Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple Card playing Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

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With consumer confidence number in ninety seven, the expectations coming in sixty six point four, you got to wonder what's behind that?

With consumer confidence number in ninety seven, the expectations coming in sixty six point four, you got to wonder what's behind that?

Yeah, that and that expectation sixty six point four is down from last month's revised up seventy four, So a big drop there.

Yeah, that and that expectation sixty six point four is down from last month's revised up seventy four, So a big drop there.

Well, luckily we have Dana Peterson here, she's chief economists over at the Conference Board. They do this data, so it's great that we get her for that instant reaction. So just to recap that Consumer Conference consumer confidence number coming at ninety seven, Dana, what happened? What's behind that?

Well, luckily we have Dana Peterson here, she's chief economists over at the Conference Board. They do this data, so it's great that we get her for that instant reaction. So just to recap that Consumer Conference consumer confidence number coming at ninety seven, Dana, what happened? What's behind that?

Sure, this is the third month that the index has fallen off, and certainly in the month consumers were less optimistic about current employment conditions, and certainly looking forward they were less optimistic about employment, business and also income. But I would say that if you look out of the last two years, the headline measure has been moving back and forth in a pretty narrow range, but still in all three months down we really wonder what's going to happen in that fourth month.

Sure, this is the third month that the index has fallen off, and certainly in the month consumers were less optimistic about current employment conditions, and certainly looking forward they were less optimistic about employment, business and also income. But I would say that if you look out of the last two years, the headline measure has been moving back and forth in a pretty narrow range, but still in all three months down we really wonder what's going to happen in that fourth month.

So how long does a trend here? I mean, it feels like a trend to me, and I'm looking at some of the revisions downward here, what is this data really telling us?

So how long does a trend here? I mean, it feels like a trend to me, and I'm looking at some of the revisions downward here, what is this data really telling us?

Here?

Here?

Is there a problem for this US economy?

Is there a problem for this US economy?

Here?

Here?

Well, I would split it out, so the headline, well, the headline is made up of present conditions and also expectations. So the present conditions index has actually stayed pretty much afloat, even though it's moving back and forth a lot. But expectations really came off about a year or so ago, and they've just been flirting with that eighty threshold, and below eighty usually signals or recession. So it suggests consumers are a little worried about something. They're concerned about inflation still, and they're getting a little bit worried about the labor market.

Well, I would split it out, so the headline, well, the headline is made up of present conditions and also expectations. So the present conditions index has actually stayed pretty much afloat, even though it's moving back and forth a lot. But expectations really came off about a year or so ago, and they've just been flirting with that eighty threshold, and below eighty usually signals or recession. So it suggests consumers are a little worried about something. They're concerned about inflation still, and they're getting a little bit worried about the labor market.

So to that point, this kind of goes to the whole idea that people feel really bad even though the overall data, like you could look at the employment cost in next coming and higher than estimated, you know, GDP I realized was a little cool, but still the data actually comes in pretty pretty strong. How do we understand that?

So to that point, this kind of goes to the whole idea that people feel really bad even though the overall data, like you could look at the employment cost in next coming and higher than estimated, you know, GDP I realized was a little cool, but still the data actually comes in pretty pretty strong. How do we understand that?

So?

So?

I think the key thing is, on the one hand, consumers are working and so they feel good about that and they have income coming in, but then that income is eroded by inflation. Prices are still elevated. Even though prices aren't rising as quickly as they were, the level is high. People are saying eggs are eight bucks. I'm not used to that.

I think the key thing is, on the one hand, consumers are working and so they feel good about that and they have income coming in, but then that income is eroded by inflation. Prices are still elevated. Even though prices aren't rising as quickly as they were, the level is high. People are saying eggs are eight bucks. I'm not used to that.

I don't really like that, all right, Dana, thanks so much for joining us. Dana Peterson, she's a chief economist at the Conference Board. Kind of break down some of these consumer confidence data coming in today, and again the headline is Alex just reported Consumer Conference Board consumer confidence came in and reading you have ninety seven.

I don't really like that, all right, Dana, thanks so much for joining us. Dana Peterson, she's a chief economist at the Conference Board. Kind of break down some of these consumer confidence data coming in today, and again the headline is Alex just reported Consumer Conference Board consumer confidence came in and reading you have ninety seven.

Consensus was one zero four, one oh four. So a pretty big miss there.

Consensus was one zero four, one oh four. So a pretty big miss there.

Straight up inflation, Like you're right, if you're gonna go pay eight bucks for eggs, Like that's how you feel, no matter what your paycheck necessarily is.

Straight up inflation, Like you're right, if you're gonna go pay eight bucks for eggs, Like that's how you feel, no matter what your paycheck necessarily is.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecard Play and Android auto. With the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecard Play and Android auto. With the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven.

Thirty and Alex steelongside Paul Sweeney. This is Bloomberg Intelligence Radio, recover all the top news with our amazing analysts worldwide. They covered about two thousand companies and one hundred and thirty industries. We also want to give you the perspective of bigger market strategists, right, like, how do you look at it if you're looking at the longer term perspective when it comes to quity is and how the short term is dictating how you're going to see the outcome. Chris Watling is CEO and chief market strategist over at Longview Economics. He joined us now from Toronto, Canada. So I'm looking Chris at an SMP charter one month and clearly we had a decline last week. Right, we've retraced that we're up about three percent from the lows, but we're still down by about two two and a half percent from the peak that we saw back in early April. What do we make of the market?

Thirty and Alex steelongside Paul Sweeney. This is Bloomberg Intelligence Radio, recover all the top news with our amazing analysts worldwide. They covered about two thousand companies and one hundred and thirty industries. We also want to give you the perspective of bigger market strategists, right, like, how do you look at it if you're looking at the longer term perspective when it comes to quity is and how the short term is dictating how you're going to see the outcome. Chris Watling is CEO and chief market strategist over at Longview Economics. He joined us now from Toronto, Canada. So I'm looking Chris at an SMP charter one month and clearly we had a decline last week. Right, we've retraced that we're up about three percent from the lows, but we're still down by about two two and a half percent from the peak that we saw back in early April. What do we make of the market?

What do you make of the market? What a great question and morning Alex and Paul. Great to be on. Yeah, I mean it's it's I think it's it's time for a bit of give back, and we think about it. It's been extremely good run all the way from the sort of loads in October last year through to where we were at the beginning of April when we when we sort of hit the highs on the S and P, and and since then, I think we've had just a bit of give back, a bit of a pause, what I would call a healthy correction. And you know, part of the reasons for that is I think the market's time to think about the liquidity environment over the summer.

What do you make of the market? What a great question and morning Alex and Paul. Great to be on. Yeah, I mean it's it's I think it's it's time for a bit of give back, and we think about it. It's been extremely good run all the way from the sort of loads in October last year through to where we were at the beginning of April when we when we sort of hit the highs on the S and P, and and since then, I think we've had just a bit of give back, a bit of a pause, what I would call a healthy correction. And you know, part of the reasons for that is I think the market's time to think about the liquidity environment over the summer.

You know, the RRP.

You know, the RRP.

