Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. This is Bloomberg Technology. I'm Ed Ludlow in
Speaker 1: San Francisco in for Emily Chang coming up in the
Speaker 1: next hour. Second half momentum is picking up steam both
Speaker 1: the SMP five and has that one, posting their longest
Speaker 1: streak of weekly gains since November, but earnings have shown
Speaker 1: a mixed outlook for the rest of the year. Is
Speaker 1: this tech rally going to last? Last? Walmart Home Depot
Speaker 1: target Low's next week is a big one for retailers
Speaker 1: reporting earnings. Consumer sentiment has been rough the past few months,
Speaker 1: but new data suggests we're turning a corner. Will Chat
Speaker 1: all Things eat commerce and competition for electric semitrucks is
Speaker 1: heating up after the Senate past a roughly three d
Speaker 1: and forty seven billion dollar initiative to boost the transition
Speaker 1: to clean energy and cut emissions. Right now, it's pretty
Speaker 1: much Tesla versus Nikola, but tax incentives could your more
Speaker 1: players into the race. But first, the Federal Bureau of
Speaker 1: Investigation sees classified records, some marked top secret from former
Speaker 1: President Donald Trump's Moral Lago home. That's according to a
Speaker 1: copy of the warrant seen by Bloomberg. Wendy Benjaminson is
Speaker 1: our deputy managing editor for Bloomberg News over in Washington. Wendy,
Speaker 1: thanks for joining us this Friday. Let's stick to the
Speaker 1: basics here. What did we learn from the unsealed documents? Well,
Speaker 1: we learned not as much as one would hope. We
Speaker 1: learned that they did get about two dozen boxes of
Speaker 1: documents UM from from the Moral Lagoa state. We know
Speaker 1: that some of them were, as you said, top secret
Speaker 1: or even higher UM sensitive compartment and information, which means
Speaker 1: that it's only supposed to be in a closed room,
Speaker 1: shield off from cell phones and all sorts of other
Speaker 1: UM interference, and those were, you know, sitting around mar
Speaker 1: Lago UM. We also know that they were searching for
Speaker 1: evidence of violations of three crimes, including a segment of
Speaker 1: the Spionage Act. I'm not saying Donald Trump is going
Speaker 1: to be charged with espionage, but there's a subsection of
Speaker 1: that which relates to mishandling class by documents. We don't
Speaker 1: know that there is evidence of that. We just know
Speaker 1: that they got these documents. Wendy what is the concern here?
Speaker 1: What did the d J and investigators looking at looking for? Well,
Speaker 1: this all started when the National Archives, which keeps presidential
Speaker 1: records and then gives them to a president's library. Um,
Speaker 1: they have been working with Trump to representatives throughout. They
Speaker 1: got the transfer of fifteen boxes in January of this year,
Speaker 1: and they began looking through them and realized that there
Speaker 1: was classified national security information. We don't know what exactly
Speaker 1: that means yet, and UM that's prompted the Archives to
Speaker 1: reach out to the Justice Department and say, hey, you
Speaker 1: may want to get these backs. So that's what this
Speaker 1: action was. We don't know if it's going to relate
Speaker 1: to any of the cases against Donald Trump. It depends
Speaker 1: on I think, when we know what what the documents
Speaker 1: actually show. But um, you can be sure that the
Speaker 1: Justice Department will be coming through those this weekend. Wendy,
Speaker 1: It's always the question. But what happens next? I think
Speaker 1: we don't know as the as the answer. I'm afraid
Speaker 1: we know that they will go through these and try
Speaker 1: to figure out what what was in here, what crimes
Speaker 1: might be violated, and then they'll decide whether to charge
Speaker 1: or start talking to the former president, right, but we
Speaker 1: continue to follow your team's covery, Wendy over the weekend.
Speaker 1: That's Bloomberg's Wendy Benjaminson in d C. Thank you. That's
Speaker 1: gonna check on when moth Kits ended the week with
Speaker 1: Bloomberg's Katie Greifeld out in New York. Katie Tech ending
Speaker 1: the week strong, pretty strong. It was a big risk
Speaker 1: on day. As you can see from the board behind me,
Speaker 1: this isn't it. This is single stocks. But if you
Speaker 1: look at the indexes, for example, you saw the SMP
Speaker 1: five hundred finished higher. You saw the NASAC one hundred
Speaker 1: finished higher as well. There we go. You did see
Speaker 1: bonds rally a little bit, but just five basis points
Speaker 1: are so ad I'm gonna really just continue to fold
Speaker 1: that into this risk on mood. You saw Bitcoin managed
Speaker 1: to speak a little bit of a game. Of course,
Speaker 1: the board has flipped to the after hours trade, but
Speaker 1: Bitcoin higher. You can see it is twenty four thous
Speaker 1: dollars a coin. We haven't been at those levels in
Speaker 1: a little bit, and this was again a big finish
Speaker 1: to what's been a really big week. If you look
Speaker 1: at the NASAC one hundred for example, this was the
Speaker 1: fourth straight week of games. If you look back at
Speaker 1: this chart, you see a lot of red on this screen.
Speaker 1: That is the longest consecutive weekly rally since all the
Speaker 1: way back in November one. So I don't know, maybe
Speaker 1: we're at the bowl market, but in any case, it's
Speaker 1: been quite a run, especially for those tech socks. Now
Speaker 1: let's look at some of those individual names. As you
Speaker 1: can see, pinto a duel up top lower today. That's,
Speaker 1: of course after news this morning about China delisting five
Speaker 1: of its largest state owned enterprises state owned companies rather
Speaker 1: from US exchanges that weight on ad R s. But
Speaker 1: you go down the list again very strong. You had
Speaker 1: Chips coming back. You had Peloton surging on a mark
Speaker 1: German scoop of course that they're going to cut about
Speaker 1: eight hundred jobs, are going to shut stores, They're going
Speaker 1: to raise the cost of some of their products. Just
Speaker 1: part of this big overhaul that we're seeing at that company.
Speaker 1: In Tesla to rallying almost five percent, maybe part of
Speaker 1: the broader risk on mood in the market. Maybe because
Speaker 1: you're getting married, Ed will remained to continue to watch
Speaker 1: that story. But again a big move for Tesla. Thank Uktie.
Speaker 1: That's one m and a report that I'm able to
Speaker 1: confirm or live on there. Blue Kenny grow felt out
Speaker 1: in New York. Thank you. Does you point out Peloton
Speaker 1: a big move, but Friday Tech broadly outperforming in equity markets.
Speaker 1: I'm absolutely delighted to bringing Mel like Messino, CEO of
Speaker 1: WE Family Offices, which has fifteen billion dollars in assets
Speaker 1: under management. Mel, it's good to see you again. What's
Speaker 1: your takeaway, Thank you? What's your takeaway from this week
Speaker 1: in the markets? Well, I think that it's been a
Speaker 1: great week, and actually it's been a great month for protech.
Speaker 1: And I think that it has to do with the
Speaker 1: fact that people are starting to believe that we're going
Speaker 1: to get inflation under control. Inflation is what will kill
Speaker 1: the earnings of tech companies, and and so I think
Speaker 1: that the mood is positive because they see that inflation,
Speaker 1: inflation is gonna it's going to come down. We're kind
Speaker 1: of breathing a side of relief out here in San
Speaker 1: Francisco at the Bloomberg Bureau. Now that the kind of
Speaker 1: the bulk of earning season is over. If you were
Speaker 1: to draw up your scorecard from earnings, particularly the mega caps,
Speaker 1: what is your takeaway from this earning season, well, I
Speaker 1: think it's been mixed, but in general, h a lot
Speaker 1: of the companies exceeded expectations, both on the revenue side
Speaker 1: and on the on the earning side. And I think
Speaker 1: the name of the game is not going to be
Speaker 1: a revenue. The name of the game is going to
Speaker 1: be earnings and what happens with earnings and earnings always
Speaker 1: look backward. You know, you're you're talking about the last quarter.
Speaker 1: I think the big question with earnings is what's going
Speaker 1: to happen in the next two quarters. And that's why
Speaker 1: I think that good news about getting control over inflation
Speaker 1: is what's causing this rally. You know that historically Tech
Speaker 1: in the first half of the year not not the
Speaker 1: best play, but then does rebound and we've kind of
Speaker 1: seen that in the third quarter. Do you expect Tech
Speaker 1: to continue to have momentum in the second half of
Speaker 1: two It's hard for me to say it's that gonna
Speaker 1: have two but I definitely see it into and what
Speaker 1: where are those opportunities what will drive that? Yeah, I
Speaker 1: think that tech is going to be the way to
Speaker 1: deal with inflation is a productivity. What's going to help
Speaker 1: us with productivity is tech and you have all the
Speaker 1: corporate spending money on their capits on tech, and so
Speaker 1: I I think that we're gonna definitely see tech continue
Speaker 1: to to improve. Now the valuation has got a little
Speaker 1: bit out of controllable for and so I think that um,
Speaker 1: you know, interest rates, um, interest rates going up and
Speaker 1: the discount rate that's implied in that in terms of
Speaker 1: earnings as actually it's what's made evaluations come down well
Speaker 1: now like I'm seeing a CEEO we family office. Is
Speaker 1: great to have you late on a Friday, happy weekend.
Speaker 1: We'll see you again soon shares. The online secondhand good
Speaker 1: marketplace Poshmark dropped eight percent on Thursday, the biggest decline
Speaker 1: since May. The company gave a weaker than hope sales
Speaker 1: forecast for the third quarter as growth has been held
Speaker 1: back by higher inflation and a changing global economy. But
Speaker 1: there were some bright spots, as user engagement on Poshmark
Speaker 1: jumped seventy percent year on year, joining US Sprage or
Speaker 1: Dan and Cars and I on the future is Poshmark
Speaker 1: CEO managed changers, so managed you know, the market's clearly
Speaker 1: focusing on this this sales outlook. What were the factors
Speaker 1: behind that around that that pressure on sales growth. Well,
Speaker 1: we if you look at our Q two results, we
Speaker 1: started we beat the guidance on both revenue and UH
Speaker 1: and sort of came to the midpoint on the earnings.
Speaker 1: I think when we look into the future we look
Speaker 1: at Q three, one of the good things that's happening
Speaker 1: is that we are starting to see our growth and
Speaker 1: our rhythm and kidens be more like twenty nineteen, which
Speaker 1: is pre COVID, which is a healthy to for poshmarkers.
Speaker 1: As people are going out participate in participating in events,
Speaker 1: going to weddings, you know, going back to school. It's
Speaker 1: a great thing because you need fashion, you need to
Speaker 1: rotate your closet, and people are going back to the
Speaker 1: closet and then rotating it. So that's a good thing.
Speaker 1: But we're being cautious. I mean it's early. We're sort
Speaker 1: of want to observe it for a few months, and
Speaker 1: that's reflected in our guidance. I mean, it's remind us
Speaker 1: how poshmark works. Essentially, you're pairing sellers of second handkerds
Speaker 1: with buyers and second handkerds. Right, But forward me a
Speaker 1: little bit about the profile of of user on the platform,
Speaker 1: the types of folks that are buying goods there. Yeah,
Speaker 1: poshmark is is unique in the sense that we allow
Speaker 1: you to turn your closet into a shop. So it
Speaker 1: really appeals to millions of people out there who have
Speaker 1: a closet. I think almost everyone has a closet has
Speaker 1: some excess stuff to sell, so we really make it
Speaker 1: very easy to take their closet and start selling it
Speaker 1: if we provide everything built into the platform is shipping,
Speaker 1: payment processing, etcetera. And the beautiful thing is the item
Speaker 1: goes straight from the seller to the buyer, so we
Speaker 1: hold no inventory and that allows us to have an
Speaker 1: extremely dynamic assortment, which has been a strong point, particularly
Speaker 1: in this changing sense of fashion going into the pandemic,
Speaker 1: coming out of it, going into from active where to work,
Speaker 1: where to back to school? Where? Uh? And then on
Speaker 1: the flip side, we have people who are shopping these
Speaker 1: closes both for getting values and bargains, but also getting
Speaker 1: access to wide assortment. Everything you want, we believe within
Speaker 1: somebody's closets, so we put them all together and that's
Speaker 1: past manage. I want to get into the psychology of
Speaker 1: the consumer, that what what kind of lens. Do you
Speaker 1: get into the health of the consumer. Are their users
Speaker 1: shopping on your platform because they're feeling the pain of inflation,
Speaker 1: so they're looking to the secondhand goods market rather than
Speaker 1: buying off the high street, you know, off new products.
Speaker 1: What are the kind of macro characteristics that you're seeing
Speaker 1: in your in your users. First thing is consumers are
Speaker 1: looking for value. Consumers are always looking for value, but
Speaker 1: in these inflationary times, they're especially looking for value. Number
Speaker 1: two is consumers preference and dastes are changing and a
Speaker 1: lot of times traditional retail is not able to keep up.
Speaker 1: And what you're seeing with a lot of first supply
Speaker 1: shade famine and now sort of retail store lout is
Speaker 1: this mismatch of computer supply and demand, consumer supply and demand.
Speaker 1: And what we see with posh market is this ability
Speaker 1: to dynamically match from the closets from people this supply
Speaker 1: and demand. So that's the second thing is people looking
Speaker 1: for latest trendy things and that trends are changing, but
Speaker 1: they flips of the posh markets that consumers can also
Speaker 1: make money and as people are sort of looking for
Speaker 1: extra sources of income, wash market provide that as well.
Speaker 1: Told me about Poshmark parties. What is a Poshmark party?
Speaker 1: So two things. We have virtual parties that are happening
Speaker 1: online where people are selling together, will have a theme,
Speaker 1: and thousands, sometimes hundreds of thousands of pop will come together.
Speaker 1: In fact, our evening parties are so big that I've
Speaker 1: seen parties in the last few weeks that have hit
Speaker 1: ten million items being listed in a single party from
Speaker 1: across the country. So they are really a group selling
Speaker 1: event where people are coming buying and selling together, and
Speaker 1: then we take them physical. So we hosted a party
Speaker 1: in l A a couple of weeks back, and next
Speaker 1: week we have one in New York City, and there
Speaker 1: we have hundreds of sellers who come together. They connect
Speaker 1: with each other, they help each other, they learn from
Speaker 1: each other, get inspired. And we also have new sellers
Speaker 1: coming in where we help them activate their closets and
Speaker 1: people who junge Washmark and learn there's something called closet consultation.
Speaker 1: They can see how to run their online business faster.
Speaker 1: So they become sort of a small manifesto of these
Speaker 1: virtual events. Bloom Bag Intelligence analysts Tam Goyle is also
Speaker 1: excited about poshmarks potential for growth outside of North America
Speaker 1: international markets. Can you update us on the plans there? Yeah.
Speaker 1: Are Our Canadian business just hit four million users, we
Speaker 1: sort of celebrated three year mark and has more than
Speaker 1: a billion dollars of invntory lists, so that market is
Speaker 1: coming along. And we launched in Australia India during the
Speaker 1: pandemic and as we are coming out of it, we
Speaker 1: are seeing the engagement and physical events starting to build
Speaker 1: the communities there. So we believe the para dime of
Speaker 1: really finding the future of fashion inside your closet is
Speaker 1: well aligned, not just in US and Canada, with other
Speaker 1: countries as well. All right, well, we'll look for updates
Speaker 1: on those new markets as they come online. Posh Mark, CEO,
Speaker 1: Managed Chandra, thank you very much for joining us the
Speaker 1: update on the second hand goods market. Meanwhile, delivery startup
Speaker 1: go Path is tapping a new CFO to help it
Speaker 1: become profitable. Panera Bread's CFO Ted Steadham will join the
Speaker 1: same role for Gopath. According to sources, stead and work
Speaker 1: that we work as global head of business Planning and
Speaker 1: Financial Operations. He also served as CFO at Young Brands China.
Speaker 1: Business coming up, Europe's drought will further raise energy prices
Speaker 1: and disrupt trade. As the Rhine rivers water levels did
Speaker 1: below a crucial mark. This is bloom. There's a guess
Speaker 1: storage itself, it's not sufficient. We are facing a crisis
Speaker 1: at the moment. It's been produced by the cush off
Speaker 1: of Russian gas. But it tells us yet again just
Speaker 1: how volatile and uncertain fossil fuel prices are. Guess press
Speaker 1: will remain very high and it also may result in
Speaker 1: some disruption. We cannot magically get sort of tens of
Speaker 1: hundreds of gigger waters of renewable energy before winter. So
Speaker 1: it is a matter of saving energy, it's a matter
Speaker 1: of securing sources. Spec should be more obligatory measures to
Speaker 1: reduce to reduce consumption. The first step obviously is to
Speaker 1: become independent Russian supplies, which in the end can only
Speaker 1: be managed by additional imports, mostly llergy. Here today we've
Speaker 1: seen the the reduction in the guest consumption by about
Speaker 1: ten percent in the EU. I think the effect of
Speaker 1: this crisis will be that Europe will be further down
Speaker 1: the path to emissions reduction. So it would otherwise be
Speaker 1: that some of the commentary on the energy Crunch Europe
Speaker 1: is currently enduring and things don't look much better on
Speaker 1: the trade front. Germany's Rhine River has dropped to a
Speaker 1: level that could disrupt the transport of fuel throughout Europe.
Speaker 1: The effects could ripple through the continent for months. Bloomberg's
Speaker 1: Guy Johnson explains as of this afternoon here in Europe,
Speaker 1: the Rhine River has become impossible at the critical waypoint
Speaker 1: of Cow just to the west of Frankfurt. This is
Speaker 1: something that we've been anticipating for really quite some time.
Speaker 1: You can see the water levels as they've been dropping
Speaker 1: over the last few months. They have now dropped through
Speaker 1: the critical forty centimeter points at Cab. That's just under
Speaker 1: sixteen inches. That means effectively the river is no longer
Speaker 1: navigable for large barges. Now, this is crucial for Europe,
Speaker 1: not just for Germany, but for the whole of Europe.
Speaker 1: Let me show you what the map looks like here.
Speaker 1: So you've got ratted Rotterdam up here on the coast.
Speaker 1: The river Rind runs through Germany through Cologne just to
Speaker 1: the west of Frankfurt there's Cab and then runs through
Speaker 1: the rest of Germany down towards Switzerland. This is a
Speaker 1: hugely important waterway. It transports all kinds of things up
Speaker 1: and down for Germany and for the whole of Europe.
Speaker 1: Think about coal, think about gas, think about diesel. All
Speaker 1: of these things go up and down this river. Big
Speaker 1: chemicals companies are to the east of Cow as well,
Speaker 1: they will now be restricted. Big power plants that that
Speaker 1: require cold to be floated up the river on barges
Speaker 1: will now see those supplies restricted. This comes at a
Speaker 1: time when Europe is already facing a massive energy crisis.
Speaker 1: The fact that we now have drought in Europe that
Speaker 1: is lowering these river levels is only going to exacerbate
Speaker 1: that problem and pour further pressure on politicians to do
Speaker 1: more to deal with this economic crisis that is looming
Speaker 1: and getting worse and worse as we head towards winter
Speaker 1: here in Europe. So, as of today, the Rhine is
Speaker 1: now closed at Cow and it looked like and it
Speaker 1: looks like it's not going to rain for a while.
Speaker 1: Thanks to Boomberg's Guy Johnson in London to that update
Speaker 1: on the Rhine rivers in other stories to watch, Three
Speaker 1: of China's biggest state owned companies planned to delist from
Speaker 1: US exchanges that's fall out from a dispute over whether
Speaker 1: American regulators should be allowed to inspect audits of Chinese
Speaker 1: businesses who shares are listed in the US. The three
Speaker 1: companies that will delist our China Life, Petro China, and
Speaker 1: Cinepec Massaoshi Sun has now lost more than four billion
Speaker 1: dollars on a series of ideals he set up at
Speaker 1: soft Bank to boost his compensation. The Japanese billionaire took
Speaker 1: the unusual step of establishing personal stakes in a series
Speaker 1: of soft Bank ventures in recent years. That was a
Speaker 1: mixing of company and executive interests that drew the ire
Speaker 1: of investors. And Amazon, Oracle, and other data providers were
Speaker 1: pressed by a group of lawmakers about how they sell
Speaker 1: mobile phone location data. The companies offered assurances that the
Speaker 1: information could not be used to track women seeking abortion services.
Speaker 1: The Supreme Court's decision to overturn women's federal right to
Speaker 1: abortion has sparks concerns that location data can be used
Speaker 1: by law enforcement in states that have outlawed or restricted
Speaker 1: abortion to prosecute people who seek reproductive care. I'm going
Speaker 1: to bring you some breaking news and headlines crossing the
Speaker 1: Bloomberg terminal. The House has enough votes to send a
Speaker 1: roughly four hundred thirty seven billion dollar TACKS, climate, and
Speaker 1: drug price package to President Biden's desk. The inflation reduction
Speaker 1: bill is designed to boost the US transition to clean
Speaker 1: energy and alleviate costs. Which had more about the bill's
Speaker 1: impact on electric vehicles later this hour. This is Boomberg Technology.
Speaker 1: I am Ed Lovelow in San Francisco for more on
Speaker 1: Peloton's news. Let's bring in Bloomberg's Jackie Deavlos, who's out
Speaker 1: in d C. Jackie, what do we learn from Peloton
Speaker 1: on Friday? Absolutely well, for customers, you know, prices are
Speaker 1: going to be hyked up, and it's kind of a
Speaker 1: reversal from what we saw in April when we saw
Speaker 1: price cut for the bike and the treadmill UM. So
Speaker 1: if you were looking for a deal, you may have
Speaker 1: missed out on that one. But it's really part of
Speaker 1: this broader plan to shift more of its costs from
Speaker 1: the hardware side of the business to higher margin memberships.
Speaker 1: And you know, layoffs are expected to impact around eight
Speaker 1: hundred people, mostly Constant traded, and you know the customer
Speaker 1: service and distribution and UM delivery type functions and this
Speaker 1: is a really bigger picture part of this broader strategy
Speaker 1: to overhaul the cost structure and redirect more of its
Speaker 1: capital to research and development. You know the memo to
Speaker 1: employees that Barry McCarthy uh sent earlier today, you know,
Speaker 1: he outlines this rationale that you know, you need to
Speaker 1: spur innovation to spur revenue growth, and that's going to
Speaker 1: be key, especially when they've been burning so much capital.
Speaker 1: Barry McCarthy, the Peloton CEO, said in this internal memo
Speaker 1: that cash is oxygen and oxygen is life. And clearly,
Speaker 1: you know they're worried about that. They're operating health if
Speaker 1: you will. But what's the why the context here, Jackie?
Speaker 1: They did layoffs in February as well. Is it that
Speaker 1: the demand for the product has disappeared, that people just
Speaker 1: simply aren't using Peloton hardware anymore? You know, I think
Speaker 1: it's a company aation of things. The economic outlook has
Speaker 1: certainly shifted since the beginning of the year. And when
Speaker 1: he joined earlier in February, you know, it was already
Speaker 1: undergoing this major turnaround plan, but it wasn't really sure
Speaker 1: where some of the pain points were. Was it demand,
Speaker 1: was it just kind of this broader grim outlook. And
Speaker 1: what we're seeing now is that you know, they signaled
Speaker 1: they expect demand to soften going forward, and when consumer
Speaker 1: spend is really on the line, a luxury premium product
Speaker 1: like Peloton is more vulnerable, and you know, so future
Speaker 1: growth is somewhat hanging in the phrase, especially um. You
Speaker 1: know they've signaled that sales aren't going to be as
Speaker 1: strong now when it comes to saving money. This is
Speaker 1: where uh, you've seen somewhat of a vacillating in strategy.
Speaker 1: You know, when they upped that membership cost earlier in
Speaker 1: in April, UM, that was signaling that, look, this is somewhere.
Speaker 1: This is an area that they want to tap going forward.
Speaker 1: It's higher margin, it's recurring, predictable revenue. So you're definitely
Speaker 1: going to start to see them lean into that as
Speaker 1: the demand side of the picture becomes more uncertain. Well,
Speaker 1: investors certainly like what they saw the stock jumping almost
Speaker 1: fourteen percent Bloomberg's Jackie Devil loss. How in d C,
Speaker 1: thank you have a great weekend. Let's turn to retail earnings.
Speaker 1: Lots coming up next week from the likes of Walmart
Speaker 1: and Macy's. So let's take a little look ahead and
Speaker 1: talk about what to expect with Nicky Baird, VP of
Speaker 1: strategy for the global retail technology company app Toss, and
Speaker 1: my good mate Bloomberg Zone Brending Case out in Dallas
Speaker 1: and Brendan, I'm gonna start with you. You You know this
Speaker 1: is the week for you, right, You're going to be
Speaker 1: at your desk. I know you're going to be just
Speaker 1: so much coffee, so much coffee, bracing for what's to come.
Speaker 1: But actually we already have a good sense of what's come,
Speaker 1: don't we. That's exactly right. It is gonna be a
Speaker 1: big week, but it's going to be a week that's
Speaker 1: sort of a sequel to an announcement that Walmart made
Speaker 1: a few weeks ago in which it Warren that as
Speaker 1: profits were going to be down more than expected. And
Speaker 1: the reason for that is that inflation is just hitting
Speaker 1: people really hard and it's leaving them with less money
Speaker 1: to spend, especially on general merchandise as opposed to groceries. Uh.
Speaker 1: And I think what we'll what we'll be looking for
Speaker 1: next week, We'll be looking for any kind of clues
Speaker 1: or commentary they offer about how they see the state
Speaker 1: of the consumer and and and and how people are
Speaker 1: going to be able to hold up or not as
Speaker 1: the rest of the year goes on. So we've already
Speaker 1: heard from Amazon, the big sort of e commerce giant. Actually,
Speaker 1: earlier in the year, we spoke to Annie Jassey and
Speaker 1: this was his kind of assessment of the inflation story.
Speaker 1: Have a listened. We thought that inflation would started to
Speaker 1: attenuate Ino, and with the war in Ukraine, it just
Speaker 1: went the other way and has significantly accelerated. So the
Speaker 1: cost of trucking and line hol ocean and air and
Speaker 1: fuel has just substantially gone up. And I think that
Speaker 1: will all tenuate at some point. No one no is
Speaker 1: how long that will take. So Nikki I played that
Speaker 1: sound bite which was from June, the first week of June,
Speaker 1: because it seems like in some sense, the paw for
Speaker 1: inflation court retailers off guard a little bit. Did did
Speaker 1: the industry just kind of get inflation and how the
Speaker 1: consumer reacted wrong? I don't know that they necessarily got
Speaker 1: the inflation part wrong. I mean a lot of the
Speaker 1: goods that are on shelves in June were things that
Speaker 1: were purchased before gas prices really went up. Before some
Speaker 1: of those stronger things really hit that drove prices up
Speaker 1: in other places, like in grocery where the supply chains
Speaker 1: much shorter. But I do think it surprised them how
Speaker 1: much consumer demand there was and how much consumers were
Speaker 1: still willing to spend um, you know, as things opened
Speaker 1: up more. I think we're starting to see the impact
Speaker 1: of that now where July I think isn't going to
Speaker 1: be as strong retail sales as June was. Some of
Speaker 1: it is inflation biting into that, just scretionary spending, but
Speaker 1: I think as well, some of it is everybody's on vacation,
Speaker 1: everybody's out traveling, They're shifting their spending to other places. Yeah,
Speaker 1: Nicky Bed VP of Strategy, adopt toss and Bloomberg's brending
Speaker 1: case of course, thanks to you both. Happy weekend. Coming up,
Speaker 1: we'll talk about Ethereum's winning streak and by the way,
Speaker 1: is the merge finally happening? Really more than that? Next?
Speaker 1: This is Bloomberg alright, time for our crypto report now,
Speaker 1: and EFA jumps ten this week for a sixth straight
Speaker 1: week of gains. This in anticipation of ground breaking software
Speaker 1: upgrade to its blockchain Ethereums upgrade has been long awaited,
Speaker 1: and news around it has been welcomed by investors. We've
Speaker 1: pushed its token price up by roughly over the past month.
Speaker 1: That's bringing Bloomberg's David Pan out in New York for
Speaker 1: more David. Everyone's been weighing in on this, the merge.
Speaker 1: It's close, it's exciting, Ethereums all over the shop. Is
Speaker 1: it actually going to happen? Right? So, the merge has
Speaker 1: been on the roadmap of the Ethereum Blocked and Projects
Speaker 1: Development UM since its inception twenties fifteen. There have been
Speaker 1: several dealays in the past several years and UM there
Speaker 1: has been a suspicion of the time of the merge,
Speaker 1: but based on the conversations with investors and developers that
Speaker 1: there are more confident than ever that the merger way
Speaker 1: happened in the next couple of months, based on a
Speaker 1: couple of reasons. And firstly, we've seen the merge on
Speaker 1: the test nets being completed with without major technical at chist,
Speaker 1: which is a promising sign that shows the merch will
Speaker 1: actually happened in the near future. A Secondly, if we
Speaker 1: look at the derivatives market, in particular the ether options
Speaker 1: market we're seeing a lot of investors who are betting
Speaker 1: on a price hike during around the time of the merch.
Speaker 1: So those those two things kind of indicate that, you know, um,
Speaker 1: there's a fairly high confidence level for the merch to
Speaker 1: happen in the near future. Well, it seems like investors
Speaker 1: a positioning for this to happen right there, that trying
Speaker 1: to get in because they anticipate further upward movement in ethereum.
Speaker 1: But then there's a school of thought that when it
Speaker 1: actually happens, we'll see a crash. Explain that logic to us. Yes,
Speaker 1: So um, so you know, like, um, there's a say
Speaker 1: in the crypto space, you know, sell the news. Um
Speaker 1: at the end of the day. I mean, we have
Speaker 1: to remember that crypto market is highly speculative market, and
Speaker 1: a lot of hot money, speculative capital, you know, will
Speaker 1: be going from the large scale investors into the market
Speaker 1: around the time when the merge happened, because you're in
Speaker 1: search of our charge opportunities in the time of high volatility.
