Shein Limps to a $27B IPO & GTA 6 Extended Trailer Just Dropped

this episode is brought to you by palm olive family time isn't just the big moments it's weeknight dinners sitting around the table everyone talking all at once so when the plates are empty and the sink is full use palm olive ultra palm olives most powerful formula removes up to 99.9 of grease leaving your dishes sparkling clean and the new convenient pump makes cleaning even easier so you can spend less time tackling dishes and more time together shop now at palm olive.com good morning brew daily show i'm neil fryman and i'm toby howell today why the eyes of the world are on jackson wyoming then the fast fashion giant xian is limping towards an ipo it's friday august 28th let's ride just want to let you know i will be out of pocket october 9th and 10th because the tiramisu world cup needs taste testers and i plan on throwing my hat in the ring you should too this week the tiramisu world cup which is a thing announced they're recruiting 130 amateur taste testers or judges for the upcoming competition in italy open to anyone in the world however they're not going to take just anyone with a sweet tooth you need to know your stuff prospective jurors are being required to take an online test that asks 15 questions about the history and culture of tiramisu treviso the city hosting the event and the competition itself but that test is going to be a lot of fun so if you're interested in more information about the event go to the link in the description below and i'll see you next time they've been hosting this tiramisu world cup since 2017 and over time the founder of the event said that the public jury has provided a nice window into the shifting taste preferences over the last decade apparently tasters are favoring lighter less fatty recipes these days i'm not sure what a fatty tiramisu actually would taste like but it begs the question neil are you a tiramisu guy i they're it's fine i'm not sure what a fatty tiramisu actually would taste like but it begs the question if it's placed in front of me i will eat it to me it was kind of like tomatoes growing up i thought tiramisu was the nastiest thing in the world same thing with tomatoes but now i love it so it i feel like once your palate becomes more complex maybe it's still coming for you neil then you start liking tiramisu and now a word from our sponsor american express neil where's the most memorable place you've made a business purchase business happens everywhere these days like planes trains even during a friend's really long wedding ceremony well you should know that the american express business platinum card can reward your business journey you can earn 5x membership rewards points on flights and prepaid hotels book through amex travel.com and 2x points on eligible purchases in key business categories as well as on eligible purchases of five thousand dollars or more terms and cap apply so you can earn points on business purchases you're already making and redeem them for wherever your journey takes you learn more at go.amx morning brew and find out your welcome offer which could be as high as 300 000 membership rewards points that's go.amx morning brew offer and benefit terms apply let's begin with a trip to jackson hole wyoming and not just because toby has promised to pick up the tab at million dollar cowboy bar there at a lodge in the grand tetons fed chair kevin warsh will give the most important economic speech of the year a keynote address that will likely set the terms for his tenure as america's central bank chief historically fed chairs have used their speech at jackson home to the fed's annual summit to lay out how they view the economy from 30 000 feet far from getting into the nitty-gritty they typically expound on broader theories or principles that guide their decision making warsh may not be afforded the opportunity to wax poetic just a few months in charge he's already in a pressure cooker of threats both outside his control and by his own design inflation remains above target yet in warsh's most recent press conference he failed to convince investors he was committed to bringing it down meanwhile his strategy of saying a lot less than his predecessors has left wall street in the dark about future rate decisions if all that wasn't hairy enough treasury secretary scott besant's recent intervention to bring down bond yields puts him on a collision course with warsh's approach to let markets take the lead in july warsh previewed what he might say this morning with his signature vagueness if i could in the high mountain air in jackson wyoming i'd like to frame the big questions he said what's really happening with productivity what's really happening with demographics what's really happening to the global economy amid the shocks but the reality of the present predicament might prove too urgent warsh went on have made a decision whether it's going to be a big picture speech or whether it's going to be more traditional setup for all the action we're going to have between september and december he really backed himself into a jackson hole here because joseph broussalis who's the chief economist at rsm told cnbc we have the most unusual