Morning Brew - ☕️ Grace for Graceland

Why Americans wrongly believe we're in a recession...
May 23, 2024 View Online | Sign Up | Shop

Morning Brew

Cuts

Good morning. So it begins: Today kicks off the annual Memorial Day Weekend Migration, and it seems a lot of you are hitting the lake house. An estimated 43.8 million people will likely travel at least 50 miles from home today through Monday, up 4% from last year and nearly hitting the 44m record from 2005, per AAA.

Don’t forget to play Molly’s new favorite road trip game: Punch buggy, but for Cybertrucks.

—Molly Liebergall, Sam Klebanov, Matty Merritt, Abby Rubenstein, Neal Freyman

MARKETS

Nasdaq

16,801.54

S&P

5,307.01

Dow

39,671.04

10-Year

4.434%

Bitcoin

$69,329.81

Nvidia

$1,007.00

Data is provided by

*Stock data as of market close, cryptocurrency data as of 3:00am ET. Here's what these numbers mean.

  • Markets: The news that “various participants” at the last Fed meeting said they’d be open to raising rates if inflation doesn’t let up sent stocks plunging like they were riding the Tower of Terror yesterday, giving the Dow its worst day this month. But things might be looking up: AI chipmaker Nvidia soared after-hours after reporting earnings that beat Wall Street’s sky-high expectations.
 

ECONOMY

Most of America thinks we’re in a recession (we’re not)

Taylor Swift in ‘You Need to Calm Down’ music video Taylor Swift via YouTube

You’d need to be an Olympic long jumper to bridge the gap between how well the public thinks the economy is doing and how well the economy is actually doing, according to a new Harris poll published yesterday by the Guardian.

Among the 2,000+ participants in the survey:

  • 56% think the US is currently experiencing a recession, and 55% believe the economy is shrinking. (GDP—a key measure of economic activity—is growing.)
  • 72% believe inflation is going up. (It’s more than halved from a 2022 peak of 9.1% and is hovering between 3% and 4%.)
  • 49% think the current unemployment rate is at a 50-year high. (It’s near a 50-year low.)
  • 49% believe the S&P 500 is on the decline. (It’s risen more than 12% this year, and Wall Street is raising its expectations for the index’s year-end performance. The Dow also just made record gains.)

Why is reality missing so many Americans?

Even though inflation is finally easing, the average cost of groceries, housing, and other consumer needs has soared over the past few years. About two-thirds of the Harris poll respondents agreed that “it’s difficult to be happy about positive economic news when I feel financially squeezed each month.”

But also…analysts only recently hit Command-Z on widespread predictions of an impending crash: While 9 in 10 business economists now see a soft landing coming, according to the National Association for Business Economics, back in October 2022, Bloomberg Economics forecast a 100% chance of a recession by the following fall.

Media coverage likely also shares the blame. Recent studies show that news coverage is becoming increasingly negative, especially regarding gas prices, a common harbinger of economic panic.

Here’s why that’s bad news for Joe Biden. 58% of the poll’s participants blame the current administration for what they see as a worsening economy. Convincing them otherwise will be a challenge, especially since more than 60% of people surveyed said they’re skeptical of economic news. Test your own economic perceptions against reality with this quiz from the Guardian.—ML

   

PRESENTED BY CUTS

Weather’s hot, wardrobe’s hotter

Cuts

It’s warmin’ up out there, and you know what that means. It’s time to dust off your summer styles. Or better yet, refresh those summer ’fits with Cuts.

Perfect timing, too, because their 25% off sitewide Memorial Day sale is happening right now.

Browse styles fit for the office, traveling, lounging—you name it. Shop bestsellers, new releases, and enjoy Cuts’ quality guarantee with all products.

It’s gonna be a stylin’ summer. Find a ’fit that’s fit for you.

WORLD

Tour de headlines

Nvidia CEO Jensen Huang smiling while presenting chips JOSH EDELSON/AFP via Getty Images

Nvidia sales rose 262% as AI keeps booming. The company whose chips are powering the AI revolution saw an even bigger jump in sales last quarter than analysts had expected: to $26 billion. That’s a good sign for the future of AI and probably for the entire stock market, on which Nvidia has an outsized influence. CEO Jensen Huang declared “the next industrial revolution has begun,” as Nvidia predicted $28 billion in sales this quarter. The company also announced plans to split its stock 10-for-1 next month.

Spain, Norway, and Ireland will recognize a Palestinian state. The three European countries announced the largely symbolic diplomatic moves yesterday as Israel continues to fight in Gaza, saying they hoped to help bring about a two-state solution. Israel recalled its ambassadors from the countries in response, and Prime Minister Netanyahu called the recognition “a reward for terrorism.” The US also opposed the decisions, with the White House saying the president “believes a Palestinian state should be realized through direct negotiations between the parties, not through unilateral recognition.”

Home sales unexpectedly fell last month. People aren’t buying houses, and it’s not because they’re splurging on too much avocado toast. High interest rates coupled with high home prices led existing home sales to drop 1.9% in April from March. The sluggish sales during the usually busy homebuying season come as the median price of a previously owned home rose 5.7% from last year to $407,600, according to the National Association of Realtors. Although it was the second consecutive monthly decline, analysts weren’t expecting it.

MEDIA

Vivek wants to make BuzzFeed great again

Vivek Ramaswamy Getty Images

The company that determined your love language based on your McDonald’s order is now partially owned by former Republican presidential candidate Vivek Ramaswamy. The MAGA-aligned entrepreneur recently bought a 7.7% stake in BuzzFeed, a regulatory filing revealed yesterday.

Ramaswamy plans to be an activist investor and push BuzzFeed’s board to enact “a shift in the company’s strategy.” It likely won’t be an ESG pivot: Even before becoming a politician, Ramaswamy criticized companies that embrace progressive politics, a phenomenon he decries as the “woke-industrial complex.”

Buying low

BuzzFeed’s stock initially popped 82% on the news but is still down more than 90% from its 2021 IPO. After dominating feeds with listicles and clickbaity headlines in the 2010s, the company struggled to reel in traffic after Facebook’s algorithm deprioritized news.

  • The company laid off 15% of its staff last spring, including its Pulitzer Prize-winning news division, which had failed to turn a profit.
  • This year, it sold its pop culture unit, Complex, at a $191 million loss and slashed its workforce by another 16%.

Lately, BuzzFeed has prioritized AI-generated entertainment content.

Non-activist investor…Independent presidential candidate RFK Jr. recently bought $24,000 of GameStop stock in a symbolic display of support for the “Ape retail rebellion.”—SK

   

TOGETHER WITH TUBI

Tubi

Reach the masses . Looking to get your brand noticed on a massive scale? Tubi can help. Choose the streaming service that reaches one in four US TV households—that’s 75m folks. That’s more popular than pickleball! It’s safe to say that no one has more die-hard fans than Tubi. See you in there.

REAL ESTATE

Graceland foreclosure sale paused

Graceland mansion with tourists out front. AFP/Getty Images

Your chance to bid on Elvis Presley’s Jungle Room was quashed by a Tennessee judge yesterday. As part of a fraud suit lodged by Elvis’s granddaughter Riley Keough, the judge blocked a foreclosure sale planned for Graceland that was scheduled for today. After that ruling, someone appearing to represent the creditor at the center of the legal drama told the AP it would drop its claim to the estate.

Who owns Graceland? It depends on who you ask.

  • After the iconic property’s sole proprietor, Elvis’s daughter, Lisa Marie Presley, died in 2023, a messy legal battle ensued between her daughter Keough and her mother, Priscilla Presley. The two settled, and Priscilla received a lump sum while Keough remained the sole trustee of Graceland.
  • Once Keough took control of the estate, Naussany Investments and Private Lending claimed Lisa Marie had failed to repay a $3.8 million loan from the company and had used the property as collateral. Keough and her lawyers called malarkey.

One of the red flags: In a signed affidavit, Kimberly Philbrick, who supposedly notarized the loan documents, said she’d never even met Lisa Marie Presley, let alone notarized her signature.

Big picture: The estate itself is worth about $5.6 million and brought in nearly $80 million in 2022 as a popular tourist destination.—MM

   

GRAB BAG

Key performance indicators

Citi's UK office SOPA Images/Getty Images

Stat: We’ve all made an embarrassing typo at work. But while we’re over here blushing about our your/you’re slip-up, Citi just agreed to pay £61.6 million ($79 million) in fines to UK regulators over a trader’s mistyped share sale order that caused a flash crash in European markets in 2022. The trader meant to sell $58 million worth of shares, but accidentally punched in an order to sell $444 billion worth. Citi’s system blocked a good chunk of the order but $189 billion worth made it through, causing $1.4 billion in erroneous sales before the trader canceled the order, spurring a brief sell-off across Europe.

Quote: “The residents of New Haven know the country’s best pizza is just a short train ride away and this claim is just a cheesy stunt.”

Congrats to New Haven for rising above its usual sobriquet “that place where Yale is” and getting itself officially declared the “Pizza Capital” of the US by Congress yesterday. But, not content to share the slice spotlight with its little brother to the North, NYC responded with a Bronx cheer as a rep for the city told the New Haven Register, “New York City is the premiere destination for pizza. Period.” Meanwhile, the Big Apple’s longstanding pizza rival Chicago, showed off its Midwestern niceness by welcoming the home of apizza into the fold. Its tourism marketing agency said, “We believe variety is the spice of life,” and that there’s even room for Detroit-style.

Read: The world’s revolt against bad tourists. (BBC)

NEWS

What else is brewing

  • The Department of Justice is expected to file an antitrust lawsuit against Live Nation today, at least in part over the dominance of Ticketmaster.
  • UK Prime Minister Rishi Sunak set a national general election for July 4 to determine who will rule the country. It’ll be the UK’s first such election for Parliament in five years, and Sunak’s Conservative Party looks poised to lose.
  • Families of children and teachers killed or injured in the shooting at Robb Elementary School in Uvalde, TX, have reached a $2 million settlement with the city, but they are suing 92 officers from the Texas Department of Public Safety, the school district, and individual employees.
  • OpenAI made a content licensing deal with News Corp. valued at $250 million to use the news publisher’s content to improve ChatGPT.
  • The Biden administration said it had canceled an additional $7.7 billion in student loans for 160,000 Americans as it works to chip away at the problem after the Supreme Court tossed its larger student debt forgiveness program.
  • More Americans report using marijuana daily than drinking alcohol daily for the first time as recreational weed becomes legal in more states, according to a new study.

RECS

To do list Thursday

Watch: How one pastel stick-maker creates so many colors.

Learn: What Vanderpump Rules can teach us about the financial woes of reality stars.

Listen: Apple Music released its list of the 100 best music albums.

Not ready for prime time: Take it from us—curating news stories is hard. Grok might need some help.

Shop: Get the Morning Brew Starter Pack—our classic hoodie, water bottle, and dad hat—for 40% off when you buy the bundle.

Intensify arousal: Savor each pulse with this doc-designed external labia vibrator. It’s adjustable to hug your unique contours, and each pulse brings you closer to paradise. Get 30% off.*

*A message from our sponsor.

GAMES

The puzzle section

Brew Mini: We’ve got a word chain, folks! Find out what it is here.

Three Headlines and a Lie

Three of these headlines are real and one is faker than the tomato garden you swore you’d plant this year. Can you spot the odd one out?

  1. New Zealand man filmed trying to “body slam” an orca in actions described as “idiotic”
  2. Leading US psychiatric association moves to classify writing notes app poetry as a form of therapy
  3. Dalai Lama allegedly pointed at “fat” cameraman and told him to “go on a diet”
  4. PetSmart searches for next “Chief Toy Tester” offering $20,000 to the new team members

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ANSWER

We made up the notes app poetry one.

Word of the Day

Today’s Word of the Day is: sobriquet, meaning “a nickname.” Thanks to Jaci Gerard from Tucson, AZ, and several other readers who sent the suggestion under their real names (we think). Submit another Word of the Day here.

         
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