trade measures. the present toward a manufacturing plant in iowa and then took part in a roundtable discussion. president trump: we just opened up europe for you farmers. he will not be too angry with trump, can tell you this. wouldn't you say, they were restricted. you have barriers that really made it implausible for farm products to go in. >> the president of his remarks, day after his white house meeting with the european union president. the u.s. and the eu agreed to open talks to tear down trade barriers and mr. trump said the eu agreed to buy more soybean from american farmers. say therein greece are both serious indications that a wildfire near athens that wased more than 80 people started deliberately. authorities say analysis of bladeste images suggest broke at -- broke out in timeple places in a short

frame on monday. a spokesman for the u.s. embassy in beijing and local police who say a man exploded a small homemade bomb outside the embassy, entering only himself, there was no word on the motive here the investigation is said to be continuing. ms. also reported that -- a report by the ruling -- of this party global times newspaper said officers had earlier removed a woman from outside the embassy who had sprayed gas on herself in what was called a suspected attempt at self immolation. a judge in florida has ruled that much of the nearly 12 hour-long statement given to police by a florida school shooting suspect should be publicly released. attorneys for 19-year-old nicholas cruise saying disposing it could jeopardize his right to a fair trial, and he is accused of killing 17 people and wounding 17 others and marjorie

douglas high school. 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. ♪ >> live from bloomberg world headquarters in new york, i am julie hyman. scarlet: i am scarlet fu. joe: i'm joe weisenthal. julie: stocks are struggling to overhaul is the's historic plunge. joe: the question is what did you miss question mark >> waiting on amazon after facebook's big fall, will they breathe some life back into those stocks? more earnings on deck. starbucks and aaa are non-tech companies we will watch closely. a day after he backed off threats of auto tariffs,

president trump is making a trip through the midwest to promote his policies. scarlet: what did you miss? earnings on tap. we are waiting on a lot of numbers after the bell including starbucks, chipotle, and of course amazon or not looking so good into the earnings. here with more is kevin kelly. it seems like facebook really shook people today in terms of confidence. what does the setup look like? >> facebook obviously being one of the worst performers in the s&p 500 today, really dragging down the tech sector, on pace for one of its worst days developing the market since the beginning of the year. that tradesy been have carried much of the s&p in the last three months or so. you're deftly going to see some strength out of the tech sector. i think might be

potentially overblown is what is moving forward for the tech sector, as we get deeper into the quarter. >> this is not a big selloff by any stretch in the broader market. nasdaq is down 1% but this is nothing for the s&p 500, for such a big company. as a day like today alleviate concerns when people say, the is really being hoisted up by a few companies out of the falls, the whole thing falls apart. >> there are definitely more companies participating in this. we are tracking the different numbers of companies trading above the 200 moving average. those are looking strong from a technical backdrop. the tech sector is down 1.5% today. strength on the opposite side kind of balancing that outcome of the semiconductor stocks, and we have seen them lagged the last couple of months so it is good to see some out of them today. >> especially facebook and

efflux, they really didn't have any room to give up anything, they had to hit on a recent member for them to continue rising. on what you have looked at, is it true? >> yes. you have seen the market put more emphasis on topline revenue growth. a pretty good example. , the growth ofe that topline hitting on the size of those numbers versus the bottom line. look at how the one-day price reactions have in, they are really missed on the top line. the markets continue to pummel them and that is a trend we have seen in the last few quarters. weird,at is kind of obviously today aside, the markets have done really well, s&p 500 going closer to all-time highs. from what i understand, the aggregate, it seems like there has been a lot of blowups. it seems like the ones we're paying attention to our kind of ugly. >> you get a little more

dispersion within the market. a little more idiosyncratic so to speak. in the broader sector, or the broader index, can continue to move higher. the s&p overall continues to earnings in afrom sales perspective. toplinetress the expectations enough. especially as you start to see tax benefits rolloff or make the terrible numbers tougher for index. you want to see analysts a little more -- >> let's talk about that last one p or i will call an audible. a chart shows that pretty starkly. topline growth is in white. the bottom line is in blue. you can see clearly what will happen or what is expected to happen in 2019. we have seen some companies get

punished for the forecasts going forward, but there has not been a bigger narrative like we have with caterpillar. i keep talking about caterpillar and its report. that has not materialized this time around. the analystven in numbers, something we track pretty closely, they continue to remain constructive on the market especially in the u.s. there is that earnings. the topline, you see analysts come out, that could triple down -- trickle down and health alleviate that. queer in als a market in which it is easy to get distracted and loose sight of the big nature. tweets orus on trump rose garden announcements about deals that may or may not happen, we can look at idiosyncratic low ups, whether it is a whirlpool or a facebook. what you are saying is things are good, the outlooks are good, the stock market reflects it,

and there is a lot of noise to distract us. >> exactly. we will is have risks and always facing risks and as we get late in the cycle, inflation is something we continue to watch with expectations for inflation rolling over a little bit, we have seen commodity weakness and things like that recently. there are things we are watching for but yes, to your point, things are pretty robust and good. scarlet: any other sectors similarly priced where a miss on the topline could send the stock reeling? >> a lot of the growth names are the ones you will find are the same type of classification. we are definitely watching those sectors. we look across the market and looking at the company reactions and market reactions on a top line, that is broad-based in terms of disappointment. the sectors we're watching for, late in the cycle, we are seeing

