Tech Rout Wipes Away $1.1T & Another ‘DeepSeek’ Moment?
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, carnage on Wall Street as stocks plummeted to their worst day this year. Recession fears are real. Then who is Mark Carney, the banker turned prime minister of Canada? It's Tuesday, March 11th. Let's ride. Let's ride.

Five years ago, March 11th, 2020 is a day none of us will soon forget because it was when you realized, oh, this pandemic thing is really going to shut down the world, isn't it? On that day five years ago, the World Health Organization declared a worldwide pandemic. The NBA suspended its season after jazz center Rudy Gobert tested positive for the virus, leading to mass confusion in the arena and coronavirus.

Tom Hanks and Rita Wilson posted a photo on Instagram sharing that they got COVID-19 while in Australia. Toby, that evening is absolutely seared into my memory. Hard to believe it's been five whole years. And we're going to take a deeper dive into it with a Toby's trend later in the show, but I'll add my own personal anecdote as well. Neil, you interviewed me for a job at the Morning Brew offices in Phi Di in late February of 2020. And that turned out to be the last time I set foot in a Morning Brew office in

until we started this podcast three years later. I'm sure lots of people graduating around that time had a similar experience. Hey, grab your computer. We're going to work from home for a little bit, which turned into a week, which turned into a month, which turned into a lot longer. But you are right. Absolutely seared in a lot of people's memories.

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Cue the rains of Castamere because yesterday the stock market held its own red wedding. A weeks-long decline in stocks turned downright vicious, with the Nasdaq plunging 4%, wiping out $1.1 trillion in value for its worst single trading session since 2022. The S&P 500 tumbled 2.7%, touching lows it hasn't seen since last September, and the Dow fell more than 2%.

Thank you.

of tariffs and cutting government spending could require economic pain for long-term gain. Treasury Secretary Scott Besant previewed a, quote, detox period for the economy, and the president himself on Sunday did not rule out a recession, saying the economy was going through, quote, a period of recession.

transition. Investors certainly placed their bets as though a downturn might come. Wall Street's preferred fear gauge, the VIX, popped to its highest since December. Bitcoin fell below 80,000 and traders sought cover in bonds, sending Treasury yields lower. Toby, it was a bloodbath out there.

Yeah, everyone got wrecked. I mean, every single part of the market from oil to Bitcoin finished down on the day. And it was due to that speculation that maybe this administration is willing to tolerate a lot of short-term economic pain for those long-term policy goals. Contributing to the sell-off too was

of these algorithmic-driven funds were offloading stocks aggressively. Some analysts believe that selling pressure from these funds just kind of snowballs over time, and it forces basically a market slowdown. Retail investor sentiment as well is at lows not seen since three years ago. For the first time since 2022, a majority of retail investors expect stocks to

declined over the next six months, and then less than 20% of individual investors believe stock prices will rise. So you are just seeing this massive vibe shift. People are calling this a very headline-driven market right now, and we've gotten some headlines of, like, expect maybe some economic short-term pain here, which is what contributed to this decline.

Pretty big. I mean, you called it the red wedding. I think that's a perfect encapsulation of what happened yesterday. There are a lot of headlines warning of a recession or a slowdown, but there are some actual data points that we got after the market closed that sort of crystallized these fears. Delta Airlines got up on the mic to report its earnings, and they said they saw a pretty significant shift in sentiment in February. Consumer spending started to stall. They cut their profit guidance in half.

They also said that business travel has softened where there are places where people just aren't quite sure what's going to happen. Companies are pulling it back. That's chief executive of Delta, Ed Bastian. So they're starting to see this uncertainty make its way into actual balance sheets. And then one other company I want to call out to is Tesla. Tesla fell 15% yesterday. That was its worst single day drop since September.

