Good thursday morning. Welcome to squawk alley. I am Carly Fiorina with Morgan Brennan and jon fortt. A busy day of earnings, some tech, some not to sort through today, microsoft, paypal, ebay and others on the tape two biggest movers going the opposite way, tesla is surging, twitter is tanking Julia Boorstin and phil will he be lebeau is with us. This is a stock having a rough day, one of the worst days ever as a public company, on pace for the worst month since july, 2018 shares down almost 19 lower despite growing the user base to 145 million active users. The reason it is tanking, revenue and earnings fell short of expectations as technical issues keep them from Fourth Quarter ads. Jack dorsey looked to reassure investors. Unfortunately we had some missteps in our map ads in july and august despite that, saw strong september results and good advertiser momentum. He stressed the commitment to clean up the platform and eliminate abuse. 2020 elections and integrity of the conversations around them is our First Priority within how we think of health we are paying a lot of attention to all of the dynamics at play, specifically looking at misinformation and misleading information. Analysts are starting to weigh in as we see stock selloff. Mkm saying we view twitters issues as internal, self inflicted, probably fixable over the near term, however, amplified impact on revenue due to a technical bug wonders whether one can have confident have a view on twitters long term potential. Moving the opposite direction, tesla, posting a surprise profit, sending shares surging. Phil lebeau has more on that quarter from chicago phil morgan, this is what happens when you post a far better result than many were expecting. Tesla earning 1. 86 a share in third quarter. Most on the street expected them to lose 42 cents a share they did it with lower operational expenses, higher automotive Gross Margins combine those together, you get positive free cash flow. The numbers across the board, little to complain about if a tesla investor they affirm the 2019 delivery guidance year to date, delivered over 255,000 vehicles they say theyll get to at least 360. Model y, next big model, moved up the launch date to next summer it was the end of next year. Heres elon musk talking about the model y. We are confident about with summer 2020. I recently driven the model y candidates, think it will be an amazing product, well received i think it is likely to just my opinion, but i think it will outsell sx and 3 combined. Look at shares of tesla, Cfra Research who had a strong sell on tesla shares, today said well, you know what, move it back up to hold. Lots of positive comments for tesla after the q3 report. Guys, back to you. Phil, dont go anywhere we want to talk to phil, julia, and mike santoli with the earnings season. Since last nights close, guide downs are outpacing ups by 2 to 1. They are. The market is administering punishment in isolated cases, on the whole not grabbing for excuses to sell off a lot. I think numbers have been good enough in areas that have been pressured enough going into earnings season that the markets say fine, were looking at leading indicators of upturn semiconductors up a half percent. Texas instruments warning was kind of a one day effect, bouncing off that. Caterpillar would have been a great reason to back off right now, can say it is hopeful. You can have accumulation of guide downs where it compromises First QuarterEarnings Growth pace, still expected to get to high Single Digits percentage. Julia, getting back to twitter. The problem this quarter is the opposite of what were used to were used to they cant grow users but are managing to monetize in this case since about the past four years, they have been in this range of 300 to 350 million monthly active users does this problem on the revenue side point to a fundamental breakdown in the story theyre saying this is a bug. A bug they fixed and the process of fixing it makes them stronger overall. The bug they had to fix was about targeting advertising which was crucial to their growth the story we have been talking about with twitter, this is a country able to grow slowly, they returned to growth after stagnating, and we know theyre not growing as quickly as facebook, not going to be the size of facebook, but have shown they can make substantial revenue from those users i think the question about this quarter, is this a blip. Are we going to continue to see accelerating user growth effecting user growth. At the same time, able to fix revenue issues which they have to to keep the train on track. Phil, investors very much welcoming numbers in the news out of tesla today as evidenced by how shares are ripping higher the pull back we have seen in spending and profitability that was reported, how sustainable is that for the Company Moving forward . Great question. Your guess is as good as anyone. Listen, on the Conference Call last night with elon musk, he made it clear he believes they can build sustainable profits from here. But we heard this from him in the past they have a number of hurdles they need to clear while commentary was encouraging last night, they have to make sure it is a clean launch of vehicles