emily: the $52 chips act is one step closer to president biden's desk. this means the u.s. will not have to rely so much on taiwan. we will have latest from capitol hill. more scrutiny for cryptocurrency. the sec is investigating

coinbase over possible trading of unregistered securities. accusing a former manager of insider trading just last week. we will have all the details. first, a look at the markets. it is the mega caps turn to produce earnings -- report earnings. ed: let's go straight to microsoft. we had been lower after microsoft missed on the top and bottom line. the story is the stronger dollar is impacting overseas revenue and profit. a bigger than pullback desperate or than expected pullback on spending. not the growth we have been used to in this pandemic time. next up, alphabet the parent company of google. it missed on every top and bottom line metric atop from

advertising revenue coming in better than expected. there was a concern that this was a tough advertising market. there was modest growth in youtube but in other areas, alphabet did struggle. it's interesting to see names like meta and pinterest also rising after hours in the positivity around the ad market. the nasdaq 100 is down 2% ahead of a key fed decision on wednesday where we will find out by how much rates go up. amazon was a big drag. selling off down 5% after walmart cut its profit outlook a changing consumer picture. shopify also down 40%. after it -- saying that they will hunt -- cut headcount.

emily: what are your big takeaways? microsoft doesn't look good. they highlighted the strong dollar. >> i think there were narrow misses across the board. people have been waiting to see when we hit the inflection point. these companies have been performing quite well. now we have a number of factors. shutdowns in china, the ukraine and russia story. there were narrow misses on the top and bottom line. the cloud number at 40% is still

good. dynamic 365 the erp which is something i have been looking at, its enterprise software and that number stayed strong. other areas it seemed like narrow misses everywhere. when you mentioned with google, the ad market seemed to be stronger with alphabet than people expected. the question is do people outside of us realize we are in a recession? you saw prime day you look at the advertising spend, it looks like people are still shopping. >> just got off the phone with the alphabet cfo and she used the word uncertainty a number of times. i expect to get even more color on the earnings call later. she says uncertainty is the best way to characterize what we are saying but the reality of the data is that it's complicated. what she talked about was that

there are variety of factors at play but it's really challenging to aggregate them. what do you take away from that? >> the reason we are having a hard time deciding if we are in a recession right now. their numbers indicating there is some strength and growth. these numbers are de-celebrated -- decelerating growth for google and microsoft, but they are up year-over-year. people are spending more money on technology and advertising than a year ago when we thought the market was growing at an explosive rate. now we are entering a slowdown, we have interest rate hikes. some of the reason there is enthusiasm about these misses is we have been waiting for this. we've been waiting to see the monetary policy coming into play having companies start to slow down, having guidance to slow down and saying what's happening

is working. i think that e-commerce and platforms will be strong because we have become hyper dependent on them draw the pandemic. we don't want to change that and companies will be looking to technology to help automate to scale their businesses with less big overhead resources and slowed hiring which means technology will have to make the brunt of the weight. emily: our guest talked about the growth driven by travel and retail which continue to be strong. that makes sense as we hopefully come out of the pandemic. but she talked about the pullback by some advertisers reflecting uncertainty. what do you make of her use of the word pullback? is google immune to this given

that it is such a broad-based business or not? >> the numbers indicate there is prioritization. google seems to be above the fold whereas will we see what happened to snap and meta, there had been pullback. that's more deceleration than overall slowing of growth altogether. the indicators here are that companies going online still believe that google is their best bet. that's why we continue to see the spend. some companies that understand what's going on are starting to look at whether it's slow in hiring or at expense. we've heard the announcements from companies that are going to do less hiring that'll spend less on advertising. none of this is surprising. smart companies understand you cannot entirely save your way to growth.

you might want to slow down temporarily until we get a handle of what's going on. there some many factors, so much inconsistency in the data and that's why i said we are having a hard time making decisions. we are seeing some numbers look good and others look incredibly bad or at risk. emily: maybe even google is having a hard time and clearly microsoft is. clearly people want to consume short form video. she talked about youtube shorts and focusing on the engagement and experience in the hope that monetization will come later. thank you for helping us to unpack a lot of difficult and challenging chances to separate out. twitter and elon musk are fighting about that date for the delaware trial. a lawyer for elon musk says the

social media platform is not reducing the requested documents. he also said twitter is resisting turning overwrought data causing a logjam in the production of evidence the defense needs. coming up, the senate is set to vote on the chip act. alibaba pushes to list in hong kong. the latest from ec next. -- from washington, d.c.. this is bloomberg. ♪

emily: today the senate advances a $52 billion bill that would boost the semi conductor industry.

