Companies that will start to benefit most. A lot of the companies that have been benefiting, the companies that will benefit most from this , not just the Big Companies like amazon, you have a lot of Small Companies that will all benefit from this. Peloton is one. We will get those earnings after the bell today. It will be interesting to see what they have to say. Lets get a broader breakdown of what happened in the markets. Taylor riggs is standing by with that report. Risk on acrosstheboard with tech leading the gains. Betterthanexpected results from countries like google. The small midcaps are outperforming 90 of those midcaps. They are up. I want to flip the board and show how far we have come from march 23. We are now up more than 31 , going back to the highest since march 6. We are on track for the best month since 1974. I want to flip the board again. Google had betterthanexpected results. Facebook had some positive momentum today. Tesla is still waiting to come out. Chris out earnings are still coming out as we speak. Product revenue, 15. 8 billion and other revenue is coming in at 19. 2 billion. Total growth on revenue is 50 yearoveryear, beating expectations. Google was showing some strength there yesterday. Is microsoft the clear number one and number two after Amazon Web Services continued to show growth . Flipping up the board here again, i want to end this on the broadbased know we are seeing across the market. Pelleted and totally shocked of the market. Peloton totally shocked of the market. One thing we want to mention that crossed my croissant is that covid19 had a minimal impact on tobit come total company revenue. We are waiting for more results. They are really hamstringing executiveorporate ability to do anything. Microsoft beat analyst estimates. Is 1. 40. Quarter eps topping the consensus estimate of 1. 48. We are waiting for ebay and facebook to report earnings as well. Qualcomm just came out with numbers. The chipmaker reporting a Second Quarter eps . 10 than what estimates were. For this quarter, it is actually giving some kind of outlook here. A Third Quarter revenue of 5. 2 building here. The consensus estimate is for 4. 9 one billion. Adjusted eps of anywhere between . 60 and . 80. Analysts are looking for . 77. Comments coming from qualcomm in a phone interview. Just looking at how the stock is trading, qualcomm shares are zooming higher. Romain still with us, the cio and head of global equities. A trillion dollars under management. As they start to trickle in, how much stock are you putting into these one q numbers . We are not putting a lot of stock into what is being reported. We will see a continued loss of clarity and a lot of variance. The two q numbers, we will start to see those. The Second Quarter between april and may is going to be even weaker than the First Quarter. That will be interesting. Were hitting the bottom right about now versus the first. It will be the continued outlaw dialogue with judgment that will be interesting. The way we return to business is not clear across the board. Speaking,s you were facebook numbers crossing the wire. Billion estimated. The company is facing a time of unprecedented uncertainty. That is facebooks words. Premuch hitting the estimate on the nose for eps, slightly beating on revenue daily active users for quarter one. That is the average estimate. The company is saying its business will be impacted by issues beyond its control. Those are the headline numbers on facebook. Scarlet we have already daniels coming out with results. Midlandr daniels reporting results. The revenue number is the one that disappointed. 14. 9 billion dollars. . 64 for the eps, higher than what was look for by analysts. Revenue fall short. As we go through the different numbers and look at Health Stocks and trading in afterhours trading, i want to thank our guest, sarah maliki before the earnings overtook us. What weu for telling us should be looking for and listening for when executives host them. We will bring you more details on facebook and ebay numbers as they cross. This is bloomberg. This is bloomberg, broadcasting live to our viewers worldwide. I am Romaine Bostick alongside scarlet fu. This is what did you miss . We had a rally in the stock market as investors look past the gdp numbers. It showed a contraction. Theyre focusing on what is to come. We had a seven week high the s p 500. A big rally in small caps as well. After the market closed, we had from microsoft and facebook. Microsoft reporting revenue in the. At 33he time that ended billion. Earnings per share coming in at 1. 40. About the talk slowdown in transactional licensing in the final week, even as its more personal Computer Division benefited from increasing demand from people working at home. The other big news is that decision by the Federal Reserve, no decision but the outunication we got did lay a pretty stark assessment of the u. S. Economy and of course how much the fed will do to continue to try to underpin some sort of Economic Activity. We want to bring in seth carpenter. We want to get his thoughts on what we heard on jay powell and what we heard out of the fed over all. When you listened to powell today, you came away with the sense that the fed was committed to using as much any Mission Ammunition as it has to make sure that the markets continue to focus and that the economy remained on some sort of sound footing. What was your main takeaway . I agree with you. I think today was j powells breast best press Conference Since he was chair. I took away two things. There is