Trump Charges Instant Access to Truth Posts & AMC Says Movies Are So Back

0:00Hey, it's Ryan Reynolds here from Mint Mobile. Now, I was looking for fun ways to tell you that Mint's offer of unlimited premium wireless for$15 a month is back. So I thought it would be fun if we made$15 bills, but it turns out that's very illegal. So there goes my big idea for the commercial. Give it a try at mintmobile.com slash switch. Upfront payment of$45 for three months,$90 for six months, or$180 for 12 month plan required. $15 per month equivalent. Taxes and fees extra. Initial plan term only. Greater than 50 gigabytes may slow when network is busy. See terms. Good morning, Brew Daily Show.

0:33I'm Neil Freiman. And I'm Toby Howell. Today, how Taylor Farms bungled its cyclospora response. Ben, would you pay six figures for instant access to Trump's truth social posts? It's Friday, July 24th. Let's ride.

0:57The United States exports many famous things to the world. Hollywood, fast food, baseball. And this week, we added another to the list, the lottery. On Tuesday, Powerball tickets went on sale in the United Kingdom, making it the first time a lottery outside the U.S. contributes to the jackpot. Powerball execs say the global expansion will lead to jackpots growing more quickly for Americans and emphasize that the odds, which are minuscule to begin with, haven't changed. However, many lottery fans in the U.S. are upset and say they'll be switching to their state lotteries instead. Toby, if you win, will you take your winnings in dollars or pounds?

1:31Well, there's actually quite a few differences between how the lotteries are set up. The main one being in the U.K., the advertised jackpot shows what the winner will take home post-tax. So if the jackpot is around$600 million here in the United States, It will be advertised as closer to$300 million in the UK, which is probably smart, by the way. Also, if someone wins the UK jackpot, they have to take annuity payments. So they don't even have the option to take it in a lump sum because it's just a wiser financial decision. So they're trying to protect winners. And finally, you're going to be paying more in the UK.

2:05Powerball tickets in the US are$2. In the UK, it's the equivalent of$5.35. So those are the main differences. I'm not winning. And now a word from our sponsor, Anthropic, the team behind Claude. Neil, do you ever get nervous that AI could impact our jobs? I think everyone is in some way or another. Well, Anthropic, the public benefit corporation behind Claude, heard questions like that over and over in more than 120 ,000 interviews about people's hopes and fears around AI. And they're doing something about it. They just launched Claude Core, a$150 million fellowship paying 1 ,000 people full salaries to work at nonprofits while training for AI-era careers, plus a research fund to help prepare society for the economic impacts of AI.

2:48So if you've got your own hard questions about AI, head to claude.ai.mbd to submit it to Anthropic and explore how they are answering them. That's C-L-A-U-D-E.ai.mbd. Crude prices surged above$100 a barrel yesterday as supplies came under attack across three different fronts, threatening one quarter of the world's oil supply and renewing fears of a global energy crunch. You know all about the Strait of Hormuz, that's one. But I regret to inform you there's another narrow waterway in the Middle East that's become a no-go zone to oil tankers. It's called the Bab-Almandab Strait, and it's the tiny sliver of blue connecting the Red Sea to the Indian Ocean.

3:28Yesterday, Houthi militants in Yemen, backed by Iran, said they attacked two Saudi Arabian tankers in the Red Sea, an escalation that caused oil to rise above the$100 threshold for the first time since May. Bob Al-Mahdab has taken on even greater importance as a detour since Iran closed the Strait of Hormuz during its war with the U.S. With Hormuz shut down, Saudi Arabia had been sending its crude through pipelines across the country and out to global markets through Bob Al-Mahdab. It was a key choke point even before the war, handling 12 % of the world's seaborne oil flows. Investors now fear that this crucial lifeline is in danger of being throttled by the Houthis.

4:04And finally, the third arena of oil disruption is in the Black Sea, where Ukraine has mounted sustained attacks on Russian energy infrastructure. Pipeline flows have stopped to a port that handles one third of Russia's oil exports and Kazakhstan's crude as well. The uptick in geopolitical conflicts amounts to triple digit oil prices and renewed concern over the global economy. Let's talk about Bob Almondab and the Black Sea because we've talked a lot about the Strait of Hormuz. If Bab Almondab is in fact closed because of these attacks, ships traveling to Asia must go north through the Suez Canal, around Gibraltar, and then around the Cape of Good Hope into South Africa.

