assess profitability and corporate profit margins. we got a little taste of that. 2019, we will get more of it. joe: you have the market coming but you a close today think may be underestimating the impact of trade on earnings? ronald: i do think the markets underestimating so i'm threading needles here. we could imagine another risk on leg up on climates. i really want to focus the return on investment capital, balance sheet strength, because we are in a growth cycle. i were these could be planting the seeds for the next downturn in the market and the economy. scarlet: ron, thank you so much. you have the markets closing with the dow up 255 points -- 265 points. there has not been any while gyrations in contrast to recent

weeks. caroline: and building optimism. clearly there has been hoped for the earnings. the dow is killing it in returns of earnings and we had the best three-day lovely -- rally we have seen in two years. it: it strikes me that wasn't red to green or green to red or anything like that and the global nature of it. that really feels different than the rally. it's just one day, but the complex and -- complexion of it felt different. scarlet: there is a sense of combat has not been around for the last couple of days or weeks. joe: months. scarlet: months. let's dive into the action. roaming? romaine: the faang index is the one including apple, twitter, baidu, and 10 stocks in that index. synthetase back on june 20, one

of the stocks it positive and that is apple. of 19% during that time. five of the stocks in the index are down 20% or more since the june peak. it gives you some sense of how much not only that index but really a lot of the indexes across the markets are relying on apple to continue this rally. take a look at what apple represents in these broader market indexes where you are talking about the s&p or the dow. the s&p has a 4.3% rating. a 6% rating in the doubt. 13% -- dow. 13% in the nasdaq. about 14% in that xlk etf. correlation between apple and s&p 500 is 0.8. the closer you are to one, the more it locks in those semis. those numbers in the next few minutes will dictate a great deal of how we perform tomorrow. at asset taking a look

managers today. they were supposed to outperform in down markets. what happened last month when the stoxx had the worst month in about seven years? they underperformed. a new study takes a look at how large cap actively managed funds performed last month. you saw less than half actually outperformed the s&p 500 and did better less than this broad index of large-cap stocks. this perhaps helps explain why we see these big shares of asset managers completely beat up. the shares are down 80% today. even though they did increase along with the rise of the markets, they did lag behind showing an ongoing reluctance to pour into the sector given all of the headwinds. abigail: yet another big day for the s&p 500, up three days in a row. the best three days since june of 2016. this has been worst october since 2011. this is a one-year chart. first we look at a sideways trend.

back in 2016 and 2017, and uptrend. either the bulls or the bears were in control. second, the ranged is that matter. the fact that it is at the top of and uptrend might suggest sellers are waiting to pounce. third, supporting that idea, this 200 day moving average, the s&p 500 below it, the last couple of times we have seen that consolidation now and earlier in the year, it was bearish. this may suggest the game could be short-lived for the s&p 500. probably symbolic to what is ahead -- symbolic to volatility ahead. scarlet: thank you so much. frome awaiting earnings starbucks. let's bring in paul sweeney for his take on cbs. cbs's kicking things off. how titus cbs to the broader economy? paul: they still have a lot of their revenue -- tied is cbs to

the broader economy? paul: they still have a lot of heir revenue tied into that. as we see a lot of consolidation in the industry, and a lot of competition from the technology companies like amazon and of the p aree media companies, where do they stand? -- pure media companies, where do they stand? scarlet: we just got the cbs numbers as you were speaking. adjusted earnings percent or that's per share of a dollar -- adjusted earnings per share above estimations. marginally higher in after-hours trades. forline: a big key focus not only the u.s. consumer but the worldwide consumer. fourth-quarter adjusted earnings per share is ahead of expectations.

the fourth quarter comparable sales is up three point sent -- 3% beating estimations. the point is, we are looking ahead to the fourth quarter as well in terms of china. interestingly, a beat in china is comparable sales up 1%. the estimate had fallen flat.tely scarlet: shake share beating estimates. i wonder if we are looking at the right numbers to compare here. comparable sales down 7/10 of 1%. full-year comparable sales would be unchained notes -- unchanged. such --ke shack with was such a hot thing. scarlet: people talk about it having this new your premium because investors in new york know about it.

