Markets React to Donald Trump's Presidential Win & Wellness Industry Booms to $6.3T

0:00The spirit of innovation is deeply ingrained in America. and 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. Good morning, Beer Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, we have a winner in the presidential election. Donald Trump is headed back to the White House. Then how markets are reacting to the incoming administration. It's Wednesday, November 6th.

0:38Let's ride.

0:43Former President Trump can soon drop the former. About a half hour ago at around 530 a.m. Eastern time, news outlets projected that he was elected as the 47th president of the United States in a historic political comeback. It's an unprecedented or nearly unprecedented victory. At 78, Trump is the oldest person ever to win a U.S. presidential election. He's the first president in 132 years since Grover Cleveland to serve two non-consecutive terms in office. And he's also the first president, current or former, to be convicted of crimes. And we will dig into all the results and all the reactions from markets in just a bit.

1:22But first, a word from our sponsor, Yahoo Finance. Neil admits all the uncertainty of an election night. It's great to have a partner like Yahoo Finance. They can help you cut through all the noise so you can make sense of a volatile time for stocks. Maybe it's reading a news story or digging into some of their analyst ratings. Whatever you need, they're a trusted place to navigate the market right now. Yep, and it can feel like a rocky time for you and your portfolio, but Yahoo Finance can help you find that stable ground by getting you the news and real-time market data you need to make the best decisions possible.

1:53So head to YahooFinance.com to see more of what they have to offer. Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. Okay, let's dive into the results of this election and what it could mean for business and the economy.

2:32As we record this at 6 a.m. Eastern, Trump has won 277 electoral votes, putting him over the 270 threshold needed to win. Kamala Harris, a Democrat, has 224. She was aiming to become the first woman president of the United States, but like Hillary Clinton before her in 2016, lost to Trump. Polls showed this race being a coin flip, but in the end, Trump blanketed the map in red. He won key swing states, including Pennsylvania, Georgia, North Carolina, and Wisconsin, with some close races like Arizona and Michigan left to be called. In the coming days, pundits will analyze this race to death to try and explain what went so right for Trump and so wrong for Harris, because this was a clear-cut victory as they come.

3:15Here is a crazy stat. According to CNN, there wasn't a single county in the U.S. where Harris outperformed Biden in 2020 by 3 % or more. Before the race was officially called, Trump gave a victory speech in Palm Beach, Florida, where he pledged to fix everything about our country. He also offered plenty of praise for his supporter, Elon Musk, the SpaceX and Tesla CEO, who is poised to have a prominent role in a second Trump administration. Toby, what has been the market's response to this? Yeah, so the Trump trades have been doing very well. Obviously, they were kind of tracking his election odds all evening.

3:48shares of Trump Media, his media company that he owns a large stake in, were surging a lot throughout the night. They finished up around 34 % in the after hours trading. They fluctuated throughout the day as his election odds ebbed and flowed, but they settled into a nice gain as it became clear that Trump was going to win. Bitcoin also surged. Trump has promised to be this very crypto-friendly, embraced the crypto community candidate. So Bitcoin actually reached an all-time high, crossed the$75 ,000 threshold. Dogecoin also jumped 16 % as well. That's a trade that is kind of within the Trump-Elon orbit, if you will.

4:29And then also the US dollar jumped as well, especially compared to the currencies of several major Asian economies, especially compared to the Mexican peso, because the idea is that Trump is going to bring these tariffs, bring these tax cuts that could potentially reignite inflation to keep borrowing costs high, et cetera, et cetera. Right. And that's why you see Treasury yields spike as well. They went straight up. This is a bet that Trump's policies in a second term, like those tariffs, like a lot of deficit spending, will actually reignite inflation and keep borrowing costs higher. Maybe the Fed is not going to cut rates as aggressively as it would otherwise.

5:08Another stock that we've been watching too, is Tesla. Tesla went way up. Its stock is up nearly 14 percent in early after hours, early morning trading, whatever you want to call it. And that is a bet that, you know, Musk will have a very prominent role in the Trump administration. We don't know exactly what that's going to look like yet. Yet he has claimed to want to cut government regulation, cut government spending by two trillion dollars as the head of Doge, the Department of Government efficiency. And Trump is expected to roll back regulations or roll back incentives that have spurred electric vehicles.

5:45And you're wondering, hey, why is that good for Tesla? Well, Tesla is the market leader. So perhaps by rolling back incentives for other EVs, Tesla might benefit. Big banks are also another potential winner under a Trump presidency. He's expected to maybe pursue a little bit lighter regulatory stance for banks. So that means maybe blocking some of the new requirements, including those increased capital requirements that were proposed under those Basel III endgame regulations that we have talked about. So you saw shares in JP Morgan, Chase, TickHire, After Hours, Bank of America as well, Wells Fargo, all were up in that 7 % to 8 % range this morning.