4:43It adds about 10 to 15 days to voyages, plus the very large crude carriers, which are the common way of transporting oil around the world. They cannot fully transit the Suez Canal because they're too big and they're usually too heavily laden. And so that causes all sorts of headaches. And then when we talk about what's going on in the Black Sea with Russia and Ukraine, the issue there is that a lot of refining systems are located around those points. So when we're talking about Ukraine hitting Russia's energy infrastructure, it's about turning oil into useful things like gasoline and jet fuel, that sort of thing.

5:19So that's why these two critical choke points, although they don't transport as much oil as the Strait of Hormuz, are still very important to the energy system. Yeah, Bab al-Mandab has taken on much greater importance when the Strait of Hormuz was closed because Saudi Arabia has these pipelines going from east to west, and they've been getting their crude oil to Asia through Bab al-Mandab on the other side of the country. Actually, they were doing a lot of this. 70 to 75 percent of Saudi Arabia's total exploits were going through the pipeline through this Red Sea port of Yanbu and then out to global markets through Bob Al-Mandab, four million barrels a day.

5:56And that was maybe one of the reasons why we saw the energy crunch not fully materialized when the Strait of Hormuz was closed, because Saudi Arabia, which is a huge oil exporter, was able to get their stuff out to global markets through this other strait. now with the Houthis threatening Saudi Arabian ships in that waterway, that raises the threat level that much more. And obviously, the reason why the Iranian war flaring back up is alarming is because the world enters this prolonged crisis with much lower inventories than they had initially, because normally governments can withstand these oil supply shocks because they have reserves.

6:31We have strategic reserves in the United States. Many other countries have them as well. But our reserves, at least here in the U.S., have fallen 3 million barrels in the summer. It's the lowest since the Reagan administration. So we just don't have that cushion that we had, you know, in the early days of this conflict. So that's why you're saying oil prices rise back up again, because there's not that helpful cushion that we had initially. Let's talk about the market response. The oil prices is filtering across markets, the stock market and the bond market. I want to start with the bond market, because You may not pay attention to it, but this thing is super powerful.

7:07It led to President Trump reneging on his Liberation Day tariffs last year. It led to the ousting of Prime Minister Liz Truss a couple years ago because when bond investors freak out, that freaks out the White House because it raises borrowing costs across the board. And that's what's happening right now in the United States and across the world. 30-year Treasury yield has been above 5 % for the longest stretch since 2007, nearly 20 years ago. The 10-year yield is at one of its highest levels in years. So borrowing costs are rising across the economy. You can see this in mortgage rates, which just the new data just came out yesterday.

7:42The average 30-year U.S. mortgage rate was up to 6.58%, which is the highest level in nearly a year. And we're seeing gas prices climb above 4%, as we mentioned earlier this week. And then also airlines are kind of revising their forecast because they have been hit the hardest from rising fuel prices. American Airlines revised down its yearly earnings estimate and says that they could see an additional$1.6 billion in expected fuel costs for the rest of the year. Moving on, one time I went to Disney with my friend Caden and his family had bought the FastPass bracelet, so we got to skip lines. It was awesome.

8:18Best Disney experience ever. Trump Media Group is taking a page out of that playbook and selling FastPasses too, but instead of a quicker way onto It's a Small World, you get instant access to Truth Social posts. Earlier this week, the publicly traded parent company of Truth Social unveiled a new premium data service. If you pay$100 ,000 a month, you get to see posts from the president's official account a couple milliseconds faster. Why pay six figures for a truth? Well, when Trump posts, according to the company's own pitch deck, he moves markets. One example Trump media cited is the Liberation Day tariff announcements, which sent stocks hemorrhaging.

8:56Another showcased a post about hitting Iran very hard that caused oil prices to spike. So the pitch goes, think about how much money you could make if you knew Trump was going to hit Iran very hard a couple milliseconds before everyone else did. While those margins might mean very little to you or me or any human, milliseconds are worth their weight in gold in the world of high frequency trading, the main customers for this sort of product. Neil, obviously this set off a lot of legal and ethical alarm bells around a sitting president monetizing government communication. But Trump Media's argument is the service is only accelerating access to publicly available information, so it's not technically insider trading.

