officials, giving voice to unease when the president should have policies to the country's biggest adversary, vladimir putin in a nonbinding resolution adopted 98-0 today. centers called on the u.s. who refused to make any officials available for interrogation by putin's government. president trump is sucking up to president vladimir putin, the mr. trump'sf one of fiercest critics, senator elizabeth warren. the democrat from massachusetts as the president himself preservation mode after days of criticism following days of mr. putin in helsinki. sent -- senator warren spoke with bloomberg television's kevin cirilli. elizabeth warren: we are in place where donald trump is an mode.rotect donald trump whatever is necessary, he cares about exec one thing and that is protecting donald trump.

mark: the president tweeting today he would like a second summit with putin. dominic has met his eu counterpart for the first time in brussels. meeting took place in the european union was urging member states to prepare for brexit scenario possibilities including one where they leave with brussels outlining future relations or trade arrangements. >> particularly on citizens we haveu.k. citizens, taken stocks and make an good decimate good product -- good project -- progress today. >> nations are aiming for a smooth exit for part of the u.k.

in march 29 talks are progressing slowly amid deep political divisions in london. serving the environmental protection agency to strengthen the oversight of state drinking water systems in the wake of the lead crisis in flint, michigan. to react more quickly in times of public health emergencies. contaminant with lead in 2014 after officials switched from the detroit -- detroit system to save money. at least 12 people died. global news 20 -- global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪

julie: i am julie hyman. scarlet: i am scarlet fu. joe: i am joe weisenthal. >> stocks are selling off in part due to weekend earnings. joe: the question is what did you miss? >> president trump treads on a fed to his criticism of recent rate hikes breaks with the white house convention of staying out of the monetary policy lane. al as the sidelines for years to come. path, atst cleared the a crossroads after dropping its pursuit of 20 for century fox's entertainment, going all in on its bid for skype. the fed is under fire. chair -- criticizing jay powell interest-rate increases. from a than two of precedents for the president to avoid

commenting on monetary policy. back-checking these remarks saying president trump is not interfering with the fed's's decision and that he respects the independence from the u.s. central bank. peter.ing more for i want to start with you. does it matter that the president said this? will this be at the back of the fed on the official's mind? >> the reason the president is not usually talk about the fed, not the usual politeness. one is people start to feel, allowing the economy to -- and the rates in will rise. it will preemptively raise rates. --her way,

>> of this idea of central bank independence intuitively makes a lot of sense, when the fed is faced with a tough decision. you do not want to slow the economy but inflation is high and we want them to make the hard choice of raising rates without a bunch of politicians complaining. they are not in that situation today. years, both sides on an undershot on inflation. it is not really where it faces a tough decision. it is tricky. >> a broad consensus with the federal market committee to raise gradually. jay powell's first want to say we are in a sweet spot. growth is strong. the fed is managing interest-rate policy. it is hard to see the problem trump is talking about.

>> equity markets did not really change that much but the dollar took a hit. >> yes, we saw that but the market is basically telling you today, they are not too concerned about this. looking at the 10 year yield and the two-year yield, they did not even budge. still tracking 2.84, which is where we were for most of the afternoon. that is telling a lot about how the market views what will happen going forward. point, there is a lot of face being shown in the market so far. they seem to take these more calm and genteel and soft-spoken us. i do not think the one comment by the president will be enough to shake that. president, into, the i think that would be more of a concern. jobe tweeted out before

summer. which youver story in talked about the possibility about the changes the president is making to the world order will be permanent. >> maybe not permanent, but certainly lasting beyond his administration. but for example, one thing is that trust is crucial to international relations, including commercial relations. trump is breaking the bonds of trust with other companies abroad and it will be hard to repair the bonds. secondly, nationalism tends to drive countries apart and keep them apart. even if the next president is a devoted internationalist, it will be hard to repair that and get people feeling more international.

>> i am wondering if peter's story about the long, how long it could take to heal some of the stuff, could it explain why we do not see much market thision for the most part? is slow-moving, tectonic stuff. a big deal but not the kind of stuff you might see people trade on. >> after seeing a lot of earnings calls, this is what a lot of cfo's are getting at, they're are basically saying they have seen the major impact. are having to take into account supply chain effects. if there were a company out, i thought the ceo made a comment of what they are saying. he basic said we are not too worried that are considering four things. and supply changes, manufacturing relocation, and a long shot at exemptions. willd not say the things

materialize tomorrow but they are putting in contingency plans just in case. >> when you disrupt supply chains, it sows the seed for a distrustful relationship between companies and countries. >> that is what jeff olson said, she for staff to president george w. bush. a mainstream republican free trader. he testified that actually that is what would happen. to actually cause the u.s. become less trustworthy, a trading partner. >> one thing was much more dramatic and this caught my eye. this was a political scientist, an older veteran. he said we have to consider the hypothesis that trump's intent is to destroy the institution of the liberal international order. i mean that sounds pretty dire. >> there is also a hypothesis. we do not want to be reading into his mind but some of the things he has done or -- are consistent with that. theeat example, it is real,

trump administration refusing to clear a pointless to be the appellate body of the world trade organization. the number of people is falling down below the threshold at which it will not be able to function. >> things stall out. different organization's just can't function as a result. >> that would be the fear. >> all right. thank you both. a reminder you can read the cover story in the latest issue of bloomberg's businessweek p are coming up, we will hear from elizabeth get her take on the president's in court nominee and the bankruptcy, same severance as the lawyers who worked to wind down. this is bloomberg. ♪ ♪

