>> when we look at what is happening with the consumer, which is the backbone of the u.s. economy, we are seeing a clear loss of momentum. >> for the deterioration in the labor market, we are starting to get flavor of that. >> the danger is going higher in rates and it lasts for longer than what the fed is even looking for. >> we do not think we will cut by the end of this year, we think 2024. >> it is a hard landing. >> this is "bloomberg surveillance" with tom keene

jonathan ferro, and lisa abramowicz. tom: we have a friday, fed week next week, we readjust. think about the weekend. backdrop, the overwhelming reality is a not stunning but just a good equity market pushing against the bears. lisa: even though you do have a bifurcated picture from the earnings coming out -- we saw yesterday from visa and mastercard that spending is down, consumers are spending less. american express just now crossing earnings, which are up. the expectation is up for this year. hard to find a cohesive picture at a time of such distortion. tom: i looked at the apple dividend stream and share buyback stream -- i will get to that in moment. there is the headline, and american express to boost quarterly dividend by 15%. that does not sound like recession policy purely but you look at intel, and it looks like

recession policy. it looks like a kitchen sinking of the whole affair. so who is the mainstream, the zeitgeist with idiosyncratic stories telling such different narratives? tom: a little bit of a revenue beat with another company that we will get to. our big problem is we are so focused on lake 12 net -- like 12 names. apple. lisa: the big picture here is that people are feeling optimistic, not just about the u.s. but more so international. the thing that stands out to me is the consensus that europe and emerging markets will outperform and can continue to, even though you had a riproaring beginning of the year. that is the question i have for the weekend, when do you know it has gone too far? when does that optimism run into headwind of reality? tom: before the data check and getting to our guest today, looking at sterling, sterling

ascending, dollar weaker as the backdrop. lisa: is it about sterling or is it about the dollar weakening? really, at what point do we have an understanding, especially with all the variables out there, as we have been pointing up with oil, gas, and the war in ukraine. tom: we're looking at the bull market. optimism of 18.88 on the vix, higher yields. two-year, 4.22%. thank you, amrita sen, for her wisdom. 89 darrell's -- $89 a barrel for brent crude. lisa: and talking about chevron and the buyback. looking to next week, apple, amazon, and google all reporting. will that set a different tone? will that said a reality check

for previous leadership of this market and what has been leadership so far this year? u.s. personal income spending and core pce, which is important to understand how much the fed can move away from an north a 5% fed funds rating -- rate. can they do a bank of canada raised by 25 basis points and say we are done? 10:00 a.m., the sentiment survey. we start to feel sentiment among the general population mimicking what we see with natural conditions, mimicking what we see with investors, and people starting to spend more? a push-pull conundrum. tom: u-michigan is one statistic, and then there is another 1, 2 different worlds. lisa: talking about getting laid off from a tech company and not getting counted. but something is adding up to real pain that some people say

has already created a recession that has happened and we can move on. tom: real pain stopping by hermez, whatever it is, canne. i've never been there. anastasia amoroso it's off the gulfstream -- gets off the gulfstream. what did you learn in the wonderful atmosphere of cannes? how do you say it? [laughter] >> first of all, no private jets, no gulfstream, but i learned a lot about private equity. i think a lot of people felt like this was the year to commit , to commit to investing because this should finally be the year we would see a reset lower in private market valuations. if you look at a private market per folio through the first half of last year, it was up 4%. the 60/40 was down 17%. so in the next couple of

quarters, we should start to see does valuations more meaningfully correct. if you are a private equity investor have existing portfolios, you will get those marks lower. but if you are just a plain capital torque now, the net ir's from downturn years tended to be better for private equity. fo people enteringr the space, there is reason to be optimistic. tom: your strategy at icapital, going for bonds and stocks, but to keep it at genghis khan, is there too much money chasing too few avenues? are we drowning in money right now? >> the dry powder for private equity and venture is down, some deployed. if you look at the market size of private markets, it is five times what is available in public markets. having said that, if you look at the valuation reset post 2008

and 2015, 2016, i do not know if it will be the same because the dry powder relative to that point is certainly much higher. i think one of the things likely to happen this year is last year the deals were not getting down until the end of the year because the spread was very wide, and companies looking to raise funds did not want a haircut in valuations, and then haven't equity companies were looking for a deal and not getting it. but now that the last funding route has run out because it was originally 2021, i think it is the time deals will start getting done. lisa: tom raises a great point, there is so much cash out there, and deploy capital, which raises this issue, how do you know when the reset is enough? you say it will not be like 2008 because of all of this money. is it draining the system of liquidity? >> i think they are trying hard. but i think they are being successful. you are seeing a massive reset in public market valuations.

