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

caroline: i'm caroline hyde in for emily chang. coming up, xi jinping's power grab. equities have their worst day in hong kong since 2008. how will tech navigate this new euro? a huge earnings week -- amazon, apple and meta -- we will break down what to expect. after washington's move to -- we delve into the $15 billion delivery market on the brink. we will get into those stories in a moment, but let's get you up to speed with the markets. it was a record drop for u.s. list of shares in chinese tech companies. ed ludlow, you can break down the biggest news. ed: for the golden dragon index,

closing at its lowest since 2013. the market trying to passover and what it means from a policy perspective. it was interesting because traders had turned defensive and what is a key week for earnings. the nasdaq 100 trading at highest level after a second consecutive day despite yields continuing to creep higher. but in the background, this introduces a new story. come into the bloomberg terminal and look at this chart. overnight, in hong kong, you look at the drop on the hang seng and be firmly, chinese technology establishing itself as the laggard. that's the relative performance of the hang seng index versus its peers in the united states. 50% year-to-date drop is underperformance to put it mildly. a lot going on in the new cycle

-- apple responding to a stronger dollar, continuing to raise prices. tesla, and interesting story, cutting prices in china which had a broader impact, specifically for those with business in china because it started to raise concerns about the demand picture. tsmc, the worst performing stock on the semiconductor index following a bloomberg report it has paused work for a chinese startup amid u.s. curbs. caroline: that is an interesting nuance -- the relationship between u.s. and china and what it means for some of those companies that tried to cross the rubicon. articulate, let's look at the chip sector with bloomberg's debbie wu who is usually based in taipei but she is in the united states. your expertise with companies such as tsmc trying to navigate

this new world order and the relationship disintegrating between china and the united states and an international investor, the worries of what this consolidation of power means for companies trying to work the way around. talk us through the breaking story you had about what tsmc is trying to do. debbie: we've seen this set of u.s. export control rules have impacted not just american firms but foreign companies with business relationships with china. what we reported over the weekend is tsmc has stopped production for this chinese chip production because based on the public domain information, they've actually outperformed the 100 chips which are now banned for the chinese market. companies now have two follow u.s. rules like they did a couple of years ago when they

u.s. blacklisted huawei. what's happening now is companies are tightening technologies and we've seen the dutch equipment supplier, asml telling its u.s. based staff to halt services to chinese customers due to u.s. regulations, restricting from the chinese chip industry. caroline: given the news that upended the market, perhaps moving away from such growth tech names, the fact we saw alibaba folsom much, what does it mean for the chip sector at the moment? debby: following the u.s. analysis of this new set of rules, chip stocks have plummeted.

we've seen the semiconductor index fall more than 40% this year due to the new curves and partly due to the headwinds of the chip sector. it's going to be quite challenging for chip companies to navigate this weakening demand and high inflation environment and potential recessions. given the restrictions for the business in china, it is going to be quite challenging. caroline: going forward, are people starting to say these negative headwinds, whether it be a relationship and more difficult relationship being done with china, whether it's the curbs the u.s. put in or a slowing fundamental story happening in terms of where we are in the chip cycle, people starting to say this is priced

in in some way or not yet? debby: i think it's a convergence of these elements, so it's hard to say whatever chips company is taking a bigger hit, but it's more like these different elements are putting different pressure and sales of chips companies around the world. caroline: we are keeping a close eye on texas instruments and intel. meanwhile, turning to the changes and a look ahead to one key player, apple has got its earnings but it has interesting news. talk to us about the inflation apple is serving up at the moment. mark: if you apple services, their main ones got price changes this morning. apple tv plus, apple music and subscription bundles are at the

