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Speaker 1: From the Bloomberg Interactive Burger Studios. This is Bloomberg day

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Speaker 1: Break for Friday, May fifth. Coming up today, Too Big.

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Speaker 2: Nut to Pay. The FDIC plants to hit big banks

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Speaker 2: with feasts replenish its insurance fund.

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Speaker 1: The sell off in regional subsides as pack West and

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Speaker 1: Western Alliance rise.

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Speaker 2: Apple shares rally following solid earnings and.

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Speaker 1: A busy economic week. Concludes with the April Johns Report, The.

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Speaker 3: Depth of a homeless New York subway riter sparks calls

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Speaker 3: for Chargers plus Promboys leaders are convicted of seditious conspiracy.

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Speaker 3: For January sixth, I'm John Tucker, Mora Hint.

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Speaker 4: I'm John Stashdaron Sports. The Warriors blew out the Lakers.

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Speaker 4: The Mets shut out in Detroit. The Yankees begin a

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Speaker 4: big series at Tampa Bay tonight.

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Speaker 5: That's all straight Ahead on Bloomberg day Break, The business

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Speaker 5: news you need to starn your day in just one

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Speaker 5: fifteen minute podcast each morning on Apple Spotify. The Bloomberg

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Speaker 5: Business Appen everywhere you get your podcasts.

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Speaker 6: Good morning, I'm Nathan Hager.

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Speaker 1: And I'm Karen Moscow. Here are the stories we're following today.

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Speaker 2: The turmoil that has engulfed the banking sector, and now

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Speaker 2: the pain is hitting bigger banks. US regulators plan to

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Speaker 2: make the biggest lenders foot most of the bill for

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Speaker 2: replenishing the government's Deposit Insurance Fund. We get the story

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Speaker 2: from Bloomberg Stug Prisner.

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Speaker 7: We're told lenders with less than ten billion dollars in

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Speaker 7: assets wouldn't have to pay. FDIC data show more than

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Speaker 7: four thousand institutions were below that threshold at the end

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Speaker 7: of last year, and depending on the size of their

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Speaker 7: deposit portfolio, some banks with as much as fifty billion

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Speaker 7: dollars in assets could also avoid payments. Much of the

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Speaker 7: tab for refilling the fund will be paid by the

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Speaker 7: biggest banks. We are told the FDIC is planning to

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Speaker 7: release its proposal as soon as next week. The Deposit

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Speaker 7: Insurance Fund was partly depleted by the failures of Silicon

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Speaker 7: Valley Bank and Signature Bank in New York. I'm Doug Krisner,

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Speaker 7: Bloomberg Daybreak.

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Speaker 1: All right, Doug, thanks, So that move comes as regionals

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Speaker 1: continue to take a pounding on Wall. Straight Pack West

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Speaker 1: plunge another fifty one percent yesterday. It has now lost

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Speaker 1: almost three quarters of its value in just over a week,

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Speaker 1: Western Alliance tumbled thirty eight percent, and we get more

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Speaker 1: from Bloomberg's Valery title.

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Speaker 8: The lenders who are struggling now Pack West Western Alliance,

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Speaker 8: they don't have an uninsured deposit problem like SVB. SVB

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Speaker 8: had some ninety percent of uninsured deposits. It's the flip

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Speaker 8: side when it comes to pack West and Western Alliance.

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Speaker 8: Nearly seventy five percent of their deposits are insured, so

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Speaker 8: it's not necessarily about this uninsured deposit risk anymore. It

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Speaker 8: could be about just a broader profitability viability of these

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Speaker 8: regional banks that's coming into question.

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Speaker 1: And Bloomberg's Valerie title says both those stocks are now

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Speaker 1: recouping some of their losses. Checking shares of pack West

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Speaker 1: this morning, they're up almost fourteen percent, but Western Alliance

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Speaker 1: is up more than ten percent well.

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Speaker 2: Meantime, Karen, a top banking boss, is going to be

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Speaker 2: coming to China. According to Reuter's JP Morgan, Chain CEO

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Speaker 2: Jamie Diamond is going to visit the mainland later this month.

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Speaker 2: Diamond will attend conferences in Shanghai and hold internal and

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Speaker 2: external meetings. Writer says it'll be Diamond's first visit to

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Speaker 2: China in four years well.

