WEBVTT - Bloomberg Daybreak: October 26, 2022 - Hour 2 (Radio) 0:00:01.639 --> 0:00:05.200 By from the Bloomberg Interactive Brooker Studios is Bloomberg day 0:00:05.200 --> 0:00:09.799 Break for Wednesday, October two. Coming up this hour, NAZAC 0:00:09.840 --> 0:00:13.840 futures fall as big tech earnings disappoint Microsoft posts the 0:00:13.880 --> 0:00:17.880 weakest quarterly sales growth in five years. Alphabet's quarter spells 0:00:17.920 --> 0:00:21.400 trouble as profit and revenue miss estimates, and bank earnings 0:00:21.440 --> 0:00:24.479 continue in Europe as Deutsche Bank and Bark Laser Court. 0:00:24.720 --> 0:00:26.640 He was a big debate night in New York and 0:00:26.880 --> 0:00:30.960 several other states, plus President Biden discussed Ukraine and China 0:00:31.080 --> 0:00:33.840 in a congratulatory call to the ne UK Prime Minister 0:00:34.280 --> 0:00:37.280 Michael Barr. More ahead, I'm kind stattoward sports. The Rangers 0:00:37.280 --> 0:00:40.159 lofted that shoot out to Colorado Devils one in Detroit. 0:00:40.240 --> 0:00:45.720 The Nixon nets ap games tonight. That's all trendy head 0:00:45.760 --> 0:00:48.760 on Bloomberg day Break on Bloomberg He live in Freeo, 0:00:48.880 --> 0:00:53.280 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.360 --> 0:00:57.880 six one, Boston, Bloomberg nine sixties, San Francisco, Sirius x 0:00:58.040 --> 0:01:00.240 M one nine team and around the world Old on 0:01:00.400 --> 0:01:07.440 Bloomberg Radio dot Com and via The Bloomberg Business and 0:01:07.560 --> 0:01:10.760 good Morning, I'm Karin Moscow. I'm Nathan Haygar. Bloomberg day 0:01:10.760 --> 0:01:12.760 Break brought to you by b n y Melon's Pershing 0:01:12.840 --> 0:01:16.040 learned why the world's most sophisticated wealth management and institutional 0:01:16.080 --> 0:01:19.919 firms rely on Pershing to help them improve profitability, create efficiency, 0:01:19.959 --> 0:01:23.720 attract talent, and manage risk at Pershing, dot Com and 0:01:23.800 --> 0:01:26.720 futures are following this morning six oh one on Wall Street. 0:01:26.760 --> 0:01:29.080 We checked the markets every fifteen minutes throughout the trading 0:01:29.160 --> 0:01:31.480 day on Bloomberg. Right now, S and P futures are 0:01:31.520 --> 0:01:34.560 down thirty three points, now futures down eighty three and 0:01:34.720 --> 0:01:38.600 NASDACK futures falling down two hundred or one point seven percent. 0:01:38.880 --> 0:01:41.440 Ten year Treasury up ten thirties seconds, yield four point 0:01:41.640 --> 0:01:44.119 six percent. Yield on the two year four point four 0:01:44.160 --> 0:01:46.760 or four percent, Nathan Karen. The big drop at Nasdaq 0:01:46.840 --> 0:01:50.360 futures this morning follows disappointing earnings and forecasts from two 0:01:50.400 --> 0:01:53.600 tech giants, who begin with Microsoft. The shares are down 0:01:53.800 --> 0:01:56.760 six percent. Ed Ludlow has more on the results from 0:01:56.760 --> 0:02:00.080 our Bloomberg nine sixty newsroom in San Francisco. Microsoft it 0:02:00.240 --> 0:02:02.920 beat on both the top and bottom line, but recorded 0:02:02.960 --> 0:02:06.240 its slowest sales growth in five years. The stronger dollars 0:02:06.240 --> 0:02:09.400 certainly was a factor, along with a material slowdown, it 0:02:09.440 --> 0:02:13.120 seems in both corporate and consumer spending. What really spooke 0:02:13.200 --> 0:02:15.880 the market was commentary on the Earning School that the 0:02:15.919 --> 0:02:19.080 Asia Cloud unit would see its growth decelerate to the 0:02:19.160 --> 0:02:22.399 tune of five percentage points quarter on quarter going into 0:02:22.440 --> 0:02:25.399 the final three months of this year. The most significant 0:02:25.400 --> 0:02:28.560 reaction in after ours trading coming at that point at 0:02:28.600 --> 0:02:32.200 Lovelow for Bloomberg News in San Francisco, alreat thanks Well. 0:02:32.240 --> 0:02:35.000 Shares of Alphabet meantime or down about six point four 0:02:35.040 --> 0:02:38.079 percent in early training. The owner of Google, reported earnings 0:02:38.120 --> 0:02:42.240 and revenue that both missed analysts expectations. Bloomberg Intelligence Senior 0:02:42.280 --> 0:02:44.760 analyst man Deep Singh has more on the miss. The 0:02:44.800 --> 0:02:48.079 reason why you see a ten