Why Apple's Stock Just Tanked & Workers Are Unhappier Than Ever

0:00What should you invest in? And how often? Making investing decisions is easier with Fidelity. With their step-by-step experience, you can find investments based on your goals and comfort level. And if you'd like, you can decide how much and how often to invest with recurring investments that happen automatically. Ready to make your next investing decision? Head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE SIPC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, new reports show that American workers are feeling extra unhappy these days.

0:38So we'll get to the bottom of the great gloom of 2023. We'll also discuss how Elon Musk is changing the course of the Ukraine war with the flick of a switch. Then Chinese smartphone maker Huawei shocked the world by dropping a 5G chip way more advanced than anyone expected. Plus, we've got the stats from Yelp's most photographed restaurants of the year. And it ain't your local Golden Corral. It's Friday, September 8th. Let's ride.

1:09Toby, I have to ask you, why did you glue your feet to the ground of the U.S. Open last night? Oh, Neil, I have my reasons. But for anyone who doesn't follow our Instagram account, which you should, at MBDailyShow, I did a Toby takeover last night at the U.S. Open. My main goal was to try and secure the Honeydews Cup, and I succeeded where Neil failed. It's on my desk right now. but then yes the match was interrupted by these climate protesters one of which glued his feet his bare feet to the ground it was amazing neil the crowd instantly united around not liking this person as you might imagine you pay a lot for a ticket you don't want your experience disrupted like that but also a fun detail was my section was pretty far away from where things were going down and so everyone had their iphones out and we're using kind of the 14x zoom feature kind of as a telescope to look at what was going on.

1:58So it truly felt like an Apple ad for me with everyone using like this, this great feature. So yeah, it was amazing. Bearish on the binocular industry. Yeah. And bullish on the iPhone industry. Okay. Now let's jump into our first start of the day where Apple is taking a bit of a bruising over in China. Yesterday, China announced plans to expand a ban on the use of iPhones in government departments and state companies. Now foreign devices like iPhones have long been discouraged in sensitive departments, but to see the ban expand in scope is not great for Apple. Despite the rising tensions between the US and China, China is still a massive market for Apple.

2:36Last year, it pulled in$74 billion in sales in the region. And even as Apple tries to diversify away from China, it's still a major manufacturing hub for the company. But the real nasty surprise for Apple this week was that Chinese smartphone maker Huawei shocked the world by releasing a smartphone equipped with a 5G chip. Most people in the industry didn't think it was possible for a Chinese company to produce technology like that, given sweeping efforts from the US government to restrict access to chip technology in the region. So Neil, all of a sudden, Apple's future in China, where it has enjoyed three decades of sales growth, looks to be a little bit on taking footing.

3:15It's kind of like a double whammy here. I don't know if they're related. Some are speculating that they are. This Huawei new phone coming out, I think it's called the Mate 60 Pro, which is quite good and much better than anyone suspected. And at the same time, this ban. So I just want to back up. If anyone recognizes the name Huawei, it's because there was a lot of news about this company in like 2018, 2019, during the trade war years. They want to build, they're a 5G telecom equipment company in addition to being a smartphone maker. And they wanted to build all this 5G telecom equipment across the Western world, to which a bunch of Western companies like the UK, the Netherlands, the US said no out of fears that it would be used by the Chinese government to snoop on our citizens.

4:01So the US hit Huawei with a ton of sanctions, like restricted a lot of access to US technology and crippled this company. This company was like in the dumps. And then slowly but surely over the past few years, they've been progressing, progressing, progressing, leading up to this moment where they absolutely just shocked the world. It's kind of like a Sputnik moment for China here. Yeah, I've seen the take basically is that our chip ban on Huawei kind of backfired on us. And what it did instead was spur this huge innovation moment and they got them to this point that we didn't think that they could get to.

4:35And then also a lot of people are saying too, have they violated these sanctions or has someone in the US violated these sanctions? Because not only did they produce the chip in order to create a 5G-enabled phone, they also produced all the other components that you need to run a 5G phone, like power amps, switches, filters, all these other parts of what makes up a smartphone. So a lot of people are scratching their heads saying, how did they actually get to this point 10 years before we expected them? Yeah, and the U.S. is officially investigating what's going on here. You know what I think we need is these guys who took apart the McFlurry machines to grab this phone and see what's inside.

5:16Because no one actually knows. But these guys are so good at it, they can fix a McDonald's ice cream machine. I think they can figure out what's going on here. But this has been not good for Apple. It's lost$200 billion in market cap over the past two days. Shares are down about 7%, which is a lot for Apple because it's worth more than$2 trillion. dollars um yeah and then zooming out i mean we have the the next iphones are going to be unveiled this week uh setting the stage for the holiday period so this is like a really all of a sudden there's a lot of focus on apple where i mean in the past couple years it's literally just been apple kept getting bigger and bigger just has been cruising through little rough patches here and there but now we have a lot of focus on this next apple event obviously the usbc is going to be released or we're hoping it's going to be released so that that's probably going to be the major news on that front.

6:06All right, let's move on. Maybe all those cringy trends of quiet quitting, bare minimum Mondays, focus on anything other than work Fridays, have a, I just made that up, have a kernel of truth because a few recent reports show that employees in the U.S. are really disgruntled with their situation. American employees are now more unhappy now than they were during peak COVID, says a new report from HR platform Bamboo HR. This survey of workers across 1 ,600 different companies found that employee sentiment has dropped significantly since 2020 and has declined at a rate 10 times faster than the past three years.

6:41So don't trust this survey. Okay, let's head to the ADP Research Institute, an arm of the major payrolls company, which just took the pulse of American workers and found pretty much the same thing. Employee engagement, resilience, and connection with their employers dropped from June last year. Why is this happening? And this could be any number of reasons from pay not keeping up with inflation, the prospect of layoffs, return to office mandates. But they're all conspiring to create what Bamboo HR calls the great gloom of 2023. Yeah, I mean, there was a lot to unpack in these industry reports, but definitely like the big thing was a return, a push back against the return to the office policies that you're seeing pop up everywhere.

7:24I mean, we just saw Grindr, which is the dating app company. They kind of mandated that employees come back to the office two days a week. And 45 % of the company resigned. They had 178 employees, 45 % just said, all right, if you're going to make us come in the office, we're just not coming back at all. And you're kind of seeing that across lots of companies. There was this Deloitte report that said if we had to go back to the office five days a week, 66 % of remote workers said they'd quit their jobs, which honestly I feel like that's low. Because if we just had 45 % of Grindr quit for two days a week, you'd expect the five-day-a-week crew numbers to be even higher.

8:05It does seem like there were other issues going on at Grindr. They were attempting to unionize and the company was pushing back. So that may have led to maybe a greater resignation than usual. But there's no surprise here that tech is the tech workers are declining in happiness the fastest out of any industry. And I think that's because the CEOs in that industry have done a complete U-turn on remote work in 2020 and 2021. It was like, yeah, you can work wherever you want. We're super remote friendly. We can all be super productive. And then they are completely changing their tune in 2022 and 2023.

8:39It's been this slow burn of being like, yeah, come back. OK, we want you to come back. all right, now you need to come back. And you see CEOs like Andy Jassy being, you know, stating flat out that if you don't want to come back to the office, then we don't want you to work here. And that may be a mechanism to also, you know, soft lay off some employees that they don't want coming back. So also from this HR study from Bamboo HR, there were some other nuggets and we got to see what are technically the happiest and unhappiest industries. The happiest industry was actually construction. And a lot of people were just pointing to the fact that ongoing work and high wages have just helped make that industry happier relative.

9:18And just working with your hands outside. Yeah, I don't know about that part. It's probably the pay and the, yeah, because I don't know. I mean, it's still a tough job. And then the unhappiest industries are education and healthcare. Both of those you can kind of posit why it would be the case. I mean, education, very low salaries, a lot of work. A lot of work. Same thing with health care, to be honest, and especially coming off the pandemic. Just burnout is a big issue, too. So that's the happiest and unhappiest industries. All right, moving on. I know we are both pretty hype for Walter Isaacson's biography of Elon Musk that hits bookstores next week.