forefront of their streaming packages. apple music is moving from $10 a month to $11 per month, so a 10% price increase. apple tv plus moving from five dollars a month to seven dollars a month and the bundles are rising between two dollars and three dollars depending on what package you get. up to $33 for the highest end packaging for gaming and news. apple says this has to do with higher costs with licensing related to music and on the tv plus front, the company says there were very few shows that they get go and now tv plus has dozens of shows, still no back catalog but you are getting more bang for your buck which means they are raising prices. caroline: we saw the impact on spotify where some are saying they might pass on their prices to the consumer as well. talk about what we are seeing

from apple numbers this week. the most valuable company is important to us. mark: many believe apple is going to come in at almost $20 billion. it would not be an all-time record but would be fairly significant for a fourth quarter. in terms of overall, we are talking between mid 80 billions to low 90 billions. between 5% and eight percent year-over-year growth. that growth is not going to be as significant as the growth you saw a year ago. that was about the 5% year-over-year. that was covid-induced. but any growth given the current conditions is good for apple at this point. one thing you can attribute that to is the iphone 14, those phones have done especially well with some of the new features. people have been buying those up

and apple got an extra week of sales because they released at one week earlier than they historically do, so you that is where you are going to see the growth in this quarter. caroline: we thank you. coming up, private markets -- how are they becoming more accessible to you if you are a founder? we will chat with one start up leading the way. this is bloomberg. ♪

caroline: let's talk about some of the dry powder andrn it is putting it to work betting on a key platform that's perhaps to allow founders to access private markets and more diversification. the coterie let's investors invested in funds like spacex or stripe and just landed $40 million in a funding round. we want to remind people of your story and why it was born. it was through frustrations you found as a founder. >> i was the founder of a company and we did about 100 million dollars in revenue. i went to apply for a mortgage and the guy said we can't give you a mortgage because you don't have a salary. i realize it's kind of silly. most of the people i know make a lot more money from their assets or equity than from their salary

. probably a lot of people who watch your show. there's a disconnect that has emerged between the way financial guys think about risk and asset allocation and the way me and everyone else thinks about it because most of us make most of our money from anything we do from salary. we recognize -- targeted toward people who make more money from assets than a salary. caroline: you are looking like an individual and saying you need diversification your life. ethan: if you think of a founder, most of their wealth is concentrated in one specific highly liquid asset and anyone will tell you that is not a great way to manage your risk. we provide access to invest in some of the best fund managers in the world like andreessen horowitz and it allows the founder to diversify risk away from just their own company. we provide liquidity, estate planning, we are looking at the

different areas founders need help and where we feel like the banks have dropped the ball, we are building products to help founders alleviate some of the mental pain. caroline: dare i say in this moment where one is a founder, do they want to be doubling down in still private companies given valuations are under pressure? ethan: it is key that their portfolio, in my opinion, it's not just going to be private. they are going to have private, public, probably some crypto. we are not trying to provide advice on how to construct your portfolio. if you want asset -- you could not really invest in entries and these other fund managers prior to the coterie coming around. we are there as an advisory play

more than an advice play. caroline: you are focusing on a very specific sphere of investor. ethan: we target people with between 1 million and 50 million in assets. caroline: wanting to make venture more accessible to those who only have $500. are you looking at democratization to that level? ethan: no. we are focused on a specific band in a specific type of person. honestly the band is less important. it's about how you make your money and what your ambitions are for the future. i think you can get access through titan but we are looking at someone who has a comprehensive set of needs and wants diversification and needs liquidity. any tax planning because they are sitting on an asset that has a thousand x appreciation and they have not done any estate planning.

