Google Earnings and the CHIPS Act

slowest sales growth. Since we will look into these mixed results. Plus, the fifty two billion dollar Chips Act is one step closer to President Biden's desk. This means US tech companies won't have to rely so much on Taiwan, where how speaker Nancy Pelosi may visit next month Chinese government not happy about it. Will have the latest from Capitol Hill and most coordinate for cryptocurrencies. The SEC is investigating coin based over possible trading of unregistered securities, accusing a former

coin based manager of insider trading just last week. We will have all the details. We'll get to all of that in a moment, but first I want to get a look at earnings. Bringing Dan Newman, analysts for the research firm future Um all right, Dan, what are your big picture takeaways? Microsoft doesn't look good. They highlighted the strong dollar, which which Google highlighted as well, though their results looking somewhat better. Yeah, I think there were narrow

misses across the board, Emily. I think people have been kind of waiting to see when do we finally hit that inflection point where the beats stop. You know, the market has been selling like these companies haven't been performing for the past few quarters, and actually they have been performing quite well. Now we've got a number of factors. You've got effects, You've got the Ukraine, Russia, you've got shut downs in China, and all these were impacting Microsoft numbers.

But if you look, they were pretty narrow misses on both top and bottom line. I think Microsoft said there's something like a billion dollars tied to the shutdowns that I mentioned in China, to the f X impact as well as the Ukraine Russia, and that's actually about six cents which would have taken them to hitting that EPs target.

The Cloud number is still good, it's it's decelerating little bit um and you saw a dynamics through the RP, which is something I've been looking close as at enterprise software. Barring that number stayed really strong, but some of the other areas, again, it just seemed like narrow misses everywhere, Emily and so that was Microsoft, And of course what you mentioned with with Google is the ad market seemed

to be stronger with Alphabet than people had expected. It has slowed, But the question is do people outside of us who are watching this every day realize we're in a recession. If you saw Prime Day, if you look at the advertising spend, it looks like people are still shopping shopping. Indeed, I just got off the phone with Alphabet CFO with poor At and she used that word uncertainty a number of times. I'm expecting to get even more color on the earnings call with so In Darperty

about just what kind of uncertainty. But here she says, uncertainty is the best way to characterize what we're seeing. But the reality of the data is that it's complicated. The results reflect the lapping of significant growth last year plus uncertainty in the global economic environment. And what she talked about was that there are a variety of factors at play here, but it's really challenging to disaggregate them. So you know, they're continuing to use this word uncertainty.

What do you take away from that, Well, it's the reason we're having a hard time deciding whether or not we're in recession right now. You see some of the numbers indicate that there's still strength, there's some growth across tech, because again, all these numbers are growth on a youear over your basis. So we thought at all this digital transformation acceleration, and these these numbers are better now. They're decelerated growth for both Google and for Microsoft, but they're

up on a year over your basis. So people are spending more money on technology, more money on advertising than a year ago when we thought the market was growing at an explosive rate. So now we're entering this slowdown period. If you've got inflation, we've got an f X, we've got interest rate hikes. And I think some of the reason that there's some enthusiasm about these misses as we've been waiting for this, we've been waiting to see some of this FED policy, some of the monetary policy that's

coming into place. Actually uh, having companies start to slow down, having guided start to slow down and say, look, some of what's happening is working. The demand is slowing, but I still lean that enterprise tech, I still lean that e commerce and platforms will be remarkably strong because we've

become hyper dependent on them throughout the pandemic. I don't see that changing, and companies that are gonna want to wade their way through this slow in the economy are going to be looking to technology to help automate, to invest in AI and utilize cloud technologies to actually scale their businesses with less big overhead resources and of course slowed hiring, which means technology is gonna have to take

the runt of the way now. When it came to advertising specifically, she talked about the growth driven by travel and retail, which continued to be strong. Makes sense, of course, as we are coming out hopefully, hopefully, hopefully of a pandemic, But she did talk about the pull back and she used that word pulled back by some advertisers, reflecting uncertainty about a number of factors they view as again, as

I said, challenging to disaggregate. What do you make of her use of that word pulled back because everybody is wondering, is what we saw a snap in Twitter going to impact Google as well. Is Google somehow um immune to this given that it is such a broad based business or not. Well, the numbers indicate that there's clearly prioritization,

and so Google seems to be above the fold. Whereas we saw what happened to Snap and what's happened to Met over the past few quarters, where there has been more pulled back, and of course ruthport I was saying, they are seeing some pullback too, but that's more deceleration

than overall slowing of growth altogether. Uh, the indicators here are that companies that are going to go online still believe Google is their best bet, if not, you know, one of their best bets, and that's why we're continuing to see the spend there. I do think some companies that understand what's going on are starting to look at at you know, whether that slowing hiring, slowing addicts expense.

