she seems to be explaining her some of the cost increase came, and 80% jump in capex.g r&d, headcount and marketing were responsible for that. saying the rising cost driven primarily by youtube content and expenses came from hiring, mostly for the cloud business. shares moving lower, still down 2.3% in after-hours trading. this is bloomberg. ♪ caroline: a quick check on the latest business flash headlines. startup company plans to go public. it could sell it shares to bidders in a direct listing. buy maxwellreed to technologies in stock. it's paying a 55% premium. the deal will give tesla or expertise in capacitors that could speed up the charging process of the car. that's your business flash update. meanwhile, a phenomenal story we have all been looking at in around the results -- the death of the founder. digital while it to have been lost after he died in december. he took sole responsibility for handling crypto customers. in exports brought into hack it has had little success. this is going to be a movie. joe: on the one hand, it shows the risk, of one guy knowing

capex growing at a sizable clip. the primary driver continues to be investing in technical infrastructure to support growth, data centers and machines. this reflects our outlook for global growth in ad, search, youtube, and cloud. sort of echoing, crawford, what you suggested there. but paul, investors are concerned about it. paul: i think they are in the short-term. the market has generally given ruth porat very, very high grades for coming in and really instilling a sense of more certainty as it relates to both their operating expenses and their capex, so, a certain level of discipline. the three areas where they are investing are very high growth areas, including youtube. internet ad spending on video is the fastest part of internet ad spending. clearly is a -- google is a leader there, along with youtube. when you combine that with the cloud, another extremely fast-growing end user business, i think longer-term, most google investors feel very comfortable with google's p&l and capital spending. emily: now, there

spree, which is not the case the cfo made it clear on the call that capex in 2019 were moderate fromhe levels we saw in 2018. overall good growth. revenues beat. eps beat they still beat the company is buying back stock. if you look at the expenses with moderate in 2018, advertising is strong youtube is strong. strong growth, hardware, other bets who are excited about way more on how that develops this year >> you know, in the premarket victor, the stock is down $32. that's 3%. it's an over $1,000 stock. is that an overreaction by investors? >> well, i'm not sure if it's an overreaction whenever you have the word investments for all of these companies, whether it's amazon, google, you saw the same thing with facebook with the operating margin guidance when they did that you know, that tends to spook investors somewhat you are unsure about the return of investments at that point in time these investments tepid to prove themselves over time, but there's some hesitation on the part of investors in terms of the risk assigned to it. >> i understand that a lot of new advertisers came in to

, capex spending, they're going to be spending more.g to eat in the revenues because they have to n invest more. whether it's on facebook having to invest for for data privacy concerns, hiring new data scientists, alga rhythms, whether it's on the back of investing more and e-marketing efforts, digital efforts as elizabeth just said to us, alphabet have earmarked $100 billion for their e-marketing efforts. there is capex expenditure coming left, right, and center, and at the end of the day these earnings still are pretty strong, and which is one of the reasons why year-to-date we have seen a bit of a rebound in the tech sector. perhaps not back to where we were as some of the highs of last year, but the earnings numbers are still there. i would just say from a conte contextual standpoint, like further regulation, like increased competition space, like anti-trust issues, none of those are going to go away when you are buying into this story, you are not just looking at the earnings, unfortunately you are also taking into consideration th

we are seeing reduced capex for 2019 as opposed to 2018, focusing in highly productive areas and noto much about growing volumes just to grow them. alix: that raises the question, how much of the light, sweet crude can the u.s. and the rest of the world absorb? ashley: that is ago is that the question. that's what we saw with the last price crash in december, the macroeconomics of the picture. we are getting good news but we are in a data desert still, it's only february. the information we getting on the autonomy side is very middle-of-the-road. good numbers in the u.s., and then weak numbers out of germany. right now, our expectations is that the world cannot absorb it. we have outages in venezuela, disruptions in libya, nigeria. there is a world in which we are still mostly balanced through the end of the year, but it is a rising concern and is driving a lot of price volatility. alix: the key is the type of quality. it is lighter here, versus venezuela in canada. that will be heavier crude. on a differential basis, can we absorb the light, sweet crude? ashley: we can and we have d

capex is a function of data center investment. and you're right numbers are a little nuts.7 to 13, 14 billion, more than doubled cap ex. it will increase 20 billion this year, it is data centers driving -- really a reflex of strong revenue results these companies are putting out strong usage growth, strong revenue growth and building. zuckerberg is trying to change the narrative on the earnings call away from we're still focused on safety and security, but we have to get back to business, back focused on product innovation, playing offense. internally they have been doing that the whole time. that's what's driving investments in the capex data center, support virtual reality and video. they're continuing to invest they feel optimistic about the outlook of business. that's what's driving the capital investments. >> about the regulatory overhang, i can make the argument that a lot of companies have gotten ahead of it. facebook is rolling out tools that are gdpr connected beyond europe so whatever the u.s. does, hardly anybody is arguing it will be going further than europe ha