caroline: a huge check to be written for a total addressable market that is what? how big is that? this is a pretty unique, relatively privileged part of society. ethan: in america, there are 25 million millionaires. we go after people 25 to 45 with between 1 million and 50 million in assets. that's a couple of million people in the united states. the lifetime value of these people is extort nearly high. we are not building bank of america. we are never going to have hundred 50 million customers. we are going after a specific demo and offering specific solutions that will make their lives easier. if we do a good job, they will stick with us for decades. we are trying to build decades long relationships with our customers that will hopefully generate lots of value for them

and us. caroline: how do you stop people checking out having the family office or starting to move on to a friend level of five it wealth manager? ethan: it depends on what they need. if you provide a family office, go use the family office. we are struggling with the solutions relative to what they want. if you are someone who likes to do your own investing more think about solutions yourself as opposed to someone who likes to give it to a family office and sat want some else to manage it, there's nothing wrong with that, it's just not the space we are in. caroline: this is a long-term bed and you are building a business for tech -- for decades . how has the fundraising process been or how has your current outlook had to cool down as the market cools down? ethan: this is my second time around and it's a lot easier to

start a company and raise money the second time around. i also have two cofounders and this is their second and third time around. the market is still open, there still dry powder to be allocated, you just have to make sure your story and substances tight. what we found is some of the stories that were perhaps a little lighter that were getting funded 12 months ago or maybe not getting funded today but the ones with a lot of gravitas are and they are more attractive because the powder needs to get invested somewhere. they can't be sitting on the sidelines and need to allocate that powder somewhere. the market is picking up and a lot of companies are raising reasonably large rounds. caroline: great to have some time with you. the ceo and cofounder of the coterie. coming up, what's the bar for tech earnings? how low has it gone? this is bloomberg. ♪

caroline: this week is going to be busy -- apple, alphabet, twitter -- a huge week for earnings. let's bring in brad erickson. the bellwether almost could have been snap. how much advertising is spent on snap versus meta, for example. brad: that's always the tough part. snap leads us off in the earnings season and the last few quarters, it's safe to say they are not a bellwether. so when you think about the stocks and how they traded on friday, i think snap closed down

28% for the day. if you look at alphabet or meta and the direction those traded, investors are not inferring snap as the canary in the coal mine at this point. caroline: let's dig in on meta. are you anticipating decent advertising commitment, decent marketing expense going through their platform? are you worried about what the apple algorithm has done to them again? brad: we just put out a report where we talked to almost 25 small and medium-size business ad agencies in the last few weeks and what we heard was in terms of overall spending, things got better through the quarter between things like lower fuel prices and consumer package goods becoming more available from an inventory perspective and lower shipping and freight costs. that may have freed up a little budget on the advertiser front.

we heard things directionally got a little better. on me algorithm front and on the positive side for meta, we heard what we call green chutes around the targeting algorithm. we think it is very early. we don't see this impacting revenue, certainly not in q3 and probably minimal in q4. but it was encouraging when we think about meta trying to restore some of the signal they have lost, we think that's a potential tailwind in 23. caroline: that nicely drives us onto the apple conversation. they are raising prices and we are expecting a strong fit of data coming from them more. brad: i hate to be a big disappointment, but i don't cover apple, so i can't speak to that. caroline: what do you make --

what about some of the other social media? apples having such a knock on effect of other players in the field. let's talk about the strength of social media in general and i do believe you cover twitter. are we expecting anything from their earnings or is this a look ahead to what happens if the business is bought? brad: broadly for the social media companies, and we have heard this consistently over the last year, the apple signal -- i hate to sound so absolute, but the apple signal is never coming back. this is never going to change the way we talk about the potential to restore signal, we are not saying do it in the old-fashioned way, they are trying new first and third party alternatives. whether it's pinterest or any of the other social media, certainly youtube we lump in there and you have to talk about tiktok these days. all his companies are looking for any way, be it a first party

solution or third-party to restore that signal. we do expect it to get marginally better but it's just really slow and we are through that time when apple started and not feeling much improvement. caroline: you have amazon at an outperform. what about their advertising impact? brad: when, just going back to the apple thing -- the segment of the economy that effected was small and medium-size businesses and e-commerce vendors. those guys frequently sell on amazon and that has been a huge source of strength. we talked to some of those aggregators and there's a lot of profit margin those companies make. they are surprisingly profitable, so they do have margins to be able to spend and we think amazon is working the

site to not require but force a lot of third-party vendors to become discoverable. caroline: rbc capital markets, we thank you so much for your expertise. a closer look at how tech markets -- from new york, this is bloomberg. ♪