We're seeing that across the board. We've heard the announcements from companies that are going to do less hiring, that are going to spend less on advertising, and that's part of this period of economic uncertainty and slow down. So none of this is surprising. I think smart companies understand you cannot entirely save your way to growth in the future, but you might want to slow down temporarily until we

get a good handle of what's going on here. And there are so many factors, so much inconsistency in the data, and that's why, like I said, we're having a hard time making final decisions. The Feds having hard time, The markets are having hard time because we're seeing some numbers look good and some numbers look incredibly bad or at risk right now, right and maybe even Google's having a hard time, and clearly Microsoft is having a hard time.

I did ask her, by the way, about competition from TikTok in particular, and they doubled down on clearly people want to consume short form videos. So she talked about YouTube shorts, and she talked about focusing on engagement and the experience and and the hope is that monetization will come later. Okay, Dan Newman, if you sure, thanks for helping us to unpack a lot of very difficult and

challenging the circumstances to separate out appreciate it well. Twitter Neolon Musk are fighting about the start date for their Delaware trial. Twitter wants to begin October ten, Musque asking for October seventeen. A lawyer for Musk says the social media platform isn't producing the requested documents in a timely way. He also said Twitter is resisting turning over raw data, causing a quote log jam in the production of evidence.

The defense needs coming up the Senate to vote on the All Important Chips Act, as Ali Baba pushes to list in Hong Kong amid rising tensions between the US and China. The latest from d C. Next, this is Bloomberg today the Senate advance of fifty two billion dollar bill that would bolster the U S semi can after industry setting it up for a final vote. This comes as how Speaker Nancy Pelosi seems dead said on plans to visit Taiwan next month. Beijing as warned Pelosi not

to come. The Chinese government, of course, is long considered Taiwan to be part of its territory. It's also the chip capital of the world. Bloomberg Government's Emily Wilkins has the details from Capitol Hill. So a lot going on here, as always in the U S. China relationship. Emily, let's start with the Chips act. Just how close are we? So? Right now, the Senate has cleared two procedural votes, which means that all they have to do is now actually

pass the legislation. They're looking at doing that tomorrow. Remember, there's a lot of Senate rules about timing and stuff that prevents them from doing it right now, But at this point, it absolutely seems like they have the votes. We've seen a lot of bipartisan support for this one,

a number of Republicans joining Democrats on these votes. In fact, even though we do have a couple of Democrats who aren't here right now because they've tested positive for COVID nineteen, it still seems like this is going to have this

support to clear the Senate. From there will move on to the House, where the House leaders have promised a very quick vote on This really shows that this is something that folks want to get done, especially before the House is scheduled to leave town on Friday for a long recess. Difficult to isolate, but how will this particular bill impact US China tentions? I mean, to a certain extent.

This bill initially start out as something that was supposed to really bolster US competitiveness with China, and it will still do that in some regards making sure that the US is able to produce semi conductors, boasting the National Science Foundation, But it's not really the strong anti China bill that it was at the beginning. Most provisions have gotten stripped out in the interest of time and getting

something done quickly. There really aren't that many days left for lawmakers to do work before the November midterm elections, and so honestly, this is probably a more China friendly bill than what we initially began to see and to start out with. But that doesn't mean that President Biden is going to have an easy fall with as a chi Jinping. Biden said he'd be speaking with the Chinese president within the next ten days, and of course, something that's going to be coming up during that call is

how Speaker Nancy Pelosi's proposed trip to Taiwan. On this proposed trip to Taiwan, this would be the first of its kind in twenty five years. We've heard these warnings from the Chinese government do not come, but it seems like this trip is going to happen. What do you make of this and how this trip will impact the U S China relationship. So one notable thing is that President Buden was actually a little bit hesitant on Pelosi

