WEBVTT - Microsoft's Activision Takeover and UAW Strike Expansion 0:00:01.520 --> 0:00:06.800 From Mahart where Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:07.120 --> 0:00:22.439 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.600 --> 0:00:27.960 I'm Caroline Heine, Bloomberg's and World sid quarters in New York, 0:00:27.960 --> 0:00:30.480 and I'm Ed Ludlow not in San Francisco, side by 0:00:30.520 --> 0:00:32.680 side for the last time this week, and this is 0:00:32.680 --> 0:00:34.400 Bloomberg Technology coming up. 0:00:34.440 --> 0:00:34.640 Look. 0:00:34.680 --> 0:00:37.040 Microsoft poised the clear it's final. 0:00:36.800 --> 0:00:39.919 Hurdle for its sixty nine million dollar takeover of Activision. 0:00:39.960 --> 0:00:41.240 Blizzard. We'll dig in. 0:00:41.400 --> 0:00:45.040 And the UAW expands its strike against GM and Sotlantis 0:00:45.280 --> 0:00:47.280 as talks progress with Ford. 0:00:47.280 --> 0:00:49.240 We'll give you those latest details. 0:00:48.920 --> 0:00:50.240 Plus iPhone fifteen. 0:00:50.440 --> 0:00:53.120 Hence the shelves around the world today we'll get the 0:00:53.240 --> 0:00:53.920 read on. 0:00:53.880 --> 0:00:55.960 The state of demand for Apple's new products. 0:00:56.080 --> 0:00:59.880 The UK Competition and Markets Authority is essentially green li 0:01:00.200 --> 0:01:04.520 now microsoft sixty nine billion dollar purchase of Activision. They've 0:01:04.560 --> 0:01:08.319 looked at the compromise, which is to sell cloud gaming 0:01:08.560 --> 0:01:13.000 streaming rights to Ubisoft, the Paris or French based video developer. 0:01:13.319 --> 0:01:17.000 Earlier on Bluemberg Television, we had the UKCMA CEO on 0:01:17.319 --> 0:01:19.080 to react to that decision. 0:01:19.120 --> 0:01:20.959 Have a Listen, the. 0:01:21.120 --> 0:01:24.920 Content creation remains with that division, but the ability for 0:01:25.040 --> 0:01:29.120 Ubisoft now to take independent decisions about how that content 0:01:29.200 --> 0:01:32.319 is the distributed through third parties. So we know sort 0:01:32.360 --> 0:01:36.360 of previously Microsoft control and limit the distribution channels for example, 0:01:36.600 --> 0:01:40.600 that doesn't happen. Now that's all within the unilateral control of. 0:01:40.720 --> 0:01:43.119 Ubisoft CMA CEO. 0:01:43.200 --> 0:01:46.360 There. Now let's dig into well the ongoing narrative of 0:01:46.360 --> 0:01:48.920 this story. Mark Bergen is standing by in London and 0:01:49.480 --> 0:01:52.160 I mean, we still got months to go until it's 0:01:52.200 --> 0:01:53.240 formerly green lit. 0:01:53.320 --> 0:01:55.360 But you think we can read the tea leaves that 0:01:55.400 --> 0:01:57.120 this is going to be good to go. 0:01:58.600 --> 0:02:02.000 I think my impression is that microsoftops by October eighteenth, 0:02:02.040 --> 0:02:05.840 so that's even less than a month. But you know, 0:02:06.400 --> 0:02:08.480 these things, as always are up in the air, and 0:02:08.520 --> 0:02:11.800 the regulatory environment, and certainly in the UK and Europe 0:02:12.240 --> 0:02:14.040 can be a little bit more unpredictable when it comes 0:02:14.080 --> 0:02:14.440 to tech. 0:02:15.320 --> 0:02:17.560 You know, Mark, at the beginning of the summer, I 0:02:17.560 --> 0:02:19.639 don't think anyone thought this deal was going to go through, 0:02:19.639 --> 0:02:23.200 and they overcame the regulatory hurdles here in the United States. 0:02:23.520 --> 0:02:26.720 Now the UK CMA was the final hurdle. What was 0:02:26.760 --> 0:02:32.160 the CMA's argument or commentary on why they felt Ubisoft 0:02:32.280 --> 0:02:33.560 was a good enough compromise. 