Skip to main content

tv   Whatd You Miss  Bloomberg  October 26, 2017 3:30pm-5:00pm EDT

3:30 pm
public health emergency. overdose deaths involving prescription opioids have quadrupled since 1999. treasury secretary steve mnuchin is in israel where he met with benjamin netanyahu the thank him for his support of the united states and the trump administration, while steve mnuchin said the united states doesn't have a better partner in the region that israel. he is in israel for three days. an explosion at a fireworks factory near jakarta has left at least 47 people dead. a police official says most of those killed were trapped inside the factory when it burst into flames. dozens of others were injured. the kenyan president cast his ballot in his hometown in today's presidential election rerun. he told reporters that 90% of , and hetry is calmed will work to unify the nation if reelected. >> is time we move forward.
3:31 pm
indicated by the supreme court, let us move on. in nairobi tossed water cannons and fired tear gas at stonethrowing protesters today. they are protesting today's rerun, saying it is not credible. many polling stations in opposition areas did not open today because of security concerns. 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. abigail: live from bloomberg , were 30dquarters
3:32 pm
minutes from the close of trade and stocks are declining as the dow is learning with a new record high. >> the question is, "what'd you miss?" , microsoft and intel all report. president trump speaking last hour at the white house about the opioid epidemic in america. he called it a national public health emergency. we look at the impact it's having on the labor market. >> ingles be to nigel travis about his company's results in where his thoughts are on wages as we look ahead to next week's jobs report. scarlet: opioid abuse is now a public health emergency. on top of the human cost, opioid abuse is taking an increasingly meaningful impact on the economy, in particular the labor
3:33 pm
force. whos bring in jeff korzenik joins us from chicago. you've done some incredible work on this, tallying up the cost, the economic cost. you've tabulated it at $80 billion a year as the price tag in the united states for opioid addiction, whether lost productivity, health care, or incarceration costs. midwest.sed in the to start with, there's a smaller pool of workers to draw from, isn't there? jeff: absolutely. many of the job openings in critically needed jobs require drug testing and this knocks people out of the pool as well. it's causing bottlenecks in production, it's causing firms to grow more slowly than they might, and all this is adding up to greater and greater cost as we move through the economic cycle. scarlet: how do you see
3:34 pm
companies respond to that? are they requiring more than drug tests? what is the evolution here? jeff: drug testing is often required for insurance purposes, but it really boils down to worker safety. speaking to one owner of a manufacturing company in western michigan who told me he until hisug tested employees came to him and felt they were in danger from a few bad apples within the workforce and asked him to start drug testing. so there is no easy way out of the drug testing hurdle. joe: one of the big themes in the economy over the last decade is the relentless decline in the labor force participation rate. economists dating -- debating how much of it is structural or cyclical. i'm looking at a chart my terminal showing participation of both men and women. we've seen a big comeback for
3:35 pm
female labor force for dissipation rates. for men, it's come back a little bit, but not as much. opioid crisis,e how much would you save his has contributed to this number that has vexed so many economists? men, it's anme age overwhelming influence. we've noticed -- noted the work saying 1.8eger, million prime age males are out of the labor force and that's consistent with the other data would looked at. long-term fact that unemployment developed because of the weak recovery and finally the incarceration and recidivism cycle in the u.s. is unlike anything we've experienced in prior cycles. that adds up to a major structural problem in the american workforce. scarlet: let's bring in what dr. krueger had to say when he spoke with us recently.
3:36 pm
>> we need to tackled the opioid crisis. a fight, if you can. if you look at the decline in participation, how much of his -- how much of it is attributable to demographics and how much to the opioid crisis? -- over halfright the percentage point, around .6 percent i estimate is due to the spread of opioid medication. scarlet: so that is some sobering numbers we are dealing with. the president taking action today, jeff. what you think is the best way for the government to address the issue? jeff: i think the start was today. we are raising the issue, the president is using the bully pulpit of the presidency as well as the national public health emergency designation just to raise the visibility. as i travel around the midwest
3:37 pm
and the southeast, i'm shocked by how many people not only don't realize that this is such a bad problem, but i am truly amazed by the number of people who come up to me after i speak and tell me about just within the past year, their son or daughter having a sports injury and getting a 60 opioid restriction with an automatic refill. there are still doctors overprescribing. trump alsoesident set this is going to be the generation that instant opioid epidemic. is that possible, and with his target of percent growth, the current influence on the labor market, is that crimping that possibility, and could that really be an influence to achieving that sort of economic growth? itf: i absolutely believe is. it's not the only issue, it's long-term unemployment, it's incarceration and recidivism, but these are intertwined. long-term unemployment correlates with drug to -- drug
3:38 pm
use, which correlates with crime and imprisonment. so they are all caught up together, and we are wasting american productivity through these social ills. i think it can be solved, or we can make a big debt and it, but we have a -- make a big dent in it, but we have a lot of work to do, given the number people who are abusing opioid. joe: you mention there's a lot of surprise on the part of people about the widespread problem, do you think it is changing as a demographic of the people who are? addicted? i know that more and more young people are dying of opioid related overdoses versus 2005. as more and more people, as it stops being about a specific demographic, is that awareness being raised? jeff: it's absolutely true. we've been sounding the alarm at fifth third for well over a
3:39 pm
year. even in that time, i recognize growing awareness not just through news and other sources, but through personal experience. some of this is that the stigma once associated with overdose deaths that cause those debts to be kept hidden has been reduced, which is a very good thing. so people are becoming more and more aware. what they often lack is the language to speak to their children, to communicate the severity of this. this is not the same as talking about pot or other drugs that are now being legalized. this is really bad news, and it's out there and it's prevalent. i'm not sure that young people yet fully recognize how dangerous these substances are. thank you for joining us from chicago, jeff korzenik. donuts stillin'
3:40 pm
debating whether it should drop the second half of its name. will discuss third-quarter results with nigel travis, next. from new york, this is bloomberg. ♪
3:41 pm
3:42 pm
scarlet: "what'd you miss?" duncan is considering dropping nothnuts from its name but of travis says they will always make doughnuts. revenue topped estimates while adjusted a gift came in short of expectations. we're joined by nigel travis. good to speak with you again. when it comes to dropping the doughnuts part of your name, is
3:43 pm
that linked to the fact that doughnuts are not seen perhaps as healthy breakfast snacks? nigel: the first thing i would say is that we are testing the twoname into stores -- in stores. it's a small change. i think it reflects how popular dunkin' donuts as a brand is. we won't make a decision for a long time. we are certainly not looking to drop doughnuts, as you said. whole pile of's a halloween doughnuts in front of me. we are trying to modernize our stores. dave hoffman who runs dunkin' donuts u.s. has got full franchise support. ourjor part of it is making restaurants more streamlined, making them more efficient, making them easier to operate,
3:44 pm
improving employee satisfaction and as a result of that, guest satisfaction. i have to sam really optimistic about the system in the u.s., and don't forget, -- i have to say i'm really optimistic. we can double in the next 25 years. we have the footprint to grow. that doesn't mean euro see the name donuts disappearing anytime soon. one of the big macro themes a lot of companies are talking the effect ofw is margins on a tighter labor market. what can you tell us from the perspective of your stores with what's happening in the labor market and with wages? nigel: without doubt, the number one problem for our ranch ics beyond anything else is the lack of labor. if you take this part of the country, massachusetts, maine,
3:45 pm
new hampshire, the average unemployment is 3%. we need to tackle that. we are doing a lot ourselves, streamlining the menu, work and our franchisees to create a better culture. inare trying to be creative finding employees. some of our franchisees here in massachusetts have been employing people from puerto rico. but there is a lack of labor out there, and it's a big issue. it is something that our franchisees are very concerned about. in fact, we were in washington three weeks ago and our franchisees basically tell the administration they could only find thing like 60%-70% of the employees they need, so it's a big issue that needs to be tackled. abigail: nigel, and terms of that lack of labor, to what extent is the opioid epidemic influencing the lack of labor, and what about immigration?
3:46 pm
what is the influence their? a couple of things i would say, the opioid crisis is clearly a major concern for the country. we've seen incidences of people overdosing in our stores, so that clearly concerns us. listening tosting your prior interview about the impact of people not getting back into the labor force. that was very educational for me. that's something i learned from that. so i think it has some effect, but the biggest issue is, there doesn't seem to be enough people. so on the second point, it's clear, we talk to the administration that we need some kind of security. of oure-verify in all stores and we were one of the first to use it. we need to find a way to increase the pool of labor and clearly some the things like opioid and immigration could play a part. we need a discussion to decide how to create a labor force so
3:47 pm
that we can continue to grow and our franchisees can continue to grow. i must say we had a very positive session down in washington when i took franchisees down there. scarlet: what are your thoughts when it comes to the dreamers? is immigration paying a role in reducing labor force and the availability of labor out there? any thoughts on how congress tackles the reamers the lemma -- the dreamers dilemma? nigel: if you ask our franchisees, the first thing we need is some kind of tax reform. we want to continue to stimulate middle income america. we think that's good. we would like to see a reduction in tax rates for our small business people. dunkin' donuts and baskin-robbins or about small business people. down to corporate rate 20% is very important, but clearly, the pool has to be
3:48 pm
tackled. whether it's the dreamers or more broader immigration reform, something that was talked about in a bipartisan fashion a couple of years ago i think needs to be on the agenda starting next year. forlet: thank you so much joining us this afternoon, nigel travis. abigail: as president trump declares the opioid crisis of public health emergency, one company and former ceo is being accused of helping to fuel it. shares of infosys down 18%, as the founder was arrested. julie hyman is here with the story. julie: he has been arrested today in arizona. he was basically accused of helping to fuel the opioid epidemic. he's accused of doing that by prescribe thes to
3:49 pm
drug that this company makes. it is a fentanyl based spray designed to combat cancer pain.ers' the allegations have to do essentially with the company using different levers, allegedly bribes, to convince them -- to convince it to be prescribed for more generalized pain indications. joe: it's not every day you see billionaires being arrested. it's sort of clear there's a backlash coming, more regulators very concerned about it. might expect to see fines or something like that, but it actual arrest of a 74-year-old billionaire is pretty rare. julie: this appears to be the highest ranking person. this does seem to signal the aggressiveness with which officials are going to be prosecuting these kinds of cases
3:50 pm
and going after what they say are the various parties that have helped fuel the opioid crisis here. 34%,tock is already down even before today. you can see the plunge we are seeing if you include today's action. there are investigations into other companies as well. the u.s. attorney in connecticut is conducting a criminal probe of produce marketing up oxycontin, one of the name brands associated with the opioid crisis. janssen pharmaceuticals have been sued by various cities and states. so there have been various legal actions, but as you say, joe, this is the one that is associated the most specifically with a person and a high profile person at that. again, it's interesting here that this is a company that relies on this drug alone. joe: you mentioned the stock was
3:51 pm
already doing badly. there was an $80 stock now below seven dollars. investor sentiment toward a lot of companies in this space has turned dramatically. julie: specially pharmaceuticals have been rocked by the valeant pharmaceuticals situation. there's been an enormous amount because of talk about drug pricing and whether the administration will come down on that, even though there has not been action on that yet. there has been a lot of discussion on it. as a side note, kapoor is involved in another company, acorn, which has been acquired by a german company for $4.3 billion. we had seen the shares dip a little bit today and then come back once there was that reassurance to investors. interesting divergence. julie hyman, thank you so much.
3:52 pm
more coming up, including the three charts that you cannot miss. this is bloomberg. ♪
3:53 pm
3:54 pm
scarlet: breaking news, cbs reportedly in line to buy at. were just looking at the shares, but theyres spiked have since resumed trading and have spiked on the news. they are is a pop up almost 11% on the date areacvs has been moving through the afternoon. if you pull it up, you will see that it had taken a deep dive in the afternoon on headlines at amazon is getting licenses on pharmaceuticals and that prompted cvs to fall to a session low. it was reportedly in talks to
3:55 pm
buy aetna. this possible merger, companies trying to join up and become bigger. >> the reason this is so interesting as well is, when you look at cvs and the tumble it had on the report that there were these distribution licenses, cvs got more than half its revenue last year from its pharmacy benefit management business. if amazon is getting into that business, that would be a source of concern. recall that at that and umana were supposed to -- aetna and humana were supposed to have a merger but they did not get approval. cvs not in the same business
3:56 pm
exactly, it's in the pharmacy benefit management business, so maybe we have a higher shot of getting approval. also consider that and some -- anthem last week said it was starting up pharmacy benefit management. you have these businesses that psybeen somewhat individual load, and in some cases they are coming back together -- they had d.en siloe joe: to put in perspective what a mammoth deal this would be, huge and cvs both companies. julie: i think it would be called the vertically integrated company. you so much,k julie hyman. the market closes next. the dowlosing high for
3:57 pm
jones industrial average. julie was telling us about that earlier. we have our due out any minute now from amazon, alphabet, microsoft, and intel. abigail: from new york, this is bloomberg. ♪ is this a phone?
3:58 pm
or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data.
3:59 pm
see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪
4:00 pm
abigail: u.s. stocks closing mixed with nine of the 11 major sectors higher, materials leading the way. i'm abigail doolittle. julia is off today. onpretending in light twitter, i want to welcome you to our closing bell coverage every week day. scarlet: let's begin with the market close as we await the highly anticipated close up amazon, alphabet, microsoft, and intel will be reporting a little later. a nice round number for you, joe. recordsupposed to be a closing high but i'm not sure we will get there once it settles. but it is a recovery from yesterday's decline. some important context going into this flurry of
4:01 pm
numbers is that a lot of these big tech names have been a little on the weak side lately, not dramatic, but even with these new record highs we've seen them rolling over just a touch, a little bit of anxiety in the likes of amazon and so forth. something to keep in mind in terms of -- scarlet: we just got the numbers. third quarter eps, $.52. i need to check that, i'm not sure we are comparing like with like. net sales for amazon, $43.7 billion. ,t does look like the estimate the gap estimate for amazon was for four cents and amazon is $.52 eps. revenue $43.7 billion in the estimate was for $42.1 billion. 56 billionill be
4:02 pm
dollars, the estimate was for 58.70 5 billion. fourth-quarter operating incomes outlook, and this is the profit outlook for this quarter, the midpoint does miss the consensus estimate. itn it comes to amazon, is really the profitability number that anyone focuses on? jeff bezos has done it at lunch on training investors to recognize that as long as they are investing for road and their initiatives are gaining traction, they get excused if on the quarter to quarter basis they don't hit their number. , over $1000 over 3% a share. it would not be a surprise if it bounces around a lot. spring and paul sweeney who covers amazon and out of it.
4:03 pm
he will stick with us as we await those results as well. the first look at blush numbers, it's all about net sales but also the breakdown of her amazon gets its revenue, whether amazon web services or through retail. paul: that's what investors focus on because depending on how they want to rein in expenses or not, they're epf every quarter is all over the place. revenue is where investors are focusing. the company has several big levers at its disposal. amazon web services, the cloud business which is the hot technology issue to discuss these days come and companies like amazon are leading the way. and they're getting into other businesses like whole foods and retail. we will see how they want to position that business going forward. scarlet: at-bat which owns $9.57.reporting
4:04 pm
the consensus estimate was for $8.34, so it big beat on that basis. google's other revenue, not so much hardware but some of the other businesses that don't make $3.41o the search part, billion for google other revenue segment. third quarter -- third quarter , not surprising given how much we all sit there and use our screens, whether a big screen are small screen. paul: what we've seen over the last couple of years for google and other big internet consumer places the amount of interaction , the clicks goes up, but the pricing is going down for lower-cost mobile rising but revenue.l solid scarlet: microsoft coming out
4:05 pm
early, reporting $24.5 billion revenue. microsoft reporting eps of $.84 and revenue of 24.50 $4 billion. microsoft shares moving up a touch, higher by .3%. joe: i want to go back to alphabet. third quarter revenue for intel, $16.15 billion. analysts were looking for $15.7 billion. the estimate was for $.80. when it comes to the outlook for intel, fourth-quarter adjusted epf is $.86, plus or minus five cents. it's below what analysts had been looking for, $.83. intel gives a range for the fourth quarter etf.
4:06 pm
it had seen up to $68.1 billion. 47% paid click, that's extraordinary for company this gigantic and a company that feels like it's been omnipresent in our lives for years now. rate, that'sowth pretty extraordinary. paul: it is a global phenomenon. the search part of our daily usage of the internet remains extraordinarily robust imino we spend more time on amazon and facebook and so forth. but the court search function is seeing 40%-50% increase in clicks. the price on a per click basis is now in double digits. it turns out topline growth for
4:07 pm
alphabet, which is extraordinary. abigail: in the past they put up good sales and earnings numbers and that number comes in very high. investors are worried they are spending so much for that traffic. what do you make of that before we actually see the number? paul: the traffic acquisition costs have been rising, but that is a high-class problem. by $.5 billion it looks like if i'm reading that correctly. it's a high-class problem but something that is sort of concerning to investors as well because it's only going to increase. paul: the real question is what ,s the pricing that amazon gets were starting to see some pricing improvements coming across on a lot of their products so the net result when you put in the increase in clicks and the -- it's still a , with aong net topline
4:08 pm
new ceo putting in a new cost structure is yielding a better profit at alphabet. olivia covers amazon and has been reporting on the acquisition of whole foods and how they are digesting that. olivia, it is early days for this, obviously, too early to give it a verdict, but what do we know so far? any insights based on this report? olivia: it is super early. investors are keen to understand how whole foods fits into the amazon discipline. to say.st too early for traffic did go up significantly in that first week and then leveled out. there are a lot of questions around how sustainable the interest is in the new amazon whole foods. consumers are switching their
4:09 pm
brand loyalty to whole foods. from the earnings report it's the focus on consumer electronics. that plays into amazon's grocery strategy. home consumer products, you can order your groceries. they are focusing on that today. scarlet: i'm looking at our top live blog and are consumer tech reporter notes that it has begun offering lower prices to whole foods shoppers on the deal closing earlier in the quarter. ie: you mentioned alexa, and was reading to this press release. they have a highlighted section in the release. i don't think of ever seen a company list so many random things. there's something about integrating alexa with the bmw. here's something with microsoft's cortana.
4:10 pm
these are all separate bullet points. it speaks to amazon going, were just going to throw a bunch of stuff against the wall and we suspect some of the stuff is going to work. olivia: that's how they do it, they are the everything store. their strategy was consumer electronics, they always have something up their sleeve. alexa is about ordering more groceries and getting those customer touch points. .e all eat several times a day how can amazon integrate into our homes, our kitchens, and be there at every moment when we need something. abigail: at what point could this strategy possibly fail? flags, it ceo of six seems like they're getting into so much whether it's groceries, drugs, athletic wear. at some point a business model can benefit from having
4:11 pm
expertise or specialty in something. is it possible to be the best in everything? olivia: it's a really good point. we saw this with amazon fresh that they rolled out several years ago, and it wasn't working. people were not buying their groceries through amazon online. i think it is because the quality wasn't there. if they are spreading themselves too thin, that is a problem. whole foods is synonymous with quality, organic produce, and they just bought into that trust by a acquiring whole foods. not everybody can afford to shop at whole foods, so there really going to have to lower prices if they want to take it to the next level. joe: we've got all these tech earnings, and there's many interesting sub storylines. one of them is that tech has grown so powerful and it there's all this anxiety about
4:12 pm
regulatory response in the way tech is changing our lives. investors don't seem to be concerned that any of that and just looking at the numbers. the takeaway from a pure business standpoint. we've seen how the growth in nasdaq is being gribbin -- driven by fang plus apple. even within tech, anything associated with cloud, consumer internet, that's where we are seeing the consumer and advertising dollars go. that is what is driving the market. in the back of every investors mine is the regulatory risk coming out of europe, targeting u.s. tech companies is in the back of every tech investors mind, and every once in a while it rears its ugly head. is famous for
4:13 pm
announcing a lot of stuff but not really giving any numbers. sold tensy says it is of millions of alexa enabled devices. we don't really know what that is. scarlet: let's bring in cory johnson because we also have microsoft results. it's all about the cloud here for microsoft. re: apple to get a sense of how microsoft cloud is performing relative to ibm or at-bat? they all -- or alphabet? corey: it's bigger than ibm, rack space or google. business isft really impressive. ,opline revenues for microsoft let's think of where microsoft was a few years ago when they
4:14 pm
screwed up the massive nokia acquisition. revenue over year growth, a lot of that driven by the cloud. nice margins coming out of the business as always for microsoft. legacy: what about the business? it's so easy to forget about the -- is either forget about because the cloud is so much sexier. is key.ore business microsoft has never to use that legacy ofess and the customers they have an houses of sales people around the world calling on businesses, getting them to upgrade office and moving on to the microsoft cloud . so then microsoft is in a position to sell their other cloud services to fortune 1000 companies that are used to rip -- used to buying from microsoft
4:15 pm
for a very long time. so microsoft using that core business and legacy software business as the tool and the foot in the door to sell their cloud business. they have to have the product to support it, and we see from results today that those sales , they're selling the new products quite successfully. scarlet: thank you so much, cory johnson, for the latest on microsoft. i want to thank olivia gillespie in san francisco, she covered the whole foods portion of inzon, and that deal closed september. paul sweeney is sticking with us as we discuss more of these week tech results. from new york, this is bloomberg. ♪
4:16 pm
4:17 pm
4:18 pm
scarlet: "what'd you miss?" we're back to break it all down with paul sweeney, head of north american research at bloomberg intelligence. obviouslyt microsoft, the cloud is the part of the business investors are excited about. abigail asked about the legacy business. does it put a drag on the results? it does, the pc stock was not as bad as it has been in the past. another legacy business is there legacy server products. the legacy business is growing and the cloud business is growing.
4:19 pm
anyone with common sense would say how is that possible? legacy companies are upgrading their infrastructure. scarlet: and microsoft shares are trading higher by 1% in after-hours trading. first quarter epf $.84. aws is far bigger than microsoft. microsoft is about $1.5 billion, much bigger. the growth rate is higher for microsoft. we just got a message from our analysts. it's still big in that kind of space. abigail: taking a look at scandal, the youtube
4:20 pm
have a really moved past that and is the growth of youtube in some ways playing against those issues earlier? think they addressed it .retty well the traffic we continue to seek going to online video continues to be one of the fastest-growing segments of consumer internet usages. positioned ant online mobile video. there's so much strong revenue business, there's been a lot of questions over whether these companies should be public utilities, whether they should be regulated more to it is this a question you hear a lot from investors? paul: not really. sometimes it's tied to rulings, and it out of the european union, which has been a tough
4:21 pm
watchdogs on technology companies, starting with microsoft 25 years ago and continuing through the consumer internet companies of today. it generally has not been an issue on the business or even on the stoxx. scarlet: why aren't people more worried about it? longtimen i talked to tech investors, they go back to the tobacco business. if the tobacco industry which arguably kills people, can deal with revenue overhang on the global basis, then technology can do so as well. it seems to be saying it is a significant issue, particularly social media platforms, things like that, but it's something that can be managed. joe: a pretty remarkable context, how much tobacco companies have thrived, even
4:22 pm
with so much pushback. in terms of questions out there for the company him as you say, the numbers speak for themselves. on the conference call and looking forward, what will be the big questions at this point? anurag: the big story for microsoft this year, the .stimate before was topline 8% they are investing a lot more money into the business and the linkedin acquisition takes away some profit. the third thing is, you're transferring legacy businesses that were very profitable with cloud businesses that are less profitable. microsoft has to it can decrease andpence is -- expenses grow in line with revenue in order for things to work. abigail: you mentioned the lincoln acquisition. the ceo recently said he expects
4:23 pm
it to be a real growth driver for the company. it's very interesting concept because you've taken the biggest business network and marrying it with office 365. it's an ability to look at links as well as productive billet -- productivity. scarlet: looking ahead, what kind of acquisitions do you think amazon or alphabet might make next? paul: i think it might be on the media side. amazon will spend several billion dollars on programming and amazon prime. apple, google, facebook, all talking about spending a billion dollars just to get in the front door in terms of trying to create a programming platform.
4:24 pm
that is a toe in the water in my opinion with these large tech companies. the question is if and when these companies ever want to get serious about online video entertainment as he goes more and more mobile, do they need to buy an existing big tech company or a studio? we haven't seen any moves yet, but that's in the back of a lot of people's minds. paul, did i downgrade you by accident? let's get you a quick recap of the results we have been seeing. alphabet and amazon, and microsoft all higher on the results. .15%.lower by from new york, this is bloomberg. ♪
4:25 pm
4:26 pm
4:27 pm
scarlet: war earnings to recap including expedia and mattel. eps ofpedia reporting 2.31. revenue just shy of estimates. happy line, investors not with those top and bottom line numbers. mattel plunging 25% in after-hours. they missed earnings and revenue, suspending their dividend. the toy sector is really getting hurt again, shares down in a huge way on that big miss and suspension of the dividend. and ugly quarter there.
4:28 pm
from new york, this is bloomberg. ♪ retail.
4:29 pm
under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.
4:30 pm
mark: i'm mark crumpton, it's time for first word news. president trump declared the opioid crisis a nationwide public health emergency, a step that will span access to medical services in rural areas, among other changes. the national institute of health has taken the first steps of an ambitious public-private partnership with pharmaceutical companies to develop nonaddictive painkillers and new treatments for addiction and overdose. secretary general of nato said allies in russia continued to have what he called when a mental differences
4:31 pm
regarding the ongoing conflict in ukraine. he spoke in brussels today after chairing a meeting of the nato-russia council. >> improving the security priority remains the in order to move toward full and limitation of the agreements. however, the situation remains fragile, and violations of the cease-fire continue. allianz --id nato discrepanciested over russian military exercises. russia said it mobilized fewer than 13,000 troops. some you and estimates suggest 40,000 troops -- u.n. estimates suggest 40,000 troops took part. differing opinions on whether the attack in niger could have been averted. texas senator ted cruz sees no significant measures that could
4:32 pm
have prevented the ambush, while pointed to anthal shortfall in intelligence and overhead reconnaissance support as potential factors like troops caught offguard. the government is expected to release its final batch of secret files linked to the assassination of president john f. kennedy later this afternoon. today's releases in keeping with the law passed in 1992 for full disclosure pertaining to the november 20 2, 19 63 murder. scholars of the assassination nearly unanimously agree that the president was killed by lee harvey oswald, who they say acted alone. 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. we have more results, this time from baidu. revenue for the third quarter, $3.53 billion, just of it shy of
4:33 pm
what analysts were looking for. when it comes to the bottom line , $3.89, better than what analysts were looking for. revenue for the fourth quarter point 2up to five billion, shy of what analysts were looking for. why baidu is falling in the after-hours trade. joe: that's get a roundup of the tech earnings we got at the top of the hour. amazon is doing nicely after market, up 8%. q3 netmpany reporting sales of $43.7 billion, ahead of estimates. amazon is just crushing it on everything, and this is no different. let's talk about microsoft. they are doing great on legacy and cloud business and the new
4:34 pm
stuff. 2% afterk up another hours, exceeding estimates with sales rising -- rising. , that when is up jumping above the psychological $1000 a share mark. of 8.30 fourates cents per share. continuing to expand its advertising. investors liking what they see their. finally, intel not doing a lot after hours. the stock unchanged or barely higher. they are still much more reliant pc business.
4:35 pm
sales of $16.3 billion. there you see all green after-hours, with amazon the big winner. mattel shares plunging, down about 18%. , and 84% miss of consistence -- consensus. billion down on a year-over-year basis by 13% because of the slump in sales, they have suspended their dividend and shares of mattel really taken a hit, even more so than competitor hasbro which put up and ugly quarter as well. abigail: and ugly wave of red.
4:36 pm
"what'd you miss?" let's dig into amazon's third-quarter results. .oining us is tom forte what stood out to you? tom: lost in the shuffle is profitability at amazon. ofy have to big buckets profitability. cloud computing and third-party retail. last quarter was the first time it was more than 50%. over time it could be 75%. strong profitability numbers from amazon, looking for that to improve over time. they essentially take services they need to run their own core business and sell them to outsiders. the technological
4:37 pm
infrastructure, they sell that. talk to us a little more about third-party because maybe we don't talk about that enough, given how much we focus on the cloud. the ability to compete .gainst an leverage amazon 20 comes to retailers, i'm looking for them to leverage amazon more over time. i would not be surprised if they don't hand over the keys to amazon and focus on their costcal stores, invest the savings in personnel and upgrading their store base, better technology investing in the brand. leveraging the platform of amazon, that's what they're doing with cloud computing and third-party retail. scarlet: amazon has been spending a lot of money to make
4:38 pm
sure it's prominent in listing at. will that be a drag on its bottom line at any point? this>> you have to look at clash of the titans going on between amazon and google. in may of this year, google change their search algorithm. it shows you the local retailer that has it in stock. that's a big change. i believe it inspired them to do more product listing ads. against amazont specifically, or all internet retailers? tom: i believe it was specifically on amazon. foods?: what about whole what do you expect of whole foods, and also talk that they perceive the ability to sell drugs in at least 12 states.
4:39 pm
are they just simply going to take over the world? often inter-aes lot of categories and not perform as well as they would like, and then at category -- exit the category. foods, i view this as iterative. they will continue to drive value. they're looking for new ways to leverage physical stores at whole foods. joe: it does seem like it has become a guessing game. what will be the next acquisition? will they get into pharmacy, car dealerships, whatever it is? what represents a juiciest opportunity that they are not already in. tom: gas stations.
4:40 pm
additional points of distribution. it's a commercial address, not residential, cheaper for shipping. is a theoretical acquisition they could make to get in there? tom: yes, there are opportunities. this is more suitable to an acquisition. a bloomberg news story that jeff bezos has added $6.6 on theseo his wealth amazon deals. is there a second person in command? the company is built on force of this one man. tom: i think your assessment is proper.
4:41 pm
huge ceosof other like steve jobs, there definitely -- the business slowed after they left. maybe he picked out a succession plan that he hasn't told us about yet. coming up, we talk to the alphabet ceo. a quick check on nasdaq futures, look at that top with all these earnings results. recapping thejust top four, all green. this is bloomberg. ♪
4:42 pm
4:43 pm
scarlet: emily chang just got off the phone with the alphabet
4:44 pm
ceo. let's head to san francisco where emily is standing by with the latest. revenue numbers up 24% year over year, but you always have to consider the money that has gone to partners like apple to direct traffic to its website. are called traffic acquisition costs and google has been paying more and more to companies like apple to keep people front and center on things like the iphone. up 32%, which means they now account for 23% of google's ad revenue. i just got off the phone with the alphabet ceo and here's what she had to say. we have a healthy mobile search business and its growing substantially. act -- trafficer acquisition costs. we have a strong position in a growing area. the message that mobile is
4:45 pm
growing and the cost they will be spending in this arena are the piewing as long as is growing overall. the hope is that it doesn't have to big an impact on the bottom line. mobile: the shift of means certain things grow faster but the cost goes up as well. joe: a few years ago the shift to mobile was seen as a mortal threat to amazon. no one's going to click on these tiny mobile ads. even with the traffic acquisition costs, it's obviously gone a lot better than many people figured even recently. scarlet: talk about the other best part of alphabets business. this is something that intrigues a lot of people because it's not search, not where alphabet makes its bread and butter, but it is an exciting part of the company. like self driving cars, and scum of the thermostat.
4:46 pm
the alphabet ceo was brought in in part to focus on how much alphabets should be spending on these other things. revenue is up 39%, and is actually down. is down to $77 million. didt said that due to and -- decrease in spending on google fiber, they are pulling back on the financial spending and continuing to invest in developing the technology. she did talk about how they determine where to spend money and she said were looking to create valuable businesses over the longer term. we do a multiyear financial model and establish milestones. it's a multiyear look at creating what we believe are multiyear opportunities. she singled out the self driving car division as an exciting
4:47 pm
opportunity and seth are happy with the progress they're making .heir when it comes to safety she singled out nest, which had some product announcements this year including home security. abigail: even looking at the numbers now, huge numbers, revenue on a annual basis of 22%, earnings up 23%. take a look at page clicks on the last quarter, unbelievably impressive for such big numbers. talk a little bit about that. emily: a lot of things going in the right direction, but some things are not happening in google's favor right now. earlier they got a record fine from the e.u. about how they handled their shopping search results. togle has proposed a remedy the e.u. whereby they will allow rivals to compete for these prime results listings on the google page. they are working to see if that
4:48 pm
renminbi will be helpful and if they cannot come to an agreement, they're facing a 5% fine, 5% of their daily global revenue, which would be huge. said she felt good about the renminbi but it's too early to tell if they will come to an agreement. acquisition, white is google making some of these acquisitions? they have a high bar. however, they are still looking at many different companies out there and m&a will continue to be part of their strategy. we ask about the growing political pressure. google's top lawyers will be on capitol hill testifying on issues around fake news, russian interference in the presidential election. she did say listen to the earnings call, which is starting
4:49 pm
momentarily. we should expect them to address these issues. google announced a partnership with an organization to help combat fake news and work with some professional fact checking. thank you, emily chang, for joining us. coming up, more on reports that cvs is said to be in talks to buy aetna. we will dive into what that could mean for the industry. that next. this is bloomberg. ♪
4:50 pm
4:51 pm
scarlet: "what'd you miss?" higher after the wall
4:52 pm
street journal that cvs is in talks to buy aetna. jason, this sounds like it would be a defensive purchase if it is isually made, because cvs trying to deal with competitors and you have walgreens trying to buy right eight, that didn't go through. a lot of changes on the health-care landscape. talk us through the sheep -- strategic value of such a deal. >> they have some of the highest rated medicare plans in the industry. they have largely a the did the obamacare plans for 2018. profitability is improving in the medical loss ratio which measures how much they spend on health care cost, they've managed that better than all their peers in the past three years. their business is very strong. it's a strong business forcvs to get in if they want to get in
4:53 pm
the health insurance business. joe: if the merger were to happen, with their be any equivalent companies that would order the same -- over the same vertical integration? aetna haste, because its government exposure a little different than most of its peers . probably a similar one would be anthem, but it has a little larger commercial exposure. so it's not the same corollary other than aetna. aetna is beinghy mentioned. they were mentioned in 2015 as a target by united health, and that did not come to fruition because aetna tried to turn around and purchase humana. abigail: to what extent do you think the political landscape has influenced this potential deal? jason: i think it has had some
4:54 pm
impact, at least on the benefit andger side, with cvs walgreens, there's been more in the spotlight on drugs and drug pricing. you're seeing a little bit of a slowdown on that front. ,here might be pressure there but there is also a lot of cash on the sidelines. companies are trying to figure out what to do with that. that might be part of what is driving this as well. terms of regulatory approval, how likely is a deal like this to be approved? aetna-humana deal ended up falling apart as well. jason: this is a little different, is not a horizontal integration. the one issue that could complicate it is just that anthe m eventually will offer their own drug plans.
4:55 pm
to industry itself is moving this more integrated with health plans and drug plans. so there might be more scrutiny sells drug plans to other insurers. it'll be a little less risk than deal.tna-humana that has been speculation in,of the pbm's could come that a health insurer could go out and purchase one of them. i don't think anything is off the table at the moment. we still don't have an official press release that at net is being acquired by cvs. stay tuned. scarlet: thank you so much, jason. joe: coming up, what you need to
4:56 pm
know to gear up for tomorrow's trading day. this is bloomberg. ♪
4:57 pm
scarlett: u.s. stocks hold it near record highs, but it was a
4:58 pm
mixed day. that did drag down the nasdaq perhaps. mobile and chevron report third-quarter reports tomorrow. and we are looking at the gdp report tomorrow at 8:30 a.m. eastern. abigail: do not miss this -- u.s. consumer sentiment comes out tomorrow. scarlet: that does it for "what you miss." abigail: "bloomberg technology" is next. ♪
4:59 pm
>> you are watching "bloomberg ."chnology let's start with a check of your first word news. president trump today to clear the opioid crisis and emergency. pres. trump: i will be looking
5:00 pm
at the federal government bringing lawsuits against access, what they have and what they are doing against our people has been unheard of. we will be doing major lawsuits against people and companies that are hurting our people. the white house estimates house passage of a $4 trillion budget was necessary for a tax overhaul and set the stage to give americans economic relief. the house also overwhelmingly approved bipartisan legislation today to approve new sanctions on iran. it looks to penalize tehran but keeps the nuclear accord largely intact. having this hour, the government in secretlink up

13 Views

info Stream Only

Uploaded by TV Archive on