going on this trip. But you have heard a lot of lawmakers from her own party and from Republicans saying that Pelosi shouldn't back down to China, shouldn't back down to Beijing's concerns, and should absolutely go. You heard a Republican Senate Minority Leader, Mitch McConnell say today that Pelosi would be handing China a victory if she was to cancel her trip now, and you've heard similar support from

other Democrats and Republicans. So it seems like at this point, even though the executive branch is a little bit timid about what the fallout from this trip could be, a lot of Pelosi's colleagues here in Congress are absolutely supporting uh this planned trip all right. Emily Wilkins for us

at the Capital, Emily, thank you. Meantime, another twist in this story, Ali Baba will seek a primary listing in Hong Kong, paving the way for investors in China to directly buy shares of the company's most prominent e commerce company for the first time. This will also in Trench Hong Kong as an alternative to US markets. Here to

discuss global lexi TS Director of Research, Pedro Palindroni. Pedro, I remember interviewing Jack mob the CEO of Ali Baba at the time, on the floor of the New York Stock Exchange, And here we are years later, Ali Baba proposing this secondary listing in Hong Kong. Why now, yeah, well thanks for having me, Emily. You know, if we step back for a second, Alibaba is essentially facing two

dimensions of regulatory rest right. First, they're getting fine or punished by domestic regulators for monopolistic practices or even creating national security risk given the large amount of data that

they have. Right on the second hand, there is a risk of getting the listed from the United States sometime in four because of these Holding Foreign Companies Accountable Act and the fact that it's essentially threadning to exclude Chinese companies of US exchanges unless they comply with clear auditing rules that apply to all the US listed companies. And I think this dual listing move is first and foremost a hedge against the the listing risk, but it can

also help a little bit with the domestic regulatory risk. Right. So, on the the list in front, we've seen some willingness from both China and the United States to resolve the conflict. Actually, just a few months ago, the Vice Premier you He gave a speech where he expressed Chinese willingness to cooperate

on this issue. However, the reality is that a smooth resolution is not a foregone conclusion just yet, and the risk of Ali Baba and the four then matter other Chinese companies of getting the listed of US exchanges in is still real. On the domestic regulatory front, I think that we've seen some positive signs lately regarding the eascene of the tech crackdown, and I think that by making this move, Ali Baba can probably win some positive favor

coming up from Chinese regulators. So, you know, China clearly is hoping to preserve and build up Hong Kong status as a global financial hub. In having mainland take giants fallback onto the Hong Kong stat change is clearly in line with those goals. What do you think this means for other US listed Chinese companies? I mean, are we

going to see a slew of realistics? Yeah, this is probably going to encourage the roughly two hundred U s traded Chinese A d R companies to to follow suit, right from e commerce platforms like JD dot Com or Pino Do or even China Search Changine Giant, they do Evie company Neil. You know, this move could definitely help solidify Hong Kong as as an alternative venue, and it's likely going to encourage more more activity over the next

few months. So what do you see is next here in terms of Ali Baba's evolving relationship with its own government, the Chinese government, which as we know, over the last couple of years has been incredibly challenging. I think that's the one of the main reasons of these uh primary listing in Hong Kong, right, I think Ali Baba is definitely trying to work closer with the government in many regards.

Were already seeing a lot of policies implemented it by Ali Baba to comply with the umbrella of common prosperity regulations in China. So I think most likely over the next few months will continue to see these large internet companies working closely with regulators to avoid all of these regulatory risks that we faced as as investors. Over the last few years. All right, Pedro Pollen Dronni Global x UH Director of Research, thank you so much for joining us. Obviously,

we'll continue to follow this Ali Baba situation. Meantime, we're following new headlines coming in about Twitter. Twitter setting a date for a special shareholder vote on the proposed takeover by Elon Musk for billion dollars. Of course, we know Elon Musk is trying to get out of the deal altogether. They're fighting over the date for the trial to start, which is looking to sometime in October. But Twitter has now set the date of September for a special meeting

with shareholders. Interesting, of course, given that Elon Musk doesn't want this steal to go forward at all. But we've got our eyes on September and then the trial coming up sometime in October. Now, could Walmart's surprise cut to its profit outlook signal doom for e commerce? Consumers have little to spend on discretionary goods due to the rising

costs of food and and gas. Bloomers John Edwards joins us now to talk about the state of the e commerce industry, and on top of these numbers from Walmart, John, we see Shopify cutting ten thousand jobs. This is a company that's been riding high over the last couple of years. How does this all add up to you? Yeah, well, um, I mean Shopify, you know, for one thing was interesting.

They made a big bet that the shift e commerce that we saw during the height of the pandemic was going to be long lasting, in fact accelerate, um, you know, faster than anybody had had expected before before COVID, and that that bet just turned out to be completely wrong. They uh, you know, thought that uh, people were not going to go back to in person shopping at the pace that they did, but people have flocked back to stores and so that led to a shop Shopify having

to cut a bunch of jobs. Um yeah, what is what we're seeing here indicate about Amazon results, which we're expecting later this week. Yeah, that's gonna be really interesting to watch in light of what we heard from Walmart, because you know, what Walmart is seeing there is is not so much that uh spending overall is slowing down, but that the mix is shifting in a way that is going to cut into their margins. So people are

spending you know, less on big ticket items. Less on uh you know, discretionary you know, sort of splurge items and shifting their spending to food fuel things that are you know, staples that people have to have. Uh. And so that really is where Walmart's profit warning came from. You know. In fact, they raised their expectation for revenue overall, but the mix is such that it's going to be

much less profitable revenue for them. So that's definitely going to be something to watch from Amazon on on on Thursday, because uh, you know, Amazon obviously likes to sell a lot of those same big ticket items that people are starting to shy away from. Now. We were speaking about this with respect to Alphabet and Microsoft earnings earlier. I spoke with Alphabet CFO with Corad who used the word

on uncertainty multiple times. We're seeing these mixed results, you know, slightly below estimate results, and it's causing some confusion about whether or not we're already in a recession. Are we according to these numbers that we're seeing from these e commerce companies? Are we? Uh, you know, it's hard to say, but I would say no for now. I think, um, you know, again, it's it's less a complete slowdown and

spending and more a shift in the mix. Um, you know, and you know, high inflation is biting everyone and it and it's so it's changing the prior days that people have in terms of what they're spending on. But as we saw, you know, in the earnings from companies like McDonald's, UM, Coca Cola, PepsiCo a couple of weeks ago, Uh, people are still spending on you know, things like food going out, you know, buying soda and chips and things. So uh, you know, it's it's more of a change in the

mix and less of a complete slowdown. All right, Well, the story is not over, John. We're gonna be watching those Amazon results coming out later this week. Thank you so much, Bloomberg. John Edwards, appreciate your insights there. Meantime, another story we're watching, Russia says it will opt out of the International Space Station after Russia planning to focus on building its own orbital outpost, according to its new space chief. This move coming amid tentions between Russia and

the West over the war on Ukraine. Russia says it will fulfill its obligations to other partners at the space station before it leaves the project, and NASA says the I s S is scheduled to be decommissioned to crash into the Pacific Ocean anyway. By welcome back to Bloomberg Technology. I'm Emily check in San Francisco. Let's get back to

our top stories of the day. I want to dig it now to the state of cybersecurity and pal Alton Network's Threat Intelligence and Security Consulting Team or unitfory too. Is that with a new report into cyber crime trends and predictions and the impact of declining economic conditions, how are these two connected. Let's ask Wendy with More, senior vice president and head of pal Alton Networks Unit forty two. So on the one hand, uh, cyber attacks, cyber threats

seemed to be quieter at the moment. Why is that. That's a great question, Emily, it does seem that way. I don't know that that's actually the case. I think what's happening is that we haven't seen these mega breaches posted in the news. That's usually good news. Actually that we are not seeing as any of these massive leaks in the news. But the reality is that there is a new ransomware victim posted online with their data that are being exhorted every four hours, we see the new

victims being posted on leak sites. But you are reporting there could be an uptick in cybercrime because of the deteriorating situation and the economy, And we've been reporting throughout the show more bad news, whether it's results from Alphabet or Microsoft, or Walmart or Shopify. Talk to us about how this could have all have an impact on cybercrime. Yeah, Well, what we see is that whenever there is money to be made, there are certainly criminals that are attracted to

that opportunity. So in over six hundred cases a unit forty two investigated last year, we saw payment requests as high as thirty million US dollars in ransomware cases and the average is nine thousand U S dollars, So we're almost at a million dollars as an average payment. There is a tremendous amount of money to be made, and to your point, there is still a much lower barrier to entry for the criminal side than it is for

