WEBVTT - Bloomberg Daybreak: April 20, 2022 - Hour 1 (Radio) 0:00:02.360 --> 0:00:05.519 Live from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:05.600 --> 0:00:09.800 day Break for Wednesday. A coming up this hour, shares 0:00:09.880 --> 0:00:13.720 of Netflix plunge after its first subscriber loss in a decade. 0:00:13.840 --> 0:00:17.000 The port city of Mariopol and Ukraine is in jeopardy. 0:00:17.079 --> 0:00:19.520 Will have the very latest and the Justice Department and 0:00:19.600 --> 0:00:22.280 may appeal the public Transit mass ruling if the Centers 0:00:22.280 --> 0:00:25.480 for Disease Control says so. A Connecticut state police trooper 0:00:25.520 --> 0:00:28.000 who fired seven gunshots into a car, killing a man 0:00:28.280 --> 0:00:32.080 has been arrested. Plus Shanghai continues to ease COVID rules. 0:00:32.280 --> 0:00:35.200 I'm Michael Barr. More ahead, I'm Don Stairs. Showered sports. 0:00:35.240 --> 0:00:37.440 The Mets of the best record in baseball. They swept 0:00:37.440 --> 0:00:39.640 the double letter from the Giants. They Yankees one of Detroit. 0:00:39.720 --> 0:00:44.080 The Rangers shut out Whinnipeg. That's all straight ahead on 0:00:44.280 --> 0:00:47.159 Bloomberg day Break on Bloomberg You live in three on 0:00:47.280 --> 0:00:51.680 New York Bloomberg one, Washington, d C, Bloomberg one oh 0:00:51.720 --> 0:00:56.720 six one in Boston, Bloomberg nine, Francisco, Syrius XM one 0:00:56.800 --> 0:01:00.360 nineteen and around the world on Bloomberg Radio dot com 0:01:00.480 --> 0:01:08.720 and via the Bloomberg business Side and Good morning. I'm 0:01:08.760 --> 0:01:11.560 Karen Moscow. I'm Nathan Hager. Bloomberg day Break brought to 0:01:11.600 --> 0:01:14.479 you by hc Wainwright. Register now for the HCW Global 0:01:14.520 --> 0:01:17.679 Investment Conference, a hybrid event one to twenty six. Go 0:01:17.720 --> 0:01:20.520 to h c W Events dot com. HCW reserves the 0:01:20.520 --> 0:01:24.200 writing discretion to accept or reject registration or admission. And 0:01:24.360 --> 0:01:27.080 US futures are lower this morning five oh one on 0:01:27.120 --> 0:01:29.360 Wall Street, and we checked the markets every fifteen minutes 0:01:29.360 --> 0:01:32.319 throughout the trading day. On Bloomberg SMP future is down 0:01:32.360 --> 0:01:36.000 about eleven points down, futures down forty three, nasdack futures 0:01:36.040 --> 0:01:39.400 down sixty ten year treasury up ten thirty seconds, The 0:01:39.560 --> 0:01:41.959 l two point nine percent, and the yield on the 0:01:42.040 --> 0:01:45.320 two year is at two point five six percent. Nathan, Karen, 0:01:45.360 --> 0:01:48.279 we begin this morning with the plunge in Netflix shares. 0:01:48.320 --> 0:01:51.080 They are down more than twenty five percent following the 0:01:51.120 --> 0:01:54.600 company's disappointing earnings report. Let's get the latest life from 0:01:54.600 --> 0:01:57.600 Bloomberg's Rnita Young. Good morning, Granita, Good morning Nathan. The 0:01:57.640 --> 0:02:01.200 streaming giant unexpectedly lost the scribers for the first time 0:02:01.240 --> 0:02:03.800 in a decade, and it sees another drop of two 0:02:03.880 --> 0:02:07.440 million users this quarter amid heavy competition, so in an 0:02:07.480 --> 0:02:11.520 effort to improve results, co CEO Read Hastings says Netflix 0:02:11.560 --> 0:02:15.240 will introduce a cheaper advertising supported option for subscribers in 0:02:15.280 --> 0:02:17.640 the next couple of years. I'm a bigger fan of 0:02:17.639 --> 0:02:21.520 consumer choice and allowing consumers who would like to have 0:02:21.639 --> 0:02:25.880 a lower price and are advertising tolerant um get what 0:02:25.919 --> 0:02:29.040 they want makes a lot of sense. Netflix co CEO 0:02:29.160 --> 0:02:32.560 Read Hastings says the company will also start to crack 0:02:32.639 --> 0:02:35.919 down on people sharing their passwords. Live in New York, 0:02:35.960 --> 0:02:38.000 I'm ren need a young Bloomberg day break, all right, 0:02:38.000 --> 0:02:40.320 grined to thank you. While we are seeing the Netflix 0:02:40.400 --> 0:02:44.040 results impact other streaming services. Shares A Disney are down 0:02:44.040 --> 0:02:46.960 more than four percent, while Roku is off by six percent, 0:02:47.400 --> 0:02:49.520 and one of their stock