WEBVTT - White House Calls Out Amazon, SoFi CEO Weighs in on Earnings and Regulation 0:00:02.520 --> 0:00:08.480 Bloomberg Audio Studios, podcasts, radio news, innovation. 0:00:08.360 --> 0:00:12.800 Money and power collide in Silicon Valley and beyond. 0:00:13.240 --> 0:00:17.600 This is Bloomberg Technology with Caroline Hyde and Ed. 0:00:17.600 --> 0:00:33.879 Ludlow live from New York and San Francisco. This is 0:00:33.920 --> 0:00:37.319 Bloomberg Technology coming up. The White House takes aim at 0:00:37.360 --> 0:00:41.720 Amazon after a reported play to display the cost of 0:00:41.800 --> 0:00:45.280 tariffs on certain products, but the tech giant denies the move. 0:00:46.159 --> 0:00:49.440 Plus, Spotify sees a surgeon subscribers in the first quarter, 0:00:49.560 --> 0:00:51.600 but shares slide and. 0:00:51.520 --> 0:00:54.320 The SOFI CEO joins us after posting the first quarter 0:00:54.360 --> 0:00:57.240 beat and raising guidance, showing resilience amid. 0:00:57.000 --> 0:00:57.960 The economic turmoil. 0:00:58.000 --> 0:01:00.360 But first way check in on these markets, which are 0:01:00.360 --> 0:01:03.319 also showing some resilience, said, we're up three tens of percent, but. 0:01:03.400 --> 0:01:04.920 Is it bad news? That is good news. 0:01:05.120 --> 0:01:08.840 We see woefully low consumer sentiment, the worst reading in 0:01:08.880 --> 0:01:11.760 terms of consumer sentiment in almost five years. But that 0:01:11.920 --> 0:01:14.760 fuels the desire and the hope that the Federal Reserve 0:01:14.920 --> 0:01:17.680 might indeed start to cut rates to support the economy. 0:01:17.840 --> 0:01:20.480 We're up three tens percent, but some notable names on 0:01:20.520 --> 0:01:23.040 the downside, and you're looking at one of them. 0:01:23.360 --> 0:01:26.759 Yeah, very quickly NXP Semiconductor. It's a story you may 0:01:26.760 --> 0:01:29.960 have missed among everything else. The stock was down significantly, 0:01:30.040 --> 0:01:32.800 paired some of the decline to six percent. Two pieces 0:01:32.840 --> 0:01:36.760 of news tariffs impact, an uncertain environment, hitting the outlook 0:01:36.920 --> 0:01:40.120 and performance in the quarter, key supply to the automotive sector, 0:01:40.360 --> 0:01:45.319 but also CEO Sivert's retiring and then promoting from within 0:01:45.440 --> 0:01:47.160 one that you want to keep an eye on key 0:01:47.240 --> 0:01:48.600 name in the supply chain. 0:01:48.440 --> 0:01:49.400 Carring you certainly do. 0:01:49.560 --> 0:01:52.120 Meanwhile, let's return to the White House because it is 0:01:52.160 --> 0:01:53.400 taking aim at Amazon. 0:01:54.280 --> 0:01:56.120 I just got off the Finn with the President about 0:01:56.120 --> 0:01:59.840 iaman Zan's announcement. This is a heartstyle in pull it 0:01:59.880 --> 0:02:03.440 a act by Amazon. It's another reason why we are 0:02:03.760 --> 0:02:06.640 on shoring critical supply chains here at home to shore 0:02:06.720 --> 0:02:10.200 up our own critical supply chain and boost our own manufacturing. 0:02:10.760 --> 0:02:13.840 The comments weighed on shares as the tech giant gears 0:02:13.919 --> 0:02:16.440 up to report results on Thursday after the closing bell. 0:02:16.720 --> 0:02:19.000 Numa's Kaylee Lines is said to break down the story. 0:02:19.120 --> 0:02:21.280 All of this based on reporting coming. 0:02:21.520 --> 0:02:23.079 From another source. 0:02:23.360 --> 0:02:26.560 Amazon has since denied that it was ever under consideration 0:02:26.639 --> 0:02:28.960 for the main site, that they would make it transparently 0:02:29.000 --> 0:02:31.760 clear that what taris add to the price of goods. 0:02:31.840 --> 0:02:34.680 Just give us the background, Yeah, Caroline. 