Transcripts For BLOOMBERG Bloomberg Technology 20240712 : vi

BLOOMBERG Bloomberg Technology July 12, 2024

Still in the red but a much better picture than it looked this morning. Abigail what a roller coaster on the day and the week. We had big gains from apple and tesla. This week, not so much. Nonetheless, the worst week since june for the s p 500 and the nasdaq 100 since march. The nasdaq down 1. 3 . Pressurehat selling really came off. The new york faang index down 1 at the end of the day. Some of this happened as value money seemed to give a tailwind to the macro sentiment. Yields really backing up on the day. Not confirming the degree of the selloff. I think what we had going on here, technical selling, the moving average, really looking for it in the morning. A very solid test there. The question is, will those nearterm buyers continue to step up . If yes, probably some Choppy Movement to the upside. If not, it could get ugly really fast. On the week, talking about really brutal losses here, the faang index down sharply. However, we do have one bright spot. I was mentioning the cyclicals. Theres one bright spot among the high flyers. That is zoom. Is of the high flyers managing to hold onto gains. Next week is going to be very interesting. Taylor talk to me about that while i have you. Within the nasdaq, higher volatility, looking higher than the reallife volatility. More volatility still to be expected. Abigail if you look at the vix curve, for the s p 500, it is rising right into the election. Vix where folks ,ere expecting big volatility on the s p 500 going into october, november, december, we are looking at closer to 37. That suggests uncertainty around the election. Bonds holding. Yield is literally flat on the week. We are probably going to see lots of bumpy volatility ahead. Taylor Abigail Doolittle keeping us honest on all things tech and volatility. For a closer look at those markets, i want to bring in art hogan, chief market strategist. Talk to me about the action in the last few days. A healthy pullback . I think abigail wrapped things up pretty nicely. That followstember one of the best augusts we have seen in years. Market that went very far, very fast. We had relative strength index on the s p and the nasdaq in the 80s, approaching 90. We had a market that got stretched and was technically overbought. It didnt take much of a Momentum Shift to see this market roll over a bit. That selloff came from a place where most profits where there to be taken. When they start, it happens. I think that is healthy right now. I think abigail set this up nicely. Looking forward, we have as many headwinds as we have tailwinds. When you think about the u. S. China Technology Cold war that is starting and heating up every day, heading into an election cycle, that is important as well. We still have aggressive Monetary Policy and fiscal policy. Taylor i want to talk about the weighting of big tech relative to the rest of the market. There was some concern that if you started to get a rollover in apple, tesla, it had the ability to bring down the rest of the market with it. Did you see that . I think that is a really good point. You could have a healthy rotation into the economically sensitive sectors that have underperformed since march 23 and yet see the s p 500 go lower. That is going to be more impacted by the largecap companies. Any of the financials, the materials names. You could get a significant rebound and still see the s p 500 lower. I think that is probably a healthier place to be. If we have to give up 50 or 100 s p points to have a broader market, that is probably a healthy place to be. Ithink that is logical, but doesnt have to be a zerosum game. Names havese tech just got ahead of themselves. Taylor i heard the minute we got a 5 or 10 pullback, investors are desperate to deploy that cash. You saw that. Prevalentortunity so that that can drive the market higher . I think that is the case. Think about the longerterm projections. 2021ng at this market, is going to be better than 2020 . If that is the case, should i take advantage into this market as we see what we normally see . I would say that is the case. Theres a lot of reasons to think there will be energy exploding into 2021 when we get a lot of vaccine when we get a vaccine and a lot of goods and Services Come back. Volatility, ihat think the selloff, these average selloffs that we typically have, are opportunities to have a better entrylevel. Taylor talk to me about the cyclical bull market. A lot has been made about the highflying tech stocks and growth versus value. Littlee started to see a bit of that rotation out of growth and tech into value. Is that sustainable . Heres the issue. 23,e the lows of march technology has done well. Aboutou think communications, technology, it does well even though the economy is in bad shape. Companies like netflix doing well regardless of the fact that we cant go back to work at restaurants or cruises. All the names that have done a mobilized well in economy. When the economy starts to turn better, the economically sensitive sectors, cyclicals or value, will outperform because they are tied to an improving economy that is actually growing. Right now we have an economy that is in terrible shape. As we turn the calendar and start doing some economic growth, my guess is that will continue for a while. It probably provides a great opportunity. Weve been telling investors for a while, you want to have the Mega Cap Technology Health Care Gains on one side. And on the others, you have the cyclicals. That is going to be a bumpy road. We saw a little bit in june. We are seeing some now. Taylor wonderful. Hogan,ou so much, art National Securities corporation. Coming up, we take a further look at that jobs report. How one company is making the job hunt fun . This is bloomberg. Taylor mark cuban betting that ai can transform the hiring process, investing in a startup. Take it away. Thank you. Thank you for joining us. It is a relevant data have you with the jobs report out. Im wondering what you believe the skills of the future are for the post covid