September of 2020. Tesla has been falling now for seven consecutive weeks. That's its longest losing streak since it debuted on the NASDAQ in 2010. It has now lost about 50% of its value since it peaked in late December. That's $800 billion dead, gone, wiped out from the market cap. And it really has been one of these...

periods in Tesla's history that it's never seen before. I mean, it's the longest stretch of losses Tesla has recorded in its 15 years as a public company. And a lot of the issues it is facing are, you know, core to their business. You know, it's a lot of competition from Chinese automakers. Europe has kind of soured on Tesla, even as the overall EV market is expanding there. But a lot of them are tied to, you know,

Elon Musk's activities in Washington as well. You're seeing some Tesla dealerships being the subject of protests. You're seeing cyber trucks being the subject of vandalism. So it really is one of these things where it's both existential threats, not existential, but threats to its business model, but also threats due to Elon Musk's presence in politics. A number of

analysts from banks, including Bank of America, Goldman Sachs, Baird, cut their stock price target on Tesla, citing all of those risks you mentioned. Elon Musk was asked on Fox yesterday how he's dealing with running his businesses while he's involved in all this stuff in Washington, D.C. And he responded,

He responded with great difficulty and then sort of paused for 30 seconds. That kind of encapsulates what's going on over at Tesla. They need to get things back on track soon. So Canada has a new prime minister. And if you've never heard of Mark Carney, don't worry. You're not alone. Up until recently, 93% of Canadians couldn't pick him out of a lineup. Seriously, it's a big deal.

A nationwide poll found that over 9 out of 10 Canadians had no idea who Carney was when showing his picture. But now he's suddenly in charge of the country and the job is simple. Keep Canada from becoming America's 51st state while also steering it through a trade war with its neighbor to the south.

Carney is a former central banker who ran the Bank of Canada during the 2008 financial crisis and later ran the Bank of England through Brexit. So he's got plenty of experience managing economic chaos. And as he steps into the PM role, it looks like he's keeping the streak of managing through chaos alive. Trump has slapped 25% tariffs on Canadian goods, threatened even more on lumber and dairy, and openly suggests that Canada should just join the U.S.,

Carney has been striking a patriotic tone in response. He's keeping Canada's retaliatory tariffs on American imports in place, telling his citizens that, quote, America is not Canada and Canada never, ever will be part of America, and treating trade negotiations like something his fellow countrymen know well, a hockey fight. Quote, we didn't ask for this, but if someone drops the gloves, we're ready, he said in a speech this week.

Carney has also got big economic plans. He wants to turn Canada into an energy superpower, find new, more reliable global trading partners, and invest in infrastructure. He's also making major policy reversals, scrapping Trudeau's unpopular carbon tax and rolling back a capital gains tax hike.

So who is Mark Carney? A financial mastermind, a crisis manager, a political rookie, or just a guy who is already relying way too much on hockey metaphors as he takes on the U.S.? Neil, probably all of the above. Canadians may not have heard of Mark Carney, but people who have observed the global economy for the past decade or so certainly know him well. He's a very prominent figure on the global macroeconomic scene.

having been the first person ever to be central bank chief of two different countries. And when he was the central bank leader of England, he was actually the first non-Brit to manage their central bank. So a little history over there. But he is stepping into this role really as a wartime leader. Carney is a proven manager of economic crises in Canada, staring down one of its biggest economic crises in decades.

Yeah, he is not a career politician. This is actually the first time he's really holding a public office. He's a former central banker. So his campaign pitch to the Canadian people were, I am a steady hand during uncertain times. I mean, you cannot write a better resume for someone who has managed through economic uncertainty than Mark Carney. And it does seem like he is taking a very, you know, patriotic approach to this. He's

This trade war has fueled a surge in Canadian nationalism. We've seen that with these campaigns to buy Canadian, boycott U.S. goods. So it looks like he's leaning into this Canada First sentiment. He's framing himself as a leader who will protect the country's sovereignty. And how much of it is political posturing? We don't know how much of it is real economic policy, but he's clearly going after this Canada First chord.