we have across asset look at valuations and rates in fixed income, and in fixed income, it is reset to the cheapest valuations only 15 years. not credit. but if you look at equities, it is middle-of-the-road. think about the valuations that have needed to come down, software, tech, venture. we have started to see a pretty meaningful reset there. lisa: what about in private markets? a lot of it has not been priced, has not been transacted so we do not know. will we see more carnage that changes some of the optimism people have now before they see what happens? >> within private markets, they also have resets. if you look at venture, the reset needed to happen because evaluations have gone to this, and you are seeing 30%, 40% markdowns of some of those valuations. that is a good thing. the second place where the correction is playing out is

institutional investors that have allocated to private equity, think about them, they have not over allocated but have allocated a lot and the private markets, the performance was double the s&p since 2020, so they have to pare act as allocations. as they do and secondaries, they are trading private equity interest at a discount. tom: a layer over in dfw, everybody is back to work in america. what is the spirit in america? is the media overplaying the gloom? >> i did not travel a lot, but domestically and internationally, the spirit is buoyant. you go through the airports and through the lounges, and i think people are gainfully employed and there's much growth to be had. we are wondering, why is there not a softer landing in retail sales? because people are gainfully employed. some jobs may be changing

hands, but the layoffs are not resulting in higher unemployment. lisa: it makes you wonder how people have such conviction. when looking at the enthusiast and, there has been this immaculate disinflation. what about that points? >> you think about next week, and the market is probably severely underpricing with the fed may say. i think they are likely to be more hawkish. the fed is talking about getting to 5% or higher. if you look at fed fund futures, they are not even getting us closer 5%. so that is a dichotomy or near term, i do not think the fed is satisfied with pullback. longer-term, thinking six months and below, we now have durable goods deflation on a month over month basis. i think these layoffs will damp the sentiment on wage growth. in six-month time, i suspect we are not going to be looking at four point 6% year-over-year wage growth. it will be lower.

tom: thank you, misses keen -- mrs. keen, for watching this morning. she says, you more on, it is cr oisette, not croissant. she says my punishment is four days there in july the carlton. >> that will be all right. tom: thank you for that surveillance correction. i am learning every day. lisa: what is it again? go quick. tom: the town? genghis khan. only way i can remember. i will watch grace kelly movies this we can. thank you so much, anastasia amoroso. we have joked about it, but a lot of our guests, including anastasia, seriously on the road and have the pulse of what is out there. i was suggest, more optimistic

than the gloom that has been painted over the last six weeks. these two i think everyone has been optimistic, the past three or four weeks of the optimism has been tangible. a lot of intuit's because circumstances have changed. the weather and with china reopening, it has changed. certain elements of the backdrop. tom: croisette, my word, i'm going down in flames. coming up, a timely interview. andrew balls of pimco, chief investment officer, a terrific perspective, with jonathan ferro in london. stay with us. this is bloomberg. good morning. lisa m: keeping you up-to-date with the first word. i am lisa mateo. there will not be a tax cut anytime soon in the u.k. the chancellor spoke to bloomberg tv in an exclusive interview today. >> we do not have the headroom for major tax cuts.

but if i was going to prioritize where i would like to see tax cuts, it would be business tax cuts. what businesses want even more instability. and inflation is a fundamental threat of instability in the economy, a worry for households, stops them spending. and it puts off businesses from investing. lisa m: push back against u.s. and european plans to subsidize green industry which threaten to divert investment from the u.k. vladimir putin is planning a new offensive in ukraine. the russian president is also preparing his country for conflict with the u.s. and its allies that he expects to last for years. the kremlin wants to show its forces can regain the initiative after months of losing ground. it is hoping to force ukraine and its backers to agree to some kind of truth. the international monetary fund is considering an aid package for ukraine worth as much as $16

billion. our sources say there are still a number of conditions, including endorsement from the group of seven nations. ukraine's government would need to commit to a series of policies. bloomberg reports at japan and the netherlands will join the u.s. in china's access to semiconductor missionary, and that undercutting ambitions to build its own capabilities u.s., dutch, and japanese officials are set to include talks as soon as today. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo. this is bloomberg. ♪

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pres. biden: economic growth is up. jobs are the highest in american history, the number. and wages are up, growing faster than inflation. tom: the president of the united states there talking about where we are on inflation, and it is disinflation. that is a theme for us. we will be putting together federal reserve coverage, look for that next week. it is february 1, the fed meeting, and it will be really interesting. 50 basis points? many people nudging when he

five. am i right that that is the consensus? 25? lisa: yes. tom: good conversations this morning. headline, the vix, 18.84, and we are evermore accommodative on the bloomberg financial conditions index, .35 positive accommodative standard deviation. we are going to look at wars in europe, maybe in the republican party. maria tadeo joins us from europe, and anne-marie joins us from washington. back story, there is a republican soiree today and vote. making headlines is the governor from florida who says, look, it was a substandard 2018, 2020, and 2022. what is the level of anti-trump as republicans gather? annmarie: i think the comments

coming from governor desantis to a conservative influencer, two things, one is showing that he is putting himself up on this national stage to be a really impactful voice when it comes to who is going to be the head of the rnc. he is also saying that they need new blood, he wants a new challenger, and that is an individual, and he says it is because they were not able to deliver this red wave they forecasted in the midterm elections. he goes back and says there are other elections we have failed. should note that ms. daniel was promoted by former president trump. and what we hear from her challenger is that -- in the president of this rnc soiree, as you call it, and this debate and who is going to lead it, if you lose an election, you step down. tom: off the radar for americans

on this friday is the war in ukraine. maria tadeo reporting this morning. i want to cut to the chase. is general in america's different? is hodges in continental europe, germany, worried about tactical warfare, including tanks, in europe? his comments are stunning on the reach of kyiv to go after crimea . is that even feasible? maria: in ukraine, they will tell you that you need to highlight that this will not get solved, this war will not be resolved in a way they can agree with and agree to the terms of the crimea question is not settled. and we agree, when you talk to officials, there is a public statement, and then there is the off the record stuff behind the scenes. the one thing i found is very striking when it comes to ukraine is that they will tell you on and off the record they

believe, and really believe this, crimea longs to ukraine and this question has to get solved. if they do not get crimea back, it will be a pause but will not resolve the question of the war. on the field with the tanks, defensive weapons, they can reclaim them back. the question is, what about their allies? will they agree to this? cry. -- crimea is a sensitive subject for european spirit tom: nobody talks about going to the pentagon and these people with all the brass on the shoulders and how about a young infantry officer who becomes the executive officer, number two, for the second armored vision forward in germany? that was a young been hodges years ago purely someone who very much understands the logistics of war, not just the theory and gamesmanship. as receive vladimir putin doubling down, even if you do not necessarily win outright,

and you see u.s. and germany lining up with tanks and other ammunition for ukraine, what is the risk, and how much has it escalated, of some sort of great escalation here? maria: it depends who you ask. the polish prime minister will tell you that a lot of this is a bluff and that russia feeds off that fear. if you show you are not scared, that potential escalation, then it will backtrack and they will take a different tone. if you show your scared, that is when russia escalates, to open a west that will try to make a move and de-escalate. depends who you ask. jan that, this has been a monumental week from the european perspective. a year ago we were talking about whether or not there would be an invasion. germany was right to send helmets, the only thing they were ready to send. this week, a major shift in the coalition, they have now sent the leopards, massive change in not just german policy but also

european, the scale. it is something that a year ago not a lot of people would have believed. lisa: in the united states, the situation has change the margins in terms of support for some of these efforts. there has been a lot of focus on potential corruption. there have been the firings of a number of heads over in ukraine. but there is a voice, a minority, pushing back against some of the aid. how much is it becoming more mainstream versus still on the fringes? annmarie: it will be more mainstream in terms of having a seat at the table and discussions, because when you have a debt ceiling debate and the fact that republicans want to talk about spending, defense spending may come up and spending in ukraine. this is something we have heard from the ultra right on the republican side and also some on the left. not that they do not want to support ukraine or sent aid, but

