WEBVTT - Tech Stocks Drop, Hot Job Market 0:00:14.160 --> 0:00:17.599 Imed Ludlow in San Francisco. Caroline Hyde off today this 0:00:18.000 --> 0:00:21.320 is Bloomberg Technology and coming up. Tech stocks drop as 0:00:21.320 --> 0:00:24.200 a hot jobs report, adds pressure on the FED to 0:00:24.400 --> 0:00:28.920 keep raising rates. Plus warnings from Amazon and Alphabet way 0:00:28.960 --> 0:00:32.160 on shares as big tech gets hit by the slowdown. 0:00:32.200 --> 0:00:35.159 Even so, then has that one rises for a fifth 0:00:35.440 --> 0:00:39.360 straight week as Apple gains and the cyber tag which 0:00:39.400 --> 0:00:42.479 sent derivative trading back to the nies. We've got the 0:00:42.479 --> 0:00:46.120 Bloomberg scoop on how vulnerability at a little known software 0:00:46.120 --> 0:00:49.960 firm lead to Sunbroker's going manual. But first we've got 0:00:49.960 --> 0:00:53.400 to talk about these markets are really hot jobs print 0:00:53.440 --> 0:00:55.880 for the month of January, putting pressure on the FED 0:00:56.080 --> 0:00:58.640 to look at raising rates. That's the market take on 0:00:58.680 --> 0:01:00.680 all of this, and then we digest starnings and that's 0:01:00.680 --> 0:01:03.240 that one hundred down one point eight percent, although as 0:01:03.240 --> 0:01:06.160 we said, it ended the week up on the week, 0:01:06.280 --> 0:01:09.920 meaning five straight consecutive weeks of games. The Philadelphia Sundy 0:01:09.920 --> 0:01:12.080 Conductor Index also kind of in line with that, down 0:01:12.080 --> 0:01:14.520 one point nine percent. Is yields continue to push higher. 0:01:14.600 --> 0:01:17.920 Bitcoin essentially did nothing in reaction to what we saw 0:01:18.280 --> 0:01:21.080 from the data. It kind of traded sideways around twenty 0:01:21.120 --> 0:01:25.520 three thousand, five hundred dollars per token. There's still momentum 0:01:25.520 --> 0:01:28.360 in the earning story in both directions. Switched up the 0:01:28.360 --> 0:01:30.200 board to look at the names that we're thinking about, 0:01:30.560 --> 0:01:33.919 particularly Apple. It was so interesting because the post market 0:01:33.959 --> 0:01:37.880 reaction Thursday to Apple's miss was negative, and yet we're 0:01:37.920 --> 0:01:41.520 up two point five percent. There was some optimism around 0:01:41.520 --> 0:01:44.039 what Tim Cook had to say on reopening in China. 0:01:44.160 --> 0:01:46.800 Not so for Alphabet, the parent of Google or Amazon. 0:01:47.040 --> 0:01:52.080 Those shares really dropping and then accelerating their declines following 0:01:52.120 --> 0:01:54.000 that hot job sprints. Of course, their earnings were not 0:01:54.080 --> 0:01:58.080 impressive to investors, worrying sounds about the trajectory three, which 0:01:58.080 --> 0:02:00.960 will get into. And then Meta actually had been high, 0:02:01.040 --> 0:02:04.200 continuing its momentum from its earnings that beat earlier in 0:02:04.240 --> 0:02:06.960 the week. But then we had that jobs print as well, 0:02:07.080 --> 0:02:09.160 and that's where we got to go because the focus 0:02:09.200 --> 0:02:11.720 on data is back, the focus is on the FED 0:02:12.080 --> 0:02:14.679 is back. To Boomberg's repick, it joins me from Mount 0:02:14.720 --> 0:02:16.560 in d C. Read hit me with the numbers that 0:02:16.560 --> 0:02:20.320 we got from the eco sphere on Friday. Well, first 0:02:20.360 --> 0:02:23.200 of all, I'm always here to report good economic news. 0:02:23.240 --> 0:02:25.720 So that's that's a great way to end of Friday. UM. 0:02:25.760 --> 0:02:28.120 But what we saw was we saw that employers added 0:02:28.200 --> 0:02:31.200 about a half a million jobs in January, which blew 0:02:31.320 --> 0:02:34.120 past estimates. And it was this really broad based game 0:02:34.560 --> 0:02:37.840 that really kind of showed this this restrengthening in the 0:02:37.919 --> 0:02:40.359 labor market when we didn't really know it could get 0:02:40.360 --> 0:02:43.280 any stronger. So you saw the unemployment rate fall to 0:02:43.560 --> 0:02:47.639 three point four percent, which is a fifty three year low. UM. 0:02:47.680 --> 0:02:50.080 We saw this broad based hiring. We saw the average 0:02:50.120 --> 0:02:53.280 work week tick up, showing that there's still kind of 0:02:53.280 --> 0:02:57.040 that robust labor demand. And we saw wages, while decelerating 0:02:57.040 --> 0:03:00.800 from the prior month, we saw them still continue to 0:03:00.840 --> 0:03:05.040 climb at a robust rate. Read. You're the only person 0:03:05.120 --> 0:03:07.720 that I know that can go through all of that 0:03:07.800 --> 0:03:11.520 was such beaming joy on a Friday after what has 0:03:11.560 --> 0:03:16.160 been a busy day in markets, volatility driven by the numbers. Here, 0:03:16.200 --> 0:03:19.160 I am broken and exhausted. You just keep going, fine, 0:03:19.240 --> 0:03:21.359 let's go with it. I think that the narrative is 0:03:21.400 --> 0:03:23.519 I framed it. We go back towards the FED right. 0:03:23.800 --> 0:03:27.400 Good economic data, bad news for markets, and that's because 0:03:27.400 --> 0:03:29.320 of what we think the FED will now have to 0:03:29.360 --> 0:03:32.400 reconsider what is the market saying about the Federal Reserve 0:03:32.639 --> 0:03:34.600 in response to the numbers that we have on the screen. 0:03:36.120 --> 0:03:38.520 So especially whenever you get a number like today in 0:03:38.560 --> 0:03:41.840 the week of other strong data that we've seen, Um, 0:03:41.920 --> 0:03:46.520 you saw job openings rally back above eleven million. You've 0:03:46.560 --> 0:03:50.360 seen jobless claims, so applications for unemployment you've seen them fall. 0:03:50.480 --> 0:03:53.480 And the last four out of the last five weeks, 0:03:53.960 --> 0:03:58.480 UM you've seen kind of susteemed strength and the consumer UM, 0:03:58.800 --> 0:04:02.520 it really makes the a the Fed's job more difficult. 0:04:02.600 --> 0:04:04.480 And you know, some of my colleagues had a great 0:04:04.480 --> 0:04:07.320 story out today about how when you see jobs numbers 0:04:07.360 --> 0:04:10.800 like today's, it you know, really strengthens the Fed's resolve 0:04:11.120 --> 0:04:16.279 to you know, push rates above five percent. Alright, bloom 0:04:16.320 --> 0:04:20.160 Bloomgog's re pick. It just fantastic rapporting on that ECO data. 0:04:20.400 --> 0:04:22.200 That's Friday. I want to hone in on the tech 0:04:22.279 --> 0:04:26.279 sector and put it in the context of job cuts, 0:04:26.320 --> 0:04:29.840 all of those that we've seen, particularly in two Boomberg's 0:04:29.920 --> 0:04:32.120 m Live team has been asking if these cuts have 0:04:32.200 --> 0:04:36.560 been too large, too small, or even too premature. Here's 0:04:36.560 --> 0:04:38.800 what some of Bloomberg Television's guests have had to say 0:04:38.839 --> 0:04:43.600 about that question. Even after all of the recent layoffs 0:04:43.600 --> 0:04:46.000 that you've seen for many of the large tech companies, 0:04:46.040 --> 0:04:49.080 we still see tech, as you know, relatively bloated in 0:04:49.160 --> 0:04:51.200 terms of if you look at how much it's you know, 0:04:51.520 --> 0:04:55.240 employment counts have grown relative to its real sales growth 0:04:55.279 --> 0:04:58.120 over the past several years. Even after you adjust for 0:04:58.160 --> 0:05:02.520 the recent layoffs. For every big tech company that's having layoffs, 0:05:02.600 --> 0:05:05.760 there are many small organizations who are eager to gobble 0:05:05.800 --> 0:05:08.560 those employees up. So I wouldn't say that there's a 0:05:08.640 --> 0:05:12.120 dearth right now. What we're seeing, however, is CEO is 0:05:12.160 --> 0:05:14.520 taking advantage of fear in the headlines. So I think 0:05:14.560 --> 0:05:17.640 that these layoffs put these companies in a position where 0:05:17.640 --> 0:05:20.640 it's more difficult for them to show better than expected 0:05:20.680 --> 0:05:23.479 sales and profits, because if they had better than expected 0:05:23.480 --> 0:05:26.520 sales and profits, why are they cutting head council significantly. 0:05:26.600 --> 0:05:29.520 You're at the place where layoffs are the most likely 0:05:29.800 --> 0:05:32.560 catalyst to give FED confidence inflation. We'll get back to 0:05:32.560 --> 0:05:34.520 two percent, so I expect sort of towards q t 0:05:34.640 --> 0:05:37.800 Q three you'll see the margin improvements and bottom line 0:05:37.839 --> 0:05:41.360 improvements on earnings that resolve from the layoffs and then 0:05:41.440 --> 0:05:42.919 the cost cutting. But we're not going to see it 0:05:42.960 --> 0:05:44.440 just yet, so I think it'll trickle in and then 0:05:44.440 --> 0:05:47.840 in the coming months. So you've had the ECO data, 0:05:47.839 --> 0:05:50.240 you've had the earnings. Let's get to the macro and 0:05:50.279 --> 0:05:53.159 the earning season at large with Alex tap Scott, Managing 0:05:53.200 --> 0:05:56.360 director over at nine point Partners, the Digital Asset Group 0:05:56.440 --> 0:05:59.240 over six billion dollars US and assets under management or 0:05:59.320 --> 0:06:02.840 eight billion Canadian dollars and Alex, it's quite the week 0:06:02.880 --> 0:06:05.400 to digest. I'm grateful to have you with me. I 0:06:05.640 --> 0:06:08.520 guess let's start on the jobs data, really hot print 0:06:08.560 --> 0:06:11.720 here in the US for January. You know the logic here, 0:06:11.760 --> 0:06:14.920 I guess from the market's reaction is the FED will 0:06:14.920 --> 0:06:17.680 have to rethink about the timing of a policy pivot 0:06:18.000 --> 0:06:21.240 and then in the context of higher rates, discounting present value, 0:06:21.279 --> 0:06:25.719 future profits, tech, etcetera. Is this a think again moment 0:06:25.839 --> 0:06:29.040 or is this just a blip? Well, I guess we're 0:06:29.040 --> 0:06:31.800 back in the zone where good news is bad news. UM. 0:06:31.839 --> 0:06:34.839 I think that the market reaction was pretty predictable given 0:06:34.920 --> 0:06:37.960 the much harder than expected non farm perils. But as 0:06:38.000 --> 0:06:40.080 you pointed out in your opening segment. You know, the 0:06:40.080 --> 0:06:42.080 market has been up five weeks in a row, and 0:06:42.120 --> 0:06:45.679 the NASDACK, which is obviously highly sensitive to interest rates, 0:06:46.040 --> 0:06:47.840 UM is set to close up or I said, I 0:06:47.839 --> 0:06:50.719 should say recently just closed up over three percent for 0:06:50.880 --> 0:06:52.960 the week. So I think we probably do for a 0:06:52.960 --> 0:06:57.000 pullback after a pretty blistering hot period. And as I 0:06:57.040 --> 0:07:00.200 see it, I don't think the number today UM, as 0:07:00.200 --> 0:07:03.279 one isolated data point is enough to derail this risk 0:07:03.360 --> 0:07:04.920 on trade that we've seen to pick up the last 0:07:04.920 --> 0:07:11.160 a while. So you yourself personally do hold Apple, Amazon, Alphabet, 0:07:11.200 --> 0:07:13.000 the parent company of Google. I think you also hold 0:07:13.000 --> 0:07:17.560 Microsoft as well. Is we reflect on the week of earnings, 0:07:17.800 --> 0:07:19.880 you know, one of the takeaways that that other guests 0:07:19.880 --> 0:07:23.760 have said is that essentially this is definitive proof megacat 0:07:23.880 --> 0:07:26.280 tech is not immune to what we see in the 0:07:26.280 --> 0:07:30.360 global economy. Was that your takeaway as well? Well? I don't. 0:07:30.440 --> 0:07:32.920 I think that's been obvious for the past few months. 0:07:32.960 --> 0:07:35.280 You know, I think going into two thousand and twenty three, 0:07:35.320 --> 0:07:38.600 investors had really been pricing in the worst case scenario. 0:07:38.840 --> 0:07:41.440 For the start of this year. I think expectations were 0:07:41.480 --> 0:07:43.640 that inflation was going to keep running hot, and that 0:07:43.720 --> 0:07:45.960 was going to force the FED and other central banks 0:07:45.960 --> 0:07:48.320 to continue to jack up braids, and that we were 0:07:48.320 --> 0:07:50.280 going to be doing at some point for you know, 0:07:50.400 --> 0:07:53.440 some kind of economic um slow down, maybe even a 0:07:53.520 --> 0:07:57.800 major recession. So far, the data has not borne that out. Now. 0:07:57.800 --> 0:07:59.640 I wouldn't say that we're out of the woods yet, 0:08:00.000 --> 0:08:02.200 but I think that the worst case scenario is really 0:08:02.240 --> 0:08:04.559 no longer the base case. And I think a soft 0:08:04.680 --> 0:08:06.840 landing went from something that was kind of a pipe 0:08:06.920 --> 0:08:09.480 dream for a lot of balls to something that's increasingly 0:08:09.520 --> 0:08:12.240 being priced into the market, and when that happens, I 0:08:12.320 --> 0:08:16.200 think that that's obviously going to cycle capital back into stocks. 0:08:16.320 --> 0:08:18.280 I think a lot of managers started the year very 0:08:18.360 --> 0:08:21.720 underweight um, looking to wait and see how the FED reacted, 0:08:22.040 --> 0:08:23.840 and you get this foe mode getting the year as 0:08:23.880 --> 0:08:25.440 simple as it might sound, where they have to play 0:08:25.480 --> 0:08:27.600 catch up to make sure they don't miss their benchmarks. 0:08:27.640 --> 0:08:29.120 And I think we're starting to see that trade playing 0:08:29.120 --> 0:08:32.240 it too right. There's this idea of tough comps right 0:08:32.440 --> 0:08:36.560 or unfair comparisons between Q four two and Q four 0:08:36.600 --> 0:08:39.560 twenty one. Apple was a good example of that in 0:08:39.640 --> 0:08:42.480 their commentary around the difficulties they had in the last 0:08:42.520 --> 0:08:46.319 three months two, but also the idea that it wasn't 0:08:46.360 --> 0:08:50.040 fair to compare with the year the period a year 0:08:50.040 --> 0:08:52.960 ago because of the different product release timings. You know, 0:08:53.320 --> 0:08:55.800 how good was Q four twenty one compared to what 0:08:55.880 --> 0:08:59.760 we saw in the most recent earnings period. Well, as 0:08:59.800 --> 0:09:02.360 you pointed out, every company is different, and an Apple's case, 0:09:02.400 --> 0:09:04.920 you know, the product cycle can weigh on earnings and 0:09:04.960 --> 0:09:07.560 on revenue. But I think in general Q four two 0:09:07.600 --> 0:09:09.880 thousand twenty one, so a little over a year ago 0:09:10.440 --> 0:09:12.560 was kind of like the Goldilocks zone. You know, we 0:09:12.600 --> 0:09:15.719 had all this deferred consumer spending because people have been 0:09:15.760 --> 0:09:18.520 walked up during covid um. You had an economy that 0:09:18.600 --> 0:09:20.760 was still growing in a very fast flip, and the 0:09:20.760 --> 0:09:23.840 inflation concerns weren't quite as you know acute, I guess 0:09:23.840 --> 0:09:26.959 as they are today. And so you saw that transferred 0:09:26.960 --> 0:09:30.280 into consumer spending, you know, business spending on advertising, spending 0:09:30.280 --> 0:09:32.800 on cloud and so forth. That translates into the earnings 0:09:32.800 --> 0:09:34.880 for these companies. So I would say that looking at 0:09:35.000 --> 0:09:38.640 you know, most investors were looking at this earnings prints 0:09:38.679 --> 0:09:41.840 from these different companies hoping to avoid the worst and 0:09:42.000 --> 0:09:44.880 to be clear, like tech earnings were mediocre, and I 0:09:44.880 --> 0:09:47.160 would say kind of a mixed bag. You know, Facebook 0:09:47.160 --> 0:09:50.479 beat on earnings and revenue but had exceptionally low expectations. 0:09:50.679 --> 0:09:54.239 Apples you put it up mixed, mixed on both. But ultimately, 0:09:54.440 --> 0:09:57.000 you know, A, we're comparing it to a period that 0:09:57.760 --> 0:09:59.840 was you know, if not an lt lier, very difficult 0:10:00.040 --> 0:10:03.400 ump compared to what we saw last year. Uh and B. 0:10:03.720 --> 0:10:06.079 I think that really people are trying to look forward 0:10:06.400 --> 0:10:08.680 um to see what these companies are going to do, 0:10:08.760 --> 0:10:12.599 to try and write the ship and uh, yes, know, 0:10:12.760 --> 0:10:15.800 well how zeroed in? Then is this market on the 0:10:15.800 --> 0:10:18.160 bottom line? When we talk about what we learned from 0:10:18.160 --> 0:10:21.600 earnings about three going forward, the answer seems to be 0:10:21.640 --> 0:10:26.320 not that much other than the zeroed in on cost. Yeah, well, 0:10:26.360 --> 0:10:28.120 in a zero interest rate environment, it's a grow at 0:10:28.160 --> 0:10:30.080 all costs kind of market, right, And that's why you 0:10:30.120 --> 0:10:33.120 saw you know, unprofitable tech companies trading at sky high 0:10:33.200 --> 0:10:36.320 valuations and and that was true also for big cap 0:10:36.360 --> 0:10:39.600 tech companies. And I think