WEBVTT - Apple, Amazon Fall and Zuckerberg's Big Day

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<v Speaker 1>Live from the Bloomberg Interactor Berger Studios. Is that Bloomberg

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<v Speaker 1>day Break for Friday, February three, coming up today. US

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<v Speaker 1>future slide after disappointing earnings from Apple, Amazon, and Alphabet,

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<v Speaker 1>A busy week for the economy culminates in today's monthly

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<v Speaker 1>jobs report. Kathy Wood makes a bold claim on investing

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<v Speaker 1>in tech and potential changes at Nordstrom sees shares at

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<v Speaker 1>the department store surge. The suspected Chinese by balloon has

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<v Speaker 1>been spotted over US airspace. Plus the killer of a

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<v Speaker 1>New Jersey councilwoman is still on the loops. I'm Michael

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<v Speaker 1>blar More Ahead, I'm John stas Shower. In sports, the

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<v Speaker 1>next held on for a two point winning home over Miami.

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<v Speaker 1>Julius Randall named at NBA All Star. That's All's train

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<v Speaker 1>ahead on Bloomberg day Break on Bloomberg eleven three, on

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<v Speaker 1>New York, Bloomberg one, Washington, d C, Bloomberg one oh

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<v Speaker 1>six one, Boston, Bloomberg nine sixties, and Francisco Sirius x

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<v Speaker 1>M one nineteen and around the world on Bloomberg Radio

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<v Speaker 1>dot Com and via The Bloomberg Business. Good Morning, I'm

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<v Speaker 1>Nathan Hagar. And I'm kerin Moscow. Here are the stories

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<v Speaker 1>we're following today. We begin with earnings from a trio

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<v Speaker 1>of tech heavyweights weighing on markets this morning. Let's start

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<v Speaker 1>with Apple. The shares are down more than three percent

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<v Speaker 1>after the company reported its worst holiday performance in four years.

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<v Speaker 1>Supply chain issues and an economic slump are being blamed

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<v Speaker 1>for weaker iPhone sales. Here CEO Tim Cook, as a

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<v Speaker 1>result of a challenging environment, our revenue was down five

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<v Speaker 1>percent year over year. We remain confident in and focused

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<v Speaker 1>on the long term opportunities. Apple CEO Tim Cook says

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<v Speaker 1>there are signs of a rebound in China. He also

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<v Speaker 1>says production problems are subsiding. Shares of Amazon also taking

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<v Speaker 1>a hit this morning, Nathan, They're down to five and

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<v Speaker 1>a half per cent. The company is protecting lackluster revenue

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<v Speaker 1>for the current quarter. That's causing rory that the company's

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<v Speaker 1>e commerce business has stalled. Sales growth has slowed in

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<v Speaker 1>the cloud computing division. CEO Andy Jasse says curbing spending

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<v Speaker 1>is his top goal. Probably the number one priority that

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<v Speaker 1>I spend time with the team on is reducing our

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<v Speaker 1>costs to serve in our operations network. Amazon CEO Andy

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<v Speaker 1>Jazz started a new round of job cuts last month

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<v Speaker 1>and that will eliminate eighteen thousand positions and rounding out

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<v Speaker 1>the Big three. Karen. Shares of Alphabet are also falling

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<v Speaker 1>down about four percent after fourth quarter earnings missed estimates.

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<v Speaker 1>Let's get the details live with Bloomberg. Steve Rappaport. Good morning, Steve,

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<v Speaker 1>Good morning, Nathan, and Karen. Google's parent company reported fourth

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<v Speaker 1>quarter sales of sixty three point one billion dollars a

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<v Speaker 1>million dollars shy of expectations based on data compiled by Bloomberg.

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<v Speaker 1>The lackluster results come as Google's core advertising businesses under

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<v Speaker 1>scrutiny from the Justice Department. It also faces competition from

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<v Speaker 1>emerging players such as Open Ai, s Chat, GPT. Alphabet

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<v Speaker 1>acknowledges the challenges ahead Live in New York. I'm Steve Rappaport,

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<v Speaker 1>Bloomberg Daybreak. A right, Steve. Thanks. So we're also seeing

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<v Speaker 1>earnings disappointments outside of big tech. Shares a ford Or

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<v Speaker 1>down more than six percent after profit fell short of estimates.

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<v Speaker 1>For it has been ramping up electric vehicle production while

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<v Speaker 1>struggling to make money on its plug in models. We

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<v Speaker 1>have a flip side Karen. Shares of Nordstrom are surging

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<v Speaker 1>this morning. They're up thirty percent. Bloomberg News has learned

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<v Speaker 1>Meme stock investor Ryan Cohen has built a sizeable steak

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<v Speaker 1>in the department. Short chain. Sources say Cohen's trying to

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<v Speaker 1>replace at least one of Nordstrom's directors. Yesterday was a

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<v Speaker 1>big one for Mark Zuckerberg. By the end of the day,

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<v Speaker 1>Nathan the Facebook CEO, saw his fortune jump by more

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<v Speaker 1>than twelve billion dollars, and we get the story from

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<v Speaker 1>Bloomberg Shirley Pellett. The surge came after he vowed twenty

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<v Speaker 1>three will be quote the year of efficiency for his

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<v Speaker 1>social media giant Metal platforms. The thirty eight year old

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<v Speaker 1>CEO is rebounding from his worst year on record, with

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<v Speaker 1>his wealth tumbling from a peak of one two billion

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<v Speaker 1>dollars in September of one. According to Bloomberg Data, Zuckerberg

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<v Speaker 1>now has a net worth of about sixty nine point

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<v Speaker 1>eight billion dollars in New York. Charlie Pellette Bloomberg Daybreak,

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<v Speaker 1>Thanks Charlie. Well, another billionaire has lost a massive amount

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<v Speaker 1>of wealth this week. Got Tomadonni's Empire has now lost

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<v Speaker 1>more than half its market value since that report from

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<v Speaker 1>Hindenburg Research. The short seller accuses a Donnia fraud. So far,

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<v Speaker 1>more than a hundred eighteen billion dollars have been raised

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<v Speaker 1>from the value of the ten stocks tied to a

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<v Speaker 1>Donny back. Here in the US, Nathan, a big name

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<v Speaker 1>on Wall Street, is weighing in on last year's text

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<v Speaker 1>sell off. Our investment CEO Cathy would and midst two

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<v Speaker 1>was a horrific year for her flagship innovation et F,

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<v Speaker 1>but Wood is making a bold claim about her fund's

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<v Speaker 1>long term potential. Oh, by the way, we are the

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<v Speaker 1>new Nastack, which is one of the ways we were

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<v Speaker 1>trying to convey look if you want to look at

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<v Speaker 1>the future and truly disruptive innovation the way the Nasdack,

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<v Speaker 1>the NASDAC performed in the eighties and nineties, that's where

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<v Speaker 1>we went and our investments. Kathy Wood says she still

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<v Speaker 1>thinks bitcoin will top a million dollars in the next decade.

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<v Speaker 1>She spoke with Carol Masser and Tim Stenovic on Bloomberg

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<v Speaker 1>Business Week and catch the show weekdays at two pm

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<v Speaker 1>on Bloomberg Radio or watch it live on YouTube. Let's

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<v Speaker 1>turn away from tech specifically now, Karen and focus on

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<v Speaker 1>the broader economy. It's been all about the Fed this week,

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<v Speaker 1>but today it's about jobs. We get the government's monthly

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<v Speaker 1>employment report for January this morning, and we get a

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<v Speaker 1>preview now from Bloomberg Economics correspondent Michael McKee. Payroll of

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<v Speaker 1>forecasts ranged from one thousand all the way up to

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<v Speaker 1>three hundred twenty thousand, but most are skewed to the downside.

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<v Speaker 1>The number that matters most will be average hourly earnings.

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<v Speaker 1>The Fed sees wage pressures as the biggest inflation danger.

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<v Speaker 1>Now economists see unemployment continuing to be the dog that

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<v Speaker 1>didn't mark. Just a small tick up in the jobless

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<v Speaker 1>rate forecast. Michael McKee, Bloomberg Daybreak. All right, Michael, thank you.

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<v Speaker 1>And in Europe this week, the Bank of England height

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<v Speaker 1>rates once again, but now the central Bank is signaling

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<v Speaker 1>they may be nearing the end of tightening. That's the

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<v Speaker 1>message markets took away from Andrew Bailey, but now he's

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<v Speaker 1>sounding a little less sure. The b o A governor

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<v Speaker 1>sat down for an interview with Bloomberg's Francy Laquax after

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<v Speaker 1>this latest policy decision. We all kind of react to

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<v Speaker 1>the information and the evidence that we see. We're not

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<v Speaker 1>on We're not we haven't pre announced an intention because

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<v Speaker 1>we have reached a point in as I've said for

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<v Speaker 1>I think we have started to turn a corner that's encouraging.

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<v Speaker 1>There's a long way to go and there are a

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<v Speaker 1>lot of risks. Policymakers led by Andrew Bailey, voted seven

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<v Speaker 1>to two to raise interest rates by fifty basis points.

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<v Speaker 1>It's thirty two degrees in Central Park. It's gonna stay

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<v Speaker 1>cold today. Early highs in the thirties. Temperatures will fall

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<v Speaker 1>through the afternoon. By tonight, we're gonna be down in

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<v Speaker 1>the single digits. But with the wind chill, it's gonna

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<v Speaker 1>feel even colder. And it's gonna look at some of

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<v Speaker 1>the other stories making news in New York and around

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<v Speaker 1>the world with Bloomberg's Michael Barr, Good morning, Michael, Good morning, Nathan.

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<v Speaker 1>The US and China are facing a number of diplomatic

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<v Speaker 1>and geopolitical prompt Bloomberg said, backs to report, you can

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<v Speaker 1>add a Chinese high altitude spy balloon. The Pentagon says

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<v Speaker 1>for several days it has made its way over the

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<v Speaker 1>northern US. Pentagon spokesman Brigadier General Pat Ryder says a

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<v Speaker 1>Pentagon has decided not to shoot it down. Balloon is

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<v Speaker 1>currently traveling at an altitude well above commercial air traffic

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<v Speaker 1>and does not present a military or physical threat to

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<v Speaker 1>people on the ground. Instances of this kind of balloon

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<v Speaker 1>activity have been observed previously over the past several years,

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<v Speaker 1>and writer says they will not say where it is

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<v Speaker 1>now in San Francisco. I'm at Baxter Bloomberg Daybreak. Investigators

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<v Speaker 1>in say or Ville, New Jersey, so far have no

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<v Speaker 1>motive and no arrests in the shocking apparent targeted murder

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<v Speaker 1>of a local councilwoman. Thirty year old Unitst One four,

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<v Speaker 1>who had only recently taken office, was discovered dead Wednesday

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<v Speaker 1>night in her SUV of multiple shot gun wounds. The

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<v Speaker 1>shot was sitting. She was shot while sitting behind the

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<v Speaker 1>wheel of her vehicle. House Republicans vote to kick Democratic

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<v Speaker 1>Congresswoman Iohan Omar off the Foreign Affairs Committee. Signing your

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<v Speaker 1>past comments viewed as anti submittee. House Speaker Kevin McCarthy

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<v Speaker 1>says their comments while serving on the committee could threaten

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<v Speaker 1>national security. It's not right, We were right in her action,

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<v Speaker 1>and she can serve on other committees, but it puts

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<v Speaker 1>America in jeopardy and I'm not going to do that

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<v Speaker 1>under my watch. However, Democratic Leader Hakim Jeffreys of New

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<v Speaker 1>York says Omar has sense apologize for those comments and

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<v Speaker 1>called out some House Republicans for their own comments, saying

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<v Speaker 1>that they are still remaining on committees fact stone matter

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<v Speaker 1>with this extreme Maga Republican majority. Hypocrisy is not a

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<v Speaker 1>constraint to their behavior and shamelessness. They believe is a

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<v Speaker 1>superpower and that will all be exposed for the American teacher.

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<v Speaker 1>Representative Jeffrey says the vote is payback for when Democrats

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<v Speaker 1>were in charge of the House. Natural gas prices skyrocketed

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<v Speaker 1>in New York and Boston has bitter cold as sends

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<v Speaker 1>that boost a man for the heating fuel. Next day

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<v Speaker 1>gas deliverieson to a section of the Iroquois gas pipeline

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<v Speaker 1>that Hall's Canadian gas into New York traded at a

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<v Speaker 1>twenty year high. Global News powered by more than journalists

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<v Speaker 1>and analysts and over a hundred twenty countries. Michael Barr

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<v Speaker 1>and this is Bloomberg. Nathan thank you, Michael. Time now

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<v Speaker 1>for our Bloomberg Sports up tape for I tries stayed out.

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<v Speaker 1>He Good morning, John Stanish, Morning Nathan. The Knicks have

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<v Speaker 1>lost a lot of home games this season. They've blown

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<v Speaker 1>a lot of leads. At the Garden, they led Miami

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<v Speaker 1>by five points with five seconds ago and nearly lost

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<v Speaker 1>the Heat hit a three pointer that a Nick turnover,

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<v Speaker 1>and Tyler Hero was nearly the hero, but he missed

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<v Speaker 1>the game winning three point and the Knicks survived one

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<v Speaker 1>of six one four. R J. Barrett, who in that

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<v Speaker 1>overtime recent loss of the Lakers, sat on the bench,

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<v Speaker 1>this time, led the Knicks with thirty points. Julius Randall

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<v Speaker 1>scored twenty three. His season has been much better than

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<v Speaker 1>it was a year ago, and Randall has been named

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<v Speaker 1>to play in the upcoming to the NBA All Star Game.

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<v Speaker 1>Jalen Brunson did not make it. Brunson didn't play last night.

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<v Speaker 1>He was outsick. There was a nasty fight in the

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<v Speaker 1>game between Memphis and Cleveland. Dylan Brooks and Donovan Mitchell

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<v Speaker 1>went at it and nearly spilled into the stands. Another

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<v Speaker 1>went for Denver, who leads the West seventeenth triple double

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<v Speaker 1>for Nicola. Yoki Jana's sons and the Compost scored fifty

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<v Speaker 1>four and a comeback win from Milwaukee. It's his third

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<v Speaker 1>fifty point game of the past month. Lebron James at

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<v Speaker 1>twenty six in a Laker when he now needs sixty

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<v Speaker 1>three points to become the NBA's all time leading score.

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<v Speaker 1>It is Super Bowl fifty seven. It is the first

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<v Speaker 1>where both quarterbacks Patrick Mahomes and Jalen Hurts are African American.

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<v Speaker 1>In Kansas City, Mahomes was asked about the significance, but

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<v Speaker 1>be on the world stage, Um, and uh, have two

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<v Speaker 1>black quarterbacks starting the Super Bowl. I think it's special.

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<v Speaker 1>And I've learned more and more about the history of

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<v Speaker 1>the black quarterbacks since I've been in this league, and uh,

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<v Speaker 1>the guys that came before me and Jalen set the

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<v Speaker 1>stage for this, and now I'm just glad that we

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<v Speaker 1>can kind of set the stage for guys that are

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<v Speaker 1>kids that are coming up now. Doug Williams was the

0:11:02.360 --> 0:11:05.000
<v Speaker 1>first Super Bowl black qub That was thirty five years ago.

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<v Speaker 1>John Stashwer Bloomberg Sports Live from coast to coast, from

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<v Speaker 1>New York to San Francisco, Boston to Washington, d C

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<v Speaker 1>nationwide on Sirius, xamp, the Bloomberg Business app, and Bloomberg

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<v Speaker 1>dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hagar,

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<v Speaker 1>and we are wrapping up a busy week for tech

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<v Speaker 1>earnings with a wave of disappointing results for the big

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<v Speaker 1>three a's in the sector. That would be Apple, Amazon,

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<v Speaker 1>and Google parent Alphabet. The latest sign that the economic

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<v Speaker 1>slowdown is crimping demand in just about every business that

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<v Speaker 1>these tech companies encompass. Let's get more insights this morning

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<v Speaker 1>from Dan Ives, managing director and senior analyst at web

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<v Speaker 1>Bush Securities, who has been a pretty bullish voice on

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<v Speaker 1>tech for some time. Dan, it's always great to speak

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<v Speaker 1>with you. We'll start with the company that you cover,

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<v Speaker 1>specifically Apple. The worst holiday quarter for the iPhone maker

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<v Speaker 1>in four years. Does that come as a surprise to you. Look,

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<v Speaker 1>I think it's really supply chain driven. I mean this

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<v Speaker 1>was not a demand issue. Was supply because of the

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<v Speaker 1>China COVID lockdown. They're seeing acceleration going into this quarter.