This draining of the r RP has been a wheel driver for stock markets, for riskats. It's over the last seven eight months, as that's been drained and liquidity has come into equities, that's been a will positive. And also I think there's some issues about yields back up. This is a bit of a sort of biting on the valuation side of the equity market. And then on top of that, personally, I think grow it's going to surprise a little bit to the downside in the States this year. So grappling with all of those, I would say and as you said, the market bounced last week, it's sold off the prior week. You know, markets don't go down in straight lines, they don't go up in straight lines. So I think we've begun early eight for a bit of a gift back, a healthy correction, as I say, And I think it's it's good for the market, so it's important, and it often happens at the time when you begin some rotation in sector leadership.

This draining of the r RP has been a wheel driver for stock markets, for riskats. It's over the last seven eight months, as that's been drained and liquidity has come into equities, that's been a will positive. And also I think there's some issues about yields back up. This is a bit of a sort of biting on the valuation side of the equity market. And then on top of that, personally, I think grow it's going to surprise a little bit to the downside in the States this year. So grappling with all of those, I would say and as you said, the market bounced last week, it's sold off the prior week. You know, markets don't go down in straight lines, they don't go up in straight lines. So I think we've begun early eight for a bit of a gift back, a healthy correction, as I say, And I think it's it's good for the market, so it's important, and it often happens at the time when you begin some rotation in sector leadership.

So that's kind of interesting as well.

So that's kind of interesting as well.

Chris, were about halfway through earning season here. Anything jumping out at you so far? I mean, I guess revenue is surprising, maybe one or two percent on the upside, earnings maybe eight or nine percent on the upside.

Chris, were about halfway through earning season here. Anything jumping out at you so far? I mean, I guess revenue is surprising, maybe one or two percent on the upside, earnings maybe eight or nine percent on the upside.

Anything surprising you, well, I.

Anything surprising you, well, I.

Think, I mean the interesting thing I mean is somewhat surprising, but some sensible. I suppose you've got that following when when earnings have been a bit better. So, as you say, the earnings are surprising to the upside, they aren't deliver in growth. I think this de collective surprise is about eight percent at the moment, and normally it's three or four percent positive surprise, so that's coming in. I think it's quite interesting how some of the big stocks have been very mixed. We've seen over the last seven or so days, you know, some of the big cap tech having very different outcomes of very different performance as a result. So there's a lot of volatility on the back of that in some of those stocks, you know, ten percent moves on the day on earnings announcements. So I'd say those are probably so far the key features, lots to go for, lots to come.

Think, I mean the interesting thing I mean is somewhat surprising, but some sensible. I suppose you've got that following when when earnings have been a bit better. So, as you say, the earnings are surprising to the upside, they aren't deliver in growth. I think this de collective surprise is about eight percent at the moment, and normally it's three or four percent positive surprise, so that's coming in. I think it's quite interesting how some of the big stocks have been very mixed. We've seen over the last seven or so days, you know, some of the big cap tech having very different outcomes of very different performance as a result. So there's a lot of volatility on the back of that in some of those stocks, you know, ten percent moves on the day on earnings announcements. So I'd say those are probably so far the key features, lots to go for, lots to come.

So Cameron christ writes a daily newsletter. He also contributes to m Live and he had one of the best sentences I've heard in a while on his daily article today. Chris He said, one of the basic principles of successfully navigating financial markets is that you should only date, not marry your positions. Thanks the question what positions should you date and what should you marry? Right now?

So Cameron christ writes a daily newsletter. He also contributes to m Live and he had one of the best sentences I've heard in a while on his daily article today. Chris He said, one of the basic principles of successfully navigating financial markets is that you should only date, not marry your positions. Thanks the question what positions should you date and what should you marry? Right now?

Well, I like to think not only rather than I.

Well, I like to think not only rather than I.

Kind of like the dating marriage. But okay, I see your point, n versus owning.

Kind of like the dating marriage. But okay, I see your point, n versus owning.

Yeah, it's all the same. What what should you date?

Yeah, it's all the same. What what should you date?

What? I think you should you should be dating. If you're very short term trader, you should be short this equity market for for for a bunch of weeks, a couple of months. Uh, and you should be thinking about marrying at the at the bottom in a in a month or two time, because you know, the soft landing that I think is going to come in the US, coupled with some eventual rate cuts certainly in the out of the fair but also of course out of the European Central Bank and out of the UK, that's all coming.

What? I think you should you should be dating. If you're very short term trader, you should be short this equity market for for for a bunch of weeks, a couple of months. Uh, and you should be thinking about marrying at the at the bottom in a in a month or two time, because you know, the soft landing that I think is going to come in the US, coupled with some eventual rate cuts certainly in the out of the fair but also of course out of the European Central Bank and out of the UK, that's all coming.

That's all very positive.

That's all very positive.

So you know, you know, you want to you want to date in the short term and rent in the medium term. Gold we like, uh and gold gold you could almost marry, you know, I mean girl, I mean gold gold is gold is It's a terrific acid class at the moment. It's had a great run already this year. Of course it's given a bit of that back recently, but it's got a lot going for it.

So you know, you know, you want to you want to date in the short term and rent in the medium term. Gold we like, uh and gold gold you could almost marry, you know, I mean girl, I mean gold gold is gold is It's a terrific acid class at the moment. It's had a great run already this year. Of course it's given a bit of that back recently, but it's got a lot going for it.

The Chinese are buying.

The Chinese are buying.

There's some stories, I think on the Bloomberg termal today about Chinese buying, central bank buying. That's been a themal year. And it's not just the central bank in China, it's also the retailer. Is in China is time to buy, and there's of course an awful lot of them and a lot of liquidity around there. So we like gold, and it'll be helped when the FED eventually starts cutting rights. So I you know, as I say, could almost marry that. I actually think European banks you should own and rent and buy and everything.

There's some stories, I think on the Bloomberg termal today about Chinese buying, central bank buying. That's been a themal year. And it's not just the central bank in China, it's also the retailer. Is in China is time to buy, and there's of course an awful lot of them and a lot of liquidity around there. So we like gold, and it'll be helped when the FED eventually starts cutting rights. So I you know, as I say, could almost marry that. I actually think European banks you should own and rent and buy and everything.

And I think I.

And I think I.

Actually our left of field recommendation moments by Spanish mid caps, which is really out there but Spanish. Yeah, I know, I know it sounds a bit nuts, but actually has a lot to be said for them. It's an economy that's been neglected no one's really talked about for ten to fifteen years since the euro crisis. Are because the pigs crisis as it was known with with d sbing Spain, and you know, the economy has really sorted itself out over these last fifteen years. Healed a lot of structural imbalances. It's well set and it's going to get rate cuts when the ECB starts cutting, and it's going to benefit from those. And I think we're going to see strong growth out of Spain. And of course mid caps is a great way to play a domestic economy. So that is an own and a marry basically, not a rent or whatever the other one was.

Actually our left of field recommendation moments by Spanish mid caps, which is really out there but Spanish. Yeah, I know, I know it sounds a bit nuts, but actually has a lot to be said for them. It's an economy that's been neglected no one's really talked about for ten to fifteen years since the euro crisis. Are because the pigs crisis as it was known with with d sbing Spain, and you know, the economy has really sorted itself out over these last fifteen years. Healed a lot of structural imbalances. It's well set and it's going to get rate cuts when the ECB starts cutting, and it's going to benefit from those. And I think we're going to see strong growth out of Spain. And of course mid caps is a great way to play a domestic economy. So that is an own and a marry basically, not a rent or whatever the other one was.

