Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Good morning, I'm Nathan
Speaker 1: Hager and I'm Karen Moscow. Here are the stories we're
Speaker 1: following today.
Speaker 2: Let's begin with Alphabet. Those shares are hired by more
Speaker 2: than eleven percent. Google's parent company reported first quarter revenue
Speaker 2: that exceeded analyst expectations thanks to gains in its cloud
Speaker 2: computing unit. Alphabet's chief financial officer Ruth parazzas AI services
Speaker 2: are increasingly fueling growth.
Speaker 3: We are very pleased with our financial results for the
Speaker 3: first quarter, driven in particular by strength and search and cloud,
Speaker 3: as well as the ongoing efforts to durably re engineer
Speaker 3: our cost base.
Speaker 2: And alphabet chief financial officer Ruth Parat says the company
Speaker 2: will pay a dividend of twenty cents a share, it's
Speaker 2: its first ever, and will repurchase an additional seventy billion
Speaker 2: dollars in stock.
Speaker 1: Well Nathan shares a Microsoft, You're out more than three
Speaker 1: and a half percent. Quarterly sales and profit climb more
Speaker 1: than projected, lifted by corporate demand for the software maker's
Speaker 1: cloud and artificial intelligence offerings. Bloomberg Intelligence Senior tech analyst
Speaker 1: underrag Rana says it was a good quarter for azure
Speaker 1: It's cloud computing business.
Speaker 4: The AGEL gross of thirty one percent. I mean that's
Speaker 4: a big jump. The expectations were twenty eight percent, and
Speaker 4: frankly speaking, going into the quarter, we thought anything above
Speaker 4: twenty eight would be a welcome I mean, this is
Speaker 4: a very big number, frankly given the current macro conditions.
Speaker 1: Aside from cloud computing, Bloomberg Intelligence is underrag Rana says
Speaker 1: Microsoft's desktop software business benefited from stabilizing demand for personal computers.
Speaker 2: Well, Karen, the biggest tech winner this morning maybe Snap.
Speaker 2: Those shares are surging more than twenty three percent. The
Speaker 2: social media company reported first quarter results of pet estimates
Speaker 2: and gave an outlook that's stronger than forecast.
Speaker 1: Well, Nathan. One company that's not participating in this bounce
Speaker 1: back tech rally is Intel. Shares are down seven percent.
Speaker 1: The biggest maker of personal computer processors gave a lackluster
Speaker 1: forecast for the current period. Analysts say that's an indication
Speaker 1: Intel is still struggling to return to the top tier
Speaker 1: of the chip industry.
Speaker 2: Karen, want to get you up to date now on
Speaker 2: that proposed takeover in the mining industry. Anglo American has
Speaker 2: rejected a thirty nine billion dollar takeover proposal from BHP Group,
Speaker 2: saying it significantly undervalues the company. Bloomberg's Martin Richie says
Speaker 2: a rejection is not uncommon in deals of this nature.
Speaker 4: This is no unusual in takeover deals.
Speaker 2: Many uneless SARI have said that they think the premium
Speaker 2: offered by BHP is probably not sufficient for a transaction
Speaker 2: of this complexity, and Bloomberg's Martin Richie says BHP is
Speaker 2: now going to have to improve its offtware if it
Speaker 2: wants to start talks.
Speaker 1: Well, Nathan, we get another key reading on inflation today
Speaker 1: with the Fed's preferred inflation gauge, the PCEE deflator. It
Speaker 1: comes a day after a report that showed US economic
Speaker 1: growth slid to an almost two year low while inflation jumped,
Speaker 1: and we get a preview with Bloomberg's and Michael McKee.
Speaker 5: Well, that was a surprise. Pce inflation on a quarterly
Speaker 5: basis came in a lot hotter than anticipated yesterday. Today's
Speaker 5: report on March inflation will answer the question posed, was
Speaker 5: that because of January and February being revised higher, or
Speaker 5: is the March number going to be a lot stronger
Speaker 5: than forecast. If it were, that would really rock markets.
