Jerome Powell Ain’t Leavin’ Yet & Movie Tickets Cost $50!?

0:01Good morning, Brew Daily Show. I'm Neal Freyman. And I'm Toby Howell. Today at his final Fed meeting, Jerome Powell made a surprise announcement.

0:10Neal Freyman:Then what we learned from the big tech earnings bonanza yesterday. It's Thursday, April 30th. Let's ride.

0:23Good morning. It's almost time for beach season, country music concert tailgates, and your friend group probably has their preferred light beer for the occasion. So which one do you go for? Food & Wine's vaunted taste testers released their rankings of the best-tasting, ultra-popular light beers, and everyone at our office agreed with number one, Miller Lite. Then came Bud Light, Coors, Natty Light, Bush Light, and in last place, Michelob Ultra. I think this list is pretty accurate.

0:50Neal Freyman:Natural light, though, kind of not even bringing up the rear. What the heck is going on? Also fascinating that Michelob, which just became the best-selling beer in America in 2025, is last. Which brings me to my next point. The can makes a huge difference here. If you serve a Michelob in one of those wide-mouth aluminum cans at a baseball game, That would vault it up to first in most people's rankings. It was funny reading this review, though, because all the reviewers were like, once we put them in paper cups with no labels on them, we could not tell the difference. They all tasted like beer.

1:24That's kind of the point. I mean, you kind of put it in a red solo cup and you drink in. The differences between them don't seem all that much. But I think they nailed number one. Miller just slaps. And now a word from our sponsor, Windmill. Toby, my allergies are going crazy. Oh, are you allergic to dashing charismatic podcast hosts? No, I'm allergic to pollen.

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2:19It's not every day you can say that a Federal Reserve meeting should have been moderated by Andy Cohen, but yesterday's was. In his final press conference as Fed chair, Jerome Powell said he will remain a central bank governor for a time to be determined because of President Trump's interference. Powell was not his usual tight-lipped self when discussing what he considers grave threats to the Fed's independence. He said, My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors. I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors.

2:59He's referring to Trump trying to fire Fed official Lisa Cook and the DOJ launching a criminal investigation into his handling of the Fed's building renovations, which was widely seen as a scheme to pressure Powell to lower interest rates. The DOJ ended that probe earlier this month, but Powell said, I've said that I will not leave the board until this investigation is well and truly over with transparency and finality. So what does it mean that Powell is staying on as Fed governor, even as he leaves the chair? Well, remember when we talk about the Fed, we're really referring to the Federal Open Markets Committee, a group of 12 Fed leaders that includes the chair, governors and reserve bank presidents from around the country.

3:35Powell's term as chair ends May 15th this year, but his term as a governor runs through 2028, and he's not going anywhere.

3:42Neal Freyman:It is very funny that we just talked about the Fed story and never actually got to the actual announcement of what they did with interest rates, which is held them steady, but it is overshadowed by all the other stuff, all the other drama going on at the Fed right now. Powell is sticking around. What does that mean for new Fed chair nominee Kevin Warsh, who is coming in to take up the reins? Powell kind of tried to allay some of those concerns, saying, I am not going to be a shadow Fed chair. He plans to keep a low profile as a governor. He wants to kind of be there to be the steady hand on the committee, but he doesn't want to exert undue influence over the chair, which is what some people may fear.

4:21Neal Freyman:Maybe Trump fears himself because he doesn't like Powell's influence on the Fed right now. But Jerome Powell did try to take a step back and go, listen, I'm the adult in the room, but I'm not by any means going to be the leader of this committee going forward. It's a very unusual decision. This does not happen. When the Fed chair leaves, he peaces out usually. And this hasn't happened in the modern era. The last time that a Fed chair stepped down from their position but stayed on the board of governors was back in 1948 for this one guy, Mariner Eccles, who sounds like the most Fed chair. Oh, Mariner.

4:52The most Fed chair name possible. So he stepped down in 1948. but he remained a governor until 1951. So the two people have done in the last century are Jerome Powell and Mariner Eccles.