later on, everyone around the world got to know about it but it has this premium as a result. caroline: i'm interested to dive a little more into cvs with paul sweeney. we seem to be in line here. the adjusted earnings per share is slightly ahead of expectations. the key question is the management here. there will be questions about that on the call. paul: this company has had a tremendous turnover on management. let's move as was forced out of wascompany -- les moonves forced out of the company and he was one of the longer serving ceos in the media space. very much aligned with cbs the corporation and the stock so his leaving longer-term -- intermediate-term even could have a significant impact. the question for the border management team is, where is the next ceo coming from? will it be an internal candidate like this coo or are they going to go outside and bring in a heavy hitter here? oun this call we want a sense

of what the board's direction is. joe: what do they need to do? are there any deals in the future for cbs? paul: there needs to be more deals in the future for cbs. they need to get bigger and get scale. that is the primary argument for disney who is significantly bigger than cbs. if the like it needed to get bigger so it doubles in size with the 21st century fox deal. and you arebs sherry redstone, she is probably sitting back taking neither cbs or viacom is bringing in enough over the next three to five years. you want to bring those companies together and even that company might be an attractive acquisition target for another company. there is definitely more pieces to move around if you're sherry redstone. scarlet: you have the drama with viacom and cbs and then you have the les moonves drama as well.

i wonder if all of these different dramas has distracted cbs to tie up with other becauses -- companies it has been so consumed by all of this other stuff they could not prepare in the way disney or fox good. paul: from a fundamental perspective, they have done a good job keeping their eye on their ball. they have developed a lot of new revenue streams, like the syndication of their product to hulu and netflix's of the world. they have an over-the-top product, cbs, showtime products, so they have done a good job on the operational side, but strategically they have been dealing with the shareholder so much and the potential tie up with viacom that perhaps they were not perceived as attractive to someone else for consolidation. i think those constraints have been relaxed and this management team think they can pursue transactions. scarlet: paul sweeney, thank you

so much. the shares are moving in after hours trading. eps beating estimates. that does it for the closing bell and for me. remain steps and where we look at apple's fourth quarter results due out at 4:30 new york time. this is bloomberg. ♪

caroline: live from bloomberg's world headquarters in new york, i'm caroline hyde. romaine: i'm romaine bostick. joe: and i am joe weisenthal. caroline: u.s. stocks closed higher on the day. joe: the question is "what'd you miss?" caroline: what kind of price

tag? investors are watching the selling price of the iphone x models as apple reports earnings. the china fx, apple's earnings report should give answers from the fallout of u.s. trade tensions. always growth breakthrough, which gains of more than 3% since 2009 in the october jobs report expected, but is it just a one of? to other earnings. starbucks is killing it after-hours. why they managed to kill it in comparable sales. this has struck you in terms of earnings report. joe: just really solid. earlier this summer, back in june, they spooked investors and have been climbing out of a hole since then. this is a very impressive report and the company saying it saw improvement on every metric. the big fear was that they make all of their money on sugary drinks and nobody likes sugary drinks anymore. romaine: they sold a lot more

on the sugary drinks. they talked a lot on the earnings call about improving the sandwiches. this was a monster move. they typically do not move this much after earnings. usually you get a two or 3% pop. caroline: it's helping drive the comparison sales. let's talk about other earnings that might be tickling or fancy. apple is set to report fourth-quarter earnings and less than 13 minutes time. perysts expect earnings $2.77. here's what analysts are watching. >> what we are looking for always for apple's iphone sales. what really should benefit apple this year for iphone sales is their new models, in particular max have much higher selling points. sales shouldne

help carry the momentum. >> a lot of people are looking for services as another opportunity to drive higher value for the company. overall, if you look at the iphone, that is a recurring revenue business. >> we expect the segment will grow for the september quarter and that will be driving a continued shift toward higher-margin revenue. as the base of iphone users grow, services grow wrong with it -- grow along with it. caroline: let's bring in leigh drogan. thank you very much indeed for joining us. what are you looking out -- looking at. iphone?e all-important leigh: i think it always has been. what is interesting with the faang stocks taking a move down over the last couple of weeks, i think apple amongst them is the most stable business model.

