WEBVTT - Bloomberg Daybreak: April 29, 2022 - Hour 1 (Radio) 0:00:02.360 --> 0:00:05.160 Live from the Bloomberg and Directed Brookers Studios. This is 0:00:05.160 --> 0:00:09.480 Bloomberg Daybreak for Friday, April two. Coming up this hour. 0:00:09.760 --> 0:00:12.879 Apple has a record quarter, but the forecast sends the 0:00:12.880 --> 0:00:16.000 stock lower. Amazon share slide is a company coast a 0:00:16.079 --> 0:00:19.880 loss on higher costs. Elon Musk unloads Tesla shares to 0:00:19.920 --> 0:00:22.840 help pay for his takeover of Twitter, and Russian missiles 0:00:22.840 --> 0:00:26.520 strike Ukraine's capital kievs New York City. De Lay's pain 0:00:26.680 --> 0:00:29.280 rules that are meant to close the gender gap. Plus 0:00:29.480 --> 0:00:32.360 the days of flavored cigarettes and cigars may be numbered. 0:00:32.600 --> 0:00:35.360 I'm Michael barr more a hand. I'm John Dash Hour 0:00:35.360 --> 0:00:37.680 and sports. The Jets and Giants with two top ten 0:00:37.800 --> 0:00:41.159 draft picks. Both went defense, then offfense the Yankees when 0:00:41.159 --> 0:00:45.879 there's sixth in their own that's all trendy. Head on 0:00:45.960 --> 0:00:50.080 Bloomberg Daybreak on Bloomberg Eliving Free on New York, Bloomberg 0:00:50.200 --> 0:00:54.200 nine one, Washington d C, Bloomberg one oh six one, Boston, 0:00:54.480 --> 0:00:58.920 Bloomberg nine sixties and Francisco Sirius XAM one nine Team 0:00:59.120 --> 0:01:01.920 and around the World Old on Bloomberg Radio dot Com 0:01:02.000 --> 0:01:08.840 and via the Bloomberg Business App. Good Friday Morning, I'm 0:01:08.920 --> 0:01:12.360 Nathan Hagar and I'm Karen Moscow. US DOT Index futures 0:01:12.400 --> 0:01:14.800 are lower this morning. We're coming up to five oh 0:01:14.800 --> 0:01:16.680 one on Wall Street, and we check the markets every 0:01:16.680 --> 0:01:20.440 fifteen minutes throughout the trading day. On Bloomberg, SNP futures 0:01:20.440 --> 0:01:23.400 down twenty three points this morning, Down futures downs eighty 0:01:23.680 --> 0:01:26.759 and NASDAD futures down one twelve. The ten year treasury 0:01:26.760 --> 0:01:29.480 down six thirty seconds. He had two point eight four percent, 0:01:29.840 --> 0:01:31.880 and they yield on the two year two point six 0:01:31.880 --> 0:01:36.320 four percent, and NIMEX screwed oil is up eight ten percent. Nathan, Karen, 0:01:36.360 --> 0:01:38.880 we begin this morning with market reaction to the latest 0:01:39.000 --> 0:01:42.119 slew of earnings. Apple shares are down more than two 0:01:42.120 --> 0:01:46.080 percent in early trading, records setting earnings are being overshadowed 0:01:46.160 --> 0:01:49.920 by the iphonemaker's forecast. Apple predicts supply constraints will cost 0:01:49.960 --> 0:01:52.880 four to eight billion dollars in revenue during the current quarter. 0:01:53.240 --> 0:01:56.360 CEO Tim Cook addressed the issue on the company's conference call. 0:01:56.880 --> 0:02:00.280 I want to acknowledge the challenges we're seeing from apply 0:02:00.400 --> 0:02:04.400 chain disruptions driven by both COVID and silicon shortages, to 0:02:04.520 --> 0:02:08.440 the devastation from the war in Ukraine. We are not 0:02:08.560 --> 0:02:12.840 immune to these challenges. Apple CEO Tim Cooke also announced 0:02:12.919 --> 0:02:16.600 ninety billion dollars in new stock buybacks. Well Shares of 0:02:16.680 --> 0:02:19.200 Amazon are down eight and a half percent this morning. 0:02:19.280 --> 0:02:22.440 Nathan the Eight Commerce Giants says it lost money during 0:02:22.440 --> 0:02:24.600 the first quarter and may see another loss in the 0:02:24.600 --> 0:02:28.799 current period. Amazon's clown Services division a w S continue 0:02:28.840 --> 0:02:31.959 to impress, but a hiring and warehouse building binge during 0:02:31.960 --> 0:02:35.040 the pandemic weight on the bottom line. Punham Goyle covers 0:02:35.040 --> 0:02:39.360 Amazon for Bloomberg Intelligence. For a long time, a WS 0:02:39.440 --> 0:02:44.600 has been able to offset the weaker retail business, but 0:02:44.800 --> 0:02:48.480 it's not enough. With growth slowing on the top line 0:02:48.919 --> 0:02:53.280 across the online business ACROST, the rising just too fast 0:02:53.520 --> 0:02:57.760 for them to herb those higher costs. Bloomberg Intelligence analysts 0:02:57.760 --> 0:03:00.200 Punham Goyle says, for the first time ever, US on 0:03:00.280 --> 0:03:03.160 recording back to back quarters of less than ten percent 0:03:03.280 --> 0:03:05.799 revenue growth. Let's check out some other stocks on the 0:03:05.840 --> 0:03:08.880 move this morning. Karen shares of Inteller down three percent. 