Dates.

Dates.

Yeah, So yeah, so that there's there's so much going on, there's so many opportunities out there.

Yeah, So yeah, so that there's there's so much going on, there's so many opportunities out there.

But yeah, you've got to distinguish between trading and investing.

But yeah, you've got to distinguish between trading and investing.

Which let's go, let's go hyper local.

Which let's go, let's go hyper local.

How's the economy in Clapham, which is a neighborhood south of London.

How's the economy in Clapham, which is a neighborhood south of London.

Clapham, how's it?

Clapham, how's it?

That's a great question. I do actually live very close to Clapham. I'm obviously in Canada at the moment, but Plapham, Clapham in South London is buzzing because it's full of twenty and thirty year olds basically who who love to get out and the sunshine started to come out and it's that time of year.

That's a great question. I do actually live very close to Clapham. I'm obviously in Canada at the moment, but Plapham, Clapham in South London is buzzing because it's full of twenty and thirty year olds basically who who love to get out and the sunshine started to come out and it's that time of year.

So but but the British.

So but but the British.

Economy is not good now, which is perhaps more to your question. The British economy is flat. It's had no growth in two years. It's flat as a parent caake and it desperately needs weight cuts and we're going to be getting those pretty soon.

Economy is not good now, which is perhaps more to your question. The British economy is flat. It's had no growth in two years. It's flat as a parent caake and it desperately needs weight cuts and we're going to be getting those pretty soon.

Yes, So is that the expectation of the Bank Bank of England is not waiting on the Fed that the Bank of England is confident to cut rage sooner?

Yes, So is that the expectation of the Bank Bank of England is not waiting on the Fed that the Bank of England is confident to cut rage sooner?

Absolutely.

Absolutely.

I think that the Bank of England is just like the UCB and you would have seen Christine Lagarde a couple of weeks ago say, you know that the UCB is not is data dependent, not Fed dependent, trying to make that distinguish distinction between the FED and the European central banks. So same in the UK, different inflation dynamics, different growth dynamics, and therefore and need to get on with cuts.

I think that the Bank of England is just like the UCB and you would have seen Christine Lagarde a couple of weeks ago say, you know that the UCB is not is data dependent, not Fed dependent, trying to make that distinguish distinction between the FED and the European central banks. So same in the UK, different inflation dynamics, different growth dynamics, and therefore and need to get on with cuts.

I wonder what the currencies are going to say about that and the very differentials. But okay, let's play it out a little bit. How strong does a dollar actually get. I mean, it is definitely breaking things.

I wonder what the currencies are going to say about that and the very differentials. But okay, let's play it out a little bit. How strong does a dollar actually get. I mean, it is definitely breaking things.

It is breaking things, and you're quite right, and it's probably got I think it's got one more flurry in it in this sort of risk of phase that we're thinking about in the near term, and of course the dollars are classic recipient of liquidity when.

It is breaking things, and you're quite right, and it's probably got I think it's got one more flurry in it in this sort of risk of phase that we're thinking about in the near term, and of course the dollars are classic recipient of liquidity when.

It's a risk off.

It's a risk off.

But beyond that, I think we're going to get into a dollar bear market. You know, we've had a dollar bull market now for a long time, sort of ten plus years depending on your starting point, but a long old dollar bull market, and I think we're due a change in that sort of secular status of the currency. So yeah, I've given a few more weeks of strength in the dollars, we've complete this risk of phase, then as we get closer to fedweight cuts, because I mean, I think really in this risk of phase that you know the market wants to bully the FED for cuts.

But beyond that, I think we're going to get into a dollar bear market. You know, we've had a dollar bull market now for a long time, sort of ten plus years depending on your starting point, but a long old dollar bull market, and I think we're due a change in that sort of secular status of the currency. So yeah, I've given a few more weeks of strength in the dollars, we've complete this risk of phase, then as we get closer to fedweight cuts, because I mean, I think really in this risk of phase that you know the market wants to bully the FED for cuts.

You know, we're still doing QT.

You know, we're still doing QT.

I mean, this is an extraordinary thing, you know, And I think this will be tough for the stock market to to with with with QT ongoing. So yeah, so I think got one more, one more, one more florry in the dollar.

I mean, this is an extraordinary thing, you know, And I think this will be tough for the stock market to to with with with QT ongoing. So yeah, so I think got one more, one more, one more florry in the dollar.

One more floy and real quick, Chris, I mean, are we going to get a rate cut in the US here this year?

One more floy and real quick, Chris, I mean, are we going to get a rate cut in the US here this year?

I think so? Yeah?

I think so? Yeah?

Okay, I mean I know the data is so mixed, isn't it. I mean, e CI not so good today. Consumer confidence is bad. It's it's a two speed economy, and I think that's why the data is so confusing. But I do think the reality is money is much tight and it has been. Fiscal stimulus is not as good as it was last year, in fact, quite the reverse, And so I think inflation will dissipate and you'll get a cut and maybe two, but certainly one.

Okay, I mean I know the data is so mixed, isn't it. I mean, e CI not so good today. Consumer confidence is bad. It's it's a two speed economy, and I think that's why the data is so confusing. But I do think the reality is money is much tight and it has been. Fiscal stimulus is not as good as it was last year, in fact, quite the reverse, And so I think inflation will dissipate and you'll get a cut and maybe two, but certainly one.

Hey, Chris really appreciated Chris Watling joining US from Longview Economics. Just so I know Paul Chris knows this, but you don't know. He is my mom's favorite.

Hey, Chris really appreciated Chris Watling joining US from Longview Economics. Just so I know Paul Chris knows this, but you don't know. He is my mom's favorite.

He is.

He is.

He is nice.

He is nice.

That's just for he.

That's just for he.

Doesn't know what to say to that. I just feel like he used to be on with me in the morning show. He used to jam for like an hour or two. And okay, she's Carol Steel's favorite out there.

Doesn't know what to say to that. I just feel like he used to be on with me in the morning show. He used to jam for like an hour or two. And okay, she's Carol Steel's favorite out there.

It's a big deal.

It's a big deal.

It's a big deal means And speaking of the FED, Bloomberg Radio has full coverage for you starting at one thirty eastern tomorrow, very much. All looking forward to.

It's a big deal means And speaking of the FED, Bloomberg Radio has full coverage for you starting at one thirty eastern tomorrow, very much. All looking forward to.

That, Tom Lisa and John Farrell. How good is that?

That, Tom Lisa and John Farrell. How good is that?

So good?

So good?

Can't get any better?

Can't get any better?

Talking about the FED?

Talking about the FED?

And then and Michael McKee, we're sending him on the sella train this say afternoon. He'll be down there ready to go and ask his question or two of the FED chairman during the press conference tomorrow afternoon, which starts at two thirty pm Wall Street time.

And then and Michael McKee, we're sending him on the sella train this say afternoon. He'll be down there ready to go and ask his question or two of the FED chairman during the press conference tomorrow afternoon, which starts at two thirty pm Wall Street time.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on AFO, car Playing and broyd Outo with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on AFO, car Playing and broyd Outo with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

Paramount.

Paramount.