they want potential openings for peace talks. what you have seen this week is, what maria was talking about with germany just sending helmets, now sending take us -- sending tanks, we have seen a reversal in policy from the united states. now ukraine are asking for long-range missiles, which general hodges says is the only way to capture crimea. he says capturing crimea is really the only way putin can get out of ukraine fully. crimea is always going to be in for russia to have influence in ukrainian society and the economy. tom: ladies, lovely to have you back. i think this is off the american writer, ben -- off the american radar, ben hot liked it up your this morning. all of the sudden, this is like war from our history books it is not distant anymore. lisa: i think it is something we

get lost in, because the number of casualties are also reminiscent of a war from another era. it isn't the usual kind of technical kinds of bombings and things that are less significant or less sort of hand-to-hand combat in the same kind of way as we are seeing in the ukraine. tom: double surveillance correction, maria was in london -- i did not pronounce it correctly. i think i can get queen victoria street right. lisa: if you are calling it lon-done, you are having other problems. tom: equities, bonds, currencies, what is your focus? lisa: the stock market has been fascinating, the fact that everyday we start on a soft note, and then by the end of the day, everybody is excited. how much can that continue considering we have stories that are not that perfect?

what we got out of intel yesterday, i cannot say enough, yes it is a personal computer story, but this is also a company that has not kept pace with innovations. how do you fully reset for companies like that with the selloff we saw last year? tom: amex, revenue search after record cardholder spending. that is from the keeper of the amex. lisa: it is all for the delta lounge though. seriously. i'm not kidding. ask. tom: amex forecast, a revenue surge. stay with us. this is bloomberg. ♪ ♪ welcome to a new era of flight.

>> bloomberg surveillance. good morning. jonathan ferro is in london. i am tom keene. is he on his way to manchester? >> i think he is in london. >> you have to say london. that's a saturday night live thing. >> nobody says that. >> good morning. if you choose -- futures are at -11. accommodation with the bloomberg's financial commissions index. this is coming like a train. brent crude is 88 .65. that's the story beneath the story the summary. >> you're seeing that in gasoline prices and with this question around how much it will

you will be ongoing rally we have seen in energy stocks, and a lot of people are saying we are seeing the beginning with china coming back online. >> off the radar, a lot of thoughtful modes into the weekend about japan in the pacific and mobile sphere as well. that is a source of reading this week. what are the ramifications of 125, 120 strong yen. what does inflation mean for the people of japan and their behavior as you look up to the pacific rim? that is a mystery. >> as well as what the bank of japan will do. they say they highly and strongly recommend that japan normalize their interest rate policy, and everyone said thank you. >> we will of course have some leadership there, we hope, as well. >> let's get some specific names. >> let's dive into it. >> for the next hour. >> we have been not going deep

into intel, but i look at the 10% drop, free market, and it is not dragging down everything with a. you are seeing a selloff in micron and qualcomm and other chipmakers, but intel has a specific story with pcs. it was one of the worst ever quarterly forecasts, partly because of the personal computer sales. >> i don't buy it. right now they are 54% off of their 2020 p. this is a slowdown of granularity. they love to say quarter to quarter baloney. they're getting their clock clean on innovation. amd is cleaning their clock. that is my take. >> a lot of people would agree with you, as well as in-house chip acres and thinking apple. i'm looking at hasbro saying they will cut 15% of their work or's after a disappointing holiday shopping season, because

kids just use their devices and don't play with real toys, but i'm wondering if this is the sort of zeitgeist shifting out to the broadening of job cuts. buzzfeed with a similar tone. those shares popped 30% because they are replacing a lot of their reporters with chat and other artificial intelligence. >> help me with this? this is like paul sweeney land. buzzfeed -- let's be collegial. they bought me once some drinks at a bar. buzzfeed has been struggling. are they going to lay off journalists? >> they're going to personalize certain post for people and quizzes and some of the content they put out, using the artificial intelligence. the reason i find this interesting is that buzzfeed is its own story, but there is a product notion of what artificial intelligence can do.

