Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Good morning.
Speaker 1: I'm Nathan Hager and I'm Karen Moscow. Here are the
Speaker 1: stories we're following today.
Speaker 3: Karen.
Speaker 4: The drop in futures, particularly the Nasdaq futures, follows disappointing
Speaker 4: results from Meta Platforms. Shares of the Facebook parent are
Speaker 4: down thirteen percent in early trading. Meta forecast weaker than
Speaker 4: expected sales in the current quarter while targeting higher capital expenditures.
Speaker 4: Here's CEO Mark Zuckerberg on the company conference call.
Speaker 5: As we're scaling capex and energy expenses for AI, We'll
Speaker 5: continue focusing on operating the rest of our company efficiently
Speaker 5: but realistically. Even with shifting many of our existing resources
Speaker 5: to focus on AI, we'll still grow our investment envelope
Speaker 5: meaningfully before we make much revenue from some of these
Speaker 5: new products.
Speaker 4: CEO Mark Zuckerberg says Meta will spend billions of dollars
Speaker 4: more than expected this year, fueled by investments in artificial intelligence.
Speaker 1: Well, Nathan, the metamiss is sparking your sell off in
Speaker 1: some other high tech stocks this morning. Shares of Alphabet
Speaker 1: down about three percent. Microsoft is lower by almost two percent.
Speaker 1: Both companies report earnings this afternoon.
Speaker 4: And IBM shares are plunging as well care and they're
Speaker 4: down more than eight percent. That company's we consulting unit
Speaker 4: sales is disappointing investors, overshadowing IBM's acquisition of software firm Hashikorp.
Speaker 1: Well, Nathan, we also have a barrage of earnings overseas,
Speaker 1: particularly in the banking sector. Shares of barclayser up almost
Speaker 1: four percent. The British bank posted first quarter revenue that
Speaker 1: top analyst estimates. We spoke earlier with Chief executive Officer
Speaker 1: Csvan Kada Krishnan about the volatile rates market.
Speaker 6: It is very early. Our numbers are in line with
Speaker 6: what we said. We've seen deposit growth, we've seen lending
Speaker 6: growth in mortgages and in credit, and so we're pleased
Speaker 6: with that. But it's one quarter in a longer journey
Speaker 6: of three.
Speaker 1: Years in Barclays ceocs kind of. Krishnan says. Revenue tied
Speaker 1: to the company's investment banking businesses top estimates.
Speaker 4: Elsewhere in European banks, Karen Deutsche Bank saw seven percent
Speaker 4: jump in earnings from fixed income trading in the first quarter.
Speaker 4: That was more than analysts expected and better than most
Speaker 4: of the bank's biggest US rivals. Chief financial Officer James
Speaker 4: von Moltke hailed strong momentum in Deutsche's investment bank.
Speaker 7: We're very pleased with the results there, thirteen percent up
Speaker 7: year on year our fit business and also within that
Speaker 7: the financing business doing very well, so we see very
Speaker 7: strong momentum and client engagement there. We're also seeing resilience
Speaker 7: and growth across the other three businesses, and so it's
Speaker 7: nice to have a shining star, but seeing resilience on
Speaker 7: the more balance sheet sensitive businesses of our corporate bank
Speaker 7: and private bank is encouraging.
Speaker 4: Deutsche Bank CFO James von Molka added that he sees
Speaker 4: optimism and growth coming back to Europe.
Speaker 1: Well, Nathan, on this very busy morning, we also have
Speaker 1: a huge takeover to tell you about. BHP, the world's
Speaker 1: largest mining company, has proposed to takeover of Anglo American
Speaker 1: that values the smaller minor at almost thirty nine billion dollars.
Speaker 1: Bloomberg Commodities reporter Martin Ritchie says there's one primary reason
Speaker 1: for the tie up.
Speaker 8: This is all about copper.
Speaker 9: BHP is going to become the world's biggest copper miner,
Speaker 9: and that's because the miners are expecting a big wave
Speaker 9: of demand for copper, and we've seen over the past
Speaker 9: few years a number of quite big transactions and a
Speaker 9: lot of talk about how they want to gain exposure
Speaker 9: to copper. But this is the first really big deal
Speaker 9: in the sector.
Speaker 1: Bloomberg's Martin Richie says BHP's bid for Anglo could prompt
Speaker 1: other giants to make a move back.
Speaker 4: Here in the States, Karen, US chip making is getting
Speaker 4: another boost from the Biden administration. It is awarding Micron
Speaker 4: Technology up to thirteen point six billion dollars in grants
Speaker 4: and loans for new memory chip factories in the US.
Speaker 4: Micron has pledged about one hundred and twenty five billion
Speaker 4: into build four factories in New York State and a
Speaker 4: fifth in Idaho. President Biden will be in Syracuse for
Speaker 4: today's announcement and checking Micron shares in the early trade,
Speaker 4: they are little changed to the upside.
