Dow Jones’ Worst Streak in 46 Years & Taco Bell Serves…Chicken Nuggets?

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the Dow is in its longest losing streak since 1978. So why aren't more people panicking? Then Taco Bell is a loco for pollo. It's adding a surprise new chicken dish to its menu this week. It's Wednesday, December 18th. Let's ride.

0:50Got a fun thought starter for you all this morning. Maybe it'll help you come to a deeper understanding of what makes you, you. So someone on Twitter posed the question, what are your personal foundational texts? You know, the books you keep coming back to, the ones that most represent your values and interests, and you can't fathom having a personal library without them. Toby, the people want to know, what are your foundational texts? As part of this prompt, there was the question of these are books you revisit multiple times throughout your life, that you've read multiple times. And by that definition, the only foundational texts that I've read multiple times are mostly sci-fi or fantasy novels.

1:30The Aragon series growing up, I read multiple times. World War Z by Max Brook is a book that I've read, is a book I've read three times, the Red Rising series. Most of these were books that I did read as a kid. Then you revisit as an adult. There's something just very cathartic about that. But, you know, if we expand the definition beyond just books you've read multiple times, what are your foundational texts? Yeah, when I was thinking about this prompt, I was thinking the one that like most values, most represents me as a person and the one that is just like a base layer for me. And I think when I was a kid, I would just look over the Atlas all the time.

2:04So I'm going with Atlas as my foundational text. I could just stare for maps at hours. I loved memorizing all of the countries of the world. So we're going with Atlas. If I had to pick a book with a little more words, then maybe Bill Bryson's A Walk in the Woods. That's pretty solid. So travel, humor, all those themes I think represent me as a person. I thought you were going to say Atlas shrugged at first. And I was like, wait, that's foundational to you. but an atlas is just as good. That is too long of a book. Now a word from our sponsor, the Range Rover Sport. Neil, got a question for you.

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3:50Minimum spending requirements and terms apply. Offer ends October 29th, 2025. The Dow Jones Industrial Average is one of the most well-known stock indexes in the world, and it just did something it hasn't done since Jimmy Carter was in office. Like Pep Guardiola's Manchester City side, things have been going decidedly downhill recently for the Dow. It is now finished in the red for nine straight trading days, suffering its longest losing streak since 1978. To make matters worse, the Dow has been heading south while everyone else heads north. Both the broader S &P 500 index and the tech-focused NASDAQ have notched record highs in the last week compared to a 3.5 % decline for the Dow.

4:30What's dragging it down? Well, UnitedHealth Group is down 30 % since the shooting of executive Brian Thompson, accounting for nearly 60 % of the entire index's drop. Remember, the Dow is price-weighted, so the companies with a higher individual share price have a greater impact on the index as a whole. when one high-priced stock like UnitedHealth tanks, it brings the other 29 down with it. Still, more than two-thirds of the Dow Jones members have also fallen over the same period, so it's not just a one-company issue. Neil, as we enter into the last few weeks of the year with an important Fed meeting on the horizon, stocks are exhibiting some squirreliness.

5:09Still, this is, I would say, the chillest historic sell-off ever. What we've had, nine straight losing days for the Dow, And overall, it's down 3.5 % over that period. That is just not a big deal in the grand scheme of things. But this is mostly a UnitedHealth story. It is down 30 % since the shooting. So there's been greater scrutiny around health insurers. It's not just about the shooting, though. There is a push among Congress to force the large health companies like UnitedHealth, like CVS to divest their pharmacy units in order to break up what they think is more of a monopoly that these companies have.

5:52So it is mostly a UnitedHealth story. And I do want to home in on the fact that the Dow is generally considered a misleading index because of the fact that it's weighted by share price. I'm just looking at the companies that move the Dow the most, And it's Goldman Sachs, number one, UnitedHealth, number two, Sherwin-Williams, number six. So the paint company, we're not even close to getting to Amazon, NVIDIA, or J.P. Morgan. So the paint company, Sherwin-Williams, no offense to Sherwin-Williams, moves the Dow more than Amazon, NVIDIA, or J.P. Morgan. So it is very skewed. And I think that's why investors are mostly brushing this off.

6:35Right. It's more of a headline. Like you get to say, longest losing streak since 1978. But it is almost opposite day as you go down the Dow because you have companies like NVIDIA who have been actually stinking it up recently a little bit. It's down 17 % since it hit a record high in November 21st. Sherman Williams is down about 7%. That's a recent addition to the index. Meanwhile, Boeing has jumped 10 % over that nine-day losing streak. It is actually the top-performing stock in the index over that period as well. It is also the biggest loser if you zoom out to the year as a whole. So this nine-day period has just been a little funky where part of the reason why you see all the other indexes around it going up is that the Magnificent Seven, those tech-focused companies, have climbed about 8 % in that same period, which is pushing the NASDAQ and S &P 500 higher.

7:26But it is just a little bit of a weird time on the Dow, even though it is technically a historical losing streak. Andy, tease this at the top, but there is a big Fed meeting today, which is certainly getting investors a little nervous. We're pretty sure or pretty much guaranteed that the Fed chair, Jerome Powell, is going to cut rates for the third time this year. The big question we're all going to be paying attention to this at the 230 press conference is what he signals for next year. As we've talked about on this show, President-elect Trump's policies of tariffs, tax cuts, and mass deportations are expected to be inflationary, which could get Powell a little more cautious about Fed cuts through the next year.

8:09So we'll see how stocks respond to what he says about the future forecast of rate cuts. Right. It seems like right now Powell wants to put the car in neutral, not to go down another road trip analogy here. But the Fed might be taking its foot off the brake after lowering this last final time to get to a more neutral interest rate that it's no longer restricting growth. But they also don't want to provide any additional growth stimulus either. So finding that equilibrium is something that the Jerome Powell's comments have indicated that he is more likely to do. That being said, the market does forecast potentially three rate cuts next year.

8:48It just won't be front loaded by any by any means. All right. So we're literally going to be talking about this 24 hours exactly from now with we'll give you an update on what Powell says. President-elect Trump escalated his legal war against the media yesterday, suing the Des Moines Register and pollster Ann Seltzer for election interference. Weeks before the election, Seltzer released an extremely surprising poll that showed Trump down three points to Kamala Harris in the state. He ended up winning by 13 points. Trump alleges a violation of the Iowa Consumer Fraud Act, which bans deception when advertising or selling merchandise.

9:25The lawsuit comes on the heels of a major defamation settlement Trump agreed to with ABC News. On Saturday, ABC parent Disney agreed to pay$16 million toward his future presidential library after Trump sued over inaccurate comments made by top host George Stephanopoulos. When conducting an interview earlier this year, Stephanopoulos said on air that Trump was ruled liable for rape of the writer E. Jean Carroll, when in actuality, Trump was held liable for sexual abuse. That ABC News settlement sent shockwaves across the media industry. Legal experts expected the network to win the challenge because defamation is such a high bar in the United States, which has the strongest protections for defendants of any country in the world.

10:08So the fact that ABC would settle at this stage of the dispute was highly unusual and surprised a lot of people. And it sparked concerns among Trump critics that his relentless litigation against the news will allow him to silence or control the press. and this new challenge in Des Moines shows he's only emboldened. He's definitely emboldened. The surprising thing about the ABC settlement, which is, let's start there first, is that the constitutional standard in defamation cases is usually pretty defendant-friendly because, you know, in America we have very strong freedom of speech laws, rights literally enshrined in the Constitution.

10:45So a lot of people are like, whoa, why did ABC end up settling here? Part of the reason is we probably don't know why they settled. Maybe something that they didn't want to come out and discover. They didn't want this to go in front of a jury. Potentially some things said behind the scenes contributed to them settling. As for the Des Moines case, this is a non-traditional claim. Remember, it's not technically a libel suit. It is going against—they're saying Trump is trying to say that they violated Iowa Consumer Fraud Act, which prohibits deceptive ads. That one seems like it's less likely to succeed.

