in the past four months, ibm and microsoft have been working to decrease that.he way they have been doing that is by expanding the data sets they use to train the algorithms. algorithms cannot see what they have not been taught to see. it is increasing the number of brown and black faces along with all of these white ones to do a better job. as of the time we published, sarlier this week, the error dropped. for ibm, it reported it was down to 3.5%, and for microsoft it r dark skinned female spirit however, there is a catch. the catch is that is not these results have not been independently verified, number one. number two, it is not out in the real world. meaning they are doing a set of 150 facialmatch not images to the 7 billion people on the earth or the one million in a certain data set of suspects. emily: there are some real concerns about this technology being used in law-enforcement, the lapd is already using it. it can be used for good. in maryland it was used to identify the shooter and the capital gazette shooting. brian, what is your take on whether th

. >> you talk to companies like ibm and microsoft that have the same problem. what are they doing about it? >> when the report first came out that highlighted this back in february, it found that werer skin females misidentified 35% of the time. but have been working to decrease that in the way they have been doing that is by expanding the data sets they used to train the algorithms. algorithms can see what they have been taught to see. as of the time we published which was earlier this week, the error rates had dropped significantly. there is a catch. resultsh is that the have not been independently verified and it is not out in the real world meaning they are match to theerson or oneon people on earth million in a certain data set. real concerns about technology being used in law enforcement. it.lapd is art using in maryland, it was used to identify the shooter in the capital gazette shooting. what is your take on whether this is ready or prime time and >> -- the government? fort is not appropriate law-enforcement because it is just not there yet. theerent fo

ibm and microsoft going to hold back their facial recognition software until it's perfect? regulators point to come in and say we really do need a set of guidelines? >> i think all of the tech companies are rushing to improve their products. they have an incentive to do this just in the sense of their trying to sell it. microsoft has said it has really dealt with this racial disparity issue. it has dealt with it in its labs and they are not clear how it will work out in the field. -- there really aren't regulations. it could happen in the federal level, state-level. it's still early days for this. carol: interesting story about amazon. the workers there who are facing dismissal can now appeal to a jury of their colleagues. jason: the whole process is raising questions about the ultimate fairness of it. carol: exactly. fascinating story. janerough the process, walked into what she thought was just a meeting with her boss one day and there was an hr rep there. number three choices, one, leave and take severance, number two, go on a performance improvement plan which especially

losses down about 80 points just a handful of components in the green, including apple along with ibm and microsoft a minute so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com approaching medicare eligibility? save up to 15% when you book early you may think you can put off checking out your medicare options until you're sixty-five, but now is a good timeo get thll rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this

and i think you see that very clearly in the microsoft and ibm cases in particular. now, if i were going to discuss particularly what happened in microsoft -- i'm also happy to talk about ibm -- in microsoft, microsoft had a business model which it had used repeatedly, which consisted of the following -- it dominated the operating system and opened the operating system to whoever wanted to use it. and then figured out who were the most successful of the applications on that operating system and then cloned them or mimicked them, usually cloned them -- you know, word perfect, excel 1, 2, 3, and then in ways subtle or less subtle, insured that their applications tended to win. and you could see -- so, that was with ms dos and with windows. and you could see the exact same strategy or the exact same future might have occurred with the explorer as the, you know, dominant platform, so i think it might be a little different from some of the methods you might have suggested, but again, create a clone to be more specific how it happens, create a clone for all the major succes

and can hurt if we dump them. that is nonsense we know many u.s. outfittins wat to do business in china. same for most of the techs like ibm, intel, cisco and microsoft. but, that is a t rex which has fangs. f.a.n.g does little there. facebook hasn't been able to crack the market neither has amazon, nor netflix which stock was up huge today. and alphabet's google. google hasn't been willing to play play. f.a.n.g is going to rally the most because f.a.n.g isn't china. china is now gm's largest market still the stock got hit today just like boeing some are betting that gm is going to be a loser there. if you want to do business there, you need to partner up with a local company they are all in bed with chinese affiliate, they would be cutting off their nose to spite their face another reason why the u.s. can win. another point. now politically, china has a clear edge when you have an authoritarian state, you don't need to worry about public opinion you can take it wherever you want it. president trump needs to keep congress happy or they can roll back everything he has done. economically, i think we have a leg up broke down badly last night with more t