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Speaker 1: Turning into corporate news now Nathan shares of Apple are

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Speaker 1: up to percent. The world's most valuable company had results

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Speaker 1: that beat estimates. iPhone sales actually fell two and a

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Speaker 1: half percent, but Apple had warned investors to expect a

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Speaker 1: drop of roughly twice as much. CEO Tim Cook says

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Speaker 1: China is a key market for the company.

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Speaker 9: We were pleased with how with how we did and

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Speaker 9: with the acceleration that we saw with the reopening, so

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Speaker 9: we feel good about it. It also China has a

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Speaker 9: lot of very good metrics.

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Speaker 1: Apple CEO Tim Cook announced plans for ninety billion dollars

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Speaker 1: in stock repurchases, the same level as last year. The

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Speaker 1: company also raised it's quarterly dividend four percent.

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Speaker 2: Meantime, Karen, we're learning this morning that a commodities trader

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Speaker 2: at mcquarie is taking home more money than Jamie Diamond

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Speaker 2: and other CEOs. Nick O'Cain, whose commodities trading business underpinned

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Speaker 2: Macquarie Group's record annual profit, is getting a fifty nine

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Speaker 2: percent raise to more than thirty eight million dollars. That's

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Speaker 2: more than his own CEO and Diamond, who earned more

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Speaker 2: than thirty four million. City Group CEO Jane Fraser made

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Speaker 2: twenty four and a half million dollars last year. That's

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Speaker 2: fourteen million less than Nick Ocain.

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Speaker 1: Well, It's a busy week on the economic front, and

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Speaker 1: it culminates today Nathan with the jobs report for April.

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Speaker 1: Economists say pay roll growth probably slowed as signs grow

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Speaker 1: that America's economy may slip into recession. We get more

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Speaker 1: from Bloomberg's Michael McKee.

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Speaker 10: A FED looking for a labor market loosening may be

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Speaker 10: disappointed once again. The consensus of economists surveyed by Bloomberg

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Speaker 10: is about double the level needed to absorb new entrants

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Speaker 10: into the labor force. Unemployment is only forecasts to tick

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Speaker 10: up a tenth higher, remaining near a historic low. The

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Speaker 10: rate of increase in average hourly earnings is forecast to flatten,

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Speaker 10: but remain higher than the level consistent with two percent inflation.

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Speaker 10: Policymakers are trying to slow demand in the economy by

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Speaker 10: slowing the labor market. The best FED officials can hope

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Speaker 10: for is they see some progress this month toward their goal.

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Speaker 10: Michael McKee, Bloomberg Daybreak.

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Speaker 2: All right, Mike, thanks recession warnings tied to the debt

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Speaker 2: ceiling are getting louder. In Washington. Senate Democrats are warning

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Speaker 2: that House Republicans could wreck the economy, either with sharp

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Speaker 2: spending cuts or a government default. This all comes ahead

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Speaker 2: of next week's key meeting between President Biden and congressional leaders.

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Speaker 2: Republican Congressman Brian's Style says his side is ready to talk.

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Speaker 11: Republicans are at the table. We're the only group that

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Speaker 11: has a bill that's passed that raises the debt ceiling.

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Speaker 11: The Democrats and the Senate have not passed any form

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Speaker 11: of a debt ceiling increase. And the reason I think

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Speaker 11: is because they don't have the votes to pass the

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Speaker 11: clean debt ceiling that they all claim they want.

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Speaker 2: A Republican Brian's Style of Wisconsin spoke with Kaylee Lines

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Speaker 2: on Bloomberg Sound on. Catch the show weekdays at one

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Speaker 2: pm Eastern on Bloomberg Radio, or listen on demand wherever

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Speaker 2: you get your podcasts.

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Speaker 1: Well, let's take a look now at some stocks on

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Speaker 1: the move this morning. Nathan shares of Lift are down

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Speaker 1: more than sixteen percent. The number two ride heiling company

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Speaker 1: is forecasting revenue that's lower than estimates that Lift also

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Speaker 1: reported fewer active riders on the platform that expected on.

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Speaker 2: The flip side Care, and shares of Carvana are surging

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Speaker 2: more than thirty five percent. The debt ridden auto retailer

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Speaker 2: says it expects to report a profit this quarter following

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Speaker 2: his string of losses.

