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Speaker 1: Good morning.

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Speaker 2: I'm Nathan Hager and I'm Amy Morris. Here are the

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Speaker 2: stories we're following today.

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Speaker 3: The drop in futures follows another record close on highs

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Speaker 3: for US stocks and a disappointing after the bell forecast

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Speaker 3: from Intel. The shares of the chip maker are plunging

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Speaker 3: twelve percent in early trading. Intel's first quarter projection for

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Speaker 3: both sales and profit came in well short of Wall

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Speaker 3: Street estimates. Dan Morgan is a portfolio manager with Sinovis Trust.

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Speaker 4: The guideance going into the first quarter is disappointing, even

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Speaker 4: if you look at the midpoint of that range at

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Speaker 4: the game and revenues, and the came at twelve point

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Speaker 4: seven billion. Street was at fourteen point two billion, and

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Speaker 4: then that EPs number was a big mess.

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Speaker 3: Dan Morgan of Sinov's Trust notes the chip maker's personal

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Speaker 3: computer business is recovering, but demand is weakening in the

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Speaker 3: lucrative market for data center.

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Speaker 2: Chips, and we're also seeing shares of Visa fall. In

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Speaker 2: early trading, all of the world's biggest payments network posted

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Speaker 2: profit above estimates. It forecasts low double digit revenue growth

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Speaker 2: and diluted earnings per share to grow in the low

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Speaker 2: teens the stock had closed at a record high before

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Speaker 2: the earnings.

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Speaker 3: And Amy earnings are front in center in Europe as well.

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Speaker 3: Let's go to London get the latest with Bloomberg Stephen Carrol, Stephen.

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Speaker 5: Good morning, Nathan and Amy. Better than expected sales figures

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Speaker 5: from LVMH have champagne corks popping on European markets, investors

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Speaker 5: seeing the resilience from the world's largest luxury conglomerate as

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Speaker 5: a positive sign for the sector. The sentiment driving shares

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Speaker 5: higher not only for LVMH, but also rivals kerring Ermez

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Speaker 5: and Richemont. Another top performing stock in Europe is drinks

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Speaker 5: maker Remi Quantro. That's despite reporting falling sales, investors instead

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Speaker 5: focused on cost cutting plans and hopes the Cognac slump

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Speaker 5: may have bottomed out.

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Speaker 6: In London.

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Speaker 5: Stephen Carrol, Bloomberg Radio.

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Speaker 2: All right, thanks Steven. Back here in the US, we're

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Speaker 2: seeing major changes at Apple. The company is embarking on

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Speaker 2: an historic overhaul of its iOS Safarian app store offerings

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Speaker 2: in the European Union, Mark German covers Apple for Bloomberg

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Speaker 2: in San Francisco, So I would say.

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Speaker 7: These changes are historic. For the first time, Apple is

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Speaker 7: going to allow users and again this is EU specific

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Speaker 7: to install third party app stores. So you'll be able

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Speaker 7: to install maybe an app store from Epic Games, maybe

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Speaker 7: from Microsoft met maybe from Meta, replace the app store

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Speaker 7: from Apple on the phone, and install applications to get

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Speaker 7: those third party programs. So that's the biggest change.

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Speaker 2: Bloomberg's Mark German says the sweeping changes are coming in

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Speaker 2: March and is a direct response to the new EU

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Speaker 2: New Digital Markets Act, which imposes rigid restrictions on the

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Speaker 2: largest tech firms.

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Speaker 3: Turning to the economy, amy the US has pulled farther

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Speaker 3: ahead in the race to be the world's biggest. We

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Speaker 3: get the details from Bloomberg's Jeff Bellinger.

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Speaker 8: The US economy is emerging from the pandemic period in

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Speaker 8: a better place than China's, and you can thank the

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Speaker 8: vibrant American consumer. Gross domestic product rows six point three

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Speaker 8: percent in nominal terms, that is, unadjusted for inflation last year,

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Speaker 8: outpacing China is four point six percent gain. China has

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Speaker 8: been struggling under the weight of a year's long real

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Speaker 8: estate bust and its worst streak of deflation in some

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Speaker 8: twenty five years. The economic outperformance is also reflected in

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Speaker 8: the respective country stock markets. US shares have hit all

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Speaker 8: time highs this week, while Chinese equities are mired in

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Speaker 8: a six trillion dollar plus bear market route. Jeff Bullinger,

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Speaker 8: Bloomberg Radio.

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Speaker 2: Thank you, Jeff, And speaking of the economy, we will

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Speaker 2: get a report this morning that is closely watched by

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Speaker 2: the FED. The core PCE deflator, the Fed's preferred inflation measure,

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Speaker 2: likely grew at a subdued pace in December. Economists are

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Speaker 2: forecasting a gain of two tenths of a percent.

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Speaker 9: Well.

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Speaker 3: Treasury Secretary Janet Yellen is putting out some positive words

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Speaker 3: about inflation, amy saying it is now well under control.

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Speaker 10: We were through a period in which inflation was high,

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Speaker 10: higher than we hid really seen since the late seven

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Speaker 10: or early eighties, but it has come down quickly.

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Speaker 3: Treasury Secretary Yelling ads Americans are also benefiting from wage

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Speaker 3: growth that now exceeds inflation.

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Speaker 2: On Capitol Hill, Senate Republican leaders are trying to salvage

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Speaker 2: a deal on Ukraine aid and border security. GOP negotiators

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Speaker 2: are concerned an impasse at the border would deny Ukraine

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Speaker 2: the sixty one billion dollars in aid that it's seeking

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Speaker 2: in its fight against Russia. Meanwhile, Texas is still putting

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Speaker 2: up razor wire at the border, even after the Supreme

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Speaker 2: Court and gave the Biden administration the go ahead to

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Speaker 2: cut it down. Texas Governor Greg Abbott, we.

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Speaker 11: Are going to make it impossible to enter Texas illegally,

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Speaker 11: and that includes maintaining the National Garland border, building more

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Speaker 11: border wall just like what President Trump put up, as

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Speaker 11: well as extending the razor wire wall in the state

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Speaker 11: of Texas.

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Speaker 2: Governor Greg Abbott tells Bloomberg the state has a constitutional

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Speaker 2: right to defend itself. You can hear more of our

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Speaker 2: conversation with the Texas governor on the Bloomberg Talks podcast.

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Speaker 3: And when it comes to those border togoas Amy, some

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Speaker 3: senators are concerned Donald Trump is inserting himself into the process.

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Speaker 3: Bloomberg zed Baxter has that part of the story.

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Speaker 12: Mitt Romney says this cannot happen.

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Speaker 9: Former President Trump is indicated to senators that he does

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Speaker 9: not want us to sell the pumbit the border. He

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Speaker 9: wants to lay the play of the border at Biden

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Speaker 9: and the idea that someone running for president would say,

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Speaker 9: please hurt the country so I can blame my opponent

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Speaker 9: and help my politics is a shocking development.

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Speaker 12: Now with Trump being perceived as the eventual GOP nominee,

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Speaker 12: of the question is will he insert himself into every

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Speaker 12: congressional battle Ed Baxter, Bloomberg Radio.

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Speaker 8: Thank you, Ed.

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Speaker 2: Closing arguments are set to begin later today in the

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Speaker 2: defamation case against Donald Trump. They come after the former

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Speaker 2: president left a Manhattan courtroom fuming after his three minute

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Speaker 2: testimony gave him little time to refute writer's sexual abuse claims.

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Speaker 2: Time now for a look at some of the other

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Speaker 2: stories making news around the world, and for that we're

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Speaker 2: joined by Bloomberg's John Tucker.

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Speaker 6: Good morning John, Good morning Amy. A moratorium this morning

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Speaker 6: from the White House, the Biden administration has halted the

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Speaker 6: approval of new licenses to export liquefied natural gas. This

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Speaker 6: gives the administration time to scrutinize how the shipments impact

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Speaker 6: climate change. The administration's pause comes as environmentalists have seized

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Speaker 6: on the projects as a litmus test to the President's

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Speaker 6: climate change commitment. Overnight, the state of Alabama executed death

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Speaker 6: row inmate Kenneth Smith, marking the first time in US

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Speaker 6: history nitrogen gas was used to carry out capital punishment.

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Speaker 6: The UN Human Rights Office called on Alabama to stop

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Speaker 6: the execution, noting there's no scientific evidence to prove that

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Speaker 6: execution by nitrogen inhalation will not cause grave suffering. General

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Speaker 6: Motor is blaming poor leadership for mishandling its Cruise Robotaxi crisis.

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Speaker 6: That story from Bloomberg's Charlie.

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Speaker 13: It is an admission the company is hoping we'll get

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Speaker 13: its cars back on the roads. A report by the

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Speaker 13: law firm Quinn Immanuel, which was paid by Cruise, outlines

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Speaker 13: how executives took an adversarial approach with regulators after one

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Speaker 13: of its autonomous cars struck and seriously injured a woman.

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Speaker 13: The incident led Cruise to halt its fleet nationwide, which

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Speaker 13: undercuts GMCEO Mary Barra's vision to transform the carmaker from

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Speaker 13: a twentieth century metal bender to a transportation company of

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Speaker 13: the future. Charlie Pellett Bloomberg Radio.

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Speaker 6: Attorney General Merrick Garland spoke at an event marking the

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Speaker 6: start of a new foundation named at supporting mental health

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Speaker 6: and wellness for law enforcement officers.

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Speaker 14: Coverage through that program now extends to officers who are

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Speaker 14: permanently and totally disabled due to certain mental health disorders,

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Speaker 14: as well as to those who die by suicide as

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Speaker 14: a result of exposure to traumatic events that they encounter

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Speaker 14: while on duty.

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Speaker 6: Howie Lebengood Foundation, named after a Capitol police officer who

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Speaker 6: defended the building during the January sixth riot and done

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Speaker 6: by suicide three days later. It flew seventy two times.

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Speaker 6: It was only expended to fly five. NASA's Ingenuity Space

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Speaker 6: helicopter was deployed to the surface of Mars in two

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Speaker 6: thousand and one. NASA's now abounced the four pounds are

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Speaker 6: of vehicle has flown its last mission. Global news twenty

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Speaker 6: four hours a day, whenever you want it with Bloomberg

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Speaker 6: News Now. I'm John Tucker. This is Bloomberg Amy.

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Speaker 2: All right, Thank you, John, and we bring you news

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Speaker 2: throughout the day here on Bloomberg Radio. But now you

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Speaker 2: can get the latest news on demand whenever you want it.

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Speaker 2: Subscribe to Bloomberg News Now to get the latest headlines

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Speaker 2: at the click of a button. Get informed on your schedule.

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Speaker 2: You can listen and subscribe to Bloomberg News Now on

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Speaker 2: the Bloomberg Business app, Bloomberg dot Com plus apples, Spotify,

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Speaker 2: and anywhere else you get your podcasts. Time now for

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Speaker 2: our Bloomberg Sports Update, and for that we bring in

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Speaker 2: John Stashauer.

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Speaker 15: Amy upset at the Australian Open, where Novak Djokovic is

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Speaker 15: that ten times champion. He had won thirty three matches

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Speaker 15: in a row. He was trounced by the fourth seed,

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Speaker 15: Jannick Sinner, twenty two year old from Italy, who won

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Speaker 15: sixty one, six, y two, six, seven, and then six

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Speaker 15: to three. He's the youngest finalist at the Australian Open

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Speaker 15: since Djokovic. In two thousand and eight, two NFL teams

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Speaker 15: named new coaches, the LNF Falcons going with Raheem Morris,

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Speaker 15: who had.

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Speaker 8: Been the defensive cordator of the Rams.

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Speaker 15: He actually was an Atlanta assistant from twenty fifteen to

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Speaker 15: twenty and the Falcons interim head coach. He was also

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Speaker 15: the coach of the Tampa Bay Bucks for three years.

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Speaker 15: Carolina Panthers going with a relative unknown, Dave Kanalis, who

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Speaker 15: had been coaching the offense at Tampa Bay.

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Speaker 8: He's only forty two years old.

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Speaker 15: He's spent thirteen years coaching with the Seahawks NBA blowout

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Speaker 15: in New York, Nicks All over the defending champion Nuggets

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Speaker 15: won twenty two to eighty four, far and away the

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Speaker 15: Nuggets worst loss season Celtics with a blowout win that

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Speaker 15: was in Miami won forty three to one ten seven

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Speaker 15: Celtics and double figures. Warriors at home lost by a

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Speaker 15: point to Sacramento won thirty four one thirty three. The

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Speaker 15: ex Warrior Harrison Barnes the career high thirty nine points.

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Speaker 15: Wizards lost at home to Utah once twenty three to

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Speaker 15: one o eight. The Wizard's making a coaching change, moving

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Speaker 15: west Untel junior to the front office. Ryan Keith, an

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Speaker 15: assistant coach, takes over for the rest of the season.

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Speaker 15: Bruins won in overtime at Ottawa three to two on

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Speaker 15: a Brad Marshan goal. Edmonton shut out Chicago. The Oilers

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Speaker 15: have won fifteen in a row. John Stashed. We're Bloomberg Sports.

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Speaker 16: From coast to coast, from New York to San Francisco,

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Speaker 16: Boston to Washington, DC, nationwide on sirisxam, the Bloomberg Business

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Speaker 16: app in Bloomberg dot com. This is Bloomberg Daybreak.

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Speaker 8: Good morning.

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Speaker 3: I'm Nathan Hager. The frenzy around cutting edge technology and

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Speaker 3: artificial intelligence may be leaving some big tech names behind.

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Speaker 3: This morning, we're talking about Intel. It is tumbling in

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Speaker 3: early trading after delivering a sales and profit forecast that

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Speaker 3: came in well short of Wall Street expectations. For more

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Speaker 3: on these earnings and the text story going forward, we're

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Speaker 3: joined by Bloomberg's Pritty Gupta Critty. What's holding Intel back?

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Speaker 17: A little bit of everything? And you know, this is

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Speaker 17: so much pressure that Intel and Pad Gelsinger at the

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Speaker 17: helm of it really has to live up to remember

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Speaker 17: you for the last i want to say, two or

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Speaker 17: three years, even in kind of the epitome of that

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Speaker 17: chip gold that we had in twenty twenty one, where

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Speaker 17: supply chain issues were really the focus. You had this

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Speaker 17: major concern that Intel was not pulling its weight in

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Speaker 17: terms of the chip sector, and Pad Gelsinger at the

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Speaker 17: helmet it said, look, this is going to be our

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Speaker 17: turnaround story. We are going to be the comeback kid

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Speaker 17: of the chip sector. And that's exactly what's not happening.

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Speaker 17: Let me walking through the numbers here, Nathan, because they're

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Speaker 17: pretty substantial. It's their first quarter forecast that's really worrying

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Speaker 17: a lot of people here. The revenue coming in about

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Speaker 17: twelve point two billion to thirteen point two billion. That's

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Speaker 17: the forecast for what this first quarter is supposed to

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Speaker 17: look like for them. But the estimate, the Wall Street estimate,

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Speaker 17: was fourteen point three billions, so they're almost missing that

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Speaker 17: by somewhere between one to two billion dollars. That is

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Speaker 17: a very big margin to be missing from. It also

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Speaker 17: has to do a lot when it comes to their

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Speaker 17: actual business model and the when we think of Intel,

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Speaker 17: we kind of think of them as their old guard

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Speaker 17: tech and instead they've actually been trying to compete with

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Speaker 17: likes of Advanced micro Devices AMD or otherwise or Nvidia

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Speaker 17: for example, that really been going headfirst into the AI sector.

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Speaker 17: So Intel has been saying, look, traditionally we look at PCs,

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Speaker 17: maybe we should be focusing and set on the data

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Speaker 17: centers that are meant to power the AI story. And

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Speaker 17: that's where they're saying that those that investment the sales

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Speaker 17: there fell ten percent in the fourth quarter, So not

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Speaker 17: only are they not growing, they're actually able to keep

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Speaker 17: up the momentum that they currently have, they're actually contracting.