it in the numbers and cyclical sectors, energy materials and more commodity independent names are driving some of that growth. some of the earnings we just talked about, we are looking for those to lead the market in terms of sales expectations. known as really safe so to speak if you are missing on the sales growth wines because that will eventually trickle down to the bottom line. >> let's get back to the earnings we are looking for after the bell. anything you are excited about? there is a lot of excitement about amazon p or it will you watch for? >> got for bid you get something similar to facebook with whatever reason, sales or revenues do not come in as expected. i is beating a dead horse but think that is the thing to watch for in the season. becomehave almost accustomed to higher expectations and blame a lot of overhauls, iftax

you see the stronger topline numbers coming in especially from this discretionary sector, the tech stock, it is in this sector. could certainly have implications for the sector moving forward. in amazonlied move right now, about 5%. not small. not 19%. but with amazon, a lot of expectations are built and because prime day typically means a better outlook for the third quarter as a. >> all right. kevin, thank you. coming up, downplaying the hope for the trade deal with china while president trump called a cease-fire with the eu we will speak with kevin cirilli next. this is bloomberg. ♪

>> president trump visiting iowa, missouri, and illinois talking jobs and trade. let's get more from our chief washington correspondent. on the heels of his announcement on the european union, this is kind of a victory lap especially as the president makes clear to farmers that more of their soybeans will be purchased by european. again, farming great those are the green hats the president is passing out at campaign style rallies the president is holding ahead of these elections. you are right the president is trying to frame this as a victory lap of sorts following yesterday's meeting in which they say they have opened up the market to soybeans, sending a signal to the

business community and the agricultural sector, which has been a bit cautious and inpatient as the president has isd, with regard to how this . regarding lng exports, the president has not said this publicly but he is tying this directly to russia. the case they're making to republicans on capitol hill as they head out up to recess is essentially trying to get the u.s. more in line with the energy sector of europe, making that a direct competitor for russia. >> doing anything more about what they actually greet to with the deal? was aybeans thing, there good story on the bloomberg about how we will probably have to buy more soybeans anyway because china will be buying brazilian soybeans of self-worth that europe might have otherwise bought, but in terms of the substantive agreement with europe, we have any more than we

got yesterday? >> no. they have been talking to lawmakers on capitol hill and i can tell you, what they want is to send a signal of a rhetorical reset. whether or not that is enough for lawmakers in the business community, that is a bit too early to tell but in terms of deregulation policy and opening up soybeans, and lng exports to the europeans, that is something they feel is trending more in the right direction as opposed we saw the week before, the escalating tension when the president took the trip to europe. >> where are we on china? even if europe buys more soybeans, it will not make we sw up for china. do we have any progress in that direction? >> conservatives will say they are hoping by the u.s. signaling

they're more in line with the europeans, that that that will bring china back to the negotiating table. do not know in terms of where that stands and intellectual property, the list goes on and on. the president has threatened to add billions of dollars of tariffs to the chinese should they not get in line. the next step with china, look for august to be a potential massive timeframe in terms of one another round of tariffs could go into effect. forscarlet: let's get away litte bit from trading here. i would like to get an update from you on what the latest with the bob mueller probe with the russian meddling in the u.s. elections, in particular because there is discussion certainly between the president's cap under what circumstances they might agree to an interview by the special counsel. is a lot of conflicting reporting about whether or not president trump will make the decision to sit down and testify with bob mueller's investigative team.

there have been conflicting reports from legal of pfizer's mayor june -- rudy giuliani. that is point number one. . saga with paulal manafort, the legal campaign cochairman, that judge ruled they are not going to be able to have any mention of russian collusion in that investigation. i do not see how they do that given the current political climate. the last point i would make is this ongoing political the velvet of the michael cohen case and everything that has been leaking out of that. outsidesomething that the beltway has dominated little discourse as well. i would note in addition that as i have been reporting for quite some time, the vacuum in the looming speaker of the house house, speaker of the paul ryan is retiring in november, it comes at a time where you have the congressman versus the likes of

other more conservative republicans, mostly leader mccarthy who could be tug-of-war with the white house. >> a good point and something else we need to watch for out of washington this summer. kevin, thank you so much. it is time for the business flash, a look at some of the biggest business stories in the news now. the hospital treated sergio -- says he was seriously ill for more than a year before he died yesterday. was not revealed to shareholders of the companies he ran. yet chrysler did not note anything about the illness. public on is doing the pizza chain he founded. manning documents related to his ouster as chairman for using a racial slur. independent directors ended an agreement that made him the voice and face of papa john's and he was evicted from the headquarters of the company.

the largest independent steel pipe and tube manufacturer in north america is filed confidentially for an ipo. the company has hired advisers for an offering as soon as this year. amy for evaluation of about $5 billion. its first report since becoming a corporation. 46%.ngs last quarter rose shares have risen 29% since the firm announced plans to convert a partnership and it allowed them to take advantage of new tax breaks. bloomberg's news flash. >> let's get to the stock of the hour. shares soaring and it is now at the highest level in 11 years after very strong second-quarter profit report. it is a bunch of semiconductor companies.

