economy and >> sounding bullish. the nasdaq off .8%. tech names on the downside. lingering.om asia off of its lows. >> the first back-to-back decline for the s&p 500 in two weeks. m was the driver. this comes as it reduces for-year forecasts. >> caterpillar viewed as a bellwether. 3m sells anything to everyone. finishing inof 11

the green. tech getting ready to report with apple and amd. let's look at what was driving the action at the close. apple, apple, apple, the big record at 4:30 after the bell. were looking at a long term chart. , investorsd down 1% getting nervous. this chart tells you investors don't know what to ask back. thee was a bearish announcement a couple of weeks ago. with the exception of 2000 eight, that average has provided strong support when tested in the past. tope sitting right on of that average, but we have a sell signal. 200-week, expect shares

to drop precipitously. if it holds, shares could rally. ins is the growth for sales 2018, double digit in september, 21%. what investors are looking for in that holiday quarter, down 4.9%, 3.5% in the second quarter, all quarters modeled to the downside. will that be enough to support that stock? >> ebay is expected to report after the bell. we know it underperformed the s&p 500 come up 26% versus 6% drop in the s&p, and part of that is right elliott management reported a 4% stake in the company and so they had a plan they wanted to lay out. fromnt to get comments ebay on this today. some of that include the $5 billion buyback program and

selling stub hub. ebayevenue contribution to , only 11% of total revenue. revenue has slowly been growing. , elliott is saying ebay will be worth more alone, about $15 billion, and would be a good acquisition target for walmart, target, google, or other companies trying to compete with amazon. >> the world's most hated stocks, that is how the u.k. benchmark has been described since brexit, the biggest net percentage of asset managers are stocks in two decades. nowhere has it been felt the net ftse -- the local ftse index. 2016s been battered since come down 20% last year amid fears of an economic slowdown. sinceing happens

mid-january, it is up. that came as a correlation between u.k. stocks and the negative, meaning the pound and equities moved in different directions, probably the steepest in some time. today's vote has the potential to pave the way for further gains come about with all amendments voted on, the progress of brexit is just as murky as before. for equity investors, you need to keep a close attention on this lightning correlation. determine whether it widens or contracts. that will give you the best perspective on the direction of these assets. thank you so much. our team has a great wrap up. we are getting earnings. -- its full-year eps forecast misses estimates.

revenue of 21.8 to $20.9 billion. we want to bring back our guest of city private bank. citi private bank. you are in london right now. you heard the outcome of those votes. thedo you investor uncertainty in the u.k. or do you just avoid the country entirely? >> we spent a good deal of time underweight the small cap u.k. equities following the vote. what investors here in the u.k. is a case of any country where investors face idiosyncratic political risks,

taking the view on the fraughtl, the pound is with risks, so therefore you want to make sure that is not a highly concentrated part of your poor olio. -- portfolio. diversification is a free lunch and equities investing. for those whot have to live with the consequences of these foes that they can get that diversification. >> let's talk specifics. apple after the bell, plus some big names later. what does positioning look like questioning >> across the board, -- like? . ,uestioning across the board asset managers have been dumping tech in part because of the , but there hase

not been that much of a shining for the big names. this is not a love to sector. you see that in how little pes have recovered, but also in the relative here in a group like tech versus financials. the one-month volatility ratio between the two respective major is 1.7 standard deviations above its trailing one-year mean average. there is still a lot of uncertainty. >> tell us where you are putting your money right now, speaking to investors, looking at strategies, sector by sector, individual stocks right now? >> it is sector by sector, multi-asset class. while we are overweight global equities by one percentage point

, i'll largest single overweight is u.s. fixed income at the front end of the yield curve, a variety of different categories. you have nine rate hikes out of the federal reserve, premium u.s. use come so there is fixed income products that can offer real income that is helping investors in terms of the overall portfolio risks. there is a lot of secular growth industries, asian technology, global health care, digital moreptors, things that are than the bounceback we talked about earlier from the liquidity issues around the turn of the mostly affecting transformants and industrials, the rebound-related shares. >> we have a fed decision tomorrow. changeexpects any policy , but a lot of attention. the pe seen this at

owell press conferences. chair language of that powell, he seems like the most worried person, even when times are good, when the fed needs to tighten. there must be worried that something is going wrong and seeing things like we have not seen it trade in the past yet. that is something that concerns me. comments on december 19 showed very little sensitivity to liquidity issues, while policy uncertainty was driven by this comment about automatic pilot on the fed's balance sheet. let's hear more about the appropriate size of the balance sheet, how much tightening, how much does the federal reserve want to improve conditions.

those of the things i would like to hear in this press conference. if everything turns out well in and the fed can raise interest rates that would be wonderful, providing everything turns out as well as the fed would like. >> it seems like the market wants officials to send definitive about the economy when they don't have all the information in front of them. there has been a dearth of data available to fed officials over the last several weeks. the looking for flexibility on the balance sheet. what the fed can say is more or less that the conditions in december does not reflect what we are seeing out of the u.s. data. economicad the index.e

so far, the worries are not about the u.s. economy, were not realized. what can jake say tomorrow to -- jerometors -- powell say tomorrow to calm investors? inwhere the economy will go the future will depend on tightening and private financial conditions. when the u.s. government also a lot of money and the federal reserve has out lows from its bond portfolio, there is so only so much bond for fully. a robustr not there is growth rate for the federal reserve to deliver quantitative tightening to the year and a couple of rate hikes, i would like them to say that we're going to be very cautious to make certain that we are calibrating policy carefully enough to allow the expansion to continue. calibrating policy carefully, thank you for joining us.

that does it for the closing bell and for me. next is "what'd you miss?" after applets painting a dismal picture in china a couple of weeks ago. this is bloomberg. ♪ this is bloomberg. ♪

bloomberg, i am caroline hyde. here is a snapshot of markets. tech is the laggard. >> "what'd you miss?" missed

what is going on in the u.k.. apple, china exposure comes services, and the margin. revenue expected to drop. >> this is quite something. where getting some other earnings from ebay. this is an important company. at $2.9t revenue billion, the estimate for $2.86 billion. $.71, estimated at $.68, so beating on the main numbers. we will see what share price reaction is and what they say on the conference call. >> amd in focus after the huawei

relationship, the chinese slowdown, revenue shy of estimates. eps eight cents, in line with expectations. concerns with china. they are all looking at what apple does. revenue is shy of estimates. pop for ebay, 5.5% after hours. often think about it as much as the big tech companies. still a player and nice performance. >> amd up 1.8% in after-hours trading. earnings, it has been the other side of the atlantic, the u.k. had plenty of amendments. the trade plan seem to get a signoff from parliament and she

seems to have a mandate to go to the eu and renegotiate on the terms of the irish backstop, but will the eu be willing to negotiate? so far, they are not. let's get to guy johnson on the ground in westminster. overall, was this a net positive day for the u.k. government? >> probably not. probably net neutral. , thatnd out what we knew there is not a majority for a no deal brexit, and the majority of tory mps would like to renegotiate the irish backstop. that it has been firmed up and we have that in numbers routee some thing of a forward. theresa may can go back to brussels and say we do want a deal, but the sticking point is one that needs to be resolved

before that will be possible. i expect we will hear from from maria in just a moment. towardsas we march march 29, maybe we start to see that eu trick become a reality. >> you anticipated my question. be inis the vi brussels after the only thing they could do was send theresa may back to negotiate something else? >> it has been a surreal night. one,e back to square basically 60 days until brexit. essentially the prime minister has decided to ditch her own deal's. she has now decided that it is good to renegotiate and open up the entire divorce agreement, the eu leaders say is not

possible. for the eu, the art backdrop is key. they think there is no future arrangement without it. most importantly, they don't want to throw the irish government under the bus. the fact that the market has decided that and no deal outcome is not possible, but brussels sounds differently. i hear people say an accidental no deal is possible. 29 isfault option march that you simply crash out. of us that don't know the inner workings of the parliament, how does the irish delegation factor into this? do they have power to derail where this backstop agreement is

going? >> absolutely. the irish are a member of the eu. the eu will put its current members first. the irish backstop remains a significant factor. the irish have been's extremely influential in this process and will continue to be so. withu is likely to stick one of its members and want to grant eu k its desire, which is to reopen the backstop. ways you could see this whole thing as employed by theresa may. have decided the eu will not renegotiate the backstop and what she is doing and is winding down the clock. she knows that brussels will not do anything about the irish backstop. she comes back and says they won't do anything. let's have another vote. that vote fails. and now we are close to march 29.

now she says this is my plan. you vote for that are we getting no deal brexit. they will probably vote for that. that could be the strategy for theresa may at this point. our leaders in brussels about a no deal brexit? are there knock on ramifications for the eu broadly that they are concerned about? >> there are. there are member states that are concerned, like the netherlands, because they have close trade relationships with the u.k.. flows,ve strong tourism like in spain. in brussels, things are different. you have a european election, migration crisis, an economy on the slowdown come the ecb may or may not take rates higher. things that eu leaders have to focus on, and

this is why we hear there is no appetite to call is virtual -- call a special summit, and this is still a domestic political situation that the u.k. needs to sort out, then maybe come back to brussels. want to stress this idea of an accidental no brexit. as we had closer, and there is no positive majority, because what you hear from the eu is not wanting to crush out is great, but you need an alternative to get to the u.k. parliament and i want to stress there is a european election. the european parliament will go into recess in april. they would have to get it done within the deadlines. >> thank you. guy johnson from westminster. maria from brussels. recap earnings. ebay up after hours.

they reported earnings for the fourth quarter above estimates and providing guidance for the first quarter am also coming in slightly above estimates, and looking for first-quarter eps of 62%'s, the estimate was for $.61. then when you look at amd, they were up a little bit as well. the actually miss both on fourth quarter revenue as well as on their guidance for the first quarter. however, they are saying for 2019 that they will be high single-digit sales growth, and that seems to be giving share support. plenty more coming up. apple? did it get for we will look to holiday earnings and the impacts of a privacy breach as well. this is bloomberg. ♪ as well. this is bloomberg. ♪

>> apple earnings do this hour, expected to report its first decline since the iphone launch. revenue will probably keep shrinking. joining us now is the founder thateo of a company aggregates estimates. what can we expect? >> they will stop reporting iphone numbers. we have been on this call for a number of years, yes the services revenue is growing quickly, but i don't think that multiple will change if numbers continued decline and there is no new platform. the services revenue will not grow as fast as now. this idea apple will get some multiple because people like

services and cloud, you think it is a fallacy. >> the service rose revenue is based on hardware devices. look at china with we chatted and we pay. subsumedication has for consumers the os. it does not matter if it's apple or android. that is their os. wantinglies on people to use the os. hardware is the same with the providers. lead inake away their the os and other applications take that spot, why am i paying $1000 for an apple device and now we have problems with services revenue? >> you will be sticking with us. we will be back. we will break the apple numbers down.

also, that data breach. this is bloomberg. ♪ ♪

, earnings ahead of estimates. $84.3 billion ahead of estimates. , $55econd quarter outlook billion to $59 billion, in line with the range of escrow occasions. -- of expectations. the market seems to like it. up 3% after hours. >> the market was expecting something worse. guided expectationsd

down. the forecast for gross margins between 37 percent to 38%. >> given the scale of the selloff in this company, it is not a remarkable after hours bond, but it is something. maybe people just got too pessimistic. what is notable is the way they are guiding for the second quarter. it will be back to back terms of revenue. that's the first time we have seen sequential losses going back to 2001. >> they basically came in at the bottom of their guidance. i don't love that so much going forward. push thise hard to

multiple down further if they will only decline in revenue by mid-single digits. that won't be that appeared -- that bad. >> what is your take? this is weak on the margin and the revenue line. they are coming in at the low end of the range in terms of their outlook relative to where estimates are today. this is a year of transition for apple. they are up against tough iphone .omps they were pushing price up every quarter after they introduced the iphone x. toughre now against those comparisons at a time when china is weakening. it's not so bad. it could have been worse, honestly. services revenue growing 19%,

a decent clip, $10.9 billion. we talked about the future of this company and they want us to think about them as a services company. they want you to think in terms of services and growth another products. it is still a small percent of the whole pie. iphone drives the bus, and it will throughout the year. within a couple of years, services and product revenue coming from other new products will begin to grow to a size where it is enough to pick up the slack. about thisle warned quarter, it talked about week and is in china. they stone what you said on chat, how muche

is an apple story versus something going on in china? >> all of the above. reports,eing it in both apple and broad earth -- broader. getting china numbers that $13.2 billion. they want us to start seeing it as a china expose company. are we going to care about the data breach? china is still 20% of sales. for tothe potential deliver growth or results depending on how things play out there.

i think the chinese economy is struggling at this point. you have some really good competitors in that market. they are all making these atulous smartphones affordable prices come so apple is up against that, and probably growing nationalism giving the trade war we have with them right now. iphones are that the humid. growth is decent in the other categories. what is your view on watch us, , connected- watches devices? >> i think they will not the ball out of the park. it relies on the ecosystem.

take away the iphone, who is buying air prods? the watch is doing well, but it is all connected. the other thing i am scared about is apple, if i am correct, has never guided revenue in the middle of a quarter in recent history. what it basically says to me is tim cook does not know what will happen in china. that guidance number is incredibly variable. thesis one way or the other, that is your play. i think the standard deviation of his accuracy will increase. >> building on comments about the popularity of the watch and other devices and the idea they are all still connected to the apple ecosystem, connected to the iphone, when you think about the future of apple, why have we

not heard of a push to d connect those things where they could reach a broader audience that does not want the iphone? we will see of that going forward. ces, appleen during made a great deal with the samsung to have their content available on smart tv's. that is a baby step towards reaching out more broadly to the tech community, much in the same way that microsoft did, moving , andproprietary to open that is an important move for apple to make it some point in the future. >> you mentioned china. it wasn't good anywhere in the world. a modest rise in the americas. .ales in europe were down

china is the real weak point, not have flying away sales anywhere in the world. what does that mean for the margin? isthe consumer growth story the number one risk in fiscal 19 to having an earnings recession. that bucket as well, unfortunately, although it does have pricing power over its customers here. i think china will be in issue and the average selling price will have to come down. heree consumer has issues in a 19, apple will get hit. >> not necessarily elsewhere. tim cook says he is rethinking how the apple will price the

iphone out of the u.s. hit a wallapple did on pricing. , and i is a real science think they got away with moving up on that price curve with flight unit growth all last year. come this past fall, they and they hitxs that wall. they do need to rethink their pricing strategy in order to drive higher volumes. there seems to be an admission here that you will not make inroads into india and these

developing nations without a price point that is attainable. the average selling price of a smart phone in india is around $125. there is no premium segment there the way there is in the u.s., apple prices in u.s. dollars, so when the dollar gained strength against the yuan , the price goes up in china, and that may be what he is alluding to hear. >> the loss in terms of how much revenue money they gave away, your take on the trade tensions? tim cook is looking hopefully that they are easing. does that matter? >> i will believe we have a deal at the time.

i don't trust anything coming out of the administration. i think there is a huge political arbitrage. tim cook will have to get it right here. there was some talk about moving production to india. he will have to put on his coo he isd figure out how going to get that machine to ank with what seems to be ongoing trade war with no end in sight. hours,e higher after including broadcom and tmc. thank you. more ahead. ♪

>> apple earnings are out, in line with lower expectations. they had 52 billion dollars in sales of iphones come at $6.7 billion ipads, and accessories at $7.3 billion. to get more perspective on how this news is affecting the andany, asian suppliers, the tech sector, joining us our bloomberg team leader for equities and shery ahn. what shall we be looking for in asia? will see suppliers coming in from japan, south korea, sk

hynix, japan display, and tie one semiconductors, even some -- taiwan semiconductors. it will flow through throughout the day. >> interesting comment from tim about indicating some willingness to be flexible with prices outside the u.s. revivede flexibility unit sales momentum in china and asia? provideve seen apple havesubsidies if customers older iphones and trade them in. we have seen those discounts , but asn unofficially have seen almost $5 billion in lost revenue sales in

china. is having a big impact among asian suppliers. seen a huge impact on these negative news flows of asian suppliers on the gtv library showing how tech stocks have been hit in 2018, 20 1% drop for the msci index, but perhaps some optimism they may start recovering a little bit this year, especially january. hours, butp after have eroded market capitalization significantly. it is below microsoft, amazon, alphabet even. we had a lot of handwringing about apple. was there a complete freak out in asia as well? a bit of a freak out initially.

