WEBVTT - Meta Miss Sends Tech Stocks Falling, Trump Supreme Court Case

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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 Nathan Hager 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 3>Karen.

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<v Speaker 4>The drop in futures, particularly the Nasdaq futures, follows disappointing

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<v Speaker 4>results from Meta Platforms. Shares of the Facebook parent are

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<v Speaker 4>down thirteen percent in early trading. Meta forecast weaker than

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<v Speaker 4>expected sales in the current quarter while targeting higher capital expenditures.

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<v Speaker 4>Here's CEO Mark Zuckerberg on the company conference call.

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<v Speaker 5>As we're scaling capex and energy expenses for AI, We'll

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<v Speaker 5>continue focusing on operating the rest of our company efficiently

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<v Speaker 5>but realistically. Even with shifting many of our existing resources

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<v Speaker 5>to focus on AI, we'll still grow our investment envelope

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<v Speaker 5>meaningfully before we make much revenue from some of these

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<v Speaker 5>new products.

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<v Speaker 4>CEO Mark Zuckerberg says Meta will spend billions of dollars

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<v Speaker 4>more than expected this year, fueled by investments in artificial intelligence.

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<v Speaker 1>Well, Nathan, the metamiss is sparking your sell off in

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<v Speaker 1>some other high tech stocks this morning. Shares of Alphabet

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<v Speaker 1>down about three percent. Microsoft is lower by almost two percent.

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<v Speaker 1>Both companies report earnings this afternoon.

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<v Speaker 4>And IBM shares are plunging as well care and they're

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<v Speaker 4>down more than eight percent. That company's we consulting unit

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<v Speaker 4>sales is disappointing investors, overshadowing IBM's acquisition of software firm Hashikorp.

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<v Speaker 1>Well, Nathan, we also have a barrage of earnings overseas,

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<v Speaker 1>particularly in the banking sector. Shares of barclayser up almost

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<v Speaker 1>four percent. The British bank posted first quarter revenue that

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<v Speaker 1>top analyst estimates. We spoke earlier with Chief executive Officer

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<v Speaker 1>Csvan Kada Krishnan about the volatile rates market.

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<v Speaker 6>It is very early. Our numbers are in line with

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<v Speaker 6>what we said. We've seen deposit growth, we've seen lending

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<v Speaker 6>growth in mortgages and in credit, and so we're pleased

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<v Speaker 6>with that. But it's one quarter in a longer journey

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<v Speaker 6>of three.

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<v Speaker 1>Years in Barclays ceocs kind of. Krishnan says. Revenue tied

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<v Speaker 1>to the company's investment banking businesses top estimates.

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<v Speaker 4>Elsewhere in European banks, Karen Deutsche Bank saw seven percent

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<v Speaker 4>jump in earnings from fixed income trading in the first quarter.

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<v Speaker 4>That was more than analysts expected and better than most

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<v Speaker 4>of the bank's biggest US rivals. Chief financial Officer James

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<v Speaker 4>von Moltke hailed strong momentum in Deutsche's investment bank.

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<v Speaker 7>We're very pleased with the results there, thirteen percent up

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<v Speaker 7>year on year our fit business and also within that

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<v Speaker 7>the financing business doing very well, so we see very

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<v Speaker 7>strong momentum and client engagement there. We're also seeing resilience

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<v Speaker 7>and growth across the other three businesses, and so it's

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<v Speaker 7>nice to have a shining star, but seeing resilience on

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<v Speaker 7>the more balance sheet sensitive businesses of our corporate bank

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<v Speaker 7>and private bank is encouraging.

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<v Speaker 4>Deutsche Bank CFO James von Molka added that he sees

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<v Speaker 4>optimism and growth coming back to Europe.

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<v Speaker 1>Well, Nathan, on this very busy morning, we also have

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<v Speaker 1>a huge takeover to tell you about. BHP, the world's

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<v Speaker 1>largest mining company, has proposed to takeover of Anglo American

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<v Speaker 1>that values the smaller minor at almost thirty nine billion dollars.

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<v Speaker 1>Bloomberg Commodities reporter Martin Ritchie says there's one primary reason

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<v Speaker 1>for the tie up.

