Market Reactions to Trump Shooting & Will the AI Bubble Burst?

0:01Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Goldman Sachs says AI could be a giant bubble, but what does ChatGPT think? Then former President Trump survived an assassination attempt at a rally this weekend. What comes next? It's Monday, July 15th. Let's ride.

0:24Neil, may I just say that you are looking very spiffy to start the show today? Thank you, Toby. Perhaps it's this new Morning Brew Daily t-shirt I'm wearing. I think it just might be. Wow, it is a beaut. Give our audio listeners a tour. Well, we got in the lab with the Artis on the Morning Brew design team and cooked up a retro vibe for this merch drop. First, it's got a cool Alt logo where the coffee mug handle is the D in MBD. Then on the back... Oh yeah, give us a twirl. I'll narrate it so you can turn away from your mic. The back has this retro radio tower with a very nice city skyline, a lovely muted alternative color palette as well.

1:04Very summery, very classy. I am underselling this, though. So, Neil, tell the people where they can snag this beautiful T-shirt. Yeah, you can go to shop.morningbrew.com to get the Morning Brew Daily Tea. And we'll be posting some pics and a link on our social if you want to see me and Toby in our modeling eras. Oh, yeah. Get your blue steel on, Neil. Well, it was a wild weekend for U.S. politics as multiple gunshots were fired at a Trump rally in Pennsylvania on Saturday. Federal authorities say the shooting was an assassination attempt, but Trump escaped with minimal injuries and plans to speak at a GOP convention later this week.

1:40However, one spectator was killed and two others were critically injured, according to the Secret Service. The secret surface also confirmed that the suspected gunman who has been identified as 20-year-old Thomas Matthew Crooks is dead and authorities found explosives in his car he drove to the event. This was impossible to miss on social media too with multiple photos going viral of Trump stopping and putting his fist in the air with blood still streaming from his injured ear. Neil, lots to dig in here from a fundraising perspective to how it impacts his re-election chances. But let's start with the reaction from the business world.

2:14Right. So top U.S. business leaders, they all posted on social media condemning the violence. Tim Cook, Jeff Bezos came out of hibernation on X to say political violence has no place in America. Some very interesting developments, though, related to two billionaires, Elon Musk, who's been— there's been speculation about whether he would actually fully endorse Trump. He has criticized Biden a lot. But after the assassination attempt, he wrote on his platform, X, I fully endorse President Trump. and hope for his rapid recovery. It wasn't exactly a surprise because just a few days earlier, Bloomberg reported that Musk donated to a super PAC working to re-elect Trump.

2:55So that will be a big narrative going forward. Elon Musk, richest person in the world,$250 billion net worth. He could really put his thumb on the scale in this election. And then there's another billionaire, hedge fund manager Bill Ackman, who also had been rumored to potentially support Trump, even though he supported Biden in 2020. He formally endorsed Trump on social media and then promised a long-form post to explain his thinking because Bill Ackman is known for one thing, and that is posting very long threads on Twitter. He loves his awarding posts. You also have to look at how does this affect Trump's re-election chances as well.

3:32Of course, we are still many months away from the actual election, but you look at how the prediction markets are evaluating his chances to win now. Polymarket was just one of the bigger prediction markets out there. priced his chances of winning at around 70%. That is at an all-time high. And you also can look back through history to see what happens when other presidential candidates or presidents had an attempt on their life. Ronald Reagan is one that comes to mind. His approval rating immediately jumped 8 to 10 points in the aftermath of the attempt on his life. So usually there is this ground selling of support from supporters and other people when something like this happens to a political candidate.

4:08And a big reason why, especially now, is we are in the first assassination attempt of the social media era, and it was absolutely everywhere on social media. There was that iconic image that, of course, eventually got turned into merch and T-shirts on the Wildwood, New Jersey boardwalk and in other places. So that has become a part of the Trump iconography. Meanwhile, social media, one thing leads to another, and obviously there's a million conspiracy theories going around. The word staged was trending on Twitter for many hours following the assassination attempt. So it was really interesting to see this play out in real time on our new technology platforms.

