Online Retail Rakes in Nearly $10B & 3-Year Cruise Called Off Abruptly

0:01Lowe's knows how to get you ready for holiday hosting with up to 35 % off select home decor and get up to 35 % off select major appliances plus members get free delivery delivery delivery delivery basic installation, parts, and a two-year Lowe's protection plan when you spend$2 ,500 or more on select LG major appliances. Valid through 10-1. Member offer excludes Massachusetts, Maryland, Wisconsin, New Jersey, and Florida. Installed by independent contractors. Exclusions apply. See Lowe's.com for more details. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, looks like Americans aren't a bunch of procrastinators because you all spent a record amount on gifts on Black Friday.

0:41Then a three-year cruise around the world was canceled at the last minute, and it ain't because someone forgot the limbo bar. It's Monday, November 27th, and our 200th episode. Let's ride.

0:57All right, Neil, everyone listening is coming back from a long Thanksgiving break, as are we, and I want to hear about yours. Give me one rose and one thorn from your time at home. Okay, one rose was I when I was home, I had to go through a bunch of old papers that had been under my bed for years. And it was just such a nostalgia trip going through old high school newspaper clippings in my old college application essays. And apparently I was very concerned with weaning the US off of foreign oil. That was a main theme in some of my college application essays, which was bizarre. But I took a bunch of screenshots from all of our old newspaper clippings and send it around to old friends.

1:37which was just a great little trip down memory lane. My thorn was losing hundreds of dollars in 30 minutes at the casino. Oh no, it was such a pure and wholesome break until that last part. Also, we had very different college essays. I can tell you that right now. My rose is, I cooked a turkey this year and I figured out three secrets. One, wet brine, definitely the way to go, imparts so much flavor. Two, basing every 30 to 45 minutes gets that perfect crispy skin. you're looking for. And then three, take it out before 165 internal. That just dries it way out if you stick to that. And then my thorn is my flight back last night had an emergency landing in Baltimore.

2:19And I didn't even notice it until my mom called me and said, hey, what happened? I've been tracking your flight. Why are you in Baltimore? I was so locked in preparing for the show. I didn't even realize it. So still a wonderful Thanksgiving break and very relaxing as well. Nice. All right, Neil, speaking of Thanksgiving break, let's hear about someone we at Morning Brew Daily are thankful for, Brex. To any new business owners or budding entrepreneurs out there, I hope your parents stop asking what it is you actually do this Thanksgiving. Instead, I hope they asked you, have you been listening to Morning Brew Daily?

2:50They talk about a sweet AI-powered spend platform, Brex, every day. Trust me, it's a much better question to hear, second only to, can you pass the stuffing? Stuffing is my favorite too. See, this is why we get along. If you're a business owner or a stuffing lover, head to Brex.com to check it out today. Does it ever feel like you're a marketing professional just speaking into the void? But with LinkedIn ads, you can know you're reaching the right decision makers, a network of 130 million of them, in fact. You can even target buyers by job title, industry, company, seniority, skills, and did I say job title?

3:25See how you can avoid the void and reach the right buyers with LinkedIn ads. Spend$250 on your first campaign and get a free$250 credit for the next one. Get started at linkedin.com slash campaign. Terms and conditions apply. So typically on Mondays, we do one segment on the winners of the weekend. But since we've been gone since last Wednesday and there's so much to cover, we're going to expand that format across the entire show and bring you our winners and losers from the long weekend. We always start with the good news first. So let's whip through our winners. I won the pre-show aerial dogfight.

3:58so I get to go first. And my first winner is Black Friday. We heard from many retail analysts that Black Friday wasn't a thing anymore, that Americans were spreading out their gift buying across the holiday calendar and weren't loading up on the day after Thanksgiving in particular. Well, I'm here to tell you that Black Friday is still very much a thing. But instead of camping out in the Walmart parking lot at 2 a.m., people are just online shopping. Taking advantage of deep discounts, Americans spent$9.8 billion online on Black Friday. That's a new record and a meaty 7.5 % jump from last year.

