September 25, 2025 • 35 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
European diplomats warned the Kremlin this week that NATO is ready to respond to further violations of its airspace with full force, including by shooting down Russian planes, according to officials familiar with the exchange.
At a tense meeting in Moscow, British, French and German envoys addressed their concerns about an incursion by three MiG-31 fighter jets over Estonia last week, according to the officials, who spoke on condition of anonymity as the talks took place behind closed doors. Following the conversation, they concluded that the violation had been a deliberate tactic ordered by Russian commanders.
Russian officials have denied their planes crossed into Estonian airspace and insisted that they are not trying to test NATO. They said that a separate incident when drones crossed into Poland was the result of an error. Kremlin spokesman Dmitry Peskov this week said Russian military flights are guided by international rules.
NATO’s eastern members have faced a series of violations this month that have posed an unprecedented test of the alliance’s resolve at a moment when Vladimir Putin is stepping up Russian attacks on Ukraine’s civilian infrastructure and US backing for Kyiv is wavering.
President Donald Trump this week urged Ukraine to win back all the territory captured by Russia “with the support of the European Union” and defined the US role as selling weapons that allies could ship to the battlefield.
Today's show features:
- Bloomberg Economics Defense Lead Becca Wasser on NATO’s plans to respond to incursions from Russian aircraft
- Cristiano Amon, CEO and President of Qualcomm, and Bloomberg Tech Co-Host Ed Ludlow, on the global semiconductor business and supply chain
- Rob O’Hare, Chief Financial Officer of Affirm, and Bloomberg News Senior Editor Nina Trentmann, on the health of the US consumer and how US monetary policy affects business
- Bloomberg Intelligence Global Equity Strategist Gillian Wolff, discussing the Thursday trade
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business Weekdaily,
reporting from the magazine that helps global leaders stay ahead
with insight on the people, companies, and trends shaping today's
complex economy. Plus global business, finance and tech news as
(00:23):
it happens. The Bloomberg Business Week Daily Podcast with Carol
Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
It is Bloomberg BusinessWeek Daily. That is Carol Masser, I'm
Tim Stanebeck. A story that we're following closely, and it's
a Bloomberg exclusive, Actually, Bloomberg obtaining exclusive details of private
discussions between European and Russian diplomats. European diplomats warning the
Kremlin that NATO is ready to respond to further violations
of its airspace with full force, including by shooting down
(00:53):
Russian planes. Russian officials have denied their planes crossed into
Estonian airspace and insisted that they are not trying to NATO,
saying Russian military fights are guided by international rules. I
want to bring in Becca Wasser, Becca's defense lead for
Bloomberg Economics. She joins us from our Washington DC bureau. Becca,
what would it mean if NATO would respond in this way.
(01:14):
I mean, isn't that the entire point of NATO to
respond collectively if there is such an incursion.
Speaker 3 (01:23):
Thanks so much for having me today. I think you're
exactly right. NATO's core focus is for the alliance to
essentially treat an attack on one to be an attack
on all. What we are seeing here is not necessarily
an attack, but rather incursions that violate sovereign airspace, and
so what we are having is a collective response. It's
(01:44):
just not necessarily taking overt military means. What I think
we have seen today with this scoop that Bloomberg News
had is a warning from NATO and NATO allies to
communicate that should Russia continue to violate NATO airspace, there
(02:05):
may be repercussions for those actions. A core part of deterrence,
which is what NATO is all about, is trying to
communicate to someone that their actions have consequences. And I
think that's exactly what these NATO allies have done today,
and they're trying to make it so that there isn't
a potential escalation or any accident that could spiral further
(02:27):
and lead Russia and NATO into conflict.
Speaker 4 (02:31):
So.
Speaker 5 (02:32):
US part of NATO, I mean, so I am curious.
We have certainly seen from President Trump saying that Kiev
in Ukraine can win and that they're in a position
to fight and win back. Specifically, it just to be fair,
President's got kind of back and forth in terms of
his support of Ukraine or also support of Russian President
(02:56):
Vladimir Putin. So is the US all in on this
and support sort of NATO?
Speaker 6 (03:01):
All in one hundred percent?
Speaker 3 (03:03):
So the US is a founding member of NATO and
therefore has said that they are all in and that
they will ensure the security of NATO and the NATO Alliance.
That said, if you are looking at President Trump's comments,
he makes it very clear that he sees NATO likely
(03:24):
to be a European project. So, while the US is
part of NATO and has reaffirmed many of its collective commitments,
there is this emphasis on European nations doing more, and
within that the idea that the rest of the alliance,
now that they are spending five percent of GDP on defense,
are going to be able to step up and take
(03:47):
on the lion's share of the burden. And I think
we've already seen that in the initial response to these
airspace violations, NATO has stood up Operation Eastern Century in
order to deter any further incursions, and the US has
not contributed additional forces or equipment to that. We're also
(04:08):
seeing something very similar play out as it relates to
President Trump's comments about Kiev being able to fight Russia
and take back territory that it had previously lost during
Russia's invasion of Ukraine.
Speaker 7 (04:22):
Yeah, that was a surprise develement this week.
Speaker 3 (04:25):
Absolutely. I think fundamentally what it really means is that
there is no change on the ground is the US
were not to step up its military aid, and we
don't see any indications right now that the US is
planning to do so. What is happening is that the
US is willing to provide weapons, but through NATO and
(04:47):
only if other NATO allies will pay for those weapons
to be sent on to Ukraine. So, absent any change
in the provision of military aid, both equipment additional intelligence support,
I'm potentially taking some of the training wheels off of
long range strike capabilities. There probably isn't going to be
the ability of Ukraine to be able to take back
(05:10):
that territory.
Speaker 5 (05:11):
Hey, listen, Becka. One of the things we want to
ask you. You're our defense lead for Bloomberg Economics. You
led studies in wargames for the US Department of Defense
at the Center for a New American Security and the
Rand Corporation.
Speaker 6 (05:24):
What can you We're switching gears a little bit.
Speaker 5 (05:27):
But there is a story that has definitely popped up
high on the Bloomberg terminal, and it has to do
with the Defense Secretary Pete Hegseth summoning top military commanders
for a meeting early next week. Apparently has not talked
about what this meeting is about.
Speaker 6 (05:45):
What do we know? What are we hearing? How unusual
is this?
Speaker 3 (05:50):
I think you've hit the nail on the head. It's
quite unusual. This is something where no one really knows
exactly why everyone has been called to back to Shington, DC,
why they're all going to be meeting at once. I
can't think of a single moment in military history where
every single general was located in the same room as
(06:10):
the Secretary of Defense. What senior leadership?
Speaker 5 (06:13):
What does this mean? How many generals are out there?
And are they been pulled from posts around the globe? Like,
what are we talking about size and scope here?
Speaker 3 (06:22):
We are talking about hundreds of people. So we are
talking about some of the senior leaders in the Army,
the Air Force, the Navy, so every military service. We
are talking about the folks who are currently leading operations overseas.
We are talking about people who are based at NATO,
(06:43):
at European Command, at Central Command. We're talking about everyone
coming from all over the globe to meet in one place,
all at once. Wait, this is truly unprecedented.
Speaker 6 (06:55):
I have to ask, so, who's watching everything?
Speaker 3 (06:59):
Well, the good news is is that the US military
is highly well trained and highly capable, and there's going
to be a lot of command staffs that are going
to be doing a great job holding down the fort
wherever it is that they are. So there is going
to be oversight. But what won't be there is some
of that guidance that you have from some of your
(07:20):
top leadership and your top military officials to ensure that
things are going according to plan and according to the
guidance set forth by the Secretary of Defense and the
Department of War.
Speaker 2 (07:31):
Perhaps it's a question about organization and what Pete Haigseth,
the Secretary of Defense, wants the military to look like.
Just in the last thirty seconds that we have with you,
we know he's made some changes at the top. He's
fired some long standing members of the military. He's done
some reorganization. How would you characterize the image that he
wants to portray.
Speaker 3 (07:54):
The Secretary of Defense has been very clear about what
his priorities are and how he wishes to remake the
US military in that image. One of his top priorities
has been, in his words, lethality. But lethality has not
been well defined. Some people think that it focuses on capability.
