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- [00:02]
A
Good morning, Brew Daily Show. I'm Neal Freyman.
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And I'm Toby Howell.
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Today, chaos at the checkout counter as retailers run out of pennies.
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Then Apple and Amazon completed the big tech earnings slate. Who popped and who flopped? It's Friday, October 31st. Let's ride.
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A
Happy Friday and Happy Halloween. It looks like this town is big enough for the two of us because I am dressed as Space Ranger Buzz Lightyear. And to There's a snake in my boot. You guessed it, Woody. There's been an intergalactic emergency that I've been called upon to address, but somehow crash landed in a podcast studio with a cowboy sitting next to me and absolutely no signs of intelligent life anywhere.
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You are a toy, Neil to White Toy. I will say there was some debate in the office yesterday as to who was going to be Woody and who is going to be Buzz. So I am curious what you all think. Did we end up in the right costumes? And is Neil giving delusional intergalactic Space Ranger with no sense of reality? And am I giving insecure cowboy nervous about losing Andy's love? Let us know in the comments. We'll post a picture on our Instagram as well so you can weigh in and check out the fits there.
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- [01:25]
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- [01:27]
A
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With over 106 million monthly passionate and engaged viewers, this digital level precision is uniquely ownable, helping brands reach the right people in the right moments and at scale. So what's on Hulu today? Your brand, that's what.
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Learn more at disney campaign manager.com that's disney campaignmanager.com well, one day after Google raked in $100 billion in one quarter, Apple joined the triple digit billions Club, bringing in 103 billion in its fiscal Q4, about 8% higher than a year ago. The iPhone put the team on its back again, showing sales growth for a second straight quarter. After years of stagnation, sales rose 6%. But Apple is projecting an even rosier 10 to 12% growth in the next quarter, nearly double what Wall street was expecting as people are upgrading to the iPhone 17 model in droves. But this is not an early career. Lebron on the cav situation. The iPhone does have help these days, mostly from the services division, which has been growing like a weed. Apple's services division, which includes app store commission subscriptions and the $20 billion annual payment for Google to remain Safari's default search engine, surpassed $100 billion in annual revenue for the first time ever. But things weren't all hunky dory for investors. With sales in China flashing warning signs, revenue in the region fell by half a billion dollars compared to last year. Neal? Definitely a solid quarter with an assist from the iPhone 17 release. Kind of a weird stock reaction though. The Stock initially fell 4% in after hours trading as investors digested the China performance before quickly reversing and jumping 3% into the green. Because who knows why, Honestly?
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Well, I think it's because Tim Cook did an interview and he said the iPhone demand for the iPhone 17 family was off the charts. And we knew this coming into this earnings report. There was other reports that had come out previously to this from third parties that said that people were loving the iPhone 17. They were absolutely gobbling it up. Consumer intelligence research partners, which is an analyst firm, said that there is great interest in the pro and pro max models, While the new iPhone 17 air model showed virtually no sign of traction. So I guess people don't care about the this air, this very lightweight device that Apple unveiled. But the pro and pro max models are selling like hotcakes. And it's a start of a new, what they call a super cycle for people upgrading their iPhones, which they had previously done in the early days of COVID in 2020 and 2021. They're looking at their phones, little crack skiing there, a slow moving apps over there and they're like, okay, it's time to upgrade to a new iPhone, whether they have, whether it has, you know, whiz bang AI features or not. Because clearly there was no huge AI pull here because Apple is still far behind in the air race. It just didn't seem to matter to consumers.
