Shein Limps to a $27B IPO & GTA 6 Extended Trailer Just Dropped

0:00Austin Rief:This episode is brought to you by Facebook. So you were scrolling on Marketplace and there it was, the bike you'd been searching for. You sent a message and it turned out the seller was super chatty, kind of funny, and an avid cyclist. The next thing you know, you're in a cycling crew. Well, a community cycling group. The thing about Facebook, you might find more than what you're looking for. From a browse to a bike ride, this summer, find more on Facebook. Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, why the eyes of the world are on Jackson, Wyoming.

0:37Alex Lieberman:Then the fast fashion giant Shein is limping towards an IPO. It's Friday, August 28th. Let's ride.

0:51Austin Rief:Just want to let you know, I will be out of pocket October 9th and 10th because the Tiramisu World Cup needs taste testers and I plan on throwing my hat in the ring. You should too. This week, the Tiramisu World Cup, which is a thing, announced they're recruiting 130 amateur taste testers or judges for the upcoming competition in Italy open to anyone in the world. However, they're not going to take just anyone with a sweet tooth. You need to know your stuff. Prospective jurors are being required to take an online test that asks 15 questions about the history and culture of Tiramisu, Treviso, the city hosting the event, and the competition itself.

1:28Austin Rief:But that test is not going live until September 12th, so plenty of time to study up.

1:33Alex Lieberman:They've been hosting this tiramisu World Cup since 2017, and over time, the founder of the event said that the public jury has provided a nice window into the shifting taste preferences over the last decade. Apparently, tasters are favoring lighter, less fatty recipes these days. I'm not sure what a fatty tiramisu actually would taste like, But it begs the question, Neil, are you a tiramisu guy?

1:59Austin Rief:It's fine. I don't think it's the best dessert, but if it's placed in front of me, I will eat it.

2:04Alex Lieberman:To me, it was kind of like tomatoes. Growing up, I thought tiramisu was the nastiest thing in the world. Same thing with tomatoes, but now I love it. So I feel like once your palate becomes more complex, maybe it's still coming for you, Neil. Then you start liking tiramisu. And now a word from our sponsor, American Express.

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2:59Austin Rief:Learn more at go.amex slash morningbrew and find out your welcome offer, which could be as high as 300 ,000 membership rewards points. That's go.amex slash morningbrew. Offer and benefit terms apply. Let's begin with a trip to Jackson Hole, Wyoming. And not just because Toby has promised to pick up the tab at Million Dollar Cowboy Bar. There at a lodge in the Grand Tetons, Fed Chair Kevin Warsh will give the most important economic speech of the year, a keynote address that will likely set the terms for his tenure as America's central bank chief. Historically, Fed chairs have used their speech at Jackson, home to the Fed's annual summit, to lay out how they view the economy from 30 ,000 feet.

3:40Austin Rief:Far from getting into the nitty gritty, they typically expound on broader theories or principles that guide their decision making. Warsh may not be afforded the opportunity to wax poetic. Just a few months in charge, he's already in a pressure cooker of threats both outside his control and by his own design. Inflation remains above target, yet in Warsh's most recent press conference, he failed to convince investors he was committed to bringing it down. Meanwhile, his strategy of saying a lot less than his predecessors has left Wall Street in the dark about future rate decisions. If all that wasn't hairy enough, Treasury Secretary Scott Besson's recent intervention to bring down bond yields puts him on a collision course with Warsh's approach to let markets take the lead.

4:18Austin Rief:In July, Warsh previewed what he might say this morning with his signature vagueness. If I could, in the high mountain air in Jackson, Wyoming, I'd like to frame the big questions, he said. What's really happening with productivity? What's really happening with demographics? What's really happening to the global economy amid the shocks? But the reality of the present predicament might prove too urgent. Warsh went on, haven't made a decision whether it's going to be a big picture speech or whether it's going to be more traditional setup for all the action we're going to have between September and December.

4:45Alex Lieberman:He really backed himself into a Jackson hole here because Joseph Broussales, who's the chief economist at RSM, told CNBC, we have the most unusual Jackson hole monetary symposium in recent memory on deck because of Warsh's unforced errors early in his tenure. The market has now bid this up to be something that I think the Federal Reserve would rather it not be. Because Kevin Warsh has not said anything, the fact that he has this speech coming up everyone is on pins and needles it actually goes back to the alan greenspan days which again warsh has cited alan greenspan as kind of the person that he wants to model his tenure at the fed after and alan greenspan famously was opaque where fed watchers would look at everything from his facial expressions to what he was wearing to how many papers were inside his briefcase just for some shred of information about what he thinks uh rates will do going forward.

5:36Alex Lieberman:Warsh is adopting that mold. So that is why so many eyeballs are on this specific Jackson Hole Symposium, because they just want some information out of them.

