WEBVTT - Tech Stocks Bounce Back and Apple's iPhone 16 0:00:01.680 --> 0:00:02.400 From Mahard. 0:00:02.520 --> 0:00:06.960 We're Innovation, Money and Power Collie in Silicon Vallet NBN. 0:00:07.280 --> 0:00:11.320 This is Bloomberg Technology with Caroline Hyde and Ed Louvelove. 0:00:27.920 --> 0:00:30.800 I met Ludlower Caroline Hide in New York. Welcome to 0:00:30.880 --> 0:00:35.680 a special edition of Bloomberg Technology Live from Kubertina, California. 0:00:36.159 --> 0:00:40.120 It's glow time and the emphasis Apple's most important event 0:00:40.200 --> 0:00:42.840 of the year, the tech giant. I'm veiling some major 0:00:43.000 --> 0:00:46.199 changes to its product line up, a big focus on 0:00:46.360 --> 0:00:50.479 artificial intelligence and new generation of iPhones and changes to 0:00:50.600 --> 0:00:53.600 wearables coming out throughout the hour. We're joined by key 0:00:53.600 --> 0:00:57.880 guests Carolina Milanacy of Creative Strategies, plus a conversation with 0:00:58.040 --> 0:01:01.280 Ray Wang of Constellation Research. It's Caro, what are you 0:01:01.280 --> 0:01:01.720 looking at? 0:01:02.080 --> 0:01:05.120 Here's what else is coming up. Ed tech stocks are 0:01:05.200 --> 0:01:08.400 bouncing back following their biggest weekly decline in nearly two 0:01:08.680 --> 0:01:12.160 years last Oracle reporting earnings after the closing belt. Will 0:01:12.200 --> 0:01:15.840 ai compute demand support the stocks out performance this year, 0:01:16.280 --> 0:01:19.520 and we discuss AI's potential in biology with the found 0:01:19.520 --> 0:01:22.280 out of Chai Discovery, which just received backing from Open 0:01:22.319 --> 0:01:24.920 ai butt. First, we check in on that so called 0:01:25.000 --> 0:01:27.760 bounce back in the markets because it's dwindling ed. We 0:01:27.800 --> 0:01:30.160 are still up some four tenths of a percent, but 0:01:30.240 --> 0:01:31.840 we're not up to the extent that we were in 0:01:31.920 --> 0:01:35.759 earlier trading. We saw some dip buying most broadly. And look, 0:01:35.760 --> 0:01:38.240 this was a painful week that we come off. You 0:01:38.360 --> 0:01:41.200 remember that it was the worst week, worst day that 0:01:41.240 --> 0:01:43.040 we saw for certain numbers, like in video having its 0:01:43.040 --> 0:01:45.360 worst day since twenty twenty. Today we see just a 0:01:45.360 --> 0:01:46.760 little bit of dip by and it's only up a 0:01:46.760 --> 0:01:49.720 percentage point. Remember how much money, more than four hundred 0:01:49.760 --> 0:01:52.120 billion dollars lost on this one name alone over the 0:01:52.160 --> 0:01:54.640 course of what has been some five training days. But 0:01:54.680 --> 0:01:56.960 today it is all about Apple, and I want to 0:01:57.000 --> 0:01:59.240 look at how actually this is the worst performer on 0:01:59.280 --> 0:02:02.640 the nasac inte a points drag on the overall benchmark. 0:02:02.640 --> 0:02:05.120 We're off by one and a half percent. Looks so 0:02:05.280 --> 0:02:07.800 much to think about. You've got Webbush, You've got JP 0:02:07.920 --> 0:02:11.560 Morgan still reiterating that overweight, wanting to see dates, times, 0:02:11.600 --> 0:02:14.720 price points, but also what about Huawei's event that comes 0:02:14.800 --> 0:02:16.680 in a few hours time as well. Ed looks as 0:02:16.680 --> 0:02:18.560 though they're managing to get some pre orders locked in 0:02:18.560 --> 0:02:21.399 for their trifold phone. That's what's being reported. But get 0:02:21.440 --> 0:02:22.880 to it. What are we expecting from Apple? 0:02:22.960 --> 0:02:23.160 Right? 0:02:23.400 --> 0:02:26.160 Yeah, Apple session lows and it's actually closed down at 0:02:26.200 --> 0:02:29.960 twelve of the last seventeen product events. Here's what you 0:02:30.000 --> 0:02:32.120 need to know. Let's get to Bloomberg's Mark German, who's 0:02:32.160 --> 0:02:35.520 reported in detail what we expect, and Mark, I think 0:02:35.520 --> 0:02:38.320 we should start with the next generation iPhone because that's 0:02:38.400 --> 0:02:40.680 usually the point of emphasis. What have you learned our 0:02:40.720 --> 0:02:41.359 new iPhones? 