still an emergency footing. They are trying to figure out how to put out fires. How to stand up at main street facilities. They have not done anything there yet. When it comes to the questions like how long will you have the fund rated zero . What is the outlook for next quarter . They dont know yet because they dont know where the bottom was. I think it was great that he laid pretty heavily into the physical branch of the government to say this is going to take more than on a terry policy. Central bank cannot carry all of the water. There were clear fiscal packages so far. I think that powell was pretty clear when he said there needs to be more. We are getting our name on that q1 revenue number. The company is saying that is negative Free Cash Flow, q1, it hundred 95 million. The estimate was a loss of 604 million. The company is saying that q1 was impacted by lower delivery. Scarlet these kinds of numbers coming out and the perception that investors are given, even as we are not getting a whole plaguesisibility, that the Federal Reserve as well. You hear jay powell talk about how they still have a lot of tools in their toolkit and they wont hesitate to use them. What do you think that looks like in three months from now . Six months from now . When the data continues to get worse . When markets may be in a different direction . Seth what he means is the powers they are using are these facilities where they are buying Corporate Bonds and lending to nonfinancial corporations that they would now to millie normally not think of lending two. Billion still that 290 of that treasury capital, that treasury guarantee left. Y have been giving that up leveling that up. About 900ing billion and 1. 5 trillion. That is what he means when he says they are not out of ammunition. These lending facilities are not economy is nothe is contracted sharply. On the economy grows again, businesses will still struggle. I think he is trying to set them up to keep these lending facilities around to support Economic Growth and surpass the outbreak in the economy. Romaine lets go to one of the main pillars. When powell was asked about this, he said not only do as long as Inflation Expectations dont remain anchored, we should not see deflation. What are the anchor to at the moment . Seth it is hard to know. He probably has a point that people have downgraded all of their Inflation Expectations super low. Inflation gets weaker from here in our forecast but it does not go below 1 . Month, thee one print that we got for last month was negative month on month. We will probably get another month on month negative print but i think it will start to gradually go back up. As long as we do recover from this contraction, the economy gets back on track. All of the discussion over the reopening of the economy and starting to slowly undo some of the lockdown we have been stuck in over the last five weeks, which part of the economy do you expect to not bounce back to normal but start to see the green . Which part of the economy has the brightest prospects . Seth that is a great question. I think a lot of manufacturing is in good shape to bounce back over time. The Manufacturing Sector is much smaller than it was 30 or 40 years ago with more and more automation. Fewer people have to be there. Social distancing does not matter as much. It is a question of supply chain. That is one area you could start to see some reduction. What we are also learning is that different types of retail from Retail Grocery stores that are doing heroic jobs to keep people shopping, amazon ramping up a bunch of their warehousing jobs, i think we will see an evolution there in retail. It was already changing over the past couple of years because of online shopping. I think that evolution will get spurred on. So great to hear from you. We will talk to you soon. Just to recap those numbers we got out of tesla. The q1 revenue numbers coming in at 1. 5 billion. They said they had cash flow of 895 million. They said they were unsure how long it would take suppliers to ramp up production. Of course, it is actually saying that it is not able at this time to provide any sort of hard guidance on delivery numbers, production numbers or any sort of financial numbers at the moment like most companies out there. We will break down all of the earnings out there coming up a little later. Stay tuned from new york. This is bloomberg. Working on the covid19 response in china in midjanuary. We are now in week 15 in china. We learned some important things from that experience. The first is that there are phases that every market around the world goes through. The first phase, we refer to that as to mitigate and retain contain phase. That lasted for three weeks in china. People were asked to shelter at home. Businesses shut down, social distancing. To with a focus on how flatten the curve and slow the spread of the virus. Then we transitioned into a phase that we called monitor and adapt. That means we begin to reopen stores but we reopen them with different store protocols. Amplifying safety, oftentimes it is for mobile orders for pickup only. We did that in china while we monitored the number of covid cases that might pop up in certain cities around china. In the u. S. , we are now just coming out of the mitigate and contain phase. We have been in that for six weeks in the u. S. We plan to open reopen over 90 of our Starbucks Stores by early june. Next week, a majority of the stores in the United States will reopen. We will reopen using safety protocols were developed in china to adapt to the u. S. We will reopen in a way that provides customers a safe, familiar and convenient experience. We are excited for next week. Many of our starbucks customers are referring to it as homecoming week. They have been shuttering at home. They are ready to get out and do something. Something that is safe and responsible. That is the balance we were to strike during this balance and adapt phase. Back online, you have the vast majority of your in china. And running you have modified your hours. Some of them are down somewhat. It is a combination of all of those things. I cant necessarily attributed to any one of them. Forur store protocols, china, they are opening for customers to cover takeaway in china. Some of the stores have limited feeding. In the u. S. , precovid, over 80 of our customer cases were for takeaway or to go. The u. S. Consumer was much more on the go and we think that opening in the u. S. , we will get very significant result. The positive news is every week we see Continuous Improvement and china as we monitor and adapt. We turn the dial up slowly and open up other services. As we begin that path in the u. S. , we are very optimistic that by the end of may or early june we will have a much better perspective on how quickly this will recover. Any projections on how the unappointed situation might affect consumers going back to Starbucks Stores . We are in a recession, it will get worse. Could this put downward pressure on this . Kevin we have gone through recessions in the past. If that is any indication of how customers will behave, we will be very strong. Lowere those longterm, customers. What we offer is an affordable luxury. Even in times of recession, customers are looking for something to uplift the everyday. If it is there daily starbucks or if they cut back a little bit , there is an affinity that customers have for starbucks. We worked hard to earn that loyalty and trust. That is what has carried us through recessions in the past. I believe that was Kevin Johnson of starbucks, the ceo speak with david westin. We were just trying to figure out if yours done speaking. Lets start with ebay earnings. Its fullyearing of guidance. In some co. s are withdrawing their guidance, ebay says it is sticking with its fullyear forook for revenue of 9. 6 9. 65 billion. Romaine a lot of people Pay Attention to that negative Free Cash Flow in the First Quarter. 895 million versus a profit in the previous quarter. Of course, these numbers continue to be erratic. They cant say that really provide any guidance with regards to when it will be able to ramp up production or anything else. I believe we also have microsoft in as well. Sales rise. Rosoft this gave a lift to its cloud services. Microsoft showed a slowdown in personal computing benefiting. You can put microsoft in that category of companies that benefit from the work from home phenomena and they remain as we go through this season. Lets take a look at facebook. Those numbers are coming in. Those Companies Report in 18 increase in Service Order revenue. Advertising revenue did manage to hold up in the quarter. One thing i want to point out really quickly, we are giving you a lot of these estimates that were out there. They came down pretty hard. On facebook, on that revenue number, that revenue estimate came down by a billion dollars. These beats are beating a very low bar. There is optimism here. As whatre not as bad some people thought. The founder and ceo will be with us in a few moments when we come back from the break to help us go through all of these earnings. That is coming up next. Stay tuned. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Quick tesla tesla did bring through 900 million in gas in the most recent quarter. The company did say it still has the capacity to produce on that 500,000 plus vehicles this year to produce and deliver. The company says it is not clear when the suppliers will be back up and running and what it can meet some of those expectations. The company is not providing the natural forecast. Facebook reported in 18 increase in firstquarter revenue. Showing the advertising demand still remains. That is what everybody wants to say. Lets look at microsoft as well. This is a company that is benefiting from its work at home business. The First Quarter revenue rising. 15 yearoveryear. All in perspective, i want to bring in lead rogan. The estimates have been dropping. Drogan. Bring in lee the estimates have been dropping. We are guessing on a lot of the First Quarter numbers. We are still in this lockdown mode. Did the buy side have a better read . Was it similarly handicapped . When we look at microsoft, what we are interested to see is what happened in early march. When everybody got wind of the fact that this would be more than just a china specific thing. When we look at microsoft, the content is went from about 34. 4 billion it did dip a little at 34. 3t but it ended billion. The company crashed at 35. The estimates went down from way to 33. 