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93% of tech funding goes to all-male founders

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Europe’s tech start-up scene has a problem: almost all of its funding is going toward men.

A new report from venture capital firm Atomico found 93 percent of the money invested into European tech start-ups in 2018 went to companies with all-male founding teams.

The report paints a bleak picture for female entrepreneurs in Europe with no progress in the data over the past five years.

“It’s clear that the European tech ecosystem has a challenge around diversity and inclusion,” Tom Wehmeier, partner and head of research at Atomico who authored the report, told CNBC last week.

Atomico’s report, which surveyed 5,000 founders, investors and tech sector employees across Europe, showed discrepancies in perception versus reality around gender discrimination. While nearly 90 percent of respondents said having a diverse team benefits company performance, nearly half of the women who responded said they had experienced discrimination while working in the European tech industry.

“I don’t know, to be honest, any friend of mine who is a founder or entrepreneur who is female who would say I never experienced this,” Tugce Bulut, founder and CEO of London-based market research start-up Streetbees, told CNBC on Thursday.

Bulut said she has experienced discrimination in a variety of forms, from inappropriate comments to dismissive behavior. She said part of the problem is that women are not encouraged to be as “pushy” as men from an early age, which can result in a lack of confidence and entrepreneurship.

“That has a snowball effect over years,” Bulut said.

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Facebook fake account takedowns doubled Q4 2018 vs Q1 2019

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Mark Zuckerberg, chief executive officer and founder of Facebook Inc., speaks during a joint hearing of the Senate Judiciary and Commerce Committees in Washington, D.C., U.S., on Tuesday, April 10, 2018.

Al Drago | Bloomberg | Getty Images

Facebook has stepped up its fight against fake accounts.

On Thursday, in its third periodic Community Standards Enforcement Report, the company said it took action on nearly twice as many suspected fake accounts in the first quarter of 2019 as it did in the fourth quarter of 2018.

The uptick was due to “automated attacks by bad actors who attempt to create large volumes of accounts at one time,” the company said.

On a call discussing the report, Facebook CEO Mark Zuckerberg responded to calls to break up his company through antitrust, saying it would hurt Facebook’s efforts to combat fake news and other content that violates its policies.

“The amount of our budget that goes toward our safety systems is greater than Twitter’s whole revenue this year,” said Zuckerberg on a call on Thursday. “We’re able to do things that I think are just not possible for other folks to do.”

Specifically, Facebook disabled 2.19 billion accounts in the first quarter of 2019 compared to 1.2 billion accounts in the fourth quarter of 2018.

That’s a huge number of accounts considering Facebook reported 2.38 billion monthly active users (MAUs) in its first quarter of 2019. A Facebook spokesperson said the number of accounts it disabled is not included in its MAU figure since the obvious fakes tend to be removed fairly quickly. Still, Facebook estimated that about 5% of the accounts counted in monthly active users are fake.

The latest report comes after Facebook in March announced a pivot to privacy that will eventually shift more of users’ communications to private, encrypted channels via the chat functions of Instagram, Messenger and WhatsApp. Zuckerberg on Thursday said that this pivot will make it harder for Facebook to find and remove the type of content covered in the Thursday report.

“We’ll be fighting that battle without one of the very important tools, which is of course being able to look at the content itself,” Zuckerberg said. “It’s not clear on a lot of these fronts that we’re going to be able to do as good of a job on identifying harmful content as we can today.”

Facebook launched the first edition of the report in May 2018 on the heels of the Cambridge Analytica scandal that rocked users’ and investors’ confidence in the company’s ability to enforce its policies. In an effort to promote transparency, Facebook uses the reports to share information about how it responds to false, violent and graphic information on its platform.

Facebook also shared data about illicit sales of drugs and firearms on its platform for the first time in Thursday’s report.

Facebook said it proactively detected and took action on 83% of 900,000 pieces of drug sale content in the first quarter of 2019. That was up from 77% the previous quarter. (The remaining content in the total count was flagged by users.)

Similarly, Facebook said it proactively detected and took action on 69% of the 670,000 pieces of firearm sale content during the first quarter, compared to 65% the previous quarter.

The company also began including information about appeals and corrections to content removal. Facebook and other social media companies have been criticized by lawmakers, particularly on the right, for being biased against political conservatives.

In the latest edition of the report, Facebook disclosed for the first time the number of pieces of content appealed and restored across various policy areas including spam, hate speech, nudity and terrorism. Of 1.1 million pieces of content appealed under “Hate Speech” in Q1 of 2019, for example, Facebook said 152,000 pieces were restored.

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Watch: Sheryl Sandberg says breaking up Facebook doesn’t address big underlying issues

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Wall Street is becoming convinced the trade war is here to stay and will only get worse

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Presidents Donald Trump and Xi Jinping.

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As stocks plunged Thursday, Wall Street inboxes were filled to the brim with predictions that the White House would go full throttle and slap tariffs on all Chinese goods, in an escalating and prolonged trade war that could begin to hit consumers and slow global growth.

