Speaker 1: From the Bloomberg Interactive Burger Studios. This is Bloomberg day
Speaker 1: Break for Friday, May fifth. Coming up today, Too Big.
Speaker 2: Nut to Pay. The FDIC plants to hit big banks
Speaker 2: with feasts replenish its insurance fund.
Speaker 1: The sell off in regional subsides as pack West and
Speaker 1: Western Alliance rise.
Speaker 2: Apple shares rally following solid earnings and.
Speaker 1: A busy economic week. Concludes with the April Johns Report, The.
Speaker 3: Depth of a homeless New York subway riter sparks calls
Speaker 3: for Chargers plus Promboys leaders are convicted of seditious conspiracy.
Speaker 3: For January sixth, I'm John Tucker, Mora Hint.
Speaker 4: I'm John Stashdaron Sports. The Warriors blew out the Lakers.
Speaker 4: The Mets shut out in Detroit. The Yankees begin a
Speaker 4: big series at Tampa Bay tonight.
Speaker 5: That's all straight Ahead on Bloomberg day Break, The business
Speaker 5: news you need to starn your day in just one
Speaker 5: fifteen minute podcast each morning on Apple Spotify. The Bloomberg
Speaker 5: Business Appen everywhere you get your podcasts.
Speaker 6: Good morning, I'm Nathan Hager.
Speaker 1: And I'm Karen Moscow. Here are the stories we're following today.
Speaker 2: The turmoil that has engulfed the banking sector, and now
Speaker 2: the pain is hitting bigger banks. US regulators plan to
Speaker 2: make the biggest lenders foot most of the bill for
Speaker 2: replenishing the government's Deposit Insurance Fund. We get the story
Speaker 2: from Bloomberg Stug Prisner.
Speaker 7: We're told lenders with less than ten billion dollars in
Speaker 7: assets wouldn't have to pay. FDIC data show more than
Speaker 7: four thousand institutions were below that threshold at the end
Speaker 7: of last year, and depending on the size of their
Speaker 7: deposit portfolio, some banks with as much as fifty billion
Speaker 7: dollars in assets could also avoid payments. Much of the
Speaker 7: tab for refilling the fund will be paid by the
Speaker 7: biggest banks. We are told the FDIC is planning to
Speaker 7: release its proposal as soon as next week. The Deposit
Speaker 7: Insurance Fund was partly depleted by the failures of Silicon
Speaker 7: Valley Bank and Signature Bank in New York. I'm Doug Krisner,
Speaker 7: Bloomberg Daybreak.
Speaker 1: All right, Doug, thanks, So that move comes as regionals
Speaker 1: continue to take a pounding on Wall. Straight Pack West
Speaker 1: plunge another fifty one percent yesterday. It has now lost
Speaker 1: almost three quarters of its value in just over a week,
Speaker 1: Western Alliance tumbled thirty eight percent, and we get more
Speaker 1: from Bloomberg's Valery title.
Speaker 8: The lenders who are struggling now Pack West Western Alliance,
Speaker 8: they don't have an uninsured deposit problem like SVB. SVB
Speaker 8: had some ninety percent of uninsured deposits. It's the flip
Speaker 8: side when it comes to pack West and Western Alliance.
Speaker 8: Nearly seventy five percent of their deposits are insured, so
Speaker 8: it's not necessarily about this uninsured deposit risk anymore. It
Speaker 8: could be about just a broader profitability viability of these
Speaker 8: regional banks that's coming into question.
Speaker 1: And Bloomberg's Valerie title says both those stocks are now
Speaker 1: recouping some of their losses. Checking shares of pack West
Speaker 1: this morning, they're up almost fourteen percent, but Western Alliance
Speaker 1: is up more than ten percent well.
Speaker 2: Meantime, Karen, a top banking boss, is going to be
Speaker 2: coming to China. According to Reuter's JP Morgan, Chain CEO
Speaker 2: Jamie Diamond is going to visit the mainland later this month.
Speaker 2: Diamond will attend conferences in Shanghai and hold internal and
Speaker 2: external meetings. Writer says it'll be Diamond's first visit to
Speaker 2: China in four years well.
