What can the Preakness Stakes tell us about the economy?

Summary

Marketplace Morning Report: What Can the Preakness Stakes Tell Us About the Economy?

Release Date: June 12, 2025
Host: Marketplace (David Brancaccio)

---

1. Introduction and Overview

In this episode of the Marketplace Morning Report, host David Brancaccio delves into the intersection of major sporting events and economic indicators, using the Preakness Stakes as a lens to examine broader economic trends. The discussion weaves through international defense deals, economic contractions, child labor statistics, and the impact of political policies on consumer behavior.

2. International Defense Agreements Under Scrutiny

Nick Qureshi opens the segment by reporting on the United States' ongoing review of a multi-billion-dollar submarine deal with the UK and Australia under the Aukus pact. This trilateral agreement, initiated in 2021, aims to bolster defense capabilities against China by providing Australia with its first nuclear-powered submarines.

Key Points:

• Alignment with U.S. Policies: Washington is reassessing the project to ensure it aligns with President Trump's "America First" agenda. (00:48)
• Defense Spending Pressures: Both the UK and Australia face pressure from the White House to increase their military expenditures to 3% of their GDP. While the UK has been more accommodating, Australia commits to raising its defense budget without matching the UK's extent. (01:57)
• Strategic Importance: The UK emphasizes the pact as a "landmark security and defense partnership" crucial for strategic alliances. (02:43)

Quotes:

• UK Defence Spokesperson: “This is a landmark security and defence partnership with two of the UK's closest allies.” (02:43)

3. Economic Indicators: A Mixed Bag

The conversation transitions to various economic indicators impacting global markets:

• British Economy: Experienced a contraction of 0.3% in April, exceeding analyst predictions, following a 0.7% growth in the first quarter of the year. (02:50)
• Oil Prices: Despite a surge influenced by geopolitical tensions—specifically, President Trump's announcement of repositioning US personnel from Iraq amid heightened Iran tensions—oil prices have largely stabilized. (02:50)
• Japanese Market: Notably, Toyota's chairman has been re-elected against a backdrop of a substantial $33 billion buyout bid, indicating resilience in key Asian markets. (02:50)

4. Child Labor: A Persistent Global Challenge

Max Horbury reports on unsettling United Nations statistics revealing that approximately 138 million children worldwide are engaged in labor, defying global initiatives aimed at eradication.

Key Points:

• Prevalence: One in every twelve children, equating to nearly the entire population of Russia, is involved in labor between the ages of 5 and 17. (03:34)
• Health Risks: About 40% of these children work in hazardous conditions, including mines, factories, and agricultural fields. (03:34)
• Regional Impact: Sub-Saharan Africa holds the highest number of child laborers, whereas the Asia Pacific region has seen the most progress in reducing these numbers. (03:34)
• Future Projections: Current efforts are insufficient, projecting that it may take centuries to eliminate child labor entirely. (04:13)

Quotes:

• Max Horbury: “It will take hundreds of years before the world is free of child labor.” (04:13)

5. The Preakness Stakes: A Microcosm of Economic Sentiments

A focal point of the episode is the Preakness Stakes in Baltimore, analyzed by Brandon Drennan to gauge economic sentiments amidst President Trump's volatile economic policies.

Key Points:

• Event Overview: The Preakness Stakes, part of the Triple Crown, showcases Americana with its traditional fare and vibrant atmosphere. This year saw attendance decline to 60,000 from 131,000 in 2019, though wagering reached record highs. (04:40)
• Economic Behavior: An increase in betting activity is interpreted as a response to market instability, with individuals seeking alternative avenues for potentially rapid financial gains. (05:59)
• Expert Insight: Professor Justin Balthrop from the University of Kansas links the uptick in gambling to economic uncertainty, suggesting that people are looking for "shortcuts to be able to increase their wealth." (06:10)

Quotes:

• Professor Justin Balthrop: “The uptick in betting reflects the market instability.” (06:10)
• Host: “Sports betting is really an interesting avenue for them to at least potentially do that.” (06:33)

