WEBVTT - Apple AI Plans, EU Elections 0:00:01.440 --> 0:00:05.320 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:00:05.400 --> 0:00:08.480 weekdays at ten am Eastern on Apple car playing Enroud 0:00:08.520 --> 0:00:11.600 Otto with the Bloomberg Business app. Listen on demand wherever 0:00:11.680 --> 0:00:14.800 you get your podcasts, or watch us live on YouTube. 0:00:16.520 --> 0:00:18.560 So it's bringing on rog Rana. He's a tech analyst 0:00:18.560 --> 0:00:23.600 for Bloomberg Intelligence. You've been following Apple stock for decades here, 0:00:25.000 --> 0:00:26.360 how important is today? 0:00:26.600 --> 0:00:27.120 Anurag? 0:00:28.400 --> 0:00:31.479 I feel like Apple doesn't have the AI juice in 0:00:31.520 --> 0:00:32.000 at stock. 0:00:32.320 --> 0:00:33.960 Is that something they care about? 0:00:35.360 --> 0:00:37.479 No, they have to care about it because that's the 0:00:37.520 --> 0:00:40.800 most important thing investor's mind right now. So there are 0:00:40.800 --> 0:00:42.760 a few things we already kind of know thanks to 0:00:42.800 --> 0:00:45.640 Mark German. Is there's going to be most likely an 0:00:45.680 --> 0:00:48.360 announcement with Open Eyes, some kind of joint agreement with 0:00:48.400 --> 0:00:52.120 them to use their technology into the new operating system. 0:00:52.320 --> 0:00:54.400 So I would say a lot of that is already 0:00:54.400 --> 0:00:56.760 built in. We all know that Apple doesn't have its 0:00:56.760 --> 0:01:00.920 own large language model as good as what's available with 0:01:00.960 --> 0:01:04.240 Opening I or arguably with Google, so but they can 0:01:04.240 --> 0:01:06.640 partner with these two companies. So that's that's the luxury 0:01:06.640 --> 0:01:08.840 Apple has that it does not need to do with 0:01:08.959 --> 0:01:11.319 everything in house and that's what we're going to look 0:01:11.360 --> 0:01:14.560 forward today, is what's the strategy in terms of working 0:01:14.600 --> 0:01:17.480 with partners and then using that technology to fuel the 0:01:18.000 --> 0:01:19.000 operating system. 0:01:19.920 --> 0:01:22.000 It does it? Will it justify their one up in 0:01:22.040 --> 0:01:22.400 the stock? 0:01:22.720 --> 0:01:24.800 How do you make the correlation between the news and 0:01:24.840 --> 0:01:26.920 what we're actually going to get and the actual move 0:01:26.959 --> 0:01:28.520 in the in Apple share price. 0:01:29.440 --> 0:01:31.000 So, Alex, one of the things I would say is 0:01:31.000 --> 0:01:32.680 for the past one and a half to two years, 0:01:32.720 --> 0:01:34.959 there has been nothing but bad news coming for Apple. 0:01:35.319 --> 0:01:38.360 You know, that has been an issue because iPhone growth 0:01:38.360 --> 0:01:41.520 has slowed down, mostly because of China. So I would 0:01:41.520 --> 0:01:43.920 say this is the first liver of good news that 0:01:44.040 --> 0:01:47.680 has the potential to improve iPhone sales next year. It's 0:01:47.720 --> 0:01:49.280 not going to do anything this year. I mean, it's 0:01:49.280 --> 0:01:52.440 it's very difficult to model that out. But if the 0:01:52.480 --> 0:01:55.480 operating system has enough juice for people to figure out 0:01:55.520 --> 0:01:58.120 and say I will go out and change my phone 0:01:58.160 --> 0:02:00.920 next year, I think that's the That is the gas 0:02:01.000 --> 0:02:03.440 that people are looking for, is whether that can go 0:02:03.520 --> 0:02:05.280 back and reignite sales growth. 0:02:05.880 --> 0:02:08.680 And we were talking with Mark Herman earlier this morning 0:02:08.680 --> 0:02:10.680 and he kind of suggested that, you know, it can 0:02:10.720 --> 0:02:13.240 be taken as a little bit of an embarrassment by 0:02:13.360 --> 0:02:16.800 Apple that they do not have, you know, kind of 0:02:16.840 --> 0:02:20.320 their own AI capabilities in house, that they need to 0:02:20.400 --> 0:02:23.240 partner with open Ai. Do you think investors view it 0:02:23.240 --> 0:02:25.280 that way? They're just like, we don't really care how 0:02:25.320 --> 0:02:26.760 you get it, just put it on the device. 