1 00:00:02,520 --> 00:00:10,560 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business 2 00:00:10,560 --> 00:00:14,720 Speaker 1: Weekdaily reporting from the magazine that helps global leaders stay 3 00:00:14,760 --> 00:00:18,800 Speaker 1: ahead with insight on the people, companies, and trends shaping 4 00:00:18,840 --> 00:00:23,760 Speaker 1: today's complex economy, plus global business finance and tech news 5 00:00:23,800 --> 00:00:27,800 Speaker 1: as it happens. The Bloomberg Business Week Daily Podcast with 6 00:00:27,960 --> 00:00:31,760 Speaker 1: Carol Masser and Tim Steneveek on Bloomberg Radio. 7 00:00:32,240 --> 00:00:35,320 Speaker 2: Amazon shares down about three percent in the after hours. 8 00:00:35,400 --> 00:00:38,240 Speaker 2: The company sees third quarter operating income fifteen and a 9 00:00:38,280 --> 00:00:40,600 Speaker 2: half to twenty point five billion dollars. I was in 10 00:00:40,600 --> 00:00:43,400 Speaker 2: line with estimates that are at nineteen point four two billion. 11 00:00:43,440 --> 00:00:45,720 Speaker 2: I guess maybe on the lower side it's not in line, 12 00:00:45,720 --> 00:00:47,760 Speaker 2: and that could be why the stock is moving a 13 00:00:47,800 --> 00:00:51,200 Speaker 2: little lower. Sad quarter operating income though blue past estimates 14 00:00:51,400 --> 00:00:53,480 Speaker 2: at nineteen point one seven billion dollars. 15 00:00:53,560 --> 00:00:56,360 Speaker 3: Yeah, I do think that third quarter operating income could possibly, 16 00:00:56,520 --> 00:00:59,000 Speaker 3: especially the downside or the lower end of the estimate, 17 00:00:59,280 --> 00:01:01,600 Speaker 3: be problematic. Let's see what our team has to say. 18 00:01:02,480 --> 00:01:04,200 Speaker 3: It is such a massive company, as you know, we 19 00:01:04,240 --> 00:01:07,160 Speaker 3: need two Bloomberg Intelligence analysts to really break it down 20 00:01:07,200 --> 00:01:10,080 Speaker 3: with us. Is Senior technology analyst Anna rog Rana and 21 00:01:10,160 --> 00:01:13,480 Speaker 3: senior analysts. Excuse me for e commerce and at leisure, 22 00:01:13,760 --> 00:01:16,840 Speaker 3: Punam Goyle at a RAG out there in our Chicago bureau, 23 00:01:16,840 --> 00:01:19,520 Speaker 3: and we've got Punum in our Princeton bureau. Hey, Anag, 24 00:01:19,560 --> 00:01:21,920 Speaker 3: I want to start with you because AWS is always 25 00:01:21,959 --> 00:01:24,440 Speaker 3: so important when it comes to the top and bottom 26 00:01:24,440 --> 00:01:27,520 Speaker 3: line here at Amazon. Walk us through what we got 27 00:01:27,520 --> 00:01:28,720 Speaker 3: on that side of the business. 28 00:01:29,040 --> 00:01:31,360 Speaker 4: Yeah, I mean, as you see, you know, they met 29 00:01:31,600 --> 00:01:36,160 Speaker 4: expectations on aw's growth of seventeen percent in constant currency. 30 00:01:36,200 --> 00:01:38,360 Speaker 4: But you know, this is where we are saying that 31 00:01:38,400 --> 00:01:41,520 Speaker 4: this is probably not good enough because Microsoft beat by 32 00:01:41,560 --> 00:01:44,039 Speaker 4: a big number, Google beat by a big number, and 33 00:01:44,080 --> 00:01:45,600 Speaker 4: the big question is going to be, you know, why 34 00:01:46,160 --> 00:01:48,240 Speaker 4: didn't Amazon beat by a big number? And I think 35 00:01:48,400 --> 00:01:50,200 Speaker 4: that's going to be probably one of the most important 36 00:01:50,280 --> 00:01:52,760 Speaker 4: questions on the call, and we look forward to hearing 37 00:01:52,800 --> 00:01:54,240 Speaker 4: what management has to say about it. 38 00:01:54,760 --> 00:01:56,880 Speaker 2: I want to bring in Punham here because one thing 39 00:01:56,880 --> 00:01:58,920 Speaker 2: that I noticed when I was reading this in real 40 00:01:58,960 --> 00:02:02,920 Speaker 2: time the statement from CEO Andy Jasse also president over 41 00:02:02,960 --> 00:02:06,200 Speaker 2: at Amazon Punham how much he talked about the connection 42 00:02:06,320 --> 00:02:11,760 Speaker 2: between the shopping experience for Amazon's core customer and artificial intelligence, 43 00:02:11,800 --> 00:02:14,399 Speaker 2: because up to now and maybe I'm wrong, but I've 44 00:02:14,400 --> 00:02:17,600 Speaker 2: thought about AI and the context of AWS. But what 45 00:02:17,760 --> 00:02:20,440 Speaker 2: he's trying to communicate to investors is the effect that 46 00:02:20,480 --> 00:02:24,000 Speaker 2: AI is happening is having on how people are buying stuff. 47 00:02:24,400 --> 00:02:25,400 Speaker 2: Is it actually doing that? 48 00:02:26,360 --> 00:02:29,040 Speaker 5: Yeah? Absolutely. You know, AI is a big deal in 49 00:02:29,080 --> 00:02:32,480 Speaker 5: e commerce and Amazon's been investing a lot to improve 50 00:02:32,520 --> 00:02:35,160 Speaker 5: the customer experience. It starts with search. Right when you 51 00:02:35,240 --> 00:02:38,560 Speaker 5: go to Amazon and you're searching something, They've just improved it. 52 00:02:38,639 --> 00:02:41,679 Speaker 5: And they've also launched Rufus, which is their AI or 53 00:02:41,720 --> 00:02:45,800 Speaker 5: your personal assistant, So that's really been helping shoppers and 54 00:02:46,080 --> 00:02:48,040 Speaker 5: just you know, figure out what they want to buy. 55 00:02:48,080 --> 00:02:50,760 Speaker 5: You want to buy a microwave, but what microwave is better? 56 00:02:51,440 --> 00:02:54,720 Speaker 5: The shopping assistant helps you not only bring choices forward, 57 00:02:54,800 --> 00:02:58,239 Speaker 5: but also helps you navigate through the descriptions of pricing, etc. 58 00:02:58,800 --> 00:03:01,919 Speaker 5: So it really helps improve conversion. And that's where AI 59 00:03:02,040 --> 00:03:03,680 Speaker 5: is helping on the shopping side. 60 00:03:03,760 --> 00:03:05,680 Speaker 2: Are you what metrics do you look at Punham to 61 00:03:05,680 --> 00:03:08,200 Speaker 2: make sure that the investments that they're making are actually 62 00:03:08,280 --> 00:03:10,160 Speaker 2: leading me to spend more money on Amazon? 63 00:03:11,120 --> 00:03:13,600 Speaker 5: So Amazon doesn't share all the metrics that we'd like 64 00:03:13,680 --> 00:03:16,079 Speaker 5: to see, but we know that they've talked about conversion 65 00:03:16,080 --> 00:03:18,639 Speaker 5: and how that's improving. So I think that's the number 66 00:03:18,680 --> 00:03:21,519 Speaker 5: one metric to any extent when we get color around that, 67 00:03:21,919 --> 00:03:25,080 Speaker 5: I think that is what's most important. If you think back, 68 00:03:25,560 --> 00:03:28,359 Speaker 5: online conversion just broadly speaking, is in the load to 69 00:03:28,440 --> 00:03:32,440 Speaker 5: miitsigledgit range. So only about five percent of shoppers that 70 00:03:32,480 --> 00:03:36,480 Speaker 5: go online to shop actually transact. It's very very low 71 00:03:36,480 --> 00:03:39,440 Speaker 5: compared to a brick and mortar store, and every little 72 00:03:39,480 --> 00:03:42,080 Speaker 5: that Amazon does on AI or anything else is going 73 00:03:42,120 --> 00:03:44,360 Speaker 5: to help boost that conversion. It's higher on Amazon. 74 00:03:44,400 --> 00:03:47,760 Speaker 3: Of course, Let's remind everybody that in the aftermarket following earnings, 75 00:03:47,800 --> 00:03:50,800 Speaker 3: Amazon down about two point six percent. Here it's only 76 00:03:50,920 --> 00:03:54,000 Speaker 3: up about seven percent year to date. Ada rog you know, 77 00:03:54,040 --> 00:03:57,040 Speaker 3: you talked about, you know, the blow out numbers that 78 00:03:57,040 --> 00:03:59,880 Speaker 3: we've gotten from the likes of Alphabet and others. When 79 00:03:59,880 --> 00:04:03,320 Speaker 3: it comes to cloud aws, as we said, the growth 80 00:04:03,400 --> 00:04:05,280 Speaker 3: was in line with what the street was expecting. What 81 00:04:05,400 --> 00:04:09,080 Speaker 3: might why might they not have outperformed what we got 82 00:04:09,080 --> 00:04:10,600 Speaker 3: from some of the other hyperscalers. 