Speaker 1: Good morning. I'm Brian Curtis and I'm Doug Krisner. Here
Speaker 1: are the stories we're following today.
Speaker 2: Iran is warning the US it will not be spared
Speaker 2: if the Israel Hamas war spreads at Baxter has Global
Speaker 2: News from the nine to sixty newsroom in San Francisco, And.
Speaker 3: Yeah, that's right, Brian. On the warning goes both ways.
Speaker 3: Iran's Foreign Minister Hossein amir Ad de Halahan saying that
Speaker 3: un IS the US is over seeing genocide against the
Speaker 3: Palestinian people and says quote, I warn if the genocide
Speaker 3: in Gaza continues, they will not be spared these fires.
Speaker 3: US Secretary of Saint Anthony Blinkot, also addressing the UN.
Speaker 4: If Iran or its proxies attack US personnel anywhere, make
Speaker 4: no mistake. We will defend our people. We will defend
Speaker 4: our security swiftly and decisively, and.
Speaker 3: Calls on the other member nations to send Iran a
Speaker 3: loud and clear message that it should not expand the war. Meanwhile,
Speaker 3: National Secureity Council spokesman John Kirby says aid into Palestine
Speaker 3: is moving slowly.
Speaker 4: Since the twenty first of this month, some seventy four
Speaker 4: trucks have now gotten in twelve over just the last
Speaker 4: twenty four hours.
Speaker 3: Not enough, and he says that it really needs to
Speaker 3: go faster. Meanwhile, Ukraine, he says, the military has been
Speaker 3: able to hold onto the defense against the Russian campaign
Speaker 3: and the reports of unarrest in Russian forces.
Speaker 5: We have information that the Russian military has been actually
Speaker 5: executing soldiers who refuse to follow orders.
Speaker 3: Kirby says more aid for Ukraine has needed as well.
Speaker 3: The man hunt in Maine for the suspect of the
Speaker 3: mass shooting that has left eighteen people dead and thirteen
Speaker 3: injured is massive. The manhunt is Mayn's governor, Janet Mills
Speaker 3: says concern for safety is still very high.
Speaker 6: Today.
Speaker 5: Main state police have issued a shelter in place order
Speaker 5: for Lewiston, Lisbon and Bowden as the man hunt for
Speaker 5: that person of interest, Robert Card of Boden, continues, and.
Speaker 3: Some schools and colleges also remain under lockdown. The White
Speaker 3: House is calling on the new Speaker, Mike Johnson to
Speaker 3: start work immediately on gun legislation. This is a spokesman
Speaker 3: a Krein Jean Pierre.
Speaker 7: Let's work together to ban assault weapons and high capacity magazines.
Speaker 7: Let's work together to enact universal background checks, require safe
Speaker 7: storage of guns, and keep guns out of the hands
Speaker 7: of criminals and dangerous individuals who have no business being
Speaker 7: armed with a weapon of war.
Speaker 3: And Johnson responds, prayer is the answer.
Speaker 1: This is a dark time in America.
Speaker 8: We have a lot of problems, and we're really really
Speaker 8: hopeful and fearful.
Speaker 9: Prayer is appropriate at a time like this.
Speaker 3: And Vice President Kamala Harris as another American community torn
Speaker 3: apart by gun violence in our.
Speaker 10: Country today, the leading cause of death of American children
Speaker 10: is gun violent.
Speaker 3: Yeah, so they're all calling for legislation. President Joe Biden
Speaker 3: said to me with China's Foreign Minister wangy Tomorrow, Wang
Speaker 3: in the US to try to rough over some rough
Speaker 3: edges with the potential of a higher level meeting at APEX.
Speaker 3: But Bloomberg'snick Wadham says, the goal for the US is
Speaker 3: just making things personal.
Speaker 11: So what you're really seeing is an administration that wants
Speaker 11: to get things back on track and do what Joe
Speaker 11: Biden likes best, which is those interpersonal relationships with other
Speaker 11: leaders around the world.
Speaker 3: We'll have more details on the meeting in just a
Speaker 3: couple of minutes, Taiwan says China's carrier strike group is
Speaker 3: crossing the Abashi channel and that it is very dangerous situation.
