Morning Brew Daily - Is The Great Resignation Over?, Meta's New VR Headset, & The War on Big Dairy

Episode Date: June 2, 2023

Episode 73: Neal and Toby discuss why the latest labor data indicates that 'The Great Resignation' might be over. They also break down Meta's new VR headset and why the company is using all their firepower to take on Apple in the race to be top dog in the virtual reality space. Plus did Aubrey Plaza's ad for big dairy violate a federal law? And what stock absolutely collapsed this week vs why big tech is dominating the market right now. And if you felt like you missed any weird news this week - do the guys have a headline roundup for you. Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Listen Here: https://link.chtbl.com/MBD Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I am Neil Fryman. And I'm Toby Howell. On today's Friday episode, we are going to offer a final send-off to one of the most legendary COVID buzzwords. And the cow puns are going to be utterly relentless because there's major beef between traditional milk groups and plant-based alternatives. Then, Neil, meta is in the news for a two-letter trend that is not AI. We'll give you the rundown on the specs for its new VR headset. Before we finish off the show with a news segment, we are debuting called Weird Week, huh?

So stay tuned for that. It's Friday, June 2nd. Let's ride. All right, Neil, to start off the show, I want to call out a special anniversary. As of yesterday, you have officially been at Morning Brew for six years. Longest tenured employee, has a deal. It's a long time. I think I could hold my own heiress tour, honestly.

There are plenty of midnight, lots of folklore that I could talk about, not as much lover as I would have liked. Oh, my gosh. You are, that was incredible. You were prepped for that. Yeah, honestly, you've gone through managing editor of the newsletter for a long time. Now, co-hosts at Morning Brew Daily. You've done it all. You have your fingerprints all over this company, and I know it wouldn't be the same without you.

I feel like somebody's grandfather where they're just like, yeah, worked at this company for 45 years. It's only six years, though, man. I know, but in our age that we'll talk about it. That's a long time to not quit and move somewhere else. But, no, it's been so incredible. It's been an amazing journey, just very much a dream. dream job to be able to write and talk about the news and also do it in a fun, lighthearted way for people. So I'm super excited.

Let's do our Friday segment for all the new listeners every Friday we open the show with a question, which is, was it a fast week or a slow week? This one, there's an asterisk next to this one because it was a four-day week. So automatically fast, but also I'm actually going to totally erase that asterisk because we started our 4 a.m. wakeups this week, which made the last three days stretch on for eternity. So I'm going to say slow week this week. I agree with you that it was weird as hell. I'm going to go with my first NA. Not applicable. There you go. You have an asterisk as well. Okay. Let's go to our first story. There's some sad news because it is time to retire one of the great COVID work buzzwords of our age. I'm talking about the great resignation. Why is it dead?

because while the Great Resignation is definitely this vague buzzword that everyone uses, you can actually measure it in what's known as the quits rate, which is the share of American workers who are quitting their jobs for a new opportunity. So the quits rate surged during the pandemic when everyone was leaving their job to work at a remote company with a four-day work week. And this was called the Great Resignation. But on Thursday, we found out that the quits rate in the U.S. workforce has dropped and returned back to about the level it was back before the pandemic, which was 2.4% of employed people who are voluntarily leaving their jobs. So, no more great resignation. And it really reflects the fact that the job market is cooling down right now.

The economic situation is a little more uncertain. And workers are just taking less risks and just sticking with the job they currently have like me, like me, rather than taking the leap into the unknown. Well, you took a leap into the unknown world of audio. But yeah, well, first of all, I just want to give a shout out to the business professor Anthony Klotz, who coined the term Great Resignation. I feel like that's peak academia. You coined a term and it gets picked up widely by news outlets. I do think that part of what made the Great Resignation was that it was such a buzzy term and that CEOs got to drop it on earnings call to kind of explain some of the turnover. Because when you get down to the numbers, like it peaked at 3%. And right now it's at 2.4%. And so

there's not a whole lot going on in between those numbers. Yes, it is talking about millions of workers, but I always thought that it was probably a little bit more buzzy than actual. So, yeah, that 3% number was the peak, like a record from when they started keeping track of this particular data set in 2000. But if you go back to the 20th century, there were at least six times where the quits rate or people were resigning at the same pace as they were during the Great Resignation. I think it was a thing, though, and the thing and why I think that is because the pay bump you got when you left was huge. So typically it's around 10%. So when you leave a job to go to another job, typically you get a 10% pay bump. But when during peak COVID and you left the job, that pay bump rose to 20%.

