WEBVTT - Amazon Beats Estimates, S&P 500 Falls to Lowest in Months

0:00:02.400 --> 0:00:05.640
<v Speaker 1>Good morning. I'm Brian Curtis and I'm Doug Krisner. Here

0:00:05.680 --> 0:00:07.360
<v Speaker 1>are the stories we're following today.

0:00:08.039 --> 0:00:11.280
<v Speaker 2>Iran is warning the US it will not be spared

0:00:11.320 --> 0:00:15.160
<v Speaker 2>if the Israel Hamas war spreads at Baxter has Global

0:00:15.240 --> 0:00:17.959
<v Speaker 2>News from the nine to sixty newsroom in San Francisco, And.

0:00:18.200 --> 0:00:20.440
<v Speaker 3>Yeah, that's right, Brian. On the warning goes both ways.

0:00:20.440 --> 0:00:24.200
<v Speaker 3>Iran's Foreign Minister Hossein amir Ad de Halahan saying that

0:00:24.440 --> 0:00:28.480
<v Speaker 3>un IS the US is over seeing genocide against the

0:00:28.520 --> 0:00:32.560
<v Speaker 3>Palestinian people and says quote, I warn if the genocide

0:00:32.560 --> 0:00:35.400
<v Speaker 3>in Gaza continues, they will not be spared these fires.

0:00:35.920 --> 0:00:39.839
<v Speaker 3>US Secretary of Saint Anthony Blinkot, also addressing the UN.

0:00:39.800 --> 0:00:44.600
<v Speaker 4>If Iran or its proxies attack US personnel anywhere, make

0:00:44.680 --> 0:00:48.640
<v Speaker 4>no mistake. We will defend our people. We will defend

0:00:48.640 --> 0:00:52.120
<v Speaker 4>our security swiftly and decisively, and.

0:00:52.200 --> 0:00:54.760
<v Speaker 3>Calls on the other member nations to send Iran a

0:00:54.800 --> 0:00:59.040
<v Speaker 3>loud and clear message that it should not expand the war. Meanwhile,

0:00:59.320 --> 0:01:03.240
<v Speaker 3>National Secureity Council spokesman John Kirby says aid into Palestine

0:01:03.400 --> 0:01:04.280
<v Speaker 3>is moving slowly.

0:01:04.440 --> 0:01:08.360
<v Speaker 4>Since the twenty first of this month, some seventy four

0:01:08.880 --> 0:01:11.720
<v Speaker 4>trucks have now gotten in twelve over just the last

0:01:11.800 --> 0:01:12.960
<v Speaker 4>twenty four hours.

0:01:13.319 --> 0:01:16.800
<v Speaker 3>Not enough, and he says that it really needs to

0:01:16.840 --> 0:01:20.600
<v Speaker 3>go faster. Meanwhile, Ukraine, he says, the military has been

0:01:20.640 --> 0:01:23.320
<v Speaker 3>able to hold onto the defense against the Russian campaign

0:01:23.360 --> 0:01:26.280
<v Speaker 3>and the reports of unarrest in Russian forces.

0:01:26.400 --> 0:01:29.760
<v Speaker 5>We have information that the Russian military has been actually

0:01:29.880 --> 0:01:32.800
<v Speaker 5>executing soldiers who refuse to follow orders.

0:01:33.319 --> 0:01:35.839
<v Speaker 3>Kirby says more aid for Ukraine has needed as well.

0:01:36.600 --> 0:01:38.959
<v Speaker 3>The man hunt in Maine for the suspect of the

0:01:39.000 --> 0:01:41.840
<v Speaker 3>mass shooting that has left eighteen people dead and thirteen

0:01:41.959 --> 0:01:46.199
<v Speaker 3>injured is massive. The manhunt is Mayn's governor, Janet Mills

0:01:46.200 --> 0:01:49.040
<v Speaker 3>says concern for safety is still very high.

0:01:49.080 --> 0:01:49.360
<v Speaker 6>Today.

0:01:49.440 --> 0:01:52.200
<v Speaker 5>Main state police have issued a shelter in place order

0:01:52.800 --> 0:01:58.280
<v Speaker 5>for Lewiston, Lisbon and Bowden as the man hunt for

0:01:58.360 --> 0:02:02.880
<v Speaker 5>that person of interest, Robert Card of Boden, continues, and.

0:02:02.920 --> 0:02:06.360
<v Speaker 3>Some schools and colleges also remain under lockdown. The White

0:02:06.440 --> 0:02:08.920
<v Speaker 3>House is calling on the new Speaker, Mike Johnson to

0:02:08.919 --> 0:02:13.000
<v Speaker 3>start work immediately on gun legislation. This is a spokesman

0:02:13.240 --> 0:02:14.480
<v Speaker 3>a Krein Jean Pierre.

0:02:14.560 --> 0:02:18.919
<v Speaker 7>Let's work together to ban assault weapons and high capacity magazines.

0:02:19.280 --> 0:02:24.160
<v Speaker 7>Let's work together to enact universal background checks, require safe

0:02:24.160 --> 0:02:27.440
<v Speaker 7>storage of guns, and keep guns out of the hands

0:02:27.480 --> 0:02:31.880
<v Speaker 7>of criminals and dangerous individuals who have no business being

0:02:32.000 --> 0:02:33.880
<v Speaker 7>armed with a weapon of war.

0:02:34.240 --> 0:02:37.560
<v Speaker 3>And Johnson responds, prayer is the answer.

0:02:37.600 --> 0:02:38.960
<v Speaker 1>This is a dark time in America.

0:02:39.200 --> 0:02:44.000
<v Speaker 8>We have a lot of problems, and we're really really

0:02:44.280 --> 0:02:45.400
<v Speaker 8>hopeful and fearful.

0:02:46.320 --> 0:02:47.960
<v Speaker 9>Prayer is appropriate at a time like this.

0:02:48.240 --> 0:02:51.480
<v Speaker 3>And Vice President Kamala Harris as another American community torn

0:02:51.480 --> 0:02:53.320
<v Speaker 3>apart by gun violence in our.

0:02:53.280 --> 0:02:59.240
<v Speaker 10>Country today, the leading cause of death of American children

0:02:59.320 --> 0:02:59.960
<v Speaker 10>is gun violent.

0:03:00.440 --> 0:03:04.400
<v Speaker 3>Yeah, so they're all calling for legislation. President Joe Biden

0:03:04.440 --> 0:03:07.560
<v Speaker 3>said to me with China's Foreign Minister wangy Tomorrow, Wang

0:03:07.560 --> 0:03:09.800
<v Speaker 3>in the US to try to rough over some rough

0:03:09.919 --> 0:03:12.600
<v Speaker 3>edges with the potential of a higher level meeting at APEX.

0:03:12.639 --> 0:03:15.520
<v Speaker 3>But Bloomberg'snick Wadham says, the goal for the US is

0:03:15.600 --> 0:03:17.600
<v Speaker 3>just making things personal.

0:03:17.919 --> 0:03:20.440
<v Speaker 11>So what you're really seeing is an administration that wants

0:03:20.520 --> 0:03:22.960
<v Speaker 11>to get things back on track and do what Joe

0:03:23.000 --> 0:03:26.480
<v Speaker 11>Biden likes best, which is those interpersonal relationships with other

0:03:26.840 --> 0:03:27.720
<v Speaker 11>leaders around the world.

0:03:27.960 --> 0:03:30.000
<v Speaker 3>We'll have more details on the meeting in just a

0:03:30.000 --> 0:03:33.520
<v Speaker 3>couple of minutes, Taiwan says China's carrier strike group is

0:03:33.560 --> 0:03:37.280
<v Speaker 3>crossing the Abashi channel and that it is very dangerous situation.

0:03:37.400 --> 0:03:40.640
<v Speaker 3>China's Defense Ministry is pushing back, saying Taiwan is moving

0:03:40.680 --> 0:03:45.520
<v Speaker 3>in a dangerous direction, using the words dangerous situation of

0:03:45.560 --> 0:03:49.040
<v Speaker 3>war at an accelerated pace. This after reports the Taipei

0:03:49.080 --> 0:03:52.760
<v Speaker 3>plans to buy military drones. Global News twenty four hours

0:03:52.720 --> 0:03:54.880
<v Speaker 3>a day, whenever you want it with Bloomberg News Now

0:03:54.920 --> 0:03:57.760
<v Speaker 3>in San Francisco. I'm at Baxter and this is Bloomberg.

