WEBVTT - Bloomberg Daybreak: October 27, 2022 - Hour 1 (Radio) 0:00:01.920 --> 0:00:05.199 Live from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:05.320 --> 0:00:09.360 day Break for Thursday, October seven two. Coming up this hour, 0:00:09.680 --> 0:00:13.360 shares of Meta plunge on another big tech earnings disappointment. 0:00:13.520 --> 0:00:16.599 Apple and Amazon or up Next sent a report this afternoon. 0:00:16.800 --> 0:00:19.880 Credit Suite sunveils a massive overhaul. We speak to the 0:00:19.920 --> 0:00:22.680 bank CEO, and the European Central Bank is set to 0:00:22.760 --> 0:00:25.279 raise rates to the highest level in more than a decade. 0:00:25.360 --> 0:00:29.600 New Jersey Senator Menendez faces another federal investigation. Plus President 0:00:29.640 --> 0:00:32.760 Biden warns Russia any nuclear attack but being an incredibly 0:00:32.840 --> 0:00:36.040 serious mistake. I'm Michael bar More Ahead, I'm done, standsdown 0:00:36.080 --> 0:00:38.800 Sports overtime at the Guard of the Nix speech Charlotte, 0:00:38.800 --> 0:00:43.519 the Nets Loft in Milwaukee. The Islanders shut out the Rangers. 0:00:44.479 --> 0:00:48.720 That's All's trading ahead on Bloomberg Daybreak on Bloomberg eleven, FREEO, 0:00:48.840 --> 0:00:53.279 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.280 --> 0:00:57.840 six one, Boston, Bloomberg nine sixties and Francisco Serious x 0:00:58.000 --> 0:01:00.880 M one nine team, and around the world on Bloomberg 0:01:00.960 --> 0:01:07.839 Radio dot Com and via The Bloomberg Business. Good morning, 0:01:07.840 --> 0:01:11.560 I'm Nathan Hagar and I'm Karen Moscow and SMP futures 0:01:11.600 --> 0:01:13.920 are higher this morning. We're coming up to five o 0:01:14.040 --> 0:01:15.800 one on Wall Street, and we check the markets every 0:01:15.800 --> 0:01:19.680 fifteen minutes throughout the trading day. On Bloomberg, SMP futures 0:01:19.760 --> 0:01:23.600 up nine points down, futures of one Nasdack future is 0:01:23.680 --> 0:01:27.400 lower down, twelve ten year treasury down fourteen thirty seconds, 0:01:27.440 --> 0:01:30.360 held four point oh five percent, and they yield on 0:01:30.400 --> 0:01:34.040 the two year four point four four percent. NIMEX screwed oil. 0:01:34.160 --> 0:01:38.640 That'll change, Nathan Karen. We begin with another tech earnings disappointment. 0:01:38.880 --> 0:01:41.760 A day after Microsoft and Google shares plunged. We are 0:01:41.760 --> 0:01:45.800 seeing shares of meta platforms down almost twenty percent this morning. 0:01:46.200 --> 0:01:48.640 The Facebook owner gave a revenue forecast on the low 0:01:48.760 --> 0:01:51.320 end of estimates, and we get more from Bloomberg's Ludlow 0:01:51.480 --> 0:01:53.680 in our nine sixty news room in San Francisco. What 0:01:53.840 --> 0:01:56.640 spooked investors, at least in the first instance, was the 0:01:56.640 --> 0:02:00.000 tepid forecast met To gave for sales in the current period. 0:02:00.160 --> 0:02:03.320 Revenue will be between thirty and thirty two point five 0:02:03.360 --> 0:02:06.200 billion dollars in the final three months of this year, 0:02:06.480 --> 0:02:09.320 below street expectations. And the story is when we know 0:02:09.440 --> 0:02:12.760 the softening ad market is hurting meta. We went into 0:02:12.840 --> 0:02:14.960 this knowing that would be the case, but as the 0:02:15.000 --> 0:02:17.760 cool started and went on, it became clear that actually 0:02:17.760 --> 0:02:22.600 what spooking investors is Meta and Zuckerberg's commitment to fuel 0:02:22.680 --> 0:02:26.920 and fund this transition to the metaverse. Zuckerberg said that actually, 0:02:26.919 --> 0:02:30.080 on a year on year basis, Meta reality labs would 0:02:30.080 --> 0:02:33.760 continue to have growing losses above lowth for Bloomberg News 0:02:33.880 --> 0:02:38.160 in San Francisco, alright, thanks, and big tech earnings continue today. 0:02:38.200 --> 0:02:40.679 We have a pair of giants reporting this afternoon, and 0:02:40.720 --> 0:02:44.440 Bloomberg Jeff Bellinger has more. Apple and Amazon are both 0:02:44.440 --> 0:02:47.840 scheduled to report after the market's closed today. Analysts at 0:02:47.880 --> 0:02:51.519 went Bush Securities say higher iPhone prices and an improving 0:02:51.560 --> 0:02:55.040 supply chain may have helped Apple beat revenue forecast. The 0:02:55.200 --> 0:02:59.359 of Ase Securities says Amazon likely posted faster revenue growth 0:02:59.400 --> 0:03:03.200 for unline stores and third party sellers, but both companies 0:03:03.240 --> 0:03:06.359 face headwinds. Ample is dealing with the stronger dollar and 0:03:06.440 --> 0:03:09.359 weakness in China, and a whole hum second Prime Day 0:03:09.400 --> 0:03:13.840 event at Amazon suggested more spending is going offline. Jeff 0:03:13.840 --> 0:03:17.320 Bellinger Bloomberg day break all right, Jeff. Thanks. As Karen mentioned, 0:03:17.360 --> 0:03:19.840 US futures are higher ahead of those earnings, and despite 0:03:20.000 --> 0:03:23.400 disappointing earnings from Meta. Morgan Stanley's Mike Wilson is a 0:03:23.440 --> 0:03:27.000 well known stock market skeptic could correctly predicted this year's slump. 0:03:27.200 --> 0:03:29.680 Now he thinks the bear market in US equities could 0:03:29.680 --> 0:03:32.720 conclude sooner than many think. Ultimately, the bear market will 0:03:32.760 --> 0:03:35.080 be over, probably some time in the first quarter. Now, 0:03:35.120 --> 0:03:37.600 all of this is, you know, subject to revision, right, 0:03:37.800 --> 0:03:39.600 So I want to make it perfectly clear. If the 0:03:39.640 --> 0:03:42.760 market starts to trade off again and the SMP breaks 0:03:42.800 --> 0:03:45.560 down and blows through thirty six fifty on the down side, 0:03:45.840 --> 0:03:49.080 will be bearish again. Morgan Stanley's Mike Wilson was ranked 0:03:49.080 --> 0:03:53.520 the number one portfolio strategist in the latest Institutional Investors survey. 0:03:53.640 --> 0:03:56.440 Well in Europe, nathan A Bank and turmoil is front 0:03:56.480 --> 0:03:59.840 and center. This morning, shares of Credit Suite are lower, 0:04:00.040 --> 0:04:03.480 down more than fourteen percent. The Swiss bank is unveiling 0:04:03.480 --> 0:04:06.320 a massive turnaround plan, which includes a four billion dollar 0:04:06.400 --> 0:04:09.280 capital raised, a carve out of its investment bank, and 0:04:09.320 --> 0:04:12.480 thousands of job cuts. It's the most urgent attempt yet 0:04:12.520 --> 0:04:15.960 to repair credit suite after huge losses and management chaos. 0:04:16.279 --> 0:04:19.039 And we spoke this morning with CEO all Rich Kroner. 0:04:19.360 --> 0:04:23.000 What does new credits face. You know, it's a much simpler, 0:04:23.200 --> 0:04:27.760 more stable, much more focused bank going forward, which will 0:04:27.800 --> 0:04:35.120 deliver sustainably profitable results to our shareholders. Credit Swite CEO 0:04:35.279 --> 0:04:37.400 l Rich Kroner made the comments in an interview with 0:04:37.440 --> 0:04:40.719 Bloomberg's France Lockwise. Stay tuned for more of that conversation 0:04:40.800 --> 0:04:44.159 coming up shortly. On Bloomberg daybreaking, Let's stay in Europe, Karen, 0:04:44.200 --> 0:04:46.520 because it's a big day for the European Central Bank. 0:04:46.600 --> 0:04:48.840 The e c V is expected to lift its main 0:04:48.920 --> 0:04:51.680 interest rate to its highest level in more than a decade. 0:04:51.720 --> 0:04:55.279 We get a preview from Bloomberg's Lean Garrants seventy basis 0:04:55.320 --> 0:04:59.320 point hike is a consensus view for today's policy decision 0:04:59.440 --> 0:05:02.839 from the CP. Anything else would be a big surprise, 0:05:02.920 --> 0:05:07.479 so looking past the recession fears to keep targeting inflation. 0:05:08.040 --> 0:05:11.720 Less clear though, is whether we'll get any indications around 0:05:11.720 --> 0:05:16.040 the timeline for quantitative tightening, and something investors are watching 0:05:16.160 --> 0:05:19.640 closely any moves to limit the games banks on making 0:05:19.680 --> 0:05:23.880 from the ECBs crisis program of cheap loans in London. 