0:02:41.400 --> 0:02:44.560 The big models this year will be the Pro versions. 0:02:44.600 --> 0:02:46.160 Not a lot of new stuff this year. 0:02:46.200 --> 0:02:48.800 So what we're focusing on as a design that essentially 0:02:48.840 --> 0:02:52.520 looks the same as last year's model. You're getting some 0:02:52.639 --> 0:02:56.440 camera upgrades. So on the Pro models right now you 0:02:56.440 --> 0:02:59.960 have a forty eight megapixel standard camera like the y 0:03:00.120 --> 0:03:00.720 angle camera. 0:03:00.800 --> 0:03:02.440 The other two or twelve megapixels. 0:03:02.639 --> 0:03:05.160 Now they're moving a second camera, the ultra wide angle 0:03:05.200 --> 0:03:06.440 to a forty eight megapixel. 0:03:06.880 --> 0:03:07.079 Right. 0:03:07.400 --> 0:03:09.680 You're also going to get this new button, a camera 0:03:09.760 --> 0:03:12.560 button that's going to come across all four models, the 0:03:12.600 --> 0:03:15.079 Pro versions and non pro versions. It's going to be 0:03:15.120 --> 0:03:17.560 a button on the right side and it's touch sensitive. 0:03:17.880 --> 0:03:19.280 You can swipe on it to zoom in. 0:03:19.320 --> 0:03:19.639 And out. 0:03:19.840 --> 0:03:22.280 You can touch it hard to take a picture, or 0:03:22.320 --> 0:03:24.600 you can lightly touch it to focus in on a subject. 0:03:24.800 --> 0:03:26.799 It's sort of like a button that you've been seeing 0:03:26.800 --> 0:03:29.919 on standard bslrs for many years now. 0:03:30.400 --> 0:03:31.280 The other changes on. 0:03:31.280 --> 0:03:34.440 The Pro models are slightly bigger displays and slimmer bezels 0:03:34.960 --> 0:03:37.320 A eighteen processors across the four. 0:03:37.080 --> 0:03:40.880 Models to help with Apple Intelligence. But overall, this is 0:03:40.960 --> 0:03:43.040 a very minor update year over year. 0:03:43.480 --> 0:03:45.200 The bigger changes are going to be coming to the 0:03:45.200 --> 0:03:48.240 company's other products, including the Apple Watch and the AirPods. 0:03:48.720 --> 0:03:51.360 We'll talk about the wearable side of the business. Apple 0:03:51.400 --> 0:03:54.200 Intelligence is really a focus as well, right, and the 0:03:54.280 --> 0:03:57.960 chronology of events is important because the new handsets will shit. 0:03:58.040 --> 0:04:00.440 What at the end of this month, This month you 0:04:00.440 --> 0:04:04.720 get iOS eighteen point one. What have you reported about 0:04:04.720 --> 0:04:07.640 the sort of staggered a rollout of Apple Intelligence. 0:04:08.760 --> 0:04:11.680 Yeah, so Apple Intelligence is not fully baked. I would 0:04:11.680 --> 0:04:13.279 say it's half baked. 0:04:12.960 --> 0:04:13.720 At this point, right. 0:04:13.760 --> 0:04:16.400 So the initial version of Apple Intelligence will come with 0:04:16.480 --> 0:04:20.359 things like the ability to summarize incoming notifications, the ability 0:04:20.400 --> 0:04:23.560 to record phone calls and get transcriptions, the ability to 0:04:23.720 --> 0:04:27.160 use AI to remove people or objects from certain photos. 0:04:27.480 --> 0:04:28.720 But over time, there's going to. 0:04:28.680 --> 0:04:32.159 Be more functionality coming, right, So the phones will initially 0:04:32.160 --> 0:04:34.720 ship without any Apple Intelligence. You'll get a seftwarepdate in 0:04:34.760 --> 0:04:37.320 October with those first few features I mentioned. You'll get 0:04:37.360 --> 0:04:41.279 another update in December with chat GPT integration, things like 0:04:41.360 --> 0:04:43.920 gen Moji's the ability to use AI to create Emoji's 0:04:44.480 --> 0:04:48.560 image playground for generative AI for image creation. And then 0:04:48.680 --> 0:04:51.360 next year, not until about March April, is when you're 0:04:51.400 --> 0:04:53.919 going to get the bigger enhancements to the theory that 0:04:54.000 --> 0:04:56.520 Apple talked about in June at their developer conference. Right, 0:04:56.560 --> 0:04:59.520 So this is a very staggered rollout. Now, let's be 0:04:59.600 --> 0:05:02.479 clear this is not by intention. This is because this 0:05:02.640 --> 0:05:05.000 was something that was mostly rushed together to get out 0:05:05.080 --> 0:05:08.000 for this year in response to the big AI praise 0:05:08.040 --> 0:05:09.599 you've seen from Globle, Meta and others. 