Morning Brew Daily
Tariff Warnings Dominate Earnings & The Spring Housing Market Slumps
Fri, 25 Apr 2025
Episode 569: Neal and Kyle dive into what’s behind the bad start of spring housing as existing home sales sink. Then, CEOs on earnings calls across corporate America are warning about the effects of the trade war. Also, an ex-Columbia student banned for developing a controversial AI tool has raised $5.3M for the same tool. Meanwhile, Zyn is the Stock of the Week, and Alphabet is…also a Stock of the Week! 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. Visit https://planetoat.com/ to learn more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Why are CEOs mentioning tariffs on earnings calls?
Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Kyle Hagee. Today, why every CEO is mentioning the T-word on earnings calls.
And how the infamous Zin nicotine pouches are driving shareholder value. Today is Friday, April 25th. Let's ride.
Big thanks to Kyle for stepping in while Toby runs the London Marathon.
Yes, great to be here, Neil, and I run no marathon, so I'm always available when Toby's doing his athletic pursuits.
All right, a big shakeup in the global economy rankings. There is a new fourth largest economy in the world, according to new data from the IMF, after Japan slipped from the current four spot to fifth. Which country took its place? It's not a country at all, but a state. California is now the world's fourth biggest economy with a GDP of $4.1 trillion, topping Japan's $4.02 trillion.
California is now just behind Germany for the bronze medal, while the United States and China come in at one and two. California is indeed an economic juggernaut, serving as a global hub for the tech industry, entertainment, manufacturing... and agriculture. Kyle, this is definitely cause for a new Red Hot Chili Peppers album.
I mean, California, massive economy, also a beautiful state. Like, you have money and you look good. Like, come on, California, that's too much. Neil, I'm going to quiz you, though, because if people come to you for news, can you name the other top four and the five largest state economies in the U.S. ?
Number one is California. Let's just go the next biggest state, Texas. Boom. I think New York is going to be next. Boom. And then, okay. Oh, God. Pressure's on. I'm deciding between Florida and Illinois for this next one. I think, you know, Illinois doesn't have a whole lot out of Chicago, so I will go with Florida as the final one.
Neil is five for five, and you can now trust him on this podcast. Let's go. Minnesota, though, I do have to call them out. My home state only has half a trillion in GDP, so we're going to have to pump those numbers up. And now a word from our sponsor, Planet Oat. Neil, you know that one hoodie that's just softer than all the others? Oh, yeah. It doesn't matter how many you've got.
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Chapter 2: What is the current state of California's economy?
And now, when it was finally supposed to begin to thaw, another frost comes along.
Yeah, I mean, uncertainty on the consumer side is never good, obviously, for the housing market. There's this general fear that a recession might be coming. I've stopped buying my Starbucks personally, so Lord knows I would pause on a house. A real estate brokerage, Redfin, did this survey that I thought was really interesting. They found that about
Twenty five percent of respondents overall were canceling plans outright to make a major purchase due to the tariffs. And nearly four in 10 respondents said the tariff policy was making them less likely. So you have people canceling plans outright and people saying I'm less likely to do it. Even before the tariff announcement, consumer confidence was fading because of these recession fears.
A survey by Fannie Mae in March said that people concerned about losing their jobs in the next 12 months hit a record high. It was about one-third of consumers. And then with stock market volatility, a lot of people, how do you pay for a home? You might sell some of your stock or sell some of your Bitcoin. About 16% of homebuyers use financial assets to do a down payment.
When your stocks are down, you don't want to sell. So that is also putting pressure on this housing market. And again, there's a lot of uncertainty of when this will clear up.
Yeah. So one headwind that is not facing the housing market anymore is inventory, right? Maybe over the past few years, we've heard there's just no homes available for sale and that's driving up prices and leading to this frozen over housing market that we're seeing. Inventory is just so low. No one's leaving their houses. I can't even find a single house to buy because they just don't exist.
That is improving that situation. Nationally, There were 1.3 million homes for sale or under contract at the end of March, which was up 8% from February and up 20% from March 2024. So there certainly are more choices for buyers, and yet they're still balking at the high prices.
Interesting, too, because I think sellers are now in some markets having to make more concessions because buyers are so scared. They said that about 44 percent of purchases in the first quarter included a seller concession, according to Redfin. And in some markets such as Seattle, it was 71 percent of sellers were offering concessions.
So stay strong and maybe sellers will just, you know, do pay some of your closing costs, fix the roof for you, throw in a hot tub. I don't know. But they're going to have to bring more to the table if they want a buyer to jump in.
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