83 00:04:12,200 --> 00:04:14,600 Speaker 4: You know, the first thing is they are much larger 84 00:04:14,640 --> 00:04:16,680 Speaker 4: than all the others. Their run rate is over one 85 00:04:16,720 --> 00:04:19,280 Speaker 4: hundred billion dollars, so you know, that's one factor, and 86 00:04:19,320 --> 00:04:21,880 Speaker 4: you know, to be very honest, growing seventeen eighteen percent 87 00:04:21,920 --> 00:04:24,279 Speaker 4: at one hundred billion is not a bad deal. But 88 00:04:24,360 --> 00:04:26,359 Speaker 4: the second part is when you look at somebody like 89 00:04:26,360 --> 00:04:29,320 Speaker 4: a Microsoft, they are getting a bit the benefit of 90 00:04:30,000 --> 00:04:33,680 Speaker 4: you know, chat GPT transactions being run on their cloud. 91 00:04:33,760 --> 00:04:36,720 Speaker 4: So you know, that's that's a huge benefit for them. 92 00:04:36,960 --> 00:04:40,280 Speaker 4: Amazon doesn't have that option, frankly, because they don't have 93 00:04:40,320 --> 00:04:41,760 Speaker 4: a chat gipt like you know. 94 00:04:41,760 --> 00:04:42,880 Speaker 6: Application that's running. 95 00:04:43,240 --> 00:04:45,760 Speaker 4: A lot of what they're doing is on the enterprise side, 96 00:04:45,800 --> 00:04:49,920 Speaker 4: and those applications are currently in the build phase, which 97 00:04:49,960 --> 00:04:52,440 Speaker 4: means over the next several years we should see the 98 00:04:52,800 --> 00:04:56,400 Speaker 4: trickle down effect of those usage you know, driving up awis. 99 00:04:56,400 --> 00:04:58,680 Speaker 4: So I think there is a timing mismatch. I don't 100 00:04:58,720 --> 00:05:01,520 Speaker 4: see you know, them as being inferior in any way 101 00:05:01,560 --> 00:05:02,080 Speaker 4: to some of. 102 00:05:02,080 --> 00:05:03,080 Speaker 6: The other cloud providers. 103 00:05:03,120 --> 00:05:05,279 Speaker 4: In fact, as I said, they are the largest with 104 00:05:05,640 --> 00:05:07,400 Speaker 4: probably the most services out there right. 105 00:05:07,320 --> 00:05:10,120 Speaker 2: Now, do they stay the largest? I mean, they certainly 106 00:05:10,240 --> 00:05:12,360 Speaker 2: were early into this. I think you could say that 107 00:05:12,839 --> 00:05:15,320 Speaker 2: they helped invent this. I mean Andy Jasse certainly, that's 108 00:05:15,360 --> 00:05:19,800 Speaker 2: why he's CEO. After heading up the eight Amazon Web 109 00:05:19,839 --> 00:05:23,839 Speaker 2: services and then being picked by Bezos to take this job. 110 00:05:24,240 --> 00:05:27,000 Speaker 2: Would you say that they're comfortably in first or is 111 00:05:27,960 --> 00:05:32,679 Speaker 2: Azure at Microsoft on Iraq? And also is Google Cloud 112 00:05:32,720 --> 00:05:34,000 Speaker 2: doing a good job of catching up? 113 00:05:35,560 --> 00:05:37,560 Speaker 4: They're both doing a very good job of catching up. 114 00:05:37,560 --> 00:05:39,599 Speaker 4: And as I said, you know, Microsoft has an inherent 115 00:05:39,600 --> 00:05:40,400 Speaker 4: advantage there. 116 00:05:40,520 --> 00:05:42,520 Speaker 6: So maybe down the road, you know, several. 117 00:05:42,279 --> 00:05:44,320 Speaker 4: Years from now, let's say three to four years, they 118 00:05:44,360 --> 00:05:46,080 Speaker 4: would be neck to neck. But you know, one of 119 00:05:46,160 --> 00:05:48,159 Speaker 4: the things is this is a market where we think 120 00:05:48,160 --> 00:05:50,839 Speaker 4: the entire market is growing much bigger. You know, we 121 00:05:50,920 --> 00:05:53,200 Speaker 4: don't see five years from now ew as being a 122 00:05:53,240 --> 00:05:55,440 Speaker 4: smaller business than where it is right now. 123 00:05:55,560 --> 00:05:57,440 Speaker 6: The rate of growth depends. 124 00:05:57,000 --> 00:06:00,560 Speaker 4: On the propensity of enterprises to spend on technology, but 125 00:06:00,760 --> 00:06:04,080 Speaker 4: we think all three of them will benefit with cloud 126 00:06:04,120 --> 00:06:06,640 Speaker 4: becoming much bigger over the next three to five years. 127 00:06:06,760 --> 00:06:09,560 Speaker 3: We should point out some more of the statistics on 128 00:06:09,600 --> 00:06:13,400 Speaker 3: Amazon online stores net sales sixty one point five billion, 129 00:06:13,480 --> 00:06:16,320 Speaker 3: up eleven percent year over year, physical stores net sales 130 00:06:16,360 --> 00:06:18,240 Speaker 3: about five point six billion, up seven and a half 131 00:06:18,240 --> 00:06:21,320 Speaker 3: percent year over year. Third party seller services net sales 132 00:06:22,320 --> 00:06:25,560 Speaker 3: forty point three five billion, that's up eleven percent year 133 00:06:25,640 --> 00:06:30,080 Speaker 3: over year. Put them, you know, they also say in 134 00:06:30,120 --> 00:06:32,640 Speaker 3: some of the commentary or conviction that AI will change 135 00:06:32,640 --> 00:06:36,279 Speaker 3: every customer experience is starting to play out. So we 136 00:06:36,360 --> 00:06:38,120 Speaker 3: talked about it a little bit earlier. I mean, what 137 00:06:38,200 --> 00:06:40,440 Speaker 3: they are doing in terms of getting people to spend 138 00:06:40,480 --> 00:06:42,920 Speaker 3: more time on the platform, spend more time on the platform, 139 00:06:43,120 --> 00:06:44,320 Speaker 3: it's all happening. 140 00:06:45,400 --> 00:06:47,240 Speaker 5: Yeah, it's happening. I mean all the numbers that you 141 00:06:47,320 --> 00:06:50,680 Speaker 5: just cited, they have performed expectations. So whatever they're doing, 142 00:06:50,720 --> 00:06:53,159 Speaker 5: and they're doing a lot, they're doing it right. We 143 00:06:53,279 --> 00:06:56,320 Speaker 5: think that Amazon is making the right moves to expand 144 00:06:56,360 --> 00:06:59,640 Speaker 5: their retail footprint online. Once again, you know, it comes 145 00:06:59,640 --> 00:07:02,680 Speaker 5: back to what a customers want. They want everything and 146 00:07:02,720 --> 00:07:05,680 Speaker 5: Amazon's a marketplace that really sells a lot of different 147 00:07:05,680 --> 00:07:08,080 Speaker 5: types of goods and they want the speed and speed 148 00:07:08,200 --> 00:07:10,760 Speaker 5: is key here because you can get things same day 149 00:07:10,840 --> 00:07:13,920 Speaker 5: or next day from Amazon without paying a fee being 150 00:07:13,920 --> 00:07:16,800 Speaker 5: a Prime member. So that's really key here. And the 151 00:07:16,920 --> 00:07:20,280 Speaker 5: numbers in the second quarter were actually quite impressive on 152 00:07:20,320 --> 00:07:23,200 Speaker 5: the retail side. They did do really well. Prime Day 153 00:07:23,280 --> 00:07:25,960 Speaker 5: sounds like it was a great success. We'll hear more 154 00:07:26,040 --> 00:07:28,960 Speaker 5: on the call, but the numbers outperformed on the retail side. 155 00:07:29,360 --> 00:07:31,720 Speaker 3: Is there a read a follow through, if you will. 156 00:07:32,280 --> 00:07:34,520 Speaker 3: When it comes to what this tells you about kind 157 00:07:34,560 --> 00:07:36,320 Speaker 3: of consumers and the US economy. 158 00:07:37,480 --> 00:07:40,160 Speaker 5: Yeah, I think consumers are focused on value, and I 159 00:07:40,160 --> 00:07:43,440 Speaker 5: think Amazon does give you value. They are trying to 160 00:07:43,560 --> 00:07:46,360 Speaker 5: keep prices low, and this may be a function of 161 00:07:46,360 --> 00:07:48,520 Speaker 5: that where you know, as consumers shop around and they're 162 00:07:48,520 --> 00:07:51,720 Speaker 5: seeing price hikes due to tariffs, either they've already started 163 00:07:52,040 --> 00:07:55,200 Speaker 5: or they're coming up, they're finding deals on Amazon. So 164 00:07:55,480 --> 00:07:57,960 Speaker 5: they're going there and that's a nice place for Amazon 165 00:07:58,000 --> 00:07:59,920 Speaker 5: to be as we move forward into the second half. 166 00:08:00,080 --> 00:08:01,520 Speaker 3: I want to ask both of you, and let me 167 00:08:01,520 --> 00:08:03,000 Speaker 3: start with you put them. I mean, what are you 168 00:08:03,040 --> 00:08:06,560 Speaker 3: thinking about that you want to listen for on the 169 00:08:06,600 --> 00:08:10,640 Speaker 3: call that the company does with analyst and investors top 170 00:08:10,680 --> 00:08:12,160 Speaker 3: of mine or what you would be asking? 