4:34They also hit the mall too. Foot traffic at U.S. retailers rose 2.1 % from last year. The takeaways, I've got three. First, Americans have become savvy shoppers and are taking advantage of when discounts are at their most generous, which they were on Black Friday. Some stores were offering up to 35 % off the retail price for popular gift items like electronics. It's also a good sign for the all-important holiday shopping season. The winter quarter wasn't expected to be a home run, with Americans having all but depleted their pandemic savings. But we simply continue to just spend while creating an indentation in our couches.

5:09And finally, do not count out Black Friday as some did. Americans have not met a made-up shopping holiday they didn't love. My winner, within your winner particularly, is actually mobile buying. so 54 percent of buying on black friday was done on a mobile device and that method is actually expected to overtake desktop spending which is kind of wild um for the first time ever this holiday season and i think that shows that impulse buying may have been a big factor in in black friday this year because usually when you're buying on your phone you're scrolling something and then you you click into the the website and then all of a sudden you got a package coming your way.

5:48I actually did this on Black Friday. We were talking about a book that I really wanted, and I was like, I don't really want to buy the full hardcover book. I'm going to buy a Kindle instead and get it on Kindle. So I got a Kindle coming my way, and so I'm one of the impulse buyers. Another winner within our winner, I think, is Buy Now, Pay Later, which are these methods that allow you to pay in installments. And Adobe said that orders via Buy Now, Pay Later were up 72 % from last year across the entire week. And that accounted for$79 million of Black Friday spend. So buy now, pay later, people are still using it.

6:30There was this trough of disillusionment in the post-COVID economy when interest rates were soaring. But Klarna, one of the leaders in the space, recently posted its first profit in four years. So it seems like buy now, pay later, despite all the misgivings, despite the regulatory crackdown, this method of payment is still becoming super popular and is only it showed its resilience this holiday shopping season yeah and then looking ahead cyber monday is going to be huge as well people are forecasting 12 billion in sales which is even bigger than the the black friday sale itself so we got some more spending ahead of us that's for sure did you buy anything besides the book that was the first one i should have done it on cyber monday but i bought the kindle on black friday so that was all i got i got a book as well and a rice cooker you can never have too many rice i guess one is enough but rice cooker I don't have one.

7:17Yeah, there you go. Okay, I'm sure a lot of you also flew over the weekend, but what if instead of being served peanuts and pretzels, you were served personalized ads during your flight? United Airlines is considering using the treasure trove of passenger info it has on you to help brands serve you ads based on your flying habits. These ads might pop up in the in-flight entertainment system while you're browsing the web on their Wi-Fi or within the app you use to check in. United execs have said that they're going to be careful to not creep people out with how specific the targeted ads are. But with the amount of data airlines have on us, it might be hard.

7:52Even though they are planning to give customers the option to opt out of having their data used, this is still a little bit freaky. So maybe this is a winner for United, but a loser for us, the passengers. This is a trend of companies that don't traditionally sell ads using their treasure trove of customer data to start selling very specific, hyper-targeted ads. I'm thinking Uber. I'm thinking Marriott. There are a bunch of other companies that have said, you know, we don't really sell ads, but that is a very highly profitable business. And we have so much data on customers. We should probably start to sell ads.

8:27I think Uber is probably the best corollary for United. It has beefed up its advertising presence recently. and its CEO said it expects it to become a$1 billion business by 2024. United is probably looking at what Uber did and said, look, we have similar passengers who are going to be in here longer than you are in an Uber ride, so we might as well start selling ads. Yeah, it's great for United. Listen to this scenario. Disney could hypothetically buy ad space to recommend a movie to a passenger that United knows vacations near their company's theme parks, or maybe they've redeemed miles to purchase something within Disney's merchandise.

9:04So once you start digging into exactly what this might mean, you do start to realize, wow, airlines do know a fair amount about us. They know what we're spending. And we can't go anywhere. Right. Yeah. You're locked in the cabin as well. So it is definitely part of a growing trend. Marriott's thinking about maybe selling those personalized ads on TVs within hotel rooms. So you start to open your mind to the data that they have, but also the points of interaction that these companies have with us. And it seems like a fruitful path forward. It is fruitful. They're going to have to be very careful about how they go about it because there could be a widespread backlash.

