Abigail underperformance, major averages at the dow and s p 500 relative to dow transports, look at that. The dow and s p 500 index recovering after the dow presser, dow transports however, not so much, lows down 2 at that point on pace for worst daily performance since august, has to do with weakness with c8 robinson, writer, logistics companies. When we put it into the context of the year to date chart, they are having a good year. They have0 index, traded in a directionally correlated manner for the most part. Now a bit of a divergence. The last one did not prove to be bearish for the s p 500, but it very much looks like we could see dow transports go back down into that range. It will be interesting to see if there is any connection with the s p 500 should that happen. The fed ratead of decision gold rallied, but then trimmed but then earlier gains when powell said they may put Monetary Policy on hold and assess the impacts of the economy on the reduction over the past three meetings. Gold has risen more than 16 this year while the metal has benefited from Central Banks easing Monetary Policy. The rally stalled lately as traders awaited signals from policymakers on additional outlook for monetary easing. Lower rates make that less attractive because it doesnt offer yield or does it yield or dividend, and trade optimism has reduced demand for gold as a say face and asset. It will be interesting to see if estimates earlier this month pegging gold higher will actually stand following the fed language. We are awaiting facebook earnings. Shares close lower today. Theave been lower most of day, fluctuating in between losses. Monthly activeat users at 2. 4 billion, rising 7 year to year, revenue about 17. 5 billion. There will be discussion about cleaning up the platform. Look at the impacts on cash flow and operating margins. Analysts say operating expenses could rise 45 next year as we head into the election as facebook works on cleaning the platform. Let me look at a chart on my terminal when we talk about antitrust and facebook clout on this business, 21 of everyone on the planet looks at facebook at least daily. This is what regulators are talking about when they talk about size and scope of this company. Facebook and google really lead on ad business and it looks like the stock could be trading in a regulatory overhang, but we will wait for earnings to cross any moment. Carolyn taylor and the markets team, thank you. Lets get back to expert analysis. We going to start to look at earnings while we are waiting on Economic Data now that the fed has given us breathing space . Only i think im the person on the planet not on facebook, i found that out. [laughter] important, but it is all about projection. Every earnings cycle is the same. In a a telegraphed game lot of ways, just about projections going forward. They have been relatively ok, the projections, but you still have china issues, trade issues, and we are still going through this trade war, trade skirmish for the last year and a half. It will be another five years by the time it is over. Phase one is nothing. Future really about the and that is a longerterm issue. Scarlett interesting point. It suggests companies blaming things on trade uncertainty is something we are going to see every quarter and wont make a difference on earnings because you will have a quarter after quarter. Investors seem to be coming to terms with everything going on with the u. S. And china and trade is not going away. Caroline we have thirdquarter monthly active users at 2. 4 5 billion, up seven and a half percent, daily active users 1. 62 billion, slightly ahead of forecasts, i had of the 7. 6 , ad beat,e 17. 4 billion, a earningspershare, 2. 12 versus 1. 76. Up two percentage points, this company hasnt been record high but is supremely up from the s p 500. Joe remember when people were wondering if we would stop using facebook because of the privacy scandal . That didnt happen. [laughter] caroline they also has a change, desmond helmand, the board of directors. Check out my interview with the facebook ceo tonight at 6 00 p. M. Is boosting its revenue to 3. 58 billion dollars, previously at had anticipated shy have that that shy of that. Revenue for Third Quarter also higher than anticipated, 955 lion 900 55 million 950 5 million dollars, analysts expected something closer to 916 million. Starbucks adjusted earningspershare fourthquarter back in line with expectations, comparable sales quarterlyeat as well, dividend . 