11:20But just in general, zooming out here, it is a bit the word that has been tossed around by a few outlets is that it is a chilling kind of effect to go after these and use your intimidation power as the president elect to go after these media organizations. And that's exactly what he wants to do. I mean, he knows he's probably not going to win this because the bar for defamation is so high. He would have to prove Stephanopoulos acted in actual malice or with reckless disregard to the truth when he could have just been misspeaking. like Stephanopoulos would have had to been scheming with ABC News staffers in order to deliberately lie to the public about Trump.

11:58That is very hard to prove. But the point of this may not even be to win it all. Trump has sued many, many major media companies in the past. He's lost pretty much all of them. The ABC News one is the only settlement that he's gotten. He's lost against CNN. He's lost against the New York Times. But in an interview with The Washington Post, he gave This was in reference to a previous lawsuit he filed against Tim O 'Brien, who was a New York Times business reporter at the time. He said he knew he couldn't win, but he brought it anyway to make a point. And this is a Trump quote. I spent a couple of bucks on legal fees and they spent a whole lot more.

12:32I did it to make the reporter's life miserable, which I'm happy about. And the goal here may be just to drain media companies of resources, financial resources, by making them lawyer up and spend time and divert their attention away from actually covering it. And then the final, you know, aspect of this case is that trust in the media is at an all time low. So maybe ABC didn't want to go in front of a jury because there have been instances in the last decade where a jury has not been favorable to a media company. What I'm thinking of is in 2016, a Florida jury ordered Gawker, which was this online media publication, to pay Hulk Hogan more than$115 million in damages, which ended up bankrupting the media site.

13:15So maybe they just did a quick calculus here and say, we don't want to go down that road because juries have proven to be unfavorable in the past in cases similar to this one. Here's a tech startup you need to know about, Databricks. Yesterday, the software company raised a staggering$10 billion funding round at a$62 billion valuation, and some superlatives are in order. That is likely the biggest venture capital fundraising round of all time, and it cements Databricks as one of the fastest growing companies in Silicon Valley. I never thought a startup would raise more than the$6 billion OpenAI received earlier this year, but here we are just a few months later.

13:54What does Databricks do? What if I told you it had something to do with AI? Yeah, shocking. Databricks sells software that allows big companies to sift through all the data they collect and use it to build AI models that help them run their businesses smoothly. For example, Walgreens is a client and they use Databricks to help them learn when to refill prescription inventory. Others use Databricks to predict when to offer promotions and to whom, while automakers like Rivian use the software to extend battery life of their vehicles. Only 11 years old, Databricks will soon do$3 billion in annualized revenue, is growing over 60 % annually, and is now flush with cash, so much cash for growth and acquisitions.

14:36Toby, this is a company and management team executing at an elite level. It is, and this is a chunky fundraise because, yeah,$10 billion, largest in the history of venture capital. Looking into it a little bit more, some people actually think, actually, Ghosty, who is the CEO of Databricks, said that a lot of these late stage investors, these big funds like Andreessen Horowitz, don't really have a ton of companies in which they can deploy their capital. There aren't that many companies that can even take a$10 billion or even need a$10 billion funding round. The only names that he threw out were Databricks, Stripe, or maybe OpenAI.

15:10So part of this could just be market conditions that these funds need to deploy their capital and Databricks is saying, all right, I guess we're the only ones on the table for it. But also Databricks is doing very well One of its big competitors is Snowflake, kind of in the same data warehousing game, in the data slicing and dicing game. And right now, their market caps, Snowflake is a public company, is similar to Databricks, is new funding valuation after this latest funding round. So I think we're gearing up for a little bit of a data software war between these two companies. And people listening are probably like, wow, Databricks, this is growing so fast.

15:47They have AI. I really want to invest. Well, the problem is they're maybe not going to IPO anytime soon, and that's the point of this fundraise. They're going to use a lot of this money to provide liquidity to let their employees cash out, which is what an IPO would do. So they're being a little more patient for an IPO. Snowflake, as you mentioned, is a public company. Databricks now eclipsed their market cap, but is going to remain private for a little while longer. Maybe at some point they will IPO and you can invest in this company, but for now they're staying private. You can stay in private.

