Transcripts For BLOOMBERG Bloomberg Best 20240713

Speaks to bloomberg about the path ahead. Speaker pelosi what we are talking about now is taking it into a whole other class of objection to what the president has done. Kailey results from some of the worlds biggest tech companies. This has been a year where apple is rebuilding confidence. It does not seem that anything really hurts facebook these days. Kailey plus, Sheryl Sandberg discusses facebooks stance on political advertising. We believe in Free Expression. We believe in political speech. Ads can be an important part of that. Kailey that is all straight ahead on bloomberg best. Kailey hello, and welcome. Im kailey leinz. This is bloomberg best. Your weekly review of the most important Business News and analysis from Bloomberg Television around the world. What start with a day by day look at the headlines. As the week began, a deadline for reaching the brexit deal was still looming. The eu had not announced whether it would approve an extension beyond thursday, but monday, they issued a decision that triggered another phrase of parliamentary maneuvering. Extension granted. The eu is agreeing to a threemonth delay for brexit. That will take us to january 31. Because of the extension that has been granted by the eu, it takes the specter of a no deal on thursday, halloween day, off the table. But whether Boris Johnson or not gets an election is still pretty much an unknown. The ayes to right, 299. The nos to the left, 70. The ayes have it. Because the majority required has not been reached, the nos have it. Forrest johnson, Boris Johnson his bid for an election , on the server 12 has been defeated by parliament. He did not get the two thirds vote needed to pass the simple motion. The government will proceed to plan b, which is a one line bill to set the election on december 12. No deal is off the table. It is not going to happen this week. No deal at the end of the three months, as far as i can see, is not off the table. There is a version of no deal that could happen at the end of next year if we dont get an agreement on free trade. Bearing that in mind, we have dodged the next precipice, but it is not as though other precipices have not been ruled out for the purposes of future highstakes negotiations. Alphabet shares slumped in Light Trading after reporting thirdquarter earnings. The report was impacted by heavy investment in googles Cloud Computing business, which is trying to catch up with rivals like amazon and microsoft. What did you make of the Cloud Business this quarter . Like you said they are , spending and wrapping up cloud, but it is showing results. 39 in the segment of the house cloud. It is pretty strong. House cloud is going stronger than that. What we are seeing over here is for the next year, cloud will s theyenter focus a push and enterprise. They are getting success over here. They have the capacity to compete with amazon and microsoft. You are going to see cloud becoming a bigger and bigger deal for google, but it will come at a cost as they scale that business. That is what you are largely seeing in the Cloud Business. It looks like britain is headed to its third general election in four years. Labour leader Jeremy Corbyn signaling his party will seek a december vote, writing, i have consistently said we would look the ayes to the right, 438. The nos to the left, 20. The ayes have it. The ayes have it. Unlock. Boris johnson, well ahead in the polls at the moment, gets a against a very unpopular leader, Jeremy Corbyn. Very hard to see whether it will translate to a majority. If it does, britain is possibly set to leave the European Union on mr. Johnsons terms early next year. Or we could see a remain coalition coming around. Maybe the scottish nationalist, the liberal democrats and the labour party. We can look at another referendum and possibly no brexit. Third possibility we could end , up with another Hung Parliament and back with the same numbers and britain could be back just before christmas at square one. We are waiting the seventh fed decision of 2019. The fomc expected to cut its benchmark Interest Rate for a Third Straight meeting. The fed cuts rated quarterpoint as expected and drops the phrase act as appropriate to sustain the expansion from its statement. Instead, the policymakers say, the committee will continue to monitor the implications of incoming information for the Economic Outlook as it assesses the appropriate path for the target range for the federal funds rate. Taking out the active verb suggests the fed is ready to pause the easing cycle, as long as there is no sign of significant deterioration in the economy between now and the december meeting. We are not thinking about raising rates right now. There will be times in the future when that will be appropriate. What we are thinking now is that our current stance of policy is appropriate and will remain so as long as the outlook is broadly in keeping with our expectations. He was adamant about pausing. That seems to be the consensus in that they want to pause. They want to move any future rate cuts out to 2020. They dont want the market to force their hand and have to cut later this year. It seems to me that if you say you are not going to cut further unless you see serious deterioration in the economy, and you are not going to hike further until you see inflation picking up, this is a fancy way of saying pause. Apple shares jumped in late trading after reporting fourthquarter earnings that beat across the board, topping estimates for both last Quarter Results and next quarters forecast. We did see iphone sales declining. Why are investors shrugging this off . That is a good question. I think expectations earlier this