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Speaker 2: Busy week.
Speaker 3: We know when it comes to the treasury trade this
Speaker 3: week all so very busy. When it comes to earnings,
Speaker 3: about one hundred and eighty I think S and P
Speaker 3: five hundred companies, John said, representing around thirty percent, but
Speaker 3: I think it's more than forty percent of the indexes
Speaker 3: market cap. But we have the expert who's going to
Speaker 3: tell I'm not going.
Speaker 4: To argue with either of you.
Speaker 5: Low's that all right?
Speaker 3: So let's get to it because some of who are reporting,
Speaker 3: we know are among the magnificent seven names, a big
Speaker 3: of the some of the big megacap tech companies.
Speaker 4: Yeah, we're talking about Alphabet, Meta, Microsoft and Tesla for more.
Speaker 4: Let's bring in Bloomberg Intelligence is Director of Equity Strategy
Speaker 4: and Chief Equity Strategist, Gina Martin Adams, who's here in
Speaker 4: our studio. Gina, you and the team have a note
Speaker 4: out that talks about so far it's early, but so
Speaker 4: far the earning season is giving us a pretty good
Speaker 4: backdrop for stocks. Bring us up to speed here.
Speaker 6: Yeah, so I think it's a it's been an interesting
Speaker 6: earning season so far because we've had some really big
Speaker 6: charges from healthcare companies Bristol Myers Club and now Gilad,
Speaker 6: who have both taken down estimates for the S and
Speaker 6: P five.
Speaker 3: They're so interesting.
Speaker 1: Yeah, that one tiny.
Speaker 6: Yeah, just those two companies, which really kind of escape
Speaker 6: our under our our notice because we're so captivated by tech,
Speaker 6: have actually made the bigger impact on earnings. Nonetheless, when
Speaker 6: you exclude those two charges, you're tracking about five percent
Speaker 6: earnings growth for the S and P five hundred, including
Speaker 6: analyst estimates for what's to come. That's a bit better
Speaker 6: than the analysts we're forecasting at the start of the season,
Speaker 6: which was just under four percent growth, so better than expected.
Speaker 6: But all the big companies have yet to report. We've
Speaker 6: got thirty seven percent of the market porting this week,
Speaker 6: including the biggest names of Microsoft, Alphabet and Meta. TMT
Speaker 6: is really where all the growth is expected to come from.
Speaker 6: So I'm a little old school. TMT is no longer
Speaker 6: the way we describe it, it's tech and communications, but
Speaker 6: those two sectors are tmt for those of us that
Speaker 6: have lived, you know, through the nineties and beyond. Yeah, exactly. Nonetheless,
Speaker 6: those groups are basically driving all of the growth on
Speaker 6: the index this quarter. So that's where all of the
Speaker 6: optimism lies and certainly where most of the risk lies
Speaker 6: as well. Well.
Speaker 3: It's interesting, and you know, when we get to things
Speaker 3: like margins and different ways of kind of looking at
Speaker 3: the quarter, I mean, is there anything of note that
Speaker 3: you're focusing on on that front?
Speaker 6: Yeah, So margins are incredibly important because margins are where
Speaker 6: all of the analyst optimism is going forward. There's a
Speaker 6: couple of ways that earnings can be You can see
Speaker 6: top line beats, which certainly would be very very welcome,
Speaker 6: analysts are not anticipating a whole lot of top line
Speaker 6: growth to emerge this year. Or you can see margins
Speaker 6: beat expectations, where analysts are already into the painting margin
Speaker 6: improvement coming through the year. So I think that there's
Speaker 6: a bigger risk in margins than there is in top
Speaker 6: line growth, just for this reason, given expectations that are
Speaker 6: implied by the market as well as by analysts forecasts.
Speaker 6: Margins so far are coming in pretty strongly. We see
Speaker 6: the vast majority of companies beating on net income margins.
Speaker 6: Operating margin is still a fifty to fifty where there
Speaker 6: is still a decent amount of operating risk, but net
Speaker 6: income margins companies are beating so far. So it's something
Speaker 6: we'll watch, especially with respect to tech.
Speaker 4: Why do you think we've seen a steeper cell off
Speaker 4: for missus so far this quarter? Like, I know, expectations
Speaker 4: are certainly high, and this is earning's driven, but why
Speaker 4: is this quarter it's ptty particularly sensitive.
Speaker 6: It's mostly I think it's a function of we're early
Speaker 6: yet more than anything else. So I don't want to
Speaker 6: draw too much into that, but we have seen companies
Speaker 6: respond pretty negatively to misses. I think it's a couple
Speaker 6: of reasons. The first is financials didn't start us off
Speaker 6: on a great foot, even though companies generally beat expectations.
Speaker 6: In financials, there's a lot of nervousness about what's going
Speaker 6: on in face and it felt weak. Yeah, so that
Speaker 6: was a pretty weak's start. Let's see where we go
Speaker 6: from here with respect to price performance following earnings. The
Speaker 6: other thing just to consider is some of this could
Speaker 6: be spurious, right, It could just be the market at
Speaker 6: largest selling off. And when the market at large is
Speaker 6: selling off, the misses appear to be enormous price responses,
Speaker 6: even when all it really is is everybody's just selling risk.
Speaker 3: I always feel like your tone, and I feel like
Speaker 3: your tone is a little bit more subdued or more cautious.
Speaker 3: Has it gotten that.
Speaker 6: Way of Uh? Yeah, so, not necessarily because of earnings.
Speaker 6: I think earnings are still a pretty solid backstop. But
Speaker 6: at the end of the first quarter, when we run
Speaker 6: through all of the different models that we use to
Speaker 6: assess the equity market, the technicals actually we're signaling a
Speaker 6: week time to come coming into the second quarter. Not
Speaker 6: necessarily that earnings are problematic, but things are more difficult
Speaker 6: now for a lot of reasons. Technicals, correlations inside the
Speaker 6: market were flagging a great degree of risk. Industry signals,
Speaker 6: all of our leading industry cueues were turning over at
Speaker 6: the end of March, all of them. So yeah, so semiconductors,
Speaker 6: home builders, transports, all the leading indicators of what you
Speaker 6: would anticipate, we're starting to turn over again. This doesn't
Speaker 6: mean a horrible climate. But this type of risk was
Speaker 6: flagged also to us back in July of last year
Speaker 6: when we were, you know, turning over into a ten
Speaker 6: percent correction in stock. So I want to, you know,
Speaker 6: be a little bit conscious of this. The technicals are
Speaker 6: quite weak. We started off on week footing that said,
Speaker 6: the economic strengths and the earning strengths have only improved
Speaker 6: over the last six to nine months, so there should
Speaker 6: be some offset there. But it does imply a choppier
Speaker 6: climate for Q two.
Speaker 4: So what has come at the same time, and perhaps
Speaker 4: the reason is the FED chair actually talking last week
Speaker 4: about dialing back and resetting rate expectations. And we certainly
Speaker 4: saw some selling last week and even this quarter on
Speaker 4: the S and P five hundred, we're down four point
Speaker 4: two percent right today's recovery quote unquote recovery notwithstanding. But
Speaker 4: I'm wondering how you're thinking about that.
Speaker 6: Yeah, I view what happened the FED is an amplifier
Speaker 6: of existing trends, not the spark. Right, we already saw
Speaker 6: markets turning over in anticipation of some greater weakness emerging
Speaker 6: over the second quarter. We saw that with the end
Speaker 6: of first quarter surge into a new high and then
Speaker 6: we started started seeing a turnover. So while the FED
Speaker 6: speech last week was important, it merely amplifies what was
Speaker 6: already happening in the equity market. And I think if
Speaker 6: you read through to the stocks and sectors that performed
Speaker 6: poorly last week, I think what's really happening in the
Speaker 6: market is a lot of fear with respect to the
Speaker 6: Can Tech continue to hold up amidst this environment of
Speaker 6: rotation which really started to go all the way back
Speaker 6: at the beginning of March. We started noting rotation emerging
Speaker 6: in the equity market, this leadership transition. If Tech's not
Speaker 6: the leader, who is the new leader? That creates a
Speaker 6: little moment of anxiety for the equity market at the
Speaker 6: very least, and may certainly stall the advance.
Speaker 3: So the S and P back above five thousand today.
Speaker 3: Last week was what the worst weekend over s and
Speaker 3: P down about five and a half percent from the
Speaker 3: March twenty eighth peak to this past Friday. NDX NAZEK
Speaker 3: one hundred, down about seven percent between that March twenty
Speaker 3: second high and last Friday. That is some of the
Speaker 3: nervousness we're starting to see. But it get worse. Are
Speaker 3: you expecting more downside on these indexes.
Speaker 6: Look, I think if the tech companies cannot satisfy expectations
Speaker 6: and keep raising forecasts going into the rest of the year, yes,
Speaker 6: it could absolutely get worse because tech has been such
Speaker 6: a big part of the market's optimism so far this year. Now,
Speaker 6: one thing is happening in the first quarter that I
Speaker 6: think is pretty notable and maybe is also behind this
Speaker 6: recent rotation in the market, and that is this is
Speaker 6: peak earnings growth for tech. It is peak quarter. Between
Speaker 6: last quarter and this quarter, We're peaking, and we will
Speaker 6: have to see some earnings deceleration, at least according to
Speaker 6: the analyst consensus. Will the tech companies tell us it's
Speaker 6: not decelerating or not could be a key question over
Speaker 6: the course of the next few weeks.
Speaker 3: A lot to keep us busy, all right, Gina, Thank
Speaker 3: you so much, Gina. Mark Adams, chief equity strategis at
Speaker 3: Bloomberg Intelligence.
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Speaker 3: All right, everybody, Well, last week, you might remember the
Speaker 3: IMF edging up global growth. Meantime, the Atlanta Fed GDP
Speaker 3: now Model estimate for real GDP growth in the US
Speaker 3: in the first quarter of twenty twenty fourth two point
Speaker 3: nine percent. That was on April sixteenth. It's up from
Speaker 3: two point eight percent before that. We're going to get
Speaker 3: another update from the Atlanta Fed on Wednesday. So we
Speaker 3: have seen the numbers. We've talked about this, they've been
Speaker 3: rotcheting them up higher.
Speaker 4: Meantime, On this Earth Day, Bloomberg's Mark Gonglo reminds us
Speaker 4: that the only thing climate change is cooling is growth.
Speaker 4: Mark is Bloomberg opinion editor and columnist who covers climate change.
Speaker 4: He joins us this afternoon from New Jersey. Mark, the
Speaker 4: climate has gotten hotter, continues to get hotter. But and
Speaker 4: we know this, We knew that. What was surprising to
Speaker 4: me about the study that you cited is that it's
Speaker 4: going to actually make global income nineteen percent lower by
Speaker 4: twenty forty nine. How do we get there? First of all,
Speaker 4: that's all there, and first of all that's also bad news.
Speaker 7: I should yes, global income lower by nineteen percent is
Speaker 7: definitely bad news. That amounts to about thirty eight trillion
Speaker 7: dollars a year by twenty forty nine. Obviously you're ramping
Speaker 7: up to that point, so you're losing trillions and trillions
Speaker 7: of dollars, and that is coming from just heat for
Speaker 7: the most part, extreme heat. Variability in temperatures too, and
Speaker 7: variability in water, so that affects. Heat affects human health
Speaker 7: and productivity. Our brains don't work as well, we're not
Speaker 7: as productive of when we're really hot. And the variability
Speaker 7: and water gives you huge droughts, as we're seeing already
Speaker 7: in Africa, and also gives you terrible flooding, which we're
Speaker 7: also seeing in many other parts of the developing world
Speaker 7: this week. So all of these things affect economic growth, productivity, agriculture, industry,
Speaker 7: all of that, shaving up to nineteen percents off of
Speaker 7: global income, which is not the same as GDP, but
Speaker 7: it's just about the same. It's similar by twenty forty nine.
Speaker 3: Yeah, it's going to impact how people you know around
Speaker 3: the globe, whether or not they've got money to spend right,
Speaker 3: which is certainly creates velocity, economic velocity and growth within
Speaker 3: the economy. Having said that this study, as you note,
Speaker 3: Mark and your piece, is that it's a little bit more.
Speaker 3: I mean the cost is more than past research and
Speaker 3: studies have shown. What's the difference. What's why are they
Speaker 3: coming out with this or finding this finding versus maybe
Speaker 3: some more subdued findings of the past.
Speaker 7: Yeah, in fact, it's it's a lot more. There was
Speaker 7: a study, a famous study about five years ago suggested
Speaker 7: it would be more like twenty percent off of global
Speaker 7: GDP by twenty one hundred. This study says, if we
Speaker 7: don't start cooling the planet down, or if we don't
Speaker 7: stop making the problem worse, we could have a sixty
Speaker 7: percent hit to a global income by twenty one hundred.
Speaker 7: So you're talking magnitudes worse. They say that they have
Speaker 7: new models that they're looking at that incorporate the fact
Speaker 7: that some of these impacts on economics last forever. If
Speaker 7: you have a generation of kids who don't learn as
Speaker 7: much and don't have as much economic opportunity, that affects
Speaker 7: future generations. And so they have all these different variables
Speaker 7: they're plugging into their model, and they're spitting out these
Speaker 7: huge numbers. You could argue with the numbers, and some
Speaker 7: climate scientists have kind of taken some issue with a
Speaker 7: few of the numbers here and there, I think said
Speaker 7: the important message to me. There are two important messages
Speaker 7: to me that come out of it, no matter how
Speaker 7: you slice the numbers, which are also very difficult to forecast.
Speaker 7: Of course, One is that we are going to lose
Speaker 7: a lot more by not doing anything about climate change
Speaker 7: than we are going to lose by doing something about it.
Speaker 7: So Bnaf Bloomberg in NEF suggests it could cost two
Speaker 7: hundred trillion dollars by the middle of this century to
Speaker 7: mitigate climate change. Two hundred trillion dollars is kind of
Speaker 7: a lot of money, but it's you spend that at
Speaker 7: about six years if you're losing thirty eight trillion dollars
Speaker 7: a year, So it's an investment to avoid many, many
Speaker 7: more trillions of losses. And the second key thing is
Speaker 7: that much of this economic impact is landing on the
Speaker 7: people who deserve it the least, and so developing Africa,
Speaker 7: South Asia, South America, these places are going to see
Speaker 7: GDP hits of maybe thirty to thirty three percent by
Speaker 7: mid century, again according to this study, but again this
Speaker 7: is consistent with what we know that these impacts fall
Speaker 7: most heavily on places that probably deserve.
Speaker 1: It the least.
Speaker 3: Explain because there's something you go into in the story
Speaker 3: about this isn't degrowth, And I don't know that it's
Speaker 3: a term that I feel like I've been using much
Speaker 3: when it comes to climate change, which is why we
Speaker 3: always love reading your columns. But you note that what
Speaker 3: fossil fuels are doing to the world isn't quite degrowth.
Speaker 3: So de growth is what when you kind of slow
Speaker 3: down output to reduce the impact on environment. This isn't
Speaker 3: what you're talking about.
Speaker 7: No, not exactly. At first blush, it kind of seems
Speaker 7: like that. And so there are climate activists who say,
Speaker 7: you know, we need to stop growing the economy so much,
Speaker 7: and so that would involve cutting growth. And I guess
Speaker 7: an example of this could be when COVID hit in
Speaker 7: twenty twenty. You saw growth just fall off the table
Speaker 7: and all of a sudden, nature was healing and emissions
Speaker 7: weren't as bad. And people said, hey, if we just
Speaker 7: did this all the time, we'd save the planet. Well,
Speaker 7: the problem is you can't really do that all the time,
Speaker 7: because not having any economic growth it creates its own problems,
Speaker 7: especially again for developed in countries who haven't had the
Speaker 7: chance to develop and don't have the standards of living
Speaker 7: that we do. So what this is doing is not
Speaker 7: that even with climate change there the scientists are saying
Speaker 7: the economy will keep growing, it will just be stunted,
Speaker 7: sort of the way. You know, my mom used to
Speaker 7: tell me if I smoke cigarettes, my growth would be stunted.
Speaker 7: So that's it would stunt our growth. We would still grow,
Speaker 7: but it would be stunted, and over time it would
Speaker 7: get much worse, which is the other key message to
Speaker 7: come out of this, which is that there is still
Speaker 7: time to avoid far worse outcomes.
Speaker 4: I wonder Mark, how a message like this resonates in
Speaker 4: your opinion, because Carol and I talk about this all
Speaker 4: the time walking into work, when the skies are full
Speaker 4: of smoke from wildfires, you know, thousands of miles away.
Speaker 4: That is something there's something visceral about that. You know,
Speaker 4: your basement because of it becoming unusable because three or
Speaker 4: four times a year the weather is so extreme that
Speaker 4: it floods. You know, there's something that really hits you
Speaker 4: about that. But I'm wondering if this type of story,
Speaker 4: this type of data hits people the way that those
Speaker 4: actual other things do.
Speaker 7: It's really difficult because you're talking about future generations, and
Speaker 7: we seem to have a real hard time thinking about, well,
Speaker 7: you know, my grandchildren are going to suffer from this.
Speaker 7: And then also we have a really hard time putting
Speaker 7: numbers like thirty eight trillion dollars a year into context.
Speaker 7: It's like, okay, thirty eight trillion dollars a year, or
Speaker 7: you read the headlines about well, all the Arctic ice
Speaker 7: is melting and oceans are hotter than they've ever been.
Speaker 7: I mean, some of this stuff can be so doomy,
Speaker 7: gloomy and doomy that you just say, all right, well
Speaker 7: we're doomed anyway. I might as well eat a cheeseburger
Speaker 7: and roll coal out in the parking lot. But it
Speaker 7: really is true that we still can make a difference,
Speaker 7: that we're not doomed by any stretch yet. And so
Speaker 7: I think sometimes numbers like this, we are already suffering
Speaker 7: hits to our pocketbook. Right now. We talk about thirty
Speaker 7: eight trillion by twenty fifty, people say, I don't even
Speaker 7: know what means. I don't care, but people are losing
Speaker 7: money in Florida as we speak, and in California because
Speaker 7: they can't get their homes insured. And the next wildfire season,
Speaker 7: the next hurricane season, the next floods that come, there
Speaker 7: are going to be a lot of people who are
Speaker 7: going to be surprised to find that they're under insured
Speaker 7: and so and they're they're going to take a huge
Speaker 7: financial and economic hit. So these economic hits are happening
Speaker 7: right now, and I think maybe that's a way to
Speaker 7: help contextualize it for people, to make it real, like
Speaker 7: wildfire smoke.
Speaker 3: Mark to that point. There's another story on the Bloomberg
Speaker 3: and it talks about the economic impact of climate change,
Speaker 3: specifically on global tourism, broken down by some of the
Speaker 3: top countries that rely on tourism for growth. And we
Speaker 3: have a great chart for those who are watching on
Speaker 3: YouTube and are Bloomberg originals. But the whole idea is
Speaker 3: in this story. It says by the end of the century,
Speaker 3: residents of northern countries will generally see sunny spring like
Speaker 3: bomb a pair appear excuse me earlier in the winter. Conversely,
Speaker 3: those in the south, including equatorial regions and extending into
Speaker 3: southern Europe and the US well for the most part
Speaker 3: enjoy fewer days of temperate weather year round. I mean,
Speaker 3: this is something we talk about, tourism so important to
Speaker 3: so many different either cities or countries, like this is
Speaker 3: again another economic impact. Just got forgive me about twenty
Speaker 3: five seconds. I mean this place to what you are
Speaker 3: talking about.
Speaker 7: For sure, and even in those place so even in
Speaker 7: the places that will bear less of the brund, there
Speaker 7: still is an impact. There's an economic impact. And in
Speaker 7: some of those countries you're talking about where there will
Speaker 7: be sunnier days, but maybe your skiing industry doesn't get
Speaker 7: as much snow, and so you lose a lot of
Speaker 7: tourism that way. And then you have climate refugees leaving
Speaker 7: the places that are hit a lot to try to
Speaker 7: go to the nicer places. And then you have a
Speaker 7: whole political issue.
Speaker 3: Yeah, changing after days though, like changing interesting, tough, but
Speaker 3: as you always say, maybe not too late. That always
Speaker 3: gives me hope. Mark Gungloff, thank you so much, editor
Speaker 3: at Bloomberg Opinion, joining us there in New York City.
Speaker 3: Check out his column. You can find it on the
Speaker 3: Bloomberg also at Bloomberg dot com Slash Opinion.
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Speaker 4: Today, Is there a day? And an important thing to
Speaker 4: think about is where on Earth all of our food
Speaker 4: comes from?
Speaker 2: Yeah?
Speaker 3: And when it comes to farming in the US, well,
Speaker 3: farms are becoming fewer and farther between the number of
Speaker 3: farms in the US following by more than one hundred
Speaker 3: and forty thousand between twenty seventeen and twenty twenty two,
Speaker 3: and the number of farm acres fell by twenty million
Speaker 3: over that same period of time. This is according to
Speaker 3: USDA data cited by the American Farm Bureau of Federation
Speaker 3: as an advocacy group that represents farmers and ranchers but
Speaker 3: generally on the decline.
Speaker 4: Well, Yeah, and the group argues Carol that there are
Speaker 4: too many challenges that just make it unsustainable for family
Speaker 4: farms to stay in business these days. That's where Elmer
Speaker 4: Mayer comes in. He's the co founder and CEO of
Speaker 4: If It's working on technology that uses sensors, AI and
Speaker 4: robotics to give farmers a granular view of their cultivation environment.
Speaker 4: The idea is that increasing copy yields and reducing costs,
Speaker 4: of course, helps with the growing environment. Alma joins us
Speaker 4: from Santa Cruz, California. Good to have you back on
Speaker 4: the program, Almar, how are you.
Speaker 5: Good? Thank you so much for having me. Yeah, excite,
Speaker 5: we'll be back.
Speaker 4: Yeah, thanks for joining us again. Give us an update
Speaker 4: on where exactly you are with this spider technology and
Speaker 4: explain once again for audience exactly how it helps farmers.
Speaker 5: Yeah, happy to do so.
Speaker 2: So. It's basically a football stadium camera for greenhouses or
Speaker 2: indoor growing environments. It's like a cable based system which
Speaker 2: like a football stadium camera, basically moves around they cannot
Speaker 2: be and flows up off the crop and monitors the crop.
Speaker 2: It collects a lot of different data like temperature. Hu
Speaker 2: made it these two. It takes images to understand what's
Speaker 2: going on with each plant and analyzes it.
Speaker 5: So it's basically alleviates.
Speaker 2: That burn for cultivators to walk the crop every day
Speaker 2: and check out every plant, which is tedious and like
Speaker 2: not scalable.
Speaker 4: Is it possible in your mind ever to use this
Speaker 4: in fields outside and outside of greenhouses.
Speaker 2: Oh, definitely. The way how we look at it is
Speaker 2: that Neatly is based on two pillars. One is the
Speaker 2: automation the data collection, like the robotic side of things
Speaker 2: where we developed the native spider to harvest the data.
Speaker 2: But then the other part is all the data analytics,
Speaker 2: like the processing of the data, the AI which picks
Speaker 2: up on blend health, on pests, on crop properties, and
Speaker 2: that's agnostic to where the data comes from. So we
Speaker 2: could easily either mount four pillars outside of a vineyard
Speaker 2: and have a spider collected data, or mount the same
Speaker 2: sensor box onto a drone and collect the data in
Speaker 2: an open field.
Speaker 3: Talk to us a little bit about all of the
Speaker 3: data that you have been collecting, the quantity and kind
Speaker 3: of the diversity of that data. That helps you help
Speaker 3: your clients, right.
Speaker 2: So they The way how we looked at it originally
Speaker 2: was like we try to understand how cultivators operate their
Speaker 2: environment that their fields like the greenhouses, and they heavily
Speaker 2: rely on the visual feed. They obviously monitor the environmentals.
Speaker 2: They try to understand what's going on in the soil
Speaker 2: and the substrate. But then they really rely on looking
Speaker 2: at the bland, assessing what's going on, reading that language
Speaker 2: of their plants and like doing that, but like moving
Speaker 2: around the plant, walking the greenhouse, et cetera. And that
Speaker 2: was really what inspired us to create like a system
Speaker 2: which is flexible, low cost, easy to install, but at
Speaker 2: the same time provides all this information which.
Speaker 5: Is necessary to assess what's going on in the field.
Speaker 2: And so having image data collecting like they're assessing what's
Speaker 2: like taking it, like assessing how the blands look like,
Speaker 2: what the issues might.
Speaker 5: Be, is just a new domain and new dimension which
Speaker 5: we can offer to the culture.
Speaker 2: We count every yellow leaf, for example, to count every
Speaker 2: necronic leaf, every folded leaf, the pests. We count every
Speaker 2: flower of flower size, how it evolves throughout.
Speaker 5: The growth cycle.
Speaker 2: So now all of a sudden you have a direct
Speaker 2: feedback loop to whatever you do in the field, whatever happens,
Speaker 2: and you can say like, oh, my crop has ten
Speaker 2: percent more yellowing today, it has five percent less folding,
Speaker 2: and compare crops across different growth cycle.
Speaker 5: That's unique.
Speaker 3: It's kind of like the ultimate drome or spy camera.
Speaker 3: It'd be quite fair and it reminds me of if
Speaker 3: you've ever gone to a sports game er I think.
Speaker 3: But we're in the US Open covering it tennis, and
Speaker 3: it's that camera that comes down in zooms and it's
Speaker 3: on these cables and it catches people you know, that
Speaker 3: are watching in the stands. So it's really kind of
Speaker 3: interesting in terms of the technology, and those you are
Speaker 3: watching us right now on YouTube and streaming on originals
Speaker 3: can see it. Having said that, you guys have been
Speaker 3: up and running for about I believe four years or so.
Speaker 3: Now give us an idea of what the impact if
Speaker 3: this is going to be helpful in terms of yield
Speaker 3: and growing and productivity and efficiency. I mean, tell us
Speaker 3: what the results have been from some of you, either
Speaker 3: the studies that you guys have done or some of
Speaker 3: the customers that you're working with.
Speaker 2: Yeah, it has been an amazing journey so far. There
Speaker 2: you've started about four years ago. It took us like
Speaker 2: half a year nine months to come up with the
Speaker 2: idea of the spider, and then we executed and that idea,
Speaker 2: we quickly installed first prototypes and then iterated improved ensure
Speaker 2: that it works reliably. It collects the data which we
Speaker 2: need and we have been running these systems now for
Speaker 2: over two years in the field, and last summer we
Speaker 2: then decided to ramp up production to really like accelerate
Speaker 2: and like produce more and more of the systems because
Speaker 2: we realize that the customers really love it and there's interest.
Speaker 2: And since the beginning of the year, we have tripled
Speaker 2: installations and we have a backlock of orders now until June,
Speaker 2: which is very exciting.
Speaker 5: But it really seems like.
Speaker 2: A new concept of what you get from in terms
Speaker 2: of data from the field. But once customers see that
Speaker 2: in their own field it's just a very sticky product,
Speaker 2: they quickly understand the value and the bower of this
Speaker 2: and they want more.
Speaker 4: How do you scale this? It's I mean, I've hard
Speaker 4: time imagining the salesforce that's required to go out and
Speaker 4: sell this product across the US and across the world
Speaker 4: to farms. It's not an easy thing.
Speaker 3: And I'm curious how much it costs because I'm thinking
Speaker 3: about smaller independent farmers which are increasingly whether it's organic
Speaker 3: or regenerative farming, which we've been doing a lot on
Speaker 3: in the last couple of weeks. You know, whether or
Speaker 3: not it's affordable, right so.
Speaker 2: The scaling itself right now, it's a lot about like
Speaker 2: going to trade shows, presenting a system, talking to potential customers,
Speaker 2: and the word of mouth by customers themselves where we
Speaker 2: get a lot of incoming demand. They obviously like installing
Speaker 2: the systems. Right now, it's our team which still goes
Speaker 2: to the different places install the first system, but it's
Speaker 2: really designed in a way where the customers can install
Speaker 2: it by themselves.
Speaker 5: Most of them have like facility team if they are bigger,
Speaker 5: but even like.
Speaker 2: You know, all the cost all the cultivists are in
Speaker 2: general very handy and they have to fix a lot
Speaker 2: of the issues around their farm anyway, So we try
Speaker 2: to design it in a way which makes it very
Speaker 2: easy to install, so that we can just shift them
Speaker 2: a box, they install the system, and that removes all
Speaker 2: that overhead of installation costs, et cetera. Yeah, cost wise,
Speaker 2: it's a very interesting. We try to alleviate that initial
Speaker 2: hurdle to kind of say like everyone can just try
Speaker 2: it out, you know, so you can rent the hardware
Speaker 2: for like three hundred dollars a month. You basically rent
Speaker 2: the hardware as long as you want. At the point
Speaker 2: where you want to commit to it. You just purchase it.
Speaker 2: It's a couple of thousand dollars to purchase the hardware
Speaker 2: and then you get a discount, so it's really worthwhile
Speaker 2: basically that that investment.
Speaker 5: But we didn't want to have anyone.
Speaker 2: To like really you know, think long about before trying
Speaker 2: it out, because it's really this game change of when
Speaker 2: you see your own data gathered by the device.
Speaker 3: One thing I'm thinking, you see, you know, for it
Speaker 3: to be kind of a gay change around the industry
Speaker 3: perhaps in terms of methods, is the industrial farmers getting involved?
Speaker 3: Are any of them interested? Are they biting and signing
Speaker 3: up for the systems?
