Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from New York and San Francisco. This is Bloomberg Technology Investors. They are back on edge of the President Trump's tariff pause and monster rally yesterday. And this is tariff's on China remain in place. Markets now bracing for a potentially protracted period of global trade volatility.
Let's check in on these markets.
We're currently up over the last two days almost eight percent. Remember the euphoria that swept through the markets as tariff are put on paus all countries except for China and now have a ten percent blanket tariff. But we drop again once again today, Ed, and it looks as though the anxiety about what China really means the broader markets is still there.
Yeah, let's get some illustrative examples of the company's impacted.
Right.
Tesla jumps twenty two percent yesterday. This is a two day chart. It's pulled back today, So it goes from having its biggest jump since twenty thirteen to pulling back Apple, another company impacted, right, switching up the boards and looking in Apple ninety day pause on fifty six countries that had tariffs implemented, while the administration boosts the tariff level on China. Apple so interesting and later in the show
will dig deep into it. Why that Reuter's report that they airlifted tons literally one point five million iPhones from India into the US. This is kind of crazy markets news cycle and I'm here.
For it, aren't we?
Just and President Trump's tariff pause is a welcome relief ed but look, investors, our remaining warry of the wider economic impacts. So there's one hundred and twenty five percent tariff still on China. White House National Economic Council Director, that's Kevin Hassett saying there have been well advanced trade talks and offers with other nations.
New Megs Caney lines.
Breaks it down just the intricacy the ten percent blanket tariff on everyone but China, but some get close to a deal, it seems yeah.
According to Kevin Hassett, who was speaking on another network, he's the director of the National Economic Council, they've already had more than fifteen deals presented to them, and they
are intending to take these bilaterally one by one. The entire trade team, which could include Hassett, but as well as Treasury Secretary Scott Besson and Commerce Secretary Howard Lutnick, and of course President Trump himself, who admitted yesterday that while this is about negotiation, it was also about the market. Despite the messaging we initially got from the White House Press Secretary and Secretary Bessent that this was always part of the plan, this was the art of the deal.
It's all about negotiations. The President himself admitted he was watching the bond market get a little queasy and felt that people were getting Yippi, and that contributed to this move at least to lower or to pause ninety day four ninety days reciprocal tariffs on all countries except China.
But yes, that ten percent is still in place, and that one hundred and twenty five percent levy on China in place as well, in addition to the eighty four percent reciprocal tariff that China has placed on US imports, and that could effectively have the effect of starting a decoupling of the two largest economies, which obviously has major implications for firms with heavy Chinese exposure, including the technology
companies that we saw ripping yesterday. As you guys were just talking about giving back some of those games today, is there is still risk here for a company like
Apple in Nvidia. And although President Trump said yesterday he does think China wants to make a deal, He's expecting a phone call from Beijing and would love to talk to Shijinping, there has been no sign from shir the Chinese government yet that they are interested in making that forward progress, suggesting that China does not necessarily want to
blink first here. Keeping in mind that the idea that they're still ongoing conversations over a TikTok divestiture deal as an additional piece of leverage and complication to any conversations that are had.
You know, Apple's going to be a big focus in the show today because the White House keeps talking about it. Yesterday's jump the biggest since nineteen ninety eight. It's this crazy times, and India's a focus. I was interested in our reporting that Bes listed India as one of the nations he'd speak with early on What is the DC reaction? Right If you're a Democrat and you're trying to respond to the White House tariff policy, what are you hearing?
Well, Essentially, what Democrats argue is that this is just chaotic, that there is so much uncertainty around the policy, and then that has the same detrimental impacts of these policies staying in place. There was also a lot of concern on the part of primarily Democrats yesterday about the potential market manipulative effect of President Trump's swings when it comes
or vacillations when it comes to this policy. Keeping in mind that it was yesterday morning he said on true Social it was a good time to buy, then hours later sparked the biggest rally we've seen since two thousand and eight with this decision. In Many including Senator Adam Schiff of California, have suggested that this requires an investigation into possible insider trading. So that is another narrative we are hearing. All of it though, just speaks to the
uncertainty around this policy. Keeping in mind that while the President is now saying that China tariffs are sticking in place, that there is a ninety day pause in place for other countries. We have seen time and again that he does have the power to change his mind to do so very quickly. What stands today on Thursday isn't necessarily going to stand tomorrow necessarily. And of course we're going to have potentially multiple opportunities to hear from the President today.
