WEBVTT - China's Chip Output and Apple's India Stores 0:00:01.280 --> 0:00:04.200 We're from Marhard where innovation, money and power. 0:00:04.320 --> 0:00:06.720 Collie in Silicon Valley, NBN. 0:00:07.040 --> 0:00:11.559 This is Bloomberg Technology with Caroline Hide and Ed Ludlove. 0:00:25.320 --> 0:00:26.920 IM Ed Ludlow in San Francisco. 0:00:27.000 --> 0:00:31.600 Caroline Hides out today this is Bloombag Technology. China's semiconductor 0:00:31.640 --> 0:00:34.559 and electronics output drops in the first quarter as a 0:00:34.560 --> 0:00:36.800 bullish rebound in the economy is. 0:00:36.760 --> 0:00:39.080 At odds with a smartphone slow. 0:00:38.880 --> 0:00:42.320 Down, and Apple pushes higher as Tim Cook opens the 0:00:42.440 --> 0:00:45.640 iPhone maker's first store in India. We bring you the 0:00:45.720 --> 0:00:49.800 details from Mumbai and California, and in Europe, bench capitalists 0:00:49.800 --> 0:00:53.120 are on pace for their worst funding year since twenty fifteen. 0:00:53.240 --> 0:00:56.920 Race Capitals Alfred Trung joins US to talk private markets. 0:00:57.080 --> 0:01:01.400 Does less capital mean fewer checks being cut? Well, first, 0:01:01.400 --> 0:01:03.200 it's going to check on those market's move As Katie 0:01:03.200 --> 0:01:05.559 Greif found out in New York, Hi, Kittie Hi. 0:01:05.600 --> 0:01:08.120 Ed, well, the bid has disappeared from the equity market. 0:01:08.160 --> 0:01:09.959 You're looking at the S and P five hundred off 0:01:09.959 --> 0:01:12.560 by about two tenths of a percent. The same thing 0:01:12.680 --> 0:01:15.240 sort of goes for the NASAQ one hundred, those big 0:01:15.319 --> 0:01:18.760 tech names. It's the financials that are interesting today. We're 0:01:18.760 --> 0:01:22.000 actually off the session lows that sector down about three 0:01:22.120 --> 0:01:22.800 tenths of percent. 0:01:22.880 --> 0:01:25.400 We know that Goldman Bake of America big. 0:01:25.160 --> 0:01:28.000 Wait today after reporting earnings earlier today, and the two 0:01:28.080 --> 0:01:30.600 year treasure yield up slightly about two. 0:01:30.560 --> 0:01:31.480 Basis points or so. 0:01:31.520 --> 0:01:34.240 You can see we are above four twenty on the 0:01:34.360 --> 0:01:35.559 two year treasure field. 0:01:35.600 --> 0:01:37.560 Let's get to the fun stuff though. Let's talk about Bitcoin. 0:01:37.800 --> 0:01:40.639 Bitcoin has been really interesting. It used to trade hand 0:01:40.640 --> 0:01:42.840 in hand with those tech socks. You can see that 0:01:42.840 --> 0:01:46.119 the relationship is really broken apart, and today's. 0:01:45.760 --> 0:01:47.119 Action drives that point home. 0:01:47.160 --> 0:01:49.600 You can see Bitcoin up by two and a half percent. 0:01:49.680 --> 0:01:53.040 It is above thirty thousand once again. It's going to 0:01:53.120 --> 0:01:55.760 be interesting to continue to watch this one and keep an. 0:01:55.640 --> 0:01:56.960 Eye on that correlation. 0:01:57.120 --> 0:01:59.120 But let's go from the big picture to some of 0:01:59.120 --> 0:02:02.000 those micro own names, and we should start with Nvidia 0:02:02.080 --> 0:02:05.320 higher by almost three percent today. It had one cell 0:02:05.400 --> 0:02:08.280 rating left that was HSBC that in lists changing its 0:02:08.360 --> 0:02:12.239 tune today a rare double upgrade. He went from a 0:02:12.520 --> 0:02:15.239 cell to a bye can see that is filtering through 0:02:15.240 --> 0:02:17.640 to n video shares. We're also looking at AMD. Not 0:02:17.760 --> 0:02:20.840 too much action there no real news that stock is 0:02:20.880 --> 0:02:23.200 hired by about half a percent or so on some 0:02:23.280 --> 0:02:25.400 heavy volume two, so keep an eye on that. And 0:02:25.440 --> 0:02:29.400 Southworth West Airlines briefly halted all of its flights due 0:02:29.440 --> 0:02:32.240 to a technology issue. As we understand, those flights of 0:02:32.240 --> 0:02:35.080 rezumed stock still off by about one point six percent. 0:02:35.800 --> 0:02:37.840 Yeah, we're going to get a deeper report in Southwest 0:02:37.919 --> 0:02:39.760 later on in the show. But it is interesting to 0:02:39.800 --> 0:02:42.120 note a little outperformance in the chip space. Thank you, 0:02:42.440 --> 0:02:45.000 Katie Greifert out in New York. So despite a bullish 0:02:45.040 --> 0:02:48.440 rebound in the economy, China's production of chips and other 0:02:48.480 --> 0:02:52.360 electronics are declining from slower sales as well as competitive 0:02:52.360 --> 0:02:55.400 pressures from factories that are in other locations joining me 0:02:55.400 --> 0:02:58.400 here in San Francisco, Bloomberg's Ian King. There is a 0:02:58.440 --> 0:03:01.399 short term story here and there is a longer term story. 0:03:01.440 --> 0:03:03.040 Let's start with the short term. What's happening? 0:03:03.240 --> 0:03:05.480 Yeah, I mean, think about what the companies have told us. 0:03:05.520 --> 0:03:08.560 I've said, Look, there's just too much inventory out there. 0:03:08.560 --> 0:03:11.240 There isn't enough phone demand, there isn't enough PC demand. 0:03:11.280 --> 0:03:13.840 We need to dig our way out of that mound 0:03:13.880 --> 0:03:16.400 of inventory and then we can go back to shipping 0:03:16.480 --> 0:03:19.800 towards what end demand is. The question is, well, where 0:03:19.919 --> 0:03:23.320 is end demand? Are we pre pandemic levels or are 0:03:23.320 --> 0:03:26.120 we at some level in between the pigs that we 0:03:26.160 --> 0:03:29.200 saw during the pandemic. We'll see in the second. 0:03:29.000 --> 0:03:31.840 Half that the broader debate is about supply chain de 0:03:32.040 --> 0:03:35.400 risking or diversifying moving out of China. What does this 0:03:35.520 --> 0:03:36.800 data signal about that? 0:03:37.200 --> 0:03:41.000 I think the big underlying concern and we won't really 0:03:41.040 --> 0:03:44.120 see that manifest itself until so the next year, the 0:03:44.200 --> 0:03:46.320 year after when a lot of these factories get built. 0:03:46.400 --> 0:03:49.080 Is governments everywhere around the world are saying, hey, we 0:03:49.120 --> 0:03:52.040 want a chip industry, we want a chip industry, throwing 0:03:52.040 --> 0:03:55.440 money at it. The economics that once drove where these 0:03:55.520 --> 0:03:58.800 chip plans were made arguably being upturned. So are we 0:03:58.840 --> 0:03:59.960 going to see excess. 0:03:59.640 --> 0:04:02.560 Supply over the Taiwan straight there's a bit more feel 0:04:02.600 --> 0:04:05.360 good about the state of chips and manufacturing TSMC. It's 0:04:05.400 --> 0:04:07.960 interesting look at the data on the Bloomberg the subject 0:04:08.000 --> 0:04:10.440 of our Techwatch column. A lot of bullishnists around that name. 0:04:10.760 --> 0:04:13.360 Yeah, I mean TSMC is a conduit for everyone. So 0:04:13.440 --> 0:04:17.080 if you believe in videos ai story, where does in 0:04:17.160 --> 0:04:21.800 video get its chip mode in Taiwan at TSMC, So 0:04:22.240 --> 0:04:24.359 you know, TSMC is kind of the way to play 0:04:24.400 --> 0:04:28.080 every angle here. Even though smartphones and PCs are kind 0:04:28.080 --> 0:04:31.440 of down, maybe AI is the play, as in videos 0:04:31.480 --> 0:04:32.360 would suggest. 0:04:32.040 --> 0:04:33.240 We I probably should have started with. 0:04:33.279 --> 0:04:37.000 In video Katie mentioned it it's final cell rating gone 0:04:37.120 --> 0:04:40.440 this morning, we'll bring up the where analysts see the 0:04:40.480 --> 0:04:43.480 stop but lots of bullishnis and it's all, well, it's 0:04:43.520 --> 0:04:45.200 partly about artificial intelligence. 0:04:45.320 --> 0:04:48.120 Yeah, I mean the HSBC report which was the final 0:04:48.120 --> 0:04:50.600 one to flip said, look, even though there aren't that 0:04:50.640 --> 0:04:53.120 many AI chips in the world, these things cost ten 0:04:53.279 --> 0:04:57.520 twenty grand each, right, that's ten times what a PC 0:04:57.680 --> 0:05:02.520 GPU cost. So even if PCs are bad, AI is 0:05:02.560 --> 0:05:05.680 good in terms of the ASP, the margins and everything else. 0:05:05.720 --> 0:05:07.000 That's the argument, all right. 0:05:07.040 --> 0:05:10.599 Thanks to Bloombozine king on Everything Semiconductor, and we talked 0:05:10.600 --> 0:05:13.960 about China. China's economy actually growing at the fastest pace 0:05:14.000 --> 0:05:16.720 in a year in the first quarter, giving the market 0:05:16.880 --> 0:05:18.800 some optimism, which I have to say was pretty short 0:05:18.800 --> 0:05:21.800 lived because we're now getting some jitters over a report 0:05:21.839 --> 0:05:24.920 that Saint Louis fed President James Billard is in favor 0:05:24.960 --> 0:05:28.039 at this time of more policy tightening, joining us to 0:05:28.080 --> 0:05:31.840 talk these markets. Emily Hill, CEO and founding partner of 0:05:31.920 --> 0:05:36.000 Bawasok Capital. Let's go to China first, Emily, in very 0:05:36.080 --> 0:05:39.240 basic terms, there was optimism and around that the reopening 0:05:39.240 --> 0:05:42.960 of the economy, strong GDP print. How in the markets 0:05:43.000 --> 0:05:43.919 do you interpret that? 0:05:46.440 --> 0:05:48.919 Well, we got pretty good GDP numbers out of China, 0:05:49.000 --> 0:05:51.480 four to five percent. The government's target for the year 0:05:51.640 --> 0:05:55.280 is about five So I think it shows that reopening 0:05:55.880 --> 0:05:59.440 is having exactly the effect that people anticipated. Consumers are 0:05:59.440 --> 0:06:02.720 getting out spending and that will be inflationary for the 0:06:02.760 --> 0:06:07.440 rest of the global economy. More demand for commodities, including oil, 0:06:08.160 --> 0:06:11.040 and so while it will help economic growth from an 0:06:11.040 --> 0:06:14.440 inflation perspective, is probably not a positive. 0:06:15.560 --> 0:06:17.440 Let's bring it back here to the United States and 0:06:17.480 --> 0:06:19.479 the FED, and I promise you we will talk about 0:06:19.520 --> 0:06:24.360 the technology sector. But Fed's Ballard saying that basically these 0:06:24.440 --> 0:06:27.760 ideas of recession are a little bit overdone and that 0:06:27.760 --> 0:06:32.160 he wants to see the discussion around more hikes. What's 0:06:32.200 --> 0:06:34.440 your interpretation of FED speak right now? 0:06:37.400 --> 0:06:41.279 I think that the market is continuing to not get 0:06:41.279 --> 0:06:44.560 the FED message, and I've been saying that consistently and 0:06:44.600 --> 0:06:47.520 I think part of the issue is that all of 0:06:47.560 --> 0:06:50.120 the hikes in recent memory, if you look back at 0:06:50.120 --> 0:06:53.960 the last thirty years, took place in an environment that 0:06:54.080 --> 0:06:57.880 was essentially disinflationary. We had low inflation. It was a 0:06:58.000 --> 0:07:00.960 very different environment than one we have now. And so 0:07:01.480 --> 0:07:05.360 last thirty years, the pauses by the FED have extended 0:07:05.400 --> 0:07:09.120 from about six months to about fourteen months. And you're 0:07:09.200 --> 0:07:13.800 still seeing large parts of the market expecting a rate 0:07:13.840 --> 0:07:17.520 cut by the end of this year. And so I 0:07:17.560 --> 0:07:21.560 think they're going to be some disappointed investors. And so 0:07:21.640 --> 0:07:23.760 I think, you know, while you do have some dubbish 0:07:23.800 --> 0:07:27.640 members FED, none of them are really talking about a 0:07:27.760 --> 0:07:31.000 rate cut in twenty twenty three. If we were to 0:07:31.040 --> 0:07:32.880 have a rate cut, it would mean that we had 0:07:33.600 --> 0:07:38.160 a hard landing, and that's not good for stock Emily. 0:07:38.200 --> 0:07:40.920 This is Bloomberg Technology. Let's talk a little bit about 0:07:41.000 --> 0:07:45.120 the technology sector. You know, if you expect this rate 0:07:45.280 --> 0:07:49.000 and inflation regime to persist, where do you want to 0:07:49.040 --> 0:07:51.560 position yourself within the technology landscape. 