simple. easy. awesome. click or visit a retail store today. ♪ emily: this is bloomberg technology. tumbleup, tech stocks with mounting concerns about trade and global growth. we will talk about the continued fallout for silicon valley. plus, trade truce extension? president trump income, that if the 90 days don't cut it to finalize a deal with china, they could be more time available. and we look at china's goodwill efforts with its attempt to stop theft..t. step -- i.t.

tech stocks fell the most in two weeks tuesday, concerns mounting that the us and china will not make any meaningful breakthrough when it comes to trade negotiations and ip protection. investors are rattled by worries over global growth at a time when central banks around the world pulled back their support. what can rising meets -- rising first of all, if this trade truce does not happen, what does that mean for >> we willon mark continue to see what we have seen the past few months or so. many say that the selloff was the trade tensions between the u.s. and china. we have seen apple really take a semiconductors,

tech stocks that have exposure to china or products that are made in china. over the weekend, many investors say that it was an increment a positive. at the same time, it is just a lady 90 days. we have to see what happens over the next 90 days. but if nothing changes, we might continue to see the weakness we have seen recently. emily: apple shares taking another hit on the news that of the supplier has cut its sales forecast. -- sales logicts makes audio parts for iphone. it is a great question and a great point. i think there is a lot of stuff going on through all the volatility that really started with the great highs in the late summer. obviously some of the severe damage.

are we in a late cycle situation where people are structurally rotating out of tech frantically and stay rotated out of it? the answers here are somewhat nuanced. i view personally is that think the quality and the quantity of the earnings growth donemany faang stocks have will continue to 2019 and 20 and there will be support for that. if global growth is slowing down, however, like cisco, for example, a very large liquid name, it has been a great performer over the last three years. that obviously has been a classic gdp, a global gdp proxy. that will honestly be exposed. microsoft will be more exposed.

the trade war is a wrinkle initial discussion. its impact on the apple might be more about supply chain impact google, maybe more about opportunity being pushed back at emily: i have a chart in my bloomberg which basically shows the tech heavy nasdaq is lagging the s&p. i'm curious what does this say about how believable the recent rally in tech actually was. >> with this chart is showing you is the percentage of companies above the s&p 500 and the nasdaq 100 that have now come above their 50-day moving averages. as you can see, it isn't what is much for the nasdaq 100. you have more companies in the s&p 500, a larger share that are really taking a larger leg higher as compared to the nasdaq. like apple,ge names amazon, your large-cap names that might be adding more. but as you look across the board, at some of the large tech

names, they are not increasing or having the gains as some of the other areas in the market. a lot of people have been looking at areas like health care or stables or utilities. if you look at tech, yes, we have seen a late high the looks -- the last couple of days, but not quite as across the board as we have seen in some other areas of the market. emily: what about interest rates? if interest rates continue to rise, what does that mean for tech and silicon valley? >> it is a great question. throw a chart of the mdx over spx. there's an obvious code movement of those two lines of a past few years. interest rates were reflecting a weaker economy. people wanted to be overweight these tech names because they are economically insensitive growth. i would argue, when you think about it, a lot of these companies have minimal exposure to rising interest rates.

there is an argument about the cost of equity going higher with a higher cost of risky rates. it's a little bit more theoretical. that from a visceral point of view, from a how is this going to impact earnings, these companies are often negatively levered. here's cash balances there. their earnings are benefited by higher rates and all that. don't care about the you three rate in the phillips curve. their business models work through externally high wage pressure since they were founded. respect, at a higher rate, later cycle environment, the earnings quality may will hold up in many of these names. areany of these big names

less economically sensitive because it is more about disrupting business models taking market share from old economy businesses. emily: what a buffer private companies? you've seen tech startups, late stage, growth startups raising hundreds and hundreds of millions of dollars. in venture capital funds raising billion dollar plus funds bigger than ever. yeah, in terms of when these companies actually go -- some of these prominent private companies go prominent, waiting for that to happen, i think there are some of them have to will not going public until they are well and ready. nobody wants to be that busted ipo. aree choppy markets, which likely to last rate to the winter, that doesn't help the ipo environment. that ifg will come out, you are an investment banker coaching our client on window

public, you probably want things to firm up a little bit. get a sense for whether this rotation issue is a really stabilizing -- is really stabilizing or not. the one point for went to go public, it's not in the immediate future. emily. : one prediction that the choppiness will continue. thank you both. look at howe regulators are tackling big tech, both here and in europe. at our exclusive conversation

