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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is the Bloomberg

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Speaker 1: Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join

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Speaker 1: us each day for insight from the best in economics, finance, investment,

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Speaker 1: and international relations. You can also watch the show live

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Speaker 1: see the show weekday mornings from seven to ten am

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Speaker 1: Eastern from our global headquarters in New York City. Subscribe

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Speaker 1: to the podcast on Apple, Spotify, or anywhere else you

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Speaker 1: listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and

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Speaker 1: the Bloomberg Business App. So we are thrilled to bring

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Speaker 1: it out on your equity market, your bullmarket, Liz Young, Liz,

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Speaker 1: I love, love, love your note. And the answer is

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Speaker 1: you say profit wins? What are profits look like forward?

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Speaker 2: If you look at why people are buying stocks right now,

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Speaker 2: I think everybody is searching for more upside, and especially

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Speaker 2: after such a strong rally, it's been more difficult to find.

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Speaker 2: So then trying to answer that question of where are

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Speaker 2: we in the market cycle, where are we in the

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Speaker 2: business cycle, and what kind of stocks win at this

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Speaker 2: point so that we can find more upside, and we

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Speaker 2: did a bunch of analysis looking at what might happen

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Speaker 2: to the yield curve, what might happen to the dollar

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Speaker 2: if and when the FED finally does start cutting rates.

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Speaker 2: And one of the things that is consistent is that

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Speaker 2: you do want companies that are kicking out good margins,

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Speaker 2: that have healthy profits and are able to produce that

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Speaker 2: kind of cash flow.

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Speaker 1: Do we grow our way in the denominator price to

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Speaker 1: cares flow, price to this price to ebita, do we

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Speaker 1: grow the denominator into a more intelligent valuation?

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Speaker 2: Well, you know what's interesting is that if you look

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Speaker 2: at valuations, there continues to be this comparison between now

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Speaker 2: and what happened in the early two thousands, and valuations

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Speaker 2: compared to them are really not that outrageous. They're frothy,

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Speaker 2: and in particular pockets, they're perhaps higher than most investors

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Speaker 2: would want as an entry point. But I do think

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Speaker 2: over the next couple years, if we managed to avert

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Speaker 2: some big catastrophe, we do need earnings to continue to grow.

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Speaker 2: We do need them to come through in order to

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Speaker 2: just support the current level of valuations. And then it

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Speaker 2: becomes this awkward mental exercise of okay, if the pe

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Speaker 2: is coming down, that's actually a good thing if earnings

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Speaker 2: are going up, but the price of the index hasn't

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Speaker 2: necessarily moved all that much. I think we've been used

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Speaker 2: to these double digit returns and we may enter a

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Speaker 2: period where we're in that more regular return era of

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Speaker 2: mid single digits, but with earnings growth that's still strong.

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Speaker 3: Liz, you know, given the move we've had off those

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Speaker 3: October levels here in the stock market, the S and

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Speaker 3: P five hundred up, you know, over twenty five percent,

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Speaker 3: where what sectors still screen attractive to you?

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Speaker 4: Guys? If any.

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Speaker 2: Yeah, Well, that goes back to the earlier part of

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Speaker 2: this conversation is where do you find that upside and look,

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Speaker 2: growth companies, particularly large cap still seem attractive compared to

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Speaker 2: small cap. You start with some of those big buckets.

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Speaker 2: What's better large or small? And at certain points in

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Speaker 2: the business cycle, large cap does tend to do better.

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Speaker 2: At certain types of yield curve environments, large cap also

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Speaker 2: tends to do better. So if we expect that at

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Speaker 2: some point later this year, which I do expect, we

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Speaker 2: will experience what's called a bull steepener, meaning that the

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Speaker 2: short end of the curve comes down and the long

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Speaker 2: end of the curve either stays put or rises a

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Speaker 2: little bit. In that environment, you do want those large

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Speaker 2: cap companies, some of them growth. You do also want

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Speaker 2: some of those defensive names. And although it's a bull market,

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Speaker 2: there are defensive sectors that can do really well in

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Speaker 2: a bull market, and utilities is one of those that

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Speaker 2: has done well this year. I would still be staying

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Speaker 2: away from sectors that start with the word consumer, though.

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Speaker 1: Liz so far has such a herity of studying the

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Speaker 1: technology of America within the AI frenzy, what does our

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Speaker 1: technology look like forward? And can you invest in it?

