tv Whatd You Miss Bloomberg July 30, 2020 4:00pm-5:01pm EDT
seeing a lot of interest in the private -- things like private equity. institutionally, more diversification into areas of the economy that are bond like, to compensate especially floating-rate debt that compensates for the low level of rates. caroline: the market has closed. we get the perspective in terms of hedging, in terms of technology still be in the haven of choice. romaine: there were some interesting moves today. saw --ed about kodak, we falling today because i significant drop in same-store sales. 15% because they are delivering more packages. lots of signals in terms of the economic conditions. caroline: notable what qualcomm
did as well in terms of market cap. you can really move if you give the market a beat. romaine: you saw apache rally fall by% and conoco about the same amount. this split between companies still invested in shale and companies that have more offshore resources. taylor: i still think we should have bought oil at -$30 per barrel and stored it in your swimming pool. romaine: right next to the gold. we are waiting for a lot of earnings today. apple, amazon, facebook, shake shack, yum! brands. one of the busiest days of the year right now. as isne: gilead's outcome electronic arts. the $1.44 expected. second quarter revenue, $5.1
billion, that is a slight mess. that company, focused on pharma. electronic arts. gaming has been front and center in terms of what we have all been up to. we are seeing electronic arts seeing the full year 21 $1.6ngs, revenue coming at billion. romaine: doing well on the quarter and guidance. there is an issue of high expectations. even as you have adjusted revenue coming in above estimates. that eps number also coming in above estimates. a lot of folks saying, we wanted more. beenr: a lot of this has in the price reaction. the problem is, the next week, and rallies 10%. everything we have seen with these tech companies. you were talking about the stocks index, up -- the sox index come up 2%.
about 28 minutes or so after we get some of the other big tech names. you take out some of those big stocks, the s&p 500 looks very afferent, at least from performance basis. as we look at china, you take out some of the big tech names in china, the performance does not look different. the narrowness of this rally. you take those big stocks out and performance looks a lot different. romaine: i believe that kirk hartman is still with us, wells fargo asset management. when you look at the broader landscape with earnings coming in, with economic data, and you look at it a little bit more long-term beyond this year, how much confidence do you have in the economic recovery globally speaking and what it means for risk assets?
kirk: that is very much a function of a vaccine. if we do get some promising vaccines coming out at the end of the year and things look good, then 2021 earnings look pretty good. that is clearly what the market is pricing off of. to me, the big wildcard is that question, if we don't have any promising vaccines at the end of the year, i could see the market having a pretty promising correction. from j.p.e had david morgan asset management earlier, talking about the issue. it is the phrase, it's the economy, stupid. he used the phrase, it's the vaccine, stupid. the pandemic, once you get that under control, then you have a market that can be forecast. caroline: remdesivir, made by
gilead, expected to makeover 2 million of those remdesivir courses. is one thatow it you have been keeping an eye on. 225 million. they are posting eight second quarter loss per share of some eight cents. romaine: i am curious about some of the strength we have seen. caroline: facebook coming in with second quarter revenue, a beat. $18.7 billion. this is not growth in double digits. this is not what we are used to seeing quarter on quarter. but it is better than we have expected. add revenue of $18.3 billion. all eyes on the 8 million advertising companies they currently support, how many had been joining the july boycott. second quarter, they come in
ahead of expectations. overall, daily active users in the last month, 1.8 billion. --thly active users of the of facebook itself, 2.7 billion. a beat in terms of daily active ofrs, a beat in terms monthly active users. afterder it is some 5% hours. romaine: that number you are looking at on the screen, that 246, that will put them at a record high. loss per share coming in at $.45, estimate for a loss of $1.15. adjusted ebit number coming in at half $1 billion, $1.5 billion. q3 adjusted ebitda -- caroline: it is also interesting that we are seeing so much