0:02:34.639 --> 0:02:37.720 I think this is a really interesting concession, and from 0:02:37.720 --> 0:02:41.240 my understanding, it's like they're basically looking for a third 0:02:41.280 --> 0:02:44.320 party that's not Microsoft here that can be making these 0:02:44.360 --> 0:02:46.920 decisions around around cloud gaming. If you buy that the 0:02:46.960 --> 0:02:49.840 Microsoft thesis, and certainly like other companies like Google have 0:02:50.680 --> 0:02:53.120 tried and probably will continue to try in this world 0:02:53.160 --> 0:02:58.280 of cloud gaming. Having giving Microsoft it feels like giving 0:02:58.320 --> 0:03:02.000 Microsoft control of that. If you if you have Uboseelf involved, 0:03:02.160 --> 0:03:05.079 then you have this third party company, a French company 0:03:05.760 --> 0:03:08.320 that can sort of deny the ability for Microsoft to 0:03:08.320 --> 0:03:09.240 manipulate the market. 0:03:10.080 --> 0:03:13.000 Microsoft Bradsmith in particular comes out saying that they're still 0:03:13.040 --> 0:03:15.440 going to be working towards this October the eighteenth deadline, 0:03:15.440 --> 0:03:19.200 as you point out, Mark, But what a different environment. 0:03:19.240 --> 0:03:20.040 I mean, this has been a. 0:03:20.080 --> 0:03:22.880 Year and a half since they first wanted to get 0:03:22.880 --> 0:03:25.079 this ninety five dollars a shared deal done. 0:03:25.560 --> 0:03:26.359 What's changed? 0:03:26.400 --> 0:03:30.200 I mean, it's still the business basis remaining the same. 0:03:30.240 --> 0:03:31.720 Is it's still all about mobile gaming. 0:03:33.680 --> 0:03:37.280 My impression there's an armchair of political analysis here, which 0:03:37.360 --> 0:03:41.880 is that the CMA was sort of the only organization 0:03:41.960 --> 0:03:45.240 in the US in even the EU, which is typically 0:03:45.280 --> 0:03:47.800 sort of a much more willing to block these sort 0:03:47.840 --> 0:03:51.760 of deals, gave the green light. What's happening here in 0:03:52.120 --> 0:03:55.160 two months in London is the Prime Minister is holding 0:03:55.160 --> 0:03:59.160 this big summer around AI, this focus on AI safety, 0:03:59.200 --> 0:04:01.960 but also trying to build out the UK as at 0:04:01.960 --> 0:04:04.600 home to innovation and industry. I think it was certainly 0:04:04.640 --> 0:04:07.440 seen the messaging for Microsoft is that if the CMA 0:04:07.520 --> 0:04:11.520 blocks this deal, that is very counterproductive to the ultimate aims, 0:04:12.640 --> 0:04:15.960 and so that probably was maybe one of the factors 0:04:16.360 --> 0:04:19.280 in this redirection here. And I'm sure we've we've done 0:04:19.279 --> 0:04:21.320 some ex and my colleagues have done some excellent reporting 0:04:21.760 --> 0:04:24.760 on what went on behind the scenes here. We saw 0:04:24.800 --> 0:04:27.080 this morning that I think the activision price is now 0:04:27.120 --> 0:04:30.160 back to where it would have been initially paid, which 0:04:30.200 --> 0:04:31.560 just means a lot of lawyers made a lot of 0:04:31.600 --> 0:04:32.440 money in the past year and a. 0:04:32.440 --> 0:04:35.880 Half and they always mart Bergen, thank you very much. Indeed, 0:04:36.320 --> 0:04:37.640 go have a good Friday night. 0:04:37.680 --> 0:04:40.599 Meanwhile, let's talk about what's happening elsewhere in terms of 0:04:40.640 --> 0:04:44.479 relationships between private and public. UAW expanding its strike against 0:04:44.480 --> 0:04:46.400 the lantis En GM as I was just saying, Look, 0:04:46.520 --> 0:04:49.480 the un union, in fact has announced that it's made 0:04:49.480 --> 0:04:52.120 some real progress with Ford in talks over a new 0:04:52.160 --> 0:04:53.680 labor contract for more. 0:04:53.760 --> 0:04:55.800 Let's bring in Bluemos, Gabrielle. 