Good morning. "Chicken oversupply is a commodity market dynamic," Tyson Foods CEO says; a partial step forward for RFK Jr.'s food-system overhaul (and what it means for companies); plus, what options traders expect after this week's inflation report.
Poultry companies today are producing more chicken than consumers can buy, which is weighing down wholesale prices and corporate profits, our WSJ colleague Patrick Thomas reports.
Potential consequences: It sets up potential inflation relief for shoppers and restaurants looking to pare down their costs for protein, Patrick writes. Tyson Foods , Pilgrim's Pride and Wayne-Sanderson Farms already have been ramping up production of boneless chicken breasts and wings to meet what is expected to be an onslaught of consumer demand.
On Tyson Foods' most recent earnings call, CFO Curt Calaway noted that total company sales ($13.9 billion) was basically flat compared with the prior year as a 3.4% increase in average sales price offset a 2.8% decline in volume, "the latter driven largely by tighter cattle supply in beef," he said.
Calaway also said that its third-quarter segment operating income was $779 million, an increase of $18 million versus the prior year, "driven by stronger results in chicken, pork and international, partially offset by lower beef results."
But the key quote from Tyson Foods' earnings report came from their CEO:
You can read Patrick's full story here .
Speaking of your next meal, new transparency rules will require companies to notify regulators before adding new ingredients to your food. Read on below.
The Day Ahead
📆 Earnings
-- Cardinal Health -- Cava Group -- CoreWeave -- Lumentum -- On Holding
📈 Economic Indicators
The National Federation of Independent Business releases its Small Business Optimism Index for July.
The National Association of Realtors reports existing-home sales for July.
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What Else I'm Watching
FDA orders food-ingredient disclosure. The Trump administration took a partial step Monday toward Health Secretary Robert F. Kennedy Jr.'s promised food-system overhaul, unveiling new transparency rules for food ingredients while again delaying a long-promised definition of ultraprocessed food. Under the proposed federal rule, companies would have to notify regulators before adding new ingredients.
-- What's Changing Under RFK Jr.'s New Food Guidelines
Wednesday's inflation report. The release of July consumer-price inflation figures could be an important factor in whether or not the Fed raises rates next month. The data come after June's inflation data came in below forecasts.
-- What Options Traders Expect After Wednesday's Inflation Report
How AI spending is fueling the economy. Ohsung Kwon, chief equity strategist at Wells Fargo, joins WSJ's Take On the Week to explain how capital expenditures in AI are growing the broader economy and why fears of AI-driven labor market disruption are overstated. Listen to the podcast here.
What Else Matters to CFOs
Nvidia reached deals with some of Wall Street's largest firms aimed at raising massive amounts of capital to help the chip maker's customers finance the cost of computing power, WSJ reporters Jack Pitcher and Anissa Gardizy write .
The chip maker has signed agreements to partner with Apollo Global Management , Blackstone , BlackRock , Brookfield Asset Management , Goldman Sachs and KKR to establish "compute financing platforms," the companies announced Monday. The firms aim to deploy over $500 billion of outside capital in the coming years.
Background and context: Spending commitments on data centers and other AI infrastructure have reached eye-popping levels, and Wall Street's banks and investment firms have been rushing to finance the boom in increasingly creative ways. Nvidia has been in talks with OpenAI to provide a roughly $250 billion backstop for a data-center project, The Wall Street Journal reported last month. And Meta Platforms just partnered with BlackRock for an off-balance-sheet financing for a new data center in Texas. The Financial Times earlier reported the Nvidia financing deal.
📰 Other headlines
-- Anthropic Tries to Shore Up Investor Confidence Ahead of Blockbuster IPO -- Boeing to Fold Its Flying-Taxi Venture Into Rival Archer Aviation -- See How a Tesla-SpaceX Merger Gives Musk a Shortcut to His $1 Trillion Payday -- Five Things to Know About Zuckerberg's AI Manifesto -- How the AI Trade Is Stealing Crypto's Thunder -- Sony Group, TSMC to Form $4.7 Billion Image-Sensor Joint Venture -- Insurance Risks Remain High as Wildfire Threat Rises, Swiss Re Institute Says -- Will Taiwan Fight China? Just Ask Its People -- China's Auto Market Weakens Further on Subdued Domestic Demand -- Is an Average NFL Quarterback Worth $50 Million a Year? -- JBS Heir to Take Over as CEO of Meatpacking Dynasty
📈 Earnings wrap-up
-- Hims & Hers Health Boosts Revenue Target, Swings to Second-Quarter Loss -- Intel to Offer $15 Billion of Common Stock
For more earnings news, click here.
The Big Number
Average expected bonus per employee at Samsung this year , versus roughly half a million at Korean chip maker SK Hynix.
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