6:23Let's zoom out to the entire stock market, though. One thing to remember is that the stock market does tend to just consistently go up, even across different administrations. If you start at November 1st of each election year and you go through October 31st, four years later, the average index price return is a cumulative 34%. So the joke is that stocks go up and it does kind of tracing back all the way to 1928. You do see that across a wide span of administrations. Right. And stocks are surging this morning. The Dow is up over 1100 points as investors digest what a second Trump administration might mean for the markets.

7:02One industry we talked about a lot of, you know, financial corporate winners, and that's because the Trump administration is expect to roll back regulations. But one one industry that is expected to sort of lose a lot of funding and not do well at all is clean energy. Remember, the Biden administration did this massive inflation reduction act, which spurred 450 billion dollars in private investment that flowed into the U.S. energy sector since it was passed in 2022. Well, Trump wants to terminate the Inflation Reduction Act. He's going to stop offshore wind projects. He's pledged on day one if reelected.

7:37Those offshore wind projects are very susceptible to who is president because they have to give out permits. And Trump has just said that, you know, Trump has not, does not believe in climate change, that it's a big issue at all. So renewable energy, clean energy, definitely a big loser as a result of this election. And then conversely, a Trump presidency could boost things like industrial manufacturers, fossil fuel companies as well, because if those investments flow out of green energy, they will probably flow into supporting things like the fossil fuel industry. One other big winner from last night was prediction markets.

8:13This election was a massive win for the prediction markets, things that allow you to bet on presidential election on sites like Kalshi, Pauly Market predicted. While polls going into the election definitely showed this essentially a toss-up, the race was essentially a toss-up, prediction markets all were kind of giving some hints that there was more of a delta between Trump and Harris than maybe the polls were showing. And they seemed just to be a little bit ahead of the curve all night. As votes started to come in around 7, 8, 9 p.m., you could see a huge jump in Trump's odds on things like Kalshi, on things like Pauly Market.

8:47And people started of gravitating towards those sites rather than the traditional media outlets like the New York Times needle that we spoke about to see kind of what the general direction of the election was heading. And it looked like they were consistently ahead of the curve. So we talked about would they be accurate or would the polls be more accurate? It looks like prediction markets came out on top. They did. I mean, I was I was using those as an indicator. I was refreshing Kalshi and Polly market because I didn't know whether they were going to be accurate or not, because they were clearly showing something different than what I had been seeing as I was just refreshing the results.

9:20I was also looking at DJT stock as a proxy. So we've got these whole new indicators coming in that are rivals to polls. And they would say that we're not, you know, we don't rival polls. We show a different thing. But they've been a huge factor, or at least they played a big role in this election in people investing and betting on the results in a way that they have not before billions had been spent on this. So you have to expect this going forward. Meanwhile, the presidential election wasn't the only thing that was decided yesterday. Remember, we were talking about the control of Congress, the Senate and the House, and those would determine whether the new president would be able to implement their policies.

10:01Well, currently as it stands, the Democrats control the Senate, the Republicans control the House, but that, at least one of the chambers is going to be flipped because the Republicans did take back the House. They won a bunch of seats, including in key states, Ohio and West Virginia. And that, Matt, we don't know what's going to happen with the House yet. There are dozens of races still out there, still close, too close to call. But we know now that Trump is the president of Republican and the Republicans do control the Senate. And that has major implications for things like taxes. Yeah, probably the first thing that will likely move pretty quickly under a Republican controlled Senate and presidential seat is that they will move fast to extend those tax cuts.

10:44Remember, 2017 tax cuts were set to expire at the end of next year, but they'll probably move very quickly to get those approved. And then another thing, too, is potentially rolling back the IRA, some of that green energy investment that we spoke about, putting more of that promotion and energy into fossil fuel. So those are probably the first two things that you'll see a Republican Senate and Republican president try to move on is taxes and energy. And we'll see if there's any movement in the House race, which we'll update you on. I also want to circle back to some of the other ballot measures that we had talked about across various states, things like medical marijuana and abortion.

11:18So Florida, which was a very expensive race regarding legalizing recreational marijuana that pitted Governor Ron DeSantis and the billionaire Ken Griffin against this cannabis company that poured$145 million out spending the other side 9 to 1. Well, Florida voters rejected the measure, so it will not become the 25th state to legalize recreational marijuana. So that is a setback for the cannabis industry, but a big win for Ken Griffin, who just seems to be winning all over the place right now, and Governor Ron DeSantis. Ten states were also voting on measures that would protect abortion rights.