Speaker 1: Turning into corporate news now Nathan shares of Apple are
Speaker 1: up to percent. The world's most valuable company had results
Speaker 1: that beat estimates. iPhone sales actually fell two and a
Speaker 1: half percent, but Apple had warned investors to expect a
Speaker 1: drop of roughly twice as much. CEO Tim Cook says
Speaker 1: China is a key market for the company.
Speaker 9: We were pleased with how with how we did and
Speaker 9: with the acceleration that we saw with the reopening, so
Speaker 9: we feel good about it. It also China has a
Speaker 9: lot of very good metrics.
Speaker 1: Apple CEO Tim Cook announced plans for ninety billion dollars
Speaker 1: in stock repurchases, the same level as last year. The
Speaker 1: company also raised it's quarterly dividend four percent.
Speaker 2: Meantime, Karen, we're learning this morning that a commodities trader
Speaker 2: at mcquarie is taking home more money than Jamie Diamond
Speaker 2: and other CEOs. Nick O'Cain, whose commodities trading business underpinned
Speaker 2: Macquarie Group's record annual profit, is getting a fifty nine
Speaker 2: percent raise to more than thirty eight million dollars. That's
Speaker 2: more than his own CEO and Diamond, who earned more
Speaker 2: than thirty four million. City Group CEO Jane Fraser made
Speaker 2: twenty four and a half million dollars last year. That's
Speaker 2: fourteen million less than Nick Ocain.
Speaker 1: Well, It's a busy week on the economic front, and
Speaker 1: it culminates today Nathan with the jobs report for April.
Speaker 1: Economists say pay roll growth probably slowed as signs grow
Speaker 1: that America's economy may slip into recession. We get more
Speaker 1: from Bloomberg's Michael McKee.
Speaker 10: A FED looking for a labor market loosening may be
Speaker 10: disappointed once again. The consensus of economists surveyed by Bloomberg
Speaker 10: is about double the level needed to absorb new entrants
Speaker 10: into the labor force. Unemployment is only forecasts to tick
Speaker 10: up a tenth higher, remaining near a historic low. The
Speaker 10: rate of increase in average hourly earnings is forecast to flatten,
Speaker 10: but remain higher than the level consistent with two percent inflation.
Speaker 10: Policymakers are trying to slow demand in the economy by
Speaker 10: slowing the labor market. The best FED officials can hope
Speaker 10: for is they see some progress this month toward their goal.
Speaker 10: Michael McKee, Bloomberg Daybreak.
Speaker 2: All right, Mike, thanks recession warnings tied to the debt
Speaker 2: ceiling are getting louder. In Washington. Senate Democrats are warning
Speaker 2: that House Republicans could wreck the economy, either with sharp
Speaker 2: spending cuts or a government default. This all comes ahead
Speaker 2: of next week's key meeting between President Biden and congressional leaders.
Speaker 2: Republican Congressman Brian's Style says his side is ready to talk.
Speaker 11: Republicans are at the table. We're the only group that
Speaker 11: has a bill that's passed that raises the debt ceiling.
Speaker 11: The Democrats and the Senate have not passed any form
Speaker 11: of a debt ceiling increase. And the reason I think
Speaker 11: is because they don't have the votes to pass the
Speaker 11: clean debt ceiling that they all claim they want.
Speaker 2: A Republican Brian's Style of Wisconsin spoke with Kaylee Lines
Speaker 2: on Bloomberg Sound on. Catch the show weekdays at one
Speaker 2: pm Eastern on Bloomberg Radio, or listen on demand wherever
Speaker 2: you get your podcasts.
Speaker 1: Well, let's take a look now at some stocks on
Speaker 1: the move this morning. Nathan shares of Lift are down
Speaker 1: more than sixteen percent. The number two ride heiling company
Speaker 1: is forecasting revenue that's lower than estimates that Lift also
Speaker 1: reported fewer active riders on the platform that expected on.
Speaker 2: The flip side Care, and shares of Carvana are surging
Speaker 2: more than thirty five percent. The debt ridden auto retailer
Speaker 2: says it expects to report a profit this quarter following
Speaker 2: his string of losses.
