WEBVTT - Tech Earnings Disappoint; Trump Sends Mixed Signals on Xi Meeting

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Good morning, I'm Nathan Hager and I'm Karen Moscow. Here

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<v Speaker 2>are the stories we're following today.

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<v Speaker 3>Karen, we begin with some big tech earnings disappointments, starting

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<v Speaker 3>with Netflix. Those shares are down nearly seven percent in

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<v Speaker 3>early trading. The world's most valuable entertainment company posted quarterly

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<v Speaker 3>operating income of almost three hund a quarter billion dollars

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<v Speaker 3>that was about four hundred million below analyst estimates. Netflix

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<v Speaker 3>says a tax dispute with Brazil cut into its third

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<v Speaker 3>quarter results. On the company conference call, Netflix co CEO

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<v Speaker 3>Ted Sarandos address speculation the company's weighing bids for parts

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<v Speaker 3>of Warner Brothers Discovery.

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<v Speaker 4>We've been very clear in the past that we have

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<v Speaker 4>no interest in owning legacy media networks, so there is

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<v Speaker 4>no change there. But in general, we believe that we

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<v Speaker 4>can be and we will be choosy. We have a

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<v Speaker 4>great business. We're predominantly focused on growing organically, investing aggressively

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<v Speaker 4>and responsibly into the growth, and returning access cash flow

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<v Speaker 4>to shareholders through our shot to share repurchase.

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<v Speaker 3>Netflix co CEO Ted Sarando says the company had to

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<v Speaker 3>pay about six hundred and nineteen million dollars to settle

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<v Speaker 3>a multi year tax dispute with Brazil going back to

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<v Speaker 3>twenty twenty two. He says the company would have beaten

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<v Speaker 3>forecasts if not for that expense.

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<v Speaker 2>Nathan. Another earnings disappointment has shares of Texas Instruments down

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<v Speaker 2>almost nine percent. The biggest maker of analog chips gave

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<v Speaker 2>a lackluster forecast for the current period, adding to concern

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<v Speaker 2>that a ship industry recovery is sputtering well.

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<v Speaker 3>Staying in tech, Karen Bloomberg News has learned Google is

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<v Speaker 3>in talks for a mega deal with artificial intelligence company

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<v Speaker 3>and Thropic. Let's get the very latest on that with

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<v Speaker 3>Bloomberg's John Tucker.

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<v Speaker 5>John, good morning, Good morning, Nathan. You have the race

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<v Speaker 5>for AI dominance may have gotten more intense. If this

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<v Speaker 5>deal goes through, Google would provide Anthropic with computing power

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<v Speaker 5>worth tens of billions of dollars. It would allow Anthropic

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<v Speaker 5>to use Google's chip's custom designed to accelerate machine learning workloads,

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<v Speaker 5>and it would further cement the relationship between Google and

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<v Speaker 5>the AI startup founded in twenty twenty one by former

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<v Speaker 5>Open Ai employees San Francisco based Anthropic, best known for

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<v Speaker 5>its Claud family of large language models, which compete directly

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<v Speaker 5>with Open Ai. Google has previously invested about three billion

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<v Speaker 5>dollars in Anthropic and Google parent Alphabet up one point

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<v Speaker 5>two percent pre market, New York. I'm John Tucker, Bloomberg Radio.

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<v Speaker 2>All right, John, thank you. We turned now to commodities,

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<v Speaker 2>where gold and silver are rebounding from yesterday's selloff. Gold

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<v Speaker 2>fell nearly six percent yesterday for its biggest inter day

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<v Speaker 2>drop in more than a dozen years. At one point,

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<v Speaker 2>silver was down almost nine percent. Mike mcgloone covers commodities

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<v Speaker 2>for Bloomberg Intelligence.

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<v Speaker 6>Right now, it's just a little bit of profit taking,

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<v Speaker 6>But it's what's happening in gold that's very disconcerting. As

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<v Speaker 6>of yesterday, it was up sixty six percent in the year.

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<v Speaker 6>That put it among the top four of the last

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<v Speaker 6>one hundred years, with only nineteen seventy nine, seventy three,

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<v Speaker 6>and seventy four ahead of it, So it's very expensive.

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<v Speaker 6>At the same time, crude oil was down about twenty percent.

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<v Speaker 6>That disparity around eighty six percent has never happened.

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<v Speaker 2>It's never been that extreme in Bloombergy Intelligence Mike McGlone

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<v Speaker 2>checking prices of gold right now Comec's gold is down

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<v Speaker 2>about two tenths of up percent at four thousand, one

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<v Speaker 2>hundred dollars announced. Silver is down about a third of

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<v Speaker 2>up percent.

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<v Speaker 3>Let's get to the latest, Karen. On the trade front,

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<v Speaker 3>President Trump is sending a mixed message ahead of a

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<v Speaker 3>possible meeting with Chinese President Shi Jin Pink During a

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<v Speaker 3>White House rose guard in lunch with Senate Republicans, the

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<v Speaker 3>President said the terifrate on Chinese exports would be about

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<v Speaker 3>one hundred and fifty five percent by November first, if

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<v Speaker 3>they don't make a deal.

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<v Speaker 7>Now, we're going to have a fair deal. I think

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<v Speaker 7>we're going to have a very successful meeting. Certainly, there

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<v Speaker 7>are a lot of people that are waiting for it.

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<v Speaker 7>Maybe it won't happen. Maybe it won't happen. Things can

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<v Speaker 7>happen where for instance, maybe somebody will say I don't

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<v Speaker 7>want to meet. It's too nasty, But it's really not nasty.

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<v Speaker 7>It's just business.

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<v Speaker 3>President Trump says he wants to make a good deal

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<v Speaker 3>with China, but he says it has to be fair.

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<v Speaker 3>Treasury Secretary Scott Bessett plans to meet with his Chinese

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<v Speaker 3>counterpart over the weekend before the talks between Presidents Trump

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<v Speaker 3>and she. Those are expected at the APEX summit in

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<v Speaker 3>South Korea, though the date and time have not yet

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<v Speaker 3>been announced.

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<v Speaker 2>Nathan India and the US are reportedly near a trade

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<v Speaker 2>deal that could lower tariffs on Indian exports to fifteen

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<v Speaker 2>to sixteen percent from about fifty percent. The newspaper is

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<v Speaker 2>reporting India may agree to gradually reduce its imports of

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<v Speaker 2>Russian oil as part of the deal and allow the

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<v Speaker 2>US to export more non genetically modified corn and soymeal.

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<v Speaker 3>Overnight, Karen Russia launched multiple drone and missile strikes on Ukraine,

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<v Speaker 3>as a planned second summit between President Trump and Russian

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<v Speaker 3>President Vladimir Putin is thrown into jeopardy. The President address

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<v Speaker 3>that possible meeting yesterday.

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<v Speaker 8>I don't want to have a wasted meeting. I don't

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<v Speaker 8>want to have a wasted time. So I'll see what happened.

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<v Speaker 8>But when I said, go to the line, go to

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<v Speaker 8>the line of the battle on the battlefield lines, and

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<v Speaker 8>you pull back and you go home, and everybody takes

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<v Speaker 8>some time off because you have two countries that are

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<v Speaker 8>killing each other, two countries are losing five to seven

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<v Speaker 8>thousand soldiers a week, So we'll see what happens. It's

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<v Speaker 8>we haven't made a determination.

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<v Speaker 3>Ar President Trump had said he planned to meet with

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<v Speaker 3>President Putin in Budapest in the coming weeks.

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<v Speaker 2>Now, Nathan to a report that's raising conflict of interest

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<v Speaker 2>questions at the White House. According to The New York Times,

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<v Speaker 2>President Trump is demanding the Justice Department pay him about

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<v Speaker 2>two hundred and thirty million dollars for past investigations against him.

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<v Speaker 2>That includes the probes into Russian interference in the twenty

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<v Speaker 2>sixteen campaign and the FBI search of his Mara Lago home.

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<v Speaker 2>President Trump appeared to acknowledge the report when he was

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<v Speaker 2>asked about it in the Oval Office.

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<v Speaker 8>We have numerous cases having to do with the fraud

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<v Speaker 8>of the election, the twenty twenty election, and because of

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<v Speaker 8>every thing that we found out, I guess they owe

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<v Speaker 8>me a lot of money.

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<v Speaker 2>By President Trump says if he gets the money, he

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<v Speaker 2>would give it to charity or use it to restore

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<v Speaker 2>the White House. Any decisions about paying the president's claims

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<v Speaker 2>would be made by senior Justice Department officials, some of

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<v Speaker 2>whom could be the president's own personal lawyers. The Justice

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<v Speaker 2>Department says all its officials followed the guidance of career

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<v Speaker 2>ethics officials.

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<v Speaker 3>Let's turn back to the markets and earnings now, Karen,

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<v Speaker 3>We're watching shares of Barclays. They're up about four percent.

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<v Speaker 3>In Europe, the British lender raised its earnings guidance for

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<v Speaker 3>this year and unveiled a five hundred million dollar stock buyback.

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<v Speaker 3>We spoke with CEO CS van Kata Christian.

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<v Speaker 9>We had a top line beat of eleven percent growth

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<v Speaker 9>yere over year to seven point two billion. On the

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<v Speaker 9>top line, we've had nine percent consecutive quarters of tangible

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<v Speaker 9>net value growth.

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<v Speaker 3>CEOCS van Kada Christian says Barclays is conducting a review

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<v Speaker 3>of its entire Lorn portfolio after the collapse of Tricolor holdings.

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<v Speaker 2>On the economic front, Nathan UK inflation unexpectedly held steady

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<v Speaker 2>in September after food bills fell for the first time

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<v Speaker 2>in sixteen months. Consumer prices rose three point eight percent

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<v Speaker 2>from a year earlier. Data is fueling market bets on

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<v Speaker 2>a Bank of England interest rate cut before the end

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<v Speaker 2>of the year. Time now for a look at some

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<v Speaker 2>of the other stories making news in New York and

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<v Speaker 2>around the world. And for that we're joined by Blueberrys

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<v Speaker 2>and Michael Bahr or Michael good.

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<v Speaker 10>Morning, Good morning Careen. It is now date twenty two

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<v Speaker 10>of the government shut down. Democrats say Republicans refuse to

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<v Speaker 10>negotiate on Democratic demands for health care funds. President Trump

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<v Speaker 10>says he'll discuss healthcare, but.

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<v Speaker 8>I'd love to meet with them. I just want them

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<v Speaker 8>to open up the country grace.

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<v Speaker 10>Senate Democratic Leader Chuck Schumer says he and the House

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<v Speaker 10>Minority leader have reached out to President Trump for a meeting.

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<v Speaker 11>People are just struck of the difficulty they will be

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<v Speaker 11>in not having health care, not being able to pay

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<v Speaker 11>the rent if they pay for health care. They're just

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<v Speaker 11>shocked at how bad this is. And Trump has an

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<v Speaker 11>obligation to negotiate with this solve this problem.

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<v Speaker 10>New York City's Canals Street vendors are nowhere to be seen,

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<v Speaker 10>at least for now. There was an immigration crackdown in

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<v Speaker 10>New York City as federal agents descended on Canal Street,

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<v Speaker 10>famous for its bargain shopping and knockoff designer goods, and

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<v Speaker 10>parts of Chinatown. The scene turned chaotic as agents made arrests.

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<v Speaker 10>New York City Mayor Eric Adams's office said this was

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<v Speaker 10>a federal action and the city officials were not involved

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<v Speaker 10>in the operation. President Trump said that Allied nations in

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<v Speaker 10>the Middle East were prepared to send troops into Gaza

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<v Speaker 10>to confront Hamas if the group did not cease its

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<v Speaker 10>alleged violations of his peace plan. There was violence just

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<v Speaker 10>days ago, prompting Vice President JD. Evans to make a

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<v Speaker 10>last minute trip to the Middle East.

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<v Speaker 3>There are going to be hills and valleys. There are

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<v Speaker 3>going to be moments where it looks like things aren't

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<v Speaker 3>going particularly well. But given that, and given the history

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<v Speaker 3>of conflict, I think that everybody should be proud of

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<v Speaker 3>where we are today.

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<v Speaker 10>Tonight is the second New York City mayoral debate Democrat

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<v Speaker 10>Zoron Mamdani, former Governor Andrew Cuomo, running as an independent

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<v Speaker 10>and Republican Curtis Sliva. We'll square off at LaGuardia Community College.

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<v Speaker 10>Global News twenty four hours a day and whenever you

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<v Speaker 10>want it with Bloomberg News Now. Michael barn This is

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<v Speaker 10>Bloomberg Karen.

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<v Speaker 2>Thanks Michael. Time now for our Bloomberg Sports update, and

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<v Speaker 2>for that we bring in John stash.

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<v Speaker 12>Hour thanks Aaron. Opening night of the NBA at Oklahoma City,

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<v Speaker 12>the thunder hoisted their championship banner, got their rings, and

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<v Speaker 12>for the sixth time ever a season opener went to

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<v Speaker 12>double overtime. First time it's happened in two thousand and five.

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<v Speaker 12>OKC beat Houston five to one twenty four. Last year's MVP,

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<v Speaker 12>Shay Gildess Alexander scored thirty five points, the only five

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<v Speaker 12>at halftime. Golden State the Lakers one nineteen to one

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<v Speaker 12>oh nine. Kurt Suzuki, former Major League catcher never been

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<v Speaker 12>a coach or manager, named the new manager of the

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<v Speaker 12>La Angels. That's your Bloomberg Sports Update.

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<v Speaker 2>Stay with us more from Bloomberg day Break coming up

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<v Speaker 2>after this.

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<v Speaker 1>Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 1>and around the world on Bloomberg dot Com and the

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<v Speaker 1>Bloomberg Business Appum. This is Bloomberg Daybreak.

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<v Speaker 3>Good morning, I'm Nathan Hager. Investors were expecting a solid

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<v Speaker 3>quarter from Netflix, and they mostly got it after the

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<v Speaker 3>release of Kpop Demon Hunters and some other big hits

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<v Speaker 3>during the quarter gone by. But a tax dispute with

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<v Speaker 3>Brazil is putting a hit on the results for the

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<v Speaker 3>streaming giant.

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<v Speaker 5>Let's get more now.

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<v Speaker 3>We're joined by Bloomberg Intelligence Senior Media and Tech analyst

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<v Speaker 3>Matthew Bloxham. Matt, good morning. We are seeing a big

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<v Speaker 3>drop in Netflix shares. Could this tax dispute be an

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<v Speaker 3>ongoing overhang for Netflix? Is that what we're seeing in

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<v Speaker 3>the price reaction this morning?

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<v Speaker 13>Yeah, you know what, I think it's a bit of

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<v Speaker 13>a red hirang. I mean that they would quiet say

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<v Speaker 13>yesterday and saying that they didn't expect this dispute to

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<v Speaker 13>have any impact on for profits. I think what we're

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<v Speaker 13>seeing is more of a reaction to, you know, an

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<v Speaker 13>inline performance, particularly on the top line, and I think

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<v Speaker 13>people were expecting something a bit better than what they

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<v Speaker 13>delivered on the back of that slate of popular and

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<v Speaker 13>well received content and which also included a widely viewed

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<v Speaker 13>live boxing event. So I think, you know, people just

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<v Speaker 13>thought they'd done enough to boost the momentum just a

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<v Speaker 13>bit more than they're guided to and we just saw

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<v Speaker 13>it in line. And so I think it's just a

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<v Speaker 13>little bit of a reaction to you know, that kind

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<v Speaker 13>of whisper number being a bit better. But yeah, it

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<v Speaker 13>came in a bit short.

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<v Speaker 3>And coming into these earnings, there's been all this you know,

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<v Speaker 3>speculation around what's going to happen with Warner Brothers Discovery.

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<v Speaker 3>The reports confirmed that the Netflix is part of that discussion.

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<v Speaker 3>Does it need to be more a part of that

0:11:48.920 --> 0:11:52.560
<v Speaker 3>discussion to get investors more enthused about this stock?

0:11:52.640 --> 0:11:52.880
<v Speaker 1>Now?

0:11:55.559 --> 0:11:58.520
<v Speaker 13>I think, you know, the investors are probably a little

0:11:58.559 --> 0:12:00.800
<v Speaker 13>bit more evenly balanced, what I mean. And again, Netflix

0:12:00.880 --> 0:12:05.760
<v Speaker 13>were clear yesterday that the majority of their growth will

0:12:05.800 --> 0:12:08.439
<v Speaker 13>be organic and they'll look at these deals where they

0:12:08.440 --> 0:12:10.760
<v Speaker 13>make sense. So you know, I don't think they're in

0:12:10.760 --> 0:12:14.439
<v Speaker 13>a position where they just need to buy a studios

0:12:14.480 --> 0:12:16.120
<v Speaker 13>business for the sake of it to kind of keep

0:12:16.120 --> 0:12:17.960
<v Speaker 13>them in the game to scale up. They have scale,

0:12:18.240 --> 0:12:22.120
<v Speaker 13>They're clearly a great producer of content, So I think

0:12:22.160 --> 0:12:25.160
<v Speaker 13>investor will be looking at them to be you know,

0:12:26.160 --> 0:12:29.719
<v Speaker 13>careful and cautious and consider about any transaction that they

0:12:29.760 --> 0:12:32.760
<v Speaker 13>were to make. Clearly, you know, it can bring some

0:12:32.800 --> 0:12:36.400
<v Speaker 13>strategic benefit to them, but price is going to be

0:12:36.559 --> 0:12:38.120
<v Speaker 13>an important factor for them here.

0:12:38.880 --> 0:12:40.960
<v Speaker 3>And in terms of the content coming up, We've got

0:12:41.040 --> 0:12:45.760
<v Speaker 3>the next season of Stranger Things, some other big blockbuster

0:12:45.960 --> 0:12:48.240
<v Speaker 3>hits that I think Netflix is hoping you're going to

0:12:48.520 --> 0:12:51.200
<v Speaker 3>pay off for them. What's the outlook going forward?

0:12:52.240 --> 0:12:54.439
<v Speaker 13>Yeah, I mean, you know, Netflix is still by far

0:12:54.440 --> 0:12:58.680
<v Speaker 13>and away that the leading streaming platform. We've seen a

0:12:58.760 --> 0:13:02.160
<v Speaker 13>number of other streaming platforms struggle to some degree. Is

0:13:02.200 --> 0:13:06.480
<v Speaker 13>what's going on Warner Brothers. So, you know, I think

0:13:06.600 --> 0:13:11.160
<v Speaker 13>that they've got a great rhythm of producing content and

0:13:11.679 --> 0:13:15.679
<v Speaker 13>building the customer base and also pushing through pricing creases.

0:13:15.679 --> 0:13:18.480
<v Speaker 13>And obviously they've got the ads business, which is still

0:13:18.760 --> 0:13:24.040
<v Speaker 13>relatively young but expanding, and that that's going to continue

0:13:24.080 --> 0:13:25.760
<v Speaker 13>to be an extra leg of growth of them. So

0:13:27.200 --> 0:13:30.720
<v Speaker 13>as streaming platforms go, they're in a very strong position.

0:13:31.280 --> 0:13:33.360
<v Speaker 3>Just about a minute left here, but we got some

0:13:33.600 --> 0:13:36.439
<v Speaker 3>pretty significant news, it seems, in the tech space, with

0:13:36.520 --> 0:13:39.920
<v Speaker 3>this report from Bloomberg News that Google's making a deal

0:13:39.960 --> 0:13:43.360
<v Speaker 3>on cloud compute power with Anthropic. What's your read on that.

0:13:44.160 --> 0:13:47.800
<v Speaker 13>Yeah, so Anthropic obviously a big rival to open Ai.

0:13:48.400 --> 0:13:52.480
<v Speaker 13>Anthropics large language models called Claude. We're going to have

0:13:52.480 --> 0:13:55.480
<v Speaker 13>to wait to see the details of this transaction media.

0:13:55.800 --> 0:13:58.960
<v Speaker 13>The bloombook story talks about the deal worth tens of

0:13:59.000 --> 0:14:03.360
<v Speaker 13>billions of die I think, you know, we've seen a

0:14:03.400 --> 0:14:08.240
<v Speaker 13>lot of so called circular deals in in the AI

0:14:08.320 --> 0:14:10.720
<v Speaker 13>space recently, so this can be interesting whether this is

0:14:10.760 --> 0:14:13.240
<v Speaker 13>like just more of a straightforward commercial deal or whether

0:14:13.280 --> 0:14:17.360
<v Speaker 13>there's essentially an exchange of equity for the services Google

0:14:17.480 --> 0:14:20.800
<v Speaker 13>is going to provide. Now, Google is already an investor

0:14:20.800 --> 0:14:24.320
<v Speaker 13>of the tune of three billion dollars into Anthropic, but

0:14:24.400 --> 0:14:27.800
<v Speaker 13>it's also sits alongside a co investor that's Amazon, and

0:14:27.880 --> 0:14:31.000
<v Speaker 13>so far Amazon's been a big provider of the kind

0:14:31.000 --> 0:14:34.600
<v Speaker 13>of cloud services to Anthropic, and this is going to

0:14:34.600 --> 0:14:38.200
<v Speaker 13>take some of that business away from from Amazon going forward.

0:14:38.240 --> 0:14:40.200
<v Speaker 13>So I think it. You know, we'll have to wait

0:14:40.240 --> 0:14:42.560
<v Speaker 13>to see the details in the structure of the transaction,

0:14:42.760 --> 0:14:46.000
<v Speaker 13>but in big picture terms, it looks like a good

0:14:46.040 --> 0:14:48.920
<v Speaker 13>deal for Google in terms of boosting their cloud business.

0:14:50.360 --> 0:14:53.800
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