Mike u. S. Stocks to some degree have brushed off the tweets from President Trump this morning criticizing china. Soybeans fell to a seven low today. This is after President Trump criticized china after criticized china for not increasing American Farm imports. Trade war worries have people away from soybean market. Open interest in soybean contracts have fallen to eight fouryear low. Wheatcotton, some contracts all off. Forecasts for cooler weather in midwest also plan on playing on prices. Benign weather should help crops behind in development after a rainsoaked season. Ag commodities are a little bit more pressure, but we do have commodities that double as currencies, like silver, up for the 2nd straight day. It is up ahead of the fed meeting as they aresing also piling into more options. The volumes of calls and puts surged this month. 2010,ghest since november and a sign of greater speculative interest in that market. Silver comes more into this picture as silver futures head for the biggest monthly gain the year and silverbacked etfs also surged. They are betting ketchup reading it will betting it will catch up to the gates of gold gains of gold. It many looked at times, the 10 year yield over the last year. Last year, staying around 3 . The volatility of the Fourth Quarter driving yields down. We see the 10 year yield bouncing off the bottom of this channel. This suggests what our guest was just saying, that a rate cut is priced in. Tot can powell possibly say stimulate markets more . We could see it moving to the top of the trend channel. The last time we went above the moving average, there was greater than 50 basis points. All of this suggests that we could see rates rise after the fed. Caroline breaking news on the numbers coming out of Biotech Company amgen. Second quarter adjusted earnings per share, 3. 97. The estimate was 3. 59. They are saying earningspershare will be 13. 75 to 14. 30. To 22. 9ill be 22. 4 billion. Romaine electronic arts, the videogame company, their First Quarter revenue and also eps coming in above estimates. They are reaffirming their forecast for the full year and giving Second Quarter estimates that are coming in slightly below what some analysts are expecting. There fullyear forecast, they are standing by. Caroline still with us is ed and luke. Ed, earnings season, how are you taking it . The Analyst Community and companies have done a good job of they normally do, which is lowering expectations. Most companies have beaten expectations well over 70 . The real question from here is focusing the top line growth, which has been ok, around 4 . We are really keyed on the revenue number we would like to see that get a little bit higher. Thee start to focus more on 2020 earnings numbers, are we going to get that acceleration back into the double digits . As far as this earnings season, it has not been terribly exciting that a pretty good earnings season. Romaine you look at the way people are trading in the market, not just a shortterm over the longerterm, say past 2019, would you say they are betting on fed support to propel this market further, or do you think there is a little bit more optimism that we will see a rebound in the Earnings Growth we had in the First Quarter . Luke so far, i dont think the 2020 estimates are worth the digital think they are printed on. Instance, and a lot of these involve chopping your eps forecast while raising your price target. This just speaks to the idea that strategists are going in on the idea that multiples are being supported. So far, that is the set up. Caroline talking of price targets, romaine was pointing about was pointing out that goldman might are you expecting people to admit that the s p 500 can maintain these record levels . Luke i think you will see a continuation of upward revisions of yearend targets. It is about the fed. At the beginning of the year, if you were close to 3000, people thought you were crazy. Now, above 3000, people wonder if you will raise. Romaine if Joe Weisenthal were here, which hes not, hes at home on twitter talking about joy, hers and almond would look ahead to friday, the jobs report. The new Economic Data we are going to get through the month, do you think that is going to change peoples mindset to how this market is going . I think the wednesday path if it was just 25 basis points, i think this is a meeting the fed would like to say, no price cut no press conference, this is just 25 points. To the extent that he strongly hints that more is coming, the markets will be able to latch on the data will, take on more meeting the communications will kind of inform how much we have to Pay Attention to the data. Caroline im sure the fed remains ever datadependent. We thank lou kawa and ed clissold. Now, lets give a quick check on the rest of the earnings and repeat what we heard. Amgen Second Quarter earningspershare beating every analyst out there. 3. 97. They are refining fullyear outlook. Shares rise after hours. Gilead, another Biotech Company, reporting adjusted earningspershare Second Quarter that the estimate. However, they are down a little bit. That is perhaps just increasing it slightly, so we will have to get to the bottom of what investors are searching through. Romaine some warm earnings some more earnings out. A global Snack Company beating estimates on Second Quarter revenue. It is also raising its fullyear outlook. Shares up about 4 after hours. There organic revenue, the number that a lot of people Pay Attention to, up about 4. 