tv Whatd You Miss Bloomberg July 26, 2017 3:30pm-5:00pm EDT
she said in a statement when her helicopter was shot down, she did not care "if the americans risking their lives to save me were gay, straight, transgender or anything else. all that mattered was they did not leave me behind." an arizona republican, john mccain, his story of torture and survival as a prisoner of war in vietnam has come to define heroism, released a statement slamming the president, saying his tweets were unclear and "any american that meets current medical in readiness standards should be allowed to continue serving." obama administration interior secretary sally jewell says the review of two dozen national monuments by president trump is "highly problematic and out of step with american thinking." the order the review under the belief that the ex-president used designations to protect the white expansions of land.
she said today that mr. trump is trading national parks like contestants on a game show. u.s. insurers want the government to pay billions to stabilize the markets created by the informal care law. they say the government have to keep funding cost-sharing payments that reduce insurance expenses for low income earners. the demands, as the gop controlled congress wishes to dismantle obamacare. in a letter to congressional leaders, the national cessation of insurance commissioners says that $15 million each year through 2019 will help. the trump administration announced sanctions on 13 senior venezuelan officials today in an attempt to deter the nation's president, maduro, from proceeding with a plan to install a new legislative body that would rewrite the constitution. has strong inp the swift economic actions if the president goes through the election. global news 24 hours a day,
powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. ♪ ♪ from bloomberg world headquarters, on julia chatterley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. 30 minutes from the close of trading in the u.s. julia: u.s. stocks staying green and of the dollar weakens as the fed keeps options open. joe: the question is, "what'd you miss?" scarlet: when will the fed reduce their balance sheet, relatively soon. why it could not be the most concern. and sanctions on officials from venezuela today, why they are looking at taken a step toward that country that is rewriting its constitution. and a repeal on obamacare, we go
to capitol hill for more details. ♪ isia: standing by for moore our national political reporter who joins us from capitol hill. explain what we are expecting, a straight repeal vote to be held in the senate. that is a deeply unpopular move, but i guess that have to be done at this stage. >> this is what republicans have been heading toward, they will be voting on a motion to try to essentially add some antiabortion restrictions, that would need 60 votes. that will not pass, so they will move on to a history of and down bill to repeal the affordable care act. in 2015, which president obama vetoed. joe: everyone expects the straight repeal vote to go down, so assuming that is the case, what is the next key moment to watch? >> it is highly likely to go
down, i spoke with senate republican leadership this morning that admitted they do not have the votes. well over three members have objected to a repeal only bill, most notably the moderates who want a replacement in the way of tax subsidies or some sort of bridge on medicaid. so that people do not lose coverage without contingency in place. we are likely to have amendments by democrats trying to get the senate to vote to send the whole bill back, not really back to committee, but to the committee to look into it. this process, they have been complaining, did not go to the normal order of committees before it was sent to the floor for a direct vote. it is grandstanding at this point, the democrats know they do not have the votes to get it through, but they want to make a point on the floor. julia: vote-a-rama, i like that word, even if the subject matter
is serious. we'll be back, no doubt with you soon. we will take a look or the major averages stand now as we go toward the close. abigail is standing by. abigail: we are looking at gains and record highs for the three major averages. simultaneous record highs on paper. and mid earnings season, so they are very positive. -p 1% my performing - outperforming. and along with the stocks, ang in texas instruments, they did beat on their second-quarter estimates. excuse men we have, come away of texas instruments offering a third-quarter revenue review that is solid. turnaround under the ceo lisa sue happening on the new chip.
facebook, paypal, facebook expected to post more than 40% year-over-year growth on the top and bottom line, so the growth there. suggestal, the option that this could move by 6% upper down. speaking of options, we are going into the bloomberg to take a look at this. investors facebook, very bullish. white, the shares of facebook trading near record highs and in inge the call to -- climb into the quarter. earnings reports adjusting the investors are expected to be strong, even though the stock is hitting up against strong selling pressure. interesting to see what will happen and we will know soon. julia: great work. those results out in 30 minutes, we will be discussing them. ask to the federal reserve and the decision to leave the rates steady. they say they will run off the balance sheet relatively soon.
and we have the oppenheimer funds ceo -- cio. joe: thank you for joining us. a couple of language tweaks. we are not seeing much reaction, but a little bit of the lower yields at the long end of the curve. what is your key takeaway? >> i think the key takeaway is the fact the fed is indicating it is a bit more data dependent than it was in its communication in the past. the fact inflation is being made out the way it is and in the decision could be driven by it, i assumed they would not be data independent. thingsployment and other driving it would do well. the type they are not -- fact that they are not taking immediate measures -- that is new. joe: the fact that it could be driven by cell phone bills and concerns on rising asset prices, this dow's back, maybe it is not
a one-off cell phone bill discount. >> it is a continuation of the past janet yellen and how she has been. it is a continuation. scarlet: when it comes to financial conditions, we have had 4 interest rate increases, 100 basis points, and it has none -- done nothing to tighten those conditions. how does this restrain what the fed can do next? does it? >> tightening financial conditions would be an objective if your sole objective was the fact he wanted to bring down the markets. on the other hand, if you want to support growth, financially, leaving the financial conditions raisingreen format while policy rates, it should have a good outcome. scarlet: so this is the best of both worlds? >> absolutely. they are sitting pretty at the moment, it is working out better than planned. scarlet: let me follow that up,
why talk down the asset prices? >> i find that is right. they have been sort of hurt by that phenomenon over the last two cycles. bubble,and the housing and asset prices continuing to rise, they are worried the same scenario will play out. i do not think that is the case, i do not think the asset prices are as high as they were during those crises. but is something to be concerned about and they are focusing on it. julia: so when we had that two weeks ago with the janet -- with janet yellen mentioning it and we saw the nervousness in tech stocks, then everything went quiet. are they periodically going to step in and make noise, a little bit of watching the investors, ignore them, move on? >> they are worried about it. at the same time, not so worried that they will tighten policy
despite low inflation. prices isel of asset a concern and it will remain so and i think that is not going away anytime soon. julia: so this week spot for the fed -- sweeet spot for the fed is also a sweet spot for investors? >> yes. into the rates rise meaningfully. i do not think it will happen anytime soon. joe: at the beginning of the year we actually had a discussion about inflation really kicking in hard. is there still a risk that we will hit some level of full employment, maybe see the investors get caught offguard by the spike in inflation? >> in the central banker's dream, that is a reality. in that the phillips curve is very much alive and one of these days -- but unfortunately the data has not really born that at
what do you think of the sanctions? you look at this, either a nervous time or great opportunity. before there was definition on the sanctions, that they would be broad reaching. but now having it targeted on individuals rather than broad-based, it means the possibility of repayment of short-term debt is high. so, there has actually been a bounce back. prices were weaker a few days ago and now they are bouncing back. julia: what happens if they hold the bow and amend the constitution, and the united states says, ok, we will have an oil sanction? then what? hans: that would be possibly pretty bad, but the particulars of the vote, to some extent it is window dressing and the last
hoorah. there is enough in fighting so that there is at some level they are setting the stage for the end of the road. i think most insiders there are trying to protect themselves with transition, but there is sense of inevitability about the transition. the vote can happen, but i would be surprised if any sanctions on the back of that would be broad-based enough to hit. the impact on the economy there would be so drastic, that the population would suffer worse than they have been. any opposition you speak with are not proponents of broad based sanctions. joe: i do not want to turn the discussion to a -- want to turn the discussion to a country that is making more progress, greece, which is returning to the bond market. it is a fairly small bond offering. there is a chart of the payments
that they have over the coming years. it is a small bond offering. your firm is participating in this, buying the great bonds -- greek bonds. why are people excited to buy the debt now? hans: the thing i love about this, it is cheap. or seen as cheap. there is enthusiasm, and for those of us in the stress world, you have to explain to people that 19% is actually attractive. reentrythe country's into the global financial world is usually a step-by-step process. it is really changing the psychology and this is a good first step for them to start reintegrating. us while certainly any of who are involved in this, there is a lot of opportunity in greece if the psychology changes. i think these are real changes. greece will continue on a path
toward reintegration. julia: good first step. scarlet: is it something that you would be ready to dip into? krishna: of course. we have participated in the offering as well. the idea is the economic environment in europe in general has changed dramatically. 2-5 years ago if somebody told me the growth rate was going to be 2% in europe, all of us would have laughed. that is the reality. ecb has done a good job of reviving growth. beneficiary of that and we are at the point where the exchanges or some sort of debt relief is in the cards, it could be coming down. ads thenvolved in credibility and i think things are improving. that is why the yields are at 4.5%. scarlet: we will take a break to
let you know that the senate is voting on a straight repeal of the affordable care act. no indication on whether it will pass. we will keep you posted on the developments. they have begun voting. julia: we can probably guess the result. scarlet: probably not. julia: as you are saying, this is a sort of turning point for europe in terms of investor perception. we have heard about investment into equities, but the timing for greece is also important because not only are they counting down a year until the exit their latest bail out program, but if we look at the timing of this ecb could be releasing a balance sheet and it could be more expensive for them or even increasingly difficult for them to raise debt for grace -- greece. krishna: right. but the ecb has been very measured, and they have
committed to a path i believe will continue to support growth in the eurozone in general, places like greece. greece is a turnaround story and we like it. joe: i am interested in your comments when he talked about the importance of the first step, reentering the global market and the financial aspect. in your experience, is there a country you can point to and say this is how it typically works, the model to follow? hans: how far back should i go? joe: as far as you want. hans: i remember mexico coming back. by the time you launch a bond issue, whether it is small or large, that is usually the first up. be -- step. behind the scenes, there has been architecture put in place to support the deal and start the transition from greece
accessing the official sector to the private sector for funding. joe: and it is not too late. if you had just been holding the existing stock of greece out there, doing extraordinarily well the last few years, so the fact they have returned to the market does not mean that is the peak. there is room to run. hans: i think you can still make money, trading at about 150 basis points. on the fixed income side. if you look at the national bank of greece on the charts with the action from the last five years they have not gone up enough to register on the charts. [laughter] hans: the upside potential in equities is huge. people always say when a country is coming out, it is difficult -- is different from the other ones like russia, but they have other things they have a competitive advantage on. it is a first step in a number of steps and i think the big thing you will see is when the
official sector restructures, the debt load that people have been worried about will be off the table. julia: critical, because in this case the debt has not come before the return to the market. the first one. hans: the official sector debt is what has been weighing on the market. people make the mistake of looking at the debt to gdp, but it is the cost of servicing that that is important. the number can be irrelevant. look at japan. the official sector, the europeans have been intending to deal with this and have been dealing with it and impose german elections you will see a change in the debt profile of grace. -- greece. scarlet: thank you very much, hans and krishna. julia: bloomberg business flash. at&t surged today while they had a subscriber gain.
it increases encouragement that they can censor themselves in a price war. $85 billion acquisition of time warner. and second quarter estimates -- they beat second quarter estimates. and moving at the fastest rate since 2011. world's biggest luxury goods company says they are cautious about the second half of the year because of economic instability. asmay, surpassing -- france's most viable company. and chipotle is helping other new queso dish will win back the customers. illnesse struggled with outbreaks at two of the restaurants. this is part of an ongoing investigation. the case of could be on -- the
scarlet: another shot of the senate floor where the vote has begun a repealing obama care and our understanding is they will also, this vote includes a delay of a replacement with the paul ryan amendment. julia: absolutely. the vote counted currently at yes, 22, no 38. still a fair way to go, but it is not expected to pass. negotiations still needed on this one. scarlet: "what'd you miss?" facebook earnings at the top of the hour. we are taking a look at estimates, revenue of $9.2
billion for the second quarter. facebook along with other big tech companies switching over to or earnings estimates, earnings over all, so looking at about $1.13 for the average estimate. billion.sers, 1.9 8 thisspeaking of users, but in the biggest perspective we can. monthly average users, getting closer to the do billion -- the 2 billion mark mark zuckerberg set as a goal. extraordinary numbers. take a moment to realize how incredible to billions -- 2 billion is. julia: we need to look at the average revenue. domestically in the u.s., but also internationally, because that is where the growth is. monetization not as high. joe: diving into that shortly.
highs, the dollar softer as the fed bounced back and kept options open. i am julia chatterley. scarlet: i am scarlet fu. joe: and i am joe weisenthal. if you are tuning in life on twitter, we want to welcome you to our coverage. scarlet: facebook earnings are due any moment. we want to show you how markets are ending, the dow up 4/10 of 1%. that is another high. the s&p 500 waffling in the unchanged zone. it may close at a record high. bond prices higher, means yields are dropping. the tenure coming down to 2.29%. the dollar weakens. it continues with the dollar index up 6/10 of 1%. we are awaiting the results from facebook, it's second-quarter numbers do any moment. let's bring in david kirkpatrick.
joe had mentioned monthly active users as a key number to watch, that mark zuckerberg had targeted. 98 billion.us was $2. david: they passed it, that is where they are headed. they are pushing on their other products for massive growth, they are getting that from instagram and whatsapp. as a product, an institution, is on such a role that if we do not see another astonishing quarter yet again, i will be surprised. user growth continues relentlessly. joe: something i noticed today is one of facebook's competitors, hardly a competitor anymore -- snap, keeps falling. we do not talk about it anymore,
it seems to fall every day. now. in the 13's is that the market saying there will never be a number two in this space? david: i would distinguish between the stock in the company. snap continues to be a competitor in key demographics, particularly in the united states. i do not think it has shown it would be a massive profit machine in the short-term. but it is continuing to nip at facebook's and instagram's heels in a way they pay attention to at facebook. if you are a competitor, that is one. wechat in china is another one to watch. julia: they said facebook's future -- wish they had accepted a buyout. we are expecting to see an improvement.
43% revenue growth on the same quarter of last year. revenuesg has warned are going to materially slow. news feeds, the number of ads that they can cram on. when you look at figures concerning revenues per user -- they made it to $17 in the united states and canada last quarter. the rest of the world gets to 10% of that figure. that is where the growth is, international, asia. monetizing that is appearing to be tougher. david: what is the long-term direction of the global economy? growth in all of those areas. view, itke a long-term is a positive for facebook. it may have popped out in countries like our own or yours. but in nigeria, south africa, brazil, indonesia, facebook has huge, ongoing upside. many of those economies are doing well.
julia: do think investors stick with them while they wait for that? zuckerberg has warned people these will be challenges in the short-term. david: i think that is worth waiting for. if i could -- for. if i could change the topic -- zuckerberg wrote a letter about building a global community in february. it was unprecedented, 5800. he has talked about the responsibilities facebook has. that is wonderful and impressive rhetoric, but unfortunately, it is not backed up with actions. the only way we are going to believe facebook is taking a different view, is if they are willing to let their page views and revenue slow in the interest of doing the right thing. the fake news problem is partly a traffic problem. they love it, because people want to look at fake news. it is an interesting issue. scarlet: the incentives are
aligned to get more news, weather fake or real. david kirkpatrick, stick with us. we're still waiting for facebook's results. we want to get an update on the senate voting on the health care bill. let's check in with our congressional reporter, stephen dennis. can you tell us what the latest tally is and how things are shaking up? stephen: it is a matter of time before they call this vote. there are already a number of senate republicans that voted susant a bill, all except collins, voted a couple years ago to repeal as much as they could and not replace it. now, some senate republicans say they are shooting with a real bullet. a lot of them are not comfortable with that. even the health chairman was voting no. shelley in west virginia, a key
vote for the final bill, she voted no. ohio voted no. we expected this to go down, it is in the process of going down. the real question is, what will be in the final package that mitch mcconnell called together, probably friday morning? off,et: sorry to cut you we have breaking news. a has stepped down from the hp board. -- megf questions whitman has stepped down from the hb -- hp board. there isait to see if any kind of follow-up announcement from this big personal change. facebook results also out. line, $9 the revenue .23 billion. daily active users, the one billion mark, it has actually
$1.23n at $1.22 -- billion. monthly active users just over 2 that one, beat on too. joseph, to david nodding, the smile there. scarlet: i need to get to the meg whitman announcement. what does this mean to you, how would you read this? >> there is increasing talk that she is a candidate for the uber thing. and hpe.as ceo of hp she is stepping down from one and not the other, as far as i understand it. , of the people, of the people i
heard mention as possible ceos for uber, she is the best idea i have heard. it is the kind of thing that would get her excited. i do not know if it would get the employees of uber excited, but it might. the shortlist has fewer than six ceo candidates for this role and the head of human resources said they could hire a new one within six weeks. in terms of the timing on this one, a kind of fits. scarlet: you make a good point, she is a member of the hp board, not hpe. but she is the chairman of the hp board. she stepped down from being chairman, then? scarlet: it is a big signal. she one reason people think could be so good, coming into ebay in the early years when they needed someone to turn it into a real business, and they performed phenomenally well. a similar situation for uber right now. david: she went from ebay, a
different, consumer-oriented company to a different market entirely and did generally a pretty good job. to divide theabor company and overall, you have to say, i am impressed by meg whitman. could she run uber? we do not know. scarlet: they still have to higher a lot of other people, us coo. -- a coo. david: she probably thinks, this could be my coup de grace. the feather in her cap. i could see her wanting to do that. julia: you have numbers on facebook. the stock is down some 2% in after-hours trade. high expectations, despite zuckerberg's cautions. david: it has performed in recent weeks and months. since the last quarter, it has really jumped.
a little bit of movement. did it go up during the day today? scarlet: it was a little changed. david: it is fairly significant. joe: i want to reiterate a few interesting numbers. we talked about the eps, $1.32. and the revenue. mobile revenue representing 80% of all revenue. in 2016.4% this was their big break, when they went public. they do not have mobile monetization, the headcount jumping year over year. a littleey are getting more bureaucratic than they would like and i would like to see. they have so much to do, they are a huge global company, hiring people all over the place. scarlet: they indicated 2017
would be a year of investment. let me reiterate the point that you, david, made. meg whitman is stepping down from her board seat on hewlett-packard inc. of hpe.he chairman again, she has not stepped down from hpe. given the speculation announced regarding a new coo at uber, the timing is interesting. julia: we are joined by cory johnson. i wanted to get your take on the numbers. and if you want to weigh in on hewlett-packard enterprises and meg whitman? cory: i have been covering hp for a long time. hasen buffett says, when it hp has had a difficult time under meg whitman's leadership,
whether it is hpe or hpq. they have had restructuring charges going back to 2001. two after they split into supposedly viable companies. it was a business collapsing, in terms of the pc and printer business. she was unable to rescue that, in spite of billions spent in acquisition. i thought it was a great surprise to see her name even floated when it comes to uber looking for a new ceo. scarlet: let's shift gears to facebook. that is what we brought you on here to discuss. everyone has talked about how instagram is a new frontier, the new focus for the company. facebook has never disclosed instagram's numbers on its own, even though it has been selling ads on that platform since 2013. we have seen how alphabet has to disclose numbers for youtube. do we presume facebook will have to itemize instagram?
cory: it comes to a point where it is 5% of revenues. the fcc has never made that really clear. they are given some wiggle room there. there is a perception when you look at the number of ad units from instagram that full deployment of ad revenue is beginning to start. it is interesting to look at the two businesses, whatsapp versus insta graham. they are massive, global platforms. they show virtually no competition in terms of their size. wechat might be the exception. the path toward monetization seems to be different. graham, having relevant rences,ed on users' prefe what like-minded people look at. on whatsapp, it is much more
insidious. within whatsapp, it seems the monetization strategy is to capture the ideas that those types of people are using and use the data in other apps. julia: i want to interrupt and say the senate has rejected the straight obamacare appeal with the two-year delay, and the rand paul amendment. that was what they were voting on, it has been rejected. this was expected, no one believed this vote would pass. they will continue to send new amendments. this leads to what is being called the votearama. joe: this story is a long ways from ending. david, i want to go back to facebook. i was thinking about comparing and contrasting it with alphabet, we got their earnings earlier in the week. alphabet has all these new bets they are making. alphabet making possible bets
for a possible future in another field. facebook, not as much. what are the frontier things facebook is doing, whether it is vr or other subjects? notd: facebook has structured itself the way alphabet has. vr, the oculus, and other parts, they have made it clear it is the future of social networking. they have this internet access program for global connectivity, with the drones in the sky that are put -- solar powered, etc.. they celebrated winning a prize for a paper. zuckerberg sent a congratulatory note to his people. they are doing major, major research in ai, almost to the point of thinking of it as a business. they could apply it to so many
parts of their business. julia: elon musk has his own views on what zuckerberg is doing. and this is another comment zuckerberg made. we know attaching advertising to some form of content has been critically important, not only for facebook, but their competitors. zuckerberg said they would spend the $3 million an episode to create original content. how important is that for facebook, how are they progressing, how does it hit the bottom line? david: that is something that surprised me. i would be interested if corey had a comment. facebook producing original conduct -- content is a major shift for them. they wanted to be a neutral platform for content created by others. when they have deviated that -- from that in the past, they have given it up. scarlet: what do you think about facebook as the new netflix? cory: the best business seems to
be in selling content and making hbo.nt, whether hulu, facebook looks at this and wants to make it work. it is part of its culture, experimentation and trying new ideas. dt is so sexy, they have glomme onto the idea. cory johnson, and david kirkpatrick, thank you so much. julia: the senate rejecting a straight obamacare repeal amendment. let's go to the latest, to steven dennis, who joins us from capitol hill. nobody expected this vote to pass. it has been unsuccessful. where do we go now? thatn: it was interesting seven republicans voted against this repeal. i think they are sending a
message to leadership on what they want to see in a final package. it looks like they are going to start off behind closed doors with what they call a skinny repeal, getting rid of the mandate and tax, and see what they canbuild -- if build consensus behind closed doors. we will see lots of amendments, probably tomorrow night into friday morning. there will be a final package unveiled, that they have to be ready to vote for. the question is, can they build in anything more significant than that? there are a lot of conservatives that want to cut medicaid in the long-term. fromad a lot of no votes medicaid expansion states like west virginia. it is hard to get shelley moore capito to vote for that. you will see negotiation on that in the next couple days. joe: is it plausible that the vote for this. the taxepeal affects
and mandate, and it goes to conference and what comes out is essentially the aca or something that looks like the bcra? steven: i think it is unlikely you go from something really skinny to something really big. keep in mind, there is a reason they are talking about something really skinny right now. that is because they tried and failed after -- month after month, week after week, in a door meetings to get that consensus. the idea the house will put a magic ingredient that makes it easy to pass seems very unlikely. there is still talk, maybe it will go to conference, maybe the house will say, let's take it as a win and move on to the next bill. they have a lot to do in september, from the debt limit, to keeping the government open, to the s chip program. julia: steven dennis, bloomberg
head of congressional coverage. the senate rejecting that two-year delay. seven republican senators voting against that repeal. susan collins, shelley moore alexander, all came under fire from donald trump this morning for voting against even discussing this. and john mccain, of course, as expected. scarlet: lots of breaking news. 2.01ook results, $2.0 -- billion active users. shares up 1/10 of 1%. meg whitman stepping down from the hp board. she is coo of hpe but a step down as the chairman of the hp board. we will follow up. this is bloomberg. ♪
julia: "what'd you miss?" another week of record highs, simultaneous highs for the nasdaq, s&p 500, and out. valuations not seen in years. i want to hand it over to abigail doolittle. abigail: i am here with a strategist and we are going to look at a few charts. thank you for taking the time. this is our first chart. we have simultaneous record highs for the s&p 500 and the dow. i believe you think this is bullish? >> as a technical analyst, it is difficult not to be bullish. you have the long-term up for quite some time, many years, depending on how your measuring it. we had a breakout not that long ago that targeted a measured
move projection, what you see on 26.40.art here about and now intermediate-term target with the time that has passed. it is bullish. we have intermediate momentum turned positive again recently. after having wavered throughout the space we saw. abigail: that first measured move before was a consult -- consolidation to the moving
>> i am mark crumpton, it is time for first word news. as we have been reporting, the senate rejected a simple repeal of obamacare that contained a two-year delay. several republican senators voted against the repeal only plan. lawmakers are still in the early stages of an unpredictable floor debate on health care, amid significant doubts republicans can get the 50 votes they need to pass any type of measure. on leaders will hold votes different health bills to see how close they can get the passing something. it will include obscure rolled in parliamentary challenges, to culminate in a all night vote-a-rama later this week that
could feature dozens of amendment votes. secretarye press sarah huckabee sanders says decision toump's ban transgender americans from serving in the military is just that, a military decision. >> the decision is based on a military decision. it is not anything more than that. it is simply about obviously, it is a difficult decision. it is not a simple one. but the president feels it is the best one for the military. >> sanders also said the president expressed concern since the obama administration's policy on transgender service members went into affect and called it this -- expensive and disruptive. israel's removal of metal that sectors at a compound for mosques. forces wererity documenting those entering the
city. they saw metal detectors at the site, which is considered a holy place for both jews and muslims. muslim leaders have alleged the detectors encroached upon their rights, a claim israel denies. that ash judge has ruled critically ill baby will be transferred to a hospice unless is terrence and a hospital agree on an end-of-life plan to keep the 11-month-old alive a bit longer. his godfather told reporters that he feels for him. charlie, toshes for spend a few days at home with him, to do things normal parents do with their babies. him, spend a few days at home and let him spend life as a normal little baby.
the godfather also accused the hospital of being "so harsh" over the last few days. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. julia: senate republicans rejecting a simple appeal of obamacare, which has delayed replacement. let's go to the head of congressional coverage in washington. joe: kevin, with the failure of the state repeal -- straight repeal, and what everyone is calling the vote-a-rama, people trying to put their amendments this is the so-called skinny repeal. what is the time this year we could see that happen? kevin: everything is a little up in the air. there may be a handful of votes
over the next one before our -- over the next 24 hour, 30 hour period. we couldin the morning see a final vote. on some level, that final one could be an amendment vote that strips out everything else that was done up until that point and puts it into the context of the skinny repeal, which might be a slimmed-down attempt to get rid of a couple elements of obamacare. if they are able to get 50 votes, they will do a conference for the house. they areote shows, really struggling to get close to 50 on anything. scarlet: if any of these initiatives pass with more than 50 votes, are they put into effect right away or is there a delay? how does that work?
anything the senate does has to be acted on by the house in some fashion. or the senate passes, and they go to conference. this is just one more step in the process. these will be test votes to see if there is any way for the senate to arrive at a more ambitious repeal bill. they can find different proposals or start to creep up or even 50 republicans on board, they may fast-forward to be more ambitious. there will be votes where each party tries to force the other party to take votes that are embarrassing or difficult. a lot ofgamesmanship, testing the waters. at the end of it, the most likely thing is, put in this tiny repeal only, stripped-down repeal bill and see if they can push that through. scarlet: gamesmanship in
washington, testing the waters -- i never. thank you. joe: i want to recap what we got from facebook at the top of the hour with its earnings. that company seeing its stock up 1.3%. $1.32 per in at share, a little behind estimates. daily revenue beat estimates at $9.32 billion. daily active users topping 2 billion for the first time. that topped estimates of 1.98 billion. julia: emily chang spoke to sheryl sandberg. emily, what did she have to say? and sarahryl sandberg frier talked about what really drove the numbers this order.
she focused on engagement and adoption of ad products. facebook surpassing 2 billion that is up,, year-over-year. ad revenue up 47%, year-over-year. they are seeing 15 million new business profiles on instagram. they have slowly but surely ramping up instagram. they do not break up that revenue, but it is contributing meaningfully to the bottom line. they estimate instagram will bring in $3.92 billion this year. compare that to $170 million for all of snapchat. and we had a scoop out that facebook's foray into original television will happen in august. they have been investing in episodic content. i asked about the size of this video opportunity, what it means for the bottom line. take a listen to what she had to say. >> we are seeing a lot of
content of viewing and engaging shift to mobile. our goal is to be a platform for content providers to find their audience and monetize. right now we are doing early investing and kickstarting the ecosystem for more episodic viewing on facebook. we think that kind is important, so we're making that investment. our goal is to be a platform and a content providers creating that content in finding their audience. plan for facebook is to monetize original shows through mid-role as. -- ads. we had that soundbite about what she thought were the main drivers of growth this quarter. >> we had a really strong second-quarter, that is based on increased engagement and increased ability to work with marketers. if they can reach more
audiences, -- we are up to 17%, year-over-year. that is exciting. ad revenue is up 47%, year-over-year. we have 50 million business profiles on instagram. and, 70 million business pages on facebook. emily: we will be listening in coming up, any contribution to fromue to instagram messenger and whatsapp. we will have more on "bloomberg technology," coming up. joe: i want to clarify something, that $1.32 was a miss. estimates had been for $1.13. it beat on both top and bottom line. scarlet: julia has a special look at this company. julia: the main highlight during the quarter was amazon's deal to buy whole foods.
investors will be looking for details on that acquisition and how prime day and its cloud services will affect to the current quarter. amazon is the focus of today's the numbers do not lie. let's talk with the whole foods deal, the largest and amazon's 23 year history. until then, that $1.1 billion purchase in 2009. amazon is likely to disrupt the $800 billion u.s. market for food and beverages. thisan see here, up to point, amazon held only a tiny share of this space. another push for amazon is the increasingly competitive cloud services space. this unit has seen eight straight quarters with growth of more than 40%. it accounts for much of their operating profit. they have diversification in revenues and should balance spending growth for the firm. amazon added 22 million u.s.
prime numbers in the last 12 months, said its recent prime day sales event was its biggest day ever, generating around $1 billion in revenue, according to estimates. that is triple its daily e-commerce revenue made daily in 2016, according to bloomberg data. the prime members helped fuel their unbroken revenue streak. they will be looking at the revenue number and margins in the earnings report. they remain optimistic, sending amazon stocks to a record high this week. we will be following the release after the closing bell. scarlet: thanks so much. we will be speaking with morgan stanley's head of interest rate strategy for his take on the fomc statement, and the wind down of the fed balance sheet. this is bloomberg. ♪
scarlet: "what'd you miss?" the fed committing to maximum optionality. a wind down of its balance sheet, relatively soon. where does that leave the balance sheet and investors? matthew hornbach joins us. had to investors begin pricing for this balance sheet reduction when it does begin? matthew: i think the market is pretty well prepared for the beginning of the balance sheet normalization process. the fomc statement was in line with our expectations. there are been speculation that perhaps the fed might have announced the beginning of the process at this meeting. but we never put too much credence into those views.
it was a pitch rate down the pipe. the market took it really well. i think the market is prepared for this process to begin. scarlet: the way investors should position themselves is to get along the belly of the treasury curve. what is the risk of doing so? matthew: the next focus of the market will be the next rate hike. if we get the balance sheet normalization in september without a rate hike, the market will naturally look to the december meeting. trying to figure out when the fed is going to hike rates again. when we are sitting there at the september meeting and we get those papers in hand, we are going to be paying a lot of attention to what is happening fomce dotplot, how many participants are expecting the fed to raise rates in december. the arbiter will ultimately be the inflation data we get between now and then. joe: i hate to go into the past and dig up old stuff, but i
still think this is interesting, what you're saying about the t.tes and the dotpo -- dotplo what does it say about the importance of qe? matthew: it is not that the balance sheet normalization process was not a big deal. part of the reshaping of the yield curve that we saw since the presidential election has something to do with market participants thinking about the normalization of the balance sheet. since last summer, the fed has hiked interest rates three times. usually when the fed hikes interest rates, the yield curve flattens. from last summer to today, the yield curve has not flattened. that is a very interesting factoid people are not aware of. the yield curve has not flattened much since the fed began hiking rates last summer.
from my perspective, the yield curve has hiked in the balance sheet normalization process. it is not to say it is not meaningful. it is meaningful, and worth around 50 basis points. and we want a steeper yield curve because it supports the smaller banks in the economy, surely. we are looking at what happens when the balance sheet starts to be reduced, the reinvestment proceeds they get from the bonds a mature are going to be bigger than the bond they allowed to roll off. where are they going to invest that money? if they do it at the front end of the curve, that will accelerate the process, a retraction of the balance sheet. that would seemingly allow the curve to steepen. do we not have a problem at the back end of the curve? matthew: it depends on if the treasury makes up for the lost funding, and the fed will no longer be providing them.
it kind of depends. by the way, we will hopefully get some color on the treasury's plans to make up for the lost funding when we had the august 2 refunding documents released to the public. it will be interesting to read through those documents to better understand what the treasury is thinking about doing in order to make up for the lost funding. of theely, how the back yield curve trades from here going forward will be more a function of the treasury's decision than anything the fed does with the run off of the balance sheet. meeting the july fomc has ended, the testimony has ended. tomorrow, there will be testifying to the banking committee. how could that move the rates market? the interesting thing is, we do not know much about his monetary policy inclinations. hopefully he gets asked questions that give us a better
idea whether he sits more with the hawks on the committee or the doves. keep in mind, mr. quarles will have the 17th dot. now we only have 16 participants. it is a very interesting situation if we only have 16 dots. you could have a no man's land, which the market pays a lot of attention to. dot could be an interesting policy. joe: with the latest statement and yellen's testimony, it seems like the fed and the chair are speaking to what seem like transitory factors. maybe more long-lasting than they previously thought. aside, what isid
the persistent inability of inflation to get back to 2% saying about the economy and also the models economist have to analyze the economy? matthew: joe, that is a great question. it is something i have thought a lot about. what itity is this, tells you is that financial conditions are not as loose as everybody thinks they are. look at the dollar, for example. it is still about 15% higher than it was two or three years ago. that is a very sustained appreciation in the price of the dollar. i think that continues to weigh heavily on goods prices. i think it is a little aggressive to say financial conditions are super loose, when you have the dollar sitting out there at these very expensive levels still. julia: matthew, great to chat. matthew hornbach, thank you for joining us. if you have a bloomberg terminal, check out dayb .
you can check us out online, interactive with us directly. this is our options insight. you can scroll down, look for different segments, look at what the senate were doing today. super exciting opportunity if you have a bloomberg opportunity. scarlet: you never miss breaking news. what do we call it? joe: the future of tv. julia: tv on your terminal. this is bloomberg. ♪
the aerospace giant raising its profit forecast, channeled billions of dollars back to shareholders. they squeezed more cash out of its 787 program. they will spend some of its cash haul on dividends and buybacks. president trump's military transgender ban facing opposition from several tech leaders. tim cook tweeted his response saying, we are indebted to all who serve. discrimination against anyone keeps everyone back. mark zuckerberg and others tweeted their disappointment. claims -- claims says it will cause too much disruption. continued strength in mobile video advertising. sheryl sandberg spoke with bloomberg about her new mission of the company.
>> i am really excited about the new mission. i think it is what we have been doing and will have an increase building community. we see it with the groups. i thought with the work i did to form groups on facebook, which has surpassed any of my wildest expectations. i see it when i meet people forming groups, and how marketers approach building community on facebook. scarlet: sandberg set higher user numbers increasing gauge meant. note, a programming peer-to-peer conversations tonight at 9:00 p.m. eastern. -- will bebe's speaking with paul singer, to discuss his concerns for the economy. do not miss that interview. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪
♪ scarlet: "what'd you miss?" record highs for u.s. stocks after the fed basically nothing. relatively soon at the start of its allen sheet reduction. the u.s. dollar weakened. joe: tomorrow, i will look at u.s. durable goods. scarlet: and, a massive day in your earnings in europe. we have deutsche bank and others reporting. and comcast and verizon before the bell. julia: amazon intel, starbucks reporting. scarlet: that does it for "what'd you miss?" whoooo. i enjoy the fresher things in life. fresh towels. fresh soaps. and of course, tripadvisor's freshest, lowest prices. so if you're anything like me... ...you'll want to check tripadvisor. we now instantly compare prices from over 200 booking sites... ...to find you the lowest price...
...on the hotel you want. go on, try something fresh. tripadvisor. the latest reviews. the lowest prices. >> i am mark crumpton in new york, you are watching "bloomberg technology." the u.s. senate has rejected a simple repeal of obamacare that contained a two-year delay. several senators voted against
the repeal only plan. lawmakers are still in the early stages of a floor debate on health care as doubts continue to surface that republicans can get the 50 votes needed to the 50 but he did to pass any measure. >> it is a cruel and arbitrary humiliatedesigned to transgender americans who have stepped forward to defend and preserve our country. weets revealss t the president has no respect for the men and women who risk their lives to defend our freedom. mark: pelosi and the department of defense revealed that the department of defense spence 20 times more on