of note moving this morning 0:02:49.600 --> 0:02:51.960 is IBM. Shares her up one and a half percent 0:02:52.000 --> 0:02:55.360 after the company's sales topped analysts estimates and the earnings 0:02:55.360 --> 0:02:58.120 continue to roll in Karen. With sixteen companies in the 0:02:58.200 --> 0:03:02.000 SMP five reporting today, they include Tesla. We get a 0:03:02.000 --> 0:03:05.079 preview from Bloomberg's Tom busby one big focus for first 0:03:05.120 --> 0:03:08.040 quarter earnings at the world's biggest electric auto maker how 0:03:08.120 --> 0:03:12.000 much the COVID nineteen shutdown to the company's Shanghai plant 0:03:12.120 --> 0:03:15.280 have impacted production. There also of concerned the impact of 0:03:15.360 --> 0:03:18.520 the global computer chip shortage and the ongoing supply chain 0:03:18.600 --> 0:03:22.560 issues that have affected all automakers. But Bloomberg and Census 0:03:22.639 --> 0:03:25.400 calls for adjusted earnings of two dollars twenty seven cents 0:03:25.400 --> 0:03:29.760 of share and revenues of seventeen point nine two billion dollars. 0:03:29.880 --> 0:03:33.240 Tom Busby, Bloomberg Daybreak, All right, Tom, thank you. Atturning 0:03:33.280 --> 0:03:36.600 to the economy, US tenure yields are really yields briefly 0:03:36.640 --> 0:03:40.480 turned positive this morning for the first time since March. Meanwhile, 0:03:40.560 --> 0:03:43.880 Chicago FED President Charles Evans says interest rates will probably 0:03:44.080 --> 0:03:47.280 rise above the neutral level, but how much higher will 0:03:47.320 --> 0:03:50.920 hange on whether inflation cools has expected. Probably we are 0:03:51.000 --> 0:03:53.880 going beyond neutral. I mean that's my expectation. When I 0:03:54.040 --> 0:03:57.160 see that, taking out special factors, I'm still left with 0:03:57.200 --> 0:03:59.600 three to three and a half percent inflation. That's not 0:04:00.120 --> 0:04:03.080 we want. And Chicago Fed President Charles Evans made the 0:04:03.080 --> 0:04:05.680 comments yesterday at the Economic Club of New York. We 0:04:05.920 --> 0:04:08.200 may get a clear picture behind the Fed's thinking, Karen, 0:04:08.200 --> 0:04:11.200 when it's regional economic survey, known as the Beige Book, 0:04:11.280 --> 0:04:14.640 comes out this afternoon. Bloomberg's Michael McKee has a preview. 0:04:14.760 --> 0:04:17.880 Americans say they are discouraged by inflation, but are they 0:04:17.880 --> 0:04:20.640 pulling back on spending an investment. The Beige Book will 0:04:20.680 --> 0:04:23.800 offer FED officials anecdotal evidence on the impact of rising 0:04:23.839 --> 0:04:27.039 prices and the outlook for the next few months. Activity 0:04:27.080 --> 0:04:30.080 has been mixed, showing some cooling and goods demand that 0:04:30.160 --> 0:04:33.599 could ease price pressures, although there's been a greater appetite 0:04:33.640 --> 0:04:36.719 for services recently. First quarter growth is forecast to slow 0:04:36.760 --> 0:04:39.600 considerably from the fourth quarters sizzling six point nine per 0:04:39.600 --> 0:04:42.479 cent annual rate. It's not definitive by any means, but 0:04:42.520 --> 0:04:44.680 the Baige Book will offer some color and whether that's 0:04:44.640 --> 0:04:47.719 slow down is going to be temporary or longer lasting. 0:04:47.960 --> 0:04:50.920 Michael McKee, Bloomberg Daybreak. All right, Michael, thank you, and 0:04:51.040 --> 0:04:53.240 we now want to update you on the latest developments 0:04:53.240 --> 0:04:55.560 in the war. The poor city of Mario pol in 0:04:55.680 --> 0:04:59.320 Ukraine is on the brink. Ukrainian defenders say they are 0:04:59.440 --> 0:05:02.320 surround it and they are appealing to world leaders for help. 0:05:02.320 --> 0:05:07.159 Bloomberg's Amy Morris reports Ukrainian President Voladimir's Alinsky posted a 0:05:07.279 --> 0:05:13.360 video to social media saying that the Russian Army is 0:05:13.440 --> 0:05:16.279 righting itself into world history as the most barbaric and 0:05:16.360 --> 0:05:19.200 in humane army in the world, in part because they're 0:05:19.240 --> 0:05:23.599 blocking efforts to create humanitarian corridors, especially in Mariopol, where 0:05:23.600 --> 0:05:26.440 the commander of one Ukrainian brigade is pleading for help 0:05:26.480 --> 0:05:30.000 from other countries to evacuate civilians from the ports city. 0:05:30.400 --> 0:05:33.440 Russia has given the fighters until two pm in Moscow, 0:05:33.520 --> 0:05:37.000 that's seven am Eastern, to lay down their arms and surrender. 