scarlet: u.s. stocks closing changethe s&p 500 little , oil topping $45 a barrel. 's earnings cross at 4:30 p.m. new york time. aroundn jack dorsey turn -- can jack dorsey turn around user growth? scarlet: and a june rate increase? we begin with our market minutes. volume was lighter than average, trading that dow down 13% based on the 10 day average. trading was up 8%

from the 10 day average. joe: another very quiet day. with tech earnings coming up and , it feelsnk activity like it's about to get interesting. scarlet: it is a waiting game for now. the dow, a 109 point swaying intraday, the most narrow move and one and a half weeks. let's talk about the energy stocks, the best performers life far.- by afterot a big lift standard chartered's results lifted the sector. rally. cross-asset there's talk that the former central bank governor could be the finance minister that the

president is ousted. the 10 year yield in spain, where the king has announced new elections because they cannot form a new government. look how low the yield is. thestory is how the till market has been punishing spain given the fact there has been no new government. yield has beenr taking higher, the highest since march 20 second, still pretty low, but that is one of the stories, a bit of an uptick in safe haven rates. slightlythe dollar was lower, but that is not the big story. the polish currency bankgthening, deutsche recommending investors go along the polish currency. there has been some positioning that the central bank will keep

its market rate at 11%. is malaysian ringgit extending its losing streak to a fourth straight day because a state investment company confirmed it is in default. joe: the big story was oil. west texas intermediate crude up 3.2%. the story,ues to be the buoyancy under crude prices, which are holding up. that is a major turnaround from earlier in the year. at&tet: breaking news from , earnings crossing the wire, first quarter adjusted earnings per share beating consensus, higherrsus $.69, revenue versus $40.4on billion. at&t says full-year guidance is on track.

at&t reporting a beat on bottom and top line, full-year guidance is on track. let's take a deep dive now. macro'm looking at is the market backdrop as we head into oc and the boj. financial conditions have eased considerably since february 11. the blue line is the bloomberg financial conditions index. i have inverted it. two don't always correlate, but since late august, right around the time that china devalued its currency, they have started to move in tandem and are coming down with conditions easing and volatility coming up. that is a great chart.

there has been this great easing of financial conditions, putting some upside into the outlook. scarlet: you wonder how much the fed will acknowledge it tomorrow in their statement. joe: or how much they're responsible for it. scarlet: i'm looking at due toity of the pound the briggs a debate, surging a lot this year, the white line on the chart. it has really come off over the last few days. there is this growing sense that probably britain is not going to vote to leave the eu, so that cause the rally, volatility coming off some of the opinion polls as they look better for the remain cap. -- camp. as pound volatility peaked, u.k.

banks were weekend and they have strengthened somewhat with the pound. is that in the past few days, and you can look at that gambling markets in britain where they show the same thing, there has been a growing belief that ultimately the u.k. will vote to remain in the eu. wonder how much of that is due to president obama? people are citing that as a crucial moment when he came out and expressed the importance of staying in the eu. scarlet: that has been one of his big talking points. joe: we've been tracking all the latest earnings, and we have a lot today. despite better than ex expected forecast crosses, what's the story with earnings? >> it depends on what sectors you look at. you're seeing a sector rotation. you still have the dow out there

in the market. positioning has been a huge part of the movements up or down, so you look at how people are thinking about whether they want to have exposure to equities, but ultimately the numbers are negative, and i think people are aware of that. it depends on the sector. if you look at the consumer discretionary sector, it is cylinders,on all consumer discretionary. the sector has a really done a lot in the past couple of weeks. they are beating sales by the biggest surprise amounts. they have huge profit surprises as well. yet it is not going anywhere. i think that ties into valuations, because you have a group of stocks that trades at 20 times earnings. colleague was short going

into earnings season. it is about beating expectations. really gotten the big energy companies reporting. exxon andnd tell chevron come out and say what their outlook is like, you wonder how much everyone is holding their breath for that. you think about the two big factors for earnings the past year, the dollar and oil, and where are we going to get the best insight, some of that by how investors are speculating, inventory reports, but people put value on what ceos of major corporations have to say about oil, and that will be a big deal. seeing inelse are you the market that isnteresting? it is basically looking at stocks versus bonds. this has been a topic that has come up in several different

