WEBVTT - AppHarvest Is Building Hi-Tech Indoor Farms For The Future 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.560 along with essential market moving news. Kind the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.160 and on Bloomberg dot com. Well, as we all become 0:00:20.200 --> 0:00:23.400 a little bit more aware of our surroundings and you know, 0:00:23.520 --> 0:00:28.520 kenniness and everything really in association with the pandemic, it 0:00:28.640 --> 0:00:30.600 is a good time to talk to Jonathan Webb, who's 0:00:30.600 --> 0:00:34.600 founder and CEO of app Harvest is based in Lexington, Kentucky, 0:00:34.680 --> 0:00:37.560 but it's basically an eye tech company building the world's 0:00:37.640 --> 0:00:40.879 largest indoor farms, which of course you know we'll have 0:00:40.880 --> 0:00:43.880 sustainable fresh fruits and vegetables year round with no chemical 0:00:43.920 --> 0:00:48.680 pesticides and one rainwater. So Jonathan very very excited to 0:00:48.680 --> 0:00:50.680 speak with you today. First of all, give us a 0:00:50.720 --> 0:00:54.120 little bit more of an idea of app harvests clientele 0:00:54.280 --> 0:00:56.440 and also how many farms you have now up and 0:00:56.480 --> 0:01:00.280 down Applelacha. All right, well, thank you for having me. 0:01:00.640 --> 0:01:03.240 Uh So, app Harvest is set out to build some 0:01:03.320 --> 0:01:07.840 of the world's largest controlled environment agriculture facilities, and we're 0:01:07.840 --> 0:01:10.360 doing it here in central Appalachia where we can get 0:01:10.360 --> 0:01:13.800 to about sev of the US in a one day drive. 0:01:14.720 --> 0:01:18.840 Right now, we just launched our first flagship farm, which 0:01:19.000 --> 0:01:22.960 which is nearly two point eight million square feet under glass. 0:01:23.720 --> 0:01:26.240 To put that in perspective, it's nearly twice as large 0:01:26.280 --> 0:01:30.160 as his Amazon's largest distribution center, So so very large 0:01:30.160 --> 0:01:34.640 and scale. Uh. And we're focused on growing fruits and vegetables. Uh. 0:01:34.680 --> 0:01:38.360 And and our first product is tomatoes, which tomatoes right 0:01:38.360 --> 0:01:41.679 now are the number one produce import from Mexico nearly 0:01:41.720 --> 0:01:45.120 four billion pounds last year. So we're we're happy to 0:01:45.120 --> 0:01:48.600 be on store shelves as of last week, and we're 0:01:48.680 --> 0:01:51.240 selling to some of the top twenty five grocers here 0:01:51.240 --> 0:01:53.600 in the US. What had more of an impact on 0:01:53.640 --> 0:01:59.800 your business Donald Trump being president or the pandemic? Uh? Well, 0:02:00.200 --> 0:02:03.720 we we've had great relationships on both sides of the aisle. UH. 0:02:03.880 --> 0:02:07.160 With the new administration coming in and obviously having a 0:02:07.200 --> 0:02:10.760 focus on E s G. That's something that's quartered. Our 0:02:10.800 --> 0:02:14.400 business will will be a public benefit corporation traded on 0:02:14.400 --> 0:02:17.840 the Nasdaq or b Corp. So so obviously E. S 0:02:17.880 --> 0:02:20.480 G is quarta to who we are. But but then 0:02:20.520 --> 0:02:25.040 there's the conversation on food security and resiliency in the US. 0:02:25.160 --> 0:02:28.519 And it doesn't matter what side of the aisle you're on. UH. 0:02:28.560 --> 0:02:31.480 It doesn't make sense to truck a fruit and vegetable 0:02:31.919 --> 0:02:36.800 two weeks, two thousand miles UH imported from another country 0:02:36.880 --> 0:02:39.400 and get to the east coast, to midwest and southeast. 0:02:39.440 --> 0:02:41.320 So we have a long way to go here in 0:02:41.360 --> 0:02:46.600 the US of rebuilding agriculture UH and creating systems that 0:02:46.600 --> 0:02:50.520 that are resilient for for our future. UH. With climate 0:02:50.560 --> 0:02:55.320 disruption and demands for food. UH. You you look at 0:02:55.360 --> 0:02:58.320 the U n who came and visited us recently, the 0:02:58.400 --> 0:03:01.160 UN Security Council, and they predict it the world needs 0:03:01.160 --> 0:03:05.560 fifty to seventy more food by we all have to 0:03:05.560 --> 0:03:09.000 work together to to build a much stronger resilient food system. 