0:00

The Claude III model family

0:02

by anthropic is your one-stop

0:04

shop for enterprise AI. Haiku

0:06

is lightning fast and cost

0:08

effective. Sonnet strikes the perfect

0:10

balance between skills and speed.

0:12

And Opus sets new industry

0:14

benchmarks for intelligence. Learn more

0:17

at anthropic.com/Claude. The

0:21

Supreme Court hands down a decision on

0:23

social media censorship and accidentally

0:26

leaks another on abortion. And

0:28

the White House wants to keep gas prices

0:30

down. Can it do that while

0:33

also keeping the squeeze on Russia, Iran and

0:35

Venezuela? It is hard to be

0:37

tough on these adversaries in a real tangible

0:39

way without disrupting oil markets and driving energy

0:41

prices up. Plus, how

0:43

investors will soon be able to place

0:45

legal bets on the latest economic reports.

0:48

It's Wednesday, June 26. I'm Pierre Bienemay for

0:50

The Wall Street Journal. This is the PM

0:53

edition of What's News, the top headlines and

0:55

business stories that moved the world today. Let's

1:04

start with the Supreme Court, which

1:07

today rejected a lawsuit claiming the

1:09

Biden administration censored social media. The

1:11

suit, led by Republican state attorneys

1:14

general in Missouri and Louisiana, claimed

1:16

executive branch officials pressured digital platforms

1:18

to censor conservative speakers. They

1:21

alleged that that campaign reached a fever pitch

1:23

in 2021 after President

1:25

Biden took office and sought to promote

1:27

COVID-19 vaccines and

1:30

counter former President Donald Trump's claims that

1:32

the election was rigged. In

1:34

a 6-3 decision that crossed ideological lines,

1:36

the high court said the plaintiffs failed

1:38

to show they were directly harmed or

1:41

faced the risk of future harm by those

1:43

alleged actions. The social media

1:45

companies, which are not parties to the case,

1:47

have long rejected claims of liberal bias. Separately,

1:51

the Supreme Court appears ready to

1:53

let emergency abortions be performed in

1:55

Idaho. That's according to a draft

1:57

version of a decision the court accidentally posted.

2:00

on its website today and then

2:02

quickly removed. Bloomberg News discovered the

2:04

posting. Idaho state law forbids

2:06

the procedure except when it's necessary to save

2:08

a woman's life. The Biden

2:10

administration sued the state, arguing that

2:12

federal law is more permissive and

2:15

authorizes emergency abortions to stabilize a

2:17

patient in a health crisis. The

2:19

Supreme Court issued a statement saying that no

2:21

decision was final. The

2:26

most expensive House primary in US history

2:28

came to a close yesterday. As

2:31

we covered this morning on the podcast, Jamal

2:33

Bowman, a member of the so-called Squad of

2:35

Progressive Lawmakers, lost in New

2:37

York to Westchester County executive George Latimer.

2:40

Interest groups with deep pockets and positions of

2:42

all sorts spend money on elections. And

2:45

in Bowman's case, he was up against millions

2:47

of dollars in advertising tied to the American

2:50

Israel Public Affairs Committee, or APAC. And

2:52

he blamed the pro-Israel group for his loss. So

2:55

what's next for APAC? Natalie Andrews

2:57

covers Congress for the Wall Street Journal and

2:59

says the group now has other progressives in

3:02

its sights. The next real

3:04

target for a primary is Cori

3:06

Bush in St. Louis. This

3:09

is also a member of the Squad who came in

3:11

in 2021. She

3:13

is a progressive. She's been very critical of

3:15

some of her colleagues. And

3:17

she's also under investigation by the Department

3:20

of Justice and has a formidable

3:22

challenger, which is something that these groups

3:25

look for. They can't just go into

3:27

a race and make it competitive. But

3:29

if they see a race that has

3:31

an opening that could be competitive, if

3:33

they spent a little bit of money,

3:35

if they introduced voters to the formidable

3:37

opponent through ads and mailers and messaging,

3:39

that's what these groups are looking for.

3:42

And the Bush race is

3:44

one that they have their eyes on. Speaking

3:47

of politics, what do you want to know

3:49

about how the Wall Street Journal is covering

3:51

the presidential election and other races around the

3:53

country? WSJ Editor-in-Chief Emma

3:55

Tucker will be answering your questions

3:58

on an upcoming episode. Send

4:00

a voice memo to wnpod

4:02

at wsj.com or leave a

4:04

voicemail with your name and location at 212-416-4328. We

4:10

might use it on the show. The

4:14

price of gas at the pump is pretty

4:16

important in an election year. The

4:19

Biden administration wants to keep fuel costs stable

4:21

ahead of the vote in November, including

4:23

by encouraging oil to flow into global

4:25

markets. But that effort

4:28

runs squarely into another priority for the

4:30

White House, being tough on

4:32

oil-producing rivals like Russia, Iran, and

4:34

Venezuela. Anna Hertenstein covers markets

4:37

and geopolitics for the Wall Street Journal. Anna,

4:39

what's the balancing act here? So balancing

4:41

act is a perfect description for the

4:43

situation. On one side, you

4:46

have an administration that's seeking re-election, and

4:48

they're very focused on bringing down inflation. And

4:51

gas prices are a big part of this.