9:57But excerpts from the book have already been leaking and they are juicier than a Georgia peach. According to an excerpt of the book obtained by CNN, last year Elon Musk secretly told engineers to shut off Starlink satellite communications near the Crimean coast to foil a Ukraine sneak attack on a Russian naval fleet. Musk was spooked by the prospect of Russia retaliating with nuclear weapons, telling Isaacson Starlink was not meant to be involved in wars. But Starlink has been very involved in the Ukraine war from almost the beginning. Its internet beaming satellites have provided vital communications infrastructure to Ukraine after Russia invaded and wiped out a lot of the country's connectivity.

10:35So when Musk ordered Starlink to be shut down, like he did in the case of the sneak attack last year, Ukraine's military gets completely discombobulated. It almost can't function without Elon's goodwill. So at a high level, this episode shows just how much power Musk has accumulated through SpaceX and Starlink to the point where U.S. military leaders consider him an unelected official. It's crazy to think about, but it's true that wars and the current geopolitical order might hinge on the whims of one meme-loving billionaire. I know. And I mean, this story kind of or this excerpt harkens back to the Ronan Farrow piece that was released earlier.

11:12This big investigative deep dive into Elon Musk and his relationship with the powers that be, the U.S. government. I mean, you have NASA giving major contracts to SpaceX to figure out how to better launch satellites. Then you have him kind of putting America's EV future on his back, especially with the charging stations. And then obviously you have the Starlink situation in Ukraine. And just to be clear, though, like the reason he was nervous about this Ukrainian attack was he thought in his personal opinion, based off his conversation with other Russian officials, that it would escalate into maybe nuclear war in Crimea.

11:47But again, like that's the alarming part is that it hinged on his opinion of the situation. And he's literally holding sway over what does and doesn't happen in this Ukrainian war. And a lot of people think he's kind of in Putin's pocket a little bit because he put out that peace plan that ceded a lot of territory to Russia. So this guy is just a huge power broker. Not only does he own SpaceX, Starlink, you know, Tesla and energy, the future of energy here. But he also owns Twitter or X now. And that's where a lot of governments used to communicate. And in the previous regime of Twitter, a lot of state-backed propaganda outlets from Russia, China and Iran were flagged as such and they were demoted on people's feeds.

12:30And he removed those. So now, you know, a Chinese propaganda arm, a Russian propaganda arm can can post a lot on Twitter and they'll get into your feed. So that was and the reason this is alarming is because Elon Musk is not elected by anybody. He has shares in Tesla and all of these other companies. So he's beholden to his business interests. And where does Tesla sell a lot of its vehicles? Where does it get subsidies to build plants is China. So this is why this is alarming the national security apparatus. Yeah. But honestly, though, some of what he's doing is at odds against some of his best interests in business.

13:06because one of the other excerpts from this book was that part of the reason why SpaceX is, or yeah, Starlink is active in Ukraine was SpaceX was just doing it on their own goodwill. They were footing the bill. And so SpaceX officials were trying to get the US government to pay for Starlink being up. And the president of SpaceX was really mad because he said he literally had$145 million check ready to hand it to me from the Pentagon. And Elon Musk tweeted, the hell with it. We'll just keep funding the Ukraine government for free. And so he'd undermine this deal. So it is this weird thing where the power he gets from being able to pull these strings is even superseding money-making from the companies that he owns.

13:50So it is an interesting thing to see for sure. All right, Neil, before we jump into the next story, we're gonna take a quick break.

13:59Tonight 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. I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere tonight on NBC.

14:32When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone, all protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. okay neil it's time for our friday segment stock of the week dog of the week where we bring you one stock that just landed the first ever quad axle and one stock that forgot to take its skate guards off as always we are just humble podcasters so please do not take any of this as financial advice neil you won the pre-show mario kart race so you're up first what's our stock of the week wow we went from winter olympics to video games there either way i love the opening okay my stock of the week is Soho House.

15:29Shares of the London-based membership club are up 12 % this week after its CEO revealed to Bloomberg that it's plotting a big expansion across the United States. What is Soho House? Well, I've only been allowed in twice, but it's an exclusive membership club that's geared towards creatives instead of buttoned up finance types. Very attractive people go there to eat, drink, socialize. And the one in Dumbo in Brooklyn has a pool that overlooks Manhattan. It's quite bougie and costs$4 ,900 a year. Soho House does have locations in major U.S. cities like New York City and Los Angeles, but its executives think there's lots of opportunity and wealthy people in other metros as well, like Portland, Oregon and Charleston, South Carolina.