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They kind of said the magic letters a few times. They say they expect to increase their capex and AI investment, which is literally what every single big tech firm just said. Apple is doing it on a much smaller scale than the multibillion dollars that their counterparts are outlaying. But Apple has also said Tim Cook said that they're open to pursuing M and A. That's been something floating around the rumor mill for so long now. Is Apple going to make a big splash and buy up one of these hot air startups to try to get their neck in the in front of competitors in the air race? And Tim Cook didn't shut the door on that. Say hey, if a good deal arises, we are absolutely interested in that. You and then the final thing we should talk about with Apple is tariffs. Cook said that they expect a $1.4 billion tariff hit that is actually taking into account the decrease that just happened from the Xi and Trump meeting. 20% tariff down to 10%. So it's still $1.4 billion but kind of music to investors ears in a way because you are seeing tariffs start to head in a lower direction when it comes to China. Last up on the big tech earnings slate, we have a laggard of the magnificent seven so far this year. Amazon. Entering today it had year to date gains of about 5% with shares missing out on the frenzy that has buoyed its counterparts. But it channeled its inner MJ and took that personally, posting a blowout quarter to stick it to all the haters. Remember when Apple and Google cross $100 billion revenue threshold? Amazon saw sales for the period rise 13% to $180 billion. Most of its profit though came not from your toilet paper orders, but from its division, which saw revenue rise 20% in the period as it looks to keep its nose in front of fast growing rivals, Alphabet and Microsoft CEO Andy Jassy said US was growing at a pace we haven't seen since 2022. He also called out particularly strong demand for its AI offerings. Despite running the world's largest cloud business by revenue, the Amazon has been largely shunned by investors who see it as losing ground to those nipping at its heels. But Jassy teased some unannounced deals worth more than all the new deals in its third quarter. Neil the stock jumped 13% in after hours trading. Looks like it's got some pep back in its step.
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Amazon is humming on all cylinders. People are continuing to spend on its marketplace, so strong consumer spending means more people shopping on Amazon. So so many of it. So much of its sales come from that E commerce platform and that is doing really well. It's building a lot of smaller warehouses closer to where people live because its bottom line is that when we put warehouses closer to where people live and they get faster delivery, that just causes them to shop more. So if you look at something and it says it's going to be delivered later today or tomorrow, you are much more likely to buy that than if it's going to come to your doorstep in two or three days. So that is what Amazon is investing in in the E commerce front. But the headline here, the reason it jumped 13%, the stock jumped 13%. Is the cloud the strongest growth growth in almost three years. And a lot of investors had thought AWS was so big that it was, you know, it had almost plateaued and it wasn't capturing the market share from all of this air spending. Well, guess looks like it is. There was a sales jump of 20%. Huge margins for the business. And so Amazon is back on the front foot.
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Yeah, it's interesting that it was almost a narrative that Amazon was fighting here rather than actual business reality, because, yeah, it did seem like it had so much of the market, it expanded so big that it wasn't growing anymore. But. And he just is like, actually the exact opposite problem is happening. We're having capacity issues. This is what all, you know, the big hyperscalers are saying that we don't have enough data centers to bring online to support this AI push. And so yesterday Amazon announced that they have this new project, Project Rainier, one of its biggest data center initiatives, is finally up and running and operational. So some of that supply crunch may be starting to change here. So maybe it was kind of a narrative shift as well, saying, actually we are dealing with too much demand here. We are going to still grow as long as we can bring this capacity online.
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A
I remember back in February when Trump killed the penny and everyone rejoiced. Well, the hangover has arrived because this is starting to cause chaos at retailers. Since late summer, you might have noticed signs at your local store pleading with customers to pay an exact change because their registers are totally cleaned out of pennies. After President Trump ordered the Mint to stop issuing new pennies in February because they cost 3.7 cents to make, but are only worth one, new pennies were shipped out to banks in August. As those coins made their way through the economy and ultimately to people's coin stash at home, retailers say they're not able to get their hands on enough pennies to produce exact change. Without pennies to hand to customers, some stores are rounding down, but that can become costly. The Midwest convenience store chain Quick Trip said it's begun rounding down every cash transaction to the nearest nickel, which is going to cost it $3 million this year. Others are trying more creative tactics to refill their penny coffers sheets. The pride of Western Penns ran a brief promotion that gave customers a free soda if they brought in 100 pennies. Toby Retail and banking industry group say they are happy with the decision to stop producing the penny, but they're also frustrated that it happens so suddenly and without any support or guidance from the government.
