WEBVTT - Bitcoin ETF Gets Green Light 0:00:01.400 --> 0:00:05.720 From Mahard where Innovation, money and power Collie in Silicon 0:00:05.800 --> 0:00:06.720 Vallet NBN. 0:00:07.040 --> 0:00:11.559 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:24.440 --> 0:00:26.799 And Caroline heind of Bloomberg's World headquarters in New York, 0:00:27.160 --> 0:00:29.040 and I'm Ed Ludlow in San Francisco. 0:00:29.160 --> 0:00:31.040 This is Bloomberg Technology coming up. 0:00:31.080 --> 0:00:31.880 Crypto assets. 0:00:31.880 --> 0:00:34.920 They surge as a court overturns the SEC and paves 0:00:34.960 --> 0:00:38.239 the way for the first US Bitcoin ETF will keep 0:00:38.240 --> 0:00:39.240 you covered throughout the hour. 0:00:40.000 --> 0:00:42.080 Claus will bring you the latest from the earnings front 0:00:42.120 --> 0:00:45.640 as China's PDD surges, MIDA revenue b and show me 0:00:45.800 --> 0:00:47.080 tops profit estimates. 0:00:47.240 --> 0:00:50.520 More ahead, an Apollo io raises one hundred million dollars 0:00:50.560 --> 0:00:52.600 to reach a one point six billion dollar valuation and 0:00:52.760 --> 0:00:53.240 up round. 0:00:53.640 --> 0:00:56.040 We'll sit down with the CEO later this hour to discuss. 0:00:56.080 --> 0:00:58.680 But first, well, let's hone in on what has been 0:00:58.720 --> 0:01:02.520 the story of the last hour. Bitcoin surging, that sudden 0:01:03.000 --> 0:01:05.160 move to the upside. We're back in that twenty seven 0:01:05.240 --> 0:01:07.479 thousand dollars range on the og of the crypto space, 0:01:07.520 --> 0:01:10.080 up five point six percent. Why because it seems as 0:01:10.120 --> 0:01:12.760 though this federal court has gone against the grain of 0:01:12.800 --> 0:01:15.360 the SEC has a side that maybe we can carve 0:01:15.400 --> 0:01:18.560 away for a spot bitcoin ETF. 0:01:18.600 --> 0:01:20.760 This is all about the Grayscale ruling ED. 0:01:22.000 --> 0:01:25.240 Yeah, and we're also seeing that app unsurprisingly play out 0:01:25.240 --> 0:01:28.679 in crypto related stocks, coinbased, for example, jumping by the 0:01:28.720 --> 0:01:31.000 most in more than six weeks. Our colleagues at Bloomberg 0:01:31.040 --> 0:01:33.200 Intelligence have a note out that kind of applies to 0:01:33.240 --> 0:01:37.000 all of these names, that each part of the universe relates. 0:01:37.040 --> 0:01:40.240 Crypto may benefit as more ETF SKED approved, but they 0:01:40.240 --> 0:01:43.040 do note that there are multiple applications, right, so black 0:01:43.120 --> 0:01:46.200 Rock being one institution that has an ETF application in 0:01:46.520 --> 0:01:50.360 how does coinbase benefit, as an example, from servicing those 0:01:50.440 --> 0:01:52.640 up thirteen point four percent. I think we've got to 0:01:52.680 --> 0:01:54.720 go to the understanding what has happened. It was a 0:01:54.720 --> 0:01:57.800 bit of a surprise. That's bringing Bloomberg's Shnale Bassek, and 0:01:57.840 --> 0:02:00.240 I guess a good place to start Shanale is what 0:02:00.280 --> 0:02:04.600 did the appeals court say about the original SEC decision 0:02:04.920 --> 0:02:07.680 to block an application for a bitcoin ets. 0:02:07.440 --> 0:02:09.640 Now, I think the part that's very important here at 0:02:09.760 --> 0:02:13.120 is this idea that the denial of Grayscale's proposal, and 0:02:13.160 --> 0:02:15.920 this is according to the ruling that the denial was 0:02:16.080 --> 0:02:19.640 arbitrary and capricious because the Commission failed to explain the 0:02:19.639 --> 0:02:22.079 difference of treatment of similar products, which was a key 0:02:22.120 --> 0:02:23.560 part of the Grayscale argument. 