0:03:09.360 --> 0:03:12.280 We have to utilize technology and infrastructure to do that. 0:03:12.880 --> 0:03:14.880 And for us, we don't really think it's the left 0:03:14.960 --> 0:03:17.639 or right conversation. It's it's really both sides of the 0:03:17.639 --> 0:03:20.000 aisle need to be at the table. Sure, it is 0:03:20.040 --> 0:03:23.360 probably a price conversation, though, right, how much more does 0:03:23.400 --> 0:03:26.720 it cost to buy, you know, produce from your farms. 0:03:26.760 --> 0:03:30.200 I presume it has to cost more. No, that's a 0:03:30.240 --> 0:03:32.919 great question. I mean, our job and my job here 0:03:33.000 --> 0:03:35.440 is to make sure we're not raising prices for for 0:03:35.520 --> 0:03:39.200 the everyday American. Uh. You know, I grew up in 0:03:39.400 --> 0:03:41.840 Kentucky in the middle part of the country, and and 0:03:41.880 --> 0:03:43.800 I can tell you you know, you look at most 0:03:43.840 --> 0:03:46.200 mothers and fathers across the US that that are going 0:03:46.280 --> 0:03:48.880 to the grocery store. They're just worried about putting food 0:03:48.880 --> 0:03:51.960 on the table. And we definitely cannot raise their prices. 0:03:52.560 --> 0:03:55.400 And we can do that through scale and through our 0:03:55.440 --> 0:03:59.600 efficiencies of how we're operating. We run completely on recycled rainwater. 0:04:00.080 --> 0:04:02.120 We have no water cost, and if you look at 0:04:02.120 --> 0:04:06.120 a fruit and vegetable, nine of a fruit and vegetable 0:04:06.200 --> 0:04:09.000 as water were in a water rich region, we're aver 0:04:09.160 --> 0:04:12.440 collect that rain water. We also know the distribution where 0:04:12.440 --> 0:04:14.760 we can get to major markets in a one day drive. 0:04:15.720 --> 0:04:18.560 That reduces our trucking by a week in two weeks 0:04:18.600 --> 0:04:22.440 also cost savings. So there's a multitude of factors as 0:04:22.480 --> 0:04:25.240 to how we're able to back into our price. But 0:04:25.240 --> 0:04:27.240 but at the end of the day, we we absolutely 0:04:27.320 --> 0:04:30.200 or are are committed to selling a fruit and vegetable 0:04:30.240 --> 0:04:33.160 adder around the same price and what consumers already see 0:04:33.160 --> 0:04:35.320 at the grocery store. But you know, Jonathan, we hear 0:04:35.360 --> 0:04:38.160 from farmers all the time how very, very difficult it 0:04:38.200 --> 0:04:40.960 is to actually, you know, make some profit in this world, 0:04:41.080 --> 0:04:44.760 and that it's it's just it's just so hard. And 0:04:44.839 --> 0:04:47.040 you know, you have to make sure you pick your 0:04:47.040 --> 0:04:49.120 crops right for the year, you have to make sure 0:04:49.120 --> 0:04:51.640 that you avail yourself of all the subsidies that are 0:04:52.360 --> 0:04:54.839 available to farmers and so on. And it's still hard 0:04:54.880 --> 0:04:56.960 to just even make a living for a single farmer. 0:04:57.240 --> 0:04:59.440 How are you guys managing to do it for you know, 0:05:01.400 --> 0:05:06.599 a multitude of farms. Well, it's it's where we're we 0:05:06.720 --> 0:05:09.720 have to use technology and we have to build farms 0:05:09.720 --> 0:05:11.960 for the future. And you know, you look at the 0:05:12.040 --> 0:05:16.240 last great technological revolution that hit American farming, it was 0:05:16.320 --> 0:05:21.120 the tractor. And we really have not seen a significant 0:05:21.720 --> 0:05:25.119 uh you know, piece of technology hit American farming since 0:05:25.160 --> 0:05:28.120 the tractor. Uh. And and now you know the way 0:05:28.160 --> 0:05:32.320 we operate our farm where we're using industrial sensors and 0:05:32.440 --> 0:05:36.080 software can operate the farm on an iPhone and iPad. 0:05:36.440 --> 0:05:40.800 We're controlling the environment to optimize for the plant. Uh 0:05:40.839 --> 0:05:43.719 And we have to use technology and there's an upfront 0:05:43.760 --> 0:05:46.280 cost to that, but then we're able to recoup that 