Just facebook at all. Lets dive into all the action. Abigail im taking a look at the dollar. A steepe, the dollar in decline. A spike we saw a bit of higher for the bloomberg dollar index. Up 1 10 of 1 . We do see overall an uptrend for the dollar index. The dollar bulls are in charge. On the recent weakness, all down in the 200 day moving average. It is not clear if that support will hold or if we will go down to 97. Right now, the bloomberg dollar index and the dollar index trying to hang on. Renita right back to earnings, looking at mcdonalds. Shares that the lowest since june on disappointing earnings. The chain is still struggling to pull more customers in its stores in the u. S. Mcdonalds gets more than a third of its revenue from the u. S. , where it has been have a hard time bringing more diners in, especially during the morning hours. Fierce fast food competition pulling customers away. Competition continues to heat up. Been heavily investing in technology. License plate scanners. Savvy consumers have been demanding. Taylor given all the regulatory scrutiny, underperforming. Today, i want to talk about the index up 40 relative to the s p 500, 19 gain. Yesterday, things only up about 19 as well. Sox index, given that Companies Like chipmakers will be reporting after the bell. Inside my bloomberg terminal, we are looking at the sox index. You have to go about 10 years back to get this richly valued level. 2013, about 16 times. , we will have to see how these earnings continue to rollout. Lets stick with Texas Instruments. The results out. 3q eps down, Fourth Quarter guidance on revenue, a miss. Fourth quarter revenue, 3. 07 to 3. 33 billion. The estimate was for 3. 6. Number, the estimate was for 1. 28. Texas instruments, the thirdhighest Weighted Company in that index. Caroline this will have a knock on effect throughout the industry. Markets, this is just showing the sort of pain this industry is in. Joe there is not instantly a lot of color. We will get more from the call. Most markets weakening further. Micron, nvidia, intel all fallen. Us, bloombergs Sarah Ponczek and kirk. We are looking at the chip sector, we always like to use it as a proxy for some of those broader Economic Activity out there. Do you think we have sort of reached an Inflection Point rerathe markets have to e some of the markets out there. I am not sure. Some of this may be stockpiling. Werets internationally buying components in anticipation of the trade problem. I am wondering if this is not a temporary phenomenon. The worldeem that economy is slowing. I do wonder if some of the trade wars and issues in china are not having an impact on some of the large semiconductor and chip acres. Caroline does this accelerate the notion of a rotation in the market . Sarah it can absolutely help it. If you look at what we have been seeing this month, you looked at transports, banks, the russell 2000, international stocks, they are all out performing the s p 500. We have been seeing these transition to cyclic goals. I will actually point out interestingly enough, if you look at the index, that is a long only index, it hit a record high today, which many would surprised at. A lot of people think about longshort versions. We have actually seen a pickup. It has gone up, just not as much as the other areas. Almost everything has gone up since 2009. When you compare one to the other, it is just not the same. Sometimes have to force ourselves to think outside the equities market. You are looking across assets. What do you think has opportunity right now, you saw a bit of a rally in sovereign bonds. 1. 7, 1. 8 when we come to the 10 year . For there has been demand Investment Grade when it comes to corporate, so that will continue. Coverage ratios are low, and that is a function of a decline in interest rates. Emergingmarket that, especially emerging currencies, you look at amex bonds, they have had tremendous run. I think some of the Investment Grade emergingmarket debt is interesting, even denominated in the strong currencies, the dollar or euro. At which the speed tensions emerge in what appear to have been stable ems concern you at all . Top of mind as she lay is ago no oneh a week was talking about. Does that make you skittish at all about reaching for yield or risk in the em space the em space . Kirk you have to be careful. There are companies that are earning or distributing yields. China is going to diversify away from u. S. Tech companies. I would recommend more opportunities in asia. Sarah, we still have a busy week ahead of us. Ecb, economic data. What specifically are you watching . We have to look at everything across the board. Earnings front, companies that make up roughly 10 of the s p 500. We will get another insight in the next few days. You cant really leave one out. Snap is falling some 10 ahead of its earnings. The markets trying to front run that to a certain extent. What do you have to keep your eye on for the rest of the week . Kirk i think you have to worry about International Markets and what will happen with the trade wars. Central banks around the world have been extremely accommodative. I think the ranch could be the trade wars and the thing i really worry about, the debt markets. Snap comingst got out with its earnings, saying that revenue coming in it ahead of expectations. Their loss remains perhaps larger actually, adjusted loss per share, four cents. Daily active users, 210 million, ahead of the expectations. Interesting,s sentiment had really been rising. That is probably why you are seeing some of the reaction here. Not horrible numbers. We wonder what investors are really looking for. Chipotle sales up 11 . 10 quarters in a row, they have had increase in sales growth. This is the 11th straight quarter, the ceo they brought in from taco bell. Eps, 3. 47. The comparison is 1. 