Additional Observations:

• Cultural Significance: Despite lower attendance, the event remains a symbol of economic and cultural resilience, blending tradition with modern economic behaviors.
• Infrastructure Changes: The historic Pimlico Racecourse, home to the Preakness for over a century, is slated for a half-billion-dollar redevelopment, signaling significant economic investments and potential challenges ahead. (06:33)

6. Conclusion and Market Outlook

The episode concludes by tying the sentiments observed at the Preakness Stakes to broader market trends influenced by President Trump's economic policies. The interplay between traditional economic indicators and consumer behavior at events like the Preakness provides a nuanced understanding of the current economic landscape.

---

Notable Quotes Summary

• UK Defence Spokesperson: “This is a landmark security and defence partnership with two of the UK's closest allies.” (02:43)
• Max Horbury: “It will take hundreds of years before the world is free of child labor.” (04:13)
• Professor Justin Balthrop: “The uptick in betting reflects the market instability.” (06:10)
• Host: “Sports betting is really an interesting avenue for them to at least potentially do that.” (06:33)

---

Final Thoughts

This episode of the Marketplace Morning Report adeptly connects the dots between international defense strategies, economic fluctuations, social issues like child labor, and consumer behaviors illustrated through the Preakness Stakes. By doing so, it offers listeners a comprehensive view of how various sectors and events reflect and influence the overarching economic climate.

For more insights and detailed reporting, visit Marketplace.org.

Transcript

[Host]

Hey there and thanks for listening. We want to know more about our audience. Stick around at the end of this episode to hear about how you can help, provide feedback and have a chance to walk away with a $75 gift card.

[Oregon Lottery Representative]

In the summer. All of Oregon is our playground thanks to our incredible park system. That's why it's so cool that Oregon Lottery gameplay like video lottery or cash pop helps support tons of parks projects statewide like accessible trails at Silver Falls State park or upgrades to your favorite dog park in Newburgh. It's just one way a little lottery play for many Oregonians can add up to a lot of good the Oregon Lottery. Together we do good things. Lottery games are based on chance and should be played for entertainment only. Must be 18 or older to play.

[Nick Qureshi]

Australia and Britain Downplay a Review of a Multi Billion Dollar Submarine Deal Live from the UK this is the Marketplace Morning Report from the BBC World Service. Hello, I'm Nick Qureshi in for Liana Byrne. The United States is reviewing its multi billion dollar submarine deal with the UK and Australia. Under the Aukus pact, Australia would get its first nuclear powered submarines from the us. Washington officials told the BBC they wanted to ensure the project was aligned with President Trump's America first agenda. In Singapore, the BBC's Katie Silver can tell us more. Hi Katie.

[Katie Silver]

Hi there, Nick.

[Nick Qureshi]

As it stands right now, what are the terms of this deal?

[Katie Silver]

Sure, so it's a trilateral pact between the us, UK and Australia, basically believed to be aimed at countering China. Under it, Australia would get its first nuclear power subs from the US and then the allies would create a new fleet by sharing their cutting edge technology. Now the agreement, which was signed back in 2021, was obviously signed under three different governments. All three countries have since had elections and it's worth a quarter of a trillion dollars.

[Nick Qureshi]

How are Australia and the UK reacting to these possible changes?

[Katie Silver]

Both countries have been facing pressure from the White House to increase their military spending, something that we've seen the UK agree to do more so than Australia. The US wants its allies to be spending about 3% of their GDP on defence as soon as possible. Australia says it will be lifting funding, but not by that same extent. We're also hearing from Australia's Defence Minister saying that if you look geographically on a map, for example, you can see why Australia needs these long range subs. In terms of the UK's response, they similarly say that it's understandable that a new administration would look at the deal just as the UK did last year, but they have called it. This is, to quote a UK Defence spokesperson, a landmark security and defence partnership with two of the of the UK's closest allies. And they do say that it's very strategically important in terms of the partnership there.