0:05:46.360 --> 0:05:48.600 cost over time. And as far as you you talk 0:05:48.640 --> 0:05:52.719 about farmers having to fight against the climate that's changing, 0:05:53.040 --> 0:05:54.719 you know, we don't have to worry about that. We 0:05:54.800 --> 0:05:59.040 grow indoors. We control our climate. Uh And And what 0:05:59.320 --> 0:06:01.440 my background was in solar, I was a part of 0:06:01.440 --> 0:06:03.960 building some of the largest solar in the US. And 0:06:04.000 --> 0:06:06.039 we've tried to say this is the third wave of 0:06:06.080 --> 0:06:09.680 sustainable infrastructure. You know, account wait to go under tour 0:06:09.800 --> 0:06:12.120 one of these farms at some point because they really 0:06:12.160 --> 0:06:16.320 do sound fascinating and hopefully the technology will take off 0:06:16.760 --> 0:06:18.479 and and other people who are able to take advantage 0:06:18.520 --> 0:06:20.560 of it as well. Jonathan, thank you so much. We 0:06:20.600 --> 0:06:23.120 will stay in touch. Jonathan Webb is founder and CEO 0:06:23.160 --> 0:06:26.000 of agh Tech Company, A harvest some of the largest 0:06:26.080 --> 0:06:30.680 indoor farms in the world in Appala jam Looking at 0:06:30.680 --> 0:06:32.919 the U s dollar here, the d x Y index 0:06:32.920 --> 0:06:35.479 sitting just above at ninety and that's the lowest level 0:06:35.520 --> 0:06:39.680 it's been since back in two thousand eighteen. And it's 0:06:39.680 --> 0:06:41.560 not about twelve twelve and a half percent from the 0:06:41.600 --> 0:06:44.799 pre pandemic highs Our next guest think that the dollar 0:06:44.960 --> 0:06:48.680 can stay lower for longer. We are pleased to welcome 0:06:48.720 --> 0:06:53.000 Stephen Roach, senior fellow at Yale University and former chairman 0:06:53.360 --> 0:06:56.839 of Morgan Stanley Asia. Discussed his column here. The weaker 0:06:56.880 --> 0:06:59.080 dollar trend is only just beginning. Stephen. Thanks much for 0:06:59.160 --> 0:07:02.080 joining us here. What is your call on the dollar 0:07:02.160 --> 0:07:06.160 and what's driving it well? Last June I wrote an 0:07:06.400 --> 0:07:10.040 opinion piece on Bloomberg that argued the dollar could drop 0:07:10.120 --> 0:07:13.720 as much as thirty five percent by the end of 0:07:16.200 --> 0:07:20.800 and I cited three factors that led me to that 0:07:20.880 --> 0:07:27.000 seemingly outrageous conclusion. One sharp widening of the balance of 0:07:27.040 --> 0:07:31.440 payments of the current account deficit to the there was 0:07:31.480 --> 0:07:35.360 a myth behind the notion that there is no alternative 0:07:35.400 --> 0:07:39.960 to the dollar or the so called Tina defense. And Thirdly, 0:07:40.160 --> 0:07:44.200 I stress that I thought the Federal Reserve would do 0:07:44.280 --> 0:07:49.080 nothing to defend a weaker currency, as central banks normally do, 0:07:49.320 --> 0:07:55.800 they tighten monetary policy to stave off weaker currency, and 0:07:55.880 --> 0:07:58.680 this FED is not going to tighten for any currency 0:07:58.720 --> 0:08:02.880 related reasons. So you know, I uh came up with 0:08:02.920 --> 0:08:07.480 this thirty five UH call, and you know, we're about 0:08:07.520 --> 0:08:11.200 a third of the way there, and so there's more 0:08:11.240 --> 0:08:14.320 to come, if I'm going to be right, Yeah, I mean, 0:08:14.600 --> 0:08:16.880 the Fed may not do anything. Is there anything that 0:08:17.000 --> 0:08:20.760 Janet Yellen might do directly or indirectly? As Treasury Secretary 0:08:20.840 --> 0:08:25.640 Stephen Well, like, I have huge respect for Janet Yelling. 0:08:25.760 --> 0:08:29.160 She's got a lot or plate Bunny, and um, I 0:08:29.200 --> 0:08:31.440 think you know, you'll you'll start to hear echoes of 0:08:32.200 --> 0:08:35.720 Bob Reuben in the Janet Yellen where she just simply 0:08:35.760 --> 0:08:40.080 says that, you know, the US is always in favor 0:08:40.240 --> 0:08:44.800 of a strong dollar. But no, there won't be anything 0:08:44.840 --> 0:08:49.960 other than the sort of rhetorical uh statements rather than 0:08:50.000 --> 0:08:54.880 any concrete action to stave off this weakness, because Stephen, 0:08:54.920 --> 0:08:56.520 it appears, you know, if we do listen to Fed 0:08:56.600 --> 0:09:00.000 Chairman pal Um some seemingly, you know, obviously some very 0:09:00.080 --> 0:09:03.120 strong commentary since the beginning of this pandemic about the 0:09:03.160 --> 0:09:06.640 interest rate environment and his outlook lower for longer, talking 0:09:06.679 --> 0:09:10.320 about you know it in years not quarters. Do you 0:09:10.320 --> 0:09:15.040 expect that stance to stay? Yeah, I do. I think, 0:09:15.600 --> 0:09:21.480 you know, if anything, it's it's a more stronger stance 0:09:21.640 --> 0:09:25.520 for sustained monetary accommodation than it was when I first 0:09:26.040 --> 0:09:28.760 I thought the dollar would fall six months ago. The 0:09:28.840 --> 0:09:33.840 feed as you know, has adopted this new framework of 0:09:33.960 --> 0:09:38.480 average inflation targeting, which means it's going to forgive any 0:09:38.559 --> 0:09:45.640 short term overshoots a relative to their price to stability metrics, 0:09:45.679 --> 0:09:48.880 so you know, if anything, they're going to stay easier 0:09:48.960 --> 0:09:52.760 for longer. And when countries have big current account deficits, 0:09:52.840 --> 0:09:57.440 they can do one or two things or both. They 0:09:57.480 --> 0:10:02.840 can allow the Monterrey policy, the titan or uh, you know, 0:10:02.960 --> 0:10:06.240 let let the currency go and with with the fed 0:10:07.280 --> 0:10:13.000 um sort of giving up on the monetary policy, and 0:10:13.080 --> 0:10:16.280 all the currency will will absorb the bulk of the adjustment. 0:10:16.760 --> 0:10:20.720 So Stephen, when you say weakness, it's obviously weakness versus 0:10:20.880 --> 0:10:24.199 you know, other assets, other currencies. Will it be primarily 0:10:24.440 --> 0:10:27.000 you know, the Chinese? You on, Will it be the euro, 0:10:27.280 --> 0:10:30.360 British pound? Where will we see the weakness? Most obviously 0:10:31.800 --> 0:10:34.880 I think it will be pretty broadly based. Vanny, I 0:10:34.920 --> 0:10:38.640 think you'll see it again the reven b, which has 0:10:38.679 --> 0:10:42.000 been strengthening steadily and looks like it's going to be 0:10:42.080 --> 0:10:45.240 going up a good deal further this year, but you'll 0:10:45.280 --> 0:10:48.400 also see it against the Euro that you know, the 0:10:48.440 --> 0:10:51.719 Euro has I think right now, I would say is 0:10:51.760 --> 0:10:58.160 probably the most undervalued major currency in the world. It's um. Uh. 0:10:58.160 --> 0:11:02.600 You know, it's down still on a broad trade weighted 0:11:02.640 --> 0:11:07.960 basis about four percent from its UM March two thousand 0:11:07.920 --> 0:11:13.720 and fourteen posted UM crisis high. And uh. You know, 0:11:13.760 --> 0:11:18.199 I've been a euroskeptic basically all my life, largely because 0:11:18.320 --> 0:11:21.920 while while the Eurozone has a single currency in a 0:11:21.960 --> 0:11:26.280 single central bank, it's never had a unified fiscal policy, 0:11:26.280 --> 0:11:29.439 and that now seems to be changing. Uh. There was 0:11:29.480 --> 0:11:33.840 a deal cut in July of last year, the so 0:11:33.920 --> 0:11:41.280 called next generation UH EU fund UH complete with European 0:11:42.080 --> 0:11:45.480 bond issuing authority, that I think is a you know, 0:11:45.720 --> 0:11:49.760 a potential game changer in terms of European fiscal policy. 0:11:49.840 --> 0:11:52.640 So I think, you know, Europe will get through this 0:11:52.679 --> 0:11:57.200 pandemic which they're suffering mightily from again right now, and 0:11:57.240 --> 0:12:00.680 I think there's a a compelling case of the upside 0:12:00.679 --> 0:12:04.080 for what is probably the most undervalued major currency in 0:12:04.080 --> 0:12:07.480 the world. Stephen, I'd love to call on your experience 0:12:07.559 --> 0:12:09.959 as chair of Morgan Stanley Asia. We now have a 0:12:10.000 --> 0:12:12.679 new administration in the White House, how do you think 0:12:12.679 --> 0:12:16.679 our policy should evolve with China over the coming years 0:12:16.679 --> 0:12:20.240 given what we've experienced over the last four Well, look, 0:12:20.880 --> 0:12:24.080 you know, anything that's better than what we've been through 0:12:24.200 --> 0:12:27.360 over the past four years. I'm hopeful that there will 0:12:27.400 --> 0:12:32.080 be a measured, careful reassessment of all of the actions 0:12:32.120 --> 0:12:36.360 that were taken during the Trump administration. I think, UM, 0:12:36.400 --> 0:12:41.200 I look for the Biden administration to do that. Nothing immediate, 0:12:41.360 --> 0:12:45.920 no major breakthrough, but I'm hopeful that UH we can 0:12:46.200 --> 0:12:52.240 once again initiate a more constructive exchange on big issues 0:12:52.280 --> 0:12:56.160 we have in common like UM, global health policy and 0:12:56.280 --> 0:13:00.240 climate change UH, and then began to develop a more 0:13:01.840 --> 0:13:05.720 I think sustainable framework of engagement on some of these 0:13:05.720 --> 0:13:11.080 tough structural issues that were put on the table by 0:13:11.080 --> 0:13:15.560 the Trump administration UH several years ago, in terms of 0:13:15.840 --> 0:13:22.720 innovation policy, intellectual property rights protection, force technology transfer, UH, 0:13:23.040 --> 0:13:28.120 cybersecurity subsidies to stay on enterprises. These are really important issues, 0:13:28.320 --> 0:13:31.840 and I give the Trump administration credit for raising them, 0:13:31.840 --> 0:13:35.160 but they provided nothing in the way of resolving them. 0:13:35.200 --> 0:13:38.600 The so called Phase one trade deal did nothing on 0:13:38.640 --> 0:13:42.160 these issues that should be immediately I would I would 0:13:42.200 --> 0:13:47.040 hope abandoned, and I think there's a much better framework 0:13:47.120 --> 0:13:50.640 to engage on the structural issues that I would hope 0:13:50.679 --> 0:13:55.240 that Biden administration could begin to roll out. Stephen would 0:13:55.280 --> 0:13:57.240 love to talk about China for a lot longer, but 0:13:57.320 --> 0:14:00.840 unfortunately your time is up. But Duke and back again soon. 0:14:01.640 --> 0:14:03.920 We really need to sort of focus on China and 0:14:04.000 --> 0:14:05.840 exactly what's been going on over there. You know, I 0:14:05.840 --> 0:14:08.760 think the pandemic is as much as we've talked about 0:14:08.840 --> 0:14:10.760 China over the last year, I think the pandemic has 0:14:10.800 --> 0:14:12.720 has made us focus a little bit more on the 0:14:12.760 --> 0:14:15.000 United States in the last little while. So thank you 0:14:15.040 --> 0:14:18.320 to Stephen Roach, of course, who was a huge, huge 0:14:18.360 --> 0:14:21.520 history with China and Asia. More broadly, he's senior fellow 0:14:21.560 --> 0:14:24.640 at Yale University, former chairman of Morgan Stanley Asia, and 0:14:24.680 --> 0:14:26.600 do have a read of his column. The weaker dollar 0:14:26.640 --> 0:14:32.920 trend is only just beginning. The British pound is just 0:14:33.000 --> 0:14:35.080 a little bit stronger today. We're keeping an eye, of course, 0:14:35.120 --> 0:14:37.480 on earnings. About two thirds of the SMB five hundred 0:14:37.520 --> 0:14:42.920 companies are reporting this week. And I also want to 0:14:42.960 --> 0:14:47.360 point out that Leon black out at Apollo this after 0:14:47.440 --> 0:14:50.360 he got caught paying for Jeffrey Epstein to the tune 0:14:50.360 --> 0:14:54.040 of one fifty eight million dollars. The private equity Titan 0:14:54.240 --> 0:14:57.400 was willing to overlook, apparently that Epstein had served thirteen 0:14:57.400 --> 0:14:59.400 months in a Florida jail. But it all came to 0:14:59.440 --> 0:15:01.800 a head over the weekend and after meetings between the 0:15:01.800 --> 0:15:05.160 three owners, Black is out and there is a new 0:15:05.760 --> 0:15:09.080 person in his place. And that is your latest Spoomberg 0:15:09.240 --> 0:15:12.280 business flash. Let's get now to some of those earnings 0:15:12.280 --> 0:15:14.520 this week. Karen nub Hard to senior industrial as analysts 0:15:14.560 --> 0:15:18.000 for Bloomberg Intelligence, obviously covering the likes of GE and 0:15:18.200 --> 0:15:22.800 three M Karen, what are we looking for this week? Uh? 0:15:22.840 --> 0:15:25.960 You know, um, we're gonna certainly see sequential improvement, but 0:15:25.960 --> 0:15:30.160 everybody's going to really be looking to companies have not 0:15:30.280 --> 0:15:33.520 been giving guidance for most of twenty Um. I think 0:15:33.560 --> 0:15:36.040 a lot of them will give us some guidance on 0:15:36.160 --> 0:15:38.400 because things have stabilized and are going up in the 0:15:38.480 --> 0:15:41.480 right direction. And today's story was GE on the cash 0:15:41.480 --> 0:15:43.840 flow side. That's that's really why that's up so much. 0:15:43.920 --> 0:15:47.240 But you know, it looks like things are stabilizing and 0:15:47.400 --> 0:15:51.760 we're gonna see um, you know, um improvement ahead better 0:15:51.800 --> 0:15:54.440 in the second half, but people really want to get 0:15:54.480 --> 0:15:57.720 comfortable that twenty one is going to be a decent year. Now, 0:15:57.720 --> 0:16:00.640 where is the demand coming from, Karen, Because you know, 0:16:00.680 --> 0:16:03.440 we're seeing some data really holding up in terms of 0:16:03.440 --> 0:16:05.720 the consumer today with consumer confidence and so on, and 0:16:05.760 --> 0:16:08.240 now it looks like some of these big industrials are 0:16:08.280 --> 0:16:13.680 also seeing demand. Is a domestic demand, Uh, it's well 0:16:13.840 --> 0:16:17.440 not China's China's up a lot. Um you know, US 0:16:17.600 --> 0:16:19.960 is coming back. I mean it's mixed, it's really by 0:16:20.040 --> 0:16:22.520 it's really by end market. Like the UM three m 0:16:22.600 --> 0:16:25.440 was talking about home improvement and personal safety. You know, 0:16:25.480 --> 0:16:28.400 they make the respirators, data centers, things like that, but 0:16:28.440 --> 0:16:30.960 they're in a big pop and auto production just because 0:16:31.160 --> 0:16:33.560 you know, it had been much slower earlier in the year, 0:16:34.000 --> 0:16:38.200 and um g E really it was healthcare and stabilization 0:16:38.280 --> 0:16:40.640 some of their other businesses, but like power, but that's 0:16:40.640 --> 0:16:43.600 really an internal story. Aviation was bad, but not as 0:16:43.640 --> 0:16:46.800 bad as expected, you know, so so you know, um 0:16:46.840 --> 0:16:52.200 it's it's really you know, um home improvement, some spots 0:16:52.200 --> 0:16:55.920 and healthcare, anything related to safety. You know, Honeywell is 0:16:55.920 --> 0:16:57.720 going to talk about personal safety too. That's going to 0:16:57.800 --> 0:17:00.720 be better than expected. Um, you know because of COVID. 0:17:01.200 --> 0:17:03.600 So you know, I wouldn't say we're back home, but 0:17:03.600 --> 0:17:06.320 we're certainly directionally, we're going on the right way. Yeah, 0:17:06.359 --> 0:17:09.520 these companies pivoting just a little bit, now, will they? 0:17:09.560 --> 0:17:12.280 And have they spoken about supply chains and how they 0:17:12.320 --> 0:17:15.560 have forceful supply chains to to get a little bit 0:17:15.560 --> 0:17:19.200 more um, you know, lubricated in some ways so that 0:17:19.520 --> 0:17:21.720 you know, the likes of Ppe and some of this 0:17:21.840 --> 0:17:25.560 healthcare equipment can get produced faster and get to the 0:17:25.560 --> 0:17:29.680 places necessary. Yeah, that's gotten much much better. I mean 0:17:29.760 --> 0:17:33.840 three Mum had a uh you know how the squadrupled 0:17:33.880 --> 0:17:36.800 production and they got to their two billion in in 0:17:36.800 --> 0:17:41.199 in respirators um for twenty and they were you know, 0:17:41.240 --> 0:17:43.200 a quarter of that earlier in the year, and there 0:17:43.240 --> 0:17:46.240 wasn't really supply issues. Um, I'd say the same thing, 0:17:46.480 --> 0:17:48.480 um in honeywell and some of the other so that 0:17:48.480 --> 0:17:52.399 that supply chain really isn't coming up that much anymore. Interesting, 0:17:52.400 --> 0:17:55.400 So animalst aren't even asking about it. It's just solved. 