>> the fight to block president trump's's supreme court nominee brett kavanaugh. this was addressed with elizabeth warren earlier. senator warren: judge kavanagh has already ruled in his position in the lower court that the consumer financial protection bureau is unconstitutional. >> a growth -- growth to pressure. >> let's be clear. he was overruled by the entire panel of the court. sure tells you the direction his coming from. when it comes to whether or not you will get in there and say they should be able to work to support people who get cheated on mortgages, credit cards, payday loans, student loans, whether or not they can help the market be a little more level, a level playing field, or, and the rich and the powerful can do whatever they want. judge kavanagh has made it

clear. he is for the rich and the powerful. >> is there anything he can do aside from using the megaphone and getting out the vote, because a lot of democrats i've took -- i spoke to, the numbers are just not there. elizabeth warren: the numbers were not there a year ago on health care. short, tond, we were be able to stop the health care bill. yet enough people across the did it loudly and long week -- long enough, and they did it. democrats and republicans and ultimately,, and health care for 35 million americans. i want to see more of that. some of thesek employees deserve some of the same protections when this was going through the process? itzabeth warren: absolutely is a key part of my life's work. i believe strongly in markets.

one of the things about markets is they have got to have rules that everyone plays by. the rules have to level the playing field and make sure everyone has got a chance. with a lotside group of money can come into a place like toys "r" us, and vacuum up ,verything and leave employees small trade, the folks who helped supply the business, when they can come in, and take all the value and leave nothing for anyone else, then capitalism doesn't work, the markets don't work. markets can produce enormous value and they do in our economy. but they only work if there are rules so that, in advance, we all know what the rules are -- what the rules are and everyone abides by them and they do not just day with the rich and the powerful. >> senator lindsey graham, how

was that trip? being in iraq over the fourth howuly was a reminder of really terrible asus was. and i saw howle hard the fight was to get isis out of there. place where there is still no plan going forward. there is the united states in its 15th year in iraq and i look , if there isthink not a change, the next generation of tariffs and the next and the next, will grow up in of -- in this very same spot. turn to the trump administration and think, what do you have in mind, and it is dead silent. senatorwas democratic

elizabeth warren of massachusetts. julie: thanks pete time for a look at some of the biggest business stories in the news doubt. -- in the news now. accused of misleading them about that takeover of tribune media. the fcc has sent the deal to the uncertain future of the hearing. this accusation has to do with sinclair's proposed esters of several -- to avoid ownership limits. the fcc says sinclair was poised to put maine in control of them. more trouble for the embattled senator, -- the papa john's pizza chain. an outside firm to oversee an audit an investigation of the culture of the company. -- point tobes problems allegedly spying on employees to inappropriate conduct. he refutes most of that story. the market in new york city is rebounding.

in wakefield, sales of property such as office buildings and proper -- a partly complex told -- totaled more than $100 million in the past year up 34% from a year ago. than half a million in the same time in 2015. up, u.s. aluminum tariffs that were meant to protect the industry from foreign competitors are instead taking a bite out of the earnings of the nation's largest producer. we will have that story. this is bloomberg. ♪

>> a bite out of alcoa, the company lowered its profit of -- >> tariffs on aluminum imports, increased energy, and operational impacts. it isn't just aluminum under

pressure. the bloomberg commodity that has tumbled about 10% from a high in may amid mounting concerns that a trade war could the real girl -- global growth. us now.ith let's start with aluminum. what happened? domesticpposed to help producers. >> a lot of analysts were expecting it to be downgraded bio:, which they did, largely because of oil prices and aluminum. it may be took a little bit of the margate off guard, how much the tariffs impacted aluminum coming from canada, back into the united states. i spoke with the ceo and asked him about it. he was right up front and said listen, this was a big deal. a $15 million cost for us in the recent quarter. it is just reality that people have to live with. seeing isloff we are getting a lot of attention now. aluminum, copper, zinc, whatever, gold, platinum.

