WEBVTT - Tech Stocks Rally and Rising Consumer Sentiment (Podcast) 0:00:02.200 --> 0:00:05.560 From the heart of where innovation, money and power collive 0:00:06.320 --> 0:00:10.840 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:28.080 Emily Jay. This is Bloomberg Technology. I'm Ed Ludlow in 0:00:28.120 --> 0:00:30.760 San Francisco in for Emily Chang coming up in the 0:00:30.800 --> 0:00:34.360 next hour. Second half momentum is picking up steam both 0:00:34.400 --> 0:00:37.440 the SMP five and has that one, posting their longest 0:00:37.479 --> 0:00:41.520 streak of weekly gains since November, but earnings have shown 0:00:41.520 --> 0:00:43.519 a mixed outlook for the rest of the year. Is 0:00:43.560 --> 0:00:48.280 this tech rally going to last? Last? Walmart Home Depot 0:00:48.400 --> 0:00:51.960 target Low's next week is a big one for retailers 0:00:52.000 --> 0:00:55.680 reporting earnings. Consumer sentiment has been rough the past few months, 0:00:55.680 --> 0:00:59.000 but new data suggests we're turning a corner. Will Chat 0:00:59.000 --> 0:01:03.680 all Things eat commerce and competition for electric semitrucks is 0:01:03.720 --> 0:01:06.720 heating up after the Senate past a roughly three d 0:01:06.800 --> 0:01:09.920 and forty seven billion dollar initiative to boost the transition 0:01:09.959 --> 0:01:13.080 to clean energy and cut emissions. Right now, it's pretty 0:01:13.160 --> 0:01:17.120 much Tesla versus Nikola, but tax incentives could your more 0:01:17.200 --> 0:01:21.959 players into the race. But first, the Federal Bureau of 0:01:22.040 --> 0:01:27.119 Investigation sees classified records, some marked top secret from former 0:01:27.160 --> 0:01:30.720 President Donald Trump's Moral Lago home. That's according to a 0:01:30.800 --> 0:01:34.520 copy of the warrant seen by Bloomberg. Wendy Benjaminson is 0:01:34.520 --> 0:01:38.720 our deputy managing editor for Bloomberg News over in Washington. Wendy, 0:01:38.760 --> 0:01:41.840 thanks for joining us this Friday. Let's stick to the 0:01:41.880 --> 0:01:46.679 basics here. What did we learn from the unsealed documents? Well, 0:01:46.720 --> 0:01:50.080 we learned not as much as one would hope. We 0:01:50.200 --> 0:01:53.840 learned that they did get about two dozen boxes of 0:01:54.080 --> 0:01:59.440 documents UM from from the Moral Lagoa state. We know 0:01:59.640 --> 0:02:02.640 that some of them were, as you said, top secret 0:02:02.920 --> 0:02:08.120 or even higher UM sensitive compartment and information, which means 0:02:08.120 --> 0:02:11.079 that it's only supposed to be in a closed room, 0:02:11.240 --> 0:02:14.160 shield off from cell phones and all sorts of other 0:02:14.720 --> 0:02:18.480 UM interference, and those were, you know, sitting around mar 0:02:18.600 --> 0:02:21.919 Lago UM. We also know that they were searching for 0:02:22.000 --> 0:02:26.320 evidence of violations of three crimes, including a segment of 0:02:26.400 --> 0:02:29.000 the Spionage Act. I'm not saying Donald Trump is going 0:02:29.040 --> 0:02:31.960 to be charged with espionage, but there's a subsection of 0:02:32.000 --> 0:02:36.440 that which relates to mishandling class by documents. We don't 0:02:36.480 --> 0:02:39.120 know that there is evidence of that. We just know 0:02:39.240 --> 0:02:43.399 that they got these documents. Wendy what is the concern here? 0:02:43.440 --> 0:02:48.280 What did the d J and investigators looking at looking for? Well, 0:02:48.320 --> 0:02:52.680 this all started when the National Archives, which keeps presidential 0:02:52.720 --> 0:02:58.040 records and then gives them to a president's library. Um, 0:02:58.200 --> 0:03:02.799 they have been working with Trump to representatives throughout. They 0:03:02.840 --> 0:03:07.120 got the transfer of fifteen boxes in January of this year, 0:03:07.600 --> 0:03:10.760 and they began looking through them and realized that there 0:03:10.880 --> 0:03:14.560 was classified national security information. We don't know what exactly 0:03:14.600 --> 0:03:18.560 that means yet, and UM that's prompted the Archives to 0:03:18.600 --> 0:03:20.640 reach out to the Justice Department and say, hey, you 0:03:20.639 --> 