WEBVTT - Amazon Surges While Apple Drops; Boeing Strike Deal

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Good morning.

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<v Speaker 1>I'm John Tucker and I'm Karen Moscow. Here are the

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<v Speaker 1>stories we're following today.

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<v Speaker 2>Karen, let's begin with mixed results from high tech. Shares

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<v Speaker 2>of Apple right now down one point one percent in

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<v Speaker 2>early trading. Apple says total sales in the December period

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<v Speaker 2>are going to rise by a percentage in a low

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<v Speaker 2>to middle single digits. Analysts have been projecting a seven

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<v Speaker 2>percent increase. Apple CEO Tim Cook says he was happy

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<v Speaker 2>with the recent quarter.

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<v Speaker 3>iPhone grew in every geographic segment, marking a new September

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<v Speaker 3>quarter revenue record for the category, and services set an

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<v Speaker 3>all time revenue record up twelve percent year over year.

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<v Speaker 3>We also set September quarter segment revenue records in the Americas, Europe,

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<v Speaker 3>and the rest of Asia Pacific, as well as in

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<v Speaker 3>a large number of countries.

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<v Speaker 2>Apples CEO Tim Cook also wing on the stock this warning.

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<v Speaker 2>The company posted a decline in China revenue last quarter,

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<v Speaker 2>falling short of estimates.

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<v Speaker 1>Well on the flip side, John, Amazon shares are at

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<v Speaker 1>more than five and a half percent. Total third quarter

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<v Speaker 1>revenue increased eleven percent to almost one hundred and fifty

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<v Speaker 1>nine billion dollars. Operating profit was seventeen point four billion,

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<v Speaker 1>demolishing the average estimate by two point of two point

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<v Speaker 1>seven billion dollars or by two point seven The company

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<v Speaker 1>has been spending heavily on the new data centers required

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<v Speaker 1>for the boom and demand for artificial intelligence services. CEO

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<v Speaker 1>Andy Jasse says investors will see that spending payoff in

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<v Speaker 1>the long run.

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<v Speaker 4>It is a really unusually large, maybe once in a

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<v Speaker 4>lifetime type of opportunity, and I think our customers, the business,

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<v Speaker 4>and our shareholders will feel good about this long term

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<v Speaker 4>that we're aggressively pursuing it.

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<v Speaker 1>And let's say, CEO Andy Jasse's years long push to

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<v Speaker 1>cut costs and streamline Amazon's logistics operation have paid off.

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<v Speaker 2>And here's an Intel They're of more than five percent

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<v Speaker 2>pre market. The chipmaker forecast fourth quarter revenue above estimates,

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<v Speaker 2>so the sparking optimism the company can win back some

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<v Speaker 2>of its lost market share. Intel, once the industry leader

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<v Speaker 2>in computer processors, is now working to preserve cash to

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<v Speaker 2>fund a turnaround plan. And we spoke with the Intel

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<v Speaker 2>CEO Pat Gelsinger.

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<v Speaker 5>We've taken these steps this quarter and restructuring and getting

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<v Speaker 5>our costs where they need to be.

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<v Speaker 6>Here we have the capacity to go on the journey.

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<v Speaker 2>In the prior quarter, the CEO Pat Gelsinger cut jobs,

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<v Speaker 2>slash spatting, and suspended investor payouts.

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<v Speaker 1>Well, Johnny. Earnings continue this morning with Big Oil on tap,

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<v Speaker 1>and today we hear from Exon Mobile. We get a

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<v Speaker 1>preview from Bloomberg's town.

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<v Speaker 6>Busby Exon Mobile. Investors will likely focus on the company's

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<v Speaker 6>ongoing production growth, especially in the Permian basin of West

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<v Speaker 6>Texas and New Mexico and in Guyana. Also in focus

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<v Speaker 6>recent cost cutting initiatives that are expected to give profitability

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<v Speaker 6>a boost despite slightly lower crewde prices. Bloomberg consensus calls

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<v Speaker 6>for revenue of eighty seven point two billion dollars and

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<v Speaker 6>adjusted earnings per share of a dollar eighty seven. Tom

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<v Speaker 6>Busby Bloomberg Radio.