9:36People love complaining about whatever airlines do so much. So it's going to have to be a very tactful rollout. My next winner is U.S. oil production. At the top of the show, we busted narratives around Black Friday. And now I want to bust narratives around how much oil the U.S. makes because it might surprise you to learn that as of this month, the U.S. is now producing more crude than at any point in history. 13.2 million barrels per day, topping the pre-COVID peak of 13.1 million, according to figures from the Energy Information Administration. Critics have accused President Biden of strangling the oil industry with red tape, but his administration has actually overseen a surge in production.

10:16Just consider this. When Obama entered the White House, the U.S. only produced around 5 million barrels per day. And as recently as a decade ago, we were just producing around seven. So we've nearly doubled output in 10 years. To zoom out, the U.S. is by far the largest oil producer in the world, accounting for 21 % of global production compared to Saudi Arabia's 13%. And in recent years, we've become a net exporter of petroleum. So next time someone says the oil industry is dead or dying, you can politely correct them with these stats. Those two last stats actually did blow my mind. Largest oil producer by a long ways.

10:51It's not even close between us and Saudi Arabia. I never would have known that until I dug through these stats. Have you watched True Detective Season 1? I guess I have. If so, you've seen all the oil refineries. That is true. That's not what stood out to me about True Detective Season 1, but now that you mention it. Also, a Bloomberg reporter, Stephen Dennis, tweeted over the weekend that he estimates four years of oil production under Biden will exceed eight years of production under George W. Bush. So that's just another contextualizing stat that can put this in perspective. But this is consistent with kind of the mega mergers we've seen in this space from big oil companies.

11:24Remember, Chevron agreed to buy Hess in October to access those rich Guyana oil fields. And then Exxon bought Pioneer for access to the West Texas Permian Basin of oil fields. So once you zoom out and you see where the power is concentrating and why oil companies are being so, so aggressive for new oil fields, you start to see just why, because it's just so rich still and the U.S. is producing so much oil. I guess my high school self would have been proud. Yeah, exactly. You were way ahead of the curve on this, Neil. Okay, Neil, I would argue that no one had a better Thanksgiving than the University of Michigan college football team.

12:00This is the team that lost their head coach to a three-game suspension for getting wrapped up in this play call stealing scandal that saw a grad assistant sometimes in disguise stealing signs from opposing teams. It's both bizarre and wildly entertaining and was a big storyline as Michigan played their rivals Ohio State this weekend. And Michigan won, showing that this new era of cutthroat college football has entered a hyper-capitalistic end state where winning and the money that comes along with it are the only thing that matters. The incredible slate of college football on display this weekend shows why it's a sport that viewers just can't quit.

12:34College football viewing is up 10 % this year through Week 11, according to Fox, and 20 % from 2013, staving off the viewership decline that has affected every aspect of live TV that doesn't involve the gridiron. Neil, I'm not even really a college football fan, and I couldn't escape the gravity of the games this weekend. No, there was also Alabama beating Auburn on a crazy play. I have such fond memories of watching. That's called the Iron Bowl. The Saturday night of Thanksgiving, always just an epic game. And yeah, for all the talk of NFL beasting in terms of ratings and the popularity of pro football, college football is right up there.

13:10I also want to mention this is also probably the end of the Pac-12, as we know it, which is the West Coast Conference that has been basically gutted by the conference realignment. There's only going to be two teams left next year. So I don't know how that's going to work, but it's just going to be, I think, Washington State and Oregon State in the conference after all the other teams have absconded to other conferences in this huge realignment that's been happening that has the Big Ten and the SEC kind of over just these mega conferences over everything else. So it was kind of the end of an era for the Pac-12, which had been known as the Conference of Champions.

13:47But it's been I don't think it's going to exist next year. Yeah, I called it the hyper capitalistic end state of college football. I do think we're just seeing this concentration of power in the major conferences. And it shows Michigan winning yesterday shows that even if you're cheating, even if you're stealing call signs at the end of the day, if you win, no one ends up caring. Everyone ends up plotting you anyway. So I don't know if it's a good thing, but this is the state of college football that we're in, and people cannot tear their eyes away. All right, before any Buckeye or Auburn fans get too mad at us, we're going to take a quick break.

14:21Tonight on NBC, Jimmy Fallon and Bozema St. John host a 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 tonight on NBC.

14:53When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Not to bring the vibes down for everyone, but we got to talk about the losers of the weekend now. And this week we start with Elon Musk. A new New York Times report has put a number on what the advertiser exodus is costing X this year, and that number is$75 million.

15:38Big blue chip advertisers like Disney, Apple, and IBM have been pulling their spend off the platform after Elon Musk interacted with and endorsed an anti-Semitic tweet earlier this month. Internal documents viewed by the New York Times show that nearly 200 ad units that were supposed to run on Twitter have been halted or at risk of being halted. But X is fired back saying the documents the time saw were outdated and the real impact is less than that. And the actual figure would be closer to 11 million dollars. Whatever the exact figure, advertiser hesitancy is coming at a really bad time for X, considering the holidays are traditionally a time where brands splurge on platforms to promote their deals.

16:15Neil, is it panic time for Elon? I don't think maybe, but he's not going to admit it. That's for sure. One thing we didn't mention last week when we talked about this that I do want to mention around the advertiser exodus is that some of it had to do or a great deal had to do with this report that came from Media Matters, which is a media watchdog group that found that a bunch of these tech advertisers like IBM were running their ads next to neo-Nazi content. That has sparked a huge legal battle between X and Media Matters. X has sued for defamation against this organization. So that lawsuit dropped last week.

16:51and that litigation is ongoing. But as of now, 50 of the top advertisers that were on X in October 2022 when Elon Musk took over have gone. So I think this is a big deal considering that X typically, or X when Twitter, when it was Twitter, relied on advertising for upwards of 90 % of its revenue. Linda Iaccarino is the CEO who was brought on. She had great relationships with advertisers. She was trying to bring them back. that's been a slow trickle. It's ebbed and flowed with various reports and various Elon Musk shenanigans. So we'll see how it plays out. I think they're just at this lower stasis level.

17:31Like the equilibrium of the amount of advertisers that they have is just lower than before. Then again, they have lower expenses because they only have 2 ,000 staff as opposed to more than 8 ,000 originally. So we might just be looking at a Twitter or an X that is just significantly smaller than it once was. Yeah, I know that advertising revenue is definitely down under Elon. But the last time Twitter was a public company had brought in around$1.6 billion in revenue in the final quarter of 2021. So if you look at that$11 million or$75 million number, whatever you want to call it, maybe it's not as big of an impact as you see as a whole if you put it into context.

18:06But that being said, the relationship side of things, the things that Linda DiAcarina was supposed to bring, her relationship with these big advertisers, that is not good if you start kind of fraying those because there's a lot of different places that these big companies can spend their ad dollars. You got Instagram, you got Facebook, you got all these other places. So if Netflix decides, hey, we're not gonna spend our$3 million that we usually do on X, that becomes a problem long-term. So even though the specific number itself might not be that big, I do think it's a problem for the future going forward.

18:36The fundamental problem with advertising on X is that it's not a good ad product for advertisers. So they don't have a huge problem pulling their money and putting it somewhere else because I don't know if you've been on X or Twitter recently. You do not see ads that are relevant. It is not something that you are prone to click on compared to an Instagram ad, which may be much more relevant to you than something you see on X or Twitter. So I think they have to resolve that problem to create more stickiness in its advertisers. Before we move on to the next story, I also want to mention that Musk is trying to make amends with the Jewish community.

19:10He is meeting with Israeli President Isaac Herzog today on Monday. So to try to show that he's not I mean, he said he's not anti-Semitic. He denies all those accusations, but he's trying to take a big step in that regard today. Our next loser is stock market bears, because y 'all really should have gone into hibernation by now. November has been pretty epic for the stock market, even historic. The S &P 500 is up 8.7 % for the month, which would be one of the best Novembers on record. The index has gained more than 8 % in November, fewer than 10 times since 1928. And investors think this rally has legs.

