Morning Brew Daily - Inflation Cools More Than Expected & 'Pokémon GO' Heads to Saudi Arabia

Episode Date: March 13, 2025

Episode 538: Neal and Toby dive into the latest inflation report that shows it cooled a bit, which is a welcomed sign. But some can’t forget that the ongoing trade war could spoil the party. Then, RFK Jr. meets with CEOs of major food companies and urges them to remove artificial dyes from their products. Also, the popular mobile game Pokémon Go is being sold to a Saudi Arabian company that looks to expand its gaming aspirations. Meanwhile, Neal shares his favorite numbers on the workday clock-outs, car tech, and America’s longest conveyor belt.  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks. Investments focus in a particular sector, such as technology, are subject to greater risks and are more greatly impacted by market volatility, than more diversified investments. The Nasdaq-100 Index® includes the 100 largest non-financial companies listed on the Nasdaq. An investment cannot be made directly into an index.  Invesco Distributors, Inc. Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash U.S. slash brew AI. That's pwc.com slash us slash brew AI. Good morning Brew Daily show. I'm Neil Fryman.

And I'm Toby Howell. Today the average workday is shrinking. So what is the new 9 to 5? Then inflation finally slowed its role last month,

but danger lurks ahead. It's Thursday, March 13th. Let's ride. Does Vanna White have the best job in the world? On a recent radio

appearance, the Wheel of Fortune co-host delivered the shocking news that she works just 34 days a year, meaning she gets 331 days off. And the pay is pretty good, too. After not getting a raise for 18 years, White reportedly negotiated a new contract that gave her a substantial pay increase above her existing $3 million per year's salary. On the day she does work, it does sound pretty intense. The show films six episodes per day, which requires six wardrobe changes. Come on, feel bad for me, said, Toby, do you feel bad for her?

Our Queen Vana White, I think she's worth every penny. I mean, look at it. We'll have fortune generated $100 million in advertising revenue last year, so I think she's definitely worth it. But I was doing a little bit of digging to see who might have a better dollar per minute worked than Van der White. And there's this guy, Kevin Schmidt, who climbs a 1,500-foot TV tower twice a year to change the light bulb.

He makes $20,000 per climb. Yes, he's got the risk. of death, Vana has a lot less so, but I think it's a toss-up on the literal dollars-per-minute worked. So Kevin Schmidt, Vanna-White, those two are on the Mount Rushmore of dollars-per-minute worked. Now a word from our sponsor, Invesco QQQ, Neal, when was the last time you checked your resting heart rate? Tell me why on earth would I ever know that? Hey, it's important to know the state of your aerobic system, but the reason I ask is because you've been spending a little too much time in your brokerage account. I like to know what's going on in the

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Exclusion supplies to homedipo.com slash price match for details. New inflation numbers dropped yesterday, and for the first time in months, lead-foot prices actually eased off the accelerator. Woo-hoo, party in the streets. Well, not quite. The consumer price index rose just 0.2% in February, the slowest pace since October.

that brought annual inflation down to 2.8% better than expected, thanks to falling gas prices, cheaper housing, and airfare taking a 4% nose dive. Even egg prices, which have been on a rampage, climbed less than last month, though they're still up nearly 60% from a year ago. Before you break out the margaritas, economists are bracing for higher prices in the future. President Trump's tariffs on steel, aluminum, and a fresh round of Chinese goods are expected to push up prices on everything from clothing to, food to cars. So while the White House is holding this inflation report up as proof the economy is on

track, Wall Street wasn't as convinced. Stocks rallied briefly on the news before wiping out those gains just hours later and finishing the day about flat. Meanwhile, the Federal Reserve is likely still in wait-in-sea mode, looking for more clarity on Trump's trade actions. And this report likely won't sway it away from its plan to hold interest rates steady when policymakers meet next week. Bottom line, Neil, inflation may have cooled for now, but with terrorizing. is heating up. This could be the calm before the $20 egg storm. I'm taking the W here. My portfolio really needed this. Stocks stopped their three-day slide. A really nice change of pace after weeks of some pretty bleak economic data and surveys. We finally got some encouraging news here

with inflation coming down, or inflation growing at its slowest pace in four months. That steady, bumpy decline that we've been seeing over the past few years is still continuing a pace. We'll see what tariffs and other measures have in store going forward. But right for now, you know, inflation is still coming down, and I think we should celebrate that. Just diving into some of the specific categories, nearly half of the advance of the overall CPI was due to shelter costs, but those costs actually still decelerated from the prior months, so they did go up a little bit less quickly. Airfare's falling 4% was actually a big reason why this inflation report came in, you know, a little less hot.