0:02:23.600 --> 0:02:23.799 Here. 0:02:24.080 --> 0:02:26.560 When you look at the decision here by the court, 0:02:26.600 --> 0:02:30.080 and remember there are three drudges that ruled in Greyscale's favor, 0:02:30.880 --> 0:02:33.919 there is a process that you have to understand. This 0:02:34.000 --> 0:02:36.280 is this idea that there are now forty five days 0:02:36.320 --> 0:02:39.440 in which both sides review this ruling and the sec 0:02:39.480 --> 0:02:41.960 could always push back. Now, the other thing that is 0:02:41.960 --> 0:02:45.079 a big open question for Grayscale is the idea of 0:02:45.120 --> 0:02:48.040 whether they have to refile for an etf Remember when 0:02:48.080 --> 0:02:51.400 you look at grayscales filing relative to many other filings, 0:02:51.440 --> 0:02:54.280 including black Rock's own filing. Is this idea of a 0:02:54.320 --> 0:02:58.120 surveillance sharing agreement that is something that has largely been 0:02:58.160 --> 0:03:00.919 said to be benefiting some of the filings such as 0:03:00.960 --> 0:03:03.320 black Rocks. Actually, in the next hour or so, we're 0:03:03.320 --> 0:03:06.560 also going to be speaking to coinbases top lawyer about 0:03:06.600 --> 0:03:09.600 the benefits of, for example, a surveill lancher and agreement, 0:03:09.639 --> 0:03:12.040 in which Coinbase has been a big part of that push. 0:03:13.000 --> 0:03:16.880 It is unclear how soon Rayscale can get from a 0:03:16.919 --> 0:03:21.400 GBTC to an ETF conversion, and really right now when 0:03:21.400 --> 0:03:26.360 you look at GBTC, it has narrowed. The discount to 0:03:26.400 --> 0:03:29.080 its net asset value has narrowed quite meaningfully. But in 0:03:29.160 --> 0:03:34.560 recent years the reason to hold GBTC has really become 0:03:35.160 --> 0:03:37.400 part of the idea that it would eventually convert to 0:03:37.440 --> 0:03:40.280 an ETF. Even just today, in the wake of the ruling, 0:03:40.360 --> 0:03:43.600 you were looking this morning at a twenty five percent 0:03:43.680 --> 0:03:46.360 nearly discount to net asset value that has narrowed to 0:03:46.440 --> 0:03:49.520 fifteen percent, and so you are seeing it come much 0:03:49.560 --> 0:03:52.080 closer to its net asset value in the wake of 0:03:52.120 --> 0:03:55.640 this ruling, in the expectation of even with this uncertainty, 0:03:56.280 --> 0:03:58.920 this is still a large win for Grayscale and the 0:03:58.920 --> 0:04:01.200 crypto industry, and are seeing to the point you're making 0:04:01.200 --> 0:04:02.520 earlier bitcoin. 0:04:02.160 --> 0:04:04.280 Prices and other crypto related stacks rise. 0:04:04.160 --> 0:04:06.840 And synchrony SEC saying that the agency is reviewing the 0:04:06.880 --> 0:04:09.720 court decision on gray Scale, and of course gray Scale 0:04:09.760 --> 0:04:12.360 anticipating what five point seven billion dollars could be on 0:04:12.480 --> 0:04:14.720 Earth could be of value could be sort of given 0:04:14.760 --> 0:04:16.680 back to the investor base if indeed it could turn 0:04:16.680 --> 0:04:19.159 from a trust into an ETF Shnali Bassac all over 0:04:19.240 --> 0:04:22.160 the sort of nuance and really going into some of 0:04:22.520 --> 0:04:24.440 the micro but let's go a bit more macro. What 0:04:24.440 --> 0:04:26.320 this means for the industry. And please to say Aya 0:04:26.400 --> 0:04:28.359 Kantorovich is with us. She is the co founder and 0:04:28.400 --> 0:04:31.760 Coco Fractal, it's an infrastructure provider for institutional crypto training 0:04:31.800 --> 0:04:36.760 on chain. Does this law in more institutional players? Does 0:04:36.800 --> 0:04:37.320 this mean? 0:04:37.560 --> 0:04:40.080 And this is almost a safer space to get into now. 0:04:40.920 --> 0:04:43.640 Absolutely, and you can see that in terms of overall 0:04:43.720 --> 0:04:47.880 market sentiment. So Coinshares published a very interesting report this 0:04:47.960 --> 0:04:53.080 morning that showed the outflow of dollars into crypto products 0:04:53.080 --> 0:04:57.920 institutional products was at its highest similar to March during 0:04:57.960 --> 0:05:01.400 the banking crisis, And so overall sentiment was really negative 0:05:01.680 --> 0:05:03.680 leading into this news, and I think to all the 0:05:03.720 --> 0:05:06.520 points mentioned before, the market was really caught off guard 0:05:06.920 --> 0:05:08.520 in terms of the announcement this morning. 