it is just already in how much are people saying it is the trade war and how much are people saying global growth, and how much are people saying you cannot really disentangled the two to go straight would probably have an impact on global growth? >> i think you're right, it is very much looking at, they have their comments and people start worrying there is a natural trade war going on here and there is concern at the economy will see some sort of demand and it will start to decline. bit to the dollar playwright, the yuan is taking a hit against the dollar and china is 50% at least in most consumption of metals globally, like the whole market, they are buying in dollar priced metals. obviously, it becomes a lot more costly and that is a reason you are seeing it. >> the price action of the different commodities, and gold down below to 20, how much will

land results for this quarter as well? is not just the impact of trade war, but also the price action is a driver here. keep froms a thing i anyone in the market, they had been asked the question for months. debtor midterm to long-term. in the immediate term, we know how we will be impacted. medium-term, we are ok and some of the downstream users, they are hurt. they are wondering what it means, midterm and long-term. they have yet to see what will happen. i was told on the phone listen, we are still seeing good demand from the customers. there are those concerns and this is pretty much what everyone was saying. >> ever member we talked but this for last time we were on the show. not look like they're stocks have done that great. have you encountered anyone who is like, yes, we are loving this? got cut off this afternoon and they did say we

continue to be happy with the tariffs and that they are in place, and that we are action seeing current customers i'm more from us and new customers by more as well because there are questions about people just -- >> and shares are down today. >> yes. again, you start looking at across the board impact and that might be part of it going on as well. >> all right. thank you. and we hear from sarah sanders at the daily press briefing. present trump invited vladimir putin to washington later this year, in the fall, according to sarah sanders, saying the president invited is important to washington in the fall, after their summit in helsinki earlier this month. we will keep you posted on any further headlines p are chairs of abby are among the worst performance in the s&p 500, down at the lows and a bearish call from our friend andrew. abigail doolittle is taking a

look. abigail: this is stunning. came in with a treat saying it is the next great drug short. a $60 price target. this is a $90 stock. a 30% drop in the next 12 months head --king on the fda and a drugmaker's are not as competitive as they need to be. andrew is saying the severe 60% ofhit on him era, their revenue. want to bring us into the bloomberg to take a look at what is happening for revenue growth because this is extraordinary over the next few years. is on patent until 2023. it does not even go to 2023. so, a direct hit, it is hard to see how he believes that will be the case. and the fdaected cannot really mess with that. joe: there is no obvious reason at least in the next five years,

why and expanded market -- >> yes. absolutely it is protected. the knowledge meant that this will come up in 2023, there is that perception. thing, having a market moving impact, there is something that, he was actually the second person to make the call. i was putting together this other chart of things he has done more recently. another stock i am not familiar with. not great. >> what is interesting quickly is this was just a tweet and not sort of the big research. >> all right. thank you so much, abigail, with the stock of the hour. the market close coming up in moments. in the dow is off by half of 1%

or the s&p 500 losing .4% as well. it's appointing earnings weighing on major indexes and we are gearing up for more earnings including microsoft. this is bloomberg. ♪

[applause] julie: "what'd you miss?" stocks fallings, hurling's

expectations have downward proper -- earnings expectations have downward pressure. i'm julie hyman. scarlet: i'm scarlet fu. joe: and i am joe weisenthal. if you are livestream on twitter, welcome to the closing bell coverage. we begin with market minutes and a selloff in stocks. where a versatile -- we are versatile. they were in the bottom category falling by one and a half percent. has to do at disappointing earnings from the financial members of the regional banks like bb&t fallings after earnings. as well as american express taking ahead. that was the drag materials, also the drag as we continue to see the selloff and commodities. it is spilling over to the stocks we have been talking about. real estate is the best performing.

on's get to the movers earnings. ebay, that company is cutting its annual revenue forecast. competition from online rivals like amazon and also companies like walmart. , we just dug into that, their shares are down 13% as they talk about the effect of tariffs on aluminum that it produces in canada in particular. that is a headwind for the company's earnings. american express, the stock is in two months. it will spend more on retailer and marketing partnerships this year. the company is saying earnings will be at the high end of the forecast, but not above that. there were high expectations going into that. finally, this one i have to admit flu under the radar for me. a canadian company, is the first to complete aness

major public operation. shares traded today and there was quite a bit there. joe: let's look at the government bond market. and rates arer, substantially lower. the two-year yield is down to 2.59%. tenure is down to 2.84%. there you go. that threatening -- flattening gives a two basis points between the two and a 10 year. the data was good. and i spent number. nonetheless, more flattening. part of that reversal, the president making comments today as well. chinese currency is dropping like a rock, he is not happy about interest rates. if you look at the dollar index, it is lower around midday right around when the president made

those comments. the dollar has started off firmer for a third day against all of the majors. the pound briefly dipped below $1.30. belowro-dollar is falling $1.16 since early july. take a look at the chinese currency as well. the onc is weakening sure exchange rate beyond 6.7 which shows the central bank is not drawing any line in the sand. there is a steady depreciation of the yen there. we get microsoft numbers coming out right now. let's pull them out. the fourth quarter revenue billion.$30.1 that is beating the average analyst estimate. $1.14 is topping the consensus estimate of $1.08. 23% is a stock that jumped this year. it is just below the record high as well. you are seeing a lot in the

