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After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

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Data: Business Roundtable; Chart: Axios Visuals

The breakneck pace of corporate hiring may slow in the coming months — but the overall economy remains solid. That's the takeaway from a new survey of America's leading chief executives shared first with Axios.

Why it matters: The view from the corporate suite — revealed in the Business Roundtable's quarterly CEO economic outlook survey — is of an economy that can come off its inflationary hot boil without the plunging sales and mass layoffs seen in recessions.

State of play: The overall index of CEO expectations edged down to 76, comfortably above 50 (the line between expansion and contraction) but below its long-term average of 84.

It's the underlying details that are more interesting:

The executives' expectations for sales were unchanged from Q1, and their capital spending plans actually ticked up. That's not what you expect to see in a recession.

Moreover, softer hiring plans weren't driven by rising enthusiasm for layoffs. The share of CEOs who expect their U.S. employment to decrease in the next six months was unchanged from Q1, at 27%.

Rather, fewer of the CEOs envision increasing their headcount — 33% now compared to 41% last quarter.

Between the lines: The era of businesses hiring every warm body they can find looks to be coming to an end. But top executives envision a period of muddling along with slow growth, rather than outright contraction.

They expect 1.5% GDP growth this year, a tick up from their expectation three months ago.

What they're saying: With a potential debt limit crisis averted in a manner unlikely to cause significant economic damage — just what business leaders wanted — they are turning their policy attention to things like negotiations over permitting reform to speed infrastructure and energy projections.

"Action by Congress and the Administration to raise the debt ceiling was a welcome signal from Washington that bipartisan agreement at a consequential moment is achievable,” says General Motors CEO and Business Roundtable chair Mary Barra.

"Business leaders stand ready to work with lawmakers to advance policies that strengthen the economy and American competitiveness."

The bottom line: After 18 months of nonstop recession chatter, a soft landing just may be in sight.

Exclusive: CEOs increasingly foresee a "soft landing" for the economy

Companies are expanding their spending plans — that’s not recessionary.

Economy

Media Deals

This fall might be a great time to catch up on your streaming list — Hollywood has one union on strike, and studios are facing more labor strife that could result in further shutdowns this summer.

Why it matters: The streaming era has fundamentally broken the industry, and that has Hollywood's biggest unions united to a degree we haven't seen in decades.

State of play: The Alliance of Motion Picture and Television Producers, which represents the studio side in union negotiations, is trying to use the same playbook it did to end the last writers strike in 2007-08:

Cut a deal with the Directors Guild of America (DGA) — the most studio-friendly of the three unions — and use that as a framework for the other deals.

It executed the first act when the studios agreed to a deal with the DGA, just days before today's start of talks with the Screen Actors Guild (SAG-AFTRA).

Yes, but: The DGA deal has failed to tamp down the heated rhetoric. Multiple members of the Writers Guild of America, which represents about 11,500 TV and movie writers, expressed either nonchalance or outright anger at the news of the deal.

Meanwhile, SAG-AFTRA members overwhelmingly voted to authorize a strike of its own should it not reach a deal by the end of the month.

"We are collaborating together more than we ever had in the past," Duncan Crabtree-Ireland, executive director for SAG-AFTRA, tells Axios. "There are a lot of issues we have in common — and even on issues where we don't — we want to support each other."

Zoom in: The rise of Netflix and other streamers has upended traditional Hollywood business practices.

Streaming has also proven to be far less lucrative than expected, which has investors calling for reduced spending, which is trickling down to the rank-and-file workers. 

Additionally, the rapid growth of AI is a particularly thorny issue for both writers and actors.

Zoom out: It's not just Hollywood that's embroiled in media labor battles either.

In the past two years, unions at G/O Media, Ziff Davis, Wirecutter, the Miami Herald, the Pittsburgh Post-Gazette, the Palm Springs Desert Sun, the Washington Post, NBC News and others have engaged in strikes or walkouts. Unions at the New Yorker, Vox Media and Wired threatened strikes but ultimately resolved their disputes with management.

Insider and Gannett walked off their jobs on Monday.

"There is a very supportive vibe for workers. I think people are understanding that actors are workers just like all other workers in this industry and in every industry. They really realize that what's happening here is major, giant corporations are just not treating their workers with respect," Crabtree-Ireland said.

The bottom line: Enjoy those new shows and movies while you can, you could be reduced to reruns when the leaves turn brown.

Hollywood's hot strike summer

Hollywood’s biggest unions are united in ways they haven’t been in decades.

Illustration of the Hollywood Walk of Fame with one of the stars as a closed fist with a "no" icon 

Hollywood

The U.S. Securities and Exchange Commission (SEC) on Tuesday asked a federal court for a temporary restraining order that would freeze the assets of crypto exchange Binance's U.S. affiliate. 

Why it matters: The motion comes a day after the securities regulator sued the company for illegally operating an exchange, among other charges. 

What they're saying: "The SEC respectfully submits that this relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment," the commission wrote in its filing.

The intent to seek the asset freeze was noted in the regulator's complaint Monday.

The other side: "The filing of the preliminary injunction is unwarranted and based more on the SEC Staff obtaining an advantage in litigation versus genuine concern about the safety of customer assets. Until recently – despite years of engagement – the SEC Staff has not expressed a concern about the safety of customer assets," Binance.US said in a statement. 

Details: The order stems from the SEC's allegations that, unlike the company's representations to the public and government, Binance had a close relationship to its U.S. affiliate and CEO Changpeng Zhao oversaw the business's operations. 

The SEC also accused the parent company of accessing U.S. customers' funds. 

A related filing asks that Binance's U.S. affiliate bring back and secure all customer assets in accounts not accessible to other parties.

Editor's note: The story has been updated with a statement from Binance.US. 

SEC asks court to freeze Binance's U.S. assets

The filing comes one day after the SEC sued the crypto exchange.

Illustration of the SEC seal's shadow looming over a pixelated coin. 

Cryptocurrencies

First, the Hamburglar. Now, it's Grimace.

Driving the news: McDonald's is digging into its past, this time turning the spotlight on its iconic purple character with the June 12 release of the Grimace Birthday Meal, a limited-time meal that includes a purple shake.

The big picture: The fast-food giant’s special meals — from its 2022 adult Happy Meals to collabs with celebrities like Travis Scott, BTS and Mariah Carey — have helped drive restaurant sales and create demand.

Zoom in: The adult Happy Meals released last October started selling out immediately and included a Cactus Plant Flea Market Box and one of four collectible toys with Grimace and Hamburglar as toy options.

Many toys were listed on eBay and a search on the online marketplace for Cactus Plant Flea Market toys brought up more than 3,600 listings.

When McDonald's launched the Travis Scott Meal in September 2020, it led to nationwide ingredient shortages.

What they’re saying: Tariq Hassan, McDonald’s USA chief marketing and customer experience officer, said in a statement that the company was excited to put a “modern spin” on Grimace memories to continue “to drive McDonald’s relevance with a new generation.”

The fast-food giant said it will release the special meal and purple shake starting Monday at participating restaurants nationwide in honor of Grimace's 52nd birthday. 

The meal will be available while supplies last and pricing varies by location, McDonald's said.

Details: The meal includes the choice of a Big Mac or 10-piece Chicken McNuggets, a medium side of fries and a medium Grimace Birthday Shake.

McDonald’s also is releasing a free video game and a Grimace-inspired merchandise line that will go on sale June 12.

McDonald's confirmed to Axios that the shake is berry flavored and "inspired by Grimace’s iconic color and sweetness."

The shake can also be had sans the meal if ordered at restaurants. The meal is also available in McDonald’s App, drive-thru and delivery.

Of note: It's the first time the chain has offered a Grimace Birthday Shake, but it did have a purple shake made with purple sweet potatoes in Japan in 2018.

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Cactus Plant Flea Market Box and one of four collectible toys

McDonald’s to release Grimace meal with purple shake

McDonald's is celebrating Grimace's 51st birthday with a special meal and berry-flavored shake.

Gifts around a table with McDonald's Chicken McNuggets, a purple shake, Big Mac and fries

McDonald's is releasing a Grimace Birthday Meal and Grimace Birthday Shake. Photo: Courtesy of McDonald's

McDonalds

While one regulator continues its attempt to bring the crypto industry to heel by penalizing it, another regulator is emerging to take a different tack, and seize authority over digital assets. 

Driving the news: Hours after Coinbase was sued by the Securities and Exchange Commission for breaking market rules, a House committee hearing on a discussion draft legislation for the regulation of digital assets kicked off.

Zoom in: Commodity Futures Trading Commission Chair Rostin Behnam, answering questions from the committee, nodded to the lack of clarity around digital assets that necessitated the regulatory framework in discussion.

Of note: He stopped short of commenting on the SEC's recent token analyses at the heart of the securities regulator's respective lawsuits against Binance and Coinbase.

Asked whether he agreed with it, Behnam demurred, pointing to pending litigation, but said: "This is why we're here," and "there is confusion."

The big picture: Crypto's biggest gripe is the lack of clarity around which tokens are securities, and which commodities — a taxonomy that regulatory agencies disagree on, crypto firms say.

Catch up quick: The SEC named 13 cryptocurrencies that Coinbase lists for trading in its suit this morning that the regulator considers securities, which the regulator often does when it brings enforcement actions against crypto firms.  

The intrigue: "Hopefully we can resolve some of these differences in the future," Behnam said, referencing the SEC's position, reiterating the CFTC's stance that ether, for example, is a commodity.

Be smart: While the CFTC and the SEC wrestle for authority over regulating digital assets, they often say they aren't necessarily at odds, as the two regulatory agencies often work together.

What we're watching: Chair Benham estimated it would take one to two years to implement joint rulemaking if the agency received more funding, and double that time, without. 

Benham said the CFTC would need $120 million in additional resources over three years to build rulemaking teams. 

That would be roughly 10% more than its current annual budget of $365 million. 

What others are saying: Meanwhile, Coinbase's legal counsel Paul Grewal per his prepared remarks for the hearing, said: 

Congress needs to draw the lines between when digital assets "should be regulated as commodities, when they should be regulated as securities, and when financial regulations should not apply or simply would make no sense."

The bottom line: "This bill would be a major step in creating a clear rulebook that will make crypto safer for all Americans and help ensure the US continues to lead on technological innovation," he said.

SEC sues largest U.S. crypto exchange, Coinbase

SEC sues crypto giant Binance and its CEO

Draft legislation outlines regulatory clarity for crypto

CFTC chair cites lack of clarity in need for new digital assets bill

"This is why we're here," CFTC Chair Rostin Behnam told a Senate Committee hearing today.

CFTC Chair Rostin Behnam testifies before House Ag Committee hearing. Photo: Ting Shen/Getty

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Media Trends

Axios Media Trends

CNN is on edge following a chaotic weekend of media reports and headlines suggesting CEO Chris Licht's days at the network are numbered. 

Why it matters: The network was already under enormous stress following years of corporate mergers, product pivots and evaporating cable viewership. 

The latest saga calls into question how prepared the network will be to cover the 2024 elections — typically its most lucrative programming opportunity — and whether it's prepared for the eventual collapse of the cable bundle. 

By the numbers: CNN brought in roughly $750 million in profit last year, down from the $1 billion+ it brought in for each year between 2016 and 2020, the New York Times has reported and sources have told Axios. 

Part of that decline in profit can be attributed to the dismantling of CNN+.

CNN is today likely valued at far less than it was worth in late 2020, when CNN's former boss Jeff Zucker tried to explore a deal to sell the network.

That conversation, which was reported on by the New York Times and confirmed by Axios, would have valued the network at roughly $10 billion, two sources said. 

Sources at CNN parent Warner Bros. Discovery said the company has no interest in spinning off CNN at this time. 

The big picture: Morale at CNN is low, but the stress is bigger than conflicts over Licht.

Streaming: The dismantling of CNN+ last year, just three weeks after it launched, left staffers anxious about how the network will manage the transition to streaming once the cable bundle inevitably collapses. 

Two sources told Axios that executives are having active discussions about how to add some of CNN's content onto Warner Bros. Discovery's streaming service, Max, without violating any distribution contracts with cable carriers. 

Digital: Despite drawing a massive online audience, the company has struggled to build products to adequately monetize those viewers. Digital accounts for roughly 10% of the company's overall profits, a source said. 

Editorial direction: There's concern from some staffers that Warner Bros. Discovery is trying to fix a newsroom that isn't broken, former CNN chief media correspondent Brian Stelter reported. 

What to watch: Warner Bros. Discovery executive David Leavy, a longtime confidant of CEO David Zaslav, was named chief operating officer of CNN last week, the day before The Atlantic published a revealing profile of Licht. 

Licht apologized to CNN staffers on an editorial call Monday and said, “I should not be in the news unless it’s taking arrows for you,” a source on the call told Axios.

Leavy, the network said, will assume responsibility over commercial, operational and promotional activities at CNN. 

He is expected to make changes to the company's public relations department in the coming weeks, a source said. Semafor reported that Leavy plans to move CNN's PR team under his purview imminently. 

Disclosure: The author is a CNN contributor.

Chaos looms over CNN

The latest saga calls into question how prepared the network will be to cover the 2024 elections.

Photo: Jaap Arriens/NurPhoto via Getty Images

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Axios Pro Rata

Sequoia Capital is returning to its roots, announcing on Tuesday that its China and India affiliates each will become independent entities.

Why it matters: Sequoia is one of the world's oldest venture capital firms, and arguably its most successful.

Backstory: The firm was founded over 50 years ago in Silicon Valley, backing such companies as Apple, and made its first international foray with an Israeli fund during the dotcom boom. 

Sequoia Israel was ultimately discontinued, but the firm entered China in 2005 and the next year launched in India via the purchase and integration of a local firm called Westbridge Capital Partners. In 2020, Sequoia put its first partner on the ground in Europe. 

The China and India efforts were quasi-independent and led by homegrown investors, reflecting the hard lessons other Silicon Valley firms had learned from failed experiments of relocating U.S. partners overseas.

Sequoia's structure was successful, but eventually led to some portfolio conflicts, strategy differences and non-U.S. teams thirsting to be truly independent. Not surprisingly, neither Sequoia China nor India were part of the parent firm's giant portfolio reorganization in late 2021.

Also playing a factor in the split decision were rising geopolitical tensions between the U.S. and China, although that appears to have been more of a contributing factor than a primary driver.

Details: The decoupling, or detripling as it were, is expected to be completed by March 31, 2024. 

The U.S. and Europe business will retain the Sequoia Capital brand, while Sequoia Capital China will be rebranded as HongShan and the Sequoia India business as Peak XV Partners.

Behind the scenes: My understanding is that Sequoia partners have long made personal investments in Sequoia funds outside of their own region, such as a Menlo Park-based investor participating in a Sequoia China fund (via a side vehicle that also includes founders, friends and family). Such legacy investments will be retained, but no new ones will be made going forward.

Moreover, word is that all Sequoia partners also have an opportunity to share in a portion of carry from affiliate funds, via a structure more similar to a flow than to a stock. Once that gets trued up to net zero, that profit-sharing will end. 

Once the split is completed, none of the newly independent firms will have any geographic investment restrictions outside of what might be contained in limited partner agreements.

The bottom line: Sequoia may have grown a bit too big for its branches. 

Sequoia Capital splits up

Sequoia is one of the world's oldest VC firms, and arguably its most successful.

Illustration of a pattern of tree rings with the center ring as a dollar bill sign. 

Venture capital

China

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

Coverage of select top-rated show finales

Data: Memo; Note: Readership is defined as the number of unique visitors to an online article in the first seven days of its publication. Articles were pulled from a representative sample of 83 national, business and technology publications; Table: Axios Visuals

The media's obsession with HBO's hit series "Succession" drew outsized coverage of the show that was disproportionate to reader interest, according to new data.

Why it matters: While there's no question "Succession" was a huge hit, the countless spoilers, cast interviews and interpretations of the series may have been driven more by the media's obsession with its own industry rather than consumer interest. 

Details: Data from Memo, a media analysis firm that uses artificial intelligence to monitor online article engagement, found that the "Succession" series finale drew a disproportionate amount of media coverage relative to its readership and compared to other major TV series whose season finales occurred in the last month.

Memo measured the number of articles written about some of the most-watched TV series from the 2022-2023 TV season in the past 30 days (excluding "Yellowstone" and sporting events) and compared that data to "Succession."

Unlike the other four shows in the top five most-watched scripted series of the season, the "Yellowstone" finale didn't occur in the last 30 days and couldn't be accurately used as a comparison. (It's also worth noting that "Succession" had its series finale, not just a season finale.) 

The data found that "Succession" was covered six times more than any other show analyzed, but saw the second lowest average readership of that coverage.

Be smart: The top five most-watched scripted TV series during the 2022-2023 season were Paramount's "Yellowstone," CBS' "NCIS," "FBI" and "Young Sheldon," and NBC's "Chicago Fire," per Variety. 

With the exception of "Yellowstone," which was the only nonsports show to draw more than 11 million viewers on average per week during the season, each show averaged more than 9 million viewers weekly. 

A spokesperson for HBO said "Succession" drew 9 million viewers per episode on average during its last season across all of its platforms, which includes linear television and delayed, on-demand viewing. 

The bottom line: Despite the huge success of "Succession," it remains a somewhat niche series, the New York Times notes. 

Other HBO hits such as “House of the Dragon” and “The Last of Us” averaged roughly 30 million viewers per episode.

Media's "Succession" obsession

The countless spoilers, cast interviews and interpretations of the series may have been driven more by the media's obsession with its own industry rather than consumer interest.

Media trends

Members of the union representing Hollywood actors voted overwhelmingly to authorize a strike against the country's biggest TV and film studios Monday, should the two groups fail to reach a new contract deal by the end of the month. 

Why it matters: If the two sides don't come to an agreement, Hollywood would likely face a two-pronged labor battle. The union representing Hollywood writers began striking last month for the first time in 15 years, sending Hollywood's fall TV schedule into a tailspin. 

That dispute doesn't appear to be headed for a resolution anytime soon. 

Driving the news: A whopping 97.91% of members of SAG-AFTRA (Screen Actors Guild - American Federation of Television and Radio Artists) voted in favor of authorizing a strike, the union said Monday. 

Nearly 65,000 members of the union amounting to roughly 47.69% of eligible voters, participated in the vote. 

SAG-AFTRA will begin negotiations on June 7 with the Alliance of Motion Picture and Television Producers, and it will only authorize a strike if the two sides can't come to a deal. The union's current contract with the studios expires June 30 at midnight. 

In a statement, SAG-AFTRA president Fran Drescher said, "Together we lock elbows and in unity we build a new contract that honors our contributions in this remarkable industry, reflects the new digital and streaming business model and brings ALL our concerns for protections and benefits into the now!"

Be smart: There's hope that the two sides can potentially come to an agreement. 

On Monday, Hollywood studios reached a deal with the Directors Guild of America in hopes of ending the ongoing writers strike. That deal still needs to be approved by the DGA board Tuesday and then ratified by its members. 

Zoom out: The media industry is facing an unprecedented number of strikes and union battles as big companies wrestle with slowing profits and fears about artificial intelligence. 

Hundreds of Gannett staffers walked off the job on Monday, a protest that coincided with the company's annual meeting of shareholders. Union members had been demanding better working conditions and had pushed shareholders, albeit unsuccessfully, to vote to oust CEO Mike Reed. 

More than 250 members of Insider’s newsroom also went on strike Friday amid failed talks with management over a number of contract provisions, including health benefits. 

The big picture: Strikes have become a bigger part of union negotiation tactics in recent years, causing production delays and editorial disruptions. 

In the past two years, unions at G/O Media, Ziff Davis, Wirecutter, Miami Herald, Pittsburgh Post-Gazette, Palm Springs Desert Sun, Washington Post, NBC News and others all engaged in strikes or walkouts. 

Unions at The New Yorker, Vox Media and Wired threatened strikes, but ultimately resolved their disputes with management.

Go deeper: Hollywood studios reach deal with directors in hopes of ending writers strike

Gannett staffers walked off the job on Monday

Media's summer of strikes

The media industry is facing an unprecedented number of strikes and union battles as big companies wrestle with slowing profits and fears about artificial intelligence.

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