171 00:08:13,040 --> 00:08:14,960 Speaker 5: Yeah, for me on the retail side, it's really the 172 00:08:15,080 --> 00:08:17,760 Speaker 5: terror of question and the diminimus question. You know, we 173 00:08:17,800 --> 00:08:20,360 Speaker 5: know we're losing the dominamous exemption, so how should we 174 00:08:20,400 --> 00:08:23,200 Speaker 5: think about that in terms of their third party, especially 175 00:08:23,600 --> 00:08:25,960 Speaker 5: where they do rely on some of those drop shipping, 176 00:08:26,040 --> 00:08:28,840 Speaker 5: especially Hall. And then the second thing I'm looking for 177 00:08:29,000 --> 00:08:31,080 Speaker 5: is just how they're going to be pricing the goods 178 00:08:31,080 --> 00:08:33,640 Speaker 5: as we move into the second half, because for now 179 00:08:33,679 --> 00:08:36,560 Speaker 5: we have been somewhat insulated with a ten percent pause 180 00:08:36,559 --> 00:08:39,080 Speaker 5: on most goods outside of China, but that we know 181 00:08:39,400 --> 00:08:40,839 Speaker 5: is changing in the back half. 182 00:08:42,000 --> 00:08:45,719 Speaker 2: A honorock, come on back in here, because one thing 183 00:08:45,720 --> 00:08:48,319 Speaker 2: that we're I'm looking at the write ups right now, 184 00:08:48,360 --> 00:08:51,320 Speaker 2: and it does seem like, you know, what we said 185 00:08:51,320 --> 00:08:54,920 Speaker 2: at the beginning that this operating profit estimate for the 186 00:08:55,000 --> 00:09:00,800 Speaker 2: current quarter really underwhelmed. Why is it that Amazon doesn't 187 00:09:00,800 --> 00:09:04,080 Speaker 2: get rewarded for being less profitable the same way that 188 00:09:04,120 --> 00:09:07,280 Speaker 2: other companies are rewarded for this or maybe the better 189 00:09:07,280 --> 00:09:09,520 Speaker 2: way to ask it would be, you know, the measure 190 00:09:09,559 --> 00:09:13,200 Speaker 2: of capex and why you know, investors are so okay 191 00:09:13,240 --> 00:09:17,880 Speaker 2: with meta platforms spending so much money, but Amazon's operating 192 00:09:17,920 --> 00:09:20,760 Speaker 2: profit not coming in as high as they thought it would. 193 00:09:20,800 --> 00:09:24,040 Speaker 2: Is it because metas just printing money and has a 194 00:09:24,120 --> 00:09:25,600 Speaker 2: higher margin business. 195 00:09:26,160 --> 00:09:28,280 Speaker 4: I mean, you have to remember, you know, Amazon has 196 00:09:28,280 --> 00:09:30,720 Speaker 4: a lot of retail footprint also, so you can't really 197 00:09:30,920 --> 00:09:32,640 Speaker 4: equate them to a tech company as is. 198 00:09:32,679 --> 00:09:34,400 Speaker 6: I mean, it's only the aw as part of it. 199 00:09:34,720 --> 00:09:36,600 Speaker 4: But frankly speaking, if you go back to the history 200 00:09:36,600 --> 00:09:39,520 Speaker 4: of Amazon for probably ten fifteen years, you know, they 201 00:09:39,559 --> 00:09:43,360 Speaker 4: did were extremely unprofitable, and people you know, still rewarded 202 00:09:43,360 --> 00:09:45,840 Speaker 4: for them. You know, in our view, profitability story has 203 00:09:45,880 --> 00:09:48,200 Speaker 4: been amazing over the last three to four years. Look 204 00:09:48,200 --> 00:09:51,800 Speaker 4: at where AWSS gone from low twenties to the thirties. 205 00:09:52,040 --> 00:09:54,679 Speaker 4: Now today, it was a bit lower than what consensus 206 00:09:54,720 --> 00:09:57,760 Speaker 4: were anticipating, but you know, it ebbs and flows because 207 00:09:57,800 --> 00:10:01,040 Speaker 4: of the capex that they are investing in throughout their ecosystem. 208 00:10:01,600 --> 00:10:02,559 Speaker 6: Imagine a business. 209 00:10:02,559 --> 00:10:06,000 Speaker 4: I mean last quarter their AWS profit or our operating 210 00:10:06,040 --> 00:10:08,640 Speaker 4: margins were thirty nine point five percent. I mean, that's 211 00:10:08,640 --> 00:10:12,120 Speaker 4: a forty percent margin business. That's that's pretty impressive across 212 00:10:12,240 --> 00:10:16,000 Speaker 4: any you know, tech platform. So again it is lumpy, 213 00:10:16,120 --> 00:10:18,720 Speaker 4: but that's because of investments, that's because of how they hire. 214 00:10:19,360 --> 00:10:21,360 Speaker 4: You know, we think longer term, that is still a 215 00:10:21,400 --> 00:10:22,679 Speaker 4: forty percent margin business. 216 00:10:22,880 --> 00:10:24,640 Speaker 3: So I want to put the same question I asked 217 00:10:25,000 --> 00:10:27,640 Speaker 3: a punam Anag what you are thinking that you want 218 00:10:27,640 --> 00:10:29,760 Speaker 3: to know a little bit more about when the company 219 00:10:29,800 --> 00:10:32,040 Speaker 3: gets on the calls with analysts and investors. 220 00:10:32,400 --> 00:10:33,959 Speaker 4: Yeah, the two things that we want to know is 221 00:10:34,000 --> 00:10:36,400 Speaker 4: what's happening to your capex. Now, my gut feel is 222 00:10:36,440 --> 00:10:38,400 Speaker 4: they will want to take the capex up because all 223 00:10:38,400 --> 00:10:40,520 Speaker 4: the other cloud providers have done it, so they can't 224 00:10:40,559 --> 00:10:43,319 Speaker 4: really be left behind. But then the second question is, well, 225 00:10:43,320 --> 00:10:45,760 Speaker 4: can you give me an idea for all the capecks 226 00:10:45,800 --> 00:10:48,560 Speaker 4: that's going in? What kind of AI workloads are you seeing? 227 00:10:48,880 --> 00:10:51,640 Speaker 4: And if you are seeing some AI workloads, you know, 228 00:10:51,679 --> 00:10:53,920 Speaker 4: why not disclose that number and you know, talk about 229 00:10:53,960 --> 00:10:56,640 Speaker 4: it openly as Microsoft has done in the past, you know, 230 00:10:56,679 --> 00:10:57,920 Speaker 4: one and a half to two years. 231 00:10:58,040 --> 00:11:00,120 Speaker 2: Hey, Punam Guile, I want to bring you back in 232 00:11:00,120 --> 00:11:02,760 Speaker 2: here because you cover e commerce and ath leisure. Carol 233 00:11:02,800 --> 00:11:05,040 Speaker 2: asked you a really good question about if we can 234 00:11:05,080 --> 00:11:07,680 Speaker 2: get any insight into the consumer and the health of 235 00:11:07,720 --> 00:11:10,640 Speaker 2: the consumer by reading into these numbers, would you say 236 00:11:10,679 --> 00:11:14,160 Speaker 2: that Amazon is well positioned if you indeed believe that 237 00:11:14,200 --> 00:11:16,360 Speaker 2: we could be entering a downturn. We did see this 238 00:11:16,480 --> 00:11:20,720 Speaker 2: question asked yesterday at the Federal Reserve by one of 239 00:11:20,760 --> 00:11:25,680 Speaker 2: our own reporters, and referencing that vantage score report that 240 00:11:25,920 --> 00:11:30,400 Speaker 2: high income consumers are actually missing on their bills right 241 00:11:30,440 --> 00:11:33,000 Speaker 2: now when it comes to autos and credit cards? Is 242 00:11:33,040 --> 00:11:35,600 Speaker 2: Amazon well positioned to be a player if we do 243 00:11:35,640 --> 00:11:36,360 Speaker 2: see a downturn. 244 00:11:36,760 --> 00:11:39,720 Speaker 5: I think if we see a downturn Amazon's not going 245 00:11:39,760 --> 00:11:43,800 Speaker 5: to escape the ramifications of that. But that said, compared 246 00:11:43,840 --> 00:11:47,120 Speaker 5: to everyone else in retail, I do think Amazon will 247 00:11:47,120 --> 00:11:49,040 Speaker 5: fare better than the rest, and I do think that 248 00:11:49,080 --> 00:11:52,640 Speaker 5: they will continue to attract the value customer who's just 249 00:11:52,679 --> 00:11:55,360 Speaker 5: looking for deals and looking for value. Because at the 250 00:11:55,440 --> 00:11:58,640 Speaker 5: end of the day, when you think about how retailers buy, 251 00:11:58,840 --> 00:12:02,480 Speaker 5: those with scale have buying power, and Amazon has over 252 00:12:02,559 --> 00:12:05,800 Speaker 5: seven hundred billion dollars in GMB based on our estimates, 253 00:12:06,120 --> 00:12:08,000 Speaker 5: I can't think of a retailer bigger than that in 254 00:12:08,040 --> 00:12:09,720 Speaker 5: the US that has buying power. 255 00:12:09,880 --> 00:12:11,160 Speaker 3: All right, put them, We're going to let you go. 256 00:12:11,160 --> 00:12:13,120 Speaker 3: Put them go. Our senior analyst for e commerce and 257 00:12:13,160 --> 00:12:14,880 Speaker 3: at leisure, we're going to be watching out for her 258 00:12:14,920 --> 00:12:18,880 Speaker 3: research and commentary. Also following the company call, she is 259 00:12:18,920 --> 00:12:22,000 Speaker 3: of course with our Bloomberg Intelligence an rug before you go, 260 00:12:22,520 --> 00:12:25,920 Speaker 3: at least for this moment, Apple should be crossing in 261 00:12:26,000 --> 00:12:28,640 Speaker 3: less than ten minutes time. What will you be looking 262 00:12:28,679 --> 00:12:29,320 Speaker 3: out for here? 263 00:12:29,960 --> 00:12:32,200 Speaker 4: We really want to know what commentary they have around 264 00:12:32,240 --> 00:12:34,840 Speaker 4: AI initiatives and what is the policy at this point 265 00:12:34,840 --> 00:12:37,640 Speaker 4: in terms of adding you know, other third party models 266 00:12:37,640 --> 00:12:40,640 Speaker 4: onto the ecosystem. When we look at the results, we 267 00:12:40,640 --> 00:12:42,680 Speaker 4: think we're going to get a push or a pull 268 00:12:42,760 --> 00:12:45,439 Speaker 4: forward of demand from you know, the loss for the 269 00:12:45,520 --> 00:12:49,000 Speaker 4: last quarter, but next quarter guidance is extremely important, which 270 00:12:49,000 --> 00:12:50,839 Speaker 4: we don't think is going to be that great. 