the defense side. Another interesting statistic that we identified that relates to that is it the average dwell time, meaning how long an attacker is in an environment before they go unnoticed, UH is twenty eight days. That means the longer they're in an environment, the more damage that they can cause, and that damage directly translates to the more amounts of money that they can receive on the back end. I want to ask you about China. We're preparing for

how speaker Nancy Pelosi to visit Taiwan. The Chinese government not happy about this. At the same time, we're seeing Ali Baba prepare for a stock listing in Hong Kong. I'm curious if you're expecting rising US China tention to potentially lead to an increase in cybercrime as well. So I think the reality is, you know, diplomatic ties or not. Right, We've seen a tremendous amount of intellectual a property staft

coming from different nation states throughout the world. China is an or is a nation state that's certainly alongside so many other countries. Has gone back and forth with the United States on that. So UH. In addition to ransomware cases, which we've spoke about, one of the largest cases we see our business email compromise, and we do see there's um an interesting amount of overlap between these cases and

certainly nation state activity. I think as recent as last week we saw North Korean our team released research related to North Korean threat activity related to ransomware cases. So I don't think uh, cyber criminal activity is going away anytime soon. Whether it's at the economic crime actor or whether it's from a nation state capacity, we will continue to see more of it, all right. Wenday went More, Senior vice president, a head of palle Alto Networks Unit

forty two. Wenday, great to have you, Thank you many time. It is the It is the first major effort by the US Congress to regulate big tex since the inception the Internet. Lawmakers could vote on the American Innovation and Choice Act before mid term elections. This measure would lay down ground rules for dominant companies like Alphabet, Amazon, Apple, and Meta. Earlier, I spoke with Alphabet CFO with Port

and asked her about the various antitrust proposals. She said the proposals could break a wide variety of services and others we offer. That being said, we're very focused on what can be landed, and we're seeing progress in the Chips Act. We're focused on places like privacy legislation and updated protections to children. It continues to be a dynamic process. Congress has looked at this issue, right They want to opine on this, They want to try to find a

pathway forward. And I think instead of doing this regulation by enforcement, we should be looking at the legislative SSS. We should be looking at the open executive order research and study that's going on right now to really think through this from a public policy perspective. Kristin Smith's there of the Blockchain Association on Bloomberg's Crypto show earlier, reacting to the latest in the coin based sec saga, Bloomber has learned that the crypto platform is facing a US

investigation into its crypto listings. The SEC wants to know of the platform improperly led Americans trade digital assets that should have been listed as securities. Bloombergs Allison verse Ball joins US now from Washington, and of course are Bloomberg Crypto contributor Shinneli Bassick as well. Alison. I'll start with you, what exactly is the SEC contending here? So the SEC is trying to, you know, weigh in on on one

of the biggest ISU's facing the crypto industry. It's whether these exchanges like coin base are actually listing, uh, the tokens that they're listing to our securities. And you know, if the sec determines that they are, UM, that potentially requires these these firms to register as exchanges with the regulators. So it could be a big deal. Uh. You know, it comes at a time when a lot of these exchanges are arguing that they don't offer any securities, that

actually all of the tokens on their platforms our commodities. UM. So it's definitely a hot debate right now, HINALI, why is it so confusing? Why is it so hard to answer that question? Is crypto security? It's a good question, And think about how many renditions this argument has taken over the last couple of years, whether you're talking about n f T S or I c O S or crypto itself, the tokens itself. And I go back to what Brian Armstrong had said in a big tweet thread

last year. Remember this is when it really started to get very contentious between the industry and the agencies. And you know what Brian Armstrong said at that time is they refused to tell us why they think it's security, and instead subpoena a bunch of records from US, we comply, demand testimony from employees. We comply, and then tell us that we y'll sue us if we launch certain products. So, you know, to Allison's point here, a lot of this

is being done through enforcement rather than rulemaking itself. So until the agencies decide what's a currency, what's a commodity, and what's the security, it's going to be very difficult for the industry to to work around that. Now, Allison, is this connected to the insider trading investigation that was brought against a former coin based manager just last week.