46. Caroline now, we have got some executive changes at nike, one of the key companies, one of the big consumer companies. I am looking at the management function on bloomberg. Parker, chairman, president , ceo all the way back to june 2016. Looking to dig into have the board member john donahue will be succeeding mark parker. Romaine didnt you just talk to the under armour ceo today . Two of the biggest Sports Apparel retailers . Willmeanwhile, parker become the executive chairman, so not leaving the company. Romaine kirk hart Caroline Kirk hartman, thank you very much. Earnings and breaking in terms of executive changes. Plenty more analysis after the closing bell. Whatd you miss . Is up next, where we will be looking into tax estimates. You name it. This is bloomberg. Live from bloomberg to new york, i am caroline hyde. Here is a snapshot of how u. S. Stock markets were pushed lower by brexit. The s p 500 back below 3000. A reality check for chips. Stocks fall after earnings disappoint. Snap, chipotle analysis, and nike changes coming right up. Brexit lesson limbo. Boris johnson gains support for the deal in principle. Rk softbank is said to be taking over the company as ceo adam neumann leaves the board. A quick recap of all these stock movements because, notably, we have executive changes at nike. ,he board member, john donahue who is chairman of paypal, will become the ceo of nike. Meanwhile, mark parker will be president and ceo until 2020, then he becomes executive chairman. Executive changes at nike, but Texas Instruments falling fast. Those numbers were brutal. People are already expecting a decline in the thirdquarter numbers but for them to come out and get fourthquarter numbers, that is pretty brutal. Snap currently back to 14. Down 14 . Ow their ceo is going to nike. The other big story of the day. Parliament blocked from minister Boris Johnsons plan to exit the eu in just days. The house has again voted to delay rather than a timetable that would have guaranteed that the u. K. Would be in a position to leave the eu on october 31 with a deal. We now face further uncertainty and the eu must now make up their minds. Forer parliaments request a delay. Romaine lets bring in bloomberg newss annmarie hordern. It looks like a loss for Boris Johnson because he will not get that october 31 exit that he wanted but it does appear that the ball got pushed a little bit forward in terms of the u. K. Exiting the eu. Annmarie that is exactly right. This is the furthest the u. K. Has gotten to an exit agreement in the entire history since the referendum. Boris johnson on one hand was able to push through his deal in principle, they voted yes, but he was not able to get the timetable he wanted. He has been promising do or die, bring the u. K. Out of the eu. You heard the leaf protests were so excited when they got that first vote but you heard the remainders really cheer went he didnt get his timetable. The conciliatory tone that he brought to the floor following the vote, he did not bring up a general election, did not bring up pulling the bill. These are the two things he threatened to do. He is going to go back to the eu and now we basically wait for the eu. They are likely to give this extension. They do not want a chaotic brexit. Caroline donald tusk, he is saying he will recommend that they accept the brexit extension request. That has got to be good news, right . Annmarie certainly, that will definitely be good news for the pound. That citi is saying they remain in this view. Analysts are saying that this is a time to buy. We do have the potential of a deal, it is just put on pause. We could see them do what we have seen them do in the past with theresa may, give a shortterm extension to get the deal through legislation in the u. K. Parliament, that potentially give a later date in case that does not happen. Is there still a chance that, because of his failure to get the fast track, there could still be an amendment that could blow the whole thing up . Annmarie that is a very good point. We have to think of the amended ands that will happen once the debate begins in full. Two amendments, one about keeping the u. K. Within the eu customs union. The second would be that labor once a referendum on this deal. If this deal gets loaded with a bunch of amendments that Boris Johnson does not like, you could hear that same tone and threats about pulling the deal altogether coming up again. Joe thank you very much to bloombergs annmarie hordern. Coming up, we are taking a look at snap and Texas Instruments. Both moving after hours. This is bloomberg. Joe shares of Texas Instruments tumbling after the chip mode after the chipmaker revenue trailed estimates. With more, bloombergs Senior Intelligence chipmaker analyst. Reports that it was weak across the board, what is going on . Texas instruments is a broad barometer of the health of the market. The fact that they make analog chips, which are ubiquitous and pretty much all of these instruments, a testament to the fact that maybe things are not as rosy as we thought they were. That all the unit shipments are not that great. But some of that was offset a little bit at least through content gains. Broadbasedis weak, macro weakness. And the Consumer Electronics market. Romaine when you look at the guidance for the Fourth Quarter, how much of that was a real surprise for you that the guidance would come in a little bit lower . This is a company that, because of its nature, a lot of investors had gravitated towards it. They thought, maybe this is a less cyclically volatile company compared to electronics. I want to participate in this sort of end market. What that did to the multiples has pushed it pretty high. A marginal weakness here will be punished, as is evidenced by the stock today. Caroline we thank you. Senior semiconductor analyst. Lets talk more earnings. Snap reporting its latest numbers. Lets welcome Bloomberg Intelligence Senior Analyst over in san francisco. Weird 4. 