1 00:00:01,240 --> 00:00:02,120 Speaker 1: We're from Mahard. 2 00:00:02,279 --> 00:00:06,680 Speaker 2: We're Innovation Money and Power Collie in Silicon Vallet NBN. 3 00:00:07,040 --> 00:00:10,400 Speaker 2: This is Bloomberg Technology with Caroline Hyde and. 4 00:00:10,480 --> 00:00:28,200 Speaker 3: Ed Ludlow live from San Francisco. This is Bloomberg Technology 5 00:00:28,200 --> 00:00:31,800 Speaker 3: coming up. A global equity route intensifies with big tech 6 00:00:32,040 --> 00:00:35,800 Speaker 3: at the forefront of the selloff, from Nvidio and TSMC to. 7 00:00:35,840 --> 00:00:37,000 Speaker 4: Robinhood and Microsoft. 8 00:00:37,000 --> 00:00:39,720 Speaker 3: We hone in on the names being hit hardest amid 9 00:00:39,720 --> 00:00:42,760 Speaker 3: the carnage, and we'll have full coverage on Apple as 10 00:00:42,800 --> 00:00:47,240 Speaker 3: Berkshire halfaway slashes its steak in the tech giant. But first, 11 00:00:47,280 --> 00:00:50,720 Speaker 3: this is the picture in financial markets. It is an 12 00:00:50,840 --> 00:00:53,840 Speaker 3: ugly day, but we're off session lows at the index level. 13 00:00:53,880 --> 00:00:56,720 Speaker 3: It started in Asia, it went to the European session. 14 00:00:56,800 --> 00:00:59,360 Speaker 3: Now in the United States, but looking at the S 15 00:00:59,360 --> 00:01:02,160 Speaker 3: and P five five hundred, even a three percent decline 16 00:01:02,360 --> 00:01:05,120 Speaker 3: puts US on track for its biggest drop since late September. 17 00:01:05,400 --> 00:01:08,960 Speaker 3: Chip stocks particularly feeling the anxiety names like in Nvidia, 18 00:01:09,000 --> 00:01:12,720 Speaker 3: but also TSMC's usadrs. You saw the yield on the 19 00:01:12,800 --> 00:01:15,840 Speaker 3: US two year treasury fall below that of the ten year. 20 00:01:15,959 --> 00:01:19,560 Speaker 3: Disinversion happen for the first time since July twenty twenty two. 21 00:01:19,840 --> 00:01:22,959 Speaker 3: The crypto markets are also interesting. Show me Bitcoin and 22 00:01:23,000 --> 00:01:24,480 Speaker 3: look at the severity of declines. 23 00:01:24,680 --> 00:01:25,759 Speaker 4: Remember that in the. 24 00:01:25,680 --> 00:01:28,679 Speaker 3: Crypto space, we're in an asset class that is trading 25 00:01:28,920 --> 00:01:31,000 Speaker 3: twenty four to seven If we can please bring that up, 26 00:01:31,000 --> 00:01:33,600 Speaker 3: because I want to move things forward. There's also particular 27 00:01:33,640 --> 00:01:36,880 Speaker 3: anxiety right in those single names. You look at Bitcoin 28 00:01:37,120 --> 00:01:39,800 Speaker 3: down eight point eight percent in a session twenty four 29 00:01:39,800 --> 00:01:40,759 Speaker 3: to seven hour trading. 30 00:01:41,040 --> 00:01:42,240 Speaker 4: Apple and and Vidia. 31 00:01:42,600 --> 00:01:46,039 Speaker 3: Also off session lows, but in particular names that leading 32 00:01:46,040 --> 00:01:49,480 Speaker 3: declines from a point perspective or a percentage change drag 33 00:01:49,760 --> 00:01:50,560 Speaker 3: at the index level. 34 00:01:50,640 --> 00:01:51,400 Speaker 4: Let's break it all down. 35 00:01:51,440 --> 00:01:54,360 Speaker 3: We got Bloomberg crossset report at Isabel Lee and also 36 00:01:54,440 --> 00:01:58,000 Speaker 3: our international Economics and Policy correspondent Michael McKee as well. 37 00:01:58,040 --> 00:02:00,440 Speaker 4: I start with you. I think this started with economic 38 00:02:00,560 --> 00:02:01,480 Speaker 4: data on Friday. 39 00:02:01,880 --> 00:02:03,920 Speaker 3: Then you had new slow through the weekend, and now 40 00:02:03,960 --> 00:02:06,160 Speaker 3: here we are through an Asia, Europe and the US 41 00:02:06,200 --> 00:02:07,760 Speaker 3: session where things don't look very good. 42 00:02:08,160 --> 00:02:10,679 Speaker 5: Exactly. It's sart. On a Friday, we had week jobs data, 43 00:02:10,720 --> 00:02:13,400 Speaker 5: but it wasn't really horrible, so we saw a stock 44 00:02:13,480 --> 00:02:15,919 Speaker 5: market under pressure. But over the weekend I was checking 45 00:02:15,919 --> 00:02:17,720 Speaker 5: my phone because I was trying to figure out what 46 00:02:17,880 --> 00:02:19,639 Speaker 5: is going wrong. And today we have New York to 47 00:02:19,680 --> 00:02:22,240 Speaker 5: London to Tokyo equities are really getting pummeled s and 48 00:02:22,280 --> 00:02:24,600 Speaker 5: P five hundred is on track for its worst routes 49 00:02:24,639 --> 00:02:26,920 Speaker 5: in twenty twenty two, with ninety five percent of the 50 00:02:26,960 --> 00:02:29,560 Speaker 5: stocks there in the red. And I read a note 51 00:02:29,560 --> 00:02:32,080 Speaker 5: this morning that's saying, instead of asking what's going wrong, 52 00:02:32,240 --> 00:02:34,360 Speaker 5: it's better to ask what didn't. We have a slew 53 00:02:34,400 --> 00:02:36,720 Speaker 5: of reasons for that. We have, for instance, a great 54 00:02:36,800 --> 00:02:39,320 Speaker 5: hip from Japan, a perceived failure by the said to 55 00:02:39,360 --> 00:02:42,440 Speaker 5: cut rates. We have unemployment US employment figures. We have 56 00:02:42,520 --> 00:02:45,040 Speaker 5: Warren Buffett selling Apple shares, and we had a Bloomberg 57 00:02:45,080 --> 00:02:48,240 Speaker 5: storytelling traders Okay, maybe it's really not some cost for 58 00:02:48,240 --> 00:02:50,680 Speaker 5: a panic, but of course we have some traders panicking. 59 00:02:50,760 --> 00:02:52,960 Speaker 5: And last, but not the least, is the unwiding and 60 00:02:53,000 --> 00:02:56,120 Speaker 5: the highly popular trade which is called popular yen, called 61 00:02:56,320 --> 00:02:58,760 Speaker 5: carry trade. We're also seeing pressure in that. So that's 62 00:02:58,800 --> 00:03:01,200 Speaker 5: a trade where you borrow yen investment in their high 63 00:03:01,200 --> 00:03:03,960 Speaker 5: flying currencies. But really it's just really a slew of reasons, 64 00:03:03,960 --> 00:03:05,000 Speaker 5: and I don't know where to start. 65 00:03:06,160 --> 00:03:10,320 Speaker 3: Mike McKee, our policy and economics corresponding the Fed, or 66 00:03:10,360 --> 00:03:13,280 Speaker 3: at least the market's expectations for the FED, are a 67 00:03:13,320 --> 00:03:15,799 Speaker 3: big part of this story. The swaps market at one 68 00:03:15,880 --> 00:03:20,200 Speaker 3: point pricing in a sixty percent six zero percent chance 69 00:03:20,240 --> 00:03:22,760 Speaker 3: of an emergency rate cut this week. 70 00:03:22,919 --> 00:03:23,760 Speaker 4: Explain that to me. 71 00:03:24,760 --> 00:03:27,640 Speaker 6: I can't really explain it to you except for panic. 72 00:03:28,240 --> 00:03:31,280 Speaker 6: It was in Asian markets where the volume is lower 73 00:03:31,320 --> 00:03:35,360 Speaker 6: and people don't understand the FED. Perhaps as well. It's 74 00:03:35,520 --> 00:03:38,360 Speaker 6: really come back now at the moment there's one week 75 00:03:38,400 --> 00:03:41,760 Speaker 6: swaps are pricing in a five basis point move, not 76 00:03:41,880 --> 00:03:46,200 Speaker 6: even a real rate cut. So at this point you 77 00:03:46,240 --> 00:03:48,720 Speaker 6: can't really say that people think the FED is going 78 00:03:48,760 --> 00:03:51,040 Speaker 6: to be getting involved. There's more of a wish being 79 00:03:51,040 --> 00:03:55,119 Speaker 6: the father to the man situation here in the markets, 80 00:03:55,240 --> 00:03:58,000 Speaker 6: always looking to the FED when something goes wrong. 81 00:03:58,880 --> 00:04:01,320 Speaker 7: But there's some right with. 82 00:04:01,400 --> 00:04:04,800 Speaker 6: What's happened today from an economic standpoint, in the sense 83 00:04:04,840 --> 00:04:09,480 Speaker 6: that the ISM services number was good, and with yields falling, 84 00:04:09,600 --> 00:04:14,440 Speaker 6: we're seeing mortgage rates falling. We're also seeing gasoline prices falling, 85 00:04:14,560 --> 00:04:17,000 Speaker 6: and all those things could be stimulative to the economy. 86 00:04:17,040 --> 00:04:19,600 Speaker 6: So the Fed's could to sit back and say you're 87 00:04:19,600 --> 00:04:22,479 Speaker 6: losing money in your equity trade, because maybe you did 88 00:04:22,520 --> 00:04:25,640 Speaker 6: the wrong trade, but it's not something we can fix. 89 00:04:27,000 --> 00:04:27,440 Speaker 4: Is value. 90 00:04:27,480 --> 00:04:29,880 Speaker 3: You sort of masterfully gave this global picture of what 91 00:04:29,960 --> 00:04:33,240 Speaker 3: happened in equities markets, tying in the economic data. One 92 00:04:33,240 --> 00:04:35,040 Speaker 3: of the questions I've been getting this morning on social 93 00:04:35,080 --> 00:04:36,359 Speaker 3: media has been about Bitcoin. 