Back on the menu
The burger wars are escalating, with Restaurant Brands' (QSR) Burger King bringing back its $5 value meal, which will likely include a sandwich, chicken nuggets, fries and a drink. The move follows reports that McDonald’s (MCD) will launch a $5 value meal in the U.S. beginning on June 25, and more are joining in on the action. Wendy’s (WEN) just announced a $3 morning meal deal that'll include a breakfast sandwich, as well as a small batch of seasoned potatoes.
Cost-conscious: Many Americans squeezed by higher food costs have changed their habits by visiting restaurants less often, even if those are fast food chains. It has also made deals and discounts a bigger part of overall consumer decision-making. Value meals look to provide those options to customers who have grown fatigued by the current environment, and continue to feel wallets before heading to the drive-thru or grabbing a quick bite.
Note that Burger King (QSR) plans to run its new offer for several months, while the promotion from McDonald's (MCD) will likely last four weeks. That's not a long time, which means the discounted meals may not be sustainable, especially with the Golden Arches asking Coca-Cola (KO) to chip in and mitigate some of the costs. Instead, the value offerings will seek to bring back momentum, with the aim of converting the increase in customers into a steady stream of traffic with higher sales.
From the SA comments section: "This is part of a wider story. Target is lowering their prices, other restaurants are also realizing that they have overreached with excessive increases," wrote Investor since ‘73. References to "shrinkflation" were mentioned by user ajvanatta, while jojob852 points out that some chain restaurants have been "really clobbered" due to "wage and food inflation" and starts the discussion on top sector picks when things "finally settle down and people circle back to these names." (39 comments)
Hollywood AI
As the media industry changes tack when it comes to artificial intelligence, with multiple content licensing deals being announced of late, Hollywood may be next. Alphabet (GOOGL) and Meta (META) have reportedly held talks with major Hollywood studios on licensing content for use in AI video generation software, offering tens of millions of dollars. Warner Bros. Discovery (WBD) is keen on licensing some of its programs to train AI models, while Netflix (NFLX) and Disney (DIS) are interested in other types of collaboration. Microsoft (MSFT)-backed OpenAI has held similar discussions on Hollywood partnerships. (4 comments)
More than a ticket
Live Nation (LYV) sank around 8% on Thursday after the DOJ filed an antitrust suit looking to split up what it called an illegal monopoly that has pushed ticket prices higher. "The complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry," the company responded, blaming elevated costs on production, artist popularity, and online ticket scalping. "This case will probably take years to materialize," noted SA analyst Yuval Rotem, cautioning that it could pressure the stock whether or not the breakup succeeds. (12 comments)
Crypto win
Security? Commodity? Does it matter anymore? Less than six months after approving the first spot bitcoin ETFs, the SEC is again broadening the reach of the crypto world. The agency has approved applications from Nasdaq (NDAQ), NYSE (ICE), Cboe (CBOE) and five others to list exchange-traded funds that invest directly in ether (ETH-USD). The issuers still need a separate greenlight from the agency before the products can go live, with the deadline yet to be determined. Ether, which rose 20% this week amid ETF optimism, fell 4% following the approval in typical "buy the rumor, sell the news" fashion. (27 comments)
Today's Markets
In Asia, Japan -1.2%. Hong Kong -1.4%. China -0.9%. India flat.
In Europe, at midday, London -0.4%. Paris -0.2%. Frankfurt -0.4%.
Futures at 7:00, Dow +0.2%. S&P +0.3%. Nasdaq +0.3%. Crude -0.8% to $76.26. Gold +0.2% to $2,341.60. Bitcoin -3.2% to $67,341.
Ten-year Treasury Yield unchanged at 4.47%.
Today's Economic Calendar
8:30 Durable Goods
9:35 Fed's Waller Speech
10:00 Consumer Sentiment
1:00 PM Baker Hughes Rig Count
SIFMA Early Close at 2:00 PM
Companies reporting earnings today »
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23andMe (ME) not providing guidance amid strategic review.
'Overbought' gold adds to losses after tough Fed talk on rates
