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Stock Market Loses $6 Trillion in Two Days & Minecraft Movie Scores Big
00:27:40
The tariff fallout continues & the Minecraft movie makes Hollywood happy
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- [00:00]
Jesse Tyler Ferguson
Hey, Fidelity.
- [00:02]
Toby Howell
How can I remember to invest every month?
- [00:05]
Fidelity Representative
With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs.
- [00:12]
Neal Freyman
Huh.
- [00:13]
Toby Howell
That sounds easier than I thought.
- [00:14]
Fidelity Representative
You got this?
- [00:15]
Toby Howell
Yeah, I do. Now, where did I put my keys?
- [00:19]
Fidelity Representative
You will find them where you left them.
- [00:23]
Toby Howell
Investing involves risk, including risk of loss. Fidelity Brokerage Services, llc. Member NYSE SIPC.
- [00:32]
Neal Freyman
Good morning, Brew Daily Show. I'm Neal Freyman.
- [00:35]
Toby Howell
And I'm Toby Howell.
- [00:36]
Neal Freyman
Today, stock futures are weighed down again as the US's global tariffs spark a market meltdown.
- [00:42]
Toby Howell
Then a Minecraft movie put the industry on its back this weekend with a remarkable box office debut. It's Monday, April 7th. Let's ride.
- [00:54]
Neal Freyman
Well, we hope you had a relaxing weekend because it's looking like today will be worse than the Monday after the Super Bowl. And we didn't even get the super bowl yesterday. Asian and European stock markets plunged overnight over fears the trade war will crush the global economy. Toby, what's the latest?
- [01:11]
Toby Howell
Well, Neal, have you ever heard of a circuit breaker? But seriously, circuit breakers have levels that end up getting triggered when markets go down by a certain amount. For the s and P500 trading would be halted after a 7% drop or a 13% drop. And if the worldwide markets performance while you're sleeping is any indication of A lot of those levels are going to be tested today. Hong Kong's Hang Seng market is down 13%. Japan's Nikkei index is down 8%. Singapore down 7%. China is down 7%. India is down 4%. And over in Europe, things are not much better. The pan European stocks 600 index was down 5.2% in morning trading. And then a little sneak peek at the U.S. s&P 500 futures down 4%. Nasdaq 100 futures down 4.3%. Futures on the Dow are up. Just kidding. They're also down a 4%. So, yeah, go ahead and put an extra shot in your espresso. Now, a word from our sponsor, TaxAct. Neil, do you think Batman ever did his own taxes?
- [02:10]
Neal Freyman
Definitely not. That's what Alfred is for. Actually, maybe Robin was a cpa.
- [02:14]
Toby Howell
The point is, every hero needs a sidekick. And if you're a sole proprietor, business owner, you definitely needed one. Because chances are, things are a mess under the hood.
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Neal Freyman
Thankfully, TaxAct has expert assist. It's like your own personal Alfred, except instead, instead of admonishing Bruce Wayne in a British accent, they're helping you find every deduction and credit you deserve.
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Toby Howell
Do they wear tuxedos?
- [02:35]
Neal Freyman
No idea. But they are 100% credentialed, 100% US based tax experts who know the ins and outs of business taxes.
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Toby Howell
That's the kind of sidekick I need. Less utility belts and Spandex. More spreadsheets.
- [02:47]
Neal Freyman
Yes, TaxAct makes filing simple filed before.
- [02:50]
Toby Howell
April 15th at taxact.com Weekends are awesome.
- [02:54]
Neal Freyman
Because you don't have to work, you can eat cold pizza for breakfast and the stock market is an open and we are all grateful it wasn't because Thursday and Friday's wipeout will go down in the history books. The S&P 510% plunge on Thursday and Friday after President Trump announced massive tariffs ranks among the steepest two day declines in the last 70 years, on par with Black Monday in 1987, the post Lehman Brothers rout in 2008 and the COVID plunge in March 2020. More than $6 trillion was erased from stocks over two days. The Dow shed more than 3,000 points and the NASDAQ entered a bear 20% from a previous high. It was carnage on Wall street and reflects the investor panic over President Trump's Liberation Day tariff announcement when he raised tariff levels to their highest point in more than a century. Trump and his team believe these tariffs are necessary in order to restore America's manufacturing base and use them as a point for leverage with other countries. While virtually all economists say they're a recipe for slower growth and higher inflation, especially at these astronomic levels, on Thursday, JP Morgan raised their recession forecast from 40% to 60%. Toby Trading starts at 9:30am this morning and what may be the least exciting opening bell ever? What is the word on the Street?