workforce. What are employers telling you . The answer to that question has become obvious given the pace at which our workforce has been changing. The skill of the future is a fastmoving goal post. Jobs willays disappear in the next five years and nearly 62 million jobs will appear in the same timeframe. We all actually have these soft skills or strengths that make us naturally faster learners in roles that fit our strengths. Thoseant to talk about new jobs for a second. Today, we saw a lot of jobs created with the government and logistics and places you would see in this economy. But where do you see those 60 million new jobs coming from . Really across the board. Technology is changing the Technology Field but it is applying to everything across the economy. The real skill of the future is the ability to identify strengths that allow us to maintain a competitive advantage in the rapidly evolving economy from all angles. Im glad you bring up those socalled soft skills. We spoke to the president of Arizona State and he said the hottest thing in the job market is an english or philosophy major that can code. What are the soft skills that you can boil down to what employers are looking for . There are no blanket skills that fit every job. It is very unique to every single role as well as every single company. Research has shown that the soft skills or strengths that people have are the most accurate predictor of future growth performance for any job. It is about finding the strengths and for companies, finding the best benchmark or set of attributes that fit their role and their companys culture. The strength that work for a specific company can vary by department, by team, by actual geographic location. That isg a technology able to identify which soft skills work best for a certain role is the key to unlocking the power of soft skills in the hiring process. Can you explain this unconscious bias among employers . What are employers getting wrong . Unconscious bias is something that is not really a denunciation of any individual. It is really something that is kind of a psychological phenomenon about how we evaluate and process information sequentially or at all. The crazy thing is, it is so obvious from the numbers that we see. Andies show that whitening applicants name on an equivalent resume doubles the callbacks for interviews. People think we are learning soft skill information through interviews. Ourresearch shows that evaluations are made in the first 10 seconds. In the first 10 seconds, the most salient information we glean are things like gender, age, race, and socioeconomic signals. We have recruiting processes which scan for certain top schools or previous impressive work experience. So that is really what is driving the hiring outcomes we see. You can really point back to the resume as being the primary culprit for that phenomenon. That is pretty incredible. A lot of this came out of your work at harvard law school, your worked with the white house. What are you worried about as a lot of this hiring starts to go online instead . I think it is an incredible opportunity. With covid19, millions of talented people have lost their jobs. But ive been saying to everyone for years that this is actually a unique opportunity. One of my more controversial opinions is that i think most people are in the wrong job. This is a conclusion born out of those years of research. We are ever directly exposed to such a small fraction of the possible jobs in the world. Largely as a function of factors like socioeconomic background or what jobs my parents did or a hot job that came to campus when i graduated. It is unlikely that people ever just find the role that matches their unique ability or interest. I believe the most imminent threat to american competitiveness, finding the roles that fit us, this is an opportunity for everyone to have a career pave it and find a role that really fits their ability to compete in this workforce. We want to come back to you another time very soon on how you are finding that skill set matching with employers. Want to bring this back to taylor for some breaking news. News, with that breaking tesla on this news which we thought was going to be added, now falling 3 , as they will not be added to the s p 500. Effectiveges will be prior to the opening of trading on monday, september 21. Paradigm, catalent, moving to the s p 500. Falling nowsla almost 4 . To make surent that you guys stay tuned with us. We are discussing secondquarter results. Can the company keep its momentum . We will have that preview next. This is bloomberg. Zoom, a clear beneficiary of the work from home trend during the pandemic. While zoom reported high earnings, is zoom going to be able to keep up the strong results from the last quarter . I want to bring in nicholas, director of equity research. Nicholas, great to have you. I think the issue and some of the concern is that expectations are so skyhigh for this company. Can they meet those expectations . Thanks for having me. Happy to be here. The entire space has been impacted by covid in a positive way. Some valuations have been going up. Slack and zoom together. Zoom is may be justified. Hand, what wether are seeing is super interesting. Competitors,in slack downloads are down quarter on quarter and they are negative year on year. We found a strong correlation between estimates and reported new customers. , thatthat relationship points toward slowing or deteriorating net new customers going into the quarter. Zoom, theirat downloads are up 2500 year on year and three times quarter on quarter. Microsoft teams was up as well. Looking at the general competition, slack seems to be lagging and losing market share. Taylor im curious about the demand for slack. Demandere still be several quarters out, even if things return to normal . That is a really good question. One of the main issues is that slack was widely used before covid for messaging purposes. When you look at the post covid world, demand for videoconferencing skyrocketed, so zoom is the main beneficiary here. We did see one month of strong download