jackson hole monetary symposium in recent memory on deck because of warsh's unforced errors early in his tenure the market has now bid this up to be something that i think the federal reserve would rather it not be because kevin warsh has not said anything the fact that he has this speech coming up everyone is on pins and needles it actually goes back to the alan greenspan days which again warsh has cited alan greenspan as kind of the person that he wants to model his tenure at the fed after and alan greenspad famously was opaque where fed watchers would look at everything from his facial expressions to what he was wearing to how many paper were inside his briefcase just for some shred of information about what he thinks uh rates will do going forward warsh is adopting that mold so that is why so many eyeballs are on this specific jackson hole symposium because they just want some information out of them and when he does give information or when he does speak markets don't really like it go back to july 29th which was his second press conference as fed chair after this meeting where he held rates steady markets hated it we had long-term bond yields going way up we had the dow vomiting fell 1.6 percent over 840 points and you just watch the markets go as he was speaking and it's just this downward spiral because basically he admitted and acknowledged that inflation was a problem however he didn't provide any justification for why the fed didn't bring down rates at that particular meeting three fed members voted in that particular meeting to raise interest rates but warsh said we're not doing it and then didn't explain why maybe he'll go into more of his theories on inflation interest rates at this speech yeah the market really just wants a so-called reaction function uh it's very frustrating right now that he won't show what the conditions that would make him or the fed compelled to act they just want to know like all right it's fine if you don't want to give forward guidance you've made that very clear that you think that the market has become too reliant on what the fed says will happen going forwards you cannot tell us stuff but we would love to know what is the tipping point and what is the tipping point and what is the tipping point and what is the tipping point what specific data points or what conditions need to happen that would make you hike or you know uh not hike rates and that is what the market is just desperately looking for right now right now what is the prognosis looking ahead are is the fed going to hike rates and based off of uh kind of soft economic data over the past few months markets are betting that the fed won't raise rates at its september meeting going forward of course that could completely change based off of what happens today in the future so i think that's a really good point and i think that's a really good point and i think that's a really good point and i think that's a really good point jackson hole some fun lore about why this thing is in jackson hole because this is like the federal reserves annual symposium why is it being held in wyoming in this resort town well it goes back to the early 1980s the federal reserve bank of kansas city wanted to hold this annual meeting and they're not exactly high up necessarily on the on the pecking order in terms of fed regions they wanted to bring in paul volcker the fed chair at that moment they wanted him to have the the be the keynote speaker they're like what could we get what could we do to get him to be the keynote speaker what could we do to have him come and be the keynote speaker for us well let's put it in a location with really good fly fishing but paul volcker loved fly fishing so they're like okay let's go to jackson hole wyoming near the tetons and then we'll get paul volcker and then this will become a thing and it proved great let's move on it's stock of the week dog the week time this segment where we pick one stock that is embracing the dog days of summer and one stock that is already looking ahead to fall i won the pre-show game of canasta so i'm up first and my dog of the week is xian whose rise and subsequent fall lasted about as long as one of their t-shirts xian was the hottest thing in retail just a few years ago in 2022 riding high on the fast fashion wave it raised money at a 100 billion dollar valuation its model of using mountains of data to spot emerging fashion trends and quickly pump out new designs looked destined to succeed given their access to low-cost chinese suppliers xian brags that it adds roughly 4700 new items every day to its site and offers more than 2 million distinct clothing items overall revenue rose all the way to 42 billion dollars last year but since then its business has hit a wall this year it's set to grow less than one percent and has swung from making 3.4 billion dollars in profit to operating at a loss its demise couldn't come at a worse time xian is set to go public this coming monday on the hong kong stock exchange at a valuation of just 27 billion dollars neil what happened to this company how did it get to this point and how did it get to this point and how did it go from being the unquestioned winner of ultra fast fashion to