WEBVTT - Twitter Rebranding May Cost Billions; Microsoft Leads Earnings Parade

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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>We begin in Asia, where stocks surged overnight. China's CSI

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<v Speaker 3>three hundred rows nearly three percent. The Hangsing and Hong

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<v Speaker 3>Kong climbed four percent. The catalyst China's Politbureau signaling more

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<v Speaker 3>support for the economy. Bloomberg Daybreak Asia anchor Brian Curtis

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<v Speaker 3>as more from Hong Kong.

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<v Speaker 4>Policymakers are admitting that the recovery has sputtered because of

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<v Speaker 4>weak confidence. Confidence was mentioned multiple times. The Politburo statement

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<v Speaker 4>focuses on boosting consumption, helping private business, and carving out

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<v Speaker 4>a more supportive stance on the property sector. The cumulative

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<v Speaker 4>weight of so many policies is not lost on investors,

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<v Speaker 4>from rate cuts to triple our cuts, action to boost

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<v Speaker 4>household spending, construction, cars, tech, and more. But the key

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<v Speaker 4>now will be the actual measures to implement the broader

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<v Speaker 4>policy that's still to come. In Hong Kong and Curtis

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<v Speaker 4>Bloomberg day.

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<v Speaker 2>Break, Hi, Brian, thanks well. Markets are applauding the stimulus

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<v Speaker 2>from China. Now, the question is when we'll see these

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<v Speaker 2>measures take effect. From that, we turn to Bloombergy China

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<v Speaker 2>Economy editor Jill Deesis.

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<v Speaker 5>I would expect that you're going to start seeing this

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<v Speaker 5>over the course of the next few weeks and months.

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<v Speaker 5>Remember this is a mid year review meeting. This is

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<v Speaker 5>the paullup Bura meeting every year where they traditionally set

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<v Speaker 5>the course for economic agenda not just for the next month,

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<v Speaker 5>but for the next six months. So I think that

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<v Speaker 5>you know what that means from what we've been hearing

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<v Speaker 5>from economists is maybe you see some cuts in policy

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<v Speaker 5>interest rates toward the end of the year.

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<v Speaker 2>In Bloombery, Stale desis as the offshore you want is

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<v Speaker 2>stronger following the news, is currently trading at around seven

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<v Speaker 2>point one four per dollar.

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<v Speaker 3>Well back here in the US, Karen, we are laser

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<v Speaker 3>focused on earnings today. Nearly three dozen companies in the

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<v Speaker 3>S and P five hundred it'll be reporting, including Microsoft

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<v Speaker 3>and Google. We get more on the outlook for Microsoft

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<v Speaker 3>from Bloomberg's Tom Busby.

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<v Speaker 6>Despite its thirty billion dollar investment in artificial intelligence pioneer

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<v Speaker 6>Open AI, sales growth at Microsoft is expected to remain

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<v Speaker 6>below ten percent for last quarter. A midwekening demand for

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<v Speaker 6>its cloud computing services after years of runaway growth. Still,

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<v Speaker 6>analysts expect to see adjusted earnings of two dollars fifty

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<v Speaker 6>five cents a share, that would be a fourteen percent

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<v Speaker 6>jump over the same period a year ago, and revenues

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<v Speaker 6>of fifty five and a half billion dollars. Tom Busby

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<v Speaker 6>Bloomberg Day Break, All right.

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<v Speaker 2>Tom, thanks, well, whon't we wait for Microsoft's earnings. The

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<v Speaker 2>corporate world remains a buzz over elon Mus's decision to

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<v Speaker 2>say bye Bye Birdie. As Bloomberg John Tucker reports, the

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<v Speaker 2>new rebranding of Twitter could cost the company billions.

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<v Speaker 7>Analysts and brand agencies tell Bloomberg elon mus move to

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<v Speaker 7>turn Twitter into Acts wiped out anywhere between four billion

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<v Speaker 7>and twenty billion dollars in brand value. The call it

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<v Speaker 7>a mistake, they say, is an understatement. Alan Adamson, the

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<v Speaker 7>co founder of the marketing at brand consulting group Metaphors,

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<v Speaker 7>calls the move completely irrational from a business and brand

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<v Speaker 7>point of view. In the way of an explanation, must

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<v Speaker 7>tweeted or axed yesterday that the move is not simply

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<v Speaker 7>a company renaming itself. It's remaking the business into a

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<v Speaker 7>broad platform for communications and financial transactions in New York Ime.

