SpaceX attempts history, Schwab's $41B deposit loss, Netflix's live fail

0:00Stocks? ETFs? Or what about mutual funds? Choosing your investments is easier with Fidelity. Our step-by-step experience can help you pick out the right investments for you. Plus, with recurring investments, you can decide how much and how often to invest. Lastly, there's 24-7 help if and when you need it. To find your next investment, head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSC SIPC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. We've got a big show today on this Monday. SpaceX was planning to launch its Starship rocket on its first orbital trip this morning.

0:40Whether it happens or not, we'll explain why Starship is the reason you will be living on Mars in 20 years. And I never thought I'd say these words out loud, but we are going to talk about the love is blind debacle on Netflix last night. Then we'll tell you why Charles Schwab's bet on zero fee trading is potentially biting them in the arse, and introduce you to the hottest new Drake song with a surprising twist. Neil, it's Monday, April 17th. Let's ride.

1:20All right, Toby, I've got a little butterflies going on in my stomach because as we speak at a little after 9 a.m., Eastern SpaceX was preparing for the first orbital launch of its Starship rocket from southern Texas. While rocket launches have seemed commonplace in the past few years, this one is different. Elon Musk has billed Starship as the key for visits to the moon, Mars, and to make humans a multi-planetary species because it's so dang big and powerful. So no matter what happens with this launch, and it looks like it is not happening, which is a little sad, but shows you just how hard space is.

1:58Still, this is worth talking about. It's a historic launch. Even before the day, the launch, Musk pegged the chances of Starship reaching orbit at 50%. He said, I'm not saying it will get to orbit, but I'm guaranteeing excitement. It won't be boring. Was it boring? I know. It seems a little boring because they did end up scrubbing it. It looks like because a valve wouldn't open. But yeah, you're totally right. It shows how complicated space is. Honestly, Musk loves playing up the interplanetary aspect of this. And I feel like it's something that investors in SpaceX kind of just go like, yeah, okay, buddy, like whatever you want to say.

2:34I truly think that the biggest deal of this launch is the business side of things because SpaceX's satellite launch business is kind of their moneymaker. It made a billion dollars last year. Their Starlink satellites are the thing. It's already profitable. It's actually the only division that's profitable within SpaceX. And Starship's a big deal for that because you can now launch more satellites and heavier satellites. And so that, even though we're talking about going to Mars and we're talking about interplanetary species, I truly think it's the moneymaker. It brings home the bacon for SpaceX.

3:11And that's why it's kind of a big deal. Yeah, you're right. You're more of a romantic. I'm the engineer. I'm not an engineer at all. But just looking at the specs of this thing, it is really freaking huge. This launch was supposed to be the first time it was stacked on top of its super heavy booster. So combined, the entire thing is by far the tallest rocket ever not launched. It's going to be 394 feet tall. So it's this towering figure that's above the Statue of Liberty. 33 Raptor. It has 33 engines, which is unheard of. You were talking about the Russians tried this and it did not work. Yeah, during the space race, the Soviet Union tried to build this rocket called the N1 that had 30 engines in it.

3:54And they tried four times. it exploded every single time and then they just gave up to put into context the rocket the saturn five rocket that the americans use five engines right so elon for some reason he's going back to the soviet era and say we just need more engines because this thing is heavy this thing is heavy because it is made of stainless steel and most other space ventures use composite components but elon just went straight up stainless steel yeah he says it's a great material because it withstands the re-entry temperature. It's a little heavier, but they're like, we can just make up for it with more boosters.

4:30It's an interesting choice. Another thing that is a little unique about this particular rocket is that it's fueled by methane and not hydrogen. And people speculate that the reason that they're using methane is because there are trace amounts of methane on Mars, and it could refuel in space. Yeah. Again, it's always the Mars angle, but NASA is going to use this rocket they're sending it uh to the moon for their artemis missions again another big revenue driver for for spacex is these nasa contracts it's and so like even though elon's looking at it and it's saying the future of humanity rests on this nasa is probably looking at it very closely and going like sure you got to figure this stuff out because you're we're sending people to the moon in in less than a decade so they the contract i think was worth 2.9 billion dollars with a bunch more kind of tacked on after that and what's going to happen is starship is going to be orbiting the moon and nasa's rocket the nasa's vehicle is going to link up with starship and starship will take people from you know the outer reaches of the moon down onto the moon as the lunar lander so this is a very you know versatile space vehicle yeah for sure it's such a bummer it didn't launch honestly it's a bummer like we wanted we really wanted to hype it up it still is a big deal it's still a huge deal hopefully they figure it out one final thing i wanted to mention about starship is that the key point is that it is reusable yeah which shaves tens of millions of dollars off of every launch cost so you can lift i think a hundred i'm not going to get it right but you can do a massive launch with a very large payload that's now under 10 million dollars because you can cheap very cheap because these things land back on the landing pad so you can reuse them and if they just kind of blow up in the atmosphere or they crash down into the water, then it renders them unusable for the next time.