0:03:58.040 --> 0:04:00.440
<v Speaker 2>I'm Brian Curtis, along with Doug Krisner. Paul Alan will

0:04:00.520 --> 0:04:03.160
<v Speaker 2>join us shortly. We take a look here at some

0:04:03.400 --> 0:04:05.600
<v Speaker 2>of the top business stories of the hour and the

0:04:05.640 --> 0:04:09.480
<v Speaker 2>effect on markets. Amazon reporting third quarter revenue and profit

0:04:09.560 --> 0:04:13.360
<v Speaker 2>that topped analyst expectations as thanks to rising sales in

0:04:13.360 --> 0:04:18.240
<v Speaker 2>the company's retail advertising and cloud computing units reaction from

0:04:18.279 --> 0:04:19.480
<v Speaker 2>Bloomberg's poonam goil.

0:04:20.720 --> 0:04:24.479
<v Speaker 6>They posted really robust online gains here double digits for

0:04:24.600 --> 0:04:27.480
<v Speaker 6>the third party, which is obviously impressive at twenty percent,

0:04:27.600 --> 0:04:30.240
<v Speaker 6>and then on their own online sales, a one pe

0:04:30.400 --> 0:04:33.159
<v Speaker 6>business you know you mentioned up seven percent and I

0:04:33.200 --> 0:04:36.000
<v Speaker 6>think that's very healthy considering the environment that we're in,

0:04:36.360 --> 0:04:39.080
<v Speaker 6>so I think they're on track to deliver a good holiday.

0:04:39.200 --> 0:04:42.320
<v Speaker 6>Keep in mind that last year the comparers are much

0:04:42.360 --> 0:04:45.799
<v Speaker 6>easier because they did a report a two percent decline

0:04:45.880 --> 0:04:49.520
<v Speaker 6>in online sales, so easy compares plus a good start

0:04:49.520 --> 0:04:52.279
<v Speaker 6>to holiday with the results that they're reporting bodes well

0:04:52.320 --> 0:04:54.480
<v Speaker 6>for them as they move into the fourth quarter.

0:04:55.480 --> 0:04:58.839
<v Speaker 2>That's poonum goil. The results today provided more evidence of

0:04:58.960 --> 0:05:04.360
<v Speaker 2>Amazon's cost cutting efforts. Amazon spending on sales and marketing declined,

0:05:04.480 --> 0:05:08.880
<v Speaker 2>and that's the first since at least twenty fifteen. Amazon

0:05:08.960 --> 0:05:12.320
<v Speaker 2>shares really buffeted in late trading, first up, then down

0:05:12.360 --> 0:05:14.840
<v Speaker 2>a little, and at the moment trading higher by three

0:05:14.920 --> 0:05:15.960
<v Speaker 2>point four percent.

0:05:16.400 --> 0:05:18.880
<v Speaker 1>We also heard from Intel after the bell, and there

0:05:18.880 --> 0:05:22.200
<v Speaker 1>really no shortage of positive remarks. The stock as a result,

0:05:22.279 --> 0:05:24.920
<v Speaker 1>is up eight point six percent in the late US session.

0:05:25.320 --> 0:05:28.800
<v Speaker 1>Intel is now predicting a return to sales growth in

0:05:28.839 --> 0:05:31.719
<v Speaker 1>the fourth quarter. We have more from Bloomberg's Charlie Pellett.

