Keys to the alfa bank castle. Chime is now in charge. Tech shakeups of the year. Abigail doolittle is in new york to break down the top Market Action of 2019. It has been a massive record run that i continue to be astounded by. Abigail it has been a spectacular year for stocks in the u. S. , really around the world. Sectorwise, when a difference a year makes. Sectorwise, when we think about a year ago, all 11 sectors lower, led by the defensive sectors, utility and real estate. This year, a completely different story. Up 48 on the year, its best year since 2009. That of course was the year following the financial crisis. Investors buying stocks hand over fist. That is the degree of buying power we are seeing perhaps that weakness last year has a lot to do with the buying power we are seeing this year. This year, nine of the 11 sectors up more than 20 . Interesting, one consistency between last year and this year, energy was the worst sector last year. This year, up 7 . Stocks on fire this year. Taylor abigail, we were showing a chart earlier about the amount. Do you think this is poised to run further . On my end, that is all that i hear about. Abigail that is a great question. I would say that typically these sorts of rallies, or if it was a correction, tend to go farther and longer in one direction then people think, but so does the sentiment. Not too long ago, before the phase one trade deal, there was the that the rally would be broken. Andhere was lots of worry uncertainty that the rally would be broken. We have earnings reports coming through, they have to be as strong as expected. Recession. Perspective,cal while it seems that many analysts and strategists expect the strength to continue, it looks like there could be a bit of a nearterm breather. The markets are technically some willed so maybe take chips off the table. Many strategists leave 2020 will be fundamental believe 2020 will be fundamentally as strong as 2019. Taylor take a look at a chart here. Andy, best for amd, bestperforming stock of the year. They have had much better years, at 300, 350 . That really talks about the cyclicality around shifts. Sinces only the best year 2015. As you are mentioning, up about 300 . Point to make them also back in 2009, it was a less than two dollars stock. It is not that difficult for penny stock along those lines to double in that way. This year, the rally needs to be taken probably more seriously than those picker gains. Ceostors really like the and think she is doing a great job with this Company Continuing the turnaround. It will be interesting to see if they will be able to continue to meet and beat the numbers in 2020. Sometimes, when everybody is on one side of the ship, that is when it goes in the other direction. Taylor well said. Bloombergs abigail doolittle, thank you for joining us. As you just heard, tech lead the in on bloombergs scorecard 2019. Look no further than the chip sector. It is not just chipmakers taking top performers, it is some of those older Companies LikeApplied Materials benefiting from some planning those parts. Supplying is from those parts. Joining us is ian king. What was the Biggest Surprise for you from the outperformance of the sector . Amd. You already mentioned but the companies that make the machines that make the chips, they obviously did extremely well. For was kind of a rebound what had just been thought of as industrial companies, and now they are to now they are Technology Companies again. ,aylor you had mentioned amd up 140 , up 300 . Are they always this volatile . Are they expected to remain this volatile . , a down yearast would be losing money. In a good year, the margin goes shooting up. Time,he bet is this investors have been believing is that the worst of the swings are over. Of course, there will be up and down years, still cyclical, but the worst is over. Taylor we have been talking a lot all year on this program about the race for ai. Is this behind some of the demand . Ian it is behind some of the perceived demand. Many investors are making a bet gets closer to thereswitched on, yes, will be demand for these parts. There will be affects there will be effects for the equipment makers now. It is a long bet being made. Taylor when we talk about demand, this is a chart where you know the story better than anyone. It is the stoxx index. We take an eagles eye view. The frustration, i think, in 2019, we kept calling for bottoming out some of these memory chip prices. Are we finally there . Ian who knows. Memory, because it is commodity traded, very volatile by its nature and it always has been. Bottom oncall the that market has not traditionally been a fun thing to do and has not resulted in people making a lot of money. That thing you are focusing on is very specific and very volatile area of the chip sector in general. Some of the higher end radio parts, you cannot just go and buy them in bulk. Taylor any sense that these companies are doing a better job forecasting some of the inventory and supply and demand dynamics that seemed to run the fundamentals of these companies . Ian they would say that they are. People who dont believe that are saying, you are just more cars,s, you are in appliances, so basically your ability for the market to crash on demand of one and product has been dissipated of one end product has been dissipated. That is the consensus opinion that the markets they are playing in have been more varied. Taylor that was bloombergs ian king. Thank you. Largestp at chinas technology company, huawei. Spookedctions have customers and suppliers around the globe. The trap of ministration has called huawei the Trump Administration has called huawei threat to national security. Coming up, why uber and postmates are suing for what could be a landmark labor law. If you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg. Com, and in the u. S. , on sirius xm. This is bloomberg. Is the gig economy versus the state of california. Huber and postmates are suing california to block a new gig worker law. The laws designed to make sure workers such as uber drivers receive employment protection. Huber says that the law unfairly targets Companies Like there is and will unfairly target