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Speaker 1: And shares of Kon Enterprises up almost ten percent in

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Speaker 1: early trading, car Lakhon issued a dividend to investors after

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Speaker 1: coming under attack from short seller Hindenburg Research. The stock

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Speaker 1: has plunged more than forty percent since Hindenberg's report.

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Speaker 2: It's time now to take a look at some of

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Speaker 2: the other stories making news in New York and around

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Speaker 2: the world. For that, we're joined by Bloomberg's John Tucker.

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Speaker 2: Good morning John, Good morning Nathan.

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Speaker 3: There are more calls for an arrest in the depth

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Speaker 3: of the homeless man on the New York City subway.

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Speaker 3: Witnesses say thirty year old Jordan Neelios threatening others when

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Speaker 3: a marine veteran put them at a choke hold for

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Speaker 3: fifteen minutes. The veteran was questioned and released, but Neely's

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Speaker 3: day has now been ruled to homicide. Neely family attorney

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Speaker 3: Lennon Edwards.

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Speaker 12: The situation that was presented, was not one where he

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Speaker 12: was an inflicting physical harm on anyone. To the contrary,

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Speaker 12: he had physical harm inflicted on him.

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Speaker 3: Meanwhile, Governor Cathy Hoco called the chokehold in extreme response.

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Speaker 3: Neely is sent to have had a documented mental health history.

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Speaker 3: At more than forty arrests, four of five members of

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Speaker 3: the far right extremist group the Proud Boys have been

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Speaker 3: found guilty of numerous felonies for their part in the

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Speaker 3: January sixth capital attack. Federal prosecutors say the leaders of

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Speaker 3: the mob were responsible for assembling a fighting force that

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Speaker 3: considered themselves Donald Trump's army. The jury convicted four of

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Speaker 3: the five, including former one time leader Enrique Terrio, of

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Speaker 3: seditious conspiracy, plotting to overthrow the government in several other charges.

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Speaker 3: Carmen Hernandez, the defense attorney for Zachary Riels, as she

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Speaker 3: and her client planned to request a retrial and a

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Speaker 3: separate venue.

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Speaker 5: So we're very disappointed.

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Speaker 7: I believe he's the jury has spoken.

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Speaker 3: Well, being bolen. Attorney General Merrick Garland says the Justice

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Speaker 3: Department's work isn't finished.

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Speaker 5: Today's verdict makes clear that the Justice Department will do

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Speaker 5: everything in its power to defend the American people and

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Speaker 5: American democracy. A. G.

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Speaker 3: Garland says the department has secured more than six hundred

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Speaker 3: convictions for a wide range of criminal conduct. On January sixth,

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Speaker 3: it's a victory for a British singer, Ed Sheeran. A

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Speaker 3: jury in New York included Shearon didn't steal key components

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Speaker 3: of Martin Gay's classic nineteen seventies two Let's Get It

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Speaker 3: On when he created his hit song thinking Out Loud

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Speaker 3: and service alerts from New York City subway commuter trains

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Speaker 3: and bosses back on Twitter. A week after MTA officials

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Speaker 3: baulked at paying to provide the information in at about face,

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Speaker 3: Twitter said it's restored free access to a programming interface

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Speaker 3: for verified government and publicly owned services so they can

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Speaker 3: send the alerts. Global News twenty four hours a day,

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Speaker 3: powered by more than twenty seven hooded journalists and analysts

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Speaker 3: in more than one hundred twenty countries. I'm John Tucker.

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Speaker 3: This is Bloomberg, Nathan.

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Speaker 2: Thank you, John. Time now for our Bloomberg Sports update.

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Speaker 2: For that, we bring in John stash Hour.

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Speaker 4: All right, Nathan, this series between the Lakers and Warriors

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Speaker 4: builders Lebron James against Steph Curry, but they're not the

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Speaker 4: only stars on the floor. Anthony Davis scored thirty points

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Speaker 4: in LA's Game one victory. Clay Thompson scored thirty for

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Speaker 4: the Warriors in Game two. He made eight of eleven

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Speaker 4: three pointers. The Warriors won easily, won twenty seven to

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Speaker 4: one hundred two game threes tonight. The Knicks have their

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Speaker 4: Game three in Miami tomorrow afternoon. The Heat said to

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Speaker 4: be optimistic that Jimmy Butler will play. Sat out Game

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Speaker 4: two with an ankle injury. Milwaukee won the NBA Championship

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Speaker 4: just two years ago, had the league's best regular season,

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Speaker 4: but that first round loss to Miami has cost Mike

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Speaker 4: Budenholzer his job, fired after five years as coach of

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Speaker 4: the Buffs. The Devils played Game two at Carolina tonight.