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>> xi jinping -- in its twice a decade reshuffle. a powerful seven-member

committee is led by xi jinping. the others include -- this final lineup has been beyond many analysts most extreme prediction. it's a historic moment because it breaks so many norms from term limits to early retirement from age norms to female representation as well as resume prerequisites. for example, the one likely to become china's next premiere does not have national governance experience. for the first time in a quarter-century, china will not have a woman sitting on its 24 member politburo, make -- marking a major step back in

gender representation. they have showed the utmost loyalty to xi jinping and his policies. critics worry it could present new risk for a lack of opposing voices. caroline: this is bloomberg technology. that was a broad look at the changes in china. now the global ramifications went far and wide. some technology giants lifted in hong kong and new york, absolutely tense after the power grab. the market followed a reshuffle as we heard, but it means a consolidation of control. ed ludlow is here to talk about what were the moves that mattered to you. ed: we talked about the golden dragon index. the hang seng china enterprises index dropping by the most since 2008. closing at the lowest level since 2008.

this was the most severe, biggest drop in reaction to a communist party congress going back to 1994 when the index was first founded. it gives you a sense of the tanks and concern investors have about the technology sector under a third term presidency looks like, under what this administration with new faces lacking economic experience, if not competence looks like for the technology sector. come into my bloomberg terminal and look at this chart which is the hang seng index. at its lowest level relative to the s&p 500 since 2001, there is a concern about the value of the tech sector in china. what jumps out is the data around foreign investors selling china assets, around 2.5 million shares.

that's another record going back to when they started tracking the data. it's a tight schedule with what we south tesla, cutting prices in china and raising questions about the demand in that country. they announced they would raise manufacturing and the analyst reaction an expert reaction to this move, one of the firm reactions was we would not see an end to covid zero and some of the restrictions and that economy. that's a concern for tesla because most recently, 50% of output is coming from shanghai. what does it mean in the strength for the consumer? caroline: shorter term concerns and longer-term concerns. let talk about what it means to be navigating what is becoming less and less global stories and what are meant to be global markets.

the biggest risk at the moment, we had a litany laid out there, but it is -- is it short-term in nature or is it more broad under xi jinping's next decade? >> i appreciated hearing your colleagues talking about the meetings in those terms come how the markets have reacted. what it underscores is there's a lot of uncertainty coming out of this meeting. while a political leadership has been referenced, xi jinping did stack the deck in way that analysts, myself included, did not foresee. we did not think he would take out some a capable leaders not at retirement age, particularly those with national experience overseeing the economy. he did. but his new economic leadership is not formed yet. we have to wait until next spring for that. for foreign investors, those of

us who want to continue to see growth in the china market, we are not sure what direction the chinese government is going to be pushing beyond broad stroke pronouncement at the party congress. that developing remains important. not a focus on reform but a focus on growth. caroline: to be perfectly frank, if you got the risk tolerance for it, they are saying this was a buying opportunity. but from your perspective, is the narrative coming less global? perhaps effecting a chip sector where u.s. and china relationships are dovetailing lower? amy: undoubtedly, the long-term prospects are for more risk, unfortunately. that's much true. we heard that from the chinese government. a real focus over the past week was on the external environment and it being very threatening and dangerous to china.

