from the heart of where power, money, and innovation collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: coming up in the next hour, the volatility continues for big tech. are there more selloff to come? jamie dimon doubles down and says if you don't get

vaccinated, you don't get paid, to says companies continue to push back the big already a. we will bring you a virus update. could the bitcoin death cross be upon us? we will talk about that with the president of a blockchain start up. all that in a moment. let's get a look at the markets with ed ludlow. ed: finally some green on the screen, the main gauge, of u.s. equities recovery in tech stocks . bigger outperformance on tuesday, up 1.5%, the rebound coming through in semiconductor stocks, philadelphia up 1.8%. bitcoin up 42,000, a recovery in terms of what we have seen in recent days. we have to talk about the driver of the markets. powell saying in testimony, he

reassured investors that the fed is going to act to stamp out inflation as the economy is rebounding, and he signaled in terms of a comet of policy, the fed will shrink the balance sheet in 2022. you see risk assets, bitcoin, nasdaq, all making gains following those comments. big upward tick. i want to focus on mega caps like apple and amazon, big movers on wednesday. meta up 2% on the day. breaking news about a new board director which we will cover later in the show. if there is mom -- one move to the downside, ibm, having its price cut from ubs. they cut the recommendation, saying ibm is overvalued, the stock will be in trouble.

finally, a brand-new index. the bloomberg grayscale future of finance index. this is a basket of 22 companies that are related to the future of finance, blockchain, crypto. it's had a torrid time, but it is safe to come back tuesday along with cryptocurrencies. don't say i did not give you anything. a brand-new index. emily: you are so generous, thank you. i want to stick with the volatility and welcome and equity strategist. how much is happening with tech? with rates? reporter: tech is one of the higher duration sectors in the

s&p 500. the time it takes for cash flow to pay off initial investment, and the longer that time period the longer -- we have seen this play out since december 3. tech has been one of the worst performers since that point in time, versus financials, one of the lower duration sectors, one of the better performers on the s&p 500. emily: with tech earnings coming up, what impact do you think that will have? michael: i think tech earnings can do a bit. right now, some tech stocks, especially magma are starting to lag through the urine. -- year end. some positive help could come through those fears in the coming weeks. emily: let's talk about what you

see ahead. if valuations are stretched, what does that mean? michael: valuations are stretched, not necessarily a catalyst to sell or buy. you have to have growth. the real issue i think behind tech and tech stocks, a lot of the issue is growth is expected to lag for a considerable amount of time. the tech premium sets at 1.5 standard deviation above the five-year average, even excluding microsoft and apple, it's 1.4 standard deviation above average. the real catalyst is the lag between companies in the s&p 500.

eventually, these stocks could get to more reasonable valuations. emily: i want to hone in on apple and microsoft. do they appear overvalued, or are they a bargain? michael: right now, based on some metrics, watch go on the terminal suggests the companies are somewhat overvalued, at least on a forward pe basis. again, that's going to depend on consensus or more optimistic projections. emily: what parts of the tech sector to look discounted -- do look discounted? michael: some other industries like semis, software trading around average, little bit above

but nothing too crazy. on the other end, equipment, electronic equipment are definitely expensive. emily: not to follow -- a lot of follow especially with earnings season underway. thank you for sharing your insight. meta has a new board member, the doordash ceo is joining. the appointment is effective immediately, this brings the board to 10 members including zuckerberg and sheryl sandberg. meta has made a big push to become a bigger force in e-commerce and bigger resource for merchants. coming up, as omicron spreads, companies continue to crackdown on mandates. we will discuss the overall picture, next. this is bloomberg. ♪

emily: jamie dimon has issued a warning to unvaccinated workers in new york. if they don't get vaccinated, they won't be allowed in the office. if they are not at the office, they are not going to get paid. let's get some of the latest news. good to have you back with us. we are waiting for the supreme were to weigh in on the mandate. how are companies dealing with this in the meantime? reporter: companies are having to figure it out on their own,

recognizing more guidance might be coming, maybe not. as omicron is surging, taking that step to get stricter on vaccine rules, without declaring a mandate that my put out some workers. jamie dimon said his firm is taking things case-by-case, location by location, at the same time, he is a big fan of offices, particularly in new york, telling new york bankers they must get vaccinated to come into the office, and if you don't come into the office, you might not get paid. a mandate without saying as much. here in the bay area, you have meta saying you have to have a booster and delaying the office return until late march. it continues --