- [04:11]
Toby Howell
The word street is not great, Neil Bill Ackman, the billionaire hedge fund manager who is also a very vocal backer of Trump, has been on a posting spree on X over the last few hours saying, quote, that a massive and disproportionate tariffs risk destroying confidence in our country as a trading partner. He urged Trump to call a timeout on Monday today or else, he wrote, we are heading for a self induced economic nuclear winter and we should start hunkering down. He also posted last night that he strongly believes launching tariffs on April 9 against the entire world is a mistake. So you are seeing a lot of anxiety coming from even the people who are some of the more vocal backers of this administration. And suddenly a lot of the calculus has changed when it comes to what the Fed is doing as well. Even though Jerome Powell kind of said we are still in wait and see mode, even though those that two headed beast of stagflation is potentially creeping up on us. Suddenly the market is now pricing in the Fed cutting rates five times by year end. Now previously it was only looking like three times. So you are seeing a lot of things changing very rapidly from the people, the billionaire class who was supporting Trump all the way down to Jerome Powell and the Fed saying suddenly the calculus is changing.
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Neal Freyman
Yeah, on Friday. Into this maelstrom walks Jerome Powell who just so happened to have an event scheduled on Friday as the markets were melting down. So everyone was very curious to see what he was going to say about the impact of tariffs. And he kind of sounded a worrying note. He said the tariffs are much larger than expected, they would lead to higher inflation than he was calculating and they would lead to lower than the Fed was, was calculating. He still said that the Fed was going to be in that wait and see mode, see how it all plays out. But as you said over the weekend, the calculus may have changed a little bit. Some investors are betting there might be an even emergency rate cut in order to save the market because this three day collapse should, you know, whatever happens today in the futures market bear out through 4pm it would be, you know, another addition to the historic collapse that we've been seeing. So we'll see what the Fed does. But Powell on Friday, kind of, we're, we're still seeing the, still seeing it playing out.
- [06:30]
Toby Howell
And one fascinating thing to observe over the last two days of last week was the divergence between retail investors and hedge funds. Actually through the first three hours of trading on Thursday, retail investors were net buyers of almost $3 billion in stock. That is the second highest level on record since JP Morgan began tracking data 10 years ago. Meanwhile, global hedge funds and ETFs dumped more than $40 billion of stocks on Friday, which is the largest selling on a net basis in almost 15 years. So you are seeing retailer retail investors, people like you and me, buying the dip as like you like to say. But then you have the professional side of things just dumping things left and right. So Jim Cramer was kind of on CNBC saying that there's a possible Black Monday level event coming today. So there's a lot of different factors where you're seeing professional investors behaving one way and then not professional investors behaving the other way. So that's going to be a fascinating tension to see play out over these next coming days as well. In the face of the uncertainty tariffs have injected into the global economy, companies around the globe are looking around like John Travolta in Pulp Fiction, trying to figure out what to do, and it looks like the answer is press the pause button. Case in point, Nintendo. The tariffs landed at the worst possible time for the Japanese video game maker ahead of its much hyper release of the Switch 2 console. Just hours after announcing preorder availability, the company reversed course, announced it would be delaying the April 9 prelaunch date, though it's still planning to ship the console this summer. Nintendo had already shifted about half of its switch to manufacturing to Cambodia and Vietnam in anticipation of a US China trade war. But now those countries are also caught in the tariff crossfire, too. Hence the pause. Another unwelcome casualty of tariffs is the US IPO market. Klarna and StubHub both put their public debuts on ice in a blow to what was supposed to be a promising period for companies going public. The buy now, pay later giant Klarna was scheduled to list today with a projected $15 billion valuation, while StubHub plan to launch its roadshow pitch to investors this week. Both of those timelines are now on hold due to market turmoil. Finally, Ford and Stellantis are trying to capitalize on the Buy America push, extending employee level discounts to all customers for the rest of April in an attempt to stave off panic rising about rising vehicle prices. But across the pond, Jaguar Land Rover decided to temporarily halt shipments to the US following Trump's 25% foreign auto tariffs to give themselves some time to figure out their longer term plans. So, Neil, a lot of companies are entering wait and see mode.
