>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang in .

♪ >> i am at ludlow in new york in for emily chang this is "bloomberg technology," coming of the next hour tech continues to follow the nasdaq 100 falls for the fifth day. the strong dollar grows. amazon goes after deal hungry shoppers as -- the e-commerce giant will hold a second crime day -- prime day sale this october in the fight back against inflation. is a bird or a plane? is your delivery coming from the sky. we talked them about the latest play to win over regulators. tech continues to get -- as part of a broad market selloff, a sharp move in the pound, despite some megacap's closing in the

green, investors remain subdued in the face of global monetary pod -- policy tightening. joining me, monday volatility, manus, where is the pain? >> it was an ugly day, a sell everything kind of market, the center of that was the bond market. let's talk about the 10 year treasury yields soared 24 basis points, is daintily close to a 4% handle. we have not seen that sense -- dangerously close to a 4% handle. we have not seen it since 2009. the u.s. bond market after the bank of england did not do much to calm any sort of nerves in the ripple effect, tons of stress correlations approached one, and it took a whammy of the stock market. >> we talk a lot about the nasdaq 100, we hear in the u.s. so much of the global make talk

-- mega tech is on the u.s. -- nasdaq 100. we have seen the impact of the pound, global tech has fallen. the nasdaq 100 is kind of outperformed a little relative to the rest of the tech stocks. >> it was an interesting day, they closed a half a percent lower than the nasdaq 100 the s&p 500 was down about 1%, was not outperforming. it was thanks to the megacap tech, the likes of amazon, apple, tesla to squeak out gains. the sheer size of the companies, that will mask a lot of pain at the index level. the stoxx have been falling for a while now, to the debt --stocks have been falling for a while no to the detriment of the stocks. the yields are higher, the discount rate is higher, but we are talking about amazon, doesn't matter? >> we have done a poll, we asked

a question, where does the nasdaq 100 end the year? it was astonishing the strength of the response. around the 11,000 level, a vast majority see is going lower than 10, a small section professional retail investors seeing us go to 14,000, it is hard to call a bottom in tech stocks in the real yields push higher. >> absolutely, but if you already bull you love to see some like this. that you have such a strong consensus that is a bad environment. in tachy, both professional and retail traders felt -- and tech, both professional and retail trailers -- traders felt it would fall. to your point as real yields march higher, we know that there is people that will try to catch

that. >> i am looking at bitcoin trading around 19,000 u.s. dollars, between 19,000, 19,200 and more narrow range than the volatility of recent sessions. what is the story with it/ >> bitcoin has been making a run for, up 1%, has been up as much as 2%. on a day we have the s&p 500 down 1%, you do see bitcoin and crypto broadly bucking the trend. typically those two assets trade hand-in-hand. at this point there's been so much pain in the crypto space, bitcoin is the largest point out there, down over 50% year-to-date. i think a lot of leverage has been flushed out the market. the marginal seller is already gone. >> what is katie looking for this week? >> i am trying to make it to the weekend. it will be interesting to see what the bond market and the

currency market does here. the see the stress from those two asset you have to be wondering how much pain there is in stocks. >> thank you to bloomberg katie, amazon's prime day, they are offering a two day early access sale ahead of the holiday season. the first time has done two prime day events in the same year. this as there is a slowdown in holiday. shopping what is the play from amazon? >> why not? slap prime day on it. get people excited, sell as much as you can. merchants are dealing with an inventory lot. they want -- glut, they get people's money before some one else done. we have this race going on with christmas creeping in earlier in the season. >> is this a surprise or was in

the works? >> not really, the precise day was the only news. that they are rebranding it as prime early access as opposed to saying prime day 2 does not sound fresh enough. >> you talked about inventories, a lot of sellers on amazon have to do a juggling act of supply chain crunch getting things in last holiday season. a lot of it does not turn up until the middle of this year, was a risk resellers on the amazon platform? >> the risk is that they do not sell it. i think we will see prices drop a lot on consumer goods, nondiscretionary -- i am sorry nondiscretionary purposes. -- on discretionary purposes. a lot of things people wanted last year the pandemic they do not want anymore. how do you entice someone to buy it? you have to give them a great