Others tend to think that it focuses on military readiness
(08:17):
as well as the way in which the US military
presents itself. Ultimately, I think the Secretary is the only
one who knows truly what he means, and perhaps maybe
this meeting is an opportunity for him to communicate that
more broadly.
Speaker 5 (08:31):
All right, interesting, staff, Becca Wasser, thanks so much, Defense
lead for Bloomberg Economics, joining us from our DC bureau.
Speaker 2 (08:37):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (08:45):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us Live weekday afternoons from two to five e's during it,
listen on Applecarplay and Android Otto with the Bloomberg Business app,
or watch.
Speaker 6 (08:57):
Us live on YouTube.
Speaker 5 (08:59):
We're going to stay on the tech because we did
have some headlines involving TikTok.
Speaker 2 (09:02):
Yeah, Oracle, Silverlake and MGX will be the main investors
in TikTok. This according to CNBC's David Favor, who reported
this on air. He cited people familiar with the matter, Oracle,
silver Lake, and MGX. We'll have a combined forty five
percent ownership of TikTok. That's according to Favor. We'll getting
shares with Oracle right now, Carol down about five point
eight percent.
Speaker 6 (09:20):
All right, we're talking TikTok.
Speaker 5 (09:22):
We just talked about a possible Intel Apple kind of
tie up there with our mark German. We want to
stay again on really the tech world, and even that
tie up or possible tie up. We've got the head
of a company that's one of the world's biggest sellers
of the chips at the heart of mobile phones, including Apple,
which is its second biggest customer at least according to
Bloomberg Data. Great to have with us, Christiano Aman he
(09:44):
is CEO and president of Qualcom. He joins us from
the snap Dragon Summit in Maui, Hawaii, along with our
b Tech co host ed Ledlow, which you can find
on BTV every day at eleven am Wall Street time
at out there in our San Francisco bureau. Gentlemen, great
to have you both, He on Bloomberg Business Week Daily.
Speaker 6 (10:01):
Christiana, I want to start with you.
Speaker 5 (10:03):
I got to ask you Apple, is, you know, according
to our data, your second biggest customer. What would a
possible Apple Intel tie up mean to you?
Speaker 8 (10:12):
Guys?
Speaker 4 (10:16):
Look, there's there's no relationship, and actually it has been
widely reported for years now that over the next few years,
I think Apple will stop, you know, getting chips from Qualcom,
and the company has really moved on on not only
what we're doing within the Android ecosystem, but we're now
(10:36):
in PC's and automotive, in industrial and robots, we're even
into the data center. So Qualcom, it's it's a different
company right now. We continue to execute on this strategy
and there's really no relationship.
Speaker 5 (10:48):
But in terms of a tie up, do you think
that's even something likely that there is some deeper relationship
between those two companies?
Speaker 4 (10:56):
The way I think about it, and like, I don't
know details, but I can only see two possible angles.
One possible angle is Intel continue to invest to become
a foundry in decades?
Speaker 3 (11:09):
Uh?
Speaker 4 (11:10):
You know, as we are a fabulous company, we welcome
more foundry. Today we manufacture our chips with TSMC, with Sansung,
And if Intel has the capability to become a competitive
founder in America, we're very happy and we and we
will look at them as a manufacturer. As far from
a product standpoint, I can't really see a connection because
(11:33):
Apple have their own.
Speaker 6 (11:34):
Processors and we want to get onto other stuff.
Speaker 5 (11:37):
One more question, though, how are you feeling about the
government investing in Intel do? I don't know would be
fair for other companies, even a qualcom to say, wait,
you know what about us?
Speaker 4 (11:50):
Look, my understanding of this is there is there is
an overarching strategic topic which is manufacturing of semiconductors. And
I think we know and it's been widely reported that,
you know, Intel head struggle to compete with companies like
TSMC and san Fan. So anything that is driven towards
(12:15):
enhancing the industry manufacturing capability, especially in in the United
States or even other places, so we have a more
geographically diversified manufacturing. That'sactly good news. We're looking at the
big picture.
Speaker 8 (12:31):
Christiano, like, the thing definitively that's changed is the landscape
in both PC and mobile. But I really want to
start on the PC bit. I look at what's come
out of MAUI Generations generation from a year ago, and
what's really clear is you want to push even deeper
into Windows based PC. Could you just explain how the
(12:51):
generational updates on the tech help you do that and
why it's important.
Speaker 4 (12:58):
Yes, I wish you're all here with us.
Speaker 9 (13:01):
This is actually we wish we were there also, Yes,
this has been This has been day three of a
lot of announcements or the Chip announcements.
Speaker 4 (13:13):
And one thing that we're actually very proud. I think,
as I said you know earlier to Carol, I think
the company is diversifying. We're building products for many different
industries and PCs is one of the growth of vectors
of the company. So we announced our second generation PC.
It was we just entered this market and in our
(13:34):
second generation, I think people are seeing one of the
biggest leaps in performance from generation to generation. We have
forty percent improvement in the CPU, eighty percent improvement in
the GPU, and we actually have the very first processor
in a thin and light laptopping running at five gigahertz
of clock frequency. And but the real news is the
(13:57):
amount of AI performance. I think they turn position of
phones and PCs to AI is happening and those or
those chips are designed to them.
Speaker 8 (14:07):
Christian, I don't want to make statements because, like I'm
the journalist, and as you know, I love to ask
you questions, but I go very deep on what's happening,
and so like there's an acceptance that this is edge
technology that's deployed in the real world, but I kind
of want to hold.
Speaker 7 (14:23):
You to how it's going.
Speaker 8 (14:24):
You know, in February you basically said that in really
specific category, you know, Windows PC price to eight hundred
dollars and above. I think you said you had ten
percent market sharing that and I'm looking at the specifics
of what came out of MAUI in the last three days.
Do you have an update on the ownership you have
in that market or what this latest gen of chipsets
(14:45):
will do to push you deeper into it.
Speaker 4 (14:49):
Yes, this is a great question. We are you know,
as we're new in this market and it has been
you know, it's it's actually we can leverage a lot
of technology exactually a creative I think to Qualcom. And
we're tracking to what we said. We actually only launched this,
you know, u cepcs of our chips in the United
States in the top five European markets, and we're tracking
(15:11):
about nine percent right now. I think our projection was
by twenty twenty nine to get to about twelve percent.
Very reasonable. But what is exciting right now, and that's
I think in your question, is the edge AI transition
is happening. Actually, the foundational models now are being designed
(15:31):
so they have cloud and edge working side by side,
and that is exactly creating an opportunity for us to accelerate.
And it is reflected a number of designs we actually,
you know, a while ago, just a couple quarters ago,
we talked about having one hundred designs across all the
major PC OEMs, HP, Del Lenovo, Acer, sou Sanson. Now
(15:52):
that number is significantly higher and we're seeing the excitement.
Speaker 8 (15:58):
To Carol's question, I think it's fair like the Nvidia
Intel Products collaboration puts this emphasis back on eight X
eighty six against ARM based chips. How are you tracking
the penetration of both in the market. You know, if
you if you're going to react to that in video
and Intel deal and how it changes the market, you
(16:20):
must also be tracking it in that context, you know,
how you are pushing into that territory.
Speaker 4 (16:28):
Yes, when you actually and I'm gonna I'm going to
quote you when you just said, when you actually dig
deeper on it, And it was interesting. Actually when that
announcement happened, it was interesting. We were slightly up. It
was kind of neutral, too positive to qualcom, and we
saw I think the market stock reaction on arm on,
(16:48):
AMD on and an Intel was up. And the way
we actually look at this, we're incredibly excited because what
he basically means is, I think it's Intel sending a
message that their integrated GPU and their AI products are
They're not going to likely not to continue with that
(17:09):
because that's what the market is seing it's going to
be in Vidia. So then as in Nvidia comes in
to the integrated GPU market, combining their GPU with Intel
X eighty six, he started to bring AI into the
PC market. And that is the moment we've been waiting
for and I think that's what we do. And I
think the Qualcom DNA is anything that is battery power,
(17:32):
is high performance, low battery life, and a lot of AI.
That's that's where we want the market to be.
