☕ Truce

UPS avoids a disastrous strike... July 26, 2023 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( TOGETHER WITH [Apollo Global Management]( Good morning. Here’s a question we never thought to ask: Can it be too hot for ice cream? The CFO of Unilever, the world’s largest ice cream producer, said yesterday that Europe’s heat wave might dampen demand for the frozen treat because “When it gets too hot, people move away from ice cream and buy a cold drink instead.” This guy clearly forgot that America solved this problem with the root beer float. —Matty Merritt, Sam Klebanov, Cassandra Cassidy, Neal Freyman [CLICK]( THIS TO REMAIN A SUBSCRIBER Clicking on newsletter links is the only way for us to know you are reading (and enjoying) Morning Brew. If you don't click by next month, you will stop receiving this newsletter. [Click here]( to let us know that you’re still an active subscriber. Thanks! MARKETS Nasdaq 14,144.56 +0.61% S&P 4,567.46 +0.28% Dow 35,438.07 +0.08% 10-Year 3.892% +2.2 bps Bitcoin $29,224.92 +0.36% Spotify $140.38 -14.26% *Stock data as of market close, cryptocurrency data as of 1:00am ET. [Here's what these numbers mean.]( - Markets: The Dow is on a [run for the ages]( extending its winning streak to 12 days as more earnings reports roll in. Speaking of earnings, Spotify dropped a dud, revealing widening losses due to its failed podcasting investments and projecting lower revenue than analysts predicted. And its stock plunge came despite adding a record number of new subscribers. - Economy: All eyes are on the Fed today: With another rate hike pretty much a lock, investors will be glued to Jerome Powell’s comments to see whether the Fed is considering any more increases.  TECH [There’s AI-lot riding on tech earnings]( [Google and Microsoft logo in front of binary code.]( Francis Scialabba Big Tech stocks have been surging this year as investors scramble to get in on the ground floor of what could be the next technological revolution: generative AI. Yesterday, it was time to face the music. Two AI heavyweights, Microsoft and Google-parent Alphabet, dropped their first earnings reports since sinking tens of billions into AI projects—the first test of whether their investments in the technology measure up to the hype. The verdict? Keep calm and carry on - Alphabet, which declared a “code red” for Google Search late last year as rivals like ChatGPT and Microsoft’s AI-equipped Bing came on the scene, is [chugging right along](. Google’s search advertising sales grew to a better-than-expected $42.6 billion, showing that most people haven’t made ChatGPT their default search engine. - Microsoft beat expectations on its top- and bottom lines and told investors that it had spent, and would continue spending, [gobs of money]( to build out AI infrastructure. Big picture: Microsoft’s and Google’s reports show that investors will continue to give tech companies a long leash to invest in AI even as some analysts [question]( whether the AI-fueled stock boom is a bubble waiting to burst. - After Microsoft announced earlier this month that it would charge an extra $30 per month for Office 365 with AI tools, shares rose to a record high. - Before Alphabet reported earnings yesterday, its stock had risen 47% for the year, compared to the S&P’s 19% gain. In after-hours trading, shares climbed another 6%. And then there’s Snap. You may not associate Snapchat with AI, but the social media platform rolled out an AI chatbot, My AI, and boasted that 150+ million users have sent over 10 billion messages to it. That was the only exciting news from yesterday’s report. Still fighting against the likes of TikTok for ad spending in a sluggish market, Snap’s sales dropped for the second straight quarter, causing shares to plummet 19% after-hours. Looking ahead…this is the start of a busy period of afternoon conference calls for tech giants. Meta reports earnings today, and Amazon and Apple report next week. Expect artificial intelligence to be mentioned so many times it’s going to lose all meaning. In S&P 500 earnings calls last quarter, AI was mentioned over 1,000 times, and Alphabet, Microsoft, and Meta together said the abbreviation at least [200 times](. That led to a ban on earnings season drinking games in our office.—MM, NF   TOGETHER WITH APOLLO GLOBAL MANAGEMENT [Sustainability in stride]( [Apollo Global Management]( There’s lots of talk about sustainability these days. But when it comes to walking the walk, Apollo Global Management has already begun its journey. Through its [Sustainable Investing Platform]( Apollo-managed funds are investing in and lending to companies in key sectors driving the transition to clean energy. Check out these milestones from Apollo’s Annual Sustainability Report: - Apollo-managed funds deployed [$6b in clean energy and climate investments in 2022](. - Apollo spent 10+ years developing a rigorous ESG monitoring, management, and reporting program. - Apollo’s goal is to deploy $50b in clean energy and climate investments by 2027. As Apollo works to drive risk-adjusted returns for investors, it’s continuing to lead responsibly and drive a more sustainable future. [Learn more](. WORLD [Tour de headlines](#) [A Sikorsky firefighting helicopter drops water on a wildfire near Agioi Theodori, some 70 kms west of Athens on July 18, 2023]Valerie Gache/AFP via Getty Images Ongoing heat waves are “virtually impossible” without climate change. A group of scientists that conducts rapid analyses of weather events found this summer’s heat waves in the US, Mexico, and Europe would have [virtually zero chance of happening]( without human-caused warming. They also found that a heat wave baking China was 50x more likely due to global warming. Meanwhile, the waters off the South Florida coast are as [hot as a hot tub](. A buoy in Manatee Bay recorded ocean temps of 101.1 degrees Fahrenheit. Economic indicators are looking up. Yesterday delivered two pieces of hopeful economic news: US consumer confidence increased to its [highest level in two years]( this month, while the International Monetary Fund (IMF) [raised its forecast]( for the global economy in 2023 to a healthy 3%. Both measures add to the upbeat summer vibes after numerous warnings of a recession due to turmoil in banking, gnarly inflation, and the fallout from Russia’s invasion of Ukraine. Still, the IMF’s chief economist [said]( “It is too early to celebrate.” Bronny James is stable after going into cardiac arrest. The 18-year-old son of LeBron James suffered cardiac arrest [during practice]( at the University of Southern California on Monday. He is [now stable]( and out of the ICU, according to a statement from the family’s spokesperson. Bronny, the sixth-ranked point guard in his class, was expected to make his debut for the Trojans during an exhibition tour in Greece and Croatia next month. LABOR [UPS strike likely averted with 11th-hour deal]( [UPS truck]( Robert Alexander/Getty Images UPS and the Teamsters union representing 340,000 of its workers [shook]( on a tentative agreement yesterday that would avert a disastrous strike. Unionized UPSniks planned to walk out next Tuesday, after their current contract with the world’s largest package delivery service expires. A 10-day work stoppage could’ve drained ~$7 billion from the US economy, per Anderson Economic Group. But the two sides resolved their differences over wages for part-time workers, the main hang-up in negotiations. If union members ratify what the Teamsters called “the best contract in the history of UPS,” they’ll score some substantial wins… - All current workers will get a pay bump of $2.75 an hour this year and more raises in the future, while existing part-timers will start receiving a minimum hourly pay of $21 (the union says some employees currently make $15.50 an hour). - Drivers will be guaranteed AC in most of their [notoriously sultry]( vehicles purchased after this year, and they’ll no longer be mandated to work overtime on their days off. In return, UPS avoids labor action that could’ve crushed business: A 15-day strike in 1997 cost it $850 million. Zoom out: Transportation workers have been in standoff mode lately. United pilots recently were offered a gradual [pay raise of up to 40%]( after threatening to strike.—SK   FROM THE CREW [The Crew]( Did you know the retail subscriptions market is expected to hit $1.5t by 2025? If your brand is considering this model, read up on the [keys to success]( utilizing customer feedback to enhance your service and allowing customers to cancel with ease. [Check it out](. SHIPPING [Daring mission begins to prevent oil disaster]( [FSO Safer off the coast of Yemen]( Mohammed Huwais/AFP via Getty Images Yesterday, a dramatic rescue operation years in the making [began]( to prevent an oil spill four times the size of the Exxon Valdez disaster in 1989. What’s going on? The FSO Safer, a decaying cargo ship carrying 1.1 million barrels of oil, is sitting in the Red Sea off the Yemen coast. It’s a ticking time bomb: Due to civil war in Yemen, the crumbling ship hasn’t received maintenance for eight years, and if it falls apart or explodes, the leaked oil would disrupt a heavily trafficked shipping route, contaminate desalination plants used for drinking water, and destroy marine ecosystems. Recovering from a spill would cost $20 billion, the UN estimated—and it would never fully be cleaned up. What’s the plan, Stan? Get all of the oil off the Safer without the ship leaking or exploding. The UN bought a $55 million tanker that it’s pulled up next to the Safer and yesterday began transferring the oil. It’s a highly complex and delicate mission. The UN-led team has even formed a water-balloon shield around its own ship to avoid a disastrous boat-on-boat collision. If you had to distill the complexity of this project into a single number, it’s that 13 insurers have been syndicated to backstop the operation. Looking ahead…if all goes according to plan, the UN will soon be in possession of $75 million worth of oil from the Safer. It’ll try to sell the crude and put the proceeds back into the Yemeni economy.—NF   GRAB BAG [Key performance indicators](#) [Sorority girls opening a door to reveal more sorority girls]Alex Bedder via Giphy Stat: Would you be willing to spend [$4,000 on a sorority recruitment coach]( That’s what Stacia Damron, owner of sorority consultancy Hiking in High Heels, charges for on-call advising service during sorority rush, according to the WSJ. She’s not alone in finding a business opportunity in this growing industry: Aspiring sisters shell out anywhere between $150 for a video chat to $3,500 for on-the-clock mentorship leading up to and throughout the highly competitive recruitment process. Quote: “There’s a 100% chance that Twitter is going to get sued over this by somebody.” And that’s because there are nearly 900 active US [trademarks]( for the letter X—Twitter’s new name—trademark attorney Josh Gerben told Reuters. It’s unlikely that a Big Tech company would sue Twitter over X (Meta and Microsoft both have “X” trademarks), Gerben said, but he [expects]( there will be many “opportunistic and legitimate plaintiffs” who sue Twitter over its rebrand, likely costing the company tens of millions of dollars in legal fees and settlements. Read: The concept of “Return on Hassle.” ([Of Dollars and Data]( NEWS [What else is brewing](#) - [The Education Department]( opened an investigation into Harvard’s use of legacy admissions following a complaint from a nonprofit earlier this month. - [A federal judge]( blocked an asylum policy President Biden has used to reduce crossings at the southern border but delayed it from taking effect for 14 days to allow for an appeal. - [PacWest Bancorp]( a regional lender struggling since the collapse of SVB in March, will merge with Banc of California to form Pacific Western Bank. - [President Biden]( established a national monument in honor of Emmett Till, the Black teenager who was lynched in 1955, and his mother, who became a civil rights advocate. - [GM]( said it’ll make a next-generation Chevy Bolt EV three months after announcing it would end production of its best-selling electric vehicle. - [Trader Joe’s]( is recalling two of its cookie brands because they could contain rocks. RECS [Wednesday to-do list] Work with us: We’re hiring another [editor]( for this newsletter and a [writer]( to run our social channels and help out with the Brew over the weekend. Everything had a first version: You can find them [here](. See how the world lives: This [website]( brings you stories of global families across income ranges. On the job search? Here’s a simple [resume-maker](. Preventing burnout: Learn what one exec at a top healthcare provider has to say about keeping team members who work long hours from burning out. [Read it here](. Grab your THC gummies: [Indacloud]( ships high-quality cannabis products—including their award-winning gummies—to your door at 50% off. [See the selection]( *This is sponsored advertising content. GAMES [The puzzle section](#) Word Search: So many huge musicians are on tour this summer. Can you identify them in today’s [Word Search]( Greek letter trivia With sorority rush on our minds, here’s a quiz on the Greek alphabet. How many of the following Greek letters can you name? - Δ - Ε - Ω - Σ - Θ - Χ - Ψ SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( AROUND THE BREW [Spreadsheet savant](#) The Brew has teamed up with Miss Excel to bring you a one-stop Excel master class. [Snag your seat today]( to become the most productive person in your office. Experts explain what it will take to create a more people-focused healthcare system. [Watch now](. ANSWER - Delta - Epsilon - Omega - Sigma - Theta - Chi - Psi Written by [Neal Freyman]( [Cassandra Cassidy]( Sam Klebanov, and [Matty Merritt]( Was this email forwarded to you? Sign up [here](. 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