The Dow lost more than 400 points at its lows Thursday, as both the U.S. and China appeared to dig in to their positions. No talks are now scheduled, and China’s Ministry of Commerce Thursday warned the U.S. to act with “sincerity” and change its “wrong actions.”

A number of firms released new reports warning the trade war was getting worse including economists and strategists from Nomura, Goldman Sachs and Bank of America.

“I still think the risk is a full-blown trade war and it’s beginning to look increasingly like one,” said Ed Keon, chief investment strategist at QMA.

Energy led the market lower, but tech names were hit hard, with the S&P technology sector losing more than 3.3%. Tech names are in the cross hairs of the trade war as the U.S. also seeks to thwart Chinese acquisition of U.S. intellectual property. It has also blacklisted China telecom firm Huawei, preventing it from buying U.S. components. The VanEck Vector Semiconductor ETF SMH was down 2.5%, and is now down nearly 15% for the month of May.

Moving into cash

Keon said if the trade war escalates, it could push the stock market into a correction of as much as 10% or more. He has moved more assets into cash and has a larger position in Treasury futures, as he awaits a more certain outcome.

The U.S. moved forward May 10 with raising tariffs on $200 billion in Chinese goods to 25% from 10%, and President Donald Trump has said there could be tariffs on the roughly $300 billion in Chinese exports that do not yet have tariffs. Many of those goods go directly to consumers.

“We now think it is more likely than not that the Trump administration will move ahead with the final tranche of tariffs targeting roughly $300bn in imports from China at a 25% rate. Our baseline scenario assumes that the new tariffs go into effect at some point before end-2019, most likely in Q3 after a meeting between Presidents Trump and Xi at the G-20 in late June,” wrote Nomura chief U.S. economist Lewis Alexander.

Alexander said there could be a short-term truce following the G-20 meeting, talks could breakdown later in the year, resulting in more tariffs. “Without a clear way forward during an intensifying 2020 US presidential election, we see a rising risk that tariffs will remain in effect through end-2020,” he wrote.

Bank of America fixed income strategists, in a note, said the trade war is turning out to be worse than they expected. They sliced their forecast for the 10-year Treasury yield to 2.6% at year end, from a previous 3% based on trade war impacts and the easier policy of global central bankers, who are responding to slower growth, low inflation and concerns about financial conditions. The U.S. 10-year yield sank to 2.30% Thursday, the lowest level since November, 2017. Yields move opposite price.

“Following the latest tariff developments, our year ahead numbers imply a best case scenario for a resolution of the US-China trade dispute, which seems unrealistic. We cut our forecasts,” the Bank of America strategists wrote.

Goldman’s view

Over at Goldman Sachs, economists late Wednesday say they are still hoping for a trade deal, but if there is no deal, the hit to the U.S. and Chinese economies would be greater and inflation would rise.

“While we still think an agreement is more likely than not, it has become a close call and without additional signs of progress over the next few weeks, implementation of the next round of tariffs on $300 billion of imports from China could easily become the base case,” wrote Goldman Sachs economists.

The economists estimates that a further trade war escalation with an across-the-board 25% tariff on all imports from China would boost US core PCE inflation by 0.6 percentage points, compared with a 0.2 percentage point boost now.

“Our model says that an across-the-board 25% tariff on China with a limited amount of retaliation would hit US GDP by 0.5% and Chinese GDP by 0.8%, all over a three-year period,” the economists wrote.

The sell-off in stocks deepened Thursday, and bond prices rose as fresh data PMI data showed a slowdown in services and manufacturing activity in the U.S. and Europe. The U.S. PMI data showed the softest rise in new business since the series began in October 2009.

Keon said the views on Wall Street have been becoming more gloomy about the trade war, but he still believes the consensus expects a deal.

“At some point the fears will get fully reflected in the consensus, and at that point, the selling will have run its course. I still think there’s a fair amount of complacency about the possibility that something will get worked out, and both sides will pull back from the brink,” Keon said. “If it doesn’t get worked out, the market has more downside.”

CFRA analysts warned that the market may be too complacent about the trade talks. “The standstill began three weeks ago and discussions have ceased. There is an increasing chance for the situation to last longer and possibly escalate further,” the analysts wrote. They do not see a significant impact of the higher tariffs, now at 25% , if left in place for the balance of the year.

Second half earnings

But the firm does see downside risk to second half earnings outlooks, given the fact that the increase in tariffs to 25% from 10% on $200 billion Chinese went into affect after most companies reported first quarter earnings and gave their outlooks. They also noted that retailers like Walmart and Macy’s plan to pass along price increases to consumers, to protect their margins.

CFRA said it is cautious on the market now. “We continue to like equities but prefer exposure to defensive and more value-oriented sectors over their growth counterparts right now,” the analysts wrote.

Keon said there are collateral risks as the U.S. and China find new outlets for their battle.

“It’s morphing into a more complex multi-faceted trade war,” he said, adding China could decide to make it difficult for the U.S. to acquire the rare earth minerals it mines. Those minerals are used in electronic equipment, and China is the biggest supplier.

“Each side is looking for where they have pressure points that give them leverage. We have a complicated relationship together so both sides have pressure points,” he said.

Technology is the latest battleground with the Huawei move by the U.S., and there are rising concerns that China will take aim at Apple, either with a consumer boycott or some regulatory move.

“Given the pressure we’re putting on their tech companies, it will end up hurting ours as well, through the supply chain. It’s a complicated situation. Until we get some clarity, tech may well be negatively affected,” said Keon.

The International Monetary Fund warned Thursday weighed in on the trade war, saying that U.S. importers have borne the brunt of the tariffs.

“While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019,” the IMF said. Tariffs on additional goods would hurt consumers in both the U.S. and China, it said.

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Why is Amazon exploring health wearables?

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Amazon CEO Jeff Bezos announces Blue Moon, a lunar landing vehicle for the Moon, during a Blue Origin event in Washington, DC, May 9, 2019.

Saul Loeb | AFP | Getty Images

Amazon is reportedly considering a health-tracking wearable — and a lot of people in the health industry think it makes perfect sense.

The space is extremely crowded, and companies like Apple and Fitbit have been marketing health-tracking wearable devices for years. But Amazon is considering making its own move in the space, Bloomberg reports, with a device that can discern the wearer’s emotional state from the sound of his or her voice, among other things.

The device might never reach consumers. Amazon, like most tech companies, frequently tests ideas internally that never see the light of day.

But it’s likely that Amazon will try, despite the competition and the challenges of developing new hardware. Here’s why it’s a no brainer for the company.

Filling in the gaps

A wearable device would let Amazon collect new types of data about customers to target products and advertisements to them more effectively.

Today, Amazon can theoretically collect lots of health data about its customers from their buying patterns. It sells over-the-counter medicines, glucometers and other health products via its marketplace. It could analyze dietary habits based on buying patterns at Whole Foods. And it has basic demographic information, which has some correlations to health and life expectancy. 

But Amazon has no way to know about its users’ habits once they stop shopping on Amazon, or engaging with an Echo device. It lacks information about its users on the go: Their commutes, lifestyles, social lives and fitness levels.

Meanwhile, other companies are garnering those insights, as wearables become increasingly popular.

“Health wearables have the potential to become as essential to consumers as the iPhone, and Amazon may be soon by competing with Apple as they both increase their focus on healthcare,” said Bill Evans, managing director of Rock Health, a health-tech research and investment firm.

Amazon knows wearables aren’t going anywhere. So if Amazon can carve out its own slice of the market, it could help the company target its customers with health-related products and even lifestyle interventions.

A sense of privacy

An Amazon wearable would give a more private way for consumers to interact with health professionals.

Amazon’s Alexa team recently announced that it is HIPAA-compliant, meaning it can work with health developers that manage protected health information. It would be natural to assume that doctors and therapists will someday be able to communicate with patients via Alexa, but health experts told CNBC that’s not going to happen anytime soon.

In a nutshell, that’s because of privacy issues associated with a voice-activated device sitting in an open space. Imagine a teenager in a household having an intimate conversation with a doctor when a parent or friend walks in and overhears it.

Wearables like wristwatches or earbuds don’t have the same problem. Apple has repeatedly referred to its smartwatch as its most “personal device ever.”

It already has the team

We know Amazon has people with experience in health wearables.

Amazon hired a cardiologist last year called Maulik Majmudar, who has a lot of experience with setting up clinical studies for new wearable products. Prior to joining Amazon, Majmudar worked with a team at a start-up called Quanttus, which was developing a new way to track blood pressure via a wrist-worn wearable device.

The Bloomberg report notes that a beta testing program is underway, which presumably will involve some level of testing to ensure that any health information shared with a consumer is both accurate and sensitive. Majmudar has plenty of experience in doing that, and presenting the data to federal regulators.

Beyond that, it has scientists, engineers and physicians working across many of its research and development groups, including Lab126 and its secretive Grand Challenges health team. It has also hired a handful of doctors in recent years, including Majmudar and others, which would be useful in helping it position the device to the medical industry.

Cornering an important market

If Amazon gets into the wearables business, it could provide a monitoring system of sorts for consumers who are at risk for serious health events. Many older Americans are alone, and lack social connections, says Kyle Armbrester, the CEO of Signify Health, a company that provides services at home to people with chronic medical conditions. That might help Amazon corner a market of older, sicker and wealthier users, which mirrors general demographic trends.

“Simple things like check-ins can provide immense predictive power on how someone is doing, especially if there are deviations from a normal set of behavior over time,” said Armbrester.

Amazon, if it moves ahead with its plans, intends to learn a lot about its user’s emotional states, with a U.S. patent filing from 2017 describing a system in which voice software uses analysis of vocal patterns to determine feelings like “joy, anger, sorrow, sadness, fear, disgust, boredom, stress, or other emotional states.”

At that point, Armbrester suggests, Amazon could use its existing expertise to provide solutions to problems before they become serious, such as a delivery of a medication via PillPack, the Internet pharmacy it acquired in 2018, or a shipment of food.

This would help Amazon build a connection with its consumers — and also unlock new revenue models in the $3.5 trillion health sector.

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