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Speaker 1: Good morning. I'm Brian Curtis and I'm Doug Krisner. Here

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Speaker 1: are the stories we're following today.

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Speaker 2: Iran is warning the US it will not be spared

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Speaker 2: if the Israel Hamas war spreads at Baxter has Global

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Speaker 2: News from the nine to sixty newsroom in San Francisco, And.

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Speaker 3: Yeah, that's right, Brian. On the warning goes both ways.

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Speaker 3: Iran's Foreign Minister Hossein amir Ad de Halahan saying that

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Speaker 3: un IS the US is over seeing genocide against the

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Speaker 3: Palestinian people and says quote, I warn if the genocide

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Speaker 3: in Gaza continues, they will not be spared these fires.

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Speaker 3: US Secretary of Saint Anthony Blinkot, also addressing the UN.

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Speaker 4: If Iran or its proxies attack US personnel anywhere, make

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Speaker 4: no mistake. We will defend our people. We will defend

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Speaker 4: our security swiftly and decisively, and.

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Speaker 3: Calls on the other member nations to send Iran a

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Speaker 3: loud and clear message that it should not expand the war. Meanwhile,

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Speaker 3: National Secureity Council spokesman John Kirby says aid into Palestine

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Speaker 3: is moving slowly.

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Speaker 4: Since the twenty first of this month, some seventy four

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Speaker 4: trucks have now gotten in twelve over just the last

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Speaker 4: twenty four hours.

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Speaker 3: Not enough, and he says that it really needs to

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Speaker 3: go faster. Meanwhile, Ukraine, he says, the military has been

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Speaker 3: able to hold onto the defense against the Russian campaign

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Speaker 3: and the reports of unarrest in Russian forces.

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Speaker 5: We have information that the Russian military has been actually

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Speaker 5: executing soldiers who refuse to follow orders.

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Speaker 3: Kirby says more aid for Ukraine has needed as well.

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Speaker 3: The man hunt in Maine for the suspect of the

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Speaker 3: mass shooting that has left eighteen people dead and thirteen

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Speaker 3: injured is massive. The manhunt is Mayn's governor, Janet Mills

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Speaker 3: says concern for safety is still very high.

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Speaker 6: Today.

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Speaker 5: Main state police have issued a shelter in place order

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Speaker 5: for Lewiston, Lisbon and Bowden as the man hunt for

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Speaker 5: that person of interest, Robert Card of Boden, continues, and.

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Speaker 3: Some schools and colleges also remain under lockdown. The White

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Speaker 3: House is calling on the new Speaker, Mike Johnson to

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Speaker 3: start work immediately on gun legislation. This is a spokesman

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Speaker 3: a Krein Jean Pierre.

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Speaker 7: Let's work together to ban assault weapons and high capacity magazines.

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Speaker 7: Let's work together to enact universal background checks, require safe

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Speaker 7: storage of guns, and keep guns out of the hands

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Speaker 7: of criminals and dangerous individuals who have no business being

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Speaker 7: armed with a weapon of war.

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Speaker 3: And Johnson responds, prayer is the answer.

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Speaker 1: This is a dark time in America.

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Speaker 8: We have a lot of problems, and we're really really

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Speaker 8: hopeful and fearful.

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Speaker 9: Prayer is appropriate at a time like this.

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Speaker 3: And Vice President Kamala Harris as another American community torn

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Speaker 3: apart by gun violence in our.

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Speaker 10: Country today, the leading cause of death of American children

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Speaker 10: is gun violent.

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Speaker 3: Yeah, so they're all calling for legislation. President Joe Biden

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Speaker 3: said to me with China's Foreign Minister wangy Tomorrow, Wang

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Speaker 3: in the US to try to rough over some rough

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Speaker 3: edges with the potential of a higher level meeting at APEX.

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Speaker 3: But Bloomberg'snick Wadham says, the goal for the US is

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Speaker 3: just making things personal.

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Speaker 11: So what you're really seeing is an administration that wants

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Speaker 11: to get things back on track and do what Joe

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Speaker 11: Biden likes best, which is those interpersonal relationships with other

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Speaker 11: leaders around the world.

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Speaker 3: We'll have more details on the meeting in just a

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Speaker 3: couple of minutes, Taiwan says China's carrier strike group is

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Speaker 3: crossing the Abashi channel and that it is very dangerous situation.