271 00:12:51,360 --> 00:12:52,920 Speaker 3: I feel like we keep saying we want to know 272 00:12:52,960 --> 00:12:54,560 Speaker 3: more about AI. What do you do? And what do 273 00:12:54,600 --> 00:12:56,839 Speaker 3: you do? And Ana rug Rana, thank you so much, 274 00:12:56,880 --> 00:13:00,800 Speaker 3: senior tech analyst at Bloomberg Intelligence. They're in our Chicago. 275 00:13:01,880 --> 00:13:05,720 Speaker 1: You're listening to the Bloomberg Business Week Daily podcast. Catch 276 00:13:05,800 --> 00:13:09,000 Speaker 1: us live weekday afternoons from two to five eastering. Listen 277 00:13:09,040 --> 00:13:12,640 Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app, 278 00:13:12,800 --> 00:13:15,360 Speaker 1: or watch us live on YouTube. 279 00:13:15,679 --> 00:13:18,439 Speaker 2: I want to bring in Ivan fine Seth, research director 280 00:13:18,480 --> 00:13:21,800 Speaker 2: and chief investment officer at Tiger's Financial Partners. The firm 281 00:13:21,880 --> 00:13:24,400 Speaker 2: is more than five hundred million dollars in assets under management. 282 00:13:24,600 --> 00:13:27,320 Speaker 2: They've got both Apple and Amazon stock for clients. He 283 00:13:27,400 --> 00:13:30,160 Speaker 2: joins us from New York City. What do you make 284 00:13:30,200 --> 00:13:32,320 Speaker 2: of this? It was a pretty massive beat on the 285 00:13:32,320 --> 00:13:36,600 Speaker 2: top line, really a massive beat across every category. Slight 286 00:13:36,640 --> 00:13:40,640 Speaker 2: beat when it came to China, iPad revenue slightly below expectations. 287 00:13:40,640 --> 00:13:42,120 Speaker 2: What are your first impressions? 288 00:13:42,440 --> 00:13:45,520 Speaker 7: Well, I think there was a lot of caution going 289 00:13:45,600 --> 00:13:48,840 Speaker 7: into the quarter, and they were strong on revenue, definitely 290 00:13:48,880 --> 00:13:52,720 Speaker 7: strong on iPhones and strong on iPhone sales in China. 291 00:13:52,800 --> 00:13:56,560 Speaker 7: Those are the key concerns. I think that even Tim 292 00:13:56,600 --> 00:14:00,280 Speaker 7: Cook just commented that pull forward sales based on tear 293 00:14:00,400 --> 00:14:02,600 Speaker 7: on tariffs were only a small part from what they 294 00:14:02,640 --> 00:14:03,120 Speaker 7: were seeing. 295 00:14:03,320 --> 00:14:05,120 Speaker 2: So then why do you think the iPhone beat was 296 00:14:05,160 --> 00:14:05,640 Speaker 2: so big? 297 00:14:07,400 --> 00:14:10,920 Speaker 7: It just could be where we are in the upgrade cycle. 298 00:14:11,360 --> 00:14:13,600 Speaker 2: But we're in a time where people hold onto their 299 00:14:13,600 --> 00:14:16,040 Speaker 2: phones for longer and wait to buy it because that 300 00:14:16,120 --> 00:14:18,719 Speaker 2: new one comes out traditionally in September late September. 301 00:14:19,640 --> 00:14:22,480 Speaker 7: There's still a lot of you know, twelves out there, 302 00:14:22,680 --> 00:14:25,800 Speaker 7: so people may you know, can't maybe hold off or 303 00:14:27,080 --> 00:14:30,040 Speaker 7: the promotion. We're still seeing a lot of promotions from 304 00:14:30,120 --> 00:14:35,760 Speaker 7: the carrier providers like AT and T, T Mobile and Verizon, 305 00:14:35,960 --> 00:14:40,840 Speaker 7: so the promotions drive sales. Maybe it is, like Sarah said, 306 00:14:40,960 --> 00:14:45,760 Speaker 7: concerns over higher tariff driven prices and people are upgrading now. 307 00:14:47,400 --> 00:14:51,600 Speaker 7: So either way, there was a lot of concern that 308 00:14:52,240 --> 00:14:54,200 Speaker 7: it could have been a weaker than expected quarter, and 309 00:14:54,240 --> 00:14:57,000 Speaker 7: it was a much stronger than expected quarter, especially in 310 00:14:57,040 --> 00:15:01,280 Speaker 7: three key areas overall revenue, iPhone sales and China iPhone sales. 311 00:15:01,480 --> 00:15:06,200 Speaker 3: All Right, so you've got Tim Cook saying today Apple 312 00:15:06,240 --> 00:15:09,920 Speaker 3: is project Reporter Jude quarter revenue record with double digit 313 00:15:10,000 --> 00:15:12,760 Speaker 3: growth and iPhone Mac and services and growth around the 314 00:15:12,760 --> 00:15:16,640 Speaker 3: world and every geographic segment. So highlighting that, you know, 315 00:15:16,680 --> 00:15:18,840 Speaker 3: the big question that we had ivan they're going into it. 316 00:15:18,840 --> 00:15:20,200 Speaker 3: And one of the things that was top of mind 317 00:15:20,280 --> 00:15:22,760 Speaker 3: is AI. Right in a week, in a couple of 318 00:15:22,840 --> 00:15:26,760 Speaker 3: weeks where we've been looking at the hyperscalers, the big spend, 319 00:15:27,080 --> 00:15:31,520 Speaker 3: the return on investment as a result of that, what 320 00:15:31,600 --> 00:15:34,080 Speaker 3: about on AI? How big a deal is that for you? 321 00:15:34,160 --> 00:15:37,800 Speaker 3: When you look at Apple, it is a big deal. 322 00:15:38,080 --> 00:15:42,280 Speaker 7: And they still really have not like wowed on ai yet, 323 00:15:42,480 --> 00:15:47,040 Speaker 7: and you know, they're talking about partnering working with other 324 00:15:47,080 --> 00:15:50,800 Speaker 7: AI providers. I mean, Siri still needs a lot of improvement. 325 00:15:51,840 --> 00:15:54,280 Speaker 7: A lot of the functionality that is out there is 326 00:15:54,320 --> 00:15:59,960 Speaker 7: pretty good as far as pictures and text and email 327 00:16:00,160 --> 00:16:06,200 Speaker 7: messages to integrate AI, to help facilitate the you know, 328 00:16:06,560 --> 00:16:09,920 Speaker 7: editing of pictures and sending texts and emails. But I 329 00:16:09,920 --> 00:16:11,960 Speaker 7: think they still have a long, you know, a long 330 00:16:12,000 --> 00:16:15,320 Speaker 7: way to go. Because Apple has always had a tremendous 331 00:16:15,320 --> 00:16:18,600 Speaker 7: wow factor, and you know, AI has really not been 332 00:16:18,800 --> 00:16:22,760 Speaker 7: at the level that everybody is expecting from Apple, So yeah, 333 00:16:22,800 --> 00:16:26,040 Speaker 7: that is an opportunity. But services revenue did increase nicely, 334 00:16:26,200 --> 00:16:28,520 Speaker 7: which is another key point. So those I think are 335 00:16:28,560 --> 00:16:32,200 Speaker 7: really that's the fourth of the total four key points 336 00:16:32,240 --> 00:16:34,080 Speaker 7: that everybody was focusing on are. 337 00:16:34,000 --> 00:16:36,640 Speaker 3: Ian King sharing with the team on the live blog service. 338 00:16:36,680 --> 00:16:42,520 Speaker 3: Revenue up thirteen percent, Wearables provided sales that actually showed 339 00:16:42,520 --> 00:16:45,920 Speaker 3: a contraction of about eight point six percent. Max sales 340 00:16:45,960 --> 00:16:48,440 Speaker 3: an increase of fifteen percent. I've had revenue a decline 341 00:16:48,480 --> 00:16:52,080 Speaker 3: of eight percent, and iPhone had revenue an increase of 342 00:16:52,440 --> 00:16:56,480 Speaker 3: thirteen percent. AI. Why is it so tricky for Apple? 343 00:16:56,520 --> 00:16:58,840 Speaker 3: They're continuing to lose some top talent. Why is it 344 00:16:58,920 --> 00:17:01,600 Speaker 3: so tricky for them ivan that they can't seem to 345 00:17:01,600 --> 00:17:02,480 Speaker 3: get it together. 