WEBVTT - Bloomberg Daybreak: February 3, 2022 - Hour 2 (Radio) 0:00:02.400 --> 0:00:05.680 By from the Bloomberg Interactive Burger Studios. This is Bloomberg 0:00:05.760 --> 0:00:09.760 day Break for Thursday, February third, two. Coming up this hour, 0:00:10.160 --> 0:00:14.400 Nastank futures plunge after disappointing earnings from the parent of Facebook. 0:00:14.600 --> 0:00:18.560 Spotify shares tumble as the company forecast slowing subscriber games. 0:00:18.840 --> 0:00:21.880 On Capitol Hill, hearings began for President Biden's picks for 0:00:21.920 --> 0:00:24.360 the FED and the Bank of England at ECB announced 0:00:24.360 --> 0:00:27.920 policy decisions. President Biden visits New York City today on 0:00:28.000 --> 0:00:31.440 gun violence, Plus, mourners said goodbye to the second NYPD 0:00:31.600 --> 0:00:35.880 officer ambushed last month. Online Blooblomer More Ahead, I'm John 0:00:35.880 --> 0:00:38.400 Stashtown Sports, the Nicks loss at the Garden to Memphis, 0:00:38.400 --> 0:00:41.640 the Nets lost again in Sancramento. The Islanders shout out 0:00:41.720 --> 0:00:46.680 by Seattle. That's all straight ahead on Bloomberg day Break 0:00:46.920 --> 0:00:51.760 on Bloomberg Element Free on New York, Bloomberg Washington, d C, 0:00:52.159 --> 0:00:56.520 Bloomberg one O six one, Boston, Bloomberg nine sixties, San Francisco, 0:00:56.880 --> 0:01:00.200 Sirius x M one nineteen and around the world down 0:01:00.320 --> 0:01:03.600 Bloomberg Radio dot Com and via the Bloomberg Business At 0:01:07.480 --> 0:01:10.520 good Morning, I'm Nathan Hager and I'm Karen. Moscow and 0:01:10.640 --> 0:01:14.400 US Dock Index futures are falling on week Kech earnings. 0:01:14.480 --> 0:01:16.119 We're coming up to six o one on Wall Street, 0:01:16.160 --> 0:01:18.200 and we check the markets every fifteen minutes throughout the 0:01:18.200 --> 0:01:20.880 trading day. On Bloomberg, U S and P Future is 0:01:20.920 --> 0:01:24.240 down fifty points down, futures down one hundred eight at 0:01:24.319 --> 0:01:27.839 Nastack Future is down three hundred twenty six. That's down 0:01:27.840 --> 0:01:31.760 two point two percent. The decks in Germany's down half percent. 0:01:31.840 --> 0:01:34.000 The ten year treasury up one thirty second. He had 0:01:34.000 --> 0:01:36.760 one point seven six percent yield on the two year 0:01:36.840 --> 0:01:40.039 one point one three percent. Nin Max Screwed oils down 0:01:40.080 --> 0:01:42.160 one point six percent on a dollar thirty nine at 0:01:42.160 --> 0:01:44.920 eighty six dollars eighty seven cents a barrel, and Comex 0:01:45.000 --> 0:01:47.400 Gold is down at third of a percent. Nathan, Well, 0:01:47.440 --> 0:01:49.760 this big drop in Nasdaq futures are seeing this morning. 0:01:49.840 --> 0:01:52.960 Karen comes after four straight days of gains, but disappointing 0:01:53.000 --> 0:01:56.080 earnings from Facebook are the catalyst for this morning's declines. 0:01:56.360 --> 0:01:59.880 Shares of the parent company Meta are down twenty percent 0:02:00.040 --> 0:02:02.720 in early training. Ed Ludlow joins us with more from 0:02:02.720 --> 0:02:05.640 our Bloomberg nine sixty news room in San Francisco. This 0:02:05.720 --> 0:02:08.520 was the first quarter in anyone's memory where the core 0:02:08.560 --> 0:02:11.919 product Facebook dot Com or the Facebook app didn't grow 0:02:12.280 --> 0:02:14.880 at all, and executives on the core attributed that to 0:02:15.000 --> 0:02:19.040 competition in the form of TikTok and YouTube, so principally 0:02:19.480 --> 0:02:22.560 in video where they say the attentions of young people 0:02:22.919 --> 0:02:26.640 are being stolen away and that is really impacting growth. 