☕️ Face the strange

Southwest ends a 50-year tradition... July 26, 2024 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [AT&T In-car Wi-Fi]( Good morning. The tense mood in France ahead of the Paris Olympics will only get more so. Just hours before the Opening Ceremony later today, the high-speed rail network was hit with [coordinated arson attacks]( that have “severely disrupted” traffic along three train lines, the national railway SNCF said. It advised travelers to postpone their trips if possible and canceled many trains. France has deployed the largest peacetime security operation in its history to secure the Olympics, dispatching up to 45,000 police, 10,000 soldiers, and 22,000 private security guards. The Opening Ceremony begins at 1:30pm ET along the Seine River—the first time it’s been held outside of a stadium. —Cassandra Cassidy, Molly Liebergall, Sam Klebanov, Adam Epstein, Neal Freyman MARKETS Nasdaq 17,181.73 -0.93% S&P 5,399.22 -0.51% Dow 39,935.07 +0.20% 10-Year 4.256% -3.0 bps Bitcoin $64,898.22 -1.64% Ford $11.16 -18.36% Data is provided by *Stock data as of market close, cryptocurrency data as of 5:00pm ET. [Here's what these numbers mean.]( - Markets: Stocks looked like they were headed for a positive day, but took a [late turn]( as the tech sell-off—driven by long-term concerns over AI—continued for at least one more session. But it was an automaker that had the least chill Thursday: Ford ran out of gas, plummeting over 18% after a big Q2 profit miss.  AIRLINES [Southwest ends its era of open seating]( [Southwest Airlines plane]( Hershorn/Getty Images The airline that’s not like most airlines is reversing course after 50 years of being different. Southwest announced yesterday that it’s getting rid of open seating, a [hallmark]( of the company, in response to slowing profits. Southwest’s decision is twofold: - The [change]( means it can charge customers more for premium seats with amenities like extra legroom. - The airline thinks customers will like it. In a survey conducted by Southwest, 80% of its fliers favored assigned seats, while the No. 1 reason they switched to a competitor was because of seating, the company said. Southwest will keep the current seating model—opening the cabin doors and yelling “scatter” as people run to window seats—while it retrofits planes with the new seating and waits for regulatory approval, which is estimated to come sometime next year. The airline will also begin offering red-eye flights in 2025, but don’t worry, loyalists: Southwest is keeping its policy of free checked bags for now. Turn and face the strange Southwest’s [momentous]( strategy shift comes as the company reported lackluster earnings, including a 46% drop to $367 million in Q2 profit despite record revenue. The company said it sold too many summer tickets too early and lost out on the last-minute profit squeeze afforded by procrastinating travel-bookers. Other airlines are feeling the turbulence. Delta and American both reported disappointing Q2 profits despite high revenue and record [demand]( those airlines’ premium ticket offerings, like first-class and economy plus, help offset higher labor and fuel costs. Plus…like an angry boss looking over your shoulder when you’re trying to fix a #VALUE! error, Southwest is dealing with the activist investor Elliott Investment Management, which wants to [overhaul]( Southwest’s strategy, though Southwest CEO Bob Jordan said that pressure didn’t impact the open seating change.—CC PRESENTED BY AT&T IN-CAR WI-FI [Go for gold]( [AT&T In-car Wi-Fi]( What’s your fave Olympic event? Swimming? Soccer? Or maybe you’ve always been about intense table-tennis showdowns. Whatever sport gets you hyped, you’re gonna wanna make sure you don’t miss a minute of the 2024 Paris Olympics. And you’re in luck: AT&T In-car Wi-Fi can keep you and your passengers connected to this summer’s competition while you hit the open road. Mm-hmm—[hyper-fast Wi-Fi inside your whip]( starting at $10 per month* with an eligible Unlimited plan. Even better? You won’t miss a minute of the action since [AT&T In-car Wi-Fi covers more roads than any other carrier]( All the streaming, video, audio, and everything in between at top-notch speeds all across the great wide open. [Get connected](. WORLD [Tour de headlines](#) [Shetland Creek wildfire in British Columbia, Canada]Anadolu/Getty Images Wildfires are burning through North America. Approximately 25,000 people were forced to evacuate this week from the popular resort town of Jasper, Alberta, in the Canadian Rockies as a blaze ripped through Jasper