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<v Speaker 7>John Tucker, Bloomberg Daybreak.

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<v Speaker 3>Thanks John. Outside of earnings, it's all about the Fed

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<v Speaker 3>this week. We are one day away from the Central

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<v Speaker 3>Bank's next policy decision, when it is expected to hike

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<v Speaker 3>rates by another quarter percent. Higher rates mean bigger earnings

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<v Speaker 3>for banks like City Group. We spoke with Citigroup Institutional

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<v Speaker 3>Clients Group CEO Paco Ebarra.

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<v Speaker 8>Rates is a positive part of the story because we

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<v Speaker 8>have to remember that we've had many years with zero rates,

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<v Speaker 8>with rates almost debt. You know, very little uncertainty about

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<v Speaker 8>the race we're going to do, and we have now

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<v Speaker 8>a comeback of the race business.

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<v Speaker 3>That's the good news for big banks. On the flip side,

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<v Speaker 3>City Group's poco Ebara says new capital requirements that regulators

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<v Speaker 3>will propose this week could hinder the bank's ability to

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<v Speaker 3>trade certain products.

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<v Speaker 2>Well, Nathan, we're getting more detail else about JP Morgan

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<v Speaker 2>Chase and its alleged ties to disgrace financier Jeffrey Epstein.

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<v Speaker 2>The US Virgin Islands has filed documents in its lawsuit

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<v Speaker 2>against the bank. They show then CEO Sandy Warner told

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<v Speaker 2>Jess Staley in two thousand he should meet with Epstein,

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<v Speaker 2>calling him quote one of the most connected people I know.

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<v Speaker 2>The Virgin Islands is seeking at least one hundred and

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<v Speaker 2>ninety million dollars from JP Morgan in its lawsuit accusing

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<v Speaker 2>the bank of enabling Epstein's sex trafficking. The bank argues

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<v Speaker 2>the Virgin Islands turned a blind eye on his crimes

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<v Speaker 2>and organized visas for his victims.

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<v Speaker 3>Well Karen, another top name in finance's facing pressure from

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<v Speaker 3>Capitol Hill over his ties to Epstein. Leon Black of

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<v Speaker 3>Apollo Global Management is under investigation at the Senate Finance Committee.

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<v Speaker 3>It's over one hundred and fifty eight million dollars in

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<v Speaker 3>payments to Epstein for advice on a state planning taxes

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<v Speaker 3>and running his family office. Lawmakers want to know whether

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<v Speaker 3>that money amounts to gifts that Black now owes taxes

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<v Speaker 3>on and politics.

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<v Speaker 2>This morning, Nathan, there's word of another shake up in

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<v Speaker 2>the presidential ca campaign of Rohn DeSantis, sources Town Bloomberg,

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<v Speaker 2>The Florida governor is making a change in leadership after

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<v Speaker 2>pressure from donors and supporters. DeSantis is elevating digital director

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<v Speaker 2>Ethan Elion to deputy campaign manager. That's as the presidential

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<v Speaker 2>hopeful becomes increasingly frustrated by his campaigns spending under current

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<v Speaker 2>campaign manager Kinera Peck.

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<v Speaker 1>Where told.

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<v Speaker 2>Peck's position is being questioned as the campaign enters a

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<v Speaker 2>critical stretch ahead of the first Republican primary debate next month.

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<v Speaker 3>Time now to take a look at some of the

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<v Speaker 3>other stories making news in New York and around the

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<v Speaker 3>world with Bloomberg's Michael Bark and Bonnie Michael.

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<v Speaker 9>Good morning, Nathan. We're learning more about the case of

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<v Speaker 9>suspected Long Island serial killer Rex Huerman. The bodies of victims,

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<v Speaker 9>all women, were found more than a decade ago on

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<v Speaker 9>Gilgol Beach. The search has intensified at Huerman's home. Suffolk

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<v Speaker 9>County Police Commissioner Rodney Harrison clarified what was found inside.

