Trouble in Tinseltown… Warner Bros. Discovery cut its annual profit forecast as the Hollywood strikes continue with no end in sight. Writers have been on strike for four months, and actors have been picketing since July. Now HBO owner Warner is targeting full-year adjusted earnings of about $11B, down by $500M, if the strikes continue through this year. Although Warner is still benefiting from the smash success of "Barbie," the Looney Tunes legend had hoped a deal would be reached by early this month. 

• No deal: Studios finally offered up a new deal for writers last month, featuring better pay and more transparency around streaming, but reps for the Writers Guild were unimpressed.

• No action: Production of hit TV series like "The Last of Us" has been on ice and blockbuster releases like "Dune: Part Two" have been delayed.

• No season: If a deal doesn't happen soon, the 2023-24 television season and big flicks could be delayed or canceled. The Emmys have already been postponed. 

INT. EMPTY SET — DAY… The strikes have cost California's economy $5B and last month alone led to the loss of 17K jobs. But while studios expect revenue hits from the strikes, some are reporting cost savings (no production = no production costs). Netflix is now projecting $5B in free cash flow because of the strikes — up by $1.5B from its previous estimate. Disney expects to spend $3B less on content this year, partly because of the strikes. Even Warner raised its annual cash-flow outlook after the strikes "saved" it $100M last quarter.

You can't survive on stockpiles forever… Studios, and especially streamers, are still chugging along thanks to a pantry full of older content (past "Suits" episodes, which are currently in Netflix's Top 10, are like shelf-stable canned peas). They're saving $$, but eventually consumers will start demanding fresh food (aka: new content). Investors want to see actual growth — not just savings that result from production companies not producing anything.

Pumped up… Gas prices hit their highest seasonal level in over a decade after Saudi Arabia and Russia said they'd continue to curb oil production through December. They'll trim production by a combined 1.3M barrels/day, or ~1% of global supply. Major oil-price benchmarks jumped to their highest levels of the year, while the average price at US pumps rose to $3.81/gallon, the second-highest level since 1994. The TL;DR: it's not a great time to go on a road trip.

• Running on E: The US keeps a stockpile of oil to ease rising prices when supply is tight, but after President Biden tapped a record amount last year following Russia's invasion of Ukraine, the reserve is sitting at a 40-year low.

Tapping liquid gold… Both Saudi Arabia and Russia are members of OPEC+, a group of oil-producing nations that pledged earlier this year to prop up oil prices by curbing supply. Saudi Arabia started cutting in July as it tries to fund an economic overhaul. Meanwhile, Russia's seeking $$ to fund its war on Ukraine. The US and UK banned Russian oil and gas imports, while the EU has been reducing its reliance on Russia. To make up for it, Russia has been selling discounted gas to China and India, which now depends on Russia as its No. 1 source of crude. But demand from China (fossil fuel's biggest customer) has weakened as its economy struggles.

The soft landing could get bumpy… Inflation has been steadily cooling, raising hopes for an end to rate hikes and no recession. But since oil prices affect so many industries (think: shipping your Amazon order of TP), some worry rising prices will stoke inflation — and not just at the pump.