0:03:09.000 --> 0:03:13.000 The chipmaker gave disappointing sales and profit forecasts, indicating weaker demand, 0:03:13.360 --> 0:03:16.720 and robin Hood shares are down nearly eleven percent. The 0:03:16.760 --> 0:03:21.400 financial upstart says first quarter revenue tumbled. We wrap up 0:03:21.400 --> 0:03:23.840 a busy week for earnings with big oil and focus. 0:03:24.000 --> 0:03:26.840 Nathan x on Mobile reports this morning a preview from 0:03:26.840 --> 0:03:31.000 Bloomberg's Tom Busby. After Russia's invasion of Ukraine sent crude 0:03:31.000 --> 0:03:34.200 prices surging over the past two months along with global demand, 0:03:34.480 --> 0:03:37.840 It's boom times right now for the nation's biggest oil producers, 0:03:37.840 --> 0:03:40.680 and because of that, x on Mobile is expected to 0:03:40.720 --> 0:03:44.000 post its biggest quarterly profit in more than a decade. 0:03:44.640 --> 0:03:47.680 Investors will be looking for guidance on increased crewde production 0:03:47.720 --> 0:03:51.080 and possibly more shared by backs and higher dividends. I'm 0:03:51.120 --> 0:03:54.440 Tom Busby, Bloomberg Daybreak. All right, Tom, thank you. Earning 0:03:54.520 --> 0:03:57.280 so far have not turned around market sentiment. In fact, 0:03:57.280 --> 0:03:59.920 the SMP five enters the final trading day of AP 0:04:00.200 --> 0:04:03.600 on track for the worst month since the pandemic bear market. 0:04:03.720 --> 0:04:06.880 More from Bloomberg's Charlie Pellett. The SMP is showing a 0:04:06.960 --> 0:04:11.080 month to day loss of five point four percent. By comparison, 0:04:11.160 --> 0:04:14.320 this month, Nasdaq is down nine and a half percent, 0:04:14.600 --> 0:04:18.320 while the Dow is down two point two percent. Volatility 0:04:18.480 --> 0:04:21.800 has been eight persistent feature in markets all year, with 0:04:21.880 --> 0:04:26.600 investors on edge over China's struggle to suppress COVID, Russia's 0:04:26.600 --> 0:04:30.200 war in Ukraine, and warries that central bank tightening may 0:04:30.279 --> 0:04:34.359 tip the US economy into a recession. In New York, 0:04:34.440 --> 0:04:38.039 Charlie Pellett Bloomberg Daybreak, Right, turnly, thank you Well. In Asia, 0:04:38.080 --> 0:04:41.520 it's a different story for stocks today. Chinese technology shares 0:04:41.680 --> 0:04:44.880 jumped after new policy promises from the country's top leaders 0:04:44.880 --> 0:04:47.880 to bolster the economy. And Marcus. Let's get the recap 0:04:47.880 --> 0:04:51.480 from Bloomberg's Juliette Sally in Singapore. Good morning, Juliette, Good 0:04:51.480 --> 0:04:54.080 morning Karen. The MCI Asia Pacific Index rose for a 0:04:54.160 --> 0:04:56.320 third time this week, with ten Cent and Ali Barbara 0:04:56.360 --> 0:04:58.680 among the biggest gain is the Hank Sang Take Index, 0:04:58.680 --> 0:05:01.760 sort more than ten percent and rebounding from earlier losses 0:05:02.040 --> 0:05:05.200 as the country bound to support healthy growth of platform companies. 0:05:05.440 --> 0:05:08.640 Shortly before the measures were unveiled, Chinese tex Stalks reversed 0:05:08.680 --> 0:05:12.240 earlier losses, has tried has speculated about a possible relaxation 0:05:12.279 --> 0:05:15.760 of the yearlong regulatory clampdown, and China's You unstrengthened a 0:05:15.800 --> 0:05:18.039 little during the day's trade, but is poised for a 0:05:18.080 --> 0:05:21.760 record monthly drop as the economy suffers from lockdowns resulting 0:05:21.760 --> 0:05:25.400 from the nation's COVID zero policy. In Sydney, Juliette Sally 0:05:25.520 --> 0:05:28.800 Bloomberg Daybreak, Juliet thanks for finding out more details this 0:05:28.839 --> 0:05:32.440 morning on how Elon Musk is financing his Twitter takeover. 