this ai passed the bar exam. >> the medical and national board, which i tell people is the equivalent. they passed all three levels read >> am i going to be replaced by ai? if it can do a better job, great. but what will do the for workforces. this is a new way that has not been established, moving forward. >> is there anything else? >> that's it. >> there we are. >> give me one more. >> let's go to american express. i think it is a different story than visa. visa and mastercard are seeing a slowdown in spending. american express is seeing a sharing in forecast. it is an expectation, and i was joking, how much is this the delta lounge, but with the lines lighting up, it is in agreement. it works for both of them and drags and customers to american express and delta. it brings in billions of

dollars. >> these earnings will continue with earnings next week as well. when she speaks, the fixed income world just stops. it is the heritage of society general. they own the france math and derivative science fields. help me. we are talking about derivatives right now which is calculus, and rates of change. what is the rate of change story in the bond space this january as we see a bull equity market? >> the biggest rate of change is at the end of the air, coming into this year. we haven't seen bonds move meaningfully higher or lower from around 3.5 percent level in 10 year yield spread for the most part, we are stuck here. part of the reason is because fundamentally, on sare rich, relative to fundamentals, and then you have a story where a

tremendous amount of demand for bonds, and option stats, they are seeing strong demand with a variety of investors. the cash is being put into the bond market. >> we have spent a lot of time on issuance ideas. if there is a shortage of bonds, that is what sir john templeton would've said yield -- years ago, what would happen over the space of this year? >> i don't think there is a shortage of bonds. i think there is issuance coming from corporate bond world. we have seen issuance in treasuries. if anything, the call going into the spring timeframe is that treasury will increase its coupon issuance sizes because deficits are continuing to try. we have to wait and see because of the debt ceiling. broadly speaking, there is a decent amount of supply coming into bonds. not just in the united states,

but also in europe and the first quarter. there are a lot of bonds out there to be bought. that is why we are expecting modestly hired -- higher yields. that is not the case. it is a tremendous amount of demand and people are willing to knock off at 3.5%. >> how long will this last? this optimism pervading every asset class? >> the data for the most part has been mixed. on the positive side, when you look at the data from yesterday, for the fourth quarter gdp, there is a decent amount of momentum going into the fourth quarter, and you are looking at the employment picture that is extraordinarily strong, even though you have a lot of news about layoffs in the text. look at the jobless claims. that tends to be a leading indicator of the jobs market.

in this environment, the market is actually, in my view, underpricing this risk of price. perhaps there are two hikes being price for that half of the year, and as early as july, or september, of this year, that is a trajectory that doesn't make any sense. inflation is expected to remain high and sticky. look what happens in japan. we saw an outside sprint, relative to consensus on inflation. there is always a possibility that we do get those volatile inflation threats, and the fed has to respond. >> what is the readthrough to the market? what disruption will there be if the fed surprises on the upside in a rate hike. what if they indicate they will go further than people are pricing and? how disruptive is that? >> it would be disruptive. i think that is why they tend to stick with market pricing.

they will find a way to communicate more than what the market is pricing in, and it will adjust. but broadly speaking, i think that a 25 basis point hike next week would make sense, and now that there is a basis hike in subsequent meetings, i don't see them stopping or pausing anytime soon like the bank suggests they will. at this week's meeting. >> how does the dollar play into this? that might be a different story than what people are pricing in there. >> i think the dollar has come off read it is very lofty. broadly speaking, you are looking at a dollar versus the euro. you look at the ecb, and it is poised to hike rates for the remainder of the year. our economists are expecting that the ecb will raise rates up

to 3.75 percent. broadly speaking, the euro, the dollar, could come under pressure. the bank of japan is starting to adjust its why cc. i think the dollar is definitely piqued. i don't see a precipitous decline, but a gradual decline as other banks catch up on the policy front. >> thank you. i was shaking my head there as she talked about that. i just have to go back to maynard keynes paraphrase of the facts change, i change. what will central bankers do amid a legit trend of disinflation if that occurs? >> they will adjust. >> they will be steadfast and just raise rates. >> i wish people could see that. charge forward. >> it's not going to be in con, but paris. he's going to pull up to madame lagarde and say what?

