SpaceX's Civilian Spacewalk & Peloton Back From the Dead?
00:00Many 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, AFLAQ 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 morningbrewerdaily.That's aflac.com slash morning brewdaily.Good morning, Brewed Daily show.I'm Neil Fryman.
00:31And I'm Toby Howell.Today, how economic history could be made at a hunting lodge in Wyoming.Then another billionaire is blasting off to visit space, but this time they're planning tospacewalk.It's Friday, August 23rd.Let's ride.That is a wrap on the Democratic National Convention.Last night, Kamala Harris officially accepted her party's nomination for president and gave
00:58a 45-minute speech.making her pitch to American voters.But ahead of the speech, the internet was buzzing over potential appearances by a special musical guest, Taylor Swift, Beyonce.But in the end, neither showed up.Toby, how did this happen?How did this rumor even start?This turned into a very fascinating case study in how the internet does spread rumors.I mean, it started from a single anonymous blue checkmark account on X with 600,000 followers.
01:28They tweeted out how they were sworn to secret secret.but a big guess was potentially on the cards.But then things really got out of controlwhen the White House political directortweeted out a B emoji,seemingly confirming rumors that it was Beyoncethat would be the surprise guess.But then she walked it back saying the B meant nothing
01:45and used the classic excuse of,my kid accidentally tweeted out.That's always a classic.By that point, though, it was too late.The rumor mail was fully turning.TMZ actually reported it as well.So it was just interesting to see howOnce a snowball reaches critical velocity, it's very hard to put back.
02:03But yeah, no special guess.So if anyone stayed up late, apologies for that.Now a word from our sponsor, Mass Mutual.Neil, you're a sports fanatic.But according to Adelphi University Online,did you know that male athletes out-earned female athletes by 21 times over the courseof their sports careers?And the average pay gap between male and female professional athletes is over $3 million.
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02:53future and build retirement savings, Mass Mutual is on a mission to help protect the financialwell-being of women.Equity starts with knowing the facts.Visit mass mutual.com for more information.Yamava Resort and Casino at San Manuelis California's number one entertainment destinationfor today's superstars.Catch the Jonas Brothers return to the Yamava
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03:37where everyone in the business world is locked inwith the focus of a 10-year-old playing Mario Kart.That's because the resort town is currently hostingthe most important economic event on the calendar.And later this morning, Fed Chair Jerome Powellwill deliver what may go down as a history-making speech.To learn why, rewind to 2022,The economy was hotter than gas station coffee.
04:01Job growth was surging, but so was inflation.At his speech at Jackson Hole that year, Powell warned that he had no choice but to jack up interest rates to tame inflationand warned Americans that they'd feel economic pain as a result.The S&P 500 plunged 3.4% that day.Fast forward two years, and the pain that Powell predicted hasn't really materialized.In the span, the Fed raised interest rates to 23-year highs to slow the economy.But consumers powered through, the job market was resilient, and inflation has dropped to almost normal levels.So today, Powell will sing a totally different tune than two years ago.
04:37We'll likely talk about the plan for lowering interest rates.While inflation has been put on a leash, the job's picture is showing signs of weakness.So the Fed's priority has shifted from inflation to preventing unemployment numbers from growing.Toby, what do you expect to hear from Powell today?Well, one key stat that I will be looking at is in Jerome's, Powell,Jackson Hole speech last year. He used the phrase labor market just 13 times. Compare that to hisuse of the word inflation, which he said more than 40 times. I would imagine that the patternwill be reversed this time around the labor market and the revision that happened earlier this
05:12week is definitely the most important things right now for Powell. But I think you're right. It'shelpful to go over what has happened since the last Jackson Hole speech. And I mean, the employmentstate rate sat below 4%. Now it's ticked up to 4.3%.Before that meeting a year ago, more than 200,000 jobs had been added in August.This latest jobs report in just 114,000 jobs have been created.So it's very interesting to see the parallels from 365 days ago.And definitely, inflation is not probably the top priority on Jerome Powell's to-do list right now.Right.
05:49So investors will be looking to hear what he has to say about lowering interest ratesand more specifically how fast and how much he will lower.interest rates. He's not going to be very specific about this. Most Jackson Hole speechesare actually more high-level, long-term intellectual economic policy stuff. And he doesn't reallytalk so specifically about, you know, the path for lowering rates or increasing rates. That's justnot like what happens at this particular speech. But given where we are at this crossroadswith interest rates, he might signal, you know, whether the Fed will be more gradual with theirinterest rate decreases over the rest of the year, whether those are 25 basis points, which is the
06:30standard amount you cut or raised by, or if he gets more aggressive, and this would be becausethey are actually really concerned about the labor market deteriorating very quickly. They couldbump that up to potentially a 50 basis point, increase, a decrease, and that would signalsomething way more aggressively. And if he says that they will need to be more aggressive,I don't see, you know, the stock market reacting pretty well for that. I am also interested in thetone Powell is going to strike because are we lowering rates to get ahead of weakness or are wereacting to weakness? So in other words, are we taking, is the Fed taking preemptive actionrather than reactive? Typically, their moves have always been the latter and it's just over history.
07:10It's mostly like we have seen this data and now we are reacting. This is like we're seeing cracksforming. Do we want to get out ahead of it? So it's a slight nuance there. But I think the sizewill also tip us off to what he's actually feeling just to zoom out to the stock market too.remember we're sitting close to all-time highs despite the like the bloody money that we had a fewweeks ago and that has been we've been kept afloat by the belief that rate cuts will be confirmedtoday and that it's also been a pretty solid earning seasons if anything is hinted at to thecontrary that's when we might see some faltering we might see the stocks that have been keptafloat by this this hope kind of be deflated a little bit so that's just another thing to
07:49keep an eye on yeah a truly pivotal speech today but it is also one worth wondering likeWhy are they in Jackson Hole?I mean, this is a hundred of the top economic officials, not just in the country, but around the world.They all fly out to Jackson Hole, which is this resort town in the Teton's in Wyoming.Like, how did the center of the economic world get there every single August?And it's because the Kansas City Fed was putting on this more agricultural conference every year.But they wanted to sort of beef up their speaker list.So they wanted to get Fed chaired Paul Volker at the time.
08:21This was in the 80s.and they're like, how do we get Volcker to come speakat our little conference here?So he is a very avid,he was a very avid fly fisherman.So they thought, okay, let's put it in Jackson Hole.Like, this is the fly fishing capital of America.Maybe that'll convince him.
08:36And sure enough, he just shows up with his fly fishing gearon that first day, ready to speak.I love that story.Some people are good at walking on water.Some people want to walk on sunshine,but tech billionaire Jared Isaacman,he wants to walk in space.And as is usually the case when you're a billionaire, Isaacman is getting his wish.
08:55On a space X mission dubbed Polaris Dawn that is expected to launch this upcoming Monday,Isaac Man and three others will push the boundaries of what civilians have done in spaceby attempting a spacewalk for the first time in civilian and space X history.Isaacman is funding part of the mission alongside SpaceX and will spend a total of 15 to 20 minutes outsideconducting experiments and testing out new spacesuits in the process.This is a big deal for everyone involved, but especially SpaceX.It has plenty of experience with human spaceflight at this point,launching nine crewed NASA missions and four private crew ones since 2020.