16:10So it's planning on opening up spots there as well as for other cities. But to me, the most interesting part of Soho House's expansion is that it's part of this wave of companies that cut their teeth on the coast, and now they're attempting to conquer middle America. So Sweetgreen and Chipotle, two chains that originally catered to downtown office workers, are both planning expansions in smaller towns across the country. Sweetgreen is even adding salami and barbecue sauce to some of its folds. If you aren't convinced, it wants to expand its user base beyond yuppies in Flatiron. It's so interesting to me because Soho House, when it went public, didn't do very well.

16:45Their shares halved in their first year post-IPO, but now they're up 50 % since the beginning of this year. So clearly investors are kind of on board with this expansion plan. But to me, it's such an interesting and fine balance between you want to keep the mystique and the exclusiveness, but at the same time, you need to grow. You're a public company. And so I think the way Soho House navigates this is they keep this really chunky wait list. And so they have 95 ,000 people. So they can always point to that number and say, look it, we got 100 ,000 people who want to get in that we're denying right now.

17:16So I think that's how you balance if i'm the ceo of so house i go let's keep the wait list chunky but still keep opening these other locations that's my that's my playbook that's pretty good do you think we would get in if we applied i hope so i don't know that's it's always if we were the 95 000th and one yeah person it's like it preys on like your popularity like would i be popular enough i mean they're so it's pretty nice in there i gotta say yeah let's you've been twice i've never been so you're already ahead of the game gotta have some friends okay neil our dog of the week is manchester United.

17:47Yes, Manchester United, the Premier League football club, is a publicly traded company, and that company is not doing well. Shares of Man U are down nearly 15 % this week after reports that the club's owners, the U.S.-based Glazer family, won't go through with the sale of the team after all. So Ineos founder Jim Ratcliffe, who is Britain's richest man as well as a Qatari billionaire, had both been engaged in serious talks to buy the club from the Glazers, but but apparently neither has met the family's asking price of around$7.5 billion. Neil, the Glazers are one of the most hated families in English sports right now, as they've repeatedly classed with supporters over the years, pretty much since buying the club back in 2005.

18:28Fans never really got over the fact that they borrowed 500 million euros against the club in order to finance the deal, which plunged it into debt. And now 18 years later, there's still obviously a lot of tension in the relationship. I just love how angry English soccer fans get at their owners, and they stage these very intense protests, way more intense than what you saw last night at the U.S. Open. Toby, as a Man U fan, do you want the Glazers gone? Well, it's two sides of the coin because they've actually invested a ton of money in buying players. Whether those were the right players to buy is definitely up in the air.

18:59So they still are investing in the club, although the stadium's kind of getting a little rickety. So I want them out at this point because there's just too much tension and they often hold on to players who have bad attitudes because they don't want to spend more money on new players. So, yeah. And we're not doing that well on the pitch. We've lost two of our first four games. Not doing great. You know who's doing well is Liverpool. Oh, my God. And here's my stat for Liverpool. I saw this on Twitter yesterday. Since signing for Liverpool, Mohamed Salah has received more yellow cards from celebrating goals versus Manchester United at Anfield, Liverpool's home base, than Manchester United have scored goals there.

19:36Okay, that's a disgusting stat. Why did you have to do that to me on this Friday? Oh, my gosh. That's an incredible set. He is quite good. All right. Our second to last story. Remember that AI generated Drake song that went viral a few months ago? Well, it could win song of the year at the Grammys. The anonymous creator of the song Ghostwriter submitted it for a Grammy in both best rap song and song of the year. And in response, the CEO of the Recording Academy, Harvey Mason Jr., said it would be absolutely eligible because it was written by a human. As Morning Brew writer Molly put it in this morning's newsletter, it might be the biggest sign yet that mainstream music is entering its AI era.