41 per share. Scarlet news out of twitter. The company decided to stop political ads in advance of the 2020 president ial election. Ad company will share final policy november 15, but for now includes the decision to stop all political ads, according to ceo jack dorsey. It is not just the u. S. , it is globally, so all political advertising banned from the twitter platform. It goes into effect november 22. We will get more details, but , jack dorsey ,ncapsulated by saying it political reach should be earned, not bought. Joe this comes after facebook, and require came under fire about whether politicians can lie in their ads and the stress they are under about being put her in the about being put in the position to regulate that, so they are just getting out of that entirely. Lets go back to hyundais capital, honius shawn matthews. The consumers the driving force want toconomy, people spend. Talkingoure still about low unemployment. The gm negotiation was a key ght, because labor because labor won, the deal they got was better than expected, which means there is inflationary wage pressure out there that will work its way through. At lowure comes Interest Rates, we are talking about zero Interest Rates in some parts of the world, to percent or less in other parts, it doesnt change much for Inflation Expectations to change the curve significantly. That could be painful for fixed income investors. Nice bouncetting a after earnings. The 2019sible that in ipo class people got negative on these companies, convinced they are all going to be a disaster and never make money that maybe there was throwing baby out with the bath water . Sarah its impossible. But remember, if you look across the 2019 ipo class, some have performed very well. Have been in their own ballgame. Is saying, i look at the adjusted loss per share at . 41 after an estimated . 72, that is substantially better even though it is a loss. You are onbut maybe a path to get there. The the math jake magic phrase. [laughter] er getting 2 in afterhours trade following betterthanexpected lyft results. Thanks to our guests. That does it for the closing bell. Romaine bostick steps in next four whatd you miss . We have the Apple Earnings report coming up at 4 30. This is bloomberg. Caroline from bloomberg headquarters in new york, im caroline hyde. Romaine im romaine bostick. Joe im joe weisenthal. Revenue breaking news, 1. 7 above estimates, shares rising after shot after hours despite the controversy surrounding facebook and spending they are going to up in 2022 ensure there is not manipulation of the election in the u. S. Third quarter advertising revenue is up 20. Year, 17. 4on billion. We want to get Immediate Reaction to those thirdquarter numbers. This is a moneymaking machine and advertisers want to use them. It is another very Strong Quarter across the board, a topline beat, eps beat, metrics good in terms of users, stock already up 45 year to date already. This name continues to work and the reason is coming there is controversy around regulation and other big tech names, but fundamentals remain strong. Advertisers are shifting more ad budgets from traditional media, think newspapers, radio, tv, to digital. That shows very little sign of slowing down. If you believe in that sector, there are only a couple of places to put your money if you are an advertiser, facebook, google, maybe a little amazon, but those are the big plays. Romaine why havent we seen there wasallengers, so much talk about how they could be facebook killers, and they havent attracted that kind cant revenue they attract that kind of advertising . Advertisers want the biggest audience at the best price. For that you go to facebook, google and increasingly amazon. The snaps, the twitters of the world, yes, they are big, they have 300 billion users 300 million users, but relative to 1. 4 billion, if you are snap or twitter you tell to a very targeted audience and that is working, but not nearly to the degree is the bigger platforms. Joe moneymaking machine no doubt, one of the only games in town for advertisers, there is still the Regulatory Risk looming and twitter reminding everybody by its own announcement that unlike facebook, it is getting out of political ad games entirely. How much is that weighing on the stock right now, and if somehow that were to be seen as being lifted tomorrow . Would that be a meaningful change in sentiment among investors . Surprised it has not weighed on Big Tech Companies before. There was a seachange until up until just a few years ago. U. S. Policymakers took a light regulatory touched a u. S. Tech companies, and you it argued that spurred innovation over the Silicon Valley over the last 50 years. That has begun to change. We have seen big tech executives hauled in front of congress. That looks like regulatory wins may be about the change, but the question is, how much . Caroline no mention of libra . Paul no. Caroline and that is why we a stencil he saw Mark Zuckerberg in congress. Surprised when they launched libra. Financial services is one of the most highly regulated industries, and if you are a company trying to fend off regulation for your core business, why would you get into a business that is very highly regulated . Buttiming surprised people, the industrial logic makes sense. You have 1. 