>> this is the reason the market is betting against the fed, but more the fed than the ecb. saying you will not be able to do it because the facts are changing and you haven't realized it yet. >> i think a lot of people are betting on that. >> to turn -14 right now, what is important is that we get excited for the weekend, and next week, with the ed show on wednesday. >> it is always on wednesday. >> tuesday is when it begins. >> surveillance correction on friday. down in flames, thank you, taylor. she was in a law school library. i didn't know they were open at this ungodly hour, and thank you for emailing in and telling us that check -- chat gpt past eight classic law exam. not the law exam. the bar exam. >> my favorite part of this, i

googled when i was slapped down for my mistake, and chat gpt did not pass eight all exam, but the average was c plus. this is important because this is the same as the doctors boards, and it is a barely pass. i don't know what that means, but do we want your kids playing with this? >> i think a lot of people, a lot of kids are using it for their exams, and using it for their essays. it has been a real issue. >> it is un-american. you'd better not use cliff notes. >> keeping you up today with news from around the world with first word. i'm lisa mateo. dismissed calls for tax cuts. in an exclusive interview, jeremy hunter said we do not have the headroom. he also pitched britain as a hub

for high-tech industries and innovation. >> i think we have the opportunity with our universities, our financial services, and our technology strengths, to be a silicon valley. >> delta pushed back against u.s. plans which threatened to divert investment from the u.k.. it has been almost a year since the invasion that vladimir putin figured would be over in weeks. now we have learned that the russian president is planning a new offensive in you. he's also bracing for a conflict he expects to take years. the kremlin wants to show that its forces can regain an initiative after months of losing ground. the idea is to force the ukraine to force a truce. a house republican is considering a short-term extension of the federal debt ceiling until september 30. that would give them more time to resolve an impasse with democrats, but it is not clear if the democrat-controlled senate would agree.

for now, accounting maneuvers could prevent reaching the limit until july or later. more losses for asia's richest man. the selloff of a corporate empire accelerated on friday, raising $50 billion of market value in less than two sessions. the fallout from a report by hindenburg research has investors keeping a close eye on the 2.5 billion share sale by his enterprises. the group disputes the allegations of corporate malpractice. global news, on air, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo. this is bloomberg.

>> i think there is a hurdle for the market to get through, which is a downward adjustment to the first half of 2023, calendar assumptions, on topline

estimates, as well as bottom line, which means for compressions and margins. >> a huge responsys to liz sanders and charles schwab. she was really on fire there about this audit earnings season. to me, and isi will sum this up beautifully on monday, and i'm looking forward to that, but i have never seen an earnings season where there is a mystery to the now and an even greater mystery out of a conference call. no one is looking at q3. >> i love the discussion around intel. >> they are kitchen sinking it. they are saying it will not be this bad. the tenor of conversation has a benefit of the doubt. >> we are always spinning forward with important technology earnings next week. we are focused on what we hate to focus on. facebook. but a senior technology analyst

from bloomberg technology is with us. i need to take all of your heritage and history. i don't buy the short-term analysis of intel. they blew it and innovation, and in intel forward technology in seven nano meter blah blah blah. how does apple and others avoid being the next intel? >> there is a share shift going on, and i think those shares are taking shares from intel. i think the benefit of the doubt that people are giving to intel is the pc market is really in a bad shape. you are seeing a 30% decline in volume, and if the segment fell, there would be pricing pressures, and they are doing as much as they can to dump the inventory comic but --, but at the end of the day, not only are

they losing shares, they have not finished figuring out the process catching up with pfc., and that is what worries me about two years or three years after. can they recover, because you need a process. >> with immense respect, with an engineering standpoint or operational resource, whatever, the fact is, intel blew it. it is irrefutable. how does apple within a 13 bionic chip, how do they not become intel five or 10 or 15 years from now? >> you have to keep waiting, and you need a semiconductor that talks to the manufacturing side of things. intel manufactures it's only chips, and it is a large manufacturer, and it is behind in terms of the technology