0:02:26.680 --> 0:02:30.000 There was, of course a lot of questions about the metaverse, 0:02:30.040 --> 0:02:32.960 and for the first time we got financials on Facebook 0:02:33.000 --> 0:02:36.079 Reality Labs, the business unit really working on the metaverse 0:02:36.240 --> 0:02:38.360 for four year twenty one. It was a loss of 0:02:38.480 --> 0:02:41.239 ten billion dollars and so that now has become the 0:02:41.320 --> 0:02:45.160 question for Wall Street. Bloomberg Intelligence say that that operating 0:02:45.240 --> 0:02:49.160 loss from Facebook Reality Labs could translate to ten percentage 0:02:49.200 --> 0:02:54.560 points of margin erosion for meta in twenty two. Ed Ludlow, 0:02:54.600 --> 0:02:59.080 Boomberg US, San Francisco, and thank you. Disappointing Facebook results 0:02:59.120 --> 0:03:01.519 are weighing on other social media company and says this 0:03:01.560 --> 0:03:04.720 morning shares a Twitter, Snap and Pinterest or falling Snap 0:03:04.800 --> 0:03:08.160 is down more than fiftcent, but Twitter and Pinterest are 0:03:08.200 --> 0:03:10.760 both lower by more than seven percent. Now We're also 0:03:10.880 --> 0:03:13.720 seeing big losses for Spotify. This morning, Karen, Earnings and 0:03:13.720 --> 0:03:16.800 forecasts from the streaming and podcast service fell short of estimates, 0:03:16.800 --> 0:03:19.000 and that stock is now down more than eight percent. 0:03:19.280 --> 0:03:22.360 Let's get more live with Bloomberg's Rnita Young. Good morning, Rnita, 0:03:22.400 --> 0:03:25.760 Good morning Nathan. After a month of controversy over podcast 0:03:25.800 --> 0:03:29.480 host Joe Rogan, Spotify has a more immediate business problem, 0:03:29.639 --> 0:03:33.320 a slowdown in growth to start the year. Spotify expects 0:03:33.360 --> 0:03:35.680 the end of the first quarter with total users and 0:03:35.720 --> 0:03:40.040 subscribers below forecasts. The company blames it on a strong 0:03:40.120 --> 0:03:44.360 into business for the streamer has boomed during the pandemic, 0:03:44.440 --> 0:03:49.600 but with one thirty five million users added since twenty nineteen, 0:03:49.960 --> 0:03:53.600 now almost half pay for the service. Live in New York, 0:03:53.640 --> 0:03:56.200 I'm Goranita Young, Bloomberg Daybreak. I need to thank you 0:03:56.320 --> 0:03:58.480 up nextually get results from Amazon on The company of 0:03:58.480 --> 0:04:01.960 reports earnings this afternoon, and Bloomberg's Tom Busby has a preview. 0:04:02.160 --> 0:04:05.360 The online retail giant is expected to post record revenue 0:04:05.400 --> 0:04:08.520 for the holiday quarter, despite concerns about slowing growth as 0:04:08.560 --> 0:04:11.120 consumers pulled back on their spending, even though more of 0:04:11.200 --> 0:04:14.400 us were dining out again, traveling shopping in stores again 0:04:14.520 --> 0:04:17.640 last quarter. Look for revenues of one hundred thirty seven 0:04:17.680 --> 0:04:21.040 point eight three billion dollars, thanks in part to continued 0:04:21.080 --> 0:04:24.400 growth and it's Amazon Web Services unit, and because of inflation, 0:04:24.480 --> 0:04:27.039 many analysts expect Amazon to raise the price of a 0:04:27.160 --> 0:04:30.240 Prime membership as a quick boost to revenues. The last 0:04:30.279 --> 0:04:33.240 price hike to one nineteen dollars a year was in 0:04:33.320 --> 0:04:37.599 twenty eighteen. Tom Busby, Bloomberg Daybreak. All right, Tom, thank you. 0:04:37.680 --> 0:04:39.560 Let's turn to Capitol Hill now where it's all about 0:04:39.600 --> 0:04:42.560 the Fed. Today, hearings begin on President Biden's picks for 0:04:42.560 --> 0:04:45.520 the Central Banks Board. Amy Morris has a preview from 0:04:45.520 --> 0:04:50.000 our Bloomberg newsroom in Washington. All three nominees, Philip Jefferson, 0:04:50.160 --> 0:04:53.119 Lisa Cook and Sarah Bloom Raskin, have said they placed 0:04:53.120 --> 0:04:56.039 the high priority on tackling inflation. But that's also a 0:04:56.080 --> 0:04:59.800 politically dangerous notion for the Biden administration, which is pushing 0:05:00.000 --> 0:05:04.600 against accusations that it's spending policies are driving price increases. 0:05:04.920 --> 0:05:07.800 In prepared remarks, the nominees will make it clear there, 0:05:07.839 --> 0:05:11.080 in line with Chairman j Pel look for Republicans on 0:05:11.120 --> 0:05:14.520 the committee to quiz the nominees extensively on their commitment 0:05:14.600 --> 0:05:18.720 to acting aggressively against inflation, even if that hurts employment. 