Apple’s Upbeat Forecast Clouded by Cost Fears

Summary

Bloomberg Intelligence Podcast

Episode: Apple’s Upbeat Forecast Clouded by Cost Fears
Date: January 30, 2026
Hosts: Scarlet Fu, Paul Sweeney
Featured Guests: Dan Ives (Wedbush Securities), Danielle DiMartino Booth (QI Research), Vince Piazza (Bloomberg Intelligence)

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Episode Overview

In this episode, the Bloomberg Intelligence team dives deep into three main topics:

1. Apple's latest earnings report—strong holiday performance but uncertainty over margins and AI strategy.
2. The nomination of Kevin Warsh for Fed Chair—potential direction for monetary policy and confirmation hurdles.
3. Oil and gas earnings—dissecting ExxonMobil and Chevron’s latest results and the outlook for the energy sector.

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1. Apple Earnings: Strong Results, Strategic Questions

Main Discussion Points

• Outstanding Quarterly Performance

  • Apple delivered robust earnings, particularly in iPhone sales and growth in China, considered a "massive tailwind."
  • Despite these positives, the stock fell 1% year-to-date, puzzling the hosts and guest.

• Market Reaction Vs. Performance

  • Dan Ives remarks on the disconnect between Apple’s reported results and the tepid market reaction.

    “This is one where I think this stock should be up 5 to 8% relative…to what they perform and the guidance. But I think it also just comes down to…show us the playbook.” (Dan Ives, 01:58–02:23)

• AI Strategy and Competitive Position

  • Apple has lagged peers in artificial intelligence adoption (“watched AI from the stands”).
  • The new Google Gemini partnership is seen as the first significant public step forward.
  • Apple is hiring external AI talent, a notable cultural shift.

• Margins & Supply Chain Concerns

  • Rising memory prices and supply chain strains, especially regarding the iPhone’s new processors, could impact gross margins.
  • Market eyes price increases for the upcoming iPhone 18.

• Tariffs and Global Relations

  • Apple navigated a $1.4 billion tariff headwind. Improved US-China relations have eased some past pressures.

• Leadership and Succession

  • Dan Ives emphasizes Tim Cook’s pivotal role:

    “Cook's gonna stay CEO in my opinion, till that baton's handed. Because this is so important, I think, to his legacy.” (Dan Ives, 03:53–04:30)

• China: Overhang Easing

  • Improved China relations and sales strength counteract previous concerns.

    “They were kind of in the middle of a sort of old western fight between us and China. Now those tensions have come down.” (Dan Ives, 05:21)

• AI: The Critical Gap

  • Apple’s failure to articulate a compelling AI strategy is flagged as the “hearts and lungs” of future growth.

Notable Quotes & Timestamps

• On Apple's missed AI opportunity:

  “They’ve watched AI from the stands. And I think that’s been disappointing…because you have the biggest install base in the world.”
  — Dan Ives, 02:47

• On investor skepticism and market scrutiny:

  “Any blemish, anything investors don’t like, they’re going to take these stocks down. And we saw that with Microsoft.”
  — Dan Ives, 04:38

• On China market rebound:

  “20% iPhone sales—you need that to be a market that's showing growth and that's why you're seeing it. They're delivering everything you want to see.”
  — Dan Ives, 05:21

• On Apple’s AI culture:

  “They’ve really been on a treadmill at 2.5 speed…They were hoping it was going to be internally developed. That wasn’t going to happen. Culturally it’s actually hurt them.”
  — Dan Ives, 06:16

• On Apple’s competitive advantages:

  “When you have the biggest install base…and a hall of fame Mount Rushmore CEO like Cook, you could be late to the game, but 2026 they can fumble the football.”
  — Dan Ives, 06:57

Key Segment Timestamps

• [01:38] – Apple earnings intro
• [01:58] – Ives on the quarter and stock reaction
• [02:41] – Apple’s AI lag and Google Gemini deal
• [03:33] – Gross margins and supply chain issues
• [04:30] – Tariffs and Tim Cook’s leadership
• [05:21] – China sales and market recovery
• [06:09] – AI strategy and internal culture issues

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2. Fed Chair Nomination: Kevin Warsh

Key Discussion Points

• Mixed Market Response

  • Broad spectrum of views on Warsh, with some positive (Terry Haines) and some negative (Neil Dutta).
  • Danielle DiMartino Booth expresses cautious hope, citing Warsh’s skepticism toward quantitative easing.

• Nomination and Confirmation Challenges

  • Political hurdles involve DOJ charges against current Chair Powell.

  • “This will not be possible…until the Department of Justice releases Jerome Powell from these criminal charges.”
    — Danielle DiMartino Booth, 12:51

• Interest Rate Policy Outlook

  • Warsh is likely to align with Christopher Waller, focusing on the Fed’s employment mandate and using data to justify lower rates.
  • DiMartino Booth hopes Warsh resists returning to zero interest rate policy, aiming instead for a ~2% floor.

• Challenges to Policy Change

  • The Chair’s influence is limited; dissent is likely if rapid rate cuts are proposed.
  • She emphasizes the need for the data to “speak for itself,” given conflicting labor market signals.

• Mandate Focus and Balance Sheet

  • Warsh may push to narrow the Fed’s focus back to inflation, not labor, and continue to shrink the balance sheet.
  • Achieving this will be an “uphill battle” on a dovish board.

• Powell's Future

  • DiMartino Booth suggests Powell should remain on the board through 2028 to ensure continuity and shared policy skepticism on excessive easing.

Notable Quotes & Timestamps

• On Warsh’s stance on QE:

  “He and I sat on a panel…and we share the same views that going as far out on the easing spectrum as QE was not good for the financial markets.”
  — Danielle DiMartino Booth, 11:47

• On the confirmation process:

  “This will not be possible…until the Department of Justice releases Jerome Powell from these criminal charges.”
  — Danielle DiMartino Booth, 12:51

• On the Fed’s reaction function:

  “We need somebody who has a deep understanding of the banking system, the financial system, their linkages…he’ll be able to be a steward at the Fed.”
  — Danielle DiMartino Booth, 14:54

• On the policy mandate:

  “We need to go back to having just the inflation mandate and that the inflation and labor mandates are inherently in conflict with one another.”
  — Danielle DiMartino Booth, 15:47

Key Segment Timestamps

• [11:03] – Discussion on Kevin Warsh’s nomination
• [11:47] – DiMartino Booth’s take on Warsh
• [12:51] – DOJ investigation’s effect on nomination
• [14:01] – Policy alignment and reaction function
• [15:47] – Fed mandate priorities

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3. Oil & Gas Earnings: ExxonMobil and Chevron

Main Discussion Points

• Solid Earnings

  • Both Exxon and Chevron beat Q4 expectations. Exxon managed to grow profits, while Chevron's profits declined despite the beat.

• Strategic Positioning

  • Exxon’s acquisition of Pioneer (Permian Basin) and Guyana output are central to its profit growth and free cash flow.

  • Exxon’s financial flexibility allows for outsized shareholder returns:

    “Exxon somewhere around $5.5 billion [free cash flow], yet they paid out almost $10 billion in distributions…because of Exxon's financial flexibility.”
    — Vince Piazza, 22:32

  • Chevron lags due to ongoing Hess integration but is set to catch up via Guyana and Permian assets.

• Venezuela Operations

  • Chevron's longstanding presence in Venezuela: output may double, but global impact will be small.

• Industry Consolidation

  • Sector bearish on major production growth, expects more consolidation.

    “This industry needs to consolidate and we will have fewer but much larger players in the upstream business here in the lower 48.”
    — Vince Piazza, 24:41

• Natural Gas Volatility & Opportunity

  • Recent nat gas price swings; bullish outlook on natural gas over oil due to structural tailwinds (LNG, tech data center demand).
  • Larger, better-capitalized operators will continue to acquire assets, increasing market concentration.

Notable Quotes & Timestamps

• On operational differentiation:

  “Exxon has Pioneer and that's Permian…upstream is really the driver for Exxon.”
  — Vince Piazza, 22:32

• On Venezuela’s potential:

  “You could see that doubling in about two years…but 250,000 barrels over the next, call it 24 months, isn’t really that big of a production boost when you think about the global franchise.”
  — Vince Piazza, 23:47

• On nat gas vs. oil outlook:

  “There are structural advantages that natural gas has…not only on the LNG side, but also in the build out for the tech data centers.”
  — Vince Piazza, 26:25

Key Segment Timestamps

• [20:16] – Oil companies’ stock performance and intro
• [20:48] – Exxon and Chevron operational breakdown
• [22:32] – Comparison of strategies, free cash flow
• [23:47] – Venezuela operations
• [24:41] – Long-term growth, consolidation
• [26:25] – Natural gas outlook

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Closing Notes

This episode of Bloomberg Intelligence delivers sharp insights into some of the most-watched stories in finance and tech: Apple’s battle for future growth and margin preservation, the high-stakes nomination of a new Fed Chair, and how giants in the oil patch are handling a shifting global energy landscape. With expert analysis and clear attribution, listeners are rewarded with context and actionable intelligence directly from the market’s front lines.

Transcript

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[Host]

Big, big week for tech earnings here. The Apple numbers came out last night. I thought they were like really good. So what does the stock market do down 1% in the stock year today? I've been doing the stock market thing for 40 years. No idea how it works. Dan Ives does global head of technology research Woodburn securities joins us live here in our Bloomberg Interactive Broker studio. Dan, what did you make of the quarter last night?

[Dan Ives]

I mean that was a staggering quarter in terms of what we saw in iPhone, specifically in terms of China. I mean China, massive tailwind. China services strong. I don't say best case scenario that you could have seen the stock performance today. I'd say it's a massive head scratcher. I mean this is, this is one where I think this stock should be up 5 to 8% relative, you know, to, to what they perform and the guidance. But I think it also just comes down to, and we've talked about so much in the show, right? Is that what's the strategy? What's the monetization show us the playbook. That's not Cupertino, that's not their DNA. And I think that's why the stocks kind of do little Larry David in terms of the reaction.

[Co-Host]

So how has it been their push? Because they have faced concerns and they've really lagged behind their mega cap tech peers.

[Dan Ives]

Look, I mean, they, they've watched AI from the stands. And I think that's been disappointing to many, including us, because you have the biggest install base in the world. You have 1.5 billion iPhones. But now it comes down to the Google Gemini partnership is the first big step. They're bringing in outside talent, which is, I think, unique to what we've seen there. And then this is what I believe is going to build into a subscription service. I mean, that is not being factored into the stock. And just, I just go back to like a year ago, look at Google. New York City cab drivers bearish on it now. Today they're doing, you know, ticker tape parades for it. You go back to Meta a quarter ago, now look at it this quarter. So we're just going to go through this. Just very sensitive time for tech investors.

[Host]

Looking at the Mark Gurman, Bloomberg News. His reporting today, maybe some concerns he's calling out about gross margins in the current period due to rising memory prices, also some supply chain constraints with the iPhone's 3 nanometer processor. Are all those things kind of suggesting to investors, maybe we're going to have great sales, but maybe not. The margins we're looking for is that.

[Dan Ives]

I think that's, I mean, I think that's in Telegraph, but I do believe you have price increases when it comes to iPhone 18 called $150. But I think, like, what ultimately is going to move the stock? Like when investors are focusing on how do you get to 325, 350, how do you have a stock with a 3 in front of it? It's not going to be sales margins. It comes down to lay out the strategy, show us the playbook. And that's why, like, Cook's gonna stay CEO in my opinion, till that baton's handed. Because this is so important, I think, to his legacy.

[Co-Host]

And what about how it's coping with tariffs? The company said that it created a $1.4 billion headwind. Have we reached the worst?

[Dan Ives]

Yeah, I think worse is probably in the rearview mirror now. Look, that's why also playing nice in the sandbox in D.C. with Trump has been a huge positive. But it goes back to Cook 10% politician, 9% CEO. So he's been able to navigate that extremely well. Now investors are okay, it's good time what show the growth catalyst. It was a huge step in the right direction last night. But you see like investors and this is going to be a narrative in this tech earnings season. Any blemish, anything investors don't like, they're going to take these stocks down. And we saw that with Microsoft and.

[Host]

Others Talks about China here because that's been a big or an overhang for this company for the last couple of years, if not more. What do you think the status is right there about China and Apple?

[Dan Ives]

Well, I think it's a lot more positive today. I mean go back, they were kind of in the middle of a sort of old western fight between us and China. Now those tensions have come down. That's been a huge positive for Apple. That's why Apple and Tesla are the two tech companies are always caught in there. I think you've seen those tailwinds and look, it's so important. 20% iPhone sales. You need that to be a market that's showing growth and that's why you're seeing it. They're delivering everything you want to see. But the one thing that's missing, it's the AI strategy and that ultimately that's, that's really the hearts and lungs of what's going to be.

[Host]

Why haven't they articulated a strategy? And maybe that strategy is we're just going to wait and we're going to partner with whoever we need to partner with and that is our strategy. Have they set that or is that not enough?

[Dan Ives]

Look, they've been, it's essentially the last few WWDCs, it's been a back to the future Michael J. Fox movement.

[Danielle DiMartino Booth]

Right.

[Dan Ives]

The point is like they've really been on a treadmill at 2.5 speed. I think part of it was like they were hoping it was going to be internally developed. That wasn't going to happen. They've probably been, I think slow and culturally it's actually hurt them. That's why you starting to see changes. And ultimately they needed Google to win the DOJ suit for this to happen. If Google doesn't win DOJ suit, this, this partnership can happen. Should they have bought perplexity? Should they have done others? Of course, but that's why this is go time for Apple and that's what the stock's reflecting. Investors like show give me something.

[Co-Host]

And do you think that they have a chance in overtaking their peers?

[Dan Ives]

Look, I think when you have the biggest install base in the world and you have a hall of fame Mount Rushmore CEO like Cook, you could be late to the game, but 2026 they can fumble the football. This has to sort of be their mom off to a strong start. But as we're seeing in tech, this is going to be much more highly scrutinized. You're not going to get be given the sort of maybe latitude just given this market.

[Host]

30 seconds left. Before we let you go. Can you give us your call on Tesla right here?

[Dan Ives]

I mean I think it's going to be a historical year for Tesla. It's the autonomous robotics error that's now taking place. Plus think about SpaceX and Xai, what that's doing to the musk ecosystem. Musk is wartime CEO and it comes down. That's why 600 base case, 800 bull case. And this now starts the AI revolution at Tesla.

[Host]

SpaceX that I feel happens, that's going to lift just the whole feeling about Elon in general I would think.

[Dan Ives]

Look, it goes back to like he's playing, you know, he's playing like chess, others playing checkers when it comes to what he's navigating here. And that's all haters will hate. But when SpaceX comes out, I mean, you know, you're talking about what basically makes them almost a trillion biggest listing ever.

[Host]

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[Host]

We've spoken to, I don't know many, many voices on this pick of Mr. Warsh for the Fed Chair. We've had people like Neil Dutta, very negative. We've had people like Terry Haines of Pangea quite positive.

[Co-Host]

Yes.

[Host]

So there seems to be a wide range of views out there a about Mr. Walsh as a nominee, number one and number two, just kind of about, you know, policies in general. So we'll have to see how that plays out. One voice we absolutely wanted to get to hear from is Danielle DiMartino Booth. She's the CEO and Chief Strategist at QI Research and she spent a good stretch at the Dallas Fed, so she knows how all this stuff works. Danielle, I'd love to get your opinion on the nomination of Mr. Kevin Warsh.

[Danielle DiMartino Booth]

Well, I'm cautiously hopeful. President Richard Fisher served when Warsh was on the board and they were two large deterrents of quantitative quantitative easing worse, famously called QE reverse Robinhood. He and I sat on a panel when he was at Stanford a few years ago and we share the same views that going as far out on the easing spectrum as QE was not good for the financial markets was not good for the overall US Public. And I'm hoping that he doesn't go in that direction, that he's not tempted to go to zero interest rate policy again and that we steer clear of QE and continue to shrink the size of the Fed's balance sheet. These are all things that Bush has indicated that he would advocate for doing and I hope that he follows through with that.

[Co-Host]

So after the nomination there will be the confirmation and we've had some of the sources telling us that it may not be as smooth. What is your projection for that?

[Danielle DiMartino Booth]

Well, you know, I listened live when when Senator Thom Tillis was was interviewed earlier this morning on on Bloomberg and he has a very good point and it not that he's philosophically misaligned with Kevin Warsh. In fact, I think he thinks he's a great candidate. But he was, he used the word frivolous as it pertained to the lawsuit that he was waiting until the Department of Justice's frivolous lawsuit was frivolous. Charges were dropped against Chair Powell before proceeding with any nominee. I think Senator Thune, Senator Majority Leader Thune has backed that nomination. This will not be possible. You will not be able to progress Warsh through the nomination process until the Department of Justice releases Jerome Powell from these criminal charges.

[Host]

Danielle, how do you think that Mr. Warsh will move as it relates to interest rate policy? There are, you know, a lot of folks have pointed out that he's become maybe even more dovish, less hawkish with time in most recent times. And that may or may not have some political ramifications. How do you think he'll try to proceed with this Fed?

[Danielle DiMartino Booth]

So you know, of course that is going to be the perception. I've seen a lot of the comments that he's made. But I would just say this. I think that coming in that Warsh will be more aligned with Christopher Waller and that he will recognize that the Fed is failing on its employment mandate and use research and data and alternative data sets to justify continuing to bring the Fed funds rate down. And I think that that's entirely appropriate. But again, I'm hoping that that he aligns back with his original thinking that zero interest rate Policy is not the way to go and that he finds a more reasonable Fed Funds floor somewhere around, say, 2%.

[Co-Host]

So if wash does become the Fed Chair, what changes first for markets? Policy, direction, communication, or maybe reaction function?

[Danielle DiMartino Booth]

I think reaction function becomes critical. We have to remember that Warsh was, he was a critical player during the global financial crisis. He has deep understandings of financial markets. We've seen some movement in leveraged loans this week. We've seen a lot of activity in private credit. The good news is we need somebody who has a deep understanding of the banking system, the financial system, their linkages. And I think he'll be able to be a steward at the Fed given the extended valuations we've seen and some of the kind of risks and threats of financial instability that are percolating out there.

[Host]

Danielle, he has a remit, or he's talked about a remit to narrow the focus of the Fed here. Do you think that's widely shared at the Fed?

[Danielle DiMartino Booth]

Well, I wish it was more widely shared. I've long said that we need to go back to having just the inflation mandate and that the inflation and labor mandates are inherently in conflict with one another. He's also advocated to continue shrinking the Fed's balance sheet, even if he brings interest rates down. And I hope he goes forward with that as well. But you're right, he would have an uphill battle with a lot of the more dovish members of the board, but he would certainly be more aligned with individuals who are Federal Reserve District presidents who do not advocate for a larger balance sheet.

[Host]

What do you think Fed Chairman Jay Powell will do when he steps down from his leadership position? Do you think he'll stay on the board or he just sail off into the sunset?

[Danielle DiMartino Booth]

I think it was very, I think was very telling to markets and it was very telling to the current administration that he refused to answer the question at the press conference. And I would encourage Jerome Powell to stay on through January of 2028. Philosophically at least, we know that the two are aligned. The two do not like, or at least I should say Jerome Powell, back when he was first appointed to the Fed, came very close to dissenting against QE3. So I would hope that the two would be able to work together and that Jay Powell would stick around until his term ends.

[Co-Host]

And if Wash really is committed to lowering rates very quickly, how much influence does the chair really have in persuading other governors? Because it's not just his one vote, as everyone has repeatedly said, that is absolutely the case.

[Danielle DiMartino Booth]

He could be looking at a number of dissents on day one. However, I think with the messages coming out with just the clear data that we're seeing, whether it's Conference Board or University of Michigan or the fact that so many Americans are not filing for unemployment insurance and yet Google Trends shows you that we've got an almost record level of Americans searching for file unemployment. I think the data will speak for itself and that many will be on board with lowering rates if we have to wait to do so until June. I certainly hope that is not the case.

[Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

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[Dan Ives]

Lenovo.

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[Host]

Here's another group of stocks I totally missed. Year to date, these big energy oil companies are just ripping here. Exxon up 16% year to date, Chevron up 14%. Nice moves there. The company's reported earnings and some pretty good numbers I thought. But what do I know? Vince Piazza, he's the expert senior equity research analyst. He covers all the oil and gas stuff for Bloomberg Intelligence, joining us live here in our Bloomberg Interactive Broker studio. This may be the one, two, maybe three days he spends in the Big Apple. We got him folks in studio. Finch, talk to us about what you learned from ExxonMobil, from Chevron, from the most recent earnings.

[Vince Piazza]

Yeah, well I think for the most part what you've seen the last couple of days is really the after effects of the storm, right? Especially helping natural gas and really the underlying benchmarks for oil. But for the 4Q ShareMod and Exxon down sequentially on earnings, pretty much as expected though because of the realizations quarter over quarter on lower oil prices going forward, it's steady as she goes. Really. It's really about disciplined investing in the business, allowing the Permian and also Guyana to provide that upside. And really it's about the upstream side of the business because the downstream is in a secular decline, a structural decline with the headwinds, but it's really about the upstream. It's really about the Permian. And you know about the Permian why? Because you watch Landman. That's right. So but the real what we're going to see in 2026 really not only from the the big integrators but also from the other companies that are going to reporting is what do you think about natural gas here at these levels and are they going to turn up the spigot on production, which we really don't view it as such. We think the capital discipline will be maintained. We don't think there'll be a great deal of production growth coming in 2026. And what you're going to get is a return of excess cash.

[Co-Host]

So both Chevron and Exxon beat earnings expectations this quarter, but Exxon managed to grow profit and Chevron's profit decline despite the beat. What did Exxon do correctly from an operational and strategic standpoint that maybe Chevron didn't Yeah.

[Vince Piazza]

So, you know, Exxon has Pioneer and that's Permian. So the Permian and the Guyana has worked out quite well. The upstream is really the driver for Exxon. What's interesting though, when you think about the free cash flow that both Exxon and Chevron generate, Exxon somewhere around $5.5 billion, yet they paid out almost 10 billion in distributions via share buybacks and dividends. And you know, that can be done because of sh. Because of. Because of Exxon's financial flexibility. Big cash hoard. So they can support those distributions and their shareholder engagement. Similar for Chevron, but Chevron is a little bit lagging because of. Of, you know, they just acquired Hess, they're integrating Hess, so they're a little bit further behind the process. But also for them, they also have Guyana via Hess and they also have the Permian as well. So somewhat smaller, some a little bit behind where Exxon is, but they're catching up as well.

[Host]

Chevron's in Venezuela, has been in Venezuela for a long time, but they're really the only ones. Everybody else said the heck with this. What do you think is going to happen going forward with the change in regime change in Venezuela?

[Vince Piazza]

Very slow. It'll be a very slow uptick in output. They're roughly around 250,000 barrels per day right now. You could see that doubling in about two years. But this is about sourcing in country. Don't see, we don't see the backdrop for incremental higher investment in country to grow that output. We just see them reallocating within the country to get that output going. And 250,000 barrels over the next, call it 24 months isn't really that big of a production boost. When you think about the global franchise and roughly 4 million barrels a day.

[Co-Host]

Of output, it does seem like international opportunities are the way to go, at least for them. But in your view, which company's portfolio and growth investments maybe are better positioned to deliver growth in the longer term for the price of oil?

[Vince Piazza]

Oh, in my view, and we've said this in a lot of what we've published in the last year or so. Exxon definitely. Because of the franchise in the Permian, because of Guyana. Chevron will get there. They're lagging somewhat only because of the length, the delayed arbitration over Hess. But now they have that. Now they have the Guyana piece as well. The participation with, with Exxon in Guyana. They also have the Permian as well. So both of these enterprises have those key pillars for growth for 2026. Even out to 2030. Both have provided very reasonable growth expectations. A lot of those expectations, a lot of that. The theme is really on the upstream side of the business. That's what's really going to drive the business for Exxon, the downstream investments in the energy products. That will also be a positive for them. But at this point, Exxon does seem to have the upper hand in terms of the scale in the Permian and also Guiana as well. I will say that I wouldn't be surprised if more is done on the upstream side because this is a maturing industry, right? And so, so consolidation is the key. What we have said and what we've published over the last several years is this industry needs to consolidate and we will have fewer but much larger players in the upstream business here in the lower 48.

[Host]

Nat gas but I'm just going over the last couple of months, we went from $4 down to almost two and a half dollars. Now we're above $4 for nat gas. It's been all over the place. How are investors playing Nat Gas these days?

[Vince Piazza]

So in our 2026 outlook, we focused on on natural gas over WTI oil. There are structural advantages that natural gas has, number one, not only on the LNG side, but also in the build out for the tech data centers. These are structural growth opportunities for natural gas that crude oil does not enjoy. And natural gas remains in the process of consolidation as well, whether it's in Appalachia or in the Haynesville. So once again you will have fewer operators but larger operators, stronger operators, molecules in the hands of much larger operators with better balance sheets able to manage these businesses going forward.

[Podcast Announcer]

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get your podcasts. Listen live each weekday 10am to noon eastern on bloomberg.com the iHeartRadio Apple App TuneIn and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

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