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<v Speaker 10>There's not a soundproof film. There is a vault where

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<v Speaker 10>he secured numerous amount of guns. Somehow, I believe that

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<v Speaker 10>the sound performing the vaults that message got miscushrewed, But

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<v Speaker 10>there is a vault.

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<v Speaker 9>An excavator has been digging through Hureerman's backyard. The record

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<v Speaker 9>smashing heat wave across the US continues today. Phoenix, Arizona

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<v Speaker 9>is expected to see its twenty sixth consecutive day of

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<v Speaker 9>one hundred ten degrees or hutter and the pavement itself

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<v Speaker 9>is causing a spike in contact burns. Doctor Kevin Foster

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<v Speaker 9>is the director of the Arizona Burn Center at Valley

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<v Speaker 9>Wise Help.

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<v Speaker 11>Most people don't realize that the pavement, concrete, cement sidewalks rocks.

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<v Speaker 11>The temperature of those surfaces can get to be one

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<v Speaker 11>hundred and seventy to one hundred and eighty degrees, which

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<v Speaker 11>is just a little bit below the boiling temperature of water,

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<v Speaker 11>so it only takes a fraction of a second to

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<v Speaker 11>get a really bad burn.

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<v Speaker 9>Meanwhile, experts say water temperatures in the nineties off Florida

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<v Speaker 9>could fuel stronger hurricanes this year. New York City Mayor

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<v Speaker 9>Eric Adams is cracking down on on sidewalk scaffolding. Some

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<v Speaker 9>have been ie sores for too long. Adams announced the

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<v Speaker 9>Get Sheds Down Plan.

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<v Speaker 12>Whilest ibo sheds were created to protect New Yorkers now

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<v Speaker 12>have become unsafe constructions and it is, as we stated,

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<v Speaker 12>a safe haven for criminal behavior.

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<v Speaker 9>There are about eighty nine hundred active sheds in New

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<v Speaker 9>York City that have been up, averaging four hundred eighty

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<v Speaker 9>days and some more than ten years. President Joe Biden

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<v Speaker 9>is expected to sign a proclamation today that establishes a

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<v Speaker 9>national monument honoring Emmett Till. He was the black teenager

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<v Speaker 9>from Chicago whose abduction, torture, and killing in Mississippi in

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<v Speaker 9>nineteen fifty five helped propel the civil rights movement. The

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<v Speaker 9>White House proposed a set of rules today to improve

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<v Speaker 9>insurance coverage for mental health conditions. It's part of a

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<v Speaker 9>broader plan to fight rising rates of anxiety, depression, and

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<v Speaker 9>other ailments. Global News twenty four hours a day, powered

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<v Speaker 9>by more than twenty seven hundred journalists and lists in

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<v Speaker 9>over one hundred and twenty countries. I'm Michael Barr. This

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<v Speaker 9>is Bloomberg NAGGA.

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<v Speaker 7>Thank you, Michael.

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<v Speaker 3>Time out for the Bloomberg Sports update. Here's John Stashout.

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<v Speaker 1>Thanks Nathan.

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<v Speaker 13>Mets and Yankees split a couple of one run games

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<v Speaker 13>last month at City Field. Now they play a two

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<v Speaker 13>game Subway series at the stadium with tonight, Justin Verlander

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<v Speaker 13>facing Domingo Herman. Verlander comes off his best outing against

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<v Speaker 13>the White Sox. He went eight innings, allowed only one run,

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<v Speaker 13>three hits. Herman had that perfect game a few weeks ago.

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<v Speaker 13>Last time out at the Angels, he gave up five runs.

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<v Speaker 13>The two teams the Yanks are chasing for a wildcard

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<v Speaker 13>spot both won last night Toronto in eleven innings over

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<v Speaker 13>the Dodgers. Houston in a wild one over Texas ten

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<v Speaker 13>to nine. The Yanks trail the Blue Jays by two

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<v Speaker 13>and a half games and the Astros by three and

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<v Speaker 13>a half. The Orioles one again, three two at Philadelphia.

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<v Speaker 13>The Yankees are in Baltimore this weekend. The Orioles have

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<v Speaker 13>won thirteen of their last sixteen. They lead the Al

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<v Speaker 13>East by two and a half over Tampa Bay. It

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<v Speaker 13>has to say the LEAs been a rough summer at Northwestern.

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<v Speaker 13>Allegations of hazing on the football team bullying on.

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<v Speaker 9>The baseball team.

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<v Speaker 13>Both coaches have been fired, and now a former volleyball

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<v Speaker 13>player has filed a lawsuit charging hazing and racism, and

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<v Speaker 13>another former football player is suing and Lloyd Yates is

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<v Speaker 13>the first to go public.

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<v Speaker 14>We were all victims, no matter what our role was

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<v Speaker 14>at the time, but the culture was so strong there

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<v Speaker 14>we felt we had to go with it to survive,

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<v Speaker 14>to be respected, and to earn the trust within the

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<v Speaker 14>football program.

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<v Speaker 13>Yeah was a quarterback from twenty fifteen to seventeen. I

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<v Speaker 13>blow out of the Buffalo Bills that were counting on

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<v Speaker 13>Nahim Hines to be a big part of their offense

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<v Speaker 13>and special teams. He had a game last season where

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<v Speaker 13>he ran two kickoffs back for touchdown, but heinz Will

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<v Speaker 13>missed the season do an injury suffered as a jet

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<v Speaker 13>ski accident. The NFL has to spend another player for gambling,

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<v Speaker 13>bringing the total number this offseason to ten. John Stashchetwar

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<v Speaker 13>Bloomberg Sports.

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<v Speaker 15>From coast to coast, from New York to ten Boston

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<v Speaker 15>to Washington, DC, nationwide on Syrias Exam, the Bloomberg Business app,

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<v Speaker 15>and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning,

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<v Speaker 15>I'm Nathan Hager. What's next for the US property sector?

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<v Speaker 3>Starwood Capitol Group Chairman Barry Sternlick says, between work from home,

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<v Speaker 3>low mortgage rates, and other post pandemic phenomena, there is

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<v Speaker 3>a lot of uncertainty and distress. Sternlock sat down on

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<v Speaker 3>the latest episode of Bloomberg Wealth with David Rubinstein for

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<v Speaker 3>an extended conversation on the path ahead for US real

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<v Speaker 3>estate let's listen to part of that conversation.

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<v Speaker 16>The work from home phenomenon is a US phenomenon. If

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<v Speaker 16>you go to England or Germany. I was just we

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<v Speaker 16>have some investments, oh if shore and I was just

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<v Speaker 16>looking at rents are up in vacancy rates in the

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<v Speaker 16>top EU German property markets Berlin, Frankfort, Munich, Homberg or

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<v Speaker 16>less than five percent. You and I go to the

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<v Speaker 16>Middle East, they're full. We have offices in Asia, they're full.

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<v Speaker 16>In the US you have two markets. You have the

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<v Speaker 16>really nice buildings that are ESG compliant, that are lovely,

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<v Speaker 16>like the one we're sitting in. This place is buzzing,

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<v Speaker 16>and they're back because it's a fun place to be.

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<v Speaker 16>And if you're in a building with lots of cubicles

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<v Speaker 16>and it's dark and there's no life and love, so

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<v Speaker 16>nice buildings, even in a city is as currently destitute

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<v Speaker 16>of San Francisco, from an office market perspective, the best

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<v Speaker 16>buildings are still leased, and so you're going to see

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<v Speaker 16>a bifurcation of the market in office The nice buildings

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<v Speaker 16>will stay rented and my guess is at pretty good

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<v Speaker 16>rates and the B and C stuff is going to

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<v Speaker 16>be maybe fields of grain or something'll be very pretty.

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<v Speaker 16>We have all these little mid block parks in New

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<v Speaker 16>York City because there won't be anything else to do

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<v Speaker 16>with those buildings, and nobody will carry them because there's

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<v Speaker 16>no hope. Some of those cities that have issues on commuting,

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<v Speaker 16>like New York or La Downtown, La Downtown San Francisco,

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<v Speaker 16>the c that are difficult to commute to, that's where

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<v Speaker 16>the pressure is so hard from workers saying I don't

0:11:50.360 --> 0:11:51.839
<v Speaker 16>want to drive into the city an hour and a

0:11:51.880 --> 0:11:54.080
<v Speaker 16>half and drive home an hour and a half every day.