0:05:10.440 --> 0:05:13.800 This is a global product, mark how much will this 0:05:13.960 --> 0:05:18.039 steady nerves of a sales decline in places such as China. 0:05:18.320 --> 0:05:20.920 Well, it is a global product, but they're banking heavily 0:05:20.960 --> 0:05:24.400 on Apple Intelligence to sell its global products. But Apple 0:05:24.440 --> 0:05:26.839 Intelligence is not going to be available in the nearly 0:05:26.880 --> 0:05:30.200 thirty countries that make up the European Union and It's 0:05:30.240 --> 0:05:32.680 also not going to be available in China, which is 0:05:32.720 --> 0:05:35.320 obviously one of their biggest markets and a big sales driver. 0:05:35.720 --> 0:05:35.920 Right. 0:05:35.960 --> 0:05:38.080 I've seen some analysts reports over the last twenty four 0:05:38.120 --> 0:05:41.240 hours indicating that you're going to see an iPhone supercycle, 0:05:41.480 --> 0:05:44.880 particularly due to strong sales in China due to Apple Intelligence. Well, 0:05:45.000 --> 0:05:47.240 Apple Intelligence has not coming to China at least for 0:05:47.279 --> 0:05:50.720 the foreseeable future, and there's going to be no iPhone supercycle, right. 0:05:50.920 --> 0:05:53.839 The things that sell iPhones in big quantities or bigger 0:05:53.880 --> 0:05:56.200 quantities than usual are major design changes. 0:05:56.400 --> 0:05:58.480 You're not seeing major design changes this year. 0:05:58.800 --> 0:05:59.000 Right. 0:05:59.200 --> 0:06:01.560 You're also not seeing as much tent of demand as 0:06:01.560 --> 0:06:03.520 you may have seen one or two years ago. You're 0:06:03.520 --> 0:06:06.040 seeing people hold onto their cash longer. So if you're 0:06:06.040 --> 0:06:09.080 anticipating an iPhone supercycle, I think you should rethink your 0:06:09.120 --> 0:06:12.479 expectations at least for this year. Where I think you 0:06:12.560 --> 0:06:15.560 will probably see an iPhone supercycle is maybe next year 0:06:15.640 --> 0:06:18.000 with the iPhone seventeen, which is going to have bigger 0:06:18.040 --> 0:06:20.560 design changes, and it's going to launch by the time 0:06:20.600 --> 0:06:23.479 that Apple Intelligence is fully rolled out and maybe even 0:06:23.520 --> 0:06:24.799 available on you in China. 0:06:25.040 --> 0:06:28.320 Bloomberg's Mark Gunman with the reporting of what we expect. 0:06:28.640 --> 0:06:31.920 Thank you very much. Let's get the analysis with Carolina 0:06:31.960 --> 0:06:35.159 Milianac creative strategies, principle and list, and let's just pick 0:06:35.240 --> 0:06:39.719 up where Mark left off. Do we expect a supercycle 0:06:40.080 --> 0:06:43.320 driven by the sixteen generation and Apple Intelligence? 0:06:43.440 --> 0:06:47.560 We do not, Okay, and exactly love Mark said. There 0:06:47.560 --> 0:06:49.919 are a couple of reasons. One is that normally you 0:06:49.960 --> 0:06:53.359 see a supercycle where there are great design changes that 0:06:53.600 --> 0:06:57.440 how do we're still drive sales of smartphones? The first 0:06:57.440 --> 0:07:02.040 thing that you see soft story, something that you discover afterwards, 0:07:02.120 --> 0:07:05.000 but what gets you into the store is the redesign. 0:07:05.120 --> 0:07:07.360 And the second part is the fact that right now 0:07:07.360 --> 0:07:10.880 Apple Intelligence is only available in English, and so that 0:07:11.160 --> 0:07:14.600 limits the amount of people that can take advantage of it. 0:07:14.800 --> 0:07:17.320 I find that a really interesting point because, for example, 0:07:17.360 --> 0:07:20.800 I look at IDC data, an IDC Data forecast that 0:07:20.840 --> 0:07:24.200 for four year twenty four iPhones basically flat, but next 0:07:24.240 --> 0:07:26.760 year looks a lot better. Is that just because the 0:07:26.840 --> 0:07:30.600 expectation is the consumer waits and sees how the rollout 0:07:30.640 --> 0:07:33.920 of Apple Intelligence goes before getting themselves a new iPhone. 