the andy jassy effect, he pulled it out of the bag. what for you is the biggest way? to any one particular thing. everything was firing on all pistons. if we go back to the first quarter, analysts were worried because they had at the time cloud sales continuing to decelerate and they saw softness. a big take away from this print is investors expect this is at the bottom of the trough and they will come back. the other thing is on the e-commerce business, we are seeing benefits of a cost-cutting that andy jassy has been doing. they laid off about 27,000 corporate employees, they have had these kind of a spare mental projects that are seen as not yielding returns anytime soon. so i think that the print, which had a beat on profits for the second quarter and expectation to beat -- the street was looking for in the current quarter, just shows those things are paying off and jesse is bringing a sense of discipline, whereas his predecessor, jeff reseau's, ran amazon is almost like avc funk, lots of scattered projects going on at any time to see what would rise. and jesse ha

andy jassy is not the same as jeff bezos and they are not in the same era. the story in the pandemic was throw money at getting packages to people as quickly as possible. andy jassy has unwound that endless spending but still focused on the strategy side of it that is what is paying off now. kathleen: ed ludlow bringing us the amazon and apple results. ahead of those earnings, u.s. stocks ended slightly lower as the treasury route continued. let's get more details from alexandra some anova. kind of a mixed bag for these very important companies. >> we already had a skittish last few days amid turbulence of the bond market and now the focus is on these big tech results. the bar was incredibly high for them going into results because of the incredible run we had in technology shares this year and the picture was very mixed. apple missed estimates and investors took that as a sign of a broader slump in iphone sales which of course is a sign perhaps consumers are still being weighed down by higher interest rates and still stubborn inflation. this is a sign apple

the company history and citing confidence in the biggest ever amazon prime day they have had ceo andy jassy sounding upbeat on the outlook for aws, web services and cloud computing last night he said the revenue was stabilizing. let's bring in our analyst at cfra amazon topped the estimates on nearly every count this was, in many ways, unexpected how could they do it so well >> dom, thanks for having me it was a standout quarter. i think all of the pieces are starting to fall into place for amazon on the ecommerce side, you saw improvement in profitability in advertising, you saw that grow at a 20% clip aws growth was 12% which was above the 10% estimate i think more importantly, amazon said aws is starting to stabilize. there is potential for acceleration for the second half of the year. all of the pieces are moving into place for amazon. >> amazon is critical to the overall market narrative, but also it performed really well. it is not anywhere near what some of the mega-cap peers have done with the downfall last year is this enough to get us back toward what apple is seeing in terms of s

andy jassy speaking on yesterday's earnings call. tech has been on a tear this year. nasdaq 100 is up 40% so far, so couldn't discontinue to hold? amazon may be would suggest yes with an 11% move higher today, but let's get some insight into this. our capital partners joining us. as i suggested, we've come really far, fairly quickly. we are going even further now in the case of amazon. is it warranted? >> i think so. if you remember, it is hard to remember last december because the market just cap falling and falling, and maybe we've blanked that out. part of the reason why a lot of tech companies have rebounded, and may, even eclipse there value from last year, is because we sold off so hard at the end of last year. january, they had a buying, but now, here we sit, and a middle of the third quarter, things are still going strong, and we ask ourselves why. and i think it's because of future demand. we are always buying into the future, regardless of what stock we are buying. tech really is all about the future. i think ai is a big theme. the infrastructure needed for

have a listen to what andy jassy talked about, about efficiencies. >> we still see several ways in whichin the structure and we believe we'll improve productivity further. we've also reevaluated virtually every part of our fulfillment network this past year and see additional structural changes to make to provide future upside. >> reevaluated virtually every part of their fulfillment network. that is a gigantic undertaking for a company as large for fulfillment network as large as amazon and as a bonus, you talked about this with dan ives, aws the growth rate stabilizing what investors wanted to see because this is the profit engine of the company. >> yeah. and i feel like aws always gets attention every quarter for amazon because it is so profitable, but the e-commerce the strength that we saw in that unit to your point and what that means in terms of the contribution to an operating income for the current quarter, with the guidance that is better than the street expectations too, is incredibly notable the other thing that got my attention was advising it's continuing to fire on all cyl

