from the march dot plots. that is why it is critical. ont is why to mars present is so critical. hearing what jay powell says, in terms of what they expect and also to hear specifically about , we frequently talk about how inflation is so low that when he make the argument that fed policy is so restrictive and it needs to get more accommodative. said, we aret hearing the trump once quantitative easing as well as rate cuts. i am looking at the rebound in the market. that was up by 111 points. despite a significant selloff of alphabet shares. as luke pointed out, obviously we have tech behemoths flagging today and we are lower on the other indices for much of the day and they rebounded as well. a pretty impressive flat day. >> to put it into context, you

have financials leading the month of april, and consumer discretionary, key medication .ervices, fin tech caroline: s&p 500 at another record. let's dive in. >> i am taking a look at volatility, the lack of volatility. you see volatility across all the major asset classes continue to fall lower, particularly vix. fx volatility back down near the lows going back since 2014. none of this matters if you can't benefit from it. i want to look at net positions on the vix. macro risk advisors said the net short position -- they found no correlation between that and the s&p 500 returns. all-time lows, which is why you are seeing extreme moves to the downside.

don't fight the fed for volatility until it is coming. maybe a short on the vix is not coming anytime soon. president trump is weighing in on monetary policy again, this time ray in the middle of a fed meeting. he is suggesting a full percentage point reduction and quantitative easing, saying we could see major records and make the national bets look small. anyone who is hoping for a thath fed should realize we are not seen a lot of reasons to buy. a 1.6% gain in the s&p 500. 1.5%nnouncement saw a decline and the previous six days showed a decline in the stock market after the fed's announcement. >> aps of the market action with thewill be apple, iphone maker reporting its march quarter results today.

down 1.9%. the worst day in more than a month. investors perhaps nervous about this company that has cut its outlook twice over the last six months, without about missing its sales estimates. the reason investors could be concerned about those cuts, this goes back to 2018. look at the tremendous growth of this company. big numbers they were able to post on a year-over-year basis. for this march quarter, it is expected to be down 6%, almost $57.5 billion. the question will be whether or not they can hit that for the june quarter. 4:30,l know very soon at but with the major averages, apple is going to be a key market driver tomorrow. romaine: thanks, our entire markets team. bill get to apple in a second. quick breaking news, the company reporting first-quarter revenue above estimates. it is boosting the low end of its range for the fourth year on

both revenue and earnings per share. caroline: interesting that we're seeing that today. uber with us is christina -- kristina hooper. i want to get your take on how important the apple effect will be. this is a company that is no longer the most valuable in the u.s. >> they could reclaim that title. there is certainly excitement around technology, around innovation, and that includes companies like apple. overlooked to a certain extent the impact that the ipo market this year has had on excitement for the tech sector we have seen a lot of names that are very exciting come to market and a think that will provide some interest. joe: how significant is apple and the other faang stocks, especially on a day like this where it they can stumble in the

overall market? today was an anomaly, saw not sure what you can draw from it. this is the most has outperformed any of its constituents since the amazing facebook low up last year. we will never see another day like that again. but as important as we know margins are, that is the concern with apple. how much do they potentially have do some cost concessions to maybe gain market share and grow in china. that could be a bellwether or reset the tone on what has been a strong margin story. margins are the reason we're beating on earnings. romaine: when we talk about margins, we did see with some of these companies some of the margin growth was maybe a little more substantive than with other companies. when you look of those fundamentals from that perspective, what are you looking for these companies to do, rather than slashing across

the board? think it's important to understand where the rising costs are coming from for a lot of companies and what we heard in earnings season so far is that fx has been a big contributor to rising costs, but also we have seen labor costs going up and input costs going up. what we want to see is those companies that are not seeing any big acceleration in things like labor cost, input costs. some is easier to control than others, but i think one of the greatest vulnerabilities right now is a rise in labor cost. caroline: let's keep talking about earnings. $.65 versus $.61 was the estimate. revenue at 7.02, $7 billion on the nose. net revenues are declining 3.4%. they are blaming unfavorable currency impact. earnings-per-share was down 10%.

