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Chapter 1: What is the main topic discussed in this episode?
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People who didn't do what John of God wanted them to do, they usually disappeared. John of God was once Brazil's most famous spiritual healer. But in this limited series podcast, we uncover the darker truth behind his global empire of faith and fear. From Exactly Right and Adonde Media, this is Two-Faced, John of God.
Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts. Radio. News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Technology stocks fall, bonds fall, and oil surges as the war in Iran shows no signs of de-escalation.
Investor concerns rise as the possibility of disruption to energy markets, supply chains, and a jump in inflation loom large, Cara. Let's take a look at those markets, energy in particular. Ed, I mean, extraordinary moves that we're seeing in oil. Oil is currently having the biggest move since 2022. At one point since 2020, it's the highest since 2024.
That has implications for the Nasdaq, down almost 2%, and the S&P 500 down almost 2%. Why? Because the Federal Reserve cannot cut into this inflationary environment as the way that the market is anticipating. Bitcoin is off by some 1.7%. The NASDAQ 100 is off session lows, but that is what we're looking at, right?
There is targeted drone and missile activity as a threat to energy infrastructure in the Middle East. New York crude WTI up 8%, $77 a barrel, but also Brent, the global benchmark surging to $85 first time in a long time. U.S. tenure yield had been above 4.1% and on track for its biggest two-day advance since April of last year. We've come off that a little bit.
We are very focused on what is happening in the Strait of Hormuz, right? There are boats that are stuck and cannot carry oil. As a result, the producers, like Iraq, have stopped producing. And by the way, America relies a lot on Iraqi oil in terms of the refiners. So we're going to look at that. There is specific tech. So, let's get to that action with Bloomberg Equities reporter Ryan Vlaselica.
There's a lot to unpick here, right? At one point, the NASDAQ 100 was on track for its biggest drop since October, certainly since November when we got that strong jobs print. There is inflation concern, but broadly, where is the risk-off sort of mentality and sentiment you're seeing, Ryan? Good morning. Thanks for having me.
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Chapter 2: What market reactions are we seeing due to the Iran conflict?
And then even before Iran, defense looked like an area where there was going to be tremendous innovation. I mean, what we're continuing to see is that people are looking for new technology, new approaches. We have an increased geopolitical conflict in this world. So being in defense is a good place to be. And that was pre-Iran.
And as it relates to AI, I think there will remain some bright spots, particularly in infrastructure, particularly in cybersecurity. Those are going to be good places to be. And over time, I think people will gain more confidence as we see earnings come out. I mean, don't forget, we've still got a couple more weeks of earnings to go this week.
We're going to have news out of a couple of the technology conferences. And hopefully that will start to calm this market down a little bit more. And people will realize that this is a bit of a sell-off that is not applicable to all. Just really quick, and trying to keep this on the news, DHS is warning, right, which seems inevitable, about the threat to citizens in this country in response.
Cyber. Just give me more on cyber and why it's not getting more traction in this environment.
Chapter 3: How are energy markets affected by the conflict in the Middle East?
Yeah, I would say two things. First and foremost, we've always known that Iran, via its proxies like Hezbollah, may have the capacity to do something in the American homeland. So I think that's partially what we're hearing from the administration. I think more saliently, though, is that people need to invest in cyber right now.
The attack surface for both the private sector as well as the public sector could not be any higher in terms of their threat environment. So everybody should be paying more attention to what they need to do because the Iranian cyber capability is quite strong. Ryan White, Piper Sandler, great to have you here on Bloomberg Tech. I want to get to what happened in Korea overnight.
Chapter 4: What are the implications of rising oil prices on tech stocks?
Shares of Samsung and SK Hynix both falling by around 15%. There was a holiday in the Korean markets on Monday. So this was the first session since the war in Iran and the events of the weekend. But remember that the KOSPI, the main index in Korea, has been a massive outperformer year to date, led by Samsung and SK Hynix.
It's just a market reaction, a sentiment reaction, particularly with the energy infrastructure concern in those two names. But it was a big move, and maybe that's transferred carry to chip names in the U.S. in this session. Suddenly, extraordinary sell-off over there. Meanwhile, coming up, we look at some extraordinary moves from Sam Altman, calling OpenAI's Pentagon deal rollout sloppy.
That's next. This is Bloomberg Tech. Effective marketing is smarter, not louder. Cutting-edge technology alone won't deliver better experiences or outcomes. Adobe helps marketers use data and AI to drive smarter engagement, reduce noise, and use AI effectively and responsibly. The brands winning in the AI era aren't the ones chasing every trend.
They're the ones with the right systems and strategy. It's time to lead with insight, agility and innovation. It starts with Adobe. Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepka in London. We're the hosts of the Bloomberg Daybreak Europe podcast.
We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now.
And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning.
You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts. For decades, people traveled across the world to see John of God, desperate for cures no doctor could offer. And when they arrived, they saw things they couldn't explain. This is real.
This guy's actually doing surgery, and it's a miracle. I never believed that miracles were real until that point. But behind those adoring crowds was something much darker. One of the reasons why I never went to the police is because I saw at least five or six men with guns everywhere he went. That was clear to me, like, close your mouth, don't open your mouth, don't say anything.
I'm your host, Martina Castro. And in the podcast Two-Faced, John of God, we'll look back on a man who claimed he could perform miracles and got people from all around the world to believe him. From Exactly Right and Adonde Media, this is Two-Faced, John of God. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
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Chapter 5: How is investor sentiment shifting in response to geopolitical tensions?
New York crude is where the action lies. We're up more than 8%, Ed. We're seeing this inflationary tension mean that people think the Federal Reserve cannot cut into the situation. Therefore, that has a long-term impact on the value of stocks right now.
We're way off session lows, but at one point we're on track for the biggest drop on the Nasdaq 100 since October when the president was really escalating the tariff tension with China. That's how markets are weighing in here. We're also tracking shares of NVIDIA. One of the top stories on the Bloomberg terminal and on dotcom, down 1.6 percent. The U.S.
is weighing new limits on NVIDIA's AI chip sales to China, including a potential cap. of 75,000 of its H200 accelerators to any one single Chinese company. That's according to sources. Bloomberg's Ian King is here to explain it. When that regulatory filing hit at earnings, they were pretty clear that they have no idea whether China would even let the chips in.
But what we're reporting is on the U.S. side, putting a cap on the export. The cap level and the strategy behind it, what do we know? Yeah, I mean, the understanding had been that the U.S. side was more amenable to this happening and that China was kind of the roadblock. But now what we're reporting is that there are more restrictions, more kind of fine print details being piled upon it.
And that obviously makes the situation more difficult and the likelihood of major shipments and major business less likely. And that's why, in many ways, NVIDIA and Jensen didn't include any China business in their forward-looking guidance. So do we just take it from here that China doesn't want even HG100s and where we are in terms of a potentially crafted Blackwell offering?
Yeah, I mean, the way that NVIDIA's leadership have phrased it is like, look, you'll know the Chinese have given us permission when you see the Chinese companies make orders. We haven't seen them make the big orders yet. So obviously, that doesn't look positive. It doesn't look hopeful for the way things are progressing.
Going back to the basics of what Caroline just said, the forecast for sales is $78 billion plus or minus 2% in the quarter, does not include any China. But when you did your earnings piece the next day, a lot of the analysts were like, well, China is then therefore potential upside in the event they are allowed to do it. Jensen's modeling for that or not? It doesn't appear to be.
I mean, they're being prudent right now. I mean, the potential upside came from the detail that we got during earnings, which is, hey, we got a few licenses. So Wall Street was like, oh, great, crack of light. Here we go.
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Chapter 6: What challenges are tech companies facing amid the current market conditions?
And then now we get this. And obviously, we still haven't seen any movement from the China side either. Now, China used to be a significant area of revenue. What was it? Almost 20% at one point for NVIDIA numbers or thereabouts. Where's the Middle East at? Can I just ask something to throw a curveball into the mix in the current geopolitical situation? No, that's a very good question.
Obviously, NVIDIA cares very much about what's called sovereign AI, which is countries' attempts to try and build their own infrastructure. We've seen that in Saudi Arabia. We've seen that in the UAE. And these are areas where there's a lot of cash and there's a lot of investment in this future economy being made. So any threat to that would obviously be a threat to this whole system.
