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Speaker 2: All right, let's get back to McDonald's. Michael Halen is
Speaker 2: Bloomberg Intelligence senior restaurant and food service analyst and joining
Speaker 2: us on McDonald's earning sate.
Speaker 3: Michael, what was your bigger takeaway here?
Speaker 4: Yeah, I guess you know, the biggest takeaway is that
Speaker 4: they still have work to do. You know, the stocks
Speaker 4: performed pretty well here. I guess results weren't as bad
Speaker 4: as expected. You know, July data that we've seen is
Speaker 4: pretty bad, so the fact that they're still negative isn't
Speaker 4: really surprising.
Speaker 5: But they definitely still have work to do.
Speaker 4: The five dollars meal deal seems to be bringing in
Speaker 4: some traffic. They're hopeful that, you know, the sales will follow,
Speaker 4: but it hasn't happened yet, you know, and they talked
Speaker 4: about the US really needing a revamp of its one
Speaker 4: two three dollar value meal. But we see this stock
Speaker 4: doing well, and it's for a good reason. This company
Speaker 4: has scale that nobody else does. They can offer price
Speaker 4: points that nobody else can. You know, they have a
Speaker 4: ton of marketing might So for those reasons in this
Speaker 4: really competitive market where where chains are fighting hard to
Speaker 4: track low income consumers, you know, McDonald's definitely has the tools.
Speaker 5: For me.
Speaker 6: The McDonald's experience was always an airport experience because I
Speaker 6: always say I could justified for say, hey, I'm rushed
Speaker 6: for time to gonna make my flake hits something quick.
Speaker 6: But now all the new airports and like the renovated
Speaker 6: Newark Airport, there's no fast food in those things anymore
Speaker 6: that you have to sit down and order and do
Speaker 6: all that kind of stuff.
Speaker 7: So that's why that's interesting.
Speaker 3: Isn't there fast food? But you it's like nice stuff
Speaker 3: like wraps.
Speaker 6: Well you get that stuff to go, But I mean
Speaker 6: you could always get like some fast food, serious fast food.
Speaker 8: All right.
Speaker 7: So, Mike, so what's the story for McDonald's here.
Speaker 6: Do they open stores, do they rationalize their footprint, what's
Speaker 6: kind of the strategy there in terms of managing their
Speaker 6: footprint these days?
Speaker 4: Yeah, well they're there and they're investedtily late last year
Speaker 4: they pushed for more aggressive store openings, right, and so
Speaker 4: that's going to continue to be the focus. They're they're
Speaker 4: gonna push hard to grow internationally. China obviously is a
Speaker 4: big point of focus for them. But yeah, it's gonna
Speaker 4: be it's going to be to open stores. But in
Speaker 4: order to motivate their franchisees to open stores, they're going
Speaker 4: to have to, you know, have a strong marketing program
Speaker 4: that's going to pull people into the into the restaurants,
Speaker 4: the existing restaurants, grow same store sales, improve profitability, and
Speaker 4: make it just a more attractive proposition for their international
Speaker 4: and US franchisees to open new stores.
Speaker 2: Didn't They unveil like a five dollars meal thingy, But
Speaker 2: that was at the end of the quarter, right, so
Speaker 2: we don't really know the full impact of that for McDonald's.
Speaker 4: Yes, yes, so on on on the call, management said
Speaker 4: that it it's driving traffic but not price, but not
Speaker 4: sales yet. So it seems like there's some trade down
Speaker 4: from current customers saying, you know, well five dollars, I
Speaker 4: get a lot of food for that five dollars, So
Speaker 4: maybe instead of getting a big mcnial, I'll get this
Speaker 4: five dollars meal deal, but so it hasn't really impacted
Speaker 4: results yet, but they said that, you know, historically traffic
Speaker 4: comes before the sales boost, and so they seem positive
Speaker 4: on it in this near term. You know, they said
Speaker 4: ninety three percent of franchisees in the US have agreed
Speaker 4: to extend this offer deeper into the summer.
Speaker 5: So they seem positive on it. But it's their real
Speaker 5: focus is going to have to be on the one
Speaker 5: two three dollars value menu.
Speaker 4: That menu isn't resonating with customers, right, and it seems
Speaker 4: like a full revamp is in the cards. You know,
Speaker 4: they've they've been They've received a lot of shade on
Speaker 4: social media that you can't find anything on that menu
Speaker 4: for a buck, right, and so some reengineering is going
Speaker 4: to be necessary necessary here in the United States.
Speaker 7: All right, dumb question of the day comes from me.
Speaker 6: Never at McDonald's, Burger King, even Starbucks the drive through
Speaker 6: line or they're like twenty cars deep. I walk inside,
Speaker 6: I walk right up to the counter and boom, I'm served.
Speaker 6: What is it about Americans that they into this drive
Speaker 6: through thing? And if I'm a McDonald's, isn't that a
Speaker 6: source of opportunity for me to figure out how to
Speaker 6: get them through faster.
Speaker 4: Yeah, well, I guess we're lazy, that's the problem, right,
Speaker 4: But uh no, to your point, you know, a big percentage.
Speaker 4: You know, historically that the counter was like say fifteen
Speaker 4: percent of a drive through restaurant sales, and historically that's
Speaker 4: really just been used when the drive through line is
Speaker 4: too long and people say, you know, I don't want
Speaker 4: to wait that long. I'm gonna I'm gonna, I'm gonna
Speaker 4: go inside and pick up my stuff. So there is
Speaker 4: an opportunity, there's and it's a it's a point of
Speaker 4: focus for all of the quick service restaurants we cover.
Speaker 4: Everybody is constantly trying to improve their throughput, you know,
Speaker 4: decrease the time waiting in line because they know, if
Speaker 4: there's you know, at a certain number of cars for McDonald's,
Speaker 4: historically it's been you know, say five or six cars
Speaker 4: in the drive through, people will draw either you know,
Speaker 4: drive past the restaurant or maybe they'll say, you know what,
Speaker 4: I'll park and come in. But uh that's that's potentially
Speaker 4: business loss, right, So you know, improving throughput at the
Speaker 4: drive through, in at the counter is constantly a point.
Speaker 2: I mean in theory, right, you get like an I
Speaker 2: thing to do the drive through, right, but that has
Speaker 2: been really tough to manage right now, right, it's not
Speaker 2: really the best.
