WEBVTT - Bloomberg Daybreak: October 27, 2022 - Hour 2 (Radio) 0:00:01.960 --> 0:00:04.720 Live from the Bloomberg Interact at Brooker Studios. This is 0:00:04.760 --> 0:00:08.800 Bloomberg day Break for Thursday, October twenty seven two. Coming 0:00:08.840 --> 0:00:11.960 up this hour, shares of Metap plunge on another big 0:00:12.000 --> 0:00:15.280 tech earnings disappointment. Apple and Amazon are up next. Set 0:00:15.360 --> 0:00:19.200 to report this afternoon. Credit Sweet sunveils a massive overhaul. 0:00:19.280 --> 0:00:22.079 We speak to the Bank CEO, and the European Central 0:00:22.079 --> 0:00:24.239 Bank is set to raise rates to the highest level 0:00:24.280 --> 0:00:27.320 in more than a decade. New Jersey Senator Menendez faces 0:00:27.320 --> 0:00:31.320 another federal investigation. Plus President Biden ones Russia any nuclear 0:00:31.360 --> 0:00:35.160 attack but being an incredibly serious mistake. I'm Michael bar More. Ahead, 0:00:35.159 --> 0:00:38.000 I've done Statshowering sports overtime at the Garden, the Nix 0:00:38.040 --> 0:00:41.120 speech Charlotte, the Nets lost in Milwaukee, the Islanders shut 0:00:41.120 --> 0:00:46.720 out the Rangers. That's all's training. Ahead on Bloomberg day 0:00:46.720 --> 0:00:50.959 Break on Bloomberg Elving Free on New York, Bloomberg nine one, 0:00:51.080 --> 0:00:55.040 Washington d C, Bloomberg one oh six one, Boston, Bloomberg 0:00:55.120 --> 0:00:59.200 nine sixties and Francisco Sirius x M one nineteen and 0:00:59.280 --> 0:01:02.080 around the world. Old on Bloomberg Radio dot Com and 0:01:02.200 --> 0:01:08.720 via the Bloomberg Business app. Good morning, I'm Nathan Hagar 0:01:09.080 --> 0:01:12.520 and I'm Karen Moscow. SMP future is little change this morning, 0:01:12.520 --> 0:01:14.880 while Nowsdack future is fall where coming up to six 0:01:14.880 --> 0:01:16.640 oh one on Wall Street. We check the markets every 0:01:16.640 --> 0:01:19.840 fifteen minutes throughout the trading day. On Bloomberg. Right now again, 0:01:20.000 --> 0:01:23.360 SMP futures are a little change down futures have one one, 0:01:23.600 --> 0:01:26.440 while Nastack futures are down fifty one. The decks in 0:01:26.480 --> 0:01:29.680 Germany's down about six tenths of uppercent ten year treasury 0:01:29.720 --> 0:01:32.760 down thirteen thirty seconds, yield four point oh five percent 0:01:32.800 --> 0:01:34.679 in the yield on the two year four point four 0:01:34.800 --> 0:01:37.840 three percent. Nathan, Karen, we begin with another tech earnings 0:01:37.840 --> 0:01:41.039 disappointment to day after Microsoft and Google shares plunge. We're 0:01:41.040 --> 0:01:45.200 watching shares of meta platforms faullent. This morning, the Facebook 0:01:45.200 --> 0:01:48.120 owner gave a revenue forecast on the low end of estimates. 0:01:48.280 --> 0:01:50.400 We get more from Bloomberg, said Ludlow in our nine 0:01:50.440 --> 0:01:53.320 sixty news room in San Francisco. What spooked investors, at 0:01:53.360 --> 0:01:56.640 least in the first instance, was the tepid forecast met 0:01:56.720 --> 0:01:59.160 a gay for sales in the current period. Revenue will 0:01:59.200 --> 0:02:02.600 be between ty and thirty two point five billion dollars 0:02:02.760 --> 0:02:06.600 in the final three months of this year, below street expectations. 0:02:06.600 --> 0:02:08.840 And the story is when we know the softening ad 0:02:08.840 --> 0:02:12.120 market is hurting Meta. We went into this knowing that 0:02:12.160 --> 0:02:14.240 would be the case, but as the cool started and 0:02:14.280 --> 0:02:17.720 went on, it became clear that actually what spooking investors 0:02:17.880 --> 0:02:21.679 is Meta and Zuckerberg's commitment to fuel and fund this 0:02:21.840 --> 0:02:25.560 transition to the metaverse. Zuckerberg said that actually, on a 0:02:25.639 --> 0:02:29.120 year on year basis, Meta reality labs would continue to 0:02:29.200 --> 0:02:33.239 have growing losses above lowth For Bloomberg News in San Francisco, 0:02:33.560 --> 0:02:36.640 great things and big keek Ernie's continue today. We have 0:02:36.680 --> 0:02:39.840 a pair of giants reporting this afternoon, and Bloomberg's Jeff 0:02:39.880 --> 0:02:43.400 Bellinger has more. Apple and Amazon are both scheduled to 0:02:43.440 --> 0:02:47.400 report after the market's closed today. Analysts went Bush Securities 0:02:47.480 --> 0:02:50.919 say higher iPhone prices and an improving supply chain may 0:02:50.919 --> 0:02:54.960 have helped Apple beat revenue forecast. The Ease Securities says 0:02:55.120 --> 0:02:59.160 Amazon likely posted faster revenue growth for online stores and 0:02:59.280 --> 0:03:03.280 third party solers, but both companies face headwinds. Ample is 0:03:03.320 --> 0:03:06.120 dealing with the stronger dollar and weakness in China, and 0:03:06.240 --> 0:03:09.560 a whole hume Second Prime Day event at Amazon suggested 0:03:09.639 --> 0:03:13.639 more spending is going offline. Jeff Belinger Bloom Bird Day 0:03:13.639 --> 0:03:17.000 break alright, Jeff, thanks back to the market now. Futures 0:03:17.040 --> 0:03:20.640 are mixed ahead of those earnings and despite disappointing results 0:03:20.639 --> 0:03:23.720 from Meta. Morgan Stanley's Mike Wilson is a well known 0:03:23.840 --> 0:03:27.119 stock market skeptic who correctly predicted this year's slump. Now 0:03:27.160 --> 0:03:29.880 he thinks the bear market in US equities could conclude 0:03:30.000 --> 0:03:32.760 sooner than any think. Ultimately, the bear market will be over, 0:03:32.840 --> 0:03:35.160 probably some time in the first quarter. Now, all this 0:03:35.440 --> 0:03:37.920 is you know, subject to revision, right, So I want 0:03:37.920 --> 0:03:40.080 to make it perfectly clear. If the market starts to 0:03:40.080 --> 0:03:43.240 trade off again and the SMP breaks down and blows 0:03:43.240 --> 0:03:45.840 through thirty six fifty on the down side, will be 0:03:45.840 --> 0:03:48.640 bears again. Morgan Stanley's Mike Wilson was ranked the number 0:03:48.640 --> 0:03:52.960 one portfolio strategist in the latest Institutional Investor survey. Well 0:03:53.000 --> 0:03:55.760 in Europe, nathan A Bank and turmoil is front and center. 0:03:55.800 --> 0:03:58.880 This morning. Shares our credit suites are down almost eleven 0:03:58.880 --> 0:04:02.240 percent after posting its fourth straight quarterly lost. The Swiss 0:04:02.280 --> 0:04:05.000 Bank is unveiling a massive turnaround plan which includes a 0:04:05.000 --> 0:04:07.720 four billion dollar capital raise, a curve out of its 0:04:07.720 --> 0:04:10.560 investment bank, and thousands of job cuts. It's the most 0:04:10.640 --> 0:04:13.760 urgent attempting yet to repair credit sweezed after huge losses 0:04:13.800 --> 0:04:17.560 and management chaos. We spoke this morning with CEO Alrick Kerner. 0:04:17.839 --> 0:04:20.039 What is the new Credits fiz. You know, it's a 0:04:20.120 --> 0:04:25.040 much simpler, more stable, much more focused bank going forward 0:04:25.720 --> 0:04:33.280 which will deliver sustainably profitable results to our shareholders. Credits Free. 0:04:33.279 --> 0:04:35.440 CEO Alreck Kerner may have a come as in an 0:04:35.440 --> 0:04:38.479 interview with Bloomberg's Francy Lagoise. Stay tuned for more in 0:04:38.520 --> 0:04:42.320 that conversation coming up shortly on Bloomberg daybreak. Staying in Europe, Karen, 0:04:42.400 --> 0:04:44.360 it is a big day for the European Central Bank. 0:04:44.400 --> 0:04:46.320 The e c V is expected to lift its main 0:04:46.360 --> 0:04:48.680 interest straight to the highest level in more than a decade. 0:04:48.960 --> 0:04:52.239 We get a preview from Bloomberg's leand Garns. A seventy 0:04:52.279 --> 0:04:55.960 five basis point hike is a consensus view for today's 0:04:56.000 --> 0:04:59.640 policy decision from the e c B. Anything else would 0:04:59.640 --> 0:05:02.920 be a big surprise, so looking past the recession fears 0:05:03.200 --> 0:05:07.280 to keep a targeting inflation. Less clear though, is whether 0:05:07.440 --> 0:05:11.440 we'll get any indications around a timeline for quantitative tightening 0:05:11.800 --> 0:05:15.880 and something investors are watching closely. Any moves to limit 0:05:15.920 --> 0:05:19.599 the gains banks on making from the ECB's crisis program 0:05:19.680 --> 0:05:23.920 of cheap loans in London. I'm Leanne Geron's Bloomboat Daybreak 0:05:24.160 --> 0:05:27.240 lean thanks Becker. In the US, economic growth isn't focused. 0:05:27.240 --> 0:05:30.440 The government issues data on third quarter GDP this morning 0:05:30.720 --> 0:05:33.360 forecast call for again at two point four percent, and 0:05:33.400 --> 0:05:37.039 Bloomberg's Vinydale Judais has more GDP posted back to back 0:05:37.080 --> 0:05:40.440 losses in the first and second quarters. Bloomberg Economics says 0:05:40.480 --> 0:05:43.919 the third quarters headline rebound may conceal trouble in the 0:05:44.040 --> 0:05:48.000 details such as sales and business inventorys. There are other 0:05:48.200 --> 0:05:51.839 U s data on tap today. Manufacturing data factory owners 0:05:51.880 --> 0:05:56.320 for durable goods may indicate moderation reflecting US inflation fears 0:05:56.360 --> 0:05:59.800 in the US labor market. Bloomberg Economics as weekly jobless 0:06:00.200 --> 0:06:04.560 will probably continue to cover around historic close the Bloomberg 0:06:04.600 --> 0:06:07.440 day Break. Okay, Vinny, thank you. Let's turn to geopolitics 0:06:07.440 --> 0:06:10.480 now and the potential setback for President Biden's economic pressure 0:06:10.480 --> 0:06:13.400 on Russia. The administration is now being forced to rework 0:06:13.440 --> 0:06:16.560 its plans for price caps on Russian oil, Bloomberg said, 0:06:16.600 --> 0:06:18.919 Baxter has the story. It looks like they're going to 0:06:19.000 --> 0:06:21.080 have to scale back their plans and light of the 0:06:21.120 --> 0:06:24.960 volatility in the markets. Instead of strangling the Kremlin's oil 0:06:25.040 --> 0:06:28.719 revenues by imposing a strict lid on prices, US and 0:06:28.920 --> 0:06:31.400 European Union are likely to have to settle for more 0:06:31.480 --> 0:06:34.640 loosely police cap at a higher price than once in vision. 0:06:35.160 --> 0:06:37.880 An earlier iteration of the plan had the cap and 0:06:37.880 --> 0:06:40.839 the range of forty to sixty dollars per barrel, but 0:06:40.920 --> 0:06:43.040 now it looks like it will have to be much higher. 0:06:43.440 --> 0:06:47.200 In San Francisco, I'm at Baxter Bloomberg Daybreak and thanks. Finally, 0:06:47.200 --> 0:06:49.880 the world's richest man is telling Twitter employees he does 0:06:49.920 --> 0:06:53.000 not plan to cut of staff. Bloomberg News has learned 0:06:53.000 --> 0:06:56.000 that Elon Musk denied those numbers and an address to 0:06:56.040 --> 0:06:59.440 workers at the company's San Francisco office. Still, the billionaires 0:06:59.440 --> 0:07:01.680 still expect you to cut some staff when he takes 0:07:01.720 --> 0:07:04.479 over the company. The four billion dollar deal is expected 0:07:04.520 --> 0:07:06.800 to close tomorrow. Yeah. Bloomberg day Break is brought to 0:07:06.839 --> 0:07:09.840 you by Sei, built on advanced technologies and fifty years 0:07:09.840 --> 0:07:13.400 of Innovation. SEI offers asset managers a comprehensive and flexible 0:07:13.400 --> 0:07:17.200 operations outsourcing platform. Go to se i C dot com 0:07:17.240 --> 0:07:24.560 slash managers. This is Bloomberg and it is now six 0:07:24.600 --> 0:07:27.000 oh seven on Wall Street. It's fifty seven degrees in 0:07:27.040 --> 0:07:30.000 Central Park. So got that overturn tractor trailer in Rockaway 0:07:30.000 --> 0:07:32.160 westbound Route eighty. We'll tell you more in traffic First, 0:07:32.240 --> 0:07:33.960 Michael Barr is here with what else is going on 0:07:34.000 --> 0:07:36.040 in New York and around the world. Michael, thank you 0:07:36.120 --> 0:07:39.920 very much. Nathan, New Jersey Democratic Senator Robert Menendez faces 0:07:39.960 --> 0:07:43.720 another federal investigation about five years after a trial on 0:07:43.840 --> 0:07:48.160 federal corruption charges ended in a mistrial. A Menendez advisor 0:07:48.240 --> 0:07:51.920 says Senator Menendez is aware of an investigation, However, he 0:07:52.040 --> 0:07:55.720 does not know the scope of the investigation. The probe 0:07:55.760 --> 0:07:59.040 is being conducted by federal prosecutors in the Southern District 0:07:59.040 --> 0:08:03.640 of New York. President Biden warned Russia's of Vladimir Putin 0:08:03.680 --> 0:08:06.200 that any use of a nuclear weapon would be an 0:08:06.280 --> 0:08:10.720 incredibly serious mistake. It comes as Russia says it carried 0:08:10.720 --> 0:08:16.760 out military exercises simulating a retaliatory nuclear strike. Meanwhile, former 0:08:16.880 --> 0:08:21.320 U s Special Representative for Ukraine negotiations and former ambassador 0:08:21.360 --> 0:08:25.520 to NATO Kurt Volker talked about Russia's claims without evidence 0:08:25.720 --> 0:08:29.800 that Kiev's forces intend to use a so called dirty bomb. 0:08:30.040 --> 0:08:32.680 But what Putin is doing is he is trying to 0:08:32.720 --> 0:08:35.960 get inside the heads of leaders in the West to 0:08:36.040 --> 0:08:38.959 make them feel that this is too dangerous and we 0:08:39.040 --> 0:08:42.240 have to tell the Ukrainians to surrender somehow, give up territory, 0:08:42.440 --> 0:08:46.720 you know, concede to putin something. Former NATO ambassador Kurt 0:08:46.760 --> 0:08:50.040 Volkers spoke on sound on which airs at five pm 0:08:50.080 --> 0:08:54.520 on Bloomberg. Iranian security forces opened fire on protesters in 0:08:54.559 --> 0:08:57.240 the past forty days. Thousands of people have taken to 0:08:57.440 --> 0:08:59.959 the streets to denounce the depth of a twenty two 0:09:00.040 --> 0:09:03.439 year old woman in custody of the country's morality police. 0:09:03.920 --> 0:09:07.760 She was accused of breaking iron strict dress code. State 0:09:07.800 --> 0:09:12.120 Department spokesperson Dant Patel reiterated u S efforts to support 0:09:12.160 --> 0:09:15.040 protesters in more than a hundred cities in Iran. The 0:09:15.080 --> 0:09:20.800 regime's ongowing violent crackdown, pervasive surveillance of citizens and disruption 0:09:20.960 --> 0:09:25.160 of communications are the latest reminder of the Islamic Republic's 0:09:25.400 --> 0:09:29.600 flavorance disregard for the fundamental freedoms and human rights of 0:09:29.640 --> 0:09:33.000 her audience. Spokesman Patel says Iran's leadership is facing a 0:09:33.040 --> 0:09:35.719 problem of its own making. With just weeks until the 0:09:35.760 --> 0:09:39.040 midterm elections, a second woman has come forward claiming that 0:09:39.080 --> 0:09:41.960 she got pregnant and then had an abortion paid for 0:09:42.120 --> 0:09:46.600 by Georgia GOP senate candidate Herschel Walker. Walker addressed Jane 0:09:46.640 --> 0:09:50.440 Doe's allegations during a campaign event, saying he is done 0:09:50.440 --> 0:09:54.440 with his foolishness and denied the allegations. Global News twenty 0:09:54.440 --> 0:09:57.360 four hours a day on air and on Bloomberg Quicktake, 0:09:57.600 --> 0:10:00.680 powered by more than seven under journalists analyst more than 0:10:01.120 --> 0:10:04.319 twenty countries. I'm Michael Barr and this is Bloomberg Nathan, 0:10:04.360 --> 0:10:10.959 Thanks Michael. Almost six ten on All Street Time with 0:10:10.960 --> 0:10:13.200 the Bloomberg Sports Update. Bryant you by tri stayed out. 0:10:13.200 --> 0:10:15.360 He with John Stah all right, Nathan and Knicks back 0:10:15.440 --> 0:10:17.840 this season with pretty much the same roster, with one 0:10:18.240 --> 0:10:21.120 exception the edition of Jalen Brunts in the new Knick 0:10:21.200 --> 0:10:24.000 point guard on display at the guard and twenty seven 0:10:24.000 --> 0:10:28.000 points third seen assists seven rebounds. Knick speech Charlotte one one, 0:10:28.080 --> 0:10:29.720 thirty one and overtime. They're up to a three and 0:10:29.760 --> 0:10:32.320 one start. Worth noting they began last season five and 0:10:32.400 --> 0:10:35.160 one and still ended up with down here missing the playoffs. 0:10:35.200 --> 0:10:37.640 And that's just one in three. Lost in Milwaukee one 0:10:37.720 --> 0:10:40.160 ten to ninety nine. Too much Jannis done to the 0:10:40.200 --> 0:10:43.600 compo forty three points. Kevin Duran had thirty three. Steve 0:10:43.679 --> 0:10:46.240 Nash got objected the first time his coaching career. Lebron 0:10:46.360 --> 0:10:48.800 James had not started the season oh and four since 0:10:48.920 --> 0:10:51.800 his rookie year in Cleveland twenty years ago. The Lakers 0:10:51.800 --> 0:10:54.960 are owing four. They lost in Denver. Rangers started three 0:10:54.960 --> 0:10:57.320 and one. They've lost their last four. They've score only 0:10:57.360 --> 0:10:59.880 five goals over those four games. Shut out at the 0:11:00.240 --> 0:11:03.360 ES Arena by the Islanders. Zelia Surokan, Kyle Palm Mary 0:11:03.440 --> 0:11:06.760 scored twice the Isles one three nothing. Week eight starts 0:11:06.800 --> 0:11:09.360 tonight at Tampa Bay, where Tom Brady the Bucks just 0:11:09.520 --> 0:11:12.520 three and four. They take on Baltimore Giants. Look for 0:11:12.600 --> 0:11:15.080 US seven and one start Sunday in Seattle. A lot 0:11:15.160 --> 0:11:18.960 of reasons for the Giants improvement, but one certainly Daniel Jones, 0:11:19.000 --> 0:11:21.079 having thrown only two in their steps. We're trying to 0:11:21.080 --> 0:11:22.920 make quicker decisions, trying to get the ball out my 0:11:22.960 --> 0:11:24.920 hands as as soon as possible. I don't think that's 0:11:24.920 --> 0:11:27.760 any different from things I've done in the past. I 0:11:27.760 --> 0:11:29.920 think you know, you're you're better at it every week 0:11:30.000 --> 0:11:31.840 and and I'm certainly better at it and I've been 0:11:32.440 --> 0:11:34.920 in the past. So uh, that's the goal for me, 0:11:35.040 --> 0:11:37.560 is that can continue to be quicker and and uh 0:11:37.679 --> 0:11:39.240 make the right decision get the ball in the hand. 0:11:39.320 --> 0:11:41.800 Jones was just named NFC Offensive Player of the Week. 0:11:41.880 --> 0:11:44.440 How Steinbrenner's first comment since the end of the season, 0:11:44.480 --> 0:11:46.760 the Yankees owner said he doesn't see the Yanks not 0:11:46.960 --> 0:11:51.640 keeping manager Aaron Boom John stas Sports Thanks john SMP 0:11:51.800 --> 0:11:54.160 futures up three point, staff features up a hundred nine, 0:11:54.200 --> 0:11:58.040 nastac features lower by forty three points. Meta platform shares 0:11:58.080 --> 0:12:01.160 down almost twenty points. We'll talk about the numbers with 0:12:01.280 --> 0:12:07.319 Alex Webb of Bloomberg. Quick Take. This is Bloomberg and 0:12:07.360 --> 0:12:09.480 the Bloomberg Sports Report was brought to you by Audie. 0:12:09.480 --> 0:12:11.600 Don't let someone else drive off in the autie model. 0:12:11.679 --> 0:12:14.040 You've always wanted to visit your local Tri state autie 0:12:14.040 --> 0:12:16.240 dealer to get behind the wheel of yours today, or 0:12:16.320 --> 0:12:23.400 visit autie Offers dot com for more information, markets, headlines 0:12:23.440 --> 0:12:26.400 and breaking news twenty four hours a day at Bloomberg 0:12:26.480 --> 0:12:29.880 dot com. The Bloomberg Business Outland at Bloomberg Quick Tape 0:12:30.559 --> 0:12:39.920 is a Bloomberg Business Flash and I'm Karen Moscow. NASDACK 0:12:40.000 --> 0:12:44.520 futures lower this morning as Meta Platforms drops almost twenty 0:12:44.600 --> 0:12:48.080 percent in early trading after reporting earnings. NASDAG futures are 0:12:48.120 --> 0:12:51.080 down forty two points s and P futures they're little changed. 0:12:51.440 --> 0:12:53.720 DAL future is up one six and the decks in 0:12:53.760 --> 0:12:57.000 Germany's down seven tenths of a percent. Ten year treasury 0:12:57.040 --> 0:12:59.880 down fourteen thirty seconds, held four point six percent yield 0:12:59.920 --> 0:13:01.800 up a two year four point for a three percent 0:13:02.240 --> 0:13:05.040 Nimex fruit oil is up a tenth of upper sent 0:13:05.120 --> 0:13:07.440 now of eighth cents at eighty seven dollars ninety nine cents, 0:13:07.480 --> 0:13:10.200 and Barrel Kovec called up two tenths per cent or 0:13:10.240 --> 0:13:13.080 three dollars at sixty and sixty six twenty announced and 0:13:13.160 --> 0:13:15.680 the euro is at one point zero zero four three 0:13:15.720 --> 0:13:18.520 against the dollar. That's a Bloomberg Business Flying show. Here's 0:13:18.559 --> 0:13:20.920 Michael Barr with more on what's going on around the world, 0:13:20.960 --> 0:13:24.120 Michael Karen, thank you very much. Russia carried out military 0:13:24.160 --> 0:13:29.280 exercises simulating a retaliatory nuclear strike, as President Joe Biden 0:13:29.280 --> 0:13:32.640 warned Vladimir Putin that any use of a nuclear weapon 0:13:32.679 --> 0:13:37.400 would be an incredibly serious mistake. Secretary of State Anthony 0:13:37.440 --> 0:13:41.000 Blincoln accused China of undermining the decades long status quo 0:13:41.520 --> 0:13:44.719 that has kept both nations from going to war over Taiwan, 0:13:45.200 --> 0:13:48.120 saying Beijing was trying to speed up at seizure of 0:13:48.160 --> 0:13:51.480 the island. A second woman has come forward claiming Georgia 0:13:51.600 --> 0:13:55.359 Senate candidate Herschel Walker paid for her to have an aborship. 0:13:55.640 --> 0:13:59.160 Walker denied the allegations, saying I am done with this foolishness. 0:13:59.520 --> 0:14:01.640 In the end, YEA the next one. In overtime over 0:14:01.679 --> 0:14:05.559 the Hornets on one, the Net's lost in hockey, The 0:14:05.600 --> 0:14:09.200 Islanders blanked Rangers. Three Zip Global News twenty four hours 0:14:09.200 --> 0:14:12.559 a day on air and on Bloomberg Quicktake, powered by 0:14:12.600 --> 0:14:16.760 more than under journalists and lest more than twenty countries. 0:14:17.200 --> 0:14:21.080 Michael Barr and this is Bloomberg. Thanks Michael. Six nineteen 0:14:21.160 --> 0:14:24.360 Now on Wall Street Live from the Bloomberg Interactive Brokers Studios. 0:14:24.400 --> 0:14:27.200 This is Bloomberg Daybreak as we continue to keep our 0:14:27.240 --> 0:14:30.880 focus on meta platforms. The latest big tech company to 0:14:30.960 --> 0:14:35.280 report earnings, and the shares this morning are down nearly twenty. 0:14:35.720 --> 0:14:39.800 It's a disappointing revenue forecast and the prospect for soaring 0:14:40.080 --> 0:14:44.760 costs as the CEO Mark Zuckerberg continues his pivot away 0:14:44.760 --> 0:14:48.720 from Facebook to the metaverse. Let's bring back Bloomberg Quick 0:14:48.760 --> 0:14:52.280 Take correspondent Alex Webb for more on this. And it 0:14:52.360 --> 0:14:56.480 really is a cost story, isn't it. Alex. Yes, we 0:14:56.560 --> 0:15:00.000 knew that the revenue was not was going to decline. 0:15:00.040 --> 0:15:03.760 It actually beat analyst expectations. The shock was really on 0:15:03.800 --> 0:15:07.040 the bottom line, where on most of the profit measures 0:15:06.880 --> 0:15:10.960 itself short of expectations, and that clearly reflects the the 0:15:11.040 --> 0:15:15.120 capital that Facebook is now spending on new products that is, 0:15:15.160 --> 0:15:18.520 of course metaverse hardware and software, but it's also like 0:15:18.600 --> 0:15:22.760 efforts defend off TikTok, which is, you know, tearing into 0:15:22.880 --> 0:15:27.600 its core market of uh online ads, particularly online ads 0:15:27.600 --> 0:15:31.200 that target that lucative eighteen to thirty five year old demographics. 0:15:31.720 --> 0:15:35.440 And we're seeing the difficulty that not just Facebook, but 0:15:35.720 --> 0:15:38.800 a lot of other social media companies are finding now 0:15:39.080 --> 0:15:43.160 getting that ad revenue in this difficult economic environment, and 0:15:43.320 --> 0:15:46.720 that's supposed to be the underpinning for Zuckerberg's plans to 0:15:46.840 --> 0:15:50.360 build out the metaverse. I mean, what's the challenge going forward? 0:15:51.560 --> 0:15:56.160 The challenging basis is using the capital to invest in 0:15:56.200 --> 0:15:59.800 something which he can convince investors is going to the 0:16:00.000 --> 0:16:04.200 live a growth ultimately and then really delivering that growth 0:16:05.360 --> 0:16:07.880 in order for the product to be appealing, and not 0:16:08.000 --> 0:16:10.640 only has to be good technologically, but it needs to 0:16:10.680 --> 0:16:12.680 be a platform. It needs to be a gateway into 0:16:12.720 --> 0:16:16.160 loads of other fun, interesting experiences, and those experiences only 0:16:16.200 --> 0:16:19.239 really come about if you've got a rich uh community 0:16:19.280 --> 0:16:23.200 of developers and companies building products for your platform. That's 0:16:23.200 --> 0:16:27.000 what Apple has um for um iOS, That's what Google 0:16:27.040 --> 0:16:30.560 has for Android, and Apple has been laying the groundwork 0:16:30.640 --> 0:16:34.320 for whatever it's augmented virtual reality product ends up looking 0:16:34.360 --> 0:16:37.480 like for several years, so maybe five or six years, 0:16:37.520 --> 0:16:41.040 where you can do augmented reality things on a fairly 0:16:41.120 --> 0:16:44.080 rudimentary level. You can do augmented reality things with your iPhone. 0:16:45.000 --> 0:16:47.760 The some of those products will then presumably be reported 0:16:47.800 --> 0:16:50.880 into that new product that Apple will envailed, perhaps as 0:16:50.920 --> 0:16:54.040 soon as next years. Facebook doesn't have those millions of developers. 