☕ Doubled deficit

The US federal deficit surged to $2T this year... October 23, 2023 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [EnergyX]( Good morning. It’s that time of the year again: The sky has been pitch-black for over an hour, you put on your PJs, and get ready for bed…until you look at your phone and realize it’s only 6:30pm. Winter is coming. —Neal Freyman, Dave Lozo MARKETS: YEAR-TO-DATE Nasdaq 12,983.81 +25.00% S&P 4,224.16 +10.46% Dow 33,127.28 -0.03% 10-Year 4.928% +104.8 bps Bitcoin $30,006.83 +81.34% Moderna $80.40 -55.08% *Stock data as of market close, cryptocurrency data as of 2:00am ET. [Here's what these numbers mean.]( - Markets: This earnings season, individual company reports have taken a backseat to macro concerns like the Israel-Hamas war and the drastic surge in Treasury yields. That’s resulted in rare [stock market synchrony]( At least 400 stocks in the S&P 500 have moved in the same direction in four of six trading sessions since Oct. 13, Bloomberg reported. - Stock spotlight: The biotech sector has [slumped]( in the post-pandemic world as declining demand for Covid-19 vaccines pummels the market values of once-high-flying firms like Novavax, Pfizer, and Moderna.  COMMUNICATIONS [Business leaders face heat over war communications]( [Paddy Cosgrave speaking]( Pedro Fiúza/NurPhoto via Getty Images On Saturday, Paddy Cosgrave [resigned]( as CEO of Web Summit, which hosts one of the world’s largest tech conferences. The reason: his remarks on the Israel-Hamas war. Last week, Cosgrave wrote on X that “war crimes are war crimes even when committed by allies,” a critique of Israel’s deadly bombardment of Gaza in response to Hamas’s brutal terrorist attack on Oct. 7. Cosgrave’s comments drew widespread backlash from the tech community for not condemning Hamas’s atrocities, and a wave of major companies, including Google, Intel, Meta, and Stripe, backed out of the event scheduled for next month in Lisbon. Cosgrave apologized but decided to step down, saying he did not want to become a distraction. Companies are uneasy speaking about this war In recent years, corporate executives have been increasingly vocal on domestic social issues and geopolitical conflicts. Following the police murder of George Floyd in 2020, business leaders pledged to fight for racial equality, and [nearly all]( of the S&P 500 companies issued formal statements on Russia’s invasion of Ukraine last year, according to Bloomberg. So far, they’ve been more reluctant to publicly comment on the Israel–Hamas war. As of last Tuesday, ~20% of the 100 largest S&P companies had made formal statements about the conflict, per Bloomberg. And at some companies, like Nike and Instacart, internal corporate communications around the crisis have drawn criticism from employees for being insufficiently supportive. Zoom out: Following the Bud Light controversy this summer, there are signs that the American public is [less interested]( in hearing from companies about sociopolitical issues. - In a recent poll by Gallup and Bentley University, 41% of Americans said businesses should take stances on current events, a drop from 48% last year. - Less than 30% said brands should address international conflict. But a standard has been established. Since 2020, corporations have set the expectation that they’d comment on urgent sociopolitical issues—even if those issues did not directly impact their operations. “Once you get into this game, you cannot get out. That’s the expectation now, post-George Floyd,” Paul Argenti, professor of corporate communications at Dartmouth’s Tuck School of Business, told Bloomberg. Now, “saying nothing speaks to cowardice,” Yale School of Management professor Jeffrey Sonnenfeld [told CNN](   WORLD [Tour de headlines](#) [A picture taken from the Israeli side of the border with the Gaza Strip shows smoke rising behind destroyed buildings in the norther-western part of the Palestinian enclave during an Israeli bombing on October 21, 2023]Israeli airstrikes on the Gaza Strip on Saturday. Aris Messinis/AFP via Getty Images Israel–Gaza update. A [second convoy of trucks]( carrying humanitarian aid entered a stricken Gaza via Egypt as overwhelmed hospitals in the territory face a [dire shortage]( of medicine and supplies due to an Israeli siege. Meanwhile, Israeli airstrikes on Syrian airports and in Lebanon raised concerns of a wider regional conflict. To counter a potential escalation in attacks on American troops in the Middle East, the Pentagon said it’s planning to send [more military firepower]( to the region. In the US, police found [no evidence]( of antisemitism after the president of a Detroit synagogue was found stabbed to death outside her home. Still, American Jews are