0:03:23.040 may want to get these backs. So that's what this 0:03:23.160 --> 0:03:25.560 action was. We don't know if it's going to relate 0:03:25.600 --> 0:03:28.280 to any of the cases against Donald Trump. It depends 0:03:28.280 --> 0:03:30.919 on I think, when we know what what the documents 0:03:30.960 --> 0:03:34.400 actually show. But um, you can be sure that the 0:03:34.480 --> 0:03:38.200 Justice Department will be coming through those this weekend. Wendy, 0:03:38.200 --> 0:03:42.960 It's always the question. But what happens next? I think 0:03:43.000 --> 0:03:45.600 we don't know as the as the answer. I'm afraid 0:03:45.680 --> 0:03:47.800 we know that they will go through these and try 0:03:47.840 --> 0:03:51.400 to figure out what what was in here, what crimes 0:03:51.440 --> 0:03:54.520 might be violated, and then they'll decide whether to charge 0:03:54.680 --> 0:03:58.360 or start talking to the former president, right, but we 0:03:58.400 --> 0:04:01.040 continue to follow your team's covery, Wendy over the weekend. 0:04:01.040 --> 0:04:04.560 That's Bloomberg's Wendy Benjaminson in d C. Thank you. That's 0:04:04.560 --> 0:04:06.560 gonna check on when moth Kits ended the week with 0:04:06.680 --> 0:04:10.640 Bloomberg's Katie Greifeld out in New York. Katie Tech ending 0:04:10.640 --> 0:04:13.480 the week strong, pretty strong. It was a big risk 0:04:13.640 --> 0:04:16.560 on day. As you can see from the board behind me, 0:04:16.680 --> 0:04:18.719 this isn't it. This is single stocks. But if you 0:04:18.720 --> 0:04:21.559 look at the indexes, for example, you saw the SMP 0:04:21.680 --> 0:04:24.760 five hundred finished higher. You saw the NASAC one hundred 0:04:24.880 --> 0:04:27.200 finished higher as well. There we go. You did see 0:04:27.240 --> 0:04:30.360 bonds rally a little bit, but just five basis points 0:04:30.360 --> 0:04:33.120 are so ad I'm gonna really just continue to fold 0:04:33.160 --> 0:04:36.200 that into this risk on mood. You saw Bitcoin managed 0:04:36.240 --> 0:04:38.599 to speak a little bit of a game. Of course, 0:04:38.680 --> 0:04:41.080 the board has flipped to the after hours trade, but 0:04:41.160 --> 0:04:45.000 Bitcoin higher. You can see it is twenty four thous 0:04:45.160 --> 0:04:47.560 dollars a coin. We haven't been at those levels in 0:04:47.680 --> 0:04:49.839 a little bit, and this was again a big finish 0:04:49.880 --> 0:04:52.200 to what's been a really big week. If you look 0:04:52.240 --> 0:04:54.960 at the NASAC one hundred for example, this was the 0:04:55.120 --> 0:04:58.280 fourth straight week of games. If you look back at 0:04:58.320 --> 0:05:00.240 this chart, you see a lot of red on this screen. 0:05:00.320 --> 0:05:03.680 That is the longest consecutive weekly rally since all the 0:05:03.720 --> 0:05:07.560 way back in November one. So I don't know, maybe 0:05:07.600 --> 0:05:10.320 we're at the bowl market, but in any case, it's 0:05:10.360 --> 0:05:13.080 been quite a run, especially for those tech socks. Now 0:05:13.160 --> 0:05:15.120 let's look at some of those individual names. As you 0:05:15.160 --> 0:05:18.200 can see, pinto a duel up top lower today. That's, 0:05:18.200 --> 0:05:22.040 of course after news this morning about China delisting five 0:05:22.080 --> 0:05:26.000 of its largest state owned enterprises state owned companies rather 0:05:26.360 --> 0:05:29.000 from US exchanges that weight on ad R s. But 0:05:29.040 --> 0:05:31.440 you go down the list again very strong. You had 0:05:31.520 --> 0:05:35.320 Chips coming back. You had Peloton surging on a mark 0:05:35.400 --> 0:05:38.479 German scoop of course that they're going to cut about 0:05:38.520 --> 0:05:40.960 eight hundred jobs, are going to shut stores, They're going 0:05:40.960 --> 0:05:43.120 to raise the cost of some of their products. Just 0:05:43.160 --> 0:05:46.120 part of this big overhaul that we're seeing at that company. 0:05:46.120 --> 0:05:49.720 In Tesla to rallying almost five percent, maybe part of 0:05:49.760 --> 0:05:52.080 the broader risk on mood in the market. Maybe because 0:05:52.120 --> 0:05:56.679 you're getting married, Ed will remained to continue to watch 0:05:56.760 --> 0:06:00.440 that story. But again a big move for Tesla. Thank Uktie. 