Facebook falls, users are spending 50 million hours a day lesson the social network and happy about it shares set to open at the record. Its a huge day for tech earnings, mike soeflft, alphabet and amazon, all on tap after the bell. Futures signal a sharply lower open obviously a whipsaw week so far. Facebook is the top story. Up in the premarket, the social network post better than expected forecasts and increase in ad sales despite the time spent by Users Falling by 50 million hours a day. Mark zuckerberg last night on the earnings call. The most important driver of our business has never been time spent by itself. Its the quality of the connection and thats why i believe this focus on meaningful social interaction is the right one. The first ever quarter on quarter dau decline in the u. S. And canada they say its not a trend. They say its not a trend i think youve got to believe. The market probably doesnt believe in them because this thing is selling at a multiple almost the market multiple in 2019 i would say that what happened no change there. I think it didnt even it didnt erode as multiple, the large numbers being defied here. On the Conference Call, its not going down, down, down off the headline and the stock doesnt people probably wonder why if you look at the timing in sales, sheryl sand berg saying when people spend time viewing more posts because interacting with family and friends and not involved in longer posts which is like autoplay, we have actual actually more mondayization opportunities and there it is. Lets imagine the nfl. Lets say the nfl has 100 commercials and we go and buy doritos and turn on general hospital, they are not going to let users be overwhelmed by commercials. Like the nfl has done with the clock. Exactly you no yw can charge more. I almost feel like the analysts are not on facebook. Im on facebook with my wife and they took out a lot of ads that were my fungus. Com on the third post you know, instead they have these great posts that are now ads very in sync with what you talk about when youre on with my wife, ads about 30yearold women do because sometimes she watches in her 50s. It is finally relevant were no longer in lets just show them anything, you know my copper. Com is gone. Those who are bullish who say, i talked to a couple of investors and 6 million advertisers, only 2 million on instagram, long way to go there with the numbers themselves staggering thank you. They dont believe the cap ex guidance, 6. 7 billion last year. Always guides to a high number but many believe they wont get there when they use it as a percentage overall and it is going up so much 6. 7 billion last year, how much will they spend this year . They think less and thats Gross Margins are going up. Thank you. Then theres the belief that the losses in maus and canada u. S. Is not a trend line and stopped and they seem to import confidence. This isnt snap were not dealing with snap where frankly its like, wow, theyve been so right. These guys are heavyweights. They havent given us last time they gave us guidance on time spent was april of 16 where they said 50 minutes a day, right would it surprise you if that number was lower now yeah, look, you dont spend as much time thank hef vns lets default and talk nba versus nfl what a great thing, nfl now the games last four hours, not four hours 40 minutes because of the extra point is kicked right after. Nba, you tell your wife, theres only two minutes left, dont worry. And hour and a half later youre there. But everybody hates that so i mean, zuckerberg is not an idiot. I know what people hate. They hate a bad User Experience. Suddenly they decide maybe hes hurting the business and do everything to help the business and he saw this coming theres a lot of Things Research saying theres a social media fatigue. You think he doesnt read that hes addressing it correctly and has five more things to monetiz dz e and dropped them in a Conference Call. Whats app, monetiization there. Years are blowing away and you should be more cautious. If were selling at the infinite multiple amazon does, i would be more worried. The read through on amazon, if they dont below the number they are choosing not to. Every aspect of amazons business, whether it be online, cloud, whether it be advertising, it is they are the amazon this number really, amazons numbers should justify this breaking of the law of large numbers i understand, facebook selling 35 times earnings. I would say this may be the beginning of something but its selling well through clorox and Procter Gamble and then match it with alibaba, better growth than alibaba. Of course, we know about the year its had from a policy standpoint and as you say publicity standpoint i think wefl have a piece of sod talking about the challenges in 2017. For 2017 was also a hard year the world feels anxious and divided and that played out on facebook weve seen a bbus, including infeerns from nation states and spread of news its false and sensational and polarizing we have a responsibility to fully understand how our services are used and to do everything we can to amplify the good an prevent the harm this is my personal challenge for 2018 to your point, not blind on controversies. What he did was write his congressional testimony for when hes called in i actually sacrificed. Look at the amount of time spent, 50 million hours lower. We did exactly. Congress we came in and we hurt our business alphabet did that last quarter, they should have a blowout because advertiser s are back they are not your buddies at all. I did that to be gra tu us to. One day they may be my buddies again, were in a good place, were fine. It was one of those can i say at 4 30, the way that these stocks were trading you cant be on three calls at once and the analysts all follow the same stock. If in facebook to your point, people who are sellers with the stock down 8. Very impressive. And not waiting for the call and saying those are people. So the patriots jump into an early lead, 140 they are selling the eagles and it turns out the eagles rally in the Fourth Quarter that First Quarter doesnt mean as much unless youre playing some box okay i got it. Okay. There you go. 283. 