0:07:34.040 --> 0:07:36.440 I think it's a bit of a delayed gratification as 0:07:36.480 --> 0:07:38.880 far as the psychle right the idea of that. In 0:07:38.920 --> 0:07:41.400 my opinion, there's going to be a long tail of 0:07:41.560 --> 0:07:45.200 sales that Apple Intelligence actually enables, but because of a 0:07:45.320 --> 0:07:47.760 rollout from a country perspective, the culture or part of 0:07:47.800 --> 0:07:51.880 Apple Intelligence. It's not just about being half baked or rushed. 0:07:52.040 --> 0:07:54.680 Is the fact that it takes a lot to actually 0:07:54.760 --> 0:07:59.400 make Apple Intelligence relevant at a country, language, and cultural level. 0:08:00.120 --> 0:08:02.680 Is not just a software feature. It takes up so 0:08:02.800 --> 0:08:06.200 much more that is really linked to the individual user, 0:08:06.360 --> 0:08:08.120 and so it's going to take longer. 0:08:09.080 --> 0:08:12.800 What about the good old other devices, what about the 0:08:12.840 --> 0:08:15.440 air pods? We are expecting a lot from the watches 0:08:15.480 --> 0:08:18.080 in terms of new innovation. There will that be enough 0:08:18.120 --> 0:08:19.720 to kick off a new buying cycle. 0:08:20.680 --> 0:08:23.040 I do think that other devices, there are rumors around 0:08:23.080 --> 0:08:27.200 the watch and also the AirPods will definitely contribute to 0:08:27.520 --> 0:08:32.640 Apple really pushing higher sale and revenue. Apple watches become 0:08:32.720 --> 0:08:35.160 so important to so many people, and not just the 0:08:35.280 --> 0:08:39.720 basic model that we respect redesigned with Apple Watch ten, 0:08:39.880 --> 0:08:43.920 but also with the Ultra that obviously has a much 0:08:43.960 --> 0:08:46.600 higher price point. I do think that that is going 0:08:46.679 --> 0:08:50.400 to get some excitement and maybe steal the show from 0:08:50.440 --> 0:08:53.040 a hardware design perspective today. 0:08:53.120 --> 0:08:57.560 I still want to understand the simple story. How does 0:08:57.600 --> 0:09:02.559 the consumer and every day technology user actually use Apple Intelligence? 0:09:02.679 --> 0:09:03.760 Do you know have the answer to that? 0:09:04.679 --> 0:09:09.200 For me, generally, AI is about taking more out of 0:09:09.240 --> 0:09:11.920 your device, whether it is you know, your iPhone or 0:09:11.960 --> 0:09:15.520 your Mac or something else. So from a user perspective, 0:09:15.559 --> 0:09:21.920 it's making your workload easier. Everything that you're doing should 0:09:21.960 --> 0:09:25.559 be streamlined because of intelligence. And then the other part 0:09:25.679 --> 0:09:28.880 with Apple is the fact that Apple knows me very 0:09:28.880 --> 0:09:30.719 well as a user. You know, they have a lot 0:09:30.760 --> 0:09:33.640 of information about me. So everything that Apple Intelligence is 0:09:33.679 --> 0:09:37.040 going to be able to give me is very contenstualized 0:09:37.240 --> 0:09:40.040 and personal. And I think that's how you get that 0:09:40.280 --> 0:09:45.880 emotional connection from the user to Apple Intelligence versus you know, 0:09:45.960 --> 0:09:50.040 we hear a lot from other vendors how you can 0:09:50.120 --> 0:09:53.559 plan your next vacation or you plan the next party. 0:09:53.840 --> 0:09:55.960 And I was jokingly saying I need to upgrade my 0:09:56.000 --> 0:09:59.720 life in order to take advantage of Apple Intelligence or 0:09:59.760 --> 0:10:02.720 any else, right, But no, it is really that is 0:10:02.840 --> 0:10:06.960 making using a phone that has become much more complex easier. 