0:05:32.560 --> 0:05:35.720 Let's get the latest live from Bloomberg Runita Young, Good morning, Granita, 0:05:35.760 --> 0:05:38.880 Good morning. Nathan wall Street suspected Elon Musk would have 0:05:38.920 --> 0:05:41.080 to sell some stock to cover the twenty one billion 0:05:41.120 --> 0:05:44.240 dollar equity portion of his deal to buy Twitter. Now, 0:05:44.279 --> 0:05:47.800 a filing shows Musk offloaded about four billion dollars worth 0:05:47.800 --> 0:05:51.080 of Tesla stock. Shortly after those filings were made public, 0:05:51.240 --> 0:05:55.080 Musk tweeted that no further Tesla cells were planned. Meantime, 0:05:55.120 --> 0:05:58.159 Bloomberg sources say before the deal was announced, Musk floated 0:05:58.160 --> 0:06:01.800 the idea of cutting jobs at costs at Twitter. On 0:06:01.960 --> 0:06:05.560 calls with bankers. Must also discussed ideas to monetize the 0:06:05.560 --> 0:06:09.440 platform to boost cash flow, including a potential subscription service 0:06:09.480 --> 0:06:13.080 to drive recurring revenue. Live in New York, I'm goned 0:06:13.120 --> 0:06:15.320 a Young Bloomberg Daybreak. All right, we need it, thank you, 0:06:15.320 --> 0:06:17.279 But let's shift years now and get to the latest 0:06:17.360 --> 0:06:21.000 on Ukraine. Russian missile struck Kiev overnight, but the battle 0:06:21.040 --> 0:06:24.400 for don Boss is still Russia's strategic focus. Meantime, here 0:06:24.400 --> 0:06:27.640 in the US, President Biden is asking Congress for thirty 0:06:27.680 --> 0:06:30.040 three billion dollars in aid to Ukraine, but the road 0:06:30.080 --> 0:06:33.520 to approval won't be easy. Bloomberg's said Bacheter has the story. 0:06:33.800 --> 0:06:37.040 The Ukraine part has broad support across Congress, but at 0:06:37.120 --> 0:06:40.600 risks getting snarled in his ask for COVID funding and immigration. 0:06:41.240 --> 0:06:44.040 The Senate could vote on the emergency spending next week, 0:06:44.120 --> 0:06:47.600 but the House will be on recess, so Congress could 0:06:47.640 --> 0:06:49.680 finish by the week of May nine and send it 0:06:49.720 --> 0:06:53.360 to the President. But if Democrats insist on attaching long 0:06:53.600 --> 0:06:58.400 stalled funding for vaccinations and immigration costs, it could be 0:06:58.440 --> 0:07:02.479 delayed indefinitely. Eight. Biden did urge them a crash to 0:07:02.480 --> 0:07:06.599 pass them together in San Francisco. I'm at Baxter Bloomberg Daybreak. 0:07:06.640 --> 0:07:09.640 All right, thanks, SMP futures down down twenty five point, 0:07:09.680 --> 0:07:12.480 staff futures down ninety five, nastack futures lower by a 0:07:12.560 --> 0:07:15.360 hundred twelve, The ten year treasury yield to eight four. 0:07:15.640 --> 0:07:18.320 Straight ahead your latest local headlines in the check of Sports. 0:07:18.360 --> 0:07:24.800 This is Bloomberg at five oh seven on Wall Street 0:07:24.800 --> 0:07:26.960 Ward forty two degrees in Central Park. They're still picking 0:07:27.000 --> 0:07:29.880 up some roadwork overnight on the northbound Merritt Parkway between 0:07:29.920 --> 0:07:32.720 Norwalk and Westport. Just keep an eye on that. Michael 0:07:32.720 --> 0:07:34.680 Barr has more on what's going on in New York 0:07:34.720 --> 0:07:38.040 and around the world. Happy Friday, Michael, Happy Friday to you, Nathan. 0:07:38.080 --> 0:07:41.119 New York City has postponed one of the nation's most 0:07:41.200 --> 0:07:44.720 far reaching requirements for employers to tell job seekers what 0:07:44.760 --> 0:07:48.880 they can make. Such pay transparency laws aren't championed as 0:07:48.960 --> 0:07:52.679 giving applicants, particularly women and people of color, a better 0:07:52.760 --> 0:07:55.240 shot at fair pay. The law was supposed to take 0:07:55.280 --> 0:07:58.320 effect in May, but the City Council voted yesterday to 0:07:58.360 --> 0:08:01.960 delay it for five months after your employers waved red flags. 