out of the shanghai plant, just because it is up and running doesnt mean it is a clean launch the model y middle of next year, will that be a clean launch, will it have as much success as tesla is expecting you heard elon musk saying he thinks it will outsell the s, x, and 3 combined if thats the case, huge surge in production and delivery for tesla. He believes that they can be sustainable in terms of profitability from here on out, but we heard that from him before mike, how do you square teslas quarter with fords quarter, renault guiding down, now solidified notion that we hit peak auto. Obviously, tesla they basically met on revenue after release of deferred revenue. I dont think it was an auto demand story as much as on the cost line for tesla, being perfect than expected in dialing down cap ex. Does nothing to dissquad the auto cycle peaked, it is struggling to maintain plateau level when growth in the rest of the world is in question. In terms of social stocks, we had snap numbers and twitter numbers this morning is there a theme emerging from this what can we glean for this looking forward to facebook and others. Theres a question on guidance the companies show significant progress getting Business Models on track, showing what niche their serving, both showing improving monetization with twitter, declining ad Revenue Growth with snap, questions on the Fourth Quarter it is crucial, it is important for advertising for all of the retailers. Huge focus on Fourth Quarter and interesting to see what facebook says. Thats off the zuckerberg testimony on capitol hill, questions are how much are the costs to protect the platform. And distraction weighing on results. Snap up 3 this morning are investors viewing this as either or between twitter and snap, zero sum gain . Theyre different demographics maybe for investors it is either or, for advertisers i think they serve very different purposes. Snap distinguished itself with professional content, which it puts in the section. Showing there are different stories. Interesting to see what happens when we hear from facebook next week but theyre certainly the giant. Phil, havent mentioned airlines talked about gary kellys comments on boeing and airbus. The macro picture on travel according to southwest, despite what fares have done is pretty so solid. They havent dropped off. You hear it from southwest and other Airline Executives if you travel much, i do, i know you do, most flights are comploe to capacity. Theyre filling the seats. Were not seeing that slowdown in the economy in terms of demand for travel on the leisure side or corporate side mike, is this emerging theme more broadly from earnings season still consumer, strength around consumer versus industrial, weakness around some of the Big Industrial manufacturing names, thats kind of whats playing out in terms of whats leading the dow and whats the biggest laggard it is confirming the way the market was postured before we got here, reflects all those things i would point out, microsoft up a little today, would have been not surprising to see it sell off a bit, shows you what a great quarter, a stock thats strong and hovering needed to have a little extra on the up side, what microsoft and p g were able to do. On the industrial side, it is confirming things werent great in august, but stocks got down there to account for that. Can you put to bed the igb concerns and software . I dont know if you can put that to bed so far high growth stuff within that sector, you still have a premium pulled out of the stocks. Talking about disruption in it spending, microsoft plays both sides, growth story in cloud is not Just Software but service side i wonder what it means in the setup for amazon given that microsoft had the quarter it did, argue about the azure number, growth is still pretty darn good what do we have to see from amazon and to what extent are people going to read that into the overall the stock is treated tentatively, well below the high maybe thats part of that story as we wait for the numbers it is amazing two of the names we are talking about today, julia, tesla and twitter, are run by ceos who also have other ventures theyre running at the same time i wonder whether we heard it before in the past, i wonder whether given numbers from twitter that chorus in terms of jack dorsey, is going to get louder. Interesting, morgan past several quarters as twitters Business Model showed theyre on growth trajectory, there werent as many questions whether it was a problem for him to run square and twitter. He showed he was doing a good job at both. This quarter may change that conversation we have so many Tech Companies controlled by their clooes in addition to led by them. I think dorsey is unusual, he has two different ventures he laid out how he does it, explains his routine but well see what happens especially with those Fourth Quarter numbers, see if that changes the conversation. A lot of ground we covered, guys thanks when we come back, shares of paypal are surging after their own big earnings beat. Cfo john rainey will sit down, talk about the quarter, why they left the Libra Coalition and more but were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Woi felt completely helpless. Hed online. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. Welcome back shares of paypal are surging off the back of a beat on the top and bottom lines it is up better than 7 . John rainey, paypal cfo joins us now from San Francisco john, good morning good morning, jon good to be on the show plenty to talk about as far as earnings are concerned. First, have to ask about libra thats been in the news. Paypal was the first arguably major brand to drop out of the libra association. The statement you put out said at this time that youre not participating. Is there something wrong with libra itself or the political and regulatory heat around it at this stage i think it is important to understand, jon, that we were never actually part of the libra association. We signed a nonbinding letter of intent as expression of interest because we share facebooks mission to democratize Financial Services for those underserved around the world were very much aligned there. Our decision to pull out or not go forward with the association is based solely upon our focus and decision to focus on priorities at paypal let me ask you the quarter. The full year guide that you guys adjusted is still below what analysts hoped for. What changed in this period of time, could it adjust higher depending how overall conditions improve . John, did we lose you it appears we lost john for the moment well try to get him back. Paypal had a solid quarter on the back end back in july, the stock tumbled when they not only missed but guided lower for the full year part of whats happening here, they talked about their checkout button having improved ebay exposure that theyve had isnt hurting them as much questions also about the overall ecosystem, names like apple which we see theyre surging when youre looking at transactions that are done at retail, theyre pushing now with the credit card. Bumping up against venmo how much are they worried about that venmo and further monetization of venmo is a key part of the questions. They grew last quarter, promoting it as a Payment Method at merchants, that theyre 400 million in annualized revenue, 35 of users being monetized longer term, what does the bucket look like within the broader paypal ecosystem as you mentioned, also going to be an interesting hopefully get him back to talk about the libra stuff and the idea of unbanked, what it means for paypal. Were going to do that on the other side of the break. Hear from john rainey, cfo of paypal going to take a quick break. Be right back. About medicare and 65, ysupplemental insurance. Medicare is great, but it doesnt cover everything only about 80 of your part b medicare costs, which means you may have to pay for the rest. Thats where Medicare Supplement insurance comes in to help pay for some of what medicare doesnt. Learn how an aarp Medicare Supplement insurance plan, insured by United HealthcareInsurance Company might be the right choice for you. A free decision guide is a great place to start. 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A Medicare Supplement plan may help pay for some of the rest. Two this type of plan allows you to keep your doctor as long as he or she accepts medicare patients. And three these are the only Medicare Supplement plans endorsed by aarp. Learn more about why you should choose an aarp Medicare Supplement plan. Call today for a free guide. Welcome back to squawk alley. We want to check on defense stocks with north rop and raytheon reporting raytheon delivering a beat and raise, up 2. 5 the aerospace and defense has been overperforming. Why . Earnings a time when manufacturing is contracting or seeing signs of it, broader industrial sector lowering global growth, this group has sales growing. Key area to watch, albeit limited fashion, classified, restricted work. This is a theme on some calls we have gotten this week. Going faster than outlays for defense dollars more broadly north rop, building the building that stealth bomber, and raytheon are examples, so is lockheed martin, work on missiles is fueling Big Development deals that continue to grow into next year it speaks to how the u. S. Is thinking of future threats, the idea of strategic competitors in china and russia, how closely it is guarding some of the new technologies, but it would really seem on some earnings calls that it is increasingly turning into less is more, especially with a name like north rop grumman, almost a third of their sales are classified were going to try to complete the transaction with paypals cfo john rainey in San Francisco. John, we got you back. Good to be back all right we got you back. I was asking about the adjustment in your full year guide. The mid point, a little bit higher from my read than a quarter ago, still below what analysts were hoping for walk us through whats improving in growth areas, whats still not quite working as well as some hoped we see acceleration in several aspects of our business. As i was saying earlier in the quarter, volume and revenue both accelerated. We had 27 increase in tpb, our measure of payment volume in our business when we look across the globe at our various products, really theres consistent growth in all aspects