Speaker 5: Investors would see evidence inflation is not just sticky but
Speaker 5: actually rising again as reason for the Fed to give
Speaker 5: up any plans to cut interest rates this year. Eyes
Speaker 5: will also be on the report's consumer spending data. Slowing
Speaker 5: growth with rising inflation is the last thing Wall Street
Speaker 5: wants to see. Michael McKee, Bloomberg Radio.
Speaker 2: All right, Mike, thanks, Now, let's turn to politics and
Speaker 2: reports that former President Donald Trump's advisors are taking aim
Speaker 2: at the FED. According to the Wall Street Journal, they
Speaker 2: have drawn up roughly ten pages outlining a policy vision
Speaker 2: for the central Bank. Trump's allies are arguing the president
Speaker 2: should be consulted on interest rate decisions and that the
Speaker 2: Treasury Department should be used more as a check on
Speaker 2: the FED. Sources tell them Journal. Trump should also have
Speaker 2: the authority to remove J. Powell as chairman before his
Speaker 2: term ends in twenty twenty six.
Speaker 1: Well Nathan, speaking of Donald Trump. Immunity for the former
Speaker 1: president and all future presidents is now before the Supreme Court,
Speaker 1: and Bloomberg's Ed Baxter has the details.
Speaker 6: The Justice has expressed skepticism towards sweeping immunity, but did
Speaker 6: say there may be a place for some kind of protection.
Speaker 6: Justice Samuel Alito asked, without immunity, would presidents be able
Speaker 6: to act.
Speaker 7: After leaving office?
Speaker 8: Is not that the president is going to be able
Speaker 8: to go off into a peaceful retirement, but that the
Speaker 8: president may be criminally prosecuted.
Speaker 6: But Justice Katanji Brown Jackson said, if there is no
Speaker 6: potential liability.
Speaker 3: Wouldn't there be a significant risk that future presidents would
Speaker 3: be emboldened to commit crimes with abandon while they're in office.
Speaker 6: Justice Sonya Sotomayor brought it back more specifically to Trump,
Speaker 6: this is.
Speaker 5: What you're asking us to say, President, it's an intoc
Speaker 5: entitle for total personal gain.
Speaker 6: The justices seemed to say this may not be done
Speaker 6: so that his DC trial could start before the election.
Speaker 6: At Baxter Bloomberg Radio.
Speaker 2: All right, ed, thank you, and testimony resumes this morning
Speaker 2: in the Manhattan hush money trial of the former president,
Speaker 2: and it's the defense's turn to question former National Inquirer
Speaker 2: publisher David Pecker. He was the prosecution's first witness and
Speaker 2: described helping a very embarrassing stories that Trump feared would
Speaker 2: hurt his campaign.
Speaker 1: Well, we turned to geopolitics. Now, Nathan and Secretary of
Speaker 1: State Anthony Blencoln meeting with Chinese President Shijin Ping in Beijing.
Speaker 1: This follows about five hours of talks with China's Foreign
Speaker 1: Minister Wang Yi, who says problems are mounting between the
Speaker 1: world's two biggest economies. Here he is speaking through an interpreter.
Speaker 9: Kushani's relationship is beginning to stabilize across the areas. Our
Speaker 9: two sides have increased dialogue, cooperation, and the positive side
Speaker 9: of the relationship. This is welcomed by our two peoples
Speaker 9: and the international community. But at the same time, denective
Speaker 9: factors in the relationship is still increasing and building, and
Speaker 9: the relationship is facing all kinds of disruptions.
Speaker 7: Well.
Speaker 1: Following those comments from Foreign Minister Wig Yee, Chinese state
Speaker 1: media quoted President she is saying the US and China
Speaker 1: need to resolve some remaining issues and that the two
Speaker 1: countries should be partners, not rivals. Honest. Time now for
Speaker 1: a look at some of the other stories making news
Speaker 1: in New York and around the world. For that, we're
Speaker 1: joined by Bloomberg's Michael Barr. Michael, good Morning, Good.