Speaker 2: Definitely, they love it, especially the bonds which have multiple
Speaker 2: facilities across different states or countries. They always struggle that
Speaker 2: they have, you know, they're experts which they don't have
Speaker 2: to send around. They fly around, visit each facility and
Speaker 2: assess what's going on with our system. They can provide
Speaker 2: way better feedback remotely, They can guide the teams underground.
Speaker 2: They can compare data across different facilities, which obviously allows
Speaker 2: them to like standardize it more and become more consistent.
Speaker 2: So we see a lot of very very largest excitement
Speaker 2: from exactly bigger industrial cultivators.
Speaker 4: Really appreciate you joining us this afternoon with an update, Elmare,
Speaker 4: Thanks so much. Elmer Mayor. He's the co founder and
Speaker 4: CEO of Netleaf, the company using technology answers AI robotics
Speaker 4: to give farmers a granular view of their crops.
Speaker 3: I think about it like either some of the vineyards
Speaker 3: right we're just talking on Friday and just doing the
Speaker 3: regenerative forming, but having that capability to kind of look
Speaker 3: around and see where there's problems in terms of leafs
Speaker 3: or you know, pick up on problems or pests would be.
Speaker 1: Kind of cool.
Speaker 3: I don't know, it's kind of interesting how they're doing it.
Speaker 2: Mack journal.
Speaker 3: How about you let me drive?
Speaker 5: Oh no, no, no, no, who's going to honey?
Speaker 2: Please?
Speaker 1: How do the gravel?
Speaker 5: Let's make I want to drive. It's a good question.
Speaker 1: This is the drive to the globe?
Speaker 5: Do cons think well?
Speaker 1: By Don on Bloomberg.
Speaker 3: Radio and Video four percent right now as we speak.
Speaker 4: Wow, yeah, all because of soft Bank.
Speaker 3: Yeah maybe I think that what's going on there? Yeah,
Speaker 3: it's actually one of my gainers perci of you because
Speaker 3: I was actually like I put it on my list
Speaker 3: because like an analyst making some comments too about buying
Speaker 3: maybe the pullback, but yeah, stop making a big investment.
Speaker 3: It's like a billion dollars.
Speaker 4: Yeah, and they're buying Nvidio chips to power that Jenny. Yeah,
Speaker 4: pretty cool, that's pretty pretty cool.
Speaker 2: That's interesting that I get a stock moving.
Speaker 3: Meta is up about looks like about nine tens of
Speaker 3: a percent. Let me just pull it up, make sure
Speaker 3: I got the current trade. Now it's up about half
Speaker 3: a percent. It was up more than two percent earlier
Speaker 3: in the session. Apple it's a little bit higher today,
Speaker 3: up about eight tens of a percent. Netflix, Yeah, just
Speaker 3: a tinge higher in today's session. Amazon it is up
Speaker 3: just a quick check here, up about one point four
Speaker 3: percent here. So we're seeing some of those names that
Speaker 3: have often been, you know, so much of the momentum
Speaker 3: behind the overall equity trade and gains in the S
Speaker 3: and P five hundred. Yeah, moving to the upside today.
Speaker 4: Okay, Well, let's get an idea of what our next
Speaker 4: guest has to say about all this. Dave don A
Speaker 4: Beating is chief investment officer at cib SEE Private Wealth Management. Dave,
Speaker 4: good to have you on the program. You argue that
Speaker 4: the recent pullback in stocks that we saw today, notwithstanding,
Speaker 4: could turn into a full blown correction. What's your thinking there?
Speaker 7: Sure good? Good to be with you.
Speaker 8: Well, I would say we're not all that far from her.
Speaker 6: Right.
Speaker 8: We've had a nice rally today, but before that we
Speaker 8: had a five to six percent pullback, and if you're
Speaker 8: going to call ten percent of correction, it's not that
Speaker 8: far away. It's a you know, a seasonally challenging time
Speaker 8: for equities as you roll into into April and May.
Speaker 8: And I've got to remember that we entered the month
Speaker 8: of April with a highly valued market twenty one and
Speaker 8: a half times you know pe multiple on the S
Speaker 8: and p sky, high positive sentiment, and it was just
Speaker 8: sort of right for some disappointment. And you know, the
Speaker 8: macro environment that was was so rosy in terms of
Speaker 8: the consensus where inflation was going to come down, the
Speaker 8: economy is going to keep chugging along, double digit earnings
Speaker 8: growth in of course, you know, very aggressive rate cuts
Speaker 8: from the Fed. Obviously it looks a little different today.
Speaker 8: The growth story I think is going to come through,
Speaker 8: but the inflation numbers have been kind of sticky on
Speaker 8: the way down, and obviously there's been a radical downgrade
Speaker 8: in terms of expectations of how much help and when
Speaker 8: we're going to get it from from the Federal Reserve.
Speaker 8: So it was just a somewhat more challenging macro environment
Speaker 8: and the context of a somewhat highly valued market. And
Speaker 8: it wouldn't take that much to get to correction territory.
Speaker 8: But important point is it's a correction within a bull market.
Speaker 8: It's a normal part of the process. It's just the
Speaker 8: uncomfortable part.
Speaker 3: Well, it's interesting too the S and P. Yeah, as
Speaker 3: you said, it's down about five and a half percent
Speaker 3: from the March twenty eighth pig to this past Friday
Speaker 3: than as Deek one hundred down about seven percent between
Speaker 3: the March twenty second high and last Friday. So we
Speaker 3: definitely have seen, you know, a different trend line over
Speaker 3: the last three weeks or so. Having said that, do
Speaker 3: you I don't know. On those pullbacks, Dave say to
Speaker 3: your clients, this is an opportunity to actually get a
Speaker 3: name that's now a little bit cheaper than it was
Speaker 3: a few weeks ago.
Speaker 7: For some names.
Speaker 8: Yes, I wouldn't say that about the overall market, but
Speaker 8: certainly you're always looking at these pullbacks or even they
Speaker 8: become corrections as opportunities to be able to buy stocks
Speaker 8: at the price you want to buy it at. There
Speaker 8: haven't been that many of those after market rise. So sure,
Speaker 8: on a selective basis, there are stocks today that are
Speaker 8: more attractive than they were at the beginning of the month.
Speaker 4: Why would you why say selective, Dave? Why would you
Speaker 4: say the overall market is not even is not a
Speaker 4: good deal right now?
Speaker 8: Well, I go back to valuation and and the fact
Speaker 8: that kind of great expectations were built into those valuations,
Speaker 8: and we still have a process here where I think
Speaker 8: the market has to adjust to a somewhat less hospitable
Speaker 8: macro backdrop.
Speaker 3: So I am curious. Here's an interesting week, right It's
Speaker 3: said to be the most important. We have the most
Speaker 3: names reporting when it comes to first quarter earnings this week.
Speaker 3: So we're gonna get from a lot of big, well
Speaker 3: known companies, including Alphabet. We're gonna hear from Meta, We're
Speaker 3: gonna from Tesla after the close tomorrow. So I do
Speaker 3: do you have kind of thought about the big tech
Speaker 3: community and those names that have been so responsible for momentum.
Speaker 3: Do you think it's time to see them kind of
Speaker 3: you know, continue to decline a little bit, maybe even
Speaker 3: more from where they've been. I don't know. I'm just
Speaker 3: curious if you have some thoughts on that, since our
Speaker 3: focus is so much on those names this weekday, and
Speaker 3: you hit on.
Speaker 8: The key issue, it's it's the earnings and the guidance
Speaker 8: that goes along with those earnings. I think the challenge
Speaker 8: for the for the you know, megacap tech names is
Speaker 8: that the pattern of their earnings expectations being greatly exceeded
Speaker 8: and management guidance exceeding expectations, that the bar is pretty high.
Speaker 8: I think to get big up moves off of earnings,
Speaker 8: they'll have to be you know, I think substantial beats
Speaker 8: with very positive forward guidance to really give these stocks, ah,
Speaker 8: you know, a major lift from here. But you know,
Speaker 8: one of the interesting things that is developing this year
Speaker 8: is one of the things we were looking for to
Speaker 8: confirm that this is in fact a bull market from
Speaker 8: a sort of a warm ROMP context, is the fact
Speaker 8: that the market this year has not been wholly dependent
Speaker 8: on this this handful of stocks. If you look at
Speaker 8: performance here today, actually tech is a is a middling
Speaker 8: performer as a sector, and you know, the leaders of
Speaker 8: communications is one of the leaders because mostly does a
Speaker 8: meta and Google, but the other leaders are energy, financials
Speaker 8: and industrials. So we have seen a broadening out of
Speaker 8: market participation this year, and that's I think a really
Speaker 8: positive development. We're not just dependent on a handful of
Speaker 8: stocks to drive the index.
Speaker 4: Okay, so give us an idea of what could derail
Speaker 4: your thesis this year, because I know you mentioned in
Speaker 4: your note geopolitics and it's not front and center today,
Speaker 4: but it's certainly in the back of a lot of
Speaker 4: investor's mind, just in the last thirty seconds that we
Speaker 4: have with you.
Speaker 8: Sure, I mean geopolitics is it always out? There is
Speaker 8: a source of volatilty in the markets, and there are
Speaker 8: more issues than normal today, So any given day something
Speaker 8: could happen to jolt the market, There's no question about that.
Speaker 8: But we've gone back and looked at what happens in
Speaker 8: these geopolitical episodes even when they go bad, and the
Speaker 8: market is extremely resilient and you can't predict these geopolitical outcomes,
Speaker 8: So the focus continues to be on economic growth, inflation,
Speaker 8: monetary policy, currencies, and valuations. To stick to those things,
Speaker 8: you'll be able to ride out the geopolitical crises, all.
Speaker 3: Right, Dave, Gonna leave it on that note. Listen, Thank
Speaker 3: you so much, Dave Dnabedie and he's a Chief investment
Speaker 3: officer over at CIBC Private Wealth Management. Joining us from
Speaker 3: Baltimore fans.
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