China, Equities, ETFs, and Commodities (Podcast)

Bloomberg termoil right Now. Protests against china strict COVID measures failed to materialize on Monday as a Chinese authorities deployed a heavy police presence in the capital on other major cities to deter a repeat of the weekend's demonstrations. When we saw that news over the weekend, I said, we need to check in with Leland Miller. He's our go to voice and all things China. He's the CEO of China bag Book International. Leland, We I'd love to get

your perspective given your experience in China. What did we really see over the weekend with some of these demonstrations. What are the takeaways? Well, clearly frustration is boiling over. You know, the Chinese people have to deal with a very draconian zero COVID policy for UH for months and months and months and months and months and months now, and it is crushed economic activity, it's crushed travel, it's

it's torn families apart. UH. And so I think that there is a desire right now to send a message that this needs to end. UH. And I think a lot of the protests UM, we're about a frustration with the leadership for not providing a roadmap out of this UH. You know, winter is COVID spreading season. Things were never going to be opened up over the winter and there and then they're still not going to be UH for

the most part. But I think that the idea that people still don't have a date on the horizon, they don't have an idea of when when their misery is going to end. I think that this, this this caused things to really boil over. In addition, of course to the fact that you've you've seen some very grizzly events recently, like people trapped in their houses and and uh ire is consuming them. So so this is this has really

gotten to a point where where people had enough. Now I'm not sure from from what we understand here in the West, it's incredibly dangerous to protest in China. Right, My idea is that if you go out there, you're literally risking your life. Um, is that really the case?

Do people in China understand that? Because that raises really the bar for you know what, I'm willing to go out of my house and protests against Yeah, protests in China aren't uncommon, but what is very uncommon is to see protests uh surging in multiple cities at the same time about the same thing. Uh. This is sort of this is you know, not just about dissatisfaction with the local issue or a bank that people think might be insolving.

This is about a fundamental policy that the central government has uh that that that that there's no tolerance for anymore.

So the you know, protesting can happen, but this clearly was sending a signal that it could become something much bigger, which is why the authorities have moved in to try to stop it from from from boiling out of control in the short term, Leland, Does the Chinese government not understand Did the Chinese people not understand that they can't get to some level of herd immunity without massive vaccinations. That's what the rest of the world has learned. How

has it spun within China? Well, the the way the Beijing has handled this over the past year or so, past two years or so has has been quite puzzling.

You know. The for for the first two years and one, there were you know, there was there was there were tight restrictions on on COVID, but nothing like what we've seen in There was plenty of time for the leadership to have started a vaccine rollout, to imported mr and A vaccines, to do a lot of the things that China needs in order to get out of this, and none of it was done. And of course the you know, the belief is that that she didn't want to be

embarrassed by importing foreign vaccines. He wanted Chinese companies to be able to do it so they could claim victory domestically over the virus. But it's gotten to the point where, you know, we're we're here on the on the cusp of three. Most of the world has mostly moved on from COVID, and China is looking at what could probably going to be the worst COVID outbreaks that they've seen in the coming months. And so the policy response has been completely puzzling, and I think that's one of the

reasons that people are are so frustrated. Is there any element of you know, the party maintains control over the people by locking them down. I mean, it sounds so dramatic and it's but in a sense, I can't understand how that would actually work. Yeah, you hear that a lot. It's it's hard to believe that this is about control. Uh first and foremost. Uh. You have a situation where, you know, health, health, health risks aside, the economy needs to be open in order to thrive, in order to

just be able to tread water. And what's happening right now is remarkable. Um, you saw very very few people as we entered two believing that you know, there wouldn't be a second half bounce, that she wouldn't relent at certain point, and nothing of the sort has happened. So if you look at what's likely to happen in the coming months, the party has got to be responsive, look at least look responsive to the people who are protesting right now. So there will be some sort of rhetorical relaxation.

There's some policies they could target, they could talk about less you know, splitting families apart, and they can talk about you know, less stringent lockdowns or lockdowns for for for short amounts of time, But you're about to go into the winter months where COVID will spread out of control if there is no sort of control mechanism. And so there's really no good answer right now to to to to the problem that the Chinese government has to solve.

They cannot functionally open up the economy and not have massive COVID outbreaks, but they can't keep the population under control indefinitely under a draconian COVID zero. So you're likely to see them try to thread the needle, try to do the middle ground, and there's no guarantee that's not gonna be a disaster as well. Yeah, that is. It's tough stuff. I don't know how they're going to manage that. Leland Miller, thanks so much for taking the time today.

We absolutely wanted to hear from you to get your latest thoughts on China. Here, Leland Miller used to see of the China Basebook International. They have their own proprietary data sets and data sources over in China get some great,

great information. Well, China seems to be one of the narratives of this Monday morning trading demonstrations over the weekend causing some uneasiness as it relates to that economy, Apple saying they're going to be short maybe six million iPhones because of the disruptions and there plants over there in China, So we need to just kind of get a circle around this whole thing. We'll do that with Gina Martin Adams, chief equity strategist of Bloomberg Intelligence, and a Rack Ronnick.

He's a senior tech an also Bloomberg Intelligence as well. Gina, let's start with you, how do you factor in I don't know, China risk if you will to your market outlook. Yeah, I think with respect to the US, China risk is largely centered on the multinational securities that do have exposure

either import exposure or export exposure to China. UM. So clearly any sort of persistent slowdown into three, persistence of these lockdown measures and the zero COVID policy is a constant drag on this space in two that will continue into three. For global equities, there really is a matter of the investment opportunity set just continually shrinking with the

lack of kind of the investibility of China. This recall for the last more than fifteen nearly twenty years now, China was anticipated to be a very strong emerging market player, and that was certainly reflected in its growing share of the market cap of the global indices over the last year, even closer to two years. Now that's really come under question, and it makes pretty tremendous train tremendous sea change in

the investibility of global markets. Not having that big player as an area where you can put capital in the global markets has resulted in a flight to other areas in emerging markets, in particular India, whereas evaluation premium for Indian securities is off the charts, investors have clearly tried to find ways to you know, leverage emerging market growth. What about China? What about producers? Um, let's bring in on a rag here. Um, it's fascinating what the point

gene is making about valuations on the stocks. But you know, producers that make consumer goods like apple still seem to have no problem. Um, you know, made in China, having made in China stamped on their on their products and consumers still buy them like crazy. Right? Is that changing it all? On a rug. I don't think so, and only the reason is there is no donative at this point. I mean, what are you going to do by a Nokia phone? So I mean, but they could produce in

India for example, like investors are there instead? Right, No, that's the fair point. But the thing is this is unlike stocks, this supply chain took twenty years to build. You just can't get up and start building iPhones anywhere else. They have already started to do that, but just less than five percent of all iPhone assembly, and and a large rationale for that is the supply chain for most

electronic goods is centered in China. So don't talk to us about you know, what's Apple really doing day to day to try to mitigate this issue? What have you seen? So we have already heard that they are assembling these phones outside the China at this point, and I think it's going to take four or five years to make a meaningful DNT to that. The second part is going to be are they you know, the parts and the other things that they need to actually assemble these products?

Are they going to start sourcing them outside now? For that they really need to invest eggressively in areas such as Mexico or other low cost regions where they can manufacture some of these pots without that, you know, the supply chain doesn't make any sense to um, you know, just do things in isolation, because at any given time they are making millions of these units. It's not you know, something that has only a few thousands that you produced,

all right, it's fascinating. So they basically can't, is what you're saying, move substantially, UM as quickly as investors can. I just wonder if that means Gina. Does that mean that there's an opportunity here? I mean, do you buy the dip in that situation knowing that it has to come back by the dip in China? Is that the question? Um?

You know, I think for investors that are willing to take a tremendous amount of risk, your potential reward for taking on that degree of risk is is fairly substantial, right, But I at this point in time, it's relatively unpredictable. Most rational people are acting that the results of these protests over the weekend will be more further compression and economic activity more clamped down as the authorities in China try to take on you know, um, these protesters. So

I think that the risk is tremendous right now. That said, the stocks are incredibly discounted. You are taking a risk that there is no opening coming in three Nonetheless, there is very little expectation for growth baked into prices. So I think that your risk reward works, right. You take on a lot of risk, You could get a tremendous amount of reward, but it is it is a lot of risk. Admittedly, all right, Gina, great stuff. Appreciate checking

in with us, Gina. Martin Adams, chief equity strategist for Bloomberg Intelligence, and Anama Rana used to senior tech animals with Bloomberg Intelligence. Well he falls Apple very closely. And again, investors today are just trying to parts what's going on in China, What does that mean for the outlook for global economic growth, What does it mean for some of the tech companies that still like Apple, rely pretty heavily on the supply chain, with lots of parts of that

in mainland China. And you think about how this government is dealing with the zero COVID policy and what that means for economic activity. So again that's kind of the narrative of what this market is trying to digest. Let's talk China. Let's talk kind of investing in emerging markets. Because we're talking marging markets. The M S c I big part of that is China. We can do that today with Kevin Carter. He's the c I O and

founder of E m q Q Global. He joins US Live and our Bloomberg Interactive Broker studios, so he gets an extra gold star today for being live, not phoning it in. Kevin, You've been doing business. So let's start with the acronym. We always throw around these acronyms, and I feel like I guess emerging markets and then it's tech tech stocks y K E m q Q. Well that's exactly, and it's emerging markets technology and and specifically

it's emerging market can sumer technology. It's the smartphone enabled emerging market consumer that we're trying to tap into. So yes, E is for emerging, M is for market in. Q Q, as you know, is synonymous with tech investing and also a sort of double and tender because the ten Cent original platform that messaging was called q Q. That's right back in the day. So when it's an E t F by the way it is Q. Yeah, then that's

an exchange traded fund. That's correct, exactly. I just want to clear this up because a lot of people driving around like one cm QQ exactly, and then they don't know there's an e t F. So if they like what Kevin has say, can't go and buy it. If they think it's hogwash, they can sell it or whatever. You know. Yeah, well, the indexes are are up this year, so good stuff. All right, talk to us about your

take from China. I mean you've been doing business there for a long time, investing in these companies and these industries. What's your takeaway. Well, look, China is the second largest economy in the world at least, and a big thing, and it's been the biggest part of the Emerging markets indexes, the broad ones over UM, and it's an important place. But it's different than us, and it has its own challenges in its own ways of doing things, and I

think it's hugely misunderstood. I think there's a lot of fears about China UM that are unfounded, things like delisting, the so called government crackdown. So I think China's why are those unfounded? I have those fears and I feel like they're founded quite well. Well, um uh, I could go into disappeared for a couple of months. When the when the richest guy in the country just disappears for

a few months, that's worrying. Yes, well, I think Jack's doing five but um but look what we do is invest in the internet and any commerce companies in emerging markets, including China. And the reality is that while China might be an emerging market in a traditional sense, when it comes to the Internet and e commerce and smartphones, China

is the most developed country on planet by far. I mean, China is the Jetsons and their e commerce market dwarfs the rest of the world, and it's actually four times bigger than the other forty five emerging markets combined. So China is important. It's an important part of the global consumer internet story. But it's the second wave, and it's the third wave that's coming beyond China that I think investors should be looking at. I think a fair question

is is China even investable today? Well? I think it certainly is. There are places like Russia that are definitely not investable currently in a traditional sense, but no, I think China is very much investable but it you know, it's it's a volatile place for sure, and I think it always will be. And well, we just had Gina Martin Adams on from Bloomberg Intelligence who said there's a lot of risk there, but the rewards are massive. Um, the third wave that you speak of, is this also

a China play or are you talking about India? We were talking about during the commercial how important India could be. Sure. So, so we have a second strategy, which is the emerging markets Internet companies ex China, which we called fm q Q and the way to think about, uh, what's happening on the planet, and it's happened here, but it happened here so long ago. We forget that this is a wave that's happening. But you have sort of three mega trends.

You have billions of new consumers and emerging markets. They're getting their first computer in form of a smartphone that costs eighty dollars brand new and is running on Android, and they're getting access to the Internet for the first time. And because they don't have a computer, uh you know it's a traditional computer, they don't have a bank account, there's no target stores. These people are leap frogging traditional consumption.

And so the first wave of consumer internet technology on the planet started in the US around the year two thousand and we had a fifteen year S curve of growth. The second wave, the China wave, started about two thousand five with Ali Baba ten Cent Bai Do, which went public before Google, and that wave, that S curve. You know, it's still growing, but the steepest part of that growth

curve is behind us. And now you have India, Nigeria, Indonesia, Brazil, all of these other five and a half billion people that are getting their first computer today and again it's not on their desk, it's in their pocket and it costs sixty dollars and they're getting the Internet for the first time. And that story is just getting started. And FM can QQ. So if I look at the performance year to date, obviously everything's down um and and E

m q Q is down thirty six percent. F m q Q is down fifty Is there uh, you think less risk in in the frontier markets. Well, I think there's a lot less risk in both versions because they're both down as you mentioned quite a bit. And in fact, you know, the broader E m q Q is down at least at one point, you know, over se as of a couple of weeks ago. So this is a

volatile place. But we're investing in companies, were investing in what we think are going to be the most important growth businesses on the planet for the next couple of decades. And those are the Internet companies that are providing all the same things that the Fank stocks provide us, but they're providing those services to the five and a half billion people in India, in Brazil and the places I mentioned.

And that is if you're going to invest in emerging markets, that's where you want to And these are actively managed. I mean, this isn't you're not tracking an index here now, these are these are rules based indexes. So we you know, we own every publicly traded emerging markets internet company in our broader offering. And then the ex China version fm q Q owns, you know, the seventy five or so

that are not Chinese. What's number one on your to do list looking at these companies in terms of due diligence? Is a quality of management? Is it? Soundness of business models? A balance sheet? How do you guys? Rule of law? Overall? Yes, thank you. Well, you know again, the world's got a lot of risk, and emerging markets have a lot of risk. I mean, we've seen in Russia this year, I mean war and you know your stocks basically wiped out completely.

So you know there's no free lunch, and emerging markets and and and there is volatility um in terms of the main part of the due deligence we do is just identifying these companies because one of the problems, particularly in emerging markets, is that the database has so much power.

And the biggest problem in the traditional indexes is that about a third of the companies are government owned banks and oil companies, state owned enterprises, which, in addition to having conflicts of interest and inefficiency, there's corruption that's rampant. And the second problem with the indexes is most of the internet companies aren't included. So if you look at Latin America, for example, Mercado Libre, the Amazon dot Com and PayPal of every country in Central and South America,

it's not in the index. New Bank, the largest online bank in the world out of Brazil, backed by Berkshire Hathaway, and you on the New York Sock stage not in the index. So the first thing is to make sure that we find all these companies because the traditional approaches are leave being a big hole. Wow, good stuff, talk about risk and hopefully return. Kevin Carter, c I O and founder of E m q Q Global talking about

emerging markets here. The risk reward UH certainly front of mind for a lot of investors today as we kind of process what's going on in China, as we've got another data point with Apple Computer and their production issues, So front of mine for emerging market investors. W T a coop oil getting back lots of the losses I had earlier today. We had reached a low today of seventy three dollars and sixty cents per barrel. We're now it's seventy five seventy five cents a barrel, off about

six tenths of one percent. By the way, I just texted you a photo you did, and I texted Eric also check it out. I was at UH. I was in Newark, Ohio this week. I drove by a gas station called Sheets, which you may know if you're a trucker or if you spend a lot of time on highways. They had a dollar ninety nine a gallon unladed. That is amazing, and I guess it's I guess it was

some kind of marketing thing. But my nephew at the Thanksgiving, you know, gathering, when the whole extended family was there, he's just got his driver's license, so he went around the house collecting people's keys and driving out to fill up at the sheets for his stuff, adding value there for in the of a Miller household. All right, we've got global energy here, let's talk about it. Let's round table.

We can do that with Fernando Valley. He covers this stuff for Bloomberg Intelligence and Mike mcloney's our commodity strategist for Bloomberg Intelligence. I have no idea where these people are, but they're not in studio. I can tell you that Fernando talk to me about I guess you know your view of crude here. Is it all hinging upon demand out of China in the short term fall. I think

that's correct. It's China, and then it is the Western world as well, because if you remember we talked about how you're his cartailing their demand in order to meet their needs for winter, and then inflation is impacting consumers on the US globally really, but in the US and emerging markets UH, and that will impact short term demand. I think when we look towards the second half of twenty three and beyond, then supply becomes a bigger question than the men. But in the short term we see

a lot of those pressures continuing. The consumer is squeezed, and in China, between COVID zero and their own economic walls growth UH presents a big risk for those demand Mike, what's your take on what what we see happening in China. Apparently the protests have been quelled today, um, but I still think it's pretty monumental that people are willing to risk lives and livelihood and come out to protest. I

think that's part of the micro from China. The macro is China incremental to mind, demand from China in terms of all commands have been declining for a long time. There in points of crewe I really peaked a few years ago. Now Fernando can speak to that more everybody. A lot of the the bulls have been spoken to the opium, but I've been pointing out this has been happening for quite a while. Our Chinese strategists out of Agias said, the property crisis still is another more to go.

So to me, that major inclemantal source of demand in the world has been bad for a while. And you've looked at the agend they tried. They dropped the triple R rate last week. The first time they cut the triple R rate was almost ten years ago, so they've been they've been trying to support their counting for quite a while. And I like to point out what's really happened in the last ten years is OPEC's largest customer

used to be US is now a competitor. So to me, that's part of the reason we're going to continue to go lower and crude oil now I think now it's pretty good price, but the key thing is it got too expensive. That pendulum swung too expensive, nownce the question of how cheap will it get, And it's almost guaranteed to get some form of cheapness as a world tilts towards recession, as our economist model for the US recession is very high for next year. So to me, this

is just part of that pendulum sweeking back. And one thing that Crudel has been doing is just following copper copper on the year. But my does doesn't OPEC come in with more production cuts as the price falls responsive. OPEC is notorious for cutting prices in and when prices drop a lot, their job is to keep prices up. So the mast big example is two thousand and eight, so OPEC will remember OPEC used to be of total supply around ten years ago. Now they're less than thirty.

They're less and less important. The most significant thing that's pressure crude oil prices. Since two thousand six, which is the first time we traded, the current price on the screen has been US supply and Canada supply seeing demand, and the US demand actually peaked right around that time. So this is a major paradigm shift. And this is what I see is crudal is just a massive swinging pendulument got too expensive, going back down, and OPEC is

becoming less and less significant. And yes they will cut because they pointed out the Feds tighten and they see the demand destruction. That's the biggest factor right now. And I think Fernando even led to a demand structure and now is just getting started. The question I asked, what stops this process? It's not going to be fed or Central Bank Easy. So, Fernando, you know we're talking about some of the US shale operators. What are they telling

you about production capacity all that kind of stuff. Well, they are struggling with inflation themselves, and they're struggling to grow at the rates from from prior years. And so in the short term there is a little bit of growth still left. But we we really think that US shell is not going to reach the levels expected a few years back of fifteen sixteen million barrels a day for total US production. We really think we're nearing our

overall peak and supply. And that's why I agree with Mike in the short term that the main is a much more relevant issue, and then the pendulum swings back towards the upside once we don't have enough supply and and Mike alluded to effect not being as important. We also don't know that they have the spare capacity to

overcome that weakness in US shale. Uh. And then we really that the inventory picture in the U S show is a lot dimmer than was projected even one A lot of the high quality acreage has been drilled, and if you look at the productivity for a well in all four large US shale basines. They're weaker in two than he was in So just got about thirty seconds here, Fernando, Um, do we start to see real drops in prices at the pump as well? I know that there's a big

mechanism that needs to, you know, be played out. But and I've lost all hope for diesel, But for regular unletted does it continue to come down towards the sheets dollar gallon level? Yeah, I believe that's that's true. Maybe less so in the northeast of the US just because of logistical issues. But when you look into the Mid Continent Gulf Coast, you should see lower prices over for the remainder of the year. Uh, with Brent and w T selling off, and then even the crack spreads themselves

are little bit weaker. So you should see some relief. Holiday relief, alright, good stuff for other people, Paul, Not for us, No, not not for us, not in New Jersey. For Nono Vali senior analysts Bloomberg Intelligence covering all the energy space, and Mike mcgloan, he's our commodity strategist for Bloomberg Intelligence, breaking down what's going on in global energy today. Is Cyber Monday. You're gonna click away met and make some purchases here today. I I've already done it. You've

done it. Look at you? Because I don't know how much it really matters Cyber Monday. I started to see huge deals pop up like on Thursday and Friday. Alrighty, okay, all right, let's bringing Jen Bartasha. She's senior equity research channel. She covers all the retail stuff for Bloomberg Intelligence. Jen talk to us about kind of what we know so far during this you know, Black Friday coming into cyber

what was it? How was it? Well, you know it was it was probably a little bit better than people expected, but it was nothing spectacular. Um. And that really shouldn't be a surprise to anyone because we've got consumers who are a little bit more conservative, um. And we have retailers who have spread out those deals, as Matt was saying, over a really long period of time. Yeah, I mean they've already they already started to announce them before Black Friday,

and they seemed to last. Awhile, are retailers having a problem with inventory across the board or is it just specific stores that got stuck? It was really some specific stores that we're having inventory issues, UM and and specific categories even within certain stores. And so, you know, apparel has been an issue. I think it's going to continue to be an issue through this holiday season. You know, we had our entire retail team out on Black Friday,

coming through stores, hitting the malls, UM. And you know, we saw there were bags people were buying things, but it wasn't in bulk. And and apparel was one of those areas where people were buying very specific things in apparel, it wasn't across the board. UM. So you know, I think it's kind of a mixed a mixed result. UM. But the good news was that people were out and

they were looking for deals. And if I were to go shopping, and that's a big if, Jen, will I find stuff on the shelves, you will UM that the inventory seems to be pretty right sized. UM. You know, there are certain certain hot items that are are out of stock. You know, we do an annual toy survey, for example in Bloomberg Intelligence. UM, and there are some hot toys of the seasons that are out of stock now across Walmart, Target, Amazon, But it's really very select

items at this point. Um, we're hoping that this means that, you know, it'll be a solid season and that they won't be left with too much inventory as we head into January and February. Though, what what are the hot what's the tickle me Elmo of or the cabbage Patch kid of the year. Well, you know, so far this year it's been a lot of video games are out of stock, so people are definitely loving their gaming type of how can video games be out of stock? You

just buy a digital copy online. A lot of them still come on the little discs that you pop into those those older consoles, and so you know, those those have been uniformly popular across all the regions. Know why because, um, kids that get them want to be able to resell them later. So that's that's why the existence of those discs or that explains the existence continued existence of those discs and the game shop brick and mortar stores coming

from it makes sense. Yeah, they're like trading card versions, but they retain value whereas you know, the digital code, you can't really pass it on. Hey, Jen, I know you also in your coverage cover Beyond Meat that stock got downgraded by Barkley's today after the stocks down like seven percent, So thanks a lot Barkley's But um, what's the deal with that whole faux meet thing? Is that a flash in the pan? Is this a real sector within the the food industry? How do you think about

it now? Well, I still think of this is there's a there's a strong long term case to be said for alternative proteins UM, but the current environment and looking over the next year to two years, is going to be a really tough environment for those players. And and really there's there's just a bunch of headwinds that they're facing. One is this the consumer UM people are trading down UM.

Alternative proteins are more expensive still than conventional proteins, so UM, if people are watching their budgets, they're they're pulling back from those those alt meat products. UM. And then you have a lot of challenges because they're growth companies and so they have not yet mastered you know, how to how to build a bigger business and do things the right way with regards to manufacturing or UM lining up their innovation queue so that they do things in a

smooth and uninterrupted manner. UM. So they're growing pains that are happening simultaneously with external pressures as well coming from the consumer. And Jenna know you cover the supermarkets as well, and one of the areas that consumers have seen inflation probably the most profound, uh, is the supermarket. Do prices ever go back down or I don't know, are we just gonna pay these higher levels forever? Now? They actually

do come back down. And I will say, when I look across the broad scape of root scope of retail, grocery stores are some of the fastest to bring prices back down. Um. And so we will we have seen inflation starting to moderate. I think you'll start to see some prices come down in different categories in the store slowly as we get into the middle of next year. UM. But they will come down UM. Now then you know, if there are additional pressures, they could always go back

up again. UM. But they tend to unlike other categories, they don't necessarily reset that bottom. They sometimes they can go back to some closer to historical norms. Um. The problem we have with food is that we were in years of deflation UM for a long time, and people got very comfortable with very low food prices, especially here in the United states um. And so that makes the inflation we've had feel even more uh, you know, even more challenging than than it might otherwise. Yeah, I think

that's a good point. And you know, the was reading a few notes about not just um beyond meat but also Tyson Foods, and analysts were saying, look, it's it's the whole protein area space. Just because of the cost um, you know, investors are looking for other places. Although my initial lot was you need protein anyway to survive, you can,

you can't look for something else. It's true, but people also aren't thinking about you know, for beef, it's a multi year cycle to bring a cow to market, right, and you have other factors like there's drought, um, you know, where it makes it more expensive to feed those cattle,

which means that ranchers have fewer head. And when they have fewer head and they go through that, you know, eighteen months cycle, there are fewer cows, which then drives up cost and and you know, I don't know, I mean, I want they make in the same amount of chickens as they always make. I don't know. Jen Bartash is great stuff. She breaks it down for Senior Equity Research Analystic covers everything's on the retail side consumer beyond meat.

We can pretty much ask her about anything and she's got some good analysis to back it up, so we appreciate getting her time. Ye thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three and on Fall Sweeney I'm on Twitter at pt Sweeney. Before the podcast. You can always catch us worldwide at Bloomberg Radio