4:50And Reuters talked to a lot of investors and analysts after it happened to just try to get a pulse for what does this mean for the market and the general consensus is there is no real general consensus. Some people have called out Bitcoin as potentially one of these safe haven assets that people rally to in times of political instability. It's up around 8 % in the last five days. It just crossed 60 ,000 again. So maybe Bitcoin is a trade that people are looking at. It is hard to tell, though, because one thing that the markets don't like is uncertainty, though. So you could say that if this boosts Trump's re-election chances, then the markets are seeing a more certain future.

5:26It takes some of the uncertainty out of the election. Again, we're very far away from the actual election day. So tough to say what it actually means for the markets and we'll actually get a better sense when they open today after our show posts. Right. And two things to look for for the week ahead. We have the RNC, the Republican National Convention in Milwaukee. Trump says he's going to speak on Thursday and he's there now. That is the formal nominating venue for Trump and for the Republican nominee. nominee. And also there will be very tough questions asked of the Secret Service about how this guy got a clean shot at a presidential candidate from just a few hundred feet away.

6:04If you listen to people like Sam Altman of OpenAI, Jensen Huang of NVIDIA, or really anyone in tech right now, you'd be under the impression that generative artificial intelligence is the next industrial revolution, a technological innovation as radical and paradigm shifting as the printing press or the internet. But what if it's not? What if generative AI ends up being a bunch of chatbots that get stuff wrong or robot McDonald's clerks that give you 100 McNuggets when you ordered six? What if it's just a bubble waiting to pop? That's the scenario explored in a new 31-page note by Goldman Sachs, which raised some tough but fair questions around the AI boom-sweeping tech.

6:43Specifically, is AI worth the investment? Can you actually make money from it? Will it increase worker productivity? These are$1 trillion questions because that's how much tech giants are set to spend on developing AI in the coming years. Two respected experts interviewed by Goldman, MIT's Daron Asimoglu and its own head of global equity research, Jim Covello, are skeptical that AI will be as transformative as promised. Their argument can be summed up by a simple prompt. If generative AI will cost a trillion dollars, what trillion dollar problem will AI solve? Yeah, one thing they did is just ask you to confront how AI impacts your life right now.

7:23You might see those AI blurbs at the top of your Google search results. You might hear some AI-generated songs as you scroll through social media, but it's yet to change people's day-to-day. What problem, what big question is it solving in people's lives? That was one of the fundamental things that this report was getting at is how does it solve a crucial problem that is going to lead to a recouping of the investment that these companies are pouring into AI right now. Right. How much will it actually boost worker productivity? How much will it take work off your hands so you can work on higher value things?

7:53How much will it contribute to the U.S. economy are the big questions. These are the$1 trillion questions. Goldman Sachs itself, Goldman Sachs economists, they predict that generative AI could boost global GDP by 7 % over the next 10 years. But Daron S. Osimoglu, who's an MIT labor economist, suggests that it will only raise economic output by less than 1 % over the next decade. He thinks that there are just not that many use cases to what are essentially large language models, these chatbots, these chat GPT. It's not going to actually replace or contribute to worker productivity. And that's where he's landed.

8:28And the guy, Global Equity's head researcher for Goldman Sachs, agrees with him. Two other points that this report brought up is the sheer lack of training data and the sheer amount of data that AI is currently burning through. Companies are already running out of data needed to iterate on their AI models. So if you are, I mean, OpenAI CTO Mira Mirati said that the models that the company currently has and works are not all that much more advanced than the models currently out there because they've just already hoovered up all the available data. And then the other limiting factor around AI is just sheer lack of training power.

9:02We are literally rebuilding electric grids, power grids across the country, across the world to satisfy AI's demands. Utility companies are predicted to spend nearly 40 % more in the next three years to keep up with the demand from generative AI. So those are two limiting factors that are kind of putting an upper bound on how good or how quickly we can reach artificial general intelligence, general super intelligence, whatever you want to call it. Yeah, I mean, we'll see what happens with AI. The difference with this and with the Internet is the Internet was much lower cost. AI just costs so much to run.

9:36And every single time you query anything on ChatGPT, it costs these companies money. four tech companies spent nearly$400 billion last year alone in CapEx on AI. So just the major question here is, is AI worth the squeeze? Are you going to see a return on investment? These two people interviewed by Goldman Sachs don't think so. And they do think it is a bubble waiting to pop in the next 12 to 18 months. But other people disagree with that. And they say, AI is completely transformative. And these language models will only get better and transform our labor market. So who's to say? This is just interesting to think about.

10:14Right. It is just one report in the grand scheme of things. But yeah, it is interesting to think about. Now let's head to our winners of the weekend segment where we bring you two news stories that had a better weekend than you walking into an air conditioned room after a long day outside. Neil, you won the pre-show game of who can name the most summer Olympics host cities. Good poll was St. Louis in 1904. So you're up first. Who's your winner of the weekend? My winner is Alec Baldwin because in a stunning turn of events on Friday, the involuntary manslaughter case against him was dismissed and it can never be filed again.

10:46For a refresher, Baldwin was charged in the shooting death of a cinematographer on the set of his movie Rust in 2021 and faced 18 months in prison. Prosecutors in New Mexico said he was negligent with his use of the gun, which contained a live round. Well, he says he never pulled the trigger and was just following established protocol on movie sets. The case had plot twist after plot twist. Then last week, just days after the trial began, it offered its final bombshell. The judge was presented with a manila envelope containing ammunition that she said amounted to the withholding of evidence from the defense.

11:19That impacted the fundamental fairness of the trial, according to the judge. So she dismissed it with prejudice, meaning that the long and winding prosecution of Baldwin is over. He wept and hugged his wife after hearing the news. Now attention will turn to the Santa prosecutors to examine how they bungled this case so spectacularly. Right. It was almost a literal silver bullet that saved Baldwin. There was this introduction of evidence at the last minute and the judge was simply saying that we don't think that we can have a fair trial without this evidence being considered. There was already an uphill battle for the prosecution here because Baldwin's legal team scored this very crucial early legal victory where the judge said that his role as a producer of Rust of the movie was not relevant to the actual involuntary manslaughter that he was on trial for because his role as a producer would lead to more culpability because technically he allowed those things to happen on set.

12:12The judge immediately said, like, we're not going to try him as a producer. We're going to try him as an actor, which made it so that the case was going to be an uphill battle for them. But then this dismiss with prejudice really was the final nail in the coffin. My winner of the weekend is Todo el País de España.

12:34Oh, sorry. I didn't even realize I had slipped into Spanish there. But yes, my winner of the weekend is the entire country of Spain because they had three separate winners, one in golf, one in tennis, and one in soccer. First, Sergio Garcia won a live golf event, which no one really cares about. But the tennis and the soccer, those matter. Carlos Alcaraz beat Novak Djokovic to win his second consecutive Wimbledon title, while Spain won a record-breaking fourth European championship, beating England in the final. Neil, that very well could have been the best day for a single country ever in sports.

13:09The only thing that could have been better is if they won the 4th of July hot dog eating contest or El Perorito Caliente eating contest. Let's talk about these two superstars on Spain. Lamine Yamal, who just turned 17, and Nico Williams, who's a 22-year-old. They are really the stars of this new Spanish squad. And the reason they are in Spain is due to immigration. It's a sign of Spanish multiculturalism. Yamal's mother is from Equatorial Guinea. His father is from Morocco. And then Williams has Ghanaian parents. They made the journey to France through the Sahara Desert. And he said, I am here because of what my parents went through.

13:46And they sort of suffered and immigrated to Spain. And now I have the opportunity to represent my country. So it's really this amazing multicultural soup of Spain that has led to them just being possibly one of the best Euro squads we've ever seen. Meanwhile, on the tennis side of things, Alcaraz is just 21 years old as well. Imagine you're a tennis player and you just survived this era of Federer, Nadal, Djokovic. Nadal finally has aged out a little bit. And now a new Nadal just spawns up equally as good, equally as dominant. There is just an absolute youth movement going on in tennis as well.

14:19Finally, just to tie a bow on the sporting weekend that we had, the Copa America final was last night in Miami between Colombia and Argentina. Absolute chaos at the stadium. Fans overwhelmed the security. Tickets started at$2 ,000, but there were multiple reports that some ticketed and non-ticketed fans pushed past security. It led to the start time being delayed by over an hour. Argentina eventually won the game, but a little bit of a shaky debut for the U.S. as it's looking forward to hosting the World Cup in 2026 as well. So it wasn't a great final for the actual event organizers, but congrats to Argentina on winning.