0:06:00.440 --> 0:06:02.880 That's one m and a report that I'm able to 0:06:02.920 --> 0:06:06.000 confirm or live on there. Blue Kenny grow felt out 0:06:06.000 --> 0:06:07.600 in New York. Thank you. Does you point out Peloton 0:06:07.640 --> 0:06:11.599 a big move, but Friday Tech broadly outperforming in equity markets. 0:06:11.600 --> 0:06:14.640 I'm absolutely delighted to bringing Mel like Messino, CEO of 0:06:14.680 --> 0:06:18.640 WE Family Offices, which has fifteen billion dollars in assets 0:06:18.680 --> 0:06:21.360 under management. Mel, it's good to see you again. What's 0:06:21.360 --> 0:06:24.640 your takeaway, Thank you? What's your takeaway from this week 0:06:24.680 --> 0:06:28.800 in the markets? Well, I think that it's been a 0:06:28.839 --> 0:06:32.600 great week, and actually it's been a great month for protech. 0:06:33.400 --> 0:06:35.479 And I think that it has to do with the 0:06:35.520 --> 0:06:38.039 fact that people are starting to believe that we're going 0:06:38.080 --> 0:06:41.280 to get inflation under control. Inflation is what will kill 0:06:41.320 --> 0:06:45.080 the earnings of tech companies, and and so I think 0:06:45.120 --> 0:06:49.200 that the mood is positive because they see that inflation, 0:06:49.520 --> 0:06:53.080 inflation is gonna it's going to come down. We're kind 0:06:53.080 --> 0:06:54.880 of breathing a side of relief out here in San 0:06:54.920 --> 0:06:57.640 Francisco at the Bloomberg Bureau. Now that the kind of 0:06:57.640 --> 0:07:00.400 the bulk of earning season is over. If you were 0:07:00.400 --> 0:07:03.840 to draw up your scorecard from earnings, particularly the mega caps, 0:07:04.040 --> 0:07:07.520 what is your takeaway from this earning season, well, I 0:07:07.520 --> 0:07:11.880 think it's been mixed, but in general, h a lot 0:07:11.920 --> 0:07:16.360 of the companies exceeded expectations, both on the revenue side 0:07:16.840 --> 0:07:18.880 and on the on the earning side. And I think 0:07:18.880 --> 0:07:20.320 the name of the game is not going to be 0:07:20.320 --> 0:07:21.840 a revenue. The name of the game is going to 0:07:21.960 --> 0:07:26.240 be earnings and what happens with earnings and earnings always 0:07:26.240 --> 0:07:29.160 look backward. You know, you're you're talking about the last quarter. 0:07:29.240 --> 0:07:31.560 I think the big question with earnings is what's going 0:07:31.600 --> 0:07:33.880 to happen in the next two quarters. And that's why 0:07:33.960 --> 0:07:37.560 I think that good news about getting control over inflation 0:07:38.000 --> 0:07:44.040 is what's causing this rally. You know that historically Tech 0:07:44.160 --> 0:07:47.280 in the first half of the year not not the 0:07:47.320 --> 0:07:49.440 best play, but then does rebound and we've kind of 0:07:49.480 --> 0:07:51.880 seen that in the third quarter. Do you expect Tech 0:07:51.960 --> 0:07:54.480 to continue to have momentum in the second half of 0:07:54.520 --> 0:07:57.720 two It's hard for me to say it's that gonna 0:07:57.720 --> 0:08:04.000 have two but I definitely see it into and what 0:08:04.120 --> 0:08:08.160 where are those opportunities what will drive that? Yeah, I 0:08:08.600 --> 0:08:10.640 think that tech is going to be the way to 0:08:10.720 --> 0:08:13.320 deal with inflation is a productivity. What's going to help 0:08:13.400 --> 0:08:16.480 us with productivity is tech and you have all the 0:08:16.560 --> 0:08:21.360 corporate spending money on their capits on tech, and so 0:08:21.520 --> 0:08:25.240 I I think that we're gonna definitely see tech continue 0:08:25.280 --> 0:08:28.000 to to improve. Now the valuation has got a little 0:08:28.000 --> 0:08:32.120 bit out of controllable for and so I think that um, 0:08:32.160 --> 0:08:36.160 you know, interest rates, um, interest rates going up and 0:08:36.240 --> 0:08:38.760 the discount rate that's implied in that in terms of 0:08:38.800 --> 0:08:43.760 earnings as actually it's what's made evaluations come down well 0:08:43.880 --> 0:08:46.320 now like I'm seeing a CEEO we family office. Is 0:08:46.360 --> 0:08:48.560 great to have you late on a Friday, happy weekend. 