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<v Speaker 2>Thanks Tom, and speaking of oil crude oil on the

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<v Speaker 2>rise this morning. This follows a report that Iran could

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<v Speaker 2>be preparing an attack on israel axios setting Two Israeli

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<v Speaker 2>sources say Tearan is planning a strike through militious that

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<v Speaker 2>it backs in Iraq and as we check Brant the

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<v Speaker 2>International benchmark up two point six percent. Seventy four is

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<v Speaker 2>seventy five of barrel, nine mixed crews seventy one to

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<v Speaker 2>twenty two of barrel. That's up a two point eight percent.

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<v Speaker 1>Well, John Boeing shares they're also on the rise. They're

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<v Speaker 1>up two point three percent. The planemaker and union leaders

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<v Speaker 1>representing thirty three thousand striking workers reached a tentative agreement

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<v Speaker 1>and a lengthy labor dispute that's been crippling the company's

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<v Speaker 1>commercial airplane manufacturing. The agreement would boost wages by thirty

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<v Speaker 1>eight percent over four years and give workers a twelve

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<v Speaker 1>thousand dollars signing bonus if approved. The union says members

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<v Speaker 1>will vote Monday on the new contract offer.

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<v Speaker 2>Speaking of jobs, Karen, this morning, we're going to get

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<v Speaker 2>the latest reading of the labor market with the October

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<v Speaker 2>jobs report. Let's get a preview right now from Bloomberg's

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<v Speaker 2>Michael McKee.

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<v Speaker 7>The payroll's number is something of a black hole for October.

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<v Speaker 7>The Boeing strike will take some workers out of the numbers,

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<v Speaker 7>as will Hurricanes Helene and Milton, but nobody knows how

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<v Speaker 7>many will fall out. Bloomberg Economics estimates it could be

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<v Speaker 7>as many as one hundred fifty thousand, which would produce

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<v Speaker 7>a negative payroll print for the first time since the pandemic.

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<v Speaker 7>At the other end of the spectrum, Steve Vershudo of

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<v Speaker 7>MIZZUO says one hundred and eighty thousand jobs, just over

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<v Speaker 7>the average of the past six months. ADP on Wednesday

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<v Speaker 7>reported finding two hundred and thirty three thousand new jobs.

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<v Speaker 7>The mystery will be answered at eight thirty Eastern time.

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<v Speaker 7>Michael McKee, Bloomberg Radio.

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<v Speaker 1>Orry, Michael, thank you now to the final days of

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<v Speaker 1>the twenty twenty four presidential election campaign. Vice President Kamala

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<v Speaker 1>Harris is aiming to shore up votes across crucial swing states,

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<v Speaker 1>with most polls indicating the race is a toss up. Yesterday,

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<v Speaker 1>in Nevada, Harris seized on Donald Trump's remark that he'd

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<v Speaker 1>protect women if elected, whether they like it or not.

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<v Speaker 8>It is not the first time he has told us

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<v Speaker 8>he does not believe women should have authority or agency

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<v Speaker 8>over their own bodies.

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<v Speaker 1>Kamala Harris further called Trump's comments about women very offensive.

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<v Speaker 1>The Vice president will rally tonight in Milwaukee, shall be

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<v Speaker 1>joined by several musical guests, including rapper Cardi b. It

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<v Speaker 1>comes after Harris secure the endorsement of basketball star Lebron

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<v Speaker 1>James yesterday.

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<v Speaker 2>Donald Trump also heads to Wisconsin tonight, his campaigns touting

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<v Speaker 2>a celebrity endorsement of its own. The YouTube star Jake

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<v Speaker 2>pauls it looks to drum up support from young voters.

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<v Speaker 2>The former president traveled across the Southwest yesterday attacking Harris

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<v Speaker 2>while encouraging supporters to vote on Tuesday.

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<v Speaker 9>You have to stand up and you have to tell

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<v Speaker 9>Kamala that you've had enough.

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<v Speaker 7>You can't take it anymore. She's horrible.

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<v Speaker 2>But despite those comments, Donald Trump's still sowing doubt in

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<v Speaker 2>the election results should he lose. He insists he's poised

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<v Speaker 2>for a runaway victory barring alleged voter fraud. And it

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<v Speaker 2>comes as Trump announced he's suing CBS Broadcasting, alleging the

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<v Speaker 2>network engaged in election interference when it aired different versions

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<v Speaker 2>of a sixty minutes interview with the Vice President Harris.