National Park, causing [catastrophic damage]( officials said. Meanwhile, wildfires in Oregon, California, and other parts of the Pacific Northwest scorched hundreds of thousands of acres due to strong winds and [high temps](. Scientists say human-induced climate change has led to more extreme wildfires in recent decades. OpenAI is launching a search engine. Why google your concerning health symptoms when you can “SearchGPT” them? That’s the name the artificial intelligence company is using for its new search function, marking its [most direct challenge]( yet to Google. It’s unclear when SearchGPT will be officially launched, but in the meantime, OpenAI is allowing some users to test the feature, which can answer questions (and follow-ups) and link out to sources. The prototype version will be available as a standalone product in web browsers, but OpenAI hopes to integrate it into ChatGPT eventually, Bloomberg reported. ⏸️ Kroger and Albertsons hit pause on their merger amid antitrust scrutiny. The Great Supermarket Merger of 2024 is on hold after the grocery giants agreed to a [temporary injunction]( while state and federal regulators look into the proposed $20 billion deal. The Federal Trade Commission has argued that the merger of two of the US’ largest supermarket chains would drive up food prices, while the companies say their team-up is necessary to compete with Amazon and Walmart. The companies have already agreed to sell 579 locations in the hopes of placating regulators. ECONOMY [Soft landing in sight after GDP smash]( [Shopper at grocery store]( Images The American economy should be wearing a leotard in Paris right now: A knockout commerce report released yesterday indicates that the US is likely to pull off the feted “soft landing”—a Simone Biles-level recession-avoiding maneuver—for the first time since the 1990s. Growth is up: Gross domestic product (GDP)—a broad measure of US goods and services—[increased]( 2.8% annually from April through June, shattering forecasts of 2.1% and doubling the economy’s pace from the first quarter of the year, according to the Commerce Department. That was driven by: - An acceleration in household spending (which accounts for two-thirds of GDP) despite rising unemployment and cost-consciousness. - Corporate and government spending. Business investment hit its fastest rate in nearly a year, Bloomberg [reported]( while increased defense budgeting also boosted GDP. Inflation continues to slow: The Fed’s preferred inflation measure, which excludes volatile food and energy prices, rose at a 2.9% annual rate last quarter. That’s a big chill from its 3.7% rate in Q1, but also a bit higher than estimates. Looking ahead…one economist called this “a perfect report for the Fed,” which is broadly expected to start cutting interest rates in September after months of positive economic readings.—ML FROM THE CREW [The Crew]( Marketing Brew Summit is brat. Get ready for the [Marketing Brew Summit]( on Sept. 12, where innovation, performance, and people unite in one electrifying day! We're spotlighting the industry's brightest minds to uncover how brands harness cutting-edge tools and generative AI to outpace an ever-evolving market. [This is your backstage pass]( to the latest trends, performance-driven strategies, and people-centric approaches reshaping the marketing landscape. Grab your ticket now for a day of inspiration and transformation! POP CULTURE [Skibidi Toilet could grace the big screen]( [Skibidi toilet]( Anna Kim, Photo: DaFuqBoom/YouTube If you only know “sigma” as a Greek letter, then you might need a 10-year-old to help you decipher what’s coming next: Skibidi Toilet has officially caught Hollywood’s eye. Huh? The viral YouTube Shorts series has become a Gen Alpha cultural touchstone with its video-game-like graphics of distorted human heads popping out of toilets to fight humanoid TV robots and sing the absurd Skibidi song. While some parents [wonder]( if it’s turning their kids’ brains into mush, Transformers director Michael Bay and former Paramount Pictures President [Adam Goodman]( recently told Variety they’re [in talks to adapt]( Skibidi Toilet IP into a movie or a TV show. Skibidi Ohio rizz, fellow kids The duo is betting that elevating Skibidi Toilet to the big screen might be the entertainment industry’s best chance to get anyone born after 2010 to watch a video longer than 15 seconds. - The 76-episode series has amassed 17 billion YouTube views since its 24-year-old Georgian creator, Alexey Gerasimov, started dropping episodes last year. - It also firmly lodged the pseudo-word “skibidi” into the Gen Alpha lexicon and inspired fans to create [video games]( played by millions. Big picture: Skibidi Toilet isn’t the only YouTube-born IP that Hollywood hopes can command the big screen like Marvel’s superheroes. A feature film spawned from the channel Ryan’s World is coming to theaters soon, while the cartoon series CoComelon is reportedly getting made into a movie.