11:57As of early this morning, six passed, and Florida, South Dakotas, and Nebraska, at least, were projected to fail. So that's a little bit of a breakdown from the president on down in what was a historic day in the United States. Up next, some stores are letting shoppers unlock display cases with their phones. I'm Christian McCaffrey, pro running back, and Abercrombie is an official fashion partner of the NFL. I'm not kidding when I say NFL by Abercrombie broke the internet last year, and I think this season's lineup is even cooler. And so does my wife, who keeps stealing all my hoodies. Stay fit for the season and Abercrombie's newest arrivals.

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13:12Okay, moving on from the election, retailers might be backtracking on those annoying cases they lock deodorant in to prevent theft, kind of. According to a report by Bloomberg, Walmart is experimenting with new technology at hundreds of stores that would let people open security locks themselves using their cell phones. It's only being tested by employees for now, but the unlocking feature could be extended to Walmart plus loyalty members in the future, Bloomberg said. To combat increased theft in recent years, retailers have locked up everyday products like toiletries and cleaning supplies and required customers to summon workers to open the cases for them.

13:49But turning a convenience store into a New Jersey gas station has been backfiring. Chains like Walgreens and CVS are losing business to Amazon and frustrating both customers and employees with all the extra work. So they're looking for fixes that keep those anti-theft measures in place without compromising sales. Enter the self-service unlock, and Walmart is not the only retailer trying this out. Yeah, CVS is also piloting a similar program in New York City. One of our Morning Brew employees, a retail brew writer, actually went down to go test out the system, see it in action, and he liked it a lot.

14:24He said that there were signs on the cases that they could be unlocked using the CVS app. if you had Bluetooth and location services on. And you just go to the apps menu, you click unlock product, your phone does it for you, it unlocks a case. And he went around the store asking some of the employees how they liked it. They said, way better. We don't have to get summoned at your every back-end call. This is a huge pain point for a lot of customers. I mean, if you have shopped in a CVS recently or a Walmart recently, you know the headache of going to, you're like, I just want some toothbrush. I just want some deodorant.

14:57And yet you have to press a button, get an employee to come over and unlock it. So it was only a matter of time before these stores started either rolling back those anti-theft measures or finding a different way to a different system to make it less annoying. So I think that this is good on both the shopper side and the store side. Right. And just to put some numbers on how big of a headache this is, according to a survey from Consumer World, upon discovering a product that they want to purchase is locked, fewer than one in three shoppers summon an employee to unlock the case. So two thirds of customers are just getting lost right there.

15:33More than half decide that instead of seeking a similar unlocked product, they'll just go to try to find it in another store. And then it also takes, if you do, if you are the one third of people who do summon an employee, it does take 1.5 minutes on average for customers to retrieve a product behind a locked case. So that is time that you just don't want to spend when you go into something called a convenience store. So this is just all of the reasons that this policy, whatever had been going on for the last three years to prevent theft or other things like that, is not working. And retailers are leaning into new technology that could end up benefiting them, actually.

16:13Right. On the shopper side, boom, way quicker to unlock without waiting. But on the store side, oh boy, do you get a treasure trove of data because now you know what kind of products that I shop for, where I shop, who I am because you have to sign into the app. That can all get fed into these algorithms that maybe push better deals to you within the app. And since it's so much more convenient, I think a lot of people are going to be 100 % okay with that tradeoff. They know that they are probably feeding over more data to these companies than they previously did, but anything to prevent the old scenario of waiting for an employee to come by and unlock it.

16:48So I think the real beneficiaries here aren't just consumers, but retailers, especially when you throw in those sales numbers, too, that you typically lose 15 % to 25 % of their sales if you have to wait for one of these cases to be unlocked. So huge boom time for retailers and also maybe a reduction of headaches for shoppers. One solution we hadn't talked about is just removing the cases. I know. Yeah, I think it's because they put so many of them in that now they can't take them out. So they really backed themselves into a corner. But I actually think that this new unlocking system will lead to a better business outcome for them because of the data that they get.

17:21So I think they found their way out of it if this program. It is still a small pilot program that is being used by CVS and some other retailers like Kroger. Let's move on. Feeling good and living longer is now a$6.3 trillion business, according to a new report from the Global Wellness Institute. That means that the wellness industry is now 25 % larger than it was in 2019. And it also means it has surpassed the pharmaceutical and sports industries in terms of size. The authors of the report pointed out that the focus on health and well-being as we exited the pandemic helped supercharge growth, as well as things like an aging population and an increased focus on mental health.