0:17:56.240 --> 0:17:57.800 A lot of people, a lot of around the world, 0:17:57.840 --> 0:17:59.520 a lot of places are back to work. They've learned 0:17:59.520 --> 0:18:02.720 how to manage a round of the virus. Now we 0:18:02.720 --> 0:18:05.320 always have a new administration, wouldn't have been for the 0:18:05.400 --> 0:18:07.240 last quarter, but it would be for the next quarter. 0:18:07.560 --> 0:18:10.960 So are any of these companies making decisions based on 0:18:11.040 --> 0:18:13.159 the fact that we now have a Biden administration in 0:18:13.240 --> 0:18:16.840 terms of you know, foreign policy and how their international 0:18:17.359 --> 0:18:21.399 outlook might be. Well, it's certainly um with you know, 0:18:21.720 --> 0:18:25.320 trade barriers probably getting a little bit better. Um, you know, 0:18:25.400 --> 0:18:29.240 working on our global relationships. I think that's in you know, 0:18:29.280 --> 0:18:31.359 incrementally will be better. I don't think anybody's going to 0:18:31.400 --> 0:18:36.680 make major strategic changes, um. I would say, um, there is. 0:18:36.880 --> 0:18:41.359 There may be some internal opportunities life like infrastructure, you know, 0:18:41.400 --> 0:18:43.320 because we have some big spending plans and it's quite 0:18:43.320 --> 0:18:46.680 broad based. It's not just let's let's fix the roads. Um. So, 0:18:46.720 --> 0:18:50.480 they'll they'll probably be um some domestic opportunity. UM So 0:18:50.920 --> 0:18:54.040 I think people are hopeful, but not making major shifts yet, 0:18:54.080 --> 0:18:56.720 but certainly hopeful. You know when you say you know 0:18:56.760 --> 0:19:00.840 domestic opportunity. We're obviously gonna build America back. I mean, 0:19:00.960 --> 0:19:04.199 how how much are these companies lobbying to get a 0:19:04.240 --> 0:19:07.280 place in that choir and how much are they sort 0:19:07.280 --> 0:19:11.640 of looking to divert some of their resources to projects 0:19:11.680 --> 0:19:14.159 that might come down the pike. Well, you know, I 0:19:14.680 --> 0:19:17.399 think I think it's going to be a very broad 0:19:17.400 --> 0:19:20.000 based program as you know, like there will be a 0:19:20.119 --> 0:19:23.560 traditional infrastructure, but there's also talk of a big focus 0:19:23.600 --> 0:19:27.680 on climate UM, you know, which will be a big thing, energy, 0:19:27.760 --> 0:19:31.080 energy savings, etcetera. There's UM their talk of investment in 0:19:31.240 --> 0:19:35.880 data infrastructure for UM, rural areas, etcetera. So UM, there's 0:19:35.920 --> 0:19:38.840 a lot of opportunity for these companies if we get 0:19:38.880 --> 0:19:42.200 the spending and with UM the Democrats having the majority 0:19:42.280 --> 0:19:44.840 and the White House, some things might be able to 0:19:44.880 --> 0:19:48.399 happen on on that front. So you know, g E 0:19:48.560 --> 0:19:52.240 obviously is soaring today, but if you take a look 0:19:52.280 --> 0:19:54.520 at your over year, we're still down one percent, so 0:19:54.560 --> 0:19:56.600 it has a ways to go. How much more can 0:19:56.640 --> 0:19:59.879 Larry cult do to revive the giant UM? You know, 0:20:00.160 --> 0:20:02.840 I think there's UM a lot of room to go 0:20:03.000 --> 0:20:05.880 still on the power side, which was where their big 0:20:05.920 --> 0:20:08.760 problems were. But you're starting to see stabilization and now 0:20:08.760 --> 0:20:11.080 they've had a couple of quarters where they've made money, 0:20:11.400 --> 0:20:13.320 so there's still a lot of room to go on 0:20:13.359 --> 0:20:16.120 that front. UM, there's a room to go and renewables 0:20:16.160 --> 0:20:18.640 and now and then the other thing, the biggest thing 0:20:18.680 --> 0:20:20.199 that the biggest swing that they can do on the 0:20:20.359 --> 0:20:23.000 on the business side is you know, get a little 0:20:23.000 --> 0:20:25.879 help from aviation and they're expecting some improvement in the 0:20:25.920 --> 0:20:27.880 second half. That's where they made two thirds of their 0:20:27.880 --> 0:20:31.479 money and then COVID it just collapsed. But that's going 0:20:31.520 --> 0:20:34.120 to be better in twenty one. But you know, if 0:20:34.160 --> 0:20:37.480 they got lucky on that side, they could really beat 0:20:37.560 --> 0:20:40.280 But right now it's you know, they say, and they're right. 