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Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, we begin with some big tech earnings disappointments, starting with Netflix. Those shares are down nearly seven percent in early trading. The world's most valuable entertainment company posted quarterly operating income of almost three hund a quarter billion dollars that was about four hundred million below analyst estimates. Netflix says a tax dispute with Brazil cut into its third
quarter results. On the company conference call, Netflix co CEO Ted Sarandos address speculation the company's weighing bids for parts of Warner Brothers Discovery.
We've been very clear in the past that we have no interest in owning legacy media networks, so there is no change there. But in general, we believe that we can be and we will be choosy. We have a great business. We're predominantly focused on growing organically, investing aggressively and responsibly into the growth, and returning access cash flow to shareholders through our shot to share repurchase.
Netflix co CEO Ted Sarando says the company had to pay about six hundred and nineteen million dollars to settle a multi year tax dispute with Brazil going back to twenty twenty two. He says the company would have beaten forecasts if not for that expense.
Nathan. Another earnings disappointment has shares of Texas Instruments down almost nine percent. The biggest maker of analog chips gave a lackluster forecast for the current period, adding to concern that a ship industry recovery is sputtering well.
Staying in tech, Karen Bloomberg News has learned Google is in talks for a mega deal with artificial intelligence company and Thropic. Let's get the very latest on that with Bloomberg's John Tucker.
John, good morning, Good morning, Nathan. You have the race for AI dominance may have gotten more intense. If this deal goes through, Google would provide Anthropic with computing power
worth tens of billions of dollars. It would allow Anthropic to use Google's chip's custom designed to accelerate machine learning workloads, and it would further cement the relationship between Google and the AI startup founded in twenty twenty one by former Open Ai employees San Francisco based Anthropic, best known for its Claud family of large language models, which compete directly
with Open Ai. Google has previously invested about three billion dollars in Anthropic and Google parent Alphabet up one point two percent pre market, New York. I'm John Tucker, Bloomberg Radio.
All right, John, thank you. We turned now to commodities, where gold and silver are rebounding from yesterday's selloff. Gold fell nearly six percent yesterday for its biggest inter day drop in more than a dozen years. At one point, silver was down almost nine percent. Mike mcgloone covers commodities for Bloomberg Intelligence.
Right now, it's just a little bit of profit taking, But it's what's happening in gold that's very disconcerting. As of yesterday, it was up sixty six percent in the year. That put it among the top four of the last one hundred years, with only nineteen seventy nine, seventy three, and seventy four ahead of it, So it's very expensive. At the same time, crude oil was down about twenty percent. That disparity around eighty six percent has never happened.
It's never been that extreme in Bloombergy Intelligence Mike McGlone checking prices of gold right now Comec's gold is down about two tenths of up percent at four thousand, one hundred dollars announced. Silver is down about a third of up percent.
Let's get to the latest, Karen. On the trade front, President Trump is sending a mixed message ahead of a possible meeting with Chinese President Shi Jin Pink During a White House rose guard in lunch with Senate Republicans, the President said the terifrate on Chinese exports would be about one hundred and fifty five percent by November first, if they don't make a deal.
Now, we're going to have a fair deal. I think we're going to have a very successful meeting. Certainly, there are a lot of people that are waiting for it. Maybe it won't happen. Maybe it won't happen. Things can happen where for instance, maybe somebody will say I don't want to meet. It's too nasty, But it's really not nasty. It's just business.
President Trump says he wants to make a good deal with China, but he says it has to be fair. Treasury Secretary Scott Bessett plans to meet with his Chinese counterpart over the weekend before the talks between Presidents Trump and she. Those are expected at the APEX summit in South Korea, though the date and time have not yet been announced.
Nathan India and the US are reportedly near a trade deal that could lower tariffs on Indian exports to fifteen to sixteen percent from about fifty percent. The newspaper is reporting India may agree to gradually reduce its imports of Russian oil as part of the deal and allow the US to export more non genetically modified corn and soymeal.
Overnight, Karen Russia launched multiple drone and missile strikes on Ukraine, as a planned second summit between President Trump and Russian President Vladimir Putin is thrown into jeopardy. The President address that possible meeting yesterday.
I don't want to have a wasted meeting. I don't want to have a wasted time. So I'll see what happened. But when I said, go to the line, go to the line of the battle on the battlefield lines, and you pull back and you go home, and everybody takes some time off because you have two countries that are killing each other, two countries are losing five to seven thousand soldiers a week, So we'll see what happens. It's we haven't made a determination.
Ar President Trump had said he planned to meet with President Putin in Budapest in the coming weeks.
Now, Nathan to a report that's raising conflict of interest questions at the White House. According to The New York Times, President Trump is demanding the Justice Department pay him about two hundred and thirty million dollars for past investigations against him. That includes the probes into Russian interference in the twenty sixteen campaign and the FBI search of his Mara Lago home. President Trump appeared to acknowledge the report when he was asked about it in the Oval Office.
We have numerous cases having to do with the fraud of the election, the twenty twenty election, and because of every thing that we found out, I guess they owe me a lot of money.
By President Trump says if he gets the money, he would give it to charity or use it to restore the White House. Any decisions about paying the president's claims would be made by senior Justice Department officials, some of whom could be the president's own personal lawyers. The Justice Department says all its officials followed the guidance of career ethics officials.
Let's turn back to the markets and earnings now, Karen, We're watching shares of Barclays. They're up about four percent. In Europe, the British lender raised its earnings guidance for this year and unveiled a five hundred million dollar stock buyback. We spoke with CEO CS van Kata Christian.
We had a top line beat of eleven percent growth yere over year to seven point two billion. On the top line, we've had nine percent consecutive quarters of tangible net value growth.
CEOCS van Kada Christian says Barclays is conducting a review of its entire Lorn portfolio after the collapse of Tricolor holdings.
On the economic front, Nathan UK inflation unexpectedly held steady in September after food bills fell for the first time in sixteen months. Consumer prices rose three point eight percent from a year earlier. Data is fueling market bets on a Bank of England interest rate cut before the end of the year. Time now for a look at some of the other stories making news in New York and around the world. And for that we're joined by Blueberrys and Michael Bahr or Michael good.
Morning, Good morning Careen. It is now date twenty two of the government shut down. Democrats say Republicans refuse to negotiate on Democratic demands for health care funds. President Trump says he'll discuss healthcare, but.
I'd love to meet with them. I just want them to open up the country grace.
Senate Democratic Leader Chuck Schumer says he and the House Minority leader have reached out to President Trump for a meeting.
People are just struck of the difficulty they will be in not having health care, not being able to pay the rent if they pay for health care. They're just shocked at how bad this is. And Trump has an obligation to negotiate with this solve this problem.
New York City's Canals Street vendors are nowhere to be seen, at least for now. There was an immigration crackdown in New York City as federal agents descended on Canal Street, famous for its bargain shopping and knockoff designer goods, and parts of Chinatown. The scene turned chaotic as agents made arrests. New York City Mayor Eric Adams's office said this was a federal action and the city officials were not involved
in the operation. President Trump said that Allied nations in the Middle East were prepared to send troops into Gaza to confront Hamas if the group did not cease its alleged violations of his peace plan. There was violence just days ago, prompting Vice President JD. Evans to make a last minute trip to the Middle East.
There are going to be hills and valleys. There are going to be moments where it looks like things aren't going particularly well. But given that, and given the history of conflict, I think that everybody should be proud of where we are today.
Tonight is the second New York City mayoral debate Democrat Zoron Mamdani, former Governor Andrew Cuomo, running as an independent and Republican Curtis Sliva. We'll square off at LaGuardia Community College. Global News twenty four hours a day and whenever you want it with Bloomberg News Now. Michael barn This is Bloomberg Karen.
Thanks Michael. Time now for our Bloomberg Sports update, and for that we bring in John stash.
Hour thanks Aaron. Opening night of the NBA at Oklahoma City, the thunder hoisted their championship banner, got their rings, and for the sixth time ever a season opener went to double overtime. First time it's happened in two thousand and five. OKC beat Houston five to one twenty four. Last year's MVP, Shay Gildess Alexander scored thirty five points, the only five at halftime. Golden State the Lakers one nineteen to one
oh nine. Kurt Suzuki, former Major League catcher never been a coach or manager, named the new manager of the La Angels. That's your Bloomberg Sports Update.
Stay with us more from Bloomberg day Break coming up after this.
Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business Appum. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. Investors were expecting a solid quarter from Netflix, and they mostly got it after the release of Kpop Demon Hunters and some other big hits during the quarter gone by. But a tax dispute with Brazil is putting a hit on the results for the streaming giant.
Let's get more now.
We're joined by Bloomberg Intelligence Senior Media and Tech analyst Matthew Bloxham. Matt, good morning. We are seeing a big drop in Netflix shares. Could this tax dispute be an ongoing overhang for Netflix? Is that what we're seeing in the price reaction this morning?
Yeah, you know what, I think it's a bit of a red hirang. I mean that they would quiet say yesterday and saying that they didn't expect this dispute to have any impact on for profits. I think what we're seeing is more of a reaction to, you know, an inline performance, particularly on the top line, and I think people were expecting something a bit better than what they delivered on the back of that slate of popular and well received content and which also included a widely viewed
live boxing event. So I think, you know, people just thought they'd done enough to boost the momentum just a bit more than they're guided to and we just saw it in line. And so I think it's just a little bit of a reaction to you know, that kind of whisper number being a bit better. But yeah, it came in a bit short.
And coming into these earnings, there's been all this you know, speculation around what's going to happen with Warner Brothers Discovery. The reports confirmed that the Netflix is part of that discussion. Does it need to be more a part of that discussion to get investors more enthused about this stock?
Now?
I think, you know, the investors are probably a little bit more evenly balanced, what I mean. And again, Netflix were clear yesterday that the majority of their growth will be organic and they'll look at these deals where they make sense. So you know, I don't think they're in a position where they just need to buy a studios business for the sake of it to kind of keep
them in the game to scale up. They have scale, They're clearly a great producer of content, So I think investor will be looking at them to be you know, careful and cautious and consider about any transaction that they were to make. Clearly, you know, it can bring some strategic benefit to them, but price is going to be an important factor for them here.
And in terms of the content coming up, We've got the next season of Stranger Things, some other big blockbuster hits that I think Netflix is hoping you're going to pay off for them. What's the outlook going forward?
Yeah, I mean, you know, Netflix is still by far and away that the leading streaming platform. We've seen a number of other streaming platforms struggle to some degree. Is what's going on Warner Brothers. So, you know, I think that they've got a great rhythm of producing content and building the customer base and also pushing through pricing creases. And obviously they've got the ads business, which is still relatively young but expanding, and that that's going to continue
to be an extra leg of growth of them. So as streaming platforms go, they're in a very strong position.
Just about a minute left here, but we got some pretty significant news, it seems, in the tech space, with this report from Bloomberg News that Google's making a deal on cloud compute power with Anthropic. What's your read on that.
Yeah, so Anthropic obviously a big rival to open Ai. Anthropics large language models called Claude. We're going to have to wait to see the details of this transaction media.
The bloombook story talks about the deal worth tens of billions of die I think, you know, we've seen a lot of so called circular deals in in the AI space recently, so this can be interesting whether this is like just more of a straightforward commercial deal or whether there's essentially an exchange of equity for the services Google
is going to provide. Now, Google is already an investor of the tune of three billion dollars into Anthropic, but it's also sits alongside a co investor that's Amazon, and so far Amazon's been a big provider of the kind of cloud services to Anthropic, and this is going to take some of that business away from from Amazon going forward.
So I think it. You know, we'll have to wait to see the details in the structure of the transaction, but in big picture terms, it looks like a good deal for Google in terms of boosting their cloud business.
This is Bloombergy Daybreak, your morning podcast and the stories making news from law Street to Washington and beyond.
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And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Day Bray