‘AI Craze’ Powers Finest Week in 2024 | Bloomberg Markets: The Shut 04/26/2024

Live from Studio two here at Bloomberg'sheadquarters in New York, I'm Sonali Bassett.And I'm Katie Greifeld. We're kicking off the closing bell herein the U.S. I am pleased to report that it isFriday. So happy Friday to us all and a happyFriday to these markets. We are looking at a big rally on ourhands. The S&P 500 currently up about 1.2%.Even more dramatic. You take a look at the Nasdaq 100, upabout 1.7%. We got some hotter than expectedinflation data this morning, but it.

Wasn't as bad as it could be.I guess at least that's the message behind the narrative today.You take a look at the small cap index, the Russell 2000, also seeing a bit of arelief rally here, currently up about 1.1%.And that love is spreading to the bond market as well as technology.You take a look at ten year Treasury yields currently down by about threebasis points. And we're looking at U.S.stocks heading into their best week of the year.Katy tech heavyweights Microsoft Alphabet are sending a clear message toinvestors, and that is that I bets.

They're paying off.Meanwhile, over in Japan, the yen is sinking to a fresh 30 year, 34 year lowagainst the dollar after the Bank of Japan signaled policy will stay easy andof course, amplifying speculation that authorities may intervene to stop thedecline. And back in the United States, the Fed'spreferred inflation gauge core pieces staying sticky, indicating progresstowards the central bank's 2% goal, has stalled, enflaming concerns that thecentral bank may push off rate cuts further out.And you take a look at how that pricing is being worked out in the markets rightnow.

As it stands, the first Fed rate cutthis year is priced into the November meeting.About 24 basis points of easing are priced in.I'm going to go ahead and call that a quarter point cut.You take a look at the full year, the amount of easing priced in throughDecember. We're at about 34 basis points.So we're talking about one cut and a little bit more snarly.Of course, we've seen this pricing sort of wiggle a little bit after this datathat we got this morning. Again, a hotter than expected inflationprint.

But after what we saw with GDP and thebig blowout we saw there, when it came to expectations, maybe a bit of a reliefthat it wasn't too much worse than expected.Now, let's kick things off over here with Brian Jacobson.He's chief economist over at Annex Wealth Management.We're talking about how stocks are ending on a high note.But of course, that comes after a really tough tape last week.How do you think about this rally driven off of the earnings we saw in the techsector here and how much it has a potential to really last?Yeah, thank you for having me.

And I think that really enjoy it whileyou can. One of our themes coming into this monthwas the idea about April showers bringing May flowers and that we wouldperhaps have a better opportunity to enter some of those positions that we dolike for the long term. And maybe the market has given that tous. Not quite sure we're out of the woodsyet, especially given what's on the calendar for next week.Could be a very exciting week. In terms of the FOMC meeting, we get theEmployment Situation report, but so far it does seem like some of the rally thatwe're seeing, it has broadened.

We know that it's not just about, youknow, seven particular stocks anymore. We've seen small caps doing pretty well.And so we are really optimistic about the outlook.For the longer term, though, we do still think that there is a little bit oftough sledding ahead, especially when it comes to the economic data.So let's talk about that a little bit more.The concept of enjoy it while you can. I have to say, Brian, I was surprisedthat all of a sudden we're looking at the best week for the S&P 500 this year.It feels like the sentiment really doesn't match what we're seeing in theprice performance.

So now it sounds like, is it time forcaution? Yeah, it does, actually.The numbers are better than how it feels right now.I think it's just because we went through we were almost lulled into asense of complacency as far as with low volatility, and then suddenly it comesback with a vengeance, maybe felt a little bit worse than what it actuallywas just because of how low volatility had been.And we are still digging out of that hole.Remember, small cap stocks are still well off of their peak where they wereback in, I think it was around October.

2021.We're even off of the peak as far as where we were back at the end of March.So not too long ago. So, you know, we do want to see some ofthat broader participation and continuation with the small cap mid-cap,maybe on the value side, some of the more cyclical areas to suggest that thisdoes have a little bit more staying power instead of being driven by theMagnificent Seven. Now it's maybe the dynamic duo in termsof Alphabet and Microsoft. So we do want to see a little bitbroadening here. It's interesting because any bid thatyou had in the bond market earlier today.

Is now waning on the short end of thecurve. You have the two year yield now standingaround for 99, just under 5% once again. At what point, Brian, does the ridehigher in yields start to take a bite out of the.Mark it a little further. Well, it has already taken a bite out ofparts of the market. Right.Small cap value. That's the area that tends to be themost heavily levered. And so as a result, that's alreadydemonstrated its interest rate sensitivity.It's more the larger cap companies that.

Have been able to turn out their debt.They don't have the same debt burden. So you have, I think, already seen ittake the bite out of parts of the market, just not out of the biggestnames out there yet. Will it take a bite out of them?Probably not. I mean, they generate so much free cashflow that not only are they able to invest billions of dollars in artificialintelligence, but also pay a dividend. Now, all of a sudden.So, you know, I think we've already seen it take a bite out of the parts of themarket where it's going to. Those are the companies that when wetalk to the management, they've already.

Tried to basically improve theiroperational efficiency in the face of the higher interest burden that they'rereally exposed to. Yeah, Brian, you think about thedichotomy in markets right now. You have the small cap sector whichreally needs these rate cuts, it feels like.And then like you said, you have the Mega-cap tech companies and actually theSun seen the shot over at Principal Asset Management earlier this morning.And she described that space, your big tech stocks as sort of macro agnostic,that they're basically going to be your all weather sort of strategy.Would you agree with that?.

To an extent, yes.I do think that a lot of them, they have so much heft and such a global presencethat they aren't necessarily beholden to, you know, a downturn or a slowdownin China or a downturn or slowdown in Europe or even in the United States, aslong as it doesn't happen in a synchronized way.And I think that's the key thing, is they aren't macro agnostic, providedthat we don't have a synchronized downturn now, will we?No, I don't think so. I think that really we already have seenEurope. They were in a recession.Maybe they're beginning to get off of a.

Footing here where they can start arecovery process. China, they had their challenges.Maybe they're going to get a little bit of traction as well with some of thestimulus they've had. So even if we do get a tightening of thescrews on U.S. consumers here and a slight slowdown ingrowth, they're probably somewhat well insulated from those effects.Brian, it's interesting. Outside of the tech sector, of course,energy has been one of your best performers in the S&P this year, but nottoday. And of course, we've had some earnings,including Exxon, that weren't as.

Exciting as many people would havethought them to be in the first place. I mean, how do you think you play theenergy sector from here, given all of the volatility around energy pricesright now? Yeah, it really is a case of thevaluations. I think, as far as taking that longerterm view, as far as the way in which the market is paying for those earnings.So one of the few areas that it seems like they're not necessarily at, youknow, like in the top quartile in terms of their valuations.So it's an area that we are still optimistic about for the long term.It seems like they don't necessarily.

Want to invest too much for growth, butthere are those cases where Exxon's one. But then you can also see other examplesof maybe some of the smaller players where they actually delivered a fewbeats. So it seems like, you know, is Exxonnecessarily going to be driving all of the energy sector?Maybe if you're in an ETF that is market cap weighted, but not necessarily ifyou're going in and picking out the names one at a time.So we still are optimistic about the outlook for energy.Broadly speaking, even if we don't see oil prices continue their ascent here.Brian, we thank you so much for your.

Time and for being so versatile on afairly volatile market here. That is Brian Jacobson, chief economistover at Next Wealth Management. Now, coming up, snap, crackle, crackleand a big pop. Why shares of the social media platformSNAP are surging today, snapping back from the doldrums.How they plan to keep the momentum going.Plus, Intel CEO says that they're making, quote, steady progress towardstheir priorities after tepid near-term guidance.It seems that investors, though, not convinced.We'll get into the details in our stock.

The hours and consumer is still feelingthe inflation squeeze more than ever and losing hope that prices will fall anytime soon. More on the University of Michigan'sconsumer sentiment survey. All that and more coming up.This is close on Bloomberg and. Wednesday, the Fed decided Jay Powellpumping the brakes on rate hikes are off the table.No cuts. Looking perhaps a little bit morelikely. You can't say there's a whole lot wrongwith the US economy.

Trust Bloomberg to bring you the fastestcoverage and exclusive analysis, including Powell's press conference.Policy rate is likely at its peak threshold to cut rates is a littlehigher. Redefining Patience BloombergSurveillance. The Fed decides starting at 1:30 p.m.Eastern, context changes everything. All right.Let's head to the world of facts, because the yen hitting a fresh 34 yearlow against the dollar. That's after the BOJ held interest ratessteady and signaled that monetary policy will stay easily, which of courseamplified concerns of possible currency.

Intervention.Bloomberg efforts and rates. Reporter carter johnson joins us now onset. On a friday afternoon, a hero.Let's talk about how the boj fits into us.Tell us about the timeline here. Yeah, thank you so much, kitty.And you exactly said it. So they met friday overnight for us.And the big takeaway was they held rates steady, which was mostly expected by byeconomists. But again, it was a real reinforcementof, you know, if you go into WCBS on the Bloomberg terminal, you can see thatrates in Japan very low.

Still rates in the U.S.very high. And it was just really underscored thatgap in yields which is on offer for investors.That really has been driving again. So it's crazy because a couple of daysago at 155 against the dollar, we were talking about that as almost a dangerzone. And now we're sitting here past 157,edging 158. How do you make sense of that?Yeah, for sure. We were finally and, you know, I thinkagain, we've talked a little bit about maybe the levels aren't as important asthe speed, but now that we're here at.

157, almost 158, when we were at 155just a few days ago, and even lower even a few weeks ago, that is a very fastmove. And so we're talking about a move ofmaybe ¥5 in the matter of weeks. And that's where you start to wonder, isthis fast enough to warrant some sort of support or intervention?I remember when seven was supposed to be a line in the sand, the yuan against thedollar. It feels like a long time ago.But talk to us through potential currency intervention here.What would that possibly look like? And does it have any shot of beingsuccessful?.