19:49The QQQ Exchange Traded Fund, which tracks the tech-focused NASDAQ index, recorded its largest weekly inflow in history the week of November 13th. Toby, the S &P is up nearly 19 % so far in 2023. and all signs point to a so-called Santa Claus rally to close out the year. But we've been burned before. We have been burned before. I mean, you mentioned that it was historically, in context, one of the best Novembers ever. Just to even provide more detail around that, the S &P has gained more than 8 % in one month, fewer than 10 times ever since 1928. So we truly are in rarefied air here. I feel like it went under the radar, too.

20:28I know I've talked about this on this show, But we're talking about one of 10 times in history that it's gained over 8%. But to me, there's still some sort of malaise affecting American psyche. So it is one of these things where the stock market seems a little disconnected to how a lot of people are feeling. But dang, is it doing well. This is all about inflation and the Fed's interest rates. Because inflation has dropped to close to 2%, which is the Fed's target. The Fed has essentially signaled that its historic interest rate hikes that have brought interest rates to 22-year highs is all but over.

21:05It's done. It's squashed. It's not going to happen anymore. And investors are sort of reacting to that trend. And now the question is, when are they going to cut interest rates? Meanwhile, the VIX, which is known as the Wall Street's fear gauge, has fallen 41 % over the last four weeks, which is one of the biggest declines on record, too. So this is a bullish environment in the stock market right now. Yeah, the stock market may have had a dream November, but Disney's latest animated film, Wish, had a nightmare opening weekend. Usually family-oriented movies dominate the Thanksgiving weekend, but Disney's latest interest got meh reviews from critics and a meh reception for moviegoers.

21:44It wasn't that long ago that Disney had an absolute stranglehold on this particular weekend. Back in 2019, Frozen 2 brought in$125 million domestically over the five-day week of Thanksgiving. Wish didn't even crack$20 million for the three-day weekend. Even Napoleon, the two-plus-hour epic about the French emperor, came in ahead of it at the box office, continuing this theme of long, adult, geared films like Oppenheimer coming back into style. Neil, this is Disney's 100th year anniversary, and Wish was meant to be this self-referential homage to some of the magic it's created along the way. But instead, it's laid bare all of Disney's recent stumbles instead.

22:24The mouse is in a bit of a funk. Yes, it is. I mean, one thing I wouldn't count out Wish just yet, because I want to look at the example of Encanto, which came out. You just pointed at me, because you know that was a good point. Yeah, so Encanto came out, kind of bombed at the box office, but it's had a really long... Elemental. Elemental. Yeah, that was partially why I pointed as well. Elemental, not Encanto. But basically, that movie bombed at the box office, but had this really long tail on Disney Plus where a lot of families watched it afterwards. So we could see a bit of a renaissance for Wish on Disney Plus.

22:57But yes, it had a terrible showing. Disney used to dominate the Thanksgiving box office. I looked at the box office earnings across the entire year to see how we're doing. We're up 22 % so far this year compared to last year. So a little bit of an uptick. And I'm sure that was helped by Barbie and Super Smash Bros and all the Bob Barbenheimer hype. But it seems like the box office is still not fully recovered to pre-COVID levels. Right. It's not fully recovered, but Disney can't point at it saying, oh, we're not at pre-COVID levels because the box office is up in general. So this does clearly seem to be a Disney specific problem.

23:31But Bob Iger said that they're going to start focusing more on quality over quantity. We'll see if it plays out. I don't know. It does feel like some of the magic has been sat from these Disney movies. And I saw a lot of these reviews where the songs itself seem AI-generated. Like the villain was – people kept saying, this is the first Disney villain that uses hair product. We want the real Disney villains back. So it's definitely in a bit of a funk, but hopefully they kind of pull themselves out of it. Oof, I'm going to get flayed for messing up Elemental and Encanto. Okay, our final loser is everyone who bought tickets for a three-year cruise because it has been canceled.