Morning Brew Daily - US TikTok Off to Rocky Start & Americans Think the Economy Stinks

Episode Date: January 28, 2026

Episode 767: Neal and Toby cover the latest report of consumer confidence which shows it’s at its lowest point in 12 years. Then, the deal to bring TikTok to the US may have been successful, but its transition has been anything but. Also, the EU and India finalize ‘the mother of all trade deals’ which slashes tariffs between the European bloc and the 4th largest economy in the world. And, CBS’ newly Editor-in-Chief Bari Weiss announces sweeping changes to transform the legacy media company. Meanwhile, Yale will offer free tuition for households with incomes below $200,000.  Get your tickets for the Morning Brew Variety Show! https://tinyurl.com/MBvariety  Learn more about Sandals at sandals.com  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here:⁠ ⁠⁠https://www.swap.fm/l/mbd-note⁠⁠⁠  Watch Morning Brew Daily Here:⁠ ⁠⁠https://www.youtube.com/@MorningBrewDailyShow⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash U.S. slash brew AI. That's pwc.com slash us slash brew AI. Good morning Brew Daily show. I'm Neil Fryman. And I'm Toby Howell. Today, Americans think the economy is worse now than during the pandemic.

Then TikTok US is off to a shocking start. It's Wednesday, January 28th. Let's ride. Let's get off the show by talking about one of my favorite subjects, Civilizational Collapse. It could be closer than ever. Yesterday, the advocacy group Bulletin of the Atomic Scientist moved its doomsday clock to 85 seconds until midnight, signaling that Earth is as close as it's ever been to total destruction, according to them. The group cited increasingly belligerent nuclear powers, climate change, the misuse of biotechnology, and the rise of artificial intelligence without adequate controls as the main potential sources of annihilation.

That said, the doomsday clock could be shifted back should leaders work together to prepare for existential threats. Toby, I'm just going to say it. I don't think I do well in an apocalypse. Don't have that dog in me. Well, don't start going mad max on me yet because a lot of people are sort of roasting the doomsday clock because how is it closer to midnight now than in 1962 at the peak of the Cuban missile crisis, which merely brought us seven minutes till midnight. And part of that just has to do actually with a methodology change. In the past few years, the group has changed from counting down the minutes until midnight to

counting down the seconds because it gives you a little bit more flexibility and nuance when addressing global rapid chains that's hitting our world right now. Inflation's hidden everything from groceries to doomsday clock counts. And now a word from our sponsor, Sandals. Neil, got any fun travel plans? Yeah, I'm visiting home for a very quiet dinner with my parents, followed by the annual fight. Ah, see, that is the problem.

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All rights reserved. It must provide a recent consumer mobile bill in the name of the person who gave me the deal. Additional terms, conditions, and restrictions apply. Okay, this is incredible. Americans' views of the economy is officially worse now than it was during the pandemic when you could barely leave your house and unemployment neared 15%. The Consumer Confidence Index for January released yesterday morning tumbled almost 10 points to its lowest reading since 2014, far lower than projections.

The conference board survey asked respondents to assess the economy as it stands currently and their outlook for the future. Those questions reveal the nation more pessimistic than Eeyore. Perhaps the biggest area of concern is a job market that stagnated over the last year. More than 55% of respondents said it was difficult to land a job, the highest number since the pandemic, and the share who said that jobs are plentiful, tumbled to 23.9% from 27.5% in December. But people are worried about the economy for other reasons, too, specifically inflation. The conference board said references to prices and inflation, oil and gas prices, and food and grocery prices remain elevated. Plus, mentions of tariffs, trade, politics, health insurance, and war all rose in January.

Toby, I can't help but think of the vibe session of a few years ago when people were super down on the economy, but continued to spend like everything was hunky dory. The key question is, will this time be different? I mean, that list that the chief economist at the conference board pointed out gives plenty of reason why people are not feeling good. The dimsday clock at 85 seconds makes a lot of sense. I know, what a dour start to the morning. But it is true that consumer sentiment is in the gutter right now. And I think you have to look into the reasons why. Obviously, you pointed to the labor market.