09:34But a civilian walking in space, it's a whole different ballgame, Neil.This is the total opposite of the joy rides we've seen billioners take to space.So I looked up how high a blue origin flight goes.This is what, like William Shatner,Michael Strayhan, Jeff Bezos, have done before.That goes to 62 miles above the Earth.Where this spaceflight is going, they're not doing the spacewalk,but they're going as high as nearly 800 miles above Earth,
10:00and they're doing this spacewalk around 430, 435 miles above Earth.This is just complete leaps and bounds, way more significant, way more risky.It's actually pushing the envelope forward with what we can do in space.So this has, like, think of the space tourism stuff, let Blue Origin and Virgin Galactic are doing as completely different than what's happening here, which is a very ambitious thing for any astronaut to do, let alone, you know, from a government agency or a billionaire.There was a lot of hurdles to this mission, too, because it's very complex. One big hurdle is the suit itself.SpaceX wanted to develop a suit that could obviously withstand walking outside in space, but also they wanted a much more freeing suit where you can move around.more easily than maybe the bulky ones we've seen in the past.Also, you have to reinforce much of the interior of the actual spacecraft,
10:54which is the crew dragon, because to spacewalk,they're literally just going to open the doors,and everyone inside will be exposed to the vacuum of space,not just the person's spacewalking.So that's a big thing.Another thing you have to worry about is solar radiation.They're traveling so high that if a particularly big solar flare hit,it could bombard everyone with these dangerous,
11:14charged particles. So that's just another thing that you don't have to worry about if you're only62 miles above space. But as you get further and further out, it becomes more and more dangerous.So just a lot of logistical things to think about. But obviously, we call space a new frontier,but this is pushing the frontier even further, especially for civilians.Yeah, I mean, as soon as they get to space, before they're doing this spacewalk,they have to start this pre-breath process, which will take 45 hours. And it's basically what,or it's a very exaggerated version of what scuba divers do because of decompression sickness to get ahead of that.So they need to purge all of the nitrogen from their body through, I don't know what this process looks like.
11:53I haven't watched YouTube videos.But over 45 hours, they need to do these breathing exercises to purge all of the nitrogen from their bodyso that when they go into space, it won't cause sickness.So that is a big part of this that they've been practicing for over a year now.Right.Because SpaceX's longtime goal, like this is Elon Musk's big thrust for the entire project.is that he wants to get thousands, hundreds of people living and working in space,but right now a huge amount of people are affected by space motion sickness.
12:2160 to 80% of all space travelers experience this.And they've just candidly said, like, if we don't solve the space sickness problem,you have 60 to 80 people throwing up.That means everyone else is throwing up too.We're never going to become like a multi-planetary species.So you're right.That is a big priority for this particular mission.Yeah, they are going farther than any astronaut has gone since the 19th.
12:4270s when the Apollo missions went to the moon.So meanwhile, those two astronauts are still on the ISS.They're going to wave.They're going to wave when they go by it.Maybe we should bring them home sometime soon.Sports drafts are as American as Apple Pie.All the teams get together.And one by one, they pick out the plucky youngsters to join their squad and hopefully
13:03lead them to a future championship.But one American League is doing the unthinkable.It is getting rid of the draft.In its new collective bargaining agreement with players, the National Women's Soccer League is eliminating its draft, becoming the first U.S. Pro League to take this monumental step.So why not, why no longer draft players?Well, the NWSL says that drafts are designed to limit young players negotiating power and force them to play for teams they may not want to.Instead, it wants to maximize player freedom.But there's also a business strategy to this also.
13:38So the NWSL is in a fierce competition for overseas soccer player talent.And the Europeans, they don't have a draft.Players there are consigned with teams they want to play for.In fact, players who have been drafted by NWSL teams have left the country to play abroadbecause they thought it would be a bad fit where they were drafted.So by eliminating the draft, the league wants to put itself on the same competitive playingfield as top women's European leagues.Maybe an even bigger question, Toby, is, will this move spur other U.S. leagues to re-es
14:08think their drafts as well. It is a wildconcept because you're right. Drafts are justsuch an inherently American thing. It feelsweird to think about leagues without them,but a draft is a little bit ofa bizarre concept. As a player, youhave no say over where you'regoing, where you're about to apply your trade, where your
14:24career is going to take off, and oftentimesplayers get put in these bad situations.Like the Jets. If you getdrafted by the Jets, like you have toplay there. That's turning around there.It's not the worst place to land these days.But yeah, essentially the NWSL looked at and said this is a very antiquated model.The initial idea behind draft was to make it so all the best players didn't flock to all the best teams
14:46that helped maintain's competitive parity.But what they're doing instead is just empowering players.They're saying this is the new era that we want to enter into.This is what the world is doing.Let's do it here in the NWSL.It's definitely a little bit of a risk because potentially all the best players say,I want to go play for Angel City FC.I want to go get the biggest contracts.