of our business. It gave us confidence to go out and give an early indication of how were thinking about next year were pretty excited about what were seeing in the business theres strong growth all around john, venmo a big focus for investors, based on numbers, on track to rake in 400 million in annualized members. Longer term, how does that play out and grow yeah, were, morgan, exceptionally excited about growth that were seeing in venmo, really the attraction it is to the consumer base, being a social payments platform for the millennial demographic we grew volume 60 this year will transact 100 billion in volume on the venmo platform our focus is to create great user experiences, provide additional experiences for the customer base, and get to where it is a profitable element of the business the focus clearly now is on growth john, for so long there were magazine covers about death of cash, cash is dying, cash is dead now it feels like were in a period whether it is venmo or some competitors, legacy credit card companies, look at transaction growth, i wonder where do you think cash is right now in terms of use and in terms of priorities in the customers head we talked about this for years and it is here there are two secular trends taking place one is digitization of payments and second is growth or proliferation of mobile devices. It is where the two come together that create opportunities for Companies Like paypal to expand the suite of Financial Services to large swathes of the population that are really underserved by how we characterize that today. There are Something Like 2 billion people in the world that dont have access to things that you and i take for granted, like a checking or savings account, and the unique aspect of the 2 billion people is that 70 have a mobile device. With that combination together we can put all of the power of a bank branch, all of the Financial Services in the palm of their hand. It is interesting to hear you talk about that. Certainly the whole idea of all the people, billions of people in the world that are unbanked now is very much in focus and Mark Zuckerberg testified on the hill yesterday irealize not pursuing libra or joining that association, you pulled away from it, but in terms of that discussion around the unbanked, what does the opportunity look like in terms of services for paypal sure. If you look at our footprint today, morgan, were strong in some of the more industrialized countries like the uk, u. S. , canada, australia, less strong in faster growth regions of the world like india and places in latin america, certainly africa. Thats where we can take our Value Proposition and digitization of payments and give people access to Financial Services, and importantly access to the online world that they cant experience today without some financial instrument to pay online this is where i think paypals Value Proposition really shines. That leads to my question about apple pay. Recent news it is overtaking starbucks for in store mobile payments, and theyre bumping more against what you do, whether it is paypal or venmo. Do you guys have to get more in the messaging payments stream which is clearly what apple is after, what zuckerberg said he is after, to grow emerging markets and counter a challenge from the likes of apple . Well, look, jon, competition is something that were very familiar with. This is an exciting industry, fast growing that invites a very Competitive Landscape, something that i think were well equipped to deal with and have demonstrated that consistently. In the face of the Competitive Landscape were seeing, were growing at a rate 2 x of ecommerce, see engagement of customers increase 10 year on year each quarter. That said as we look across the ecosystem of people that are competing, many people like apple we partner with, we process a number of their transactions each year thats what we enable by becoming an open Digital Payments platform. We think for us the Addressable Market is so much larger by taking that path speaking of transactions, a lot of investors are buying paypal this morning, up 7. 5 john rainey, the paypal cfo. Thanks for being with us thank you. European markets are about to close here. Seema mody has todays action overseas. Hi, carl. Fresh 52 week highs for the stock 600 and german dax after they left rates unchanged. Ecb president Mario Draghis final policy meeting after 8 years at the helm, he called on countries in eurozone to step up fiscal spending, signaling Monetary Policy alone cant do exactly what is expected a big reason for the move higher in germany, earnings from industry bellwether daimler jumping 8 , beating analyst forecasts, despite Macro Economic head winds. But warned that 2019 earnings would be significantly below 2018 levels, citing weakness in the mercedesbenz Truck Division one notable underperformer, nokia. Plunging 20 after cutting the full year forecast for 2019 and 2020 wiping out gains for the year. Citing tough competition in 5g markets and Competitive Pressure from china in particular i think we know which 5g player theyre referring to. I have a hunch. Thank you. Time for a news update sue herera has that. Also at hq sue . Indeed i do, jon. