A big opening for ‘Black Widow’ gives a taste of how theaters and streaming can coexist.

Daily Business Briefing

July 15, 2021, 7:58 a.m. ET

July 15, 2021, 7:58 a.m. ET

Scarlett Johansson, left, and Florence Pugh in “Black Widow.”
Credit…Marvel Studios/Disney

There has been a lot of hand-wringing about the demise of movie theaters over the past year and a half, and for good reason. Most were closed for at least a few months during the height of the pandemic. Companies like the Walt Disney Company, NBCUniversal, WarnerMedia and Viacom have started to prioritize streaming for their films, in part to bolster subscriber interest in their own Netflix-style platforms.

Over the weekend came evidence that, at least for the biggest franchise films and with a carefully calibrated pricing strategy, theatrical distribution and streaming can coexist.

At least for now.

“Black Widow,” a long-delayed Marvel movie, collected about $80 million in the United States and Canada from Thursday night to Sunday for Disney. Overseas, the superhero movie sold an additional $78 million in tickets. That means that, in total, roughly 17 million people went to see the movie in a theater, according to Rich Greenfield, a founder of the LightShed Partners research firm. After giving theater owners their cut of ticket sales, Disney cleared about $98 million over the weekend, Mr. Greenfield calculated.

Disney also made “Black Widow” available on its Disney+ streaming service, which has more than 100 million subscribers worldwide. Subscribers could instantly watch the film (and have permanent access to it) for a $30 surcharge. Disney said on Sunday that Disney+ generated about $60 million from “Black Widow” orders over the weekend. Mr. Greenfield said that figure equated to about two million transactions and about $48 million in revenue for Disney after streaming partners had taken their cut. (The benefit to Disney in the form of new subscribers to Disney+ is unknown; subscriptions cost $8 a month.)

There are several takeaways. “Imagine being a theater owner and realizing studios need you less and less everyday,” Mr. Greenfield wrote on Twitter. “Leverage is shifting rapidly in the streaming era toward the studios.”

On the other hand, the fact that 17 million people decided to leave their bubbles and go sit with strangers in a theater — amid rising coronavirus infections, the result of the Delta variant — when they could just push a button in their living rooms is nothing to sneeze at. For now, theatrical distribution remains a major revenue generator and cannot be ignored if studios want to make money on big-budget spectacles.

“This is an extremely impressive theatrical opening,” David A. Gross, who runs Franchise Entertainment Research, a movie consultancy, said in an email. “Certainly the figure would be higher if every theater were open, if there were zero concern with Covid and if there weren’t a streaming option. For now, those impediments make the ‘Black Widow’ opening all the more impressive.”

A New York Fed survey suggests that shoppers expect to pay more in the near term, but that they are somewhat less concerned about the medium term.
Credit…John Taggart for The New York Times

Near-term consumer inflation expectations jumped to the highest level on record in a Federal Reserve Bank of New York survey, a sign that a pop in prices as the economy reopens from the pandemic is catching households’ attention.

The Fed is parsing what people think will happen with inflation to see if the recent jump in consumer prices is lifting outlooks in a lasting way. If households begin to expect rapid price gains year after year, they might both accept higher price tags and demand higher pay to cover rising costs. That could make today’s faster inflation — which officials expect to prove temporary — permanent.

The New York Fed survey suggests that shoppers figure they will have to pay more in the near term, but that they are somewhat less concerned about the medium term. Year-ahead inflation expectations jumped 0.8 points to 4.8 percent in June, a new series high, even as inflation expectations over the next three years remained little changed at 3.6 percent. Still, that medium-term price outlook is lingering at elevated levels when compared with recent years.

Fed officials have been striking an increasingly wary tone in recent months as prices rise faster than many economists had expected, driven partly by shortages as producers struggle to accelerate production to meet strong consumer demand. It is difficult to guess how rapidly those bottlenecks will clear up.

“It’s still too early to tell how things are going to evolve,” John C. Williams, the president of the Federal Reserve Bank of New York, said on a call with reporters on Monday morning. “We’ll just have to watch it carefully.”

Several data points suggest that quick price gains might prove more lasting than many analysts initially anticipated. Apartment rents are rebounding, some manufacturing disruptions abroad and shipping problems might last for months, and wages are rising for lower-paid workers, which could pass through to prices for restaurant meals and other services.

The New York Fed survey showed that household expectations for earnings growth are picking up, and that spending growth expectations jumped to a new series high.

Signs that the labor market is strong and the economy is roaring back come as something of a surprise at a moment when millions of jobs are still missing compared with before the pandemic. That contrast could make it challenging for the Fed to navigate policy going forward, because the central bank aims for both stable inflation and maximum employment when setting policy.

The Fed will get another critical data point as it tries to size up the situation this week when the Labor Department releases its Consumer Price Index of inflation on Tuesday morning. Economists at Goldman Sachs expect a 5.1 percent increase from the prior year, up from 5 percent the prior month.

“The last few months, and I guess the last three months, we’ve seen some pretty strong movements, and kind of crosscurrents, both in the employment data and the inflation data,” Mr. Williams said when asked about the outlook for the Fed’s enormous bond-buying program, one of its key monetary policies.

“We want to definitely see some more data,” he said.

Annual growth in S&P 500 earnings

The nation’s biggest banks are about to report windfall profits as customers increase their spending and the economy bounces back from the pandemic.

Profits for behemoths including JPMorgan Chase and Goldman Sachs are expected to jump when they report second-quarter results this week. Their Wall Street divisions have been able to cash in on a red-hot market for deals, while the banks’ Main Street units benefited as customers went back to work and opened their wallets.

And some of the gains will be the result of money they already had on hand: The banks are paring down the rainy-day funds they set aside earlier in the health crisis to prepare for a dreaded wave of defaults that hasn’t materialized.

“Government relief efforts and forbearance provided by banks appear to have served as an effective bridge for borrowers,” Nathan Stovall, an analyst at S&P Global Market Intelligence, wrote in a report to investors. “Now, many consumers and businesses are on solid footing as Covid-19 vaccinations allow economies to reopen.”

Investors will take cues from top bankers about the state of the economy. Chief executives at the largest U.S. banks have become increasingly bullish this year as a speedy vaccine rollout helped Americans emerge from the torpor of the coronavirus outbreak.

“My gut tells me this economy is recovering faster, inflation is moving quicker, and it may not be quite as transitory as we all think,” James Gorman, the chief executive of Morgan Stanley, told CNBC last month. That may mean the Federal Reserve will need to raise interest rates earlier than markets are expecting, Mr. Gorman said.

The shifting pace of the rebound has caused some turbulence: Bank stocks that surged as the reopening gained speed have fallen 7 percent in the last month, and investors in the bond market are worried that growth is slowing from its previously breakneck pace. Executives will probably be quizzed about inflation and what would happen to financial markets should the Fed curtail its enormous bond-buying program sooner than once expected.

The uncertainty that’s depressing bank stocks will probably dissipate, said Susan Roth Katzke, an analyst at Credit Suisse. She forecast a rally of about 20 percent in some of their shares in the next six to 12 months. They will be fueled by an accelerating recovery, prospects for rising interest rates and increasing loans, Ms. Katzke wrote in a note to investors.

But the mixed economic picture has clouded the outlook for borrowing, which is crucial to the banks’ ability to earn money from interest payments.

“The big topic that everyone is focused on is loan growth,” said Kush Goel, senior research analyst at Neuberger Berman. Even with the economy expanding quickly, businesses are not borrowing quite as much as expected, he said.

Investment banking divisions are likely to shine in this week’s results. Wall Street dealmakers are still profiting from a bonanza in mergers, acquisitions, initial public offerings and so-called special purpose acquisition companies. Traders, however, will probably post results that are less eye-popping than last year, when the virus set off huge waves of volatility and client activity.

Some firms may provide more details about exactly how they’ll share some of that wealth.

Morgan Stanley and Wells Fargo were among the banks that said in June they would increase dividends and buy back more of their stock. The banks moved to return money to shareholders after passing the Fed’s annual stress test, which was the final hurdle to ending temporary restrictions on payouts that were put in place because of the pandemic. Collectively, JPMorgan, Bank of America, Wells Fargo and Morgan Stanley have announced they’ll repurchase $85 billion in shares.

Investors will also look to return-to-office plans by banks — bulwarks of the New York economy and major employers worldwide — as an early barometer for corporate America. Goldman Sachs and JPMorgan have taken a more aggressive approach to getting staff back to their desks, while Citigroup signaled it would be more flexible. Investors will closely watch how the varying approaches take shape, months before other white-collar employees are called back to their workplaces.