. >>> another big departure under andy jassy the latest top executive getting set to walk an tthrough exit doors at amazon. it is tuesday, august 15th, 2023 you are watching "worldwide exchange" here on cnbc >>> welcome back to "worldwide exchange." i'm dominic chu in for frank holland on tuesday morning let's pick up with the u.s. equity futures which are off dow implied lower by 170 on the down side. s&p 500 lower by 17 points nasdaq lower by 45 if these moves hold into cash tradings at 9:30 a.m this was the driving force into the sentiment so far we had china central bank cutting the interest rate on two or three key parts of the sho shorter-to-medium side of the lending market that implying that the economy does need more propping up the second biggest economy right now. you see the nikkei in japan up .50%. hang seng is up 1% in trading. the shanghai and south korean kospi showing signs of red the asian markets are carrying into european trading. the dax off .75% cac 40 in france similar to the downside 1.25% for the ftse 100 in the uk ftse mib is up .50%. ibex in spain is down .2

the web services division posted the sixth slowest quarter of sales growth, but andy jassy remains bullishn the division and the growth figure is still at double digits a lot of earnings to unpack with arjun joining us at the desk arjun, i'll start off with the go with apple. were we really expecting too much here? june is periodically seen as a period that is very slow for apple because of the run-up to the new phone or new device. should we have seen this coming? it wasn't going to be blockbuster earnings >> it wasn't high expectations for the quarter for apple, but they needed to show stability. that is where it got murky the revenue was down they needed to meet expectation. they found that difficult. mac and ipad specifically. and the company doesn't issue forward guidance, but they expect revenue to fall again in september. the outlook wasn't quite rosy. we have been talking about recovery for certain sectors in the second half. it seems like consumer electronics with a set of uncertainty with smartphones or pcs and that is feeding through to apple we see that feed through from the ch

quarterly earnings, there were some concerns about people shopping less because of inflation, but ceo andy jassycus on increasing delivery speeds and keeping a lid on the company's costs seemed to pay dividends. its tv showjury duty made emmy history by becoming the first ad—based video—on—demand show to get nominated, while sales of its all—important aws unit, which houses its cloud business, rose i2%. following strong performances by the likes of rivals meta and microsoft in this category, this really was a case of the tide lifting all boats. but it also shows that amazon's cloud business is still the king of thejungle, the dominant player, both for the whole industry and also internally. it accounts for 70% of amazon's operating profit this quarter. as for wall street's current obsession with all things ai, well, amazon said it was continuing to develop new technologies to help customers take advantage of generative ai. take a step back and these numbers show that amazon, along with the other big names in tech, are starting to bounce back after a tough 2022. michelle fleury reporting there. i

ed: what is andy jassy's attitude towards the grocery business? you reported he looked at other units like prime video in simple let's get this under control. what we know about how he views the grocery opportunity? matt: since jeff bezos first nudged amazon toward grocery 15 to 20 years ago, the rest has been the kind of the same for amazon. grocery shops, most frequent purchase that people make and we need to be there if we are going to be a large, glow-struggling retailer. amazon has a tight business but we heard andy jassy make similar comments. we think we have something to say there and are committed for the long term. he did make a pretty big tap on the brakes about this time a year ago when they stopped expanding. amazon fresh stores taking a hard look at whether the grocery strategy was the right one. they think they are there but i guess we will see. ed: matt day, check out his peace in the businessweek about the big amazon grocery reset. coming up, amd topping quarter estimates and touting inroads into artificial intelligence. we will d

a ton of people from amazon into logistics and warehouses that said you know amazon ceo is now andy jassy longtime amazonian and and you know i have some reporting in the book where he looks at wal-mart and he thinks they're sort of, you know, in some ways as big and big and bad as amazon and he can understand he's talking to his internal why is the government not focused their scrutiny on walmart they're you know they have more revenue than us they have more physical market share than us. and so there there is that point and begrudging respect. but, you know, there's also this this this real thing that are they are still a core enemy of ours. and not understanding why they don't get no longer get the level of scrutiny that amazon's now facing. yeah. so maybe we move on to amazon's side of the story and i really liked your intro where you talk about your brief encounter with jeff bezos and you know, you ask about his outfit, his answer was very interesting that, you know, it kind of captures what amazon is trying to do in the retail world, basically applying new on, you know, in a very ol

