Morning Brew Daily - Stock Market Hits Record High & Gen Z Loves Saving For Retirement

Episode Date: June 30, 2025

Episode 615: Neal and Toby explain what's behind the stock market's recent record performance. Then, what is the latest on Trump's Big Beautiful Bill and what it contains. And why Meta is willing to pay top dollar for the best in the AI biz. Then the winners of the weekend are the seafood industry and Gen Z... because they are in the housing market and retirement! And finally a look at the week ahead. 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. Visit ⁠endthecampaign.com ⁠for more Listen to Morning Brew Daily Here: ⁠https://www.swap.fm/l/mbd-note⁠  Watch Morning Brew Daily Here: ⁠https://www.youtube.com/@MorningBrewDailyShow 00:00 - End of the first half of the year  03:00 - Stock Market Ripping  08:00 - Big Beautiful Bill  12:30 - AI Race War Heats Up 18:40 - Gen Z in on Finances  22:00 - Lab-Grown Salmon  23:40 - Week Ahead Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewAI. Good morning, Brew Daily Show. I'm Neil Fryman. And I'm Toby Howell. Today, why Elon Musk called the Senate's tax bill utterly insane. Then stocks made it back to all-time highs quicker than you can say Liberation Day. It's Monday, June 30th.

Let's ride. Good morning, Toby, I can't believe it. But today, June 30th, is the final day of the first half of the year. And the good news is that a much-needed halftime break is coming very soon. July 4th arrives at the end of this week, which means the window for let's circle back after the holiday emails opens this afternoon. Can't wait to fire a couple of those off. Toby, six months in the books for 2025, fast half year or slow half year?

It's always a fast first half of the year. But I also just want to reminisce about all the random stuff we never could have foreseen coming into this year. We got an American Pope, which, has led to multiple pictures of His Holiness wearing a white socks hat. Never saw that coming. I learned what a Laboubu doll was and wish I had never laid eyes on those freaky little things. I'm also just thinking about all the previous meaningless words that everyone now knows. Deep Seek, Liberation Day, chicken jockey. Wish I never had chicken jockey in my brain. But yeah,

it is time to head back to the locker room, have a little reset, eat some orange slices, retape the ankles, and get back out there. Can't wait for the second half of the year. year. And now a word from our sponsor, Iterable. Neil, you're a group chat guy. I see you discussing show topics with your college friends, but everyone's on a different time zone, right? Oh yeah, I'll drop a banger of a trivia question at 7 a.m. after we wrap up the show, and eight hours later, someone chimes in with the answer. But they always get it right because your friends are smart. But that's also what marketing feels like when you're locked into fixed campaigns. You might send a message when you're ready because your campaign calendar says so, but it might not be when your

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While supplies last, ends June 30th, terms at AKA.m.m.S. College PC. The U.S. stock market has faced no shortage of curveballs lately. Trade wars, Middle East tensions, and tariff. threats, but investors are seeing the ball well, and on Friday, cleared the bases sending the market to a record high close. It is a stunning rebound from the multi-trillion dollar sell-off that followed April's announcement of sweeping Liberation Day tariffs. Market searched early Friday after Commerce Secretary Howard Lutnik announced a finalized U.S.-China trade framework and hinted at imminent deals with 10 major partners. But the rally hit a speed bump after Trump posted on true social that trade

talks with Canada had been terminated. The volatility is nothing new. Wall Street has been ragged all around for month by conflicting signals. Business-friendly headlines one day, aggressive tariff moves to next, and yet zoom out and the trend line is unmistakable. Up. The S&P 500 is now up more than 20% since bottoming out on April 8th and nearly 5% on the year. There were just 89 trading days between bottoming out and reaching an all-time high, the fastest ever recovery after a decline of at least 15%. Along the way, investors have weathered rising oil prices, surging yields due to debt concerns and fresh anxiety over China's AI advances. But through it all, the U.S. economy has held strong with low unemployment, only modest signs of labor softening

and inflation data suggesting tariffs have had little effect on prices so far. Neil, despite the chaos, markets just keep on climbing. What is behind the rebound? Well, the last few days are an microcosm of what we've seen. in the first half of the year. You mentioned that Trump called off trade talks with Canada over this digital services tax on U.S. technology firms. Well, last night, Canadian Prime Minister Mark Carney said that that tax is gone and that trade talks are about to happen again.

Meanwhile, futures are surging this morning. So this trade whiplash that we've seen over the past few days has been going on for the past six months. And every single time that it appears that this worst case scenario is going to happen. There's going to be massive tariffs. There's going to be no discussions between countries that has just never come to pass. So if you've bought the dip, you've been rewarded. So people are just going to keep buying the dip until it doesn't work anymore. There were some analysts who believe that the dip never should have happened to begin with,

though, Art Hogan, who is a strategist at B. Riley wealth management. He said the sell-off never should have happened. There was no need for that. It was a completely manufactured crisis because the market wasn't yet attuned to Trump's, you know, kind of threaten and then roll back sort of cycle right there. And another clue that investors are pretty bullish overall in the market as a whole is that what is the S&P's top performing sector this year? It is industrial stock. That is a sector of the economy that is very attuned to the strength of the economy. Industrials have risen 11%. That's more than double the gains of the broader S&P 500. So there are clues. here that investors do think the fundamentals are still in a very strong place, despite all the

trade war shenanigans going on. And it is not just technology firms that are driving the S&P 500. This year, you mentioned industrials is the biggest gaining sector. Well, what's the best performing stock in the S&P 500 since that last high on February 19th? It's not Nvidia. It's not Microsoft. It's not any industrial company. It's Dollar General, which is up around 15%, which isn't an outlier because its rival Dollar Tree is the 13th best performer and the S&P 500, which is up around 30%. So those discount chains have exploded recently. And maybe that's not a great sign because that's a sign that people are trading down in what they're buying and not going to bigger retailers and they're going to these dollar stores,

which are absolutely surging. Still, challenges do lay ahead. I mean, July 9th is the date that everyone has circled because that is when the 90-day pause on most of these tariff deals is lifted. So if no deals are forthcoming, then we could see some shakingness happen. Still, there is all this uncertainty in the Middle East that hasn't gone away. And then also valuations are pretty high right now compared to historic norms. S&P 500's price to earnings ratio is over 23 right now. Historically, that's been around 19. So stocks are, quote, quite expensive when you look at price to earnings.

ratings ratio. So looking ahead, too, we got a jobs report coming later this week. We'll see if the underlying data still supports these frothy valuations that we're seeing in the market as a whole. Every employee across the United States is sprinting to wrap up projects ahead of July 4th this Friday, and that includes the Senate, which narrowly voted Saturday night to advance the GOP's gigantic tax cut bill that President Trump demanded be passed before the holiday break. The Senate's 940 page, one big beautiful bill act largely mirrors the House version stuffed with a Costco-sized pub mix of Republican priorities. The centerpiece is $4.5 trillion worth of tax cuts that extend Trump's cuts from 2017 and tack on new ones, including deductions for taxes on tips and overtime.

Among other things, the bill will also ramp up spending for defense and immigration enforcement, scale back Medicaid and food stamps, and wind down tax credits for EVs and other renewable energy projects more quickly than the House version. And Elon Musk had a few things to say about that last part. In a series of ex posts on Saturday, the Tesla CEO and top Trump campaign donor ripped into the bill for its phase out of green energy tax credits while labeling the bill, quote, utterly insane and destructive. He said the measure would give handouts to industries of the past while severely damaging the industries of the future. He and renewable energy advocates say that cutting off tax credits for solar and wind development would rate.

electricity prices for Americans, seed energy dominance to China, and hamstring the U.S. is electrical grid at a time when AI data centers are supercharging demand for power. On the other side, President Trump has called green energy tax credits a giant scam and said the money should be redirected to other uses, while Energy Secretary Chris Wright recently labeled technologies like wind and solar, a parasite on the power grid. Toby, I think both sides would agree on one point at least. This bill is intended to gut the clean energy industry in the United States. Yeah, Elon is not happy with this because it does represent a total 180 of the U.S. energy policy

over the last few years. Remember, Biden's Inflation Reduction Act laid out all these EV tax credits for consumers, but also businesses as well. And so that is what you're seeing is that a lot of these companies, solar wind companies, had been investing in America and building these factories. But now when these subsidies are kind of ripped out from underneath them, they have a very uncertain future ahead. And then on the consumer side of things as well, maybe you were going to use that $7,500