going public at a quarter of its peak valuation one of the reasons that trump and u.s congress kind of blew up their business model and they exploited this loophole called the de minimis exemption which allows you to send packages into the united states that are that are under eight hundred dollars in value without tariffs so that was one reason why you would scroll on sheen and be like how is this so cheap well the the answer is that they didn't have to pay tariffs or taxes when sending it From the-- Chinese plants into the United States, but as part of the one big, beautiful bill act of July 2025, Congress voted, it was part of the bigger tax package, but Congress voted to repeal the de minimis exemption and then phase it out entirely come July 1st, 2027. And the other issue that hit Xi'an's business is that everyone started to copy them. Remember PPD, which is a Chinese e-commerce company, you probably don't know them, but you do know Timu. It's essentially the same business, a very ultra cheap marketplace. So Timu launched in 2022, 2024, Amazon launched haul its own ultra cheap shopping offering. And then TikTok has kind of been the double-edged sword that Xi'an has faced because TikTok was one of the big reasons why it became so popular, especially in the United States, because people would do these Xi'an hauls and it was just so cheap. But then TikTok looked at all the commerce that was going through their platform and said, what if we just launched our own shop? And TikTok shop has now overtaken Xi'an in the U.S. when it comes to sales. So those competition comes for everyone. And when you're no longer the only fish in the ultra fast fashion pond, then you start to see kind of the slowing growth that we have seen out of Xi'an. They're still huge. Their sales of $42 billion puts them among the world's top five apparel and footwear companies in terms of sales. They are not giving up. There's still a $27 billion company that's going public. They're still going to be the top five in Hong Kong on Monday. But they are pivoting their strategy, which has been interesting to watch. Remember, they recently bought Everlane, which was this more sustainable forward American fashion brand. And what their strategy is now is they want to be what they call the Amazon Web Services of the fashion industry. And yeah, sure, everyone wants to be that because that's a huge business. But they want to just kind of be the back end for everything. They know they have all these sprawling web of contract manufacturers. They have the distribution. They have the and so they want to put other labels and fashion brands more forward than their own brand. And they think that's the key to success moving forward. It's just a tough story to tell right now, because when you see revenue growth falling from 21% to 8% to 1%, is that really a business you want to invest in? That's the hill that they have to climb as they go public next week. All right, let's talk about maybe a business you do want to invest in. My stock of the week is Revolution Medicines, which lived up to its name and just revolutionized treatment for pancreatic cancer. In a health milestone decades in the making, Wednesday, the FDA approved its new drug for treating the devastating cancer, which doctors say will be an absolute game changer for patients with one of the most grim medical diagnoses in the world. The drug, sold as Rasenq, helped subjects with advanced pancreatic cancer live nearly twice as long than if they just received chemotherapy. In a late-stage study, patients who underwent chemo, the standard of treatment currently, lived 6.7 months on average. Those who received Rasenq lived over 30 years. When those results were revealed at a big cancer conference this spring, it reportedly drew a standing ovation nearly a minute long, and some in the audience even cried tears of happiness. About 67,000 people in the U.S. are diagnosed with pancreatic cancer each year, and the outlook is dire. About 7 in 8 die within five years of diagnosis. This new treatment gives them a literal new lease on life. And, of course, it's been a huge tailwind for Revolution Medicines, which has had no approved products up until now. But Wednesday, with investors salivating at the business potential, shares are up nearly 180% this year. I do want to talk about the scientific breakthrough that they were able to make. You love doing that. It is. It's very interesting to me. So, there has been this big effort to attack CRAS, which is this cancer-driving protein that a lot of people considered undruggable. The reason why it's undruggable is because it's a very smooth protein, and you need some sort of surface imperfection to latch onto to treat. Right. Or attack a protein like that. And CRAS drives nearly all of pancreatic cancers, a lot of lung cancers, a lot of colon cancers, some other tumor types. So, it's always been kind of the white whale for a lot of these oncologists. The fact that they were able to do this comes down to molecular glues, actually. There are certain compounds out in nature that do find a way to attack float-flat proteins. They never found one that actually worked on CRAS, but they're like, what if we just made our own? So, there's