Speaker 10: Morning, Karen Police crackdowns on college campuses nationwide have led
Speaker 10: to arrests and universities calling off commencement. Bloomberg's Amy Morris
Speaker 10: as the latest.
Speaker 11: The University of Southern California canceled its main commencement ceremonies
Speaker 11: citing safety concerns. Other schools have rewritten their rules to
Speaker 11: ban encampments and moved final exams to new locations. This
Speaker 11: after hundreds of students on campuses across the country have
Speaker 11: been arrested as they take part in a nationwide movement
Speaker 11: from Columbia to Harvard Berkeley, New York University, Yale, North Carolina, Illinois, Texas,
Speaker 11: George Washington University, and American University. The students are demanding
Speaker 11: schools cut financial ties to Israel and divest from companies
Speaker 11: enabling the conflict. They also want universities to drop charges
Speaker 11: against pro Palestinian student organizers in Washington, Amy Morris, Bloomberg, Radio.
Speaker 10: Harvey Weinstein's accusers and their advocates were shocked and angered
Speaker 10: by a New York appellate court's decision to overturn the
Speaker 10: ex movie Moguls twenty twenty rape conviction, but Me Too
Speaker 10: advocates sought to send a clear message that the movement
Speaker 10: has not been derailed. The appeals court overturned the conviction,
Speaker 10: finding the trial judge unfairly allowed testimony based on allegations
Speaker 10: that were not part of the case. Weinstein's attorney, Arthur
Speaker 10: idnella what the Court of Appeals said.
Speaker 8: You can't throw out one hundred years of legal precedents
Speaker 8: because someone is unpopular.
Speaker 10: The decision does not mean Weinstein will go free. He
Speaker 10: must serve a sixteen year sentence for rape in California.
Speaker 10: President Biden is in the New York City area for fundraisers. Yesterday,
Speaker 10: the President visited Syracuse. Biden announced a six billion dollar
Speaker 10: investment in semiconductor manufacturer Micron that he says will create
Speaker 10: thousands of jobs in New York and Idaho.
Speaker 12: Together a Shermer leader and I, we took action to
Speaker 12: make sure these chips are made in America again, creating
Speaker 12: tens of thousands, and I mean tens of thousands of
Speaker 12: good paying jobs. Bring your prices down for everyone.
Speaker 10: Last night, the President attended a fundraiser in Westchester County.
Speaker 10: Biden wraps up his New York visit today with more
Speaker 10: campaign stops. Global News twenty four hours a day and
Speaker 10: whenever you want it. With the Bloomberg News. Now, I'm
Speaker 10: Michael Barr, and this is Bloomberg.
Speaker 1: Herot all right, Michael, thank you. Time now for the
Speaker 1: Bloombergy Sports Update with John stash Hour. John, Good morning,
Speaker 1: Good morning, Karen.
Speaker 8: It's become an annual part of the NFL draft. Teams
Speaker 8: desperate to try and find the next Patrick Mahomes or
Speaker 8: Lamar Jackson. That's why the top three picks last night
Speaker 8: in Detroit, and six of the.
Speaker 10: Top twelve all quarterbacks.
Speaker 8: Caleb Williams of Chicago, Jaden Daniels to Washington, Drake May
Speaker 8: to New England. Then, in a stunning move, Atlanta took
Speaker 8: Michael Pennix junior. He was not expected to go that high,
Speaker 8: and the Falcons just signed free agent QB kirk Cousins.
Speaker 8: Minnesota took JJ McCarthy. Denver drafted bow Knicks. There was
Speaker 8: a belief the Giants would take a quarterback, but instead
Speaker 8: of taking someone to replace Daniel Jones, they took a
Speaker 8: player who should help Jones. LSU's speedy white out Malik Neighbors.
Speaker 13: One of those teams I can contribute with my you know,
Speaker 13: ability to do great things. With the football. So you know,
Speaker 13: I'm glad they picked me, and I'm hoping, you know,
Speaker 13: I know they're gonna do too many things when I
Speaker 13: get there, miss refit. I'm showing, you know, Dave Ball
Speaker 13: has turned a lot of great receivers into you know,
Speaker 13: a lot of great things. So I'm trying to beat
Speaker 13: just one of those guys.