Speaker 3: China's Defense Ministry is pushing back, saying Taiwan is moving
Speaker 3: in a dangerous direction, using the words dangerous situation of
Speaker 3: war at an accelerated pace. This after reports the Taipei
Speaker 3: plans to buy military drones. Global News twenty four hours
Speaker 3: a day, whenever you want it with Bloomberg News Now
Speaker 3: in San Francisco. I'm at Baxter and this is Bloomberg.
Speaker 2: I'm Brian Curtis, along with Doug Krisner. Paul Alan will
Speaker 2: join us shortly. We take a look here at some
Speaker 2: of the top business stories of the hour and the
Speaker 2: effect on markets. Amazon reporting third quarter revenue and profit
Speaker 2: that topped analyst expectations as thanks to rising sales in
Speaker 2: the company's retail advertising and cloud computing units reaction from
Speaker 2: Bloomberg's poonam goil.
Speaker 6: They posted really robust online gains here double digits for
Speaker 6: the third party, which is obviously impressive at twenty percent,
Speaker 6: and then on their own online sales, a one pe
Speaker 6: business you know you mentioned up seven percent and I
Speaker 6: think that's very healthy considering the environment that we're in,
Speaker 6: so I think they're on track to deliver a good holiday.
Speaker 6: Keep in mind that last year the comparers are much
Speaker 6: easier because they did a report a two percent decline
Speaker 6: in online sales, so easy compares plus a good start
Speaker 6: to holiday with the results that they're reporting bodes well
Speaker 6: for them as they move into the fourth quarter.
Speaker 2: That's poonum goil. The results today provided more evidence of
Speaker 2: Amazon's cost cutting efforts. Amazon spending on sales and marketing declined,
Speaker 2: and that's the first since at least twenty fifteen. Amazon
Speaker 2: shares really buffeted in late trading, first up, then down
Speaker 2: a little, and at the moment trading higher by three
Speaker 2: point four percent.
Speaker 1: We also heard from Intel after the bell, and there
Speaker 1: really no shortage of positive remarks. The stock as a result,
Speaker 1: is up eight point six percent in the late US session.
Speaker 1: Intel is now predicting a return to sales growth in
Speaker 1: the fourth quarter. We have more from Bloomberg's Charlie Pellett.
Speaker 9: The quarter was fueled by an improving PC market and
Speaker 9: a more competitive product line. Intel said sales in the
Speaker 9: period will be fourteen point six billion to fifteen point
Speaker 9: six billion dollars that compares with an average analyst estimate
Speaker 9: of fourteen point four billion. The upbeat outlook shows growing
Speaker 9: momentum for Intel's turnaround efforts under CEO Pat Gelsinger. The
Speaker 9: company has said that the PC market, its biggest business
Speaker 9: unit by ship uns, is through the worst of a
Speaker 9: historic slump caused by a build up in inventory in
Speaker 9: New York. Charlie Pello Bloomberg Radio Well.
Speaker 2: Ford Motor has said that or It reported earnings that
Speaker 2: fell short of third quarter expectations, and it comes just
Speaker 2: after the automaker agreed to a twenty five percent wage
Speaker 2: hike and a tentative deal to end the UAW strike.
Speaker 2: We get more Now from Bloomberg's Tom Busby.
Speaker 8: It was a difficult quarter for Ford despite strong auto sales,
Speaker 8: especially for its gas powered models, but adjusted ernix per
Speaker 8: share were thirty nine cents, well below the forty seven
Speaker 8: cents analysts expected, but because of higher sticker prices for
Speaker 8: its revenue forty three point eight billion dollars was better
Speaker 8: than forecast. Ford's CEO Jim Farley said in the statement
Speaker 8: that the company is now quote radically changing how we
Speaker 8: work in order to deal with some unspecified cost and
Speaker 8: quality issues. The automaker also said the six week long
Speaker 8: strike has costed one point three billion dollars so far.
Speaker 9: Tom buzzby Bloomberg Radio.
Speaker 2: Ford shares traded down a little more than four percent
Speaker 2: in after hours. And separately, we're hearing that the UAW
Speaker 2: has offered a new contract proposal to General Motors similar
Speaker 2: to the tentative agreement with Ford. The automaker is said
Speaker 2: to be preparing a counter offer for Thursday or Friday.
Speaker 9: Well.
Speaker 1: In the last few months, we have seen a surge
Speaker 1: in treasury bond yields at the long end, and today
Speaker 1: Treasury Secretary Janet Yellen said this move is not being
Speaker 1: driven by a widening fiscal deficit. Here she is speaking
Speaker 1: earlier with Bloomberg.
Speaker 12: We're seeing yields go up in most advanced countries. Part
Speaker 12: of the increase in yields, I think is simply a
Speaker 12: reflection of the strength of the economy, the notion that
Speaker 12: interest rates will be higher for longer.
Speaker 1: Treasury Secretary Janet Yellen there. She spoke hours after the
Speaker 1: GDP report for the third quarter showed the American economy
Speaker 1: grew at an annual rate of four point nine percent.
Speaker 1: That is the fastest in nearly two years. The key
Speaker 1: driver robust consumer spending Brian Well.
Speaker 2: Chinese Foreign Minister Wang Yie is said to be meeting
Speaker 2: President Joe Biden on Friday. Bloomberg's Bonnie Ao has the
Speaker 2: story from Hong Kong.
Speaker 10: Once visiting Washington may lay the groundwork for a potential
Speaker 10: meeting between the US and Chinese leaders. Biden has four
Speaker 10: months said he hoped to meet President She in the fall.
Speaker 10: The anticipation comes as geopolitical ties between the two nations
Speaker 10: are showing optimism, but Chinese officials have so far declined
Speaker 10: to confirm She's attendance. At the APEX summit. Wan will
Speaker 10: also be meeting Secretary of State Anthony Blencoln and National
Speaker 10: Security Advisor Jake Sullivan. We hear the US side is
Speaker 10: planning to raise the subject of the Israe Hamas war
Speaker 10: in Hong Kong and Bonnie Al Bloomberg Radio.
Speaker 2: Eleven minutes past the hour. I'm Brian Curtis with Paul Allen,
Speaker 2: and we say good morning to Gene Munster, managing partner
Speaker 2: at deep Water Asset Management. Gene, thanks very much for
Speaker 2: being with us. So we have a couple of wars
Speaker 2: to consider a very intriguing macro environment and earnings. Let's
Speaker 2: start with earnings. On my scorecard, at least on the
Speaker 2: initial response to the earnings from the Super seven that
Speaker 2: have got so much attention this year, I got three positive,
Speaker 2: three negative. But the market overall has been negative. Your
Speaker 2: thoughts on how to frame this.
Speaker 11: Well, it's definitely been negative. And I think that we
Speaker 11: need to think what's going to happen over the next three,
Speaker 11: six and twelve months. And over the next three months
Speaker 11: when it comes to tech, we're probably going to see
Speaker 11: interest rates stay pretty much where they're at now. They
Speaker 11: may go up a little bit, but they're unlikely to
Speaker 11: go down. And I think that that is first and
Speaker 11: foremost as a deep water we think about our investments
Speaker 11: in tech, that dynamic is going to be a headwind
Speaker 11: to I think how some of this tech is going
Speaker 11: to perform. The macro does matter? Just go back and
Speaker 11: look at what's happened with the Nasdaq, the Russell five
Speaker 11: hundred as since talks of rates going higher have impacted
Speaker 11: of course these stocks, and as far as the geopolitical
Speaker 11: piece to it, that had a particular potent impact on
Speaker 11: what happened with Meta yesterday and specifically shares were up
Speaker 11: in the after hours after the report of their quarter
Speaker 11: and then after the CFO Susan Lee mentioned softness in
Speaker 11: the first few weeks with the conflict in the Middle
Speaker 11: East that sent shares down six percent, And so ultimately,
Speaker 11: as these do matter relative to interest rates and what
Speaker 11: some of the macro commentary is, and so it is
Speaker 11: something we're keeping it a close eye on. We do
Speaker 11: focus good news here, we do focus on where the
Speaker 11: world is going, and ultimately I think the companies that
Speaker 11: are benefiting from that will ultimately pull through this.