0:08:02.440 --> 0:08:05.600 The law says employers with four or more workers must 0:08:05.640 --> 0:08:09.440 include a minimum and maximum salary in any job at 0:08:09.960 --> 0:08:12.480 New York State is setting aside more than thirty one 0:08:12.560 --> 0:08:16.280 billion dollars in this year's budget for schools. Governor Kathy 0:08:16.280 --> 0:08:18.920 Oakeles has more than three hundred sixty million dollars in 0:08:19.040 --> 0:08:22.440 this fiscal year will help students and teachers and younkers 0:08:22.480 --> 0:08:27.120 bounce back from the pandemic. They have just signed a budget, 0:08:27.640 --> 0:08:33.080 supported a budget they had the highest investment and education 0:08:33.360 --> 0:08:37.800 in our state's history. Governor hokel says, every penny it 0:08:37.920 --> 0:08:40.840 is worth it. Funeral services are set for today for 0:08:40.920 --> 0:08:45.520 falling FDN wifire fighter Timothy Klein. Klein died Sunday while 0:08:45.520 --> 0:08:48.640 fighting ablaze in Brooklyn. Services will take place for the 0:08:48.679 --> 0:08:52.720 thirty one year old in Bell Harbor. Eight other firefighters 0:08:52.720 --> 0:08:54.440 were hurt in that blaze. A twenty one year old 0:08:54.480 --> 0:08:57.600 man who had autism also died in the fire. In 0:08:57.800 --> 0:09:01.200 the Southwest, thousands of firefighters have continued to slow the 0:09:01.240 --> 0:09:06.360 advance of destructive wildfires, but high winds return today that 0:09:06.480 --> 0:09:09.160 sparked the spread of the blazes a week ago. More 0:09:09.200 --> 0:09:11.720 than a hundred sixty homes have been destroyed in one 0:09:11.920 --> 0:09:15.679 rural county in northeast New Mexico. The FDA wants to 0:09:15.720 --> 0:09:20.800 ban menthol cigarettes and flavored cigars. FDA Commissioner Robert Callips 0:09:20.800 --> 0:09:24.320 says studies that show the minty taste and cooling effects 0:09:24.320 --> 0:09:28.880 of menthol and cigar flavors like strawberry and grape increase 0:09:28.920 --> 0:09:31.960 the appeal for adults and young smokers alike. I really 0:09:32.000 --> 0:09:35.120 want to emphasize this. It's not just UM we want 0:09:35.120 --> 0:09:38.640 to take away mental in cigarettes as we want to 0:09:38.760 --> 0:09:44.360 help people UM stop this uh um smoking which is 0:09:44.400 --> 0:09:47.880 causing so much stealth and disability. FDA Commissioner Callips says 0:09:47.920 --> 0:09:50.120 menthol cigarettes account for more than a third of all 0:09:50.200 --> 0:09:53.559 cigarettes sales in the US. Global News twenty four hours 0:09:53.559 --> 0:09:56.200 a day on air and on Bloomberg Quick Take, powered 0:09:56.200 --> 0:09:59.040 by more than seven hundred journalists and analysts in more 0:09:59.080 --> 0:10:01.120 than a hundred twenty reeves. I'm Michael bar this is 0:10:01.120 --> 0:10:07.960 Bloomberg Nathing. Thank you, Michael. Coming up to five ten 0:10:08.040 --> 0:10:10.160 on ball Street time for the Bloomberg Sports Updated. Morn 0:10:10.280 --> 0:10:12.679 John Sire, Good morning, Nathan. Second year in a row 0:10:12.760 --> 0:10:16.120 the NFL Draft again with Jacksonville. The Jacks took Georgia 0:10:16.160 --> 0:10:19.280 pass rush for Trayvon Walker that allowed Michigan's defensive end 0:10:19.320 --> 0:10:22.360 Aidan Hutchinson to stay home with Detroit. Houston took l 0:10:22.520 --> 0:10:25.480 s U quarterback Derek Stingley, and the Jets, picking fourth, 0:10:25.720 --> 0:10:29.719 took Cincinnati cornerback I'm odd Sauce Gardener. Not once in 0:10:29.840 --> 0:10:32.920 Gardner's college career did he allow the receiver he was 0:10:33.000 --> 0:10:35.600 defending to score a touchdown. The Giants were next. They're 0:10:35.679 --> 0:10:38.360 pick announced not Fight Commissioner Roger Gadell, but by nineteen 0:10:38.440 --> 0:10:41.199 year old New Jersey residence Sam Prince, who has a 0:10:41.240 --> 0:10:43.079 heart and lung condition as part of them make a 0:10:43.120 --> 0:10:46.319 Wish program. With the fifth pick and it's fight to 0:10:46.559 --> 0:10:52.600 NFL Draft, the New York Football Giants select Cavon Tibodel 0:10:53.320 --> 0:10:55.680 Tibido Launch, projected to be the first pick of the draft. 0:10:55.679 --> 0:10:58.360 He should help a Giants pass rush that was virtually 0:10:58.400 --> 0:11:01.520 non existing last season. They're offensive line also struggles. With 0:11:01.600 --> 0:11:04.960 two picks later, the Giants took Alabama tackle Evan Neil 0:11:05.040 --> 0:11:08.400 top ten, ended with another Jets pick, Ohio statewide out 0:11:08.440 --> 0:11:11.880 Garrett Wilson. So Zach Wilson will profasses to Garrett Wilson. 0:11:12.440 --> 0:11:14.240 Rounds two of the two and three of the draft. 