WEBVTT - Facebook Owner Meta Surges, Is Fed Done?

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 3>The Dow comes into today with gains for thirteen straight sessions,

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<v Speaker 3>and that is its longest winning streak since nineteen eighty seven.

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<v Speaker 3>Optimism around the FED and earnings are fueling the rally. Today,

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<v Speaker 3>we're seeing another tech company on the rise. Shares of

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<v Speaker 3>meta platforms are up eight percent. The Facebook, Instagram, and

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<v Speaker 3>thread zoner posted strong sales and gave a rosy outlook

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<v Speaker 3>on the earnings call. CEO Mark Zuckerberg discussed the push

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<v Speaker 3>to grow his latest social media platform.

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<v Speaker 4>I feel like we're getting to a good place on

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<v Speaker 4>that with Threads. There's still a lot of basic functionality

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<v Speaker 4>to build. Once we get to the point where it's

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<v Speaker 4>at hundreds of millions of people, assuming we can get there,

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<v Speaker 4>then we'll worry about monetization. But I mean, that's basically

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<v Speaker 4>the playbook that we're focused on.

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<v Speaker 3>Meta CEO Mark Zuckerberg says for now, Threads is ad free.

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<v Speaker 3>He won't add advertising until it's on a path to

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<v Speaker 3>one billion users. That's a milestone Twitter never accomplished.

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<v Speaker 2>Well, the other major story that we're following this morning,

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<v Speaker 2>Nathan Centers on the FED, the Central Bank raised interest

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<v Speaker 2>rates by a quarter percentage point, taking rates to the

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<v Speaker 2>highest level in twenty two years.

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<v Speaker 5>Now.

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<v Speaker 2>Chair J Powell says the FED has a tough balancing act.

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<v Speaker 6>It's really a question of how do you balance the

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<v Speaker 6>two risks, the risk of doing too much or doing

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<v Speaker 6>too little. And you know, I would say that, you know,

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<v Speaker 6>we're coming to a place where where there really are

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<v Speaker 6>risks on both sides. It's hard to say exactly whether

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<v Speaker 6>whether they're in balance or not. But as our stances

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<v Speaker 6>become more restrictive and inflation moderates, we do increasingly face

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<v Speaker 6>that risk.

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<v Speaker 2>And yesterday's rate increase was the eleventh hike in the

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<v Speaker 2>last sixteen months.

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<v Speaker 3>So now, Karen, the Fed's either done or very close

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<v Speaker 3>to it. That's the takeaway from former New York Fed

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<v Speaker 3>President and Bloomberg opinion columnist Bill Dudley.

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<v Speaker 5>Chair Palm made very clear in the press conference that

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<v Speaker 5>he doesn't see the need to go that much further.

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<v Speaker 1>You know, the very fact that it's sort.

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<v Speaker 5>Of meeting by meeting now tells you that.

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<v Speaker 7>He thinks that, you know, maybe there's one more rate hike,

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<v Speaker 7>maybe there's no more rate hikes as we go.

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<v Speaker 3>But higher rates could be here for a while. Former

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<v Speaker 3>New York Fed chief current Bloomberg Opinion columnist Bill Dudley

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<v Speaker 3>still thinks the Fed stays tighter for longer until inflation

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<v Speaker 3>comes down to two percent.

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<v Speaker 2>Well.

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<v Speaker 5>Interest rates are also in focus overseas.

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<v Speaker 2>Nathan Economists expect the European Central Bank to tighten policy

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<v Speaker 2>again today, and Bloomberg's Maria TODAYO is covering the ECB

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<v Speaker 2>decision from Frankfurt.

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<v Speaker 8>Now, the European Center Bank is expected to increase rates

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<v Speaker 8>by twenty five basis points taken at deposit rate to

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<v Speaker 8>three points seventy five percent, as it continues its most

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<v Speaker 8>aggressive hiking cycle to date in an effort to tame inflation. Now,

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<v Speaker 8>beyond the monetary policy decision itself, the focus will be

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<v Speaker 8>on the press conference and any hints we may get

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<v Speaker 8>from the head of the UCB, Christin Laguard in terms

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<v Speaker 8>of the future path for rates going into September. In Frankfurt,

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<v Speaker 8>Maria today at Bloomberg Daybreak.

