tv Whatd You Miss Bloomberg January 31, 2019 4:00pm-5:00pm EST
even with apple guiding down, tech hardware still moving upwards. noah, thank you so much. we are awaiting those amazon results as we close the book on the last trading day of january. look at. the nasdaq up 1.3%. the dow fishing in the green despite the dragnet was dowdupont. caroline: this is the best month for the s&p 500 in more than three years. joe: wow. caroline: the optimism coming from the fed. some of these numbers better than expected. when looking at boeing, facebook , still concerns around china. but overall, issues when it comes to corporate numbers. joe: just remember, december was so intense, so dramatic. there were so many white knuckle days.
how long ago does it seem like steve mnuchin letter that came out of nowhere about blank liquidity, people were freaking out. here we are to some extent seeing that's not back after that extreme of pessimism. scarlet: seems like we made a complete 180 here. maybe i spoke to early. -- too early. caroline: amazon coming out with fourth-quarter earnings. 20% growth in terms of sales that forecast 56 to 60 billion. 61 billion for the first quarter. they are but he guided us to the downside for a certain extent. forn terms of the breakdown fourth quarter, amazon sales had
met sales of $7.43 billion. analysts were looking for 842% increase. 42% plus growth in amazon services. overall, $72.4 billion, higher than the estimates. seeing to 72 billion dollar general expectation seeing it lowest revenue growth since 2015. >> we are joined by the ceo of activate, a strategy firm and cohost of bloomberg surveillance. when you hear about amazon's results, what is it a read on? is it cloud spending or the consumer? >> amazon has over 50% of the u.s. cloud market. that is likely to continue to grow. if you look at that compared to microsoft growth, which was over distort their cloud
revenue. we can expect it to continue to grow. we are heading large numbers that on absolute dollars, the amount of money amazon is adding each quarter is astounding. we are coming off of a race. they may disappoint but this is extraordinary performance. number, 7.4hat aws 3 billion. seen spotty nests in other companies when they talk about data centers and the cloud seems to be doing well and as some seem to be struggling. slowdowna secular where reaching the limit of growth for the area -- or is there a lot of runway? >> there is a lot of runway in the cloud. intel talking about spending coming out of customers on the cheap side, that raised the
concern of have we reached peak cloud? microsoft numbers were good. these cloud numbers came slightly above what we were looking for. i do not expect that to change. the law of large numbers is catching up to us but it is still one of the fastest-growing areas of tech. >> it is interesting how many things can be baked into this, whole foods was wrapped into it and amazon prime. you have great expertise when it comes to content. how much does amazon need to charge when it comes to managing winning people over with content to get on amazon prime? shows, already have hit the marvelous mrs. mizell and other shows that are winning critical acclaim, as well as other viewers. one of the things from a media perspective is they are advertising -- their advertising
business hit $4.5 billion in revenue. if you look at a number of these companies, they are finding their way into business that were not part of their core. business ares growing faster than the rest of the business. >> we see they are gaining a bit. it rebounded 30% since the low last year. we are looking at a major snapback for a giant company and relief. >> when you look at faang stocks, including apple, they led the market lower in the december route, down 40%, some of these high-quality names. if you talk to things or tech investors, they feel the most comfortable with amazon because
it is growth of e-commerce, not .he consumer or retail sales there are a lot of areas of growth. the company can invest whatever they need to invest. >> everything company faces regulatory restrictions. where does amazon's compared to facebook's? risk is less of a legislative or policy issue. where the a point business is transitioning from a retail business where they take inventory risk to a business where they have a platform at for third-party sellers. a lot of people are worried about the quality of the third-party sellers, whether they are counterfeit goods or maintaining quality control. that is different than the
issues facing google and facebook. as well.cal risk, jeff bezos comes under fire by president trump because he owns the washington post. doesn't that figure into how you assess amazon's risks? >> a little bit. there is issued their. there is issue with the attacks -- taxes. that is something that has been hanging over the company. they have been able to negotiate that. they are not dealing with consumer privacy data and security issues as much a social networks are and advertisers are. as amazon becomes bigger in the advertising business, they will face issues other advertising platforms are facing. -- they waited for profit, it was about revenue. now it is getting guidance
operating on $2.3 billion. the estimate was $3 billion. we are seeing them giving back to the market in terms of profitability. --y can break in revenue break in revenue. comments from jeff bezos where he is talking about alexa, alexa tens ofe to billions more times in 2018. they give these numbers you have no context. you do not know what the baseline is. it seems impressive. what is more impressive is to see what they are doing with the voice with alexa and vision with cameras they are putting in. aithey begin to embed more and smart assistance, it will continue to drive not just the growth of devices but the commerce business. >> is a less to dash is alexa
something that can go across businesses or will it be house on its own as its own unit? ofthis is a big driver e-commerce growth, alexa, i want to buy xyz. everything you see coming out of , it is all to drive e-commerce traffic. is, an what amazon prime incentive to drive traffic to the e-commerce platform. amazon prime customers spend more than the average customer. it is all about that. >> i interested in the dominance of aws holding steady 46% growth overall. how much will this damage the overall chip system? the protecting about intel and the challenges ahead. amazon will start making its own chips. how much will this disrupt
retail businesses but the entire supply chain when it comes to data and the chip? >> there is a difference between aws. they are able to take its capacity and a serve other companies versus trying to get into businesses to compete against intel and qualcomm. those are businesses far apart from their core confidence. they may create chips for their own devices but competing against the largest chip making companies, i would be worried about a business pitting against the upper limits of growth and their ability to innovate. >> perhaps not yet. a lot ofave hired people to teach alexa more skills. >> keeping a close eye on alexa. jeff bezos devotes a lot of bullet points to alexa, one after the other. cofounderlff, ceo and of activate and paul of
>> we have had a very strong relationship, as my relationship is but president xi. i will start by reading the letter that president xi sent to me. it puts us off to a good point. we will also repeat a couple of remarks the vice premier stated speaken we are going to for a couple of seconds and get back to business and you can have fun and write your stories. thank you very much for being here. we appreciate it. if you could read the letter from president xi jinping.
>> mr. president, i send you my best wishes. right now, china and u.s. relations are at a critical stage. inhave a successful leader that consumer, and which we agreed to work together to build a bilateral relationship based on coronation -- coordination. that is followed by a good conversation we had through a phone call and a letter of on the 40thons anniversary of diplomatic relations. our economic team has engaged in intensive discussion and made progress. continue to act
in mutual respect. halfway, we other note we can reach an agreement that works in the interest of both parties. such an agreement sends a proper signal to the international community. it will contribute to steady growth of the world's economy. call, you saidne you want china to buy more agricultural product. i have made arrangements. other we have known each for a long time. i cherish the good working relations and personal friendship. i enjoy our meetings and phone calls in which we can talk about
anything. to work together and a things meaningful for the people of our nations and of the world at large. you can always approach me. i hope we will keep close contact in various ways. as the chinese lunar new year is aarer, my wife and i wish wonderful year to you and your family. may you enjoy a happy and prosperous new year. pres. trump: that is such a beautiful letter and we appreciate it. i will last for you to say a few words. hopes to continue. you the path of two years,
have made to mend his accomplishments on a the domestic and diplomatic side. thanks to your policies of tax .eductions for the u.s. economy the u.s. economy has enjoyed high growth and low unemployment. positionause of your that you have facilitated a major breakthrough for the relationship between the west and bg rk. under the guidance of you and president she -- president xi jinping, it is helpful china and the u.s. have the possibility of having a deal on trade. my trip to the u.s. is to follow on appointments between relationselerate the
between china and the u.s. in andhopes of striking a deal in the conscientiously past couple of days and discussions are going well. we have achieved important things. pres. trump: thank you very much. please say a few words as to where we are, how we are doing, and what we are discussing. thank you, mr. president. [indiscernible] after many months of negotiations, we had intense days of discussions.
we need progress. ifhave a lot of work to do we will have an agreement. we have made substantial progress. we focused on structural issues attacking u.s. intellectual properties and is stopping intellectual technology transfer and cultural services issues in enforcement. both sides agree this agreement is worth nothing without -- we are focusing. we have a lot more issues to cover. there are structural issues. we talked about enforcement, enforcement. pres. trump: you will be going in early february to china? >> we are more or less in continuous negotiations. they will be a brief pause
during chinese new year. contactle will be in going back-and-forth with papers and discussion. we will be going over there shortly and see where we are. at this point, it is impossible for me to say. we are in a place where if things work out, we can have success. pres. trump: thank you. we look forward to the results of your trip. you are discussing it anyway, whether you are in china or here. othere the telephone and means of talking. i know you are spending a lot of time. premier is a friend of mine. he has become -- he is truly one of the most respected man and asia, one of the most respected men in all of china. one of the most respected men anywhere in the world. it is a great honor to have him here with us. you would like to say a few
words. thank you, mr. president. with the report. [indiscernible] secondly about structure and thirdly about enforcement of the moment nation. at the same time, we also discussed something from china. we need to do something -- [indiscernible] i thank you so much. [indiscernible] i hope we can make a deal. pres. trump: we look forward to that.
a back-and-forth. ultimately, i know i will be meeting with president xi jinping. it seems to be coming together. said soreciate that you much about our farmers and eu will be doing purchases quickly with farmers. that is wonderful. >> thank you. 5 million tons of soybeans. wow. that is going to make our farmers very happy. that is a lot of soybeans. that is really nice. i know they said some other things. goodelationship is very between china and the u.s.. the personal relationships are very good between the vice premier and myself and president xi jinping and our representatives.
you read a lot of things. sometimes you hear good, sometimes you do not hear good. i think the relationship we have with china has never been so advanced. i do not think it has been better. it has never been so advanced. a deal has never been so advanced. we never had a trade deal. were going to have a great trade deal. we never really had a trade deal with china and now we will have a great trade deal with china if it all works out and we look forward to it. it will be great for both countries. not just us, not just them. i know you have already done a lot of opening up china to financial services, industry, it has been happening rapidly. hopefully, we can get that done for our farmers and manufacturers and likewise, the u.s.. it is an honor to be with you
and i will see you today and a lot over the next month. thank you very much. it is a great honor. thank you. >> when do you want to meet with president xi jinping? pres. trump: we have not set a meeting at. where everybody is and we will discuss final issues. happena feeling it will very quickly. both countries would like a positive result. progresse made enough on technology? pres. trump: technology transfer, i.t.. we have made some of his progress. it does not mean you will have a deal but there is a tremendous relationship and we have made progress. could you talk about the disclosure you had -- pres. trump: they said they were misquoted and it was taken out of context. i suggest you call them.
they said it was fake news. >> we ran exactly what they said in congress. pres. trump: it did not surprise me at all. we're here to talk about china. >> the fact that you are bringing up the border -- does that undermine or undercut -- pres. trump: we need a wall. if we do not have a wall we would never have security. >> but they brought it up in front of -- pres. trump: next. please. >> [indiscernible] pres. trump: it is nice you said soybeans. that is a tremendous purchase. our farmers will be very happy. when does the soybean thing come? [indiscernible] pres. trump: it already started. they started on a smaller scale and today they are starting big. i very much appreciate that. on behalf of the agricultural
industry and on behalf of our farmers, thank you, we appreciate it. it is a very big order. >> we like u.s. farmers. pres. trump: well, we have good product. you can use it. i really appreciate it. that was fantastic. before we made a deal. that is a fantastic sign. we have not discussed that yet. it will be. >> how will it be? pres. trump: i'm sure at some point. it is a very small event in the overall deal. >> [indiscernible] pres. trump: it is possible. we will see how it is. we have not discussed the yet. so wet to have it down
have certain points we can discuss. are not at that stage yet. all of these representatives are coming to a conclusion, except for certain important points. we want to make it comprehensive, make a deal we can look at and be proud of. we have to renegotiate. whether it is intellectual property or any of the other and havee want to try everything included. we want it comprehensive. yvonne: -- >> [indiscernible] pres. trump: we have discussed many of those today. probably, more than every other thing, every point you discuss the newspapers and on television , those are the points we are discussing. i have never heard any point discussed by the folks that represent you well.
every single one of those have been discussed in our transactions. >> you said you wanted to postpone -- what do you mean? extend the deadline? pres. trump: we have not talked about extending the deadline. it is march 1. i do not think we have to extended. are going to have -- this is a complex and large -- this is the largest transaction ever made. this on paper at some point if we agree. there are points we do not agree to yet but we will. president xi jinping and myself meet in every point will be agreed to. one of the things we discussed was fentanyl. this is not a trade deal, but it was something president she was good when he said they would criminalize fentanyl because it
a lot of great american people. if they did what they are going to do, it would halt, i think it would stop fentanyl from coming into the country. that is a separate thing from the trade deal. >> how do you envision -- pres. trump: we are going to have strong enforcement both ways. they want enforcement, too. we are going to have it both ways. this is a serious deal. this could be done very quickly but it would not be copperheads of. -- apprehensive. as a sign of good faith for china to buy that much of our soybeans and other products that they committed to us prior to the signing of the deal is something that makes us proud for dealing with them. the farmers have already been
notified of this by me and my and sonnytives perdue, secretary of agriculture -- that was music to your ears. that is a big number. will you let the farmers know right away? >> [indiscernible] [laughter] pres. trump: i know it is more than soybeans, the other things we discussed. if you would let everyone know. were you surprised to your that? >> i was pleased to hear that. pres. trump: that is going to keep the farmers busy. that is a big order. let's keep going. let's start our discussions. thank you very much. thank you very much, everybody. inc. you. -- thank you. >> u.s. president with the vice
premier of china. it seems as though president xi jinping is saying he values and cherishes the friendship and working relationship he has with president trump. president trump says the 90 day. is a hard deadline. jim and his progress has been made. words getting positive saying they talked about important things, ip, structural issue, technology transfer and enforcement. it is interesting that they parse the language. we heard from mike heiser using the phrase substantial progress and trump under the table about soybeans. from a financial perspective, that may not be big, but symbolically, it is a lot. >> that is good mood music. not many details on the hard
stuff. an attempt to show positive progress and good spirits. lack of good spirits, we have had a fallout of apple and facebook. now it is extending to google. apple is restricting google's ability to test and develop ios apps. we have this happening with facebook. reporton the heels of a saying that facebook was collecting data and apple rebuilt testing tools. that was revoked for facebook. it seems they are revoked for google, as well, we are keeping an eye on shares. returning to the key earnings. amazon looks good in the fourth quarter. first quarter forecasts for profitability was a strong. revenue was shy off by two percentage points.
, what do you make of amazon results/ -- results? are solid. there is strength in the e-commerce business. web services are growing at exceptional rates. newer businesses are beginning to take off. pulling it together, you have attractive growth, profitability, cash flow generation. in amay be disappointed guidance, this is a huge company with inherent lumpiness to it and seasonality. overall for longer term, we like it. >> is amazon really a balance company at this point? we think of it as e-commerce in the sense of you and me buying something. >> there is more balance. if we think about amazon and a and otherhnology
companies beyond the space, environments are changing quickly due to technological change. while a i think it is more balance, the company must continue to innovate to experiment, to fail at times. not everything they do will work. nurture theinue to culture of innovation and risk-taking, what we expect to see is a more balance company with more than one growth driver underneath. >> amazon is down a little but rebounded nicely from the lows. today in the market for facebook after their earnings, apple giving people relief as the baby bounded. -- as a baby bounded. was it a matter of going to extreme on the downside last year? where does tech overall stand? >> it has good secular growth prospects but there is no question there are cyclical issues they face.
seen if youwe have think apple is an example, they are executing in a new are areas like services, wearables. the iphone has seen softness. china is a headwind for them. if we look at what they are doing, there are other avenues to create value. privacyes around data and misinformation and doing a better job laundering or policing the platform, there is a lot of work to be done. from our field work when we look at what advertisers are doing and user metrics, the core platform is healthy and we have a newer drivers, instagram, whatsapp, and messenger. cyclical headwinds it will continue to be a factor for all of these companies if they can innovate, they should grow over the medium-term. >> we do not have to worry about saturation with a company like amazon. i am looking at the numbers and 26%,w the growth flow to
half the rate we had in the previous quarter. does amazon get to a situation where it is so big they cannot add anything new as far as people to the platform? >> in the u.s., that is true in that we are closer to majority, relative to juggle phase overseas. example asng a good they make the membership more oruable by adding features programming, tv, other things -- individuals are getting more value from amazon been in the past. they are going into new areas to spend. same consumerthe and family, amazon is offering them value in areas had not in the past. if we look at health care, amazon tries to extend. that we think have
the potential to disrupt and create value for their customers and ultimately their shareholders. >> we thank you. expertise from daniel flax. we thank you for joining us. i will be talking more amazon coming up on bloomberg technology at 5:00 p.m. new york time. first, first world news. >> house democrats are offering further details of their border security plan. they unveiled a measure that does not provide money for a u.s.-mexico while and denied his request for additional border agents. the plan would significantly boost spending for scanners at humanitariany and aid for apprehended migrants and a new aircraft to police the border. the president warned democrats they are wasting their time if they do not come up with funding for a wall. ise president michael pence
urging congress to provide money for the wall. the deal away of he told employees men and women of the dea know firsthand the reality and challenges we face a long our southern border and in the hemisphere. transnational organizations in a mexico and central america represent one of the greatest national security and public health threats in america. every day our southern border , gives theseure criminals an opportunity to peddle poison and spread of violence to communities large and small. reported land ports of entry are the primary reasons -- means for getting drones into the country. aree european unveiled proposal to help companies trade with iran. the plan is intended to salvage a fragile nuclear accord with the islamic republic in defiance of president trump sanctions.
>> the european union is truly iran fore imitation of the reasons we see it is working. we are seeing reports that iran is fully compliant and committed. these are key elements of our security. >> the system was set up by france, germany, and britain. to ben minister is sought late washington's possible fears saying the system will function under the highest international standards with regards of anti-money laundering and combating financing of terrorism and u.n. sanctions compliance. europe's latest migrant standoff ended today. kepta seven migrants were for 42 weeks well italy pressure countries to take them, finally disembarking from the rescue ship in sicily.
a ship operated by a german a into a port.them the migrants were rescued on january 19 and taken ashore to be identified and process. italian premier announced a breakthrough in the standoff this week saying six countries had agreed to take the migrants so italy did not have to shoulder the burden alone. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 analysts and analyst in other -- in over 120 countries. this is bloomberg. xe x markets is a per euro start up which has become a major player in currency and the european starts. the company is turning focus to a u.s. market. eric swanson is the ceo of ecstasy ex market in the americas. he joins us now.
welcome. i am looking at your company. growth is phenomenal. you are one of the biggest currency traders in the world making headway into equities and assets. a part of this has to do with deregulation we saw where we .roke up monopolies i have seen xtx advocating for a rollback of regulations. what is that goal? >> let me tell you about who we are. xtx markets is an electronic market maker based in the london, new york, with offices in singapore. we use a quantitative and machine learning strategy in order to provide liquidity to the marketplace. as we look at our mission in the marketplace, we view it as one to make markets as fair and
transparent as possible, as well as to produce various -- reduce barriers to entry. we see regulatory regimes that were well intended with the effect of increasing competition in the marketplace. they also had unintended consequences. the u.s. equity market is a prime example. >> what is wrong about the u.s. equity markets? tell us about speed and how that is problematic? >> we are a technology enabled market-making firm. todeploy technology in order create our field value pricing that we want to provide on exchanges for a counterparties. u.s. equity is, it strikes us that the major regulatory has had the result of enhancing competition and unintended consequences of
overly fragmenting the liquidity of the marketplace. speed has become a driver of success as a market maker. there is nothing wrong with speed. through the history of our capital market, technological enhancements that have enabled speed have been predominantly driving efficiency into the marketplace. today, we are at an inflection point where the increase in costs and gaining incremental thousands or millions of a second edge over another trading participant is so high that it is detrimental to investors. them being passed to through market impact. because of that, we feel strongly that this is a regulation that should be looked at closely.
certain aspects of it should be rollback. >> is the potential rollback or a change to a regulation an important aspect of what it would take for due to thrive in the u.s. equities business? >> it is not critical to our success. it is important to us as part of our mission statement. we are always advocating for policies that enhance competition between market makers and increase transparency and fairness. we have a plan. we are executing it in the u.s.. regulatory change is not key to our success. we think the market would be better off overall. >> tell us a little bit more about your plan of attack. we had volatile markets in december. how did you fair and how do you ramp-up? company that was
built from the ground up during a time of a relatively historic low volumes and volatility. profitable and provide liquidity to the marketplace. we are able to withstand those times. likewe had events december, we disproportionally benefit from volatility in the marketplace. xtxric and of as -- of markets. thank you. eddie lambert finds himself in an unfamiliar place in the middle of a presidential campaign. how his takeover of the seniors is a 2020 issue. next. ♪
2020 campaign issue. elizabeth warren slammed him in a letter citing his inherent conflicts of interest in his takeover of sears. she addressed lampert that it appears you have enriched yourself on driving the company into bankruptcy. this is familiar ground for the massachusetts senator who has centered her presidential run on making the economy work for the middle class. capitalism without rules is theft. encouraging companies to build business models on cheating is not capitalism or competition in the marketplace. that is not producing consumer surplus. i believe in capitalism with serious rules. >> for more, bringing in a
reporter from capitol hill. i am thinking about president trump calling out ceos and companies. is this going to be a new thing in politics where candidates and politicians feel more company -- feel more comfortable about calling up business practices they do not like directly? >> for some of them, certainly. it is comfortable terrain for senator warren. she has been writing books about shanking middle-class and at the rise of income inequality -- shanking middle-class. againstbeen a crusader wall street, calling out ceos that she says are taking advantage of the middle class. this will be the centerpiece of her campaign. there is a bipartisan sense that but -- that presidents trump understands there is little youathy for corporate ceos are doing well in the economy where ordinary americans are seeing wages not rising because
of health care costs and college tuition. elizabeth warren has put her finger on that and president trump did, as well. he talked about hedge fund managers being paper pushers. he said he would tax himself. he did not do that. on a political level, he gets it. >> on a practical level, how do we get to a point where some of the ideas and criticisms we are hearing from people like warren and a casio cortez -- when did that translate into legislation and is their appetite in congress to tackle this on a practical level? >> not at the moment. not will the senate is republican led, not well these advisors in the trump house have veto. like-minded democrats are trying sethift the conversation to the ground for when democrats return the power to do bold things in the service of
mitigating income inequality and expanding a safety net. this is about shifting that debate to a place where if democrats cannot get everything they want, they will be able to get a lot of it. >> yesterday we talked about .lizabeth warren's wealth tax alexandria ocasio-cortez has talked about aggressive income tax. bernie sanders came out with an aggressive estate tax. changing thehis window versus a brand building for each of these individual politicians to come out with these taxation plans to get them -- or different -- differentiate them the most? believe in these policies. war and believes in this. senator sanders believes in massive it expansion of the
estate tax. democrats are not in a position to get this done. with abledarting opening bid knowing they will not get everything they want. you stretch the window to a place where in years down the road, moderate democrats from red or purple states feel comfortable saying i do not want the tax to go that high. i know that is how many democrats are thinking. it is not that they do not believe in these policies but there is more to it, something settled going on in the way they want to shift political discourse. >> thank you. that is bloomberg national inter--- national reporter. and china trade talks are ramping up as president trump prepares for an inevitable meeting with president using paying. we are breaking it had -- breaking it down ahead. this is bloomberg.
>> the latest round of high-level trade talks comminuted with president trump meeting with president xi jinping's right-hand man. this comes after president trump signals an inevitable meeting with xi and himself. here is a shery ahn. what did you make of that and what is your take away? no real details, but positive. >> president trump was talking about progress but sounded cautious saying progress has been made at that does not guarantee a deal. talksbassador leaving the talked about some progress. we could see some sort of progress in negotiations. have not heard many details on structural reforms.
what do we know so far about this upcoming meeting which seems like it will take place in china? >> president trump said they have not set a date. we have heard from the wall street journal that china has invited president trump to meet. my sources told me something similar saying the north korea size would take place the last week of february and the china had invited president trump they are. we have not seen any confirmation about the date and place. president trump earlier talked about announcing the details next week. kim: a march 1 deadline is not far away. >> 90 days pass quickly. >> february is a short month. it will be right around the corner. is there a prospect of another delay? does it feel like this will be in? >> president trump earlier today
had a big deal with china or postpone. when he says postpone, does it onariffs being -- raised?fs being it sounds like it could be a pause. we doof analysts told me not expect a grand deal by march 1 that could signal a pause and continue negotiations. >> shery ahn, thank you. for more, do not miss daybreak asia at 6:00. do not miss this. the january jobs report comes out at 8:30 tomorrow. >> exxon mobil and chevron reporting fourth-quarter earnings. that is all for "what'd you miss." bloomberg technology is next. >> this is bloomberg.