US, EU Economies Going Opposite Ways? & The Fatal Aircraft Collision in DC

0:00The spirit of innovation is deeply ingrained in America, and Google is helping Americans innovate in ways both big and small. From improving emergency response times to protecting against cyber attacks, local, state, and federal governments are innovating with Google AI. This is a new era of American innovation. Find out more at g.co slash American Innovation. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, everything we know about the deadliest plane crash on U.S. soil in over two decades. Then the U.S. and Europe's economies are heading in two completely different directions.

0:37It's Friday, January 31st. Let's ride.

0:45It is January 31st, the final day of the first month of the year. And congratulations to everyone who successfully completed dry January. I raise a glass of apple juice to you. Toby, you were doing dry January. Should I be toasting to you as well? Well, Neil, I did slightly wet January, but I have a good excuse. I had a friend visit New York City last weekend. We went to a comedy show that, to put it lightly, was the worst comedy show I have ever seen. And I didn't want to leave, so I did the next best thing, which led to the unfortunate end of my dry January. So do not blame me. Blame a really deadbeat audience in a 6 p.m.

1:26start time. So slightly wet January. Thank you, though. You can still toast me. Now a word from our sponsor, Yahoo Finance. Neil, I've been listening to The Odyssey while I've been working out recently, and I gotta say, it slaps. I'm sure Homer appreciates your review, Toby. Two themes have stood out to me. One, characters like Odysseus' wife Penelope take a very long-term view of things, holding out hope over years that Odysseus will return. I see where you're going with this. Kind of like how investors need to have long-term horizons when considering where they put their money. And then the other theme, knowledge.

2:00Odysseus visits tons of gods and oracles, even goes down to Hades to talk to the dead, all in the pursuit of learning more about how he may complete his journey home. Yahoo Finance makes it way easier than traveling to the underworld. You can just head to its research tab to get insights from experts or read research reports. No bargains with Persephone required. If you want to stay informed about the market without going on an odyssey, head to yahoofinance.com. That's yahoofinance.com. This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you.

2:41Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there. Survivors are expected to be found from the mid-air collision between an American Airlines regional jet and a U.S. Army Blackhawk helicopter that shocked the D.C. community late Wednesday night. With 67 victims in total, it was the deadliest crash in nearly 24 years, ending an era of unprecedented U.S. airline safety. After a moment of silence to honor the victims before his remarks at the White House, Trump was quick to lay the blame for the crash on DEI hiring policies and his Democratic predecessors, Biden and Obama, though didn't provide any evidence to support his theories.

3:27Here's what we do know. Audio recordings show air traffic controllers made two attempts to warn the helicopter. The first was made 30 seconds before the crash, the second just a few seconds before. A preliminary investigation by the FAA found that a single controller was handling both helicopters and planes landing at the Reagan Airport when the accident occurred. Those jobs are typically assigned to two controllers, not just one, the New York Times reported. Neil, air traffic control facilities all over the country have been understaffed for years, but this crash highlights the dangers when you push a fragile system to its limit.

4:03Yeah, and we should say that investigators are still, it's just the beginning of the investigation to figure out exactly what happened. These things take weeks, months, but two major concerns have been raised here. Is D.C. airspace too crowded, and are there enough air traffic controllers on the job? Let's start with that congested airspace. Skies over D.C. are among the busiest of anywhere in the world. You have planes landing at DCA, Reagan, two other airports in the vicinity, as well as a ton of military helicopter flights. This is the capital of the United States. Over a three-year period ending in 2019, there were 88 ,000 helicopter flights within 30 miles of Reagan National Airport.

4:46That's nearly 100 per day. At the same time, DCA is very busy. It's squashed on this peninsula of land surrounded by water on three sides. And this runway that they use, the one that's most active, they use 90 percent for their flights, basically is the busiest runway in the entire United States. You have 800 daily takeoffs and landings. That effectively means you have a takeoff or landing once a minute across the entire day. So this is a very busy airspace. It is very controlled and should be very safe because it is Washington, D.C., the cradle of the United States government. So people were quick to point out the congestion around D.C.'s skies.