And that's because a lot of carriers, as we've spoken about, have forecasted weaker demand. Prices of new cars, gasoline also declined. Grocery prices were pretty unchanged, actually, after a big increase in January. So that's actually a good thing. Technically, they fell if you exclude eggs, which I think some people are probably doing at this point. And yeah, so I do think that, as I said, the Federal Reserve probably is in wait-in-see-mo. There's nothing much that this report can do that really will sway it one way or the other. They still need more data to come in.

still need to see these inflation numbers milding out a little bit. Yeah, Jerome Powell gave a speech last week. He said he wants proof that inflation is moving sustainably lower. One month of cooling inflation, such as we saw, lower than expected, is not necessarily any definition of sustainably. So the Fed is meeting next week. They are expected to hold interest rates steady. Bits did rise of an interest rate cut in June, but that is a long time from now. There's a lot of policy. shifts and new economic data that'll come out in the interim. So again, wait and see. Moving on, this week, CEOs of major food companies met with Health and Human Services Secretary

Robert F. Kennedy Jr. and were given an ultimatum. Either you get rid of artificial dyes by the end of Donald Trump's term or all do it for you. The ultimatum was delivered during a Monday meeting that included the chief executives of General Mills, Pepsi, Kraft Heinz, and more. They were told it is a top priority of this White House to make the American Diet House, healthier by removing potentially harmful ingredients. Food dyes that make your Cheetos, neon orange, and Kool-Aid strikingly red have been a target of health advocates for years, but the movement has gotten a huge boost from RFK, who originally ran for president under an agenda to make America healthy again.

RFK has called out food companies for, quote, poisoning Americans, and according to the Consumer Brands Association, during Monday's meeting, he made clear his intention to take action unless the industry is willing to be proactive with solutions. The government has already begun taking steps in this direction with the FDA last year revoking its authorization of artificial dye red number three due to possible cancer links. A number of states, red and blue, are going even beyond that sprinting to ban even more artificial additives. Toby, the wind is behind the sales of the artificial dye removal movement. Now, these companies have to figure out what their next moves are. Right. Health advocates for years have been trying to get these things out of foods.

They say, one, they add nothing to taste. They don't do anything to nutritional value. They don't affect shelf life. All they do is make unhealthy foods look more visually appealing, which encourages more people to buy them. And then, of course, there is some research that say that could be carcinogens as well. And it does look like Kennedy isn't just stopping at artificial dyes. He wants to expand beyond that.

He said that the agency is going to look at generally recognized as safe rules. Those are the rules that allow companies to basically self-affirm which food ingredients make it into their products. He says he wants to look at those and just basically take a step back and say what is going into our food supply. California has long been a leader in this movement. They banned six food dyes from food served to children

in public schools back in September. West Virginia has also been leading the charge. They advanced this big ban that targets a range of common food dyes that have been linked to health problems. And that got overwhelming support from both Republicans and Democrats. It passed both legislative chambers

and expected to, you know, make it to the governor's desk for signing soon. So there is a groundswell of support for it. So how important is artificial dye, that neon cheetah color to sales? Are we humans so obsessed with these very bright colors that is so important for food companies to include them in their products? Well, if you go back through history, there are maybe some mixed messages. General Mills took food dye, artificial food dye, out of their seal. in 2016, that includes tricks.

What they found was that people will not buy tricks that has muted colors. A year later, they put the artificial dye back in their cereals, back in tricks. So that was a warning sign to the industry. Then again, for every tricks debacle, there is a Kraft Heinz success story. Craft Heinz also that year took out artificial dye from their mac and cheese. And that didn't seem to affect sales. all. So we really don't know exactly how obsessed consumers are with these artificial dyes, maybe some mixed messages throughout history. One way to get around it, though, is there is this

healthy food movement that we're going through right now. And one thing that signals healthier foods is muted colors. So you're seeing brands like PepsiCo has been working to create a different type of spicy ruffles. They have this simply brand where it's just a healthier brand in general. And so they are releasing this spicy chip, but it's a very muted color. So one that, that screams healthy to you're getting around the artificial dye issue. So I think you may see some these companies try to innovate their way out of it. Of course, the flaming- Change expectations. Right. Change expectations. Like this is a healthier snack. You're, you're going to get some spice, but you're going to get a healthier snack. It might be tough, though,

to, like, flaming hot Cheetos. How are you-skittles? Yeah, they have to be those bright colors. Like, we were talking, can you imagine like a muted skittal? It would just look like a breathment at that point. So some food innovation will certainly happen as companies try to. to get out of using dyes in their supply chain. Remember Pokemon Go, the game that had you sprinting into traffic for the chance to throw a virtual Pokemon at a Rotata? Well, it just got bought by a Saudi Arabian company. Scoply, a mobile gaming giant owned by Saudi Arabia's savvy games, just sold out $3.5 billion

to snag Pokemon Go and a handful of other apps from the games maker Neantic. That means Charmander, Pikachu, and 100 million global players are officially in. the Saudi portfolio. It's part of the country's massive gaming strategy, already holding stakes in Nintendo, EA, and Activision, and now adding Pokemon Go's billion-dollar empire to its trophy case. Neantik, meanwhile, is pivoting to AI, spinning out its geospatial mapping unit to develop what it calls a next-gen-gen map of the world, built using images and location data captured by its players.

However, as 404 media noted, Neontik and Scoply have published six collective blog posts about the deal, none of which address. what is going to happen to the location data of players of Pokemon Go's 20 million weekly active users. So Neil, welcome to the new world of gaming where somehow Pikachu has found his way into the middle of a geopolitical rebrand and a data privacy debate. This is kind of an admission by Neantik that they couldn't really find another success story after Pokemon Go. Pokemon Go is estimated to have brought in $8 billion in revenues since launching in 2016.

Last year, it was the second highest grossing mobile game. But beyond Pokemon Go, this company, which spun out of Google in 2015, really hasn't been able to find another hit on their hands. So they're, you know, selling Pokemon Go and their other stable of games and pivoting to this geospatial AI sector where they want to essentially create large language models, chat GPT, but for locations and geography. So it is kind of acknowledgement that, hey, we captured lightning in the bottle here, but we couldn't find the magic anywhere else. And so here you go, Sadi Arabia. You want to get into gamings? Why don't you take it off our hands? I mean, Pokemon Go, though, is still a massive name in the gaming space.

It's one of the highest grossing mobile games today. It still has 30 million monthly payers. They spent more than $1 billion last year across its games business. It is definitely slightly smaller. Now, I still remember that crazy summer of, you know, 2015-20s. I wish we were doing the podcast then. It was just a truly... I remember sprinting down to a beach because the rumor was a blast noise was down there.

I couldn't believe it, but it did attract 500 million players in its first year. So it absolutely was a phenomenon. But you are right. The 2020 kind of hurt its popularity as COVID lockdowns kept people inside their homes. The company has since canceled multiple projects. It laid off 310 employees between 2022 and 2023. And so you're right. Scoply was like, hey, we'll definitely take this.

Scoply also has another huge moneymaker in the name of Monopoly Go. It sounds like all you have to do is take a nice IP and add go to the end of it, and you'll make a billion dollars. That looks to be the strategy right now. So right now, Scopley is like, hey, we do want to get bigger in games. Let's take this, you know, limping title that still is, it makes a lot of money. And let's try to, you know, take over the games world. And Saudi Arabia is absolutely taking over the games world. They've earmarked nearly $40 billion to build an industry there.

Last summer, they hosted the E-Sports World Cup handed out $60 million in private. And then in 2027, they're working with the International Olympic Committee to host the first ever Olympic Esports Games. So the center of the gaming universe is shifting to the Gulf. Got to warm those thumbs up, Neil. I'm going to make it to the Olympic Games in Esports. All right, what a first half of the show. Let's wait for the second half where we get Neal's numbers. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get The best of both worlds. Get the Unreal College deal, everything you need, to study and play with select Windows 11 PCs.