9:35Either way, apparently multiple trading houses have already signed up, so there is a market for this sort of thing. U.S. financial markets operate under the premise, whether it's the reality or not, that any investor, Wall Street tycoon or an unsavvy regular person like you, Toby, has access to the same information and it's up to them about what to do with it. So anyone can listen to an earnings call. Anyone can read an IPO S1 filing. Anyone can read through a quarterly financial report to make their own judgment. Anyone can scroll Trump's truth social feed to see what he's saying, which means that there's always this hunt for alpha, the information that no one else has access to.

10:09And the fact that huge Wall Street firms might be able to pay huge sums for this alpha comes off as deeply unfair to a lot of participants and puts retail investors at even more of a disadvantage. But a lot of people are saying that this fast feed is basically normalized behavior that already exists on Wall Street. Like you bet that Wall Street has already built these automated systems that monitor his account and automatically trade based off of the information that are displayed there. They're going to beat you and me and any regular person no matter what because they have keywords that execute trades using AI that they know when he mentions these keywords enter and exit these sort of trades.

10:48So that's already happening. All this is doing is speeding it up just a little bit. And lining the pockets of President Trump who owns a$1.1 billion stake. He's the largest shareholder in Trump Media Group. That's the other, you know, the ethical and actually legal argument against it. A lot of firms say, though, that it's not going to make that big of a difference. And some actually just might buy it because it's a defensive point. Like if your competitor is getting it milliseconds faster, they're like, all right, I guess I have to do to match them. But in the world of high frequency trading, that's not even the weirdest thing that these firms have done to try to gain those milliseconds.

11:26A lot of companies locate their servers directly next to the NASDAQ and the New York Stock Exchange computers to reduce latency. see some have hardware near Washington DC to receive government economic releases quicker they're always looking for these tiny tiny edges so even though it's an eye-rolling amount to say are you really going to pay a hundred thousand dollars for this access they probably will because milliseconds matter we'll see if this actually comes to fruition because there's been a lot of pushback in the days since this what this was released the financial times reported yesterday that there had been a lot of wariness and pushback from wall street firms about this particular move And we have some legal experts saying because of the gray area here on whether it's insider trading or not, then they advising their executives at these hedge funds and other investing groups to say maybe you shouldn't even do it because why even touch that?

12:18You already have all these mechanisms for high frequency trading. As you mentioned, I probably would advise against that. And you also have a bit, a ton of backlash from even, I mean, Democratic lawmakers, yes, but also a lot of GOP senators who are in Trump's own party. Senator Bill Cassidy, who's a Republican from Louisiana, said, I think that's wrong. It's a form of buying access. Lisa Murkowski of Alaska called it wild. And Susan Collins said that does not sound appropriate. And they are looking ahead to November, the midterms, and saying, wow, Trump is doing another thing to line his own pockets, which is going to be a huge vector of Democratic attack and also something that favors Wall Street pros, already wealthy people over the regular person.

12:59So they don't think this is a politically savvy move at all. Let's move on. It's Stock of the Week, Dog of the Week time, the segment where we pick one stock that's the group leader and one stock that is jester maxing. I won the pre-show game of how to tie a bow tie, so I'm up first. My stock of the week is AMC, which just had one of the best quarters in its history. Revenue hit$1.6 billion, up 14 % over last year. It added its highest adjusted EBITDA ever, and its stock followed suit, jumping as high as 26 % post-earnings before settling down a bit. AMC is a relatively simple business to understand.

13:34If people go to the movies, AMC benefits. And indeed, the domestic box office grew 10 % during the quarter, powered by movies like Obsession, Backrooms, and Toy Story 5 to notch its best performance since before the pandemic. Even more bullish, the awesome financial results AMC posted came BTO, before the Odyssey. Christopher Nolan's epic is only going to keep the good vibes rolling with a chain reporting 4.3 million people went to the movies at its theaters during the Odyssey's release weekend. Neil, obviously AMC's share price sometimes divorces from reality given its popularity with the meme stock crowd, but this latest stock jump was propelled by its actual business recovering quite nicely.