we had one of the biggest capex bubbles in history, possibly rivalry the size of the railroad bubbledn't end well for anyone, either nobody benefited by that so i would argue that moderation is good. there's a place for dividends, place for buybacks, place for capex, place for wage hikes for workers. we'll probably never agree on the right balance. >> we have about 45 seconds left, that means it's time for final trade. pete najarian? >> i'll go with on, the stock an rocketing, rocketing, rocketing, they're buying more upside calls. stick with this. >> capri, this jimmy choo and michael kors bought it for unusual activity >> last wednesday was the announcement that bob swan was taking over ceo has quietly outperformed the market. >> you think there's a little momentum >> i do. >> sticking with alphabet. goog >> another semiconductor, nxpi got above 90 today i like the momentum. >> dow is still up 70 points that does it for us. thanks for watching? "the exchange" with kelly evans begins right now >> thank you, scott. hi, everybody! here's what's ahead this hour. the state of our union,

tax cuts stimulate capex. on the other hand, all this uncertainty about pricing inhibits capex.ou have a tug-of-war that means nothing happens. david: a tariff is a tax on the american consumer. jay: that is absolutely true. if you think the consumer is key, and i do -- i think we should be focusing more on obviously, taxing the consumer is not helpful. david: demand-side economics. back to this morning's breaking news. walmart brushed off the retail sector's disappointing december sales with the best holiday quarter in a decade. taylor: a bellwether read for the u.s. economy as well. fourth quarter numbers beating on the top and bottom line, reiterating their 2020 forecast and raising their dividend by $.63 a share. let me go through the numbers for you. 3.6% --store sales up being dragged down by walmart brazil. within the gross margins, shifting through their income statement, we did know their gross margins were expected to contract a bit. we knew that in the fourth quarter during the holiday sales they had fierce competition in the toy sector. that kept prices high and prom

capex growing at a sizable clip.he primary driver continues to be investing in technical infrastructure to support growth, data centers and machines. this reflects our outlook for global growth in ad, search, youtube, and cloud. sort of echoing, crawford, what you suggested there. but paul, investors are concerned about it. paul: i think they are in the short-term. the market has generally given ruth porat very, very high grades for coming in and really instilling a sense of more certainty as it relates to both their operating expenses and their capex, so, a certain level of discipline. the three areas where they are investing are very high growth areas, including youtube. internet ad spending on video is the fastest part of internet ad spending. clearly google is a leader there, along with youtube. when you combine that with the cloud, another extremely fast-growing end user business, i think longer-term, most google investors feel very comfortable with google's p&l and capital spending. emily: now, there continues

we have that too i'm still amazed at the -- i don't know where we are in terms of capex, but for very companies on a list that spend $7.1 billion in capex per quarter. >> i don't know how you spend that much. how -- >> you know what they're doing the data centers alone, do you know how expensive it is to build one of those things. and then secure the power for it >> what should they have bought? service now? >> i don't know. >> service now workday? what do you want them to buy >> why do you want them to buy all these things >> someone, brent on the conference call, said when are you going to buy something the jeffrey's analyst. you've done less m&a than anybody, you have a lot of cash, why don't you buy something? >> bottom line, bob pisani, 22% top line bottom line is that they were -- 22%. >> the analysts hate it, they should try to be covered by other analysts and charge $5 for what is -- what does espn plus charge they should have a $5 plus channel. they narrate, they have baseball stars narrating games, but you don't see the games, don't violate the mlb patent i wanted to buy mlb

take that a part, the key thing will be going back to jj's point, once you have stability do you see capex spending i don't think you do because we didn't see it before china was an issue that's been the canary in the coal mine the whole time i'm still being greedy i'm nowhere fully invested haven't been i'm going to start taking some mup o money off the table. >> josh brown, what do you think? >> a lot to think about. none of them have changed my mind >> of course not i really felt we've been in a no man's land the good news is a lot of the technical damage that's been done has repaired itself now 90% are back above their 50 day. not all those are risrising. some of them are down trending that that's the highest level since april 2015 it's at an all time high heez are a these are all important things take a look at ibb this is a very good gauge for speculative appetites in the market right at a very clean resistance point. if it breaks through there, it's very bullish for gauging how people feel. take a look at the industrials i think steve mentioned them or jim. the sli has already broke

linda: yes, the capex is the big question.are rooting for capex to pick up here as we make our way to the rest of this year after it got abbreviated with energy prices coming down hard and concerns from corporate ceos about what is going to happen. we forget the fact that we were at all-time record highs and confidence in both consumer and -- in confidence in both consumer and business. alix: what we have seen over the last few weeks, you have a dollar rally in, so the fed is -- you have the dollar rallying, so the fed is dovish. linda: we believe we are in the back half of a cycle. than i ought to move upmarket market cap and focus on the u.s. -- then i ought to move up market cap and focus on the u.s. with regulations being cut dramatically, money is fairly easy and the economy is still growing, small-cap stocks look great, too. this one could go on and on and we like small caps a lot here. david: alix just referred to the strength of the dollar. given how much of the s&p 500 get their earnings from a rod -- from abroad, wha