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Welcome to Neal's numbers, the segment where I share three stats from the week's news that will get you as intoxicated as St. Patrick's Day. For my first number, y'all are clocking out way earlier from work than you used to. The average American workday now finishes up at 4.39 p.m., according to a new analysis from Active Track. That is 36 minutes earlier than just two years ago when the average workday concluded at 521 p.m. The report shows how our work schedules are still shifting dramatically in the era of more flexible arrangements since the pandemic. Another interesting finding, seasonality matters a lot in how and when we work. The analysis found that workers tend to put in

longer hours in the months of August and December, which they suggested could be times when people feel the need to catch up after vacation or rush to hit year-end targets. Toby, 4.39 p.m. That is plenty of time to sneak in nine holes before sunset. That is true, especially with daylight saving. I do think, too, though, that the big takeaway from this report is that overall productivity increased by 2% over that time as well. So people are clocking out earlier, but getting more done. The report highlighted that employees engage in focused 24-minute spurts of productivity, which I think we can all kind of relate to. length of our podcast. Right. It is, yeah, a focus burst of productivity right here. But I do think

it's right. People aren't meant to just be locked in, you know, eight hours a day, 10 hours a day, all the way straight through. You ebb and flow, you ease in and out of productivity. So these little spurts of productivity are, I think, a good thing because we are seeing that productivity number go up overall, even though minutes worked is going down. ActiveTrack did say, quote, these are healthy numbers. And they also noted, interestingly enough, that weekend work is on the rise. So people are just spreading out their work over seven days rather than five. For my next number, drivers are getting fed up with all the whiz-bang technology automakers are infusing into new vehicles.

In a recent survey of new car buyers by strategic vision, just 56% said they had positive feelings about the intuitiveness of their car's controls down from 79% a decade ago. Perceptions of new features like dashboard displays and screen interfaces plunged by a similar amount, according to the Wall Street Journal. Many complained that car makers are trying to fix something that wasn't broken. Take the old door handle, for instance. You might have thought we hit peak door handle. You pull a lever, the door opens, great.

Let's move on to innovating other things. But no, now many EV makers are equipping handles with automation and sensors that sometimes don't work in the cold weather. And that's been a really frustrating experience. Last year, owners of battery electric vehicles reported door handles being difficult to use at a rate of 3.1 problems per 100 cars, up from just 0.25 years earlier, according to J.D. Power, as one Volkswagen owner told the Wall Street Journal, just give me a normal door handle. Yeah, that seems to be the rallying cry right now for sure.

This Wall Street Journal documented the poor story of a guy who owned an electric car. First of all, he tried to turn his car on from inside the house, but the app wasn't working. It was a cold day. So he went outside to try to do it manually. Then the door handle was broken because it was too cold. So it is just this ridiculous thing where we innovated door handles to the point where they were obviously a problem-free experience. Everyone knew that a door handle just worked as a door handle. Suddenly we put too many sensors in them. They pop out when you approach a vehicle.

And we created a problem where there wasn't one. So that is just perfectly emblematic of the fact that cars are turning into a computer. I mean, we just heard Trump say everything is computer when he stepped inside a Tesla. And it is emblematic of what's happening of the entire auto industry right now. specifically with door handles. For my final number, the largest conveyor belt in America is now in operation. No, it's not a new addition to the Wanka factory. It's a belt used by an oil field company to transport millions of tons of sand used for hydraulic fracturing. Known as the Dune Express, the conveyor belt stretches 42 miles from the tiny town of

Kermit, Texas, all the way into New Mexico. That's longer than the width of Rhode Island. Atlas Energy Solutions came up with the idea a few years ago after realizing that hauling mountains of sand across the Permian Basin, using massive trucks, was inefficient and often dangerous for everyone on the roads. So they decided to create an alternative highway alongside the one used for cars, a conveyor belt that looks like a really boring roller coaster schlepping sand across the desert at 10 miles per hour. Why do you need so much sand for oil drilling? Well, fracking requires liquid to be pumped into the ground at very high pressures to create holes and release oil. Companies use sand to make sure the

the holes don't close in on themselves while they're being pounded with water, oil, and gas. Toby, what in the Lissan Al-Gaiv is this monstrosity? It is a really long conveyor belt. It's also a very risky investment because this thing costs $400 million to make. And it's obviously one of those things that there's not a lot of precedent about how to make a conveyor belt that stretches that many miles. But it does seem like it is helping with the traffic issue. That was the big thing.

They didn't want these huge laden down trucks on highways that are just kind of a danger to everyone else along the highway. But the ironic thing is that during its miles long journey, the sand is actually sold and then sent to fracking companies. How do they do that sort of last mile delivery? They loaded onto trucks and, you know, deliver it to the fracking company. So it is a bit ironic that they created this huge $400 million thing, only to still load it up in trucks to send it the last mile. But it does, you know, save some of those traffic issues. And I said, yeah. And I said it's the world, the longest conveyor belt in the United States.

