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After more than a year behind bars in Russia, Wall Street Journal reporter Evan Gershkovich is free. The release comes as part of an extensive prisoner swap. This deal was a very long time coming, was very complicated, and the president made clear that he had personally worked on it very hard. Plus, food companies have been raising prices for years.
but have their customers reach their limits. It's Thursday, August 1st. I'm Pierre Bien-Aimé for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that moved the world today.
Evan Gershkovich is free. Russia released the wrongly convicted Wall Street Journal reporter as part of the biggest and most complex East-West prisoner swap since the Cold War. Gershkovich and more than a dozen others jailed by the Kremlin, including former Marine Paul Whelan, journalist Alsu Kormasheva, and Vladimir Karamurza, a British-Russian dissident and Pulitzer Prize-winning columnist, were exchanged for Russians held in the U.S. and Europe.
including Russian assassin Vadim Krasikov, who was convicted of murder in Germany. Gershkovich and other Americans were handed over to U.S. authorities at an airport in Ankara, Turkey, and were set to board a plane to the U.S. Russia had kept the 32-year-old behind bars for more than a year on a false allegation of espionage. It sentenced him in a hurried and secret three-day trial to 16 years in a high-security penal colony.
Wall Street Journal editor-in-chief Emma Tucker said the moment Gershkovich walked free from a Russian plane was a great joy for the reporter and his family, and that the publication has set in place a plan to ensure he is properly supported once he returns to the U.S. The journal's publisher, Almar Latour, joined Tucker in a joint statement to, quote,
which orchestrated Evans' 491-day wrongful imprisonment based on sham accusations and a fake trial as part of an all-out assault on the free press and truth." Joining me now is The Wall Street Journal's Paul Beckett, who was highly involved in advocating for Evans' release.
Paul, this was a sweeping deal, 24 prisoners across at least six countries, months of negotiations. How did it come together? We don't know all the details. We started to become more optimistic a few weeks ago when it seemed that the
negotiations had gotten serious. We'd seen a few false starts over the last 16 months. And obviously, because it was so complex, it needed a lot of other governments. So in addition to the US, who were very grateful to us for making this happen, Germany was key. And then you also saw Slovenia, Poland and Norway all help.
This must be quite a relief for Evan's parents and family. It's been a great honor for us to get to know Evan's family over the last 16 months, and you can see where he gets his great reporting chops from.
when you see the extraordinary efforts they went to and the role they played in helping secure their son and brother's release. It's just a wonderful, wonderful thought to think that in a few hours from now, from us talking, Evan will be reunited with them. And Paul, may I ask how you're feeling also? Yes, absolutely.
Jubilant, exhausted, smiles of joy and tears of relief, all at the same time. This morning, our editor-in-chief, Emma Tucker, she spoke to staff and she mentioned how remarkable it was that journalists came together the way they did across news organizations. Yeah, it was across the journal, obviously, but we were just so heartened.
by the response we got from colleagues elsewhere in the media, in organizations that protect the press, in other governments, in institutions that support the free press, and from Wall Street Journal listeners, readers, and the public at large. I mean, really, we're a big platform, but the publicity that surrounded the case, which I think was crucial to its resolution, was really thanks to the support that we got from
outside the journal, and that was massively heartening. We're extremely grateful. What's next for Evan and his family? Yeah, well, for the first time in 16 months, he gets a chance to make decisions about his own life. So that will be entirely up to him. And we will be there with him, but we want him to...
reconnect with the family, reconnect with the free world, and then he can decide what's in his own future. And the fact he makes that decision is one of the great points of today. And it is a happy day, but of course, there are still Americans left behind in Russian prisons.
What can we expect next? Well, we obviously feel for them very strongly. We have a sense of what they're going through. And I hope very much the U.S. can find a way to get them out. I think the key to all of this is really to take away the incentive that Russia and others have for pursuing this detestable practice. So I think the U.S. and allies you'll see over the next year or many years try to figure out how to stop this happening in the first place.
That was Paul Beckett. Paul, thank you for your time and for your work in this effort, which was so important to everyone here at the Journal. Thank you. Thanks to everybody who helped get it done. President Biden spoke from the White House, accompanied by the families of Gershkovich and the others. Now their brutal ordeal is over and they're free. Moments ago, the families and I were able to speak to them on the telephone from the Oval Office. They're out of Russia. Earlier today, they were flown to Turkey.
And soon, there'll be wheels up on their way home to see their families. This is an incredible relief for all the family members gathered here. It's a relief to the friends and colleagues all across the country who've been praying for this day for a long time.
Catherine Lucey covers the White House for The Wall Street Journal. Catherine, the Biden administration must be pleased with how today has gone. Yes, this is a real celebratory White House today. This deal was a very long time coming, was very complicated. And the president made clear that he had personally worked on it very hard. And so I think you heard a lot of relief from Biden and his top officials today that they were able to pull this off.
How did the U.S. leverage its diplomatic relationships to make this deal happen? The president addressed the deal this afternoon from the White House. And one of the things he really stressed was his appreciation for the U.S. allies who worked in this deal. He specifically spoke about the German chancellor. Obviously, the Russian hitman who was serving a sentence in Germany became a key piece
of this deal. But Biden also thanked the other countries who were involved as well and really stressed that this is why alliances matter. This is why allies matter. Also interesting to note that Biden called the prime minister of Slovenia, one of the countries involved in this. Slovenia contributed to convicted Russian spies.
to this swap. He called them on July 21st, about an hour before he notified the nation that he was dropping out of the presidential race. So he has really been working on this extensively, including during a very intense political moment for him. The White House also stressed that Vice President Kamala Harris, who is the expected Democratic nominee in the presidential race,
also played a role in the negotiations to secure this deal. She met with the German chancellor and the Slovenian prime minister back in February when she was at a conference. And officials described those conversations as critical to securing the terms of this deal. That was Wall Street Journal reporter Catherine Lucey.