on high alert over a rise in antisemitic hate crimes and have [flocked to gun training classes](. Argentina elections will go to a runoff. The country’s finance minister, Sergio Massa, and outspoken right-wing populist and Donald Trump admirer Javier Milei appear [headed to a runoff]( in November after Massa’s ruling Peronist coalition smashed expectations in the general election yesterday. The world is watching the outcome: Under Massa’s stewardship, Argentina’s inflation has surged to nearly 140%, and poverty rates have reached 40%. Appealing to widespread discontent, the eccentric Milei rose to prominence in recent years with a [radical libertarian platform]( that includes legalizing the sale of human organs. Investors consider a Massa–Milei runoff the worst-case scenario for markets since it extends uncertainty around the country’s economic path forward for another month. Scorsese can’t topple Swift. The director’s 3.5-hour epic, Killers of the Flower Moon, brought in [$23 million]( at the North American box office, an impressive haul but no match for Taylor Swift, whose concert film held the No. 1 spot for the second consecutive weekend. Still, Killers of the Flower Moon was Scorsese’s best opening since 2010’s Shutter Island, and the initial box-office tally vindicates Apple’s new theater-focused release strategy. Apple expects to shell out $1 billion per year on films released in theaters, Bloomberg reported. PRESENTED BY ENERGYX [Lithium: The next gold rush]( [EnergyX]( Lithium is essential for batteries in electric cars, renewable energy storage, and even smartphones. That’s why demand for lithium is projected to grow 20x by 2040. So when [EnergyX]( revealed that their technology could extract 300% more lithium than traditional methods, investors everywhere took note—General Motors included. GM is the lead investor in EnergyX’s $50m funding round. And [you can join them](. That means you have the unique opportunity to get in on the ground floor of a company just as they’re set to unlock the US lithium supply. Don’t miss your chance. [Click here]( to become an EnergyX shareholder and transform the future of renewable energy. GOVERNMENT [The US budget deficit doubled this year]( [US Treasury Secretary Janet Yellen]( Elizabeth Frantz/Pool/AFP via Getty Images The 2023 federal budget deficit [surged by 23%]( to $1.7 trillion, leaving the US in its deepest yearly fiscal hole outside of the Covid era, according to the Treasury Department, which released the data on Friday. But a closer look reveals the financial picture is even worse than the headline #s suggest. - The Treasury recorded the Biden administration’s ~$300 billion student loan forgiveness program as a cost last year, but it was struck down by the Supreme Court and never took effect, resulting in the Treasury considering it a savings this year. - That means the year over year increase effectively doubled from $1 trillion in 2022 to $2 trillion in 2023. What happened? More than 40% of the deficit increase was due to lower tax revenues, while the government [forked over $659 billion]( in interest payments, nearly doubling over the past two years. With a government shutdown looming next month and a gridlocked House unable to pass legislation without a speaker, the country’s worsening finances could make federal funding negotiations even tenser. But financial help is still possible for allies. Treasury Secretary Janet Yellen said the US could “absolutely” afford President Biden’s proposed $100 billion in emergency spending that includes military aid to Ukraine and Israel, citing declining inflation and a low 3.8% unemployment rate.—DL   CALENDAR [The week ahead](#) [The chair for the Speaker of the House remains empty as they House of Representatives prepares to hold a vote for Speaker at the U.S. Capitol ]Drew Angerer/Getty Images House speaker saga continues: It’s been two weeks since Kevin McCarthy was ousted as House speaker, and Republicans are [not even close]( to choosing his replacement, freezing congressional activity during multiple international crises. With Jim Jordan and Steve Scalise having failed to win enough votes, [nine other contenders]( have put their name forward. A private candidate forum is planned to take place this evening, and a nominee will be selected by secret ballot as soon as tomorrow. Auto and tech earnings: Meta and Amazon highlight a busy week for tech earnings, and GM and Ford will report their financial results during the ongoing United Auto Workers strike. Meaty profits from the auto giants during a strike could bolster the union’s position that the companies can afford more concessions to employees. Britney doesn’t hold back in new memoir: Britney Spears’s The Woman in Me [hits bookshelves]( on Tuesday, having already reached No. 1 on the Amazon bestsellers list thanks to preorders. The memoir looks into some of the most private details of her life, including her rise from child star to international icon, her tumultuous marriage to Kevin Federline, and her 14-year conservatorship. Everything else… - Striking Hollywood actors and major studios will return to the negotiating table on Tuesday. - The NBA regular season tips off Tuesday night with the defending champion Denver Nuggets hosting the Lakers. The 2023 first overall draft pick, Victor Wembanyama, will make his NBA debut with the Spurs on Wednesday. - Today, on “Croc Day,” Crocs will release its $120 Crocs Classic Cowboy Boots—[Croots]( as they have been dubbed. TOGETHER WITH WENDY'S [Wendy's]( Breakfast of champs. The choice is yours: Start your morning with the same ol’ oatmeal (or something equally bland and boring) orrr treat your taste buds—and wallet—to [Wendy’s Breakfast 2 for $3 Biggie Bundles](. Seasoned potatoes, hot coffee, sausage biscuits…the combo choices are scrumptiously endless. [Watch Morning Brew]( and taste the difference. Terms apply. GRAB BAG [Key performance indicators](#) [Scene from Trading Places]Trading Places/Paramount Pictures Stat: If you want a glass of OJ, it’s never been more important to ask yourself if the juice is worth the squeeze. Frozen concentrated orange juice futures hit a record [$3.91 per pound]( on Friday. Don’t blame Louis Winthorpe and Billy Ray Valentine: Orange juice prices at the grocery store have climbed more than 10% over last year as citrus growers confront [citrus greening]( bacterial disease that attacks the vascular system of plants—and extreme weather. Florida’s crop has fallen more than 50% from two years ago, and an increasing number of orange farmers are getting out of the game and [selling their land]( to property developers. Quote: “We are deeply sorry for the content that was displayed, as this is not representative of our institutional values.” Michigan State [apologized]( after a picture of Hitler was shown on its stadium’s videoboards during a quiz before its rivalry game vs. Michigan. After the image went viral, the university said it would stop working with the “third-party source” that provided the quiz content and strengthen its approval procedures going forward. Read: The secret life of Jimmy Zhong, who stole—and lost—more than $3 billion. ([CNBC]( NEWS [What else is brewing](#) - [Americans]( are falling behind on their auto loans at the fastest pace in almost 30 years, per Bloomberg. - [The weather]( this winter will be milder than typical in the Northern US and wetter in the South thanks to El Niño, according to the annual outlook by the National Oceanic and Atmospheric Administration. - [Foxconn]( Apple’s primary contractor, is reportedly under tax audit in China. - [Uber]( is offering hot-air balloon rides in Turkey as part of its push into the tourism economy. RECS [Monday to-do list image] Enterprising furniture: Buy [chairs]( featured in Star Trek and place them on your bridge or in your living room. Tech tip: How to exchange numbers by [tapping iPhones together](. Food for thought: The annual Uber Eats Cravings Report spills the tea on the most popular—and unusual—[delivery requests](. Cleaning tip: Here’s the [correct way]( to load your dishwasher. Silverware handles go down! This mascara has racked up over 25k 5-star reviews. Using clean, nourishing ingredients, this bestseller gives you lashes that look like extensions and last all day without smudging or flaking. [Brew readers get 20% off]( A startup sit-down: Three founders join Morning Brew’s Alex Lieberman to discuss their stories, how they’re poised to [revolutionize their industries]( and their public investment rounds. [Register to watch]( *A message from our sponsor. GAMES [The puzzle section](#) Turntable: We got an “x” sighting, folks! Play today’s x-citing Turntable [here](. Geography trivia 1. Sweden (267,570) 2. Norway (239,057) 3. Finland (178,947) 4. Canada (52,455) 5. United States (18,617) 6. Indonesia (17,504) What does this list represent? 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 The countries with the most islands (and the number of islands). [Source](. Word of the Day Today’s Word of the Day is: synchrony, meaning a “simultaneous action, development, or occurrence.” Thanks to Jay from Media, PA, for the suggestion. [Submit another Word of the Day here](. ✢ A Note From EnergyX This is a paid advertisement for EnergyX’s Regulation A+ Offering. Please read the offering circular at [(. Written by [Neal Freyman]( and Dave Lozo Was this email forwarded to you? Sign up [here](. 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