even though it trades at a 12 month pe of 20, there is a reason that a slow but a reason why it is trading near all-time highs. the rest of the group has regulatory issues. apple does not and it has always been the iphone number. if that slips up, the whole thing is gone. i don't think this quarter, everyone -- anyone is expecting a slipup. up on it estimized take eps and revenues throughout the quarter so expectations arising. that said, i for numbers, 2% year-over-year increase, not much of an increase. away atkeep turning this, a 20 pe is reasonable. joe: how many times in the year that you've been following apple -- applets demise someone declares its demise? leigh: i will be the first one

to say i don't think they are getting credit, nor should they yet for the services revenue. not a big enough peace, yes it is high margins, but they will knock a credit until it is a much bigger piece of the pie. sense,bers in absolute but relative to the ipo numbers, 60 something billion dollars. that said, it is hard to sink this thing because of the stickiness of that product. romaine: you are talking about 17% of their sales and services in their most recent quarter and when you see this drop-off in sales tapering off, you want the services revenue to increase at a somewhat faster pace. caroline: here's the problem -- leigh: there is a problem with that. they say they are selling things lace and why p can they? because of the iphone. if that platform goes, the rest of it goes.

that is why they don't get the multiple expansion off the services revenue. caroline: margin is some 39% and a key analyst said they were about revenueried going forward because of the app store. have you heard that is a key concern not to remaining a strong is it is? leigh: amongst the concerns, that is not one of them at this point. caroline: what is? leigh: there is another reason why apple has been so good. it is because consumer is so strong here. the consumer in china is strong, but we see there is issues with the trade war. it has not affected it yet, and i do not think we will see anything in the gross margins this quarter. if it did pop up, that might be a significant issue. that would be more the bigger risk. it would be hard to say the consumer in the u.s. is get a follow up your anytime soon. joe: as apple expose on trade. -- trade period? leigh: the whole company is the

supply chain. that is why the gross margins relative to other handset providers are so high. if that gets disrupted, you would think in this case it would be a situation of when you owe the bank $1 million, the bank owns you, but when you owe the bank $100 billion, you own the bank. i think when push comes to shove , they may own the government. romaine: you ever hear about concerns of innovation or the lack of? when you see these big tech companies constantly hearing about new products, things different from there currently -- what they're currently doing. leigh: at a 20 pe, do you really need to? i have to interrupt because president trump making remarks upon immigration at the white house. let's listen in. straination's enormous on our local schools, hospitals, and communities in general

taking precious resources away from the poorest american to need the most. immigration costs our country billions and billions of dollars each year. country,s a welcoming and under my leadership, it is a welcoming country. we lead the world in humanitarian protection and assistance by far. nobody even close. we have the largest and most expensive immigration programs anywhere on the planet. we have issued 40 million green which means the permanent reticent to see -- permanent residency in the path to citizenship for many people, but we will not allow our generosity to be abused by those who would break our laws, defy our rules, violate our borders, break into our country illegally. we won't allow it.

mass, uncontrolled immigration is especially unfair to the many wonderful law-abiding immigrants already living here who follow the rules and waited their turn. some have been waiting for many years. some have been waiting for a long time. they have done everything perfectly, and they are going to come in. at some point, they are going to come in. many cases, very soon. we need them to come in because we have companies coming into our country and they need workers, but they have to come basis, and they will come in on a merit basis. communities are often left to bear the cost and influx of people that come in the legally. we cannot allow that. there is a limit to how many people a nation can responsibly absorb into their society. above and beyond our existing lawful mission programs, roughly 1500 to 2000 people try crossing our borders

illegally. considering job the laws are so bad. they are not archaic, they are incompetent. some are old and just bad. we cannot get any democrat votes to change it. that only the republicans are in unison and want to change them. they want to make strong borders, they want to get rid of any crime because of the borders, because of which there is a lot. .e have done a great job we move in tremendous numbers of people to get out the ms13 gangs that come into our country. this is a peril to jewish and in the threat to become even more hazardous as our economy gets better and better. a lot of the cause of this problem is that we have the hottest economy in the world.