So the ongoing probe into weather coin base is offering and properly offering unregistered securities is separate, UM, but it does have some ties that you know, the insider Trading club does have some ties that could connect to coin base as well. UM. So in the SEC's complaint last week, UM, that dealt with, you know, a former coin base employee potentially leaking inflammation to his brother and a friend. At least that's the allegation. UM, the SEC did I identify

nine tokens that it thought were securities. UM. And so at the time, you know, before we knew about this other probe that actually predates those allegations. At the time, I was talking to folks who said, you know, this does have effects on poin based as well, because the exchange.

The exchange has said that it lists seven of the nine that were identified UM, so essentially implies, you know, if the SEC thinks these are securities and coin bases listing seven of them, UM, then it's kind of a backdoor way of saying that, you know, they do need

to come in and register UM. And it works off of what SEC chair Gary Gensler has been saying for a long time now that he thinks a lot of these exchanges are offering securities and a lot of them, you know, need to come in and comply with his agency's rules. Shinnali, what are next steps here? The next steps are interesting here because if you look, for example, just all the way back at coin Bases S one, it's impo Finally, it's said that the evolving regulatory landscape

would be a risk factor for investors. And look how much it has. In one the scoop that Ali had put out just today, for example, coin bases stock dropped about and with the total stock drop you've seen this year, the market cap has come down so much, Emily, think about it is less than half the size of NASDAC now and when it went public it was much much bigger. So remember exchanges in the United States, stock exchanges have what the industry likes to call or think of as

quasi regulatory powers. So when you look at these big crypto exchanges, which are kind of the primary way here to regulate the industry or oversee the industry, are they going to look more like stock exchanges in the future where they have rulemaking capabilities, where they're more subject to SEC oversight. Or also how much will the agencies fight it through themselves and have the CFTC have more claim over some of these assets as commodities instead. It's an

open question and it will be played out. It looks like in courts in a lot of cases, Allison, any precedent for where this could land or none at all because digital assets are so new. Uh So, I you know, I'm not a lot of precedent here in terms of whether digital assets are securities. This is actually the first time that we've really seen the SEC come out and list specific tokens that it thinks our securities, despite having said for probably over a year now that it thinks

that these exchanges do have securities on them. So it's kind of a rare move for the agency. It's normally straight away from making those specific identifications, partly because it's it's probably you know, we talked to folks who say it's not really in their interest to kind of pigeon themselves. The pigeon holed themselves into. These assets are securities, these assets are commodities. By keeping it a little bit bigger,

it gives them a little bit more leeway. All right, thank you so much for clarifying a very confusing situation. Flood Brigs Allison Verse, we're all along with our cryptical contribution Aali Bostic, Thank you both. Coming up. Airlines are losing more luggage than ever, so can bag trackers save you from losing your stuff forever? Spoiler? Not really? That's next. This is Bloomberg. The economy is catching up to Apple

for the first time in a while. It feels like the iphonemaker is especially vulnerable to outside economic factors like rising inflation, increasing interest rates, and the fluctuating US dollar. The company this week will report third quarter earnings that many and lists anticipate will come in about flat from last year. That compares to this time a year ago, when Apple reported about thirty six year over your growth

and listened to sipate. Apple to report revenue around eighty two billion dollars, with about thirty nine billion of that stemming from the iPhone, under twenty billion coming from services, about seven billion coming from the iPad, eight and a half billion coming from the Mac, and a eight point eight billion coming from popular accessories like the air pods and the Apple Watch. Well, these are certainly impressive numbers, some analysts and investors will probably be concerned about the

lack of real growth. Apple already said, however, it's expecting a negative hit of about eight billion dollars to third quarter revenue due to China shutdowns related to Covid earlier this year, and of course, the ongoing chip shortage. This week's report also comes amid the company's plan to slow hiring and spending in some divisions next year as it

grapples with the possibility of a recession. Morgan Stanley and Wells Fargo have also already cut their Apple stock price targets given ongoing concerns about consumer spending in the near term. I don't believe, however, that any of these are real long term issues when we consider Apple's big product plans for the end of and into which will include the company's first mixed reality headset, four new iPhone fourteen models, three new Apple Watches, new I pads, in several new macs.

I'm Mark German. This is power On. You can subscribe to marks weekly power On newsletter at Bloomberg dot com. Well, airlines around the world mishandled some twenty eight million bags of luggage every year. That's just one estimate, but it could be significantly higher this year as airports struggle with high demand and fewer employees. Now folks can use trackers like air tags or tile to keep an eye on

their belongings. But as our Bradstone writes, knowing where your suitcase is might not be enough to help you get it back. Our Bradstone, head of our Bloomberg Tech coverage, is here with me now. So you just took a nice trip to Europe and they didn't lose your luggage,

thank goodness. But you saw this play out firsthand. That's right, Um, we're pulling out of Heathrow and a guy across the aisles waving his phone urgently at the flight attendant, going, my bags aren't on this flight, And it turned out you had put one of those twenty nine dollar Apple air tags in his suitcase and could tell that he was one of the victims of the current chaos. And I just kind of wondered, are other people doing this?

And it turns out they are. But knowing where your bag is doesn't necessarily ensure that you'll be reunited with it after your flight, right I've heard so many horror stories and people saying the DOTS says it's fright behind that wall, but they can't get it back. I mean, why is this happening? Why is it so much worse this year? Yeah, I mean that is one way where

the air tag can be useful. These airlines and their contractors are so overwhelmed right now, you know, knowing that your bag is behind a wall or hasn't left your point of disembarkation like that can be useful. Why are they overwhelmed? I mean, I think it's a combination of technical staff, foods and staffing shortages. Airlines, like a lot of businesses coming out of the pandemic, were not prepared

for the resumption of normal travel activity. So if you're traveling, what should you do aside from not checking a bag? Do you use air tags or tile? Do you get I've gotten some pitches for smart luggage, for example. I it came out of this convinced that even though you might not be able to do anything about your missing bags, putting an air tag or a tile device in in luggage if you have to check it is a good idea. At least it will give you a piece of mind.

You might not want to wait that extra hour at the airport if you know your bag's not there. But if you're going to check a bag, you're going to be really at the mercy of the airline and the airport travel light. Don't put anything important in it, really, um, I want to ask you a bit about this raft of earnings results that we've gotten kind of mixed Microsoft not good alphabet, you know, mostly slightly below estimates, advertising above estimates. I talked to Ruth port At on the phone.

She used the word on certainty multiple times. She said that there are just so many different factors at play here, it's impossible to separate them out here. So the word we're using to talk about this is uncertainty. What's your takeaway? Well, first of all, compared to the blood bath of last week with Snap and Twitter, I mean, look to today has been a virtual celebrity ship. But I I agree headwinds uncertainty when it comes to buying behavior, when it

comes to advertising behavior. You know, the cloud spending is a little bit below expected at Microsoft and Google. And then you have this currency question with a strong US dollar and the lower value of overseas sales that I think it's going to weigh on all the big tech companies. So obviously you've covered a few economic cycles. We're waiting Amazon later this week, Apple, Facebook as well, or I should say Meta, And there's this big question of are we in a recession or not? And how is this

really going to impact big tech? What are you watching? Yeah, well, I'm the farthest thing from economic uh uh you know evangelist here, Um, it certainly seems to me we're in a recessionary period. I think, you know, for for Amazon, we're gonna look at obviously e commerce sales, cloud growth. I mean a WS isn't follow along with Azure and Google Cloud and seeing a little bit of a spending pullback. But you know, the big tech companies are very well

equipped to we there this, right. I don't think that any of the Big four, Big five really are going to have that significant problem longer term. It is the company's like Snap and Twitter that seemed constantly engulfed in in this kind of terminal turmoil that are very vulnerable, which of course are more sort of experimental ad markets. But what's Who's to say that Apple, which depends on device sales significantly, isn't going to feel the impact of this.

I mean, they're doing sales on their products in China, sure, and they probably will and Mark German has written a lot about that. But the strength of the Apple model, the health of the iOS ecosystem, seems so strong right now. I don't personally imagine a protracted pullback. Okay, well, we shall see. We're gonna be covering and your whole team is gonna be across earnings all week. Thank you, Brad Stone, our senior executive editor for Bloomberg Tech. And that does

it for this edition of Bloomberg Technology. Tomorrow, I'm gonna speak with Mitchell Green lead Edge CEO after Spotify results, plus what he has to say about TikTok and that US continued competition, and don't forget to check out our podcast wherever you get your podcasts. I'm Emily checking in San Francisco. This is Bloomberg