0:02:34.680 --> 0:02:36.799 The White House was responding here to a report from 0:02:36.800 --> 0:02:39.120 punch Bowl News citing a source familiar with the matter 0:02:39.200 --> 0:02:42.080 that suggested Amazon was soon going to post a separate 0:02:42.160 --> 0:02:45.480 line item for the tariff charge on its website, akin 0:02:45.520 --> 0:02:48.000 to you, for example, what we've since seen Shean or 0:02:48.040 --> 0:02:51.480 Temu doing with import charges. Now the US has ended 0:02:51.480 --> 0:02:55.200 that demonimous exemption on cheaper goods coming out of China 0:02:55.240 --> 0:02:58.080 and Hong Kong. Now Amazon says that that was actually 0:02:58.120 --> 0:03:00.640 never under consideration for its website. 0:03:00.639 --> 0:03:01.560 That yes, the. 0:03:01.560 --> 0:03:04.360 Ultra low cost Amazon Hall team did discuss this, but 0:03:04.440 --> 0:03:08.120 ultimately it was never implemented on any Amazon property. So 0:03:08.200 --> 0:03:11.280 that hostile and political act that Caroline Lovitt referred to 0:03:11.360 --> 0:03:14.120 an act that not actually has been taken. And perhaps 0:03:14.160 --> 0:03:17.280 Amazon in this way is not yet actually going sideways 0:03:17.560 --> 0:03:19.840 with the White House. But the criticism of the company 0:03:19.840 --> 0:03:23.079 that Caroline lobbied today did not end there. I would 0:03:23.120 --> 0:03:26.320 note she also referred to Amazon as a China aligned 0:03:26.360 --> 0:03:29.240 company and referred back to a Reuters report going back 0:03:29.280 --> 0:03:32.880 to twenty twenty one about Amazon partnering with a Chinese 0:03:32.880 --> 0:03:37.520 propaganda arm. Essentially that Amazon allowed itself to respond to 0:03:37.560 --> 0:03:40.000 an edict from Beijing or cooperated with an edict from 0:03:40.040 --> 0:03:42.560 Beijing around negative views of a book published by the 0:03:42.640 --> 0:03:46.480 Chinese government of speeches from Chinese President Shi jin Ping, 0:03:46.600 --> 0:03:49.600 and she really pointed to that as an example of 0:03:49.640 --> 0:03:52.080 the China alignment of this company. She also, as we 0:03:52.160 --> 0:03:54.600 heard her say there, talked about the importance of turning 0:03:54.600 --> 0:03:58.400 away from China buying American and on shoring American manufacturing. 0:03:58.440 --> 0:04:00.560 So what this means for the company's relationship with this 0:04:00.600 --> 0:04:03.880 White House overall obviously a question now after it has 0:04:03.880 --> 0:04:07.800 gone to great links to ingratiate itself with this administration. Remember, 0:04:07.840 --> 0:04:11.600 Amazon donated a million dollars to Trump's inaugural committee. Jeff 0:04:11.600 --> 0:04:14.840 Bezos himself attended that inauguration, has spent time with President 0:04:14.880 --> 0:04:18.159 Trump trying to fortify their relationship, and that relationship the 0:04:18.200 --> 0:04:21.120 presidents in Bezos is one that Carolinelevitt said she did 0:04:21.120 --> 0:04:21.640 not want. 0:04:21.440 --> 0:04:22.719 To speak to this morning. 0:04:23.160 --> 0:04:25.839 The chairman and of course founder of the business, Katie Linesby, 0:04:25.920 --> 0:04:28.360 thank you. Let's turn our attention to another key story, 0:04:28.400 --> 0:04:31.200 Spotify shares as slipping off of the company reported operating 0:04:31.200 --> 0:04:33.800 profit that fell short of anast estimates that that's even 0:04:33.839 --> 0:04:37.279 a subscriber numbers. They grew here to discuss New Meg's 0:04:37.320 --> 0:04:40.040 Ashley Common and really felt that there was a lot 0:04:40.040 --> 0:04:43.120 of good news that ultimately was outshone by a profit hit. 0:04:43.440 --> 0:04:46.000 Yeah, I think investors are just a little bit jittery. 0:04:46.240 --> 0:04:49.840 They're seeing Spotify forecast potentially a miss in their estimates 0:04:49.839 --> 0:04:52.919 for gross profit margin as well as monthly active users. 0:04:53.000 --> 0:04:55.200 So I think they're just kind of like, is this 0:04:55.760 --> 0:04:58.320 going to be the future and the trend or is 0:04:58.360 --> 0:05:01.200 this just a one off kind of moment, And Spotify 0:05:01.200 --> 0:05:02.960 says this is a one off moment of course. 0:05:03.600 --> 0:05:06.040 Actually, the long term Spotify wants you to think about 0:05:06.160 --> 0:05:11.200 is a world where they move into podcasts, audio video more, 0:05:11.520 --> 0:05:13.760 and they might also raise prices along the way. 0:05:14.440 --> 0:05:14.960 Exactly. 0:05:15.080 --> 0:05:18.280 So, over the past couple of years, they've branched into audiobooks. 0:05:18.360 --> 0:05:21.080 They're now launching this creator partner program where they're trying 0:05:21.080 --> 0:05:24.280 to get essentially YouTubers and video podcasters to put videos 0:05:24.279 --> 0:05:27.560 on the service and compensate them based on consumption rather 0:05:27.600 --> 0:05:30.480 than advertisements. So they're really trying to pioneer some new 0:05:30.520 --> 0:05:32.520 format and diversify away from. 0:05:32.440 --> 0:05:36.359 Music bloomber has actually Camen thank you very much. In 0:05:36.400 --> 0:05:39.520 other earnings, new shares of so Far are higher after 0:05:39.560 --> 0:05:42.640 the fintech company raised its full year forecast. So Far 0:05:43.000 --> 0:05:46.000 CEO Anthony Nodo is here with us. Good morning to you, 0:05:46.080 --> 0:05:48.400 mister Noto. You know, I think there was a lot 0:05:48.440 --> 0:05:51.560 of focus in the quarter on the momentum from the 0:05:51.600 --> 0:05:56.440 loan platform business, particularly the interest and demand from private credit. 0:05:56.880 --> 0:05:59.719 Talks me more about that, Anthony, and where you see 0:05:59.760 --> 0:06:01.080 that business going forward. 0:06:02.160 --> 0:06:04.680 Sure, we had a tremendous quarter in a great start 0:06:04.720 --> 0:06:08.000 to twenty twenty five, with thirty three percent year of 0:06:08.040 --> 0:06:10.320 your growth in total revenue to seven hundred and seventy 0:06:10.400 --> 0:06:13.000 one million dollars, and that was up thirty three percent, 0:06:13.040 --> 0:06:16.839 our fastest growth in five quarters. The loan platform business, 0:06:16.880 --> 0:06:19.560 as you mentioned, was a key driver of that very 0:06:19.600 --> 0:06:23.320 strong results there. We basically get paid a fee by 0:06:23.360 --> 0:06:26.640 these asset buyers that want us to underwrite loans against 0:06:26.640 --> 0:06:30.400 a specific credit box that they outline. We leverage our 0:06:30.480 --> 0:06:35.080 underwriting capabilities, our marketing capabilities, and our servicing capabilities. 0:06:34.440 --> 0:06:35.720 And we get paid a fee for that. 0:06:36.080 --> 0:06:38.520 It's something we started about a year ago. We've already 0:06:39.000 --> 0:06:42.800 originated six billion dollars of loans in that particular business, 0:06:43.160 --> 0:06:45.400 and in the quarter is about ninety six million dollars 0:06:45.480 --> 0:06:47.920 or revenue, so it's almost four million dollars on an 0:06:47.920 --> 0:06:51.039 analyzed basis. We expected to be over a billion dollars 0:06:51.120 --> 0:06:53.840 or third billion dollar business over the course of time 0:06:53.920 --> 0:06:56.960 as the demand for that product continues to increase. One 0:06:57.080 --> 0:06:59.240 area that we haven't tapped into yet but that we 0:06:59.279 --> 0:07:03.160 will is taking some of the loans that we decline. 0:07:03.400 --> 0:07:05.440 We decline about one hundred million dollars of loans a 0:07:05.520 --> 0:07:09.279 year and making those available through the loan platform business 0:07:09.320 --> 0:07:11.720 as well for those that want a near prime type 0:07:11.760 --> 0:07:13.520 of credit asset. 0:07:15.080 --> 0:07:17.040 The other area you want to tap is crypto, right. 0:07:17.040 --> 0:07:20.720 You alluded to entering into stable coin markets to us. 0:07:20.720 --> 0:07:24.840 Moll Yeah, We're very fortunate in that we've built. This 0:07:24.880 --> 0:07:28.360 is another record quarter for member growth. We're at eleven 0:07:28.360 --> 0:07:30.840 million members now. We add an eight hundred thousand members 0:07:30.880 --> 0:07:34.080 in the quarter and one point two million products up 0:07:34.120 --> 0:07:37.520 thirty four percent, up thirty five percent, respectively. We want 0:07:37.560 --> 0:07:40.480 to continue to give our members a full suite of 0:07:40.480 --> 0:07:44.080 financial services products. SOFI Money is the largest