and ibm as well. there were questions about microsoft and google you also talked about the potential for moving some of yours in networking, for example, more into the mid-market smaller customers could show growth. what should we expect to see more growth from in the near future the cloud build-out on other platforms like azure, like google, or moving some of the newer products into the midmarket? >> yeah, overall, we do see that the broader networking vision that we laid out this quarter, we call it the virtual cloud network, and it's becoming a hyperdistributed world, jon, where there is no edge to the data center anymore, and customers have multiple clouds and we extend that vision late last year. we're seeing great response from this broadened vision for networking we see that being a bigger driver in the near term. that's a larger business for us. but that said, the enthusiasm for our cloud products and we announced several major customers now running on the vmware cloud on aws, so great momentum there and we do see that we have interest from our customers to expand our relationships with google,

when you look at ibm's business and then the newer companies, the amazons of this world, investing in things like blockchain, machine learning -- >> we are positive on amazon and on microsoftess positive on facebook and google because of regulatory concerns ibm is where we see the most value. >> let's talk about that here we are in london. facebook and google. european regulators, and microsoft found this out about 15 years ago european regulators have always been tougher and dropped the hammer more than the u.s. counterports facebook and google under juteny do you think the regulatory environment and the scrutiny we're seeing more here will seep into the united states and ultimately maybe hurt facebook and google >> without question. the u.s. will have no option many companies have broken the law and been ignored now the europeans are coming down hard on gdpr. >> are they breaking the law in europe >> many people are saying the eu is ahead on data privacy, that gdpr once ridiculed is exactly the way to go. >> i think as a user, i've been bombarded with a lot of these e-mails about opting out, on facebook, the privacy concerns i don't know the impact yet. i opted out of a

and exercise force. generally speaking, those giants have only prevailed for a particular window. we had microsoft in the 1990's, ibmefore that, and so on. there has always been preeminent technology companies. i don't see anything distinctly different about the current generation. emily: coming from ireland what , do you think of brexit? is it concerning? >> i am concerned by the general trend we are seeing in a number of countries around the world towards more inward looking into more retrenchment. in part because i don't think it is a global long-term trend. it has been a mistake historically to bet against more global integration or to assume there will not be more migration of people, there will not be more migration of cultures, of goods and services on things like that. i don't think things like brexit will change that. emily: you both spent time with president obama. as a trump administration takes things in a different direction, a slide toward protectionism, what are your biggest concerns? >> we benefit from such an amazing set of tailwinds. there has never been more people employed in the u.s. at any time

brexit ongoing and huge, tumultuous scenes just a few yards from where i am in westminster, others such as emmanuel macron of france are trying to attract the same kind of talent. ibm, microsoft in paris for a big tech hub there the prime ministers in a big fight to prove those big tech companies want to be here. >> big, big interview, steve thank you for that pound down four days in a row. inflation tough to get over there. longest losing streak in a month. >> sedgwick does great stuff he's a staple. he's terrific. >>> we'll get stop trading with jim in a minute. dow is up 16 at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, only pay $4.95. fidelity. open an account today. only pay $4.95. that's confident. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done. >>> time for cramer and stop trading. >> $125 billion company with everything involving e-commerce. it's an e-commerce play writ large. i think they can blow away the numbers. that's why the stock has been advancing. there's a com

here's seven big tech american companies that source half of their products and components from china. so hp, ibm, microsoft, intel, apple has sold more iphones in china the last three years than the u.s. apple gets about 20% of their annual revenue from china. the chinese president says china will punch back and will not be forced to eat the bitter fruit. that is a translation a direct quote. as the tension rises between the world's two biggest economies, investors showed the numbers. the nasdaq closed 2%. biggest one-day decline since march. third day down in a row. the longest losing streak for that tech heavy comp. even asia overnight, the markets reacted there. hong kong down by more than 1%. of course, our own bond market, there was this flight to safety in u.s. tenure. investors buy these bonds when they're fearful or they feel less certain of the future. the prices went up so the yields went down. worth noting, the yields have fallen the past four out of five weeks. so neil, what is clear is investors really don't know what to make of it. we have the tariffs and now this idea of blocking direct inve