percentage point miss when 0:02:48.080 --> 0:02:51.959 it comes to operating income is because search underperformed. Every 0:02:52.000 --> 0:02:55.120 time search underperformance, Google has a bad quarter. And in 0:02:55.160 --> 0:02:57.880 this case you have to ask for yourself, is it temporary, 0:02:58.080 --> 0:03:01.040 is it what Snap was seeing around pricing, or is 0:03:01.080 --> 0:03:03.760 it more structural because you know there's a lot more 0:03:03.800 --> 0:03:07.600 competition from Amazon, from Walmart, from Target. These companies are 0:03:07.639 --> 0:03:11.160 all add numb groups now. Bloomberg Intelligence senior analyst Mundeep 0:03:11.200 --> 0:03:14.000 Singh says Google is now planning to slow hiring and 0:03:14.040 --> 0:03:16.959 control expenses, and had plenty of other earnings to catch 0:03:16.960 --> 0:03:19.400 you up on Karen. Shares of Texas Instruments are down 0:03:19.440 --> 0:03:23.280 down almost five percent. The chip makers quarterly forecast missed estimates. 0:03:23.480 --> 0:03:25.840 Shares a Visa are up about one percent. The digital 0:03:25.880 --> 0:03:29.760 payments company reported profit and revenue that beat, and Chipotle 0:03:29.919 --> 0:03:33.760 shares a little changed. Comparable sales and profit outpaced expectations. 0:03:34.040 --> 0:03:37.200 Well tech earnings continue today, Nathan, with both Metal Platforms 0:03:37.200 --> 0:03:40.560 and Twitter reporting meantime, Elon Musk's acquisition of Twitter is 0:03:40.600 --> 0:03:43.680 in focus. He's pledging to close the deal by this Friday, 0:03:43.680 --> 0:03:46.480 and we get more from Bloomberg's Doug Christner. The comments 0:03:46.480 --> 0:03:49.400 were made yesterday in the video conference call with bankers 0:03:49.400 --> 0:03:52.280 helping to fund the deal. They are providing thirteen billion 0:03:52.280 --> 0:03:55.600 dollars of debt financing, we are told Musk also promised 0:03:55.600 --> 0:03:58.200 to help the banks market the debt to money managers 0:03:58.360 --> 0:04:01.480 after the deal closes. Several banks have been left in 0:04:01.480 --> 0:04:05.280 alurch after Musk's sudden reversal on going through with buying 0:04:05.280 --> 0:04:08.840 Twitter in early October and now they're facing paper losses 0:04:08.880 --> 0:04:12.040 of roughly five hundred million dollars on the transaction. The 0:04:12.080 --> 0:04:14.640 pain would be realized once the debt is sold to 0:04:14.760 --> 0:04:18.440 institutional investors. In New York, I'm Doug Christener Bloomberg Daybreak, 0:04:18.480 --> 0:04:20.800 Thanks Doug wild Such stocks are falling this morning, the 0:04:20.839 --> 0:04:23.640 overall stock market may still not have hit bottom. That's 0:04:23.640 --> 0:04:26.880 according to Goldman Sachs. Strategists at the firm say equities 0:04:26.880 --> 0:04:29.000 don't fully reflect the latest dries and really yields and 0:04:29.040 --> 0:04:32.040 the odds of a recession in a severe economic downturn. 0:04:32.120 --> 0:04:34.680 Goldman's team says it expects the SMP five hundred to 0:04:34.720 --> 0:04:38.360 drop below That would be a twenty five percent fall 0:04:38.400 --> 0:04:41.719 from yesterday's close. Well, in Europe this morning, Nathan, banks 0:04:41.760 --> 0:04:44.680 are in focus once again as earning season rolls on, 0:04:44.720 --> 0:04:46.480 and we go to London and get the very latest 0:04:46.480 --> 0:04:49.640 with Bloomberg's un pot skod morning, un good morning, count 0:04:49.680 --> 0:04:52.880 and Nathan. A big morning for European bankcountings and beating 0:04:53.000 --> 0:04:56.840 estimates as interest rates Royce is the key theme. Italy's 0:04:56.880 --> 0:04:59.719 UNI credit has raised fully. Revenue and profit Tall gets 0:04:59.760 --> 0:05:03.640 full a second straight quarter. Deutsche bank sales and profits 0:05:03.680 --> 0:05:07.159 also beating, but analysts did flag higher than expected costs 0:05:07.360 --> 0:05:11.039 at Germany's biggest lender, and traders at London based Barclay's 0:05:11.080 --> 0:05:14.320 beating estimates are setting steep declines at the investment bank, 0:05:14.400 --> 0:05:17.400 with the economy keeping deals on the sidelines in London, 0:05:17.440 --> 0:05:19.760 I'm you in pots in Big Daybreak? Are you in thanks? 0:05:19.800 --> 0:05:22.479 Back here in the US, the focus is on politics. 0:05:22.520 --> 0:05:24.720 With less than two weeks before the midterm elections, the 0:05:24.760 --> 0:05:28.400 candidates for New York governors squared off last night. Bloomberg's 0:05:28.440 --> 0:05:30.200 Michael Barr joins US Live from New York with the 0:05:30.240 --> 0:05:34.200 highlights Michael Nathan. Crime and abortion took center stage last 0:05:34.279 --> 0:05:37.719 night as New York Governor Kathy Hokle faced a Republican challenger, 0:05:38.000 --> 0:05:42.839 Representatively Zelden in the campaign's only televised gubernatorial debate on 0:05:43.000 --> 0:05:46.159 Spectrum News New York One. Both candidates were asked to 0:05:46.600 --> 0:05:48.719 look ahead to the raise for the White House in 0:05:50.000 --> 0:05:53.039 do you want to see Joe Biden run for re election? Yes? 0:05:53.080 --> 0:05:55.680 I do. Do you want to see Donald Trump run 0:05:55.720 --> 0:05:59.120 for president? In Lee's Eldon not even thinking about it. 0:05:59.160 --> 0:06:01.680 I'm focused on the four team days from today, Hocal 0:06:01.760 --> 0:06:06.720 slam Zelden's past support for abortion restrictions. Zelden criticized Hocal's 0:06:06.720 --> 0:06:10.839 push to send millions of abortion providers to expand access 0:06:11.120 --> 0:06:14.760 for a predicted surge and out of state patients live 0:06:15.000 --> 0:06:18.080 in New York. Michael Barr Bloomberg Daybreak, Karen, all right, Michael, 0:06:18.120 --> 0:06:21.560 thank you about candidates for Pennsylvania governor also debated last night, 0:06:21.560 --> 0:06:24.760 and more on that coming up shortly. Inflation, meanwhile, is 0:06:24.800 --> 0:06:28.760 proving key in the midterm elections, including soaring housing costs. 0:06:28.839 --> 0:06:31.400 Renters are feeling the pinch in the country's biggest cities. 0:06:31.640 --> 0:06:34.560 New York City has the most expensive market in the country, 0:06:34.600 --> 0:06:37.920 according to rental listing company Zumper. The media and one 0:06:38.000 --> 0:06:40.640 bedroom apartment in New York runs more than thirty eight 0:06:40.680 --> 0:06:44.080 hundred dollars a month. Boston has this second highest rent 0:06:44.080 --> 0:06:47.000 it close to thirty one hundred dollars. In San Francisco's 0:06:47.040 --> 0:06:50.120 close behind it roughly three thousand. Well, Karen, you've heard 0:06:50.120 --> 0:06:53.200 about the great resignation after COVID. Now the next wave 0:06:53.240 --> 0:06:56.520 of workers leaving their jobs could be driven by abortion rights. 0:06:56.640 --> 0:07:00.680 According to a survey by the nonprofit Catalyst to employees 0:07:00.680 --> 0:07:03.279 are thinking of quitting because of their company's response to 0:07:03.320 --> 0:07:06.279 the Supreme Court decision to overturn Roe v. Wade. Forty 0:07:06.600 --> 0:07:09.600 percent say their employer isn't doing enough to protect abortion 0:07:09.720 --> 0:07:13.800 rightst think their company CEO should be more vocal on 0:07:13.840 --> 0:07:16.480 the issue. Straight ahead, your latest local headlines in the 0:07:16.560 --> 0:07:23.760 check of sports. This is Bloomberg and it's now six 0:07:23.800 --> 0:07:26.040 oh seven on Wall Street where at sixty four degrees 0:07:26.120 --> 0:07:28.360 in Central Park gotta crash on the way to JFK 0:07:28.520 --> 0:07:32.320 westbound belt park Way Age Springfield Boulevard. Michael bars back 0:07:32.520 --> 0:07:36.000 with the aforementioned details on the Pennsylvania governor's race and 0:07:36.040 --> 0:07:37.920 more on what's going on around the world. Michael, thank 0:07:37.960 --> 0:07:40.120 you very much, Nathan. And on top of New York, 0:07:40.160 --> 0:07:43.080 it was debate night and several other closely launched races. 0:07:43.440 --> 0:07:47.200 As you mentioned, Pennsylvania Democrat John Federman debated against the 0:07:47.240 --> 0:07:51.080 Republican Dr. Memonaz as they've I who are critical Senate seat. 0:07:51.440 --> 0:07:54.320 In the opening minutes of last night's debate, Federman addressed 0:07:54.320 --> 0:07:57.000 what he called the elephant in the room, the stroke 0:07:57.080 --> 0:07:59.800 he suffered five months ago. I have run the campaign 0:08:00.000 --> 0:08:03.320 and I've been very transparent about being very open about 0:08:03.360 --> 0:08:06.160 the fact, we're in US captioning, and I believe that. Again, 0:08:06.200 --> 0:08:08.760 my doctor is the real doctors that I believe, and 0:08:09.000 --> 0:08:11.720 they all believe that I'm ready to be served. As 0:08:11.760 --> 0:08:15.720 ignored his opponent's health challenges instead seizing on Fetterman support 0:08:15.800 --> 0:08:19.080 for President Joe Biden. On immigration and crossings at the 0:08:19.120 --> 0:08:22.320 southern U. S. Border, doctor said it's an issue that's 0:08:22.360 --> 0:08:25.200 personal to him. My father was an immigrant, my mother 0:08:25.200 --> 0:08:28.280 were immigrants. You know, I understand what legal immigration offers us, 0:08:28.320 --> 0:08:32.000 but the completely porous open nature of our border, which 0:08:32.040 --> 0:08:36.079 John Fetterman supports, has created a humanitarian crisis. The debate 0:08:36.160 --> 0:08:39.720 was held on News Nation. Meanwhile, the gubernatorial debate was 0:08:39.760 --> 0:08:43.720 held last night. In Michigan. Governor Gretchen Whitmer declared her 0:08:43.760 --> 0:08:47.000 position on abortion, saying she'll be voting yes on a 0:08:47.040 --> 0:08:51.200 ballot initiative to protect abortion rights. The simple truth is 0:08:51.280 --> 0:08:54.440 the way to protect women and ensure that future generations 0:08:54.440 --> 0:08:57.079 have the same rights we've had for forty nine years 0:08:57.240 --> 0:09:00.200 is by adopting Proposal three, and I will be a yes. 0:09:01.000 --> 0:09:05.440 Whitmer's Republican opponent, Tutor Dixon, argue that Michigan's Proposal three 0:09:05.520 --> 0:09:07.880 is nothing like the Roe v. Wade, Supreme Court decision 0:09:07.920 --> 0:09:11.199 that stood for nearly fifty years. When Governor Whitmer tells 0:09:11.240 --> 0:09:14.000 you that this is going to be Row, it's not 0:09:14.080 --> 0:09:17.920 even close to Row. It's not codifying Row in our constitution. 0:09:18.320 --> 0:09:20.520 But it would be the most radical abortion law in 0:09:20.559 --> 0:09:23.560 the entire country. The only place that has something similar 0:09:23.640 --> 0:09:25.960 or China and North Korea. The debate was aired on 0:09:26.160 --> 0:09:29.000 w x Y and z TV. New York City has 0:09:29.080 --> 0:09:32.160 been ordered to reinstate a group of sanitation workers fired 0:09:32.160 --> 0:09:34.840 for refusing to get a COVID nineteen vaccine after a 0:09:34.880 --> 0:09:38.200 state court judge ruled at the mandate was unlawful. The 0:09:38.240 --> 0:09:41.319 White House, as President Joe Biden, congratulated the new UK 0:09:41.440 --> 0:09:44.240 Prime Minister Rishi Sunac in a call in which they 0:09:44.280 --> 0:09:48.400 discussed the Russian invasion of Ukraine and challenges arising from China. 0:09:48.760 --> 0:09:51.360 Global News twenty four hours a day on air and 0:09:51.559 --> 0:09:54.920 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:09:54.960 --> 0:09:58.240 journalists and analysts more than one hundred twenty countries. Michael 0:09:58.240 --> 0:10:05.719 Barr and this is Bloomberg. Nathan, Thanks Michael, almost six 0:10:05.720 --> 0:10:07.720 cent on Wall Street time for the Bloomberg Sports Something 0:10:07.800 --> 0:10:09.480 for our TV. I try stayed out here. Here's John 0:10:09.559 --> 0:10:12.080 stash Our Nathan good one at the Garden Stanley Cup 0:10:12.160 --> 0:10:14.800 champion Colorado in to start a three game tour of 0:10:14.840 --> 0:10:17.200 the New York teams nineties shots on goal in this 0:10:17.240 --> 0:10:19.360 game Adam Fox score was six minutes left to tie 0:10:19.400 --> 0:10:21.880 the score. In the shoot at the Ads scored in 0:10:21.920 --> 0:10:23.599 the fourth round. They beat the Rangers three to to. 0:10:23.679 --> 0:10:27.160 The Colorado goalie was Alexander gorgiad beat his old team. 0:10:27.200 --> 0:10:30.080 The Ads visit the Devil's Friday. Devil's just won six 0:10:30.080 --> 0:10:32.360 two at Detroit. They've won four to last five, and 0:10:32.400 --> 0:10:35.560 then they Ads visit the Islanders on Saturday. The Rangers 0:10:35.679 --> 0:10:38.079 visit the Islanders tonight. Next are at the Garden Tonight 0:10:38.160 --> 0:10:40.680 place Charlotte. The next visit Milwaukee, who the best in 0:10:40.720 --> 0:10:43.640 the West met last night. Phoenix blew out Golden State 0:10:43.920 --> 0:10:46.560 by twenty nine. The Jets say Eli Jahmore will play 0:10:46.600 --> 0:10:49.800 Sunday against New England. Second year receiver upset with Black 0:10:49.880 --> 0:10:52.600 of playing time demanded a trade. Didn't play last Sunday 0:10:52.600 --> 0:10:56.400 the trade deadline Next Tuesday. Chatter five and two. Giants 0:10:56.400 --> 0:10:58.839 are six and one. Daniel Jones comes off a one 0:10:58.920 --> 0:11:01.880 hundred yard rushing game for coach Brian Daball. The dual 0:11:01.920 --> 0:11:05.240 threat quarterbacks as they say nowadays, um, you know, add 0:11:05.280 --> 0:11:09.200 another element to your offense because it's eleven and eleven football. 0:11:09.440 --> 0:11:12.959 When those guys can can carry the football or zone 0:11:13.000 --> 0:11:16.319 read it or do some different things. Um, so he 0:11:16.400 --> 0:11:19.160 has you know, he has ability to do those things. 0:11:19.200 --> 0:11:22.760 And Sunday is at Seattle. Seahawks also surprised either in 0:11:22.840 --> 0:11:26.280 sole possession of first in the NFC West. There quarterback 0:11:26.320 --> 0:11:29.280 now by Gino Smith, the ex Jet and Giant forty 0:11:29.320 --> 0:11:32.040 three old Skip Schumacher named new manage with Miami Marlins, 0:11:32.080 --> 0:11:34.520 replacing Don Madden Lee. He had the job for seven years. 0:11:34.480 --> 0:11:37.160 Schumacher most recently a coach in St. Louis. Louis Robos, 0:11:37.480 --> 0:11:39.920 the ex Met manager, current Yake third base coach, was 0:11:39.960 --> 0:11:44.520 a commendidate for the Marlins manager John Bloom. Big sports, 0:11:44.720 --> 0:11:47.720 all right, John, Thanks. Futures moving lower, SMP futures down 0:11:47.720 --> 0:11:50.200 thirty one points down, futures down seventy But the big 0:11:50.280 --> 0:11:53.000 dot drop is in the tech heavy Nasdaq futures down 0:11:53.040 --> 0:11:55.319 two or three points or one and three quarters per 0:11:55.320 --> 0:12:00.120 cent on disappointing earnings from Microsoft Alphabet and Texas Instruments. 0:12:00.520 --> 0:12:03.960 Dan Ives of web Bush Securities joins us. Next. This 0:12:04.120 --> 0:12:09.160 is Bloomberg. Bloomberg Sports is brought to you by Audie. 0:12:09.160 --> 0:12:11.160 Don't let someone else drive off in the autie model 0:12:11.200 --> 0:12:13.959 you've always wanted. Visit your local price state autie dealer 0:12:14.000 --> 0:12:16.319 to get behind the wheel of yours today, or visit 0:12:16.400 --> 0:12:23.640 Audie Offers dot com for more information, markets, headlines and 0:12:23.800 --> 0:12:27.040 breaking news twenty four hours a day, at Bloomberg dot Com, 0:12:27.160 --> 0:12:30.240 the Bloomberg Business app, and at Bloomberg Quick Tape. This 0:12:30.679 --> 0:12:39.280 is a Bloomberg Business Flash and I'm Karen moscown. This 0:12:39.400 --> 0:12:41.880 update brought to you by se I imagine your asset 0:12:41.960 --> 0:12:45.920 management firms operational infrastructure as a competitive advantage. Let see 0:12:45.920 --> 0:12:48.959 I show you how a sci dot com slash I 0:12:49.240 --> 0:12:52.440 m s us Talk index futures falling this morning as 0:12:52.520 --> 0:12:56.720 Megacap technology share slump in early trading. NASDACK futures down 0:12:56.760 --> 0:13:00.240 one point seven per cent after disappointing quarterly up days 0:13:00.280 --> 0:13:03.600 from Microsoft, Google parent, Alphabet and Texas Instruments, and looking 0:13:03.640 --> 0:13:07.080 at those shares this morning, Microsoft down five point nine percent, 0:13:07.160 --> 0:13:10.520 Alphabet is down six point two percent, and Texas instruments 0:13:10.600 --> 0:13:14.120 is down about five percent right now again. SMP futures 0:13:14.160 --> 0:13:17.000 are also lower, down thirty points now futures down fifty 0:13:17.080 --> 0:13:20.520 seven and NASDAG features down one ninety five. The decks 0:13:20.640 --> 0:13:23.200 in Germany's up half percent. The ten year treasury up 0:13:23.200 --> 0:13:26.000 seven thirty seconds yield four point oh seven percent, and 0:13:26.040 --> 0:13:27.839 they yield them a two year four point four or 0:13:27.880 --> 0:13:31.000 four percent. NIMEX screwed oil is up four tens percent 0:13:31.120 --> 0:13:33.080 or thirty five cents at eighty five dollar sixty six 0:13:33.120 --> 0:13:35.679 cents a barrel. Comes Gold up nine ten percent or 0:13:35.720 --> 0:13:38.880 fourteen dollars seventy cents at sixteen seventy two seventy an ounce. 0:13:39.280 --> 0:13:42.000 The euro one point zero zero one five against the dollar, 0:13:42.080 --> 0:13:44.520 British found one point one five five four, and the 0:13:44.679 --> 0:13:47.720 n one forty seven point three one. Bitcoin is up 0:13:47.760 --> 0:13:50.800 two percent at twenty thousand, five hundred ninety dollars. That's 0:13:50.840 --> 0:13:53.400 a Bloomberg business flash. Now here's Michael Barr with more 0:13:53.440 --> 0:13:55.880 on what's going on around the world. Michael, thank you 0:13:56.000 --> 0:13:59.880 very much. Daren Pennsylvania Democrat John Fetterman debating against Republican 0:14:00.000 --> 0:14:03.160 doctor mement Oz as they vie for a critical Senate 0:14:03.240 --> 0:14:06.800 seat sentiment who suffered a stroke and may spoke about abortion. 0:14:07.240 --> 0:14:09.680 If you believe that the choice of your reproductive freedom 0:14:09.800 --> 0:14:12.559 belongs with Dr Oz, then you have a choice. But 0:14:12.679 --> 0:14:16.240 if you believe that the choice for abortion belongs between 0:14:16.320 --> 0:14:19.760 you and your doctor, that's what I fight for. Ah 0:14:19.920 --> 0:14:23.360 said that he is against federal involvement in a woman's decision, 0:14:23.440 --> 0:14:27.440 but he supports what the states decide. I want women, doctors, 0:14:27.600 --> 0:14:31.160 local political leaders, letting the democracy that's always allowed our 0:14:31.240 --> 0:14:33.680 nation to thrive, to put the best ideas forward, so 0:14:33.800 --> 0:14:37.800 states can decide for themselves. Meanwhile, gubernatorial debates were held 0:14:37.880 --> 0:14:41.440 in New York and Michigan. In the NBA, the Wizards won, 0:14:41.560 --> 0:14:44.600 the Warriors lost. In the NHL, the Rangers lost the 0:14:44.680 --> 0:14:47.920 Devil's One along with the Bruins. Global News twenty four 0:14:48.000 --> 0:14:51.440 hours a day on air and on Bloomberg Quicktake, powered 0:14:51.480 --> 0:14:54.640 by more than journalists and analysts more than a hundred 0:14:54.640 --> 0:14:59.000 twenty countries. Michael Barr and this is Bloomberg, Nathan. Thanks Michael. 0:14:59.040 --> 0:15:01.240 We're coming up to six twenty on Wall Street Live 0:15:01.320 --> 0:15:05.120 from the Bloomberg Interactive Brokers Studios. This is Bloomberg Daybreak 0:15:05.160 --> 0:15:07.600 on a morning where tech shares are leading the broader 0:15:07.680 --> 0:15:11.720 market lower on a disappointing start to earning season. Microsoft 0:15:11.880 --> 0:15:15.680 and Google parent Alphabet are leading the way joining us now, 0:15:15.880 --> 0:15:19.120 Dan ives seen your equity research channelist at Wedbush Securities 0:15:19.160 --> 0:15:21.400 has been pretty bullish on the tech sector for quite 0:15:21.480 --> 0:15:23.880 some time. Dan, it's good to speak with you this morning, 0:15:23.920 --> 0:15:27.280 and I'm just getting through your note on Microsoft earning, 0:15:27.440 --> 0:15:31.720 saying that the quarter was roughly in line with a 0:15:31.800 --> 0:15:35.960 headline beat, respectable performance from the Azure cloud service, but 0:15:36.080 --> 0:15:39.240 the guidance was nothing to write home about. Give us 0:15:39.240 --> 0:15:42.600 a little more on your thoughts on Microsoft's earnings. Yeah, 0:15:42.680 --> 0:15:45.040 I think it's really about Godens. I mean, I think 0:15:45.200 --> 0:15:47.880 there's been worried the last few quarters that you're gonna 0:15:47.920 --> 0:15:51.160 see cracks in the armor and enterprise spending and the 0:15:51.280 --> 0:15:54.280 clock start midnight last night. I think the gate softer 0:15:54.440 --> 0:15:57.120 goidance is going to wear on the market as well 0:15:57.200 --> 0:15:59.360 as with what we saw from Alphabet, and you know, 0:15:59.480 --> 0:16:02.960 I think's really what's the start of this economic slowdown 0:16:03.040 --> 0:16:07.040 impact in Microsoft? And yet you're still keeping an outperform 0:16:07.600 --> 0:16:12.280 on Microsoft stock going forward, keeping your price target. Why. Yeah, 0:16:12.440 --> 0:16:16.280 So I view this as really a rough patch that 0:16:16.440 --> 0:16:20.000 they're ultimately just ripped a band aid off. They reset expectations. 