He's scheduled to be holding a cabinet meeting right now. Signing a bill later presents some opportunities for him to speak to the press, and we'll see if he has any additional surprising tariff news for US.
For the most Kaylee Lines in Washington, d C. Thank you very much. Another story. Over night, China also announced it will quote moderately reduce the number of US movies allowed into the country in response to the US government's tariffs. The move is seen as a new front in the trade war and could signal Beijing's willingness to target American services, which could include travel, intellectual property royalties, and transportation care.
Still so much to digest on the wider tariff implications on tech.
Let's get to it.
Jay Hatfields with US Infrastructure Capital Management CEO.
Can you trade in this erratic market?
You can, but it's very easy to lose a lot of money doing so. It's really better for most investors to hold their positions, although I will say we have been even before the tariff halt, we had said that five thousand was a good support level. So now that we've kind of bounced off that hard, I think we're just neutral on equities right now. But I would counsel even HEDGHOM managers to trade cautiously because there's erratic policy
coming out of the White House. They can announce it at one ten in the afternoon, and so it's better to just get to your position and kind of hold it when.
You're thinking about potentially the names that you've love and want to recommit to. How much are you thinking about exposure for China at the moment?
One hundred percent, I guess, and also to overseas markets, so we favor I think you had a guest on earlier regional banks. They have no exposure to international They do have credit exposure, but we think we have a non consensus called economy is pretty strong, and so those banks have come down almost as hard as the investment banks. But they're not dependent on investment banking. They're really just dependent on rates and spreads, So be more conservative in this market.
Jay, I'm just staring at a five day Nasdaq one hundred chart, and I'm staring at it because effectively net were flat over the course of five trading days. Then you think about the drama that we're within those five trading days. Do you net understand the tariff policy of the White House and are you able to make informed markets decisions based on your understanding of that policy?
Thanks?
Ed, definitely not. I mean that's really why we're neutral on equities. We're actually pretty very constructive on inflation, which that view is validated this morning. So we had negative headline inflation. And just to mention that too, that everybody wants to talk about terroffts, but nobody talks about the twenty percent drop and energy. That's very profound, that's very stimulative to the US economy. It's very positive for inflation,
but it never gets mentioned. But to your point about uncertainty, there's basically two camps in the White House, the Hawks and the doves. Doves are more pro business. You kind of saw that when Elon Musk called Navarro a dumb bag of bricks, like that's almost unprecedent. I don't think that happens in normal organizations where colleagues are highly pejorative. So because we don't really know who's gonna win that debates,
it seems like Bessent't has the Lakes victory. We are, like I said, we're neutral on stocks, would be more conservative, and also fixed income looks pretty attractive.
Jay recession calls were pulled on the White House's ninety day pause. Should our audience of technology investors, technology employees, founders, startup leaders be braced for a recession in your mind?
Our call is there's no recession but slow growth. But the real thing that also people are missing in our opinion is that the slowdowns mostly caused by hawkish Federal reserve policy and not by tariff policy. As I mentioned, energy decline pretty much offsets the tariff increase, So the real issue is ultra tight FED policy. We think the Fed has a flawed structure policy framework. They're very dangerous
and there potentially could create a recession. But we do think the inflation data is going to be so positive they'll be forced to cut rates later in the year.
I'm really interested in that US economy positivity basically and the fact that it means maybe we've got a resilient consumer for Apple phones, maybe we've got a resilient consumer for Amazon products. Are there any stocks in the tech world that you think are worth adding to, not just regional banks.
Absolutely, and this doesn't sound conservative, but we think is more conservative. Amazon. They're kind of half Walmart and their price and sensitive. They're just passed through entity, and the CEO is on this morning saying that AWS demand is extremely strong, so they get traded like a tech stock, but they're half for retail stock and they're cutting costs.
So that's, again, like regional banks, pretty defensive. In a market that has been destabilized by this white house, they can't really sort out who's in charge.
And you've been putting out his investor and shareholder letter today and responding to some of the well current volatility than his consumers see. But then push us forward is to what your view is on AI and if AWS still sees insatiable demand. Many have been trying to work out whether the AI bubble that has so inflated this market is anyway intact?