0:02:27.480 --> 0:02:29.880 Yeah, but personally I don't care how do you do 0:02:30.160 --> 0:02:32.520 get it on the device? Same thing for search. What 0:02:32.600 --> 0:02:34.680 I really like about that if they partner it is 0:02:34.720 --> 0:02:36.720 then they don't have to spend billions of dollars to 0:02:37.040 --> 0:02:39.000 do it in house. If you look at the capex 0:02:39.040 --> 0:02:41.760 of Apple compared to some of the other companies, it's 0:02:41.919 --> 0:02:42.760 much smaller. 0:02:43.120 --> 0:02:44.440 And you know, I'm. 0:02:44.320 --> 0:02:46.360 Okay with that because it helps out in my free 0:02:46.360 --> 0:02:48.760 cash flow. As long as they can partner with people, 0:02:49.000 --> 0:02:50.200 I'm absolutely fine with it. 0:02:51.000 --> 0:02:52.520 Well, let's go to the idea. 0:02:52.919 --> 0:02:54.320 I mean, you can bring my daughter into this. So 0:02:54.840 --> 0:02:56.960 I'm doing a lot of reading Estrian Apple. I'm taking 0:02:57.000 --> 0:02:59.600 all my notes and doing my homework, and I said, hey, dydn't. 0:03:00.040 --> 0:03:01.640 I was like, you know that Apple's going to have 0:03:01.639 --> 0:03:04.360 this thing tomorrow and they're gonna maybe unveil something that 0:03:04.440 --> 0:03:07.160 will help emojis and you can get better emojis when 0:03:07.160 --> 0:03:09.840 you're typing texts and she's like, that is so cool 0:03:10.040 --> 0:03:12.440 when you need to get the new phone, and I think, anurag, 0:03:12.680 --> 0:03:15.960 that's your point where like people like my daughter are like, 0:03:16.040 --> 0:03:18.959 that's awesome, upgrade your phone now, because I'm like, oh. 0:03:18.800 --> 0:03:19.799 A few years, a few years. 0:03:19.840 --> 0:03:21.119 She's like, no, no, you got to get the phone 0:03:21.120 --> 0:03:23.040 because I need the emojis so I can send texts 0:03:23.080 --> 0:03:25.440 to my friends. That's basically what you're talking about. There's 0:03:25.480 --> 0:03:27.920 a huge install base. You do something that even is 0:03:27.960 --> 0:03:30.320 like semi cool, and that's going to drive sales. 0:03:31.200 --> 0:03:33.480 Yeah, I mean, that's the coolness factor. And frankly speaking, 0:03:33.520 --> 0:03:35.800 one of the things that really caught my attention is 0:03:35.840 --> 0:03:39.800 Mark German reported that the new features would be available 0:03:39.800 --> 0:03:43.200 on iPhone fifteen Pro and the newer one that's coming. 0:03:43.360 --> 0:03:46.600 I mean, that's a big deal because, frankly speaking, if 0:03:46.680 --> 0:03:49.240 that's a very small portion of the total install base, 0:03:49.640 --> 0:03:52.040 even those early adopters, if they go out and rush 0:03:52.120 --> 0:03:55.480 to increase their you know, the refresh the phone in 0:03:55.480 --> 0:03:57.680 a much quicker way, that's going to help out Apple. 0:03:58.440 --> 0:04:01.760 All right, So what else today should we be looking for? 0:04:01.760 --> 0:04:02.400 Anna Raga? 0:04:02.480 --> 0:04:03.960 I mean, is there going to be a new watch 0:04:04.000 --> 0:04:06.560 and do anything or is it just getting everybody to 0:04:06.600 --> 0:04:07.280 focused on AI. 0:04:07.520 --> 0:04:09.560 Yeah, it's all going to be AI. And I think 0:04:09.560 --> 0:04:11.400 one of the things I really like what I've seen 0:04:11.440 --> 0:04:13.560 from Apple in the last six months is now they 0:04:13.560 --> 0:04:16.080 are all focused on this product because one of the things, 0:04:16.080 --> 0:04:18.000 again Mark said that, you know, they shut down the 0:04:18.040 --> 0:04:20.640 cards project, which has been around for you know, so 0:04:20.720 --> 0:04:25.240 many years, taking out massive amount of investments, and