it is doing better than any economy in the world. jobs, unemployment, you look at any number. right now we have more workers than any time in the history of our country. we have more people working, which is a tremendous statement. more people working than in the history of our country. the one to -- people want to come in and they want to take advantage of that. that's ok, we want them to come in, but they have to come and legally. wellis moment, large, organized caravans of migrants are marching toward our southern border. some people call it an invasion. it is like an invasion. they are violently -- they have violently overrun the mexican border that you saw two days ago. these are tough people in many cases. men, andyoung, strong a lot of men that maybe we do not want in our country, but we will find that out to the legal -- caroline: president trump from theg immigration

white house. right now we want to talk business once again. let's bring in leigh drogen talking about all things apple ahead of the fiscal fourth-quarter numbers. seen upwardve revisions to those numbers which is a good sign. the guidance is going to be huge year. apple has a history of guiding down a little bit. it is not hit the stock too much like other names. , talk about apple in terms of the other fangangs. leigh: i think people feel like this is a peak earnings type season. ngs havethese other faa business model issues.

there are regulatory issues that could push dps down. it has been interesting the war between tim cook and mark zuckerberg that goes on in the .ress -- earnings briefings afforde: tim cook can to talk up his security because it does not affect them. leigh: that's true. i don't know if it is so smart for cook to be poking that. he could end up with an issue any day at any point in time and have to eat his words, but i think people definitely feel like apple has much fewer existential, hidden issues that could pop up at any point in time. romaine: can we talk about some of their other products other than the iphone? are they still relevant? they just released these new macbooks and ipads, and the

percentage of sales is obviously not the behemoth that the iphone is, but how critical is that when you weigh the evaluation? leigh: i look at this in two different ways. ne, hardware, too, software -- two, software. when was the last time that apple put out a software that everyone loved? apple mavs was a disaster, apple music was a disaster -- maps was a disaster, apple music was a disaster. people don't care about the software. the hardware is relatively high-margin relative to other providers. the earbuds have done well. the watch has done very well. romaine: why can't they do better on some of these other things? they did do apple music or try to do it a couple of times. they have users, but it is not the reach of some of these -- leigh: anything apple launches

they will have a ton of users immediately because of the embedded nature of the hardware, but when i look at it, and here's the biggest one, when has apple gotten any of the ai stuff right? siri is a disaster. joe: why? is it is culturally? leigh: here is the big thing, when you go to work for netflix and you are a stark developer, you are allowed to go to a ton of conferences, all of this stuff. that is where people want to work. google, thinking. when you go to work for apple, they allow none of it. you are put into a box like ibm and for 20 years you are thrown in a back room and you come out with something. that is not the case at apple and they have a cultural issue around really putting out high-quality products. the thing that eventually sinks itle, witches who knows when is, could be 10 years from now, is google or one of these other players comes up with a real

good ai assistants, invented in the hardware, apple is three years behind or more and in that time period, they look at hardware supremacy. caroline: ar is meant to be the immediate future. how are they making steps there? leigh: if you look around the industry, it has been one step forward, two steps back for a lot of these companies. i think we are still years away from this being super viable. if they presented something that was way ahead of everybody else, and if you are going to say they could step ahead of everyone else in any one of these innovative categories, i would assume it would be a are because they -- ar because they are good at hardware. i would not say it would be an ai. romaine: when i hear we are good at hardware, they are good at it now but we have seen companies that were good at one thing, dominated, and the world passed them by.

when i look at tim cook now, who is a great leader, he has been there eight years or so, you have to wonder what is the next step for apple. do they have someone behind him who is the creative genius coming up with the next i think nextwill take -- the ithingy that will take the world by storm. they are obviously pouring a ton of r&d money into a ton of stuff we never see. the car and all sorts of other things. been up-and-down reports about how each of those is going, but again, if investors were really worried about the innovation in this paradigm of looking at a screen every day to get your news and communicate with people and stuff like that, they would have hit the stock already but it continues to trade at a steady multiple.

joe: we'll have to talk much any longer because any second, numbers will come out. romaine: this is bigger than jobs. [laughter] joe: just. data and it will be in a few seconds. the stoxx are of a hair, but that does not matter. there we go. caroline: it seems to be overall $2.91 earnings per share and that is a beat overall. apple managing to come in ahead of expectations. the stock is falling after hours we will have to see what the individual numbers are that they seem to be worrying about. unit sales looks a little shy. caroline: and the services it is expected. romaine: the one key revenue number of the forecast, they are hitting the top line of analyst estimates, but people always want more. do want to see more than that.