0:07:54.640 --> 0:07:58.200 Well, you know, there's defensive tech, which I would put 0:07:58.240 --> 0:08:00.720 Apple into that category, and I think it is sort 0:08:00.720 --> 0:08:04.000 of Apple is the you know, Johnson and Johnson of 0:08:04.200 --> 0:08:07.680 the twenty first century. Right, it's it's it's looked at 0:08:07.840 --> 0:08:10.840 as a safe bet. You know, it now comprises seven 0:08:10.880 --> 0:08:13.240 to eight percent of the S and P, which I 0:08:13.280 --> 0:08:16.600 think is something that you know, should raise a few eyebrows. 0:08:16.880 --> 0:08:18.880 But if the parts of you know, but I would 0:08:18.920 --> 0:08:22.400 say that Apple and these this you know, safe defensive 0:08:22.520 --> 0:08:27.120 tech is now a little bit richly priced. So if 0:08:27.120 --> 0:08:30.600 I want to look in the tech sector for good values, 0:08:31.080 --> 0:08:33.840 I'm going to look at or I would really actually 0:08:33.840 --> 0:08:37.560 even look at tech adjacent sectors. So the parts of 0:08:37.600 --> 0:08:40.880 the of the tech sector that have not gone through 0:08:40.880 --> 0:08:43.600 the roof this year, you know, the NAVVAC one hundred 0:08:43.640 --> 0:08:46.760 is up almost twenty percent, and I think that's overdone. 0:08:48.600 --> 0:08:50.280 If you're going to be a little bit more dynamic 0:08:50.320 --> 0:08:53.839 and look for opportunity in this market away from when 0:08:53.880 --> 0:08:56.679 you call them a defensive riting, you're suggesting look at 0:08:56.679 --> 0:09:00.440 the balance sheet, look at this company's staying power through session. 0:09:00.880 --> 0:09:03.800 But technologically speaking, what are the corners of the market 0:09:03.800 --> 0:09:04.600 that excite you? 0:09:06.520 --> 0:09:11.200 Okay, well, I would say companies like Corning that are 0:09:11.559 --> 0:09:16.520 manufacturing products used by Apple, so they make differentiated glass products. 0:09:16.559 --> 0:09:21.480 They make the gorilla glass for iPhone ceramic shield. They 0:09:21.520 --> 0:09:26.559 make ceramic substrates that are used in cutting carbon emissions, 0:09:26.880 --> 0:09:30.400 and so they're you know, a less exciting, you know, 0:09:30.600 --> 0:09:35.160 tech software innovative company. But this company has been innovating 0:09:35.679 --> 0:09:38.959 for you know, one hundred and seventy years. So I've 0:09:39.000 --> 0:09:41.520 got an alarm going off here that I'm going. 0:09:41.320 --> 0:09:46.160 To now dealing with the technology in real time. We 0:09:46.200 --> 0:09:46.480 love it. 0:09:46.520 --> 0:09:55.800 This is Bloomberg Technology, put it into practice. 0:09:58.800 --> 0:10:02.000 Bostonmai and that in Deli. Customers are lining up as 0:10:02.000 --> 0:10:05.640 Apple opens its first two stores in India. They may 0:10:05.640 --> 0:10:07.480 not be as unique as the Cube in New York, 0:10:07.520 --> 0:10:09.600 but they have all the features that Apple stores do 0:10:09.800 --> 0:10:13.680 worldwide today in Apple Apple store trade ins and the 0:10:13.679 --> 0:10:17.000 customery site of CEO Tim Cook at the front door 0:10:17.000 --> 0:10:20.200 on the first day welcoming the first few customers. Now 0:10:20.200 --> 0:10:23.960 between meeting Prime Minister Mobi of knobbing with business leaders 0:10:24.120 --> 0:10:27.040 here in Mumbai and then in Delhi and eating Mumbai 0:10:27.120 --> 0:10:31.080 Verapau with film stars. Tim Cook's visit to India and 0:10:31.120 --> 0:10:35.440 these store openings mark a significant next step in the 0:10:35.480 --> 0:10:40.960 India Apple relationship. India presents a critical supply chain diversification 0:10:41.040 --> 0:10:46.080 opportunity for Apple China manufactures more than ninety percent of 0:10:46.200 --> 0:10:49.800 iPhones to airports. Tim Cook says Apple is taking all 0:10:49.840 --> 0:10:52.920 that it learned in China out of scale China and 0:10:53.000 --> 0:10:56.200 bringing that to bear here in