deal. that will be the danger there, love the merchant taking haircuts, retooling their other product lines to align better with what people are buying now. >> what is the mood music from amazon about the state of the global consumer about the economic pain we see around the world? >> they have not given a lot of guidance or said a whole lot. they are trying to promote their business, be the place to go for deals. be the place to go for your holiday should -- shopping. be a place of convenience and tried to stand out. basically will be a dogfight for every consumer dollar. they want to get every one that they can. >> i remember the conversation you and i were having last year, black friday, cyber monday. what does the second prime day event mean in terms of how consumers spend those other holiday shopping periods?

>> we do not know if there borrowing tomorrow's spending today. a lot of this is retailers realizing they will come up against the edges of their spending limits come the holiday season. people are leaning on their credit cards for food and fuel to deal with inflation. , holiday season they may not have enough room on their credit cards let alone money to spend. they will want to lock in that spending what people have money. >> what are we feeling -- hearing from retailers themselves as small businesses on the amazon platforms? >> they are not expecting a good holiday. they are recognizing there is an inventory glut. they will have to pay for advertising the standout. they will have to have good discounts to get buyers to buy. they are not looking for a great holiday. >> thank you very much. coming up, microsoft's valuation

has dropped more than apple's since the beginning of the year, they say this valuation trend could reverse. because a software makers in better position to reserve a recession. we will survive -- explore mixed -- next. this is bloomberg. ♪

ed: let's talk megacap's, shares of microsoft have dropped 29% year-to-date, almost -- research from bloomberg

intelligence binds if you get the microscope out, microsoft is outperforming the iphone maker in almost every single financial matrix and mike -- metric and might be in a better position to survive a recession. what is the thesis here? >> the thesis is very simple, when you look at the tech space, software has been killed quite a bit over the last one year or i would say 1 -- nine months over rising rates. it is one of the highest growth sectors. we think microsoft is been punished unjustly compared to the likes of apple that has performed better in this timeframe. if you look at the growth profile of microsoft it is better than ample. if you look at the margin profile it is better than apple. more importantly, it is not as dependent or exposed to china as apple was. ed: i think we have the 12 month

price to earnings ratio in apple and in microsoft. microsoft came in a little bit below apple in recent trading sessions. our people more focused on microsoft near-term and what is doing right now rather than what it could do? guest: in both cases microsoft has not disappointed anybody in the last quarter come if you going to next quarter they have not realize their guns, the dollar will be an issue, translation risk is there. if you look at constant currency growth, we cannot see in the reason why microsoft and that growth 12% to 15% in the next two quarters. we still argue that can grow north of 10% of constant currency, has a very diverse set of products. a mixture of all those should allow them to grow north of 10%. ed: if you are in the idea of

being recession proof or a better position to whether recession, microsoft and apple do have different businesses. why is microsoft better is asian to whether recession than apple -- positioned to whether a recession than apple? >> most consumers of apple are rich people and they will continue to buy apple, and look at year-over-year comparison, is high single digits. when you look at microsoft it is low double digits, at least for that timeframe. even without buying deep, they can surprise on the outside because of cloud or any other reason. this is not counting the acquisition of activision. they have better enterprise items. ed: there is one key market we are zero in on right now, that is china.

where does china fit in this idea that microsoft may be better positioned right now in some says relative to apple -- sense relative to apple? >> if you look apple it is very close to the china region generating 20% of its revenues there. a bulk of their phones come out of china, any disruptions of covid reasons or g applicable regions -- reasons, -- geopolitical reasons apple have a hard time. when you look at microsoft, does look to china for expansion of its cloud data centers, other than that it generates much of its revenue away from china, the market is exposed to it from a supply chain a lot less than apple is. ed: we broke some news the other day here on "bloomberg technology." about microsoft's confidence that this activision deal it's done.

