Headlines and what it means for markets with our markets correspondent, abigail doolittle. Tech continues to outperform today, and it is something we have seen in recent weeks. Where is the leadership tech typically provides . It was not there on the day. That has to do with one of the headlines you were talking about, ratcheting up tensions between the u. S. And china. They have been there in recent weeks, but markets ignoring it to some degree. Last year, every other week risk on, risk off, depending on the headlines. Right now, there are concerns those headlines, the war of words between the u. S. And china, taking down tech. A lot of these Companies Receive quite a bit of revenue from china. Apple, the tech heavy weight received about 20 from china. The ship sector chip sector is super sensitive to china. We see the s p 500 tech index down more than 1 . The stock down even more. Over the last nine days, we have seen a real roller coaster ride. Last week was risk off. This week we have gains. How it will end will come down to tomorrow. Today, a tad risk off, especially for technology. Tracy speaking of Technology Stocks we are following, nvidia out with earnings. Im curious if we see the data center as well as the gaming chip demand that we thought we would see from this company in the quarter. Abigail the Data Center Revenue was really solid. They put up more than 1 billion in Data Center Revenue for the first time. Overall, they beat the revenue by about 3 , earnings by 7 . The guide in line. See it off in after hours. That had to do with the fact investors wanted a little bit more, as expected. The auto segment was weak. On the year though, this has been a winner. Up more than 40 . More than 50 , in fact, at a time when the s p 500 is down, the nasdaq is up. That outperformance tells you these chairs price a perfection. There was a good quarter, good outlook, but not enough to extend the stock higher, at least in after hours. Basis it looks like the of the s and p and some of the other big size, those big names we talk about, have been widening out, going back to the widest ands july 2013. What is this showing you, particularly apple within the . Is that providing any leadership . Abigail there is tension between that valuation, the tension we had this year, and that outperformance for the faang stocks. The faang stocks have been on fire. Many have been getting a huge bid up good results. Once you see this economy reopen, perhaps they are not going to be quite so well. It will be interesting to see whether or not that closes evaluation gap. On the year, there is a huge divergence. Expedia was one of tech internet name that reported recently. Not a great quarter. Those stocks being hit by the virus down in a huge way. Apple and the nasdaq 100 one in the same, up about 5 on the year as that carves a path. Stocks, that valuation is skyhigh on the stayathome gain, up more than 20 on the year. It will be interesting to see if the economy reopens as so many market watchers and americans hope if those faang stocks, the stayathome stocks, the new defense will continue rising, or if we will see that sector leadership rotate with the valuation gaps you mentioned. Tracy thank you, as always to abigail doolittle. I want to stick to apple. They are ramping up. It is pushing into some of the original podcasts vice seeking an executive. Day after just one spotify acquired the exclusive rights to joe rogans podcast. For more, we are joined by mark gurman, who covers apple for us. We know podcasts are popular, so why now . Why this new original push into the podcast arena by apple . Apple is pushing stronger than ever into original podcastsing. The reason to do this is to push apple tv plus. They are growing in content for tv plus. Putting podcasts as part of it will give more value to that five dollars a month subscription price. It is a hot area for other tech players, like spotify. Apple really pioneered podcasts 15, 16 years ago. Clearly there is a market for par podcasts. Tracy it seems like a clear push to integrate podcasts with apple tv plus. Is that the very Clear Strategy that you see . Absolutely that is the strategy. A lot of the originals they are working on acquiring our tv plus specific. There are two types they are looking at. One is a category of audio podcast shows that would be spinoffs of existing movies and tv shows on apple tv plus. The other would be wholly original new things and not based off of tv plus, but can be adapted into tv plus movies and shows. At the end of the day, it comes back to tv plus. Tracy we also mentioned spotify acquiring the rights for joe rogans podcast. Spotify clearly a formidable competitor. How does apple try to differentiate itself and keep up with what has become a relatively competitive space . Big competitive advantage is the fact that the podcast app from apple, the apple tv plus, apple music, they are built into the iphone. It sold over one billion iphones at this point. Million million, 600 ipads, apple watches, air pots, apple tv. Spotify is a software. They dont. Have that builtin hardware. Apple has a Big Marketing arm. The rbc have the money and the resources to push for original podcasts and the tv plus program. Tracy what is the monetization strategy . Monetization would definitely be part of that paid subscription as part of apple tv plus or apple music. At this point, it seems these types of shows would be paid for by apple in lieu of the podcast producers not slapping advertisements on top of the programs. You see spotify doing a mix of both. They pay for shows, but there are also advertisements. Itle will skip advertising, is a very small segment in their Overall Services revenues. It is basically tied to App Store Search ads. Also some other applications, like apple news. But we are not seeing that is very likely for the podcasting effort. Tracy you know better than anyone, anything to boost some of