Speaker 1: Good morning.
Speaker 2: I'm Nathan Hager and I'm Amy Morris. Here are the
Speaker 2: stories we're following today.
Speaker 3: The drop in futures follows another record close on highs
Speaker 3: for US stocks and a disappointing after the bell forecast
Speaker 3: from Intel. The shares of the chip maker are plunging
Speaker 3: twelve percent in early trading. Intel's first quarter projection for
Speaker 3: both sales and profit came in well short of Wall
Speaker 3: Street estimates. Dan Morgan is a portfolio manager with Sinovis Trust.
Speaker 4: The guideance going into the first quarter is disappointing, even
Speaker 4: if you look at the midpoint of that range at
Speaker 4: the game and revenues, and the came at twelve point
Speaker 4: seven billion. Street was at fourteen point two billion, and
Speaker 4: then that EPs number was a big mess.
Speaker 3: Dan Morgan of Sinov's Trust notes the chip maker's personal
Speaker 3: computer business is recovering, but demand is weakening in the
Speaker 3: lucrative market for data center.
Speaker 2: Chips, and we're also seeing shares of Visa fall. In
Speaker 2: early trading, all of the world's biggest payments network posted
Speaker 2: profit above estimates. It forecasts low double digit revenue growth
Speaker 2: and diluted earnings per share to grow in the low
Speaker 2: teens the stock had closed at a record high before
Speaker 2: the earnings.
Speaker 3: And Amy earnings are front in center in Europe as well.
Speaker 3: Let's go to London get the latest with Bloomberg Stephen Carrol, Stephen.
Speaker 5: Good morning, Nathan and Amy. Better than expected sales figures
Speaker 5: from LVMH have champagne corks popping on European markets, investors
Speaker 5: seeing the resilience from the world's largest luxury conglomerate as
Speaker 5: a positive sign for the sector. The sentiment driving shares
Speaker 5: higher not only for LVMH, but also rivals kerring Ermez
Speaker 5: and Richemont. Another top performing stock in Europe is drinks
Speaker 5: maker Remi Quantro. That's despite reporting falling sales, investors instead
Speaker 5: focused on cost cutting plans and hopes the Cognac slump
Speaker 5: may have bottomed out.
Speaker 6: In London.
Speaker 5: Stephen Carrol, Bloomberg Radio.
Speaker 2: All right, thanks Steven. Back here in the US, we're
Speaker 2: seeing major changes at Apple. The company is embarking on
Speaker 2: an historic overhaul of its iOS Safarian app store offerings
Speaker 2: in the European Union, Mark German covers Apple for Bloomberg
Speaker 2: in San Francisco, So I would say.
Speaker 7: These changes are historic. For the first time, Apple is
Speaker 7: going to allow users and again this is EU specific
Speaker 7: to install third party app stores. So you'll be able
Speaker 7: to install maybe an app store from Epic Games, maybe
Speaker 7: from Microsoft met maybe from Meta, replace the app store
Speaker 7: from Apple on the phone, and install applications to get
Speaker 7: those third party programs. So that's the biggest change.
Speaker 2: Bloomberg's Mark German says the sweeping changes are coming in
Speaker 2: March and is a direct response to the new EU
Speaker 2: New Digital Markets Act, which imposes rigid restrictions on the
Speaker 2: largest tech firms.
Speaker 3: Turning to the economy, amy the US has pulled farther
Speaker 3: ahead in the race to be the world's biggest. We
Speaker 3: get the details from Bloomberg's Jeff Bellinger.
Speaker 8: The US economy is emerging from the pandemic period in
Speaker 8: a better place than China's, and you can thank the
Speaker 8: vibrant American consumer. Gross domestic product rows six point three
Speaker 8: percent in nominal terms, that is, unadjusted for inflation last year,
Speaker 8: outpacing China is four point six percent gain. China has
Speaker 8: been struggling under the weight of a year's long real
Speaker 8: estate bust and its worst streak of deflation in some
Speaker 8: twenty five years. The economic outperformance is also reflected in
Speaker 8: the respective country stock markets. US shares have hit all
Speaker 8: time highs this week, while Chinese equities are mired in
Speaker 8: a six trillion dollar plus bear market route. Jeff Bullinger,
Speaker 8: Bloomberg Radio.
Speaker 2: Thank you, Jeff, And speaking of the economy, we will
Speaker 2: get a report this morning that is closely watched by
Speaker 2: the FED. The core PCE deflator, the Fed's preferred inflation measure,
Speaker 2: likely grew at a subdued pace in December. Economists are
Speaker 2: forecasting a gain of two tenths of a percent.
Speaker 9: Well.
Speaker 3: Treasury Secretary Janet Yellen is putting out some positive words
Speaker 3: about inflation, amy saying it is now well under control.
Speaker 10: We were through a period in which inflation was high,
Speaker 10: higher than we hid really seen since the late seven
Speaker 10: or early eighties, but it has come down quickly.
Speaker 3: Treasury Secretary Yelling ads Americans are also benefiting from wage
Speaker 3: growth that now exceeds inflation.
Speaker 2: On Capitol Hill, Senate Republican leaders are trying to salvage
Speaker 2: a deal on Ukraine aid and border security. GOP negotiators
Speaker 2: are concerned an impasse at the border would deny Ukraine
Speaker 2: the sixty one billion dollars in aid that it's seeking
Speaker 2: in its fight against Russia. Meanwhile, Texas is still putting
Speaker 2: up razor wire at the border, even after the Supreme
Speaker 2: Court and gave the Biden administration the go ahead to
Speaker 2: cut it down. Texas Governor Greg Abbott, we.
Speaker 11: Are going to make it impossible to enter Texas illegally,
Speaker 11: and that includes maintaining the National Garland border, building more
Speaker 11: border wall just like what President Trump put up, as
Speaker 11: well as extending the razor wire wall in the state
Speaker 11: of Texas.
Speaker 2: Governor Greg Abbott tells Bloomberg the state has a constitutional
Speaker 2: right to defend itself. You can hear more of our
Speaker 2: conversation with the Texas governor on the Bloomberg Talks podcast.
Speaker 3: And when it comes to those border togoas Amy, some
Speaker 3: senators are concerned Donald Trump is inserting himself into the process.
Speaker 3: Bloomberg zed Baxter has that part of the story.
Speaker 12: Mitt Romney says this cannot happen.
Speaker 9: Former President Trump is indicated to senators that he does
Speaker 9: not want us to sell the pumbit the border. He
Speaker 9: wants to lay the play of the border at Biden
Speaker 9: and the idea that someone running for president would say,
Speaker 9: please hurt the country so I can blame my opponent
Speaker 9: and help my politics is a shocking development.
Speaker 12: Now with Trump being perceived as the eventual GOP nominee,
Speaker 12: of the question is will he insert himself into every
Speaker 12: congressional battle Ed Baxter, Bloomberg Radio.
Speaker 8: Thank you, Ed.
Speaker 2: Closing arguments are set to begin later today in the
Speaker 2: defamation case against Donald Trump. They come after the former
Speaker 2: president left a Manhattan courtroom fuming after his three minute
Speaker 2: testimony gave him little time to refute writer's sexual abuse claims.
Speaker 2: Time now for a look at some of the other
Speaker 2: stories making news around the world, and for that we're
Speaker 2: joined by Bloomberg's John Tucker.
Speaker 6: Good morning John, Good morning Amy. A moratorium this morning
Speaker 6: from the White House, the Biden administration has halted the
Speaker 6: approval of new licenses to export liquefied natural gas. This
Speaker 6: gives the administration time to scrutinize how the shipments impact
Speaker 6: climate change. The administration's pause comes as environmentalists have seized
Speaker 6: on the projects as a litmus test to the President's
Speaker 6: climate change commitment. Overnight, the state of Alabama executed death
Speaker 6: row inmate Kenneth Smith, marking the first time in US
Speaker 6: history nitrogen gas was used to carry out capital punishment.
Speaker 6: The UN Human Rights Office called on Alabama to stop
Speaker 6: the execution, noting there's no scientific evidence to prove that
Speaker 6: execution by nitrogen inhalation will not cause grave suffering. General
Speaker 6: Motor is blaming poor leadership for mishandling its Cruise Robotaxi crisis.
Speaker 6: That story from Bloomberg's Charlie.
Speaker 13: It is an admission the company is hoping we'll get
Speaker 13: its cars back on the roads. A report by the
Speaker 13: law firm Quinn Immanuel, which was paid by Cruise, outlines
Speaker 13: how executives took an adversarial approach with regulators after one
Speaker 13: of its autonomous cars struck and seriously injured a woman.
Speaker 13: The incident led Cruise to halt its fleet nationwide, which
Speaker 13: undercuts GMCEO Mary Barra's vision to transform the carmaker from
Speaker 13: a twentieth century metal bender to a transportation company of
Speaker 13: the future. Charlie Pellett Bloomberg Radio.
Speaker 6: Attorney General Merrick Garland spoke at an event marking the
Speaker 6: start of a new foundation named at supporting mental health
Speaker 6: and wellness for law enforcement officers.
Speaker 14: Coverage through that program now extends to officers who are
Speaker 14: permanently and totally disabled due to certain mental health disorders,
Speaker 14: as well as to those who die by suicide as
Speaker 14: a result of exposure to traumatic events that they encounter
Speaker 14: while on duty.
Speaker 6: Howie Lebengood Foundation, named after a Capitol police officer who
Speaker 6: defended the building during the January sixth riot and done
Speaker 6: by suicide three days later. It flew seventy two times.
Speaker 6: It was only expended to fly five. NASA's Ingenuity Space
Speaker 6: helicopter was deployed to the surface of Mars in two
Speaker 6: thousand and one. NASA's now abounced the four pounds are
Speaker 6: of vehicle has flown its last mission. Global news twenty
Speaker 6: four hours a day, whenever you want it with Bloomberg
Speaker 6: News Now. I'm John Tucker. This is Bloomberg Amy.
Speaker 2: All right, Thank you, John, and we bring you news
Speaker 2: throughout the day here on Bloomberg Radio. But now you
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Speaker 2: You can listen and subscribe to Bloomberg News Now on
Speaker 2: the Bloomberg Business app, Bloomberg dot Com plus apples, Spotify,
Speaker 2: and anywhere else you get your podcasts. Time now for
Speaker 2: our Bloomberg Sports Update, and for that we bring in
Speaker 2: John Stashauer.
Speaker 15: Amy upset at the Australian Open, where Novak Djokovic is
Speaker 15: that ten times champion. He had won thirty three matches
Speaker 15: in a row. He was trounced by the fourth seed,
Speaker 15: Jannick Sinner, twenty two year old from Italy, who won
Speaker 15: sixty one, six, y two, six, seven, and then six
Speaker 15: to three. He's the youngest finalist at the Australian Open
Speaker 15: since Djokovic. In two thousand and eight, two NFL teams
Speaker 15: named new coaches, the LNF Falcons going with Raheem Morris,
Speaker 15: who had.
Speaker 8: Been the defensive cordator of the Rams.
Speaker 15: He actually was an Atlanta assistant from twenty fifteen to
Speaker 15: twenty and the Falcons interim head coach. He was also
Speaker 15: the coach of the Tampa Bay Bucks for three years.
Speaker 15: Carolina Panthers going with a relative unknown, Dave Kanalis, who
Speaker 15: had been coaching the offense at Tampa Bay.
Speaker 8: He's only forty two years old.