the market seems to be paying attention. what is your read on that? >> it will be a very interesting acquisition for everyone in tech. the general contention -- idea is that regulators will be very tough on soft. a new couple -- every few couple of months if there is no major hangups from regulators will see the price gap clothing -- closing. our analyst believer will go through due to the nature of the deal. ed: apple, fundamentals strong, near-term risk, why did you write that? guest: the reason we say that come if you look at apple right now 23% of their -- 43% of the revenue come from europe and china, to regions facing economic slowdown right now. europe, we think things will get

worse, in the near term before gets better. the second thing we want to point out, the iphone 14 is not a mobile leader, a real mover for apple. the hardware design is old, in most cases the base model the processor is old. next year's model will be a big shift. when you look at the install base of 1800 -- at the install base, you will sell about 220 million phones. we do not see that changing this year that much. ed: crunching the numbers have bloomberg intelligence, thank you very much. the company many fracturing its new i-4 -- iphone 14 in india, as production is weeks ahead of schedule. they are expanding manufacturing away from china. india has been key to make the

country a viable competitor to china in valuable -- in viability and production case with -- capabilities. their push into audio, specifically headphones has been one of the companies most successful bets. he explains the controversial strategy around airpods. >> good morning. >> for years investors and fans of apple are waiting to see if the company's ceo can release a product to match the iphone. the next big thing could be in your pocket already. i'm talking about airpods. third-party estimates suggest apple sold around 120 million pairs last year taking in about $20 billion. the reason for this success also gets to the heart of why apple is so controversial. credit to the headphone itself scum but only partly. it was easy to forget that when it was released reviewers hated them. they did not sound great, got

lost easily, not durable, environmentally west nubile. -- environmentally questionable. they had one thing going for them easily set up with the iphone, this is on purpose. the extras do not do much without the phone, the phone does not do -- were critically well without them. when apple announced airpods the company also made everyone else's headphones worse by getting rid of the -- audio jack. the company's vp of marketing said this was about one thing. >> courage. >> ok, sure, it was also about apple's awesome power. that makes the company controversial, spotify, epic games, even google says they abuse their power. antitrust litigation will take years. until then apple can extract evermore money out of its 15 years young cash cow the iphone,

who needs the next big thing? ed: thank you for that. coming up remote working during the pandemic has left many new york offices empty. how this trend is also in major cities across the world. this is bloomberg. ♪

ed: the rise of remote work during the pandemic has put new york city at the center of a global property dilemma were multimillion -- billion-dollar building sit vacant. as you know i am visiting from san francisco, taking a stroll down 3rd avenue there is far fewer workers going through revolving doors then when i was

last year four years ago. guest: a lot of vacant storefronts as well, a lot of workers are not coming into the office, companies are reducing their real estate footprint because of that. those that look to expand are not looking at an office value -- avenue. >> we are still using tools like zoom and teams, multiple options. what will a landlord do to fix this to get workers and companies back into the buildings themselves? >> a lot of landlords are adding amenities, putting hundreds of millions of dollars into their office builders to add outdoor spaces, new lobbies, elevators to entice tenants. hopefully those tens will get the workers to come back in as well as we slowly start to see a happen across the city. ed: a long-standing problem, same in san francisco, there is not enough apartments at affordable prices. but, there is a lot of empty buildings, why is it so hard to

convert the office buildings into residential? >> that is the question everyone is asking. a lot of the buildings are so big and rectangular with dark spaces is hard to convert into visit -- livable residential areas. there are zoning restrictions that do not allow for these types of renovations to be made. landlords to embark in the super costly renovation. ed: that is the building owners perspective. what are the tenants asking for? guest: they want the best and newest places, near ran central terminal, near -- grand central terminal, near their peers, we have a lot of options to choose from. if they choose between eight 3rd avenue 1950's building -- a 3rd avenue 1950's building that has been sort of revenue --

renovated, or a newer one they will choose a newer one. ed: what was the thing that surprised you most reporting this? guest: what surprised me the most was how much this impacts everyone. not just landlords, tenants, but also the city. the city has lost a lot of tax revenue due to the decline in value with these office buildings. it is not look to turn around anytime soon. ed: thank you bloomberg natalie wong. silicon valley's ceo ceo, will talk about venture capital and investing in a downturn. later, crypto is considered one of the riskiest if not the riskiest asset class these days. the currencies are among the top performers this quarter. this is bloomberg. ♪

ed: this is "bloomberg technology," i am at lulu in new york. let's -- ed ludlow in new york.