guidance from facebook, seeing daily and monthly active users to be flat and slightly down quarter on quarter. giving us some look ahead, perhaps coming off some of those highs and after trading. into where to delve they point the future to be. taylor: i think that future guidance is really important particularly as we are waiting on shares of alphabet. facebook is giving us some pretty good insight into the advertising market, what they are getting from some of the businesses that go to that site to advertise. . alphabet,tes late on but they are climbing after facebook earnings. some interesting read through of some of these companies. caroline: second quarter
advertising, 10%. daily active users grew 13%. flat or down in the fiscal quarter. 2020 total expenses coming in slightly shy of previous expectations. rate for theowth third quarter roughly similar to july. romaine: amazon shares crossing the wire right now. sales, $81.9t billion. estimate was for $81.2 billion. big beat on q2 eps. $10.30. in at estimate was for $1.51. i will check to make sure that is correct. amazon that services web sales at $10.81 billion. that was for $11 billion. a little bit light on web services. the company said it spent about $4 billion on incremental
covid-19 costs. caroline: it is amazing, the sheer scale of these businesses. people,, monthly active of4 billion people used one either facebook, whatsapp, messenger. we will have to dig into what they look like for the third quarter. amazon up 4% after hours. so much more to come. apple to break still. kirk hartman has been with us. wells fargo asset management president and global cio. "the closing bell" is over but "what'd you miss?" is next, where we will be digging into those numbers. amazon, facebook trading higher after hours. we all wait on alphabet. apple at 4:30 as well. this is bloomberg. ♪
♪ caroline: from bloomberg's world headquarters in new york, i am caroline hyde. romaine: this is "what'd you miss?" caroline: the big tech earnings. quite amazing. facebook given us a sense that the boycott of july does not seem to matter. in the first three weeks of july, year on year add revenue growth was basically the same as the second quarter, 10%. they feel that the third quarter will reflect that of july. they feel that it is not hitting them on their bottom line. beat in terms of earnings and revenue. taylor: shares of alphabet, we are awaiting those but we know
that shares are up 1%. romaine: we are seeing amazon rise in after-hours trading. these are all basically going to be record highs. amazon did guide a little bit higher. q3 net sales, a little bit higher, above the midpoint range of estimates of analysts surveyed by bloomberg. q3 operating income, $2 billion to $5 billion. estimate is for $3.04 billion. for the q2 numbers, they beat on net sales, eps by a pretty wide margin, $10.30 on eps. estimate was for $1.50. they really knocked it out of the park. amazon web services, if there is any area of concern, this could be it. the estimate was for 11.1
billion. that still represents about 5% growth in the quarter. growth still there but not necessarily a strong. a lot of the metrics with regards to some of the online shopping, grocery deliveries also up pretty strongly. covers amazon for us down there at bloomberg intelligence. he joins us on the phone. what is the first thing that jumps out at you? jitendra: i think that the q3 guidance was a big surprise. especially on the cost side. $4 billion the impact expected in q2, they overcome that with better profits. but they are seeing that impact tapering. that is sort of a departure from expectations in general. the guidance is showing, even
with prime day, the organic demand is still staying strong. caroline: phenomenal in terms of guidance and the absolute eat in terms -- absolute beat in terms of revenue and growth per share. what is firing on all cylinders? more the aws side, the way they have been able to build out grocery delivery? jitendra: grocery is one area where the expansion is rapid. we saw an increase in capacity for grocery delivery, pretty much the biggest and market amazon has. aws, thatse here, miss is showing that maybe competition is playing a role or it is potentially the amount of time it is taking to change these enterprise deals. areal like aws is one
where they will get more attention. with work from home, the expectation was for aws to print better results on the top line basis. thet from aws, i feel e-commerce business in general, investors are questioning the longevity of the impact. how long can the growth rate continue? q3 guidance is showing at least for the next couple of months that that will be the case. taylor: i have a question on amazon. we are also getting alphabet. google cloud revenue coming in at about $3 billion. second quarter google advertising revenue at about -- bringing total revenue to $38 billion. we have learned they are finally starting to break out that youtube add revenue -- youtube ad revenue.