0:08:48.840 --> 0:09:00.000 We'll see you again soon shares. The online secondhand good 0:09:00.200 --> 0:09:03.960 marketplace Poshmark dropped eight percent on Thursday, the biggest decline 0:09:04.320 --> 0:09:06.920 since May. The company gave a weaker than hope sales 0:09:06.960 --> 0:09:09.960 forecast for the third quarter as growth has been held 0:09:10.040 --> 0:09:13.280 back by higher inflation and a changing global economy. But 0:09:14.000 --> 0:09:16.600 there were some bright spots, as user engagement on Poshmark 0:09:16.679 --> 0:09:19.520 jumped seventy percent year on year, joining US Sprage or 0:09:19.559 --> 0:09:22.040 Dan and Cars and I on the future is Poshmark 0:09:22.160 --> 0:09:26.000 CEO managed changers, so managed you know, the market's clearly 0:09:26.040 --> 0:09:31.400 focusing on this this sales outlook. What were the factors 0:09:31.440 --> 0:09:35.960 behind that around that that pressure on sales growth. Well, 0:09:36.000 --> 0:09:38.079 we if you look at our Q two results, we 0:09:38.160 --> 0:09:42.920 started we beat the guidance on both revenue and UH 0:09:43.040 --> 0:09:45.160 and sort of came to the midpoint on the earnings. 0:09:45.760 --> 0:09:47.960 I think when we look into the future we look 0:09:48.000 --> 0:09:51.320 at Q three, one of the good things that's happening 0:09:51.400 --> 0:09:54.000 is that we are starting to see our growth and 0:09:54.080 --> 0:09:57.800 our rhythm and kidens be more like twenty nineteen, which 0:09:57.840 --> 0:10:00.840 is pre COVID, which is a healthy to for poshmarkers. 0:10:00.840 --> 0:10:04.000 As people are going out participate in participating in events, 0:10:04.520 --> 0:10:07.160 going to weddings, you know, going back to school. It's 0:10:07.160 --> 0:10:08.880 a great thing because you need fashion, you need to 0:10:08.960 --> 0:10:10.920 rotate your closet, and people are going back to the 0:10:10.960 --> 0:10:13.840 closet and then rotating it. So that's a good thing. 0:10:13.880 --> 0:10:16.679 But we're being cautious. I mean it's early. We're sort 0:10:16.720 --> 0:10:19.040 of want to observe it for a few months, and 0:10:19.080 --> 0:10:22.480 that's reflected in our guidance. I mean, it's remind us 0:10:22.480 --> 0:10:27.800 how poshmark works. Essentially, you're pairing sellers of second handkerds 0:10:27.840 --> 0:10:30.199 with buyers and second handkerds. Right, But forward me a 0:10:30.240 --> 0:10:33.160 little bit about the profile of of user on the platform, 0:10:33.200 --> 0:10:36.640 the types of folks that are buying goods there. Yeah, 0:10:36.760 --> 0:10:39.600 poshmark is is unique in the sense that we allow 0:10:39.679 --> 0:10:42.280 you to turn your closet into a shop. So it 0:10:42.320 --> 0:10:44.760 really appeals to millions of people out there who have 0:10:44.760 --> 0:10:47.280 a closet. I think almost everyone has a closet has 0:10:47.280 --> 0:10:49.560 some excess stuff to sell, so we really make it 0:10:49.679 --> 0:10:51.839 very easy to take their closet and start selling it 0:10:51.840 --> 0:10:55.840 if we provide everything built into the platform is shipping, 0:10:56.360 --> 0:10:59.520 payment processing, etcetera. And the beautiful thing is the item 0:10:59.559 --> 0:11:02.120 goes straight from the seller to the buyer, so we 0:11:02.160 --> 0:11:04.480 hold no inventory and that allows us to have an 0:11:04.559 --> 0:11:09.280 extremely dynamic assortment, which has been a strong point, particularly 0:11:09.320 --> 0:11:12.720 in this changing sense of fashion going into the pandemic, 0:11:12.760 --> 0:11:16.360 coming out of it, going into from active where to work, 0:11:16.400 --> 0:11:18.840 where to back to school? Where? Uh? And then on 0:11:18.880 --> 0:11:21.760 the flip side, we have people who are shopping these 0:11:21.760 --> 0:11:25.400 closes both for getting values and bargains, but also getting 0:11:25.400 --> 0:11:28.960 access to wide assortment. Everything you want, we believe within 0:11:29.040 --> 0:11:31.920 somebody's closets, so we put them all together and that's 0:11:31.960 --> 0:11:35.760 past manage. I want to get into the psychology of 0:11:35.800 --> 0:11:38.040 the consumer, that what what kind of lens. Do you 0:11:38.080 --> 0:11:42.080 get into the health of the consumer. Are their users 0:11:42.080 --> 0:11:45.240 shopping on your platform because they're feeling the pain of inflation, 0:11:45.679 --> 0:11:48.840 so they're looking to the secondhand goods market rather than 0:11:48.960 --> 0:11:52.439 buying off the high street, you know, off new products. 