records. it is looking at the treasury market, the 10 year yield versus what has been happening in cyclical versus non-cyclical sectors. we have the u.s. 10 year yield and looking at cyclicals versus non-cyclicals, so basically an index -- the best way to gauge this is looking at consumer discretionary minus consumer staples, that is your orange line, so when it goes up, the cyclicals are outperforming non-cyclicals. there has been this move down and yields since the start of the year, and there has been discrepancy in this market, but i think what is interesting is there is a report that says if you look at yields, they are still pretty subdued. basically what they're saying is of stocksyclical type have done pretty well, even as

yields have been rising -- sorry, as falling in the first couple of months of this year, but if you dive into it, i am not sure that is happening right now. i think that was a good trade to put on a couple of weeks ago. scarlet: twitter has just reported results. adjusted earnings per share $.15 yetus estimate of $.10, when you look at the revenue and the outlook for revenue, that is where things fall short. the second quarter, the current quarter, revenue of $590 million to 610 million dollars, analysts were looking for $677 million in revenue. that is amiss on the outlook for revenue. monthly active users, user growth has slowed down at twitter, 310 million active monthly users in the first quarter, analysts looking for 308 million. joe: that is a tiny be there.

revenue, $531 ,illion, first-quarter revenue $595 million versus consensus --imate of 607 $.5 million estimate of $607.5 million. joe: you can see how the market is taking this news, not doing much versus those financial numbers, down 9% in the aftermarket, still waiting on that big turnaround, even with givingt on eps, market the instant thumbs down. we will be tracking this for a while. scarlet: we heard from google, yahoo!, advertising growth has slowed down a little bit here, and although advertising growth is typical, there is the tick

tick by tick there. this is not a good sign for the cyclical industries. will be specific company issues, whether or not twitter's value proposition will allow it to keep growing, expand new types of users, but that certainly going to be the type of thing that people can look for an earnings besides the top line numbers. what can we read through about the economy and what the companies are saying, and is easy cyclical and those types of companies doing better, if those numbers turn a positive way, then i think it will be positive for the market as a whole because people still want to know. the u.s. economy is still important. i got off the phone with just a bunch of investors, and it is still about the u.s. economy. joe: thank you for joining us.

scarlet: twitter reporting results, stock down 9%. we dig in and get the takeaways for investors. also, a quick glimpse of shares of at&t rising in late trading as its earnings beat analysts estimate is. ♪ analyst estimates.

joe: "what'd you miss?" twitter earnings, but now ebay earnings. scarlet: first quarter adjusted per-share up $.47, slightly higher than $.45 consistence estimate. $8.6 billion and $8.8 billion,

narrowing its previous range. were looking for 8.7 3 billion, well within the range. in terms of first-quarter revenue, net revenue of 2.14 billion dollars. that is higher than what analysts were looking for, the estimate was $2.14 billion. ebay coming in with earnings per share on an adjusted basis higher than what was looking for. joe: the market liking that come up 6%. let's bring in paul sweeney. just broke,ings another corridor where they can't seem to get anyone excited. can twitter turn around? it here wenot seen have had several quarters now

with essentially flat user growth. it has stalled out here. you hate to compare it to facebook, which continues to grow. joe: the idea that we would compare them at all is ridiculous. >> i agree, but if you are twitter you have to sit back and say i have to grow my user base or get more revenue per user today. i think they would like to do both, but they really haven't been able to innovate on the product side to the degree that they can get new users to come onto the platform. do in nfley footballng deal with games, will that bring in new users to twitter? i think they are banking on, but we have not seen it. scarlet: we say whether we should compare twitter with facebook. twitter has become a cnn like

destination when you need breaking news but otherwise it is limited. >> sheryl sandberg last quarter said if you are a big brand advertiser and want to advertise on the internet, there are only two places, google and facebook. that is what we are seeing. revenue call down on the guidance for the second quarter for twitter, so they continue to have problems monetizing the user base. scarlet: i want to jump in here. twitter release, brand marketers did not boost spending as quickly as expected. joe: twitter has made this argument for a while that we should not even be talking about monthly average users and that we should look at the fact that they have a lot more people who see tweets somewhere in the

