Brew Markets — "Discounts to Insure Self-Driving Cars + P&G's Premium Diaper"
Morning Brew | January 22, 2026
Host: Ann Berry

Episode Overview

This Brew Markets episode dissects the latest earnings and business moves from Procter & Gamble (P&G) and GE Aerospace, two titans of American industry, and covers key stories shaping the stock market landscape. The show’s main focuses are Lemonade’s innovative auto insurance partnership with Tesla’s semi-autonomous vehicles, P&G’s push into luxury diapers, and GE Aerospace’s continued strength, all with a practical eye on what these shifts mean for investors and consumers.

Key Discussion Points and Insights

1. Lemonade & Tesla: New Territory in Autonomous Car Insurance

• Lemonade’s Expansion:

  • Lemonade (Ticker: LMND, market cap $7+ billion), an insurer leveraging AI for personalized service, is now launching an auto insurance product targeting Tesla’s Full Self-Driving (FSD) users.
  • This new policy halves per-mile insurance rates for periods when a Tesla is in FSD mode versus human-driven.
  • Lemonade uses Tesla’s vehicle data to differentiate risk based on whether the car is under autonomous or human control, the version of the FSD software, and specific sensor precision for each model.

• Autonomy Distilled:

  • FSD is a supervised driving system, not full autonomy. Drivers must remain ready to take over at any moment.

• Rollout and Impact:

  • Launching in Arizona next week and Oregon shortly after.
  • Lemonade’s stock jumped over 14% on the announcement and is up more than 200% in the past year.
  • Half of new car insurance sales last quarter came from existing Lemonade customers—a sign of strong cross-sell and customer retention ("...getting its existing clients to take up new products reduces the pressure to spend more money to find new eyeballs..." - Ann Berry, 04:12).

• Wall Street Skepticism:

  • Despite strong growth and innovation, many analysts rated Lemonade as "hold" or "sell," citing a lofty valuation (trading at 9x revenue).

Notable Quote:
“Lemonade has tapped usage data from Tesla and piped it into the insurer's risk prediction models to distinguish patterns between autonomous and human driving, as well as to predict how risks change based on which version of the autonomous software is installed...”
— Ann Berry (02:13)

Timestamps:

• [00:32] Introduction to Lemonade & Tesla partnership
• [01:50] FSD explained and how Lemonade's insurance works
• [03:10] Customer acquisition insights
• [04:23] Analyst ratings and pressure

2. Procter & Gamble Earnings: Flat is the New Up, and Premium Diapers

• Earnings Recap:

  • Revenues: $22B (up 1% YoY), slightly below analyst estimates.
  • Earnings per share: $1.88 (beats by $0.02).
  • Gross profit: $11B (down slightly due to higher costs).

• Strategic Highlights:

  • Unit volume declined across many businesses, but price increases balanced out the numbers.
  • “Flat was sort of the new up for P&G in terms of the market, right? …the least bad outcome.” — Ann Berry (07:24)
  • Beauty (+4%) and healthcare (+3%) divisions grew; baby, feminine, and family care declined by 4%, in part due to China’s record low birthrates leading to lower diaper sales.

• Premiumization Trend:

  • To counter weak diaper demand, P&G is introducing silk fibers in its high-end Pampers Prestige line in certain markets, embracing the “luxury” diaper strategy.
  • CFO Andre Schulten cites differentiated price points and intense competition from store brands and private label (Costco’s Kirkland diapers highlighted as an example).

• Dividends & Shareholder Returns:

  • $2.5B returned in dividends last quarter; P&G boasts 135 years of uninterrupted dividends, and 69 consecutive years of increases.

Notable Quote:
“If there was the last place I would have thought of to find a luxury strategy, it would have been in diapers.”
— Ann Berry (09:28)

Timestamps:

• [06:00] News intro for P&G
• [06:56] Brands and financial performance recap
• [09:28] Premium diaper strategy
• [10:44] Competition from private label
• [11:38] Dividend history

3. GE Aerospace Earnings: Growth Soaring but Investors Want More

• Company Context:

  • GE split into three standalone firms in 2024—GE Healthcare, GE Vernova (energy), and GE Aerospace (jet engines for commercial/military use), with Aerospace retaining the “GE” ticker.