4 billion users, why not sell them stuff . If you want to sell them stuff, why not have your own currency to facilitate transactions . That makes sense, but timing was strange. We left the see how they play with this. It seems now they have multiple fronts with u. S. Regular taters u. S. Regulators looking at their business. Romaine lets turn now to earnings out of lyft, blowing past analysts estimates. Fromar revenue, going 3. 75 billion to 3. 8 billion, beyond analyst productions projections. It had higher revenue per driver. Lets bring in mandy of bloomberg intelligence, who covers the righthailing hailings thae ride companies. When you look at revenue per rider, how encouraging is that . Mandy it is encouraging and tells you there is rationality in the ridesharing market. End compared to the food delivery market, we saw grubhub fall 50 yesterday, this is a yft and uber control the market. So rationalization when it comes to pricing is driving revenue per rider and i think ride hailing as a much better market for investors. Joe there is always this question about whether current pricing is sustainable, or whether they will have to cut what drivers make or raise prices. Are we getting any clarity on that, on whether the current model needs changes . Mandeep the last couple of that there is us elasticity. The niche is that these companies are trying to drive that path to profitability. Elasticity is more visible, so you will see this companies try to raise prices gradually by a percent of recorder, and that doesnt hit them in terms of ride growth. Caroline when the companies tryingblic, it was uber to be all things to all people, is very much getting people from point a to point b. given their smaller size, it is the right thing to focus on just ridesharing. For the reason i said, it is a duopoly. Food delivery is fragmented, so lyft is doing the right thing by not getting into food delivery for now. In the case of uber, you want to get that subscriber that still has value, and that is the amazon aspect of having a platform when it comes to transportation. Is better off focusing on profitable niches. That is why they are not expanding and that seems to be the right thing for now. Singh of mandeep bloomberg intelligence. Etsy is boosting its Revenue Growth from 34 to 35 . Growth in Merchandise Sales will rise anywhere up to 26 , thirdquarter numbers coming in, falling down somewhat but revenue up 32 . This is bloomberg. We believe Monetary Policy is in a good place. We see the current stance of Monetary Policy likely to remain appropriate as long as incoming information about the economy remains consistent with our outlook. We also say risks as having moved in a positive direction. Athink we would need to see significant move up in inflation that is persistent before we would consider raising rates to address inflation. Is about 2 . Verall could be better. Could be worse. You never say you have achieved it. Joe chairman powell after the of aut rates by a quarter percentage point today, but hinting it may be on cause. Joining us now is ubs economist seth carpenter. Seth you have to lean more into this being a pause than i was anticipating. I thought they were going to keep it neutral which neutral with as much optionality as possible. I suspect in washington they are reasonably happy with the fed. Market reaction was, everyone heard loud and clear, dont pricing more cuts right now. But boy, dont expect to hike anytime later. The effect ofls no more cuts. Seth and i think he succeeded. Romaine you talk about Monetary Policy being in a good place, but this can against the backdrop of gdp data and you see a contraction in nonresidential investment. As the economy in a place where the fed can be comfortable for a long time . Seth i dont think so. He said policy is in the right place as long as it is in the right place. [laughter] the economy slowing. We see a longrun trend over the past year and a half, downward job creation, investment spending not in a good place at all, we are very convinced tariffs that went into place this year are working their way through the system and are going to lead to a slowing in the Fourth Quarter and a bigger slowing in the first half of next year. If that materializes, that substantial downgrade in the outlook powell referenced is going to come to pass and then they will change their mind and start cutting. Caroline how much do you buy the announcement today that the event in chile, or phase i, how much do you care about the nuances of phase i versus phase ii end avoiding the december 15 tariffs . Seth very little. Being canceled is two decimal points unimportant. And even phase i, what has been announced so far is the tariffs that were supposed to go october 15 didnt, so that is already there, and china is going to back buying agricultural goods about where they were before this whole thing started. So phase i is