And school just ended, but amazon wants parents thinking already about backtoschool shopping. How prime day might now start this unofficial season. But first our top story. U. S. Employers sharply stepped up hiring in june, adding 224,000 jobs. While companies faced the uncertainty of trade tensions and inflation remains below the feds goal, the hiring gains in june provide a solid backdrop for consumer spending. Employment within the u. S. Technology sector increased by more than 56,000 jobs during the First Six Months of 2019. This is according to analysis by a Technology Industry association. The Unemployment Rate for i. T. Occupations, 1. 5 , compared to the overall Unemployment Rate of 3. 7 . Joining me now, the ceo of a private investment firm, and bloombergs max chafkins. Nadine, let me start with you. These are very good numbers. 1. 5 unemployment within the tech sector. That is lower than the broader average. Do you assume that hiring remains robust Going Forward . Nadine thanks for having me. I think you have to parse what is happening in the tech sector versus the economy overall. People are looking at payroll and jobs data and saying it is a positive number, but underneath that data is the average hours worked, a decline of 0. 3 . Even if you have a number of people employed growing, if they are working less hours, unless there are productivity gains, that doesnt read very well for the economy. Taylor what tech improvements would you be looking for . Nadine you would want to see capex spend going up. Unfortunately you are seeing it going down. Inventory numbers are looking high right now and that is not a good thing when you are looking for companies to be spending, to be adding to the capex, which means hiring, additional hours, so that data is not supporting an increase in accelerating growth. Taylor max, nadine mentioned that keyword, inventory. As we push forward to earnings season, a lot of this does come down to inventory on the balance sheet. What are you looking for as we hit tech earnings that are coming up through the bottom of this . Max the thing that is happening right now is you have a lot of Big Tech Companies doing very well for the last few years. That is reflected in the jobs data you are talking about. The question is, a lot of these companies are really dependent on china. We dont yet know how that is going to shake out. That is going to play a huge factor for a company like apple. Besides that, there is a sense, as nadine was saying, theres been a lot of profit, but we havent seen new products coming out. How much further can apple, facebook, google go before sort of reality starts to catch up with them . Nadine max and i were just talking about it. There is a table that shows earning estimates. They are supposed to be down 11 for revenues this quarter and in the high 20s for not just the top line, but the bottom line. That does not bode well for earnings season. Taylor you can cut me off as long as you follow up with a promotion for the bloomberg terminal. Ill give you a pass on that one. Follow up with me on a more serious note about china trade. We are not quite sure where the china trade negotiations are going. How much of china trade is now behind us, or do we think there more of a headwind Going Forward . Nadine statistics show that the market went up, the infotech sector went up, because of hopes on that china trade being negotiated. But it was pretty much a nothing burger a few weeks ago. It basically prolongs the time that people are looking for resolution. Whether it is soundbites or news cycles, the chinese are playing in dynasties. They are thinking ahead, not just 2020, but 2030, building roads and infrastructure in other countries. We are a little misguided, hoping there is a trade truce, a solution in the next few months. Taylor max, news this week was broadcom in conversations to take over symantec. Analysts are agreeing and disagreeing about the value of that, but the underlying theme is the push for software. As we look at m a, is it about the push into software . Max one drag on hardware is china. A lot of these Hardware Companies are manufacturing in asia. Any Global Economic uncertainty is a factor there. These kind of Software Service companies, it has become a hugely lucrative business. Weve seen microsoft go from being seen as an also ran to being the most valuable company in the world on this software as a service business. Certainly, software is going to be a big focus, Even Companies like apple that have been historically focused on hardware. Taylor nadine, as we saw the news about broadcom looking into symantec, their bid for qualcomm was squashed. How much of the scrutiny over National Security and Foreign Investments is now a headwind for future m a deals as well . Nadine you point out a good fact. Theres a lack of resolution of how m a is going to get played out. Another headline is about amazon and deliveroo. No one really knows the specifics around it. As trade and tech get interwoven, i think it is going to be difficult to say you can directly play in the m a game and know how it is going to turn out for companies. Broadcom is going to try to leverage the deal over three times net debt, which is kind of a concerning trend with tech companies. Taylor if you look at leverage on the balance sheet, fold that over into the recent ipos, for some of these investors to cash out, max, as you look at what has been a good year for ipos, how does the pipeline look . Max there has been this kind of long wait, a bunch of companies raising huge amounts of venture capital, that then were obviously going to go public. There are Companies Still that havent done that yet. Palantir would be an example. We work would be an example. You can look at Something Like softbank and see a bunch of companies that have raised billions of dollars and are going to go public. It is hard to imagine it will be quite as exciting as it has been. Taylor thank you. That was max chafkin and nadine terman. You will be sticking with me. Coming up, competition in the food delivery space. We will talk about growth in the sector and how amazon is looking to swipe up one of europes biggest delivery companies. And if you like bloomberg news, check us out on radio, the bloomberg app, and in the u. S. On sirius xm. This is bloomberg. Taylor imagine grannies in Running Shoes delivering noodles. It might sound ridiculous, but stick with me. Chief executive Dara Khosrowshahi says elderly are signing up to be uber couriers. While most workers use a bike or scooter, seniors and surge of exercise are doing deliveries on foot. Sticking with food delivery, the battle among uber grubhub, and postmates for a share in the u. S. Market is likely to intensify in 2019 and 2020. Food sales in thirdparty marketplaces might reach 38. 