that Services Revenue that the company more and more wants us to become hooked onto. One final question, when you talk about an original podcast program, it has to have a clear leader. Who could be the front runner to lead this effort . They are looking for someone to lead the original podcasting efforts. It will probably be a bigger name podcast producer or someone from a podcast company. This person would be reporting to apples head of global podcasts. You will likely see these people take a bigger face as part of this initiative. You see the apple tv plus executives have a bigger face on the tv side of things. Tracy thank you as always to bloombergs mark furman. Coming up, we will look at social commerce with Michael Levine. What he has to say about facebooks latest move. That is next. This is bloomberg. Growth intinued ecommerce and social commerce during the current pandemic. Facebook wants a piece of it. Mark zuckerberg announced the company will recommit to Online Shopping and commerce, and that he personally will be involved to do so. We are joined by Michael Levine of pivotal research. He was taking a break from cold water surfing to join us. Always great to have you here on the program. Give me some of your initial thoughts about facebooks thoughts, and the opportunities it could unlock for the company. For the lead in. I think it is pretty fascinating. Clients,r messages to even looking as earnings season has gone by, it is pretty apparent that if you have a store, if you have under invested in your presence online, you need to get there, and get it figured out in a hurry. Lot facebook for doing Something Different than they have done before in their prior attempts. Necessarily a new thing to them, marketplace is not new. I dont think it has seen a ton of attraction. Investors have been waiting on this for about a year. I think they realize the same thing. It is the time to get behind it. I think they have also done a great job trying to support the small Medium Business community. What to me is very different is the much more open ecosystem that they are embracing. Working with Companies Like shopify and big commerce that are very frequently used solutions for small businesses. They are just making it a lot easier to take the on ramps. Tracy you kind of alluded to the next question, where they are making it easier. Earlier efforts had been maybe disjointed, for lack of a better word. Checkout,stagram other Brand Content on other platforms. Do you like the way zuckerberg is making this a cohesive plan that should be seamless across his family of networks . I do. The thing i would say is im not completely convinced they are going to have become a destination. One of the things if you look at the evolution of the big internet properties, i think when people have an association of this is why i go to facebook, snapchat, as compared to this is ory i go to amazon, ebay, netflix, where you are going to shop or watch streaming video, and if i dont have an account, or if i havent purchased an item, i will purchase it. I think they have such a large amount of traffic that they should have a large amount of success. If they change advertiser behavior and it follows on this big announcement from google shopping a couple weeks back, as as,l, about free pos cataloging your products in a way, be it google, facebook, it will just be a much better advertiser experience. So you can have something contextual to what somebody may be looking at on instagram and the ability to shop right there. It is gravy if they can go ahead and become more of a destination site in ecommerce. Im not completely convinced yet, but i dont think it needs to be to be a homerun. Tracy is there regulatory pushback . I dont think so. It is good you are bringing up regulatory. The whole regulatory subject feels like it has gone a little bit flat. We are definitely not hearing as much from investors. I think it is interesting that there is certainly chatter that seek anwas going to injunction around facebook integrating some of the properties on the backend, which would probably make it harder to pull apart. I dont know if they are necessarily completely out of the woods. As we got this reminder about google in the last week. This in itself i dont look at as being a regulatory issue. They definitely dont have particularly dominant share whatsoever on the commerce side. Tracy i totally hear you on that. I want to broaden out and talk about the Advertising Market. We came into this year thinking facebook, google, were going to be some of the best performers. Then the pandemic hit. You had talked a lot about Advertising Market that was facing these companies, yet the First Quarter results came out and things were looking a little bit better for facebook than we thought. How are some of these companies positioned now that you are looking at reopening when it comes to the Advertising Market, and if that demand on the part of the advertisers is really there coming back in full force . About astill hearing decent amount of hesitation on the brand side. Direct response has been the big surprise. To me, the absolute the biggest take aways were these companies were doing terrific in advance of covid hitting. We had snap pacing up 58 for the first two months of the quarter. Youtube had likely accelerated to mid40s. They didnt exactly say it was the number. 