. >> numbers on capex i don't think tell story capex, businesses putting money into i.t., and r and dtake that out of capex. >> there is -- a number called gross output department puts out takes the whole economy not just the final sales, big in third quarter i think portends very well. >> -- >> absolutely. >> what about shutdown first quarter do you think that will affect the 2.2% at all? >> the way they keep statistics probably a little bit, but, again, it is a road bump why market is sloughing it off markets fine economy will eventually be fine. >> i want to ask about sticker shock could come after april 15 could be an issue i have been this could about a short break when we come back waiting first reading fourth quarterly gdp expecting . % growth, that and taxes new mystery from elon musk, the commander in chief of tesla teasing big news to come this afternoon changed his name on twitter yep story coming up. ♪ . maria: chemical weapon back i am maria bartiromo. thanks for joining us it is thursday february 28 we have breaking news this morning, no deal with north korea, the presid

we have seen companies stall out on capex. a lot of the programs they have in place.sions to have been pretty sizable. if you start to see consumer and corporate confidence wayne, that could be as much as a 10% down to the gdp. and that is immediate, not to say what happens over the longer term. alix: thank you. may not bethe future so bright when it comes to earnings. we will discuss what the market is pricing in next and where the upside is. this is bloomberg. ♪ >> this is "bloomberg daybreak." shares of kraft heinz are set to open at an all-time low after plunging in the premarket. the giant company is taking a itse-down assets to some of best-known brands, such as oscar mayer and phil vida cheese. -- velveeta cheese. cost pressures may lead to a big job cuts. the frenchas learned bank is drawing up plans to eliminate jobs in its investment bank and find a partner for the cash equity business. thousands of jobs at socgen may be in jeopardy. pinterest filed confidentially for a public offering in the u.s.. the search site is expected to seek a valuation of $12 billi

google reported 22% topline growth, 40% year-over-year investment in capex and r&d.ains an incredible juggernaut of growth. as a long-term investor, you would want to see that. a company like google, when it has so many things going right, you need to make sure anything hasare discussing with them to be portfolio creative. it is difficult to find an asset that can have those natural characteristics and also add a skill set to google where they might be lacking. steve mentioned media, for example. they want more people on their site. amazon, apple and facebook, $70 billion in content spend last year. interesting. they would do a lot more with it than you would think. businesswe do to the that can't be done on its own to accelerate without skill set what we are doing well? david: nobody comes close to them -- there's some other players like netflix and disney. andanies have gone in gotten their head handed to them. blair: you will see google being careful about whatever it does. they are a disciplined company. even when you think about where they invest in ancillary bu

we are going to hire 20,000 people and spend $30 billion in capex in the next several years.umber one, we are investing a ton in this country. we are also going to buy some of our stock because we view our stock has a good value. david: did your parents live to see your success? tim: my mother passed away three years ago, but my father is still alive. david: your mother lived to see you be ceo? tim: she did. david: did she say you are great and i always knew you would be successful, and can you help me with my iphone? [laughter] tim: i did get both of them on ipad. i convinced my father to start using iphone. honestly, they treat me like they did 20 years ago. david: does he call you with tips about what to do or tell you how to do things? tim: if i do something he does not think is good, he tells you about it. i saw you on that show. you weren't very good. [laughter] tim: i hope you edit this well. david: you are a public figure. you were not before. did you ever think you could run for president of the united states, because -- [applause] david: you have seen the president

our corporation to scaling back things like hiring and capex? scarlet: have they been given? capex?h the small-cap companies, they are less tied to the global economy. when you look at stock prices against gdp trends, we find it is the big caps that are tied in terms of gdp, but small caps are more in sync with u.s. gdp. the readthrough to stock prices -- scarlet: big caps are not scaling back their plans. are they building on them, increasing them, devoting to spending? >> it's hard to tell at this point. we've been trying to figure out whether or not companies are talking about empathizing -- emphasizing capex or if they are deemphasizing them. on thesen emphasis things as opposed to scaling back. scarlet: we have mitch mcconnell speaking on capitol hill. he says the senate will vote on the deal that came up moments ago. we will keep an ear out for whatever he's has about a shutdown agreement. that's whatever he sad is about a shut down agreement -- whatever he says about a shut down agreement. caroline: will we retest the highs of september last year? >> we have a 2900 target yea

we think for the year they burned cash, no at ton, but reverse that trend so cutting the capex, yeah,ere may be an air pocket from some demand that was pulled forward, and some of the ambitions we still think could use external funding we don't think they're quite out of the woods yet >> the stock has actually rallied. i know your price target is 283. is the next one the market doesn't look as favorably upon in your opinion? >> it depends where the money comes from we think that tesla is fundamentally overvalued but strategically undervalued. the mixture of those two things looef leaves a stock slightly above fair value at 283. we think the next capital raise, if it doesn't come from a stlooe strategic, be it a sovereign, a tech partner, another oem, if it doesn't come from that genre, then it's not because they didn't try in our opinion. that can go a long way can they attach to a platform that can provide a greater resiliency longer term to their model instead of just being a stand alone electric car company. >> last question on gm going back to rivian, does that news make you incre

fourth-quarter organic capex coming at $4.4 billion.log top desktop that you can follow everything on as the numbers come through. we will bring you more as they come to you on the bloomberg and we speak to bps ceo bob dudley, can catch that interview after 7:00 a.m. london time. sticking with the same industry, let's take a look at rosneft. 102.5 billionas rubles, a miss on the fourth-quarter net for rosneft. fourth order free cash flow comes in at $4 billion for rest aft. -- rosneft to. billion dollar drop in debt. that is the key headline. ebitda fourth-quarter billion rubles, that is a miss, fourth-quarter revenue at 8.2 4 trillion rubles , that is a bead on the estimate of 2.13 but key numbers to focus on, the fourth-quarter net, 109 billion rubles. still keeping an eye on bp but let me get to a different sector of the on rock -- online grocery sector. seeing a decline in 2019 given retail revenue, growth between 10% to 15% in the final year, the full-year at five point 9 million pounds. a miss on the full-year ebitda. is 1.6 2 bil

let's try to make sense of the capex, the numbers, and the possible outlook for iron ore. formanaging editor joins us the commodities team in singapore. always good to see you. what are the indications on the impact of the slowdown from china? alex: good morning. it is obviously a concern for bhp. they get revenue from china, their biggest market, and they flagged what they see as a modest slowdown in china of economic growth over the next year. that will be a headwind for the company. they are not going over the top, but clearly it is in the back of their mind. longer-term ac that continuing, deceleration in economic growth in china. for iron ore, they see demand steady. it is in the supply side that there is uncertainty after that disaster in brazil. nejra: that brings me to the next question, alex, has the company commented on the disaster in brazil and the impact on higher iron or prices? alex: it did not go into it much in this report, but the ceo did offering comments by deepest sympathies to anyone affected and the company is committed to learning from what happened

capex happens when there's less uncertainty.ave a more dovish doesn't that support the argument to take on more risk? fed affectsdovish the earnings multiples. the discount rate is lower. this is supportive for markets. we are up 9% since the beginning of the year, off very low valuations. 16 times share earnings. are we fairly valued? david: how confident are you that the fed won't -- >> we think the fed stands pat for the first two quarters at least. there will be some --ects from the shut down the real number comes in the third quarter. if there's some sort of piecemeal trade deal, you can stabilize investment in the economy here. david: alicia levine of bny mellon, thank you for being with us. coming up, the world's largest bank merger in more than a decade. bb&t and suntrust announce an all stock deal. we speak to a former bb&t chairman and ceo. that's coming up next. this is bloomberg. ♪ alix: time for bottom line. story --ere's only one bb&t buying suntrust for $28 billion. .oining us now, john allison chris, great to hea

i'm focused on capex. they didn't believe the oil rally in q4.t and get on the call and bring you updates as they happen. alix: permian production was up 90% year on year. it helped drive their overall production growth. they bet big and it's delivering big. challenge in december isn't getting better going forward. this is the percentage of downgrades versus upward guidance revisions. they haven't changed. greene.us now, megan what have you learned from earnings season? >> the outlook is definitely negative. some people have called for earnings per session -- recession. they've come up 13.5%. revenues have trail that. that is the much more interesting piece. here, why areon these estimates down so much? because the economy is slowing or the i input costs are going up? david: it is not quite apples to apples. megan: there's a lot of massaging that can happen in that way that can't happen with revenues. we learned ine terms of companies passing through cost increases and margins? firms aren'tlly, feeling like they can pass through the costs. -- hea

they have outlined a plan to spend more money on capex.ll be wary about raising dividends too far, too fast. forie: there is a battle top market capitalization even though some of the top are close to each other. do you see any kind of m&a activity to have that happen? i do not think people will do deals for that reason. for all these companies, the challenge is to replace it and that has been done in the permian. exxon is doing well because they bought a whole group of fields a couple of years back and we have seen that transaction kick in. if they have opportunities to consolidate in grow their position, there are cost benefits of doing that. i do not think they are going to do emanate just to take top spot. guy: what is bp? will: it will be a great disappointment if they do not follow. the big news last year was the acquisition of permian assets. i am not sure that will affect crude into results in this quarter. sign to theably a year ahead. that deal could well paid dividends. they look at the dynamics in play in the oil market? also,

