obviously -- we still valuations are -- fundamentals continued to get better. caroline: we don't need much more in terms of bonus in the s&p 500 but that is still a new record high. joe: how many days like this have we had where the intraday action doesn't seem remarkable. you look at a one year chart and it turns into a massive gain. particularly when the

nasdaq hits a record high but volumes are off by 10 percentage points. we will be watching for earnings coming up soon. joe: still with us, kelly flynn of -- kelly flynn and gina adams. ,hile we wait for alphabet obviously tech is just killing it again. is it just another area like everything else where it is kind of getting stretched? kelly: as a value manager, we are somewhat underexposed to tech, but we pick our spots here or there. comparative 1999. i don't think we are anywhere close to that personally. still, as value managers, we are quite disciplined on valuations. we own a handful of things that i think have strong secular growth characteristics.

>> what about health care? do you still see value there? obviously a big selloff and a lot of healthcare services over the last couple of weeks. we haven't had exposure there. but i think a scenario where there is a strong potential for value to be created over the next couple of years. caroline: alphabet has just come out with its earnings. first quarter earnings-per-share, $9.50. paid clicks on google properties up quarter on quarter. they are coming down. we are seeing miss in terms of first quarter revenue. no wonder we are seeing the shares fall slightly. romaine: a lot of people will focus on that and it will be interesting to see if they back out. the operating margin,

18%, coming down once again. everyone is focused on that margin, that profitability. they have spent so much on the cloud part of the business. even with this 2% decline, this is such a massive winner. the first look, might be a little bit below expectations or show a little bit of the acceleration, but obviously the big picture -- record high going into today. romaine: can you really go wrong orh a company like alphabet any of these large-cap stocks? at the end of the day, you are talking about near monopoly companies that continue to pump out cash.

>> when you look across the large-cap tech companies, you were today sitting on only one of those stocks making new highs. aside from alphabet's new high today. i think what the market is focused on with this group over the past year exclusively has been the margin line, which is an alteration in the story from where we were two or three years ago. ,uddenly, over the last year top line is not enough, you've got to manage margins. we saw that with apple, facebook, alphabet. throughout the group, the companies that are beating on margin are winning this earnings season bar none. you have about 45% of companies in the index that are missing on the revenue line. it has got to be margin to create a better earnings environment. even though revenues are largely steady, margin is what the market is zeroing in on.

revenue traffic expectations, a little bit behind expectations. that might explain the 2.5% pullback we are seeing after hours. thoughts on alphabet, other big tech, and how much they rallied here? kelly: alphabet is a terrific company as others have mentioned already. terrific market share and capabilities with a lot of optionality as well. i have followed it sits the ipo. over time, there is always tension between the top line and creating some operating leverage. issues with ebbs and flows over time. i think it is mainly a function of what investors are demanding at any point in time. romaine: we are going to leave it there. and kelly.o gina

we're going to talk a little bit more about alphabet and its results a little bit later. caroline: we are currently parsing our way through some commentary, they delivered robust growth, alphabet revenues coming up 17% versus last year. that does it for the closing bell. miss" is up next. we will be taking a closer look at the company calling itself we work. this is bloomberg. ♪

♪ live from bloomberg's world headquarters in new york, and caroline hyde. here's a snapshot at another record close in u.s. stock markets. alphabet shares declining after hours. quarterly sales missed estimates. walmart is going to bankroll a slate of original programs over the next year and unveil its first few this week. another unicorn eyes the public market. as we company, better known we work, filing an ipo only behind uber in terms of expectations. alphabet stock is down after hours after quarterly revenue seemed to miss analyst expectations. they are managing to rein in spending. overall capital expenditure falling.