5:28And that has been actually a major talking point among lawmakers about whether to allow more flights into D.C.A. over the past few years. And then the background context of all this, too, is that there's been a lot of internal upheaval at the highest levels of the FAA right now. Now, Mike Whitaker, the former FAA administration head, resigned 11 days ago under pressure from Elon Musk, actually. And then just yesterday, Trump appointed a new acting head. But again, this is someone who is coming in one day after this accident. So it's been unclear who was actually running the FAA for a period of around 10 days.

6:05I mean, U.S. Transportation Secretary Sean Duffy was sworn in on January 28th. That was one day before this accident. And if you just zoom out further in the post-pandemic era, a lot of airline experts have warned that U.S. air traffic systems are just over capacity right now. There are more flights now than there were in that pre-pandemic period. But a lot of people have retired. There's been a lot of turnover both on the ground and in operations. So they're saying that this is the nation's air traffic infrastructure is just very stressed right now. It's remained very stressed. and this is just potentially a manifestation of that.

6:42There is chronic staffing shortages at air traffic control facilities. In 2023, they found that at the tower at DCA, there were nearly a third of staff below their target levels. They wanted—the union and the FAA said they wanted 30 at this tower. There are 19 fully certified controllers as of September 2023. And I just want to stress these are the very early innings. These are big picture topics about FAA shortages and congested airspace. So we don't know exactly what happened on in disguise here, why this helicopter crashed into this this regional jet, which both were flying very routine missions.

7:26The the jet was on its final approach. Nothing seemed seemed off. They were both equipped with these transponders that should alert each other and communicate with each other about different aircraft in the vicinity. So this investigation is just beginning. New data released yesterday showed the U.S. and European economies going in wildly different directions as America zooms ahead while Europe, unlike its ranks, remains on ice. The U.S. economy grew at a 2.3 percent annualized pace in the fourth quarter, the Commerce Department said Thursday. That was below expectations, but still really, really solid.

8:03It caps off a year, 2024, in which GDP rose 2.8%, pretty much on par with growth in 2023 and faster than in 2022. All those economists who predicted a recession a few years back have been inducted into the freezing cold takes hall of fame, a truly resilient economy we've got right now. In Europe, they cannot say the same. Growth in the eurozone, the 20 countries that use the euro, came in at zero for the final three quarters of the year. Economic stagnation prompted the European Central Bank to lower interest rates yesterday for the fifth time in six meetings. Explaining the rate cut, ECB President Christine Lagarde gave the opposite of a halftime pop-up speech, warning that the region's economy was set to remain weak in the near term.

8:46Toby, the split screen could not be more stark. On Wednesday, you had Fed Chair Jerome Powell hold rates steady because the U.S. economy is booming. Not 12 hours later, Europe's central bank cut rates because their economy has hit a wall. And they're in such an awkward spot right now because how many more times can the European central bank even afford to cut rates? Because inflation has also risen for the last three months in a row. It's at 2.4%. It's just creating this uncomfortable backdrop to this very stagnant economy because on the one hand, what are you supposed to do? Your economy isn't growing at all.

9:21You cannot burden it with higher interest rates. But at the same time, you do not want inflationary pressure to start creeping back up. So they're really in this tough situation. I'm not sure what you're supposed to do if you are the European Central Bank because both roads that you see in front of you lead to not very happy outcomes. I think they have to continue to cut rates. They can't cut rates fast enough right now. Now, if you just go country by country, things are just not looking good. Germany, which is this manufacturing industrial powerhouse, historically contracted. Their economy fell in the final three months of 2024.

9:55France, the other Eurozone powerhouse, fell. Their economy fell in the fourth quarter. Output was flat in Italy. And the only countries that seem to be doing OK are Spain and Portugal, whose economies grew partially thanks to all the tourism that those countries are getting. So line by line, it is not a pretty picture across the continent. And Europe has this very export-oriented economy. They very much send a lot of goods to the United States. And what does that make them? It makes them very exposed to tariffs that come from the United States. A lot of businesses have said, we're pausing investment before we figure out what's going on, what Trump will pass down, on what policies he will actually institute.