346 00:17:03,840 --> 00:17:08,240 Speaker 7: Maybe the conundrum because Apple is viewed as an incredibly 347 00:17:08,320 --> 00:17:12,760 Speaker 7: innovative company, and while they're never the first mover. They 348 00:17:12,840 --> 00:17:16,080 Speaker 7: didn't invent the smartphone, but they took it to the 349 00:17:16,119 --> 00:17:18,719 Speaker 7: next level. They didn't invent the iPod, took it to 350 00:17:18,760 --> 00:17:23,600 Speaker 7: the next level. So each thing that they address, they 351 00:17:23,640 --> 00:17:25,480 Speaker 7: take it. They're not the first mover but they do 352 00:17:25,560 --> 00:17:28,160 Speaker 7: take it to the next level. So everybody has high 353 00:17:28,200 --> 00:17:32,080 Speaker 7: expectations as far as Apple and intelligence or AI, so 354 00:17:32,160 --> 00:17:33,920 Speaker 7: I think that is part of it, and they really 355 00:17:33,960 --> 00:17:36,760 Speaker 7: haven't come out and wowed everybody. The other area that 356 00:17:36,840 --> 00:17:40,160 Speaker 7: I think is important, well, I think the Vision Pro 357 00:17:40,640 --> 00:17:44,399 Speaker 7: as a concept was really great, but I didn't think 358 00:17:44,400 --> 00:17:46,520 Speaker 7: they were going to sell that many of those headsets 359 00:17:46,560 --> 00:17:49,800 Speaker 7: at thirty four hundred dollars, and I expected at some 360 00:17:49,880 --> 00:17:52,399 Speaker 7: point they would come out with a more streamlined version, 361 00:17:52,680 --> 00:17:57,520 Speaker 7: a much more cost competitive version. And I also am 362 00:17:57,560 --> 00:18:00,800 Speaker 7: a big believer at the in the smart glass concept 363 00:18:00,800 --> 00:18:03,760 Speaker 7: that Meta is doing very well with, and I think 364 00:18:03,760 --> 00:18:06,680 Speaker 7: we will see some type of smart glass concept from 365 00:18:07,040 --> 00:18:10,480 Speaker 7: Apple that integrates across all of its devices as far 366 00:18:10,480 --> 00:18:12,879 Speaker 7: as the phone and the watch, where you could you 367 00:18:13,080 --> 00:18:15,280 Speaker 7: keep the phone in your pocket and do a lot 368 00:18:15,320 --> 00:18:18,119 Speaker 7: of things as far as communication, make and receive calls 369 00:18:18,240 --> 00:18:21,959 Speaker 7: and you know, video and pictures in real time and 370 00:18:22,320 --> 00:18:26,920 Speaker 7: communicate just like you would on FaceTime through the pair 371 00:18:26,920 --> 00:18:28,480 Speaker 7: of Apple smart glasses. 372 00:18:28,800 --> 00:18:31,080 Speaker 2: Oh yeah, I already talk to myself with my phone 373 00:18:31,119 --> 00:18:32,600 Speaker 2: all the time. I can just talk to myself more 374 00:18:32,600 --> 00:18:35,400 Speaker 2: in glasses. That's that's totally fine. Certainly You're right, I've 375 00:18:35,440 --> 00:18:37,679 Speaker 2: in the form factor for the vision Pro much different 376 00:18:37,720 --> 00:18:44,080 Speaker 2: than metas ray Ban Sunglasses. Hey aarn Mark German repeatedly 377 00:18:44,160 --> 00:18:46,840 Speaker 2: saying essentially this, and I'll read it right from the 378 00:18:46,840 --> 00:18:49,320 Speaker 2: live blog. This is nothing new to our audience because 379 00:18:49,400 --> 00:18:51,600 Speaker 2: Mark says it all the time. He writes, as I've 380 00:18:51,600 --> 00:18:54,720 Speaker 2: been saying, despite concerns about the performance of Tim Cook 381 00:18:55,560 --> 00:19:00,320 Speaker 2: from some analysts, there is no universe in which the 382 00:19:00,320 --> 00:19:02,680 Speaker 2: board will replace him with this type of quarter. It's 383 00:19:02,760 --> 00:19:07,399 Speaker 2: essentially impossible. Do you agree with Mark's assessment there Ivan 384 00:19:07,560 --> 00:19:10,680 Speaker 2: that Tim Cook is there to stay despite the challenges 385 00:19:10,680 --> 00:19:13,960 Speaker 2: of the company's experience. When it comes to AI, he. 386 00:19:13,920 --> 00:19:18,040 Speaker 7: Has done a phenomenal job. He's created tremendous shareholder value 387 00:19:18,080 --> 00:19:24,040 Speaker 7: in returns since his tenure as the CEO. Companies hit bumps, 388 00:19:24,720 --> 00:19:31,399 Speaker 7: Apple has innovated tremendously under his time as CEO. So 389 00:19:31,720 --> 00:19:34,760 Speaker 7: he's done a great job. And I don't think any 390 00:19:35,080 --> 00:19:39,120 Speaker 7: of the issues that have investors that are concerns right 391 00:19:39,160 --> 00:19:43,199 Speaker 7: now are really you know, being could be tied to 392 00:19:43,520 --> 00:19:46,440 Speaker 7: some kind of fault of his. So I think it's 393 00:19:46,520 --> 00:19:50,320 Speaker 7: highly unlikely that they will replace him, and I think 394 00:19:50,400 --> 00:19:54,600 Speaker 7: that Apple will come back strong in AI, and I 395 00:19:54,640 --> 00:19:57,800 Speaker 7: think we will see the next generation of some kind 396 00:19:57,800 --> 00:20:01,639 Speaker 7: of you ar VR headset moving more toward the glasses 397 00:20:02,119 --> 00:20:04,760 Speaker 7: type of form factor of which you look. They have 398 00:20:05,840 --> 00:20:09,000 Speaker 7: a billion and a half iPhone users. They have a 399 00:20:09,119 --> 00:20:15,800 Speaker 7: over two billion ecosystem of Apple product users that are 400 00:20:16,040 --> 00:20:19,080 Speaker 7: eager to adopt Apple products and buy Apple products. The 401 00:20:19,080 --> 00:20:23,720 Speaker 7: integration across their products is tremendous and they just enhanced 402 00:20:23,720 --> 00:20:30,000 Speaker 7: that further with the recent announcement of the Glass Operating 403 00:20:30,080 --> 00:20:34,720 Speaker 7: System that standardizes the interaction of all the devices. 404 00:20:35,119 --> 00:20:37,480 Speaker 3: Hey, just one last question. As we see Apple shares 405 00:20:37,560 --> 00:20:41,320 Speaker 3: up about two percent here in the aftermarket, anything that 406 00:20:41,520 --> 00:20:44,680 Speaker 3: makes you want to buy Apple shares here? 407 00:20:45,960 --> 00:20:48,160 Speaker 7: I always we have a buy on it. We've got 408 00:20:48,640 --> 00:20:51,879 Speaker 7: two twenty price target. We're probably going to reevaluate and 409 00:20:52,000 --> 00:20:55,320 Speaker 7: raise it, and I think on any weakness it has 410 00:20:55,440 --> 00:20:58,960 Speaker 7: been a buy and I think that they will surprise 411 00:21:00,119 --> 00:21:05,679 Speaker 7: the positive for AI and the services revenue also is 412 00:21:05,720 --> 00:21:09,720 Speaker 7: a tremendous driver of growth and profitability, and that will 413 00:21:09,720 --> 00:21:10,560 Speaker 7: continue as well. 414 00:21:10,920 --> 00:21:13,440 Speaker 3: All right, good stuff, Ivan, Thank you so much. I've 415 00:21:13,480 --> 00:21:16,480 Speaker 3: and find Seth He is Research director, chief Investment Officer 416 00:21:16,480 --> 00:21:19,560 Speaker 3: of at Tiger's Financial Partners. They've got over five hundred 417 00:21:19,600 --> 00:21:21,800 Speaker 3: million in assets under management. Joining us here in New 418 00:21:21,880 --> 00:21:26,200 Speaker 3: York City again watching Apple shares hire in the postmarket 419 00:21:26,480 --> 00:21:31,040 Speaker 3: after they reported earnings and some strong numbers outperformance there, 420 00:21:31,160 --> 00:21:32,119 Speaker 3: stock up two percent. 421 00:21:33,520 --> 00:21:37,920 Speaker 1: This is the Bloomberg Business Weekdaily Podcast. Listen live each 422 00:21:37,960 --> 00:21:41,320 Speaker 1: weekday starting at two pm Eastern on Applecarflay, and Android 423 00:21:41,359 --> 00:21:44,439 Speaker 1: Auto with the Bloomberg Business App. You can also listen 424 00:21:44,520 --> 00:21:47,760 Speaker 1: live on Amazon Alexa from our flagship New York station, 425 00:21:48,320 --> 00:21:50,960 Speaker 1: Just say Alexa, Play Bloomberg eleven thirty. 426 00:21:51,960 --> 00:21:54,840 Speaker 3: The Fed, the trade, the markets, tariffs, everything that we 427 00:21:54,880 --> 00:21:57,040 Speaker 3: are keeping a watch on on this Thursday, even though 428 00:21:57,040 --> 00:21:59,960 Speaker 3: it feels like a Friday, it is still Thursday. In particular, 429 00:22:00,119 --> 00:22:01,400 Speaker 3: we want to dig a little bit into what we've 430 00:22:01,400 --> 00:22:03,600 Speaker 3: seen in the dollar and the FX trade. 431 00:22:03,960 --> 00:22:04,280 Speaker 6: JT. 432 00:22:04,480 --> 00:22:07,280 Speaker 3: Bardoisee is with us. She's director in FX Strategy for 433 00:22:07,359 --> 00:22:10,360 Speaker 3: TV Securities. Back here in our studio. Good to have 434 00:22:10,400 --> 00:22:13,119 Speaker 3: you here. A lot coming at investors. We've seen some 435 00:22:13,200 --> 00:22:15,840 Speaker 3: strength as of late in the US dollar. Let's go 436 00:22:15,920 --> 00:22:18,879 Speaker 3: back to the macro. What's of note, especially in a 437 00:22:18,920 --> 00:22:21,520 Speaker 3: week where we've heard from the Fed got a decision, 438 00:22:21,560 --> 00:22:24,240 Speaker 3: We have the White House still doing trade deals and 439 00:22:24,280 --> 00:22:26,960 Speaker 3: tariff deals, there's some extensions. We're trying to figure it out. 440 00:22:27,119 --> 00:22:29,639 Speaker 3: What's the important macro trade right now for the US dollar. 