tv Tech Check CNBC September 28, 2021 11:00am-12:01pm EDT
months worst day for the nasdaq since about day 12 semis on the move. you'll hear from amd ceo and qualcomm talking about the supply chain f faang continuing to suffer crypto and spac stock trade. a brutal day for tech as the sector leads all stocks to the down side. led by macro issues automatic over the world >> interesting to hear from folks here at code saying she believes the global chip shortage will be less severe in the second half of 2022 a lot of conversation about competition. you heard ceos take subtle
diggs. all of these tech players really benefitted from some of the trends, going forward, it might not be the rising tide they might be at odds and fighting for market chair. >> exactly what you got to last night? >> that's right. all fits in with what janet yellen, the treasury secretary was just talking about the broader economy. lisa su talking about u.s. china decoupling really not viable it is so dependent talking about that today and more about the tictok debacle and talking about the need to find enough common ground even
with different philosophies so the global economy can move forward. >> starting this morning with the selloff. early in facebook, etsy and spotify. pleasure to be here. on a day where normally the structural scene what do you make next two years whether the megatech stock sold off significantly, i'm a buyer and why they are also the leaders in the technology whether artificial intelligence, quantum communications and
computing. microsoft, apple these are the best in the world. i believe over the next three to five years, they'll continue to perform it >> they are still an asset and still beholden to global economic swings. at what point do those become things you have to process in your decision. >> constantly. evaluating testing and retesting. these underlying technologies right now in artificial intelligence quantum computing is maybe five years out. these companies are recruiting the best in the world in terms of talent. is when i'm computing, i'm talking about coupling
>> which companies could be the next faang stocks as well as the threats to the current tech giants. >> the dedoubling i expect to continue for a number of years the areas of intense cooperation is vaccine development, biotech the huge difference for patients and doctors there are areas where it would be really terrific to find ways to cooperate i understand for a couple of years, it will continue to be decoupled quite
significantly. >> you are talking about significant decoupling talking about the area of semiconductors that area with key technology. pressure on them from the u.s. and particular on who they offer that to. determined to make all of that available. you've got this huge middle class in china where a lot of companies need some access to and are providing the technology as that decoupling happens, depending on what the policy turns out to be. >> for sure. good news when we are all getting snip its of headlines. nvidia, amd are best in world and perhaps have a five-year
lead perhaps against everything in the world including china it won't be overnight but the good news is that we have a very significant lead in the u.s. >> here at code, there have been a number of criticisms at the company. concerns about the information you had a whole other panel talking about the risks and a lot of media criticism and the impact of facebook and instagram and the impact on teams. >> mark and sheryl remain as good a team as there is in the world of technology. my advice is to pause and really understand when we are talking
about adolescence, pre-teens in some cases we can always do a better job. make it safer and more secure. when i think about facebook, i invested in 2005 at 5 cents a share. there's been a lot of difficult times. when we bought instagram they are very close. they are 1% better that's worth $1 billion to facebook >> mark zuckerberg talking about a new phase of the company what are you seeing as the potential for facebook and can it make that transition they are
also two leaders of the wrld. doubling and tripling down in some of these areas will make a lot of sense for facebook they are extraordinary leaders and the fellow will be leading a charge on ai and i think that's about as good as it gets >> that has started on the earnings call. that is an overriding reason to buy here >> no. i love the idea of a metaverse but it is four or five years out. when i'm looking at facebook or these other companies, i'm looking at what does the next
year look like and artificial intelligence that will tick in more broadly >> thank you for kicking off our hour. >> good to see you >> back to the chip trade. that sector, the biggest lagarde. names like nvidia, qualcomm, amd. amd ceo was on stage last night. she talked about supply chain issues and specifically how she sees business coming out of the pandemic >> all of these things we never expected to happen have happened so it is a mindset shift i think people are very open to it the collaboration i see across the industry when we talk about supply chain,
we have had the deepest conversations with our partners. you've got to solve this together there is no one company that will do it all by themselves >> she also talked about heterogenious computing that will drive hardware coming out of the paind what is that it reminds me of apple's m 1 processors as they play out in the mac book air and pro with a 14 to 16-hour battery life because they can turn off those sources. she's looking to bring that main streen there are all sorts of ways to get this type of computing hard core computing and help
that continue. >> faster, better tips the question of whether supply will keep up >> i do wonder talking about this industry whether the white house takes a lead on that or with countries at large to get it where that demand is the greatest joining in supply, transportation and when do they come more in bounds.
that's assuming what will remain now and supply doesn't get worse. facing this issue now, which is a wildcard in all of this. the defense secretary says if congress is doing another, we end up with another crisis, that is another wrinkle to say the least that all of these will have to deal with. >> october 18. got more interesting we'll continue to be all over the selloff. the five biggest laggards. op'll tell you how to play the dr off in a moment back in two. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business.
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nadella opened up about the failed bit for tiktok. >> that was the strangest project. i was intrigued. everyone has seen the growth and what have you, the rest is history. >> tell me what about your conversations with president trump he's gone, for a little while at least. >> president trump and what he was trying to get done there and then just dropped off. >> kara with us this morning maybe the best interview i've
seen nadella give. >> thank you thank you. i did his first interview when he took over it was very ok awkward, if you remember he's had a lot of success. he's sort of shed the previous leaders and he got rid of the culture of envy of doing stupid businesses they don't belong in because they are envious to it >> great to hear him say he feels like he dodged a bullet. interesting what he said about search and what he said about bing. >> he's gotten good at the back handed hit he essentially said what ea
a monopoly but we are trying to compete. here we are trying to keep everyone honest, he says >> he's so unique at a time when he's squeaky clean and so many other companies are facing criticism. he started off with the criticism. he was so unknown and got the cackles. what is the sense of the role he'll play in this geopolitical stream will he be able to use some of that smooth that he's got? >> i think he does one of the things that microsoft does well, brad smith, who is the president, they've taken a
responsible look he wrote tools and weapons about how tech can be used many people, all due respect to jim, i love him. facebook is not. they are looking for blame saying well cars are good. making all of these painful metafors and saying we have all these problems and we are looking for action microsoft had its day in court and didn't do so well. >> you spoke would netflix's ceo and talking about competition and much expected expansion into gaming >> i look at it like any other vertical of content. a couple of years ago we weren't making unscripted or movies or foreign language content i look at it that games are this
evolution of story telling and that's something we do all day >> wanting to invest in content and games and not interested in a device not interested in live sports. subtle digs at disney. >> not subtle. >> a lot of people are worried about netflix even though they've sort of run laps around others for years not the best, some are pretty good disney is probably his biggest rival. he's got to say we're totally focused on just doing this this is what we do we figured out the algorithms.
we won all the emmys, sorry kids hollywood kids >> do you have any sense of the reliance of gaming to be the next thing to drive growth >> it went crazy this year, so stalling it did stall it is not going to grow anymore. they've got to go international or into verticals, so the obvious vertical the first one is gaming. the you can see that move into others but not devices. >> every year at this table, we had a discussion about what the theme is some years, it has been mobility or regulation. what do you think it is? >> i think it is solutions the last code was pretty negative unfortunately i was right.
right through the trump election i'm not blaming them but they helped it along. the people i selected are about solutions. satya nadella is doing very well ted is doing well. elon musk you can say what you want but the space stuff is amazing, what's happening. i really want to focus in on solutions. not to say that i'm not going to be like what the had he can are you doing, folks i think we all need to think about where we are going after the pandemic we have major issues climate change, homelessness, poverty, they need solving >> any advise for those? >> i think you have to do great safety nets. mark beniof.
but he was right i think testing is really important. he's absolutely right. to find defections we didn't have any that's great masking is important i don't want to have an argument with everyone about this vaxines. people should have respect for each other i'm not interested in debating let's be safe and respectful of each other and get through this. if you do, you'll have great events this is great. people are thrills to be here. >> thank you so much we got some weakness in chips this morning ahead qualcomm ceo is with us. we are back in two
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welcome back to tech check we are resetting at the bottom of the hour. jon in san diego at qualcomm stocks under pressure this morning. a story of rising yields that have been hitting big tech on pace for its 10th down day in the past 15 sessions we are still trading above levels as we saw last monday higher yields. the story about the energy crunch in europe and china it is beginning to weigh on the huge part of the s&p and down arrows >> we've been talking all morning about the testimony.