81 billion to 93 billion. caroline: at the moment, that is enough to lack expectation. , as you weregen saying, people were increasing their expectations going into the numbers. do you think they got too overexcited in the holiday season not leading up to expectations? leigh: there is a strong correlation between upward revisions and stock price. we have seen apple outperform because of that. normally for a given stock, you would see downward divisions into the report -- revisions into the report. they have guided a little below where the estimize consensus is for the holiday period, but i don't think this is much of an issue. they did miss the i phone number by about 900,000 or so. i don't see it as too much of an issue.

joe: it is not that important of a quarter? leigh: this is one of the higher but irs of the cycle, would say let's give it another quarter to see that asp number. caroline: we are celebrating our losses. 4.2%.for .2% -- this is notable. the market was expecting $10 billion and this is the future of the company not living up to expectations. leigh? leigh: i don't know if this is really a services number. i don't think the buy side is pricing apple's multiple off of the services number yet because it is so tied to the hardware stuff. a --so to not really business and own right? leigh: not really. joe: we're still looking for that asp number. romaine: to your point, caroline, they do have a pretty

good history of beating. 19 of the past 20 quarters they have beaten on eps. they are spotty on revenue, but consisting compared to other companies out there. maybe you don't take too much number, but it would be interesting to see what the mix was in terms of the sales of the higher-priced iphones to some of the lower-priced ones. i was talking just yesterday with a bunch of nine-year-old kids around trick-or-treating and they want to do get their hands on this xr phone. they sold it to me on the idea that it was only $700. [laughter] to the strongck performance of the american consumer here. thisan raise prices in kind of labor environment. we get labor numbers tomorrow and they will look good. average hourly earnings will be good so i don't doubt they can basically charge what they want at this point. we will see that in asp numbers here.

caroline: do your by sides see this company as a growth stock or value stock? leigh: this is a value name at this point. i would not put it in the faang name either. caroline: is the consumer staple? leigh: there's going to be a lot of val on the downside if there is an issue but i do not see much on the upside. romaine: to we normally get the asp in the release or is it something we extrapolate? that's interesting. say it is not a faang, is that because it does not have the same upside growth and the stability of the earnings is like a staple? leigh: the stability of the earnings is like a staple, but we look at things like this. the key industry groups are comprised of how a company revenue,s -- generates but if you look at the overlap of how people and what they look at an estimate on, apple is not

a part of that group with the other high val --high implied val names. if something happens to apple, it may not have a knock on effect to one of those names. it's worth reiterating that the stock is down 4.3% but it is another record-breaking quarter. they have shipped their 2 billion ios device. see it as that rather than the growth in the iphone. i want to look at the breakdown in terms of china from asia to your us -- to u.s. to europe. >> a couple of quarters ago, the big story was that everybody who hadn't been able to buy a large format iphone had been cycling

into the iphone and off of android. now and thes passed growth in china has waned a bit. is where isquestion is where is that next cycle because they do not tend to upgrade as much as we tended to upgrade in the u.s.. joe: even with the stock selloff, the stock is up about 8.5% from its all-time high in early october. that is nothing compared to the 25, 30%. to your point about how this is just increasingly at a very separate universe than people call tech, the stock performance is the same thing. just 1e: we are only at trillion and 73 billion. we could get below $1 trillion again. romaine: let's keep in mind, apple is a huge weighted company .

we were going through this earlier looking through all of the index is so you will get a 4% move in apple. it's going to move the s&p and russell. it's going to move everything. it's going to move a lot of etf's and maybe this will be temporary. hours before the next trading day. joe: average selling price of from 618e was $793 up a year ago and well above what analysts had predicted. leigh: the number looks good here. joe: to your point, is not like there is huge red flags. leigh: more broadly, when we look at the indices, you are not going to have a name like apple survive against the downdraft of what we have seen in the market forever. eventually, the market takes everything no matter how good it is doing. this move we had the last three days looks very reminiscent of