Sure, yeah.So we can look to recent history, which would be the fall of 20, 22, two yearsago, a year and a half ago. And at that time, Japan spent aroundmaybe $60 billion supporting the yen, at the simplest level.It's a matter of buying in and selling dollars.At the time, they sold some treasuries, also maybe sold some deposits.They have deposits at foreign central banks around the world.But that's kind of at the most fundamental, what it would look like,whether it would be successful or not. It's a great question.You know, back then the US was kind of.

At the beginning of a monetary cycle.Now we're very much on hold. So the environments are quite differentthan they were back in 2022. How do you think about the Bank ofJapan's communication at this point? What do we know about what they'vereally said already in terms of how willing they are to actually intervene,particularly? Carter Because we've been talking aboutintervention for days now and we haven't seen it.Yeah. You know, I think the Japaneseauthorities, I think part of their M.O. is to keep a little uncertainty in themarket.

And it's kind of funny if you look atthe Bank of Japan's policy statement today, very short, all of maybe two orthree sentences, which is very different from what we're kind of used to indealing or in thinking about the Fed. So I think they're willing to accept alot of that uncertainty and sort of keep the markets and keep traders on edge inthe hope that maybe that'll do some of the work for them.What does this mean for the carry trade? Obviously, one of the most popularcurrency trades out there and the yen being such a popular funding currency,this weakness, how does it factor in? Yeah, you know, it's a great question.And if you look at positioning of.

Currency traders, there are a lot of yenshort positions out there and that is indicative of the carry trade and theendurance of that. Even with the idea that the Bank ofJapan is tightening policy, etc., we'll actually get new positioning data inabout 15 minutes and we'll see whether traders are pulling back on those shortyen positions a little bit just because of maybe a fear of intervention.But so far, that carry trade does not seem to be going away.It has a lot of staying power. Thanks for keeping an eye on this storyfor us so closely. All week as we have seen the yen weakenthroughout the week.

Carter, johnson, bloomberg, effects andrates. Reporter.Now coming up, we're going to talk about snap shares surging as the social mediagiant signals its digital revamp is paying off.We're going to have the view from an analyst in top calls today.Stick with us. This is the close on bloomberg. All right.It's time now for top calls. A look at some of the big movers on theback of analyst recommendations. And we start with Hertz.Bank of America making a U-turn on the.

Stock with it.Downgrade to underperform from neutral. The rental car company's first quarterresults disappointed the analyst who says that liquidity an increase inconcern among investors due to its older fleet needing to be refreshed at a timewhen new and used car prices are softening.You take a look at shares right now, currently down about 4%.Next up, we have Caterpillar downgraded to hold from buy at Stifel after a,quote, modest first quarter price target, though raised to $350.The heavy equipment maker warned investors of a slowdown in machinerysales, to which the analyst says could.

Amplify near-term and cap expansionopportunities. You take a look at shares right now,actually a little bit higher, currently about 1.7% higher on the day.And finally, we have Spotify, Phillip Securities raising its recommendation onthe audio streaming service to buy from accumulate price target set to $340.An analyst, Jonathan Wu, says that it continues to solidify his place as aleader in the industry, with a growing subscriber base, lower cost structureand pricing power shares. Right now, they're pretty much unchangedand those are some of our top calls. Now, also finding a growing audience,its efforts to revamp its digital.

Advertising business really helped todrive revenue in the most recent quarter.Joining us now for more, we have Rohit Kulkarni.He is senior analyst covering Internet and capital markets research over atRoth Capital Partners. And he has a neutral rating on SNAP.So that's where you are right now after, of course, what we learn from SNAPearnings. Are you considering bumping up to buy?Can't say about here, but we definitely have a growing positive bias in SouthSide speak. What that means is if they can do thisone more time, if they can durably.

Execute in a way that SNAP has executedin first quarter, I think I think and not just me, many other people would belooking to upgrade the stock. But having said that, I think the theturnaround in the story is real. They have executed improved tractionwith direct response advertisers. That's the the holy grail ofadvertising, if you will. Think of what Google does, think of whatFacebook has been doing for so many years.Many of the companies have failed. Many of the companies have tried.And that's what SNAP has been trying to do for the last 18 months.And finally, we are seeing some traction.

In that.That's the most encouraging point from what we learned yesterday.I think the point you're making here about more evidence before calling it awin for SNAP is something the market is seeing as well.You still have shares down fairly meaningfully on the year ahead.So what are the hurdles in terms of them being able to actually execute on afuller turnaround here? I think at that oversimplified level, Ithink what SNAP needs to do is ensure that user engagement as they're two ofthe largest markets, North America and Europe.If you look at what's happened in the.

Number of users in the last six, maybenine, or even in the US almost 12 months, they have flatlined.They are much smaller than Instagram. Instagram is growing users, whereas SNAPis staying flat as far as user users are concerned.And that's a leading indicator of revenues in my opinion, for socialmedia. So what happens to engagement tomorrowis what happens to users today and what happens to revenues day after tomorrowis what happens to engagement. So building building on that ladder, ifusers are flat today, it's just going to be very hard for me to have a lot ofconviction to say that engagement will.

Rise and hence revenues will rise aswell. So that's that's really the holy grailof social media advertising and monetization is and and if they can growusers in the US and if they can grow users in Europe, I think it becomes avery high conviction story in my opinion.So still a lot left to prove when it comes to SNAP.And I mean when you take that in context of what the shares are doing right now,currently on higher by almost 27%, that is Snap's best day in over two years.Is that an overreaction? I wouldn't call it an overreaction.It's it's kind of a relief rally, I.

Would put it that way.The stock that the shares were down almost 40% year to date, maybe 35 andchange. And so expectations are going going intothe print were very low. That was very much unlike, say, a matterwhere expectations going into the print were very high and the smallest ofyellow flags were punished very severely on matter.On the other hand, snap people didn't expect that much, but SNAP came in withhigher revenues and higher guidance for Q2.So there is a big cheering, cheering effect here.Where are you beat?.

The expectations were a small amount andnow suddenly people are paying attention to that.So that that that's fundamentals are improving, but the expectations matter alot. On what investors were hoping to see andthat they exceeded by a wide margin. Valuation remains at a premium for thiscompany. There are companies like Pinterest andobviously matter that are trading at a much bigger discount to SNAP and they'regrowing at comparable growth rates and even with better profitability.So we prefer those other places where valuation is cheaper and fundamentalsare comparable.

So that's that's how we think aboutthis. And it's a good point on the psychologytoo. Of course, expectations are so low goinginto SNAP earnings, so high going into meta.Let's talk about Pinterest, because it's not just SNAP.You also have Pinterest having a great day on the heels of those snap earningscurrently higher by about 4%. What can we extrapolate out from SNAPinto Pinterest? I think what we heard not just from SNAPbut also from Google and and matter as far as the state of e-commerce and thestate of overall advertising.

The all three companies reported upsideto revenues. It's hard to forecast what a companycould do from a cost standpoint, but just the scale of advertising is strongand has strengthened as the quarter has progressed.That's what we have heard from all three companies so far and that bodes verywell for Pinterest. So almost overnight the expectations forPinterest are rising, so we will need to see if they can now exceed those likeleaders and expectations. And that's going to be interesting onTuesday. Rohit, what is the Tik Tok effect here?And when there's so much uncertainty.

Around Tik Tok, how do we know what theultimate impact is turning out to be for these other social media companies?Longer term, as in if Tik Tok is banned and if they eventually exit the U.S.,it's still 12 months out. But if that were to happen, thenobviously a lot of social media players will benefit.Even streaming players would benefit the matter.Snap, Pinterest will benefit. Perhaps Netflix and YouTube would alsobenefit given what would those teenagers do now that they have an extra hour tospend? Probably they'll spend at some otherplace and that will drive more revenues.

But in the in the meanwhile, I think ifthere is volatility inside TikTok, like advertisers start to feel a little bitsqueamish about what's happening in store inside TikTok, some users try tonavigate away from TikTok. Probably they go first to Instagram andnext they try out Snapchat. So small list of such movement ofadvertisers experimenting on TikTok, stopping those experiments and goingover to Snapchat. That definitely helps Snapchat, andthat's probably part of the reason why SNAP is trading at such a big premium,because there's that picked up potential halo that could come down the pike maybein three, six, nine months, even before.

The door closes on TikTok.Really cool. Carney over at Robb Capital Partners, wethank you for your time. Stay with us, everybody.More markets coming up next. This is Bloomberg. It's just about 330 in New York.And this is the countdown to the close. I'm Sonali Basak and I'm Katie Grape ona really, really big green day in market Chanel.A little bit interesting since if you told me that actually Eve was going tocome in hotter than expected on the analyzed core, I probably would havethought this would be a down day.

Yeah, And it's interesting because youdo see the market for the S&P really jumping back this week, best week you'vehad. But it does not erase all the gains wesaw on the S&P last week. Very true.Yeah. So let's talk a little bit aboutsentiment, not just from the investor side, but also the consumer side,because the U.S. consumer sentiment slipping in April.This is according to the University of Michigan, the latest read highlightingthe toll that stubborn price pressures along with higher borrowing costs, aretaking on consumers.

Here with more insight is the womanbehind the survey. Her name is Joanne Shu, and she joins usnow. She is the University of Michigandirector of Surveys of Consumers. So how much does the fact that you sawconsumer sentiment slip a little bit have to do with the fact that inflationexpectations are still pretty elevated here?So overall, I would actually say this this the slip was very, very small.I would characterize sentiment as being flat, unchanged over the last three orfour months since January. Consumers haven't really seen anydramatic changes in the trajectory of.

The economy.But at the same time and one of these things that's not changing is stubborninflation. Their inflation expectations ticked upjust a bit. And for both the short term and the longterm, they're not necessarily expecting inflation to come surging back, but theydo feel like this slowdown has stalled. How do you feel about this kind ofstalling of their sentiment? And is there more downside risk here ora chance that things could start to turn around?And why? So this this this flatness of consumersentiment that we've seen in 2024.

Followed some surges that we saw at theend of 2023. So what I would say is that what we wereseeing in February, March, April was solidifying the gains that we saw at theend of 2023. So what we are hearing from a lot ofconsumers is that they're really reserving judgment about the long termtrajectory of the economy, pending the results of the election in the fall.So we have a lot of consumers telling us like, well, my opinion might may verywell change next week or next month. So, you know, I think that there iscertainly risk on both sides up upward and downward.But I think it is a good sign that at.

Least the large gains from last year atthe end of last year remain in place. Yeah, it's true that I mean, compared towhere we were when it came to sentiment about a year ago, especially two yearsago, things have gotten a bit better. But let's talk about again how pricepressures sort of filter into that, because I mean, the frustration a lot ofpeople have that is that the rate of inflation is slowing, of course, but theabsolute level of prices is much higher than it has been.So, I mean, you think about how feelings could change in the next week, the nextmonth, etc.. Again, how tightly tied is that to pricepressures?.

Consumers recognize that prices areunlikely to come down. They and as a result, consumers arecontinue to be quite frustrated by how high prices really hurts theirpocketbooks. We had about 38% of consumers telling usthat high prices were eroding their living standards.This is up from 33% last last month.So this is something that certainly hurts how consumers feel about theeconomy. And for a lot of them, at the same time,they recognize that inflation has slowed down dramatically over the last twoyears, that we're not where we were in.

The middle of 2022 when we were seeing,you know, all time lows in in consumer sentiment.So I think there is a recognition that inflation has slowed down, but continuedfrustration over the pain of high prices.How do you feel about the differences you're seeing across party lines, giventhat the election is such an important benchmark here for kind of timing interms of how people feel about the economy?What's the biggest difference that you're seeing between Democrats andRepublicans and what's driving it? So what we're seeing when we compareDemocrats and Republicans is something.

That we've seen for many, many years,where consumers who belong to the power to the party that's in the White Housetend to have more favorable levels of sentiment than people who don't.We saw that during the Trump administration, during earlieradministrations, and we see that now with independents right in the middle.That relationship has not changed. And this overallfour months, you know, since January of sentiment not really moving a whole lot,that's pretty much something we've seen across party as well.So, you know, we are seeing Democrats with more favorable levels of sentimentthan than Republicans.

Republicans did slip a bit this thismonth, but they're still much higher than they were in the last couple ofyears. Can we talk a little bit aboutgeopolitical factors, too? I mean, you take a look at the state ofthe world and we have two hot. Wars overseas.How is that affecting consumer sentiment at home?From the looks of our survey, not a whole lot right now.So we continuously track many spontaneous mentions of things likegeopolitical conflict. And when the Ukraine invasion beganlate last year, there were a lot of.

Concerns about that in the beginning,and a lot of consumers spontaneously telling us that they were concernedabout conflict between Russia and Ukraine.In contrast, we have very few people mentioning what's happening in theMiddle East. We didn't really have any sort ofmovement or mention when we in the developments like last week between Iranand and Israel. And so this is not something that we'reseeing a whole lot of concern about in in our survey.This isn't to say that consumers don't care about what's happening in theMiddle East, but that it's not something.

That's rising to the forefront whenwe're asking them about how they feel about the economy.Joanne Chu, director of Consumer surveys at the University of Michigan, thank youso much for joining us on a day of a fresh report.Now coming up, shares of Intel sinking the most in almost four years and moreon what's fueling the fall. Of course, the biggest decliner here inthe Philadelphia Semiconductor index today.The only decliner really in today's stock of the hour.Up next, this is close on bloomberg. It's just about 330 in New York.And this is the countdown to the close,.

Emotionally basic.And on Katie, growth on a really, really big green day in markets generally alittle bit interesting since if you told me that actually she was going to comein hotter than expected on the analyzed core, I probably would have thought thiswould be a down day. Yeah, And it's interesting because youdo see the market for the S&P really jumping back this week, best week you'vehad. But it does not erase all the gains wesaw on the S&P last week. Very true.Yeah. So let's talk a little bit aboutsentiment, not just from the investor.

Side, but also the consumer side,because the U.S. consumer sentiment slipping in April.This is according to the University of Michigan, the latest read highlightingthe toll that stubborn price pressures along with higher borrowing costs, aretaking on consumers. Here with more insight is the womanbehind the survey. Her name is Joanne Shu, and she joins usnow. She is the University of Michigandirector of Surveys of Consumers. So how much does the fact that you sawconsumer sentiment slip a little bit have to do with the fact that inflationexpectations are still pretty elevated.

Here?So overall, I would actually say this this the slip was very, very small.I would characterize sentiment as being flat unchanged over the last three orfour months since January. Consumers haven't really seen anydramatic changes in the trajectory of the economy.But at the same time, and one of these things that's not changing is stubborninflation. Their inflation expectations ticked upjust a bit. And for both the short term and the longterm, they're not necessarily expecting inflation to come surging back.But they do feel like this slowdown has.

Stalled.How do you feel about this kind of stalling of their sentiment?Is there more downside risk here or a chance that things could start to turnaround? And why?So this this this flatness of consumer sentiment that we've seen in 2024followed some surges that we saw at the end of 2023.So what I would say is that what we were seeing in February, March, April wassolidifying the gains that we saw at the end of 2023.So what we are hearing from a lot of consumers is that they're reallyreserving judgment about the long term.

Trajectory of the economy, pending theresults of the election in the fall. So we have a lot of consumers telling uslike, well, my opinion might may very well change next week or next month.So, you know, I think that there is certainly risk on both sides up upwardand downward. But I think it is a good sign that atleast the large gains from last year at the end of last year remain in place.Yeah, it's true that I mean, compared to where we were when it came to sentimentabout a year ago, especially two years ago, things have gotten a bit better.But let's talk about again how price pressures sort of filter into that,because I mean, the frustration a lot of.

People have that is that the rate ofinflation is slowing, of course, but the absolute level of prices is much higherthan it has been. So, I mean, you think about how feelingscould change in the next week, the next month, etc..Again, how tightly tied is that to price pressures?Consumers recognize that prices are unlikely to come down.They and as a result, consumers are continue to be quite frustrated by howhigh prices really hurts their pocketbooks.We had about 38% of consumers telling us that high prices were eroding theirliving standards.

This is up from 33% lastlast month. So this is something that certainlyhurts how consumers feel about the economy.And for a lot of them, at the same time, they recognize that inflation has sloweddown dramatically over the last two years, that we're not where we were inthe middle of 2022 when we were seeing, you know, all time lows in in consumersentiment. So I think there is a recognition thatinflation has slowed down, but continued frustration over the pain of highprices. How do you feel about the differencesyou're seeing across party lines, given.

That the election is such an importantbenchmark here for kind of timing in terms of how people feel about theeconomy, What's the biggest difference that you're seeing between Democrats andRepublicans and what's driving it? So what we're seeing when we compareDemocrats and Republicans is something that we've seen for many, many years,where consumers who belong to the top, to the party that's in the White House,tend to have more favorable levels of sentiment than people who don't.We saw that during the Trump administration, during earlieradministrations, and we see that now with independents right in the middle.That relationship has not changed.

And this overallfour months, you know, since January of sentiment not really moving a whole lot,that's pretty much something we've seen across party as well.So, you know, we are seeing Democrats with more favorable levels of sentimentthan than Republicans. Republicans did slip a bit this thismonth, but they're still much higher than they were in the last couple ofyears. Can we talk a little bit aboutgeopolitical factors, too? I mean, you take a look at the state ofthe world and we have two hot. Wars overseas.How is that affecting consumer sentiment.

At home?From the looks of our survey, not a whole lot right now.So we continuously track mentions spontaneous mentions of things likegeopolitical conflict. And when the Ukraine invasion beganlate last year, there were a lot of concerns about that in the beginning,and a lot of consumers spontaneously telling us that they were concernedabout conflict between Russia and Ukraine.In contrast, we have very few people mentioning what's happening in theMiddle East. We didn't really have any sort ofmovement or mention when we in the.

Developments like last week between Iranand and Israel. And so this is not something that we'reseeing a whole lot of concern about in in our survey.This isn't to say that consumers don't care about what's happening in theMiddle East, but that it's not something that's rising to the forefront whenwe're asking them about how they feel about the economy.Joanne Chu, director of Consumer surveys at the University of Michigan, thank youso much for joining us on a day of a fresh report.Now coming up, shares of Intel sinking the most in almost four years and moreon what's fueling the fall.

Of course, the biggest decliner here inthe Philadelphia Semiconductor index today.The only decline really in today's Stock of the hour, up next.This is close on bloomberg and. And. Obviously.Hey, we delivered a solid Q1. We met on revenue, we beat on earnings abit tepid in the first half, as we said, but we see a lot of improvement as we gothrough the year. And with that, obviously the foundrybusiness, I as I would say, we're going to see progress on the foundry businessevery quarter from now to the end of the.

Decade.That was Intel CEO Pat Gelsinger weighing in on the Chipmaker's latestforecast. Intel is today's Stock of the hour.There's also some news crossing the terminal here.Apollo, KKR and Stone Peak may inject billions into a joint venture to helpfund Intel's semiconductor fabrication facility in Ireland.Sources tell us here at Bloomberg, the joint venture could raise severalbillion dollars, including debt. The people familiar with the matter sayAbigail Doolittle Bloomberg Television joins us for more on this.You know, it's interesting to see so.

Many fund managers kind of rise to theoccasion. What does this really mean in the storyof Intel? I think it means that they think thatthey're getting a good deal. That's my first thought.Maybe a little bit cynical, but in terms of the fab business, that's the oldschool part of chips. That's not the leading edge in terms ofthe A.I. type chips.Those are the machines that you use to make the chips.So the fact that that that's where they're going, it says to me that maybeit's a little bit backwards.

Again, I'm not an expert, but my firstreading, if you had to take a guess, when do you think Intel's last all timehigh was? I was hoping you would tell me.I will, But let's take a guess first. I'll let Charlie go.Oh, boy. Years ago.2000. So this is not been an all time high in24 years. So I think that that's a piece of thedeal that these companies are getting in some ways.And in terms of at least the terms of the deal, if they do create the JV.Intel is definitely not on the the.

Stronger footing there relative to thequarter that they just reported. Pat Gelsinger is correct.It was a decent quarter, but it's the guy that's like $13 billion, 5% at aprofit of $0.10 is 58% light. So his turnaround is not happening sofast. And again, the foundry business, likeI'm not a chip expert, but that seems to me the more archaic version.That's the older school chips. If you want to be going toward the air,which they are doing, they are going to be rolling out their new Goudy, Trippchip, which is they're a competitor to in video.It should bring in $500 million in sales.

This year.But this story, it's really not working the right way.No. And I mean, I'm shocked to hear that thelast all time high was in 2000. It's incredible.Yes. There's getting further away from thattoday. Like you said, it doesn't seem like theturnaround is really materializing, really actually coming to fruition.And that must just be so frustrating to shareholders when you think about howhot the chip industry is. Absolutely.And to your point in terms of that.

Frustration, they actually recentlystarted reporting in a different way. They are reporting the foundry businessseparately in the CHIP business. But the chip business is also a littlelight. It's not just the foundry that wasweighing. And in addition, I think a big part ofthe story here, clearly with that massive mess for earnings for thiscurrent quarter, margins of 45.3% in this last quarter, in the currentquarter, less than that, they're typically around 60%.So it almost seems as though they've they've really got to evolve.But it's such a big ship to turn.

They've got their work cut out for them.I do think what's interesting, too, is watching them go to the private marketsfor money, particularly because the public investors have not been as warmto the stock. I think that's such a great point.But it's also a sign I was talking to somebody recently today actually on theprivate credit side of commercial real estate, and he was talking about how thebanking system in general is changing in terms of lending.They're just not lending as much. Now, that's more true real estate.But in general, he was saying that that's the case.And so the idea that you have this.

Capital available from the KKR and inthis case the Apollo's of the world. Yeah, that that's certainly a trend.It's a fascinating story. It's going to be fascinating to watch,of course, as Pat Gelsinger tries to turn around.Like you said, there's a lot of wood to chop.There are thanks, of course, to Abigail Doolittle.And that is a great point that, you know, the public markets may be gettinga little bit frustrated here. Maybe it's the private investors whoreally step up to the plate. Yeah, it's interesting, at least in thecase of Intel, you saw them really pair.

Up with Brookfield years ago as well fora separate manufacturing expansion, this time in Arizona.Of course. Now this time around we're talking aboutIreland. But Intel still down more than 30% onthe year here. So frustrating as you can imagine thatwith the boom here for investors, absolutely down 30% for the year, 9% onthe day. Coming up, we're going to counting downto the closing bells. We're going to do that with SteveSosnik. He is chief strategist over atInteractive Brokers.

Really looking forward to thatconversation. This is the close on Bloomberg and. This is the countdown to the closeSonali Basak alongside Katie Greifeld. What are you watching, Katie?I'm just watching the markets because it is so remarkably such a big day inmarkets. You take a look at the S&P 500 currentlyup about 1%. I mean, all of a sudden, the best weekof the year for the S&P 500 really feels like it came out of nowhere.And you think about how bad we felt after midday earnings.And here we are, just a remarkable.

Turnaround, just that two year yield,shocking, that bid really disappearing. We are at 4999 on that two year yield.I would really like to touch 5%. We're going to talk more about thismarket. We're going to welcome Steve Savage,next, chief strategist over at Interactive Brokers for 99.And I'm laughing a little bit because what does 5% mean, right?Can it go higher than that? And that would imply it seems not onlyprolonged delays here and rate cuts, but something else going on with inflationclearly symbolic. I think that I think what we're seeinghere is and I'm starting to get whiffs.

Of stagflation, dare I say it?I know that's like a dirty word in a lot of in a lot of circles, but necessary totalk about right now. It kind of is right.We had we ended up with a GDP print that was far worse than expected, 1.6.We were looking for 2.5 versus 3.4. That's terrible.And you had a worse PC e number yesterday, which of course is not the PCnumber, but a PC number. Well, if you have a weak economy andinflation that's not coming down, you kind of have to think in those terms.And that's why it was kind of shocking to see bond yields rise on a day whereGDP was a big miss.

So it has to be that other that otherinflation nervousness. So it's now a time for caution.I mean, how should I feel right now, Steve?I look at all this economic data. It seems to just say that basicallyinflation is still sticky, it's still high, Stocks are rallying, yields aredoing what yields are doing. How should I feel?You should feel concerned a little bit. I think I think it's I think the timefor just closing your eyes and buying anything is done.I think that ended sort of on March 31st or maybe maybe call it April 15th, justaround tax day, when people actually who.

Made a lot of money in 2023 took someprofits, which is why you saw in video and some of these other stocks pulledback. But I think right now you have to startto wonder, stop. The push pull between stocks and bondsis getting a little nerve wracking. I think we were able to ignore it formost of the year so far, partly because of just the weaponized FOMO that was inthe stock market by anything, partly also because of the reason that yieldswere going up, which is a stronger economy.And on balance, stocks do like a stronger economy up to a point.The bond market starts to freak out a.

Little bit.And we've gone from sort of the bond market just sort of rising because theeconomy is getting better. So now the bond market is starting toget a little a little stressed. How do you feel about some of thecomplacency in other parts of the bond market?You think about where people have really placed their money earlier this year inpretty risky wagers, frankly, assuming that there is really almost no rolloverin maturities here. It's actually quite astounding how howmany of the strategies that worked really well in the, you know, let's saythe 2022, 2021 period.

You know, they're just the money flowingeverywhere. Strategies are still being employed nowand yet they're still working. That's one of those things you stopworking and that's the problem. That's my point to Katie is maybe weshould that maybe we need to start getting a little more concerned aboutsome of these things that are underlying it because the spigot is not on fullblast anymore. It's not turned off.But I think some of these we're still hunting yields incrementally.We're still counting excess returns and they should be getting harder to comeby.

Fortunately, so far they're not.But that gets the nervousness in. Isn't it funny that people still havethat yield seeking behavior they're funding into, of course, risky parts ofthe bond market. When you take a look at cash right now,earning 5%, actually, Bill GROSS, he tweeted the other day, why bother withbonds? T-bills are at 5.25%.Seems like a slam dunk there. You're speaking to someone who has toomuch money and money markets by a lot of people's point of view.But but yeah, it's the same basic thing. You know, think about it this way.We went up 10% in the first quarter.

S&P, which was which was fabulous.Can you annualize that? Are we going to be up 40% this year?I'm going to say no. So at some point you get the back in thefill. And when you're getting that back andPhil, when you're getting some of the volatility, there's not the wrong it'snot the wrong place to be. If you can actually earn a real rate ofreturn on cash, it's something a generations of investors have just notbeen used to. And I think we forget about thatsometimes. Bill GROSS, having the perspective thathe does, you know, says, okay, there's.

Nothing wrong with just, you know,parking your money if you can make some profit on it.This whole idea of where's the risk? We were talking about some of the steamcoming out of some of the favorite trades.But the question is how much draw down risk is there still, especially goinginto a big Fed meeting, a big payrolls print and the.A new economic environment. I think the drawdown risks can besubstantial in terms of let's we didn't complete a correction.You know, it felt like we corrected, but we really were down.Call it 4 to 5%.

Certain stocks had big corrections.But but as a market as a whole, we didn't really complete that correction.It's possible. I'm not necessarily saying that's thebase case. There still seems to be this underlyingresidual momentum and earnings season. We've gotten our requisite 80% of stocksbeating estimates. So that seems okay.But that's that you know, that would sort of be my my point to say this isnot out of the question because it's really a correct finishing.The correction is really down another call 5 to 6% at this point, which is nothistorically unusual.

And, you know, you really know it's beena crazy week because I actually had to check as to when Tesla reported andturns out three days ago. Can we talk about some single nameshere? Can we talk about Tesla a little bit?You write in your notes that finally maybe we're starting to see some genuinerisk aversion priced into Tesla shares. I mean, what do you make of what weheard, of course, on the call? It just shows you what a wacko stockTesla is and how faithful I've called it a faith based stock for many time forfour years. And any other company, if it put outnumbers like Tesla did, would have been.

Shredded.I don't I don't even want to put a number on it, but certainly double digitdown. But Tesla investors are always lookingto the future. And so.Oh, let's talk about Robotaxis. Let's talk about, you know, a $25,000car that may or may not actually be coming to market.But if you put enough futurism in front of the Tesla investors, that is whatgets them going. The reason the stock rallied also wasbecause for the first time in ages, going into earnings, we actually saw theoptions market pricing in some real.

Risk.And you know, what we learned this week was the contrary.The option market was was a good contrarian indicator.It was it was showing a lot of risk for Tesla.Tesla went up. It was showing not too much risk fromthe metal went down that then because of metal, it was then pricing in a lot ofrisk for for Alphabet and for Microsoft. And they were fine You're right.Well it just is another indication of a lot of investors here running for somecover. Steve Wozniak, Steve is chief strategistover at Interactive Brokers.

We thank you so much for speaking to usin to the closing bell. We have had a heck of a week.It's been a heck of a week, too. And tomorrow next week promises to be aheck of a week as well. Of course, we're taking a look at thebest week for the S&P 500 all year. And Tesla shares up 15% this week,despite, of course, what the numbers said.But what Elon Musk said was obviously the winner.I do wonder what the market narrative is without all the earnings that we haveseen this week. Certainly it should shift back to theFed.