14:14Movies are so back. And I want to go back to COVID to highlight just how existential this was for movie theaters. I mean, a lot of people, a lot of smart people said, this is the end of movie theaters as we know, because we had large studios saying that they're going to release movies on streaming on HBO Max the same day that they would come out on theaters, which would perhaps kill movie theaters AMC's business model. And that simply didn't happen. And the CEO of AMC yesterday said, he literally name-checked COVID. He said, as a result of the pandemic, there was a lot of experimentation. But what Hollywood has learned over the last several years is that people love to go to the movie theater.

14:54Studio after studio is turning out movie after movie designed for the big screen. And I think the two words that are important there are big screen. because at least for the Odyssey, huge format screens, including IMAX, were just a huge draw for people going to movie theaters. Special format theaters, which includes IMAX, they represent only 8 % of AMC screens, but they accounted for more than 50 % of ticket sales for the film, which means that they are going to invest in a lot more premium screens, bigger screens, because that's what people want to go to the movies for. It's that experience that they can't get at their couch did you see i saw the odyssey in a big screen i saw it in a large screen are you trying to screen mog me right there i was screen mogging we did not see it in imax though but you're absolutely right like people want to go and see a spectacle also if i am amc i'm pretty giddy about the stretch of releases coming down the pipeline because you got spider-man brand new day which is going to be a massive movie all these spider-man movies have grossed over a billion dollars.

15:55Avengers Doomsday is coming out as well. And that's on the same day as Dune Part 3 later in December. So those are going to be tested. The box office momentum will keep rolling because unfortunately, AMC's recovery still completely depends on Hollywood. Imagine your business fully leaning on the fact that you need Hollywood to pump out good movies consistently. So the quality of the release calendar is always the big question mark when it comes to AMC. But right now that quality is looking pretty dang high. And another bullish signal, if I may see, I'm looking at who actually went to the Odyssey, like looking at the audience data, 50 % of audience members to the Odyssey were between 18 and 34 years old.

16:33So Gen Z is coming out to movies, what they're calling a sword and sandal epic, which they might not necessarily go out for, for a book, not a book, even a poem that was written thousands of years ago 50 of the audience was under the age of 34 for this particular movie and chris nolan brings out the young people i want to compare that to disclosure day from steven spielberg was maybe he was the chris nolan of his age in the 2000s and the 90s 60 of opening weekend crowds for disclosure day above 35 years old maybe the youth just love homer you ever thought about that maybe it's not even chris for nolan at all they're just very homer-pilled all right we're gonna take a quick break and come back with Neil's Dogla Week right after this.

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18:47That's A-L-T-R-A running dot com slash morningbrew. My dog of the week is pretty much everyone associated with the response to the cyclospora outbreak, which has been even more foul than the explosive diarrhea it causes. To date, the parasite has sickened thousands across more than 40 states, hospitalized hundreds, and hurt the businesses of countless food purveyors. And yet Americans are still confused as hell about what they can or can't eat safely. Communications experts lay most of the blame on Taylor Farms, the salad giant whose iceberg lettuce from central Mexico has been linked to the outbreak.

19:22While they commend Taylor for expressing sympathy for the victims, they also say that vague, unclear messaging and a delayed recall has only contributed to the salad scare. And then there's the government response. The FDA reported that cyclospora illnesses began on May 17th, but it didn't issue a public notice until two months later, July 16th, last week. Not to mention, it announced it identified a sample of cyclospora on lettuce, only to walk that back as a false positive two days later. As a result, consumers have lost trust in the produce being sold to them and in an abundance of caution are cutting back on salads in the restaurant chains that sell them.

19:58Chains like Taco Bell, Sweetgreen, and Panera are all seeing traffic slow significantly as a result of the outbreak. And Toby, I get it. I too have no idea what produce I can and cannot eat. Nothing seems clear. Yeah, it is very murky. And I feel bad about these restaurant chains kind of being caught up in the crossfire of this because Chipotle saw their traffic fall by as much as 7%. Panera saw their foot traffic fall by as much as 6.6%. Chipotle said they do not believe any of its ingredients are linked to the outbreak. Panera said they have not had to remove any ingredients because of the outbreak.

