Morning Brew Daily - Americans Finally Feel Good About The Economy & RIP Sports Illustrated?

Episode Date: January 22, 2024

Episode 240: Neal and Toby recap the weekend starting with the S&P 500's record breaking benchmark and why Americans are feeling much better about the economy. Then, Sports Illustrated lays off almost all of its staff, marking the end of the once popular magazine. Plus, the hype around Apple’s Vision Pro seems to wane as it’s lacking popular apps for launch. Lastly, the biggest weekend winners and why movie musicals are roaring back to the box office. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue, but it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAC plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morningbruedaily. That's aflac.com slash morning brewdaily. Good morning, Brew Daily Show. I'm Neil Fryman.

And I'm Toby Howell. Today, Americans are finally feeling better about the economy. Is it time to declare the vibe session over? Then pour one out for Sports Illustrated because the once iconic magazine is caught between editorial layoffs in a hard place. It's Monday, January 22nd. Let's ride. We are deep in January, and I know everyone is ready for spring. But I do want to warn you that this spring is going to be a little bit.

more chaotic than usual. And that is because we've got two cicada groups emerging simultaneously in a truly historic event. The last time Brood 19 and Brood 13 emerged in the same year was in 1803 when Napoleon was presumably so fed up by their mating calls that he sold the Louisiana territory to Thomas Jefferson. These two broods will start singing their mating tunes in late April. Then they won't appear together for another 221 years. So this is something nobody alive right now will ever see or thankfully here again. It's crazy. No one alive will see it.

But also, the buzzing comes from males trying to find a mate. And I'm like, buddies, find a different schick. How is constant buzzing the best way to find the love of your life? I think quiet cicada summer is in. Loud cicada summer is out. But truly, it is crazy when you look at the sheer amount of these things. They expect over a trillion cicadas to appear in a 16 state area. So if you live in one of those 16 states, get some earplugs.

Yeah, it's going to be loud. I mean, these things can go up to 100 decibels, which is the same as a motorcycle or a jackhammer. Oh my gosh, it's bad, but Quiet Cicada Summer. Come on. Taking a piece of advice from Morning Brew Daily. Just quit it with a buzz in. Before we jump into the show today, we have a quick word from our sponsor, Veem. Picture this, everyone.

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This is a Bose moment. Your 10 boring blocks from home until the beat drops in Bose clarity. And the baseline transforms boring into maybe the best part of your day. Your life deserves music. Your music deserves Bose. Find your perfect product at Bose.com. For much of the past year, economists have been banging their heads against a wall

trying to solve an inexplicable mystery. If the U.S. economy is growing so fast, why does everyone think it sucks? Well, the case may be closed because the vibes, they are way up. On Friday, a report showed U.S. consumer sentiment jumping 13% to its highest level since 2021, and this isn't a flu. Consumer sentiment has increased 29% since November, the largest two-month increase in more than 30 years.

Seems Americans are catching on to the fact that the economy has weathered the Fed rate hike storm remarkably well. Weekly unemployment claims fell to their lowest levels in more than a year. Wages are rising faster than inflation and spending remains strong. Inflation overall has fallen to 3.1% from a peak of 9%. And gas prices have plunged 40% since last June to about $3. gallon. Toby, do you think it is fair to say this vibe session is over? The vibe session comes and go, because that's exactly what vibes are. They're kind of this amorphous thing. And the vibe session as a whole was this idea that consumer sentiment and

outlook, aka the vibes were shaping the economy more so than any actual underlying economic data. It was coined by a friend of the brew and educator, Kyla Scanlan, and it's just this astute observation about the power of vibes and shows how we feel about the economy can shape our economic reality just as much as the numbers themselves. But now it looks like we're exiting the vibe session, and it all comes down to kind of the holy trinity of consumer sentiment indicators. I mean, you hit on a lot of them, but lower gas prices, lower mortgage rates, and a rebounding stock market.

It's pretty much all you need to make the American consumer happy. We couldn't figure it out, though. I don't think this case is closed because I think economists are going to spend the next few years trying to figure out what happened. Maybe we'll find some underlying truth about maybe it is gas, prices, right? Like, what is the one indicator that shows how Americans feel about the economy? We know gas prices. They're splashed across every road. You see them a lot. They're down to $3 a gallon. But there was so much debate. I mean, was it inflation? Was it unfair negative media coverage,

which has definitely been pointed to? Was it politics? Was it just inflation in general? Because prices are still so high. And despite lower, I mean, lower rates of inflation, prices are still way above where they were in 2019 pre-COVID. Was it the that $16 Big Mac, was it politics? So I think this will be a subject of debate going forward. So, yeah, the answer is the mystery is not totally solved. Right, it's not solved. And I do think part of it is sometimes you see these economic indicators, like the

unemployment rate, for instance, and you see that it's at all-time lows. But then you have a buddy or maybe yourself has been laid off, and it's very hard to reconcile the fact that you're seeing this government data. So I think that has played a big role in kind of this disconnect that we've seen. But also, it helps when things start ripping again. I mean, the S&P 500 hit an all-time high on Friday. The Dow also hit an all-time high. So whenever you're seeing the words all-time high, it's harder to have a gloomy outlook.