94 00:04:36,640 --> 00:04:37,719 Speaker 4: Loads of people saying, hold on. 95 00:04:37,800 --> 00:04:40,280 Speaker 3: You kept telling us that bitcoin would behave like a 96 00:04:40,320 --> 00:04:44,520 Speaker 3: haven asset in an environment like this. Bitcoin seems very 97 00:04:44,640 --> 00:04:48,000 Speaker 3: much tied to the FED narrative and economic data as well, 98 00:04:48,040 --> 00:04:48,720 Speaker 3: But that's the same. 99 00:04:48,760 --> 00:04:50,960 Speaker 5: Bitcoin hasn't been really a haven. In fact, it's been 100 00:04:50,960 --> 00:04:53,360 Speaker 5: more of a barometer of risk sentiment. And now we 101 00:04:53,400 --> 00:04:56,760 Speaker 5: see Bitcoin and Easier and all the other art coins 102 00:04:56,800 --> 00:04:59,479 Speaker 5: really edging lower in from me, what's interesting is the 103 00:04:59,520 --> 00:05:02,400 Speaker 5: Bitcoin ETFs and the ether ETF because we've never really 104 00:05:02,440 --> 00:05:05,800 Speaker 5: seen this economic climate with this product. I mean, a 105 00:05:05,839 --> 00:05:07,920 Speaker 5: lot of people are comparing it to the Great Financial 106 00:05:07,960 --> 00:05:10,960 Speaker 5: Crisis or other eras, but then we didn't have bitcoin 107 00:05:11,000 --> 00:05:13,200 Speaker 5: ETFs then, so we're really going to keep track of 108 00:05:13,279 --> 00:05:15,720 Speaker 5: the flows. I have a story from Across Asset team 109 00:05:15,760 --> 00:05:18,560 Speaker 5: about how billions were still poured into tech ETFs, and 110 00:05:18,600 --> 00:05:20,839 Speaker 5: of course now we see that they're under some pain, 111 00:05:21,000 --> 00:05:22,640 Speaker 5: so it's also going to be interesting to see how 112 00:05:22,680 --> 00:05:27,320 Speaker 5: bitcoin ets and ether ETFs trade in this really unfortunate 113 00:05:27,400 --> 00:05:28,640 Speaker 5: or fortunate depending on who you ask. 114 00:05:28,640 --> 00:05:30,560 Speaker 4: Pena'men on Mike. 115 00:05:30,640 --> 00:05:33,400 Speaker 3: We always say on this program Bloomberg Technology that higher 116 00:05:33,480 --> 00:05:36,159 Speaker 3: rates discount the present values of future cash flows. So, 117 00:05:36,200 --> 00:05:39,159 Speaker 3: in other words, technology investors track what the FED will 118 00:05:39,160 --> 00:05:42,480 Speaker 3: it won't do. I was listening to Bloomberg Surveillance earlier, 119 00:05:42,520 --> 00:05:47,839 Speaker 3: and they're talking about this distinction between the fed's lesser 120 00:05:47,880 --> 00:05:52,160 Speaker 3: focus on restrictive policy and a future moved to accommodative policy. 121 00:05:52,839 --> 00:05:55,440 Speaker 3: What happens next. I know that's really impossible for you 122 00:05:55,480 --> 00:05:56,400 Speaker 3: to answer, but go ahead. 123 00:05:57,360 --> 00:05:59,680 Speaker 6: Yeah, that is a sort of impossible set up there, 124 00:05:59,720 --> 00:06:01,520 Speaker 6: because the FED is going to want to wait as 125 00:06:01,520 --> 00:06:04,160 Speaker 6: long as possible. They don't want to do anything emergency. 126 00:06:04,200 --> 00:06:06,720 Speaker 6: They don't want to react to stock market ups and downs. 127 00:06:06,920 --> 00:06:08,920 Speaker 6: As long as you can trade, they don't care which 128 00:06:08,960 --> 00:06:12,839 Speaker 6: way the trade goes. But the data have to show 129 00:06:12,880 --> 00:06:17,159 Speaker 6: the Fed that there is a significant shift in the 130 00:06:17,200 --> 00:06:20,400 Speaker 6: economic outlook before they would consider doing something like a 131 00:06:20,440 --> 00:06:25,080 Speaker 6: fifty basis point cutter moving much more closer to accommodative. 132 00:06:25,640 --> 00:06:29,160 Speaker 6: They're still on track for twenty five in September because 133 00:06:29,200 --> 00:06:31,360 Speaker 6: they think they need to normalize, they need. 134 00:06:31,240 --> 00:06:34,040 Speaker 4: To get back to a closer to neutral rate. 135 00:06:34,520 --> 00:06:36,760 Speaker 6: And I don't think that's going to change, at least 136 00:06:36,800 --> 00:06:39,719 Speaker 6: in their minds unless we see some data start to 137 00:06:39,720 --> 00:06:42,120 Speaker 6: come in really badly. And the first data we had 138 00:06:42,160 --> 00:06:45,760 Speaker 6: out today, the ISM services numbers come in better than 139 00:06:45,800 --> 00:06:49,599 Speaker 6: expected across the board, So their caution is going to 140 00:06:49,640 --> 00:06:53,039 Speaker 6: be dependent on the data, and the data at this 141 00:06:53,200 --> 00:06:55,160 Speaker 6: point are not telling them they need to do anything. 142 00:06:56,480 --> 00:06:58,960 Speaker 3: Bloom Bags, Mike McKee and Isabel Lee, the best at 143 00:06:58,960 --> 00:07:01,440 Speaker 3: bloom Bags Television, New York, thank you so much. Let's 144 00:07:01,480 --> 00:07:04,240 Speaker 3: get more on the markets and bring in Angelocal cafas 145 00:07:04,279 --> 00:07:07,960 Speaker 3: senior strategists at Edward Jones. And I'm always one for 146 00:07:08,000 --> 00:07:11,040 Speaker 3: a data point. I'm thinking specifically about the Mag seven 147 00:07:11,440 --> 00:07:13,440 Speaker 3: and we have this index or gauge at the Mag 148 00:07:13,480 --> 00:07:16,640 Speaker 3: seven at one point in the session, it's biggest. 149 00:07:16,320 --> 00:07:19,400 Speaker 4: Drop on record. Take everything that our. 150 00:07:19,320 --> 00:07:22,160 Speaker 3: Team have just just said and apply it to what's 151 00:07:22,200 --> 00:07:24,320 Speaker 3: happening with the biggest technology names. 152 00:07:25,560 --> 00:07:25,800 Speaker 7: Sure. 153 00:07:25,840 --> 00:07:29,600 Speaker 8: Hello, Clearly volatility didn't take the summer off. We saw 154 00:07:29,720 --> 00:07:33,480 Speaker 8: the markets were led by the Magnificent seven and on 155 00:07:33,600 --> 00:07:36,560 Speaker 8: the way lower, it's been the Magnificent seven that have 156 00:07:36,920 --> 00:07:40,640 Speaker 8: been really the weak spot. I think the issue has 157 00:07:40,680 --> 00:07:46,280 Speaker 8: been that of expectations. These companies continue to deliver outsize 158 00:07:46,360 --> 00:07:50,000 Speaker 8: earnings growth, but the bar was very high heading into 159 00:07:50,000 --> 00:07:54,440 Speaker 8: this quorder, and as a result we did see some disappointments. 160 00:07:55,320 --> 00:07:57,880 Speaker 8: These were the names that have been trading at the 161 00:07:57,960 --> 00:08:02,520 Speaker 8: highest pe ratios. So as we talking about the yen charactery, 162 00:08:02,920 --> 00:08:06,160 Speaker 8: heads funds, many heads fans borrowing in yen to invest 163 00:08:06,200 --> 00:08:09,360 Speaker 8: in other assets, and now with the yen appreciation, they're 164 00:08:09,400 --> 00:08:12,080 Speaker 8: selling some of those assets, and no doubt some of 165 00:08:12,080 --> 00:08:15,120 Speaker 8: these are the Magnificent seven stocks. So we have a 166 00:08:15,120 --> 00:08:20,560 Speaker 8: combination of high bar, we have earnings broadening to other sectors. 167 00:08:20,560 --> 00:08:24,160 Speaker 8: For example, this earning season, we have seen the biggest 168 00:08:24,160 --> 00:08:27,680 Speaker 8: earning surprises coming from defensive sectors and also some of 169 00:08:27,680 --> 00:08:30,320 Speaker 8: the cyclical ones and not the growth sectors that we 170 00:08:30,400 --> 00:08:33,240 Speaker 8: have been used to over the last couple of earning seasons. 171 00:08:34,400 --> 00:08:36,959 Speaker 3: But at the same time, the fundamentals have not seen 172 00:08:37,040 --> 00:08:39,320 Speaker 3: so let exactly, so let me jump in. 173 00:08:39,360 --> 00:08:41,720 Speaker 4: The fundamentals have not changed, is what you just said. 174 00:08:42,080 --> 00:08:44,400 Speaker 3: We made a big deal of the gain in the 175 00:08:44,480 --> 00:08:46,200 Speaker 3: S and P five hundred in the first half of 176 00:08:46,240 --> 00:08:49,800 Speaker 3: this year, fourteen percent or so, largely coming from the 177 00:08:49,800 --> 00:08:52,640 Speaker 3: Magnificent seven and in years where the S and P 178 00:08:52,760 --> 00:08:55,120 Speaker 3: five hundred is gained double digits in one AH, it 179 00:08:55,240 --> 00:08:57,760 Speaker 3: usually goes on to perform in two AH. How much 180 00:08:57,760 --> 00:09:01,920 Speaker 3: of the departure is this session for that historic trend. 181 00:09:03,000 --> 00:09:06,760 Speaker 8: Not that this is an abrupt and uncomfortable pullback. And 182 00:09:06,800 --> 00:09:09,880 Speaker 8: I think there's two things going on. One is the 183 00:09:09,920 --> 00:09:13,600 Speaker 8: technical picture, which if it is an over reaction that 184 00:09:13,640 --> 00:09:16,640 Speaker 8: potentially move lower presents an opportunity for the remainder of 185 00:09:16,640 --> 00:09:18,520 Speaker 8: the year. And then the second part we need to 186 00:09:18,559 --> 00:09:22,640 Speaker 8: answer as investors is is there something fundamentally broken? 187 00:09:23,080 --> 00:09:25,000 Speaker 7: Meaning are we heading towards the recession? 188 00:09:25,040 --> 00:09:27,199 Speaker 8: Because part of a lot of that narrative has been 189 00:09:27,240 --> 00:09:31,400 Speaker 8: around the growth scare, and I think for our clients' perspective, 190 00:09:31,440 --> 00:09:34,880 Speaker 8: we need to first answer the latter. The US economy 191 00:09:34,880 --> 00:09:37,720 Speaker 8: still continues to grow, let's call it trend or maybe 192 00:09:37,720 --> 00:09:40,800 Speaker 8: slightly below trend. Looking at the GDP now estimate for 193 00:09:40,960 --> 00:09:44,240 Speaker 8: Q three is still slightly north of two percent. We 194 00:09:44,440 --> 00:09:49,480 Speaker 8: just got the ism services PMI that was well into 195 00:09:49,600 --> 00:09:54,800 Speaker 8: expansion territory, and the em employment component very importantly provided 196 00:09:54,880 --> 00:09:59,000 Speaker 8: some reason for optimism given the Friday jobs report that 197 00:09:59,080 --> 00:10:03,319 Speaker 8: we get. We do not think that the US economy 198 00:10:03,520 --> 00:10:06,680 Speaker 8: in a week's time is going to fall off bed 199 00:10:07,320 --> 00:10:13,160 Speaker 8: We have seen still rising earnings, corporate profits, consumers, and 200 00:10:13,320 --> 00:10:16,960 Speaker 8: corporate balances remain healthy. So I think it fits into 201 00:10:17,000 --> 00:10:20,840 Speaker 8: the narrative of broadening in market leadership away necessarily from 202 00:10:20,920 --> 00:10:23,560 Speaker 8: the overall potentially over extended peck. 203 00:10:24,400 --> 00:10:27,320 Speaker 7: So we are still posed for the remainder of the year. 204 00:10:27,520 --> 00:10:30,760 Speaker 8: But we don't think that the Magnificent seven are going 205 00:10:30,800 --> 00:10:34,600 Speaker 8: to be once again the ones that everybody gravitates towards. 