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Speaker 4: Wins last night for Dallas and Florida. The eighth seeded

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Speaker 4: Panthers are up two games to none on Toronto. The

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Speaker 4: Detroit Tigers were just ten and thirteen when they welcomed

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Speaker 4: in the Mets, who they then swept. Mets had only

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Speaker 4: three hits at a two to nothing lost. Justin Verlander

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Speaker 4: took the loss at his Mets debut. Until yesterday, Verlander

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Speaker 4: had been an observer of his new team.

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Speaker 13: I feel like it hasn't quite matched up yet. Like

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Speaker 13: we've done everything well at certain points in time, but

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Speaker 13: we haven't really gone on that run where we start

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Speaker 13: pitching really well night in and night out and start

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Speaker 13: hitting really.

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Speaker 5: Well tonight in a night out.

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Speaker 14: It's you know.

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Speaker 13: And that's what happens to mean. Baseball's hundred sixt two games.

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Speaker 13: It's it's still early.

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Speaker 4: It's a five hundred. They're home tonight for Colorado Yankees

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Speaker 4: at Tampa Bay, with the raised just one again to

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Speaker 4: raise their record to twenty six and six, tied for

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Speaker 4: the fourth best thirty two games start in baseball history.

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Speaker 4: The Giants have a new four year deal with their

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Speaker 4: Pro Bowl defensive lineman Dexter Lawrence John Stashiewack.

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Speaker 2: Bloomberg Sports.

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Speaker 5: Live from coast to coast, from New York to San Francisco,

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Speaker 5: Boston to Washington, d C. Nationwide on Sirius Exam, Bloomberg

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Speaker 5: Business Appened, Bloomberg dot Com. This is Bloomberg Daybreak.

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Speaker 2: Good morning. I'm Nathan Hager, and we are wrapping up

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Speaker 2: a rocky earnings quarter for Big tech with some solid

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Speaker 2: results from Apple. The Iphonemaker came out with revenue that

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Speaker 2: beat Wall Street estimates. Even though sales fell two and

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Speaker 2: a half percent. That wasn't nearly as bad as Tim

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Speaker 2: Cook and company were warning investors to expect. So let's

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Speaker 2: get some post earnings analysis now from someone who has

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Speaker 2: covered Apple for a long time. Gene Monster is back

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Speaker 2: with us this morning, managing partner at Deepwater Asset Management.

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Speaker 2: Gene It's always great to speak with you about big tech,

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Speaker 2: particularly after we get the kind of results that are

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Speaker 2: giving investors a little bit of assurance this morning. What

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Speaker 2: are your thoughts after we got these results from Apple?

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Speaker 2: Is it a matter of setting expectations right?

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Speaker 14: Well, that's part of it, I think from the highest level.

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Speaker 14: You said it.

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Speaker 15: Well, they beat revenue by two percent, they beat EPs

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Speaker 15: by seven percent. I would put that as a classic

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Speaker 15: Apple type of quarter. The piece that was not classic

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Speaker 15: is they guided revenue for June down.

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Speaker 14: That's something that they typically don't do.

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Speaker 15: Let me just quick frame in that they're expecting revenue

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Speaker 15: to be down two percent for the June quarter versus

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Speaker 15: the street that was up two percent. So that's a

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Speaker 15: four x swing there. They did say, FX had a

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Speaker 15: four x percent impact. Some people back that out, some

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Speaker 15: people don't. But when you put it all together here,

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Speaker 15: there's something bigger going on when it comes to Apple.

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Speaker 15: And last quarter they missed the quarter. That's something rare.

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Speaker 15: It's happened three times in the past decade. This quarter

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Speaker 15: they guided down. So you've had essentially two quarters in

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Speaker 15: a row where there's been something that, under normal circumstances

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Speaker 15: would have a negative impact, the stock would be down

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Speaker 15: five percent something like that. We're not seeing that this morning.