Speaker 15: He's spent thirteen years coaching with the Seahawks NBA blowout
Speaker 15: in New York, Nicks All over the defending champion Nuggets
Speaker 15: won twenty two to eighty four, far and away the
Speaker 15: Nuggets worst loss season Celtics with a blowout win that
Speaker 15: was in Miami won forty three to one ten seven
Speaker 15: Celtics and double figures. Warriors at home lost by a
Speaker 15: point to Sacramento won thirty four one thirty three. The
Speaker 15: ex Warrior Harrison Barnes the career high thirty nine points.
Speaker 15: Wizards lost at home to Utah once twenty three to
Speaker 15: one o eight. The Wizard's making a coaching change, moving
Speaker 15: west Untel junior to the front office. Ryan Keith, an
Speaker 15: assistant coach, takes over for the rest of the season.
Speaker 15: Bruins won in overtime at Ottawa three to two on
Speaker 15: a Brad Marshan goal. Edmonton shut out Chicago. The Oilers
Speaker 15: have won fifteen in a row. John Stashed. We're Bloomberg Sports.
Speaker 16: From coast to coast, from New York to San Francisco,
Speaker 16: Boston to Washington, DC, nationwide on sirisxam, the Bloomberg Business
Speaker 16: app in Bloomberg dot com. This is Bloomberg Daybreak.
Speaker 8: Good morning.
Speaker 3: I'm Nathan Hager. The frenzy around cutting edge technology and
Speaker 3: artificial intelligence may be leaving some big tech names behind.
Speaker 3: This morning, we're talking about Intel. It is tumbling in
Speaker 3: early trading after delivering a sales and profit forecast that
Speaker 3: came in well short of Wall Street expectations. For more
Speaker 3: on these earnings and the text story going forward, we're
Speaker 3: joined by Bloomberg's Pritty Gupta Critty. What's holding Intel back?
Speaker 17: A little bit of everything? And you know, this is
Speaker 17: so much pressure that Intel and Pad Gelsinger at the
Speaker 17: helm of it really has to live up to remember
Speaker 17: you for the last i want to say, two or
Speaker 17: three years, even in kind of the epitome of that
Speaker 17: chip gold that we had in twenty twenty one, where
Speaker 17: supply chain issues were really the focus. You had this
Speaker 17: major concern that Intel was not pulling its weight in
Speaker 17: terms of the chip sector, and Pad Gelsinger at the
Speaker 17: helmet it said, look, this is going to be our
Speaker 17: turnaround story. We are going to be the comeback kid
Speaker 17: of the chip sector. And that's exactly what's not happening.
Speaker 17: Let me walking through the numbers here, Nathan, because they're
Speaker 17: pretty substantial. It's their first quarter forecast that's really worrying
Speaker 17: a lot of people here. The revenue coming in about
Speaker 17: twelve point two billion to thirteen point two billion. That's
Speaker 17: the forecast for what this first quarter is supposed to
Speaker 17: look like for them. But the estimate, the Wall Street estimate,
Speaker 17: was fourteen point three billions, so they're almost missing that
Speaker 17: by somewhere between one to two billion dollars. That is
Speaker 17: a very big margin to be missing from. It also
Speaker 17: has to do a lot when it comes to their
Speaker 17: actual business model and the when we think of Intel,
Speaker 17: we kind of think of them as their old guard
Speaker 17: tech and instead they've actually been trying to compete with
Speaker 17: likes of Advanced micro Devices AMD or otherwise or Nvidia
Speaker 17: for example, that really been going headfirst into the AI sector.
Speaker 17: So Intel has been saying, look, traditionally we look at PCs,
Speaker 17: maybe we should be focusing and set on the data
Speaker 17: centers that are meant to power the AI story. And
Speaker 17: that's where they're saying that those that investment the sales
Speaker 17: there fell ten percent in the fourth quarter, So not
Speaker 17: only are they not growing, they're actually able to keep
Speaker 17: up the momentum that they currently have, they're actually contracting.
Speaker 17: So it's kind of a bag of negativity when it
Speaker 17: comes to the Intel story.