3.8 dollars.about acquisition costs for the second quarter, coming in at about $6.7 billion. we are lucky to have you on days like this to cover both. we know that you are desperately searching through this. within these numbers, what stands out to you? jitendra: i think, if you look across the board, even facebook, even some of the names like shop of five -- like shopify, particular from the e-commerce side of things. the shopify was shocking, more than double the expectations, which is telling you that the organic demand is shrinking. there is a subset of demand that is getting more attraction. when these go online, they bring some ad dollars with it.
that is an impact across the board as well. for alphabet, i think the cloud division is where the focus will be going forward, given the investment they have been making it detraction they are getting on -- making and the traction they are getting on services like gaming, productivity applications, videoconferencing and such. the question, when will these efforts that see massive traction start adding to the growth numbers? romaine: when you look more broadly, these three big companies we just got, alphabet, amazon, facebook, these are companies that, given their size and position, there is only so much further they can grow before they stall out. looking at these numbers just off the bat here, it does not
really seem that growth is in significant jeopardy. are there any macro issues out there that could sort of interrupt this progress? jitendra: i think more than macro it is the regulatory issues. at least for now, the organic demand that digital platforms are getting is probably here to stay, at least for q3. expectations the for the next couple of years, diversification into new businesses, like amazon getting into advertising, facebook with cloud, google with e-commerce. regulatory issues might hold that back. i feel like regulatory issues are going to become a bigger deal for these companies versus macro. if you look at the world, how much of it is digitized, it is
not as digitized as we think right now. jeff bezos mentioned how amazon accounts for less than 4% of the $25 trillion retail market out there. because of the piece of this pie, the retail pie, the digital transformation pie is very small. the piece gets more attention than it deserves. the regulatory side is one to focus on. caroline: what a perfect voice for a day where we have such an enormous wealth of the biggest companies in the world bringing their numbers to market. jitendra waral. from new york, this is bloomberg. ♪
♪ taylor: this is "what'd you miss?" caroline, i will start with facebook, second quarter revenue coming in at about $31.6 billion, slightly ahead of estimate. shares are continuing to rise in post-market. beating on the bottom line, operating income. we are getting more details around cloud and youtube. in recent quarters, just started to drop out into it components. the cloud revenue, all-important, right in line with expectations at about $3 billion. typical money losers, that revenue also came in right in line with revenue. romaine: amazon earnings also crossing the wire. beating expectations. awaiting may be later this hour
apple earnings as well. caroline: let's stick with facebook for now. we will be going to the expert, david kurt patrick. , more thanthe world 3 billion people using the family of apps. how much theying benefited when the world was sheltering. they are starting to see the shelter-in-place restrictions easing and they see daily and monthly active users slightly down in the third quarter of 2020. how do you think this focus on facebook or the using of this family of apps continues? david: let's or member, we are living in a more virtual than ever world, and these are the platforms that are facilitating that world.
if we are sheltering in place, we are on the internet and probably facebook i'm a google, -- facebook, google, and amazon. for one thing, they went out of there's -- out of their way to say that the first week in july, they saw the same growth rate in ad spending as they had seen in the second quarter, which was a direct way to address the ad boycott. frankly, those of us who follow the company more or less knew that and this is what zuckerberg said to his people a few weeks ago, we are not really worried about it. reputational he, it is another story. romaine: we kind of knew that facebook's business structure, the ad boycott was not going to make a huge dent financially.
obviously, zuckerberg got dragged before congress yesterday and the hearing they had come i thought it was a little different than the previous hearings they had. business practices that maybe don't quite arise from the level of illegality. is there a real threat here that congress could do something that would interrupt the progress that facebook and other tech companies have made? will: how much it interrupt their progress, i don't know. but facebook is deafly going to do something. these companies are facing an increasing onslaught of regulation. there is no getting around it. what happened yesterday reinforces that likelihood. i agree with you that the congresspeople, especially on
the democratic side, showed a significant improvement in their understanding of how these platforms work, and have really done their homework in terms of harms they are identifying that every one of the four were doing in terms of participants in their platform. i found it stunning how detailed their critiques were and how they'll prosecuted these ceos around these issues. taylor: they are looking at a second 2020 on the high-end of the range. are they investing enough to prepare for the election? david: i doubt it. but they are certainly investing a lot. your colleague said earlier, they are going to face costs related to regulation which will case, morefacebook's people. they will not be able to expand it readily. taylor: david kirkpatrick, to economy media founder.
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and no credit check on the first two lines. get a $50 prepaid card when you switch. 5g is now included with all new data options. switch and save hundreds. xfinity mobile. romaine: apple earnings crossing the wire now. q3 revenue well above analyst estimates. average estimate, 52.30. just taking a look here from the numbers, this is a very good report. the revenue, specifically from billion, well6.4 above analyst expectations of $21.3 billion. even the mac, $7.1 billion. i did not know people were still buying macs.
caroline: i have to say, i am not a mac kind of person. .his is quite amazing .mashing revenue taylor: for a company who wants us to think they are a higher margin revenue business, 82% of the revenue comes from hardware services. instant analysis, we have given him a cool one minute to look through these earnings, we are joined by bloomberg intelligence analyst on nontreated vossen -- analyst anand. was this on your radar? >> no. but the numbers were fantastic for me stock price or accessibility standpoint. they might be going for a wider
audience. like that lower price in order to make it accessible. as you said, the numbers are very, very attractive. theund, mac, wearables, and services business. across the board, very strong numbers. romaine: let's talk about the services revenue. the numbers i am looking at now, that includes app store, services, icloud. that is above the consensus estimate of $11.5. there is a lot of talk about apple trying to grow that number through the services business. do you think they can have significant growth in that business and, if so, how? with: the idc came up iphone numbers earlier today. the iphonepansion of
a 30 million consensus to 37 million. extend theoes is install base. when you expand the install base , those created a dramatic platform. 30% in calendar year 2021. we think there is tremendous markup among the services segment. caroline: it will be interesting into geographies as well. this is a company that is a very big player in china. how do you expect that growth trajectory to be in that part of the world. business inevices
the non-europe, non-us parts of the world is stronger. services where the reach of apple is not quite as large potentially as here in the u.s. if you look at applecare, the google license business, if you the at the icloud business, amortized values of the software apple ships with the devices, those are all very strong. you have stronger growth businesses such as apple pay which come in this pandemic, is probably going to grow at a faster clip. across the board come i thing this was a very good thing. taylor: it really seems like the bulls are vindicated. on the company, only 10 holds, five cells. the past few days, people were looking at not only the third quarter revenue but the 5g cycle upgrade, the new phones expected
this year if there is not a delay, and the type of new room -- new boom that would provide to apple. how are you thinking about the cycle herein the new boost and upgrades? we had initially anticipated sort of a lull. to be quite honest, the lull has not come at all. even last quarter, people were expecting a pullback ahead of the new iphone launch. now, the stores are going to be closed, a lot of pullback, that did not come. hasiphone se, which historically been a two-quarter phenomena, that came through in a big way, we think, for apple. we think at this point, the iphone will drive the business. we have substantially tweaked
our estimates just ahead of this quarter. romaine: you covered these companies, a lot of companies. when you look at a company like apple, which time and time again seems to be recession proof, able to weather a variety of storms over the years. already a slowdown in i guess the refreshment rate, the replacement rate of phones among consumers. is this the kind of inflection point where we could see apple sort of move into a new stage of growth, something we saw at the tail end of this? anand: there are a pro and con to that. one is that apple is significantly larger than it was back then. the numbers are staggering. based on the law of large numbers, it does factor into the equation.
the refresh rate is pretty substantial as well. even though the smartphone market is relatively well penetrated and we would argue the refresh rate of existing platforms is pretty strong. another positive is the fact that the used smartphone market. the used smartphone market creates an upgrade potential for the primary market. the used smartphone market does not go away into the dump. it goes back into the insurance programs in the developed world and also into emerging markets. of servicesthrough business. across the board, it is doing all the right thing is in terms the devices business.
