WEBVTT - Netflix Earnings Preview, Acquisition of WWE's Raw 0:00:01.840 --> 0:00:07.120 From Mahard where Innovation, money and power Collie in Silicon Valley, NBN. 0:00:07.480 --> 0:00:11.520 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:26.520 --> 0:00:29.560 I met Ludlow in San Francisco. Caroline hides off today. 0:00:29.600 --> 0:00:31.320 This is Bloomberg Technology. 0:00:31.360 --> 0:00:31.760 Coming up. 0:00:31.880 --> 0:00:35.559 Netflix makes a big push into live events with a 0:00:35.600 --> 0:00:40.400 five billion dollar deal for WWE Raw. Full details ahead 0:00:40.680 --> 0:00:43.560 and we stick with Netflix pushing ahead to results after 0:00:43.640 --> 0:00:46.040 the bell and get a read on what to expect 0:00:46.040 --> 0:00:50.600 from tech earnings this season. Plus Samsung exploring the development 0:00:50.840 --> 0:00:54.440 of a non invasive blood sugar monitor to compete with 0:00:54.480 --> 0:00:58.040 tech giants like Apple in the race for wearable dominance. 0:00:58.080 --> 0:01:00.680 All that and so much more coming up up. There 0:01:00.760 --> 0:01:03.360 is one main big story this morning, and it is 0:01:03.400 --> 0:01:08.360 the Netflix deal with TKO, parent of WWE. Sources telling 0:01:08.440 --> 0:01:11.520 us it is a five billion dollar deal over ten 0:01:11.640 --> 0:01:15.320 years Monday Night Raw Live on the platform starting in 0:01:15.400 --> 0:01:20.160 January of twenty twenty five, but outside of the US, 0:01:20.319 --> 0:01:25.320 exclusivity on a number of WWE brands and pay per 0:01:25.400 --> 0:01:30.080 view events in new markets meaning new eyeballs. Just last hour, 0:01:30.280 --> 0:01:33.080 I sat down with ww president Nick Kahan. 0:01:33.280 --> 0:01:33.840 Listen to this. 0:01:35.080 --> 0:01:36.160 We're pleased with the deal. 0:01:36.200 --> 0:01:38.520 And we love the fact that Netflix was willing to 0:01:38.520 --> 0:01:40.520 take a bet on us, as we know they had 0:01:40.520 --> 0:01:42.600 said previously that they were. 0:01:42.400 --> 0:01:44.240 Not into sports rights. 0:01:44.240 --> 0:01:47.240 The good thing about WWE, it's sports entertainment, as you 0:01:47.319 --> 0:01:50.480 said before the quick break there, so we're an entertainment 0:01:50.520 --> 0:01:53.320 property as much as we are a sports property. Fifty 0:01:53.400 --> 0:01:57.240 two weeks a year, live, consistent programming, an audience that 0:01:57.440 --> 0:02:00.360 is actually quite global if you look at India. In 0:02:00.560 --> 0:02:02.680 India is not part of this deal, but if you 0:02:02.720 --> 0:02:05.840 look at India with the second most popular sport in India. 0:02:05.920 --> 0:02:08.240 If you look at the United Kingdom, we're the fourth 0:02:08.320 --> 0:02:09.680 most popular sport there. 0:02:09.960 --> 0:02:12.360 This deal will take effect in the UK, so in 0:02:12.360 --> 0:02:15.520 addition to the United States, it allows us to gain 0:02:15.639 --> 0:02:17.200 even a greater global. 0:02:16.800 --> 0:02:19.200 Footprint as we look to expand the business. 0:02:19.560 --> 0:02:21.000 Well, Nick, I want to talk a little bit more 0:02:21.000 --> 0:02:23.560 about the decision to go with Netflix, go with a 0:02:23.639 --> 0:02:27.440 streamer versus staying with a Comcast for example. Did this 0:02:27.560 --> 0:02:30.000 purely come down to numbers where you were going to 0:02:30.040 --> 0:02:32.320 get the better deal or is this in effect a 0:02:32.360 --> 0:02:34.600 bet on where the future eyeballs are going to be. 0:02:35.680 --> 0:02:38.919 Well, look, we continue to love NBCU. We have SmackDown 0:02:39.040 --> 0:02:42.640 on USA, premiering this October. There we have our premium 0:02:42.720 --> 0:02:46.359 live events formerly our pay per views like WrestleMania on 0:02:46.440 --> 0:02:48.640 Peacock exclusively in the United States. 0:02:48.919 --> 0:02:50.639 They've been tremendous for us. 0:02:50.680 --> 0:02:53.639 With Raw, it was yet another test of someone new 0:02:53.639 --> 0:02:58.400 in the space, obviously an established streaming entity, the streaming entity, 0:02:58.440 --> 0:02:59.000 if you will. 0:02:59.280 --> 0:03:01.400 It was a good beat by us, and we think 0:03:01.400 --> 0:03:02.240 a good bet by them. 0:03:02.840 --> 0:03:04.960 Let's talk about ad pricing a little bit more here. 0:03:05.080 --> 0:03:08.000 Does this give you greater ad pricing power this deal? 0:03:09.440 --> 0:03:09.880 We think so. 0:03:10.160 --> 0:03:13.280 Look, you've seen what Amazon's been able to do on 0:03:13.320 --> 0:03:16.840 their ads supported tier. Netflix is going to have great 0:03:16.880 --> 0:03:20.320 success in that space. Wwe again, three hours a week 0:03:20.360 --> 0:03:24.760 on Raw every week allows Netflix to monetize this deal 0:03:24.800 --> 0:03:27.200 in the advertising space in a way that has not 0:03:27.240 --> 0:03:28.000 been seen before. 0:03:28.919 --> 0:03:31.640 And Nick Raw has this kind of super loyal and 0:03:31.720 --> 0:03:34.320 sizeable audience. But there must be a part of this 0:03:34.400 --> 0:03:36.480 deal where you're like, Okay, we need to think about 0:03:36.520 --> 0:03:39.160 the future and growing a new audience. And I wondered 0:03:39.160 --> 0:03:41.920 if there's any terms in the deal. When Netflix goes 0:03:41.960 --> 0:03:46.280 away and produces a behind the scenes kind of documentary 0:03:46.760 --> 0:03:51.000 exclusive to Netflix that introduces WWE to that new audience. 0:03:51.160 --> 0:03:53.840 Think about, like, what am I thinking of Drive to 0:03:53.880 --> 0:03:56.680 Survive and Formula one and the success that that had 0:03:56.920 --> 0:03:59.000 bringing a sport to a new audience. 0:04:00.040 --> 0:04:02.640 Would be a mistake by us at WWE to not 0:04:02.800 --> 0:04:06.080 do that with Netflix. So assume that what you said 0:04:06.200 --> 0:04:10.080 is exactly what we're all thinking, we being Netflix and WWE. 0:04:10.440 --> 0:04:12.920 You saw we Drive to Survive did for Formula One. 0:04:12.960 --> 0:04:16.080 As you just mentioned, we think the WWE audience, already 0:04:16.080 --> 0:04:18.400 big on a global level, only gets bigger with a 0:04:18.440 --> 0:04:19.080 show like that. 0:04:21.400 --> 0:04:24.279 Okay, that was WWE President Nick Kahn just in the 0:04:24.320 --> 0:04:27.200 last hour and my friend Bloomber's Katie Greifeld. For more 0:04:27.240 --> 0:04:29.160 on this, I'm going to bring in Hang Media CEO 0:04:29.320 --> 0:04:33.360 John Klein, who also served as a former president of CNN, 0:04:33.400 --> 0:04:36.799 and John, you know, live Entertainment, Live Sports. 0:04:37.800 --> 0:04:39.120 This is very interesting. 0:04:39.200 --> 0:04:42.799 I don't think anyone saw this coming, this structure of deal, 0:04:43.880 --> 0:04:48.919 nor the duration of it, all the properties themselves, just 0:04:48.960 --> 0:04:51.279 your reaction to what Netflix has done here. 0:04:52.400 --> 0:04:55.279 Netflix has to do things like this, They have to 0:04:55.320 --> 0:04:59.520 do more of them too, and that's because what is 0:04:59.640 --> 0:05:04.920 dry streaming use among consumers is not those high end, 0:05:04.960 --> 0:05:09.440 expensive dramas that Netflix is famous for it is free 0:05:09.640 --> 0:05:14.559 or low cost ads supported television. Basically, it's the same 0:05:14.640 --> 0:05:17.440 shows you used to watch on your cable system. People 0:05:17.480 --> 0:05:21.240 are now streaming in droves and what is driving that 0:05:21.400 --> 0:05:26.880 behavior is predominantly sports and also news programming. So they 0:05:26.960 --> 0:05:29.000 had to get into this space. I mean, I run 0:05:29.080 --> 0:05:32.159 as you said, Hang is a sports streaming platform that 0:05:32.279 --> 0:05:37.160 lets fans watch games on TV alongside famous athletes and celebrities, 0:05:37.480 --> 0:05:41.200 and we drive ridiculously high numbers of viewers, like six 0:05:41.279 --> 0:05:46.440 hundred and fifty thousand per event, plus sixty percent of 0:05:46.480 --> 0:05:50.520 them are eighteen to forty four, exactly the Gen Z 0:05:51.200 --> 0:05:56.039 and young millennials who all sports advertisers and teams and 0:05:56.080 --> 0:05:59.160 leagues want to reach. That's who Netflix is trying to reach. 0:05:59.200 --> 0:06:02.960 Now you know there. Netflix is trying to launch an 0:06:03.080 --> 0:06:07.800 ad supported tier. They had a bumpy going at the beginning. 0:06:08.560 --> 0:06:11.599 It seems to have at least stabilized now They have 0:06:11.760 --> 0:06:15.600 something like twenty three million monthly subscribers now to the 0:06:15.680 --> 0:06:19.960 AD supported tier, which is like six ninety nine per month, 0:06:21.839 --> 0:06:24.240 and that represents about thirty percent of their new sign up. 0:06:24.320 --> 0:06:27.320 So that's good. But it hasn't been easy and if 0:06:27.320 --> 0:06:29.520 you're going to be in the ad supported business, you 0:06:29.640 --> 0:06:32.600 have got to have sports look for that to try 0:06:32.640 --> 0:06:34.960 to do something in news as well, because news drives 0:06:35.000 --> 0:06:36.960 streaming behavior as well. 0:06:37.080 --> 0:06:37.279 Well. 0:06:37.360 --> 0:06:39.279 John, let's just take a look at the shares. Netflix 0:06:39.360 --> 0:06:42.479 is now hire three tenths of a percent. TKO is 0:06:42.480 --> 0:06:45.120 off its session highs, but is up seventeen percent. So 0:06:45.160 --> 0:06:47.280 we use that to ask who got the better deal? 0:06:47.839 --> 0:06:48.039 Right? 0:06:48.120 --> 0:06:52.520 We are reporting, citing sources that it's five billion over 0:06:52.560 --> 0:06:54.640 ten years. So let's say it's five hundred million dollars 0:06:54.680 --> 0:06:58.760 a year when Comcast paid two hundred and sixty five 0:06:58.839 --> 0:07:00.279 million a year. 0:07:00.120 --> 0:07:01.760 For the rights. 0:07:01.240 --> 0:07:04.720 Uh, it wasn't seen as a very good deal in 0:07:04.800 --> 0:07:05.440 this instance. 0:07:05.480 --> 0:07:06.760 Who got the better of it? 0:07:08.240 --> 0:07:11.200 I think they're both winners here. You know it brands 0:07:11.400 --> 0:07:15.480 WWE is forward thinking, Mate puts them smack in the 0:07:15.520 --> 0:07:19.400 middle of the streaming conversation, gets their their their hot 0:07:19.440 --> 0:07:22.720 property raw out of the cable world. It's going to 0:07:22.800 --> 0:07:25.720 hurt USA Network as the number one show on that 0:07:25.880 --> 0:07:30.480 cable channel, and so it's it's great for them and 0:07:30.520 --> 0:07:35.400 for the future growth possibilities. As Nick referred to. I've 0:07:35.440 --> 0:07:37.320 known Nick for a long long time and he's a 0:07:37.400 --> 0:07:42.600 very savvy deal maker thinker about media. At the same time, 0:07:42.720 --> 0:07:46.120 it's great for Netflix because it just pumps them with 0:07:46.520 --> 0:07:51.400 some very current product that is hugely popular across a 0:07:51.440 --> 0:07:55.520 lot of demos, but certainly among younger A lot of 0:07:55.840 --> 0:08:01.960 LATINX viewers you know, are driven to WWE programming as well, 0:08:02.360 --> 0:08:05.560 and as you had alluded in your earlier interview, the 0:08:05.760 --> 0:08:10.960 programming possibilities around all the characters, you know, just imagine 0:08:11.360 --> 0:08:13.680 being able to do the you know, to do their 0:08:13.760 --> 0:08:18.120 version of the Last Dance dot Com entry with those characters. 0:08:18.680 --> 0:08:20.960 Hey, John, sorry to interrupt. You're talking about the winners. 0:08:21.160 --> 0:08:23.720 I just want to talk about a potential loser. I'm 0:08:23.800 --> 0:08:26.280 looking at shares of Disney that are down one point 0:08:26.400 --> 0:08:28.640 four percent, and it raises the. 0:08:28.720 --> 0:08:29.880 Question, where is Disney? 0:08:29.920 --> 0:08:35.200 Where's ESPN in this idea that live events call it 0:08:35.240 --> 0:08:39.760 sports or live entertainment is going to go to streaming platforms. 0:08:40.360 --> 0:08:43.120 And they've been very vague about their streaming plans right 0:08:43.160 --> 0:08:48.240 They've said, look, we're working on a pivot from linear 0:08:48.320 --> 0:08:51.400 cable delivery into streaming, but we're not going to have 0:08:51.440 --> 0:08:55.080 an answer on that until twenty twenty five, which is 0:08:55.160 --> 0:08:58.760 like saying forever in the world of digital I mean 0:08:58.960 --> 0:09:05.360 Moore's law, everything accelerates exponentially, and so they've got to 0:09:05.400 --> 0:09:08.000 be scratching their heads and trying to come up with 0:09:08.120 --> 0:09:12.760 a strategy that's going to work. Now. What puts all 0:09:12.840 --> 0:09:18.680 of these players in jeopardy? But Netflix included is the 0:09:18.760 --> 0:09:23.680 runaway behemoth that is YouTube. YouTube is by far the 0:09:23.960 --> 0:09:27.080 biggest TV network on Earth. They have something like one 0:09:27.120 --> 0:09:31.240 hundred and twenty two million daily users two point seven 0:09:31.480 --> 0:09:37.640 billion monthly users. And that just dwarfs a couple hundred 0:09:37.640 --> 0:09:41.119 million here, one hundred million there for the other streamers. 0:09:41.240 --> 0:09:45.520 And you know where YouTube they give you the product 0:09:45.600 --> 0:09:48.120 for free. For the most part. You can subscribe to premium, 0:09:48.120 --> 0:09:51.040 but the vast majority of users are just accessing it 0:09:51.080 --> 0:09:54.000 for free. And you know, here's Netflix, It's still going 0:09:54.080 --> 0:09:56.199 to charge you six dollars a month for the over 0:09:56.240 --> 0:09:59.520 seven dollars a month for the ad supported tier. It's 0:09:59.520 --> 0:10:04.280 not free. And so what all other streaming platforms have 0:10:04.400 --> 0:10:07.600 to do is figure out a way to take share 0:10:07.840 --> 0:10:12.320 from YouTube or borrow from their model better than they 0:10:12.360 --> 0:10:12.679 have been. 0:10:14.200 --> 0:10:17.040 John Klein of the sports streaming platform Hang Media Great 0:10:17.040 --> 0:10:20.600 industry quick reaction to what is a big story Now, look, 0:10:20.840 --> 0:10:23.280 the news came out this morning and you may have forgotten, 0:10:23.559 --> 0:10:27.240 but after the bell, Netflix posts is quarterly earning. So 0:10:27.320 --> 0:10:30.120 let's get to that with Bloomberg Intelligence and Lisquita Ang 0:10:30.200 --> 0:10:34.320 and Nathan. Let's park wwe for a moment, because we 0:10:34.440 --> 0:10:38.080 came into this quarter or the quarter gone saying Netflix 0:10:38.080 --> 0:10:40.480 could post some big overall numbers here. 0:10:41.840 --> 0:10:41.960 Oh. 0:10:42.000 --> 0:10:45.280 Absolutely, I think expectations coming into this quarter ed are 0:10:45.320 --> 0:10:48.320 really high, and that's because management themselves during the last 0:10:48.360 --> 0:10:51.640 earning Skulls said, you know, expect pretty strong growth on 0:10:51.679 --> 0:10:53.720 the back of those two initiatives. I mean we were 0:10:53.760 --> 0:10:56.920 just speaking about the advertising tiers, so that's obviously a 0:10:57.040 --> 0:10:59.160 huge initiative for them, as well as the you know, 0:10:59.200 --> 0:11:03.400 the passwords share crackdown, what they call Paige sharing. And 0:11:03.440 --> 0:11:07.720 so we are seeing pretty good subscriber numbers. We saw 0:11:07.720 --> 0:11:09.920 that in the third quarter, we were expecting another nine 0:11:10.000 --> 0:11:12.880 to ten million new subscriber ads. And so then if 0:11:12.920 --> 0:11:15.080 you look at the whole ear of twenty twenty three, 0:11:15.240 --> 0:11:19.640 Netflix would have basically gained twenty five million subscribers. That 0:11:19.679 --> 0:11:22.439 puts them back in kind of that pre pandemic level. 0:11:22.480 --> 0:11:25.520 I mean last year twenty twenty two, it was eight 0:11:25.600 --> 0:11:27.800 or nine million new subscriber ads. That's when we had 0:11:27.840 --> 0:11:30.720 that great Netflix correction, and then now in twenty twenty three, 0:11:30.760 --> 0:11:32.640 they're kind of right back on track. The question is, 0:11:32.679 --> 0:11:35.320 of course, what's next, right, what is the next big 0:11:35.360 --> 0:11:37.480 growth catalyst for the stock? 0:11:38.320 --> 0:11:39.840 Well, let's ask that question. 0:11:39.920 --> 0:11:41.960 I mean, I watched Rebel Moon Part one, a child 0:11:42.040 --> 0:11:44.840 Afar over the holidays. I won't give my opinion, but 0:11:44.840 --> 0:11:48.360 look at IMDb and Rotten Tomatoes. So then go back 0:11:48.400 --> 0:11:53.000 to WWE. You know, the content pipeline is important, but 0:11:53.160 --> 0:11:55.760 this is a deal that doesn't kick untill twenty twenty five, 0:11:56.480 --> 0:11:59.760 and news overnight that the film chiefs leaving to go 0:11:59.800 --> 0:12:00.360 out swear. 0:12:02.280 --> 0:12:04.120 Yeah, that's a really interesting point that you bring up, 0:12:04.240 --> 0:12:06.200 ed because what we've seen so Netflix, as you know, 0:12:06.240 --> 0:12:09.000 a few weeks ago, Netflix kind of released this first 0:12:09.240 --> 0:12:13.480 really detailed what they call what we watched an engagement report, 0:12:13.520 --> 0:12:17.679 where they basically said who watched what over the first 0:12:17.679 --> 0:12:19.679 six months in twenty twenty three, And what we kind 0:12:19.679 --> 0:12:23.200 of learned from that report was that only about you know, 0:12:23.280 --> 0:12:26.239 fifty five percent of the top titles were really their originals, 0:12:26.280 --> 0:12:29.400 forty five percent is licensed content. And so as we 0:12:29.480 --> 0:12:32.720 kind of think about Scott Stubert leaving. You know, it 0:12:32.800 --> 0:12:35.960 goes to show that licensed content can still play a huge, 0:12:36.080 --> 0:12:39.440 huge role for Netflix, and that's exactly what we've been seeing. 0:12:39.440 --> 0:12:42.320 I mean, we saw that massive phenomenon with Suits, which 0:12:42.400 --> 0:12:45.040 kind of had you know, this huge audience based kind 0:12:45.080 --> 0:12:47.080 of come back and bring interest to a show that 0:12:47.200 --> 0:12:49.360 was that old and was you know, airing on a 0:12:49.440 --> 0:12:52.840 rival TV network. And we've seen so many of these 0:12:52.880 --> 0:12:55.640 other titles, you know, whether their movies from from the 0:12:55.679 --> 0:12:58.400 Max service, whether there's some of the older Max shows, 0:12:58.440 --> 0:13:00.840 all kind of finding this huge audience space and Netflix. 0:13:00.840 --> 0:13:02.640 So one thing that we've learned is that, you know, 0:13:02.760 --> 0:13:06.079 just for them, licensing old content can also work really well. 0:13:06.679 --> 0:13:09.520 So they don't necessarily need to make huge bets right 0:13:09.559 --> 0:13:11.920 now in the original show space, but they do need 0:13:11.960 --> 0:13:14.800 to get into diverse content to really kind of attract 0:13:15.000 --> 0:13:17.920 the advertising basin. That's exactly what this deal with TKO 0:13:18.040 --> 0:13:18.559 is all about. 0:13:19.320 --> 0:13:19.520 Oh. 0:13:19.640 --> 0:13:23.160 Suits is a fan favorite of everyone on Team Bloomberg Technology, 0:13:23.480 --> 0:13:25.840 according to the chat on My screen, and they gave 0:13:25.880 --> 0:13:28.840 it a second life. Guitarang Nathan Bloomberg Intelligence and lists 0:13:29.120 --> 0:13:32.040 standby Netflix earnings after the Bell will catch up tomorrow. 0:13:32.120 --> 0:13:33.840 Now coming up, we're going to get the big picture 0:13:33.840 --> 0:13:37.520 outlook for tech earnings overall with melag and Asino Wee 0:13:37.640 --> 0:13:42.600 Family Offices CEO, and in the earnings context, we're looking 0:13:42.600 --> 0:13:46.520 at shares of both Verizon and Texas Instruments. Remember Textas 0:13:46.520 --> 0:13:50.800 Instruments after the bell, very analog focused semiconductor maker. So 0:13:50.840 --> 0:13:55.480 many end markets. We have questions about Verizon interesting performance, 0:13:55.480 --> 0:13:58.880 added the most mobile customers in two years. It seems 0:13:58.880 --> 0:14:01.880 that this kind of turnaround plan the carrier is working. 0:14:02.360 --> 0:14:05.200 Those shares up more than five percent. My goodness, what 0:14:05.280 --> 0:14:07.960 a start to a Tuesday. This is Bloomberg technology. 0:14:17.400 --> 0:14:18.360 Okay, it's kind of like this. 0:14:18.440 --> 0:14:22.280 Tiptoe Tuesday when it comes to financial markets, equities kind 0:14:22.280 --> 0:14:25.680 of stuck within narrow ranges. Earnings is a really big 0:14:25.720 --> 0:14:30.120 factor now this week technology in particular. Verizon was out 0:14:30.120 --> 0:14:34.320 this morning, Next up Texas Instruments. Later in the week Tesla, Intel, 0:14:34.360 --> 0:14:36.040 and after the Bell. The big one we've been talking 0:14:36.080 --> 0:14:39.560 about is Netflix and so at an index level, nothing 0:14:39.640 --> 0:14:41.600 crazy in terms of movement, and in the back of 0:14:41.640 --> 0:14:44.560 our minds we're thinking about the FED and what they 0:14:44.600 --> 0:14:47.160 will or won't do over the course of twenty twenty four. 0:14:47.200 --> 0:14:49.200 Delighted to say that joining us now to get through 0:14:49.480 --> 0:14:53.800 these markets is Melagamassino. We Family Offices CEO, joining us 0:14:53.800 --> 0:14:54.520 out of Miami. 0:14:55.200 --> 0:14:56.080 We went into this. 0:14:56.000 --> 0:15:01.000 Week on Bloomberg focused very much on the Magnificence seven, right, 0:15:01.080 --> 0:15:03.040 this idea that they were where you wanted to be 0:15:03.080 --> 0:15:05.160 in twenty twenty three. But if you look at the 0:15:05.200 --> 0:15:08.800 earning season ahead, the expectation is that that bucket of 0:15:08.840 --> 0:15:11.840 seven will have EPs growth of forty six percent, and 0:15:11.880 --> 0:15:14.520 it doesn't seem to be any earnings growth elsewhere other 0:15:14.560 --> 0:15:18.240 than maybe utilities. Do you have to be in the 0:15:18.280 --> 0:15:20.480 Magnificent seven for the rest of twenty twenty four. 0:15:21.600 --> 0:15:24.840 No, I think that actually we're heading into kind of 0:15:24.840 --> 0:15:28.120 a Goldilog scenario with inflation coming down. 0:15:29.320 --> 0:15:29.520 You know. 0:15:29.600 --> 0:15:33.760 GDP growth for the third quarter was four point nine percent. 0:15:34.320 --> 0:15:37.000 They estimate that it's going to be about two percent 0:15:37.920 --> 0:15:42.480 for the fourth quarter. Unemployment is low, wages have risen 0:15:42.560 --> 0:15:46.040 higher than inflation. Two thirds of the US economy is 0:15:46.200 --> 0:15:50.040 consumer consumer lead. So actually I'm very bullish for the 0:15:50.200 --> 0:15:53.960 S and P five hundred, not just for the Magnificent seven. 0:15:55.320 --> 0:15:56.960 Every time that you and I have talked over the 0:15:57.040 --> 0:15:59.760 last twelve months, you actually go a little bit deeper 0:15:59.760 --> 0:16:02.760 on the technology sector, you know, into sub sectors that 0:16:02.840 --> 0:16:05.320 you say, okay, I have a thesis here. Let's take, 0:16:05.360 --> 0:16:10.240 for example, semiconductors. What is the twenty twenty four semiconductor 0:16:10.280 --> 0:16:12.040 call from melag A Mesino. 0:16:13.080 --> 0:16:13.240 Oh. 0:16:13.280 --> 0:16:16.360 I think semiconductors will continue to be strong. I think 0:16:16.400 --> 0:16:22.240 the whole healthcare sector can have huge profitability and efficiency 0:16:22.360 --> 0:16:25.000 from the use of artificial intelligence. So I think what 0:16:25.040 --> 0:16:27.560 we're going to start to see it is how different 0:16:27.600 --> 0:16:31.760 sectors are going to start applying artificial intelligence, not just 0:16:31.840 --> 0:16:34.880 in terms of research and innovation, but the ability to 0:16:34.880 --> 0:16:38.280 empower their employees at their desk. And so I think 0:16:38.320 --> 0:16:41.080 that it's going to be much more croub based than 0:16:41.120 --> 0:16:46.280 the tech stocks. I think it's regular companies, industrial companies, 0:16:46.320 --> 0:16:48.280 consumer staples companies, et cetera. 0:16:49.080 --> 0:16:50.280 Have the potential to have. 0:16:50.400 --> 0:16:53.480 Much more productivity as a result of these team tools. 0:16:53.800 --> 0:16:54.960 I think we're in the beginning. 0:16:55.080 --> 0:16:58.000 We're in the beginning stages of what's going to be 0:16:58.000 --> 0:17:03.080 a transformational technology for all of industry. 0:17:03.880 --> 0:17:06.280 How do you use AI every day? 0:17:06.760 --> 0:17:09.439 You know, there's the investing side and where you can 0:17:09.480 --> 0:17:12.640 allocate capital, and then there's you wake up and think, 0:17:12.640 --> 0:17:14.040 how do I use AI today? 0:17:16.040 --> 0:17:16.560 Well, if you. 0:17:16.520 --> 0:17:19.800 Think about it, in our own work, we're using more 0:17:19.800 --> 0:17:23.359 and more AI tools to actually take care of a 0:17:23.359 --> 0:17:27.440 lot of administrative tasks that are very talented people were 0:17:27.480 --> 0:17:30.840 doing and now you can really leverage them so that 0:17:30.880 --> 0:17:33.080 they can use their full talents instead of spending on 0:17:33.320 --> 0:17:36.479 a lot of administrative tasks. So I think that's just 0:17:36.520 --> 0:17:40.800 a small sample of what AI can do to just 0:17:40.880 --> 0:17:43.440 leverage every single company and the way that they use 0:17:43.480 --> 0:17:47.360 their talent. I mean, I don't think. I don't I'm 0:17:47.400 --> 0:17:49.960 not one of those people that worries about white collar 0:17:50.000 --> 0:17:52.600 workers losing their jobs. I think AI is going to 0:17:52.640 --> 0:17:57.040 empower and lift white collar workers to do a much 0:17:57.040 --> 0:17:57.680 better job. 0:18:00.080 --> 0:18:05.320 Mel there are certain sections of the technology sector that 0:18:05.400 --> 0:18:09.040 are sensitive to rates. Higher rates discount the present value 0:18:09.040 --> 0:18:11.080 of future cashflows is what I say on the show 0:18:11.119 --> 0:18:14.719 all the time. And right now the market seems to 0:18:14.760 --> 0:18:19.040 be shrugging off a pretty constant stream of FED speak 0:18:19.680 --> 0:18:23.760 that is warning us about our anticipation at the timing 0:18:23.840 --> 0:18:27.639 and depth of rate cuts. Why is the market not 0:18:27.760 --> 0:18:28.680 listening to the FED? 0:18:31.320 --> 0:18:33.680 Well, I think we've been in this tube of war 0:18:35.440 --> 0:18:38.480 because I between what the market says and what the 0:18:38.520 --> 0:18:42.800 FED is saying for months now, and that's what caused 0:18:42.880 --> 0:18:47.560 volatility in the market. But I personally listen to the FED. 0:18:47.720 --> 0:18:51.800 I think in spite of what the market would like, 0:18:51.840 --> 0:18:53.920 I think the FED is taking its time. It's making 0:18:53.960 --> 0:18:56.119 sure that the data that the lag effect of the 0:18:56.160 --> 0:18:59.520 interest rate rises, that they put in place, that they're 0:18:59.520 --> 0:19:02.160 really un stand what the data is saying before they. 0:19:02.680 --> 0:19:03.640 Start lowering rates. 0:19:03.640 --> 0:19:05.639 But they will lower rates, it just might not be 0:19:05.760 --> 0:19:08.440 as fast as the market expects. 0:19:09.840 --> 0:19:10.560 For this year. 0:19:12.040 --> 0:19:14.800 How top of mind is geopolitical risk, and you know, 0:19:14.800 --> 0:19:17.400 knowing that you look so closely at the chip sector, 0:19:18.040 --> 0:19:20.280 I go straight to China in my mind when we 0:19:20.320 --> 0:19:23.400 think about both the supply chain but also demand side 0:19:23.400 --> 0:19:24.200 of that industry. 0:19:26.160 --> 0:19:30.840 Well, China is I mean, China's economy is really not 0:19:30.880 --> 0:19:33.960 doing well. And I even think the latest stimulus that 0:19:34.960 --> 0:19:37.960 you know, the Chinese government tried to do to sort 0:19:37.960 --> 0:19:40.320 of stabilize the stock market, it's not going to work 0:19:41.240 --> 0:19:46.240 because there's fundamentally fundamental economic issues in China, starting with 0:19:46.280 --> 0:19:49.679 the real estate sector but also the finance sector. And 0:19:49.760 --> 0:19:53.920 I think the interference of the government in the business 0:19:54.400 --> 0:19:57.600 sector has really chased away a lot of the foreign investors. 0:19:57.640 --> 0:19:59.920 The lack of the kind of governance that were used 0:19:59.920 --> 0:20:03.119 to seeing has chased away foreign investors, and they played 0:20:03.119 --> 0:20:07.640 a pretty big role in China. So I think it's 0:20:07.760 --> 0:20:10.760 different with China. The geo political issue that I think 0:20:10.960 --> 0:20:13.280 most people worry about is actually what's going to happen 0:20:13.320 --> 0:20:17.440 with the US election. Having said that, we just did 0:20:17.440 --> 0:20:20.159 a study of what happens with every shock in the 0:20:20.200 --> 0:20:23.480 stock market starting from World War Two all the way 0:20:23.520 --> 0:20:27.800 through you know, the Israel Hamas situation, and the stock 0:20:27.880 --> 0:20:32.200 market reacts emotionally initially, and then six months later, a 0:20:32.280 --> 0:20:33.160 year later, it's up. 0:20:34.400 --> 0:20:38.040 So now I'm sorry to interrupt with a short on time, 0:20:38.080 --> 0:20:40.040 but before I lose you, I got a question from. 0:20:39.960 --> 0:20:41.840 Our audience that's tuned in right now. 0:20:42.400 --> 0:20:45.000 If AI will help white collar workers in the US, 0:20:45.040 --> 0:20:48.360 as you said, what are the implications for those industries 0:20:49.080 --> 0:20:52.919 that outsource a lot of work to workforces in India, 0:20:52.960 --> 0:20:54.760 for example, I think. 0:20:54.720 --> 0:20:56.119 Some of that work's going to come home. 0:20:56.960 --> 0:20:59.200 I don't think we need to outsource. I think it's 0:20:59.200 --> 0:21:02.560 actually going to be a huge boon for the US 0:21:02.560 --> 0:21:06.800 economy and for our friends that are closer to US. 0:21:08.000 --> 0:21:11.080 I think gonna We're gonna focus more on resilience. 0:21:12.080 --> 0:21:16.359 I just cost mel Lagamassino. We family offices, sere. We 0:21:16.359 --> 0:21:18.439 always go so broad when you join me on the program, 0:21:18.520 --> 0:21:21.840 I really appreciate it your time today out of Miami, 0:21:22.520 --> 0:21:24.960 time for talking tech and first Up by Jew's, once 0:21:25.040 --> 0:21:27.920 considered one of the most valuable startups in the world, 0:21:28.040 --> 0:21:30.320 is seeking to raise one hundred billion dollars in funds 0:21:30.440 --> 0:21:33.600 at evaluation of less than two billion dollars to ease 0:21:33.720 --> 0:21:36.760 its financial problems. That's down from twenty two billion dollars 0:21:36.760 --> 0:21:39.320 in its last round in late twenty twenty two. Plus 0:21:39.359 --> 0:21:42.760 EV sales growth may be slowing, but investor enthusiasm in 0:21:42.800 --> 0:21:46.879 the technology is not. Danish EV charging software startup Monta 0:21:47.200 --> 0:21:50.040 raised eighty seven million dollars in bench capital to expand 0:21:50.080 --> 0:21:52.560 its business across Europe and the US, and a doctored 0:21:52.680 --> 0:21:56.200 audio message of President Joe Biden urging voters in New 0:21:56.200 --> 0:21:59.800