31 number for q4. The thing that has been surprising is how well direct response has hung in. The feedback we have heard from a lot of native dpc companies is you have seen facebook pricing come down 35 to 40 . On top of the benefit they are getting from lowerpriced media, just seeing higher conversions. You have a captive audience who basically cant go shopping offline. So to me, the interesting phenomenon, there will probably be some give back in terms of what has been described as christmas early by one of these advertising cohorts. The brand is going to struggle a little bit. So Something Like twitter at the nonconnected tv component of a company like play desk, make be slow in the recovery. A lot of the other guys have a good enough footprint on the direct response side. If anything, google is probably among the weakest of the largecaps. You think about the amount of snd exposure and travel exposure they have, i thought they were pretty good results. Tracy when we all start to open up, assuming a lot of us go back to the stores, how does facebook and Companies Like google capture the audience . Do you see this as a structural change, are they launching this and the timing is good because of the pandemic . What happens when things go back to normal . Is there probably is some degree of pull forward with ecommerce. I think the genie is out of the bottle at this point. We are still relatively underpenetrated by way of comparison, if i look at Something Like china. Im not in any rush to go back to cvs to buy stuff during the pandemic. I have realized i can get a time efficiency and cost efficiency. I think as i listen to these companies during earnings season, it has been this exile genesis pull forward that has accelerated. I think microsoft some did up nicely summed it up nicely, when they talked about the earnings. They had a couple years of Digital Transformation accelerated in the course of a couple of months. Maybe we will slow a bit on the penetration side, but it will be off of a much higher move. Tracy covering a few topics for us. Facebook, amazon, google. Thank you to Michael Levine of pivotal research. Coming up, ready player amazon. Ecommerce giant is entering the videogame arena to lure players away from hits like fortnite. We will discuss next. This is bloomberg. Amazons first major videogame launched yesterday. It is a free to play pc games the ecommerce giant hopes will help it become a force in the 159 billion global industry. To tell us more is priya a nod. There is a lot of optimism and expectations around this game. I first have to ask, how was the reception . Now how unclear as of much of a success the game will be. It is owned by amazon, their own livestreaming platform where you can see what games are popular that people are livestreaming. Crucible is not has not broken in into the top 20 games on twitch right now, or 20 categories, so that is one measure where you can see how it is doing. For zooming, twitch was helpful in some way in promoting the game. It seems like it still hasnt cracked into that top echelon. Tracy take a step back and tell us why amazon is interested in this space to begin with. Amazon has long been interested in adding different kinds of entertainment into the prime subscription. Especially in this world where fast shipping is becoming more common among other retailers. Ising more and more important for them as a way to draw people in and keep them spending. And having entertainment in all different forms is really important. Prime video, and video gaming they view as part of that. They see it as a huge space and industry with tons of cash, tons of people enjoy video gaming. It is like their investment in video. Tracy this is sort of the time when amazon is not the big player in this space. It is going up against electronic arts, activisionblizzard, microsoft, big players in this game. What is amazons strategy to stand out, differentiate, and compete with other bigger players in this space . It is not how they are going to do in terms of developing their own video games. They have another one coming out later. People being the second home in certain places, they are not going out as much. It might help they have a couple of different pieces to their videogame strategy. They are reportedly working on a cloud game streaming service. That would reduce the need for hardware like consuls. They also have twitch back in 2014. Quickly withi in a couple of years within a couple of years they world that into the subversion. Want prime, you can get all of these added benefits like free games, etc. Through twitch. It is essentially an amazon prime subs christian with twitch benefits subscription with twitch benefits to try and attract a new different kind of demographic into the subscription program. Tracy you mentioned twitch a few times. How much of a benefit can that be to the company . It is unclear, in terms of pushing forward their own inhouse developed video games. This is the first game that just came out this week, first bigbudget game. It is unclear how much twitch can help push that forward if it is not a game people are interested in playing. I think we need more time to watch it play out and see how much people like this game, and if they do are not. That will probably have bearing on amazons ability to attract talent to develop more video games. Priya anand from bloomberg, thank you for joining us. Coming up, our conversation with the ceo of logitech. We hear how the pandemic work from home boom has the company on what one analyst calls an impressive run. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Tracy this is bloomberg technology. Im taylor riggs. Facebook is announcing more plans to transform its workforce in light of the pandemic area in an interview with bloomberg news, Mark Zuckerberg said the company will hire more Remote Workers. Even work from home permanently if they would like to. He believes Remote Workers could make up 50 of facebooks workforce in the next five to 10 years. One company benefiting from the work from home boom is logitech. The ceo joins us now. What i love having about getting you on this program is you have a lot of insight into consumer behavior. What are the trends you are seeing from computers to keyboards and game consuls . Consoles . What more shifts have you seen . Our business is really structured around secular trends we are going through. People using video everywhere in the office and at home, gaming work,e,