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Speaker 2: I heard a quote last week that was sort of

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Speaker 2: resurrected from Bill Gates. It goes something along the lines

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Speaker 2: of technology is always overestimated in the first two years,

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Speaker 2: but underestimated in the ten year period. And I think

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Speaker 2: what's happening with AI right now is obviously we've got

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Speaker 2: a lot of enthusiasm and there are some real fundamentals

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Speaker 2: behind that trade and behind that theme. The reality is

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Speaker 2: that all themes go through a life cycle, and we're

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Speaker 2: likely to see at least somewhat of a boom and

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Speaker 2: bust in the AI theme, and things are going to

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Speaker 2: change quite a bit over time, much like what happened

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Speaker 2: with the Internet theme. We didn't really know how to

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Speaker 2: make money off of that early on, and I think

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Speaker 2: that's where we are with AI and at some point

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Speaker 2: we'll have to come back down to earth of we're

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Speaker 2: not going to come up with these profits in the

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Speaker 2: next twelve months. I think that's sort of where that

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Speaker 2: theme sits today.

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Speaker 1: We Liz, I don't want to talk to you about

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Speaker 1: Texas Systems per se. I know that's not part of

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Speaker 1: the game. But we've got Anna rag Rana coming up

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Speaker 1: here with the announcement from CNBC of an Elliott Management Steak,

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Speaker 1: Kunjohn Sohani and Oscar Hernandez Tejada for Bloomberg Intelligence absolutely

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Speaker 1: nail a company that's going to spend forward based off

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Speaker 1: semiconductive development in America and that and as a generalization,

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Speaker 1: investor saying, wait a minute, who's going to win out

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Speaker 1: in that tug of war between capex Frenzy and investors

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Speaker 1: saying I want a little discipline and capital allocation responsibility,

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Speaker 1: who's going to win right now?

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Speaker 2: I think we are actually going through a pivot where

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Speaker 2: investors are deciding that you need to be much more

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Speaker 2: judicious with your spending of capital, and we saw that

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Speaker 2: in some of the announcements in first quarter earnings, where

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Speaker 2: you're hearing big tech companies say we're going to spend

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Speaker 2: a bunch on ai I. Last year they got rewarded

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Speaker 2: for saying that, this year getting a little bit more punished,

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Speaker 2: with investors looking at it as Okay, if you're going

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Speaker 2: to spend, then where's the zero sum game? Who's going

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Speaker 2: to benefit from that spending? So rather than this, you know,

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Speaker 2: the pie is getting bigger. I think it has turned

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Speaker 2: into a little bit more of an environment where investors

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Speaker 2: are saying, you need to be responsible. I will, I

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Speaker 2: will go to the company that can benefit from some

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Speaker 2: of that spending, but let's be careful about how much

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Speaker 2: money we're throwing at a theme that isn't quite mature yet.

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Speaker 4: Hey, Liz, what are you?

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Speaker 3: What are you telling your clients these days about opportunities

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Speaker 3: in fixed income?

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Speaker 4: Broadly speaking?

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Speaker 3: Do you stick it to your treasury close to five percentity?

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Speaker 3: Maybe take a little credit risk?

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Speaker 2: You know, I wish I had a juicier answer to

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Speaker 2: this question, but yeah, I am your I am two

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Speaker 2: year treasuries all day long. I mean We're at a

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Speaker 2: point in the cycle where the FED is going to

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Speaker 2: have to cut rates at some point. We keep pushing

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Speaker 2: it out, but at some point that short end of

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Speaker 2: the curve is going to have to come to grips

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Speaker 2: with the fact that the FED will eventually embark on

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Speaker 2: a cutting cycle. So I still think it offers great opportunity.

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Speaker 1: Jong, thank you so much for so far great equity

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Speaker 1: discussion there, folks, Aniragrano would have known to press the

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Speaker 1: blue button. He joins us right now with the Bloomberg

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Speaker 1: Intelligence arog loves to talk about, including the Apple ballet,

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Speaker 1: But I've got to ask you away from your remit

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Speaker 1: about Texas instruments and what I want to talk about

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Speaker 1: anerog And this is not Colenngenzolbani and asking Hernanda Tejada

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Speaker 1: that will report for Bloomberg Intelligence and Texas Instruments way

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Speaker 1: out front on the question that Elliot's bringing up, like,

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Speaker 1: wait a minute, you got all these Capex dreams, what

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Speaker 1: about US investors, anierog within the cloud space, within the

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Speaker 1: Aniogarana world, your universe. Is the Capex being overdone?