Speaker 1: Well, Nathan, Let's turn out to a case that could
Speaker 1: have major implications for the presidential race. Former President Donald
Speaker 1: Trump continues to insist that he is immune from criminal
Speaker 1: prosecution for trying to overturn the twenty twenty election. Now
Speaker 1: the Supreme Court will have arguments today on what exactly
Speaker 1: constitutes a presidential act. Bloomberg's Amy Morris has more from Washington.
Speaker 10: Donald Trump argues the charges are all based on actions
Speaker 10: he took in his official capacity as president. Prosecutors say
Speaker 10: nothing that Trump did in trying to remain in power
Speaker 10: despite his loss was conduct of the office. The justices
Speaker 10: have to try to draw a line between these views.
Speaker 10: There's not much guidance. An official act of the presidency
Speaker 10: isn't a term rooted in the Constitution nor criminal statute.
Speaker 10: And even if Donald Trump is entitled to some immunity
Speaker 10: for official acts, the federal government maintains there's no basis
Speaker 10: for his claim for immunity. Meanwhile, the clock is ticking,
Speaker 10: giving Special counsel Jack Smith only a narrow window to
Speaker 10: put the former president in front of a jury before
Speaker 10: voters go to the polls. November fifth, in Washington, Amy
Speaker 10: Moore as Bloomberg Radio.
Speaker 4: All right, Amy, thanks for all the Supreme Court. Here's
Speaker 4: those arguments. Former President Trump will be back before a
Speaker 4: Manhattan jury hearing more testimony in the criminal hush money trial.
Speaker 4: Bloomberg Law host June Grosso has the latest one that
Speaker 4: from New York.
Speaker 11: David Pecker, the former publisher of The National Inquirer, will
Speaker 11: be back on the witness stand today. On Tuesday, he
Speaker 11: told the jury about how he killed stories about Donald
Speaker 11: Trump's extramarital affairs to boost his twenty sixteen presidential campaign. Today,
Speaker 11: prosecutors will likely ask him about the hush money payments
Speaker 11: to Stormy Daniels. The judge is not yet ruled on
Speaker 11: the prosecution's motion to hold Trump in contempt for violating
Speaker 11: the gag order on commenting on witnesses in the case.
Speaker 11: In New York, June Grosso Bloomberg Radio.
Speaker 1: All right, June, thank you well. There is a new
Speaker 1: criminal case tied to the two twenty election. A grand
Speaker 1: juri in Arizona has issued felony counts against eighteen Republicans,
Speaker 1: including seven attorneys or aids to the Trump campaign, over
Speaker 1: their efforts to overturn President Biden's win in the state.
Speaker 1: The defendants include former Trump attorney Rudy Giuliani and ex
Speaker 1: White House Chief of Staff Mark Meadows. Former President Trump
Speaker 1: is not facing charges in this case, but he is
Speaker 1: named as an unindicted co conspirator.
Speaker 4: Meanwhile, Caring the Arizona House has voted to repeal that
Speaker 4: state's eighteen sixty four abortion law. Bloomberg Zed. Baxter has
Speaker 4: that story.
Speaker 12: The almost complete ban on abortions only to save the
Speaker 12: mother's life could go into effect as early as June
Speaker 12: eighth if it isn't repealed. Republicans have narrow majorities in
Speaker 12: both chambers, but recent uproars have obviously changed some minds,
Speaker 12: and so in the House. The State Senate could take
Speaker 12: up the repeal vote next week. Two Republicans already say
Speaker 12: they are supporting it. Governor Katie Hobbs has been urging
Speaker 12: the repeal. This add to the heat of the issue
Speaker 12: nationally politically. Ed Baxter, Bloomberg Radio.
Speaker 1: All right, ed, thanks, and it's time now for a
Speaker 1: look at some of the other stories making news in
Speaker 1: New York and around the world. There's Michael Barr Michael,
Speaker 1: good morning.
Speaker 3: Good morning, Karen, Police yourselves. That's from New York City
Speaker 3: Mayor Eric Adams to protesters on college campuses. Pro Palestinian
Speaker 3: demonstrators have been calling on universities to separate themselves from
Speaker 3: companies supporting Israel's war in Gaza. Police have been making arrests.
Speaker 3: Critics of the protests say Jewish students have become the
Speaker 3: victims of violent threats. Mayor Adams says that he's even
Speaker 3: seen some protesters express support for the militant group Hamas Fudemus.
Speaker 13: Speech is something that is constitutionally protected, and you can
Speaker 13: be correct constitutionally, but it's in moral.