needed to manufacture the latest cutting edge chips. apple can go to whoever they want. they could come back if they catch up to dmc, but they are behind in terms of manufacturing, and they have an advantage. they could go to whoever they want in terms of manufacturing for it whoever has the lead. that is what they need to do because they are the largest manufacturer in the united states. >> help us understand this signal from the idiosyncratic story. what is the signal in terms of demand for certain devices, like personal commuters -- computers versus apple, and on a broader level, computer and cloud spending, like amazon next week? >> i think pc's as a personal overall consumer device is going down. there is no doubt. that is what we see on intel shares. pcs are not that important anymore. it is smart phones and other types of devices moving forward. that is the problem they have to

solve for. they have to expand the industry. they have a segment, but they have to do it on a much bigger scale, as well as industrials and other parts of the market where they use their chips, and pcs are shrinking. that is the other thing that intel needs to focus on. >> as we look forward to next week, we have seen some pictures with respect to cloud spending, and i'm curious what the signal will be from amazon, saying they are going to sell offices as they look to raise money. they are cutting some of the staff. how much is tied cloud computing. one of the drivers of growth underpinning big tech in the last couple of years? >> the amount of data is going around us. to process that, you need computing capacity. even with a temporary pause, which i expect for the next couple quarters, things will rebound and you will need more

cloud capacity. you will need more semiconductors and chips, but you will not need cpus, and that is the big difference. the world is going to custom chips. that is what apple has shown us. you will need more of that. >> next week, i have been stunned. i did math on the bloomberg, and i never would have guessed this. talk about a face plant from facebook. the intel drawdown from three or four years ago is a -54%. meta-is that it? >> is not a cheese. >> velveeta? >> you don't put it on bread. >> no vita down 60%. what is zuckerberg going to do when he wakes up that he's done and intel? what are you listening to further in -- earnings next week. the stock is down 60%. >> it has rebounded 50% from the

lows in october, so i guess you could look at that in a different place. it is down 60% from its highs, and look, at the end of the day, a social media company is about engagement and engagement and engagement. the fact that they are losing engagement on the app is -- and instagram seems to be losing engagement, and you have added pricing for vendors. that is where the focus will be on engagement. if they can turn that around and catch up to tiktok, get off the issues they have had with apple privacy changes, i think that will be the key point for the near term, and beyond that, the vr strategy will talk about how much losses there are for the next two or three years when it comes to a reality lapse. >> we are so advantaged, and we hope all of you on tvr advantage with bloomberg intelligence on the tech space, and i know mark

gurman is on apple as well. pierre from kraft foods says we are the product of velveeta. >> get out of here with that. thank you for that. i appreciate it. exactly. >> bellavita -- have you had that cheese as a child? >> i did not. well, no. i had kraft macaroni and cheese after school with my brother. we poured two boxes in and we'd take two spoons and we would eat it before dinner, and that would be a snack. >> that is a snack. >> exactly. with all of the earnings coming up, this will be the true test and question of what narrative we can actually sell, heading into the remainder of the year. in some ways, tech set the narrative because it is the main driver of what we keep seeing. if that fades, what will pick up the slack in the near term? >> dan isaacs joined us this

week, and he is like a pinyon it because he is the uber full on technology. but he is deserved to do that because he has pounded out xl spreadsheets. his basic take this morning into next week -- look at what they are saying. microsoft numbers go up read they creator over the worry, and the stock, in the last couple of days clawed back to some sense of optimism. there scale -- there level -- they are above earnings. i will call the 242 down to 232. down $10. closing at 248. that is the approach we are seeing. >> that is why some people are saying a number of these tech companies will do the kitchen sink. they will lay people off. perhaps they don't need to, but is a good excuse to coal the herd, and we have one viewer writing in that there are

multiple kitchens in intel to go out. >> i hate -- that is failed management. when everyone talks about kitchen sinks on the radar. that's all there is. it is a free cash flow negative. >> how much news can you put out there? >> we had another correction because we are doing well today. >> we are crushing it. >> bill vida doesn't need to be in the refrigerator, and -- bellavita doesn't need to be in your refrigerator. it is stabilized. it is probably not really related to anything that other people would identify as food. >> ipo memory of peanut butter. >> you had an amazing childhood. there was a scarred childhood. jon ferro will save us. good morning.

>> i think there is going to be some significant aspects that are going to stop showing. >> this is about taking advantage of >> opportunities after last year. >>are we able