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Speaker 5: Now?

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Speaker 1: Is there two much enthusiasm about spend spend spend versus

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Speaker 1: listening to investors or that they're saying, where's my return?

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Speaker 5: Tom, I love Capax, and you know what has been

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Speaker 5: disappointing is you know, it's not you know, it's not

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Speaker 5: resounding a lot with clients as I should it should have,

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Speaker 5: because this really gives me a very big leading indicator

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Speaker 5: that the cloud demand is going to bounce and bounce

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Speaker 5: back good. So i'm i'm I'm very happy that these

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Speaker 5: companies are investing very heavy in Capax, which means they

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Speaker 5: they know something that all of us don't know. I

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Speaker 5: feel okay about it at all.

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Speaker 3: All right, So let's go over to our good friend's

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Speaker 3: Apple June tenth. I mean I don't know, Tom, I

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Speaker 3: are thinking about booking, you know, the Gulf Stream to

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Speaker 3: go out there.

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Speaker 4: And see what are you do?

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Speaker 3: You and the boat that what should we be looking

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Speaker 3: for for Apple come June tenth.

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Speaker 5: So I think it's very clear at this point. Apple's

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Speaker 5: now had their big focus on Jenny I and everything

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Speaker 5: around it. They really need to tell the street that

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Speaker 5: they can do it better, if not better, at least

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Speaker 5: match what Google has showcased in the past few months.

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Speaker 5: If they don't do that, I don't think it's going

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Speaker 5: to be really good for investors in the near town

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Speaker 5: because so far the story has been Apple has lacked

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Speaker 5: behind and they have not done much. We have heard

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Speaker 5: from Markerman that they have a contract upcoming with open

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Speaker 5: Ai that can infuse some of the features in there. Now,

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Speaker 5: remember one thing Apple has the distribution. Apple has over

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Speaker 5: one billion smartphone users, So if they can get somebody

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Speaker 5: to use their products, I think it's going to help

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Speaker 5: them out in the long run. But I would say

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Speaker 5: a lot hinges on in this Tune tenth event for them.

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Speaker 1: So how do you define this overused word ecosystem? I mean,

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Speaker 1: is there an ecosystem nothing more than an ecosystem of convenience?

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Speaker 1: Or is it a tangible ecosystem? Is it a tangible universe?

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Speaker 5: So if you think about it, Tom, the way I

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Speaker 5: think about it is ecosystem of Excel users. I mean,

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Speaker 5: you know, free Google sheets have come and gone. I

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Speaker 5: wouldn't care about it. You could argue that, you know,

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Speaker 5: the same is the user, The same is the ecosystem

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Speaker 5: for people who read Wall three journals. Once you are

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Speaker 5: in that install base, you're not going to move away,

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Speaker 5: even if I get a cheaper phone out there, I'm

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Speaker 5: not moving away from Android to iOS or vice versa.

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Speaker 5: So I think the real big kicker here is do

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Speaker 5: they really have the compelling next generation app where it

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Speaker 5: can keep the I would say, you know, the users

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Speaker 5: that may decide to either pick iOS or Android in

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Speaker 5: the long run. So I think the ecosystem is sticky

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Speaker 5: because once you get into one, you don't get out

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Speaker 5: of it. But they really need to showcase that they

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Speaker 5: have the mindset to you know, keep people in it.

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Speaker 1: Paul in Video is over one, so they were stacks

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Speaker 1: split into one hundred. My first number was ninety seven,

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Speaker 1: and right now the stock split to one hundred and

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Speaker 1: ten dollars per share.

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Speaker 3: Yep, how about I mean, just that's the way to

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Speaker 3: play Airo in a lot of people's minds. Hey, Honora,

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Speaker 3: we saw some reporting coming out recently that Apple's China

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Speaker 3: iPhone shipments jumps fifty two percent.

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Speaker 4: What is going on with that? I thought they were

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Speaker 4: losing in China. What's going on there?