0:10:08.559 --> 0:10:13.200 To that point, Krolina, Apple uses are loyal. It is 0:10:13.240 --> 0:10:16.360 what makes the company the most valuable in the world 0:10:16.360 --> 0:10:20.360 from a public perspective. But there is Samsung that already 0:10:20.400 --> 0:10:23.360 has AI integrated. There is Huawei that's likely to follow 0:10:23.360 --> 0:10:26.079 in a few hours time with its trifold innovations and 0:10:26.559 --> 0:10:29.800 already pre selling. Are we ever going to be tempted 0:10:29.800 --> 0:10:33.760 elsewhere by AI innovations from other places other sources? 0:10:33.880 --> 0:10:37.079 I think the more you're going to get value from 0:10:37.520 --> 0:10:41.600 your data and your day to day experience, the harder 0:10:41.720 --> 0:10:45.040 is going to be for you to move. And we know, 0:10:45.160 --> 0:10:48.960 of course that Apple Intelligence is one part of the 0:10:49.120 --> 0:10:52.360 AI that gets delivered through Apple products. GBT is going 0:10:52.360 --> 0:10:55.360 to be another one, and going forward, I'm expecting to 0:10:55.360 --> 0:10:59.760 see Gemini as well on Apple products. So the user 0:11:00.240 --> 0:11:02.960 options to use avers, but then when it comes to 0:11:03.080 --> 0:11:08.040 the most personal experiences, the trust on the brand is 0:11:08.080 --> 0:11:09.439 what is going to keep them with. 0:11:09.440 --> 0:11:13.400 Our bare Krolyne a Milanacy, Prince blandalists that create a strategy, 0:11:13.440 --> 0:11:16.000 someone that looks at the market, but you're so hands 0:11:16.040 --> 0:11:19.120 on with all of the available technology as well. Thank you. 0:11:26.800 --> 0:11:31.040 Tech talks. Can They rebound from their worst weekly performance 0:11:31.120 --> 0:11:34.120 in nearly two years, and the recent declines have been 0:11:34.160 --> 0:11:36.400 led by the likes of Nvidia, shedding more than four 0:11:36.480 --> 0:11:39.760 hundred billion dollars in market cap last week alone. Alex 0:11:39.760 --> 0:11:43.320 Simonova is here to really talk through the pain trade 0:11:43.360 --> 0:11:45.880 of last week and spin it forward. We are raising 0:11:45.960 --> 0:11:48.480 our gains on the day. Why did we see such 0:11:48.520 --> 0:11:49.800 losses last week and Friday? 0:11:49.880 --> 0:11:52.840 Yeah, so, last week's so off really highlighted the perils 0:11:52.880 --> 0:11:55.320 of the high tech concentration that so many people have 0:11:55.400 --> 0:11:58.200 been worried about for much of this year. When you 0:11:58.280 --> 0:12:01.560 have one group comprising s big share of the broader market, 0:12:01.600 --> 0:12:04.440 the so called Magnificent seven stocks making up more than 0:12:04.440 --> 0:12:06.320 a third of the S and P five hundred index. 0:12:06.440 --> 0:12:09.000 When the momentum is going in the right direction, you know, 0:12:09.840 --> 0:12:10.800 it lifts all boats. 0:12:10.880 --> 0:12:11.600 Things are good. 0:12:11.840 --> 0:12:14.080 But when you have any kind of growth fears emerge, 0:12:14.080 --> 0:12:16.840 any kind of disappointing earnings, you know the growth hears 0:12:16.840 --> 0:12:19.920 that we saw from last week's payrolls data, the momentum 0:12:19.960 --> 0:12:22.880 goes pretty rapidly to the downside. You have the systemic 0:12:22.920 --> 0:12:25.520 funds that have been piling into tech, They begin to 0:12:25.559 --> 0:12:28.480 sell and that accentuates the moves to the downside. And 0:12:28.480 --> 0:12:30.360 then you have a lot of investors this year, we're 0:12:30.400 --> 0:12:33.080 chasing the rally, which means that they bought tech stocks 0:12:33.120 --> 0:12:35.600 at very expensive prices, and so when it's time to 0:12:35.640 --> 0:12:39.560 de risk, those losses become pretty extreme. Of course, we 0:12:39.600 --> 0:12:41.440 saw the S and P five hundred post a weekly 0:12:41.440 --> 0:12:45.280 decline of four percent, its worst week since the SEVB 0:12:45.400 --> 0:12:47.880 collapse in March twenty twenty three, and then tech stocks 0:12:48.040 --> 0:12:48.959 their worst week. 0:12:48.800 --> 0:12:52.120 In two years. Bespoke saying as well, Ultimately stocks are 0:12:52.160 --> 0:12:55.760 off to their worst September in sixty years. We'll SEEPI 0:12:55.880 --> 0:13:00.400 will inflation data set us in a better fundamental picture 0:13:00.480 --> 0:13:01.199 or not? Do you think? 