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Speaker 3: China's Defense Ministry is pushing back, saying Taiwan is moving

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Speaker 3: in a dangerous direction, using the words dangerous situation of

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Speaker 3: war at an accelerated pace. This after reports the Taipei

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Speaker 3: plans to buy military drones. Global News twenty four hours

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Speaker 3: a day, whenever you want it with Bloomberg News Now

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Speaker 3: in San Francisco. I'm at Baxter and this is Bloomberg.

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Speaker 2: I'm Brian Curtis, along with Doug Krisner. Paul Alan will

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Speaker 2: join us shortly. We take a look here at some

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Speaker 2: of the top business stories of the hour and the

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Speaker 2: effect on markets. Amazon reporting third quarter revenue and profit

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Speaker 2: that topped analyst expectations as thanks to rising sales in

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Speaker 2: the company's retail advertising and cloud computing units reaction from

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Speaker 2: Bloomberg's poonam goil.

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Speaker 6: They posted really robust online gains here double digits for

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Speaker 6: the third party, which is obviously impressive at twenty percent,

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Speaker 6: and then on their own online sales, a one pe

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Speaker 6: business you know you mentioned up seven percent and I

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Speaker 6: think that's very healthy considering the environment that we're in,

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Speaker 6: so I think they're on track to deliver a good holiday.

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Speaker 6: Keep in mind that last year the comparers are much

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Speaker 6: easier because they did a report a two percent decline

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Speaker 6: in online sales, so easy compares plus a good start

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Speaker 6: to holiday with the results that they're reporting bodes well

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Speaker 6: for them as they move into the fourth quarter.

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Speaker 2: That's poonum goil. The results today provided more evidence of

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Speaker 2: Amazon's cost cutting efforts. Amazon spending on sales and marketing declined,

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Speaker 2: and that's the first since at least twenty fifteen. Amazon

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Speaker 2: shares really buffeted in late trading, first up, then down

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Speaker 2: a little, and at the moment trading higher by three

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Speaker 2: point four percent.

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Speaker 1: We also heard from Intel after the bell, and there

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Speaker 1: really no shortage of positive remarks. The stock as a result,

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Speaker 1: is up eight point six percent in the late US session.

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Speaker 1: Intel is now predicting a return to sales growth in

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Speaker 1: the fourth quarter. We have more from Bloomberg's Charlie Pellett.

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Speaker 9: The quarter was fueled by an improving PC market and

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Speaker 9: a more competitive product line. Intel said sales in the

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Speaker 9: period will be fourteen point six billion to fifteen point

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Speaker 9: six billion dollars that compares with an average analyst estimate

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Speaker 9: of fourteen point four billion. The upbeat outlook shows growing

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Speaker 9: momentum for Intel's turnaround efforts under CEO Pat Gelsinger. The

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Speaker 9: company has said that the PC market, its biggest business

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Speaker 9: unit by ship uns, is through the worst of a

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Speaker 9: historic slump caused by a build up in inventory in

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Speaker 9: New York. Charlie Pello Bloomberg Radio Well.

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Speaker 2: Ford Motor has said that or It reported earnings that

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Speaker 2: fell short of third quarter expectations, and it comes just

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Speaker 2: after the automaker agreed to a twenty five percent wage

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Speaker 2: hike and a tentative deal to end the UAW strike.

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Speaker 2: We get more Now from Bloomberg's Tom Busby.

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Speaker 8: It was a difficult quarter for Ford despite strong auto sales,

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Speaker 8: especially for its gas powered models, but adjusted ernix per

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Speaker 8: share were thirty nine cents, well below the forty seven

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Speaker 8: cents analysts expected, but because of higher sticker prices for

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Speaker 8: its revenue forty three point eight billion dollars was better

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Speaker 8: than forecast. Ford's CEO Jim Farley said in the statement

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Speaker 8: that the company is now quote radically changing how we

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Speaker 8: work in order to deal with some unspecified cost and

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Speaker 8: quality issues. The automaker also said the six week long

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Speaker 8: strike has costed one point three billion dollars so far.

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Speaker 9: Tom buzzby Bloomberg Radio.

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Speaker 2: Ford shares traded down a little more than four percent

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Speaker 2: in after hours. And separately, we're hearing that the UAW

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Speaker 2: has offered a new contract proposal to General Motors similar

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Speaker 2: to the tentative agreement with Ford. The automaker is said

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Speaker 2: to be preparing a counter offer for Thursday or Friday.