15:06That is how the rest of the world operates when it comes to soccer.They'll still have salary caps.They'll still have things that do maintain a bit of competitive parity.But I think player empowerment is never a bad idea.So this is great from the NWS.Yeah, I mean, this is just an acknowledgement that they operate in a very different landscapethan maybe other sports leagues in the United States that are more monopolies.I mean, the NFL is a monopoly over its sport.
15:30Like, no other player is going to play for a football squad outside of the,NFL so they can have this draft.I don't think the NFL draft is going anywhere.It's like a multi-billion dollar event now where400,000 people are comingand millions more are watching on TV.But the NWNSL isNWSL
15:49is competing with aglobal labor market. There are topEuropean leagues and top European teams, andthey're in a fight for talent. So they reallyhave to boost their game andhand over more concessions to players toin this big rivalry for talentbecause a top Brazilian player
16:06can either play in England or Franceor they can play in the NWSLin the United States. So that is a big reasonwhy they're ditching the draft. And Ido just want to say, we talked aboutJerome Powell either taking proactiveor reactive action right now.I think the NWSL is taking
16:22proactive action because it is stillone of the top leagues in the world. We have to be clear aboutthat. I mean, if you just go back to the Olympicfinal in Paris, 26NWSL players featured in thatmatch, obviously the U.S. was playing there, so it'sskewed. But it is still very much a topleague. They want to remain so and they think that this
16:37is the path towards doing that.Up next, we got Stock of the Week, Dog of the Week,coming your way.It's time to refresh your yard during springbackyard days at the Home Depot.Get low prices guaranteed on propane grillsstarting at $179, like the next grillthree burner gas grill, or get $50 off
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17:13slash price match for details.You said this place was steps from the water.We just haven't found the steps yet.How much did we save?Enough.Enough to get lost.Or you could book a stay with Hilton.Welcome to your oceanfront room.
17:30Just steps from the water.The Hilton sale is on now.Book on Hilton.com or the Hilton appand save up to 20% to get this.stay you expected. When you want savings, not surprises. It matters where you stay. Hilton for this day.Welcome to Stock of the Week, Dog of the Week, the Friday segment where Toby and I pick one stockthat's as crisp as the cold beer in your fridge and another that's as stale as the one sittingin your trunk for four months. I don't think this company has ever been stock of the week before.
18:04So put your hands together and please give a warm morning brew daily welcome to Peloton.We've got a pulse, folks.The fitness company that has utterly collapsed since peak COVID had its best day ever on the stock market yesterday with shares skyrocketing 35%.That's because investors saw signs of that long-awaited turnaround in its latest earnings report.Losses came in less than expected, while sales grew for the first time in more than two years.Peloton's revival strategy hinges around this thesis.Not many people are buying our new bikes fresh off the lot.So how do we make money from the ones already in the wild?
18:43Facebook marketplace is flooded with old Peloton bikes going for at least $1,000 cheaper than the retail price.One idea.Focus on the Peloton app that costs $44 a month.Get people hooked on classes that don't require actual hardware.This seems to be going pretty well.Though hardware sales fell 4% last quarter, subscription revenue grew 2.3%.Okay, here's another idea.Find a way to get a cut when some...
19:09Someone sells their used Peloton bike.Aha. Peloton is now requiring a $95 used equipment activation fee that applies to people who buy a Peloton machine directly from a previous owner.Toby, this company's CEO resigned in the spring and it just had its best day ever.Maybe Anarchy is the way to go.The funniest part about this whole stock jump to me is that the sales growth that we experienced for the first time, it was 0.2%.So you'll take what we can get.Hop on those stationary bikes, folks.We are going to the moon.
19:42But I get it.I mean, first year over year's revenue growth since 2021.Also, when they did it was significant, too, because sales are typically lower in the summer.I mean, everyone is, this is what kind of crushed Peloton the first time around that everyone said,wait a second, I can go work out outside.Like, I can go experience the sunshine.So they did it in the summer when most people are out and about focused on traveling.It's not even the holiday period.
20:04So I'm back, baby.be like, it's been, Peloton has had a rough go of it recently, but I think that they're making,these cost-cutting measures are finally taking place, and we're seeing a much more enthusiasticinvestor reaction.Enthesious, but you're right.It is a 0.2% sales increase.This company is still definitely in the dumps, and they're working through sort of how tomove forward.
20:26I really think the main question here is what to do with all these bikes that are just sittingin people's apartments that they don't want anymore.I mean, Facebook Marketplace and other secondhand sites are just flooded with.all of these very cheap bikes. One estimate says that around one million Peloton bikes are collectingdust in homes around the world. And so, okay, you're not going to sell these because you'vealready sold them already. But like, if you're Peloton, how do you find a way to make money?So they put this like a $95 activation fee on it, which they say is will lead to a betteronboarding experience. People say that's just essentially a Peloton tax. And another way is,
21:03yeah, leaning into this app, this subscription revenue, which four hardware purchased on the secondarymarket grew 16% year over year. So really dialing on that app and they're really opening uptheir ecosystem to a broader array of players previously. You know, the app and the hardware went sotightly together. It was very aptly closed ecosystem. You could only access Peloton media on Peloton.But now they opened up to streaming services. You can watch, you know, anything, any show whileyou're on your Peloton. Then they just announced a partnership with Kindle so you can read yourebook while you're on the Peloton. So sort of separating the app from the hardware itself, I think,has been a smart decision. And then the final thing I want to call out is that they sell a treadmill.
21:47Sales of that grew 42% year over year, so maybe it's part of the running boom. I don't know.Maybe running will be the thing that saves Peloton.Our dog of the week is Sonos, the maker of high-end audio speakers, but very low-end, oftentimesdisastrous software.It recently rolled out its new appthat has angered its loyal user base,destroyed the company's reputation,and cost it a lot of money.
22:11The release of the new app to control its speakersback in May was supposed to be the crown jewelof CEO Patrick Spence's planto turn around the companyand snag a bigger share of the $100 billion audio market.But the new app was way worse.We could fill an entire pod with its shortcoming,but to name a few,
22:29the sound drops in and out randomly,volume turns up to the highest level than couldn't be adjusted.Devices would just disappear on the app randomly,and even basic features like setting an alarm or a timer were missing.Neil, in the specialist audio business, customers are loyal, but a vicious bunch.If they turn on you, you are done.And Sonos' stock is down 35% since the new app came out.This company can't really move forward with anything else until they fix this app.
22:58They've also delayed two new product releases.which would have been perfectly time for the holiday.People love buying high-end speakers for gifts for the holidays.And this is a complete disaster.They've lost almost $30 billion on this debacle so far.So all of their resources need to be going to fixing this appinstead of pushing the company forward in other directions.So this is a big, you know, egg on the face of the CEO.
23:24He's apologized multiple time.He said, my push for speed backfired, they released this app.before it was ready. There's been so much pushback in this high-end audio community, which is veryfickle and they can turn on you if you don't deliver a product. And Sonos has had a great reputationfor a long time. I mean, it's considered one of the best speakers. If you want to outfit your homewith just like the best audio quality, that is, you turn to Sonos. There's a very active subreddit.And the CEO went on that subreddit earlier this week, really into the Lions Dead to try to answerquestions and the people pounced on him. And he just had to keep saying, we're sorry,
23:59we're working on it. We think we fixed a few bugs. We're going to keep releasing updates everytwo weeks. But it really is make or break for this company because their stock is down.There are plenty of other companies developing products like this, and they just need to getgoing with their product cycle again and not stop focusing on this stupid app that they releasedand butchered. Some analysts say that if they can figure out the app, Sonos still is the best inclass for especially multi-room setups. No other smart speakers on the market does it quite likeSonos does. So they still, remember, it's a very loyal community. They've been burned right now,but if Sonos can get its act together, I think potentially people still like this company.