let's get back to the volatility. there is a hit to all corners of the technology universe making this a tough environment for everyone. from megacap's to utility you startups. let's bring in him, he is known as a value ceo's ceo. what is your read on the markets right now? guest: thank you for having me. at raise capital, -- race capital, we -- when i saw them in new york last week we talked about how the crypto market was in much worst shape into thousand 19 compared to today when we first started --2019 compared to today. we are seeing early-stage --

very strong for a few reasons. number one, pico funding is not tied to revenue -- peak funding is not tied to revenue. market revenue has very level -- little impact to early-stage founders. multistage companies wait -- have an 18 to 24 month runway. number two, ipo, look at the recent adobe 20 billion-dollar megadeal we can see the next two years will be very strong. that is critical. three, venture capital investors are sitting on 16 to $2 billion of cash for their invest -- 162 billion dollars of cash for their investments. ed: what you are seeing is not risk aversion like we see in the

public markets in the later stages. are you guys ready to to spend, ready to deploy capital? or are you sitting on the sidelines? guest: we are definitely not sitting on the sidelines we have been extreme active in investing. if you look at the cycle, post 2008, the breakout companies invested soon after those crashes. really good companies, strong founders bubble up to the top and valuations are rational. you can make bets and have ownership much easier. this is a good time. ed: you talked about valuations being rational, with hundreds of startups out there, potentially more with unicorn status, one billion-dollar valuations, what is the risk we see those valuations come down? that there is a major repricing of startups of a certain size?

guest: this happens a dental every cycle -- in every cycle, it will be impacted by the equity market. that is where people thought liquidity would be. we also see, going back to the adobe deal, $20 million in size, it could drive for investors along the way. tech is always needed, we are about to see one major revolution of decentralization through web3 of tech applications that emerge in -- very good time. >> silicon valley's ceo's ceo. you found it and took public be a systems, give me the founder's perspective. how hard is it right now to be a

fledgling startup or a founder with an idea to sit in front of an investor and chamoli with cash in public --pocket? -- cash -- and come away with cash in your pocket? >> raising money is not the same as it was last year, thank goodness the words revenue and cash flow matter again. the other thing is run rate, cost and expenses, we have seen a slew of layoffs, not because the company could not afford this people, but they are we thinking about how to get to profitability and cash flow positive. we will see good ceo driving great companies all last a long time. ed: there are some areas you have a keen interest in, web three being one. what will big tech do when it comes to web three? will he do anything at all?

do you think investors are trying to lose a bit of patience there? guest: web3 is much more cyclical than a regular market, the pacing is about three years, he saw the last crash 2019, and another crash in 2022. it is showing the maturation of a technology is moving a lot faster than other cycles we have seen. when you look at it, amazon web services, aws from amazon controls over one third of the western world and in the structure. that is unheard of, such large concentrated control of internet itself. you have other key players following them, almost all of the western internet and for structure. decentralization of internet is greatly needed. we have been frustrated with

centralized social media control. this has to happen. ed: before i let you go, let me draw on your experience, alfred. you have been through the tech bubble, economic ups and downs. how is what we are seeing now in the global economy compared to what you see before? >> it was scary at times, in the 2000 bubble, super early-stage companies that were listed publicly and getting trashed. the market had no escape, it was all publicly done. when the rug got pulled it was over. in 2008 was a financial crisis we were not sure of the ranking system was it sound -- banking system was sound. now is different. we have inflation, rapidly rising interest rate that because the market to be receding to the level it is. when they generate 4% we are in