after-hours trade. the intelligent cloud revenue -- julie: it is a lot higher than estimated. scarlet: that is what everyone is looking at. in the previous quarter, the cloud division saw growth up to 93%. julie: the intelligent cloud billion, 7.9.61 billion would be far above estimates. if you look at some of the other units, we get a personal computing revenue of $10.81 billion. that looks above the estimate we had from analysts as well. have that intelligent cloud revenue, productivity, and business processes revenue at $9.67 billion looking like ahead of estimates as well. we will have to dig in to find out why the shares are down. scarlet: when you break it down by division, it seems to behind than expected. the stock has rallied a lot at

first glance this year. there was a lot of expectations heading into these numbers. microsoft is beating earnings estimates for a ninth straight quarter. we will dig in a little more, , we werejulie on capex looking for 3.8. this: their shares up 23% year. to your point, a lot of expectations there. billion in operating in income. i think it is worth driving home weause it shows even though don't quite put microsoft in the same category as facebook's and others, they have extraordinary income gain numbers for such a legacy company. scarlet: let's get to commodities because that was a big -- today was a big day. joe: on commodities, oil bounce back a little bit. a little bit less than 1%.

down .5%, copper getting slammed down 2%. platinum which is a hybrid industrial precious metal down 1.2%. it was about those industrial metals getting hit. if we take a look at the bloomberg commodity industrial metal some index, you see it falling off of a cliff. it isteresting thing is still up 3% year-over-year. you really see how fast the wheels come off this area. those are today's market minutes. julie: we have earnings from skechers. not as large of a company that it looks like quite a disappointment for the shoemaker. second-quarter earnings is $.29, $.41 was the estimate from analysts. up 4%.ble sales not a bad game except that analysts have been averaging a 5.2% again. per share is missing and the company is forecasting earnings for the current quarter below estimates as well. most $.55.for an at

analysts had been looking for $.68. falling 25% in after-hours trading. that's as it comes out with the numbers. as far as i can tell across the board. scarlet: capital one reporting results as well. beatinguarter estimates. the highest estimate as well. the reported number, the consensus estimate was for two dollars and $.63 -- $2.63. the actual eps number was $3.61. a net revenue of $7.19 billion. $6.94ere estimating billion for the. best for the perio -- for the period. charge-offs are four point 67% as well. as investors look for any kind -- 4.67% as well.

investors are looking for any kind of sign that they could get. "what'd you miss?" for more, let's bring in jim swanson. we went over numbers on whether it is microsoft, skechers, or capital one. you cited concerns with the strength of consumer in particular. when you look at early results that we have gotten, whether it is skechers or capital one, do you see your concerns validated? jim: they are. i think you have seen the peak of the u.s. consumer here in the cycle. the real incomes are being threatened by rising costs across the board. rent, interest cost, and real wages are being compressed. they usually pullback. cap prices are higher than a year ago. i think that is starting to slow

down. when you take all of this information and you proceeded that's with, china it and commodities are slowing down. i think the whole picture is, you saw the peak in the cycle, and i think investors ought to start being cautious here. joe: do you think the gas price story has gotten the attention it deserves yeah code sometimes we dip into it but you think it is biting consumers more than people -- it deserves? sometimes we dip into it like you think it is biting consumers more than most people? james: it is a very important part of disposable income. you can see the problems in retail. consumer staples, some of these companies are having troubles raising prices because people are switching away. they spend money on gas and buying fewer goods elsewhere. it is a warning sign here. julie: when you look at earnings we have gotten thus far, we are not seeing it reflect

necessarily in the bank earnings that we have gotten. we're not seen an uptick in loans, there seems to be demand for credit for example. when do you think we start to see more signs of the corporate level -- on the corporate level? 20%s: i think we are only market cap reported for the cycle. have been from margin expansions. companies doing better, more productive. this quarter you are not seeing that. coming from? from top line. how sustainable is that given what is going on with consumer where their cost of living is going up. companies are eating some of these tariff increases. they can't pass them on. i think you have seen the peak and you have seen for sectors of the s&p were marchers -- margins

are deteriorating even though earnings are good. these are signals that say be cautious here. the obviouse of questions for all investors is what to do about tech. microsoft earnings in the last couple of minutes, it is now higher. ,f one of these tech companies if the earnings are incredible for a couple of days of this market cap, going into earnings, how lofty are investors expectations -- investor's expectations and can the industry deliver? james: the industry can. the tech sector is in a good shape. andou have a neutral waving stock, start to pull that back and be more conservative. overweight in tech and health care. 16% year-over-year growth in cash flow margins is what i look at. how will these companies can generate cash flow. the b2bing about

, allrs, caught companies the companies behind behind-the-scenes doing fantastically with no debt. changing our lives, changing the economy. that is a strong sector, and you are not paying a much of a pe premium. the average company, not the real big ones. big fan. scarlet: when you talk about tech, there is tech and faang stocks. ifie: i would ask you then, you talk about people being cautious and maybe trimming risk, what does that look like exactly? give us more details on how you express that caution. james: i express it to our clients like a typical client might get 60% equities. as you go through 2018, you start bringing that down and adding to high-grade bonds. i think they are not cheap but a much lower volatility asset class to be in.

i remind our investors that while i do not see a recession coming this year, we are now in the tent year of this business expansion. the s&p is up 300% since own nine. it is been quite a long cycle -- since 09. it has been quite a long cycle. i think that means pullback risk , not dramatically to cash, but slowly pullback risk and be smarter about diversification here. julie: jim, thank you very much. jim swanson, chief investment strategist joining us from boston. let's take one more look at microsoft and recap the numbers the companies, maybe the shares are turning around in the after-hours. -- .3%e up about 20% now now. the various units beat estimates. intelligent cloud revenue,

personal computing revenue, and productivity and business processes revenue, all of them beating estimates. companies are spending more money and capital expenditures. earnings per share are also beating estimates. we will dig more into microsoft. this is bloomberg. ♪

mark: i'm mark crumpton with first word news. president trump once vladimir putin to come to washington later this year. the press secretary said the asked his national security adviser to ask president putin to come sometime this fall. earlier today, the president we did he wanted to have a second

meeting with the russian leader. the republican-led senate effectively rebuked president trump today for considering russia's request to question american officials. shifted hist efforts to the country after -- vocals on the u.s. to refuse to make any officials available for interrogation by the russian government. the chairman of the house committee has concerns about u.s. tariffs on china. this texas republican tells bloomberg television he is in talks with the trump administration to narrow the focus. >> we think the president's right to challenge china in unfair trade practices. we want them to be targeted approaches. right now we think it is too broad.

economytoo much of the and makes a great punishment here in america and our allies that is unnecessary. we are working with the white house. sendschina's government it filed the wto challenge to the tariffs to safeguard the fundamental principles of the wto. the general overseeing american military operations in afghanistan is taking a new look at the war strategy president trump announced in nearly a year ago. the general says he wants to coulder changes that improve prospects of afghan government peace negotiations with the taliban. the u.s. has about 15,000 troops in afghanistan. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. julie: "what'd you miss?"

we just had earnings from much real of companies and we will get more on microsoft in a moment. it seems to beat on most metrics. skechers shares are being punished pretty severely in after hours trading. they are down by nearly 22%. that's after the shoe retailer came out and said its sales rose less than estimated on a comparable basis last quarter. earnings-per-share missed estimates by a wide margin. the company said this quarter, earnings-per-share they got55 -- $.55, estimated at 60% read the fed is under -- $.68. the fed is under fire. earlier this afternoon, president trump took aim at the federal reserve chair saying he appointed -- that he appointed

criticizing rate hikes. the white house already backtracked the remarks saying the president will not interfere with the fed's decision and respects the independence of the central banks. for more insights, let's bring in peter conti brown. power andhor of the independence of the federal reserve. he joins us by phone. peter, thank you for your time. but these context in time up and a couple these negative branch not interfering in these things. peter: four decades after the fed's and until the early president's grumpy with the policy decisions had not been shy about making comments on them. the last to do it in a direct way was george h.w. bush in his 1990 one state of the union address. he demand the fed raise interest

rates. that did not go so well for him. i'm sorry, the fed lower interest rates. whichd did not to do that lost the election and the clinton economic team and the clinton economic team reflected on their relationship with the fed. it created that rule and norm of presidential noninterference. the norm stayed for 25 years. the fed chairs, they are all human and would all insist they would never let politics ever influence their decisions. nonetheless, we know the preiser independence quite highly. is it plausible when a president makes comments about don't do this or that, it could backfire and produce the opposite result? peter: i think it is very plausible. i do not think it is likely that soft criticism like this would cause the fed twofold -- to fo ld. the bigger chance as you say is that the fed overreacts and says if that is what you think, we

will accelerate our rate normalization more than we think it's prudent. i do not think that is likely either. although that risk is there. the bigger issue is that the perceptions of what the fed will in consequence of this kind of criticism are going to be extremely difficult for the fed to control and very important betweenmarkets and political campaigns in board rooms and newsrooms. scarlet: it just as another variable for investors, the fed, for everyone to watch. especially getting monetary policy back to a normal, boring situation. , if thepens, professor president comes out and asks the fed to not to raise rates anymore rather than saying he is disappointed? how the fed respond? peter: this is why i think today's interview is much more important than it might seem.