0:11:54.440 --> 0:11:57.120
<v Speaker 16>But I also think a nice little recession will clear

0:11:57.160 --> 0:11:59.480
<v Speaker 16>this and you'll see people come back to the office

0:11:59.480 --> 0:12:03.360
<v Speaker 16>and in your town. Take the Amazon HQ two. They're

0:12:03.400 --> 0:12:06.680
<v Speaker 16>expecting people in those offices four days a week come

0:12:06.760 --> 0:12:09.079
<v Speaker 16>the fall. So the other thing about office day it

0:12:09.160 --> 0:12:11.520
<v Speaker 16>is AI. AI is going to hit a couple of

0:12:11.559 --> 0:12:14.000
<v Speaker 16>these industries that have been big users of office space.

0:12:14.120 --> 0:12:17.079
<v Speaker 17>You think artificial intelligence is obviously coming, but what industries

0:12:17.120 --> 0:12:18.360
<v Speaker 17>you think will be most effective.

0:12:18.440 --> 0:12:20.440
<v Speaker 16>Legal is probably the number one industry that could be

0:12:20.480 --> 0:12:24.480
<v Speaker 16>disrupted by AI. You can search every precedent in the

0:12:24.520 --> 0:12:26.880
<v Speaker 16>history of mankind with a machine. You don't need a

0:12:27.000 --> 0:12:29.439
<v Speaker 16>paralegal to do that anymore, and they'll write the brief

0:12:29.480 --> 0:12:33.480
<v Speaker 16>for you. So the legal profession is probably target one.

0:12:34.080 --> 0:12:37.160
<v Speaker 16>Not far behind is advertising, when the machine is going

0:12:37.200 --> 0:12:39.880
<v Speaker 16>to update advertising and keep bombarding you with more and

0:12:39.880 --> 0:12:42.800
<v Speaker 16>more ads, with more and more offers until you take one.

0:12:43.040 --> 0:12:45.920
<v Speaker 16>Humans won't be there. They'll be maybe guiding it, but

0:12:45.960 --> 0:12:49.559
<v Speaker 16>it'll be it'll change advertising. It's another big user of

0:12:49.640 --> 0:12:52.439
<v Speaker 16>space finance. You tell me, I mean, there's a buttons

0:12:52.440 --> 0:12:54.480
<v Speaker 16>now on your computer. They'll be running a lot of

0:12:54.520 --> 0:12:57.679
<v Speaker 16>the stuff for you. It could fundamentally shake up permanent

0:12:57.720 --> 0:12:59.040
<v Speaker 16>demand for office now.

0:12:59.120 --> 0:13:02.440
<v Speaker 17>Sometimes people are saying that the best investment opportunity now

0:13:02.720 --> 0:13:04.880
<v Speaker 17>is to stress real estate debt. But you think it's

0:13:04.920 --> 0:13:06.120
<v Speaker 17>too early for that.

0:13:06.160 --> 0:13:08.760
<v Speaker 16>They're just beginning to you know, we were going to

0:13:08.840 --> 0:13:10.800
<v Speaker 16>give back an office building and they said, well, not

0:13:10.960 --> 0:13:14.440
<v Speaker 16>so fast. If you want to, we'll restructure a loan

0:13:14.520 --> 0:13:16.400
<v Speaker 16>and we'll cut it the loan in half, and you

0:13:16.480 --> 0:13:18.319
<v Speaker 16>put the money in here, and we'll take this as

0:13:18.320 --> 0:13:21.240
<v Speaker 16>a junior note. Because the banks don't want the assets back.

0:13:21.559 --> 0:13:23.360
<v Speaker 17>And why don't they want them back because they think

0:13:23.360 --> 0:13:24.920
<v Speaker 17>it's going to go down even further.

0:13:25.040 --> 0:13:26.679
<v Speaker 16>Yeah, because they got to carry them they're not set

0:13:26.760 --> 0:13:28.520
<v Speaker 16>up to carry these assets right, and they got to

0:13:28.520 --> 0:13:30.960
<v Speaker 16>go hire someone. They got to go to the leasing themselves.