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<v Speaker 8>This is all about copper.

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<v Speaker 9>BHP is going to become the world's biggest copper miner,

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<v Speaker 9>and that's because the miners are expecting a big wave

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<v Speaker 9>of demand for copper, and we've seen over the past

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<v Speaker 9>few years a number of quite big transactions and a

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<v Speaker 9>lot of talk about how they want to gain exposure

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<v Speaker 9>to copper. But this is the first really big deal

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<v Speaker 9>in the sector.

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<v Speaker 1>Bloomberg's Martin Richie says BHP's bid for Anglo could prompt

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<v Speaker 1>other giants to make a move back.

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<v Speaker 4>Here in the States, Karen, US chip making is getting

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<v Speaker 4>another boost from the Biden administration. It is awarding Micron

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<v Speaker 4>Technology up to thirteen point six billion dollars in grants

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<v Speaker 4>and loans for new memory chip factories in the US.

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<v Speaker 4>Micron has pledged about one hundred and twenty five billion

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<v Speaker 4>into build four factories in New York State and a

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<v Speaker 4>fifth in Idaho. President Biden will be in Syracuse for

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<v Speaker 4>today's announcement and checking Micron shares in the early trade,

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<v Speaker 4>they are little changed to the upside.

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<v Speaker 1>Well, Nathan, Let's turn out to a case that could

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<v Speaker 1>have major implications for the presidential race. Former President Donald

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<v Speaker 1>Trump continues to insist that he is immune from criminal

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<v Speaker 1>prosecution for trying to overturn the twenty twenty election. Now

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<v Speaker 1>the Supreme Court will have arguments today on what exactly

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<v Speaker 1>constitutes a presidential act. Bloomberg's Amy Morris has more from Washington.

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<v Speaker 10>Donald Trump argues the charges are all based on actions

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<v Speaker 10>he took in his official capacity as president. Prosecutors say

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<v Speaker 10>nothing that Trump did in trying to remain in power

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<v Speaker 10>despite his loss was conduct of the office. The justices

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<v Speaker 10>have to try to draw a line between these views.

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<v Speaker 10>There's not much guidance. An official act of the presidency

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<v Speaker 10>isn't a term rooted in the Constitution nor criminal statute.

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<v Speaker 10>And even if Donald Trump is entitled to some immunity

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<v Speaker 10>for official acts, the federal government maintains there's no basis

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<v Speaker 10>for his claim for immunity. Meanwhile, the clock is ticking,

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<v Speaker 10>giving Special counsel Jack Smith only a narrow window to

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<v Speaker 10>put the former president in front of a jury before

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<v Speaker 10>voters go to the polls. November fifth, in Washington, Amy

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<v Speaker 10>Moore as Bloomberg Radio.

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<v Speaker 4>All right, Amy, thanks for all the Supreme Court. Here's

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<v Speaker 4>those arguments. Former President Trump will be back before a

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<v Speaker 4>Manhattan jury hearing more testimony in the criminal hush money trial.

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<v Speaker 4>Bloomberg Law host June Grosso has the latest one that

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<v Speaker 4>from New York.

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<v Speaker 11>David Pecker, the former publisher of The National Inquirer, will

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<v Speaker 11>be back on the witness stand today. On Tuesday, he

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<v Speaker 11>told the jury about how he killed stories about Donald

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<v Speaker 11>Trump's extramarital affairs to boost his twenty sixteen presidential campaign. Today,

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<v Speaker 11>prosecutors will likely ask him about the hush money payments

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<v Speaker 11>to Stormy Daniels. The judge is not yet ruled on

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<v Speaker 11>the prosecution's motion to hold Trump in contempt for violating

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<v Speaker 11>the gag order on commenting on witnesses in the case.

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<v Speaker 11>In New York, June Grosso Bloomberg Radio.

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<v Speaker 1>All right, June, thank you well. There is a new

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<v Speaker 1>criminal case tied to the two twenty election. A grand

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<v Speaker 1>juri in Arizona has issued felony counts against eighteen Republicans,

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<v Speaker 1>including seven attorneys or aids to the Trump campaign, over

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<v Speaker 1>their efforts to overturn President Biden's win in the state.

