The Best One Yet - ☎️ “Flick the ol’ Circuit Breaker” — Why the market (literally) stopped for 15 minutes. NBC’s Snapchat breakup. Oil’s worst day since ‘91.

Episode Date: March 10, 2020

First we learned that Russia and Saudi Arabia are in a fight about oil markets — it’s caused the biggest drop in stock prices since 1991. Investors weren’t thrilled (coronavirus drama + oil market drama = not good), so they sent stock prices down a shocking 7% within minutes of Monday’s trading. But it didn’t stop NBC from breaking up financially with SnapchatLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Tuesday, March 10. Snackers. Yesterday was a rough day on Wall Street. A little bit of Namaste needed. We're going to rub it on. Docks fell by almost 8% according to the S&P 500. By the way, though, a little bit of context. We've got to rub in there. Four days were worse than this back in 2008. Right. So yesterday was bad, but it wasn't as bad as the financial crisis. In fact, there have been 18 days worse than yesterday in the history of the American In the meantime, something that's almost as bad, the status of our hands, they're so dry from washing out. Jack had to put chapstick on his palms. I'm not using Pruel. I'm going with the old school bar of soap. I know. And I'm washing for 20 seconds. Fun fact, Lizzo's truth hurts. The chorus is 20 seconds if you need something to measure your hand washing. She is a snacker. By the way, snackers, remember, don't slap hands, slap feet. That way you get to get a compliment in on the shoes, too. How are we feeling today, Jeff? And you're not spreading germs.

I'm feeling this is the best one yet. Let's get going. First story, Jack, what do we got? CNBC ran out of photos to use yesterday of panicked traders looking anxious. It's always the same pictures. It's always the same guys. They're white and their ex-athletes. We're going to break down why the New York Stock Exchange halted trading for 15 minutes. Key phrase here, what would Dumbledore do? We're on it. Our second story, Hey, Snapchat, NBC kind of wants to tell it. It's giving you the old. It's not you. It's me. Don't worry about it. NBC sold off its $500 million Snapchat investment. by the way, it wants joint custody of their creative joint venture baby. Our third and final story,

oil just had its worst day since 1990. That's back before millennials were a thing. Fun fact there. That's false. I was three, Nick. I was three and I think you were too. Yeah, it's true. We're looking at the geopolitical drama behind today's stock market drama. Russia and Saudi Arabia, you guys need to talk this one over. We need some space. We need to get your room. Snackers, before we jump into all that wonderful stuff, happy Tea Boy Tuesday. Yes. Now, given the current situation, on planet Earth. Yeah. Nick and I are trying to limit our human-to-human contact,

so we're actually both working from our separate apartments today. Jack, we're running dangerously low in the Martel household on oat milk right now. We did not plan for this. Now, we're kind of facetiming and doing this pod. But you know what? When you're not in the office, you sort of miss some of the great perks that the offices of America can offer. Jack, you could not have said it better. We're talking olive garden.

Pretty sure, and you would know at best there's like an unlimited breadstick situation for every employee. Yeah, like three points of my. personal cholesterol level can vouch for the truth of free breadsticks for Olive Garden employees. Your first year working at Olive Garden is just one extended carbolo. Now, I'm pretty sure Dunkin' Donuts gives away free donuts to its cash register attendees. Extremely ironic because they've been trying to get rid of donuts from the name, so they try to get rid of them with the employees. Even if you're not in the office right now, some perks that companies are offering these days

are just straight up wild. All right, Snackers, Jack and I jumped in Snacks out. We noticed that Apple is offering up free genetic testing to Apple employees. Whatever that means. Goldman Sachs over in New York, if you're a new mother, they will ship your breast milk home if you're on a business trip. A little peapot has got to have milk. This is totally fair. Finally, there are rumors on the internet that some employers are actually offering fraternity leave so that when you have a new dog, you get to like, you know, stay at home and make sure the dog knows who to call mom or dad. Finally, these cockapoos, they were basically living lives that just, it wasn't fair. It just wasn't fair. Those perks are incredible, but we want to ask the snackers. Snackers, what are the most outrageous best in

sane perks you have ever heard of or experiencing right now. Let us know your incredible in-office perk at Robin Hood Snacks on Twitter. We might even give you a T-Boy T-Bee-Boy T-shirt if you have the best one. Hashtag T-Boy Tuesday. Happy T-Boy Tuesday. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way.

