WEBVTT - Apple Soars Post-Earnings and Jobs Data Disappoints 0:00:02.600 --> 0:00:07.320 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.840 --> 0:00:09.520 From Marhart. 0:00:09.680 --> 0:00:14.120 We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:14.440 --> 0:00:18.480 This is Bloomberg Technology with Caroline Hide and Ed Louvelove. 0:00:33.120 --> 0:00:35.960 I Meed Lovelo in San Francisco. Caroline Hides off today. 0:00:35.960 --> 0:00:39.400 This is Bloomberg Technology coming up. Apple saws amid an 0:00:39.440 --> 0:00:43.200 upbeat forecast and record buyback, full coverage throughout the hour, 0:00:43.280 --> 0:00:46.520 plus tech jumps and market traders re up their rate 0:00:46.560 --> 0:00:50.440 cup bets as US jobs data disappoints to the downside, 0:00:50.600 --> 0:00:52.880 and we sit down with the CFO of Coinbase to 0:00:52.920 --> 0:00:56.280 break down the company's first quarter results. 0:00:56.720 --> 0:00:57.560 Let's get right to our. 0:00:57.480 --> 0:01:00.760 Top story, and that top story is Apple shares are 0:01:00.760 --> 0:01:03.000 actually on track in the moment for their biggest jumps 0:01:03.000 --> 0:01:06.480 since November of twenty twenty two, the biggest announced five 0:01:06.520 --> 0:01:09.600 back in US company history. Probably has some part to 0:01:09.680 --> 0:01:12.640 play in that. But then there's the story, which is simple, 0:01:12.880 --> 0:01:15.160 Things weren't as bad for the iPhone in the first 0:01:15.200 --> 0:01:18.600 quarter calendar quarters perhaps we thought they might be. And 0:01:18.600 --> 0:01:21.319 then there's the question, what on earth is Apple doing 0:01:21.400 --> 0:01:23.600 in the realm of generative AI. Let's get right to 0:01:23.640 --> 0:01:26.760 Bloomberg's chef correspondent Mark German and Mark long Day for 0:01:26.800 --> 0:01:29.120 you yesterday, long night. But I think that sums it 0:01:29.200 --> 0:01:32.200 up right, not so bad as we had feared, but 0:01:32.240 --> 0:01:34.440 we still have questions about the path forward. What did 0:01:34.480 --> 0:01:35.840 executives tell us last night? 0:01:36.040 --> 0:01:37.600 Yeah, and I think you're exactly right. 0:01:37.680 --> 0:01:40.600 As always, things were not as bad as we anticipated, 0:01:40.680 --> 0:01:44.840 or not we anticipated. Wall Street anticipated with their estimates, 0:01:45.000 --> 0:01:48.280 but things also weren't great, right. They still had about 0:01:48.280 --> 0:01:51.280 a five billion dollars decline on overall revenue. They still 0:01:51.320 --> 0:01:54.200 had a pretty big decline on the iPhone. The Mac 0:01:54.240 --> 0:01:57.080 and services were two bright spots. The iPad came in 0:01:57.120 --> 0:02:01.160 lower than anticipated, even though people knew that new models 0:02:01.160 --> 0:02:04.800 are coming out next week. And Wearable's home and accessories 0:02:04.960 --> 0:02:07.840 that was quite disappointing, coming in at about seven point 0:02:07.960 --> 0:02:11.120 nine billion, right, the lowest metric for that category in 0:02:11.320 --> 0:02:14.200 several quarters, despite the fact that the vision pro in. 0:02:14.160 --> 0:02:16.680 That segment launched on February second. 0:02:17.120 --> 0:02:21.080 Now looking ahead, the big thing, artificial intelligence. It felt 0:02:21.080 --> 0:02:23.320 like every other question on the call was about AI. 0:02:23.480 --> 0:02:26.720 In Apple's plans for jen Ai, Tim Cook Luku, my history. 0:02:26.880 --> 0:02:28.720 They didn't move an inch on that front. You'll hear 0:02:28.760 --> 0:02:31.520 more about that on June tenth, though the Worldwide Developer Conference. 0:02:32.160 --> 0:02:34.079 You've kind of already set out the chronology of what's 0:02:34.120 --> 0:02:35.640 going to happen on the afront. We'll get to that 0:02:35.680 --> 0:02:38.920 in a second. China is a story in and of itself. 