and warding the contract to a single provider. companies leading the charge includean amazon win article, microsoft, and ibm.pdate. china.up, crackdown on why senator chris coons of delaware wants to get tougher on the world second largest economy. his interview straight ahead. from new york, this is bloomberg. ♪ it looks like china has blocked hbo's website after john oliver rest of the nation's president on his show. i'm with bloomberg news in beijing. i tried to access the hbo.com website and it would not load on my phone. typically a sign that it has been blocked on the chinese internet. word says the page china.ailable across hbo does not offer its own channel in china. instead, it licenses some shows to tencent. that service is not been affected. china social media platform has been blocking posts with john oliver in them. on a recent episode of his show, last week tonight with john oliver, the hbo iconic criticized president xi jinping. china has not been known as a haven for free expression. he has claimed down noticeably on any form of dissent whatsoever. theliver spoke about children's character. i

david: which is what we saw with ibm in the 1970's and microsoft in the 1990's.concerns are hitting america's heartland. alix: and take a look at where markets are headed. s&p futures trying to inch out a little bit of a gain. dollar index also getting some strength in the g10 space. tech continues to lead the way, closing yesterday at a record high. could apple be the next $1 trillion stock? interesting number to look for. this is bloomberg. ♪ alix: this is bloomberg daybreak. here is very stack up market p -- here is where we stack up market pmi. nasdaq futures up seven points, closing at a record high yesterday. can they hold on to their gains today? european stocks of 3/10 of 1%. in other asset classes, you can see any kind of selloff at 18 basis points but nothing like we saw before. euro-dollar a little weaker. cable rate having a nice rally. the u.k. pmi did really well last month and helping with the currency is the dollar. flatter.points, opec tot trump asked add one million barrels of oil a day into the market after the u.s. added -- reinstated sanction

liz: other thing microsoft, ibm, they could step in. china and they moving ahead in this technology? >> they are, china created a strategic support force, that combined their intelligence, surveillance and reco reconnaise under one umbrella. now it is great power competition, the country, they are developing this technology. i will tell you, another company will probably step in. liz: probably. big contract. >> leah great stuff, thank you. come back soon? to this story, cnn contribute oar april ryan backtracking after claiming this president trump was booed at an event the white house yesterday, he was not booed. two, down, back up! our phones are more than just phones. they're pocket-sized personal trainers. last minute gift finders. [phone voice] destination ahead. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet which could save you $400 or more a year. it's a new kind of network designed to save you money. click, call, or visit a store today. liz: cnn contributor ap

and pick up this contract. maybe companies like ibm, microsoft, will they now feel they're under pressure not to do this. t's wrong because ultimately you should be defending this country. >> by the way, china and russia are moving at pace. look at what the pentagon is working on the save lives. they are using artificial intelligence to pick up a nuclear missile rocket launcher in north korea. they believe their hiding their nuclear missiles. pentagon is doing that with artificial intelligence. this should be right in their wheelhouse. but he does praise amazon and says at least amazon cloud computing is collaborating with the intelligence immunity and that's appropriate. ultimately it's all about our security. >> i think bloomberg is spot on with that one. what else do we have? the immigration problem at the border. so bad the feds are discussing military bases to hold children separated from their parents. we will talk about that. a graduate from yale that up with trigger warnings blocking conservative speakers from talking on camera. he's doing something about it. we will tell you what he's doing later