Speaker 4: It's not working. I mean, people have they're having a
Speaker 4: lot of trouble with with accents not only from you know,
Speaker 4: international customers, but also dialects across the United States, so
Speaker 4: voice ordering and a lot of these AI initiatives. You know,
Speaker 4: there's a lot of potential with them, but they haven't
Speaker 4: been able to really pay dividends just yet.
Speaker 6: All right, So what is the investment call here, Mike
Speaker 6: for some of these you know, fast service, McDonald's, Burger King,
Speaker 6: what's the investment call here for these names?
Speaker 4: Well, they're looking at you know, it's interesting because the
Speaker 4: year over your comparisons, base effects get easier into the
Speaker 4: second half, but the consumer's weakening, right and so you know,
Speaker 4: McDonald said they expect you know, more consumer weakness over
Speaker 4: the next few quarters, right, And so there's definitely concern
Speaker 4: about about restaurants spending here in the second half. You know,
Speaker 4: I think I mentioned it at the top. McDonald's is
Speaker 4: well positioned though in uh in you know periods of distress.
Speaker 4: You know, during the Great Recession, they outperform by offering
Speaker 4: value that competitors couldn't match, right, And so it's a
Speaker 4: very tough environment. But we think McDonald's is positioned pretty
Speaker 4: well for such a tough environment.
Speaker 2: In the value war where everyone's chasing a smaller part
Speaker 2: of everyone's wallet. How do these guys remain profitable? I'm
Speaker 2: not just saying McDonald's, but like all its competitors too,
Speaker 2: Like it's sort of a race to the bottom to
Speaker 2: some perspective, how does that play out?
Speaker 5: It's not just a race to the bottom.
Speaker 4: So so in terms of the low and they're trying
Speaker 4: hard to keep that low income consumer business, and there's
Speaker 4: no doubt that that's a big focus right now, but
Speaker 4: they're also bringing in you know, middle income and higher
Speaker 4: income consumers into the fold. Right, so you also get
Speaker 4: this traded down effect where you know, yeah, sure, low
Speaker 4: income consumers are trading down into grocery store. But McDonald's
Speaker 4: and some of their competitors, Jack in the Box being one,
Speaker 4: you know, Chipotle, have been able to attract these higher
Speaker 4: income consumers that actually come in and buy premium items
Speaker 4: and spend more when they come the problem is they're
Speaker 4: just a much lower percentage of the overall traffic. But
Speaker 4: that's been that's what we've seen over the last year
Speaker 4: and a half or so. It's chains that have been
Speaker 4: able to attract these higher income consumers are definitely outperforming.
Speaker 6: So we're in your overall space there, MIC on the
Speaker 6: restaurant side, is the best place to be these days?
Speaker 4: Uh, you know it's it's it's companies that provide a
Speaker 4: lot of value and a and a very good price point, right,
Speaker 4: And so you know, like like most earning seasons and industries,
Speaker 4: you know, a lot of the top performers end up
Speaker 4: reporting earnings first.
Speaker 5: And we've seen that Chipotle, UH.
Speaker 4: And Texas Roadhouse or two, they outperform everybody on seamsore
Speaker 4: sales over the last five years and it's not even
Speaker 4: there's not even a close second. And a big reason
Speaker 4: why they've outperformed so by so much is that customers
Speaker 4: see a lot of value on that plate for the
Speaker 4: price that they pay, right, and they're and they're provided
Speaker 4: a pretty good customer experience, and that's what's bringing people
Speaker 4: in the door. If you're providing very strong everyday value
Speaker 4: and and a good in restaurant experience. You know, clean restaurants,
Speaker 4: good service, whatever that you know and everything that that entails.
Speaker 5: Then you're winning.
Speaker 6: Got it eat civil business, but a tough business, that's
Speaker 6: for sure. Michael Halen, Seniors, running food service analysts for
Speaker 6: Bloomberg Intelligence. Bring us up to date on You're good
Speaker 6: friends at McDonald's.
Speaker 5: Here.
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Speaker 7: Busy week here.
Speaker 6: Economic data of plenting including the FED on Wednesday. Lots
Speaker 6: of earnings, particularly for some of the big tech names
Speaker 6: which you think.
Speaker 7: Are going to be critical for this market.
Speaker 6: Let's check in with a professional who does this stuff
Speaker 6: for living, Marion Bartel's, chief investment strategist at Sanctuary Wealth. Marian,
Speaker 6: thanks so much for joining us here. What's your just
Speaker 6: your thirty thousand foot market call that you have to
Speaker 6: your clients? What are you telling your clients that they
Speaker 6: should be thinking about here as we head into the
Speaker 6: back half of this year.
Speaker 9: Well, as you pointed out, it is the alphabet soup
Speaker 9: of news this week. You know, the markets can go
Speaker 9: either way. But how we're telling clients to position is
Speaker 9: we actually think that we can actually rally this week.
Speaker 9: Markets are as over sold as they were back in April. Well,
Speaker 9: we commit to this year. We called it the Year
Speaker 9: of the Bucking Bull. And we've seen some bucks and
Speaker 9: we just got through some Bucks. But we don't think
Speaker 9: we're done with that yet. We think we can rally
Speaker 9: one more time and then I think the market bucks
Speaker 9: again in the fall in September and October, the traditional
Speaker 9: seasonal very week period for the market, but then having
Speaker 9: a year in rally, we're still expecting markets by the
Speaker 9: S and P five hundred to be up about twenty
Speaker 9: percent this year. We still think the leadership of the
Speaker 9: market is intact. That's the Magnificent seven, it's technology and
Speaker 9: that semis are still the leaders. Remember, if we're going
Speaker 9: to go towards AI, you can't have AI without semiconductor chips.
Speaker 6: So if the AI trade is still in place, the
Speaker 6: tech trade is still in place, how do you get
Speaker 6: comfortable with valuation in some of those names are just
Speaker 6: within SMP five hundred.
Speaker 7: In general, you know.
Speaker 9: That's a great question. I mean, obviously, the valuations were
Speaker 9: very high. You know, the markets were up by Nasdaq's
Speaker 9: representation twenty percent, where a lot of the tech names are.
Speaker 9: So between the market being extremely overbought, valuations extended, it
Speaker 9: was time for like a mean reversion kind of trade.
Speaker 9: Let's bring part of that in. But the reason why
Speaker 9: these tech names have such high valuation is because they
Speaker 9: have the strongest growth within the market. Although we're expecting
Speaker 9: good earnings this year, the market is not abundant with earnings.