a synthetic molecular glue now that allows them to attack this protein, which is why this breakthrough happened. And again, the possibilities are endless now. They still think that right now it's a one-two punch. You still will probably need some chemo and this drug. But eventually, going forward, they're like, maybe this is the primary treatment. You don't have to go through chemo, which is why everyone is so excited. And it's expected to be one of the fastest drug launches ever. Let's talk dollars and cents. This drug has a sticker price of nearly $40,000. $40,000 a month, or about $478,000 when you take it for a full year. You're not going to actually pay that. The insurance is going to cover most of that, and there's going to be varying out-of-pocket costs for patients. But for Revolution Medicines, it's expected to generate more than $9 billion in sales by 2032. It was also made known for a lot of people by the fact that it's taken by the former U.S. Senator Ben Sasse, who has gone on tour. Tons of podcasts and talking about his sort of end-of-life journey. And he is on this particular medication. And so a lot of people learned about it that way. So he also showed some of the side effects, because there are side effects, including gastro issues and rashes that break out. If you look at him, he has these rashes all over his face. So there are side effects. But on net, this is an incredible breakthrough that doctors are saying. They're weeping, literally, saying, we've been working at this for decades. Now it's finally here. All right. We're going to take a quick break and come back with a story about international travel right after this. Every day, shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard, too. Vanguard Investor Choice makes it easy to set your proxy voting preference for your eligible Vanguard index funds. In just a few clicks, you can have a say on important shareholder topics like executive pay and director elections. Visit Vanguard.com slash Investor Choice to learn more. It's your shares. It's your voice. It's easy. Vanguard investors own shares of their index funds, and those funds own shares of the companies they invest in. Vanguard Marketing Corporation Distributor. Do you ever get stuck when you're writing or researching for the show? All the time. That's why I started using Ultra Pouches. They're clean, plant-powered pouches that really help me get in the zone thanks to clinically proven nootropics and adaptogens. Ultra is the ultimate guilt-free pouch delivering instant focus and mental clarity without nicotine or caffeine. New customers can use code MBD to get 15% off at TakeUltra.com. That's TakeUltra.com for 15% off with code MBD. After you purchase, they'll ask you where you heard about them. Please support our show and tell them our show sent ya. What is happening? I'm just excited for what a howling good time families can have at any of Great Wolf Lodge's 22 locations across the country. Splash away in the indoor water park where it is always 84 degrees, there's a massive wave pool, a lazy river, and tons of water slides. There's also a bunch of great dining options, spacious suites, and complimentary daily events like nightly dance parties all under one roof. Book your stay at GreatWolf.com. That's GreatWolf.com. If you're craving a Philly cheesesteak in the morning but a Vienna sausage at night, then you're in luck. Philly to Vienna is a route that's among the several. New overseas flights announced by American and United this week. American's VP of Network Planning, Brian Zotnes, said demand for premium international travel continues to rock and roll with the carrier adding Philly routes to Reykjavik in Porto, two JFK flights to Amsterdam and Nice, as well as legs from Charlotte to Barcelona and Chicago to Tokyo. United is pushing their global coverage even further, betting travelers increasingly want smaller, less obvious European destinations as opposed to just Paris and London. It's adding flights to Okinawa, Sardinia, Ibiza, Valencia, Marseille, and Toulouse, among others. Not to be left behind, Delta launched its first-ever flights to Malta and Riyadh this year. There are a number of factors driving the expansion, namely the leisure travel season is stretching longer and longer. United CEO Scott Kirby said the new international destinations increasingly operate all the way through October, which has become one of United's best month of the whole year. Plus, United is seeing a rise in so-called open-jaw trips, where you might fly into Rome, but after traveling around, fly out of somewhere else in Italy, making a dense network of destinations within the same region more valuable. Neil, should we do an international pod in the Slovenian capital of Ljubljana soon? I've heard great things about that particular city. I'm not ready to say goodbye to this summer. We're already talking about next summer. I guess it's always good to plan ahead. What's making this possible is a particular plane. It's the Airbus A321XLR. The A321XLR has an extra-long range, and it has the ability to go up to 4,700 nautical miles. Typically, this would not be economic to take people from Philadelphia to Porto in a big, wide-body, double-aisle