Morning Brew Daily
Canada Pulls US Liquor From Shelves & Can Fries Save Sweetgreen?
Fri, 07 Mar 2025
Episode 534: Neal and Toby chat about the jobs report set to come out Friday morning that should be able to paint a clearer picture of how the labor market is faring amid news of federal layoffs, government spending, and of course, tariffs. Then, the trade wars have spilled over in the alcohol section as Canada pulls American liquor off its shelves as Trump tariffs go into effect. Also, Intuitive Machines is attempting another moon landing but a toppled moon lander has put a damper on its mission. Meanwhile, Sweetgreen is adding fries to their menu and consulting firms are having to justify their work to the federal government. Finally, a roundup of the biggest headlines for the weekend! 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. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks. Investments focus in a particular sector, such as technology, are subject to greater risks and are more greatly impacted by market volatility, than more diversified investments. Invesco Distributors, Inc. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the key topics covered in this episode?
Good morning for your daily show. I'm Neil Freiman. And I'm Toby Howell. Today, the first jobs report is being released since Doge began its drive to slash the federal workforce.
Then a Jack and Coke in Canada is now just a Coke after Jack Daniels got caught in trade war crossfire. It's Friday, March 7th. Let's ride.
It's going to be the last Friday you try to beat the darkness when leaving work because daylight saving time starts this weekend at 2 a.m. On Sunday, clocks will spring forward, which means you will lose an hour of sleep, but also gain an extra hour of daylight in the evenings. For instance, here in New York City, the sun will set tonight at 555 p.m., but on Sunday it'll set at 657 p.m.
This is absolutely huge for lazy people like me who held out strong on changing their microwave clock since daylight saving time ended in November. I've been living an hour ahead of you all for months, but soon we'll be synced up again.
Living in the future. I was making a little pros and cons list to figure out how I felt about daylight savings time because I always get confused. For the pros, it's good for golf, great for evening picnics, great for people who never change their clocks. For cons, it's very bad for parents taking their kids to school in the morning, also tough for morning people in general.
So if your job is hosting a morning business news podcast, maybe not so great. So after weighing all of that, I realized I have no strong feelings, and thank goodness for auto-updating clocks. Now a word from our sponsor, Invesco QQQ. Neil, I've been thinking about efficiency lately. Oh, finally getting to inbox zero, are we?
Well, some company called Morning Brew keeps sending me newsletters, so that's not happening anytime soon. No, I'm talking about the Invesco QQQ ETF. Ah, the Swiss army knife of ETFs, efficient and easy to trade. I prefer to think of it as the Toby Howell of ETFs. Innovative, forward-looking, super smart, and it's over 25 years old. See, we're basically the same.
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Chapter 2: Why is the jobs report significant this month?
It's finally here at long last, the next Game of Thrones book. No, just kidding. It's the monthly jobs report due out this morning at 8.30 a.m. Eastern, giving us a key snapshot of America's employment situation in February. And while all jobs reports are big deals, this This one feels like a big freaking deal for a few reasons.
First, it is the first jobs report since President Trump and Doge have taken a chainsaw to the federal workforce in a bid to slash the size of the federal government. Second, a slew of recent surveys have raised alarms over slowing economic growth, prompting investors and analysts to up their bets on an upcoming recession and sell off stocks.
The jobs report is one of the first pieces of hard data that could calm those fears or jack them up even more. The hints we've been getting have not been pretty. In February, U.S. job cuts hit their highest level in almost five years, according to an analysis released yesterday from Challenger, Gray & Christmas.
Layoffs were up 245% from January and marked the highest total for the month of February since 2009. The firm said that more than one-third of the total layoffs were attributed to the headcount reduction efforts of Doge, totaling 62,000 job cuts across 17 agencies.
But, Dobie, the government jobs report due out in a couple of hours is the gold standard for providing the most detailed picture of the labor market in America. What should we be expecting?
Well, unfortunately, will these cuts show up in this jobs report? The answer is probably not. February's official jobs report. will not fully reflect these doge cuts that are coming through just due to timing. March and April are probably going to be the real test as these layoffs continue to filter in and these federal cutbacks do ripple throughout the economy.
They really haven't shown up in any official government data yet. The Labor Department said yesterday that the number of Americans filing for jobless benefits actually fell 21,000 to 221,000. for the week ending March 1st. So these are just lagging a little bit.
You'll probably see that unemployment rate stay pretty low, pretty solid at 4%, but that could change very fast because we just need to dive into this Challenger Grand Christmas report a little bit. Some of the percent increases in layoffs when it comes to government jobs are astounding. That 62,000 government job cut number represents a 41,311% increase from last year. So
we're in unprecedented territory when it comes to shedding jobs. Also, the nonprofits and the companies that rely on those federal contracts are shedding jobs now, too. So you do start to see just how big the ripple effects could be from these Doge cost-cutting efforts.
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Chapter 3: How is Canada responding to U.S. tariffs?