0:05:37.400 --> 0:05:40.960 In Washington, I'm any Morris Bloomberg Daybreak, Alright, Amy, Thanks. 0:05:40.960 --> 0:05:43.479 Turning to the pandemic, the Department of Justice says it 0:05:43.560 --> 0:05:47.600 is prepared to appeal the mask mandate ruling if necessary. 0:05:47.760 --> 0:05:50.680 Bloomberg said, Baxter has that story. The d o J 0:05:50.880 --> 0:05:53.560 says it will appeal if the CDC decides that the 0:05:53.560 --> 0:05:56.359 mandate should remain in place after May three, when the 0:05:56.400 --> 0:06:01.440 current one expires. Currently, the recommendations remain place but not mandated. 0:06:01.600 --> 0:06:04.839 Under the ruling. The White House is keeping its mandate 0:06:04.839 --> 0:06:08.440 in forest and spokeswoman Jen Psaki says the administration says 0:06:08.480 --> 0:06:10.560 it is a smart thing to do. We're continuing to 0:06:10.600 --> 0:06:13.840 encourage people to wear masks in public transit. They'll make 0:06:13.880 --> 0:06:16.960 that decision because it's obviously not being implemented at this 0:06:17.040 --> 0:06:19.719 moment time, but will continue to abide by CDC guidance 0:06:19.880 --> 0:06:23.120 for now. It is a personal decision. In San Francisco, 0:06:23.160 --> 0:06:25.839 I'm at Baxter Bloomberg daybreak, all right, and thank you 0:06:25.880 --> 0:06:27.919 well on Wall Street to days of free lunch at 0:06:27.920 --> 0:06:31.040 Goldman sacks are over marking the end of a pandemic 0:06:31.160 --> 0:06:34.080 office perk, and we get a story from Bloomberg's Charlie Pellett. 0:06:34.720 --> 0:06:38.640 The investment bank says it will transition back to paid 0:06:38.680 --> 0:06:42.400 for meal service for breakfast and lunch on April twenty five. 0:06:42.839 --> 0:06:45.960 Goldman also says it will boost the stipend for meals 0:06:45.960 --> 0:06:49.239 out of hours to thirty dollars from twenty five dollars. 0:06:49.600 --> 0:06:52.520 Wall Street firms have been using free food as part 0:06:52.560 --> 0:06:55.039 of the push to bring employees back to their desks 0:06:55.400 --> 0:06:58.520 during a pandemic that has fueled the rise of hybrid 0:06:58.600 --> 0:07:02.039 schedules and remote work. Goldman has been one of the 0:07:02.080 --> 0:07:06.040 most aggressive financial firms in pushing for a return to 0:07:06.160 --> 0:07:09.560 the office. In New York, Charlie Pellette Bloomberg Day Break. 0:07:09.640 --> 0:07:11.840 Thanks Charlie joined us later today. We'll speak live with 0:07:11.880 --> 0:07:15.320 Bank of America CEO Brian moynihan at noon Wall Street 0:07:15.360 --> 0:07:18.880 Time on both Bloomberg Radio and Bloomberg Television. This is 0:07:18.920 --> 0:07:25.120 Bloomberg South five oh seven on Wall Street where forty 0:07:25.120 --> 0:07:27.520 two degrees in Central Parker dealing with an accident on 0:07:27.560 --> 0:07:30.680 the Van Wick northbound past College Point Boulevard. Details coming 0:07:30.760 --> 0:07:33.120 up in traffic. First Michael Barr with what else is 0:07:33.160 --> 0:07:35.559 going on in New York and around the world. Good morning, Michael, 0:07:35.640 --> 0:07:39.040 Good morning Nathan. The New Jersey Catholic Diocese of Camden 0:07:39.400 --> 0:07:42.640 has agreed to pay eighties seven point five million dollars 0:07:42.640 --> 0:07:45.840 to subtle claims involving clergy sex abuse, with about three 0:07:45.920 --> 0:07:49.560 hundred alleged victims. It's one of the largest cash settlements 0:07:49.600 --> 0:07:53.080 involving the Catholic Church in the US. Mark Crawford is 0:07:53.160 --> 0:07:56.080 with the State Chapter of the Survivors Network of Those 0:07:56.120 --> 0:08:00.120 Abused by priests. I'm glad it's come to fruition. Um. 0:08:00.160 --> 0:08:03.560 I hope and believe that it will lead to some 0:08:03.640 --> 0:08:08.920 small level of closure and hopefully some validation for the 0:08:09.000 --> 0:08:13.960 victims of qudge abuse within the Diocese of Camden, New Jersey. 0:08:14.160 --> 0:08:17.600 Mark Crawford with the Survivors Network says the subtlement carries 0:08:17.640 --> 0:08:21.880 a unique agreement, including turning over documents. Connecticut State Police 0:08:21.880 --> 0:08:24.920 say a trooper who fired seven gunshots into a car 0:08:25.200 --> 0:08:27.600 and killed a man in twenty twenty after a high 0:08:27.640 --> 0:08:30.880 speed chase has been arrested in connection with the shooting. 0:08:31.200 --> 0:08:35.160 Authorities say trooper Brian North turned himself into the State 0:08:35.240 --> 0:08:39.640 Inspector General last evening. North fatally shot Mubarick Solomine in 0:08:39.720 --> 0:08:43.800 January of as Solomine sat in the driver's seat of 0:08:43.840 --> 0:08:46.680 a car in West Haven where the chase ended and 0:08:46.760 --> 0:08:50.160 police boxed in the car. The State Police union says 0:08:50.200 --> 0:08:54.040 North risked his life and is defending his actions. It 0:08:54.120 --> 0:08:57.320 looks like New York City doorman won't go on strike 0:08:57.400 --> 0:09:00.439 after all. Yesterday, at tentative deal was reached to a 0:09:00.559 --> 0:09:03.719 vert of potential walkout one day ahead of the deadline. 0:09:04.040 --> 0:09:08.160 The agreement reached the union and the Realty Advisory Board. 0:09:08.640 --> 0:09:11.360 It averts what would have been the first strike of 0:09:11.640 --> 0:09:15.480 the residential building service workers in New York in thirty 0:09:15.480 --> 0:09:18.840 one years. New Jersey's governor has some thoughts as the 0:09:18.840 --> 0:09:23.000 state prepares to legalize recreational pot sales. Governor Phil Murphy 0:09:23.120 --> 0:09:26.600 won't be partaking in pot, but he does have a preference. 0:09:26.960 --> 0:09:29.160 It's never been an animating thing for me. If we 0:09:29.160 --> 0:09:31.920 were legalizing Scotch, I would show up with a shopping cart. 0:09:32.080 --> 0:09:36.040 Governor Murphy says. Recreational pots sales begin tomorrow. A Chinese 0:09:36.040 --> 0:09:38.920 health official says four million more people in Shanghai have 0:09:38.960 --> 0:09:43.120 been allowed to leave their homes as coronavirus quarantine rules ease. 0:09:43.400 --> 0:09:45.920 That brings to a total of almost twelve million people 0:09:46.000 --> 0:09:48.800 who have been allowed to leave their homes as China's 0:09:48.880 --> 0:09:51.960 largest city tries to contain the virus outbreaks. Global News 0:09:52.000 --> 0:09:54.640 twenty four hours a day on air and on Bloomberg 0:09:54.720 --> 0:09:57.880 Quicktake Power by more than twenty seven hundred journalists and 0:09:57.880 --> 0:10:00.520 analysts more than a hundred twenty countries. U. Michael barn 0:10:00.600 --> 0:10:08.000 This is Bloomberg. Okay, Michael, thank you. Almost five ten 0:10:08.000 --> 0:10:10.320 on Wall Street. Time for the Bloomberg Sports Update. Good morning, 0:10:10.360 --> 0:10:13.280 John Stanhower, Good morning, Nathan Shure. It's early, but don't 0:10:13.280 --> 0:10:15.560 look now. The Mets at night and three of the 0:10:15.559 --> 0:10:18.000 best record the Major leagues. Doubleheader sway for the Giants 0:10:18.040 --> 0:10:20.120 at City Field. If began with a big comeback Mets 0:10:20.120 --> 0:10:22.280 trailed four to one, tie the game, and then won 0:10:22.360 --> 0:10:26.440 it in the tenth inning. On the door, Garcia's pitch 0:10:27.160 --> 0:10:29.920 swing a lock rot toarts center field. That's gonna get 0:10:29.920 --> 0:10:32.719 down that they sent it rolls toward the wall and 0:10:32.880 --> 0:10:38.680 right center stores that Francisco Indoor comes through, Mets winning 0:10:38.800 --> 0:10:43.160 ten five for the final CBS to call Francisco into 0:10:43.160 --> 0:10:45.199 a rough first season in New York, but off to 0:10:45.280 --> 0:10:47.160 a hot start this year. He had two more hits 0:10:47.160 --> 0:10:49.240 of the nightcap won by the Mets three to one 0:10:49.320 --> 0:10:52.680 thanks to Max scherz Or his first met home starting 0:10:52.720 --> 0:10:54.679 serves Are flirted with a no hit or lost it 0:10:54.720 --> 0:10:57.040 in the sixth inning, but gave up just the one 0:10:57.120 --> 0:10:59.480 hit struck at ten and seven in inh sers are 0:10:59.520 --> 0:11:03.079 already three and oh in Detroit. That Garrett cole struggles 0:11:03.080 --> 0:11:06.320 continue this supposed Yankee Ace had to be taken out 0:11:06.360 --> 0:11:09.000 in the second inning, got only five outs. He issued 0:11:09.040 --> 0:11:12.400 five walks, but Clark Schmidt followed Cole with three. The 0:11:12.440 --> 0:11:15.280 third scoreless relief six strikeouts and the Yankees beat the 0:11:15.320 --> 0:11:18.120 Tigers four to two, fifty win for the Rangers. Three 0:11:18.200 --> 0:11:20.960 nothing over Winnipeg at the Garden. Ryan Strom sport twice 0:11:21.000 --> 0:11:24.120 and Igor says Sirkin with thirty one saves. The Rangers 0:11:24.120 --> 0:11:26.920 have won their last three games by a combined eleven 0:11:27.000 --> 0:11:29.400 and nothing. First time the Rangers have had three straight 0:11:29.480 --> 0:11:33.760 shutouts since the Eddie Jackoman days inten seventy three NBA 0:11:33.840 --> 0:11:37.120 Playoff wins from Miami, Memphis and New Orleans Nets and 0:11:37.120 --> 0:11:40.720 Celtics Tonight Game two in Boston, Kyrie Irvine find fifty 0:11:40.760 --> 0:11:44.600 thousand dollars for his middle finger salutes to the Celtic fans. 0:11:44.600 --> 0:11:48.240 On Sunday, John Stashward, Bloomberg Sports, Nathan all Right, John, 0:11:48.240 --> 0:11:51.320 thanks SMP futures down ten point, Staff futures down thirty eight, 0:11:51.400 --> 0:11:54.920 NASTAC futures down sixty one points. Shares of Netflix down 0:11:54.960 --> 0:11:58.800 twenty six percent points to lose forty billion dollars in 0:11:58.880 --> 0:12:01.760 value after the subscribe promiss We'll talk about it next 0:12:01.800 --> 0:12:08.280 with Alex Webb of Bloomberg Quicktake. This is Bloomberg, Bloomberg 0:12:08.280 --> 0:12:11.640 eleven three oh weather. Sunshine today hides in the upper fifties, 0:12:11.720 --> 0:12:14.080 more clouds than sun. Tomorrow with the high near sixty 0:12:14.240 --> 0:12:17.400 will be near seventy partly Sunday by Friday. Right now 0:12:17.440 --> 0:12:23.440 clouds forty two degrees in Central Park markets, headlines and 0:12:23.600 --> 0:12:26.840 breaking news twenty four hours a day at Bloomberg dot Com, 0:12:26.960 --> 0:12:30.040 the Bloomberg Business out and at Bloomberg Quick Take, This 0:12:30.440 --> 0:12:39.800 is a Bloomberg Business Flash and I'm kared. Moscow US 0:12:39.880 --> 0:12:43.040 Dock Index futures are lower as investors way the impact 0:12:43.040 --> 0:12:46.240 of rising real yields on the appeal of riskier assets, 0:12:46.240 --> 0:12:48.800 and Netflix puts a damper on the earning season outlook. 0:12:48.880 --> 0:12:51.480 We checked the markets every fifteen minutes throughout the trading day. 0:12:51.800 --> 0:12:54.400 On Bloomberg s and p Future is down twelve points 0:12:54.400 --> 0:12:57.200 this morning. At down Future is down forty seven nasdag 0:12:57.240 --> 0:13:00.720 Future is down sixty five and the in Your Treasuries 0:13:00.800 --> 0:13:03.559 up eight thirty seconds. The l two point nine zero 0:13:03.720 --> 0:13:06.440 percent yield on the two year two point five six 0:13:06.480 --> 0:13:09.280 percent nine Max Screwed oils at one point one percent 0:13:09.360 --> 0:13:11.400 of a dollar ten and a hundred three dollars sixty 0:13:11.440 --> 0:13:14.120 six cents of Barrel Comic schooled down half percent or 0:13:14.120 --> 0:13:17.880 ten dollars thirty cents at nine seventy announced. The euro 0:13:18.000 --> 0:13:20.400 one point o three three against the dollar. British found 0:13:20.440 --> 0:13:22.439 one point three zero to six, the n at one 0:13:22.800 --> 0:13:26.240 eight point three too, and Bitcoin this morning is up 0:13:26.320 --> 0:13:29.839 half percent at forty one tho five hundred dollars. Today 0:13:29.840 --> 0:13:32.319 we're watching for report on existing home sales at a 0:13:32.360 --> 0:13:34.360 ten o'clock Wall Street time than at to the Federal 0:13:34.400 --> 0:13:37.000 Reserve at least at its fige book and Tesla's among 0:13:37.040 --> 0:13:40.840 companies scheduled to report earnings today. That's a Bloomberg business flash. 0:13:40.840 --> 0:13:43.040 Now here's Muchael Barrow with more on what's going on 0:13:43.120 --> 0:13:46.040 around the world. Muchael, Good morning, Good morning, Karen. Russia 0:13:46.200 --> 0:13:50.040 is pouring more troops into Ukrainian cities and towns. The 0:13:50.120 --> 0:13:53.640 fighting in the East seeks slides the country in two 0:13:54.080 --> 0:13:57.880 in a potentially pivotal battle for control of Ukraine's industrial 0:13:57.960 --> 0:14:01.679 heartland of coal mines and actories. Winds kicked up a 0:14:01.720 --> 0:14:05.800 towering wall of flames in rural northern Arizona, tearing through 0:14:05.840 --> 0:14:08.920 two dozen structures and forcing the evacuation of more than 0:14:08.960 --> 0:14:12.400 seven hundred homes. In MLB, the Yankees one the Mets. 0:14:12.520 --> 0:14:16.160 Mets swept a doubleheader against the Giants. The Nationals swept 0:14:16.160 --> 0:14:19.320 a doubleheader against the Diamondbacks. The Red Sox won the 0:14:19.360 --> 0:14:22.240 A's beat the Orioles to one. The game was played 0:14:22.560 --> 0:14:26.080 before the smallest Oakland crowd in forty two years, almost 0:14:26.080 --> 0:14:30.160 thirty seven hundred fifty fans at the Colosseum. In the NHL, 0:14:30.360 --> 0:14:32.960 the Rangers and Bruins one. The Islanders lost in O 0:14:33.040 --> 0:14:36.280 G to the Panthers three too. Yeah. Yeah. It's global 0:14:36.280 --> 0:14:38.640 news twenty four hours a day on air and on 0:14:38.680 --> 0:14:42.920 Bloomberg Quicktake, powered by more than twenty journalists antalyists more 0:14:42.920 --> 0:14:44.800 than a hundred twenty countries. On Michael bar This is 0:14:44.800 --> 0:14:47.880 Bloomberg Nathan by Michael Thanks five nineteen. On Wall Street 0:14:47.880 --> 0:14:51.080 Life from the Bloomberg Interactive Brooker Studios, This is Bloomberg Daybreak. 0:14:51.080 --> 0:14:54.640 And speaking of losing fans, how about Netflix? The shares 0:14:54.680 --> 0:14:57.720 are getting pummeled once again in the pre market after 0:14:57.760 --> 0:15:01.080 the streaming giant reported its first s describer loss in 0:15:01.120 --> 0:15:04.560 more than a decade. Alex Webb follows this company very closely, 0:15:04.680 --> 0:15:07.320 and Alex is with Us now anchor on Bloomberg Quick 0:15:07.360 --> 0:15:13.240 Take and tech columnist for Bloomberg Opinion. Alex, what happened? Well? 0:15:13.360 --> 0:15:17.520 Lockdowns basically lockdowns ended, and Netflix said a Lockflix And 0:15:17.600 --> 0:15:21.520 of course inflation, so Netflix had enjoyed massive growth during 0:15:21.520 --> 0:15:25.320 the lockdowns, and perhaps optimistically, there had been expectation that 0:15:25.320 --> 0:15:27.720 at least some of that growth would continue. It didn't, 0:15:27.800 --> 0:15:31.160 and they lost two undred subscribers. At the same time, 0:15:31.160 --> 0:15:35.320 people's household bills are getting, you know, expanding because of Netflix, 0:15:35.320 --> 0:15:39.200 and ultimately, streaming video is discretionary spending. So when people 0:15:39.200 --> 0:15:41.160 are looking at their bills and they say, well, you know, 0:15:41.160 --> 0:15:43.160 what can I fall to cut that twelve bucks a 0:15:43.160 --> 0:15:46.800 month for Netflix is something that people are getting rid of. 0:15:46.960 --> 0:15:48.440 So is that part of the reason. Do you think 0:15:48.440 --> 0:15:51.920 why we're seeing declines across the board for a lot 0:15:51.920 --> 0:15:57.320 of these companies with streaming exposure, This idea that people 0:15:57.440 --> 0:16:00.400 might be cutting back because of inflation, Shin is that 0:16:00.520 --> 0:16:03.280 is that part of the story? Absolutely, And of course 0:16:03.360 --> 0:16:06.960 people are realizing that it may not necessarily be more 0:16:07.000 --> 0:16:10.400 economical than the cable they might have had previously. That 0:16:11.000 --> 0:16:13.760 you know, in our household, we have an embarrassing number 0:16:13.800 --> 0:16:16.560 of streaming services. I think by the time you take 0:16:16.600 --> 0:16:20.040 it acout, Netflix plus, Discovery, Discovery Plus plus, Amazon Prime plus, 0:16:20.360 --> 0:16:22.800 Apple TV Plus and all these other things, HBO Max, 0:16:23.120 --> 0:16:26.120 you're getting close to that six dollars a month, depending 0:16:26.120 --> 0:16:29.720 what your cable contract looks like quite quickly. And it 0:16:29.880 --> 0:16:32.240 is of course not a space that everybody can win. 0:16:32.680 --> 0:16:36.840 So what does this mean for the streaming business going forward? Here? 0:16:36.880 --> 0:16:41.040 What does it have to do to a keep subscribers 0:16:41.080 --> 0:16:44.480 and be just turn things around entirely. Well, one of 0:16:44.480 --> 0:16:47.840 the big problems is that the differences between streaming video 0:16:48.120 --> 0:16:51.800 and the classic cable contract was is churn i e. 0:16:52.000 --> 0:16:54.280 The number of subscribers you lose in any given month. 