Speaker 9: And when you don't have an abundance of earnings, you
Speaker 9: have a growth market. Fund managers and investors are willing
Speaker 9: to pay up for those earnings, So those stocks have
Speaker 9: higher multiples. So I'm comfortable with higher valuations. But maybe
Speaker 9: they just got a little bit too stretched. They've corrected
Speaker 9: and we're still buyers of this market.
Speaker 6: So how do you think about sectors outside of technology?
Speaker 6: Where do you see opportunities there outside of this big
Speaker 6: tech names.
Speaker 9: Well, there's a couple of spaces we like infrastructure. You know,
Speaker 9: Biden has passed a lot of pieces of legislation that
Speaker 9: are really supporting the growth of the infrastructure of our economy.
Speaker 9: You're really going to see a lot of stocks within
Speaker 9: the industrial sector. Defense is also in their defense is
Speaker 9: behaving well. With interest rates coming down and with the
Speaker 9: FED expected to cut rates in September, which we also
Speaker 9: anticipate by twenty five basis points. You're starting to see
Speaker 9: some of the intrasensitive parts of the market that have
Speaker 9: not done well, like utilities and rets we think have bottomed.
Speaker 9: Pockets of healthcare are doing better, Biotech has broken out.
Speaker 9: The breadth of the market has expanded, especially with that
Speaker 9: rally in July, and we actually hit a new high
Speaker 9: with breath indicators and the volume confirmed that. That's what
Speaker 9: really gives us confidence that we're still in a bull
Speaker 9: market and that we still want to be buying stocks here.
Speaker 6: Well, that's kind of where I wanted to go, Marian.
Speaker 6: We had, as you mentioned, kind of over the last
Speaker 6: several weeks, kind of a little bit of a rotation,
Speaker 6: maybe out of some of those magnificent seven names, maybe
Speaker 6: into some other areas of market, like small caps. We
Speaker 6: saw the Russell two thousand outperformed the S and P
Speaker 6: by the most on.
Speaker 7: Record over a two or three week period. Is that trade?
Speaker 7: Is that for real? Is it a flash in a pan?
Speaker 7: How do you think about that?
Speaker 9: So we're not fans of small cap. It has been
Speaker 9: a very impressive rally, and we think the reason why
Speaker 9: it was so impressive is that fast money typically called
Speaker 9: hedge fund CTAs, many of them had short positions within
Speaker 9: small cap. But we think some of those positions were covered,
Speaker 9: not all of them, but some. We just don't think
Speaker 9: the earnings power is there for small cap to take
Speaker 9: over leadership. So we think it's impressive. If you've been there,
Speaker 9: it's it's been great, but it's not where we really
Speaker 9: want to be positioning our clients right now.
Speaker 6: How about the fix income here? You know you can
Speaker 6: see here into your treasure and get four point four percent.
Speaker 6: It's not a bad way to make a living here,
Speaker 6: and if I want to maybe take some credit risk,
Speaker 6: I can do better than that.
Speaker 7: How do you think about fix income?
Speaker 9: Yes, what we've been saying for a while is that
Speaker 9: interest rates have peaked, both at the short end and
Speaker 9: the long end of the curve. We think they're going
Speaker 9: to continue to come down. For clients that are in
Speaker 9: cash that are getting five percent or even above five percent,
Speaker 9: we're warning them that can go away, especially if the
Speaker 9: FED begins a rate cutting cycle. So we've been telling
Speaker 9: clients to come out of short duration assets and take
Speaker 9: a little bit more duration risk, go a little bit
Speaker 9: more in the middle of the curve, which is called
Speaker 9: the belly of the curve. And as you pointed out,
Speaker 9: you can take credit risk, but we are stressing to
Speaker 9: stay with quality.
Speaker 2: When you take a look at quality, though, does it matter,
Speaker 2: like why the is cutting as in ooh, the economy
Speaker 2: is getting a lot weaker, we're looking ahead to the
Speaker 2: jobs number. Everyone's worried about the Kaldiasom rule being triggered
Speaker 2: versus inflation coming down.
Speaker 9: I think it is. You know, the market thinks that
Speaker 9: cutting rates can be a negative, and historically it is
Speaker 9: a negative because we're cutting for the wrong reasons. The
Speaker 9: economy is still growing a little bit slower. The consumer
Speaker 9: is still spending, but a lot slower. We're seeing manufacturing
Speaker 9: slow down. So I think in order to balance like unemployment,
Speaker 9: which as you pointed out, the unemployment rate is going out,
Speaker 9: it's important to actually try not to have a recession.
Speaker 9: And with these warning signs that the economy is slowing,
Speaker 9: I think it would be very appropriate for the Fed
Speaker 9: to cut rates, But the market's not to negatively react,
Speaker 9: because there's really nothing negatively wrong. In fact, what most
Speaker 9: people are not talking about is that the FED has
Speaker 9: already started easing. They change their position on their balance sheet,
Speaker 9: They started to have less run off their balance sheet,
Speaker 9: which is actually a form of easing. So I think
Speaker 9: the FED has already been in easing mode. Now it
Speaker 9: will be official with them cutting rates if they do
Speaker 9: in September.
Speaker 6: Would it be a problem for this market if they
Speaker 6: surprised us and did not cut in twenty twenty four.
Speaker 3: Yes, absolutely, that'd be huge.
Speaker 9: That would be a big surprise, both for equities and fixing.
Speaker 9: Come talk about a buck and bull, it's going to
Speaker 9: be buck and running the wrong way. So I don't
Speaker 9: think you'd want to do that to the markets. I
Speaker 9: know people have been speculating that maybe they'll cut at
Speaker 9: this meeting, but that would be a surprise as well,
Speaker 9: and I think that would be interpreted as negative as
Speaker 9: the FED is panicking over some of the recent data.
Speaker 9: So I don't think they'll be cutting here. Pal has
Speaker 9: been pretty traditional in telling markets what he's going to
Speaker 9: be doing, and he pretty much sticks to that, so
Speaker 9: I think he's kind of hinted pretty strong that it's September.
Speaker 3: It's going to be.
Speaker 9: Very interesting, uh, to see what they say in the
Speaker 9: meeting this week, But I'm still betting that it's twenty
Speaker 9: five basis points in September.
Speaker 2: Well, before you for we let you go, what language
Speaker 2: are you looking at to sort of firm that up?
Speaker 2: Because You're right, if Poll doesn't want us to surprise
Speaker 2: the market, it either has to be clear in the
Speaker 2: statement in some way or clear in the press conference
Speaker 2: in some way.
Speaker 9: Yes, so I you know the fact, I mean, Pal
Speaker 9: has sounded a little bit more dubvish, that's kind of
Speaker 9: the tone, not as hawkish as his words and language
Speaker 9: have been a little bit softer and a little bit
Speaker 9: more open that things are potentially weakening. So it'll be
Speaker 9: interesting to see exactly what they say. And I think
Speaker 9: what I'm going to be looking for. Are they so
Speaker 9: dubbish that the market really starts pricing in a rate
Speaker 9: cut also for either November or December. Right now, it
Speaker 9: looks like one hundred percent for September. Some are estimating
Speaker 9: it could happen in November and December. But that's what
Speaker 9: I'm really focused on. Do they hint that they cut
Speaker 9: more than once.
Speaker 7: All right, Mary, and thank you so much for joining us.
Speaker 6: Marion Bartel's she's a chief investment strategist as Sanctuary Wealth,
Speaker 6: joining us from New York via that Zoom thing.
Speaker 7: Appreciate it. There's another bull for you. I'm still out there.
Speaker 6: She was talking about a twenty percent total move in
Speaker 6: the S and P five hundred for twenty twenty four,
Speaker 6: so still got some work to do. Although she's one
Speaker 6: of those folks which I'm in that camp as well,
Speaker 6: which is you know, you've been in the market so long,
Speaker 6: you really get a sense of seasonality during the year,
Speaker 6: and I don't want to be anywhere.
Speaker 7: Near these markets in September or October.
Speaker 6: But that's just because my first year on Wall Street
Speaker 6: I was September nineteen eighty seven, and that was October
Speaker 6: nineteen eighty seven.
Speaker 7: Oh my, that was grim.
Speaker 3: So it's a traumatizing since.
Speaker 7: You know you don't want to be anywhere near these markets.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: One of the things to look at in the market
Speaker 2: is Bitcoin up by just one point two percent, but
Speaker 2: it's actually up eight hundred and twenty six dollars. That's
Speaker 2: the highest level earlier today since mid June. In the
Speaker 2: latest catalyst was Donald Trump expanding his pro crypto agenda.
Speaker 2: Plus you got those expectations that affet's going to be
Speaker 2: inching its way towards a cut probably in the fall,
Speaker 2: and that's also helping investor sentiment. So we needed to
Speaker 2: get the read on that as well as other commodities.
Speaker 2: With Mike mcloon, Bloomberg Intelligence Senior Commodity strategist, do you
Speaker 2: buy the theory that President Trump comes out and says
Speaker 2: he's going to fire Gary Gensler and he loves all
Speaker 2: crypto things. It's going to be number one in the US. Therefore,
Speaker 2: thus bitcoin goes up.
Speaker 10: I impressed how you phrased the question, Alex is most
Speaker 10: people seem to be believing that, but I look at
Speaker 10: it as there's no and then the lesson you'll learn
Speaker 10: is Nozell like a convert. Obviously he's converted because he
Speaker 10: ate the crypto before, but I think he's finally realizing
Speaker 10: things we wrote five years ago. This space is nothing
Speaker 10: but good for America. It's most widely track crypto is
Speaker 10: not Bitcoin. It's actually tether. The US dollar trades more
Speaker 10: than bitcoin double on a daily basis. But it's impressive
Speaker 10: what he's doing insane to get elected, and I think
Speaker 10: that's the number one thing. He's saying, whatever you can
Speaker 10: to get get elected, and that's what's happened. The crypto
Speaker 10: people have picked up onto it. But at this rally
Speaker 10: sounds it's a little suspicious because it happened right during
Speaker 10: the conference. The bitcoin conference that's in Tennessee. Now that
Speaker 10: used to be in Miami.
Speaker 7: Why isn't it in Miami anymore?
Speaker 5: Well, I hear that some handsome issues.
Speaker 10: I don't really dig into that, but it's kind of
Speaker 10: nice to see it move on because there's I just
Speaker 10: was on a couple of calls this morning with people
Speaker 10: were there. There's so much enthusiasm, as you expect in
Speaker 10: crowds and people getting together and all trying to as
Speaker 10: they sat as space pump their bags. But it it
Speaker 10: puts on my radars. This is when you want to
Speaker 10: be really careful with an asset that's basically three times
Speaker 10: of Altilia betas and B five hundred basically has been
Speaker 10: trading together with Beta for ten years, and I think
Speaker 10: the risks are that it leads away lower.
Speaker 5: So I'm very so skeptical.
Speaker 10: The key thing I like can say about bitcoin is
Speaker 10: a lot of the easy money has been made. We
Speaker 10: had the GBTC discount that's gone. That's a great scale
Speaker 10: bitcoin trust. We had the ETH discount that's gone, and
Speaker 10: things like micro Strategy have performed so well. I think
Speaker 10: I'm quite skeptical now at these levels.
Speaker 2: Well, when we go back to the fundamental part that
Speaker 2: President Trump was talking about in terms of wants to
Speaker 2: make the US the bitcoin hub and not say China
Speaker 2: or other countries, is that something that the US could actually.
Speaker 5: Do what it already is.
Speaker 10: I mean most of them trade in the US. Most
Speaker 10: likely traded crypto in the planet is tethered the US dollar.
Speaker 10: We did launch the ETFs in this country, but it
Speaker 10: went through that normal US discourse that they don't have
Speaker 10: in China. China and it's been banned, so it already has.
Speaker 5: It's just.
Speaker 10: I think people just have to remember how the system
Speaker 10: in this country works. There is a rule of law,
Speaker 10: we fight it out become the proper conclusion. And that's
Speaker 10: what's happened with bitcoin. We do have ets now, it
Speaker 10: was our bias in very beginning. We launched a Bloomberg
Speaker 10: Galaxy crypto index in twenty eighteen. At some point ETFs
Speaker 10: will track this in next and track broad in disease.
Speaker 5: It's all heading that way.
Speaker 10: I guess mister Trump is trying to say it's going
Speaker 10: to head that way faster. But to me, what he's
Speaker 10: saying is very much just out to get votes, and
Speaker 10: is the questions will he do it? And what can
Speaker 10: he do it?
Speaker 6: Hey, Mike, for as long as I can remember, you've
Speaker 6: been telling us to just shut up and buy gold.
Speaker 6: It just recently hit an all time a nice way.
Speaker 6: It recently hit an all time high. Can you just
Speaker 6: refresh us on why gold continues to go higher?
Speaker 10: Well, the number one reason, I think started with the
Speaker 10: unlimited friendship between President Z and President President Putin, and
Speaker 10: it changed the world dynamic. Now you know, top central
Speaker 10: banks of what are buying. Gold is becoming the second
Speaker 10: reserve acid next to the euro according to the World
Speaker 10: Gold Council, And that to me is an under overwhelming force.
Speaker 10: But what's most significant lately is we have had major
Speaker 10: outflows in ETFs, which likes like they're just starting to
Speaker 10: turn back upwards. So gold to me is the most
Speaker 10: enduring commodity I think is continue to perform. And I
Speaker 10: do like mentioning in the same space as crypto because
Speaker 10: the way I see it, with equities getting very expensive,
Speaker 10: I've been like saying for a while you can't hold
Speaker 10: gold without some bitcoin in that space, the digital version,
Speaker 10: But at some point I think on a risk adjusted basis,
Speaker 10: you're better off overweight in the metal and the analog metal.
Speaker 10: I think that's what's happening now that's starting to get
Speaker 10: a sentiment shift. The way I see it, deflation in
Speaker 10: the commodities is propelling inflation and goals.
Speaker 5: I'll end with this.
Speaker 10: The Bloomberg Commodity Index SPOT indexes right now down on
Speaker 10: the year. It was up twelve percent in May, and
Speaker 10: gold keeps marching along. I think those trends are going
Speaker 10: to continue.
Speaker 2: So to that point, and this also goes to I
Speaker 2: think the crypto move as well. Is there an idea
Speaker 2: that if the FED actually cuts that inflation comes back,
Speaker 2: and then that's another reason why we're seeing say gold
Speaker 2: and a crypto rallying.
Speaker 10: I think that's the potential if they cut too fast.
Speaker 10: But it's the lessons of human nature and history else
Speaker 10: are playing out here. We all know that we created
Speaker 10: too much liquid eating and too much inflation. Now we
Speaker 10: had a good reason. We all thought we're going to
Speaker 10: die four years ago. Now we're at this space now
Speaker 10: that I think the Feds can't cut yet because the
Speaker 10: stock markets strong and such a relevant part of GDP
Speaker 10: two times DDP. It looks like they're going to be
Speaker 10: behind the curve. The way I see gold, though it's
Speaker 10: the most enduring, it's the alternatives to treasuries. I think
Speaker 10: it's the risk off trade where you look at what's
Speaker 10: been the most beat up asset for the last three
Speaker 10: years long bond US treasuries, and I think that trade's
Speaker 10: going to be happening together where gold goes up and
Speaker 10: treasury bond yields decline, and good indication is what's happening
Speaker 10: in China two point why two point that's ten year
Speaker 10: note yield in China right now.
Speaker 5: It's the lowest in our database. It's two thousand and six.
Speaker 6: Mike, I'm going to take you back to your roots,
Speaker 6: back on the great American farm. Boy, I'm looking at
Speaker 6: some of these agricultural things, corn, cotton, soybeans, I mean
Speaker 6: all down, kind of fifteen twenty percent.
Speaker 7: Tough time to be an American farmer.
Speaker 10: So how did you know I was there last week?
Speaker 10: I'm all my family is in the Midwest. I always
Speaker 10: do my crop tours, and I have to admit I
Speaker 10: meet with family and friends and people who farm the land.
Speaker 10: I've never seen a more luscious situation. The crop is huge,
Speaker 10: the weather's been wonderful. Barrel the hurricane. It put us
Speaker 10: loth of rain right in the middle of the corn
Speaker 10: bed right during castling. Core needs it the most in July,
Speaker 10: so supplies mass. And the problem is we still have
Speaker 10: supply left over from last year. So I'll end with this.
Speaker 5: It's the key fact of price. The high priced cure.
Speaker 5: Prices got too high.
Speaker 10: Supplies massive because prices got high, and now we have
Speaker 10: to get to the low price cure, and I don't
Speaker 10: know where that's going to be. And we're going to
Speaker 10: the harvest with oversupplying a good crop, which means lower prices.
Speaker 3: How volatile is the weather for farmers.
Speaker 10: Right Now that's the key thing that's been happening Alex
Speaker 10: is you have more volatile minor events like dur ratio
Speaker 10: and like spot droughts. But what's happening this year is
Speaker 10: we have more moisture than normal in the corn belt.
Speaker 10: I hear that's related to sun spots and things like that,
Speaker 10: and it's actually been a little bit cooler, so it's
Speaker 10: almost perfect for grain production, somewhat of a greenhouse effect.
Speaker 10: But the thing is, I think it's the quote I
Speaker 10: heard in the Midwest. They always say Brazil nineteen years
Speaker 10: in a row of increasing production the soybeans out of Brazil.
Speaker 10: Its just prices are high, and it's a global competitive situation.
Speaker 10: And here's the quote I like not is you know
Speaker 10: the whole thing that Mark Twain. You just say you
Speaker 10: might as well buy land because they don't create it anymore.
Speaker 10: But the farmers in in West say, well, they are
Speaker 10: creating it in Brazil.
Speaker 2: All right, Hey, we appreciate you all the time, Mike,
Speaker 2: thanks a lot, Mike mcglon and Bloomberg Intelligence Senior Commodity Strategies.
Speaker 3: When an't we going to Miami sometime in October?
Speaker 8: Right?
Speaker 7: Potentially?
Speaker 1: Yeah?
Speaker 7: Okay, potentially if you are, we're gonna go knock on
Speaker 7: Mike's door. Yeah, we'll just invite ourselves in.
Speaker 3: Yeah, yep, we're going to be there, So look for us.
Speaker 3: We will keep you posting.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 6: Thirty, Alex Steel, Paul Sweney're live here in our Bloomberg
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Speaker 6: search Bloomberg Podcast, and that's where you'll find its busy
Speaker 6: economic data week This week, I think cap off we
Speaker 6: got jobs at the end of the week, but also
Speaker 6: we got the Fed decision coming up on Wednesday two
Speaker 6: pm will be the decision two thirty press conference all
Speaker 6: Wall Street Time, bloom will be covering it for you.
Speaker 6: Michael McKee taking the Oscella train down the DC and
Speaker 6: he'll be all set to go there.
Speaker 7: What do they do? That's the question here.
Speaker 5: R J.
Speaker 6: Gallow He's a senior portfolio manager for fixed income at
Speaker 6: FEDERATEDT Hermes On Zoom from one of my favorite towns
Speaker 6: in the US, Pittsburgh, Big Fin. I think they punched
Speaker 6: away above their weight and Pittsburgh r JA. Talk to
Speaker 6: us about what you expect to hear from your Federal
Speaker 6: Reserve on Wednesday.
Speaker 11: Good morning, glad to hear you're fond of my hometown.
Speaker 5: Love.
Speaker 11: In terms of the FED, you know, there's no dots.
Speaker 11: There's always a press conference, and there's always a statement.
Speaker 11: I feel like Powell and company have laid the groundwork
Speaker 11: for the further embrace of the idea that the dual
Speaker 11: mandate has returned. For much of the last twelve to
Speaker 11: eighteen months, to FED, it operated almost as if they
Speaker 11: were a single mandate central bank fighting inflation full stop.
Speaker 11: Of course, that's not their case. Their charge is a
Speaker 11: dual mand aid its maximum employment, stable prices, fighting inflation,
Speaker 11: and the maximum employment element of the dual mandate is
Speaker 11: very much back on the table. Now that you've got
Speaker 11: inflation in a range that's tolerable and it appears to
Speaker 11: be likely to continue to decelerate, the FED has laid
Speaker 11: the groundwork to focus on jobs again. The unemployment rate
Speaker 11: is up as a four point one percent, it's up
Speaker 11: a little over four tenths from its lows. That's enough
Speaker 11: to get the Fed to pivot. I think back in
Speaker 11: towards this easing mode. Remember the market outran the Fed
Speaker 11: at the end of last year. We spent all of
Speaker 11: the winter and spring pushing back on the market. You
Speaker 11: had negative total returns for bonds. But since April thirtieth,
Speaker 11: you've gotten more constructive returns to bonds. So the Treasury
Speaker 11: indexes up almost four percent since then, as the inflation
Speaker 11: is cooperated and the FED has reopened the door to easing,
Speaker 11: and I think they're going to address that at this
Speaker 11: coming meeting without actually changing rates.
Speaker 3: So why not just cut now, that's a great question.
Speaker 11: I think that the Fed it all comes down to
Speaker 11: that word confidence, which you've heard them uttering quite a
Speaker 11: bit lately. You know, Recall, wasn't that long ago that
Speaker 11: the FED had high confidence that inflation was going to
Speaker 11: be transitory. That obviously wasn't the case. I think that
Speaker 11: they feel now they would like to see yet more data.
Speaker 11: There's a risk there, of course, if the market expects
Speaker 11: you to cut in September. You're at a meeting, you know,
Speaker 11: this week, and you're anticipating that the data will cooperate
Speaker 11: between now and September. You know, there's a lot of
Speaker 11: uncertainty here that the risk that they're taking is that
Speaker 11: the inflation data will continue to moderate, but the jobs
Speaker 11: data won't fall off some sort of cliff. Probably a
Speaker 11: reasonable risk. The economy seems to have decent momentum. Q
Speaker 11: two GDP data turned out to be stronger than anticipated.
Speaker 11: It's true that the jaws market has lost some of
Speaker 11: its verve, but it's still very much, you know, expanding
Speaker 11: in the sense that jobs keep getting created at a
Speaker 11: pretty reasonable pace. So it's a bet they're willing to take.
Speaker 11: If they were to ease this week, I think that
Speaker 11: would telegraph to markets that the Fed has gotten much
Speaker 11: more concerned about the employment part of their mandate, and
Speaker 11: it might sort of backfire. Bond yields would would probably rally,
Speaker 11: you know, collapse much more rapidly, maybe you know, twenty
Speaker 11: five thirty basis points, because people would be concerned that
Speaker 11: the Fed is anticipating greater economic weakness. In so doing,
Speaker 11: it could actually blow back in the other direction. Keep
Speaker 11: the economy buoyant and then inflation doesn't cooperate. There's not
Speaker 11: a pure science here. There's a lot of judgment, and
Speaker 11: in their judgment, they think waiting is a reasonable risk.
Speaker 6: Are Jay, I'm a big fan of municipal bonds. I
Speaker 6: like to think of myself as one of the larger
Speaker 6: private creditors to the State of New Jersey through my
Speaker 6: municipal bond holdings. What do you think about the community
Speaker 6: market here?
Speaker 11: Well, yeah, the community market. Yeah. If you look back,
Speaker 11: there's very very strong correlations in total returns between munis
Speaker 11: and treasuries. If you look at monthly total returns for
Speaker 11: twenty five years, the correlation of returns is around sixty percent.
Speaker 11: It's not one hundred, but it's still high. So interest
Speaker 11: rates are the driving theme that linked the muni market
Speaker 11: to the tax will market. That is very clear. Beyond that,
Speaker 11: you worry a lot about muni specific dynamics, for example,
Speaker 11: expected changes in tax rates or changes in the supply
Speaker 11: of munis coming into the marketplace. This year's supply has
Speaker 11: been heavy, but demand has been buoyant, and muni ratios
Speaker 11: have remained relatively rich, sort of below long term averages.
Speaker 11: Why is that? I think there's some concern that tax
Speaker 11: rates might be rising as we move forward down the
Speaker 11: calendar here. You know, the Trump tax cuts basically sunset
Speaker 11: with respective personal income tax rates. Investors are I think
Speaker 11: motivated to lock in some still relatively high muni yields,
Speaker 11: in part because the interest rate cycle has pushed yields up,
Speaker 11: and in part because they think taxes might be going
Speaker 11: up in the future. If Trump gets re elected, he'll
Speaker 11: probably try to extend all those personal tax rates, and
Speaker 11: UNI returns might actually sort of be a little vulnerable.
Speaker 11: Even if interest rates are coming down, unis might not
Speaker 11: keep up and rally quite as hard. In short, we
Speaker 11: think muni's are still a pretty safe place to be
Speaker 11: from credit standpoint. The rates scenario is probably getting more constructive.
Speaker 11: The tax policy scenario and the related supply dynamic have
Speaker 11: been the greater questions, but those are sort of tolerable
Speaker 11: risks in the near term. I think muni's are a
Speaker 11: pretty good place to be for you and for many others.
Speaker 2: Okay, yeah, so you love muni's, but then you take
Speaker 2: every Friday off and then I'm at the muni segment,
Speaker 2: I know, and I'm literally prepping all week to make
Speaker 2: it through. My Muni segment are talking about the curve.
Speaker 2: Do we get that steepener? Finally, what does this deepener
Speaker 2: look like? Is it going to because buying in the
Speaker 2: front end or a selloff in the long end? And
Speaker 2: what does all that wind up?