5:02Neal Freyman:The other reason Jerome Powell might be sticking around is that we are in a very divided Fed right now. Four dissents for this rate cut decision. Only one actually voted to cut rates. That's Stephen Mirren, who more aligns with Trump's view of the economy. But three Fed presidents disagreed with the wording of the Federal Open Market Committee's statement. They took issue with the phrases, additional adjustments or easing bias, basically saying that we do not foresee any rate cuts coming anytime soon. So we don't agree with even hinting at the fact that more rate cuts could be coming down the pipeline.

5:35Neal Freyman:So maybe that's another reason that Jerome Powell is sticking around is that he knows that right now the Fed is the most divided it's been in a long time. Usually the Fed votes in the lockstep with each other, but given all the supply shocks that are coming into the economy, the Iranian war coming out of COVID, it has become a difficult policy environment to say the least. Yeah, inflation last month surged at its biggest pace in nearly four years. And then this morning, don't look at the oil chart because oil is going crazy. It surged past 125 bucks this morning, the highest level in four years.

6:06And, you know, we're worried about that. But also, if you are on the Federal Reserve Open Market Committee or you're Kevin Warsh looking at this and you're seeing oil go past 125, you're saying, how could I possibly think about a rate cut? Because energy prices kind of trickle through the entire economy. so inflation's bad unemployment is going trickling up so the Fed is just staying put for now it was

6:26Neal Freyman:kind of sad though Jerome Powell left the podium for the last time he got a big applause and he goes I won't see you next time we're not going to see any Jerome Powell press conference anymore it's going to be a new era for Morning Brew Daily as well moving on the Kentucky Derby is known as the fastest two minutes in sports but yesterday was the fastest two minutes in tech four of the magnificent seven companies reported earnings after the bell bringing an avalanche of info for traders to digest about the health of companies that collectively make up more than 15 percent of the S &P 500's total market cap.

7:00Neal Freyman:Alphabet, Amazon, Meta, and Microsoft actually had a solid last month pushing indexes to all-time highs but the market was on high alert yesterday to see just how much money the quartet is blowing on capital expenditures tied to AI and if a payoff is arriving soon, especially after a report earlier this week that OpenAI has been struggling to meet revenue in user targets. That was the scene yesterday. Now to the major players kicking things off with Alphabet. Alphabet is the guy at the craps table who seemingly cannot roll a seven. It reported a 22 % jump in revenue and an 81 % rise in profits.

7:37Neal Freyman:Google is spending a lot on AI, around$185 billion this year, but it makes it back on providing access to computing and storage. Its cloud division made 63 % more money this quarter than the year prior, and more is coming down the pipeline. Its cloud backlog rose to$460 billion, up from$240 billion last quarter. Neil, this stock is looking very nice and rose 6 % after hours. Unfortunately, it feels like I'm never at the craps table with this kind of person, And I'm certainly not that one. Well, CEO Sundar Pichai said that AI is, quote, lighting up every part of this business. And you remember when everyone declared Google Search dead because OpenAI and ChatGPT were going to eat its lunch?

8:17Well, search revenue was up 19 % from the same quarter last year to$60.4 billion in quarterly sales. And then Google also makes chips. Does anyone know that? They have these things called Tensor Processing Units, which are TPUs, which compete with NVIDIA's GPUs. And it has these deals with Anthropic and a bunch of other tech companies to sell these TPUs, and they're widely catching on across the industry. So Google has spread its wings across the AI industry, and it's doing really, really well.

8:44Neal Freyman:Yeah, just introduced a chip customized for inference, which is basically just serving you up the answers, not training the models that need all this information. So absolutely right on the Google search front as well. I saw one tweet saying that, how is Google search still growing 19 % year over year with nearly monopoly-like market share in the category? It does boggle the mind, but apparently people like the Google AI overviews and you still need to know stuff. So Google search is doing all right. Meanwhile, Google owns 14 % of Anthropic and Anthropic is now seeking a valuation of$900 billion.

9:18So as that valuation grows, which seems like it's going to astronomically day by day, Google will also benefit. All things coming up, Goog.

9:25Neal Freyman:Microsoft, on the other hand, is a guy at the crap stable who can't stop rolling sevens. Going into yesterday, its stock was coming off its worst quarter since 2008, making it the laggard of the Magnificent Seven so far. The focus was on its Azure cloud division. And while that unit did post a solid 39 percent gain, that wasn't enough to wow investors who expected about that level. The results also paled in comparison to that of both Google and Amazon, which we'll talk about in a bit, who both had accelerating cloud growth. Neil, it seems like Microsoft has just been caught in the doldrums recently as people wonder if software like Word and Excel can survive the AI era.

10:02Yeah, according to a Jeffries analyst, Microsoft is facing two problems, which is why its stock has been caught in the mud. One is the weak adoption of Copilot. Last quarter, Microsoft said that only about 3 % of the company's corporate users were paying for Copilot. And I saw someone online say, Copilot is the PT cruiser of AI. Nobody asked for it, yet somehow it's everywhere. And then the other issue is Microsoft Office software business. It has been caught up in the SaaSpocalypse fears that have sent a lot of other software shares down by the fact that OpenAI and especially Anthropic are releasing software tools that will allow companies to basically create their own Excel and PowerPoint that's damaging for Microsoft's business.

10:43Neal Freyman:First of all, I love the PT Cruiser. It's a good look. You can punch your little brother and say PT Cruiser, bruiser. But the other thing that had investors kind of yawning was their cloud growth, which is an all-important division in a lot of these companies. But I said that it grew 39%. Feels like a lot. But when you see the growth trajectories of both Google's and Amazon Web Services, Azure is actually growing at a flat rate. Again, it's still growing 39%, but it is not accelerating like Google Cloud or Amazon. You're right. Exactly. So that is the reason why they're saying, hey, you did well, but this is exactly what we expected out of you, which is why its stock isn't doing so hot.

11:20Neal Freyman:Moving on, Meta is sort of the mirror opposite of Google, I would say. It also sees its capital expenditures for this year increasing to around$145 billion, a 7 % jump from what it had previously projected. But it can't point to a clear payoff from that spending. Whereas Google has its cloud division to fall back on, Meta does not. while its standalone Meta AI app is stuck in neutral. The good news is that revenue climbed 33 % from a year earlier, which was its fastest quarter for growth since 2021, but its stock still fell about 9%. Yeah, Zuck did not offer any assurance to investors whatsoever.

11:58He said that Meta doesn't have a, quote, very precise plan for what each AI product will look like. And then he said, I think we have a sense of the shape of where things need to be. and he acknowledged that his answers might be unfulfilling, which yes, because when you're spending as much as Meta is on AI, you maybe want to have or show a concrete plan for what you're building. A bunch of the other companies are showing more of a concrete plan. Meta doesn't really have one.

12:22Neal Freyman:He has concepts of a plan, Neil, but it does look like some of its investment is paying off because it debuted its artificial intelligence model, Muse Spark. That was the first release under its new super intelligence unit when they brought in Alexander Wang for a lot of money. and it does look like they're having another model rollout later this year. It's slowly catching up, and that's what investors do want to see, even though they are spending a lot of money. Their business is also doing very well. We should note that all of these businesses underlying outside of the AI race are doing very solid, which can justify some of the spend, but for sure, Meta is the big question mark.

12:58Neal Freyman:Figure out your strategy. Let's show some results because you don't have that cloud division that can make up a lot of those losses. And finally, Amazon. Amazon was sort of an amalgamation of everyone else's earnings. It, too, had accelerating cloud growth, beating analysts' expectations and growing at its fastest rate since 2022. And it, too, made Wall Street nervous by exceeding its planned capital expenditures in the first quarter. And it, too, reported strong underlying numbers for its main business of selling you stuff, which has become more profitable thanks to filling orders more efficiently.

13:28Neal Freyman:Feels like all these earnings could have been in email, Neil. Businesses doing well. Cloud up. CapEx also up. Rinse and repeat. Going through Amazon's earning is a trip because, you know, 10, 20 years ago, this company just sold you stuff online. Well, actually just books in the 90s. And now it does pretty much everything in the world. So you mentioned it has these large AI ambitions and so has a huge AWS division. But also, yes, online stores grew 12 percent. And then you look at the fact that it has a space arm. It acquired a satellite operator, Global Star, for$11 billion. So it has this Internet satellite business.

14:03This is the company that previously used to sell books, mind you. And then finally, you're still going down the earnings report and you're like, oh, Project Hail Mary. Yeah, they made Project Hail Mary, which also earned$615 million in global ticket sales at the box office. So it's like, what does this company not do? At the end of the day, investors don't care about the online sales. They don't care about Project Hail Mary. They don't really care about the space race either. It all comes down to AWS and AI.

14:28Neal Freyman:Amazon is also moving up its Prime Day sale, if that's something that you care about. if you're looking for some toilet paper, it's gonna take place in June this year. It used to take place in July. So in case that is something that you care about, which honestly, a lot of people who use Amazon, that is probably what they care about. That's something to mark on your calendars. All right, we're gonna take a quick break and come back with Neil's numbers right after this. Neil, I've got something pretty big on the Verizon. You mean Horizon? Nope, pretty sure that's not a real word. But the Verizon Visa card helps eligible Verizon customers get more from everyday spending.

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16:31Neal Freyman:Learn more and get started at pulley.com slash brew. That's pulley.com slash brew. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will feel as refreshing as the first sip of a Miller Lite. For my first number, movie ticket prices have hit a previously unthinkable milestone,$50 for one ticket. According to the Wall Street Journal, Regal Cinemas was charging$50 for an opening night seat to Dune Part 3 in December in 70mm IMAX, and it scared off absolutely nobody. They were gone in minutes. It shows how cinemas have learned a thing or two from airlines, segmenting customers into first class and economy, and squeezing as much profit as they can out of first class.

17:11Overall, prices for movie tickets have been increasing in line with inflation. These days, according to the Journal, adults seeing a movie on a regular screen pay an average of$12.75. But for other people, the kind who memorize which font Wes Anderson uses in all his films, it's Futura, who are willing to pay much more for bigger screens with better sound. 17 % of movie tickets sold last year were for premium format theaters like IMAX, up from 13 % in 2021. and those tickets cost$18 on average, but can reach 30 and now even 50 in major cities like LA and New York. Toby, would you pay$50 to see Dune Part 3 on opening night in 70mm IMAX?

17:48Neal Freyman:Quite simply, yes. So I think that the strategy is paying off for these movie theaters because that sounds like an experience. I mean, that is what they are selling you, that you go to the movies now. It's not just something you can do at home in your couch. It is a big ordeal. You are willing to pay upwards of$50 for it. It does sound crazy to say. The movie industry is moving in this direction because they are actually selling less tickets than before the pandemic, about a third less than before the pandemic. But revenues have come back to be on a par with pre-pandemic, and that is because they're making more money per patron.

18:22Neal Freyman:Part of that also comes to concessions per visit. The average AMC customer now spends$9 on concession per visit compared to$5 pre-pandemic. And even$9, you can't even get a hot dog for$9. Which, why did I say hot dog? Who eats a hot dog at the movie theaters? But it shows how they're squeezing more money out of each individual person coming to the movies. For my next number, you're never going to believe this, but most traders on the prediction site Polymarket are losing money. And the only ones who made money appear to be automated bots. A Bloomberg analysis of Polymarket Wallet since the beginning of 2025 found that over 100 ,000 accounts lost over$1 ,000, nearly twice the number that made at least that much.

19:02And a separate study by a University of Toronto business school professor found that 69 % of traders on Polymarket lost money. There's no house on prediction markets, so every dollar lost is a dollar gained by other traders. And those traders seem to be bots, high-frequency automated traders that have long been deployed in other financial markets. Bloomberg found that these bots have made a profit of$131 million on Polymarket, mostly driven by a group of 823 users that have each made over$100 ,000. Toby, one of the main promises of prediction markets was that they'd be fairer to the everyday trader because there is no house stacking the odds against you.