Speaker 1: And shares of Kon Enterprises up almost ten percent in
Speaker 1: early trading, car Lakhon issued a dividend to investors after
Speaker 1: coming under attack from short seller Hindenburg Research. The stock
Speaker 1: has plunged more than forty percent since Hindenberg's report.
Speaker 2: It's time now to take a look at some of
Speaker 2: the other stories making news in New York and around
Speaker 2: the world. For that, we're joined by Bloomberg's John Tucker.
Speaker 2: Good morning John, Good morning Nathan.
Speaker 3: There are more calls for an arrest in the depth
Speaker 3: of the homeless man on the New York City subway.
Speaker 3: Witnesses say thirty year old Jordan Neelios threatening others when
Speaker 3: a marine veteran put them at a choke hold for
Speaker 3: fifteen minutes. The veteran was questioned and released, but Neely's
Speaker 3: day has now been ruled to homicide. Neely family attorney
Speaker 3: Lennon Edwards.
Speaker 12: The situation that was presented, was not one where he
Speaker 12: was an inflicting physical harm on anyone. To the contrary,
Speaker 12: he had physical harm inflicted on him.
Speaker 3: Meanwhile, Governor Cathy Hoco called the chokehold in extreme response.
Speaker 3: Neely is sent to have had a documented mental health history.
Speaker 3: At more than forty arrests, four of five members of
Speaker 3: the far right extremist group the Proud Boys have been
Speaker 3: found guilty of numerous felonies for their part in the
Speaker 3: January sixth capital attack. Federal prosecutors say the leaders of
Speaker 3: the mob were responsible for assembling a fighting force that
Speaker 3: considered themselves Donald Trump's army. The jury convicted four of
Speaker 3: the five, including former one time leader Enrique Terrio, of
Speaker 3: seditious conspiracy, plotting to overthrow the government in several other charges.
Speaker 3: Carmen Hernandez, the defense attorney for Zachary Riels, as she
Speaker 3: and her client planned to request a retrial and a
Speaker 3: separate venue.
Speaker 5: So we're very disappointed.
Speaker 7: I believe he's the jury has spoken.
Speaker 3: Well, being bolen. Attorney General Merrick Garland says the Justice
Speaker 3: Department's work isn't finished.
Speaker 5: Today's verdict makes clear that the Justice Department will do
Speaker 5: everything in its power to defend the American people and
Speaker 5: American democracy. A. G.
Speaker 3: Garland says the department has secured more than six hundred
Speaker 3: convictions for a wide range of criminal conduct. On January sixth,
Speaker 3: it's a victory for a British singer, Ed Sheeran. A
Speaker 3: jury in New York included Shearon didn't steal key components
Speaker 3: of Martin Gay's classic nineteen seventies two Let's Get It
Speaker 3: On when he created his hit song thinking Out Loud
Speaker 3: and service alerts from New York City subway commuter trains
Speaker 3: and bosses back on Twitter. A week after MTA officials
Speaker 3: baulked at paying to provide the information in at about face,
Speaker 3: Twitter said it's restored free access to a programming interface
Speaker 3: for verified government and publicly owned services so they can
Speaker 3: send the alerts. Global News twenty four hours a day,
Speaker 3: powered by more than twenty seven hooded journalists and analysts
Speaker 3: in more than one hundred twenty countries. I'm John Tucker.
Speaker 3: This is Bloomberg, Nathan.
Speaker 2: Thank you, John. Time now for our Bloomberg Sports update.
Speaker 2: For that, we bring in John stash Hour.
Speaker 4: All right, Nathan, this series between the Lakers and Warriors
Speaker 4: builders Lebron James against Steph Curry, but they're not the
Speaker 4: only stars on the floor. Anthony Davis scored thirty points
Speaker 4: in LA's Game one victory. Clay Thompson scored thirty for
Speaker 4: the Warriors in Game two. He made eight of eleven
Speaker 4: three pointers. The Warriors won easily, won twenty seven to
Speaker 4: one hundred two game threes tonight. The Knicks have their
Speaker 4: Game three in Miami tomorrow afternoon. The Heat said to
Speaker 4: be optimistic that Jimmy Butler will play. Sat out Game
Speaker 4: two with an ankle injury. Milwaukee won the NBA Championship
Speaker 4: just two years ago, had the league's best regular season,
Speaker 4: but that first round loss to Miami has cost Mike
Speaker 4: Budenholzer his job, fired after five years as coach of
Speaker 4: the Buffs. The Devils played Game two at Carolina tonight.