Speaker 11: Meaning great questions on the month. So in July is
Speaker 11: almost over right. So the twos tens and the five
Speaker 11: thirties treasuries curves steep in fifteen and seventeen basis points,
Speaker 11: and the two thirty, you know, a very long curve
Speaker 11: has steepened twenty three basis points. The steepener is working
Speaker 11: at federating hermes. We sort of look at the top
Speaker 11: down drivers of fixing income portfolios, duration, curve, credit, and
Speaker 11: we assemble some of our top people in what we
Speaker 11: call alpha pods or investment committees. Our curve committee has
Speaker 11: been very successful positioning for the steepening that has occurred.
Speaker 11: We think there's still more to come. The steepening typically
Speaker 11: is resulting from a couple of things. One, even though
Speaker 11: inflation has come down, which would make you feel like
Speaker 11: the curve shuld flatten, the curve has been inverted for
Speaker 11: so long that the fact that the Fed has opened
Speaker 11: the door to easing, as we were talking about a
Speaker 11: few moments ago. That has helped the curve to steepen
Speaker 11: back out. The curve that steep in so long as
Speaker 11: the FED continues in that easing direction Number one, number two,
Speaker 11: so long as the economy doesn't sort of stumble rapidly
Speaker 11: or inflation researches. So we think that the old curve
Speaker 11: is working for us. We still like the bet. In
Speaker 11: the Muni space, the curve has been strangely U shaped,
Speaker 11: heavily driven by expectations for a softer FED, and as
Speaker 11: the Fed's moved in that direction, the U is hollowing out.
Speaker 11: It hasn't fully become an upper sloping curve just yet,
Speaker 11: but the same dynamic that manifested in treasuries is now
Speaker 11: working in terms of sort of making a more reasonable
Speaker 11: shape for the Muni curve as well.
Speaker 7: How much credit risk are you guys willing to take
Speaker 7: these days?
Speaker 11: So the Munich credit scenario has been very favorable. The
Speaker 11: long economic expansion post pandemic, which has outpaced most people's
Speaker 11: expectations in terms of job creation and in terms of
Speaker 11: outright GDP growth, that has you know, that's a rising
Speaker 11: tide that lifts all muni boats. State governments are doing well.
Speaker 11: You mentioned the state of New Jersey. They've been upgraded
Speaker 11: into the single A range. You even had the state
Speaker 11: of Illinois, which at one point a number of years
Speaker 11: ago we were debating whether they should be a junk bond.
Speaker 11: They've been upgraded into the single A range we've had.
Speaker 11: I don't know if it's been a golden era, but
Speaker 11: it's been a strong period for uni credit, both at
Speaker 11: the state level and the local level. The local levels
Speaker 11: benefited sharply from rising property valuations. We all worry about
Speaker 11: commercial real estate, specifically offices, but when you consider that
Speaker 11: residential real estate has surged, and many municipalities in this
Speaker 11: country have more residential than office in their tax base.
Speaker 11: Generally speaking, local governments are also doing relatively well in
Speaker 11: a world like that. So long as we anticipate the
Speaker 11: economy still growing and the Feds moving towards an ease,
Speaker 11: we're still happy to take mid and low quality credit
Speaker 11: risk in our muni portfolios. So we've been overweight a's
Speaker 11: and overweight in the high yield space, and it's work
Speaker 11: that's been the best performing part of the meuning market.
Speaker 11: On a year to day basis. By far, going forward
Speaker 11: spreads are a little tighter. It's probably a little less compelling,
Speaker 11: but we still like the carry idea. And so long
Speaker 11: as the fed's easy and the economy is not tanking,
Speaker 11: taking some credit risk, communis is probably the right place
Speaker 11: to be.
Speaker 3: Really appreciate you.
Speaker 2: Thank you very much.
Speaker 5: Our J.
Speaker 2: Gallow, Senior portfolio manager, Great Insight There fixed Income over
Speaker 2: at federid Hermes.
Speaker 3: Joining us, you're listening to.
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Speaker 1: play Bloomberg eleven thirty.
Speaker 2: Let's get back to the markets. Nor was just talking
Speaker 2: about this, but a hein again. Those shares are down
Speaker 2: almost ten percent over in. Europe's taking about a nine
Speaker 2: hundred and forty nine million dollar hit from China, giving
Speaker 2: a cautious outlook, and it wasn't just China, it's also
Speaker 2: US and Europe as well. So we want to get
Speaker 2: more on that and head to our Bloomberg Intelligence folks.
Speaker 2: A Duncan Fox's Bloomberg Intelligence consumer staples analyst is joining us.
Speaker 2: Hey duncan, what can you run us through the laundry?
Speaker 2: List of the things that were a problem for Heinegan
Speaker 2: this quarter.
Speaker 12: Well, I suppose the main one was consumer sentiment was
Speaker 12: still quite weak. So what they were hoping for was
Speaker 12: a bit of a bounce back in Europe for volume
Speaker 12: with the Europe twenty twenty four, but unfortunately the weather
Speaker 12: was just again or in northern Europe, so that was
Speaker 12: a hit.
Speaker 8: In China, it's just that China Resources.
Speaker 12: Be a share price has been below the price they
Speaker 12: bought it for about four or five months now, and
Speaker 12: the accounting system means they have to take that hit.
Speaker 12: So if if that share price goes back up again
Speaker 12: whenever the Chinese economy recovers, then they'll get some sort
Speaker 12: of recovery from that, but I can't tell you when
Speaker 12: that will be. So it's just double consumer.
Speaker 6: So what is Heineken saying about just underlying demand in general?
Speaker 6: What are they saying about the consumer and is there
Speaker 6: regional differences?
Speaker 13: I guess basically the consumer's been hit by inflation class
Speaker 13: years from double digit pricing, and I think they're just
Speaker 13: pairing back the big problem is that people are not
Speaker 13: really going to the as much the entrade.
Speaker 12: That's where they make great profit. Well in Europe, it's
Speaker 12: certainly been the case in places like Africa where you've
Speaker 12: had devaluation as well. You've just got a working way
Speaker 12: through that and they've done a very good job actually,
Speaker 12: but you still have the short term issue where you know,
Speaker 12: Nigeria is a big market for them when you get
Speaker 12: a massive devaluation. So they're just working their way through
Speaker 12: all these issues. They're doing actually gote a good job
Speaker 12: on the ground, but weather was the real thing that
Speaker 12: was a surprise. I mean the upgraded guidance a little,
Speaker 12: but I think people are expecting a bit more because
Speaker 12: of the Euro twenty four.