-- largemajor plan to tech companies was kept on life support, scaling back the broad imprisoned -- initially envisioned by paris. under the new plan, companies of the likes of facebook and google would have to pay 3% of their advertising revenue come 2021. they won't have to pay on data sales. earlier, i spoke to the french finance minister who told me american companies are welcoming europe, but they must pay their fair share. importance.an

much moreompanies are welcome in france than anywhere in europe. many companies announced they would invest more in france. so i think this is a clear tonal that we are willing bolster those companies and let them invest in europe. but they have to pay their do taxes as all the other companies do. >> sources close to the negotiations say it will most likely happen at the start of 2019. emily: when it comes to regulating online content, my next guest has some ideas. he recently wrote an op-ed for "the hill" entitled "what lawmakers need to do to police it." he joins us now from new york.

professor, let's start with what the eu is looking into, getting more and more pressure to look into these ad-based business models of google and facebook. in particular, how much do you think these ad-based business models are really at a threat? >> they certainly need to be examined. this is a very opaque marketplace. when you compare these added changes to financial exchanges, which are incredibly transparent, really very little idea as to what goes on behind the scenes in these ad exchanges, especially when a major player owns both sides of the relationship. they've got tools for the publisher, tools for the advertisers, the exchange, the major part of the volume. there is a lot of opacity in this process.

what the european regulators are try to get to is get to the bottom of it and see whether it is anti-competitive. initial finehe against google frugal was all about. the truth is there is a lot of companies.these they can change the algorithm very suddenly. and suddenly, it alters the ranking quite dramatically. it is not surprising at all that the regulators want more transparency into what really goes on in the ad market, in the online ad market. emily: the business models potentially hurting competition is one thing. do you believe they are also a risk to society? >> that is a great question. makes.difference a year a year ago, i was writing about the need to regulate social media platforms because of the

risks that they posed. this was before all of the bad stuff really emerged. and i was making this argument just based on the fact that the signs show that you can manipulate people at scale. you can do it cheaply. things had begun to smell even then, that there was something not quite right with this ecosystem. and then that was followed by months of denial, that this is ridiculous, nothing like that could have happened, followed by a, jeez, this really did happen to sorry, and now some kind of a belligerence. wouldre's one thing i advise the social media companies is a little contrition might go long way and be better than belligerence. clearly, they do pose a certain kind of risk. we don't understand them completely at. this is a completely new era we are in, where these platforms

hugehuge audiences and powers that can be is to persuade people. the algorithms are neutral in the sense that they just target the -- very accurately regardless of who is doing the targeting of for what. that is the kind of thing that we need to understand a little more carefully. and some of the proposals i have been making are just oriented at we cannot understand something that is not measured. so let's get some ways of measuring what the hell is going on in this whole ecosystem. emily: the range of online content is vast. obviously, there is facebook and google on one end. you and your op-ed mentioned thatom, a social network calls itself a free speech protector. pittsburghre the

synagogue shooter reportedly used this website a lot. what should lawmakers do in this situation? how should they actually measure, asked you say, and police this? >> the first order of business is just to understand what is going on out there. what do people think about it? you've got no real ways of measuring any of this stuff at the current time. proposed athings i year ago was that we should have ky see kinds of regulations -- and thes of regulations social media space and we are moving towards that. i think anonymity may also be a thing that will disappear. that causes all kinds of problems. emily: you think twitter should require real names? if, aouldn't be surprised year or two down the road, we are talking about people being required to authenticate themselves. are you really who you say you are? difficult to it is

know who's saying what, why they are saying any of the stuff. it is a very difficult -- a very delicate issue. you want people to be able to say whatever they want. on the other hand, you have to be mindful of the risks that such an ecosystem poses to democratic processes, to an open society, and open societies are particularly vulnerable, much more than heavily related countries. we really need to. so yeah, there are great risks to this. i've got more questions than answers. i'm just taking a stab in the direction of some of these or having ae lkyc gauge where you can measure were people are saying and what other people think about that. emily: we will have to leave it there. we can surly debate this for hours. definitely worth checking out that op-ed in "the hill. -- "the hill."

from the courts to investing. we will speak to the golden state warrior's star turned tech star, steph curry. we are live on twitter and follow our global breaking news on tictoc. this is bloomberg. ♪

emily: fedex and ups phrase underappreciated competitive risks from amazon air. estimates for volume growth, revenues.owth, and steph curry disrupted basketball by making seemingly impossible three-point shots look routine. now he is looking for disruptors in business.

the highest-paid players bulking up his investment portfolio of tech companies. his latest bet is a toronto travel startup, which he says is destined for success. he caught up with natalie wong in toronto. >> obviously, being in the silicon valley for the last 10 years, it's obviously about relationships and expanding ourselves. been onmy team kind of the surface in turn -- on the search of companies being disruptive and having obvious excess. finding ways to meet the consumer where they are, being disruptive in that industry, said a lot about the company, but the leadership, and italy decided to be a part of the team. >> you came at a relatively early stage for a funding round.

one type of value do you think you bring as an investor to the table? >> hopefully a lot in terms of using my platform to use to bring awareness to the company. brandof things around my and things around the media space hopefully can help boost and amplify. i like to be hands-on with things. just trying to bring added value anyway that i can, and being available. that is something that we try to bring to the table as well. >> use made a variety of investments in different companies, from pinterest to slice and at a snaptravel. what is your investment philosophy? >> it is continuing to grow. looking at founders, track make soundy to judgments and build that credibility really early in our invest in share. in terms of finding companies

that have strong market traction, during our due diligence -- really shining to be the hardest workers in the room. that is something that is very important in terms of trying to be successful early and continuing to sustain it. process.viously have a that is what has made you one of the best as well players so far. what is your process when income -- when it comes to investing? how do you make that decision? >> in basketball, you surround yourself with the right people, smarter than me in terms of forming the right direction. doing our homework, doing our research, getting educated on what we are investing in and being smart with our money. important.t is very >> do you see yourself as more of a risk taker or you have a more conservative approach when it comes to making big bets on the market? >> probably somewhere in the middle. to take chances and

make sound judgments. and make sure that you are doing your homework and aligning with the right people. and howr in leadership important that is in the process to build something strong and sustainable is successful companies is first and foremost. >> many former basketball legends>> have become savvy business investors. who are some are -- who are some former players are you to enter? >> that is the fun part about playing. the network out there is amazing. when you go to our games, you look around courtside, major vc's, major corporation ceos and things like that. the network is showing in my 10 years there. a long less -- a long list of people where you just learn.

in terms of veterans in the game that have been really successful , [indiscernible] obviously, how successful magic is. there are plenty of guys who have done it well. i am trying to do it my way. . but obviously, taking some of that advice as well. emily: that was golden warriors star steph curry. to punishaking steps people who steal intellectual property. will it be enough to satisfy the white house? here is something you don't often see associated with an iphone -- a discount. will apple's latest marketing move be enough to win over holiday shoppers? this is bloomberg. ♪ ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪

emily: this is bloomberg technology. i am emily chang and san francisco. presidents trump and xi came to a 90-day truce. now trump hinted that he could extend that period after the president treated he secured an agreement from china to reduce or eliminate tariffs on u.s. i can make cars. eliminate tariffs on u.s.-made cars. theye president expects will take their car tariffs down to zero. they were 15%. they were knocked up to 40% as a

