Twitter has flown away
Bye-bye, blue bird: Twitter overnight began rebranding itself as X, replacing its longtime logo with a stylized symbol that was projected onto its San Francisco headquarters.
The move underscored Elon Musk’s ambition to make the social network a key part of his longtime goal of creating an “everything app.” But it is also another risky gamble to reinvent a business that has struggled since he paid $44 billion for it last year.
“Lights. Camera. X!” wrote Linda Yaccarino, the company’s C.E.O., as the social network starting rolling out its new branding. Gone is the stylized bird, once dubbed Larry T. Bird by the Twitter co-founder Biz Stone, which became one of the most famous internet logos — and which the company has described as its most recognizable asset.
The platform’s about page hasn’t yet been updated, but Ms. Yaccarino repeatedly referred to X in a series of tweets outlining the company’s ambitions. Expect X to more fully pervade the company: Mr. Musk described an internal message to employees over the weekend as the last he’d send from Twitter, and he told a user that a post should be called an “x” instead of a tweet.
Mr. Musk was very clearly behind the makeover, having long been fascinated by the X identity. His second start-up was X.com, which eventually became PayPal. (The writer Walter Isaacson shared tantalizing snippets of his coming Musk biography about that.) Mr. Musk incorporated “X” into the name of SpaceX and Tesla’s first car model, and he recently named his new A.I. start-up xAI.
Not everyone was on board with the move, though some ad executives said what matters more is whether users stick with the platform. Ms. Yaccarino briefed marketers Sunday on the latest changes at the company, according to The Financial Times, which also include collaborating more with xAI. (The revamp may raise questions about how much authority she wields at the company, after Mr. Musk imposed view limits for users that didn’t please advertisers.)
It’s more than a branding exercise. As Twitter has struggled under Mr. Musk — a pivot to relying on subscriptions hasn’t made up for a 50 percent drop in ad revenue, negative cash flow, and a new threat from Meta’s Threads — he has increasingly emphasized the company’s importance in what he calls X.
The billionaire has long dreamed of creating a super-app that could serve as a platform for everything users could do online, much as WeChat does in China. But as third-party data suggests user numbers are falling, it’s not clear how much runway Mr. Musk has to get a reborn X airborne.
HERE’S WHAT’S HAPPENING
“Barbenheimer” sets a postpandemic box office record. “Barbie” and “Oppenheimer” raked in a combined $235.5 million in the United States and Canada, the best opening weekend since “Avengers: Endgame” in 2019. It’s good news for a movie industry beset by writers’ and actors’ strikes and underperformance by expensive blockbusters, but it suggests that Hollywood’s dependence on franchises is increasingly failing to pay off.
Wildfires force evacuations in Greece. Officials ordered thousands off the tourist hot spots of Rhodes and Corfu this weekend after fires burned swaths of the islands. Southern Europe, like much of the Northern Hemisphere, has been roasted by temperatures soaring over 100 degrees Fahrenheit.
Morgan Stanley gives “Bidenomics” strong marks. Ellen Zentner, the bank’s chief U.S. economist, said that President Biden’s economic policy, including sweeping investments in infrastructure, has led to a surge in manufacturing, construction and hiring that helped G.D.P. grow more than anticipated. That’s good new for Mr. Biden, who has promoted his economic record to bolster his re-election campaign.
Adidas reportedly sees strong demand for Yeezy shoes. The German shoemaker received about $563 million worth of online orders for the Kanye West-designed sneakers that it sought to offload this spring, according to The Financial Times. Last year, Adidas ended its partnership with the rapper after he made antisemitic remarks, but has sought alternatives to destroying its Yeezy inventory, which would lead to a $550 million write-down.
A big week for central banks
Investors are bracing for a consequential week of interest-rate decisions that could set the stage for a second-half rebound for the world’s biggest economies.
Wall Street is increasingly buying a “soft landing” for the U.S. economy, betting that higher interest rates will continue to bring down inflation without causing a recession. Jon Gray, Blackstone’s president, believes that the worst is over and that M.&.A. activity will pick up again as inflation moderates.
Investors are feeling bullish too, pushing the S&P 500 roughly 19 percent higher this year on the belief that central banks will grow less hawkish.
That vision will be tested on Wednesday, decision day for the Fed. After pausing rate rises last month, the central bank is expected to raise borrowing costs by 0.25 percentage points, its 11th increase since March, 2022.
Futures markets this morning are pricing in just a one-in-three chance of a rate increase in September at the Fed’s next meeting. Economists also increasingly see the Fed’s tightening cycle coming to an end this week.
The European Central Bank meets on Thursday. Economists expect the E.C.B. will also raise rates by a quarter of a percentage point. Beyond that, the outlook is less clear. Inflation has begun to fall in the eurozone. Whether that’s enough to persuade the bank’s president, Christine Lagarde, and her colleagues to pause (or stop) after this week, is less certain.