0:05:19.000 --> 0:05:22.039 In Washington, I maybe more as Bloomberg daybreak, Amy, thank 0:05:22.080 --> 0:05:24.640 you Economic data also and focus. This morning, we get 0:05:24.680 --> 0:05:27.679 a reading on jobless claims ahead of tomorrow's employment report, 0:05:27.720 --> 0:05:31.240 and Economist see weekly jobless claims falling again as the 0:05:31.240 --> 0:05:35.960 Omicron variant eases. Bloomberg's viney down. Judais reports jobless claims 0:05:35.960 --> 0:05:39.120 piled up during the worst of the Omicron outbreak. Bloomberg 0:05:39.200 --> 0:05:43.400 Economics anticipates a quick turnaround now as the COVID nineteen 0:05:43.560 --> 0:05:48.000 variants subsides subsides faster than a comparable episode at the 0:05:48.120 --> 0:05:51.880 end of In the Power Report, jobless claims drop for 0:05:51.920 --> 0:05:54.279 the first time in four weeks. They fell to a 0:05:54.360 --> 0:05:57.599 half century low in December. The government issues its monthly 0:05:57.600 --> 0:06:00.760 employment report Friday, and it could be weak the Omicron. 0:06:02.160 --> 0:06:04.400 Bloomberg day Break All right, Vinnie. Thanks. In Europe we 0:06:04.440 --> 0:06:06.920 get a double whammy from central banks this morning is 0:06:06.960 --> 0:06:09.240 both the Bank of England and the European Central Bank 0:06:09.279 --> 0:06:12.000 make policy decisions. Let's go live to London and get 0:06:12.000 --> 0:06:15.400 a preview with bloombergs Max Ramsey, Good morning, Max, morning 0:06:15.400 --> 0:06:17.960 to you, Nathan and Karen. Yes, we'll get that policy 0:06:18.000 --> 0:06:20.320 decision from the BOE in under an hour and just 0:06:20.440 --> 0:06:22.640 over an hour and a half till the ECB, and 0:06:22.680 --> 0:06:25.719 the expectation here is all about divergence. The Bank of 0:06:25.760 --> 0:06:28.560 England is expected to deliver the first back to back 0:06:28.600 --> 0:06:31.240 interest rate hike since two thousand and four and take 0:06:31.320 --> 0:06:35.480 the first steps towards unwinding pandemic stimulus. The ECB there 0:06:35.520 --> 0:06:38.560 has been insisting a rate hike this year is unlikely, 0:06:38.600 --> 0:06:41.320 but they do meet with the backdrop of hot inflation. 0:06:41.400 --> 0:06:44.080 January CPI came in at a surprise five point one 0:06:44.080 --> 0:06:48.680 percent yesterday, blowing past expectations and over double the ECB's target. 0:06:49.000 --> 0:06:52.120 Live in London, Max Ramsey, Bloomberg Daybreak, Max, thank you. Well. 0:06:52.160 --> 0:06:54.560 Back here in the US, tax season getting underway, and 0:06:54.600 --> 0:06:56.960 Bloomberg News has learned the I r S is hiring 0:06:56.960 --> 0:06:59.800 about twelve hundred people to help navigate what could be 0:07:00.080 --> 0:07:03.560 of the most challenging tax filing seasons in years. The 0:07:03.640 --> 0:07:05.960 influx of additional help comes as the I r S 0:07:06.000 --> 0:07:08.400 began this filing season with a backlog of fos to 0:07:08.520 --> 0:07:12.520 ten million unprocessed returns from previous years, and that compares 0:07:12.560 --> 0:07:15.600 to fewer than one million in normal years. Straight to 0:07:15.640 --> 0:07:23.320 had your latest local headlines and this is Bloomberg. Thanks 0:07:23.320 --> 0:07:25.800 scaring at six o seven on Wall Street where in 0:07:25.800 --> 0:07:27.440 Central Park and still dealing with a crash on the 0:07:27.440 --> 0:07:30.360 Gothels Bridge. Ran to the New Jersey Turnpike. Michael barrs 0:07:30.400 --> 0:07:32.200 here with what else is going on in New York 0:07:32.240 --> 0:07:34.480 and around the world. Michael, thank you very much, Nathan. 0:07:34.480 --> 0:07:37.080 President Joe Biden has scheduled to visit New York City 0:07:37.120 --> 0:07:40.440 today to discuss fighting a surge in gun violence and 0:07:40.520 --> 0:07:43.640 cities across the nation. This woman, who lives in Harlem 0:07:43.800 --> 0:07:46.360 is scared of the violence. Her son was shot. It's 0:07:46.440 --> 0:07:51.240 scary when you have a baby sitting in the car 0:07:51.520 --> 0:07:56.400 with its parent and being shot. It's scary when you 0:07:56.480 --> 0:08:01.840 have a mother pushing her chow down the street. So 0:08:01.920 --> 0:08:05.240 far as six NYPD officers have been shot this year alone. 0:08:05.880 --> 0:08:09.160 Officers masked by the thousands on Fifth Avenue for New 0:08:09.240 --> 0:08:11.920 York City second police funeral in less than a week. 0:08:12.240 --> 0:08:16.480 They mourned Officer Wilbert Mora at St. Patrick's Cathedral. More 0:08:16.760 --> 0:08:20.560 and his partner, Jason Rivera, was shot January one, while 0:08:20.600 --> 0:08:23.920 responding to a call about the domestic argument in Harlem. 