Focus on developing shares already suffering their longest dresses 2022. That in so much more this hour. We sit with much anticipation of the earnings to come, some Risk Appetite today. Maybe the bad news is good news. Some of the Business Activity cool enough more than the market anticipated means we decide to go into equities as we think the Federal Reserve maybe has more space to be cutting in the second half of the. Nasdaq currently up 1. 5 . Two year yield, 69 Million Dollars with, record amount coming to the market yet yields falling today as money move into some of the havens, 4. 93 . Equities rallying on this particular day. Stoxx 600 in europe having a stellar run on the moment, of a percentage point. Up a percentage point. We have a look overall at money moving in to both risk Asset Classes and bitcoin. Well off the highs but still money coming in despite a relatively strong dollar. Ed earnings sent individual technician, tesla getting a boost. We will get ready to play tesla bingo. Tune in at the end of the show to find out what im talking about. Bloomberg, name a lot of people watching, a big jump in the shares. Adobe, the oneyear anniversary since firefly was released. Big questions about particularly text to video. We have an interview with an executive. Apple is interesting. Now higher in the session. We opened lower. Basically, trading at the same level on apple we were one year ago. It has been a difficult start to the year. Concerns principally about china, thirdparty data, cap report Research Shows iphone sales are down 19 . More interesting perhaps is the other data outside of apple showing thomistic handset makers gaining market share domestic handset makers gaining market share. Apple on with huawei. The data doesnt seem to be worrying anyone right now. Big picture ahead of earnings later on next week, apple in focus. Lets talk to mark. We stressed thirdparty data. It is not apple telling us this but there is a bit of concern china is the key battleground and the iphone is losing ground. This is exactly what wall street and investors have been bracing for, another big decline in china. Apple had its biggest decline in a couple of years last quarter related to overall sales and now it looks like youre going to see another decline in china given this data from counterpoint research. As i typically say, these data points are typically not exactly on the money but theyre usually directionally correct. If they are telling us iphone sales and china are down by 15, i would believe by 1 5, i would believe. In all likelihood, down of the overall picture of china. Whys that interesting . Because even though china had about a 2 billion decline in the prior quarter, tim cook on the Earnings Call said it is not because of the iphone but because of apples other products they sell in china. This time it is likely because the iphone if these numbers are to be believed. Caroline lets talk about other products. We kind of have signaling on this before, thirdparty data giving us a similar picture. What is new is a seven we have a new event and it is run the new ipads. As i have been saying on here and the last several weeks, apple is set to launch its biggest revamp to the ipad in over five years. Going to see new versions of the ipad air introduced on may 7. They will play a video on their website. Theyre trying something new, video start time of 7 00 p. M. Versus the usual 10 00 a. M. And announcing this video well in advance. They have been trying Different Things lately. Their usual cadence is to announce thing seven days in advance, so now we are getting a full two weeks, which is quite interesting. Maybe they want more momentum. Trying to see for the smaller scale lunches if more notice brings in more people. This is something to look out for. Do ipad pro and ipad air, new magic keywords all coming about one month before they announced the new ai initiatives at the Worldwide Developers conference in early june. This will be significant in the hope if you are on wall street or a shareholder of the company is that this will boost ipad cells which have been down quite considerably the last several quarters due to a lack of any updates across 2023. Caroline and therein lies a lot of the issue, a lack of update. Mark, i telling us it first. Meanwhile, lets continue the conversation. Ayako yoshioka of Wealth Enhancement Group in the house. When youre looking at apple and have seen some of the weakness of the worries about product updates, about perhaps behind the curve when it comes to ai, is theres no such a solid name you cannot avoid but to remain allocated to it, would you start to take some risk off . Rage question. When we look at apple, it is a great company. Theres so much cash on their balance sheet. That allows them to buy back a lot of stock. It is a big position within the s p 500 index so it is difficult not to own it and yet we start to see some of these issues with apple in terms of innovation and the being able to bring new products that can continue to grow at the pace they have been growing over the last several years. Caroline i think this is some of the tension we are seeing across the socalled magnificent seven. When we are worried about tesla and apple which in many ways have similar issues. China weakness, competition from china, worries about lack of an update from our product. Is it more yet to look at valuations rather than trying to see a narrative as to when you get the next product . I think it is both valuation and future growth. Both apple and tesla are suffering from the issues that you talked about and that is dampening their overall growth going forward. Valuation for that lower growth is a little bit higher than everybody would like to pay. Ed if the mega caps dont meet, what happens . I think there could be a little bit of another sort of selloff in the market. We saw it last week and a half, ever since the inflation print. I