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Yeah, it's so interesting to think about these retailers and banks rationing out pennies. They've become this scarce resource, which is ironic because so many pennies are produced each year. I mean, just last year they issued penny 3.2 billion pennies. Where do all those pennies goes? They just don't stay in circulation. As they said, they mostly end up in couch cushions. They end up in coin jars. So it is a supply that you have to replenish every single year. And since, you know, the government has said we're not going to make them going forward, you are seeing these penny crunches. It is fascinating. In certain states, it is illegal to round up in transactions. So which is why you're seeing, you know, the quick trips of the world start to round down, which does have a meaningful impact because, you know, a few cents here over tens of thousands, hundreds of thousands of transactions, that does add up to the bottom line. So I think the big thing here, people are pushing for clarity. We just want to know what to do. Can we go up to the nickel? Can we go down to the nickel? Just tell us some guidance.
- [10:49]
A
Right. So the convenience store lobby and the banking lobby is pushing for congress to pass a law that would allow them to round to the nearest nickel so they don't have to round down because that would. That opens up a whole host of legal issues. So they are throwing their weight behind this law called the common sense act, which calls for transactions to be rounded to the nearest nickel, up or down. So they just have some clarity on this issue because they are running out of pennies. And if you go around to your story, you might see it. There's 103 Krogers in the Cincinnati, Dayton area that put up signs that says the U.S. treasury has stopped production of pennies, which is now impacting supply. If using cash repayment, please consider providing exact change. The last time retailers had to put up these kind of signs was during COVID when the Fed had trouble distributing new pennies and new coins all across the United States. So, you know, shades of COVID here, where retailers are just running out of coins, specifically the pennies, and they're going to have to pinch them. It's Friday, so you know what that means. Stock of the Week Dog of the Week. The segment where Toby and I pick one stock that secured the treat and another that got tricked. I won the pre show Evil Laugh contest, so I get to go first. And my stock of the week is Suno, the AI generated music startup that seems to be striking a chord with people. The information reported that Suno is generating around $150 billion in annual recurring revenue from subscriptions quadruple its sales from a year ago. And a separate report revealed that the company is looking to raise $100 million at a valuation of 2 billion. It shows that AI music is catching on in a big way, a development that some celebrate as the democratization of music production and others fear as the demise of music itself. At a basic level, Suno works like this. You type in a prompt and it'll create a song based on your description. So if you were to, say, write a bubbly pop song about an emotionally immature band and include lots of innuendo, it'll probably spit out something that sounds a lot like Sabrina Carpenter. The possibilities are infinite, but that's soon a one to one. And in the past year, the company has added more sophisticated features that have attracted paying users who shell out up to 30 bucks a month to access them. With their tremendous growth, Suno and its fierce rival Udo have caught the attention of the $20 billion music streaming industry. The three big players there, Universal, Sony and Warner, sued them last year over copyright infringement, accusing the startups of stealing songs to train their models. But at the same time, the music giants want to partner with the upstarts because they're not dumb and no AI is coming to disrupt them. Bottom line, Toby, Suno is one of the few AI consumer apps to hit.
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The mainstream, and I played around with it a lot yesterday as a lot of people in the office heard. I am not musically inclined. I am more of a vibes guy, and I toss in a song whose lyrics I kind of been noodling on for a while and it gave and gave the vibe I want. It's a banger. It is a banger. I've been playing it nonstop. I was genuinely shocked at how little effort I put in and how much I got out of it. But one of the reasons why it's sticking around and it's being lauded as, you know, the first AI consumer app outside of ChatGPT to actually have a sticky user base is it is a sticky product to use as soon as you make one song, you definitely want to make another. And then it also has feature depth. Whereas a lot of these AI tools maybe like a headshot generator, it's a nice gimmick, but it's a one time thing. This, if you are a musician, if you do have musical ability, you can start to tweak the hook. You can get, dive deeper into the premium features. I had no idea what to do with them and I'm still just in that free tier. But that is the reason why you're seeing such growth and such revenue from this business is because it does have a layer that you can go deeper than just that initial novelty.