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<v Speaker 1>The defendants include former Trump attorney Rudy Giuliani and ex

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<v Speaker 1>White House Chief of Staff Mark Meadows. Former President Trump

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<v Speaker 1>is not facing charges in this case, but he is

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<v Speaker 1>named as an unindicted co conspirator.

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<v Speaker 4>Meanwhile, Caring the Arizona House has voted to repeal that

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<v Speaker 4>state's eighteen sixty four abortion law. Bloomberg Zed. Baxter has

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<v Speaker 4>that story.

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<v Speaker 12>The almost complete ban on abortions only to save the

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<v Speaker 12>mother's life could go into effect as early as June

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<v Speaker 12>eighth if it isn't repealed. Republicans have narrow majorities in

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<v Speaker 12>both chambers, but recent uproars have obviously changed some minds,

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<v Speaker 12>and so in the House. The State Senate could take

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<v Speaker 12>up the repeal vote next week. Two Republicans already say

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<v Speaker 12>they are supporting it. Governor Katie Hobbs has been urging

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<v Speaker 12>the repeal. This add to the heat of the issue

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<v Speaker 12>nationally politically. Ed Baxter, Bloomberg Radio.

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<v Speaker 1>All right, ed, thanks, and it's time now for a

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<v Speaker 1>look at some of the other stories making news in

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<v Speaker 1>New York and around the world. There's Michael Barr Michael,

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<v Speaker 1>good morning.

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<v Speaker 3>Good morning, Karen, Police yourselves. That's from New York City

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<v Speaker 3>Mayor Eric Adams to protesters on college campuses. Pro Palestinian

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<v Speaker 3>demonstrators have been calling on universities to separate themselves from

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<v Speaker 3>companies supporting Israel's war in Gaza. Police have been making arrests.

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<v Speaker 3>Critics of the protests say Jewish students have become the

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<v Speaker 3>victims of violent threats. Mayor Adams says that he's even

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<v Speaker 3>seen some protesters express support for the militant group Hamas Fudemus.

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<v Speaker 13>Speech is something that is constitutionally protected, and you can

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<v Speaker 13>be correct constitutionally, but it's in moral.

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<v Speaker 3>To see some of the terminologies that's been used. Mayor

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<v Speaker 3>Adams told WABC, there is no room for hate in

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<v Speaker 3>our city. Yesterday, House Speaker Mike Johnson visited Columbia and

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<v Speaker 3>called on the university's president to resign, accusing Minot Schaffik

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<v Speaker 3>of giving in to pro Palestinian protesters who have reportedly

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<v Speaker 3>threatened Jewish students. Speaker Johnson told a booing crowd on

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<v Speaker 3>the campus he supports free speech, but defends Jewish students

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<v Speaker 3>and Israel.

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<v Speaker 14>This is dangerous. This is not free expression, This is

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<v Speaker 14>not First Amendment. They are threatening, intimidating, saying that they

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<v Speaker 14>will take violence upon Jewish students. We met with Jewish

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<v Speaker 14>students who are in fear. They can't come on campus,

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<v Speaker 14>they can't study for their final exams.

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<v Speaker 3>At the University of Southern California, police began detaining pro

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<v Speaker 3>Palestinian student protesters without incident. The arrests occurred hours after

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<v Speaker 3>police at the University of Texas and Austin aggressively took

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<v Speaker 3>more than thirty demonstrators. This student says he thinks the

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<v Speaker 3>police presence escalated the protests.

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<v Speaker 15>This is a vault way further than it has because

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<v Speaker 15>of the speech. I've talked to a few kids here

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<v Speaker 15>my crimes, Like I was like, oh, I didn't know

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<v Speaker 15>you were like, you know, you know, supporting Kalstad, and

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<v Speaker 15>they're like, no, I just saw all the arrests and

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<v Speaker 15>think this is crazy.