0:05:32.480 --> 0:05:35.640
<v Speaker 9>The quarter was fueled by an improving PC market and

0:05:35.760 --> 0:05:39.640
<v Speaker 9>a more competitive product line. Intel said sales in the

0:05:39.680 --> 0:05:43.559
<v Speaker 9>period will be fourteen point six billion to fifteen point

0:05:43.600 --> 0:05:47.279
<v Speaker 9>six billion dollars that compares with an average analyst estimate

0:05:47.320 --> 0:05:51.520
<v Speaker 9>of fourteen point four billion. The upbeat outlook shows growing

0:05:51.640 --> 0:05:55.800
<v Speaker 9>momentum for Intel's turnaround efforts under CEO Pat Gelsinger. The

0:05:55.839 --> 0:05:59.040
<v Speaker 9>company has said that the PC market, its biggest business

0:05:59.120 --> 0:06:01.840
<v Speaker 9>unit by ship uns, is through the worst of a

0:06:02.000 --> 0:06:05.680
<v Speaker 9>historic slump caused by a build up in inventory in

0:06:05.800 --> 0:06:09.320
<v Speaker 9>New York. Charlie Pello Bloomberg Radio Well.

0:06:09.360 --> 0:06:12.480
<v Speaker 2>Ford Motor has said that or It reported earnings that

0:06:12.560 --> 0:06:16.640
<v Speaker 2>fell short of third quarter expectations, and it comes just

0:06:16.680 --> 0:06:19.400
<v Speaker 2>after the automaker agreed to a twenty five percent wage

0:06:19.480 --> 0:06:22.400
<v Speaker 2>hike and a tentative deal to end the UAW strike.

0:06:22.680 --> 0:06:24.640
<v Speaker 2>We get more Now from Bloomberg's Tom Busby.

0:06:25.200 --> 0:06:28.640
<v Speaker 8>It was a difficult quarter for Ford despite strong auto sales,

0:06:28.760 --> 0:06:31.880
<v Speaker 8>especially for its gas powered models, but adjusted ernix per

0:06:31.880 --> 0:06:34.919
<v Speaker 8>share were thirty nine cents, well below the forty seven

0:06:35.000 --> 0:06:38.440
<v Speaker 8>cents analysts expected, but because of higher sticker prices for

0:06:38.560 --> 0:06:42.480
<v Speaker 8>its revenue forty three point eight billion dollars was better

0:06:42.520 --> 0:06:45.599
<v Speaker 8>than forecast. Ford's CEO Jim Farley said in the statement

0:06:45.640 --> 0:06:48.400
<v Speaker 8>that the company is now quote radically changing how we

0:06:48.440 --> 0:06:51.680
<v Speaker 8>work in order to deal with some unspecified cost and

0:06:51.760 --> 0:06:55.240
<v Speaker 8>quality issues. The automaker also said the six week long

0:06:55.240 --> 0:06:58.680
<v Speaker 8>strike has costed one point three billion dollars so far.

0:06:59.200 --> 0:07:00.920
<v Speaker 9>Tom buzzby Bloomberg Radio.

0:07:01.640 --> 0:07:04.359
<v Speaker 2>Ford shares traded down a little more than four percent

0:07:04.520 --> 0:07:07.920
<v Speaker 2>in after hours. And separately, we're hearing that the UAW

0:07:08.000 --> 0:07:11.239
<v Speaker 2>has offered a new contract proposal to General Motors similar

0:07:11.280 --> 0:07:14.640
<v Speaker 2>to the tentative agreement with Ford. The automaker is said

0:07:14.680 --> 0:07:18.160
<v Speaker 2>to be preparing a counter offer for Thursday or Friday.

0:07:18.720 --> 0:07:18.920
<v Speaker 9>Well.

0:07:18.920 --> 0:07:21.040
<v Speaker 1>In the last few months, we have seen a surge

0:07:21.200 --> 0:07:23.840
<v Speaker 1>in treasury bond yields at the long end, and today

0:07:24.080 --> 0:07:27.280
<v Speaker 1>Treasury Secretary Janet Yellen said this move is not being

0:07:27.360 --> 0:07:30.800
<v Speaker 1>driven by a widening fiscal deficit. Here she is speaking

0:07:30.840 --> 0:07:31.840
<v Speaker 1>earlier with Bloomberg.

0:07:32.640 --> 0:07:37.760
<v Speaker 12>We're seeing yields go up in most advanced countries. Part

0:07:37.800 --> 0:07:42.120
<v Speaker 12>of the increase in yields, I think is simply a

0:07:42.160 --> 0:07:45.800
<v Speaker 12>reflection of the strength of the economy, the notion that

0:07:45.920 --> 0:07:48.160
<v Speaker 12>interest rates will be higher for longer.