year were so low after the last Holiday Season when apple missed sales targets really badly, so this has been a year where apple has been rebuilding confidence, the confidence of wall street. The holiday forecast for this holiday period beat expectations by 1 billion or 2 billion. There is nothing getting over it. The Smartphone Market is saturated, and apple cannot escape that. It looks like continuing regulatory challenges and political criticisms cannot stop facebook. The social Networks Sales rose Third Quarter better than projected, 29 . It also added about 35 million new users. It seems that nothing really hurts facebook these days. It is under antitrust investigation by four different groups, yet they have record quarter for sales. Still, 35 million new users, including 3 million of those who came from the u. S. And canada, which a few years ago we started to think maybe facebook had finally saturated here. It was a testament to how big of a business they have built that they cannot really be derailed. Not just derailed, but even hurt by the kinds of drama they are dealing with outside the company. The United States and china seemed ready to sign phase one of their trade deal. Trade deal when President Trump met with president xi at the meeting. Chile has canceled that summit. The meeting still seems to be on count. On track. Some kind of a deal will be done. The question is whether or not it is a logistical hurdle and that both sides will agree on the terms of venue and push ahead with signing some kind of interim deal, or if they put off the deadline. It is somewhat up in the air. The expectations remain that both sides are pushing for a deal and they will want to time it similar. At the same time there is an element of doubt in the process. Chinese officials casting doubt on a longterm trade deal with u. S. Ahead of that phase one agreement. While trump is saying we could do a couple phases, china and the officials are trying to send signals back to washington that you called this a phasing of a big trade agreement, but we did not really sign up for that. What we are hearing and reporting today is that china has got no interest in dealing with the broader structural issues with this economy that the u. S. Is demanding in a phase two. 128,000 jobs added to the u. S. Economy in the month of october, smashing expectations. This, despite the gm strike and despite census workers finishing up their work. You see a turnaround in retail jobs, Financial Services hiring, the revisions to september. Maybe powell will come up with a hash tag, missionaccomplished. These numbers across the board are virtually a blowout number. Quite unexpected. Dont write off the economy just yet. It has got a lot of fundamental strength. 48. 3, sub 50. Pretty much every industry, 12 out of 18 reporting contraction in october. Larry can you see how this , tension between the United States and china are starting to bleed into the manufacturing segment of the u. S. Economy . I think there have been impacts. I think our economy is stronger under the surface than folks think. I think Business Investment will be on the way back. I think on trade where there is uncertainty, i grant your point. China looks better. Usmca still looks good. Reports on capitol hill are still good on usmca. Canada and mexico are giant markets for our manufacturing, exports and so forth. That will be very helpful as well. Lets see. Lets play this thing a day at a time, a month at a time, and so forth. Kailey still ahead, a conversation with facebook chief operating officer Sheryl Sandberg. Plus, exclusive insight on the feds path forward. We have made some adjustments in our rate. We will continue to give significant support to the economy. Kailey up next, a deep dive into a flood of earnings reports with european banks front and center. About 60 of the drop in revenues yearoveryear is the impact of decisions we made. Kailey this is bloomberg. Kailey this is bloomberg best. Im kailey leinz. Lets continue our global tour weeks tops stories with earnings reports from companies around the world. Hsbc was the first of major banks to release results. Hsbc missed on the Third Quarter. Pretax profit fell 12 to 5. 3 billion. The lender also drop their profitability goal, and warned of significant restructuring charges. When you look at what we have announced today, you can see within the results a mix of the good and the less good. What has changed over the course of the year is a fundamentally different position on a few things. Firstly, the Interest Rate outlook has changed a lot secondly, i think the markets continue to be choppy, which is impacting wholesale banking business, particularly here in europe. Thirdly, issues like brexit and some issues around hong kong, like trade tensions and the current protests we had not anticipated at this point. Credit suisses third Quarter Results were boosted by gains of the key trading units, bringing a little bit of relief to the chief executive as he seeks to emerge from this scandal that dented the banks reputation. Do you feel you need to rebuild trust with some of your constituents . No, not from what i can see. There is a lot of speculation, which is very carefully fed. There were also a lot of lies, which my staff know to be lies. It is less damage than people would think because people know me. You have not had clients actually question by pulling out money . Zero impact. Zero impact. Deutsche bank still shrinking, even after getting rid of unwanted businesses. The countrys largest lender posted its first results after it decided to exit from the equities business. Deutsche Bank Reported a 30 decline in earnings. About 60 of the drop in revenues year after year is the impact