Speaker 8: The Jets few picks later, went with Penn State tackle
Speaker 8: oulu Fashanu. Rounds two and three take place tonight, Rounds
Speaker 8: four and seven tomorrow. Nixon Sixers Game three in Philadelphia,
Speaker 8: tight first half, and then Joe l Embad went off
Speaker 8: in the third quarter, scored eighteen points, took four three pointers,
Speaker 8: made them all six ers one one, twenty five, one
Speaker 8: to fourteen, cutting the next series leading to to one
Speaker 8: m beat finished with fifty. He's the first in playoff
Speaker 8: history to score fifty on fewer than twenty shots. Jalen Brunson,
Speaker 8: who didn't play well on the two Nick wins, did
Speaker 8: play well in the Game three, Los score thirty nine.
Speaker 8: Game four Sunday afternoon, after two losses in Cleveland, Orlando,
Speaker 8: came home won by thirty eight in La Denver again
Speaker 8: beat the Lakers, and are up three to nothing. So
Speaker 8: are the Carolina Hurricanes. David the Islanders three to two.
Speaker 8: Florida won five to three at Tampa Bay, also a
Speaker 8: three nothing leeing. The Rangers looked to go up three nothing.
Speaker 8: Tonight in Washington, Yankees left eleven on base lost to
Speaker 8: oakloom three to one. John Stashy. That went Bloomberg's On.
Speaker 8: It's karonon Nathan.
Speaker 10: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
Speaker 10: and around the world on Bloomberg dot Com and the
Speaker 10: Bloomberg Business app.
Speaker 2: This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Well,
Speaker 2: the bulls are back in the driver's seat this morning
Speaker 2: after blowout earnings for Microsoft and Google parent Alphabet and
Speaker 2: a signal from both these tech giants that massive bets
Speaker 2: on artificial intelligence and cloud computing are paying off and
Speaker 2: for more. We're joined by Bloomberg's Kritty Goubta Critty.
Speaker 6: Good morning.
Speaker 2: Well, we know the bar was really high for both
Speaker 2: these companies, and you look at the price action this morning,
Speaker 2: it looks like investors think they cleared it and then.
Speaker 7: Some Good morning, Nathan, Yeah, the bar high for sure,
Speaker 7: and them delivering with SWAWD colors, but there is a
Speaker 7: little bit of a different story for nuances between the
Speaker 7: two companies. And I want to start with Alphabet here
Speaker 7: because that's the big one that a lot of people
Speaker 7: were watching in terms of the catchup trade when it
Speaker 7: comes to AI and cloud as well, because we know
Speaker 7: for the cloud business, Microsoft and Amazon Web Services have
Speaker 7: really been the outperformers and therefore the dominant players in
Speaker 7: terms of market share, whereas Alphabet and Oracle have been
Speaker 7: trying to make up some of the gap. This marks
Speaker 7: a little bit of a turning point for that dynamic
Speaker 7: simply because Alphabet came out and basically said that not
Speaker 7: only does they have a good sales quarter a good
Speaker 7: profit in terms of their numbers, but they also have
Speaker 7: their second quarter of profits specifically for their AI unit.
Speaker 7: I mean, the Wall Street to estimates there were about
Speaker 7: six hundred and twenty one million. They came out with
Speaker 7: nine hundred million. The reason this matters, Nathan, is because
Speaker 7: when you have that profitability, you can scale up more
Speaker 7: quickly and actually have more incentive to do that, and
Speaker 7: that's really put some on track to compete with the
Speaker 7: likes of Microsoft and AWS on top of that. As
Speaker 7: if that wasn't enough to really power the shares, they
Speaker 7: added a little bit of a sweetener, a twenty cent
Speaker 7: per share dividend, their first ever in history seventy billion
Speaker 7: dollar share buyback. Not too shabby for outset.
Speaker 2: Yeah, certainly not. So is this becoming more of a
Speaker 2: horse race than in the cloud? I mean, there's been
Speaker 2: so much attention on asure the Microsoft partnership with open Ai,
Speaker 2: and at the same time as you're's shown that, you
Speaker 2: know they've got more room to run as well.
Speaker 5: They do.
Speaker 7: And I think the context here is really important for
Speaker 7: Microsoft's business there, because their cloud business is the real
Speaker 7: money maker for their entire kind of company. And I
Speaker 7: think this quarter they had about a thirty percent growth rate,
Speaker 7: But they've been hugging around that thirty percent level for
Speaker 7: a couple of quarters now, and I want to maybe
Speaker 7: two or three quarters ago, there was a big concern
Speaker 7: they would start dipping. Essentially, this idea here simply being
Speaker 7: that growth rate makes a lot of sense when you're
Speaker 7: scaling up, you have this exponential rate of return and rise,
Speaker 7: but at some point it kind of plateaus and every
Speaker 7: quarter investors kind of go in and say, is this
Speaker 7: the moment that that Asia business is going to be
Speaker 7: less of or at least decelerate in terms of their growth.
Speaker 7: Microsoft has come out and said, look, that's not what's
Speaker 7: happening here when it comes to their cloud business. A
Speaker 7: lot of that is because they're now using AI as
Speaker 7: a tailwind for cloud, and I think mandeep Thing over
Speaker 7: Bloomberg Intelligence often makes a great point that a lot
Speaker 7: of kind of corporate America international corporates even happen and
Speaker 7: fully invested in cloud. So there's a lot of run
Speaker 7: room to begin with on the cloud business, even though
Speaker 7: it's been around for a decade or so. Add on
Speaker 7: the AI story and there's still a lot of growth ahead.
Speaker 7: And that's the message coming out of both Microsoft and
Speaker 7: out its so.
Speaker 2: Critty, how does this set us up for what we
Speaker 2: could get from Amazon next week? Of course they're big
Speaker 2: cloud player with Amazon Web Services, but is the pressure
Speaker 2: on even more now for them.
Speaker 7: To deliver it? Absolutely is, especially because a lot of
Speaker 7: folks have looked at Amazon Webserves as Amazon as a company,
Speaker 7: of course, but specifically Amazon Webserves is in their tech
Speaker 7: kind of division as being late to the AI trade.
Speaker 7: They do have an AI investment in anthropic, but it's
Speaker 7: not the same level of investment that for example, Microsoft
Speaker 7: has put towards open Ai. So a big question here
Speaker 7: is as AI becomes a tailwind for Alphabet and Microsoft's
Speaker 7: cloud services, does it then become kind of the Achilles
Speaker 7: Heel for the AWS cloud offering. And that's really where
Speaker 7: that's an incredibly kind of important tone change and tone set.
Speaker 7: I would argue that Amazon has to prove given that
Speaker 7: the new CEO, Andy Jase, used to be the head
Speaker 7: of WUS before he took on the rain over at
Speaker 7: the company.
Speaker 2: Just thirty seconds left here, Critty, But does the market
Speaker 2: narrative change? Will we get March PCEE later on this morning?
Speaker 7: It could change. Look, there was a lot of what
Speaker 7: some are calling this morning new European trade and overreaction
Speaker 7: in the bond marketing. Stock market numbers are still looking good,
Speaker 7: but again it's that pce diflator that could really change
Speaker 7: the dial and get a little bit more clearity on
Speaker 7: what we saw in the GDP numbers yesterday.
Speaker 14: This is Bloomberg day Break today, your morning brief on
Speaker 14: the stories making news from Wall Street to Washington and beyond.
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Speaker 14: You can also listen live each morning starting at five
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Speaker 14: Listen coast to coast on the Bloomberg Business app, seriusxmb
Speaker 14: iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager
Speaker 14: and I'm Karen Moscow.
Speaker 1: Join us again tomorrow morning for all the news you
Speaker 1: need to start your day right here on Bloomberg Daybreak