Is it?
We think so everybody looks at the market and says, oh, well, the stocks are way down, so AI must be falling apart, they're just high beta stocks. They have two betas, so they're twice as volatile as the market. So the market's going down, what do you sell. You sell the volatile stuff, you sell the investment banks, you sell tech stocks. This doesn't mean the AI market has changed, and that's one reason though, because we do believe there'll be continued AI spending,
and Jasse's comments certainly validate that. Really it's investment and not consumption that drives recessions. So AI spending is offsetting slow housing market and another thing that people haven't Folks on have come down fifty basis points. It was disconcerting yesterday when they were skyrocketing by the way. I thought the market might crash then, But that is helpful. It's not going to get the housing market to boom, but stabilize. So if you look at investment, you can predict recessions
pretty well. Stabilizing housing strong tech spending that adds up to slow growth. Say you know in that one to two percent range.
J our case study today I think is Apple and in the short term they're airlifting iPhone handsets from India into the United States. In the long term, the White House sees a world in which the iPhone is assembled in the United States. Do you see that future being achievable for this White House?
Not really. That's sort of the fundamental flaw of the hawkish trade outlook is there's a notion that you can have a trade balance with all countries, which is ridiculous in the sense that low income countries have low labor, they're going to be exporters. That's one way they grow. And then the second thing is, if you run a gigantic budget deficit, you have to have a trade deficit. Financial flows need to equal physical flows. So the first thing you need to do if you want to have
zero trade deficit is lower your budget deficit. So that objective is ridiculous. It might have led to the bag of bricks comment from Mosque not me, and so that's why it's disconcerting to be in this market because one side is arguably nutty and the other side is more pro business, and we don't know who's going to win.
Jay At the moment, it looks as of the House is going to adopt a plan to advance Trump's tax cuts and also the debt ceiling hike. I want to get your take on how we can align what many had thought would be a tax policy the offset some of the volatility of tariffs. If the House can push forward and agree one and a half trillion dollars in cuts for the budget, is that the right policy right now?
Absolutely? So that offsets the If we end up with sort two percent of GDP, that's about a six hundred billion dollar tax increase, So we need to offset that. And in fact, that's what the flaw of the initial strategy was, is that it just came too fast. You could have just said, well, in a year, we'll do this, and then you had plenty of time, and so they came way before the tax cut, and that's what's destabilizing market.
And it's just an own goal if you play soccer, because they didn't they they didn't need to do that. It was just coming out of this Oh good, yeah good. I tried that with one of your reporters and they're like looked at me, like, what does that mean. I'm the biggest soccer fan either, but I know what that is.
So that's the issue is that timing was horrible. They could have gotten the exact same place by just saying they're going to do this without doing it right away, waiting for the tax cut, waiting for the FED to figure out inflation's coming down. So it was just at
the absolute wrong moment. Also, it wasn't earning season. We think earning scenes will calm people down, maybe not get the market skyrocket, but when you hear from companies, their stocks tend to rally because then you get certainty, even if it's not great, like Delta's guidance was highly you know, was bad actually, and stock this is before the announcement skyrocketed. So we think any news or most news will be
viewed positively and the earning season will stabilize it. So all this tariff news came into absolute terrible time during a normally week March. So now not that we're super bold up about the market, but we think it'll stabilize kind of in this five to six thousand range. It's not very stable five to six thousand, but be banging around in that range. So we're neutral, not negative. We were negative before this policy change.
Jay Hofield of Infrastructure Capital Management, who I think was quite Howard marks on the own goal analogy, thank you very much. Now coming out with tariff threats actually helped fuel TSMC's AI related growth surge at the start of the year. We'll have more next. This is Bloomberg Technology.
Quick check on the US listed shares of TSMC.
Their ADRs.
Look, they're going to be following the road and market lower at the moment, off by four point eight percent after they rallied hard yesterday. But we've got to keep in mind that the company actually posted sales growth forty two percent. On of course, AI demand are a head of US tariffs. For more, let's bring in Peter Elstrom, and what's interesting is the inventory build up is so plain to see.
This is the chip provider for Apple, for Nvidia.