unimportant. Tariffs already in place here are going to hurt the economy anyway. Surprised powell talked about how phase i should be good and brexit is a reason for a rosier outlook . Glass halffull thinking about the impact of things that have not . Romaine heading into this meeting there was concern the fed was being dictated to by the bond market, but looking at pricing now, markets seem to be in line with each other. You still see tension between the market is expecting out of the fed and what the fed is forecasting . Seth i dont see that tension anymore. In general the market narrative that the fed is slavishly following markets is overdone. Market, attention to keep their own counsel but dont just follow it blindly. Now, a price cut in with the price cut in expectation, it is trying to balance that risk and no possibility of a rate hike anytime soon, but clearly if things go pearshaped, the cut. Apple breaking its fourthquarter revenue. Just trying to see where it went. 85. 5 billion. Ue those estimates will be early. Of both in this court. The lookahead will be important. The Fourth Quarter, i misspoke, 85. 589. 5 billion. Their q1 is what everyone else cause q4. Cause q4. It is waiting for them to stock up on those iphones for the christmas tree. That is 1100 more in apples pocket. 37. 5 to 38. 5 . It seems like they are beating. Lets get more insight from tom butler, Senior Telecom evidence analyst. It looks like a clean quarter. I think what is most important here is i want to see what the guidance is. Chinas sales are very important. The iphone has gotten expensive there as the dollar has gotten weaker. They began to play around with pricing there a bit. The basetest models, model iphone 11 is actually lowerpriced than the 10 r. That could help to spur sales in china. I want to bring in bob odonnell. He joins us from san francisco. On theitial thoughts quarter, it looks pretty solid allaround. The market seems to like it. It does. It is interesting to see with what happened with the ipo numbers. We got early signs that the iphone 11 did well but the question was how bad with the previous years . Where the previous years . They did what people how bad where the previous years . They did what people were expecting. We have to dig out in the call. Im sure they will get into more color on what happens next order. It is when we start to see the tv services and more impact on the gaming services. We are still seeing a little bit of a slowdown and a growth rates low on some of these things. There is a lot of anticipation about what a 5g phone could mean in terms of building excitement for people to come in and replace those funds. How much importance are you putting on that five g iphone . The 5gnk it 5g iphone will be important. Iphone is an incredibly important factor in the u. S. It drives the carriers to build up their networks. We will see the networks built up over the first course of 2020. There are a lot of very interesting challenges in terms of the realworld benefits. We have to temper that enthusiasm. Checkmark. A if apple did not have it, they will look far behind. I want to get the geographical perspective of apple. Exposed significantly to china. 11. 1 billion is what they are pulling and. Whether getting into a culture war . Are they getting into a culture war . That was better than expected. The margin, as the pressure comes up the trade war, we have seen the rhetoric died down here. My sense is that apple incrementally will do better there. Particularly with the lowerpriced iphone. It is still an aspirational brand. That is one of the things that has worked so well for them in china. Keep in mind, china is really big on 5g. They are making a big push there. I think when the 5g iphone comes around, we should see sales in china for apple get a nice boost from that. We saw this pretty highspeed on the services revenue. 12. 5 billion. This has long been one of the stories that people have told. There is a much greater opportunity for apple to harvest its existing user base and get my money out of them. As the starting to kick into gear in a way that a lot of expected . I think so. They have more services yet to come. I think there absolutely is an interesting opportunity for apple to build on that Loyal Customer base. I will say i think there are a couple of challenges read to be aware of on the tv side. When it launches, it will not run on android. It will not run on windows. Most people have multiple devices. They are not used to being able to say i will you watch this content on this device and this content on that device. They will change that. They are either that with apple music. It will be interesting. We just talked about international, how they internationalize their content. All their early content will be more u. S. Focused. Internationalize this in the Service Business is what we will be able to watch. When we look ahead to