One stock that did not snap the streak was tesla. On the month, down by close to 20 . Down by more than 40 today. Lisa it has been kicked out of the magnificent seven. We have a company that is fighting a sentiment wave as well as the very real wave of competition in china during a fraught market for the electric a fraught moment for the electric vehicle market. Jonathan product release, competition in china, we are trying to figure this out. What is the tesla problem and what is just the broader industry problem right now . Annemarie you are seeing this ev demand around the world especially in china. You do see China National companies doing very well. The issue seems to be in other places especially in the United States. When it comes to tesla, the problems continue. Overnight we have an exclusive story about the newly formed Marketing Team part of those companywide layoffs. This was supposed to be to get the message out in advertising. When you saw the Inflation Reduction Act and tax subsidies, a lot of people bought evs. Now the demand is starting to wane. Jonathan we have had problems not just for tesla but apple as well. More bad news for apple. Iphone sales in china falling 19 during the march quarter, the worst performance there since covid in 2020. Annemarie it is losing market share. This is a more important point that they are taking over which raises the question, how do they get a foothold. This is the reason why apple, tesla, they are in a world of their own. They are dealing with the china question in terms of demand but they are dealing with a broader demand question for their products which is why we are seeing this for sure fiss ure in big tech earnings. Lisa the most interesting number was huawei and comcast climbed. You can see these National Champions in china doing very well at the expense of apple. This report comes after Gina Raimondo said we are out shipping you, we are better than you. Our product is better. Is it . Huawei is taking apples market share. Jonathan it has been said that this is an apple problem. This is a growing market losing market share. We have seen that against the likes of huawei rising to the top. My favorite story this morning is this one right here. The u. S. Federal trade commission and its 8. 5 billion takeover. This is coach going after versace. The government is worried about more expensive handbags. Is this the story . Annemarie they voted unanimously on this. What i take question of is why was this able to get through the regulators in europe, which is a highly regular place and japan, yet it cannot get through the u. S. Ftc. This remains the question of can any deal get through with this antitrust enforcement individuals at the top . Lisa you need your jimmy choos. We have seen real inflation in luxury. The price gouging in the luxury factor, it is time to target it. Obviously, michael kors handbag, shoes, a little bit cheaper now, maybe. Annemarie i think it is affordable luxury. Jonathan entrylevel. This is ridiculous. More on that later. Plenty of earnings this morning. Ubs numbers dropped moments ago. Coming in at 143. The estimate was 130. Lisa talking about average daily volume in the United States showing improvement and expecting a return to volume and revenue growth. There is a lot of costcutting. Not necessarily as much of in terms of growth but this does not necessarily speak to some sort of massive slowdown in the Consumer Spending or even in the goods sectors considering that they will bring back to some normal level in the future. Jonathan the broader market, welcome. Equity futures on the s p 500, futures pushing higher by 0. 1 . It was just a touch higher on the 10 year, 461. 69. 4. 6169. That move faded ever since that data came through. 1. 0 661 on eurodollar. Coming up this morning, bloombergs enda curran and Andrew Hallman horst of citibank. The s p 500 bouncing back above 5k. Steve chevron saying this, while we recognize markets might be choppy, we view pullbacks as attractive opportunities to add to equities as the market marches toward our longerterm 6000 target. Steve is with us in new york. You said it was hard to sound this market. Is that still true . Steve thats right. You have the ingredients for a pullback. We are probably in the middle. I think you have a lot of folks that are itching to get in the market. It is an old term but cash yields have probably peaked. We think you will still see some rate cuts. Probably one or two which has been about where we are. There is a risk of zero which is not a zero risk. With the market repricing higher , bonds are not all that attractive. You saw the ups numbers. The economy is still relatively strong. The consumer is hanging in there. Earnings are doing ok. Jonathan with a twoyear close to 5 , you are saying that does not provide much competition or the competition is in the process of peaking . Steve if you look at where cash yields will be, when you hit rate cuts, those yields will come down. As you look at where the 10 year is, it is hard to envision a world, even if you got two cuts and steepening in the yield curve, this 10 year there is some value, but it is not like the table is screaming value. Lisa it is amazing that everyone was talking about broadening out and that is where the value was. Now we are seeing rate cuts being priced into the market. They are just going to do fine and the Strong Companies will keep struggling. Steve we are not there yet. We came into this year with a one or two cut forecast. The question is will there be two. One to two is fine. Leading into 2025, you still get that broadening out. If that ends up being zero cuts and now you are questioning 25 cuts, then all bets are off. From our perspective because we still see one to two cuts at this point, we think that broadening out trade will ultimately be right. If it is zero, then that is pushback. Lisa can you give us a sense of what you have been doing the past couple of weeks . Is this seeing mag seven falling out of bed, you are aggressively buying where you basically watch this and say i am not going to do anything. It is just noise. We are still marching toward 6000. Steve at the risk of sounding right again, [laughter] im not going to lie. Jonathan that was beautiful. Steve that was a live tv moment for you. We have underway on the max seven. We came in this year with this idea of broadening out. We took a little bit of pain in the first part of this year but the idea was when you look at the relative earnings growth, it will decelerate for the mag seven and it will be overtaken by the forgotten 493 as you get deeper into this year. Given valuations and names that are hard in earnings and given this idea that if we do get rate cuts at some point and the economy is stickier, then there is catchup play. We have not had any this past couple of weeks. The markets have come to our positioning. Annemarie what do you make of some of the noise and a 20 of ability that there could actually a 20 probability that there could be a hike . Steve they have gone through so much of the Political Capital in the market for cuts that now they are being delayed and putting through. To do an aboutface, you need to see inflation not just be sticky but reaccelerate and that is the big question right now and for the market. Is what we have seen inflation that is sticky or is it truly reaccelerating . We are asking that question but we are not yet ready to say this is reaccelerating and we are back in a hike scenario. We are not there yet. Jonathan if it is sticky mud that is good for stocks . Steve sticky is ok. You are probably grinding longer. You can get that broadening out. That is better than plummeting inflation. Reaccelerating inflation which brings hikes back on the table, thats a different scenario. Jonathan is there anything in the growth inflation mix that risks squeezing margins . Steve we were talking about this yesterday. If you think about where you are versus the beginning of the year, you have Energy Prices higher than you would have expected. You have overall inflation which has stabilized. The question in the earnings estimates are how many rate cuts are priced into those estimates. If they are not going to come through, there is an interest expense there. We have been bullish on earnings but that is something we are sharpening the pencil on and trying to understand. Lisa average daily package volume for ups came in above estimates but revenue came in below estimates. Speaking to exactly this point. I would hate for you to leave without commenting on expensive handbags and what you feel about the consolidation in the fashion industry and whether you think that this is going to harm the american consumer. How do you factor this into your investment thesis . Steve given the mood around this table before going on the air, i would not dream of supporting the ftc here. I might incur violence. I would say it this way. I do think there are there have been a number of merger or acquisition opportunities that have been blocked at the ftc for companies that from our perspective are folks who are trying to stay alive and improve a Competitive Position that are not in danger of creating a monopoly position. I would agree that this is one as well. It is not necessarily a pocketbook issue but it is a handbag issue for Many American consumers. Jonathan that was good. Steve i think it is terrible and handbags should be much cheaper. Jonathan i totally agree. That was steve chiavarone. Perfect. Pepsico beat on the top and bottom line. Pretty Solid International growth as well. Not a big move in the stock. Softer in the premarket on pepsico, down by about 0. 5 . Lets get news elsewhere. Here is your bloomberg brief. Dani ubs is pulling back on plans to build a mutual fund in china. It will instead rely on existing joint ventures. Ubs was contemplating a standalone platform since 2020. Tesla is being sued by former employees who claimed the companys decision to layoff 10 of the workforce in a global retrenchment broke the law. According to the complaint filed in a california court, by not giving notice, tesla acted intentionally and with deliberate indifference and disregard to the rights of its employees. Apple is close to making a deal with fifa to get rights to a new monthlong world cup style competition according to the new york times. It will be apples latest venture into soccer following the 2022 deal and it secured a contract for the worldwide streaming rights to major league soccer. Jonathan appreciate it. Up next, u. S. Tech struggles in china. The china shock continues. It is something we have seen over again, creation of excess capacity, overproduction that brings down prices. Jonathan it has been pretty shocking for the likes of apple. That conversation, up next. the road to opportunity. Is often the road overlooked. at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. Because we believe the more ways we all have to move forward. The further well all go. But i couldnt find pilates anywhere. So i started my own studio. And with the right help, i can make this place i love even better. Earn up to 5 cash back on business essentials with the chase ink business cash card from chase for business. Jonathan six days of losses on the s p 500. Attempting to add some weight to that. The bond market pretty stable. 4. 61. It is all about the earnings this week. U. S. Tech struggles in china. The china shock continues. The chinese doubled down on what we call nonmarket practices. Investment in a strategic emerging sector. It is something we have seen over again, the creation of excess capacity, overproduction that brings down prices. It is a predatory pricing practice. Jonathan here is the latest. Iphone sales falling in china by 19 during march according to research. The worst performance in the region since 2020. The company is facing competition from rivals like huawei. Enda curran joins us now to discuss. Lets talk about some of the complaints. Excess capacity, overproduction, heavily subsidized product and competition. This story feels a lot more like fierce competition than anything this government is combining about. Can you walk us through the forces holding back u. S. Tech firms . Enda there is one stock that speaks to your point. Huawei sales in the quarter rose 70 even as apple shrank. That speaks to the idea that china is innovating and driving its Homegrown Technology to compete with the best of the best. At the same time we did have other details. Against the backdrop of the chinese new year, consumers are buying and spending. They were buying chinesemade phones. It does lend itself to the idea that there is a homegrown base. We are seeing that among electric vehicles as well. Tesla discounting to generate sales because they are facing competition from homegrown chinese technology. It should be set ahead of the visit to china by Antony Blinken, there was a rare briefing by the Chinese Government to the colleagues in beijing where they pushed back heavily against u. S. Criticisms of overcapacity. They accuse u. S. Of naked economic coercion. Two things coming out of these earnings. One is speaking to rising chinese competition. Secondly, chinas pushing back on this idea that they are exporting against the rest of the world. Jonathan i want to talk about the increased competition. You alluded to it. The consumer choosing Chinese Brands over american products. Do you get the sense it is gathering pace looking at what is happening with apple and tesla . Enda part of the story is nationalism because the government has put restrictions on which companies can buy apple iphones in the first place, state owned companies, Government Agencies are not allowed to hold apple phones. That is nationalism, no doubt. The data for that quarter speaks to the point when you see apple losing market share but at the same time huawei gaining ground by 70 . That speaks to the idea that money is there. Consumers are not buying these devices. The tech experts with apple launching new devices, they will see if it can rebound. That will tell you how much of this is nationalism at the moment. There is no doubt at the moment it is being reflected. Annemarie Gina Raimondo, we have the most affected semiconductors in the world. China does not. We have outinvaded china. We have outinnovated china. Steve there are tech experts who will make the same point that china is not quite on the spectrum of technological innovation as the u. S. Equally there are critics of u. S. Policy who will say that all of the all the u. S. Is doing is accelerating chinas own homegrown technological innovation, forcing it to double down on r d. We are seeing that from the government in beijing over the last few months as they have said Economic Policy for the years ahead making it clear that technological innovation and manufacturing is a top priority for the government ahead of lots of other traditional areas that drive Economic Growth. That is what is one of the spinoffs from the policy, doubling down, forcing china to double down and eventually they will make some breakthroughs as we see huawei gaining ground in their First Quarter on the back of their revival and the model they launched last year. Annemarie you mentioned secretary blinkens travels. When you look at this relationship, the Chinese Government will complain about the ev tariffs, more that are coming down the line, the probe into the shipbuilding sector, the tiktok ban that will get a vote today in the senate. Which is top of mind for beijing . Steve there is no doubt, on paper, the relationship is stable. Its the best it has been in a couple of years. Officials are going to both capitals. As you say, these measures continue especially on the u. S. Side, to continue to double down on punishing china where they can. We are starting to see a hint of pushback from beijing. There was that rear briefing from chinese diplomats that rare briefing from chinese diplomats. They are making the point that accusing the u. S. Of negative economic coercion. These are pretty harsh and striking words that the chinese are using. It is the harshest rebuttal so far. That one does seem to be striking a chord perhaps above all else. It will be interesting to see how the talks with Antony Blinken goes. We have reported that he plans to make clear in terms of his views of Chinese Company support for russia. There are two prongs where we could see tensions flare. Lisa a lot of u. S. Officials have met with a lot of chinese officials. There have been a lot of talks. Do the diplomats in china speak with president xi jinping after speaking with u. S. Officials . Steve there is no doubt there is hardly a unified approach when it comes to dealing with china on several issues, be it economics or national security. We saw last week with the german chancellors visit to china, mixed signals coming out of that. Not necessarily on the same playing field. That is a continuing process. We see the u. S. Taking steps that are unilateral, sometimes with the eu backing and sometimes without. If we are talking about a unified approach to china on economics or national security, i dont think it is there yet. Jonathan enda curran are two big issues there, what is happening in china and the tension on the South China Sea. Increasingly concerning. Lisa especially at a time, president xi jinping has aims that are divorced from Economic Growth or what is happening with the economy which is the reason why there are so many mixed signals for private companies and International Companies who want to go into china. Right now it is not clear where the priority is. Jonathan this line from the head of the end of pacific command, it is moving very fast, the buildup of military power, despite a bad economy, a chinese sovereign territory and the actions going toward enforcement. There is a lot to unpack. A long list of concerns. Annemarie it is also why you see the United States today and the philippines conducting military exercises near the disputed