Well, certainly, NVIDIA is one of the key legs to the downside in a points perspective today. Ian King, we're always so thrilled to have his expertise, and it's nice to be sat next to him as well.
Meanwhile, let's take a quick look on what's happening with Apple, because if you didn't realize, amid the torrent of news that you're trying to digest today, the company is actually introducing refreshed MacBook Pros and Airs with an M5 chip. The company also raising the prices of those products amid an industry-wide memory crunch. Other products announced include two new external monitors.
As you see, it shows down 0.9%, so actually better performing than the rest of the market, Ed. Welcome back to Bloomberg Tech. War in the Middle East. We take a look at what's happening in the markets amid a U.S.-Israeli focus on Iran. We've got the Nasdaq 100 off by 1.6%. Micron leading you on the points perspective, the downside. So, too, is NVIDIA. We're seeing the S&P 500 off by 1.5%.
Bitcoin is acting like a risk asset today. We're back lower, but it's still elevated versus where it was on the weekend. 68,800 is where we trade. Move on to individual names. Because it is important to see where the impact of tension and ongoing war in the Middle East, where it has and what it does to assets owned by Amazon, for example.
AWS warning of prolonged disruptions to its services after drone strikes damaged three of its data centers in the Middle East. They said the company said drones had directly struck two facilities in the UAE and damaged infrastructure near other facilities in Bahrain.
Palantir, the sentiment shift today is so negative that even companies that are meant to benefit from the focus on defense and defense tech are on the lower side. We're off by 1.4% after a rally yesterday. More analysts are going positive on Palantir. Of course, software that's used by the government very much into defense perspective.
And we're seeing 20 out of 31 analysts now saying buy the stock head. Shares of defense firms have joined the market sell-off, even as the conflict in Iran reinforces their critical role, the critical role of the U.S. primes. Let's bring in Bloomberg Intelligence Senior Analyst Wayne Sanders for more.
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Chapter 7: How is the U.S. military adapting its strategies in response to drone threats?
I'm your host, Martina Castro. And in the podcast Two-Faced, John of God, we'll look back on a man who claimed he could perform miracles and got people from all around the world to believe him. From Exactly Right and Adonde Media, this is Two-Faced, John of God. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Nvidia has agreed to invest $4 billion in the photonics firm's coherent momentum. The two equally sized bets by the AI leader should ensure demand for advanced optical components used in data centers. Let's discuss the coherent CEO, Jim Anderson. I think a reasonable place to start
to start is to understand the role that a laser has in the server design and in the data center more broadly, how servers talk to one another. Because the market reaction is quite clear to how investors feel about this, but where does the technology fit in? Yeah, that's a good question. First of all, thank you for having me on. I appreciate it.
Yeah, the way you can think about it is a laser is really ultimately it's photonics, and it's really about light. And And it's about using light to transmit data in the data center. And there's a good portion of the data center already today where all of the communication of the data is happening with light.
And the reason that light gets used, rather than, for instance, an electrical signal, is light is the absolute fastest, most power-efficient way to transmit data. A good portion of the data center already runs 100% on photonics, optical connections.
But as we move forward, building new data centers, as we see a massive ramp in the amount of data flowing through these data centers, more and more of the data center connections will be based on light, on optical photonics. So in this arrangement, you'll take the funds for R&D purposes, but inside of it, there is a purchase opportunity for NVIDIA. NVIDIA's done a lot on silicon photonics.
They've told me about it for quite a while now. What's new in it for them? What is it that they're able to now do that they couldn't do themselves? Well, they're relying on us to bring the photonics expertise, right? So NVIDIA FRES has been a long-term partner, actually over 20 years as a customer and a partner through their Mellanox acquisition.
So we've had a long history with NVIDIA, and really what we're doing is working together to use photonics to advance the architecture of data centers, to find new innovation within data centers. And the key thing that photonics or optics brings is incredibly power efficient data transmission. Because again, there's no more efficient- As opposed to transferring via electrons. Exactly.
So as you increase the data rates, as you increase the amount of data that's being transmitted, You have to, if you're using electrical today, eventually you'll hit a physics limit and you'll be kind of forced to switch to optical. And so we'll see more and more of the connections within the data center move to optical. And that's really where we come in.
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