441 00:22:30,600 --> 00:22:32,399 Speaker 8: Thank you so much for having me. Always a pleasure 442 00:22:32,440 --> 00:22:35,560 Speaker 8: to join both the field in the studio. I think 443 00:22:35,600 --> 00:22:38,199 Speaker 8: what we have learned from this week is that you know, 444 00:22:38,240 --> 00:22:40,439 Speaker 8: there is still a lot of uncertainty even with the 445 00:22:40,480 --> 00:22:43,680 Speaker 8: trade deals being announced, particularly on the data side. With 446 00:22:43,800 --> 00:22:46,480 Speaker 8: the trade deals being announced, you're obviously getting less confusion 447 00:22:46,480 --> 00:22:49,080 Speaker 8: on the trade front. With you being the largest trading partner, 448 00:22:49,119 --> 00:22:52,120 Speaker 8: you have some certainty on what that tariff trade now 449 00:22:52,119 --> 00:22:55,240 Speaker 8: looks like. But unfortunately the Fed that come out yesterday 450 00:22:55,280 --> 00:22:57,639 Speaker 8: and told you that there's still a lot of uncertain 451 00:22:58,040 --> 00:23:00,840 Speaker 8: uncertainty of on the data front had warrants a lot 452 00:23:00,880 --> 00:23:03,320 Speaker 8: of caution, a lot more caution than what markets were 453 00:23:03,320 --> 00:23:06,560 Speaker 8: priced for going into the meeting. Markets were more than 454 00:23:06,600 --> 00:23:09,600 Speaker 8: fifty percent price for a September cut. They felt comfortable 455 00:23:09,600 --> 00:23:11,440 Speaker 8: with the fact that the fact should becoming an easy 456 00:23:11,520 --> 00:23:15,320 Speaker 8: interest rates, but Power gave no such indication because there's 457 00:23:15,359 --> 00:23:18,840 Speaker 8: still a big risk out there, particularly on the inflation side, 458 00:23:18,840 --> 00:23:21,560 Speaker 8: which is severely underpriced by markets right now. Which is 459 00:23:21,600 --> 00:23:23,640 Speaker 8: what we've learned that while you are getting a little 460 00:23:23,680 --> 00:23:26,320 Speaker 8: bit more clarity on the trade front. Now we're utterly 461 00:23:26,400 --> 00:23:29,200 Speaker 8: data dependent because on the macro growth and inflation side, 462 00:23:29,240 --> 00:23:31,720 Speaker 8: there's still a lot of uncertainty which is not resolved 463 00:23:31,760 --> 00:23:33,920 Speaker 8: with just us knowing those treets. 464 00:23:33,960 --> 00:23:35,919 Speaker 2: Why do you think inflation is being mispriced by the 465 00:23:35,920 --> 00:23:36,680 Speaker 2: market right now? 466 00:23:37,440 --> 00:23:39,879 Speaker 8: So this is actually a very interesting question. So we 467 00:23:39,920 --> 00:23:42,639 Speaker 8: actually have some in house models, which is where we 468 00:23:42,720 --> 00:23:46,640 Speaker 8: actually track trading currencies on the basis of different macro factors. 469 00:23:47,119 --> 00:23:50,680 Speaker 8: So our macro factor, our growth factor, our equity factor, 470 00:23:50,760 --> 00:23:52,639 Speaker 8: all of those factors are making a lot of money, 471 00:23:52,880 --> 00:23:55,800 Speaker 8: but our inflation factor has actually been losing money, which 472 00:23:55,840 --> 00:23:58,600 Speaker 8: is an indicator to me that FX markets have actually 473 00:23:58,600 --> 00:24:01,800 Speaker 8: not been paying attention to data. They think that with 474 00:24:01,920 --> 00:24:06,320 Speaker 8: the tariffs and the uncertainty around the trade deals, focus 475 00:24:06,320 --> 00:24:09,360 Speaker 8: has primarily shifted to the growth outlook. But one thing 476 00:24:09,440 --> 00:24:11,879 Speaker 8: we are now realizing it that the baseline tariff rate 477 00:24:11,960 --> 00:24:14,520 Speaker 8: is no longer ten percent. It's at least fifteen percent, 478 00:24:15,119 --> 00:24:17,680 Speaker 8: which is also interesting because we don't know what that 479 00:24:17,720 --> 00:24:21,280 Speaker 8: pass through inflation will look like. The last CPI report. 480 00:24:21,000 --> 00:24:24,280 Speaker 3: That side Mitchelle on our FED specially said yesterday like 481 00:24:24,440 --> 00:24:26,560 Speaker 3: the range was more like either I can't remember eighteen 482 00:24:26,600 --> 00:24:28,959 Speaker 3: to twenty, but it's much higher than the ten percent 483 00:24:29,000 --> 00:24:30,119 Speaker 3: that we've all been talking about. 484 00:24:30,240 --> 00:24:34,119 Speaker 8: Yes, and the last CPR report had the market reaction 485 00:24:34,280 --> 00:24:37,399 Speaker 8: was very telling. We had a downside surprise, but markets 486 00:24:37,400 --> 00:24:39,919 Speaker 8: took it hawkishly because you saw the first signs of 487 00:24:39,960 --> 00:24:43,600 Speaker 8: inflation tariff pass through into the goods categories, particularly into toys, 488 00:24:43,800 --> 00:24:46,119 Speaker 8: which markets took to be very hawkish, even though the 489 00:24:46,119 --> 00:24:47,680 Speaker 8: core CPI was a downside miss. 490 00:24:47,720 --> 00:24:50,520 Speaker 3: And forgive me, I meant Bob Michael. So what's interesting 491 00:24:50,920 --> 00:24:52,919 Speaker 3: is all right, so wait, so what does this mean 492 00:24:52,960 --> 00:24:53,440 Speaker 3: for the dollar? 493 00:24:53,480 --> 00:24:53,600 Speaker 7: Then? 494 00:24:53,680 --> 00:24:54,240 Speaker 3: Going forward? 495 00:24:54,240 --> 00:24:57,800 Speaker 8: In your view, I would say that you know, we 496 00:24:57,960 --> 00:24:59,920 Speaker 8: are bullished at all or in the short term tact 497 00:25:01,080 --> 00:25:03,840 Speaker 8: you still have August first, the deadline tomorrow, which is sticking. 498 00:25:04,119 --> 00:25:06,720 Speaker 8: But there's two scenarios which can play out with most 499 00:25:06,720 --> 00:25:09,240 Speaker 8: of the countries. Either you don't get a trade deal, 500 00:25:09,400 --> 00:25:12,560 Speaker 8: which brings in a lot more uncertainty and volatility into 501 00:25:12,560 --> 00:25:15,280 Speaker 8: your local assets. Or the second part is you do 502 00:25:15,320 --> 00:25:18,360 Speaker 8: get a trade deal, but on terms which appear more 503 00:25:18,400 --> 00:25:21,680 Speaker 8: favorable to the US than your country, which is now 504 00:25:21,680 --> 00:25:25,160 Speaker 8: actually leading into US local equity market out performance over 505 00:25:25,200 --> 00:25:28,680 Speaker 8: other countries. Equities. Both of these are actually dollar positive, 506 00:25:28,760 --> 00:25:31,320 Speaker 8: so thankfully, in the short term this makes my job 507 00:25:31,320 --> 00:25:33,960 Speaker 8: a little bit easier because irrespective of a deal or 508 00:25:34,000 --> 00:25:35,840 Speaker 8: no deal, it should feed into a little bit of 509 00:25:35,880 --> 00:25:37,640 Speaker 8: a dollar bounce in the short. 510 00:25:37,440 --> 00:25:42,920 Speaker 3: Term stronger dollar. They are possibly problematic for US multinationals 511 00:25:42,920 --> 00:25:44,600 Speaker 3: in terms of selling their good So is that something 512 00:25:44,640 --> 00:25:47,160 Speaker 3: to think about when we look at profits and profitability 513 00:25:47,160 --> 00:25:48,800 Speaker 3: going forward? 514 00:25:48,840 --> 00:25:51,560 Speaker 8: Not yet, because we do think that this taller bounce 515 00:25:51,640 --> 00:25:53,800 Speaker 8: will be a bounce. It will not, you know, bring 516 00:25:53,920 --> 00:25:56,600 Speaker 8: up that you know, dry is back of the US exceptionalism. 517 00:25:56,880 --> 00:25:59,119 Speaker 8: We won't get euro back to one O five or 518 00:25:59,160 --> 00:26:01,720 Speaker 8: below that one thing. It's that kind of a move. Okay, 519 00:26:01,760 --> 00:26:04,720 Speaker 8: it's more for short term adjustment, which market needed given 520 00:26:04,760 --> 00:26:05,800 Speaker 8: what was priced. 521 00:26:05,840 --> 00:26:08,520 Speaker 3: We promise more time later. We love having you on 522 00:26:08,600 --> 00:26:09,040 Speaker 3: with us. 523 00:26:09,600 --> 00:26:10,000 Speaker 6: J T. 524 00:26:10,119 --> 00:26:13,520 Speaker 3: Bardoase, she's director in FX Strategy for TD Securities. 