24:38Like, it's still a very loyal audience. You just have to win their trust back.Now, let's move from high fidelity audio streaming to chicken streaming.Chick-fil-A, purveyor of nugs and waffle fries, is dipping into the streaming game. Yes.Chick-fil-A is launching a streaming service.Deadline reported that it's working with a few production companies in studiosto create multiple original shows for a streaming platform that would come out later this year.Initially, Chick-fil-A plans to lean into family-friendly content,including a rumored game show, but eventually they want to broaden out to original series,
25:13animation, and add some licensed content down the line.Neil, as I am saying this, I keep forgetting,we are talking about a restaurant chain here.If I was Netflix, I'd be watching my back because for all its programming, it doesn't have Chick-fil-A sauce.What is going on here?Okay.Okay.So let's just start with the basics.
25:33Chick-fil-A is not the first non-media, non-streaming company to get into media.This is a playbook that's been developed by Airbnb and Lyft.And recently Walmart bought Vizio, which is a smart TV maker, to get into this streaming space.That said, I don't get it.You're going to have to explain it to me.Is it to sell ads on the streaming service?But it also comes at a time like when streaming is contracting.Companies are spending far less on shows because there's so much competition.
26:04Everyone's already subscribed to every platform that they're already going to be subscribed to.So I just can't imagine anyone is going to be watching a Chick-fil-A game show when there's so much other content to watch.So please, what's the argument?Well, I won't start with the argument.And I'll actually start with why this is not so far fets for Chick-fil-A to actually do.Because remember, Chick-fil-A is owned by the Kathy family, whose family trust was actually big in the foundation of this company called Trillis Studios, which is this Atlanta-based studio that has worked very extensively with Marvel.So they do have some entertainment industry pedigree.They have the infrastructure to potentially set this up.
26:41But I think you just have to, we're saying streaming platform, which is what is tripping a lot of people up.But if you think about it, like you mentioned Airbnb, these companies have produced one-off shows in the past to just showcase their product.And I think Chick-fil-A is saying we want to be known as like this family-friendly, this southern, this welcoming place.Like, let's create some family-friendly content to just broaden the brand.So I would think about it more as a brand play.That being said, though, they did say that they wanted to buy license content.So maybe they are leaning into the streaming platform at all.It is a bit bizarre, but they have the ability to pull it off.
27:15they want to increase like their brand in terms of reputation,how many people can come in contact with it.So yeah, it's, it is weird, though.You have to remember, it's chickplay.It is a restaurant chain at the end of the day.Yes, let's wrap it up there.Thanks so much for starting your morning with us.Have a wonderful Friday and an even better weekend.
27:38For any feedback or questions,open up your email and fire off a message to Morningbrewdaily at morningbrew.com.and you are all our best promoters,so please spread the podcast with your network.Toby, who should our listeners share it with today?I want you to share it with a cousin you haven't spoken to in a bit.Preferably the cool one, but we'll take any cousin.Use it as a chance to reconnect.
27:59We're all about bringing people together here at MBD.Cool. Let's roll the credits.Emily Milliron is our executive producer.Raymond Liu is our producer.Olivia Graham is our associate producer.Yuchinawa Ogu is our technical director.Billy Minino is on audio.Hair and makeup is on the mom.
28:13market for a used Peloton if anyone has one lying around. Devin Emery is our chief content officerand our show is a production of Morning Brew. Great show today, Neil. I wish you all well.
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