Now we're moving closer to the closingbell here in the United States. Full market coverage right here onBloomberg as we take you to the bell and beyond. Beyond the Bell.Bloomberg's comprehensive cross-platform coverage of the U.S.market close starts right now. Now, about 2 minutes away from the endof the trading day, Sonali Basak and Katie Greifeld taking you down to theclosing bell. And here to help us take us Beyond theBell with a global simulcast, we're joined now by Carol Massar and TimSandvik, bringing together our Bloomberg.

Television, radio and YouTube audiencesworldwide to parse through the most crucial moments of the trading day.Carol. My goodness, I have a whiplash today.Yeah, pretty interesting, right? And even the week overall when you lookat the numbers, We'll get to that in just a moment.I know Tim's on that, but I'm looking at the Philadelphia Semiconductor index.The Sox is up about two and a half percent, and that's despite a mega selloff in Intel, KLA ten core art KLA Corp, I should say.They had some results that beat that maybe helped lift the sector overall.And Vedere is rallying in today's.

Session because of all the airenthusiasm. So it's interesting when you start todig a little deeper into the market, you see some differences.Okay. Well, Carol mentioned the positive weekthat we're having for the Dow Jones. It's actually the laggard of the week,only up 7/10 of 1% over the last five days.The S&P 500 up 2.7% over the last five days.The tech heavy NASDAQ composite up by 4.3% over the last five days.Kind of all thanks to yesterday, I think, and today.Now, it's interesting, too, because even.

With that intel feeling here, that is aweighing down that stocks a little bit. The idea here that we have bounced backso drastically and you're seeing the semis get more love than the Nasdaq orthe S&P is just an indicator of how much this boom is driving this market, isn'tit? Yeah, absolutely.I know that people are a little bit freaked out about what we saw withmedia, of course, the year of efficiency over.But then you had Microsoft, you had Alphabet coming out with some big airsort of spending, also some things to show.And that really revived this market.

And there are the closing bells.What a week Friday is here. And the Nasdaq up more than 2% to closeout the day. And you have remember those tech heavystocks really driving all the indices here.The S&P 500 still ending the day up 1%, ending the week, the best week of theyear. And the Dow Jones Industrial Average upabout 4/10 of 1%. A lot of green on that screen.Yeah, for the week overall, as we said, S&P up about 2.6%.The Nasdaq up about four and a quarter percent.And the Dow Jones Industrial average.

Just about two thirds of a percent.But yeah, definitely a much more risk on tone this week.Meanwhile, I take a look at the sector level and it's pretty much an evensplit. Interestingly enough, if you take a lookat what is working today and it's communication services in a big way,that sector up about 4.7%, then there's a big drop off there.Information technology still a big rally, up about 1.9%.Consumer discretionary materials also having a good day as well.You take a look at what didn't really work today and it was utilities.I mean, this was a big risk on day of.

Utilities.Of course, on the heels of that, down about 1.1%, and energy also off by about1% Carol. All right.Let's get to some of the individual gainers, guys.You know where I'm going to go. It's Google Alphabet that stock up justshy of 10% in today's session. I'm looking at the S&P 500.It's your two numbers, two and three gainers.So top gainers in the S&P 500, number one gainer in the NASDAQ 100, as weknow. We know the story, right.Leaping into the $2 trillion market cap.

Club because of the move up in today'ssession. Revenue beating on strength of its cloudcomputing unit cloud demand fueled by growth in a I and yet introducing adividend and a $70 Billion buyback program.So taking a page out of Apple's book and a few others not Apple's I should saymeta right or Apple I guess they're all find out what didn't matter what do yousay that now is it six of the mag seven writers you are doing dividends are nowdoing dividends so now we got alphabet playing catch up.Microsoft is, of course, an outperformer in today's session, a gain of just shyof 2%, finishing off its highs of the.

Session sales profit beat again, salesof its Azure cloud computing platform climbing 31% in the quarter.That was a beat. About 7% of that increase wasattributable to I compared with about 6% in the previous quarter.So that's growing. And then one more air related name,everybody. Every time there's some enthusiasmaround AI and video wins up about 6.2% in today's session.Number three, gainer in the NASDAQ 100 rallying back from last week's sell offsome of the chips Giants biggest clients doubling down on IE stock is up roughly,I think around 15% this week.

So it added a lot to its market value.We know, again, whether it was Alphabet, whether it's Microsoft talking AI, itreally helped out this name, which is up almost 80% so far in 2024.Tim. Okay, you've got the gainers, Carol.I got the decliners. Not that easy on a day like today.But I do want to start with shares of Intel.Got to go. They're tumbling the most in almost fouryears intraday today after gave a lackluster forecast for For.the current period, it indicates that it's still struggling to return to thetop tier of the chip industry.

Shares finished near down by 9.2%.It did close off lows, but at one point it was the it was down.It closed off the lows. So closed the down the worst sinceJanuary, but at one point the worst in almost four years.The outlook does signal that the push by Pat Gelsinger to revitalise is going totake more time and money. Also, shares of ExxonMobil plunging themost in more than six months. This after higher than expectedmaintenance costs diminish its oil refining results.Shares falling today, marking the oil giant's worst intraday decline since itannounced that $60 billion takeover of.

Pioneer Natural Resources.That was back in October. As for what caused this, we saw variousmostly noncash accounting items behind the rare earnings miss posted inadjusted earnings per share profit that was $0.13 below what analysts hadforecasted. And then ticker to a team for Atlassian,it's the maker of JIRA Confluence. Trello fell after the co CEO ScottFarquhar announced that he's stepping down from the company that he helpedstart more than two decades ago. It was a surprise move and it certainlyrattled investors. We actually saw the company reportearnings yesterday and they reported.

Pretty good fiscal third quarterresults. Revenue 1.19 billion above the averageanalyst estimate. Profit, excluding some items was $0.89per share. That beat the $0.62 per share projectedby analysts. Still, the company added customers moreslowly than anticipated. The co-CEO is stepping down.Farquhar plans to spend more time with his young family, improve the world viaphilanthropy and help further the tech industry globally.That's according to the statement that we got yesterday.Talk about the bond market now, because,.

Of course, there were a lot ofinteresting moves there. You saw the two year, of course, kind ofbe flat on the day. But remember, you're looking at a for99, just under 5% on the two year that has drifted about two basis pointshigher on the week just ahead of that Fed meeting next week.And the ten year yield, interestingly enough, a bigger move, a closer to sixbasis points moved higher on the week, which gives you a yield curve even moredeeply and curtain averted here. I know a lot of people are not talkingabout that any more, but I'm certainly still watching it.And you do have a little bit of movement.

Here, yields a little higher about threebasis points along the longer ends of the curve.Even if you didn't see the two year move that much, the levels you're seeing hereare pretty stunning. Well, we're all going to be watching theUS yield curve next week as we get ready for another Fed meeting.That, of course, that decision on Wednesday.Then you've got a jobs report on Friday. But on this Friday, this is what we'refocusing on because Goldman basically has a message for its bankers.You're looking to go to Paris, you get an important meeting between July 24thand August 14th.

Got to go.Got to go. We're on to you.Okay. Here's what they said.In a message or in a spokesperson for the bank said, quote, In line withprevious Olympic Games, we have asked our people to effectively manage theirspend and ensure coordination with firms sponsored events for our clients duringthe period of the Paris Games. Oftentimes, events like this could besettings for employees to meet with clients, but they also throwopportunities for staff angling for junkets, which banks attuned to keepinga lid on costs.

Nobody's ever sure not.Wait, I got to go. Got to go.There's something important and important meeting us.Open anyone? Yeah.Oh, wait. Yeah.People like to go. That's work.I mean, you can't blame them for trying. It makes a lot of sense.And I don't know. It makes sense, though, to why Goldmanwould want to keep a lid on costs. I actually am going to Paris for theOlympics, and it's going to be a lot.

Are you going to watch?I'm guessing you're going to watch track and field.I'm going to do it on. But it's not like you said to youreditors, hey, there's this story I've got to do.I've got to do it in Paris. And it's between this timeframe thatsome people in this building have asked me if I'm going for Bloomberg.And sadly, the answer is no. I'm just going as a regular no.That's a good thing in my life. Well, you're better off that way.I've got to say. You want to enjoy it while you're there.And that's a I will say that you were.

Looking at your emails.You just be gone, Katie, and will enjoy it.Before you do, I want to talk about something else.For those who are sticking around that week, to be working here is like thereare very expensive coffee makers out there.If you haven't seen it, guys, Whirlpool is actually now looking to diversifyeven more and sell $2,000 espresso maker.They're betting that those who are spending a little bit too much money atthose high end coffee shops or even at Starbucks will instead take that $5 andcamp it in the bank of buying their new.

Automatic espresso maker.Hey, listen, it's like a little luxury. And, you know, if you're going to dothat, you might want to actually put some decaf coffee in there.You know, everybody makes fun of decaf coffee.Yeah, but pursuits are Bloomberg Pursuits team saying it's becoming thehottest thing in coffee right now. There's actually a U.S.Brewers Cup, a competition. And for the first time in thecompetition's 20 year history, a decaf coffee took the title.So don't make fun of it. But one thing you might want to make funof is Tim, because you've got to.

Ask him about his coffee.Hey, any time. I'm a big coffee guy at home.Anytime anyone wants an espresso, you're welcome to swing by.It's a really nice machine. Is it decaf?We don't use decaf beans. Very good, Carol.I'm going to keep making fun of decaf. What is the point of decaf coffee, Jack?I got through. It's really sad.College on decaf coffee. And what is it?The instant coffee.It was something, Carol.