0:07:48.280 --> 0:07:51.880
<v Speaker 1>Treasury Secretary Janet Yellen there. She spoke hours after the

0:07:51.960 --> 0:07:55.880
<v Speaker 1>GDP report for the third quarter showed the American economy

0:07:55.880 --> 0:07:58.760
<v Speaker 1>grew at an annual rate of four point nine percent.

0:07:58.840 --> 0:08:01.800
<v Speaker 1>That is the fastest in nearly two years. The key

0:08:01.880 --> 0:08:05.640
<v Speaker 1>driver robust consumer spending Brian Well.

0:08:05.720 --> 0:08:08.360
<v Speaker 2>Chinese Foreign Minister Wang Yie is said to be meeting

0:08:08.440 --> 0:08:11.960
<v Speaker 2>President Joe Biden on Friday. Bloomberg's Bonnie Ao has the

0:08:12.000 --> 0:08:13.080
<v Speaker 2>story from Hong Kong.

0:08:13.720 --> 0:08:16.880
<v Speaker 10>Once visiting Washington may lay the groundwork for a potential

0:08:16.920 --> 0:08:20.160
<v Speaker 10>meeting between the US and Chinese leaders. Biden has four

0:08:20.200 --> 0:08:22.840
<v Speaker 10>months said he hoped to meet President She in the fall.

0:08:23.240 --> 0:08:26.679
<v Speaker 10>The anticipation comes as geopolitical ties between the two nations

0:08:26.680 --> 0:08:30.560
<v Speaker 10>are showing optimism, but Chinese officials have so far declined

0:08:30.600 --> 0:08:34.079
<v Speaker 10>to confirm She's attendance. At the APEX summit. Wan will

0:08:34.080 --> 0:08:37.320
<v Speaker 10>also be meeting Secretary of State Anthony Blencoln and National

0:08:37.360 --> 0:08:40.319
<v Speaker 10>Security Advisor Jake Sullivan. We hear the US side is

0:08:40.400 --> 0:08:42.840
<v Speaker 10>planning to raise the subject of the Israe Hamas war

0:08:43.360 --> 0:08:45.640
<v Speaker 10>in Hong Kong and Bonnie Al Bloomberg Radio.

0:08:46.840 --> 0:08:50.240
<v Speaker 2>Eleven minutes past the hour. I'm Brian Curtis with Paul Allen,

0:08:50.400 --> 0:08:53.120
<v Speaker 2>and we say good morning to Gene Munster, managing partner

0:08:53.120 --> 0:08:56.280
<v Speaker 2>at deep Water Asset Management. Gene, thanks very much for

0:08:56.320 --> 0:08:58.280
<v Speaker 2>being with us. So we have a couple of wars

0:08:58.320 --> 0:09:03.400
<v Speaker 2>to consider a very intriguing macro environment and earnings. Let's

0:09:03.400 --> 0:09:07.160
<v Speaker 2>start with earnings. On my scorecard, at least on the

0:09:07.200 --> 0:09:10.840
<v Speaker 2>initial response to the earnings from the Super seven that

0:09:10.880 --> 0:09:13.400
<v Speaker 2>have got so much attention this year, I got three positive,

0:09:13.800 --> 0:09:18.840
<v Speaker 2>three negative. But the market overall has been negative. Your

0:09:18.880 --> 0:09:20.160
<v Speaker 2>thoughts on how to frame this.

0:09:21.480 --> 0:09:24.040
<v Speaker 11>Well, it's definitely been negative. And I think that we

0:09:24.160 --> 0:09:26.520
<v Speaker 11>need to think what's going to happen over the next three,

0:09:26.679 --> 0:09:30.160
<v Speaker 11>six and twelve months. And over the next three months

0:09:30.200 --> 0:09:33.240
<v Speaker 11>when it comes to tech, we're probably going to see

0:09:33.280 --> 0:09:36.199
<v Speaker 11>interest rates stay pretty much where they're at now. They

0:09:36.200 --> 0:09:38.760
<v Speaker 11>may go up a little bit, but they're unlikely to

0:09:38.800 --> 0:09:41.320
<v Speaker 11>go down. And I think that that is first and

0:09:41.360 --> 0:09:44.119
<v Speaker 11>foremost as a deep water we think about our investments

0:09:44.160 --> 0:09:46.920
<v Speaker 11>in tech, that dynamic is going to be a headwind

0:09:46.960 --> 0:09:49.040
<v Speaker 11>to I think how some of this tech is going

0:09:49.080 --> 0:09:52.280
<v Speaker 11>to perform. The macro does matter? Just go back and

0:09:52.320 --> 0:09:55.160
<v Speaker 11>look at what's happened with the Nasdaq, the Russell five

0:09:55.240 --> 0:09:59.679
<v Speaker 11>hundred as since talks of rates going higher have impacted

0:10:00.120 --> 0:10:04.400
<v Speaker 11>of course these stocks, and as far as the geopolitical

0:10:04.480 --> 0:10:08.920
<v Speaker 11>piece to it, that had a particular potent impact on

0:10:08.960 --> 0:10:13.320
<v Speaker 11>what happened with Meta yesterday and specifically shares were up

0:10:13.400 --> 0:10:15.480
<v Speaker 11>in the after hours after the report of their quarter

0:10:15.920 --> 0:10:19.960
<v Speaker 11>and then after the CFO Susan Lee mentioned softness in

0:10:20.000 --> 0:10:22.880
<v Speaker 11>the first few weeks with the conflict in the Middle

0:10:22.920 --> 0:10:27.400
<v Speaker 11>East that sent shares down six percent, And so ultimately,

0:10:27.440 --> 0:10:30.920
<v Speaker 11>as these do matter relative to interest rates and what

0:10:31.040 --> 0:10:33.920
<v Speaker 11>some of the macro commentary is, and so it is

0:10:33.960 --> 0:10:37.000
<v Speaker 11>something we're keeping it a close eye on. We do

0:10:37.120 --> 0:10:39.560
<v Speaker 11>focus good news here, we do focus on where the

0:10:39.600 --> 0:10:42.560
<v Speaker 11>world is going, and ultimately I think the companies that

0:10:42.960 --> 0:10:46.079
<v Speaker 11>are benefiting from that will ultimately pull through this.

0:10:47.360 --> 0:10:50.240
<v Speaker 13>Yet you point on those price movements. I mean, we've

0:10:50.240 --> 0:10:52.480
<v Speaker 13>had Matter off about seven and a half percent over

0:10:52.480 --> 0:10:55.280
<v Speaker 13>the past two days, Alphabet off about twelve percent in

0:10:55.320 --> 0:10:57.760
<v Speaker 13>the same period. If you think about you know, this

0:10:58.440 --> 0:11:00.880
<v Speaker 13>notion that okay rights might be high for longer than

0:11:00.880 --> 0:11:02.800
<v Speaker 13>market seems to have wrapped us hit around that. But

0:11:02.840 --> 0:11:05.960
<v Speaker 13>one of those other big themes AI it's not going away.

0:11:06.120 --> 0:11:13.200
<v Speaker 13>When you see those sorts of dips, do you buy.

0:11:10.679 --> 0:11:13.280
<v Speaker 11>I think you do. And part of the reason is

0:11:13.679 --> 0:11:16.040
<v Speaker 11>we do. I would say that deep water. I think

0:11:16.040 --> 0:11:18.640
<v Speaker 11>the question that I would ask is how much do

0:11:18.679 --> 0:11:23.119
<v Speaker 11>you believe in how transformative AI will be. From our perspective,

0:11:23.160 --> 0:11:25.720
<v Speaker 11>we don't think we've even started. There's people that say

0:11:25.720 --> 0:11:27.680
<v Speaker 11>we're in an AI bubble. We don't think we're anything

0:11:27.720 --> 0:11:29.840
<v Speaker 11>even close to it. I can go through the numbers

0:11:29.880 --> 0:11:33.080
<v Speaker 11>that support that, but I think more importantly is we've

0:11:33.080 --> 0:11:38.080
<v Speaker 11>seen one massive shift which is relative to Nvidia's business.

