WEBVTT - Trump Maintains Naval Blockade; Big Tech Earnings Wrap with Apple

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Good morning, I'm Nathan Hager and I'm Karen Moscow. Here

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<v Speaker 2>are the stories we're following today.

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<v Speaker 3>Karen, we begin with the latest on the standoff between

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<v Speaker 3>the US and Iran. President Trump is promising not to

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<v Speaker 3>let up on the naval blockade of Iran's ports to

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<v Speaker 3>try to pressure Tehran back to the negotiating table. The

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<v Speaker 3>President says Iran's economy is a disaster and the impact

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<v Speaker 3>on US prices at the pump won't last.

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<v Speaker 1>The country's do really well, and that's despite a military operation.

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<v Speaker 4>I don't call it a work.

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<v Speaker 1>Could you rather have a military operation?

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<v Speaker 5>We're really.

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<v Speaker 4>I mean, Iran is dying to make a deal. I

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<v Speaker 4>can only tell you that.

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<v Speaker 3>I was President Trump speaking to reporters in the Oval Office.

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<v Speaker 3>But Iran is holding firm. As we hear from Bloomberg's

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<v Speaker 3>Patrick Sykes in Istanbul.

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<v Speaker 1>The supreme leader in Iran, who we still haven't seen

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<v Speaker 1>person or even heard his voice, is still in effective,

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<v Speaker 1>hiding and thought to be wounded. He said very clearly

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<v Speaker 1>that Iran wouldn't be compromising on its nuclear technology or

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<v Speaker 1>its missile program. And then overnight as well Iran has

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<v Speaker 1>said that incepted some drones overnight, So it still feels

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<v Speaker 1>like it's very tense, even above Tehran itself.

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<v Speaker 3>Bill brigs Patrick Sykes reports Iranian officials are warning the

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<v Speaker 3>blockade will keep driving up oil prices. Axios is reporting

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<v Speaker 3>the President Trump got a briefing from US Central Command

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<v Speaker 3>and the head of the Joint Chiefs of Staff about

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<v Speaker 3>further military options against Iran.

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<v Speaker 2>Nathan Defense Secretary Pete Haygesith and other Pentagon officials wrapped

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<v Speaker 2>up testimony on Capitol Hill, this time answering questions before

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<v Speaker 2>the Senate Armed Services Committee. Haigesith defended the US position

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<v Speaker 2>about the war with Iran to Democrat Kirsten Gillibrand up

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<v Speaker 2>New York.

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<v Speaker 3>So the question I would ask to you and to

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<v Speaker 3>others is what is the cost of a nuclear armed Iran?

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<v Speaker 3>What is the cost to the American people's The world's

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<v Speaker 3>most dangerous regime has a weapon.

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<v Speaker 6>But the truth is they don't want war coming to

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<v Speaker 6>this shore, and when you do decapitation operation, the likelihood

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<v Speaker 6>is going to be exchanged. In the United States, There's

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<v Speaker 6>no evidence that we are safer because of this war.

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<v Speaker 6>We did not have any evidence that Iran intended to

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<v Speaker 6>eminently attack this country in any way, shape or form.

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<v Speaker 2>On Wednesday, Hey, Seth God, you'rerilled buy a House panel

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<v Speaker 2>who questioned the US justifications for the war in Iran.

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<v Speaker 4>We're caring.

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<v Speaker 3>The longest partial government shut down ever is over. President

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<v Speaker 3>Trump has signed the bill to fund most of the

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<v Speaker 3>Department of Homeland Security except for immigration enforcement. Republicans planned

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<v Speaker 3>to pass those funds separately in a budget bill that

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<v Speaker 3>won't require Democratic votes. Here's House Speaker Mike Johnson, this.

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<v Speaker 7>Will relieve pressure from the Department of Homeland Security Sectuary Mullen.

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<v Speaker 4>We greatly relieve the President will, the administration will.

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<v Speaker 7>We were not going to have lines at TSA.

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<v Speaker 5>Everybody who get their paychecks.

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<v Speaker 4>Now we'll get moving forward.

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<v Speaker 3>House Speaker Mike Johnson says Republicans overcame their differences on

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<v Speaker 3>the bill after the White House warned it had run

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<v Speaker 3>out of funds to pay TSA workers. This month, Democrats

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<v Speaker 3>had demanded restrictions on ice enforcement after the killings of

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<v Speaker 3>two US citizens in Minnesota, but Republicans rejected their proposals.

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<v Speaker 3>Democrats say the issue will come back to hunt Republicans

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<v Speaker 3>in the midterms.

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<v Speaker 2>Let's turn to the markets now, Nathan, where the record

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<v Speaker 2>run on Wall Street continues. The S and P five

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<v Speaker 2>hundred and Nasdaq enter today's session at all time highs.

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<v Speaker 2>The SNP rows ten percent in April, it's best month

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<v Speaker 2>since twenty twenty. Matt Raw is senior portfolio manager at

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<v Speaker 2>Men Group.

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<v Speaker 8>I think there's an assumption that at some point in

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<v Speaker 8>the relatively near term, we're going to get a resolution

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<v Speaker 8>to the straits being reopened, the normalization of crude. So

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<v Speaker 8>for now, the market is saying that the AI benefit

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<v Speaker 8>and the potential upcrash associated with AI has a higher

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<v Speaker 8>weight than the potential near term consumer spending drag.

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<v Speaker 2>Matt Row of Man Group. The S and P five

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<v Speaker 2>hundred closed above seventy two hundred for the first time

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<v Speaker 2>ever yesterday.

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<v Speaker 3>Big company news to tell you Karen. Share of Apple

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<v Speaker 3>are up more than two and a half percent in

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<v Speaker 3>early trading. The iphonemaker delivered a surprisingly strong revenue forecast

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<v Speaker 3>for the third quarter. We get more from Bloomberg Tech

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<v Speaker 3>host ed Ludlow Change.

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<v Speaker 9>In Fortunes for the stock change in sentiment on how

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<v Speaker 9>Apple's doing. The guide for the current period the June

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<v Speaker 9>quarter is that revenue will grow fourteen percent to seventeen

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<v Speaker 9>percent year on year. There is strong demand. There was

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<v Speaker 9>one notable moment incoming. CEO John Turnis did speak briefly

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<v Speaker 9>on the call. He said there's an exciting product roadmap,

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<v Speaker 9>but specifically declined to give any details. So the key

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<v Speaker 9>takeaways strong demand, some supply constraints, manageable cost pressures, and

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<v Speaker 9>it was all about the guidance that was good enough

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<v Speaker 9>to change the course of direction for the stock, but

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<v Speaker 9>also how the market felt about what was a beat

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<v Speaker 9>but not a blowout for Apple in.

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<v Speaker 4>The quarter gone.

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<v Speaker 9>This is Ed Ludlow for Bloomberg News in San Francisco.

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<v Speaker 2>All right, Ed, thank you well. Shares of Roadblocks, they

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<v Speaker 2>are plunging down almost twenty twenty three percent. The video

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<v Speaker 2>game company reported first quarter users that fell short of

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<v Speaker 2>analyst estimates, and the drop comes after Roblocks implemented a

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<v Speaker 2>safety features restricting how kids, who make up a majority

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<v Speaker 2>of his audience can use the platform. Time now for

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<v Speaker 2>look at some of the other stories making news in

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<v Speaker 2>New York and around the world, and for that we're

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<v Speaker 2>joined by Bloomberg's Michael Barr.

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<v Speaker 5>Michael, good morning, Good morning, Karen King, Charles and Queen

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<v Speaker 5>Camilla have wrapped up their visit to the US. During

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<v Speaker 5>his visit, King Charles gave a speech before Congress, attended

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<v Speaker 5>a state dinner, and paid a visit to New York City.

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<v Speaker 5>On their last day, the royal couple paid their respects

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<v Speaker 5>at the tomb of the Unknown Soldier at Arlington National Cemetery,

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<v Speaker 5>and they celebrated America's two hundred and fiftieth birthday at

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<v Speaker 5>a block party in Virginia. More than a million people

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<v Speaker 5>in Lebanon are expected to face food in security by August,

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<v Speaker 5>according to a new analysis from the United Nations and

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<v Speaker 5>World Food Program. Joseph Bellevo is the executive director of

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<v Speaker 5>the humanitarian group Global. He says the food crisis is

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<v Speaker 5>due to the war in Iran, displacement and economic pressures.

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<v Speaker 10>We're incredibly stressed. The entire health system was already vulnerable,

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<v Speaker 10>was already fairly weak prior to March second, when this

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<v Speaker 10>round of conflict erupted. Since that time, one hundred and

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<v Speaker 10>forty seven hits on medical facilities.

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<v Speaker 5>Joseph Bellevue with med Global. A suicide note purportedly written

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<v Speaker 5>by the convicted sex offender Jeffrey Epstein is locked inside

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<v Speaker 5>the case file of his former cellmate, convicted murderer Nicholas Tartaglioni.

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<v Speaker 5>He told The New York Times it was written on

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<v Speaker 5>paper from a yellow legal pad and tucked inside a book.

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<v Speaker 5>Tartaglioni says he found the purported suicide note. In July

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<v Speaker 5>of twenty nineteen, a school board meeting got so heated

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<v Speaker 5>in Philadelphia that the board members shifted to a virtual format.

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<v Speaker 5>The board approved the controversial three billion dollar facilities plan

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<v Speaker 5>that includes, among other things, the closure of seventeen public

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<v Speaker 5>school Lisa Haver is with the Parent and community group

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<v Speaker 5>Alliance for Philadelphia Public Schools.

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<v Speaker 4>I'm horrified.

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<v Speaker 3>I'm like, how many times can these students and parents

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<v Speaker 3>come and say we don't want to save our school.

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<v Speaker 5>District leaders say it's necessary because they have to address

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<v Speaker 5>a three hundred billion dollar deficit. Global News twenty four

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<v Speaker 5>hours a day and whenever you want it with Bloomberg News.

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<v Speaker 5>Now Michael barrm this is Bloomberg Karrot.

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<v Speaker 2>All right, Michael Barr, thank you, Thanks Michael. Time now

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<v Speaker 2>for our Bloomberg Sports update, and for that we bring

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<v Speaker 2>in John stash Hour.

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<v Speaker 4>Thanks Darren An.

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<v Speaker 11>NBA playoff blowout that Nicks in Atlanta led forty to

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<v Speaker 11>fifteen after the first quarter in eighty three to thirty

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<v Speaker 11>six at halftime. The final was one forty to eighty nine.

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<v Speaker 11>They win the series four to two. They'll find out

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<v Speaker 11>tomorrow who they'll play the next round. The Celtics and

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<v Speaker 11>Sixers are going to a game seven in Boston after

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<v Speaker 11>Philly stayed alive for a second time. Minnesota finished off Denver,

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<v Speaker 11>winning four games to two in the Stanley Cup playoffs,

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<v Speaker 11>five to two wins at home for both Minnesota and Anaheim.

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<v Speaker 4>Both teams move on. That's your Bloomberg Sports update.

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<v Speaker 2>Stay with us more from Bloomberg Daybreak coming up after this.

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<v Speaker 3>Coast to coast on Bloomberg Radio, nationwide on Serious XM,

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<v Speaker 3>and around the world on Bloomberg dot Com and the

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<v Speaker 3>Bloomberg Business app.

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<v Speaker 4>This is Bloomberg Daybreak. Good morning, I'm Nathan Hager.