[Nick Qureshi]

Katie, thanks for joining us on Marketplace.

[Katie Silver]

Thanks for having me.

[Nick Qureshi]

All right, let's do some numbers. The British economy contracted 0.3% in April, a steeper drop than analysts predicted. That's after growing by 0.7% across the first three months of the year. Oil prices have slipped but held most of Wednesday's surge of between 4 and 5% after Donald Trump said some US personnel were being moved from Iraq due to heightened US Iran tensions. And in Japan, Toyota's chairman has been re elected against the backdrop of a $33 billion buyout bid. The United nations says there are nearly 138 million children working worldwide. That's despite an aim to end child labour. The BBC's Max Horbury reports more than.

[Max Horbury]

One in every 12 children works. This represents, the United nations say, an improvement, but it still means that 138 million children aged between 5 and 17 work 8, equivalent almost to the entire population of Russia. Nearly 40% of those children have been risking their health working in mines, factories or fields. Sub Saharan Africa has the highest number of child laborers, while most progress has been made in the Asia Pacific region. There had been an aim to bring the global number down to zero by 2025, but at the current rate, it will take hundreds of years before the world is free of child labor.

[Nick Qureshi]

Max Horbury, now President Trump's economic policies have rattled markets and sent consumer confidence to record lows. Despite his promise to rebalance the economy, few corners of the American market have been spared from fast food chains to high profile horse racing events. The BBC's Brandon Drennan went to the Preakness Stakes in Baltimore, part of the Triple Crown race series, to check the mood.

[Brandon Drennan]

The Preakness Stakes shows off all things Americana. They're hot dog, hamburgers, french fries. Punchers have been coming to Preakness Stakes since 1873. Whether it's testing the limits of how much color a single outfit can display or how much money can be won or lost in a matter of seconds, it's wild, it's glamorous and it's expensive. Ticket costs this year range from roughly $100 to over 4,000. There are multiple races on the day, but the main event is the battle of the Thoroughbreds, racing to win the Preakness title. In recent years, average attendance at horse racing events has been shrinking. Roughly 60,000 attended this year's Preakness Stakes, down from the 131,000 that attended in 2019. Attendance may be lower, but wagering at these races has been record breaking.

[Oregon Lottery Representative]

This is one everybody came for right here.

[Max Horbury]

Trainers, horses, owners and fans.

[Brandon Drennan]

Who you betting on?

[Oregon Lottery Representative]

They want to go with American Promise. D Wayne Lucas.

[Brandon Drennan]

Yes, I bet it across the board, so I got second and third place. So I got some of my money back.

[Katie Silver]

You know my case, 50, 60, $100.

[Brandon Drennan]

It'S not that much, right? Professor Justin Balthrop from the University of Kansas studies human behavior and gambling. He says the uptick in betting reflects the market instability.

[Host]

People are looking for shortcuts to be able to increase their wealth or the money that they make. You know, sports betting is really an interesting avenue for them to at least potentially do that. It's very hard to find a traditional stock market type investment where you can even have any remote chance of doubling or tripling your money in a single day, which is what many sports bets are seeking to do.

[Brandon Drennan]

Like the alcohol, money at this year's Preakness Stakes seemed to be free flowing. The mood was celebratory. But for some, it was also a bit somber. The historic Pimlico Racecourse that Preakness has called home for over a century will be demolished. A half a billion dollar facility will be erected in its place. And it's here that the economic uncertainty really begins to rear its head. State officials responsible for the rebuild told the BBC they are bracing for the rough economic road ahead, expecting costs to go up. In Baltimore, I'm the BBC's Brandon Drennan for Marketplace.

[Nick Qureshi]

And in the UK I'm Nick Qureshi with the Marketplace morning report from the BBC World Service. Thanks for your company.

[Host]

Really quick, before you go, please complete a short anonymous survey by going to marketplace.org survey. It should only take about 10 minutes. And as a token of our appreciation, you can enter your name to win a $75 gift card. When you've completed the survey, you do all of us at Marketplace a huge favor by filling it.