The u. S. And china. Here to break down the Market Action is abigail doolittle. The macro news earlier this morning seemed to be about rising trade tensions between the u. S. And china, but then stocks mostly ending in the green. On thisgoing afternoon . Abigail a really sleepy day overall. You have traders not at their desks, checking out just a little early despite the fact that we have macro news. Plus, it is a repeat of last year. At the end of the day, mixed action. But unlike yesterday, we actually had tech closing higher. The nasdaq 100 higher 0. 4 . The chip sector got hit yesterday, rebounded today. Also indicates that traders are brushing off macro concerns. Where we are seeing those concerns play out our for the china adr, the new york thing index, because baidu and alibaba are in there. And the Golden Dragon china etf, down 4 for another day. That is comprised of Chinese Companies in the u. S. , the fear that these companies will be delisted. This is an interesting dynamic on the week. It is a big week for u. S. Stocks. Shares overchina the last few days, going down closer to 4 . That is something to think about in the week ahead. The u. S. Managed to eke out again, a pretty solid rise of about 3 . If you continue to see china shares go down, that could be bearish on the u. S. Taylor one notable exception continues to be facebook. Seventhp 1. 5 today, a straight day of gains. What is behind the strength in facebook . Abigail it was very surprising to me to learn that facebook is up much more than amazon over the last two months, since the march 23 bottom. Facebook up over that time period. Amazon up about half of that. Amazon, they are saying for the Current Quarter that profits may be an issue. Facebook, their last quarter was better than expected. People are at home, playing games, ecommerce, technology, and it seems this company is adapting very well. Mark zuckerberg recently said they planned to push remote hiring. They are telling current employees that if they want to move out of silicon valley, they can do that. They have discovered a big worry going into working at home was that employees wouldnt be productive. They are finding that employees are more productive at home. They are saying within 10 years 50 of the company could be working remotely. Taylor that is a story we continue to cover here. So fascinating about the changing landscape. Another tech company i wanted to talk about was alibaba. Looks like the consumer over in china isnt as strong in a postpandemic environment. What insights can we glean from alibaba . Abigail that would be my main takeaway also. A little bit surprising that this company didnt knock it out of the park during the lockdown in china. Shares of alibaba falling. Decent First Quarter, but growth at its slowest pace ever. For the year, the forecast really not exciting folks. What you were talking about, not doing as well as some of the ecommerce stocks in the u. S. , is showing alibaba not doing as well. It towere to compare amazon and ebay, alibaba is underperforming. Chinagests that the consumer is not as strong as the u. S. Consumer, and partially this is during the lockdown, coming out of the lockdown. This is something to keep in mind with the shanghai composite down. Perhaps the recovery in china is not what we might hope it would be. The transparency out of that country, not always great. Alibaba suggesting the consumer may not be as strong as we would hope. Taylor abigail doolittle, thank you for joining us. I want to continue our look at alibaba with cfra Equity Analyst john freeman. Talk to me about what you bought from alibabas earnings, 22 growth, the lowest the company has had. Are you worried about the strength of the Chinese Consumer and alibabas position in this quarter . John actually i thought the quarter in terms of fundamentals was strong. If you consider the fact that First Quarter chinese gdp growth estimates for china, it looks like it was down about 6 in thebaba grew revenue cloud in particular. I kind of expected i thought they put up decent numbers. Allthing that bothers me is the back room stuff. There is a lot of concerning thegs with regard to macroeconomic environment. That, weve got a trade war. Taylor lets break those down. I want to start on the macro environment. Lets say chinas growth rate, gdp, and debt levels. If you thought the consumer was stronger than they thought they would be, how does the rest of the macro picture, how are you thinking about this company . Ok, theyhought, performed well in the quarter and i thought the commentary seemed pretty upbeat. However, we had the Chinese Government basically say they are not going to stick to any numbers. Think that is a real problem, not only because of, maybe it is probably worse than estimates it might even be a contraction. It casts a lot of uncertainty on an already overheated market. Debt was 160 otal 200 , then 310 in 2019. Basically debte fueled growth. There may be concerns. Taylor talk to me also about some of the concerns that have come up from a senate bill that would be looking at delisting Chinese Companies on u. S. Exchanges if they cant prove they are not controlled by foreign entities. Alibaba could be on that list. Is that also a worry . John i think it is. I think everybody gets to a negotiated sentiment. In this environment, you cant hold any variable equal. That is concerning. [inaudible] it is that whole variable interest entity. [inaudible] i think that is just an additional risk. Theres [inaudible] taylor john, finally, what about competition . Tencent, any of those a threat here to china . John i dont think so. Soappears that even more ago,maybe it was 10 years the Chinese Government has picked favorites. Companies that cooperated with them. Tencent, that is alibaba. Baidu, a little shaky on that front. At the end of the day, i dont see a lot of competition for the cloud business. China, not a whole lot of expansion for alibaba there. Taylor an always lively and enthusiastic john freeman there. Thank you for joining us. A Biopharmaceutical Company said it has found a treatment for covid19, but is it too soon to celebrate . We will hear from the ceo and cofounder of Sorrento Therapeutics. This is bloomberg. Tolor moving on to the race find a vaccine and therapy for covid19. San diegobased Sorrento Therapeutics recently said that its antibody cocktail could treat the virus infection. 200 , butd over critics increasingly question its efficacy. Ji,ing us is dr. Hnery cofounder and ceo of sorrento. Thank you for joining us. What do you say to those critics about what your lab tests have shown you about being able to cure, treat, provide an immune response to covid19 . Dr. Ji thank you for having me here. Firstly, since the covid19 started, the whole thing is antibodies. The antibody,e detecting the antibody, determining whether you have a aral infection, and theres company doing vaccines it is all about antibodies. Whether we can generate inibodies from the body neutralizing and presenting viral infection. We want a prevention of viral infection with a vaccine. When you have a virus already infected, it is about antibodies. You want antibodies to the virus and you want to get rid of them and preventing them from replicating, but increase the viral load. That would increase the complication down the road. The whole business about covid19 is all about antibodies, from detection, vaccination, and treatment. Taylor theres been some confusion about calling it a cure if it hasnt been tested on humans. Can you clarify your position on calling it a cure, if that was accurate or not . Dr. Ji actually we said that we have a change in coulddy that potentially be safe and effective and potentially would be a cure. This is all pending our testing resulting humans. However it is starting with the first step. You have to have a neutralizing antibody that prevents completely in cell culture settings, preventing virus from infecting the healthy cells. In this case, we have it. It is totally different from anticancer drugs. Whiche anticancer drugs, we do quite a few in our eradicatehere you can the cancer in mice. You dont call that potential cure. Differently in human bodies than in mice. We never called that potentially a cure. Here, it is different. Can prevent the virus from infecting the healthy cells in cell culture settings. ,ou can prevent it completely viral infection, you may be onto something that could be a cure. Preventing them from infecting you, from continuing to infect healthy cells, that is potentially a cure. Taylor do you have an updated timeline on when we could see more studies, wider range human trials, when we could start to distributed toes a massmarket . Dr. Ji what we are doing right now, we have a few hundred people working on this right now, to create the cell lines, manufacture these cells on the guidance from the fda, and we , andacture the product then we are getting to the initial new drug application. We are hopeful we can get the whole package within the next two to three months, and by the window, weyaugust will hopefully get the fda consent, get into the human testing, potentially starting with a patient in icu after infection. If that moves with safety and potential efficacy, we can move forward to potentially get to a prevention in healthy people. Finally, there is some skepticism about acquisition offers that have been made for Sorrento Therapeutics. How do you respond to people that said some of those acquisition offers may have been to move the share price . Are you in talks with anyone to be acquired . This is absolutely nonsense to move the stock. We have a very big antibody library. We have one fda approved drug and we have multiple candidates in the clinical testing, some of clinical study, and the value is tremendous. It is unsolicited from us, which is nothing we can do, but we reject them all. Isbelieve the value tremendously undervalued right now. Taylor dr. Hnery ji of Sorrento Therapeutics, thank you for joining us. Next, a conversation with the ceo of vmware on the companys efforts for Contact Tracing in the u. K. This is bloomberg. Taylor the u. K. s mobile app for Contact Tracing is being codeveloped by vmware. Weve been working closely with nhs, the National Health system of u. K. , to develop what we think is the best capability anywhere in the world. We think you need constituents at the table. You need the epidemiologist, the medical experts, the political bodies, is it safe and proper to get the economy started, the balance of human and personal interest, the emphasis of privacy experts, a balance of near and long term, and then the technologists. Is it implemented well . Is it secure . And we believe working with the nhs, and now we are in trial in the isle of wight, we believe we have a good compromise of all of those, and the top of the heap, does it help save lives . We feel very good about that. The nhs and the government have said we are expecting that to come to the people of the u. K. Very soon. What is the biggest risk to your forecast . Theres a lot of companies that would like to get in on this space. We we are viewing this are developing on behalf of the nhs. Weve also said we are out to make this broadly available. We are far more interested in saving lives and restarting the economy. Weve also open sourced the technology. We believe this has two benefits. It will allow people to mitigate any concern for privacy to look at the code and make sure it is implemented well. Also, we want to raise all boats. We hope many such capabilities do emerge. That over time we absolutely believe in international collaboration. , noe is no boundary national limitation. So information can be shared, people can be identified, and the effects of the pandemic can be minimized. Guy the debate here is quite a simple one. Why is the u. K. Government going down a road that is different to the likes of google and apple . They have decided to produce more automated products. Why is the more centralized product the way to go . Apple, theyle and are working on this and theyve just started to put forward some of their ideas. We have a shipping app. We are months ahead of saving lives and restarting the economy. We are quite thrilled with the momentum of the nhs. We have partnered with them to get this developed rapidly. Little bit of journey for us. Thanks. Pat sorry about that. Secondly, we are engaged with them. We are looking forward that there may be opportunities to build on some of the work theyve done and complement the work that has already been accomplished very effectively with the nhs. Guy one of the key things is that you need fast results in terms of testing. At the moment, that is not being delivered by the nhs, by government in the u. K. Does the product work if we dont have the test results back within 24 hours . What is the product looking like . What kind of results are you is 4, 5,f the data even 10 days old . Periodsh incubation that can be for days 14 days long, anything less than 14 days should be beneficial. Comes,ller that window the greater the efficacy can be. With the four constituents at the table, this is exactly why they need to be sitting at the table. Our job at the table is to make sure it is done well. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Taylor this is bloomberg technology. I am taylor riggs in new york. As the debate over reopening the economy rages on, digital workflow companies serviced with trying to get company safely back into their offices. The Company Released a suite of apps designed for companies to manage essential procedures. Joining us is ceo bill. You created this suite of apps, four different apps helping companies to get employees back into the office. What do you see as the biggest challenge . What are companies telling you the Biggest Challenges they are trying to solve and how this app can help them . Bill companies today realize that it is a work from anywhere environment. Theyre no longer thinking about offices with Desktop Computers as the standard for their workers. They know it will be a hybrid world as workers returned to the office, they will need to follow certain protocols to keep them safe and ensure that wellness and obviously the sustainability of their companies. Servicenow launched a suite of safe workplace applications. Things like employer readiness. So we know if employees are ready to go, we properly screen their health. Of course, ensure the workplace so theentory management, necessary tools are there in a safe work environment. Of course, the safe workplace Management Application so you have to make sure these facilities are up to the highest standards. Finally, you offer this on a dashboard so the leaders of companies can see in each geography, in each facility specifically how things are operating on one sheet of glass. It is comprehensive, its available and it has already been world out to 170 of the Worlds Largest enterprises and governments. 1000 insolesbout in the last 24 hours. Taylor what are the companies telling you about what they need most . Is it help with physical moving of the desks . Is it help with the elevators . Getting your temperature checks . Getting that ppe equipment you described . What are companies saying they need help with the most right now . Bill yeah, its an all of the above. Bothal transformation is the opportunity of our time, and it is also right now in high demand because we have to satisfy the experiences of employees and customers in a very uncertain environment, which means that workflow and really looking at the world from the employee in an customer in now needs to be the most important thing. I call this the workflow revolution because everything is mobile and it has to be consumer grade. People are going to work from anywhere so you have to give them the tools, whether it is their phones, computers, networking gear they need wherever they need to be working. And ultimately, the experience has to be flawless. As i look at companies today, i they do that even though have their employees are ready to go . Have we the Proper Health screenings processes in place . Our application, for example, allows you to check the health of the employees prior to them entering the buildings and store the results, anonymize it, and take a strong look at that facility to really see if you are up to the highest standards. You mentioned it. The bottom line is we have to make sure employees are safe. And if we look at our own teams, for example, coul because we run this ourselves, we are looking at an environment today where we have to study every location around the world and we have to make sure we know every location by floor. Who is sitting there . Is the distance proper . All these facilities have to be worldclass to ensure the scheduling of cleaning crews to maximize safety and minimize disruption in the work. It is all of the above and it is happening at once. We are ready to go. Taylor to get there, employees have to be willing to come in. You mentioned there is a survey asking employees what their level of comfort was. What is that survey telling you about how willing employees are about coming back in . Bill only one third of employees today on the national and international average are looking forward to coming back into the office, which means two thirds are not. Thats why we at servicenow believe it is a work from anywhere world. I, for example, as the ceo of servicenow have a policy in place where no one is required to come into the office. Everyone is enabled to work from wherever they want, where they can be the most productive and feel the most safe. However, you also acknowledge that certain jobs work better in teams and certain people are in environments where they need an office to go to to, for example, get a little peace of mind. Some folks are working with mom and dad at home, with kids running around. And they are working front and environment where they can actually do their work. We are looking at a work from anywhere philosophy and that is what our workflow does. It enables those complex interactions to be organized in a simple way. Taylor let me push back a little bit on that. Facebook, for example, this week saying about half of their work ors could be from home. You are saying employees and definitely be working from home. Does that not then take away some of the demand for your product if you are really focused on getting employees back to the office and helping to design an efficient layout and the products we need at the office . Are you worried a work from home environment could reduce some of the demand for your product . Bill not at all. The opportunity for these products is really in service to our customers and to the world. Our Business Model is not reliant on how many of the product suite we sell. That is not the objective. We gave away 6000 installations of Emergency Response when we first launched the safety applications in march. My goal here is to simply make sure that companies have a way to ensure the health and wellness of their teams. Of course, drive productivity so they can serve their customers and run sustainable businesses. That is our goal. Its not a driver of our Business Model at this point, but it is obviously in high demand. I believe strongly that people should be wherever they need to be to work effectively. I will give you an example. I mean, after the pandemic has hit, i can be in four continents in one day using the zoom technology. Just so happens that zoom is uniquely interfaced with the servicenow platform. I can do business anywhere in the world in real time on the now platform and connect to all of these conversational tools in real time. That drives immense productivity. We have a knowledge bringing together 100,000 registered customers to download and learn and absorb content over a six week period. What we are finding is they are really referring to learn that way as long as the content is exciting. So i think we are in a world where people are going to be less excited about going to events with lots of people, whether it is a tradeshow or a rock concert. Health and wellness of people now will be the primary goal, and that will certainly be the goal in the enterprise as well. Taylor you are the ceo of a 50 billion company. You have a very good gauge on the health of the consumer. Any impact we are seeing from rising tensions between the u. S. And china. As you take a look at the landscape outside a post pandemic world, where is u. S. China rising tensions rank in your order of list of fears as you look across your business . 75 billione become Market Cap Company now without relying on china as a signature marketplace. We are a global company. We are, of course, located heavily across asiapacific and japan. That is a growth market, but we are not reliant on china right now for our Business Model. Were committed to the Capital Markets to have a 10 billion cloud revenue in front of us which we obviously feel great about. And china is not included in that. I think that it is a global economy. There is going to be times where there are conflicts and differences. Some government has to do what it has to do for its constituents. Business has to do what it has to do for its customers. It is clear to me from this crisis that necessities in society will be much closer to home. Safety and wellness will be much more of a priority for the citizens of the world. And government will play a significant role in ensuring that. I believe companies will be less reliant on a margin pursuit than they will a common 80 they will accommodating society and government to help people safe and healthy in the future. That will be a big outcome from this crisis. Taylor the majority of the revenue coming from the united states. How are you looking out to how the u. S. Economy recovers from here . Bill well, the reality is Digital Transformation is a 7. 4 trillion market over the next three years and we are the Digital TransformationMarket Leader in workflow, which is clearly the best way to ensure a consumer great experience and to processes in a simple way. What is cool about servicenow is you dont have to clean up the mess of complexity that has taken place over the last 50 years. We basically use our workflow to rewire the Way Companies are running their business, and we do that in a way that is simple, faster timet, its to value and it has an extraordinary return on investment which is why we are growing faster than any Cloud Company in the world. Better margin profile, 100 customer loyalty, and incredible workforce. Taylor getting back down to the fundamentals, those margins on the Balance Sheet as well as the post pandemic world, my thanks to bill mcdermott. Builds newmicrosoft cloud tools built specifically for health care. We will bring you all the details next. This is bloomberg. Theor microsoft introduced first industryspecific cloud offering this week. The microsoft cloud for Health Care Package which was unveiled tuesday aims to help hospitals whether the covid19 pandemic. To discuss how this could impact the Health Care Ecosystem and microsofts growth, i want to bring in rbc Capital Markets analyst alex, who currently has an outperform rating. Walk me through the integration between health care, technology, microsofts role makes you optimistic about some of the opportunities you see here . Alex hey, taylor. Thanks for having me on. Im happy to comment. We havehealth care the opportunity to interview and host dr. Greg moore at our health care conference. Hes the Corporate Vice president for microsoft health. The first thing he went over was this is a really big opportunity. Health care spending 3. 5 trillion dollars annually just in the u. S. , 7 trillion globally. I think this is a really interesting opportunity for microsoft particularly. Their first industryspecific cloud effort that is bringing together all three of their main franchises, azure, microsoft 365, and dynamics. We think of this crisis has really accelerated the rollout of this offering. It is an opportunity for them to growthshow the dynamic opportunity that is inherited all of their businesses to really take health care into the digital age. Taylor one of the things that microsoft is doing is integrating their azure cloud products, the teams products. His incorporating a family suite of products here, further making it integrated. Microsoft is think very unique in this ability. Bringing together not just where these files are hosted, not just how you communicate with patients, not just how you run the actual workflows around it. All three of them fusing them together into the unique solution specifically tailored towards the health care industry. The way they are doing it is different, too. They are actually partnering with their customers. They are becoming part of the fabric of their customers. He saw a lot of partnerships announced, like the ones with others this week. That is a differentiated approach versus the other tech vendors. Taylor how did you see some of this continuing in a post pandemic world . Are you hoping these are structural changes that hospitals, Health Care Systems will continue to make even if we start to resume life as normal . Alex i think that is a fantastic question. I think the resounding answer is yes. I think right now when we talk to microsoft, we talk to the ecosystem, the Digital Transformation is very pertinent. It is happening all around us. Specifically, the need to scale, to be agile, to quickly change the method of the communication. It is not just about responding to covid. To tools they are building take dr. Burnout out of the engagement layer. Those are definitely post covid opportunities that will be translated into general practices and best practices going forward. You need to get prescreened to go to the e. R. Or icu or urgent care. Those types of experiences will absolutely, in our opinion, come out of this covid situation. Taylor i loved reading your Research Note because it highlighted the future of Digital Health will be in evolution, from improving workflows to utilizing Artificial Intelligence for Drug Discovery and disease diagnosis. Where is microsoft and that evolution that you see is the next forefront . Alex i think microsoft is going to be front and center. I think this is kind of this kind of approach that they have to become a part of the companies they are partnering with become a part of their actual product, and really, i think unlock part of the interview with dr. Moore that was pretty profound. When i asked him what does success look like for microsoft, he talked about basically having 4 billion people on the planet lacking meaningful access to health care and he saw microsoft playing a key role in creating that access and lining with their core values to be corporate citizens. Also, unlocking a really large and brought opportunity, not just to transform society, but to transform microsoft as well. We definitely think it is a big opportunity. We think it is early and we think microsoft will play a pretty key role here. Taylor alex, just on a final again where you see microsoft and that cloud product in the mix of Amazon Web Services is, googles cloud products. How does that enhance them to take on the big leader, which is aws . Alex i think big tech has a role to play. What stood out most to me about microsofts approach is they are not trying to disrupt way health care is being performed. They are trying to empower, they are trying to adapt and trying to enhance. I think that notion of partnering, that notion of data privacy and trust, that is different. That positions them in a unique way, not just in health care, but in multiple industry segments where there is definitely a perception, at least across some industry verticals of competition with amazon and aws. When you are talking to boards and ceos and executives, theres a real opportunity for microsoft closerooked at as a partner as a result of that dynamic. Taylor alex zukin of rbc Capital Markets, thank you for joining us. Willng twitter, shopify allow its 5000 employees to work from home indefinitely even after the dangers of the covid19 pandemic fade and cities start to lift shutdowns. The ceo of canadian ecommerce giant spoke to bloombergs emily chang in an exclusive interview earlier this week. I do think we are seeing the end of the office. It used to be that office was a place where work is being done. And being remote really meant you are using some digital crutch to be basically in the office. I think what covid is going to accelerate is something that would have happened anyways, but many years from now that really everyone rearranges their understanding of at least for companies that can do it, of how the work is digitally done. Expect the we majority of people that work from home in home offices in the future. Emily what percentage of people would still be in the office on a regular basis . Tobias i would say 20 , 25 . Emily really . Tobias i think that i come across a lot of people that say i cannot wait for this whole thing to be over because i would like to go back to the office. I dont think theres a going back to the office. I think we have to go back to something different, potentially potentially worse in some instances. If we all woke up tomorrow and said its time, i think we would get five to say it does not feel right. Think thetually demand is there to go back that people might expect. What we will do for instance, for your meetings, if anyone is remote, probably all of them, it means we would like everyone to be in their own tile in the zoom call or google meets or Something Like that. That alone will have a Significant Impact on the floor plans. We are going to keep our Office Closed and redesigned the floor plans, just like all the other plans. Tile, youtheir own mean their own cubicle . What do you mean by that . Tobias i mean their own little window. Instead of building a room which has six people in and six people are reloading in, we would like to have people have their own tile on the screen. That means the office has to change. An open floor plan or whatever is no longer the kind of things we will see. Tohink it is important adjust to the new realities. Emily would you be comfortable saying your employees to work from home forever if they want to . Jack dorsey has basically said that at twitter. Tobias yes, absolutely. Emily you are not at all concerned about a negative impact on productivity or teambuilding . Tobias it is going to be different. Its going to work better for some people and its going to be worse for some other people. Theres going to be a lot of learning to be done. This version we are doing, we are not really doing a digital by default. We dont have carefully designed digital by Default Companies yet. They are all very bad versions of what that might end up looking like in the future right now. It will never be as bad. It will get significant he better. The norms and principles will evolve around these ideas. I dont think we have much of a choice. Again, there isnt any choice to wake up in a couple weeks and say go back to the office the way we were. I think the people will try to do this and figure out that is not a good strategy. Wee choice is really are passengers on this title wave of change . Or do we jump into the driver seat and embrace it . And try to figure out how to build a global, worldclass company by not getting together that often. Taylor that was the shop of ify ceo. That does it for this edition of bloomberg technology. Happy memorial day weekend. Make sure to stay tuned for wall street week. That is up with david westin. On tonights episode, former treasury secretary Larry Summers and julian chen of the financial times. They will look at the readiness of the consumer to reengage as economies reopen. Lots of questions, all on wall street week coming up next. This is bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. David the American Economy starts to open its doors, but are consumers ready to come back . This is bloomberg wall street week. Im david westin. This week, speaker nancy pelosi. It is very unusual we have such a strong bipartisan advocacy for legislation. David Larry Summers. Larry i think theres a risk physical and going to be a big increase. David bank of americas brian moynihan. Brian the u. S. Economy will be dependent on the activity of the consumer base. David gillian tett. Gillian we have had an extraordinary disconnect between the economy and the stock market. David lloyd blankfein