5 billion in 2019 with around 40 of order volume still offline. Still with me is nadine terman. Nadine, when i was taking a look at this, the firm that caught my eye was uber eats. Walk me through how uber eats fits into ubers growth plan. Nadine it is not their main focus. If you ever sat in uber, ask how many drivers you are with want to and do deliver food. Probably 99 of drivers you talk to dont deliver food. I think as uber is now public and they have to have profits, we have to figure out what type of capital they are going to invest, and can they give away free delivery . That along with door dash has been a key driver, but you cant give away business forever. Taylor talk to me about grubhub. That caught my eye. It has the highest customer satisfaction. Why . Nadine theyve been in the business a long time. When you look at grubhub, they spend a lot of time in capital on making their customers happy and that is very important. Separate from their cost structure, investors penalize them because they were investing in their business. We tend to prefer companies that have the opportunity to invest in their business and on a high incremental margin basis, so i think it is circular when you ask why they have high customer service. Taylor what is also interesting, we talk about customer loyalty. Within this base, you say about 80 of customers are retained. Why are customers so loyal . Nadine i think you have to break it down to a few areas. They are really taking market share from pizza delivery as well as other delivery options. It is a great way people are spending time on the weekends, also off hours, and it is for delivery to. Instead of going to the restaurant, the grocery store, it is a very convenient option for people. Taylor talk to me about door dash. Raising about 530 million. While the fundraising is good, it does not necessarily mean they are profitable. You cant give away things for free forever. How do they start to wean customers off of discounts . Nadine as someone who can switch between different groups, i am sensitive to who has a good deal going on. I think the proof is in the pudding when they actually have to make profits, bring delivery charge. We are going to see what type of cost structure they have. Theyve been doing rounds on an increasingly frequent basis. I think the last round was maybe a 12 billion valuation. I think that is going to get people to say, is it a priority for these companies, and what is their way to make money . Taylor all eyes on that valuation of this. Nadine terman, thank you for joining me. Samsung is the latest tech company to feel the effects of the trade fight. How a Global Economic slowdown is weighing on the smartphone maker, next. This is bloomberg. Taylor samsung said friday that a Second Quarter profit is slowing. The Korean Company saw a 56 decline in operating income. It only managed to beat analyst estimates because of its unspecified onetime gain in its display business. Samsungs chip business, the biggest driver of profits, remains vulnerable with smartphone demand waning. Joining me to discuss is ian king. Great to have you. Walk me through the prophet miss. Broadbased or oneoff factor . Ian it is broadbased. This is a preliminary announcement. They are just getting the top line numbers. We will have to wait until we get divisional progress. In general, theyve gone out and said, we are seeing what everybody else is seeing. The numbers are bad, but not surprising. The trade war is weighing on everything. Taylor like you said, these are preliminary numbers. What does it bode now for when we get the real numbers at the end of the month . Ian it is not great. The biggest concern hope is that samsungs memory chip business, which is where it is dominant, was going to bottom at a higher level. They and other chipmakers have said, things arent going to be as bad as they used to be in the past. The market is much more rational now. What we are seeing now is that while that may be the case, demand is going lower than people have projected. This kind of inventory boom hasnt really paid off in terms of pricing. Taylor within the inventory dynamics, a lot a lot of this comes down to the pricing of memory chips. Can you assume any recovery for the pricing of those memory chips . Ian that had been the promise, that things were bad in the first half, Large Data Center customers, and because we havent built new factories, things will get better in the second half. What that outlook did not factor in was that fundamentally demand for things like smart phones, computers, might not pick up and might not help out. Taylor and with the weakness in demand, i wonder about the readthrough when you talk about the mobile phones business. Can we glean anything from the weakness in samsung over to apple . Ian theres some speculation by analysts that the big one time payment that samsung got that helped out on its profit line might be an indicator that one of its big numbers like apple or huawei may not have been able to meet their contractual obligations and was forced to pay themselves out of not taking more screens than they needed to do so. If that is the case, that is a bad sign. We only have speculation as to who that is. Taylor we will