we're starting to migrate from 0:10:39.640 --> 0:10:42.280 a top line market to a bottom line market. There's 0:10:42.280 --> 0:10:45.040 an increasing focus on costs, all the inputs that go 0:10:45.120 --> 0:10:48.880 into Uh, you know the financials for these companies, and 0:10:49.320 --> 0:10:51.679 as as you've pointed out, there's been some job cuts 0:10:51.679 --> 0:10:53.160 and some other trimming, and I think if you look 0:10:53.200 --> 0:10:55.920 at the earnings calls for these companies the past week 0:10:55.960 --> 0:10:58.400 and a half or so, that's something that they've really 0:10:58.480 --> 0:11:01.120 drilled down on, and I think investors are pricing that 0:11:01.200 --> 0:11:03.760 and they're thinking, Okay, well, if they can keep cutting 0:11:03.760 --> 0:11:07.480 cost even if revenue is flat, then I'm going to 0:11:07.520 --> 0:11:09.520 see bigger earnings and I want to buy into that trip. 0:11:10.800 --> 0:11:14.040 All right, Alex Taps got managing director over at nine 0:11:14.040 --> 0:11:16.240 Point Partners Digital Asset Groups. So good to have you 0:11:16.280 --> 0:11:28.560 here with us. Tech is really doing quite terribly on 0:11:28.720 --> 0:11:32.520 fundamental so well. Tech companies are ripping on their stock prices. 0:11:32.920 --> 0:11:38.840 They're having an awful earning season. It's a pretty direct 0:11:38.920 --> 0:11:41.960 and our assessment from Credit Swiss is Jonathan Golob on 0:11:42.280 --> 0:11:45.439 how text faring. Let's continue the conversation a mega week 0:11:45.720 --> 0:11:49.600 of megacap tech earnings. Just getting e commerce perspective. Rachel Typograph, 0:11:49.679 --> 0:11:53.000 CEO and founder of mick Mac, a global econ commerce 0:11:53.200 --> 0:11:57.160 enablement and analytics platform for multi channel brand. You heard 0:11:57.200 --> 0:12:00.560 what Jonathan Golob had to say, about how tech he's doing. 0:12:00.920 --> 0:12:05.360 In summary, not very well when you looked across Amazon 0:12:05.440 --> 0:12:08.400 on the e commerce side, and also as it extends 0:12:08.440 --> 0:12:11.000 to what Alphabet had to say about core search. What 0:12:11.080 --> 0:12:14.920 was your takeaway from this week, Rachel, Listen, we all 0:12:15.000 --> 0:12:17.120 knew this was going to be a tough week, but 0:12:17.240 --> 0:12:21.600 we're talking about the three biggest players in advertising. We 0:12:21.679 --> 0:12:25.320 have Google, we have Meta, we have Amazon. They each 0:12:25.360 --> 0:12:29.199 play a fundamental role in the ecosystem, but times start changing. 0:12:29.760 --> 0:12:32.560 With Google, they've had the stronghold in search, but they 0:12:32.600 --> 0:12:35.839 also sit on this amazing asset YouTube, which is an 0:12:35.840 --> 0:12:40.040 incredible place for brand awareness and engagement. You have Meta, 0:12:40.520 --> 0:12:43.960 largest player and Social. They've done a phenomenal job of 0:12:44.000 --> 0:12:48.440 building out full funnel ad solutions across Facebook and Meta. 0:12:49.080 --> 0:12:51.480 And now you have Amazon, the largest player in e 0:12:51.600 --> 0:12:54.280 com which is also another way of saying they're sitting 0:12:54.320 --> 0:12:57.640 on a treasure chest of purchase data waiting to be monetized. 0:12:58.320 --> 0:13:02.480 And what's changed in the no I'm starting instruction, Rachel, 0:13:02.480 --> 0:13:04.000 I want to I want to zero in on that 0:13:04.080 --> 0:13:08.319 because this is what surprised me about this earnings report 0:13:08.400 --> 0:13:13.760 from Amazon. Last quarter, the upside surprise was advertising, and 0:13:13.880 --> 0:13:17.720 this quarter the downside surprise was the AWS didn't come 0:13:17.760 --> 0:13:19.680 in to save the day. But we didn't really even 0:13:19.679 --> 0:13:23.120 talk about advertising, and you're basically saying that this is 0:13:23.800 --> 0:13:30.200 some unlocked still locked up potential to the commerce giant. Absolutely, 0:13:30.559 --> 0:13:34.840 AWS was an amazing way to offset margins. Advertising is 0:13:34.840 --> 0:13:38.160 an amazing way to offset margins in the losses of 0:13:38.200 --> 0:13:43.680 their traditional retail business. So Amazon's ad business grew in 0:13:43.760 --> 0:13:47.960 Q four It was now becoming a very very close 0:13:48.000 --> 0:13:51.480 player behind Meta. And the reason for this is because 0:13:51.480 --> 0:13:55.360 of the headwinds that Google and Meta have experienced changes 0:13:55.400 --> 0:14:00.040 in Apple's iOS fourteen cookie list Internet, they started to 0:14:00.120 --> 0:14:04.480 undo the way that direct response advertising fundamentally worked in 0:14:04.520 --> 0:14:09.880 platter platforms like Meta and Google. As a result, advertisers 0:14:10.440 --> 0:14:12.599 want to be able to demonstrate the r o I 0:14:12.920 --> 0:14:16.520 of their marketing investment, and Amazon is sitting on all 0:14:16.520 --> 0:14:19.120 of this purchase data to be able to demonstrate to 0:14:19.200 --> 0:14:23.560 advertisers direct attribution. And so Amazon is really writing the 0:14:23.560 --> 0:14:28.040 tail winds that are in fact Google and Metas headwards. 0:14:29.800 --> 0:14:33.040 Let's zero and a Meta. That was the surprise of 0:14:33.080 --> 0:14:37.440 the week, probably you know, a the response Metas shares 0:14:37.520 --> 0:14:41.080 jumping by the most in a decade, Thursday. But the 0:14:41.320 --> 0:14:45.560 other data point is Facebook at two billion daily users, 0:14:45.640 --> 0:14:49.240 up seventy million from a year ago. What is Meta 0:14:49.360 --> 0:14:53.880 done to make its platforms interesting again, because presumably the 0:14:53.880 --> 0:14:58.320 market reaction is the investors saying this bodes quite well 0:14:58.360 --> 0:15:02.880 for advertising revenue going forward. It Yeah. So the way 0:15:02.920 --> 0:15:06.280 that people measure the efficacy of their advertising dollars is 0:15:06.280 --> 0:15:10.800 through this mythical model called media mixed modeling, and what 0:15:10.960 --> 0:15:15.120 it requires is that brands need full funnel marketing in 0:15:15.240 --> 0:15:17.880 order for the math equation to work. They need to 0:15:17.920 --> 0:15:21.480 have upper funnel media that's letting people know, hey, I 0:15:21.520 --> 0:15:25.240 exist in the world, mid funnel media that's encouraging them 0:15:25.280 --> 0:15:28.160 to buy, and then bottom of the funnel media that's 0:15:28.520 --> 0:15:31.320 pushing them towards the path to purchase. Bottom of the 0:15:31.320 --> 0:15:35.240 funnel media think Amazon, think Walmart, think Instacart, all of 0:15:35.320 --> 0:15:40.239 retail media. It's typically expensive. Upper funnel media is more affordable. 0:15:41.000 --> 0:15:45.080 Meta remains to to be a really strong platform for 0:15:45.200 --> 0:15:49.080 upper funnel media. Mick mac We work across eight hundreds 0:15:49.080 --> 0:15:53.080 of the biggest brands in the world, and we actually 0:15:53.120 --> 0:15:57.840 saw paid traffic within Meta increase by eight. We saw 0:15:58.000 --> 0:16:01.960 the client in Google by seven and what that demonstrates 0:16:02.040 --> 0:16:06.120 is that advertisers still seeing Meta as an upper funnel channel. 0:16:06.600 --> 0:16:09.360 And what's happening is that people are moving dollars out 0:16:09.360 --> 0:16:14.040 of Google because primarily that's search, into Amazon because Amazon 0:16:14.200 --> 0:16:19.160 is the new search. Hey, Rachel inaggregate, what did we 0:16:19.280 --> 0:16:22.440 learn about the health of the advertising market for social 0:16:22.440 --> 0:16:27.160 media companies this week? We're learning that people are continuing 0:16:27.200 --> 0:16:32.480 to spend. Is it the gold rush of no? But 0:16:32.560 --> 0:16:36.320 are billions of dollars still moving into platforms like Meta 0:16:36.480 --> 0:16:41.760 and Pinterest and TikTok. Absolutely, and TikTok continues to be 0:16:41.800 --> 0:16:46.480 a platform that everyone should be watching. We saw massive 0:16:46.520 --> 0:16:50.680 amounts of dollars again shift away from platforms like YouTube 0:16:50.720 --> 0:16:56.160 into TikTok. In two, Rachel, I finally want to go 0:16:56.200 --> 0:16:59.440 to Twitter. Since Twitter has gone private, there's less fund 0:16:59.520 --> 0:17:02.560 to be had. That's not true at all. You can 0:17:02.600 --> 0:17:04.640 just go to Elon Musk Twitter, which we did today, 0:17:04.640 --> 0:17:08.320 and Elon Musk is talking about sharing revenues from ads 0:17:08.359 --> 0:17:12.000 with the creators. And I'm interesting your take on this 0:17:12.320 --> 0:17:16.280 about Twitter's pivot to a created driven platform. Do you 0:17:16.280 --> 0:17:20.560 think he can do that? Listen, Ellen is trying everything 0:17:20.640 --> 0:17:24.640 right now to keep dollars within the platform. At MICMAC, 0:17:24.720 --> 0:17:30.000 we've essentially seen a hundred decline in paid media traffic 0:17:30.080 --> 0:17:34.560 and Twitter since he took ownership. So with creators, it's 0:17:34.600 --> 0:17:38.600 actually an interesting play YouTube did a very similar move 0:17:38.880 --> 0:17:44.080 where they share the ad revenue with creators. As a result, 0:17:44.480 --> 0:17:49.159 many many influencers have built six figure businesses on YouTube 0:17:49.520 --> 0:17:52.600 and it's encourage them to move away from platforms like 0:17:52.640 --> 0:17:56.200 Instagram into YouTube for content creation. So I do think 0:17:56.200 --> 0:17:59.000 there's an opportunity for Twitter to engage with creators in 0:17:59.040 --> 0:18:02.200 this way. But it's not novel. It's a proven playbook 0:18:02.280 --> 0:18:07.280 that works in environments like YouTube. Alright, Rachel Typograph, founder 0:18:07.320 --> 0:18:09.560 and CEO of MCMAC, thank you so much for joining 0:18:09.680 --> 0:18:14.600 us this Friday. Now, Rivian is developing an electric bike 0:18:15.119 --> 0:18:19.960 that's potentially expanding the ev maker's product lineup. This is 0:18:19.960 --> 0:18:23.240 something I was reporting earlier today for Bloomberg. CEO R J. 0:18:23.400 --> 0:18:26.680 Scarings disclosed the e bike effort Friday at a company 0:18:26.720 --> 0:18:29.960 wide meeting all hands. That's according to my sources, a 0:18:30.000 --> 0:18:33.720 small group of engineers is already working on this project. 0:18:34.160 --> 0:18:36.960 Are J. Scarings told his staff the company owns patterns 0:18:36.960 --> 0:18:42.640 for electric bicycle components and designs now coming up. Derivatives 0:18:42.680 --> 0:18:46.240 traders sent back to manual processing thanks to a cyber 0:18:46.280 --> 0:18:49.040 attack earlier this week. We have the details on that 0:18:49.240 --> 0:19:07.160 coming up next. This is Bloomberg. A cyber attack earlier 0:19:07.200 --> 0:19:11.640 this week sent derivatives trading back to the nighties. Bear 0:19:11.680 --> 0:19:14.800 with us joining us for more. Bloomberg's Katherine Doctor who 0:19:14.800 --> 0:19:17.520 had that scoop, explained the basics of this story to 0:19:17.520 --> 0:19:21.399 meet Catherine. So just this week, Ion Trading, it's a 0:19:21.440 --> 0:19:26.280 software firm that is the key to many markets across 0:19:26.320 --> 0:19:30.960 the globe, but this specific software was for derivatives trading, 0:19:31.440 --> 0:19:35.280 and earlier it started in Europe. Some of the systems 0:19:35.520 --> 0:19:38.960 were down and it came out that there was a 0:19:39.000 --> 0:19:44.720 cyber attack, and ultimately that meant that derivatives trading was 0:19:45.280 --> 0:19:49.199 up ended across the world. And it's really been a 0:19:49.280 --> 0:19:53.840 disruption and this target which is ongoing. The systems are 0:19:53.920 --> 0:19:57.880 still down across the globe and only just now either 0:19:57.960 --> 0:20:01.399 coming back online or moving elsewhere are UM. There's been 0:20:01.440 --> 0:20:06.400 a ripple effect and there has also been UM many 0:20:06.480 --> 0:20:10.679 developments even even currently UM we're we're calling sources because 0:20:11.160 --> 0:20:17.240 it has come come out on the UM cyber attack. 0:20:17.680 --> 0:20:23.439 The the actual attacking website. UM that this uh, this 0:20:23.600 --> 0:20:26.880 software is now not on their target lift, so we 0:20:27.040 --> 0:20:31.879 might actually see some developments and some resolutions soon. Um. 0:20:31.920 --> 0:20:35.280 This is a story, Catherine, of technology gone wrong, just 0:20:35.400 --> 0:20:38.639 terrific repulsing from you and the team. My understanding is 0:20:38.680 --> 0:20:42.080 that we've had responses from the US Treasury Department and 0:20:42.160 --> 0:20:46.840 also some banks. What are they saying, Yes, so today, UM, 0:20:46.920 --> 0:20:51.080 we put out some reporting on the banks that are 0:20:51.119 --> 0:20:54.320 either directly impacted, and what they are saying is that 0:20:54.359 --> 0:20:57.680 they are managing their trade, some of them manually, so 0:20:57.720 --> 0:21:01.119 they're going back to UH. We do refer to the 0:21:01.200 --> 0:21:06.760 nineteen eighties when this world of derivatives trading was more 0:21:06.840 --> 0:21:12.320 manual and less automated, less dependent on computers and electronic 0:21:12.359 --> 0:21:16.240 trading um than it is today. So they are trying 0:21:16.280 --> 0:21:19.520 to resolve this issue. They are manually reporting so that 0:21:19.560 --> 0:21:23.600 they can abide by their regulatory guidance, and the regulators 0:21:23.640 --> 0:21:27.520 are are giving some flexibility as well. They've extended some 0:21:27.640 --> 0:21:31.680 deadlines and some of their reporting requirements that are due 0:21:31.800 --> 0:21:34.439 at the end of this week have been extended. It 0:21:34.440 --> 0:21:36.199 feels like this is just the start of this one. 0:21:36.240 --> 0:21:48.480 Bloomberg's Katherine Dougherty, Thank you very much. Welcome back to 0:21:48.480 --> 0:21:52.160 Bloomberg Technology. I'm Ed Ludlow in San Francisco. Now, Google 0:21:52.320 --> 0:21:56.520 has invested almost four million in the AI startup and Thropic, 0:21:56.560 --> 0:21:59.520 which is testing a rival to open a eyes chat 0:21:59.560 --> 0:22:02.800 GPS that according to a Bloomberg source, the deal gives 0:22:02.840 --> 0:22:06.920 Google a stake in Anthropic, but it doesn't require Anthropic 0:22:07.160 --> 0:22:11.240 to spend any of the funds buying cloud services from Google. 0:22:11.440 --> 0:22:14.639 It's been a long week of AI headlines and I 0:22:14.640 --> 0:22:17.040 want to break them all down now with Saga Shah, 0:22:17.040 --> 0:22:20.800 head of Responsible AI at fract Or, a global AI 0:22:20.880 --> 0:22:26.240 provider to fortune companies across finance, healthcare, and retail. Let's 0:22:26.240 --> 0:22:29.600 start with that and Google, Sago, you you operate in 0:22:29.640 --> 0:22:31.639 the world of AI. I know that you're following the 0:22:31.680 --> 0:22:36.840 headlines and technological developments closely. You know the executives over 0:22:37.080 --> 0:22:40.200 Alphabet and Google were ready for the questions when you're 0:22:40.240 --> 0:22:42.600 going to pull back the curtain. But what did you, 0:22:42.720 --> 0:22:47.080 as an industry participant, actually learned this week about Google's 0:22:47.320 --> 0:22:52.080 latest in artificial intelligence? Shan, I think this is about 0:22:52.160 --> 0:22:56.719 anything big phonol of us don't affect as we can understand. 0:22:57.600 --> 0:23:02.280 Definitely you know doc after Google's learnings report, for sure, 0:23:02.359 --> 0:23:05.680 but that also indicates a lot about the macro about environment, 0:23:06.240 --> 0:23:09.960 not just about chagpt right, the digital business going down, 0:23:10.600 --> 0:23:13.560 not not growing as fast as it was last two 0:23:13.640 --> 0:23:15.720 years like that sort of sort of a micro trend. 0:23:16.560 --> 0:23:20.439 But the most interesting part has been UH agupty and 0:23:20.840 --> 0:23:24.720 this investment and Tropic as well as the internal arms 0:23:24.720 --> 0:23:28.080 of Google all coming together, which was a great thing 0:23:28.119 --> 0:23:32.560 to see. Uh. For example, the internal Lambda which is 0:23:32.600 --> 0:23:36.399 the language models UM. Right. Uh. They are now using 0:23:36.440 --> 0:23:41.680 that UM for the apprentice pat internally to test. They've 0:23:41.680 --> 0:23:44.800 asked all their employees to start using it and sending feedback. Right, 0:23:44.880 --> 0:23:49.720 that's an interesting move. The other deep mind UM which 0:23:49.760 --> 0:23:52.560 also has you know the almost the best day algorithm 0:23:52.560 --> 0:23:55.200 at two thousands ten right, That is a London based 0:23:55.240 --> 0:23:57.800 company that they acquired, and it's sort of become the 0:23:58.200 --> 0:24:00.720