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Speaker 15: We're seeing it up a couple percent. So, Nathan, what

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Speaker 15: I've been asking is what is going on here in

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Speaker 15: terms of what are we learning from? And I think

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Speaker 15: that the key takeaway here is that the active base

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Speaker 15: is growing, which means that their device flywheel, their ecosystem,

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Speaker 15: their franchise, call it what you may, that is working.

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Speaker 15: And let me just quick framing that because I think

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Speaker 15: this is an important factor that is going to become

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Speaker 15: even more important for Apple investors in the years to come.

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Speaker 14: And so they didn't break out the exact number.

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Speaker 15: They just said that their two billion active devices were

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Speaker 15: up year over year. Their products revenues, this is the

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Speaker 15: revenue from their harder. It was down five percent in March.

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Speaker 15: So they grew their overall active devices while products are down.

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Speaker 15: And the way they did that is that essentially used

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Speaker 15: iPhones to get refurbished and resold to people who previously

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Speaker 15: never owned one.

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Speaker 14: So that is a sign of a healthy base.

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Speaker 15: It's hard to grow a number at two billion, just

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Speaker 15: to ask Meta, it's a very different that's their DAU number,

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Speaker 15: their daily active user number. So to put it in

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Speaker 15: a nutshell, Nathan, is that these results were okay. The

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Speaker 15: guidance was muted, but their device, the dependency that customers

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Speaker 15: are having is increasing, and that is welcome to by investors.

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Speaker 15: And that is a big shift that's going on in

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Speaker 15: terms of how investors are viewing the Apple investment case.

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Speaker 15: This is becoming a consumer staple company. Shockingly, consumer staples

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Speaker 15: get huge multiples. They averaged twenty six times Apple's training

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Speaker 15: at twenty four times and growing a lot faster. So

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Speaker 15: big picture is the devices. Was the takeaway from the quarter.

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Speaker 2: Yeah, that was a really interesting point in the note

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Speaker 2: you put out yesterday about Apple's earnings. The transition to

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Speaker 2: a consumer staples company. I mean, we've talked in the

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Speaker 2: past about the brand loyalty that Apple customers have for

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Speaker 2: this company, Is it any more unusual than some other

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Speaker 2: brands might have when it comes to the loyalty of

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Speaker 2: their customer base.

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Speaker 15: Well, there are numbers from intern of like customer retentions

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Speaker 15: remarkable when you look at an iPhone ninety percent plus

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Speaker 15: customer retention. These are expensive devices, and so I don't

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Speaker 15: have comparables about what other that's probably on par with

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Speaker 15: Coca Cola's retention. Coca Cola trades at a hire multiple

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Speaker 15: than Apple. Coca Cola girls at three percent, Apple girls

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Speaker 15: at seven percent. So I think that the answer is

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Speaker 15: that this has Apple has incredible retention rates.

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Speaker 14: We all know that.

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Speaker 15: I think the piece that is changing here is that

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Speaker 15: we're seeing markets that have never stretched to own these

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Speaker 15: devices having similar retention rates. For example, Southeast Asia it

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Speaker 15: was a bright spot.

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Speaker 14: In the quarter.

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Speaker 15: They talked about India, Vietnam, South Korea, all these areas

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Speaker 15: that historically they haven't had that brand loyalty, They're starting

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Speaker 15: to emerge and those are large markets.

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Speaker 2: So when it comes to holding on to that brand loyalty,

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Speaker 2: g is that going to mean that Apple is going

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Speaker 2: to put or need to put even more of a

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Speaker 2: focus on getting newer, better customer devices out there, or

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Speaker 2: can it hang its hat on the services side of

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Speaker 2: what it's been putting out there, Apple TV plus, Apple Watch,

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Speaker 2: Apple Music, that sort of thing.

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Speaker 15: Yeah, now you know there's savings account, this high yield

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Speaker 15: savings account, you know these other productsity going onto. The

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Speaker 15: answer is that they need to stay ahead of the curb. Obviously,

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Speaker 15: they got to keep innovating from a peer like feature

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Speaker 15: performance based is the hardware, how it specs out relative

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Speaker 15: to like a Samsung device. They don't need to be

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Speaker 15: the best, and that's been the case for many years,

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Speaker 15: five plus years. Is they don't have to be cutting

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Speaker 15: edge type of sizzling speed.

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