nancy pelosi seems dead set on plans to his taiwan next month. beijing has warned her not to come. it is the chip capital of the world. we have the details from capitol hill. what is going on as always on the u.s. china relationship. how close are we on the chips act? parks the senate has cleared two seizure votes which means they just have to pass the legislation. they're looking on doing that tomorrow. at this point, it absolutely seems like they have the votes. we have seen a lot of bipartisan support. a number of republicans joining democrats on these votes. even though we have a couple of democrats not here because they tested positive for covid-19, it seems like this will have the support to clear the senate. from there, it will move to the

house where the house leaders have promised a quick vote. this is something that folks want to get done especially since house is scheduled to leave on friday for a recess. >> how will this impact u.s. china tensions? >> this initially started as something that was supposed to bolster u.s. competitiveness with china. it will still do that in some regard making sure the u.s. is able to make semi conductors. it's not the strong anti-china bill that it was at the beginning. most provisions have gotten stripped out in the interest of time and getting something done quickly. aren't that many days left for lawmakers to do work before the november midterm elections. this is probably a more china friendly bill than what we started with but that doesn't mean president biden is going to have an easy call with xi jinping.

he said he would be speaking with him in the next 10 days. something that will be coming up is nancy pelosi's proposed trip to taiwan. emily: on the proposed trip, it would be the first of its kind in 25 years. we have heard these warnings from the chinese government, do not come. it seems like the trip is going to happen. what do you make of this and how this trip will impact the u.s. china relationship? >> the one notable thing is that president biden was hesitant on nancy pelosi going on this trip but you have heard a lot of lawmakers saying that she should not back down to china. she should not back down to beijing's concerns and she should absolutely go. you heard which mcconnell say today that nancy pelosi would be handing china a victory if she were to cancel now. you heard similar support from other democrats and republicans. it seems like at this point even though the executive branch is timid about the fallout from

this trip, a lot of nancy pelosi's colleagues are absolutely supporting this planet trip. -- this planned trip. emily: another twist in the story, alibaba will seek a primary listing in hong kong paving the way for investors to directly by shares of the e-commerce company for the first time. this will also entrench hong kong as an alternative to u.s. markets. i remember interviewing jack ma on the floor of the new york stock exchange and here we are years later. alibaba proposing a secondary listing in hong kong. why now? >> thank you for having me. we step back, alibaba is facing two dimensions of regulatory --

they're getting punished for monopolistic practices. on the second hand, there is a risk of getting delisted from the united states in 2024 because of the holding foreign companies accountable act. this move is first and foremost a hedge against the delisting risk but it can also help with the domestic regulatory risk. on the delisting front, we have seen going this from china and the u.s. to resolve the conflict. a few months ago, the vice premier gave a speech where he expressed china's willingness to cooperate. the reality is that a smooth resolution is not a foregone --

foregone conclusion. the risk of alibaba and other chinese companies getting delisted off u.s. exchanges in 2024 is still real. on the domestic regulatory front, we have seen some positive signs lately regarding the easing of the tech crackdown. by making this move, alibaba can probably win some positive faber -- favor. china is clearly hoping to build up hong kong status as a global financial hub. having mainland tech giants pullback is clearly in mind -- in line with those goals. emily: what does this mean for other u.s. listed chinese companies? are we going to see a slew of relisting's? >> this will encourage the roughly 200 similar companies.

this move could definitely help solidify hong kong as an alternative venue. it is likely going to encourage more activity over the next few months. emily: what do you think is next in terms of alibaba's evolving relationship its own government, the chinese government which as we know has been incredibly challenging? >> that's one of the main reasons of these primary listings in hong kong. alibaba is trying to work more closely with the chinese government in many regards. most likely over the next few months will continue to see these large internet companies working closer with regulators to avoid these regulatory risks that we face as investors over

the last few years. emily: thank you so much for joining us. we will continue to follow this alibaba situation. in the meantime, twitter setting a date for a special shareholder vote on the proposed takeover by elon musk. we know elon musk is trying to get out of the deal altogether. they are fighting over dates for the trial to start each looks like sometime in october. twitter has set a september date for a meeting with shareholders. interesting given that elon musk does not want the deal to go forward at all. we have our eyes on september 13 than the trial coming up sometime in october. coming up, walmart cuts its profit outlook. shopify is cutting jobs as well. what does the future hold for e-commerce and a potential recession? this is bloomberg. ♪

emily: could walmart's surprise cut to its profit outlook signal doom to e-commerce? john edwards joins us to talk about the state of the e-commerce industry. we see shopify cutting 10,000 jobs. how does this all add up to you? jon: shopify was interesting.