>> for social media, we have the aocks really soaring, up for second day. they put out a blowout quarter. earnings, 10%, projections for third quarter a little short but it is from across all segments and their firing on all cylinders. well.s, the cloud doing >> of was going to say that gaming seems to be the hot thing. >> yes. it is pc and gaming. it is off of q1 a little bit but still, let's look in perspective. a two dollar stock and now it is an $18 stock. for computingh and graphics and now it is up, up, and away. year-over-year growth is extraordinary. >> it is an interesting comparison with intel. the great story on the bloomer today is talking about the ceo.

reporting its earnings after the bell after its ceo was ousted for in improper relationship. it has a female ceo, which i did not realize, and that she -- she has really built it into a more formidable competitor. >> it is so interesting you are saying this. i was talking to an analyst and asking him, what role to the relatively new ceo, he said it is everything and bringing in -- 95% of all the different markets. lisa is so good that she is being whispered as a possible iplacement as the new ceo and was told that would actually decimate and be a trojan horse. that is something to keep in mind. >> another way to look at it as well is to analysts downgraded intel because they thought under

lisa, it became it bigger competitor -- competitive threat to the company because she did such a good job putting it in the right direction. >> it will be interesting to watch it play out. i have been watching this stock for the last two years. technicals here are really pretty remarkable. in 2015, it was around two dollars. we see this long-term chart around three dollars, closer to 50. two dollars and $20, a wide range. near the top, the earnings consolidation could be called a bullish pattern of congestion, 30 or taking the stock up $40. good things may be ahead. >> shares are up 17% and intel only up 10%. >> incredible. >> thank you. still ahead, show me the

earnings. amazon gets ready to report second-quarter results and we bring the numbers after the market close. this is bloomberg. ♪

scarlet: we are expecting amazon second results do right after the close. take a look at what analysts are expecting. certainly after netflix and facebook, there is a lot of may be a good zaidi about what these names have done so well so far this year. tore looking at numbers, $.49. revenue will be $53.4 billion if you rounded up. i did notice that over the past five months, analysts have brought down investments by about $40 million. there has been a moderation of expectations and you want to pay attention to outlook. thee day will help boost third-quarter guidance.

we saw the guidance getting a bigger boost than expected because of prime day sales. people have been cutting their outlook, they are extraordinarily bullish on amazon. if you look at the forecast on the company, it is extraordinary here what we have seen in terms of bullishness, just as we have seen for many stocks. various divisions of the business and what we have seen recently. absolute basis and not year on year change p ron online business is in white and then you have physical stores in orange and that is a new division because of whole foods. in blue.ty sellers and then prime level, subscription service, the pale yellow figure. aws is growing. >> driving of profits. we are expecting also results from starbucks.

revenue, 6.4 -- 6.25 revenue. the market close is next. you are looking at the dow higher by about 100 points. this is bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving...

simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. [applause] julie: "what'd you miss?"

it's theook meltdown nasdaq while the dow gains. i'm julie hyman. scarlet: i'm scarlet fu. joe: and i'm joe weisenthal. if your live on twitter, welcome to the closing bell coverage every weekday from 4 p.m. to 5 p.m. eastern. scarlet: we begin with market minutes. check. the dow finishes up by 100 points or so. s&p 500 is feeling some of the weight of the big tech names including facebook getting pulled down about nine points. a mixed day in equities and we look at a stronger dollar versus 111.23.at oil gains half of 1% coming back to $59 per barrel. julie: it wasn't just facebook moving as a big mover, although facebook had a record drop during the session. done 19% as 20% over the course

of the day. that is after the company user growth missed estimates. nielsen shares doing the worst. they cut their profit forecast and said the ceo will retire. scarlet: amazon just reported second-quarter eps $5.07. wasconsensus estimate $2.49. i'm not sure if we are comparing here. we should be looking at the gap line. topline is $52.9 billion. that is below estimates. the consensus among estimates billion dollars. julie: in the forecast is below estimates as well. third quarter is seeing as much as 57 in the half billion dollars -- $57.5 billion. as we just heard from bloomberg

intelligence, the topline is what people are looking for broadly. that's especially for amazon. they have had the profit lever. it's margins are variable depending on how much they put back into the business. joe: the traders are try to analyze this company having -5% up 5%. we're still digesting the numbers. scarlet: the third-quarter outlook includes prime day which was a record prime day for the company this year. they manufactured this sales holiday and whose typically goes shopping in the summer? amazon made it happen. julie: ifs sales still missed estimates and primed it was a record, what does that say about nonprime days. scarlet: the stock is up over the past seven months. given the move now, it will open at a record high as well. as we go through the numbers here. i want to bring in paul of