0:08:23.960 --> 0:08:28.280 It is New Yorkers against the killers, and we will 0:08:28.360 --> 0:08:32.600 not lose. We will protect our city. New York Mayor 0:08:32.720 --> 0:08:35.760 Eric Adams spoke at more as funeral. Even when the 0:08:35.880 --> 0:08:41.600 bullet hits the body of our citizens, the emotional trauma 0:08:41.800 --> 0:08:45.520 continues to rip the anatomy of our city, and the 0:08:45.640 --> 0:08:49.440 pathway never ends. Mayor Adams says, more Of, who was 0:08:49.440 --> 0:08:53.320 twenty seven, joined the NYPD. In October of twenty eighteen. 0:08:53.800 --> 0:08:56.720 Former Alaska Governor Sarah Pale and his due back in 0:08:56.760 --> 0:08:59.319 the New York City courtroom, more than a week after 0:08:59.400 --> 0:09:02.760 her libel trial against The New York Times was postponed 0:09:03.080 --> 0:09:07.120 because she had COVID nineteen. Away from court, Palin, who 0:09:07.160 --> 0:09:10.480 was unvaccinated, caused to stir by dining out in an 0:09:10.520 --> 0:09:14.920 upscale Manhattan restaurant twice just days after her positive status 0:09:14.960 --> 0:09:18.120 was made public. Four people have been arrested in connection 0:09:18.200 --> 0:09:21.600 with the overdose death of wire actor Michael K. Williams 0:09:21.760 --> 0:09:25.520 at his Brooklyn home last September. Damian Williams is the 0:09:25.600 --> 0:09:28.600 u S Attorney for the Southern District of New York. Dendy. 0:09:28.640 --> 0:09:31.880 Opioids like fencinnel and heroin don't care about who you 0:09:31.920 --> 0:09:35.520 are or what you've accomplished. They just feed edition and 0:09:35.679 --> 0:09:38.480 lead a tragedy. U S Attorney Williams says this is 0:09:38.520 --> 0:09:41.079 a public health crisis that has to stop. A new 0:09:41.080 --> 0:09:44.480 winter storm is causing havoc across the US, ultimately affecting 0:09:44.520 --> 0:09:47.880 more than a hundred thirty million Americans. Snow will stretch 0:09:47.920 --> 0:09:51.000 from Texas to the East Coast. Today Global News twenty 0:09:51.000 --> 0:09:53.760 four hours a day on air and on Bloomberg Quick Take, 0:09:54.000 --> 0:09:57.200 powered by more than twenty seven journalists and analysts more 0:09:57.200 --> 0:10:00.240 than a hundred twenty countries. Michael Barr, this is Burke, 0:10:00.320 --> 0:10:07.960 Nathan Okay, Michael, Thanks to six ten on Wall Street. 0:10:08.000 --> 0:10:10.560 Time to the Bloomberg Sports Update with John Sesshown. If 0:10:10.559 --> 0:10:12.800 the Knicks were playing catch up all night at the Garden, 0:10:12.840 --> 0:10:15.240 the only time they led Memphis was und enough and 0:10:15.280 --> 0:10:17.440 the Knicks were down by nineteen cut at to six. 0:10:17.520 --> 0:10:20.640 Grizzlies went back ahead by fifteen. Nick slice that lead 0:10:20.720 --> 0:10:23.679 to five couldn't get closer. Grizzlies one one, one oh 0:10:23.720 --> 0:10:26.880 eight Jaren Jackson twenty six point seven four. The next 0:10:26.960 --> 0:10:29.600 with thirty he made eight three pointers. Knicks said, an 0:10:29.600 --> 0:10:31.120 oh and three road trip, and now they hit the 0:10:31.160 --> 0:10:33.760 road for five more starting Saturday at the Lakers. The 0:10:33.880 --> 0:10:36.640 Nets without the injured Kevin Durant not very good. They 0:10:36.679 --> 0:10:39.360 lost to lowly Sacramento one twelve, one oh one, and 0:10:39.440 --> 0:10:42.360 that's six loss in the road. James Harden thirty seven minutes, 0:10:42.400 --> 0:10:44.800 only four points, never got to the free throw line 0:10:45.000 --> 0:10:47.440 the NHLs. At the All Star Break, the Islanders go 0:10:47.520 --> 0:10:49.959 went off a three offane home loss to Seattle, first 0:10:50.000 --> 0:10:53.280 shutout in cracking history. Well Bill Belichick at some point 0:10:53.360 --> 0:10:55.880 he asked about his text, the one he meant to 0:10:55.920 --> 0:10:57.760 send to Brian Dave all but in Sten said to 0:10:58.040 --> 0:11:01.480 Brian Flores, did Belichick no. Three days before Flora's was 0:11:01.600 --> 0:11:04.199 interviewed with the Giants that they had already decided to 0:11:04.280 --> 0:11:06.920 hire day Ball. It's at the heart of Flora's is 0:11:07.000 --> 0:11:10.800 lost through to the NFL claiming racism and they're hiring practices. 