Paramount is the old CBS television networking stations. It's the Viacom, which is MTV and all that kind of good stuff, the Powermount movie and TV studio, all that's wrapped up into this company renamed Paramount.

Paramount is the old CBS television networking stations. It's the Viacom, which is MTV and all that kind of good stuff, the Powermount movie and TV studio, all that's wrapped up into this company renamed Paramount.

A lot going on there, let's put it.

A lot going on there, let's put it.

I mean they got reported earnings last night mixed, They replaced their CEO. That's not good with an office of CEO. And oh yeah, they're actually in discussions to be sold to one or more parties.

I mean they got reported earnings last night mixed, They replaced their CEO. That's not good with an office of CEO. And oh yeah, they're actually in discussions to be sold to one or more parties.

I'm not sure what's going on. There are a lot of moving pieces.

I'm not sure what's going on. There are a lot of moving pieces.

Luckily we have Getha Rong Anathon joining us. She's a media analyst, the media analyst for Bloomberg Intelligence.

Luckily we have Getha Rong Anathon joining us. She's a media analyst, the media analyst for Bloomberg Intelligence.

She's based in Princeton, New Jersey.

She's based in Princeton, New Jersey.

So, Githa, let's start with the potential ownership change here. There's lots of parties looking at Paramount. I guess the sky Dance, which is the media company owned by mister Ellison, the son of Larry Ellison.

So, Githa, let's start with the potential ownership change here. There's lots of parties looking at Paramount. I guess the sky Dance, which is the media company owned by mister Ellison, the son of Larry Ellison.

Of what is that? Where is he from?

Of what is that? Where is he from?

Well, yeah, Oracle, thank you? So where are we with those negotiations, Githa.

Well, yeah, Oracle, thank you? So where are we with those negotiations, Githa.

Yeah, good morning, Paul and Alex so we're in the take of those negotiations. There there is an exclusive negotiating window that Paramount agreed to with sky Dance that one actually expires this Friday. So obviously the ouster of Bob Bakish as CEO, who was vehemently opposed to the deal, seems to suggest to us that they really have something lined up and something's kind of going to go through pretty quickly.

Yeah, good morning, Paul and Alex so we're in the take of those negotiations. There there is an exclusive negotiating window that Paramount agreed to with sky Dance that one actually expires this Friday. So obviously the ouster of Bob Bakish as CEO, who was vehemently opposed to the deal, seems to suggest to us that they really have something lined up and something's kind of going to go through pretty quickly.

What do we make of the actual earnings? I mean, I was on air breaking the numbers yesterday, and like, we didn't even talk about the numbers. We just talked about the CEO replacement and the weird three CEO thing they got going on. What did we learn within the numbers?

What do we make of the actual earnings? I mean, I was on air breaking the numbers yesterday, and like, we didn't even talk about the numbers. We just talked about the CEO replacement and the weird three CEO thing they got going on. What did we learn within the numbers?

So the actual earnings by itself, Alex was not bad at all. I mean, there were definitely some encouraging elements. We saw advertising hold up really well, but again one could argue that core advertising is still challenged. The reason that they reported the seventeen percent increase in advertising revenue in the first quarter was really all driven by the Super Bowl telecast that said, I mean, you know, if you kind of looked at their streaming business, we did see a pretty good momentum there in terms of subscriber numbers. You know, we did see some progress on a profitability, which is not not to say that it's actually profitable, just that the losses were a little bit better than what we were expecting. But overall, I mean, this is right now, as Paul kind of pointed out, this is peak uncertainty at paramount. Right now. We don't know what's going on with ownership. We don't know what's going on with leadership, we don't know what's going on with strategic direction. So it's all up in the air.

So the actual earnings by itself, Alex was not bad at all. I mean, there were definitely some encouraging elements. We saw advertising hold up really well, but again one could argue that core advertising is still challenged. The reason that they reported the seventeen percent increase in advertising revenue in the first quarter was really all driven by the Super Bowl telecast that said, I mean, you know, if you kind of looked at their streaming business, we did see a pretty good momentum there in terms of subscriber numbers. You know, we did see some progress on a profitability, which is not not to say that it's actually profitable, just that the losses were a little bit better than what we were expecting. But overall, I mean, this is right now, as Paul kind of pointed out, this is peak uncertainty at paramount. Right now. We don't know what's going on with ownership. We don't know what's going on with leadership, we don't know what's going on with strategic direction. So it's all up in the air.

So, Gita, I guess one of the big big questions on any change of ownership is what are they going to pay for share of the buyer? And are they going to pay the same price for Sherry Redstone's controlling shares, the super voting shares. Are they going to pay the same for those shares as they will for the plain old shareholders shares?

So, Gita, I guess one of the big big questions on any change of ownership is what are they going to pay for share of the buyer? And are they going to pay the same price for Sherry Redstone's controlling shares, the super voting shares. Are they going to pay the same for those shares as they will for the plain old shareholders shares?

So how's that work?

So how's that work?

Yeah, they're not, Paul, And that's kind of been the whole bone of contention. Right, So, the whole sky Dance proposal is kind of this very convoluted offer. It's this two step proposal where they basically pay out Sherry her interest in Paramount is worth something like about eight hundred, eight hundred and fifty million. They're going to pay her upwards of about two billion dollars, so she's getting a nice pocket of change there, but it's basically diluting everybody else, and that's why you have all of this shareholder consternation. Of course, Guy Dance is kind of addressing that. Now you know, they have sweetened the bid a little bit. They've thrown in about a three billion dollar cash infusion to pay down debt to buy back stock, but I'm not sure if that's going to be enough.

Yeah, they're not, Paul, And that's kind of been the whole bone of contention. Right, So, the whole sky Dance proposal is kind of this very convoluted offer. It's this two step proposal where they basically pay out Sherry her interest in Paramount is worth something like about eight hundred, eight hundred and fifty million. They're going to pay her upwards of about two billion dollars, so she's getting a nice pocket of change there, but it's basically diluting everybody else, and that's why you have all of this shareholder consternation. Of course, Guy Dance is kind of addressing that. Now you know, they have sweetened the bid a little bit. They've thrown in about a three billion dollar cash infusion to pay down debt to buy back stock, but I'm not sure if that's going to be enough.

Do you feel like this is the best and final offer from Skydance as we get to that Friday deadline?

Do you feel like this is the best and final offer from Skydance as we get to that Friday deadline?

That's what they have said.

That's what they have said.

Yes, did we learn anything from the numbers yesterday that shows what a buyer should be paying for shares?

Yes, did we learn anything from the numbers yesterday that shows what a buyer should be paying for shares?

So we do have another concrete offer on the table, one that Sherry Redstone rejected. This was the offer from Apollo, which basically offered, you know, twelve billion dollars for the equity of the company versus what it's currently trading at, which is about eight billion, so you know, roughly about ninety to twenty dollars a share. So that's kind of where you know, the the Apollo deal stand. Of course, now there have been rumors that's they're partnering with Sony to again take that bid up a little bit. But you know, when we kind of did some of the parts analysis, you know, we think that this company is easily worth you know, upwards of twenty dollars a share.