• Financial Performance:

  • Revenue: $13B (+18% YoY)
  • Adjusted EPS: $1.57 (+19% YoY)
  • Operating profit: $2.3B (+14% YoY)
  • Free cash flow: up 15%
  • Orders up a striking 74%

• Investor Reaction:

  • Despite a blockbuster run (shares from $81 to $325 over the past streak), “moderated” outlook for growth in 2026 spooked the market—shares dropped over 7%, indicating high expectations were already priced in.

• Aerospace Context:

  • Airplane manufacturing is rebounding; more planes ordered means future aftermarket revenue for maintenance and repair.
  • CEO Larry Culp: strong demand for parts and services is fueling growth, but don’t bet on the same pace next year.

Notable Quote:
“Just looking at the screen right now, down over 7% towards the end of today. Despite an initial positive reaction, it feels as though this one had been perhaps highly priced or this had been priced in and the market saying it was good, but it was not good enough.”
— Ann Berry (15:49)

Timestamps:

• [13:04] Context and recap of GE split
• [13:42] Earnings details
• [14:51] Industrials context and market streak
• [15:49] Market reaction and future outlook

4. Market Headlines & Industry Updates

• Spirit Airlines:
  • Spirit in talks with Castle Lake for a post-bankruptcy acquisition after failed mergers with Frontier and a blocked JetBlue deal. “If there’s one thing we’re learning in M&A these days, when competitors want to go after a target, they’re willing to come back to the negotiation table...” (19:20)
• Tesla & Robo-taxis:
  • Elon Musk announced Tesla is starting robo-taxi rides in Austin, without safety monitors onboard. Waymo also makes headlines for automation progress.
• Macroeconomic Data:
  • Personal Consumption Expenditures (PCE) price index: Inflation at 2.8%, above Fed’s 2% target but as expected.
• Oil & Venezuela:
  • Halliburton posts strong results; Venezuela seen as an opportunity, but U.S. Energy Secretary Chris Wright stresses the U.S. won’t provide security for oil ops in-country.

Timestamps:

• [18:56] Indices performance and quick headlines
• [19:20] Market context, Trump/trade update, Spirit Airlines
• [20:37] Tesla robo-taxis and Waymo
• [21:20] Halliburton, oilfield services, Venezuela risks

Notable Quotes & Moments

• Ann Berry on Lemonade’s strategic direction:
  “The fact that Lemonade is actually getting its existing clients to take up new products reduces the pressure to spend more money to find new eyeballs, and as a result provides cost advantage for its incremental sales and the profits that come with them.” (04:12)

• On market perspective:
  “Flat was sort of the new up for P&G in terms of the market, right? ...it was sort of the least bad outcome.” (07:24)

• On GE’s future:
  “Moderated did not land very well. The stock went on to drop... this one had been perhaps highly priced or this had been priced in and the market saying it was good, but it was not good enough.” (15:49)

• Personal moments:

  • Ann and John share nostalgia about having worked for NBC/GE, adding a human touch and generational connection. (16:53-17:50)

Section Timestamps at a Glance

• [00:32] Lemonade & Tesla insurance innovation
• [06:00] P&G earnings and premium diapers
• [13:04] GE Aerospace performance
• [18:56] Market wrap: indices, Spirit Airlines, headlines
• [20:37] Tesla robo-taxis, oil sector, Venezuela

Summary Takeaway:
This episode underscores how even staid blue-chips like P&G and GE are innovating to stay competitive, while upstarts like Lemonade carve out new market segments by marrying AI with industry data. Investors’ expectations remain high: “flat is the new up,” and even double-digit growth can disappoint if it isn’t accompanied by a confident outlook. Premiumization is the defensive strategy in consumer goods—even in diapers—while aerospace rides a cycle of renewed demand and aftermarket service revenue. Meanwhile, autonomous driving and the insurance it requires are moving from science fiction to mainstream market impact much faster than many expected.