0:11:53.440 --> 0:11:57.360 What are the kind of macro characteristics that you're seeing 0:11:57.400 --> 0:12:01.880 in your in your users. First thing is consumers are 0:12:01.920 --> 0:12:04.520 looking for value. Consumers are always looking for value, but 0:12:04.559 --> 0:12:08.320 in these inflationary times, they're especially looking for value. Number 0:12:08.400 --> 0:12:11.800 two is consumers preference and dastes are changing and a 0:12:11.800 --> 0:12:15.160 lot of times traditional retail is not able to keep up. 0:12:15.200 --> 0:12:17.199 And what you're seeing with a lot of first supply 0:12:17.320 --> 0:12:20.520 shade famine and now sort of retail store lout is 0:12:20.559 --> 0:12:24.360 this mismatch of computer supply and demand, consumer supply and demand. 0:12:24.679 --> 0:12:27.120 And what we see with posh market is this ability 0:12:27.160 --> 0:12:30.920 to dynamically match from the closets from people this supply 0:12:30.960 --> 0:12:32.920 and demand. So that's the second thing is people looking 0:12:32.920 --> 0:12:36.360 for latest trendy things and that trends are changing, but 0:12:36.480 --> 0:12:38.839 they flips of the posh markets that consumers can also 0:12:38.880 --> 0:12:41.160 make money and as people are sort of looking for 0:12:41.160 --> 0:12:44.160 extra sources of income, wash market provide that as well. 0:12:45.120 --> 0:12:49.360 Told me about Poshmark parties. What is a Poshmark party? 0:12:50.679 --> 0:12:53.400 So two things. We have virtual parties that are happening 0:12:53.440 --> 0:12:56.840 online where people are selling together, will have a theme, 0:12:57.000 --> 0:13:00.920 and thousands, sometimes hundreds of thousands of pop will come together. 0:13:01.000 --> 0:13:03.880 In fact, our evening parties are so big that I've 0:13:03.880 --> 0:13:05.880 seen parties in the last few weeks that have hit 0:13:06.160 --> 0:13:08.959 ten million items being listed in a single party from 0:13:08.960 --> 0:13:11.960 across the country. So they are really a group selling 0:13:11.960 --> 0:13:15.160 event where people are coming buying and selling together, and 0:13:15.160 --> 0:13:18.080 then we take them physical. So we hosted a party 0:13:18.080 --> 0:13:19.840 in l A a couple of weeks back, and next 0:13:19.920 --> 0:13:22.720 week we have one in New York City, and there 0:13:22.760 --> 0:13:25.200 we have hundreds of sellers who come together. They connect 0:13:25.200 --> 0:13:27.679 with each other, they help each other, they learn from 0:13:27.720 --> 0:13:30.440 each other, get inspired. And we also have new sellers 0:13:30.440 --> 0:13:33.360 coming in where we help them activate their closets and 0:13:33.400 --> 0:13:37.600 people who junge Washmark and learn there's something called closet consultation. 0:13:37.679 --> 0:13:40.000 They can see how to run their online business faster. 0:13:40.440 --> 0:13:42.760 So they become sort of a small manifesto of these 0:13:42.840 --> 0:13:48.000 virtual events. Bloom Bag Intelligence analysts Tam Goyle is also 0:13:48.040 --> 0:13:52.400 excited about poshmarks potential for growth outside of North America 0:13:52.480 --> 0:13:56.640 international markets. Can you update us on the plans there? Yeah. 0:13:56.640 --> 0:13:59.560 Are Our Canadian business just hit four million users, we 0:13:59.679 --> 0:14:02.640 sort of celebrated three year mark and has more than 0:14:02.679 --> 0:14:05.360 a billion dollars of invntory lists, so that market is 0:14:05.400 --> 0:14:09.120 coming along. And we launched in Australia India during the 0:14:09.120 --> 0:14:11.600 pandemic and as we are coming out of it, we 0:14:11.640 --> 0:14:14.640 are seeing the engagement and physical events starting to build 0:14:14.640 --> 0:14:18.319 the communities there. So we believe the