emily: we are seeing somewhat of a divergence between wall street and silicon valley. we are seeing glimmers of optimism with omicron, new york city potentially hitting its peak, at the same time we are hitting new records for infections in california. what are the numbers telling us? reporter: in new york you have governor kathy hochul saying it appears there has been a plateau, one of the earliest states in the u.s. to get hit hard by omicron. it is a hopeful sign that new york is starting to potentially be on the upswing. at the same time, california, 100 47,000 cases reported today which is the highest number of the entire pandemic. perhaps this will start to slow down eventually. emily: what are we watching for

next? when did we get a signal from the supreme court? kara: any day, any hour. the rules from the biden administration technique they were supposed to go into effect yesterday from osha. osha has not enforced them. this could come down, legal experts expected the court to weigh pretty quickly given the timeliness. we are watching out for that. emily: thank you for that update. i want to stick with the return or not to the office theme. envoy is helping to transform modern workspaces into safe spaces to connect and collaborate. the company just announced new funding, $111 million. i want to bring in the ceo. talk to us about your technology, i know it is not just -- but this is certainly the new trend. how does this work. larry: here is going on.

it's complicated, the rules keep on trajan, -- keep on changing, you need to keep track of testing, boosters, it's very complicated for people and companies. what is important as you make it easy for everyone. there are enough stresses going on in day-to-day, we are trying to make that easy and make this into the future. make the workplace somewhere people want to be in. emily: how would you describe the demand? especially right now, we're in this messy middleware vaccines, boosters are available, but infections are peaking, return to work gets pushed back? larry: it's really complicated. you don't know who is going to be in, who is not. this is the whole thing. people do want to go back, there is a sense of community.

we are a clear example where you are coming in, say you are coming in with a group of people, and they will put you altogether. it's the thoughtfulness that is more important, because people are not at their desk five days a week anymore. for those companies that even hired more people -- you need to be a lot more thoughtful about the logistical pieces going on in offices. emily: you just raised new monday. where does this funding go towards? -- money. where does this funding go towards? larry: we are only getting started with things we are building. people know us, but that is just the beginning. having an opera people concedes other and turnabout each other. -- learn about each other.

it's about safety, and making community happen despite the pandemic, all of the things going on. companies need community and see the value in each other. that is what we are trying our best to help. emily: are you sitting at hot desk right now? larry: this is a desk like any other. i did book it, hopefully somebody else won't have it in the next couple hours. this just like a meeting room. you can get so many more analytics and a company -- in a company. the data will let companies and people know more about each other. emily: what is the growth outlook? hybrid work is here to stay, but as the world starts to reopen, doesn't that mean your growth plateaus or drops? larry: here is the thing, if we

have learned anything, there is delta, omicron, i don't even know. but important is we keep on innovating, learning things. people are always going to need to get to know each other better and that is at the end of the day what we are trying to be good at. investing in envoy by buying and using envoy, your investing in the future of the workplace to be more community oriented and something that is going to be easy. emily: that leads me to my next question. people have been saying san francisco is dead, quieter than they have ever seen, who is going back to work? larry: great question. san francisco is one piece of it. there are workers all around the world, people they don't have a choice, factories, farm equipment. they need to be safe, too.

companies are saying we want to bring people back, they know community is important. that is what we are seeing, what the investors are seeing, data from our own companies, and we want to foster bringing people together. emily: we shall see. larry gadea, thanks for joining us. coming up, and the last year, california's population has declined. the state using a congressional seat and a number of high-profile companies from tesla to hp have relocated. how gavin newsom plans to tackle these ongoing issues. we will bring you the state's plan, next. this is bloomberg. ♪

emily: doug the california blueprint, gavin newsom has proposed a 286 billion dollars budget plan. california is home to the world's fifth largest economy. the state continues to lurch from crisis to crisis. wildfires, crime, traffic jams at ports. despite toughest virus mitigation problems. walk us through the new plan and how that will address these crises. reporter: luckily for the state, it has a lot of money that it can use to tackle these problems. in the governor's budget he presented yesterday, he outlined the five threats to california and what he plans to do about it. he wants to spend billions of dollars on wildfire mitigation,

he also wants to promote climate change technology and promote things like electric vehicles. we're seeing he is really trying to continue to say california is the center of innovation with focus on climate change. emily: what has been the impact from tech company departures like tesla, hp, beyond? romy: so far, they are not enough to move the needle for california. it is the world's fifth largest economy. it accounts for $3 trillion. the state corporation revenue increases on average 7% every year. we are not quite seeing the impact on the bottom line.