Canada is weaning itself off America's booze. It's not an intervention, but a counter move in the trade war between North American frenemies. Canadian provinces are yanking Jack Daniels, Kentucky bourbon, and California wine off store shelves in retaliation to Trump's 25% tariffs on Canadian imports. It's prohibition, but just for made in America drinks. Naturally, U.S.
liquor execs are losing their minds. The CEO of Jack Daniels Maker Brown Foreman called it, quote, worse than a tariff because while tariffs make things more expensive, this just straight up deletes their sales. Ontario alone carries 3,600 American alcohol products before Premier Doug Ford declared them, quote, done, gone.
This is not great news for Kentucky, where bourbon is a $9 billion industry supporting over 23,000 jobs. And while Brown Foreman insists it can shrug off the Canadian losses since they only make up about 1% of its total sales, things get dicey when you factor in the post-pandemic sales slump the industry was already going through. Turns out that international beef, Neil, does not
mixed very well with the spirits industry.
No, spirits and alcohol has long been a political football in trade wars, even if it doesn't account for a huge amount of sales. And, you know, Jack Daniels only does one percent of its total revenue in Canada.
It's not going to make a huge impact, but it is more symbolic and is one of the levers that governments can pull to show their displeasure with what's going on in terms of tariffs and trade wars, because
Canada government can't tip can't tell a random retailer to say take that product off your shelf But it does control the liquor stores And so it's using that particular tool that particular control that it does have it has leverage there And that's what it's using to kind of send a message Saying you should buy Canadian and don't buy anything from America because we have the power to take it off the shelves.
Yeah
Yeah, and even though Brown Form is trying to shrug it off a little bit, Canada is the U.S. 's largest export market for alcohol. Over $763 million worth of American wine, beer, spirits end up there, get sold there. And this is a very interconnected industry. So something that happens in Canada, too, will result in potentially job losses in the U.S.
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Chapter 4: What challenges did Intuitive Machines face during their moon landing?
Yesterday, Intuitive Machines made one small step for man and one giant leap for private companies landing spacecrafts on the moon. Maybe. Intuitive Machines' Athena lander was supposed to touch down near the moon's south pole, making it the second private company this week to pull off a lunar landing. But as the clock hit landing time, mission control was met with a confusing situation.
The craft didn't crash. Mission Control was receiving data from the spacecraft as it touched down, but it was clear that the spacecraft was not working quite as expected. NASA and Intuitive Machines cut their live stream without confirming whether the lander was fully operational, and a later press conference did nothing to clear things up.
If this all sounds familiar, it's because Athena's twin craft, Odysseus, did the same thing last year, landing successfully but then tipping over like a lunar Jenga tower. Engineers are now scrambling to figure out if Athena stayed upright or if history just repeated itself.
NASA is footing the bill for this mission as part of its Commercial Lunar Payload Services program, which hires private companies to deliver science experiments to the moon. Athena is carrying a drill to search for frozen water, a tiny rover to test a Nokia cell phone network, and a rocket-powered hopper designed to explore tricky terrain.
But it's also carrying the hopes and dreams of the Texas-based private company, whose stock cratered as a result of the craft's struggles to land near a lunar crater.
It's really hard to land on the moon. When you're trying to land back on Earth from going to space, Earth has an atmosphere which serves as a natural braking system. Apollo 11 re-entered Earth's atmosphere at almost 24,000 miles per hour. and splashed down at about 15 miles per hour. It was helped by parachutes and that drag of the atmosphere. That does not exist on the moon.
So intuitive machines had to slow down this lunar lander from 25,000 miles per hour to 6 miles per hour using no humans and just jet engines. That is hard. Firefly pulled it off. It has not exactly pulled it off. It hasn't really stuck the landing like Simone Biles in space.
two different attempts, but it just shows how hard it is to land on the moon with a robotic lunar lander in the absence of atmosphere. It's not like it's rocket science, Neil.
Actually, wait, in this case, it actually is. But you did mention the Firefly spacecraft. They have this little rivalry going. They're both Texas-based companies. They're both private companies pursuing moon landing missions. And it just so happened that they did them within the same calendar week. Firefly's landing on Sunday was deemed successful.
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Chapter 5: How does the design of lunar landers affect their success?
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Neil, you've had the chance to work with plenty of leaders in your career. What traits do you think are most important?
In my experience, a few things stand out like leading by example, taking risks, and being passionate.
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Explore the Range Rover Sport at rangerover.com slash US slash sport. That's rangerover.com slash US slash sport. It's Friday, and you know what that means. Pushing off emails and Stock of the Week, Dog of the Week, the segment where Toby and I pick one stock that landed on the moon and another that can't stay on its legs.
Toby, you won the pre-show burping the ABC's competition, so you get to go first. Very gassy over here.
For my Stock of the Week, it built its brand on kale and quinoa. but now it's making a play in the French fry game. Sweetgreen, the fast casual salad chain, just introduced Ripple Fries, an air fried, avocado oil coated take on French fries that are supposed to taste great and not weigh you down with a metric ton of grease. And Wall Street is digging it so far.
Shares popped 5% this week after the company unveiled the fries. making a rare win for a stock that's been on a 34% slide since early February. On paper, this move makes sense. Sweetgreen has been trying to break out of the $18 salad box for years now, rolling out dinner-friendly protein plates in 2023 and adding steak permanently to the menu in 2024.
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