0:13:01.320 --> 0:13:01.560 Yeah? 0:13:01.760 --> 0:13:03.800 You know, it seems to be the case. As you mentioned, 0:13:03.800 --> 0:13:06.040 seasonality is playing a big factor here, going back to 0:13:06.120 --> 0:13:08.760 nineteen fifty, September is the worst month of the year 0:13:08.800 --> 0:13:10.920 for stocks, and we're seeing that really play out. But 0:13:11.000 --> 0:13:14.360 the fundamental picture hasn't changed much. Yes, that Job's data 0:13:14.480 --> 0:13:17.720 was disappointing, but we aren't seeing pronounced layoffs at this point. 0:13:17.760 --> 0:13:20.120 If you look at the earnings picture, things are still 0:13:20.120 --> 0:13:23.120 looking good. Companies are delivering on earnings. We're supposed to 0:13:23.160 --> 0:13:26.800 see them expand beyond the magnificent seven stocks. We're expecting 0:13:26.800 --> 0:13:29.120 a rate cut, so things should still farewell. 0:13:29.160 --> 0:13:31.240 For the rest of the year. Just need Apple to 0:13:31.240 --> 0:13:33.480 deliver today as well. The worst points drag on the 0:13:33.559 --> 0:13:36.000 NASDAC Alex sim and Eva, we love having her. Thank 0:13:36.040 --> 0:13:39.280 you more markets now, Semasha Prinstical Asset Management joins us. 0:13:39.280 --> 0:13:42.640 We're hearing about the momentum trade that pulls back last week. 0:13:42.880 --> 0:13:45.400 What about this week? Sema, Hey, thanks for having me on. 0:13:45.640 --> 0:13:48.240 I think it's a tough environment, to be honest, it 0:13:48.280 --> 0:13:50.400 seems that tech has become a bit of a barometer 0:13:50.679 --> 0:13:53.599 for investor sentiment. As we know, there's a lot of 0:13:53.640 --> 0:13:55.640 question marks a moment around the state of the economy 0:13:55.640 --> 0:13:57.360 where the FED is going to be quick enough to 0:13:57.440 --> 0:14:03.280 move so until maybe you get either sufficient evaluation correction 0:14:04.200 --> 0:14:07.520 improvement fundamentals or you get some really interesting news from 0:14:07.559 --> 0:14:09.720 one of these companies. I think tech is unfortunately going 0:14:09.760 --> 0:14:11.800 to have as somewhat challenging couple of months. 0:14:12.200 --> 0:14:15.479 Seema, good morning is ed here at Apple Park in Cupertino. 0:14:15.559 --> 0:14:18.280 I think trying to tie today's event to that economic 0:14:18.400 --> 0:14:21.880 picture you outlined the question around. For example, a super 0:14:21.920 --> 0:14:25.200 psychle also is dependent on the economic health of the 0:14:25.240 --> 0:14:27.800 consumer of the buyer. And one place that I'm looking 0:14:27.840 --> 0:14:30.280 at the moment is the spending power, health of the 0:14:30.320 --> 0:14:34.240 middle and higher income earners. What does that data set 0:14:34.280 --> 0:14:35.160 tell you at the moment? 0:14:35.360 --> 0:14:37.160 Yeah, and I think that's so true. I mean, when 0:14:37.160 --> 0:14:39.520 we look at the consumer data as you took, as 0:14:39.520 --> 0:14:42.400 you're looking at a broad perspective, it looks fairly weak. There's 0:14:42.440 --> 0:14:45.560 a slowing process taking place. But then again, if you 0:14:45.680 --> 0:14:47.960 look towards the actual income levels, you can see that 0:14:48.000 --> 0:14:49.840 most of the strains are really limited to the lower 0:14:49.880 --> 0:14:52.960 income side. The medium to high income simply fairly strong. 0:14:53.000 --> 0:14:56.320 That they have not been as impacted by high interest rates. 