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Neal Freyman
You're right. I mean, they are hitting pause. And one interesting development that you might see more of in the coming days is companies declaring force majeure, which is a legal maneuver that says you can void certain contracts because of crazy situations that are unavoidable and unpredictable. You saw this happen during COVID a lot where they're like, we can't do this contract because there's literally a global pandemic. That's what they're saying about the tariffs. The first company that we know that did this is Helmet Aerospace, which is based out of Pittsburgh. They supply airplane parts for Airbus and Boeing across the $150 billion industry. They reportedly, according to Reuters, declared force majeure to void certain contracts with these companies. So that could add another level of supply chain chaos on top of what we're already seeing.
- [09:56]
Toby Howell
Yeah, and a lot of these companies are looking around saying, I thought we did what we were supposed to do here. We were supposed to diversify our Supply chains outside of China and Nintendo is just the perfect example of that is like we thought we laid the groundwork for. We knew the Switch 2 is coming, we wanted to get out of China specifically. But now their cost looks like they're going to go up. They still say they're going to release it in the summer, but they're just taking that little minute to figure out what to do. The IPO market is also just very frustrated, specifically venture capital firms who were kind of counting on the IPO market coming back to life under the Trump administration after a really bad couple of years. For for Big Exit, they just had Core Weave, which was the big AI data center infrastructure company that debuted last week. It did all right, but nothing crazy. But now you are seeing these two shining hopes in StubHub and Klarna pressing pause as well. And then Land Rover too is also just saying we have to enter weight in C Mode because the US is the second largest export market for the UK's car industry. Those cars are getting a lot more expensive. Land Rover, Jaguar says doesn't make any of their vehicles inside the United States. So they have to take a step back and recalibrate because of these increased cost the tariffs are introducing.
- [11:14]
Neal Freyman
One corner of the market we haven't touched on yet is oil prices. And just like everything else, they are an absolute free fall. The price of US crude oil plunged 14% over two days to below the key mark of $60 a barrel. They're at the lowest level since before the vaccines rolled out in Covid. The reason prices are cratering is a double whammy of lower demand and higher supply. Tariffs, if they do send the global economy into a downturn as expected, will SAP demand for fuel. People will travel less, businesses will ramp down spending, the economy will just need less energy overall. And in some really unfortunate timing, just as tariffs spooked markets last week, OPEC plus, a group of oil producing nations said they would raise output in a surprise move. So lower demand and higher supply has tanked the oil market. And while that means lower gasoline prices, it's a bad sign overall. It would crush U.S. energy companies and it's an omen. The economy is headed toward the dumps. So filling up for cheap will not be something to celebrate because it means there are a lot bigger problems going on.
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Toby Howell
Right. This has these two events back to back Trump's tariff and then the boost in production have totally shifted the global energy market. Crude is right around that $60 per barrel and that is just basically completely cast a doubt on Trump's drill baby drill approach, saying that we want to achieve energy dominance. But it's very hard to even create new drills profitably if oil is lingering around $60 a barrel. $65 is actually the threshold that many companies need to profitably drill new wells in places like Texas and surrounding states. So you are right that even though gas will likely end up being cheaper, it does lead to a lot of kick on effects down the road that make energy investment much harder.
- [12:59]
Neal Freyman
It just means everyone's poor if gas is super cheap because of a recession.