Speaker 2 (17:38):
So Christiano sell us on this moment because I think
a lot of people's experience with AI so far has
been llms and lllms that you can use on your phone,
lllms that you can use in a browser. So if
that's the way they are experiencing AI, why will they
think that they need to buy a computer that is
specialized for AI.
Speaker 4 (17:58):
Okay, so this is a little different, and I wish I,
you know, I have time to walk you to all
the details. Maybe that's an invitation for you all to
come here. I think next year there. Okay, welcome, yes,
but here I'll give you some simple I'll give you
some very simple data points. The first thing is we
(18:20):
used to learn how to interact. We have to learn
how to interact with your phone, interact with PC. But
now with AI, whether is what we say, what we write,
what we see, the computer knows how to interact with us.
So the user interface is changing, and the user interface
actually runs where the human is. It runs on your phone,
(18:42):
it runs on your PC. So we're starting to see
right now. And you see Microsoft doing that with the agents.
You see that Google doing that with the agents. Then
now the computer has this agent ready to interact with
you as as your assistant as you do things. That's
the first thing that is happening. The second thing that
is happening is there is incredible amount of processing power
(19:03):
that is available. And as companies starting to see AI
getting scale because now it's about not just creating AI
in the data center. I need to deploy it. I
need to make money. They realize that you can leverage
all of this computer. It's transparent to you. It is
the wrong thing to talk about AI is cloud or
it is edged. It doesn't work like that. Just take
(19:25):
it for example, if your office three sixty five customer,
you have cloud and you have a client, and AI
is going to be deployed like that. And companies are saying,
if I bring this to the edge, my cost goes down,
my latency improves, and I have privacy. And that's what
we demonstrated. Many ISVs starting to deploy AI on PCs
(19:45):
and in funds.
Speaker 6 (19:47):
All right, going to leave it there.
Speaker 5 (19:48):
I'm glad we could get that time with you and
really cover a lot of ground. Christiana, thank you so much,
and Joy Maui, you certainly wish we were there. It's
a pretty great day here in New York City. Cristiano
he is CEO and President of Qualcomm from the Snapdragon
summit in Hawaii along with b Tech co host ed
Ludlow in San Francisco. Check him out every day with
(20:08):
Caroline High there on Bloomberg Television at eleven am Wall
Street Time, and be sure to check out as reporting
it on this story.
Speaker 2 (20:17):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (20:25):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five East during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (20:40):
Well by now pay later is everywhere every day is?
Speaker 5 (20:42):
It feels like you've got companies like a firm after
Pay and Klarna. They've all brought installment payments into everyday life,
while big banks and tech firms are also now racing
tim into the space.
Speaker 2 (20:53):
We talked about the growth and growing competition recently with
the founder and CEO of a firm, Max Levchen. He
joined us just a couple of weeks ago. Here's an
a firm. By the way, they're on a tear up
thirty percent year to date. The company provides a window
into the consumer and health of our financial system. So
when we were given the opportunity to talk with another
key member of the C suite, we certainly jumped on that.
We got Rob O'Hair with us. He's CFO of a firm.
(21:15):
He was featured in a recent edition of the Bloomberg
CFO Briefing newsletter.
Speaker 7 (21:19):
He joins us from San Francisco.
Speaker 2 (21:21):
By the way, sign up for that newsletter Bloomberg dot
com slash CFO dash Briefing. Also with us is Nina Trentman.
She is Bloomberg News Senior editor. She writes the Bloomberg
CFO Briefing newsletter. She's here in the studio.
Speaker 4 (21:33):
Rob.
Speaker 2 (21:34):
That's exactly where I want to start with you. How
the consumer is doing. It's a question we posted Max
a few weeks ago. But you guys have real time data.
You're seeing at every moment how people not just are
spending money, but how they are with paying it back.
Speaker 7 (21:47):
How's the consumer in the US doing well?
Speaker 10 (21:50):
First of all, thanks for having me. In terms of
the consumer data that we see, we see a consumer
that's strong and healthy. You know we are are We're
originating over one hundred million dollars of loans every day,
and right now, all of the repayment data that we
see in our daily loan cohorts, it's all really strong
(22:11):
and it's exactly in line with our expectations. So that
tells us that the consumer's healthy, and that tells us
that we're setting the right underrunning posture in our business.
Speaker 11 (22:20):
Rob, How about delinquencies in the business those ticking up?
What are you seeing there in the data?
Speaker 4 (22:26):
No, I mean we manage credit.
Speaker 10 (22:28):
That really is job one internally for us, and we
stare at delinquency data.
Speaker 7 (22:33):
That's part of the repayment data that I was.
Speaker 10 (22:35):
Alluding to, and we're seeing outcomes that are exactly in
line with what we would expect.
Speaker 11 (22:41):
Just wondering with the fit cutting interest rates last week
and indicating that there more might be more cuts to come,
how important do you think that is for your consumers
and also how important is it for your business?
Speaker 10 (22:54):
It may be helpful for consumers, right, it may reduce
the consumers total costs of credit, which I think is
beneficial for them. For us, though, we actually like the
rate environment that we're in today. We're very profitable as
a business. When we look at loans on a unit level,
we're sort of add or above our long term ranges,
(23:15):
So we feel good about this rate environment. If rates
were to go down from here, it might be a
modest benefit for us. Not all of our funding that
we utilize is floating rate in nature, so there could
be a lag effect to see any sort of real
material benefit. But I think one of the great things
about a firm is that we can be adaptable and
we can excel in any macro environment.
Speaker 5 (23:38):
One thing we want to ask you about is that
Bloomberg Intelligence, our own research team, Rob has put out
a report this morning and they're projecting that affirm will
surpass thirty percent growth this year to a head of consensus.
So just talk to us, if you will, about some
of the drivers here when it comes to volume drivers.
Speaker 10 (23:58):
Sure, I think it's important to remember that at our
outlook for fiscal twenty six, we have a June fiscal year.
We've established a minimum GMV the for the year, So
we don't have a range out there. There's no high
end to that estimate. So you know, certainly we put
out a minimum number for GMV and we would hope
to achieve that just given that it is what we
(24:20):
think a floor for the business.
Speaker 4 (24:23):
Closer to home.
Speaker 10 (24:24):
You know, for Q one, we're guiding that we see
about thirty seven percent growth in the GMV line in
the September quarter, and that that would be down from
the forty three percent that we had in the June quarter.
Speaker 7 (24:36):
So both metrics I think are quite.
Speaker 10 (24:39):
Healthy and quite strong, and we really like what we're
seeing in the business today.
Speaker 2 (24:44):
Hey, very briefly, can you just tell us a little
bit about the Affirm card. Ten percent of your users
are on the card. Tell us exactly how it works
and the profitability on the cards portfolio. Is it better
than conventional buy now, pay later?
Speaker 10 (24:57):
Our card is is slightly better profitability than our business
at large. That really stems from the fact that the
Affirm Card is a repeat usage product. Most of our
consumers come to us through one of our merchant integrations
and then look to deepen the relationship with a firm
through some of our direct to consumer products like a
(25:18):
firm card. So there's a lots to like about a
firm card, both for us but for consumers too. It
puts all of the utility, all of the financing and
flexibility that we offer through a firm, it puts it
on a card, and it allows consumers to transact in
places that today a firm doesn't have quite the level
of coverage that we have on e commerce. So we
(25:39):
see a lot of usage for a firm card in
store in brick and mortar situations. And you can also
utilize a firm card quickly and easily at merchants where
they don't have an affirm integration yet.
Speaker 11 (25:52):
Yeah, Rober, unfortunately running out of time, maybe just thirty seconds.
Just about the growth in your space. We've seen Klana
recently go public, like and how far is that potatoy
boosting even attention to the to the space.
Speaker 10 (26:06):
You know, we think it's good for investors to have
multiple providers in the space so that they can compare
and contrast across us. In Klarna, I would say our
space has been competitive for several years now. We really
haven't seen a change in competitive intensity, So you know,
we're focused on on driving our objectives and right now
(26:27):
the business looks incredibly strong from our perspective.
Speaker 5 (26:31):
All right, gon to leave it there, Rob, Thank you
so much. Robohare chief financial officer of a firm. Featured
any recent Bloomberg CFO Briefing newsletter, a new one by
the way out on Sunday finding at Bloomberg dot com,
slash CFO Briefing, and of course always our thanks.
Speaker 6 (26:43):
Anina Trentman, she's Bloomberg new Senior Editor.
Speaker 7 (26:46):
Stay with us.
Speaker 2 (26:47):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (26:55):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live week afternoons from two to five ES during
Listen on Applecarplay and Android Otto with the Bloomberg Business app,
or watch us.
Speaker 6 (27:06):
Live on YouTube.
Speaker 2 (27:09):
Jillian Wolf is back with us. She's Bloomberg Intelligence Global
Equity Strategist. She joins us here in the Bloomberg Interactive
Brokers Studio. Jillian, we are off for worse levels of
the day, but we are down as much as one
percent at the lows on the S and P five
hundred at one point today.
Speaker 7 (27:25):
Why some selling?
Speaker 2 (27:26):
I mean, look, stocks go up and stocks go down,
but are there any fundamentals here that you are watching
about why we've seen shares of the S and P
five hundred down for three days in a row.
Speaker 12 (27:36):
I think it's interesting that the S and P five
hundred is down, particularly right after this FED cut, right
I was supposed to give a big amount of juice
to the equity market. Right now, there's a lot of
thoughts about, well, how many cuts can the FED really
do if we're running into some hotter inflation going forward.
I think one of the things that differentiates the US
economy right now from a lot of others right now
across the globe is that CPI's have been accelerating over
(27:59):
the past few months, and i've probably been flat to
stable elsewhere in the world. So we're not really in
this same twenty twenty two scenario where inflation was just
hot everywhere and investors didn't really have a choice but
to invest anario or inflation was getting hotter. Now it's
really kind of becoming a US issue, and that's bringing
into question a lot of what the FED really will
(28:19):
be able to do, and I think that's why we're
seeing a little bit of weakness.
Speaker 5 (28:22):
Speaking of the FED, fed's Lisa Cook warning of course,
the FED Governor Lisa Cook warning the Supreme Court of
market chaos if she's fired. She has made a filing
to the Supreme Court in a bid to save her job.
We know that President Trump has taken it to the
Supreme Court in order to remove her from the Federal Reserve.
So the back and forth continues. Do you agree that
if indeed Lisa Cook is out, what would that mean
(28:45):
potentially for the equity side of things.
Speaker 12 (28:47):
I think it would definitely be a destabilizing force for equities. Right,
there's a reliance in the investor community that the FED
can act independently of whoever the president is or whatever happened.
Speaker 5 (28:59):
And that you would be a clear sign of the
FED isn't dependent anymore.
Speaker 6 (29:03):
Correct if there starts to be dependent yet.
Speaker 12 (29:06):
Exactly, if there starts to be pressure about who can
or cannot sit on the on the FED Committee as
a result of their choices, it's a sign that there's
less FED independence, which, regardless of whether you think that
there should or shouldn't be less independence as an individual,
it would destabilize equity markets because this.
Speaker 5 (29:23):
Is destabilize me ten down, twenty percent, down fifty percent.
Speaker 12 (29:27):
It depends I wouldn't make a call to say, oh, well,
it'd be down ten or thirty percent or something like that.
But I think it casts a lot of doubt into
the Fed's ability to keep inflation under control, and then
that would ultimately bleed through into the market. Right So,
if the FED isn't allowed to control to control inflation
and fulfill its mandate trying to keep unemployment low and
(29:47):
keep on in inflation low as well, ultimately the stock
market will respond if those forces start to get out
of control.
Speaker 2 (29:55):
We haven't seen even a reaction. Sorry, we haven't seen
a big reaction from the bond mark or the stock
market that shows that this is a real risk right
now at least two investors.
Speaker 12 (30:04):
I think there's just so much uncertainty with this administration
in particular. I mean Trump was going to have fire
Powell at one point and that didn't end up happening.
I think we're in this very much weight and see
mode to see if any of this actually goes through
the market. I don't think is pricing that in right now,
to be honest, which is a little bit dangerous. Because
we are at all time highs. There starts to be
a signal that the FED is losing some of its
(30:26):
dependents that could really rock the market. From this very
high place. That said, who's to say whether or not
this actually happens. I think it's very difficult for anyone
to really make that call right now, given the amount
of volatility that we see in this administration.
Speaker 5 (30:40):
All right, so Jeffrey's financial I can't remember who was
on with us, says, actually, that's like the first sign
of you know, kind of the beginning of earnings, and
we'll start to get an idea, certainly from a financial
market perspective. They report after market September twenty ninth, and
then of course we get JP Morgan, which is the
big one that we always focus on, and that comes
October fourteenth earnings.
Speaker 6 (31:01):
What can you tell us about expectations? S told us
that that's what was Eric because I was like, it.
Speaker 7 (31:06):
Was just thirty seconds to remember it.
Speaker 5 (31:08):
But he said, because we were saying JP Morgan, you know,
in a couple of weeks, He's like, actually, Jeffries comes
before that, and we will get that after the close.
And Stemberg, right now, what are we expecting for earnings
this go around?
Speaker 12 (31:20):
I think two Q was such a big beat. I
think earnings are a little bit of a precarious place
right now, right because two Q we had this massive beat.
The tariffs really didn't flow through to earnings in as
negative of a way as many people expected. There was
this pause, analysts made a lot of cuts heading into
the second quarter. Turns out they didn't really have that
much of an impact. But we're finding on earnings calls
(31:40):
quite a bit our CEOs and C suites saying we
can manage this. We have inventory stock in place, we're
hedging our bets against tariffs. I think there is a
lot of expectation right now from investors that companies are
actually going to be managing this tariff situation in this
new tariff regime relatively smoothly, and any cracks that start
to emerge in earnings picture could be quite dangerous.
Speaker 2 (32:01):
When you say relatively smoothly, what does that mean like
put some pressure on marketing.
Speaker 12 (32:06):
Pressures on margins, because right now we're not seeing it
putting pressure on margins too much. A lot of companies
stocked up early in advance of this, and a lot
of companies are saying that they're coming to their own
independent deals and they have their own supply chains and
things have been relatively smooth sailing thus far. I think
it's setting up a bit of this maybe a very
high bar for earnings to clear in the next few quarters,
(32:27):
because now C suites have really given this impression we
got this, this is not going to be that bad.
And if it turns out that cost pressures really start
to go up and start to eat into margins, I
think because the market isn't expecting it right now, that's
why the market's at new all time highs, it could
really be a bit dangerous.
Speaker 4 (32:44):
No.
Speaker 5 (32:45):
I think about the conversation that we have with Chris Nicholas,
presidency of Sam's Club yesterday right when he talked about,
I mean, Walmart and all of its universe has incredible
leverage with their supply chain. We know that, we know that,
we talk about their ability to do that, but he
did say that because of I guess that supply chain,
their relationship with their suppliers, that they can go back
and kind of figure this out with higher tariff costs, yeah,
(33:06):
or figure out ways to maybe cut costs elsewhere so
that necessarily so that they don't necessarily have to raise prices.
Speaker 12 (33:14):
Do slimmers the discussion has really been about we run
a natural language processing sentiment model on our team. It's
a fancy way of saying we run all the transcripts,
earning transcripts through an algorithm that tells us how positive
or negative the C suite sounds about certain topics around tariffs.
They still sound pretty positive. They're really hedging their bets,
and I think we have to temper our expectations that
(33:36):
maybe this won't be the worst case scenario for tariffs
that we thought was going to happen back in April
and May. We're not going to see this huge implosion
of margins into the end of the year. But I
think the risks are being downplayed a little bit right now.
This is smooth sailing. This shouldn't be any problem for us,
which is what we're seeing on these calls, and there
really is a risk heading into twenty twenty six that
it starts to weigh down on their costs.
Speaker 2 (33:57):
I wouldn't be surprised if executives don't want to say
that because they don't want to draw attention.
Speaker 12 (34:03):
They don't, but it's setting up a risky place keeping
the market this high, that the second you get even
a little bit of disappointment on that. That's really going
to have an exacerbated effect now because we're expecting things
to run so smoothly.
Speaker 6 (34:16):
We're living in a fear factor moment. That's kind of
how I see it. It's kind of interesting.
Speaker 5 (34:20):
But I also talked about when we talked about this
with Markerman when it comes to Apple and fiduciary responsibilities
right of a CEO of publicly held companies in maybe
keeping their companies off the radar, right, I don't know that, Uh.
Speaker 12 (34:34):
Yeah, I mean, you don't want to look. You don't
want to sell the alarm bells. If you're in the
sweet suite. Your job is pickling these earning calls is
to talk about how you're going to manage a tariff regime.
You don't want to say the world's on fire and
this is terrible.
Speaker 6 (34:45):
All right, all right, Jillian, Thank you so much.
Speaker 5 (34:48):
Gillian Wolf see Bloomberg Intelligence Global Equity Strategies, joining us
in our Bloomberg Interactive Broker Studio.
Speaker 6 (34:53):
This is Bloomberg.
Speaker 1 (34:54):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(35:15):
and always on the Bloomberg terminal
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business Weekdaily,
reporting from the magazine that helps global leaders stay ahead
with insight on the people, companies, and trends shaping today's
complex economy. Plus global business, finance and tech news as
(00:23):
it happens. The Bloomberg Business Week Daily Podcast with Carol
Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
It is Bloomberg BusinessWeek Daily. That is Carol Masser, I'm
Tim Stanebeck. A story that we're following closely, and it's
a Bloomberg exclusive, Actually, Bloomberg obtaining exclusive details of private
discussions between European and Russian diplomats. European diplomats warning the
Kremlin that NATO is ready to respond to further violations
of its airspace with full force, including by shooting down
(00:53):
Russian planes. Russian officials have denied their planes crossed into
Estonian airspace and insisted that they are not trying to NATO,
saying Russian military fights are guided by international rules. I
want to bring in Becca Wasser, Becca's defense lead for
Bloomberg Economics. She joins us from our Washington DC bureau. Becca,
what would it mean if NATO would respond in this way.
(01:14):
I mean, isn't that the entire point of NATO to
respond collectively if there is such an incursion.
Speaker 3 (01:23):
Thanks so much for having me today. I think you're
exactly right. NATO's core focus is for the alliance to
essentially treat an attack on one to be an attack
on all. What we are seeing here is not necessarily
an attack, but rather incursions that violate sovereign airspace, and
so what we are having is a collective response. It's
(01:44):
just not necessarily taking overt military means. What I think
we have seen today with this scoop that Bloomberg News
had is a warning from NATO and NATO allies to
communicate that should Russia continue to violate NATO airspace, there
(02:05):
may be repercussions for those actions. A core part of deterrence,
which is what NATO is all about, is trying to
communicate to someone that their actions have consequences. And I
think that's exactly what these NATO allies have done today,
and they're trying to make it so that there isn't
a potential escalation or any accident that could spiral further
(02:27):
and lead Russia and NATO into conflict.
Speaker 4 (02:31):
So.
Speaker 5 (02:32):
US part of NATO, I mean, so I am curious.
We have certainly seen from President Trump saying that Kiev
in Ukraine can win and that they're in a position
to fight and win back. Specifically, it just to be fair,
President's got kind of back and forth in terms of
his support of Ukraine or also support of Russian President
(02:56):
Vladimir Putin. So is the US all in on this
and support sort of NATO?
Speaker 6 (03:01):
All in one hundred percent?
Speaker 3 (03:03):
So the US is a founding member of NATO and
therefore has said that they are all in and that
they will ensure the security of NATO and the NATO Alliance.
That said, if you are looking at President Trump's comments,
he makes it very clear that he sees NATO likely
(03:24):
to be a European project. So, while the US is
part of NATO and has reaffirmed many of its collective commitments,
there is this emphasis on European nations doing more, and
within that the idea that the rest of the alliance,
now that they are spending five percent of GDP on defense,
are going to be able to step up and take
(03:47):
on the lion's share of the burden. And I think
we've already seen that in the initial response to these
airspace violations, NATO has stood up Operation Eastern Century in
order to deter any further incursions, and the US has
not contributed additional forces or equipment to that. We're also
(04:08):
seeing something very similar play out as it relates to
President Trump's comments about Kiev being able to fight Russia
and take back territory that it had previously lost during
Russia's invasion of Ukraine.
Speaker 7 (04:22):
Yeah, that was a surprise develement this week.
Speaker 3 (04:25):
Absolutely. I think fundamentally what it really means is that
there is no change on the ground is the US
were not to step up its military aid, and we
don't see any indications right now that the US is
planning to do so. What is happening is that the
US is willing to provide weapons, but through NATO and
(04:47):
only if other NATO allies will pay for those weapons
to be sent on to Ukraine. So, absent any change
in the provision of military aid, both equipment additional intelligence support,
I'm potentially taking some of the training wheels off of
long range strike capabilities. There probably isn't going to be
the ability of Ukraine to be able to take back
(05:10):
that territory.
Speaker 5 (05:11):
Hey, listen, Becka. One of the things we want to
ask you. You're our defense lead for Bloomberg Economics. You
led studies in wargames for the US Department of Defense
at the Center for a New American Security and the
Rand Corporation.
Speaker 6 (05:24):
What can you We're switching gears a little bit.
Speaker 5 (05:27):
But there is a story that has definitely popped up
high on the Bloomberg terminal, and it has to do
with the Defense Secretary Pete Hegseth summoning top military commanders
for a meeting early next week. Apparently has not talked
about what this meeting is about.
Speaker 6 (05:45):
What do we know? What are we hearing? How unusual
is this?
Speaker 3 (05:50):
I think you've hit the nail on the head. It's
quite unusual. This is something where no one really knows
exactly why everyone has been called to back to Shington, DC,
why they're all going to be meeting at once. I
can't think of a single moment in military history where
every single general was located in the same room as
(06:10):
the Secretary of Defense. What senior leadership?
Speaker 5 (06:13):
What does this mean? How many generals are out there?
And are they been pulled from posts around the globe? Like,
what are we talking about size and scope here?
Speaker 3 (06:22):
We are talking about hundreds of people. So we are
talking about some of the senior leaders in the Army,
the Air Force, the Navy, so every military service. We
are talking about the folks who are currently leading operations overseas.
We are talking about people who are based at NATO,
(06:43):
at European Command, at Central Command. We're talking about everyone
coming from all over the globe to meet in one place,
all at once. Wait, this is truly unprecedented.
Speaker 6 (06:55):
I have to ask, so, who's watching everything?
Speaker 3 (06:59):
Well, the good news is is that the US military
is highly well trained and highly capable, and there's going
to be a lot of command staffs that are going
to be doing a great job holding down the fort
wherever it is that they are. So there is going
to be oversight. But what won't be there is some
of that guidance that you have from some of your
(07:20):
top leadership and your top military officials to ensure that
things are going according to plan and according to the
guidance set forth by the Secretary of Defense and the
Department of War.
Speaker 2 (07:31):
Perhaps it's a question about organization and what Pete Haigseth,
the Secretary of Defense, wants the military to look like.
Just in the last thirty seconds that we have with you,
we know he's made some changes at the top. He's
fired some long standing members of the military. He's done
some reorganization. How would you characterize the image that he
wants to portray.
Speaker 3 (07:54):
The Secretary of Defense has been very clear about what
his priorities are and how he wishes to remake the
US military in that image. One of his top priorities
has been, in his words, lethality. But lethality has not
been well defined. Some people think that it focuses on capability.
Others tend to think that it focuses on military readiness
(08:17):
as well as the way in which the US military
presents itself. Ultimately, I think the Secretary is the only
one who knows truly what he means, and perhaps maybe
this meeting is an opportunity for him to communicate that
more broadly.
Speaker 5 (08:31):
All right, interesting, staff, Becca Wasser, thanks so much, Defense
lead for Bloomberg Economics, joining us from our DC bureau.
Speaker 2 (08:37):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (08:45):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us Live weekday afternoons from two to five e's during it,
listen on Applecarplay and Android Otto with the Bloomberg Business app,
or watch.
Speaker 6 (08:57):
Us live on YouTube.
Speaker 5 (08:59):
We're going to stay on the tech because we did
have some headlines involving TikTok.
Speaker 2 (09:02):
Yeah, Oracle, Silverlake and MGX will be the main investors
in TikTok. This according to CNBC's David Favor, who reported
this on air. He cited people familiar with the matter, Oracle,
silver Lake, and MGX. We'll have a combined forty five
percent ownership of TikTok. That's according to Favor. We'll getting
shares with Oracle right now, Carol down about five point
eight percent.
Speaker 6 (09:20):
All right, we're talking TikTok.
Speaker 5 (09:22):
We just talked about a possible Intel Apple kind of
tie up there with our mark German. We want to
stay again on really the tech world, and even that
tie up or possible tie up. We've got the head
of a company that's one of the world's biggest sellers
of the chips at the heart of mobile phones, including Apple,
which is its second biggest customer at least according to
Bloomberg Data. Great to have with us, Christiano Aman he
(09:44):
is CEO and president of Qualcom. He joins us from
the snap Dragon Summit in Maui, Hawaii, along with our
b Tech co host ed Ledlow, which you can find
on BTV every day at eleven am Wall Street time
at out there in our San Francisco bureau. Gentlemen, great
to have you both, He on Bloomberg Business Week Daily.
Speaker 6 (10:01):
Christiana, I want to start with you.
Speaker 5 (10:03):
I got to ask you Apple, is, you know, according
to our data, your second biggest customer. What would a
possible Apple Intel tie up mean to you?
Speaker 8 (10:12):
Guys?
Speaker 4 (10:16):
Look, there's there's no relationship, and actually it has been
widely reported for years now that over the next few years,
I think Apple will stop, you know, getting chips from Qualcom,
and the company has really moved on on not only
what we're doing within the Android ecosystem, but we're now
(10:36):
in PC's and automotive, in industrial and robots, we're even
into the data center. So Qualcom, it's it's a different
company right now. We continue to execute on this strategy
and there's really no relationship.
Speaker 5 (10:48):
But in terms of a tie up, do you think
that's even something likely that there is some deeper relationship
between those two companies?
Speaker 4 (10:56):
The way I think about it, and like, I don't
know details, but I can only see two possible angles.
One possible angle is Intel continue to invest to become
a foundry in decades?
Speaker 3 (11:09):
Uh?
Speaker 4 (11:10):
You know, as we are a fabulous company, we welcome
more foundry. Today we manufacture our chips with TSMC, with Sansung,
And if Intel has the capability to become a competitive
founder in America, we're very happy and we and we
will look at them as a manufacturer. As far from
a product standpoint, I can't really see a connection because
(11:33):
Apple have their own.
Speaker 6 (11:34):
Processors and we want to get onto other stuff.
Speaker 5 (11:37):
One more question, though, how are you feeling about the
government investing in Intel do? I don't know would be
fair for other companies, even a qualcom to say, wait,
you know what about us?
Speaker 4 (11:50):
Look, my understanding of this is there is there is
an overarching strategic topic which is manufacturing of semiconductors. And
I think we know and it's been widely reported that,
you know, Intel head struggle to compete with companies like
TSMC and san Fan. So anything that is driven towards
(12:15):
enhancing the industry manufacturing capability, especially in in the United
States or even other places, so we have a more
geographically diversified manufacturing. That'sactly good news. We're looking at the
big picture.
Speaker 8 (12:31):
Christiano, like, the thing definitively that's changed is the landscape
in both PC and mobile. But I really want to
start on the PC bit. I look at what's come
out of MAUI Generations generation from a year ago, and
what's really clear is you want to push even deeper
into Windows based PC. Could you just explain how the
(12:51):
generational updates on the tech help you do that and
why it's important.
Speaker 4 (12:58):
Yes, I wish you're all here with us.
Speaker 9 (13:01):
This is actually we wish we were there also, Yes,
this has been This has been day three of a
lot of announcements or the Chip announcements.
Speaker 4 (13:13):
And one thing that we're actually very proud. I think,
as I said you know earlier to Carol, I think
the company is diversifying. We're building products for many different
industries and PCs is one of the growth of vectors
of the company. So we announced our second generation PC.
It was we just entered this market and in our
(13:34):
second generation, I think people are seeing one of the
biggest leaps in performance from generation to generation. We have
forty percent improvement in the CPU, eighty percent improvement in
the GPU, and we actually have the very first processor
in a thin and light laptopping running at five gigahertz
of clock frequency. And but the real news is the
(13:57):
amount of AI performance. I think they turn position of
phones and PCs to AI is happening and those or
those chips are designed to them.
Speaker 8 (14:07):
Christian, I don't want to make statements because, like I'm
the journalist, and as you know, I love to ask
you questions, but I go very deep on what's happening,
and so like there's an acceptance that this is edge
technology that's deployed in the real world, but I kind
of want to hold.
Speaker 7 (14:23):
You to how it's going.
Speaker 8 (14:24):
You know, in February you basically said that in really
specific category, you know, Windows PC price to eight hundred
dollars and above. I think you said you had ten
percent market sharing that and I'm looking at the specifics
of what came out of MAUI in the last three days.
Do you have an update on the ownership you have
in that market or what this latest gen of chipsets
(14:45):
will do to push you deeper into it.
Speaker 4 (14:49):
Yes, this is a great question. We are you know,
as we're new in this market and it has been
you know, it's it's actually we can leverage a lot
of technology exactually a creative I think to Qualcom. And
we're tracking to what we said. We actually only launched this,
you know, u cepcs of our chips in the United
States in the top five European markets, and we're tracking
(15:11):
about nine percent right now. I think our projection was
by twenty twenty nine to get to about twelve percent.
Very reasonable. But what is exciting right now, and that's
I think in your question, is the edge AI transition
is happening. Actually, the foundational models now are being designed
(15:31):
so they have cloud and edge working side by side,
and that is exactly creating an opportunity for us to accelerate.
And it is reflected a number of designs we actually,
you know, a while ago, just a couple quarters ago,
we talked about having one hundred designs across all the
major PC OEMs, HP, Del Lenovo, Acer, sou Sanson. Now
(15:52):
that number is significantly higher and we're seeing the excitement.
Speaker 8 (15:58):
To Carol's question, I think it's fair like the Nvidia
Intel Products collaboration puts this emphasis back on eight X
eighty six against ARM based chips. How are you tracking
the penetration of both in the market. You know, if
you if you're going to react to that in video
and Intel deal and how it changes the market, you
(16:20):
must also be tracking it in that context, you know,
how you are pushing into that territory.
Speaker 4 (16:28):
Yes, when you actually and I'm gonna I'm going to
quote you when you just said, when you actually dig
deeper on it, And it was interesting. Actually when that
announcement happened, it was interesting. We were slightly up. It
was kind of neutral, too positive to qualcom, and we
saw I think the market stock reaction on arm on,
(16:48):
AMD on and an Intel was up. And the way
we actually look at this, we're incredibly excited because what
he basically means is, I think it's Intel sending a
message that their integrated GPU and their AI products are
They're not going to likely not to continue with that
(17:09):
because that's what the market is seing it's going to
be in Vidia. So then as in Nvidia comes in
to the integrated GPU market, combining their GPU with Intel
X eighty six, he started to bring AI into the
PC market. And that is the moment we've been waiting
for and I think that's what we do. And I
think the Qualcom DNA is anything that is battery power,
(17:32):
is high performance, low battery life, and a lot of AI.
That's that's where we want the market to be.
Speaker 2 (17:38):
So Christiano sell us on this moment because I think
a lot of people's experience with AI so far has
been llms and lllms that you can use on your phone,
lllms that you can use in a browser. So if
that's the way they are experiencing AI, why will they
think that they need to buy a computer that is
specialized for AI.
Speaker 4 (17:58):
Okay, so this is a little different, and I wish I,
you know, I have time to walk you to all
the details. Maybe that's an invitation for you all to
come here. I think next year there. Okay, welcome, yes,
but here I'll give you some simple I'll give you
some very simple data points. The first thing is we
(18:20):
used to learn how to interact. We have to learn
how to interact with your phone, interact with PC. But
now with AI, whether is what we say, what we write,
what we see, the computer knows how to interact with us.
So the user interface is changing, and the user interface
actually runs where the human is. It runs on your phone,
(18:42):
it runs on your PC. So we're starting to see
right now. And you see Microsoft doing that with the agents.