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<v Speaker 3>The arrest came at the request of university officials and

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<v Speaker 3>Texas Governor Greg Abbott. Representative Josh Gottheimer and other congressional

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<v Speaker 3>members are seeking committee hearings on New York City's congestion

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<v Speaker 3>pricing plan. The New Jersey Democrat is calling on a

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<v Speaker 3>House committee to ask MTA Chief General Lieber to testify

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<v Speaker 3>about the revenue expected to be collected from the new

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<v Speaker 3>feed global news twenty four hours a day and whenever

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<v Speaker 3>you want it with Bloomberg News. Now, I'm Michael Barr.

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<v Speaker 3>This is Bloomberg.

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<v Speaker 1>Karen Sor right, Michael Barr, thank you, and it's time

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<v Speaker 1>now for the Bloomberg Sports Update with John stash Hour.

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<v Speaker 13>John, Good morning, Good morning care. In the NFL draft,

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<v Speaker 13>you used to always take place in New York, then

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<v Speaker 13>they begin moving around the country. It starts tonight in

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<v Speaker 13>Detroit with the Chicago Bears on the clock. Unless everyone

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<v Speaker 13>is wrong.

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<v Speaker 5>LT.

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<v Speaker 3>Caleb Williams, who.

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<v Speaker 13>Won the Heisman Trophy at USC Washington and New England

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<v Speaker 13>had the second and third picks. Both also need a quarterback.

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<v Speaker 13>Big question is will the Giants draft to QB, either

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<v Speaker 13>with the sixth pick or after moving up, or will

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<v Speaker 13>they take a wide receiver to help incumbent QB Daniel Jones.

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<v Speaker 13>Jets pick tenth certainly need offensive help, maybe a tackle

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<v Speaker 13>or if he's still there, Georgia tight end brock Bowers.

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<v Speaker 13>There are mock drafts that don't have a single defensive

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<v Speaker 13>player going in the top ten. At Stadium, Aaron Judge

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<v Speaker 13>at the plate first inning, and it apparently had struck out,

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<v Speaker 13>but a buck was called. The at bat continued.

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<v Speaker 8>Judge back in the box.

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<v Speaker 4>The pitch get in the air deep right field.

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<v Speaker 16>Butler looking back at the wall.

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<v Speaker 13>It is got a home run, Howard.

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<v Speaker 11>Judge back in the batter's box.

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<v Speaker 4>Extended life then he parks it into the port right field.

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<v Speaker 13>On wfan later home run for Anthony Rizzo and Juan Soto.

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<v Speaker 13>Yankees beat the A seven to three. Four game series

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<v Speaker 13>ends tonight. The Mets road trip ended with an eight

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<v Speaker 13>to two win at San Francisco. Francisco Lindor off to

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<v Speaker 13>the miserable start, busted out pair of two run homers,

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<v Speaker 13>upset in Boston. With the Celtics lost only four times

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<v Speaker 13>all season, the Miami Heat, playing without the injured Jimmy Butler,

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<v Speaker 13>drained in twenty three to three pointers and won one

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<v Speaker 13>eleven one oh one, tying the series at one. Oklahoma City,

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<v Speaker 13>who won Game one from New Orleans by two points,

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<v Speaker 13>won Game two by thirty two. Nixon Sixers play Game

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<v Speaker 13>three tonight in Philadelphia. The Nets formally introduced a new coach,

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<v Speaker 13>Jordi Fernandez, has been assistant in Sacramento Stanley Cup playoffs.

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<v Speaker 13>Three wins by road teams Boston four to two in Toronto, LA,

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<v Speaker 13>five to four in overtime at Edmonton, and Vegas three

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<v Speaker 13>to one at Dallas. The Stars top seeds in the West,

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<v Speaker 13>but now trailing their series too nothing. John Stanshewer, Bloomberg

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<v Speaker 13>Sports Karen and Ncoln.

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<v Speaker 8>Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 8>and around the world on Bloomberg dot com and the

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<v Speaker 8>Bloomberg Business app. This is Bloomberg Daybreak. Good morning.

