Warning against seating Telecom Infrastructure to china. We get reaction to that. And tesla turned our heads this week. Look back at some of the biggest stories in tech. To our top story, u. S. Equities headed into the Holiday Weekend on a positive note after the release of steady figures for retail cells and with investors continuing to weigh contrasting data from china on the spread of the coronavirus. The s p 500 closed at record high after swinging between small gains and losses in fridays session. To discuss todays Market Performance and technology we are joined by laura kane of ubs. To kick us off, i want to take a look i am showing from my terminal. As you know, the trade of 2019 was u. S. Versus the rest of the world. I was speaking with david kelly, the global cio of jp morgan Asset Management who was trying to make the case for over waiting International Equities. Are you still trying to overweight International Equities or do you think it is u. S. Versus the rest of the world . Right now we see the u. S. In the lead. Given that there is this search for safety in light of the coronavirus. He came into the year, the set up was looking good for emerging markets. We still remain overweight. The rationale being that we still think once we get past the coronavirus fears, we hope most of the impact will be contained to the first quarter. Then we should see a recovery in the back half of the year. Once we get the recovery, we still think the set up for emerging markets looks good , aen the cheaper valuations widening growth differential relative to developed markets, some tell whens we see in terms of the ecommerce space and infrastructure and health care in those markets. Taylor we havent talking a lot about the coronavirus. Has anything from some of the markets warnings are getting about supply chains over there changed the way you are investing . Not at this point. We are sticking with our allocations right now. We are sticking with our overweight to emerging markets. Up till this point we see that it is mostly a demand story and concerns about a pullback in demand. If we do start to see more impact to International Supply chains, and if this does drag on longer, i think that is where we see the Downside Risk to the market. That is the situation we are monitoring closely. We have heard some Manufacturing Companies and some Ecommerce Companies mention some of these impacts to the supply chain. I would say that is a key rest. Seen, i think we only matteo risk to the downside in the event that the virus does heighten is not contained within the first quarter. Chartant to show another inside my terminal. So often we have talked about the rotation between growth and value. Yet Growth Continues to be leading, shrugging off concerns that growth here would return back into a value trade. How much of the growth outperformance has been based on big tech . Growth continues to outperform. A lot of it is driven by those Big Technology stocks. Right now, we have initial allocation between growth and value. Because we do think that Growth Stocks are starting to get expensive, especially if you look at tech valuations are at 11 your highs on a relative basis to the broader s p 500 per we do see that those valuations are getting quite high. At the same time, Growth Stocks do tend to do well later in the cycle, which is where we think we are. Taking those pieces together, we have a neutral allocation between growth and value. Davis analysts have been traditionally parish, some of their concerns they highlighted bearish. Some concerns they highlighted where the concentration of some of these big tech stocks that make up the overall s p 500 rate you get worried about the concentration here of how much concentration is making up these major indices . Yes, it is quite an interesting time when you look at the top five names represented. About 15 of the s p and nearly 50 of the returns. I think there is some risk there. At the same time, there are real secular tailwinds to some of those companies we like. For example, we continue to be bullish on growth for ecommerce and Digital Advertising. Enduring trends there that we like, despite some of the more stretched valuations. Again, we have to pick and choose among the Top Companies but there opportunities we still find attractive. Taylor you mentioned stretched valuation, take a look at this chart i am showing. It highlights those stretch valuations you point out, mainly within chipmakers and stocks. Youre not treading at a forward pe basis of almost 20 times your near decade highs. Are you still a buyer here, particularly of tech stocks . The chipmakers with these stretch valuations . We are not at this time. We filled evaluations got ahead. F the recovery in semis that is not one of our preferred areas. There is differentiation a penny on which end market you are looking at. Have seen strengths depending on on which and market. Overall semiconductors is not one of our preferred areas mostly due to valuations. Taylor and you said you are underweight and technology in part along due in part to the valuations here. But you are overweight munications. Communications. Yes we are underweight in tech mostly due to evaluation. We do continue to like internet stocks. A lot of those tend to align with Consumer Services or the consumer dish Communication Services or the Consumer Discretionary sector. We internet stocks is where want to take our bets and if you look at the byways of a broad basket of internet stocks, they do look quite cheap when you compare them to other