Morning Brew Daily: Amazon Dethroning Walmart? & DOGE Hits Snag in Treasury Overhaul Release Date: February 7, 2025
In this episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell delve into significant shifts in the business landscape, government controversies, and a comprehensive preview of Super Bowl 59. Here's a detailed summary of the key discussions, insights, and conclusions from the episode.
1. Amazon Overtakes Walmart in Revenue
[02:34 - 05:23]
Neal and Toby explore Amazon's recent achievement of surpassing Walmart as the highest revenue-generating company globally. For a decade, Walmart held this title, but Amazon reported a staggering $187 billion in revenue for Q4, compared to Walmart's projected $180 billion. This shift is attributed to Amazon's robust growth areas, including:
-
Amazon Web Services (AWS): AWS revenue has more than doubled since 2020, now constituting 17% of Amazon's total sales. Neal emphasizes, "AWS is a $100 billion business for Amazon and it's growing double digits every single quarter" (04:19).
-
Advertising and AI Investments: Amazon's advertising business is expanding at an 18% growth rate, and their commitment to AI is significant, with plans to invest $100 billion predominantly in data centers and related infrastructure (05:23).
In contrast, Walmart has diversified by investing in groceries, e-commerce, and advertising but lacks a counterpart to AWS. Neal notes, "Walmart is mostly a pure play retailer still," highlighting Amazon's technological edge as a critical factor in its market dominance (04:19).
Notable Quote:
"Amazon has a few more cards to play, especially in the tech area. And that's why its market cap is so much bigger than Walmart's." — Neal Freyman (04:19)
2. Treasury Department Faces DOGE Controversy
[05:23 - 11:58]
The hosts discuss a legal battle involving Elon Musk and DOGE staffers gaining access to the U.S. Treasury's payment systems. A federal judge restricted Treasury data access to outside parties, limiting it to two DOGE staffers on a read-only basis. However, controversy erupted when one of these staffers, Marco Ella, resigned after connections to a deleted social media account promoting racism and eugenics surfaced.
Key Points:
- Court Ruling: The Treasury was barred from sharing payment portal data externally, addressing security concerns (06:47).
- Elon Musk's Defense: Treasury Secretary Scott Besant defended Musk and DOGE, stating alignment in "cutting waste and increasing accountability and transparency" (11:12).
- Security Concerns: Toby highlights the sensitivity of the data accessed, emphasizing the risks of unelected individuals handling personal information (11:58).
Notable Quote:
"You don't want two people that weren't elected... combing through this data." — Toby Howell (11:58)
3. Federal Workforce Resignations and Potential Layoffs
[06:47 - 09:10]
Neal and Toby examine the Trump administration's initiative offering federal employees deferred resignations with continued pay. Legal challenges from unions have led to a federal judge extending the deadline for these resignations, leaving approximately 50,000 employees in uncertainty. Additionally, the administration is reportedly planning significant layoffs, including cuts to health workers and USAID personnel.
Key Points:
- Deferred Resignations: Initially targeting 5-10% of the federal workforce, the program remains in limbo pending court decisions (08:24).
- Upcoming Jobs Report: A critical jobs report is expected, reflecting the ongoing turmoil within federal employment (09:10).
Notable Quote:
"We are in that period of time right now." — Toby Howell (08:24)
4. Dispute Over Panama Canal Passage Fees
[09:10 - 14:18]
The episode covers tensions between the U.S. and Panama regarding passage fees for American military ships through the Panama Canal. The U.S. State Department claimed Panama agreed to allow free passage, but Panamanian President Jose Raul Molino refuted this, citing a 1977 treaty mandating equal treatment for all canal users.
Key Points:
- 1977 Treaty: Prevents unequal fees for specific nations, nullifying U.S. demands for free passage (13:17).
- Economic Impact: Historically, the U.S. has paid minimal fees ($25 million over 26 years), representing less than $1 million annually (14:18).
