Morning Brew Daily - The Winners And Losers of Super Bowl Ads & S&P 500 Passes 5,000

Episode Date: February 12, 2024

Episode 255: Neal and Toby kick off the week with a roundup of the best and worst of this year's Super Bowl ads. Then the guys dive into how the S&P 500 went somewhere it's never gone before and what it means for your retirement account. Plus why Sam Altman wants $7 Trillion and people are burning Waymo cars. Not to mention we got your weekend winners, no its not Taylor Swift or Travis Kelce, and we take a look at the week ahead. Get your Morning Brew Daily Merch HERE: https://shop.morningbrew.com/products/morning-brew-daily-sweatshirt?utm_medium=multimedia&utm_source=podcast&utm_campaign=mbd&utm_content=shownotes Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

Many 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, AFLAC 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, Brew Daily Show. I'm Neil Fryman.

And I'm Toby Howell. Today, the S&P has walked 5,000 points, and can it walk 5,000 more? Then Super Bowl Sunday came and win, and even though I lost literally all my vets, the commercials were actually pretty good this year. It's Monday, February 12th. Let's ride. Happy Super Sick Monday, everyone, the post-Super Bowl holiday, where a bunch of people curiously come down with a flute and can't come into work. Today, 16.1 million employees are expected to call out sick, according to the UKG Workforce Institute. In fact, 10 million have already requested the day off. In all, 14% of U.S.

employees plan to miss at least some work today, including the NFL scriptwriters, who wrapped up one of the most compelling TV seasons in memory and deserved some time off. In the finale, the Chiefs defeated the 49ers 25 to 22 to 22 in overtime, cementing themselves as the next NFL dynasty. They became the first team to win back-to-back Super Bowls in almost two decades, and it's also their third world championship in five years. I personally believe every single person who called in sick today. They definitely are ill. If I ran for president, though, my platform would be making Super Bowl Monday a national holiday. Just give the people off. make them not use a day off.

But also, I'm feeling a little bit hungover, not because I overendolls, but because I reneged on everything I said on the show. I said I was picking the Chiefs. I ended up backing the 49ers across the board. It didn't go well for me, Neal. And you said Tails never fails. That's the biggest thing. Okay, it half failed because in overtime, it was Tails.

So I'm going to take a 50% credit on that. All right, before we jump into our show, let's hear from today's sponsor, Veem. Neil, I noticed one company was missing from the Super Bowl commercials yesterday, And that was Veem. Yeah, that's because they're actually smart with their money. Why spend millions of dollars to have an A-list celeb promote your brand to 200 million people when you can have Toby and Neil who are at least, you know, D-list celebs for a much better price.

More bang for your buck. Veem would rather spend that dough on keeping your businesses data safe. But seriously, Vime, if you do run a Super Bowl ad next year, you have our numbers, we can even provide our own hair and makeup team. Head to Veem.com to see how you can make your. your business radically resilient. That's VEEAM.com. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179 like the next grill three burner

gas grill or get $50 off a select Weber Spirit grill 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, see Home Depot.com slash price match for details. Usher was sweaty. We didn't get a Travis Kelsey on-field proposal last night, and the game itself was kind of boring. So there's only one Super Bowl storyline left to discuss this morning, and that is the commercials. Super Bowl commercials provide a nice lens into which industries and companies are doing well enough to splurge on a $7 million $30 second ad to reach 200 million people. This year, China-based e-commerce brand, TAMU, was a huge presence again, airing not one, not two, but three commercials.

None of them very good. Hollywood made its presence known, too, with the Wicked Movie getting a full-minute ad as well as a prominent Deadpool 3 trailer. Celebs were fully back in style. While social media influencers started to come for their throne, A-list stars like Messi, J-Lo, Christopher Walk, and Beyonce, and Ben Affleck dominated the ads this time around. And to no one's surprise, there was not a single crypto commercial this time around. But there were two ads from Google and Microsoft showcasing their AI products. All in all, a solid showing from the brands. Neil, what stood out to you from this year's slate of ads?

Mine is that the Super Bowl commercial is not just a Super Bowl commercial these days. You run a commercial with a celebrity because you have to have a celebrity. I mean, I don't remember a single commercial that didn't have one. At the same time, as soon as that ad runs, you have that celebrity or the brand post the commercial or some sort of supplemental content on social media. And that way you sort of take your $7 million that you're spending for 30 seconds and expand it into something a lot bigger. So it lives outside of the TV. I think a great example of this was Beyonce and Verizon. Beyonce had a full-minute commercial with Verizon where she, at the very end, she's had

new music dropping soon. Right after that, she dropped two new singles and teased an album. And that's the sort of holistic approach you see brands taking. I'm so glad you brought that up because what I want to call out is not just the fact that they leverage the time after the ad. Now these brands are also building up hype before they run their ads. Two that I want to call out are Duolingo and Sarah V. Sarah V, which is the skincare brand, did this thing where they kind of leaked all these photos of Michael Serra carrying the product around seemingly organically on social media and built up

this kind of hype. Like, oh, what is going on with Michael Sarah, Sarah V? and then ran the Super Bowl ad. Same with Duolingo. They had this whole storyline where a famous Miami TikTok plastic surgeon gave their owl a Brazilian butt lift, and then that translated into their actual commercial.

So you're totally right in the sense that it's not just a 30 second ad. It is a much wider campaign hitting on these brand notes. And it was helpful for some brands like Uber who ran a spot. They introduced it a couple days before, but it had some, they made less. They joked a little bit about peanut allergies. And so advocates of allergies came out and said, they criticized it. They said, can you please edit this because you're making light of a life-threatening situation?

And then Uber-Eats went back to the drawing board, edited it out, and then ran the commercial. So there was this whole editing process that came from someone releasing an ad a little bit early. Another big thing I identified was nostalgia. There was the Friends Cast Siding with David Swimmer and Jennifer. Aniston for Uber Eats. T-Mobile and nerds both use the theme song from FlashDance. Also, there was this Kawasaki ad where the Mullet was the main character. So there was a lot of looking backwards as well this year.

We got to talk a little bit about AI as well because remember, there's always kind of one industry or brand that seems to co-opt and take over the Super Bowl. Remember, like, the Crypto Bowl was a big deal with Larry David commercial, the Matt Damon commercial. This time, it wasn't quite a full takeover for AI, but we did see Microsoft. do a ad for their co-pilot software, kind of showing how this wasn't going to take over people's one of the big fears that's going to take jobs and going to replace people. They tried to show it that it was augmenting the creative work of a lot of people.

So I think they struck the right note with their AI ad as well. To me, Matt Damon, Ben Affleck and Tom Brady ad for Duncan, being Boyd Bands, the Dunkings. And then they actually release the track suits for purchase later. I think those are going to sell it. Great Valentine's Day game. Great Valentine's gift. There's no way you're going to actually be able to buy one of those. I'm not certain. Okay, moving on. Welcome to the stock market where everything's made up, but the points do matter. And the points, well, they've never been higher. For the first time in history, the S&P 500 is starting the week above 5,000 points.

A beautiful whole number that reflects Wall Street's enthusiasm over a U.S. economy that has continued to expand, even as interest rates have soared, defying all the odds. The push to 5,000 began last November when AI fever and the possibility of rate cuts combined like Voltron to send the index soaring 20% in the span of a few months. The index has doubled in value since 2017 when it was at 2,500 points. What does this mean for you? Well, your brokerage account is probably very, very happy. Containing the largest U.S. companies, the S&P 500 is the most widely tracked index in the world. And as of 2022, investors had 11.

$1.4 trillion in investments that track the SMP or use it as a benchmark. The stocks, Toby, they only go up. It is a bit. It's been a historic run, no matter how you look at it. I mean, it's the 10th record in less than a month for the index. It closed out its 14th winning weekend in the last 15. This has been on a romp since, yeah, you mentioned November, since really around Halloween where this kind of AI fever kind of gripped the market. Let's look at the downstream effects of what it means for a stock market that is ripping. You mentioned that a lot of people have some sort of exposure to it in their retirement accounts or something. It is leading to a lot more retirees. The U.S. has had 2.7 million more retirees than expected due to kind of the performance