5:46Austin Rief:And when he does give information or when he does speak, markets don't really like it. Go back to July 29th, which was his second press conference as Fed chair after this meeting where he held rates steady. Markets hated it. We had long-term bond yields going way up. We had the Dow vomiting fell 1.6 % over 840 points. And you just watch the markets go as he was speaking. And it's just this downward spiral because basically he admitted and acknowledged that inflation was a problem. However, he didn't provide any justification for why the Fed didn't bring down rates at that particular meeting. Three Fed members voted in that particular meeting to raise interest rates, but Warsh said, we're not doing it.

6:29Austin Rief:And then didn't really explain why. Maybe he'll go into more of his theories on inflation and interest rates at this speech.

6:35Alex Lieberman:Yeah, the market really just wants a so-called reaction function. It's very frustrating right now that he won't show what the conditions that would make him or the Fed compelled to act. They just want to know, like, all right, it's fine if you don't want to give forward guidance. You've made that very clear that you think that the market has become too reliant on what the Fed says will happen going forward. You cannot tell us stuff, but we would love to know what is the tipping point, what specific data points or what conditions need to happen that would make you hike or not hike rates. And that is what the market is just desperately looking for right now.

7:11Alex Lieberman:Right now, what is the prognosis looking ahead? Is the Fed going to hike rates? And based off of kind of soft economic data over the past few months, markets are betting that the Fed won't raise rates at its September meeting going forward. Of course, that could completely change based off of what happens today in Jackson Hole.

7:30Austin Rief:Some fun lore about why this thing is in Jackson Hole, because this is like the Federal Reserve's annual symposium. Why is it being held in Wyoming in this resort town? Well, it goes back to the early 1980s. The Federal Reserve Bank of Kansas City wanted to hold this annual meeting, and they're not exactly high up necessarily on the pecking order in terms of Fed regions. They wanted to bring in Paul Volcker, the Fed chair at that moment. They want him to be the keynote speaker. They're like, what could we do to have him come and be the keynote speaker for us? Well, let's put it in a location with really good fly fishing.

8:06Austin Rief:But Paul Volcker loved fly fishing. So they're like, OK, let's go to Jackson Hole, Wyoming, near the Tetons, and then we'll get Paul Volcker. And then this will become a thing. And it proved great.

8:15Alex Lieberman:Let's move on. It's Stock of the Week, Dog of the Week time. this segment where we pick one stock that is embracing the dog days of summer and one stock that is already looking ahead to fall. I won the pre-show game of Canasta, so I'm up first, and my dog of the week is Sheen, whose rise and subsequent fall lasted about as long as one of their t-shirts. Sheen was the hottest thing in retail just a few years ago. In 2022, riding high on the fast fashion wave, it raised money at a$100 billion valuation. It's a model of using mountains of data to spot emerging fashion trends and quickly pump out new designs looked destined to succeed given their access to low-cost Chinese suppliers.

8:56Alex Lieberman:Xi 'an brags that it adds roughly 4 ,700 new items every day to its site and offers more than 2 million distinct clothing items overall. Revenue rose all the way to$42 billion last year, but since then, its business has hit a wall. This year, it's set to grow less than 1 % and has swung from making$3.4 billion in profit to operating at a loss. Its demise couldn't come at a worse time. Chien is set to go public this coming Monday on the Hong Kong Stock Exchange at a valuation of just$27 billion. Neil, what happened to this company? How did it go from being the unquestioned winner of ultra fast fashion to going public at a quarter of its peak valuation?

9:36Austin Rief:One of the reasons that Trump and US Congress kind of blew up their business model, they exploited this loophole called the de minimis exemption, which allows you to send packages into the United States that are under$800 in value without tariffs. So that was one reason why you would scroll on Sheen and be like, how is this so cheap? Well, the answer is that they didn't have to pay tariffs or taxes when sending it from these Chinese plants into the United States. But as part of the one big, beautiful bill act of July, 2025, Congress voted, it was part of the bigger tax package, but Congress voted to repeal the de minimis exemption and then phase it out entirely come July 1st, 2027.

10:16Alex Lieberman:And the other issue that hit Xi 'an's business is that everyone started to copy them. Remember PPD, which is the Chinese e-commerce company. You probably don't know them, but you do know Timu. It's essentially the same business, a very ultra cheap marketplace. So Timu launched in 2022. 2024, Amazon launched haul its own ultra cheap shopping offering. and then tiktok has kind of been the double-edged sword that sheen has uh faced because tiktok was one of the big reasons why uh it became so popular especially in the united states because people would do these sheen hauls and it was just so cheap but then tiktok looked at all the commerce that was going through their platform and said what if we just launched our own shop and tiktok shop has now overtaken sheen in the u.s when it comes to sales so those competition comes for everyone.

11:05Alex Lieberman:And when you're no longer the only fish in the ultra fast fashion pond, then you start to see kind of the slowing growth that we have seen out of Shein.