business, will see uptick in fiscal 2021. caroline: you gave us a smart, immediate answer, making it more available for broader types of investors. how much are we expecting the shares to get a lift on that? when we talk about some of the darlings of the retail investor base, how much are we likely to see other companies try to dine out on that? anand: i am certainly not an expert in that category. you can see that there has been some momentum shift towards the retail investor and there has been a significant uptick in that. these are all extremely well known brands. intellectual property leaders,
products with data products that are highly loved by the general public. if people continue to invest, like, and propel the stocks that they know. romaine: thanks for jumping in here. i just want to point out, to your point, caroline we are seeing a lot of activity in the nasdaq. nasdaq 100 futures up about 2%. normally don't get this type of volume and action in the evening hours. right now, up about 2%. we have gained 178 points just over the past few minutes or so. then you talk about the s&p 500. that,making up 6% of amazon about 2.5, 3%. we are going to have a rally on our hands tomorrow. caroline: record highs.
if we hold onto these gains on facebook, hold onto these gains on apple, and potentially if we manage on amazon, we could see record highs across the board. taylor: i just sent an email to jonathan ferro saying you need every analyst on your show tomorrow morning. romaine: whatever happened to him? i have not seen him in a while. taylor: the analysts have been vindicated. a lot them took a lot of heat for coming out and being really bullish. it is 2000 all over again. i keepre companies -- hearing this from analysts, these are companies that are posting real cash flow, strong balance sheets, real revenue growth, strong earnings-per-share growth. that is why you have the nasdaq up 1.9%. the valuations, they just argued that there valuations are justified.
these are real companies that are posting some growth. going toemily chang is be joining our show shortly. she had an interview with apple's tim cook. three former presidents were on hand to pay final tribute to commerce been john lewis today at atlanta's ebenezer baptist church, where congressman lewis's mentor and ally in the civil rights movement, the reverend dr. martin luther king jr. once preached. bill clinton joined barack obama and george bush. >> we live in a better country today because of john lewis and his abiding faith in the power of god, in the power of democracy, and in the power of love to lift us all to a higher ground. mark: president bush said john lewis preached the gospel and
lived in ideals. today, in the new york times, an essay that the congressman wrote before his death was published per his request on the day of his funeral. "while i may not be here with you, i urge you to stand up for what you truly believe. in my life, i have done what i can to demonstrate that the way of peace, love, and nonviolence is the more excellent way. now it is your turn to let freedom ring. ordinary people with extraordinary vision can redeem the soul of america by getting in what i call good trouble, necessary trouble." president trump, who did not attend the congressman's funeral , is suggesting the idea of delaying november's election to avoid male in voter fraud. he claimed that "it would be the most fraudulent and inaccurate election in history."
there has been no evidence of widespread voter fraud through mail-in voting. senate majority leader mitch mcconnell says november's election date is set in stone. while deaths from the coronavirus in the united states are mounting rapidly, public health experts are seeing some good news. the second search of confirmed cases appears to be leveling off. scientists warned that the trend is driven by arizona, california , florida, and texas, and that cases arising in more than 30 states. the virus has killed 150,000 people in the u.s.. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪
caroline: some of the world's biggest, most valuable companies reporting earnings after the bell. here to break it down, some great interviews of late, emily chang. emily: i just got off the phone with apple ceo tim cook. he walked me through the quarter. they did have a record june quarter in every product category, beating estimates. he talked about services revenue and better iphone results than expected. he said the first three weeks of april were particularly bad and particularly bad for the iphone. but it got better in may and june than they expected. i asked about how the pandemic is impacting products. he said that the pandemic is
likely helping sales of ipad and mac because of work from home and remote learning trends, but likely hurting sales of iphones and wearables. the current quarter, he said he would be talking more about this on the call. he told me the pandemic clearly does weigh on the results and will continue when it comes to the iphone and wearables when it comes to continued store closures. they are not giving guidance because of uncertainty. this is the second quarter in a row that apple has not given guidance. i asked if it was going to become a trend. he said it was something they are thinking about. we had to talk about antitrust regulation. obviously, we were all watching that hearing yesterday. he doubled down on the arguments he made in the hearing. i asked if he was concerned about regulation. he said, the app store has been
a runaway success and economic miracle. romaine: first of all, great getting tim cook. i am also told you got someone from google on the phone. alphabet earnings out as well. investor reaction is not quite as enthusiastic as for apple. emily: we are seeing what appears to be fragile macro economic environment weighing on the results. that is what the alphabet ceo just told me. she said they are encouraged by the performance they are seen. but basically what you are seeing in the numbers is a reflection of what is going on in the wider economy. ongoing this as an fragile environment. the impact of the shares, what you are seeing in facebook, where we thought facebook would be more negatively impacted. we are not seeing that in the numbers.