India. Compared to its neighbor, 0:10:56.360 --> 0:11:00.400 India is a tiny market for Apple, with just about 0:11:00.400 --> 0:11:04.240 six billion dollars in annual sales last year, but that's 0:11:04.280 --> 0:11:08.760 about fifty percent more than the year before. Local manufacturer 0:11:08.800 --> 0:11:12.520 will allow Apple to reduce some of the import taxes 0:11:12.559 --> 0:11:16.480 that it pays and make its products less expensive for 0:11:16.600 --> 0:11:20.920 Indian consumers. Two of Apple's three contract manufacturers here in 0:11:20.960 --> 0:11:25.719 the country are major beneficiaries of a flagship production incentive 0:11:25.840 --> 0:11:29.920 scheme launched by Prime Minister or In Removie's government. India 0:11:29.960 --> 0:11:33.559 too is hoping that Apple can pull a China here 0:11:34.160 --> 0:11:41.240 help build a manufacturing ecosystem that boosts jobs and exports. Medikadoshi, 0:11:41.480 --> 0:11:42.360 Bloomberg News. 0:11:44.920 --> 0:11:48.720 That was Bloomberg's India Senior editor Mana Kadoshi. Let's guess 0:11:48.800 --> 0:11:51.719 more on Apple's new expansion in India and bring in 0:11:51.920 --> 0:11:56.400 Bloomberg's Mark German Mark You reported a few weeks ago 0:11:56.440 --> 0:12:00.679 that even internally, Apple has been restructuring to to serve 0:12:00.760 --> 0:12:04.280 that market in India. What's the latest there. 0:12:05.120 --> 0:12:07.960 Yeah, India's all the hype for Apple right now. Really 0:12:08.000 --> 0:12:11.360 outside of these two retail stores, right, these retail stores 0:12:11.600 --> 0:12:14.840 probably not going to move the needle for Apple as 0:12:14.840 --> 0:12:19.400 a company revenue wise, even in India itself. Most Apple 0:12:19.480 --> 0:12:22.960 products in India and elsewhere, of course are going to 0:12:22.960 --> 0:12:26.760 be bought by consumers at third party retail stores or 0:12:26.800 --> 0:12:30.920 online or carrier partners, right. But this shows Apple's dedication 0:12:31.040 --> 0:12:33.560 to the area. These stores are not small investments. You 0:12:33.600 --> 0:12:37.000 have to hire one hundred people plus per store, You 0:12:37.000 --> 0:12:39.559 have to do inventory. They're setting up the Genius Bar 0:12:39.640 --> 0:12:43.280 and classes in India for the first time, and internally 0:12:43.360 --> 0:12:47.000 this year, they're restructuring their sales organization. So the head 0:12:47.000 --> 0:12:49.880 of India sales, right, what's known as their managing director 0:12:49.960 --> 0:12:52.720 or country manager for India, is now going to report 0:12:52.720 --> 0:12:55.160 directly to Apple's head of sales globally. 0:12:55.440 --> 0:12:55.640 Right. 0:12:55.679 --> 0:12:58.360 That's going to be a first. Previously you had a 0:12:58.480 --> 0:13:02.040 vice president in between who oversaw India as well as 0:13:02.080 --> 0:13:05.160 other emerging markets like Eastern Europe and Africa, So that 0:13:05.280 --> 0:13:08.679 layer has been removed, sort of elevating the importance of 0:13:08.800 --> 0:13:11.520 India within the company's operations itself. 0:13:12.520 --> 0:13:14.520 There's a lot of data when it comes to Apple 0:13:14.559 --> 0:13:16.640 flying out of India right now. You know that the 0:13:16.720 --> 0:13:20.520 latest reporting from Bloomberg is from a sales perspective, six 0:13:20.559 --> 0:13:23.559 billion dollars for the twelve month period through March. That's 0:13:23.679 --> 0:13:25.960 just one side of the story. The other is supply 0:13:26.120 --> 0:13:29.320 chain and manufacturing, right and I think the latest reporting 0:13:29.320 --> 0:13:33.560 from Bloomberg is the dollar value of exports or iPhones 0:13:33.600 --> 0:13:36.600 constructed in that nation hitting new milestone as well. What 0:13:36.760 --> 0:13:41.040 is the strategy for Apple in having a supply chain 0:13:41.080 --> 0:13:42.000 base in that nation. 