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<v Speaker 3>Okay, Maria, thank you staying in Europe. We have another

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<v Speaker 3>onslaught of earnings out today and the results are lifting

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<v Speaker 3>stocks from England to Italy. Let's get the leadst from

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<v Speaker 3>Bloomberg's Ewan Parts in London.

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<v Speaker 9>Good morning, Nathan and Karen. It's the busiest day of

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<v Speaker 9>the busiest week for European earnings. Eighty three companies on

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<v Speaker 9>the stocks eight hundred reporting today. Barclay Shares one of

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<v Speaker 9>the big losers here in London. That's after it cut

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<v Speaker 9>its guidance for net interest margin at its retail bank,

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<v Speaker 9>signaling the boost from rising rates is coming to an end.

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<v Speaker 9>Francis's biggest bank, BNP Parabar, though beating estimates after tightly

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<v Speaker 9>controlling costs, it shares higher in Paris today. An energy

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<v Speaker 9>giant Shell pledging five and a half billion dollars in

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<v Speaker 9>share buybacks, even as profits full from last year's highs

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<v Speaker 9>and earnings beats from consumer goods giant Nesley and from

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<v Speaker 9>French retailer car For in London, I'm une Pot's boom bag.

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<v Speaker 5>Daybreak you and thank you well.

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<v Speaker 2>Back here in the US, there are new questions about

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<v Speaker 2>the health of Senate Majority leader Mitch McConnell. That's after

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<v Speaker 2>he throwze mid sentence during a news conference on Capitol

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<v Speaker 2>Hill yesterday. And Bloomberg's Amy Morris supports from our ninety

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<v Speaker 2>nine to one newsroom in Washington.

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<v Speaker 10>Senator McConnell abruptly stopped speaking froze in place for about

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<v Speaker 10>twenty seconds before being led away by Senator John Barresso

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<v Speaker 10>of Wyoming, who also happens to be a physician. Hours later,

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<v Speaker 10>McConnell left his office saying President Biden called a check

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<v Speaker 10>on him.

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<v Speaker 1>President check on me. I told him I got.

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<v Speaker 10>Sandbag, sandbag, referring to President Biden's recent fall when he

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<v Speaker 10>stumbled over a sand bag on a stage. McConnell did

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<v Speaker 10>not answer questions about whether he'd seen a doctor. This

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<v Speaker 10>comes just months after the eighty one year old McConnell's

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<v Speaker 10>suffered a concussion and broken rib in a fall at

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<v Speaker 10>a fundraiser in Washington. He was discharged from the hospital

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<v Speaker 10>on March twenty fifth, but did not return to the

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<v Speaker 10>Senate until mid April. In Washington, I Amy Morris Bloomberg Daybreak.

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<v Speaker 3>Thanks for that on the Senate Minority Leader Amy Meantime,

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<v Speaker 3>a heat wave continues to engulf large swaths of the US,

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<v Speaker 3>and now the nation's largest electrical grid is declaring an

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<v Speaker 3>emergency alert for today. Bloomberg's John Tucker has.

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<v Speaker 11>The latest PJM Interconnection has declared a Level one emergency

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<v Speaker 11>for the thirteen state Eastern US grid, calling on all

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<v Speaker 11>power plants to operate at full capacity. The alert means

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<v Speaker 11>it's concerned about being able to maintain adequate power reserves

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<v Speaker 11>today as consumers and businesses turn up air conditioners amid

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<v Speaker 11>the scorching heat. They also told consumers enrolled in demand

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<v Speaker 11>response programs to be ready to cut back on their

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<v Speaker 11>electricity usage. The alert just happens to come on the

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<v Speaker 11>same day President Biden is unveiling a series of new

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<v Speaker 11>actions to protect American workers from extreme heat conditions in

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<v Speaker 11>New York. I'm John Tucker Bloomberg dam.