para dime of 0:14:18.480 --> 0:14:22.040 really finding the future of fashion inside your closet is 0:14:22.080 --> 0:14:24.880 well aligned, not just in US and Canada, with other 0:14:24.880 --> 0:14:28.840 countries as well. All right, well, we'll look for updates 0:14:28.840 --> 0:14:31.480 on those new markets as they come online. Posh Mark, CEO, 0:14:31.560 --> 0:14:33.960 Managed Chandra, thank you very much for joining us the 0:14:34.040 --> 0:14:38.040 update on the second hand goods market. Meanwhile, delivery startup 0:14:38.120 --> 0:14:41.320 go Path is tapping a new CFO to help it 0:14:41.360 --> 0:14:45.400 become profitable. Panera Bread's CFO Ted Steadham will join the 0:14:45.440 --> 0:14:48.520 same role for Gopath. According to sources, stead and work 0:14:48.600 --> 0:14:51.120 that we work as global head of business Planning and 0:14:51.160 --> 0:14:55.320 Financial Operations. He also served as CFO at Young Brands China. 0:14:55.360 --> 0:15:00.840 Business coming up, Europe's drought will further raise energy prices 0:15:00.880 --> 0:15:04.480 and disrupt trade. As the Rhine rivers water levels did 0:15:04.560 --> 0:15:31.360 below a crucial mark. This is bloom. There's a guess 0:15:31.360 --> 0:15:35.600 storage itself, it's not sufficient. We are facing a crisis 0:15:35.640 --> 0:15:38.080 at the moment. It's been produced by the cush off 0:15:38.120 --> 0:15:40.720 of Russian gas. But it tells us yet again just 0:15:40.840 --> 0:15:44.360 how volatile and uncertain fossil fuel prices are. Guess press 0:15:44.480 --> 0:15:47.200 will remain very high and it also may result in 0:15:47.320 --> 0:15:50.920 some disruption. We cannot magically get sort of tens of 0:15:51.040 --> 0:15:55.240 hundreds of gigger waters of renewable energy before winter. So 0:15:55.320 --> 0:15:57.440 it is a matter of saving energy, it's a matter 0:15:57.480 --> 0:16:03.120 of securing sources. Spec should be more obligatory measures to 0:16:03.240 --> 0:16:07.160 reduce to reduce consumption. The first step obviously is to 0:16:07.240 --> 0:16:10.240 become independent Russian supplies, which in the end can only 0:16:10.280 --> 0:16:14.640 be managed by additional imports, mostly llergy. Here today we've 0:16:14.680 --> 0:16:18.400 seen the the reduction in the guest consumption by about 0:16:18.440 --> 0:16:21.120 ten percent in the EU. I think the effect of 0:16:21.120 --> 0:16:24.120 this crisis will be that Europe will be further down 0:16:24.200 --> 0:16:26.440 the path to emissions reduction. So it would otherwise be 0:16:29.160 --> 0:16:31.840 that some of the commentary on the energy Crunch Europe 0:16:32.000 --> 0:16:34.560 is currently enduring and things don't look much better on 0:16:34.600 --> 0:16:37.240 the trade front. Germany's Rhine River has dropped to a 0:16:37.320 --> 0:16:40.640 level that could disrupt the transport of fuel throughout Europe. 0:16:40.680 --> 0:16:44.080 The effects could ripple through the continent for months. Bloomberg's 0:16:44.080 --> 0:16:48.720 Guy Johnson explains as of this afternoon here in Europe, 0:16:48.760 --> 0:16:53.200 the Rhine River has become impossible at the critical waypoint 0:16:53.280 --> 0:16:56.360 of Cow just to the west of Frankfurt. This is 0:16:56.400 --> 0:16:58.920 something that we've been anticipating for really quite some time. 0:16:59.200 --> 0:17:02.280 You can see the water levels as they've been dropping 0:17:02.840 --> 0:17:05.600 over the last few months. They have now dropped through 0:17:05.960 --> 0:17:09.920 the critical forty centimeter points at Cab. That's just under 0:17:09.960 --> 0:17:13.960 sixteen inches. That means effectively the river is no longer 0:17:14.080 --> 0:17:18.080 navigable for large barges. Now, this is crucial for Europe, 0:17:18.080 --> 0:17:20.159 not just for Germany, but for the whole of Europe. 0:17:20.240 --> 0:17:22.720 Let me show you what the map looks like here. 0:17:22.880 --> 0:17:25.840 So you've got ratted Rotterdam up here on the coast. 