WEBVTT - Bloomberg Daybreak: October 26, 2022 - Hour 1 (Radio) 0:00:01.639 --> 0:00:04.960 By from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:05.000 --> 0:00:08.920 day Break for Wednesday, October two. Coming up this hour, 0:00:09.240 --> 0:00:13.600 NAZAC futures fall as big tech earnings disappoint Microsoft post 0:00:13.640 --> 0:00:17.400 is weegest quarterly sales growth in five years, Alphabets quarter 0:00:17.480 --> 0:00:21.320 spells trouble as profit and revenue misestimates, and bank kearneys 0:00:21.400 --> 0:00:24.720 continue in Europe as Deutsche Bank and Bark Laserport. He 0:00:24.880 --> 0:00:27.200 was a big debate night in New York and several 0:00:27.240 --> 0:00:31.080 other states, plus President Biden discussed Ukraine and China in 0:00:31.160 --> 0:00:34.720 a congratulatory call to the UK Prime Minister Michael bar 0:00:34.880 --> 0:00:37.600 More Ahead, I'm down stattoward sports. The Rangers offer that 0:00:37.680 --> 0:00:40.720 shoot out to Colorado Devils one in Detroit and Nixon 0:00:40.800 --> 0:00:46.480 nets of games tonight. That's all train ahead on Bloomberg 0:00:46.520 --> 0:00:49.320 day Break on Bloomberg. He Living Free on New York, 0:00:49.520 --> 0:00:54.160 Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:54.480 --> 0:00:58.640 Bloomberg nine sixties and Francisco Sirius x M one nine 0:00:58.640 --> 0:01:01.520 Team and around the World Old on Bloomberg Radio Dot 0:01:01.560 --> 0:01:09.240 Carmen The Bloomberg Business. Good Morning, I'm Nathan Hagar, and 0:01:09.280 --> 0:01:12.919 I'm Karen Moscow in US. Dock Index futures are lower 0:01:13.000 --> 0:01:14.920 this morning. Work coming up to five on one on 0:01:14.920 --> 0:01:17.080 Wall Street, and we check the markets every fifteen minutes 0:01:17.120 --> 0:01:19.440 throughout the trading day on Bloomberg. Right now, S and 0:01:19.480 --> 0:01:23.480 P futures down nineteen points and NASDAC futures are falling 0:01:23.480 --> 0:01:26.560 down one fifty six. That's down one and a third percent. 0:01:26.959 --> 0:01:29.920 DAL futures that'll change this morning. Ten year Treasury up 0:01:29.920 --> 0:01:33.640 fourteen thirty seconds, yield four point oh four percent, and 0:01:33.720 --> 0:01:36.360 they yield on the two year four point four two percent. 0:01:36.560 --> 0:01:39.440 Nathan Karen. The big drop of NASTAC futures this morning 0:01:39.480 --> 0:01:43.400 follows disappointing earnings and forecasts from two tech giants. We 0:01:43.600 --> 0:01:47.080 begin with Microsoft. Those shares are down five and two 0:01:47.120 --> 0:01:50.040 thirds per cent ed. Ludlow has more on the results 0:01:50.040 --> 0:01:53.720 from our Bloomberg nine sixty newsroom in San Francisco. Microsoft 0:01:53.720 --> 0:01:56.040 did beat on both the top and bottom line, but 0:01:56.160 --> 0:01:59.560 recorded its slowest sales growth in five years. The strongest 0:01:59.560 --> 0:02:03.120 dollars certainly was a factor, along with material slowdown it 0:02:03.160 --> 0:02:06.840 seems in both corporate and consumer spending. What really spook 0:02:06.920 --> 0:02:09.560 the market was commentary on the Earning School that the 0:02:09.600 --> 0:02:12.800 Asia Cloud unit would see its growth decelerate to the 0:02:12.840 --> 0:02:16.120 tune of five percentage points quarter on quarter going into 0:02:16.120 --> 0:02:19.079 the final three months of this year. The most significant 0:02:19.120 --> 0:02:22.240 reaction in after hours trading coming at that point at 0:02:22.320 --> 0:02:25.440 Lovelow for Blomberg News in San Francisco. All right and 0:02:25.520 --> 0:02:28.119 thank you well. Shares of Alphabet meantime or down more 0:02:28.120 --> 0:02:30.920 than six percent in early trading. The owner of Google 0:02:30.960 --> 0:02:35.600 reported earnings and revenue that both missed expectations. Bloomberg Intelligence 0:02:35.639 --> 0:02:38.600 Senior analyst man Deep Singh has more in the miss. 0:02:38.639 --> 0:02:41.880 The reason why you see a ten percentage point miss 0:02:41.880 --> 0:02:45.320 when it comes to operating income is because search underperformed. 0:02:45.600 --> 0:02:48.960 Every time search underperformance, Google has a bad quarter. And 0:02:49.000 --> 0:02:51.120 in this case you have to ask you yourself, is 0:02:51.120 --> 0:02:53.799 it temporary, is it what Snap was seeing around a 0:02:54.000 --> 0:02:57.200 pricing or is it more structural because you know there's 0:02:57.240 --> 0:03:00.800 a lot more competition from Amazon, from Walmart, from Target. 0:03:00.880 --> 0:03:04.440 These companies are all add numbers now. Bloomberg Intelligence Senior 0:03:04.440 --> 0:03:07.639 analyst Mandeep Singh says Google is now planning to slow 0:03:07.760 --> 0:03:10.560 hiring and control expenses, and there are plenty of other 0:03:10.600 --> 0:03:13.280 earnings to catch you up. On Karen. Shares of Texas 0:03:13.320 --> 0:03:16.200 Instruments are down more than four percent. The chip makers 0:03:16.280 --> 0:03:20.520 quarterly forecast missed estimates, signaling the semiconductor slump is spreading 0:03:20.600 --> 0:03:24.440 beyond computing in phones. Shares of Visa Meantime are up 0:03:24.560 --> 0:03:27.680 more than one percent. The Digital Payments company reported profit 0:03:27.760 --> 0:03:31.920 and revenue that beat estimates, and Chipotle shares are little changed. 0:03:32.040 --> 0:03:36.440 Comparable sales and profit at Chipotle outpaced Wall Street expectations. 0:03:36.720 --> 0:03:40.320 Well tech earnings continue today, Nathan, with both Meta Platforms 0:03:40.320 --> 0:03:43.880 and Twitter reporting meantime. Elon Musk's acquisition of Twitter is 0:03:43.920 --> 0:03:47.320 in focus. He's pledging to close the deal by this Friday, 0:03:47.360 --> 0:03:50.440 and we get more from Bloomberg's Doug Christener. The comments 0:03:50.440 --> 0:03:53.400 were made yesterday in the video conference call with bankers 0:03:53.400 --> 0:03:56.240 helping to fund the deal. They are providing thirteen billion 0:03:56.280 --> 0:03:59.520 dollars of debt financing. We are told Musk also promised 0:03:59.560 --> 0:04:02.320 to help the banks market the debt to money managers 0:04:02.360 --> 0:04:05.440 after the deal closes. Several banks have been left in 0:04:05.480 --> 0:04:08.880 a lurch after Musk's sudden reversal on going through with 0:04:08.960 --> 0:04:12.400 buying Twitter and early October, and now they're facing paper 0:04:12.440 --> 0:04:15.600 losses of roughly five hundred million dollars on the transaction. 0:04:15.960 --> 0:04:18.520 The pain would be realized once the debt is sold 0:04:18.560 --> 0:04:21.960 to institutional investors. In New York, I'm Doug Chrisener Bloomberg 0:04:22.040 --> 0:04:25.320 Daybreak Doug Banks. While tech stocks are falling this morning, 0:04:25.320 --> 0:04:27.880 the U S stock market may still not have hit 0:04:27.920 --> 0:04:31.080 a bottom. That's according to Golden and Sachs. Strategists at 0:04:31.080 --> 0:04:33.520 the firm say equities don't fully reflect the latest rise 0:04:33.600 --> 0:04:35.960 in really yields and the odds of a recession in 0:04:36.000 --> 0:04:39.120 a severe economic downturn. Goldman's team says it expects the 0:04:39.240 --> 0:04:42.840 SMP five hundred to drop below That would be a 0:04:42.880 --> 0:04:46.320 twenty five percent fall from yesterday's close. Well, in Europe 0:04:46.320 --> 0:04:49.160 this morning, Nathan Banks are in focus once again as 0:04:49.200 --> 0:04:51.560 there's an earning season rolls on and we go live 0:04:51.600 --> 0:04:54.159 to London and get the very latest with Bloomberg's un Paul. 0:04:54.160 --> 0:04:56.640 It's good morning you in Good morning, count and Nathan. 0:04:56.760 --> 0:05:00.440 A big morning for European bankcountings and beating estimate as 0:05:00.480 --> 0:05:04.040 interest rates rise is the key theme. Italy's Uni credit 0:05:04.080 --> 0:05:07.240 has raised fully revenue and profit targets for a second 0:05:07.400 --> 0:05:11.279 straight quarter. Deutsche Bank sales and profits also beating, but 0:05:11.279 --> 0:05:15.359 analysts did flag higher than expected costs at Germany's biggest lender, 0:05:15.560 --> 0:05:19.200 and traders at London based Barclay's beating estimates are setting 0:05:19.240 --> 0:05:22.279 steep declines at the investment bank, with the economy keeping 0:05:22.320 --> 0:05:25.040 deals on the sidelines in London. I'm you in pots Plin, 0:05:25.080 --> 0:05:27.080 big day break, are you and thank you? Back here 0:05:27.120 --> 0:05:29.960 in the US, the focus on politics is ramping up. 0:05:29.960 --> 0:05:32.279 With less than two weeks till the mid term elections, 0:05:32.480 --> 0:05:35.640 the candidates for New York governor squared off last night. 