but ceo andy jassy is focused on increasing delivery speeds and keeping a lid on the company's costsshowjury duty made history by becoming the first ad—based video on demand show to get nominated, while sales at its all important aws unit, which houses its cloud business, rose 12% following strong performances by the likes of rivals meta and microsoft in this category. this really was a case of the tide lifting all boats, but it also shows that amazon's cloud business is still the king of the jungle, the dominant player, both for the whole industry and also internally. it accounts for 70% of amazon's operating profit this quarter. as for wall street's current obsession with all things ai, well, amazon said it was continuing to develop new technologies to help customers take advantage of generative ai. take a step back, and these numbers show that amazon, along with the other big names in tech, are starting to bounce back after a tough 2022. to the world of advertising now, and another set of results fundamentally linked to the tech world. the world's biggest ad firm — wpp — have down

the way andy jassy described it was in the first few footsteps of what he thought would be a marathon let's have a look at some breaking news. the aussie against what is going on with the rnb. china had anti-policies on australian barley, but as of the fifth of august, those tariffs are being scrapped. energy stocks, the oil price continues to say high. these represent a six weekly game. saudi arabia suggesting they could extend and deepen the cuts. this is bloomberg. ♪ rishaad: china is gone for its lunch break. stocks trimming some of the earlier gains. the lack of any major announcements as far as regulators go. no real substance out there at the moment. the lack of that has taken these benchmarks off the highs of the day. csi three is actually --. also, we had the hang seng up by about nearly 3%. now 1.3% up. telecom and financials still represent the best performing sub industries. the pboc says they will be supporting banks. haslinda: the nikkei 225 swinging between gains and losses, but the focus is on the job stayed out of the u.s. it is expected to remain resilient. 200,000 t

. >>> amazon ceo andy jassy has a message to workers who don't want to return to the office. it's not going to work out for you. that's according to the report from insider which said andy jassy made the statement during meetings earlier this month. in a record of the meeting, andy jassy said the decision to have employees rushs return to the o was a judgment call. if they want to leave, they can. what is your data for making the decision? he said no data. my way or the highway. >> my data is called ceo. >> right. >>> separately, amazon increased the minimum order to $35 for shipping for shoppers in markets who don't subscribe to prime. that had been $25 to this point. prime members will see no change. a spokes persons said we evaluate and make adjustments on the assessments. the $35 minimum matches walmart for shoppers who are not part of the walmart plus loyalty program. amazon prime. >> raising prices for free service means how many value. >> they raise the price of prime, too. it used to be $99. >> price for free. >> it is worth it. there is a lot of stuff. >>> yesterday,

that's the story of amazon andy jassy wants to do that. down costs and drive down the delivery times and take a lot of market share. we think they will do it we will think walmart will do it it is a problem for a lot of people >> all right scott mushkin, thank you very much see you soon >>> coming up on the show, the bank of england is set to release the latest policy decision in less than two hours from now joumanna bercetche has a preview and why the street is stil split on what to expect out of the boe. >>> welcome back to "worldwide exchange." time for the morning call sheet. citi is downgrading roku from neutral to buy it believes this is priced into the market roku shares down p1.5% >>> deutsche bank is downgrading qualcomm to hold the bank said the slowdown could lead to questions rather than just cyclical ones qualcomm down 9% >>> and b is downgrading etsy. bernstein was hoping to return to growth, but does not feel reassured. bernstein says it is hard to add to growth and reaccelerating etsy shares down 9% as well. >>> time now fo