EV tax credit to buy an electric vehicle, but now prices are going back up. And of course, a lot of Republican lawmakers say, hey, if your industry requires these subsidies to survive, then maybe it wasn't industry at all to begin with, which is some of the reason why you were seeing this pushback to these subsidies. But yeah, total reversing course on U.S. energy policy. Let's talk about the details of what's actually in this. bill. It requires that new wind and solar projects must be placed in service by the end of 2027 for companies to claim a tax credit, which previously amounted to up to 30% of the

project's cost. So it's not that you just don't have to start construction on these projects. They actually have to be in service. It also eliminates the $7,500 tax credit for EVs by September 30th, which is an earlier deadline than the House version. That's just in a few months. And this This next part was a total surprise to the clean energy industry. It got put in the bill on Friday night without any warning. It actually imposes an additional tax on renewable energy projects that receive material assistance from China or other adversaries. This industry runs on Chinese components. The fact that they are going to tax these new projects that contain a significant or any amount of Chinese components is going to stop.

so many of these projects or new plants in their track. So it's not just the fact that they're rolling back these tax credits. It's that they're adding an additional tax credit or an additional tax on top of it. Also, the Congressional Budget Office took a crack on seeing what the Senate package would look like when it comes to you adding to the deficit over the next 10 years, $3.3 trillion in added budget deficits. That is something that Republicans have pushed back on. but they pointed mainly at, you know, these increase in tax cuts, which leads to a wider deficit.

They also said that this version would lead to 10.8 million people without insurance per the CBO as well. So outside of just the energy thing, it does look like it will increase the U.S. debt and then also lead to more uninsured people. When rumors started swirling about META offering $100 million compensation packages to poach top AI researchers, the industry's reaction range from disbelief to outright denial. But after four open AI employees jumped ship to join Mark Zuckerberg's personal superintelligence team last week, it became clear that Zuck wasn't messing around and that he'd do just about anything to avoid falling further behind in the AI race. His all-out recruiting push follows the underperformance of META's open-source Lama model, which failed to keep pace with frontier systems despite being hyped in April

as outperforming rivals. That moment lit the fuse on one of the first. of the most aggressive AI recruiting pushes, Silicon Valley has ever seen, centered around the list. A hand-picked roster of elite researchers Zuckerberg has spent months assembling. In addition to doling out massive offers, META shout out over $14 billion to acquire scale AI and retain the talents of Alexander Wang, a well-connected AI Wonder Kid. Meta also reportedly convinced three other open-AI researchers to jump ship last week and brought on two other power brokers in the industry, Daniel Gross and Nat Friedman. In doing so, Meta has completely reset the AI compensation and recruitment market,

with packages now resembling those of MBA stars rather than reinforcement learning experts. So, Neil, would you rather have Janis on a super mask or Hong U.S. OpenAI's post-training lead for the 03 and 04 mini models? We're reaching movie montage levels here of Zuck going to these various AI researchers at different companies and saying, hey, put out his hand and saying, hey, want to join my team. And obviously, there's a very lucrative offer attached with that. It's an extremely aggressive arms race going on for talent. It's also led to a bit of interesting war of words between executives at Meta and OpenAI.

Meta at an all-hands meeting last week said that Sam is exaggerate. Sam Altman is exaggerating about that $100 million offer claims. and I know exactly why he's doing it, which is because we are succeeding at getting talent from Open AI. He's not very happy about that. That came from Andrew Bosworth, the meta C-O-O. And then Altman replied at a New York Times podcast. He said, it's like, okay, Zuckerberg is doing some new insane thing.

What's next? So they're each dismissing each other here. But it's true that the future of AI and perhaps the tech industry overall is at stake. The fact that these guys are, these AI researchers are getting paid so much, because Zuckerberg and Altman and all these other tech execs think that a single engineer, maybe two engineers, could change the fate of their entire company. Yeah, and the funny part is that it's a very small world. Like all these people know each other.

So when they figure out that they're on the list, they text their other friends and some of them are negotiating kind of these packaged deals like, hey, if I'm coming, Neil's coming with me type of deal. So it's this very weird negotiation strategy. Also, a lot of these people work totally content just a few years ago. to be professors with tenure. But since their very niche talents have become so valuable,

now they are looking down a $100 million contract. So it is just a total reset of this market. What is funny, too, is that a lot of these companies are becoming super, super secretive with how they are, you know, conducting their work at Anthroping

and Open AI researchers, work on separate floors. They're very, you know, cut off from each other and then also at safe super intelligence, another AI firm. Candidates who do interview in person have to put their phones in a fair day cage to block outside signals. So we are seeing like a cold war happening right now. And in the middle of it are these researchers that are just so widely valuable. The other thing, you said that one single researcher could change the trajectory of a company.