And when people's stock portfolios are up, they're usually happier as well. All right, let's move on. Growing up as a sports lover in America was pretty much synonymous with reading Sports Illustrated. It was The magazine. But now a bastion of sports media is on life support after, its publisher decided to lay off most of its journalists on staff after failing to pay licensing fees to SI's parent company. Authentic Brand Group owns the magazine,

but the Arena Group publishes it. So even though Arena Group lost the right to actually publish the magazine, Authentic Brands has said it is committed to having the brand live on, whatever that means. And just to reiterate the confusing relationship, the layoffs are an arena group thing, not an authentic brands thing. The bottom line is that Sports Illustrated is,

on extremely rocking footing after years of declining distribution in a changing sports media landscape that no longer favors the longer reporting cycles of traditional magazines anymore. This was a very sad day. And it's true that Sports Illustrated has been declined for a long time, along with the rest of the magazine industry, the illustrated part of Sports Illustrated, laid off its photographers in 2015. I think people were upset because this might have been preventable and was less a broad, industry decline, which it is a part of, and I think that's a big part of the story. But the other part is just mismanagement of the brand.

It's been switched hands a bunch of times, and whoever's own Sports Illustrated has kind of just let it rot, essentially, and has made certain strategic approaches, like becoming more of a content farm in trying to publish more articles to gain SEO and try to get rank higher on Google Search, instead of investing in journalism or going a more premium route like Sports Illustrated had been. So I think a lot of the lamenting was going on was like, this was preventable. Like, how do you let something a brand as storied as Sports Illustrated just end up like what's happening here, like a carcass?

Yeah, the ringer had a great headline that encapsulates how this all came to me. It was Sports Illustrated's death by a thousand cuts. It wasn't just one thing, but you're right. It was a combination of mismanagement, changing media taste. I mean, it stinks, though, because Sports Illustrated occupies such a special place in a lot of people's hearts. But there really just wasn't a place for it in today's media landscape. It changed to a monthly distribution.

And why would you read about sports stories that are a week or a month old when you can get real-time updates on ESPN or Twitter or something like that? But also, it's not the only iconic media entity running into a big change. Pitchfork, which was one of the last true taste-making centers of gravity for the modern music industry, is getting folded into GQ. It went from this standalone site to part. of a men's fashion and style brand. Some of its editorial staff is being laid off, too.

So if you just want to sign the Times, it's pitchfork in Sports Illustrated struggling right now. Ezra Klein at the New York Times had a really interesting take on what's happening in the media world right now. And he said, look at what's happening. We're kind of bifurcating. You have the New York Times, which is a behemoth and is becoming a global media superpower.

You don't have to read it in New York. They have cooking. They have lifestyle. They have games. So that's on one end of the spectrum. And then you have the rise of the substack. or the newsletter operator, which has become, you know, viable for a lot of people in recent years. But the problem is Sports Illustrated and Pitchfork, kind of in the messy middle, as you like to say,

where they're not, you know, they're just occupying this very weird space where you either have to be super niche, super newsletter heavy and focus on, like, one specific thing, or you just go to New York Timesbury, which not everyone has the resources to do. But it's that middle that's kind of getting gutted right now. Yeah, Pittsburgh and Sports Illustrated were culture creators and nurturers. Now, culture is created in real time and at light speed on TikTok and Twitter and other social media websites. So I do think it's also shifted from publications to platforms as well. We could vamp on this forever.

It is kind of a media strategy thing, but it is interesting to see these two iconic brands, man. It's pretty sad. It is. Okay. On Friday, Apple began pre-orders for the Vision Pro headset. Its biggest product launched since 2015 and a big gamble on augmented reality. Relative to past launches, though, the Vision Pro's release was pretty chill. with no big launch event or huge marketing blitz.

