Morning Brew Daily
Americans Won’t Quit... Their Jobs & Spotify Has First Profitable Year, Ever
Wed, 05 Feb 2025
Episode 512: Neal and Toby talk about why a strong job market is encouraging but also highlights the fact that Americans aren’t switching jobs as they did in previous years. Then, China reacts to Trump’s tariffs by imposing tariffs of their own. Also, a recap of some standout earnings performances from Palantir, Meta, and Spotify. Meanwhile, rising egg prices have forced some to dial back on their egg purchases, some are taking matters into their own hands by becoming amateur chicken farmers. Cluck on. Finally, a recap of the biggest headlines from the day. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Check out https://wise.com/business for more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. APY as of 1/16/25, offered by Public Investing, member FINRA/SIPC. Rate subject to change. *Terms and Conditions apply. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: How are Americans changing their job-hopping habits?
Then employment sections on LinkedIn might be looking a little thinner these days as job hopping gets rarer and rarer. It's Wednesday, February 5th. Let's ride. Neil, there's a saying my parents used to tell me, do as I say, not as I do. The AI company Anthropic is telling its prospective employees something similar.
Chapter 2: What is the irony in AI companies' hiring practices?
According to 404 Media, the company that runs one of the biggest AI assistants in the world. is asking potential applicants to agree that they won't use an AI assistant to aid in writing their applications.
While we encourage people to use AI systems during their role to help them work faster and more effectively, please do not use AI assistants during the application process, the application says. We also want to evaluate your non-AI assisted communication skills. Please indicate yes if you have read and agree. Neil, pretty ironic.
Very ironic, very funny. But what if Claude did write a cover letter for Anthropic Financial Times, asked Claude to do it? And I'm going to read a few excerpts and I want to tell everyone to ask you if you'd hire me. Dear Anthropic hiring team, when I first encountered Claude and learned about the philosophy behind its development, something clicked.
Here was a company that wasn't just chasing the next big AI breakthrough, but actually stopped to ask, how do we do this right? Yada, yada, yada. I'd love to join a team where getting it right matters more than getting it first. Let's talk about how I could contribute to Anthropic's mission.
I actually didn't hate that whatsoever. And I think you're right. If Anthropic succeeds at its goal of creating a chatbot that can mimic human, that is indistinguishable from the human, that it has achieved its goal. So it is like this Catch-22 situation that they find itself in. That is better than I could do. I know, Neil, you are absolutely hired. I think it was better.
You read my cover letter too, so you know that that is better than whatever I produced. Now a word from our sponsor, Wise Business. All right, Neil, I've got a confession.
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Chapter 3: Why is the US-China trade skirmish significant?
It also launched an antitrust investigation into Google and banned the export of some key minerals used in high-tech products. In all, though, it was a carefully calibrated response by Beijing, one designed to gently prod the bear, not poke it. The retaliatory tariffs apply to just $14 billion worth of American products, which is a fraction of the tariffs the US placed on Chinese goods.
It appears to be an attempt by Xi Jinping to show he can spar with Trump while acknowledging this is just the first volley in a much longer negotiation around trade and other disputes the two countries have. Still, while it won't have the impact of a potential North American trade war, China is the US's third largest trading partner And these two-way tariffs will have some impacts.
For instance, yesterday, Mattel said it was considering raising the price of Barbie and Hot Wheels toys to offset the tariffs. Forty percent of Mattel's products are sourced in China.
Right. It does seem like this response was very calculated because, you know, China wants to flex its muscles, say like, hey, we can also retaliate when we need to. But If you look at the goods that they're actually slapped these tariffs on, it's not going to affect U.S. trade relations with China as much as a much broader push would be.
For instance, I mean, some of these tariffs go on natural gas exports, but the U.S. exported 2.3% of its total natural gas to China in 2023. And then also some of them affect vehicles, but China imported less than 110,000 vehicles from the U.S. last year. So, again, mostly it is to, you know, make headlines, show that they are prepared to retaliate if the U.S., you know—
applies tariffs as they have, but they're not something that wants to, you know, totally remake global trade.
Right, because this is part of a much broader negotiation between the two countries. What's happening here is basically the U.S. and China are building the most powerful deck of cards that they have so that when they go into the casino... to have a card game, they can lay down the best hand possible for whatever concessions they might want from the other country.
They can say, OK, well, you want TikTok? Well, I want tariffs off of I want tariffs off of coal or I want I want export controls off of tech. So there are so many issues going on between these two countries, from the Panama Canal, which we talked about yesterday, to TikTok, to working on the Russia-Ukraine war, to trade as well.