Speaker 3: So does this mean that the names that we've heard
Speaker 3: of elsewhere in Vidia, AMD, these names that have built
Speaker 3: so much excitement around the idea of artificial intelligence and
Speaker 3: gotten a lot of investors jazzed up. Are they just
Speaker 3: running away with this and Intel's getting left behind?
Speaker 17: Well, they've got a little bit of a different dynamic here.
Speaker 17: Vidia think about it as a much larger company that
Speaker 17: Intel is the same with advanced micro devices. AMD actually
Speaker 17: was one of the early players in terms of really
Speaker 17: solidifying that AI presence. Remember they actually partnered with meta
Speaker 17: platforms early on when Mark Zuckerberg's that he wanted to
Speaker 17: dive in to the metaverse, and AMD kind of glatched
Speaker 17: onto that. Story. Pad Gelsinger over at, Intel's dealing with
Speaker 17: a little bit of a different issue, and it really
Speaker 17: comes down to manufacturing capability. Remember, Intel was one of
Speaker 17: the chief names that President Joe Biden has really been
Speaker 17: focusing on when it comes to bringing some of the
Speaker 17: chip manufacturing capacity back onto US soil. What that does
Speaker 17: is make chips a little bit more expensive. It can
Speaker 17: also mean losing customers in the process. So what Intel
Speaker 17: has done is actually doubled down on their manufacturing operations
Speaker 17: really putting tens of billions of dollars into US factories
Speaker 17: as well, And that's something that some of their rivals
Speaker 17: aren't doing because they are still doing a lot of
Speaker 17: that production out of Taiwan, out of South Korea. Intel
Speaker 17: kind of changing the game on that front, and by
Speaker 17: the way, making investments that really only going to pay
Speaker 17: ten twenty years.
Speaker 2: Down the road.
Speaker 17: So they're dealing with a different set of issues. But
Speaker 17: net Nathan, you're right, they are falling behind.
Speaker 3: So what about that longer term outlook? When you see
Speaker 3: a short term outlook like this that so disappoints Wall Street,
Speaker 3: what does that mean for things when it comes to
Speaker 3: Pad Gelsinger's turnaround plans longer term?
Speaker 17: Well, look, he's still trying to enlist a lot of confidence.
Speaker 17: If you look at on the commentary that came out
Speaker 17: with this earning story, he is saying, look, this is
Speaker 17: a first quarter story only if you look at their projections,
Speaker 17: they are meant to kind of dip first and then recover.
Speaker 17: But the problem is, there is a credibility issue here,
Speaker 17: There's a believability issue here because Pat Gelsinger is also
Speaker 17: on this kind of campaign to re ensure a lot
Speaker 17: of investors and a lot of the folks that are
Speaker 17: investing Intel not to mention the American government that they
Speaker 17: can't actually pull the off. The problem here is just
Speaker 17: that that initial number, the margin is so low, or
Speaker 17: actually so large, that the drop in revenue is so
Speaker 17: low that you are starting to see real issues when
Speaker 17: it comes to Okay, well, not only are you going
Speaker 17: to make up the margin you're missing in the first quarter,
Speaker 17: but you also have to then grow by a substantial
Speaker 17: amount to catch up to your competitors. And that's really
Speaker 17: where they're facing a lot of the hurdles.
Speaker 3: So in our last thirty seconds, what could we see
Speaker 3: going forward from Intel, Well, if still.
Speaker 17: This campaign about believability, they basically have to prove that
Speaker 17: their way is the right way, that this comeback story
Speaker 17: is not over yet and they can't actually deliver on
Speaker 17: it at a time when the AI story and AI
Speaker 17: investment story is moving very very quickly, and it comes
Speaker 17: down to the fact of where do you want to
Speaker 17: put your weight behind the traditional PC business that has
Speaker 17: proved very lucrative or this kind of new fangled AI story.
Speaker 1: This is Bloomberg day Break today, your morning brief on
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