Speaker 1: Live from the Bloomberg Interacted Burger Studios. This is Bloombergy
Speaker 1: Daybreak for Friday, January. Coming up this hour, Intel shares
Speaker 1: plunge after one of the gloomiest forecasts in its history.
Speaker 1: Hasbro is the latest company to slash jobs. Republicans may
Speaker 1: be willing to raise the dead select temporarily, and Japan
Speaker 1: and the Netherlands moved closer to joining the US on
Speaker 1: China ship restrictions. A guilty verdict for the man who
Speaker 1: killed eight people along the New York Punk Path, plus
Speaker 1: cities brace for the video release of Memphis officers in
Speaker 1: a deadly beating. I'm Michael bar More Ahead, I'm John
Speaker 1: Stash Aaron sports thrilling overtime win for the Knicks in Boston,
Speaker 1: the Nets lost to Detroit, the Devil's lost in Nashville.
Speaker 1: That's all s traded ahead on Bloomberg day Break on
Speaker 1: Bloomberg eleven three on New York, Bloomberg one, Washington d C,
Speaker 1: Bloomberg one oh six one, Boston, Bloomberg nine sixties and
Speaker 1: Francisco Sirius x M one nine team and around the
Speaker 1: world on Bloomberg Radio dot Com and via the Bloomberg
Speaker 1: Business Good morning. I'm Nathan Hagar and I'm Karin Moscow.
Speaker 1: Here are the stories we're following today. Let's begin with
Speaker 1: an earnings disappointment from Intel. The shares are down more
Speaker 1: than nine percent after the downbeat results. Let's get the
Speaker 1: latest live from Bloomberg's Steve Rappaport. Good morning, Steve, Good morning, Nathan,
Speaker 1: and Karen. Intel's out with a forecast that's one of
Speaker 1: the worst in the chip maker's history, predicting a gross
Speaker 1: margin of thirty seven for this quarter. Despite that outlook,
Speaker 1: CEO Pat Gelsinger says the company remains focused on the
Speaker 1: big picture. I want to remind everyone that we are
Speaker 1: on a multi year journey. We remain focused on the
Speaker 1: things that are within our control as we navigate short
Speaker 1: term headwinds while let's secut into our long term strategy.
Speaker 1: Gelsinger adding he thinks momentum will stabilize this year. Live
Speaker 1: from New York, I'm Steve Rappaport, Bloomberg Daybreak. All right, Steve,
Speaker 1: thank you all. Disappointing earnings are also taking a toll
Speaker 1: on Hasbro this morning. Shares at the Toy are down
Speaker 1: more than five percent, and Bloomberg's Charlie Pellett reports Hasbro
Speaker 1: is cutting fiferent of its workforce. That's eleven thousand jobs,
Speaker 1: and it comes after a disappointing holiday shopping season. The
Speaker 1: company also projected it will fall short of fourth quarter
Speaker 1: adjusted profit estimates. The company said while it's digital gaming business,
Speaker 1: including Dungeons and Dragons and Magic the Gathering, perform well,
Speaker 1: it's traditional toy business faltered. Changes to its business plan
Speaker 1: are expected to result in charges of about three hundred
Speaker 1: million dollars. As part of the changes, president Eric Niman
Speaker 1: is leaving the company in New York. Charlie Pellett Bloomberg
Speaker 1: day Break. All right, Charlie, thank you. Another corporate story
Speaker 1: this morning centers on bed Bath and Beyond. The struggling
Speaker 1: retailer is moving closer to bankruptcy. We get more from
Speaker 1: Bloomberg's Doug Prisner. In a filing on Thursday, the retailer
Speaker 1: said it received a default notice from JP Morgan Chase
Speaker 1: after breaching the terms of its credit line, but Bedad
Speaker 1: and Beyond warned it didn't have enough funds. The company
Speaker 1: listed around two point one billion dollars of obligations it
Speaker 1: owed as of November. One analyst said the likelihood of
Speaker 1: a bankruptcy filing within the next thirty days is relatively high. Earlier,
Speaker 1: Bloomberg reported the company has begun speaking with potential lenders
Speaker 1: on funding the firm during bankruptcy proceedings in New York.