0:16:54.360 --> 0:16:56.240 And when you had a cable contract, or you have 0:16:56.280 --> 0:16:58.920 a cable contract, it might be an eighteen month, two 0:16:58.960 --> 0:17:01.880 year contract, so you spend that money on customer acquisition 0:17:01.960 --> 0:17:04.760 upfront and then you're guarantee you know, perhaps a thousand 0:17:04.840 --> 0:17:07.480 dollars worth of revenue over the subsequent two years for 0:17:07.520 --> 0:17:09.600 the duration of the contract. Now that is not the 0:17:09.600 --> 0:17:12.320 case with streaming video, and they're all fighting month in, 0:17:12.560 --> 0:17:17.000 month out for those subscribers. That is a high marketing cost. 0:17:18.119 --> 0:17:20.520 They have been valued as growth stocks because they are 0:17:20.560 --> 0:17:24.600 adding subscribers, and Disney pivoted really from being a value 0:17:24.640 --> 0:17:27.440 to a growth stock because of Disney Plus. But when 0:17:27.440 --> 0:17:29.240 that growth starts to slow down, you have to wonder 0:17:29.240 --> 0:17:31.640 where you can find the value. Are they as valuable 0:17:31.720 --> 0:17:35.040 as an A T and T for instance, when you 0:17:35.080 --> 0:17:38.840 look at the long duration when of their earnings profile. 0:17:39.600 --> 0:17:43.639 Does that fight for subscribers become more difficult with the 0:17:43.680 --> 0:17:47.440 idea of opening up to advertising. We heard from read 0:17:47.440 --> 0:17:50.280 Hastings saying, you know, something that he had resisted for 0:17:50.320 --> 0:17:53.360 so long, the idea of putting ads on Netflix He's 0:17:53.400 --> 0:17:55.880 open to now. Yeah, it really was a sacred cow 0:17:55.960 --> 0:17:57.680 for a long time. But if they're looking at the 0:17:57.720 --> 0:18:00.240 fact that you know, customers may not want to be 0:18:00.280 --> 0:18:03.560 spending twelve dollars a month, well five dollars a month 0:18:03.640 --> 0:18:06.480 or wherever they end up pricing, an ad supported model 0:18:06.760 --> 0:18:09.320 is clearly more affordable. And one of the reasons that 0:18:09.600 --> 0:18:13.399 in relative terms television wasn't that expensive for us to 0:18:13.440 --> 0:18:15.880 watch is because it was all subsidized by advertising, say 0:18:15.920 --> 0:18:19.240 with most media, and so pivoting to like actually kind 0:18:19.240 --> 0:18:22.280 of tried and trusted model is clearly something they're willing 0:18:22.280 --> 0:18:24.040 to try. They think there are hundred million households out 0:18:24.040 --> 0:18:26.960 there sharing Netflix passport passwords. If they can convince those 0:18:27.000 --> 0:18:31.160 guys to go to a an ad supported approach, then 0:18:31.760 --> 0:18:34.040 they clearly see some upside. Yeah, I'm glad you mentioned 0:18:34.080 --> 0:18:38.879 the password sharing crackdown. How does Netflix actually get those 0:18:38.920 --> 0:18:44.000 subscribers back? Is that enough to turn things around on 0:18:44.040 --> 0:18:47.239 the bottom line for them? It's a tough one. I mean, 0:18:47.240 --> 0:18:49.720 I think basically the places they need to look for 0:18:49.720 --> 0:18:52.960 growth are outside the US. Probably in the US, anyone 0:18:53.000 --> 0:18:55.720 who wants Netflix has got Netflix already at this stage. 0:18:55.760 --> 0:18:58.440 You need to look to other markets. That's why they're 0:18:58.480 --> 0:19:03.439 massively expanding things like rein language content, because you know, 0:19:03.800 --> 0:19:07.880 Korean soaps are huge across Asia. If they can eat 0:19:07.920 --> 0:19:09.880 into some of those markets, and that they did add 0:19:09.880 --> 0:19:14.200 a million subscribers in Asia in the in the courts, 0:19:14.240 --> 0:19:17.400 that is possibly the best opportunity for growth. In the US, 0:19:17.480 --> 0:19:19.160 it's a question of stasis and trying to be sure 0:19:19.200 --> 0:19:21.840 they didn't lose the subscribers they have, and certainly we 0:19:21.880 --> 0:19:24.480 did see the popularity of squid Game last year, but 0:19:24.520 --> 0:19:28.800 apparently not enough to dampen the bleeding that we saw 0:19:29.280 --> 0:19:32.399 on subscribers in that earnings report. Alex web great to 0:19:32.400 --> 0:19:34.040 have you on with us this morning. Thanks for this. 0:19:34.400 --> 0:19:37.680 Alex Webb, Bloomberg Quick Take anchor and tech columnist for 0:19:37.760 --> 0:19:40.520 Bloomberg Opinion, and again checking Netflix shares in the pre 0:19:40.600 --> 0:19:45.240 market after that subscriber loss. Their down almost twenty six 0:19:45.480 --> 0:19:49.040 percent in early trading. Right now, SMP futures are down 0:19:49.040 --> 0:19:51.760 four points, Staff futures down six, Dance that futures down 0:19:51.760 --> 0:19:55.000 thirty three points. Just ahead, more U S weapons heading 0:19:55.000 --> 0:19:58.080 to Ukraine and the Biden administration punts on appealing the 0:19:58.119 --> 0:20:01.159 travel mask rule top store in the morning. Just ahead, 0:20:01.480 --> 0:20:08.920 you're listening to Bloomberg Daybreak Bloomberg eleven three oh weather 0:20:08.960 --> 0:20:10.840 in the early clouds will give way to sunshine today 0:20:10.840 --> 0:20:12.640 with a high near sixty degrees. Will be back near 0:20:12.720 --> 0:20:15.960 sixty with more clouds than sunshine tomorrow, partly sunny near 0:20:16.040 --> 0:20:19.120 seventy by Friday. Right now forty two degrees in Central Park. 0:20:22.280 --> 0:20:26.840 Broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.960 --> 0:20:30.040 Bloomberg E living free on to Washington, d C, Bloomberg 0:20:30.160 --> 0:20:33.439 nine one to Boston, Bloomberg one of six, one to 0:20:33.480 --> 0:20:37.320 San Francisco, Bloomberg sixty to the country, Sirius XM to 0:20:37.480 --> 0:20:40.520 A one nineteen and around the globe, the Bloomberg Business 0:20:40.560 --> 0:20:44.640 at and Bloomberg Radio dot Com. This is Bloomberg Daybreak. 0:20:50.520 --> 0:20:52.680 It's five thirty on Wall Street. Good morning. I'm Nathan 0:20:52.720 --> 0:20:55.639 Hager and I'm Karen Moscow, and we are just about 0:20:55.640 --> 0:20:58.080 four hours away from the open of US trading. Let's 0:20:58.080 --> 0:20:59.399 get you up to date in the news. You need 0:20:59.480 --> 0:21:01.720 to know what the sour and we begin with streaming 0:21:01.720 --> 0:21:06.120 a giant Netflix, which is slumping after Tuesday's shocking earnings. 0:21:06.119 --> 0:21:09.120 You report and shares are currently down twenty six percent. 0:21:09.480 --> 0:21:11.760 We get the latest live from Bloomberg's Renna need a 0:21:11.800 --> 0:21:15.119 young good morning, Ready to Good morning, Karen. Netflix unexpectedly 0:21:15.200 --> 0:21:17.879 lost subscribers for the first time in a decade, and 0:21:17.920 --> 0:21:21.000 the streaming giant sees another drop of two million users 0:21:21.040 --> 0:21:24.280 this quarter as competition continues to heat up, so in 0:21:24.359 --> 0:21:28.040 an effort to improve results, co CEO Read Hastings says 0:21:28.080 --> 0:21:32.280 Netflix will introduce a cheaper, advertising supported option for subscribers 0:21:32.280 --> 0:21:34.760 in the next couple of years. He also says the 0:21:34.760 --> 0:21:38.360 company will start to crack down on people sharing their passwords. 0:21:38.880 --> 0:21:41.399 Live in New York. I'm gonna need a young Bloomberg daybreak, 0:21:41.400 --> 0:21:43.600 all right, we need to thank you. Sixteen more companies 0:21:43.640 --> 0:21:47.480 in the SMP report earnings today, including Tesla, Bloomberg Intelligence 0:21:47.560 --> 0:21:50.560 is watching how competition and global supply chain disruptions are 0:21:50.600 --> 0:21:55.280 testing the electric vehicle giants ambitious annual delivery goals well overseas, Nathan, 0:21:55.320 --> 0:21:58.840 The key Ukrainian port city of Mariopol is in jeopardy 0:21:58.880 --> 0:22:02.240 as defenders say they are outnumbered by Russia. Ukraine is 0:22:02.280 --> 0:22:05.040 appealing to world leaders for help amid Russia is offensive 0:22:05.080 --> 0:22:08.960 in the country's southern and eastern region. Democratic Congressman Reuben 0:22:09.000 --> 0:22:12.840 Diego of Arizona tells Bloomberg's Joe Matthew the US is 0:22:12.880 --> 0:22:16.200 continuing to supply Ukraine with military aid, which should help 0:22:16.200 --> 0:22:18.600 in their fight in the Don Boss region. By US 0:22:18.680 --> 0:22:22.520