Job Market Slowing, WWE stock soars, A day in the life of Tim Cook

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0:41good morning brew daily show i am neil freiman and i'm toby howell it's good friday and to take you into the weekend we'll be dissecting the jobs report that dropped this morning and introduce you to an under the radar electric vehicle company and i have an update on the burrito bowl brawl between sweet green and chipotle some fun facts about national beer day which is today and today is Friday which means we'll give our stock of the week and dog of the week but first I want to announce the winner of the bracket competition we've been running on social media over the past month we have finally crowned the greatest logo of all time the gloat so Neil can I get a little drum roll please thank you I don't know if that's good for the podcast audio the drum roll but i was doing it yesterday nike is officially the globe it took down apple in an absolute nail biter of a final this was actually a very very good final better than any of the real march madness finals we saw so after over 4 000 votes on social media nike won with 50.9 percent of the vote versus 49.1 percent for apple so closer than we thought it was always going to be the swoosh wasn't it they went undefeated in conference play and just hit their stride at the right moment just too damn town morning brew will get it next year though yeah speaking of next year we are already cooking up some ideas for next year's bracket so let us know if you have any ideas for a march madness style bracket that you've always wanted to see an early front runner suggested by a morning brew newsletter uh reader is regional dishes that would be so you got like a chicago deep dish pizza versus a new england clam chowder versus some texas brisket can it just be march already that sounds so fun all right uh and also we got to do our friday tradition of fast week slow week oh yeah toby lightning fast lightning i don't know why maybe it was because i don't know good friday trump indictment holidays i don't know this week went by 2x speed for me i also realized i could function on four hours of sleep i know neil has not been sleeping a lot He's been cooking a lot.

2:48Can squeeze more out of life when you sleep only four hours. But we'll see what happens tonight. Such an unlock, as they would say on LinkedIn. But first, let's go into our stories. It is the first Friday of the month, which means only one thing. It's Jobs Day. The government released its latest report on America's employment situation. I was going to ask you for a drumroll, but we already did it. I can give you a drumroll. Do you want one? Drumroll. Drumroll. It was pretty, pretty, pretty. Very good. Very good. Let's run down the headline numbers. The U.S. added a very solid 236 ,000 jobs last month, last month, which was exactly in line with expectations.

3:27Good job, forecasters. We always hit them when they miss. Let's give them a round of applause when they do well. Yeah. The unemployment rate ticked lower from 3.6 percent to 3.5 percent. That basically means anyone who wants to find a job can get one right now. And here's a key metric. Lower wage growth. Wage growth slowed to 4.2 percent on an annualized basis. That may not sound great to hear that people are getting lower raises, but tamping down wage growth is key for bringing down inflation. So from a big picture, economists are calling this a Goldilocks report, which is a very popular finance term that just means right in the sweet spot.

4:03Yeah, we do love Jobs Report Day. It actually is interesting because today is Good Friday, which means the markets are closed. So we're not actually going to see how the market reacts to this until Monday. So they have three days to kind of figure out what this all means. Yeah, they're marinating jobs data over the weekend. Right. It is an interesting weekend. And then also, if we just want to talk about what is driving this strong job growth, it's still leisure and hospitality. They're in hiring mode because we showed a graph, but the pandemic dip that happened in unemployment was mostly leisure and hospitality.

4:37And now with the economy kind of heating back up, people returning to traveling, going out to eat again, they're still understaffed. So they're hiring like crazy. So a bunch of the strongest growth is coming from the leisure and hospitality sector. If you want to work at a restaurant or a hotel, you will be able to find a job. They'll probably pay you pretty well, too. That reminds me, I read earlier this week, the Wall Street Journal ranked its hottest job markets and Nashville came on top. Basically, the top 10 job markets were all tourism destinations, Vegas, Orlando, New Orleans, other ones, because people are traveling out in force right now, especially through the Atlanta airport.

5:14Yeah, busiest in the world. And then just another zoom out. So Silicon Valley Bank imploded during March. And that event is not actually reflected in March data because it was collected before Silicon Valley Bank happened. So we'll probably see the ripple effects coming next month. But that is the first time where we might see some kind of faltering in the strong job market in the jobs data. Because one of the ripple effects is probably that small businesses won't be able to secure loans as freely as they were in like a pre-banking crisis environment, which could ultimately result in a couple of layoffs.

