Markets, Meta, And Cyberthreats

to our Big Take story today talks about commodities. And you put up the g l c O screen on the Bloomberg Terminolts of Global Commodities page and there's just a lot of green on their commodities on a year. Today basis up a big time. Not just oil, We're talking all kinds of commodities. Megan Derris and Albury, agricultural reporter for Bloomberg News, joins us with a big take story today talking about the global market for grain, corn

and other commodities amid the Ukraine war. Boy, it seems like the Ukraine situation is really exacerbating what had already been kind of a commodity inflation story. What do you have, Megan, Yeah, that's right. Um, So, you know, ever since freshest attack began on Ukraine, it supports have been effectively shut. UM. That's where most of its grain would exit, loaded on

big targo ships headed for Asia, Europe and elsewhere. UM. Now, as the top of our story shows, you know, they they've resorted to transporting some of those crops out by rail. So it's kind of you know, carving routes that we haven't seen in the past. UM. But granted that's you know, pretty slow going, it's expensive, the volumes are much lower

than normal, and even at the border with the EU. UM. You know, the train trucks are different sizes, so between Ukraine and Romania, for example, So it causes a lot of um challenges for exporters. How fungible is wheat? UM? I mean we I assume farm more than enough wheat and corn in this country, UM, not to have to worry about any kind of imports from Ukraine halfway across across the world. UM. How come we're seeing huge jumps here for wheat as well. Yeah, so that would be

true for the U S certainly. You know they're they're pretty self sufficient in grains. UM. But you know, these really are our global markets and a country UM like the U S or UM like the U EU are you know exporters So um, if if Ukraine is effectively gone or mostly gone from the world markets, um, there's going to need to be alternative origins stepping up. Um. As our story shows, you know, we're already seeing some

non traditional players enter the fray as well. UM. For example, India, which typically isn't a very big wheat exporter at all, is now selling record volumes all across Asia. Um. Their their prices are usually uh, kind of too high, their their government set prices. But now that the global market has rallied so much, they've become competitive and are joining the fray. To what can the American farmer do? Well? What are we seeing from the American and farmer? They

changing the way they operate these days? Are they planning differently? Are they stepping up production? What are we seeing there? And by the way, Megan, she's a sparty Yes, I know. So she's from the Great Midwest. And I mean, you know, is there an American farmer? Ohio is the gateway to the West, think the heart of it all? Is there an American farmer? Or is it just like large corporations? Oh,

there's there's certainly an American farm or two. And just to just to clarify, I from Michigan from wild I'm from the great State of Okay. Great, but I appreciate you as a Sparta because we both hate you have m that's true U. So, um, yes, there certainly is, you know, American farmers. And the one challenge with wheat is, you know, um, pretty much in across the northern hemisphere. So here in Europe where I am, and also in the US, most of the wheat is sewn in autumn.

Um they plant it, it goes dormant for the winter and starts growing again in the spring. So there's not too much of a chance to really boost wheat plantings at this stage. UM. Besides in the southern hemisphere, UM, but in the U s as well. You know, one of the challenges is input costs are really high. Costs for fertilizer have been rising. We saw a usc A plantings report last week that showed UM, US farmers are actually going to cut back on corn plantings in favor

of of soybeans. UM. And the extent was kind of a surprise to the market and has has kept grain prices supported here going forward. So uh, you know there there is rising crop prices, but farmers are facing challenges on the input side as well. So what is the expectation the market megan about any output from Ukraine? Is it? Are we assuming zero? Are we assuming kind of how we're thinking about that? Um, you know, analysts rangers are are pretty wide at this point. Uh, it's unlikely to

be zero. You know. For example, UM, the CEO of Colonel was on bloom TV earlier today. He was expecting that Ukraine would produce something like a maximum of sixty million tons of grains and oils this year. But that compares to a record over a hundred million tons last year. So it is a significant cutback. But the supply you know, could still be there. Um, the challenges you know that

there's still obviously, uh, a lot of difficulties. I mean that the country is at war, there's um challenges securing diesel, um fertilizer, you know, with with occupied land and UM. Even depending on what they can harvest this season, the

challenge will still be what can they export? Um. You know, Ukraine and in Russian wheat exports typically accelerate in the middle of the year when the next wheat harvest come in um if they can't do that as usual, that's as our stories had from one analyst, that's kind of when the world's wheat shortfalls could come more into focus. Alright, Megan, really good stuff. We appreciate that. Megan Derison Albury, agricultural

purporter for Bloomberg News. The Big Take story talking about the global market for grain, corns and other commodities amid the Ukraine wore a big, big issue. You can read more Bloomberg Big Take stories at Bloomberg dot com slash Big Take or on the terminal and I Big Take go. All right, let's talk about this market here. If you've got some fresh money, what are you doing today? Yes, a shot, I'll carry equity. Analyst of Brutuman Asset Management

joins us. Actually, thanks so much for taking the time here. If I got some fresh equity, maybe I got a little bit of a stimmy check that I haven't spent. Where do I put it in the market? Thank you

guys for having me on. I mean definitely, you know, we still recommend putting your money in the equity markets, and for us, your long term investors, we're looking at, you know, if there's a sell off you want to look for high quality names, and you know, and those kind of names that have high earning visibility and strong underlying secular growth and a lot of uncertain times, be like opportunities and healthcare especially like those ones that have

really strong underlying secular growth in women's help, so an organ On which is a pharmaceutical company that was found off on Mark or pro Jenny which is a fertility benefits manager, and as well as managed healthcare which is United Healthcare that has a large scale and a lot of population involvements into their medical advantage. Pray, can I

ask you about the midterm elections? Phil Orlando yesterday from Federated Hermy was just telling us that you know, they expect a good for the Market's not not a political commentary, but a good outcome from the midterm elections in that we won't see much Um. Uh, well, we'll see the government set up so that they can't really do anything. Gridlock is good, um, although maybe it's bad for society. But uh is that does that play into it? All? Um?

Your picks? Because it strikes me that depending on the outcome, you could have a very different um expectation for managed healthcare I mean for us just like the population dynamics too. You know, more and more people are getting older. You're looking at more people moving into the sixty five plus buckets UM and those people are going to be starting to the eligible for their Medicare, Medicaid programs and all

those different features. So managed healthcare in general we see a pickup on that end of you know, the the hired spending for senior sixty five plus UM as they

started to get enrolled into these programs. UM that that top line growth is going to pick up for managed healthcare companies, and specifically large ones like Healthcare has that scale, especially with a ship towards value based care to really take advantage of the large scale that it has to reduce this cost over a large number of people that are coming into into the even rollness overall, we've got earnings coming up. How much does corporate American need to

really deliver on the earnings front? What are you gonna pay pay attention to? I mean, yes, do you want earning? Summing up? You know, companies are able to maintain that growth and their hard margins are really going to be more in focus. You know, current effacts that Q one twenty two estimated earnings growths around four point seven percent.

And but what we've seen is like, if you know those are the you know, we're looking at the similar factors, are they able to maintain um you know, their their growth and their margins in general. And we've seen that earning estimates really have been quite resilient despite a number of astro headwinds that we've seen and based recently. Is there a huge number of them, the inflation and geo

political risks and whatnot. But earning estimates combined with dividingde of the stocks by plants, do uh doing a lot of room for positive returns even if there's some level of multiple contractions due to some risks here. UM So for us, our long term view on the SMP five hundreds remain strong with above average return potential and we see through what do you think about the big tech companies, the mega cap tech companies so widely held these days.

I mean, you know, you know, we've seen here some talking about procession risks coming up with inverdi via cars. Tech is an interesting place to be in UM your large connegict cap companies, you know, especially ones with a lot of subscription related growth that has that shows that has has some much more visibility. UM like Adobe, for example, intends to have these recurrent revity model that offers that more top line visibility and it makes it easier to

trag growth. UM. So that's in Adobe and companies like Amazon have that kind of feature and it's easier to see. So those are still attractive names that we feel so shoddy. We've got w T I cod oil still over hundred dollars about a hundred three dollars, and it's had such a great move. Has the energy play played out eighty again? But it's hard to say, um, you know we have there's verisic high of altility and sharply high you know, higher oil prices. Uh, you know, going into more arms

their environment. Energy is probably a difficult sector to be in UM with the level of all totally underlying it. UM. That said, again, it's it's hard to say was exactly gonna be driving it down immediately? But you know, we have seen the fact that you know, these are star part ll prices, you know, but you are continuing to ride and the fact is tightening overall. So what we expect is eventually I supply, you know, supply demand. If you kind of eat up a little bit um that

should come back down. Actual, thanks so much for joining us a shadow bell carry their equity analyst at Brewderman Asset Management. Right now, I want to get over to

I feel like we're connected in some way. I think so Matt Kramer, um from the National the National Security Leader, Consumer and Retail and advisory partner at KPMG, must be from the great at of Ohio, you know, I mean, Matt, I'm just looking through not only do we have the same first name, but um, I'm just looking through all of your experience and a lot of it centers around the heart of it all after you graduated from uh

Miami of Ohio. You have done so much charity work there And I just one question, what is the Furniture Bank of Central Ohio. Yeah it's uh it's no longer a flyover state Ohio is here to stay. But yeah, I um, I was on the board at the Furniture Bank, um and many years and and uh great nonprofit organization that serves people that are in need of furniture. And then also currently at a Big Brothers Big Sisters. So love connecting in the community. So men doing a lot

of mentoring then, um, which is which is great? I think that kind of hands on charity work is so rewarding. And a furniture bank, I guess then is like a food bank. So edge a thought. Because you're in finance and you were at the furniture bank, I thought maybe it was like some sort of financial institution. But it's actually, UM doing good. That's fantastic. UM. And you're from Ohio. You must be from Ohio. Absolutely from Ohio. Alright, there's two.

It is the Ohio State University. I don't still don't get it. I don't understand that. All right, So mat talk to us about the metaverse? What is it to you? Just described to our listeners what the metaverse means to you and maybe maybe some of the clients that you deal with. Yeah, it's it's amazing. You know. In my sector, consumer and retail, everybody thought I heard you mentioned omni early being omnipresent, but the omni channel they thought was maximizing,

you know, the digital and online mobile channels. But now we've got this whole new um stratosphere, Web three, dot O metaverse. UM, it's actually very exciting. For you know, Brandon marketing enthusiasts, and in this sector creates a whole new opportunity to express your brand. I think for consumers, UM, you actually don't have to be yourself in the metaverse. You can be your alter ego, you can be whoever

you want to be. So I think actually it's it's pretty exciting, very broad based, and what companies are trying to figure out now is just how do I engage? But clearly from our survey we surveted thousand consumers, we think that's extremely relevant, is UM. What you're finding is the future generations are most passionate about engaging in the metaverse.

We found that of generations UM, gen y and millennials are are very familiar in the mid eight UM and certainly also the people that are that are engaging in the metaverse. Also found that being friends UM in the metaverse is about half of the people thought it was just as good as in person, which kind of shocked me. So we're getting some data that's telling us that this this is probably going to be on a hockey stick.

I totally get it. You know, as someone who's played grown up playing video games UM and well, so I moved at a very young age to Berlin, and I had friends who from Ohio who had moved to d C and some who were in Paris. And at the time, the Xbox was a new thing and we couldn't afford to call each other on the phone all the time. So what we did was we all got xboxes and we could play Halo and and talk to each other at the same time. That was my first, I think

kind of metaverse experience. But now everybody or many people have a metaverse experience in that you work from home and you live in kind of zoom or next Year or whatever it is. Can we have a broader definition of the metaverse doesn't have to be this kind of thing where you put on VR goggles and you um go and play some fantasy game with wizards and goblins, right, yeah, and that's it's it is the entry point now, I um you know, people are certainly entering through gaming and

through movies. UM. I was talking to a CFO the other day and he was it was a wake up call for him when his um college aged son was home and he was spending almost daily time with his roommate who had lived in Chicago and felt like they never left college together. They were engaging on a daily basis. But I also think the categories that are going to start to emerge beyond gaming and movies are really telling in our survey. The next three we're education, fitness, and events.

So when you think of training and developing talent through UM using you know, a r VR devices, that's the current mechanism. I don't think that's always going to be the mechanism. Also, just building health and wellness into your culture. I've frequently talked to people who are engaging in the metaversity of fitness, bike riding, and other activities UM. And then employees gathering, you know, company wide meetings UM, certainly

heart metal meetings. Does it have to be flying across the country and meeting UH and incurring a lot of costs to do that or can it be as effective to meet in the metaverse? All right, Matt, thanks so much for joining us giving us some thoughts there as people try to get forgere out what the metaverse is, what it means for them and maybe their businesses their day to day. Do you exercise in the metaverse? Right? I don't know your friends with that famous trainer who

shows you how to rid your bike every day. When Sherman gen Sherman there, you are absolutely a big fan, all right. Mack Cramer, National sector leader for Consumer and Retailing as advisory partner partner KPMG, talking to his clients and advising his clients on in the consumer space, in the retail space, how to kind of try to adapt the metaverse UH for their businesses. I'm not sure I necessarily get it, but I agree with Matt that it is what a lot of future generations are looking at.

Wendy Thomas, CEO and president of Secure Works, that's a NAZAC tradd stock the tickers sc as in Charlie w X. Wendy joins us. Wendy, give us, just give us your threat assessment, if you will. Kind of the cybersecurity landscape that we live in now, it seems like we haven't had any major breach recently. What's going on absolutely, And you're right, Russia has definitely been more constrained than anticipated, and we haven't seen the kind of widespread, really disruptive

attacks outside of Ukraine. And I think we all either expected or feared. Yet what we what we saw was in the days kind of leading up to the physical military invasion. We did definitely see what we call wiper type malware deployed in Ukraine, so so think of malware that wipees data for fast damage versus trying to hold it hostage for a ransom. But none of that malware was particularly sophisticated. Much of it was ployed against a

pretty small targeted set of organizations in the Ukraine. UH. And of course there's cyber attacks continue to be directed at the Ukrainian government both UM, with various regional threat groups conducting operations and even some international threat groups including some suspected Chinese groups kind of taking an interest there.

But the other piece that we that we thought, if you recall the Conti group, they're a large Russian ransomware gang initially talked about, you know, posted early on that they would seek retribution for sanctions that targeted Russia, but even then, we haven't seen any notable rise in Russian e crime activities in recent weeks. UM. In fact, that Kanti group was disrupted UH pretty significantly when their own

chat servers and their malware source code was leaked. So while they're not down and out, they keep posting a list of victims to their name and shame leak site definitely, uh put a put a damper on their activities. Well, but you know, we're still at a point where a lot of people think the war could get worse in terms of the kind of artillery that Russia uses. Talk of the possibility of tactical nukes is terrifying. Is it the same? Is the same true in terms of cyber warfare?

Is it possible that Russia could pull out the big guns when it really when Putin really feels cornered and what would that look like? It is? It is absolutely possible and something that frankly, we've been preparing for. And I think that's why you see so many advisories from the White House right now about advising organizations to be vigilant, because while it's quiet right now, that could absolutely change rapidly, and if you wait until it starts happening to be prepared,

it's it's obviously too late. Um. What we have seen is that it could be that that the um the focus right now around activism is really distracting from the

sort of US based companies. We certainly have seen a lot of conversation around retaliation attacks potentially focusing on businesses in the US that you know or or NATO affiliated UM country organizations uk US that have either withdrawn from Russia or frankly from activists that have not withdrawn from Russia, and so the the the concern there is not just those organizations, but all of their ecosystem partners, their suppliers that that can access their systems that that you're depending

on for your business to run. They can be an easy attack vector for your organization as well. So as as Russia starts to deploy more sophisticated potentially malware for youth e criminal groups tend to pick those up quickly in Russia and then use those for monetary gain against businesses globally. What do you advise your clients to do in terms of which they be how should they be

protecting themselves from a cyber perspective. Well, the good news is if you're already pursuing defenses against cyber attacks like ransomware and I we definitely saw a lift in UH business and activity after the Colonial pipeline incident, which just raised awareness again, you're already hardening your infrastructure around the same kind of nation state tradecraft that could fall out

from any Russian government cyber actions. So there's a few things that that we um talked to boards and executives about quite a bit um. That is being brilliant at the basics, because the reality is that that the criminals who you is nation state tradecraft. It is all about monetary reward. So if we don't protect ourselves, we keep the cycle going Cryme pays, and it just fuels these cyberganttings to continue the attacks. So we talk about being

brilliant at the basics really cross three things. And the first one is really prioritizing the patches on any of your externally facing systems and implementing multi factor authentications, kind of like the doctor tells you to exercise and eat your vegetables. Absolutely need to make sure that that your

exposed systems are patched for vulnerabilities. Yeah. The second one, which well, I was just gonna say, people around here talk so much about how much bitcoin has stolen, and somebody, you know, how the story seem like, oh, man, two billion dollars in bitcoin has been stolen, But then I thought she has six hundred billion dollars is stolen from US consumers and just fishing and identity theft attacks last year. So um, you know, dollars to bitcoins is is a

much higher rate of death. Unfortunately, Wendy, that's all you have time Force, so I gotta wrap it up, but we'd love to have you back on so I hope you can join us again. Wendy Thomas there, the CEO and president of Secure Works. 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. On Fall Sweeney, I'm on Twitter at pt Sweeney before the podcast. You can always catch us worldwide at Bloomberg Radio