0:05:35.800 --> 0:05:38.479 Bloomberg's Michael Barr joins US Live from New York with 0:05:38.640 --> 0:05:41.200 the highlights. Michael, thank you very much. Nathan. Crime and 0:05:41.320 --> 0:05:44.480 abortion took center stage last night as New York Governor 0:05:44.520 --> 0:05:49.760 Kathy HOCl facer Republican challenger Republican Representative Lee Selden in 0:05:49.839 --> 0:05:54.720 the campaign's only televised gubernatorial debate on Spectrum News New 0:05:54.800 --> 0:05:57.760 York One. Both candidates were asked to look ahead to 0:05:57.880 --> 0:06:00.440 the race for the White House in four Do you 0:06:00.480 --> 0:06:03.320 want to see Joe Biden run for re election? Yes? 0:06:03.360 --> 0:06:05.960 I do. Do you want to see Donald Trump run 0:06:06.000 --> 0:06:09.400 for president? In Lee's eldn not even thinking about it. 0:06:09.440 --> 0:06:13.159 I'm focused on fourteen days from today, VOCAL slams Elden's 0:06:13.200 --> 0:06:17.719 past support for abortion restrictions and former President Trump. Zelden 0:06:17.760 --> 0:06:21.640 criticized hocal's push to send millions to abortion providers to 0:06:21.720 --> 0:06:26.200 expand access for predicted surgeon out of state patients live 0:06:26.240 --> 0:06:29.599 in New York. Michael Barr Bloomberg Daybreak, Karen, alright, Michael, 0:06:29.680 --> 0:06:32.240 thank you well. Inflation is proving a key in the 0:06:32.279 --> 0:06:35.160 midterm elections orring. Housing costs are a big part of that, 0:06:35.440 --> 0:06:37.880 and in the country's biggest cities, renters are still feeling 0:06:37.880 --> 0:06:40.440 the pinch. New York City has the most expensive rental 0:06:40.480 --> 0:06:43.760 market in the country. According to the rental listing company zumber, 0:06:44.080 --> 0:06:46.919 the median one bedroom apartment runs for more than thirty 0:06:46.960 --> 0:06:50.039 eight hundred dollars a month. Boston has the second highest 0:06:50.080 --> 0:06:52.080 rent in the country. I closed to thirty one hundred 0:06:52.120 --> 0:06:56.360 dollars in San Francisco's close spied at roughly three thousand. Well, Karen, 0:06:56.360 --> 0:06:59.680 you've heard about the great resignation following COVID. Now the 0:06:59.760 --> 0:07:02.719 next swave of workers leaving their jobs could be driven 0:07:02.720 --> 0:07:06.560 by abortion rights. According to a survey by the nonprofit Catalyst, 0:07:07.040 --> 0:07:09.640 of employees are thinking of quitting because of their company's 0:07:09.680 --> 0:07:12.800 response to the Supreme Court's decision to overturn Roe v. 0:07:13.000 --> 0:07:17.760 Wade say their employer isn't doing enough to protect abortion rights. 0:07:18.120 --> 0:07:24.280 You're listening to Bloomberg Daybreak and it's now five oh 0:07:24.320 --> 0:07:27.080 seven on Wall Street. We've got the emergency road work 0:07:27.200 --> 0:07:30.320 this morning. It's got Root thirty six closed in keyboard 0:07:30.360 --> 0:07:33.400 and it is sixty four degrees in Central Park. Michael 0:07:33.400 --> 0:07:35.560 Barr is back with us from more on what's going 0:07:35.640 --> 0:07:37.600 on in New York and around the world this morning. Michael, 0:07:37.680 --> 0:07:39.840 thank you very much. Nathan. On top of New York, 0:07:39.880 --> 0:07:43.280 it was debate night and several other closely watched races. 0:07:43.520 --> 0:07:48.320 Pennsylvania Democrat John Federman debated against Republican doctor Memnaz as 0:07:48.360 --> 0:07:51.080 they vie for a critical Senate seat. In the opening 0:07:51.120 --> 0:07:54.080 minutes of last night's debate, Federman addressed what he called 0:07:54.120 --> 0:07:57.320 the elephant in the room, the stroke he suffered five 0:07:57.360 --> 0:07:59.880 months ago. I have run a campaign, and I've been 0:08:00.040 --> 0:08:03.400 very transparent about being very open about the fact we're 0:08:03.400 --> 0:08:06.480 in used captioning. And I believe that again, my doctors, 0:08:06.520 --> 0:08:09.240 the real doctors that I believe, they all believe that 0:08:09.280 --> 0:08:13.200 I'm ready to be served. Ohs ignored his opponent's health challenges, 0:08:13.240 --> 0:08:16.840 instead seizing on Fetterman's policies on immigration and crime and 0:08:16.840 --> 0:08:20.560 his support for President Joe Biden. On immigration and crossings 0:08:20.560 --> 0:08:23.520 at the southern U. S. Border, Dr Oz said it's 0:08:23.520 --> 0:08:26.720 an issue that's personal to him. My father was an immigrant, 0:08:26.720 --> 0:08:28.920 my mother were immigrants. You know, I understand what legal 0:08:28.920 --> 0:08:33.200 immigration offers us, but the completely porous, open nature of 0:08:33.200 --> 0:08:37.400 our border, which John Fetterman supports, has created a humanitarian crisis. 0:08:37.600 --> 0:08:41.040 The debate was held on News Nation. Meanwhile, the gubernatorial 0:08:41.080 --> 0:08:44.920 debate was held last night. In Michigan. Governor Gretchen Whitmer 0:08:45.080 --> 0:08:48.200 declared her position on abortion, saying she will be voting 0:08:48.320 --> 0:08:52.080 yes on a ballot initiative to protect abortion rights. The 0:08:52.200 --> 0:08:55.200 simple truth is the way to protect women and ensure 0:08:55.280 --> 0:08:58.040 that future generations have the same rights we've had for 0:08:58.040 --> 0:09:01.480 forty nine years is by a adopting Proposal three, and 0:09:01.520 --> 0:09:05.360 I will be a yes vote. Whitmer's Republican opponent, Tudor Dixon, 0:09:05.520 --> 0:09:08.760 argued that Michigan's Proposal three is nothing like the Roe v. 0:09:08.960 --> 0:09:12.200 Wade Supreme Court decision that stood for nearly fifty years 0:09:12.559 --> 0:09:15.320 when Governor Whitmer tells you that this is going to 0:09:15.400 --> 0:09:18.480 be ROW. It's not even close to ROW. It's not 0:09:18.559 --> 0:09:21.800 codifying ROW in our constitution, but it would be the 0:09:21.800 --> 0:09:24.920 most radical abortion law in the entire country. The only 0:09:24.920 --> 0:09:27.720 place that has something similar or China in North Korea. 0:09:27.800 --> 0:09:30.079 The debate was aired on w x y z t V. 0:09:30.640 --> 0:09:33.000 New York City has been ordered to reinstate a group 0:09:33.000 --> 0:09:35.839 of sanitation workers fired for refusing to get a COVID 0:09:35.880 --> 0:09:39.680 nineteen vaccine after a state court judge ruled the mandate 0:09:39.720 --> 0:09:43.280 was unlawful. The White House, as President Joe Biden, congratulated 0:09:43.320 --> 0:09:46.040 the new UK Prime Minister Rishi Sunac in a call 0:09:46.120 --> 0:09:48.719 in which they discussed the Russian invasion of Ukraine and 0:09:48.880 --> 0:09:52.160 challenges arising from China. Global News twenty four hours a 0:09:52.240 --> 0:09:55.360 day on air and on Bloomberg Quicktake, powered by more 0:09:55.400 --> 0:09:57.679 than twenty seven hundred journalist and analysts more than a 0:09:57.760 --> 0:10:01.240 hundred twenty countries. Michael Barren, this is Bloomberg, Nathan all right, 0:10:01.240 --> 0:10:07.640 thanks again, Michael. Caught up to five ten on Mall 0:10:07.679 --> 0:10:09.520 Street time for the Bloomberg Sports out Day, brought to 0:10:09.520 --> 0:10:12.040 you by Tri State OUTI. Good morning, John Stan shower 0:10:12.200 --> 0:10:14.280 day morning. Nathan good En at the Garden was Family 0:10:14.280 --> 0:10:17.120 Cup champion Colorado in to start a three game tour 0:10:17.160 --> 0:10:19.599 of the New York teams nineties shots on goal in 0:10:19.679 --> 0:10:21.719 the game Adam Fox score was six minutes left to 0:10:21.760 --> 0:10:24.400 tie the score. In the shootout, Ads scored in the 0:10:24.440 --> 0:10:26.400 fourth round. They beat the Rangers three to two. The 0:10:26.440 --> 0:10:30.000 Colorado goalie was Alexander Georgia beat his old team. The 0:10:30.160 --> 0:10:32.960 Ads visit the Devil's Friday. The Devil's just won six 0:10:33.000 --> 0:10:35.240 two in Detroit. They won four the last five the 0:10:35.360 --> 0:10:38.320 Avs and then visit the Islanders on Saturday. The Rangers 0:10:38.360 --> 0:10:41.160 visit the Islanders tonight. Nicks are at the Garden tonight 0:10:41.160 --> 0:10:43.559 to play Charlotte, and the Nets visit Milwaukee. Two of 0:10:43.600 --> 0:10:45.839 the best in the West met last night Phoenix the 0:10:45.960 --> 0:10:50.080 Golden State by nine. Jet say Elijah Moore will play 0:10:50.160 --> 0:10:53.079 Sunday against New England. The second year receiver, upset with 0:10:53.200 --> 0:10:56.320 lack of playing time, demanded a trade, didn't play last Sunday. 0:10:56.360 --> 0:10:59.360 The trade deadline is next Tuesday. The jetter five and 0:10:59.400 --> 0:11:02.800 two the Ran six and one. Daniel Jones comes off 0:11:02.840 --> 0:11:05.640 a one hundred yard rushing game for coach Bryant Aaballs, 0:11:06.320 --> 0:11:12.320 John Stashwar the Giant Sunday visits Seattle and the Seahawks 0:11:12.360 --> 0:11:15.160 also a surprise team, sole possession of first in the 0:11:15.280 --> 0:11:18.960 NFC West quarterback by Geno Smith, the ex Jet and Giant. 0:11:19.000 --> 0:11:21.599 Forty two year old Skip Schumacher named new manager of 0:11:21.640 --> 0:11:24.120 the Miami Marlins, replacing Don Mattie When, who had the 0:11:24.160 --> 0:11:27.320 job for seven years. Schumacher most recently a coach in St. Louis. 0:11:27.720 --> 0:11:30.800 Luis Roast, the x met manager, current Yankee third base coach, 0:11:31.280 --> 0:11:34.080 was a candidate for the Marlins managerial job. Ryan Cashman 0:11:34.120 --> 0:11:38.240 has been the Yankee Joe manager since his contract is expiring. 0:11:38.920 --> 0:11:42.040 S n Y reporting he will be offered a new deal. 0:11:43.679 --> 0:11:47.680 Sports Nathan, Yes, you are sp Futures down twenty three 0:11:47.679 --> 0:11:50.880 points right now. Death Future is down two points. Nastac 0:11:51.000 --> 0:11:53.679 Futures leading the declines for sure this morning down a 0:11:53.760 --> 0:11:56.160 hundred seventy six points, a drop of one and a 0:11:56.160 --> 0:12:01.400 half percent. On disappointing earnings from Microsoft, Alphabet and Texas Instruments. 0:12:01.400 --> 0:12:04.520 Bloomberg quick takes Alex Web joins us next. This is 0:12:04.600 --> 0:12:09.440 Bloomberg and Bloomberg Sports is brought to you by Audie. 0:12:09.480 --> 0:12:11.600 Don't let someone else drive off in the Audi model. 0:12:11.640 --> 0:12:14.080 You've always wanted to visit your local Tri state Audie 0:12:14.080 --> 0:12:15.920 dealer to get behind the wheel of yours today, or 0:12:16.000 --> 0:12:23.199 visit Audie Offers dot com for more information, markets, headlines 0:12:23.280 --> 0:12:26.319 and breaking news twenty four hours a day at Bloomberg 0:12:26.360 --> 0:12:29.680 dot Com, the Bloomberg Business Out and at Bloomberg Quick Take, 0:12:30.280 --> 0:12:39.240 He's a Bloomberg Business Flash and I'm kared. Moscow US 0:12:39.240 --> 0:12:42.800 Stock Index Future is following this morning as Megacap technology 0:12:42.880 --> 0:12:46.880 shares slump in early trading Nownsday futures. They're leading the declines, 0:12:46.960 --> 0:12:51.480 down one point six percent after disappointing quarterly updates from Microsoft, Google, 0:12:51.520 --> 0:12:54.480 parent Alphabet and Texas Instruments. And we check the markets 0:12:54.480 --> 0:12:57.160 every fifteen minutes throughout the trading day on Bloomberg so 0:12:57.240 --> 0:13:00.160 nowsday futures, they're down a hundred eighty three points. S 0:13:00.240 --> 0:13:03.320 and P futures down twenty four deal futures that will 0:13:03.400 --> 0:13:05.880 change the decks In Germany's up four tenths of upper 0:13:05.960 --> 0:13:08.760 sent ten year treasury up eleven thirty seconds YELD four 0:13:08.800 --> 0:13:10.920 point oh five percent. They yield on the two year 0:13:11.000 --> 0:13:14.120 four point four three percent Nimex screwed oil is up 0:13:14.120 --> 0:13:16.360 half percent or forty two cents at eighty five dollars 0:13:16.400 --> 0:13:19.040 seventy four cents of barrel comic school that one point 0:13:19.080 --> 0:13:22.079 two percent or nineteen dollars at sixteen seventy seven ten 0:13:22.120 --> 0:13:25.000 an ounce. The euro is at one point zero zero 0:13:25.120 --> 0:13:27.480 three one against the dollar, British pound one point one 0:13:27.559 --> 0:13:30.920 five nine six and again one forty six point nine six. 0:13:31.200 --> 0:13:33.760 And as a Bloomberg Business Flash, now here's Michael Barr 0:13:33.800 --> 0:13:36.000 with more on what's going on around the world. Michael, 0:13:36.040 --> 0:13:40.000 good morning, Good morning, Karen. Pennsylvania Democrat John Federman debated 0:13:40.040 --> 0:13:43.400 against Republican doctor Mementaz as they vie for a critical 0:13:43.480 --> 0:13:46.480 Senate seat. Federman, who suffered a stroke and may spoke 0:13:46.480 --> 0:13:49.280 about abortion. If you believe that the choice of your 0:13:49.280 --> 0:13:52.880 reproductive freedom belongs with Dr Oz, then you have a choice. 0:13:53.040 --> 0:13:56.319 But if you believe that the choice for abortion belongs 0:13:56.400 --> 0:13:59.400 between you and your doctor, that's what I fight for. 0:14:00.480 --> 0:14:03.600 Ah said that he is against federal involvement in a 0:14:03.600 --> 0:14:07.040 women's decision, but he supports what the states decide. I 0:14:07.080 --> 0:14:11.520 want women doctors, local political leaders, letting the democracy that's 0:14:11.520 --> 0:14:13.839 always allowed our nation to thrive to put the best 0:14:13.920 --> 0:14:17.720 ideas forward so states can decide for themselves. Meanwhile, gubernatorial 0:14:17.800 --> 0:14:21.000 debates were held in New York and Michigan. In the NBA, 0:14:21.160 --> 0:14:24.040 the Wizards won, the Warriors lost. In the NHL, the 0:14:24.120 --> 0:14:27.240 Rangers lost the Devil's One along with the Bruins. Global 0:14:27.240 --> 0:14:29.440 News twenty four hours a day on air and on 0:14:29.480 --> 0:14:32.560 Bloomberg quick Take, powered by more than seven hundred journalist 0:14:32.600 --> 0:14:34.760 and analysts in more than a hundred twenty countries. On 0:14:34.840 --> 0:14:38.160 Michael Barn This is Bloomberg. Nathan, Okay, Michael. Thanks, It's 0:14:38.160 --> 0:14:40.880 five nineteen on Wall Street. Live from the Bloomberg Interactive 0:14:40.880 --> 0:14:44.120 Brokers studios. This is Bloomberg Daybreak, and tech stocks are 0:14:44.160 --> 0:14:47.560 losing this morning as we kickoff tech earning season. Microsoft 0:14:47.600 --> 0:14:51.080 and Google parent Alphabet are leading the way with results 0:14:51.080 --> 0:14:54.200 that missed estimates. Texas Instruments did too. Let's dig into 0:14:54.240 --> 0:14:58.120 these numbers now. Bloomberg Quick Take correspondent Alex Webb is 0:14:58.200 --> 0:15:01.240 with us this morning. Alex morning, Is this the sign 0:15:01.280 --> 0:15:04.280 of the economic storm that so many had been warning about? 0:15:04.320 --> 0:15:07.560 In these results? Yes, I think storm is quite right 0:15:07.600 --> 0:15:11.280 because it's actually sort of slightly different factors affecting Um, 0:15:11.320 --> 0:15:14.080 the different strands of the tech industry. You know, we've 0:15:14.080 --> 0:15:17.880 got Microsoft, which has been affected by the slight slowing 0:15:18.040 --> 0:15:20.800 in cloud spending. We've got Google that's being affected by 0:15:21.160 --> 0:15:25.160 the reduced marketing budgets. And we've got Texas Instruments who 0:15:25.160 --> 0:15:28.720 have been impacted by firstly the huge expansion in the 0:15:29.320 --> 0:15:34.280 semiconductor capacity compounded by slowing down in consumer spending. So 0:15:34.840 --> 0:15:38.440 all those things playing together to create a pretty ugly picture. Yeah, well, 0:15:38.480 --> 0:15:40.640 let's go through these one by one, starting off with 0:15:40.760 --> 0:15:45.120 Microsoft warning about the impact not just for the strong dollar, 0:15:45.200 --> 0:15:48.720 but azure cloud demand does not seem to be where 0:15:48.720 --> 0:15:51.040 it was during the pandemic. I guess that's to be 0:15:51.080 --> 0:15:53.960 expected to some extent, But are these asure results a 0:15:54.000 --> 0:15:56.720 bit of a surprise that the disappointment we saw here? 0:15:57.880 --> 0:16:01.480 I mean, the expectations were already had already been tempered 0:16:01.560 --> 0:16:03.360 quite a lot. The fact that it came even below 0:16:03.400 --> 0:16:05.800 those was clearly something the market was not to really 0:16:05.840 --> 0:16:10.440 appreciative of. The Yes, you're quite right that essentially the 0:16:10.480 --> 0:16:13.280 lockdow will happen with the lockdowns that perhaps brought forward 0:16:13.440 --> 0:16:15.920 a lot of the cloud demand, accelerated the cloud demand, 0:16:15.960 --> 0:16:18.040 which means that actually people who might have been or 0:16:18.040 --> 0:16:19.960 companies that might have been likely to adopt it sort 0:16:20.000 --> 0:16:22.480 of now have already done, so she caveat it. Of course, 0:16:22.520 --> 0:16:24.400 they're saying it is still a business that is growing 0:16:24.680 --> 0:16:28.840 at a fairly heptic pace. The the forward looking comment 0:16:28.920 --> 0:16:31.760 was that growth would be five percentage points lower than 0:16:31.800 --> 0:16:35.120 