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<v Speaker 2>A network spokesperson says the lawsuit lacks merit.

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<v Speaker 1>Well John joined us for complete coverage of election results

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<v Speaker 1>Tuesday night. It All cakes off at five pm Eastern

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<v Speaker 1>with a special two hour edition of balance of power,

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<v Speaker 1>following by Cost to Coast to Bloomberg Team coverage at

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<v Speaker 1>seven pm. Get live election results and analysis with context

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<v Speaker 1>Tuesday night on Bloomberg Radio, Television and the Bloomberg Podcast

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<v Speaker 1>YouTube channel Time, and offer look at some of the

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<v Speaker 1>other stories making news in New York and around the world.

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<v Speaker 1>And for that we're joined by Bloomberg's Michael Barr.

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<v Speaker 5>Michael, Good morning, Good morning Karen. Words of warning for

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<v Speaker 5>North Korean troops training to fight for Russia inside Ukraine

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<v Speaker 5>the US as those troops will be treated the same

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<v Speaker 5>as Russians by the Ukrainian military. Secretary of State Antony

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<v Speaker 5>Blincoln says around eight thousand North Korean troops and now

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<v Speaker 5>station in the Kursk region of Russia.

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<v Speaker 10>Russia has been training DPRK soldiers in artillery ua these

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<v Speaker 10>basic infantry operations, including trench clearing, indicating that they fully

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<v Speaker 10>intend to use these forces in frontline operations.

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<v Speaker 5>Secretary Blincoln says they expect Russia to begin mobilizing these

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<v Speaker 5>troops in the coming days. Crews are searching for bodies

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<v Speaker 5>and stranded cars and sodden buildings as residents salvage what

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<v Speaker 5>they can from ruined homes following monstrous flash floods in

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<v Speaker 5>Spain that claimed at least one hundred and fifty eight lives.

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<v Speaker 5>The death toll could rise more as search efforts continue.

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<v Speaker 5>An unknown number remains missing. Since the twenty twenty election,

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<v Speaker 5>the Cybersecurity Infrastructure Security Agency has been doing everything possible

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<v Speaker 5>to reassure voters and correct any disinformation about the integrity

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<v Speaker 5>of the American vote. Accusations of tampering and ballot dumping

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<v Speaker 5>have made polling workers feel unsafe. CISA director Jen Easterly

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<v Speaker 5>says seeing election workers subjected to threats, harassment, and in

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<v Speaker 5>some cases forced to work behind bulletproof glass is very

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<v Speaker 5>discouraging to her.

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<v Speaker 11>They're not faceless bureaucrats. There are friends, there are neighbors.

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<v Speaker 11>We see them in the community every single day, and

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<v Speaker 11>they're not doing it for pay or for glory. They're

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<v Speaker 11>doing it because they believe in our democracy and they

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<v Speaker 11>deserve respect.

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<v Speaker 5>Meanwhile, police in Portland, Oregon and Vancouver, Washington, are still

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<v Speaker 5>looking for the suspect who set fires to voting drop boxes.

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<v Speaker 5>A jury has been seated to hear the subway chocol

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<v Speaker 5>case against Daniel Penny, with opening statements scheduled for today.

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<v Speaker 5>The jury is compromised of seven women and five men,

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<v Speaker 5>including four people of color. The defense use their challenges

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<v Speaker 5>to strike at least ten people of color. Daniel Penny,

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<v Speaker 5>a white marine veteran, pleads not guilty demandslaughter and criminally

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<v Speaker 5>negligent homicide. He put a black man acting erratically in

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<v Speaker 5>a New York City subway car into a fatal choke

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<v Speaker 5>hold last year. Witnesses say the man, Jordan Neely, had

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<v Speaker 5>been shouting and demanding money. Global news twenty four hours

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<v Speaker 5>a day and whenever you want it with the Bloomberg News. Now,

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<v Speaker 5>I'm Michael Barr. This is Bloomberg Karen.

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<v Speaker 1>Sorry, Michael Barr, thank you. It is time now for

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<v Speaker 1>the Bloomberg Sports Update, brought to you by Tri State Outye.

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<v Speaker 1>Here's John Stamshower. John, good morning, Good morning Karen.