0:17:25.880 --> 0:17:29.000 The river Rind runs through Germany through Cologne just to 0:17:29.040 --> 0:17:31.760 the west of Frankfurt there's Cab and then runs through 0:17:31.800 --> 0:17:34.560 the rest of Germany down towards Switzerland. This is a 0:17:34.760 --> 0:17:38.680 hugely important waterway. It transports all kinds of things up 0:17:38.720 --> 0:17:41.560 and down for Germany and for the whole of Europe. 0:17:41.720 --> 0:17:45.120 Think about coal, think about gas, think about diesel. All 0:17:45.160 --> 0:17:47.240 of these things go up and down this river. Big 0:17:47.320 --> 0:17:50.640 chemicals companies are to the east of Cow as well, 0:17:50.720 --> 0:17:53.840 they will now be restricted. Big power plants that that 0:17:53.920 --> 0:17:56.640 require cold to be floated up the river on barges 0:17:56.840 --> 0:18:00.480 will now see those supplies restricted. This comes at a 0:18:00.520 --> 0:18:03.600 time when Europe is already facing a massive energy crisis. 0:18:04.000 --> 0:18:06.280 The fact that we now have drought in Europe that 0:18:06.440 --> 0:18:09.880 is lowering these river levels is only going to exacerbate 0:18:09.920 --> 0:18:13.200 that problem and pour further pressure on politicians to do 0:18:13.280 --> 0:18:16.280 more to deal with this economic crisis that is looming 0:18:16.600 --> 0:18:19.159 and getting worse and worse as we head towards winter 0:18:19.280 --> 0:18:22.040 here in Europe. So, as of today, the Rhine is 0:18:22.080 --> 0:18:25.040 now closed at Cow and it looked like and it 0:18:25.040 --> 0:18:27.240 looks like it's not going to rain for a while. 0:18:28.280 --> 0:18:31.600 Thanks to Boomberg's Guy Johnson in London to that update 0:18:31.640 --> 0:18:34.240 on the Rhine rivers in other stories to watch, Three 0:18:34.280 --> 0:18:38.080 of China's biggest state owned companies planned to delist from 0:18:38.240 --> 0:18:41.760 US exchanges that's fall out from a dispute over whether 0:18:41.840 --> 0:18:45.560 American regulators should be allowed to inspect audits of Chinese 0:18:45.560 --> 0:18:48.720 businesses who shares are listed in the US. The three 0:18:48.760 --> 0:18:52.560 companies that will delist our China Life, Petro China, and 0:18:52.640 --> 0:18:58.280 Cinepec Massaoshi Sun has now lost more than four billion 0:18:58.359 --> 0:19:01.119 dollars on a series of ideals he set up at 0:19:01.160 --> 0:19:05.040 soft Bank to boost his compensation. The Japanese billionaire took 0:19:05.080 --> 0:19:09.280 the unusual step of establishing personal stakes in a series 0:19:09.320 --> 0:19:12.080 of soft Bank ventures in recent years. That was a 0:19:12.119 --> 0:19:15.560 mixing of company and executive interests that drew the ire 0:19:15.840 --> 0:19:21.680 of investors. And Amazon, Oracle, and other data providers were 0:19:21.720 --> 0:19:24.240 pressed by a group of lawmakers about how they sell 0:19:24.359 --> 0:19:28.359 mobile phone location data. The companies offered assurances that the 0:19:28.400 --> 0:19:33.280 information could not be used to track women seeking abortion services. 0:19:33.600 --> 0:19:36.840 The Supreme Court's decision to overturn women's federal right to 0:19:36.880 --> 0:19:40.920 abortion has sparks concerns that location data can be used 0:19:40.920 --> 0:19:44.280 by law enforcement in states that have outlawed or restricted 0:19:44.320 --> 0:19:56.840 abortion to prosecute people who seek reproductive care. I'm going 0:19:56.880 --> 0:19:59.040 to bring you some breaking news and headlines crossing the 0:19:59.040 --> 0:20:02.320 Bloomberg terminal. The House has enough votes to send a 0:20:02.400 --> 0:20:05.760 roughly four hundred thirty seven billion dollar TACKS, climate, and 0:20:05.840 --> 0:20:09.440 drug price package to President Biden's desk. The inflation reduction 0:20:09.480 --> 0:20:12.160 bill is designed to boost the US transition to clean 0:20:12.280 --> 0:20:15.200 energy and alleviate costs. Which had more about the bill's 0:20:15.200 --> 0:20:20.320 impact on electric vehicles later this hour. This is Boomberg Technology. 