then 0:04:25.240 --> 0:04:27.839 they you could say that they diverted that attention and 0:04:27.960 --> 0:04:31.280 not focused on AI completely. But right now the entire 0:04:31.320 --> 0:04:34.560 company is focused on AI, embedding it every product, every 0:04:34.640 --> 0:04:38.680 operating system, every feature. And I think, and you know, 0:04:38.720 --> 0:04:40.800 one of the things we've heard even in China is 0:04:40.920 --> 0:04:44.000 consumers don't like that Apple has been behind in this 0:04:44.040 --> 0:04:47.000 particular one and that has been a reason for them 0:04:47.040 --> 0:04:49.560 not to upgrade their phone. So I think Apple's taking 0:04:49.600 --> 0:04:51.920 this a lot more seriously. I think other tech companies 0:04:51.920 --> 0:04:54.160 are taking it a lot more seriously. Who have been 0:04:54.320 --> 0:04:57.359 you know, I would say, taking their dominant position in 0:04:57.400 --> 0:05:00.839 their respective markets for granted over the last few years. 0:05:01.400 --> 0:05:03.560 And that's what I think open ai has done for 0:05:03.760 --> 0:05:05.240 the rest of the ecosystem. 0:05:05.279 --> 0:05:08.839 Also, honour more of the derivative plays from this. When 0:05:08.880 --> 0:05:12.840 we're hearing the announcements from Apple in your world of software, 0:05:13.200 --> 0:05:14.560 where should we be paying attention to? 0:05:15.800 --> 0:05:18.400 I think see what we think is going to happen 0:05:18.520 --> 0:05:21.400 is over the next one to two years, every software 0:05:21.440 --> 0:05:24.680 company is going to embed more AI features into their 0:05:24.720 --> 0:05:27.560 core software product. Now, the question is some of them 0:05:27.640 --> 0:05:30.719 will have the ability to up charge for that, which 0:05:30.720 --> 0:05:32.880 means they will have a pro model or a premium 0:05:32.880 --> 0:05:36.360 model or a ProPlus model where the average revenue per 0:05:36.440 --> 0:05:38.680 user can go up. This way, they don't have to 0:05:38.720 --> 0:05:40.880 go out and look for a brand new user to 0:05:40.920 --> 0:05:44.080 sell that software. They just have to convince the buyer 0:05:44.400 --> 0:05:47.360 that it is worth your while to upgrade that software 0:05:47.640 --> 0:05:50.200 into the one that has AI features. I think that 0:05:50.320 --> 0:05:53.320 is where bulk of the investments are going to In 0:05:53.400 --> 0:05:56.360 terms of the software industry, we think every major company 0:05:56.400 --> 0:05:58.680 will play a role in it. The ones that we 0:05:58.720 --> 0:06:01.600 have seen so far is that's coming out from Microsoft, 0:06:01.800 --> 0:06:04.520 whether it's in the Office Suite or the one that 0:06:04.600 --> 0:06:07.479 we like quite a bit. Is there coding software where 0:06:07.720 --> 0:06:11.120 you could the software developers can actually do automated coding 0:06:11.320 --> 0:06:13.400 in a much faster way. I think that will have 0:06:13.440 --> 0:06:17.600 a massive upsell rate because the benefits of productivity are 0:06:17.640 --> 0:06:18.679 way too high over there. 0:06:19.000 --> 0:06:21.680 All right, on thirty seconds question of the day, I 0:06:21.720 --> 0:06:23.960 have an iPhone eleven toy upgrade now or wait. 0:06:25.640 --> 0:06:27.640 This winter when the next one comes in, which is 0:06:27.680 --> 0:06:30.320 the iPhone sixteen or so. I think you will be 0:06:30.400 --> 0:06:32.159 very happy with that particular. 0:06:31.680 --> 0:06:34.800 One I found. Did it work? Like can you run stuff? 0:06:35.040 --> 0:06:35.400 Yeah? 0:06:35.480 --> 0:06:38.040 But at some point, like the apps just don't update 0:06:38.080 --> 0:06:39.919 and the software doesn't update, and like you have to 0:06:40.279 --> 0:06:40.719 turn it in. 0:06:40.839 --> 0:06:42.880 Well, the big thing that what always prompts me to 0:06:43.160 --> 0:06:46.880 upgrade is the battery. When a battery starts, that's that's 0:06:47.000 --> 0:06:49.280 the message. All right, Honak, thanks so much for joining us. 0:06:49.400 --> 0:06:51.360 A rag ronnie. He saved me a couple of dollars today. 0:06:51.360 --> 0:06:53.240 I'm not gonna go out and buy a new iPhone. 0:06:53.440 --> 0:06:56.799 He's a senior technologyanels for Bloomberg Intelligence. Yeah, it's always 0:06:56.800 --> 0:06:57.839 the battery that kind of gets me. 0:06:58.000 --> 0:07:00.159 The battery is rough, Yeah, but I do my thing 0:07:00.200 --> 0:07:02.919 on like low battery all day, like you don't do 0:07:03.320 --> 0:07:03.640 they do? 0:07:03.760 --> 0:07:04.560 Yeah, which is fine. 0:07:04.560 --> 0:07:06.720 It just means it instead of like staying up and 0:07:06.760 --> 0:07:08.920 connected for a long time, it just goes to sleep 0:07:08.920 --> 0:07:09.920 and I just have to wake it up. 0:07:10.120 --> 0:07:12.680 Really yeah, but a last like anybody that you're the 0:07:12.680 --> 0:07:13.400 first person that. 0:07:13.960 --> 0:07:16.800 Business track for me, though I don't know, I feel 0:07:16.800 --> 0:07:19.960 like this all makes some cheap sense. Anyway, We're definitely 0:07:20.000 --> 0:07:23.640 watching Apple and looking forward to that announcement coming there 0:07:23.800 --> 0:07:25.120 has a really big run up. 0:07:26.640 --> 0:07:30.559 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:07:30.640 --> 0:07:33.680 weekdays at ten am Eastern on Apple car Play and 0:07:33.680 --> 0:07:36.600 Android Auto with the Bloomberg Business app. You can also 0:07:36.680 --> 0:07:39.840 listen live on Amazon Alexa from our flagship New York 0:07:39.920 --> 0:07:44.280 station just Say Alexa playing Bloomberg eleven thirty. 0:07:45.160 --> 0:07:47.440 This is Bloomberg Intelligence Radio, where we cover all the 0:07:47.480 --> 0:07:49.040 news and business and finance through our. 0:07:49.040 --> 0:07:50.880 Lens of our Bloomberg Intelligence analysts. 0:07:51.040 --> 0:07:52.960 They cover two thousand companies and one hundred and thirty 0:07:52.960 --> 0:07:56.400 industries worldwide. We also like to tap our guys over 0:07:56.480 --> 0:07:59.720 Bloomberg Economics, amazing men and women who do the economic 0:07:59.800 --> 0:08:03.040 side of the entire world. David Powell is senior Euro 0:08:03.120 --> 0:08:05.880 Area economist for Bloomberg Economics and he joins us now 0:08:06.600 --> 0:08:10.360 David BTP bund spread right, you have the France versus 0:08:10.360 --> 0:08:12.520 German ten year spread fifty five basis points. 0:08:12.520 --> 0:08:14.320 We haven't seen that all year. 0:08:14.640 --> 0:08:17.120 You have a huge, huge sell off in the bond 0:08:17.120 --> 0:08:19.200 market some of the main countries, even in Italy and 0:08:19.200 --> 0:08:23.320 Spain and Portugal, equities are getting hit. What do you 0:08:23.320 --> 0:08:26.280 make of what unfolded over the last twenty four hours 0:08:26.560 --> 0:08:28.400 in France and the European Parliament. 0:08:29.920 --> 0:08:33.720 Well, the far right parties of Europe had very large 0:08:33.760 --> 0:08:37.199 gains in the European elections. These are the elections for 0:08:36.800 --> 0:08:41.240 the European Parliament, and that wasn't so much of a 0:08:41.360 --> 0:08:44.880 surprise in itself, because Poles were showing that was likely 0:08:44.960 --> 0:08:47.520 to happen. But the big surprise is what's happened in 0:08:47.559 --> 0:08:50.800 France is the reaction of the French President, Emmanuel Marcon 0:08:50.960 --> 0:08:55.360 to the outcome, and he announced a snap parliamentary elections. 0:08:55.800 --> 0:08:58.920 This won't affect his role as president because that's a 0:08:59.120 --> 0:09:02.839 separate election, But soon the French will be going to 0:09:03.000 --> 0:09:07.320 polls to be voting for new members of parliament and 0:09:07.360 --> 0:09:10.560 for American listeners that's similar to the members of the 0:09:10.559 --> 0:09:14.440 House of Representatives, and then the composition of that lower 0:09:14.480 --> 0:09:19.079 house may change, and in fact polls suggest it will 0:09:19.679 --> 0:09:23.240 more in favor of the of the party that just 0:09:23.800 --> 0:09:26.199 won such a such a large number of seats in 0:09:26.240 --> 0:09:27.280 the European Parliament. 0:09:28.000 --> 0:09:30.760 So David in the European Parliament, what were some of 0:09:30.760 --> 0:09:34.040 the contributing factors to that strong performance by the far right. 0:09:35.559 --> 0:09:39.920 Well, Uh, discontent with with the with the way things 0:09:39.920 --> 0:09:43.319 are going. Of course that's not unique to Europe and America. 0:09:43.400 --> 0:09:46.720 A lot of voters of their concerns about inflation, what 0:09:46.800 --> 0:09:49.680 that means for their spending power, and that has the 0:09:49.920 --> 0:09:54.120 that that's that's had a similar impact on the on 0:09:54.200 --> 0:09:57.880 the electorate in Europe where people are upset about these 0:09:57.920 --> 0:10:02.160 high prices. Uh, the the the cost of living crisis 0:10:02.880 --> 0:10:05.960 as they refer to it. But in addition to those 0:10:06.600 --> 0:10:09.959 to those developments in France, but they've also had recently 0:10:10.200 --> 0:10:13.880 is a change to the pension system in order to 0:10:13.880 --> 0:10:16.760 make it more affordable. So they've lifted the retirement age 0:10:17.280 --> 0:10:19.400 and that was done by the French president and it 0:10:19.440 --> 0:10:21.440 was not a popular move as you can imagine. No 0:10:21.480 --> 0:10:23.280 one wants to be told that they have to work 0:10:23.320 --> 0:10:26.400 for longer in order to receive the same benefits, and 0:10:26.800 --> 0:10:30.200 that has been a source of support for this for 0:10:30.240 --> 0:10:33.280 the far right, which has come out which came out 0:10:33.280 --> 0:10:35.800 at the time opposing that that's done. They've also come 0:10:35.840 --> 0:10:40.680 out opposing recent changes that are being discussed to the 0:10:40.720 --> 0:10:45.080 system of unemployment benefits. So it is now a debate 0:10:45.160 --> 0:10:50.160 about shortening the duration of unemployment benefits that the government 0:10:50.240 --> 0:10:50.760 is leading. 0:10:51.280 --> 0:10:53.599 So what I find interesting, David is the idea and 0:10:53.600 --> 0:10:55.040 the more I read about it, the more it's like 0:10:55.080 --> 0:10:58.200 Mattcrol's calling the far right bluff and it's like, all right, 0:10:58.400 --> 0:11:00.560 you guys want those policies, Let's see how much you 0:11:00.600 --> 0:11:04.080 want those policies that What is your assessment as to 0:11:04.160 --> 0:11:07.840 how risky or not that strategy is and the effect 0:11:07.880 --> 0:11:09.040 you could have on the economy. 0:11:10.200 --> 0:11:13.560 Well, some of the things that Macwall's pushed through, like 0:11:13.679 --> 0:11:16.959 raising the retirement age and this debate about shortening the 0:11:17.040 --> 0:11:20.480 duration of employment benefits, Obviously they're not popular, but they're 0:11:20.520 --> 0:11:23.480 necessary because France is a huge budget deficit there under 0:11:23.520 --> 0:11:26.360 a lot of pressure from the European Commission to reduce 0:11:26.440 --> 0:11:29.680 the size of it. Their debt isn't growing increasingly large, 0:11:30.280 --> 0:11:34.840 and these reforms will reduce the amount that the government 0:11:34.880 --> 0:11:37.000 is to pay out to pensioners and the unemployed, and 0:11:37.000 --> 0:11:40.760 they'll also boost the potential size of the economy. So 0:11:40.800 --> 0:11:43.600 it's kind of a win win situation from an economic 0:11:43.679 --> 0:11:49.520 point of view. And even though these aren't popular, macalls saying, 0:11:49.520 --> 0:11:51.760 these are necessary steps