525 00:26:13,560 --> 00:26:18,080 Speaker 1: Joining us, you're listening to the Bloomberg Business Week Daily Podcast. 526 00:26:18,320 --> 00:26:21,040 Speaker 1: Catch us live weekday afternoons from two to five eas 527 00:26:21,080 --> 00:26:24,720 Speaker 1: during Listen on Applecarplay and Android Auto with the Bloomberg 528 00:26:24,760 --> 00:26:28,160 Speaker 1: Business app, or watch us live on YouTube. 529 00:26:28,680 --> 00:26:31,520 Speaker 2: Tariffs and Trade Front and Center. The August first deadline 530 00:26:31,560 --> 00:26:35,679 Speaker 2: is fast approaching tomorrow. It's not so called Liberation Day 531 00:26:35,680 --> 00:26:39,040 Speaker 2: April second. No, it's not July ninth, which was the 532 00:26:39,320 --> 00:26:39,760 Speaker 2: other one. 533 00:26:39,840 --> 00:26:40,240 Speaker 4: Other one. 534 00:26:40,320 --> 00:26:43,680 Speaker 2: Yeah, now we're at August first, is the deadline. But 535 00:26:43,720 --> 00:26:46,320 Speaker 2: there's an extension with Mexico correct, and we're. 536 00:26:46,160 --> 00:26:47,800 Speaker 3: Still waiting to find out kind of where we are 537 00:26:47,800 --> 00:26:49,600 Speaker 3: with US China. Maybe we'll get an update a little 538 00:26:49,600 --> 00:26:50,399 Speaker 3: bit later on today. 539 00:26:50,560 --> 00:26:54,159 Speaker 2: But separately with all this, there's the big question the 540 00:26:54,200 --> 00:26:57,600 Speaker 2: president's trade war. It's facing a crucial test as federal 541 00:26:57,600 --> 00:27:00,000 Speaker 2: appeals court here is a challenge to his use of emergence, 542 00:27:00,040 --> 00:27:03,320 Speaker 2: the powers to impose sweeping tariffs on imports. The question 543 00:27:04,320 --> 00:27:08,520 Speaker 2: seems basic, but it's pretty complex. Are these tariffs even legal? 544 00:27:09,040 --> 00:27:12,520 Speaker 2: Eric Larson is with us. He's Bloomberg News, a legal reporter. Eric, 545 00:27:12,920 --> 00:27:13,600 Speaker 2: Are they legal? 546 00:27:14,440 --> 00:27:14,560 Speaker 5: Well? 547 00:27:14,600 --> 00:27:16,960 Speaker 9: I think ultimately the Supreme Court is going to answer 548 00:27:16,960 --> 00:27:19,480 Speaker 9: that question. But they did address it today in the 549 00:27:19,520 --> 00:27:22,159 Speaker 9: Court of Appeals for the Federal Circuit, which is an 550 00:27:22,160 --> 00:27:26,080 Speaker 9: appeals court in Washington. Because it's such an important case. 551 00:27:26,080 --> 00:27:29,360 Speaker 9: They had all eleven judges in in that court hear 552 00:27:29,480 --> 00:27:33,040 Speaker 9: these arguments today. They were something that that both sides 553 00:27:33,040 --> 00:27:36,919 Speaker 9: have been preparing for for months now. One side, all 554 00:27:37,000 --> 00:27:40,040 Speaker 9: the Democratic led States filed a lawsuit and a group 555 00:27:40,040 --> 00:27:43,240 Speaker 9: of small businesses and they of course one at the 556 00:27:43,320 --> 00:27:46,479 Speaker 9: US Trade Court which found these tariffs were illegal, the 557 00:27:46,480 --> 00:27:50,040 Speaker 9: ones that were issued under the emergency law. So this 558 00:27:50,200 --> 00:27:52,520 Speaker 9: hearing was to determine whether or not the Trade court 559 00:27:52,600 --> 00:27:55,120 Speaker 9: decision will be affirmed or overturned. 560 00:27:55,640 --> 00:27:57,240 Speaker 3: What are the arguments on both sides? 561 00:27:58,200 --> 00:28:00,840 Speaker 9: Well, the States in the small business is that sued 562 00:28:00,880 --> 00:28:04,479 Speaker 9: say that this emergency law that Trump cided from nineteen 563 00:28:04,560 --> 00:28:08,119 Speaker 9: seventy seven doesn't say anything about tariffs and it was 564 00:28:08,160 --> 00:28:11,240 Speaker 9: never intended to be used for the president to issue tariffs, 565 00:28:11,280 --> 00:28:15,320 Speaker 9: certainly not sweeping global tariffs against all of our trading partners. 566 00:28:16,440 --> 00:28:19,040 Speaker 9: They on top of that, they argue that the national 567 00:28:19,080 --> 00:28:22,800 Speaker 9: emergencies that Trump declared in order to invoke this law 568 00:28:22,960 --> 00:28:26,840 Speaker 9: are bogus, that the trade deficits, as Trump said that 569 00:28:26,920 --> 00:28:30,240 Speaker 9: the persistent US trade deficits are a national emergency, a 570 00:28:30,280 --> 00:28:34,560 Speaker 9: threat to our national security, and that justifies issuing these tariffs. 571 00:28:35,240 --> 00:28:37,919 Speaker 9: Same with fentanol. He said that that crisis in the 572 00:28:38,040 --> 00:28:42,720 Speaker 9: US warrants big tariffs against Mexico and Canada and China. 573 00:28:43,880 --> 00:28:48,280 Speaker 9: So these emergencies, the States, small businesses, they say they're bogus. 574 00:28:48,800 --> 00:28:53,120 Speaker 2: Section two thirty two is this is what was invoked 575 00:28:53,120 --> 00:28:55,520 Speaker 2: in the first Trump administration with China. Correct. 576 00:28:55,640 --> 00:28:57,479 Speaker 9: Well, that's the thing is there are a bunch of 577 00:28:57,520 --> 00:29:01,440 Speaker 9: different trade laws that can be us used legally and 578 00:29:02,560 --> 00:29:07,640 Speaker 9: arguably to issue big tariffs in a lot of different situations. 579 00:29:08,440 --> 00:29:11,600 Speaker 9: That this law in particular has never been used to 580 00:29:11,600 --> 00:29:13,560 Speaker 9: issue tariffs before. So there's all these other ways section 581 00:29:13,600 --> 00:29:16,200 Speaker 9: two thirty two. And one of the judges today was 582 00:29:16,240 --> 00:29:18,959 Speaker 9: asking the Justice Department lawyer about that, saying, we have 583 00:29:19,080 --> 00:29:22,280 Speaker 9: all these other trade laws that a president can use 584 00:29:22,280 --> 00:29:25,280 Speaker 9: to issue tariffs. What's the point of all those if 585 00:29:25,320 --> 00:29:28,160 Speaker 9: a president can just use this one to do whatever 586 00:29:28,200 --> 00:29:28,560 Speaker 9: he wants. 587 00:29:28,600 --> 00:29:31,360 Speaker 2: Could that be a backup plan for the president if 588 00:29:31,520 --> 00:29:37,800 Speaker 2: the court strikes down at least this methodology of sweeping tariffs, 589 00:29:37,840 --> 00:29:41,960 Speaker 2: could the president go back and use another part of 590 00:29:41,960 --> 00:29:42,360 Speaker 2: the law. 591 00:29:42,600 --> 00:29:46,320 Speaker 9: I think that a lot of critics of these tariffs 592 00:29:46,160 --> 00:29:48,840 Speaker 9: have even said that that is something that is possible, 593 00:29:48,880 --> 00:29:52,120 Speaker 9: that there's other ways that Trump could could put these 594 00:29:52,160 --> 00:29:55,240 Speaker 9: tariffs in place. Their issue and their issue all along 595 00:29:55,280 --> 00:29:59,320 Speaker 9: in these lawsuits has been that Congress has the power 596 00:29:59,360 --> 00:30:03,960 Speaker 9: over taxing and tariffs, and that this is a massive 597 00:30:04,200 --> 00:30:07,280 Speaker 9: tax on all Americans who are paying the bulk of 598 00:30:07,320 --> 00:30:11,360 Speaker 9: these of these tariffs, so that that's something only Congress 599 00:30:11,400 --> 00:30:14,080 Speaker 9: can do, and that this law was just never intended 600 00:30:14,080 --> 00:30:16,360 Speaker 9: to be a blank check for any president to issue 601 00:30:16,400 --> 00:30:19,440 Speaker 9: whatever tariffs who wants, at whatever rate against any country 602 00:30:19,480 --> 00:30:20,720 Speaker 9: for any period of time. 603 00:30:21,320 --> 00:30:23,280 Speaker 3: Is this once again about presidential authority? 604 00:30:23,920 --> 00:30:26,960 Speaker 9: Is that the correct so many of the other cases 605 00:30:26,960 --> 00:30:29,520 Speaker 9: that have been going on against the Trump administration. 606 00:30:30,040 --> 00:30:34,800 Speaker 3: So this is what I'm wondering. Like here we are, Eric, 607 00:30:34,840 --> 00:30:38,680 Speaker 3: as you know at Bloomberg, often the top stories and 608 00:30:38,720 --> 00:30:40,920 Speaker 3: most read stories, certainly over the last couple of weeks 609 00:30:40,960 --> 00:30:43,520 Speaker 3: and for a long time, have been about trade deals 610 00:30:43,520 --> 00:30:46,120 Speaker 3: in tariffs, and we've seen market certainly react on that. 611 00:30:47,160 --> 00:30:50,920 Speaker 3: If tell us about if this goes to the Supreme Court, 612 00:30:50,960 --> 00:30:55,680 Speaker 3: or if this decision go is a decision that requires 613 00:30:55,680 --> 00:30:58,080 Speaker 3: it to go to the Supreme Court, is it possible 614 00:30:58,120 --> 00:31:02,520 Speaker 3: that all of these headlines could be made insignificant and 615 00:31:02,560 --> 00:31:04,120 Speaker 3: not important and not real. 616 00:31:04,840 --> 00:31:06,800 Speaker 9: Well, that's a huge question. 