0:05:24.000 --> 0:05:27.640 I'm Leanne Geron's Bloomberg Daybreak, Leanne. Thanks. Back here. In 0:05:27.640 --> 0:05:30.520 the US, economic growth is in focus. The government issues 0:05:30.600 --> 0:05:33.760 data on third quarter GDP this morning. Forecast call for 0:05:33.839 --> 0:05:36.560 a gain of two point four percent, and Bloomberry's Vinydale 0:05:36.640 --> 0:05:39.919 Judai says more GDP posted back to back losses in 0:05:39.960 --> 0:05:43.159 the first and second quarters. Bloomberg Economics says the third 0:05:43.240 --> 0:05:47.480 quarters headline reabound may conceal trouble in the details, such 0:05:47.520 --> 0:05:50.760 as sales and business inventorys. There are other U s 0:05:50.880 --> 0:05:54.680 data on tap today. Manufacturing data factory owners for durable 0:05:54.720 --> 0:05:58.920 goods may indicate moderation, reflecting US inflation fears in the 0:05:59.000 --> 0:06:02.640 US labor market. Bloomberg Economics is weekly jobless claims will 0:06:02.640 --> 0:06:07.279 probably continue to hover around historic clothes. They Bloomberg day Break, 0:06:07.440 --> 0:06:10.120 Thanks and he Let's turn to geopolitics. Now the potential 0:06:10.160 --> 0:06:13.920 setback for President Biden's economic pressure on Russia. The administration 0:06:14.000 --> 0:06:16.520 is now being forced to rework its plans for price 0:06:16.600 --> 0:06:19.839 caps on Russian oil. Bloomberg said, Baxter has the story. 0:06:20.160 --> 0:06:22.240 It looks like they're going to have to scale back 0:06:22.279 --> 0:06:24.880 their plans, and light of the volatility in the markets, 0:06:25.320 --> 0:06:28.640 instead of strangling the Kremlin's oil revenues by imposing a 0:06:28.720 --> 0:06:32.640 strict lid on prices, US and European Union are likely 0:06:32.680 --> 0:06:35.280 to have to settle for more loosely police cap at 0:06:35.320 --> 0:06:38.520 a higher price than once. In vision and earlier iteration 0:06:38.560 --> 0:06:40.840 of the plan had the cap and the range of 0:06:40.880 --> 0:06:43.839 forty to sixty dollars per barrel, but now it looks 0:06:43.880 --> 0:06:46.760 like it will have to be much higher. In San Francisco, 0:06:46.880 --> 0:06:49.719 I'm at Baxter Bloomberg day break, right and thanks, And finally, 0:06:49.760 --> 0:06:52.760 the world's richest man is telling Twitter employees he does 0:06:52.800 --> 0:06:56.240 not plan to cut se a staff. Bloomberg News has 0:06:56.279 --> 0:06:59.080 learned that Elon must denied those numbers and an address 0:06:59.120 --> 0:07:02.120 to workers at the come anat San Francisco office. Still, 0:07:02.160 --> 0:07:05.360 the billionaire is still expected to cut some staff when 0:07:05.360 --> 0:07:08.880 he takes over the company. Billion dollar deal is expected 0:07:08.920 --> 0:07:12.920 to close tomorrow again. SMP futures are higher this morning. 0:07:13.200 --> 0:07:17.080 Straight ahead your latest local headlines plus a check of sports. 0:07:17.160 --> 0:07:24.040 And this is Bloomberg. I think you're carrying. It's five 0:07:24.080 --> 0:07:26.200 oh seven on Wall Street, It's fifty eight degrees in 0:07:26.320 --> 0:07:29.440 Central Park and it's problematic on westbound eighty. We've got 0:07:29.440 --> 0:07:33.280 an overturned tractor trailer by exit thirty five. Michael Bars 0:07:33.320 --> 0:07:35.120 here with more on what's going on in New York 0:07:35.120 --> 0:07:37.680 and around the world. Good morning, Michael, Good morning Nathan. 0:07:37.680 --> 0:07:42.680 New Jersey Democratic Senator Robert Menendez faces another federal investigation 0:07:42.720 --> 0:07:46.800 about five years after a trial on federal corruption charges 0:07:46.840 --> 0:07:51.240 and into a mistrial. Menendez advisor says Senator Menendez is 0:07:51.280 --> 0:07:54.440 aware of an investigation. However, he does not know the 0:07:54.480 --> 0:07:58.040 scope of the investigation. The probe is being conducted by 0:07:58.120 --> 0:08:01.800 federal prosecutors in the Southern District of New York. President 0:08:01.880 --> 0:08:05.800 Joe Biden warned Russias of Vladimir Putin that any use 0:08:05.840 --> 0:08:09.200 of a nuclear weapon would be an incredibly serious mistake. 0:08:09.880 --> 0:08:13.480 It comes as Russia says it carried out military exercises 0:08:13.720 --> 0:08:18.280 simulating a retaliatory nuclear strike. Meanwhile, former U s Special 0:08:18.320 --> 0:08:22.880 Representative for Ukraine negotiations and former Ambassador to NATO Kurt 0:08:22.960 --> 0:08:27.480 Volker talked about Russia's claims without evidence that Kiev's forces 0:08:27.600 --> 0:08:30.320 intend to use a so called dirty bomb. But what 0:08:30.400 --> 0:08:33.559 Putin is doing is he is trying to get inside 0:08:33.600 --> 0:08:36.520 the heads of leaders in the West to make them 0:08:36.559 --> 0:08:39.400 feel that this is too dangerous and we have to 0:08:39.400 --> 0:08:42.720 tell the Ukrainians to surrender somehow, give up territory, you know, 0:08:43.120 --> 0:08:47.600 concede to prouting something. Former NATO ambassador Kurt Volker spoke 0:08:47.679 --> 0:08:50.880 on sound on which hairs at five pm on Bloomberg, 0:08:51.240 --> 0:08:55.640 Iranian security forces opened fire on protesters. In the past 0:08:55.679 --> 0:08:58.480 forty days, thousands of people have taken to the streets 0:08:58.480 --> 0:09:00.959 to denounce the depth of a twenty two year old 0:09:01.000 --> 0:09:04.600 woman in custody of the country's morality police. She was 0:09:04.640 --> 0:09:09.240 accused of breaking iran strict dress code. State Department spokesperson 0:09:09.440 --> 0:09:13.679 Vendent Patel reiterated the u S efforts to support protesters 0:09:13.679 --> 0:09:16.720 in more than one hundred cities in Iran. The regime's ongrowing, 0:09:16.960 --> 0:09:22.479 violent crackdown, pervasive surveillance of citizens, and disruption of communications 0:09:22.880 --> 0:09:26.400 are the latest reminder of the Islamic Republic's flavor and 0:09:26.480 --> 0:09:31.000 disregard for the fundamental freedoms and human rights of Iranians. 0:09:31.000 --> 0:09:34.280 Spokesman Patel says Iran's leadership is facing a problem of 0:09:34.320 --> 0:09:37.560 its own making. With just weeks until the mid term elections. 0:09:37.559 --> 0:09:40.080 The second woman has come forward claiming that she got 0:09:40.120 --> 0:09:43.320 pregnant and then had an abortion paid for by Georgia 0:09:43.360 --> 0:09:47.920 GOP senate candidate Herschel Walker. Walker addressed Jane Doe's allegations 0:09:48.000 --> 0:09:51.200 during the campaign events, saying he is done with this foolishness. 0:09:51.720 --> 0:09:54.360 Global News twenty four hours a day on air and 0:09:54.480 --> 0:09:57.800 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:09:57.840 --> 0:10:00.920 journalists analysts more than a hundred twenty countries. Michael Barron, 0:10:01.040 --> 0:10:08.679 this is Bloomberg, Nathan, Thanks Michael, five O nine on 0:10:08.720 --> 0:10:10.760 Wall Street. Time for the Bloomberg Sports up tape. Prouty 0:10:10.840 --> 0:10:13.720 by Tri State Autie. Good morning, John stash alright, good morning, Nathan. 0:10:13.760 --> 0:10:16.480 The Knixer back this season with pretty much the same roster, 0:10:16.600 --> 0:10:19.400 with one except of the initiative Jalen brunts in the 0:10:19.440 --> 0:10:21.959 new Knick point guard on display at the Guard and 0:10:22.040 --> 0:10:26.160 twenty seven points, thirteen assists, seven rebounds, Nick's peach Charlotte 0:10:26.200 --> 0:10:28.560 one thirty four, one thirty one and overtime. They're up 0:10:28.559 --> 0:10:31.080 to a three and one start, worth noting they began 0:10:31.160 --> 0:10:33.199 last season five and one and still ended up being 0:10:33.200 --> 0:10:35.000 a down year, missing the cliff. The Nets are just 0:10:35.040 --> 0:10:38.160 one and three lost in Milwaukee one ten ninety nine 0:10:38.240 --> 0:10:40.760 too much. Jana's Sons of the Cup of forty three points, 0:10:40.800 --> 0:10:43.880 Kevin Duran had thirty three. Steve Nash got ejected for 0:10:43.880 --> 0:10:46.120 the first time in his coaching career. Lebron James had 0:10:46.160 --> 0:10:48.920 not started a season oh and four since his rookie 0:10:49.000 --> 0:10:51.559 year in Cleveland twenty years ago. Lakers are owing four 0:10:51.600 --> 0:10:54.640 they lost in tender. Rangers started three and one. They've 0:10:54.640 --> 0:10:57.280 lost their last four. I've score only five goals over 0:10:57.320 --> 0:10:59.800 those four games. Shut out at the Ubs Arena by 0:10:59.840 --> 0:11:03.000 the Islanders, Elias Aurokan, Kyle Palm Mary scoring twice the 0:11:03.000 --> 0:11:05.959 Aisles one three to nothing. Weake eight starts tonight at 0:11:05.960 --> 0:11:08.120 Tampa Bay, where Tom Brady and the Bucks are just 0:11:08.200 --> 0:11:11.120 three and four. They taken on Baltimore Giants. Look for 0:11:11.160 --> 0:11:13.600 US seven and one start Sunday and see. I had 0:11:13.640 --> 0:11:16.560 a lot of reasons for the Giants improvement. One is 0:11:16.600 --> 0:11:19.760 certainly Daniel Jones, having thrown only two in reception. I'm 0:11:19.760 --> 0:11:21.640 trying to make quicker decisions, trying to get the ball 0:11:21.640 --> 0:11:23.319 out of my hands as as soon as possible. I 0:11:23.360 --> 0:11:26.080 don't think that's any different from uh things I've done 0:11:26.120 --> 0:11:28.080 in the past. I think you know you're you're better 0:11:28.120 --> 0:11:30.240 at it every week and and I'm certainly better at 0:11:30.240 --> 0:11:33.360 it and I've been in the past. So uh, that's 0:11:33.360 --> 0:11:35.040 the goal for me, is it. Can you continue to 0:11:35.040 --> 0:11:37.439 be quicker and and uh make the right decision and 0:11:37.440 --> 0:11:39.000 get the ball in my hand? And Jones just named 0:11:39.120 --> 0:11:42.240 NFC Offensive Player of the Way hal Steinbrenner's first comment 0:11:42.320 --> 0:11:44.200 since the end of the season. The Yankees owner said 0:11:44.240 --> 0:11:48.280 he doesn't see the Yanks not keeping manager John snashowar 0:11:48.320 --> 0:11:52.000 Boomberg Sports John, Thank you. SFP futures are up seven 0:11:52.000 --> 0:11:54.800 points down. Futures up a hundred thirty eight. Nastec features 0:11:54.800 --> 0:11:58.040 are lower down twenty one points. Meta platform shares down 0:11:58.040 --> 0:12:02.720 nearly twenty percent on earnings. Bloomberg quick takes alex Web 0:12:02.800 --> 0:12:07.679 joins us next on Meta. This is Bloomberg and the 0:12:07.679 --> 0:12:09.920 Bloomberg Sports Report was brought to you by Audie. Don't 0:12:10.000 --> 0:12:12.160 let someone else drive off in the autie model you've 0:12:12.200 --> 0:12:14.800 always wanted. Visit your local Frice State autie dealer to 0:12:14.840 --> 0:12:18.000 get behind the wheel of yours today, or visit autie 0:12:18.000 --> 0:12:23.880 Offers dot com for more information, markets, headlines, and breaking 0:12:23.920 --> 0:12:26.800 new ones. Twenty four hours a day, at Bloomberg dot Com, 0:12:26.920 --> 0:12:30.480 the Bloomberg Business at and at Bloomberg Quick Tape. He's 0:12:30.480 --> 0:12:39.480 a Bloomberg Business flash and I'm fared. Moscow stocks are 0:12:39.520 --> 0:12:42.360 slipping in US Dock Index futures are pairing gains as 0:12:42.400 --> 0:12:45.480 traders digest a flurry of major earnings and prepare for 0:12:45.480 --> 0:12:49.439 another jumbo European Central Bank rate hike later today. We 0:12:49.559 --> 0:12:52.040 checked the markets every fifteen minutes throughout the trading day 0:12:52.120 --> 0:12:54.880 on Bloomberg Right now S and P futures they're up 0:12:54.880 --> 0:12:58.960 about eight points down. Futures at six and NASDACK futures 0:12:58.960 --> 0:13:02.200 are lower, down twenty five the decks in Germany's down 0:13:02.200 --> 0:13:05.280 four tenths of upper set. Can your treasury down fourteen 0:13:05.320 --> 0:13:07.719 thirty seconds? You had four point six percent in the 0:13:07.840 --> 0:13:10.480 yield on the two year four point four four percent 0:13:11.000 --> 0:13:13.280 nine x Screwed oil is little change this morning at 0:13:13.280 --> 0:13:16.040 eighty seven dollars eighty eight cents of barrel comax s 0:13:16.040 --> 0:13:18.120 gold is down about two tens of upper cent or 0:13:18.160 --> 0:13:21.680 two dollars ninety cents at sixteen sixty six. Forty announced 0:13:22.040 --> 0:13:25.280 the euro one point zero zero five zero against the dollar, 0:13:25.360 --> 0:13:27.520 British bound one point one f h two and the 0:13:27.679 --> 0:13:30.440 end one forty six point to three. I'm looking at 0:13:30.480 --> 0:13:33.320 bitcoin this morning, down six tens of a percent at 0:13:33.360 --> 0:13:36.720 twenty thousand, six hundred dollars. That's a Bloomberg business flash. 