AppHarvest Is Building Hi-Tech Indoor Farms For The Future

and on Bloomberg dot com. Well, as we all become a little bit more aware of our surroundings and you know, kenniness and everything really in association with the pandemic, it is a good time to talk to Jonathan Webb, who's founder and CEO of app Harvest is based in Lexington, Kentucky, but it's basically an eye tech company building the world's largest indoor farms, which of course you know we'll have sustainable fresh fruits and vegetables year round with no chemical

pesticides and one rainwater. So Jonathan very very excited to speak with you today. First of all, give us a little bit more of an idea of app harvests clientele and also how many farms you have now up and down Applelacha. All right, well, thank you for having me. Uh So, app Harvest is set out to build some of the world's largest controlled environment agriculture facilities, and we're doing it here in central Appalachia where we can get to about sev of the US in a one day drive.

Right now, we just launched our first flagship farm, which which is nearly two point eight million square feet under glass. To put that in perspective, it's nearly twice as large as his Amazon's largest distribution center, So so very large and scale. Uh. And we're focused on growing fruits and vegetables. Uh. And and our first product is tomatoes, which tomatoes right now are the number one produce import from Mexico nearly

four billion pounds last year. So we're we're happy to be on store shelves as of last week, and we're selling to some of the top twenty five grocers here in the US. What had more of an impact on your business Donald Trump being president or the pandemic? Uh? Well, we we've had great relationships on both sides of the aisle. UH. With the new administration coming in and obviously having a

focus on E s G. That's something that's quartered. Our business will will be a public benefit corporation traded on the Nasdaq or b Corp. So so obviously E. S G is quarta to who we are. But but then there's the conversation on food security and resiliency in the US. And it doesn't matter what side of the aisle you're on. UH. It doesn't make sense to truck a fruit and vegetable two weeks, two thousand miles UH imported from another country and get to the east coast, to midwest and southeast.

So we have a long way to go here in the US of rebuilding agriculture UH and creating systems that that are resilient for for our future. UH. With climate disruption and demands for food. UH. You you look at the U n who came and visited us recently, the UN Security Council, and they predict it the world needs fifty to seventy more food by we all have to work together to to build a much stronger resilient food system. We have to utilize technology and infrastructure to do that.

And for us, we don't really think it's the left or right conversation. It's it's really both sides of the aisle need to be at the table. Sure, it is probably a price conversation, though, right, how much more does it cost to buy, you know, produce from your farms. I presume it has to cost more. No, that's a great question. I mean, our job and my job here is to make sure we're not raising prices for for

the everyday American. Uh. You know, I grew up in Kentucky in the middle part of the country, and and I can tell you you know, you look at most mothers and fathers across the US that that are going to the grocery store. They're just worried about putting food on the table. And we definitely cannot raise their prices. And we can do that through scale and through our efficiencies of how we're operating. We run completely on recycled rainwater.

We have no water cost, and if you look at a fruit and vegetable, nine of a fruit and vegetable as water were in a water rich region, we're aver collect that rain water. We also know the distribution where we can get to major markets in a one day drive. That reduces our trucking by a week in two weeks also cost savings. So there's a multitude of factors as

to how we're able to back into our price. But but at the end of the day, we we absolutely or are are committed to selling a fruit and vegetable adder around the same price and what consumers already see at the grocery store. But you know, Jonathan, we hear from farmers all the time how very, very difficult it is to actually, you know, make some profit in this world,

and that it's it's just it's just so hard. And you know, you have to make sure you pick your crops right for the year, you have to make sure that you avail yourself of all the subsidies that are available to farmers and so on. And it's still hard to just even make a living for a single farmer. How are you guys managing to do it for you know, a multitude of farms. Well, it's it's where we're we have to use technology and we have to build farms

for the future. And you know, you look at the last great technological revolution that hit American farming, it was the tractor. And we really have not seen a significant uh you know, piece of technology hit American farming since the tractor. Uh. And and now you know the way we operate our farm where we're using industrial sensors and software can operate the farm on an iPhone and iPad.

We're controlling the environment to optimize for the plant. Uh And we have to use technology and there's an upfront cost to that, but then we're able to recoup that cost over time. And as far as you you talk about farmers having to fight against the climate that's changing, you know, we don't have to worry about that. We grow indoors. We control our climate. Uh And And what my background was in solar, I was a part of

building some of the largest solar in the US. And we've tried to say this is the third wave of sustainable infrastructure. You know, account wait to go under tour one of these farms at some point because they really do sound fascinating and hopefully the technology will take off and and other people who are able to take advantage of it as well. Jonathan, thank you so much. We

will stay in touch. Jonathan Webb is founder and CEO of agh Tech Company, A harvest some of the largest indoor farms in the world in Appala jam Looking at the U s dollar here, the d x Y index sitting just above at ninety and that's the lowest level it's been since back in two thousand eighteen. And it's not about twelve twelve and a half percent from the pre pandemic highs Our next guest think that the dollar

can stay lower for longer. We are pleased to welcome Stephen Roach, senior fellow at Yale University and former chairman of Morgan Stanley Asia. Discussed his column here. The weaker dollar trend is only just beginning. Stephen. Thanks much for joining us here. What is your call on the dollar and what's driving it well? Last June I wrote an opinion piece on Bloomberg that argued the dollar could drop as much as thirty five percent by the end of and I cited three factors that led me to that

seemingly outrageous conclusion. One sharp widening of the balance of payments of the current account deficit to the there was a myth behind the notion that there is no alternative to the dollar or the so called Tina defense. And Thirdly, I stress that I thought the Federal Reserve would do nothing to defend a weaker currency, as central banks normally do, they tighten monetary policy to stave off weaker currency, and this FED is not going to tighten for any currency

related reasons. So you know, I uh came up with this thirty five UH call, and you know, we're about a third of the way there, and so there's more to come, if I'm going to be right, Yeah, I mean, the Fed may not do anything. Is there anything that Janet Yellen might do directly or indirectly? As Treasury Secretary Stephen Well, like, I have huge respect for Janet Yelling.

She's got a lot or plate Bunny, and um, I think you know, you'll you'll start to hear echoes of Bob Reuben in the Janet Yellen where she just simply says that, you know, the US is always in favor

of a strong dollar. But no, there won't be anything other than the sort of rhetorical uh statements rather than any concrete action to stave off this weakness, because Stephen, it appears, you know, if we do listen to Fed Chairman pal Um some seemingly, you know, obviously some very strong commentary since the beginning of this pandemic about the interest rate environment and his outlook lower for longer, talking about you know it in years not quarters. Do you

expect that stance to stay? Yeah, I do. I think, you know, if anything, it's it's a more stronger stance for sustained monetary accommodation than it was when I first I thought the dollar would fall six months ago. The feed as you know, has adopted this new framework of average inflation targeting, which means it's going to forgive any short term overshoots a relative to their price to stability metrics, so you know, if anything, they're going to stay easier

for longer. And when countries have big current account deficits, they can do one or two things or both. They can allow the Monterrey policy, the titan or uh, you know, let let the currency go and with with the fed um sort of giving up on the monetary policy, and all the currency will will absorb the bulk of the adjustment. So Stephen, when you say weakness, it's obviously weakness versus you know, other assets, other currencies. Will it be primarily

you know, the Chinese? You on, Will it be the euro, British pound? Where will we see the weakness? Most obviously I think it will be pretty broadly based. Vanny, I think you'll see it again the reven b, which has been strengthening steadily and looks like it's going to be going up a good deal further this year, but you'll also see it against the Euro that you know, the Euro has I think right now, I would say is

probably the most undervalued major currency in the world. It's um. Uh. You know, it's down still on a broad trade weighted basis about four percent from its UM March two thousand and fourteen posted UM crisis high. And uh. You know, I've been a euroskeptic basically all my life, largely because while while the Eurozone has a single currency in a single central bank, it's never had a unified fiscal policy,

and that now seems to be changing. Uh. There was a deal cut in July of last year, the so called next generation UH EU fund UH complete with European bond issuing authority, that I think is a you know, a potential game changer in terms of European fiscal policy. So I think, you know, Europe will get through this pandemic which they're suffering mightily from again right now, and I think there's a a compelling case of the upside for what is probably the most undervalued major currency in

the world. Stephen, I'd love to call on your experience as chair of Morgan Stanley Asia. We now have a new administration in the White House, how do you think our policy should evolve with China over the coming years given what we've experienced over the last four Well, look, you know, anything that's better than what we've been through over the past four years. I'm hopeful that there will be a measured, careful reassessment of all of the actions

that were taken during the Trump administration. I think, UM,

I look for the Biden administration to do that. Nothing immediate, no major breakthrough, but I'm hopeful that UH we can once again initiate a more constructive exchange on big issues we have in common like UM, global health policy and climate change UH, and then began to develop a more I think sustainable framework of engagement on some of these tough structural issues that were put on the table by the Trump administration UH several years ago, in terms of

innovation policy, intellectual property rights protection, force technology transfer, UH, cybersecurity subsidies to stay on enterprises. These are really important issues, and I give the Trump administration credit for raising them, but they provided nothing in the way of resolving them.

The so called Phase one trade deal did nothing on these issues that should be immediately I would I would hope abandoned, and I think there's a much better framework to engage on the structural issues that I would hope that Biden administration could begin to roll out. Stephen would love to talk about China for a lot longer, but unfortunately your time is up. But Duke and back again soon. We really need to sort of focus on China and

exactly what's been going on over there. You know, I think the pandemic is as much as we've talked about China over the last year, I think the pandemic has has made us focus a little bit more on the United States in the last little while. So thank you to Stephen Roach, of course, who was a huge, huge history with China and Asia. More broadly, he's senior fellow at Yale University, former chairman of Morgan Stanley Asia, and do have a read of his column. The weaker dollar

trend is only just beginning. The British pound is just a little bit stronger today. We're keeping an eye, of course, on earnings. About two thirds of the SMB five hundred companies are reporting this week. And I also want to point out that Leon black out at Apollo this after he got caught paying for Jeffrey Epstein to the tune of one fifty eight million dollars. The private equity Titan was willing to overlook, apparently that Epstein had served thirteen

months in a Florida jail. But it all came to a head over the weekend and after meetings between the three owners, Black is out and there is a new person in his place. And that is your latest Spoomberg business flash. Let's get now to some of those earnings this week. Karen nub Hard to senior industrial as analysts for Bloomberg Intelligence, obviously covering the likes of GE and three M Karen, what are we looking for this week? Uh?

You know, um, we're gonna certainly see sequential improvement, but everybody's going to really be looking to companies have not been giving guidance for most of twenty Um. I think a lot of them will give us some guidance on because things have stabilized and are going up in the right direction. And today's story was GE on the cash flow side. That's that's really why that's up so much.

But you know, it looks like things are stabilizing and we're gonna see um, you know, um improvement ahead better in the second half, but people really want to get comfortable that twenty one is going to be a decent year. Now, where is the demand coming from, Karen, Because you know, we're seeing some data really holding up in terms of the consumer today with consumer confidence and so on, and now it looks like some of these big industrials are

also seeing demand. Is a domestic demand, Uh, it's well not China's China's up a lot. Um you know, US is coming back. I mean it's mixed, it's really by it's really by end market. Like the UM three m

was talking about home improvement and personal safety. You know, they make the respirators, data centers, things like that, but they're in a big pop and auto production just because you know, it had been much slower earlier in the year, and um g E really it was healthcare and stabilization some of their other businesses, but like power, but that's

really an internal story. Aviation was bad, but not as bad as expected, you know, so so you know, um it's it's really you know, um home improvement, some spots and healthcare, anything related to safety. You know, Honeywell is going to talk about personal safety too. That's going to be better than expected. Um, you know because of COVID. So you know, I wouldn't say we're back home, but

we're certainly directionally, we're going on the right way. Yeah, these companies pivoting just a little bit, now, will they? And have they spoken about supply chains and how they have forceful supply chains to to get a little bit more um, you know, lubricated in some ways so that you know, the likes of Ppe and some of this healthcare equipment can get produced faster and get to the

places necessary. Yeah, that's gotten much much better. I mean three Mum had a uh you know how the squadrupled production and they got to their two billion in in in respirators um for twenty and they were you know, a quarter of that earlier in the year, and there wasn't really supply issues. Um, I'd say the same thing, um in honeywell and some of the other so that that supply chain really isn't coming up that much anymore. Interesting, So animalst aren't even asking about it. It's just solved.

A lot of people, a lot of around the world, a lot of places are back to work. They've learned how to manage a round of the virus. Now we always have a new administration, wouldn't have been for the last quarter, but it would be for the next quarter. So are any of these companies making decisions based on the fact that we now have a Biden administration in terms of you know, foreign policy and how their international outlook might be. Well, it's certainly um with you know,

trade barriers probably getting a little bit better. Um, you know, working on our global relationships. I think that's in you know, incrementally will be better. I don't think anybody's going to make major strategic changes, um. I would say, um, there is. There may be some internal opportunities life like infrastructure, you know, because we have some big spending plans and it's quite broad based. It's not just let's let's fix the roads. Um. So,

they'll they'll probably be um some domestic opportunity. UM So I think people are hopeful, but not making major shifts yet, but certainly hopeful. You know when you say you know domestic opportunity. We're obviously gonna build America back. I mean, how how much are these companies lobbying to get a place in that choir and how much are they sort of looking to divert some of their resources to projects

that might come down the pike. Well, you know, I think I think it's going to be a very broad based program as you know, like there will be a traditional infrastructure, but there's also talk of a big focus on climate UM, you know, which will be a big thing, energy, energy savings, etcetera. There's UM their talk of investment in

data infrastructure for UM, rural areas, etcetera. So UM, there's a lot of opportunity for these companies if we get the spending and with UM the Democrats having the majority and the White House, some things might be able to happen on on that front. So you know, g E obviously is soaring today, but if you take a look at your over year, we're still down one percent, so it has a ways to go. How much more can

Larry cult do to revive the giant UM? You know, I think there's UM a lot of room to go still on the power side, which was where their big problems were. But you're starting to see stabilization and now they've had a couple of quarters where they've made money, so there's still a lot of room to go on

that front. UM, there's a room to go and renewables and now and then the other thing, the biggest thing that the biggest swing that they can do on the on the business side is you know, get a little help from aviation and they're expecting some improvement in the second half. That's where they made two thirds of their money and then COVID it just collapsed. But that's going

to be better in twenty one. But you know, if they got lucky on that side, they could really beat But right now it's you know, they say, and they're right. They're fixing the things they can fix, and they've been in a two year program to turn power around and renewables around, and you're starting to see that some of the benefits able that cloth cutting and then aviation. Did you know, it's terrible, but they did, you know, as well as they could do, given that demand is down

thirty this year. Yeah, exactly. I mean, what will they do with aviation? Is everything on polls right now? And can it be free of cost if you like, you know, while while all of these aviation units are waiting to

move back into regular gear. Yeah, they've taken a billion, a little million more than a billion out of costs in the aviation business though they've they've been able to sort of stabilize um, the collapse and then you know, as people get back to back to travel even incrementally, that might help the parts business and frankly that's where

they make their money. And then um, the Max seven three seven is is being produced again, not nearly at the levels that they had hoped, but certainly UP is better than down, right, So um, that's going to help them as well on the aviation O east side. Um, but they really need people to travel again, and uh, that should get better as the year goes on. All right, Karen,

thank you. Up is definitely better than down for most stakeholders, from employees to management to shareholders and the general public as well. So thank you so much for all of your intelligence. Karen Atlhardt is senior Industrial analyst for Bloomberg Intelligence, and keep an eye out for more intelligence from her

on other industrials that haven't reported just yet. All right, it's time bringing our cross Asset reporter is Sarah Ponzac, who's keeping an eye on everything that's going on across the markets. And it doesn't seem that there's all that much going on, at least overall in the equity markets today, Sarah, where is the action right? Everything that's going on today,

It's a pretty quiet day as of this morning. If you do break it down, though, you do see some larger moves at the more micro single stock level, and Microsoft will point out Microsoft reporting earnings after the bell today. If you look at Microsoft today higher by one point three percent at the moment, that's higher for a sick straight yea. So we have a bit of a winning street going on. And Microsoft deposited at a record high the last time I checked on my screen, just ahead

of earning season. So we're seeing this phenomenon where ahead of big act reports, this is the busiest week for earnings in According to Bluebird Intelligence, we have about one companies that are going to come out and report. That amounts to about thirty six percent of SMP five market. Granted, that's because many of these large companies are reporting Microsoft today.

Tomorrow we'll hear from the likes of Apples, Test Left, Facebook, for example, and those three companies alone represent over a tenth of the SMP five hundred. But into this we have seen Big Text all of a sudden start to take the lead once again. And to give you a sense, you look at last week. For example, last week we thought SMP five hundred growth beat value by the most

two thousand and eight. So we had seen this rotation away from big tech for quite a while really ever since we've got their rotation in late summer and the months of August September, for example. But now we are seeing these companies really come back and start to hit recordized. Just the head of earning repoard alright, sir, so you're talking about big tech companies, blue chip companies, but you wrote an article recently at about blue Sphere Corporation. What's

blue Sphere? Why should we care? Right? So, blue Sphere Corporation is representative of what's been going on really for the past months, month and a half or so. In a blue Sphere is a penny stock company. Uh, just last week before last week, it didn't even trade for a penny, traded for a fraction of a penny. And lately we have seen a boom in penny stock trading. In the month of December. If you look at over the counter stocks, the volume that we saw, we saw

more than one trillion shares trade. That was the first time in a decade or so, all of a sudden, we see massive volume in these penny stocks and just pops here and there. Some say it's just another frost marker, for example, just added onto the list of what we've been seen seeing with game Stop lately. But Blue Sphere last week, it was the start of the week we saw it just popped more than four hundred, almost out

of the blue. It came out of nowhere. But what I did was I went back and I really dug into some of the chat rooms where you see folks talking about this stuff, for example on stock twits, on Reddit, on discords that are really dedicated to Reddit users, for example. And what was really fascinating to watch was just that over the weekend, before we saw that four percent pop, you just saw conversation really really start to heat up

about the stock seemingly out of nowhere. Now those on on the sites will say it's a green energy stock, they turn waste into energy. It's because of the Biden policies that we're going to see the stock going to the moon in their terms. But it's just fascinating because as an example of one of many, these are typically the types of conversations and the bills that you see ahead of the time. A penny stock really just goes viral. He's a possible to tell an advance which ones will

and which ones won't. I imagine that there were other conversations taking place as well where the stock didn't pop for afterwards. Yeah, certainly, And conversation on Blue Speer, for example, had been heating up for a while. It really started

the week before. There were a few comments here and there, but then over the weekend you just hit critical maps and you saw on stock to was for example, you can see the amount of people who follow a stock that kept going up by the thousands of thousands and and by the night of even and some of the members who are more so vocal were joking around the night of saying that they couldn't sleep, asking others that they were still awake because they were anxious of what

was going to happen. When financial marketcempting is pretty pretty remarkable. Um. But yeah, certainly there are those who really try to hype up a stock, up a stock and it might not work. And the way I went about doing this was I actually I found Blue Spear on the day that a popform by by looking up and ranking stocks by volume, and volume on this company was over two billion shares, which was a record, and really that had never happened before for this company. It came out of nowhere.

This says an off exchange stock hasn't reported financial disclosures and years um. So that's where I got star to them. Then I walked backwards from there, and what you uncover is is quite amazing. Blue Sphere trading a little bit over two cents per share, up about two today million shares traded. Year to date, the stock is up almost

thirty nine hundred percent. So so as she talks to strategies and so on, I mean, should we be concerned about some of these types of speculative moves in the marketing, including like a game stop right. So, so, typically what we hear from professional investors that this is another signal that there is exuberance in the market, and it asserts itself in different ways. You see it in the penny stock boom, You see it in the likes of game

stock and BlackBerry and AMC these days. You see it in in the back boom and I t o pop that there's many ways that this exuberance really asserts itself in market. But we've now been hearing for months that this is something people need to worry about, this is something people should be concerned about, and yet the broader

market has continued to move higher and act just fine. Um. So it just goes to show that even if you do believe that we're in a bubble, it's really really hard to time when these things might come to an edge. Eleven employees, it has extraordinary story. Sarah Panzac, thank you so much for joining us cross set reporter looking at BlackBerry. Here a name from my past stocks trading at eighteen

just under nineteen dollars to share. Vonnie was trading as low as four or five dollars just recently, so go figure. Thanks for listening to the Boomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio