Good morning.
I'm Nathan Hager and I'm Amy Morris. Here are the stories we're following today.
The drop in futures follows another record close on highs for US stocks and a disappointing after the bell forecast from Intel. The shares of the chip maker are plunging twelve percent in early trading. Intel's first quarter projection for both sales and profit came in well short of Wall Street estimates. Dan Morgan is a portfolio manager with Sinovis Trust.
The guideance going into the first quarter is disappointing, even if you look at the midpoint of that range at the game and revenues, and the came at twelve point seven billion. Street was at fourteen point two billion, and then that EPs number was a big mess.
Dan Morgan of Sinov's Trust notes the chip maker's personal computer business is recovering, but demand is weakening in the lucrative market for data center.
Chips, and we're also seeing shares of Visa fall. In early trading, all of the world's biggest payments network posted profit above estimates. It forecasts low double digit revenue growth and diluted earnings per share to grow in the low teens the stock had closed at a record high before the earnings.
And Amy earnings are front in center in Europe as well. Let's go to London get the latest with Bloomberg Stephen Carrol, Stephen.
Good morning, Nathan and Amy. Better than expected sales figures from LVMH have champagne corks popping on European markets, investors seeing the resilience from the world's largest luxury conglomerate as a positive sign for the sector. The sentiment driving shares higher not only for LVMH, but also rivals kerring Ermez and Richemont. Another top performing stock in Europe is drinks
maker Remi Quantro. That's despite reporting falling sales, investors instead focused on cost cutting plans and hopes the Cognac slump may have bottomed out.
In London.
Stephen Carrol, Bloomberg Radio.
All right, thanks Steven. Back here in the US, we're seeing major changes at Apple. The company is embarking on an historic overhaul of its iOS Safarian app store offerings in the European Union, Mark German covers Apple for Bloomberg in San Francisco, So I would say.
These changes are historic. For the first time, Apple is going to allow users and again this is EU specific to install third party app stores. So you'll be able to install maybe an app store from Epic Games, maybe from Microsoft met maybe from Meta, replace the app store from Apple on the phone, and install applications to get those third party programs. So that's the biggest change.
Bloomberg's Mark German says the sweeping changes are coming in March and is a direct response to the new EU New Digital Markets Act, which imposes rigid restrictions on the largest tech firms.
Turning to the economy, amy the US has pulled farther ahead in the race to be the world's biggest. We get the details from Bloomberg's Jeff Bellinger.
The US economy is emerging from the pandemic period in a better place than China's, and you can thank the vibrant American consumer. Gross domestic product rows six point three percent in nominal terms, that is, unadjusted for inflation last year, outpacing China is four point six percent gain. China has been struggling under the weight of a year's long real estate bust and its worst streak of deflation in some twenty five years. The economic outperformance is also reflected in
the respective country stock markets. US shares have hit all time highs this week, while Chinese equities are mired in a six trillion dollar plus bear market route. Jeff Bullinger, Bloomberg Radio.
Thank you, Jeff, And speaking of the economy, we will get a report this morning that is closely watched by the FED. The core PCE deflator, the Fed's preferred inflation measure, likely grew at a subdued pace in December. Economists are forecasting a gain of two tenths of a percent.
Well.
Treasury Secretary Janet Yellen is putting out some positive words about inflation, amy saying it is now well under control.
We were through a period in which inflation was high, higher than we hid really seen since the late seven or early eighties, but it has come down quickly.
Treasury Secretary Yelling ads Americans are also benefiting from wage growth that now exceeds inflation.
On Capitol Hill, Senate Republican leaders are trying to salvage a deal on Ukraine aid and border security. GOP negotiators are concerned an impasse at the border would deny Ukraine the sixty one billion dollars in aid that it's seeking in its fight against Russia. Meanwhile, Texas is still putting up razor wire at the border, even after the Supreme Court and gave the Biden administration the go ahead to cut it down. Texas Governor Greg Abbott, we.
Are going to make it impossible to enter Texas illegally, and that includes maintaining the National Garland border, building more border wall just like what President Trump put up, as well as extending the razor wire wall in the state of Texas.
Governor Greg Abbott tells Bloomberg the state has a constitutional right to defend itself. You can hear more of our conversation with the Texas governor on the Bloomberg Talks podcast.
And when it comes to those border togoas Amy, some senators are concerned Donald Trump is inserting himself into the process. Bloomberg zed Baxter has that part of the story.
Mitt Romney says this cannot happen.
Former President Trump is indicated to senators that he does not want us to sell the pumbit the border. He wants to lay the play of the border at Biden and the idea that someone running for president would say, please hurt the country so I can blame my opponent and help my politics is a shocking development.
Now with Trump being perceived as the eventual GOP nominee, of the question is will he insert himself into every congressional battle Ed Baxter, Bloomberg Radio.
Thank you, Ed.
Closing arguments are set to begin later today in the defamation case against Donald Trump. They come after the former president left a Manhattan courtroom fuming after his three minute testimony gave him little time to refute writer's sexual abuse claims. Time now for a look at some of the other stories making news around the world, and for that we're joined by Bloomberg's John Tucker.
Good morning John, Good morning Amy. A moratorium this morning from the White House, the Biden administration has halted the approval of new licenses to export liquefied natural gas. This gives the administration time to scrutinize how the shipments impact climate change. The administration's pause comes as environmentalists have seized on the projects as a litmus test to the President's
climate change commitment. Overnight, the state of Alabama executed death row inmate Kenneth Smith, marking the first time in US history nitrogen gas was used to carry out capital punishment. The UN Human Rights Office called on Alabama to stop the execution, noting there's no scientific evidence to prove that execution by nitrogen inhalation will not cause grave suffering. General Motor is blaming poor leadership for mishandling its Cruise Robotaxi crisis. That story from Bloomberg's Charlie.
It is an admission the company is hoping we'll get its cars back on the roads. A report by the law firm Quinn Immanuel, which was paid by Cruise, outlines how executives took an adversarial approach with regulators after one of its autonomous cars struck and seriously injured a woman. The incident led Cruise to halt its fleet nationwide, which undercuts GMCEO Mary Barra's vision to transform the carmaker from a twentieth century metal bender to a transportation company of
the future. Charlie Pellett Bloomberg Radio.
Attorney General Merrick Garland spoke at an event marking the start of a new foundation named at supporting mental health and wellness for law enforcement officers.
Coverage through that program now extends to officers who are permanently and totally disabled due to certain mental health disorders, as well as to those who die by suicide as a result of exposure to traumatic events that they encounter while on duty.
Howie Lebengood Foundation, named after a Capitol police officer who defended the building during the January sixth riot and done by suicide three days later. It flew seventy two times. It was only expended to fly five. NASA's Ingenuity Space helicopter was deployed to the surface of Mars in two thousand and one. NASA's now abounced the four pounds are of vehicle has flown its last mission. Global news twenty four hours a day, whenever you want it with Bloomberg
News Now. I'm John Tucker. This is Bloomberg Amy.
All right, Thank you, John, and we bring you news throughout the day here on Bloomberg Radio. But now you can get the latest news on demand whenever you want it. Subscribe to Bloomberg News Now to get the latest headlines at the click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot Com plus apples, Spotify,
and anywhere else you get your podcasts. Time now for our Bloomberg Sports Update, and for that we bring in John Stashauer.
Amy upset at the Australian Open, where Novak Djokovic is that ten times champion. He had won thirty three matches in a row. He was trounced by the fourth seed, Jannick Sinner, twenty two year old from Italy, who won sixty one, six, y two, six, seven, and then six to three. He's the youngest finalist at the Australian Open since Djokovic. In two thousand and eight, two NFL teams named new coaches, the LNF Falcons going with Raheem Morris, who had.
Been the defensive cordator of the Rams.
He actually was an Atlanta assistant from twenty fifteen to twenty and the Falcons interim head coach. He was also the coach of the Tampa Bay Bucks for three years. Carolina Panthers going with a relative unknown, Dave Kanalis, who had been coaching the offense at Tampa Bay.
He's only forty two years old.
He's spent thirteen years coaching with the Seahawks NBA blowout in New York, Nicks All over the defending champion Nuggets won twenty two to eighty four, far and away the Nuggets worst loss season Celtics with a blowout win that was in Miami won forty three to one ten seven Celtics and double figures. Warriors at home lost by a point to Sacramento won thirty four one thirty three. The ex Warrior Harrison Barnes the career high thirty nine points.
Wizards lost at home to Utah once twenty three to one o eight. The Wizard's making a coaching change, moving west Untel junior to the front office. Ryan Keith, an assistant coach, takes over for the rest of the season. Bruins won in overtime at Ottawa three to two on a Brad Marshan goal. Edmonton shut out Chicago. The Oilers have won fifteen in a row. John Stashed. We're Bloomberg Sports.
From coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on sirisxam, the Bloomberg Business app in Bloomberg dot com. This is Bloomberg Daybreak.
Good morning.
I'm Nathan Hager. The frenzy around cutting edge technology and artificial intelligence may be leaving some big tech names behind. This morning, we're talking about Intel. It is tumbling in early trading after delivering a sales and profit forecast that came in well short of Wall Street expectations. For more on these earnings and the text story going forward, we're joined by Bloomberg's Pritty Gupta Critty. What's holding Intel back?
A little bit of everything? And you know, this is so much pressure that Intel and Pad Gelsinger at the helm of it really has to live up to remember you for the last i want to say, two or three years, even in kind of the epitome of that chip gold that we had in twenty twenty one, where supply chain issues were really the focus. You had this major concern that Intel was not pulling its weight in terms of the chip sector, and Pad Gelsinger at the helmet it said, look, this is going to be our
turnaround story. We are going to be the comeback kid of the chip sector. And that's exactly what's not happening. Let me walking through the numbers here, Nathan, because they're pretty substantial. It's their first quarter forecast that's really worrying a lot of people here. The revenue coming in about twelve point two billion to thirteen point two billion. That's the forecast for what this first quarter is supposed to
look like for them. But the estimate, the Wall Street estimate, was fourteen point three billions, so they're almost missing that by somewhere between one to two billion dollars. That is
a very big margin to be missing from. It also has to do a lot when it comes to their actual business model and the when we think of Intel, we kind of think of them as their old guard tech and instead they've actually been trying to compete with likes of Advanced micro Devices AMD or otherwise or Nvidia for example, that really been going headfirst into the AI sector. So Intel has been saying, look, traditionally we look at PCs, maybe we should be focusing and set on the data
centers that are meant to power the AI story. And that's where they're saying that those that investment the sales there fell ten percent in the fourth quarter, So not only are they not growing, they're actually able to keep up the momentum that they currently have, they're actually contracting. So it's kind of a bag of negativity when it comes to the Intel story.
So does this mean that the names that we've heard of elsewhere in Vidia, AMD, these names that have built so much excitement around the idea of artificial intelligence and gotten a lot of investors jazzed up. Are they just running away with this and Intel's getting left behind?
Well, they've got a little bit of a different dynamic here. Vidia think about it as a much larger company that Intel is the same with advanced micro devices. AMD actually was one of the early players in terms of really solidifying that AI presence. Remember they actually partnered with meta platforms early on when Mark Zuckerberg's that he wanted to dive in to the metaverse, and AMD kind of glatched
onto that. Story. Pad Gelsinger over at, Intel's dealing with a little bit of a different issue, and it really comes down to manufacturing capability. Remember, Intel was one of the chief names that President Joe Biden has really been focusing on when it comes to bringing some of the chip manufacturing capacity back onto US soil. What that does is make chips a little bit more expensive. It can
also mean losing customers in the process. So what Intel has done is actually doubled down on their manufacturing operations really putting tens of billions of dollars into US factories as well, And that's something that some of their rivals aren't doing because they are still doing a lot of that production out of Taiwan, out of South Korea. Intel kind of changing the game on that front, and by the way, making investments that really only going to pay ten twenty years.
Down the road.
So they're dealing with a different set of issues. But net Nathan, you're right, they are falling behind.
So what about that longer term outlook? When you see a short term outlook like this that so disappoints Wall Street, what does that mean for things when it comes to Pad Gelsinger's turnaround plans longer term?
Well, look, he's still trying to enlist a lot of confidence. If you look at on the commentary that came out with this earning story, he is saying, look, this is a first quarter story only if you look at their projections, they are meant to kind of dip first and then recover.
But the problem is, there is a credibility issue here, There's a believability issue here because Pat Gelsinger is also on this kind of campaign to re ensure a lot of investors and a lot of the folks that are investing Intel not to mention the American government that they
can't actually pull the off. The problem here is just that that initial number, the margin is so low, or actually so large, that the drop in revenue is so low that you are starting to see real issues when it comes to Okay, well, not only are you going to make up the margin you're missing in the first quarter, but you also have to then grow by a substantial amount to catch up to your competitors. And that's really where they're facing a lot of the hurdles.
So in our last thirty seconds, what could we see going forward from Intel, Well, if still.
This campaign about believability, they basically have to prove that their way is the right way, that this comeback story is not over yet and they can't actually deliver on it at a time when the AI story and AI investment story is moving very very quickly, and it comes down to the fact of where do you want to put your weight behind the traditional PC business that has proved very lucrative or this kind of new fangled AI story.
This is Bloomberg day Break today, your morning brief on the story's making news from Wall Street to Washington and beyond.
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