Former President Donald Trump, who once predicted Evan Gershkovich would not be freed under President Biden, questioned the terms of the prisoner swap in a post on Truth Social, asking for the details of it to be released. Coming up, after years of rising food prices, have consumers reached their limits? That's after the break.
We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn more at AmazonBusiness.com. In corporate news, Intel plans to lay off around 15,000 employees this year and pause dividend payments in the fourth quarter as part of a sweeping cost-saving drive.
The company's chief executive laid out the plan to reduce costs by more than $10 billion next year as the chipmaker reported second quarter sales of $12.8 billion, down 1% and below analysts' forecasts.
Amazon's sales rose in the last quarter, benefiting from its cloud computing unit, which showed steady growth and propelled the company to strong earnings. Total sales rose by 10% from a year earlier to $148 billion. Amazon's profit was $13.5 billion. Its sales were in line with analyst expectations, while its profit was higher than predicted.
And Apple's iPhone revenue fell for a second consecutive quarter, a sign of soft demand in its core business as the company prepares to release new AI features in the fall. iPhone sales declined nearly 1% from the prior year to about $39.3 billion, and overall Apple revenue increased about 5% to $85.8 billion. Both figures beat Wall Street expectations.
In the U.S. stock markets today, major indexes reversed an early climb after a key gauge of manufacturing activity fell deeper into contraction territory, and the Census Bureau said construction spending declined in June for the second straight month, surprising economists who had expected a climb back toward April's record level.
The Dow Jones Industrial Average fell nearly 500 points. The Nasdaq Composite ended 2.3% lower. And the S&P 500 underwent its largest intraday swing since November 2022 and ended down 1.4%. Food companies are working to protect some of the biggest profits they've earned in years, while also giving a break to consumers fed up with high prices. In the past couple years, Americans have spent more on food than they have in three decades.
A Wall Street Journal analysis of company filings shows that in the last fiscal year, the 10 biggest restaurant chains in the U.S. each posted a profit that met or surpassed 2019 levels. And last year, according to the Commerce Department, food companies' quarterly profits hit records. Jesse Newman covers food for The Wall Street Journal, and she joins me now. Jesse, we've seen a lot of earnings reports recently. What kind of picture do they paint about food companies?
Food companies are definitely continuing to report that consumers are still really fed up with high food prices. And the companies as a result are really zeroing in on value and they're just really trying to focus on delivering value to consumers in different ways. For months now, consumers, they've just hit their limits. So they have been buying less,
They have been shifting to less expensive store brands. Products like Chips Ahoy have really been losing market share. And so the food manufacturers, they've seen their sales decline because people are just resisting the higher prices.
And the same is true at restaurants. You know, restaurants have been reporting a decline in their same store sales. Many of them have been reporting much weaker foot traffic as people decide it's just too expensive for them to eat out. What are the companies doing about it? Companies have been, up until now, saying that they've raised their prices to offset their own higher costs.
But now they're saying that they are going to start to lower some of these prices for consumers through things like deals and promotions. They're also rolling out new products to try to bring people in through innovation. So companies, you know, we had Mondelez this week talk about how they've got these new special edition Star Wars themed Oreos that they're coming out with. And Kraft Heinz talked about their new Super Mario Brothers shaped mac and cheese. And so you've got
Burger King and McDonald's that are offering these limited time $5 deals that they're hoping will bring people back into their stores. Recently, food companies have benefited from declines in some of the costs related to labor, ingredients, and transportation.
Will these savings pass on to consumers? Well, the lower costs that food companies are facing is helping them maintain their profitability. They have booked profits that are well above pre-pandemic levels. And for food manufacturers, their gross margins either decrease
They're near or at pre-pandemic levels. And the same is true with restaurants. Many of them have seen really strong profit margins. And they're saying that affords them the opportunity to now reduce prices through promotions and discounts. And that gives them a little bit of wiggle room to make these investments in their brands. Many of the companies reporting said that consumer behavior in the current quarter seems to be not that different from that in the previous one.
What can we expect going forward? So I think you're going to see a lot of food companies trying a lot of different things to bring customers back into their restaurants, to bring consumers back to their brands, you know, consumers who may have defected to cheaper brands. You're going to see a lot more, a lot of discounts. You're going to see a lot of featured displays. You're going to see more new products.
and just all sorts of deals from restaurants as they really try to get consumers to keep or return to their food. And I think the big question is what impact that's going to have on profitability. So as we talked about, food companies have seen some of their best profitability in years. And the question is, can they offer consumers lower prices while still protecting their bottom line? That was Wall Street Journal food reporter Jesse Newman.
And finally, from heat waves to flooding rains, there's been a lot of extreme weather this summer. How have you been affected by extreme weather? And what questions do you have about what companies are doing to counter those effects? Send a voice memo to WNPOD at WSJ.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show.
And that's what's news for this Thursday afternoon. Today's show was produced by Anthony Bansi with supervising producer Michael Kosmides. I'm Pierre Bien-Aimé for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.
We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn more at amazonbusiness.com.