11:13Austin Rief:They're still huge. Their sales of $42 billion puts them among the world's top five apparel and footwear companies in terms of sales. They are not giving up. There's still a$27 billion company that's going public in Hong Kong on Mondays, but they are pivoting their strategy, which has been interesting to watch. Remember, they recently bought Everlane, which was this more sustainable forward American fashion brand. And what their strategy is now is they want to be what they call the Amazon web services of the fashion industry. And not, yeah, sure. Everyone wants to be that because that's a huge business, but they want to just kind of be the backend for everything.

11:51Austin Rief:They know they have all these, the sprawling web of contract manufacturers, they have the distribution. And so they want to put other labels and fashion brands more forward than their own brand. And they think that's the key to success moving forward.

12:03Alex Lieberman:It's just a tough story to tell right now because when you see revenue growth falling from 21 % to 8 % to 1%, is that really a business you want to invest in? That's the hill that they have to climb as they go public next week.

12:16Austin Rief:All right, let's talk about maybe a business you do want to invest in. My stock of the week is Revolution Medicines, which lived up to its name and just revolutionized treatment for pancreatic cancer. In a health milestone decades in the making, Wednesday, the FDA approved its new drug for treating the devastating cancer, which doctors say will be an absolute game changer for patients with one of the most grim medical diagnoses in the world. The drug, sold as RasenQ, helped subjects with advanced pancreatic cancer live nearly twice as long than if they just received chemotherapy. In a late-stage study, patients who underwent chemo, the standard of treatment currently, lived 6.7 months on average.

12:53Austin Rief:Those who received RasenQ lived over 13 months. When those results were revealed at a big cancer conference this spring, it reportedly drew a standing ovation nearly a minute long, and some in the audience even cried tears of happiness. About 67 ,000 people in the U.S. are diagnosed with pancreatic cancer each year, and the outlook is dire. About seven in eight die within five years of diagnosis. This new treatment gives them a literal new lease on life. And of course, it's been a huge tailwind for Revolution Medicines, which has had no approved products up until Wednesday. With investors salivating at the business potential, shares are up nearly 180 % this year.

13:33Austin Rief:I do want to talk about the scientific breakthrough that they were able to make. You love doing that.

13:36Alex Lieberman:It is. It's very interesting to me. So there has been this big effort to attack CRAS, which is this cancer-driving protein that a lot of people considered undruggable. The reason why it's undruggable is because it's a very smooth protein and you need some sort of surface imperfection to latch onto to treat or attack a protein like that. And CRAS drives nearly all of pancreatic cancers, a lot of lung cancers, a lot of colon cancer, some other tumor types. So it's always been kind of the white whale for a lot of these oncologists. The fact that they were able to do this comes down to molecular glues, actually.

14:15Alex Lieberman:There are certain compounds out in nature that do find a way to attack float flat proteins. They never found one that actually worked on crass, but they're like, what if we just made our own? So there's a synthetic molecular glue now that allows them to attack this protein, which is why this breakthrough happened. And again, the possibilities are endless now. They still think that right now it's a one-two punch. You still will probably need some chemo and this drug. But eventually going forward, they're like, maybe this is the primary treatment. You don't have to go through chemo, which is why everyone is so excited.

14:46Austin Rief:And it's expected to be one of the fastest drug launches ever. Let's talk dollars and cents. This drug has a sticker price of nearly$40 ,000 a month or about$478 ,000 when you take it for a full year. You're not going to actually pay that. The insurance is going to cover most of that and there's going to be varying out-of-pocket costs for patients. But for Revolution Medicines, it's expected to generate more than$9 billion in sales by 2032. It was also made known for a lot of people by the fact that it's taken by the former U.S. Senator Ben Sasse, who has gone on tons of podcasts and talking about his sort of end of life journey.

15:30Austin Rief:And he is on this particular medication. And so a lot of people learned about it that way. So he he also showed some of the side effects because there are side effects, including gastro issues and rashes that break out. If you look at him, he has these rashes all over his face. So there are side effects. But on net, this is a incredible breakthrough that doctors are saying, like they're weeping, literally saying we've been working at this for decades. Now it's finally here.

15:55Alex Lieberman:All right, we're going to take a quick break and come back with a story about international travel right after this. Every day, shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard too. Vanguard Investor Choice makes it easy to set your proxy voting preference for your eligible Vanguard index funds. In just a few clicks, you can have a say on important shareholder topics like executive pay and director elections. Visit Vanguard.com slash investor choice to learn more. It's your shares. It's your voice. It's easy. Vanguard investors own shares of their index funds and those funds own shares of the companies they invest in.

16:32Alex Lieberman:Vanguard Marketing Corporation Distributor.

16:35Austin Rief:Do you ever get stuck when you're writing or researching for the show?