rallies. val call it whatever you want, high volatility downswing, so it will be hard for them to survive on the stock price. in the long run, it is a weighing machine. joe: mac unit sales are up a quarter of a quarter. there is some growth. they still have massively growing categories. leigh: that was not expected. the ipad sales were expected to be no growth. i think it was estimated at negative. i'm not quite sure the number matters to the market either. romaine: we did see numbers on the pc front of intel saying pc sales were picking up. i know it is a different thing than the mac, but it may show there is a trendlines there. leigh: out be interested to see what happens to the semiconductor providers that have gotten slaughtered the last month. corvo did pretty good. they had good numbers and maybe that was foreboding of what the

apple numbers would be which is pretty good. toant to see what happens the ones that have gotten smacked around. caroline: i think it's phenomenal how much they can increase their average semi price. even though we had a plateauing sales in the iphone, we have a jump in the price point of 1000 to 1450. averagee able to smash selling price. this is a company that can bring a profit minded -- margin. i'm interested to see what that number is because it is expected to see 39%. romaine: remember when you could buy an iphone for $200? joe: is that true? leigh: yeah, they subsidized it. joe: the real so market for iphones have never been inclined to go lower but they did say in one recent product announcements

that they are focused on lifespan of the iphone so it would not become obsolete after years.and a half or two the implication that you will pay more for an iphone that lasts for years if you can resell it after two years to someone else is a way for apple to expand the total number of the people using some of those services without going down scale. caroline: some reports of an interview with tim cook it going on where he cites weakness and volatility,kets, sx and uncertainty on whether apple can meet demand for all new models it has just released. it will be interesting to see how much that broken down in terms of china. leigh: that sounds like supply chain. caroline: it is great to get your opinion. leigh drogen. more on apple next. for now, this is bloomberg. ♪

romaine: we are back with more coverage of apple's earnings. let's take a look at some of their suppliers because they are moving lower in post-market along with apple names like ordo orvo, broadcom, texas instruments. we want to keep an eye on those stocks. if you're in asia, we take a look at large and, a lot of big names tied to this country -- company. caroline: a great perspective there. still with us is leigh drogen

and john butler joins us as well. the, we get to hear intricacies from tim cook and self on the call, what seems to be the key concern here? it seems to be forward-looking guidance for the holiday season. john: i think it is the guidance. on the marketr now and they have a little bit of experience knowing how the sxcess and the excess max -- x sold. max has overall, the quarter was fairly decent, and i would not say the guidance was disastrous. it tends to be a management that is a little conservative so my first thought when i saw the numbers was they are being a little conservative. joe: a thing also worth pointing out is the stock has prepared a little bit of it selloffs. -- repaired a little bit of it

selloffs. romaine: when you look at the earnings report, particularly the makeup of their revenue, is there anything that concerns you with regards to where they are getting their money from or maybe when they're not getting their money from? john: the only thing that jumped out for me what that was a little light was the services number. my concern and services is sort of like the iphone itself. there are elements in their that are i don't want to say aging but they have the potential to slow a bit. app store sales are slowing a little bit and icloud is getting to be a mature product. apple air, thinking. on services,ed in i'm listening on what is new, what are they looking at. i like the health care vertical for example. i think they have a lot of work to do their and they began to layer in, plant seeds if you will.

, any thoughts on the new areas that look attractive for them? leigh: in my be interesting to see that kind of services number in relation to have the games market is developing or not developing. is a huge it over the last number of months. an impact have had the on how much people are paying for mobile games and downloading them. joe: the other products category including things like the apple watch, air pods, $4.2 billion in revenue growing 13% from last quarter at 21% year-over-year. -- 31% year-over-year. leigh: they are good at hardware. caroline: in terms of stagnation, pointing out on the tliv blog, the current quarter revenue production shows growth of 3%. to put that in context, that would break five straight quarters of double-digit

percentage growth. this is a company looking a lot more like a value company rather than a growth company. you have been looking at how much ramifications it has on the market, right? charte: i also have a that shows you the correlation with the s&p 500 itself. most people know once you get to one, you're moving in lockstep up or down. that .8, however apple moves, that is what you will get out of the s&p and you see similar indexes with the desk relations with the other indexes as well. john: one of the thoughts i had in looking across the year saying they had a great year sets these denominator gets big. if you look at growth into the next year, it is not necessarily that apple's business is slowing remarkably, it is they are coming up against -- point, current

quarter revenue production would represent growth 3% year-over-year which would break a five year quarter streak. romaine: did you know that? [laughter] joe: it's been a long day. caroline: you get to hear it twice. joe: it was really important. toaine: with regards potential acquisition, you know they are good at making money off of the iphone itself and other products. given their seemingly unlimited ability to borrow, why don't they or is there a necessity to maybe make an acquisition in another space? john: i have always felt in the services business, it might make sense to buy content or by a gaming company -- buy a gaming company. it's easy to play armchair ceo. apple is a torilla's for making small talks in acquisitions but not doing the big transfer. caroline: what about supplies?