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<v Speaker 4>I'm Nathan Hager, Ametta miss is dragging tech stocks law

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<v Speaker 4>or this morning. The Facebook and Instagram parent company did

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<v Speaker 4>come in with a slight beat on revenue in the

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<v Speaker 4>first quarter, but it's the outlook for sales in the

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<v Speaker 4>current quarter and promise of big spending for the rest

0:12:11.200 --> 0:12:13.880
<v Speaker 4>of this year that is raising new questions and perhaps

0:12:13.880 --> 0:12:17.480
<v Speaker 4>some investor concerns about CEO Mark Zuckerberg's plans beyond the

0:12:17.559 --> 0:12:18.400
<v Speaker 4>social network.

0:12:18.440 --> 0:12:18.880
<v Speaker 10>For more.

0:12:19.280 --> 0:12:22.720
<v Speaker 4>We're joined by Bloomberg's Alex web Alex good morning, not

0:12:22.800 --> 0:12:25.319
<v Speaker 4>so good a morning if you are a meta investor.

0:12:25.360 --> 0:12:27.720
<v Speaker 4>It does seem like this idea of spending up to

0:12:27.800 --> 0:12:30.160
<v Speaker 4>forty billion dollars on campex for the rest of this

0:12:30.240 --> 0:12:31.880
<v Speaker 4>year is really spooked investors.

0:12:33.880 --> 0:12:37.200
<v Speaker 16>Sorry, excuse me, yes, absolutely, Look, there are two pieces

0:12:37.200 --> 0:12:39.760
<v Speaker 16>of this, maybe three pieces that it's spent in the

0:12:39.760 --> 0:12:42.559
<v Speaker 16>past year or so, telling investors that they are now

0:12:42.600 --> 0:12:47.240
<v Speaker 16>on efficiently run company, they care about costs. The sort

0:12:47.240 --> 0:12:50.360
<v Speaker 16>of growth at any expense is not their priority anymore.

0:12:50.440 --> 0:12:53.360
<v Speaker 16>They're really looking at shareholder value. Then, not only are

0:12:53.360 --> 0:12:56.040
<v Speaker 16>we seeing actually a slight change of tack on that

0:12:56.120 --> 0:12:59.480
<v Speaker 16>they're pushing some earnings out in order to invest in

0:13:00.080 --> 0:13:03.640
<v Speaker 16>artificial intelligence and AI infrastructure, but there's also on top

0:13:03.679 --> 0:13:08.360
<v Speaker 16>of that a slight softening in revenue. The current quarter

0:13:08.400 --> 0:13:10.600
<v Speaker 16>are in coming in a little bit below what the

0:13:10.640 --> 0:13:13.880
<v Speaker 16>market had been expecting. So the signal they're giving the

0:13:13.920 --> 0:13:17.080
<v Speaker 16>market is that actually were a slightly longer duration stock

0:13:17.360 --> 0:13:20.400
<v Speaker 16>than you thought we were. In the current interest rate

0:13:20.480 --> 0:13:23.880
<v Speaker 16>environment and in appetite for risk, that is not something

0:13:23.920 --> 0:13:26.079
<v Speaker 16>that investors have a huge amount of appetite for, or

0:13:26.080 --> 0:13:27.719
<v Speaker 16>at least not the same appetite that they might have

0:13:27.760 --> 0:13:28.640
<v Speaker 16>had a few years ago.

0:13:29.040 --> 0:13:31.720
<v Speaker 4>Certainly seeing that in terms of the action in the

0:13:31.760 --> 0:13:33.959
<v Speaker 4>stock this morning, I mean, what do you make of

0:13:34.040 --> 0:13:38.319
<v Speaker 4>Mark Zuckerberg's patients or call for patients this time around

0:13:38.400 --> 0:13:41.520
<v Speaker 4>on AI investment? Of course, there's been so much focus

0:13:41.920 --> 0:13:46.559
<v Speaker 4>on AI monetization as we head through this tech earnings quarter.

0:13:47.800 --> 0:13:49.280
<v Speaker 16>I mean, there are a few different ways of looking

0:13:49.320 --> 0:13:51.320
<v Speaker 16>at this. Is that the nature of the messaging, which

0:13:51.360 --> 0:13:53.880
<v Speaker 16>is that it was pretty abrupt, right nobody had. Well,

0:13:54.040 --> 0:13:56.360
<v Speaker 16>clearly the market hadn't seen this coming. He could have

0:13:56.400 --> 0:14:00.520
<v Speaker 16>done a better job, perhaps from a communications perspective, warming

0:14:00.559 --> 0:14:02.040
<v Speaker 16>the market up to this idea. There might be a

0:14:02.080 --> 0:14:08.240
<v Speaker 16>little bit more expense than previously anticipated. Then there's also

0:14:08.400 --> 0:14:11.640
<v Speaker 16>just the general corporate strategy piece, and it's very temptate.