0:11:14.320 --> 0:11:16.360 Tonight in Last Days White a home stand for the 0:11:16.400 --> 0:11:19.720 Yankees six games. They won them all ten five over Baltimore, 0:11:19.760 --> 0:11:21.679 three run over for Aaron Judge. Yanks were held by 0:11:21.760 --> 0:11:25.199 five Oriel airs. That's one more than the Yankees have 0:11:25.320 --> 0:11:28.079 had all season. Yanks play tonight in Kansas City NBA 0:11:28.120 --> 0:11:31.320 Playoffs three Game six is all were serious. Clinton wins 0:11:31.320 --> 0:11:33.679 on the road, Philadelphia up by one at half time, 0:11:34.120 --> 0:11:37.079 Sixers one by thirty five in Toronto, Dallas one by 0:11:37.080 --> 0:11:39.640 two in Utah, and Phoenix one in New Orleans. The 0:11:39.679 --> 0:11:43.880 Son's Chris Paul took fourteen shots. He made all four teams. 0:11:43.920 --> 0:11:48.840 John stash Llanto, al right, John, thank you. SFP futures 0:11:48.840 --> 0:11:51.079 sound twenty seven points down at down futures down a 0:11:51.120 --> 0:11:54.319 hundred eight nastack futures down a hundred twenty three points. 0:11:54.400 --> 0:11:59.319 We'll get more on the earnings disappointments from Apple and Amazon. 0:11:59.440 --> 0:12:02.720 Next will be speaking live with Gene Munster, co founder 0:12:02.760 --> 0:12:08.839 of Luke Venture's This is Bloomberg Bloomberg eleven three oh 0:12:08.840 --> 0:12:11.760 weather mostly sunny, breezy, low sixties. Today, will be in 0:12:11.800 --> 0:12:15.800 the low sixties and mainly sunny Tomorrow. Clouds increased Sunday, 0:12:15.920 --> 0:12:17.960 so does the temperature. We'll get up to near seventy 0:12:18.120 --> 0:12:23.320 right now forty two in Central Park Markets, headlines and 0:12:23.440 --> 0:12:26.720 breaking news twenty four hours a day at Bloomberg dot Com, 0:12:26.800 --> 0:12:30.360 the Bloomberg Business Out and at Bloomberg Quick Tape. He's 0:12:30.400 --> 0:12:39.400 a Bloomberg Business Flash and I'm Karen Moscow, US not 0:12:39.559 --> 0:12:43.720 Index futures lower this morning following earnings from Amazon and Apple, 0:12:43.840 --> 0:12:45.880 and we checked the markets every fifteen minutes throughout the 0:12:45.880 --> 0:12:48.920 trading day on Bloomberg. Right now, S and P futures 0:12:48.920 --> 0:12:52.160 are down thirty points down, futures down one, and NASTAG 0:12:52.200 --> 0:12:55.760 futures down one. Four ten year treasury down nine thirty 0:12:55.840 --> 0:12:58.600 seconds two eight five percent. They yield on the two 0:12:58.679 --> 0:13:01.360 year two point six six for cent. And I'm ex screwed. 0:13:01.400 --> 0:13:03.360 Oil is up one and a quarter percent, up a 0:13:03.400 --> 0:13:06.080 dollar thirty one at a hundred six dollars sixty eight 0:13:06.240 --> 0:13:08.640 cents of barrel. That's a Bloomberg business flash. Now here's 0:13:08.679 --> 0:13:11.560 Michael Barr with more on what's going on around the world. Michael, 0:13:11.920 --> 0:13:14.320 thank you very much. Karen, and Russia found it targets 0:13:14.360 --> 0:13:17.839 from practically one end of Ukraine to the other, including Kiev. 0:13:18.200 --> 0:13:20.640 The bombardment of the city took place while the head 0:13:20.679 --> 0:13:24.680 of the United Nations was visiting Ukraine's capitol. Round one 0:13:24.720 --> 0:13:26.880 of the NFL draft is in the books. The first 0:13:26.920 --> 0:13:30.959 five picks were all defensive players. The Jaguars took Trayvon 0:13:31.040 --> 0:13:33.960 Walker with the top pick. The Jets at number four. 0:13:34.000 --> 0:13:37.360 Pick cornerback Ahmad Gardner. The Giants at five took another 0:13:37.480 --> 0:13:41.280 edge Russia Cavan Thibadeaux. In baseball, the Yankees beat the 0:13:41.320 --> 0:13:44.480 Orioles ten five. The Red Sox Nationals lost NHL. The 0:13:44.559 --> 0:13:48.000 Islanders beat the Capitol's five one, the Bruins one. Global 0:13:48.040 --> 0:13:50.000 news twenty four hours a day on air end on 0:13:50.040 --> 0:13:52.880 Bloomberg Quicktake power by more than twenty seven hundred journalists 0:13:52.880 --> 0:13:55.480 analysts in more than a hundred twenty countries. Michael bar 0:13:55.600 --> 0:13:58.199 this is Bloomberg. Nathan all right, Michael, thanks for coming 0:13:58.280 --> 0:14:00.319 up to five nineteen on Wall Street. I from the 0:14:00.360 --> 0:14:04.320 Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak, and we 0:14:04.360 --> 0:14:06.840 are wrapping up a very busy week for tech earnings 0:14:06.840 --> 0:14:11.199 with souring sentiment. This morning. Shares of Apple are down 0:14:11.280 --> 0:14:14.080 about two and a half percent. The iPhone maker reported 0:14:14.200 --> 0:14:17.520 record sales in the latest quarter, but the outlook is 0:14:17.520 --> 0:14:22.600 what's causing concern. And Amazon is plunging by nearly nine percent, 0:14:22.720 --> 0:14:28.320 with spending maybe catching up on that e commerce giants profits. 0:14:28.400 --> 0:14:31.200 Let's get more insights now. Gene Munster is with us 0:14:31.240 --> 0:14:35.080 this morning. Co founder of Loop Ventures. Gene it's good 0:14:35.120 --> 0:14:37.320 to speak with you this morning, and want to start 0:14:37.320 --> 0:14:41.120 with Apple because CEO Tim Cook was pretty explicit in 0:14:41.120 --> 0:14:46.120 the call after the record sales that the drag from 0:14:46.240 --> 0:14:50.960 the supply chain is a big concern for him. Is 0:14:51.000 --> 0:14:54.720 it a concern for you? It's not. I think it 0:14:54.840 --> 0:14:58.200 really hides the bigger picture here, which is the supply 0:14:58.360 --> 0:15:01.360 chain constraint topic has been part of the Apple story 0:15:01.400 --> 0:15:04.480 for the past twenty years. Apple comes out with a 0:15:04.520 --> 0:15:07.320 new product, consumers have to wait two to four months 0:15:07.320 --> 0:15:10.280 to get the new products. What happened a year ago, 0:15:10.680 --> 0:15:15.720 in actually a year ago to the date AP one 0:15:16.120 --> 0:15:19.000 is notable because that was the first quarter that their 0:15:19.040 --> 0:15:23.120 CFO talked about more broader supply constraints. They had never 0:15:23.200 --> 0:15:26.080 mentioned that before. We had a one time mentioned in 0:15:26.120 --> 0:15:30.480 that quarter. Since that time, they've been averaging nine times 0:15:30.520 --> 0:15:33.520 talking about these supply constraints. And the reason why I 0:15:33.600 --> 0:15:38.600 mentioned that is that each time they have proven not 0:15:38.680 --> 0:15:41.560 just over the last four quarters, but the last twenty years, 0:15:41.560 --> 0:15:45.560 that that consumers are willing to wait when Apple products 0:15:45.600 --> 0:15:49.840 aren't available. And so when we get we as investors 0:15:49.920 --> 0:15:52.840 in Apple kind of the broader investor in Apple community 0:15:53.120 --> 0:15:56.520 gets their heads wrapped around the vortex of what does 0:15:56.560 --> 0:15:59.360 it mean with these supply constraints the impact on the quarter. 0:15:59.400 --> 0:16:02.440 This quarter it's a negative seven percent. I think what 0:16:02.600 --> 0:16:05.960 misses the point is that those sales just get pushed 0:16:05.960 --> 0:16:11.000 into subsequent quarters. And uh. The reason, the final piece 0:16:11.040 --> 0:16:14.720 that's most important, and this was a spectacular quarter, The 0:16:14.800 --> 0:16:18.160 piece that's most important around that and evidence that consumers 0:16:18.200 --> 0:16:21.280 are willing to wait is Apple just grew their business 0:16:21.320 --> 0:16:24.400 at nine percent. The street was looking for four percent. 0:16:25.080 --> 0:16:27.520 That was in the face of a fifty three percent 0:16:27.680 --> 0:16:30.880 comp just a staggeringly difficult comp and they still grew 0:16:30.920 --> 0:16:34.200 off that along with shutting down Russia for a month 0:16:34.320 --> 0:16:37.240 and the slowing Macero and I think what that speaks 0:16:37.280 --> 0:16:40.400 to is that all of this handwringing around what's going 0:16:40.400 --> 0:16:43.320 on in the supply chain really misses the bigger point 0:16:43.360 --> 0:16:47.400 that Apple has products that people want. To that point, though, Gene, 0:16:47.680 --> 0:16:51.600 are Apple consumers willing to wait if the products don't 0:16:51.600 --> 0:16:56.720 show big changes in upgrade I'm thinking about iPhone thirteen 0:16:56.800 --> 0:16:59.800 compared to iPhone twelve or even the iPad. The sales 0:16:59.840 --> 0:17:05.240 and been kind of sluggish on some of the newest lines. Well, 0:17:05.480 --> 0:17:08.760 I think that year and year. Consumers do wait and 0:17:08.840 --> 0:17:11.960 part of the reasons that we're just increasingly dependent upon 0:17:12.000 --> 0:17:15.399 these products. Um, and so I think, yes, people do 0:17:15.560 --> 0:17:18.360 wait for him. And I think the results were impressive. 