You see that Google doing that with the agents. Then
now the computer has this agent ready to interact with
you as as your assistant as you do things. That's
the first thing that is happening. The second thing that
is happening is there is incredible amount of processing power
(19:03):
that is available. And as companies starting to see AI
getting scale because now it's about not just creating AI
in the data center. I need to deploy it. I
need to make money. They realize that you can leverage
all of this computer. It's transparent to you. It is
the wrong thing to talk about AI is cloud or
it is edged. It doesn't work like that. Just take
(19:25):
it for example, if your office three sixty five customer,
you have cloud and you have a client, and AI
is going to be deployed like that. And companies are saying,
if I bring this to the edge, my cost goes down,
my latency improves, and I have privacy. And that's what
we demonstrated. Many ISVs starting to deploy AI on PCs
(19:45):
and in funds.
Speaker 6 (19:47):
All right, going to leave it there.
Speaker 5 (19:48):
I'm glad we could get that time with you and
really cover a lot of ground. Christiana, thank you so much,
and Joy Maui, you certainly wish we were there. It's
a pretty great day here in New York City. Cristiano
he is CEO and President of Qualcomm from the Snapdragon
summit in Hawaii along with b Tech co host ed
Ludlow in San Francisco. Check him out every day with
(20:08):
Caroline High there on Bloomberg Television at eleven am Wall
Street Time, and be sure to check out as reporting
it on this story.
Speaker 2 (20:17):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (20:25):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five East during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (20:40):
Well by now pay later is everywhere every day is?
Speaker 5 (20:42):
It feels like you've got companies like a firm after
Pay and Klarna. They've all brought installment payments into everyday life,
while big banks and tech firms are also now racing
tim into the space.
Speaker 2 (20:53):
We talked about the growth and growing competition recently with
the founder and CEO of a firm, Max Levchen. He
joined us just a couple of weeks ago. Here's an
a firm. By the way, they're on a tear up
thirty percent year to date. The company provides a window
into the consumer and health of our financial system. So
when we were given the opportunity to talk with another
key member of the C suite, we certainly jumped on that.
We got Rob O'Hair with us. He's CFO of a firm.
(21:15):
He was featured in a recent edition of the Bloomberg
CFO Briefing newsletter.
Speaker 7 (21:19):
He joins us from San Francisco.
Speaker 2 (21:21):
By the way, sign up for that newsletter Bloomberg dot
com slash CFO dash Briefing. Also with us is Nina Trentman.
She is Bloomberg News Senior editor. She writes the Bloomberg
CFO Briefing newsletter. She's here in the studio.
Speaker 4 (21:33):
Rob.
Speaker 2 (21:34):
That's exactly where I want to start with you. How
the consumer is doing. It's a question we posted Max
a few weeks ago. But you guys have real time data.
You're seeing at every moment how people not just are
spending money, but how they are with paying it back.
Speaker 7 (21:47):
How's the consumer in the US doing well?
Speaker 10 (21:50):
First of all, thanks for having me. In terms of
the consumer data that we see, we see a consumer
that's strong and healthy. You know we are are We're
originating over one hundred million dollars of loans every day,
and right now, all of the repayment data that we
see in our daily loan cohorts, it's all really strong
(22:11):
and it's exactly in line with our expectations. So that
tells us that the consumer's healthy, and that tells us
that we're setting the right underrunning posture in our business.
Speaker 11 (22:20):
Rob, How about delinquencies in the business those ticking up?
What are you seeing there in the data?
Speaker 4 (22:26):
No, I mean we manage credit.
Speaker 10 (22:28):
That really is job one internally for us, and we
stare at delinquency data.
Speaker 7 (22:33):
That's part of the repayment data that I was.
Speaker 10 (22:35):
Alluding to, and we're seeing outcomes that are exactly in
line with what we would expect.
Speaker 11 (22:41):
Just wondering with the fit cutting interest rates last week
and indicating that there more might be more cuts to come,
how important do you think that is for your consumers
and also how important is it for your business?
Speaker 10 (22:54):
It may be helpful for consumers, right, it may reduce
the consumers total costs of credit, which I think is
beneficial for them. For us, though, we actually like the
rate environment that we're in today. We're very profitable as
a business. When we look at loans on a unit level,
we're sort of add or above our long term ranges,
(23:15):
So we feel good about this rate environment. If rates
were to go down from here, it might be a
modest benefit for us. Not all of our funding that
we utilize is floating rate in nature, so there could
be a lag effect to see any sort of real
material benefit. But I think one of the great things
about a firm is that we can be adaptable and
we can excel in any macro environment.
Speaker 5 (23:38):
One thing we want to ask you about is that
Bloomberg Intelligence, our own research team, Rob has put out
a report this morning and they're projecting that affirm will
surpass thirty percent growth this year to a head of consensus.
So just talk to us, if you will, about some
of the drivers here when it comes to volume drivers.
Speaker 10 (23:58):
Sure, I think it's important to remember that at our
outlook for fiscal twenty six, we have a June fiscal year.
We've established a minimum GMV the for the year, So
we don't have a range out there. There's no high
end to that estimate. So you know, certainly we put
out a minimum number for GMV and we would hope
to achieve that just given that it is what we
(24:20):
think a floor for the business.
Speaker 4 (24:23):
Closer to home.
Speaker 10 (24:24):
You know, for Q one, we're guiding that we see
about thirty seven percent growth in the GMV line in
the September quarter, and that that would be down from
the forty three percent that we had in the June quarter.
Speaker 7 (24:36):
So both metrics I think are quite.
Speaker 10 (24:39):
Healthy and quite strong, and we really like what we're
seeing in the business today.
Speaker 2 (24:44):
Hey, very briefly, can you just tell us a little
bit about the Affirm card. Ten percent of your users
are on the card. Tell us exactly how it works
and the profitability on the cards portfolio. Is it better
than conventional buy now, pay later?
Speaker 10 (24:57):
Our card is is slightly better profitability than our business
at large. That really stems from the fact that the
Affirm Card is a repeat usage product. Most of our
consumers come to us through one of our merchant integrations
and then look to deepen the relationship with a firm
through some of our direct to consumer products like a
(25:18):
firm card. So there's a lots to like about a
firm card, both for us but for consumers too. It
puts all of the utility, all of the financing and
flexibility that we offer through a firm, it puts it
on a card, and it allows consumers to transact in
places that today a firm doesn't have quite the level
of coverage that we have on e commerce. So we
(25:39):
see a lot of usage for a firm card in
store in brick and mortar situations. And you can also
utilize a firm card quickly and easily at merchants where
they don't have an affirm integration yet.
Speaker 11 (25:52):
Yeah, Rober, unfortunately running out of time, maybe just thirty seconds.
Just about the growth in your space. We've seen Klana
recently go public, like and how far is that potatoy
boosting even attention to the to the space.
Speaker 10 (26:06):
You know, we think it's good for investors to have
multiple providers in the space so that they can compare
and contrast across us. In Klarna, I would say our
space has been competitive for several years now. We really
haven't seen a change in competitive intensity, So you know,
we're focused on on driving our objectives and right now
(26:27):
the business looks incredibly strong from our perspective.
Speaker 5 (26:31):
All right, gon to leave it there, Rob, Thank you
so much. Robohare chief financial officer of a firm. Featured
any recent Bloomberg CFO Briefing newsletter, a new one by
the way out on Sunday finding at Bloomberg dot com,
slash CFO Briefing, and of course always our thanks.
Speaker 6 (26:43):
Anina Trentman, she's Bloomberg new Senior Editor.
Speaker 7 (26:46):
Stay with us.
Speaker 2 (26:47):
More from Bloomberg Business Week Daily coming up after this.
Speaker 1 (26:55):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live week afternoons from two to five ES during
Listen on Applecarplay and Android Otto with the Bloomberg Business app,
or watch us.
Speaker 6 (27:06):
Live on YouTube.
Speaker 2 (27:09):
Jillian Wolf is back with us. She's Bloomberg Intelligence Global
Equity Strategist. She joins us here in the Bloomberg Interactive
Brokers Studio. Jillian, we are off for worse levels of
the day, but we are down as much as one
percent at the lows on the S and P five
hundred at one point today.
Speaker 7 (27:25):
Why some selling?
Speaker 2 (27:26):
I mean, look, stocks go up and stocks go down,
but are there any fundamentals here that you are watching
about why we've seen shares of the S and P
five hundred down for three days in a row.