0:11:11.120 --> 0:11:13.920 On CBS this morning, Floras was asked his reaction to 0:11:14.000 --> 0:11:21.199 seeing the text was arranged of emotions. Uh, humiliation, uh, uh, disbelief, 0:11:21.679 --> 0:11:27.480 um uh anger um now worked so hard to get 0:11:27.480 --> 0:11:32.360 to um to where I am from uh in football 0:11:32.400 --> 0:11:34.679 to become a head coach. Laura's his lawyer says others 0:11:34.679 --> 0:11:39.240 may join him in the class actions. John Stashwer Bloomberg Sports, John, 0:11:39.280 --> 0:11:41.960 thank your SMP Futures down down forty eight points, are 0:11:42.000 --> 0:11:44.600 more than one percent out features are down eighty eight points. 0:11:44.679 --> 0:11:48.680 Nastac features leading the declines this morning, down three five 0:11:48.720 --> 0:11:52.040 points or two point two percent. Dragged down by Facebook 0:11:52.040 --> 0:11:55.880 parent meta platforms. Those shares down more than twenty percent 0:11:56.080 --> 0:11:59.959 on an earnings disappointment. We'll discuss it next with Man Deep, Say, 0:12:00.520 --> 0:12:07.640 senior tech analyst at Bloomberg Intelligence. This is Bloomberg Bloomberg 0:12:07.679 --> 0:12:09.720 eleven three O weather. Dense fog this morning, rain this 0:12:09.760 --> 0:12:11.640 afternoon with a high in your forty five degrees. The 0:12:11.720 --> 0:12:14.720 rain will change over to a wintry mess tomorrow. Temperature 0:12:14.720 --> 0:12:17.199 is falling through the day by Saturday, upper twenties for 0:12:17.360 --> 0:12:23.160 highs currently forty four degrees in Central Park. Markets. Headlines 0:12:23.200 --> 0:12:26.199 and breaking news twenty four hours a day at Bloomberg 0:12:26.280 --> 0:12:29.320 dot com, the Bloomberg Business at and at Bloomberg Quick 0:12:29.360 --> 0:12:39.040 tape is a Bloomberg Business lash and I'm far at Moscow. 0:12:39.160 --> 0:12:42.559 Nowsday Future is tumbling this morning is disappointing. Hernings and 0:12:42.640 --> 0:12:46.559 forecasts from technology Bellweathers halts a rally in global stocks, 0:12:46.640 --> 0:12:49.319 the dollars strengthening ahead of great decisions in Europe in 0:12:49.360 --> 0:12:51.839 the UK, and we check the markets every fifteen minutes 0:12:51.840 --> 0:12:55.360 throughout the trading day. On Bloomberg Now's dead futures are 0:12:55.440 --> 0:12:59.120 down threety three points. That's down two point three first 0:12:59.120 --> 0:13:01.960 set as the P futures down fifty three and AS 0:13:02.000 --> 0:13:04.880 and DAL futures are down one d thirteen. The decks 0:13:04.880 --> 0:13:07.160 in Germany's down four tenths of a percent. The ten 0:13:07.240 --> 0:13:10.040 year treasury little change at one point seven seven percent, 0:13:10.400 --> 0:13:12.840 yield on the two year one point one three percent. 0:13:13.200 --> 0:13:15.400 Nine Max screwed oils down one point six percent on 0:13:15.480 --> 0:13:17.520 a dollar thirty eight and eighty six dollars eighty eight 0:13:17.559 --> 0:13:20.240 cents of barrel comex school down four tens percent or 0:13:20.280 --> 0:13:23.080 seven dollars forty cents at eighteen o two ninety announce, 0:13:23.440 --> 0:13:26.080 the euro one point one two seven seven against the dollar, 0:13:26.120 --> 0:13:28.839 British bound one point three five five nine, the ends 0:13:28.840 --> 0:13:31.760 at one fourteen point eight zero, and Bitcoin this morning 0:13:31.760 --> 0:13:34.720 moving lower at thirty six thousand, four hundred dollars, and 0:13:34.720 --> 0:13:37.160 that's a Bloomberg business flash. Now here's Michael Barr with 0:13:37.200 --> 0:13:39.840 more on what's going on around the world. Muchael Karen, 0:13:39.880 --> 0:13:42.480 thank you very much. US special forces have carried out 0:13:42.520 --> 0:13:46.320 what the Pentagon said was a successful counter terrorism raid 0:13:46.679 --> 0:13:51.360 in northwestern Syria. First responders reported civilians had also been killed. 