Good morning. I'm Brian Curtis and I'm Doug Krisner. Here are the stories we're following today.
Iran is warning the US it will not be spared if the Israel Hamas war spreads at Baxter has Global News from the nine to sixty newsroom in San Francisco, And.
Yeah, that's right, Brian. On the warning goes both ways. Iran's Foreign Minister Hossein amir Ad de Halahan saying that un IS the US is over seeing genocide against the Palestinian people and says quote, I warn if the genocide in Gaza continues, they will not be spared these fires. US Secretary of Saint Anthony Blinkot, also addressing the UN.
If Iran or its proxies attack US personnel anywhere, make no mistake. We will defend our people. We will defend our security swiftly and decisively, and.
Calls on the other member nations to send Iran a loud and clear message that it should not expand the war. Meanwhile, National Secureity Council spokesman John Kirby says aid into Palestine is moving slowly.
Since the twenty first of this month, some seventy four trucks have now gotten in twelve over just the last twenty four hours.
Not enough, and he says that it really needs to go faster. Meanwhile, Ukraine, he says, the military has been able to hold onto the defense against the Russian campaign and the reports of unarrest in Russian forces.
We have information that the Russian military has been actually executing soldiers who refuse to follow orders.
Kirby says more aid for Ukraine has needed as well. The man hunt in Maine for the suspect of the mass shooting that has left eighteen people dead and thirteen injured is massive. The manhunt is Mayn's governor, Janet Mills says concern for safety is still very high.
Today.
Main state police have issued a shelter in place order for Lewiston, Lisbon and Bowden as the man hunt for that person of interest, Robert Card of Boden, continues, and.
Some schools and colleges also remain under lockdown. The White House is calling on the new Speaker, Mike Johnson to start work immediately on gun legislation. This is a spokesman a Krein Jean Pierre.
Let's work together to ban assault weapons and high capacity magazines. Let's work together to enact universal background checks, require safe storage of guns, and keep guns out of the hands of criminals and dangerous individuals who have no business being armed with a weapon of war.
And Johnson responds, prayer is the answer.
This is a dark time in America.
We have a lot of problems, and we're really really hopeful and fearful.
Prayer is appropriate at a time like this.
And Vice President Kamala Harris as another American community torn apart by gun violence in our.
Country today, the leading cause of death of American children is gun violent.
Yeah, so they're all calling for legislation. President Joe Biden said to me with China's Foreign Minister wangy Tomorrow, Wang in the US to try to rough over some rough edges with the potential of a higher level meeting at APEX. But Bloomberg'snick Wadham says, the goal for the US is just making things personal.
So what you're really seeing is an administration that wants to get things back on track and do what Joe Biden likes best, which is those interpersonal relationships with other leaders around the world.
We'll have more details on the meeting in just a couple of minutes, Taiwan says China's carrier strike group is crossing the Abashi channel and that it is very dangerous situation. China's Defense Ministry is pushing back, saying Taiwan is moving in a dangerous direction, using the words dangerous situation of war at an accelerated pace. This after reports the Taipei plans to buy military drones. Global News twenty four hours a day, whenever you want it with Bloomberg News Now
in San Francisco. I'm at Baxter and this is Bloomberg.
I'm Brian Curtis, along with Doug Krisner. Paul Alan will join us shortly. We take a look here at some of the top business stories of the hour and the effect on markets. Amazon reporting third quarter revenue and profit that topped analyst expectations as thanks to rising sales in the company's retail advertising and cloud computing units reaction from Bloomberg's poonam goil.
They posted really robust online gains here double digits for the third party, which is obviously impressive at twenty percent, and then on their own online sales, a one pe business you know you mentioned up seven percent and I think that's very healthy considering the environment that we're in, so I think they're on track to deliver a good holiday.
Keep in mind that last year the comparers are much easier because they did a report a two percent decline in online sales, so easy compares plus a good start to holiday with the results that they're reporting bodes well for them as they move into the fourth quarter.
That's poonum goil. The results today provided more evidence of Amazon's cost cutting efforts. Amazon spending on sales and marketing declined, and that's the first since at least twenty fifteen. Amazon shares really buffeted in late trading, first up, then down a little, and at the moment trading higher by three point four percent.
We also heard from Intel after the bell, and there really no shortage of positive remarks. The stock as a result, is up eight point six percent in the late US session. Intel is now predicting a return to sales growth in the fourth quarter. We have more from Bloomberg's Charlie Pellett.
The quarter was fueled by an improving PC market and a more competitive product line. Intel said sales in the period will be fourteen point six billion to fifteen point six billion dollars that compares with an average analyst estimate of fourteen point four billion. The upbeat outlook shows growing
momentum for Intel's turnaround efforts under CEO Pat Gelsinger. The company has said that the PC market, its biggest business unit by ship uns, is through the worst of a historic slump caused by a build up in inventory in New York. Charlie Pello Bloomberg Radio Well.
Ford Motor has said that or It reported earnings that fell short of third quarter expectations, and it comes just after the automaker agreed to a twenty five percent wage hike and a tentative deal to end the UAW strike. We get more Now from Bloomberg's Tom Busby.
It was a difficult quarter for Ford despite strong auto sales, especially for its gas powered models, but adjusted ernix per share were thirty nine cents, well below the forty seven cents analysts expected, but because of higher sticker prices for its revenue forty three point eight billion dollars was better than forecast. Ford's CEO Jim Farley said in the statement that the company is now quote radically changing how we work in order to deal with some unspecified cost and
quality issues. The automaker also said the six week long strike has costed one point three billion dollars so far.
Tom buzzby Bloomberg Radio.
Ford shares traded down a little more than four percent in after hours. And separately, we're hearing that the UAW has offered a new contract proposal to General Motors similar to the tentative agreement with Ford. The automaker is said to be preparing a counter offer for Thursday or Friday.
Well.
In the last few months, we have seen a surge in treasury bond yields at the long end, and today Treasury Secretary Janet Yellen said this move is not being driven by a widening fiscal deficit. Here she is speaking earlier with Bloomberg.
We're seeing yields go up in most advanced countries. Part of the increase in yields, I think is simply a reflection of the strength of the economy, the notion that interest rates will be higher for longer.
Treasury Secretary Janet Yellen there. She spoke hours after the GDP report for the third quarter showed the American economy grew at an annual rate of four point nine percent. That is the fastest in nearly two years. The key driver robust consumer spending Brian Well.
Chinese Foreign Minister Wang Yie is said to be meeting President Joe Biden on Friday. Bloomberg's Bonnie Ao has the story from Hong Kong.
Once visiting Washington may lay the groundwork for a potential meeting between the US and Chinese leaders. Biden has four months said he hoped to meet President She in the fall. The anticipation comes as geopolitical ties between the two nations are showing optimism, but Chinese officials have so far declined to confirm She's attendance. At the APEX summit. Wan will also be meeting Secretary of State Anthony Blencoln and National
Security Advisor Jake Sullivan. We hear the US side is planning to raise the subject of the Israe Hamas war in Hong Kong and Bonnie Al Bloomberg Radio.
Eleven minutes past the hour. I'm Brian Curtis with Paul Allen, and we say good morning to Gene Munster, managing partner at deep Water Asset Management. Gene, thanks very much for being with us. So we have a couple of wars to consider a very intriguing macro environment and earnings. Let's start with earnings. On my scorecard, at least on the initial response to the earnings from the Super seven that have got so much attention this year, I got three positive,
three negative. But the market overall has been negative. Your thoughts on how to frame this.
Well, it's definitely been negative. And I think that we need to think what's going to happen over the next three, six and twelve months. And over the next three months when it comes to tech, we're probably going to see interest rates stay pretty much where they're at now. They may go up a little bit, but they're unlikely to
go down. And I think that that is first and foremost as a deep water we think about our investments in tech, that dynamic is going to be a headwind to I think how some of this tech is going
to perform. The macro does matter? Just go back and look at what's happened with the Nasdaq, the Russell five hundred as since talks of rates going higher have impacted of course these stocks, and as far as the geopolitical piece to it, that had a particular potent impact on what happened with Meta yesterday and specifically shares were up in the after hours after the report of their quarter and then after the CFO Susan Lee mentioned softness in
the first few weeks with the conflict in the Middle East that sent shares down six percent, And so ultimately, as these do matter relative to interest rates and what some of the macro commentary is, and so it is something we're keeping it a close eye on. We do focus good news here, we do focus on where the world is going, and ultimately I think the companies that are benefiting from that will ultimately pull through this.
Yet you point on those price movements. I mean, we've had Matter off about seven and a half percent over the past two days, Alphabet off about twelve percent in the same period. If you think about you know, this notion that okay rights might be high for longer than market seems to have wrapped us hit around that. But one of those other big themes AI it's not going away. When you see those sorts of dips, do you buy.
I think you do. And part of the reason is we do. I would say that deep water. I think the question that I would ask is how much do you believe in how transformative AI will be. From our perspective, we don't think we've even started. There's people that say we're in an AI bubble. We don't think we're anything even close to it. I can go through the numbers that support that, but I think more importantly is we've seen one massive shift which is relative to Nvidia's business.
Intel tonight reported and their shares were up seven percent. So the hardware piece is having a benefit here, but the broader benefit about how this can create new business lines and prove engagement create higher profit margins for companies. That's something that's going to take three, five, ten years. And so yes, I think that if you have patients, you own some of these companies, and I think the
biggest ones, the one we're most optimistic about. The two is relative to Google and Meta that should benefit for the next five years around this theme. So absolutely, I would say a slightly different way is it's hard to understate the significance that AI is going to have on these companies in the next five years.
Gene optimization was a big theme this year for many, most notably at Meta, but others as well. Is that still the case for these companies, or are we starting to see now any kind of uptick in spending in capex and an investment.
They're still using the language and meta use the language about optimization Microsoft, Google, They talk about this, but that the kind of the we're hitting. The second derivative here, in other words, is that we've had most of the improvement has happened around profitability. Amazon tonight had some impressive upside to margins. But the bigger picture is that we're through the year of optimization, the year of improving efficiencies, and I think that the focus is going to turn
much more back to growth. And I'll just give a quick example of a support to that is that Amazon reported they absolutely crushed the earnings estimates, and the stock initially was up and then it went down because the AWS segment, which is a smaller part of their business, but it's kind of the signature of a growth opportunity
that miss numbers. And then on their earnings call just recently, the CEO said that they've had a ton of bookings in the month of September, hinting that the growth will reaccelerate in the December quarter, and sure enough, shares went up basically immediately four percent on that, and I think that speaks to we have turned the page from the year of efficiency a few quarters ago. Now we're back to the year of growth power by AI.
We've also heard from s K Heinex until this week. Do you feel like the bottoms and in terms of cyclical memory ship amount, I think.
That's a little bit more of a mystery because I think that there is the macro. I do think we are going to go to a recession. I think that's the market is properly factoring then to a lot of retail stocks. Even though their businesses are doing well, the stocks are down. That means that the market is anticipating some sort of a slow down. I think just consumer still hangs in there, but eventually in the next six
to twelve months, I think it will pull back. Doesn't impact the big AI opportunity, but I think from a lot of these chips in memory, I think you could see a slode on. So simply put, I don't think the bottom's in.
This is Bloomberg Daybreak Asia, your morning brief on the story's making news from Hong Kong to Singapore and Wall Street.
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