president trump is not responded -- notet correction responding to market correction. when we do have those things, i think the fed will get the same treatment the journalists have gotten from the president, the f the eye has gotten, that some judges -- the fbi has gotten, that some judges have gotten, and that will be a publicity war. the fed has not come out well in those wars. the fed depends so much for its legitimacy on public regard for it. that would be devastating if the president takes 85% of republicans with him in denigrating and trashing the fed's institutional identity. julie: one more quick question. what about as you say, if he takes republicans with him, with the other institutions he has yntact, he has mostl been supported by the majority

of congress, but what about the fed? is the fed different? has congress been traditionally respective of the independence of the fed? peter: the coalition that haverts fed interest rates been more identified with republican party than the democratic party. that is to say if you build an establishment republicans like large bankers or others, they have said we want to respect to the fed's independence. two dozen eight bit a funny thing for those alignments. today, the political climate is much more hostile to the fed with republicans running then democratic ones -- republicans, then democratic ones -- republicans than democratic ones. scarlet: we live in interesting times. you fornti brown, thank giving us your perspective.

let's recap microsoft's earnings. bottom linevenue, across different business segments of the company. we want to give some context here. we have our bloomberg technology senior advisor with us now. were these numbers pretty much anticipated by investors in the 23% gains this year? >> i think they were. if you look at the breakup of revenue, you will see the business and productivity application was slightly disappointed. -- disappointing. the cloud was pretty good. that is what you expect from microsoft. it has three main segments. at 15%.ing revenue is for a company at this size, growing at 15% is a stellar year. i think they will have a tough time next year beating because of the comparisons that they are

getting now. the platform seems to be red-hot. will this be like amazon like the first thing we look at is how they are doing in cloud stuff and that becomes the number everyone automatically keys up? azur is their biggest growth market and you will see amazon services leading the pack. cloud is such a secular growth story. it is something that companies, especially the big three guys, they can assume 20% growth is a given since it is such a big market. the tailwind is so strong that it is easy. julie: we heard from ibm talking

about cloud revenue as well. is the demand for cloud as such that it will not just extend to these big companies but that there is enough for? smaller cloud players is this a preview of what we will -- for smaller cloud players? is this a preview of what we will see the season? mandeep: the ibm cloud is a very small portion of the revenue. i think it is a mixed bag. for companies that are purely cloud, this will be a big tailwind. it is not changing anytime soon. scarlet: we will look for that, especially in various companies. mandeep, thank you very much. it? did you call joe: azure. mandeep: is better to clay -- better to say cloud of thing. scarlet: cloud, there we go. more news just ahead.

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mark: i'm mark crumpton with first word news. national intelligence director, dan: says he wishes president trump had made different statement in helsinki where he appeared to give credence to russia's denial of interference in the 2016 presidential election. he said in the security conference he was just doing his reviewed presidents comments standing next to vladimir putin. about attacks on the american intellectual process. >> it is undeniable the russians are taking lead on this. they're the ones trying to wreck havoc over our election process. we need to call them out on

that. it is critical we do that. in 2014, when he was a member of the senate from indiana, he was banned from traveling to russia for calling out its annexation of crimea. disco markovich has shrugged off comments from president trump when he suggested the tiny company could start world war iii. at a nato summit, markovich suffer the indignity of being shoved out of the way by president trump what appeared to be trying to get in front for a group photo. mr. trump questioned whether ghto's defense pack mi lets montenegro start the next conflict. theireconfirmed affirmative friendship with united states and it was proud of their preschool politics -- peaceful politics.

>> [indiscernible] the first world war in the was a world war, there place. in montenegro sporting the peace. mark: montenegro was bombed by nato forces in 1999 before it split from serbia in 2006. the spanish supreme court judges dropped an extradition request for six separatist politicians wanted on rebellion charges including the next regional president. he was taken into custody in germany in march. a german court recently ruled he could not be sent back to spain for rebellion, only for misuse of public funds. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg.

recap oflet's get a some of the after bell earnings we heard. 1%.tal one is up by 9/10 of the results are better than expected. capital one reporting a big beat the bottom line. $3.22 and analysts were looking for $2.26. on the other hand, you have skechers usa reporting net sales for this quarter or giving a forecast for the this quarter would miss the mark. it sees net sales of at most $1.23 billion when analysts were looking for 1.2 3 billion on average. that gives you a sense of the miss their for skechers. julie: "what'd you miss?" comcast bows out. they are driving their pursuit of 20% jury box assets. it was going head-to-head with disney to compete for those assets. comcast had been $65 billion.

this needs most recent bid topped $71 billion. comcast is continuing to pursue other interests. larry haverty joins us now. it is good to talk to you. this seems to be quite a surprise, even though every time there is news of conquest that's comcast, the stock would go down. is this comcast bowing to investor pressure? i think there are two aspects to it. one, brian has always been very responsive to the market, the forany, i have watched them 30 years and had marvelous relationships with investors. certainly, the market relentlessly and methodically pushed comcast stock down. where i thought, when it was hitting is a 52 week lows, it

was really preposterous given the quality of the company's assets. the second thing is that fox had a big-time advantage. they had regulatory approval. the shareholder vote is set for next friday. there is time and money. as you learn lesson one of finance, time is money. handt picked the burden rather than one in the bush. time was weighing against comcast. i think brian did the intelligent thing. the market has agreed with him. i personally think he did the intelligent thing squared in that i am a great believer in sky. i have watched it since it was losing 1.5 million pounds a week. i think it is a marvelous business. effective, and -- market flows.