I know.Actually, it tastes pretty good. It's.It's weird line, but it does. All right, guys.A lot of controversy. We're going to need a lot of coffee nextweek between earnings, the Fed and, of course, jobs.So we're going to call it a wrap. Have a good and safe weekend, everybody.We'll see you again. Our cross-platform coverage, radio, TV,YouTube, Bloomberg Originals, we call it Beyond the Bell.We'll see you again on Monday. And coming up, we're going to wrap upthe insights from this week's tech.

Earnings results and push to what'sexpected next week with Sarah Hunt, chief market strategist over at AlpineSaxon Woods. Stick with us.That conversation's coming up. This is the close on Bloomberg. All right.Welcome back to the close. I'm Katie Greifeld.And I'm Sonali Basak. We're going to take a look at where themarkets closed out the day because we finally have some green on the screen.Finally, I feel like you're in the mood for that today, Katie.We were waiting for that green.

The S&P 500 ended the day 1% higher andmore loving those tech stocks. We had the Nasdaq 100 more than 1.6%higher. And the semiconductor index,Philadelphia Semiconductor index, 2.6% higher.That is shaking off all those losses, of course, you saw on Intel, which was theonly stock down. And that index on the day, the two yearyield flat on the day, but more than two basis points higher on the week.A lot of economic data just under that 5% level.Katy and the green continues. Let's talk about some of the day'sbiggest movers.

No one was a sort of social media themehere because we have to talk about SNAP and the day that was SNAP sharesfinishing the day nearly 28% higher. That is the biggest rally in over twoyears. Of course, coming out with details oftheir ad revamp really seems like it's finding its audience.And clearly people said that's probably good news for Pinterest.Maybe we should have some hope there because Pinterest shares also closedhigher by about 4%. And then I also wanted to put up metabecause we remember those earnings results that we got earlier this weekreally didn't go as well as people had.

Expected.Of course, expectations were very high. Medicare is going to finish the dayabout 4/10 of a percent higher. And that brings us to our top story thishour, and that is the rally in tech stocks.It's really helping push equities towards their best week this year.We did officially close there and you have Microsoft and Alphabet sending aclear message to investors, and that's that spending on AI and cloud computing,it's finally starting to pay off. Finally.And for a deeper look at those results from this week, we're joined byBloomberg's Abigail Doolittle, who has.

Been keeping a track on everything.It's been quite a week. Thank goodness it's Friday.As all I can say, TGIF, I can't even get the letters of the words out of mymouth. Overall, I would say that there's reliefthat the tech earnings have skewed better.You know, certainly in terms of Tesla starting off the week, the quarter thatthey reported was awful. But Elon Musk not throwing in the towel,towel, putting, you know, some real big talk in around the cheap car that itwill be here by early 2025 or even by the end of this year.So basically, you know, a possible.

Revamp of growth for Tesla.You nailed it, Katie, in terms of Alphabet and Microsoft, all about the AIand the cloud spending for both of these companies.24 Alphabet, 28% cloud growth, 20 32% for Microsoft.So better matter, though, not so much. I would argue that both of thosecompanies, Alphabet and Microsoft, helped out by metal's disappointmentbecause it was such a mess and the quarter that many reported, it was agood quarter. But I think everybody's reminded of notthe year of efficiency but the metaverse year when it was a total disaster.And the idea that maybe they're just.

Going to be crazy.Spending on AI A.I. seems to be different than themetaverse, which I don't even know what that ever was.When that was announced, I couldn't believe that they gave up like the bestmarketing name Facebook ever. I'm not even on Facebook, but it'sclearly one of the best trademarks out there for for Metta in the metaverse.So I think people just are reminiscent, reminded of that misstep back then.And could it go longer and further? Plus, they're giving up growth on thetop line, so that's not good. And so let's push this conversationahead, too, because we're still in the.

Heart of tech earnings.Have some of the biggest next week, including Amazon.What are we expecting there? Amazon, it will be very similar toAlphabet and Microsoft. The pressure's on them to put up nowresults around the cloud their cloud business that us and what will the airdrive be there now could there be a disappointment because there had beensome expectation, especially for Alphabet and Microsoft.There was one analyst who said it's all about surviving and advancing and theyclearly both are thriving. But could it be different for Amazon inthose two business lines?.

And then Apple, Apple down 12% since Ithink it's on the year. So in a correction, single digit growththere, what are they going to do? That's going to be key demand foriPhones. All right.Bloomberg's Abigail Doolittle, thank you so much.And staying in the tech world, we do have some breaking news, and that isthat Eric Anderson, he is general counsel for Ticktalk and its parentcompany, BYTEDANCE, today announced that he will be stepping down from his rolein June and he will then take on the role of special counsel to the company.Taking a look at the press release right.

Now, he's going to focus on helping todrive the company's effort to overturn the unconstitutional ban.Their words, that legislation in the US and other pressing legal matters.Of course, we're going to continue to follow that story and how it develops.But let's turn now to the tech earnings. Of course, the week that was and theweek that still is to come. We're going to do that with Sara Hunt.She is partner and chief market strategist over at Alpine Saxon Wood.Sara, it's great to see you on set. Oh, thank you.I love being here. So let's talk about big tech.It seems like when it comes to spending.

And CapEx that investors really likewhat that brings. But as we learned.In the case of Metta, just the sort of the price tag on what it actually takesto get there. Media spooking people.I think it's a combination of the price tag and what they're spending it on.Right? If you say that you're spending it onwhat has clearly been demonstrated by both Microsoft and Alphabet, the AI thatis driving better sales, better revenue than people are very happy.If you say that you're spending it on things that people are still worriedabout, which is, I think the problem.

That matters having which goes back tothat, you're spending too much money on the metaverse and therefore giving upother things. When we thought that you'd given thatup, I think that that's really that was the differential there.But also Alphabet's main business was doing quite well and people were muchmore worried about ad search. And it actually came out search came outquite well. I think when you look at the resultsthis week that you saw, kind of shrugging off as kind of discontenthere, if you're in the market, if you will.How do you feel about the gains moving.

Forward?Do you think that the exuberance that we saw this week, particularly aroundMicrosoft, Google will last? Well, I think I mean, it really it wasdown to Microsoft and Google, too, to do well this week because I think it reallydrove and sort of dealt with some of the upset that we had the other day.And I think that going forward, if they can continue to demonstrate those bettergrowth rates because of the investments that they're making and because thedriver of AI is so strong, then I think that you can have some real legs to someof this. On the equity market story, this was thebig question last year.

Are these earnings going to comethrough? And if they do, are they going to begood enough for people to say, okay, I can hang my hat on better S&P earningsnext year because of the tech sector? And right now they did a lot to boardthat. And it's so interesting.I mean, there is so much resting on the shoulders of Microsoft of Alphabet.And it was really a show me story and they were able to do it.But then you think about that in the context of Tesla.That was not a show me story. That was an okay, things were reallybad.

But take a look at the future sort ofstory. And it's interesting to me that thatworked well. I think it only works if you're Tesla.I don't think anybody else can quite get away with that the way that Elon Muskcan get away with that. And I think that that's one of thosesituations where at some point something's going to those cars aregoing to have to come out because he's already taken prices down on the higherpriced models. So he's going to have to demonstratethat you can make money on the lower priced models and or have anotheriteration of something that gets people.

Excited.But there's very few companies that can get away with putting up those kind ofnumbers and having the stock react in a positive way.So that is up for next week for Amazon. You know, Katie pointed out that unlikethe other big tech companies, a dividend is not in play yet for Amazon.Do investors want to see this and would Amazon hand them such a victory?You know, it's interesting because the fact that you're seeing both dividendsand buybacks out of some of the MAG seven or MAG six or whatever we want tocall them right now tells you that the cash generation is extraordinary andthey expect that to continue.

I think Amazon is at a point where theyhave done a lot of spending so that they could start harvesting whether or notthey're going to put the dividend on this quarter or any.It really depends on whether or not they take it in that direction.But I think it just demonstrates the immense cash generation that we'reseeing. And I think that that's what investorslike to see. I love the dividend story in big techbecause it feels like a contradiction, like we're talking about some of thebiggest growth companies out there that are so mature, they have so much cashthat what else are they going to do with.

It?And I think I don't know when I think about it, it sort of speaks to this allweathered this sort of vibe that some of these big tech stocks have thatbasically they can fit in any bucket you want to put them in.Well, and the fact that they can say, look, I'm spending all this money onCapEx, but I also have enough money to buyback some stock and give you adividend. Again, the discussion has always beenabout the massive generation of cash. I mean, even Apple, which has had atough time recently with some of the issues that are going on with China andrefreshing the iPhone.

There's still an enormous amount of cashthat these companies generate, and that makes a big difference going forward forinvestors. And when people start to talk aboutwalking away from tech, you can't really walk away from that kind of cashgeneration and that kind of growth. And what you're seeing demonstratedright now is that that growth can continue and it can ramp itself up inways that people weren't quite expecting.And I think that that really saved equity markets, at least for this week.And going into this quarter, it really helped earnings season out a lot.Sarah Hunt of Alpine Woods Capital.

Investors, we thank you so much fortaking a look at all that happened in tech this week and all that's stillabout to come. Now, coming up next, we're going to talkabout the top three. We're going to focus in on the top threemovers and shakers at the center of the day's biggest stories.That's next. Stick with us.This is the close on Bloomberg. Wednesday, the Fed decided Jay Powellpumping the brakes on rate hikes are off the table.No cuts. Looking perhaps a little bit morelikely.

You can't say there's a whole lot wrongwith the US economy. Trust Bloomberg to bring you the fastestcoverage and exclusive analysis, including Powell's press conference.Policy rate is likely at its peak threshold to cut rates is a littlehigher. Redefining Patience BloombergSurveillance. The Fed decides starting at 1:30 p.m.Eastern, context changes everything. It's time now for the top three.Every day at this time, we do a deep dive into the people at the center oftoday's top stories. And up first is Bob Bakish.According to the Wall Street Journal,.