So people were making so much money by leaving their current job and going to another one. Plus they got all these more flexible benefits. So I think it was a thing. Yeah, it makes sense when you look at that data. Like, of course, 20%, you're going to see bigger turnover. Right now, that pay jump is at 13% as of April. So this is another data point showing that maybe that's why we're not seeing quite as much movement because you're not getting that 20% raise anymore.

So, yeah, I have a question for you. All right, hit me. What is your favorite COVID work buzzword? Oh my gosh. I mean, work from home. We got quiet quitting. Yeah, quiet quitting was... Workcation.

Quiet quitting was definitely the best because it was basically just rebranding, like, laziness in a way. So I loved quiet quitting, but yeah, great resignation. I like bare minimum Mondays also because I don't know what the hell it means. But it just flows off the tongue. It's the perfect buzzer. We didn't know it, but at the time we were living through buzzer, the golden era of a buzzword, so we'll have to re-enter that. And just to give everyone a heads up while we're on the labor market story,

that the jobs report is coming out at 8.30 a.m. this morning, and like the Great Reganation slowing down or being over, the jobs report is expected to show that the labor market is cooling, thanks to the Fed's interest rate hikes. The economy is still projected to have added 180,000 jobs last month. So they've been saying, okay, we're going to stop, you know, job growth is going to going to go negative. At some point, they've been saying this for the past 12 months. Yeah. And it hasn't happened. Plus, that expectation number, 180,000 that I said, take that with a

grain of salt because 13 out of the last 16 jobs reports have come in above estimates. Yeah. And what's funny is we used to be able to actually talk about the job report. But now that we're getting the pot out so early, we have to speculate. So yeah, I guess tune in Monday for the full breakdown. All right. Let's move on. Our next story brings us to the wonderful world of AR. in VR. And to be honest, I'm not sure we've talked about it on the pod yet. We've been so wrapped up in AI. We might have very early on.

But the reason why they're back in the news is because yesterday, Zuck and META gave the world its first official glimpse at its new Quest 3 virtual-slash-augmented reality headset. And let me tell you, this thing has been hitting the gym, much like Zuck himself, because it is both more powerful. It features two times the GPU performance of the Quest. 2 and 40% slimmer than its predecessor as well. So being very Zuck-like right there.

But personally, I think the funniest and best part of this story is that meta dropped these specs for the Quest 3 just four days before Apple is set to unveil its own headset at its developer conference on June 5th. So are you excited to be talking about VR-A-R stuff again, Neil? Yeah, because I'm not ready to bury the metaverse. And it's this shows that meta, I mean, it changes name to Metaverse, that it's still sinking money into this and still investing in products. Meta, people don't maybe not know this, but meta dominates this category.

Crushes it. Like they own 90% of all new hardware sales in the headset category. Now, it's not a big category. I think sales, and it's not even growing because sales dropped 2% last year to about $1.1 billion. And, you know, that's probably what Apple makes in five minutes on. smartphones. So people, this is still very much like a niche product. But meta, they bought Oculus, I think in 2014 or something. And then they changed, they rebranded it when they went to meta and when they went from Facebook to meta and call it just the meta quest instead of the

Oculus Quest. But they are like a monopoly here. I do think that the biggest thing we want to talk about to not only is this new headset slimmer and more powerful, but it's also much cheaper. when you compare it to the other headsets out there. So the Meta Quest 3 goes for $499. Apple's headset is expected to retail for $3,000. So, I mean, Apple can get away with this because they charge a premium for all their products. But you kind of see the differing approaches. Meta wants to be the headset for everyday use.

