but it’s hard to use your Twitter fame to get richer. That’s what billionaire hedge fund manager Bill Ackman learned this week as he called off his highly anticipated IPO, which had been highly anticipated by him only, due to a lack of investor enthusiasm.

How it went down: Ackman wanted to bring his hedge fund Pershing Square to the NYSE, giving regular investors a way to access the fund’s riches and thereby cementing himself as a Warren Buffett-esque figure.

In a regulatory filing, Ackman said investor interest would come from his “brand-name profile” and “broad retail following,” presumably referencing his 1.3 million followers on X—a number that’s grown in recent months as he’s been more vocal about politics, including his recent endorsement of former President Trump.
The IPO originally targeted a $25 billion price before Ackman lowered it to $4 billion and then again to $2 billion, before dropping it altogether.

Why’d it crash and burn? Memes will only take you so far. Investors believed the fund would trade at a discount after going public, giving them no reason to invest early.

Watch this space. Ackman said he would reconsider the IPO’s structure and “report back once we are ready to launch a revised transaction.”—CC

TOGETHER WITH MASSMUTUAL

Money, sports, and equity ♀️. With women’s sports booming in popularity, the financial challenges women face—earning less, needing more for retirement—are brought into focus. MassMutual understands how these realities impact the way women need to manage their finances. Check out their article to learn how women’s sports and finances converge.

SPORTS

Brands infiltrate the last ad-free Olympic spaces

Olympic skateboarders taking selfie with Samsung phone on podium in Paris.

Kirill Kudryavtsev/Getty Images

If the Olympics feel a little more claustrophobic this year, it’s probably from all the brands shoving their way into the spotlight. While the event has always had some light branding, it’s historically been kept outside the actual rings/arenas/fields—but Paris has ramped up product placement as the Games are leaning more on private donors instead of taxpayers for funding.

The brand most prominently on display is luxury conglomerate LVMH, which paid roughly $163 million to be a premium sponsor of the Paris Games.

The opening ceremony, which garnered nearly 29 million viewers, doubled as an ad for the brand. It featured Louis Vuitton trunks being tossed around and performers decked out in custom Dior.
Winning athletes are being presented with medals on Louis Vuitton trays.

Samsung is also getting in on the medal ceremony with sponsored selfies. Athletes aren’t normally allowed their own phones on the podium, but they are given a Galaxy Z Flip6 Olympic Edition smartphone to take an official victory selfie with their fellow competitors.

Beyond brand awareness: An official selfie might sound corny, but it’s already forced a memorable moment for international relations. North and South Korean athletes snapped a podium photo together after mixed double table tennis finals.—MM

To read more about how companies are attracting Olympic viewers, check out Marketing Brew’s coverage.

STAT

Prime number: Big money for medals

Anadolu/Getty Images

With her gold medal in the women’s all-around yesterday, US gymnast Simone Biles is set to earn $38,000. But if she were from Kazakhstan, she’d get $250,000 and an apartment. Per CNBC, several countries reward their Olympic medalists with bonuses, sometimes in the form of gifts like cars, free food, and in the case of Indonesia, a cow. For South Korean men, it’s literally 18 months of their lives—medalists from the country are exempt from mandatory military service. Hong Kong offers the biggest payouts at $768,000 for gold and $192,000 for bronze. Australia’s, meanwhile, are piddling in comparison: Aussie Olympians receive $13,000 for gold and $7,000 for bronze. And they don’t even get a cow.

QUIZ

Blink and you’ll quiz it

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to coming to terms with the fact that you aren’t cut out to be an Olympian.

It’s that satisfying. Ace the quiz.

NEWS

What else is brewing

Intel announced it’s cutting 15,000 jobs, or 15% of its workforce, as it falls behind in chip manufacturing.
Uber partnered with Chinese EV maker BYD to adopt 100,000 vehicles for its ride-hailing platforms in Europe and Latin America.

☕️ Buffett-esque