Paramount is considering removing him asCEO and installing an interim committee of top executives to run theentertainment giant. Of course, we know, Katie, this comes inthe middle of a massive question on who's going to own Paramount head.Yeah, I was excited and interested and confusedhonestly, seeing this headline because I was like, the sale process is already sothorny and it just got a lot more complicated potentially.Yeah, it sure did. And you have to wonder also what DavidEllison's own plans would be if he were to own it.Are a lot of big questions still, of.

Course, when it comes to Paramount.But let's also talk about Jeff Bezos, because the FTC is accusing him andother executives at Amazon of destroying text messages, discussing business,recent evidence the agency could have used in its antitrust case.I mean, you think about how aggressive this FTC is and also all these highprofile instances of people really across industries getting in troublewhen it comes to text messages, etc.. Now we have them combined into one.Yeah, it's interesting. It was from April 2019 to May 2022, andit was signal messages. And of course, it's interesting to seethe way people change, the way they use.

These platforms.Of course, even in recent days, I've had executives say, text only, please, noWhatsApp, no signal, we don't do it anymore.About Meet Me on the Corner and we're going to talk in person because I don'ttrust anybody. What does it pay phone?Yeah, exactly. Also, another person I'm watching,Howard Lutnick. I spoke with a Cantor Fitzgerald CEOabout when he's expecting the Fed to cut rates.Take a listen. I think right before the election, notthat the Fed is involved in elections,.

But September.I'm thinking I'm thinking September. And it's not really to move the economy.It's to show off a little bit, help a little bit.You know, the guy who's employing you today, maybe he'll give you your jobagain if he gets elected, it can't hurt. So I think September one cut, that's it.Just showing off. I mean, he goes, I'm not saying the Fedis involved in elections. You know, it's funny, Lutnick alsotalked a lot about the elections and the impact it has on the market.Remember, he was also one of the people that threw that $50 million fundraiserfor Donald Trump down in Palm Beach.

And he was talking a little about whatpeople are watching into the elections, regulation, immigration.Although, Katy, he did say that you can't say Joe Biden was bad for themarket. Exactly.I mean, you take a look at the S&P 500 performance under Joe Biden.I don't know if you like. It just goes to show when you thinkabout how because the stock market also did well over Donald Trump, does itreally matter who's in the Oval Office? But I know that Howard Lutnick made thepoint to you that the Republican Party less regulation that's seen as morebusiness friendly.

So that would translate theoreticallyinto the whole FTC non-compete thing was this week.And of course, that would impact Wall Street disproportionately given the paypackages. You see also the Biden administration'sproposal on capital gains taxes. What was the rate proposed, like 44.6%?That would be extremely aggressive. And I could see why a lot of people onWall Street would not like that. You can't tell what's going to make it.To see the light of day. As a journalist, it gets quitefrustrated talking about what you don't know will actually happen or not.I just got to stay tuned.

We got to stay tuned.And of course, I got a lot of messages after that newsletter went out about allthose people moving in Florida, not paying those taxes anyways.Now, still ahead, we're going to shift from taxes and the government toartificial intelligence. We're going to use that conversation totalk about consumer preferences. Promise you there's a link.We're going to talk to Alex Ellis, co-founder and CEO of Clue.This is the clothes on Bloomberg. Stick with usand. And.

All right.So now for next up, where we highlight the entrepreneurs and founders movingthe needle in our economy, in markets and in technology and businesses lookingto capitalize off of consumer trends are turning to companies like CLU for theirdata. It's an application programminginterface that uses its catalog to help companies predict and dissect consumerpreferences. It's used by the likes of Netflix.For one, movies, users want to stream for date night, or it can tell UniversalMusic Group if people do chores listening to Mozart or to Taylor Swift.Joining us now is Alex Elias, co-founder.

And CEO of Clue.And Alex, let's start with a basic question, which is where do you get thedata to make these inferences from? Absolutely.And so great to be with you. I remember being here in 2017 espousingthe virtues of A.I. privacy well ahead of GDPR and all theregulatory environment. And it's so exciting to see these trendsmaterialize. I think that segment was predictingconsumer tastes with cultural AI. And here we are in this new landscapewhere privacy is paramount. AI is everything, and CLU is one of thecompanies.

We've been in the market for over adecade. We've been squarely focused on thepremise of generating inferences in a way that's totally ethical but can spanacross the globe and across all categories of media and entertainment.And so part of how we do this is we built this unprecedented database ofcultural entities. So think about every restaurant aroundthe world, every movie that's been distributed in the U.S., Europe, evenBollywood. And we look to understand the underlyingcharacteristics of those those places, those things.And then we built best in class.

Recommendation engines that parallelsort of what you get from your favorite consumer services.So if you think about Spotify within the world of music or Netflix within theworld of film and TV, they've of course come around and become a customer.What we do is we generate these predictions based on the actualcharacteristics of the entities and can do this at global scale.And it's a very exciting time. So can you give us an example of that?One of these inferences that, of course, that you've made?Yeah, absolutely. So CLU owns a company, for instance,called Taste of Taste out of has.

Millions of users.It's a great platform to get suggestions based on your taste in any area.And something Clu really excels at is you can give it a sparse amount ofinformation so you could tell it Favorite movie, a favorite restaurant,and it'll be able to generate predictions across all differentcategories of culture and entertainment. And that's something that customers havereally come to rely on us for in terms of generating really ethical, soundpredictions about taste. What are the strangest taste experiencesthat you really found, the insights that you found that perhaps would besurprising to your clients who are.

Gathering these insights and trying tofigure out how to meet the consumer? Yeah, I mean, one of the mostinteresting things is that there's strong predictive ties and unexpectedareas. Sometimes your taste in music might beone of the best ways to suggest a restaurant in the new town you'revisiting, and you see that with some of the main recommendation.Engines sometimes struggle with one. They just know one category of taste.And so we've been doing a lot of work recently with various clients.You look at some of the largest ticket marketplaces, for instance, you have asituation where you're syndicating and.

Selling 500 million ticket sales a monthand you need to make very accurate predictions with very littleinformation. And people only tend to buy tickets, youknow, once or twice a year. So how do you take just one little pieceof information, say, a favorite music artist or a favorite comedian and thengenerate recommendations across categories like sports and comedy?That's something Clue truly excels, that we're able to handle network requests ofup to 3 billion requests per day in certain integrations.So it's a really exciting time. And something we've really seen in theA.I.

Landscape is that language models arebecoming all the craze. And when I last spoke with Bloomberg in2017, these were nascent technologies that have now really taken for.And so something that CLU excels at is imbuing language models with a source oftruth and accuracy. And a lot of our greatest integrationsnow we're seeing are actually leveraging language, which is kind of the newinterface over data. And so what CLU can do is basically helpguide those systems. So if you wanted to have much moreaccurate trip planning, for instance, an itinerary generation, that's some of theunique use cases that CLU offers.

What about generative AI is differenttoday than it was a few years ago? If you think about the way yourcompany's evolved, why is it able to move in different directions now thanperhaps before? Yeah.So when you when you think about. Language models.Now, it's one of the greatest interfaces over data, but you still need greatdata. And so part of our part of ourcontribution to the space is the ability to imbue those systems with a source oftruth, to reduce some of the hallucinatory tendencies that we've seenin these language models, but also.

Guided towards an outcome that actuallyhas material business KPIs. So if you're a business that's trying tosell more goods, you're trying to understand consumers better.CLU can play a role in that loop. And part of part of the issue we havetoday and many businesses face today. And this is even more true than it waswhen we last spoke with the network is that consumer tastes are so fragmented,there's so many interesting new music artists, restaurants, travel, they'rebecoming more heterogeneous and interesting.And so having something that at scale can generate ethical predictions aboutour taste and make applications smarter.

While respecting the existing privacyregulations, but also all the forthcoming A.I.regulations that'll become more and more material.That's something that that clue is really focused on, and we're superexcited to be working with the likes of Netflix and Michelin and Jcdecaux, whichis the largest outdoor billboard company helping to power.What AD gets shown where depending on context.So so yeah, it's a very, very exciting time.We've been ahead of the curve on a lot of these themes and CLU has built itsdatabases, its intelligence over well.

Over a decade now.Alex Elias, co-founder and CEO of Chloe, thank you so much for keeping an eyearound the corner in artificial intelligence.I want to give you a check on where the markets have been because a look at theJapanese yen before we go to break, just breaking 158 against the dollar.Incredible. Katie, when you think about how evenjust before the Bank of Japan's meeting that yen traders actually boosted theirshorts against the yen to record highs ahead of that meeting.And now we are just seeing the yen weaken further on the day heading intothe weekend and after that Bank of Japan.

Meeting, you know, back when we were at155 earlier in the week, we were thinking those were potentially leadingto intervention levels. And you have to wonder what happens aswe see the pace of this weakening just accelerate.We will be back to you with more on the markets next.This is the close on Bloomberg. Now, President Biden says he intends todebate Donald Trump ahead of their November general election rematch.He spoke earlier today in a wide ranging interview with radio host Howard Stern.And for more, we're joined by co-host of Bloomberg's Balance of Power, JoeMatthew.

What happened in this Howard Sterninterview and how did it even come about, to be honest, Joe?Well, you know, it's actually that the latter question is for me a little bitmore interesting, because the jury is really out on whether we're going to seedebates between these two, and we can talk about that more.The fact is they haven't even had a meeting on setting rules that you wouldtypically have under way at this point. But the fact that the Biden campaign isputting the president of the United States on with Howard Stern for over anhour without a break, without without a bleep, says a lot about where they wantto position him and the people they're.

Trying to reach right now.With polls showing, including our own at Bloomberg, a real disconnect when itcomes to issues like the economy. They want him to be speaking to regularpeople outside of the political cable news sphere and show kind of his naturalside, maybe act like he can keep up a little bit, appeal to some youngerpeople. Most of this was biographical.He talked about where he met his wife growing up and getting into politics andso forth. And that's the kind of stuff they want,as opposed to, you know, a confrontational one on one interviewwith a reporter.