Speaker 12 (27:36):
I think it's interesting that the S and P five
hundred is down, particularly right after this FED cut, right
I was supposed to give a big amount of juice
to the equity market. Right now, there's a lot of
thoughts about, well, how many cuts can the FED really
do if we're running into some hotter inflation going forward.
I think one of the things that differentiates the US
economy right now from a lot of others right now
across the globe is that CPI's have been accelerating over
(27:59):
the past few months, and i've probably been flat to
stable elsewhere in the world. So we're not really in
this same twenty twenty two scenario where inflation was just
hot everywhere and investors didn't really have a choice but
to invest anario or inflation was getting hotter. Now it's
really kind of becoming a US issue, and that's bringing
into question a lot of what the FED really will
(28:19):
be able to do, and I think that's why we're
seeing a little bit of weakness.
Speaker 5 (28:22):
Speaking of the FED, fed's Lisa Cook warning of course,
the FED Governor Lisa Cook warning the Supreme Court of
market chaos if she's fired. She has made a filing
to the Supreme Court in a bid to save her job.
We know that President Trump has taken it to the
Supreme Court in order to remove her from the Federal Reserve.
So the back and forth continues. Do you agree that
if indeed Lisa Cook is out, what would that mean
(28:45):
potentially for the equity side of things.
Speaker 12 (28:47):
I think it would definitely be a destabilizing force for equities. Right,
there's a reliance in the investor community that the FED
can act independently of whoever the president is or whatever happened.
Speaker 5 (28:59):
And that you would be a clear sign of the
FED isn't dependent anymore.
Speaker 6 (29:03):
Correct if there starts to be dependent yet.
Speaker 12 (29:06):
Exactly, if there starts to be pressure about who can
or cannot sit on the on the FED Committee as
a result of their choices, it's a sign that there's
less FED independence, which, regardless of whether you think that
there should or shouldn't be less independence as an individual,
it would destabilize equity markets because this.
Speaker 5 (29:23):
Is destabilize me ten down, twenty percent, down fifty percent.
Speaker 12 (29:27):
It depends I wouldn't make a call to say, oh, well,
it'd be down ten or thirty percent or something like that.
But I think it casts a lot of doubt into
the Fed's ability to keep inflation under control, and then
that would ultimately bleed through into the market. Right So,
if the FED isn't allowed to control to control inflation
and fulfill its mandate trying to keep unemployment low and
(29:47):
keep on in inflation low as well, ultimately the stock
market will respond if those forces start to get out
of control.
Speaker 2 (29:55):
We haven't seen even a reaction. Sorry, we haven't seen
a big reaction from the bond mark or the stock
market that shows that this is a real risk right
now at least two investors.
Speaker 12 (30:04):
I think there's just so much uncertainty with this administration
in particular. I mean Trump was going to have fire
Powell at one point and that didn't end up happening.
I think we're in this very much weight and see
mode to see if any of this actually goes through
the market. I don't think is pricing that in right now,
to be honest, which is a little bit dangerous. Because
we are at all time highs. There starts to be
a signal that the FED is losing some of its
(30:26):
dependents that could really rock the market. From this very
high place. That said, who's to say whether or not
this actually happens. I think it's very difficult for anyone
to really make that call right now, given the amount
of volatility that we see in this administration.
Speaker 5 (30:40):
All right, so Jeffrey's financial I can't remember who was
on with us, says, actually, that's like the first sign
of you know, kind of the beginning of earnings, and
we'll start to get an idea, certainly from a financial
market perspective. They report after market September twenty ninth, and
then of course we get JP Morgan, which is the
big one that we always focus on, and that comes
October fourteenth earnings.
Speaker 6 (31:01):
What can you tell us about expectations? S told us
that that's what was Eric because I was like, it.
Speaker 7 (31:06):
Was just thirty seconds to remember it.
Speaker 5 (31:08):
But he said, because we were saying JP Morgan, you know,
in a couple of weeks, He's like, actually, Jeffries comes
before that, and we will get that after the close.
And Stemberg, right now, what are we expecting for earnings
this go around?
Speaker 12 (31:20):
I think two Q was such a big beat. I
think earnings are a little bit of a precarious place
right now, right because two Q we had this massive beat.
The tariffs really didn't flow through to earnings in as
negative of a way as many people expected. There was
this pause, analysts made a lot of cuts heading into
the second quarter. Turns out they didn't really have that
much of an impact. But we're finding on earnings calls
(31:40):
quite a bit our CEOs and C suites saying we
can manage this. We have inventory stock in place, we're
hedging our bets against tariffs. I think there is a
lot of expectation right now from investors that companies are
actually going to be managing this tariff situation in this
new tariff regime relatively smoothly, and any cracks that start
to emerge in earnings picture could be quite dangerous.
Speaker 2 (32:01):
When you say relatively smoothly, what does that mean like
put some pressure on marketing.
Speaker 12 (32:06):
Pressures on margins, because right now we're not seeing it
putting pressure on margins too much. A lot of companies
stocked up early in advance of this, and a lot
of companies are saying that they're coming to their own
independent deals and they have their own supply chains and
things have been relatively smooth sailing thus far. I think
it's setting up a bit of this maybe a very
high bar for earnings to clear in the next few quarters,
(32:27):
because now C suites have really given this impression we
got this, this is not going to be that bad.
And if it turns out that cost pressures really start
to go up and start to eat into margins, I
think because the market isn't expecting it right now, that's
why the market's at new all time highs, it could
really be a bit dangerous.
Speaker 4 (32:44):
No.
Speaker 5 (32:45):
I think about the conversation that we have with Chris Nicholas,
presidency of Sam's Club yesterday right when he talked about,
I mean, Walmart and all of its universe has incredible
leverage with their supply chain. We know that, we know that,
we talk about their ability to do that, but he
did say that because of I guess that supply chain,
their relationship with their suppliers, that they can go back
and kind of figure this out with higher tariff costs, yeah,
(33:06):
or figure out ways to maybe cut costs elsewhere so
that necessarily so that they don't necessarily have to raise prices.
Speaker 12 (33:14):
Do slimmers the discussion has really been about we run
a natural language processing sentiment model on our team. It's
a fancy way of saying we run all the transcripts,
earning transcripts through an algorithm that tells us how positive
or negative the C suite sounds about certain topics around tariffs.
They still sound pretty positive. They're really hedging their bets,
and I think we have to temper our expectations that
(33:36):
maybe this won't be the worst case scenario for tariffs
that we thought was going to happen back in April
and May. We're not going to see this huge implosion
of margins into the end of the year. But I
think the risks are being downplayed a little bit right now.
This is smooth sailing. This shouldn't be any problem for us,
which is what we're seeing on these calls, and there
really is a risk heading into twenty twenty six that
it starts to weigh down on their costs.
Speaker 2 (33:57):
I wouldn't be surprised if executives don't want to say
that because they don't want to draw attention.
Speaker 12 (34:03):
They don't, but it's setting up a risky place keeping
the market this high, that the second you get even
a little bit of disappointment on that. That's really going
to have an exacerbated effect now because we're expecting things
to run so smoothly.
Speaker 6 (34:16):
We're living in a fear factor moment. That's kind of
how I see it. It's kind of interesting.
Speaker 5 (34:20):
But I also talked about when we talked about this
with Markerman when it comes to Apple and fiduciary responsibilities
right of a CEO of publicly held companies in maybe
keeping their companies off the radar, right, I don't know that, Uh.
Speaker 12 (34:34):
Yeah, I mean, you don't want to look. You don't
want to sell the alarm bells. If you're in the
sweet suite. Your job is pickling these earning calls is
to talk about how you're going to manage a tariff regime.
You don't want to say the world's on fire and
this is terrible.
Speaker 6 (34:45):
All right, all right, Jillian, Thank you so much.
Speaker 5 (34:48):
Gillian Wolf see Bloomberg Intelligence Global Equity Strategies, joining us
in our Bloomberg Interactive Broker Studio.
Speaker 6 (34:53):
This is Bloomberg.
Speaker 1 (34:54):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(35:15):
and always on the Bloomberg terminal
Hosts And Creators
Tim Stenovec
Carol Massar
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.