Good morning for Daily Show. I'm Neil Freiman and I'm Toby Howell. Today, why a change to a comedy radio station is no laughing matter. Then, despite everything going on, the stock market can't stop hitting record highs. It's Wednesday, October 7th. Let's ride! You might be firing up Amazon during its big deal days event today and tomorrow, but before you start browsing, check out a new feature Amazon release that reveals what it thinks it knows about you. Called about you, the AI tool lists oddly specific preferences it's picked up from your shopping habits. People have been sharing their about use on social media, highlighting some funny assumptions like "uses phone in the shower to read kindle books and treats cats as biological children." Toby minds pretty tame, but I'm happy with the results. Amazon thinks I read diverse fiction and actively maintain indoor plants. About you is the Plato's cave of our time. It's this distorted reflection of your consumption that actually gets a lot closer to your essence than you'd like to admit. If you want to see yours, go to account shopping preferences, then click about you. Apparently, I prefer beans across many varieties and prefer umami-forward specialty ingredients. Some of the fun I think they got me. Now we're from our sponsor into it. Toby, you know how I've always been passionate about enterprise resource planning. Yeah, you talk about it a lot during meetings at happy hours during the impromptu speech you gave at my wedding. And I won't apologize for caring deeply about the problems facing finance teams and CFOs. They're stuck with a system that costs them a fortune and still won't let them report themselves. It's not right. Well, thankfully, there's the into it ERP for that. Exactly. Your team runs one close. However, many entities you have, they build their own reports, no consultant required and getting started doesn't take over your year, all without the legacy ERP baggage. You've been waiting all day to say that. To learn more, head to into it.com/erp. That's into it.com/erp. It's a bird. It's a plane. Nope. It's the S&P 500. The seemingly invincible index hit another all-time high yesterday crossing a total valuation of over $71 trillion. There's now up 14% on the year and 24% sense its bottom in March. Despite hurricane level headwinds from the war in Iran, driving up energy prices and a sharp increase in interest rates, the index notch is 28th record close of the year yesterday. The rally stems from those headwinds abating just ever so slightly. Both oil and yields fell yesterday with Brent crude dipping below the triple digits threshold and the 10-year treasury falling a couple basis points. Toss in a healthy dose of renewed optimism around the AI trade fueled by the rise of agents like Mews and you have a recipe for a high-flying stock market. Now all of those positive factors come with a degree of danger to them. The straight of hormones is still not fully open, keeping energy prices elevated and inflation fears nearby. Treasure yields too are still sitting right around levels not seen since the lead up to the financial crisis and this is not a broad rally. Mega cap tech stocks like Nvidia and SpaceX have been doing a lot of the heavy lifting but if you exclude AI from the market this year, the S&P 500's gains would be cut in half. At the beginning of this month, more than half the stocks in the index are trading below their 200 day moving average as a signaling turbulence beneath the surface. Now pretty remarkable to see the market rip like this in the face of seemingly so much adversity, call it the 2007 Patriots that ended well, right? Eli got so lucky, but like the Patriots, there are some superstars. There are three superstars in this particular market. They're the Westwell, Karani, Massen, Tom Brady of the market. They are Nvidia, Apple and Microsoft. Those three companies represent over 21% of the S&P 500. That is a record high. Have you ever seen anything like this? The trio in second place is from the 1980s. IBM, AT&T and Exxon mobile. They represented at their peak 13.4% of the S&P 500. Now we have three companies that represent over 21% of the S&P. So we really haven't seen such, we talk about concentration in the AI names. It's really concentration in three massive companies in video, which is staring down a $6 trillion valuation, Apple and Microsoft. This is really a rorshark test of a market because you can find optimism or pessimism, wherever you look, one optimistic thing is actually every midterm election since 1946 has seen a positive stock market return over the next 12 months. The average gain has been 14.4%. So if you just go back in kind of recent to not so recent history, it has been a rip-roaring time coming out of midterms. But then you look at the fact that if you took away that top heaviness of the market and you just look at the equal weight S&P 500, it's underperforming the Axel S&P 500 by the largest margin in over 20, 40 years. It just shows how much those big names are propping things up. And then if you still care about what Michael Burry of big short name has to say, he says that we're in the beginning stages of the grieving process around the AI trade. He says the stock market is quite obviously in its first stages of grief and denial. Per 2008, this stage lasts six to nine months. He wrote yesterday on social media. Take it with a great install. I don't know if anyone's listening to him anymore. So for everything that's been weighing down the market and we've talked about higher bond yields and oil prices at very elevated levels, there is a tailwind and the tailwind is profits. Companies are making so much money and we have a new earning season coming up next week. It's expected to be a blockbuster. 70 companies in the S&P 500 have already raised their earnings expectations for the past quarter. That's the most that we've seen since 2021. We're seeing earnings growth projected of 30% this quarter. That's after companies reported 50% earnings growth the quarter before that. So as much as stocks are inversely correlated to rising bond yields, when bond yields rise, we typically see stocks father is an equal force, an equal and opposite force of companies are making so much money and there is a positive correlation between profits and stock prices. So yeah, I just should win the Nobel prize in mathematics for that. Even though there is no Nobel prize in math, which is interesting in and of itself. So that's why you're seeing the optimism is because companies are just making so much money. Moving on on yesterday's show, we discussed the major shifts of foot in Spain and Brazil, but no soccer superpowers undergoing as much of people right now as France. Yesterday, more than a quarter million people marched in the streets, including France's largest union, in support of a student-led protest against under-investment in schools. Over the past two weeks, high school students have established blockades and demonstrated against what they say is a litany of problem at schools, such as overcrowding, teacher shortage, and crumbling buildings. The protests have sometimes turned violent and human rights groups have criticized the government for an over-aggressive crackdown. The problem is France doesn't have money to invest in schools. They don't have any money to spend period. In the backdrop of the demonstrations is a slow moving financial crisis that's turned to urgent in the past few weeks, with French bond yields soaring to highs not seen since 2002. That's juicing borrowing costs at a time when the government is up to its eyeballs in debt. Among peer countries, France's massive budget deficit is only topped by the United States, and it's now more expensive for the French met. And it's now more expensive for the French government tomorrow than it is in Italy and even Greece. Speaking of Greece, some are now comparing France's deteriorating fiscal situation to the Eurozone debt crisis of a few decades ago, with Greece as the poster child of financial mismanagement. Now, the once-reliable France is taking on the role of Europe's ugly stepchild. Toby, it's looking like laym is over there. What's surprising is how quickly this unrest exploded because if you actually go back to the beginning of this, it was September 21st. There was a single high school in a Paris suburb where students joined in with teachers to protest a lack of resources. And actually, the government met that school's demands and sent additional staff their way. You thought that it was done and dusted, but it clearly lit a spark amongst other students. And this is why we're seeing widespread protests in one of the largest marches we've seen in France in a long time. You combine that, too, with the backstop of this kind of looming fiscal situation. France's debt is nearly 120 percent of its GDP. The cost of servicing that debt is also expected to rise by 59 percent by 2030. So it's the exact wrong time to be taking on all this debt right now because we've said it a lot. Yields are extremely high and borrowing costs are very high. And the knives are out. You have one analyst at a French asset manager saying, "France has been this free rider in Europe for years if not decades. It has gotten away with fiscal murder. It worked as long as people were not noticing. Now people have started to notice." And then a law maker in Macron, the President's Central Party said, "In France, we have this reflex of always asking the state for a bit of magic money to pay, pay, pay." So yes, France, for years now, the government has supported this massive welfare state through all this spending. Macron came in a few years ago and said, "I'm going to cut the budget deficit. We're going to get our fiscal house in order." But then COVID came, but then the war in Ukraine came and he did all this fiscal stimulus and paid the payroll, paid leave for companies, and he cut taxes, and those were seen as temporary measures. But then And those just extended for
for years and now France is in this rapidly deteriorating situation. Yeah, Macron summarized the philosophy as whatever it costs and that mentality kind of pervaded a lot of those crises, which is why you see it in the situation that it is right now. Moving on, in the AI world, if you want access to intelligence, you generally have one of two options. Go for a top of the line American model like open AI or inthropic and pay a lot of money for the smartest of the smart or opt for an open source model. That's not quite as capable, but a lot cheaper. With the caveat that the best open models have generally come from China. But a third option is emerging. A startup called Reflection is American, open source and claims its new model beam can perform close to the best open AI and anthropic have to offer. Meanwhile, France-based missile is rolling out its new model called Leichonc that is also open source and could further disrupt the industry. These companies are betting that most people probably don't need the absolute smartest model for every single AI test. Sometimes Akea will do just fine instead of a Ferrari. Plus open models come with another big advantage, customization. Companies can download a model, feed it their own proprietary data and run it on their own computing infrastructure. A hedge fund, for example, could feed Reflection its trading techniques to build a cheaper, highly customized system without constantly sending that data through cloud or chat GPT. These new models show that the West is trying to catch up with China in the open source race. They're also a potential threat to the close model economics of open AI and anthropic. Simply put, they are disruptive. Leichonc. Don't they know that fat bear week was last week? But anyway, companies want cheaper alternatives. I mean, they are tired of you blowing all your cloud credits on a passion project. And I'm not looking at anybody, Toby. But you have all these companies saying we are saving so much money by using open source models. Pinterest, in its recent earnings call, CEO got up there and said, "Any CEO that's not taking advantage of open source models is almost certainly wasting a lot of their shareholders' money." They said that using open source costs the company less than 8% of what they would pay for the comparable models from anthropic or open AI, which run these close proprietary systems. And then DoorDash got up there and also said they are saving so much money from Chinese AI models for some of this work. And they're using these open source cheaper models for that workhorse stuff, not necessarily the vanity projects, but the stuff that just needs to get done. You need a lot of computing power to do. And why are you going to use a Ferrari when you can use a Kia? That is a big problem for American lawmakers and a lot of Western companies in general that work in the defense space or with the government because they don't want to be using Chinese models. The thing is, it's just so much cheaper. So now you have this third option potentially. Honestly, I was trying to find a car that was closer in status to a Ferrari because that makes it seem like there's a massive gap between open source and closed source models. There's really not. It is just at the absolute edges of the frontier that you will see slightly better performance from anthropic and open AI. So that is why it seems like a no brainer for a lot of companies say we can get 90% of the way there at a fraction of the cost, that's why we're doing it. One factor that I haven't mentioned so far is Nvidia. Nvidia is a big backer of reflection that open American model. Jensen Huang is a huge proponent of the open source approach. He has said in an open letter, ironically, open models accelerate innovation and enable sovereignty. And Nvidia wins no matter which way the industry sings swings. That is the caveat. That's the undercurrent to all this. If companies keep using cloud and chat LGBT, awesome. Those labs need tons of Nvidia chips. If companies start downloading their own open source models and customizing their own AI infrastructure, still has to run somewhere. They still need Nvidia chips. So they're kind of saying go ahead, go buck wild everyone. We are aligned with the open approach, but if the close approach does maintain its sovereignty over the industry, then we're doing just fine too. All right, we're going to take a quick break and come back with a spicy story about comedians beefing right after this. Neil, is your money ready? I'm not buying you lunch again. Not what I mean, but also please, I'm so hungry. What I mean is now is the time to get your money ready for a strong 2027. With Western Mutual's personalized approach to financial planning can give you the clarity and confidence to end the year strong and move into next with stability and peace of mind. They'll match you with a financial professional who can meet you where you are and ask the right questions to uncover blind spots and opportunities you may not have considered. Neil, would you consider yourself someone who follows trends? That depends. When it comes to marathon running, yes, but when it comes to toe socks, no. Well, you're not alone because advertisers are mixing trends to 70% of advertisers are raising CTV budgets in 2026 and much of that budget is being pulled straight from social. Yes, and social CPMs have increased pretty significantly. A lot of advertisers just see their dollars working harder on streaming and they often end up on Roku. It's easy to see why Roku's sales serve platform helps you go live in minutes and reach over 100 million logged in households. Plus, Roku is offering a $5,000 match on your first spend with Roku ads manager. Use code brew5k2accessyoffer at advertising.roku.com/mbd Mental health is no laughing matter. Unlike parents, those little guys are hilarious. Yes, but we're not talking about ferrets, we're talking about rula health. Rather than dealing with things later, they help you access quality, affordable mental healthcare with sessions costing an average of $15 with insurance. They vet their provider's monitor outcomes in over 90% of patients report feeling better and making real progress. They help you find a therapist for your specific needs with provider specializing in over 90 conditions. To get started, head to rula.com. That's R-U-L-A.com and take the first step. So this week I was scrolling mindlessly through Instagram, not above it. When a pattern caught my eye, comedians, instead of sharing sketches or clips of their stand-up, we're getting all serious. One by one, they were sounding the alarm that the middle class of comedy was at risk of getting wiped out and they put the blame on hugely popular comedian Sebastian Maniscalco and a rebrand at Sirius XM. Here's what's been happening. Four years, Channel 99 on Sirius XM satellite radio was called raw comedy, affectionately known as raw dog comedy, and they had this reputation for airing comedians that were lesser knowns. The ones not scoring Netflix specials, but the ones grinding it out in small clubs across America night after night. The royalties that came with the play on this channel was a financial lifeline for these middle class comedians to keep honing their craft while paying the bills. But earlier this year, Sirius XM decided to go in a different direction for raw comedy, bringing on the beloved Italian American comic, Sebastian Maniscalco, to let his name for a new rebranded channel, Sebastian Maniscalco's comedy radio. No one thought much of it until recent days when one advocacy group ran the numbers and found that the number of comedians played by the new channel was a fraction of the old and overwhelmingly concentrated in high profile comics, Dead or Alive. As a result, we're seeing a sweeping coordinated plea for Maniscalco to change tack because, according to critics, the future of comedy is at stake. It is brutal to piss off comedians because they're very funny and they'll bring their praise coded in humor, so the amount of comedians posting direct to camera videos on Instagram and just kind of making you laugh while bringing attention to a very real problem in industry has been illuminating. Raw comedy, though, wasn't necessarily meeting Sirius XM's listenership expectations and that's kind of the thing you have to think about. Sirius has actually no obligation to support the livelihoods of comedians. It sounds really coarse to say that, but their obligation is to try to put out channels that people like listening to. If they thought that the programming mix on raw comedy wasn't working, they technically have the ability to change that and try to serve a better product to their listeners. Again, there are other factors at play like you don't want to alienate comedians. You run comedian-based channels, but that is kind of the really hardcore business outlook on this, is that they don't owe these comedians anything. No, but if you're similar in a movie studio, are you going to do all super here on movies? No, people will eventually lock at that and the numbers are really, really stark. The advocacy group stand up for stand up. That sparked this whole thing. They did this analysis. They found that the active comedian roster on this particular channel, since Sebastian took over, fell by 66%. Back in April, the station was playing 812 distinct acts and that fell in September to just 275. The data showed that 75% of all channel spins now are concentrated among the top 50 performers, Jim Gaffigan, Kevin Hart, Ricky Gervais, but also people who aren't even alive anymore. Bob Hope, Johnny Carson, Joan Rivers, Norm McDonnell, and that's why you're seeing all this pushback saying, "These people don't even notice when they get a residual check, especially if they're not alive, for the person who's at the club every night is going around the United States, who's just trying to pay for diapers or pay rent, these checks are everything to them." And they think that Sebastian has pulled here, right? They brought him in to do work wonders with this channel and they're saying, "Sabashin, they're not even so mad at him." They're saying, "Look, I don't even think you know that this is happening, but now that that you do know that is happening, we'd love to.
like you to throw us a bone. - One comedian opened his books to demonstrate what a serious XM royalty check actually looks like 'cause I was curious how much money are these comedians making. And the estimate payout per serious XM play is actually $40, which doesn't sound like a lot, but if you're getting a lot of those over the course of a month, it does add up to something meaningful. He said a normal month for him can raise from $200 to $1,500. If he releases a big album, that comes out to $3,500. And he's part of a comedy duo. So technically the gross earnings is double that. So it is a meaningful income stream. That's the bottom line here, especially for a working comic. Your revenue is very uneven. Sometimes you're on tour, sometimes you're on the road making money, oftentimes you're not though. If you can have something stable coming in, it does make things like grocery rent. The normal bills are a lot easier to stomach. So it is a meaningful stream of income for these people. - And they think it'll resonate with Menescalco too, because he has a similar story. He was working at a waiter at the four, as a waiter in the four seasons hotel in Beverly Hills. And in between his shifts, he would go to the comedy store nearby. Do a 15 minute set and come back to finish waiting on tables. And now his rise has been absolutely meteoric. He was the first comic ever to play five straight shows at Madison Square Garden. And last year he sold 43.5 million dollars worth of tickets. The second highest grossing comedian on tour. - Let's move to the finish with some final headlines. A former CIA officer cooked up a scheme to steal gold bars that feels like a movie plot. David Rush pleaded guilty to one count of wire fraud for stealing $193 million in a scheme that involved the real estate, private jets, and nearly 300 gold bars. The secret behind Rush's scheme was a classified government program he invented while working at the agency. Rush set the program up to be supposedly so top secret that only a handful of people could know about to prevent anyone from double checking whether it actually existed. Rush used the fake program to convince a government contractor to provide $145 million to buy luxury real estate around Palm Beach. Rush also convinced people that his program required tens of millions of dollars worth of gold bars with the government ultimately buying 298 of them for more than $46 million. Rush told his colleagues he distributed the gold as part of the operation, instead prosecutors say he took it home and stacked it up in his basements. He's now facing up to 20 years into prison. Pretty crazy, Neil. - 35 watches too. 35 luxury watches. I mean, that's the thing that interests-- - It's too many watches. - I want to say, it says the guy who wears two every day. The crime that the CIA is probably most upset about is that he admitted that he also basically outed a spy to a foreign government. He shared the identity of a human source. That is like a huge no-no and obviously from stealing almost $200 million worth of stuff, but also just revealing a source to another government is something that you just absolutely can't do with the CIA. So I'll leave me a thing that this guy did wrong. That will probably get him sent to jail for a couple of decades. Next up, Chipotle is reportedly nervous about getting acquired and some are floating the idea that the buyer could be Starbucks. Last week, Chipotle added to its board and hired bankers because it's nervous about a takeover some are for reported. The slot bowl slinger is feeling vulnerable to activist investors after sales growth slowed and margins have slimmed. Some before mentioned that one rumor going around is that Starbucks may be thinking about stooping up Chipotle, which doesn't sound as far fetched as it may seem. Starbucks is led by Brian Nickel, the former CEO of Chipotle, and its international presence could help Chipotle expand abroad, plus coffee and burritos. It's a classic pairing. Toby, you like the synergies here? - I think there's something here. Obviously my mind started racing mocha mole bowl. Mole already can have a touch of chocolate in it. It just makes sense there. The PSL bowl, stay with me, pumpkin sofridas in lettuce and then make all the burrito in bowl sizes that you order correlate to Starbucks sizes. So you have to walk in there and say, can I have a venti burrito please or a grande burrito please to change how big and how much stuff they should put into