0:13:36.720 --> 0:13:38.840 Now here's Michael Barr with more on what's going on 0:13:38.880 --> 0:13:41.960 around the world. Michael, good morning, Good morning, Karen. Russia 0:13:42.000 --> 0:13:47.360 carried out military exercises simulating a retaliatory nuclear strike, as 0:13:47.400 --> 0:13:50.240 President Joe Biden warned Vladimir Putin than any use of 0:13:50.280 --> 0:13:54.960 a nuclear weapon would be an incredibly serious mistake. Secretary 0:13:55.000 --> 0:13:58.480 of State Anthony B. Lincoln accused China of underminding the 0:13:58.520 --> 0:14:01.680 decades long status quo that has kept both nations from 0:14:01.679 --> 0:14:05.320 going to war over Taiwan, same Beijing was trying to 0:14:05.440 --> 0:14:08.600 speed up at seizure of the island. A second woman 0:14:08.600 --> 0:14:13.240 that's come forward claiming Georgia's Senate candidate, Herschel Walker paid 0:14:13.280 --> 0:14:16.280 for her to have an abortion. Walker denied the allegations, 0:14:16.280 --> 0:14:19.240 saying I am done with this foolishness. In the NBA, 0:14:19.400 --> 0:14:22.480 the next one in overtime over the Hornets one one. 0:14:23.080 --> 0:14:26.920 The Nets lost. In hockey, the Islanders blanked Rangers three zip. 0:14:27.080 --> 0:14:30.280 Thursday Night football, the Ravens take on the Buccaneers Global 0:14:30.320 --> 0:14:32.680 News twenty four hours a day on air and on 0:14:32.760 --> 0:14:36.240 Bloomberg Quick Take, powered by more than twenty seven hundred 0:14:36.280 --> 0:14:38.720 journalists and analysts more than a hundred twenty countries. How 0:14:38.800 --> 0:14:41.680 Michael Barrow, this is Bloomberg, Nathan, Thanks Michael. It's five 0:14:41.760 --> 0:14:44.920 nineteen on Wall Street Live from the Bloomberg Interactive Broker Studios. 0:14:45.000 --> 0:14:47.680 This is Bloomberg Daybreak, and we continue to watch shares 0:14:47.760 --> 0:14:50.520 of Facebook parent Meta platforms. They're getting punished in the 0:14:50.520 --> 0:14:53.880 pre market this morning, down twenty percent on a disappointing 0:14:53.920 --> 0:14:58.560 revenue forecast. But maybe the shift away from Facebook for 0:14:58.600 --> 0:15:03.120 CEO Mark Zuckerberg the giving investors some indigestion this morning. 0:15:03.160 --> 0:15:06.320 Let's bring in Bloomberg Quick Take correspondent Alex Web for 0:15:06.480 --> 0:15:10.800 more on the Metal platforms story. Alex, good morning. Uh, 0:15:10.840 --> 0:15:15.520 this long term play towards the metaverse is a really 0:15:15.800 --> 0:15:19.600 untested bed, isn't it. Yes? And that is fundamentally what 0:15:19.640 --> 0:15:23.040 he's driving the shares down because from a sales perspective, 0:15:23.480 --> 0:15:28.680 Meta outperformed the market's expectations. Uh, it's the cost piece 0:15:28.840 --> 0:15:33.360 which is really driven them way down below expectations on 0:15:33.360 --> 0:15:35.320 on all the profit measures of there's a little bit 0:15:35.320 --> 0:15:37.200 on the outlook, which clearly is not good news, but 0:15:37.720 --> 0:15:39.840 you know that probably plays into it as well, because 0:15:39.920 --> 0:15:43.920 they're investing, of course, partly in the competing products to TikTok, 0:15:44.640 --> 0:15:48.320 but largely in this metaverse effort, which is hardware and 0:15:48.400 --> 0:15:52.080 software and a colossal lift for the company. Now CEO 0:15:52.160 --> 0:15:54.640 Mark Zuckerberg in the past has you know, come to 0:15:54.760 --> 0:15:57.080 investors and said, you know, be patient, We've got a 0:15:57.120 --> 0:15:59.920 long term strategy here. And in the past it's kind 0:16:00.000 --> 0:16:03.160 they paid off. When you think about how Facebook has 0:16:03.160 --> 0:16:05.960 been able to sort of copy the way it's competitors 0:16:05.960 --> 0:16:09.400 to do business and capitalize on that. Is this a 0:16:09.440 --> 0:16:14.040 different scenario though, for asking investors to be patient on 0:16:14.080 --> 0:16:16.320 the prospects of a of a whole new way of 0:16:16.360 --> 0:16:19.280 looking at the Internet. I think so because of the 0:16:19.320 --> 0:16:21.520 capital intensity. You know, when he was pivoting the company 0:16:21.560 --> 0:16:23.800 towards mobile as he did, you know, that's part of 0:16:23.800 --> 0:16:27.440 a decade ago. Yes, it was gearing everything the company 0:16:27.440 --> 0:16:29.600 did towards a particular product, but it was still a 0:16:29.640 --> 0:16:33.800 software product, right, It was still just changing the things 0:16:33.800 --> 0:16:37.360 you're already doing. This is an entirely new product. Category, 0:16:37.560 --> 0:16:40.600 and it is hardware, which costs a lot more to develop. 