So we do have another concrete offer on the table, one that Sherry Redstone rejected. This was the offer from Apollo, which basically offered, you know, twelve billion dollars for the equity of the company versus what it's currently trading at, which is about eight billion, so you know, roughly about ninety to twenty dollars a share. So that's kind of where you know, the the Apollo deal stand. Of course, now there have been rumors that's they're partnering with Sony to again take that bid up a little bit. But you know, when we kind of did some of the parts analysis, you know, we think that this company is easily worth you know, upwards of twenty dollars a share.

Yep, I've seen folks.

Yep, I've seen folks.

If you want to check out that research analysis, you can go to Bigo in the terminal and search for Geetha's work. They did a lot of evaluation work on paramount. A lot of investors are looking at that work as well. So getha Friday is I guess one kind of date to keep in mind. But it just seems like with this dual class of stock and maybe different prices being paid for different classes of stock, this thing's gonna end up in court. It just feels like, what are most people thinking about this?

If you want to check out that research analysis, you can go to Bigo in the terminal and search for Geetha's work. They did a lot of evaluation work on paramount. A lot of investors are looking at that work as well. So getha Friday is I guess one kind of date to keep in mind. But it just seems like with this dual class of stock and maybe different prices being paid for different classes of stock, this thing's gonna end up in court. It just feels like, what are most people thinking about this?

I think it definitely that there is a very very high property of litigation. I mean it's not probably, it's almost a certainty. At this point. Everybody has said all all the big shareholders, including Mario Gabelli, has said that they will definitely litigate if Sherry Redstone actually goes through with this deal, a deal which does not treat all shareholders equally. And this isn't something new, Paul with paramount. I mean, we've seen this litigation stuff happen over and over again. But it definitely is a huge risk and it's going to be interesting to see what Sony and Apollo kind of come up with. In the meantime, before I.

I think it definitely that there is a very very high property of litigation. I mean it's not probably, it's almost a certainty. At this point. Everybody has said all all the big shareholders, including Mario Gabelli, has said that they will definitely litigate if Sherry Redstone actually goes through with this deal, a deal which does not treat all shareholders equally. And this isn't something new, Paul with paramount. I mean, we've seen this litigation stuff happen over and over again. But it definitely is a huge risk and it's going to be interesting to see what Sony and Apollo kind of come up with. In the meantime, before I.

Let you go, Warner Brothers Discovery is down like eight percent.

Let you go, Warner Brothers Discovery is down like eight percent.

Why Why because no NBA. So their NBA rights are actually being negotiated right now. They're currently paying about one point two billion. Rumor is that NBC, which is owned by Comcast, is kind of swooping in ready to pay about two and a half billion dollars to the NBA and snatching away the rights from from TNT. That's where you know, Warner Brothers owns TNT. That's where they show the NBA games. And remember NBA, TNT is kind of the anchor to the Warner Brothers TV portfolio, and the NBA is the anchor to the TN to the TNT network. So not having that is really going to hurt them. It's hurting them as you can see in the stock price.

Why Why because no NBA. So their NBA rights are actually being negotiated right now. They're currently paying about one point two billion. Rumor is that NBC, which is owned by Comcast, is kind of swooping in ready to pay about two and a half billion dollars to the NBA and snatching away the rights from from TNT. That's where you know, Warner Brothers owns TNT. That's where they show the NBA games. And remember NBA, TNT is kind of the anchor to the Warner Brothers TV portfolio, and the NBA is the anchor to the TN to the TNT network. So not having that is really going to hurt them. It's hurting them as you can see in the stock price.

Today, turnover, speak of turnover and CEOs. How about David Zaslov the yea of Warner Brothers Discovery here? I mean the stocks down thirty four percent this year, down almost fifty percent over the last year. Holy can John alone cannot be happy with what's going on here? What's the thinking about Warner Brothers Discovery here?

Today, turnover, speak of turnover and CEOs. How about David Zaslov the yea of Warner Brothers Discovery here? I mean the stocks down thirty four percent this year, down almost fifty percent over the last year. Holy can John alone cannot be happy with what's going on here? What's the thinking about Warner Brothers Discovery here?

Hard to say, Paul. I mean, the whole story here was supposed to be synergies, which I think they've done a pretty good job on. But what's really kind of been out of their control has been the TV ad market, which has really you know, it's it's of course secularly challenged, and I think what made it even far, far worse was the Hollywood strikes, which just kind of resulted in no good content right now, and so they're kind of trying to work through all that. But you know, we've chatted before about this. The Ibadah number that they kind of showed everybody was fourteen billion. This year, they're going to go below ten billion. Add to that, you know, about forty billion dollars in debt, and it's really just a train wreck right now.

Hard to say, Paul. I mean, the whole story here was supposed to be synergies, which I think they've done a pretty good job on. But what's really kind of been out of their control has been the TV ad market, which has really you know, it's it's of course secularly challenged, and I think what made it even far, far worse was the Hollywood strikes, which just kind of resulted in no good content right now, and so they're kind of trying to work through all that. But you know, we've chatted before about this. The Ibadah number that they kind of showed everybody was fourteen billion. This year, they're going to go below ten billion. Add to that, you know, about forty billion dollars in debt, and it's really just a train wreck right now.

I Mean, I feel like that is well said you know, I said hot mess yesterday about Paramount, train wreck about Warner Brothers Discovery. It fit of sums it up.

I Mean, I feel like that is well said you know, I said hot mess yesterday about Paramount, train wreck about Warner Brothers Discovery. It fit of sums it up.

I think the life of a media analyso and media investor these days.

I think the life of a media analyso and media investor these days.

Yeah, it's so crazy to be. It is a place to be. And you know, you make we can make hey about Paramount what I think it's seventy one million subscribers, but then compare that to Netflix, right, forget it. Githa, thanks a lot. We appreciate you. You are the best. Keithan wrongana than she joins us. She is head of US media coverage for Bloomberg Intelligence. What's interesting too, I think, Paul, is that when you get to these companies, like the numbers in some ways then matter less. It's more about what the strategy is going to wind up being and who's going to be able to turn it around. Same thing for Warner Brothers Discovery and same thing for Paramount.

Yeah, it's so crazy to be. It is a place to be. And you know, you make we can make hey about Paramount what I think it's seventy one million subscribers, but then compare that to Netflix, right, forget it. Githa, thanks a lot. We appreciate you. You are the best. Keithan wrongana than she joins us. She is head of US media coverage for Bloomberg Intelligence. What's interesting too, I think, Paul, is that when you get to these companies, like the numbers in some ways then matter less. It's more about what the strategy is going to wind up being and who's going to be able to turn it around. Same thing for Warner Brothers Discovery and same thing for Paramount.

Yeah.

Yeah.

Absolutely, And it's been a very big challenge for the industry overall, you know, navigating that transition from the traditional distribution through cable to all.

Absolutely, And it's been a very big challenge for the industry overall, you know, navigating that transition from the traditional distribution through cable to all.

This streaming stuff.

This streaming stuff.

So I wan have to see how that plays out for both of these companies.

So I wan have to see how that plays out for both of these companies.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, Play Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, Play Bloomberg eleven thirty.

Smack dab in the middle of earnings and right now we're getting through the tech earnings and is a big week here next couple of days. Today after the close, Amazon sets report, and then Thursday, after the close, we'll hear from our good friends at Apple walk us through what are some of the key issues that we need to focus on that the market needs to focus on?