a whole different world, from that perspective investment has to change. from a tech perspective we will be insanely remarkable productive applications. it will be better than anything ever experienced, it will be a great time ahead. ed: alfred, thank you. autonomous delivery drone startup has delivered -- developed a new sound-based technology, they help the -- hope the new tech will convince regulators. i took a trip to a walmart in northwest arkansas where zipline is trying the tech. ed: is this about to become a more common site? zipline thanks so. >> this is held in arkansas, list talk about zipline. what is zipline? >> providing teleportation as a

service to companies and now directly to home. we started with medical products, today we deliver many different things to primary care facilities, hospitals, homes, whatever is needed quickly can be delivered by an autonomous aircraft. zipline launched in rwanda, we are serving 21 hospitals, today we serve almost 3000 hospitals across rwanda, ghana, nigeria, kenya, now the united states in japan. we delivered 1.5 million doses of covid vaccine, 75% of a blood supply in a couple countries fully economist that sit -- fully autonomously that save the money. ed: how does that work? >> once it launches from the distribution center, it it lies

autonomously making its own decisions. flies to the gps coordinates is, then we use a parachute drop so anyone can receive the delivery. the vehicle come home -- comes home and, -- land, we swap out the battery. >> they are taking on retail in the u.s. commerce market. >> launching and 3, 2, 1. >> when the zipline drone shoots off the laundry it does zero to 60 miles per hour and .08 seconds, the battery on the drone means it can travel 200 nautical miles technically on paper. they are limited to the 1.4 mile radius because of the faa's strict regulation on drones. this pilot, here at the walmart

store, if you live within the radius, you can order your hamburger helper or your toothpaste, q-tip, orange, whatever you need and they will delivered to your home. ed: to get regulators on board they hope that a new sound-based technology will give them more confidence this type of drone safe. explain to me the basics of the technology. >> it is a core problem for the economy in the united states airspace. when you have a busy airspace, it you have a ton of vehicles you must be able to guarantee the two i'll -- mile all clear hockey puck, we have tried using radar, lidar, the systems allow times do not work. this uses a microphone array. it is an extremely weird graphical approach, when we thought that was impossible for years ago.

when you are flying to the air fast megaphones pick up a lot of ambient noise. the also have the noise of your own propellers because the aircraft makes noises. you are listening for something that is within two miles of you. the amazing thing, i using intricate mechanical engineering design, designing the array and combining that with signal processing, it can listen to the sound you're getting from the microphones. you cannot only determine whether a vehicle is, we can determine the exact make and model of that aircraft. we think this will have a big impact in the autonomy air pays -- airspace, not just zipline. ed: will it take zipline merit -- airstream? bloomberg suggest that the use of drones would be only economical and highly specialized or niche situations like surveillance or mapping. ed: is delivering in the retail market the biggest opportunity? >> there is a global

transportation coming in logistics, from big heavy slow vehicles towards light, fast, electric, autonomous. our exclusive focus is approximating to companies. ed: coming up, stocks, bonds, commodities are all in the red. cryptocurrency is where the dollar as a top-performing asset this dollar -- quarter. this is bloomberg. ♪

ed: currencies around the world

fluctuate, the sterling dropped to a record low against the dollar, widespread pessimism rocking markets. are there currencies they have performed pretty well? we are here to explain the relative performance. i see volatility everywhere. i see volatility in crypto. if you dig a little deeper there is some outperformers. guest: it is interesting to watch how the last couple of months have gone, they are worried that crypto will break again below the 17,500 mark, the last quarter since the end of june crypto doing well overall. if you look at this specific index, an index of a hundred individual currencies tracked by bloomberg. it is at an almost 7% since then, pretty close to a performer there that is the dollar that is at a percent. gold -- 8%.