617 00:31:06,920 --> 00:31:07,040 Speaker 6: Right. 618 00:31:07,080 --> 00:31:10,240 Speaker 9: We already have these terrorifts being baked into the global 619 00:31:10,240 --> 00:31:14,160 Speaker 9: economy while they're being debated, because this same appeals court 620 00:31:14,200 --> 00:31:17,200 Speaker 9: allowed them to stay in effect. While this appeal proceeds. 621 00:31:17,280 --> 00:31:18,480 Speaker 3: But there's a big question mark. 622 00:31:18,480 --> 00:31:20,400 Speaker 9: There's a big question mark all of them. But as 623 00:31:20,440 --> 00:31:23,120 Speaker 9: we're seeing as we're seeing a lot of countries are 624 00:31:23,160 --> 00:31:27,280 Speaker 9: going ahead with negotiating and some of them reaching deals. 625 00:31:27,640 --> 00:31:29,640 Speaker 9: We haven't seen all the details on them yet, of course, 626 00:31:29,680 --> 00:31:32,640 Speaker 9: but they're they're certainly trying to reach these deals, and 627 00:31:32,720 --> 00:31:36,120 Speaker 9: there is a chance that potentially the Supreme Court ultimately 628 00:31:36,120 --> 00:31:39,080 Speaker 9: could decide that they're illegal. Perhaps they don't want future 629 00:31:39,080 --> 00:31:41,840 Speaker 9: presidents to have the same kind of blank check, so 630 00:31:42,360 --> 00:31:45,200 Speaker 9: they these countries might have to go back to the 631 00:31:45,280 --> 00:31:45,880 Speaker 9: drawing board. 632 00:31:46,480 --> 00:31:48,920 Speaker 3: Well, have any other presidents ever done this? In terms 633 00:31:48,920 --> 00:31:52,240 Speaker 3: of no, okay, no, I. 634 00:31:52,200 --> 00:31:54,480 Speaker 2: Think, I mean, I think the hard part about this 635 00:31:54,920 --> 00:31:57,440 Speaker 2: is that, you know, we heard this from feted Cher 636 00:31:57,480 --> 00:32:01,160 Speaker 2: jpwell yesterday. The uncertainty, yeah, is going along with this. 637 00:32:01,640 --> 00:32:04,080 Speaker 2: So it's like if you're if you're a company that 638 00:32:04,680 --> 00:32:06,640 Speaker 2: is trying to figure out, Okay, we need to get 639 00:32:06,720 --> 00:32:08,640 Speaker 2: these things from here, and we need to communicate to 640 00:32:08,760 --> 00:32:11,280 Speaker 2: investors how much it's going to cost us now in 641 00:32:11,320 --> 00:32:14,880 Speaker 2: this new environment. That's a challenge. Yet we haven't necessarily 642 00:32:14,960 --> 00:32:18,000 Speaker 2: seen that reflected in the company earnings, at least to 643 00:32:18,080 --> 00:32:21,000 Speaker 2: the extent of at least in this quarter, Carol, Right, 644 00:32:21,040 --> 00:32:23,040 Speaker 2: you remember last quarter where we heard all the uncertainty 645 00:32:23,040 --> 00:32:26,280 Speaker 2: from the airlines. We heard concerns about ripping up guidance 646 00:32:26,480 --> 00:32:29,960 Speaker 2: moving forward. If you're an investor and you're looking for 647 00:32:30,040 --> 00:32:33,440 Speaker 2: some sort of resolution here, is there a realistic timeline 648 00:32:33,480 --> 00:32:36,240 Speaker 2: for this or is this just going this drum beat 649 00:32:36,400 --> 00:32:38,800 Speaker 2: just going to continue as it makes its way to 650 00:32:38,880 --> 00:32:39,840 Speaker 2: the Supreme Court. 651 00:32:40,480 --> 00:32:43,440 Speaker 9: I think that the Supreme Court, when it gets there, 652 00:32:43,480 --> 00:32:46,440 Speaker 9: is going to probably move expeditiously on this. They can 653 00:32:46,600 --> 00:32:49,440 Speaker 9: move quickly in cases that are extremely important. They could 654 00:32:49,440 --> 00:32:54,320 Speaker 9: also just they could also just let whatever the lower 655 00:32:54,400 --> 00:32:56,840 Speaker 9: court ruling is sort of stand. Right say, if Trump 656 00:32:56,880 --> 00:32:59,200 Speaker 9: loses at the Federal Circuit and they don't take it 657 00:32:59,280 --> 00:33:02,360 Speaker 9: up right away, you know, could be a hint of 658 00:33:02,440 --> 00:33:06,040 Speaker 9: things to come. But until there is a final decision, 659 00:33:06,600 --> 00:33:10,480 Speaker 9: no company is going to have any certainty. But as 660 00:33:10,480 --> 00:33:13,800 Speaker 9: you mentioned, these other options for Trump issuing tariffs. If 661 00:33:13,840 --> 00:33:16,080 Speaker 9: even if he were to lose on this, I think 662 00:33:16,120 --> 00:33:19,200 Speaker 9: we know that Trump, based on how he usually does things, 663 00:33:19,280 --> 00:33:21,720 Speaker 9: is he would press ahead with some other way to 664 00:33:22,240 --> 00:33:23,240 Speaker 9: get these deals done. 665 00:33:23,280 --> 00:33:24,960 Speaker 3: And it sounds like he's got the options out there 666 00:33:25,000 --> 00:33:27,840 Speaker 3: right in terms of other mechanisms he could pull. 667 00:33:28,200 --> 00:33:28,680 Speaker 8: Sure there. 668 00:33:28,840 --> 00:33:31,120 Speaker 9: Yeah, I mean these tariffs that we've seen here, they 669 00:33:31,320 --> 00:33:35,640 Speaker 9: said in open court that they were basically a pressure tactic, 670 00:33:36,120 --> 00:33:39,880 Speaker 9: giving Trump a way to pressure countries to come to 671 00:33:39,960 --> 00:33:40,400 Speaker 9: the table. 672 00:33:40,920 --> 00:33:43,680 Speaker 3: We actually talked with Bill George, executive fellow at Harvard 673 00:33:43,720 --> 00:33:46,280 Speaker 3: Business School, former chairman and city of Metronic, and remember 674 00:33:46,320 --> 00:33:50,400 Speaker 3: he thought CEOs, they're approaching this all wrong. He's basically saying, 675 00:33:50,520 --> 00:33:54,960 Speaker 3: by delaying, you know, making either an m and a 676 00:33:55,080 --> 00:33:59,080 Speaker 3: deal or strategy, if you're waiting for TERRFF clarity, he says, 677 00:33:59,120 --> 00:34:02,280 Speaker 3: at the same time, you've got competitors they're seizing, you know, 678 00:34:02,760 --> 00:34:06,200 Speaker 3: the opportunities, while everybody else, maybe American CEOs are kind 679 00:34:06,200 --> 00:34:09,480 Speaker 3: of waiting for clarity on the tariff deals. So it's 680 00:34:09,520 --> 00:34:11,960 Speaker 3: kind of interesting. What is the timetable here. 681 00:34:12,120 --> 00:34:14,440 Speaker 9: To We don't we don't have one. I mean, we're 682 00:34:14,440 --> 00:34:16,600 Speaker 9: of course preparing for a decision to come anytime, but 683 00:34:17,239 --> 00:34:19,680 Speaker 9: they could take days, they could take weeks, okay to 684 00:34:20,040 --> 00:34:23,440 Speaker 9: come up with the decision and then of course Supreme Court. 685 00:34:23,560 --> 00:34:27,760 Speaker 2: So so don't I hope you have no vacations planned. 686 00:34:29,719 --> 00:34:31,239 Speaker 3: It's just amazing because. 687 00:34:31,000 --> 00:34:32,000 Speaker 2: You're going to be here. 688 00:34:32,840 --> 00:34:34,279 Speaker 3: But this is it, right, This is kind of our 689 00:34:34,320 --> 00:34:36,400 Speaker 3: world like, this is an uncertain aspect and we'll have 690 00:34:36,400 --> 00:34:38,120 Speaker 3: to see how it plays out. Thank you so much. 691 00:34:38,160 --> 00:34:39,879 Speaker 3: Get home safely. We know we're waiting for some big 692 00:34:39,960 --> 00:34:42,359 Speaker 3: rain here in New York. Eric Laarson is Bloomberg News 693 00:34:42,440 --> 00:34:45,880 Speaker 3: Legal reporter. Check out his work on The Bloomberg and 694 00:34:45,880 --> 00:34:47,200 Speaker 3: at Bloomberg dot com. 695 00:34:47,719 --> 00:34:53,200 Speaker 1: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, 696 00:34:53,360 --> 00:34:57,400 Speaker 1: and anywhere else you get your podcasts. Listen live weekday 697 00:34:57,440 --> 00:35:01,600 Speaker 1: afternoons from two to five pm Eastern on Bloomberg dot com, 698 00:35:01,760 --> 00:35:05,560 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business App. 699 00:35:05,719 --> 00:35:08,600 Speaker 1: You can also watch us live every weekday on YouTube 700 00:35:08,840 --> 00:35:11,040 Speaker 1: and always on the Bloomberg terminal