growth in march. That was followed by negative growth each month since then. You will see seasonal trends. ,ypically the Holiday Season and now that vacations are over, we are seeing a pickup in slack engagement in downloads. However, going forward, i dont see anything that would change the declining growth precoronavirus. Slack engagement download growth was deteriorating before coronavirus even happened. Then you had one month of a spike and since then, negative. To be honest, i dont think that is the case. Taylor how much of that download engagement is due to competitors . We talk about Microsoft Teams and slack has huge competition. For sure. Lawsuitactually some going on between slack and microsoft. Slack is accusing microsoft of anticompetition. They are issuing their teams platform for free to retain the microsoft suite and Microsoft Office products. Given the fact that slack cannot afford they have a free platform, but they also have a paid platform. I think the fact that teams is free is going to hinder slack performance going forward. Taylor nicholas, thank you. We are getting the conference from President Trump. Lets listen in. As we begin labor day weekend, americas unprecedented economic recovery continues. You see what is going on. It has been pretty amazing. The United States economy today, million jobs last month 12. 6 million jobs created in just four months, that is a record by far. In august, we added 240,000 andil jobs, 170,000 Leisure Hospitality jobs, 20,000 manufacturing jobs. The Unemployment Rate plummeted to 8. 4 , the second largest single month drop ever recorded, surpassed only by our big decline in june. Last month, we saw large declines in the Unemployment Rate for african americans, hispanic americans, and asian americans. We are witnessing the fastest labor Market Recovery from any economic crisis in history by far. Our last administration had the slowest and worst recovery in american history. States hashe united seen the smallest Economic Contraction of any major western nation and we are recovering at a much faster rate than any other nation. Business confidence is higher today than in any other g7 or e. U. Country. That covers a lot of territory. So the Business Confidence is higher than any of those countries. Reached a newles alltime high. Retail sales. That is a very basic statistic and a big statistic. It not only recovered, but reached the highest level ever. 74 since surged to their april low and are nearly back to their previrus levels. That has been a tremendous thing. Have beenand new cars doing incredibly well. Mortgage applications were higher in august. Homebuilder sentiment reached the highest level on record, indicating that more construction jobs are on the way. Homebuilding has been great. U. S. Manufacturing activity reached a 19 month high in august. While my administration has fought every day to restore prosperity, nancy pelosi the democrats in congress are holding additional china virus h, reasonstage to, u that nobody understands. I think i understand. Speaking of politics, i think north carolina, michigan, and pennsylvania and other states, they should open the states. They should open them now. It is very unfair to the people to have those shutdowns continuing. Democrats are insisting on a massive taxpayer bailout of badly stimulus checks for illegal aliens on the mass release of inmates from jail. They want to release a lot of inmates. Some of them for very serious reasons. They want that as part of this stimulus package, can you believe it . Its time for the democrats in congress to start working across the aisle and put the American People first. An, we have 300 billion in account that we didnt use. 300 billion. That, iilling to use would be willing to release it, subject to congress, and use that as stimulus money. It would go right to the American People. We have 300 billion sitting in an account that we didnt need because things are going so well with the economy. But, it would be a very appropriate thing to release that to the American People. And im willing to do it. All we need is a signoff. That doesnt mean we are going some very prisoners, vicious people actually. We are not going to put them on the streets like the democrats want us to. We are not going to give stimulus checks to illegal aliens. We want to give the checks to the American People. We have 300 million there. We dont need the money. Just let that money get released to the American People. Rebounds,nomy theres only one thing that can stop the comeback and wipe out the future of American Workers and that is what the democrats want to do with a 4 trillion tax hike. Belementing things that will really bad for our country and this will just absolutely cripple what we are doing on regulations and so many other elements of success. We have the greatest economy in history prior to the china virus coming in. Now, they want to stop regulations. They want to bring up regulations to a level to stop the things we are doing that are a much smaller level and bring up regulations to a level no one has ever seen before. They want to do things that will make it impossible for any economy to grow. They want to ban fracking. As you saw, ban, ban. All of a sudden, the polls are going down and now he says i was only talking about not mabybe fanning fracking. It does not matter what he wants to bans. The people that control him, want to ban fracking. Whether it is pennsylvania, texas, north dakota, so many other states. That would be a disaster. Ohio. Want to abolish american energy. Its whats going to happen. Adopt disastrous trade deals and inflict a devastating shutdown. As you know, he said we want to shut it down. We would be willing to shut it down. And you dont shut down when we are setting records. By the way, we are rounding the corner. We are rounding the corner on the virus. Joe bidens blanket shutdown would collapse our economy. Would cause countless deaths from suicide, drug, alcohol abuse, Heart Disease and more. Shutdowns cause a lot of problems. A lot a very seri

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