- Symbolic Victory: The push for free passage appears more symbolic than economically significant (13:17).
Notable Quote:
"You can't do these carve outs for specific nations like Rubio and Trump are pushing for." — Toby Howell (14:18)
5. Stock and Dog of the Week Highlights
[16:00 - 19:35]
Stock of the Week: Workday
- Performance: Workday's stock surged after announcing an 8.5% workforce reduction to reallocate resources toward AI investments (16:00).
- Industry Trend: Similar moves seen in Salesforce, Dropbox, and Klarna, reflecting a broader shift toward AI-focused strategies (17:02).
Dog of the Week: Quicksilver, Billabong, and Volcom
- Bankruptcy: Liberated Brands, parent company of these outdoor brands, filed for bankruptcy, leading to over 120 store closures (18:40).
- Causes: CEO attributes closures to macroeconomic factors and shifting consumer preferences away from the brands' traditional aesthetics (19:35).
Notable Quote:
"Whenever you announce layoffs under the premise that a company will redirect those resources towards AI, it's pretty clear that the market will like it." — Toby Howell (17:02)
6. Super Bowl 59 Business and Conspiracy Theories
[20:20 - 32:14]
Neal and Toby provide an extensive preview of Super Bowl 59, highlighting business implications and entertaining conspiracy theories surrounding the event.
Key Topics:
-
Venue Shift:
-
End Zone Slogan Change:
-
Conspiracy Theories:
- Logo Colors Predicting Teams: The Super Bowl logo colors have historically mirrored the participating teams' colors, sparking speculation of predetermined matchups (26:23).
- Ref Favoritism Toward Chiefs: Data shows the Chiefs received fewer penalties in recent postseasons, reminiscent of past teams like the New England Patriots (26:23).
- Taylor Swift's Influence: Rumors suggest that her presence and relationship with Chiefs' Travis Kelce might have influenced game outcomes (26:23).
-
Prop Bets Discussion:
- National Anthem Duration: Both hosts predict it will exceed 120 seconds due to the performer's style (28:45).
- Tom Brady's Tie Color: Neal opts for blue, while Toby leans toward black for better odds (29:22).
- Kendrick Lamar's Performance: Expecting "Humble" to be the opening song (30:55).
- Gatorade Color: Neal predicts a nostalgic return to clear flavors (31:36).
Notable Quotes:
"The Superdome is a very important part of New Orleans and New Orleans history... it served as a refuge for thousands of people." — Neal Freyman (22:18)
"It's going to be hard for him [Travis Kelce]." — Neal Freyman on Travis proposing to Taylor Swift (32:29)
Conclusion
The episode of Morning Brew Daily offers a comprehensive analysis of Amazon's rising dominance over Walmart, governmental challenges involving the Treasury and federal workforce, and an engaging Super Bowl preview infused with business insights and light-hearted conspiracy theories. Hosts Neal Freyman and Toby Howell adeptly navigate these topics, providing listeners with valuable information and entertaining discussions to start their day.
Notable Quotes with Timestamps:
- “Amazon has a few more cards to play, especially in the tech area. And that's why its market cap is so much bigger than Walmart's.” — Neal Freyman (04:19)
- “You don't want two people that weren't elected... combing through this data.” — Toby Howell (11:58)
- “We are in that period of time right now.” — Toby Howell (08:24)
- “You can't do these carve outs for specific nations like Rubio and Trump are pushing for.” — Toby Howell (14:18)
- “Whenever you announce layoffs under the premise that a company will redirect those resources towards AI, it's pretty clear that the market will like it.” — Toby Howell (17:02)
- “The Superdome is a very important part of New Orleans and New Orleans history... it served as a refuge for thousands of people.” — Neal Freyman (22:18)
- “It's going to be hard for him [Travis Kelce].” — Neal Freyman (32:29)
For more insights and discussions, tune into the Morning Brew Daily podcast available on all major platforms and YouTube.