twitter.com,ual on so they have more users than active users, but if the brand marketers aren't coming in, then that argument is not resonating with advertisers. have 500t says we see ourusers that tweets, but we are not able to monetize them and go to advertisers and say this is our audience and advertises are not buying it. they can't measure it. f you watch tv as you say, they can't seem to turn that around. super users and high profile users, but to bring up a good point, if tweets are seen by everyone, but then there is a limitation to that service. >> that's right. if you are twitter and an

advertising salesperson for twitter and you say i have 300 million registered users, but 500 million that sees our tweets all over the place, that advertiser will not pay unless you can measure and demonstrate that they are there, so they're having a very difficult time monetizing that. we see it in weaker than expected guidance. scarlet: i wonder what extent twitter is used as a political tool overseas. it was a big deal in egypt and hong kong. does its use as a political tool make it a threat in certain places like facebook is a threat in china? >> it may be. they're hoping, the presidential election will draw more users and engagement to twitter, which they can then monetize. lots of people point out how influential twitter is, but

do people want to advertise. are those the moments that brands want to connect with? meanwhile, ebay rallying 4% after hours. what is the story there? >> you want singles and doubles if you are an investor. you are ebay, trying to transition your company, a long transition from an auction site to a retail site like amazon. there is lots of competition in the online retail is is, so i think investors are trying to hit the numbers and show some growth and build from there, so it was a modest beat, but for these stocks and this investor is enough. scarlet: thank you so much. find his you can research and full analysis on the bloomberg. up, apple expected to

release second-quarter results at the bottom of the hour. we take a deep dive into apple. we had charts featuring the world's most viable company. ♪ -- the world's most valuable company. ♪

scarlet: i am scarlet fu. "what'd you miss?" we take a look at apple from different perspectives. apple haslook how been an underperformer versus the broader market, specifically against the nasdaq 100. it has an 11% weighting. we care because it is the qqq.lying index for the

apple has dragged the nasdaq 100 down about 1.5%, but if you take you see is that index has climbed 8.5%. me --wo things make strike me there. that is a remarkable gap without apple. long that for so apple was the only thing driving the nasdaq and s&p 500 higher, so now to be looking at charts talking about how much higher it would have been without apple, it blows my mind. preview for apple earnings coming out any minute now. i'm looking at what the options market is telling us. this is on the terminal. you can see based on the options implied move right here 4.63%

move. the implieds saying move after earnings is 4.63%. scarlet: not insignificant. ae: that is a big move for big company. you can look at this: to seep rise changes around past earnings. the average is 4.79%. the january earnings fell 6.5% after earnings. in october, it rose 4%. the one before that, felt for percent. .- phil 4% >> that's why we can't wait to find out what happens. some pretty serious action when the numbers come out. scarlet: we will bring in cory johnson.

and on the phone is shannon cross. a buy rating with a price target of $140. the big story for fiscal second-quarter, the first quarterly sales drop since 2003. apple is in a new world now. >> we have not seen this in 13 years. it is interesting to look at the size of this business and how these big moves have occurred. they apple watch sold more in the first year than the iphone, yet it is seen as a disappointment. charts onouple of where apple is coming into these numbers. growth, revenues expected

to decline 10%, but iphone growth, revenue growth just 1% in the last quarter. suddenly falling off a cliff. , in spiteat happened of the watch, in spite of services, ipad and resurgence of the macintosh, they iphone has become more and more percent, 66% of trailing 12 month revenue. it strips out the effect of new product releases. to bring in shannon cross. thank you for joining as. everybody will be looking at that iphone number. what do you want to see in this report and what do you expect, not just for this quarter, but for the quarters ahead for apple? >> what people are going to be

looking for is 52 million iphones in this quarter. when you look forward, there is million,roversy, 45 probably closer to 42 million, the question is how much has the iphone sd contributed. of cause doing get prior to the launch of the iphone seven in september? at the end of the day, everyone is focused on the iphone. the other thing is growth somen, because we will see impact on gross margin versus further out in the year when you get more benefit from currency, so there are a lot of lovers in play right now. scarlet: we have 30 seconds before apple reports. the time when apple decides what it will do with its extra cash.

what you looking for there? >> a 10% increase in the dividend and, $60 billion increase in share repurchase, $20 billion -- $220 billion for the program, which is fairly reasonable. they tend to look at the cash generated in the u.s. -- sector: apple reporting, -- second quarter, one dollar $.90, missing estimates by $.10. eps of $1.90. number of iphones, 51.2 million iphones in the second quarter, higher than what analysts were looking for, so that is a good number. its outlook for the third-quarter revenue, $41 billion to $43 billion, a disappointing outlook, although apple is notorious for giving conservative guidance. were also seeing a 10%

increase of quarterly dividend, and share repurchase authorization now up to $175 billion. growthguidance for margins really disappointing, a key number for this company. toss margins were expected be 39%, in line with what we have seen before. they are saying gross margins will come down to 37.5% to 38% for the third quarter. , but ita disappointment could reflect the introduction of a new phone, a new smaller phone, where gross margins might not be as good. can they keep gross margins up as they introduce a smaller iphone? clearly that answer is no. scarlet: are they willing to sacrifice margin to sustain market share?

one thing we find interesting with apple is the other products segment. ands kind of nebulous includes itunes, the watch, all those other things that apple needs to develop to take the reliance off the iphone. billion for the quarter, not a lot when you consider how much money apple brings in over all. with $4.35pared billion in the first quarter, so other revenue really dropping off, presumably to the apple watch? i am not sure. joe: meanwhile you're seeing the post-market moment by moment action. to what the options market was expecting. options market looking right in line. anythingre you seeing in these earnings jumping out to you? the math, eps implied of $1.31 to $1.43 compared to $1.76, so than miss

, and thenenue side again, gross margin is where you're getting the really big mess in eps. clearly the street will need to digest these numbers but it shows a cause and overall demand, some pressure from currency and hedging, and i think investors will have a lot of questions on the call. i just found the average selling price for the iphone in the second quarter, 641 dollars $.83, where as analysts were looking for $651. you compare that with the fact that apple sold more iphones than expected, is it doing with discounts. or is this fx? >> the big iphones in china sold in big numbers and had a higher

price on it and gross margin. the introduction of a new product is the time when gross margins will be the worst. as they introduce a new product, maybe it is not a surprise that gross margins are down. for apple, it is not the gold standard they have set in recent quarters. let's bring in emily chang from san francisco. you heard from the cfo, what are the takeaways? that when you look at revenue, it is down 13% year-over-year, but factoring in constant currency, it's more like 9%. he pointed out the strength of the services business, which is growing. he pointed out progress with the

out store, -- the mobile app store, apple music. he did point out a few things that are important to mention when it comes to broader trends. they are seeing a lot of first-timers, people who are purchasing their first smart phone. for example, in india, iphone units are up there 56%. emerging markets were continuing to attract first-time buyers. this is a respect to guidance, he said essentially customer demand is over $2 billion higher than the guidance we are providing. see a weak macro environment, so we want to remain clean and our channels. take our channel inventory down, the retailers like best buy and walmart, that

so iphones as well. a high said that getting number of switchers, people switching from android and other mobile platforms. they have seen the highs absolute number from switches in a six-month time, and also last year, we had a strong upgrade cycle with the iphone 6 plus, and excel a ration when we look at upgrade rates this year versus two years ago with the it is hard than two years ago, but lower than what we saw last year when people accelerated purchases of iphone because they introduce that larger form factor. thes optimistic about potential of the iphone as e, the cheaper more entry-level iphone. he said they are getting a great customer response. obviously it will have an impact, but we are constrained in supply for the iphone s e. demand is above what we were

expecting, and where working hard to eliminate that constraint. going to bethere's cannibalization here, other versions of the phone, he said it's too early to tell, all we know is that it is a popular product. additional color to what we are seeing given these numbers in the first iphone sales decline in a decade. great contacts. talking about how people were not upgrading their smart phones quickly as in the past. is this a structural change? if so, what does that mean for apple's upgrade program that it just put into practice? the topic ofeen discussion for the last few months as you started to see more movement away from subsidies to other payment plans with various carriers, so people if youually benefiting

no longer have that $30 a month payment, then perhaps you were not upgrade. much of annk it has impact on the upgrade program because that is a different animal and for people who want to upgrade every year and get the latest and greatest phone, but at&t talked about their margins today, just reported after market, and they talked about wireless margins being up because upgrade slowed, so i think this is something that if you look in japan for instance the carries are no longer really subsidizing as they were because the government is pushing back, so there are a number of factors that are coming together to slow the upgrade, but when you think about the absolute number of there is stille a very large addressable market for apple to cell phones into with the seven launch and whatever comes next. emily mention some comments from the cfo about sales in india. phone is meantse

to capture some of that market, whether it is india or china. how much did we learn about the state of the consumer in these emerging markets? >> we got a hand with the margin guidance, and maybe they are expecting a lot, i'm guessing, we don't know, that the new phone will have a worse margin than the funds that have been on the market for a while, that is how tends to become even though this phone should have components from the other phones and so on, but i think it will be an intriguing call to get that guidance. we might expect that before whatever the next iphone is to come out likely in the fall that there will be some sort of time here, and this is the worst of it. this is looking to be worse than average. my distorting to update model, an 18 percent year-over-year decline in iphone revenues is significant decline for a big business. 18% for the hottest consumer

product ever, maybe, i don't know, and that is a consistent 1% to -18%.o 36% to i think one of the reasons we are seeing that is that apple would release a device in years past in the u.s. and other slowly add other places over the course of a couple of months and even quarters, so you had a global rollout that was slow and so you had steady growth happening because you had new markets being added every few months. they've crammed so much thatacturing capacity they're able to come out with a new phone worldwide in most of the markets they care about, but the problem is they don't have a new product coming out. so you can a see a little more lumpiness, and you can see that in the results would look at for apple for eight quarters looking backwards, and that's when the reason these results look weak and the guidance weaker. joe: stay with us.

scarlet, you have more earnings. reporting apotle first-quarter loss of $.88 a share. comparesknow if this with the consensus estimate of $1.05. we will get back to on the detail. in terms of revenue, revenue lighter than anticipated for the first quarter, $834.5 million, analysts were looking for north of $863 million. clearly the safety crisis taking a toll. comparable sales in the first , down 29.7%. analysts were looking for a drop of 28 .4%, so expectations were fairly low, yet comparable sales came in worse than anticipated. nevertheless, is looking to open more restaurants in 2016, two hundred 20-235 for the full year. we will go to the results, but

in the meantime lower by 3% in after-hours trading. we are monitoring apple shares, apple shares lower after its sales coming in less than analysts had anticipated. we will continue to monitor these details for you. the stock is down 6%. ♪

scarlet: "what'd you miss?" just reported second fiscal quarter earnings, a miss. this is what investors are responding to. apple announced it is boosting to 57 cents,

expanding the capital return program and buying back shares. cory johnson and shannon cross with us. the cashhear about return program, the capital return program, has the company put doubts to rest? they increased share return of that less than expected from a share repurchase standpoint. the dividend increase is in line with expectations. all i think they will get more pressure to return cash with the stock at $98. they refresh this once a year, so i assume we would have to wait until april to get another one. joe: we heard emily chang about eer conversation with thi cfo, and the macro environment was characterized as we come how much does that affect apple

here? is this just about product cycles and the macro story? this company is so big, how can it not be influenced by the macro environment. it is true that you have product cycles as well. an 11.6%ing that decline in the number of macintoshes sold. you now have consecutive quarters of macintosh unit slipping as well. maybe there is a product cycle update their. we have not seen any announcements yet, but it is interesting they would see a slowdown and that as well. cycles gettingt long and their life cycle and you can see the slowdown across a lot of product lines. with regard to the mack, they just refreshed the macbook. that will come in this quarter, 're expecting a

significant refresh, so that should improve to the year. what did you work on apple services business tell you? >> investors have been so focused on iphones and gross margins that it is somewhat of a switch and our mindset. the company is focused on it. one of the things to keep in mind with this company is you take services, iphone, yes, slowing, but a recurring revenue stream because you have all these people locked into the apple ecosystem. one of the things that i think investors to look at is the fact that this is a significant recurring revenue story, and the more services become a portion of that revenue, the more they buy into that. i think that growth there is important. cory johnson and shannon

cross, thank you for joining us and helping to break these down. apple shares down more than 6%. see chartsthree must ahead of the fed decision tomorrow, next. ♪

scarlet: i am scarlet fu. "what'd you miss?" federal reserve will probably not raise rates tomorrow, but investors still need to position themselves. let's start with how hedge funds are positioning themselves. the dollar trade was big earlier this year, but what we have seen is that hedge funds have taken their net dollar positions below

zero, so they are short on the dollar for the first time since july 2014. what does that tell you? has stoppedrket taking its lead from the ecb and bank of japan. we are going to get the bank of japan this week, but what you rise of theig sharp dollar that began in the middle being led by the ecb, and so the fx markets followed big and you saw the fastest rise of the u.s. dollar in a nine-month time span ever. thereome would argue that is a massive divergence and where these economies are. to full is close employment, close to achieving inflation goals. japan and the eurozone don't seem close to that, so is this negativity towards the dollar

make sense to you? >> i would not call it negativity to the dollar. i would say that i do expect over the medium-term that there will come a time when the dollar needs to go up another 10% from its last peek for this cycle to be done, but what is more important is the very old and familiar adage, what is in the price. if you think about with the dollar did and rates have done keep in mind that the dollar was up 40%. if youend of the day, look at boj rdc bay, when they --e rates by 10 basis points so i am just saying a lot of hikes are already place. so what about the market rebound since february, p/e ratios bumping up against this aroundlike a ceiling, 19.

how much is the fed responsible for these elevated pes and do we need to see a dovish fed to make another move higher? >> i would argue that the fed , probably aothing negative impact on were equities are today, so -- joe: why is that? most people would say the opposite. >> it is not half a sentence answer. i would say is keep in mind that in every recession that fixedody goes overweight income, i huge move into fixed income, as the market stays overweight in fixed income because the fed continues to cut interest rates, then comes a long pause and the beginning of rate normalization, and that has been historically has so stated with their renormalization of

asset allocation flows away from into income and back equities. the fed has not normalize rates this time, so that has not happened. 800uld argue that there is trillion dollars to 1.2 train dollars overweight in fixed income. you can also look at the ten-year treasury yield. scarlet: you've done a lot of work on that. were not looking for the fed to move to mark, but at some point in 2016. >> we have spoken in the past about macro data surprises, and the point i would make is that you can look at any sort of measure of macro data surprises in terms of their frequency, today, last week, last month, last three months, last six months. the market tends to focus on a surprise index.

our work shows that the fed as much as cautious and tends to take a six-month approach, so if you think about what data surprises have done over the , the six month has moved up to neutral before the fed is ready to go, so a close call between june and maybe july. joe: what are you looking for tomorrow? would you want to see? >> i expect the meeting will be a complete yawn. the bigger risk is the boj later this week. joe: got it. scarlet: thank you. joe: coming up, what you need to know to gear up for tomorrow's trading day. apple falling by more than 7% in after-hours trading, the first quarterly revenue drop in more than a decade, also forecasting a decline in sales for this quarter. falling, now also

declining in after-hours trading. ♪

scarlet: i am scarlet fu. "what'd you miss?" atnese industrial profits tonight at 9:30 p.m. eastern time. the i will be looking at fed decision at 2:00 p.m. eastern time. tune in to our special starting at 1:00 p.m. downll be here breaking the pre-and aftermath of that decision. don't miss facebook earnings tomorrow after hours. twitter shares down with a

forecast that this is as the men's. that is all for "what'd you miss?" thank you for watching. joe: we will see you back here tomorrow. âi

ton: with all due respect amtrak, it seems like you have an itty bitty problem with your branding. the a slipilled as primary. the accelerated primary. >> what some are calling the -- -- hat some are calling >> the amtrak