And that's because Apple knows its Vision Pro isn't really meant for the masses yet and is instead aimed at those tech-forward early adopters. Consider that Apple sold 12 million Apple watches in that product's first year, but is only expecting to sell 400,000 units of the Vision Pro. I hate this word. I use it in the last story, and I'm going to use it again. Vision Pro is a niche product for now. And one of the major questions is,

when I spend $3,500 on the Vision Pro, what will I be able to do with it? To make sure there is compelling content, Apple has been really hard at work with third-party developers to make apps for its headset, said that the product will run on more than one million apps out of the box, including Disney, TikTok, Amazon, and Paramount. But some big names are snubbing the Vision Pro, YouTube, Netflix, and Spotify have not built apps for the headset when it launches, which some say speaks to this rocky relationship between Apple and its developers. Yeah, and I think part of the reason why Apple is finding it hard to get developers on board, is that there's just not that big of a market to play with,

because Apple's best case scenarios, they sell 400,000 of these in their first year. And that's just not a very wide pool for developers to put their apps in front of, both monetarily and just to, like, see, experiment and use them as kind of a test group. So I can see why maybe these bigger legacy apps like Netflix, YouTube, Spotify, are holding off initially and waiting until there's a bigger kind of mass of people using the device to actually invest into this. But those are also the same companies that have been hammering Apple for years about its app store policies, how it takes an up to 30% cut of all in-app store purchases.

So there's also some bad blood between Spotify and Apple. So that might also be contributing to Spotify's wariness to say, like, oh my God, now I have to make my app into this augmented reality thing. That's going to take a lot of resources. Like you said, the market may not be huge. It may eventually be big. But for now, not that many people realistically are going to be used. using this augmented reality Spotify app, I already don't like you. So why am I going to help you out here? It is interesting, too, though, that despite all these negative things about the price of it and how there's also a ton of friction in the buying process as well, to actually get a vision

pro, you have to scan your face and send in your, submit your vision prescription as well. So there's all these layers of friction, and yet the reports are out that they've sold out of their initial stock of it because, I mean, it's Apple. And another thing, too, that they, it was an interesting hype cycle this time around. You said correctly that there wasn't a big launch event like Apple normally does. But what they did do was actually put out this hype video showing the manufacturing process of how this device gets made. And that got a lot of kind of like the nerdier people, not to say that you're a nerdier person, but the nerdier people going who just want an inside look on how Apple manufactures its high precision stuff. And it was cool.

I saw so many threads breaking it down. Didn't understand all of them, but it was very cool to see that behind the scenes look into this awesome device. We'll definitely talk about this more again when the device launches on February 2nd Groundhog Day. But I want your pick now over under 400,000 units in his first year. I mean, I just never bet against Apple. So I think over and I think that they'll figure it out. People love new toys and hopefully get the price down though because $3,500, depending on what the vibes are at the economy at the time.

I don't know. I think that will influence it as well. All right, before we jump into the next private show, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill 3 burner gas grill. Or get $50 off a select Weber Spirit grill and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together. Shop spring backyard days for seven days. at the Home Depot. Now through May 6th. Exclusion supplies to homedipo.com

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Actual prices may vary, limited time offer. Let's check in on some of our winners of the weekend where Neil and I tell you guys about a person-placer thing that had an especially wonderful Saturday and Sunday. Neil, you actually won the pre-show Ascot tying competition, so you're up first. Actually, of course I did. Watch so many YouTube videos. Okay, my winner of the weekend is Japan, because on Saturday,

It joined the U.S. Soviet Union, India, and China as the only countries to land a spacecraft on the moon. Japan's feat was even more impressive because it seemed to pull off what's known as a pinpoint lunar landing, which is when you go full Luke Littler and try to land your spacecraft within 100 meters of a bullseye. Usually landing zones on the moon are measured in miles or kilometers, a much wider area. The mission didn't fully go as planned, though, since the robotic spacecraft's solar panels weren't generating power and it did not have a lot of time. left to live. So before it died, Japanese space officials were frantically trying to gather data with the urgency of someone downloading movies at the airport ahead of a flight. Still, exciting for Japan and for moon landings in general, which have really been hit or miss lately.

Yeah, Moon sniper, first of all, incredible name for a looter landing vehicle. They were really going for a precise landing. They even designed the landing legs to land on a slope of a certain degree. so they weren't just going for a general area. They were going for a specific spot in a specific crater. A hundred meter accuracy when it comes to moon landing is Luke Littler-esque accuracy, as you said. They do think, recent reports said they might have hope that it could regain power, depending on if the sun hits the solar panels in a certain way. It is a slim hope, but they have started to, they had a press conference that say,

hey, if the sun is oriented just right, we might get a little bit of power back in this baby. So a very fun time, though. Anytime anything lands on the moon, it's a fun time. Right. I mean, there was this failed launch earlier this month, actually, the Pittsburgh-based company Astrobotic, which was carrying controversially those ashes into space to deposit them on the moon, had a malfunction,

and last week it re-entered Earth's atmosphere and burned up. And so it failed on its mission to go to the moon. There's going to be another attempt by a Houston area company later next month, actually. We're not in February yet. So we're, like, the moon is getting bombarded right now, but over the past 11 years, less than half of all spacecraft that have tried to land on the moon have failed. So it's not exactly, we're not, we're not exactly super proficient at it. But we're also upping the ante with more difficulty like this kind of pinpoint landing.