16:21And one thing about Databricks, again, it's a little hard to wrap your mind around unless you are a data engineer. But some of the quotes coming out of people who use it, one person, Dan Demir, who is the chief product officer of ThredUp said, you can pry it out of my dead cold fingers. So it is one of those companies with a very fanatical following in the industry that it serves. So even if you are sitting here at home and say, I don't know what Databricks does, talk to your data engineer friends. They'll know exactly what they do. Up next, Taco Bell gets nuggy with it. The spirit of innovation is deeply ingrained in America.

17:01And Google is helping Americans innovate in ways both big and small. From improving emergency response times to protecting against cyber attacks, local, state, and federal governments are innovating with Google AI. This is a new era of American innovation. Find out more at g.co slash American Innovation. I'm Scott Hanson, host of NFL Red Zone. Lowe's knows Sundays hit different when you earn them. We've got you covered with outdoor power equipment from Cobalt and everything you need to weatherproof your deck with Trex Decking. Plus, with lawn care from Scott's and, of course, Pit Boss grills and accessories, you can get a home field advantage all season long.

17:43So get to Lowe's, get it done, and earn your Sunday. Lowe's, official partner of the NFL. The newest way Taco Bell wants you to live, Moss, is by getting into the chicken game. Starting Thursday, the chain is adding chicken nuggets to its menu for a limited time. But they aren't just any old nugs. They'll be marinated in a zesty jalapeno buttermilk and fried with a coating of tortilla chips mixed with breadcrumbs for little Taco Bell twists on the fast food staple. While adding nugs might not seem to jive with the rest of Taco Bell's cuisine, adding chicken is most certainly in line with where the fast food market as a whole is heading.

18:22As the cost of beef rises, more and more restaurant chains from McDonald's to Chipotle are relying on chicken to be its main growth driver. Taco Bell's former CEO, Mark King, said during an investor day last year that a large percentage of our business is beef, but the Gen Z consumer wants chicken. Neil, nuggets are a dangerous category to enter into because incumbents like Chick-fil-A and McDonald's have their extremely loyal followers. But I think Taco Bell looked at where the industry winds were blowing and realized they'd be clucked if they didn't go for nuggets. I think there's one word that only matters here out of crispy chicken nuggets, and that is the word crispy.

19:01Because the texture of Taco Bell is largely one note. It's mostly beef slop or cheese slop or bean slop. I mean, that is the one note texture of Taco Bell and people love it. But I think adding this crispy texture to their menu expands their universe a little bit. It is what consumers want. We can we're obviously going to talk about chicken, but I also think consumers want that crisp chili crisp is everywhere this is the kind of texture that consumers really want from fast food from their food in general so i think that really is the one word and they make pains to show that they're going to do this very interesting breadcrumb situation around it so i think that is one word we should pay attention to i actually think you're dead right too because i read an eater article they did test out the uh the new nuggets from Taco Bell and they said they have a thick and craggy coating that's more akin to a Raising Cane's than a Chick-fil-A or a McDonald's or a Wendy's.

19:58They found the nuggets to be pleasantly juicy and crunchy. They didn't use the word exactly crispy, but they did love that breading. And I do think you're right. One thing too, obviously chicken is very popular right now. McDonald's just rolled out the Chicken Big Mac. They are seeing a greater percentage of their sales come from chicken than ever before. But also, market research shows that Gen Z doesn't just like chicken. They specifically prefer boneless chicken and chicken tenders to traditional boneless wings. So I think there were two industry, you know, tailwinds here that Taco Bell was looking at.

20:33One, everybody loves chicken, but then two, specifically younger customers, love boneless chicken as well. Everyone loves chicken. I just want to provide some stats to back that up. Chicken products at fast food, quick service restaurants have increased 11 % since 2019. That includes sandwiches, wings, nuggets, and strips. If you go back to 1970, we were a beef-loving nation, and the average person in the United States ate about 50 pounds of chicken each year. Today, that number has more than doubled, and this year we're expected to pass 100 pounds of chicken per person in the United States. So we've started our love affair with chicken has really blossomed.