of decisions we made strategically and announced in july. The underlying performance of our core business is only down to the low Single Digits in revenue terms. Given we are executing a very significant restructuring in the businesses, we think it is a sign of stability and success. Santanders thirdquarter earnings have reinforced its dependence on a driving latin American Business as it continues to struggle in europe. While brazil led the growth across the banks latin american operations, underlying profit at the u. K. Business declined 31 in the first quarter. What can you do in terms of resolving the weak core in europe . We can do a few things. We are increasing the number of customers. Second thing is improving efficiency and profitability. The third is, given our model, we have very good Growth Opportunities in the americas that more than compensate europe. B. N. P. Paribas posting a Third Straight gain as the fixed income trading business outshone is wall street and european peers. Also on forex or the g10, we barely stayed there, served at the clients, and we have adapted the bank so we can serve clients in an optimal way. In a digital way, a personal way. That led to a very positive evolution. Samsungs smartphone sales were up from last year. Shares gained as investors see a return to profitability, with a recovery in the memory chip market. What was the bid, what was the offer . I was not as impressed as shareholders are. They seem pretty impressed but there is a lot of concerns they need to be aware of. First of all, the chip business, it is a huge business, and it really fell off a cliff. The smartphone business, it had a good quarter. It was the second highest sales on record for that division. What is interesting is if you compare operating income for the Smartphone Division versus a couple of quarters ago, six quarters ago when they had a similar sales level, operating profit was a lot lower. The margins on their phones was a lot worse. Those are the landmines investors need to be wary of as we go into the fourth quarter. Components are weak and their brand of products are weak as well. Vw is cutting its fullyear sales outlook. The carmaker sees fewer car deliveries this year on a faster than expected decline in auto markets around the world. Markets around the globe are becoming more and more competitive and a bit more cautious in terms of our volume forecast. Overall, we know what needs to be done, which is basically getting our act together in terms of successful launches of new products to come, but also being very cautious. Cautious on costs and expenses. General motors announced last quarter earnings about an hour ago. It was well above estimates. I would say Third Quarter is a very strong quarter. The underlying business was very strong, driven primarily by north america where the trucks and the crossovers we have been driving the earnings power of the company. Obviously, the strike had a significant impact. It was . 52 for the quarter, and 2 in eps for the year. Separating that out and looking at the underlying performance, we remain strong. Bp kicking off the season with some strong numbers. Adjusted net income came in at 2. 25 billion, compared to estimates of only 1. 77 billion. Analysts had been lowering their estimates. Why did they go so far . What did they get wrong . If you look at this set of results the big drivers were a , strong result of our downstream business, which was helped by oil trading. That was something the analysts could have been able to track. They came it with a strong set of results aftertax. Then the mix was not quite as bad as expected, which led to a lower tax rate than first anticipated, and signaled the market two or three weeks ago. Alibaba shares rising today. Investors digesting the latest earnings report. Alibaba beating on all metrics in that earnings report, with topline sales coming in at 16. 9 billion. That is 40 higher than a year ago, but what we are looking at is a continuation of slowing revenue growth, despite those big numbers. Alibabas core Commerce Business remains dominant, core commerce making up some 86 of their revenue stream. If you take a look at the pink, that is the Cloud Computing stream. That amount accounts for about 7 of the business, and that grew by 64 in the last quarter. Alibabas biggest day of the year is still ahead of them, the big shopping extravaganza. That is on november 11. Last year, it netted more than 30 billion of sales in just over 24 hours. Kailey youre watching bloomberg best. Im kailey leinz. Facebook reported earnings this week and Beat Estimates on revenue and user growth, but there are still clouds hanging over the social networking juggernaut. The Company Remains under intense pressure for user privacy and security. Although twitter announced it will no longer accept political advertising, facebook does not intend to follow suit. In an exclusive interview with bloombergs caroline hyde, Sheryl Sandberg explained why. We are not doing it because of the money. This is less than 1 of our revenue, and the revenue is not worth the controversy. What mark said is we believe in Free Expression. We believe in political speech. Ads can be an important part of that. Where we are really focused is on transparency. We put out an ad library. We announced a president ial ads tracker, which means you can see any ad anyone is running who is a political candidate anywhere in the u. S. If it is not targeted at you. That kind of transparency we think is really important to people understanding. You also talk about investing, investing in protection. One of the things we talked about on our Earnings Call was the size of the investments we are making prepared for 2020, working with