Breitbart Business Digest: Mice, Men, and Inflation

There’s blood on the floor of the Mouse House throne room.

Peter Rice, the most senior television content executive at Disney, was abruptly and unexpectedly fired on Wednesday, according to reports from Deadline and CNBC. Rice was chairman of Disney General Entertainment Content, a division of the company that makes more than 300 shows annually for platforms like ABC, the Disney Channel, Disney+, Hulu, and FX. According to CNBC, he was caught unaware by his ouster by Disney chief executive Bob Chapek.

It has long been standard practice for big businesses to part quietly with top executives. They’re always going to spend more time with their families or develop new projects or some other implausible excuse that everyone half-pretends to believe.

This is not the case with Disney and Rice. Their relationship is ending noisily and messily. Chapek reportedly told Rice he wasn’t a cultural fit at Disney. CNBC reported that the Chapek had decided Rice “didn’t work collaboratively with others and was more interested in controlling his own fiefdom,” which is a pretty damning account.

Rice arrived at Disney after working many years at Fox, where he was supposedly close to Rupert Murdoch. When Murdoch sold Disney the entertainment division of Fox, Rice was one of the few top executives to make the switch. There have been rumors that some Disney folks did not like working under someone so close to Murdoch or someone who spent so long at Fox. But Rice has never shown any outward evidence of being to the right of the usual Hollywood left crowd, so we would hesitate to assume politics played a role here. In March, for example, Rice told The Hollywood Reporter that he viewed the anti-grooming legislation in Florida as “a violation of fundamental human rights.”

Disney shares slightly underperformed the broader indexes today.

The Inflation Test: How Much Stag? How Much Flation?

Tomorrow we will get the Bureau of Labor Statistics’ report on consumer prices in May as well as the preliminary read on consumer sentiment from the University of Michigan.

The Consumer Price Index (CPI) is expected to be up 8.2 percent compared with a year ago and 0.7 percent compared with the prior month. The monthly figure would be an acceleration of inflation while the annual figure would show a slowdown. The monthly acceleration is partly due to gas prices, which make up around six percent of CPI and rose sharply in May after cooling in April. The annual figures are now working off a higher base. Prices were already up five percent year over year in May of 2021.

Excluding food and energy, prices are expected to show a rise of 5.9 percent on a year-over-year basis and 0.5 percent annually. This would be a deceleration from April and likely interpreted as a sign that inflation actually did peak in March.

There’s some evidence that the jobs market has cooled off from the molten level seen back in March. New claims for unemployment benefits rose to 229,000 last week, a much more normal level than the tiny numbers we were seeing earlier this year and above the forecast. The four-week moving average jumped to 215,000, also above the consensus expectation.

Consumer sentiment is expected to hold at its end-of-May level, although we would not be surprised to see a further decline due to high prices, especially gas prices. Because gas prices are highly visible, they tend to punch above their weight when it comes to the psychology of American households. Probably only groceries rival gas when it comes to sentiment.

The arrival of both these numbers sets up lots of possibilities for surprises. Higher than expected inflation and worse than expected sentiment will rev up worries about stagflation. Lower inflation and better sentiment will likely trigger a euphoric market reaction. The late Thursday market action—big sell-offs in stocks, Dow down 600+, all 11 sectors of the S&P down—certainly does not imply much hope for the latter.