since then, it has been a nice uptick for asian stocks. for these tech stocks, 21% last year, so much was priced in in 2018. it feels like people are picking up the value again. you have seen asian suppliers fall before apple bid. 380 billion dollars of market value loss since october. these suppliers outpacing losses and falling before apple does. >> what do you make of the comments? >> you are seeing down pressure caterpillar,vidia, but when you're talking about the retail sector and consumption, it does not seem to have been that badly hit. don't know how many starbucks

stores are being opened and how many hours, but they are surprising numbers, so you are seeing the retail sector little bit better than other parts of the chinese economy. sentiment the general in asian markets, in the major equity markets, given the earnings? tech is a huge part of the asian stock market. , buts the highest waiting a lot of this was priced in last year. this week, the biggest thing will be trade talks. that is what everyone is waiting for at this point. a lot of it has been priced into the market. yesterday ons huawei and what it means for the trade talks. advisers saying everything is on the table and we have to see what will come

through, so are a lot of it is wait and see for us as well. 3.6%.le up what will you be watching for in asian markets must closely today ? suppliers,sian brexit, the decision with parliament. i want to mention the trade talks. it is interesting the timing of these criminal charges against huawei. days beforet two the official start of talks, so pressure on china. be ongoing andl we will get the latest headlines. thank you.

this is bloomberg. ♪

a busy day. u.k. lawmakers considering >> a amendments, seven -- brexit amendments, seven in total. it seems that we are back where we started, guys. where we started. we know what we knew. there will be those who try to spin this forward, saying theresa may has a mandate to go back to the eu to renegotiate the irish backstop, this controversial part of the withdrawal agreement, which locks the uk's into a customs union with the eu following the transition agreement if a deal does not get done, so back to

where we started. there is a glimmer of hope for those on the other side of the fence in the house of commons for a no deal brexit. the biggest progress this evening is we now get talks between the labor leader jeremy corbyn and theresa may. jeremy corbyn said that will happen because the house of commons has decided a no deal brexit is not a realistic prospect. the eu is making it clear that it will not renegotiate the .rish backstop >> i know they voted down the amendment that would have it then that article if the, but is there any potential the eu would be open to ask ending the more wiggleget room? >> the u.k. does not want to see

that happen. , it will force minds to be focused in the house of commons. in peace will have to make up their minds whether they -- mp's will have to make up their minds whether they want a deal. approach may 29, that could work in theresa may's favor. she does not want to extend article 50. the eu said it would be open to such an agreement for the u.k. at this stage. >> i'm going to say something i will regret and it will backfire , but throughout this process, it has been confusing from my perspective with so many permutations, but suddenly it looks so simple. they will get to the deadline and vote for something that resembles the current deal or crash out.

what am i missing? >> i don't think you're missing much. i am not 100% certain, but the shape is beginning to form that this is theresa may strategy and that she is trying to keep the process going until the last .inute she knows brussels will not want to renegotiate the irish backstop. toa result, she comes back mp's and we get another vote without too much progress then, counting ever closer to that deadline. in piecee will force to make up their mind. what we have learned is they don't want a no deal brexit. to vote forhey need something in a positive session. she hopes ultimately that will be heard deal. dealsnwhile, it takes two to tango, it seems.

the irish ministers saying we are not just talking on brexit. analysis from westminster with guy johnson. lateank you for staying so with us and covering all things brexit and apple. apple basically projecting revenue that comes close towards the street estimates, suggesting the punishing in 22018 has not gotten worse, but is in line with the downgraded forecasts. it makes you wonder about the future of the company. are seeing significant growth in wearables with the drop-off in iphone revenue and the bump up in services. apple shares at their highest of the after hours session, now up over 4%.

the market liking what it sees right now. that is all. >> bloomberg technology is next. >> this is bloomberg. ♪

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my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. ♪ emily: i am emily chang in san francisco. this is "bloomberg technology." resultsirst-quarter slightly be lowered expectations. we know the extent of the sales plunge in china, $5 billion. we will dig in into the results. appears inhuawei court after new charges filed, while