—SK STAT [Prime number](#) [Taylor Swift]Andreas Rentz, TAS24/Getty Images Universal Music Group is straight up not having a good time, and Big Tech is largely to blame. Shares of UMG, which represents megastars like Taylor Swift and Drake, sank more than 23% on the Amsterdam Euronext exchange yesterday after the record label said its subscription and streaming revenues [grew just ~4%]( in Q2, well below expectations of 10%. The company relies on licensing revenue from Spotify, YouTube, Apple, and Amazon, but UMG executives implied that the latter two are not pulling their weight following a surge of growth during the pandemic. They also said that a recent policy change at Meta to stop licensing music videos is depriving UMG of a huge revenue stream. Swift might be preternaturally powerful, but she can’t stop the changing economics of music streaming. QUIZ [Sha'Carri Quizardson]( [New Friday quiz image]( The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to when your Strava jockey sets a new personal best. It’s that satisfying. [Ace the quiz](. NEWS [What else is brewing](#) - California news: [Gov. Gavin Newsom]( ordered state agencies to clear homeless encampments following June’s controversial Supreme Court ruling. Meanwhile, the state Supreme Court allowed [Uber and Lyft]( to continue treating its drivers as independent contractors. - [American Express]( refreshed its Gold card for the first time since 2018, adding new perks like credits at Dunkin’ and Resy restaurants. - [President Biden and Vice President Harris]( separately met with Benjamin Netanyahu after the Israeli prime minister’s speech to Congress was met with fierce protests. Former President Trump is set to meet with Netanyahu today in Florida. - [Warner Bros. Discovery]( is reportedly suing the NBA in a widely expected move after the league refused its matching bid for TV rights. - [The Disney+-Hulu-Max bundle]( will cost $17 a month with ads and $30 without, a 38% reduction from buying all three streaming services on their own. - [Climate activists]( in Germany glued themselves to runways, forcing the cancellation of 140 flights. RECS [Friday to-do list] Don’t embarrass yourself: Here’s [how to tip]( properly in Italy, France, and other European countries. Explore the dark side: For the first time, NASA can see into [craters on the moon]( where the sun literally doesn’t shine. Follow the money: A chart of the [highest-paid athletes]( at the Paris Olympics. Take a stand: Did the Minions [evolve]( or were they created? Commercial real estate: Learn the latest on office, industrial, and life science real estate with [The Corporate Real Estate Insider podcast](. Subscribe on your favorite [podcast platform or YouTube]( *A message from our sponsor. GAMES [The puzzle section](#) Decipher: Codebreakers, sharpen your pencils. It’s time for another round of Decipher, which asks you to uncover a famous movie tagline. [Get cracking here](. Friday puzzle If… 11 people watch BOXING 50 people watch GOLF 102 people watch ICE SKATING 151 people watch ATHLETICS 507 people watch DIVING How many people watch CYCLING? 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]( ANSWER 251 people watch CYCLING. The number of people who watch = the sum of the Roman numerals in that sport’s name. So, CYCLING has 2 Cs (200), 1 L (50), and 1 I (1). [Source]( Word of the Day Today’s Word of the Day is: preternaturally, meaning “exceeding what is natural or normal.” Thanks to Don from Shippensburg, PA, and others for the unusually good suggestion. Submit another [Word of the Day here](. ✢ A Note From AT&T In-car Wi-Fi Requires eligible car and wireless service plan plus taxes and fees. Additional restrictions apply. *Based on independent third-party data. AT&T may temporarily slow data speeds if the network is busy. Written by [Adam Epstein]( [Cassandra Cassidy]( [Molly Liebergall]( Sam Klebanov, and [Neal Freyman]( Was this email forwarded to you? Sign up [here](. Interested in podcasts? - Check out ours [here]( [ADVERTISE]( // [CAREERS]( // [SHOP]( // [FAQ]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright © 2024 Morning Brew. All rights reserved. 22 W 19th St, 4th Floor, New York, NY 10011