15:01Up next, how much would you pay for a one-of-a-kind Stegosaurus fossil?

15:09more than 150 million years ago the mighty stegosaurus roamed the earth and later this week it could be the missing piece that ties your living room together on wednesday sotheby's is auctioning off apex a 161 million year old stegosaurus fossil that is expected to sell for up to six million dollars this is no ordinary dinosaur skeleton discovered in colorado in 2022 It's an astonishing 80 % complete and is considered one of the best stegosaurus, if not dinosaurs, ever found. But not everyone is happy about the sale of Apex. Academics worry that the surge in private dinosaur fossil collecting, and it is surging, will stymie scientific research and price out museums from acquiring important materials.

15:54And dinosaurs might not even be the smartest investment anyway. some countries have strict exporting laws, as Nicolas Cage found when he was forced to return a dinosaur skull that was stolen from Mongolia. And because there is such a small amount of comparative data, dinosaur skeletons as an asset class are more volatile than Bitcoin, according to one broker. Toby, are you in or out on investing in fossilized dinosaurs? I am in specifically on this skeleton because it is absolutely a beaut. This is also one thing about Sega Sources is that they use their spines on the back like their iconic plates to defend themselves in combat but this particular skeleton has very little signs of combat it actually has signs of arthritis in it which shows that the skeleton lived to an advanced age so I think in terms of the dinosaur collecting world you could do worse than than getting your hands on Apex yeah so let's talk about the dinosaur collecting world because it is surging this is actually the third wave of dinosaur private collections.

16:53The first wave was in the late 19th century when pioneers moved out to the West and were building railways. And in states like Wyoming, Colorado, that's really like Dinosaur Alley. If you go to Colorado, there's a ton of dinosaur fossil exhibits, and they found a lot there. And that led to the first wave. Second wave started with Jurassic Park in the 90s, and a bunch of dinosaurs were sold then, and there was an uptick in interest. And And now there is a third wave, which is driven by new money investors who are looking for alternative asset classes. Maybe it's the same kind of interest that sparked in Bitcoin and crypto and in watches and various collectibles that we've talked about over the past few years.

17:31But it's really become this big thing where you have celebrities in these bidding wars. I mean, Leonardo DiCaprio and Nicolas Cage were going at it for the skull of a dinosaur. And that was what I referenced earlier. Cage eventually won that fight. but it turned out that it was stolen from Mongolia, so he had to give it back. So we're in this really big third wave of dinosaur collection. Not everyone's happy about it. I think that four to six million, though, seems like a bargain for the Stegosaurus because one of just how complete it is, but also a Tyrannosaurus Rex skeleton nickname stands sold for$31.8 million back in 2020.

18:06I do think name recognition matters in the dinosaur world too because a similar skeleton of a yet-to-be-classified species, So no one really knew what it was at the time. Sold for only 2 million euros two years earlier. So I do think that you do need to be one of those big name dinosaurs like a T-Rex, like a Stegosaurus, like a Triceratops. I will say, too, that one of the reasons why dinosaur prices are inflating is because institutions are skewing sales as well. That sale of the T-Rex went to Abu Dhabi's Natural History Museum. They spent more than$30 million just to snag this T-Rex. So museums are also getting into it as well.

18:41I would buy it on Apex, though, if I could. Don't really have the space to fit it in my apartment. It is rather large, but it is a beaut. Final dinosaur fun fact. We live closer to the T-Rex than T-Rex live to the Stegosaurus. Crazy. To wrap your mind around right there. Thanks for that fun fact, Neil. Athletes from all over the world are beginning to arrive in Paris ahead of the Olympics kicking off, and nerves are starting to build up as the July 26th start date draws closer. But if you're an athlete competing in the triathlon or a distance swimming event, You are nervous for another reason beyond competitive jitters, and that is water quality.

19:17Those two disciplines are expected to be held in the River Seine that flows through the heart of Paris. While no doubt be cool to take a breath while swimming and also take in the 7th Arrandissement, the river's location also means it's not the cleanest of settings for professional athletes. Paris officials have been scrambling to clean up the river, especially E. coli levels, before the athletes arrive. And over the weekend, the French sports minister took a symbolic dip into the river to hopefully ease concerns about water quality. Neil, swimming in the Seine has been banned since 1923 due to pollution levels.

19:50And multiple politicians have promised to clean it up in the past. But this latest effort appears to have been a success. Yeah, it's like the Boeing CEO going on a 737 MAX 2 calm fears. But this river, it is gorgeous. It is romantic. You can say so many things about it. One thing you cannot say about it is that it is clean. A study in the 90s considered the stretch running through Paris as having one of the highest heavy metal levels in the world. And that's not even talking about the fecal matter, which is a major problem because Paris has this ancient sewer system. And when it rains, all this sewage comes and drains into the river itself, which is why they haven't allowed swimming in it since 1923, because it is very unsafe.

20:31And Paris has spent$1.5 billion on a new sewage system to collect water from sewage before it goes into the river in order to not only make swimming events available for the Olympics, but create 20 different swimming areas for regular Parisians in 2025. We'll see if that actually happens, and I hope this sports minister is okay. Me too. There is still a chance that the river won't be ready for the big stage, though. There are backup plans. In the worst-case scenario, the worst-case scenario is if heavy rains come and kind of overflow those new sewage systems and cause those increases in bacteria levels.

21:08What could happen, though, is a triathlon could be changed to a duathlon, which is you just take away the swimming portion, which I would be very disappointed to see. But also, as a competitor to triathlon who has had a swim canceled, there's no better feeling. I don't like to swim whatsoever. So touring into the duathlon, very, very fun. And then the marathon swimming would be moved to a different location as well. So there are backups, but hopefully it would be very cool to see them swimming through the heart of Paris. It would be very cool. So we just have to hope for sunny weather and no rain.

21:38Finally, here's your preview of the week ahead. Shoppers rejoice because Amazon Prime Day is here. The company's version of Festivus arrives tomorrow and lasts for two days, sparking a mid-summer spending spree on discounted items. People are expected to shell out$13.3 billion over Tuesday and Wednesday, a 6 % increase from last year's event. And Amazon is entering Prime Day, riding a wave of momentum. Enthusiasm for its cloud and advertising units has sent stock price to a record high and above a$2 trillion market cap. I don't know what it is about Prime Day, but as soon as it rolls around, I forget everything that I wanted to buy.

22:14I swear I built up this list throughout the year, so just totally blank. So if you're listening to this, write down what you need for Prime Day and make sure you take advantage of those deals. After big banks kicked off Q2 earnings season on Friday, the floodgates are now open. Some of The bigger reports coming this week include Goldman Sachs, UnitedHealth, Johnson & Johnson, Netflix, and Amex. I'm excited for the X's Netflix and Amex. Can Netflix maintain its position as the Apex streamer? Another X right there. Even as all this bundling happens around it. And then for Amex, remember, they have been bringing in millennial and Gen Z consumers like crazy.

22:49Those two cohorts accounted for 60 % of new consumer account acquisitions globally in Q1. Can they keep the momentum rolling with the youths? Starting today, your next purchase of milk, graphic tees, and a barrel accent chair from Target will have to be made with something other than a check. And that's because the retailer is no longer accepting personal checks as of July 15th today, saying it already receives extremely low volumes of checks and wants to get people out the door faster. And here's what they mean by low volumes. Americans wrote$3.4 billion checks in 2022. That's down from nearly$19 billion in 1990.

23:24When was the last time you wrote a check? I never got the chance to write a check. The only checks I get is on my birthday. My grandma does send me a nice check. And I love it. It is nice to get it. But that's definitely a bygone era that I never really got to participate in. Sports gamers have been waiting on this for a long time. EA's College Football 25 launches on Friday, the first time since 2014 that the company is releasing a college football video game. This marketing has been insane. It's been insane. I've seen it everywhere. I can't believe the game's not out yet. But also, I'm thinking about whatever productivity boost AI is promising, I think they're going to be negated by the amount of people playing this video game.