0:14:11.800 --> 0:14:15.640
<v Speaker 16>It's very tempting, presumably if you're running meta to look

0:14:15.679 --> 0:14:18.000
<v Speaker 16>at the fact that you've got something like fifty billion

0:14:18.040 --> 0:14:21.400
<v Speaker 16>dollars in free cash flow and say, well, I should

0:14:21.440 --> 0:14:23.480
<v Speaker 16>spend that on growing now. That is what Facebook has

0:14:23.520 --> 0:14:26.440
<v Speaker 16>been able to do for much of its existence, including

0:14:26.480 --> 0:14:28.480
<v Speaker 16>as a public company over the past decade or so.

0:14:29.280 --> 0:14:31.600
<v Speaker 16>We are now in a different sort of environment than

0:14:31.640 --> 0:14:34.920
<v Speaker 16>the one in which Zuckerberg grew up in as a CEO.

0:14:35.960 --> 0:14:41.000
<v Speaker 16>That is perhaps an adaptation that he perhaps isn't making

0:14:41.360 --> 0:14:44.120
<v Speaker 16>as readily as some of his peers, or indeed some

0:14:44.160 --> 0:14:45.600
<v Speaker 16>of his investors would like.

0:14:46.480 --> 0:14:50.560
<v Speaker 4>Is there room in the ad business, the ad environment,

0:14:51.000 --> 0:14:55.360
<v Speaker 4>for the ambitions that Mark Zuckerberg is laying out for

0:14:55.440 --> 0:14:56.760
<v Speaker 4>this kind of capex?

0:14:59.280 --> 0:15:03.320
<v Speaker 16>The ad market is clearly recovering. As when you know,

0:15:03.320 --> 0:15:06.440
<v Speaker 16>when the economy recovers, marketing spends tend to increase. We

0:15:06.520 --> 0:15:09.080
<v Speaker 16>have seen that with Facebook that they are growing at

0:15:09.120 --> 0:15:14.400
<v Speaker 16>the fastest clip in you know, two or three years. Nonetheless,

0:15:15.400 --> 0:15:18.440
<v Speaker 16>one of the big questions, big extant questions with AI

0:15:18.920 --> 0:15:21.280
<v Speaker 16>is kind of how do you monetize it if you

0:15:21.320 --> 0:15:23.320
<v Speaker 16>have an ad tech business. One of the things with

0:15:23.480 --> 0:15:26.600
<v Speaker 16>say Google Search or with Facebook is you're not spear

0:15:26.680 --> 0:15:29.280
<v Speaker 16>fishing right you go in, You just kind of you

0:15:29.360 --> 0:15:33.520
<v Speaker 16>are fed lots of different content. Even in Google Search,

0:15:33.560 --> 0:15:35.480
<v Speaker 16>you search for something and you might go all the

0:15:35.520 --> 0:15:37.640
<v Speaker 16>way to the bottom of page or several pages deep

0:15:37.680 --> 0:15:40.520
<v Speaker 16>to find the thing that you want. With AI, you're

0:15:40.560 --> 0:15:43.680
<v Speaker 16>asking a very specific question and expecting to get a

0:15:43.760 --> 0:15:46.920
<v Speaker 16>very specific answer. The business models for how then to

0:15:47.000 --> 0:15:50.480
<v Speaker 16>monetize that are still really being worked out, So there

0:15:50.560 --> 0:15:52.800
<v Speaker 16>is a lot of expense happening here. It might drive

0:15:52.920 --> 0:15:57.760
<v Speaker 16>user engagement, we have yet to see entirely what the

0:15:57.800 --> 0:15:59.280
<v Speaker 16>consumer facing business model is.

0:15:59.560 --> 0:16:02.640
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