i'm on the side that brian did the right thing in several directions. sky ande goes for finishes that process. herei think he walked away and it made investors not to get the thing they dreaded which was a relentless bidding war where there would be few winners and a lot of losers. joe: larry. talk about the opportunities then. they're relieved that they are not going into a bidding war and paying too much, but tonight you have this new asset and likely this new combination, how powerful do you think that will be? larry: i think it will be extremely powerful. is theng i like year theme parks and the films, and the synergies.

if you look at the superpower movies, i remember years ago i was with the head of universal studios and he told me that jurassic park one made its cost in five days. that was regarded as a big risk. costthese films make their in the opening weekend. in ability to monetize books, such as toys, comics series, is almost limitless. disney gets control of star wars franchises, the marvel franchise , the avatar franchise, and cameron is working on i think three more movies coming out in the next 10 years. disney just opened in avatar park. the cash flow that they are paying is not very significant

relative to i think what the quality of the assets and ip is. it might be a little high. viewed in the five or 10 your perspective, given disney's assets, this is a grand slam home run. we will see, but the public is voting with their wallets. they like these superhero movies and i think we will get another taste of this next week. understand the mission impossible film is maybe the best, it is not a superpower movie, but the best of these event films that has been made in a decade or so. scarlet: tom cruise thinks he is definitely a superhero. [laughter] i know you own all of three of the stocks outside of the way they are responding. each other media companies are in a position to move forward from the shakeout we are looking at right now? larry: i think you have to look cbs.e viacom and

i am more on cherry red stones side -- redstone's side. are putse companies together, there are still subscale relative to what is going on if you assume the telephone company will eventually get control of time warner. that they will prevail in court. i would expect the combined viacom, cbs to go to one of the tech companies that i think are a pretty good multiple. the ones that are left independent i think will be one way or another doing a disappearing act. thing from ang shareholder point of view here, and this is good for all of the media companies, there is nobody here trying to steal assets. when a company gets a lot of credit with their conference where they bring all of these

people together, everybody who is a media investor has a pretty good idea of what the things are worth -- these things are worth. it could be a greater than zero sum game. i think there is a situation that illustrates it where everybody wins. i think even the consumer will win. the idea this will raise prices is not the situation. everybody wants to make this content available on more devices. it he, thinky have you so much for joining us from naples, florida. we stick with media because betting on sports, we will speak on how one company is growing its content at 200 pieces a day. this is bloomberg. ♪

scarlet: "what'd you miss?" the business of barstool sports. it rivals as pm with its unique point of view and original content. what is the space for barstool in the media space? erica, great to see you. it was founded 15 years ago, but it is a in the -- said to your company, what do you mean? >> when i got to barstool two only ago, there were primarily boston employees and since then, we have built a juggernaut business. that is why i call it, in some respects, we are a 2-year-old business or 15-year-old brand. that makes the 2-year-old business very possible.

what makes barstool very different is we do not have legacy. we are building a company in the way a company should look in 2018 and 2019 with a brand that has been loved since the early 2000's. scarlet: that business creates 200 pieces of content daily which is incredible. talk about the blessed -- best platform you have discovered for discovery in retaining platform, and creating influence. erika: we are a platform built primarily on a blog. barstool sports.com -- .com is therts epicenter. we also have a massive podcasting business, incredible social reach with over 700 social accounts. we've a great snapchat show and we love instagram. three thingsnage simultaneously. we create content, create conversation with our audiences around the content, and we make commerce experience that make

the conversation more interesting and the brand more relevant. scarlet: which is the best for keeping your audience versus finding? erika: finding the audience is our own platform. we have our own audience and they are loyal to barstool and we are able to retain them based on average between 20 and 45 minutes a day with us. they are visiting many times a day. twitter is a great platform for discovery and we live on twitter. all of the conversation around anything that happens at barstool lives on twitter. we find that instagram and the snapchat are engagement platforms for video. scarlet: to what extent does barstool grow with its audience? going from college into their 30's and into middle-age, how specifically do accomplish that in content? erika: we are a brand that is very elastic and dynamic. we have an audience that is 14 years old all the way through 49

years old. we find there is a core audience that loves us via the blog and we also have a huge vibrant that is on instagram probably never seen 90% of what we have done on podcasting. we serve to make our audience laugh. we want to find people where they are living on the internet and be able to appeal to them there. we may find very young fans on snapchat, which is what is happening for us. we may have older fans loving us on audio, radio, or on our blog. we look to serve each audience in each place. loyalt: you have a very audience and talk about how sticky it is. what could change that relationship? does the political environments whether it is the me too environment, fake news, does that show up in content and add stress to the relationship? erika: one of the best things about barstool is it is an escape for fans. people are looking to get away