When you think about the fact that these companies are selling out billions and billions of dollars, I mean, META plans to spend $60 billion this year just. on AI infrastructure, when you toss in $100 million for one researcher, it doesn't seem that much compared to the $60 billion you're spending on hardware. So that's another reason why we're seeing just these massive compensation packages. Up next, let's talk about our winners of the weekend. Today we helped a latte for Sam coffee shop, get an insurance quote simply and easily, and made sure a floral delivery van was able to make someone's day.

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and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together. Shop spring backyard days for seven days at the Home Depot. Now through May 6th, Exclusion supplies to homedipo.com slash price match for details. Welcome to Winners of the Weekend, the segment where Toby and I picked two things

that delighted everyone with their stories around the campfire. On that note, I won the pre-show Smoor-making competition, so I get to go first. And my winner is Gen Z, because there's no other way of saying this. They are slaying the savings game. According to a 2024 report from TIA, an impressive 20% of Gen Zers are saving for retirement while they're contributing to 401K plans at higher rates than millennials did when they first began working.

They're also more invested in the stock market than the generation that came before it. In 2022, nearly 40% of 23-year-olds own stock, and that's compared to 31% of 23-year-olds in 2007, per the Federal Reserve Bank of St. Louis. That tendency to stash money away has turned Gen Z into a surprisingly major force in the home ownership market. Yes, even in this economy. The cohort of Americans, age 13 to 28, accounted for one in four loans issued to first-time homebuyers in May, according to Intercontinental Exchange. Plus, going back to January 2024, their home ownership rate is outpacing that of millennials and Gen X when they were the same age. Toby, the generation that grew up on Instagram and TikTok are proving to be personal finance

whiz kids. They're putting money away into retirement accounts, saving enough to buy a house, and plowing money into the stock market at rates far exceeding millennials. As a cuspur, does this make you want to identify with Gen Z more? Yes, absolutely. I am totally Gen Z. I don't know what you're talking about, Neil, 1997. Anyway, the reason why Gen Z is better at saving is part policy related and also part just, you know, technological advancement related. The policy chains that I'm talking about was this act that took effect in 2022, that mandated eligible employees be automatically enrolled in their company's 401K plans. That automatic enrollment does wonders for people because it just gets you started earlier without

having to, you know, opt in it yourself. It's just like a human behavior hacked. A lot of people are just going to allow themselves to be auto enrolled and not opt. out versus opting in. So that's one part of it. But then the other part is, you're right. A lot of us grew up on us, as I'm saying, Gen Z, grew up on these budgeting apps, on these personal finance podcast. Money with Katie is a big personal finance podcast. Go give that a listen. And the reason that people resonate with it, because it's just so digitally native to them, Robin Hood is something that a lot of people had downloaded early, which is why we're seeing this greater

participation in financial markets and in saving. And there's an interesting, uh, gender reversal that's happening with Gen Z, which is encouraging to analysts. So typically, women have about 30% less money in retirement than men. According to that TIA report, for Gen Z, women, 54% were saving more for retirement than in their 401 case, then Gen Z, men at 44%. So we've seen a bit of a gender reversal here. But yeah, maybe it's just these new tools and these new ways of empowering yourself via various resources and apps to save.

And you can't overlook that policy response. It was laid out in this book called Nudge, which is a micro-economics, freak-in-type book where it says, yeah, you have to have people opt out of something instead of opt-in, and that will lead to much greater participation. My winner of the weekend is lab-grown salmon

because it could be coming to a restaurant menu near you. While multiple lab-grown meat products have gotten approved by the FDA, the startup wild type is the first to bring a synthetic salmon to the alternative protein market. So in addition to debating between wild or farmed at a grocery store visit, you might have to soon add another option growing to contend with. Once it nabbed FDA approval in May, a Haitian restaurant in Portland called Khan recently became the first to add synthetic salmon to its menu, serving it raw with pickled strawberries and spiced tomatoes.

Unlike plant-based alternatives, cultivated seafood like wilds, wild type is made from animal cells, Pacific salmon cells to be specific. They are put in steel tanks housed in an old microbrewery, fed a nutrient-rich slurry, rinsed, mixed with plant-based ingredients for structure, and turned into a 220-gram filet in just two weeks. That's compared to the two years it takes a real salmon to mature. Proponents of the lab-grown approach note that global seafood demand is set to rise nearly 80% by 2050, putting immense pressure on fisheries. not everyone is convinced, namely consumers who still get a little weirded out by the taste and texture. Neil, would you bat an eye if a samlet appeared on your plate who was made from slurry