think we do need to see a lot of these larger names, microsoft, amazon, google, meta. They need to come out and show us they continue to grow at the pace they can grow and show that Free Cash Flow growth so people can continue to rely on them for that quality growth. Ed do you get the sense, ok, this is the quarter where we look past the ai hype and start again to look at fundamentals . Did you have Earnings Growth . How is your Free Cash Flow . Traditional boring things like that . I think it will be a combination of both. In terms of you have to produce those numbers come this fundamentals are going to matter, but everybody wants to look at the future and say, well, can you continue to produce those quality numbers that we have seen . So ai continues to be a tailwind. Everybody wants to see production out of it. And for the continuance of that revenue and Earnings Growth. Caroline when you are seeing such a runup in big tech of late come how much are you thinking about the macro, thinking about the data we got today . I think america always contributes to the overall market narrative i think the macro always contributes to the overall market narrative. They are technically the longduration assets that everybody likes to talk about and are most impacted by higher Interest Rates. They are a crucial part of how we look at the overall macro as well as the individual stocks. Ed lets to a case study which is spotify. It is an interesting platform. What does it tell you . Spotify has been on quite a tear the last year. They have really focused on managing costs. As everybody has seen with the results, those gross margin numbers were really eyepopping. Seeing the guidance for gross margin to continue higher at 28 next quarter is definitely something that we can continue to see what spotify, really, generating that revenue and the Earnings Growth and managing the costs while they do that. Ed the stock on track for its biggest jump since october 2019. Ayako yoshioka, thank you. Coming up, we talk spotify, shares jumping most as i said since october 2019. We are going to go very detailed on the report next. This is bloomberg. When you own a Small Business every second counts. 120 seconds to add the finishing touches. 900 seconds to arrange the displays. If youre short on time for marketing constant contacts powerful tools can help. You can automate email and sms messages so customers get the right message at the right time. Save Time Marketing with constant contact. Because all it takes is 30 seconds to make someones day. Get started today at constantcontact. Com. Helping the small stand tall. 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. Ed lets get back to spotify earnings after the audio giant swung to profit in the First Quarter. Subscriber growth. What were behind those things . Over the past year, spotify has really changed its business. On the Earnings Call, the ceo called it the new spotify. They reduced costs significantly, particularly in their podcast business. They reduced costs and virtually did have to reduce their headcount quite a bit but we are seeing that play out in the First Quarter earnings for sure. Caroline phenomenal move in shares, actually, yet still some of the forecasts maybe behind what the market had anticipated. This is a feelgood factor around profitability . I think the investors are thrilled to see theyre still growing their user base and subscribers at profitability. This is all happening while they reduced the number of people working for them as well as increasing prices around the world with more price increases to come. I think investors are feeling theres a lot of opportunity to squeeze more revenue out of their users. Ed in the current period which taylor swift happened. I listened to the entire thing on friday. Did they talk about that . They did not talk about taylor swift, though i wish. Caroline more perhaps what they were talking about, focus on audio from the books perspective. Sure, theyve been pulling back in podcasting but cap there heavy hitters like joe rogan. What about the ability to charge more for audiobooks in full, that seems to be working. Yes. We have reported this last week and daniel mentioned it today that basically, they introduced 15 hours of audiobook listening to subscribers in certain parts of the world. Of those users who have the ability to play audiobooks, 25 have taken advantage of that offering. What they are seeing is adoption. What they can do with that is they could charge more, breakout audiobooks only. I think it is giving them a lot of room to potentially play different subscription tiers, giving the flexibility. Caroline investors love opportunity. Thank you for talking ice through what is a key mover today. Sticking with earnings and those companies in europe, s. A. P. Says its current backlog fastest growth on record. Seeking to migrate customers from legacy on Premise Software to the cloud where it is to offer business ai services to sweeten the deal. We spoke to the cfo a little earlier today. The admin of ai has clearly propelled the story of the transformation to the cloud to move our customers from their on premise installations to cloud cover resulting in an uptick on a Constant Currency basis. All that is driven by the core offering we have in the cloud. That offering has generated in excess of 30 growth for nine quarters in a row now. Ed time for talking tech. Elon musk social network hit with an injunction by an Australian Court to remove footage of a recent terrorist attack. Last night and sydney, the federal court for australia ordered x to hide all recordings of the attack until wednesday. The court will convene for a second hearing at a later date to determine the validity of a removal notice by the countrys esafety commissioner. Esml asml weighing expansion. The company said it signed a letter of intent in the final decision is subject to ironing out a few crucial points. Perplexity ai has raised about 62 3 million in a new funding round that ice the company at more than 1 billion. Perplexity offers an ai chatbot that summarizes search results, list citations for answers, and helps users refine their queries to get the best responses. The financing doubles the valuation from just three months ago. Caroline ai is still so hot. Lets talk about adobe. It is bringing more generative ai tools to photoshop. Joining us now from london, david wadhwani. Welcome. How is this incentivizing clients to pay more for adobe . How is generative ai bringing about a revenue increase for the business . I think we have to put everything were doing with generative ai in the context of what we have been doing the last year. We first introduced generative aia year ago. In that period of time, we have added imaging model, another very important format for Creative Professionals. We have enabled customization of that content for their specific 10 i needs design needs. We have expose that in photoshop and accretive cloud applications, exposed it in adobe express for marketers and Creative Professionals and entrepreneurs. We have exposed it as a broad base of automation workflows. What this has done is it supercharged content creation. You can produce content much more effectively and quickly. If your trend automate workflow, you can do that with your existing environments you have. If you are a marketer, you can react more quickly to anything happening on social. It has empowered businesses to operate at another level of scale. Caroline i want to talk about scale and the difficulty ultimately of feeding data in to foundational models. You have been unveiling the new foundation a model and im interested as to what is going in because what set a part of adobe is you are safer because you are building basically upon your own data, your own images that you own stop your stock. But there are recordings that ultimately, your having to use Synthetic Data which is sometimes used from rival ai image generators. Can you tell us about how clients are responding to what your data is being trained on right now . We are without a doubt the most responsible training model in the market. We have been very there that we have licensed rights for everything we have trained on. We have a process that we internally call art which is about accountability, responsibility and transparency. Everything we generate at any model before it ships goes through this process. We have basically a moderation system in place so we make sure any content that comes in does not have or is not encumbered with any misappropriated ip rights. Customers have been very clear with us that there is a lot of interesting work going on around the industry around ai models, but when it comes to true production systems, we are really at the top in terms of the ability to use this to create and ship content that is generated with these models. Ed david, theres only one signal question being directed at adobe right now which is, when and in what form will you have a text to video generation platform akin to sora . I dont know if you had a chance to see the announcements we made last week at the National American broadcasters video series, we announced and we talked about how we are gave a sneak of our text to Video Capabilities as part of that. We also announced we are working with sora, working with runway. And together, all of these capabilities are going to be embedded in all of our creative applications. What is exciting about all this text to video capability is that we have the ability now to look at this and say, all of this generative capabilities is analogous to more cameras in the world. The more content created, the war content comes in our systems for editing. We have just been clear our technology for video, architecture and the research got into it, is similar to what you see on sora and others and we expect to have our model in market later this year. Ed the strategy in premier when i was in journalism school, we trained on premier. Full circle. Youre going use thirdparty models. So far, photoshop has not had the extension of that strategy. Explain why and what you will do going forward. Were going to embrace all models. Photoshop, later this year you will see support for any model that can be integrated into photoshop will be integrated into photoshop. But we also recognize each model has its own personality. At any given moment, what you generate in one model versus another, there may be varied preferences. The one thing we know is that firefly is going to be synonymous with the best quality of content, with the best detail of content, and with the most controlability. That means whatever we create with firefly can get more deeply embedded in our tools. We just had an enormous set of announcements in terms of dozens of new capabilities. Ai generation embedded in our work and that is because of the way we have firefly. We expect to integrate. Ed david wadhwani, great to have you on, working one year since firefly. Coming up, all eyes are on tiktok, divest or ban bill. The former chief of staff to senator Amy Klobuchar will be joining us. Getting closer to the one your timeline where tiktok one your timeline where tiktok will face divest or ban. Looking at shares of general motors. One of the movers of the upside today, earnings actually largely relating to the legacy business. Truck sales doing well. Initiatives in china not doing so well. Keep tracking gm. Biden this is bloomberg. How am i going to find a doctor when im hallucinating . What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. You dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh her uncles unhappy. Im sensing an underlying issue. Its tmobile. It started when we tried to get him under a new plan. But they they unexpectedly unraveled their price lock guarantee. 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