6 . Estimate was 3. 5 . Caroline your favorite chocolate bar. ,omaine i like the trident thats the same company, right . Whatd you miss . Is next where we will look at apples quarterly report. This is bloomberg. York,ne live from new im caroline hyde. Romaine im romaine bostick. Joe weisenthal is off today. Caroline markets closed muted but lower. S p 500 off by 0. 25 . Piecing together another day full of earnings with apple taking the spotlight later this hour. The world on edge as the fed appears to respond to the first rate cut in a decade. Joe bidens democratic rivals are coming for him. We are debt we are live in detroit. Lets begin with some of these earnings. Biotech front and center with amgen beating earningspershare. It seems they are refining their fullyear outlook as well, Second Quarter revenue beating expectations. Up a percentage point, gilead sciences, they managed to beat in terms of their numbers. Romaine electronic arts, the videogame company, their First Quarter numbers coming in above estimate. Second quarter forecast is going to come in below estimates. However, they are standing by their fullyear forecast. A lot of concern here about apex legends not living up to the hype. Flow, nowr free cash sees about 5 growth. To 5 . Sly a range of 3 lets turn to the big eating of the week, the fomc. They are going to decide tomorrow on interest rates. Economists predicting a quarterpoint rate cut. Economists say that is not enough. They say a small rate cut will do very little to counteract actions by europe and china. 25 basis points, is that going to be enough to keep this economy going . I think whether they cut or not, the economy will continue to grow at a decent pace. The fed is cutting rates just to respond to Market Expectations. Everyone is expected the rate cut and they have to follow at this point. Last year, tight and policy probably a little bit too hard. This is a modest course correction rather than an attempt to revive economic growth. Attempt what about an to revive inflation expectations. Yelena i dont think that would walk. The work. I dont think that will work. This morning, we got the data on personal consumption and we saw has core pce deflator picked up a little bit. It is still very little it is still below 2 but there seems to be some hope that it is off the trough. Romaine pretty much everybody i have spoken to in the market says the actual number, the actual cuts, is a little bit less relevant than what powell says the press conference, how he defends the cuts, how he posits the future for the fed. Task tomorrows will be to persuade the markets that the fed is not engaging in a full easing cycle. They might do one or a couple of rate cuts and he needs to tell the market that is going to happen. So, right now, the markets are expecting more than that. Fedn economic outlook, the does not need to do more. Caroline will you want to tame all the Market Expectations in one fell swoop . He hasnt had great performances in his last press conferences. Yelena it is a great opportunity now with the economy doing just fine, the data, consumer confidence. It is a great opportunity for him to do it right now to persuade the markets that the fed may not need the full easing cycle, rather than wait until took on and be like, we two rate cuts. Ofaine are we at risk creating a little bit of an asset bubble. There is concern that this was directed less at the economy, more at the market. Price inflation in the stock get and bond market stock market and bond market right now. Yelena it is always easy for the fed to type Monetary Policy two tighten Monetary Policy. Romaine can they do that under trump . Yelena i think they would do it if needed. A couple of rate cuts, weakening tradeweighted dollar. Caroline always great for your insights. We will have coverage of the fed decision tomorrow starting at 2 00 p. M. Eastern. Coming up, progressive showdown. The second round of democratic debates kick off tonight and the stakes have only gotten higher. To detroit for the latest. This is bloomberg. Romaine breaking news. Amd out with earnings. A big chipmaker and secondbest performing stop performing stock in the s p 500. 1. 53 billion, slightly above estimates of 1. 52 billion. Under the hood, if you look at the computer and graphics revenue, as well as some of the other numbers, they might be looking for something a little bit stronger. You are seeing the shares back off by about 7 after hours. Caroline time for a look at what stories are trending across the bloomberg universe. Terminal users are reading about the uss gerald ford. Only two out of 11 elevators installed needed for the munitions. It is another setback for contractor huntington angles, as well as the navy. They said they planned on testing all the elevators this month. A story on a coal plant in boston that may be reborn in a different form. Sere are plans to put in posh tores, apartments, space for events, and a promenade. The projects first stage may be complete in 2022. Tictoc on twitter is reporting that nhl commissioner Roger Goodell is headed to court to talk about the infamous nocall that help the rams beat the saints in the nfc championship. The lawyer is seeking damages that he will donate to charity. Other lawsuits about the nocall have made it to federal court and have failed. Todays another one of top stories, the stage being set in detroit for the second round of the u. S. Democratic debate. Night one will feature the first matchup. Kevin cirilli joins us live from detroit. Weve got elizabeth warren, Bernie Sanders, Kamala Harris. Who has the most to gain from tonights debate. On elizabethill be warren and Bernie Sanders as they will be standing sidebyside and pitching themselves to the same part of the party, the progressive base. Senator sanders has called himself a democraticsocialist but senator warren says she is a capitalist who believes in rules and wants to see structural changes. She brought out a wall street plan that calls for reimposing glasssteagall. This all comes at a time when the intensity of the democratic primary. These candidates need a breakout moment to qualify for debates in the fall. Caroline that the cap moment last time was Kamala Harris versus joe biden. Are we expecting anything like that this time . The first 2020 debate was lacking in fireworks. Tonight, you will see the south bend mayor of indiana, buttigieg, he will try to have a breakout moment tonight along with former congressman beto orourke who has struggled to take hold in the polls. Tomorrow night, once again it will be that showdown between Vice President joe biden and senator, harris. But also be on the lookout for julian castro, former congressman and hud secretary, as well as cory booker, democrat from new jersey. I have been struck by the back between the poker campaign bidenoker campaign, the campaign. Tonight will be very much on who will make that appeal. Romaine this was a huge loss to Hillary Clinton and the democrats. We know trump has been doing well in michigan and some of these rust belt states. What will the democrats have to prove to some of their Party Faithful and those on the right. Point, what they are talking about in washington. I will democrats flip back states like how will democrats flip back states like ohio, michigan, pennsylvania . Joe biden says he can make the page most effectively but senator Bernie Sanders says back in the 2016 president ial cycle, he defeated Hillary Clinton in this very state during the democratic primary. City, this istor justcial battleground not in the primary season but in a general election matchup. Romaine before we go to break, amd, we want to get you up on that. The reported earnings. Shares down. Forecast for the quarter coming in a little bit less than what analysts had expected. 1. 75 ilion dollars. The estimate was for 1. 94 billion. 1. 94 caroline when we come back, apples earnings report. This is bloomberg. Caroline we are moments away from apples Second Quarter. Fiscal numbers already breaking for the technology giant. We are seeing the forecast for fourthquarter revenue, the midpoint above analyst estimates. Revenue, 53. 8 dollar. Llars billion shares coming in line, 10 billion overall. Shares rising after hours. Romaine the average estimate was for 61. The high end of that ranges well above that estimate. For the thirdenue quarter came in strong. The estimate was for 26. 54 billion. Caroline this is the first time we have seen since 2012 that iphone revenue is less than half of total revenue. They are more reliant on digital, more reliant on wearables. Mored we get some expertise . Romaine weve got john butler who has been sitting here patiently while we ayp up while we yap about it. John these results look good to be. Like you, i was watching the forecast. I wanted to make sure things look good for next quarter. Me, the guide looks good. They could actually grow. I think when people missed here was that last year was this incredibly strong year for apple. They had a strong sales cycle. Quarter in and quarter out, they highbooking high teas iphone when in the where theyike this could potentially grow even low single digits, that to me is good news. Im looking beyond this year. It is going to be a tough year only year really, as we get into next year and the introduction , i think there is a lot more good news coming down the road. Caroline im looking how china did overall in terms of their numbers. Billionchina saw 9 worth of sales overall, down from 9. 5 billion we had seen in the previous year. Clearly still a slight concern. Are we expecting to see much in terms of trade tariffs . Key for apple, a big number and a key region for them. They are navigating a tough year because china was also a very strong grower last year. They are up against tough comps and they have the trade war to worry about. Tablek them coming to the takes a little pressure off the risk that the iphone gets hit with tariffs here. Growth, ifreturn to we get a trade deal, by next year. ,omaine we have dan ives executive director of research us by phone. S just going through the release real quickly, tim cook is quoted as saying that he really see exciting period with major launches across the platform. What do you see for this company that is maybe looking to keep the momentum going . Dan this quarter is a major step in the right direction not only in terms of stabilization with china but in terms of the forecast. The installed base is really the key to the value of apple going forward. This is a feather in the cap for the bulls. Caroline im looking at how they are crowing. Biggest june quarter ever, accelerating growth from wearables. Toically, they are trying talk down the iphone. Rua buyer and the fact that it is all about Services Going forward . The meat ands potatoes of the story. This 12 punch is really the key value, the key reason we think apple is a stock that makes new highs. 