romaine: quick news on home depot, they are up lighting -- they are appointing a new cfo. he does not quite say where the old cfo is going. joe: on that note, thank you very much to kristina hooper. now, that does it for the closing bell. "what'd you miss?" is up next, where we will be watching apple. this is bloomberg. ♪

caroline: live from bloomberg's world of quarters in new york, i'm caroline hyde. here's a snapshot of how the stock market managed to grind up the day. the closed at another record. joe: the question is, "what'd you miss?" caroline: apple results are due this hour with investors looking for some cheer after a disappointing release. venezuela's uprising opposition leader called civilians to the pushts to support his for taking over the country. why allalyst explains the lights on the political dashboard are flashing red. about apple this evening. the tech giant set to release few minutes.n a apple rally remains in focus. let's peek ahead with what to expect.

they need to vindicate the rally we have seen so far. >> that is absolutely right. just a little history. in the beginning of january, apple said that it needed to readjust its holiday quarter forecast and since then, the stock has gone up significantly. how are they going to justify this? they will probably talk up their services game. the interesting thing is only one of the different services they launched in march is available. this is something you will see them talk about for months, until these services do launch. joe: something that is really striking as we have seen this huge rally in apple shares. around 40%. wall street is really skeptical and only half of the analysts have buy ratings. very low by apple standards. what are people excited about and what are people still skeptical about? side,on the investor

people are optimistic about this new approach to services. if you break down the potential revenue that apple can get from services, let's say someone subscribes to between $40 and $50 a month of apple services. after two years, though some us almostllars -- that is $1000. investors see a lack of optimism for big hits. apple is a big hits company. they want to see the iphone, iphone, ipad. thee is no indication that company's efforts are going to result in that. romaine: do you get any sense that there is a need within the company to come up with one of those big hits or they comfortable with moving into a different phase of the life of the company? the: i can tell you after forecast for the holiday quarter, there were very high-level meetings with the ceo

figuring out how is the company move forward for this? one of them was services. that is what you see the mishmash of different announcements that were too early back in march. they will need to bring up the hardware devices they have been working on and show both wall street and investors that they are still capable of ushering in big hits. the apple watch, even though it is the most successful product so far, it is not a revenue driver like the iphone. caroline: do you have any sense on china? mark: the china problem is interesting, because the geography that they blamed this whole thing on entirely, apple cannot and blames the iphone sales being higher for the company's problems. i never thought that was true. i think the problems go far beyond china and you see these services and the interesting

thing is barely any of these services work in china, so i found a disingenuous to promote services to the solution of a problem even though it is not even compatible. you see phone makers like one plus, huawei having big success. what apple will need to do is improve the lower-priced devices to get a stronger hold on that market. romaine: let you get back your desk as we on apple's earnings to arrive. all the details on venezuela coming up next. this is bloomberg. ♪

romaine: let's turn to the unrest in venezuela.

opposition leader juan guaido has declared the end of nicolas maduro's regime, calling for an uprising. nations around the world, including the u.s. have thrown support behind cueto. aido. a has -- behind gu maduro has claimed the military is loyalty him. let's break it down in regards to what is going on now? what is the situation in venezuela? >> the most recent thing we have seen is one of the long-running has justn leaders taken refuge in the chile and embassy in caracas. he was a very powerful figure in this movement since 2014. he was in jail many years, then in house arrest. to see him in the streets this morning was a striking image and i think the story will become what happens to him now that he is in the chile and embassy.

ae: of these they, there is debate about whether this should be called a coup or an uprising. regardless, it is still a question of whether cueto -- power.can gain the early hours are critical with these operations. as it stands now, what can we say about how this day has gone? >> that is another thing we will want to watch. it is true where these early hours definitely seem to be when there is a lot of momentum. 's strategy in the past is to wait things out and people will get tired and things go back to normal. that is all we are going to be watching. with thero does now dissident leader in the embassy. he may crackdown on anything else. or things make a back to normal. just looking at the images we saw earlier, even to see a

couple national guardsmen with that blue ribbon on their shoulder, protesting with opposition supporters, that seems very different. we don't know how much support guaido has in the military. it seems like it might be small. we are waiting to find out about that. the images we saw today did look a little different from what we are used to seeing. caroline: what we are used to seeing is the military continuing to back maduro, or the generals, and countries, the power behind what is happening in venezuela. russia and china are still behind the country. >> definitely. with what you have seen in the and with ambassador bolton senator marco rubio, they have been very active on twitter. you have seen marco rubio sending messages to high-level officials in the military. so far, they have expressed