5:53So all eyes are on next month to see is this bank crisis going to shake out and affect the job market? Right. But that's what the Fed wanted anyway, because they were raising interest rates to slow lending and the banking crisis kind of helped them out in that scenario. But to finally sum this up, here's my main takeaway. Hiring slowed a little bit, but was still strong. It was actually one year ago when the Fed started hiking interest rates. If you can remember before then, times were a little different. NFTs were going bizarre. But yeah, so exactly one year ago, the Fed started hiking interest rates to slow inflation, which was ripping.

6:31People were concerned it would create a recession to do this. There was just no way around it. You had to do that. You had to create a recession. But maybe there is. And especially after this jobs report, there is hope that you can slow down inflation like we've been doing, like we've been seeing with the wage growth, but not turn the economy into reverse. So hiring is slowing by not too much. The unemployment rate is still near record lows and wage growth is coming down, which is great for inflation. So you'll see a lot of economists today saying that a soft landing, soft landing, soft landing is actually in sight.

7:05That's a great sum up, Neil. We love Jobs Report Friday and we'll see you next month on Friday. OK, I promised at the top of the show that we have an update on the Sweet Green Chipotle Bowl drama. So just to quickly recap for those who missed yesterday's episode, Sweetgreen, the salad company, rolled out a new product it called the Chipotle Chicken Burrito Bowl. Chipotle did not take kindly to that and sued Sweetgreen for trademark infringement. Well, today we have an update for you. The Burrito Bowl brawl has ended with Chipotle scoring a first-round TKO. Neil wrote that joke for me. Thank you, Neil.

7:42sweet green has changed the name of the product and now the arm artist formerly known as chipotle chicken burrito bowl will go by chicken plus chipotle pepper bowl neil has justice been served two out of ten name no one's gonna buy this you might as well just completely kill off the product there's a plus sign in the title you don't know whether i was wondering what you were gonna say whether you're gonna say and or plus i said plus but no one wants pepper in the title too i don't even know what pepper refers to but so i was talking with abby who's morning brews editor she's very wise and she always sees through things and she says and i agree this is a complete conspiracy oh yeah sweet green baited chipotle to sue it to drum up pr oh yes and you can kind of see see this happening by the fact that sweet green really played up the fact that they were ripping off chipotle on instagram yeah they were not they were being completely shameless and open about it and they made it so overtly obvious that they were ripping them off by copying the font and the color of chipotle so right i kind of feel stupid for not seeing that i know it was also right on the eve of national burrito day and sweetgreen was sending out promotional emails offering 50 off the item even as this lawsuit was going on so now i'm kind of on maybe abby's side maybe chipotle and sweetgreen we're on in this together oh my gosh ahead of to drum up support for national burrito day.

9:04Big burrito. The burrito Illuminati is in on this. Wow. So that's your burrito bowl update. It's fun. I like when we get nice compelling conclusions to stories we introduced the day before. Okay, Neil. Time for our favorite Friday segment, Stock of the Week and Dog of the Week. Here's how it works. I will take you through a stock that performed exceptionally well this week while Neil will take us through a stock that performed not so well. So as always, we are just humble podcasters and this is not financial advice. So take everything with a grain of salt. All right, Neil, today's stock of the week is WWE.

9:41We already touched on this story on Monday, but to quickly get you up to speed, Endeavor Group, which owns the UFC, acquired the WWE in a$9.3 billion deal on Monday. WWE's stock reacted to that news. It jumped 10 % this week to a four-year high after the deal was announced. We talked about this earlier, Neil, But why do the target of acquisitions, why do their stocks jump even though we know that they're going to be acquired? Because acquiring companies are typically paying a premium over what the market value of the company is at the time because they're engaged in a bidding war with other companies.

10:18So that kind of inflates the price, the overall acquisition price. And shareholders can make some money by buying up the stock. So in WWE's case, it was acquired for$9.3 billion. I think the day before or when on Friday's market close before it was acquired, it was only worth less than seven billion dollars. So there's this gap that, you know, investors like to fill. There is this I forgot what it's called, but there is some sort of gap that still exists because it won't this stock won't climb to nine point three billion dollars that it was bought for because there's a chance that the deal could fall apart or regulators could block it.

10:58So there is this little delta, right, that always emerges. So you won't see it always go up to the acquisition price. But typically, a company that is being bought, its stock price will rise in value. Stock of the week. And yeah, obviously, a winner is Vince McMahon. We're playing a clip in the background. But his net worth jumped to$3.1 billion this week. Not bad for someone who fake wrestles. Not bad. And I was reading this report by Dylan Byers, who did some digging on the background of this deal and how it kind of went forward. So it was pretty interesting. The biggest rival for the deal was Liberty Media.

11:34Right. So, which makes a lot of sense. Liberty Media owns Formula One, Sirius XM, and the Atlanta Braves. And then the deal was also sealed by a handshake at SoFi Stadium's executive suite during WrestleMania. Wow. That's how you want this deal to go down at WrestleMania. mania all right so your your stock of the week is wwe and let's go to the dog of the week all is not well in the world of phase now phase is an e-sports and entertainment company that went public during covid riding a wave of momentum that appears to have run out of steam the stock fell 16 this week to about 50 cents on the news that another rapper snoop dogg who was a board member investor and overall FaZe hype man resigned from the board.

12:18Toby, I know you're plugged into FaZe a little bit more than I am and maybe the rest of our listeners. So what the heck is FaZe and what did they do to make Snoop angry? FaZe is this esports organization. That's one of the first esports organization from back in the day. The problem is, so their business model essentially is they get a bunch of creators to create content under the FaZe brand and then they just monetize it in different ways through partnerships, through their esports earnings, actually. So anytime you have a bunch of young kids who play video games for a living, it sounds not like a viable business model.

12:54So what Phased is, they brought in the suits as kind of Phased people call them. And that has created a ton of tension within the company that you have these creators that like built this company, Sweat and Bones, this community. And then you have the people who are actually supposed to run the business. And those two groups have not really been getting along. So it looks like FaZe has reached a breaking point. Maybe it was never meant to be a public company. I know. That's what I always think when these companies go public. They've been getting crushed. I think they're down 98 % from their peak.

13:23Yeah. It's disgusting if you look at how much they've fallen in value. And poor Snoop, okay? I know. Poor Snoop. He actually got stock worth 1.9 million. That shut up to worth 7 million at one point. And then now when he cashed out, it was 50K. so he lost seven million on paper he also secured some stock for his kid i read yeah that was part of the deal of him like jumping on and he also repped phase at the super bowl in 2022 that's the problem because phase has this outsized cultural impact it did emerge from just esports culture into wider culture so that's what they were thinking it's like all right we are going to become the next i don't know supreme or yes brand that becomes synonymous with this generation and while that might be true, it's just the luster has worn off a little bit.

14:09So I don't know what's going to happen going forward. Well, you're going to get delisted from the NASDAQ if you're worth 49 cents a share. For sure. All right, that was our first half of the show. We're going to take a quick break. Coca-Cola. For the big. For the small. The short. And the tall. Peacemakers. Risk takers. For the optimists. Pessimists. for long-distance love. For introverts and extroverts, the thinkers and the doers. For old friends and new. Coca-Cola for everyone. Pick up some Coca-Cola at a store near you. This episode is brought to you by eBay. Buying parts for your car? You'll know that.

14:56Will it work? Feeling. But on eBay, buying parts is different. eBay's free returns means if it doesn't fit Or if it isn't what you expected, you just print a label, drop it off, and get your refund fast. No haggling, no stress, and at least 30 days to return any eligible item. Millions of parts, free returns. eBay. Things people love. Eligible items only. Exclusions apply. Toby and I want to introduce you to an electric vehicle brand that maybe you haven't heard of, but you might see a lot more of them on the roads in the coming years. It's named Polestar. It's a Swedish EV maker that made news yesterday because it released a forecast that it will deliver an impressive 80 ,000 cars next year, up from the 51 ,000 it shipped this year.

15:40So here's the thing that's different about Polestar than other EV companies, or at least one of them. No drama, Obama. No drama. This is Scandinavian simplicity at its finest. There's no Elon at the helm focusing on social media and Doge. There's no founder getting convicted of fraud like what happened at Nikola. Polestar just seems to be executing without making a big deal about it, and it's quietly beating out its competition. Yeah, we'll get into the competition, but you probably haven't heard of Polestar, honestly. Like, it is under the radar. It's got this really, really interesting corporate structure and history.

16:14So it's this newish EV brand that is jointly owned by Volvo and Geely. Volvo obviously being a Scandinavian automaker, but Geely is an automaker out of China, which acquired Volvo in 2010. So it's this weird Russian doll of electric vehicle makers. So it was originally a high-performance brand under Volvo, not an EV brand, but then it pivoted in 2017, kind of after the rise of Tesla, to start making electric vehicles. And it's kind of threading the needle between luxury and not luxury. so I'll just take you through some of the price points of various electric vehicles. So the Tesla Model 3 is actually now the cheapest after all its price decreases recently.