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<v Speaker 12>Throughout October course, the New York baseball teams provided almost

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<v Speaker 12>daily excitement of both their seasons ended with losses to

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<v Speaker 12>the Dodgers. The NFL teams in New York not so good,

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<v Speaker 12>both with two and six records begin Week nine, but

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<v Speaker 12>on the final night of the month and met Live Stadium,

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<v Speaker 12>the Jets got a much needed win and in their

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<v Speaker 12>five game loser, three being in the Texans twenty one

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<v Speaker 12>to thirteen, with Aaron Rodgers throwing three second half touchdown passes.

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<v Speaker 12>The first two went to Garrett Wilson and both catches

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<v Speaker 12>were made with one hand. The second one and especially

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<v Speaker 12>highlight reel grab that came out of third and nineteen,

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<v Speaker 12>was originally ruled out of bounds with James Don replay.

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<v Speaker 12>Here was Wilson after the game.

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<v Speaker 9>First one is just a drag route and Aaron, you know,

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<v Speaker 9>comes to me late in progression and I got to

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<v Speaker 9>make a play and luckily it blew wide open. After

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<v Speaker 9>I caught the ball, Let's go to score a touchdown,

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<v Speaker 9>you know, the second one, third down, and he trusted

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<v Speaker 9>me to go and make a play again rights, he

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<v Speaker 9>comes to me, it's it's kind of a down that

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<v Speaker 9>no one expects to convert, and you know that can't

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<v Speaker 9>be our mindset. We're the only ones I thought we

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<v Speaker 9>were gonna convert.

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<v Speaker 12>There also the first Jets touchdown for Devonte Adams. He

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<v Speaker 12>came out of concussion protocol to score the final TV

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<v Speaker 12>first win for the new Jets coach Jeff Obrick. The

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<v Speaker 12>Houston qb CJ Stroud, just eleven of thirty two and

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<v Speaker 12>six Giants are back in met Life on Sunday to

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<v Speaker 12>play the six and two Washington Commanders big game of

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<v Speaker 12>the NFC North six and one Detroit at five and

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<v Speaker 12>two Green Bay. The Packers may have their QB Jordan

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<v Speaker 12>Love despite leaving last week's game with injured groen, he

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<v Speaker 12>was back at practice yesterday and Baltimore Lamar Jackson has

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<v Speaker 12>not practiced yet this week. Said to be nurse I

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<v Speaker 12>mean back in knee injuries. As for those Dodgers, they'll

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<v Speaker 12>be honored today in La at parade a ceremony at

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<v Speaker 12>Dodger Stadium. Freddie Freeman figures to get the biggest ovation,

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<v Speaker 12>had one of the greatest World Series ever to spite

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<v Speaker 12>an ankle injury, and now ESPN reporting Freeman's also playing

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<v Speaker 12>with a broken rib. World Series ratings on Fox HIA

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<v Speaker 12>since twenty seventeen averaging almost sixteen million viewers. Last year's

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<v Speaker 12>World Series drew an average of nine million. John Stashedward

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<v Speaker 12>Bloomberg Sports, Karen.

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<v Speaker 4>And John.

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<v Speaker 13>Coast to Coast on Bloomberg Radio, nationwide on Sirius XM,

0:11:32.760 --> 0:11:35.640
<v Speaker 13>and around the world on Bloomberg dot Com and the

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<v Speaker 13>Bloomberg Business app. This is Bloomberg Daybreak.

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<v Speaker 2>And I'm John Tucker in the Bloomberg Interactive Brokers studios

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<v Speaker 2>this morning, where it is coming up on five thirteen

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<v Speaker 2>on Wall Street, Apple and Amazon delivering earnings after the

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<v Speaker 2>close up regular trading and pre Marcus shares of Apple

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<v Speaker 2>they are down over one percent. Amazon shares are up

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<v Speaker 2>over five percent. Let's break down the results now with

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<v Speaker 2>Bloomberg's critic. Pretty good morning, thanks for being with us.

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<v Speaker 2>With Apple sales, China regulatory concerns, where do you want

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<v Speaker 2>to start?