0:13:43.240 --> 0:13:46.000 Yeah, the strategy for Apple to have a supply chain 0:13:46.040 --> 0:13:48.920 base in India is twofold one. You really need to 0:13:49.000 --> 0:13:52.520 manufacture devices that you're selling in India in India itself 0:13:53.000 --> 0:13:55.640 to save on some of those import taxes, right, which 0:13:55.679 --> 0:13:58.960 are incredibly high as they are in Brazil, another place 0:13:58.960 --> 0:14:01.360 where Apple has set up shop to produce iPhone. So 0:14:01.400 --> 0:14:04.480 that's one part of it. The bigger component is diversification. 0:14:04.880 --> 0:14:07.960 Right until now, Apple had mostly produced all of its 0:14:07.960 --> 0:14:10.839 devices in China. But over the last four to five 0:14:10.920 --> 0:14:13.880 years or so, you've seen issues related to tariffs, You've 0:14:13.880 --> 0:14:16.800 seen the potential trade war between the US and China. 0:14:16.960 --> 0:14:20.120 You've seen these COVID zero policies in China. You've seen 0:14:20.160 --> 0:14:23.560 the impact of the virus in China on Apple's production, 0:14:23.720 --> 0:14:26.440 so you've seen delay after delay to key products, the 0:14:26.480 --> 0:14:29.800 MacBook Air last year, the iPhone fourteen Pro. This was 0:14:30.000 --> 0:14:32.360 just at the end of twenty twenty two, right two 0:14:32.480 --> 0:14:36.160 years plus into COVID, and you saw major shutdowns at Fox. 0:14:36.160 --> 0:14:39.760 Cond prevented Apple from selling as many iPhone fourteen pros 0:14:39.800 --> 0:14:42.720 as possible. So you really need to diversify to try 0:14:42.720 --> 0:14:45.400 to avoid problems like that, and that's what you're seeing 0:14:45.400 --> 0:14:48.840 Apple lay the groundwork for in India primarily, but also 0:14:48.880 --> 0:14:51.560 in places like Vietnam, in Malaysia and Brazil as well, 0:14:51.640 --> 0:14:53.360 plus a little bit of Ireland. 0:14:54.640 --> 0:14:57.200 So that's the India story. Let's go a bit more global. 0:14:57.560 --> 0:14:59.960 We asked our audience if you're going to buy an 0:15:00.000 --> 0:15:02.560 Apple products, where do you do it? 0:15:02.600 --> 0:15:03.120 Install? 0:15:03.640 --> 0:15:07.040 Online or as you explaining from a third party right 0:15:07.080 --> 0:15:12.280 other retailers. Fifty five percent respondents online is where they're buying. 0:15:13.640 --> 0:15:17.120 What is store strategy broadly for Apple? What is the 0:15:17.120 --> 0:15:20.120 future of the Apple store with its shiny glass windows? 0:15:20.880 --> 0:15:22.760 You know, I think the poll is a little skewed, right, 0:15:22.800 --> 0:15:25.400 it was a Twitter poll and perhaps our audience on Twitter. 0:15:25.440 --> 0:15:27.760 There are people who you know want to go to 0:15:27.880 --> 0:15:30.160 an Apple store to buy an iPhone, or they live 0:15:30.200 --> 0:15:33.120 near Apple stores. But the actual truth is that the 0:15:33.200 --> 0:15:36.640 vast majority of iPhones, at least they're actually purchased through 0:15:36.680 --> 0:15:39.880 third party retailers and carriers, right, whether that's your Verizon 0:15:39.960 --> 0:15:42.840 store in the US, or your O two store in 0:15:42.880 --> 0:15:46.760 the UK, or in Best Buyer Target or elsewhere in 0:15:46.800 --> 0:15:49.120 the US, or Carphone Warehouse in Europe. 0:15:49.200 --> 0:15:49.400 Right. 0:15:49.720 --> 0:15:52.200 And so Apple really wants a lot more of those 0:15:52.200 --> 0:15:55.800 sales to flow through its own retail stores, right. And 0:15:55.840 --> 0:15:58.720 we've seen a slow down and expansion for retail stores 0:15:58.720 --> 0:16:01.200 over the last three to four years or so, primarily 0:16:01.280 --> 0:16:02.240 due to COVID. 0:16:01.960 --> 0:16:02.640 And other reasons. 0:16:02.640 --> 0:16:04.640 They have so many at this point, But what you're 0:16:04.680 --> 0:16:07.720 seeing is they're pushing more stores now in that Asia area, right. 0:16:07.760 --> 0:16:11.040 You have India, They've opened more stores in Korea recently, 0:16:11.120 --> 0:16:13.440 and then they have stores coming in Malaysia as well, 0:16:13.880 --> 0:16:17.080 So clearly their expansion is Asia related at this point. 