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<v Speaker 1>I think that really is going to take the street

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<v Speaker 1>by surprise and a positive And this was better than

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<v Speaker 1>see it overall. It's interesting though, because it wasn't so

0:12:23.600 --> 0:12:26.920
<v Speaker 1>long ago that exposure to China and the supply chain

0:12:26.960 --> 0:12:31.040
<v Speaker 1>issues there was seen as a pretty significant headwind for Apple,

0:12:31.080 --> 0:12:34.480
<v Speaker 1>and it's been trying to unwind some of those supply chains.

0:12:34.520 --> 0:12:36.360
<v Speaker 1>Do you think it's going to be a tailwind with

0:12:36.720 --> 0:12:40.440
<v Speaker 1>China reopening now? Well, I think you hit the nail

0:12:40.440 --> 0:12:42.680
<v Speaker 1>on the head. You're now starting to see a town

0:12:42.800 --> 0:12:46.600
<v Speaker 1>and emerged and and Tim Cook could have easily just

0:12:46.720 --> 0:12:51.240
<v Speaker 1>used a macro card and be massively conservative instead talked

0:12:51.240 --> 0:12:56.480
<v Speaker 1>about China accelerating and demand of course caution, but still firm.

0:12:56.920 --> 0:12:59.160
<v Speaker 1>That's not what the bears were open for. And that's

0:12:59.160 --> 0:13:02.120
<v Speaker 1>why I believe this the stock and you know, I'd

0:13:02.120 --> 0:13:04.000
<v Speaker 1>be shocked if it's not in the green by the

0:13:04.080 --> 0:13:06.560
<v Speaker 1>end of the day. Well, is there a possibility though,

0:13:06.640 --> 0:13:09.920
<v Speaker 1>given the economic headwinds that we're still seeing a lot

0:13:09.960 --> 0:13:13.480
<v Speaker 1>of consumers pulling back on some of their spending, that

0:13:13.679 --> 0:13:18.640
<v Speaker 1>consumer demand could crater in the months to come. Yeah, Look,

0:13:18.720 --> 0:13:21.880
<v Speaker 1>I think consumer then definitely could soften. And I think

0:13:21.880 --> 0:13:24.920
<v Speaker 1>that's that's already factor into this stock. And I think

0:13:24.920 --> 0:13:28.200
<v Speaker 1>too all these names, but you're talking about to come

0:13:28.240 --> 0:13:32.440
<v Speaker 1>bearing a two hundred fifty million iPhones that haven't been

0:13:32.559 --> 0:13:35.400
<v Speaker 1>upgrade in four years. That's why they have a golden

0:13:35.440 --> 0:13:38.600
<v Speaker 1>installed base, which makes them much more of a rocket

0:13:38.640 --> 0:13:43.520
<v Speaker 1>Gibraltar stock in this iCal economic storm. All right, let's

0:13:43.520 --> 0:13:46.120
<v Speaker 1>turn to Amazon. Do you see that as a rocket

0:13:46.160 --> 0:13:48.680
<v Speaker 1>Gibraltar stock as well? I mean they've been cutting costs

0:13:48.880 --> 0:13:53.079
<v Speaker 1>pretty significantly even before they reported earnings. Yeah, Amazon, when

0:13:53.080 --> 0:13:56.079
<v Speaker 1>they were spending money like nineties rock stars, and they

0:13:56.160 --> 0:13:59.200
<v Speaker 1>need the car costs now and that's what they're doing here.

0:13:59.760 --> 0:14:01.960
<v Speaker 1>And I think it's a tail of two cities. Cloud

0:14:02.120 --> 0:14:06.080
<v Speaker 1>continues to be strong for them, softening a bit like Microsoft,

0:14:06.240 --> 0:14:09.959
<v Speaker 1>but that is really a pillar strength the e commerce piece,

0:14:10.080 --> 0:14:12.680
<v Speaker 1>you know, that's still coming off, you know of what

0:14:12.880 --> 0:14:16.720
<v Speaker 1>was really almost a hangover coming off of covid in

0:14:16.840 --> 0:14:19.080
<v Speaker 1>terms of what they're seeing from growth. That's something they're

0:14:19.080 --> 0:14:22.320
<v Speaker 1>going to continue to grap with over the coming quarters.

0:14:22.320 --> 0:14:26.440
<v Speaker 1>How concerned should investors be that Andy Jesse is talking

0:14:26.480 --> 0:14:30.280
<v Speaker 1>about a slow down in growth for Amazon Web services?