6:21Yeah. It's an incredible piece of machinery that eventually we'll see making it off the ground. Okay, Neil, let's return from space a little bit and dive into an equally exciting story about zero fee trading in Charles Schwab. Okay. The story actually starts back in 2019 when Charles Schwab shocked the world by offering zero fee trading. The idea was that their bank would actually drive the majority of their profits and that they could kind of write off the brokerage as kind of like this loss leader customer acquisition tool. For a while, it looked like a great decision. The pandemic hit, interest rates hovered at near historic lows, and Schwab raked in billions of dollars from their banking business.

6:59But last month's collapse of Silicon Valley Bank has kind of turned everything on its head. So after a flurry of rate hikes, Schwab's balance sheet got a little dicey, deposits from customers sank a little bit, while unrealized losses from these long-term treasury bonds and mortgage-backed securities piled up. The stock is down 33 % in March alone. It's had its worth months ever since 1987. And basically all eyes turned to earnings, which happened this morning, because people were really curious to see how did deposits fare? Because if deposits kind of really dropped too much, then we could see a similar situation to Silicon Valley Bank.

7:34So we got earnings this morning. They were mixed. Total revenue was up 10 % year over year, But those deposits that I mentioned were down 11 % from the previous quarter and 30 % from over a year ago. So it's not great, but it's not the catastrophic, like, world-ending thing that would cause Charles Schwab to, like, really be in a tough spot. It's crazy that Schwab got caught up in this mess. It's a massive financial giant. It has$7 trillion in assets, 35 million accounts. And so the fact that it got swept up with a lot of the SVB stuff, whereas a lot of other bigger financial institutions didn't.

8:11It's mostly just because they are doing the same thing that everyone was doing the same thing. They were parking their money in these long-term bonds. And even no matter what size you are, you're still susceptible to the same rate hikes that Silicon Valley Bank did. So people are focusing on honestly just two words with Schwab and it kind of shows what's going on in the broader financial world. And this is cash sorting. And basically now that the Fed has risen, has increased interest rates, people are shuffling around their money from low paying bank accounts to take advantage of higher yields in products like money market funds or CDs that are paying, you know, four to five percent.

8:50And that's happening at Schwab. So Schwab used to be paying just 0.5 percent on customer deposits. Now it's shelling out over 4 % in some cases. Yeah, we've talked about this before. We did, I think back on Friday. Right, it's definitely becoming a theme here that these banks can't get away with just giving you 0.1 % on your money. You're gonna move your money to a higher yielding account. Exactly, and just to finally touch on, we talked about Charles Schwab's getting rid of brokerage fees on trading, and that was a big deal in 2019. Everyone else followed suit, like everyone fell in line. Yeah, but I think you're missing a key point.

9:25what happened two years before. The Robinhood. Robinhood. They didn't do it on their own. Robinhood came on the scene and offered no-fee trading, and then it forced all of the legacy brokerages to do the same thing. To get on board with it. Yeah. And just to give a context on how big of a business that was, in 2018, before it got rid of the fees, it brought in$763 million in revenue from that, which was right around 7.5 % of its total revenue. So it wasn't this massive, massive revenue driver, but they're probably looking back and thinking, Well, it would be nice to have a little money coming in from that.

9:58Yeah, I'm not sure how Robin – I mean, I don't think Robinhood has been doing well. And it doesn't have that bank aspect. Right, exactly. It just offers no fee. It literally is just – I know it's tried to whip out new products, kind of like trying to become a bank. I know it has like a high-yield savings account now. It's definitely like the disruptor did its disrupting, and now they're trying to live in the post-disrupted environment. I'm looking up Robinhood stock right now. It's not good. Not doing well. There's going to be a lot of red, I think. All right. While you do that, we're going to jump on to our next story, Neil.