One good kind of metaphor for how the entire economy is right now is, I'm stealing from Diane Swank, which is a KPMG economist. She said, it's a one-legged stool everywhere you look. And basically what she's saying is that only certain parts of the economy are proper. up the larger hole. And in the labor market right now, one industry is the only one doing the hiring. It is health care driven most of the gains in the labor market over the past year or so. In the consumer spending front that you mentioned, it's rich people. We've talked about this ad nauseum on the show. It's a K-shaped economy where just look at the planes that you are going on. Everyone in first class is driving most of the revenue for airlines. Same goes for all the way across

the economy. So one-legged stools everywhere you look, which is probably why people are feeling very uncertain right now. I think the biggest red flag is the job market. According to this survey, just 14% of respondents expected more jobs to be available in six months. The job market is essentially just frozen over. We got more bad news yesterday on that front, Pinterest. Social Media giant announced that it was going to lay off less than 15% of its workforce. And the reason why this is notable, well, it's a lot of people. But also, they tied it directly to to artificial intelligence. They said the company is taking these actions to support transformation initiatives,

like reallocating resources to AI-focused roles in teams. I think people certainly have AI and how that's going to impact their job in the back of their minds when they're perhaps responding to a survey asking, hey, how do you think the economy is? Do you think you'll have a job in the next six months? And then the weird part about AI, too, is that if you look at GDP projections coming up over the next year, they're pretty rosy. I mean, there are some very optimistic projections, you know, saying that GDP will grow four or five percent over the next year, but a lot of that is driven by

AI investment. And so if artificial intelligence spending is the only thing kind of drawing the carriage of the economy for it, then again, that's another one like it's still that we're looking at, that most of the business investment have been in data centers. It's not a very broad business investment. So very few things are propping up the economy right now, which is again, leading to all that uncertainty. Moving on, TikTok is looking like a broken clock these days. After the U.S. version launched last week, a wave of glitches have hit the app, which the company blamed on a power outage at one of its data centers, creating, quote, cascading systems failure. However, TikTok's explanation is not sitting well with its user base, who claims

the company is censoring political content, especially anti-Trump and anti-ice content. One viral example that was verified by CNBC showed the word Epstein triggering an error message in DMs, prompting an investigation from the company. Other more general issues users reported were their videos getting flagged as ineligible for recommendation, posts showing zero views, which make better videos, am I right?

And DMs failing to send. While the censorship narrative gained a lot of attention on social media, David Newsom went as far as to launch a review into whether TikTok is violating state law by censoring content. More mundane issues like a massive winter storm could help explain some of the outages.

In general, though, it's been a very rocky, start to life for the joint venture, highlighted by the number of U.S. users deleting the app surging nearly 150% over the past five days, according to Censor Tower. Neil, tough to think of a worse start. Well, the 2025 Colorado Rockies would like a word. All you have to do is go to the app store to see this change take place. I looked at the top 25 free apps.

TikTok is not there, which is crazy to think about. It's one of the most popular social media apps in the country. What is there at number two is a social media app called upscrolled. It was just started last year. It's sort of a blend of Instagram and X, and a lot of users from TikTok have been defecting from there to upscrolled and a number of other competitors. We saw this happen after Elon Musk took over Twitter slash X a few years ago. Who knows whether this will have any staying power, but at least right now people are voting with their feet because no matter the cause of the issue, whether it was actual censorship, but there's no evidence. of or these data center power outages.

You know, people just don't trust the current leadership of TikTok, or many users don't seem to trust the new current owners and they're voting with their feet. One thing that I mentioned when we talked about TikTok kind of getting into this U.S. joint venture was the fact that the data security risk now lies with Oracle, like the buck stops with Oracle. And we immediately saw how that is going to manifest because if they have a data, center issue. Now they cannot blame bite dance. They can't really blame Beijing at all. It all comes down to whether Oracle can withstand the load of this of taking on TikTok USA onto their servers.

And early signs are not good. They have not done well with it because if the reason why you're saying all of these errors were occurring for users is the fact that your systems couldn't handle it, that's still not a good thing. Even if you're not censoring data, like that is not a good start to life as a U.S. joint venture. Meanwhile, there's another headline yesterday that just shows how powerful TikTok was at least a few years ago, and hopefully it'll continue in the future if the new owners sort of handle this okay. Cabi Lame, who is the world's biggest TikToker. He has 160 million TikTok followers. He's that guy that does those mime. He makes fun of just people doing stupid things on the internet. Well, he just signed a $975 million deal with a financial

services firm called Rich Sparkle Holdings to monetize that massive fan base. And they think this is this business led by Kabi, who's the, you know, a creator-led business, is going to eventually do $4 billion in revenue. So that was, I mean, he cashed out. That's, that's an incredible deal for him. Shows the power of TikTok over the past few years to generate huge fan bases. I think there is a huge question about whether this social media app that came out of absolutely nowhere in 2019 will have this power moving forward. Moving on, after two decades of negotiations, the European Union and India finalized a trade agreement yesterday that leaders are calling the mother of all trade deals. It's the latest sign that President Trump's tariffs have motivated

other countries to cozy up to each other and reduce their dependence on the American market. The mother of all trade deals is indeed massive. It covers nearly two billion people, encompasses about one quarter of the global economy and one third of global trade. Crucially, it'll give European companies better access to a fast-growing Indian market that has been among the most protectionists in the world. Here are the details. India is going to eliminate or reduce tariffs for nearly 97% of traded goods by value. That's projected to double EU exports to India by 2032 and lead to 4 billion euros in savings for European firms.

On the other side, the EU is going to cut tariffs on virtually all goods imported from India over the next seven years. Both India and the EU have been bruised by tariffs from the Trump administration. India got hit with a 50% tariff on certain goods, while Europe was slapped with a 15% tariff even after it struck a deal with the White House. that proved the impetus to get together and say, look, we've been talking about this deal for ages with the U.S. becoming unpredictable.

It's probably time we finalize this thing. Toby, they're clinking French champagne in Delhi. I mean, you said that they've been talking about this forever. 20 years is a long time to talk about a trade deal, but I do think it's all downstream of just wanting a stable trading partner. Just think about what you want in a life partner, Neil. Do you want somebody who's...

Think about it a lot. Constantly oscillating back and forth, jumping down your throat when, you know, you buy Russian oil once or twice, or do you want someone who says, yes, we welcome you with open arms? That being said, it does feel like maybe you're kind of trying to get back at a jilted X a little bit here because, yes, this is a big deal. Yes, they're calling it the mother of all trade deals. But India-EU trade pales in comparison to U.S. EU trade. Right now, only less than $200 billion of goods are exchanged between the two countries. Between the U.S. and the EU, it's

one and a half trillion dollars. So that's... just gives you a sense of the scale, but still, it is a big win for these two blocks. It really ties back to the Prime Minister of Canada's Mark Carney's speech back in Davos, where he talked about the middle powers getting together. Basically, almost every country on the planet, their biggest trading partner is the United States or in second place or in first place. China. Carney called on the middle powers to act together because, quote, if we're not at the table,

we're on the menu. And you're seeing this happen all over the world. EU is just coming off signing a trade agreement with four South American countries. Kier Starmor, the UK Prime Minister, he's going to China today to perhaps sign some more deals. Canada and China agreed to a deal earlier this month that reduced tariffs on Chinese EVs in Canada. So you're seeing these middle powers come together because, yes, the United States is their number one trading partner. But as the United States becomes more unreliable on the trading fund, they're all getting together. Who knows whether this is, you know, the start of something

big and a more major global realignment of trade permanently or just sort of a gut reaction to what's happening with the United States right now. But either way, it opens up an Indian market for the EU that is just extremely production. So we talk about the U.S. having high tariffs. Right now, India is essentially a fortress. Right now, European cars are hit with a 110% tariff. That is going to come down to 10% over the next few years under this deal. And then let's talk about wine and alcohol, that is a huge export from the European Union. It's currently, tariffs in India are currently at 150% right now. Eventually, those will be reduced to 20%. I don't know how they afford to buy European liquor in India. Clinking glasses for sure will be in their future. All right,

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Hilton for the stay. Barry Weiss apparently has never heard of a feedback sandwich and a brutally honest direct address at a CBS News all hands, the new editor-in-chief announced an overhaul of the network to bring it to the social media age or else become extinct. Weiss, the free press founder, who was given the reins to CBS News three months ago, told colleagues that the era of television news was dead, put a fork in it. She said, our strategy until now has been to cling to the audience that remains on broadcast television. I'm here to tell you that if we stick to that strategy, we're toast.

She urged reporters to forget about which shows would pick up their stories and instead focus on reaching audiences on the internet who expect news immediately and on demand. Weiss argued that CBS News is not meeting people where they consume news in 2026. She said that Americans actually spend twice as much time consuming news today as they did 50 years ago. So it's not like they're tuning out the world, but they are tuning out traditional TV in favor of things like podcasts, YouTube, newsletters and Twitch. Walter Cronkite had two competitors, she told staffers, we have. two billion, give or take. Toby Weiss has had a rocky few months since being hired as editor-in-chief. Do you think this pivot to more of a startup culture can turn the ship around? Yeah, and a lot of people within CBS news may be not our Barry Weiss fans, but are fans of