- [13:04]
Toby Howell
Let's move on. When the biggest companies in the world are shedding trillions in market cap, it stands to reason that the billionaire class is also taking a beating too. And that was certainly the case. The world's 10 richest people lost a collective $74 billion after last week's market rout, the worst single day loss in five years, while the world's 500 most affluent people lost $536 billion for the biggest two day drop in the history of the Bloomberg Billionaires Index. Elon Musk took the biggest hit, losing 31 billion. Mark Zuckerberg shaved off 27 billion. Jeff Bezos lost 23 billion. Even Warren Buffett wasn't immune, losing over two and a half billion dollars on paper. Still, the Oracle of Omaha is living up to his name if you zoom out a little. Berkshire stock price is up about 9% this year, far outperforming the S&P 500. Nearly 14% decline. And a big reason for that is Wall street is looking kindly on Buffett's gargantuan catch cash pile, which has swelled from $110 billion in September of 2022 to $321 billion at the end of last year, bigger than Coca Cola's market cap. It's a lot easier to be greedy when others are fearful, when you have the dry powder to deploy when things go south. And as the most famous value investor, many expect Buffett might be on the hunt for deals soon, now that the market has taken a haircut. Neil Buffett is actually the only billionaire in the top 10 richest people list to see his net worth expand this year, as his patient approach and hefty cash pile look especially prescient in these uncertain times.
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Neal Freyman
We are learning why he is the go and you said that he is greedy when a others are fearful. He was also fearful when others were greedy. Last year as the stock market soared to record highs, he cut his Apple stake by 2/3. He dumped bank of America and Citigroup both of those stocks are down 22%. Apple is down 28% this year and continuing today. So he was cutting last week or last year and everyone was like, why are you dumping stocks? Aren't they doing well? And then, you know, I don't think he foresaw this necessarily, but it's just shows. Goes to show why he's such an incredible investor.
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Toby Howell
I think a lot of people are looking to him and saying that if he starts buying relatively soon, that might mean that he believes that Trump's tariffs are more of an economic blip or an annoyance created and actually create these big buying opportunities. Or if he holds off, it might suggest that he's looking at these tariffs more in line with, you know, the Smoot hawley tariffs of 1930, where it's just a persistent economic force that ends up kind of breaking the market a little bit. Unfortunately, we have to wait to see because we'll probably see an answer become clearer when they Berkshire's next shareholder meeting. We won't know necessarily what his moves are until a few more months down the line. Up next, let's talk about some winners of the weekend.
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Neal Freyman
The best B2B marketing sometimes ends up in front of the wrong people. It's like advertising fishing gear to a fish.
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Toby Howell
That's a fitting metaphor. What's also fitting is when you can tap into the right to target the professionals you're looking for.
- [16:09]
Neal Freyman
That's what LinkedIn ads is built for. LinkedIn has grown to a network of over 1 billion professionals. Of those, 130 million are decision makers. You can target your buyers by job title, industry, company role, seniority, revenue. So many options all in one place.
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Don't waste precious budget on the wrong audience.
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Tap into LinkedIn ads to find your people. LinkedIn will even give you a $100 credit on your next campaign. So you can try it yourself. Just go to LinkedIn.com/mbd. That's LinkedIn.com/. Terms and conditions apply only on LinkedIn ads. What does the future hold for business? Ask nine experts and you'll get 10 answers. It's a bull market.
- [16:49]
It's a bear market. Rates will rise or fall.
- [16:52]
Inflation's up or down. Can someone invent a crystal ball? Until then, over 41,000 businesses have future proof their business with NetSuite by Oracle. The number one Cloud ERP bringing accounting, financial management, inventory and H R into one fluid platform with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books in days, not weeks, you're spending less time looking backwards and more time on what's next. Whether your company is earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. Download the CFO's Guide to AI and Machine Learning for free at netsuite.com/brew that's netsuite.com/brew netsuite.com/brew now it's time for our.