Right, we don't have all the numbers from TSMC yet. All we've gotten is the revenue for this quarter. As you say, though it's a forty two percent growth rate, it's very very strong. They bumped up revenue to twenty five point five billion dollars. So you've got one hundred billion dollar run rate company that's growing at forty two percent. It's pretty extraordinary. What we don't know what we'll find out next week as they report more broadly their earnings,
we'll get more detail on that. We'll figure out how much of this is inventory. As you say, there's probably some stockpiling going on right here. To Their biggest customers are Apple and Nvidia in particular, they may be accelerating some of their purchases to get ahead of some of these tariffs so that their customers don't have to pay high tariffs as they get into the next few days.
You know, the data is highly analogous with what we saw from PC shipments right front running tariffs thing you were coming that short term long term TSMC is pledged billions of dollars to build chips in this country. Have we learned anything more about that in its progress?
Well, they didn't say anything at this point, but you're right. They had previously pledged in sixty five billion dollars. More recently they said they're going to add another one hundred billion dollars onto that in US investments. They clearly want to make chips in the US, partly to diversify themselves,
to geopolitically. Partly they'll be able to serve these customers like Apple, like in Nvidia, like Tesla more effectively if they're able to do it in the US, and they'll avoid some of those tariffs if they're going to get hit with US Now TSMC doesn't sell that many chips directly into the US, but via Apple and via Nvidia some of their other customers, they could get hit by tariffs that go through their end products.
Playboys.
Peter Elstrom, thank you quick look at shares of Apple falling after yesterday's massive rally. But there's also reports that it shipped about one and a half million iPhones from India to the United States in an effort to beat President Trump's tariffs es. According to Reuter's ed, is fascinating that six hundred tons worth from India. Who knows what they were shipping on jumbo jets from China?
Right right? I did the math. I checked the math. Six hundred tons. The average weight of iPhone around seven ounces, so with packaging, I think one point five million makes sense that short term, long term, the only question is can they build the iPhone outside of China and were here in the United States? Who knows. Let's get more on the fallout of US China tariffs and its impact on Apple currently in a million acy president and prison analyst that creative strategies joins US. I mean in a
world where the iPhone's built in America. There are many estimates. Bank of America this week said it would be ninety percent more expensive. That is an interesting scenario, Carolina.
Is a very interesting scenario, one that I don't think is going to happen anytime soon. I think that Apple has other options before coming to the US. And that's because unless we are moving part at least of a supply chain to the US, is really unreasonable to think that Apple can be successfully building iPhones here. So what you're seeing with the shipment coming from India is that Apple has the opportunity not just to ship, but to actually rethink how and where they build iPhones that are
targeting the US market. So they could shift from China to India or other manufacturing facilities to avoid some of the harsher targets that China is faced with today. Obviously, all of these can change tomorrow or this afternoon.
What about, of course it can for the margin pressure. How much will they suck up some of the margin pressure? How much do you think they can pass on to a pretty stress consumer here in the US right now?
There's two aspects of it.
One is to remember how strong Apple relationship with their supplier manufacturer is and so there might be a negotiating part there where it's not about just Apple passing on to the consumer, but is Apple trading with their supply chain to see how best everybody can ride this way. Right at the end of the day, you want to keep the Apple business with you for the longer time,
and then when it comes to consumer. I think it's a very critical moment for Apple here in the US market when it comes to services and Apple Intelligence in particular. So they will want the upgrade cycle to continue, and they might decide that it's worth sacrifice in some of their margins in the short term to then have more revenue coming from services and Apple Intelligence longer term.
The story's hit the terminor just now clarifying that the Trump tariffs on China now add up to one hundred and forty five percent. You see Apple declines accelerating five percent, and as that one hundred pushing even lower an airlift though, have you ever seen that in your career? We just have thirty seconds, Carolina.
I had not.
It's definitely something new, and I think it comes with the volatility that we're in right now.
Carolina Milanesi there with all the expertise and the context president and print of Analystic Creative Strategies. Welcome back to Bluemak Technology. I'm Karine Hyde in New York. Quick check on these markets, d because we are accelerating our losses. We're sub four percent on the last SAT one hundred after a monster rally yesterday, the biggest gain sets two thousand and eight.
We fade some of that? Is it profit taking?