0:13:51.760 --> 0:13:55.200 President Biden ordered three thousand US troops deployed to Eastern 0:13:55.240 --> 0:13:59.640 European NATO allies and Russian neighbors. Concerns continue about a 0:13:59.679 --> 0:14:03.800 post Russian invageon of Ukraine. President Biden visits New York 0:14:03.840 --> 0:14:07.120 City today on gun violence. In the NBA, the Knicks 0:14:07.200 --> 0:14:10.959 and Nets lost, the Celtics and Wizards won. In the NHL, 0:14:11.080 --> 0:14:14.720 the Islanders and Capitals lost. Global News twenty four hours 0:14:14.720 --> 0:14:17.920 a day on air and on Bloomberg Quicktate, powered by 0:14:17.960 --> 0:14:20.600 more than twenty seven hundred journalists and analysts and more 0:14:20.640 --> 0:14:23.640 than one d twenty countries. Michael Barr, this is Bloomberg 0:14:23.680 --> 0:14:25.960 Anham all right, Michael, thanks at six nineteen on Wall 0:14:25.960 --> 0:14:28.880 Street Live from the Bloomberg Interactor Broker Studios. This is 0:14:28.920 --> 0:14:31.680 Bloomberg Daybreak. Because we continue to watch shares of Facebook 0:14:31.680 --> 0:14:35.680 company meta platforms, the parent down more than twenty percent, 0:14:35.800 --> 0:14:37.920 down more than twenty and a half percent now in 0:14:37.960 --> 0:14:41.920 the pre market on disappointing earnings. Set to lose about 0:14:41.960 --> 0:14:45.080 a hundred eighty billion dollars in market value if these 0:14:45.120 --> 0:14:48.200 numbers hold at the open joining US now. Mandeep Singh, 0:14:48.320 --> 0:14:52.120 senior tech analysts for Bloomberg Intelligence, obviously a lot of 0:14:52.360 --> 0:14:56.320 skittishness from investors over the drop in subscribers, the first 0:14:56.320 --> 0:14:59.120 time of investors have seen that in quite some time. 0:14:59.560 --> 0:15:03.760 And the outlook going forward, Man deep, Yeah, Look, I 0:15:03.800 --> 0:15:08.720 mean I think given Facebook scale, I think the deceleration 0:15:08.800 --> 0:15:12.160 would have been okay had they not spooked the investors 0:15:12.200 --> 0:15:16.400 in terms of the overall strategy ships. So they called 0:15:16.440 --> 0:15:19.880 out this big pivot to videos to catch up to 0:15:20.480 --> 0:15:24.080 you know, TikTok and YouTube, and I think the wave 0:15:24.400 --> 0:15:29.200 was communicated is how it probably didn't come across as 0:15:29.280 --> 0:15:33.479 something that they should have you know, noted earlier. And suddenly, 0:15:33.560 --> 0:15:36.720 you know, they come out and say that's their entire focus. 0:15:36.720 --> 0:15:40.520 And along with Metaverse, which is losing ten billion dollars 0:15:40.520 --> 0:15:43.240 a year. I mean, when you look at this company, 0:15:43.360 --> 0:15:47.920 the margin profile has changed completely. Now the core business 0:15:48.040 --> 0:15:51.920 was about operating margins guess what going forward, it will 0:15:51.960 --> 0:15:55.040 be more and that is why you see such a 0:15:55.040 --> 0:15:58.760 strong reaction. I guess with the violence of this move, 0:15:58.880 --> 0:16:03.880 it begs the obvious question, man deep, whether this is overdone? Well, 0:16:04.120 --> 0:16:08.640 so think of it. You know, in terms of top line, Look, 0:16:08.720 --> 0:16:12.600 if Facebook's top line is decelerating, it what it tells 0:16:12.720 --> 0:16:16.040 us is probably the whole social media ad space is 0:16:16.080 --> 0:16:19.080 going down. And it has some connections to the overall 0:16:19.120 --> 0:16:22.640 growth in GDP and economy as well. But and and 0:16:22.840 --> 0:16:26.320 that will bounce back, you know eventually once GDP and 0:16:26.400 --> 0:16:30.280 you know, uh, advertisers start to come back. If the 0:16:30.360 --> 0:16:35.960 engagement and given Facebook scale, you would expect, you know, scales, 0:16:35.960 --> 0:16:39.480 growth will bounce eventually. The problem, as I said, is 0:16:39.720 --> 0:16:43.760 one they have engagement problems, so they are definitely losing 0:16:43.840 --> 0:16:46.840 engagement with the younger demographic. The other is the change 0:16:46.840 --> 0:16:50.280 in business model. So now if they start to pay 0:16:50.360 --> 0:16:54.400 creators for the content they're creating, it's the model is 0:16:54.480 --> 0:16:57.880 very similar to YouTube, and YouTube's gross margins are around 0:17:00.360 --> 0:17:04.080 and right now Facebook's gross margins are eighty percent, so 0:17:04.200 --> 0:17:08.200 that margin differential is huge. And if they're saying they're 0:17:08.240 --> 0:17:13.040 completely pivoting to videos and that's their sole focus. And 0:17:13.040 --> 0:17:15.200 and then you lear that, you know, with the I 0:17:15.280 --> 0:17:18.480 d FA changes, that has heard Facebook's