technology stories, whether software or semiconductors. Taylor some internet stocks i think you are referring to, some we have been talking about on the program, were facebook and alphabet. Those were some topics from the street heading into 2020, strong advertising Revenue Growth they were looking at for 2020. Yet the market felt disappointed particularly after earnings perhaps did not live up to some of the expectations. Have you been surprised at the lack of these Big Companies can meet these expectations . I would say we would not get too concerned over a couple of quarters of earnings. For us it is a longerterm story. If you look at digital of adising space, 50 spending hours in the digital arena. We see this as a very longterm a story. With the growth we are seeing in social media, search, even streaming, we do see a lot of big opportunity in the Digital Advertising space. Do not see this relate slowing down. We are not going to get too concerned about a couple of quarters of earnings and are focusing more on the longerterm horizon. Taylor i read to your seven page report on 5g infrastructure and owning the inevitable. Yes, we see that 5g is coming. Where we see the best price opportunity is on the infrastructure side. Those communication equipment providers. We think there is an underappreciated opportunity baked into valuations, versus the smartphone side, where we see is maybe theres too much enthusiasm in valuations that are not justified. We think 5g is definitely coming. The place you want to be is in the infrastructure space, Communications Equipment and the tower companies. The valuations that really do not seem to appreciate the big opportunity coming. Taylor i want to end when you talk about the themes for the next decade. Lets push it forward an additional 10 years. You highlight demographic change. How does that influence your investment thesis . One of the trends is aging. The shift into the balance of the working age population versus the older segment. This is going to have profound effects across the world. It is something we talk about in the u. S. With the aging of the baby boomers. Dashed ofdoes affect it daz have affects really has effects across the globe. Theres going to be greater demand for health care, tech and canst health care where you can especially Technology Enhanced health care where you can reach more people at lower cost. Also Article Services to take advantage of the Demographic Dividend in emerging markets, so making sure the youthful population has the education and resources to really contribute to growth in those countries, where they can take it manage of having a greater balance of young people versus old. Ofcertainly see this dynamic an aging population really changing the landscape over the next decade and beyond. Taylor things for the next decade, we will have to get back to break down all of those. That was laura kane of ubs. Thank you for joining. Now softbank will invest a billion dollars from its Latin America Fund this year. The Japanese Firm will focus on ecommerce, health care and syntax. Softbank raised 5 billion for the fund and launched a year ago. So far it has invested in 17 companies and to Venture Capital firms. Syntech. Coming up, the u. S. Hit huawei with charges that sound right out of a bond movie. We will get the response director from huawei to secure the officer next. If you like bloomberg news, check us out on the radio. In the bloomer cap, on bloomberg. Com and in the u. S. On sirius xm. This is bloomberg. On the bloomer cap. Bloomberg app. E this is bloomberg. Taylor u. S. House speaker Nancy Pelosis backing president trumps assessment of the threat posed by American Allies doing business with huawei. As countries allow wally into its 5g networks. Such an illconceived concession will only embolden xi, as to economic values, independence and national security. Taylor this comes after the trumpet administration is using a racketeering law comfortably associate with mob prosecution to claim the country has stolen intellect shall property for decades. The u. S. Is trying to persuade toies not to let huawei build every structure. Taylor furniture, spirit what firstke of ms. Pelosi i want to get your comments. What you make of ms. Pelosi and her comments joining president trump. That they can agree on anything is miraculous. It demonstrates there is an all of government approach by the United States to use every tool in its arsenal including bringing together 20 years of previously resolved civil issues to try to hurt while way. Is this hurts americans , while way. Way wasip theft, while not investing in its own rmd. Huawei. That made by you be why was stealing. Huawei is privates we cannot see the numbers. Can you talk about it stealing from other companies . Not become the worldwide leader in 5g by stealing other peoples technology. We have 11,000 patents in the u. S. Asterisk that 15 billion for research and develop men around the world and we will spend 20 billion this year. So one of the great things is, as a former federal prosecutor and former attorney, the United States courts are going to require evidence and not just braggadocio and repeated claims and trying to browbeat other countries into blocking wally. Huawei hasor in the past, huawei said it blames rogue actors from killing, when they got caught stealing a robot from tmobile. They say these are rogue actors. What can you do to alleviate concerns this is not orders from the beijing government . That these were indeed rogue actors whose goal ip . You have stolen ip . There are a lot of issues in your question. The issue you are talking about was a previously resolved civil case where the court found no malicious conflict conduct by wowing. Till by huawei still the u. S. Decided to bring that is a criminal case in washington. In the Western District of washington. We can prove we are not subject to the undue influence of the china Government Regarding who we sell are products to our how we service the products. States wouldd consider looking dispassionately at the potential benefits and consequences and potential Risk Mitigation to provide assurance. Taylor lets have some of that conversation now. What can you tell us about any interaction you have or have not had between huawei and beijing . We operate in 170 countries in the world. We have the necessary committee cases with governments in those countries. We strictly abide by the laws of the countries. But we are a privately owned company. Our records are open. Anybody can take a look at it. Youre not going to be forced by , and we have never been asked by any country, to steal data or implant backdoors. Has beenhuawei successful in europe and the you kate said they will allow partial access to help build out 5g and the United Kingdom says they will allow partial access to help build out 5g networks. Onthe u. K. Is using evidence which to make decisions to make sure the citizens of the u. K. Are safe. I just saw a major canadian and germany and the European Union are going to try to do things based on real facts. The china government is allowing european companies, ericsson and nokia, to compete against Chinese Companies because they see the benefit of competition. The United States could benefit by encouraging competition. And a pretty,s thank you for joining. Oracles larry fiercely competitive moist he can an edge over competitors including amazon. Allison is now making friends with his enemies and me el lison is now making friends with his enemys enemy. Support in a ton of Silicon Valley. What is the say bout ellison and trump teaming up . Is someonelison willing to do things his own way. He is also super competitive. Those play a part here. Trump has been, causing a lot of trouble for jeff bezos. Larry ellison and jeff bezos are competing on Big Government contracts. Theres a lot of tension there between oracle and amazon. On the other hand, Larry Ellison is someone who has supported kids in the past. He held a fundraiser for marco rubio. He has been who has supported republicans in the past. In blue Silicon Valley, he has supported republicans. Taylor he is going to host a fundraiser for the president in his homes and top contributors are expected to shell out 250,000. What is the goal of this and some of the issues Larry Ellison is try to tackle here . You know, i think if you are a billionaire, happy that probably trumps his policy agenda was lowering tax rates. From the outset of his administration. Then there has been this error spite over the pentagons jedi contract. Trump has criticized amazons bid for it. Has reportedly looked to screw amazon in the process. To the point of judges now until up microsofts amazon finishes its court case. Theres is everything from tax policy to these government contracts that the president could have sway over. Taylor are you surprised by Larry Ellisons support . Surprising,t is given how few Silicon Valley leaders are willing to come out on this peter thiel obviously spoke at the republican convention. The first time around. That was such a contrarian bet. Again,aid over and over talking about peter thiels decision. Now we are starting to look at it this time. So Larry Ellison is holding a fundraiser. If it looks like trump could sanders becomes the democratic nominee, where did these other wealthy tech leaders net out . Taylor and besides the highs in the technology leaders, who to the Employee Support . To behnology employs seem much more leftleaning looking at donations in the fourth quarter, Bernie Sanders got the most. Lisbeth warren is popular. Elizabeth warren is popular. They are donating and among the democrats they seem to support sanders and warren generally. Theave seen reports with planned fundraiser that there are oracle employees who are clearly upset he is going to host the fundraiser. Taylor our thank you to bloombergs eric newcomer, all things politics and the intersection of technology. Now tmobile has received and on a nod for its merger with sprint. Does that mean for spence owner softbank and other wireless carriers . Week, the show airs tonight on bloomberg tv and radio and available everywhere online. This week features ihf vicechairman dan juergen. We are looking at a big decline. In february, Chinese Oil Demand is more than 20 lower than it was a year ago. Yergen. World oil demand is lower than anticipated and we think it will be lower than the growth than other people think. Taylor an Illinois Company that rapidly expanded in the past two years to deliver packages for amazon is now shutting down operations in five states. Bear downcalled logistics, will let go 400 drivers after failing to meet the ecommerce giant standards. The move underscores the challenges amazon faces about while outsourcing deliveries to new untested companies, instead of traditional partners like ups and fedex. It is also a warning to delivery partners that amazon is willing to cut them off. Has clearedmobile to close its merger with sprint is great for both Companies Sources say, the Parent Company of tmobile Deutsche Telekom now wants to renegotiate the terms