gold has fallen in that time, you're not looking at those classic risk havens performing well here. there are interesting questions about whether that will continue on. crypto has fallen this year, did no one make three months a trend. it is something that has not followed -- fallen below that lower bound earlier this year. ed: not a trend necessarily, but we are looking for the direction of travel. somebody you know well who has been tweeting, we can bring up here, the world thinking differently crypto price moves if it is measured events -- against world currency baskets instead of the u.s. dollar. guest: it is a good point he makes, when you saw these massive fluctuations across the world, the crypto crowd asking what does this mean for cryptocurrencies?

if you live in a country where digital assets can be less of a little than your actual currency , in argentina, people flocked to a digital asset in a meaningful way even el salvador. what does the digital asset mean? it means a lot more than if you are living in a much more stable nation. ed: there are dissenting voices, some a lot of than others, jamie dimon ceo of jp morgan, what does he have to say recently about bitcoin? guest: if you are looking at traditional financial world, bitcoin looks like a decentralized ponzi scheme. let's look at what has done, i want to point out as an exercise, we have inflation protected bonds. why does that matter here? crypto has long been pitched as an inflation hedge, for the people that says that as an inflation hedge has on apart, so

has vix. that was a hedge fund favorite this year. both traditional finance and deify --defi sitting at a roadblock of the narrative of what crypto means for people. ed: we just had the merge, what is the next calendar event people looks forward to? guest: you mentioned the merge and ethereum continues to be part of that outperformance in the next three months. we see that same love and other proven stake networks, solano, there is a lot of interesting things that are happening in the eight community. the tendon shall -- tangential assets we are looking at. ed: to lay -- the delay in depositions, they push their

pretrial depositions before the october 17 trial, we will bring that information next. this is bloomberg. ♪

ed: three weeks away from the court showdown between elon musk and twitter, starting october 17th, a delaware judge will side of the world's richest person has legitimate grounds to walk away from a deal from buying the social media platforms. monday was supposed to be a key moment in the lead up to the trial, did not pan out that way. joining us to discuss, elon was supposed to be deposed monday, it did not happen. what happened? guest: both of them essentially are trying to reschedule their depositions. elon was scheduled to be deposed

in delaware, the ceo of twitter was gonna be doing so here in san francisco. in both cases it seems like the timing is not right. we are told, my understanding is that this is not super rare in a situation like this. what makes it interesting, we are three weeks away from the trial. the trial is three weeks from today. there is only so many more days for them to push this thing before everyone has to sit down and share their side of the story. ed: i want to bring up this chart in my bloomberg terminal, i feel like i have looked at it for years. it shows the spread. the current share price versus the $54.20 share that musk originally offered. the idea that is as the spread closes in the current share price gets closer to the offer price, the market indicating the deal will get done. monday was weird, we got the news that the depositions were delayed, the stock shot up and

came down again quickly. there was speculation, it seems, in the market that we might be talking about a settlement behind the scenes. it is not clear. what do you make of that? guest: obviously when two key players push their depositions, as you point out people jump to a conclusion. we have not heard about a settlement. my guest, it if there -- guess if there is a settlement, will come closer to the trial. both sides want to get information from the deposition. they do not want to come to a settlement without uncovering every rock. because there are some a people to have to talk to it seems premature at this point. as you point out there is a lot of people us all that news, thought it was interesting, why are they pushing the depositions? ed: the countdown is on, three weeks ago, what happens next? guest: a lot more of this type of stuff, behind-the-scenes lawyer work.

both musk and twitter are trying to position themselves with the judge there will be a hearing tomorrow to find out who can be deposed and who cannot be. they are still fighting over stuff like that. there is a lot of jockeying for position. maybe there will be a settlement discussion as we get closer. for now both sides are putting together the cases there putting -- they are in the pretrial stage. ed: are you excited for our trip to delaware? >> i am ecstatic. ed: that does it for this edition of "bloomberg technology ," tuesday we have an investor to share the latest on their investment strategy, do not forget to -- to check out our podcast on the terminal, apple, spotify, and of course iheart radio. this is bloomberg. ♪

haidi: good morning.