10:30We have a good old-fashioned love triangle going on in the search engine world. So Google and Samsung have kind of been the best of friends, the best of lovers over the last few years. Anyone who's purchased a Samsung device in the last decade has opened the Internet to search for something and been greeted by Google. But now Samsung has a bit of a wandering eye. They've been texting Microsoft on the side to see if they want to have a little fling with Bing. That's because Bing has had a massive glow up recently. They do not look the same as they did in high school. They're kind of sexy now. And it all comes down to the addition of AI.

11:05So now Samsung's looking at Google and saying, why don't you look like them? Why can't you do what they do? And Google's very hurt by this. They're shocked that Samsung is even talking to Microsoft because Samsung phones have run on Google's Android operating system since they've come out. They were literally built for each other, but now Samsung is kind of like willing to risk it all to get a taste of that sweet AI-powered search. Neil, Google's freaking out about that a little bit. That was an inspired intro. I've got to say nine out of 10. Thank you. Google is freaking out. I know they had this red alarm back when ChatGPT just launched, and their search engine is$162 billion business.

11:45This is their lifeblood. If Bing or any other chatbots come and eat it away, they're kind of sunk yeah so you can tell that they're scrambling to work on solutions and the new york times reported last night that they have this working group called project magi i'm not sure how they made that name i love the project name it's it's two it's a project that has two goals one is to add ai tweaks to its current search engine and eventually they plan on revamping it completely and launching a completely new search engine if if it's got a project title you know it's a big deal. They only have 160 people working on it, 140 people working on it.

12:22It should be more, right? I know. Yeah. Then again, I think OpenAI does not have that many people either. So I guess these things aren't really labor intensive. Smaller is nimbler, I guess. We also have an interview from Google CEO Sundar Pichai, who went on 60 Minutes last night and basically cautioned against the all-out AI race that's going on right now. I think one of the things we need to be careful when it comes to AI is avoid what I would call race conditions, where people working on it across companies, etc., so get caught up in who's first that we lose the potential pitfalls and downsides to it.

13:02the first thing i think of when i hear him saying that is that sounds like someone who's losing the ai race would say because someone in second place would say we need to slow down like we don't know how this race is going to pan out like it doesn't matter who's first we just need to make sure it's right so google has released a chatbot called bard and people were not exactly impressed with it so that adds to the pressure that their big first launch in the space was kind of subpar Right. My theory on this is that AI chatbots kind of have these almost personalities at this point where people are going to start gravitating towards the ones that they think has the best voice or a voice that they empathize with.

13:41So it's almost like Bard they didn't connect with. They didn't vibe with on the same level as they were with open AI. Because maybe it wasn't as smart. And, you know, when you're just talking to someone who's not spitting facts or just not as smart as you want them to be, you just kind of get less interested. True that. It's all about relationships. My takeaway here is that web search is going to be completely different two years from now. It'll be what we're doing right now where we query Google and get a list of results of links, half of which are ads. That is going to be rotary phone level antique.

14:15All right. You heard it here first. I mean, that's not – No, I agree with you. It will be different. It is crazy to think about now that Google is certainly revamping its search engine and is going to roll out a new one. The way we search the internet for the past 25 years is going to be bust. All right, Neil. Great first half of the show. Before we jump into the next half, we're going to take a quick break. Toast the holidays in a new way and raise a glass of rum chata, a delicious creamy blend of horchata with rum. Enjoy it over ice or in your coffee. Rum chata, your holiday cocktails just got sweeter.

14:52Tap or click the banner for more. Drink responsibly. Caribbean rum with real dairy cream, natural and artificial flavors. Alcohol 13.75 % by volume, 27.5 proof. Copyright 2025 Agave Loco Brands, Powaukee, Wisconsin. All rights reserved.

15:09This message may be shocking to many millennials. If you are one, you might want to sit down. Right now, loads of people are searching the following on Depop. Low-rise jeans. Halter top. Velour track suit. Puka shell necklace. Disc built. You likely placed these in the dark of your closet in 2004, never to be seen again. But if you can find it in yourself to dust them off, there are a lot of people who will give you money for them. Sell on Depop, where taste recognizes taste. Alright, so last night I'm sitting in my jammies, have my sleepy time tea, getting ready to watch Succession, open Twitter for some reason, and all of a sudden it starts blowing up with people who are angry at Netflix.