206 00:10:34,800 --> 00:10:35,160 Speaker 4: Angelo. 207 00:10:35,559 --> 00:10:37,960 Speaker 3: Chief of what among what you've just outlined is in video, 208 00:10:38,400 --> 00:10:40,439 Speaker 3: we are way off session loads and video is down 209 00:10:40,520 --> 00:10:43,000 Speaker 3: six percent, but one point in the session was down 210 00:10:43,120 --> 00:10:46,240 Speaker 3: fifteen percent, which for a company that size is a 211 00:10:46,280 --> 00:10:51,360 Speaker 3: big drop. There was a report from the Information that 212 00:10:51,480 --> 00:10:55,319 Speaker 3: said Blackwell, the next generation AI accelerator with face delays 213 00:10:55,360 --> 00:10:56,319 Speaker 3: due to a design issue. 214 00:10:56,360 --> 00:10:57,040 Speaker 4: Over the weekend. 215 00:10:57,440 --> 00:10:59,840 Speaker 3: In video got back to us and said that actually 216 00:11:00,920 --> 00:11:04,480 Speaker 3: Hopper demand is strong, Blackwell sampling is started. They don't 217 00:11:04,480 --> 00:11:07,719 Speaker 3: comment on rumors, et cetera. You just said that we'll 218 00:11:07,800 --> 00:11:10,960 Speaker 3: move away from sort of the concentration of leadership, but 219 00:11:11,040 --> 00:11:13,040 Speaker 3: we have to wait until the twenty eighth for this 220 00:11:13,160 --> 00:11:16,959 Speaker 3: month to get in video earnings. That's quite a long 221 00:11:17,000 --> 00:11:19,000 Speaker 3: period of time in which the markets could have some 222 00:11:19,080 --> 00:11:22,040 Speaker 3: anxiety for what has been a leader in the direction 223 00:11:22,120 --> 00:11:22,520 Speaker 3: of travel. 224 00:11:22,520 --> 00:11:23,200 Speaker 4: What do you make of that? 225 00:11:24,760 --> 00:11:27,480 Speaker 8: Yeah, the Nvida is the last of Magnificent seven to 226 00:11:27,480 --> 00:11:29,960 Speaker 8: report earnings, and no doubt, it's not that everybody the 227 00:11:29,960 --> 00:11:34,040 Speaker 8: whole world is watching the theme so far with everybody's 228 00:11:34,080 --> 00:11:36,800 Speaker 8: excited about the artificial intelligence, but there has been some 229 00:11:36,960 --> 00:11:40,400 Speaker 8: skepticism over the last couple of weeks and investors are 230 00:11:40,440 --> 00:11:44,920 Speaker 8: getting increasingly impatient to see the heavy spending of AI 231 00:11:45,080 --> 00:11:48,840 Speaker 8: translate into eternal profits. But what we have been hearing 232 00:11:49,040 --> 00:11:52,560 Speaker 8: from the remainder Magnificent six of the seven that they 233 00:11:52,600 --> 00:11:55,200 Speaker 8: have been spending, so that should continue to be a 234 00:11:55,320 --> 00:11:59,920 Speaker 8: pail wind for Nvidia. And I think what we're all 235 00:12:00,120 --> 00:12:03,200 Speaker 8: been with here is again the high bar of expectations 236 00:12:03,360 --> 00:12:05,040 Speaker 8: when you have a stock that's been up so much 237 00:12:05,040 --> 00:12:06,959 Speaker 8: over the last couple of years and so this year, 238 00:12:07,000 --> 00:12:12,440 Speaker 8: even with the recent pullback, Naturally that creates tension points 239 00:12:12,600 --> 00:12:15,640 Speaker 8: whenever news like we have been getting over the last 240 00:12:15,679 --> 00:12:18,440 Speaker 8: couple of weeks emergence. But at the same time, again 241 00:12:18,480 --> 00:12:22,080 Speaker 8: we still continue to be positive around artificial intelligence, not 242 00:12:22,160 --> 00:12:24,400 Speaker 8: only for this year, but for the next five to 243 00:12:24,480 --> 00:12:25,319 Speaker 8: ten years. 244 00:12:25,600 --> 00:12:28,439 Speaker 7: And I think that that is important for investors to remember. 245 00:12:29,679 --> 00:12:33,680 Speaker 3: Angel Local Cafe senior strategist Edward Jones, thank you. We 246 00:12:33,840 --> 00:12:36,880 Speaker 3: said that this all started in the Asian session. The 247 00:12:36,960 --> 00:12:41,080 Speaker 3: taie X saw its worst day in fifty seven years 248 00:12:41,320 --> 00:12:45,199 Speaker 3: after TSMC shares plunged nine point eight percent, a record 249 00:12:45,320 --> 00:12:49,040 Speaker 3: daily decline for the AI chip maker. TISMC accounts for 250 00:12:49,120 --> 00:12:51,840 Speaker 3: more than thirty percent of the taie X, which closed 251 00:12:52,320 --> 00:12:54,880 Speaker 3: down eight point four percent. It's worth sell off since 252 00:12:54,960 --> 00:12:58,480 Speaker 3: nineteen sixty seven in the seas In Japan and South 253 00:12:58,559 --> 00:13:03,880 Speaker 3: Korea also significantly in their Monday sessions. Coming up here 254 00:13:03,920 --> 00:13:06,040 Speaker 3: on Bloomberg Technology, we're going to hone in on Apple 255 00:13:06,160 --> 00:13:10,440 Speaker 3: as shares plunge and Berkshire slashes its steak in the 256 00:13:10,480 --> 00:13:13,720 Speaker 3: iPhone maker. The stock down three point three percent, again 257 00:13:14,040 --> 00:13:16,680 Speaker 3: of session lows, but a significant decline. 258 00:13:16,800 --> 00:13:18,000 Speaker 4: This is Bloomberg Technology. 259 00:13:27,080 --> 00:13:29,000 Speaker 9: I believe it to buy an opportunity for the high 260 00:13:29,120 --> 00:13:32,080 Speaker 9: quality of large cab memes that we like. 261 00:13:32,160 --> 00:13:34,560 Speaker 7: To buy in these types of periods. 262 00:13:36,920 --> 00:13:39,359 Speaker 3: Dan I was of Webbush earlier saying it's an opportunity 263 00:13:39,440 --> 00:13:41,440 Speaker 3: to buy the dip in big tech. I know he's 264 00:13:41,480 --> 00:13:43,880 Speaker 3: not alone in calling for that this morning. Let's also 265 00:13:43,920 --> 00:13:45,680 Speaker 3: take a look at shares of Apple. We are way 266 00:13:45,720 --> 00:13:48,400 Speaker 3: off session lows, but at one point in the session 267 00:13:48,440 --> 00:13:52,079 Speaker 3: we're down more than ten percent, which was a worrying 268 00:13:52,120 --> 00:13:55,600 Speaker 3: way to start the US session on a Monday. Let's 269 00:13:55,679 --> 00:13:58,960 Speaker 3: bring in Bloomberg's Mark German. One of the catalysts or 270 00:13:59,000 --> 00:14:03,080 Speaker 3: newsflow items of the weekend was Berkshire halfway slashing at 271 00:14:03,160 --> 00:14:06,720 Speaker 3: steak in Apple, largely to generate cash. But there's his 272 00:14:06,760 --> 00:14:09,200 Speaker 3: story on the Bloombag about how Apple investors have been 273 00:14:09,280 --> 00:14:13,000 Speaker 3: urged to keep calm in spite of what happened elsewhere. 274 00:14:13,040 --> 00:14:15,960 Speaker 3: We just concerned about growth the Apple side of this story. 275 00:14:15,960 --> 00:14:19,480 Speaker 4: Please, when you have declines. 276 00:14:19,000 --> 00:14:22,640 Speaker 9: Of this magnitude, you mentioned the ten percent decline in 277 00:14:22,680 --> 00:14:25,040 Speaker 9: the early hours of trading. Now it sounds to about 278 00:14:25,040 --> 00:14:29,280 Speaker 9: a three percent decline. These are more macro related issues 279 00:14:29,320 --> 00:14:32,800 Speaker 9: when you have those big swings in that volatility. Right, 280 00:14:33,080 --> 00:14:37,120 Speaker 9: There's nothing that Apple necessarily did. There's no news item 281 00:14:37,200 --> 00:14:41,680 Speaker 9: related to Apple's actions a product its earnings. 282 00:14:41,240 --> 00:14:43,320 Speaker 1: From last week. A lot of this has to do 283 00:14:43,400 --> 00:14:44,160 Speaker 1: with macro. 284 00:14:44,000 --> 00:14:47,200 Speaker 9: Concerns, the situation currently going on in the Middle East, 285 00:14:47,480 --> 00:14:51,120 Speaker 9: the uncertainty surrounding the election, people wanting to hold onto 286 00:14:51,160 --> 00:14:53,200 Speaker 9: their cash. But of course, as you mentioned the Warren 287 00:14:53,240 --> 00:14:57,600 Speaker 9: Buffett Berkshire Hathaway news from over the weekend compared to 288 00:14:57,720 --> 00:15:01,160 Speaker 9: the beginning of twenty twenty four, as steak in Apple 289 00:15:01,360 --> 00:15:02,320 Speaker 9: is now half. 290 00:15:02,200 --> 00:15:02,960 Speaker 7: Of what it was. 291 00:15:03,320 --> 00:15:06,600 Speaker 9: He still hasn't about an eighty four point two billion 292 00:15:06,640 --> 00:15:09,520 Speaker 9: dollar steak, So a huge steak remaining in Apple. But 293 00:15:09,560 --> 00:15:13,040 Speaker 9: when you get those headlines about Warren Buffett right telling 294 00:15:13,120 --> 00:15:15,720 Speaker 9: that much Apple over the course of the last six 295 00:15:15,760 --> 00:15:19,280 Speaker 9: to eight months, that could be concerning combined with some 296 00:15:19,320 --> 00:15:24,760 Speaker 9: of the other concerns greater China, artificial intelligence growth, the 297 00:15:24,800 --> 00:15:29,080 Speaker 9: performance of the iPhone moving forward, their guidance certainly all 298 00:15:29,080 --> 00:15:31,320 Speaker 9: of that combined in addition to the macro factors. 299 00:15:32,720 --> 00:15:35,680 Speaker 3: Bloomberg News reflected going into Apple's earnings that some of 300 00:15:35,720 --> 00:15:38,080 Speaker 3: the run up in the stock over recent weeks and 301 00:15:38,160 --> 00:15:42,120 Speaker 3: months had been really about faith that Apple Intelligence would deliver. 302 00:15:42,280 --> 00:15:45,880 Speaker 3: You've written over the weekend after earnings that actually, with 303 00:15:46,000 --> 00:15:48,080 Speaker 3: Apple Intelligence, there's a long way to go. 304 00:15:48,480 --> 00:15:51,120 Speaker 4: What were your arguments, Yeah. 305 00:15:50,920 --> 00:15:54,640 Speaker 9: Apple Intelligence obviously is going to be a big initiative 306 00:15:54,640 --> 00:15:55,720 Speaker 9: for Apple moving forward. 307 00:15:55,800 --> 00:15:58,680 Speaker 1: They're marketing this heavily on the earnings call. 308 00:15:58,760 --> 00:16:01,320 Speaker 9: I didn't get an official count, but I'm sure Tim 309 00:16:01,320 --> 00:16:04,240 Speaker 9: Cook mentioned it at least fifteen to twenty times. Nearly 310 00:16:04,280 --> 00:16:06,600 Speaker 9: every analyst asked about it. That has been a big 311 00:16:06,640 --> 00:16:09,760 Speaker 9: catalyst for stock growth. But I don't think the initial 312 00:16:09,760 --> 00:16:12,280 Speaker 9: feature set or even the future set in totality is 313 00:16:12,320 --> 00:16:15,360 Speaker 9: something that's going to drive iPhone upgrades for this cycle. 314 00:16:15,560 --> 00:16:18,000 Speaker 9: I think it's something that's probably going to drive upgrades 315 00:16:18,320 --> 00:16:20,600 Speaker 9: in future cycles. Now, I want to be clear, I 316 00:16:20,640 --> 00:16:24,440 Speaker 9: don't think there's a connection between realizations about the performance 317 00:16:24,440 --> 00:16:27,920 Speaker 9: of artificial intelligence and this Apple stock decline. If you 318 00:16:27,960 --> 00:16:29,960 Speaker 9: look at the rest of the market, they're in decline 319 00:16:30,000 --> 00:16:32,520 Speaker 9: as well, So I think it's largely about more macro 320 00:16:32,640 --> 00:16:34,800 Speaker 9: factors than anything very specific. 321 00:16:34,800 --> 00:16:39,040 Speaker 3: In particular Bloomberg's Mark German on All Things Apple, Thank you. 322 00:16:47,160 --> 00:16:48,720 Speaker 4: Time for talking tech and first Up. 323 00:16:48,800 --> 00:16:52,480 Speaker 3: TikTok is being sued by the US government for allegedly 324 00:16:52,520 --> 00:16:55,880 Speaker 3: collecting data on children. In a suit filed on Friday, 325 00:16:56,080 --> 00:16:58,840 Speaker 3: the Justice Department claims the app has allowed millions of 326 00:16:58,920 --> 00:17:02,600 Speaker 3: kids under the age of thirteen to create accounts without 327 00:17:02,640 --> 00:17:06,159 Speaker 3: their parents' knowledge or consent in violation of an online 328 00:17:06,200 --> 00:17:10,080 Speaker 3: Privacy Act. TikTok previously reached a settlement in twenty nineteen 329 00:17:10,400 --> 00:17:14,320 Speaker 3: with the FTC on concerns related to child privacy. 330 00:17:14,359 --> 00:17:14,719 Speaker 4: Plus. 331 00:17:14,920 --> 00:17:18,240 Speaker 3: Online trading platforms from robin Hood to Fidelity and Charles 332 00:17:18,320 --> 00:17:22,080 Speaker 3: Schwab have been suffering outages amid a surge in volume 333 00:17:22,280 --> 00:17:25,480 Speaker 3: during this market sell off. More than fourteen thousand users 334 00:17:25,720 --> 00:17:28,960 Speaker 3: reported an outage at Schwab at nine to fifty am 335 00:17:29,000 --> 00:17:31,440 Speaker 3: in New York. That's according to the website down Detector. 336 00:17:31,760 --> 00:17:34,439 Speaker 3: The firm did not immediately respond to requests for comment, 337 00:17:34,600 --> 00:17:37,399 Speaker 3: but a company account posted on the social site x 338 00:17:37,640 --> 00:17:42,280 Speaker 3: that some clients may have difficulty logging to Schwab platforms 339 00:17:42,480 --> 00:17:44,760 Speaker 3: and shares of in Video falling today amid the tech 340 00:17:44,800 --> 00:17:47,800 Speaker 3: sell off. According to reports, the company's upcoming AI chips 341 00:17:47,840 --> 00:17:51,040 Speaker 3: will be delayed by three months or more due to 342 00:17:51,080 --> 00:17:54,320 Speaker 3: a design flow and in Video spokesperson responded to Bloomberg 343 00:17:54,359 --> 00:17:57,479 Speaker 3: over the weekend, saying, as we stated before, Hopper demand 344 00:17:57,560 --> 00:18:01,879 Speaker 3: is very strong. Broad Blackwell's sum has started and productions 345 00:18:01,920 --> 00:18:04,359 Speaker 3: on track to ramp in two h Beyond that, we 346 00:18:04,440 --> 00:18:07,600 Speaker 3: don't comment on rumors all right more on AI. Groc 347 00:18:08,000 --> 00:18:10,399 Speaker 3: has raised six hundred and forty million dollars in a 348 00:18:10,440 --> 00:18:14,520 Speaker 3: Series D funding round, bringing evaluation to two point eight 349 00:18:14,520 --> 00:18:18,920 Speaker 3: billion dollars. The startup focuses on building fast AI inference 350 00:18:19,200 --> 00:18:23,679 Speaker 3: technology to supply increasing demand delights, bringing Jonathan Ross, founder 351 00:18:23,920 --> 00:18:24,720 Speaker 3: and CEO. 352 00:18:24,520 --> 00:18:25,680 Speaker 4: Of GROCK for more. 353 00:18:25,920 --> 00:18:28,040 Speaker 3: Just last week, we were speaking to Lisa sou the 354 00:18:28,200 --> 00:18:32,560 Speaker 3: MDCO about the move from training to influence. It's a 355 00:18:32,600 --> 00:18:35,359 Speaker 3: sizable chunk of change you managed to raise. I guess 356 00:18:35,400 --> 00:18:37,560 Speaker 3: the best starting place what we use the cash for. 357 00:18:38,840 --> 00:18:40,359 Speaker 10: So the first thing is that we're going to build 358 00:18:40,359 --> 00:18:43,400 Speaker 10: out about one hundred and eight thousand of our LPU 359 00:18:43,480 --> 00:18:47,080 Speaker 10: chips or language processing units. To put that in perspective, 360 00:18:47,400 --> 00:18:50,680 Speaker 10: you mentioned Hopper the Nvidia GPU. Last year they shipped 361 00:18:50,680 --> 00:18:52,960 Speaker 10: about five hundred thousand, so this would be about twenty 362 00:18:52,960 --> 00:18:57,080 Speaker 10: percent of what they shipped last year. Secondly, we intend 363 00:18:57,119 --> 00:19:00,800 Speaker 10: to hire significantly. We're building out a lot of features. 364 00:19:00,800 --> 00:19:03,439 Speaker 10: We actually offer a token as a service business where 365 00:19:03,600 --> 00:19:05,960 Speaker 10: people can just use our hardware without having to buy it. 366 00:19:07,240 --> 00:19:10,760 Speaker 10: And then we are looking at some acquisitions going forward 367 00:19:10,760 --> 00:19:12,560 Speaker 10: as well. 368 00:19:12,800 --> 00:19:17,720 Speaker 3: Strategically, when did GROC sort of say okay, inference needs 369 00:19:17,720 --> 00:19:20,320 Speaker 3: to be our focus and how is it helping you 370 00:19:20,359 --> 00:19:23,320 Speaker 3: get sort of get ahead that There's lots been discussed 371 00:19:23,320 --> 00:19:26,760 Speaker 3: on this program about the many startups and companies working 372 00:19:27,119 --> 00:19:29,840 Speaker 3: on training large language models from many hundreds of billions 373 00:19:29,840 --> 00:19:34,160 Speaker 3: of parameters to smaller models. You have a more narrow focus, Jonathan. 374 00:19:35,160 --> 00:19:35,360 Speaker 7: Yeah. 375 00:19:35,400 --> 00:19:38,080 Speaker 10: So Grok from the beginning is focused on inference. And 376 00:19:38,359 --> 00:19:41,400 Speaker 10: the reason is training at this point is a well 377 00:19:41,440 --> 00:19:43,320 Speaker 10: solved problem and we always knew that it would be 378 00:19:43,440 --> 00:19:46,560 Speaker 10: my background. I actually started the Google TPU chip and 379 00:19:46,720 --> 00:19:49,720 Speaker 10: we actually started with inference there because we're actually able 380 00:19:49,760 --> 00:19:51,520 Speaker 10: to train the models, we just couldn't afford to put 381 00:19:51,560 --> 00:19:54,520 Speaker 10: them in production. Typically, whatever you spend on training, you 382 00:19:54,520 --> 00:19:57,280 Speaker 10: will continue to spend going forward, but you're going to 383 00:19:57,280 --> 00:19:59,920 Speaker 10: spend ten to twenty times that much putting it into production. 384 00:20:00,480 --> 00:20:02,399 Speaker 10: You spend money to make the models, you make your 385 00:20:02,400 --> 00:20:06,560 Speaker 10: money with inference. It's also a scale game, and so 386 00:20:06,680 --> 00:20:08,240 Speaker 10: we've been focused on this since day one. 387 00:20:09,840 --> 00:20:14,040 Speaker 3: There's also sort of a relationship and talent conversation to 388 00:20:14,040 --> 00:20:16,840 Speaker 3: be had. Yan lquern Over at Meta is going to 389 00:20:16,840 --> 00:20:20,080 Speaker 3: be your new technical advisor, which was in the news 390 00:20:20,119 --> 00:20:20,680 Speaker 3: as well. 391 00:20:20,760 --> 00:20:22,040 Speaker 4: Why is that important to you? 392 00:20:23,119 --> 00:20:26,280 Speaker 10: So, Yan lacun is a legendary in this industry. He 393 00:20:26,359 --> 00:20:28,400 Speaker 10: won the Turing Award for being one of the three 394 00:20:28,440 --> 00:20:31,320 Speaker 10: people who invented the algorithms that make modern AI work. 395 00:20:31,680 --> 00:20:35,560 Speaker 10: And of course Yan Lacun is very centrally positioned in 396 00:20:35,640 --> 00:20:39,000 Speaker 10: terms of AI. He's also pushing very heavily for open 397 00:20:39,040 --> 00:20:42,200 Speaker 10: source models or open weights models, and this is something 398 00:20:42,200 --> 00:20:45,840 Speaker 10: that's important for the industry. GROC actually wouldn't exist today 399 00:20:46,200 --> 00:20:48,639 Speaker 10: if it wasn't for open source models. We'd actually built 400 00:20:48,640 --> 00:20:51,080 Speaker 10: the world's best chips, but if we didn't also have 401 00:20:51,160 --> 00:20:52,959 Speaker 10: the software to run on it, we wouldn't be able 402 00:20:53,000 --> 00:20:56,600 Speaker 10: to demonstrate that. And so the LAMA models for meta 403 00:20:56,920 --> 00:21:00,320 Speaker 10: effectively are the Linux of the generative age, and it's 404 00:21:00,440 --> 00:21:03,200 Speaker 10: enabling people to get into the AI business without having 405 00:21:03,200 --> 00:21:04,320 Speaker 10: to train the models themselves. 406 00:21:06,160 --> 00:21:16,920 Speaker 3: Jonathan Ross, founder and CEO of GROC, Welcome back to 407 00:21:16,920 --> 00:21:19,720 Speaker 3: Bloomberg Technology, Ed Ludlow in San Francisco. I go straight 408 00:21:19,720 --> 00:21:22,359 Speaker 3: to the Nasdaq one hundred, So we're off session lows, 409 00:21:22,400 --> 00:21:25,159 Speaker 3: down two point three percent or so in this session, 410 00:21:25,160 --> 00:21:27,720 Speaker 3: but we remind ourselves something that we talked about on Friday. 411 00:21:28,040 --> 00:21:32,360 Speaker 3: The Nasdaq one hundred closed Friday with four straight weeks 412 00:21:32,359 --> 00:21:36,480 Speaker 3: of declines, So what's happening right now in the moment. 413 00:21:36,600 --> 00:21:40,320 Speaker 3: There is anxiety in global financial markets, but it's kind 414 00:21:40,400 --> 00:21:42,639 Speaker 3: of been happening over a longer period of time in 415 00:21:42,720 --> 00:21:46,600 Speaker 3: terms of the downward pressure on technology stocks, in particular 416 00:21:46,880 --> 00:21:50,960 Speaker 3: in terms of single names and specific asset classes. Nvidia 417 00:21:51,000 --> 00:21:53,879 Speaker 3: is under pressure, but off session lows. Apple actually is 418 00:21:53,920 --> 00:21:57,080 Speaker 3: now down four percent and its declines are starting to accelerate, 419 00:21:57,080 --> 00:21:59,639 Speaker 3: but nowhere near the near eleven percent drop at the open. 420 00:22:00,000 --> 00:22:03,399 Speaker 3: Then Bitcoin well fifty four thousand US dollars per token 421 00:22:03,840 --> 00:22:05,919 Speaker 3: trading twenty four to seven, but was down eight percent 422 00:22:05,960 --> 00:22:07,040 Speaker 3: in the current US session. 423 00:22:07,280 --> 00:22:09,080 Speaker 4: There's a lot to discuss. Delights. 424 00:22:09,119 --> 00:22:11,720 Speaker 3: Bring in my friend Bluembo Shnali Bassak. I mean, you 425 00:22:11,760 --> 00:22:14,560 Speaker 3: had two hours on open interest, right and I think 426 00:22:14,600 --> 00:22:17,720 Speaker 3: that you probably discuss all manner of things, the basics 427 00:22:17,720 --> 00:22:20,400 Speaker 3: being a move into the bomb markets, the safety of them, 428 00:22:20,680 --> 00:22:24,440 Speaker 3: bitcoins not behaving like a haven asset, and equacy investors 429 00:22:24,480 --> 00:22:27,960 Speaker 3: are either very worried or completely sanguine. Reflects on some 430 00:22:27,960 --> 00:22:29,360 Speaker 3: of the conversations that you've. 431 00:22:29,160 --> 00:22:32,360 Speaker 11: Had a few things to the point that you're making here, 432 00:22:32,440 --> 00:22:34,359 Speaker 11: you're looking at the third day of declines in the 433 00:22:34,440 --> 00:22:36,720 Speaker 11: s and P five hundred, and then the Nazak one hundred. 434 00:22:36,960 --> 00:22:39,040 Speaker 11: It is the third day of declines of more than 435 00:22:39,080 --> 00:22:42,440 Speaker 11: two percent. Friday, you saw the Nazaq one hundred really 436 00:22:42,480 --> 00:22:46,400 Speaker 11: flirt with that correction territory. Then over the weekend into today, 437 00:22:46,760 --> 00:22:51,040 Speaker 11: you saw the Asian trade just really really sell through 438 00:22:51,040 --> 00:22:54,840 Speaker 11: the ground here. You saw really historic really moves there 439 00:22:54,880 --> 00:22:57,119 Speaker 11: in Japanese equities for example. 440 00:22:57,320 --> 00:22:58,040 Speaker 4: And what you. 441 00:22:58,000 --> 00:23:01,119 Speaker 11: Saw was an unwinding of a globe carry trade. This 442 00:23:01,200 --> 00:23:04,840 Speaker 11: is what investors are borrowing under a cheap currency and 443 00:23:04,880 --> 00:23:09,440 Speaker 11: really plowing those assets now into higher yielding US assets, 444 00:23:09,480 --> 00:23:12,480 Speaker 11: particularly stocks in this instance, which is why you're seeing 445 00:23:12,480 --> 00:23:15,680 Speaker 11: that unwind. Now, the major question is how far does 446 00:23:15,720 --> 00:23:19,240 Speaker 11: that unwind really go? On top of that, there's very 447 00:23:19,240 --> 00:23:22,120 Speaker 11: few places to hide. To your point, Bitcoin today now 448 00:23:22,200 --> 00:23:26,120 Speaker 11: flirting with about fifty five thousand, had fallen below fifty thousand. 449 00:23:26,480 --> 00:23:27,600 Speaker 4: You saw gold. 450 00:23:27,440 --> 00:23:30,320 Speaker 11: Dropping this morning, oil dropping as well. You saw a 451 00:23:30,359 --> 00:23:33,040 Speaker 11: lot of risk off attitudes across the board and in 452 00:23:33,119 --> 00:23:35,840 Speaker 11: the bond market as well, until you saw that ism 453 00:23:35,920 --> 00:23:37,920 Speaker 11: data hit and give a little bit of a sigh 454 00:23:37,960 --> 00:23:40,359 Speaker 11: of relief. You are now watching a bond market a 455 00:23:40,440 --> 00:23:43,600 Speaker 11: to your yield essentially about flat on the day, so 456 00:23:43,680 --> 00:23:46,480 Speaker 11: that severe bid in the bond market starting to take 457 00:23:46,480 --> 00:23:49,359 Speaker 11: its foot off of the pedal here, and stocks taking 458 00:23:49,400 --> 00:23:51,600 Speaker 11: a little bit of a breather along with it. Still 459 00:23:51,640 --> 00:23:54,000 Speaker 11: down on the day, but not as severely as we 460 00:23:54,080 --> 00:23:57,800 Speaker 11: started the day lower. Those small cap equities also taking 461 00:23:57,880 --> 00:24:01,440 Speaker 11: a major hit today as well. Remember recently a lot 462 00:24:01,480 --> 00:24:05,840 Speaker 11: of traders plowing into that Russell two thousand rotation really 463 00:24:05,880 --> 00:24:09,040 Speaker 11: feeling the pain, so underneath the surface, a lot of pain. 464 00:24:09,480 --> 00:24:11,800 Speaker 11: I will also say takes a couple of days to 465 00:24:11,840 --> 00:24:15,000 Speaker 11: see those margin calls also start to come through. Big 466 00:24:15,080 --> 00:24:17,760 Speaker 11: question here about whether there is more pain once you 467 00:24:17,800 --> 00:24:19,679 Speaker 11: see those calls start to come through the market. 468 00:24:20,680 --> 00:24:24,159 Speaker 3: Starting Monday with a discussion about margin calls. Happy Monday 469 00:24:24,200 --> 00:24:28,840 Speaker 3: to you, Bluebooks, Snali Vassek, thank you. Let's get the investors' perspective. 470 00:24:28,920 --> 00:24:32,720 Speaker 3: Nancy Tegler of Laffatengler Investments here to talk markets and 471 00:24:33,440 --> 00:24:36,760 Speaker 3: with respect. You've been in and around the market so 472 00:24:36,840 --> 00:24:38,840 Speaker 3: a lot longer than I But I just want to 473 00:24:38,840 --> 00:24:40,680 Speaker 3: go back to the point I made in my market 474 00:24:40,760 --> 00:24:43,840 Speaker 3: check that the NAZ that one hundred had had four straight. 475 00:24:43,600 --> 00:24:44,560 Speaker 4: Weeks of declines. 476 00:24:45,240 --> 00:24:49,480 Speaker 3: Bitcoin traded lower through the weekend over multiple days when 477 00:24:49,520 --> 00:24:53,480 Speaker 3: you wake up to daylight today, is it anxiety or 478 00:24:53,560 --> 00:24:55,119 Speaker 3: is it well, we should have seen this coming a 479 00:24:55,160 --> 00:24:55,600 Speaker 3: little bit. 480 00:24:57,160 --> 00:25:00,040 Speaker 12: Well, yes, thanks for having me ED. I think we 481 00:25:00,119 --> 00:25:04,239 Speaker 12: kind of did see it coming. As earning started. The 482 00:25:04,240 --> 00:25:08,800 Speaker 12: penalty that Alphabet received for CAPEC spending and just somewhat 483 00:25:08,840 --> 00:25:13,159 Speaker 12: weaker margins in the next quarter seemed outsized to me. 484 00:25:13,400 --> 00:25:16,400 Speaker 12: And that's often what happens when valuations get a little 485 00:25:16,440 --> 00:25:20,200 Speaker 12: bit lofty, and then every bit of news, every bit 486 00:25:20,240 --> 00:25:23,560 Speaker 12: of headline news, drives the market because thealgoes are reading 487 00:25:24,119 --> 00:25:27,000 Speaker 12: the headlines, the hedge funds are trading off of the headlines, 488 00:25:27,240 --> 00:25:30,600 Speaker 12: and so you get these big, outsized moves. If you 489 00:25:30,640 --> 00:25:33,600 Speaker 12: put it in the perspective of the forty plus years 490 00:25:33,600 --> 00:25:36,600 Speaker 12: I've been doing it historically, this has been a time 491 00:25:36,640 --> 00:25:39,560 Speaker 12: when you've wanted to step back, not jump in too quickly, 492 00:25:40,000 --> 00:25:42,800 Speaker 12: but build a list of names that you want to own. 493 00:25:43,200 --> 00:25:46,000 Speaker 12: And then as the market sort of settle in the 494 00:25:46,080 --> 00:25:48,520 Speaker 12: VIX comes down a little bit, then I think this 495 00:25:48,840 --> 00:25:51,440 Speaker 12: is once again an opportunity. The last thing I'll say 496 00:25:51,440 --> 00:25:55,159 Speaker 12: about this ED is that the one economic number that 497 00:25:55,240 --> 00:25:58,879 Speaker 12: has been little discussed and gone unnoticed was the improvement 498 00:25:58,960 --> 00:26:02,960 Speaker 12: in productivity too, was came in much harder than expected, 499 00:26:03,000 --> 00:26:07,000 Speaker 12: up two point three percent. The previous quarter was revised 500 00:26:07,119 --> 00:26:10,440 Speaker 12: up also, and I think productivity is going to be 501 00:26:10,480 --> 00:26:13,720 Speaker 12: the key, the magic bullet, whatever you want to call it, 502 00:26:13,840 --> 00:26:19,560 Speaker 12: for continued economic growth in a lower inflationary environment. 503 00:26:21,200 --> 00:26:25,159 Speaker 3: Take what you just said about productivity then, and I 504 00:26:25,240 --> 00:26:27,640 Speaker 3: post a question of what should the market do with that? 505 00:26:27,800 --> 00:26:30,119 Speaker 3: You know, Mike McKee was on the show earlier trying 506 00:26:30,280 --> 00:26:33,520 Speaker 3: his best to explain why the swats market with price 507 00:26:33,560 --> 00:26:36,959 Speaker 3: a sixty percent chance of the Fed doing an emergency 508 00:26:37,040 --> 00:26:40,000 Speaker 3: rate cut this week, and that seems more tied to 509 00:26:40,600 --> 00:26:45,119 Speaker 3: the equities market rather than warding off a recession or not. 510 00:26:45,240 --> 00:26:46,240 Speaker 4: I'm just trying. 511 00:26:45,960 --> 00:26:51,240 Speaker 3: To tie macro and monetary policy with the market's behavior 512 00:26:51,320 --> 00:26:51,800 Speaker 3: right now. 513 00:26:52,760 --> 00:26:55,919 Speaker 12: Well, yeah, and if you had been well, you certainly 514 00:26:55,920 --> 00:26:58,320 Speaker 12: know about the bond vigilandies. But that's what this feels 515 00:26:58,400 --> 00:27:00,920 Speaker 12: like to me. It's the market having temper tantrum because 516 00:27:00,960 --> 00:27:03,400 Speaker 12: they think the Fed is waited too long. They probably 517 00:27:03,440 --> 00:27:06,280 Speaker 12: have waited too long. They've been behind the curve, so 518 00:27:06,359 --> 00:27:08,840 Speaker 12: to speak, all the way through this process. And this 519 00:27:09,000 --> 00:27:12,960 Speaker 12: notion of being data dependent in a world where you 520 00:27:13,080 --> 00:27:16,439 Speaker 12: need to be looking forward and where they're four hundred 521 00:27:16,560 --> 00:27:22,080 Speaker 12: plus PhD economists are forecasting models. They have made, in 522 00:27:22,160 --> 00:27:27,120 Speaker 12: my estimation, an enormous policy error. But that said, stocks 523 00:27:27,200 --> 00:27:29,800 Speaker 12: ultimately should trade off of earnings. I think we get 524 00:27:29,800 --> 00:27:32,560 Speaker 12: a cut. I don't think we get an emergency cut, 525 00:27:32,640 --> 00:27:34,879 Speaker 12: as the market would like. And I actually think that 526 00:27:34,920 --> 00:27:37,920 Speaker 12: would be bad because when you look at the economic numbers, 527 00:27:38,760 --> 00:27:42,200 Speaker 12: the economy is just fine. I mean, the jobs numbers 528 00:27:42,240 --> 00:27:47,560 Speaker 12: are revised dramatically every month, and so I think you 529 00:27:47,640 --> 00:27:49,679 Speaker 12: have to step away from that and say, you know, 530 00:27:50,000 --> 00:27:52,800 Speaker 12: was that an aberration on Friday? Is I mean, we 531 00:27:52,880 --> 00:27:55,600 Speaker 12: know the job market is softening, but is it collapsing? 532 00:27:55,720 --> 00:27:57,879 Speaker 12: I don't think so. And so I think this is 533 00:27:57,920 --> 00:28:01,639 Speaker 12: an opportunity for long term investors once the dust settles, 534 00:28:01,640 --> 00:28:04,639 Speaker 12: because there there'll probably be a few more runs to 535 00:28:04,680 --> 00:28:06,679 Speaker 12: the downside. And then I think you step in and 536 00:28:06,720 --> 00:28:08,200 Speaker 12: you add to high quality memes. 537 00:28:08,920 --> 00:28:12,879 Speaker 3: Nancy in Video reports its earnings after market on August 538 00:28:12,920 --> 00:28:16,240 Speaker 3: twenty eight. How uncomfortable are the next three weeks going 539 00:28:16,280 --> 00:28:16,480 Speaker 3: to be? 540 00:28:17,680 --> 00:28:19,760 Speaker 12: I think they're going to be uncomfortable ed. I think that, 541 00:28:20,280 --> 00:28:23,240 Speaker 12: and remember we've seen this every year twenty twenty two, 542 00:28:23,280 --> 00:28:25,840 Speaker 12: twenty twenty three. We were told in the summer and 543 00:28:25,920 --> 00:28:28,919 Speaker 12: the summer swoon that the tech trade was over, but 544 00:28:29,040 --> 00:28:34,639 Speaker 12: remember the CAPEC spend that Alphabet and Amazon and Microsoft 545 00:28:34,640 --> 00:28:38,000 Speaker 12: have been punished for is someone else's revenues, and so 546 00:28:38,040 --> 00:28:40,480 Speaker 12: I think in vidious likely to surprise to the upside 547 00:28:40,560 --> 00:28:42,920 Speaker 12: we heard from Lisa Sue. I heard you mentioned her earlier. 548 00:28:43,320 --> 00:28:45,880 Speaker 12: That's a name where we've been adding. I think it's 549 00:28:45,920 --> 00:28:50,800 Speaker 12: going to be a catalyst for some outperformance and stabilization. 550 00:28:52,160 --> 00:28:53,760 Speaker 3: If you're able to please, can we look a hot 551 00:28:53,840 --> 00:28:56,120 Speaker 3: head to the second half of the year. We talked 552 00:28:56,120 --> 00:28:58,520 Speaker 3: a lot about how in years where the S and 553 00:28:58,560 --> 00:29:02,560 Speaker 3: P five hundred registered is a double digit percentage gain 554 00:29:02,640 --> 00:29:05,720 Speaker 3: in one age, it often performs well in the second 555 00:29:05,720 --> 00:29:07,480 Speaker 3: half of the year. I think the NAZA one hundred 556 00:29:07,480 --> 00:29:12,160 Speaker 3: has similar precedents or history. Is that your expectation of 557 00:29:12,200 --> 00:29:12,880 Speaker 3: what's to come? 558 00:29:14,000 --> 00:29:16,560 Speaker 12: Yeah, Well, based on what I've heard from the companies 559 00:29:17,000 --> 00:29:20,640 Speaker 12: from an earning standpoint, you're hearing and most of us 560 00:29:20,640 --> 00:29:23,000 Speaker 12: are hearing, that it's not been a good reporting season 561 00:29:23,040 --> 00:29:27,560 Speaker 12: so far, but there have been very meaningful bright spots, 562 00:29:27,840 --> 00:29:32,440 Speaker 12: Companies raising guidance, companies expanding margins. So I think that 563 00:29:32,640 --> 00:29:35,120 Speaker 12: you have to again, as always, you've got to let 564 00:29:35,800 --> 00:29:39,120 Speaker 12: the markets work through this stuff. But the second half, 565 00:29:39,200 --> 00:29:42,440 Speaker 12: based on what we've seen at the company level, should 566 00:29:42,480 --> 00:29:46,880 Speaker 12: be better and up in our view, and seasonality is 567 00:29:46,920 --> 00:29:50,360 Speaker 12: in our favorites and election year that doesn't always work, 568 00:29:50,440 --> 00:29:53,480 Speaker 12: but we do think we'll certainly be higher by the 569 00:29:53,560 --> 00:29:55,680 Speaker 12: end of the year and even into twenty twenty five. 570 00:29:55,960 --> 00:29:58,120 Speaker 12: If the tech trade is over, people need to be 571 00:29:58,240 --> 00:30:01,160 Speaker 12: much more worried about the rest to the market because 572 00:30:01,200 --> 00:30:05,920 Speaker 12: technology is embedded in every aspect of many companies day 573 00:30:05,960 --> 00:30:09,760 Speaker 12: to day and their future earnings and margin growth. 574 00:30:10,960 --> 00:30:13,680 Speaker 3: That is the argument that Bloomberg Intelligence is Gina Martin 575 00:30:13,720 --> 00:30:16,080 Speaker 3: Adams literally wrote this morning. We're going to talk about 576 00:30:16,120 --> 00:30:18,480 Speaker 3: it with her later in the show. Nancy Tengler, CEO 577 00:30:18,520 --> 00:30:21,200 Speaker 3: and CEO of Lappetengler Investments, thank you very much. Now 578 00:30:21,400 --> 00:30:23,320 Speaker 3: coming up on the program, we're going to be joined 579 00:30:23,320 --> 00:30:27,280 Speaker 3: by Matt Wieiler from Wellington Private Investments for his take 580 00:30:27,640 --> 00:30:30,440 Speaker 3: on private markets late stage investing. 581 00:30:30,640 --> 00:30:31,400 Speaker 4: But there are. 582 00:30:31,240 --> 00:30:33,920 Speaker 3: Always parallels with what's going on around the world, even 583 00:30:33,960 --> 00:30:36,880 Speaker 3: with public markets and public acquities. I'm really looking forward 584 00:30:36,880 --> 00:30:55,760 Speaker 3: to this one that's next. This is Bloomberg Technology right 585 00:30:55,800 --> 00:30:58,360 Speaker 3: back to financial markets and megacap tech. We're going to 586 00:30:58,360 --> 00:31:02,320 Speaker 3: look at the Bloomberg Index, which tracks the Magnificent Magnificent seven. 587 00:31:02,360 --> 00:31:06,080 Speaker 3: These are the biggest megacap technology companies. At one point 588 00:31:06,120 --> 00:31:09,680 Speaker 3: in the session, the biggest drop on record. We've paired 589 00:31:09,680 --> 00:31:12,000 Speaker 3: that that's kind of the story of the session so far, 590 00:31:12,320 --> 00:31:15,520 Speaker 3: down three point four three point five percent on the 591 00:31:15,560 --> 00:31:19,680 Speaker 3: mag seven. We've outlined all the concerns so far. Part 592 00:31:19,720 --> 00:31:22,000 Speaker 3: of it is the worry about growth, and we can 593 00:31:22,040 --> 00:31:24,960 Speaker 3: wait until Video's earnings on August twenty eighth to carry 594 00:31:25,000 --> 00:31:27,880 Speaker 3: on that conversation about growth, particularly in the context of 595 00:31:27,880 --> 00:31:31,040 Speaker 3: investment in AI infrastructure. But there are lots of parallels 596 00:31:31,040 --> 00:31:33,920 Speaker 3: between public markets and also private markets as well. Let's 597 00:31:33,920 --> 00:31:37,200 Speaker 3: talk about the investment landscape when it comes to late 598 00:31:37,240 --> 00:31:42,000 Speaker 3: stage private tech companies, also IPO tech activity. I suppose 599 00:31:42,040 --> 00:31:45,520 Speaker 3: with Matt with Hyler, consumer and Technology lead for Wellington 600 00:31:45,560 --> 00:31:49,000 Speaker 3: Private Investments, also joined by my friend Hemma Palmer of 601 00:31:49,080 --> 00:31:49,960 Speaker 3: Bloomberg News. 602 00:31:50,160 --> 00:31:51,200 Speaker 4: Good morning to you, Matt. 603 00:31:52,120 --> 00:31:54,880 Speaker 3: When you wake up to a daylight today, you're largely 604 00:31:54,920 --> 00:31:56,280 Speaker 3: focused on growth. 