Speaker 1: Another reason might be that you know, um, there might
Speaker 1: be other potential technical difficulties for glitches happening after the merge,
Speaker 1: which would discourage investors to invest more, to put more
Speaker 1: money into the into the project. So those are the
Speaker 1: two major reasons, um, you know, based on my conversations
Speaker 1: with investors and core developers behind the project. Alright, all
Speaker 1: eyes on ethereum then Bloombergs David Penn, thank you, have
Speaker 1: a great weekend in New York. Let's look at the
Speaker 1: week that was in the world of electric vehicles, with
Speaker 1: Nicola beating expectations last weekend, announcing his active shake up
Speaker 1: this week, and Rivian cutting its annual earnings forecast saying
Speaker 1: it would have a larger than previously guided loss on
Speaker 1: inflationary wose. And now we'll talk about the Inflation Reduction
Speaker 1: Acts which Congress has just voted to pass and pass
Speaker 1: onto the President Biden in his desk, which the President says,
Speaker 1: according to headlines crossing the Bloomberg, he will sign next week.
Speaker 1: The bill could deliver a boost to electric commercial vehicles
Speaker 1: in this macro environment. Joining me now is Olfsakker's general
Speaker 1: partner at Red Blue Capital, a VC focused on early
Speaker 1: stage companies in the mobility and automotive space, and Bloomberg
Speaker 1: Zone Car's stock out on the East Coast. So you
Speaker 1: and I are laugh have discussed this bill through its passage.
Speaker 1: What's your reaction now that it seems real and done. So,
Speaker 1: there are a few things that are happening all at once.
Speaker 1: The one is that there's a lot of political jostling
Speaker 1: in order to get the steel through um and it
Speaker 1: creates a short term confusion because it kind of immediately
Speaker 1: changes the subsidiary regime, changes the rules around it um
Speaker 1: and and that's going to create abit of fusion in
Speaker 1: the NYOTA. It does correct for some of the things
Speaker 1: that were problematic in the pre existing EV subsidies, that
Speaker 1: there were effectively regressive, that wealthy people were the ones
Speaker 1: that could afford high end you know howmer evs and Tesla's,
Speaker 1: and yet you know those aren't necessarily the people you
Speaker 1: want to be subsidizing with tax dollars. Now, the bill
Speaker 1: is shifting the thresholds for who qualifies and which vehicles
Speaker 1: qualify to be more focused on the middle class. But
Speaker 1: it is still fundamentally regressive in a sense. Why do
Speaker 1: you believe I think your school of thought is that
Speaker 1: it misses the point that actually there's a much broader
Speaker 1: section of the global automotive market that needs attention, that
Speaker 1: needs more support to electrify. It's not just the automotive market.
Speaker 1: I think what you need to think about is what
Speaker 1: is the point of cars? They move people, and they
Speaker 1: to some extent move goods, especially if somebody's going to
Speaker 1: Walmart or something, they're they're hauling stuff in their vehicle.
Speaker 1: But what we should be focusing on if we care
Speaker 1: about climate and the two things that are attentioned in this,
Speaker 1: well we can get to them. One is America first,
Speaker 1: like these policies around American manufacturing, etcetera. And the other
Speaker 1: is around climate. But if you care about that second bucket,
Speaker 1: the climate bucket, would you care about is not electrifying vehicles,
Speaker 1: not making cars that people own the drive four percent
Speaker 1: of the time electric, would rather electrifying miles. And the
Speaker 1: miles that really matter are the ones that are driven
Speaker 1: by fleets of various kinds, whether it's commercial fleas, trucks,
Speaker 1: delivery vans, but also fleets like Scuta, fleets in cities
Speaker 1: like San Francisco, which are also high utilization, and also
Speaker 1: for delivery of food. Company like door Dash is doing
Speaker 1: one point six billion trips a year. You know, why
Speaker 1: isn't there focused on commercializing those trips. It's subsidizing those
Speaker 1: trips through these kinds of subsidies. So a big focus
Speaker 1: on the consumer. I want to bring Bloomberg, Bloomberg's Carl
Speaker 1: Stock into the conversationating Kyle, you know, give us a
Speaker 1: sense of where we're at in electrification in America. You
Speaker 1: write fantastic story last week that basically points out that
Speaker 1: fuel anywhere in the States but on the West Past,
Speaker 1: for example. And you want to take a road trip,
Speaker 1: a classic American road trip in an e V, It's
Speaker 1: not that easy. Yeah. Well, I think EV adoption is
Speaker 1: is sort of ahead of where the narrative is. I
Speaker 1: think Americans are open to these vehicles, but the charging
Speaker 1: infrastructure here is still a big challenge. We lag China, Europe,
Speaker 1: South Korea, even Japan when it comes to the number
Speaker 1: of places to charge a vehicle quickly, um, if you're
Speaker 1: outside of the Tesla universe. So that's because we haven't
Speaker 1: had subsidies like this in the past. We haven't had
Speaker 1: you know, rebuff policy like they have in Scandinavia and
Speaker 1: in China. UM to really put these cords out there
Speaker 1: in the wild, and not just that you know, whole
Speaker 1: foods or the gym or Um your office, but at
Speaker 1: the National Park at the Grand Canyon, you know that's
Speaker 1: still kind of off the map for someone taking a
Speaker 1: Navy road trip right now. So you know, this build
Speaker 1: speaks to that. But Biden's giant infrastructure package also speaks
Speaker 1: to that five billion dollars that's going to start to
Speaker 1: be deployed this autumn um should help cover a lot
Speaker 1: of those EV deserts, but we're not really there yet
Speaker 1: in terms of where you can go in these vehicles.
Speaker 1: The other area is this whole energy crisis and and
Speaker 1: the motivation to move to e v s. In your
Speaker 1: reporting in recent weeks and months, what do you see
Speaker 1: in the US consumer in terms of their willingness to
Speaker 1: transition to evs their ability to afford an e v
Speaker 1: The affordability is a huge chunk of it. I mean,
Speaker 1: these cars are they were expensive to begin with, They're
Speaker 1: getting more expensive now because of the supply crisis because
Speaker 1: dealerships can add on these market adjustment rates um and
Speaker 1: even if you're paying a sticker price, you're waiting months
Speaker 1: for one of these cars. So that's a big issue.
Speaker 1: A big thing in the bill, that pattern that is
Speaker 1: going through now is a provision for a rebate for
Speaker 1: use dvs. And this is massive, Like anyone in the
Speaker 1: AVA universe is thrilled about this because in America, seven
Speaker 1: percent of cars that are purchased are pre owned, so
Speaker 1: this is the lion's share of the market. So to
Speaker 1: sort of have something that speaks to that buyer could
Speaker 1: move the needle drastically for the for the space. So
Speaker 1: that's the kind of consumer side of the story from Kyle.
Speaker 1: And again, you know, your point is that you we
Speaker 1: shouldn't just focus on cause. So if I said to you,
Speaker 1: here's a pen, go back and rewrite the bill as
Speaker 1: you would have written it, what would you have put
Speaker 1: in that to hit those targets reducing emissions and advancing
Speaker 1: a transition to sustainable energy. Yeah, I think the focus
Speaker 1: on you know, going to a national park or something
Speaker 1: like that is not how people actually use cars. Cause
Speaker 1: are designed today for family to go to a picnic,
Speaker 1: right and have all this trunk space and all the
Speaker 1: kids in the car. But in reality, most of the
Speaker 1: vehicles are actually being used to commute, or they're being
Speaker 1: used for trips that people take for retail um and
Speaker 1: usually there's only one person driving that car. Um and
Speaker 1: so I wrote a book, and the book is basically
Speaker 1: about the transition to what I call the trip economy. Basically,
Speaker 1: these trip marketplaces that bring things to you or take
Speaker 1: your places Uber, Amazon, Door, Dash, These all different ways
Speaker 1: in which you can buy trips for specific purposes. And
Speaker 1: this trip economy rationalizes all the efficiencies in efficiencies of
Speaker 1: car ownership. Car ownership is extremely wasteful. Think about all
Speaker 1: the metal that's being moved all the way to take
Speaker 1: you anywhere that you're going. That's just unnecessary. Um and
Speaker 1: and the real opportunity is to not electrify the energy
Speaker 1: that's being used to move all that weight, but actually
Speaker 1: to change how much energy is needed in the first
Speaker 1: place to move people and goods for the economic purposes
Speaker 1: of growing the economy, etcetera. So, if I were to
Speaker 1: rewrite the bill, I'd be focused on those kinds of opportunities.
Speaker 1: UM focus on commercial fleets. And how do you accelerate electrification?
Speaker 1: If you look at where electrification is really happening today,
Speaker 1: it's it's buses and cities they've already close to those
Speaker 1: buses have already transitioned. UM. If you look at Amazon,
Speaker 1: you mentioned Rivian before they made a massive purchase of
Speaker 1: Rivian vehicles UM, and that's really what what is the
Speaker 1: tailwind behind rivian um. Those those are the use cases
Speaker 1: that really have rapid adoption, and those vehicles are the
Speaker 1: ones that are doing high amounts of miles door dashes
Speaker 1: using e bikes in many cities to deliver goods, and
Speaker 1: they're bundling the amounts the packages that are being delivered
Speaker 1: so you don't have to Instead of having consumers take
Speaker 1: individual trips to a store, you have multiple trips being
Speaker 1: bumbled into one one ride. And similarly with Uber you
Speaker 1: sing in London under pressure from uh the from TfL
Speaker 1: that it was actually much more quickly electrifying than than
Speaker 1: consumer flee. So that's that's if you want to show
Speaker 1: electric miles to electric education, that's that's a lot of
Speaker 1: the things you should be focusing on. We could have
Speaker 1: spoken about this all night, all weekend, perhaps big thanks
Speaker 1: to a Love Secres, general partner at Red Blue Capital
Speaker 1: and Bloomberg's Kyle Stock, good mate of mine out on
Speaker 1: the East Coast. Thanks to you both. Well, that does
Speaker 1: it for this edition of Bloomberg Technology Monday. We have
Speaker 1: BBG Ventures President's student line to chat big tech regulation
Speaker 1: and the investing landscape. Don't forget to check out our podcast.
Speaker 1: You can find it on the terminal as well as
Speaker 1: online on Apple's Spotify and on iHeart. This is Bloomberg
Speaker 1: You day at the will have been keeping the