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<v Speaker 8>Yeah, let's start with the China piece, because that seems

0:12:09.960 --> 0:12:13.760
<v Speaker 8>to be the biggest takeaway from the Apple story. Yes,

0:12:13.920 --> 0:12:16.760
<v Speaker 8>iPhone revenue grew in every single region, and that's kind

0:12:16.760 --> 0:12:19.320
<v Speaker 8>of the top line from Tim Cook's comments post earnings,

0:12:19.440 --> 0:12:21.720
<v Speaker 8>But it's that China story that really matters here simply

0:12:21.720 --> 0:12:24.760
<v Speaker 8>because that's their growth market. That's where Apple's trying to

0:12:24.760 --> 0:12:27.000
<v Speaker 8>not only secure some of their supply chains, which they

0:12:27.000 --> 0:12:29.000
<v Speaker 8>have partially moved to India, by the way, but that's

0:12:29.000 --> 0:12:31.560
<v Speaker 8>also where they're trying to access their consumer at a

0:12:31.559 --> 0:12:33.680
<v Speaker 8>time when they're also doing a little bit of the

0:12:33.720 --> 0:12:36.760
<v Speaker 8>catch up trade on AI. Those both of those concepts

0:12:36.760 --> 0:12:39.439
<v Speaker 8>are kind of married in what happened about six weeks,

0:12:39.760 --> 0:12:41.600
<v Speaker 8>well almost two months ago now I'm thinking about it.

0:12:41.760 --> 0:12:44.240
<v Speaker 8>When it came to the latest iPhone launch, I think

0:12:44.280 --> 0:12:47.600
<v Speaker 8>it was early September, September ninth, if memory serves me right,

0:12:47.920 --> 0:12:51.080
<v Speaker 8>when just twenty four hours later, Huawei launched their own

0:12:51.440 --> 0:12:53.600
<v Speaker 8>kind of latest smartphone as well, And I think that

0:12:53.720 --> 0:12:56.480
<v Speaker 8>speaks to this idea that the market share that Apple

0:12:56.559 --> 0:12:59.160
<v Speaker 8>was trying to gain in China has kind of been

0:12:59.280 --> 0:13:03.280
<v Speaker 8>cannibalized by the Whahwei rival and the Wahwei product, and

0:13:03.320 --> 0:13:06.360
<v Speaker 8>that's really what's eating into these margins. Nevertheless, it looks

0:13:06.400 --> 0:13:08.720
<v Speaker 8>like they are still selling their products. People are still

0:13:08.760 --> 0:13:11.040
<v Speaker 8>buying it, and for that reason, you're not seeing Apple

0:13:11.040 --> 0:13:13.360
<v Speaker 8>shares down this morning as much as perhaps expected.

0:13:13.960 --> 0:13:19.040
<v Speaker 2>The Apple intelligence features is that captured in the September quarter.

0:13:19.440 --> 0:13:20.360
<v Speaker 7>It's not quite yet.

0:13:20.400 --> 0:13:22.160
<v Speaker 8>And remember this is one of the things that has

0:13:22.200 --> 0:13:24.000
<v Speaker 8>been a little bit of a handicap for the stock,

0:13:24.120 --> 0:13:25.800
<v Speaker 8>or an overhang for the stock, and that when you're

0:13:25.800 --> 0:13:29.760
<v Speaker 8>comparing it to some of the other big tech names Microsoft, Amazon,

0:13:29.880 --> 0:13:32.800
<v Speaker 8>Alphabet even though they are very different businesses from Apple,

0:13:33.120 --> 0:13:36.040
<v Speaker 8>they are still trading higher on this kind of AI trade.

0:13:36.040 --> 0:13:39.480
<v Speaker 8>Apple has been the notable laggard simply because they haven't

0:13:39.520 --> 0:13:44.079
<v Speaker 8>been able to really kind of capitalize on that technology.

0:13:44.320 --> 0:13:47.400
<v Speaker 8>And they've only just now released that AI technology in

0:13:47.440 --> 0:13:49.280
<v Speaker 8>some of their latest updates for the iPhone. So it's

0:13:49.280 --> 0:13:51.160
<v Speaker 8>not going to show up in this latest quarter, but

0:13:51.240 --> 0:13:52.320
<v Speaker 8>it might in the next view.

0:13:52.720 --> 0:13:55.120
<v Speaker 2>Apple Services, you got to explain to me what that

0:13:55.320 --> 0:13:57.520
<v Speaker 2>is and how's it doing that end of the business.