0:17:18.400 --> 0:17:21.920 They grew the US at eighteen percent this quarter and 0:17:22.080 --> 0:17:25.360 these were lights out good numbers. And so I would disagree. 0:17:25.400 --> 0:17:27.720 I think they're doing a great job of growing the products. 0:17:28.480 --> 0:17:32.880 So um, yeah, I think China grew at four percent. 0:17:33.800 --> 0:17:38.600 Tough comp there too. Let's turn to Amazon. The spend 0:17:39.080 --> 0:17:44.000 seems to be a focus for investors. Has the spending 0:17:44.200 --> 0:17:49.879 on personnel warehouses caught up with grove? It has? Well, 0:17:49.920 --> 0:17:53.960 that's the key. They have one point four million workers 0:17:53.960 --> 0:17:57.920 and inflations hate them. That's the vortex at Amazon's facing, 0:17:58.000 --> 0:18:00.879 much more than Apple and other tech companys. And I 0:18:00.920 --> 0:18:04.080 think what you're seeing is slowing growth. Their retail business 0:18:04.119 --> 0:18:07.359 is down three percent this quarter. They had a difficult 0:18:07.440 --> 0:18:10.120 comp They were not able to power through that comp 0:18:10.200 --> 0:18:12.440 This is different than what happened to Apples. I mentioned 0:18:12.440 --> 0:18:15.879 Apple continue to grow uh nicely against the difficult comp 0:18:16.320 --> 0:18:18.639 Amazon did not have that benefit. And so when you 0:18:18.680 --> 0:18:22.520 think about the expense question related to Amazon, you have 0:18:22.600 --> 0:18:24.439 to put it in the context of what's going on 0:18:24.520 --> 0:18:27.800 with their broader business, and so you have this dipping 0:18:27.880 --> 0:18:30.800 retail business. It's likely going to do that dip is 0:18:30.840 --> 0:18:34.760 likely going to accelerate in the June quarter, probably gonna 0:18:34.760 --> 0:18:37.840 be down six percent from down three percent in March. 0:18:38.440 --> 0:18:41.359 And then you have these rising costs, and so you 0:18:41.440 --> 0:18:44.400 have this mix and uh, an Apple's case have felt 0:18:44.440 --> 0:18:47.920 like this actually was really a phenomenal quarter. In Amazon's case, 0:18:47.960 --> 0:18:51.439 I'm more concerned because they are a brominter for broader 0:18:51.440 --> 0:18:54.359 consumer spending. We're starting to see that slow and you 0:18:54.440 --> 0:18:57.840 throw on top of that that cost equation that you mentioned, Nathan, 0:18:58.160 --> 0:18:59.920 and I think you get to a point where this 0:19:00.080 --> 0:19:02.080 stock can be range bound here for the next three 0:19:02.119 --> 0:19:04.800 to six months. In our last thirty seconds here, Gene, 0:19:04.840 --> 0:19:09.000 can Amazon web services make up the difference? Uh? The 0:19:09.080 --> 0:19:12.480 simple answer is no. It's web services are about twelve 0:19:12.480 --> 0:19:15.760 percent of total revenue, and at the end of the day, 0:19:15.840 --> 0:19:19.320 this is still a retail business. And so uh, Amazon 0:19:19.480 --> 0:19:22.520 needs to Essentially, what what has to happen is they 0:19:22.560 --> 0:19:26.800 need to just spend this year resetting growth expectations. And 0:19:26.840 --> 0:19:29.160 I'll leave you with on a on a shining note, 0:19:29.160 --> 0:19:32.760 not only for Amazon, for Broader Tech two thousand twenty 0:19:32.800 --> 0:19:34.600 three is going to be a great year because I 0:19:34.640 --> 0:19:37.960 think that the comps are gonna get easier, and I 0:19:37.960 --> 0:19:40.600 expect these stocks to do well at that period. We'll 0:19:40.600 --> 0:19:43.640 put that on tape, see if it holds up. Gene Monster, Great, 0:19:43.680 --> 0:19:45.520 have you gone with us this morning? Gene Monster, co 0:19:45.640 --> 0:19:50.359 founder of Loop Ventures. As we watch stocks fall to 0:19:50.480 --> 0:19:53.720 wrap up this trading month, SMP futures are down twenty 0:19:53.720 --> 0:19:56.800 five point, staff futures down ninety four, NASTACK futures leading 0:19:56.800 --> 0:19:59.400 the clients down a hundred twenty three points at ten 0:19:59.440 --> 0:20:08.119 your treasure yield two six. This is Bloomberg Bloomberg eleven 0:20:08.160 --> 0:20:10.920 three oh weather mostly sunny, breezy, low sixties today, will 0:20:10.920 --> 0:20:13.600 stay in the sunshine tomorrow with low sixties For Saturday. 