B (2:23)

On we have Pimm's cup number one. It is the most classic. Then the honey deuce. Then the champagne at the French Open because you know it's a tennis tournament, it's not wedding. And then finally the Australian Open. The lemonade. That feels so forced. They should just stick with what Australia does best and just give us all a flat white. And now word from our sponsor, LinkedIn Ads. Toby, it is good to have you back.

A (2:46)

It is good to be back. Neil. Did you miss me?

B (2:48)

I did. I heard a rumor you were staying in Canada and never coming back.

A (2:52)

I would never. I can't do kilometers or poutine.

B (2:54)

So you're saying I wasted energy missing you? Like how advertisers who don't use LinkedIn ads waste money, time and effort on 71% of of B2B ads. Sure.

A (3:04)

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B (3:17)

So check out LinkedIn ads. LinkedIn will even give you a $100 credit on your next campaign. So you can try it for yourself. Just go to LinkedIn.com/MBD. That's LinkedIn.com/MBD. Terms and conditions apply only on LinkedIn ads. Intel has a new shareholder, Uncle Sam. On Friday, President Trump announced that the US government will take a 10% stake in the struggling chip maker, a move that escalates this White House has never seen before interventions into America's private companies. Officials said the deal would have intel converting the nearly $9 billion in grants it received under the Chips act into equity for the government. Investors love the move, sending intel's battered stock 5.5% higher on the day. CEO Lipu Tan's neck must be hella sore from the whiplash of the past few weeks. Earlier this month, Trump called on him to be fired for his previous investments into Chinese companies. Tan immediately hopped on a plane to meet with Trump in Washington, D.C. which was where the president floated the idea of the government taking a 10% stake. Fast forward to Friday and the two were smiling and shaking hands as business partners. As Trump said, he walked in wanting to keep his job and he ended up giving us $10 billion for the United States. So why is this happening? The White House says it's a national security imperative. Intel is a flailing American chip maker that needs a boost in order to compete with foreign rivals. And Chips act subsidies weren't cutting it. They also mentioned major upside to American taxpayers should Intel's stock rebound. At the same time, the deal is freaking out free market economists, including many conservatives, who argue that government meddling in private markets distorts competition and leads to businesses making decisions based on political considerations instead of commercial ones. Essentially, they say the Trump administration is adopting a form of socialism. Toby Trump is taking the government's role in private enterprise to levels we have never seen before.

A (5:08)

Yeah, we actually have seen it before recently, though, in the Trump administration because they took a golden share in the U.S. nippon Steel merger, and then also they are taking a cut of semiconductor sales to China. So this is clearly in line with kind of the state capitalism that Trump has been running in his second term. Some people liked the deal. They say that obviously intel can benefit from the government support. They now have almost a salesman in chief with Trump because the one thing intel needs more than $9 billion from the government is just customers. That is why some people did not look super highly on this deal. Because technically, if you don't have anyone to buy your chips that you are putting all this money into building out a factory from, then you don't really have a business. And that looks to be the case. CEO Liputin literally said last month that the company may have to quit the entire foundry contracting business itself if it does not land any big clients. So, yes, $9 billion from the government, all well and good. Having Trump at your back, all well and good. But if you don't have people who actually want to buy your chips, then it doesn't matter.

B (6:12)

And that point is where many of many critics of this deal are zeroing in on. And when I said that they. When the government takes a 10% stake in your business, then you start doing things for political means instead of commercial means. So you said that they need to find customers for this foundry business. What intel has done is they want to become a contract manufacturer for chips. It's kind of a pivot from what they have historically done. Well, they're building a huge plant in Ohio. They're spending $20 billion on this, but it has not gone well because they don't have enough customers. Tan has in new to the position and said, well, let's dial this back a little bit because this is an investment maybe not worth making. It's not necessarily the direction we should go in as a company. But here's the thing. Now that the US government is a 10% shareholder in this company, perhaps they will continue to make investments in Ohio even because that's not necessarily efficient, but because it is a political move because Ohio is a major swing state and you want to have jobs and investments in Ohio specifically. So this Ohio plant is sort of a flashpoint in saying this is why the US Government and private meddling in private markets is not a good idea. Because you start doing things for politics and not because the free market demands it.