7. L the the buy side was expecting a higher number. I think that is why you saw michael rice microsoft rebound so quickly. It is an old axiom but maybe it is new, you pay your staff, Enterprise Staff bills before you pay any other creditors. Companies, these even ones as big as microsoft are getting such a huge multiple. Seeminglyy are recession safe. On facebook, we saw the sell side come down. Of course, advertising, it looks like for now, in one q, both of those metrics held up. Did. They we knew that the news from snapchat would be good for facebook. You will see the same thing and pinterest. Google was ok. It was not as good as we were staying with facebook. I think there is a lenoir fear with google coming into q2. Withlittle more fear google coming into q2. Drop inoveryear add revenue it speaks to the tension clearinghouse they have. Noncyclical in terms of the economic cycle. We are dealing with what was a advertisingor most and media companies, a major drop in ad revenue and demand. Facebook just shifted around the dollars on who can advertise, who is advertising and how much it costs them to advertise certain products. It is an amazing thing that i dont think the market has priced in yet. You are seeing it after hours. It is pretty amazing. One of facebooks new videots is this new Group Product to compete with zoom. Facebook wants to offer to consumers as opposed to enterprise customers. Could you think the move to launch this new group video project is a defensive move or can it add to the top line and eventually bottom line . It feels similarly defensive productng out a dating that has not gone very well. A platform. Om as if you look at where the future of their business and where it is, it will be in licensing the Actual Technology off to a million different vertical eyes instances that build new remote businesses on top of it. Facebook as a social network, i think 300 million v. A. Use says something about the fact that they dont need to do everything in spite of facebook. If they lost that piece of the social network that may be really big in the future, i dont think it is about the justology so much as it is that there was no motive around this speaker said. I want to get your thoughts really quickly on how these stand home, work at home. They are down after hours. The earnings were up, they were better. Maybe disappointing a little bit. Lee huge momentum coming into the room on the revenue side. Went from about 168 million to 181 million right on the numbers over the course of less than two months. The stock was pricing in. When we look at the longterm gross of the company on the revenue side, they have been doing 20 yearoveryear. Number this a 41 year. Next quarter is 48 . If you are growing mid40s yearoveryear and there is a demand for Everything Associated with telemedicine, the longterm benefits are pretty even. Great to hear from you again. Always great to have you on. We hope to hear from you soon this earnings season. That was lee, he is the founder of the firm that tracks these estimates. Firsto to the bloomberg quarter news desk. President trump says the coronavirus social distancing guidelines will be fading out by thursday, counting on states taking charge as they pivot toward the opening. Trump administration is launching a plan to cut the time needed to develop a vaccine with a goal making enough doses for most americans by years end. The program is called operation work speed and will pull companies andte the military to try to cut the Development Time or a vaccine by as much as eight months. The nations top Infectious Disease expert is sounding in optimistic tone about the potential coronavirus treatment. Dr. Anthony fauci says data shows clearcut, significant, positive effect in diminishing the time to recovery. Governmentfrom u. S. Run study shows these primitive drug helps coronavirus patients recover more quickly than standard care. Sales of tickets to and from beijing surged. They are relaxing quarantine requirements from low risk areas. The National Peoples congress will start an annual session may 22. That could potentially bring thousands of people to beijing. Up chinese are ramping production, competing indian businesses want to get back to work as well. Businesses are urging prime this. Er modi to lighten global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Breaking news. Exxon mobil declaring a dividend of . 87 a share that is unchanged from the previous quarter. We know the company had been spending. It did that before his Earnings Report on friday morning. We want to shift gears here. If you look at what banks are doing, Standard Chartered is putting aside 966 million. With the spoke earlier bank cfo about the First Quarter performance at the firm. Here is what he said. Our top line was up by 6 for the quarter. That was in a time when the onavirus was impacted impacting in northern asia. A very strong start to the top line. There has been a need to top out the provisions, even in the current provider environment. Young line profit was only down 10 . Im actually ashley coming to this strong. We are now seeing that cross into europe. The hope we have is that the northern asian markets will be the first ones to recover from this. Given they are the most profit of mark critz profitable markets. We should actually come out of this earlier than some and particularly even northern asian markets which are our more important markets. It is great that youre already look into the recovery. If i could get a sense from you on the estimated credit impairment for 2020, hsbc gave a range for 2020 of ecl provisions seven and 11n billion. Can you give us a ballpark figure of the credit repairmans . Credit will be difficult to predict. There are many moving parts here. What this will be most dependent upon his two or three things. Firstly, the success that the companies have moving out of lockdown periods. If it takes longer, obviously there will be more likely credit repairman. Especially when the states kick in and helps them get through the time. This will help them come into full effect. Prices will clearly play a role as well. We have not put a number on the fullyear. It will be higher than in recent years. We are well capitalized and will able to afford it. We will see how the year pans out. I caution the use of language there. Cautioned use of language there. 