4 , which is a Market Reaction given that the numbers are pretty good in terms of daily active users. Have we just moved to high in of snap . The expectations are pretty high going into the quarter. If you look at the core metrics in terms of user numbers, they are ahead this quarter, expecting they will be ahead next quarter as well. Some of the changes, especially with the android app, the filters, things like that, continuing to pay dividends and show results. That metric is important to think about longevity for the story because every other metric is in their control. The user number is harder and they are nailing that one. Joe we are seeing the stock slip 6 after hours. His to is this just a matter of they know that this company is a turnaround story and they are looking for a little more . I think if the guidance had been a little stronger, you would have seen a different reaction. Next three years, they expected to more than double the revenue. The bear scenario, the bears dont really buy that. These wherers like they come out to deliver on the core metrics consistently, the confidence and valuation will follow. We look at these numbers, we think they are fine, it is just the cap in the expectations and guidance. Romaine one of the big criticisms of snap with regards ideae longevity is the that anything they do, facebook can knock it off pretty much overnight. How did they defend against that . At least the User Engagement numbers have shown that they are resilient to that. As long as they can be on the innovation side of things with filters, providing revenues, they can hit those expectations. If they will go straight out after facebook, double user counts, that would be a hard thing to do for them. Keeping the core engagement steadily growing and growing against that is the best bet to come out of the street expectations. Romaine thank you. Said to bewework giving up control of the Office Sharing space in a new bailout package. This is bloomberg. Hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. With im Mark Crumpton bloombergs first word news. The president of the European Council donald tusk will say he will recommend the eu accept the u. K. s request for an extension. British Prime Minister Boris Johnson won one vote and lost another in parliament today, a result that inches him closer to his goal of leading britain out of the European Union but guaranteeing it wont happen on the scheduled date of october 31. The house has again voted to delay rather than a timetable that would have guaranteed that the u. K. Be in position to leave the eu on october 31 with a deal. We now face further uncertainty and the eu must now make up their minds over how to answer parliaments requests for a delay. That leaving the eu by sadline day has been johnson goal since he took over in july. Testimony today from the u. S. Top diplomat to ukraine. Bill taylor testified that a senior diplomat told him that President Trump made security aid request to request to crane entirely dependent on a promise that they help him with the election. The directly contradicts president s assertions that there was no quid pro quo behind his conversation with the president. Senator Lindsey Graham says he agrees with President Trump that the impeachment drive is like a lynching. He said today that President Trumps description is, pretty well accurate, adding that it is a sham and a joke because he doesnt know the identity of his accuser and the process is playing out in practice. Senator graham told reporters, this is a lynching in every sense. This is unamerican. Representative al green said, do we as members of congress not understand how he is denigrating decency in this country in this country . I rise because, how dare the tosident compare lynching impeachment . How dare he do this . Does he not know the history of lynching in this country . Does he not know that thousands of africanamericans were lynched . Does he not know that this is the equivalent of murder . Mark Senate Majority leader Mitch Mcconnell called the lynching touse of describe the impeachment investigation unfortunate. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. A Second Chance is coming for wework, part of a deal that will see softbank take control of the company and push ceo adam neumann largely out of sight. Julian, there were two offers that we know about. Why did we work go with softbank . The key is that this package allows adam to be cashed out. Did notorgan package offer any equity so there would not be any repurchasing. This other package, up to 3 billion. Adam is allowed to sell just a little under a billion dollars of his stock. This is what people are wondering. Why is he getting anything in the end . This company, in theory, without some outside help, seemed to be heading to zero, actual plausible, literal bankruptcy in which case all equity is gone. In this scenario, he is walking away with a lot of money. Biggestank is the shareholder but he had more Voting Rights so they needed to get him a little bit out of the picture and offer him a package that he has obviously come to terms with. People on twitter are saying, i would love for that to be me, a credit line, 185 Million Dollars consulting fee. Caroline the credit line is interesting. How much does that help pay back jp morgan . An the jp morgan, ubs ubs, and Credit Suisse credit line will be entirely paid back. I think we reported that 385 million of that is drawn. He still has wiggle room that has not yet in drawn. Caroline quite amazing. Employees of course being lost but adam neumann appears to be doing all right. Thank you for all of that breakdown. Now, a change in leadership but not strategy at under armour. Kevin plank is stepping down as ceo but will stay on as executive chairman. The under armour president and coo will step in as the new ceo as of january 1. I got to sit down with the outgoing and incoming ceo and ask about the transition. This is completely my decision, of course in concert with a terrific board of directors. That was part of the process of getting to know each other, work with each other. Recently, we have been talking about this idea of moving from defense to offense. It really is the perfect opportunity for the business to do that. What i think this really gives us is this ability for freedom. Kept ascending in the organization, it was, whose hands are on the wheel . I want that to be something that is always clear. My move into this role of being executive chairman and branch chief, i still have the ability to do the things that i think need to happen, allow patrick to run the daytoday. Caroline so, patrick, defense to offense, division, you say in the release that it is time for realization of the full potential. What is the full potential of under armour . The full potential, we laid out last year, with one of the great things about this transition right now is the plan. It has been a planned transition. We have worked on it for quite some time. We have also worked on the plan for quite some time. We are very confident that the way we are thinking about the business right now, the way we are thinking about where we performance,tic and also our brand positioning, it is going to allow us to continue to be successful inside of athletic performance. Like evan said, as we turn the corner to 2020, you will see a louder brand. We are turning from defense to offense. We believe the transition now really sets us up to have continuity in leadership, consistency and execution, and ultimately that enables us to really sets us up towin over th. Ultimately, kevin asked me to come here to help him with the vision of the coming an eternal brand. You talk about performance but you both sit iere in under armour tops and bet you will both work out at some point today but not immediately. Is this really something you remain very focused upon, ensuring that these are fit for purpose and usable rather than everyday wandering around the kitchen . We love that question because we dont look at the two things as separate. Today, if you want to appeal to the consumer, you have to look good, you have to look beautiful. Kevin loves to talk about beautiful performance, or there is no performance without beauty. That is how we think about it. The way that people ultimately choose to wear our gear, whether it is footwear, apparel, it is up to the consumer ultimately. Thatob is to make sure ,roduct is not only functional because our goal is to make sure we make things that people need and didnt know they needed until they use it. We believe people will make choices about how to where it, whenever and however. Caroline it feels like the partnership is real. You told me off camera that you came in wearing the same outfit today like you are morphing into twins. For those out there looking to build such strong business connections, how do you make it work . I have the bigger closet, so i swapped mine out for patricks. Hopefully this is something people look at and say, this is a transition. There are no health issues, no board pressure. No health issues, no board pressure. We think this is the right time for us to make this. The organizational structure, the way we are titled and operating today. I cant wait to be in that brand chief role, what it means as executive chairman, and continue to support our team. I know there is a job that needs to be done, continuing to run that day today. I think that balance is something we have been practicing for a long time. Continuing to be inspired and also be a part of driving that mission, but let our team really drive people who are professionals. Caroline the outgoing ceo of under armour, kevin plank and the incoming ceo patrik frisk. Incoming news when it comes to brexit. Macron, iscourse saying the extension must be excluded. France is saying it is open to a to aays technical few days technical extension, but nothing longerterm. They say the brexit deal must be implemented without delay. Are in the thick of the earnings season. Snap out with its earnings, shares a little bit shaky even though they beat on daily active users for the Third Quarter as well as fourthquarter guidance. Other1 , and a lot of chip stocks. Microchips also down. Texas instruments, that is the first semiconductor in the u. S. To report for the quarter. Pretty dismal as regard to the fourthquarter guidance. Automated vacuum cleaning company, they came in well below estimates. A lot of concern really about competition. They had to roll back a price increase and that apparently affected earnings. Aaa, shares were up a little bit higher. They beat on most of the metrics. Sales coming in at 11 , well above the 9. 