the state is doing things to try and promote technology in the state. the government proposed a tax credit for companies headquartered in california that are developing new technologies to mitigate climate change. that shows the focus for the governor. emily: what are the main drivers for people leaving the state? are they looking for cheaper quality of life now that they can work from home potentially? romy: the exodus from the state has been a little bit misconstrued because here in the area, we have seen people leave, but they actually went to other parts of the state. the reason california's population dipped in 2020 was more due to the fact that we did not see enough foreign

immigration, and that is due to federal policy, and but really dipped the population down was the deaths from covid. moving forward, it will be interesting to see if any changes -- in immigration policy can change the trend. emily: tragic to hear about that way. can the state continue to attract people and business? romy: the state is trying to promote tax incentives for businesses, and with this budget, the governor is trying to address these quality-of-life issues we see every day. for instance, spending the most money ever on clearing encampments. he has dedicated to billion dollars to promote housing -- $2

billion to promote housing and easing homelessness. when it comes to state education, spending is going to be the most in its history. emily: thank you for that update. february 4. that is when the next union vote is set to begin at alabama -- amazon's alabama warehouse. the votes will be counted until two months later. a federal labor board accused amazon of violating a labor law. one of the biggest issues facing both sides is the majority of those voting might not be there by the time the ballots are counted. kim kardashian was sued for allegedly scamming investors in a cryptocurrency called ethereum max. the reality television star was

paid to height digital tokens, which the complaint says, caused investors to purchase these losing investments at inflated prices. the scam was already called out by bloomberg several months ago. >> she basically shilled something like ethereum max. i would call it a borderline scam, a project that is basically at best a pure money grab. emily: coming up, we will talk more about crypto scams. where does bitcoin go from here? that is next. this is bloomberg. ♪

and there you have it. woah. wireless on the most reliable network nationwide. wow. big deal. we get unlimited for just 30 bucks. sweet, but mine has 5g included. relax people. my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one-upping itself. take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

♪ emily: welcome back. i want to get back to crypto with ed ludlow. for those watching the charts met ed, how worried should we be? ed: no matter how you slice it, it has been a rough seven days for bitcoin holders. its performance over the week, the value crypto index is majority bitcoin and ethereum and other constituents. he talked to say how bitcoin popped above $42,000. come at me into my bloomberg

terminal. when an asset class' 50 day moving averages moving down, that is the white line for ethereum, lou -- yellow line bitcoin, dipping below it that is a bearish indicator. it is indicative that the asset class will continue to see further declines. what has been fascinated over the past 24 hours as we talked so much about -- the different corners of the crypto community have put this into question. yes, bitcoin had this cross before. the 50 day moving average has dropped below the 200 day moving average, but it has not always resulted in further losses. in several situations, investors had seen it as a buying opportunity. we had seen a rebound in the currency. as a reader crossed the analyst notes emma look on twitter, look

with the hud those are saying, what is bitcoin? we are expecting to get to behave like a traditional asset class. in many ways it does behave like an equity. with the outlook for higher rates. other street it as commodity. -- others treat it as a commodity. so, what is it? luckily, we've got someone smart coming up. emily: we do. looking ahead to crypto in 2022. where we go after this rocky start. joining me is john wu, a smart contracts platform that makes it easier to launch d5. do you see more downward momentum, or doom ahead? >> first of all, i would like to ask ed what is the opposite when the 200 day crosses the 50? that happens a lot in this stage. listen, i think this asset class , the surprising thing about this asset class is that it will

be one of the few asset classes that can withstand macro headwinds. where there is a hawkish fed, or anything else that happens geopolitically. the reason is simple. where i sit, i have a backstage pass, so to speak, and the amount of inflow of talent, capital and basic users is astonishing. that has not stopped. that has continued, even with short-term selloff. emily: you've got a lot of investors with more capital than they have ever had before. yes, there have been corrections, but mainstream investors have not had this much invested. give us the mood of investors out there and how they are feeling. john: public investors, obviously they will be part of the broader market when they see growth stocks down 50% or 60%. they have the same the several feeling and they see crypto markets down that much.

venture investors raised about $100 billion plus last year. they are allocating more of that towards crypto projects. vcs are actually investing no longer just in their neighbors, like coinbase, onramp infrastructure, they are looking at the core of crypto. they are looking at specific -- stats. the asset class can grow even if bitcoin loses market share. bitcoin is only 40% of crypto. it was 70% just about a year ago. emily: everyone is talking about the fed and rates. we heard jay powell's testimony today. what will be the influence, you think about of fed policy on crypto? john: i think in the short term but it will affect public market participants and retail investors. ultimately, and i have seen this in every single tech cycle, smart money will follow innovation.

the innovation is happening on web three. that is where the talent is going. that is where the applications are going. that is where development is going. that is where -- there is a crazy amount of growing usage. they will follow the innovation and it will be a nice buffer for asset classes, especially for the tokens and companies creating utility. emily: let's talk about regulation. jackie powell, ceo of crack in last year had this to say about regulation to come. >> we are not against regulation. we are happy to work with regulators. it is about clarity. it has a chilling effect on banking across the board. emily: what kind of regulation are you preparing for this year? john: we are always fully

compliant. we do everything by the book. it is a good thing. no one here is against regulation, they just want clarity. if there is certainty and you can play by a clear set of rules, you will keep a lot of innovation and volume of trading in the u.s.. part of the reason the tech markets are so good in the u.s. is because it is the deepest capital markets and it is an environment that allows for innovation. we want to keep development here and we want to create deep capital markets. emily: meantime, jp morgan recently released a report talking about ethereum's merge. i am curious what you are seeing there and what ava is preparing for. john: that report, if i am reading the same one, they said

a couple of things. what is that ethereum is losing market share to other layer ones. it is also talking about bridging? i think the report had some good ideas. if you think of all of these blockchain's, it is kind of like they are different cities with different characteristics. based on the technology and the community that is there. each of these blockchain's is starting to develop for different purposes. for web three to really flourish , one has to get from one blockchain to another easily. the avalanche bridge from ethereum to avalanche, $32 billion travel back and forth on that bridge. you are not going to get the best of crypto 3.0 unless all these blockchain's will be able to connect to each other and

users can move around and play with different tools and different applications. emily: given you just launched ava bridge, i am curious, how is blockchain's interoperability going? john: i think it is taking off. what we are learning is that there are different reasons for each blockchain to flourish in certain areas. they are trading off technology for other technology, and a certain community goes there, but they all want to try different things at different times. it is nothing different from the williamsburg bridge connecting manhattan from brooklyn. what we are learning is there is a real appetite for the move back and forth. the bridge i just cited, in six months we have seen $32 billion move back and forth. that is an astonishing number,

given you think -- emily: by the way, ed saying a golden crop is the opposite of a death -- when the bullish indicator is what lies ahead, i am curious what your thoughts are for trends we will see in 2022, whether it is crypto and fts, the crossover of crypto and gaming. what are you most excited about? john: a couple of trends in crypto, i think the asset class will have a golden cross. within the asset class, one of the things that is exciting, you talk about regulation, institutional defi products. the jp morgan report cited the embracing of defi from various institutions. tokenization of assets and creating a playground where defi done in -- defi is done in a

compliant way. also excited about gaming. the reason gaming is important is because it is kind of like a gateway for adoption. and fts were a great -- gateway for adoption in 2021. individual adoption was happening more rapidly. in 2022, gaming is the intersection of all of the good things about nft's, gameplay and defi. some of the games we are seeing, the creativity we are seeing and the game with occasion of using your own new ye -- your own unique defi -- unique nft will get closer to a metaverse environment. that is why even web two companies like facebook is so interested in the metaverse. emily: golden cross or death

cross, we shall see. john wu, president of ava labs. twitter exploded recently when a writer suggested norton's antivirus software was sneakily mining crypto and charging users for it. >> norton lifelock elicited a torrent of tweets. -- pointed out that it's product included a feature that minds crypto currency the background of computers on which it is installed, and charges users commission. there was outrage. what is really going on? what is norton up to? albeit only in the u.s. for now -- the minimum requirements. it can mine cryptocurrency while your computer is idle and norton takes a 15% cut of any money you make. it also seems mostly to stem from the fact that norton had initially failed to point out it

was a built-in feature. it won't mind any crypto without users permission. that does not mean it is problem free. there is a good chance users could make up the loss. the energy consumption, what is known the hashing power. energy consumption can be really high because mining cryptocurrencies is extremely energy intensive. even though ethereum is more efficient than bitcoin. the measure of how quickly a computer can mine cryptocurrency. the problem is we have no visibility into either. if the power is low but energy consumption is i -- is high, it is possible to 15% commission they take adds to a loss. i asked norton on these things and it declined comment beyond this statement in which it says it is an opt in product. all in all, it is a mess. another company trying to jump on the copter currency bandwagon. and maybe -- a quick buck while

users make a loss. emily: alex west. coming up, fundraising for vc's not slowing down. where the money is going on what it means for the industry. this is bloomberg. ♪