Speaker 3: To see some of the terminologies that's been used. Mayor
Speaker 3: Adams told WABC, there is no room for hate in
Speaker 3: our city. Yesterday, House Speaker Mike Johnson visited Columbia and
Speaker 3: called on the university's president to resign, accusing Minot Schaffik
Speaker 3: of giving in to pro Palestinian protesters who have reportedly
Speaker 3: threatened Jewish students. Speaker Johnson told a booing crowd on
Speaker 3: the campus he supports free speech, but defends Jewish students
Speaker 3: and Israel.
Speaker 14: This is dangerous. This is not free expression, This is
Speaker 14: not First Amendment. They are threatening, intimidating, saying that they
Speaker 14: will take violence upon Jewish students. We met with Jewish
Speaker 14: students who are in fear. They can't come on campus,
Speaker 14: they can't study for their final exams.
Speaker 3: At the University of Southern California, police began detaining pro
Speaker 3: Palestinian student protesters without incident. The arrests occurred hours after
Speaker 3: police at the University of Texas and Austin aggressively took
Speaker 3: more than thirty demonstrators. This student says he thinks the
Speaker 3: police presence escalated the protests.
Speaker 15: This is a vault way further than it has because
Speaker 15: of the speech. I've talked to a few kids here
Speaker 15: my crimes, Like I was like, oh, I didn't know
Speaker 15: you were like, you know, you know, supporting Kalstad, and
Speaker 15: they're like, no, I just saw all the arrests and
Speaker 15: think this is crazy.
Speaker 3: The arrest came at the request of university officials and
Speaker 3: Texas Governor Greg Abbott. Representative Josh Gottheimer and other congressional
Speaker 3: members are seeking committee hearings on New York City's congestion
Speaker 3: pricing plan. The New Jersey Democrat is calling on a
Speaker 3: House committee to ask MTA Chief General Lieber to testify
Speaker 3: about the revenue expected to be collected from the new
Speaker 3: feed global news twenty four hours a day and whenever
Speaker 3: you want it with Bloomberg News. Now, I'm Michael Barr.
Speaker 3: This is Bloomberg.
Speaker 1: Karen Sor right, Michael Barr, thank you, and it's time
Speaker 1: now for the Bloomberg Sports Update with John stash Hour.
Speaker 13: John, Good morning, Good morning care. In the NFL draft,
Speaker 13: you used to always take place in New York, then
Speaker 13: they begin moving around the country. It starts tonight in
Speaker 13: Detroit with the Chicago Bears on the clock. Unless everyone
Speaker 13: is wrong.
Speaker 5: LT.
Speaker 3: Caleb Williams, who.
Speaker 13: Won the Heisman Trophy at USC Washington and New England
Speaker 13: had the second and third picks. Both also need a quarterback.
Speaker 13: Big question is will the Giants draft to QB, either
Speaker 13: with the sixth pick or after moving up, or will
Speaker 13: they take a wide receiver to help incumbent QB Daniel Jones.
Speaker 13: Jets pick tenth certainly need offensive help, maybe a tackle
Speaker 13: or if he's still there, Georgia tight end brock Bowers.
Speaker 13: There are mock drafts that don't have a single defensive
Speaker 13: player going in the top ten. At Stadium, Aaron Judge
Speaker 13: at the plate first inning, and it apparently had struck out,
Speaker 13: but a buck was called. The at bat continued.
Speaker 8: Judge back in the box.
Speaker 4: The pitch get in the air deep right field.
Speaker 16: Butler looking back at the wall.
Speaker 13: It is got a home run, Howard.
Speaker 11: Judge back in the batter's box.
Speaker 4: Extended life then he parks it into the port right field.
Speaker 13: On wfan later home run for Anthony Rizzo and Juan Soto.
Speaker 13: Yankees beat the A seven to three. Four game series
Speaker 13: ends tonight. The Mets road trip ended with an eight
Speaker 13: to two win at San Francisco. Francisco Lindor off to
Speaker 13: the miserable start, busted out pair of two run homers,
Speaker 13: upset in Boston. With the Celtics lost only four times
Speaker 13: all season, the Miami Heat, playing without the injured Jimmy Butler,
Speaker 13: drained in twenty three to three pointers and won one
Speaker 13: eleven one oh one, tying the series at one. Oklahoma City,
Speaker 13: who won Game one from New Orleans by two points,
Speaker 13: won Game two by thirty two. Nixon Sixers play Game
Speaker 13: three tonight in Philadelphia. The Nets formally introduced a new coach,
Speaker 13: Jordi Fernandez, has been assistant in Sacramento Stanley Cup playoffs.
Speaker 13: Three wins by road teams Boston four to two in Toronto, LA,
Speaker 13: five to four in overtime at Edmonton, and Vegas three
Speaker 13: to one at Dallas. The Stars top seeds in the West,
Speaker 13: but now trailing their series too nothing. John Stanshewer, Bloomberg
Speaker 13: Sports Karen and Ncoln.