they made a big bet that the shift to e-commerce during the pandemic was going to be long-lasting and accelerate faster than anyone had expected before covid. that bet turned out to be completely wrong. they thought that people were not going to go back to in person shopping at the pace that they did. people have flocked back to stores. that led to shopify having to cut a bunch of jobs. emily: what does what were seeing indicate about amazon results we expect later this week? john: that will be interesting to watch in light of what we heard from walmart. what walmart is saying is not that spending overall is slowing down but the mix is shifting in a way that is going to cut into their margin. people are spending less on

big-ticket items. less on discretionary splurge items. shifting their spending to food, fuel, things that are staples that have to have. -- that people have to have. that is where walmart's profit warning came from. they raised their expectations for revenue overall but the mix is going to be much left -- must left -- much less profitable revenue for them. amazon obviously likes to sell a lot of those same big ticket items that people are starting to shy away from. emily: we were speaking about this with respect to alphabet and microsoft earnings earlier. we are seeing mixed results, slightly below estimates.

it is causing some confusion about whether or not we are already in a recession. our week according to the numbers that we are seeing from these e-commerce companies? >> it's hard to say, but i would say no for now. again, it is less of a complete slowdown in spending and more of a shift in the mix. high inflation is biting everyone. it is changing the priorities that people have an terms of what they are spending on. as we saw in the earnings from companies like mcdonald's, coca-cola, pepsi a couple of weeks ago, people are still spending on things like food, going out, buying soda and chips and things. it's more of a change in the mix and less of a complete slowdown. emily: the story is not over, we

will watch the amazon results coming out later this week. another story we are watching, russia says it will opt out of the international space station after 2024. russia is planning on focusing on building its own orbital outpost according to its new space chief. this coming amid tensions between russia and the west over the war in ukraine. russia says it will fulfill its obligations to others at the space station. and it says that the space station is set to be commissioned by crashing into the ocean by 2030 anyway. this is bloomberg. ♪

emily: welcome back.

microsoft and alphabet, the first of the mega cap tech stocks to report results. ed ludlow is here with the top lines from the earnings calls. ed: microsoft missed on the top and bottom line. what's interesting is they said asia cloud was a mixed bag. 1% weaker than expected. they are still seeing big corporate deals. microsoft executives saying the number of big deals and asia have hit a record. they are calling it healthy growth. alphabet shares are higher. the real story is amazon search. travel in particular has driven a lot of the search activity on google which has helped ads hold up. some of those customers are

showing worrying signs. these are two stocks that have felt some pain. we're looking to find the bottom of the market and we want to see them bounce back. texas instruments, when you think semiconductors you have to talk about them. they make everything from washing machine chips to satellite chips. they are up 2.7 percent showing strong outlook for the current quarter. it is change the mindset. emily: i want to dig into the state of cybersecurity. a new report into cybercrime trends and predictions and the impact on the climbing economic conditions. how are they connected?

on the one hand, cyberattacks and cyber threats seem to be quite are the moment. why is that? >> that's a great question. it doesn't seem that way. i don't know if that's actually the case. we haven't seen -- these mega breaches happen in the news. that's good news. the reality is that there is a new ransomware victim posted online with their data that are being sorted every four hours. we are seeing new victims posted on leak sites. emily: you are reporting there could be an uptick in cybercrime because of the deteriorating situation in the economy. we've been reporting throughout the show more bad news whether it's results from of bet or microsoft or walmart or shopify. talk to us about how this could all have an impact on cybercrime. >> what we see is that whenever

there is money to be made, there are criminals attracted to that opportunity. in over 600 cases that unit 42 investigated last year, we saw payment request as high as $30 million u.s. in ransomware cases and the average is $925,000 u.s.. we are at almost $1 million as an average payment. there is a tremendous amount of money to be made. there is still a much lower barrier to entry been for the defense side -- for the criminal side then defense side. how long an attacker is in the environment before they go unnoticed is 28 days. that means the longer they are in an environment, some more damage they can cause and damage directly translates to the war money they can receive on the back and. -- back end. emily: we're preparing for nancy

pelosi to visit taiwan and the chinese government is not happy about it. at the same time, alibaba preparing for a listing in hong kong. are you expecting rising u.s. china tensions to lead to an increase in cybercrime as well? >> i think the reality is diplomatic ties -- we have seen a tremendous amount of intellectual property theft. china is an nationstate that is alongside so many other countries has gone back and forth with united states on that. in addition to ransomware cases which we spoke about, one of the largest cases we see our business he mail compromise. there is overlap between that and nationstate activity. last week we saw north korean

activity related to ransomware cases. i don't think cyber where activity -- cyber criminal activity is going away anytime soon. i think we will continue to see more. emily: what is the relationship with the crypto market? we have seen stream volatility. as i understand, that can also be tied to ransomware. >> what i think you would see our massive amounts of money to be made in cybercrime. cryptocurrency has been one economic source of his field that. we look at business he mail compromise, when you compare to what we are seeing with payments

from our clients alone upwards of $8 million u.s., a lot of that is money that is transacting and that is occurring over cryptocurrency. there certainly a lot of pressure going on from the u.s. government and working with so many international governments to make it more difficult for cyber criminals to use cryptocurrency as easily and as readily as they have in the past. we are hoping that continues to have a positive impact for organizations throughout the world. emily: great to have you. meantime it is the first major effort by the u.s. congress to regulate tech since the inception of the internet. lawmakers could vote before midterm elections. this would lay down ground rules for dominant companies. earlier, i spoke with the alphabet cfo and asked her about the various antitrust proposals.

she said the proposals could break a wide variety of services and others we offer. we are focused on what could be landed and we are seeing progress on the chips act. we are focused on places like privacy legislation. he continues to be a dynamic process. coming, coinbase and the sec are at it again. this is bluebird. -- this is bloomberg. ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone

from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

>> congress has looked at this

issue. they want to try to find a pathway forward. i think instead of doing this regulation by enforcement, we should be looking at the legislative process. the open executive order, research and study that is going on right now to think through this from a public policy perspective. emily: that was kristin smith of the blockchain association earlier. reacting to the latest in the coinbase s.e.c. saga. the crypto platform is facing an sec looking into filings. what is the sec contending? >> the sec is trying to weigh in on one of the biggest issues facing the crypto industry.

whether these exchanges like coinbase are -- if the tokens they are listing our securities and if the sec determines that they are, that potentially requires these firms to register as exchanges with the regulators. it could be a big deal. it comes at a time where a lot of these exchanges are arguing that they don't offer any securities that all of the tokens on their platforms are commodities. it's a hot debate right now. emily: why is it so confusing? why is it so hard to answer that question? is crypto a security? >> imagine how many renditions this argument has taken. and fts, or crypto itself. when i go back to what was said in a big tweet last year, this is when it started to get

contagious between industry and the agencies. what ryan armstrong said was they refused to tell us why they think it's a security and instead they subpoena a lot of records from us. we comply then they tell us they will sue us if we launch certain products. to allison's point, a lot of this is being done through enforcement rather than rulemaking itself. until the agencies decide what's a currency, commodity, and security, it will be difficult for the industry to work around that. emily: is this connected to the insider trading investigation that was brought against a former coinbase manager last week? >> the ongoing probe into whether coinbase is improperly offering unregistered securities is separate. it does have some ties that -- the insider trading probe has some ties.

in the sec complaint last week that dealt with a former coinbase employee potentially leaking information to his brother and a friend, the sec did identify nine tokens that it felt were securities. at the time before we know about this other probe that predates those allegations, i was talking to folks his head you notice those have effects on coinbase as well because the exchange has said that it lists seven out of nine that were identified. that essentially implies that a back or way of saying that they do need to come in and register. it works off of what the sec chair has been saying for a long time now that he thinks a lot of these exchanges are offering securities and a lot of the need to come in and comply with his agency's rules. emily: what are the next steps?

>> it's interesting because if you look for an example coinbase is ipo filing, it said the regulatory landscape would be a risk factor and look at how much it has been one. coinbase a stock dropped 20% and the total stock drop you have seen this year, the market cap has gone down so much. it is less than half the size of nasdaq now when it went public, it was much bigger. exchanges in the united states, stock exchanges have what the industry likes to think of as because i regulatory powers. when you look at these crypto exchanges which are the primary way to oversee the industry, are they going to look more like stock exchanges in the future where they have rulemaking capabilities or how much will the agencies fight through themselves?

it's an open question. it will be played out it looks like in courts in a lot of cases. >> any precedent for where this could land or none at all because digital assets are so new? >> not a lot of precedent in terms of whether digital assets are securities. as the first time we have really seen the sec come out and list specific tokens despite having said for a -- for a year now that these exchanges do have securities on them. normally straight away from making those specific allegations because it's not really in their interest to pigeonhole themselves into these assets are securities, these assets are commodities by

keeping more vague, gives them more leeway. emily: thank you so much for clarifying very confusing situation. coming up, airlines are losing more luggage than ever. can back trackers save you from losing your stuff forever? spoiler, not really. that's next. this is bloomberg. ♪

>> the economy is catching up to apple for the first time in a while, it feels like the iphone maker is especially vulnerable to outside economic factors like rising inflation, increasing interest rates and the fluctuating u.s. dollar.

the company will report third-quarter earnings that many analysts think will come in flat from last year. that compares to this time a year ago when apple reported early 6% year-over-year growth. while these are impressive numbers, analysts and investors will probably be concerned about the lack of real growth. apple is expecting a negative hit of $8 billion to third-quarter revenue due to china shutdowns related to covid earlier this year and the ongoing chip shortage. this week's report also comes amid the company's plans to slow hiring and spending in some divisions next year as a grapples with the possibility of a recession.

morgan stanley and wells fargo have already cut their apple start price -- stock price targets. i don't believe that any of these are real long-term issues when we consider apple big product plans for the end of 2022 and into 2023 which will include the first makes reality headset, four new iphone 14 models, new watches, ipads, and max. -- macs. emily: you can subscribe to his weekly newsletter at bloomberg.com. airlines mishandled 28 million bags of luggage every year due to one estimate. a could be higher this year as airports struggle with a higher demand and fewer employees. now, people can use trackers to keep an eye on their belongings. knowing where your suitcase is might not be enough hope you get

it back. you just took a trip to europe and they didn't lose your luggage. you saw this play out firsthand. >> that's right we were pulling out of heathrow and a guy across thiel was waving his phone saying my bags aren't on this flight. it turns out he had put in airtight in his suitcase -- and air tag in his suitcase. i wonder are the people doing this and it turns out they are. knowing where your bag is doesn't ensure that you will be reunited with after your flight. emily: i've heard so many horror stories of people saying it's right beyond that wall but they can't get it back. >> that's one white that the air tag can be useful. these airlines and their contractors are so overwhelmed right now. knowing that your bag is kind a wall or hasn't left your

departure point. it's a combination of technical staff news -- snafus and staffing shortages. emily: what should you do? do you use an air tag or tile? i've received advertisements for smart luggage. >> putting an air tag or tile in luggage if you have to check it is a good idea. at least it will give you peace of mind. you might not want to wait extra hour at the airport if you know your bag isn't there. if you're going to check a bag, you're going to be at the mercy of the airline and the airport. emily: travel light printed don't put anything important and it. i want to talk to about the salts we the results we have

just received. one cfo used the word uncertainty multiple times. the word we are using to talk about this is uncertainty. what's your take? >> compared to the bloodbath of last week with snap and twitter, today has been a virtual celebration. i agree, headwinds, uncertainty when it comes to buying behavior, advertising behavior, the cloud spending is a little bit below expected on microsoft and google then you have the currency question with the strong u.s. dollar and the value of overseas sales, it's going to weigh on a lot of the big companies. >> you've covered a lot of the big companies. there's a big question of are we in a recession or not and how is this going to impact big tech?

what are you watching? >> i'm the furthest thing from an economic evangelist. it certainly seems to me we are in a recessionary time. for amazon, we went to look at e-commerce sales, cloud growth. aws is a follow along with az ure and google cloud. these companies are well-equipped to whether this. i don't think the big four or big five are going to have a significant problem longer-term. it's like snap or twitter that seem constantly engulfed in this kind of turmoil. emily: those are more experimental add markets. apple is doing sales on their product in china. >> they probably will. the strength of apple model, the

health of the ios ecosystem seems so strong right now. i don't personally imagine a protracted pullback. emily: thank you. that does it for this edition of bloomberg technology. tomorrow we will speak with a ceo after spotify results. plus the meta-continued competition.