await the real numbers. More official numbers at the end of the month. That was bloombergs ian king. The Korean Company has completed a redesign of its delayed galaxy fold smartphone. Several publications including bloomberg reported screen malfunctions with test versions. While a release date has yet to be announced, the phone is expected to be the worlds first massproduced foldable smartphone and could help the company revive itself. Bloomberg explains how devices like the fold could be the next growth driver for smartphones. Many dont remember life before them. There are an estimated 3 billion smartphone users worldwide. Weve seen phone get larger, faster, and loaded with more features like fingerprint technology, improved cameras, and digital assistants. But the pace is slowing and phone sales are declining. Manufacturers are trying to find new ways to come up with excitement. In 2007, apples iphone ushered in the modern era of the smartphone. At the time, Text Messages and slow data were about all most Wireless Networks could handle. Then carriers moved to 4g. Download speeds got faster, phones got more sophisticated, and growth exploded. 2017 saw the first contraction. The trend continued into 2018. Devices arent making the big innovative leaps they used to. Phones are getting more durable. Some of the biggest markets are reaching saturation. So what will be the next growth driver . Some of the worlds Biggest Smartphone makers seem to think it will be the foldable screen, which doubles the size of the display without making the phone gigantic. Samsung and huawei are betting on it. But the technology isnt quite there. In April Samsung had to delay the launch of its foldable phone after some early users reported that it failed after only a few days of use. The screen stopped working after people peeled off a special film that looked like a screen protector. It was a pretty devastating blow so early in the process. What was unique is that it folded inwards like a book, whereas huawei brought out a foldable phone that folded outwards. What that means is it is not so much of a crease down the middle as you have on the samsung phone. While companies are experimenting with how to design these devices, they might start going more for the huawei option. May be the game changer will be 5g, though its rollout could be slowed. 5g promised to be so fast that it will only take a few seconds to download a featurelength movie. Huawei also has one in the works. What it will also do is support other technologies. The driverless cars, the world is counting on the capacity for Wireless Networks to carry that data. The internet of things, which allows you to connect your fridge to the internet or remotecontrol the lights in your house, that requires a lot of data. Experience has shown that it usually takes more than one improvement to get people to shell out for an upgrade. When we went to 4g, it was a combination of things. The ability to download the data made all the extra uses possible, but not everyone used their phone the same way. What you need is the capacity for people to start using their phones in new and different ways to justify spending more money. Taylor coming up, Chinese Telecom giant huawei continues to fight president trumps efforts to ban them in the u. S. We will discuss, next. Taylor this is bloomberg technology. Im taylor riggs in new york. If the u. S. And china come to a trade deal, china has one trade condition which is lift all tariffs. Here is what the ministry of commerce spokesman said on thursday. The chinau. S. Trade conflict started with the u. S. Imposing unilateral tariffs on imports from china. If both teams are to reach an agreement, the tariffs must be totally canceled. Chinas attitude is clear and consistent. Taylor larry kudlow told bloomberg on friday there is still a chance for in person talks to resume. Mr. Kudlow they are on the phone, the leaders, the senior people on both sides. Ambassador lighthizer, secretary mnuchin for the usa. They have been on the phone, they will be on the phone this coming week. I think a facetoface meeting is in the cards. I dont want to get ahead of that story. Taylor to discuss is isaac stone fish, senior fellow at the asia society. Great to have you here. Walk me through the logic because a week ago, coming out of the g20, we were feeling optimistic, yet something changed. Where do we stand . Isaac it is hard to know from the comments we just heard if they actually think that is realistic but where we are today is that we still have a pretty large hole between what the u. S. Wants and china wants. It is unclear if the u. S. Is going to release, reduce some of these tariffs or we are going to see this loggerheads continue. Taylor removing all tariffs seems like a nonstarter, right . Isaac it really does. In order for trump to say, hey, im removing all of these tariffs and in that same sense i have a deal. It is a massive deal. That is really verifiable. A lot of the issues with what beijing has been promising to do is it is easy to imagine a scenario where a deal is signed and beijing goes back to old behavior that the u. S. Finds problematic. Taylor i want to bring in sarah mcgregor. From where you stand, what has been the Trump Administrations reaction . Like i was talking to earlier with isaac, we came out of the g20 feeling pretty good. What happened . Sarah we are hearing from them repeatedly. They think the talks are moving forward. They said today, Robert Lighthizer and Steven Mnuchin are meeting by phone with their chinese counterpart and continuing to talk. We dont know the substance of these talks. What are they actually talking about that is different from before with the talks collapsed over the issues you were discussing . China wants the existing tariffs to be removed. That married with u. S. Demands that china makes hardcore reforms like the removal of state subsidies and codifying into laws like ip theft, cracking down on it two things china does not want to do and would never agree