0:04:55.400 --> 0:04:58.200 Coverla and Gabby, we will try and put the tech 0:04:58.320 --> 0:05:00.920 lens on this. And you did it so expertly last 0:05:00.920 --> 0:05:03.479 time to shining a light and how much ev transition 0:05:03.760 --> 0:05:05.640 is an issue for these car makers. What do you 0:05:05.680 --> 0:05:08.080 think is the part of why Ford's making progress here? 0:05:09.520 --> 0:05:13.040 Well, I think Ford traditionally has had a better relationship 0:05:13.040 --> 0:05:16.720 with the UAW than the GM or Stilandis. The company 0:05:16.760 --> 0:05:19.520 has said they spend about a billion dollars more on 0:05:19.600 --> 0:05:22.279 labor than GM Orsialandis, and I think a big part 0:05:22.279 --> 0:05:26.560 of that is they have fewer temporary workers. And that 0:05:26.680 --> 0:05:29.719 is a key difference because there is basically a second 0:05:29.720 --> 0:05:32.279 class of workers in America's auto plants, and that is 0:05:32.360 --> 0:05:35.599 these temp workers who you know, they start out at 0:05:35.640 --> 0:05:39.040 about fifteen seventy eight sixteen bucks an hour and they 0:05:39.080 --> 0:05:41.680 talk out at twenty whereas if you're a full time worker, 0:05:42.000 --> 0:05:44.240 you start out at around eighteen dollars. If you can 0:05:44.240 --> 0:05:47.400 talk about at thirty two dollars. So for in some ways, 0:05:47.480 --> 0:05:51.600 Ford was already there, but they are still making significant concessions. 0:05:51.640 --> 0:05:56.560 They agreed to cost of living allowances, basically inflation protection 0:05:56.640 --> 0:05:58.640 for the workers. That's something that went away in two 0:05:58.680 --> 0:06:02.160 thousand and nine of GM and Chrysler and bankrupt. Ford 0:06:02.560 --> 0:06:04.440 agreed to put it back. That was a major thing 0:06:04.480 --> 0:06:09.240 for the union. And also another key thing is the union. 0:06:09.600 --> 0:06:12.279 Sean Fay, the UAW president, said, for the first time 0:06:12.279 --> 0:06:16.120 in history, the union has won the right to strike 0:06:16.200 --> 0:06:20.240 over plant closures during the course of the four year contract. 0:06:20.960 --> 0:06:25.080 Now that's a big deal because if you think about 0:06:25.080 --> 0:06:27.800 the ev transition and the push for you know, lower 0:06:27.800 --> 0:06:30.080 cost and lower labor costs. You know, there's been a 0:06:30.120 --> 0:06:32.760 lot of new auto vans, you know, coming up to Mexico. 0:06:33.240 --> 0:06:36.159 People all three of these companies are making electric cars 0:06:36.160 --> 0:06:38.320 in Mexico, at least some of them, you know the 0:06:38.320 --> 0:06:42.640 books saying it's made in Mexico. RAM has some of 0:06:42.680 --> 0:06:46.800 their delivery vans electric being made in Mexico. So, I mean, 0:06:46.839 --> 0:06:49.920 the UAW, I think, sees the writing on the wall 0:06:50.000 --> 0:06:51.360 and they are really. 0:06:51.240 --> 0:06:53.640 Pushing hard to stop that. 0:06:54.040 --> 0:06:56.360 And with four they've made some progress. I don't know 0:06:56.400 --> 0:06:57.640 if they're going to be able to pull that off 0:06:57.640 --> 0:06:59.960 from gmrs. The land is but more in at a certain. 0:06:59.760 --> 0:07:02.800 Open Gabby Sean Fain's kind of big picture argument has 0:07:02.800 --> 0:07:05.880 been billions of dollars from the Inflation Reduction Act is 0:07:05.880 --> 0:07:09.440 going into the infrastructure. The companies can take that, and 0:07:09.680 --> 0:07:12.760 he's basically saying, like the labor has to go with it. 0:07:13.160 --> 0:07:14.760 You know, you have to you have to take some 0:07:14.880 --> 0:07:19.040 of that money and invest in the workforce long term. 0:07:19.200 --> 0:07:22.400 My question is, like net net, do evs require the 0:07:22.440 --> 0:07:25.080 same number of jobs on the assembly line as a 0:07:25.080 --> 0:07:29.920 combustion edging a combustion engine card does well, you know. 0:07:29.920 --> 0:07:33.760 There's been studies that suggest that no, you know, they 0:07:33.760 --> 0:07:37.200 do require fewer workers, especially when you think about you know, 0:07:37.320 --> 0:07:40.320 longer ready to make engines you know, or you know, 0:07:40.440 --> 0:07:42.960 some of the transmission that you see in a combustion echin. 0:07:43.480 --> 0:07:46.520 But you know, I would argue that we still don't 0:07:46.520 --> 0:07:48.960 have a really clear picture on that. You know, it's 0:07:49.000 --> 0:07:51.800 still early days in this, and there are you know, 0:07:51.880 --> 0:07:54.600 there are new jobs. We look at the billions of 0:07:54.680 --> 0:07:57.120 dollars in investments, you know, the companies are making to 0:07:57.120 --> 0:08:00.560 build battery plants in the United States, know, I think 0:08:00.640 --> 0:08:03.640 GM has talked about they're actually bringing more of some 0:08:03.720 --> 0:08:06.280 of their kind of powertrain work in house so they 0:08:06.280 --> 0:08:09.440 can have a place for union workers to go to 0:08:09.520 --> 0:08:10.560 and the EV transitions. 0:08:10.600 --> 0:08:12.280 The Lands has talked about that as well. 0:08:12.560 --> 0:08:15.800 The question is what kind of jobs will those EV 0:08:16.000 --> 0:08:19.239 jobs be, and that you know, that question is crucial 0:08:19.240 --> 0:08:22.000 to the u a W members. It's crucial also to 0:08:22.120 --> 0:08:24.720 our national politics. And you know you saw that, you know, 0:08:25.120 --> 0:08:27.600 former President Donald Trump has come in the Detroit next week. 0:08:27.880 --> 0:08:32.240 This morning, Sean Grain officially invited President Biden to come 0:08:32.360 --> 0:08:35.000 visit the picket line. So whether or not these future 0:08:35.040 --> 0:08:37.600 EV jobs are good jobs is critical not just to 0:08:38.120 --> 0:08:40.920 the UAW and you know, these workers stand there living, 0:08:41.000 --> 0:08:42.839 but also it's going to play It's going to be 0:08:42.840 --> 0:08:46.600 a huge issue in our you know, presidential elections for 0:08:46.640 --> 0:08:48.080 the whole coming years. 0:08:48.200 --> 0:08:49.319 It's just a huge topic. 0:08:49.920 --> 0:08:52.600 Bloomberg's Gota Coppola out there in Detroit. Just so good 0:08:52.600 --> 0:08:55.000 to have you here on Bloomberg Technology bringing us the 0:08:55.000 --> 0:08:56.920 breaking is coming out from the show. We're going to 0:08:56.960 --> 0:08:59.160 talk about the broader health of the tech sector with 0:08:59.320 --> 0:09:00.600 Denise Chishom Fidelity. 0:09:00.880 --> 0:09:04.000 I love having Denise on the show. This is Bloomberg Technology. 0:09:13.440 --> 0:09:14.080 What a week. 0:09:14.160 --> 0:09:15.880 Whether you're looking at the FED, whether you look at 0:09:15.880 --> 0:09:18.559 the UN, whether you're looking at IPO windows, but notably 0:09:18.559 --> 0:09:20.400 also whether you're looking at money being drawn out of 0:09:20.440 --> 0:09:22.000 the stock market. We're seeing the S and P five 0:09:22.080 --> 0:09:25.120 hundred having the most amount of funds come out since 0:09:25.120 --> 0:09:26.080 we understand in December. 0:09:26.080 --> 0:09:27.680 That's according to Bank of American Merrill Lynch. 0:09:27.760 --> 0:09:30.680 But let's dig into whether that's really coming out of 0:09:30.679 --> 0:09:33.160 the tech sector, whether it should be Denise Chisholmers with us. 0:09:33.160 --> 0:09:35.240 She's Fidelity head of Sector Strategy. 0:09:35.360 --> 0:09:36.080 Denise is great to. 0:09:36.120 --> 0:09:37.840 Have some time with you, and I'm just interested as 0:09:37.880 --> 0:09:40.400 to when we've seen quite a hard shell off in 0:09:40.440 --> 0:09:41.240 the last three days. 0:09:41.240 --> 0:09:43.400 Today we steady a little bit. What do you make 0:09:43.440 --> 0:09:44.280 of these valuations? 0:09:44.280 --> 0:09:46.440 What do you make of a NASDAC basically was almost 0:09:46.440 --> 0:09:49.360 an oversold territory or down at almost thirty. 0:09:50.240 --> 0:09:52.240 Yeah, when you look back at the short term volatility 0:09:52.280 --> 0:09:55.160 we're seeing now is exactly a surprise given a really 0:09:55.200 --> 0:09:58.080 strong rotation we've seen in the overall market and then 0:09:58.200 --> 0:10:02.640 obviously an economically sensitive sec like technology, So a little 0:10:02.679 --> 0:10:05.920 bumping around over the short term isn't really a surprise 0:10:05.960 --> 0:10:08.400 given the strength of that move. I think history can 0:10:08.440 --> 0:10:10.320 help a little when you sort of step back and 0:10:10.440 --> 0:10:12.600 zoom out. What's likely to happen in the future and 0:10:12.640 --> 0:10:15.840 not the past is one hundred percent predictive of future performance. 0:10:15.880 --> 0:10:19.880 But the stronger that cyclical rotation into economically oriented sectors, 0:10:20.160 --> 0:10:23.480 the more likely it is to continue. And the reason 0:10:23.559 --> 0:10:26.920 behind that is it's more likely that when stocks have 0:10:27.160 --> 0:10:29.839 moved as strange as it seems, when earnings are actually 0:10:29.920 --> 0:10:33.600 currently contracting, stocks more often than not get it right 0:10:33.880 --> 0:10:37.120 and earnings do in fact recover, and then the risk 0:10:37.200 --> 0:10:42.040 reward for those cyclical sectors like technology actually is still positive. 0:10:42.600 --> 0:10:44.600 Hey, Denise Carrot kick us off with let's play a 0:10:44.640 --> 0:10:46.840 game of technology risk factor BINGO. 0:10:47.200 --> 0:10:49.800 Because you read everything out, so you add the IPO window. 0:10:49.960 --> 0:10:53.520 We had China most recently the FED and then some 0:10:53.559 --> 0:10:55.560 economic data in the twenty four hours that followed that 0:10:55.600 --> 0:10:58.040 said the Fed's going to stay the course. What's BINGO 0:10:58.120 --> 0:11:00.320 for you? Like, what is the biggest fact that you're 0:11:00.360 --> 0:11:01.880 thinking about as it relates to tech. 0:11:02.520 --> 0:11:04.480 Yeah, I think it all has to come back to earnings, 0:11:04.840 --> 0:11:07.000 and that's the biggest factor one. 0:11:07.080 --> 0:11:09.760 Sorry, So that's my pick for. 0:11:09.760 --> 0:11:12.400 Bingo earnings, not any of that. I mean, I think 0:11:12.400 --> 0:11:14.840 that the FED. It's interesting when you think about interest rates, 0:11:14.840 --> 0:11:16.679 and I think people do think that they're very, very 0:11:16.679 --> 0:11:19.040 correlated to technology stocks. And it's not to say that 0:11:19.040 --> 0:11:22.480 they're not over short term periods. We obviously saw that 0:11:22.520 --> 0:11:25.680 in twenty twenty two. But when you think about interest rates, 0:11:25.720 --> 0:11:29.040 it's a very shifting correlation because the why behind higher 0:11:29.120 --> 0:11:32.560 rates matters more than the level. Meaning when rates are 0:11:32.600 --> 0:11:37.000 actually rising and growth is accelerating, then the technology sector 0:11:37.000 --> 0:11:40.360 and the stock market overall really has had little problem 0:11:40.440 --> 0:11:43.680 with higher rates. The problem comes in when you have 0:11:44.080 --> 0:11:46.680 higher rates and lower growth. Now that's where we were 0:11:46.679 --> 0:11:49.480 in twenty twenty two. So I think that you could 0:11:49.520 --> 0:11:52.839 be looking at a very changing correlation where rates and 0:11:52.880 --> 0:11:55.280 the FED were the only variable that you cared about 0:11:55.280 --> 0:11:58.920 as an investor in inflation to a situation where that 0:11:59.000 --> 0:12:01.160 might be more or less in the rear view mirror 0:12:01.400 --> 0:12:04.040 and earnings needs to be the focus because if earnings 0:12:04.040 --> 0:12:07.840 are going to recover, then interest rates and even valuations 0:12:07.960 --> 0:12:10.240 is much much less predictive when you look at history. 0:12:10.920 --> 0:12:14.040 What's so interesting is I'm interested in where you think 0:12:14.320 --> 0:12:17.480 earnings I mean, upon us till what October thirteenth, I 0:12:17.520 --> 0:12:18.760 was just immniant JP Morgan. 0:12:18.840 --> 0:12:19.280 They sort of. 0:12:19.280 --> 0:12:22.400 Tends to kick things off in the banking sector. Got 0:12:22.400 --> 0:12:25.080 a couple of weeks to wait, We've just had a 0:12:25.160 --> 0:12:28.000 name big in your town. Clavio come to the market, 0:12:28.040 --> 0:12:31.160 Boston born and bred and now publicly traded. It's now 0:12:31.280 --> 0:12:34.520 trading what at thirty two thirty three dollars versus its 0:12:34.559 --> 0:12:37.800 pricing point? But where do we look for the investment 0:12:37.840 --> 0:12:41.680 opportunities within technology because it all seemed to be about AI. 0:12:41.480 --> 0:12:42.400 At one point. 0:12:43.160 --> 0:12:45.880 Yeah, I don't know as much as it was about AIS. 0:12:45.960 --> 0:12:48.240 We certainly saw the move and the stocks. I mean 0:12:48.240 --> 0:12:51.680 that is more of a forward earnings story. And for me, 0:12:51.760 --> 0:12:54.280 when I looked at the historical pattern, as much as 0:12:54.320 --> 0:12:56.680 people were talking about it being all about five stocks, 0:12:57.120 --> 0:13:00.280 really the historical pattern that we saw in technology is 0:13:00.440 --> 0:13:04.680 fairly typical when you actually see an earnings contraction in 0:13:04.720 --> 0:13:07.880 the stocks move before earnings growth does. And that's the 0:13:07.960 --> 0:13:11.839 trickiest part about looking at multiples or looking at valuation 0:13:12.120 --> 0:13:14.720 to see if whether or not that this move is done, 0:13:14.960 --> 0:13:20.440 because more often than not, trough earnings is coincident with 0:13:20.840 --> 0:13:24.240 peak multiples, and that isn't a great predictive factor when 0:13:24.240 --> 0:13:26.760 you look at forward earnings. So the biggest moves that 0:13:26.840 --> 0:13:29.960 you have seen in the technology sector from a forward 0:13:30.040 --> 0:13:33.240 perspective when you're saying net revisions be positive, is in 0:13:33.280 --> 0:13:37.199 semiconductors and software, and I think that that's the area 0:13:37.240 --> 0:13:40.800 of the market that investors would qualify as expensive. And 0:13:40.960 --> 0:13:44.120 the problem with that expensive is that it's usually not 0:13:44.320 --> 0:13:48.320 a problem historically provided that earnings recover. Now there is 0:13:48.440 --> 0:13:52.760 valuation support within technology, and that's more in the hardware sector, 0:13:53.120 --> 0:13:55.400 so it's a little bit of a across the board. 0:13:55.880 --> 0:14:00.280 The catalysts are slightly different. So for valuation support, you 0:14:00.360 --> 0:14:03.520 actually don't have really the earnings momentum that other areas have. 0:14:03.880 --> 0:14:06.240 But the places you have earnings momentum, you don't have 0:14:06.360 --> 0:14:09.120 valuation support. But that isn't necessarily negative. 0:14:09.720 --> 0:14:12.120 Learning from the earnings window just gone. You know, you 0:14:12.120 --> 0:14:14.240 think about Video and Apple, what they had in common 0:14:14.880 --> 0:14:18.360 twenty percent of sales coming from China, and they both 0:14:18.480 --> 0:14:20.880 kind of were talked about in the context of long 0:14:20.960 --> 0:14:25.040 term risk China. What's happening politically but also technologically right 0:14:25.120 --> 0:14:29.000 access to technology markets. What does your research there tell 0:14:29.040 --> 0:14:30.440 you about the risk in China. 0:14:31.200 --> 0:14:33.760 Yeah, from a long term perspective, I think that we've 0:14:33.760 --> 0:14:35.880 had a lot of risks in a lot of sectors 0:14:35.880 --> 0:14:37.720 over a lot of years. I mean, what you can 0:14:37.760 --> 0:14:40.400 see when you look back in the historical data for technology, 0:14:40.440 --> 0:14:42.520 and we've got data going back to nineteen sixty two, 0:14:42.920 --> 0:14:46.520 is each cycle, margins have been higher and higher. Right, 0:14:46.600 --> 0:14:50.000 So this secular trend has been fairly consistent, which is 0:14:50.080 --> 0:14:53.280 not to say that there won't be risks in the market. 0:14:53.360 --> 0:14:55.320 And in some ways I'm the wrong person to ask 0:14:55.360 --> 0:14:58.520 that question, because what I really focus on is not 0:14:58.680 --> 0:15:01.360 all the things that could go and trying to discount 0:15:01.360 --> 0:15:04.800 that back to present or even future earnings. But really 0:15:04.840 --> 0:15:08.160 I concentrate around what is being discounted in the stock 0:15:08.200 --> 0:15:10.960 market because we've seen and even over the last year, 0:15:11.000 --> 0:15:14.120 we've seen this tricky scenario where stocks can advance quite 0:15:14.280 --> 0:15:17.200 rapidly despite the fact that there is bad. 0:15:17.080 --> 0:15:19.080 News and that's the wall of worry. 0:15:19.440 --> 0:15:19.600 Right. 0:15:19.640 --> 0:15:22.080 So when you think about risk from China, how do 0:15:22.160 --> 0:15:25.280 I as an investor know if that's a wall of worry 0:15:25.440 --> 0:15:28.440 issue or a real earnings hit. And I think, in 0:15:28.480 --> 0:15:31.120 some ways, instead of sort of trying to figure out 0:15:31.120 --> 0:15:33.400 whether or not it is is to think about what 0:15:33.440 --> 0:15:34.720 the stocks have discounted. 0:15:35.120 --> 0:15:36.440 Let's go from the wall of warry and end on 0:15:36.480 --> 0:15:39.360 a happy note. This Friday, Caroline talks about claviy. I 0:15:39.400 --> 0:15:41.520 just wanted to ask you about Boston and for you 0:15:41.560 --> 0:15:43.360 to have the opportunity to give a shout out to 0:15:43.360 --> 0:15:44.600 the tech sector in Boston. 0:15:45.640 --> 0:15:47.400 Yes, I will definitely give a shout out to the 0:15:47.400 --> 0:15:48.400 tech sector in Boston. 0:15:48.720 --> 0:15:50.360 All right, Well, that was short and sweet. We love it. 0:15:50.400 --> 0:15:52.760 Denise Chisholm, facility head of Strategy. 0:15:52.840 --> 0:15:53.200 Thank you. 0:15:53.280 --> 0:15:57.320 Caro yea, all eyes on. What a global text story. 0:15:57.360 --> 0:15:59.720 Meanwhile, let's just go over to what we've been seeing 0:16:00.200 --> 0:16:04.560 the home today. I cycled past the New York shop 0:16:04.680 --> 0:16:07.320 of course store as you might call it in America 0:16:07.400 --> 0:16:09.520 of Apple and the new iPhones. 0:16:09.560 --> 0:16:11.840 They're on deck, the launchers there. Tim Cook was in town. 0:16:12.320 --> 0:16:14.800 It was busy, The cues were enormous. 0:16:14.960 --> 0:16:17.680 What does that signal about ali appetite for these particular 0:16:18.600 --> 0:16:19.080 new phones. 0:16:19.080 --> 0:16:20.800 I phoned fifteen in particular. 0:16:27.800 --> 0:16:29.560 All right, time for talking tech and first up in 0:16:29.600 --> 0:16:32.400 the news Canio. The logistics arm of Ali. Barber's planning 0:16:32.400 --> 0:16:34.960 to file for its Hong Kong IPO as soon as 0:16:35.000 --> 0:16:37.320 next week that according to sources, this would make it 0:16:37.560 --> 0:16:40.320 among the first of the Chinese tech firms units to 0:16:40.520 --> 0:16:43.240 go public. The company's sargoning a raise of at least 0:16:43.320 --> 0:16:46.240 one billion dollars in the share sale, and the Biden 0:16:46.240 --> 0:16:50.240 administration is limiting expansion in China by chip companies getting 0:16:50.240 --> 0:16:53.320 federal funds to build plants. In the US, the announcement 0:16:53.360 --> 0:16:56.120 comes as the Chips Program Office is getting ready to 0:16:56.120 --> 0:16:59.280 give about thirty nine billion dollars in grants and seventy 0:16:59.280 --> 0:17:03.320 five billion dollars in loans and loan guarantees. Plus, Amazon 0:17:03.560 --> 0:17:06.840 will run ads on its Prime Video service in key 0:17:06.920 --> 0:17:10.400 markets to help offset rising costs. Following the example, of course, 0:17:10.440 --> 0:17:13.400 of other streaming platforms that are looking to further monetize 0:17:13.400 --> 0:17:16.280 their content. The company says AD supporting streaming will be 0:17:16.320 --> 0:17:20.120 the default on Prime Video in the US, UK, Germany 0:17:20.160 --> 0:17:22.960 and Canada starting early next year. 0:17:23.040 --> 0:17:24.680 Caroline, another one bites the dust. 0:17:24.680 --> 0:17:28.479 Meanwhile, the iPhone fifteen, those watches they officially went on 0:17:28.600 --> 0:17:32.040 sale today in the latest test for resilient consumer demand 0:17:32.040 --> 0:17:33.960 here in the US and globally, and it's all about 0:17:34.000 --> 0:17:36.880 Apple's devices. We're going to see how strong the start 0:17:36.920 --> 0:17:39.440 has been. Let's bring in Bloomberg's Mark German and Mark. 0:17:39.640 --> 0:17:42.280 I cycled on my way on my city BikeE passed 0:17:42.520 --> 0:17:44.720 the one right by Central Park today and the queues 0:17:44.720 --> 0:17:45.480 were enormous. 0:17:45.800 --> 0:17:48.679 That's typical though, right, Yeah, we're. 0:17:48.520 --> 0:17:50.679 Actually seeing lines that are a bit longer than we 0:17:50.720 --> 0:17:52.920 did the last few years. Obviously, we had a few 0:17:52.960 --> 0:17:55.280 pandemic years, so that sort of sucked the wind out 0:17:55.280 --> 0:17:58.680 of you know, lines at Apple stores. But clearly and 0:17:59.119 --> 0:18:01.480 seemingly the line are bigger than the past two years, 0:18:02.040 --> 0:18:06.480 based on everything we're seeing from Mumbai to Sydney to 0:18:06.600 --> 0:18:10.240 Japan to Los Angeles. Clearly there's a little bit more 0:18:10.280 --> 0:18:13.199 momentum here. I think some of the reason is maybe 0:18:13.240 --> 0:18:15.679 some of these people tried to pre order online but 0:18:15.680 --> 0:18:18.919 they were quickly meant with delays into mid November or 0:18:18.960 --> 0:18:21.240 even later in some regions, so they had no choice 0:18:21.359 --> 0:18:21.760 if they. 0:18:21.680 --> 0:18:23.360 Wanted one on day one to line up. 0:18:23.400 --> 0:18:25.959 But clearly there is a strong amount of momentum, at 0:18:26.000 --> 0:18:27.720 least for the new pro phones this year. 0:18:27.840 --> 0:18:31.080 So here's the questions, right, the holiday season's key, So 0:18:31.119 --> 0:18:33.560 do you frontload, do you buy it now or do 0:18:33.640 --> 0:18:36.800 you wait? And then we call it iPhone fifteen? But 0:18:37.040 --> 0:18:39.959 they're four handsets to choose from. Do they go Pro, 0:18:40.560 --> 0:18:42.399 Promax or Base model. 0:18:44.080 --> 0:18:48.160 Yeah, I think the Promax is actually especially important this year. Obviously, 0:18:48.160 --> 0:18:50.000 they removed the one hundred and twenty eight gigabyte tier 0:18:50.080 --> 0:18:52.400 that was the base tier for the phone in terms 0:18:52.440 --> 0:18:55.760 of storage, that was eleven hundred dollars. Now they're starting 0:18:55.800 --> 0:18:58.600 at twelve hundred dollars by eliminating that tier and starting 0:18:58.600 --> 0:19:01.359 with a two hundred fifty six gigabyte model, and that 0:19:01.480 --> 0:19:04.720 has additional functionality in addition to the bigger battery and 0:19:04.760 --> 0:19:07.399 the bigger display. This new five X zoom on the 0:19:07.440 --> 0:19:09.760 camera for the telephoto ones. So I think we're going 0:19:09.800 --> 0:19:12.399 to see more people than typical upgrade to that biggest 0:19:12.440 --> 0:19:15.040 size for that extra camera improvement. 0:19:15.720 --> 0:19:18.639 Mark great to have for your expertise, online lengths and 0:19:18.680 --> 0:19:19.240 everything else. 0:19:19.640 --> 0:19:26.640 We appreciate it. 0:19:28.600 --> 0:19:31.399 Welcome back to Bloomberg Technology. I'm and Dadlow here in 0:19:31.440 --> 0:19:33.160 New York City, one last day. 0:19:33.400 --> 0:19:35.280 Meanwhile, I'm karenin high Let's get a quick check on 0:19:35.320 --> 0:19:38.440 these markets on this Friday play day. We're seeing currently 0:19:38.840 --> 0:19:40.960 up a percentage point. Now's that one hundred managing to 0:19:40.960 --> 0:19:42.920