505 billion dollars, you says you say there will be an explosion in health care and commodity care. The 505break down million between the commodity trade and their Health Care Provider . You are right about this. Half of our chart is what we call phase three. That is where we have a discernible comment problem. We dont comment on client situations. A lot of that has been wellpublicized. The charge we got in the time has been racked up. You would does listening to the head of Standard Chartered. Boeings Credit Rating is being cut. That is the lowest Investment Grade rating on boeing. The Credit Rating downgraded, the outlook graded stable. It is time for smart charts with Abigail Doolittle who is standing by with that. Abigail. Abigail i would like to take a. Ook at a chart it is a longterm chart of the bloomberg commodity index. Shows a 50 year pattern. The left side is not showing very well. You will often see a pattern of this nature but not for this index. Drop l be another 70 pattern. K about this i cant think of a better person to chat with me. You have been very bullish over the past 10 years. What do you think of that chart . Before we take a look on the s p 500 chart. If you look at how Commodity Prices acted in the last bull market between 1983 and 2000, this index made zero progress during that entire 17 year time. Indicates we see it as the low end of the range. That is great. You dont think that is going to produce you think the stock market will like look commodity pricing. Now lets look at your s p 500 chart. This presented an opportunity for longterm investors. That is our focus. There were over 1300 new lows on the u. S. Stock exchange in march. That is the second ties secondhighest count ever. I that is not capitulation, dont know what is. That is why we think that was an important low. Before looking at your last chart, do you think that we tested that love . If we do, it sounds like you dont think it will be anywhere close to the lows. What do you think would be helping . Any possibility of any sort of retest was severely diminished this week. The last time we were talking about this chart, you are looking for 1600. It is of 40 from the march low. Up 40 from the march low. Rest of 2000 was hardhit through the collapse, falling below december 2018 lows. Now it is back above this threshold. This is called a failed breakdown. It is indicative of exhaustion. Stocks continue to be rerated higher. This is the big level here. Very well, great stuff as always. Take you for joining us from new york. This is bloomberg. Welcome back. Weisenthal is joining us at the end of the show today. I know your eyes had to be on that gdp report we got this morning that confirmed what a lot of us already knew. That is that the economy is in contraction. Hit ine crisis really the final months of q1, march. A huge chunk of Economic Activity down with it. Especially in the Services Area of the economy. Interesting even in health care services. This is a healthcare crisis. Are because so few people going to doctors and dental procedures and so forth, that took a major hit. Andeard the very serious sober tone from power. There is some giddiness in the stock market right now. Some of these earnings were not reflected in the fed assessment. Seriouss expressing how of an economic crisis this continues to be. And also, the willingness to do more. Absolutely. The contrast between markets and the real economy is pretty stunning. Chair powell did address that. And he talked about the markets, he said the fed job is to make sure that the markets are working. I wondered what you thought about his comments when it came to inflation. Michael mckee asks a great question about whether we would see a deflationary scenario that would require a fed response. He kind of didnt want to go there. They knew that expectations for inflation. I think it is pretty clear that the main concern that powell has is the extraordinarily high level of unemployment. When it comes to inflation or deflation, nothing is more important. Important to powell than fighting that. We asked Steve Matthews about the degree to which this jobs crisis affected minorities and other groups. They were seeing a lot of progress in the labor market up until two months ago. There are still some predictions that we could see a relatively quick recovery. What do you make of those. Joe i think that facebook is insighta very important to what were looking at. We were sandy and markets stabilize into april. This is reserving cap reducing capex. There is the short, sickle aspect that we know will bounce somewhat in april and may as more parts of the economy open up. That is a question of if the bigger, longer moving decisions, capital expenditure, hiring, will that counteract the decisions that the Companies Made to pull back on those . That is a nice way of summarizing that. Thank you for dialing in from austin. Thank you for watching. That does it for what did you miss . Bloomberg technology is up next. Have a great evening, this is bloomberg. Quest this is bloomberg technology. A huge surge for the nasdaq, s p and dow. They spoke, tesla and microsoft all skyrocketing. They all report better than expecting expected earning results. Facebook saw a decrease in ad results. In april, they are see
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