Speaker 4: Wins last night for Dallas and Florida. The eighth seeded
Speaker 4: Panthers are up two games to none on Toronto. The
Speaker 4: Detroit Tigers were just ten and thirteen when they welcomed
Speaker 4: in the Mets, who they then swept. Mets had only
Speaker 4: three hits at a two to nothing lost. Justin Verlander
Speaker 4: took the loss at his Mets debut. Until yesterday, Verlander
Speaker 4: had been an observer of his new team.
Speaker 13: I feel like it hasn't quite matched up yet. Like
Speaker 13: we've done everything well at certain points in time, but
Speaker 13: we haven't really gone on that run where we start
Speaker 13: pitching really well night in and night out and start
Speaker 13: hitting really.
Speaker 5: Well tonight in a night out.
Speaker 14: It's you know.
Speaker 13: And that's what happens to mean. Baseball's hundred sixt two games.
Speaker 13: It's it's still early.
Speaker 4: It's a five hundred. They're home tonight for Colorado Yankees
Speaker 4: at Tampa Bay, with the raised just one again to
Speaker 4: raise their record to twenty six and six, tied for
Speaker 4: the fourth best thirty two games start in baseball history.
Speaker 4: The Giants have a new four year deal with their
Speaker 4: Pro Bowl defensive lineman Dexter Lawrence John Stashiewack.
Speaker 2: Bloomberg Sports.
Speaker 5: Live from coast to coast, from New York to San Francisco,
Speaker 5: Boston to Washington, d C. Nationwide on Sirius Exam, Bloomberg
Speaker 5: Business Appened, Bloomberg dot Com. This is Bloomberg Daybreak.
Speaker 2: Good morning. I'm Nathan Hager, and we are wrapping up
Speaker 2: a rocky earnings quarter for Big tech with some solid
Speaker 2: results from Apple. The Iphonemaker came out with revenue that
Speaker 2: beat Wall Street estimates. Even though sales fell two and
Speaker 2: a half percent. That wasn't nearly as bad as Tim
Speaker 2: Cook and company were warning investors to expect. So let's
Speaker 2: get some post earnings analysis now from someone who has
Speaker 2: covered Apple for a long time. Gene Monster is back
Speaker 2: with us this morning, managing partner at Deepwater Asset Management.
Speaker 2: Gene It's always great to speak with you about big tech,
Speaker 2: particularly after we get the kind of results that are
Speaker 2: giving investors a little bit of assurance this morning. What
Speaker 2: are your thoughts after we got these results from Apple?
Speaker 2: Is it a matter of setting expectations right?
Speaker 14: Well, that's part of it, I think from the highest level.
Speaker 14: You said it.
Speaker 15: Well, they beat revenue by two percent, they beat EPs
Speaker 15: by seven percent. I would put that as a classic
Speaker 15: Apple type of quarter. The piece that was not classic
Speaker 15: is they guided revenue for June down.
Speaker 14: That's something that they typically don't do.
Speaker 15: Let me just quick frame in that they're expecting revenue
Speaker 15: to be down two percent for the June quarter versus
Speaker 15: the street that was up two percent. So that's a
Speaker 15: four x swing there. They did say, FX had a
Speaker 15: four x percent impact. Some people back that out, some
Speaker 15: people don't. But when you put it all together here,
Speaker 15: there's something bigger going on when it comes to Apple.
Speaker 15: And last quarter they missed the quarter. That's something rare.
Speaker 15: It's happened three times in the past decade. This quarter
Speaker 15: they guided down. So you've had essentially two quarters in
Speaker 15: a row where there's been something that, under normal circumstances
Speaker 15: would have a negative impact, the stock would be down
Speaker 15: five percent something like that. We're not seeing that this morning.
Speaker 15: We're seeing it up a couple percent. So, Nathan, what
Speaker 15: I've been asking is what is going on here in
Speaker 15: terms of what are we learning from? And I think
Speaker 15: that the key takeaway here is that the active base
Speaker 15: is growing, which means that their device flywheel, their ecosystem,
Speaker 15: their franchise, call it what you may, that is working.
Speaker 15: And let me just quick framing that because I think
Speaker 15: this is an important factor that is going to become
Speaker 15: even more important for Apple investors in the years to come.
Speaker 14: And so they didn't break out the exact number.
Speaker 15: They just said that their two billion active devices were
Speaker 15: up year over year. Their products revenues, this is the
Speaker 15: revenue from their harder. It was down five percent in March.
Speaker 15: So they grew their overall active devices while products are down.
Speaker 15: And the way they did that is that essentially used
Speaker 15: iPhones to get refurbished and resold to people who previously
Speaker 15: never owned one.
Speaker 14: So that is a sign of a healthy base.
Speaker 15: It's hard to grow a number at two billion, just
Speaker 15: to ask Meta, it's a very different that's their DAU number,
Speaker 15: their daily active user number. So to put it in
Speaker 15: a nutshell, Nathan, is that these results were okay. The
Speaker 15: guidance was muted, but their device, the dependency that customers
Speaker 15: are having is increasing, and that is welcome to by investors.
Speaker 15: And that is a big shift that's going on in
Speaker 15: terms of how investors are viewing the Apple investment case.
Speaker 15: This is becoming a consumer staple company. Shockingly, consumer staples
Speaker 15: get huge multiples. They averaged twenty six times Apple's training
Speaker 15: at twenty four times and growing a lot faster. So
Speaker 15: big picture is the devices. Was the takeaway from the quarter.
Speaker 2: Yeah, that was a really interesting point in the note
Speaker 2: you put out yesterday about Apple's earnings. The transition to
Speaker 2: a consumer staples company. I mean, we've talked in the
Speaker 2: past about the brand loyalty that Apple customers have for
Speaker 2: this company, Is it any more unusual than some other
Speaker 2: brands might have when it comes to the loyalty of
Speaker 2: their customer base.
Speaker 15: Well, there are numbers from intern of like customer retentions
Speaker 15: remarkable when you look at an iPhone ninety percent plus
Speaker 15: customer retention. These are expensive devices, and so I don't
Speaker 15: have comparables about what other that's probably on par with
Speaker 15: Coca Cola's retention. Coca Cola trades at a hire multiple
Speaker 15: than Apple. Coca Cola girls at three percent, Apple girls
Speaker 15: at seven percent. So I think that the answer is
Speaker 15: that this has Apple has incredible retention rates.
Speaker 14: We all know that.
Speaker 15: I think the piece that is changing here is that
Speaker 15: we're seeing markets that have never stretched to own these
Speaker 15: devices having similar retention rates. For example, Southeast Asia it
Speaker 15: was a bright spot.
Speaker 14: In the quarter.
Speaker 15: They talked about India, Vietnam, South Korea, all these areas
Speaker 15: that historically they haven't had that brand loyalty, They're starting
Speaker 15: to emerge and those are large markets.
Speaker 2: So when it comes to holding on to that brand loyalty,
Speaker 2: g is that going to mean that Apple is going
Speaker 2: to put or need to put even more of a
Speaker 2: focus on getting newer, better customer devices out there, or
Speaker 2: can it hang its hat on the services side of
Speaker 2: what it's been putting out there, Apple TV plus, Apple Watch,
Speaker 2: Apple Music, that sort of thing.
Speaker 15: Yeah, now you know there's savings account, this high yield
Speaker 15: savings account, you know these other productsity going onto. The
Speaker 15: answer is that they need to stay ahead of the curb. Obviously,
Speaker 15: they got to keep innovating from a peer like feature
Speaker 15: performance based is the hardware, how it specs out relative
Speaker 15: to like a Samsung device. They don't need to be
Speaker 15: the best, and that's been the case for many years,
Speaker 15: five plus years. Is they don't have to be cutting
Speaker 15: edge type of sizzling speed.
Speaker 6: This is Bloomberg Daybreak Today, your morning brief on the
Speaker 6: stories making news from Wall Street to Washington and beyond.
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