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<v Speaker 3>Break, and now it's time to take a look at

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<v Speaker 3>some of the other stories making news in New York

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<v Speaker 3>and around the world with Bloomberg's Michael Barr.

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<v Speaker 1>Good morning, Michael, Good morning, Nathan. The investigation has begun

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<v Speaker 1>into a collapse in crane at a New York City

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<v Speaker 1>construction site. Yesterday's collapse in Manhattan send workers and residents

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<v Speaker 1>scrambling for cover at tenth Avenue and forty first Street.

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<v Speaker 1>The crane had been pouring concrete forty five stories up

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<v Speaker 1>when a fire broke out, sending the boom cracking into

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<v Speaker 1>another building before falling to the street. New York City

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<v Speaker 1>Fire First Deputy Commissioner James Pfeiffer and.

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<v Speaker 12>As the fire heats the cable, the cable weakens to

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<v Speaker 12>a point where the loses its strength and that's where

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<v Speaker 12>the collapse occurs.

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<v Speaker 1>Eleven people were injured, but fortunately no one was killed.

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<v Speaker 1>What's next now that the plea deal in Hunter Biden's

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<v Speaker 1>criminal case unraveled. During a court hearing in Delaware, a

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<v Speaker 1>federal judge raised concerns about the terms of the agreement.

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<v Speaker 1>President Biden's son was charged with two misdemeanor counts of

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<v Speaker 1>willful failure to pay federal income tax. He was also

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<v Speaker 1>set to accept the plea deal that included a third

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<v Speaker 1>charge of possession of a handgun by a drug user.

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<v Speaker 1>Press Secretary Karine Jean Pierre said Hunter Biden is a

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<v Speaker 1>private citizen and the White House will not be commenting

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<v Speaker 1>on the ongoing situation.

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<v Speaker 2>I think this was an independent investigation that was overseen

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<v Speaker 2>by the Department of Justice. As we've been very clear

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<v Speaker 2>they are independent.

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<v Speaker 13>We give them the.

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<v Speaker 5>Space to do to do their work.

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<v Speaker 2>We believe in the rule of law.

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<v Speaker 1>Hunter Biden had been expected to plead guilty after making

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<v Speaker 1>an agreement with the prosecutors, who were planning to recommend

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<v Speaker 1>two years of probation. Donald Trump says he wants to

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<v Speaker 1>see President Joe Biden impeached Bloomberg's head backs to.

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<v Speaker 12>Reports, Trump is following the lead of several others, including

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<v Speaker 12>Ron DeSantis saying earlier this week that the business dealings

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<v Speaker 12>of Hunter Biden and possible involvement with the President are

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<v Speaker 12>grounds for impeachment. While this started on the flanks of

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<v Speaker 12>the right, it has gained some footing running toward the middle,

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<v Speaker 12>especially with Trump allies, But sources say behind closed doors,

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<v Speaker 12>including House Speaker Kevin McCarthy, say that they really don't

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<v Speaker 12>know much about the President's involvement in his son's business dealings,

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<v Speaker 12>but with Trump jumping in, it now does change the dynamics.

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<v Speaker 12>In San Francisco. I'm at Baxter Bloomberg Daybreak told.

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<v Speaker 1>Cheats cost New Jersey more than one hundred and seventeen

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<v Speaker 1>million dollars last year, according to the Turnplank Authority and

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<v Speaker 1>Laware River Joint Toll Bridge Commission. It's a chronic problem

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<v Speaker 1>that officials say has become even worse since the pandemic.

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<v Speaker 1>Global News twenty four hours a day, powered by more

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<v Speaker 1>than twenty seven hundred journalist nailysts in over one hundred

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<v Speaker 1>and twenty countries. How Michaelabar, this is Bloomberg.

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<v Speaker 3>Nathan, Thank you, Michael. Time now for the Bloomberg Sports Update.

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<v Speaker 3>Here's John Stashout.

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<v Speaker 1>Thanks day.

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<v Speaker 7>Thank Carlos Redon was the Yankees prize free agent signing

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<v Speaker 7>of the offseason. Got a six year deal, but then

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<v Speaker 7>missed the first half of the season and.