Is it once again trying to understand what Chinese tariffs that NAR are to the tune of one hundred and forty five percent. What that means for the overall risk sentiment? We're off by four percent on bitcoin, but hold of ourve eighty thousand. Move on to the individual movers that want to shine a light on because look, JD dot Com up more than three and three quarters percent in terms of ADRs traded here in the United States. China
looking to improve stimulus locally. That means e commerce players that are domestic related and focused are going to be doing well.
But we are fading our rally and.
Ali Baba, we're fading, of course even more on Apple best rally since nineteen ninety eight. Yesterday, we're now off by more than five percent, as those tariffs to China impact that company, Amazon off by almost five percent, Andy Jason looking strong into his investor and shareholder note, But more broadly, we're worried about exposure there as well.
Ed with you gone, well, let's get back to the tariff story. President Trump's tariff on Chinese imports now total at least one hundred and forty five percent. Bluebos Katie Lines, who leads our political coverage for US in DC, is actually going to come and do some math for me because I've lost track on whether this includes reciprocals it doesn't, and how we got to one hundred and forty five percent, Kayleie.
Yeah, And this really is about math and how these tariffs layer on top of each other, as there are different tariff regimes that China is subject to. As President Trump made clear yesterday in his post on True Social he has raised the reciprocal tariff rate on China to
now one hundred and twenty five percent. That of course has been escalated multiple times due to China's retaliation, but that did not include the twenty percent tariff that he had already put into place on Chinese goods earlier this year over the trade of fentanyl. So it's about adding that one to twenty five to that twenty percent that was already existing, which gets us to the total rate
of one hundred and forty five percent. Now this was actually all there in the White House's fine print, But obviously it's difficult to understand with this fast moving story how all of these tariffs work in tandem together. But it does seem that this is a figure that was higher, at least than the market previously understood it to be, which is why we're seeing things take a turn.
And this comes despite the fact that.
President Trump in the Oval Office yesterday said that he couldn't imagine taking tariffs on China any further than he already had. But maybe perhaps this is further than was previously understood. Keeping in mind that China has still an
eighty four percent retaliatory rate on US goods. It remains to be seen whether or not they will escalate that further and whether or not they are willing to pick up the phone and talk to Donald Trump, as he has suggested he is willing to talk to Shijinping wants to make a deal, thinks China wants to make a deal, but we have seen no sign of that yet.
Is this trade war.
Between the two largest economies only seems to be intensified.
The us K lines at a DC chief mathematics correspondent. I appreciate it, Thank you very much. Let's get back to the market's reaction to tariffs, specifically the pools on tariff's Like yesterday afternoon, Crazy Bloombo's Ryan for Selca, who covers the tech sector, joins us Apple. I think, biggest jump since ninety ninety eight. Test labings jumped since twenty thirteen. The questions why, like why those levels of gains and now the pool back this morning.
Hey, thanks for having me on. So obviously yesterday was a huge relief rally, and I'm sure there was some short covering, some algorithmths, trading, all kinds of things just feeding into the massive gain that we saw yesterday. But I think once the dust settled a little bit, people kind of realized, you know, hey, the terroristicainst China were raised,
there's still ten percent tariffs. Kind Of broadly, there's still a lot of uncertainty, and I think just sort of the pause in itself is just a sign of how sort of erratic all the policies have been. There's been introductions, retaliations, escalations, and now a pause, and it's it's very hard to know what the next step is going to be, and therefore it's very hard to know how to position or understand what the economic outlook might look like.
Right, Vasilica, with the ongoing uncertainty narrative, we appreciate it. Let's try and get some certainty on what to do with your portfolio now. Nancy Tangler, CEO and CIO of Laffetanglo Investments, joins us now, and look, you've actually been committed to adding certain names, Tesla being one of them.
Why do that with the exposure to China?
Yeah, well that's a great question. We were adding to it since the market peaked because it got clobbered and it was actually below current levels. But that is an ongoing concern though. We're we own that stock for and we talked about this after Cybercab we Robot Day in southern California, but we own it for the energy business and we own it as an AI play. So yes, the evs matter, but I think it's analogous to Apple.
What early days.
When we were buying it twenty thirteen, twenty fourteen, the iPhone was a means to the services business.
Really interesting to bring broader context you can still hold on to amid these day to day voluntile moves in video or another one you've been adding to. Yes, many have been quick to say exposure to China. However, some analysts and coming out and I was saying, this is one of our favorite picks. They're actually pretty protected from the border impact.