worker flexibility. Joining us now to discuss this and much more is mk and partners Senior Analyst for internet mkn partners Senior Analyst. How do you see that fight playing out . First and foremost, we need to frame this in a way, how uber and all the gig economy people are viewing this. They feel that a lot of people have been exempted. A lot of freelance workers have been exempted. They have always been drivers have not been exempted. They have always been with this notion that we do not qualify for this ab5 identification. When they sued california, that was a surprise. Been, the rhetoric has january 1, they will not be a lot of enforcement, they will go and thatallot in 2020, is what people are focused on. Suing california today, in my opinion, is a surprise. They do expect more negative news starting tomorrow, possibly more lawsuits from drivers unions and likes like that. Taylor does it change anything in your fundamental analysis that was not priced in . The stock isat traded, a lot of the potential outcomes are priced in. Now that they are seeking an injunction, there may be bigger lawsuits, greater Unionization Efforts amongst drivers that uber has become aware of. Andshare price, Lyft Doordash are not part of the lawsuit. Back to september, lyft, doordash, postmates, and uber, each contributed to lobby to this ballot in 2020. Only uber and postmates joined the lawsuit. Aree lyft and doordash contemplating something else. Taylor take a look at a chart ipo, basically since the lyft and uber down 35 , 40 . Was it something about lyft and uber specifically . When they came to market, the rules were growth at all cost. When they came after the ipo, nobody told them that the rules are going to be changed. It is no longer growth at all cost, but we need to show the pathway to profitability. Not just that, we need evidence that you are taking steps toward being profitable. Have shrunk significantly. Fundamentals are good. Decelerating, but fundamentals are ok. Taylor we have talked about lyft and uber hitting the ipo markets. I want to look back at 2019 and the botched ipos we saw. Peloton, pinterest, slack, all set to close below their ipo price. Was there something bigger going on in the ipo market or something about those companies . I would kind of frame that most of the ipos were fundamentals and the market dynamics. How many shares are available to sell, buyers and sellers. A mismatch of probably 9, 12, 18 months. There are lockups, people selling after the lockups, then more and more supply gets unlocked. These companies are in that kind of timeframe. They will expect more kind of fundamentals and supply and demand to play catchup. Also, you wanted to see a pathway to profitability. Five biggest ipos of the year, trading below the ipo price, none of them are even close to being profitable. Peloton is 2022, slack is sometime in 2020. These Companies Need to show better unit economics. In on i want to hone peloton specifically. Another chart, you were talking about the supply and demand dynamics. You know what that has done to the share price. Has gotten a lot of from theon recently treadmills, the bikes, the hardware is not new. What do you want to see from peloton in 2020 . For this company to dramatically become a different , a much bigger possibility to sell to customers. Streaming fitness tech company. Is the bikes being sold, that is 80 of their business. Over the next 12 to 24 months, as more people download their mobile apps, more people pay the 10 to 20 per month subscription, that changes the business but happens more slowly. You are going to be sticking with us because up next is the list for those tech ipos in the coming year. Will Companies Like airbnb, palantir, go public . Bloomberg technology is livestreaming on twitter. This is bloomberg. Taylor tesla could meet its vehicle delivery gulbis quarter thanks to a surge of sale delivery goal this quarter thanks to a surge of sales in the netherlands. Almost four times as many registered this month as were sold there in november. Tesla needs to hand over about 105,000 cars worldwide this quarter to eight the low end of its guidance for annual sales. Two hit the low end of its guidance for annual sales. 2020 is sure to offer up big for the tech sector. Kulkarni ofrohit mkm investors. What does your forecast look like . Rohit the way i would characterize it, there is a significant aging affect amongst private companies. Longer, staying private they are becoming larger on the private side. The only way they can get the liquidity is through ipos. Happen around as 20 billion. The stock market is at an alltime high. That makes the sentiment of the average joe more positive. I am not a macro guy but my crystal ball says that if this holds, we should see more ipos in the next six month because we have elections and we have uncertainty in the second half. That is my crystal ball. Again, we will see how things go. Taylor trying to round up the sentiment from analysts on the street. It is amazon, typically in the interviews i am doing, amazon is not in the top five. Why amazon for 2020 . Thet on the cell on islside community, it amazon, facebook, google in no particular order. It is amazon, followed by facebook followed by google. They are investing a lot of money in sameday shipping. What is the return going to look like . Ineel we will see returns the first half of this year with growth in some shape or form. Perhaps investors can give them a pass on margins. The second debate is, can amazon hold its market share in the cloud . I think that is the biggest kind of debate. 