bloomberg intelligence and the founder of an open financial essence platform compiled for numbers. the forecastioned, is below analyst estimates. if prime day is supposed to be the driver here for the forecast to beat the consensus estimate and it is not doing that, what is that tell us? >> maybe the underlying business might be a little softer than the street was expecting. i do not think there is concern here. people are comfortable with a long-term story as a relates to the core e-commerce business and relates to amazon web services as well as the advertising business which is growing pretty quickly. while there is movement quarter to quarter, i think they will be comfortable with the story for amazon. then, it is just a question how they want to dial up and dial down expenses like eba -- for their epa numbers. julie: i want to mention intel

because we got those numbers as well. their second-quarter revenue is ahead of estimates. $17 billion and it is raising its forecast for the year. i just i -- adjusted earnings for share is estimated at $.96. there we have a beat. i will go into the statement and a bit and see if there is any headline on the new chief over at intel. scarlet: let's bring in lee droge and to get context on some of these big tech names. did you see a lot of movement on estimates in the last couple of days after netflix, after facebook? lee: no, we have seen movement for other names, but for amazon, we see this massive upward trend in consensus numbers. i want to point out one thing because i think there is this interesting debate what to moves amazon.

when you run the regression, the highest correlated variable in the earnings report is a 90 day price performance post earnings price.the it is not revenue, it is the most basic thing. everyone says it is cso i, revenue, and no, eps beat it. a lot of people say what happens if they put up eps, will then they -- will they then value it higher? joe: they already do. leigh: and it doesn't matter. billion sales 6.1 one billionsales -- 6.11 dollars and the net sales are up, we have this earnings gusher and could explain why this is a key variable and we see the stock up. leigh: that comes directly from the business because that is the highest margin they have. scarlet: let me jump in because starbucks has just reported. their estimate beats the

consensus estimates by a penny. the bottom line number is beating estimates. the comparable sales number also beating consensus. 6.31evenue overall is billion dollars. starbucks shares were down 1.9% in after-hours trading. not true's -- not huge but we'll keep an eye. paul, it is interesting to what leigh was just saying. i have this up on my bloomberg which is the function for amazon. it looks at adjusted eps and percent of surprise. right now, we look at a 56% say ase, or i should degree of surprise for what in list were looking for. we are looking at a potential huge move in the stock tomorrow if indeed this is what investors focus on. leigh: we've seen a lot of voluntary tea -- volatility around amazon.

give you such a wide range and guidance in terms of guiding incumbent and revenue and eps that you could drive a truck through these. it's more on how much they want to dial up their expenses versus dialing onto that. every year we will see a big divergence from the trend and this quarter it looks like they dialed them back. the longer-term trend for most people is that we are comfortable with a higher level of spending as long as it continues to support the higher level of revenue growth. specifically in the cloud services and in some of their other international businesses as well. this is a company that has earned the benefit of the doubt to spend where they believe they can get the longest return. and they are spending on alexa. jeff bezos was talking about that. they want customers to be able to use alexa wherever they are. there are tens of thousands developers building new devices, using the alexa voice service.

the number of alexa enabled devices has more than tripled in the past year. i know they are betting on a lot of different things. is alexa one of the best places? is that the right move to put a lot of eggs in that basket? paul: i think he can be one. we're seeing the convergence from text to voice and we're saying apple and google invest in home. i think amazon is clearly one of the leaders there with alexa. they have a very strong conviction that it drives traffic to amazon.com. joe: leigh, thoughts on hardware? leigh: the hardware is interesting. what i'm really interested in is the software. they have an amazing amount of data at this point. right now, with the artificial intelligence programs that they are building and advertising business they are building, this is a giants sweeper that people are not paying attention to. the amount of data they are collecting with you talking in

their home whether they should be or not is the reality of it. the more they have, to companies, facebook and google control 95% of the advertising market at this point. amazon has a lot of room to grow. they don't have the privacy issues that the government can control. julie: i want to ask you about the privacy issue. we hear about mark zuckerberg and facebook more than any of the other companies. with regards to potential regulations. what about amazon? it's not part of the discussion unless you talk about a presidential tweet which is a different issue. it here's what you say in your house and knows what you buy. now, it knows what you buy in a physical grocery store as well. that's if you have a link to count. in many ways, a lot of things is about perception rather than reality. the perception is that facebook is taking date that you are getting -- giving it, you're

putting it online and there is a concept of people who are not comfortable with that. terms, you are interacting with it in a sense. it is an oculus. people don't even realize they are giving it to them. it does not show up somewhere on one page for everyone to see. it is in the background. scarlet: it is more transactional. only amazon iis can see this. it's not other advertisers, or your friends. scarlet: this amazon sell the data? paul: it could sell the data. i do not think they doing it -- they are doing it in a big way. they have tremendous amounts of data at the point of purchase and trends across the buying. scarlet: we also had to pull a coming out with results. the american -- the mexican grill are looking at earnings per share to dollars and $.89.