a bright spots seems to be there other revenues. cloud, app store, hardware. romaine: i'm going to be really interested to hear what they talk about. you are seeing this with so many of the other tech companies, a lot of their peers that are finding ways to branch out their core businesses. amazon kind of the poster child. joe: when you look at their numbers, the strength of other revenue, being able to pull back on, it is important to remember that this is a stock up over 30% from last year. caroline: let's bring in bloomberg technology executive editor tom giles. what stuck out to you aside from the fact that shares are moving lower after hours? tom: my look is the revenue miss. it is not a huge miss, nothing very dramatic, but in a period

where you are seeing companies like facebook and amazon do well in digital advertising, if you are google, you really can't miss. you need to come in at or above expectation. up pointed out that stock is , closing at or near a record. there's a lot of high expectations going into google's results. facebook -- think about the problems that facebook has had with trust, with misinformation, and the list goes on. and yet they are able to post a double-digit increase in advertising. if you are google, you do not want to be missing on that advertising line. is: do you think there something fundamental that is allowing facebook to continue to thrive? facebook still is a ways away from its all-time high.

the bar is still considerably lower for facebook. i think facebook has this great property that is instagram. that is a big secret weapon for facebook. google right now doesn't have that new, high-growth property. certainly, there's advertising dollars going to youtube. we still want more visibility into how much youtube contributes to the bottom line. but, there's just not that same degree of what is new, what is fresh, where are the kids hanging out? if you are an advertiser online, you have to be on the google property, but there's not a new thing to be flocking to like there is with instagram, facebook. remember, amazon, you cannot underestimate the power of amazon in the advertising space. romaine: talk to me a little bit

about this other revenue, the hardware, the cloud business. how much impact is that having on the company and how much of a growth story is it going to be going forward? tom: it is a great asset for them to have particularly in an area like cloud. amazon is the upstart in advertising. google is more of the upstart when it comes to cloud computing and finding customers. what google needs to do if it wants to compete with amazon and microsoft, amazon in particular, is go to the retailers, go to the consumer goods. the companies that they can say, look, you don't want to go to amazon for the cloud because they are your competitor. they are eating your lunch when it comes to retail, when it comes to consumer. that is when google can make a hard sell and say, we are an alternative to amazon. i wanted -- in a minute, i'm going to delve into some of the

ads in the cloud. but certainly cloud is part of that other revenue area that is driving sales. also, remember, the google voice activated digital assistant, i have one in my home. a lot of people look at that is -- that as an alternative to amazon's echo. some of their phones are seen as an alternative to the iphone. there are some areas of strength for google right now. romaine: thank you, tom. companies confidentially filed paperwork to hold an ipo. ,he company said in a statement the new york-based co-working company initially filed in december and recently issued updated documents. let's go a little further into the story with the ceo of triton research. what is your read on this filing and specifically what investors are going to get out of a

potential ipo of this company? >> even though they don't like the way it is trading, i think this proves pretty conclusively -- large loss makers. people have had their chance to wrap their heads around the uber story, it seems like people are receptive. if you believe the reported numbers, you are losing $2 billion on $2 billion of revenue. that apparently is not a disqualifier in this market. uber is kind of famous or infamous for coming up with its own metric. it just subtracts a bunch of other things that most people don't think you said subtract. does this raise any red flags, the idea of like coming up with

your own the spoke metrics -- your own bespoke metrics? >> net revenue, what they are trying to get people to enter into. it starts with advertising themselves as a state of consciousness more than just a real estate path. it is just not particularly helpful when you are trying to get your head around the company that will make money only in distant years out as opposed to in a backward looking past. caroline: uber currently on its roadshow, hitting london as we speak. we are hearing that they are talking about expansion plans, pitching expansions. that is even as investors are questioning the losses. where do you think uber stands at the moment in terms of investor sentiment, investor appetite?

it being hearing relatively well received even though the filing is completely inscrutable. what we see is that the core business, the big been scrambled between bloomberg eats and ridesharing in that you can't really separate them. other revenue streams including scooters and bikes on the one hand, freight on the other, are delivering either an immaterial amount or not at all to revenue. to the extent that this story relies on expansion, none of those expansion channels are proven at this moment. i think what the historical numbers show us is that uber can grow or it can be vague break even profitable--ish, but not both at the same time. romaine: always appreciate your insight. coming up, we will hear from the

goldman sachs chairman and ceo. why he believes the fed chairman jerome powell is doing a good job.

