Episode 535: Neal and Toby discuss if recent market activity are reasons to believe the US is losing its lead as the most sought after financial destination. Then, a report says OpenAI may be planning a top, top-tier AI agent that could provide PhD levels of research for a hefty price. Also, Abrdn firm is returning the vowels back into its name after years of online ridicule. Meanwhile, sports analytics and Stephen A. Smith are the weekend’s winners. Finally, a preview of the week ahead. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow There are risks involved with investing in ETFs, including possible loss of money. ETFs are subject to risks similar to those of stocks. Investments focus in a particular sector, such as technology, are subject to greater risks and are more greatly impacted by market volatility, than more diversified investments. Invesco Distributors, Inc. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Is the US losing its dominance in global markets?
Then, can an AI agent that costs $20,000 a month ever be worth it? It's Monday, March 10th. Let's ride. Let's ride.
Good morning. Welcome back to the week. It might be a rougher start to the day than usual, especially if you're a parent of a young kid or dog, because overnight on Sunday, Americans lost an hour of sleep as daylight saving time began. The idea of daylight saving time is to add more sunshine in the evening over the summer to encourage more activity and get us all to spend more money.
Chapter 2: Why are some US states not observing daylight saving time?
But here's a fun fact. Not all 50 U.S. states observe daylight saving time. There are two holdouts, Arizona and Hawaii, for whom Sunday was just a normal day. Toby, why don't they spring forward?
I am so glad you asked, Neil. For Arizona, it's hot. Summers in particular are very hot. So when the clocks spring forward and sunset is an hour later, that would keep people out later during hot months, and no one wants that. State leaders also believe that springing ahead and falling back would increase efficiency. energy consumption because of all those extra AC costs.
As for Hawaii, it is close enough to the equator as is, so it gets plenty of sunlight without shifting time, so no need to go around changing clocks twice a year. So if you needed any extra motivation to move to Hawaii or Arizona, add the stasis of their clocks to the list. Now a word from our sponsor, Invesco QQQ.
So not sure if you guys know this, but Neil and I get the same exact smoothie every single day for breakfast.
Every morning after we finish the podcast and hit the gym, Toby snags a raspberry almond butter smoothie while I go for a blueberry.
And I'm talking every single day since the podcast launched, which is over two years ago at this point.
Which is why Invesco QQQ ETF is such a welcome break from that parade of sameness.
It has 100 of the most innovative companies, so it's not just the same raspberry and blueberry companies. You're getting a variety of innovation across sectors.
Healthcare, communications services, industrials, you name it, this ETF has it. So we start changing up our orders then? Nah, leave the variety to Invesco. With Invesco QQQ, you can rethink what's possible. Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit Invesco.com for a prospectus with this information. Read it carefully before investing.
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Chapter 3: What are the implications of OpenAI's PhD-level AI agent?
Now, on Friday, as stocks were falling, we did receive some economic good news. The jobs report came out, which we previewed Friday morning. 151,000 jobs added unemployment at a very low 4.1 percent rate. Fed Chair Jerome Powell was asked about the state of the U.S. economy, which has had a greater deal of uncertainty recently. He said despite elevated levels of uncertainty. The U.S.
economy continues to be in a good place. President Trump was also asked about the faltering stock market and increased business concern in an interview on Sunday. And he said, I can't necessarily rule out a recession. I'm in a period of transition now. We're trying to move fast and break things here. We're in a period of transition.
And he, you know, acknowledged that there was a little turbulence now, but said that, you know, over the long term, things would be all right. So there's what you're seeing from U.S. policymakers over this slight changing of the guard here.
And, of course, write the U.S. off at your own peril because we have seen in the past that sentiment can shift literally on a dime. It took three weeks for the S&P 500 to regain all-time highs after that deep-seek freakout that everyone had that hammered markets early in the year in January. So it's definitely one of those things where you can't just say, ah, the U.S. is on the decline line.
invest in Europe, invest everywhere else except for the US. It's still the biggest game in town, but now it's clearly not the only game in town anymore. Picture this, you're running a research lab and you have two candidates for an open position. One is a PhD student, eager, smart, and maybe a little sleep deprived, but affordable at around $30,000 a year.
The other, an AI agent with no student loans, no coffee addiction, and a $20,000 a month price tag. That is the choice that OpenAI is putting on the table. They're reportedly working on a PhD-level AI that can perform high-level research tasks, analyze massive datasets, and write your next academic paper if you are willing to pay the equivalent of a six-figure salary for it.
OpenAI isn't just saying its models can assist with research or automate basic tasks. These premium models will supposedly operate at the level of and maybe even replace highly trained experts. They're reportedly also working on tiers, a $2,000 per month Knowledge worker assistant, a $10,000 a month software developer agent, and at the top, that $20,000 PhD level researcher.
Neil, none of this pricing is confirmed yet, but it does shift the conversation around AI replacing classic white collar workers to a much different one. Because if these models can handle problems that typically require years of specialized academic training, that could be worth the eye-popping price tag.
To understand why these companies are rolling out AI agents at a price tag of something like $20,000 a month, you kind of have to look at their balance sheets. OpenAI lost about $5 billion last year. It is raising even more money now. It is...
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Chapter 4: How is the vowel-less branding trend affecting companies?
The poster child was Aberdeen, pronounced Aberdeen, but written like a CAPTCHA code with no E's, who during that time debuted its new modern, agile, digitally-enabled brand, ditching its E's to try to show how hip and cool the global investment company was. The reaction? Universal mockery. The backlash was so strong that Aberdeen's chief investment officer
actually complained about, quote, corporate bullying. But at long last, the A-E-I-Os and U's are back. Last week, Aberdeen announced it is bringing back its vowels and rebranding as Aberdeen with all the E's in their rightful place again.
Neil, despite finally seeing the light when it comes to vowels, Aberdeen is still hopping on another trend of keeping their name in all lowercase letters like a teenage texter. comes to rebrand.
And there certainly was a trend of ditching vowels in your name. If you look at companies born in the midst of the 2000s, you had Grindr, which is the D-R at the end, Flickr, Tumblr, Twitter in its first iteration was just T-W-T-T-R. Now you have this 200-year-old investment firm that wants to, you know, play at the cool kids table. They ditched their vows.
They got corporate bullied, which is probably true. And now they are going back. So, yes, it does show the perils of chasing certain trends in branding, especially when you're a financial institution that doesn't necessarily need to be cool. You want to maybe project stability and security and authority rather than, you know, these other companies which are more social media based.
I do think that the issue was that they were just chasing a trend that had already passed them by at this point. I mean, all those companies you mentioned were founded in like the early 2000s. Aberdeen did it, you know, in 2021. So they were, you know, decades late, if you really want to consider that. It would be like, you know, wearing skinny jeans now.
Like, oh, it used to be a trend, you know, 10 years ago, the kids used to be wearing it. But now the
opposite is true so that it does show the perils of like being too late on a trend you just look way way worse it also kind of maybe joins the branding disaster hall of fame there's been a lot of those i mean i think back to 2009 tropicana tried to change this iconic orange juice logo two months later the orange juice logo is back because everyone hated it twitter actually was twttr but then
finally got the domain, which added its vowels back. And then just recently, I think of Jaguar, which has been getting skewered. It's been getting, you know, absolutely made fun of online because their rebrand people have not liked at all. So you run this risk of every time you try to change something, there is a risk that people really don't like it and you have to walk it back a few years later.
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Chapter 5: What are some examples of successful and failed rebrands?
My favorite is Dunkin' Donuts. Remember when Dunkin' Donuts dropped donuts and everyone again, you know, jumps on their backs and say, how could you do this? But now Dunkin', everyone calls it Dunkin' and it's done really well. Like the stock is up since they did that rebrand. So I do think you are right for every, you know, failure. There are just as many successes.
Up next, it is time for our winners of the weekend. Have you taken our morning market trivia quiz yet?
Top scorers will receive a custom prize, a $200 Amex gift card, and a newsletter feature.
If you want a sneak peek, here's one of the questions right from the quiz. Which of the following is not a major index? A. Nifty 50 B. S&P 500 C. DKXI 40 or D. Nikkei 225
If you have the answer, go to www.morningbrew.com slash morning-market-trivia to test your stuff with the morning market trivia quiz. Who knows? You could end up on the leaderboard. Like I said, top scorers will receive prizes and a feature in the Morning Brew newsletter. I scored a 12 out of 15. I got 11 out of 15.
Head on over to www.morningbrew.com slash morning-market-trivia and see if you can beat our scorers and win some goodies.
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