10:37Those policies are becoming clearer because yesterday Trump reiterated that he does plan to put 25 % tariffs on imports from Mexico and Canada. Those are two of America's top three trading partners. So even though there is some uncertainty when it comes to Europe, it does look like Trump will follow through on some of these tariffs. So that just intensifies pressure on the Eurozone because if those tariffs come down, it is not going to be good because it is such an export heavy economy. And we've been ragging on Europe a lot over this segment. But let's talk about the United States economy. I mean, it is doing really well.

11:112.3 % growth in the past quarter, 2.8 % growth over the past year. It is powered again and again by consumer spending. Consumer spending rose 4.2 % in the final quarter of 2024. It accounts for two-thirds of the entire GDP of America. So kudos to everyone just keeping on spending. It has to do with that low unemployment rate and a strong job market that America has. So really, we've seen such a divergence between the U.S. and European economies since COVID, you know, since COVID happened, basically. Welcome to Stock of the Week, Dog of the Week, the segment where Toby and I bring you one stock that harmonizes like Jacob Collier and another that sounds more like Bob Dylan.

11:52I won the pre-show Ticket to Ride match. Charleston to Portland is undefeated. So I get to go first. And my Stock of the Week is Chili's. Yes, a two-time Stock of the Week awardee. Aren't you tired of winning? Chili's hasn't been sucking up to us. It's just that every time its parent company, Brinker International, reports earnings, its stock keeps going up, setting fresh record highs. This week, shares soared 20 % after a quarter that one analyst called otherworldly. Basically, Chili's is doing things no restaurant of its size and age has ever done. Sales at locations open for at least a year jumped 31 % in the last three months of 2024.

12:31It's third straight quarter of double-digit sales growth. And that's not from higher prices. Foot traffic jumped 20%. The quarter was so ridiculous that analysts said the word congratulations to the company 11 times, according to CNN. One told CEO Kevin Hockman that he's going to write a great book on this someday. He needs to because other companies could learn a lot from how he turned Chili's from a run-of-the-mill casual chain into a viral sensation and financial juggernaut. Toby, while the broader restaurant industry is seeing empty chairs at empty tables, Chili's is master of the house. I mean, CNN wrote the headline, Chili's is America's hottest restaurant.

13:07And I am not one to disagree. That foot traffic stat is really illuminating of what's going on here. Because yes, you can increase profits by raising prices. A lot of fast food companies have done that recently to make up for falling foot traffic. Chili's went and said, absolutely not. We did not raise prices. People just love us and more people are coming in to our restaurant. Part of the reason why people love Chili's is it just found this groove on the social media. Remember, we talked about TikTok and the rise of its triple dipper platter, which lets you order three appetizers for under$20.

13:42This is something that has been around for decades. But for some reason, one TikTok video, a couple TikTok videos just hit the algorithm correctly. And all of a sudden it became like this meme. but it's not even a meme because people are actually falling through on it. So it's definitely a story of a little bit of luck, but then I guess they just found the right dish at the right price point for the right consumer at the right time here. Our Dog of the Week is UPS. If you want a fast track to the MBD Dog of the Week section of the show, a good way to get there is to announce you are going to do a lot less business with your biggest customer.

14:17UPS plans to phase out more than half of the business it does with Amazon. over the next 18 months, a move that sent its stock spiraling 14 % yesterday. Now, why would you want to wean yourself off the Amazon money faucet that accounted for over$1 billion of UPS's total revenue last year? Amazon is our largest customer, but it's not our most profitable customer, UPS CEO Carol Tomei explained on yesterday's earnings call. Even though the volume is there, margins are tight, and it's hurting overall profitability. Neil seems counterintuitive to cut ties like this, But UPS thinks that finally shedding itself of Amazon will allow it to focus on more profitable lines of business.