So this is they're building the deck of cards so they can go into the negotiating room and
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Chapter 4: Which companies are thriving in the current market?
They look very competent when compared to the rest of Big Tech, the rest of the Magnificent Seven, who all went closed source. They're all trying to develop their own proprietary models. They think that open source is the way that you can innovate quicker.
Plus, also, Meta is huge in that their chatbot is going to be the most widely used chatbot just by virtue of its distribution, just by virtue of the fact that billions of people use Instagram, use Facebook. So It is sitting pretty on the AI race. It's continuing to plow money. They've earmarked $65 billion towards AI investments in 2025, and investors are loving it.
Finally, our last midweek stock of the week is Spotify. Spotify is an 18-year-old company able to vote and drink in most countries, and yet, despite its age, it had never once reported a profitable year until last year. Spotify posted its first full-year profit ever in 2024, showing that the finance side of the business is finally catching up to its global influence.
Spotify made big bet after big bet to build new product features like podcasts and e-books, which dragged on its profitability but set it up for success in the future. Tossed in some efforts over the past... two years to focus on efficiency and monetization, and you have a recipe for profitability that investors have been waiting for since the company went public in 2018.
Neil, this has been a company that was much maligned for plowing so much money into podcasts and this and that, but now it's all grown up and making money and popped 10% yesterday.
Yeah, I would just encourage people to think about when they open up Spotify now, are they listening to music or are they listening to a podcast? Are you listening to an audio? There are so many different ways to consume audio in the Spotify app. That is exactly what their strategy was set forth a few years ago, and they're executing on it because of
Many years ago, people were like, Spotify is just not going to be a good business. Every single time you stream something, they have to pay a royalty to the music business. And that is a bad business model because your costs grow as your users grow. You know, very few people thought that Spotify could square the circle and they absolutely have done.
The bad problem for the rest of us is that when this strategy has worked, it means that Spotify is going to raise prices because they did that last year for the first time in a long time. They saw very few defections. Not good to hear that. So that means that we probably will see another price hike in the future. Up next, Neil and I talk eggs. Attention investors, new and seasoned.
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Chapter 5: How did Spotify achieve its first profitable year?
That same reporter went to a nearby Costco, too, and found that they were out of everything except for quail eggs. So it really is becoming a shortage across the board. This outbreak hit grocery stores actually the hardest because a lot of the farms impacted by this wave of bird flu supplied the retail sector. So you are seeing it filter down through grocery stores now into restaurants as well.
So it is just crazy the prices that we're seeing. I mean, Showing up to a Whole Foods and seeing $12 for a dozen eggs, it is just very jarring right now. And the issue is that people still love eggs.
People are absolutely trying to find a low-cost protein source, but their main low-cost protein source is now getting more costly than ever, which is leading to just like these bare pictures of grocery stores that we're seeing kind of flood social media as people try to hoard and stock up on eggs.
And it's leading to people going in search of alternatives, not just restaurants substituting carton eggs with liquid eggs. But you've seen an uptick perhaps in people going to the farmer's market. And Morning Brew Slack blows up with people saying, hey, I got four dollars from the four dollar eggs from the farmer's market. Look at me. I'm so cool.
Also, we've seen an uptick and this has been a trend over the past few years. The number of people having a backyard chicken coop as a way to cope with the rising egg costs, we saw that rise during COVID and is still continued. It's very interesting if you are thinking about having an egg coop in your backyard. It's something I would consider, but the startup costs are quite high.
It can run you about $2,500. And make sure to check in with your local zoning board, too, because your town may not allow for a chicken coop in your backyard. Now, a few years ago, maybe it was a decade ago, in my town in western Massachusetts, there was a huge drama about someone trying to put chickens in their backyard. Their neighbors saying, absolutely no way. It went to the town board.
Who won? Who won? Who won? I don't remember. I'm guessing the chicken person did not win.
I absolutely have thought about raising chickens too because my previous roommates, we had one of those machines that can process food waste and turn it into chicken feed. So we're like, wait, we have chicken feed here. Now should we buy a chicken coop and raise chickens? We did not check with our zoning board, but we looked up the price of like a smart chicken coop. It was $15,000.
It's not worth it. it obviously you can get a cheaper one than that but it does I mean the grand point here is that it's usually even though you think you're saving money by raising chickens there's a lot of other costs that you're not thinking about and a lot of headaches that you're not thinking about as well but all the power to you if you do want to you know raise some chickens
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