350 million iphones are coming up for upgrade in the next few months. The guidance for the next quarter, that is something that even the bulls are surprised they got it this strong. Romaine there has been a lot of talk about whether apple can really be considered the Growth Company that it once was, whether it is a value stock . This is still a company that delivers a ton of cash, a ton of sales. When you look at what tim cook has been able to extend since the passing of steve jobs, where do you see this Company Going as far as a Consumer Brand . More around services. It is going to be about services and content. That is really what they are trying to do with their streaming service. 900 million active iphones. It is about monetization of that installed base. If you look right now, iphone continues to be the rock of two broader despite many of our peers the rock of gibralter. Caroline it is interesting that we are seeing that apple is reporting a significant miss on the unit sales of about 3 billion yearoveryear decline. We know the Third Quarter will be exciting in terms of iphones, people extending along they have the iphone for. Is that a worry . It was a miss relative to expectations, but i think the numbers and particularly the guidance speaks for itself. I think any concern about apple getting derailed by weakness in the iphone, at least in the near term, is kind of debunked by this guidance. It really is good guidance. As dan was saying, it really is shifting now to the services story. Leverage thely iphones by coming out with new services. What i am watching for the fall are the new content services, the original productions in apple tv plus, and that aggregator as they call it, apple channels, where you will be able to buy hbo, showtime, other paid services, and get them all on a single app. Romaine lets talk a little bit more about apple plus and some of the Services Content they are working on. They are introducing some of this content and these products into a field that has gotten pretty crowded. In terms of streaming, you getting maxed out, the average has 23 subscriptions. Apple thinks that is 100 Million Consumers they can get onto that platform in the next few years. Really, it is a Distribution Platform. That is part of cook and cupertinos focus, a Distribution Platform of services and a better monetized installed base. Today, we think the installed base is only about 10 or 15 penetrated on services. Besides just guidance, this will go up and down with china in terms of apple. Given all the noise, that is really the headline here. I am also interested in what you might think would be returned to investors longerterm. The ceo crowing about how they returned to shareholders in the quarter. Do you expect more money to come to the investor base, or do you . Xpect more to be reinvested on m a. Xpect more they will continue to do a buyback. This is a company that is going to do more m and a going forward. The defensive to the offensive. That is what you are starting to see this quarter, going into a massive 5g cycle next year. John i think dan makes a good point. They have a lot of cash, they can make acquisitions. I always ask, do they want to build or buy in certain verticals . Im thinking content, theres a lot out there for sale that can really help them scale up. Romaine ok. John, you will stick with us a little bit longer. Dan, thank you for your time today. Now just a quick check on apple shares, up 2 here in after hours. Around that 2 15 mark. Investors are embracing this somewhat. For a stock this size, that is not a bad move. They rallied yesterday in terms of anticipation of these numbers but the Fourth Quarter forecast is impressive. Romaine bloomberg subscribers can follow this on our tliv blog. For our viewers here on bloomberg tv, we will be back with more on apples results. This is bloomberg. Romaine we just want to recap some of the other earnings. Forecastting earnings, that came in a little bit less than what investors were expecting. Moving down about 6. 5 after hours. Nvidia also seems to be falling. That shiphe folks in space decline. Caroline weve got to bring it back to what we just got in terms of apples numbers. Beating in terms of Fourth Quarter forecast. Some maneuverings within the Third Quarter. It looks like iphone revenue didnt quite live up to expectations, neither did services. It did show 4 year on year for john butler in china. Do we care that much about slight weakness in Greater China . 20 of sales, a trade war that has been raging on, i would say the latest figures are good. In terms of iphone, we are rolling into an upgrade in september. I think the next really big cycle is in 2020 when we get a 5g iphone. The focus in the fall for me will be the new content services. There are areas you can. 2 of concern, but nothing too great. Romaine what about the cost structure . We know apple had to move things around a little bit because of the trade war with china. What are we going to hear on the Conference Call with regard to costs . I think they will talk a little bit about how they will begin to diversify the base with china. They are going to spread their bets. It makes sense to do that based on what is going on here. Particularly as we get into these latest talks. I think tim cook will talk a little bit about how they are looking at other regions. Vietnam, malaysia perhaps, all the typical regions that offer low cost manufacturing. That kind of lift takes at least a year. I think they have been doing it quietly and i think activity will pick up. Caroline tim said, we are confident about what is to head interesting, europe slowing down given the economy and the fact that we are waiting for next quarters releases. Talk about what we are expecting. N the next set of iphones this im glad you raised point because what we typically sell with apple was new every two. A brandnew iphone, a hardware update every two years. Said we are now on a three year cycle. I think, this year, we are probably going to see a feature upgrade to the hardware. Maybe camera systems, fingerprint sensors, but i dont think you will see the major upgrade like we saw with the iphone x. I think the big lift on that front is coming in september 2020 with the 5g version of the iphone. Caroline we wonder how the intel purchase integrates into all of that. Butler of thank John Bloomberg intelligence. We thank you. Lets get a quick check on the latest business flash headlines. An elon musk tweet about tesla production raises questions about his deal with regulators. He says he hopes to produce 1000 solar roofs by years and week. Needs about production approval. Png beauty and health care products, increasing prices and three Percentage Points as well. Loreal says north american retail sales slowed down at the same time as they reported the highest first half growth. That is your business flash update. Another story on our radar winning three x bankers shakeups backing to hollywood. Raising nearly 15 million to bankroll content. Unsurprising perhaps that they are quite good at getting funding. This is all about using ai to work out what would sell in terms of content. Romaine this shows you how all of these content companies have to think differently about how you create and market tv shows. These are focused a lot more on mobile. Apple moving the content, you kind of wonder, these are the guys i feel like apple should talking to. They seem like they are on top of it. Caroline they are on top of it and in a growing market in india where mobiles are becoming more prevalent. Romaine another big day of earnings. This is bloomberg. Amg grabbingle and the earnings headlines after the bell. Projecting revenue in the Current Quarter that topped analyst estimates. Abigail doolittle joins us to talk about how the results are affecting. Lets talk about apple. Everyone talking about the Fourth Quarter. Fiscal fourthquarter looking pretty good. Higher astock popping little bit. One of the biggest influences is the whole ecosystem of apple suppliers. Amd, of connect that to course a little bit of a disappointing forecast, it looks like the chip sector overall could be a little bit ahead of itself. This chart makes that case today somewhat powerful way. This chart is 8196. What we are looking at a yellow is apple. In white, the stocks over the last year. Havee these two segments treated together. Last year, we see that apple greatly outperformed the stocks. The stock perhaps getting ahead of itself with regard to apple. Romaine that is interesting, that little bump on the far right is what we had that record last week when we hit that record last week. There was concerned about china, didnt need to be as concerned. Abigail that is a very interesting point. There is a reason to think that dram is bottoming. Micron put up a decent quarter at the end of june. It was less bad. There were concerns that it really was plummeting. Intel, their results also supported that idea. The stock is up about 38 on the year. The s p 500, less than 20 . You may think that investors get a little bit ahead of themselves on those fears. Caroline we will see who wins out tomorrow in terms of the apple effect. Romaine obviously huge waiting across so many. Abigail it should provide a bit of a bullish tailwind. Of course, the biggest could be the fed. We were just talking to matt from headwaters volatility, and he said options arent really pricing in a move. We have another chart, a pretty interesting chart, actually our most popular chart on the terminal. In blue, the s p 500. In yellow, the vix. In white comedy skew index. That index is considered to be the panic index. But only goes one month out it tells you some investors are starting to have a little bit of apprehension about what could be next. Abigail, always great to get you and your awesome charts. Tomorrow, Credit Suisse reporting secondquarter results. Romaine the fed announcing its Rate Decision tomorrow. Caroline that is all from whatd you miss . Romaine Bloomberg Technology is up next. This is bloomberg. Emily im emily chang in San Francisco and this is Bloomberg Technology. Next hour,n the apple coming in with thirdquarter results. Revenue from wearables passing the ipad for the first time. Revenue from services hitting an alltime record. Sales in china not as terrible as some had feared. Plus, the chairman