Memory Chip Squeeze Widens Gap; Alphabet's Global Debt Binge

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the
stories we're following today, Karen.
Trading begins this morning with stocks at or near record
highs and chip companies are the ones doing some of
the heavy lifting. Let's get more this morning from Bloomberg's
John Tucker. John, good morning, Good morning, Nathan. You have
the dal finished out of record. The S and P
five hundred drove to within a few points of its
record close. Two of the strongest forces pushing the S
and P five hundred upward were in Vidia, up two
point four percent. Broadcom serves three point three percent. Those
are the beneficiaries of all that capex spending, But always
lingering at the background, you have worries about whether all
the huge spending out of AI is going to produce
enough profit to make the investments worth it. Andrew slim
at at Morgan Stanley Marvel's at how investors seem to
climb a wall of worry.
I think the biggest risk is we go into a
kind of a real blow off stage, and every time
I start to worry about it, you know, the market
selves correct. So I think that's you know, that's a
healthy thing. And that's why I don't think we're we're
end of cycle.
One of the interesting feature this market is the surge
of memory chip prices. It's driven a vast divide between
winners and losers. You have companies from Nintendo to big
PC brands and even Apple suppliers seeing share slump on
profitability concerns. But the memory producers, they're soaring to unprecedented heights,
you know, New York. I'm John Tucker, Bloomberg Radio.
All right, John, thank you. Meanwhile, Alphabet is selling Sterling
and Swiss frank denominated bonds for the first time, including
an ultra rare issue of a one hundred year note
following a twenty billion dollar deal in the US. Bloombergy
Tech co anchor Caroline Hyde reports is just the latest
salvo and the AI spending spree.
He's just got. Also on the heels of Oracle, having
sold twenty five billion dollars a debt at the beginning
of last week. They got one hundred and twenty nine
billion dollars of demand, a record set. You might be
bracing for four hundred billion dollars of investment grade debt
coming to Finance.
AI and bloombergy Tech co host Caroline Hide. Yesterday, Alphabet
raised twenty billion dollars and a seven part dollar debt sale,
exceeding earlier expectations for a fifteen billion dollar deal. The
offering attracted more than one hundred billion dollars of orders
at its peak, among the strongest ever for a corporate
bond offering.
Turning to the economy Now Karen, President Trump says his
pick to lead the Federal Reserve, Kevin Walsh, could get
the US economy to grow at a rate of fifteen percent.
President spoke to Fox Business.
If our new head of the FED, who I think
is going to be great, and he's he's a really
high quality person. But if he does the job that
he's capable, we can grow at fifteen percent.
I think more than that.
President Trump says Kevin Walsh was his runner up in
his last search for a FED chair. He says it
was a big mistake to pick Powell Nathan.
The Justice Department is facing new pressure to release more
information about its investigation into Jeffrey Epstein. The lawmakers who
sponsored the bill to compel the agency to unseal its
Documents were able to review the unredacted files. Republican Thomas
Massey says what he saw could lead to more criminal prosecutions.
The user interface is a little clunky at first, but
what I saw that bothered me were the names of
at least six men that have been redacted that are
likely incriminated by their inclusion in these files.
Republican Thomas Massey was joined by Democrat Rocanna. He described
those six men as quote very powerful people who raped
these underaged girls. Meanwhile, on Capitol Hill, Jeffrey Epstein's convicted
former girlfriend, Glane Maxwell, appeared for a video deposition before
the House Overside Committee, but it didn't last long.
At any point during your personal relationship with Jeffrey Epstein,
were you aware that mister Epstein was sexually abusing minor
and adult women.
I would like to answer your question, but on the
advice of counsel, are respectfully declined to answer this question
and any related questions.
Glenn Maxwell repeatedly invoke the Fifth Amendment during the five
minute hearing. It led the overside panels top Democrat Robert
Garcia to ask who is she protecting?
We turn out of Arizona, Karen, where The investigation into
the disappearance of today's show co host Savannah Guthrie's mother, Nancy,
is now into a second week. Authorities are investigating the
apparent kidnapping, with a ransom deadline set by her purported abductors,
who sent ransom notes demanding money for her return. Savannah
Guthrie released a video saying her family is at an
hour of desperation.
We believe our mom is still out there.
We need your help.
Law enforcement is working tirelessly around the clock trying to
bring her home, trying to find her. She was taken
and we don't know where, and we need your help.
Investigators believe Nancy Guthrie was taken against her will from
her home. There is growing concerned about her health doud
or need for daily medication and pre existing medical conditions.
Well Over in Europe, Nathan Keir Starmer shored up his
position as UK Prime Minister at the end of a
dramatic day in Westminster that at times seemed like he
might be forced to step down. And we get the
very latest, so Bloomberg. James Wilcock in London.
James, good morning, Good morning, Karen and Nathan. We learned
yesterday that the Labor Party is deeply unhappy, but it
isn't yet open to the idea of getting rid of
the man in the top job. Publicly, cabinet minister's back
to the Prime Minister Labor MPs in Parliament were effusive,
but privately they told Bloomberg that challengers weren't yet ready
to run rival campaigns and said that certain ministers had
quote bottled it now. Economic data is starting to improve
in the UK, but political attention is left on the
numbers and more on the dates a special election in
two weeks and a local one in May, which is
seen as the next time crisis points in London.
James Wilcock Bloomberg, Radia James, thank you staying in the UK.
Barclay says it'll return at least twenty billion dollars to
shareholders through twenty twenty eight as the bank continues to
work through long term plan to slash costs and improve
profitability to hit its new targets. Barklay says it'll make
efficiency savings, including through artificial intelligence, while allocating more capital
to its UK business at the expense of the investment Bank.
Barclay CEO cs Nkotta Krishnan tells Bloomberg the bank is
firing on all cylinders.
So I'm very happy they're all doing well. And you know,
each of the businesses produced double digitality is in the
last year, and we're expecting them to continue. The strongest
performing parts have been the ones that have come from
the furthest behind, which is our US consumer bank, which
has gone from seven percent to eleven percent, and our
investment bank, which has also gone up.
That's barclay ceocs Nkotta Krishna on the lenders' earnings for
last year beat expectations, helped by its best fourth quarter
for tra since reporting change in twenty sixteen.
Well Shares of luxury goods Giant Carrying are up eleven
and a half percent this morning. Nathan. The jump came
after the French firm release results. I suggest it is
now on a path back to growth. Carrying's key Gucci
unit saw sales fall less than expected in the final
months of twenty twenty five, dropping ten percent in the
fourth quarter. Meanwhile, annual recurring operating income at the label
exceeded estimates.
Hey Karen, Billionaire Meta Platforms founder Mark Zuckerberg is planning
to buy a property in the Miami area. Sources Tel Bloomberg.
Zuckerberg and his wife Priscilla Channer looking at purchasing a
property on Indian Creek. That's a man made island in
Biscayne Bay known as Billionaire's Bunker. Residents of the Ultra
Secure Enclave already include Jared Kushner, Ivonka Trump, Amazon founder
Jeff Bezos, billionaire Carl Icon, and former New England Patriots
quarterback Tom Brady.
Time now for look at some of the other stories
making news in New York and around the world, and
for that we're joined by A. Bloomberg's Michael Barr Michael
good Morning.
Good Morning. Karent Nurses and two major hospital systems in
New York City have reached a deal to end a
nearly month long strike over staffing levels, workplace safety, and
other issues. The tenative agreement involves Matafior and Mount Sinai
hospital systems. The three year deal still needs to be
approved by union members. Nurses remain on strike at New
York Presbyterian, where Jennifer Lynch is a nurse practitioner in
Upper Manhattan.
NYP was the only hospital here in New York City
to have mass layoffs last year.
Maria Soy is a registered nurse at New York Presbyterian.
What we want people to take away is that this
is more than abount money.
The walkout began January twelfth. The FBI says there is
no credible threat to the public in Springfield, Ohio, following
bomb threats Monday targeting the Haitian community sent to school
and county offices. Governor Mike DeWine says the email threats
were also received in other parts of the state with
similar rhetoric, but it is unclear if they were from
the same people.
County offices in Clark County began receiving bomb threats Tokyo
about it pipe bombs. These are threats that also referenced Haitians.
It was the whole essence of the threats where the
Haitians should be out, get rid.
Of the Haitians.
Governor Dwine called it a despicable act. In September twenty
twenty four, bomb threats rattled Springfield after then presidential candidate
Donald Trump and his running mate JD. Vans doubled down
on false claims that Haitian immigrants were abducting and eating
pets measles was declared eliminated in the US over twenty
five years ago. Now a resurgence is on the rise.
Health officials blame the record breaking numbers on declining vaccination rates.
The CDC says twenty six eight have reported cases from
California to Florida, where at least two universities have reported cases.
In South Carolina, at least nine hundred people have been infected.
Global News twenty four hours a day and whenever you
want it with the Bloomberg News. Now, I'm Michael Barn.
This is Bloomberg. Karen.
Well, thanks Michael. Time now for our Bloomberg Sports Update,
and for that we bring in John Stash Howard.
Thanks Karen.
Arizona was a unanimous number one in college basketball. The
Wildcats took their twenty three to zero record to Kansas,
and Arizona had an eleven point lead back came. The
Jayhawks took their first lead midway through the second half.
In Kansas won eighty two to seventy eight. Big fight
in the NBA in Detroit's win at Charlotte had happened at
the third quarter. It started between Jaleen Duran and the
Pistons and Mussa Diavata of the Hornets, Isaiah Stewart of
the Pistons left the bench. Four players were ejected. That's
your Bloomberg Sports update.
Stay with us. More from Bloomberg day Break coming up
after this.
Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. The market is trading close
to all time highs once again for stocks this morning
after a viadyal few day is particularly in the big
tech sector. This week, the attention turns to a flood
of economic data, starting with retail sales out this morning.
For more, We're joined by Bloomberg News macro strategist Adam Linton. Adam,
good morning. Have we shaken off the worst of the
software sell off?
Good morning, Good morning, and thank you for having me so. Yeah,
in terms of the softare obviously that is incredibly thematic
at the moment. But we did, of course see some
signs of life in the tech sector yesterday. If they're
looking at the pre market indications, it does appear some
of that enthusiasm is waning. I think it's just playing
to more of a broader point that was just so
much more nuance around the tech trade at the moment,
and people just have a preference to rotate out to
that given the uncertainties surrounding the landscape.
And of course we've seen you know, so much attention
on the shortage and memory chips. It's leading to a
lot of winners and losers. Big gap there.
Yeah, definitely, And again it's just playing to this point
where the tech traders has become an increasingly more nuanced
I mean, last few it was at a bit of
a divide between the likes of Nvidia and Google as
some of those large language models came online. Then, as
you mentioned, we've seen suddeny software you know plays, and
now we've seen some of the memory chip plays as well.
So this is kind of playing to a broader point
that the NASDAC could potentially continue to struggle relative to peers.
If you look at the NASDAK, it's not hitting new
high since October, and then you look at the equas
and P five hundred that's hit thirteen records without NASDAQ
one hundred hitting a single one. So it does suggest
this rotation trade as well as the tech nuance very
much remains in play.
Of course, now with Alphabet tapping into the debt markets
to try to finance its plans for one hundred and
eighty five billion dollars in AI capex this year, now
going global with that, with this one hundred year Sterling note,
what could that mean for the tech sector.
Yeah, I mean it's definitely interesting given that we saw
these setting in Alphabet shares off the back of some
of the large capex plans. But I think this is
kind of refocused minds a little bit. It shows that
there is a real solid base of investors who are
still willing to buy that debt. I mean, if you
take that sterling notes, as you mentioned, you know there's
solid pension demands in the UK looking for that. If
UK debt markets, you know, on a sovereign level of faltering,
you know, something that we have seen yesterday, then they
could potentially be looking to diversify into some of these
sectors in terms of some of the duration. I mean,
if you take like the one hundred year note that's
going to be on offer, I mean some people will
bulk at that and just not turn to that, but
it does appear to be a solid investor base willing
to buy it up.
And in our last thirty seconds here we're good. As
I mentioned, we're going to get all this economic data
starting with retail sales today, the delayed non farm payrolls
report tomorrow. Are we looking for more volatility off the
back of the economic data?
Yeah, I think the idy. I think retail sales could
provide some reprieve. I think here we saw this message
in from Hassett yesterday, like in the potential four software
jobs data. If that is the case, you could see
a potential pricing for March April, which are relatively low
in terms of FED rate cut bets.
This is Bloomberg day Break, your morning podcast on the
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I'm Karen Moscow and I'm Nathan Hager. Join us again
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