How are you looking at that name?
Yeah, and we know that Jensen Wong met with the President recently to try to get a carve out. We're looking at that as part of what we think.
You know.
I was on the air on the day Deep Seat came out, which was another k I seem to attract it a chaos, that is.
And what we thought was that.
It would increase the use cases and the availability of AI as an option, and we saw that in the fourth quarter earnings, even though they're backward looking. We heard from CEOs how broadly they're using it across sectors. And you heard today Spotify saying we're not hiring anybody unless you can prove that their job can't be done by AI, so I think in Vidia is obviously the core of that. Most of our investments have been on the software side. We shifted to software about five six months ago, but
we still like that name. It's much smaller holding than our major holding, Broadcom, which we've called the poor man's in video, but we do like to add to it on weakness and it gets these peer it has historically just like Tesla. If you've owned Tesla since the IPO, it's been in a bear market almost fifty percent of
the time. Yet it's up thousands of percent. So you just have to pick your spots, be sure to trim in these more volatile names when they run up, and that's what we did last summer, and then we're adding back in.
Hello Nancy, It's always great to have you back on the show. I don't think you attract chaos. I think you just invest in the areas that attract chaos. It's different. There's two names that you haven't discussed, and every time you come on the show, I always so you haven't discussed one in particular, which is meta, but also Amazon. Caro brought up a really interesting point earlier, which is
you know Amazon has this duel mandate. It is a technology stock and it is a retail stock depending on how you look at it, like a Walmart or it's a cloud provider.
Tells me how you feel about them both.
So Amazon was in our five for twenty five that I published on twelve thirty one, and it's a member of our twelve Best Ideas portfolio, and then we own it in our strategy.
So I love the name.
I think it's a defensive technology name that you can be adding to and here, and we have done that. But I wrote my notes a couple days ago and we've added to it since then. So I think it's an important name to own our poster child for our investing theme of old economy companies that have pivoted to the new technologies as Walmart. You saw them confirm their annual guidance. And then Andy Jasse came out today and said what Jamie Diamond said. We're cutting costs. We're not
frantically cutting costs. We're going to our management teams and saying where can we save money. That's a well managed company. I think it's an all weather stock. Meta we sold, as you know, and bought Spotify and so I was beating myself up until I went and looked at the relative performance since we've done that, and we've done much better in Spotify, though, I think Meta is a name you can easily own again and add to in this
weaker environment. That said, the AD revenue for Amazon is objected to go down half as much as metas if this all continues. So I think Amazon's the better player from here, and that's where we've been putting our money to work. And then Spotify and Netflix are names that we think will hold up in kind of a low growth, potentially recessionary environment. Though Goldman withdrew their recession forecasts, so maybe we're just getting slow.
Goth Nancy, how do you assess communication from policymakers over the course of the last five days.
It's been horrific ed. I just I've been at this for over forty years. I have never seen a more botched policy roll out than this, and I think it did a lot of.
Damage to the administration.
I know yesterday, you know, we got the declaration that this was intended all along, and you just don't understand the art of the deal. And then Bill Lackman came out and said, oh, This was executed perfectly by the president, which makes me think he was selling yesterday into the strength.
That's just speculation, but I think it's.
Been horrible and you're seeing more and more of Scott Bessett and Kevin Hassett, and I think that will benefit the administration, though their message has been imperfect as well. It makes no sense from an economic standpoint. Now ten percent tariff would kind of act like a flat tax
and it would move, It would stop distorting behavior. But right now, if you think about factory build you know, we're up three last three years, it has exploded and it continued into the first two months of this year. We're now hearing new factories being put on hold. That's what happens when you distort policy.
How do your clients feel about it?
How are they about remaining committed to funds exposed to equities.
So we've spent a lot of time doing webinars with our clients in since the market peaked in because there was already you know, a sharp correction going on.
Yeh, this whole deep seek was actually the mag seven problem, not Maga, right, But do you agree with Besson?
Oh? No, I thought that was also ridiculous.
I'm sorry, I thought you're That was when it started though, you know, the sort of franticness, But then we got a rally.
No, of course not. I think that's where.
These guys are losing credibility because those of us that do this for a living look at it and go, no, that that's not in.
Fact what it best't used to do it for a living.