- [17:49]
Toby Howell
Winners of the Weekend, the segment where Neil and I picked two stories that had a better weekend than Duke Haters. Neil I won the pre show game of Pin the Tail on the Donkey, so I'm up first. And my Winner of the weekend is Minecraft. All those kids tugging on their parents shirt sleeve combined to create some serious spending. Mike this weekend as a Minecraft movie shattered box office expectations and brought in $157 million domestically in the biggest opening weekend of the year. The movie that is an adaptation of the ultra popular video game title was initially expected to only bring in 60 million, but that severely underestimated the fact that that it had Jack Black going very hard in the paint. Part of the reason for the movie's overperformance is kids freaking love it. Reaction videos posted this weekend on social media saw theaters erupting to particular fan service moments. One person posted on social media that quote, when Jack Black said chicken jockey, I bleep you not. The entire row in front of me gave a standing ovation. Chicken Jockey is of course referring to a rare instance in which a character rides a cuboid chicken in the game. You may roll your eyes or even ask for a translation from your 12 year old nephew, but the movie industry is happy to be rolling in the dough again after a brutal march absent of any big releases. Industry earnings are down just 5% in 2025 after previously staring down a 13% gap pre release of a Minecraft movie. Neil Seeing the jokes that were getting a thunderous applause in this movie, it was the first time I truly felt a little old.
- [19:21]
Neal Freyman
Welcome to the club. Toby. This wasn't just the best best debut of the year at the box office. It was the best in the history of a video game adaptation. So this is becoming maybe the Marvel of the 2000s adapting video games. It's been a recipe for success. We had the Super Mario Brothers movie which was the biggest movie of the year last year brought in $1.3 billion. 5 Night at Freddy's. Sonic the Hedgehog has had three movies now. Tom Holland in Uncharted. They all did really well at the box office. And I think the Minecraft success, incredible overperformance will only add fuel to adapting every video game that there is out there.
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Toby Howell
And Warner Bros. Which was the main studio that financed this movie, they did 75% of the financing and they did really well. They arranged this marketing partnership with McDonald's that went viral on TikTok. But also a lot of people are crediting Legendary for adding this magic producing touch. And Legendary jumped in to finance the extra 25% of the movie. But if you go down Legendary Entertainment's kind of hit list over the last few years, they are kind of the kingmaker when it comes to resuscitating old IP. They brought back King Kong in 2017. Now that trilogy has gone on to gross $1.6 billion worldwide. They were also the force behind Dune Part 1 and Part 2, which took in 1.1 billion. So if you want to adapt a beloved and sometimes complicated source material, hit up Legendary because they clearly have it figured out.
- [20:45]
Neal Freyman
What video game do you want to see adapted into a movie?
- [20:48]
Toby Howell
Oh man, I didn't play a lot of video games growing up. Maybe like an iPhone game like Doodle Jump or something like that. Fruit Ninja. I could see us going back into those era of IP and getting into the mobile genre a little bit.
- [21:00]
Neal Freyman
Cool. All right, my winner is Mega Millions because it's about to get a little easier for you to be a winner. The lottery game is rolling out its biggest makeover in years with the goal of jacking up jackpots and improving players odds of winning at least a little something something. Of course, there is a catch. The price of a ticket is going up for only the time in the lottery game's 23 year history. Tickets that were $2 will now be $5. But Mega Millions said the payoffs will be worth the steep price hike because its redesigned game will lead to higher starting jackpots and faster growing prizes. For instance, it says the average jackpot in the new game will be more than $800 million compared to around 450 million in the past. And the odds of winning the jackpot are getting better, from a 1 in 302 million chance to just 1 in 290 million. I mean, you're practically guaranteed to win at that point. Toby, the first drawing of the new game is 11pm Eastern this Tuesday. Are you feeling lucky?
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Toby Howell
So you're saying there's a chance despite this pretty hefty price increase. I mean, it's over 100% increase. The lottery spokesperson basically said that a lot of the customers were already spending more than $5 when buying a ticket. So hopefully with the added bang for your buck you're supposedly getting here, it will not be too big of a shock to the system. They kind of compared it to a subway fare hike where you don't really get anything more. You're paying more money for the same ride. In this case, they're saying the price increase is leading to improved odds, a better chance of winning money, faster, growing jackpots. So technically, you're getting something in return for this rather sizable price hike.
- [22:38]
Neal Freyman
Okay, let's move on to the week ahead, the major events you need to know about. It sure is going to be another tumultuous week on Wall Street. On Wednesday, President Trump's reciprocal tariffs go into effect on virtually every region of the world, even those without any human inhabitants. On Thursday, the consumer Price Index will show inflation rates for March, setting a baseline before whatever happens to prices with the trade war. And on Friday, big banks like JP Morgan kick off earnings season, which will be closely watched for what CEOs say about the tariff impacts on their businesses.