support for maduro and that does not seem to changed on the surface. your guess is as good as mine. joe: thank you very much from miami. great perspective on what is going on in venezuela. for more on the growing unrest, let's welcome chief double political analyst, tina. what is your high-level thoughts here? could we see a real shift or is end like previous attempts to change the regime? tina: that is the right question, because it is really difficult for a revolution to succeed. more often than not, they end up being failed rebellions among whether we call it a coup for something else that leads to a transition. these pressures have been building for many years. we think about the pieces that formed the anatomy of such

a political transition, could have a what happens with the military is key. when the military crosses over and size of protesters, it is usually the critical juncture in any kind of successful political transition. i am thinking about the orange revolution in the ukraine, for example. the more high-level military defections we see, coupled with sitting -- stiff saint -- sustained protests will decide whether maduro can fight back. romaine: even if guaido were to assume power, venezuela has lost a lot of people, a lot of talent. is this a country that can rebuild itself back up to the status, whether it is the wealth and educational status, that they once had? tina: the opposition has never mounted the forced to overturn

the regime. it is hollowed out from a wealth perspective, from a braintree drain perspective, and everything else. of the lastne regimes in latin america to hold on to this model. it could follow the path of the others. a lot will depend on the nature of this transition if it transpires. as you have suggested, it could fizzle out and episodically reappear, but will we are looking at right now features we are the elements watching to see a real move. caroline: what are the ripple effects more globally on the back of venezuela? tina: i'm not sure that there is any kind of contagion effect politically, because venezuela is late to the party when it comes to a political transition. in that sense, it is one of the last few regimes of this description standing. caroline: hearing the u.s. saying please don't involve yourself to russia, how does it

affect the superpower relationships? tina: that depends on whether the u.s. are russia gets more overtly involved. if this happens and is a grassroots movement, then it has , but geopolitical impacts i think what is interesting on the wider point is you have a number of states recently, algeria, others, that are in the midst of some kind of managed transition or whatever this turns out to be. in terms of the wider geopolitical landscape, there are quite a few things to keep an eye on. joe: i am curious about the role social media plays in this. the day started off with guaido tweeting and showing the video of him on the ground flanked by soldiers. does that add to the volatility and the speed of how these things can unfold? unlike in previous revolutions, whatever you want to call them, that was not as much as a factor as we're seeing in 2019.

tina: we haven't got so many data points of uprisings in the social media era, but we can look at egypt for an example where the social media played a huge role in mobilizing large crowds. you can say the same thing about the protest in turkey. which happened in 2012. that accelerates nad gets people -- and gets people into the streets. it doesn't guarantee the ultimate success of the movement. romaine: one of the big trends we've seen in the rise of populism, your got elections in europe in may. how much attention should we be giving to the prospect that we could see that sort of brand of populism actually take control of the government? tina: there is a massive difference between latin american populism and advanced economy populism. i'm glad you asked that question. it is something i work on quite a lot.

what should we expect from the european parliamentary elections? right-wingn brand of populists are likely to do quite well. i have had many investors asking about this, but i have been talking to new york this week. of some kindears of populist takeover of the european parliament are overstated. yes, they will do better, but the european union is not going to break up as a result. political fragmentation, and by the way, i would put changes in the u.s. also in this kind of bucket, is going to stay with us and it appears to be impervious to economic growth. caroline: you mentioned the right wing. on the left wing, we had a fascinating conversation interviewing ken griffin in beverly hills earlier. he was basically saying the damaging effects of socialism -- it is a proponent for why

capitalism could work and help the u.s. problems. why is socialism such a toxic word in the united states when you see twist certain extent some socialist governments not doing too badly in terms of managing to steer the economy -- tina: because we use the term incorrectly. what we are talking about is european social welfare states, which are only a little bit more generous than the u.s. in that fact. we are not talking about state-controlled industries. we use the term socialism very loosely in the united states. joe: you are based in london and i have to ask -- one nice thing -- tina: no, no brexit. joe: i feel like we have gone a month. what is that coming back on the radar? they havething is started talking again, but many of us are still trying to ignore it. nothing much has happened.