and i think andy jassy, the current ceo there for a long time.inflection point year with the layoffs. and morales. not great inside that company, so i think the next 6 to 12 months will be very important to see what this company looks like. under a new leader, you know, you've got a good sense early on and looking at this stage covering this beat for what a decade decade, right? um that one or the other was going to survive. both are thriving, presumably for the time being. you see that continuing i think walmart finally figured out how to use their super centers for online retailing. this pickup business is huge. i think their delivery business you know, is getting their business grew in this latest period. 25% that's right , and now we see them chasing some of the prophet engines of amazon, especially the advertising business, one that is generating now 40 billion a year for amazon, much smaller at walmart, but they're trying to imitate them. in some ways. you know what we haven't seen yet fully, is them trying to sort of lead in a new way? tha

andy jassy coming in for jeff bezos, says i need to look at these other businesses and rein them in abit. guy: there has been a perception that technology industry is now dominated by ai and is therefore less rate sensitive. are we seeing that. being tested here, how much more can it be tested? ed: the thing about those that have reported already, alphabet, microsoft, meta, it was their core legacy businesses the market traded on. in alphabet andmeta's case, advertising. apple has shown complete restraint. mark gurman has reported that they are working on a generative ai tool internally. but just based on the precedent of the last two weeks, the market is listening to the ai hype on the call but trading on the legacy businesses. for apple it is the iphone. amazon went in a different direction, leaning into aws. what can we sell to our existing clout customers, what can we offer so they can take advantage of our own large language models, or third parties that we partner with and have a ready to go enterprise focus offering. the next question is are they making any money off of it, whe

andy jassy was one of the main architects and pioneered cloud and created the categories that gave amazoneryone else. they are growing at quicker clips and cloud will play a key role in the shift. investors are anxious tonight to know whether aws growth has bottomed, whether it's settling or if it could have lower. amazon has touted tools and products, but is it going to be enough when microsoft and google have made more splashy announcements. something that may be a good signal was the microsoft numbers. it is critical as a profit engine but especially tonight, this quarter more than ever, that aws number. >> do you think we'll hear a lot of commentary about ai given all of the progress playoffs has made in the space? >> they've been doing that in a different way. google has bard. amazon as more tools behind the scenes in its cloud. customers can use open or closed source one thing they like to say the chief of aws said to me not long ago this is a longer race, and we're three steps into it. it's still very, very early days >> finally, dee, we did pay some attention to reports of further

remember, there was that interview with andy jassy where they were saying, you seem late toll the party he said, you know what we're in inning two, very early, so -- i'm going to give them the benefit of the doubt it's not cheap i'm long, i'm staying long even -- i don't love going against carter, but it's just funny to me, the $53 billion part of the business is, you know, a nice little part of the story, it was better, but -- not so relevant, which is kind of amazing to how extraordinary it is >> you are with carter >> long amazon >> long amazon >> court, what did you make of the quarter? >> yeah, this is very impressive, after microsoft warned of a slowdown in the computing business it's very impressive i agree with dan, i wouldn't be chasing these things i think this is fantastic, trading up for very good reason, because it is beating expectations, but it is very expensive. the good news is, it is a very high portion of the s&p 500, so, when apple and amazon do well, you are going to see the overall markets do well. i wouldn't be chasing it here. >> for more, let's bring in "fast mo

going to see the stock fall off a cliff >> just the last quarter, maybe it was an interview with andy jassywere being rational as their spend they have have pixie dust of a.i., but that enterprise consumers pulling back a little bit, or really examining how they spend on cloud in general and then you have the consumer potentially showing some tradedown -- >> yeah, well, though the a.i. works both ways, right they're spending, they're spending, and i do think that there is spending to be had on aws cloud. i also, i mean, you know, they do -- i think feel like we're a little behind in terms of the sentiment around, you know, who -- who is the leader, but he didn't really seem to care and this is, like, the second inning, at most, and so, they obviously only look at the long-term, and this is a company that really does not care about their stock. >> right, sure the options market, though, is feeling optimistic we're breaking down the action chris? >> hey, yeah, you know, so, for amazon, the about ppetite remaio the short money calls. we saw a lot of activity in the amazon 140 calls expiring th

