Morning Brew Daily - Investors Flee Tech for IRL Stocks & Trump Touts Economy in SOTU Address

Episode Date: February 25, 2026

Episode 787: Neal and Toby recap the biggest news from President Trump’s State of the Union address. Then, the recent fears of AI, causing widespread selloffs, has been a boon for utility or energy stocks, or HALO trades, “heavy assets, low obsolescence.” Also, the creators of Dark Sky are back with a new weather app that overshadows your native weather app. Meanwhile, “Survivor” returns for its 50th season and a chat about how it’s shaped TV.  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://www.swap.fm/l/mbd-note⁠⁠⁠ Watch Morning Brew Daily Here:⁠ ⁠⁠https://www.youtube.com/@MorningBrewDailyShow⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Consider this comparison. PWC data found the percentage of CEOs who report revenue gains or cost reductions from AI is almost equal to the percentage who say they're still stuck. What separates these two groups? PWC points to a clarity issue. Even for CEOs, it's hard to tell what's AI hype, what's reality, and where this tech can make a tangible difference. Learn where AI can actually make an impact and what successful adoption looks like at

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, President Trump went on and on

and on about the economy at the state of the union last night. Then what is the halo trade and why are investors piling into it? It's Wednesday, February 25th. Let's ride. Good morning. You got one more day of me in the

studio and Toby in a bedroom on the West Coast. Toby, have you seen this new survey out about grocery stores? The American Consumer Satisfaction Index surveyed 31,000 shoppers to find out America's favorite grocery stores, ranking them in categories like freshness of meat and produce, quality of the selection, the layout, and speed of the checkout process. And what do you know? Good old T.J's, Trader Joe's, came in first with a ranking of 86 out of 100. And second place is Publix, the pride of Florida, followed by 8.5.com. H-E-B, Sam's Club, Aldi, Costco, and Whole Foods. Toby, what do you make of this ranking?

It actually does seem like grocery stores got worse in general last year, because if you look at the national average of how each chain was ranked, it dropped 1% to 78. Only three of the 19 grocery chains measured improved compared to the previous year. Here are somewhat notable below average chains. Walmart received a score of just 75. Albertsons scored 74 in a few. giant eagle ranked last in the entire report. So if any general giant eagle shoppers are out there,

you have a bone to pick with them. I am really trying to think of what makes a good chain. I was going to say affordable, but then you see Walmart pretty far down this list. I think the distinct vibe is the number one thing that shoppers are looking for. Trader Joe's, you know what you're going to get when you walk in. Public shopping is a pleasure. I've never been in one. Okay, that's the fascinating thing. I have a lot. I have a lot. I have a fascinating thing. have such field tea to public because I just grew up in that region, I think it's their slogan where shopping is a pleasure. You just walk in there and it does feel like shopping is a pleasure. I think you can't just be a nameless, faceless entity, like maybe something like an

Averson or a Walmart. That's my reading of the grocery tea leaves. Okay. And before we move on, I have to shout out, Big Y, Western, the pride of Western Mass. Everyone just has random feel tea to their regional grocery stores. It can't be explained. We need to do research to see why we just care so much about this. Okay, let's hit the news. Ahead of last night's state of the union address, President Trump said, it's going to be a long speech

because we have so much to talk about, and he delivered on that promise. Recording the longest state of the union speech in American history, Trump spoke for one hour and 48 minutes in front of a joint session of Congress and four of the Supreme Court justices who just a few days ago struck down his global tariffs.

The president spent much of that time speaking about the economy because that's, well, all anyone wanted to hear about. Nearly 60% of respondents to a CNN poll said they most wanted Trump to discuss the economy by far in a way the most of any subject. In this speech, Trump described the economy as roaring like never before, mentioning lower mortgage rates, cheaper gas, and a rising stock market. He did not float much in the way of new policies, as presidents typically do in their states of the union, instead recapping some of his greatest hits like last year's tax bill and

Trump accounts that seed newborns with $1,000 in the stock market. However, by saying the economy is hunky-dory, Trump may seem out of touch with what Americans are actually feeling because they are nervous about the economy and don't think Trump is managing it very well. 57% of voters disapprove of his handling of the economy in a recent Washington Post, Reuters Ipsos poll. This was Trump's opportunity to show he's got a plan to fix some of those anxieties, but he mostly dismissed the concept of affordability. Yeah, he wanted to play the hits here.

He likes pointing to indicators that are doing well. The stock market has gone up. up gas prices have gone down. Mortgage rates have mellowed out a little bit. And there has been job growth, albeit not a lot of it. So those were more things that he was focusing on rather than the struggle with affordability that a lot of Americans are still confronting. He actually tried to say that affordability has been politically weaponized and just put

it back on the Democrats saying that their statements are a, quote, dirty rotten lie. But it was interesting because all polling does point to the fact that, When the midterm elections come around, this is what is top of mind for a lot of Americans. And he did kind of just skirt around that main issue. Yeah, it also said he didn't float that many new proposals, but there was one that people are talking about. He called Trump called for the creation of government-backed 401K-like plan for U.S. workers that don't have a retirement match from their employer. 56 million private sector employees work for companies that don't have an employer-sponsored retirement savings plan. So Trump said he would do an executive order to get this across the finish line.

There was a plan that was already put in place by the Biden administration that's going to take effect. Next year, we don't exactly know how this particular retirement proposal from Trump is different from that. Biden one. He said it's going to be different. So that was one of the new things that we heard from Trump last night by way of changing up the economy. He also talked about some of the things that he had proposed in the past that haven't been taken up by Congress. at like getting institutional investors out of buying homes, things of that nature. So that was one of the proposals that we actually hadn't heard for the first time. A lot of people were tuning

into how he would react to the Supreme Court justices being in attendance. Not everyone attended, but multiple who voted against his tariffs were in attendance. And for some people who were hoping for a big showdown where he calls him out, we didn't quite get that. He was a lot nicer than people expected. He did call the ruling very unfortunate and disappointed, but he did end up shaking a lot of their hands. So I was hoping for a little bit more of a call out because Supreme Court justices, when they attend, they sit stone face. Like they're trying to appear very neutral. So he never really went at them to the degree that some were expecting. I also want to talk about people who were watching the state of the union because when you tune in

to watch the president, you know, talk about the nation, usually it was this very passive experience. but now with the rise of prediction markets, it is very much a active betting experience for much of the country. Darren Ravell, who is a sports reporter, said, I have covered betting in some form for the last 25 years. Watching Kalshi take $22 million in bets on words Trump would say tonight is the most mind-blowing thing I've yet to witness. Some of those words that people were betting on were, would he mention the Olympics or the World Cup? Would he mention AI? Would he mention hockey because the U.S. men's hockey team was in attendance? Would he say the words alien or nuclear?

These were all of, while we're talking about the biggest economic issues, some people at home are saying, if he says alien right now, you know, I'm making a million bucks right now. It just really has shown how people's consumption has changed even in the last few years. And it raised tackles again for possible insider trading because one of the things you could bet on, not all of these things that he was going to say, you could bet on, but he could also bet on the length of his speech. And certainly a lot of people inside his circle knew how long the speech would be and also what he would say. So Chris Murphy, who's a senator from Connecticut, said, I can't believe we haven't regulated or cracked down on Kalshi, Polymarket, these prediction

markets. Any time it seems there's this big event in the world, whether it's the Super Bowl, the state of the union, prediction markets play a big role. And there seems to be a lot of outrage about possible insider trading or how can we possibly be betting on these things that Trump is going to say the word autism. Nothing seems to happen yet, but it seems like there's a bit of a groundswell growing against these prediction markets for these big events. All right, we're going to move on. Who needs code when you have concrete? Investors have been rotating hard out of empty calorie asset like software stocks and into the meat and potatoes of Wall Street instead. The popular name for this trade is Halo, which stands for heavy acids, low obsolescence. It includes names like McDonald's,