in the previous quarter. That imply is still thirty seven 0:16:35.120 --> 0:16:38.080 percent growth, which you know, most companies would be delighted at. 0:16:38.240 --> 0:16:42.200 But expectations for this business have been pretty high, and 0:16:42.320 --> 0:16:47.120 when it comes to Alphabet's results, very interesting and disappointing 0:16:47.160 --> 0:16:50.160 as well to investors. That we're starting to see that 0:16:50.760 --> 0:16:56.880 even Google's business, which had been somewhat insulated from the 0:16:56.880 --> 0:17:00.800 the ads spending head winds for some of its other competitors, 0:17:00.880 --> 0:17:03.320 is starting to get hit here as well. Yeah, Google 0:17:03.360 --> 0:17:06.040 really is the big beast when it comes to advertising technology. 0:17:06.240 --> 0:17:10.359 It's it's really gained ground over Facebook, you know, because 0:17:10.400 --> 0:17:12.639 if you're navigating the Internet, you kind of need to 0:17:12.760 --> 0:17:15.000 use Google Search, and that means that if you're therefore 0:17:15.040 --> 0:17:17.840 in the business of selling things, you need to be 0:17:17.840 --> 0:17:20.040 in Google Search too. Now a lot of their customers 0:17:20.080 --> 0:17:23.760 are in fact small and medium sized enterprises and and 0:17:23.880 --> 0:17:27.479 these guys are finding perhaps that consumer spending is has 0:17:27.480 --> 0:17:29.919 slowed down. Therefore they start cutting their own budgets, and 0:17:30.200 --> 0:17:33.200 marketing tends to be the first thing that falls victim 0:17:33.240 --> 0:17:36.000 to that. Um we had seen plenty of other smaller 0:17:36.040 --> 0:17:39.119 ad tech players from Snap and and and beyond to 0:17:39.880 --> 0:17:41.639 feel the impact of that. The fact that it is 0:17:41.680 --> 0:17:44.239 now affecting Google is significant and shows that they are 0:17:44.280 --> 0:17:47.960 not immune. And now for Texas Instruments to see that 0:17:48.520 --> 0:17:52.159 the chips story, it's not just the digital chips. So 0:17:52.240 --> 0:17:55.800 we focus so much on with you know, Taiwan Semiconductor, Samsung, 0:17:55.840 --> 0:17:58.280 are that, some of those other companies, but these analog 0:17:58.400 --> 0:18:01.880 chips as well are getting hit by a demand problems. Yes, 0:18:01.960 --> 0:18:07.000 and Texas Instruments has a huge, huge, long customer lists 0:18:07.080 --> 0:18:09.480 stretching from you know, not just consumer kids, but through 0:18:09.560 --> 0:18:13.560 to automotive and industrials. And of course people at the 0:18:13.560 --> 0:18:15.760 moment are not buying as many cars as perhaps they 0:18:17.080 --> 0:18:20.240 might otherwise have done. And the real comment that was 0:18:20.280 --> 0:18:24.120 interesting was to slow down industrial spending. So industrial customers 0:18:24.119 --> 0:18:27.280 clearly tightening their purse strings a little bit. That t 0:18:27.600 --> 0:18:30.959 I feeling that And and on the sort of supply 0:18:31.080 --> 0:18:35.280 side because of the trip constraints that were felt during 0:18:35.400 --> 0:18:41.400 the lockdowns, there was an acceleration of investment in additional capacity. 0:18:41.760 --> 0:18:45.080 So now you've got a tightening of demand an acceleration 0:18:45.119 --> 0:18:48.080 of supply, and which clearly is not an ideal situation 0:18:48.080 --> 0:18:50.399 if in those park markets. So in our last thirty 0:18:50.400 --> 0:18:52.480 seconds here, Alex, what does this tell us about what 0:18:52.560 --> 0:18:54.360 we could expect from some of the other big names 0:18:54.400 --> 0:18:56.160 that are going to be reporting later on this week, 0:18:56.200 --> 0:19:00.200 particularly Meta platforms coming up later this afternoon. I think 0:19:00.200 --> 0:19:03.640 perhaps that expectations for Meta are going to be, given 0:19:03.680 --> 0:19:06.200 the context we've we've seen in the past few days, 0:19:06.800 --> 0:19:10.320 pretty low. Perhaps that might mean actually it's uh, it's 0:19:10.680 --> 0:19:13.440 it'll be easy to surprise that any glimmer of hope 0:19:13.480 --> 0:19:17.800 will be a cause for optimism, but um that there 0:19:17.840 --> 0:19:19.760 is a huge amount of optimism heading into it. And 0:19:19.760 --> 0:19:21.479 of course when you look at it, and we've got 0:19:21.520 --> 0:19:24.479 Amazon coming up as well, yeah, you consumer spending has 0:19:24.480 --> 0:19:26.240 also slid down. We'll have to see whether their cloud 0:19:26.240 --> 0:19:28.680 business is being effected the same way the Microsoft has. 0:19:28.760 --> 0:19:32.119 Now we're certainly seeing the impact from these results in 0:19:32.200 --> 0:19:37.160 the shares this morning, with Microsoft down six percent right now, 0:19:37.560 --> 0:19:41.399 Alphabet leading the decline six and a third percent lower, 0:19:41.720 --> 0:19:45.800 and Texas Instruments now down four point six percent on 0:19:45.840 --> 0:19:49.720 those earnings. Alex Web of Bloomberg quick take as always 0:19:49.760 --> 0:19:53.000 great to hear from you, even after a disappointing tech 0:19:53.040 --> 0:19:56.280 earnings day. We've seen AZDAC futures now down a hundred 0:19:56.359 --> 0:19:58.680 ninety six points to drop at one point seven percent 0:19:58.760 --> 0:20:01.280 their S ANDP futures are on twenty eight. Dow futures 0:20:01.280 --> 0:20:08.400 down thirty three points. This is Bloomberg Bloomberg eleven three 0:20:08.400 --> 0:20:12.399 oh weather cloudy today, scattered showers with highs near seventy degrees, sunny, 0:20:12.480 --> 0:20:15.560 upper sixties Tomorrow. It will be mostly sunny Friday, but 0:20:15.640 --> 0:20:18.480 cooler with a high only near sixty Right now sixty 0:20:18.480 --> 0:20:25.040 four in Central Park. Broadcasting live from the Bloomberg Interactive 0:20:25.119 --> 0:20:28.960 Broker's studio in New York. Bloomberg E Living Freedom to Washington, 0:20:29.040 --> 0:20:33.120 d C, Bloomberg to Boston, Bloomberg one O six one 0:20:33.280 --> 0:20:36.720 to San Francisco, Bloomberg nine sixt to the Country, Sirius 0:20:36.880 --> 0:20:40.040 XM chto one nineteen and around the globe the Bloomberg 0:20:40.080 --> 0:20:44.000 Business app and Bloomberg Radio dot Com. This is Bloomberg 0:20:44.080 --> 0:20:52.399 Daybreak and it's about thirty on Wall Street. Good morning, 0:20:52.440 --> 0:20:55.480 I'm Karen Moscow, I'm Nathan Heger. Bloomberg Daybreak is brought 0:20:55.480 --> 0:20:58.200 to you by SEI. Built on advanced technologies and fifty 0:20:58.280 --> 0:21:01.560 years of innovation. SEI offers asset managers a comprehensive and 0:21:01.560 --> 0:21:05.000 flexible operations outsourcing platform. Go to se i C dot 0:21:05.040 --> 0:21:08.160 com slash managers. But we're just about four hours away 0:21:08.160 --> 0:21:10.040 from the open of US trading. Let's yet you have 0:21:10.080 --> 0:21:11.560 to date on the news you need to know at 0:21:11.560 --> 0:21:14.679 this hour. US futures are lower this morning after earning 0:21:14.680 --> 0:21:19.480 sir Microsoft and Alphabet despite beating projection. Shares of Microsoft 0:21:19.560 --> 0:21:23.080 are down about six percent this morning after the strong 0:21:23.119 --> 0:21:26.400 dollar slowed revenue growth, and shares of Alphabet are down 0:21:26.440 --> 0:21:29.240 almost six and a half percent after sales missed estimates. 0:21:29.320 --> 0:21:33.080 Bloomberg Intelligence Senior analyst Mandeep Sing says Alphabet and Google 0:21:33.480 --> 0:21:37.720 are facing a fundamental problem. Search is the main business 0:21:37.880 --> 0:21:40.879 and that is what drives margins. The question is is 0:21:40.920 --> 0:21:44.399 search saturated? Probably yes, because there's a lot of direct 0:21:44.400 --> 0:21:47.280 traffic going through these mobile apps. You know the companies 0:21:47.320 --> 0:21:49.560 that I talked about on the retail side, you don't 0:21:49.560 --> 0:21:52.439 need search you start off your search on Walmart or 0:21:52.480 --> 0:21:56.680 Target or Amazon. Bloomberg Intelligence analyst Mandeep Sing says Google 0:21:56.880 --> 0:22:00.240 is now planning to slow hiring and control expenses. Shares 0:22:00.280 --> 0:22:02.280 of Texas Instruments are down more than four and a 0:22:02.359 --> 0:22:06.159 half percent. Karen the chipmaker's forecast misdestimates, signaling a broader 0:22:06.160 --> 0:22:09.400 slowdown in the semiconductor industry. So FI head of investment 0:22:09.480 --> 0:22:12.240 Strategy Liz Young says the outlook for tech stocks may 0:22:12.280 --> 0:22:14.919 now be uncertain. We're sitting at a point in the 0:22:15.000 --> 0:22:17.480 year where we've done a lot of work and valuations 0:22:17.520 --> 0:22:20.440