joe: goldman sachs ceo david solomon seeing a speedbump in the fourth quarter. eric spoke to him about the outlook. >> throughout the quarter, activity levels improved. we had a little bit of a speedbump. as we movedhutdown through the quarter, i think we saw a little bit more of a move

back for risk assets. i think as you get around the europe and japan lacking a little bit, but the overall package, especially that central , quiet activity has improved. >> how do you think that pivot and the results it has had in financial markets will affect or influence the way central bankers think about policy going forward for the rest of the year and into 2020? >> i think they have been clear about communication. our lead economist -- >> you can make the case that back in october, jay powell may have screwed up a little bit. >> i think he has done a good

job, a difficult job. as you move forward, policy activity as we move into 2020. economists predicting one increase late in the year in 2020. onis, i think, very cautious the fact that we could see a cuts. i think right now, economy is chugging along pretty well, it will be relatively stable. >> one of the places you see an impact of stable policy is the credit market. >> the credit market is pretty constructive. money is pretty easy. but when you look at the big banks and their participation with the credit markets, i don't think there has been a real movement in credit standards. i think what you were alluding to a little bit is when you get out of the regulated institutions and into some of the shadow banking markets, transparency around that activity.

i would say that is an area to watch. i don't think it is necessarily systemic at the moment but i think it is an area to watch. i think when you think about that space, some of the capital in that space is longer dated capital. as those shadow credit markets grow, i think that will be something to watch, something to monitor. the regulatory environment has pushed credit lending in that direction, so that will be something. >> what is the better alternative, that regulators pay better attention to the shadow banking market, or they change the rules to allow more of that credit to go back to institutions like yours. >> over time, finding ways to have a better understanding and more transparency will be important. i'm sure business leaders in our part of the business and regulators --

romaine: that was goldman sachs chairman and ceo david solomon speaking to bloomberg in beverly hills. caroline: it is time for a look at what is trending in the bloomberg universe. internal users are reading about president trump, who said that new yorkers could have thwarted a provision in his tax laws. one of the most controversial changes in the overhaul. the president said new york didn't even put up a fight and could have had one. bloomberg.com has a story on burger king, which is going all in on the new plant-based burger. the impossible burger comedy impossible whopper as they call it. the fast food chain looks to expand the offering nationwide by the end of the year. tictoc on twitter is reporting that kids in the u.s. don't drink enough water. on a survey of 8400 children, age two to 19, 1 in five don't drink any water all day. they instead consume sugary drinks that almost double in

calories. a contributive factor is that parents don't trust the cleanliness of their own local water supply. fall these -- follow all the stories on your terminal on bloomberg.com and of course tictoc on twitter. romaine: walmart and chill doesn't quite have the same ring but the big box retailer does have plans to finance a number of programs over the year. let'st has already welcome bloomberg news big-box retailer. i'm not so crazy about this idea. family-friendly content through walmart, why do i want this? >> it is mr. mom. one of my favorites of all time. a classic. the scene where he goes in the wrong way through the school entrance. this is comedy gold.

walmart, is this ever going to be a huge part of walmart's business model? no. gone are the days when hollywood executives would have to beg walmart to carry their dvds and movies. we are in a streaming era now. thatrt has this business they really haven't done a heck of a lot with. it is not streaming, it is not streaming, is just transactional. you want a movie tonight? you buy it. i have done this before. you look at your tv's remote, there is probably a button on it because they are able to get this vudu button. walmart wants to make a little bit more of this business and also be seen as a technology player as well. in theory, does walmart want to have this sort of must-see thing that everyone talks about?

>> they have enough movies that people are just watching on a date night. in eight corner of the room in their own screen. think david attenborough or something like that. why not? it will work for them. if they can lure in the advertisers which are already attached at the hip to walmart, then it starts to make a little bit more sense. caroline: would you buy something through it? , it would be shot people content, which i call it. at some point, you will be able to look at the show or probably an ad during the show. you can buy the quicker picker upper at the same time. romaine: coming up, more on

these alphabet earnings and the reaction.

nations security council held a moment of silence for the victims of attacks of -- places ofon worship. the ambassador to the yuan spoke to reporters. the time for talking and having a conversation is over. we demand action and now, it is simple. those who engage in .nti-semitism must be punished

the ambassador continued, saying quote it is unacceptable that worshipers look back while they are praying. the nra tomp telling stop the internal bickering. the governor has challenged the tax-exempt status and oliver north has been ousted, following a battle with executive vice multiyear.ayne your sanctions could push iran inflation rates of 50%. the goal is to cut countries exports to zero. they were already dealing with a weakened the economy. political deadlock

with both parties divided over britain's post-brexit relationship with the eu. the government rejects the idea rulesy you he -- eu trade would prevent britain from striking new deals around the world. theye's a report that have been very constructive. today, we need to tenant out. -- pin it out. >> the brexit was supposed to has place last month, but been a sooner to october. toald tusk warned them not

waste the extra time. global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries. >> [no audio] has been recommending investors put more money on the table. welcome show my markets of had a significant rally this year. valuations are still attractive and you can make money in emerging markets, you just have to be more selective. >> some of the emerging markets that got in trouble back in the

spotlight's, now, argentina. he was going to do everything sort of investor friendly approach. what has gone wrong? >> the expectations were too high. when he came in, everybody to recover.entina day.was not built in one what is really important, significant changes that were not enough to meet the expectations of the population and therefore, the popularity suffering. beenready, the market has falling out. we actually got the peso

stabilizing. be institutions said he shipped? -- ship? >> we said at the beginning of the year to market was underestimating the impact under adjustment that has taken place. the country at this point in is probably far more negative than we think is possible, so some of these measures put into place, if it manages to stabilize the currency, the market would be a beneficiary. >> how do you assess the situation and venezuela? >> it is an interesting situation. it has been for a number of months. a is important that there is regime change in that happens as soon as possible. the interim president has

.nnounced a bigger rally it also tests the loyalty of the armed forces. will the armed forces continue to support maduro under this particular situation? change, he is regime said rome was not built in one day. venezuela is a much bigger challenge. so thatld the first fb a recovery could actually be durable and not slipped in a year or few months? >> i think the first step has to be having a legitimate election, so there has to be interim government, elections that take

place so that the country can start getting investment flows and having conversations. what about the flipside for all of them which is the strength of the u.s. dollar? >> the dollar has been broadly stable this year. the u.s. dollar is pervalued, but over a longer er we believe it will be attractiveiod. >> thank you for joining us. coming up, we will have more on those earnings and hear reaction next. this is bloomberg. ♪

--but sick a deeper dive let's take a deeper dive in health of that results -- let's take a deeper dive in and out of that results -- alphabet results. [no audio] revenue fors own alphabet. saiding with the ceo, she the numbers reflect a headwind in contrast with a tailwind last year. it is a comparison off a strong base and the timing of the product changes. they say they did so well that

it is really hard to compare. in terms of what was driving the good parts, you talk about local search, the app store, but in general, the question of amazon and you have more people starting their searches directly on amazon and we see that in the digital at business. i asked her about the threat of amazon and she says she continues to see it across a wide variety including ongoing opportunities. she talked about how much had buckets in general are off-line and they continue to see people searching robustly in a wide range of areas. more broadly, google and all companies facing the question around regulation. you have seen senator elizabeth warren call for the breakup of

big companies like out of it. google go toeo of testify in front of congress. i asked her if that is something she is thinking about. she said our mantra is that we look to build for everyone and respect the user and opportunity . we should be continuing to up the bar on ourselves in that is the way we approach it every day. that is perhaps the most humble i have heard her about that .articular question lastly, i had to ask her about the need to movement -- me to movement ongoing. instituted a new policy

to allow employees to complain in different ways. thatas a policy she says .rohibits retaliation she says we investigate all allegations and have multiple ays to report, so wide-ranging conversation, but my guess is all the focus is going to me on the revenue numbers. >> speaking of the revenue , some of the other areas starting to gain traction including the cloud were companies like amazon and microsoft are making an absolute fortune. is this an area where alphabet could show some traction and gain more market? the ad industry is already dominant. did they see a lot of upside?