Speaker 8: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
Speaker 8: and around the world on Bloomberg dot com and the
Speaker 8: Bloomberg Business app. This is Bloomberg Daybreak. Good morning.
Speaker 4: I'm Nathan Hager, Ametta miss is dragging tech stocks law
Speaker 4: or this morning. The Facebook and Instagram parent company did
Speaker 4: come in with a slight beat on revenue in the
Speaker 4: first quarter, but it's the outlook for sales in the
Speaker 4: current quarter and promise of big spending for the rest
Speaker 4: of this year that is raising new questions and perhaps
Speaker 4: some investor concerns about CEO Mark Zuckerberg's plans beyond the
Speaker 4: social network.
Speaker 10: For more.
Speaker 4: We're joined by Bloomberg's Alex web Alex good morning, not
Speaker 4: so good a morning if you are a meta investor.
Speaker 4: It does seem like this idea of spending up to
Speaker 4: forty billion dollars on campex for the rest of this
Speaker 4: year is really spooked investors.
Speaker 16: Sorry, excuse me, yes, absolutely, Look, there are two pieces
Speaker 16: of this, maybe three pieces that it's spent in the
Speaker 16: past year or so, telling investors that they are now
Speaker 16: on efficiently run company, they care about costs. The sort
Speaker 16: of growth at any expense is not their priority anymore.
Speaker 16: They're really looking at shareholder value. Then, not only are
Speaker 16: we seeing actually a slight change of tack on that
Speaker 16: they're pushing some earnings out in order to invest in
Speaker 16: artificial intelligence and AI infrastructure, but there's also on top
Speaker 16: of that a slight softening in revenue. The current quarter
Speaker 16: are in coming in a little bit below what the
Speaker 16: market had been expecting. So the signal they're giving the
Speaker 16: market is that actually were a slightly longer duration stock
Speaker 16: than you thought we were. In the current interest rate
Speaker 16: environment and in appetite for risk, that is not something
Speaker 16: that investors have a huge amount of appetite for, or
Speaker 16: at least not the same appetite that they might have
Speaker 16: had a few years ago.
Speaker 4: Certainly seeing that in terms of the action in the
Speaker 4: stock this morning, I mean, what do you make of
Speaker 4: Mark Zuckerberg's patients or call for patients this time around
Speaker 4: on AI investment? Of course, there's been so much focus
Speaker 4: on AI monetization as we head through this tech earnings quarter.
Speaker 16: I mean, there are a few different ways of looking
Speaker 16: at this. Is that the nature of the messaging, which
Speaker 16: is that it was pretty abrupt, right nobody had. Well,
Speaker 16: clearly the market hadn't seen this coming. He could have
Speaker 16: done a better job, perhaps from a communications perspective, warming
Speaker 16: the market up to this idea. There might be a
Speaker 16: little bit more expense than previously anticipated. Then there's also
Speaker 16: just the general corporate strategy piece, and it's very temptate.
Speaker 16: It's very tempting, presumably if you're running meta to look
Speaker 16: at the fact that you've got something like fifty billion
Speaker 16: dollars in free cash flow and say, well, I should
Speaker 16: spend that on growing now. That is what Facebook has
Speaker 16: been able to do for much of its existence, including
Speaker 16: as a public company over the past decade or so.
Speaker 16: We are now in a different sort of environment than
Speaker 16: the one in which Zuckerberg grew up in as a CEO.
Speaker 16: That is perhaps an adaptation that he perhaps isn't making
Speaker 16: as readily as some of his peers, or indeed some
Speaker 16: of his investors would like.
Speaker 4: Is there room in the ad business, the ad environment,
Speaker 4: for the ambitions that Mark Zuckerberg is laying out for
Speaker 4: this kind of capex?
Speaker 16: The ad market is clearly recovering. As when you know,
Speaker 16: when the economy recovers, marketing spends tend to increase. We
Speaker 16: have seen that with Facebook that they are growing at
Speaker 16: the fastest clip in you know, two or three years. Nonetheless,
Speaker 16: one of the big questions, big extant questions with AI
Speaker 16: is kind of how do you monetize it if you
Speaker 16: have an ad tech business. One of the things with
Speaker 16: say Google Search or with Facebook is you're not spear
Speaker 16: fishing right you go in, You just kind of you
Speaker 16: are fed lots of different content. Even in Google Search,
Speaker 16: you search for something and you might go all the
Speaker 16: way to the bottom of page or several pages deep
Speaker 16: to find the thing that you want. With AI, you're
Speaker 16: asking a very specific question and expecting to get a
Speaker 16: very specific answer. The business models for how then to
Speaker 16: monetize that are still really being worked out, So there
Speaker 16: is a lot of expense happening here. It might drive
Speaker 16: user engagement, we have yet to see entirely what the
Speaker 16: consumer facing business model is.
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