yellen and powell and the role that government and congress has to play right now in providing a direction forward. all of these stocks in the red handful here in electronic, arts in the green, stocks up slightly endever up on news it is buying a sports betting company >> currently the worst day for s&p and nasdaq since may 12. over to josh with a closer look. >> reporter: let's start with big tech, red.
facebook, microsoft, apple, amazon on word that they suspended production d downgrading and citing valuation. focus on investors there those worst performers there worth highlighting zoom, docu signing zoom tracking for its worst quarter. it has been rough sledding some there have been high settling in the heritage
etsy, shopify and stitch fix up. stitch fix more than 60% off its high chinese off as well too. at wedbush saying tech is facing huge challenge including rising yields, head winds and tough comps. including those chips. raising prices the demand is there. facing the taiwan semi back to you. >> you hadn't named the list of troubles for tech. specifically some of those at home names pfizer going to ask the fda for approval for kids under 11 making things more viable for people to go to work >> talking to joe at wedbush
today. that is certainly something joel has hammered on as a theme moderating that pandemic watch video game published has been tough going for names like activism, ea game delays have been a concern. some of those don't want to own something that could be in less demand as the pandemic ends and we return to some type of new normal >> interesting looking at these social media names facebook down, snap off 7% what is your sense of what is is driving those down so much more than even the nasdaq >> some are going to argue there are broad trends at work hot money moved into a lot of
these names. broadly speaking or not. those names have gotten pricey in the rotation, people are taking some off the top here >> thank you jon fortt talked to lisa su last night. something qualcomm might have something to say as well. >>s that right i am here this morning with something new. >> thank you for coming to qualcomm >> great to be here. irvin magic johnson and more first, i want to talk about some of the things happening in the markets. we've been talking out of the code conference about the china/u.s. decoupling.
it seems to me the semiconductor industry has a lot at stake. what is your view of what needs to happen here >> our view remains the same i'd probably like to change the conversation a bit and talk about strategic coupling the united states semiconductor industry, qualcomm is an example of that is a very strong industry and participates in the global market. what we saw as things increased, our position in china improved looking at the qualcomm diversification for example, we are going from mobil and a large amount of partners in china. maintaining the effective position of leadership we have the conversation is more about the strategic elements of the
economy and what does it look like and talking strategically decoupling that is part of a better conversation to have. >> let's go to micro and talk smart cities those are beyond the smartphone. talking cars and tracking data and where they are going and logistics and public safety. in a way that makes the whole society hopefully better what are we going to be talking about today and how does that move forward >> the reality is that we all live in cities now we have an incredible opportunity to use advancements to make life better and cities smarter and more sustainable
we are very proud of the qualcomm accelerator program we have now 400 members of thousands attending from all over the country from a number of companies, they are looking how to use the technology to affect health care, education, parking, smart parking, traffic management. that's happening in the united states, china, europe. we see an incredible opportunity to use that technology and some of the things we learn from the pandemic and using con effectivity broadly. >> irvin, jim, let's talk about how this plays out at the local level in real businessesand real cities. irvin, you've had a business
career that is now longer than your basketball career and has had huge impact. what role do you look for smart cities to play in that and where does the data come in. who has access and gets smart from that? >> first of all, i think he's right. where we sit is the education part of it, right? the digital divide is sitting there and even got bigger during this pandemic. when we think about what happened to inner city kids in urban america, no access to the internet now they have to go to a fast food restaurant to get connected to do their homework or get the lesson from school that really set us back. minority children were hurt by
the pandemic and virtual learning we are coming together to build smart cities and build in broadband whether underneath or on top and now everybody will have access to it and now we have a level playing field for everybody. that's very important. s that -- that's what jim and i are talking about. great we are talking about it but also we are going to solve a problem. >> jim, you at loop have deep experience in financing these moves that cities into he had to make, investments of infrastructure how much is it important how you structure. how things like public safety get executed so that various types of businesses benefit? >> those are the key questions and the right questions to ask
when irvin and i came together to secure this public/private part anywhereship in cities. we foresaw private capital would be coming into these cities and the benefits we have now five years later with 5g, that really has been the game changer. it is so much roader so much more data can come through. in addition to what irvin said about education, which was laid bare most lost a year they had to come back to school because they were now a year behind think about chicago. i'm from there smart street lighting. the data you can get from a
crime scene. street lights that light up brighter criminals-to-like to operate in the dark traffic lights, building data. the garbage can tells you, i'm full now, send the guys to pick me up. it is amazing. >> we are going to talk about it i can't believe we almost got through an interview at qualcomm without saying 5 g until you. i'm sorry that almost happened in your house but you said it. >> thank you so much we'll get an update from the hill after the break and an update from the selloff as we are off session lows we are back after a quick break.
pat toomey where recent increase in prices is now less short term, more long term and this is a change in his out look here. >> it is fair to say that it is mainly what we've seen is that the supply side restrictions where we've not only gotten better but in some cases gotten worse. look at the car companies and the ships with their anchors down outside of los angeles. this is really a mismatch between demand and supply we need those blockages to abate before inflation can come down >> the issues related to trading by two fed presidents that recently resigned did not come up in the hearings my colleague got one of the first comments on the issue from
senator before the hearing >> i think the fed chair needs to revisit this and reinstitute, bring back or make clear by fed rules that the members of the fed, governors and fed president should not ever trade while they hold these jobs and frankly go the next step that is that they shouldn't hold corporate stocks. >> getting to what we started with, insisting were efforts to weaken banking rules and regulations using examples that powell went on to reject warren called powell a, quote, dangerous man, end quote and that she would oppose his renomination >> to jump in here, warren had suggested she might vote against
him. now this is formal opposition. what do you expect to hear from others >> it is hard for me here. i just think warren is over the top on this. you can debate the banking regulations and the banking rules. when dodd frank was written, it was equivalent to the lord handing moses the 10 commandments such that they could never be changed there has been a very good argument for some amendments to the dodd frank rules the idea that somehow powell has given the banks a free pass when banking capital and multibanking highs. it seems to me to be in the context of washington today over the top in context of this issue. >> steve, meantime, which
discussion about the debt ceiling from the treasury secretary, the naming of october 18 there has been a lot of work done about what it would look like if the treasury did need to stop goldman has done work. are you starting to gain out in october if this doesn't go well? >> we've dot quite a bit five or six before we did the gaming not good there is some flexibility on the part of the treasury perhaps on the part of the fed a nice article in the journal about some ideas they don't really want to talk about because they don't want totell legislate yours they are off the hook the idea of defaulting on the debt is very bad for the economy and financial markets. importantly, the plumbing of the financial system you want to talk about what is
dangerous. clearly not raising the debt limit here i don't think there is any gaming that needs to be done in that context >> right, when bthey come out today and said it would be a major shock. that would be one, wouldn't it >> yes, it would it did have a negative effect when it happened last time look, we don't know why the market is off today. you have to prepare for it even though we kind of go through this process they tend to raise the limit every time you have to prepare for that risk among the risk out there, this has to be one. i think the fed would have to lean against that. you make a good point. put off tapering in that
context. >> steve, yellen did say she is optimistic about the medium turn of the economy, how do you reconcile that with the comments about how delta has delayed the return and about the raising of the debt ceiling >> what we've seen is that the data has not rolled over it is not going negative beef taken a few points off the growth and seen some of the recovery go from flat down just a bit. it seems to be with the delta variant, we've seemed to not have canceled it we've taken the upward slope think about it, back in april when we had the 150 handle on the 10-year and everyone was
optimistic about the opening we had a hard stop in august about the stock market looking forward here to how this is going to happen do we reopen the economy and ouk i think the other thing that's out there is trying to process what this recent inflation and the idea that it's more longer term means for corporate earnings very interesting analysis you can do of the second -- of the most recent quarter of earnings results. the one before the current one where companies were passing along these costs and actually making money on the price increases where they each -- many of them said hey, we were able to raise prices and make a few more bucks underneath that we are finally hearing this and you guys are picking up on this, some resistance where companies were going to pass that along and they were not getting the same acceptance of these price hikes that they've had in previous quarters. so that's something that the
market has to re-evaluate here as to the longer termimpact on inflation on the earnings power and their earnings forecasts >> yeah. that's a big debate as we go into the q3 prints and margins will be a huge theme although, steve, i've read some work that it argues the spread between ppi and cpi hasn't collapsed the way you'd think given the headlines. >> no. and -- and carl, you raise a great point that i've been very interested in which is, you know, this process of inflation is not a monolith being process. it's a very dynamic process and we're in the middle of all of it right now. companies go to raise prices and then they raise prices and they go along and they get it and then they come back to raise prices again and they get resistance from the consumer the consumer looks at prices and says hey, i've got a few bucks in my pocket here and i'm okay to pay for it and the next one