Laurence D. Fink of BlackRock said the World Bank and the International Monetary Fund should “rethink their roles.”
Credit…Lucas Jackson/Reuters

After years of cajoling corporations to do more to fight climate change, Laurence D. Fink has new targets in his quest to make the economy more sustainable. The BlackRock chief executive, who spoke on Sunday at the Group of 20 summit, said the World Bank and the International Monetary Fund needed to “rethink their roles,” the DealBook newsletter reports.

Mr. Fink called on the two international bodies to change how they promote sustainability in developing nations. He also criticized governments, saying they need to do more to limit the use of fossil fuels. He said corporate disclosures of climate impacts, which he has pushed as the head of BlackRock, the world’s largest investment firm, were not the answer alone.

Mr. Fink has long pushed for the corporate sector to take the lead on climate initiatives, doing more than most to put the environment on boardroom agendas. Now, he is criticizing governments and other official institutions as not pulling their weight when it comes to climate change, saying even the world’s largest multinationals and investment firms can’t tackle this on their own.

Mr. Fink’s latest push is based on two observations. First, that the amount of money required to “decarbonize the economy” is enormous. And second, that government guarantees have created much larger markets than direct government spending or lending.

The World Bank and I.M.F. should act more like Fannie Mae and Freddie Mac, Mr. Fink said, and less like traditional lenders. Guarantees by the institutions could lead to huge additional investments in green technologies in emerging markets. For example, the U.S. government guarantee of mortgage insurers led to a $11 trillion market for home loans.

Critics may say the primary beneficiaries of the proposal would be large investors, like BlackRock, that would shield themselves from losses. (For the idea to fly, investors would probably have to share some of their investment gains with the institutions.) Mr. Fink is sometimes called out as being too incremental in his approach, but what he suggested would fundamentally change the function of the World Bank and the I.M.F., as well as reshape the role of governments in combating climate change.

Janet L. Yellen, the Treasury secretary, speaking on Sunday in Venice. “What happens in any part of the world affects all other countries,” she said.
Credit…Andrea Merola/EPA, via Shutterstock

Treasury Secretary Janet L. Yellen said on Sunday that she was concerned that coronavirus variants could derail the global economic recovery and called for an urgent push to vaccinate more people around the world.

Her comments, made at the conclusion of a gathering of the finance ministers of the Group of 20 nations, came as the highly contagious Delta variant of the coronavirus was driving outbreaks among unvaccinated populations in countries such as Australia, Indonesia, Malaysia and Portugal.

“We are very concerned about the Delta variant and other variants that could emerge and threaten recovery,” Ms. Yellen said. “We are a connected global economy. What happens in any part of the world affects all other countries.”

Many cities and countries have started to declare victory against the pandemic, easing restrictions and returning to normal life. But Ms. Yellen warned that the public health crisis was not over.

She said that the world’s top economic officials had spent much of the weekend in Venice discussing how they could improve vaccine distribution, with the goal of getting 70 percent of the world inoculated by next year. Ms. Yellen noted that many countries had been successful in financing the purchase of vaccines, but that the logistics of getting them into people’s arms were falling short.

“We need to do something more and to be more effective,” she said.

The spread of variants has started to dampen optimism about the trajectory of the recovery. Analysts at Capital Economics said last week that they planned to lower their economic growth outlook for the year to below 6 percent.

“The divergence across economies is intensifying,” Kristalina Georgieva, the managing director of the I.M.F., said on Saturday. “Essentially, the world is facing a two-track recovery.”

The I.M.F. executive board approved a plan last week to issue $650 billion worth of reserve funds that countries could use to buy vaccines and to finance health care initiatives.

Stocks rose on Monday ahead of large companies beginning to report their second-quarter earnings this week.

The Group of 20 finance ministers meeting in Venice endorsed on Saturday a proposal for a global minimum tax of at least 15 percent aimed at large corporations, including technology giants like Amazon and Facebook.

  • The S&P 500 gained 0.3 percent.

  • Goldman Sachs gained 2.4 percent and JPMorgan Chase gained 1.4 percent. They will publish their earnings reports before the market opens on Tuesday. PepsiCo will also report earnings.