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Speaker 9: Well.

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Speaker 1: In the last few months, we have seen a surge

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Speaker 1: in treasury bond yields at the long end, and today

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Speaker 1: Treasury Secretary Janet Yellen said this move is not being

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Speaker 1: driven by a widening fiscal deficit. Here she is speaking

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Speaker 1: earlier with Bloomberg.

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Speaker 12: We're seeing yields go up in most advanced countries. Part

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Speaker 12: of the increase in yields, I think is simply a

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Speaker 12: reflection of the strength of the economy, the notion that

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Speaker 12: interest rates will be higher for longer.

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Speaker 1: Treasury Secretary Janet Yellen there. She spoke hours after the

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Speaker 1: GDP report for the third quarter showed the American economy

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Speaker 1: grew at an annual rate of four point nine percent.

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Speaker 1: That is the fastest in nearly two years. The key

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Speaker 1: driver robust consumer spending Brian Well.

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Speaker 2: Chinese Foreign Minister Wang Yie is said to be meeting

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Speaker 2: President Joe Biden on Friday. Bloomberg's Bonnie Ao has the

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Speaker 2: story from Hong Kong.

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Speaker 10: Once visiting Washington may lay the groundwork for a potential

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Speaker 10: meeting between the US and Chinese leaders. Biden has four

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Speaker 10: months said he hoped to meet President She in the fall.

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Speaker 10: The anticipation comes as geopolitical ties between the two nations

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Speaker 10: are showing optimism, but Chinese officials have so far declined

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Speaker 10: to confirm She's attendance. At the APEX summit. Wan will

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Speaker 10: also be meeting Secretary of State Anthony Blencoln and National

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Speaker 10: Security Advisor Jake Sullivan. We hear the US side is

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Speaker 10: planning to raise the subject of the Israe Hamas war

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Speaker 10: in Hong Kong and Bonnie Al Bloomberg Radio.

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Speaker 2: Eleven minutes past the hour. I'm Brian Curtis with Paul Allen,

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Speaker 2: and we say good morning to Gene Munster, managing partner

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Speaker 2: at deep Water Asset Management. Gene, thanks very much for

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Speaker 2: being with us. So we have a couple of wars

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Speaker 2: to consider a very intriguing macro environment and earnings. Let's

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Speaker 2: start with earnings. On my scorecard, at least on the

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Speaker 2: initial response to the earnings from the Super seven that

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Speaker 2: have got so much attention this year, I got three positive,

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Speaker 2: three negative. But the market overall has been negative. Your

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Speaker 2: thoughts on how to frame this.

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Speaker 11: Well, it's definitely been negative. And I think that we

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Speaker 11: need to think what's going to happen over the next three,

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Speaker 11: six and twelve months. And over the next three months

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Speaker 11: when it comes to tech, we're probably going to see

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Speaker 11: interest rates stay pretty much where they're at now. They

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Speaker 11: may go up a little bit, but they're unlikely to

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Speaker 11: go down. And I think that that is first and

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Speaker 11: foremost as a deep water we think about our investments

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Speaker 11: in tech, that dynamic is going to be a headwind

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Speaker 11: to I think how some of this tech is going

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Speaker 11: to perform. The macro does matter? Just go back and

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Speaker 11: look at what's happened with the Nasdaq, the Russell five

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Speaker 11: hundred as since talks of rates going higher have impacted

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Speaker 11: of course these stocks, and as far as the geopolitical

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Speaker 11: piece to it, that had a particular potent impact on

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Speaker 11: what happened with Meta yesterday and specifically shares were up

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Speaker 11: in the after hours after the report of their quarter

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Speaker 11: and then after the CFO Susan Lee mentioned softness in

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Speaker 11: the first few weeks with the conflict in the Middle

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Speaker 11: East that sent shares down six percent, And so ultimately,

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Speaker 11: as these do matter relative to interest rates and what

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Speaker 11: some of the macro commentary is, and so it is

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Speaker 11: something we're keeping it a close eye on. We do

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Speaker 11: focus good news here, we do focus on where the

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Speaker 11: world is going, and ultimately I think the companies that

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Speaker 11: are benefiting from that will ultimately pull through this.