0:05:08.560 --> 0:05:09.200 It's really great. 0:05:09.240 --> 0:05:13.760 It changes the sentiment in the US and globally for 0:05:13.880 --> 0:05:16.800 institutions around this is moving forward. We're actually going to 0:05:16.880 --> 0:05:19.120 get the guidelines we've been looking for in terms of 0:05:19.160 --> 0:05:21.159 how to approach the space at large and. 0:05:21.240 --> 0:05:24.080 Go global for a moment with us, because look, other 0:05:24.160 --> 0:05:28.839 places have spot bitcoin ets. What has been the US's 0:05:29.360 --> 0:05:31.640 issue with it? What more broadly, have you felt as 0:05:31.680 --> 0:05:34.599 different with the SEC versus other regulators. 0:05:34.520 --> 0:05:38.240 At a high level, it's really the different players that 0:05:38.400 --> 0:05:41.200 are in the space today, whether it is on the 0:05:41.279 --> 0:05:44.279 fact of the SEC working closely with Coinbase and obviously 0:05:44.360 --> 0:05:46.640 there's a lawsuit there that they're working through the SEC 0:05:46.680 --> 0:05:50.080 and Greyscale. There's a bunch of intermediaries today that the 0:05:50.120 --> 0:05:52.880 SEC is working with, and it is just simply unclear 0:05:53.240 --> 0:05:55.240 in terms of how the SEC is going to regulate 0:05:55.360 --> 0:05:59.320 versus them pushing out a rule book or Congress having 0:05:59.360 --> 0:06:02.719 to just take the step and make guidelines for everyone 0:06:02.839 --> 0:06:06.320 in the United States to follow. And unfortunately, even if 0:06:06.360 --> 0:06:09.120 you compare to the UK with Micah, you know, we 0:06:09.279 --> 0:06:14.200 just haven't seen that level of proactive guidelines in the 0:06:14.279 --> 0:06:14.920 United States. 0:06:16.000 --> 0:06:18.760 Judge Naomi Rao, who was on the appeals panel, pointed 0:06:18.800 --> 0:06:22.279 out that specifically the SEC's treatment of Grace the Scale 0:06:22.720 --> 0:06:26.240 was arbitrary and capricious because they hadn't treated others in 0:06:26.279 --> 0:06:29.479 the same way. And our colleague Katie Greifeld, who leads 0:06:29.480 --> 0:06:32.400 our ETF coverage, points out that this is just one 0:06:32.480 --> 0:06:35.080 thing that might happen this week. There's a deadline Friday 0:06:35.400 --> 0:06:37.920 for black Rock, there's a twenty one shares in a 0:06:38.000 --> 0:06:42.559 Vesco deadline Saturday. What happens next to your mind? 0:06:43.640 --> 0:06:46.640 Yeah, again, I think the market was just simply caught 0:06:46.720 --> 0:06:50.800 off guard. We were expecting this GBTC news to come 0:06:50.800 --> 0:06:53.200 out in the last two weeks, and so on the 0:06:53.240 --> 0:06:56.320 backs of Mackerel, on the backs of Jackson Hole, you're 0:06:56.440 --> 0:06:58.760 just seeing that the market was not expecting this news. 0:06:58.760 --> 0:07:03.000 An overall sentiment was implied, volatility was at its lowest, 0:07:03.240 --> 0:07:05.320 and so really what that sets us up for is 0:07:05.360 --> 0:07:09.280 a very volatile Q three and Q four. We're probably 0:07:09.320 --> 0:07:11.440 going to see the next three months have a lot 0:07:11.480 --> 0:07:15.680 of activity between these different players. And listen, the legal 0:07:15.720 --> 0:07:18.760 bandwidth of Blackrock and Fidelity as well as ARC is 0:07:18.800 --> 0:07:20.840 going to be far far larger than some of the 0:07:20.840 --> 0:07:24.160 crypto players, and we will likely see those conversations get 0:07:24.200 --> 0:07:27.200 pushed further than what we've seen to date. So it's 0:07:27.320 --> 0:07:29.480 very exciting for the United States. 0:07:30.880 --> 0:07:34.840 Who benefits the most from this if an ETFs approved 0:07:35.360 --> 0:07:37.240 beyond the ETF provided themselves. 