  • The yield on 10-year U.S. Treasury notes rose to 1.37 percent.

  • Oil prices fell. West Texas Intermediate, the U.S. crude benchmark, was down 0.5 percent to $74.17 a barrel.

  • Stock indexes in Europe were mostly higher. The Stoxx Europe 600 rose 0.7 percent.

  • Shares in Virgin Galactic fell 17.4 percent after the company said in a regulatory filing on Monday morning that it might sell $500 million in stock. That reversed premarket gains that came after Richard Branson, the company’s founder, took a flight 50 miles above Earth on a Virgin Galactic space plane on Sunday, successfully demonstrating his commercial spaceflight business.




Variants Threaten Global Economic Recovery, Yellen Warns

Treasury Secretary Janet L. Yellen said on Sunday that coronavirus variants could hinder the global economic recovery and called for a stepped-up effort to vaccinate the world’s population.

We are vey concerned about the Delta variant and other variants that could emerge and threaten recovery. We are a connected global economy. What happens in any part of the world affects all other countries. We therefore recognize the importance of working together to speed the process of vaccination and have the goal of wanting to vaccinate 70 percent of the world’s population next year. We recognize that while a lot has been done to finance the purchase of vaccines, that with respect to logistics, both for vaccines, distribution, sending vaccines to areas where there is increasing infection to so-called hot spots around the world, therapeutics, P.P.E. and other things, that we need to do something more and to be more effective.

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Treasury Secretary Janet L. Yellen said on Sunday that coronavirus variants could hinder the global economic recovery and called for a stepped-up effort to vaccinate the world’s population.CreditCredit…Luca Bruno/Associated Press

After spending the weekend huddled in the halls of an ancient Venetian naval shipyard, the top economic officials from the Group of 20 nations on Saturday formally threw their support behind a proposal for a global minimum tax of at least 15 percent, Alan Rapaport reports from Venice for The New York Times.

Under the plan, each country will adopt new rules requiring large global businesses, including technology giants like Amazon and Facebook, to pay taxes in countries where their goods or services are sold, even if they have no physical presence there.

“After many years of discussions and building on the progress made last year, we have achieved a historic agreement on a more stable and fairer international tax architecture,” the finance ministers said in a joint statement, or communiqué, at the conclusion of the meetings.

The plan would be the most significant overhaul of the international tax system in decades, cracking down on tax havens and imposing new levies on large, profitable multinational companies.

The plan could reshape the global economy, altering where corporations choose to operate, who gets to tax them and the incentives that nations offer to lure investment. But major details remain to be worked out ahead of an October deadline to finalize the agreement and resistance is mounting from businesses, which could soon face higher tax bills, as well as from small, but pivotal, low-tax countries such as Ireland, which would see their economic models turned upside down.

Tucker Carlson, the top-rated Fox News host, has not disclosed whether he has received a Covid-19 vaccine.
Credit…Chip Somodevilla/Getty Images

The prime-time Fox News shows hosted by Tucker Carlson and Laura Ingraham have been repeating a message at odds with the recommendations of health experts, even as the coronavirus’s Delta variant and other mutations fuel outbreaks in areas where vaccination rates are below the national average, Tiffany Hsu reports for The New York Times.

Mr. Carlson, Ms. Ingraham and guests on their programs have said on the air that the vaccines could be dangerous, that people are justified in refusing them and that public authorities have overstepped in their attempts to deliver them.

Mr. Carlson and Ms. Ingraham last week criticized a plan by the Biden administration to increase vaccinations by having health care workers and volunteers go door to door to try to persuade the reluctant to get shots.

Mr. Carlson, the highest-rated Fox News host, with an average of 2.9 million viewers, said the Biden plan was an attempt to “force people to take medicine they don’t want or need.” He called the initiative “the greatest scandal in my lifetime, by far.”

Opposition to vaccines was once relegated to the fringes of American politics, and the rhetoric on Fox News has coincided with efforts by right-wing extremists to bash vaccination efforts. The comments by the Fox News hosts and their guests may have also helped cement vaccine skepticism in the conservative mainstream, even as the Biden administration’s campaign to inoculate the public is running into resistance in many parts of the country.

Public health experts have said that a strong vaccination effort is critical for the United States to outrun the virus, which has killed more than four million people worldwide and continues to mutate.