more developments today from labor, reportedly storming out of discussions where this is supposed to be a big day for a confirmatory referendum as part of its manifesto. they haven't done that. prepare yourself for a prolonged period of brexit. joe: ignore a little longer. tina: i would not be surprised if we got an extension beyond the 31st, because parliament can't agree and the labour party doesn't want to put it to the people. caroline: the train wreck continues. great to have you with us. thank you. it's have a quick check on breaking news as alphabets former ceo is not seeking reelection to the board after we saw significant falls in alphabet shares today. amdine: we also got earnings out, they beat the first quarter with the second quarter guiding a little higher. joe: and coming up, apples

second-quarter earnings any moment now. stay with us. ♪

analysis from max. share price over hours -- after-hours reaction. >> it looks good. it was a solid quarter based on the numbers everyone was expecting. one thing i have been saying about apple is this is a bridge year to what i hope is going to be a much better year next year. they are setting up those easy comps with ok but not great iphone numbers, weakness in china. next year, hopefully be get the five g iphone and the comparisons grow easy. joe: apple boosting dividends to $.77 per share from $.73.

a will buy back at $73 billion of shares. the other thing they were talking about, the analyst community has been skeptical. there will be a lot of analysts who eventually have to capitulate. >> i think they will want to get in front of what i was just saying. this year is going to set up the potential for a good year as comps get easy. as we get into what could be a compelling new cycle with the ig based iphone. romaine: one thing we haven't mentioned -- we knew that was going to be down. how important is this earnings support? we are in a transition phase for this company. it is important to say the iphone business is huge. every time apple introduces a new iphone, it will be the biggest in the world. over the past few years, they

have been methodically adding new revenue streams. think about icloud. what was announced earlier. product, basically apple built this kind of amazing ecosystem in ios. all these companies started building businesses and apple is trying to get as big a piece of that revenue as it can. caroline: we want to highlight that a lot of companies are rallying as well. shares all rallying on the back of this. apple up. joe: ever since the iphone came out, people are like what is going to be the next big thing? ipads, watches? services is the thing that could be it. it feels like they may be getting traction, service sales surging 16%. is a getting to the point where this is like a real other source of revenue?

>> absolutely. when you look at what this means for other companies, including facebook, snap, these companies that have built sizable businesses, i don't big it would be surprising to see apple trying to do the amazon thing, where you try to slide into adjacent businesses and grow horizontally. romaine: i know this is a small part in their businesses, but when you look at wearables and accessories, that did rise to $5.1 billion. is where i think they have the most opportunity. if you look at what is happening in medical equipment, whether it is insulin pumps or hearing aids are two examples where i look at it and say why is apple not in this business? there is a lot of ai getting infused into these businesses, but if you look at how well they

are doing in the other products division, it is all about the air pods and particularly the watch. they have done a great job selling the watch for fitness and health applications, which tome, gives them an avenue get into more danced medical devices. caroline: what about the future of the iphone? apple is currently shouting -- if you look at the blog on the bloomberg, the strongest i've had growth in six years. have had a strongest -- they are ready strategy shift. they are new, cheaper, mid range. is this ever something we would see them do with the iphone? >> one thing i've ever felt about apple is at its core, it really is a smart phone company and i think as a strategy, diversifying the product line or putting better product line extensions make all the sense in the world. frankly, i don't think they are doing enough of it. they are really protecting the brand and sitting in the premium

segment, so the only place to go is down market of it. they pulled the se from the market for that reason. i have to admit, i don't totally understand where apple fits in in terms of streaming. they had an announcement about it. when disney announced their thing, everyone was like, ok, there is a clear idea of how this will compete with netflix. where does apple fit? >> i don't think anybody totally understands it. had a lot of famous people, but it was unclear how it added up. i guess if you are trying to put yourself in apple's shoes, they're going to develop original content that you can only get inside of apple tv, this box that you can buy for like 150 bucks or something. fee tol pay a monthly access that and once you are there, you're going to buy all your other channels three apple. now apple is the main broker for

entertainment content. now they are slowly edging out youtube tv, comcast, the big cable companies. romaine: when we look at their cash level, they are still sitting on $30 billion, down from one year ago. billion, that is down from one year ago. why is apple trying to do so much internally rather than deploy that cash? >> that is a great question. the only thing i will say in their defense is a lot of acquisitions, particularly in tech, and of failing. i think there is that -- end up failing. i think there is that concern that, we can go out and buy, but trying to integrate their culture is a risk. we have the money, the engineers, why don't we just told it in-house? what you give up when you pursue

the strategy is time to market. at this point, i am in favor of them buying versus building. romaine: we will dig a little deeper in this later in the show. apple shares up higher after hours, above $200 a share. with us.max will stick more on apple next. this is bloomberg. ♪

romaine: we are back in two it apple earnings. the headline number here coming in at about $58 billion. billion was for services. guidance for the third quarter saying it will be about $52.5

billion. caroline: highest services number in apple's history. talking about where the growth will come from. let's bring back our senior analyst and businessweek columnist max. i'm interested in the lack of clarity in the company's payment to qualcomm. there was a sense of relief that the litigation is off the agenda when it comes to qualcomm and apple. are we expecting anything? do you need to know more about what the payment was about or is it just about the future and 5g? >> if i were apple, it is all about suddenly having a clear path to five g. they were struggling with the intel relationship in the sense that intel was behind the curve, behind qualcomm in terms of its develop and of a 5g modem. designing those chips is

happening now. apple had to have been getting nervous about that. here,nother stat accessories were the third highest in apple's history. speaking of the air pods, i have started counting every time i am on the subway how many people i notice are wearing them. they are everywhere. >> in my mind i would see people -- you see them, people are leaving them in and everyone talks about the watch being this wearable, think you could make the argument that with the air , doingoupled with voice the things that amazon has been doing with alexa and doing them with air pods. caroline: i have a google phone, but the air pods and it works seamlessly. romaine: i just love that the iphone moved to samsung. caroline: have you feel about that? romaine: that does bring an

issue. i remember a few years ago, it seems like there was no alternative if you wanted a high-quality, stylish phone that would impress your friends. samsung has made a lot of inroads with the galaxy lineup and to a certain extent, the pixel and google. how much does apple need to be worried? they are touting their installed base of 1.4 million users. is there a risk that could go down? >> i have covered a lot of markets as an analyst and have never seen one as brutal as the handset market. look at nokia for example. research in motion. apple constantly needs to be on guard in my view. it really can change on a time. the one advantage they have, which you alluded to his they have this great ecosystem, this great install base. i'm a great example. if i want to switch at this point, i would be walking away from all this content, movies, books, texting history, apple

pay and how addicted to that people become. he sort of have that lock in affect that really works in apple's favor and it has the effect of keeping people on that upgrade treadmill, so they get upgrades every three years now on average. caroline: my husband will stick to an apple fun because he has still got a mac. i'm looking at mac numbers and they start to decrease coming in at $5.5 billion, down from one quarter ago. is this an issue or is it about having to give the new updated macs? >> people just are not buying pcs in the numbers they used to. as applea tension, pushes harder on services, it gets harder to maintain hardware supremacy. with i message, one way to grow the use of a's to open up to

android. that could generate a lot of advertising revenue, could be great for apple's services. then, you have one fewer reason to buy an iphone. the iphone starts to look closer to a galaxy. joe: a call coming up, what is the main thing you will be listening for? >> i will be listening to how services are trending. my biggest concern for apple, the biggest risk is a lot of services are getting old and they are tied to iphone sales. when you think about icloud or applecare, they have been around for years and years, and so the denominator gets big, so growth from thatured standpoint. in terms of the number of new people coming into the ecosystem, that is on the decline. on the margin is slowing and i want to hear from them what they plan to do to

keep it growing double digits. bloomberg intelligence senior analyst john butler and is this week columnist, both digesting the beat across the board. for me as i will be stepping up to host "bloomberg technology." we will be talking more about apple, but also facebook. coming up next on "what'd you miss?", we'll here on the chief restructuring. this is bloomberg. ♪ ♪

romaine: continuing our coverage of the milken institute global conference. i'm here with a managing partner at m3 and his most recent assignment was as chief restructuring officer at sears. it is good to see you. >> good to be here. >> retail is a good place to start our conversation.