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Speaker 5: So I as probably one of the things we learned

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Speaker 5: from the last earning scull on Apple is some of

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Speaker 5: these ship in data shouldn't be relied upon that heavily,

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Speaker 5: because remember it's this is. This is the same source

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Speaker 5: that told us chan fab data was down I think

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Speaker 5: thirty nine forty percent or something in that. But when

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Speaker 5: Tim Cooat came on the conference call, he said, you

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Speaker 5: know what iPhone sales were up in Malee and China.

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Speaker 5: So I I, you know, the part of the ease

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Speaker 5: in the stocks only of one percent and not quite

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Speaker 5: a bit. I'm not expecting a fifty two percent jump

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Speaker 5: in iPhone revenue in the next quarter. I think this

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Speaker 5: just shows one thing it shows though, is Apple's not

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Speaker 5: losing out that big as it was made out in

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Speaker 5: the last six months. People will buy and sell depending

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Speaker 5: on when the sales are, when the seasonal nature is.

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Speaker 5: So I mean I I really don't put that much

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Speaker 5: emphasis on some of this data.

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Speaker 6: Point.

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Speaker 1: Explain to us ANA rog the utilities certitude that cloud

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Speaker 1: your world, the aneriog around and world needs electricity generation

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Speaker 1: and we're going to have to build all this stuff out.

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Speaker 1: What in that theme do we get wrong? What's the

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Speaker 1: distinction you say that needs to be clarified.

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Speaker 5: I think the biggest thing is, and Paul and I

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Speaker 5: had discussed this a while ago, is how are they

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Speaker 5: going to make up for something like this? How will

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Speaker 5: you see what are you going to do? Where is

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Speaker 5: the capacity going to come from? And I think I

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Speaker 5: am pretty much looking forward to new kinds of ways

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Speaker 5: of doing things people coming up with. I think, you know,

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Speaker 5: creative ways to utilize or make it more power and

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Speaker 5: you know, use a friendly because the hungry nature of

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Speaker 5: this particular technology is such that you know, we're going

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Speaker 5: to see a lot of build up off you could say,

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Speaker 5: alternative fuel rather than you know, the renewable energy because

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Speaker 5: because we do need a lot of power to run

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Speaker 5: these workloads.

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Speaker 3: So ana when we think about just Apple, you know,

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Speaker 3: this has been such a great stock for such a

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Speaker 3: long period of time, but this China risk, it just

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Speaker 3: doesn't seem to go away. If I'm an when you

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Speaker 3: talk to these institutional investors in Apple, how did they

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Speaker 3: kind of carmental well, how do they put that risk

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Speaker 3: kind of to rest a little bit?

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Speaker 5: Yeah, I think, you know, I think the last earnings call,

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Speaker 5: as well as the data today should pass by one

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Speaker 5: thing that this is a cyclical nature of the demand

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Speaker 5: in China and not so much structural shrinking. That's a

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Speaker 5: very good thing for long term and and something that

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Speaker 5: you and I and the three of us have discussed

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Speaker 5: over the last twelve months is you can say all

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Speaker 5: you want about India and other emerging markets, at least

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Speaker 5: for the next five years, Apple growth in iPhones is

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Speaker 5: going to come from China. Like it or not, that's reality.

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Speaker 5: So I think this is a good news at least

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Speaker 5: for the next couple of years. Now. One thing is

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Speaker 5: also I think getting clearer something we've been hopping on

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Speaker 5: for a while is this is not a company that's

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Speaker 5: going to grow sales ten percent anymore. This is going

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Speaker 5: to be at best a five percent sales growth company.

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Speaker 5: And people need to get, you know, comfortable with that.

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Speaker 5: And I think a lot of people are now finally

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Speaker 5: getting comfortable that that's the story. So you take five

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Speaker 5: percent of revenue growth, a little bit margin expansion, and

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Speaker 5: then share buybacks, you get to like eight to ten

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Speaker 5: percent EPs growth trade and that's the reality of the

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Speaker 5: park at this point.

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Speaker 1: One final question, have you ever been to an Apple

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Speaker 1: developers conference?

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Speaker 5: No? No, they keep it insight, they keep it very tight.

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Speaker 5: I know they have not invited me.

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Speaker 1: It's like an invited audience, right.

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Speaker 5: Yeah, yeah, no, absolutely, I don't even have about eye

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Speaker 5: so definitely not invited.

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Speaker 1: And Ron thank you so much joining us now with

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Speaker 1: Panje policy. This came up not once, Terry, but twice

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Speaker 1: this weekend. I'm not going to mince words. How's the

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Speaker 1: president's health and what is the dialogue forward for Joe

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Speaker 1: Biden given.

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Speaker 6: The health, Well, what he's going to have to do

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Speaker 6: is frankly, convince everybody that he's up to the job

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Speaker 6: and do a better job than he has so far.

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Speaker 6: I mean, I think the nadier of this was kind

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Speaker 6: of late February early March, preceding the State of the

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Speaker 6: Union with the Special Council report. He's been you know,

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Speaker 6: it's gotten better since then. He's been better since then,

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Speaker 6: But he's got a long way to go, and he's

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Speaker 6: going to have to sustain for about the next five

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Speaker 6: months the ability to show that he stood the so

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Speaker 6: capable of governing. To me, that's the key to the

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Speaker 6: entire election.

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Speaker 1: What's the optionality he has forward? Based on the calendar,

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Speaker 1: there's now June and then I assume the convention, excuse me,

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Speaker 1: and then there's something after that. What does the windows

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Speaker 1: of decision the President and his team and Missus Biden have.

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Speaker 6: Well, he's got this June twenty seventh, debate, and that's

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Speaker 6: going to tell you an awful lot about not just

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Speaker 6: Biden's health and Biden's ability to go forward, but also

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Speaker 6: how Democrats feel about it, and you know, going into

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Speaker 6: the uh going into their convention soon after that. If

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Speaker 6: he doesn't do well in the Junie debate, there's going

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Speaker 6: to be speculation is going to be right that the

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Speaker 6: party revolts. So there's a great potential roiling around politically,

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Speaker 6: which will probably express itself in the markets to some extent,

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Speaker 6: given the political and geopolitical implications.

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Speaker 1: I mean, Paul, I want to make clear, Paul that

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Speaker 1: there was no ill will from the people that asked

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Speaker 1: me about this this weekend. They're just mystified of what

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Speaker 1: the path is for the president given is there was

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Speaker 1: no nobody was like ranting or you know Republican's Maga

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Speaker 1: rant He was none of that.

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Speaker 4: It's just baffled off almost exactly.

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Speaker 3: On the other side, Terry, here in Manhattan, we have

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Speaker 3: got a little trial about to reconvene here today. Can

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Speaker 3: you put in context what this trial for former President

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Speaker 3: Trump and the other.

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Speaker 4: Legal issues are.

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Speaker 3: How are they kind of stacking up here in the

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Speaker 3: greater scheme of things as we plowed towards the election.

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Speaker 6: Well, you got a situation where, you know, six months

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Speaker 6: ago we were talking about this and we would have said, oh,

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Speaker 6: you know, these are all these trials are going to

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Speaker 6: be hugely significant for the for the path of the election.

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Speaker 6: You know, now it's it's fairly obvious that they won't be.

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Speaker 6: I think there's a a I asked myself on the election,

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Speaker 6: or excuse me, on the conviction likelihood, what would Tom

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Speaker 6: Wolfe think, you know, and Tom wolf would probably think

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Speaker 6: the conviction would exist just so the judge and the

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Speaker 6: jury could get you know, could get through the thing,

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Speaker 6: knowing that they could bucket along to an appeals. Beyond that,

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Speaker 6: I think it's a situation where it doesn't it doesn't

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Speaker 6: help Trump at all. It's sort but it hurts him

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Speaker 6: very little. Frankly, Uh, You've have a situation here, I

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Speaker 6: think where everybody who thinks he's wronged already thinks he's wrong.

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Speaker 6: And at most what happens here is you've got some

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Speaker 6: independent voters who will hesitate a little bit more because

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Speaker 6: this is a reminder of kind of the Trump circus

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Speaker 6: and the Trump drama. Beyond that, I don't think it

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Speaker 6: matters a lot.

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Speaker 3: How about the conventions that this summer Terry should should

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Speaker 3: Tom might be paying attention to these things?