0:16:20.640 --> 0:16:22.880 I think if you look at cloud, that continues to 0:16:22.960 --> 0:16:25.320 be the core growth driver that's just going to get 0:16:25.400 --> 0:16:28.200 them through the storm. And I just view this more 0:16:28.520 --> 0:16:31.400 this was a time where PC continues to be an 0:16:31.440 --> 0:16:35.120 overhang from Microsoft. They'll get through this with Cloud. I 0:16:35.280 --> 0:16:37.840 viewed as probably an overreaction terms of what the stock 0:16:37.960 --> 0:16:41.880 is today. How do you see Microsoft getting through this storm? 0:16:41.920 --> 0:16:44.920 There's a lot of debate about how long this storm 0:16:45.040 --> 0:16:47.720 could last. Do you think it lasts long? And how 0:16:47.760 --> 0:16:50.800 does Microsoft get through it? Well, I think they're going 0:16:50.880 --> 0:16:53.720 to be able to get through it, probably better than 0:16:53.760 --> 0:16:58.000 any other tech company because today less than enterprise are 0:16:58.040 --> 0:17:00.840 on cloud, so it was more hip to cloud. That's 0:17:00.880 --> 0:17:04.040 going to be an accelerant from Microsoft. More that business 0:17:04.160 --> 0:17:06.760 is going to be cloud and services. But right now 0:17:06.880 --> 0:17:09.639 in PC, it's going through what I'd say is probably 0:17:09.640 --> 0:17:12.840 a forty year type of decline in terms of PC market. 0:17:12.960 --> 0:17:16.240 That's a dark cloud and the stock ultimately gets rerated 0:17:16.320 --> 0:17:19.960 more in cloud. That's why you own Microsoft as a 0:17:20.119 --> 0:17:23.560 Rocket Gibraltar stock through the store. Does it get more 0:17:23.640 --> 0:17:28.520 difficult to maintain demand in the cloud when we have 0:17:28.840 --> 0:17:32.320 these kinds of headwinds from a strong dollar and from 0:17:32.480 --> 0:17:35.480 the fact that the way the economy is going right now, 0:17:36.280 --> 0:17:39.760 there might be a little bit less demand for cloud 0:17:39.840 --> 0:17:43.520 services because of just the way things cost right now. 0:17:44.760 --> 0:17:49.280 Look FX, that's about a five hundred bit headwinds from Microsoft, 0:17:49.359 --> 0:17:51.720 and you'll see the same thing from Apple air this weekend. 0:17:51.840 --> 0:17:56.840 Another big text ords strong dollars, huge headwinds. Now, I 0:17:56.920 --> 0:17:59.200 think on the other side of that that will start 0:17:59.240 --> 0:18:02.240 to actually be easier compared is going into next year. 0:18:03.080 --> 0:18:07.200 But look, enterprises, they cannot not go to the cloud, 0:18:07.480 --> 0:18:10.520 and that's why in terms of from an I T perspective, 0:18:10.600 --> 0:18:13.400 they are top top of the priority with I think 0:18:13.440 --> 0:18:15.399 they ripped a band aid off. I think now they 0:18:15.480 --> 0:18:18.639 reach that expectations, stock will get hit. But I do 0:18:18.840 --> 0:18:22.200 this more of a bottoming process from Microsoft right in 0:18:22.320 --> 0:18:24.800 the start of just a multi quarter type of guy 0:18:24.840 --> 0:18:28.520 ince production. So you think Microsoft is better position than 0:18:28.960 --> 0:18:33.480 an Amazon Web Services or a Google cloud product that 0:18:34.000 --> 0:18:37.200 has a lot of market share compared to Microsoft, Yeah, 0:18:37.200 --> 0:18:39.440 I think all those companies and you saw it with 0:18:39.600 --> 0:18:42.159 Google in terms of cloud being strong. Of course a 0:18:42.440 --> 0:18:45.880 WUS they continue to eat the markets. Those are all 0:18:46.040 --> 0:18:48.600 going to beat benefits and rising todd is gonna lift 0:18:48.640 --> 0:18:51.040 all boats in terms of cloud. I think in terms 0:18:51.080 --> 0:18:55.119 of the stocks is that Microsoft is a pure play cloud. 0:18:55.800 --> 0:18:59.440 Amazon it's still that e commerce that that's still the majority, 0:18:59.480 --> 0:19:02.640 and of Google Google Google clouds to a smaller piece. 