where you look at your nest egg. The nest egg is big. You say, all right, let's put in my two weeks notice here. So that's definitely one downstream effect of this. Another that's super interesting is that the real estate market in Silicon Valley, which I'd been kind of stagnant over the past few years during, you know, as we were coming out of COVID, is now booming. I mean, homes are selling faster in San Jose than in any other large U.S. city. And number two is Seattle. What do those have in common? That has a large concentration of tech workers. And we know we've talked about, you know, tech layouts for, you know, many months now. But a lot of tech workers are doing really well because they are awarded in stock in addition to

their salaries. And they're looking at their portfolios. They have a lot of. of money to spend. So now you're seeing homes in Silicon Valley in San Jose going hundreds of thousands of dollars over asking price. And the rising stock market has really raised the fortunes of the real estate market there. Yeah, it's just been a really solid earning season in general, not just the big tech, not just the magnificent seven, which obviously has done a lot of the heavy lifting, but you've seen things like Disney, Chipotle, even Ford had a relatively strong earning season. So it's not just the big tech companies, even though those do make the majority of the index. Looking ahead, this whole rally has been fueled by hopes that cooling inflation

will eventually lead to the Fed dialing down its interest rates. So that is going to be the big question mark on if this rally can sustain and if the Fed actually falls through on kind of those promises. All right, let's move on. You guys remember that famous gag from Austin Powers where Dr. Evil puts his pinky up to his mouth and says, $1 million. Well, Sam Altman, founder of Open AI just did that, but he asked for $7 trillion instead. Reports came out last week that Sam wants to reshape the global semiconductor industry to meet the demands of the AI revolution, a project that he thinks will take trillions to pull off. Let me say that number again for everyone. Seven trillion, because this is the real amount that Sam is reportedly shopping around,

not some exaggeration. That number is difficult to contextualize, but to try to put it in perspective, that is more than two times India's GDP and bigger than Microsoft and Apple's combined market caps. He's reportedly been in talks with investors like the UAE government as well as soft bank CEO, Masayoshi's son, to see if they want to pitch in some cash. Neil, only $527 billion worth of chips were sold globally last year. Is Sam serious here? Yes, yes, he is serious. He has been sounding this alarm for months now that we do not have enough.

chip-making capacity to fill the AI, boom. These chip fab plants need so much money. They cost tens of billions of dollars each. And with our growing demand for generative AI, every company is now investing in these chips. Only Nvidia is kind of making them or has the kind of graphics processing units that people want. They're on back order for a long time. So he thinks that there's a lot of demand to be had for these particular chips. They're really expensive to build. They take years to build. So he's trying to start these things now. It's very unclear whether this deal or anything like it will come about, but he has done this globe trotting to Wu investors of the past few weeks. We know that's true. Yeah, it's not just the chip manufacturing. It's also just the whole

energy costs associated with it as well. The idea is to just increase the capacity of the entire network. Altman is pitching a partnership with Open AI, chip makers, and power providers. So put up the money, build these chips. chip foundries that would be then run by existing chip manufacturer. So it's not like a thing where he's raising money for a specific company to deploy this capital. It's kind of just a rising tide floats all boats, but still, $7 trillion is just a stupid amount of money because that money like doesn't exist out there. If you look at the total amount of corporate debt issued by the U.S. government last year,

that was just $1.4 trillion. So the money is probably not going to come in at exactly that number. We'll see. We'll see. But what's interesting to me also is there's a geopolitical angle, because chipmaking is a very sensitive industry. It powers the military, and the U.S. has been very adamant over the past couple of years of bringing chipmaking domestically and producing it in the U.S. What Sam Altman is doing is going to the UAE and other governments that we're not sure we're like wholly allies with, or maybe they're aligned with China as well. So you already have

lawmakers cautioning about one of the firms, one of the UAE firms that, um, you know, you know, Sam Alman has been talking to, G-42, questioning their ties with China. So I think as Sam Altman hops around the globe trying to raise $7 trillion or whatever he's trying to do, I think these geopolitical tensions are going to bubble up to the surface because the US may block a deal if Sam Alton tries to make a partnership with a government or an entity that we're not perfectly allies with. Lord grant me the confidence to ask for $7 trillion to fund my projects. Sam Altman is asking for $7 trillion, but I'm asking you to get excited because after this word from our sponsors. We have our winners of the weekend segment coming up.