It is in fact not the longest conveyor belt in the world. At 61 miles, there is a conveyor belt in western Sahara on the northwest coast of Africa that carries phosphorus from a mine. And that is the longest conveyor belt in the world. That is a long one. I just want one person to, you know, maybe it's a YouTuber to get on it, make the whole trip and just telling me what it's like to be on a, you know, 61 or 41 mile conveyor belt. think I know a particular YouTuber who might take you up on that challenge.

Okay, let's sprint to the finish with some final headlines. One day after President Trump imposed 25% tariffs on steel and aluminum against all the U.S. trading partners, the response was swift. Canada immediately slapped retaliatory tariffs on steel and aluminum and said a levy on an additional $30 billion in U.S. goods, including computers and sports equipment, would go into effect today. Meanwhile, the EU also announced tit-for-tat tariffs. on the same amount of American goods and targeted iconic American industries such as whiskey,

jeans, and motorcycles with up to 50% tariffs that go into effect next month. Jack Daniels maker, Brown Foreman's stock fell 5% on the day, while Harley Davidson, ticker hog, dropped nearly 6%. If it wasn't clear before, the trade war is officially on. It is on, and it's also a replay of the last time Trump was in office when Trump imposed tariffs on the EU during his first term. What did they do? they targeted the same iconic American industries and companies like Bourbon from Kentucky,

like Harvard Davidson motorcycles, and like Levi's jeans. So you are seeing it run literally the same playbook back, targeting these things that are very emblematic of America, even if they maybe are not super crucial to the economy at large. Yes, in a similar vein. And the EU also targeted soybeans because they're grown in Louisiana, which is the home state of House of Representatives speaker, Mike Johnson. So these are very symbolic in nature.

Someone call Will Smith because iRobot is tanking. Shares of the Roomba Maker fell more than 30% yesterday after the company said there is, quote, substantial doubt about its ability to stay in business. Since Amazon pulled out of its plans to buy the company for $1.7 billion last year, things have gone from bad to worse. The company laid off 51% of its staff at the end of 2023, and its financial outlook has gotten snagged on a sock with fourth quarter revenue falling 44% year over year. Still, it's throwing Hail Marys to stay in the game. On Tuesday, the company launched

eight new Roombas, though it's said in a statement that there can be no assurance that the new products launch will be successful. Neil, can you imagine a world without Roombas? Everything's collapsed since this Amazon deal fell apart. I mean, $1.7 billion for this company sounds like a ton now, but it was going to happen until regulators in Europe and the United States said that Amazon should not be able to buy this robot vacuum because of competition concerns. And also, there were concerns that it would get all this data on your home when the ruba comes around. And, you know, Amazon already is enough data as it is. They don't need any more.

So after regulators block this deal, this company has absolutely collapsed. And in the next 12 months, it might not exist anymore. Finally, a scandal is engulfing the sport of ski jumping after two Norwegian gold medalists were accused of doctoring their suits in order to fly farther in the end. air. Marius Lindvik and Johann Andre Forfeng were disqualified from a World Cup event that starts today after officials found

added material in the crotch area of their ski suits following a whistleblower tip. It was extremely high-level manipulation, the race director said, adding that Norway's alleged scheme was absolutely by far the worst he's seen in his five years on the job. Toby, Norway has

developed a reputation for having top-level integrity in sports. Now it's staring down crotch gate. Now, I have to say it. I got to see these single crotch stitches. Have I been walking around with non-aerodynamic crotchel regions all this year? Think of all the wind resistance that I could have been avoiding. I do feel bad for the athletes, though, who apparently didn't know anything about the modified suits. But I do love me a little deflate gase-esque drama hitting the ski jumping world. I never knew a single stitch in one particular region of

the body could increase aerodynamics that much. Let's wrap it up. there after you said something about crotches. Thanks so much for starting your morning with us and have an awesome Thursday for any questions, comments, or feedback. Send an email to Morning Brew Daily at MorningBrew.com. And if you're enjoying the show, share it with a friend, family member, or coworker Toby, who should everyone listening share it with today? I want you to share the podcast with someone who didn't know we had a YouTube channel. It's a lot of you over 10 times as many people listen to MBD as watch it, but come check out our smiling faces, maybe leave a comment, perhaps even a like and subscribe.

We'll see you there. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lue is our producer, Olivia Graham, and Olivia Lake, our associate producers. Yuchinawa Ogu is our technical director. Scoop's Dardaris is on audio. Hair and makeup is riding the Dune Express. Devin Emery is our chief content officer and our show is a production of Morning Brew.

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