0:13:57.760 --> 0:14:01.200
<v Speaker 8>Oh, I love this, so Apple Services personal obsession. And

0:14:01.280 --> 0:14:03.760
<v Speaker 8>the reason I say this, you've tapped into a rich area,

0:14:03.880 --> 0:14:07.559
<v Speaker 8>John Tucker. I say this because this was really crucial

0:14:07.679 --> 0:14:11.760
<v Speaker 8>data and crucial revenue for Apple during the pandemic. And

0:14:11.800 --> 0:14:14.160
<v Speaker 8>Apple Services is basically every time you go into the

0:14:14.200 --> 0:14:16.840
<v Speaker 8>Apple Store, you get your screen fixed, you get a

0:14:16.840 --> 0:14:19.480
<v Speaker 8>Apple update, you need some help from kind of the

0:14:19.840 --> 0:14:22.560
<v Speaker 8>genius bar that among several of the other kind of

0:14:22.560 --> 0:14:25.360
<v Speaker 8>app functions comes under the umbrella of Apple Services and

0:14:25.440 --> 0:14:29.200
<v Speaker 8>makes up about a third of their revenue. And during COVID,

0:14:29.280 --> 0:14:31.560
<v Speaker 8>that's the part that really tainked because nobody was going

0:14:31.880 --> 0:14:34.200
<v Speaker 8>into Apple. So from a macro signal, which is kind

0:14:34.200 --> 0:14:35.560
<v Speaker 8>of how I like to look at it, it's very

0:14:35.560 --> 0:14:38.640
<v Speaker 8>crucial for Apple's kind of mobility story because Apple, at

0:14:38.680 --> 0:14:40.600
<v Speaker 8>the end of the day, it's a hardware company, but

0:14:40.640 --> 0:14:41.520
<v Speaker 8>it wants to be more than that.

0:14:41.720 --> 0:14:44.480
<v Speaker 2>Okay, let's move on to Amazon. Now, of six percent

0:14:44.520 --> 0:14:46.640
<v Speaker 2>pre market I seem to be several pillars. You have

0:14:46.680 --> 0:14:51.040
<v Speaker 2>e commerce, advertising, cloud services. How did they deliver? Get

0:14:51.040 --> 0:14:52.400
<v Speaker 2>about a little bit more than.

0:14:52.360 --> 0:14:54.760
<v Speaker 8>A minute, let's talk about AWS. I think that's the

0:14:55.080 --> 0:14:58.600
<v Speaker 8>takeaway here. Remember I on Weber Amazon Web Services. This

0:14:58.720 --> 0:15:01.640
<v Speaker 8>is the number two player in the cloud space, second

0:15:01.680 --> 0:15:04.360
<v Speaker 8>to Microsoft's Asia. The top line you need to know,

0:15:04.560 --> 0:15:08.320
<v Speaker 8>and one number is thirty eight percent. That's the margin

0:15:08.400 --> 0:15:11.200
<v Speaker 8>of revenue that Amazon is making on their cloud unit,

0:15:11.480 --> 0:15:14.280
<v Speaker 8>and it is the highest record margin they've made going

0:15:14.320 --> 0:15:17.320
<v Speaker 8>all the way back to Data in twenty fourteen. By comparison,

0:15:18.000 --> 0:15:20.720
<v Speaker 8>Alphabet's cloud unit is trying to keep up. They're trying

0:15:20.760 --> 0:15:23.680
<v Speaker 8>to break into this and their margin is only seventeen percent.

0:15:23.720 --> 0:15:26.280
<v Speaker 8>So that's where Amazon is really wowing investors.

0:15:26.360 --> 0:15:29.440
<v Speaker 2>And they cut costs. It's not just cost cutting, it's

0:15:29.680 --> 0:15:33.240
<v Speaker 2>kind of an effort I guess, to reallocate resources real quick.

0:15:33.720 --> 0:15:34.560
<v Speaker 2>How did that work out?

0:15:34.960 --> 0:15:37.080
<v Speaker 8>They're still in the process where they have a logistics

0:15:37.120 --> 0:15:40.120
<v Speaker 8>unit that hasn't been doing as well, so they're in

0:15:40.160 --> 0:15:41.920
<v Speaker 8>the works of it, but the e commerce results coming

0:15:41.920 --> 0:15:43.360
<v Speaker 8>in stronger than expected as well.

0:15:43.440 --> 0:15:46.840
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