I know, isn't that interesting? Yeah, and took a very hard stance on many issues.
But no.
But when you go to an administration, your job is to be an advocate for the policy projected by the administration, which is why I will never be in politics. But our clients are pretty measured.
You know.
I got calls yesterday should I add more money? And it was like, no, no, let's wait, this is not done. But mostly we've seen flows in yeah, not mostly one hundred percent.
Yeah for tengler investments. Nancy teglis good to have you back with us. Thank you very much. Coming up on the show, Meta faces backlash from whistleblower testimony to Congress and prepares to fight the FTC on antitrust allegations. Have more on the social media giants battles next This is Bloomberg Technology.
Quick check on these markets.
The losses are accelerating. We're off by more than four percent across the S and P and the NASAT. We wipe off about a third of yesterday's gains.
The points drags, when.
In fact there's only six or seven names in the green on the Nasdaq one hundred. Everything else in the red booking holdings is a key point drag ASML it's a dr is a key point drag.
But so too is meta.
And let's just talk about meta and social media a little bit more. Because the EU's governing rules on digital platforms like X, like meta shouldn't be considered trade barriers with the United States. That's all according to the EU Digital Chief, Hennah for Kuna. Speaking with the Bloomberg's Oliver Kruk, the Digital chief really outlined how the EU's rules affair for everyone.
Take a listen.
These are same rules for everybody. So these are not like trade rules. So when we speak about Digital Service Act, Distell Market Acts or AI Act, we know that we have same rules for other companies who are operating in the European Union. So for the European companies and also for Chinese, US and companies, so it's very fail for everybody, and these are not creating trade barriers.
And the digital services actually've been expecting some decisions specifically on META and on X. Is there a delay that due to the pressure being put by the Trump administration. When can we expect progress on those?
We have several investigations going on on the Digital Service Acts and different investigations, and of course we are enforcing the rules, respecting also the due process, so and always when we are doing investigation from the Commission side, of course, the main purpose is also that we want that the online platforms that they are complying with our rules, and often this is the case during the investigations that they are also chasing their behavior and that is of course
what we want that they are respecting ours.
So for example X, which is I think the most advanced the investigation that you have, What would you like, what is the endgame? What would you like X to look like? How do you think is an appropriate way for it to sort of shift.
What we are saying in our rules. It's very much that the online platforms they have to have the in place that how they are assessing and mitigating the systematic risks. They are posing for civic discourse, for electoral processes, for people's well being, and also that they are transparent with the access that the users know for example why certain content is shown for them, and the users has to have also choices how to change also the recommended system.
I like to also get an idea of your sort of channel of communication to these companies. Have you spoken, for example, to Elon Marks, Have you spoken to Mark Zuckerberg? Who have you spoken to the taxis and what are those conversations like.
Normally it's of course our commissions technical team who is working with those platforms technical teams with their lawyers, and that is all the time the dialogue we have going on. So when we are enforcing the rules, it's not only the investigations, so we have all the time several parts. So we have all the time dialogue with online platforms, especially of course it's done by our services. And then also we have different code of conducts. We are preparing
different guidelines online platforms. They are also carrying their own independent orders, so there's several bars all the time how we are implementing and enforcing They're awesome.
That was EU Digital Chief Hennavk and then speaking with her own Oliver Kirk. Now META is facing congressional criticism over its dealing with China following whistleblower testimony. Yesterday we was Ridy Griffin back here with me and SF. The principal accusation is that made by the whistleblower is that META was briefing the Chinese communist parties early twenty fifteen. But reading your story, it's more about the reaction and fury of the lawmakers, if anything, no doubt.
In fact, I think this congressional hearing ended up being an opportunity for members of Congress on both sides of the aisle, these senators to take aim at Mark Zuckerberg. They called him inauthentic and disingenuous. Even Republicans were questioning his magnification if you will, the comments he's made on Joe Rogan, the famous podcaster, to suggest he is aligned
with Trump's agenda. So this proved to be a blasting of Zuckerberg and one that we imagine will continue when they say that they're going to call him to Congress.
I mean he's also potentially going to be speaking because of the.
FTC investigation as well. This is not a great time.
To have federal leaders seemingly not behind you, particularly when they're going to be questioning the purchase of WhatsApp, the purchase of Instagram, and potentially breaking this company apart.