16:58That comes in at$43 ,000. Polestar 2 starts at$48 ,000, while the Lucid Air is the high end at$87 ,000. So you can see how it's kind of like this mid-tier, not exactly luxury, but not luxury, that it seems like it's captured a pretty decent market from that. What I found most interesting from the Polestar story is that it doesn't do its own manufacturing. Right. And that's helped it deliver all these vehicles. It outsources that to Volvo and Geely plants. Right. And that's in such stark contrast to what other EV companies are doing. Tesla is not only making its own cars, it's making its own batteries.

17:37And they basically want to make the entire supply chain in their own factories. And Rivian and Lucid and all of these other legacy car makers that are moving into EVs are making literally their entire vehicle by themselves. And Polestar is like, well, we'll just do contract manufacturing, which is very popular in the food business, where they say, oh, you already have a plant? I don't want to spend$4 billion building one. It's a lot more capital efficient. We'll see in the long run, though, because usually owning your own supply chain does lead to more efficiency down the line. but it seems like Polestar is doing pretty well.

18:14So again, just to contextualize that number that Neil put at the beginning of this story, that they're about to ship 80 ,000, expected to ship 80 ,000. Lucid expects to ship 12 ,000 vehicles, nothing. Rivian, the electric truck maker, expects to ship 50 ,000. Polestar's at 80 ,000. But then Tesla, Tesla has a set of target of 1.8 million. So it just does show you there still is this huge difference in scale. Making cars sounds really hard. And I know we've been like kind of hyping up Polestar, but its shares are still down 70 % over the past 12 months. A lot of EV brands. Yeah. So it's not immune to that.

18:53It could very well, you know, stumble and who knows. But it was just kind of an interesting company that we had never, that may not be on your radar. Under the radar. Typically under the radar. All right. Now let's go to someone who's not under the radar at all. Tim Cook is the latest LinkedIn influencer. He told GQ in an interview this week that he gets up at 5 a.m. to read and reply to customer feedback. He said, if you're in the business like we are of creating technology that really enriches people's lives, you want to know what it's doing. You want to know how people are feeling about it.

19:24It's funny because you likened it to your own habits, which is... Yes, I'm very much like Tim Cook. Well, in this sense that obviously Morning Brew is an email newsletter company. And I'm sure in the early days and still now, you're in the inbox every day seeing what people respond to. And it truly is just such a personal connection to the customer. So obviously the scales are a little different. Like Apple's the biggest company ever. But you're doing the same thing. You're interacting with customers. It definitely reminded me of what I was doing. Just three hours in the inbox every single day replying to people.

19:57You earn a lot of loyalty that way. And I'm sure anyone who gets an email back from Tim Cook is going to be an Apple customer for life. Not that that is scalable, but it probably gives him interesting insights into how people are using the products. So I think this is a really cool thing to learn about Tim and is probably one of the reasons he's leading a$5 quadrillion company. $5 quadrillion. Not quite, but I do think that Tim Cook is maybe the GOAT modern CEO. He has grown Apple from$365 billion market cap when he took over to, at one point, over $3 trillion. So just the sheer, if you're looking at sheer creation of value for shareholders, which you might say is the job of a CEO, the man has crushed it.

20:42So it was really, that whole profile from GQ on Tim Cook was extremely interesting and I highly recommend going to read it. Can we do a quick rundown of other CEOs morning routines? Yeah, hit me. All right. Bill Gates starts his day with an hour on the treadmill and skips breakfast. Rate that. Classic overachiever right there. An hour, no breakfast. Jesus, Bill. Bezos likes to start it by puttering around. That's his words, puttering. And then having his first meeting at 10 a.m. Do not believe that Bezos could get away with not having a meeting before. I like it. I mean, I just don't believe it.

21:15That feels honest. Zuck says the first thing. This was back a couple of years, so I just want to caution that. But Zuck says the first thing he does is check Facebook. Yeah. There's no quicker way to rot your brain. Company man. I'm surprised he's still around. And then Elon Musk says he eats a donut. My favorite, though, is Beethoven. very particular about his morning brew. He counted out 60 coffee beans and then made coffee by himself before writing some badass music. Okay. There might be some sort of compulsiveness right there, but before we move on, what is your morning routine? My morning routine is I wake up, I have five minutes to get ready.

21:49I quickly make my bed though, because I heard that speech, uh, from the famous commencement address, always make your bed. So I do do that, but I am five minutes in and out. Yeah, mine is literally get out of bed. If I accomplish that, then I know I'll have a good day. It's literally just, can I get out of bed? It's a low bar. Okay, Neil, today is Good Friday, but it's also National Beer Day. So we're going to share a couple of fun beer facts. But first, Neil, why is today April 7th National Beer Day? Yeah, so sometimes these national days are just lobbying gimmicks. marketing gimmicks to get you to buy their product.

22:28Turns out April 7th is not a complete coincidence with National Beer Day. It's when FDR took the first steps to wind back prohibition in 1933 by allowing beer under like 4 % to be sold after this year's long drought. So once he signed this into law, he said, I think this would be a good time for a beer. Dang it, I wanted to say that line. That is such a good line. Which is definitely gonna be my new saying at parties. I think it would be a good time for a beer. Yeah, that's how I'm going to leave conversations at parties. I never know what to say. Yeah. After he signed it, said the amazing beer line, people went to breweries all over the country and just slammed 1.5 million barrels of beer.

23:05And now we're at National Beer Day. I love that. It's actually crazy that FDR single-handedly created the light beer industry too. By setting the ABV at 3.5%, he created what most people drink today still. So the ripple effect of that is super interesting. Okay, Neil, I actually have a quick little quiz. So we actually do know which state drinks the most beer. We saw the chart of that. It's New Hampshire. But do you know why New Hampshire residents actually drink the most beer? There's a very specific thing that allows them. I've been in New Hampshire. I personally have drank and beer in New Hampshire.

23:45I would say usually these things have to do with taxes. So I'm going to say there's no sales tax on beer or something like that. It's likely due to the state's unique lack of tax on alcohol. Let's go. Good job. Neil always knows these things. It's impossible to stump him. So if you're looking for a good time and you don't want to break the bank, go have a beer in New Hampshire. A few more facts. The U.S. average, this is from data from Square. The U.S. average for a beer from a bar or restaurant is$6.05. California is the priciest at$7.95. Mississippi is the cheapest at$369. And then I want to tell you, my friend and I developed a new cost of living index.

24:24Instead of housing prices, this will tell you how expensive it is to live in a place. And that's called the Bud Light Index. And it's how much does a Bud Light cost in these particular cities? We're living in an$8 Bud Light city in New York. I feel like Philly is a$6. Denver is also a$6. Austin probably went from$4 Bud Light to$7 Bud Light over the past few years. It's a good index right there. The Bud Light Index. Yeah. Then before we go, the beer industry is kind of on shaky ground right now. For the first time last year, Spirits topped beer in U.S. market share for the first time ever. And again, like this New Hampshire thing, it kind of all comes back to prices and economics.

25:04Liquor has become 20 % cheaper relative to beer in recent decades. And people who are turning 21, the Gen Zers have different tastes. I know. I hope beer makes a comeback. It's the oldest alcoholic beverage ever. Is it? Yeah. 3 ,500 years. It was being traded. It was being used. All right. Fact check him on that, everybody. 3 ,500 years. It created civilization. I know that. Okay. Yeah. All righty. That is our show. Before we hit the credits, got to say happy birthday to my mom. Oh, happy birthday. She's a big listener. You're an amazing role model and the only person I know who works more than me.

25:37So I hope you can retire soon. That's nice. Please email us with any bracket ideas or telling Toby he's wrong about that beer stat at Morning Brew Daily at morningbrew.com. Here is our amazing crew that works on this show. Our producer and editor is Emily Milliron. Our technical director is Justin Orlando. Evan Frolov is the show's associate producer. Our supervising producer is Bryce Beloff. Raymond Liu is our associate producer. Got an army back there. Dan Bauza is our master of sound. Hair and makeup's morning routine is apparently not showing up to work. Devin Emery is our chief content officer.

26:11Our show is a production of Morning Brew. Great show today, Neil. I wish you all well.

26:46Mutual. Fascinating. It's accompanied by his natural ally, Doug. Uh, Lemu, is that guy with the binoculars watching us? Cut the camera. They see us. Only pay for what you need at LibertyMutual.com. Liberty, Liberty, Liberty, Liberty. Savings vary underwritten by Liberty Mutual Insurance Company and affiliates excludes Massachusetts.