605 00:31:56,000 --> 00:31:57,360 Speaker 4: Stage venture investments. 606 00:31:57,880 --> 00:32:00,720 Speaker 3: There are different factors you're tracking, But how do you react? 607 00:32:01,120 --> 00:32:03,800 Speaker 4: How does it make you approach your day to day work. 608 00:32:05,360 --> 00:32:08,360 Speaker 2: The short answer is is that on a day to 609 00:32:08,440 --> 00:32:11,960 Speaker 2: day basis, the fluctuations in volatility in the public market 610 00:32:12,240 --> 00:32:15,640 Speaker 2: don't really impact the late stage private market where we focus. 611 00:32:15,760 --> 00:32:19,479 Speaker 2: There's obviously implications if this persists when it comes to 612 00:32:19,640 --> 00:32:24,720 Speaker 2: exit opportunity with the respect to IPOs and valuation concerns, 613 00:32:24,760 --> 00:32:27,600 Speaker 2: but the day to day volatility doesn't really impact the 614 00:32:27,720 --> 00:32:30,440 Speaker 2: late stage private market unless it sustains. 615 00:32:31,800 --> 00:32:34,239 Speaker 13: And when you look at AI, you know, some of 616 00:32:34,320 --> 00:32:36,400 Speaker 13: the a good portion of the pain we're seeing right 617 00:32:36,440 --> 00:32:39,960 Speaker 13: now is in the AI stock space. Does that inform 618 00:32:40,080 --> 00:32:42,920 Speaker 13: how you look at AI investing when it comes to 619 00:32:43,040 --> 00:32:45,920 Speaker 13: late stage growth investing in artificial intelligence? 620 00:32:46,960 --> 00:32:50,480 Speaker 2: Again, I wouldn't characterize the public markets as having a 621 00:32:50,560 --> 00:32:53,880 Speaker 2: huge implication in the short term on the late stage 622 00:32:53,880 --> 00:32:57,680 Speaker 2: private market, but I would say, you know, with respect 623 00:32:57,720 --> 00:32:59,440 Speaker 2: to AI, you kind of have to think about and 624 00:32:59,480 --> 00:33:03,959 Speaker 2: address us question number one is is AI a transformational 625 00:33:04,000 --> 00:33:05,840 Speaker 2: shift in technology platforms? 626 00:33:05,840 --> 00:33:06,800 Speaker 1: You kind of have to answer that. 627 00:33:07,320 --> 00:33:08,840 Speaker 2: And then the second question I think you have to 628 00:33:08,840 --> 00:33:11,480 Speaker 2: answer is kind of where are you with respect to 629 00:33:11,680 --> 00:33:15,880 Speaker 2: AI based transformation or AI lead transformation? And I think 630 00:33:15,920 --> 00:33:18,000 Speaker 2: those are the two questions you have to answer as 631 00:33:18,000 --> 00:33:20,760 Speaker 2: a late safe private investor to think about where you 632 00:33:20,800 --> 00:33:23,400 Speaker 2: should be deploying, if at all, and what the landscape 633 00:33:23,440 --> 00:33:26,240 Speaker 2: looks like not over the next month or two or quarter, 634 00:33:26,640 --> 00:33:28,240 Speaker 2: but over the next multi day. 635 00:33:28,920 --> 00:33:31,080 Speaker 13: So as you look to invest the seven point five 636 00:33:31,080 --> 00:33:34,920 Speaker 13: billion that you oversee in private markets, where is the 637 00:33:34,920 --> 00:33:36,680 Speaker 13: biggest opportunity for you right now? 638 00:33:37,640 --> 00:33:39,960 Speaker 2: I mean, I think I couldn't be on the show 639 00:33:39,960 --> 00:33:42,120 Speaker 2: and be talking to both of you about talking about 640 00:33:42,160 --> 00:33:46,719 Speaker 2: AI and AI lead disruption when you think about fundamental 641 00:33:46,800 --> 00:33:51,560 Speaker 2: transformational shifts in technology. We believe that AI is a 642 00:33:51,680 --> 00:33:55,760 Speaker 2: disruptive technology that will be a generational shift and how 643 00:33:55,800 --> 00:34:01,400 Speaker 2: technology is ultimately deployed and adopted by enterprises. But then 644 00:34:01,440 --> 00:34:04,280 Speaker 2: to the second question around how are we or how 645 00:34:04,320 --> 00:34:06,640 Speaker 2: far along are we in that transformation? 646 00:34:07,080 --> 00:34:08,640 Speaker 1: I think we're very early. 647 00:34:08,719 --> 00:34:10,840 Speaker 2: And so when we think about opportunity set and we 648 00:34:10,880 --> 00:34:13,240 Speaker 2: think about AI, we're long term, very. 649 00:34:13,120 --> 00:34:14,480 Speaker 1: Bullish on the opportunity. 650 00:34:14,719 --> 00:34:16,879 Speaker 2: You think shorter term and think about where we are 651 00:34:16,920 --> 00:34:20,799 Speaker 2: within the inning the game of AI, and given how 652 00:34:20,840 --> 00:34:23,520 Speaker 2: early we are, I think one of the questions that 653 00:34:23,560 --> 00:34:26,400 Speaker 2: we end up asking ourselves with respect to AI is 654 00:34:26,680 --> 00:34:29,960 Speaker 2: will today's winners be the winners that persist over a 655 00:34:29,960 --> 00:34:32,880 Speaker 2: long time, and I think when you look historically at 656 00:34:33,160 --> 00:34:36,920 Speaker 2: tech led disruption, when it comes to generational shifts like 657 00:34:37,000 --> 00:34:41,719 Speaker 2: the Internet, like cloud, like mobile, the early winners oftentimes 658 00:34:41,760 --> 00:34:44,520 Speaker 2: are not the long term winners who end up creating 659 00:34:44,640 --> 00:34:46,480 Speaker 2: multi billion dollar public companies. 660 00:34:47,480 --> 00:34:51,080 Speaker 3: Matt, you said that term or daily volatility doesn't really 661 00:34:51,160 --> 00:34:54,240 Speaker 3: impact thinking in the hearing now, but it does impact 662 00:34:54,280 --> 00:34:58,239 Speaker 3: sentiment towards markets, and therefore we need to ask about IPOs. 663 00:34:58,640 --> 00:35:00,279 Speaker 3: You know, where do you see the remainder of this 664 00:35:00,400 --> 00:35:02,880 Speaker 3: year with some of the late stage companies that are 665 00:35:02,880 --> 00:35:05,200 Speaker 3: waiting in the wings to go public. 666 00:35:06,400 --> 00:35:09,239 Speaker 2: I mean, I think, as you've talked about through the show, ed, 667 00:35:09,480 --> 00:35:13,320 Speaker 2: the landscape has changed pretty dramatically over the past two days, 668 00:35:13,360 --> 00:35:17,120 Speaker 2: two trading days, and absent those two trading days, I 669 00:35:17,120 --> 00:35:20,239 Speaker 2: would have said that the IPO market is probably on 670 00:35:20,280 --> 00:35:23,399 Speaker 2: the rebound, likely to start accelerating through the back half 671 00:35:23,440 --> 00:35:27,000 Speaker 2: of this year and early next year. And given the noise, 672 00:35:27,040 --> 00:35:30,120 Speaker 2: the volatility we're seeing today, will it cause the company 673 00:35:30,160 --> 00:35:32,280 Speaker 2: that maybe's on the margin thinking should I go public 674 00:35:32,360 --> 00:35:36,040 Speaker 2: or not to reassess and maybe delay until early next year? 675 00:35:36,320 --> 00:35:37,040 Speaker 1: Most likely? 676 00:35:38,160 --> 00:35:40,600 Speaker 2: That being said, if you go back, not over the 677 00:35:40,680 --> 00:35:42,040 Speaker 2: last five. 678 00:35:41,920 --> 00:35:43,440 Speaker 1: Or ten years of IPO data. 679 00:35:43,480 --> 00:35:45,560 Speaker 2: But if you look back at the last fifty years 680 00:35:45,560 --> 00:35:48,960 Speaker 2: of IPO activity levels, generally. 681 00:35:48,520 --> 00:35:51,200 Speaker 1: The IPO window in other words, the. 682 00:35:51,320 --> 00:35:54,960 Speaker 2: Amount of IPOs coming out tends to be dramatically below 683 00:35:55,040 --> 00:35:58,000 Speaker 2: the norm or the mean for one to three years. 684 00:35:58,000 --> 00:35:59,920 Speaker 2: And if you think about where we sit today, were 685 00:36:00,160 --> 00:36:01,480 Speaker 2: kind of in the middle. 686 00:36:01,200 --> 00:36:04,560 Speaker 1: Of year three, the first quarter of Q. 687 00:36:04,440 --> 00:36:09,000 Speaker 2: Three of IPO activity being meaningfully down compared to historic periods, 688 00:36:09,560 --> 00:36:12,319 Speaker 2: and so based on that, I would guess that we 689 00:36:12,480 --> 00:36:16,280 Speaker 2: maybe have anywhere between zero in twelve more months before 690 00:36:16,280 --> 00:36:18,920 Speaker 2: we do see a rebounded IPO activity, and. 691 00:36:18,880 --> 00:36:20,600 Speaker 1: We're starting to see a little bit of it today. 692 00:36:21,239 --> 00:36:23,799 Speaker 2: If you look back last year, we had three tech 693 00:36:23,880 --> 00:36:27,400 Speaker 2: led IPOs go public last year. This year you're to 694 00:36:27,440 --> 00:36:30,200 Speaker 2: date we've had five, so already at an accelerated pace. 695 00:36:30,520 --> 00:36:33,680 Speaker 2: Will we take a pause given what's going on today? 696 00:36:33,719 --> 00:36:39,080 Speaker 3: Potenti Matt with Eiler Consumers, technology lead for Wellington Private 697 00:36:39,120 --> 00:36:43,840 Speaker 3: Investments and Bloomberg's Hemmapalma. Just very dynamic and timely conversation. 698 00:36:44,000 --> 00:36:53,520 Speaker 4: Thank you. Back to markets. 699 00:36:53,600 --> 00:36:56,400 Speaker 3: Let's bring in Gena Martin Adams of Bloomberg Intelligence and 700 00:36:56,800 --> 00:36:58,960 Speaker 3: Gina are going straight to your bio on the Bloomberg 701 00:36:59,040 --> 00:37:02,839 Speaker 3: terminal this morning. I'll summarize, but you're basically saying, look 702 00:37:02,880 --> 00:37:05,560 Speaker 3: at earnings in aggregate on the S and P five 703 00:37:05,640 --> 00:37:10,040 Speaker 3: hundred and stop blaming earnings, Blame something else. 704 00:37:10,360 --> 00:37:12,520 Speaker 4: Who are you holding responsible for what's happening? 705 00:37:12,560 --> 00:37:14,640 Speaker 14: Gina, Yeah, I think that really if we look at 706 00:37:14,640 --> 00:37:16,719 Speaker 14: the sequence of how the market is melted down over 707 00:37:16,760 --> 00:37:19,799 Speaker 14: the last couple of weeks, it's been predominantly about tech 708 00:37:19,880 --> 00:37:21,799 Speaker 14: and kind of a loss of faith and tech. Now, 709 00:37:22,120 --> 00:37:24,759 Speaker 14: I think it's important to consider where we've been as 710 00:37:24,800 --> 00:37:27,120 Speaker 14: well when you look at the broad markets. We wrote 711 00:37:27,120 --> 00:37:28,600 Speaker 14: a couple of notes last week that I think you're 712 00:37:28,600 --> 00:37:29,200 Speaker 14: pretty telling. 713 00:37:29,200 --> 00:37:30,720 Speaker 4: The first is we. 714 00:37:30,600 --> 00:37:34,200 Speaker 14: Identify three and forty four reasons why tech faced in 715 00:37:34,320 --> 00:37:38,440 Speaker 14: possible expectations. Those reasons are basis points and valuation multiples 716 00:37:39,120 --> 00:37:42,960 Speaker 14: four thousand basis points above long term average or five 717 00:37:43,040 --> 00:37:46,120 Speaker 14: year average. On the multiple would suggest that expectations for 718 00:37:46,200 --> 00:37:50,040 Speaker 14: tech companies were extremely high coming into the last week. Yeah, 719 00:37:50,080 --> 00:37:52,480 Speaker 14: a couple of key headline misses, but for the most part, 720 00:37:52,520 --> 00:37:57,239 Speaker 14: tech companies actually satisfied second quarter expectations. It was about 721 00:37:57,239 --> 00:37:59,960 Speaker 14: their guidance and this is the trigger that the market 722 00:38:00,080 --> 00:38:02,239 Speaker 14: really played on. Then you piled on top of that 723 00:38:02,360 --> 00:38:05,200 Speaker 14: some key macro indicators in the ism and the employment 724 00:38:05,239 --> 00:38:08,319 Speaker 14: numbers that weren't as strong as many had hoped for, 725 00:38:08,520 --> 00:38:10,400 Speaker 14: and you have a full meltdown on your hands. But 726 00:38:10,440 --> 00:38:13,279 Speaker 14: this is really at the foot of tech, and investors' 727 00:38:13,280 --> 00:38:16,000 Speaker 14: expectations that tech was of tech were just far too 728 00:38:16,120 --> 00:38:20,320 Speaker 14: high coming into this earning season. We're now normalizing those expectations, 729 00:38:20,400 --> 00:38:22,560 Speaker 14: and that's creating a bit of panic in the market. 730 00:38:23,440 --> 00:38:28,120 Speaker 3: Investors' expectations are interesting. I mean, I think about Microsoft, 731 00:38:28,120 --> 00:38:31,960 Speaker 3: for example, is just one case study where they missed 732 00:38:32,080 --> 00:38:35,680 Speaker 3: estimates on cloud growth by a percentage point but still 733 00:38:35,719 --> 00:38:39,840 Speaker 3: registered twenty nine two nine percent top line growth in 734 00:38:39,880 --> 00:38:45,400 Speaker 3: the most critical unit. Is it just sort of idiosyncratic 735 00:38:45,840 --> 00:38:49,640 Speaker 3: or is this broad based anxiety from investors that something 736 00:38:49,680 --> 00:38:52,320 Speaker 3: will give way on the growth narrative overall? 737 00:38:52,960 --> 00:38:55,120 Speaker 14: Yeah, I think it's a great question, and it's really 738 00:38:55,120 --> 00:38:57,359 Speaker 14: difficult to tell so far. But what I can say 739 00:38:57,400 --> 00:39:00,440 Speaker 14: is over the last week, what we have seen is 740 00:39:00,680 --> 00:39:04,520 Speaker 14: just severe punishment of any tiny nuance, as you correctly 741 00:39:04,600 --> 00:39:09,160 Speaker 14: highlight with Microsoft, very very strong aggregate growth, but a 742 00:39:09,239 --> 00:39:12,680 Speaker 14: tiny nuanced miss was enough to really create a lot 743 00:39:12,719 --> 00:39:15,839 Speaker 14: of uncertainty around that story. You see a lot of 744 00:39:15,840 --> 00:39:20,439 Speaker 14: the same emerged with Amazon, similar sort of reactions even 745 00:39:20,480 --> 00:39:24,040 Speaker 14: to Alphabet, So across the tech and tech adjacent space, 746 00:39:24,640 --> 00:39:27,719 Speaker 14: we saw very similar reaction functions emerge. And that is 747 00:39:28,239 --> 00:39:30,600 Speaker 14: I think investors just got ahead of them to their skates. 748 00:39:30,760 --> 00:39:33,080 Speaker 14: They were expecting tech not only to beat, but to 749 00:39:33,200 --> 00:39:37,840 Speaker 14: raise expectations beat almost perfectly. That was embedded in valuations, 750 00:39:37,880 --> 00:39:39,000 Speaker 14: and now we're normalizing that. 751 00:39:39,120 --> 00:39:39,279 Speaker 4: Now. 752 00:39:39,280 --> 00:39:43,560 Speaker 14: This is tough because at this point in time, it 753 00:39:43,640 --> 00:39:47,800 Speaker 14: was impossible for tech to keep creating stronger and stronger 754 00:39:47,840 --> 00:39:51,200 Speaker 14: momentum earnings. We're now getting to the point where third quarter, 755 00:39:51,320 --> 00:39:53,840 Speaker 14: second quarter, third quarter earnings of this year are facing 756 00:39:53,960 --> 00:39:58,080 Speaker 14: incredibly tough comps. So tech earnings, even in the best 757 00:39:58,080 --> 00:40:01,720 Speaker 14: of circumstance stances, are going to show decelerating growth rates 758 00:40:01,760 --> 00:40:04,239 Speaker 14: over the second half of this year for the first 759 00:40:04,239 --> 00:40:07,080 Speaker 14: time in quite some time. They were the only story 760 00:40:07,120 --> 00:40:10,120 Speaker 14: of accelerating growth in the market in twenty twenty three 761 00:40:10,239 --> 00:40:13,879 Speaker 14: and early twenty twenty four. Now they're showing some decelerating 762 00:40:13,880 --> 00:40:15,840 Speaker 14: and growth. Well, the rest of the S and P 763 00:40:15,960 --> 00:40:18,520 Speaker 14: five hundred is actually showing the growth acceleration, But we're 764 00:40:18,600 --> 00:40:21,400 Speaker 14: kind of ignoring that because tech has been so key 765 00:40:21,480 --> 00:40:23,319 Speaker 14: to the market performance so far this year. 766 00:40:23,360 --> 00:40:25,560 Speaker 3: Well, you can also sort of pick and choose your 767 00:40:25,680 --> 00:40:28,319 Speaker 3: data point, right, So in the first half of this year, 768 00:40:28,360 --> 00:40:31,560 Speaker 3: the S and P five hundred rows fourteen percent, largely 769 00:40:31,560 --> 00:40:33,080 Speaker 3: attributable to the mag seven. 770 00:40:33,320 --> 00:40:33,560 Speaker 12: Right. 771 00:40:33,600 --> 00:40:35,600 Speaker 3: But the other data point is that in years where 772 00:40:35,600 --> 00:40:38,080 Speaker 3: the S and P five hundred has registered double digit 773 00:40:38,160 --> 00:40:41,040 Speaker 3: gain in one h it usually does quite well in 774 00:40:41,160 --> 00:40:43,120 Speaker 3: the full year or the second half of the year. 775 00:40:43,440 --> 00:40:46,240 Speaker 3: So which one do you put emphasis on? The index 776 00:40:46,440 --> 00:40:47,960 Speaker 3: or the names that drove the gains? 777 00:40:48,239 --> 00:40:50,799 Speaker 14: Initially, I think it's a combination of both. I hate 778 00:40:50,840 --> 00:40:53,840 Speaker 14: to wiggle around your question with them awfully answer, and 779 00:40:53,880 --> 00:40:56,520 Speaker 14: I do think it is a combination of both, because 780 00:40:57,280 --> 00:41:00,200 Speaker 14: if tech continues to sell off, if we still have 781 00:41:00,239 --> 00:41:03,640 Speaker 14: weakness in tech, it's almost impossible for the index to 782 00:41:03,719 --> 00:41:07,399 Speaker 14: overcome that. But the tech seloff is really about right 783 00:41:07,480 --> 00:41:10,880 Speaker 14: sizing expectations and the rest of the index is producing growth. 784 00:41:11,160 --> 00:41:14,399 Speaker 14: This is one major nuance when we compare twenty twenty 785 00:41:14,400 --> 00:41:16,240 Speaker 14: four to twenty twenty three that I think is important 786 00:41:16,239 --> 00:41:19,040 Speaker 14: to acknowledge. When tech sold off in the third quarter 787 00:41:19,080 --> 00:41:20,880 Speaker 14: of twenty twenty three, remember we had a ten percent 788 00:41:20,880 --> 00:41:23,399 Speaker 14: correction last time this year as well, but when Tech 789 00:41:23,440 --> 00:41:25,839 Speaker 14: sold off in that instance, it was basically a one 790 00:41:25,920 --> 00:41:27,759 Speaker 14: for one. As Tech sold off, the S and P 791 00:41:27,840 --> 00:41:30,960 Speaker 14: five hundred sold off just as much. This time, the 792 00:41:31,080 --> 00:41:32,879 Speaker 14: S and P five hundred is down just more than 793 00:41:32,920 --> 00:41:35,600 Speaker 14: half or just about half as much as Tech. Okay, 794 00:41:35,640 --> 00:41:39,239 Speaker 14: because you have some natural stabilizers that have emerged in 795 00:41:39,280 --> 00:41:41,560 Speaker 14: twenty twenty four, with that our news recovery that is 796 00:41:41,600 --> 00:41:44,719 Speaker 14: emerging in the rest of the index, does that sustain itself? 797 00:41:44,920 --> 00:41:46,759 Speaker 14: Can it gather a little bit of momentum and a 798 00:41:46,760 --> 00:41:48,840 Speaker 14: little bit of attention is a really key question we 799 00:41:48,880 --> 00:41:49,960 Speaker 14: should be asking right now. 800 00:41:50,080 --> 00:41:53,560 Speaker 3: Yes, Tina Martin Adams of Bloomberg Intelligence, thank you so 801 00:41:53,719 --> 00:41:56,759 Speaker 3: much this Monday. That does it for this edition of 802 00:41:56,760 --> 00:42:00,239 Speaker 3: Bloomberg Technology. Don't forget to recap all the conversations had 803 00:42:00,239 --> 00:42:03,440 Speaker 3: today on the podcast. They were dynamic and there is 804 00:42:03,480 --> 00:42:05,279 Speaker 3: a lot going on your where to find it on 805 00:42:05,360 --> 00:42:09,239 Speaker 3: the terminal, the Bloomberg platforms, as well as on Apple, Spotify, 806 00:42:09,640 --> 00:42:11,319 Speaker 3: and iHeart from San Francisco. 807 00:42:11,719 --> 00:42:13,080 Speaker 4: This is Bloomberg Technology.