Speaker 2: So Paul brought up sort of those mixed infused cocktails
Speaker 2: and stuff. I can get the mimosa in a can.
Speaker 2: It's not terrible at all. Does Heinekin have exposure to
Speaker 2: that kind of stuff and is that sort of eroding
Speaker 2: the appeal of beer at all?
Speaker 8: Well?
Speaker 12: Beers getting it from each from every angle really, because
Speaker 12: you're seeing a lot of these new on to drinks.
Speaker 8: I probably grew with poorn that once. Some of them
Speaker 8: are a bit weird.
Speaker 12: But they've got Desperado, which is a spirit based beer,
Speaker 12: tequila based beer, which is doing very well.
Speaker 8: So they have got.
Speaker 12: Things that they can attack these products with. But you
Speaker 12: need to keep basically innovating with new things all the time.
Speaker 12: You know, Diazu're doing a pretty good job on trying
Speaker 12: to do that. But the problem is some of these
Speaker 12: don't last very long the eighteen months and then things
Speaker 12: sort of fall off a cliff, so you've got to
Speaker 12: sort of keep replacing.
Speaker 8: Them otherwise you're getting bit of trouble.
Speaker 12: Actually, the Hearnickeer one's doing well, but they just haven't
Speaker 12: come up with innovation in that area.
Speaker 8: It's probably not their key area of porn.
Speaker 7: Hey, Duncan, If I were to go later on today
Speaker 7: to sand Banks Beach in Dorset, which is in the
Speaker 7: southwest of England, is it a beach day today? Am
Speaker 7: I going to get? What's it like out there? Sand Bank?
Speaker 8: It's beautiful.
Speaker 12: It's absolutely beautiful here today. I'm a about forty mile
Speaker 12: away from it, but it fucker get there.
Speaker 8: I would.
Speaker 12: I'll go to a different beach this evening and it's beautiful,
Speaker 12: about twenty four degrees, very sunny, lovely, perfect day for a.
Speaker 7: Bit, perfect day for a beers. That's a kind of segue.
Speaker 6: So let's go to that Doug and is are there
Speaker 6: is Heinken calling out different regions of the world behaving differently,
Speaker 6: as the US market stronger than the European.
Speaker 3: If you have a nice beach, your sales are up exactly.
Speaker 12: Well, certainly it's the suns out. It's they're not that
Speaker 12: big in the US.
Speaker 8: Latin America they're big, and they they've been.
Speaker 12: They've taken quite a lot of costs out. They were
Speaker 12: importing bottles to Brazil.
Speaker 8: For instance, which is a huge market for them, so
Speaker 8: they've taken the cost down.
Speaker 12: So it's not particularly great consumer environment there, but the
Speaker 12: profits are improving because you.
Speaker 8: Know, they've realigned their cost base.
Speaker 12: In Asia, they're bouncing back from a really horrid time last.
Speaker 8: Year where the economy is. Vietnam in particular.
Speaker 12: Had a terrible time in sort of Q two and
Speaker 12: Q three last year, so that's bounced back.
Speaker 8: I wouldn't say the beer market because of regulation.
Speaker 12: Is buoyant, but they're gaining share and they've they've done
Speaker 12: innovation on the beer beer market there that seems to
Speaker 12: be working.
Speaker 8: Very well.
Speaker 12: So there are a few issues in Asia that they
Speaker 12: still got to overcome. You know, China some quite a
Speaker 12: chunky bit of their market now, so they need to
Speaker 12: see that economy improved. Places like Cambodia have got a
Speaker 12: bit of an issue in the short term because of
Speaker 12: the economic growth. So just a case of good old
Speaker 12: policies from governments turning the economies around. I'm sure we
Speaker 12: get a bit.
Speaker 8: Happier with what with life, and people then go out
Speaker 8: and buy beer.
Speaker 2: We were also just talking to our Bloomberg Equities reporter
Speaker 2: at normal Inda about Constellation brands that's not getting dragged
Speaker 2: down by Heinegen.
Speaker 3: Is that a fair assessment?
Speaker 2: Like, is Heinegan a warning sign to all the alcoholic
Speaker 2: company alcoholic at the alcohol producing companies or is a
Speaker 2: lot of this just a Heinegan specific issue.
Speaker 12: I think it shares it's a difficult type of beer
Speaker 12: company in particular. I mean, there was a hope that
Speaker 12: the summer of sport would give them my sillip, but
Speaker 12: if the weather's bad, you just can't get that volumear.
Speaker 12: People have to go out and buy the beer prefly
Speaker 12: the premium beers, So you know that's going to hit
Speaker 12: from maybe a bi consulation a little bit. But they're
Speaker 12: in different, completely different markets.
Speaker 8: I don't know.
Speaker 12: I don't cover consolation, but I think, yeah, they're doing
Speaker 12: very very well in the US. They can clear off
Speaker 12: ABI after last year's marketing errors.
Speaker 8: And it does seem that premium beer is doing quite well.
Speaker 12: I mean can add nine percent volume growth to the
Speaker 12: half there for the highly Can brand, which shows it
Speaker 12: about a twenty five percent premium to mainstream beer. So
Speaker 12: there are pockets in there that are doing well. If
Speaker 12: you've got good premium brands, you can do well spirits.
Speaker 8: We get the main.
Speaker 12: Results tomorrow, so it could be it would be interesting,
Speaker 12: we know as in a sort of inventory issues there
Speaker 12: that need to be sort of ticked off before you'll
Speaker 12: see your recovery. If the camp is saying that, then
Speaker 12: we could you could shift out of beer maybe back
Speaker 12: into spirits in the short term.
Speaker 7: All right, Duncan, thanks very much, appreciate it.
Speaker 6: Duncan, Fox Consumer Staples, Alice Bloomberg Intelligence zooming in from
Speaker 6: Lovely Dorset on the southwest coast of England. Something thinking
Speaker 6: about it heading out to the beach there, all right,
Speaker 6: twenty four This is a convert this. I convert celsius
Speaker 6: in it, take it, I double it in AD thirty
Speaker 6: and that gets me pretty dark close.
Speaker 7: So twenty four degree celsius forty eight plus thirty seventy eight.
Speaker 7: That's a nice day. Okay, that's about as good as
Speaker 7: it gets in England.
Speaker 3: I like that double it AD thirty yep.
Speaker 2: Okay, I'm gonna use that because sometimes you know, I
Speaker 2: just kind of guesstimate it. You don't know if it's
Speaker 2: true anyway.
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