A (7:24)

And then the one thing that some people looked at this deal and saw is that this isn't a pledge for incremental funding. Which might say that maybe the government is willing to provide this one time cash infusion, but they're not necessarily having this big appetite for the future of Intel. If they really had, if they really believe that this company is going to be the one that will reassure domestic manufacturing of semiconductor chips, maybe they would say, hey, we'll give you $2 billion every year going forward because we support your ongoing efforts. The fact that it's just a one time cash infusion shows that maybe they have a weaker appetite for this business than Trump ostensibly, on the surface, is showing.

B (8:02)

Now there are some supporters that coming from interesting quarters. Bernie Sanders, the Democratic socialist from Vermont said he supported this deal. He said if microchip companies make a profit from the generous grants they rece from the federal government, the taxpayers of America have a right to a reasonable return on that investment. And if you're someone here in New York City who supports Zoran Mamdani's plan to open government operated grocery stores, then on principle you should also be for this. So you have, you know, Trump taking a very different tack than conservative free market economists would typically want and is aligning more himself with very interventionist people on the way left. And then you have the traditional free market conservatives who are saying, well, this is completely distorting private markets. We shouldn't be bailing out any private companies. Perhaps in 2008 when the US government did take a stake in automobile companies and in banks too because they were too big to fail, quote, unquote. And you know, if they were to fail, then they would take the economy along with it. You know, the critics of this deal say that, you know, intel maybe is not too big to fail. There are other major chip companies in the United States like amd, which is actually bigger than Intel. And now because the US Government has made intel its champion, AMD is at a severe disadvantage. Because if you are buying chips, who are you going to buy chips from? Intel or amd? Probably intel, because they now have the US government at their back. But what if intel doesn't make as good enough chips as amd? Then again, you just have a inefficient market. And that's why critics are bashing this.

A (9:31)

If your portfolio was green heading into the weekend, you have Jerome Powell to thank for it. The Federal Reserve chair sent stocks flying on Friday after he hinted during his Jackson Hole speech to a gathering of central bankers that he may reduce rates in the future. Remember, Jay Powell is still a coy son of a gun who knows his words move markets. So his exact wording was with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance and non Fed speak. That means that the delicate balance between keeping inflation low and fostering economic conditions where people can get jobs has shifted. According to Powell, tariff related costs have been accumulating in the economy. But during his speech he suggested that maybe they'd be shorter lived than expected, which calmed some inflation fears. As for the jobs market, he still thinks it's stable, but admitted that there are signs popping up that suggests it's weakening. The elephant in the room too is that Powell has been under a ton of pressure from the Trump administration to cut rates. Though he reiterated his pledge that the Fed doesn't take political factors into account when setting interest rates. There were some recent signs of quickening inflation and still solid economic data in the last few weeks that caused traders to get nervous about a rate cut come September. But Powell speech helped assuage some of those fears. Now Neal, the odds of a rate cut at the Fed's next meeting sit just above 83%. Not a certainty, but getting pretty close.

B (10:53)

Investors were like horses at the Kentucky Derby going into that gate and all they wanted was just those gates to open and Powell to say that there would be a rate cut in September. You know he didn't explicitly say it, but he did say it in his Federal Reserve speak way at the S&P 500 jumping 1.6%. The Nasdaq was up 2% on Friday. And then the Russell 2000 index of smaller companies. These companies are much more sensitive to interest rate changes. This index rose 3%. So Wall street was absolutely loving it. They are now pricing in over a 90% chance of a rate cut. What I thought was the most interesting part of Jerome Powell speech was his remarks on the labor market. He said what was going on was an unusual situation where the risks of worse than expected labor market outcomes are rising and if they materialize they can do so Quickly in form of higher layoffs and rising unemployment. He's saying at the same time we have a slowing demand for jobs, there's also slowing supply of workers. Economists are reading the tea leaves here and saying that there's been a huge drop off in immigration from 2023 and 2024 to 2025, and that has led to just fewer people applying for jobs. So at the same time you have companies hiring less, you also have fewer people looking for jobs. And that is one, one piece of the puz. We know over the past few months there's been really low hiring, but at the same time, unemployment rate is at 4.2%, which is historically low. It's really hard to square that circle. And they think that immigration really is the is the answer here.

A (12:31)

Yeah, economy is just in a weird stasis is kind of how Powell framed it because you have these cuts to the federal workforce too. And then you also have these massive tariffs that have hit around the world world. We're also coming off of just a string of really ugly downward revisions in jobs reports. May and June had a cumulative adjustment of 258,000 jobs to the downside that ended up with Trump firing the head of the bls. But it also betrayed. It also showed that the labor market is weaker than potentially expected. And then let's finally talk about inflation. Powell did kind of temper expectations that he's going to go on this string of rate cuts by saying that inflation is still running hotter than the 2% it's been at above 2% for the past four years now. So we're not going to go on this rate cutting spree. But he did say that maybe the impact of tariffs isn't going to be as long term as many expected, which again, investors cheered. Moving on. President Trump is becoming a breezeless and cloudy day for wind and solar projects, ratcheting up his attacks on the renewable energy sector just as power demands are growing. Last week, the Trump administration halted construction on an offshore wind project near Rhode island, citing national security concerns. The project was run by a Danish wind farm developer, Orsted, who said the farm, which was slated to power 350,000 homes, was nearly across the finish line with 45 of 65 turbines already installed. But Trump has made fossil fuels a much bigger priority than renewables so far in his administration, calling wind and solar this scam of the century on social media. Nearly $19 billion worth of renewable energy project have already been canceled this year year a over 2100% increase from last year, according to the Financial Times. That's a problem because the US Is going through an unprecedented energy crunch right now. Power hungry data centers used to train AI models are sending electricity demand through the roof. And industry watchers say that utility providers may have to soon turn away AI companies to avoid blackouts. If the whole renewable sector is being sidelined, that could jeopardize U.S. companies chances in the air race as well as. Well, Neil, it has been a rough one out there for renewables right now.

B (14:42)

And if you look at the stock market this morning, especially Orsted, it is plunged 18% because this company has invested billions of dollars into this particular wind farm off the coast of rhode island, nearly 80% complete. They installed all the foundations. They put in 45 of the 65 planned turbines. It was set to begin operations next year. And now Orsted is looking at its financials and saying, oh, this is really bad. They are previously because of other canceled projects in the adverse business environment for wind projects in the United States, they had to raise, they want to raise $9.4 billion to shore up their balance sheet. Things are not good for Orsted and a bunch of the other renewables companies. If you look at their stock prices since the inauguration in January, it is very, very ugly.

A (15:27)

It's just a tough time to be in the renewables industry. One, because a lot of red tape is emerging at the Interior Department who has to approve a lot of these projects. There's also rising costs because copper and steel tariffs are influencing wind and solar production. And then a lot of businesses are saying, we don't know if we want to invest in America anymore. It used to be for multinational power companies, the US Was the gold standard, a very stable business environment. But now you are seeing a lot of energy companies kind of slash their planned investment in the US Due to regulatory concerns, due to tariffs. So it's just been a total 180 in the past couple of months, honestly, for the renewable industry right at the time when we need power coming online because these data centers are just so power hungry.

B (16:15)

And prices for, you know, your average person who are powering their home are going up. The nationwide average retail residential price for 1 kilowatt hour of electricity was up 6.5%. Between May 2024 and May 2025. There was that big wholesale auction for power capacity from PJM Interconnection, which is the nation's largest grip, that those prices, those wholesale prices rose 22% compared to last year. And they say 60% of that price increase was attributable to data centers. The shoe is going to drop here. Between the lack of power capacity coming online and the surge in data centers we've been seeing.

A (16:54)

Up next, we're going to go to our winners of the weekend. This message is a paid partnership with Apple Card. I'm a person who really appreciates simplicity and when it comes to credit card rewards, the simpler the better. That's one of the many reasons I have an Apple Card. The rewards are super straightforward. I earn up to 3% daily cash back on my everyday purchases. There are no points to calculate, no limits or deadlines. Plus, it's super easy to access my card and make payments from the wallet app of my iPhone. If that sounds like the kind of simplicity you want in a credit card, apply for Apple Card in the Wallet app on your iPhone phone subject to credit approval Apple Card issued by Goldman Sachs Bank USA Salt Lake City Brands terms and more@applecard.com you know what's even.

B (17:39)

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A (17:43)

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B (17:49)

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A (17:56)

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A (18:09)

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B (18:19)

Sign up for your $1 per month trial and start selling today at shopify.com/morning brew that's shopify.com morning brew shopify.com/morning brew welcome to Winners of the Weekend, the segment where Toby and I pick two things that deep cleaned their apartment. I won the pre show Home Run Derby so I get to go first. And my winner is Olive Garden's Never Ending Possible because in a world of never ending price increases, it stayed inflation proof. The fan favorite Pasta special returns to Olive Garden menus today for a limited run through November and the price will be the same as it has been for the past four years. 1399 Compare that to restaurant prices in general, which have increased more than 30% since 2020. For 14 bucks, you'll get a meal that will even fill up a growing boy like Toby. It comes with endless pasta, plus unlimited soup or salad and of course, unlimited breadsticks. You can add unlimited toppings for an additional $5. It's the kind of deal that could win over Americans who are pulling back on $17 bowl slop from Sweetgreen and gravitating toward food that more bang for your buck. And if the Never ending Possible is my winner, the honorable mentions are all the other sacred products whose prices haven't budged despite soaring inflation. First one that comes to mind is Arizona iced tea, which has remained 99 cents since the company was founded in 1992. And who could forget Costco's hot dog and a soda combo which has cost A$50 since 1985. Toby, how do these companies do it, keeping these prices so low? Why do they do it?

A (19:51)

It is definitely a deliberate strategy. If you hold the line on price, especially in an prices seem to just be increasing every single year. You're trading a little bit of margin. Yes, you're going to maybe potentially even lose money on selling it. But you are trading that for brand loyalty. In a lot of these companies, it is seen as a loss leader. Some of these promotions, Costco, the rotisserie chickens or hot dog, they get you in the door. They make you feel like you're part of this, you know, community of Costco lovers and then you actually spend money on things that make Costco money. So it is considered a loss leader. But good gosh, I love this from Olive Garden. They are so synonymous with unlimited at this point. They got the unlimited breadsticks, they got this unlimited pasta deal and there's 96 different pasta and sauce combinations with if you include those additional toppings as well. So you could eat there for a while, a few months at a time and never eat the same thing. So just a great play on both brand loyalty and also a nostalgia play as well because it's been around since the 90s.

B (20:52)

You have to think that so many people are getting the toppings too. So it's not a $14 meal, it's really $19. Because if you're getting unlimited pasta and all that stuff, you're going to want some chicken or meatballs or sausage on top of that. And you are nodding here because you know that as well.

A (21:06)

I totally agree with that. But I do feel for Olive Garden because it just lost its crown as the number one casual dining, fast casual dining chain in the U.S. after seven straight years on top. It lost it to Texas Roadhouse, who doesn't even have a loss leader. They actually they do have a little bit of a loss leader or with those bread that are just absolutely delicious that you get for free. So maybe the only way you can make it to the top of the restaurant heap is to just have like one of the greatest meal deals of all time. Either Texas Roadhouse or Olive Garden are doing pretty well. My winner of the weekend is the tourism industry, because it turns out that people still like to travel. Heading into summer, the industry was bracing for a major downer of a season. Trump's trade war had sparked boycotts from Canada and Europe. Up airlines were seeing bookings dry up in the spring and gloomy headlines off the job market made analysts think travelers would stay home. But the feared slump never really materialized. There were fewer international visitors, with arrivals into U.S. airports falling nearly 4%. But domestic travelers filled the gap, with TSA passenger traffic up in July and August compared to last year. It was mostly luxury travelers who put the team on their back, driving revenue per available room at top tier hotel chains up 3%. But even on the other end of the spectrum, there were some signs of wanderlust. Ultra budget vacation operators think campsites, RV parks and cruises said that they had a strong summer, with people opting to scale down on their vacays rather than cancel them altogether. The strong season led Hilton, Hyatt and Carnival to raise their forecasts, something that seemed unlikely even just a few months ago. Neal it's not a blowout summer, but what was supposed to be a storming season turned into a surprisingly steady one.

B (22:44)

You forget just how big the United prices. So any sort of shortfall in international travel can be made up for by people living here already. Domestic travelers account for almost 90% of tourist spending in the United States each year, and that is a huge consumer market for a lot of hospitality companies. I thought it was very interesting that campsites were doing so well. I thought that was very much a 2021 and 2022 thing during COVID where people wanted to be outside. But no, they are growing at the fastest pace since the since the began to ebb in February 2022. So a lot of people are going camping and then RV campsites are doing also similarly well. Cruise operators are all jacking up their forecasts so people are still traveling and maybe it's a sign that people are prioritizing traveling over other leisure things, like maybe you would go to a baseball game or a movie or you have all these possible things to do with your leisure time and seems like Americans coming out of the pandemic pandemic started to prioritize vacations and that has lingered for many years and now it's just a permanent feature of our economy and our behavior.

A (23:52)

Yeah, a analyst from Goldman Sachs argued that exact same thing. She said that the post Covid revenge travel was thought to be maybe a flash in the pan thing, but it actually turned into a structural prioritization of vacation over other leisure spending. So you're absolutely right. We are seeing, you know, restaurant spending fall a little bit, but we're seeing vacation spending staying pretty consistent. And that being said, there are a little bit of clouds on the horizon because remember there is still a weakness in international travelers and those are travelers who to come to the US and tend to stay longer and pay more money. There's also some policy headwinds as well. There's a $250 visa integrity fee that may deter some of those mid market visitors. So definitely not the worst season that we've had, but certainly some storm clouds, crowds brewing on the horizon.

B (24:40)

It's Monday, so here's what you need to know to stay ahead in the week. Ahead on the earnings calendar, there's only one name that matters and it has two continents placed awkwardly together in video Last month the chip maker became the first US company to reach a $4 trillion market valuation. But since then the vibes around AI have taken a turn for the worse. Nvidia and other big tech stocks are wobbling as concerns started to bubble about an AI bubble. Plus, Nvidia has all sorts of headaches in its key market China, which has begun to encour companies to avoid using Nvidia's chips. Toby Nvidia's earnings are always important, but Wednesday's report feels more high stakes than usual. The future of the stock market may depend on it.

A (25:20)

It does feel like that, but the street publication found that nine analysts who cover the stock recently raised their price target on Nvidia over the next 12 months. So they're still saying that growth is going to be pretty steady there then. I'm also just very curious to see what CEO Jensen Huang says about out the government collecting 15% of their sales revenue to China. I think those are the two big question marks. Here is what the heck does this deal actually entail? Is it going to be good for business, bad for business? So going to be tuning into that?

B (25:48)

Burning man kicked off yesterday and runs through next weekend. Over 70,000 free spirits have traveled to the middle of nowhere Nevada to create a pop up settlement. Black Rock City where they'll attend art installations like the Port, a Potty Confessional and dance to EDM music as the sun comes up with Rinse and Rave. Toby I'd like to go to burning man for one day just to see what it's like. Get in 7am, get out 10pm don't want to stay over, but I simply need to see it once in my life.

A (26:14)

I want to go for the whole week or however long it lasts. That being said, we might have to go soon because they're being in a little bit of financial trouble in recent years. The festival did not sell out this year, did not sell out last year. So it's a famously anti capitalist institution that's in a bit of a pickle right now because it needs a little bit more money.

B (26:33)

A couple of other notes and anniversaries Today is the 50th anniversary of the release of Born to Run, the album that launched Bruce Springsteen. Superstardom was jamming to it all yesterday. It totally holds up. Friday is the 20th anniversary of Hurricane Katrina, which is sure to be a major event in New Orleans and across the country. And on Saturday, week one of the college football season begins with some tasty matchups and then it's also Labor Day weekend coming up. So once you get through this week, you have a three day weekend to look forward to. That is all the time we have. Thanks so much for starting your morning with us. Have a wonderful start to the week. If you have any thoughts or feedback on today's show, send a note to Morning Brewed daily@morning brewed.com and the moment you've all been waiting for. The answer to last week's password contest. The password was King Kong. King Kong. And we do have a winner. Shay Loch name from Westwood, Massachusetts. Congrats and thanks to everyone who played along. Stay tuned for more games in the weeks and months to come. 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. Ms. Toby Devin Emery is our president and our show is a production of Morning Brew.

A (27:43)

Great show today Neil. Let's run it back tomorrow.