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and book your next trip today. Go to your happy price, price line. Welcome to the winners of the weekend, the segment where Toby and I pick one news item to highlight from the past few days. My winner is China's high-speed railway system, which is flexing on the rest of the world right now. And that's because on Saturday, Lunar New Year began, shout out, Year of the Dragon. And around the holiday, tons of people in China leave cities and head back home to celebrate

with their families. and by tons of people, I may have low-balled it. This travel period is considered the largest annual human migration on the globe. A record 9 billion trips are expected to be made during the 40-day travel rush. And just to give you a sense of how packed these trains are, last Wednesday, 13.1 million passengers rode on China's rail system. That's almost half of Amtrak's total ridership for 2023. It's making me have secondhand.

embarrassment for the U.S.'s transit system because these numbers are insane. Although I do just want to give a quick shout out to the MTA in New York because we're transporting, our subways are transporting around 3.6 million people per day. And that's not just a holiday rush. That's every day. So even though I do have feelings of inadequacy, just shout out to the MTA. It's just truly stunning how China has built up its high-speed rail network. It didn't have any before 2008 when it started building them for ahead of the Olympics. And in the past, What is that? 16 years.

Did I do that right? It's whatever. It's as longer than you think. It's built nearly 25,000 miles of high-speed tracks since 2008. The second biggest country with high-speed rail is Spain, which has just over 2,000 miles. And the United States, we barely have a high-speed rain, if you want to call the Acela of that. That's under 500 miles. So this is China versus the rest of the world.

You can get from Beijing to Shanghai, which is 820 miles, in. about four hours. I looked up, New York to Chicago is about the same distance. I looked up how long it would take. Well, the Lakeshore Limited. I could get there in just, you know, just 19 hours and 32 minutes. Very, very convenient. I see why we are still a nation reliant on cars. Let's move on. So normally this is where I'd pick my winner of the weekend, but instead of doing that, I want to take a moment and share some sad news that occurred yesterday. Kelvin Kippem, the world record holder in the marathon passed away yesterday in a car accident at just 24 years old. As a runner and a fan of this sport, I cannot overstate how big a loss this is for the running

community. Kipdom was incredible. He was the favorite to win the gold medal at the upcoming Olympics, and the world record he set last year was just 35 seconds away from breaking that mythical two-hour marathon mark. In his short career, he ran three of the seven fastest marathons ever. Yeah, I mean, you talk about him all the time. Tell the listeners sort of what made him special. He was so insane because he negative split his marathons, which is just not even a thing that happens at the highest level. When you see the Kipchogis of the world, you see these other former world record holders. They would get slower as the race progressed. I mean, it's very natural. But Calvin Kippem would drop sub one hour second half of his marathons multiple times,

which was just kind of unheard of at that level running a 59-7. second last half of a marathon in the Chicago Marathon was just truly, it's mind-boggling. Like, he was just another level and another level of talent that we hadn't seen before. Let's move on. How do you know if something is unpopular with people? Well, if a crowd gathers around and lights it on fire, that's a pretty good indicator. That's what happened this weekend to a self-driving car operated by Waymo in San Francisco. Someone jumped on the hood.

Another person smashed in the wind shield. while crowd gathered to cover it in spray paint before eventually setting the car on fire. Now, the police haven't named a specific motive for the vandalism, but it's pretty easy to come to the conclusion that general backlash against autonomous vehicles is a leading candidate. These feelings have been simmering in the city for a while now. The California DMV suspended way-mode rival crews from operating robotaxies in the state after a series of chaos-inducing mishaps, including dragging a pedestrian under the car last year. And just last week, a Waymo car hit a cyclist. Neil, this wave of anti-driverless car sentiment, it is growing. It is growing, and you're starting to see two camps form around this.

On the one hand, you have the techno-optimists who are watching these videos on social media of people setting fireworks and cars and burning it down to a carcass and saying, what are you people doing? Like, this could be safer. We have to advance our society. Human drivers suck. You're not treating autonomous vehicles with the same standard as you are human vehicles because if you, you know, you wanted to attack a human vehicle every time it got in a crash, we would have no cars left. And then you have the people on the other side being like, maybe obviously we don't condone destroying a car. But this is a reflection of the fact that the people of San Francisco have been part, have been guinea pigs in this experiment that they did not ask to be a part of. So there are these two camps forming that I think will only grow in hostility over the next few years.

Yeah, absolutely. It's something that all kind of hard tech and also a lot of transportation companies have had to deal with over time. Remember, there were full Instagram accounts dedicated towards people destroying the bird and lime scooters. A Waymo was literally attacked by a pedestrian with their fists in Arizona two years ago. And also this brought to mind, remember the hitchhiking robot that successfully traversed Germany, Canada, Netherlands. It was destroyed almost immediately upon entering the U.S. in the city of Philadelphia, actually. So there is something about, I don't know, that we see these autonomous vehicles, and it incites some sort of rage in people. But you are right. Some people do feel like they're unconsenting guinea pigs in a tech project, and we see those feelings of animosity spring up. There's also a sense of powerlessness because of the city and state divide. The state agency approved driverless vehicles to operate in.

San Francisco. Meanwhile, the city has no power over that, and the city is suing the state to review that license. So I think there's a sense of powerlessness, like, we can't control this. This is the state government that is kind of mandating things and requiring we live in a certain way. And we are sort of pushing back on that. Obviously, vandalism is just the next level. Okay, let's preview what you should look out for this week. If you're into political comedy, then I have a show for you. The Daily Show will be hosted by John Stewart tonight in a part-time return to the gig he left in 2015. Stewart will be hosting every Monday night through the presidential election, but back when he had his original run, he wasn't competing against TikTok,

Instagram, YouTube for eyeballs. So it'll be interesting to see whether he can break through in this media environment. Also very smart of him to return in the 11 p.m. slot so he doesn't have to compete with the 7am drop of Morning Brew Daily Show. You forget. That didn't exist last time John Stewart was at the helm as well. It is a busy week on Wall Street. Earning season rolls on with Shopify, Coca-Cola, Airbnb, Coinbase, Crocs, and more reporting their quarterly financials. Then on Tuesday, the Consumer Price Index is expected to show more good news about inflation and raise hopes of a Fed rate cut. Yeah, I couldn't care less about any companies all about that inflation report.

But fine, I will pick the Cs, the Coca-Cola, the Crocs, and the Coinbases of the world. Sounds good. Valentine's Day is on Wednesday, whether you're deeply in love or hopelessly alone. It's important to remember to eat a lot of chocolate. And Galentine's Day, a holiday created by Leslie Knope on Parks and Rec to celebrate women's friendship is the day before. And I would like to introduce another potential alternative holiday, Palantines Day, where you just go out to dinner with some of your palettes, just pal around for a little bit.

I'm down for that. Okay. The next occupant of George Santos's former congressional seat will be decided in a special election on Long Island tomorrow. Whoever it ends up being, they probably won't be as good on cameo, but they probably will make up less about their professional background. I kept seeing commercials for this race while watching the golf yesterday. And it was kind of a major vibe for me.

I was getting ready for the Super Bowl and everything. I kept getting these political ads. I know it's February. You're like, all right, can we wait until at least the fall? Right. Tiger Woods will announce something today, most likely his new apparel line. Still can't believe Nike let him go. It's just sad to me.

But what is coming down the pipe? No, I think it is. He has a new repair line. You could see in a picture he tweeted out that you saw his logo on certain things. So, I mean, I'll probably be buying. Let's be honest. Okay, Marty Graz on Tuesday. That makes me want to go back to New Orleans.

I've never been to Vegas famously. And I've also never been to New Orleans. So please, let's go to New Orleans. You don't even go during Marty Grau. It's a party 24-7, 365. And finally, NBA All-Star weekend is coming up with the slam dunk and three-point contest on Saturday and the game on Sunday. I'm less interesting. at NBA All-Star weekend.

The bigger basketball storyline for me is that Caitlin Clark is just eight points away from breaking the all-time NCAA scoring record. Their game is this sat Thursday. So tune in for that. I think she's going to do it. So we'll definitely talk about that on Friday. Okay, we have to wrap it up there.

Have a wonderful start to the week. And yes, having leftover pizza for breakfast is absolutely encouraged. As always, you can write in with any feedback to morning brew daily at morningbrew. dot com. Let's roll the credits. The Pride of Pitman, Bryce Beloff, is our editor and producer. Raymond Lou is our associate producer. Sorry, Ray. Lonnie Fiscus is holding down the fore fores as our technical director. Billy Minino is on audio. Hair and makeup is looking for a Valentine, if you know anyone. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

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