283. Thats why the falcons came in with a head of steam and beat the eagles in order to rechallenge, that narrative didnt occur the vikings greatest defense on earth. One game ahead of you, stop replaying the previous one its going to be all that matters. I wish it were minus 5. The patriots play were going to talk a lot of football tomorrow. More tech earnings and microsoft better than expected results, a 5. 3 billion boost in Cloud Computing revenue. Baba coming in a bit shy but revenues ahead Cloud Computer revenue more than doubled its core commerce revenue up 57 separately at a 33 stake in its affiliate and financial. You cover baba better than anyone. Real quick on this, they had a 37. 5 Profit Sharing and arranged that back in 2014 you may recall this goes back to a real big dispute they had when they transferred the business out of alibaba to the consternation of yahoo at the time and then came to an agreement in 2014. 37. 5 Profit Sharing that goes away its not a purchase here they are simply saying no longer will we take earnings, we earn 33 of the company why now . It appears baba believes it can get approval from the chinese regulators, that was why they didnt originally continue to own that business that became ant financial and went with the 37. 5 Profit Sharing apparently or one would think things have changed from their perspective to the point they can get it through the prc that is expected to get approval, though we cant say with any sernts and they do that as for the quarter at alibaba, strong, but not as strong as some had hoped they been buying a lot of Grocery Stores and higher sales and lower margins and okay, maybe it overall it works out but what kind of multiple do you want there for that. And ant financial thing, most recently valued i think its 60 billion on the last equity raise they did there who knows what its worth . Maybe 100. They are going to go public at some point, though not this year that changes investors approach because now youre doing the parts as opposed to an incoming earning streak from ant. When you see the value of myosofmy microsoft, azure, that is a gigantic business, up 98 . Amazon will be amazing and alpha get could be amazing when i look at microsoft versus alibaba, i would rather own microsoft. Why i think its no opaque. The numbers are fantastic and accelerating and youve got gaming doing much better, you have windows 10 doing much better and intelligent cloud doing much better and higher multiple i think microsoft, the reason its down, it ramped at the bell it went to 95. 5, those are looking at that, whats the matter with that quarter it had a funky close but microsofts quarter was amaziin amazing. Im not even talked about linkedin. Hes very low key im upbeat. Microsoft had been strong but alibaba up 18. 5 this year up too much. It does tend to do that, run up into the numbers and then theres a mixed response if not a down response. Then you can get buyers could come in there. Its not a bad story, its just that we had microsoft and facebook im looking at tonight, i think alphabet will be good. Which call do you listen to amazon because its really shorlt they are only 12 pages and they do it and just get you in and get you out. Why do they have to the irishman is being filmed next to me. And joe pesci, deniro, do you think im going to focus on alphabet. Thats i didnt follow that. Irishman, 100 million budge and i have to go to minnesota to watch the eagles play. Greatest story ever told. What are you doing here i have a lot of stuff look at this this is called homework. Do you know what homework is you always have your little thing. You knew alibaba, i had the rest of the s p. Weve got to go. A lot more on earnings and mastercard, almmndor quco a me. We have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Were getting auto sales, ford up first. Phil has it in chicago. A little bit better than expected a decline for january, which is not a surprise everybody is expecting to see declines across the board. I want to point out one interesting stat and something that i know jim will be interested in, fords transaction prices last month topped 37,000 per vehicle thats an increase of more than 2,000 per vehicle i think were going to see this with other automakers as well, increasingly as people buy suvs and luxury suvs in particular, youre starting to see more and more people push the transaction price close to 40,000 a vehicle. We get the number in a few minutes. Phil, at what point do we see a ford basically saying were going to take our dividend to 8 if we have to . They used to return capital in the 80s and 90s, this is a cash machine. I wouldnt be surprised, the other thing youll see from automakers, maybe not this year but sometime over the next couple of years, i bet you start to see them split. Mobility services will be a separate company and spun off from manufacturing of vehicles youre already seeing it with suppliers and wont be surprised if we see it with the automakers as well. Phil, well see you in a couple of minutes. Mike jackson sees the annual run rate going down to 16. 