retaliatory move. i think you will see pretty soon they will be knocked down to zero percent. that is my guest. emily: all of this happening at the white house meeting with german automakers, many observers saying who benefit more than u.s. automakers by some of these potential changes if they happen. what is the status of these car terrace or lack thereof? >> yes -- car tariffs or lack thereof? >> yes, meeting with trump administration officials. their message is not that they are here to advocate for trade. the eu is in charge of that. they came to tell trump about their plans, that they may be able to expand themselves in the u.s. i'm sure auto tariffs did come up and that would be a disservice to their companies that want to import into the

u.s. the larger message is that there is more potential for u.s. investment, so let's not scuttle that relationship. emily: the chinese have not said anything about this at all. they have not commented on the president initial tweet or on the backtracking. what do you make of that? >> i am having a real tough time figuring out what is actually going on. my best guess is that they didn't really agree to anything on saturday night, accept an agreement to keep talking. and then trump felt either desperate or impulsive for a deal. the u.s. side put out a list of things that they wanted to get out of it or they thought they got out of it. you have this bizarre trump tweet on sunday about the tariffs that kudlow then had to walk back. and outsidemarkets observers and possibly the chinese themselves are scrambling to try to understand what exactly is trump's play

here. is this something he planned or just impulsive error? emily: one of the president's most memorable tweets of the day -- emily: aren't americans paying these tariffs? >> the trump administration would argue it has added billions of dollars to coffers, but it comes to a cost for u.s. businesses. i think that is the key marker now as we look ahead to these 90 days. what impact are the tariffs having on the u.s. economy? trump has two months to assess

the data. emily: on this intellectual property theft issue, i have been dying to get your thoughts on this. the chinese government has laid out 38 a different punishments to be applied to various ip violations. how significant is this? what counts as a violation? will the government actually enforce it? >> right now, all we can say is it is a positive step. it is really hard to know whether or not the government will extend the political capital that it needs to enforce it. for someis that, really egregious cases, brands being ripped off, they will make a big show about taking those down. but for companies like huawei, a national communications company, i would be shocked to see them say you are accused of stealing

will punishwe you recording to new regulations. emily: but the potential for ip violations is broad. chinese citizens coming to work at u.s. companies and going back to china. walk us through all of the potential issues around ip theft and what this addresses. addressesis actually is it gives beijing the opportunity to say you guys have a big problem with ip. we are doing something on it. here is a concrete list of what we are doing. but there is such a huge disconnect often in china between the letter of the law and implementation. there's also a big issue -- there's an old chinese expression -- the mountains are high and the emperor is far away. with beijing's ability to control the limitation of something like this in further away regions from beijing.

we do have 38 specific steps they say they will take, but i would be shocked if we have this conversation in three months and find that they have actually taken a lot of the steps. emily: that said, will it be enough to appease the administration? is obviouslysue the high water mark for any deal that trump will reach. achieving that in 90 days sounds a list of possible. prt last month, the u.s. released a report saying that china had not responded to any of the trump administration demands to address these ip issues. it was the basis for that tariffs to begin with in july. i think the trump administration, if they ignore this issue, which will be one of the most difficult to tackle, will be going too easy on china set.rms of the bar that it larry kudlow told us yesterday the white house economic adviser, that they were pretty

close to a deal on ip with china. but it is hard to take the trump administration on its word on this because it has backtracked and flip-flopped on what it was -- what was agreed at the dinner. it is hard to believe that china and the u.s. might be on the exact same page on this. emily: last of breakdown. lots to break down. thank you both. apple suppliers' woes continue. the latest tos tumble after cutting forecast over worries of iphone demand. it makes audio parts for the loss. recovering some what apple is try to do to sell , mark, yous discovered some pretty aggressive moves that apple is taking, ranging from discounts in a way to reshuffling its marketing staff.

how much is the iphone this year discounted? >> to be clear, they are not actually cutting prices per se. they are advertising a lower price, which makes it so interesting. they are advertising the iphone xr $300 less than it actually costs. this is the tactic you would see from samsung or huawei or some of the carriers like at&t. this is a new type of effort apple. this is not something we have seen from them, basically disguising the price are saying that the crisis of the net it is not. in reality, this is a trade in deal that they are boosting. this is a new, aggressive tactic. it was unbelievable to me, following apple for so long, going to their homepage sunday night and seeing a banner for this 300 discount that is not really a discount at the top of the page. you don't see discounts associated with the iphone, however those discounts are being delivered.

talk about the marking shuffle. they put additional staff, china to make sure they are getting more iphones at the door? >> about a month ago, they shuffled some of their marketing resources, some of their staff on the marketing team at apple in what one person called a fire drill, reallocating those resources to find new ways to market the iphone and boosting iphone sales in light of all these concerns in recent weeks and months about the iphone' prospects for the holiday seasons. emily: talk about these continued supplier cuts. are the alarm bells getting louder? >> we heard this all before with the iphone x. it turned out the iphone x did quite well. it was their best seller on a weekly basis. apple continued to say that iphone unit sales were not that bad across 2017 and 2018. the problem is that these fears are compounded by the fact that apple will no longer reveal

sales.phone unit at this point, the truth obviously is important, but apple will not correct the record. quite frankly, that takes to some people to mean that the days of iphone sales unit growth is over. perhaps it will return to that when unit sales continue to grow again. we will find out what it means based on the revenue numbers as well. emily: i have this chart showing apple's continued dependence on the iphone. it has gone down slightly more recently. we haven't talking about how out -- iphone is try to make the transition to a services company. but the iphone is selling credibly important. we talked yesterday about how the company is making a bet that 5g will be a big deal next year. they are waiting till potentially 2020. and at&t is working on a phone with samsung that will have 5g conductivity ready for next year vityonductivity -- connecti

ready for next year. on 3gy missed the boat and 4g. because nobodyr cared about any other high-tech phone other than the iphone. these days, the competition is so much higher. samsung will have a year and a half head start on 5g. it's a technology that will be more heavily targeted -- marketed. apple tried to pivot investors to look at services. they are pushing this a little bit ridiculous because the services have to run on something. services growth has been tied to the growth of iphone hardware. at some point, they will have to have a new piece of hardware to run the services on so that growth can continue on both the services and the hardware. amalie: it's all about the continued growth of the apple ecosystem. do think we will be getting -- : it's all about the continued growth of the apple

ecosystem. do you think we will be getting more growth? isit has to do with what related to an apple supplier. the smart phone market overall point.ing a saturation cirrus logic, in their most recent filing, 82% of the revenues come from apple. that is a big chunk of their revenues. that is the most i have seen for many supplier to be even dedicated to a single company. it is not great for their business and their shareholders, but that is indicative proof that this is an apple-related problem. emily: 80% of revenue from apple, that's reliance if we ever sought. thank you as always first -- if we ever saw it. thank you as always for stopping you buy. -- stopping by.

popular question and answer discovereda said it users have the data compromised. this is due to the unauthorized axes by a malicious third-party. users may have had information compromised. quora made the discovery friday and has notified officials. wells fargo's expected to spend $9 billion on technology this year, about $800 million going specifically toward cybersecurity. said the bank is on track to achieve its expense targets and that net interest income will be up this year. coming up, robo advising software company will front wants to automate all of your finances. have it is using aim machine

learning for finance -- is using ai and machine learning for finance management. a sign of hope for the electric carmaker. this is bloomberg. ♪

is lookingth front to level the financial playing field. it has used a common nation of ai and machine learning to cut out the middleman and provide answers to over 10,000 financial questions instantly. in the last year, the company says it has delivered real-time advice to up to 50 times as many clients as a human could handle and an entire year. today, it is opening up

automated planning services to anyone for free. what is changing here? >> for the last couple of years, we offered automated financial planning to our investment service clients. we have had such a great experience with that. mainly, we found our clients who use our automated planning saved 5% more of their income than people who didn't. over one's lifetime, that is million.1.25 we looked at that number, given the crisis of savings these days. that should behind a pay wall. we wanted everybody to be able to get access to that kind of financial planning. emily: how do you make money? >> we make money on our investment management service, on our lending service, and in the future, we will have other financial services. but if you really like our planning, you are always welcome