t about theuth pora hearing as well and whether she was concerned about regulation. lawmakers were particular hard on youtube ads. she said, we are happy to engage with regulators. all big companies are the subject of scrutiny and the data shows consumers love our product. we can expect this to be an ongoing issue for them, apple, facebook, and amazon. taylor: thank you as always. stay tuned because she will be going into a deeper dive into all of the day's tech earnings on bloomberg technology at 5:00 p.m. this is bloomberg. ♪
ruth porat at alphabet. we get to interview joe weisenthal. he is not the ceo or cfo of anything but he is pretty smart. these earnings with apple, quite astonishing. joe: my take is that when sony people around the world are at home, on their phones, doing stuff online, it is very good for companies that do stuff online. i know it is a controversial thesis but that is my big take away. at this has been a very nice environment for companies involved in tech and the internet. caroline: if they hold these gains, we will get record highs on apple, facebook, potentially amazon. i am interested on your take on apple, wantingon to win out on the retail investors.
joe: stock flip seems like an old-fashioned thing, like in the old days when you had to pay $90 to make a trade or whatever and a high nominal stock price was seen as offputting. these days, with so many people trading on robinhood, though they do offer fractional share purchases, maybe the nominal price turns off some investors. why not? it is keeping with the times of wanting to attract the little guy. are a: ura senior -- you senior tech analyst, you cover both alphabet and facebook, which analyst call do you join? joe: i would have them join the facebook call because they have so many different moving parts, whether it is instagram, whatsapp, facebook, how they are
dealing with the threat from tiktok. so many things intersecting with the facebook story. romaine: we are seeing the nasdaq 100 futures going through the roof. ofknow that the weighting the companies we are talking about are so high in the s&p 500 that they can drag it higher. we are talking potentially about some record highs for the broader market should these gains carry over into tomorrow. joe: it is pretty extreme there he. -- pretty extraordinary. you have to reckon with the fact that non-tech companies are inherently the customers of these companies. google, facebook, people buy stuff via ads, but the economy matters, businesses have to have
the money to advertise. there is only so far these companies can pull away from the rest of the market. but i could have said that five years ago or 10 years ago and i would have lost a lot of money waiting for it to revert to the mean. caroline: facebook sort of gave guidance unlike some of these other businesses. they say on the third quarter, daily active users, monthly active users will be down in some reason -- in some regions because people are not sheltering in place. when you see the economic data we saw today, not only the backwards stuff but the forward-looking stuff, how much does this speak to it being as good as it gets? joe: if the consumer really rolls over because the fiscal stimulus is not as good and the recovery peters out, that is a problem for any company that is
ad dependent. when you look at these games, justf these companies pulled forward years of future growth in the span of three months. there is no way to avoid the fact that they will have to slow down a little bit because of how much share gain they made. taylor: the rolling over of some of the eco-data, what does that report? the jobs of backwardsind looking. i don't think it puts a ton of pressure on lawmakers. if we get a bad report next friday and it is clear that the unemployment rate is still in double digits -- some people think we will see some backsliding -- then that will be