0:16:41.440 --> 0:16:44.400 The play is going to be a lot longer as well. 0:16:44.440 --> 0:16:46.000 You know, they're able to pivot to mobile in the 0:16:46.040 --> 0:16:48.440 space of a year or two. There's pieces of the 0:16:48.480 --> 0:16:50.920 technology in this. You know, when we think about a 0:16:51.000 --> 0:16:54.440 year ago, the presentation they gave when they announced the 0:16:54.440 --> 0:16:57.880 new name of Matter, and they showed all the things 0:16:57.880 --> 0:16:59.360 they want to be able to do in the metaverse. Well, 0:16:59.520 --> 0:17:01.880 most or certainly a lot of those things you cannot 0:17:01.960 --> 0:17:05.520 do just yet. The technology isn't there. Um, it's not 0:17:05.680 --> 0:17:08.600 something that the competitor could do either. So they are 0:17:08.720 --> 0:17:13.080 building towards something which remains somewhere away. Yeah, and in 0:17:13.119 --> 0:17:16.480 the meantime, they've got to count on advertising revenue to 0:17:16.720 --> 0:17:20.600 provide the underpinnings for this technology that could be years away. 0:17:20.680 --> 0:17:23.679 What are these earnings that we've just gotten say about 0:17:23.800 --> 0:17:29.040 the advertising environment for the tech sector more broadly, Well, 0:17:29.080 --> 0:17:31.719 it's not good. You know, We've seen plenty of other 0:17:31.760 --> 0:17:34.760 ad tech companies over the past few days, for past 0:17:35.920 --> 0:17:39.000 this earning season not post good numbers. If the fact 0:17:39.000 --> 0:17:41.240 that even Google, which is probably the most resilient to 0:17:41.280 --> 0:17:44.720 them all, is feeling the pain. Um, tells its own story. 0:17:45.320 --> 0:17:48.560 I think when you play that into the metaverse, you 0:17:48.560 --> 0:17:50.960 know one of the reasons Facebook is doing this is 0:17:50.960 --> 0:17:52.919 because they don't want to be beholden to the whims 0:17:53.119 --> 0:17:55.560 of their gatekeepers, who in this case of Google and 0:17:55.600 --> 0:17:57.840 Apple and Apple in particular, has made it a lot 0:17:57.880 --> 0:18:01.240 harder to track to use data from across different apps 0:18:01.240 --> 0:18:04.560 in order to measure add effectiveness. So if you own 0:18:04.960 --> 0:18:09.680 the hardware um the gateway essentially to your tech, then 0:18:09.960 --> 0:18:13.040 you're not beholding to those whims. If it makes that work, 0:18:13.160 --> 0:18:15.280 then has an advantage over Apple because you know, it 0:18:15.320 --> 0:18:18.399 can use the ads income to subsidize the cost of 0:18:18.440 --> 0:18:20.119 the consumer of the hardware, so it may be able 0:18:20.160 --> 0:18:22.840 to undercut Apple on price. But it has one significant 0:18:22.840 --> 0:18:25.439 disadvanced to Wrapple, which in that it doesn't have the 0:18:25.520 --> 0:18:28.480 millions of developers developing for its platform, which Apple does. 0:18:29.119 --> 0:18:31.440 And we're gonna get those Apple earnings of course later 0:18:31.480 --> 0:18:33.399 on after the closing belt today and Alex Weev of 0:18:33.440 --> 0:18:36.480 Bloomberg quick Take, thanks for this, really appreciate it. Karen. 0:18:36.880 --> 0:18:39.879 All right, Nathan, it is five twenty three on Wall Street. 0:18:39.880 --> 0:18:42.160 This is Bloomberg Daybreak, and now we want to bring 0:18:42.200 --> 0:18:45.399 you our interview with Credit Swiss CEO L Rick Kerner. 0:18:45.720 --> 0:18:49.400 Credit Swiss announced it's along awaited overhaul, unvailing, a plan 0:18:49.520 --> 0:18:52.720 that will see a multibillion dollar capital raise, curve out 0:18:52.720 --> 0:18:55.480 of the investment bank and thousands of job cuts. The 0:18:55.640 --> 0:18:58.760 restructuring will occur over the next three years. CEO L 0:18:58.840 --> 0:19:01.639 Rick Kerner talked to bloom Ex Francy in Laqua about 0:19:01.640 --> 0:19:03.639 the new plan and when the bank plans to be 0:19:03.680 --> 0:19:07.280 profitable again. This is, as you say, a big day. 0:19:07.320 --> 0:19:08.879 We are all there, that we are there, it's a 0:19:08.920 --> 0:19:12.320 big day also for all our people when we announcing 0:19:12.320 --> 0:19:15.480 now today what is basically new Credits and what is 0:19:15.480 --> 0:19:19.080 the new Credit Swizz. You know, it's a much simpler, 0:19:19.400 --> 0:19:23.960 more stable, much more focused bank going forward which will 0:19:24.000 --> 0:19:31.280 deliver sustainably profitable results to our shareholders. And what is 0:19:31.359 --> 0:19:34.520 very important, if we may add here, how we how 0:19:34.560 --> 0:19:37.240 we came here, so to say, we have a very 0:19:37.240 --> 0:19:39.480 hard look, you know, at the needs of our clients 0:19:39.520 --> 0:19:42.240 and designed everything around the needs of our clients. So 0:19:42.320 --> 0:19:44.359 what was your overarching theme? How did you come up 0:19:44.440 --> 0:19:47.800 with this plan? What was your reasoning? And getting here? 0:19:47.800 --> 0:19:51.560 Many different reasons. I think the as I said, the 0:19:51.560 --> 0:19:55.120 bank is slightly too complict ad it today. The bank 0:19:55.200 --> 0:19:58.480 has parts which are not profitable enough, as we all 0:19:58.520 --> 0:20:02.040 know from the shell to perspective, and that's why we 0:20:02.480 --> 0:20:06.200 came up with, you know, the need of taking very 0:20:06.440 --> 0:20:11.560 decisive affections in mainly three different areas. The one is 0:20:12.200 --> 0:20:16.080 radical restructuring off the investment bank. The second one is 0:20:16.440 --> 0:20:18.879 significant to do something costs going forward. As who I 0:20:18.920 --> 0:20:22.760 have seen and Sei Yes said, managers don't get results 0:20:22.760 --> 0:20:24.760 that are off the charts when their solutions are off 0:20:24.760 --> 0:20:28.040 the shelf. Learn how sci is operating platform can turn 0:20:28.080 --> 0:20:31.920 infrastructure into a competitive advantage At sc SC dot com 0:20:31.960 --> 0:20:34.719 slash tech Man, we're just about four hours away from 0:20:34.720 --> 0:20:36.600 the open of US trading. Let's get you up to 0:20:36.680 --> 0:20:38.760 date on the news you need to know at this hour. 0:20:38.840 --> 0:20:41.400 We continue to watch shares of Meta Platforms. This morning, 0:20:41.440 --> 0:20:44.960 they are downmost twenty percent after the company gave a 0:20:45.000 --> 0:20:48.719 disappointing outlook. It also revealed ballooning costs to fund its 0:20:48.800 --> 0:20:53.720 virtual reality project, the Metaverse. CEO Mark Zuckerberg pleaded patients 0:20:53.760 --> 0:20:55.760 on a call with investors, I think we're going to 0:20:55.800 --> 0:20:58.320 resolve each of these things over different periods of time, 0:20:58.520 --> 0:21:00.960 and I appreciate the patients, and I think that those 0:21:01.000 --> 0:21:03.320 were patient and invest with us to wind up being rewarded. 0:21:03.480 --> 0:21:06.440 Mark Zuckerberg says met his long term bets will pay off, 0:21:06.520 --> 0:21:08.840 but he didn't explain further. We'll stick you with the 0:21:08.880 --> 0:21:12.200 big tech, Nathan, we get too massive. Earning's reports after 0:21:12.240 --> 0:21:15.160 the bell today when Apple and Amazon report, and looking 0:21:15.160 --> 0:21:18.679 at Twitter, Bloomberg News has learned test last CEO Elon Musk, 0:21:18.720 --> 0:21:21.800 who's set to take over the company tomorrow, told employees 0:21:21.880 --> 0:21:24.520 he does not plan to cut seventy percent of staff, 0:21:24.560 --> 0:21:28.359 has previously reported. Bloomberg said. Ludlow has more he didn't 0:21:28.359 --> 0:21:33.480 explicitly rule out layoffs. Generally speaking, Um, he walked into 0:21:33.520 --> 0:21:36.760 the Market Street office carrying a kitchen sinker there, and 0:21:36.800 --> 0:21:39.680 I think that the joke was, this is really happening. 0:21:39.880 --> 0:21:42.240 We should all let that same in and Bloomberg said. 0:21:42.280 --> 0:21:44.959 Ludlow says Elon Musk will meet with staff tomorrow, when 0:21:45.040 --> 0:21:47.359 his forty four billion dollar deal to buy Twitter is 0:21:47.440 --> 0:21:50.640 set to close. Turning to markets this morning, Karen, futures 0:21:50.680 --> 0:21:54.840 are mainly higher as earning season continues. Notorious bear Mike 0:21:54.880 --> 0:21:57.800 Wilson says his team at Morgan Stanley thinks the downward 0:21:57.800 --> 0:22:01.159 trended US equities could conclude, so we're still bearish in 0:22:01.160 --> 0:22:03.040 the intermediate term. We don't think the bear markets over, 0:22:03.160 --> 0:22:04.840 but we do think this tactical rally is going to 0:22:04.920 --> 0:22:06.760 be big enough to try and pivot and trade it. 0:22:07.040 --> 0:22:10.280 Morgan Stanley Chief equity strategist Mike Wilson says that outlook 0:22:10.320 --> 0:22:14.000