at targeting. So 0:17:18.480 --> 0:17:22.040 there are multiple things that play here, But structurally it 0:17:22.080 --> 0:17:26.040 feels like Facebook isn't the same company anymore that it 0:17:26.160 --> 0:17:28.439 used to be in terms of the margin trofile, Are 0:17:28.480 --> 0:17:33.080 you implying with focus on video that the that the 0:17:33.160 --> 0:17:37.360 Facebook should be focusing somewhere else besides video? It does 0:17:37.480 --> 0:17:42.800 seem like the competition from TikTok has really gotten a 0:17:42.800 --> 0:17:45.639 lot of the attention here. Yes, so it is a 0:17:45.760 --> 0:17:49.119 crowded market and you've got two scale players in the 0:17:49.160 --> 0:17:53.840 form of TikTok and YouTube. Well, uh, we know Facebook 0:17:53.880 --> 0:17:58.160 has the scale thriblliant users across its they may be 0:17:58.160 --> 0:18:01.720 better off focusing on their market place business or e 0:18:01.840 --> 0:18:05.520 commerce business. Yes, they have to fix engagement and they're 0:18:05.680 --> 0:18:09.040 investing a lot in metavers to do that. Nobody knows 0:18:09.119 --> 0:18:11.760 how that bet will play out, but we know it's 0:18:11.840 --> 0:18:15.119 losing ten billion dollars a year in terms of the 0:18:15.200 --> 0:18:18.800 operating loss, and so really right now it's a hope 0:18:18.800 --> 0:18:22.480 based strategy. If you're a Facebook investor, you're just hoping 0:18:22.520 --> 0:18:25.159 that they get it right with meta worse and you know, 0:18:25.280 --> 0:18:28.880 over time it fixes the engagement issues, but beyond that, 0:18:29.000 --> 0:18:33.000 the fundamentals of the business have deteriorated, and the pivot 0:18:33.040 --> 0:18:35.800 to videos isn't gonna help, you know, in terms of 0:18:36.560 --> 0:18:40.439 the margin profile, and they're way behind TikTok and YouTube 0:18:40.440 --> 0:18:43.080 at this point of time. Now, last minute here, Mandy, 0:18:43.040 --> 0:18:46.480 if it seemed like CEO Mark Zuckerberg was really leaning 0:18:46.520 --> 0:18:50.600 in asking investors to bear with them on the hope 0:18:50.600 --> 0:18:55.680 based strategy. Does that aboute more volatility for Facebook in 0:18:55.720 --> 0:18:59.159 the months to come? Well, so, not only Facebook, I 0:18:59.160 --> 0:19:02.960 think the entire higher social media space has been heard 0:19:03.080 --> 0:19:06.720 by the Apple's I d FA changes, and so I 0:19:06.760 --> 0:19:10.639 think Facebook is still in a better position to handle it. 0:19:10.720 --> 0:19:14.320 They have, you know, the resources to redesign their at 0:19:14.359 --> 0:19:17.560 targeting infrastructure, which is what they called that last night. 0:19:18.000 --> 0:19:22.600 The smaller ones like Snap, like Twitter, they I think 0:19:22.720 --> 0:19:26.040 more so Snap and Pinterest they're gonna be hurt more 0:19:26.119 --> 0:19:29.560 because guess what did they have to redesign their algorithms 0:19:29.640 --> 0:19:32.760 and at targeting that that will be a bigger burden 0:19:32.840 --> 0:19:36.080 in terms of operating costs compared to Facebook. Now we're 0:19:36.119 --> 0:19:39.120 certainly seeing the pain in the pre market with metal 0:19:39.160 --> 0:19:43.240 platforms shares now down nearly twenty one percent and a 0:19:43.400 --> 0:19:47.000 Snap shares down sixteen and a half percent. Twitter lower 0:19:47.119 --> 0:19:51.320 by eight percent. Rough morning to be a social media investor. 0:19:51.400 --> 0:19:54.960 Man Deep Sing of Bloomberg Intelligence, thank you for these insights. 0:19:55.359 --> 0:19:58.520 As for the broader market, Yeah, it's lower. SMP futures 0:19:58.560 --> 0:20:01.280 down fifty five. Nest that futures lower by a hundred 0:20:01.280 --> 0:20:04.320 thirty points, Dance that futures down three hundred fifty two. 0:20:07.160 --> 0:20:09.600 Bloomberg eleven three oh weather. Dense fog this morning. It 0:20:09.600 --> 0:20:12.240 will be rainy this afternoon, mid forties. Temperatures will fall 0:20:12.240 --> 0:20:14.480 through the day tomorrow, so the rain changes over into 0:20:14.480 --> 0:20:18.960 wintry mess by Saturday. Mostly sunny, upper twenties currently forty 0:20:18.960 --> 0:20:25.240 four degrees. Markets headlines and breaking news twenty four hours 0:20:25.240 --> 0:20:28.240 a day at Bloomberg dot Com, the