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Speaker 17: So it's kind of a bag of negativity when it

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Speaker 17: comes to the Intel story.

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Speaker 3: So does this mean that the names that we've heard

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Speaker 3: of elsewhere in Vidia, AMD, these names that have built

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Speaker 3: so much excitement around the idea of artificial intelligence and

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Speaker 3: gotten a lot of investors jazzed up. Are they just

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Speaker 3: running away with this and Intel's getting left behind?

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Speaker 17: Well, they've got a little bit of a different dynamic here.

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Speaker 17: Vidia think about it as a much larger company that

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Speaker 17: Intel is the same with advanced micro devices. AMD actually

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Speaker 17: was one of the early players in terms of really

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Speaker 17: solidifying that AI presence. Remember they actually partnered with meta

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Speaker 17: platforms early on when Mark Zuckerberg's that he wanted to

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Speaker 17: dive in to the metaverse, and AMD kind of glatched

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Speaker 17: onto that. Story. Pad Gelsinger over at, Intel's dealing with

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Speaker 17: a little bit of a different issue, and it really

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Speaker 17: comes down to manufacturing capability. Remember, Intel was one of

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Speaker 17: the chief names that President Joe Biden has really been

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Speaker 17: focusing on when it comes to bringing some of the

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Speaker 17: chip manufacturing capacity back onto US soil. What that does

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Speaker 17: is make chips a little bit more expensive. It can

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Speaker 17: also mean losing customers in the process. So what Intel

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Speaker 17: has done is actually doubled down on their manufacturing operations

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Speaker 17: really putting tens of billions of dollars into US factories

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Speaker 17: as well, And that's something that some of their rivals

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Speaker 17: aren't doing because they are still doing a lot of

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Speaker 17: that production out of Taiwan, out of South Korea. Intel

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Speaker 17: kind of changing the game on that front, and by

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Speaker 17: the way, making investments that really only going to pay

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Speaker 17: ten twenty years.

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Speaker 2: Down the road.

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Speaker 17: So they're dealing with a different set of issues. But

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Speaker 17: net Nathan, you're right, they are falling behind.

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Speaker 3: So what about that longer term outlook? When you see

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Speaker 3: a short term outlook like this that so disappoints Wall Street,

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Speaker 3: what does that mean for things when it comes to

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Speaker 3: Pad Gelsinger's turnaround plans longer term?

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Speaker 17: Well, look, he's still trying to enlist a lot of confidence.

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Speaker 17: If you look at on the commentary that came out

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Speaker 17: with this earning story, he is saying, look, this is

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Speaker 17: a first quarter story only if you look at their projections,

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Speaker 17: they are meant to kind of dip first and then recover.

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Speaker 17: But the problem is, there is a credibility issue here,

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Speaker 17: There's a believability issue here because Pat Gelsinger is also

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Speaker 17: on this kind of campaign to re ensure a lot

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Speaker 17: of investors and a lot of the folks that are

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Speaker 17: investing Intel not to mention the American government that they

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Speaker 17: can't actually pull the off. The problem here is just

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Speaker 17: that that initial number, the margin is so low, or

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Speaker 17: actually so large, that the drop in revenue is so

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Speaker 17: low that you are starting to see real issues when

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Speaker 17: it comes to Okay, well, not only are you going

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Speaker 17: to make up the margin you're missing in the first quarter,

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Speaker 17: but you also have to then grow by a substantial

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Speaker 17: amount to catch up to your competitors. And that's really

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Speaker 17: where they're facing a lot of the hurdles.

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Speaker 3: So in our last thirty seconds, what could we see

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Speaker 3: going forward from Intel, Well, if still.

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Speaker 17: This campaign about believability, they basically have to prove that

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Speaker 17: their way is the right way, that this comeback story

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Speaker 17: is not over yet and they can't actually deliver on

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Speaker 17: it at a time when the AI story and AI

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Speaker 17: investment story is moving very very quickly, and it comes

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Speaker 17: down to the fact of where do you want to

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Speaker 17: put your weight behind the traditional PC business that has

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Speaker 17: proved very lucrative or this kind of new fangled AI story.

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