the conference call, how much stock do you think the company is going to give to that service . Particularly the growth. It is still relatively healthy but it is not gangbusters. It is not gangbusters. I think the rhetoric on the call will focus more on the content side. That is going to be a bigger and bigger push for apple as they move into streaming here. It will become a bigger component of services. Like a lot of hardware companies, they are trying to make that tidbit from selling big iron to selling more services. The kids love that. That will sell a lot of boxes. Lets think john butler. Donald donald, thank you for being with us on tech analysis. Lets get the first word. Mark crumpton standing by. The former National Security advisor john bolton has been asked to testify next week for has been conducting the impeachment inquiry. He was ousted from the white house last month. It is unclear how he will respond to the deposition request. Multiple witnesses have will seekthat bolton investigations from ukraine that is at the heart of the house investigation. The companies have not been damaged by nearby wildfires. Came withinthe fire about 30 yards of the complex this morning but that is protected by aerial water drops and a fire break. It functions as a barrier to stop wildfires. They met to review the final offer from Chicago Public schools. Mayor lawyers mayor Lori Lightfoot accused the Teachers Union to use a political agenda of using a political agenda to hold up a negotiation that will keep students out of classrooms for at least 10 days. A robustwill be presentation of the agreement that is on the table. They will vote on it, upward and. Obviously, i am hopeful that this will be approved. Results are, we will deal with it at that time. Union released a it took athat said strike to get them to bring down exploding class sizes and alleviate desperate shortages of nurses, social workers, librarians and more. The teacher say we should not have to work this hard and strength to get our students what they deserve. Denmark has given approval for a joint german russian pipeline project. This enables russia to supply gas directly to germany under the baltic sea. This is a blow to the Trump Administration and several European Countries who opposed the deal. They worry it could increase europes dependence on russia as a supplier of energy. Global news, 24 hours a day on tictoc and on twitter, powered by more than 2700 journalists in more than 120 countries. I am mark crumpton, this is bloomberg. Lets get you a recap of what is happening post earnings. Apple at 1. 7 . Both look at to their First Quarters, the holiday quarter. That is ahead of expectations. Facebook also moving higher. Average users on the facebook app reaching 2. 4 5 billion and their Revenue Growth, thirdquarter sales is 29 . A growth rate of 29 on revenue. Finally, it had been higher lyfthen it went lower, is basically flat. Was more narrow but they still lost . 41 per share. This is bloomberg. Apple and facebook both reporting earnings after the bell today with the latest on how they did and how the markets are reacting. In ed. In lets bring ed it is all about the fiscal ed it is all about the fiscal First Quarter for apple. Apple sees firstquarter 89. 5ues at 85. 5 billion billion. They are in the midrange, it tops estimates. They were shipping the iphone 11 and iphone 11 pro. We are waiting to hear more about how the present of those handsets played into it. Was on revenue of 64. 7 billion dollars. ,his is above the estimate 12. 16 billion. Iphone revenue also bidding expectations there. The profit picture has been discussed. A lot of expenses for facebook as they try to clean up their platform. Their income is up 19 . Come with pantomime bloomberg. Monthly active users are up 8 . We want to hear about instagram. We want to hear about and growth there. Ad growth there. Also, expenses. We know that facebook has been hiring like crazy to clean up the platform. How will this help the margins going into 2020 . At the timingoked topics. Abigail . Abigail we have the technical strategist. An awardwinning one. Institutional investors. Im getting my short evidence messed up. You awardwinning your awardwinning tech is going up. Lets check in on the 10 year yield chart. Today was a big day for 10 year treasury yields in the bond market given the decision to cut Interest Rates. Here is a chart of 10 year treasury yields since we made the bullish call. We said they would fall. Indeed they have. Market still bullish . Is it over . We dont have the evidence to say that. They have risen from a slightly higher love to test this trendline that goes all the way back to 2018. I think the technical rule of thumb is to essentially keep buying bonds while below this trendline. If we pierced this, that is 1. 