0:14:56.720 --> 0:14:59.120 So you continue to see that purchasing power. But the 0:14:59.200 --> 0:15:01.440 problem is is that a lot of the gains, the 0:15:01.520 --> 0:15:03.880 real wealth gains have been driven by the equity market 0:15:04.200 --> 0:15:06.760 strengthen the acuity market. So if you get any further 0:15:06.800 --> 0:15:09.600 concerns about that, you could see that feeding through to 0:15:09.680 --> 0:15:13.640 middle income hire income households really on to requestion the 0:15:13.720 --> 0:15:16.440 kind of purchases that they want to make. Apple, of course, 0:15:16.480 --> 0:15:17.920 folds right in those crosshairs. 0:15:18.680 --> 0:15:22.560 Sima. We talk a lot to not only institutional investors 0:15:22.600 --> 0:15:26.440 on the show, but retail investors who have been so excited, enamored, 0:15:26.840 --> 0:15:30.600 hyped around certain names like in nvidio, double leveraging double 0:15:30.920 --> 0:15:34.440 two x some of these ETF exposures. Are they right 0:15:34.520 --> 0:15:36.520 to at the moment? Should we be still focused so 0:15:36.640 --> 0:15:37.800 much on mag seven? 0:15:38.120 --> 0:15:40.400 But I think you're right that the retail investor base 0:15:40.520 --> 0:15:41.600 has been driven a lot. 0:15:41.440 --> 0:15:43.960 By FOMO for what of a better word. 0:15:44.000 --> 0:15:46.120 I think FOMA has been a real driver for the 0:15:46.480 --> 0:15:50.840 continued interest in those MAGA seven on the big brand names. Unfortunately, 0:15:50.840 --> 0:15:54.040 at the moment that investor's sentiment has deteriorated so that 0:15:54.080 --> 0:15:56.920 Pomo no longer exists at this point in time. 0:15:57.520 --> 0:15:58.320 So I think the. 0:15:58.240 --> 0:16:00.520 Retail investor is taking a look back, say, look, if 0:16:00.520 --> 0:16:02.120 we're worried about the economy, there has to be some 0:16:02.240 --> 0:16:05.120 kind of impact on these big brands, and we need 0:16:05.160 --> 0:16:07.560 to see a point where it starts to look more interesting. 0:16:07.840 --> 0:16:11.120 From an institutional base, I think the general thesis around 0:16:11.120 --> 0:16:15.160 tech and THEAI and the impact of Magnificent seven still exists. 0:16:15.440 --> 0:16:17.160 We're still looking at the companies and saying they will 0:16:17.160 --> 0:16:21.080 deliver over a five seven year perspective, So it still 0:16:21.080 --> 0:16:23.480 makes sense to have exposure. But your marginal buyer is 0:16:23.520 --> 0:16:26.760 probably questioning at the moment these valuations and whether this 0:16:26.880 --> 0:16:28.400 is the right time to have exposure. 0:16:29.280 --> 0:16:32.800 That's exactly what we hear. People are trading these names 0:16:32.840 --> 0:16:34.960 at the moment, and that's what we see the individual 0:16:35.040 --> 0:16:40.000 volatility on how do you keep the diversification mindset in 0:16:40.040 --> 0:16:42.359 this market? How are you seeing an opportunity? 0:16:42.680 --> 0:16:45.040 So episode, when we look at the large tech space, 0:16:45.120 --> 0:16:47.280 we have maintained our exposure, we have pulled back a 0:16:47.280 --> 0:16:50.040 little bit, We're still quite overweight, and the reason is 0:16:50.080 --> 0:16:51.720 that we're still looking at it as a little bit 0:16:51.720 --> 0:16:54.760 of a defensive play. So these companies they have the quality, 0:16:54.800 --> 0:16:57.280 they've got the large balance sheets, the cash flow, which 0:16:57.320 --> 0:16:59.440 means that they shouldn't continue to do well even if 0:16:59.440 --> 0:17:02.160 there isn't a macdanton and we will be looking for 0:17:02.200 --> 0:17:05.200 opportunities to increase exposure. But at this point in time, 0:17:05.320 --> 0:17:07.560 a lot of it is around diversifications, so not just 0:17:07.640 --> 0:17:10.320 having exposure to tech, but other parts of the market 0:17:10.359 --> 0:17:12.399 which are a little bit more defensive, so your typical 0:17:12.400 --> 0:17:16.680 defensive place such as utilities, some of those consumer staples 0:17:16.680 --> 0:17:17.000 as well. 0:17:17.440 --> 0:17:17.680 Sam. 0:17:17.800 --> 0:17:21.120 I've asked you on Bloomberg Technology before how you use 0:17:21.240 --> 0:17:25.760 generative AI in your professional and daily life, and I 0:17:25.760 --> 0:17:29.840 think the next extension of that you're seeing any evidence whatsoever, 0:17:30.680 --> 0:17:35.280 that all the investment and capital expenditure into capacity to 0:17:35.320 --> 0:17:39.919 build generative AI tool is translating into productivity gains in 0:17:39.960 --> 0:17:43.399 any of the economies with which you're concerned more response. 