Flight delays

MARKETS

  • Trade: Notice something different in the air on Sunday? The Trump administration’s latest round of tariffs on Chinese goods took effect.
  • In China: Manufacturing activity rebounded to a five-month high. A spoonful of government stimulus does help the trade war go down.
  • In the U.S.: After taking Labor Day off, markets are back in action and ready to follow up the roller coaster that was August trading.

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ENTERTAINMENT

It Wasn’t a Hot Movie Summer

Picture
If you thought about going to the movies over the weekend, you might’ve noticed a lean lineup (no offense to Gerard Butler or Angel Has Fallen, which led the North American box office with a worse-than-expected $14.8 million in sales).

That’s because Labor Day has become Hollywood’s “movie graveyard,” a weekend to dump just-okay films and mourn the end of summer, per The Week. But this Labor Day capped off an especially brutal summer at the box office. Relative to 2018...

  • Ticket sales are down 6.4% year-to-date in North America.
  • Box office revenue from the first weekend in May to Labor Day (a stretch that can account for up to 40% of annual ticket sales) dipped 2% to $4.3 billion.

So what’s going on?

The big picture: There are better, cheaper options. Anyone who’s been on a second date knows average ticket prices jumped to $9.11 last year (and that’s about half the standard ticket cost in NYC or LA).

  • Plus, subscription plans like MoviePass (RIP) gave consumers a taste of steeply discounted theater prices.

And streaming giants have snatched up talent at a premium...while putting a smaller dent in cinephiles’ wallets. Two movie tickets = Netflix and Disney+ for a month. Add in two small popcorns and a drink and you’re nearing a down payment.

The even bigger picture: It’s the economy. Lower out-of-home entertainment spending on experiences such as movie theaters could point to broader economic fragility, Moody’s told the NYT. A slip in recreational spending “reflects greater caution by consumers.”

  • FYI: Attendance at national parks, baseball games, Broadway shows, and Disney theme parks is also down.

Looking ahead...the next few months could make up for a slow summer. Some big hits on the schedule, including the latest Star Wars installment, Frozen 2, Joker, and It: Chapter 2, might be the holiday miracle studios need.

JOBS

How Hot Is Too Hot for the Jobs Market?

With “Unemployment at Generation Low” headlines becoming a Friday jobs report tradition, the public sector has struggled to attract new talent in an ultra tight labor market.

Run the numbers: For every new hire in the public sector in June, there were two more job openings, the NYT reports. That’s up from 1.7 a year earlier and trounces the 1.2 ratio of job openings to new hires in the private sector.

It’s the perfect storm of factors:

  1. After the recession put loads of retirement plans on ice, the decade-long economic expansion has thawed them out—and thinned out workforces.
  2. It’s hard to beat private-sector startups’ cold brew on tap, but it’s harder to beat their salaries. Only 56% of state and local agencies think they pay competitively.
  3. And it doesn’t help that most state governments have balanced-budget requirements, meaning they can’t spend more than they make.

Zoom out: This shortage of talent means the public sector (home to both schools and police departments) is often bringing in subpar fits for superdays or running short-staffed.

AVIATION

Checking in on Boeing’s Holiday Countdown

Government and pilot union officials say the drama between Boeing and air safety regulators over the return of the 737 Max isn’t breaking for upcoming winter holidays, according to the WSJ.

Regulators are reportedly fed up with Boeing’s lack of technical details and failure to answer questions about 737 Max modifications...almost six months after the plane was grounded globally following two crashes that killed 346.

Now...Boeing has to resubmit documents explaining proposed modifications to its software, and changes have to be vetted by the FAA and reexamined by global regulators. That could “significantly reduce” the likelihood of the 737 returning to skies by the holidays. For context, around 46 million people traveled by air last holiday season.

Big picture: While there were only 72 Max jets in U.S. carriers’ fleets pre-grounding, that share was supposed to double this year, magnifying the model’s absence in holiday flight schedules.

And even after it’s airborne again, the plane could be the fruitcake of holiday travel. UBS found 70% of travelers would hesitate to book a flight on the 737 Max.

TECH

Turning You Into Leo in 3, 2, 1...

Today in viral news out of China: a face-swapping app called Zao that spiked to the top of the Chinese App Store over the weekend.

How it works: Users upload photos of themselves and select a movie or TV scene. Zao then uses artificial intelligence (AI) to generate a video of that user’s likeness atop Jon Snow’s or Jack Dawson’s body within seconds.

  • App Annie said Zao was the most-downloaded free app in China’s iOS App Store over the weekend—before it was flooded with negative reviews thanks to...

Privacy concerns (bet you saw that coming). In an earlier version of its user agreement, Zao claimed “free, irrevocable, permanent, transferable, and relicense-able” rights to user-generated content. Zao soon backtracked, saying it...

  • Won’t use pictures or data users delete from the app.
  • Won’t use photos or videos for anything other than app improvements without user consent.

New app, same story. Remember FaceApp? The AI-based photo-editing tool recently came under fire for similar privacy concerns, though its creators assured users their data was not leaving the app’s cloud.

CALENDAR

The (Shortened) Week Ahead

What’s worse than hearing “Happy Monday!” 47 times between 9:00am and 9:12am on a Monday? Hearing “How was your long weekend?” 48 times between 9:00am and 9:12am on a Tuesday.

Tuesday: Not Monday even though it feels like it; ISM manufacturing index; construction spending; 90th anniversary of the Dow's peak of 381.17 before the crash of 1929

Wednesday: Fed beige book; foreign trade deficit; motor vehicle sales; earnings (American Eagle, Slack)

Thursday: Factory orders; ISM nonmanufacturing index; earnings (Zoom Video Communications, Lululemon, PagerDuty, DocuSign, CrowdStrike); pro football is back with Packers vs. Bears; NYC kids head back to school

Friday: August jobs report; Read a Book Day (might we suggest one of the beige variety?); Fed Chair Jerome Powell to speak in Zurich

WHAT ELSE IS BREWING

  • Hong Kong protests continued this week with a general strike, a school boycott, and another attempted blockade of the city’s airport.
  • Saudi Aramco is getting a new chairman as it beefs up the c-suite roster amid public offering preparations.
  • 34 carmakers (including Tesla, Daimler, Toyota, and more) were granted exemptions on Chinese taxes.
  • Apple Watch is reportedly getting a new sleep-tracking feature called "Time in Bed tracking."
  • Tesla said its Model 3 interior is now completely leather-free, including the steering wheel.

BREAKROOM

Choose the Bigger Number: Box Office Edition

  1. Opening weekend ticket sales: Avengers: Endgame vs. The Lion King (2019 version).
  2. Number of U.S. drive-in movie theaters: In 2018 vs. in 2017.
  3. Regal Cinemas ticket prices, daytime: Child's ticket vs. senior citizen's ticket.
  4. Total number of tickets sold annually: 2010 vs. 2018.

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Breakroom Answers


Choose the Bigger Number: Box Office Edition
1. Avengers: Endgame did $357 million to The Lion King's $192 million.
2. In 2017, there were 595 drive-ins. In 2018, there were 524.
3. Senior citizens pay $7.50 to kids' $6.50.
4. 2010 takes the cake with 1,328,549,023 tickets. 2018 saw 1,312,869,715 total.

 

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