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<v Speaker 1>Then struggled on the road.

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<v Speaker 7>Came into the Subway Series finale at the Stadium oh

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<v Speaker 7>to three with a seventy ra but Radon pitched into

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<v Speaker 7>the sixth. Then he gave up to just one run

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<v Speaker 7>four hits. Yankees beat the Mets three to one. Redon's

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<v Speaker 7>manager is Aaron Boom.

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<v Speaker 13>It's been a long road for him, you know, I

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<v Speaker 13>remember sitting up here when we signed him and how

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<v Speaker 13>meaningful it was to him. And then to have you know,

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<v Speaker 13>a couple setbacks there in spring training that slowed him,

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<v Speaker 13>you know, definitely wore on him and ate at him,

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<v Speaker 13>and he you know, he hated not being.

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<v Speaker 5>Out there with us.

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<v Speaker 7>Jose Kintana Gredonno left who signed in the offseason, was

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<v Speaker 7>then injured, took the loss. He's now zero and two

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<v Speaker 7>for the Mets, who hosts Washington tonight. The Yankees are

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<v Speaker 7>in Baltimore tomorrow. Sounds as if Aaron Judge is gonna

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<v Speaker 7>make his return from the injured tow. He's been out

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<v Speaker 7>since early June, and obviously he has been sorely missed. Also,

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<v Speaker 7>sounds like the Angels are not going to trade sho

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<v Speaker 7>Hey O'tani before Tuesday's deadline. They just acquired a pitcher,

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<v Speaker 7>Lucas Gilito from the White Sox contract extension for Baseball

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<v Speaker 7>Commissioner Rob Manfred. He's had the job since twenty fifteen,

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<v Speaker 7>and he'll now have it through at least twenty twenty

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<v Speaker 7>nine Women's World Cup in New Zealand, a rematch of

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<v Speaker 7>the twenty nineteen Cup final that the US one. They

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<v Speaker 7>trailed until a Lindsay Horan had her sixtieth minute game

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<v Speaker 7>ended one to one, both teams likely to advance. When

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<v Speaker 7>the Jets got Aaron Rodgers, they got his contract from

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<v Speaker 7>Green Bay, owed him one hundred and ten million dollars

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<v Speaker 7>that would have put them in salar. Rodgers and the

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<v Speaker 7>Jets have agreed to restructure the deal, and Rodrews has

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<v Speaker 7>agreed to take less money. Andrew Thomas getting a lot more.

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<v Speaker 7>The Giants Pro Bowl Tackle just got a five year

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<v Speaker 7>extension hundreds seventeen million, sixty seven million, Ganante, John Stashellward.

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<v Speaker 1>Bloomberg Sports.

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<v Speaker 14>From coast to coast, from New York to San Francisco,

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<v Speaker 14>Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg

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<v Speaker 14>Business app, and Bloomberg dot Com.

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<v Speaker 3>This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. It

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<v Speaker 3>is a big beat for a big name in tech.

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<v Speaker 3>We are watching shares of Meta Platforms surge in the

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<v Speaker 3>pre market after revenues and the sales forecast for the

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<v Speaker 3>current quarter came in better than expected. Is Mark Zuckerberg's

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<v Speaker 3>year of efficiency starting to pay off at the Facebook

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<v Speaker 3>parent company? Let's get reaction from someone who has been

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<v Speaker 3>very bullish on the broader tech story for quite some time.

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<v Speaker 3>Dan Ives is with us this morning, senior equity research

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<v Speaker 3>analyst at Webbush Securities. Dan, It's good to speak with

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<v Speaker 3>you again. Is this about the cost cutting that we've

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<v Speaker 3>seen at meta platforms? Or does this say something about

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<v Speaker 3>a better economic picture going forward for tech.

