Good morning.

I said, “maybe, you’re gonna be the one that grifts me…”

Last month, the most famous dysfunctional brothers of the ‘90s (barring Frasier and Niles Crane) announced a comeback. Oasis is set to play a series of gigs for the first time in 16 years next summer, and last weekend tickets went on sale. Unfortunately, some fans found that after waiting for hours in digital queues ticket prices had rocketed up 159%, from £135 ($177) to £350 ($460). The national sticker-shock was so severe that the UK government has now promised to review “dynamic pricing.” So long as they don’t look back in anger, everything should be fine.

Media & Entertainment

Summer Box Office Shows Hollywood Settling into a New Normal

Yesterday was Labor Day, which means Hollywood’s all-important summer blockbuster season is officially over. But don’t roll the credits just yet.

After a dismal start to the summer, the movie business roared back to life with a steady stream of hits. As we roll into autumn, the industry might finally have reason to be optimistic again — if it can recalibrate its expectations, at least.

Mayday, May Day

No strikes. No pandemic. 2024 may have delivered the most “normal” summer Hollywood has seen since the relative glory days of 2019. Unfortunately, nobody told audiences — at least not in May, the unofficial start of the season. For the first time in roughly 15 years, Disney’s Marvel Studios abandoned the first weekend of the month, leaving Universal to swoop in with “The Fall Guy,” a Ryan Gosling-led reboot of the 1980s TV series. It fizzled in its opening weekend, sparking something of an industrywide panic, especially as the month rolled on and new installments in the “Mad Max” and “Planet of the Apes” franchises underperformed compared to previous entries. The month culminated with the worst Memorial Day weekend box office performance in nearly 30 years.

But then June rolled around. Sony scored a $400 million global hit with “Bad Boys: Ride or Die,” which Shawn Robbins, industry analyst at Box Office Theory, told The Daily Upside created “momentum to moviegoing.” For the next two months, nearly every week delivered a new hit, including Paramount’s “A Quiet Place: Day One,” Universal’s “Twisters,” horror-thriller “Longlegs,” which crossed $100 million globally to become the biggest hit ever for ascendant indie studio Neon, and two billion-dollar grossers from Disney: “Inside Out 2” and “Deadpool & Wolverine.” (It’s redemption for the company that whiffed on last year’s “Barbenheimer” craze.) Suddenly, the box office kinda sorta found a new stride:

Overall, the domestic box office haul this summer came in at around $3.6 billion, per Comscore, off from last year’s $4.09 billion but mostly considered encouraging after the dismal May. Most encouraging: 2024’s hits had legs (long ones, even), taking in an impressive amount of business after their opening weekends, per a recent Deadline analysis.
The rub? While Americans are back to moviegoing, it’s increasingly hit-or-miss for Hollywood overseas. Especially in China, where just one Hollywood film crossed $100 million this summer (Disney/Fox’s “Alien: Romulus”) — a threshold that Hollywood routinely passed in pre-COVID times, when Beijing censors were far more lenient with American imports.

Heat Check: One major factor possibly underlying the strong summer, Robbins told The Daily Upside: heat waves. What may be one of the hottest summers on record “pushed people indoors toward more air-conditioned entertainment,” Robbins said. It’s at least one silver lining for the silver screen.

Written by Brian Boyle

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Finance

Warfare is ESG Now

The “G” in ESG increasingly stands for guns.

The Financial Times and CNBC both published reports on Monday spelling out how defense stocks are taking up a growing slice of the ESG (environmental, social, governance) pie. Both reports attribute this warlike shift in the meaning of ESG to the war in Ukraine, saying that fund managers see it as an ethical justification for folding defense companies into their portfolios.

Spoils of War

According to data provided to the FT by analytics firm Morningstar Direct, the amount of money European ESG funds have invested in defense stocks has risen from €3.2 billion ($3.5 billion) in Q1 2022 to €7.7 billion ($8.5 billion) today. The FT said that part of that rise is due to the soaring values of the shares themselves, but that doesn’t account for the total increase — funds are buying into defense companies more than they used to.

There hasn’t been a wholesale change in attitude to defense stocks. According to the FT’s data, around one-third of UK and EU ESG funds have investments in defense companies, so they are technically in the minority. But defense companies are still reaping the financial benefits of increased significance and investment:

The share price for Rheinmetall, a German arms manufacturer, is up around 400% since the end of February 2022, when Russia invaded Ukraine. Swedish defense company Saab is up 286%, and Britain’s BAE Systems is up 105% (it made record profits last year).
Saab’s CEO told CNBC in an interview last month that the company has seen an influx in the number of shareholders since the war began, from around 50,000 to more than 175,000.

Hot Commodities: Defense stocks aren’t the only surprising entrants into the ESG space of late. A study by Goldman Sachs analysts, reported by Bloomberg last week, found an increasing number of ESG portfolios include commodities such as oil, gas, and mining stocks.

Written by Isobel Asher Hamilton

Consumer

Back-to-School Spending Is Flat or Falling, Depending on Whom You Ask

What beats the joy of sending a little one off to school for the first time? Inflation.

Early data this year suggests back-to-school season spending is either flat from last year, or took a slight dip. Kids, don’t blame mom and dad for the bloated post-pandemic price tag on your calculator.

Return to Spender

As a major component of GDP — 67.7 % in June, in fact — consumer spending is one of the key levers Federal Reserve policymakers are watching as they prepare to (fingers crossed) finally cut interest rates when they meet on Sept. 18. That makes this year’s back-to-school spending particularly notable, with policymaking implications well beyond your eldest’s Intro to American History class.

Two major estimates of this year’s spend vary considerably, but both mercifully add to the case that the circumstances for a rate cut — that is, weakening economic data — are in place:

Analysts at Deloitte, after surveying around 1,200 parents, forecasted that back-to-school spending for K-12 students would be flat at $31.3 billion this year. Notably, parents planned to cut spending on pricier technology products by 11% and keep spending flat on clothing and school supplies, but spend 22% more on other items, like personal hygiene and educational furniture.
The National Retail Federation, meanwhile, estimates that spending will drop to $38.8 billion this year from $41.5 billion last year (go figure that the retail association calculates more economic activity). That would still be the second-highest spend on record. The NRF also flagged a potential dip in electronics spending, noting that last year 69% of parents planned to buy a laptop, tablet, or other electronic device for a child, “typically items students can use for several years.”

One for You, One For Me: While 85% of parents told Deloitte they could be compelled to splurge on a must-have item for their child, half said they intended to purchase something for themselves.

Written by Sean Craig

Extra Upside

What can’t they do? Weight-loss drugs like Wegovy could lower the risk of COVID-19 death, study finds.
Reverse Gear: Volkswagen is considering closing German manufacturing plants for the first time in its 87-year history.
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