it? - It would be amazing from a business news perspective from an actual business perspective who knows, but the fact that it's even being talked about or floated at all means that there's a minute chance of it happening, which would be awesome for our show. - I think every single thing you mentioned would make it worse. - Disgusting. - Yeah. Anyway, we close out every Wednesday show with suggestion box where Toby and I share a wreck to get you over the hump of the week. For my wreck, I was scrolling through wire cutters, hall of fame lists, their best reviewed products of all time, and wanted to highlight a few affordable products and brands that stood out to me. And maybe you'll find them interesting too. For a travel mug that keeps your coffee piping hot, they recommend Zoji Rushi, which I might add, also makes great rice cookers going at home. For a headlamp, black diamond spot, dubbed the Toyota Tacoma of headlamps, the Uniball Jetstream is their favorite pen. Their favorite air purifier is the Koei Air Mega Mighty, C-O-W-A-Y. If you're looking for a hammer, try the S-Dwing, describe as, quote, indestructible versatile and never obsolete in the world of bath towels, which could use an upgrade in my apartment. They recommend a front gate resort collection. Finally, for perfect scoops of ice cream, snack the zero 1020, which got me thinking Toby, does a proper home need an ice cream scooper, you know, if it has spoons? - I am trying to take notes, Neil. That was like 17 recommendations and one. - You can pause it. - For an ice cream scooper, I'm gonna say no. You know, you want everything in your kitchen to have a place and be used regularly. The ice cream scooper might be the least-used thing because a spoon just matches it, like bar for bar right there. So I'm gonna say all the rest of your recommendations, I'm accepting the ice cream scoop. - I'm not even recommending. I only brought it up to, 'cause I do want to spark a conversation about whether you need an ice cream scooper, because I think I'm on team, no ice cream scooper. But I'd love to hear from the other side and say, "Actually, this thing does wonders when you are scooping ice cream and not my jumps." - My recommendation is to check out at the front desk when you leave a hotel. Some of you may already do this because, of course, you check out, but a lot of you likely don't. One viral post on X from Eric Dungin set off this debate. He wrote, "So I've been a just leave hotel guy for years. I never check out, but my daughter works at a hotel now and says it makes her job significantly harder, basically on the level of not returning your shopping cart." And the reason why it makes things so much harder is the staff can't go into a room to clean it until you have a left and since checkout usually at 11 and check in is usually around two or three, that leaves a pretty tight turnaround schedule for them. Plus, you make it more annoying for guests showing up, how nice would it be if your room is ready before the check-in time. They can't naturally get ahead of things if you don't tell them you check out. Neil, this might be a very common sense rec to some or news to others. What part of the spectrum do you follow on there? - Well, admittedly, I haven't checked out at a desk in many years. I didn't know about this and now I feel terrible. So thank you. But now I will going forward because, obviously, it's a very simple action to take, you just say like, I'm out and they give you the bill. And you look it over and you're like, okay, everything's fine. But yeah, I didn't know about that. Putting it in context of the shopping cart thing, which I think is just the number one thing you have to do to be an active participant in society. Bring your shopping cart back. Do not leave it in the middle of a parking lot. The fact that this is on the same level of that, I'm gonna be a lot more conscious of it going forward. - All right, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Wednesday. To share your thoughts on the episode or anything else, send an email to
[email protected] or DM us on Instagram @ambidailyshow. Let's roll the credits, Emily Mill iron is our supervising producer. Raymond Lou is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake. Technical direction by Nina Miller. What's the deal with hair and makeup? And our show is a production of Morning Brew. - Great show today, Neil. Let's run it back tomorrow. Contentful in partnership with the Atlantic, release their latest report that maps out the five questions marketing leaders need to answer to succeed in the agentic web era. The report helps marketing leaders figure out what they need to decide when it comes to defining AI's role within their team, the risk of deferral if no one makes a call, what success looks like, and the review cadence needed to stay on top. To see all the findings, go to contentful.com/morningbrew.
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