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<v Speaker 15>Yeah, Nathan, this is not just a vish. This is

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<v Speaker 15>actually digital advertising that's starting to ramp back up to

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<v Speaker 15>double digit growth. They should have had Rocky two movie

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<v Speaker 15>playing in the background during that conference call, because this

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<v Speaker 15>is a Rocky bout bolet. Comeback for Zuckerberg and Facebook

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<v Speaker 15>just a huge not just for FASA but also for

0:11:18.600 --> 0:11:22.600
<v Speaker 15>big tech in terms of digital advertising. Comeback a huge print.

0:11:23.440 --> 0:11:26.680
<v Speaker 3>Yeah, we know how meta platforms has been pretty beaten

0:11:26.800 --> 0:11:29.120
<v Speaker 3>down in the last several quarters.

0:11:29.160 --> 0:11:29.439
<v Speaker 1>Here.

0:11:29.559 --> 0:11:31.880
<v Speaker 3>Where do you see the momentum going when it comes

0:11:31.920 --> 0:11:36.520
<v Speaker 3>to digital advertising, particularly after what we saw from Alphabet,

0:11:36.640 --> 0:11:40.040
<v Speaker 3>the parent company of Google, and the better than expected

0:11:40.080 --> 0:11:43.239
<v Speaker 3>results on digital advertising. There is it going to be sustained?

0:11:44.440 --> 0:11:47.480
<v Speaker 15>I think right now there's an inflection point. You're seeing

0:11:47.480 --> 0:11:51.440
<v Speaker 15>an uptick digital advertising. We're seeing an uptick in cloud.

0:11:51.920 --> 0:11:55.319
<v Speaker 15>That's a green light for tech because that really shows

0:11:55.360 --> 0:11:59.720
<v Speaker 15>the best barometers Meta and Google seeing an uptick, and

0:11:59.760 --> 0:12:02.880
<v Speaker 15>that's important in terms of the broader tech market. I

0:12:02.920 --> 0:12:06.000
<v Speaker 15>also think for Meta they're focused now in AI as

0:12:06.040 --> 0:12:09.320
<v Speaker 15>that next step three legged stool, and you sort of

0:12:09.320 --> 0:12:12.120
<v Speaker 15>combine this all with that install based if you're a

0:12:12.120 --> 0:12:15.360
<v Speaker 15>bull right now, you're drinking your copee smiling because this

0:12:15.440 --> 0:12:16.920
<v Speaker 15>is going to be a great day for Meta.

0:12:17.400 --> 0:12:20.080
<v Speaker 3>Well, tell me a little bit more about how Meta

0:12:20.120 --> 0:12:23.599
<v Speaker 3>could use AI going forward here. Is it going to

0:12:23.679 --> 0:12:28.760
<v Speaker 3>be about development that Meta can do in the artificial

0:12:28.800 --> 0:12:30.920
<v Speaker 3>intelligence space or is it going to be about how

0:12:30.960 --> 0:12:33.720
<v Speaker 3>Meta uses AI as it already is.

0:12:34.760 --> 0:12:37.360
<v Speaker 15>It's really the latter. It's about how they're going to

0:12:37.640 --> 0:12:43.400
<v Speaker 15>focus more for advertisers, more targeting, more ability for the

0:12:43.480 --> 0:12:49.880
<v Speaker 15>consumer to get ultimately personalized messages, personalized data. That's how

0:12:49.920 --> 0:12:52.800
<v Speaker 15>they're ultimately going to look at this In terms of

0:12:52.960 --> 0:12:56.400
<v Speaker 15>monetization of AI. This is going to happen soon. They

0:12:56.520 --> 0:12:59.760
<v Speaker 15>expected the ironic thing. They're spending more on AI than

0:12:59.760 --> 0:13:03.360
<v Speaker 15>Meta first, and I think that name change or maybe

0:13:03.360 --> 0:13:04.320
<v Speaker 15>became well too soon.

0:13:04.800 --> 0:13:06.120
<v Speaker 1>Yeah, I was going to get to that.