0:02:39.040 --> 0:02:42.720 There are some idiosyncratic things about product lines that do 0:02:42.840 --> 0:02:45.320 well and those that don't. So I think iPhone was 0:02:45.360 --> 0:02:48.400 probably brighter in China than expected. But I think what 0:02:48.520 --> 0:02:51.079 stuck out to me is is a concession maybe from 0:02:51.120 --> 0:02:55.160 Tim Cook, that China is becoming a more competitive marketplace 0:02:55.160 --> 0:02:57.519 for them. 0:02:58.000 --> 0:03:01.480 He certainly mentioned several times that China's the most competitive 0:03:01.480 --> 0:03:04.440 market in the world. Now, the most interesting thing that 0:03:04.480 --> 0:03:07.480 happened with the China numbers yesterday is that China came 0:03:07.520 --> 0:03:09.600 in about a billion better than expected. It was still 0:03:09.639 --> 0:03:12.320 about a billion dollar decline, But what Tim Cook said 0:03:12.360 --> 0:03:13.800 is the iPhone actually. 0:03:13.440 --> 0:03:15.200 Grew in mainland China. 0:03:15.360 --> 0:03:19.160 Right now, this is super interesting because Counterpoint Intelligence, id 0:03:19.360 --> 0:03:21.600 C some other analyst firms came out and said that 0:03:21.639 --> 0:03:25.040 the iPhone was really cratering during the quarter in China. 0:03:25.160 --> 0:03:26.639 Now, the discrepancy there. 0:03:26.639 --> 0:03:29.000 Is that some may be talking about unit sales that 0:03:29.120 --> 0:03:31.440 might be the analysts, and Tim Cook is probably talking 0:03:31.480 --> 0:03:34.840 about revenue. Now, if the asps went up, there is 0:03:34.880 --> 0:03:38.760 a chance that unit sales were still down, but revenue 0:03:38.920 --> 0:03:41.080 actually was up and they probably grew a little bit 0:03:41.120 --> 0:03:45.280 in mainland China. Either way, we still are facing concerns 0:03:45.280 --> 0:03:49.240 in China for Apple. Right there is newfound competition from 0:03:49.280 --> 0:03:53.240 Huawei Shaomi, there are those government bands. But certainly Tim 0:03:53.240 --> 0:03:56.080 Cook and Lukeu Mystry, they actually seemed pretty optimistic about 0:03:56.160 --> 0:03:59.160 China when it came to the iPhone. Where Cook seemed 0:03:59.240 --> 0:04:01.840 less optimistic was about the company's other products. 0:04:01.880 --> 0:04:03.640 Now, he didn't explain what's. 0:04:03.440 --> 0:04:06.240 Doing so poorly for Apple and China why revenue is 0:04:06.280 --> 0:04:09.840 down in China. Clearly it is down, but he didn't 0:04:09.880 --> 0:04:11.840 get into it. But he said Apple does have work 0:04:11.880 --> 0:04:12.200 to do. 0:04:12.480 --> 0:04:12.800 Now. 0:04:13.120 --> 0:04:16.279 One other thing, Apple could have grown quarter over quarter. 0:04:16.360 --> 0:04:19.560 He didn't specify when that growth occurred. They may be 0:04:19.680 --> 0:04:21.760 down on an annual basis for the iPhone in China. 0:04:22.040 --> 0:04:24.880 Maybe they grew over the last quarter, Maybe they grew 0:04:25.040 --> 0:04:26.400 at some period during the quarter. 0:04:26.680 --> 0:04:27.560 So there's a. 0:04:27.480 --> 0:04:30.640 Little more explanation to do from Cook, but obviously they're 0:04:30.640 --> 0:04:31.760 not going to give those details. 0:04:32.360 --> 0:04:35.120 Well, in the big area where explanation is needed is 0:04:35.120 --> 0:04:37.840 the roadmap for generative AI. You know just what I 0:04:37.880 --> 0:04:40.520 would say to our audience. Check out Mark's latest reporting 0:04:40.920 --> 0:04:44.120 next week with the let loose the focus is iPad WWDC. 0:04:44.240 --> 0:04:46.840 In June, we should find out some more about generative AI. 0:04:46.920 --> 0:04:49.400 Bloomberg's Mark German, thank you very much. Let's stick with 0:04:49.440 --> 0:04:52.640 Apple joining us as gene monster of deep water asset 0:04:52.720 --> 0:04:55.200 management and gene You know, you were pretty clear in 0:04:55.240 --> 0:04:58.000 your posts on social media last night how you read 0:04:58.120 --> 0:05:02.800 the the earnings. What's the standout story for you? Just 0:05:02.880 --> 0:05:05.160 one thing that you learned from Apple last night. 