0:17:43.960 --> 0:17:47.720 So you are hearing news, corporate news really specifically of 0:17:47.760 --> 0:17:50.960 companies saying that they have seen a productivity gain or 0:17:50.960 --> 0:17:53.480 that they're envisaging that if they were to invest further 0:17:53.520 --> 0:17:56.800 into AI, there will be some significant productivity gains. Even 0:17:56.800 --> 0:17:58.359 if you look at the UK government, it's something that 0:17:58.400 --> 0:18:01.240 they talk about repeatedly that if they were to invest 0:18:01.240 --> 0:18:03.760 in those areas that they could see further government savings 0:18:04.080 --> 0:18:05.040 over the coming years. 0:18:05.720 --> 0:18:07.160 In terms of if it's. 0:18:07.000 --> 0:18:10.679 Coming to fruition, I'm not necessarily seeing so much of 0:18:10.680 --> 0:18:13.639 that news, but there is still that expectation that ALI 0:18:13.720 --> 0:18:16.280 will deliver and it still sits at the frontier of 0:18:16.320 --> 0:18:20.119 all productivity gains and even growth gains over thecoming future. 0:18:21.040 --> 0:18:24.000 Seema, we were discussing but a week or so ago, 0:18:24.280 --> 0:18:26.960 if in Video or the FED were more important, what 0:18:27.160 --> 0:18:28.200 is it for you now? 0:18:30.280 --> 0:18:32.840 So I think that you know they still they both 0:18:32.920 --> 0:18:35.240 have a very significant impact on the market, if anything, 0:18:35.280 --> 0:18:37.080 on a day by day basis of to actually argue 0:18:37.080 --> 0:18:39.520 that in Vidia does. But as I said, I think 0:18:39.560 --> 0:18:42.439 these companies are almost a barometer of investor sentiment, and 0:18:42.520 --> 0:18:45.600 at the moment, investor sentiment is being driven by what 0:18:45.640 --> 0:18:47.600 the market thinks the FED is going to do. So 0:18:47.760 --> 0:18:50.280 if we were to see the FED coming in with 0:18:50.560 --> 0:18:54.879 a sizeable interest rate cut next week and also downplaying 0:18:54.920 --> 0:18:57.720 the concerns of recession, then I think investor sentiment would 0:18:57.760 --> 0:19:00.760 improve and you could see an and them plicit bounced 0:19:00.760 --> 0:19:02.720 back in a lot of these Max seven. So much 0:19:02.720 --> 0:19:04.560 of it is tied together at this point. 0:19:04.600 --> 0:19:07.480 Seema very quickly. What's the biggest headwind that we're not 0:19:07.640 --> 0:19:10.200 talking about the technology investors might face. 0:19:12.640 --> 0:19:14.679 I do think that the China story, we all know 0:19:14.760 --> 0:19:16.679 that it's there. I don't think Whate's ignoring it. But 0:19:16.720 --> 0:19:18.760 I think we have got growing concerns about the strength 0:19:18.760 --> 0:19:21.960 of the consumer in China, where the economy is going, 0:19:21.960 --> 0:19:24.439 and of course, given the tech cycle, how much that 0:19:24.480 --> 0:19:26.800 feeds into tech demand I think is probably one of 0:19:26.800 --> 0:19:28.520 the areas that we're going to be watching most closely 0:19:28.520 --> 0:19:29.440 over the coming months. 0:19:29.600 --> 0:19:32.920 Smasha, Principal Asset Management are joined to have you thank 0:19:32.960 --> 0:19:36.000 you coming up, We're talking tech. The headlines you need 0:19:36.040 --> 0:19:39.119 to know plus much more from Coopertino, counting you down 0:19:39.200 --> 0:19:42.879 to Apple's big launch event one pm Eastern, telling M 0:19:42.960 --> 0:20:00.879 local this a blueberg technology time now talking tech first 0:20:00.960 --> 0:20:04.399 up in video backed Skana AI sees potential for more 0:20:04.400 --> 0:20:07.680 strategic partnerships in Japan. This is as rising US China 0:20:07.840 --> 0:20:11.280