n capex. vonnie: what are you sing with brexit.: this is going to take time and things have to be extended beyond the march deadline. it becomes challenging because there are a number of paths that this could take. we cannot rule out a no deal brexit entirely. perhaps there can be opportunity for a new election or second referendum, but there are political barriers and divisive issues. call thellenging to exact position of brexit. a -- tould it go from the ecb? james: there have been indications that they would want to and it might provide support. restarting same as asset purchases and would not be the same degree of economic support and policy support for the region. need for additional support is by pushing back interest hikes potential he into 2020. even then, the potential for rate hikes is in question for the eurozone given the degree of slowdown at the moment. guy: let's dwell on that. do you think the ecb will hike rates this economic cycle? james: it is a very close call. it would be difficult in the near term. there is po

going to be able to say, we are going to increase and not get absolutely annihilated -- to increase capexannihilated. so in that respect, they have a sustainability that i think maybe does not get read through two the entire sector. -- to the entire sector. they do think the permian is a great opportunity. you just need to be positioned within the companies that can drive growth without spending too much or how the luxury of having an investor base that will allow you to increase capex, which exxon and chevron at the moment due. scarlet: what kinds of companies are you looking at that can capitalize on those opportunities? rebecca: companies that have the leverage aggressively last year, that continue to execute efficiently, and our kind of within the right areas in the permian and the different basins , essentially executing on every line of business. and it is a super high bar for energy companies right now to be able to drive that back into their story because energy still is a really, really unfavored group. and that is part of why chevron and exxon are rallying today. the setup into

so i guess the question is why hasn't somebody launched a capex etf?one a couple years ago. it closed down and ishares fell back in 2014 and they never ended up launching it. there are so few product gaps, that this is a good opportunity. performance is good in do have a proposed tax law by marco rubio that could give us a tailwind. if i was a sponsor i would be looking to fill this gap. guy: ok. we will leave it there. tom, thank you very much indeed. it is etf friday. and let's tell you what is coming up. in the u.s. and asia, and everywhere online, we will be taking you to "balance of power." guests include the eurasia president. it will be interesting to get his take on a number of things, including what is happening with the china story on the trade front, but increasingly the tension that exists between europe and the united states, with the europeans today heading back, saying -- hitting back, saying we will hit back if the auto sector is tariffed. we will take a look at that, coming up next. this is bloomberg. ♪ david: from bloomberg world head

the people that are supposed to do all this magical capex. if you negate that by doing something so dumb and say i think we made it to producing raw aluminum, if kryou do that n say okay, i'm putting my tax policy to my trade policy and we end up with nothing. that's what the market is afraid is starting to happen here >> let's call this for what it is in order to be very bullish on the market, you have to make the bet. how comfortable is anybody in their ability to be able to predict what an unpredictable person will do >> pretty good from the beginning of the presidency when stocks rally the way they did. we hit those record highs. >> let's go through them he's executing on every single one of his promises. obama care, taxes. what's left is the wall and china. he will go through on those two to some extent to me i've been cutting back my exposure it is trade market >> i recently bought boeing. i'm not selling it i'm waiting for the opportunity to buy more. >> did you sell b of a because you got tired of watching paint dry and not go anywher

it goes against the grain of the capex is doing better.esting from the etf point of view, there is no etf, yet there is three buyback etf's.- buyback an unusual hole in the etf market and also a little surprising when we ran the numbers. guy: next chart, eric. vonnie quinn. vonnie: my chart is china-based. showing the spread between the bonds in china's at the widest in seven-year. it isnow, you can see about two at six basis points. once private investors to invest in these companies that moreaybe just a little risky than government-sponsored companies and government bonds. but investors are quite happy to take the return and invest where they know that china is not going to let an industry fail. you can see that chart on the bloomberg at gtv . sucker for aays a china char and it has to be said that i am going to give it to eric today. the chart that vonnie was talking about about the over indebtedness of companies and that indebtedness has not led them to putting money to work and productivity, i.e. they are not investing in business

merger i have been trimming >> i'd rather own the 5g direct play verizon still has to increase their capexald in las vegas is asking mastercard or visa >> i own both. i think it's a duopoloy here if somebody goes wrong with one of them, i think these are -- >> do you own amex also? >> i do not. amex has a lot more issues in terms of your create if the economy goes down, they take the credit loss >> we own visa we don't own master card i agree it's a duopoloy. >> i own visa as well. i agree with it. >> you like paypal too can you like them both you don't have to pick one or the other. >> you don't have to pick one or the other. these are great companies. they spend a lot of money or rnd. they are ahead of the curve in terms of security, teg knowledge. >> there's one caution on mastercard and visa it's there's a suit going onto force them to cap their merchants, what they charge merchants >> lee in florida says gild hasn't performed better. is there a sector. >> i don't like it i own bio sciences >> good stuff. thank you for your questions lee and donald and all the rest. >>> next, the amazi

you saw r&d up 40%, capex more than 60% but those investments are clearly supporting the growth storys intact and i think people are selling on the news >> wasn't it about to the extent you thought there was going to be -- if you think there's discipline on the spending, it was to break out some of that spending, to actually see where it is. >> right more transparency. when she was brought in, i think people expected kind of more thoughtfulness around the spending and -- >> so you think it's not thoughtful >> i think it's less thoughtful than people might have expected. >> so scott, let me push on that shouldn't we now embrace the fact that when it comes to technology, it's as if you've pressed fast forward on the corporate cycle. so they become systemically important much faster then they become incumbents much faster. now they face competition much u expect and isn't the right response to that is to step up investment, isn't the right response to continue to try to try to self-destruct? >> they're hiring people, engineers was one of the biggest expense items they indicated they're a

interesting within the context of earnings where you've seen companies that have guided higher on capex have actually been penalized for that because that's seen as a sort of cash burn. if you look at companies that are spending more on either labor or, you know, building out excess capacity or costs coming back online, these are basically draws on capital that's the name of the game. you want to avoid companies that are spending or being forced to spend either on interest payments, higher labor costs, capex, et cetera, and look for companies that are simple cash generators. >> savita before we get to -- >> it's not as easy as it sounds, though. >> before we get to your specifics based on that view, is it not fair, though, to say that the cost of capital on an historic basis is still pretty low and, more to the point, balance sheets are still pretty strong >> yeah. >> so maybe this isn't as clear for stock picking as it was in 2006-7 >> here is the thing, though i think what will catch investors by surprise is this is a big change from the normal environment that we have been in for, yo

obviously it's covering things like investment decisions, capex spend, but a lot of businesses the lastew months is when they failed to meet their targets, they've come in below expectations on things like earnings they've said, well, this is a lot to do with brexit uncertainty. i wonder from your perspective, does that really hold up to scrutiny you like to hold off on big purchase plans it does weigh on those kind of spending plans, and we have genuinely seen weakness in the u.k. economy over the past two or three years, but would not have been there without the vote to leave european union. the day after the referendum, we had the substantial falling sterling, and that was, in essence, a big wage squeeze weighed on consumption and growth that we are now only coming towards the end of. the brexit vote has had real economic effects how much that has driven poor performance in individual companies versus what they were doing anyway, it's probably impossible to say. it requires a lot of detail investigation of the individual companies. at a macrolevel, it clearly has ae weighed on revenu

little better but we have seen cap ex guidance come down with companies that reported so far seeing capex percentage points where it was below last quarter. if it started to fall off a cliff if there is just continued uncertainty around trade and global growth that poses risk to some of the sectors like tech and industrials that we do like right now but are seeing a bit weaker in terms of guidance due to some risks. >> my only question, liz ann on your cautious posture, are you not encouraged by the fed's complete change in policy, in tone, in flexibility around the balance sheet? haven't we learned over and over in this bull market when the fed, you know, provides relief or something that the market wants, usually it's a buy? >> you do, absolutely, tend to get a pretty decent rally when you see it go into pause mode. if they are successfully engineering a soft landing here, mid-1990s-like, the december low probably holds but if the reason why they're able to pause now is because we will continue to decelerate into a recession starting sooner than i think what consensus believes, then tha

we are making massive investments in and -- in capex and renewable energy. by next year, we will be 100% renewable in all of our operations and continue to make investments across the board. emily: more broadly, it has said that revenue is expected to slow down and make changes. you said you welcome regulation. how do you convince investors that facebook will also continue to grow rapidly with that? >> well, our numbers are public. we are still a fast-growing company by any stretch. we're going to continue to make investments to prevent harm, to build great products and invest in the future. our focus is continuing to do all of that. i think people wonder to do it all at once. i think this quarter shows we can and will. emily: mark has said he wants to decentralize power. we know you are working on merging the backends of messenger, whatsapp, and instagram. there is a concern that privacy will be compromised in the process. why do that? >> we know what people want from messaging. our focus is what people want. they want messaging that is simple, reliable, an

vonnie:vonnie: finally, you talked about a $2 billion capex expense this year.re will that be primarily? guest: partly influenced by the inclusion of costa into our business and the buying back of part.ilippines it is more of a temporary increase in spending that will become more normal in the years to come. vonnie: mr. quincy, thank you for joining us today. james quincy, ceo of the coca-cola company on earnings day. much appreciated. i want to recap some headlines that just crossed the bloomberg. according to sources to bloomberg, the u.s. and china have made little progress so far during trade talks in beijing. the two teams are said to be far apart on reform demands. as we know, president donald trump and xi jinping are to meet at a still unscheduled summit. this is all according to discussions that the u.s. and china trade teams are far apart on reform demands. so far, markets are lower. they are not adding to their losses just yet, though. 1% s&p 500 down one third of , and the nasdaq down 2/10 of 1%. once again, coca-cola one of the worst performers today

areas where i think we're starting to see them relocate, not just financial resources in terms of capexle as well. emily: all right, bloomberg's paul sweeney, thank you so much for weighing in there. appreciate it. well, despite starting three years behind the u.s. in developing the technology industry, china now boasts some of the world's biggest companies in the field, there is alibaba of course with its mammoth e-commerce, and a strangle hold and baidu, which has a stranglehold on internet search engine. china's internet users make up more than double the u.s. population. bloomberg takes a look back at how the internet took hold in china. ♪ ♪ >> imagine if the internet took hold in china. imagine how freedom would spread. >> unrestricted internet access is a source of strength. >> that country has some of the toughest internet restrictions in the world. >> a number of anonymous postings have poked fun at the government. >> so you think they're ultimately going to be on the right side of history, the chinese government? >> i am 100% sure, nobody can stop this technology revolution. >>

on hiring alphabet had 100,000 employees by end of the year importantly, she said that she expects capex growth rate to moderate significantly i asked her about competition from amazon's ad business which we know is growing strongly, she said site revenue has grown 22% year over year, reflecting strength across the board. our view is whenever a new inventory is created, that attracts consumer interest and advertising against that inventory creates positive roi she's suggesting her business isn't threatened because the total online ad market continues expanding. despite all of the spending, not much new disclosure about the cloud or youtube where some investors we know are still holding out hope that the company will one daybreak out that business. guys, back to you. >> thank you, josh roger, these companies, google, facebook, spending a lot of money. that caught investors' attention. part of the reason alphabet stock was lower. what's that going to do, how is it going to shake out on the market, given they have such leads already on things like ai. >> i look at both companies. the key po

chairman powell: yes, as oil prices go up, it makes it more economic for more drilling and you see more capex. i do not know if it accounts -- that was the case in 2017,

some were saying that maybe what you should be doing is shorting equities, because what companies cut capexponse is , share buybacks, try to shoring up the balance sheets. peter: that is absolutely right. the state of the corporate market is that corporate's rd leveled and earnings growth is not going to be sufficient and economic growth is not , toicient to withstand sustain these levels of debt. so the prudent response, the only rational response for u.s. corporate with this debt picture is to deleverage. it means that, as strange as it sounds, the bond markets, the credit markets should actually out a supply diminishes. , equity markets should fall, a natural consequence. this is what we expect will be the cause of the u.s. economy having some negative growth quarters. call it a recession, a soft landing, as you will. but this is what we think will be because of the end of the economic cycle. music hard data starts to deteriorate in 2020. we are starting to see the start , that's greatat it is completely as we expect. the u.s. economy to be playing out. . anna: is this as large as it see

load well, what about so many of the challenges that you have and the fact that you've cut back on capexo, we're going to be okay now, of course, in his testimony, these are all issues as to why, in fact, they should be allowed to get together with t-mobile >> but is there any sense this is really scrutiny today or is this just jumping through the requisite hoops to get this done >> i think there is some scrutiny, certainly, with the democrats having taken control of the house, it's a more important voice than it had previously been. but the doj will weigh in very carefully here, the fcc, certainly. they listen, they hear, but that will be where the key judgment is originally, when this deal was announced at the end of april last year, there had been hope that it would have been approved by the end of the first quarter this year. that's certainly not going to be the kacase, morgan, but they ho by the end of second quarter >> i'm curious what this means for broadband and the services they could roll out there if they do merge and the competitive landscape and prices there. >> one of the k

dples ekly it still looks okay i think we have the german gdp there was domestic capex and fiscal spenting. we think growth is very low in europe anyway. we're not looking for a hunl rebound. some stabilization around that slow trend rate of growth in each one this year >> all very clear. as we look to developments in spain today, important to remember, as you said, that the spanish economy, much stronger than per se italy. thank you very much for joining us mark richards, multi-asset strategist, jupiter investment management >>> coming up next, former german finance minister wolfgang weighs in on the european commission to weigh in on the rail merger. more after the break (voice) you know what you're doing right now? (danny) impressing the heck out of me. also, giving a shih tzu an updo. pet care ain't easy. 12 hours? 20 dogs? where's your belly rubs? after a day of chasing dogs you shouldn't have to chase down payments. (vo) send invoices and accept payments to get paid twice as fast. (danny) you deserve a treat. and by treat i mean cash. bacon-wrapped cash. josie...it's time to get your