product that 0:07:44.120 --> 0:07:46.400 we have today. It was up forty one percent, the 0:07:46.440 --> 0:07:49.560 pilots are up fifty two percent. Our this business are 0:07:49.560 --> 0:07:52.040 an acceleration up twenty one percent, and we expect that 0:07:52.080 --> 0:07:55.720 acceleration to continue. Crypto would be another asset class to 0:07:55.720 --> 0:07:58.840 add to the invest business, allowing people to buy, sell, 0:07:58.880 --> 0:08:01.560 and hold crypto coin. It's something we used to do 0:08:02.080 --> 0:08:05.160 and it was eliminated because of our bank license. But 0:08:05.240 --> 0:08:07.920 now that OCC has put out an interpretive letter that 0:08:08.000 --> 0:08:10.840 allows that business to be part of a bank again. 0:08:11.000 --> 0:08:15.320 So we'll continue to evaluate the landscape for changing regulatory environment. 0:08:15.560 --> 0:08:18.400 But we'd like to not just only offer crypto for buy, 0:08:18.440 --> 0:08:21.520 sell and hold, but also have it transcend all of 0:08:21.520 --> 0:08:25.040 our businesses, so using blockchain and crypto in the lending area, 0:08:25.200 --> 0:08:29.160 the spending area, in addition to our third party technology 0:08:29.160 --> 0:08:33.680 platform services offering those types of infrastructure services to financial 0:08:33.679 --> 0:08:34.520 service companies. 0:08:35.000 --> 0:08:37.680 Anthony, you've got a really optimistic tone, and of course 0:08:37.679 --> 0:08:39.960 you'd be, and you raised this on a day when 0:08:39.960 --> 0:08:43.720 consumer sentiment is basically the lowest in five years. How 0:08:43.760 --> 0:08:46.240 do you have that confidence that consumers are going to 0:08:46.280 --> 0:08:48.640 continue to be of demand for you? 0:08:49.640 --> 0:08:53.040 Yeah, we're seeing really strong demand for our goods and services. 0:08:53.559 --> 0:08:56.120 Our customer is a higher end customer than the typical 0:08:56.240 --> 0:08:59.040 average American about one hundred and fifty thousand dollars in 0:08:59.120 --> 0:09:02.200 household and come and a credit score on average at 0:09:02.240 --> 0:09:05.720 seven hundred and fifty. From a FICO standpoint, we're taking 0:09:05.720 --> 0:09:08.240 share from the five largest banks in the country, so 0:09:08.720 --> 0:09:11.640 we're not as dependent on the cyclical environment for our 0:09:11.679 --> 0:09:15.240 growth because we're really a secular grower. That said, you know, 0:09:15.320 --> 0:09:17.920 our credit performance has also been very strong, which is 0:09:18.679 --> 0:09:21.920 subject to the macroeconomic environment. But we saw in our 0:09:21.920 --> 0:09:25.000 fifth quarter in a row of improvement in ninety data delinquencies, 0:09:25.280 --> 0:09:28.680 we saw continued improvement our net charge offs. So overall, 0:09:28.679 --> 0:09:31.400 the consumer's looking quite strong as it relates to credit 0:09:31.720 --> 0:09:34.360 and the demand for our other products like SOFI Money 0:09:34.400 --> 0:09:37.920 and Sofi invest I mentioned deposit work quite quite meaningfully 0:09:37.960 --> 0:09:41.240 as well. The last data point is debit spending. We're 0:09:41.280 --> 0:09:44.320 annuallyzing about fourteen billion dollars of debit spending now from 0:09:44.360 --> 0:09:46.960 our installed base and that's been quite strong also. 0:09:47.600 --> 0:09:50.560 So you raise your guidance but really only reflecting the 0:09:50.559 --> 0:09:54.160 beat in this court are just gone, So why not 0:09:54.520 --> 0:09:57.040 raise more broadly? Are you being conservative here? 0:09:57.800 --> 0:09:58.000 Yeah? 0:09:58.160 --> 0:10:00.120 Well, we raised not just for what we beat. We 0:10:00.160 --> 0:10:02.240 also raise for the full year, and our guidance for 0:10:02.360 --> 0:10:06.400 Q two is above consensus on both revenue and profitability. 0:10:07.200 --> 0:10:09.800 You know, we have really strong momentum where we set 0:10:09.920 --> 0:10:11.600 on the call that we're going to step on the 0:10:11.640 --> 0:10:14.960 gas and accelerate our rate of product introductions and the 0:10:14.960 --> 0:10:18.079 iteration on our existing products. We feel like our competitive 0:10:18.080 --> 0:10:21.040 position is so strong and the opportunity is so significant 0:10:21.040 --> 0:10:23.880 in front of us that we should accelerate our level 0:10:23.920 --> 0:10:27.360 of investment and rate of innovation. So we feel great 0:10:27.400 --> 0:10:28.840 about it, and we want to make sure we can 0:10:28.880 --> 0:10:31.000 get a compound that these great growth rates of over 0:10:31.080 --> 0:10:32.280 thirty percent for a. 0:10:32.200 --> 0:10:35.120 While, anthy I like to check out what you're saying 0:10:35.160 --> 0:10:37.040 on social media as much as what you said in 0:10:37.040 --> 0:10:39.880 the earnings called transcript And you always use the phrase 0:10:40.400 --> 0:10:44.640 rapid innovation. Where are the rapid innovations And is that 0:10:44.720 --> 0:10:46.640 something you guys are focused on doing in house or 0:10:46.720 --> 0:10:47.920 is M and A going to be a part of 0:10:47.920 --> 0:10:49.880 your toolkit for the balance of the year. 0:10:50.920 --> 0:10:53.200 All of our products, we want them to be the fastest, 0:10:53.280 --> 0:10:55.240 We want them to be the most convenient, to have 0:10:55.320 --> 0:10:58.719 the best selection and the best content. So we're continuously 0:10:58.800 --> 0:11:01.640 iterating on each one of our products against those four 0:11:01.679 --> 0:11:04.760 dimensions in addition to making the products better when they're 0:11:04.840 --> 0:11:07.760 used together. As an example of that, we introduced a 0:11:07.960 --> 0:11:11.679 subscription product called Sofi Plus. It's the best value in 0:11:11.760 --> 0:11:15.040 America for a financial subscription product at over one thousand 0:11:15.040 --> 0:11:17.560 dollars of value. You pay ten dollars a month for 0:11:17.720 --> 0:11:20.400 and it gives you access to a number of different 0:11:20.440 --> 0:11:22.640 benefits that you would now otherwise get if you didn't 0:11:22.920 --> 0:11:26.320 use that product. Ninety percent of our existing members have 0:11:26.480 --> 0:11:29.040 signed up. Of those that have signed up for the product, 0:11:29.120 --> 0:11:32.080 ninety percent are from our existing member base, which says 0:11:32.120 --> 0:11:34.720 people want to use more of our products that we offer, 0:11:35.000 --> 0:11:37.000 and this product makes it more accessible for them to 0:11:37.040 --> 0:11:39.120 be able to get those great benefits and using our 0:11:39.160 --> 0:11:43.040 products together. So a really encouraging sign. And against the 0:11:43.080 --> 0:11:45.079 people that are already our members that are taking out 0:11:45.120 --> 0:11:48.160 Sofi Plus, it's actually triggering them taking out a third 0:11:48.200 --> 0:11:52.120 product thirty percent of the time. So pretty strong performance 0:11:52.160 --> 0:11:55.400 from that new product, which is an iteration that we're 0:11:55.480 --> 0:11:58.439 constantly trying to drive across the five dimensions that I mentioned. 0:12:00.640 --> 0:12:04.920 What's your interpretation of how this administration is looking at regulation, 0:12:05.240 --> 0:12:07.840 looking at supporting the crypto industry as it relates to you, 0:12:08.160 --> 0:12:10.040 But I think fintech broadly is a bit more under 0:12:10.080 --> 0:12:11.079 the microscope, Anthony. 0:12:12.240 --> 0:12:14.240 The early signs in the first one hundred days is 0:12:14.280 --> 0:12:18.040 that it is a more favorable environment from a regulatory standpoint. 0:12:18.400 --> 0:12:20.520 It's really critical that we can teue to provide a 0:12:20.600 --> 0:12:23.520 safe and secure way for our members to use our 0:12:23.559 --> 0:12:27.040 financial services products, and that is our priority, regardless of regulation. 0:12:27.480 --> 0:12:29.839 So we want to have great NPS scores, We want 0:12:29.840 --> 0:12:32.760 to be a trusted household brand name. But it does 0:12:32.840 --> 0:12:35.000 feel like the regulatory environment is going to allow us 0:12:35.000 --> 0:12:37.520 to offer more products to our members that they need, 0:12:37.880 --> 0:12:39.800 you know. As an example, you know, we'd love to 0:12:39.840 --> 0:12:43.680 be able to do secure lending off to cryptocurrency, which 0:12:43.760 --> 0:12:45.960 I believe it would be a great product, lower cost 0:12:46.000 --> 0:12:48.480 of debt for our members, you know, in addition to that, 0:12:49.000 --> 0:12:51.800 potentially being able to offer a stable coin that could 0:12:51.840 --> 0:12:54.920 have some type of interest bearing element to it and 0:12:55.080 --> 0:12:56.720 being used for payments. 0:12:57.679 --> 0:13:00.000 Anthony Notto, So far ceo. Good to have you back 0:13:00.040 --> 0:13:01.439 with us here on Bloomberg Technology. 0:13:01.440 --> 0:13:02.319 Thank you very much. 0:13:03.520 --> 0:13:06.160 Okay, some breaking news crossing the Bloomberg termin or. Russian 0:13:06.559 --> 0:13:11.000 President Vladimir Putin is insisting that Russia must take control 0:13:11.440 --> 0:13:16.800 of four regions of Ukraine that it doesn't currently fully 0:13:16.880 --> 0:13:20.720 occupy as part of any potential agreement to end the 0:13:20.760 --> 0:13:24.439 war in Ukraine. This is Bloomberg reporting, citing sources. Remember 0:13:24.480 --> 0:13:27.600 that the Administration of the United States has an April 0:13:27.679 --> 0:13:31.920 thirtieth target deadline for a ceasefire, as we report, the 0:13:32.000 --> 0:13:34.960 demand that the Russians are making deals a blow to 0:13:35.160 --> 0:13:40.080 President Trump's efforts to reach that cease fire negotiations. Bloomberg 0:13:40.200 --> 0:13:43.000 is reporting at an impass for now, but according to sources, 0:13:43.240 --> 0:13:46.439 Putin wanting to take control of four regents in Ukraine. 0:13:46.480 --> 0:13:46.920 Caroline. 0:13:47.160 --> 0:13:48.720 Now coming up President Trump. 0:13:48.840 --> 0:13:51.440 Well, he's also said to offer some taroff relief for 0:13:51.520 --> 0:13:54.440 Automaker's ed We'll have more on that next, but let's 0:13:54.440 --> 0:13:56.520 just get back to the fintech side of the space. 0:13:56.760 --> 0:13:59.160 PayPal are eight ten percent is out of volatile day 0:13:59.160 --> 0:14:02.720 of trade. It left it's full y air. Forecast for earnings 0:14:02.880 --> 0:14:07.040 unchanged unlike so far because they say they have uncertainty 0:14:07.040 --> 0:14:09.960 in the global macro environment, despite of course recording a 0:14:09.960 --> 0:14:11.000 pretty strong first quarter. 0:14:11.480 --> 0:14:12.640 This is Bloomberg technology. 0:14:22.400 --> 0:14:25.440 President Trump is set to offer some tariff reprieve for 0:14:25.520 --> 0:14:29.000 automakers lifting some levees on foreign parts for cars and 0:14:29.040 --> 0:14:31.600 trucks made in the US. The move comes as President 0:14:31.600 --> 0:14:34.160 Trump is set to travel to Michigan for a rally 0:14:34.320 --> 0:14:37.000 to mark his first one hundred days in office. For more, 0:14:37.080 --> 0:14:39.520 let's get out to Detroit and Bloomberg's David Welsh on 0:14:39.560 --> 0:14:43.960 Bloomberg Technology. We're probably principally interested in the ev supply chain, David, 0:14:44.000 --> 0:14:47.040 But what do we know about this levee reprieve and 0:14:47.080 --> 0:14:49.080 how does it impact the automakers you cover? 0:14:50.960 --> 0:14:54.160 So we know so far as that they will do something, 0:14:54.200 --> 0:14:57.360 probably to give a reprieve on tariff's on parts, which 0:14:57.440 --> 0:14:59.680 is one of the most difficult things for the administration 0:15:00.200 --> 0:15:03.680 anyone to calculate. They were going to tariff the non 0:15:03.840 --> 0:15:08.040 US content, even of vehicles that qualified for a teriffrey status, 0:15:08.080 --> 0:15:11.240 say under USMCA, and then they also are going to 0:15:11.280 --> 0:15:14.720 try to do something that it's called de stacking, where 0:15:14.760 --> 0:15:17.880 you remove tariffs or you give the automakers a credit 0:15:17.960 --> 0:15:21.840 back if they had already paid a tariff on medals 0:15:21.960 --> 0:15:24.080 used in a part that was coming across the border. 0:15:24.120 --> 0:15:27.160 So I think, for example of say a hood on 0:15:27.240 --> 0:15:30.280 a vehicle, if a company was paying a tariff on 0:15:30.320 --> 0:15:33.200 that because it's steel of twenty five percent, and another 0:15:33.240 --> 0:15:35.400 twenty five percent because it's a part that'd be fifty percent. 0:15:35.440 --> 0:15:37.920 So they're trying to eliminate that sort of double charge. 0:15:38.240 --> 0:15:39.960 But the bigger one would be if they give relief 0:15:39.960 --> 0:15:42.560 on parts. Now, the problem here at is we don't 0:15:42.600 --> 0:15:44.920 know the details of it, which is why when General 0:15:44.960 --> 0:15:47.400 Motors suspended guidance, they didn't give us new guidance. They 0:15:47.440 --> 0:15:49.880 may do that Thursday, but even I don't think they 0:15:49.880 --> 0:15:52.080 completely know yet because they need the details. So the 0:15:52.120 --> 0:15:54.960 car companies themselves are looking at this and saying, Okay, 0:15:55.000 --> 0:15:57.800 we need to know exactly what the administration is going 0:15:57.800 --> 0:15:59.480 to do with all of these tariffs before they can 0:15:59.520 --> 0:16:02.200 even give any kind of financial projections and understand the 0:16:02.200 --> 0:16:03.240 impact on their business. 0:16:03.480 --> 0:16:07.240 Yeah, briefly, whiplash, we're not seeing much well resolved for 0:16:07.280 --> 0:16:10.440 the stocks. We're still underwater on GM, for example, What 0:16:10.640 --> 0:16:13.000 more clara are you're expecting to get from any of 0:16:13.040 --> 0:16:14.120 these CEOs at this moment. 0:16:15.560 --> 0:16:17.400 I think they really want to know just how much 0:16:17.400 --> 0:16:19.920 of the parts themselves will get tariffs, and if there's 0:16:19.920 --> 0:16:25.320 also any change to the vehicles themselves. GM still antis. 0:16:25.360 --> 0:16:28.160 They bring in some very important vehicles from Canada and Mexico. 0:16:28.320 --> 0:16:31.000 GM brings in it's one of its best sellers, entry 0:16:31.040 --> 0:16:34.440 level vehicles from Korea, or any of that change. So, 0:16:35.800 --> 0:16:38.240 you know, the administration has said that they're for companies 0:16:38.240 --> 0:16:39.920 that make products here, they're going to give them a break. 0:16:39.960 --> 0:16:41.520 But we don't know exactly what it is yet, and 0:16:41.960 --> 0:16:43.360 I think parts is really the big one. 0:16:43.360 --> 0:16:45.760 Though Tesla's actually off by one and a half percent 0:16:45.800 --> 0:16:47.560 amid all of this news. David Welch, we thank you 0:16:47.640 --> 0:16:49.680 very much. I meanwhile, sticking with earnings and just the 0:16:49.680 --> 0:16:51.920 broader tech landscape right now, how to invest in it? 0:16:51.960 --> 0:16:54.240 Michael Reynolds is with US vice president of investment Strategy 0:16:54.240 --> 0:16:57.120 at glen Mead managing four to five point six billion 0:16:57.160 --> 0:17:02.080 dollars in assets, and look, the ongoing changes coming from 0:17:02.120 --> 0:17:05.320 the administration is exhausting for investors and in CEOs and 0:17:05.359 --> 0:17:08.120 anyone to keep track of. How therefore, are you're looking 0:17:08.119 --> 0:17:11.080 towards perhaps big tech earnings coming Wednesday Thursday, and how 0:17:11.080 --> 0:17:11.959 you price any of it? 0:17:13.920 --> 0:17:16.199 Yeah, so we're looking at tech perhaps for Q one 0:17:16.440 --> 0:17:19.280 putting fifteen percent earnings growth on a your ever year basis, 0:17:19.280 --> 0:17:21.840 But we're sort of in this situation where investors are 0:17:21.880 --> 0:17:23.679 asking them sells, well, does it really matter all that 0:17:23.760 --> 0:17:25.480 much what the results are when you know there's really 0:17:25.520 --> 0:17:28.200 big changes coming on the horizon when it comes to tariffs, 0:17:28.200 --> 0:17:30.720 and electronics aren't really exempt from that. I think a 0:17:30.760 --> 0:17:32.840 good analogy for that I've been using is actually a 0:17:32.840 --> 0:17:35.480 baseball analogy. You know, just say your pitcher got through 0:17:35.480 --> 0:17:38.120 a really tough inning. Well, okay, that's great, We're glad 0:17:38.119 --> 0:17:40.399 you did that, but their sluggers up next inning and 0:17:40.440 --> 0:17:42.159 you got to get through that. It's that sort of 0:17:42.280 --> 0:17:44.880 next piece when there's something on the horizon that really 0:17:44.960 --> 0:17:46.840 is a big risk that you want to hear more. 0:17:46.760 --> 0:17:47.840 From these C suites about. 