0:13:31.000 --> 0:13:34.120
<v Speaker 16>It's not their business. They'd rather have a GP like

0:13:34.240 --> 0:13:37.040
<v Speaker 16>your old firm Carlisle or Starwood or Blackstone, hold onto

0:13:37.080 --> 0:13:38.400
<v Speaker 16>the asset and try to work it out.

0:13:38.559 --> 0:13:40.440
<v Speaker 17>So a lot of fortunes were made in the real

0:13:40.520 --> 0:13:42.760
<v Speaker 17>estate world, you know seven oh eight when people bought

0:13:42.800 --> 0:13:45.520
<v Speaker 17>distressed real estate, and all in late eighties two when

0:13:45.520 --> 0:13:48.600
<v Speaker 17>the RTC was here. So do you see funds being

0:13:48.679 --> 0:13:50.920
<v Speaker 17>formed to buy these assets, but you think they won't

0:13:50.960 --> 0:13:52.319
<v Speaker 17>be available for a year or two.

0:13:52.840 --> 0:13:54.720
<v Speaker 16>Right now, you have an unusual situation in the real

0:13:54.800 --> 0:13:56.880
<v Speaker 16>estate market. It's because everyone's sort of looking at the

0:13:56.960 --> 0:13:59.000
<v Speaker 16>yield curve and it says rates will be lower later.

0:13:59.600 --> 0:14:02.320
<v Speaker 16>Everyone says, you know, survive till twenty five, hold onto

0:14:02.320 --> 0:14:06.040
<v Speaker 16>your assets. So transaction volumes have plummeted. Unless you have

0:14:06.120 --> 0:14:08.520
<v Speaker 16>to sell something today. Nobody wants to sell anything today.

0:14:08.520 --> 0:14:10.880
<v Speaker 16>They think tomorrow will be rosier. For the most part,

0:14:10.880 --> 0:14:14.320
<v Speaker 16>everybody's pushing any sales back. And I think transaction advising

0:14:14.400 --> 0:14:18.240
<v Speaker 16>apartments are down sixty percent, industrial down seventy percent. It's

0:14:18.280 --> 0:14:20.960
<v Speaker 16>a very dry you know, there's no IPOs and there's

0:14:21.000 --> 0:14:22.240
<v Speaker 16>no sales in housing.

0:14:22.720 --> 0:14:25.480
<v Speaker 17>Do you see a recession there because prices are going

0:14:25.560 --> 0:14:27.200
<v Speaker 17>to come down at some point, or you don't see

0:14:27.200 --> 0:14:28.240
<v Speaker 17>a recession in housing.

0:14:28.480 --> 0:14:33.240
<v Speaker 16>The housing markets had a very unusual situation where powells.

0:14:34.120 --> 0:14:37.600
<v Speaker 16>Increase in rates has diminished supply and people. And I'm

0:14:37.640 --> 0:14:39.680
<v Speaker 16>not sure we've ever had a situation where so many

0:14:39.760 --> 0:14:42.800
<v Speaker 16>people have locked to have locked in their mortgage costs.

0:14:42.920 --> 0:14:45.400
<v Speaker 16>So right now people are sticking in their house, which

0:14:45.400 --> 0:14:48.680
<v Speaker 16>has diminished the supply of homes for sale. I wonder

0:14:48.960 --> 0:14:52.560
<v Speaker 16>when rates come down, homes will be sold like people

0:14:52.600 --> 0:14:55.280
<v Speaker 16>will start because the mortgage will no longer be a

0:14:55.280 --> 0:14:57.480
<v Speaker 16>reason to hold onto the house. And whether that will

0:14:57.520 --> 0:15:00.360
<v Speaker 16>offset will probably be an increase in supply as the

0:15:00.400 --> 0:15:04.040
<v Speaker 16>bills resume a more normal cycle. So maybe the housing

0:15:04.040 --> 0:15:07.080
<v Speaker 16>market just stagnates for a while, but over time it's

0:15:07.120 --> 0:15:07.800
<v Speaker 16>headed up.

0:15:10.160 --> 0:15:13.240
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