Yeah, beginning on Monday, we're going to see perhaps the most existential threat to the company begin with the FTC trial. So you've got the threat from regulators, lawmakers, and then pressures internationally from Europe.
As you had just posted in that.
Video, Meta currently off by six point four percent on the day, one of the worst points contributors to the downside.
Ridie Griffin, thanks so much for keeping us up to speaking.
It's time for talking tech and first up st Micro announced plans to cut as many as twenty eight hundred jobs over three years in an effort to increase efficiency in automation. Though there was no mention of tariffs, the semiconducting manufacturer says their latest cost cutting efforts will reshape
their manufacturing footprint and quote resized global cost base. Meanwhile, the company's supervisory board has officially backed its CEO, Jean Marc Schowi, just one day after the Italian government publicly withdrew their support over top management. Plus, Amazon had equipped some of its delivery vans in Europe with defibrillators to
help speed up aid to heart attack victims. Called Project Pulse, the program involved over one hundred contract drivers who were trained on the devices who would receive alerts from citizen responder apps. Amazon concluded the program after several months and is evaluating the feedback on future opportunities. And Tesla is set to open a showroom in Saudi Arabia, the latest sign that Elon Musk is putting behind a bitter feud
with one of the kingdom's most powerful men. The showroom's expected to showcase its vehicle line lineup, alongside the CYBERCB and Opsimus robot. Tesla's entry into Saudi Arabia marks a sign of goodwill towards the Saudis and a potential growth market for the company. Caroline and let's.
Just return to Amazon because it also released its annual letter to shareholders this morning.
CEO Andy Jesse acknowledging they want to be.
More like a startup, but also later discussed that sellers could be passing on some tariff costs to customers for more.
We're joined by Blue Most Tom Giles.
Let's go to the letter first and foremost, because really trying to show that AI demand is still there, and also they're trying to be more agile with it.
They want to be they want to be very like a startup. They want to be firm, they want to be agile. And what Amazon one of the sayings that Amazon is always day one. It's always day Remember what it's like when you are a new business, you're a new company, You're just starting out and the world is your oyster. And that's something that Jasse has worried about Amazon employees losing over the last couple of years. That's why he said they all have to come back after COVID,
after people were working from home. He said, come back because people are losing that sense culture is extremely important Amazon, and he definitely wants them to get that startup mentality which is so important for these companies.
I just tom want to quickly go to the conversation Caroline had with Andy Jasse earlier in the year, because it's all about CAPEX. Right, listen to this.
You did say basically one hundred billion dollar run rate for CAPEX expenditure. Can you give us even like a percentage ratedown of how much that goes to distribution logistics and how much goes to AI shares. You know, you can tell you most of it, You know most of it. You know the Lion's share is more than fifty percent?
Yes?
Is it more than eighty percent? We're playing the warmer and colder, yes, exactly.
No clues in the letter about CAPEX earnings isn't far away, But I think this isn't the here and now what people care about.
Well, right now people are focused on tariffs right and we're seeing that in the markets. We're seeing it with the ways that stocks, including of Amazon, are getting whipsawed. He hinted at that in an interview with another network, talking about how, yeah, there's an expectation that some of their sellers are going to pass prices tariffs onto their customers. And look, they receive a lot of there's a lot
of inventory, there's a lot of products. There's a lot of sellers who are China based or China affiliated, and so if that tariff stays where it is, that is absolutely going to affect Amazon's ability to compete with other online sellers, especially if those sellers are able to diversify their supply chain, get those products from somewhere else. A lot of it is made in China, so a lot of companies are going to be affected equally in many ways.
Amazon's is going to do what it can to keep prices low, he said, but there's no way that those prices will not be passed on in.
Some way to end users, even as Greenberg reports and yesterday showed that they've been trying to get that inventory, been changing it up in response to all of this. Tom Giles, who flew in on the Red Eye lanning this morning.
What a hero. We thank him for being here in New York.
Meanwhile, that does it for this edition of Bloomberg Technology. Ed these marks whipsawing once again.
Yeah, you put it right earlier. It's a third back of what we gained yesterday. But there's still concern about Tariff's. A ninety day pause sent markets to euphoria last night. I think everyone's taken a bit of a breather. Come back to us tomorrow on Bloomberg Technology. This is Bloombog Technology