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Speaker 6: Yeah? You should, Yeah, you should. The you know, the

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Speaker 6: conventions have turned into such you know, predigested comfort food

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Speaker 6: that there's usually not not much there for anybody. But

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Speaker 6: this time out, I mean, there's going to be a

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Speaker 6: lot more drama around the Democratic Convention as a result

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Speaker 6: of Biden's condition, as we've discussed, and on the Republican side,

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Speaker 6: I think what you need to look for is whether

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Speaker 6: Trump's successful or not in consolidating support, naturally unifying the

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Speaker 6: Republican Party, and actually starting to draw independence to him.

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Speaker 6: He needs both of those, as he did in twenty sixteen.

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Speaker 6: Right now he's got neither of those. So the convention,

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Speaker 6: you're going to tell you a lot about where that is.

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Speaker 1: Terry hates frame your guesstimate of what the White House,

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Speaker 1: the Senate, and the House looks like the first Wednesday

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Speaker 1: of November. What's your guess on which way they'll go?

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Speaker 6: Oh, I think I think Biden probably, aside from you

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Speaker 6: something that else that might happen today, I think Biden

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Speaker 6: probably squeaks through to victory. And I mean squeaks on

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Speaker 6: the strength of superior organization and message discipline. I think

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Speaker 6: the Senate is marginally Republican and the House is marginally Democrats.

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Speaker 6: So what you have is a kind of refraction of

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Speaker 6: the situation that exists today and without a lot of

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Speaker 6: without a lot different and the same or similar consequences

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Speaker 6: for fiscal and a bunch of the other things that

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Speaker 6: markets care about most.

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Speaker 1: Terry Haynes, thank you so much for the brief with

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Speaker 1: Peenjia policy. You did. Look at the front pages with

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Speaker 1: Lisa Matteo. Where do you start after a three day weekend?

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Speaker 7: You start with this interesting one from the Washington Post.

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Speaker 7: It put a couple studies together and it says that

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Speaker 7: more home buyers they're turning to the bank of mom

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Speaker 7: and dad to buy a home to get that down payment.

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Speaker 7: So Freddie Mack did this analysis of their home loans.

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Speaker 7: They share of young home buyers relying on older mortgage

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Speaker 7: co signers like family members most often the parents.

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Speaker 8: Yes, mom and Dad is as high as it's been.

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Speaker 7: In at least thirty years, So that's how bad it's getting.

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Speaker 7: Redfin suggests it picked up even more in twenty twenty

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Speaker 7: three and.

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Speaker 8: Here's the thing.

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Speaker 7: Parents are even taking out loans against their existing homes

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Speaker 7: to fund their children's homes.

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Speaker 8: This is how crazy.

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Speaker 7: And they're considering joint purchases where their kids as part

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Speaker 7: of this long term investment too. But the people who

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Speaker 7: are being left out are the people who don't have

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Speaker 7: that family.

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Speaker 1: On Twitter, so there's great feeds of busted properties. And

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Speaker 1: there's a fancy place in Nashville. Taylor Swift has a

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Speaker 1: unit in this fancy place and they do the own

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Speaker 1: versus rent differential in that fancy place in Nashville. It's

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Speaker 1: like New York City, Paul. It's like no one in

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Speaker 1: their right mind would buy. It's like a money pit.

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Speaker 1: And it's happening more around the COLT.

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Speaker 3: I think with the young folks, they've they got the

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Speaker 3: student debt and all that kind of stuff that it's

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Speaker 3: just it's tough there and with the interest rates where

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Speaker 3: they are again make it.

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Speaker 1: Or becoming like Europe everybody, not everybody, but more many

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Speaker 1: more people rent in Europe than here. Yeah, parents are taken.

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Speaker 8: Out, taken out loans in order to.

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Speaker 1: Just I'm lost on that next.

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Speaker 7: Yeah, I know, are you gonna are you gonna give

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Speaker 7: good cherubs a down payment here, that's the question. Okay,

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Speaker 7: this one is about the streaming wars, right, because you

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Speaker 7: hear a lot about these bundle TV offerings. You heard

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Speaker 7: about comcasts and things like that, But will it compete

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Speaker 7: with Americans who are kind of doing their own DIY

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Speaker 7: bundling because they're sharing the accounts with family members, friends,

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Speaker 7: co workers, even though some of those things may kind

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Speaker 7: of violate the service agreements that you're not.

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Speaker 8: Supposed to share. Uh So that's the question.

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Speaker 7: Consumers are tired of the description costs, right, and then

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Speaker 7: you have the companies who want to keep the customers.

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Speaker 7: So you have comcasts doing these bundlings. You have Disney

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Speaker 7: Warner Brothers, you know, doing these bundlings. You have the

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Speaker 7: ESPN Fox trying to do the sports streaming bundling.

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Speaker 8: But that's what they're saying the di Y.

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Speaker 1: I dealt with this this weekend, and I will cancel

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Speaker 1: two services this week. I haven't gotten to it. I

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Speaker 1: don't believe the names out of it.

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Speaker 3: It's easy to but I mean the number one issue here, well,

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Speaker 3: one of the big issues for the streaming companies that

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Speaker 3: you didn't have with a cable television or satellite. It's

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00:22:59,840 --> 00:23:03,280
Speaker 3: very very very easy to cancel your streaming service. It's

439
00:23:03,359 --> 00:23:06,800
Speaker 3: click of a button and so and that means churn

440
00:23:07,000 --> 00:23:07,960
Speaker 3: and they don't want churns.

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00:23:07,960 --> 00:23:11,200
Speaker 4: So in order to minimize churn, they're creating these bundles,

442
00:23:11,320 --> 00:23:13,320
Speaker 4: you know, and maybe that'll minimize churn.

443
00:23:13,400 --> 00:23:17,199
Speaker 3: So but again Netflix has been very good about, you know,

444
00:23:17,240 --> 00:23:20,280
Speaker 3: clamping down on the on the sharing the passwords.

445
00:23:20,600 --> 00:23:23,000
Speaker 8: We'll see I know I still at mine on it.

446
00:23:24,359 --> 00:23:26,240
Speaker 8: That goes all right?

447
00:23:26,359 --> 00:23:29,600
Speaker 7: Apple the Developers conference next month, right, big, big, big,

448
00:23:30,119 --> 00:23:32,399
Speaker 7: But they're betting on its giant customer base to kind

449
00:23:32,440 --> 00:23:34,760
Speaker 7: of give it that edge in the AI space. So

450
00:23:34,800 --> 00:23:37,240
Speaker 7: what they're doing is they're taking this different approach to AI.

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00:23:37,320 --> 00:23:40,000
Speaker 7: They want to focus on the tools that ordinary consumers

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00:23:40,000 --> 00:23:41,600
Speaker 7: can use, kind of like what Tom.

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00:23:41,440 --> 00:23:43,159
Speaker 8: What you were saying last week, Like what does this

454
00:23:43,240 --> 00:23:43,639
Speaker 8: mean for me?

455
00:23:44,160 --> 00:23:44,960
Speaker 5: What I want Mark?

456
00:23:45,640 --> 00:23:48,280
Speaker 1: I want Mark German to tell me what's the sw what?

457
00:23:48,520 --> 00:23:49,600
Speaker 1: And I'm not there yet.

458
00:23:49,880 --> 00:23:53,280
Speaker 7: Yeah, So they're they're doing exactly because of what you know,

459
00:23:53,520 --> 00:23:55,040
Speaker 7: things you're saying, and not just you, but a lot

460
00:23:55,080 --> 00:23:55,359
Speaker 7: of people.

461
00:23:55,560 --> 00:23:57,720
Speaker 8: This new strategy project gray Matter.

462
00:23:58,080 --> 00:23:59,760
Speaker 7: So they have a set of AI tools that the

463
00:23:59,760 --> 00:24:02,320
Speaker 7: come and he's going to integrate into apps like Safari,

464
00:24:02,440 --> 00:24:03,439
Speaker 7: photos and notes.

465
00:24:03,480 --> 00:24:06,720
Speaker 8: But there's other features, right. They have Serie Personal.

466
00:24:06,359 --> 00:24:09,439
Speaker 7: Assistant that's going to get an upgrade, series getting an upgrade.

467
00:24:09,440 --> 00:24:12,840
Speaker 7: They have Generative AI for emojis, with software that can

468
00:24:12,920 --> 00:24:16,760
Speaker 7: create custom emojis on the fly based on what you're texting.

469
00:24:16,920 --> 00:24:19,840
Speaker 7: So if you're texting someone like, hey, let's go out

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00:24:19,960 --> 00:24:23,040
Speaker 7: for dinner for pasta on Friday, a little pasta emoji

471
00:24:23,080 --> 00:24:25,320
Speaker 7: will like automatically, And that's going to.