0:20:20.359 --> 0:20:22.800 I am Ed Lovelow in San Francisco for more on 0:20:22.880 --> 0:20:26.600 Peloton's news. Let's bring in Bloomberg's Jackie Deavlos, who's out 0:20:26.800 --> 0:20:29.000 in d C. Jackie, what do we learn from Peloton 0:20:29.080 --> 0:20:33.960 on Friday? Absolutely well, for customers, you know, prices are 0:20:34.000 --> 0:20:36.679 going to be hyked up, and it's kind of a 0:20:36.680 --> 0:20:39.360 reversal from what we saw in April when we saw 0:20:39.480 --> 0:20:42.320 price cut for the bike and the treadmill UM. So 0:20:42.359 --> 0:20:43.760 if you were looking for a deal, you may have 0:20:43.800 --> 0:20:45.560 missed out on that one. But it's really part of 0:20:45.560 --> 0:20:50.040 this broader plan to shift more of its costs from 0:20:50.119 --> 0:20:53.600 the hardware side of the business to higher margin memberships. 0:20:53.640 --> 0:20:58.120 And you know, layoffs are expected to impact around eight 0:20:58.240 --> 0:21:02.400 hundred people, mostly Constant traded, and you know the customer 0:21:02.520 --> 0:21:07.600 service and distribution and UM delivery type functions and this 0:21:07.680 --> 0:21:11.840 is a really bigger picture part of this broader strategy 0:21:12.080 --> 0:21:16.879 to overhaul the cost structure and redirect more of its 0:21:17.359 --> 0:21:20.600 capital to research and development. You know the memo to 0:21:20.760 --> 0:21:24.600 employees that Barry McCarthy uh sent earlier today, you know, 0:21:24.680 --> 0:21:27.720 he outlines this rationale that you know, you need to 0:21:27.800 --> 0:21:31.800 spur innovation to spur revenue growth, and that's going to 0:21:31.880 --> 0:21:34.560 be key, especially when they've been burning so much capital. 0:21:35.440 --> 0:21:38.399 Barry McCarthy, the Peloton CEO, said in this internal memo 0:21:39.400 --> 0:21:42.800 that cash is oxygen and oxygen is life. And clearly, 0:21:42.880 --> 0:21:46.000 you know they're worried about that. They're operating health if 0:21:46.040 --> 0:21:48.280 you will. But what's the why the context here, Jackie? 0:21:48.320 --> 0:21:51.320 They did layoffs in February as well. Is it that 0:21:51.359 --> 0:21:54.560 the demand for the product has disappeared, that people just 0:21:54.600 --> 0:21:59.280 simply aren't using Peloton hardware anymore? You know, I think 0:21:59.280 --> 0:22:02.600 it's a company aation of things. The economic outlook has 0:22:02.640 --> 0:22:06.160 certainly shifted since the beginning of the year. And when 0:22:06.200 --> 0:22:09.520 he joined earlier in February, you know, it was already 0:22:09.640 --> 0:22:13.560 undergoing this major turnaround plan, but it wasn't really sure 0:22:14.000 --> 0:22:17.120 where some of the pain points were. Was it demand, 0:22:17.960 --> 0:22:20.960 was it just kind of this broader grim outlook. And 0:22:21.040 --> 0:22:23.320 what we're seeing now is that you know, they signaled 0:22:23.440 --> 0:22:27.840 they expect demand to soften going forward, and when consumer 0:22:27.960 --> 0:22:31.640 spend is really on the line, a luxury premium product 0:22:31.800 --> 0:22:35.600 like Peloton is more vulnerable, and you know, so future 0:22:35.680 --> 0:22:40.840 growth is somewhat hanging in the phrase, especially um. You 0:22:40.880 --> 0:22:43.560 know they've signaled that sales aren't going to be as 0:22:43.600 --> 0:22:47.119 strong now when it comes to saving money. This is 0:22:47.160 --> 0:22:51.680 where uh, you've seen somewhat of a vacillating in strategy. 0:22:51.880 --> 0:22:55.800 You know, when they upped that membership cost earlier in 0:22:55.800 --> 0:22:59.600 in April, UM, that was signaling that, look, this is somewhere. 0:22:59.640 --> 0:23:03.040 This is an area that they want to tap going forward. 0:23:03.080 --> 0:23:06.639 It's higher margin, it's recurring, predictable revenue. So you're definitely 0:23:06.680 --> 0:23:08.720 going to start to see them lean into that as 0:23:08.800 --> 0:23:12.000 the demand side of the picture becomes more uncertain. Well, 0:23:12.160 --> 0:23:14.480 investors certainly like what they saw the stock jumping almost 0:23:14.480 --> 0:23:17.359 fourteen percent Bloomberg's Jackie Devil loss. How in d C, 0:23:17.520 --> 0:23:20.800 thank you have a great weekend. Let's turn to retail earnings. 0:23:20.880 --> 0:23:23.359 Lots coming up next week from the likes of Walmart 0:23:23.480 --> 0:23:25.919 and Macy's. So let's take a little look ahead and 0:23:25.920 --> 0:23:29.159