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<v Speaker 3>Easily the biggest week for earnings this quarter is closing

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<v Speaker 3>out with surprisingly strong results from Apple. The iphonemaker delivered

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<v Speaker 3>a revenue forecast blowing past Wall Street estimates. So it

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<v Speaker 3>did come with some warnings that memory chip costs you're

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<v Speaker 3>going to keep going up and a shortage of Mac

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<v Speaker 3>computers could last for several more months. Here with us

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<v Speaker 3>for some morning after analysis is Dan Ives, the global

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<v Speaker 3>head of Tech research at Wedbush Securities. Always great to

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<v Speaker 3>talk tech with you, Dan, And I did see your

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<v Speaker 3>post on x saying that these earnings sure in a

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<v Speaker 3>potential golden era for Apple.

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<v Speaker 4>Tell me more, good morning.

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<v Speaker 7>Good morning. Look, I mean me and you.

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<v Speaker 12>You know, if you think about over the last year,

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<v Speaker 12>there have been ups and downs, but we're actually really

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<v Speaker 12>more downs and ups in terms of what we've seen

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<v Speaker 12>the last few years.

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<v Speaker 7>This was as robust of a quarter and god as

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<v Speaker 7>we've seen a few years.

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<v Speaker 12>I mean, this is almost a mini supercycle that's playing out.

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<v Speaker 12>I think there's a stock that's going to have huge

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<v Speaker 12>upside here and it's just as Cook's handing the baton

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<v Speaker 12>to turnus.

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<v Speaker 7>Really a golden night, not just for the next but

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<v Speaker 7>for Apple.

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<v Speaker 3>Okay, I did see your note as well, putting a

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<v Speaker 3>focus in particular on the results out of China. Is

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<v Speaker 3>it going to be particularly important for Apple to keep

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<v Speaker 3>growing the market in China to keep its momentum going.

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<v Speaker 7>Look, Nathan, that's the hearts and lungs. And if you

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<v Speaker 7>think about the last year, that's been a headwind. Now

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<v Speaker 7>it's a talent.

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<v Speaker 12>Now, look, some of that is product cycle, some of

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<v Speaker 12>it's also Cook being part politician navigating what we've seen

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<v Speaker 12>China the last year. Now it's a talent and that's

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<v Speaker 12>the hearts and lungs of Apple strategy. Twenty percent of

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<v Speaker 12>iPhones come out of China, a huge sort of flex

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<v Speaker 12>the muscles moment for Cooper tina.

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<v Speaker 4>I mentioned the memory chip costs.

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<v Speaker 3>This is something that's been coming up quite a bit

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<v Speaker 3>of this particular tech earning cycle. The chip costs going up.

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<v Speaker 3>Is that going to be a crimp on Apple's margins?

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<v Speaker 3>Are consumer is going to have to start thinking about

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<v Speaker 3>prices going up for their next round of iPhones.

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<v Speaker 7>It's really the latter.

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<v Speaker 12>I think you'll have one hundred and maybe one hundred

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<v Speaker 12>and fifty dollars price increases. Book Some of that they'll

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<v Speaker 12>absorb through the supply chain, but ultimately this is something

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<v Speaker 12>that you know they're probably they're going to have.

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<v Speaker 7>To hike prices a bit.

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<v Speaker 12>Nothing significant, it's just what's happened in memory. It's a

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<v Speaker 12>memory supercycle. And to get on the line for those chips,

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<v Speaker 12>there's shortages.

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<v Speaker 7>We've seen across the board. Given AI revolution.

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<v Speaker 3>Do consumers stomach that those kinds of price increases?

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<v Speaker 4>Do you think?

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<v Speaker 7>Look?

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<v Speaker 12>I think when I think about called three hundred million

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<v Speaker 12>and have an upgrade to iPhone, there will be a

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<v Speaker 12>lot of in send thems out there from the carriers.

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<v Speaker 12>Carriers will also probably you know, ultimately absorb some of that.

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<v Speaker 12>It's maybe a one percent churn from that number, maybe

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<v Speaker 12>one and a half percent, but that's not something too significant. Look,

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<v Speaker 12>when it comes to pricing, navigating the supply chain when

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<v Speaker 12>to raise prices, the Hall of Fame or Cook.

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<v Speaker 7>News when to do it? And I think that's what

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<v Speaker 7>you'll see.

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<v Speaker 3>So how does this set things up for John Turnas

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<v Speaker 3>when he does take the baton and thinking about the

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<v Speaker 3>Worldwide Developers Conference coming up as well?

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<v Speaker 4>What about the AI story?

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<v Speaker 2>Dan?

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<v Speaker 7>Well, first off, if you go.

0:11:47.960 --> 0:11:50.600
<v Speaker 12>Back, I mean there's a surprise obviously when Cook announce,

0:11:50.720 --> 0:11:54.280
<v Speaker 12>but now knowing these numbers, you see why he did

0:11:54.320 --> 0:11:57.040
<v Speaker 12>it because he's he's handled the toon a great time,

0:11:57.080 --> 0:11:58.720
<v Speaker 12>going to them with a mini supercycle.

0:11:59.040 --> 0:12:01.280
<v Speaker 7>But the reality is turnus, it's going to be about

0:12:01.320 --> 0:12:03.600
<v Speaker 7>AI that will define Apple I.

0:12:03.559 --> 0:12:06.960
<v Speaker 12>Think in WWDC is where they ultimately released the first

0:12:07.000 --> 0:12:10.319
<v Speaker 12>part of that strategy in terms of serie AI with

0:12:10.520 --> 0:12:13.240
<v Speaker 12>Jem and I, we think ultimately is a subscription service

0:12:13.840 --> 0:12:15.880
<v Speaker 12>that's going to be important. I think that's where seventy

0:12:15.920 --> 0:12:19.040
<v Speaker 12>five to one hundred dollars per share as the consumer

0:12:19.160 --> 0:12:21.319
<v Speaker 12>AI revolution go should get Fatina.

0:12:21.600 --> 0:12:24.560
<v Speaker 3>In our last minute, Dan, what's your overall take on

0:12:24.720 --> 0:12:26.920
<v Speaker 3>how this week of earnings went? It seemed like it

0:12:27.000 --> 0:12:29.080
<v Speaker 3>was kind of hit or miss when it comes to

0:12:29.160 --> 0:12:33.040
<v Speaker 3>how these hyperscalers are monetizing AI.

0:12:34.880 --> 0:12:36.240
<v Speaker 7>Look, this is.

0:12:36.240 --> 0:12:41.800
<v Speaker 12>About as bullsh underlying fundamentals, guy, that you could have

0:12:41.840 --> 0:12:45.760
<v Speaker 12>seen from big tech, specifically in terms of the cloud players,

0:12:45.880 --> 0:12:49.960
<v Speaker 12>everything you're seeing from Microsoft, Google, Amazon, and even Meta

0:12:50.000 --> 0:12:51.960
<v Speaker 12>from a cap Bax perspective.

0:12:51.600 --> 0:12:54.400
<v Speaker 13>Look, I think the bear thesis essentially got thrown out

0:12:54.400 --> 0:12:56.800
<v Speaker 13>the window this week. I think tech stocks are up

0:12:56.840 --> 0:13:00.240
<v Speaker 13>another ten to fifteen percent higher and there is no

0:13:00.440 --> 0:13:03.440
<v Speaker 13>better validation you could have seen from big tech.

0:13:03.679 --> 0:13:06.360
<v Speaker 7>Fool's going to the weekend pretty happy.

0:13:07.040 --> 0:13:10.840
<v Speaker 3>In our last just ten seconds here you talk about

0:13:10.880 --> 0:13:12.720
<v Speaker 3>what time it is in the AI party.

0:13:12.760 --> 0:13:14.160
<v Speaker 4>What time do you think it is now?

0:13:14.320 --> 0:13:17.400
<v Speaker 7>Well, it's about eleven thirty pm. Maybe the cops came

0:13:17.520 --> 0:13:18.400
<v Speaker 7>try to break up the.

0:13:18.360 --> 0:13:21.320
<v Speaker 12>Party over the last month, they left the music's back on.

0:13:23.160 --> 0:13:26.079
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