So right now he is prime minister. He's stepping in for Trudeau because he was elected by the Liberal Political Party, but he was not elected by the people of Canada. They're slated to have elections in October, but there is speculation that he will call elections before then to get a mandate for his government. So he could be extended for a couple more years, or he could be the shortest serving prime minister in Canadian history. I have that stat, by the way. It's Charles Tupper, who served just 69 days back in

1896. So if Carney calls for a snap election, he could, you know, wind up being the answer to the trivia question. Who is Canada's shortest serving prime minister? First came the deep seek earthquake, then the Manus aftershock. Last week, a Chinese startup released an autonomous AI agent called a Manus, what it describes as the

first general AI agent and quote, the next paradigm of human machine collaboration. As an AI agent, Manus is part of a class of systems that go above and beyond a chatbot's capabilities by completing multi-step complex tasks on its own and produce tangible results automatically.

all without human intervention. In a demo, Manis' chief scientist shows the technology completing three different tasks, sorting through resumes to find the top job candidate, Zillow surfing in New York City to help you find the right apartment, and performing a correlation analysis on various stocks.

For the second time in as many months, the AI sector went berserk trying to understand the implications of a potential breakthrough by a Chinese company. Remember, earlier this year, DeepSeek unveiled a model that allegedly rivals OpenAI's ChatGPT at a fraction of the cost, sending chip stocks tumbling and U.S. tech leaders into panic mode over their fragile dominance of the

key sector. In response to Manus, the reaction has been similarly impassioned and polarized. Some say this is the best thing since sliced AI bread. Others argue its capabilities are overblown. Toby, what are you hearing about Manus? Let's go to the overblown side because you did actually mention some of the tasks that they have been seeing completing. And they are impressive, like sorting through resumes, analyzing stock trends. TechCrunch, for instance, was one publication that put it

through its paces a little bit, and it failed pretty miserably on some tasks. An editor asked it to order a fried chicken sandwich from a top-rated fast food joint in my delivery range. After about 10 minutes of thinking, Manus just crashed. On the second attempt, it actually did find a menu item that met the criteria, but it couldn't complete the ordering process or provide a checkout link. He asked it to book a flight from NYC to Japan. It couldn't do that on its own. All it did was provide some

links to some kayak flights, but some of those links were broken. So remember the whole promise of an AI agent is that you can take a human out of the loop and have these, you know, programs work on your behalf while you're not, you know, paying attention to it. But Manus looks like it was whiffing on those and was introducing humans into the mix because it was just failing at the tasks that it was asked to do. On the other hand, there was a certainly high degree of hype from a few people who played around with it. The head of product,

at Hugging Face called Manus the most impressive AI tool I've ever tried. AI policy researcher Dean Ball of George Mason described Manus as the most sophisticated computer using AI. So there was a lot of praise from the developer community around its code.

And it is just another example of Chinese AI prowess at a time when the U.S. tech community is saying, hey, we have the lead. But really, you know, how big of a lead is this? Yeah. And there's definitely some security concerns as well. Whenever, you know, a new AI agent or an AI program comes out of China, you ask, where is the data house? Where is, you know, how is this going to affect national security? Because

if it is one of those products that, like DeepSeek, can go toe-to-toe with the best that America has to offer. It introduces this Pandora's box of security concerns as well. So we call DeepSeek the Sputnik moment for AI in China. Some people are saying this is the second Sputnik moment. You called it an aftershock from the earthquake that was DeepSeek. I think...

Maybe it will be somewhere in the middle because if it works, it does sound like this amazing piece of technology. But if it doesn't work as, you know, TechCrunch was encountering, then maybe it's just a headline that will move past pretty quickly. Up next, it is time for Toby's Trends.

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We've talked about the cruise industry's growth over the past few years, and after learning about Virgin Voyages, it's clear why they're so popular. Virgin Voyages has won accolades for dang near everything. Travel & Leisure and Condé Nast just voted them the world's best cruise

for the second year in a row. Their food menus are award-winning too. Not too surprising considering they were created by Michelin star chefs. Have you seen their cabins? Some of them have a private terrace with a hand-woven hammock you can relax on while you enjoy the view of the sea. Plus, this year they're going to new places like Iceland, the British Isles, and San Juan. See what voyages you could embark on this year at virginvoyages.com or contact your travel advisor. That's virginvoyages.com.

Five years ago this week, the world shut down. COVID-19 changed everything overnight, and at the time, people said nothing would ever be the same. But now, five years later, on today's edition of Toby's Trends, we'll see which pandemic-era trends actually stuck around and which ones quietly faded away. Some shifts became permanent. Remote work reshaped office culture. Takeout orders made restaurants more productive than ever, and the housing market locked millions of homeowners in place. Telehealth

once a niche service is now a standard part of healthcare. And these changes weren't just temporary adaptations. They fundamentally altered how we live in work. But not everything lasted. The great resignation and worker power faded as layoffs returned. Virtual events, metaverse meetings, and Zoom happy hours disappeared as people realized they actually like being around other humans.

And at home fitness Peloton and mirror learned the hard way that people still prefer the gym. So let's do a deep dive into the trends that define the pandemic, the ones that stuck and the ones that didn't kneel five years later. What is actually different? I will say one trend that I've been thinking about is the rise of, uh,

takeaway food, or at least that's what they say in Britain, takeout here in the United States. 74% of all restaurant traffic came from off premises customers in 2023 before COVID. That was 61%. We've seen a rise in solo dining as well. It's increased by 29% in just the past two years. So this ties into the broader perhaps trend of loneliness and isolation that, uh,

COVID brought. We all spent a lot more time in our homes and it seems like we kind of like that and are taking our food to go more often. We're eating food by ourselves more often and some would say that's probably not a good thing for our society that everyone's spending a lot more time by ourselves. And then speaking of homes, the housing market really changed during that COVID period. Home prices plummeted

have soared 45% in the last five years. The median U.S. home price in January of 2025 is $418,000. That's up from $289,000 five years ago. And the issue is that millions of homeowners locked in these super low, ultra low mortgage rates in 2020, in 2021, and now they're very reluctant to sell. So we have talked about this a lot on the show. Inventory is so tight. Prices are so high. Mortgage rates are huge.

in that 6% to 7% range. So homeownership feels more out of reach than ever, and it does seem like you can tie it all the way back to those ultra-low mortgage rates of that period. One thing that people love doing that has not changed since COVID stopped you from doing it is...

I remember those days when we thought that the cruise industry would be dead. No one would ever go on a cruise anymore because it was this incubation area for viruses and other illnesses. Well, the cruise industry has come back at a much higher clip than even before COVID. By 2023, cruise travel was up 10%.

nearly 20% above pre-pandemic levels. And last year, it grew by 34% over 2019 levels. So people still love going on cruises, actually more now than they do before COVID. Air travel is very similar. People were very scared to go on planes, but now we've had record day after record day TSA screening at airports. I just think it's fascinating too that the flip side of something that I thought would stick around post-pandemic that didn't was that

home fitness boom. I mean, everyone remembers how big Peloton got, how big, you know, mirror got as well, which was this Lululemon bought this at home fitness company. And it really did seem like this. It was so much easier than packing up a bag, going to the gym, you know, showering at the gym, going all the way home. It,

just work out in the comfort of your own home? Absolutely not. Peloton stock is just a perfect emblematic or perfect emblem of that trend. It went up to 162. It's down to around $5. Now it's down almost 90% from its all-time highs during the pandemic. So the at-home fitness boom was absolutely a short-lived thing. Now let's sprint to the finish with some final headlines. Breaking X. The

The platform, literally. The artist, formerly known as Twitter, experienced multiple outages yesterday with thousands of users reporting issues according to the down detector, as well as my own attempts at scrolling. Elon Musk attributed these disruptions to a massive cyber attack, suggesting significant resources were involved, possibly from a large hacker group or nation-state.