-- $2.89. analysts were looking for a gain of 2.7% and they saw 3% gain. the eps number is another number. julie: looking at the non-adjusted eps number. the adjusted eps number is a beat which is why the shares are up. scarlet: and the shares have been up a lot. since the are up 81% head of taco bell took over in february. they gained 7% in the first quarter results read -- results. leigh: it's right in line with the numbers. the interesting thing i will look for in this report is the online ordering. look at what happened to domino's pizza. it does not seem like to pull it will get the in store, same-store sales number moving that's well again. the expectation was 9% growth. i don't know if they will get too much above that, but they could make huge moves into the online side.

scarlet: how much does it cost to build up your online system? paul: a tremendous amount of money. we've seen it over the last 10 years, the ability for this company to invest massive amounts of money into their business. azo's, hey, for jeff has earned the right from his show world are base -- from a shareholder base for these investments to drive longer-term growth. you see topline numbers delivering every quarter. shareholders are comfortable with the long-term investments he there is payoff down the line. ,oe: speaking of deliveries grubhub is another company that is absolutely killing it. is this an area in your view the ideaarly days as of that we will be watching netflix at home and ordering in all of our dinner? paul: we are still in the consolidation phase for a lot of players out there. uber is still doing uber eats

and it has done pretty well. leigh: how much more consolidation from here? not sure. of this market is large. your future growth in many urban environments and the message united states -- in the domestic united states. investors are looking at the penn and trying to figure out what the penetration is. they will put high multiples on this country when it feels low. julie: and amazon, paul, has been getting into this business. but it has not made a dent. it's interesting because amazon is seen as the little guy killer. paul: i think the last mile is something they are thinking about. one of the reasons you see centers going up in every market around the country is to get customer for the one-hour delivery. the last mile is where scale happens. they realize they don't need the last mile scale. there are markets where they can

own it and other markets where they can distribute it down to using the postal service or private carriers. we've seen amazon with container ships, airplanes for transport, and there is no part of the distribution supply chain that they don't have a hand in. scarlet: so they want to own it like cities for example? basically where they need to get a return. i don't think they need to be everywhere. leigh: the derivative plan is donerban area which have -- has done incredibly well. i think you will see more of this indoor vertical farming and outskirts of the metro area. that's will done drive urban at valuations higher. and paul.gh thank you. paul is speaking with us. president trump is speaking now. davis and john, think you very much. [applause]

-- thank you very much. [applause] those three people fight for you all of the time. much thathey fight so i sometimes say i don't want to take their call today. all ofey are with you the way. very special, hard-working congressman. -- congressmen. theso want to thank president and ceo of the united states steel corporation, david, thank you. [applause] gave me a couple of words when i walked in. what, david, iw love you and doug matthews and some of the folks you want to bring if you want to bring anybody,,. i want to shake your hand. -- bringl is back

anybody, come up here, i want to shake your hand. steel's back. i would love you to say a few words and explain what has happened with steel over the united states. thanks, david. [applause] >> thank you so much, mr. president. and a special thanks to secretary ross for the heavy lifting you have done and, congressman, thank you very much. toie: we were listening president trump speaking about trade. you can watch on live go and we continue to track all of these many earnings that are out including amazon. we will be back with leigh droga n and the paul sweeney. brad stone is also joining us from seattle as the head of global technology.

joe: brad, what is your take on the earnings. -- earnings? brad: earnings is a 40% growth rate year-over-year. it is a sounding when you talk about a business with a more than $20 billion run rate. it is strong north american profit and a pretty impressive growth in the advertising business. maybe even signs of a whole foods prime rescue because, sequentially, the physical store business is up now. maybe a little bit of a topline myth, but a strong and growing business at scale. joe:leigh, you mentioned an ad business earlier. blogn is up on the according to olivia zaleski. how big do you think this could be and more importantly, are we lazy when we talk about the idea that these

companies like google and facebook have a stranglehold on the internet that other companies cannot break into? leigh: i don't know if we are lazy, but because if you have a main street business -- because if you have a main street business, why would you want to go through hoops? joe: when we talk about these companies have a stranglehold, here is another company that is showing traction this year. leigh: if you put a third big one in play here and it is a very direct retail sales play, absolutely. if your consumer goods advertiser, i'm going to be advertising through there. we estimated at sales on amazon.com would approach $8 billion this year, up from $3 billion last year and for continued growth over the next several years. there isissue is

tremendous support for amazon in advertising platforms -- as an advertising platform. it is effectively a duopoly and been thehas not solution, and others haven't either. you hope amazon can establish themselves of a -- as a third party platform. scarlet: wells can advertise -- where else can amazon get advertising information? paul: more than half of the searches for products that are sopping -- shopping are not on google, they are on advertising. are going on amazon.com searching for products, you have a high intent to buy and an advertiser can pop up there. that is a business that has always been an opportunity for amazon that they have never focused it on -- focused on it until a few years ago. julie: brad, why have they not

focus more aggressively on it and why is it only three or four years ago? it seems a missed opportunity. one reason is customer obsession and bezos is line that there are two companies that increase prices and decree prices -- decreased prices. people come to amazon to search for the best product, and they have not been certain they want to serve up a product that is paying for placement. advertising companies tend to increase prices. they have moved a slowly, and cautiously because they are worried about diluting what they have spent 20 years creating. joe: amazon did enter the market and crush the incumbents, that is what everybody is talking about, maybe it's might be overhyped. right nowey areas where people are looking at?

isthere an area to you that the most exciting or most promising when you look at the next big business for amazon? brad: for me, it is the last mile. we seen this kind of slow-moving arc over 20 years of amazon getting closer to their al areas. in rur that bringr cities the amazon distribution capacity in your neighborhood. it makes sense they are doing it's now doing things like amazon flex to own their own trucks and it's very amazon like to turn that around and offer it --service to other companies offer it as a service to other companies. bit of ave a little different view on what they will focus on here. i think the advertising business said something. the strategy,

they have created this massive platform where everybody is there with high intent. why would you take that and focus the future of the business on the last mile which is a low margin business when you can focus it on other things that take advantage of the mode that your party built with the community already on the platform which are high-margin businesses. one of the things the market is telling you with the reaction to the eps surprise a recorder is that they believe amazon will be able to build high-margin businesses in the future. when they see the eps beats, they say their growth margins will be much higher than amazon's growth margins have been historically, which have been incredibly low. i think that is a sign that they beat -- they might be moving more in that direction. i think they will really push on the stuff that is high-margin that they have not done in the past. scarlet: brad, what do you think? brad: amazon has 22 year history of diving into complex, low margin, very defensible businesses believing technology

is the advantage and they can do it better than anyone. they are pursuing both opportunities. we don't have to pick one. i think they have things to figure out on advertising customert is not except like they called on other businesses. the logistic staff is in their sweet spot. they will do them both. joe: i want to show a chart i am looking at on the blog showing amazon web services revenue gloats -- growth. it seems to be gathering steam. if you go back to last summer, the revenue growth was around 40%. now it is edging closer to 50%. what you make of this, paul? paul: a couple points to make about the cloud business. it is the sexiest story in the business in general. if you want to get your stock multiples up, talk about the cloud. the companies dominating the cloud business is amazon, out of

is there, microsoft is there, there are big players and -- how habet isis there -- alp there, microsoft is there, and there are big players. leigh: i think you will get the read through on aws. when you look at what mark said about four quarters ago that he never saw a cap cycle like this. we have seen it in the numbers -- in the numbers -- in the numbers. those numbers are not normalize because as we crest in the capx cycle, those will come down. scarlet: the stock has been backsliding in after-hours -- cilating in after-hours.

gentlemen, thank you for joining us. headlined as president speaks in illinois. he thinks the gdp numbers due out tomorrow at 8:30, will be " terrific." gdp, the first take of the second-quarter numbers will be due tomorrow. the consensus estimate is for a 4.2 and percent -- 4.2% increase. this is bloomberg. ♪ ♪

julie: we are watching earnings and expedia is out. they report earnings per share a love -- well above analyst estimates. second-quarter revenue is in line with estimates, and e bida is up as well.

this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. streaming must see tv has never been easier. paying for things is a breeze. and getting into new places is even simpler. with xfinity mobile, saving money is effortless too. it's the only network that combines america's largest, most reliable 4g lte with the most wi-fi hotspots. and it can be included with your internet.

which could save you hundreds of dollars a year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. brad: i'm mark crumpton echelon -- mark: robert mueller is scrutinizing tweet and negative statement from president trump about attorney general of sessions and james comey. -- general jeff sessions and james comey. they say there tamping down the inquiry. this news calls -- comes from word after 11 conservative --lic house members

representative robert lighthizer says it is possible the united states, mexico, and canada will reach a tentative agreements to revamp the 24-year-old nafta deal. the ambassador testified before the senate appropriations committee. will, before very long, will have a conclusion with respect to mexico, and as a willt of that, can and come into compromise. i do not believe they have compromised the same way the united states has or mexico has. mark: this week, mexico's released alect one-page letter from president trump in which mr. trump called for a speedy renegotiation of nafta. the president warned there could be a much different route should those discussions drag on. in the past he has threatened to cancel nafta. michel barnier has rejected the central part of the uk's

proposal for a trade deal. the prime minister, theresa may, proposed a model under which the u.k. would collect the eu's tariffs on goods entering the fortry as part of her plan the country. barnier said it is unacceptable. >> you will not delegate the application of custom policies and rules and duty corrections. -- corrections to a nonmember who would not be subject to the eu's government structures. mark: his rejection of the proposal is a blow to the hopes of reaching an agreement by october. brexit talks are expected to resume next month. officials in greece say there that arious indications"

wildfire near athens that has killed more than 80 people was started deliberately. authorities say analysis of satellite images and inspections on the ground suggest the blaze broke out in multiple places within a short time frame on monday. 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. scarlet: let's get a recap of today's market action. withw slip in the indexes the dow up better than 100 point in the s&p and nasdaq lower. is aess and facebook historic one-day move for facebook which plunged after its user growth numbers disappointed. it in fact showed a slowdown in europe. in terms of after-hours numbers, we start with electronic arts because of the size of the movement in after-hours trading. before.own more

the video game software maker announcing results that beat analyst estimates for the fiscal first quarter, but the full-year outlook missed the consensus by little bit. $4.85 versus five dollars. for $5.6were looking billion over estimates. amazon has been bouncing around. julie: even as the folks manning the top blog has -- have been finding more information. we will see if it can hold on to it. out withny is coming numbers to beat estimates. we look at a comparable number for earnings per share of five dollars and seven cents. -- $5.07. that appears to be double what analysts were predicting. scarlet: and you have to look further to see if that is the right number. julie: exactly. , $52.9 billion, but the

operating margins are better than estimated and our contender of bloomberg intelligence said the guidance of applying the market in the third quarter, which would be the highest in the quarter in seven years. joe: an interesting nugget for the media call going on. more members joined this prime day than any day prior in the history. the site went down for a while. they cited a larger than expected influx of customers. good job on that. julie: subscription services revenue is also up 57%. that implies the addition of new prime members. "what'd you miss?" it is not just amazon, into also reported results. they are falling in the after-hours sessions. our aim list covers the chipmakers and is joining us now and leigh drogen.

your impressions thus far of the intel numbers? >> we've been saying the data center market is not a zero-sum intel and we think amd can do bell and benefit from a growing market. particularly in the data center. that's group did well. both from a revenue perspective -- that's group did well. all from a revenue and operating perspective. they raised the for your forecast as well. across the board, this is a good quarter. yet the preface that from and expectations of standpoint. blew the cover off of the ball. on an elective basis, expectations are mismatched. remember that intel has 98.5% share for example in the data center market. amd has 1.5. amd has more room to grow. joe: amd has a market cap of 18

tel has ahere in completely different scale. scarlet: i hear what you say about how amd set high expectations, but if you look at shares today, they were down .5%. i think there is this notion still that every sharepoint of loss for intel is amd's gain or vice a versa. you have to remember the cloud market is expanding dramatically . corporate i.t. spending i heard is peaking earlier. the market is expanding in total. intel is going to grow with that market, how at lower than the market may be. ad will gain disproportionate amount granted -- given that they were absent for a long time. we a bloomberg intelligence think we like all three companies, the love trying though between amd, nvidia, and

intel. we like all three for different reasons. this as usok at trading above the rising to day moving average. tech earnings have been great, the market is healthy, and you will want and the over intel and a market where it is relatively risky. scarlet: in terms of the stocks, abigail was talking about how the semiconductor index has been very volatile this year. how have the estimates looked for all of the chipmakers? have they been moving as well? leigh: we are actually not in one secular cycle here. point int at the same each cyclical cycle for each name. they are offset at this point. that is really interesting. you look at stuff like amarilla berella. they have interesting chips

going and where we start to see estimates for our quarter start to rise and usually want to be investing in those names to quarters before the cycle. for some of the other names for the service base, we have want to -- we have seen no run for those. i want to bring up the ceo issue with intel. we're talking about brian as ceoh stepping down because of a relationship with a colleague. who could come in? there has been talk about potentially a female ceo and we candidates with enormous success. anand: intel is a different area. lisa su has done a fantastic job at amd. renee and diane have significant experience in intel and

experience running large chipmaker operations. it is a different ballgame than running amd. number 2, 1 a missing from the -- one namey smith missing from the list is stacy smith. she has had tremendous experience in both renee, diane, and all stacy left following brian krzanich's a sentence to ceo.- ascension to as fantastic as lisa is, i would put her in a different bucket. anand, thank you so much. leigh drogen of estimize will be sticking with us. bob swan is the cfo and ceo and ears two hats. that interview will be tomorrow.

potentialcs became a economic detonator. we discussed this idea next. joe: and, get involved in the conversation. is on twitter, my handle here. what you want to know? what you want to know from our guests's? i try to make jokes, post charts, so you can check out my feed here. shoot me a message. this is bloomberg. ♪

scarlet: "what'd you miss?" president trump's trade battle with china is showing no signs of letting up even after he called a cease-fire with the eu. we take a look at the president speaking outside of st. louis now.

he is saying it is time to straighten out the worst trade deals ever made. our nextntext of that, guest says president trump the contradictions of geopolitical globalization and can no longer be ignored. pali. joined by thomas he is the author of financial crisis. joe: thank you for joining us. in a recent essay, you characterize the electionhe is f president trump as being an earthquake where it is an abnormal event but reveals something fundamental about what is going on. view, wise president trump such an important character in global economic history -- why is president trump such an important air during global economic history? thomas: he tapped into the discontent about neoliberalism. that's the most visible piece to it.

that is what people understand to neoliberalism. he has recognized that discontent and is trying to take advantage of it. that's as part of his strategy, he is then gotten engaged with china and engage critically with the eu. he is showing there are contradictions in globalization. joe: one of the contradictions that you pointed out in your paper is that lots of people say they want globalization, free trade, but they also want the u.s. to be a dominant superpower in the world. thecontradiction is that current setup of global free trade is elevating china as a superpower, putting these two things in conflict with each other. thomas: that is right. there are two types of contradictions. at home in the economy, a lot of people are not doing well. they are unhappy with years of , job, job loss,

communities decimated across the u.s.. that has alienated the political basis of both parties. it is not just democrats, republicans know like -- no longer like globalization either. elites, -- you have washington elites, both sides. on the other side is the geopolitical conflict. countries are in competition with each other including the u.s.. the u.s. wants to stay top dog. it now sees china is a rising power helped by globalization and the current model does not work for the u.s. geopolitical interest. isthe same time, the u.s. also showing president trump dictating that russia will put sanctions and it does not work for everyone. their eyes are open and that is

what cannot be put back in the bottle. it is not china, it is europe where the biggest changes the trump made have happened. scarlet: i hear what you are saying, but the president seized upon the trade deficit or trade balance as a way of keeping score. a lot of economists we talked to say that is not the right way to look at it because it is linked to the budget of is it for example or has to do with our savings storage. push back the argument because you see the president point of focusing on the trade deficit -- president's point of focusing on the trade deficit is a cause. thomas: there are many things getting baked into the trade deficit. it is affected by the budget deficit. and so on. the trade deficit is the channel by which so many things of affects -- so many effects of globalization come through. substituting diapered foreign --

economists are near people and they basically have got it right. the 1990's, you may recall the twin deficit hypothesis. the budget deficit caused the trade deficit. we had budget surpluses in the 1990's and up went the trade deficit. another time in the 2000s, economists sneered at ornery people -- ordinary people. we had a major recession, short demand, and the trade deficit went up. in the economists and don't have the details right, the trade deficit is a good thing to focus on. behind it is the problem of globalization. scarlet: thomas, you say the president's biggest impact may be on the eu and especially germany. why is that? how has china figured out this and is ahead of the game here? thomas: china has a long-run strategy.

to understand the competition or conflict between china and the u.s., you have to realize the that never again will there be any country like the former soviet union that can challenge the power of the u.s. that is the cheney doctrine. china says look, we don't we d -- we don't want to be the global superpower, but we want to be the regional one. that means no one can challenge us in our region, east asia. that puts them in a head-on conflict with the u.s. because it believes it can challenge anyone anyway. that is the contradiction there. the chinese have figured this out. the middle kingdom has been around for 3000 years. they play along game. europe has not figured this out. europe is all over the place. the british have some backward looking imperialism's. they have special relationships

-- they think they have a special relationship with the united states. the french no longer think they can go it alone. germany is not willing to step up to the plate and recognize .ts power so europe has been playing along. that is where trump is so important. now, europe cannot be blind to them anymore. trump put them in front of mrs. merkel. thomas pallay in washington, thank you much. next, we focus on starbucks and aaa's latest results. a lot of results coming out in the last 30 minutes. more to come. this is bloomberg. ♪

julie: "what'd you miss?" back to earnings. starbucks and to pull late specifically. us.h drogen is still with starbucks has been sort of bouncing around. give us a big highlight from the numbers and what is most important. >> the first thing that jumps out is that the seno -- the china same-store the estimate is down. they beat on certain things, revenue, and the numbers are better than expected. i think the china market lee's contention. if they cannot turn it around, that is a big problem. scarlet: starbucks is saying it sees more price competition in china. julie: the u.s. market is important as well. market that had been slowing to some extent. are we seeing recovery? apparently frappuccino sales are not doing well. >> this is a conversation on

whether we are saturated in the u.s.. they have said the u.s. will not be the growth market anymore. 7% inll not see 5% and the u.s. anymore. it is china as what they are looking for. the company is considering national tv ads. it had not occurred to me that they don't. don't need toe know about starbucks, they already know. joe: but they know about coca-cola, and burger king two. >> think about how many little coffee shops we have. china numbers are the important thing. when i was interested in, last call, they walked us through their analysis of the china market and everybody i knew that i dealt with that made estimates on our platform that i talked to on twitter and otherwise, a blast at that tam and said they had no chance at that tam. scarlet: tam stands for?

>> total addressable market. we saw mcdonald's was pretty slow in china and there is concerns on whether the trade war and all of the rhetoric is affecting you as consumer brands. and that is seen as an avenue, nontariff way china can retaliate against the u.s. by getting people to not partake in these. scarlet: boycott is what you are thinking. julie: i want to get to aaa. tumbles dead with a big and series of various food scandals and problems it had. cragg, it looks like things look better in this quarter. -- which ish is not touchdown dance worthy, but they built on -- beat on eps.

the taco bell guy seems to be plotting the new course and time will tell. they need quite months were nobody is getting sick. we are finally seeing that. they're doing better. julie: when was the last time you ate to pull a? >> it has been a while. ate to pullpotle -- late. chipotle? julie: leigh drogen thank you for hanging out. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: the earnings spread continues. exxon and chevron report second-quarter results tomorrow. at economicook data. the gdp number is expected to be big. julie: don't mess the longest lunar eclipse so far this century is happening tomorrow. ♪ ♪

emily: i'm emily chang can san francisco. this is "bloomberg technology." amazon reports earnings with sales from amazon web services surging nearly 50%. we have full coverage and analysis over the next hour. billion wiped off of facebook's market cap and after earnings disappoint. this is the longest single loss for a single company in history.