in order to get the public 0:11:51.800 --> 0:11:55.840 finances in order. And the far right has been opposed 0:11:55.840 --> 0:11:57.839 to many of these moves, but they haven't they haven't 0:11:57.880 --> 0:12:02.720 proposed other solutions. So I think one of the things 0:12:02.760 --> 0:12:04.920 Macwoll's kind of doing here is saying is you know, 0:12:05.080 --> 0:12:06.720 you like to be opposed to what I'm doing, but 0:12:06.720 --> 0:12:10.040 you're not putting forth any solutions yourself. And while you're 0:12:10.080 --> 0:12:13.120 in opposition, I guess that's your job to oppose the government. 0:12:13.800 --> 0:12:16.400 But let's see if you can put together some policies 0:12:16.400 --> 0:12:19.280 yourselves that would solve the problems instead of just complaining 0:12:19.320 --> 0:12:21.280 about what he has proposed as solutions. 0:12:21.520 --> 0:12:23.280 David, can you give us a kind of an overview 0:12:23.360 --> 0:12:27.120 just maybe how the economic the economies of Europe are 0:12:27.120 --> 0:12:30.319 behaving generally speaking, How are they in terms of growth, 0:12:30.320 --> 0:12:32.000 how are they in terms of inflation these days? 0:12:32.080 --> 0:12:32.800 What are the trends? 0:12:33.559 --> 0:12:37.160 Well, Europe, like the United States, has had an inflation 0:12:37.320 --> 0:12:40.080 problem of the last couple of years, and in Europe 0:12:40.120 --> 0:12:44.400 it was made even worse by the extreme rise and 0:12:44.440 --> 0:12:48.480 commodity prices that resulted after Russia's invasion in Ukraine. They 0:12:48.520 --> 0:12:52.960 have that inflation issue that's causing a cost of living crisis, 0:12:53.240 --> 0:12:58.080 And like the Federal Reserve, the European Central Bank very 0:12:58.160 --> 0:13:02.040 drastically raised interest rates, although unlike the United States, it 0:13:02.080 --> 0:13:05.040 had a major impact on the economy. So when we 0:13:05.240 --> 0:13:08.320 look back to twenty twenty three, I think the US 0:13:08.360 --> 0:13:11.000 economy grew something like three percent and the r Area 0:13:11.000 --> 0:13:14.400 economy did not grow at all. So there's been a 0:13:14.480 --> 0:13:18.960 much weaker economic performance as a result of the monetary 0:13:19.000 --> 0:13:20.360 tightening that's taken place. 0:13:21.040 --> 0:13:23.520 Yes, we got the ECB that did cut rates, we 0:13:23.559 --> 0:13:25.520 don't know when the next one's going to be. And 0:13:25.559 --> 0:13:28.400 then we get this violent move in bonn yields, and 0:13:28.400 --> 0:13:31.280 I appreciate compared the sovereign deck crisis, it's like peanuts, 0:13:31.320 --> 0:13:36.040 But nonetheless it's significant. At what point do bond yields 0:13:36.080 --> 0:13:39.800 effect everything else start to affect the economy, Like how high? 0:13:39.840 --> 0:13:41.600 How long do they have to stay for that to 0:13:41.640 --> 0:13:44.079 feel to that to be implemented into the economy. 0:13:45.360 --> 0:13:50.839 Yeah, I mean higher financing costs for the government. We'll 0:13:50.880 --> 0:13:55.680 have implications for the budget deficit and implications for lots 0:13:55.720 --> 0:13:59.120 of other things that are used as trademark interest rates 0:13:59.120 --> 0:14:02.160 in the economy in many places. However, as you said, 0:14:02.160 --> 0:14:04.280 these are small compared to what you're dealt with in 0:14:04.320 --> 0:14:07.560 the past in terms of the area debt crisis, and 0:14:07.760 --> 0:14:11.720 there's very unlikely to be any intervention from the ECB 0:14:11.880 --> 0:14:15.120 or anything like that, only because not only the movements small, 0:14:15.480 --> 0:14:18.120 but during a period of high inflation it's much more 0:14:18.120 --> 0:14:22.160 difficult for a central bank to intervene and to justify 0:14:22.240 --> 0:14:25.760 those moves than it is during a period of low inflation, 0:14:25.840 --> 0:14:29.400 because of course those interventions require just essentially printing money 0:14:29.960 --> 0:14:33.640 and using that money to buy those bonds. So we 0:14:33.720 --> 0:14:36.560 have had some movement in financial markets, but nothing that's 0:14:36.560 --> 0:14:40.000 screaming crisis, nothing that is screaming for the ECB to 0:14:40.080 --> 0:14:41.600 jump in and come the situation. 0:14:42.720 --> 0:14:44.640 All right, David, thank you so much. We appreciate that. 0:14:44.720 --> 0:14:47.400 David Palm, he's a senior your Area of Congress for 0:14:47.400 --> 0:14:51.880 Bloomberg Economics joining us from London the HQ for Bloomberg 0:14:51.920 --> 0:14:55.120 at Queen Victoria Street via that zoom thing. So again, 0:14:55.320 --> 0:14:58.400 some big moves, as Alex was pointing out earlier, of 0:14:58.440 --> 0:15:00.240 the euro off about a half of one percent sent 0:15:00.280 --> 0:15:03.320 one spot zero seven on the euro. You had the 0:15:03.440 --> 0:15:07.920 CAC fall off pretty substantially as well the French index. 0:15:08.520 --> 0:15:11.680 They're off about one point eight percent in terms of 0:15:11.680 --> 0:15:14.000 the stock market over there on the news of these 0:15:14.160 --> 0:15:15.040 snap elections. 0:15:15.120 --> 0:15:17.120 So my question is, then do we learn anything about 0:15:17.160 --> 0:15:19.280 how other elections will be treated like here in the 0:15:19.400 --> 0:15:22.720 US or not. We know hedging doesn't work with these things, 0:15:23.240 --> 0:15:25.240 as we learn, say with Brexit, so it's going to 0:15:25.280 --> 0:15:28.280 be very interesting to see how long these moves actually last, 0:15:28.320 --> 0:15:30.920 which might give us some insight into when they had 0:15:31.000 --> 0:15:33.360 the elections in July, when the UK has their election 0:15:33.800 --> 0:15:35.960 in July, and when we have our election as well 0:15:36.000 --> 0:15:36.720 in November. 0:15:38.160 --> 0:15:42.040 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:15:42.120 --> 0:15:45.240 weekdays at ten am Eastern on fo CarPlay and enroud 0:15:45.240 --> 0:15:48.360 Otto with the Bloomberg Business App. Listen on demand wherever 0:15:48.400 --> 0:15:54.360 you get your podcasts, or watch us live on YouTube. 0:15:53.280 --> 0:15:55.680 And Alex Steel alongside Paul's We Need This a Bloomberg 0:15:55.720 --> 0:15:58.680 Intelligence Radio. We're broadcasting to you live from the Interactive 0:15:58.680 --> 0:16:02.840 Broker studio right here and quarters in a beautiful midtown Manhattan. 0:16:02.920 --> 0:16:04.680 Lisa was just giving you a check on the market. 0:16:04.720 --> 0:16:06.640 Also, Apple is down a touch, but it has a 0:16:06.720 --> 0:16:09.280 huge run up since the end of April, and Video 0:16:09.360 --> 0:16:11.120 is also down on that stock split. So we want 0:16:11.120 --> 0:16:13.080 to dig a little deeper here with Carol Pepper, founder 0:16:13.120 --> 0:16:16.760 and CEO of Pepper International. She joins us, Hey, Carol, 0:16:17.040 --> 0:16:19.280 do you want to buy Apple into today? Like, do 0:16:19.280 --> 0:16:21.360 you want to buy in Video on the stock split? 0:16:22.880 --> 0:16:26.000 Definitely buying Video on the stocksplit. I think that that's 0:16:26.120 --> 0:16:28.000 just a great sign. And in Video is going to 0:16:28.120 --> 0:16:30.440 run right back up to over a thousand bucks a share. 0:16:31.280 --> 0:16:32.600 It is the engine right now. 0:16:32.640 --> 0:16:35.000 So I would definitely buy it and tuck it away 0:16:35.160 --> 0:16:37.560 and not look at it, just leave it there on fear. 0:16:37.440 --> 0:16:39.200 Days and I'll go down. So on a fear day, 0:16:39.200 --> 0:16:39.880 buy the stock. 0:16:40.640 --> 0:16:44.200 So can we broad that out Carol to say, continue 0:16:44.200 --> 0:16:46.920 to buy some of these large cap growth stories across 0:16:46.920 --> 0:16:47.320 the border. 0:16:47.960 --> 0:16:49.640 Where do we try to find some value out there? 0:16:50.600 --> 0:16:54.480 No, I definitely feel like the value is long large 0:16:54.480 --> 0:16:57.800 cap growth. Frankly, the leaders and the bigger stocks are 0:16:57.800 --> 0:17:00.560 getting bigger. They're in a position with all the cash 0:17:00.600 --> 0:17:02.800 on their ballad sheet to be very muscular to make 0:17:02.840 --> 0:17:05.840 the innovative deals, to make long term investments where other 0:17:05.880 --> 0:17:09.480 companies are struggling. So in tech, at least, bigger is 0:17:09.560 --> 0:17:12.880 much better and that's where you need to stay. And again, 0:17:13.040 --> 0:17:16.440 if you haven't fully filled out your tech allocation, it's 0:17:16.480 --> 0:17:19.000 something to take a hard look at. In general, I 0:17:19.040 --> 0:17:22.280 think growth continue to outperform value. It has for over 0:17:22.359 --> 0:17:25.880 ten years, and I don't see that trend ending anytime soon. 0:17:25.960 --> 0:17:28.480 Although it's still very prutent to own the entire SMP, 0:17:29.000 --> 0:17:31.720 the US stock market is going to continue to outperform 0:17:31.760 --> 0:17:34.320 the rest of the world, certainly for the foreseeable future. 0:17:34.960 --> 0:17:39.240 You, Carol, you didn't mention Apple. You know you're talking 0:17:39.240 --> 0:17:42.000 about large cap growth. We're talking about tech. I asked 0:17:42.000 --> 0:17:44.080 an Apple you didn't talk about. It makes me think 0:17:44.119 --> 0:17:46.400 that that's not in this thesis you have. 0:17:47.200 --> 0:17:49.119 Well, I mean the problem that I've always had with 0:17:49.160 --> 0:17:51.320 Apple is I feel like their product set is not 0:17:51.480 --> 0:17:52.639 that broad. 0:17:52.880 --> 0:17:54.120 I mean, Okay, how. 0:17:53.920 --> 0:17:56.920 Many iPhones do people really need? Yes, you might upgrade 0:17:56.920 --> 0:17:58.359 the phone that you have, that, are you really going 0:17:58.440 --> 0:17:59.400 to penetrate. 0:17:59.080 --> 0:18:01.159 Larger groups of new users. 0:18:01.200 --> 0:18:03.960 I'm not so sure about that. They're very expensive. We're 0:18:04.000 --> 0:18:05.480 in a high inflation market. 0:18:05.760 --> 0:18:06.560 I'm not as. 0:18:06.480 --> 0:18:09.359 Excited about Apple as I am about the other big 0:18:09.359 --> 0:18:13.240 tech companies like Amazon, certainly Microsoft, in Nvidia. 0:18:13.080 --> 0:18:17.040 We've got Google, even Facebook. You've got companies. 0:18:16.600 --> 0:18:20.560 That are branching out into more areas of growth and expansion. 0:18:20.560 --> 0:18:23.600 And to me, Apple's fairly focused. The car thing was 0:18:23.640 --> 0:18:25.680 a mistake and now they have to backtrack on that. 0:18:26.440 --> 0:18:27.959 I mean, they're still always going to be in the 0:18:27.960 --> 0:18:30.600 top five. Don't get me wrong, you can own them. 0:18:30.400 --> 0:18:33.440 I'm just not in love with them. As let's say 0:18:33.440 --> 0:18:34.800 the leading story. 0:18:34.880 --> 0:18:36.960 So are you in love with Microsoft and Amazon? 0:18:38.240 --> 0:18:40.960 Yes, I've always been in love with Amazon since the beginning, 0:18:41.000 --> 0:18:43.800 since they went public. Microsoft, I think is very very 0:18:43.880 --> 0:18:46.000 strong and will continue to be. So they have a 0:18:46.119 --> 0:18:48.760 much stronger focus on, i think, the corporate side of 0:18:48.760 --> 0:18:50.840 the business, and that's very smart because all of this 0:18:50.960 --> 0:18:55.520 AI innovation will start affecting corporate America and Microsoft will 0:18:55.560 --> 0:18:58.160 most likely be one of the main delivery mechanisms because 0:18:58.160 --> 0:19:01.679 they're embedded in so many corporate systems and so many 0:19:01.800 --> 0:19:05.359 you know, Outlook systems and all the cloud storage that 0:19:05.359 --> 0:19:05.800