15:53I had no idea what was going on. Why are people angry at Netflix? Turns out that Netflix completely fumbled its live stream of the Love is Blind reunion. And I know you were really keyed in for this. Just kidding. You had no idea what was going on. I know, but I did see what was going on on Twitter. So it was supposed to start at 8 p.m. Eastern, this live stream reunion of Love is Blind, which is their very popular reality show. But it was not available then. And then this poor social media person for Netflix had to keep posting and saying, we're sorry it'll come online soon we're having technical difficulties uh and then eventually they said all right we're just going to tape it and then put it online for you all at um put on our platform at 3 p.m eastern today so they completely fumbled this rollout it was very high stakes considering this is only the second live thing that netflix has done yeah i was honestly just surprised that they're doing live shows at all because for the longest time netflix has vocally shunned live content, especially sports.

16:53They were saying, we don't want to touch it with a 10-foot pole. It's too expensive. It's not what we're good at. And yet here they are trying to live stream some of their shows. And they kind of were self-fulfilling prophecy. It didn't go well. They weren't equipped to handle it. And I just truly think that this shows the state of the current streaming wars is that Netflix is just looking for any edge, any differentiating factor. so even though they've in the past said we don't want to do it they're now doing it because they want to stand out in some way well maybe the well the maybe the differentiated factor is that they suck at live things because they're a lot of their competitors are getting really good at it right youtube tv just has uh nfl sunday ticket uh apple tv plus is showing mls and mlb games amazon prime is showing thursday night football kind of without a hitch so their differentiating factor is that you cannot go there for live because they're just terrible at doing this i mean a love of love is Blind Reunion, you know, sports producers can obviously correct me on this, seems like a lot lower of a lift in terms of production than a NFL football game, which is extremely complex.

17:58And Amazon has pulled that off. Right. I also think a funny angle of this was just how involved the brands, as we call them, were on social media. I was going through who was in the Instagram live stream of Love is Blind. Cheesecake Factory brand account was in there. MTV, all recipes. It was like this weird cultural moment, which is why I think it created so much chatter is that for some reason, like Love is Blind is just a very culturally, impactful show right now. And so like, it was crazy. Hulu, there's a Hulu tweet of them basically like subtweeting them. Blockbuster was in. I saw that. The replies like roasting Netflix.

18:35They said, remember renting VHS from us? You could start it on time. No problem. This is what we get. So fun. I mean, even I roasted Netflix in the newsletter this morning. Right. It was, for some reason, this just struck a nerve with a lot of people on social media. So it is not a good look. They obviously want to get into live stuff because they wouldn't be testing this if not. So it doesn't seem like, this obviously is kind of like a three steps back situation because their reputational risk is now very high. Can't trust Netflix. The replies were just kind of like, you suck. Like, it was pretty bad.

19:08It was tough out there. All right, we'll keep an eye on Netflix. Let's go to our Monday segment, Winner of the Weekend, where Toby and I will each pick a thing or a person or a vibe that won the weekend. And I'm going to kick it off to Toby to go first. My Winner of the Weekend is a new song that Drake and The Weekend put out called Heart on My Sleeve. It's actually about Selena Gomez and The Weekend's former relationship, and it slaps. The only issue is it's completely AI-generated. So this anonymous creator called Ghost Rider says the song was made using an AI trained on the singer's voices.

19:43And we have a quick clip of the song that we'll play for you now.

19:58You wouldn't know that this is made by a computer. I'm head bopping too. It does go pretty hard, honestly. And so honestly, we were debating even playing the song for you guys because we didn't really know if we'd get in trouble or not. Would Drake or The Weeknd get mad at us? Would the YouTube algorithm punish us? Because of copyright issues. Right, because of copyright issues. Is it even someone else's music if AI made it? So it's introduced all these crazy questions about the future of music, the future of rights in music. And it's part of a discussion that Universal Music Group has already kind of touched on.