third, you know, i really thought the ceo andy jassy laid down the hammer of a.i. and generative a.i. strategy people viewed amazon as a laggard after chatgpt and open a.i. i thought amazon's ceo put on the -- put out a stronger case and why they are well positioned last night. >> i want to take this piece by piece. let's talk about the consumer facing business. amazon.com where you order all that stuff how is that part of the business doing? >> yeah. generally speaking, it is doing great. the third-party marketplace beat estimates last night i think in line with the other consumer reports through the earnings season, the consumer is proving resilient. in amazon's case, they talked a lot about putting more essentials and staple goods where people are tight ening th budget in cases and wanting faster delivery. they are doing well there. they worked on the cost structure and tightened the fulfillment and they are making money finally. the whole thing, years and years, amazon can't make money, but they are making money now. >> do we walk away thinking the consumer is

i'm interested to hear where andy jassy sees opportunity to take market share, and also where the longer term picture is for a.i. as it relates to aws. >> and, steph, you would think, just in a really big picture way, the number of digital interactions amazon has with customers, the number of transactions, the preferences that the volume of data that the company sits on, you would think that if those -- that's the raw material for a.i. progress. >> sure. >> they have a lot to do here. market seems to feel like, well, they're kind of a logistics company and they're spending a lot to deliver people stuff the next day and not taking much of a margin off of it. >> not the a.i. play, right? it is, i don't think it gets at the respect like to your point aws, if they grow 10% this quarter, the second half comparisons get much easier. and that's why it is going to be all the more important for the company to also not only talk about easy comps, but generative a.i. and what it can do to see that acceleration, like mark was just talking about 10% is not really exciting i do think they're taking sh

that's a really important part of the story and it goes hand in hand with the andy jassy story who replaces jeff bezos and puts in an era of cost discipline. it's 50 but -- $50 billion down from $59 billion. there's a hiring freeze in place. that's allows them to web the storm. the consumer is being impacted by inflation particularly in north america. i hort -- i heard you guys allude to it, the cloud unit, which accounts for most of operating income, is stabilize, even at a time when its peers are seeing growth slowdown. haidi: when it comes to consumers being impacted, apple is clearly not immune to the industrywide slowdown. was this surprising that investors focus on that over the services numbers? >> clearly investors were not entirely pleased with the apple earnings report. one element to look at was they were expecting a similar decline in the current quarter, the fourth quarter with the new iphones are to go on sale, while you will see an acceleration on the phones and services side, you will see a big deceleration that will probably lead to a 1% overall decline yet again. kathleen:

. >>> amazon's chief andy jassy has a message to workers who do not want to return to the office.s not going to work out for you. that's according to a report from an insider. his basic take, it's past the point of disagreeing. we're coming in at least three days a week. >> over time that he amped up the rhetoric or the threats. if it's not part of your lifestyle it's not part of this company. we have talked for some time about whether we would see some of the large employers start to gain more leverage or come to a point they felt this was key in terms of running their business. we're at that point it would seem. we're not talking about every day. more likely two to three days a week. >> yeah. >> carl, you mentioned that goldman sachs study. what i loved about it, it references estimates of the productivity of work from home that range from a 19% draw down on productivity to 13% enhancement of productivity. nobody has any idea. >> nobody has any idea still. >> depends on how you measure it and what you're considering. if you're the employer you want the accountability. >> it's th

. >> andy jassy, giant fan, good luck. >> it is an issue. we talked about it a lot this year.here is a new effort apparently to combat some of these group thefts that are potentially a part of organized crime. >> one of the things that's incredible is when you go to home depot on amazon, they have a house link and you can get everything. they don't put their house brand on amazon. it's all organized crime. can you imagine that? what does congress do about it? nothing. now, when i asked the register people after a major breakout i saw on mission street in san francisco, how could you let those people go right by you, they said, we're not police people. home depot had two homicides. home depot lost people because of this. this stuff is a federal issue. it is not anything that we can handle other than the way that tjx handles it. >> meantime, the line at macy's, we experienced an increased rate of delinquencies, the speed with which this occurred is faster than planned. we're working closely with our partner citi to mitigate the bad debts by underwriting strategies. >> i didn't l