14:57It's all about protecting its margins. It's like a coffee shop saying, yeah, we sell a lot of drip coffee, but that's not really moving the needle in terms of our profits. Let's sell$6,$7 lattes, and that's where we'll make our business. So it's shedding 50 % of 12 % of its entire revenue to move into more profitable segments. It was a surprise, which is why you saw UPS stock head down so much. I think it was their worst day ever on the stock market, down 14 % for a big company like UPS. I mean, that is a huge wipeout. So it is an interesting move. We'll see if it pays off for them. The problem with shedding that, too, is that you're not just losing revenue.

15:38You're also losing volume. So now suddenly you have some empty planes, some empty trucks. You have to realign your entire delivery network. So it's going to affect results. That's why analysts were like, woo, this was going. They knew UPS has been hinting that they were going to phase down their Amazon's business. I mean, its main rival FedEx actually went through the process of completely eliminating Amazon from its delivery network back in 2019. So this wasn't unexpected. It was just the speed at which they're doing this. Analysts said, all right, I don't know how you're going to be able to pull this off because it takes such a big realignment of your entire vast delivery network.

16:14Their saving grace could be Sheehan and Temu because UPS has seen a lot more deliveries from those ultra-cheap marketplaces, which they say are more profitable than Amazon business. So, Timu and Sheehan, you're propping up UPS's business right now as it completes this transformation from a major supplier for Amazon to controlling more of its own destiny. Up next, a story about the Blue Man Group. Raise the runners! Raise the sails! Raise the sails! Captain, an unidentified ship is approaching. Over. Roger. Wait, is that an enterprise sales solution? Reach sales professionals, not professional sailors.

16:54With LinkedIn ads, you can target the right people by industry, job title, and more. Start converting your B2B audience today. Spend$250 on your first campaign and get a free$250 credit for the next one. Get started today at linkedin.com slash campaign. Terms and conditions apply. Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars.

17:33I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon, Series premiere Tuesday on NBC. It is a sad day for fans of bald, earless men covered in paint. After a 34-year run, the Blue Man Group is playing its last show in New York City this Sunday. The Blue Man Group arrived in NYC in 1991 before the World Wide Web was even invented, and it leaves a cultural phenomenon after performing 17 ,800 shows and going through 82 ,150 gallons of paint as calculated by the New York Times. For anyone who hasn't been to a show, the Blue Man Group do a very specific sort of performance art where three silent performers clad in black and painted blue catch marshmallows in their mouth, eat Twinkies, and play drums made of PVC pipes.

18:23But its PE-controlled owner, Cirque du Soleil, said that it had to make the difficult decision to shut down the iconic off-Broadway show as it deals with financial struggles following a 2020 bankruptcy. Fortunately, the end of its NYC show is not the end of the group. You can still catch them in Boston, Vegas, Berlin, or any other of a dozen cities across the globe. But Neil, should we go to this show on Sunday? I've been one time. It was one of the, not in New York City. I've been elsewhere. I think it was in San Francisco when I was growing up. I still remember it. It is incredible. One of my favorite performances.

18:58I've never been. I absolutely will look on for tickets because just reading about the history of the Blue Man Group is pretty incredible. They have one of the longest off-Broadway runs of all times going back to 1991. Just truly a cultural phenomenon. They were also helped along the way by various TV appearances, which raised their profile in the United States and around the world. They truly are a global phenomenon. They went on the Jay Leno show the first week he was on NBC. And then who could forget the whole narrative arc of Tobias Funke on Arrested Development trying to become a Blue Man Group member.

19:40So it was a Blue Man Group. What is a stage performance, but it had such a larger presence due to due to some of these appearances on TV and broader pop culture. Yeah. And some of the founders of the Blue Man Group gave some pretty great quotes. So The New York Times, one founder put the idea was always to jumpstart other people's weirdness. Part of what New York is all about is be your crazy self, get your freak on, try your thing out. And there's nothing freakier than a man dressed in all blue paint and black just doing completely random things. Like it is just absurdist performance art. And they also said people would be like, who's that weird guy over there if one of the founders went out alone dressed in blue?