It does a lot more for the campaign.Well, without breaks part, it's really impressive.I have to say, as someone who does a lot of live television, you understand?Yeah. Without breaks.That is a quite the undertaking, though. But to the point that, you know, they'retrying to appeal to that younger audience, I mean, is it going to work?Are the young people listening to Howard Stern?Well, listen, that's a very fair question.And, you know, for full disclosure, I used to work there myself.And look, whether he's reaching young.

People, I think it's about getting himoff the script. It's about getting him talking abouthimself instead of controversial policy. And I'll remind everybody that HowardStern helped to make a celebrity out of Donald Trump.He used to be on that program all the time, certainly back through TheApprentice years. And there's a lot of tape that DonaldTrump would probably prefer not be played at this point from hisconversations past. And Howard Stern's had a bit of anevolution. He's grown up some his politics are morein line with Joe Biden.

So there are a couple of things at workhere in the campaign deciding to do that.It was essentially unannounced. He's up in New York for other mattersand he stopped by the studio for this interview.So it's kind of an interesting turn for them.He's going to be making jokes tomorrow night at the White House CorrespondentsDinner. So maybe that was the warm up.Well, I certainly hope that you are attending and you'll get some freechicken out of that. Our thanks to Joe Matthew.And of course, you can rubber chicken.

Rubber chicken sounds delicious.You can catch Joe and Kelly lines coming up at the start of the next hour.Of course, on balance of power. Meanwhile, you have Trump's alliesquietly drawing up plans to erode the Federal Reserve's independence if Trumpwins a second term. That is according to reporting from TheWall Street Journal, sources familiar. But the group is arguing, reportedly,that Trump should be consulted on interest rate decisions.Joining us now with his perspective is Andrew Lieven.He is Dartmouth professor of economics. And needless to say, Professor, I mean,if this happened, it would certainly.

Break precedent.Well, so the first thing to say is that whenever I read a story with noattributions at all, I get a little bit uneasy.And in this case, you know, there were several indicationsthat the kind of breaking story that may have happened was among former advisersreferred to them as allies. But on the other end of the storyspecifically stated that the senior economic advisers to former PresidentTrump didn't know anything about this. So this kind of story happens all thetime. I'm not sure what to make of it,honestly.

But The Wall Street Journal did decideto publish it. And so they are, you know, putting theirpolitical name right. That.That said, I think there were three important distinct pieces of the report.One was on regulatory policy. One was on the emergence of creditfacilities. And the third was really the third rail,which is monetary policy. And so we can talk about each of thosethree pieces. So that that third rail here, I think isthe most important because in the vein of this year alone, there have been alot of concerns about the pressure from.

Congress and from others to politicizethe Fed, maybe talk through, even though that this is something that is highlyuncertain and also unclear whether Trump himself was made aware or approved ofthese plans. I think we need to talk about what theramifications would be if you did see an administration involved in interest ratesetting. Well, the Federal Reserve's monetarypolicy, as I've said, maybe years ago. In the middle of a Great Depression, andit's been essentially the same ever since the monetary policy.The committee meets every six weeks. They're going to be next next week tomake the right decision.

They set the level of interest ratesthat are the goal mandate is to promote maximum deployment and price stability.And the way they're going to be set up is that some of the members are fromregional Federal Reserve banks around the country.Some of them are at the DC board in Washington.The Fed chair is just one of the 12 voting members.According to the law, the Fed chair is first among equals.Now, if Congress were to change that law and of course they could, but it wouldrequire legislation without a change in the law because Ican't for suddenly show up at the.

Meeting and say, here is what he hasasked you to do about. It just doesn't work that way.It can't work that way under the current law.And let's talk about some of the details in this Wall Street Journal reporting.Like you said, we're talking about, you know, of course, sources familiar to thematter haven't heard anything official here.But one of the reported points is that the Fed's financial regulations would besubject to the same review process that applies to other regulatory agencies.What's your take on that? Well, again, this would require an actof Congress by our financial regulator,.

The Federal Reserve's, overseeing largefinancial institutions. The Fed was partly responsible for theoversight of our Silicon Valley bank, which went bankrupt.I think that that having the Federal Reserve's financial regulations reviewedbefore they come into effect, that's already done for the SCC, FDIC, CFTC.Obviously, see if Congress decided that they wanted the Federal Reserve'sfinancial regulations to go through that review process, I think it would bereasonable. It's up to Congress to decide thatthey'd have to change the law. Our thanks to Andrew Levine ofDartmouth.

We thank you so very much for readinginto the potential ramifications here of this report.And for more now, we are joined by Dennis Kelleher.He is the CEO of Better Markets. You know, on one hand, I kind of want toask you what your initial reaction was to this report, Dennis, but I also wantto get your thoughts here on the process by which something like this would haveto go through even for this to happen. It's another interesting part of thisreport was the pushback you got even within the Republican Party.You had some people very much in favor of this and some people even on theRepublican Party who were very, very.

Much openly against this.Well, sure. Thanks for having me on as to myreaction. Look, nobody should be surprised that ifTrump becomes president, he's going to try and bend every part of thegovernment to his will. He's made it clear that he may changethe civil service rules so that everybody who works in the governmentbasically swears an oath to him, not the Constitution.It should be no surprise that he's going to try and get the people at the Fed,including the chair, to do his bidding. And in fact, during his first term,you'll remember and you did some.

Terrific reporting at the time about howTrump actually considered firing Powell, his own appointee at the time.And that is basically pushed back behind the scenes by many senators, includingRepublican senators, that that he should not do that and they would not supporthim. It's not surprising also to seesenators, Republicans and Democrats pushing back against this, because theconcern is that if interest rates are essentially set politically, leavingaside the very good points my friend Andrew Levin just made about thedifficulty of changing the law and things like that, if the president wereable to politicize monetary policy.

Decisions, interest rate decisions, thenit's likely that interest rates would be higher.And therefore the implications for the economy, financial stability andfrankly, Main Street Americans wanting a mortgage or buying a car or their creditcard rates would probably be substantially higher because investorswant to get paid for the risk that those risks that the interest rates would besubject to the whims of politics, whether it's Trump or the next guy orwhoever. Dennis Dennis, is that that part aboutthe higher rates? Is that part true necessarily becauseyou have heard Donald Trump really.

Favoring low interest rates here?And is there a chance here that instead what you end up with is a perennially,perennially low interest rate environment?Well, you know, only time will tell. Although I think that sooner or later,if you have a perennially low interest rate environment, you know, unless yourepeal the business cycle, it's it's going to tend to result in greaterliquidity than you otherwise would have. You'd have more dollars in the system.You would, at least according to basic economics, which are not always right,you're going to have inflation with too many dollars chasing too few things.And if you have inflation and you keep.

Your rates low, which is to say you keepflooding the system with liquidity in cash at low rates, something's got togive. And probably what's going to give isgoing to be higher inflation and higher for longer.And investors are going to want to be get a return for that risk and they'renot going to like it. There's something else they should weshould think about, though, and we could get lost in this, which is there is avery good argument that the Fed needs to be more accountable, needs to be moretransparent. It needs to be more responsive to ensurethat it actually discharges its mission.

We're talking about monetary policy.They're supposed to be focused on price stability and full employment.Hmm. Price stability gets a lot of attention.Full employment, not so much actually sacrificed on the altar of inflation.Right, Dennis? Unfortunately, running up against theclock. I have to leave it there.Really appreciate your time. Our thanks, of course, to DennisKelleher of better markets. Now still ahead, what investors need towatch for the week ahead. That's next.This is Bloomberg and.

Well, one big thing investors will bewatching next week is tech earnings. You have Amazon coming out on Tuesday,followed by Apple on Thursday. And for a look ahead, we're joined nowby Bloomberg Technology reporter Jackie Davalos.A real hero joining us on Friday afternoon.Let's start with Amazon. We saw, of course, Microsoft Alphabetdeliver well, Amazon as well. Well, you certainly have a decentpicture going in if we're just looking at the cloud computing numbers that wegot from Alphabet and Microsoft yesterday.Overall revenue for Amazon is expected.

To grow by about 12% to 143.But as you guys know, Cloud Amazon Web Services is the company's cash cow.So when you look at what the company's expecting, they're certainly in linewith some of the growth that we saw yesterday coming out of those two techgiants, about 13% to $24 billion. And then the next closely watched metricis search advertising. It's expected to grow by 24%.And investors really want to know how they're faring versus other advertisingdependent platforms like matter like SNAP.But of course, they've been in their cost cutting era.So profit will also be top of mind.

Operating income is expected to morethan double from last year to about 11 billion.So really meeting that target is going to help analysts answer the questionabout whether that belt tightening is really paying off.All right. Yeah, a lot of big questions headinginto that Amazon report. We really appreciate the preview.Our thanks, of course, to Bloomberg's Jackie Davalos.Let's look ahead to what else we're watching in the week ahead on Monday.It's not just tech. You also have earnings from Domino.All you also have on semiconductor so.

Far and Paramount.That's going to be a fun one. And of course, Amazon on Tuesday, a bigbellwether there, more tech earnings. Let's see if the party can continue.But the bigger day is Wednesday, isn't it?Wednesday is going to be so fun. Of course, we have that Fed decision.I don't think they're going to cut. That is my big controversial hot take,of course, heading into one. So tomorrow.You mean next week or you mean in September or you mean in December?Eventually they will cut it a grand fullness of time.But let's look ahead to Thursday, too,.

Because then we have Apple earnings alsovery important. Yeah, really important there.And of course, even more economic data on Friday with that jobs report.And what's interesting here is it comes after that FOMC, FOMC decision.You seem to really wonder if we end this week at almost 5% on the two year, wheredo we end next week? It's a great question.So stay tuned. Of course, it's going to be a heavymacro week ahead, the earnings week, a lot to look forward to, but that does itfor us. Balance of power is up next.So have a great evening.

Have a great weekend.This is Bloomberg.

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