to open a wealthfront account. card: companies like van -- vanguard to charles schwab, they do what you do. how do you keep up with that? >> actually, they follow us. we don't keep up with them. -- a veryvery layer thin layer of software that is asset allocation. it is very easy to do. it took us for engineers three months to build up back in 2011. but what we have built since then is far more danced. we have advanced business services that we have made very simple, inexpensive and automated. we do automated financial planning, which numbers people do. emily: do you think machines can do a better job in every respect? or are there are things that humans will always have to do when it comes to asset allocation? >> that is an interesting point in that there have been numerous studies that have shown that data leads to better decisions

than expert opinions. use data tocase, we make the decision as opposed to the expert opinions. that is certainly true in financial planning. emily: do you see a lot of jobs going away with the rise of this kind of technology? fewererestingly, a lot people are going into financial advice and financial planning because they think fine -- think young people think that's not what they want. our clients tell us we pay you not to talk to us. it is a generational change. as a result, fewer people are going into the industry. i don't think it is so much jobs will be lost. but i don't think that it will be -- that it will grow. there are still travel agents. they just serve older people and more complex situations. emily: you are one of the. cofounders of benchmark capital back in the 1990's. you have seen many friends start many companies and many trends

and wealth management. decisions that you believe your technology is making that other companies are not offering? >> because we are dedicated to delivering everything through software, we position ourselves to deliver on our ultimate vision, which we like to call self driving money. nexti mean by that, in the year or so, you will be able to direct deposit your paycheck with us. we will pay your bills, not give you a bill pay system. we will literally pay her bills and then drop of the remaining best account, whether inside of wealthfront or outside, based on your personal goals. that is not possible to be done with people. is only possible if you do everything through software. we have tested this idea with people and they say when can we have that? it just takes develop meant to do that.

emily: self driving money, that sounds good. we will be watching. thank you so much. ahead, delivery of production problems for tesla in 2018, but one analyst is as bush ever.r -- as bullish as this is bloomberg. ♪

emily: a year of controversy for tesla, but the most bullish analyst is as bullish as ever, reaffirming his $530 price target for tesla, will above the average. this even as he describes the factory is a crowded mess. pierre, why the price target despite what you saw? the tesla method, the elon

method, you aim very high and you fail on your own [indiscernible] . the reason why the factory was a mess is because it is very packed. it is very ambitious in terms of automation, the density of automation. i have never seen a place with that many robots packed in that environment. the company had to build a third assembly-line. the company was delayed. a lot of tasks that were planned to be automated and obey manual. but the -- ended up being manual. but the factory is very efficient.

emily: exceptionally efficient. elon musk has talked about how hard it is to be a car company in general. you say exceptionally efficient. you got owners who love their cars. there is a fervent following. clearly, there is a demand. do you think it some point it becomes easier for elon musk and for tesla to be that car company? >> yes. yes. this is exactly the moment at which we are today. 2019 is the year it becomes easier. how? manufacturing,t there is still a lot of downtime. they have to accelerate. to next step for tesla is accelerate the wrap of the assembly line in china. that will be much easier. . they have learned a lot from what they have done and will build much more efficient factories there.

last but not least, tesla have q3,uced 56,000 model 3 in with a gross margin of 22%. these cars were only sold in the u.s. they were so that the highest price tag, $66,000. and in 2019, tesla. will increase volumes. it will expand beyond the u.s. market. it will introduce leasing options to make the car more affordable. all of that will expand the company significantly. and of course, what i expect to expand with that is margins. that is one thing the investment community is missing at this point. emily: a bright future according to you for tesla and elon musk. we will have to leave it there. thank you so much for stopping

by. that does it for this edition of bloomberg technology. we live stream on twitter. follow tictoc on twitter. this is bloomberg. ♪

>> the following is a paid program. the opinions and views expressed do not express those of bloomberg lp, its affiliates, or its employees. announcer: the following paid presentation is brought to you by dr. ho. ais pain making it hard to work, sleep? >> i was amazed. >> the pain disappeared. >> imagine everything you could do without the pain. arere you taking pills wasting time and money on endless appointments?