Speaker 1: I'm Doug Prisner, Bloomberg daybreak. All right, thank you, While
Speaker 1: turning to the markets. Now, US futures are lower as
Speaker 1: we close out the trading week. At the same time,
Speaker 1: the SNP five hundred is coming off its highest close
Speaker 1: since early December. Patrick Calfrey is senior equity strategistic Credit Sweez.
Speaker 1: I think the equity picture right here actually looks pretty good.
Speaker 1: I mean, we've seen the market rally almost eleven since
Speaker 1: the end of September, or up four and a half
Speaker 1: percent year to date, and really that's in response to
Speaker 1: the fact that we are having interest rates come in.
Speaker 1: Credit spreads are narrowing in, the vix is falling. That
Speaker 1: is a good backdrop for risk. Credit Sue Senior equity
Speaker 1: strategist Patrick Paul Frey is also watching the Fed. He
Speaker 1: sees two more rate hikes coming from the Central Bank
Speaker 1: followed by a pause. Like he inflation report for the
Speaker 1: FED comes out this morning. Karen. December's personal consumption expenditure
Speaker 1: prices are forecast to be unchanged while the core rate
Speaker 1: rises three tenths. We get more on the upcoming inflation
Speaker 1: report from Bloomberg Economics correspondent Michael McKee The data should
Speaker 1: continue a string of good news on inflation. Falling energy
Speaker 1: prices and holiday discounts to clear merchandise will put downward
Speaker 1: pressure on the Fed's favorite price index, and the year
Speaker 1: over year change in both headline PC and core are
Speaker 1: likely to come in softer than Fed officials had forecast.
Speaker 1: The income and spending numbers may not be as cheerful,
Speaker 1: with incomes barely rising and spending set to drop. Retail
Speaker 1: sales were down in December. The report will tell us
Speaker 1: whether that meant more was spent on services or whether
Speaker 1: consumers simply pulled back. Michael mckeey, Bloomberg Daybreak. All right, Mike,
Speaker 1: thank you all. Turning to Washington now, there may be
Speaker 1: some movement in the fight over the debts sailing. Bloomberg
Speaker 1: News has learned House Republicans are considering a short term
Speaker 1: increase until September thirty that would allow more time to
Speaker 1: negotiate with Democrats, though it's not clear whether they're open
Speaker 1: to it. Republican Congressman Dusty Johnson of South Dakota says,
Speaker 1: this issue will get resolved. What we're getting is a
Speaker 1: credit card bill, and it is a whop, and I
Speaker 1: get it. We have to pay the credit card bill.
Speaker 1: We absolutely should not default on our death. But when
Speaker 1: a company gets that credit card bill show up in
Speaker 1: the mail, it is exactly the right time for them
Speaker 1: to sit down and have a family conversation about how
Speaker 1: do they get the spending under control. Congressman Dusty Johnson
Speaker 1: spoke with Our Washington corresponded Joe Matthew on Bloomberg sound On.
Speaker 1: Catch the show weekdays at five pm Eastern on Bloomberg
Speaker 1: Radio or subscribe to the Bloomberg sound On podcast. Turning
Speaker 1: to geopolitics, Karen, the US is limiting China's access to
Speaker 1: advanced semiconductor equipment, and now Japan and the Netherlands are
Speaker 1: poised to do the same. Bloomberg Daybreak Asia anchor Brian
Speaker 1: Curtis has more from Hong Kong. Sources say the three
Speaker 1: countries are on the verge of forging a powerful alliance.