472
00:24:25,320 --> 00:24:27,040
Speaker 4: Make my life so much that's going to make you

473
00:24:27,119 --> 00:24:28,040
Speaker 4: like so much better.

474
00:24:28,840 --> 00:24:29,080
Speaker 5: God?

475
00:24:29,160 --> 00:24:30,320
Speaker 4: Is that where we are these days?

476
00:24:30,480 --> 00:24:34,440
Speaker 7: Okay, but just about making things easier for their customers.

477
00:24:34,520 --> 00:24:37,080
Speaker 3: I don't think that this conference again, the developer conference,

478
00:24:37,119 --> 00:24:38,159
Speaker 3: I guess it's June seventh.

479
00:24:38,560 --> 00:24:39,200
Speaker 8: Yeah, I don't.

480
00:24:39,240 --> 00:24:40,920
Speaker 4: I think there's a lot built up in the stock.

481
00:24:40,960 --> 00:24:44,040
Speaker 3: I think investors want to see something transformative as it

482
00:24:44,080 --> 00:24:46,359
Speaker 3: relates to AI, to get that bump in the sock.

483
00:24:46,440 --> 00:24:48,280
Speaker 4: I'm not sure they're going to get it. I don't know.

484
00:24:48,440 --> 00:24:49,680
Speaker 8: It's a lot.

485
00:24:49,800 --> 00:24:51,879
Speaker 7: There's a lot, a lot of competition because there you

486
00:24:51,920 --> 00:24:54,640
Speaker 7: get Microsoft, Alphbits, Google, this is.

487
00:24:54,600 --> 00:24:58,200
Speaker 1: What June something. Yeah, it's like right around, it's right

488
00:24:58,240 --> 00:25:01,639
Speaker 1: around that fed me, is it more important than the

489
00:25:01,640 --> 00:25:02,080
Speaker 1: FED meat?

490
00:25:02,320 --> 00:25:03,320
Speaker 8: That's a good question.

491
00:25:04,080 --> 00:25:06,000
Speaker 1: Instead of doing the FED decides, you can do.

492
00:25:07,359 --> 00:25:11,240
Speaker 4: It's June tent I stands tractictent, competent.

493
00:25:11,040 --> 00:25:13,520
Speaker 1: Days before the FED meeting. Okay, you got anything else?

494
00:25:14,520 --> 00:25:17,960
Speaker 7: Summer sales, that's what we're talking about. Shop till you drop.

495
00:25:18,240 --> 00:25:20,840
Speaker 8: Okay. So the Associated Press gave this breakdown.

496
00:25:21,000 --> 00:25:23,720
Speaker 7: They talked about target cutting prices, right, They talked about

497
00:25:24,400 --> 00:25:27,600
Speaker 7: Walmart cutting prices. All the food shopping, A lot of

498
00:25:27,600 --> 00:25:30,960
Speaker 7: it is food, beverage, essential, household isands because people are

499
00:25:31,000 --> 00:25:31,880
Speaker 7: their budgets are tight.

500
00:25:32,440 --> 00:25:35,920
Speaker 8: Even restaurants. You have McDonald's introducing that five dollars meal deal.

501
00:25:35,960 --> 00:25:36,679
Speaker 8: They want to do that.

502
00:25:37,080 --> 00:25:39,280
Speaker 7: So a lot of CEOs are saying that people are

503
00:25:39,320 --> 00:25:43,280
Speaker 7: becoming more price conscious, more selective. They're doing the store

504
00:25:43,320 --> 00:25:44,040
Speaker 7: brands more.

505
00:25:44,200 --> 00:25:45,919
Speaker 4: And the next That's what I'm doing. I'm doing the

506
00:25:45,920 --> 00:25:46,600
Speaker 4: store brand more.

507
00:25:46,720 --> 00:25:47,639
Speaker 8: I started doing that too.

508
00:25:47,800 --> 00:25:50,440
Speaker 1: Yeah, well more for June Lisa Taylor, thank you, Lisa

509
00:25:50,440 --> 00:25:54,520
Speaker 1: Motel there with the newspapers as well. This is a

510
00:25:54,560 --> 00:25:59,560
Speaker 1: Bloomberg Surveillance podcast bringing you the best in economics, finance, investment,

511
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512
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513
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514
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515
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517
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Speaker 1: Bloomberg Business app.