0:05:07.120 --> 0:05:09.680 The one piece I learned is that the core business, 0:05:09.760 --> 0:05:12.760 as Mark said, it's not doing great, but it's holding together. 0:05:13.360 --> 0:05:15.920 And there was again this fear that the estimates would 0:05:15.920 --> 0:05:19.400 be revised downward for the June quarter. They basically maintain them, 0:05:19.880 --> 0:05:22.240 and I think that that is testimony to just the 0:05:22.320 --> 0:05:25.240 strength of their brand across the product lines, whether it's 0:05:25.320 --> 0:05:29.080 be the software and the services or to even iPhone 0:05:29.080 --> 0:05:32.039 being down. It's held together. And what I take away 0:05:32.080 --> 0:05:34.800 from that is that in the June quarter we're going 0:05:34.880 --> 0:05:37.320 to see revenue growth really for the first time in 0:05:37.400 --> 0:05:41.119 two years. Over the last two years, Apple's revenue growth 0:05:41.120 --> 0:05:44.800 has averaged down zero point three percent. It's going to 0:05:44.839 --> 0:05:47.960 be up a couple percent in June, probably four percent 0:05:48.040 --> 0:05:51.920 in September, and six percent in December. So that that turnaround, 0:05:51.920 --> 0:05:56.160 that reacceleration is the one thing that stepped out to me, Gene. 0:05:56.200 --> 0:05:59.320 I'm showing our audience and you a table, and the 0:05:59.400 --> 0:06:04.640 table shows the list of largest announced company share buybacks 0:06:04.640 --> 0:06:08.600 in history. And unless you've been living under a rock, 0:06:08.680 --> 0:06:11.040 you'll see there's only one name on that list, Gene, 0:06:11.440 --> 0:06:15.560 It's Apple. What's the point in a one hundred and 0:06:15.600 --> 0:06:16.840 ten billion dollar buyback? 0:06:18.480 --> 0:06:21.200 Now, there's two points. Number one is they're sending a 0:06:21.320 --> 0:06:24.720 message to investors that they're going to continue to return 0:06:24.839 --> 0:06:29.320 capital despite going into an investment phase related to AI. 0:06:29.360 --> 0:06:31.520 They've made that very clear that they think AI is 0:06:31.520 --> 0:06:33.839 going to be significant. Cooke said, it's going to impact 0:06:33.920 --> 0:06:36.880 most of their products, not just software but hardware. And 0:06:36.960 --> 0:06:40.520 so the fact that they're reiterating and increasing this buyback 0:06:40.600 --> 0:06:43.520 during that period, that's one piece to it. A second 0:06:43.680 --> 0:06:47.320 is there cadence to getting to net cash neutral and 0:06:47.400 --> 0:06:49.120 so this of course has been a goal for them 0:06:49.160 --> 0:06:49.440 for the. 0:06:49.360 --> 0:06:50.520 Past five years. 0:06:50.960 --> 0:06:53.960 Right now, it's at fifty seven billion dollars, so they 0:06:54.000 --> 0:06:56.240 want to bring that down to zero. That means they 0:06:56.240 --> 0:06:58.799 have the same amount of cash as they have in debt. 0:06:59.360 --> 0:07:01.680 And what I I see that step up from ninety 0:07:01.720 --> 0:07:04.000 to one hundred and ten billion in the buyback is 0:07:04.040 --> 0:07:07.600 an indication that they want to quicken that pace. The 0:07:07.600 --> 0:07:10.400 CFO Luca did mention on the call that they think 0:07:10.400 --> 0:07:13.440 that they won't get to net cash neutral anytime soon. 0:07:14.040 --> 0:07:16.400 So that shows that just the strength of the overall 0:07:16.480 --> 0:07:19.440 business is really powering this buyback. I think investors should 0:07:19.440 --> 0:07:24.120 remain confident that ultimately that this business is producing just 0:07:24.120 --> 0:07:26.480 an incredible amount of cash, almost ninety billion dollars a 0:07:26.520 --> 0:07:30.760 year in free cashual. It's remarkable despite the revenue being 0:07:30.800 --> 0:07:32.760 down basically five percent year rear. 0:07:33.480 --> 0:07:36.880 Well, we're speaking with Gene Monster of deep Water Asset Management. 0:07:37.360 --> 0:07:40.080 In Gene you do a deep body of research into Apple, 0:07:40.160 --> 0:07:42.880 You yourself hold Apple shares. I believe the firm does 0:07:42.920 --> 0:07:47.000 not argue with me on this one. There is a 0:07:47.040 --> 0:07:50.320 frustration from people around the world. They might not be investors, 0:07:50.360 --> 0:07:53.080 they might just be consumers that have an iPhone and 0:07:53.120 --> 0:07:57.239 they say, come on, man, this is Apple Coopertino, stop 0:07:57.280 --> 0:08:00.440 messing around with buybacks and actually do some on the 0:08:00.440 --> 0:08:04.640 innovation side. Give us the generative AI platform on iOS, 0:08:04.640 --> 0:08:08.280 so give us a serious hard grade hardware upgrade. 0:08:08.440 --> 0:08:09.760 Do you have any sympathy with that? 0:08:11.960 --> 0:08:16.120 Absolutely? I mean Apple has been painfully silent on the 0:08:16.160 --> 0:08:19.520 topic in twenty twenty three. Of course, as Mark mentioned, 0:08:19.560 --> 0:08:22.400 about every other question on the call was related to AI. 0:08:22.520 --> 0:08:25.800 That is, now they've had a coming out, but they 0:08:25.840 --> 0:08:28.600 are late, There's no question about it. And another piece 0:08:28.640 --> 0:08:32.240 to just some sympathizing with that view. Another piece to 0:08:32.320 --> 0:08:35.679 this is that they got to ask a question about Capex, 0:08:36.559 --> 0:08:39.319 basically going back to what happened with Meta and Google 0:08:39.400 --> 0:08:42.880 and Microsoft and all their step ups, increasing Capex by 0:08:43.000 --> 0:08:46.560 fifty to ninety percent in calendar twenty four. And the 0:08:46.600 --> 0:08:49.720 expectation is that if Apple is serious about AI, they're 0:08:49.760 --> 0:08:52.280 going to be pushing their Capex at a similar rate. 0:08:52.840 --> 0:08:55.520 And Luca kind of sidestepped the question. He just kind 0:08:55.520 --> 0:08:59.200 of outlined how they approach Capex in part firsthand by 0:08:59.240 --> 0:09:01.800 their own out and they also work with third parties, 0:09:01.800 --> 0:09:04.120 but he didn't give any indication that that would be 0:09:04.160 --> 0:09:07.960 stepping up meaningfully. And they actually maintain their margin guidance, 0:09:08.000 --> 0:09:13.000 and so I think that investors can show some I 0:09:13.000 --> 0:09:18.400 think some frustration related to kind of again the pace 0:09:18.480 --> 0:09:20.760 we're going to know more in June. I would have 0:09:20.840 --> 0:09:23.720 welcomed them to have said they're spending a boatload on Capex, 0:09:23.720 --> 0:09:26.120 for example. I don't think they're going to build a 0:09:26.160 --> 0:09:30.240 foundation model to the same level that Microsoft, Google and 0:09:31.360 --> 0:09:33.520 Meta are doing. And so I think part of that 0:09:33.720 --> 0:09:36.800 is some of that frustrations to be understood. One last 0:09:36.800 --> 0:09:39.880 piece is that there are on board on this, and 0:09:39.920 --> 0:09:41.880 I think that they're going to show some exciting things 0:09:42.120 --> 0:09:43.880 in June and beyond related to AI. 0:09:44.640 --> 0:09:46.839 Well, let's scratch a little bit deep. 0:09:46.920 --> 0:09:49.640 I mean, as often is the case with Luke and 0:09:49.679 --> 0:09:52.240 Mistrea in particular, it's reading between between the lines. I 0:09:52.280 --> 0:09:54.439 think that's probably a little bit kind. This is what 0:09:54.520 --> 0:09:57.600 Luca Miifu told Bloomberg's Emily Chang last night. We have 0:09:57.840 --> 0:10:00.760 very exciting things to talk about soon. But obviously we 0:10:00.800 --> 0:10:04.040 think it's a great opportunity, it's a great new technology. 0:10:04.280 --> 0:10:08.679 We think it's got a lot of potential. What does 0:10:09.240 --> 0:10:13.720 an Apple generative AI tool or platform look like in 0:10:13.760 --> 0:10:19.000 your mind? If indeed reading between those lines, Apple is 0:10:19.040 --> 0:10:20.360 working on something to that effect. 