you have seen the highs and lows of retail. what are the prospects of that industry? >> retail is going through a challenging time. to say the least. i think there is much more to come. issue isnk the core for retailers to find a place to be relevant going forward. and to be a generalist retailer is no longer viable with the advent of technology, e-commerce and changing consumers. >> i want you to take a policy position. it should amazon be broken up? -- should amazon be broken up? >> i'm not sure i am disqualified. >> you know what it mean for the retail industry. if amazon were to be separated from its third-party business, with that breathe new life into the legacy retail? >> i offer competition.

i do not know that personally i am a believer in reviving old business models through clamping down on new ones. i hope there is competition for amazon. i would like it to be the right way. >> a darwinian struggle for survival. what about sears? can sears survive? ,> sears is a fascinating cherished brand and an american company, which i was -- in going through the restructuring, it the nation kind of wanted it to survive. having said that, not enough people go there right now. it needs to have a merchandising model that makes it relevant again. it needs a brand where people

will go there again. i am not sure those two things have yet been fixed. it certainly has the potential of getting there, but it is a tough spot. >> does the emphasis on selling hard goods make sense as a merchandising model? >> i believe so. i think that is one of the core brands kenmore and other appliance brands are really what sears is most affiliated with in consumers' minds. going forward, it may be through smaller stores and other formats , but the management team going forward really needs to figure out a reason for being. >> leadership is still a question. how do you get capable people to a strugglingun legacy retailer, whether it is sears or any other? >> i have had exposure to a bunch of different retail

companies. it is a huge challenge. attracting the right talent to the retail sector. >> most people see nothing but downside and if they take the job and get paid well, they get nothing but criticism. >> i think that is one of the challenges. i think the new ownership needs to figure out some way to attract talented management. >> at the very least, sears has a new lease on life. let's talk about toys "r" us. what is the most valuable lesson out of that bankruptcy? >> i was a board member of toys toys was think probably an example of a company which, at least in my view, has the right technology investment -- had the right technology investment been made earlier could have survived, but it was too late.

in terms of the restructuring process, what i can tell you is that it was really targeted by its competitors, mainly walmart and amazon, who really went after it and literally took it out of business, in my opinion. >> that is darwinian. i have a feeling that the toys "r" us brand will come back and reemerge in some way, shape or form, but it will have to be done in a way where it can deliver e-commerce and and on the channel -- omnichannel process. anwe are 10 years into economic expansion. how long until we see the distress cycle? >> i spent some time recently with a very smart special situation with distressed investors. when of the most accomplished guys in the business. he put it -- we're in the eighth

inning of the cycle. the only question is he is not sure whether it will be a 13 or 14 or 15 inning game. i perspective, from what i'm seeing, is that i think we are getting pretty far along in the credit cycle. we're definitely starting to see some of the weaker companies no longer being able to attract financing and investment. surprised if, in the next couple years, we see a restructuring cycle. >> things will play out different way this time, aren't are asecause the terms week if not weaker than they have ever been. it takes a lot of power at the hands of creditors. >> it does. if you want -- we were recently looking at a retailer which is struggling massively, losing a

lot of money, a midmarket retailer, a public company. the creditors are very unhappy. the company is losing a lot of money, but they just have no trigger in terms of being able to stop them. the influx ofith covenant light loans, you will see more of that being an issue. >> is that -- from your perspective -- is that healthy or not for financial markets and even capitalism? look, i am a little bit biased here, because i am a restructure guy. keep that in mind. i was reading something recently which was comparing how and what the debt markets look like 15 years ago in the 2001-2003 recession

versus now, and the ability for lenders to have covenants was a huge trigger to fixing companies early enough. athink the big risk you run this stage is equity holders and sponsors in particular are more likely to take advantage of the times and many a time not fix the company, which will result in them going out of business. >> thank you very much. great to see you. managing partner at m3, his most recent assignment, sears. back to you in new york city. romaine: thank you. don't miss this -- tamara, the fed announcing its rate decision. fed chair powell will hold a news conference afterwards. tune into our special coverage. the u.s. attorney

general william barr to testify before the senate tomorrow, expected to discuss russian interference. does offer "what'd you miss?" bloomberg technology is up next in the u.s.. joe: have a great evening. this is bloomberg. ♪

. i'm caroline hyde in new york. this is "bloomberg technology." bet on services seems to be paying off. facebook put its best foot forward. the social network shifts its emphasis to private communication. we will speak to the vice president of facebook messenger.