Speaker 13: Yet you point on those price movements. I mean, we've
Speaker 13: had Matter off about seven and a half percent over
Speaker 13: the past two days, Alphabet off about twelve percent in
Speaker 13: the same period. If you think about you know, this
Speaker 13: notion that okay rights might be high for longer than
Speaker 13: market seems to have wrapped us hit around that. But
Speaker 13: one of those other big themes AI it's not going away.
Speaker 13: When you see those sorts of dips, do you buy.
Speaker 11: I think you do. And part of the reason is
Speaker 11: we do. I would say that deep water. I think
Speaker 11: the question that I would ask is how much do
Speaker 11: you believe in how transformative AI will be. From our perspective,
Speaker 11: we don't think we've even started. There's people that say
Speaker 11: we're in an AI bubble. We don't think we're anything
Speaker 11: even close to it. I can go through the numbers
Speaker 11: that support that, but I think more importantly is we've
Speaker 11: seen one massive shift which is relative to Nvidia's business.
Speaker 11: Intel tonight reported and their shares were up seven percent.
Speaker 11: So the hardware piece is having a benefit here, but
Speaker 11: the broader benefit about how this can create new business
Speaker 11: lines and prove engagement create higher profit margins for companies.
Speaker 11: That's something that's going to take three, five, ten years.
Speaker 11: And so yes, I think that if you have patients,
Speaker 11: you own some of these companies, and I think the
Speaker 11: biggest ones, the one we're most optimistic about. The two
Speaker 11: is relative to Google and Meta that should benefit for
Speaker 11: the next five years around this theme. So absolutely, I
Speaker 11: would say a slightly different way is it's hard to
Speaker 11: understate the significance that AI is going to have on
Speaker 11: these companies in the next five years.
Speaker 2: Gene optimization was a big theme this year for many,
Speaker 2: most notably at Meta, but others as well. Is that
Speaker 2: still the case for these companies, or are we starting
Speaker 2: to see now any kind of uptick in spending in
Speaker 2: capex and an investment.
Speaker 11: They're still using the language and meta use the language
Speaker 11: about optimization Microsoft, Google, They talk about this, but that
Speaker 11: the kind of the we're hitting. The second derivative here,
Speaker 11: in other words, is that we've had most of the
Speaker 11: improvement has happened around profitability. Amazon tonight had some impressive
Speaker 11: upside to margins. But the bigger picture is that we're
Speaker 11: through the year of optimization, the year of improving efficiencies,
Speaker 11: and I think that the focus is going to turn
Speaker 11: much more back to growth. And I'll just give a
Speaker 11: quick example of a support to that is that Amazon
Speaker 11: reported they absolutely crushed the earnings estimates, and the stock
Speaker 11: initially was up and then it went down because the
Speaker 11: AWS segment, which is a smaller part of their business,
Speaker 11: but it's kind of the signature of a growth opportunity
Speaker 11: that miss numbers. And then on their earnings call just recently,
Speaker 11: the CEO said that they've had a ton of bookings
Speaker 11: in the month of September, hinting that the growth will
Speaker 11: reaccelerate in the December quarter, and sure enough, shares went
Speaker 11: up basically immediately four percent on that, and I think
Speaker 11: that speaks to we have turned the page from the
Speaker 11: year of efficiency a few quarters ago. Now we're back
Speaker 11: to the year of growth power by AI.
Speaker 13: We've also heard from s K Heinex until this week.
Speaker 13: Do you feel like the bottoms and in terms of
Speaker 13: cyclical memory ship amount, I think.
Speaker 11: That's a little bit more of a mystery because I
Speaker 11: think that there is the macro. I do think we
Speaker 11: are going to go to a recession. I think that's
Speaker 11: the market is properly factoring then to a lot of
Speaker 11: retail stocks. Even though their businesses are doing well, the
Speaker 11: stocks are down. That means that the market is anticipating
Speaker 11: some sort of a slow down. I think just consumer
Speaker 11: still hangs in there, but eventually in the next six
Speaker 11: to twelve months, I think it will pull back. Doesn't
Speaker 11: impact the big AI opportunity, but I think from a
Speaker 11: lot of these chips in memory, I think you could
Speaker 11: see a slode on. So simply put, I don't think
Speaker 11: the bottom's in.
Speaker 2: This is Bloomberg Daybreak Asia, your morning brief on the
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