0:07:37.320 --> 0:07:42.360 Who wins institutional investors, And really the reason they win 0:07:42.560 --> 0:07:46.840 is institutional investors are looking for regulated paths to get 0:07:46.880 --> 0:07:51.240 exposure to these assets in structures that they're used to 0:07:51.400 --> 0:07:54.520 in traditional finance, and that just hasn't been available yet 0:07:54.560 --> 0:07:57.400 today in the United States. And so really this is 0:07:57.440 --> 0:08:00.480 a huge push forward for us. We've all said that 0:08:00.520 --> 0:08:03.480 the institutional wave is coming, but it really can't come 0:08:03.880 --> 0:08:07.679 until we have very simple, regulated products available in the market. 0:08:07.720 --> 0:08:09.760 And this is a bit push forward towards that. And 0:08:10.000 --> 0:08:12.160 that's exactly what fractal is a little about. 0:08:12.280 --> 0:08:16.440 I mean, at atf it's pretty basic at best futures 0:08:16.480 --> 0:08:20.200 ETF too. You're thinking about options offerings, you're thinking about 0:08:20.200 --> 0:08:22.560 how you can get basically traditional finance the tradi fly 0:08:22.640 --> 0:08:25.800 world to see what they can do in normal finance 0:08:25.840 --> 0:08:26.720 and bring it to crypto. 0:08:27.120 --> 0:08:29.720 How easy a role, slow a process. 0:08:29.440 --> 0:08:33.200 Is that that's exactly where it's a slow process only 0:08:33.240 --> 0:08:35.439 because it's taken so long for us to get this 0:08:35.640 --> 0:08:39.440 to this first base with the SPOTTYTF. But to your point, 0:08:39.520 --> 0:08:41.360 once we get the SPOTTYTF, it's going to be so 0:08:41.440 --> 0:08:44.280 much clearer for us to be able to give access. 0:08:44.280 --> 0:08:47.200 You saw coinbase CME, who are all able to trade 0:08:47.240 --> 0:08:50.240 futures in the United States, and that took a long 0:08:50.280 --> 0:08:52.320 time for that to happen as well in the States, 0:08:52.320 --> 0:08:54.360 and so you're able to see a path forward for 0:08:54.520 --> 0:08:57.680 us to really be able to offer not only options 0:08:57.720 --> 0:09:01.040 but structure products in a regulated way that institutions are 0:09:01.040 --> 0:09:03.040 comfortable getting access to it. 0:09:03.240 --> 0:09:06.000 It's really very exciting, great to have you here. 0:09:06.240 --> 0:09:08.480 So we'll talk walk us all through the sort of 0:09:08.880 --> 0:09:12.400 ramifications more broadly of this very specific ruling that's come 0:09:12.760 --> 0:09:16.040 from the Appeals court. Ayakon Torovich of course has confractal 0:09:16.120 --> 0:09:17.160 which is basically. 0:09:16.840 --> 0:09:17.600 In the New York. 0:09:25.280 --> 0:09:27.640 All right, we're checking in on some earnings movies out 0:09:27.640 --> 0:09:29.960 of China. These are the US listed shares of some 0:09:30.120 --> 0:09:34.120 China tech names PDD top line growth sixty six percent, 0:09:34.240 --> 0:09:37.640 way outperforming names like Ali, Barbera and JD. But it's 0:09:37.640 --> 0:09:40.360 actually about Timu, their US based business that we're kind 0:09:40.360 --> 0:09:42.560 of interested in. It came out at the Super Bowl 0:09:42.720 --> 0:09:44.320 with an ad. We'll dig into that with our team 0:09:44.320 --> 0:09:47.040 in a second. BYD doubled net income in the quarter. 0:09:47.080 --> 0:09:50.120 We'd already talked about how BYD had had a record 0:09:50.880 --> 0:09:53.800 with both plug in hybrids and battery electric cars in 0:09:53.840 --> 0:09:55.679 the course had just gone now showing up on the 0:09:55.720 --> 0:09:58.319 bottom line in terms of profit neo a wide and 0:09:58.440 --> 0:10:02.120 expected quarterly loss, deletely different story in the EB space, 0:10:02.160 --> 0:10:04.199 and then show me an interesting one in kind of 0:10:04.240 --> 0:10:09.280 the smartphone handset discussion. Better than expected financial results so 0:10:09.360 --> 0:10:10.880 much one pick. I think what they all have in 0:10:10.920 --> 0:10:13.360 common is that we're getting some more signals about the 0:10:13.400 --> 0:10:16.720 Chinese economy and the Chinese consumer. Joining us from with 0:10:16.800 --> 0:10:20.800 more Bloombergs Isabelle in New York and Henry Wren out 0:10:20.840 --> 0:10:23.679 in London. Henry, let's start with you with some of 0:10:23.520 --> 0:10:25.880 the specific names. And I think we'll start with show 0:10:25.960 --> 0:10:28.800 me first because this was one there was a little 0:10:28.840 --> 0:10:30.199 bit surprising to some investors. 0:10:31.480 --> 0:10:34.400 Yeah, so shall mes revenue fell by about four percent 0:10:34.480 --> 0:10:37.240 during the last quarter, but that decline has been better 0:10:37.280 --> 0:10:41.160 than analyst expectations, so that does show that the smartphone 0:10:41.160 --> 0:10:45.160 market slumb might have been past its worst period. Remember 0:10:45.200 --> 0:10:48.120 shall Me sells smartphone devices to all over the world, 0:10:48.240 --> 0:10:51.400 so it's not just in mainland China, but also in India, 0:10:51.559 --> 0:10:54.760 in many emerging market countries, and Latin America some parts 0:10:54.760 --> 0:10:57.200 of Europe as well, So its results does seem to 0:10:57.200 --> 0:11:02.400 be a buometer for the global smart market sentiment. And 0:11:02.440 --> 0:11:08.280 remember that shell Me is also prioritizing its profitability, and 0:11:08.360 --> 0:11:13.440 it's pushing through its strategy for premium offerings, and it 0:11:13.480 --> 0:11:16.120 does seem to be bearing fruit. Its average selling price 0:11:16.160 --> 0:11:19.080 in China has expanded by twenty four percent in the 0:11:19.160 --> 0:11:22.359 last quarter, and the company set our earnings call is 0:11:22.360 --> 0:11:26.520 that it seeks to expand its strategy to not just 0:11:26.520 --> 0:11:29.360 in China, blosso overseas. It says, we just need to 0:11:29.400 --> 0:11:32.840 focus on these premium products like these voldable phones, and 0:11:32.920 --> 0:11:34.439 we do well in this category. 0:11:34.880 --> 0:11:37.960 It's interesting, isn't it that they're saying, yeah, let's go 0:11:38.000 --> 0:11:40.800 for a higher price point, let's actually still be thinking 0:11:40.800 --> 0:11:45.240 about overall profitability over growth when their overall macroeconomy as well. 0:11:45.440 --> 0:11:46.679 It's a pretty painful place. 0:11:46.720 --> 0:11:48.400 We just look at how much they're having to up 0:11:48.400 --> 0:11:51.240 the ante with what we understand going to be cutting 0:11:51.240 --> 0:11:54.199 mortgage rates for example, to try and spur on the 0:11:54.320 --> 0:11:55.000 Chinese ecomy. 0:11:55.000 --> 0:11:56.679 What do any of these earnings really tell us about that? 0:11:57.080 --> 0:11:59.040 So I think these two and Henry can go way 0:11:59.040 --> 0:12:02.240 into more detail, especially with PDDs. They're good earnings. As 0:12:02.280 --> 0:12:04.719 you can see, the stocks are really just reacting very 0:12:04.720 --> 0:12:07.160 positively to them. But then they come with a new one. 0:12:07.280 --> 0:12:09.720 So for instance, just to touch on lightly and PDD 0:12:10.160 --> 0:12:13.760 its focus is more lower income consumers, so then that 0:12:13.840 --> 0:12:16.400 might bode well for China's faltering economy. So it kind 0:12:16.440 --> 0:12:19.480 of works reversed in that way, but Chinese economy still 0:12:19.520 --> 0:12:22.200 really isn't doing as well. Nearly every day you see 0:12:22.280 --> 0:12:25.080 one gloomy headline after the other. For instance, today we 0:12:25.120 --> 0:12:28.600 have Country Garden Holdings, it's a big property giant, it's 0:12:28.640 --> 0:12:31.480 making fresh effort to avoid a default. And then we 0:12:31.520 --> 0:12:33.840 have China Great Weall Asset Management. That's a state that 0:12:33.960 --> 0:12:36.600 run manager and it's also suffering a bond slum. So 0:12:36.800 --> 0:12:39.160 one after the other, the ceaseless warning we're just seeing, 0:12:39.240 --> 0:12:42.240 especially from their credit market. It's just really underscoring one 0:12:42.280 --> 0:12:45.160 thing that the economy is weak. And to your point, 0:12:45.280 --> 0:12:47.320 we also have a lot of developments in the regional 0:12:47.400 --> 0:12:50.600 bank space and the mortgage space, so it's not looking 0:12:50.640 --> 0:12:52.440 that good to see it. Although I mean it's not 0:12:52.480 --> 0:12:54.319 all gloom and doom because as we can see, some 0:12:54.360 --> 0:12:57.360 standout companies like PDD and cl ME are doing well. 0:12:57.480 --> 0:13:01.680 So sometimes what's good for one thing can be bad 0:13:01.720 --> 0:13:02.200 for another. 0:13:03.000 --> 0:13:04.840 You know, Henry, we're showing that big jump on the 0:13:04.840 --> 0:13:08.560 pdd A DR's US listed shares. You know, there's a 0:13:08.640 --> 0:13:12.600 story here about them beating out other domestic Chinese names 0:13:12.720 --> 0:13:14.800 in terms of top line growth. But we learned a 0:13:14.840 --> 0:13:17.680 lot about their US business that we don't discuss pdd 0:13:17.760 --> 0:13:20.000 A lot on this show. Just explain what happened in 0:13:20.000 --> 0:13:20.400 the quarter. 0:13:22.080 --> 0:13:22.360 Yeah. 0:13:22.400 --> 0:13:25.760 Sure, So the overall results are good, as we can 0:13:25.800 --> 0:13:29.680 see in the market reaction, it's a sharp positive reaction 0:13:29.840 --> 0:13:34.840 from investors, twenty percent of sheer price expansion like during 0:13:34.920 --> 0:13:36.000 the during the session. 0:13:36.280 --> 0:13:37.000 But as you. 0:13:37.040 --> 0:13:39.480 Said, the focus is really on Tea Mood. It's a 0:13:39.480 --> 0:13:42.720 but just shopping app overseas. That app has been expanding 0:13:42.800 --> 0:13:44.240 very fast in Europe, but. 0:13:44.240 --> 0:13:46.120 As well as in US as well. 0:13:46.360 --> 0:13:49.200 So the company disclosed very little about this team mod 0:13:49.240 --> 0:13:52.120 shopping app, but it does include that in one of 0:13:52.160 --> 0:13:55.400 its lines called transactional services revenue. 0:13:55.480 --> 0:13:57.480 So that transactional services. 0:13:57.000 --> 0:14:01.080 Revenue includes some things including the t mood, the international business, 0:14:01.160 --> 0:14:04.040 but also the grocery buying business. But that revenue has 0:14:04.080 --> 0:14:07.040 been well above analyst estimates. So it does seem to 0:14:07.080 --> 0:14:11.120 show that that team who has been gaining tractions overseas. However, 0:14:11.960 --> 0:14:15.320 there's another concern. It's on the profitability side, on the margins. 0:14:15.360 --> 0:14:19.000 So the company is there expending overseas, so it's investing more, 0:14:19.400 --> 0:14:21.480 so the margins could be hit because of that. 0:14:22.200 --> 0:14:24.480 We want to thank both of you, of course, Henry 0:14:24.520 --> 0:14:28.000 ren Isbelli across the macro micro picture of China and 0:14:28.040 --> 0:14:29.800 indeed a little bit of what the US consumer is 0:14:29.800 --> 0:14:31.280 telling us as well. And let's dig in there for 0:14:31.320 --> 0:14:33.360 a moment, because best Buy says that. 0:14:33.520 --> 0:14:36.040 Look, it's reached the low point in tech. 0:14:35.920 --> 0:14:38.840 Demand after a pretty strong second quarter report pointed to 0:14:38.880 --> 0:14:41.200 an optic or maybe at least a bottoming in demand 0:14:41.200 --> 0:14:43.760 for consumer electronics and household of plants. Is let's go 0:14:43.800 --> 0:14:45.880 to our own running casees in Dallas with more. Look, 0:14:46.040 --> 0:14:47.240 it's still pretty ugly in the court. 0:14:47.240 --> 0:14:49.320 Ha just gone. But it seems as though maybe they 0:14:49.320 --> 0:14:50.760 think there's a turning of the tide. 0:14:52.040 --> 0:14:54.360 Yeah, they're What they're saying is that they're starting to 0:14:54.400 --> 0:14:56.840 see light at the end of the tunnel. The backdrop 0:14:56.880 --> 0:14:59.560 of course here is that the sales declines at best 0:14:59.560 --> 0:15:03.040 Buy has been among the biggest, you know, in the 0:15:03.040 --> 0:15:06.600 world of big US retailers. And what they're saying now 0:15:06.680 --> 0:15:08.560 is that, you know, they're starting to get a little 0:15:08.600 --> 0:15:10.880 bit less bad, and they have a line of sight 0:15:11.080 --> 0:15:14.280 to you know, being kind of flat, maybe even growing 0:15:14.320 --> 0:15:15.360 a little bit next year. 0:15:16.440 --> 0:15:18.920 They also said that short refresh cycles and the tech 0:15:18.920 --> 0:15:22.200 are being driven by guess what, Caroline, artificial intelligence our 0:15:22.320 --> 0:15:25.040 thanks to Bloomberg's Brending case. Now coming up here on 0:15:25.040 --> 0:15:26.440 the show, we're going to talk about the state of 0:15:26.480 --> 0:15:29.440 buy now, pay later and speak to a CEO of 0:15:29.480 --> 0:15:32.920 a company that launches in opposition to the movement. 0:15:33.240 --> 0:15:42.920 This is Bloomberg, all right. 0:15:42.960 --> 0:15:45.440 We're checking in on some earnings movies out of China. 0:15:45.480 --> 0:15:48.680 These are the US listed shares of some China tech names. 0:15:48.720 --> 0:15:53.440 PDD top line growth sixty six percent, way outperforming names 0:15:53.440 --> 0:15:55.920 like Ali, Barbera and JD. But it's actually about Timu, 0:15:56.160 --> 0:15:58.400 their US based business that we're kind of interested in. 0:15:58.440 --> 0:16:00.600 It came out at the Super Bowl with an ad. 0:16:00.600 --> 0:16:02.240 We'll dig into that with our team in a second. 0:16:02.360 --> 0:16:05.240 BYD doubled net income in the quarter. We'd already talked 0:16:05.240 --> 0:16:09.280 about how BYD had had a record with both plug 0:16:09.280 --> 0:16:11.680 in hybrids and battery electric cars in the court had 0:16:11.720 --> 0:16:13.760 just gone now showing up on the bottom line in 0:16:13.800 --> 0:16:17.000 terms of profit. Neo a wide and expected quarterly lost, 0:16:17.040 --> 0:16:19.720 a completely different story in the EB space, and then 0:16:19.800 --> 0:16:22.280 jaw Me an interesting one in kind of the smartphone 0:16:22.320 --> 0:16:26.960 handset discussion. Better than expected financial results so much to 0:16:27.040 --> 0:16:28.640 one pick. I think what they all have in common 0:16:29.080 --> 0:16:31.240 is that we're getting some more signals about the Chinese 0:16:31.360 --> 0:16:33.120 economy and the Chinese consumer. 0:16:33.240 --> 0:16:34.240 Joining us from with. 0:16:34.200 --> 0:16:37.760 More Bloombergs Isabella Leie in New York and Henry ren 0:16:38.000 --> 0:16:40.480 Out in London. Henry, let's start with you with some 0:16:40.520 --> 0:16:42.960 of the specific names, and I think we'll start with 0:16:43.000 --> 0:16:46.200 Shaumi first because this was one there was a little 0:16:46.200 --> 0:16:47.600 bit surprising to some investors. 0:16:48.840 --> 0:16:51.760 Yeah, so shall We's revenue fell by about four percent 0:16:51.880 --> 0:16:54.600 during the last quarter, but that decline has been better 0:16:54.640 --> 0:16:58.200 than annas expectations, so that does show that the smart 0:16:58.280 --> 0:17:01.880 form markets plumb might have been past its worst period. 0:17:02.160 --> 0:17:05.560 Remember shall Me sells smartphone devices to all over the world, 0:17:05.600 --> 0:17:08.760 so it's not just in mainland China, but also in India, 0:17:08.920 --> 0:17:12.120 in many emerging market countries, and Latin America some parts 0:17:12.119 --> 0:17:14.560 of Europe as well, so its results does seem to 0:17:14.600 --> 0:17:19.719 be a barometer for the global smartphone market sentiment. And 0:17:19.840 --> 0:17:25.639 remember that show Me is also prioritizing its profitability, and 0:17:25.720 --> 0:17:30.840 it's pushing through its strategy for premium offerings and it 0:17:30.840 --> 0:17:33.520 does seem to be bearing fruit. Its average selling price 0:17:33.560 --> 0:17:36.440 in China has expanded by twenty four percent in the 0:17:36.520 --> 0:17:39.760 last quarter, and the company set on earnings calls so 0:17:39.760 --> 0:17:43.879 that it seeks to expand its strategy to not just 0:17:43.920 --> 0:17:46.760 in China, blosso overseas. It says, we just need to 0:17:46.760 --> 0:17:50.199 focus on these premium products like these votable phones, and 0:17:50.280 --> 0:17:51.800 we do well in this category. 0:17:52.280 --> 0:17:55.320 It's interesting, isn't it that they're saying, yeah, let's go 0:17:55.400 --> 0:17:58.159 for a higher price point, let's actually still be thinking 0:17:58.200 --> 0:18:02.240 about overall profitability of growth when their overall macro economy 0:18:02.280 --> 0:18:04.040 is about it's a pretty painful place. 0:18:04.080 --> 0:18:05.240 We just look at how much. 0:18:05.119 --> 0:18:08.159 They happen to the ante with well, we understand going 0:18:08.200 --> 0:18:10.439 to be cutting mortgage rates for example, to try and 0:18:10.960 --> 0:18:12.879 spur on the Chinese economy. What do any of these 0:18:12.920 --> 0:18:14.000 earnings really tell us about that? 0:18:14.480 --> 0:18:16.440 So I think these two and Henry can go way 0:18:16.440 --> 0:18:19.640 into more detail, especially with PDDs. They're good earnings. As 0:18:19.640 --> 0:18:22.080 you can see, the stocks are really just reacting very 0:18:22.119 --> 0:18:23.040 positively to them. 0:18:23.160 --> 0:18:24.560 But then they come with a new one. 0:18:24.640 --> 0:18:27.080 So for instance, just to touch on lightly, and pdd 0:18:27.520 --> 0:18:31.119 its focus is more lower income consumers, so then that 0:18:31.240 --> 0:18:33.800 might bode well for China's faltering economy. So it kind 0:18:33.800 --> 0:18:36.840 of works reversed in that way, but Chinese economy still 0:18:36.880 --> 0:18:39.600 really isn't doing as well. Nearly every day you see 0:18:39.640 --> 0:18:42.439 one gloomy headline after the other. For instance, today we 0:18:42.480 --> 0:18:46.000 have Country Garden Holdings, it's a big property giant, it's 0:18:46.000 --> 0:18:48.840 making fresh effort to avoid a default. And then we 0:18:48.920 --> 0:18:51.199 have China Great Wall Asset Management. That's a state that 0:18:51.359 --> 0:18:54.000 run manager and it's also suffering a bond slum. So 0:18:54.200 --> 0:18:56.520 one after the other, the ceaseless warning we're just seeing, 0:18:56.600 --> 0:18:57.840 especially from their credit market. 0:18:57.920 --> 0:18:58.800 It's just really. 0:18:58.800 --> 0:19:02.520 Underscoring one thing. The economy is weak, and to your point, 0:19:02.640 --> 0:19:04.760 we also have a lot of development in the regional 0:19:04.760 --> 0:19:08.000 bank space and the mortgage space, so it's not looking 0:19:08.040 --> 0:19:09.800 that good to see it, although I mean it's not 0:19:09.840 --> 0:19:11.720 all gooom and doom, because as we can see, some 0:19:11.720 --> 0:19:15.720 standout companies like PDD in me are doing well. So 0:19:15.760 --> 0:19:19.600 sometimes what's good for one thing can be bad for another. 0:19:20.400 --> 0:19:22.199 You know, Henry, we're showing that big jump on the 0:19:22.240 --> 0:19:25.960 pdd A DR's US listed shares. You know, there's a 0:19:26.040 --> 0:19:29.959 story here about them beating out other domestic Chinese names 0:19:30.119 --> 0:19:31.399 in terms of top line growth. 0:19:31.600 --> 0:19:33.080 But we learned a lot about their. 0:19:33.000 --> 0:19:35.399 US business that we don't discuss PDD a lot on 0:19:35.440 --> 0:19:37.760 this show. Just explain what happened in the quarter. 0:19:39.440 --> 0:19:42.960 Yeah, sure, So the overall results are good, as we 0:19:43.000 --> 0:19:46.400 can see in the market reaction, it's a sharp positive 0:19:46.560 --> 0:19:51.919 reaction from investors, twenty percent of sheer price expansion like 0:19:52.560 --> 0:19:55.439