0:17:47.920 --> 0:17:50.240 So we think it's actually more important to be parsing 0:17:50.280 --> 0:17:53.719 through the guidance and the statements out of C suites 0:17:53.800 --> 0:17:55.159 on what they see for the rest of the year, 0:17:55.240 --> 0:17:57.280 rather than the actual results themselves. 0:17:57.280 --> 0:17:57.840 From Q one. 0:17:58.000 --> 0:18:00.480 Yeah, for example, Apple likely to get a lot of 0:18:00.520 --> 0:18:03.280 pull forward as consumers rush to buy their phones before 0:18:03.320 --> 0:18:06.040 perhaps prices went up. What do you think in terms 0:18:06.119 --> 0:18:09.239 of the narrative we've got of steering into India in 0:18:09.320 --> 0:18:12.360 terms of supply chain. Our CEO is managing to get 0:18:12.359 --> 0:18:13.480 ahead of some of these names. 0:18:15.240 --> 0:18:19.920 Look, there's no shortage of businesses being dynamic in the 0:18:20.000 --> 0:18:22.920 US and that's something that you see really across the board, 0:18:23.000 --> 0:18:24.959 and tech is really behaving that way as well, perhaps 0:18:25.000 --> 0:18:27.200 trying to get ahead of some of these supply chain 0:18:27.240 --> 0:18:31.520 reconfigurations that's happening in real time, and I think investors 0:18:31.560 --> 0:18:33.879 are also thinking through when consumers may actually start to 0:18:33.960 --> 0:18:36.879 see these prices start to arrive in the stores with 0:18:36.920 --> 0:18:40.080 their tariff impacts, and electronics are probably some of the 0:18:40.119 --> 0:18:42.240 first places you could see it because a lot of 0:18:42.280 --> 0:18:46.040 our electronics come from abroad and there's actually decent turnover 0:18:46.080 --> 0:18:49.320 in terms of inventory. When it comes to electronics, there 0:18:49.359 --> 0:18:51.320 is a little bit of a reprieve because we got 0:18:51.359 --> 0:18:54.720 that exemption of some electronic parts for tech, which helps, 0:18:54.720 --> 0:18:57.200 but it's probably not going to be all encompassing. So 0:18:57.240 --> 0:19:00.640 it's actually electronics alongside apperil and toy and games, which 0:19:00.680 --> 0:19:02.880 could be one of the first places consumers could start 0:19:02.880 --> 0:19:05.080 seeing those higher prices, and it's going to be really 0:19:05.119 --> 0:19:06.960 important how they react to that. Are they going to 0:19:06.960 --> 0:19:09.240 balk at those prices or are they going to consume 0:19:09.320 --> 0:19:09.800 no matter. 0:19:09.640 --> 0:19:12.760 What, Mike, what you just said a moment ago. With 0:19:12.880 --> 0:19:16.440 big tech focus on guidance, what happens if big tech 0:19:16.480 --> 0:19:19.520 doesn't give us any. 0:19:19.520 --> 0:19:23.000 Well, that's just a really uncertain environment. And uncertainty has 0:19:23.040 --> 0:19:24.760 been the name of the game for all of April 0:19:25.240 --> 0:19:30.560 for certain, and investors have been repricing I think the 0:19:30.640 --> 0:19:34.320 evaluation multiples they've been awarding to the magnificent seven megacab 0:19:34.400 --> 0:19:36.160 tech whatever you want to call it, those. 0:19:36.000 --> 0:19:37.080 Have come down a lot. 0:19:37.119 --> 0:19:40.040 But rs by rs mist those are not actually really 0:19:40.119 --> 0:19:43.000 within the vicinity of fair value just yet, so you 0:19:43.040 --> 0:19:44.440 could start to see a little bit of a risk 0:19:44.480 --> 0:19:47.040 premium baked in if investors are still asking a lot 0:19:47.080 --> 0:19:48.880 of questions that can't be answered. 0:19:48.600 --> 0:19:52.760