The snacks are about to hear-rain food is air candy. They don't reflect the views of the Robin Hood family. It's all informational just so. You know, we're not recommending any securities. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC.

For our first story, we're taking you back to what happened yesterday morning. Oil took its biggest drop since the Persian Gulf War. A drop of 24%. We're talking about ripple effects that were everywhere the entire day for the entire economy. This story opens with OPEC, the 13 authoritarian countries with incredible oil assets under their ground. When is OPEC just going to like call quits and do its own Olympic team at some point? By the way, they were coordinating with Russia on oil supply.

That's what OPEC does. This is pretty much like a local co-op, except a lot more billionaire princes. A lot less freedom of speech and organic turnips. Now, their latest agreement on global oil supply actually ends at the end of March. And the news from this weekend, they can't agree to account. extend their agreement. The only people who are happy here are the OPEC lawyers. They're having the best day yet. Long story short, Saudi Arabia, which is the biggest of all the OPEC producers, is furious at Russia because Russia is basically trying to bail from this agreement. So in response,

Saudi Arabia is ordering Saudi Aramco, the biggest company in the world, to pump out more oil. Essentially, they are punishing the dissenters. Saudi Arabia can survive when oil prices drop when there's more pumped out. to the countries, not as much. Now, Snackers, that much bigger anticipated supply of oil from Saudi Arabia, that caused the price of oil to plummet 24% on money. That is the biggest drop since the 1991 Gulf War breakout. We're talking George H.W. Bush. It got apparently oil on like Amazon Prime these days. It's down to 34 bucks a barrel. That's down from 70 in January. They might as well sell this on T.J. Max. Snackers, if you're getting married this year, throw some oil barrels on the registry.

Now, oil company stocks got destroyed because their key product is now worth half as much as just a couple months ago. I mean, Occidental Petroleum plummeted 53%. Exxon Mobil based out of Houston, Texas dropped 12%. And Chevron down 15%. Also some other interesting changes. Surprisingly, Tesla also fell 12%. Maybe because as oil prices fall, gas is probably going to fall too, which hurts the appeal of having an electric

car. Right. You're less likely to jump to an electric vehicle when you're seeing prices out there that basically looked like they're on sale at the gas station. A buck a gallon makes it easy to keep your gas guzzlement. Meanwhile, bank stocks got crushed as well along with the oil prices. Right, because banks have lent a lot of money to oil producers, and those oil producers, maybe they'll default on their loans because of this low oil price. So Jack, what's the takeaway for our buddies over on Olympic team, OPEC and Russia and the rest of the world? This is the opposite of what the global economy

needs. Snackers, coronavirus has slowed the world's economy, and that means lower demand for oil. Fewer ships, fewer flights, less trucking, less drive. We're thinking, are there less barbecues with this thing? What does barbecue run on propane these days? I think lighter fluid comes from crude oil. So the world needs less oil right now, but the oil giants are doing the opposite. They're pumping out more oil. Longer term, there will be some winners from lower oil prices, like drivers and businesses

that have to pay less for gas and transportation. But there are also plenty of immediate losers like oil stocks and apparently the rest of the market. For our second story, NBC is breaking up with Snapchat financially, but it wants joint custody of the kid. This is a classic Gwynethberg. Oh, so true. It's like a conscious uncoupling. It's not you.