0:10:21.880 --> 0:10:23.319 So it's going to think of it as in kind 0:10:23.360 --> 0:10:25.920 of two or three phases. The first phase, what we'll 0:10:25.960 --> 0:10:28.480 see in the back half of this year is new 0:10:28.480 --> 0:10:31.720 operating systems iOS and mac os. It's just going to 0:10:31.880 --> 0:10:35.800 simply integrate generative AI into it. Siri may be able 0:10:35.800 --> 0:10:37.800 to have a conversation with Siria instead of just a 0:10:37.840 --> 0:10:41.320 point answer. You be able to I suspect this year, 0:10:41.400 --> 0:10:42.880 be able to ask your phone to book you an 0:10:42.920 --> 0:10:44.600 uber to the airport, and then it will just take 0:10:44.640 --> 0:10:47.320 care of it. I think they'll allow developers to start 0:10:47.320 --> 0:10:51.360 building AI into their apps with some foundation, a small 0:10:51.400 --> 0:10:54.360 foundation model that they'll come out with, So I would 0:10:54.400 --> 0:10:56.840 say early stage. I think the iPhone this fall they 0:10:56.880 --> 0:11:00.199 will talk a lot about having iPhone AI still ken 0:11:00.240 --> 0:11:02.360 in it, and so that's kind of the first stage. 0:11:02.440 --> 0:11:05.000 Not very exciting, but at least the first step. The 0:11:05.080 --> 0:11:09.280 second piece is really exciting, which is related to agent 0:11:09.440 --> 0:11:11.800 or personalized or agentic AI. You can use any one 0:11:11.840 --> 0:11:14.000 of those phrases, but this is the idea of that 0:11:14.080 --> 0:11:17.520 you ask the device to do something for you, and 0:11:17.000 --> 0:11:19.520 it has multiple steps to it, and it goes out 0:11:19.559 --> 0:11:23.559 and does it itself and this is something that Apple 0:11:23.559 --> 0:11:26.720 has a unique opportunity, and especially around privacy, and Cook 0:11:26.800 --> 0:11:30.000 mentioned that in his prepared remarks. He talked about privacy 0:11:30.040 --> 0:11:32.400 as being a competitive advantage for Apple when it comes 0:11:32.400 --> 0:11:34.720 to AI, and I think what he's hinting to is 0:11:34.720 --> 0:11:38.679 their belief in agent AI and so how that presents 0:11:38.720 --> 0:11:41.520 itself as probably in twenty five twenty twenty five, we'll 0:11:41.520 --> 0:11:44.520 start to see this built more into the hardware and 0:11:44.600 --> 0:11:48.640 potentially even subscription services that allow you to do more 0:11:48.720 --> 0:11:51.840 things based on AI. And it's I think that, to 0:11:51.880 --> 0:11:53.400 me is a really exciting product. 0:11:54.200 --> 0:11:56.320 Jane, it's been a while since you've been on the show, 0:11:56.360 --> 0:11:58.480 so let me milk out some value for the audience 0:11:58.520 --> 0:12:01.720 while we got you. Do you understand what's happening in 0:12:01.760 --> 0:12:06.080 the smartphone market in China? Do you understand the trajectory 0:12:06.120 --> 0:12:10.120 of where the iPhone's going in relation to the domestic 0:12:10.160 --> 0:12:16.360 OEM's largely Android base that appear to be doing quite well. 0:12:16.480 --> 0:12:18.400 It's definitely something we pay a lot of attention to. 0:12:18.600 --> 0:12:21.719 And I think that the biggest force there is that 0:12:22.120 --> 0:12:25.200 there is a geopolitical element to it, even though this 0:12:25.320 --> 0:12:28.600 is not explicitly spoken about with Chinese leadership. I think 0:12:28.600 --> 0:12:33.240 that there is a recommendation that any government employee starts 0:12:33.240 --> 0:12:37.559 to move to homemade phones, which makes sense from their perspective, 0:12:37.559 --> 0:12:38.000 and that's. 0:12:37.840 --> 0:12:38.480 A big pool. 0:12:38.520 --> 0:12:44.040 There's a large population. We're talking about fifty million high 0:12:44.160 --> 0:12:46.720 end phone users that work with the government, and that 0:12:46.760 --> 0:12:48.720 can have a big impact on Apples on two hundred 0:12:48.720 --> 0:12:50.040 and fifty million phones a year. If you get a 0:12:50.040 --> 0:12:52.520 little bit of those two push to a competitor, I 0:12:52.520 --> 0:12:53.760 think that that has an impact. 0:12:54.200 --> 0:12:54.880 I think that the. 0:12:54.800 --> 0:12:59.679 Good news that's negative just there's no way to look 0:12:59.720 --> 0:13:02.280 at it any different. The good news is that the 0:13:02.320 --> 0:13:04.800 comps do get easier. And second is the company is 0:13:04.840 --> 0:13:08.120 talking about diversifying away from China. They spend a little 0:13:08.120 --> 0:13:09.480 bit of time on the call talking about that. But 0:13:09.520 --> 0:13:12.800 to answer your question, I think China is still going 0:13:12.840 --> 0:13:15.440 to remain really important. As a percentage of revenue. It's 0:13:15.440 --> 0:13:17.560 about nineteen percent right now. I suspect that's going to 0:13:17.600 --> 0:13:20.400 drift down to thirteen to fifteen percent over the next 0:13:20.440 --> 0:13:21.400 few years. 0:13:21.720 --> 0:13:24.439 Gene Monster Dewar's asset Management. Great to catch up. 0:13:24.600 --> 0:13:25.840 It's been to thank you Edgie. 0:13:26.280 --> 0:13:26.600 All right. 0:13:26.640 --> 0:13:28.000 Coming up on the show, we're going to be joined 0:13:28.000 --> 0:13:31.400 by Jamaira Herrera from Reach Capital to break down the 0:13:31.480 --> 0:13:34.080 latest jobs report and what that means to the technology sector. 0:13:34.160 --> 0:13:36.120 It's coming out next be right back. This has been 0:13:36.160 --> 0:13:53.840 berg technology. So let's crunch the numbers out of the 0:13:53.840 --> 0:13:56.880 April report. They came in softer than expected, with non 0:13:56.920 --> 0:14:00.520 farm payrolls advancing one hundred and seventy five thousand last month, 0:14:00.760 --> 0:14:04.239 which is the smallest gain in six months. The unemployment 0:14:04.320 --> 0:14:07.960 rate also ticked up to three point nine percent and 0:14:08.040 --> 0:14:11.000 wage gain slow. That's the kind of data that the 0:14:11.040 --> 0:14:14.160 Fed's looking at. Let's break it all down, which Amaira Herrera, 0:14:14.480 --> 0:14:17.280 who's a partner at Each Capital, really zeroed in on. 0:14:17.240 --> 0:14:19.920 The future of work, the future of labor. 0:14:21.440 --> 0:14:23.800 When you track the data, what are you looking for 0:14:24.080 --> 0:14:25.120 in these job numbers? 0:14:26.760 --> 0:14:29.320 Yeah, thank you so much for having me ed one. 0:14:29.480 --> 0:14:33.240 I'm generally looking at the data. I'm looking at one. 0:14:33.480 --> 0:14:35.920 What are the sectors that are driving the growth that 0:14:35.960 --> 0:14:40.240 we're seeing And we've seen pretty consistently healthcare has been 0:14:40.440 --> 0:14:43.760 a big driver of job growth across the US economy. 0:14:44.320 --> 0:14:45.840 In this past month. 0:14:45.600 --> 0:14:50.520 We also saw retail, warehouse and transportation as well continue 0:14:50.520 --> 0:14:53.080 to be a big driver in job growth. Some of 0:14:53.120 --> 0:14:55.880 the other things we think about and consider as well 0:14:55.960 --> 0:14:59.920 are wage increases. So wage increased five point two po 0:15:00.120 --> 0:15:02.880 sent in the last month, a little lower than we anticipated. 0:15:04.160 --> 0:15:07.640 And we also look at other numbers like what are 0:15:07.680 --> 0:15:10.880 the openings that we see the job openings and so 0:15:11.000 --> 0:15:15.480 the Jolts report came out on Wednesday and those continue 0:15:15.520 --> 0:15:18.760 to be relatively healthy and stable. And so those are 0:15:18.760 --> 0:15:22.040 some of the numbers were that we're generally looking at 0:15:22.920 --> 0:15:25.760 when we're looking deeply into these labor market reports. 0:15:25.840 --> 0:15:29.240 Right, did you learn anything about the technology sector this morning? 0:15:30.720 --> 0:15:33.560 Yeah, I mean when it came to the technology sector, 0:15:34.920 --> 0:15:36.640 it's a little bit of a tale of two cities. 0:15:36.640 --> 0:15:39.080 There's a bit of a cognitive dissonance. When you look 0:15:39.120 --> 0:15:41.400 at the labor market reports at a high level, you 0:15:41.480 --> 0:15:45.160 see unemployment continues to be under four percent, and that's 0:15:45.160 --> 0:15:48.720 for the twenty seventh consecutive month. You continue to see 0:15:48.720 --> 0:15:51.600 a high demand across some of these key industries. Like 0:15:51.680 --> 0:15:56.280 I mentioned, now you look at the technology sector more deeply. 0:15:56.320 --> 0:15:57.760 At the technology sector. 0:15:57.880 --> 0:16:02.120 Job postings for most tech jobs are below twenty five 0:16:02.160 --> 0:16:03.640 percent from pre pandemic. 0:16:03.760 --> 0:16:05.440 They're still quite. 0:16:05.160 --> 0:16:07.560 A bit of a lag in the tech sector in 0:16:07.680 --> 0:16:10.800 terms of seeing that increased demand, and you see folks 0:16:10.880 --> 0:16:13.760 that have been laid off of the past year continue 0:16:13.800 --> 0:16:18.280 to struggle to find access to two jobs, particularly if 0:16:18.320 --> 0:16:22.600 they're a non technical role. So think operations, finance, human 0:16:22.640 --> 0:16:26.600 resources in these large tech companies. And it's a hard 0:16:26.600 --> 0:16:28.800 feel to swallow because when we looked at the earning 0:16:28.840 --> 0:16:33.600 reports for the past quarter, seen over the last whether 0:16:33.640 --> 0:16:38.400 it's Meta, Microsoft, Alphabet, they're actually quite strong, but they're 0:16:38.440 --> 0:16:42.960 also showing discipline around maintaining operational efficiencies. And so we 0:16:43.040 --> 0:16:46.640 set we haven't yet seen that resurgence in the same 0:16:46.680 --> 0:16:49.240 way that we see the strength of labor market across 0:16:49.280 --> 0:16:50.200 these other industries. 0:16:50.920 --> 0:16:54.200 As see Jamaara hold that thought earlier today we spoke 0:16:54.280 --> 0:16:58.080 to or yesterday rather Savita Supermanian at Bank of America. 0:16:58.240 --> 0:16:59.880 Just just listen to her thesis real quick. 0:17:01.080 --> 0:17:04.119 Look, who's going to benefit from all these chips and 0:17:04.160 --> 0:17:07.880 this AI and you know automation. It's old economy companies 0:17:08.200 --> 0:17:10.600 that get more labor light. And I think that's the 0:17:10.640 --> 0:17:13.560 benefit that we could see over the next twelve to. 0:17:13.520 --> 0:17:15.240 Twenty four to a few years. 0:17:16.040 --> 0:17:18.879 I think the areas are you know, industries like ours, 0:17:18.920 --> 0:17:22.240 the banks, right, I mean banks are very labor intensive. 0:17:22.640 --> 0:17:25.040 Now there is this tool that we can use to 0:17:25.119 --> 0:17:28.359 replace people with bots and processes, et cetera. 0:17:30.240 --> 0:17:33.040 So, taking your read of the technology sector and what's 0:17:33.040 --> 0:17:36.000 the Vita just said, I think you agree with each 0:17:36.000 --> 0:17:38.960 other about the direction of travel right now, about what's 0:17:39.000 --> 0:17:42.280 happening in jobs in the technology sector, and then how 0:17:42.359 --> 0:17:45.720 technology is impacting basically old school. 0:17:45.440 --> 0:17:49.440 Economy completely and totally. 0:17:49.480 --> 0:17:52.840 I think what's really interesting whenever you have a large 0:17:52.880 --> 0:17:57.600 technology shift, oftentimes we're very very good at predicting what 0:17:57.760 --> 0:18:00.399 jobs we're going to lose. We're very very bad at 0:18:00.440 --> 0:18:02.760 predicting them. More jobs are going to be created, and 0:18:02.840 --> 0:18:06.040 so in this short term period, what we're seeing and 0:18:06.119 --> 0:18:09.919 what we're going to feel is increase automation around tasks 0:18:09.960 --> 0:18:13.800 that right now people are doing, and that will be 0:18:14.000 --> 0:18:16.800 a net productivity gain for the economy. But there is 0:18:16.880 --> 0:18:19.280 going to be some real labor market team that is 0:18:19.320 --> 0:18:22.639 felt bye employees in the short term. But over time, 0:18:22.720 --> 0:18:25.240 what we'll see is employees will be able to lean 0:18:25.280 --> 0:18:29.040 into really human tasks and there will be new jobs 0:18:29.080 --> 0:18:32.800 created in ways that we really can't anticipate right now. 0:18:33.080 --> 0:18:36.080 Right Jamira Herrera, partner at Reached Capital, great to have 0:18:36.119 --> 0:18:48.240 you on the program. US prosecutors making their closing remarks 0:18:48.280 --> 0:18:52.080 in the Google search trial, where they reiterated their argument 0:18:52.440 --> 0:18:56.480 that Google has broken antitrust laws through exclusive, multi billion 0:18:56.520 --> 0:18:59.879 dollar deals to maintain a dominant position in the market 0:19:00.160 --> 0:19:04.000 online search and related advertising. Let's bring in Bloombergs Mike Shephard. 