. >>> and take a look at some of the big cap tech losers in today's session. intel is down nearly 4%. microsoft, ibmre. much more on the selloff when "power lunch" returns in two >>> a big down day on wall street as trade tensions hit investor confidence. the dow and the s&p 500 now negative for the month of june dow's on track for its lowest close since early may and it's broken through its key 200-day moving average volatility jumping with the fear index at a two-month high. let's bring in michael, chief investment officer and bruce, chief investment strategist. the loss of leadership groups from technology and financials, what does that say to you? >> well, you know, we're looking at -- and i don't mean to make these sort of all about today's market action and i think this is something we've been thinking about for a while. the trade tariffs are very clearly targeted at the supply chain in technology and industrials and we've been pondering for a long time this two-year sort of large gap growth technology nasdaq leadership that has been really sort of super charge fwd by the f.a.n.g. stocks and t

and components from china. they are names you know well, they are names that are in a lot of tech portfolios, hp, ibm, dell, cisco, unisys, microsoft, intel. s&p 500 tech companies as a group get about 60% of their revenues from overseas. that is the highest foreign exposure of any be other sector in the s&p 500. even apple has sold more iphones in china in the last three years than in the u.s. in fact, apple gets about 20% of its annual revenue from china. the chinese president, of course, saying china will punch back, we'll not be forced to, quote-unquote, eat the bitter fruit. so the tension rising between the world's two biggest economies and investors are becoming more nasdaq. the nasdaq -- more intense. that is the nasdaq's longest losing streak in about two months' time. liz, a lot on the table here, a lot is very complicated with the sourcing, the components parts between the u.s., between north america and asia. in the meantime, back to you. liz: and tech was a leader, deirdre, so the leader is now lagging. that goes for energy too on a day like this. so as we look at the fear that is kind of encompassing the market at the

scale and melissa, those companies that have reached those market cap pinnacles in the past have ended up surrendering that thrown to others as time has gone by, think ibm, at&t, ge, exxonmobil, microsoft cetera back to you. >> thank you very much, dom chu. back in the day when those companies dom listed were the dominant companies, nobody thought, oh, they'll be by the wayside so what will separate apple from becoming those companies. >> the hope is what will separate them and it's time they transition from a hardware company to a software services company. that gives people a stick your ntele. talk about sony the same way. >> reservations about them becoming the service in order to get the valuation they covet the revenues of service have to be north of 25%. >> what's interesting about apple is we're no longer talking about these refresh and the volatilityt comes with them think about fading one of those leadups to that, it's becoming lower amplitude. they basically said you're looking at apple, that means it's a lesich gets it to the higher multiple i'm still along the stock. this was a couple months ago we were still looking at those -- everyone was saying that no one is upgrading

innovation because of anti-trust, because of microsoft, or because of ibm, because of at&t, again, you know, i love humility, i like to be sure about what i'm doing, and try to have as much empirical evidence behind whattime doing before i take action. especially action -- you know, we're not belgium. i love a good economic experiment. i prefer not to do a radical economic experiment on the leading companies on the leading technological frontier in the leading economy of the world. i would at least like a little bit of caution there. >> sorry, sally, i cut you off earlier. go ahead. >> since you mentioned hayek, i think it's worth thinking about, so hayek wrote this essay called the use of knowledge in society. and the premise of his piece, one of the key challenges in society is one of information. that you never really have an entity that can have all the information. and the reason the markets are superior to kind of command and control systems is because they rely on dispersed information. so you have this price mechanism and that's what's doing the work of conveying information. i think increasingly, we're now seeing markets where all of the info

ibm are now negative. apple essentially unchanged microsoft has turned south, intel has turned south, so this seems to be a lot of the technology companies andeep in mind they would have some exposure to a delay in a trade deal or a concern that a trade deal can't happen as soon as expected, technology would be particularly vulnerable and was taking on the chin on the notion the administration was trying to limit not only chinese investment and technology but for a while remember the mixed messages, maybe any country investing in our technology, the administration then tried to come out and say t was not the case, that they were just clarifying this. meanwhile, we're hearing from one fed governor that a gradual path of interest rate rises will reduce the risk of any serious policy mistake. some could easily interpret that as steady as she goes the federal reserve is still inclined to keep rising rates, raising rates i should say in the middle of all of this. it's anyone's idea but all of these are happening concurrently here and buffeting stocks or at least taking them off their higher levels, but as i so often stress here i try not to seize