8, because you have 4 million certified preowned back to market and price gap is 14k now. Its a big issue and one of the people are saying autonomous vehicles, are chips going to be cyclical auto sales is done ford is reacting to that, not as international as gm. I say that if phil says what they split, they split into two, that would be brilliant. I want mobility i want that more than i want tesla. And im looking at you so you can go now. Were going to talk a little at t. Lets do at t and time warner, right . Time warner numbers were go at t numbers pretty strong as well this morning or at least i should say when they were reported after the close yesterday. John ledger may take issue with that look at the stock, the market is rewarding them to the tune of over 3 as you see right there what do they add post paid phone ads 229,000. That was a nice ad, churn. 89 and revenue beat came from Wireless Business Solutions and wireless equipment revenue now this continuing trend that we watch so closely here, namely the rise of the cord cutters and direct tv now added 368,000 subs and 1. 2 million subs, directv itself lofs 147,000 subs when you add in the uverse customers down 60,000, you can see there are those that say at t is giving up higher customers for lower and its a real service what john stevens said on the call, the cfo was hey, bundling is key for us, where were bundling with broadband, wireless products, bundling or bundling wireless with broadband or in other ways, they have seen significant improvement. 170,000 homes added bundled with wireless and satellite tv product. They love bundling there particularly when it comes to Broadband Wireless video and that continues to be strong for at t well see about time warner, they didnt have much to say than they said in the past, about expectations for winning the case. Is at t the bigger winner in tax reform they are one of the larger winners and its interesting Randall Steven son said when youre looking at your aftertax returns, it just changes how you think about your investment thesis, this goes as an interesting template across Corporate America, for capital intensive businesses it changes the profitability equation on fiber as well as on 5g, how you think about rural and first net. It goes on to say listen, its hard to say exactly all of the decisions were going to make as results as it relates to investment and premium content in media but the fact is theyve been planning this for some time and its here and real were digging in and asking what are the projects we want to be investing in and the initiatives we want to be investing in that continue to drive growth for next five or six years. We take entirely off the table the notion that dividend could be unsafe. I see multiple years where dividend goes up this stock became much cheaper last night, despite the fact john ledger says when you spend 49 billion on direct tv and lose 544,000 in one year, he questions that. A lot of people are questioning that because youre giving up higher paying customers and lower paying at directv now. How about when time warner merges with them it could be brilliant. At t became a must own. Gives credence to the case that even if the deal were to break, the stock would not suffer. Right. Hbo numbers were really Strong Revenue up 9 really good quarter. He likes the president. Well get cramers mad dash well get to ebay, paypal, qualcomm, ralph lauren, ge, chipotle and starbucks in a minute each day our planet awakens with signs of opportunity. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Weve got an opening bell about six minutes from now we have so many earnings to get to and other related stories surprised as paypal and ebay. Two great quarters but only one is shining, ebay is up big they are going to switch beginning 2020, they are going to shift over away from primary merchant of basically merchant of name, if you want to call it using paypal. From paypal to a dutch startup, is that right . It doesnt matter. Dan shulman had been telling me this was going to happen and prepping me and saying dont worry when the stock was 50, it will be up so much you wont even know. Ill tell you right now, they were ready and its a transition and its not going to happen overnight. Everyone is panicking and may i just say while i panic, dan shulman has enough to buy you now nine times sunday. They are not even moneadvertising venmo yet. Let it come in this is going to be viewed as a shock to everybody except those who follow it closely. Theyve been giving you hints but in the past they always reach a new deal. You always felt wait a second, its advantageous to use Paypal Paypal will be dropping as a percentage for the sales on ebay. Do you know anything about the Dutch Company . I dont think they do either frankly. Its a startup. Most of the sales are overseas. Well, look, ebay was a great quarter. I dont want to take anything away from it im saying the panic in paypal is misdirected and it was going to happen some day dan shulman told me it was going to happen. When it happened, they would be ready. Those who panic, i have to go. Youve got to go. Weve got to go. Well talk a little qualcomm and service now numbers, weve got so much other earnings to get to. Blackstone down, shouldnt be on that. Fire fighting is a very dangerous profession. We have one to two fires a day and when you respond together and you put your lives on the line, you do have to surround yourself with experts. And for us the expert in gas and electric is pg e. We run about 2,500 2,800 fire calls a year and on almost every one of those calls pg e is responding to that call as well. And so when we show up to a fire and pg e shows up with us it makes a tremendous team during a moment of crisis. I rely on them, the firefighters in this department rely on them, and so we have to practice safety everyday. Utilizing pg es talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation