>> welcome to bloomberg markets. take a look at where things stand in financial markets. we have big tech dragging down the broader market before earnings from microsoft today, meta, amazon and apple all this week. the s&p 500 losing ground near session those off 7/10 of 1%. . the mag seven down more than 2% at the moment. the continue to outperform. the russell is up almost nine

and a half percent after the cpi print changed things around. dollar-yen bouncing around. the fed announces its decision tomorrow afternoon. started its two day meeting today. as we mentioned, it is a busy earnings week. let's go straight to abigail doolittle who has our latest movers. abigail: lots of movers to come here. throughout the shares of jetblue up 15%. at the highs, the stock up 23%. the best day since 2020. that is the degree of piety -- of buying power --

6%. put up a mixed quarter. missed sales estimates. organic growth the lowest, slowest i should say in six quarters. they are unable to raise prices a ton. it suggests there is an intolerance on the part of consumers for higher prices. inflation we have been wondering about for a while. merck down 10%. the worst day since november of 2021. the worst day going back to 2008. they cut their full-year guide with the company highlighting china weakness. taking a look at crowdstrike because the weakness extends. since the failed upgrade, the debacle, the stock down 42%. 12 of it coming today. this after delta hired a prominent attorney to seek possible compensation for the outage that affected them and delayed so many flights. microsoft of course, the outage having to do with microsoft windows. today microsoft talking about

having some outage -- we don't of it is related to crowdstrike or i don't at this point to office and cloud features. they will be reporting tonight. super interesting is the slowing growth sales expected to be up 15% versus 17% last quarter sequentially. earnings expected to grow by 10% versus 20% the quarter prior. it is interesting to note the sequential slowdown. will they deliver? scarlet: still double-digit growth but sequential. that does raise a lot of eyebrows. abigail doolittle for us with the big movers. many of them decliners. on top of microsoft, we also get results from meta, apple and amazon. let's bring it all together and discuss those mag seven earnings with ed ludlow. let's start with microsoft because abigail told us about the sequential decline in revenue and in profits. the big? it -- question mark is capex.

ed: spending on infrastructure that supports ai. the street sees 15% revenue growth. the biggest contribution coming from 30% growth in cloud infrastructure. will remember last quarter the thing investors are trying to work out the language and data the c-suite give us. the cfo at microsoft said we had 30% revenue growth last quarter. 7% contribution came from ai. selling ai services. it is hard to find that in connect. you and i talked about the money machine. how many dollars are coming out in terms of growth. scarlet: that is a big question mark. everyone seized upon the seven points of growth last time around. do we expect them to say more on that? you expect him to say the pace has picked up in the last quarter? ed: one thing microsoft is very good at is selling software and even though we are excited about the words artificial

intelligence, what microsoft has done is taken its relationship with a -- with openai, they have built lots of data centers to support ai that is a value add to all the things they already sold. microsoft office the easiest example. with that, there is evidence whether you are enterprise or consumer, the adoption of those things is happening. it is real. the curious thing about it is the competitive landscape. a lot of that software you can get for free elsewhere. you can use chatgpt from openai without having to pay for it. that is interesting dynamic that maybe they can address going forward. the willingness of enterprises and consumers to pay for something that might otherwise be a freebie elsewhere. scarlet: what about meta? we have seen meta if you use facebook or instagram, the ai function comes up a lot. are we expecting that to translate into some kind of revenue boost? ed: the street certainly hope so. last quarter it was an interesting one in the context of covering technology.

mark zuckerberg said definitively we think meta can be the leading ai company. different to microsoft word is trying to take its work and put into an average -- an enterprise software package, meta has to work out how it is working a letter at -- working ai related to its social networks. using hardware in the augmented and virtual audi space. has not gone so well but has a revival. i am on many different meta platforms. whatsapp, instagram. you will notice the ai agent is commonplace in the search bar. how do you make money from that? they are the loading -- the loudest advocate for open source. that gives them a leadership position. they have spent a lot of money. the upgraded capex last quarter. what to they have to show for topline growth is the question. scarlet: that extends to amazon and apple as well. when it comes to apple, it is a hardware company. we are going to look for some kind of commentary on what the new ai enabled iphones which

will eventually go on sale this year will bring. a lot of anticipation. less about the quarter past. ed: apple is focused on the soft guidance the cfo gives. what are they going to tell us about real-time data? then it becomes an issue of chronology. the new generation of iphone comes out in september. mark gurman, the bloomberg news reporter who covers apple reported earlier this week apple intelligence, the generative ai platform is going to come not delayed from when the new iphone comes out. you buy the new iphone in september. you're going to wait a few weeks for a software update that gives you access to those tools. i think the market was like we traded the stock on the idea you guys have your act together on ai. they want to see evidence it will be in consumer hands with a firm date and how that translates to the app store and downloading or paying for more services. scarlet: i went to throw in amazon as well. google cloud had decent results last week which seemed to bode well for microsoft's as your and