Smack dab in the middle of earnings and right now we're getting through the tech earnings and is a big week here next couple of days. Today after the close, Amazon sets report, and then Thursday, after the close, we'll hear from our good friends at Apple walk us through what are some of the key issues that we need to focus on that the market needs to focus on?

Is Gene Monster.

Is Gene Monster.

Gen Munster is the managing partner co founder of deep Water Asset Manager. He's been covering Silicon Valley for decades. He is absolutely a go to voice and we appreciate getting a few minutes of his time. Hey, Geene, let's start with Amazon. I guess it's all about the cloud, isn't it.

Gen Munster is the managing partner co founder of deep Water Asset Manager. He's been covering Silicon Valley for decades. He is absolutely a go to voice and we appreciate getting a few minutes of his time. Hey, Geene, let's start with Amazon. I guess it's all about the cloud, isn't it.

Indeed, Paul, the cloud AWS is expected to continue to accelerate, So just taking a couple steps back, AWS growth over the past year and a half has been declining from high twenty percent and then at bottomed at twelve percent in the September quarter, bumped up to thirteen percent year of year growth in December, and expectations in print are for fifteen percent year ofver year growth in March. I mentioned and emphasize the word print there because the whisper numbers have been stoked after Amazon, after Azure and Google Cloud reported last week, and of course they had upside to their cloud numbers. I suspect that the whisper number is sixteen percent plus. In other words, if they print to sixteen percent growth up from thirteen in December, that may be viewed as a slight disappointment. A couple other just quick, really important parts related to the whole AWS conation. As a reminder, this is seventeen percent of Amazon's revenue and about sixty seven percent this is for calendar twenty three of their earnings. So it punches above its weight when it comes to profitability, and that's why investors are so hyper focused. And when you put all this together, Paul, what you have is a picture where AWS with leading market share continues to lose market share. I mentioned that sixteen percent whisper number if they deliver on that they're growing at half the rate that Azure and Google Cloud are growing. So this dynamic is it will post an improvement undoubtedly in AWS growth, but still the broader picture around the future of AWS, not the future, but the future market share is still in question as Google and Microsoft are really benefiting from how much they've been invested in AI and that has been powering their cloud business faster than Amazon.

Indeed, Paul, the cloud AWS is expected to continue to accelerate, So just taking a couple steps back, AWS growth over the past year and a half has been declining from high twenty percent and then at bottomed at twelve percent in the September quarter, bumped up to thirteen percent year of year growth in December, and expectations in print are for fifteen percent year ofver year growth in March. I mentioned and emphasize the word print there because the whisper numbers have been stoked after Amazon, after Azure and Google Cloud reported last week, and of course they had upside to their cloud numbers. I suspect that the whisper number is sixteen percent plus. In other words, if they print to sixteen percent growth up from thirteen in December, that may be viewed as a slight disappointment. A couple other just quick, really important parts related to the whole AWS conation. As a reminder, this is seventeen percent of Amazon's revenue and about sixty seven percent this is for calendar twenty three of their earnings. So it punches above its weight when it comes to profitability, and that's why investors are so hyper focused. And when you put all this together, Paul, what you have is a picture where AWS with leading market share continues to lose market share. I mentioned that sixteen percent whisper number if they deliver on that they're growing at half the rate that Azure and Google Cloud are growing. So this dynamic is it will post an improvement undoubtedly in AWS growth, but still the broader picture around the future of AWS, not the future, but the future market share is still in question as Google and Microsoft are really benefiting from how much they've been invested in AI and that has been powering their cloud business faster than Amazon.

Folks, I've seen this time and time again. Gene Mounster speaks. People take notes.

Folks, I've seen this time and time again. Gene Mounster speaks. People take notes.

Alex Steel has been writing furiously over here listening to Gene.

Alex Steel has been writing furiously over here listening to Gene.

It's so true. I'm like, oh, I got to break Amazon after the bell, So let me really pay attention here. So if you go back to the AWS growth, why why did we see that decline in growth and how do we expect them at some point to get back up to twenty and then grow from there or is it now going to be in some kind of range.

It's so true. I'm like, oh, I got to break Amazon after the bell, So let me really pay attention here. So if you go back to the AWS growth, why why did we see that decline in growth and how do we expect them at some point to get back up to twenty and then grow from there or is it now going to be in some kind of range.

So during that period of call it high twenties to that twelve percent, Azure showed some also deceleration from mid thirties down to high twenties, Google Cloud from around thirty down to low twenties, and so it was just a kind of a broader corporate pullback in cloud spending I think had part of it, but I think the other part was this piece around what's going on on the model front, and specifically of course with Azure they've got the integration with open AI models, with Google their own deep Mind and what they've done with Gemini and building those models into their cloud offerings. And when it comes to Amazon, they do have an offering. It is related to anthropic. They also host a lot of the kind of open source models like Lama, But I think that that has played into it. So Alex, to put it in a perspective, I think that half of the decline has been that we saw earlier was because of the broader market corporate spending, and I think half is because I think that there are AI strategy well, it is forward thinking, still lacks some of the punch that Azure and Google Cloud is integrating.

So during that period of call it high twenties to that twelve percent, Azure showed some also deceleration from mid thirties down to high twenties, Google Cloud from around thirty down to low twenties, and so it was just a kind of a broader corporate pullback in cloud spending I think had part of it, but I think the other part was this piece around what's going on on the model front, and specifically of course with Azure they've got the integration with open AI models, with Google their own deep Mind and what they've done with Gemini and building those models into their cloud offerings. And when it comes to Amazon, they do have an offering. It is related to anthropic. They also host a lot of the kind of open source models like Lama, But I think that that has played into it. So Alex, to put it in a perspective, I think that half of the decline has been that we saw earlier was because of the broader market corporate spending, and I think half is because I think that there are AI strategy well, it is forward thinking, still lacks some of the punch that Azure and Google Cloud is integrating.

So ging this company has certainly evolved over the years that at least you and I have covered it. How do investors view this company right now? Like how do they think about the retail business? And they just kind of put us a relatively low multiple on it and kind of really just focus.

So ging this company has certainly evolved over the years that at least you and I have covered it. How do investors view this company right now? Like how do they think about the retail business? And they just kind of put us a relatively low multiple on it and kind of really just focus.

On the cloud.

On the cloud.

Tonight, it is all about the cloud. I think that is that the central takeaway. I think that beyond this, we are seeing an improvement in some of the metrics around the retail business. And this, of course is the vast majority of their sales and the profitability is starting to move in the right direction, and part of that is because of how they've improved the logistics. Some of those have been more recently related to AI in terms of the planning. Some of it's just been good old fashioned algorithms that make their delivery more efficient. But the retail opportunity I see as kind of a changing of the guard and the Amazon story. Over the next couple of years, I think investors will progressively focus more on that business. I mentioned today almost seventy percent of Amazon's earnings come from AWS, and I think that number is going to continue to decline going forward because I think the retail business is going to improve, and the substance of the improvement is better efficiency at logistics. Of course, is a real this is real AI, it's not hype, it's real. And second is related to robotics. It's something that they've done this Kiva acquisition a long time ago. That's the start to it. But they have a profound opportunity in terms of integrating robotics over the next decade into logistics, which would have a positive impact on earning. So I do think that we will see the baton switch over the next couple of years in terms of the pressure point. We will be talking about AWS, but it won't be the center focus all right, So I.

Tonight, it is all about the cloud. I think that is that the central takeaway. I think that beyond this, we are seeing an improvement in some of the metrics around the retail business. And this, of course is the vast majority of their sales and the profitability is starting to move in the right direction, and part of that is because of how they've improved the logistics. Some of those have been more recently related to AI in terms of the planning. Some of it's just been good old fashioned algorithms that make their delivery more efficient. But the retail opportunity I see as kind of a changing of the guard and the Amazon story. Over the next couple of years, I think investors will progressively focus more on that business. I mentioned today almost seventy percent of Amazon's earnings come from AWS, and I think that number is going to continue to decline going forward because I think the retail business is going to improve, and the substance of the improvement is better efficiency at logistics. Of course, is a real this is real AI, it's not hype, it's real. And second is related to robotics. It's something that they've done this Kiva acquisition a long time ago. That's the start to it. But they have a profound opportunity in terms of integrating robotics over the next decade into logistics, which would have a positive impact on earning. So I do think that we will see the baton switch over the next couple of years in terms of the pressure point. We will be talking about AWS, but it won't be the center focus all right, So I.

Feel like I'm relatively prepped now to break those earnings. So can you prep us for Apple on Thursday? For sure?

Feel like I'm relatively prepped now to break those earnings. So can you prep us for Apple on Thursday? For sure?

I think Apple is going to be much more exciting in terms of kind of what the investor reaction is going to be because the setup we have is pretty well known that the businesses has been slow. The expectations. Their guidance was for revenue to be down five percent year every year, and that's generally where analysts are at the iPhone segment. Analysts are expecting it to be down ten percent, and if you take a step back over the last few years, it's continued to be flat to downsh the iPhone and regular China is a weakness. I just want to call out that's one of the key metrics that investors are going to be focusing on. In September. The China business was down three percent, in December down ten percent, and I believe that it's going to be down caught around thirteen to fifteen percent in the March quarter. So continued softness in China that's about twenty percent of Apple's overall redness. That's going to be one of the themes. The second theme, of course, is going to be related to when the bottom of the cycle happens, and I think they will give softish guidance for the June quarter, but the stock may actually react positive to that because once they've got that negative guidance in then investors can start to look to the back half of the year. Of course, the new iPhone cycle comes, that will probably have some AI branding around it, and that we should start to see some reacceleration. So the irony of this print is the weak March quarter, punky guidance for June might actually kind of mark the bottom. One last piece, of course, I buried the lead related to AI. This we're going to hear a lot more in the beginning June at their developer conference, and I think that there is a piece around this on Capex, of course, that was a hot topic last week. Apple has yet to talk about CAPEX, any big uptake in Capex. They stand alone amongst big tech, and I think this is going to be a quarter where investors get some medicine when it comes to Apple and how they are going to be spending in CAPEX. If in fact, Apple wants to participate in AI, which sounds like they want to, it's going to require a significant uptake in Capex, and that potentially could be at the cost of margins, a couple percent in margins. So that's the piece I'm bracing for is what their commentary on CAPEX is related to jenit of ai.

I think Apple is going to be much more exciting in terms of kind of what the investor reaction is going to be because the setup we have is pretty well known that the businesses has been slow. The expectations. Their guidance was for revenue to be down five percent year every year, and that's generally where analysts are at the iPhone segment. Analysts are expecting it to be down ten percent, and if you take a step back over the last few years, it's continued to be flat to downsh the iPhone and regular China is a weakness. I just want to call out that's one of the key metrics that investors are going to be focusing on. In September. The China business was down three percent, in December down ten percent, and I believe that it's going to be down caught around thirteen to fifteen percent in the March quarter. So continued softness in China that's about twenty percent of Apple's overall redness. That's going to be one of the themes. The second theme, of course, is going to be related to when the bottom of the cycle happens, and I think they will give softish guidance for the June quarter, but the stock may actually react positive to that because once they've got that negative guidance in then investors can start to look to the back half of the year. Of course, the new iPhone cycle comes, that will probably have some AI branding around it, and that we should start to see some reacceleration. So the irony of this print is the weak March quarter, punky guidance for June might actually kind of mark the bottom. One last piece, of course, I buried the lead related to AI. This we're going to hear a lot more in the beginning June at their developer conference, and I think that there is a piece around this on Capex, of course, that was a hot topic last week. Apple has yet to talk about CAPEX, any big uptake in Capex. They stand alone amongst big tech, and I think this is going to be a quarter where investors get some medicine when it comes to Apple and how they are going to be spending in CAPEX. If in fact, Apple wants to participate in AI, which sounds like they want to, it's going to require a significant uptake in Capex, and that potentially could be at the cost of margins, a couple percent in margins. So that's the piece I'm bracing for is what their commentary on CAPEX is related to jenit of ai.

Are you surprised, Gene that we haven't seen a more aggressive move on AI from Apple?

Are you surprised, Gene that we haven't seen a more aggressive move on AI from Apple?

Absolutely, I mean it's I mean there's silence today, it's more recently it's they've said more, but has been definiting at least in twenty twenty three. And I think that they've got a golden opportunity here. They have a brand around privacy. The current stage of AI that we're operating in is jenn of ai, where we prompt a model, it gets back, we can have a conversation. The next phase and this is it won't be products today with Apple, but I think ultimately where they're going to go is what's referred to as a gentic or agent or personalized day. You'll hear those terms interchanged, but this is the idea of AI actually completing a task for you instead of just responding in part to a conversation. And again, because I think what Apple does around privacy, I think they're going to have an invitation for consumers really to build some unique products around agentic AI down the road.

Absolutely, I mean it's I mean there's silence today, it's more recently it's they've said more, but has been definiting at least in twenty twenty three. And I think that they've got a golden opportunity here. They have a brand around privacy. The current stage of AI that we're operating in is jenn of ai, where we prompt a model, it gets back, we can have a conversation. The next phase and this is it won't be products today with Apple, but I think ultimately where they're going to go is what's referred to as a gentic or agent or personalized day. You'll hear those terms interchanged, but this is the idea of AI actually completing a task for you instead of just responding in part to a conversation. And again, because I think what Apple does around privacy, I think they're going to have an invitation for consumers really to build some unique products around agentic AI down the road.

All right, Gene, thanks so much for your time. Really appreciated.

All right, Gene, thanks so much for your time. Really appreciated.

Gene, Monster, managing partner, co founder of Deepwater Asset Management. Give us a preview here for Amazon tonight after close and Apple reporting the results Thursday.

Gene, Monster, managing partner, co founder of Deepwater Asset Management. Give us a preview here for Amazon tonight after close and Apple reporting the results Thursday.

After the close.

After the close.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon. Alexa'm our flagship New York station. Just say Alexa playing Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon. Alexa'm our flagship New York station. Just say Alexa playing Bloomberg eleven thirty.