comes along, that's too much, that's more pressure on it companies look at the process and say hey, wait a second, can we do more in terms of our business process and in terms of technology i think tech check is the show to listen to for how companies are going to deal with inflation. there are all sorts of technologies and issues out there and products out there that i think companies are increasingly relying upon and if you notice the capital investment numbers have been quite strong and companies are relying on this and saying i can't pass along every buck out there and it's a competitive environment and i have to look at the technology and business process to see if i can cut my costs that way >> every kiosk you see in the mcdonald's would argue that very point and maybe that capex gets us the productivity that will give us safety from inflation. steve, thanks. a lot to cover today on a very busy day on the hill and here at the code conference in los angeles with julia, john, of course, in san diego as the dow is down 512 and the nasdaq down
moment ago let's go back to this morning's sell-off don chu has more on today's dive to the down side >> those comments from senator warren not helping sentiment overall on wall street right now. we are not far away from session lows and to put the moves in context for the nasdaq so far, we are seeing it down 2.5% today, almost 400 points to the down side for the nasdaq composite. now you may recall that earlier this year when we did see that interest rate kind of move higher for the ten-yearbetween 1% and 1.75% and that move higher in interest rates as traders watch what's happening today they're trying to see whether that history will repeat itself. that's one to watch. sector wise, maybe no surprise that the three worst performing sectors are the ones with the highest weighted nasdaq and that is to say communications services and consumer discretionary.
apple, microsoft, google, parent company alphabet, facebook, amazon, those three sectors and they're the three worst performers so far in abnormal impact there stocks to watch, specifically within that group. again, these five stocks make up just around a quarter of the overall s&p 500. apple, microsoft, alphabet, amazon, facebook all around down from 2% to 3% to 4% and those mega-cap names are a huge focus and then we'll end here on a look at some of the big semiconductor stocks and among the worst performers in the s&p 500 and a downgrade from applied materials and not helping things and it's down about 7% right now and kla corp and advanced microdevices are all among the worst performers chip stocks, carl, julia, very much a key focus and traders tend to look at the chip stocks as an indicator for what's to come on the broader tech space, as well. >> dom, as the case load around the world has gotten a little bit better and as we've gotten
some encouraging headlines on vaccines and therapeutics, the street's been out there arguing that the cyclical trade would resume the question is at what point will it begin to make up and in some way for the losses we're seeing in tech >> it's an interesting point, carl, because that kind of re-opening trade and the economically sensitive trade has been one of the biggest winning trades i guess you could call it going all of the way back to the move higher in interest rates that we saw. the oil and gas trade, we know how much energy has bounced back and we know how much the travel and leisure stocks, as well. as you start to take a look at the focus when the tech mini rotation happened earlier this year, a lot of that move was to those value cyclical-type stocks like travel and leisure, like restaurants and like some of those names that got hit the hardest during the pandemic and one thing to keep a close eye on with regard to this is how deep does it go like i said, it was 13% the last
time, julia. we'll see whether or not that move actually gets to be worse this time around a lot of traders out there are looking toward that as the blueprint for what we could see this time around, ules. >> with the nasdaq down 2.5%, let's get back to the nasdaq and josh lipton. josh, give us an update on the biggest laggards as the sell-off deepens. >> you can sort of take your pick of the sub sector i thought we would take a look at the cloud names and we need zoom, and they are all lower right now in today's trade and zoom on track for its worst quarter and going public back in 2019 pel peloton is hard to watch and we know apple continues to leverage its watch. payments are interesting paypal and square not having a strong day and robinhood and coin holding up relatively well.
atvi in the green, take two and not doing much and an interesting sector and it's been rough sledding and some names today having a better trade. back to you all. >> josh, thanks very much. keep your eye on code this afternoon, elon musk, jason kylar of warner, marc benioff i'm scott wapner the sector under heavy selling pressure this hour and interest rates continue to move higher. our investment committee mere to debate what all of that means to your money with me for the hour today, amy r raskin, jim liebenthal and much of the damage on the nasdaq and as you can see it is not solely there. the dow is down just about 500 points and nearly a 1.5% decline.th