86 . We may be able to adjust our do a little more. I think bond markets continue to rally. We may come back down another 20 or 30 basis points. You were talking about reactive Technical Analysis where you are reacting and respecting the trend in place. If you would be predictive, is that a possible Double Bottom . Could that send rates back above 2 . Potentially a triangle. That is a slightly lower trendline. You have the same coming up this way. Potentially lead higher. That could be a buying spurt before the potential to happens. Lets take a look at your dollaryen chart. We have an agreement here. One of the longterm charts that i always think about. Talk about what you see with the dollaryen. This is the ratio of the dollar versus the yen. That look forward into potential predictive triangle pattern that may form, the dollaryen should break out through the neckline of its head and shoulders bottom pattern that is formed over the course of the last five months. Today was a very interesting day. The dollaryen relative to a high of 109. That is four cents away from the high. The market came in and said we are selling dollaryen and buying bonds and not breaking out yet. The rule of thumb is that you dont call this a base and call for a rally unless there is truly a breakout. You would be shorting the dollaryen. When we look at the positioning trend of the dollaryen up top and the 10 year treasury yield down bottom, we go back to 2004. This is like an oscillator. When you see this, this pink line rose all the way to this level here. That meant the market was very long yen or short dollaryen. They have taken that off. The dollaryen goes up. This positioning goes down. That is perfectly normal. What has not happened is no budget in the positioning for the bond market. They are still not buying into the brexit negotiation. If the dollaryen breaks that level, i would expect some of this position to come off. That was the 10 year yields higher. Until then, stick with the trend. You have had some great cause. Thank you for joining us. Joe lets free caps on of the bell. Starting with apple. Posted a solid quarter. Revenueheadline, q1 85. 589. 5enue of billion. The midpoint is bidding expectations. Iphone revenue is good all around. For the quarter. At 29 . Are expected whatsapp is one of its biggest customers. The company had extremely high growth. Well below what analysts were expecting. That growth rate is dropping down about 12 after hours. Ansi is worried about the earnings margin forecast. This is bloomberg. Etsy is worried about the earnings margin forecast. This is bloomberg. Lets get right back into earnings. One company we have not talked much about is starbucks. Q4 sales coming in ahead of expectations. 2020 Revenue Growth of 6. 8 . At . 70. Ming in line here to break down starbuckss rally is our guest. Still keep buying sugary drink caffeine . That is the deal. We saw growth in the u. S. And china. Some quarters they pulled up one or the other. Here they are doing both pulled off one or the other. Here, they are doing both. Summer, china saw sales dip. It appeared they were leaning into local competitors. It appears china is back. Joe this wasnt because more people were going into the store. They were just buying higherpriced drinks. Anne that is right. That is not the case this quarter. More people are coming in the door globally now. They are spending more when they do. That is the double whammy investors wanted to see. Carolyn they are focusing on their apps and higher labor costs. Anne their Loyalty Program gets people in the door and on the app and sells more coffee. They have been experimenting a lot with automation. Not without makes your copy but things like inventory and payroll that may seem very boring. Outrees people to come behind the counter to clean up. What about this idea of flavors . Obviously, this is pumpkins by susan. Could we see something that the rest of us could actually enjoyed . Enjoy . Yes and no. They are trying to move a lot faster. It now takes on the 100 days to get from the idea stage two in front of people. It used to take months. Front of people. To take months. They are focusing so much more on colebrook cold brew. They are focusing less on things like the unicorn frappuccino. Frappuccino. That does not get people to come back. Carolyn is starbucks trying to get new ideas out of the door after . Faster . With starbucks, people dont always want change. You want to be able to pick it up and that is what they are leading into. If you are happy with the cold brew that you always get, what they are leaning into. If you are happy with the cold brew that you always get, you may not want that much change. Carolyn we just want to tell you to check out this show. It is happening in one hours time. Joe Bloomberg Technology is up next in the u. S. Have a great evening, this is bloomberg. Taylor this is Bloomberg Technology. Apples firstquarter results beat expectations across board the board. Despite slagging iphone sales