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⚽ Team USA vs. the world.

The top-ranked Americans begin their World Cup three-peat attempt tonight against Vietnam. They bring loads of talent and high expectations.

Interest in women’s soccer, particularly the U.S. Women’s National Team (USWNT), has soared over the past decade thanks to Alex Morgan and Co. 🇺🇸

We’ll watch as we bide time before next week’s busy earnings schedule, including Alphabet, Microsoft, Coca-Cola, Meta, Chipotle, and more.

— Matthew, Weronika & Shawn

Here’s the rundown:

Today, we’ll discuss the three biggest stories in markets:

• Barbenheimer movie mania kicks off
• Why Threads user engagement keeps falling
• What Russia’s grain deal actions mean

All this, and more, in just 5 minutes to read.

IN THE NEWS

🍿 “Barbenheimer” Movie Mania Kicks Off (FT)

Somehow we’ve managed to go these last two weeks without discussing “Barbenheimer” — the internet meme phenomenon of 2023, derived from the simultaneous blockbuster movie releases of Barbie and Oppenheimer this weekend.

• Part of the appeal is the juxtaposition of the movies’ star-studded casts with plotlines that couldn’t be more different.

After weeks (months?) of hype leading up to the event, things kicked off last night.

• Oppenheimer chronicles the dawn of the nuclear age and the development of the first atomic bomb. It’s expected to generate around $50 million in sales this weekend.

For Barbie: Expected opening weekend sales are closer to $100 million. Bloomberg called the movie “excellent and surprisingly cerebral.”

For AMC, the company with the largest share of the U.S. movie theater industry, nothing has been the same since the pandemic. Its quarterly revenue peaked at $1.5 billion in the summer of 2019. Sales are about a third lower today.

• But Barbenheimer, and the slate of big movie releases this summer, has helped revive AMC’s and other theater chains’ prospects.
• Second only to Gamestop in internet meme stock fame, AMC has amassed its own cult following of amateur traders who have boosted its stock, which the company relied on to bolster its finances with stock sales during the pandemic.

Why it matters:

Ultimately, the (partial) return to movie theaters reflects a normalization of the post-pandemic world. Services (such as watching movies in theaters) are playing an increasingly larger role in the economy, compared with the pandemic-era surge in spending on goods, as many opted to shop on Amazon when travel was restricted.

• Hundreds of thousands of film-goers are expected to do a nearly five-hour doubleheader, watching both films on the same day or weekend.

Still, movie theater audiences are structurally smaller. Theaters are responding by leaning into big-ticket concessions like cocktails. One cinema chain is selling a bourbon cocktail tied to Oppenheimer and a Barbie-themed tequila drink called Think Pink.

• Cocktails and other “premium” concessions like merch or popcorn boxes with Barbie doll packaging, for example, reflect theaters’ efforts to make more money from existing customers since they can’t rely on the same sales volumes as before the pandemic.
• One movie theater executive commented, “It’s no secret that theaters generate most of their profit from the selling of concessions. So the more innovative concession items you can sell to guests, the more profitable the theater business.”

📲 Threads User Engagement Continues to Drop (WSJ)

After Meta’s promising kick-off of the Threadsapp, data shows user engagement has dropped 70% as executives focus on reviving the app’s momentum.

Time to reevaluate? Meta is reviewing its strategy and focusing on developing new features to address the challenge.

• Daily active users have dropped for two consecutive weeks (a long time for the young platform), reaching 13 million.
• User engagement on iOS and Android apps has taken a hit, with the average time spent decreasing from 19 minutes to just four minutes. Specifically, Android users in the U.S. saw a drop from 21 minutes on launch day to five minutes on average.
• Twitter’s daily active users are holding steady at approximately 200 million, spending an average of 30 minutes daily on the platform.

But Meta executives aren’t alarmed by the significant decline. Reportedly, they anticipated a decrease in user engagement after the app’s initial surge, which saw over 100 million sign-ups within a week of its launch.

In the meantime, they’re focused on enhancing the experience before pursuing monetizationefforts.

• “It’s clear by the drop-off that people are seeing they can’t do as much, and there are certain things that they want to be able to do that perhaps they can do on other apps,” shared one social media and digital strategy expert.

Why it matters:

Launching a new product is like exploring an unknown world, regardless of the research and preparation in advance. But Zuck and the rest of Meta’s team know that reality well, and they’re as good as anyone at failing quickly and adapting.

On that point: Threads has more time to succeed than other new social media platforms. Being bankrolled by one of the world’s most profitable tech giants is a tremendous advantage.

• “Meta definitely has the patience, they have the money, and they have the engineering talent,” commented one analyst.

Though it’s early for the app, Threads has taken strides to differentiate from Twitter. It positions itself as a platform with a distinct ethos, steering clear of politics and hard news.

• Can Threads carve out its own success? Your guess is as good as ours. Hit reply to this email to tell us your thoughts about Threads.

🌾 Russia Weaponizes Wheat: What It Means (Bloomberg)

Wheat, the world’s most critical staple, is being weaponized.

Russia’s Vladimir Putin is imposing an embargo on Ukrainian grain exports that could cost the nation as much as $800 million a month. And this week, Russia is attacking Ukraine’s ports, damaging key piers and terminals. The damage at one grain storage and handling facility could take a year to fix.

• A Russian attack Wednesday destroyed 60,000 tons of grain waiting to be loaded onto ships. That’s enough to feed more than 270,000 people for a year, per the World Food Program.

• For the rest of the world, wheat prices could keep rising as a result. The price of wheat futures in Chicago, the global benchmark, have risen 11% since July 17, when Russia said it would not renew a year-old deal allowing ships carrying Ukrainian food exports to cross the Black Sea.

Background: Wheat is an important source of carbohydrates in most countries. It’s one of the oldest crops used by humans, and it’s used in all sorts of food, from cereal and bread to crackers, pasta, and even alcohol.

Flashback: In 1980, President Jimmy Carter imposed a wheat embargo on U.S. rival, the Soviet Union, in response to the invasion of Afghanistan.

Ukraine has limited options, but the country can transport grain via road and rail into neighboring countries such as Poland and Romania.

Why it matters:

Here’s the problem: The road and rail routes are considerably more expensive. As a result, Ukrainian grain, among the cheapest worldwide, would become less competitive. To keep prices down, the amount paid to Ukrainian farmers would have to be lowered, a negative for future agriculture investment.

• “This Black Sea deal was a lifeline for the Ukrainian farmers,” noted the World Food Program’s chief economist.

Why? The Kremlin wants commodity prices such as grain and oil to go higher, noted an agricultural trading house CEO.

• “It’s a message from Putin to the West, he is not playing now. We will see at least two to three weeks of very high tension.”

Russia’s latest moves have driven more volatility in worldwide grain markets after a period of relative stability. Grain prices rocketed to record highs after Russia invaded Ukraine in February 2022, then returned to prewar levels recently.

• Poland’s prime minister, Mateusz Morawiecki, told reporters: “The war in Ukraine has had increasingly serious repercussions on the agricultural market.”

See you next time!

That’s it for today onWe Study Markets!

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