20:22But if they counted a blue trio, suddenly that changes everything. They would ask what's going on. It becomes an event. So they understood the power of, you know, putting on a show, the power of being weird. And I do think that it has just transcended. Like people just know the Blue Man Group, even if like yourself, you've never seen a show. It just became something bigger than just three guys, you know, in a dark basement playing PVC pipe drums. And there's a lot of questions around why it was shut down in New York and in Chicago. You mentioned it is owned by Cirque du Soleil, the live entertainment behemoth, which is owned by private equity.

20:58It bought Blue Man Group in 2017, and they just really haven't been transparent or forthcoming about why they're closing these shows in New York and Chicago. They're not explaining why. In Chicago, which closed a few weeks ago, there were protests. Dozens of people came out in Blue Man Group garb and started playing drums, did this silent protest to sort of accuse Cirque du Soleil of putting corporate profits over art. And so it's pretty interesting to see what this large corporation has done to Blue Man Group. And it could be, you know, they could be losing money. We just don't know because they haven't talked about it.

21:36I did look up ticket prices to the show, too. Astronomical. They are extremely expensive. More than Super Bowl? They're on Super Bowl level, essentially. So I don't know if we actually will be able to sneak into this final show. All right. Let's take you into your final workday of the week with some more headlines. An asteroid 100 meters wide has triggered global planetary defense procedures for the first time after it was discovered it could make impact with Earth in the year 2032, seven years from now. And by could, there's a 1.3 % probability that it smashes into the Earth in December 2032.

22:11So, yes, I'm saying there's a chance. And astronomers are on pretty high alert. The Torino scale communicates to the public how much we should be worried about a deadly asteroid collision. Zero means there's effectively no likelihood of impact, while 10 means we're certainly all gonna die. This asteroid, named 2024 YR4, clocked in at a three on that scale, which is the second highest rating ever given to an asteroid. Toby, a three, are you worried? I am not worried, and I'll tell you why, because yes, there's a 1.3 % chance it hits, but there's also a 98.7 % chance that it misses, So I'm choosing to take the glass 98.7 % full approach here.

22:56But yes, it is interesting that this is technically the second most likely asteroid we've encountered to impact Earth. And it is pretty big. Right now, estimates put it at between 130 and 330 feet long. Now that isn't an extinction level size. It's not going to wipe out the dinosaurs per se. What it will do though is it could wipe out a major city if it did impact that. There has been an asteroid that hit back in 1908 around a similar side. It was 130 feet, so on the lower end. And that wiped out a force 800 square miles in size. That is twice the size of New York City. So even though it is small, it definitely is mighty and could pack a punch.

23:38And we won't know more about it until 2028 because right now it's traveling away from Earth. It has to come back to Earth for us to measure it again. So by 2028, when it comes back around, that's when we'll learn more information about it, whether that 1.3 % chance goes to 100 or it goes to zero. But to me, it is crazy that they know the exact date that it could impact Earth. They're saying it will happen if it does happen on December 22nd, 2032. That is some physics that I could definitely not do. I could barely execute a F equals MA function. So to know when an asteroid might hit Earth on the exact day seven years from now is truly crazy.

24:16Wine and pizza isn't exactly a pairing on the level of peanut butter and jelly, but it's one that major pizza chains are trying to make a thing. Domino's is collabing with a winemaker out of Australia to release a limited edition red blend that it says pairs quite well with its classic cheese, Zah. That comes just months after its rival Pizza Hut introduced a sauce-inspired wine made from tomatoes and infused with natural basil to its pizza-loving customers. Now, I can't believe I'm saying this, Neil, But I think we're in the middle of a wine and pizza war right now. It looks like we are. Now, Domino's and Pizza Hut are always trying to out-innovate each other.

24:54Domino's took a huge step ahead with the pizza tracker because who could forget that? But on this one, I do think that Pizza Hut took a bigger swing because their wine is literally made from tomatoes. That is a little more aggressive and ambitious. Domino's is just partnering with a regular wine company, so that feels a little lame compared to Pizza Hut. But the bigger question is, is wine what you want to drink to accompany a crappy pizza? So I was looking at to what other drinks would pair well with pizza, because it's not exactly something you do want to pair a drink with. But I did some research.