0:19:02.720 --> 0:19:05.080 That's why what I like about Microsoft, it's plane that 0:19:05.200 --> 0:19:08.040 pure play cloud, you know, as opposed some of the 0:19:08.160 --> 0:19:12.960 consumer areas which obviously digital advertisingly in their media pressure. Okay, 0:19:13.000 --> 0:19:15.080 so just about thirty seconds left here. How does this 0:19:15.160 --> 0:19:17.160 set us up for the rest of earning season? We've 0:19:17.160 --> 0:19:21.080 got meta reporting later on this afternoon book. I think 0:19:21.160 --> 0:19:23.800 met or could be a mini disaster, you know, just 0:19:23.920 --> 0:19:26.919 giving what we're seeing on digital advertising as well as 0:19:26.960 --> 0:19:29.480 the business transition that stock would get hid into it. 0:19:29.560 --> 0:19:32.760 I'm not expecting really good news there. I think you'll 0:19:32.760 --> 0:19:36.359 start to see positives when it comes to Apple Amazon 0:19:36.560 --> 0:19:40.000 on the WUS piece book at This is a it's 0:19:40.040 --> 0:19:43.359 a defining time for tech and that's the key right 0:19:43.400 --> 0:19:46.440 now in terms of what we saw as always Dan, 0:19:46.560 --> 0:19:49.760 great to get your thoughts, Dan Ives, senior equity research 0:19:49.800 --> 0:19:54.360 analysts at wed Bush Securities. Right now, alphabet shares down 0:19:54.480 --> 0:19:59.160 six percent, Microsoft down more than six percent NAZAC futures 0:19:59.200 --> 0:20:02.040 as a whole down two points, a drop of one 0:20:02.119 --> 0:20:08.320 point seven percent. This is Bloomberg Bloomberg eleven three oh 0:20:08.359 --> 0:20:12.359 weather cloudy today, scattered showers, possible hides in the upper sixties, Sunshine, 0:20:12.480 --> 0:20:15.280 upper sixties. Tomorrow It's gonna be mostly sunny with a 0:20:15.359 --> 0:20:18.560 high only near sixty on Friday. Sixty four is the 0:20:18.600 --> 0:20:25.840 current temperature. Broadcasting live from the Bloomberg Interactive Broker Studio 0:20:25.960 --> 0:20:29.159 in New York, Bloomberg E Living free to Washington, d C, 0:20:29.320 --> 0:20:33.000 Bloomberg nine nine one to Boston, Bloomberg one six one 0:20:33.160 --> 0:20:36.600 to San Francisco, Bloomberg Home sixty to the Country, Sirius 0:20:36.760 --> 0:20:39.320 XM to the one nineteen and around the globe, the 0:20:39.359 --> 0:20:43.240 Bloomberg Business app and Bloomberg Radio dot Com. This is 0:20:43.280 --> 0:20:51.520 Bloomberg Daybreak. It's six thirty on Wall Street of morning 0:20:51.560 --> 0:20:54.159 of Nathan Hagar and I'm teren Moscow. We are just 0:20:54.240 --> 0:20:56.679 about three hours away from the open of US trading. 0:20:56.800 --> 0:20:58.760 Time for the five things you need to notice start 0:20:58.800 --> 0:21:02.520 your day. Brought to you by Interacted Brokers. Interacted broker's 0:21:02.560 --> 0:21:04.560 clients are an interest of up to two point five 0:21:04.600 --> 0:21:07.120 eight percent on the idle cash and their brokerage accounts. 0:21:07.400 --> 0:21:09.879 Visit i dk R dot com slash interest rates to 0:21:09.960 --> 0:21:13.520 learn more. Up First US futures are lower this morning 0:21:13.560 --> 0:21:17.560 after earning sir Microsoft and Alphabet despite beating projections. Shares 0:21:17.600 --> 0:21:21.280 of Microsoft are down six point three percent in early 0:21:21.400 --> 0:21:24.480 trading after the strong dollars slowed revenue growth. Shares of 0:21:24.520 --> 0:21:28.000 Alphabet are down more than six percent after sales miss 0:21:28.080 --> 0:21:32.160 analyst estimates. Bloomberg Intelligence senior analyst man Deep Sing says 0:21:32.160 --> 0:21:36.119 Alphabet and Google are facing a fundamental problem. Search is 0:21:36.400 --> 0:21:39.480 the main business and that is what drives margins. The 0:21:39.600 --> 0:21:43.159 question is is searched saturated? Probably yes, because there's a 0:21:43.280 --> 0:21:46.080 lot of direct traffic going to these mobile apps, you know, 0:21:46.200 --> 0:21:48.639 the companies that I talked about. On the retail side, 0:21:48.840 --> 0:21:51.280 you don't need Search. You start off your search on 0:21:51.359 --> 0:21:55.480 Walmart or Target or Amazon. And Bloomberg Intelligence analyst Mandeep 0:21:55.520 --> 0:21:58.240 Sing says Google is now planning to slow hiring and 0:21:58.440 --> 0:22:02.080 control expenses. Watching shares of Texas Instruments care and they're 0:22:02.119 --> 0:22:05.399 down nearly five percent. The ship maker's forecast missed estimates, 0:22:05.440 --> 0:22:08.920 signaling a broader slowdown in the semiconductor industry. So far 0:22:09.040 --> 0:22:11.680 head of Investment Strategy, Liz Young says, the outlook for 0:22:11.760 --> 0:22:14.440 tech stocks may now be uncertain. We're sitting at a 0:22:14.520 --> 0:22:16.440