3 that analysts were looking for. More coming up next. It has been the greatest honor of my life to serve you for these past four years. Tonight, i am going to go back to work for you. For justin trudeau, overcoming scandal and controversy to win his second term as canadas Prime Minister, but this term, he will be presiding over a minority government with the liberal government losing both the parliamentary majority and the countrys popular vote. To tell us more on what this means, the director of economics at cost for at oxford economics. What are the ramifications in terms of policy from having to preside over a Coalition Government as it appears he will have to . Lets take a step back. I dont think any of the leading platforms will be game changers. We expect the canadian economy to grow at a slow pace. Our own view is in the low 1 range through the end of 2020. Headwinds from external forces like slowing mobile growth or u. S. Growth, and you have also got tensions between china and the u. S. Continuing, and canada faces its own domestic challenges. That being said, we looked at platform pledges from the conservatives and liberals. If you look at what they had planned, they looked at increasing the deficit, financing tax cuts, higher spending. When we factor that in in our model, we looked at it and we think it will nudge up growth 2 10 in10 in 2020 and 2021. In a minority government situation, you have a little more uncertainty. The liberals do have a leftleaning ally in the new democratic party. We think, going forward, you will probably see even larger fiscal stimulus and possibly higher deficits down the road with that much more stimulus in the next few years. Romaine when i look at the breakdown, we have the whole breakdown on the screen, i guess my big question is, how long will this government last . With numbers like that, it doesnt really have a good track record of lasting multiple years. 1824 months, i would look for stability in that range. What does that have in terms of impact on business decisionmaking . Is this more about spending that goes on fiscally. Just thinking of some of the geopolitical risks and destabilization around the world, it is good for business. We saw today the bank of canada release their Business Outlook survey. A drop in business confidence. Conductedthat was before yesterdays election. Quite been still lackluster, particularly in the energy sector. There are still issues in that regard. Specifically, the pipeline expansion, i know the liberals of already passed that through the house, so it doesnt require another vote. There could be pushback from the party that does oppose it. Who knows, perhaps the conservatives could step in if there is a need. Joe obviously, there are parts of canada come particular oil regions, rural regions, which really are hurting and opposed to this government. Talk about any kind of possible pipeline politics we might see over this next term . That could be another wedge issue. You have heard talk about separatist movements in alberta. I dont put a lot of credence in that. Has beenine expansion approved, so hopefully that will go through despite the ndps opposition. Energy corridor through quebec. I think this is quite an interesting period moving forward. Romaine our thanks, tony stillo, giving us insight on what is going on in canadian politics. Lets turn to u. S. Politics. Elizabeth warren has long been known for criticisms of wall street. Now she is waiting in to the repo debate. She sent a letter to treasury secretary Steven Mnuchin basically warning about the fed sort of trying to rebalance that as an opportunity to loosen regulations. Joe it is a really interesting question. The question that emerged when repo rates spiked, why did the big banks like jp morgan and so on, who are sitting on excess warren, elizabeth what she is legitimately curious about, using it as the pretext for loosening liquidity requirements imposed after the financial crisis so they could be orderly wound down. Should theytion of loosen the requirements or add more reserves . Caroline it sort of sets her up with further fights with wall street. Romaine it comes the day after jamie dimon made those comments. Joe it is very on brent for her to be the one to dive into these on brand for her to dive into this. This is bloomberg. Caroline shakeup at nike. The footwear giant says board donohdonna you will oe will succeed mark parker as ceo. Nike . W for i think nike has been in controversy this year for some time and may be part of it is, if you look at who they are as chiefonahoe executive, he has experience on the board of nike, and a lot of technology experience. I know it is such a cliche, but is nike eight tech company . Would you characterize categorize it that way . Poonam is definitely leaning. Oward technology we think it could go even higher. Think about the sneakers app company nike app for retail, connective jerseys, connective is a lot of Technology Initiatives taking place at the firm that really lend itself. Romaine people drive people to their own website instead of going through thirdparty retailers, all these things you can do. Who is responsible for that . Is that parker doing that stuff for was it somebody beneath him making that push . Poonam they have their technology division. Parker is obviously leading the company so he had to have a yes going forward. Digital transformation, they are leading the way. Where they are today is far beyond where any of the other technologies are. Caroline another company in focus, looking at facebook. Dozens more states have joined new yorks antitrust investigations. Heading to washington tomorrow for question on libra and targeted ads. It is actually more than 40 states joining new york. This is interesting. Im sorry, i am distracted by a headline. Libra, forget the future of currency, i tried that steak the other day, it is legitimately good. Facebook who . I dont care at all after trying that chipotle steak the other day. It is really good. Onis notable, down 4 today Building Momentum among state ags for this antitrust. It is not going away. The momentum toward regulation, toward some sort of antitrust move. Caroline not to mention, doj, ftc, the house judiciary committee. That is all from whatd you miss . Romaine dont worry, Bloomberg Technology is next in the u. S. Joe this is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Riggs in am a taylor san francisco. This is Bloomberg Technology. Snapesp, we dissect thirdquarter earnings including daily active users up against estimates. Plus, a barometer for the chip industry. Texas instruments records a miss on revenue
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