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00:00And right now we are two minutes away from the end of the trading day.
00:04Romain Bostic here with Katie Greifeld taking you through to that closing bell with a global simulcast.
00:08Carol Masser, Tim Stenevich, they're in the radio booth.
00:11Welcome to our audiences across all of our Bloomberg platforms here on a very busy afternoon.
00:16A lot of things going on there, a potential detente in the U.S.-China trade wars,
00:20a Fed meeting that actually surprised in a rare, rare sort of move,
00:24and of course a slew of earnings on tap just moments away.
00:26Yeah, what an exciting day, and we've definitely seen a reset when it comes to the Treasury trade
00:31with Jay Powell talking about the December meeting.
00:33So much was expected in terms of another rate cut come December.
00:37Angelo Zeno was just on with us.
00:39CFRA Research covers the big tech names.
00:41He says it's a great place for big tech, even with what we got from the Fed today.
00:46He's not worried about the environment.
00:47He said there's challenges outside of big tech and even addressed what Jay Powell was asked about
00:52in terms of the AI spend.
00:53And again, he agreed with what Jay Powell said.
00:55He said, this area, higher rates or lower rates or whatever, not a problem.
00:59He's also saying, hey, NVIDIA is pretty reasonably valued at $5 trillion.
01:06NVIDIA hitting a $5 trillion market cap for the first time today, of course.
01:10Yeah, I was going to say, did he exactly say that?
01:12He did say that.
01:13Yeah, he did.
01:13He did.
01:14Still a deal.
01:14He's blown away by the number we got from the GTC event.
01:18$500 billion.
01:18Yeah.
01:19So.
01:20Yeah.
01:20Well, I thought it was interesting, too.
01:21He said that, oh, this AI spend, it's not like the 1990s tech bubble because these companies
01:26have earnings.
01:27So we should point out some of these companies have earnings.
01:30Of course, there's a lot of players in this space here that have not shown a whole lot
01:33of anything.
01:34We are going to see some of those cards put on the table in just a matter of moments.
01:38We're expecting earnings out of Meta, out of Microsoft, out of Alphabet.
01:41And that's just in the tech space.
01:43Also expecting Carvana, Starbucks, Chipotle, and a few others.
01:47As we get the closing bells here in New York, the S&P straddling the line between gains and
01:52losses.
01:52I'm just going to call it right now unchanged on the day, but it does look like it could
01:56potentially maybe finish in the green or maybe not.
01:59The Dow Jones Industrial Average is decidedly down more than 70 points or a tenth of a percent.
02:03The NASDAQ is going to finish firmly in the green, up about 130 points or six tenths
02:08of one percent.
02:09The S&P 500, we'll call it now.
02:11It is going to end the day in the red, so no record high for that.
02:13And the Russell 2000 down another day, nine-tenths of one percent.
02:17Yeah, looking at the S&P 500, most names in that index, folks, lower today.
02:22378 losing some ground today, Katie.
02:24124 to the upside and one unchanged.
02:26Yeah, super narrow there.
02:28Let's take a look at the sector.
02:29And let's take a look at the circle and see what our friend is saying there.
02:31You can see the tech did manage to finish in the green, actually, as a sector overall,
02:36up by about one percent.
02:37All eyes on NVIDIA.
02:38Communication services, which is pretty much tech in disguise, also rallying strong today.
02:43Energy industrials catching a little bit of a bid.
02:45What didn't do too well, you would guess this would be the case, real estate down by 2.7 percent.
02:51We saw a big pop in yields as Jerome Powell was speaking, and that certainly hit that sector
02:56pretty hard.
02:57All right, real quickly, NVIDIA got a mention, $5 trillion market cap today.
03:00The stock up as much as 5.5 percent earlier in the day, still finishing with a gain of
03:05about 3 percent, a historic $5 trillion market cap.
03:09We know we got a lot of big headlines from the company and its CEO, Jensen, yesterday.
03:15Just the AI spend, the AI frenzy.
03:17And we know how important this name is, certainly, to the bull market that we've seen.
03:22With a 50 percent gain this year through yesterday's close, the stock is single-handedly responsible
03:26for nearly a fifth of the S&P 500's index, 70 percent advance this year.
03:31So we know it's been really driving the trade.
03:34Teradyne, just got to mention, this was definitely a top gainer in the S&P 500, up 20 percent in
03:41today's session.
03:42I believe it's a record close.
03:44It's a semi-manufacturing company.
03:46Third-quarter results beat expectations, and it gave an outlook well ahead of analyst consensus.
03:51It also named Michelle Turner its chief financial officer, effective November 3rd.
03:55That stock up 40 percent.
03:56And Caterpillar, up 11 percent, also an outperformer today.
04:00Is this an AI play now, I'm told?
04:02Is Caterpillar an AI play?
04:04No, isn't it nice?
04:06Ah, we got Alphabet.
04:07All right, well, speaking of AI, yeah, Alphabet earnings are out.
04:10EPS coming in, looks like a pretty big beat, $2.87 a share for the most recent quarter.
04:15The street was looking for $2.26.
04:17Revenue in the most recent quarter, also a beat, $102 billion and change.
04:23The street, on average, was looking for roughly about $99.9 billion.
04:27The company also says that it ended the quarter, that Google Cloud, I should say, ended the quarter,
04:32get this, guys, $155 billion backlog.
04:35Yeah, certainly raises the stakes, too, for Amazon.
04:38A lot of focus on that cloud business.
04:40You can see Alphabet shares deciding what to do, moving higher right now.
04:43I will say, Tim, that the bar was high for Alphabet specifically.
04:48You think about where the stock has gone year to date, up by 45 percent.
04:52But clearly, you can see investors parsing through and deciding what to do.
04:56Yeah, bouncing around a little bit, but firmly higher now, about 3 percent.
04:59Sundar Pichai, the CEO, out saying that the company had a terrific quarter, double-digit growth
05:04across every major part of the business, calling out the first-ever $100 billion quarter.
05:09He also called out Gemini, now processes 7 billion tokens per minute, and alludes to the full-stock
05:14approach to AI at Google that's delivering strong momentum, shipping at speed, including
05:19the global rollout of AI overviews and AI mode in search-in record time.
05:23Shares now up by about, wow, 4 percent.
05:25All right, from one hyperscaler to another we go.
05:28Let's go to Microsoft, folks, just crossing with its numbers.
05:31First quarter, intelligence cloud revenue.
05:33This is what we care about, $30.9 billion.
05:36The estimate on the street was $30.18 billion, so it looks like it's coming in line.
05:42First quarter, Azure, also important.
05:44Another cloud revenue, X currency, up 39 percent.
05:48That beats the estimate of a gain of about 37.1 percent.
05:52And first quarter revenue, again, a beat, $77.67 billion.
05:58The estimate on the street remained, $75.55 billion.
06:01And yet we're seeing the stock down about 4 percent here in the aftermarket.
06:05So we'll look for some more color on this one.
06:07Yeah, some of these numbers, well, certainly a beat with regards to the average of analyst
06:11estimates that were public.
06:12It looks like they did come in below some of the whisper estimates that Bloomberg had reported
06:17on.
06:17But it gets to this idea as well.
06:18And we always have to wait with Microsoft to actually get any sort of forward guidance
06:21a little bit later.
06:22But this idea of exactly what is in the pipeline that they can actually sort of deliver or at
06:27least flag to investors, it could sort of be a signal here that not just the spend on
06:32Microsoft's part, but more importantly, the reciprocity is actually still there.
06:36Yeah, absolutely.
06:36Maybe we'll get some more detail about the pipeline when it comes to the earnings call.
06:40But you can see, again, those shares holding the after hours decline of about 4 percent.
06:45And we know it was a big week for Microsoft with that open AI restructuring.
06:49Microsoft, of course, securing a stake here when it comes to the future, at least through
06:532032, Tim.
06:55All right.
06:55I'm taking a look at Starbucks ticker SBUX.
06:59That company out with earnings as we speak.
07:01Fourth quarter China comp sales up 2 percent.
07:03The estimate was for 2.16 percent.
07:05Fourth quarter comp sales up 1 percent.
07:08That beat estimates of just about negative half a percentage point.
07:11Fourth quarter net revenue coming in above estimates at $9.6 billion.
07:15Fourth quarter adjusted earnings per share coming in shy of estimates at 52 cents.
07:19Fourth quarter North America comp sales, they were flat.
07:23The estimate was for a decline of half a percentage point.
07:25Fourth quarter adjusted operating margin of 9.4 percent.
07:30The estimate was for 10.2 percent.
07:32So that came in below estimates.
07:33Starbucks shares up about 1.6 percent now in the after hours.
07:37All right.
07:37So let's get to Meta because we're seeing the stock drop about 3.9 percent here in the
07:42aftermarket.
07:43Meta with the outlook sees fourth quarter revenue 56 to 59 billion.
07:47The estimate on the street is 57.38 billion.
07:51Fourth quarter 2025 or fourth quarter revenue.
07:54Let me go there because we're red heading that one here at the Bloomberg.
07:57Meta is seeing fourth quarter revenue 56 to 59 billion, estimate 57.38 billion.
08:03Again, the stock down about 5 percent.
08:06Sees fourth quarter total revenue to be in the range, again, of 56.59.
08:11Keep rereading the same ones as they come up.
08:13Looking at the past quarter, third quarter ad revenue was 50 billion.
08:16That's a beat.
08:17The street was looking for 48.59 billion.
08:20Third quarter EPS, $1.05 versus $6.03 a share.
08:24That's year over year.
08:26So we'll look for some color on that one.
08:28And then just looking at, go ahead.
08:30I just also want to point out too here, just going through the release here, there does
08:34appear to be a pretty large charge that the company took in the most recent quarter.
08:38This is a non-cash income tax charge of $15.93 billion.
08:46Meta though does say this is a one-off event.
08:48And I just want to be very precise in the language here.
08:50And that they do still see their fourth quarter 2025 tax rate in the range of 12 to 15 percent,
08:57which would be in line with what the street was looking for.
09:01But that does appear to be where we're getting some of the reaction.
09:03And one of the reasons why you did see a little bit of softness in that bottom line number
09:06for the quarter that just was.
09:08Let me just dive a little bit deeper into it and try to get you some more details.
09:11Yeah, we'll continue to follow that.
09:13But as Romain said, could explain some of the negative reaction that we're seeing right now.
09:17MetaShare is now down by more than 7 percent.
09:19I do want to go to this line in the release.
09:21We have a lot of focus, of course, when it comes to CapEx.
09:24Meta, they expect full year 2025 total expenses to now be in the range of $116 to $118 billion.
09:31The prior outlook had been for $114 to $118 billion there.
09:35And they also say that our current expectation is that capital expenditures,
09:39dollar growth will be notably larger in 2026 than in 2025.
09:44This has really been the story for a lot of these big seven names, but also for Meta particularly.
09:49Sorry, I do want to go back to that tax issue here with Meta.
09:52And this is something that Zuckerberg and his team are going to have to address on the call.
09:55They talk about the one big beautiful bill, basically the big budget stimulus that was
10:00passed earlier this year.
10:01They did say that they expect a significant reduction in their federal cash tax payments
10:06for the rest of the year because of that bill.
10:08However, they're saying that for the quarter that just passed, they had to recognize a valuation
10:13allowance change that basically amounted to a $16 billion charge.
10:18Again, they are saying that this is a one-time charge and then effectively they will revert
10:22back to something that actually a little bit less with regards to the effective tax rate
10:27for the current quarter, the current fourth quarter that we're in.
10:29Yeah, the company continues on there.
10:31Romaine says net income would have increased by $15.93 billion to $18.64 billion compared to
10:37the reported net income of $2.71 billion.
10:41The company also saying, Mark Zuckerberg specifically saying that leading the industry when it comes
10:48to AI glasses, which we know that, and he sees a big opportunity there.
10:51A lot of analysts see a big opportunity there.
10:53He says if we deliver even a fraction of the opportunity ahead, then the next few years will
10:57be the most exciting period in our history.
10:59All right.
11:00Well, those are some big words.
11:01But let's tear our eyes away from Meta for just a moment and talk about eBay, also reporting
11:06earnings, fourth quarter net revenue.
11:09That is seen between $202.83 billion to $2.89 billion.
11:15The estimate had been for $2.8 billion.
11:18So a bump up of that range.
11:20Take a look at shares down almost 9% at this point, though.
11:24So certainly some disappointment coming through when it comes to eBay.
11:27Some disappointment as well when it comes to Carvana.
11:29Those shares down 10% in the after hours trade with third quarter EPS.
11:33Coming in at $1.03 a share, revenue coming in at $5.65 billion.
11:38But here's your guidance.
11:39The company says that full-year EBITDA will be at least $2.2 billion.
11:43It had previously pretty much guided towards that.
11:45It had a range of $2 to $2.2 billion.
11:48So maybe potentially trying to nudge slightly above that with regards to expectations.
11:53We should point out, though, the company is also saying here with regards to retail unit
11:57sales, $155,941, we'll just round up to $156,000 here.
12:03Again, that did beat the average of annual assessments, but there was a whisper number
12:06out there that was a little bit higher, maybe partly responsible for why you're seeing the
12:09shares down in the after hours trade.
12:11Yeah, cost and expenses, too, up about 32% year over year.
12:14Kurt Wagner, though, on our live blog saying, talking about this net income and how we see
12:20this shortage and then attributing it to this one-time tax charge, definitely a lot of questions
12:25on what this is, because it does feel like it's come out of nowhere.
12:30Sorry, one quick one.
12:31Chipotle crossing the wire right now.
12:33Adjusted EPS coming in line with estimates at $0.29 a share.
12:36Revenue roughly coming in line with estimates at $3 billion.
12:40Comp sales lower than estimated, coming in at 0.3%.
12:43The street was looking for a gain of about 1% here.
12:46So a little bit light with regards to comp sales growth, also a little bit light when
12:50it comes to operating margin, 15.9%.
12:54The street was looking for 16.6%.
12:56And while we're here, let's just talk about ServiceNow really quickly, boosting their full
13:00year subscription revenue forecast, also beating estimates when it comes to the look back.
13:04Subscription revenue now seen between $12.84 billion to $12.85 billion.
13:09The previous guide was for $12.78 billion to $12.8 billion.
13:14So you can see, of course, a little bit of a boost there to ServiceNow when it comes
13:19to that full year subscription revenue.
13:22All right.
13:22So Microsoft down 3.3%.
13:23You've got Alphabet up about 3.5%.
13:26And you've got Meta down about 5.7%.
13:28So those are big ones that we'll keep a watch on as we go into those calls with analysts
13:32and investors.
13:32So we'll keep a watch on as we get started.
13:37So we're both talking about Wiens and investors also who find out what's got in the future.
13:53So we're here.
13:53All right.
13:55So we're good.
13:55So you're here.
13:56Can we see?
13:57It's good.
13:58So our one with our own team is very important.
13:59Let's all right.
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