Bloomberg Business at 0:20:28.320 --> 0:20:31.720 and at Bloomberg Quick Tape. This is a Bloomberg Business 0:20:31.800 --> 0:20:41.280 lass and I'm Karen Moscow and nasday. Futures are falling 0:20:41.400 --> 0:20:43.680 this morning. We got to the first word breaking news 0:20:43.760 --> 0:20:46.400 dance for today's morning call. And here's Bill Maloney. Bill, 0:20:46.440 --> 0:20:50.200 good morning, and good morning, Karen. That's right, us futures 0:20:50.240 --> 0:20:53.479 are plunging on the heels of those Facebook earnings. Dow 0:20:53.560 --> 0:20:55.680 futures try lead down a hundred and thirty six points 0:20:55.680 --> 0:20:57.840 has to be dropped fifty two. But like you said, 0:20:57.920 --> 0:21:01.840 Nasdick futures under pressure down three nine. The US ten 0:21:01.960 --> 0:21:04.840 yeld at one point seven eight percent, Gold is little change. 0:21:04.920 --> 0:21:07.840 Oil is trading lower, but Bitcoin is under pressure down 0:21:07.920 --> 0:21:11.360 six point two percent. Japan failed one percent overnight, while 0:21:11.400 --> 0:21:13.400 your PM markets are also in the red right now. 0:21:13.680 --> 0:21:15.879 And note that at seven forty five is the ECB 0:21:16.200 --> 0:21:18.919 rate decision back in the US. On the economic frontday 0:21:18.960 --> 0:21:22.000 eight thirty, initial jobs claims at ninety five Composite and 0:21:22.119 --> 0:21:24.600 Services p M, I S and at ten o'clock I S, 0:21:24.680 --> 0:21:28.639 M services, factory orders and durable goods orders. After develous night, 0:21:28.680 --> 0:21:31.320 Facebook gave a weaker than expected revenue forecast shares it 0:21:31.400 --> 0:21:34.840 down twenty one percent pre market, and Qualcom said ship 0:21:34.880 --> 0:21:39.159 shortages hampered efforts to push beyond smartphones. Regarding some of 0:21:39.200 --> 0:21:42.000 the earnings this morning, Mark beat estimates, ELI, Lily beat 0:21:42.040 --> 0:21:45.800 on revenue, and Honeywell miss estimates, trapping things up. Papal 0:21:45.960 --> 0:21:48.320 was cut to hold at easy Bank. C H. Robinson 0:21:48.400 --> 0:21:50.520 raised to buy it stifle and Excelon was cut the 0:21:50.600 --> 0:21:54.760 sector perform over red. RBC Live from the first breaking 0:21:54.800 --> 0:21:57.679 news Dostom, Bill Maloney care Alry Bill, thank you and 0:21:57.680 --> 0:22:00.000 to hear live breaking news over her. Bloomberg Time School 0:22:00.000 --> 0:22:02.520 logo on your terminal s a w U K and 0:22:02.520 --> 0:22:05.000 that's a Bloomberg Business Flash. Now here's Michael Barr with 0:22:05.080 --> 0:22:07.840 more on what's going on around the world. Michael Karen, 0:22:07.880 --> 0:22:10.879 thank you very much. Russia said it was destructive for 0:22:11.080 --> 0:22:14.359 President Biden to move additional troops to Europe and station 0:22:14.440 --> 0:22:19.400 more along NATO's eastern flank as the tension over Ukraine continues. Meanwhile, 0:22:19.440 --> 0:22:22.320 French President mccram will hold a third call with the 0:22:22.400 --> 0:22:25.959 Vladimir Putin in less than a week. Authorities in northern 0:22:26.000 --> 0:22:28.800 California say one person is dead after a mass shooting 0:22:28.880 --> 0:22:33.919 last night on a Greyhound bus in Orville. Suspect was arrested. 0:22:34.359 --> 0:22:37.160 In the NBA, the nixt and Nets lost, the Celtics 0:22:37.160 --> 0:22:41.320 and Wizards won. In the NHL, the Islanders and Capitals lost. 0:22:41.640 --> 0:22:44.560 Global News twenty four hours a day on air and 0:22:44.800 --> 0:22:48.720 on Bloomberg Quicktake, powered by more than twenty seven journalists 0:22:48.720 --> 0:22:51.639 and analysts. More than a hundred twenty countries. I'm Michael Barr. 0:22:51.680 --> 0:22:56.080 This is Bloomberg. The following commentary is from Bloomberg Opinion 0:22:56.920 --> 0:23:00.000 Foreign Affairs. I'm Jonathan Bernstein, the columnist for Bloomberg Opinion. 0:23:00.040 --> 0:23:04.040 In will developments abroad in Iran, for example, become campaign 0:23:04.040 --> 0:23:07.800 issues and effect the outcomes of the elections, Hardly anyone 0:23:07.800 --> 0:23:09.960 will change their vote regardless of what happens with, say, 0:23:09.960 --> 0:23:13.560 the Iran Deal. There's little evidence that international political events, 0:23:13.600 --> 0:23:16.000