0:14:30.440 --> 0:14:33.880
<v Speaker 1>Is the cloud sector for Amazon starting to lose some

0:14:33.960 --> 0:14:37.000
<v Speaker 1>ground against some of the competitors like Microsoft, Azure in

0:14:37.040 --> 0:14:41.040
<v Speaker 1>Google Cloud. Look, I think it's really redymen. It's what's

0:14:41.080 --> 0:14:45.760
<v Speaker 1>happening with Microsoft, they're gaining incremental share versus Amazon, and

0:14:46.040 --> 0:14:49.160
<v Speaker 1>you're also seeing Google as well as IBM and Oracle

0:14:49.240 --> 0:14:51.960
<v Speaker 1>and Cloud is slowing a bit, but when you look

0:14:52.000 --> 0:14:56.560
<v Speaker 1>at growth, you're still talking off a massive numbers. So

0:14:56.760 --> 0:15:00.400
<v Speaker 1>I think this is something that that's really dig tested.

0:15:00.920 --> 0:15:04.880
<v Speaker 1>Street overall was expecting much more arm and getting You've

0:15:04.880 --> 0:15:09.000
<v Speaker 1>got softness, but nothing I think that anyone thought would

0:15:09.240 --> 0:15:12.120
<v Speaker 1>be ultimately be seen when it comes to Amazon holding

0:15:12.160 --> 0:15:15.760
<v Speaker 1>up better than expected on Cloud, and in terms of Alphabet,

0:15:15.800 --> 0:15:19.480
<v Speaker 1>the Google parent a modest miss there, but another sign

0:15:19.520 --> 0:15:22.040
<v Speaker 1>of the tough digital ad environment that we've been talking

0:15:22.080 --> 0:15:24.960
<v Speaker 1>about as we've made our way through tech season. How

0:15:25.000 --> 0:15:28.520
<v Speaker 1>does Alphabet get through this rough patch? Yeah? I mean

0:15:28.560 --> 0:15:32.520
<v Speaker 1>YouTube are clearly softened a bit, and I think for

0:15:32.560 --> 0:15:37.080
<v Speaker 1>them it's really about navigating these digital advertising headwinds. But

0:15:37.160 --> 0:15:40.880
<v Speaker 1>they're cutting costs, cutting costs significantly. That's something the street

0:15:40.960 --> 0:15:45.080
<v Speaker 1>wants to see because you're preserving margin, preserving profitability, and

0:15:45.080 --> 0:15:47.880
<v Speaker 1>anythink just so much bad news is baking to these

0:15:47.920 --> 0:15:51.520
<v Speaker 1>tech names. You can't take a step back on Alphabet, Amazon,

0:15:51.920 --> 0:15:54.800
<v Speaker 1>of course, Apple better than fear, and I think these

0:15:54.800 --> 0:15:58.880
<v Speaker 1>stocks ultimately rally from here about thirty seconds here, Dan,

0:15:58.960 --> 0:16:01.160
<v Speaker 1>how long do you think in the tech sector is

0:16:01.200 --> 0:16:05.760
<v Speaker 1>going to need to be in this retrenchment mode. Look,

0:16:05.800 --> 0:16:09.600
<v Speaker 1>I think these companies were spending just assuming hyper growth

0:16:09.640 --> 0:16:12.640
<v Speaker 1>is going to continue. The clock struck midnight, and now

0:16:12.640 --> 0:16:15.600
<v Speaker 1>they're ripping the bandit off and cutting costs. But I

0:16:15.640 --> 0:16:17.840
<v Speaker 1>think now we're starting to get to a point where

0:16:17.880 --> 0:16:20.200
<v Speaker 1>over the coming months of the soft land he does

0:16:20.280 --> 0:16:24.040
<v Speaker 1>take cold these companies actually start hiring leader in the year,

0:16:24.440 --> 0:16:27.040
<v Speaker 1>And I think that's really the narrative here. Tech growth

0:16:27.160 --> 0:16:30.560
<v Speaker 1>is not falling off a cliff, it's softening. That's better

0:16:30.640 --> 0:16:34.080
<v Speaker 1>than feared, especially with the army getting like your expectations

0:16:34.080 --> 0:16:38.520
<v Speaker 1>going tech earning seed. This is Bloomberg day Break Today,

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