It's pricing it at a price point that most people can potentially afford, while Apple wants to be like the Rolls Royce of it, like they are, the Apple of the headset division. Some other headsets out there, the Magic Leap two costs over $3,000. That's an AR headset. And then also, META does have a higher price MetaQuest Pro, which starts at $1,000. So kind of just gives you a sense of where these headsets are being priced and where Apple wants to enter the market. Meta is probably happy that Apple is entering the market because they're a $3,000 headset

versus a $500 headset is like, you know, a Rolls-Royce versus a Toyota. Yeah. And, you know, they can coexist in the same ecosystem. But maybe Apple will produce this halo effect around this hardware. And people will be like, yeah, Apple's getting into it. I want to try one. Yeah. So we'll definitely talk about this way more on probably Tuesday because Apple is expected

to announce its headset on Monday, which is one of its biggest hardware launches. Yeah, since the Apple Watch. It's first since the Apple Watch. All right, Toby, let's talk Milk Wars because they are raging. Nothing better than the Milk Wars. So I want to set the scene here. In April, the actor Aubrey Plaza, who people may know from her tremendous work on White Lotus and Parks and Rec, appeared in an ad for a product called Wood Milk, where she promotes the benefits of this artisanal,

old-fashioned, and free-range milk made from wood. So you can kind of get where they're going with this. It was mocking plant-based milks like oat and almond milk for saying they are milk when they're actually just nut juice and Sure enough this ad was made by Milk Pep which is this quasi-governmental Dairy Industry Organization That also ran the famous got milk campaigns in the 90s and 2000s This ad got a lot of blowback and the heat ratcheted up further last week when a nonprofit that advocates for plant-based eating Filed the complaint with the USDA accusing the ad of being illegal so there are two ways that this ad may have broken the law. One of them, Milk PEP, is banned from disparaging

other agricultural commodities because it is funded by the USDA. And apparently the government shouldn't be in the business of favoring, you know, milk, dairy over nuts. You shouldn't choose sides. You can't favor one commodity. And the other potential violation is that Milk PEP is accused of trying to influence government policy. So currently the FDA is considering labeling guidelines for plant-based milk and milk pep is allegedly trying to, you know, meddle in this debate. There's so many layers to this. I know that I often say that about stories, but the milk battles truly have a lot of layers to it. First of all, I'm a little disappointed because I watched this Aubrey Plaza ad. And at first, you don't know it's satire. And I was kind of on board.

I was like, all right. Like, I'm with you, Aubrey, but then at the end, she goes like, right, is this real? No, this is not real. The only real milk is real milk. So, Aubrey, if you do, or Audrey, if you do want to sell wood milk, I'm your first customer. But yeah, the milk first non-milk battle has been raging over the last, like, decade or so, honestly, because the most recent conflict before this one was back in February, the FDA issued guidance saying that products labeled as milk do not have to come from an utter, and that was a really big deal, because the dairy industry has long argued that plant-based milks should be called, shouldn't be called milk.

They should be called beverages or, as you put it, nut juice. Yeah. So there's a lot of back and forth between these two. Like the dairy industry is very powerful with its advocacy and, like, lobbying. Just for some stats to back to how plant-based milk is kind of growing and dairy is not growing. So last year, plant-based milk sales grew 8%. And now they account for 16% of all fluid milk sales, which, I guess if you asked me to pick a number, I'd probably say around that.

And meanwhile, U.S. dairy consumption has just been plummeting. It fell by more than 25% from the mid-90s to 2018. It's funny because I think people are drinking less milk, but they're making up for it by eating way more yogurt and cheese. So the market overall for dairy has kind of been similar. But actual fluid milk sales have declined. But we know that big dairy is one of the most legendary marketers of all time. and it is not going to go down without a fight. Yeah.

I love the got milk ads. I know that's an unpopular take to love what Big Dairy is doing, but, oh, man, they're just so iconic. It is one of the most iconic. You do know, the first Got Milk ad aired in 1993, and it was directed by Michael Bay. Oh, my God. Was there explosions?

There's explosions. Absolutely. All right, that's your update on the milk battles. Before we jump into our next story, 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

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You in? Must be 21 to enter. Okay, Neil, we are back with yet another Friday segment, Stock of the Week, Dog of the Week, where Neil and I pick out one company that outperform the overall market and one company that didn't to tell you all about. As always, we are just humble podcasters, so please don't take any of this as financial advice. If you want great stock picks, maybe hair and makeup can help you out in that department. But anyway, I'm up first, and my stock of the week is actually not one stock, it's big tech. Companies like Apple, Microsoft, Alphabet, Amazon, and of course, Nvidia, have been putting the team on their back and muscling

the broader market ever higher, despite all sorts of economic headwinds. Here's how crucial big tech spin. The S&P 500 is up 8.9% so far in 2023, but without those five companies I mentioned above, it would be up just 1.5%. And then if you also go a little further and remove meta, who's up 120% this year, and Tesla, who's up 66% this year, the market would actually shift into negative territory for the year. Kind of crazy. There's 500 S&P 500 companies, but only five to seven of them have really for any of the gains. This is definitely good for people who have retirement funds and mutual funds because

you definitely have all of these stocks in there. So you should be kind of rooting for them. Yeah. If you check your, yeah, if you check your 401K this year, you know, this year over a few months ago, it's probably way up because. you know, everyone has Apple stock. I'm just going to run through exactly how much everyone's up because it's wild when you consider that these are trillion-dollar companies for the most part.

Apple's up 36 percent. Microsoft 37 percent. Alphabet, which owns Google, up 39 percent. Amazon 44 percent. And as I mentioned, meta, 120. This is for the year. For the year. And Nvidia up 159 percent.

Yeah, I mean, these companies were brutalized last year because. when interest rates go up, it usually hits tech companies first. And these, you know, these companies, I'm not even sure if they're back up to their 2021 peaks during the pandemic. I don't think they are. So this is, they're still in their rebound stage, but it has been a very. Yeah, it's been great. I mean, they're, they're, they're right. Yeah, they're patent AI on the back. It's definitely been putting the right. So I guess the question now is, is this an AI bubble that's driving this higher or is they're actually like a sustainable growth here. So we'll see if there might be a correction in the future. Let's go to Dog of the Week, which is a stock that just did not do well. And I'm going

with Dollar General. Its stock is down more than 20% this week after reporting really brutal earnings. It said that its customers were pulling back on their spending and it cut its 2023 financial outlook. Now, you probably wouldn't talk about this if it was just about Dollar General. But this is just an overall bad sign for the economy because think about it this way. When shoppers at Target or Macy's or any other middle or higher income retailer are feeling less confident in their financial situation, they do what's known as trading down. So they shop at places that are cheaper when they're feeling the pinch. But when people don't shop at Dollar General because things are precarious in the economy, they don't spend at all. So Dollar General CEO said its customers were increasingly dipping into their savings and credit cards and also going to go.

to food banks instead of shopping. So that spooked economists and Dollar General investors this week. There was also other bad news separately for Dollar General. Employees protested outside its annual shareholders meeting because of what they say are kind of egregiously unsafe working conditions at these stores. The crazy stat is since 2014, there have been 49 workers and customers killed and 172 injured at Dollar General stores. So Dollar General said it was going to review.

at safety policies after this outcry. Dollar General is a canarian and cold mine, kind of a litmus test for the broader economy as a whole, and then also, I guess, the safety of retail workers. So, yeah, even though it's one company, it does speak to the broader economic environment. So you never want to see

Dollar General. Retailers are not doing really well. Right now, there was one that just popped yesterday that could have been a dog of the week, which is Lulu Lemon. Or stock of the week. Stock of the week. Stock of the week, yeah. Absolutely. So maybe next week. Lulu's doing okay.

Yeah. All right, Neil. we have yet another segment to finish off the show this week, big segment show. We're calling it Weird Week because, one, we love alliterations. And then two, we both consume a ton of news stories throughout the week and inevitably come across some stories that are little too out there to be included in our normal everyday programming, but they're too funny or too weird to ignore. So we're going to take you through some of those. I'm starting off.

My first weird story of the week involves a group of people who want to create. create a longevity state. These are investors, billionaires, scientists, and other pioneers who look at aging as a problem to be solved. And if only they were freed from regulation, they can make huge progress around this idea of anti-aging. So where are they looking to set up this longevity state? Good old Rhode Island, the state I went to college in, actually. They want to settle in a place like Rhode Island where they can influence policy and basically play by their own rules so they can accelerate this race against aging. And there was this great article in the MIT Tech Review that you should go read in full.

But one of my favorite details is that they're modeling this longevity state on the free state project, which was a movement launched 20 years ago with the goal of encouraging 20,000 libertarians to move to New Hampshire. New England, baby. I know. This experiment did not work out at all, though, because the place that the libertarians ended up congregating had ended up with higher level. of violent crime and also bear attacks.

Live for your die in New Hampshire. I do not want to live forever. Think about it. It's actually... I know. You do not want to live forever, honestly. I really think that's a bad idea. You'll go insane.

What if you're still in this podcast chair, 100 years from now? I love podcasting. I don't know if I could do it forever. Moving on to another weird news story. So a government official in Indiana, or India, sorry, has been suspended from his job for ordering the draining of more than 528,000 gallons of water from a reservoir. Why to retrieve a smartphone he dropped while taking a selfie?

So this guy dropped his Samsung phone into a dam. First, he asked divers to get it back because he said it contains sensitive government data. When that didn't work, he ordered it to be drained using diesel pumps. Now, water is a very sensitive issue in India because it's brutally hot in the summer and they need water. So you can imagine the reaction when social media videos showed him hanging out under red umbrellas while these diesel pumps just drained enough water to irrigate at least 1,500 acres of land.

The worst part is they got it back and then it didn't work. Of course not. It was underwater for the last throughout that escapade. Also, all that for Samsung, I at least do it for 9-5, man. Pixel-Hive. Yeah, there you go, green techs. All right, our next weird story of the week takes us down to Baton Rouge, where the LSU team have done something that I think is awesome.

They are wearing air-conditioned helmets for all practices in games in 2023. So these helmets are from a Louisiana-based company called Fittingly Tiger Air and will reportedly last up to five hours on a single charge. To me, about freaking time. Football is, one, the hottest sport. You're in all this year. You're training in the summer. Yeah.

So it's actually a safety thing because it makes you less liable for heat stroke. And then two, I think it's a great recruiting tactic. you can say like, listen, don't go to Alabama, come to LSU where we give you literally AC on your head. And so this video kind of went viral this week and the players were loving it. They're like, I'm not even going to sweat when I'm playing anymore.

I'm just curious why the NFL hasn't done it over. It seems so obvious when you think about it. Maybe it's because most college football teams play outside. Like this thing about the New Orleans Saints who are in the same region, they play inside in a heat, cool, regulated place. There's already AC pumping into there. And, you know, football seems I never played, but you have to start practicing in the heat of the summer.

And in Houston and Louisiana. I just can't even imagine. All right. Final weird news story. There are about 800,000 people driving around Maryland right now whose license plates advertise a website for an online casino in the Philippines. I'll explain how this happened. So in 2012, Maryland redesigned its license plate to commemorate the 200th anniversary of the War of 18, and they remain the default license plates for the next four years.

It issued almost 800,000 of these license plates. And Maryland takes their War of 1812 very seriously, let me tell you. Okay, so here's where it gets weird. Printed at the bottom of these license plates, there's a URL www. www. star-spangled 200.org. At one point, this website talked about the origin of the Star-Spangled Banner, which Francis Scott Key wrote during the War of 1812 in Baltimore. But within the past few months, that domain name has changed hands.

So it now redirects to a site named Globe International.Info that shows a woman wearing a bikini advertising this Filipino betting site. I mean, I guess anything to make a buck, I kind of respect the hustle there to whoever figured out that the domain was like moving on. I don't know if they knew. I feel like it just expired. Someone bought it. No, that's what I'm saying.

Whoever the runs the The betting website Good on them I guess But tough look for Maryland They're gonna they'll try to fix it They have great license plates And great state branding overall All right that is our show

We have to go It's been like I said Just a wild week Thanks so much for everyone Who listen and comment and wrote in If you want to just say hi Introduce yourself You can do that at morning brew daily

At morning brew.com We always check our email A huge shout out to our crew for waking up early with us and making the magic happen. Emily Milliron is our editor and producer. Samantha Velez and Raymond Lue are the associate producers. Dan Bousa is doing Dan Bousa things. I don't really know what he does. Billy Minino is on audio. Hair and makeup moved to Rhode Island to try to live forever. Dan Evan Emery is our chief content officer and our show is a production of Morning Brew. Great week of shows, Neil. Let's run it back on Monday.

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