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Speaker 13: Yet you point on those price movements. I mean, we've

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Speaker 13: had Matter off about seven and a half percent over

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Speaker 13: the past two days, Alphabet off about twelve percent in

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Speaker 13: the same period. If you think about you know, this

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Speaker 13: notion that okay rights might be high for longer than

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Speaker 13: market seems to have wrapped us hit around that. But

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Speaker 13: one of those other big themes AI it's not going away.

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Speaker 13: When you see those sorts of dips, do you buy.

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Speaker 11: I think you do. And part of the reason is

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Speaker 11: we do. I would say that deep water. I think

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Speaker 11: the question that I would ask is how much do

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Speaker 11: you believe in how transformative AI will be. From our perspective,

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Speaker 11: we don't think we've even started. There's people that say

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Speaker 11: we're in an AI bubble. We don't think we're anything

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Speaker 11: even close to it. I can go through the numbers

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Speaker 11: that support that, but I think more importantly is we've

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Speaker 11: seen one massive shift which is relative to Nvidia's business.

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Speaker 11: Intel tonight reported and their shares were up seven percent.

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Speaker 11: So the hardware piece is having a benefit here, but

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Speaker 11: the broader benefit about how this can create new business

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Speaker 11: lines and prove engagement create higher profit margins for companies.

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Speaker 11: That's something that's going to take three, five, ten years.

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Speaker 11: And so yes, I think that if you have patients,

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Speaker 11: you own some of these companies, and I think the

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Speaker 11: biggest ones, the one we're most optimistic about. The two

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Speaker 11: is relative to Google and Meta that should benefit for

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Speaker 11: the next five years around this theme. So absolutely, I

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Speaker 11: would say a slightly different way is it's hard to

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Speaker 11: understate the significance that AI is going to have on

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Speaker 11: these companies in the next five years.

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Speaker 2: Gene optimization was a big theme this year for many,

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Speaker 2: most notably at Meta, but others as well. Is that

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Speaker 2: still the case for these companies, or are we starting

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Speaker 2: to see now any kind of uptick in spending in

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Speaker 2: capex and an investment.

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Speaker 11: They're still using the language and meta use the language

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Speaker 11: about optimization Microsoft, Google, They talk about this, but that

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Speaker 11: the kind of the we're hitting. The second derivative here,

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Speaker 11: in other words, is that we've had most of the

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Speaker 11: improvement has happened around profitability. Amazon tonight had some impressive

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Speaker 11: upside to margins. But the bigger picture is that we're

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Speaker 11: through the year of optimization, the year of improving efficiencies,

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Speaker 11: and I think that the focus is going to turn

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Speaker 11: much more back to growth. And I'll just give a

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Speaker 11: quick example of a support to that is that Amazon

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Speaker 11: reported they absolutely crushed the earnings estimates, and the stock

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Speaker 11: initially was up and then it went down because the

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Speaker 11: AWS segment, which is a smaller part of their business,

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Speaker 11: but it's kind of the signature of a growth opportunity

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Speaker 11: that miss numbers. And then on their earnings call just recently,

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Speaker 11: the CEO said that they've had a ton of bookings

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Speaker 11: in the month of September, hinting that the growth will

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Speaker 11: reaccelerate in the December quarter, and sure enough, shares went

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Speaker 11: up basically immediately four percent on that, and I think

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Speaker 11: that speaks to we have turned the page from the

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Speaker 11: year of efficiency a few quarters ago. Now we're back

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Speaker 11: to the year of growth power by AI.

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Speaker 13: We've also heard from s K Heinex until this week.

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Speaker 13: Do you feel like the bottoms and in terms of

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Speaker 13: cyclical memory ship amount, I think.

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Speaker 11: That's a little bit more of a mystery because I

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Speaker 11: think that there is the macro. I do think we

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Speaker 11: are going to go to a recession. I think that's

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Speaker 11: the market is properly factoring then to a lot of

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Speaker 11: retail stocks. Even though their businesses are doing well, the

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Speaker 11: stocks are down. That means that the market is anticipating

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Speaker 11: some sort of a slow down. I think just consumer

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Speaker 11: still hangs in there, but eventually in the next six

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Speaker 11: to twelve months, I think it will pull back. Doesn't

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Speaker 11: impact the big AI opportunity, but I think from a

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Speaker 11: lot of these chips in memory, I think you could

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Speaker 11: see a slode on. So simply put, I don't think

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Speaker 11: the bottom's in.

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