It's me. Let's still be friends. Let's let the family stay together. When you're married to a rock star on Colplay, I just don't know why you end that. Okay, let's get to the story because just like humans, companies invest in the stock market too. Right. So NBC and Snapchat hooked up back in 2017 when NBC invested $500 million in the SNAP IPO. That officially defined their relationship on Wall Street, but then they created a child together. Jack,

care to share the name? Yeah, it's a joint venture named Indigo. Really cute kid. Horrible kid. They had 50-50 ownership. Everything was beautiful. There was a lot of harmony. And they were dedicated to creating video content for Snapchat's app with Indigo. Right. Snap and NBC Universal co-produced a show called Stay Tuned, which is a much younger, faster, quicker version of like Lester Holt's evening news, but it's only on the Snapchat app. He doesn't get that out. By the way, Lester Holt, big snacker. Here's what Jack and I found fascinating. NBC has a new love interest.

NBC is launching Peacock, which is another rival to Netflix, next month for Comcast Cable customers, I think, and then in July for everybody. In the meantime, launching that Peacock streaming network has cost the company $2 billion with a B. Now, it sold its first batch of stock back in 2018 when Snapchat's stock was really low. And NBC ended up losing $263 million

dollars on that. Then it sold the rest of the Snapchat stock at the end of last year when Snaphead quadrupled in just a year. And NBC ended up making $293 million on that. Okay, overall, we don't know if it gained or lost, but it had one good sale and one bad sale. But here's the funny thing about what's going on with NBC right now. It still wants to be friends with Snapchat. NBC, which is owned by Comcast, by the way, a publicly traded company, NBC claimed that they want to make more content than ever on Snap, despite the break. It's like Snap and NBC are meeting up for coffee and being like, hey, you look, you know, you look great.

You're taking care of yourself. And we all know NBC has a pure grip on the Olympics. It's got that show on lockdown. So it's going to make four daily shows just on Snapchat during the Olympics. It's like they're hanging out with the kid together. So, Jack, what's the takeaway for our buddies over at NBC and Snapchat? Traditional media has a little bit of a distribution problem. Snackers, if you want to understand media, you've got to think of it as two parts.

content and distribution. Right. So for snacks daily, the content is, you know, making me talking about the news. And the distribution is whatever app you're listening to us on. When it comes to NBC, the company spent 81 years perfecting that first part, the content. Dwight Shrew, Michael Scott, and the office didn't come out of nowhere. But NBC's main distribution channel is outdated and kind of broken, and that's TV. Yes, TV. Get this. 80% of old people probably watch NBC. But 90% of Snapchat users are between between 13 and 24. To reach younger users, traditional media has to change its distribution. For our third and final story, U.S. stocks fell so much at market open yesterday. It triggered a 15-minute

market-wide halt in trading. This is the first one since 1997. So we're going to tell you what circuit breakers are and why they exist. Every house has a circuit breaker. And when something goes off, you're just flicking those switches randomly. Let's be honest. At my house, the little door is on the stairs on the way to the basement. I think that's where they are in most houses. Molly, did this one work? Is the kitchen light still on? It's still on. Do you remember the movie, it's a wonderful life? I watched it with Jack last year, not going to lie, shed a tear, soulful, incredible experience. It's an incredible movie, but let's go to the scene when everybody on Bedford Falls is trying to withdraw money from the building alone. At the same time, it was a panic. And yesterday kind of felt

like that massive selling of stocks everywhere. This S&P 500 fell 7% like right when the markets over. And that's where the circuit breaker kicked. It automatically halts trading for 15 minutes. Exactly. Done. And during that 15 minute break, you should pause. Oh, yeah. As an investor, you should take a deep breath, please. Post an update on Instagram. Sip a CBD kombucha for crying out loud, because it's time to not panic. This is the part in like the vinyasa flow when the instructor says, get the water bottle, get in touch with your chakra. Panic is bad and it's the result of a herd mentality. At the same time, someone's going to get hurt in this thing. Someone's getting injured.

So the circuit breaker gave markets 15 minutes to calm down. So Snackers, here's the deal with circuit breakers on Wall Street. They go all the way back to 1987, about a year before Jack and I were born into the world. As my mom would say, I was still in heaven. But Black Monday happened in 1987. That was a stock market crash of 20% in one day. Yesterday was almost 8%. After that, it was pretty clear to Wall Street.

We kind of need like a little mechanism here to conundated. control emotions. Let's take some inspiration from what you got in your house. We're talking about behavioral economics here. All right, Snackers, imagine if headlines broke about some really, really bad news. That could cause some panic selling on the stock markets. Or if the president tweeted, we're officially starting like three-day weekends for all weeks every week forever. Well, that's really good news, and that could cause panicked buying on the stock markets. And that could trigger an automatic circuit breaker, aka time for everyone to calm down and relax. If stocks drop by 7%, it halts trading for 15 minutes. That's what happened yesterday.

If stocks drop by 20%, stocks stop trading for the rest of the day, go home. Everybody go home. Take a break. Come back tomorrow with a clear hat. The pause lets people figure out facts and then decide based on information, not emotion. Yesterday was basically a troll broke into Hogwarts. So you get Dumbledore standing at the head table with silence. And you know what?

All the kids calmed out. Or it's like, yeah, Monica and Rachel having a fight over Jean-Claude Van Dam. Phoebe has to jump in, pinch some ears. get the thing broken up. Dumbledore, Phoebe, in this case, they're the circuit breakers. They get people to calm down. So, Jack, what's the takeaway for our buddies who are everyone on Wall Street who are staring at circuit breakers? The stock market yesterday stopped. Not because it was broken, because it was working. Snackers, it sounds counterintuitive, but the circuit breaker actually correctly stopped the panic from happening. On word that there was an oil fight between Russia

and Saudi Arabia, markets fell 7% in the first five minutes. But then after the circuit breaker kicked trading resumed, prices were more stable, and the halt kind of worked. It was a very bad day for stocks yesterday, but the all-out panic was only in the first five minutes. It was actually pretty stable after that. It's because the circuit breaker worked. Jack, can you turn off the circuit breaker and whip up the takeaways for us over there? Saudi Arabia is pumping more oil than the world needs right now. This hurts Russia, oil companies and banks, and pretty much all stock market things. Yeah, it does. A second story. To reach younger viewers, NBC is repackaging its content for a different distribution channel. NBC still wants to be on Snapchat, even though it doesn't own Snapchat

anymore. Our third and final story, investors were freaking out about the oil news. So the New York Stock Exchange halted trading for 15 minutes. You got to pause, catch your breath, and drink some of that like melatonin sparkling water. Don't panic. That's the key. So Snackers, time for our snack fact of the day. This one's kind of like a birthday snack fact. Caroline Wallace, on behalf of her boyfriend, Ryan Laker, who just turned 30. Happy belated birthday, Ryan. Right. By the way, hometown Vancouver, great town. That's where Lulu Lemons from. Caroline from St. Jose, California. Jack, if you're living in the Bay Area, you know, odds are pretty much everyone around you is ensconced in Auburge shoes. I've given like five different people, Albird shoes for birthday presents. Have it got anywhere in return?

Very interesting. Size 11, size 10 over here, just saying, if you're in the Bay Area and you know that, you also know these sneakers are made of wool, wool, wool from sheep's are key. And the sheep are from New Zealand, which is funny because turns out there are more sheep than human beings in New Zealand. I think it's the same thing with cows in Vermont except you're not supposed to tip them, right, Jack? Wrong. We actually have more maple trees than humans. Snackers, happy T-boy Tuesday. Remember to tweet us at Robin Hood Snacks. Yeah, we want to know your most insane and epic office perk that you might be missing right now because you're working from home. We hear you and we'll see you tomorrow. This is Jack, Nick and I both on stock of Lulu Lemon.

The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, is not intended to serve as a recommendation to buy or sell any security, and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.