Speaker 1: It will undercut China's ambitions to build its own ship capabilities,
Speaker 1: Bloomberg saidwin Chan says it would be a black eye
Speaker 1: for China. It's with the significant victory for the Biden administration,
Speaker 1: It's something that the US could not have done alone
Speaker 1: contained China's chip ambitions. If key allies, such as an
Speaker 1: evalence in Japan refused to participate, the talks could conclude
Speaker 1: as soon as today. In Hong Kong, Bran Curtis Bloomberg,
Speaker 1: Day bright, It's thirty six degrees in Central Park. It's
Speaker 1: gonna be partly sunny and cool today with highs in
Speaker 1: the low forties. Will get back down to the low
Speaker 1: thirties tonight under Apartment Cloudy sky Time. How to look
Speaker 1: at some of the other stories making news in New
Speaker 1: York and around the world. Good morning, Michael Vare, Good
Speaker 1: morning Nathan. New York City and Long with other major
Speaker 1: cities across the nation, are bracing for tonight's video release
Speaker 1: of a confrontation with Memphis police officers accused in the
Speaker 1: beating death of a twenty nine year old black motorists
Speaker 1: earlier this month. The five Fiard officers have been charged
Speaker 1: with murder and other crimes in the killing of Tyree Nichols.
Speaker 1: All of the officers are black. Last night, a vigil
Speaker 1: was held for Nichols. His mother, rove On Wells, told
Speaker 1: the crowd to be peaceful when the video is released.
Speaker 1: I don't want us burning up our cities, turning up
Speaker 1: the streets, because that's not what my son stood for.
Speaker 1: This officials say the video will show the entire faithful encounter,
Speaker 1: from beginning to end. A New York lawyer has been
Speaker 1: sentenced from the George Floyd protests. In a judge ordered
Speaker 1: Collinford Maddis to spend a year and a day in
Speaker 1: prison and pay just over thirty thou dollars to the
Speaker 1: NYPD for the fire bombing of a police car. Maddis
Speaker 1: and Rouge Raman were arrested as demonstrations and protests rage
Speaker 1: over the killing of Floyd at the hands of police
Speaker 1: in Minneapolis. Rahman was sentenced in November to fifteen months
Speaker 1: in prison. And Islamic extremists who killed eight people a
Speaker 1: speeding truck in the seen rampage on the West Side
Speaker 1: Highway bike path has been convicted of federal charges and
Speaker 1: could face the death penalty. Jurors in the Manhattan courtroom
Speaker 1: found Cipolo Psipop guilty. The jury will return to court
Speaker 1: no earlier than February six to decide whether Psipop should
Speaker 1: be executed. New York Mayor Eric Adams vowed in his
Speaker 1: State of the City addressed to increase the number of
Speaker 1: police and hold drivers accountable. Adams also says he wants
Speaker 1: to get repeat offenders off the streets. He reflected on
Speaker 1: his first year in office, we hit the ground running
Speaker 1: and we got stuff done. One year later, our cities
Speaker 1: on the pathway to being safer. Our economy is recovering,
Speaker 1: and our stores, subways in hotels a full. Mayor Adams
Speaker 1: says the state of the city is strong. Global news
Speaker 1: twenty four hours a day on air and on Bloomberg Quicktake,
Speaker 1: powered by more than journal list and analyist more than
Speaker 1: a hundred twenty countries. I'm Michael Barr and this is Bloomberg.
Speaker 1: Thanks Michael, timing out for the Bloomberg Sports update, brought
Speaker 1: to you by Tri State Auty. For that, we bring
Speaker 1: in John Session. Thanks Nathan. The Knicks best win of
Speaker 1: the season in Boston, Celtics at the NBA's best record
Speaker 1: and they jumped in front by fifteen. Nicks blew a
Speaker 1: fourth quarterly that's happened a lot, but they rallied in overtime,
Speaker 1: big three point by r J. Barrett. Julius Randall's two
Speaker 1: free throws put him a head Nicks one one one seventeen.
Speaker 1: Randalls scored thirty seven. Jalen Brunson at twenty nine. Nicks
Speaker 1: continue to be better on the road than at home.
Speaker 1: It's their fifteenth road win. Only the Celtics have more.
Speaker 1: The Nets began a stretch of home games, losing to
Speaker 1: Detroit one thirty one twenty two. They clearly missed Kevin Durant.
Speaker 1: Nets have lost six of their last eight. Devils lost
Speaker 1: at Nashville six four, in the third time this season
Speaker 1: they've allowed that many goals. Novak Djokovic playing his Australian
Speaker 1: Open semifinal match right now, and he leads American Tommy
Speaker 1: Paul seven five three love earlier a semifinal win in
Speaker 1: four sets, force stefinal sits pass. Two NFL head coaches
Speaker 1: fired during the season, he got new jobs. Frank Reich
Speaker 1: lost his job in Indianapolis but hired by Carolina, and
Speaker 1: Nathaniel Hackett fired in Denver, and he's now the offensive
Speaker 1: coordinator of the Jets Conference Championship. Sunday begins in the
Speaker 1: NFC in Philadelphia. Eagles forty nine is the a f
Speaker 1: C game, a rematch from last year when Joe Burrow
Speaker 1: led Cincinnati to a comeback overtime win at Kansas City.
Speaker 1: Can Burrow and the Bengals do it again. We've been
Speaker 1: in these spots, um, they have the experience. We know
Speaker 1: a team we're playing team has been in this this
Speaker 1: game the last five seasons and there they've all been
Speaker 1: in that stadium. So to me, they're still a team
Speaker 1: to beat, and then we're coming for him, but we
Speaker 1: know it's gonna be tough. Burrow in the last two
Speaker 1: years has won three playoff road games. Longtime college basketball
Speaker 1: analyst Billy Packer has died. He was eighty two. John
Speaker 1: stash Award Bloomberg Sports Live from coast to coast from
Speaker 1: New York to Send Francisco, Boston to Washington, d C.
Speaker 1: Nationwide on Sirius Examp, the Bloomberg Business app, and Bloomberg
Speaker 1: dot Com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hagar.
Speaker 1: At the end of a big week for big tech earnings.
Speaker 1: The focus this morning is on Intel and the disappointment
Speaker 1: from the chip maker. The shares are down nine percent
Speaker 1: after one of the gloomiest quarterly forecasts in Intel's history.
Speaker 1: Bloomberg Quick Take correspondent Alex Webb is back with us
Speaker 1: this morning for more on the earnings and the overall
Speaker 1: chips story. Alex, good morning. How big a surprise was
Speaker 1: it that Intel came out with this forecast? It was
Speaker 1: something like at least two and a half billion dollars
Speaker 1: lower than the average estament. It certainly was a bit
Speaker 1: of a sideswipe. The market was not anticipating good news,
Speaker 1: but the scope of the miss was quite considerable. The
Speaker 1: consensus had been for first quarter sales of fourteen billion dollars.
Speaker 1: Intel's projecting it's going to be between ten and a
Speaker 1: half and eleven and a half. That would make it,
Speaker 1: you know, the lowest in some twenty years. Also me
Speaker 1: ten years or so, so it's um a bit a
Speaker 1: sizeable blow. Hope, is then that some analyst commentary this
Speaker 1: morning that they're frontloading a lot of the bad news
Speaker 1: and just saying we're going to take a painful quarter
Speaker 1: and with the hope that they rebound a bit in
Speaker 1: the second half. Is this just an Intel story or
Speaker 1: does this say something more about the overall outlook for
Speaker 1: the tech sector. I mean, we've been talking for quite
Speaker 1: some time about a lot of these magacap names are
Speaker 1: in retrenchment mode after the pandemic and trying to cut cast. Uh,
Speaker 1: there's clearly our broader issues in the tech sector. Of course,
Speaker 1: you know, there is a lot of the tech sector
Speaker 1: encompasses a lot of very different businesses. You know, of
Speaker 1: an online advertising is not the same as chipmaking, but
Speaker 1: we have seen that the personal computing business, and that's
Speaker 1: what's really hurting Intel right now that it is clearly
Speaker 1: not going to e really well. So that obviously has
Speaker 1: implications for Dell, for parts of Apple's business in others besides,
Speaker 1: but also some of the chipmaking peers like A m
Speaker 1: D and Nvidia, who don't how quite the problems that
Speaker 1: Intel might do, but that they're likely to see some
Speaker 1: some similar effects in the most recent quarters. Well, what
Speaker 1: is the issue, Alex for Intel that's holding it back?
Speaker 1: Why is it that we're seeing this sort of slow
Speaker 1: down in PC sales in particular that's affecting Intel. A
Speaker 1: lot of spending got front loaded during the pandemic, so
Speaker 1: it's a combination of two factors, you know, as people
Speaker 1: had to work from home or they needed a better
Speaker 1: computing setup, so people bought laptops. Companies bought laptops and
Speaker 1: clearly some desktops as well. But there was also a
Speaker 1: little bit more disposable income floating around. Some people, you know,
Speaker 1: had more money during the pandemic, not everybody by any
Speaker 1: stretch of the imagination, and that meant that they're able
Speaker 1: to buy new gear now as personal finances become a
Speaker 1: little bit more straightened. Uh and frankly, little people already
Speaker 1: have these new laptops. There isn't as much demand, and
Speaker 1: so there's quite a lot of inventory sitting around and
Speaker 1: warehouses from from personal computing companies. So that's really pounding
Speaker 1: what's already not a terribly happy ship at Intel. Who
Speaker 1: that has been has been hemorrhaging market share to t SMC,
Speaker 1: the big contract manufacturer of semi conductors, and is in
Speaker 1: the middle of a huge strategic pivot to try to
Speaker 1: catch up. And even before these earnings came out, Alex
Speaker 1: you know, the CEO of Intel, Pad Gelsinger, has been
Speaker 1: talking for quite some time about a multi year turnaround
Speaker 1: plan that he's trying to implement an Intel. When you
Speaker 1: have an outlook like this, does that raise some doubts
Speaker 1: for investors about whether that multi year plan is working.
Speaker 1: You know, he was reminding people on the call uh
Speaker 1: that it is a multi year plan asking for more patients.
Speaker 1: It clearly is, particularly in a space like semi conductors,
Speaker 1: where the innovation cycles you know, over quite a long
Speaker 1: time frame. You know, between each new generation of chips,
Speaker 1: the time it takes to get new new fabs, that's
Speaker 1: the sort of factories essentially for semi conductors, the time
Speaker 1: it takes to get them online is considerable. What Intel
Speaker 1: is doing is trying to pivot towards contract manufacturing. So
Speaker 1: the contract manufacturing is you know, Apple makes Apple designs
Speaker 1: chips for instance, that go into its iPhones. It does
Speaker 1: not make them. It contracts that out to t SMC
Speaker 1: in Taiwan. Intel is trying to get into that business
Speaker 1: so that it can try and offset the change the
Speaker 1: declines at seeing elsewhere. That is a multi year project
Speaker 1: and a huge significant change that can't happen overnight. In
Speaker 1: our last minute here, Alex, there of course, there was
Speaker 1: a lot of investment expected from the chips and Science
Speaker 1: Act that was passed in Washington last year. Can Intel
Speaker 1: account support from that, Yes, And we're seeing of plans
Speaker 1: to open new facilities, for example in Columbus, Ohio. UM
Speaker 1: it's fifty billion of spending that is coming from the government.
Speaker 1: There is a huge bun fight right now between the
Speaker 1: various chipmakers and not just American chipmakers to get a
Speaker 1: piece of that. It's going to go into UH subsidizing
Speaker 1: new manufacturing facilities, to training UM new engineers, to getting
Speaker 1: into some of the underlying technolog It is partly a
Speaker 1: play to reduce dependence on Taiwan. And when we think
Speaker 1: about reduce dependance on Taiwan, a lot of that's TSMC.
Speaker 1: So it is in the long stone something that could
Speaker 1: and should benefit into. This is Bloomberg Daybreak Today, your
Speaker 1: morning brief on the stories making news from Wall Street
Speaker 1: to Washington and beyond. Look for us on your podcast
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Speaker 1: I'm Nathan Hager and I'm Karen Moscow. Join us again
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Speaker 1: your day right here on Bloomberg Daybreak