Yeah. Okay. My winner of the weekend is the amateur sporting world in general. Up first, here's a fun bar trivia fact for you. Who is the winningest coach in NCAA basketball history? If your first thought was Mike Shoshchewski from Duke, then you would have been right, up until last Friday, that is. After beating Oregon State Tara Vandervier, Stanford's women's coach is the new all-time record holder for most coaching wins with 1,203. She's in her 38th season at Stanford and 45th overall, which is two seasons less than it took Coach K to hit the mark.

She's won three national championships and even through a gold medal at the 96 Olympics in for good measure. 1,203 wins over 45 years. That is a lot of winning, Neil. And because I don't like Duke, I'm going to keep kicking Coach K when he's down. She has a higher win percentage than him, too. She's won 82% of her games versus Coach K is 77%. So I have to sneak that in there. It is just staggering numbers.

Plus, she's given a bunch of interviews about kind of her coaching style, and she's a very even-keeled person. She said that only once did she go totally crazy, and it was about 35 years ago. Imagine remembering the one time that you kind of lost your cool in it being 35 years ago. Pretty cool that. Also, think about all the changes that she's lived through.

NIL deals are coming into play. She's had to change offenses. I mean, even just smartphones in general and how you scout players. She has seen a lot of evolution in college basketball and has won throughout it. I also do want to talk about another amateur who weren't done winning this weekend.

We had an extremely rare amateur victory on the PGA tour as well. Nick Dunlap from the University of Alabama became the first amateur in 33 years to win in the first since Phil Mickelson. He's 20 years old, Neil. I couldn't even tie my shoes at 20. And the craziest part about winning as an amateur on tour is you can't accept any prize

money. So the $1.5 million he would have won is actually given to second place instead. Brutal to make history like that, get paid $0, then have to go back and finish out your history. Oh, yeah, he's so sad right now. But what I'm hearing is, once we make the PGA tour, you know, if we don't win, we have to lose to an amateur because we still collect the first-paced check. There's a lot of ifs and butts in that, but I'm totally on board with that as well, Neil.

There's a weird phenomenon going on right now in movie theaters across the country. A lot of musicals are getting released that A, are doing well at the box office, and B, weren't actually marketed to consumers as musicals. Mean Girls has pulled in 50 million in its first 10 days at the box office. Wanka topped half a billion dollars globally after a million. month in theaters, and the color purple produced by Oprah, pulled in 58 million and has done well at award shows. Now, the thing about those first two titles is that if you watch the trailer for either of them, you had no idea that they were musicalized.

I did not know. That's because lots of moviegoers have some preconceived notions about the M-word coming in and have been absolutely scarred in recent years by adaptations like cats and Dear Evan Hansen, which kind of stunk. So studios have taken to hiding the fact that Regina George. We'll be belting out burns to get people into the theater, at which point they usually end up enjoying what they're seeing. Right now, Mean Girls is sitting at 71% on Rotten Tomatoes.

Neil, are musicals back? Apparently, I mean, I did not know that people have an aversion to musicals. I mean, according to this deadline report, they said that they interviewed a bunch of movie studio execs, and they said that we always have played down the marketing of musicals, because when they show them to focus groups, focus groups hate them, and then you can't get the movie made, and it's all this, it's all this, you know, shenanigans. But I do think that in the past few years, the movie musical has gotten a super bad rap and horrible box office performance,

which scarred a lot of people in Hollywood, in the Heights did not do well. West Side Story was a big flop. And Dear Evan Hansen, those three coming out of post-COVID were just terrible releases for the industry. And I think that was kind of put, that was expected to put the movie, musical on ice for a long time. But I think we're just realizing that it just may have been a small sample size and we just didn't have good movies. So make better movie musicals and people go see them as we're seeing with these three. Part of the issue though is that musicals are expensive as heck to produce. The color purple's budget was $100 million. It needed to make $200 million to

break even. So it's actually been a bit of a box office disappointment. But that's also because it was advertised as a musical. And again, people don't really like music. or maybe they just think that they don't like musicals because, again, people like musicals. People like musicals or maybe we like musicals and we're projecting on people. But I think that West Side Story was actually a good movie. But again, it's just, it gross 76 million. It needed to gross $300 million to break even. So we're kind of seeing a return to box office relevance, which is why maybe we'll see more of these going forward.

The Big Kahuna is coming out later this year, Wicked with Ariana Grande. Oh, I am in on that. I think everyone knows that's going to be a musical. They're not going to say that this is just going to be another Wizard of Oz. People know that Wicked is a musical, and I'm feeling good about that one. Okay, finally, let's jump into our preview of the week ahead. Tomorrow is the New Hampshire primary and following a blowout win in the Iowa caucuses last week, Donald Trump arrives as once again the major favorite.

He's only facing Nikki Haley at this point because Florida governor Ron DeSantis bowed out of the race yesterday after losing to Trump by 30 points in Iowa. DeSantis launched this. his campaign in that glitch-filled announcement on Twitter last May. And that was pretty symbolic of the rest of his presidential bid. Yeah, Deshand is super packed. That fund his campaign raised $269 million, and it didn't muster all that much. That is a lot of buck for not a lot of bang right there.

Award season rolls on with Oscar nominations on Tuesday morning. Speaking of movies, four movies are expected to earn more than 10 nominations each. Barbie Killers of the Flower Moon, Oppenheimer, and Poor Things. It has been an awesome six months for Sin. If we're being on us, just great movies back to back to back. Way to toss in the cinema in there as well, not just movies, but cinema. When you're talking about the Oscars, you have to say cinema. Hear me out.

Saltburn for Best Picture, Neil. Yeah, I know. Yeah, I watched Salt Burn last weekend. I think I told it it's a movie that you don't like, but you want to talk about it with everyone. Give it best picture. Have you watched it? Yeah, I've seen it. Okay.

Let's see it. Yeah, you liked it better than I did. Okay, tech earnings start to come fast and furious. Netflix, which is on a nice little run on the stock market. will report on Tuesday, and then on Wednesday, Tesla will reveal its Q4 financials. Other companies reporting this week include major U.S. Airlines, Intel Verizon, and ATNT. I'm looking at the airlines industry, which can't seem to catch a freaking break right now. But also, yes, Tesla is interesting as well because it seems like EVs can't catch a break.

So it is interesting. We're going to see Netflix, who has been catching a lot of breaks, seems to have won the streaming wars as people have crowned. And then you have these other two industries that are a little struggling, so juicy work, weak of earnings. And we didn't mention because it happened after the show on Friday. But Spirit, which was looking in the dumps after that merger with Jeff Blue got axed, had a nice little bump. It had a stronger guidance, and it popped like 20% on the stock market. Still, still struggling. Okay, a trip to the Super Bowl is on the line Sunday when the Baltimore Ravens take on the Kansas City Chiefs and the AFC.

And the 49ers play the Lions in the NFC. The Chiefs, I didn't realize this. The Chiefs are playing in their six-st-st-ray AFC championship game? Patrick Mahomes has never not played in the AMC championship game. It's actually insane at this point. But we're pulling for Detroit. Yeah, absolutely. Let's go Lions.

All right, Q4 GDP data on Thursday could show the U.S. having its best back-to-back quarters of economic growth since 2021. The vibes, man. Let's hope the vibes are up. And then finally, the Australian Open wraps up on Sunday. Novak Djokovic treats his 58th quarter final at a grand slam, tying Roger Federer's record. And then American U.S. Open champion, Cocoa, still has a ton of momentum reaching her first Australian open quarterfinal. American women doing well, American men.

Ben Shelton, man. Ben Shelton lost. He lost, yeah. He was our chosen one. All right. That is a wrap. Sinner. Sinner.

Our guy's sinner. Our guy's sinner. Yonick Sinner. Okay. That is a wrap on our show. Have a great start to the week, everyone. Toby, what is our swing thought for the day? Today's swing thought comes courtesy of Tara Vandervere, and it's, and it's, quote, learn the art

of the controlled meltdown. Nothing in life ever goes. perfectly according to plan, no matter how all you might prepare. So go with the flow, stay on top of your emotions, and embrace the chaos. Learn the art of the controlled meltdown. That should be the motto for our show going forward. That's a great swing thought. Okay, if you want to get in touch with us, feel free to write in our email Morningbrewdaily

at Morningbrew.com. Let's roll the credits. Samantha Velas is our editor and producer. Gabby Lazano and Raymond Liu are associate producers. Yuchinawa Ogu is our technical director. Billy Minino is on audio. Hair and makeup always sticks the moon landing. Devin Emery is our chief content officer

and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th, and the signature Southern Country Rock

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