kind of her take on the industry as a whole, because a lot of people do agree with it that the diagnosis of the fact that CBS may be over index on broadcast news is 100% true. People do consume news on social media now. how you go about giving that message to your employees, how you go about, you know, managing layoffs and whatnot has been left something to be desired. But her overall take on the industry, I think a lot of people are aligned with. Yeah, here are two data points where I think she's kind of relying on to message this shift. She said that Americans' confidence in mass media has fallen to a record low. This is in a new Gallup poll last year. Twenty-eight percent

express trust in newspapers, television, and radio to report the news fully accurately and fairly. So that 28% is down from 31% the year before and 40% five years ago. So this has been a precipitous downfall. And then another poll from Pew found that for the first time ever, social media has displaced television as the top way Americans get news. And so she announced 18 new contributors to CBS News. It's an interesting list of podcasters, newsletter writers, existing columnists, at the free press that express that kind of span the gamut when it comes to political ideology. But I think the number one thing that they all perhaps share in common is they bring an existing audience.

They're creator first. And this is the way news is going here at Morning Brew. We're doing that exactly that. A little endorsement of Morning Brew along the way. But yeah, and one of the big things that she is trying to preach here is that we need to install trust in news organizations once more. But a lot of people say you're kind of undermined. that very goal when you do something like pull a 60-minute segment just days before it's going on air

because the government hasn't had a chance to respond to it yet. So people are saying let's execute this strategy if you're actually believing this because right now people don't trust you and don't trust CBS as a whole because of the moves that you have made it yourself. So yes, you can bring Andrew Huberman on. You can bring Peter Atea on, which are some of the commentators that she is doing. But if you want to establish trust, you just got to make moves that establish trust. Moving on, Yale wants to make sure that your grades are the only thing you can blame for not getting into Yale. Yesterday, the school announced a major expansion of its financial aid program. Starting this fall, kids who come from families earning up to $200,000 a year

will be able to attend the school tuition-free, while those coming from families who earn up to $100,000 a year paying nothing at all. The decision will save students and their families a hefty chunk of change. Tuition alone will run you $72,000 a year, while full cost of attendance, including room and board, can reach nearly 100 grand. Yale has already made strides to increase the number of lower income students on its campus, with over 1,000 of their 6,800 undergraduates attending for free. How can they afford all the free rides?

Its endowment ticked up 11% last year to reach $44 billion. The decision also moves Yale into Lockstep with many of its ultra-wealthy peer schools with similar policies. Harvard, MIT, and UPenn, all offer deals like the one Yale announced. Neil, obviously, this is great for expanding access to one of the premier institutions in America, but it's also coming out of time where the value of a college degree is being called into question. So Yale is killing two birds with one stone by killing tuition. This is all about hitting the middle class. So at Yale and other elite institutions, they're doing really well with low-income students.

They're doing really well with high-income students, unsurprisingly. those legacy people. So this is all about targeting the middle, and that's why they are increasing this tuition exemption to $200,000 instead of up from $100,000 earlier. Yale has nearly doubled the number of low-income students that go to New Haven in recent years, but that middle is the gap that they're trying to solve now. I think they're trying to solve a ROI issue as well, because they are trying to defend their relevance or trying to defend their legitimacy right now, even as you have students kind of second guessing if this is worth it, like should I go into debt to attend this institution? Is it worth spending $100,000 a year even though it is Yale? It is just an

insane amount of money. So they have adopted sort of this high price, but high aid model, because you are splitting the difference there, because you can say we still have that prestige sticker price, but we are allowing a lot more people in as well. So that is one of the big questions here is obviously expanding access, but how do you defend the legitimacy of your institution? And this seems like a pretty good way of going about it. I think it's worth going just for the pizza alone. I've never had any New Haven pizza. Like, we make jokes about it all the time.

I visited Yale on my college tours. Didn't actually have any pizza. So we got to go back sometime soon. All right, let's sprint to the finish with some final headlines. Healthcare stocks need an ambulance. After a surprise report that the government is likely to keep the Medicare advantage rate flat for next year. Insurer stocks collapse like a cheap lawn chair. United Health Group, bam, down at 20%. Humana, ouch, down 21%. CVS Health, my leg, down 14%. I could keep going. In total, nearly

$100 billion in market cap, was wiped away in a deeply red day for the sector. Medicare advantage rates, aka the pure patient payments the government makes to insurers, powers a major part of the healthcare industry, driving more than $500 billion in revenue last year. But that golden goose has already been under pressure. Some Biden-era policies trimmed the most lucrative billing practices, and then came the rate shock. The Centers for Medicare and Medicaid services propose a 2027 rate increase of just 0.09%. Wall Street expected closer to 5%.

Suddenly, the engine looks broken, Neil, and there's no mechanics with anything higher than a two-star Google review nearby to fix it. I've never heard someone relish stock prices tumbling as much as that. Yeah. What you're about to see is the mother. We talked about the mother of all trade deals. We're about to see the mother of all lobbying to protect this very lucrative, $500 billion business in Medicare advantage by these health insurance companies.

In previous times, they've rolled out seniors talking about how they're going to lose coverage. They've taken out commercials in the Super Bowl. So one consultant said this is going to be the typical industry Medicare lobbying on crank this next 90 days because right now this capping rates is just a proposal. They haven't finalized it yet. So prepare for an onslaught from the health insurance company. So in the future, maybe we'll talk about their stock prices rising and you'll have the same amount of curve.

All right. Our next headline, Amazon is giving up on its grocery ambitions or at least the stores that bear its name. Amazon Go and Amazon Fresh were the ugly stepchildren of the e-commerce giants foray into food. Fresh was intended to be a mass market alternative to Whole Foods. Go was intended to be a checkout-free convenience concept, but Fresh felt stale and Go never went. Now both are being subsumed into the one concept that is working for Amazon, Whole Foods. The thought process is, Whole Foods has a clear brand identity and a loyal customer base, so why fight it? Plus, all the

same-day delivery experiments that Amazon wanted to try out of those previous locations can actually be rolled out from those stores as well. Neil, this feels like a no-brainer. Why force a round peg into a square whole foods? Just ride with what people know. It is pretty funny that the only grocery concept physically that is working for Amazon is whole foods, which is the one they bought, back in 2017, back in 2017 for $13.7 billion. It's another L for Jeff Bezos pet projects, the Lord of the Rings TV series, which was his, his, his, brain childs, he said, go find me, Game of Thrones, hasn't worked out so well. And then this other brain, this other pet project was the just walkout technology that was featured at Amazon Go's

convenience stores, where you just pull something off the shelf, walk out, and we'll have this technology to essentially check you out without you waiting in line. They sunsetted that technology in 2024 at Amazon Go stores. Now there's going to be no Amazon Go stores. They have licensed the technology to things like sports arenas and it is being used at around 360 third-party locations, but Bezos's pet projects, a little O for two. I'll say another one of his pet projects was Amazon to begin with. Maybe he's doing well, and that kind of subsumes the rest. He's hitting for power, not for average, Neil.

All right, finally, Southwest Airlines entered a new era yesterday, scrapping its 50-plus-year open boarding system for more traditional assigned seats. Now, if you get on a Southwest plane, you'll be assigned a seat and placed into an eight-group boarding structure similar to how other airlines do it. It's part of Southwest sweeping overhaul to make more money, a transformation that also includes charging for bags when bags used to famously fly free. The transition from Mad Max level anarchy to buttoned up airline will take about two months to complete, so don't be surprised to see those tall metal columns still standing by a Southwest gate,

but those will have their numbers removed or covered till their wist away from the airport. Toby, I think they should auction off these metal columns. Would love to have one at my house. I've never been in the A section of one of those columns. So get me the A1 through 30. because I never checked in in time. This just stinks. I'm saying it now because Southwest used to be like the quirky airline that it used to have

little idiosyncrasies that defined it against the rest of the industry. Now it just feels the same as the rest of the industry. So yes, well, they probably make more money. Is that the goal of the business? Probably that is a good idea. But in terms of just like user love for the brand, I'm not sure this is going to be the wise decision. People love the brand because of that boarding system. Yeah, it's different. It's different. That is very much in bags, and bags fly free, obviously. Yeah, I think that has more of impact.

I mean, maybe people did enjoy that boarding system, but I did not. It was like a free for all to get in line. That might say more about you than about the customer base as a whole. That is basically what the brand is saying, though, that assigned seating actually reduces anxiety among travelers because they know what to expect. But a lot of people like the egalitarianness of it all. that I can, there is no first class. It's just like how prompt you were with checking in. So now it's just like any other airline. Yeah, Southwest will never be the same.

That is all the time we have. Thanks for starting your morning with us and have a wonderful Wednesday. If you want to get in touch, send an email to Morning Brew Daily at Morningbrew.com or DM us on Instagram at MB Daily Show. 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.

Hair and makeup is more out than TikTok. Devin Emery is our president and our shows of 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.

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