Despite these claims, the exact nature of the outages remains unclear, but they were most likely took the form of a distributed denial of service attacks, DDoS. Neil, it was humbling yesterday to realize how often I reach for my phone to check something

Check X throughout the day, which only became clear to me when the platform was constantly down every time I tried to access it. Also, absolutely horrible timing for sports fans because yesterday was the effective start of NFL free agency. It reminded you of how much

X plays a role in the distribution dissemination of sports news. You have people like Adam Schefter and other NFL insiders ready to tweet all of these major, major moves about different players going to different teams. Three of the top five queries on Google trends for searches of COVID

Twitter down mentioned NFL free agency. So you had these sports reporters who are followed in the millions on Twitter going to blue sky, going to threads because they wanted to get this information out. People were craving this information. So absolutely horrible timing for Twitter to go down on a day of free agency like this.

In M&A news, real estate listing platform and brokerage Redfin is getting bought by Rocket companies for $1.75 billion. It shows that Rocket, Dan Gilbert's Detroit behemoth that includes mortgage, real estate, and personal finance businesses, wants to push deeper into the

property market in the hopes that Redfin's tech-fueled platform can help it boost mortgage originations, which have been slumping in this era of sky-high interest rates. Redfin stock shot up 67% on the news, but it's still languishing down 90% since a pandemic peak in 2021 when everyone was looking for their country escape. It's been interesting. This

really tough housing market that we just spoke about in the previous segment has actually spurred a little bit more deal-making in the mortgage industry. Last year, Compass agreed to buy Christie's International Real Estate for $444 million. Last month, Redfin struck an agreement to make Zillow the exclusive provider of rental listings on its site. So we have been seeing a little bit of consolidation in this industry as the housing market remains

just so severely constricted with borrowing costs so high, making it very hard for new homeowners to enter the market. It turns out that DVDs aren't as timeless as the movies they contain, and some of them have been quietly turning into gross coasters due to an issue known as disc rot.

Warner Bros. has recently acknowledged that numerous DVDs produced between 2006 and 2008 are experiencing premature failure due to this phenomenon, which renders discs unreadable through a process of chemical deterioration. The issue has prompted the company to offer replacements for affected discs.

Neil, this isn't a new problem. People on Reddit forums have been calling it out for a long time now, but properly cared for DVDs should be playable for up to 100 years. But when it's getting in the way of a 2001 A Space Odyssey rewatch, it's going to make some headlines. My worst fears were confirmed. I looked at this list of moviegoers

Movies and DVDs that could be affected that were produced during those years. And yes, Entourage seasons one through four are on the list. So I got to go check and make sure that those DVDs are not rotted and they're in pristine condition. Finally, a top comedy club in the UK says it's banning audience members with Botox because their tight faces don't react to jokes.

The owner of Top Secret Comedy Club, which has hosted major comedians like Dave Chappelle, explained the move, saying,

How do you even enforce something like this? The club said bouncers will be carrying out, quote, expression checks designed to detect Botox. Toby, before you say this is a joke, owner Mark Rothman said, we're dead serious about the ban. And if you're surprised, we need to see that.

I think it's tongue in firmly reactive cheek here. It is a very funny headline to put out there. But I will say research has shown that when Botox is injected into places like foreheads, it does alter people's brain chemistry because it impacts how you interpret other people's emotions. So if I'm giving you some fire jokes, Neil, and you're giving me nothing back in return, it actually decreases our social balance.

bond. Our, our chemical connection is off there. So I do see, obviously like this is a joke, like this is a comedy club, but if you were a comedian and you just saw a bunch of frozen faces in front of you, it wouldn't make your job a lot harder. So yes, it's a joke, but I do think comedy is a two way street in this regard.

Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Tuesday. For any questions, comments, or feedback, send an email to morningbrewdaily at morningbrew.com. And if you're enjoying the show, share it with a friend, family member, or coworker. Toby, who should everyone listening share it with today?

I want you to share the pod with a Canadian you know, mainly to ask them their take on Mark Carney, but also, podcasts are free from tariffs, so send it across the border. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham and Olivia Lake are our associate producers. Yes, we got a new Olivia. Welcome to the fam. Uchenna Waogu is our technical director. Scoops Arderis is on audio. Hair and Makeup is laughing, I promise.

Devin Emery is our Chief Content Officer in our shows of production of Morning Brew. Great show, Daniel. Let's run it back tomorrow.