On Friday, the Bank of Japan decides. Data released last week showed headline inflation outpacing the United States for the first time in years. But economists expect the central bank to stand pat, largely because wage growth in Japan is relatively subdued. Global investors, including Warren Buffett, have flocked to relatively cheap Japanese stocks this year, enticed by the country’s economic outlook.
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In other news this week: Big Tech will be part of a parade of 165 S&P 500 firms set to report quarterly results. Investors will be tuning into the earnings calls for Microsoft and Alphabet — both on Tuesday — and Meta on Wednesday for clues on whether the explosion in interest around artificial intelligence is affecting their business outlooks.
Altice USA rethinks its bet on Cheddar News
The cable company Altice USA is weighing a potential sale of Cheddar News, the news network once billed as “CNBC for millennials,” less than five years after buying the company, DealBook’s Lauren Hirsch and The Times’s Ben Mullin are first to report.
Altice USA has hired Goldman Sachs to help explore strategic alternatives for Cheddar News, according to three people with knowledge of the matter. They cautioned that Altice is still weighing its options and may decide against a sale. Representatives for Altice USA and Goldman declined to comment.
A sale would be a retreat from Altice USA’s big bet on the streaming news company. Altice, which is controlled by the French-Israeli billionaire Patrick Drahi, paid $200 million for the streaming network in 2019. The deal was seen as a way to elevate the company’s news division, which also includes the News 12 channel. Cheddar had pitched itself as the future of financial news, featuring interviews with C.E.O.s, newsmakers and journalists from the floor of the N.Y.S.E.
Cheddar doesn’t operate like a traditional cable business. The network’s founder, the former BuzzFeed president Jon Steinberg, struck deals to distribute it across a wide range of platforms. Among them: Gas Station TV (which, yes, plays at the pump) and MTV’s college campus network (which Cheddar bought in 2018).
Some of those pacts aren’t as profitable as cable distribution deals, however. Rather than having TV providers like Comcast pay a fee for each of Cheddar’s viewers, the channel relies mostly on advertising revenue. That’s a tough business model for media companies competing against tech giants like Meta and TikTok for a share of the digital ad market. (Indeed, Cheddar has recently laid off employees.)
Shares of Altice USA are down about 70 percent over the past year. The company, which provides broadband service across 22 states, reported declines in profit and revenue in the first quarter; news and advertising revenue alone fell 14 percent. Altice is set to report second-quarter earnings next week.
Has China peaked?
Predictions of China’s looming economic decline are piling up as its post-Covid recovery stalls. Growth is slowing, youth unemployment is high and the crucial property sector is slumping. The slowdown has fueled a debate among think tanks and political pundits in Washington: Have we reached “peak China” and what would that mean for the world?
The idea that China’s ascendancy is running out steam was introduced by Michael Beckley, the head of the Asia Program at the Foreign Policy Research Institute in a 2018 article for Foreign Affairs magazine. Mr. Beckley believes his framing has taken off lately because it no longer seems inevitable that China will surpass the U.S. economically.
Countries at the peak of their power tend to become more aggressive, he says. In an upcoming paper in the journal International Security that was shared with DealBook, Mr. Beckley argues that the current slowdown could spark a more expansionist China (think of its growing assertiveness toward Taiwan), based on the historical behavior of other countries like the U.S. in the late 19th century. Still, as the American example shows, Mr. Beckley says, “a peaking power isn’t doomed to decline.”
“We need to be careful” about assumptions because there is no reliable data, said Representative Raja Krishnamoorthi of Illinois, the top Democrat on a House committee on competition with China. While the Chinese economic engine is sputtering, he says that Beckley’s theory is misguided because it is focused on the “artificial” plateaus of another economy rather than how to boost growth in the U.S.
It’s too soon to call the beginning of the end of Chinese growth, says Ian Bremmer, president of the political risk consultancy Eurasia Group. He argues that China’s growth will outpace the U.S.’s and that the “peak China” theory is “ideologically freighted.” It is advanced by those with a “zero sum” worldview who fail to recognize that China’s successes can be a win for the U.S. and that Beijing’s global influence is likely to continue to grow with its economy. And American businesses, like Tesla and the N.B.A., that are banking on Chinese markets, don’t want to see a decline. “A hell of a lot of people are very deeply excited to make money on China,” Mr. Bremmer said.
THE SPEED READ
Deals
Policy
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“A ‘Leaner-Meaner’ DeSantis Campaign Faces a Reboot and a Reckoning.” (NYT)
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Worldcoin, the cryptocurrency project founded by the OpenAI chief Sam Altman, began operating on Monday despite regulatory pushback. (FT)
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Drugmakers are waging war on the Biden administration’s move to let Medicare negotiate the price of some prescription medicines. (NYT)
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