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You remind me a lot of Oliver, Oliver McCann, who is a British music creator. He told the Associated Press, I have no musical talent at all. I can't sing, I can't play instruments, and I have no musical background at all. Well, recently he became the first music creator to sign a contract with a record label because his tracks racked up millions and millions of streams. So this to its supporters like, and this does have some supporters in the music industry. Imogen Heat will I am. These folks, like really love new tools to be able to play with. And they say this is opening up a new toolbox for people to be able to create music. They say this is why this is caught on and this is why people are paying up 30 bucks a month to have this, this company reach $150 million in revenue. Of course, there's a ton of backlash as well from the music industry, from a bunch of artists who say this is going to lead to basically infinite slop. You know, Toby, not every, not every music creator can create, you know, iconic hit like you can. And so this is going to be flooding our streaming services. Deezer. We don't know how much AI music really is out there because Spotify and other streaming services don't disclose how much AI music you know, is on their platforms. But there is one, Deezer, which is a streaming service. It estimates that 18% of songs uploaded to its platform every day are purely AI generated.
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It makes me want to test this out. It makes me want to dive deeper into, you know, and see if I could start attracting listeners on Spotify, because I don't know how you would know it's AI. I mean, maybe someone with a very trained ear could. But just do normal people like you and me, I don't know. You have actually a pretty trained ear. I want to run a test and see if, like, can I start to build a following on Spotify? Is it easy to do this just because creating the songs themselves is so easy, so fascinating, you know, paradigm that we're entering into. If you are a musician, I would love to hear people who are in the music industry weigh in on this as well. All right, we're going to take a quick break and come back with our dog of the week.
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You know that saying, more money, more problems? Toby of course.
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Why do you think my life is so chaotic?
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Sure. Well, with startups it's more like more money, more security. Big enterprise deals usually come with even bigger security and compliance requirements.
- [16:37]
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Yeah, the right kind of security posture doesn't just protect you, it can actually make or break a deal. Thankfully, Vanta's AI and automation makes it easy for you to get big deal ready in days.
- [16:48]
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They automate your compliance and continuously monitor your programs so future deals never get blocked. Plus, Vanta scales with your company so you'll always have the support you need, no matter what growth phase you're in.
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Morning Brew Daily listeners can get $1,000 off@vanta.com Morning Brew that's vanta.com Morning Brew Neil, would you rather have surgery performed by a junior resident or a department head?
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Is that even a question? Give me the doctor with the most practiced hands, please.
- [17:19]
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Customers of Quest software have the same outlook. Quest has been a global leader in data management, cybersecurity and platform modernization for decades. So now that the AI transformation is here, companies are turning to their assistance established expertise for support.
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Quest approach to AI success is based on three priorities. Trusted AI ready data secure identities and platform modernization that scales with AI demand.
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And they have thousands of customers around the world, including more than 90% of the Fortune 500. So on top of Quest's expansive product suite, they use insights from those relationships to inform how companies build AI readiness and success.
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With something as complex and significant as AI, you're probably going to want to have a seasoned pro in the room with you. Head to quest.com/brew to get started. That's quest.com/brew my dog of the week.
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Is obesity because it's trending down the glp. One class of drugs like Ozempic and Manjaro have helped shrink waistlines and grow the bottom line of pharma companies since their release. And now their effects are starting to show up in a national health data as well. According to a new survey by the Gallup National Health and well Being Index, the share of obese U.S. adults fell to 37% in 2025, down from a high of nearly 40% in 2022, that translates to roughly 7.6 million fewer obese adults in just three years. While diet and exercise deserve their flowers, injectable weight loss drugs are the key variable here. With 12.4% of US adults saying that they are users, more than double the share of last year, officials see this moment as a potential public health turning point. If obesity rates continue to decline at this pace, it would reshape the country's long term health profile faster than any one single policy or wellness trend in the last decade. It's also boosting profits for the companies slinging this class of drugs, with Eli Lilly reporting third quarter earnings yesterday, that blew past estimates on the back of strong sales for its blockbuster drugs, Zeppelin and Manjaro. Neal, these drugs have been out on the market long enough that we're seeing their impact on a national scale. Maybe we've seen peak obesity.
