World Bank Cuts U.S. Growth Outlook, Meta Invests in Scale AI, & Smucker’s Stock Tanks

Ed takes a look at new World Bank data projecting that U. S. economic growth will be cut in half this year, breaks down what went wrong with JM Smucker’s earnings, and unpacks the deal structure behind Meta’s investment in Scale AI. Subscribe to the Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Are your ad campaigns lighting up the dashboard? But not the pipeline? That's bull spend, and marketers are calling it out in. Dashboard Confessions.

• 0:09Speaker 01

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had: impressions.

• 0:17Speaker 00

  Cut the bull spend. See revenue, not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 0:31Speaker 02

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior-like beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit MichelobUltra.com/SuperiorAccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 1:01Speaker 03

  This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake, the mountains, the homes of the people you love most? The completely redesigned 2026 Subaru Outback is built to help you get there with legendary capabilities, standard symmetrical all-wheel drive, and the confidence to go further. The 2026 Subaru Outback: Love Never Looked So Good. Visit Subaru.com/Outback to learn more.

• 1:26Ed Elson?

  Today's number: Nine. That's how many days a runaway zebra named Ed went missing in Tennessee this week. The Rutherford County Sheriff said Ed was, quote, "airlifted and flown by helicopter back to a waiting animal trailer." Ed is now safely captured in central Tennessee. Look, we've been saying it for a long time on this show now, and I'll say it again today: Free Ed. He just wants to get out there, he wants to do his thing, maybe he wants to launch his own daily podcast. I don't know, but what I do know is the guy's got talent, he's motivated, he works hard, and he needs to be let out. Free him. Free him now.

• 2:09Speaker 05

  Money markets matter. If money is evil, then that building is hell.

• 2:18Ed Elson?

  Welcome to Profy Markets. I'm Ed Elson. It is June 11th. Let's check in on yesterday's market vitals. The major indices all climbed as Commerce Secretary Howard Lutnick said China talks were going, quote, "really well." Bitcoin hit a new milestone, managing to remain above $100,000 for 30 days in a row for the first time ever. Oil had a wild ride, hitting its highest price since April before dropping on news that US domestic production will decline next year. That will be its first decline since 2021. And finally, JM Smucker's stock sank the most in nearly four decades, but we will get to that later.

• 2:57Ed Elson?

  Okay, what else is happening? We got some grim news from the World Bank yesterday. The World Bank expects that US economic growth in 2025 will be cut in half from 2.8% last year to 1.4% this year. Why? Because of

• 3:16Ed Elson?

  the tariffs. The World Bank's chief economist said that because of tariffs, global growth prospects have deteriorated and that without a swift course correction, the harm to living standards could be deep. I will also note that their expectations for global economic growth have come down as well. And that would make sense, considering America accounts for 26% of global GDP. So the long and short of it is, according to the World Bank, tariffs are bad. And I don't think that is very controversial. I also don't think this will impact the markets in any real way. I don't think the World Bank is telling us anything we didn't already know. But I think we can expect some form of derision

• 3:59Ed Elson?

  or mockery from the Trump administration aimed at the World Bank. We saw this last week, where the OECD projected a slowdown in GDP growth due to tariffs as low as 1.6%. And then they got this fiery response from the White House, who said that the report was part of a, quote... Growing list of doomsday prognostications that are untethered to reality. So I think we're realistically going to see the same thing here. And it's sad because we're essentially devolving into a world where numbers and data don't really matter anymore. I mean, even if you provide a heavily researched and peer reviewed report that shows that

• 4:41Ed Elson?

  the tariffs will have a negative impact on GDP, that's what the World Bank did yesterday. And by the way, that is not very crazy or out there. That's not a strange thing to expect at all. If you do that, the Republicans will just write it off as fake news or some form of political propaganda from the expert class. It's becoming almost impossible to say anything about the economy without it being viewed as in some way politically compromised. And what does that remind me of? Well, it reminds me of China, where they disappear economists who put out any findings that say anything even remotely negative about China. And if you're an economist in China and you do that, you very quickly vanish from the face of the earth.

• 5:25Ed Elson?

  Now, I'm not saying that's where we are now in America, but it is kind of where we're headed. So I would expect that after this World Bank report, I would expect we're going to see a very similar reaction from the White House, either today, maybe tomorrow, or sometime this week. But let's bring in Scott. Let's see if this has changed his views on anything, or if he has perhaps an updated perspective on the shit show that is our tariff policy.

• 5:53Ed Elson?

  Hey, Scott.

• 5:54Speaker 06

  Eduardo, mi amigo, mi abuela. I think that means aunt.

• 6:00Ed Elson?

  I'm pretty sure that means grandmother.

• 6:01Speaker 06

  Oh, there you go. There you go.

• 6:05Ed Elson?

  Where are you?

• 6:06Speaker 06

  I'm in Marlon. I just grabbed a great dinner with my son, who's walking ahead of me because, you know, dads aren't cool anymore. Right? I used to be his hero. Now, now I'm this alien that lives with him, but he wants nothing to do with it.

• 6:20Ed Elson?

  We're gonna need to get your son on the podcast soon.

• 6:22Speaker 06

  There you go.

• 6:22Ed Elson?

  So, uh, this World Bank report just came out. It was very ugly. Any initial reactions?

• 6:28Speaker 06

  Look, growth isn't everything, but it's almost everything. If you just think about, one of the things that's becoming an existential crisis is that on our debt payments and our deficit, we can greater than our military spending. That's when nations fail. And your growth rate going from 2.8% to 1.4, let's just round up, let's say going from 3 to 1 and a half. What that means is rather than the economy doubling in 25 years, it's going to take 50 years. What it means is, really what you want to look at is not the growth size of the deficit each year, but the percentage of GDP. And what that says is, is that if you're growing at, say, 3% a year, you can add 1.1 trillion to the deficit and still as a percentage of GDP, it's going down.

• 7:13Speaker 06

  Whereas when you're only growing 1 and a half percent a year, you know, you grow, you add 5 or 600 billion or more to the deficit, and your debt to GDP ratio goes up. And this is all because of the toxic uncertainty of tariffs and also a lack of clarity on immigration policy. And not only is our growth forecast being reduced, but the global growth forecast is being reduced. So the definition of stupid is doing things that hurt yourself while hurting others. So this is, could best be described, uh, the US economic policy could best be described as global stupidity that is not only hurting us, but hurting everyone else. Mexico's getting really hurt, the whole world that

• 7:58Speaker 06

  is interconnected and many Western nations that are dependent upon Well, we'll trade with the US economy and thought they could trust us. Now face this toxic uncertainty and the developed world is no longer developing.

• 8:12Ed Elson?

  Yeah, it all reminds me of something Robert Armstrong said when we were discussing the big, beautiful bill. And I brought up the fact that the Republicans justification for this massive increase in our debt burden that we're seeing with this deficit spending, their justification is we're going to grow our way out of it. You know, the economy is going to be so strong, it's going to expand so much that we won't have to worry about the debt. And Robert's response was great. He said, well, in that case, I wouldn't be getting into a trade war. And this data is the manifestation of that point. I mean, the stated mission, at least from the Republicans with this bill, is to accelerate growth.

• 8:53Ed Elson?

  And here we have the data saying, we're going to do the opposite. So that is a very scary combination to me. Increased deficit spending and slower growth. Where is this all headed, Scott?

• 9:06Speaker 06

  It's headed in a reduction of the purchasing power and the prosperity of the US. And we're dragging our trading partners now with us. I mean, it's just, there's just no getting around it. Even the Trump cabinet, when they're pressed with, on questions with anything resembling someone over 70 IQ in economics around these terror policies, they merely revert to, okay, I can't defend these terror policies. But this is in a, he's a deal guy. He's, he's threatening people with a nuclear option such that they come together, or they come to the table and offer us a better deal. Like, this, basically what they're claiming is, the largest economy in the world has decided that our economic and geopolitical

• 9:49Speaker 06

  strategy globally should be a hostage situation, where we, or a terrorist situation, where we threaten to blow ourselves up, such that you give us what we want. These policies are no longer even defensible. They're not even trying to rationalize them economically. They've moved to, well, it's bringing people to the table. And guess what? It's not. People are like, look, you show up with a suicide, an economic suicide vest on, we're not, we're not playing that game. You want to blow yourself up, fine. You're going to take some of us with you. We acknowledge that, but we're not going to negotiate with terrorists. And right now, the US is acting like an economic terrorist. Too much, Ed?

• 10:28Ed Elson?

  No.

• 10:29Speaker 06

  Too much?

• 10:29Ed Elson?

  Nailed it.

• 10:30Speaker 06

  Did I tell you I'm in Marla Bone?

• 10:31Ed Elson?

  I can see that.

• 10:32Speaker 06

  I just have soft syrup in Marla Bone.

• 10:34Ed Elson?

  Oh, very nice.

• 10:34Speaker 06

  Unfortunately, I'm with my 14 year olds, who, like you, is a Chelsea fan. So you and him share a poor judgment.

• 10:39Ed Elson?

  Love that. He and I will get along.

• 10:42Speaker 06

  Go out, have some drinks. You should practice having children for a while.

• 10:46Ed Elson?

  It's the rehearsal.

• 10:47Speaker 06

  People are literally looking at me like, who is this douchebag speaking into his phone?

• 10:51Ed Elson?

  That's what you signed up for.

• 10:52Speaker 06

  Anyways.

• 10:53Ed Elson?

  Okay. Good to hear from you, Scott. I'll let you go.

• 10:55Speaker 06

  See you, guys.

• 10:57Ed Elson?

  Up next, some clues on the economy from JM Smucker's earnings, and also a new AI investment from Meta. Stay with us.

• 11:12Speaker 00

  Are your ad campaigns lighting up the dashboard? But not the pipeline? That's bull spend. And marketers are calling it out in Dashboard Confessions.

• 11:21Speaker 01

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had. Impressions.

• 11:29Speaker 00

  Cut the bull spend. See revenue, not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 11:43Speaker 02

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends. Like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior light beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 12:13Speaker 03

  This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake? The mountains? The homes of the people you love most? The completely redesigned 2026 Subaru Outback is built to help you get there. With legendary capabilities, standard symmetrical all wheel drive, and the confidence to go further. The 2026 Subaru Outback. Love never looked so good. Visit Subaru.com/Outback to learn more.

• 12:42Ed Elson?

  We're back with Prof G Markets. JM Smucker reported earnings yesterday. This is the company that produces all of your favorite supermarket junk food. They make Hostess Donuts, they make the Uncrustables frozen sandwich. They also make the legendary Twinkie. But earnings were a big disappointment. Sales of sweet baked snacks fell 14%. Sales of frozen handhelds and spreads fell 1% and net sales overall fell 3%. Wall Street understandably did not like these earnings and the stock sank nearly 16% after the report. Now, what does JM Smucker say went wrong?

• 13:24Ed Elson?

  Well, most of the concern was centered around tariffs. The CEO Mark Smucker said tariffs are expected to weigh on profits this year. He highlighted in particular what they're doing to the company's coffee business. Coffee sales are up, but he noted that they had to raise prices in May and they're going to have to raise prices again in August. So overall, come August, the price of Smucker's coffee will be up 20% year over year. Just astounding and pretty concerning. And indeed tariffs were all over this earnings call.

• 13:58Speaker 07

  The approach will be to price for the tariff and then to factor in an elasticity of demand assumption.

• 14:05Speaker 08

  The current US tariff impact on green coffee is our largest exposure that we will manage on top of navigating record high costs for the commodity.

• 14:15Speaker 07

  We are taking pricing across the entire coffee portfolio. And those actions not only cover coffee commodity inflation, but also support recovering tariffs associated with our green coffee.

• 14:28Ed Elson?

  So this is just another reminder that tariffs do raise prices. And as I've said on the show before, we're not going to necessarily see the tariff impact right now. So when Scott Bessett goes on TV and he says, look, inflation came down in April. We saw inflation come down for the first time in four years. That is a total misdirect because the reality- Years, the tariff impact is going to take some time. It takes ninety to one hundred and eighty days for a US retailer to place an inventory order, get it priced and then get it on the shelf. So my prediction has been inflation is going to come, but it's going to come sometime in the fall, maybe just before Christmas. And this new data from JM Smucker would support that argument.

• 15:12Ed Elson?

  In August, the prices are going to rise. So that's what they said the big problem was tariffs. And fair enough, I'm sure tariffs are a big problem for the company. But there does seem to be a big piece of this that they're not really acknowledging. And I'm sure you could probably guess what I'm talking about. I am talking about, of course, GLP-1s, Ozempic, Wegovy. I mean, these are the things that everyone agrees are disrupting the junk food industry. In fact, just yesterday, we saw a ratings downgrade on McDonald's. Redburn Atlantic downgraded McDonald's to a sell rating. The stock dropped nearly 2%. And what did they say was the cause of that downgrade? You guessed it, GLP-1s.

• 15:57Ed Elson?

  They expect that McDonald's will take a $428 million hit on revenue because of these weight loss drugs. And that's why it's very strange that despite the fact that everyone's talking about this, we didn't hear a single mention of Ozempic or Wegovy or any of these weight loss drugs on the earnings call from JM Smucker yesterday, not one. And so the only thing that I can surmise from that is that JM Smucker is simply burying its head in the sand. They don't want to acknowledge it. They don't want to talk about the fact that these things could legitimately crush their business. And just some data on the adoption of these drugs.

• 16:37Ed Elson?

  There was this report last week that found that Wegovy usage among American teens climbed 50% last year. And meanwhile, for Gen Alpha, these are people born between 2010 and 2024, they saw an 85% increase in GLP-1 use. So this is becoming a legitimate trend. This isn't hype. People are genuinely using this drug. And if you're the CEO of a junk food company. Personally, I think you have a fiduciary responsibility. Whether or not you think this is important, I think you have to at least talk about it. Because even if you don't think this matters, the reality is everyone else does.

• 17:17Ed Elson?

  So if you ignore it, if you pretend it doesn't exist, it's only going to make us more suspicious of your business. It's only going to make us less confident. So I think investors were spooked by what they said about the tariffs. But I think they were probably more spooked by what they didn't say about GLP-1s. And that's why you saw this huge stock decline of 16% in just one day, the largest drop in four decades.

• 17:47Ed Elson?

  Our final story. Meta is investing nearly $15 billion in Scale AI. The deal, which hasn't yet been finalized, means Meta will own 49% of the startup, and that would value Scale AI at $28 billion. So for those of you that haven't heard of Scale AI. Scale AI. Scale AI.

• 18:08Speaker 05

  Scale AI. Not exactly a household name. What does Scale AI do?

• 18:12Ed Elson?

  This is basically one of the top AI startups in the world. Their specialty is this thing called data labeling. And what that means is they help all these other AI companies sift through and organize all of the data they need to train their LLMs. So their clients include OpenAI, Microsoft, and yes, Meta. And Scale AI is expected to generate $2 billion in revenue this year. So this is a serious company, and they are now 49% owned by Meta. I'm going to be clear right off of the bat. This is bad news. And the reason this is bad news is because of the deal structure.

• 18:53Ed Elson?

  It is very unusual for a company to invest in a startup and take up 49% of the shares. That's a lot of shares. And it is even more unusual for the CEO of that startup to then become an employee of the company that invested. And that is what is happening here, and it is a crucial detail. Alexander Wang, the CEO of Scale AI, is now supposedly going to take up a leadership position inside Meta. He's going to lead their new superintelligence division. So what this means is that this isn't really an investment. This is an acquisition that is pretending to be an investment.

• 19:36Ed Elson?

  And it is also the exact same thing we've seen across big tech and AI for the past several years, whether it was Microsoft investing in OpenAI, but ultimately taking 49% of the profits and also taking a board seat, or Microsoft investing in Inflection before the CEO of Inflection mysteriously left the company and then became the CEO of Microsoft AI, and he brought half of the employees along with him. Or Google investing in Character AI in what they called a, quote, "non-exclusive licensing deal," which ultimately led to the co-founders of Character leaving the company, joining Google, and now they're working on Gemini.

• 20:19Ed Elson?

  These are all acquisitions disguised as investments. So what's happening in AI today is pretty clear. Big tech has found a way to buy up the competition without triggering antitrust enforcement. And the way they do it is they make these, quote unquote, "investments" that have the exact same effect as an acquisition. Because even if these startups continue to exist and they continue to generate revenue, they're compromised. The leaders of those startups are now in bed with big tech. They're subservient to those CEOs, and in many cases, they literally work for them. And that's what's happened here with Scale AI. Alexander Wang, who, by the way, is an incredible entrepreneur, he could have been the guy

• 21:04Ed Elson?

  to take on big tech, to take on Mark Zuckerberg. But Meta came along with a big bag of money, and now he's Mark Zuckerberg's employee. So I think this tells us two very dark things about the state of the tech industry right now. The first is that it is very clear that big tech believes that the only way to beat the competition is to buy the competition. We saw that in the Meta antitrust case, where Zuckerberg literally said it, and we're seeing it again now with these pseudo-acquisitions. And this is a fundamental characteristic of a monopoly, and it's what all these big tech companies are doing. Now, the second problem, which is worse, is that this demonstrates that antitrust

• 21:47Ed Elson?

  law in America has officially been compromised. Big tech has found themselves a loophole, and the loophole is allowing them to monopolize the most ascendant industry in the world without triggering an antitrust review. Every single big AI startup that you read about has taken an investment from big tech. OpenAI, ScaleAI, Perplexity, Inflection, Anthropic, Coher, all of them are compromised. And the sad thing is, this could have been our disruptive internet moment. I mean, think what happened when the internet took off. You had all these new companies that took on the big companies like AT&T and IBM, and it created huge opportunities to build

• 22:28Ed Elson?

  wealth, not just for the ultra-rich, but for regular people. Loads of retail investors, including Scott, by the way, made a lot of money investing early in those companies, companies like Facebook, and Amazon, and Netflix.

• 22:45Speaker 09

  Netflix employees celebrated the return of the internet IPO today with a hearty salute to the good old days. At an $82.5 million valuation.

• 22:56Ed Elson?

  But that's no longer available to us, because big tech is squashing these startups before they can even grow. So this is the moment where we need regulation. We need the FTC and the DOJ to step in here and point out, sure, technically you have a minority stake in the company, but the CEO works for you, and you still own 49% of the business. This is an acquisition, and we're going to regulate it as such. That's what Andrew Ferguson and Gail Slater of the DOJ need to do right now. And if you work at the DOJ or the FTC, and you're listening to this podcast, I would strongly encourage you to bring this to their attention. I'm sure they may be

• 23:37Ed Elson?

  looking at it, but this is a classic case of monopolization. So don't be fooled by this bullshit notion that it's just an investment. It's not. It's an acquisition.

• 23:49Ed Elson?

  That's it for today. Thanks for listening to Profiteer Markets from the Vox Media Podcast Network. I'm Ed Elson. I will see you tomorrow.

• 24:07Ed Elson?

  You have me in kind reunion as the world turns.

• 24:23Ed Elson?

  And the dark skies in love.