emily: records were shattered in 2021 in the world of venture capital. 2022 will likely be no different. we are off to a hot start, but where is the money going? katie ruth, good to have you with us. i want to start with --

announcing the amount of money they are putting into each individual startup increasing to $500,000, up from $20,000 back in the day. brian chesky tweeting, when we did --, you got $20,000. is this good for founders? >> good to be with you. certainly there is debate in the vc community about this. some think it is great news because if you are a first-time founder and you do not have a lot of money, $500,000 will get you a lot further than $20,000. especially if that is your salary. how long does that last, right? i think it will certainly help get some sort -- some startups off the ground. part of what comes with the territory of investing more money is they also get more ownership stake. already, there were gripes from the vc community that y

combinator was earning a significant percentage of these companies for basically discovering them. but now they would loan even more. -- they will own even more. some think it is good news, but others say maybe this isn't the right move. emily: sequoia come along time traditional silicon valley venture capital firm, investing more than $1 billion in the etf firm citadel. this is a different kind of investment. why are they doing this? >> this was firmly a surprise for a lot of people. sequoia is notable for its private investing, and certainly they have held public stocks. they have gotten more into public investing recently. this will kind of open up the door for a lot of different

kinds of deals for them. really, they are owning part of citadel, but citadel has its hands in a lot of different businesses including robinhood, which sequoia is already an investor in. some are wondering if this would create conflict of interest. but right now, this really shows that sequoia is thinking outside the box. they have set as much in recent months that they feel like the old model of venture capital is due for change. they are looking at different ways to invest in the finance world. the changing finance world. another thing that is notable is that paradigm, which invests in crypto, is investing in citadel. they say that would mean citadel would get into more crypto in the future.

which is interesting, because ken griffin -- emily: quick question, horwitz just raised a $9 billion fund. are we going to see more of this? >> it sounds like the lps are happy right now. they are giving venture firms more money. this is common. every year we see more money getting thrown into this ecosystem. certainly i would think some of the top firms are providing such great returns that it is not hard for them to get more money when they ask for it. when you have people itching to invest in these funds. one thing you do wonder about is valuations have gotten out of hand. many people are increasingly saying we are due for a correction, especially when you look at house that how tech stock search -- when you look at

how tech stocks are trading. emily: the numbers are big, we know that. katie roof. thank you. coming up, the stocks to watch in 2022 from airbnb to netflix. the analysts at bloomberg intelligence give us their topics for the year. this is bloomberg. ♪

emily: which companies should you be looking at in 2022? we are joined by joel weber. joel has narrowed down 2000 companies to 50 stocks to watch. what stands out for you? >> there's a couple of big macro themes that inform the list. to take 2000 companies and whittle it down to 50 takes an

amazing team, and spreadsheets and everything to push everything through until they come up with companies that are -- the transition to electric vehicles, the ambitions for the metaverse, china's regulatory crackdown, and basic shifts in consumer habits. in large part because of the pandemic. those inform the main picks for this year. we are saying, these are not buys or sells, analysts won't go there, but some of these have positive and negative connotations. emily: it is a global list. pull up some of the specific companies. joel: ok. from the u.s., roadblocks that robotics -- meta has planted a flag there. roblox is already a metaverse

company. 50 million users, most of them young already. kids are creating 3d worlds and sales are going to continue to expand. while mehta wants to get there, roblox is already there. another when i think -- go ahead. emily: put up some unexpected companies. joel: there is one that i think is worth mentioning, which south east asia playoff happening. we have heard about all of those , but both companies would want to watch because they are trying to become super apps. we don't really hear about them here in that same way, but there is this race there. -- has a leg up in gaming while grab is more of a ride hailing giant. both companies are going to look

to encroach on each other's turf an places that neither has gone. they are both publicly traded in the u.s. already. it remains this breakout moment for them as we round the corners of the pandemic. another one i like, this japanese motor company called native. before this, i had not dug into that company, but as the electric vehicle revolution happens, it is something like this that may have this e-axle system that is going to be used across companies. little motors like that are going to be the components that build the future. emily: fascinating. that is our big take for the day come a looking at international companies to watch. you can catch joel weber on bloomberg businessweek. that does it for this edition of bloomberg technology. tune in tomorrow where we will

be joined by -- harris. and senior economist daniel zha o. i am emily chang. this is bloomberg. ♪

♪ haidi: we are counting down to ages major market open. shery: welcome to daybreak asia. top stories this hour, asian stocks setup hollow abounds in the u.s. after jay powell thomases to tackle inflation to extend the economic expansion. other fed policy makers they are ready to act. loretta mest