0:16:54.360 --> 0:16:57.840 So even if It's products is blockbuster when you know, 0:16:58.120 --> 0:17:03.200 really matures, unless it has all of those opportunities within 0:17:03.240 --> 0:17:05.520 its platform, it'll struggle to compete. Well, if we do, 0:17:05.640 --> 0:17:08.480 I see Apple and more of a solid footing. Could 0:17:08.480 --> 0:17:11.440 that mode well for the earnings that Apple reports after 0:17:11.480 --> 0:17:16.480 the bell today? I think probably, given the cadence of 0:17:16.760 --> 0:17:19.600 negative news that we've had from earning seasons so far, 0:17:19.880 --> 0:17:24.040 expectations probably not all that high for Apple. We already 0:17:24.040 --> 0:17:27.080 have reporting from our colleagues Mark German and Debbie Woo 0:17:27.080 --> 0:17:30.439 about the number of iPhones they had planned to produce 0:17:30.480 --> 0:17:32.480 in this quarter that they and that some of those 0:17:32.480 --> 0:17:34.639 have maybe been tamped back a little bit already, so 0:17:34.880 --> 0:17:37.600 we have some signals about how well it's going to do. 0:17:38.440 --> 0:17:41.120 You know, Apple has managed to build a pretty resilient 0:17:41.200 --> 0:17:44.960 business by beefing up its services offering that includes things 0:17:44.960 --> 0:17:47.920 like iCloud, the app store, Apple Music, Apple TV, plus 0:17:47.920 --> 0:17:50.399 all those sort of products. And the net effect of 0:17:50.400 --> 0:17:53.040 those is that it blues people more tightly to their iPhones, 0:17:53.119 --> 0:17:56.159 and so it makes it way harder to say, actually, 0:17:56.160 --> 0:17:58.080 I'm going to scrap my iPhone and go to Android 0:17:58.080 --> 0:18:02.800 because you've invested so heavily in ecosystem and that means 0:18:02.840 --> 0:18:05.440 that even in these sort of climates where it can 0:18:05.440 --> 0:18:08.919 be harder to sell the products, Apple manages it to 0:18:09.040 --> 0:18:14.320 kind of do pretty well. So the optimism around Apple 0:18:14.400 --> 0:18:19.680 is perhaps a little bit brighter happening recent weeks. Yeah, 0:18:19.760 --> 0:18:21.679 we heard as well that Apple is going to be 0:18:21.760 --> 0:18:24.080 raising prices on some of those services that so many 0:18:24.080 --> 0:18:27.680 of those customers are glued to. We'll get those official numbers, 0:18:27.760 --> 0:18:30.959 as I say, after the bell later this afternoon. Alex 0:18:31.000 --> 0:18:33.720 Webb of Bloomberg Quicktake. As always, thanks for the double 0:18:33.800 --> 0:18:37.760 duty this morning on Bloomberg Daybreak and once again checking 0:18:37.800 --> 0:18:40.399 shares of meta platforms in the pre market. Karen, they 0:18:40.400 --> 0:18:43.479 are down nineteen and a half percent. Well, Nathan, it 0:18:43.560 --> 0:18:46.520 is on Wall Street and now we're going to bring 0:18:46.600 --> 0:18:50.159 you back to our interview with credits Sweet CEO Ulray Kerner, 0:18:50.520 --> 0:18:53.840 the banks unveiled a plan that includes a multibillion dollar 0:18:53.920 --> 0:18:57.280 capital raised, massive job cuts, had a carve out of 0:18:57.320 --> 0:19:00.840 the investment bag. CEO Ulrich kurr R talked about the 0:19:00.840 --> 0:19:03.840 three year restructuring plan with the Bloomberg's Francy in laqua. 0:19:04.800 --> 0:19:06.919 This is, as you say, a big day. We are 0:19:06.960 --> 0:19:08.720 all there, that we are there, it's a big day 0:19:08.760 --> 0:19:12.320 also for all our people when we're announcing now today 0:19:12.840 --> 0:19:15.120 what is basically new credits with and what is new 0:19:15.119 --> 0:19:19.520 credits wizz You know, it's a much simpler, more stable, 0:19:20.119 --> 0:19:25.600 much more focused bank going forward which will deliver sustainably 0:19:26.400 --> 0:19:31.320 profitable results to our shareholders. And what is very important 0:19:31.359 --> 0:19:34.520 if we'm at here, how we how we came here, 0:19:34.560 --> 0:19:37.399 so to say, we take a very hard look, you know, 0:19:37.480 --> 0:19:40.320 at the needs of our clients and designed everything around 0:19:40.359 --> 0:19:42.920 the needs of our clients. So what was your overarching theme? 0:19:42.960 --> 0:19:44.919 How did you come up with this plan? What was 0:19:44.960 --> 0:19:49.200 your reasoning and getting here? Many different reasons. I think 0:19:49.280 --> 0:19:53.040 the as I said, the bank is slightly too complicated 0:19:53.160 --> 0:19:57.080 it today the bank has parts which are not profitable enough, 0:19:57.280 --> 0:20:00.760 as we all know from the share the perspective, and 0:20:00.840 --> 0:20:04.240 that's why we came up with, you know, the need 0:20:04.320 --> 0:20:09.520 of taking very decisive affections in mainly three different areas. 0:20:10.320 --> 0:20:14.159 The one is radical restructuring off the investment bank. The 0:20:14.240 --> 0:20:18.159 second one is significant reducing costs going forward as you 0:20:18.240 --> 0:20:21.159 have seen, and the third one it is time for 0:20:21.240 --> 0:20:23.520 the five things that you need to notice start your day. 0:20:23.560 --> 0:20:27.800 Brought to you by Interactive Brokers ib Care. Event Trader 0:20:27.880 --> 0:20:31.040 offers a new way to trade futures. Use event contracts 0:20:31.080 --> 0:20:33.520 to trade your opinion on yes or no questions and 0:20:33.680 --> 0:20:37.200 key CME futures markets. Learn more at event trader dot 0:20:37.240 --> 0:20:42.520 Interactive Brokers dot com up first. Shares of Meta Platforms 0:20:42.560 --> 0:20:45.960 are down about nineteen and a half percent in early 0:20:46.000 --> 0:20:49.000 trading after the company gave a disappointing outlook. It also 0:20:49.040 --> 0:20:53.320 revealed ballooning costs to fund its virtual reality project, the Metaverse. 0:20:53.640 --> 0:20:57.240 CEO Mark Zuckerberg pleaded patients on a call with investors, 0:20:57.640 --> 0:20:59.359 I think we're going to resolve each of these things 0:20:59.400 --> 0:21:02.199 over a different parents of time, and I appreciate the 0:21:02.200 --> 0:21:04.480 patients and I think that those were patient and invest 0:21:04.520 --> 0:21:07.040 with us to end up being rewarded. Mark Zuckerberg says 0:21:07.080 --> 0:21:09.760 Meta's long term bets will pay off, but did not 0:21:09.920 --> 0:21:12.640 explain further ill Sticking with big tech, Karen, we get 0:21:12.640 --> 0:21:15.679 two massive earnings reports after the bell today when Apple 0:21:15.720 --> 0:21:19.400 and Amazon report. Looking at Twitter, Bloomberg News has learned 0:21:19.440 --> 0:21:22.879 Testas CEO Elon Moscow, set to take over the company tomorrow, 0:21:23.160 --> 0:21:26.320 told employees. He does not plan to cut seventy of them, 0:21:26.400 --> 0:21:29.720 as previously reported. Bloomberg's at Ludlow has more it didn't 0:21:29.800 --> 0:21:34.720 explicitly rule out layoffs. Generally speaking, Um, he walked in 0:21:34.920 --> 0:21:38.159 the Market Street office carrying a kitchen sinter there, and 0:21:38.240 --> 0:21:41.080 I think that the joke was, this is really happening. 0:21:41.320 --> 0:21:44.399 We should all let that same time, Bloomberg's aid Ludlow 0:21:44.440 --> 0:21:46.840 says Elon Musk will meet with staff tomorrow, when his 0:21:46.880 --> 0:21:49.640 forty four billion dollar deal to buy Twitter is set 0:21:49.640 --> 0:21:52.520 to close. Nathan turning to the markets this morning, US 0:21:52.600 --> 0:21:56.440 futures are mixed as earning season continues. Notorious bear Mike 0:21:56.480 --> 0:21:59.280 Wilson says his team at Morgan Stanley believes the downward 0:21:59.280 --> 0:22:02.800 trend in US equities may include soon. We're still bearish 0:22:02.800 --> 0:22:04.720 in the intermediate term. We don't think the bear markets over, 0:22:04.840 --> 0:22:06.520 but we do think this Tactico rally is going to 0:22:06.600 --> 0:22:08.439 be big enough to try and pivot and trade it. 0:22:09.359 --> 0:22:12.640 Morgan Stanley Chief equity strategist Mike Wilson says that outlook 0:22:12.680 --> 0:22:15.840 could still change. Traders will also be watching economic data today. 0:22:16.119 --> 0:22:17.960 We get are reading on third quarter US g d 0:22:18.080 --> 0:22:20.879 P at eight thirty am well straight time over in Europe, 0:22:20.920 --> 0:22:23.480 Karen banks are in focus, with Credit Suits down twelve 0:22:23.520 --> 0:22:26.600 percent after posting its fourth straight quarterly loss. The bank 0:22:26.640 --> 0:22:29.800 also unveiled a massive turnaround plan that includes a multibillion 0:22:29.800 --> 0:22:32.280 dollar capital raise, a carve out of its investment bank, 0:22:32.359 --> 0:22:35.760 and massive job cuts. CEO Rick Kerner spoke with us 0:22:35.800 --> 0:22:38.640 about the plans. We want to go through the transformation 0:22:38.720 --> 0:22:41.639