20:31yeah i think they uh sent a notice being like stop to ai companies saying stop scraping our music for your ai stuff like that you're stealing ip right it's only going to become more and then even drake kind of weighed in not on this song there's another song of him rapping an ice spice song and he literally posted the video on his instagram account and said this is the last straw so artists are in this weird spot too because it's it's this uncanny valley of you hear yourself but it's not you singing the words. Is Drake the most AI-able artist? Yeah, probably. It's very easy. What does that say about his music?

21:05To get his vibe, yeah. All right, let's go with my winner, which is also in the music realm, Phantom of the Opera. You might think that Toby and I are big jocks and we just care about golf and sports, but no, we actually love musical theater. And so Phantom of the Opera dropped for the final time, closed for the final time on Sunday. It is the longest running show in Broadway history, had its final performance on Sunday. It debuted in 1988 before we were born. It played nearly 14 ,000 performances for more than 20 million people, made$1.3 billion. And here's a fun fact. It also was the biggest job creator in U.S.

21:44theater history. During its run, it employed 6 ,500 people, including about 20 people that worked on the show back in 1988 all the way through 2023. This makes me kind of sad. I thought fandom would be one of those things that would just, it's so synonymous with theater and Broadway that to have it not on Broadway anymore just feels wrong. It's going to come back. And now we have kind of a shuffling at the top of the longest running Broadway musical. So Wicked just replaced Cats last week as the fourth longest running show all the time. So you have Phantom and then Chicago and then Lion King and then Wicked.

22:18Wicked and Lion King could be there for a long time. Yeah, that's a murder's row of musical theater right there. All right, let's get into the week ahead, give you a preview of what's going on this week and what you should be paying attention to. Start off the bat today, Boston Marathon. Good luck to everyone running. Very excited. Are you going to run next year? Next year, I plan on running, yes. That is awesome. We also have tax day tomorrow. Something I did not know that could be useful for people is that obviously it's the deadline to file your federal taxes, but it's also the deadline to make contributions to some tax-deferred accounts, such as an IRA.

22:50So there's a limit of$6 ,000 that you can deposit into an IRA if you're younger than 50 years old. So you might want to consider topping that off before Wednesday hits. Next year, the cap rises to 6 ,500. So make sure I had no clue. I looked at my thing. I was like, did I reach the limit? We have more earnings reports. We have Netflix is reporting earnings. So they'll definitely be asked about their live ambitions. Bank of America, Goldman Sachs, American Express, and Tesla and a dozen other firms. I have a fun fact about earnings so far. So 30 companies have reported 90 % so far have beat on earnings per share.

23:26That's the highest week one statistics going back to at least 2012. So earnings have been good so far. Maybe the bar is low. Yeah, that's good. It was, but it's still good. Earnings will definitely shape the stock market going forward. We have the G7 summit in Japan where all the foreign ministers get together and talk about geopolitical challenges like China's aggression toward Taiwan, the war in Ukraine, climate change, finance, all those great things. We also have a lot of playoffs. I thought we weren't jocks, Neil. We didn't care about sports. Oh, we care. If you flip to any channel this week at like 7 through midnight, and you're going to get NHL and NBA, the NBA playoffs have had an amazing start with the Kings.

24:07I want the Kings, baby. And Russell Westbrook renaissance last night. So very amped for that. We also have Ramadan is ending at sundown on Friday. Earth Day is Saturday. and then a couple days before is 420. Let's go. Which I don't know why 420 is. Central Park is going to be lit. That's all I'll say. I mean, it smells like weed all the time in New York, so I don't know if 420 is going to make a difference. That's our show for you. That is a wrap on Monday. You can always reach us at Morning Brew Daily at morningbrew.com. Stinks that Starship didn't blast off, but space is really freaking hard.

24:41Let's roll these credits. The show's producer and editor is Emily Milliron. Our technical director is Yuchenna Waogu. Our supervising producer is Bryce Beloff. Raymond Liu is our associate producer. James Atamian is our sound guy. Hair and makeup is picketing outside Netflix's headquarters. Devin Emery is our chief content officer. Our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

25:17And Doug. Here we have the Lemu Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug. Uh, Lemu? Is that guy with the binoculars watching us? Cut the camera. They see us. Only pay for what you need at LibertyMutual.com. Liberty, Liberty, Liberty, Liberty. Savings vary. Underwritten by Liberty Mutual Insurance Company and affiliates excludes Massachusetts.