rather than swimming? I think I would. People are pretty particular about their fish. Anthony Bourdain even said there are particular days of the week where you're supposed to eat fish in particular days of the week where you're not supposed to eat fish when it comes in a restaurant. So for all of the hurdles that are facing lab-grown meat and plant-based meat, and there have been many challenges. This industry has not grown like what like it was expected back in 2019. I think there will be even more hurdles for lab grown fish. So we'll see what happens with this particular pilot in, uh, in the restaurant in Portland. It's Monday. You're probably planning out your week. So here are the major events to know about. On Friday, Americans will declare their independence

from work by celebrating July 4th with firework displays, parades, road trips, and hot dogs. So many hot dogs. Triple A expects a record. 72.2 million people to travel within the country for the holiday. The majority of them, 61.6 million by car. If you're concerned about getting stuck in traffic, that is justified, but try to avoid hitting the road on July 2nd and July 6th, which will be the busiest driving days, according to transportation data provider in Ricks.

The good news, gas prices are at their lowest level in four years. Just remember to play the cow road trip game if you are traveling. When a player sees a cow, you yell my cows. you point, you get all the cows you see. When you see a church, you say, marry my cows and your cow count doubles. When you see a cemetery, you say bury your cows, all the other cows that the player have died. When you see a hospital, you know mad cow disease, all other players lose half their cows. And when you see at McDonald's, you say, cash in my cows.

And now your cows are all burgers. The player with the most burgers win. If you never see a McDonald's, the person with the most cows win, that is the cow road trip game. Pretty fun. I am absolutely playing that game. That sounds amazing. Okay. On the economic calendar, this week's highlight is the jobs report for June. Typically, jobs reports are released on the first Friday of each month, but this Friday is July 4th and markets are closed. So it's being pushed up one day to Thursday. Whatever day the report comes out, it's going to be crucial for shaping the Fed's calculus around the timing of interest rate cuts.

In terms of estimates, U.S. companies are expected to have added 116,000 jobs last month, which would continue that gradual slowdown in the labor market in May, 139. thousand jobs were added. The unemployment rate is also projected to take up to 4.3% from 4.2%. A Thursday jobs report just doesn't feel right, but it is an all-important one because it will help illuminate the Fed's path on rates. Right now, the thing that the Fed is expected to do is deliver a quarter-point rate cut in September, but it needs to see strong-ish labor market numbers still for that to happen. So Thursday is step one. In sports, most of the action is happening overseas with the NBA and NHL wrapped up, no offense to baseball. The poshous major on the tennis calendar, Wimbledon, begins today in London.

All eyes are on whether number two ranked American Cocoa Gough can make it two grand slams in a row, following her French open title earlier this month. On the men's side, Novak Djokovic will try to muster enough energy in those 38-year-old legs to overcome the young guns Carlos Alciras and Yannick Sinner. And then speaking of legs, the Tour de France begins on Saturday across the channel. Tour de France, most underrated part of the sports calendar. favorite thing to do is see what wattage they are averaging for, you know, hours and hundreds of miles at a time, then hop on a peloton and just try to average that wattage for five minutes.

It really puts into perspective how incredible these athletes are. I'm surprised you haven't brought up probably the biggest sports event on the calendar this week, which is Friday the Nathan's hot dog eating contest and Joey Chestnut is back to defend his title. I looked at his line. The line is said at 71 and a half hot dogs, I think I'm taking the over. You know, he didn't participate last year. He's coming back with a vengeance. So I'm taking over. And he says he's in great form. And finally, Toby, I know you're very pumped for this. Jurassic World Rebirth, the seventh film in the franchise hits theaters on Wednesday. The basic premise is that our heroes travel to a remote tropical area to extract DNA from three of the biggest dinosaurs to help develop a medical

breakthrough that will save millions of human lives. Wait, and let me guess. Things don't quite go to plan and the dinosaurs start eating people. No, I am hype for this. I love Jurassic Park. Also, quick plug for the Michael Crichton book series. Way darker, way more intense, way more scientifically geared than the movie, so definitely read those. That is all the time we have. Thanks so much for starting your morning with us and have a wonderful start to the week. If you have any thoughts on today's episode, send an email with questions, comments, or feedback to Morningbrood Daily at Morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer, our associate producers are Olivia Graham and Olivia Lake.

Heron Bakeup is looking for a way to get on Zuckerberg's list. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th, and the signature Southern Country Rock of Eric Church on July 19th. Tickets on sale now at yamava Theater.com, only at Yamava Resort and Casino, celebrating its 40th anniversary.

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