one of the things we're proud of we're making massive investments in capex and renewable energies.ext year we'll be 100% renewable in all our operations including all our data centers. we'll continue to make investments across the board. >> more broadly, c.f.o. dave weiner said revenue growth will slow down and you promise to make changes and promise to fix the problems people perceive you said you welcome regulation. how do you convince investors facebook will continue to grow rapidly with all of that as well? sheryl: our numbers are public and we still are a very fast growing company by any stretch and we're going to continue to make the investments to prevent harm and build great products people want to use and invest in the future with things like v.r. and a.r. our focus to do continue doing that. people wonder if we can do it all at once and this quarter shows we can and we will. >> mark said on a call he wants to decentralize power and we know you're working on merging the back ends of messenger, whatsapp and instagram and there are concerns privacy will be compromised in tha

chairman powell: yes, as oil prices go up, it makes it more economic for more drilling and you see more capex. i do not know if it accounts -- that was the case in 2017, i want to go back and look at 2018. i think it went up more broadly in 2018. >> oil prices started to fall last year, now down into the 40's or so. mentioned in your ford growth forecast -- f orward growth forecast that energy costs are down and you are adjusting for energy, does that not apply in reverse? if we were looking at growth being higher, are we treating the fluctuation the same as we do when we look at explanations of prior growth, as we are discounting growth going forward? chairman powell: i did not get that question. >> if i understood your commentary right, you are saying going forward inflation will be below target, given by energy, and the prior growth was driven by energy prices being positive, so are we treating the impact of energy prices on the economy the same in a positive direction as we are in a negative direction? chairman powell: yes, sorry. if oil prices are flat, they are not lending anything to i

the woshld's largest steelmaker has launched a $113 million share buyback prap and will increase capex to just over $4 billion. the company expects steel demand to rise slightly this year >>> hydrohas a lower than expected fourth quarter underlining operating profit and says it will miss its 2019 savings targets as output restrictions at its facility in brazil continue to buy norwegian metals producer had to reduce our profits at a refine ary by 50% firing an untreated water spill. the company sent higher raw material costs and an uncertain economic outlook hurt quarterly profits. ivan joins us again, the cfo of hydro. nice to have you back on board two big issues there talk to us about the outlook and how concerned you might be at this point >> i think -- i mean, when you look at the raw material cost, there's been a significant increase here-over-year. the good thing is when we look into q1, we see raw material prices coming in, which gives us an earnings uplift in the first quarter. >> i want to ask you about brazil we've spoken about this in the past, but since those conversations,

yet mother company that's posting strong earnings, but investors seem to be focused on yet again the capex spending outlook and the fact that they have more expenses to be incurred in 2019 >> it's a theme we've seen across tech erjz so far this year we've seen these companies report very strong revenues, very strong earnings, but investors are looking ahead to the guidance, which says they're planning to increase spending, and a particular focus on security efforts twitter saying operating expenditures are going to increase 20% this year, and a lot of those expenses are towards improving the health of its platform >> what does that mean what is the health of the platform is that terms of weegd out fake news or getting algorithms to -- >> getting rid of fake accounts, getting rid of news that is determined as fake also determining from its algorithm how they can prevent that from happening in the future, and we've seen the monthly active user decline because of the number of fake accounts that have been routed out from twitter's system. >> when you talk about overall activity and critical m

this is all coming after a call where we basically nuclear in the cfo redesigned capex-down and better free cash flow and they annualized their production hard into the fourth quarter and growth for 2019 is the same as in the fourth quarter of 2018. this company, if anything, they have a solvency issue. i can't believe people are not even adding up the numbers in terms of their balance sheet and what's what. >> because we've seen companies with similar balance sheets prosper over the long term more importantly, pete, look at this chart unless you're day trading it for two years you have not made any money. >> i agree with guy. on a pullback, the way you do it, you got to do it with options, the stock is erratic and know how difficult that is to trade with options on a pullback get towards 300, can't wait towards 280. you put out an option spread and that gives you an opportunity. cash flows are pretty good and tell you what, with larry ellison joining the board there is an independent factor that i think puts something more secure to what we're looking at right now. >> a guy with a cou

if -- if corporate profits and business starts to weaken, and businesses start to spend less than capexwing, i don't see it myself yet in 2019 but there is also a prospect of it that is one of the reasons why i think in right position having paused at fed, and being patient and giving some time for economic conditions to unfold. maria: i know that you are in touch with business managers and host of industries, as pat of your research, are you seeing business administration ceos pull back, in terms of spending? are they reverting back to the sitting on cash? >> i -- i would say right now, they are in a position to be nimble. meaning there is a lot of uncertainty. i would say -- a lot of businesses i talked to are putting thing on hold. they are prepared to do more. but with all this uncertainty, they are saying let's just wait a little longer. so a lot of uncertainties are having a chilling effect i don't think it has gotten to the point where i am hearing from business they are cut cutting back but getting in a position to cut back if the economy unfolds in ways that are weaker, and rig