1 00:00:00,040 --> 00:00:01,320 Speaker 1: Now, it's been a hell of a week. As you know, 2 00:00:01,360 --> 00:00:03,040 Speaker 1: on Monday, the S and P five hundred was down 3 00:00:03,040 --> 00:00:05,560 Speaker 1: three percent. That's its biggest pullback since September twenty two. 4 00:00:06,040 --> 00:00:08,520 Speaker 1: Same day, Japan had its worst one day drop since 5 00:00:08,560 --> 00:00:10,760 Speaker 1: nineteen eighty seven, selling off a mass of twelve point 6 00:00:10,800 --> 00:00:12,960 Speaker 1: four percent, bringing the total fall from the peak to 7 00:00:13,039 --> 00:00:15,440 Speaker 1: around about twenty five percent. To talk us more through this, 8 00:00:15,760 --> 00:00:19,040 Speaker 1: Debra l Ambi of Milford Acid Management. Hey, Deborah, Hi, 9 00:00:19,120 --> 00:00:20,880 Speaker 1: how are you very well? Thank you? So can you 10 00:00:20,880 --> 00:00:23,000 Speaker 1: talk us through the market move? Since then? Has everybody? 11 00:00:23,040 --> 00:00:24,320 Speaker 1: Has everyone just recovered? 12 00:00:25,640 --> 00:00:28,480 Speaker 2: Yeah, So what we've seen is overnight markets through the 13 00:00:28,560 --> 00:00:31,440 Speaker 2: little bit as buyers waited for him to buy the 14 00:00:31,480 --> 00:00:33,800 Speaker 2: dip and S and P was up around one percent. 15 00:00:33,840 --> 00:00:36,440 Speaker 2: So that's after on Monday the SMP was down three 16 00:00:36,520 --> 00:00:39,160 Speaker 2: as you've said, and Japan had its worst day since 17 00:00:39,200 --> 00:00:41,840 Speaker 2: nineteen eighty seven, and so this was reassuring to see. 18 00:00:41,880 --> 00:00:44,040 Speaker 2: But the index is still down around seven and a 19 00:00:44,080 --> 00:00:46,400 Speaker 2: half percent from its highs and investors have been worried 20 00:00:46,440 --> 00:00:49,600 Speaker 2: about the ability of big tech company to generate a 21 00:00:49,640 --> 00:00:53,320 Speaker 2: return on the huge art social intelligence D plus, they've 22 00:00:53,360 --> 00:00:56,000 Speaker 2: been some concerned about US growth, which made worse by 23 00:00:56,040 --> 00:00:59,080 Speaker 2: a week jobs report last week, and then what we've 24 00:00:59,120 --> 00:01:02,160 Speaker 2: seen is over. In Japan, the neatly two to five 25 00:01:02,320 --> 00:01:05,600 Speaker 2: closed up around ten percent, which signals that the worst 26 00:01:05,600 --> 00:01:08,720 Speaker 2: of the panic might be over. So after having that 27 00:01:08,959 --> 00:01:12,240 Speaker 2: worst day since nineteen eighty seven as your reference, on Monday, 28 00:01:12,360 --> 00:01:15,520 Speaker 2: overnight was actually it's es day since two thousand and eight. 29 00:01:16,000 --> 00:01:18,919 Speaker 2: So however, the total four from the peak in Japan 30 00:01:19,040 --> 00:01:23,200 Speaker 2: is still around eighteen percent. As investors have been processing 31 00:01:23,280 --> 00:01:26,600 Speaker 2: Japan's first interest rate height in seventeen years, and this 32 00:01:26,720 --> 00:01:29,320 Speaker 2: caused an unwind of the yen carried trade, which effectively 33 00:01:29,360 --> 00:01:32,280 Speaker 2: means that investors have produced some of their Japanese debt 34 00:01:32,360 --> 00:01:35,760 Speaker 2: and front of that by selling global assets like US 35 00:01:35,760 --> 00:01:38,600 Speaker 2: tech stops. So shot from what we've seen, as markets 36 00:01:38,600 --> 00:01:42,280 Speaker 2: have actually stabilized at these lower levels. And overnight what 37 00:01:42,400 --> 00:01:44,800 Speaker 2: we saw was the Japan Central Bank intelligent made a 38 00:01:44,959 --> 00:01:48,400 Speaker 2: coordinated announcement to try to show a united front and 39 00:01:48,440 --> 00:01:52,080 Speaker 2: restore some calm to financial markets. But we do expect 40 00:01:52,320 --> 00:01:53,960 Speaker 2: bullet floy to stay high. 41 00:01:54,680 --> 00:01:58,480 Speaker 1: Okay, Overnight we also had Uber reported second quarter result 42 00:01:58,560 --> 00:02:00,720 Speaker 1: and as a result, the shares were up about eleven percent. 43 00:02:00,880 --> 00:02:05,320 Speaker 2: Why'd they go up, so Uber reported high expected profit 44 00:02:05,480 --> 00:02:09,440 Speaker 2: and importantly return to profitability, so this isn't the first 45 00:02:09,440 --> 00:02:12,480 Speaker 2: time it's posted a profit. It was profitable last year, 46 00:02:13,040 --> 00:02:14,880 Speaker 2: but at the start of the shad slipped back the 47 00:02:15,000 --> 00:02:18,519 Speaker 2: losses on higher costs from equity investments in legal settlements. 48 00:02:18,840 --> 00:02:22,280 Speaker 2: So in its results it's reaven without sixteen percent, and 49 00:02:22,320 --> 00:02:25,520 Speaker 2: the CEO said it was well positioned to grow despite 50 00:02:25,520 --> 00:02:29,400 Speaker 2: the unserved macroeconomic environment and was very clear that they're 51 00:02:29,440 --> 00:02:32,920 Speaker 2: not yet seeing any weakness and demand from consumers, which 52 00:02:32,960 --> 00:02:35,440 Speaker 2: we do know has been slowing their spending in other 53 00:02:35,480 --> 00:02:38,480 Speaker 2: areas of the economy, including places like restaurants, So for 54 00:02:38,600 --> 00:02:40,960 Speaker 2: now Uber it doesn't seem to be impacted by this. 55 00:02:41,760 --> 00:02:44,919 Speaker 2: And then finally Uber's pushed into advertising continues and its 56 00:02:44,960 --> 00:02:48,280 Speaker 2: new ad business exceeded one billion dollar revenue runway in 57 00:02:48,320 --> 00:02:50,359 Speaker 2: the corter. That was all taken very well. 58 00:02:50,560 --> 00:02:53,080 Speaker 1: Yeah, I can imagine we're about seventy five percent of 59 00:02:53,080 --> 00:02:55,239 Speaker 1: the way now through the US earning seasons. Being quite 60 00:02:55,240 --> 00:02:57,920 Speaker 1: a right, hasn't it. We've had Microsoft, Meta, Google, Amazon, 61 00:02:57,919 --> 00:03:00,760 Speaker 1: those really big tech names reporting their results. What are 62 00:03:00,800 --> 00:03:01,560 Speaker 1: you seeing here? 63 00:03:02,600 --> 00:03:05,400 Speaker 2: Yeah, it has been a ride, all right, And so 64 00:03:05,760 --> 00:03:08,920 Speaker 2: overall i'd say, results from big tech have been quite mixed, 65 00:03:09,160 --> 00:03:12,080 Speaker 2: and the key theme has been increased capital spending on 66 00:03:12,200 --> 00:03:16,240 Speaker 2: artificial intelligence. So Amazon, it had a fantastic result in 67 00:03:16,280 --> 00:03:18,880 Speaker 2: its cloud computing business, but its retail business this week, 68 00:03:18,919 --> 00:03:22,440 Speaker 2: so it shares actually fell around nine percent. Metag digital 69 00:03:22,480 --> 00:03:26,360 Speaker 2: AD revenue grew rapidly. It posted a strong revenue forecast 70 00:03:26,480 --> 00:03:29,640 Speaker 2: and then talked to high capital spending on artificial intelligence, 71 00:03:29,639 --> 00:03:32,519 Speaker 2: and it shares up around five percent. Google saw she 72 00:03:32,840 --> 00:03:35,720 Speaker 2: strength and its cloud business, but its AD revenue actually 73 00:03:35,760 --> 00:03:38,200 Speaker 2: came in loads and expected, so its shares sold off 74 00:03:38,240 --> 00:03:42,360 Speaker 2: five percent. And then finally, Microsoft's cloud business actually missed 75 00:03:42,480 --> 00:03:45,280 Speaker 2: expectations for the first time in two years, but because 76 00:03:45,320 --> 00:03:47,920 Speaker 2: it was due to a lack of supply, not demand, 77 00:03:47,960 --> 00:03:50,720 Speaker 2: it shares only trader down one percent. So the big 78 00:03:50,760 --> 00:03:54,360 Speaker 2: common theme from all of those companies, so Microsoft, Amazon, 79 00:03:54,360 --> 00:03:58,160 Speaker 2: and Google Meta was all big increases in capital spending 80 00:03:58,440 --> 00:04:01,800 Speaker 2: to focus on building out there artificial intelligence infrastructure. 81 00:04:01,960 --> 00:04:04,800 Speaker 1: Oh, interesting stuff. That increase in the AI investment. Would 82 00:04:04,800 --> 00:04:06,760 Speaker 1: that have been taken quite well by the likes of Nvidio. 83 00:04:07,680 --> 00:04:10,000 Speaker 2: Yeah, And so we don't get in there's earning results 84 00:04:10,040 --> 00:04:12,000 Speaker 2: until the end of the month. And this has have 85 00:04:12,080 --> 00:04:14,800 Speaker 2: been really focused on what these big tech companies have 86 00:04:14,920 --> 00:04:18,200 Speaker 2: been saying and what means for in video. So while 87 00:04:18,240 --> 00:04:21,279 Speaker 2: that sounds great this high level of spend currently and 88 00:04:21,360 --> 00:04:25,040 Speaker 2: this is are increasingly concerned about how sustainable the level 89 00:04:25,080 --> 00:04:28,560 Speaker 2: of tech capex is in the sustainability of demands for 90 00:04:28,600 --> 00:04:31,280 Speaker 2: in videos chips. So these results show us that these 91 00:04:31,279 --> 00:04:34,200 Speaker 2: companies are spending tens of billions of dollars now, but 92 00:04:34,480 --> 00:04:37,920 Speaker 2: also that it's not yet translating to meaningful growth. So 93 00:04:37,960 --> 00:04:40,760 Speaker 2: on this is a questioning if the companies can actually 94 00:04:40,800 --> 00:04:45,040 Speaker 2: generate and accept your will return on these artificial intelligence investments, 95 00:04:45,080 --> 00:04:48,240 Speaker 2: and then how sustainable with spenders. And then on top 96 00:04:48,320 --> 00:04:52,119 Speaker 2: of that, these have been both exacerbated by a rumor 97 00:04:52,200 --> 00:04:56,240 Speaker 2: delay to the launch of the video's next generation AI chips, 98 00:04:56,360 --> 00:04:59,560 Speaker 2: and videos shares are actually down around twenty percent from 99 00:04:59,560 --> 00:05:00,760 Speaker 2: its hime early this year. 100 00:05:01,120 --> 00:05:02,720 Speaker 1: Good stuff, Debraah thank you for talking to us through 101 00:05:02,720 --> 00:05:06,120 Speaker 1: a Deborah Landy of Milford Asset Management. For more from 102 00:05:06,200 --> 00:05:09,520 Speaker 1: Hither Duplessy Allen Drive listen live to news talks it'd 103 00:05:09,520 --> 00:05:13,600 Speaker 1: be from four pm weekdays, or follow the podcast on iHeartRadio.