21:13And restaurants love this because chicken is a lot cheaper than beef. It's much easier to source. We read all these articles about Sweetgreen when they put beef on steak on their menu. It was a nightmare from a supply chain perspective. It's not like it's not the case with with chicken. So everything is coming up chicken for fast food restaurants. Big questions for Taco Bell's. Is it compete? Can it compete with the big guns in the chicken nugget market? and what the heck are going on with these sauces because that is key. We need to talk about the sauce. I was gonna ask your opinion on these.

21:46So it's offering, they want you to pair it with three new sauces. One is just the chain's signature bell sauce. Two is a jalapeno infused honey mustard sauce. And then three is a spicy ranch sauce that is concocted in collaboration with Hidden Valley. Of those three sauces, Neil, what are you ordering as your side dipping? Whenever they say signature dip, I'll go with that. The other two, I have to say, are not inspiring to me. Honey mustard, I mean, that became boring 20 years ago. And then a spicy ranch sauce sounds fine, but I'm looking for a little more innovation when it comes to dipping sauces.

22:21And apparently they tested over 100 sauces just to get to those three. So I'm a little disappointed with the options for the sauce, to be honest. We're in the wrong industry because I want to be the 100 sauce tester right there because I also have a lot of opinions on sauces. I actually disagree with you, though. I think the spicy ranch is delicious because that is what I do at Chick-fil-A is I get one ranch, one buffalo, and I mix them together. They just took that mixing step out of it for me. Now let's sprint to the finish with a few headlines you may have missed. The FTC is getting serious about cracking down on junk fees.

22:54Yesterday, the commission passed a rule requiring ticket sellers, hotels, and short-term rentals to show total prices up front, including all those annoying extra fees. so customers aren't caught off guard anymore when they check out. So no more finding the perfect weekend getaway only to get hit with a hefty resort fee or buying a ticket to a Taylor Swift concert only to see the price rocket upwards at the end of the checkout process. Definitely not speaking from experience there. This rule to push those hidden fees to the forefront of advertised prices is likely the final act in Joe Biden's war on junk fees, Neil.

23:29How has the war gone, by the way? It's gone okay. I mean, they've tried to do a lot of things to get rid of junk fees or cap credit card fees, do things that make airline disclose baggage fees. You know, they've introduced those, but those have seen a lot of pushback from industry. And there's been some setbacks in the courts. An appeals court in New Orleans blocked a requirement that airlines disclose baggage and other fees up front. So that is currently in litigation. A judge in Texas blocked a rule that would cap credit card late fees. And an interesting point about this particular measure introduced yesterday was that there was one person on the commission.

24:08There's a commission of five at the FTC. One person who did voted against this, and that is Andrew Ferguson, who is going to lead the FTC next year. So a lot of question marks remain around this war on junk fees because it's happening. It just matters whether it will last in the next four years with President-elect Trump in charge. Honda and Nissan are reportedly exploring a merger, an accord that would create a$52 billion Japanese auto giant that can better compete against Toyota and fast-growing Chinese EV makers. Nissan has went totally rogue this year. Shares have fallen 40%, and its net earnings in the middle of 2024 were down more than 90 % year over year.

24:49Honda's piloted the shifts in the auto industry a little bit better, but it still thinks it needs to scale up to better handle the transition to EVs. Combined, Honda, Nissan, and another Japanese automaker, Mitsubishi, sold 4 million vehicles globally in the first half of the year, compared to 5.2 million for Toyota by itself. Both Nissan and Honda were demure about a merger, saying they were exploring various possibilities for future collaboration. Toby, talk about a sign of the times. I didn't know you knew so many Honda and Nissan models, Neil. That was impressive right there. One of the things you look at is what would either side get out of this potential partnership beyond just the obvious fact that you're combining growing scale a little bit.