4:53

But on the other side, you have conflict

4:55

with countries like Russia, Iran, and Venezuela. Tensions

4:58

rising where the US wants to show strength. But

5:00

these countries are also oil producers. And this

5:03

is where these two sides of the balance

5:05

clash. It is hard to

5:07

be tough on these adversaries in a real

5:09

tangible way without disrupting oil markets and driving

5:11

energy prices up. Can you

5:13

give me an example? So one that

5:15

I find really interesting is the fact

5:17

that we hear that Washington encouraged Ukraine

5:19

to stop attacking some Russian refineries with

5:21

their drones. And that's specifically

5:24

refineries that are more export focused rather

5:26

than those that supply the domestic market

5:28

there. And this is because damages to

5:30

those refineries were affecting global diesel and

5:33

gasoline markets that are driving prices up

5:35

internationally. Yeah, and it's not just about

5:37

warfare, of course. There are also sanctions

5:39

in play. Of course, the US has

5:41

sanctioned Russia, Iran, and Venezuela. But

5:44

in all these cases, they've been very careful not

5:46

to actually affect the amount of barrels that

5:48

are coming to market. They've been

5:50

trying to reduce the revenues that these countries

5:52

are earning from the oil they're producing. This

5:54

is specifically in the case of Russia, especially.

5:57

And they put out new sanctions on Iran just yesterday.

6:00

today. However, these sanctions are

6:02

pretty light touch, according to analysts. It's

6:04

very much about trying to disrupt

6:06

the supply chain rather than actually affecting the amount

6:08

of oil that's coming to market. Is

6:10

anyone criticizing the White House for pulling

6:13

its punches? So we are hearing

6:15

that there is some criticism within the administration for

6:17

not doing more. There's some people

6:19

that wish there could be doing more, particularly to

6:21

crack down on oil trading networks that work with

6:23

Russia. And what does the Biden administration

6:25

have to say about its approach? So

6:28

the administration contends that these two sides

6:30

of the Balancing Act are actually complementary.

6:32

They say that they're working simultaneously to

6:34

keep energy prices low for Americans and

6:37

also reduce revenues for these oil producers

6:40

that they're sanctioning. So it's

6:42

definitely there's some nuance to this issue. But I

6:44

think you also have to remember that oil exports

6:46

are the lifeblood industry for these countries. This

6:48

is how these governments make most of the money. This

6:50

is how the Kremlin is financing the war in Ukraine,

6:52

for example, largely. So you also have to ask, like,

6:55

what is the long term goal here? That

6:57

was Wall Street Journal reporter Anna Hertenstein. Coming

7:00

up, care to make a bet on the

7:03

next jobs report? Pretty soon you'll be able

7:05

to do it legally, but not without risk.

7:07

That's after the break. What

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Let's create. In

7:46

world news, a quick update on this morning's

7:48

show. We told you about the

7:51

deadly protests in Kenya against possible tax increases.

7:53

Today, the country's president, William Ruto, said

7:56

he would withdraw the proposed law and

7:58

seek new austerity measures instead. And,

8:01

in the world of business, Southwest Airlines has

8:03

cut its revenue guidance for the current quarter

8:05

by roughly 4%, citing

8:08

difficulties in adapting to shifts in passenger

8:10

booking patterns. The airline is also dealing

8:12

with delays in Boeing plane deliveries that

8:14

have left it with bloated overhead and

8:16

that have complicated its growth plans. Bedding

8:22

on your cards at the casino or

8:24

on the results of a sports game is

8:27

one thing. But what if you could place

8:29

wagers on the latest economic report? We

8:32

report exclusively that the trading platform

8:34

Interactive Brokers Group is launching contracts

8:36

for customers to take yes or

8:38

no positions on questions like whether

8:40

the Consumer Price Index or national

8:42

debt will hit a certain number.

8:44

Hannah Meow covers finance for the Wall Street Journal. She

8:47

broke the story for us and she joins me now. Hannah,

8:50

how are these bets, these contracts, supposed

8:52

to work? The contracts

8:55

are based around a question

8:57

such as, to take the

8:59

CPI for example, will the

9:01

CPI surpass X number?

9:05

And users can buy either a yes

9:07

contract, yes it will surpass that number,

9:09

or no it won't, and

9:12

the price of those contracts will range between 2

9:14

cents to 99 cents and it depends on

9:18

basically demand how much people are willing

9:20

to pay for that contract. And

9:23

once the event concludes, or in the

9:25

case of the CPI for example, once

9:28

the results are reported, then the

9:30

contract that is correct will be

9:32

worth $1 and the contract

9:35

that is incorrect is worth nothing. You'll

9:37

also be able to bet on

9:39

climate related indicators such as the

9:41

temperature of the US, global temperature,

9:43

and atmospheric carbon dioxide levels. So

9:45

it's not just the economy and

9:47

they're hoping to expand that to

9:49

other topics as well in the

9:51

future. Is the platform up and running again?

9:54

So the prediction market, which is called

9:56

Forecast X, is set to begin operating

9:58

on July 8th. and

10:01

Forecast X actually just recently received

10:03

all the necessary approvals from the

10:05

Commodity Futures Trading Commission to operate.

10:08

So the reason why they need to get

10:10

CFTC approval is because these contracts

10:12

actually aren't securities such as a share of

10:15

a company, but they're a new type of

10:17

derivative. In fact, we've seen a rise

10:19

in a lot of kinds of betting in

10:21

recent years, sports betting. Most US states now

10:23

allow that and the journal also

10:26

recently covered a platform where you can bet

10:28

on political stuff like the outcome of the

10:30

presidential election this November, though that

10:32

could be facing a ban. Are we

10:34

seeing more legal event-based betting in general?

10:37

We've definitely seen an increase in event

10:39

contracts recently. It's a relatively small market

10:42

compared with stocks or futures, but since

10:44

the pandemic, it's really grown in popularity.

10:46

There's a trading startup called CalShe that

10:49

launched in 2021 and they offer a

10:51

number of event contracts, not just around

10:53

the economy or business news, but also

10:55

things like how long Taylor Swift's latest

10:58

album will be at the top of

11:00

the charts. They have pop culture and

11:02

current events contracts as well. And

11:06

according to the CFTC, there were more event contracts listed

11:08

for trading in 2021 than in the prior 15 years

11:10

together, and the number has

11:13

only grown since then. Betting against Taylor Swift, yeah,

11:16

that couldn't be me. In fact, is anyone coming

11:18

out against this kind of betting? It feels perhaps

11:20

a little risky. Yeah, so the

11:22

risky nature of this bet is,

11:24

of course, if you take the

11:26

wrong side of the bet, then

11:29

you could lose all of the

11:31

money you invested. So that definitely

11:33

is something to note if you're

11:35

interested in trading these. The CFTC

11:37

has proposed regulation to ban certain

11:39

event contracts around things like political

11:41

elections, athletic competitions, and award contests.

11:44

Of course, the concern is always on

11:47

actors trying to manipulate the outcome of

11:49

events based on some of the betting

11:52

that's allowed in these. So

11:54

there's definitely some efforts to put guardrails on

11:56

these types of contracts. People

12:00

who believe they are important and

12:02

beneficial to investors, they think that

12:05

these contracts offer a way to

12:07

hedge your portfolio or buy a

12:10

type of insurance against an event

12:12

happening. And it

12:14

also offers a way to show what

12:16

the consensus view is. People are literally

12:19

putting their money where their mouth is,

12:21

and so you can kind of see

12:24

what the market is pricing in for a probability

12:26

of an event occurring. That was

12:28

Wall Street Journal finance reporter Hannah Miao. And

12:31

let's wrap things up with a look at more

12:33

traditional markets. The Nasdaq closed up

12:36

a half percent after a jump in tech

12:38

shares pushed it higher for a second straight

12:40

day. Apple and Meta notched

12:42

gains, as did Amazon, making it

12:44

the fifth company to cross a $2 trillion

12:47

valuation. There were even

12:49

bigger swings in the currency market. The Japanese

12:51

yen tumbled against the dollar, heading for its

12:53

lowest settle since 1986. And

12:58

that's what's news for this Wednesday afternoon. Today's

13:00

show was produced by Anthony Bansey with

13:03

deputy editor Chris Sinsley. I'm Pierre

13:05

Bienemay for the Wall Street Journal. We'll be back with

13:07

a new show tomorrow morning. Thanks for listening.

13:17

The Claude Three Model family

13:19

by Anthropic is your one-stop

13:21

shop for enterprise AI. Haiku

13:23

is lightning fast and cost

13:25

effective. Sonnet strikes the perfect

13:27

balance between skills and speed.

13:29

And Opus sets new industry

13:31

benchmarks for intelligence. Learn more

13:33

at anthropic.com/ Claude.