talk of them looking into semiconductor and imagination technology. john: i would not rule it out. i would rather see it on the revenue side, but you never know. leigh: i think the supplier acquisitions make more sense than big, shiny content acquisitions. if you buy the hardware, if you buy the suppliers, they know how to turn the screws on that gross margin which is what the market will reward them for on that 20 multiple eps number, right? high revenue companies that has a different business model or is a content company, i do not think the stock will be rewarded in terms of the multiple net growth. that growth will come pale in comparison to the overall revenue numbers and will wash out. joe: leigh, what will you be listening most four on the call? leigh: i think it is the supply chain in what is going on in china. we have heard some hopefully

good news about what is going on next week at the g10 making. hopefully they have a good meeting, but it does not seem like your guest adjust on has it right. i think this is more, we talk to the analysts on our platform around the buy side, everyone is going for more about two, 3, 4, 5 year battle instead of this getting cleaned up quick. says.see what tim cook i doubt he will come out to give a super honest opinion of any real risk there, but you might hear undertones and people will read into that. caroline: john, what do you look for on the call? john: i will be listening for any sort of early color on the new phones. keep in mind they move to a whole new platform this year. the year, they introduced eight and a plus along with the 10. this year, it is all based on

the iphone x design. they really have bet their future and iphone on the design so i want to hear how that is doing. sometimes we get a little hints on that and and services, i want to see where they are planting the seeds. caroline: thank all of you for your perspective. leigh drogen of estimize and john butler will be sticking with us. breaking news coming from president trump discussing immigration. he will be signing an executive order sometime next week. we will be digging into all of the comments coming from trump and he is talking about families and the separation that the border. he says his immigration plan is totally legal. from new york, this is bloomberg. ♪

caroline: keeping with apple, let's bring in the asia perspective. shery ahn is here with us. the perspective here is how many

key suppliers are based in asia. it looks like there is a report coming from reuters that tim cook says concerns are around exchange weakness and the markets weakness. shery: we know they have already aspect of whate products could be affected. we heard about air pod max, mac mini, and other accessories being affected by the tariffs. what you are you looting to is more on the supply the -- china supply chain. a lot of those companies are in taiwan, japan, and korea. so far though, it seems they are getting around that, and when it comes to business specifically within china, we have them performing better when it comes to iphone sales.

joe: tom, what has stood out to you from the report? >> the one silver lining is these average selling prices. what their strategy is, as their demand falls or as it doesn't grow as quickly as previously it had been, they rely on selling these higher prices. this means there is a significant number of buyers of iphones gravitating toward the higher end. you can't rule out the possibility of weakness in emerging markets, as we were just talking about, particularly in areas where you are not can have everybody buying the higher-end devices. there is that possibility of trade weakness, of a trade war. ofre is the possibility slight are buying of the crucial holiday season. look at tom, when you

this company, is this still a growth company or has this morten to sony, ibm, or one of these other companies out there? tom: i think we have along with to go before comparing it to sony and ibm. apple is looking for growth in the higher end handsets. in services, it reached $10 billion. that is a small amount compared to the revenue high, but it is growing and they expected to become a significant contributor to the bottom line down the road. they have upgraded their macs, upgraded their ipads. those have been well-received. those are some areas where you are going to see some growth potential, but i think we are in for at least another quarter of not quite robust growth as we have seen in the past. wish we: tom giles, i had longer. shery ahn, thank you. that is all for "what'd you miss?"

romaine: "bloomberg technology" is up next. joe: have a great evening. this is bloomberg. ♪

>> i am selina wang in for emily chang. this is "bloomberg technology." in the next hour, apple misses the company. -- apple misses. at iphonesrice year failed to spark excitement? plus, google walk out. protests against sexual misconduct. we will disc