0:11:38.120 --> 0:11:41.360
<v Speaker 11>Intel tonight reported and their shares were up seven percent.

0:11:41.760 --> 0:11:44.720
<v Speaker 11>So the hardware piece is having a benefit here, but

0:11:44.800 --> 0:11:48.280
<v Speaker 11>the broader benefit about how this can create new business

0:11:48.280 --> 0:11:52.600
<v Speaker 11>lines and prove engagement create higher profit margins for companies.

0:11:52.960 --> 0:11:55.920
<v Speaker 11>That's something that's going to take three, five, ten years.

0:11:55.960 --> 0:11:59.000
<v Speaker 11>And so yes, I think that if you have patients,

0:11:59.520 --> 0:12:01.319
<v Speaker 11>you own some of these companies, and I think the

0:12:01.360 --> 0:12:04.120
<v Speaker 11>biggest ones, the one we're most optimistic about. The two

0:12:04.280 --> 0:12:07.439
<v Speaker 11>is relative to Google and Meta that should benefit for

0:12:07.520 --> 0:12:11.280
<v Speaker 11>the next five years around this theme. So absolutely, I

0:12:11.320 --> 0:12:14.400
<v Speaker 11>would say a slightly different way is it's hard to

0:12:14.920 --> 0:12:17.640
<v Speaker 11>understate the significance that AI is going to have on

0:12:18.080 --> 0:12:19.720
<v Speaker 11>these companies in the next five years.

0:12:20.679 --> 0:12:24.160
<v Speaker 2>Gene optimization was a big theme this year for many,

0:12:24.240 --> 0:12:27.920
<v Speaker 2>most notably at Meta, but others as well. Is that

0:12:28.040 --> 0:12:31.040
<v Speaker 2>still the case for these companies, or are we starting

0:12:31.080 --> 0:12:34.640
<v Speaker 2>to see now any kind of uptick in spending in

0:12:35.000 --> 0:12:37.079
<v Speaker 2>capex and an investment.

0:12:38.960 --> 0:12:42.640
<v Speaker 11>They're still using the language and meta use the language

0:12:42.960 --> 0:12:47.680
<v Speaker 11>about optimization Microsoft, Google, They talk about this, but that

0:12:48.120 --> 0:12:50.679
<v Speaker 11>the kind of the we're hitting. The second derivative here,

0:12:50.679 --> 0:12:52.600
<v Speaker 11>in other words, is that we've had most of the

0:12:52.640 --> 0:12:56.960
<v Speaker 11>improvement has happened around profitability. Amazon tonight had some impressive

0:12:57.520 --> 0:13:01.880
<v Speaker 11>upside to margins. But the bigger picture is that we're

0:13:02.040 --> 0:13:05.920
<v Speaker 11>through the year of optimization, the year of improving efficiencies,

0:13:06.400 --> 0:13:08.480
<v Speaker 11>and I think that the focus is going to turn

0:13:08.559 --> 0:13:10.199
<v Speaker 11>much more back to growth. And I'll just give a

0:13:10.280 --> 0:13:14.560
<v Speaker 11>quick example of a support to that is that Amazon

0:13:14.640 --> 0:13:18.840
<v Speaker 11>reported they absolutely crushed the earnings estimates, and the stock

0:13:18.880 --> 0:13:21.360
<v Speaker 11>initially was up and then it went down because the

0:13:21.480 --> 0:13:24.720
<v Speaker 11>AWS segment, which is a smaller part of their business,

0:13:24.720 --> 0:13:28.480
<v Speaker 11>but it's kind of the signature of a growth opportunity

0:13:28.800 --> 0:13:32.280
<v Speaker 11>that miss numbers. And then on their earnings call just recently,

0:13:32.600 --> 0:13:35.680
<v Speaker 11>the CEO said that they've had a ton of bookings

0:13:35.720 --> 0:13:38.560
<v Speaker 11>in the month of September, hinting that the growth will

0:13:38.559 --> 0:13:41.600
<v Speaker 11>reaccelerate in the December quarter, and sure enough, shares went

0:13:41.679 --> 0:13:44.800
<v Speaker 11>up basically immediately four percent on that, and I think

0:13:44.840 --> 0:13:49.040
<v Speaker 11>that speaks to we have turned the page from the

0:13:49.120 --> 0:13:51.920
<v Speaker 11>year of efficiency a few quarters ago. Now we're back

0:13:51.960 --> 0:13:53.920
<v Speaker 11>to the year of growth power by AI.