plane like a 777. You just would not make money on it if you're United or American, but this plane comes along. It's a single-aisle plane. It can go far well across the Atlantic. They're putting so many premium seats in it. They're putting even lie-flat seats in this plane. like typically this is a plane that you would take from, I don't know, Dallas to LA or Newark to LA, something like that. But now you're going overseas with it. They're putting all these premium seats in it. So really it's this particular plane that unlocks a lot of these secondary locations that not necessarily would be sufficient demand for the bigger planes. But now we got the A321XLR. You were also kind of giggling while looking at these routes yesterday because a lot of them are very specific to the companies that are involved. The one that you pointed out was Dulles to Toulouse. Airbus is headquartered in Toulouse. Airbus's US office is in Virginia. So United is literally explicitly targeting Airbus and the broader aerospace industry's business travel with the one route that they created. The other one too is Newark to Luxembourg. Americans are, sorry, Amazon's European headquarters are in Luxembourg. Amazon's second US headquarters are in Arlington, Virginia. So maybe there's a opportunity there for business traffic between those two regions as well. It is crazy that they see, they're probably just looking at their data and going, obviously these execs need to get back and forth somehow. What if we just created routes custom targeted to them? We need to see this data, this algorithm to see how they figure out where they're going to fly because it must be fascinating. But I think overall the takeaway from these new flights coming next summer is people want to go to the secondary cities. They want to go to maybe Porto instead of Lisbon. They want to go to Nice instead of Paris. They want to go to Okinawa or Osaka instead of Tokyo. Typically you would have to go through those major cities to get there. Now, because of the A321XLR, not just that, but a lot because of more demand, these airlines are trying to get us to the secondary cities that we want to go to on direct flights. And I'm absolutely here for it. We're kind of seeing the strategies of American airlines, not meaning American airlines, but airlines that operate in America. God, that's confusing. Start to crystallize here. You are seeing United kind of blanket the world with obscure destinations. They've added 49 new destinations and they say that they're the only U.S. airline flying nonstop to 32 of them. So they really are going down that second city rabbit hole. Delta still wants to be the premium, still the most profitable U.S. airline. They're probably not going to expand their footprint as quickly because what they're doing is working right now. And America is going to be the most profitable U.S. airline. American is just trying to catch up. Basically, they're the only U.S. airline serving Vienna. So maybe they're taking a page out of United's playbook saying we can find riches in the niches right now. They love the A321XLR. They think it makes their routes commercially viable. So you are seeing that the three headed race right now between the major airlines start to crystallize their competitive strategy. Don't forget Alaska Airlines. I know as a person who's a big fan of Alaska Airlines, I know I'm a big fan of Alaska Airlines. But if you're a big fan of Alaska Airlines, I know you're a big fan of Alaska Airlines. So now you can go on Alaska Airlines from Seattle to Athens, London, Paris, Rome and Reykjavik. All right, let's sprint to the finish with some final headlines. To the good people of Rochester, you will soon be living officially next to Lake America. Yesterday, President Trump signed an executive order that changes the name of Lake Ontario to Lake America, his latest diss amid an escalating trade war between the U.S. and Canada. And he's going to be living next to Lake America. So I'm going to Canada. Canada has been ripping us off for a long time on trade. Very sadly, the president said, as he directed Interior Secretary Doug Burgum to update the geographic names information system to reflect the change. Just like when Trump updated Gulf of Mexico to Gulf of America, the new name will be included in official U.S. government documents and communications. But states, private companies and mapmakers and other countries can choose to follow along or not. Don't expect Canada to. Melanie Jolie, Canada's minister of industry, called Trump's name change and said, quote, We'll always call it Lake Ontario, period. So obviously, the first thought was what happens to the HOMES acronym for remembering the Great Lakes. We've talked about it when he floated this idea earlier this week, and we thought it was going to go to Hames, which sucks, obviously. But shame is kind of good. Actually, you just rearrange some of those letters and now kids are going to learn shame in school. So we've addressed that concern. Obviously, this strategy of renaming bodies of water every time you get into a school, you're going to learn shame in a straight dispute. I don't know how if somebody would call that shame. Yeah, exactly. That