0:20:40.320 --> 0:20:42.679 They're fixing the things they can fix, and they've been 0:20:42.680 --> 0:20:44.960 in a two year program to turn power around and 0:20:45.040 --> 0:20:47.240 renewables around, and you're starting to see that some of 0:20:47.240 --> 0:20:50.480 the benefits able that cloth cutting and then aviation. Did 0:20:50.840 --> 0:20:53.320 you know, it's terrible, but they did, you know, as 0:20:53.320 --> 0:20:55.360 well as they could do, given that demand is down 0:20:55.359 --> 0:20:58.679 thirty this year. Yeah, exactly. I mean, what will they 0:20:58.720 --> 0:21:01.399 do with aviation? Is everything on polls right now? And 0:21:01.680 --> 0:21:06.480 can it be free of cost if you like, you know, 0:21:06.640 --> 0:21:10.320 while while all of these aviation units are waiting to 0:21:10.320 --> 0:21:13.399 move back into regular gear. Yeah, they've taken a billion, 0:21:13.720 --> 0:21:16.600 a little million more than a billion out of costs 0:21:16.600 --> 0:21:19.520 in the aviation business though they've they've been able to 0:21:19.880 --> 0:21:23.640 sort of stabilize um, the collapse and then you know, 0:21:24.040 --> 0:21:27.480 as people get back to back to travel even incrementally, 0:21:27.520 --> 0:21:29.560 that might help the parts business and frankly that's where 0:21:29.600 --> 0:21:32.480 they make their money. And then um, the Max seven 0:21:32.520 --> 0:21:35.960 three seven is is being produced again, not nearly at 0:21:35.960 --> 0:21:39.159 the levels that they had hoped, but certainly UP is 0:21:39.200 --> 0:21:41.520 better than down, right, So um, that's going to help 0:21:41.560 --> 0:21:45.400 them as well on the aviation O east side. Um, 0:21:45.440 --> 0:21:48.440 but they really need people to travel again, and uh, 0:21:48.600 --> 0:21:52.560 that should get better as the year goes on. All right, Karen, 0:21:52.760 --> 0:21:56.240 thank you. Up is definitely better than down for most stakeholders, 0:21:56.240 --> 0:22:00.800 from employees to management to shareholders and the general public 0:22:00.840 --> 0:22:03.119 as well. So thank you so much for all of 0:22:03.160 --> 0:22:07.440 your intelligence. Karen Atlhardt is senior Industrial analyst for Bloomberg Intelligence, 0:22:07.640 --> 0:22:10.159 and keep an eye out for more intelligence from her 0:22:10.200 --> 0:22:16.359 on other industrials that haven't reported just yet. All right, 0:22:16.480 --> 0:22:19.359 it's time bringing our cross Asset reporter is Sarah Ponzac, 0:22:19.400 --> 0:22:22.000 who's keeping an eye on everything that's going on across 0:22:22.040 --> 0:22:24.240 the markets. And it doesn't seem that there's all that 0:22:24.320 --> 0:22:27.760 much going on, at least overall in the equity markets today, Sarah, 0:22:27.760 --> 0:22:31.119 where is the action right? Everything that's going on today, 0:22:31.720 --> 0:22:34.480 It's a pretty quiet day as of this morning. If 0:22:34.480 --> 0:22:36.439 you do break it down, though, you do see some 0:22:36.920 --> 0:22:39.879 larger moves at the more micro single stock level, and 0:22:39.920 --> 0:22:43.240 Microsoft will point out Microsoft reporting earnings after the bell today. 0:22:43.320 --> 0:22:45.920 If you look at Microsoft today higher by one point 0:22:46.000 --> 0:22:48.080 three percent at the moment, that's higher for a sick 0:22:48.240 --> 0:22:50.320 straight yea. So we have a bit of a winning 0:22:50.320 --> 0:22:52.760 street going on. And Microsoft deposited at a record high 0:22:52.760 --> 0:22:55.359 the last time I checked on my screen, just ahead 0:22:55.359 --> 0:22:59.400 of earning season. So we're seeing this phenomenon where ahead 0:22:59.440 --> 0:23:01.800 of big act reports, this is the busiest week for 0:23:01.800 --> 0:23:04.560 earnings in According to Bluebird Intelligence, we have about one 0:23:05.240 --> 0:23:07.359