0:16:17.360 --> 0:16:17.600 Mark. 0:16:17.640 --> 0:16:19.800 The other big story of the week is Apple in 0:16:19.880 --> 0:16:22.840 partnership with Goldman Sachs offering a savings account with a 0:16:22.920 --> 0:16:25.680 four point one five percent yield. 0:16:25.800 --> 0:16:26.920 Why is Apple doing that? 0:16:27.760 --> 0:16:30.920 Yeah, so this was actually introduced several months ago, right, 0:16:30.960 --> 0:16:33.320 it was a little bit delayed. It's now rolling out 0:16:33.360 --> 0:16:35.520 in the Wallet app if you have an Apple Card. 0:16:36.000 --> 0:16:38.280 And you know, some people think that Apple has big 0:16:38.320 --> 0:16:40.760 ambitions here, and that is absolutely true. 0:16:41.360 --> 0:16:42.760 But the reality is is. 0:16:42.680 --> 0:16:44.480 That this is still going to be US only and 0:16:44.560 --> 0:16:48.200 still Apple Card only. Eventually, this is probably going to 0:16:48.240 --> 0:16:51.280 expand as the Apple Card expands, hopefully. I know a 0:16:51.280 --> 0:16:52.960 lot of people in Europe and Canada want to get 0:16:52.960 --> 0:16:55.320 their hands on that. Four point one five percent is 0:16:55.360 --> 0:16:58.280 a pretty good rate. That's actually a quarter percent higher 0:16:58.280 --> 0:17:00.400 than the rate that Goldman offers if you were to 0:17:00.440 --> 0:17:03.920 create a savings account through the Goldman website versus through 0:17:03.960 --> 0:17:06.000 the Apple Card. And this is Apple wanting to give 0:17:06.040 --> 0:17:07.640 more people reasons. 0:17:07.520 --> 0:17:08.920 To hold onto their iPhone. 0:17:09.000 --> 0:17:11.320 Right, if you have your savings account in your phone, 0:17:11.440 --> 0:17:13.520 It's gonna make it all but impossible every time they 0:17:13.560 --> 0:17:15.720 add a new layer or a new feature to switch away 0:17:15.720 --> 0:17:17.240 to Android or to another product. 0:17:18.160 --> 0:17:20.760 All right, Bloomberg's Mark German with all the latest on Apple. 0:17:20.840 --> 0:17:24.119 Thank you coming up. Revenue from fixed income one of 0:17:24.160 --> 0:17:27.080 the main highlights as big banks like Goldman Sachs but 0:17:27.119 --> 0:17:30.320 also Bank of America report quarterly results. We'll get more 0:17:30.320 --> 0:17:33.560 on how those lenders performed coming. 0:17:33.280 --> 0:17:35.120 Up, But let's take a look at some of the stocks. 0:17:35.160 --> 0:17:38.479 How we're moving, how we're reacting. Some interesting numbers. 0:17:38.480 --> 0:17:41.600 But you look at the equity markets in the banking space, 0:17:41.760 --> 0:17:44.439 Goldman down one and a half percent, Bank of America 0:17:44.480 --> 0:17:47.040 off by eight tens of a percent. Why we'll ask 0:17:47.080 --> 0:17:49.040 that question next with Bloomberg shn Ali Bassak. 0:17:49.440 --> 0:17:50.720 This is Bloomberg. 0:18:00.320 --> 0:18:03.240 Coarsely results from Bank of America and Goldman Sachs show 0:18:03.280 --> 0:18:06.320 different approaches to fixed income trading, with Bank of America 0:18:06.400 --> 0:18:10.399 topping estimates as fixed income trading drives profits. Meanwhile, Goldman 0:18:10.560 --> 0:18:12.840 Sacks failed to catalyze on the trend. 0:18:13.359 --> 0:18:14.000 Who else is. 0:18:13.960 --> 0:18:17.080 Here but Bloomberg News Will Street Reports Shnalie Bassett give 0:18:17.119 --> 0:18:19.760 me the banking scorecard this Tuesday morning. 0:18:19.920 --> 0:18:21.879 Yeah, it's hard not to pay attention to those trading 0:18:21.920 --> 0:18:25.280 numbers because they've posted. Goldman Sachs had posted a drop 0:18:25.720 --> 0:18:28.560 relative to the others that was worth noticing because you 0:18:28.640 --> 0:18:31.560 saw beats a JP Morgan City Group and at Bank 0:18:31.600 --> 0:18:34.600 of America. However, I would still say that these are 0:18:34.720 --> 0:18:38.400 broader market moves as well, because you have the commodities 0:18:38.440 --> 0:18:40.800 business not as strong as it was a year ago 0:18:41.000 --> 0:18:43.600 when you had massive volatility in the industry, and same 0:18:43.640 --> 0:18:44.480 with currencies. 0:18:44.680 --> 0:18:45.560 I do want to point to. 0:18:45.480 --> 0:18:47.679 Some other things in the businesses here too, because remember 0:18:47.680 --> 0:18:50.159 Goldman Sacks had cut some headcount here, while Bank of 0:18:50.200 --> 0:18:53.920 America became the third big bank to show increasing headcount. 0:18:54.000 --> 0:18:56.360 That is a fascinating story at a time where we've 0:18:56.400 --> 0:18:59.160 seen a lot of pressure on jobs across the entire market. 0:18:59.359 --> 0:19:01.359 I want to take a little bit of a technology 0:19:01.359 --> 0:19:04.080 angle here as well, because as we know Goldman, as 0:19:04.119 --> 0:19:07.280 people look to how they are reshaping the firm to 0:19:07.560 --> 0:19:10.879 the consumer business, the business tied to Marcus is of 0:19:11.040 --> 0:19:13.520 high attention, and you have David Solomon, the CEO of 0:19:13.520 --> 0:19:17.119 Goldman Sachs, saying that they're exploring a sale of green Sky. 0:19:17.600 --> 0:19:20.199 This is the installment lending platform they had bought just 0:19:20.240 --> 0:19:23.120 a couple of years ago. So that is still something 0:19:23.280 --> 0:19:26.520 as Goldman transforms is weighing on its results in the 0:19:26.520 --> 0:19:29.399 near term. But again we're looking over to the other side. 0:19:29.600 --> 0:19:31.320 Bank of America, by the way, pulling in lots of 0:19:31.320 --> 0:19:34.360 deposits here and lots of new clients rather as deposits 0:19:34.400 --> 0:19:36.959 are under pressure as we watch to see how this 0:19:37.040 --> 0:19:40.200 kind of banking trump tumble really starts to play out 0:19:40.760 --> 0:19:41.400 so real quick. 0:19:41.400 --> 0:19:44.520 There's also tension here for Goldman, right questions about hold 0:19:44.560 --> 0:19:47.760 on you have Marcus, we also have now Apple savings 0:19:47.760 --> 0:19:49.960 of four point one five percent yield. Don't they do 0:19:50.040 --> 0:19:50.560 the same thing. 0:19:50.760 --> 0:19:53.240 I'm really glad you asked that, because the answer is no. 0:19:54.000 --> 0:19:56.040 On one hand, you do have a consumer business here. 0:19:56.080 --> 0:19:59.600 They've folded into platform solutions by working with Apple at 0:19:59.640 --> 0:20:03.879 four one point one five percent. This really intense yield 0:20:03.920 --> 0:20:06.880 you're getting from that Apple savings product. With Goldman Sacks, 0:20:06.920 --> 0:20:10.520 it's pulling deposits, lowering the cost of funding for gold 0:20:10.640 --> 0:20:13.720 and Sacks, whereas they're selling loans associated with that Marcus 0:20:13.760 --> 0:20:16.360 portfolio and as you know, lending to high networth individuals 0:20:16.359 --> 0:20:17.479 and private wealth instead. 0:20:18.240 --> 0:20:20.560 All right, Bloomberg Shnali Bassek on the Wall Street Beat, 0:20:28.960 --> 0:20:32.440 Welcome back to Bloomberg Technology, Imed Lovelow in San Francisco. 0:20:32.520 --> 0:20:34.440 Let's get a little check on the markets here. We 0:20:34.520 --> 0:20:36.560 kind of turned a corner in the last few minutes, 0:20:36.600 --> 0:20:38.680 and as that one hundred modestly hired just a tenth 0:20:38.720 --> 0:20:42.240 to one percent, basically flat without performance in the chip sector. 0:20:42.280 --> 0:20:46.560 Comments from Saint Louis FED President James Bullard basically saying 0:20:46.760 --> 0:20:50.560 more hikes still on the table and the market digesting that. 0:20:50.600 --> 0:20:52.360 Look at the short end of the curve, the two 0:20:52.400 --> 0:20:55.160 year up by three basis points four point two two percent. 0:20:55.480 --> 0:20:57.760 Bitcoin is Katie Greifeld was telling us earlier in the 0:20:57.840 --> 0:21:01.480 program holding above thirty five, I was in US dollars 0:21:01.520 --> 0:21:04.920