20:15And Ghostwriter wants to take us there. Not satisfied with Grammy eligibility, the team behind the anonymous music creator just released a new AI-generated song mimicking the voices of Travis Scott and 21 Savage. And in a post below the release declared, the future of music is here. Artists now have the ability to let their voice work for them without lifting a finger. They told the rappers, if you're down to put it out, I will clearly label it as AI and I'll direct royalties to you. Respect either way. Yeah, I think it's really smart from Ghost Rider or the team behind Ghost Rider to align himself with the artists themselves.

20:51Because, again, this could feel like an existential threat to an artist by saying, hey, we're literally cloning your voice and replacing you. But he's kind of framing it as we're actually giving you more leverage. You can make money now without lifting a finger. you can get more output from less input, which is kind of the whole promise of AI. So I thought that was a really savvy move from Ghost Rider. And then it's also just, I've said this before and I'll say it again, but I would hate to be the people making the rules for the Grammy nominations because it's such a gray area. How much AI is too much AI?

21:24Obviously, you've had some Beatles songs come out with touched up voices of John Lennon. So you need, like, why would you deny a new Beatles song just because it has a little AI in it. So there's so many little different nuances to everyone, but I think it's smart that the Grammys are embracing AI. Yeah, I think they have to, and the guy, Harvey Mason Jr., he gets it, and he called up Ghostwriter. Ghostwriter has an incredible reputation right now. This team, it's a team behind it, is super savvy. They are doing things very thoughtfully, it seems. The song itself, I mean, I was listening to it this morning.

21:58It's really not bad. I think that's the thing. Like it's a good song. The technology has come to the point where you can produce viable songs. So the CEO of the recording Academy called up Ghostwriter and said, we need to talk. Like, I really want to hear what your thoughts are about AI and music. And Ghostwriter showed up in costume in disguise with a voice enhancer, a voice distorter. So completely played the part. And I think the whole mystique around this creator is definitely playing it up. But yeah, this is something that not only the Grammys are contending with, but record labels, too. And they want to protect our artist's IP.

22:35So we'll see how this shakes out. But it definitely seems like the AI era of music is here. The AI era of everything is here. And you're seeing that play out across the creative disciplines. I mean, it's a big sticking point in the actor and writer strike about what happens to their likeness, the actors likeness and the written works and all the intellectual copyright intellectual property copyright protections around these creative works so we'll see how it plays out but it would be crazy if this song won an award yeah i don't know if it will the problem is also it needs to have commercial viability that's one of the other planks of getting nominated or awarded a grammy is you have to be able to sell it and when this song originally came out it was on spotify youtube music, all of those, but they took it down.

23:18So now the new song that, what's his name? Travis Scott and 21 Savage. That Ghostwriter just released is just on the social media services. Still bangers probably won't win though. All right, Neil, for our final story, I want to talk about the most photographed restaurants in the US. Yelp released its annual report on where people were snapping away the most yesterday, and we have a repeat winner. For the sixth year in a row, Gordon Ramsay's Hell's Kitchen located on the Las Vegas Strip was the most photographed place to eat on Yelp. In total, four restaurants from Las Vegas clocked in in the top 25.

23:54New York came in with three, including the famous Cat's Delicatessen and Harry Potter New York. But it was California who topped the list with five restaurants in total. Some other takeaways from this list, Neil. Adela's Country Eatery in Hawaii was the highest reviewed and the only one on the list to get five stars from Yelp Eaters, while Gianni's, an Italian place in Miami, was the lowest rated at three and a half stars. Neil, any surprises? Have I been there? Not so, no, to Adela's? Anyway, no surprises. It's Vegas. You're supposed to take pictures. It's the whole point. It's not about substance.

24:30It's about the appearance of substance, but this Beef Wellington, right? It's all about the Beef Wellington. I went through their menu and thought about which would be the most photographed and i saw the sticky toffee pudding that would probably get the beef wellington obviously and then maybe the lobster risotto as well we should make the beef wellington i would do it on film because it's very famous and you get that cross section it's all about the cross section did you see the video of this chef did i show you the chef on one of gordon ramsey's reality shows he made a uh he made the beef wellington and he presents it to gordon ramsey gordon ramsey takes a bite so dramatic and was like said something like this was as good as I've made it and the guy just starts crying.