might be a shame right there. But also, we got into the debate earlier. You wanted to power rank the Great Lakes. You had a list. Let's do it. Yeah. I mean, Michigan is the first, obviously. Then I think Superior because obviously Superior, it's just the wild, the UP, Duluth. Biggest lake by volume in North America as well. By volume, not by area. Superior is amazing. Then I'm going Erie because you have Detroit and Cleveland on it. Then Ontario. And finally, Huron. It's the only Great Lake that I haven't seen with my two eyes. I almost had the exact same list. I had Erie third because it sounds like Erie. I had Huron fourth because it sounds like Heron, kind of. And then Ontario slash America is last because it doesn't sound like anything to me. Very scientific. Very scientific. All right, let's move on. If your Netflix crashed yesterday afternoon, it wasn't because your internet stinks. Millions of content starved video game fans were loading up the service for a first look at Grand Theft Auto 6. At 3 p.m., Netflix dropped the longest official look yet at the game, a 27-minute special made entirely from PS5 footage showing off real gameplay ahead of the game's November 19th release. People were chomping at the bit for this, so much so that Down Detector showed Netflix error reports spiked right before the premiere. This was a unique gameplay release. Netflix got a six-hour exclusive window before Rockstar could release the footage on YouTube. Giving the streamer time to bask in the cultural moment and the eyeballs it brought. It also brought some desperately needed control for Rockstar. GTA 6 has been hit by a wave of leaks by hackers, forcing Rockstar to spend the week playing whack-a-mole with leaked footage. But Neil, after seeing the gameplay, the hype remains enormous. I am not a gamer. I don't even own a PS5, and yet I kind of wanted to play this game. Yeah, same. It looks incredible. And a summer in Edinburgh, Scotland, from the game developer itself about the particular gameplay. So they saw stuff that we haven't seen, and the reviews were incredible. Here's the New York Times. I was wrestling with the sense of elation that comes from glimpsing a work of art that promises to marshal one's full attention. A wave of positive emotions swept through the room, tears edging down faces. And here's IGN. The scope of what I saw is even more colossal than I was prepared for. It's set in a world so far. I'm not a gamer. I'm not a gamer. I'm not a gamer. So rich and ready to explore that it's not just a game. It's a parallel universe. I mean, the productivity of the world is going to tank come November 19th, probably for given the expansive world that they're talking about, probably for weeks or months after that. It's crazy that the two stories that have involved standing ovations and tears running down their face is a massive pancreatic drug breakthrough or the release of GTA 6. All right, finally, you simply cannot make this up. And I promise I didn't. The latest tropical storm to form in the Atlantic Ocean is named Dolly just a few days after the death of Dolly Parton. The storm is not expected to become a hurricane, but still is on course to drench some Caribbean islands this weekend. It's pure coincidence. Dolly is the fourth named storm of this year's Atlantic hurricane season as part of a naming convention that was set decades ago. Still, it does feel like one final joke Dolly Parton is playing on us. So I was looking ahead at the naming cycle to see what other names and maybe what other celebrities we should keep our eye on. And the next ones up are Edward, Faye, and Gonzalo. Not sure if there are many celebrities in there. And if there are, I hope you are in good health. But it's also just cool to see the naming conventions for storms. You want short names for ease of use and communication. You need them to be easy to pronounce, appropriate significance in different languages, and unique. The same names cannot be used in other regions. So those are kind of the criteria that go into naming these storms, at least in our Southern Hemisphere. I just looked up and Northern. Northern Hemisphere, sorry. I just looked up and Neil is not a part of the naming database, which I think is good. At all? So now you're coming in. No, there's. Neil has been used for three tropical cyclones worldwide, one in the West Pacific Ocean and two in the South Pacific Ocean, N-E-I-L. So I think I'm safe for now. N-E-A-L. Remember people, it's N-E-A-L. All right. That is all the time we have. Thanks for starting your morning with us. Have a wonderful Friday and an even better weekend. To share your thoughts on the episode or anything else, send an email to morningbrewdailyatmorningbrew.com or DM us on Instagram at MBDailyShow. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Liu is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake. Technical direction by Nina Miller. Hair and makeup is already thinking about next summer. Devin Emery is our president and our show is a production of Morning Brew. Great show today, Neil. I wish you all well. We'll see you next time. Savings at the Home Depot and gear up for fall projects with the right tools to keep your projects. It's moving.