- [23:10]
Toby Howell
I mean, technically, this thing hasn't even really started yet because April 9th is the big day when these reciprocal tariffs tariffs kick in. It also is a big day where we start to see some inflation data that may be influenced by some of these tariffs as well, although likely we're going to have to wait for next month on that as well. So still in the first inning of this very long stretch to come here.
- [23:30]
Neal Freyman
Yeah. And the key question is whether the Trump administration will take Bill Ackman's advice and say something in order a pause in order to stem the bloodbath in the market. So we'll see whether that happens in the next few days before those go into effect on Wednesday. For golf fans, this is without a doubt the best week of the year, practically a religious experience, because the Masters tees off in Georgia on Thursday, the sport's first major of the year. Known as a tradition unlike any other, the Masters is certainly unlike any other sporting event in the cheapness of its concession menu. For the 23rd consecutive year, the pimento cheese sandwich will cost you just $1.50. Compare that to like $23 for whatever drink you're going to get at the US Open in tennis. It is a steal.
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Toby Howell
It is a steal. Although I was seeing some chatter this weekend that it tastes about as good as what you pay for it, which I would like to push back on. As someone who has been in the Masters one single day, it's pretty good. I think a $50, you know what you're getting. So the $150 pimento cheese sandwich is good enough. Do you want my Masters picks now or should we wait?
- [24:36]
Neal Freyman
Let's wait. Let's wait, let's wait.
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Toby Howell
I'll sit on them. I'll roll them over a little bit.
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Neal Freyman
Also in sports, the men's college BAS championship is tonight between Houston and Florida. In the Women's Championship yesterday, UConn destroyed South Carolina for its 12th title and their first since 2016 on television. White Lotus may have wrapped up yesterday, but Sunday nights on HBO will remain great with the new season of the Last of Us. The zombie apocalypse thriller was a major hit with its first season in 2023, racking up more than 30 million viewers. White Lotus, on the other hand, has about 18 million. Elsewhere, the Handmaid's Tale returns for its sixth and final season on Hulu, and the new season of Black Mirror hits Netflix on Thursday.
- [25:17]
Toby Howell
My only commentary on the White Lotus is I'm finally that we all finally got to use the Duke meme. When Duke lost, Mike White conspired to make it happen. I am sure of it.
- [25:28]
Neal Freyman
Okay, let's wrap it up there. Thanks so much for starting your morning with us and have a great Monday, or at least as great as it could possibly be given the circumstances. For any questions, comments, or or feedback, send an email to Morning Brew daily at Morning Broadcom. And before we get into the credits, gotta wish a happy birthday to my mom, big MBD listener. Happy birthday, Mom. Okay, now here is our wonderful team behind the scenes. Emily Milian is our executive producer. Raymond Lu is our producer. Olivia Graham and Olivia Lake are our associate producers each. Andrew is our technical director. Garrett Peck is on audio hair. Makeup is in a bear market. Devin Emery is our chief content officer. And our show is a production of Boning Brew.
- [26:08]
Toby Howell
Great show today, Neal. Let's run it back tomorrow.
- [26:17]
Jesse Tyler Ferguson
Hey, it's Jesse Tyler Ferguson, host of Dinners on Me. And I've got something very cool coming your way. I cannot wait for this. I sat down with none other than Ty Burrell, also known as my brother in law on Modern Family for 11 seasons. And let me tell you, when we get together, it's impossible to stop. Laug, you're going to love this episode. And of course you're going to love Ty because honestly, he's the best and who doesn't love him? And thanks to Airbnb, we got to record in the coziest little apres ski cabin in Utah. Complete with takeout from one of Ty's own restaurants. Beer bar. So picture this. Two old friends, a crackling fire, some seriously good food, and a whole lot of tea spilling. Yes, I mean, meaning that we also we gossiped, but also we spilled our tea. Anyway, I can't wait for you to listen.