6, 12, 18r the next months, what amazon has been doing from machine learning, mega workloads that migrate to the cloud from mainframes and very old data centers, that is where amazon is doing a lot better compared to microsoft and google. That is where i am willing to bet that amazon again steps away from the cloud and continues to hold market share. Taylor picking the other two favorite children, facebook and google, i am showing a chart that is total ad revenue, google and facebook clearly number one and number two. Are those the best two poised to benefit from a very constructive ad spend market . Rohit absolutely. They are having a symmetric amount of growth and a symmetric amount of market share from dollars going from offline to online channels. Facebook and google both are multiheaded monsters. With more thans a billion users or eyeballs as you call it. Amongst the social media names, i like snapchat, where snapchat might be positioning itself as somebody who can take available share from twitter amidst all the political advertising debates going on. Taylor within big tech, antitrust, data privacy, do you shrug it off because the fundamentals are strong . Rohit i feel that the order, amazon, facebook, and google, the regulatory headwinds that each of these companies face, that is the order in which i feel the companies will have sentiment weigh on them amazon the least, facebook in the middle, and google with the most. The sentiment and the multiples, and that is why we call it that way. Taylor thank you to Rohit Kulkarni of mkm partners. Coming up, alphabet in the new year with Sundar Pichai officially at the helm. This is bloomberg. Taylor this is bloomberg technology. Im in for emily chang. It was a shocking change at the top, stepping down from their role at the Parent Company alphabet in early december. A new ceo has taken over. We also have mark, who covers the company for us. Ago when they announced alphabet, when the dust settled, it was obvious at pichai,nt, Sundar Google is 99 of the revenue for alphabet. , someone said it gives Corporate Structure to its reality. What changed for you a few hours ago . Nothing at all. Sundar has done a great job. Well. Ock is doing very it typically does well in on years and doesnt do as well in even years. Performing, the relatively doing relatively well. Can you imagine if you founded the company 20 years ago and you are worth over 50 billion and you are there is a super capable person in charge . Theres a lot of other things they get to explore. I dont think anyone is surprised. Other things in life to do with 50 billion. Taylor do you see it as a vote of confidence in sundar . Is it really just letting him take over and do what he does best . Theyre going to be advisors, im sure if he needs to make a call to them, they will pick up the call. I dont think anything is going to change. The upandcoming businesses that are the next big businesses are all equipped with their own operating teams. They are wellfunded. Some of the other businesses are super tiny and theyve got a lot of great momentum. This is not a rudderless ship. They are more shareholder friendly with the action on the buyback. From a shareholder perspective, with the way we look at this, this is a terrific investment still. ,here is really no issue here this is more like headline exciting, but fundamentally i dont think anything is going to change. Taylor you heard fundamentally perhaps no changes. A statement saying the change will not affect anything. What changes for him early tomorrow morning . Alphabet was betting on was one ofgy, nest the big companies, and fast forward four years, google fiber has all but collapsed. Critical about self driving cars. Sundar has never run a biotech company. Theres something almost symbolic of the fact that the founders who set the tone and the culture for this company for receded and now officially stepped away. So there are a lot of open questions about the rest of alphabet outside of google. It doesnt say anything about the political pressures he has to wrestle with. Taylor the political pressures are clearly one of the big them. Ngs facing all of tim cook at apple seems to have a Good Relationship with the president , working with him on tariffs. How do you see sundar in the context of a relationship with the president , or being too able to tackle antitrust and privacy that are overhanging the company . Big platforms are under the same scrutiny. We cover amazon, they are all under the same microscope and have been operating under that for quite some time. Ive said this repeatedly, having covered tech for 25 years and watching microsoft go through this, they have performed extremely well. You have to separate the noise from the reality. Microsoft was a fantastic stock to invest in in the turmoil over the regulatory overhang in your. Stock is up 51 year to date. Date. Is up 24 year to do you want to be invested there . Absolutely. The regulatory will always be there for everyone. It is what they do. They have been doing this for a while. We have been dealing with regulators for 15 or 20 years. I dont think anything has changed. The overhang creates more sentiment and that is great, because they keep putting up great numbers. When you have best sentiment, bad sediment, the numbers go higher. We revisited debut that didnt go as planned. Elon musk took twitter by storm. Conversation, next. This is bloomberg. Muskr in november, elon unveiled teslas longawaited electric car, but it didnt go as planned. , the truck was the number two trending topic on twitter, not always good for publicity. Reporter. Our auto breakingbolic, glass is symbolically the tesla story, which is twofold. One is trying to disrupt the status quo. Onlyould never imagine not the glass raking, but you rewind a few moments before, you never imagine any company doing that. Thats the one piece of it no ceo in their right mind would have done what elon musk did with that. Secondly, its representative of elon, making some quick judgments that may not be in the , unfortunately you have to take the bad with the good. When i watched it, it was painful to watch. As i sat back and kind of processed it and was talking with more people about it today, i think incredibly you will think im tone deaf here but i think there was a Silver Lining because some people thought it was really funny. Taylor let me bring you in here. It might have been painful to watch, but the fact is, we are all talking about it today and we cant stop watching that video. Is that in and of itself a little bit of success for elon musk . I think so. I definitely dont think smashing the window was intentional, but i do think the sort of radical nature of the car, it has drawn everybodys attention. In that sense it is a great marketing success, i think. I even spoke to a