not that the chinese government was shoring up to do anything aggressive in response, but it was notable that xi jinping and other top leaders focused very much on security issues in an unfriendly environment china has to struggle against. what that means for us is we are looking at prolonged tensions in u.s.-china relations, prolonged self-reliance pursuits in china and, here in washington, prolonged focus on china as a strategic competitor of the united states and so those technology controls you are talking about are absolutely going to continue to grow. caroline: talking competition -- i would call them rumors. at 1:30 p.m. new york time in tandem both meta and snap share prices suddenly took a leg lower. many were talking about the ongoing narrative of whether

tiktok will be able to carry on its current form in the united states. how much do you see that becoming a pedicle football between china and the u.s. and whether it does remain having a presence here? amy: i thing it's going to be a challenge because data, particularly personal information is a rising concern in washington, about china eight 's access to american citizens data and in china about american companies having access to chinese citizens data. it's considered a national security issue. i do think that's going to continue to grow as a problem. today, we saw there were two indictments against chinese spies seeking to influence the department of justice investigation against broadway -- against wolpe -- against

huawei. that's going to make it a challenging environment. caroline: we have a show of how the share price did erode on snap on the day. i'm interested in your perspective. we've been talking about how this has impacted investors. talk about the ceo of a business that has wanted to peg themselves to the growth story that is china and is trying to understand whether that something they really stick to. amy: coming out of the party congress, there are probably ceos and boards that are saying what did we see here? we saw a continuing focus on national security, some norm-busting behaviors of early retirements of capable economic officials and promotions of officials that don't necessarily have a strong national economic background. those are challenges.

when foreign ceos are thinking about the way they are going to take chinese economic developer and the role of foreign investment in the market. we saw q3 numbers drop on monday. they were supposed to be released last weekend it was delayed until after the party congress. while there was some suggestion the numbers were a little better than we predicted, certainly the export led growth is down and is going to continue to be down. within china, there's going to be a focus on consumption-led growth. for the clients i serve and companies focused on the china consumption story, it will remain important but it does depend on the sector under which you operate because there's continued concern in beijing under the activities foreign investors can do in the china market if there is an overlay of

national security concern. that's a key thing coming out of the party congress even though there -- even though it was not tied to foreign investment. caroline: thank you so much for keeping on top of it all. while the government's crypto crackdown in the u.s. -- is it scaring away potential investors or is it the complete opposite? we will discuss that in our crypto report next. this is bloomberg. ♪

caroline: time now for our crypto report. it seems like the recent attention on crypto by the sec and other watchdogs is actually proving to be good for the industry. let's bring our crypto contributor, sonali basak, for more on this. you hear from any executive saying we bring on regulation, we want to be deemed more legitimate, but are investors seeing it that way? sonali: you have to break down what kind of investors. 60% of those surveyed by bloomberg said yes. interestingly, if you look at the type of retail investors, they were saying yes at a greater rate. if you look at the crypto industry at large, you see a lot of divergence in the types of investors more likely to buy crypto over the next 12 months

on the back that. you are seeing more traders saying yes. you do have divergence in the type of investor. but there a huge difference in the volumes you are buying at that level. 60% do say yes. the regulatory party means a lot. some of these investigations are pretty nascent and the things the sec are looking at, whether it is in fts or three errors capital, which is further down the road in terms of the pickups we saw earlier this year that war more blatant and detriment to the market. a little regulation might protect its own people against. caroline: three errors capital, you were experienced in this space if you are going into that area or if you are buying in fts. it's a different type of asset

class then bitcoin. how are people feeling about that as an area to be going into? sonali: i think the difference these investors have felt is about the trading range. they felt bitcoin by and large, most investors thought bitcoin crashed under $10,000. now generally investors are feeling there is a range bound view between 17000 and 25,000 until the end of this year, which is brighter than the summer but still range bound. there's a lack of consensus about how much correlation there is to other assets. that's important because we see professional actors seeing that correlation breakdown. 42% of respondents think they correlation to tech stocks will stay similar, so you see that interested -- interest rate worry still. caroline: i'm a brit sat here

looking at the political occurrences happening in the u.k. rishi sunak was at one point talking about making the u.k. a crypto hub and making sure their regulation was ready for that space. what did that news have for a crypto investor today? sonali: the crypto meme traders are blowing up about it. there are a lot of great videos on him right now. it was only april and he said he wanted to make they u.k. a crypto hub and wanted to put a framework of ground stablecoins recognized as a valid form of payment. one thing i would say is if you look at the actions taken outside of that, take central-bank digital currencies, the u.k. is still only one of 46 countries still in research phase. 26 countries are in development, 50 and pilot programs. so if you look at the cbd seaworld, it is less fast than australia, but about the same as

the united states. but he is a crypto friendly executive. caroline: a crypto friendly prime minister with a rather long to do list. we will see if that winds up near the top. coming up, we are talking the future of the gig economy. an early uber investor is up next on some of the regulatory concerns and how it's coming out. this is bloomberg. ♪

caroline: we are going to have a deep dive on they gig economy which is seeing a rough transition from peak pandemic to a new normal. shoppers going back to stores, inflation hurting everyone's wallets and the orchid value of doordash has fallen by 70%, uber

by 34 percent, uber slashing its valuation for a third time. let's talk about what's in store for the workforce and regulation. the ceo of tusk ventures takes a novel approach and double down and areas going through regulatory changes and hurdles. you help decide what is the best bet or not. at the moment, the erosion of value in these companies, we see a deep dive in go puff, how difficult is it with the changing of how their workers are assessed? bradley: it certainly doesn't help. you've got two different camps. the sharing economies all say should our workers become w-2? we expect operating cost to increase by 20%. business and already tight margins, they cannot afford to

be percent more costs. the unions will say we believe every single person has to be a w-2 employee. the reason they say that is their main concern is members and union paying dues. you can't get dues from someone if they are not paying dues and you can't if they are not a full-time employee. the biden administration has decided that has cited not surprisingly with the unions. they issued a proposed rule a week and a half ago that presumes everyone in the sharing economy is a full-time employee and not a 1099. that will likely go into effect. thinking that the cost structure for doordash or lyft or instacart whenever they go public, you have to factor that in. however, there are other gating

pieces. first, if republicans win the white house in 2024, that rule likely gets rescinded right away. so the actual amount of time it resisted -- existed until it got rescinded will be minimal. the biden administration, since they are picking politics compared to the actual well-being of the workers come they are going to find millions of people who work as contractors are going to resist becoming full-time employees because they don't want to. while they may say of course everyone wants to be in a union, everyone wants to be of you too, a lot of the data so far shows people in the sharing economy really value the flexibility they have over setting their schedule and choosing the work they do and when they work. that has to get balanced against it. caroline: just to interject -- i've heard the lobbying that has been going thick and fast in the u.k. for many that i've covered

over there. from your perspective, is it a useful use of resource that they have to just pay for lobbying in this way? bradley: lobbying expenses are greater than what you believe the total costs are going to be for a converted w-2, then yes, it's a good expense. if you are talking about a toy percent operating increase, your expenses are less than 1% of that. it's not that material. companies have to work on this stuff. caroline: let's go through your list as a vc in this landscape. how high up does the regulatory concern come to you or are you just looking at the broad landscape of tech investing and saying the tectonic plates are shifting? bradley: that's a good question. we are early-stage investors and we look for the same stuff as every early-stage investor. the founder, the underlying technology, underlying idea, the

usual stuff. we asked two more question -- is there a regulatory issue or opportunity that if it were solved could drive growth and valuation and if so, can we help. when the answer is yes to both, that's when it makes sense for us to take the company just lusted and we are going to try to legalize sports betting. we legalize bird scooters. for roman, we legalized digital prescriptions. for us, we need to see a significant regulatory issue to invest in the first place. typically speaking, those issues come at the front end. that impact how we look at it. if we do our jobs properly, later stage investors won't have to think about it that much because we legalized the product, gotten the license, whatever the company needs. caroline: thank you for giving

us the inside track. always great to sit down. meanwhile, that does it for this edition of bloomberg technology. goes by so fast. tuesday, we will have liz young to talk all things earnings. don't forget to check out the podcast where we amalgamate the best parts of our conversation in a unique and easy to digest format. from new york, wishing you well, this is bloomberg. ♪

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