if you look at the clock, you can think of it as an expanding cloud. moving. a lot more she did talk about the cloud a lot in our conversation. the one thing he didn't talk about much was youtube. in the last quarter, there have been a number of issues with youtube, conspiracy theories, hate, when i called her on this, she said you haven't mentioned youtube yet. she said youtube is intervened helpfully, the ads are doing great. there continue to be questions about how much they are contributing to the bottom line. analysts say it is a black box and also how much google is having to spend to moderate

of problemscleanup the platform is having. >> we thank you very much. the latestck on business flash headlines. filed for ipo. lenders argue that petsmart move shares between the parent chewy. -- the german lender expects them to lower the recommendation for how much additional capital in need to withstand a crisis. in amazon plans to create 400 jobs this year at its new headquarters in arlington, virginia.

they have promised to create 25,000 jobs in the first building will open this fall. amazon, they came out with this idea of doing one-day shipping for some products. omar came out with a tweet on friday and said one-day free shipping without a membership fee. that would be groundbreaking clever.p it was still it gets to the idea of this so-called race on the logistic side. >> companies like walmart and target are getting traction. it feels like these companies were really on the defensive for while, maybe feeling comfortable they can fight back and challenge amazon. >> i wonder what the cost will be? it, everyone is

going to be pretty close to walmart, right? >> that is really the theme, somebody -- people realize. rivals what amazon has. >> coming up, hedge funds shorting the vix. what that means for markets ahead. this is bloomberg.

>> hedge funds shorting the vix at the rate we never seen. to tell us what this means, cofounder of q macro research confirmed focused on systemic trading. thank you for joining us. any long position is a de facto and kind of slams those

positions. what is it mean when you see other traders piling in? thatthink it is playing same trade. i think part of the reason is the market is not moving and you .re out of ideas if nothing is happening -- >> there are times when i look at a lot of these traders, but i wonder from a market stability perspective, we have seen the impact it will have. how do you differentiate yourself? is it possible to do that without being part of the crowd and make money?

>> i think there has to be some sort of strategy. that will impact trade. i think part of that is alternative data. ideas.enerates new >> when you say alternative data, what do you mean? >> there could be many things. example,e things for car counts. i have been hearing they have been doing that for years. i would think more focused towards the u.s. and european companies having that sort of alternative. >> how much of that is area of e-commerce? >> if you are looking at other

metrics, traffic could be another. obviously, they don't have car parts. you could look at other metrics like web traffic. signal,e pure price what is working right now? you hear a lot of traders moaning that a lot of strategy that has worked for years and years have not had a good run. >> i think the aspect is people in trying to gravitate and i would say the more niche strategies and the difficult is it takes more time and effort to come up with strategies. >> can you name any strategies that have gained traction? rebalancing has been

done quite often. i think that is out of the market, but there are also areas that you can look at for potentially gaining an edge. is -- always amazed on how much human effort goes on to this. initially, the whole point was to remove it to a certain extent , but i feel a lot of the human element still dominates. ultimately, you are making sure there will be more trade. i don't think they quite remove the human, they're just doing quite different things. ,> something we have seen andcy firms have set up they will hire a bunch of phd's.

say you want to do that, but what does it take for firm to say that is actually works? >> let's say you have a big .osition like omar or apple what types of questions do you want to know? the approach is never going to be to replicate it to. they need enhanced analytics. if you don't ask any questions, you will not get any feedback. >> what is the geographical breakdown? as you were talking about, new types of data, is a distinct? perhaps the europeans looking at car data.

inin general, you have more the u.s., but i think one area that could be beneficial is there is not much official data as well. areas is the obvious and anonymizeown credit card data. does that create risk for in the sense that the data becomes available, but everyone starts looking backwards and starts generating the same ideas simply because the data exists. >> i think that can happen. a lot of people looking at the same ideas. the issue, if you are not looking at it now, you could end up with an abrupt line. your kind of forcing it now whether you like it or not. q macro founder, thank you so

much for spending time with us. apple reports its second-quarter earnings tomorrow. i will be watching for the u.s.-china trade talks. >> don't miss this. gm reports his first quarter earnings before the bell -- its first-quarter earnings before the bell. >> have a great evening. this is bloomberg. ♪

ism emily chang and this bloomberg technology. coming up, how will politics shape tech into the presidential election? we will talk with senator blackburn on capitol hill will stop us come out of that first-quarter revenue missed estimates, but the company did point to strength in the cloud. uber's i