0:20:13.680 --> 0:20:17.360 Highs could hit seventy with increasing cloud Sunday. Right now 0:20:17.440 --> 0:20:24.360 forty two in Central Park, broadcasting live from the Bloomberg 0:20:24.400 --> 0:20:28.080 Interactive Broker Studio in New York. Bloomberg E Living Freedom 0:20:28.240 --> 0:20:31.400 to Washington, d C. Bloomberg ninety nine one to Boston, 0:20:31.520 --> 0:20:35.359 Bloomberg what oh six one to San Francisco, Bloomberg sixty 0:20:35.480 --> 0:20:38.080 to the country. Sirius XM Chad A one nine team, 0:20:38.200 --> 0:20:41.359 and around the globe, the Bloomberg Business app and Bloomberg 0:20:41.440 --> 0:20:51.040 Radio dot com. This is Bloomberg Daybreak. It's five thirty 0:20:51.040 --> 0:20:53.440 on Wall Street. Good morning. I'm Nathan Hager and I'm 0:20:53.480 --> 0:20:56.399 Parard Moscow. We're just about four hours away from the 0:20:56.440 --> 0:20:58.400 open of US trading. Let's get you up to date 0:20:58.400 --> 0:20:59.920 on the news you need to know at this hour. 0:21:00.160 --> 0:21:02.560 Apple shares down about two and a half percent in 0:21:02.600 --> 0:21:07.000 early trading despite posting record earnings. In a conference call yesterday, 0:21:07.040 --> 0:21:09.200 the company said it could lose up to eight billion 0:21:09.240 --> 0:21:12.119 dollars in the current quarter due to supply constraints, and 0:21:12.200 --> 0:21:14.720 shares of Amazon are lower as well, caring down nearly 0:21:14.800 --> 0:21:17.439 nine percent. That company announced the lost money in the 0:21:17.440 --> 0:21:20.080 first quarter and could see another loss in this period. 0:21:20.320 --> 0:21:23.840 Bloomberg Intelligence senior e commerce and retail analysts Punum Goyle 0:21:23.920 --> 0:21:27.920 says it's due to rising costs. Aws continues let's pace, 0:21:28.000 --> 0:21:31.120 So that's great to hear on the online business, clearly 0:21:31.440 --> 0:21:35.080 in line with expectations. But the margin week you could 0:21:35.080 --> 0:21:37.200 say that that's surprising, but it's really not. I mean, 0:21:37.240 --> 0:21:40.440 from everything that we've been seeing all year, the supply 0:21:40.640 --> 0:21:43.639 chain crunch is only getting worse, it's not getting better, 0:21:43.800 --> 0:21:47.000 so they are getting hit from higher costs across the board. 0:21:47.080 --> 0:21:50.680 Bloomberg intelligence analyst Punam Coyle says Amazon's cloud service a 0:21:50.920 --> 0:21:53.880 WS has always been able to offset higher retail costs 0:21:54.080 --> 0:21:57.680 until now, well elsewhere. Nathan Shares of Intail down more 0:21:57.720 --> 0:22:01.280 than three percent after second quarter four US raised concerns 0:22:01.280 --> 0:22:04.680 and later today but your results from oil giants Exxon 0:22:04.800 --> 0:22:07.560 and Chevron. Let's turn to Twitter now, Karen, were are 0:22:07.640 --> 0:22:10.920 finding out more about how Elon Musk is financing his takeover, 0:22:10.960 --> 0:22:13.320 and let's get the latest live from Bloomberg. Need a young, 0:22:13.359 --> 0:22:16.359 Good morning, Rnita, Good morning, Nathan. Of filing shows Elon 0:22:16.440 --> 0:22:19.840 Musk offloaded about four billion dollars worth of Tesla stock 0:22:19.920 --> 0:22:23.000 to cover the twenty one billion dollar equity portion of 0:22:23.040 --> 0:22:26.160 his deal to buy Twitter. After those filings were made public, 0:22:26.320 --> 0:22:29.960 he tweeted that no further Tesla sales were planned, Bloomberg 0:22:30.040 --> 0:22:32.679 sources say before the deal was announced, Musk floated the 0:22:32.720 --> 0:22:35.440 idea of cutting jobs and costs at Twitter, you know, 0:22:35.480 --> 0:22:38.919 on calls with bankers. He also discussed ideas to monetize 0:22:38.920 --> 0:22:42.680 the platform to boost cash flow, including a potential subscription 0:22:42.720 --> 0:22:46.200 service to drive recurring revenue. Live in New York. I'm 0:22:46.200 --> 0:22:49.320 rened a young Bloomberg day Break, Nita, thank you. Overseas, 0:22:49.320 --> 0:22:52.679 stocks and China are rebounding. The Hanksang Tech Index searched 0:22:52.680 --> 0:22:56.160 eleven percent and Chinese equities rallied after the country announced 0:22:56.160 --> 0:22:59.600 economic stimulus plans and a commitment to curbing the spread 0:22:59.600 --> 0:23:02.440 of Cove and Ukraine. Karen, Russian missiles poured over the 0:23:02.480 --> 0:23:05.080