ExxonMobil, and John Deere. The idea is even if AI replaces every piece of software, we're still going to need tractors and burgers, and the market is reflecting that attitude. In the past few months, industrials, materials, utilities, and consumer staples have all outperformed technology as a sector after the Magnificent Seven has gotten off to a shaky start. Part of the issue is that software is eating itself. It seems like every time Anthropic issues a new press release, some public company implodes in response. Just yesterday, Anthropic launched Enterprise features that took aim at HR and investment banking, while its launch of a new tool for cybersecurity work sent stocks in that sector tumbling. So demand for a hideout from AI is on the rise. These are the

companies that you cannot type something into a prompt and disrupt, said Josh Brown, a wealth management exec who coined the term halo. Neil, investors can see these companies halo. They know they are saving grace. They're everything they need and more. It's written all over your face. Maybe I can feel the halo. Pray it won't fade away.

I was going to stop you early, but it was your birthday yesterday, so I'll let you run. It's true. You can't vibe code a quarter pounder. In real life stocks are so in right now, and I want to run through some of these numbers. The S&P 500 Software Sub Index is down to its lowest level since Liberation Day back in April. It's lost $1.2 trillion in market cap in less than a month. Meanwhile, let's talk about real economy stocks. The S&P 500 Utilities Sub Index is up 9%.

Energy stocks are up 23%. The mining index is up over 100% since last year. Remember Budweiser out people aren't even drinking beer anymore? Well, that stock is up 48%. from last year. Consumer Staples is having its best February on record. So the Halo trade is alive and well. People are freaked out about what AI could do to software. And they are loving things like John Deere tractors and mining and actually things you can see in touch, especially if it takes a lot of capital expenditure and huge assets because that's something that requires a lot

of investment. It's not something that you can just write a piece of code and make it go away. There are splits inside of industries as well when it comes to these trades. And again, Josh Brown pointed to one specific example that encapsulates its well. Delta Airlines is up 5.4% in February. Expedia Group is down 23% in February because whereas an AI might be able to find cheaper flights a lot easier, it can automate that travel search, you can't build a plane with AI. So of course, Delta is going to seem to be a lot more defensive. and that kind of goes in the face of what the last, you know, 20 years have been in investing.

It used to be asset light was the way to go. You know, software is a lot easier to scale. It's a lot easier to build. But now capital heavy is the only thing that you can defend because very difficult to replicate. It's very time intensive to build as you were speaking to. So it is fascinating to see that flip a little bit. I don't know if it's going to be a long-term thing. There's some people that say this is definitely an overreaction to, you know, these various things

that Anthropic are putting out. Software stocks are going to be more defensible than people think, but at least for the short term right now, it seems like people are rotating into these easy-to-defense these Halo stocks. What's the most important thing here is we have a new stock market acronym? Because we had Taco, Trump always chickens out. Now we have Halo, which is a great one. Also, there's FOBO, which is fear of becoming obsolete due to AI advances. So we got Taco, Halo, and Fobo all in the last year. I'd say that's a pretty good run. That is a good run.

And you sound crazy saying it to yourself, but this is the language and world that we live in right now, and I like it, and I'm not going to, what was it, Fabo? Fobo. Anytime you don't have to say obsolescence and you can just say, Halo is great because that's a big word. Okay, moving on, I don't need to tell you that a lot of weather forecasts get it wrong,

and a new app is leaning into that uncertainty. Acme weather from the creators of Dark Sky has been, been released on iOS and is positioning itself as a weather app for distrustful people. The app will give you a main forecast alongside a spread of alternate predictions that capture a range of possible weather outcomes. So for this past blizzard, they might say, Providence is expected to get two feet of snow. But you know what? There are some models out there forecasting over three feet, and they would have been right. There are some other unique features as well. Acme is testing alerts that tell you if a rainbow is coming or when you

might be able to see a beautiful sunset. Releasing a weather app, especially one that cost $25 a year, it's kind of like opening a dispensary in the Berkshires. There's not exactly a shortage of them. But if anyone can stick out of the crowd, it's the weather app dream team who started Dark Sky, a cult favorite vaunted for its accuracy that was acquired by Apple in March 2020. Co-founder Adam Grossman told TechCrunch that he felt constrained at such a huge company and wasn't able to try as many weird things as he wanted to.

And so Acme Weather was born. Toby, can these guys make Weatherhouse? lightning strike twice? It looks like they're actually just stealing from how meteorologists calculate a forecast because meteorologists pull from multiple weather models. These models are updating several times per day, and then they compare those models against each other. So the way that maybe an Apple Maps does it is they don't have that nuance.

They display output from a single forecast model. They're showing raw data. They can't necessarily communicate the uncertainty that inherently comes around. with weather forecasting. So I do think there is going to be a niche group of weather enthusiasts that absolutely do want the most accurate, the most amount of data that they can then make their own informed decisions on. And I really do think the crowdsource aspect of this is fascinating as well, where you know

how Ways kind of revolutionized traffic where they would say, are you stuck in traffic right now? It would just be a collective, you know, data set updated by everyone who is driving. Now you can do the same thing with rain. Is it raining on you right now? It gives it much more accurate forecast. So I don't know if I'm going to pay $25 for it, but it is a fascinating, you know, take on weather apps. Yeah, I think these weather companies, weather apps, weather forecasters kind of dumb the dumb forecasting down for us over the past couple of decades.

They didn't think we could handle multiple predictions, but it seems like the trendline is moving toward the direction of giving people as much data as possible and saying, here's what we know. here's the range of uncertainties, and you come up with your own decision on what is going to happen with the weather, because we don't really know with 100% certainty. The New York Times actually interviewed their own weather team, and the weather people at the New York Times said, yeah, we are emphasizing what we don't know. That is our defining feature of our approach to weather. So it's very interesting to see weather forecasting go from here, from kind of treating all of us like kids that we can't handle it.

giving us more of more data and letting us make our own decisions. You know what's so funny? Like this is supposedly a very hardcore app for weather enthusiasts, but I could see the rainbow alerts function just going very viral. Oh, a rainbow is nearby. I'm going to buy this, you know, $25 app. Oh, a sunset notification. So I do think they have a good sense for like what makes something shareable and viral.

So maybe that will power it to much broader acceptance than any of these intricate models that they're forecasting. All right. We're going to take a quick break and come back and talk about Survivor. Abercrombie just dropped the perfect swim. Book that last minute beach trip you've been dreaming about. The new coastal inspired prints and patterns are great for any destination. Plus, thanks to Abercrombie, packing for vacation is even easier with reversible swim.

Perfect for mixing, matching, and customizing your look. Prep for summer with Abercrombie, in the app, online, and in stores. Neil, the tribe has spoken, and they're saying it's time to talk about Survivor. The show that Berth, Modern Reality Television in a way, is back for its 50th season tonight, where 24 All-Stars will return for a chance to claim the $1 million prize. As Jeff Probst cajol's contestants through duplicative day after day on the island, it's worth taking a moment to relive just how Integral Survivor has been for television. If we go back to season one, the show was extremely committed.

to the bit, telling players to behave as if there weren't cameras surrounding them, and they really were marooned on a deserted island. The Machiavellian end to that season where one contestant justified her vote for a rather loathsome winner because the snake should eat the rat, clearly resonated with people. Over 50 million viewers tuned into that finale and a phenomenon was boring. After Survivor debuted, The Bachelor, American Idol, and Desperate Housewives all followed. Heck, without Survivor, we wouldn't have a lot. lost, whose showrunner was inspired by the idea of Cassaways on an island. But as it enters

Middle Age, the show has become a lot more self-aware. Tribe members no longer pretend they're actually stranded, and since many grew up watching the show, the strategy of the game is openly discussed with phrases like meat shields and goats commonly thrown around. Neil, you can get as intellectual as you want when it comes to analyzing this show. Is it a microcosm of America? Does it speak to our politics and society as a nation? Or do we just like seeing Jeff Probst make fun of people? Maybe all of the above. Survivor is crazy. It didn't invent reality TV because there was the real world, but it definitely popularized it. Let's go back to May 2000, which I don't know if you do, Toby. I actually do remember because who wants to be a millionaire was the big show on TV. Everyone

watched it. And then Mark Burnett, the producer, comes out with this show that people are frankly shocked by one one critic called it a stunt show the other called it oh another said this show caters to all the worst qualities of mankind elizum selfishness and sneaky behavior was it was compared to lord of the flies but it came out swinging and just has never let up the first episode got 15 million viewers and then the finale of that first season 51 million just to put that in perspective game of thrones which was maybe our last big TV monoculture event outside of sports, got 19 million, 19 million viewers for that finale. So the first season of Survivor absolutely drubbed in.

I just love how hardcore they went just from the very beginning because Burnett said, this isn't reality TV. This is unscripted drama. And whatever it is, it's extremely dramatic. The New York Times TV critic said, if baseball had the 20th century as America's pastime, Survivor was the America's past. time of the 21st century, and you can debate whether that's true or not, but it has had a stranglehold on our television culture for now 26 years. It is fascinating because post 9-11,

a lot of people assumed that uplifting scripted TV would return and would be the most popular thing. But instead, what we got was Survivor, the Bachelor, American Idol, Joe Millionaire, and then all of these housewife franchises. So again, it isn't the show that invented the entire concept of reality TV, but you do look at the legacy of what it birthed, and it did look like it changed TV forever. So in some ways, absolutely Survivor is America's pastime. It encapsulates so many things about art culture, so many things about politics, about alliances, factions, you know, should you be a kind of a Machiavellian character, should you be a nicer character? So it is just fascinating how it is the mirror for whatever you want to hold up to it.

it will reflect it back to you because it contains so much of humanity in just this one premise. And while so much of TV is declining, reality TV is still, reality is still holding it together about, especially on Peacock. So streaming, about one in four shows on Peacacacac are reality series. Those accounted for over 30% of the subscriber revenue. Remember when NBC spun off all of its cable assets? They got rid of MSNBC. They got rid of CNBC. They got up all of those things. you know the one channel that they kept was Bravo because that was just the engine. They continued to produce all these original series. One thing that's funny about Survivors is that they haven't changed the $1 million

prize from 2000. I know. So that'd be worth. That's crazy. That'd be worth $1.88 million in today's money. And maybe, I don't know. Maybe Jeff, maybe you guys should up that to $2 million. I really do think that it's just such a round of number.

And it's still in people's minds, like feels like a lot of money. I mean, back in the early 2000s, it was a lot of money, and it still is a lot of money, let's be clear, but I was thinking the same thing, like they should have an inflation counter and say, you're getting jipped, actually, you're doing the same amount of work on the island, but now you're getting paid a little bit less. Tune in tonight, if you're interested, though, it does debut on Paramount. Let's sprint to the finish with some final headlines. Like me, after I bought Gwok, META is shopping for chips.

Yesterday, Zuck struck a multi-year agreement with AMD for up to 6 gigawatts of AI chips for use in its AI data centers. The deal also has a unique clause that gives META a warrant to purchase up to 160 million AMD shares worth roughly 10% of the company. The fact that META looked their way was good news for AMD shareholders with the stock jumping 9% as it looks to try and gain a foothold in a market 90% owned by NVIDIA. For META, it's all about leverage. This deal lets them diversify a little from relying on Nvidia so much, with AMD representing a second supplier they can hopefully rely on. And that is a big win for AMD, Neil. Yeah, this is a massive deal. It's worth over $100 billion.

And I think when you're trying to sculpt the Mount Rushmore of Silicon Valley CEOs, you're probably going to put Lisa Sue up there. She is the CEO of AMD has been since 2014. When she came in, this company was not doing well. It's about $3 a share, a lot of debt, years of law. And now that $3 per share is $213 per share. It's up almost 6,000 percent. So she has just been an absolute corporate legend for AMD. And it's been a rocky few years as it's gone up against Nvidia, which has really captured the market share for so much of these AI chips. But it's one, it just got this big deal for meta. It inked a big deal. Very similar deal with Open AI last fall. So Lisa Sue is an absolute legend. Up next, we got any top. Topo Chico fans listening, I am sorry for your loss. The cult favorite carbonated mineral water is temporarily unavailable in the United States, according to parent company Coca-Cola and likely won't be back until the summer.

The issue stems from problems with the wells it sources its water from in Monterey, Mexico. They identified problems with the geology around there and are shutting down production to fix and upgrade the facilities. There may be a small silver lining. While the main Topo-Chico water has been removed from shelves, flavored Topo Chico and canned cocktails will still be available. Still, Toby, I don't understand why we don't have a Topo Chico National Strategic Reserve. This is an emergency. See, I think that this is a good PR branding chance for the company because since the company's

inception in 1895, the mineral water has been sourced from the same wells in Monterey, Mexico. I would have thought by now, this is a major brand, it would have diversified a little bit. So I think it is sick that is sourced from Mexico and not just some, you know, you know, marketing stick. Premium bottled water, though, has been the hottest thing in Coca-Cola's portfolio writ large because consumers have, for years now, shifted away from more sugary sodas and towards things like, you know, high-quality mineral water. The company reported a 4% jump in water sales in North America. So this is definitely something they want to figure out quick because this bubbly water is the only thing that is keeping the company afloat at this point.

Finally, I can't tell whether this makes me laugh or cry. A software engineer inadvertently commandeered an army of almost 7,000 robot vacuums across 24 countries. It started innocently enough when Sammy Asdufall wanted to remote control his new DJI Romo vacuum using his PS5 game pad. But then things got weird. The remote control app he vibe-coded started communicating with DJI servers, and he found out he was granted access to the microphone audio, live camera feeds, and maps of thousands of other robot vacuums,

giving them the sights and sounds inside other people's houses. Instead of doing anything nefarious, he told The Verge about what happened and the publication called up DJI to report the issue. DJI says it had resolved the issue, but this surely will raise more questions about the privacy and security of all the internet-connected devices hanging around our homes.

A lot of people were reading between the lines here too. DJI is a Chinese company and has always been viewed by the State Department as making products with unacceptable security risks, especially their drones with the big fear of being data leakage to China. So this guy might have stumbled upon the backdoor that the U.S. has always warned about. And he did it because he wanted to drive his little robot vacuum with a BS5 remote. He might have saved America.

So it's just a very funny story on that front. But you're absolutely right. It does bring up fears and warnings about smart homes and devices and robots. Because right now, the things in our homes are little. Rumba-type creatures that are just going around the floor. But what happens when we have humanoid robots that someone can commandeer 7,000 of them into their eyes and ears? So it is just a fascinating preview of what might happen later down the ride and some of the security risks associated with bringing robots into your home. Okay, finally, we try very hard each day not to mess up or

present you with incorrect information. But when we do, we will absolutely correct the record. And this happened yesterday. Toby, you want to explain the correction. So it was my birthday yesterday, and apparently I made it seem like I was turning 28 years old, when in fact I'm turning 29 years old and am currently 29 years old. I thought you guys were gaslighted me after the show and said, Toby, you said your birthday wrong again. But then my family started to call me on my birthday. None of them knew how old I was turning. Like I really did confuse the entirety of the population and also my direct family.

So I am 29. The most important thing is there's a two in front of it still. So once 30 comes, everyone will know that I have, I've reached my middle-aged period. Is anyone else like Tobin, they don't know how old they are? I mean, 29 is a pretty big birthday. Right, exactly. Okay. That is all the time we have.

Thanks so much for starting your morning with us and have a wonderful Wednesday. If you want to get in touch, send an email to Morning Brew Daily at Morningbrew.com or DM us on Instagram at MBDaily Show. So let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair makeup is our designated survivor.

Devin Emery is our president and our show is a production of Morning Brew. Great show you, Daniel. Let's run it back tomorrow.