0:13:54.800 --> 0:13:57.959
<v Speaker 13>We've also heard from s K Heinex until this week.

0:13:58.000 --> 0:14:00.880
<v Speaker 13>Do you feel like the bottoms and in terms of

0:14:00.920 --> 0:14:06.600
<v Speaker 13>cyclical memory ship amount, I think.

0:14:07.120 --> 0:14:08.880
<v Speaker 11>That's a little bit more of a mystery because I

0:14:08.920 --> 0:14:12.200
<v Speaker 11>think that there is the macro. I do think we

0:14:12.240 --> 0:14:14.160
<v Speaker 11>are going to go to a recession. I think that's

0:14:14.240 --> 0:14:17.120
<v Speaker 11>the market is properly factoring then to a lot of

0:14:17.160 --> 0:14:20.120
<v Speaker 11>retail stocks. Even though their businesses are doing well, the

0:14:20.160 --> 0:14:23.479
<v Speaker 11>stocks are down. That means that the market is anticipating

0:14:23.520 --> 0:14:25.560
<v Speaker 11>some sort of a slow down. I think just consumer

0:14:26.040 --> 0:14:28.200
<v Speaker 11>still hangs in there, but eventually in the next six

0:14:28.200 --> 0:14:30.680
<v Speaker 11>to twelve months, I think it will pull back. Doesn't

0:14:30.720 --> 0:14:33.800
<v Speaker 11>impact the big AI opportunity, but I think from a

0:14:33.800 --> 0:14:35.680
<v Speaker 11>lot of these chips in memory, I think you could

0:14:35.760 --> 0:14:39.160
<v Speaker 11>see a slode on. So simply put, I don't think

0:14:39.200 --> 0:14:39.840
<v Speaker 11>the bottom's in.

0:14:41.200 --> 0:14:44.080
<v Speaker 2>This is Bloomberg Daybreak Asia, your morning brief on the

0:14:44.120 --> 0:14:47.800
<v Speaker 2>story's making news from Hong Kong to Singapore and Wall Street.

0:14:47.920 --> 0:14:51.920
<v Speaker 1>Look for us on your podcast feed every day on Apple, Spotify,

0:14:52.160 --> 0:14:54.200
<v Speaker 1>and anywhere else you get your podcasts.

0:14:54.400 --> 0:14:57.040
<v Speaker 2>You can also listen live each day on Bloomberg eleven

0:14:57.080 --> 0:14:59.440
<v Speaker 2>three to zero in New York, Bloomberg ninety nine to

0:14:59.480 --> 0:15:02.720
<v Speaker 2>one in Washing Washington, Bloomberg one oh sixty one in Boston,

0:15:03.000 --> 0:15:05.479
<v Speaker 2>and Bloomberg nine sixty in San Francisco.

0:15:05.800 --> 0:15:08.720
<v Speaker 1>Our flagship New York station is also available on your

0:15:08.760 --> 0:15:14.120
<v Speaker 1>Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

0:15:14.240 --> 0:15:17.640
<v Speaker 2>Listen coast to coast on the Bloomberg Business app, Sirius

0:15:17.800 --> 0:15:22.040
<v Speaker 2>XM Channel one nineteen, the iHeartRadio app, and on Bloomberg

0:15:22.120 --> 0:15:24.560
<v Speaker 2>dot Com. I'm Brian Curtis.

0:15:24.200 --> 0:15:26.600
<v Speaker 1>And I'm Doug Krisner. Join us again tomorrow for all

0:15:26.640 --> 0:15:29.120
<v Speaker 1>the news you need to start your day right here

0:15:29.200 --> 0:15:32.720
<v Speaker 1>on Bloomberg day Break Asia