from their everyday life and want a laugh, want to hear something that is ridiculous. it's not a reality check. they're not looking for a serious opinion on what is happening in news or culture. they are for satire and humor. what i believe is that in an era where things are even more tense than usual and everything is very polar and black and white in terms of what is right and wrong, barstool is in a place that is an escape. scarlet: we were talking with larry haverty on what is going on in the media space. comcast is trying to buy sky, the government appealing the time warner merger, everyone is trying to fortify the likes -- fortify themselves against the likes of these big players. what is your take on netflix and the streaming services? are they friend or foe? erika: we are in a different spot because we are growing very rapidly. we are very opportunistic. seeing incredible

engagement from an audience loyal to our brand. in our case, netflix is very threatening if you have a traditional media company based on a very traditional business model. we don't have that. we have a very diverse business. business, advertising paper business, live events business, boxing business. netflix represents a potential for longform content, premium content, that we have not explored. we may or may not do so. erika, barstool sports ceo, thank you. erika: thank you for having me. julie: most retailers are struggling to fight against amazon. there is big box chain who may have found the keys to survival. we will tell you who it is next. this is bloomberg. ♪ xt. this is bloomberg. ♪

julie: "what'd you miss?" if we don't change, we are going to die. that is the message best buy managers say they got after the new ceo came to the company. best buy defied expectations and is thriving. susan details exactly how his team did it in this week's issue of businessweek. she is here with us now. it is a pretty fascinating story because he does not have a retail background before he came to best buy. he is a french guy and not a techhead from silicon valley. daysto us about the early and what you put in place to turn things around. susan: in a lot of ways, it was probably a big advantage for him to be not only outside the industry, but outside of the company. the first outside ceo ever. consultantwas a

early on in his career. he looked at best buy and said what are our advantages and problems. price,blems are amazon, and a complacent staff in the stores. if you're going to have stores, you have to have staff that makes people want to come in and shop there. he spent a week in one of the stores, early on and realized that he needed to increase spending on training again. he needed to make the stores a more welcoming place. once he started to do that, he realized that the online experience needed a lot of work. he fixed that. all of that took about five years. now, he is at the kind of turning point where he is saying what is the other advantage that we have? now we have this staff, we could train the more and we can send them into your home.

that is what we are doing. scarlet: and these are the in-home advisors? the interesting thing about this is that amazon is no longer an enemy. it is a partner of best buy as well. susan: yes. the other thing he did was when he took over, there was this phenomenon of show rooming. people come to the stores, have a look around and go back to amazon. they decided they would match amazon's prices. then, they were going to invite in amazon, samsung, apple was already there, and give them a place to showcase the technology. they wanted to turn the fact that they have stores in the u.s. to an advantage. amazon and best buy have had a kind of loose partnership over the years.

it solidified a month after he came in to speak with us. said you willand not get me to say anything bad about amazon, but ok, we will keep trying. five weeks later, he jeff bezos -- he and jeff bezos are announcing they are making to these together. it hasrt of the strategy people go out to your home and they will answer questions about tv's or whatever you want. is notsts money, it intuitive how that scales. how is that doing? susan: it is early. they tested it in 2016 last fall. they rolled it out nationally but there is only about 380 advisors. it is very small now. him coming from mckinsey and talks about the best buy in these in-home advisors being consultants and that they do not want these consultants to

measure sales by the week or by the month. they want these people to be developing relationships with their clients. they are no longer customers of their clients. it will be like a lifelong relationship. he wouldn't be very specific about the goals they have a for it. in mckinsey, we did not have gold, we just wanted to do work. julie: i like your anecdotes. you went with one of these people and went on a visit with them. what was it like? susan: i considered it a reality check. like when you go to any headquarters, there is very grand plans for what they are going to do, and how everyone is going to want a smart connected home. they will be the ones to show you how to do it. wereeople i visited retired, they lived near this big retirement community.

we take that for what it is. they weren't interested in the whole customer experience. julie: they just wanted their tv to work [laughter] susan: [laughter] joe: coming up, what you need to know for tomorrow's trading day. "what'd you miss?" -- trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" u.s. stocks declined and microsoft rose after he reported results. second-quarter numbers before the bell tomorrow are coming up. joe: and honeywell reporting a second current -- second quarter earnings. at 1 p.m. new york tomorrow, bloomberg real yield will be broadcasting from jpmorgan asset management. justin pharrell will talk the fed, emerging markets, and everything fixed income as he goes on the road. a short road trip. scarlet: that does it for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪

emily: this is bloomberg technology. in the next hour, president a $5 is firing back after billion fine was slapped on google. how this could escalate trade with china and it u.s.. -- u.s. and eu. zuckerberg backtracks.