web services. a ws is the market leader. ed: it is the clear market leader. alphabet and amazon are analogous in the sense we are hyped up about cloud growth. alphabet said he tentatively their legacy in core search products with their biggest jupiter to topline growth. amazon a ws continues to be the cash cow. there are areas that surprise us. advertising being one. the prime day window. that have something unofficial from growth for e-commerce? amazon story, it is hard to understand the sum of its parts. just like apple, everyone is going when do we get the ai alexa. that maybe the big question as well. scarlet: those will be questions investors will be asking. ed ludlow, cohost of bloomberg technology and he will be joining us later on as we break those earnings. coming up, starbucks reports after the closing bell. the company sees a drop in demand across the world particularly in markets like china where there is stiff competition. this is bloomberg. ♪

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scarlet: this is bloomberg markets. time now for our stock of our. we are watching starbucks. little change in terms of share price but down a fifth of its value. dusters are watching a pullback in demand from north america to china whenever words after the closing bell. but in bloomberg intelligence tina restaurant intelligence -- senior restaurant analyst michael helen. it is in need of a turnaround story. the first question for you is what is the good news story or books is going to try to tell this afternoon?

michael: some of the data we have seen, we have had some work done for us by nai machine learning company to analyzed social media. we have had work done i our team from second measure and they seem to think traffic has improved a little bit here in the second quarter in the calendar second-quarter in the u.s. that is the good news. some of the concerns we have are about how they driving that. in the united states, they have these breakfast paring meals they're starting to push through discounts. to us in the short term, that may help boost results but over the long term, you are training your customers that the items on your menu are not worth what you are selling them for. you are training them to not come to your store and less there is some sort of discount offer.

scarlet: they can look at the retailers and carmakers for guidance on what happens there. . that is the north america story. china is a different beast. the same store sales are expected to decline about 10.6%. we know the economic act trump difficult for starbucks. there is a lot of domestic competition starbucks faces. >> the chinese economy is weak to your point and the competition is coming from much cheaper options from looking, mcdonald's and kfc. starbucks for a latte is three times the price of those competitors. right now they are under a lot of pressure. i don't think their initiatives seem to make much sense. they debuted 27 you items last quarter to try to boost traffic. that is only going to hurt your throughput. it is not going to bring customers in that are looking for some sort of a cheaper item.

the fact they are getting a lot of pressure from the lower cheaper mass merchant coffee competitors is causing them a lot of problems in china. scarlet:scarlet: these are structural issues they need to deal with in addition to the fact the chinese economy is weak and consumer sentiment is not all that strong at the moment. we know there has been reporting on elliott management coming in and building a stake in starbucks. no word on how big that steak is. i know you have written about the kinds of things starbucks needs to do to get price going. what are you looking to hear from from elliott management as they start to talk to management about what can be done? michael: we think they are going to push for a couple of boards seats and potentially a management change. what we have written is a lot of these tips, management has pushed through don't seem to make sense for us. we want them to get back to the

basics of running great restaurants. they kind of make it tough on themselves. they talk a lot about improving throughput and running great restaurants. at the same time they are offering 27 items in china. they are offering you items in the united states including energy drinks and boebert t type items -- boba t type items. they talk about keeping their premium positioning in china but at the same time they are moving into third tier cities. to us a lot of these initiatives do not make sense. we expect elliott to hold their feature the fire and try to get them kind of on a back to basics mentality. scarlet: we will see how that shakes out and what they say if anything on the conference call about that. michael halen giving us a sense of what to expect.

coming up on bloomberg markets, bill ackman's ipo may raise 1/10 of what the hedge fund manager originally anticipated as one of the major investors pull out of the deal. this is bloomberg. ♪ my career in crossfit was the greatest lesson in teaching me how to confront pain. it's not the scale of how painful it is, it's just you confronting something that you just don't want to do. doing that week after week after week for a decade built a resilience in me. we're supposed to have many chapters in our life. when those chapters are

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scarlet: this is bloomberg markets. bill ackman's pershing square is

preparing to go public next week. the billionaire targeted a $25 million debut for its close end fund. that is looking closer to $2 billion. joining as early lipshultz. let's take a big step back. from $25 billion to maybe $2 billion, what happened? lately: he was talking about the 25 billion dollar mark in town hall early in the month when they were first starting these roadshows meeting with investors one on one cording the retailer followers and talked up the fact 2025 billion dollars could be the target for that. we saw a few weeks later last week saying they're going to cap it at $10 billion. in a letter that ended up having to be published in filing with the sec he told some of his current investors 2.4 -- 2.5 to $4 billion and in today's filing, below all of that.

scarlet: in the process of these numbers being adjusted lower, the sec has delayed regulatory approval of the ipo. it is not going to happen until later on. bailey: we saw when they first launched their lengthy roadshow they were targeting a deal pricing yesterday evening that would debut today because of that letter of they had to. that with the -- they had to file that with the sec. when i talk some close end fund specialists they are not completely sold on that filing because the timing has not been declared effective by the sec which is a requirement before the ipo. scarlet:scarlet: the sec has to ok everything. the big issue is seth klarman has decided against investing in the fund. who are the backers of this fund? bailey: when we look at that letter he sent to current pershing proper investors, he laid out putnam. he laid out the teachers of

texas. scarlet: the pension fund. bailey: pension fund of texas teachers as people who are already spoken for. . we broke yesterday outpost opted not to be in that 150 million dollar mark. still talking up his relationships but the big question is $2 billion is a lot of money but it is a small fraction of what he talked up. how much comes from santa to shoulds? how much comes from retailers? scarlet: this is great and you are behind the reporting that indicated bill ackman was holding up berkshire hathaway's as a model for the closed end fund which i think -- at this point we think may take place this week. let's stay with buffett and berkshire hathaway and turned to another billionaire. warren buffett's belcher hathaway -- warren buffett's berkshire hathaway selling shares of bank of america. berkshire still owns almost $40 billion of the bank. katherine doherty has been

looking into this. . is this a surprise? a year ago he was saying he wanted to stay put in bank of america. catherine: it is his biggest pullback of his investment that he originally made. it was back in 2011 when he was saying bank of america and ceo brian moynihan, i believe in their ability to turn this business around. coming out of the financial crisis they were dealing with billions of dollars of liabilities they had to clean up from countrywide. a lot of these mortgages they had been inherited. along the way, berkshire has continued to build his stake in bank of america. he has signaled his support of the bank, of moynahan. these recent sales, yes. the surprise is the fact it is happening. it has been that many years since 2011 he has built. he has not been selling. now he is selling. the question is when did those sales stop and how big does it

get? scarlet: warren buffett /berkshire hathaway is still the biggest shareholder in burke -- in bank of america. that has not changed. you mentioned he invested in brian moynihan. they speak a great deal. has he said anything else about brian moynihan? katherine: they have been very quiet. the comparison to ackman is astute. acumen going out there -- bill ackman going out using words. berkshire, these are actions. actions are potentially speaking louder than words. you make a very good point. berkshire is still the largest shareholder of america by a wide margin. these shares even though they are selling worth $3 billion, they are still the highest, the biggest shareholder. support is still there. it is not as if it is a signal of complete mistrust or a turnaround in how he is positioning or looking at the investment in the bank. however, if they get below the

10% mark, right now they are the 12% ownership threshold. they will likely stop having to declare these sales. . it will be less public. his maneuvering and his decision-making of his investment in bank of america might become less of a signal that we as the public can see in the get like we have seen in recent days. scarlet: when he to put this into context because warren buffett has been making changes to his holdings of u.s. banks since the turmoil of last year. he exited u.s. bancorp as well as new york mellon. he has been tweaking his holdings of u.s. banks. financials have not as well as they could have. katherine: that is right in but when he was pulling out of some of those banks, he was emphasizing his support of bank of america and of brian moynihan. this is the distinction here. i will also note when these --

when the sales were happening two weeks ago, it was the day or so after bank of america reported its quarter earnings. they were earnings that beat analyst expectations. the stock hit an all-time your high -- year high. he time this right. there have been subsequent sales at lower prices. there have been 44 and 41 which are where the shares are trading around today. we have not seen much market reaction from the news of buffett selling. that might be an indication this was something folks had been monitoring along the way. scarlet: we will keep an eye on what happens with at stake now -- with that stake. perhaps shrinking below 10%. katherine doherty, thank you. this is bloomberg. ♪

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>> from the world of politics to the world of business, this is balance of power.

live from washington, d.c. joe: kamala harris heads to georgia with democrats hoping to expand the map. welcome to the fastest show in politics. both the harris and trump campaigns are out with new ads today. i'm joe mathieu alongside kailey leinz. it is fascinating. both up with their first salvos. both are ads about kamala harris. kailey: kamala harris's pad is about her record of being a fearless prosecutor. $50 million and coming by her campaign whereas the first tranche from donald trump campaign is also about harris, her record or the said restrictions record when it comes to the border and immigration. joe: dangerously liberal she is