To Alex Steele, I hear alongside Paul Sweeney. We are live Interactive Brokers Studio right here in Midtown Manhattan. This is Bloomberg Intelligence Radio. We cover all the news for you, all the top news for you with our amazing analysts worldwide. They cover about two thousand companies and one hundred and thirty industries. So let's get to one of them right now. Look at mcdonald' stock doing a whole lot of nothing. It was down earlier today it has slight miss on earnings per share and their comp sales, particularly international missed estimates. But the big news everyone seems so excited about is his biggest burger thing. We're going to test it to try and spark some traffic growth right here, let's bring it, I mean, okay, just by two of them. Anyway, let's get more details on this with Michael Halen. He is a Bloomberg Intelligence senior restaurant and food service analyst, and he joins us. Now, okay, let's just kiss off the earnings before we get to this big burger thing. What was your biggest takeaway?

To Alex Steele, I hear alongside Paul Sweeney. We are live Interactive Brokers Studio right here in Midtown Manhattan. This is Bloomberg Intelligence Radio. We cover all the news for you, all the top news for you with our amazing analysts worldwide. They cover about two thousand companies and one hundred and thirty industries. So let's get to one of them right now. Look at mcdonald' stock doing a whole lot of nothing. It was down earlier today it has slight miss on earnings per share and their comp sales, particularly international missed estimates. But the big news everyone seems so excited about is his biggest burger thing. We're going to test it to try and spark some traffic growth right here, let's bring it, I mean, okay, just by two of them. Anyway, let's get more details on this with Michael Halen. He is a Bloomberg Intelligence senior restaurant and food service analyst, and he joins us. Now, okay, let's just kiss off the earnings before we get to this big burger thing. What was your biggest takeaway?

I'd say the biggest takeaway was, you know the fact that April's flat so far in the United States, that's trailing the industry level. You know the industry data that we get so and also you know, restaurant brands reported this morning, and Burger King showed an acceleration in the US and their US numbers.

I'd say the biggest takeaway was, you know the fact that April's flat so far in the United States, that's trailing the industry level. You know the industry data that we get so and also you know, restaurant brands reported this morning, and Burger King showed an acceleration in the US and their US numbers.

So I would say that was the biggest surprise.

So I would say that was the biggest surprise.

You know.

You know.

McDonald's still on a five year trend, is vastly outperforming Burger King almost the other quick service names, but there seems.

McDonald's still on a five year trend, is vastly outperforming Burger King almost the other quick service names, but there seems.

To be some slowing.

To be some slowing.

If I was to guess, some of that bad press around the eighteen dollars big mac meal in some markets, you know, could be hurting because we are seeing US consumers really push back against price increases right now, and they're they're being more picky about where they spend their money.

If I was to guess, some of that bad press around the eighteen dollars big mac meal in some markets, you know, could be hurting because we are seeing US consumers really push back against price increases right now, and they're they're being more picky about where they spend their money.

Mike, I see. Just in the Bloomberg reporting here.

Mike, I see. Just in the Bloomberg reporting here.

Executives have also said that low income consumers in the US, which is an important part of the company's customer base, are pulling back. Is that Does that mean we're going to see more promotions which might be put freshl on the margins.

Executives have also said that low income consumers in the US, which is an important part of the company's customer base, are pulling back. Is that Does that mean we're going to see more promotions which might be put freshl on the margins.

Yeah, we see. Yeah.

Yeah, we see. Yeah.

McDonald's has come out and said they're going to focus more on their value menu. They're going to continue to offer promotions, a lot of them.

McDonald's has come out and said they're going to focus more on their value menu. They're going to continue to offer promotions, a lot of them.

Through the apps. So it looks like a full on value war is here.

Through the apps. So it looks like a full on value war is here.

I mean, Burger King said they're going to be a little bit more careful than they've been in the past with their price increases because you know, they've had some increases over.

I mean, Burger King said they're going to be a little bit more careful than they've been in the past with their price increases because you know, they've had some increases over.

The last five years or so.

The last five years or so.

I'm sorry, so Burger things to be a little bit more careful with their discounting because in the last five years or so they've gotten too aggressive and hurt franchising margins.

I'm sorry, so Burger things to be a little bit more careful with their discounting because in the last five years or so they've gotten too aggressive and hurt franchising margins.

So they kind of hoopooed that a little bit.

So they kind of hoopooed that a little bit.

But we think a full blown value war is here and it's on the table for twenty twenty four.

But we think a full blown value war is here and it's on the table for twenty twenty four.

So does the value war take into account a Bigger Burger? Is that the deal?

So does the value war take into account a Bigger Burger? Is that the deal?

Well? Value?

Well? Value?

You know, it's measured in a couple of ways. It's not just the price, but it's what you get for the price, right, And so you know, I'm sure McDonald's has done their legwork and they have some customer feedback that says that they want some Bigger Burgers on their menu, and so that's going to be interesting. They said they're going to start testing it in the second half of this year, so it may not hit the United States for quite some time.

You know, it's measured in a couple of ways. It's not just the price, but it's what you get for the price, right, And so you know, I'm sure McDonald's has done their legwork and they have some customer feedback that says that they want some Bigger Burgers on their menu, and so that's going to be interesting. They said they're going to start testing it in the second half of this year, so it may not hit the United States for quite some time.

But yeah, there's a couple of ways to measure value.

But yeah, there's a couple of ways to measure value.

Hey, Mike, what are the McDonald's of the world, and you know, the other restaurant companies you talked to, what are they saying about these GLP one drugs? Are they really going to impact their business?

Hey, Mike, what are the McDonald's of the world, and you know, the other restaurant companies you talked to, what are they saying about these GLP one drugs? Are they really going to impact their business?

You know, I don't think there's too much worry about that anymore. I know that was a big thing last summer and into the fall, and it really impacted the prices of some of these quick service restaurant chain stocks, especially McDonald's. But you know, I've seen a lot of different reports out there, and you know, the amount of people on these drugs ranges from you know, seven to twelve or maybe fifteen percent bit best case if once they get to like maybe a pill form instead of a shot, you know, and we don't know about long term side effects from some of these drugs, so I think initially there was some concern, but over time, McDonald's and these other chains, they're going to figure out how to make a seven to twelve percent smaller cheeseburger. Right They're getting smaller anyway, because beef prices are going they're going up, and you know, there's a historical situation in the cattle market right now, and so beef prices are going to continue to stay elevated in here for a couple of years, and so chains are already starting to try to, you know, solve for some of these problems, you know, ahead of broader adoption.

You know, I don't think there's too much worry about that anymore. I know that was a big thing last summer and into the fall, and it really impacted the prices of some of these quick service restaurant chain stocks, especially McDonald's. But you know, I've seen a lot of different reports out there, and you know, the amount of people on these drugs ranges from you know, seven to twelve or maybe fifteen percent bit best case if once they get to like maybe a pill form instead of a shot, you know, and we don't know about long term side effects from some of these drugs, so I think initially there was some concern, but over time, McDonald's and these other chains, they're going to figure out how to make a seven to twelve percent smaller cheeseburger. Right They're getting smaller anyway, because beef prices are going they're going up, and you know, there's a historical situation in the cattle market right now, and so beef prices are going to continue to stay elevated in here for a couple of years, and so chains are already starting to try to, you know, solve for some of these problems, you know, ahead of broader adoption.

Yeah, I mean you have to think that translation is going to hit in many different ways. But before we let you go, we have about a minute left. So who wins the value war right now? Based on what you've seen.