election commissions all over the world, hiring engineers, using machine, using human reviewers, doing what we can to make sure people are kept safe. So when twitter decides to go the opposite direction, does that make you question your own decision . Or do you stand by the fundamental reason and transparency you can bring . Mark has said on the call that we thought about this for years, and certainly we are thinking about it now. We fundamentally believe that political ads are an important part of the dialogue and can be important against incumbents, can be important for new views. But we also believe that Free Expression across the board is something that we stand for as a company. People all over the world are using that. Certainly politicians are using that, but people are using it. That is how you see our growth continuing. Lets talk more a little bit about politicians, because it will be a tough year in terms of regulatory scrutiny. Do you worry about talk of the Business Model being under attack . How do you see your role in educating those on capitol hill about this . I think we really have to help people understand that targeted ads and privacy are not at odds. We can do both. If you are an advertiser, whether you are the Biggest Company in the world or the smallest company, and we have 7 million advertisers, 140 million businesses using our services. You want to show an ad to women in their 50s, thats me, who live in california. We take the ad, we show it to that person, we give you back aggregated results. We can do very good ads targeting that makes ads good for people and helps advertisers reach the right person without violating privacy. That is something we have to do a much better job of explaining. Kailey coming up on bloomberg best, we will sort through more of the weeks most important Business News. The Auto Industry has a merger in the works. And boeings ceo gets grilled on capitol hill. And the head of one of the Worlds Largest snacking companies explains why political disruption might actually be good for his business. If you are affected by brexit and you dont feel so great, what is better than cadbury to help you through the day . Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Whether youre travelling around the country or around the house, keep what you watch with you. Download the Xfinity Stream app and watch all the shows you love. Kailey welcome back to bloomberg best. Im kailey leinz. From chile to china, buenos aires to westminster, civil article uncertainty and civic unrest is weighing on businesses. Bloomberg spoke with several top executives about the impact of these unpredictable headwinds. Lets start with tom mackenzies exclusive interview with the ceo of ctrip. The shanghaibased travel Service Company has seen its shares take a direct hit from the global trade tensions and protests in hong kong. The hong kong situation, yes it has a negative impact. But i think it is a onetime kind of thing. We can still make a strong investment in the long term. We know travel to and out of hong kong has been under significant pressure. Can you quantify for us how it has played out for ctrip in terms of the demand for mainland tourists who are looking to travel and stay in hong kong . The onetime impact we roughly estimated is around 5 of our total revenue. About 5 . Ok. When do you expect that to turn around . Hopefully the area will be stabilized very soon. Again, i think the government and the people will look into the future, look forward. What is the best for hong kong . We have economic headwinds in latin america, political instability. You have that affecting china as well, and not to mention the u. K. Brexit political instabilities. Does that sort of economic environment affect you from the consumer perspective for their desire to indulge . No, almost the opposite, i would say. I know it sounds a bit strange but china had one of its best quarters ever, the same in the u. K. Doubledigit growth. In latin america, yes, i think there the consumer is clearly more affected. We see a little more of the effect of the economy. The more obvious one, the chinese discussion, the u. K. Discussion, we are not really affected by it at the moment. I think the reason for that is snacking is different. If you are affected by brexit and you dont feel great, what is better than a nice cadbury tablet to help get you through the day . Now to another bloomberg exclusive. Richard clarida shared his thoughts at the end of an eventful week that features a job report and an fomc rate decision. We have ongoing growth in the economy. We have inflation near our objective. The economy is in a very good place. We characterize growth as moderate right now. The Global Economy has been slowing and that is a factor. But the u. S. Economy is very resilient, and these are good numbers. Both the gdp number and the labor market numbers have been on the upside. Thats a good thing. Those numbers, those gdp slowing and that is a factor. But the u. S. Economy is very resilient, and these are good numbers. Numbers, are they politically acceptable to this nation . It is great for economists like you to talk about 1. 