0:13:06.160 --> 0:13:09.800
<v Speaker 3>Does this mean that the focus for Meta and for

0:13:09.880 --> 0:13:12.360
<v Speaker 3>investors in Meta is going to be more on sort

0:13:12.400 --> 0:13:15.640
<v Speaker 3>of those legacy for lack of a better word, products

0:13:15.640 --> 0:13:18.720
<v Speaker 3>that the meta has, the facebooks, the instagrams that now

0:13:19.000 --> 0:13:23.280
<v Speaker 3>threads as opposed to the metaverse. Bet that Even on

0:13:23.320 --> 0:13:25.840
<v Speaker 3>the call, Mark Zuckerberg was saying he still thinks it's

0:13:25.880 --> 0:13:27.480
<v Speaker 3>going to be the right bet.

0:13:28.720 --> 0:13:32.120
<v Speaker 15>Yeah, the hearts and lungs of this story are Facebook,

0:13:32.320 --> 0:13:36.199
<v Speaker 15>are Instagram. That's the core. That's what's happening with engagements,

0:13:36.280 --> 0:13:39.439
<v Speaker 15>that's the advertising uptick. And when you could AI, it's

0:13:39.440 --> 0:13:44.640
<v Speaker 15>about monetizement installed these metaverse. They'll talk the game, but

0:13:44.800 --> 0:13:48.360
<v Speaker 15>realistically that is now put in the back of that

0:13:48.600 --> 0:13:52.520
<v Speaker 15>closet the doors shut. It's next to that piece of

0:13:52.600 --> 0:13:54.440
<v Speaker 15>paper you haven't seen in ten years.

0:13:55.080 --> 0:13:56.679
<v Speaker 3>Is Threads still going to be a thing a year

0:13:56.760 --> 0:13:57.040
<v Speaker 3>from now?

0:13:57.160 --> 0:14:02.240
<v Speaker 15>Dan, I think Threads is really gonna significantly decline from

0:14:02.280 --> 0:14:05.080
<v Speaker 15>gonna get you're already seeing it. I think it sounded

0:14:05.120 --> 0:14:07.120
<v Speaker 15>great for forty eight hours. I don't view it as

0:14:07.160 --> 0:14:10.640
<v Speaker 15>a Twitter killer. It's additive for them, there is no risk.

0:14:11.400 --> 0:14:13.880
<v Speaker 15>But ultimately I think this is gonna be an ever

0:14:14.000 --> 0:14:17.480
<v Speaker 15>psychle uphill battle to have success on Threads. I think

0:14:17.559 --> 0:14:19.360
<v Speaker 15>many are seeing that over the last week.

0:14:19.920 --> 0:14:21.680
<v Speaker 3>Only got about a minute left here, But in the

0:14:21.760 --> 0:14:24.320
<v Speaker 3>time we have left, I got to ask you about Microsoft.

0:14:24.440 --> 0:14:26.960
<v Speaker 3>That's been kind of the outlier so far in tech,

0:14:27.040 --> 0:14:29.880
<v Speaker 3>with the shares falling nearly four percent yesterday on the

0:14:29.960 --> 0:14:33.480
<v Speaker 3>disappointing as your cloud business. Is Microsoft still a buye

0:14:33.560 --> 0:14:33.720
<v Speaker 3>for you.

0:14:35.040 --> 0:14:38.360
<v Speaker 15>I think that stock going down was a gift because

0:14:38.480 --> 0:14:40.640
<v Speaker 15>if you look at the cloud story of Microsoft, it

0:14:40.720 --> 0:14:44.080
<v Speaker 15>is just start and that's a typical playbook for Nadella.

0:14:44.280 --> 0:14:47.880
<v Speaker 15>Be conservative, out of the gate. Bears will take it down.

0:14:48.360 --> 0:14:50.800
<v Speaker 15>You look where it is in the next month, three months,

0:14:50.840 --> 0:14:52.440
<v Speaker 15>and I think this is a three and a half

0:14:52.520 --> 0:14:56.280
<v Speaker 15>trillion dollars mark ap No one is weeding more AI

0:14:56.520 --> 0:14:57.520
<v Speaker 15>than Cloud.

0:15:00.080 --> 0:15:00.120
<v Speaker 8>Is.

0:15:00.160 --> 0:15:03.560
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