0:19:04.480 --> 0:19:07.280 Mike's the editor that leads the kind of intersection between 0:19:07.359 --> 0:19:10.159 technology and politics, which means he's very busy at the 0:19:10.160 --> 0:19:15.000 moment that the search trial, the antitrust pursuit by the 0:19:15.080 --> 0:19:18.600 DOJ against Google, has played out over a long period 0:19:18.640 --> 0:19:21.360 of time. Just explain the basics of the closing statement 0:19:21.400 --> 0:19:22.760 and where we are in the process. 0:19:24.240 --> 0:19:26.800 Well, in this closing statement, as you said, the government 0:19:26.840 --> 0:19:30.560 repeated its argument that Google has violated anti trust laws 0:19:30.720 --> 0:19:34.880 through billions of dollars in payments to companies like Apple 0:19:35.280 --> 0:19:39.760 and Samsung and others, that we guarantee a prime position, 0:19:39.920 --> 0:19:44.920 prime location on smartphones and other devices for its for 0:19:45.640 --> 0:19:49.520 its search platform and tool, and this allowed it to 0:19:49.680 --> 0:19:52.879 turn its search business into the most dominant and the 0:19:52.920 --> 0:19:56.919 most widely used in the world and helps secure a 0:19:57.040 --> 0:20:00.920 nearly three hundred billion dollar annual stream of revenue for 0:20:00.960 --> 0:20:04.400 the company and the result of this is that there's 0:20:04.440 --> 0:20:09.000 been a stifling of innovation across the tech industry. We 0:20:09.040 --> 0:20:13.480 would have seen certain developments like AI hit the market 0:20:13.520 --> 0:20:17.000 much sooner if we're not for this to have taken place. 0:20:17.280 --> 0:20:19.159 Hey, Mike, bear with me for one second. 0:20:19.160 --> 0:20:21.719 On a day where tech Stock's a pretty markedly higher 0:20:21.800 --> 0:20:25.120 alphabet parent of Google's the one stock that's pretty low 0:20:25.160 --> 0:20:28.200 and is a points drag at the index level, very quick. 0:20:28.359 --> 0:20:30.360 I don't draw a cause or link between the move 0:20:30.400 --> 0:20:33.480 and the news headline. Just explain what happens next in 0:20:33.520 --> 0:20:34.160 this process. 0:20:35.520 --> 0:20:38.119 Well, in this case, it now goes to the judge 0:20:38.160 --> 0:20:43.159 once both sides have finished their closing arguments, And to 0:20:43.200 --> 0:20:45.880 be fair to the company, they are arguing that this 0:20:45.960 --> 0:20:49.480 is not a question of anti competitive behavior. Google is saying, hey, 0:20:49.640 --> 0:20:52.320 we just make a better product and you shouldn't penalize 0:20:52.440 --> 0:20:55.520 us for that. But it will take the judge several 0:20:55.600 --> 0:20:58.040 months to deliberate over this, to think about this. 0:20:58.119 --> 0:20:58.720 But we are. 0:20:58.600 --> 0:21:01.520 Expecting a ruling before the end of the year, and 0:21:01.960 --> 0:21:04.400 this is a significant case, he said. This is the 0:21:04.400 --> 0:21:07.040 first in a series of anti trust actions that the 0:21:07.080 --> 0:21:10.520 government is bringing against tech companies. Now we know that 0:21:10.520 --> 0:21:13.600 the Biden administration has made the whole question of competition 0:21:14.600 --> 0:21:17.920 in a focus across a number of industries, but tech 0:21:18.200 --> 0:21:20.440 is really drawing the line share of that attention. 0:21:21.320 --> 0:21:33.520 Bloomberg's Mike Shepherd out of DC, thank you, Welcome back 0:21:33.520 --> 0:21:36.960