9 as a center tendency, but is that politically acceptable . I will not get into the politics. Our job at the fed, we have a dual mandate. Maximum employment and price stability. We have made some adjustments in our policy rate. We think they are and will continue to give significant support to the economy. We have a favorable outlook. Lets talk about the outlook and the balance of risks. How would you describe the balance of risk around that outlook . I would say for most of the year, the balance of risk has been tilted a little bit to the downside. Not so much because of the u. S. , but we are part of the Global Economy. We have a global slowdown. There are some pretty powerful global disinflationary been tilted a little bit to the pressures. We felt it was appropriate to make some adjustments in our policy to provide insurance or cushion against a softening Global Economy. You saw that at the imf a week or so ago. Downgraded the global outlook. We think the economy is in a good place. We think Monetary Policy is in a good place. The balance of risk still tilted to the downside . I would say somewhat. Looking at the economic assessment, we are trying to understand what a material reassessment of the outlook would be for another move. What is a material reassessment of the outlook . How much data does one need to make that assessment . First of all what is the , baseline outlook . The baseline outlook is for ongoing, continued growth. Very solid labor market and inflation near our objective. We saw cumulative evidence that we were missing on employment, we were missing on inflation, and we were missing on the growth needed to sustain full employment and price stability, then we would have to factor that in. We will be datadependent, but baselineeing our outline now, the policy is in a good place. Every meeting is a live meeting. We are trying to figure out when the next meeting is. Do you need a month of data to take another look at this . Do you need three months of data to take another look at this . How long does one need . We meet eight times a year. If we need to, we have had meetings in between. We take the data as it comes in. Kailey it was a momentous week on capitol hill, with several witnesses testifying in the congressional impeachment inquiry. On thursday, the house voted to move the investigation to a new phase. From closed depositions to public hearings. On friday, speaker of the house nancy pelosi sat down with a conversation with david westin in new york. We have decided that we are going to defend the constitution of the United States. That is the oath of office we take. For a long time, i have resisted weighing the equities of whether this is divisive for the country. But what the president did visavis the president of ukraine just removed all doubt that we had to act upon that. And this is not about his personality, his policies. That is for the election. This is about the constitution. This is about defending our democracy, which the president has said, article ii says i can do whatever i want. It doesnt. Article ii makes him a monarch if he interprets it that way. That is not what our founders had in mind. A republic, Benjamin Franklin said, if we can keep it. We think it is our time to keep it. With think that times have found us. You served with mike pence when he was in the congress. What would he be like as a president . I have no idea. We havent even made a decision to impeach. This is what an inquiry is about. But you started a process. The logical extreme is removal. I dont think it is extreme if he has violated the constitution. Nonetheless our responsibility , in the house is to make the judgment about impeachment, and that would go to the senate and they would have to decide whether they are honoring their oath of office to protect, defend our democracy. Because this is what changed everything for me. People wanted me to impeach president bush for the war in iraq. What could be worse than that . That is about the election, it is not about the impeachment. I thought it was wrong that they impeached president clinton. I dont like impeachment. It divides. Our founders gave us guidance. Whatever you do, remember that we are one. I think that is important. What we are talking about now is taking us into a whole other class of objection to what the president has done, and there may be other 11 obstruction of justice provisions in the mueller report. Perhaps some of them will be part of this. But that will be part of the inquiry to see where we go. Kailey youre watching bloomberg best. Im kailey leinz. Lets resume our round up of the weeks top news in business, finance, and politics. An election in argentina unseated the incumbent president and had Immediate Repercussions for investors. Argentina is tightening currency controls. That is after opposition candidate Alberto Fernandez won the nations president ial election. It is slashing the cap on dollar purchases to just 200 a month. That is much lower than the previous limits of 10,000. The victory signals a return for peronism for the south american nation. He will take over from Mauricio Macri on december 10. It was something the market was inspecting but perhaps not as big as we thought was going to happen. It was eight percentage points. I think the big problem for investors is that fernandezs tone was not so conciliatory. It was more campaign rhetoric. I think markets are looking for something of moderation from fernandez. The good news is that for investors, macri did quite well. He got 41 percentage points, which means in the lower house of congress he might be the biggest party. There should be checks and balances on the leftist who comes to power in december. Boeing ceo Dennis Muilenburg facing u. S. Lawmakers this week, pledging his commitment to safety before the Senate Commerce committee. We are committed to answering every question that regulators have, and the airplane will fly when everyone is convinced it is safe. You had a number of senators pressed him press him on commitments to changing that relationship between the faa and boeing. Obviously there was some sort of lapse in how that relationship work that you did allow these airplanes the crash and people today. To die. But while muilenburg talked about needing to get that balance right, needing to evaluate improvements, he was not willing to commit to real change. They are trying to make changes, but i dont feel any of these changes have real meat until boeing takes accountability for what went wrong. But at this point where we have to make these changes. I dont think we have seen that yet. The bank of japan says Interest Rates could go lower if needed. Walk us through what we learned, and what it means for the lower for longer conversation. There really were no surprises from Haruhiko Kuroda. We were expecting them to hold, but Haruhiko Kuroda says they have the room to further ease if they need to, if that momentum of Price Inflation starts to wane. Overall, kuroda pretty much pushed things down the road, saying we could possibly ease further, but not right now. We are going to take away the verbiage that says we have a spring 2020 deadline. Basically he says as necessary they could perhaps ease further. I am calling it the halloween hold. Lvmh is offering to buy the jeweler tiffany. For about 14. 5 billion. Sources say the approach was made earlier this month. What is it about tiffany that would add to the already vast lvmh stable . Scale for certain in the u. S. , and also when we think about how they are doing in terms of the lower entry luxury price points, gifting, diamond selections, that would add to what lvmh already has. It would more than double the size of the ownership of lvmh in the jewelry segment. The french carmaker peugeot and the Italian American rival Fiat Chrysler have approved a preliminary plan to combine. The resulting company would rank among the Worlds Largest automakers, with a potential 50 billion market cap. Under the proposal, shareholders of each company would receive 50 of the combined entity. At the end of the day, you look at the details of the deal, it seems like fiat investors are gaining from the deal. 5 billion in cash. Peugeot shareholders are taking a higher risk. That is what analysts say this morning. The deal is very preliminary. They have to complete it. It makes a lot of sense. They are taking on more, and did a tremendous job of returning peugeot with profits that we have not seen for a long time. Bloomberg has learned that jp morgan is considering relocating several thousand employees out of the area to help rein in costs out of a possible economic downturn. They said they are committed to the new york area. Last year, they announced this huge headquarters they will be building at 270 park. Jamie said we are recommitting ourselves to new york city. They have quietly been building up locations in lowercost areas like plano, texas, where they have this huge campus. This summer, they actually started work on a new tower in plano. What i am hearing is they are, at some point in the future, it seems like they will have the same amount of employees in texas as they do in new york. Now to bank of america, which is planning to pay its employees special bonuses. It is the Third Straight year after recording record earnings in four of the past five quarters. The lender plans to give 1000 in december to eligible employees who earn 100,000 or less per year, while higher paid staff will receive a stock award next year. This is good news for the employees involved. Obviously good news. This is the third year in a row that bank of america is doing this. In previous years, it was linked to tax cuts. This year, bank of america has had a string of record earnings. Brian moynihan issued a memo today saying they wanted to share the wealth and share the love with employees. This ties into bank of americas narrative in recent months about doing good, both for its shareholders, but also for its employees. U. S. Treasury secretary Steven Mnuchin is open to producing financial crisis era regulations. In one hand, he seems to be saying, let the fed fix it. On the other hand he is saying, well we are talking to jp morgan , and looking at deregulation. What is at stake here . I think it is actually a few things here. I think you are starting to see a little bit of the blame game being passed around the Financial System right now. Initially, you had people saying, this is the fed, they let reserves get too low, they mismanaged this. The others are saying, the only reason reserves got too low is the regulations are too tight. This is what is at stake. They are trying to figure out where we stand on regulation, where we stand on trying to get this market to function as effectively as possible. Shares in microsoft rising to an intraday record after the Company Secured a 10 billion pentagon contract for Cloud Computing services. Amazon was considered to be the front runner, so a big surprise. Why is this such a big deal . Because it was surrounded by controversy. First of all, it is a huge contract. It may be worth as much as 10 billion. If you look at microsofts other big contract, it dwarfs the next biggest by about five times. It also really validates microsofts azure Cloud Software as a serious competitor to amazon web services. The fact that microsoft was able to secure a contract as demanding, picky, and security obsessed as the Defense Department is a real validation of the idea that microsoft is a serious option. The presumption is other customers, both in the government and the private sector, will take notice of that. President trump says islamic states leader is dead after a u. S. Special forces raid in northern syria. Abu bakr albaghdadi was the highest terrorist leader killed or captured since Osama Bin Laden was killed in 2011. The president recounting in detailed terms just how u. S. Special forces were able to kill this isis leader. This also delivers a political victory for President Trump as the impeachment inquiry continues to move forward. There are people in the administration who are trying to make the point that this proves that we need boots on the ground in that area. The republicans and the democrats both feel Donald Trumps plans in syria are ill considered and need to be reconsidered. Saudi aramco will start trading on the Saudi Stock Exchange on december 11. That is according to al arabiya. The ipo process will be announced on sunday. Saudi aramco earned 68 billion in their first nine months of the year. One of the stellar numbers we keep learning about the company. What does it tell us . That cements saudi aramcos status as the worlds most profitable company. The valuation is to be big question. Crown Prince Mohammed bin salman said the company is worth 2 trillion. A lot of analysts have said it is a lot lower, between 1. 5 between 1. 1 trillion and 1. 5 trillion. Bloomberg is reporting that saudi aramco will rely on local investors and wealthy families to invest in the company, so we have to see how investors value it. Chinese officials concluded the biggest meeting of the year in china. The gathering of the communist Partys Central Committee focused on politics, the economy, and hong kong protests. What did we learn on the official release . The big takeaway is rising domestic and international risk. We know the backdrop being the slowing economy, the unrest in hong kong. Internationally it is the trade war with the u. S. We did not get any Major Economic initiatives out of it, but we got signals that they are doubling down on its control, and the party ensuring stricter oversight of hong kong. There was no sense of compromise when it comes to dealing with the protest movement here. If you want to get involved in the market side question of the day, how do assets react if the fed halts rate cuts . Join the debate. Reach out to us at bloomberg tv and the markets live team on your bloomberg. Kailey there are about 30,000 functions on the bloomberg, and we always enjoy showing you our favorites on Bloomberg Television. Maybe they will become your favorites. Here is another function you will find useful, quic. That will lead you to our quick takes. You can get important context and fast insight into timely topics. Here is a quick take from this week. It sounds appealing. While barely lifting a finger, you set your thermostat, start your coffee maker, turn on the lights, fire up your favorite playlist. But what if the price of that convenience is your personal private information . Starting to sound less appealing. All of those gadgets carrying out these useful jobs are part of what is known as the internet of things, and their increased prevalence in everyday life is forcing everyone to consider a fundamental give or take comfort or privacy . Tech companies, wireless carriers, and all manners of startups are racing to connect whatever they can, and the benefits have been selfevident. Smart speakers can answer questions, order groceries, or book a reservation. We have a 10 00. 10 00 a. M. Is fine. Electronic monitors can help patients leave hospitals sooner, or allow seniors to live at home for longer. Tell me what the weather is today. Looking forward, the worldwide adoption of 5g mobile technology will allow more iot devices to talk to each other without human intervention at previously unreachable speeds. That means homes that look after themselves and cars that take over the driving. As far as industrial applications, smart factories and warehouses can fulfill their own orders or notify supervisors to problems. Yet, all this promise comes with potential downsides for the customers who own these devices. First, there is security, or the lack thereof. Even if individual iot devices are secure, more devices mean more vulnerabilities. In one such example hackers , accessed the digital thermometer in a casinos aquarium and worked their way from there through the casinos network to gain access to their database of highrollers. Things get scarier when you imagine malware infecting a selfdriving car or a surgical medical device. Other worries concern Business Practices that are legal, if not wellknown. Smart factories could be smart enough to track an employees every move, including trips to the restroom. Health trackers collect Blood Pressure and heart rate information but what if that , gets shared with your insurance provider . It is not unthinkable a customer could sell information to advertisers, or even to hostile governments. And there are already examples of potential misuse, including a 2019 report that amazon employees had listened to recordings of Customers Using there echo devices. There is also the question of utility. Does your baby need a smart diaper . Does your pet need a smart door . Does the function of these iot devices make up for the increasing electronic waste they create . Maybe we should ask alexa. I dont understand. Kailey that was just one of the many quick takes you can find on the bloomberg. You can find them on bloomberg. Com, along with the latest Business News and analysis 24 hours a day. That will be all for bloomberg best this week. Thanks for watching. Im kailey leinz. This is bloomberg. David she was born into politics and learned rules of the game as a schoolgirl. Her father was a maryland congressman and the mayor of baltimore. After moving to san francisco, she raised a family and became a rising star in California Democratic circles. Nancy pelosi was first elected to the house of representatives in a special election. She has moved up steadily through the committee structure, ultimately moving into leadership. In 2007, pelosi became the first woman to be speaker of the house. She is the most powerful woman to hold elected office in t