[Charts] Cheap Meats, Turbulence, and Tech Spending Sprees

Lou Basenese

Friday, July 23, 2021

It’s Friday in the Trend Trader Daily Nation.

That means it’s time to embrace the adage that a picture is worth a thousand words.

Each week, I select a handful of graphics to convey an important economic or investment insight.

This week, I’m dishing on three exciting trends:

  • Today’s most disruptive force in food.
  • The latest proof of a pandemic-induced tech boom.
  • And a budding opportunity in the skies.

So let’s get to it…

We Have the (Cultivated) Meats!

For all the carnivores in our midst who frequently dine at Arby’s and can’t fathom eating fake meat, now there’s hope for more humane real meat.

It’s known as “cultivated meat.”

Cultivated meat is grown by taking a small sample of stem cells from lean muscle, and then replicating those cells outside the animal to create meat that’s 100% real.

Furthermore, no animals are harmed in the process.

This might be the first time you’re hearing about this, but it won’t be the last. Why? Because as you can see below, the cost to produce cultivated meat is plummeting.

(click image to enlarge)

Per McKinsey & Co:

“In less than a decade, companies have been able to reduce the production costs of cultivated meat by 99 percent. If costs follow the same trajectory as that of human genome sequencing (for which costs, on average, dropped by 45 percent annually between 2001 and 2021), cultivated meat can achieve cost parity with conventional meat by 2030.”

This budding market is potentially worth $25 billion.

So put it on your watch list, and prepare for the cultivated meat trend to produce a multi-billion-dollar publicly traded company — just like the fake-meat craze did with Beyond Meat, Inc. (BYND).

Tech Always Reigns Supreme

I often get lambasted for focusing so heavily on tech-sector investments.

So sue me!

The reason I ignore the criticism (beyond the fact that I’m thick-skinned and stubborn) is simple: it’s because everything today requires technology.

Technology is the oxygen for our everyday lives and businesses. In other words, it’s required for survival.

And here’s yet more proof…

(click image to enlarge)

McKinsey & Co. recently surveyed over 1,100 executives, and here’s what it found:

The only initiatives these execs increased their spending on during the pandemic involved technology. And they increased this tech spending dramatically.

In every other area, they tried to cut costs.

So ask yourself — where would you rather focus your investments? On a massively booming market? Or on a market that looks more like a melting ice cube?

Glad you see it my way now.

A Tradeable Divergence?

As I’ve mentioned before, the Transportation Security Administration (TSA) shares daily foot-traffic numbers. In close to real-time.

And as far as I’m concerned, there’s no better measure of airline travel. And no easier way to measure the health of the airline industry.

As a result, it’s not surprising to learn that airline stocks trade in tandem with this data.

That is, they typically trade in tandem. However, as you can see below, a major divergence is currently underway.

(click image to enlarge)

That means one of two things:

Either the stock market is predicting a major downturn in travel again…

Or this is a tradable anomaly.

Only time will tell. But I’m closely monitoring the situation for a potential entry — and potential profits.

Ahead of the tape,

Tags: meat travel