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A
Yeah, this is sort of a if it walks like a duck and it talks like a duck situation, because there's no direct correlation or causation that you can draw from this particular Gallup survey to say that the increase of GLP1 use has directly led to a decline in obesity. But common sense says that this is what's happening because the biggest reduction in obesity was among those age 40 to 49 and 50 to 64. Those are the exact same age groups with the highest rate of injectables for weight loss. So if you just kind of put one in, one, two and two together, you see that this is actually having an impact. And you also look at the growth and how many people are using it. And yes, Eli Lilly reported earnings yesterday and absolutely blew it out of the water. Manjaro sales were up 109% from the same period a year ago. Zepbound was up 184%. And it's putting some distance between it and Novo Nordisk, which made Ozempic and Wegovy and was seen as the leader for many years as these things exploded back in 2021. Now Eli Lilly is putting the pedal to the metal and really putting some distance between itself and Novo Nordisk.
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And we're seeing some bidding wars start to break out as well. Novo Nordisk just launched a hostile bid for this weight loss drug maker. Matt Sarah, in igniting this big pharma bidding war, Pfizer had had initially submitted a bid to it, and then Novo Nordisk came in over the top, 11% higher than the initial bid. So we are seeing, you know, billions of dollars being outlaid here to keep your nose ahead. I mean, I can't help but think about the war that's happening in Big Tech. The exact same thing is happening in the pharma world with these weight loss drugs where if you aren't developing these drugs, if you aren't trying to stay ahead of your competition, you are just falling behind by default. So I do think that this is the next frontier because obviously we're seeing widespread adoption and is having a real health impact. So Big Pharma wants to not be on the losing side of this particular.
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Trend because in two years when we're having the same exact discussion, we're not going to be talking about wegovy, Zepp bound, Manjaro. We're going to be talking about the new class of drugs that are even better and have, you know, that are easier to ingest and that have fewer side effects. So the company that Novo Nordisk and Pfizer are in this bidding war over does eliminate a lot of the side effects. They're developing a pill. And the pill really is the holy grail because right now it is an injectable to do this. And if you develop a pill that has the same effects or even better effects, then that's going to sell way, even, way better than the injectable. It's just much easier to administer. So there is a huge arms race right now to develop the weight loss pill.
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B
Yeah. One name to remember here is of course, lipran, which I practiced before I.
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A
Dared you to say that on the pod.
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That's Eli Lilly's next gen experimental glp. One drug, which is. It is a pill. It would replace the injectable.
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A
All right, let's sprint to the finish with some final headlines. Less than a week before election Day, the New York City mayoral race took a plot twist straight out of a Seinfeld episode. On Tuesday, the normally reputable Times of London published a story that quoted Bill de Blasio as criticizing frontrunner Zoran Mamdani's tax policy. It was a surprise development given that former New York City Mayor Bill de Blasio had long been a big supporter of Mamdani. But when former Mayor de Blasio caught wind of the story, he read it and said, huh? That's not my quotes. I never once talked with this reporter about Mamdani. I demand that you retract this. And he was right. Turns out the Times of London reporter had talked with Bill de Blasio, but not former mayor Bill de Blasio. He talked with 59 year old long island wine importer Bill De Blasio. The two have the same name, but the reporter emailed the wrong Billy Dee, who decided to play along in what he thought was harmless fun. The Times of London acknowledged the mistake and deleted the story from its site. Toby. As if New York City politics wasn't bizarre enough.
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B
I mean, I was just confused listening to you explain that. The easiest way to delineate between the two is the wine importer uses a lowercase d, e. So it's de Blasio with a lowercase d. So maybe we'll call him lowercase d when we're talking about this conversation. But it was funny. The two had actually met prior. When you have the same name as the mayor, your life is going to change when he is elected mayor. And one thing they said they met at a Mets game. And the wine importer said, I am getting killed by you. I get all this hate mail coming to my email. Like, he literally said, dude, you are killing me because of just the amount of hate you receive when you share a name with a mayor. So very funny right now. He says that he wasn't trying to impersonate it. He is Bill de Blasio. So when he's addressed by his name, he just responded in jest. He didn't think it would actually make it to print. But it is just a very funny situation altogether with two Billy D's in the world.
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A
Next time you're on a flight, try to make sure you don't drop your laptop or your phone in a place you can't retrieve it. You might just force the entire plane to turn around. That's what happened on October 15th to a United Airlines flight from Dulles to Rome. As the plane was southeast of Boston on its way to Europe, it did a U turn back to Northern Virginia because a passenger dropped their laptop behind a cabin wall panel that led to the cargo hold. It might have been a non issue, but out of an abundance of caution, the pilot decided to return to Dulles because the laptop has a famously explodable lithium battery that in its current location wouldn't be close to a fire suppression system on the Boeing 767. After he told this to the air traffic controller, they responded. I've never heard anything like that before. Good story to tell. At the pilot lounge, the passengers may not have been as amused, but they did eventually get to Rome. All laptops accounted for. Four and a half hours later than scheduled.
- [24:56]
B
Brutal turn of events there. You drop your laptop and you just go do that. Just slide into the cargo hold and Then it gets worse from there when the whole plane has to turn around. I think they should have called out the seat of the passenger when they were doing the announcements. The pilot comes on, the intercom goes, yeah, the guy in 14C, he let his laptop slide in the cargo hold. Now all your travel days are ruined. Again, blame him. 14C. 14C is the guy. I don't know if it was actually 14C, but I think name and shame in that situation.
- [25:26]
A
Pilots called out everyone who dropped anything from their seat. Then you know, they were busy the whole flight. You've never dropped anything before.
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B
I've never dropped anything. The worst thing I did is one time I sat in a pack of gum and it, you know, fused in my butt. And so I got up after the plane. So I don't think you're turning any flights around for that. But yeah, I keep control of myself. Actually, I will say one time, if you drop your AirPods, anyone who's dropped their AirPods knows this. It explodes in ways that physics can't even understand. You see, one AirPod is 12 rolls down. One AirPod is somehow in the cargo hold as well. So never mind. I am starting to empathize with this guy. Finally, it's the end of daylight saving time on Sunday. Which means your clocks will fall back one hour at 2am local. On the plus side, that means you have one extra hour of sleep coming your way. But it also means it's getting dark at 4:30pm Say goodbye to sneaking a round of golf in after work. Sunday is also a very special day in New York City because it is marathon day. I bring this up in conjunction with daylight saving because again the extra hour sleep is nice, but it also bumps the race into the hotter portion of the day. If you are running the race, congrats. But also there's a little built in excuse for you in case things go sideways. The end of daylight saving made it too hot.
- [26:38]
A
Yeah, I don't want to be a huge Buzz Killington here, but if you look at the sunset for New York City On Monday, it's 4:50pm 45 0. That's pretty early. Then again there is a silver lining. If you are an early riser because it's been getting late a later nowadays but with daylight saving time start ending then it's going to revert back an hour the sunrise. So it's going to start. The sun will start coming up around.
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B
6:30Am you literally are a Buzz Killington. You are dressed as Buzz Lightyear in front of my eyes. And way to slide in our early risers there. Do you get up early for something?
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A
No.
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B
No, no. Okay.
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A
I sleep in. Okay. That is all the time we have. Thanks for starting your morning with us. Have a wonderful Halloween and a spooktastic weekend. Congrats to the winner of this week's Ladder game, Laura Lozano, who is one of hundreds of listeners to submit the correct answer. And that is the five items we gave you are ordered by Shelf Life. Shelf Life. Enjoy your MBD swag, Laura, and thanks to everyone who played. For any feedback on the show or you just want to get in contact with us, send a note to Morning Brew daily at Morning Broadcom or slide into our DMS on Instagram @MB. Daily Show let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and makeup is scrambling for a costume. Devin Emery is our president and our show is a production of Morning Brew.
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B
Great show today, Neil. So long, partners.