18:00But this report also applied a very broad definition to wellness, stuffing 11 sectors worth of economic activity into that$6.3 trillion number, tracking spending on everything from tourism and real estate to actual public health initiatives. A similar report from McKinsey assigned just a$1.8 trillion value to the industry, which is giving some people some pause. But still, Neil, this is a big number. Indirectionally, it speaks to a wider truth that we are more focused on our health and well-being. Or it reveals that every industry wants to pass off what they are doing as wellness. Directionally, I think that's the way to look at it.

18:35Because you can raise your eyebrows, as I did, at this number. And all of the things that they're including in the wellness industry, they define it as the active pursuit of activities, choices, and lifestyles that lead to a state of holistic health. which in and of itself is a very holistic definition of wellness. So I'm not paying attention so much to that$6.3 trillion number, but I am paying attention to this number that is 25 % larger than it was in 2019. And so what you say about this is the way things are going directionally, I think that's correct. So you can put whatever big number you want on it, but when you see something like 25 % growth, which I think anecdotally I think we're all feeling with, whether it's the rise of fitness trackers, everyone is buying one, or the growth of spas and health amenities on your vacation, I think there's no doubt that this industry is absolutely booming.

19:28Yeah, just off the top of my head, I mean, you have this huge explosion in GLP-1 drugs like Ozempic, Wigovi. You have this big explosion in wearables like Oura Ring, Apple Watch that gives you real-time health data. Biomonitoring companies like Levels, which does real-time glucose monitoring, are big now. In-person fitness is big once more. We see that in surging gym revenues and memberships. Even Peloton is seeing an upswing recently as they kind of come back from the dead. Sleep is a huge industry as well. I mean, think about all the smart mattresses companies. Eight Sleep is one that comes to mind.

20:00People have sleep stacks these days. So it is big. We are definitely seeing a huge upswing, whether it's$6 trillion big or if it's$1 trillion big. It is big. It is big. And I think a lot of people are also worried about scams in this industry and fads. And you're starting to see that with changing purchase decisions. So in that McKinsey study of wellness, they surveyed consumers and they began to see a shift away. When they're buying wellness products, consumers are shifting away from clean and natural ingredients and shifting toward those with clinically proven ingredients. They want to see that the science backs up what they're buying.

20:39and they don't seem to care less that it's quote unquote clean and they want to know more that a scientist has approved it. Roughly half of UK and US consumers surveyed by McKinsey reported that clinical effectiveness was a top purchasing factor. And then finally, just going back to that Global Wellness Institute survey, the sector that they said contributed most of the overall number was personal care and beauty at$1.21 trillion. So truly that mani-pedi, that facial that you get is a wellness activity. So whenever you're feeling bad for maybe going and getting your nails done or going getting a pedicure, I mean, I don't know why you'd feel bad about doing that.

21:16Just know that you are contributing to the wellness industry and your own wellness as well. Okay, let's sprint to the finish with some final headlines. Palantir wasn't feeling any anxiety during election day. After reporting blowout earnings, the AI data analytics company stock popped 23 % to reach an all-time high, and it's now worth$114 billion. After the report, CEO Alex Karp was feeling as bombastic as Chad Ochocinco. He said, and I quote,

21:55He talks a big game, but hey, they absolutely backed it up. They're one of the companies that can offer solid proof that they're making money on generative AI. I mean, U.S. revenue grew 44 % year over year. So of course you had Alex Karp taking this victory lap. He said at the beginning of the earnings call, given how strong our results are, I almost feel like we should all just go home and not even do the earnings call. So he has definitely been criticized in the past. He's definitely a little bit of a wonky character in the Silicon Valley kind of archetype, but he has met every ounce of skepticism with an even bigger kind of return on becoming just one of the most important AI companies right now.

22:33So Palantir is definitely a name to think about when you're thinking about the AI race in general. DIYers everywhere are pouring one out for Bernie Marcus this week after the co-founder of Home Depot passed away at the age of 95. He is credited with transforming the home improvement landscape by pioneering a model of buying products directly from manufacturers, cutting out the middlemen and warehouses in the process. The resulting low prices and warehouse feel turned Home Depot into a customer hit and spawned an empire stretching 2 ,300 stores that Marcus oversaw as the company's first CEO for 19 years.

23:10Fascinating backstory here. So he co-founded Home Depot with Arthur Blank, who is now the owner of the Atlanta Falcons. They were working together at a hardware business in the 1970s called Handy Dan Hope Improvement Centers, which I think is a great name. They got fired from that business for sketchy reasons, according to them. And so they decided to start Home Depot. And now it has 2 ,300 stores across North America and more than$100 billion,$150 billion in annual revenue. It is the largest home improvement chain in the entire world. And Marcus was also a philanthropist. He donated a lot to right-wing causes.