20:31They are completely innocent bystanders in this thing right now, and yet they are having to go forward and produce comms showing that, hey, we don't actually serve this lettuce that could potentially be contaminated. And a lot of comms experts have said, yeah, Taylor Farms has just completely messed this up. They did this thing where they shifted the narrative from food safety to fighting the FDA. The FDA immediately pushed back on that, and a lot of people say that was a mistake because you don't want to publicly challenge a regulator that does have a lot of power over your business. So just when it comes to crisis communications, you don't necessarily want to be combative.

21:07What you want to do is pivot back to reassuring customers and supporting investigations, saying like, hey, this is what we know. This is how you can be safe. They did not take the right tact here. Let's talk about that episode specifically. So the FDA said that they had found a positive test on lettuce of cyclospora from Taylor Farms linked to their farms in central Mexico. Two days later, the FDA walked that back, which we talked about on the show, saying, actually, this was a false positive. And then Taylor Farms, whoever was tweeting for them, jumped on this and issued. And the first line of their communications, quote, tweeting the FDA's walkback was the FDA apologized to us.

21:49That was their first line. And that turned out to be false. Actually, the FDA came out and said, actually, no, we did not apologize to you at all. Well, furthermore, just because this was a false positive case, it doesn't mean that you're off the hook. In fact, we still think that this lettuce of yours is still linked to the outbreak. So your vindication was far too early. Taylor Farms later deleted this communication because it turned out to be wrong on multiple levels. And then there's also—so that's one mess up that they did, which was saying FDA apologized to us as the first thing after the FDA walked back their false positive.

22:24And then the other thing they did was in the recall notice of recalling this lettuce from central Mexico in 27 states, they included these keywords when talking about various retailers and restaurants that they sent it to. So they said, we sent it to SY and MKTSD and SUB, leaving consumers thinking, you know, what the hell is SY? I think that's Cisco and SUB, maybe that's Subway. You know, we don't really know. So they were just utterly confused from the outset. And I think it's because no one wants to be linked to a parasite or an illness that causes, quote, explosive diarrhea. But they just didn't own it.

22:59And it's led to a ton of confusion among consumers. Let's try to reduce some of that confusion. How can you safely eat produce during a cyclospora outbreak? Here are some general tips. Whole produce is usually safer than bagged salads. because when you're buying a whole head of lettuce and then you remove the outer leaves, that's better than buying these pre-chopped and mixed salad bags because that sometimes takes produce from many farms and gets mixed together. So that's number one, just go whole produce. Number two, cooking is often your best defense. If you heat your produce up to above around 158 degrees Fahrenheit, that kills the parasite.

23:36So maybe if you're thinking about, although I don't know who would ever cook iceberg lettuce because then that just cooks down to absolutely nothing. But if you're ever scared about your fruits or veggies or berries or anything like that, just cook it. And that reduces the risk going forward. And then if you are eating out, maybe don't order iceberg lettuce. Again, I'm not sure who's ripping, I guess, wedge salads people order a lot. But just ask them where they're sourcing their salads from or just opt for a different sort of entree. Meanwhile, all this comes as the FDA mentioned that there's a new outbreak linked to an unidentified source.

24:11This could be perhaps, we don't know, linked to North Carolina, which had an 83 % spike in cases over the past week. So the initial one appears to be Taco Bell. This was in the Midwest. Five states appeared to be Taco Bell getting their iceberg lettuce from Taylor Farms in central Mexico. This one, we don't know. Consumer reports suggested that it could be parsley, cilantro, and lettuce in North Carolina. But the FDA once again has not said that that they know what's going on in North Carolina or mentioned where this new outbreak is. All great stuff. OK, let's bring to the finish with some final headlines.

24:49The Trump administration announced new tariffs on 60 countries ranging from 10 percent to 12.5 percent. And what amounts to the replacement of the replacement of his original tariffs? These new tariffs, which went into effect at 12.01 a.m. this morning, replaced the broad based 10 percent tariffs the president instituted after the Supreme Court struck down his much higher. Liberation Day tariffs as illegal earlier this year. Those 10 % tariffs were temporary and set to expire at midnight. For the new tariffs, Trump is issuing them under Section 301 of the Trade Act of 1974, which allows the U.S.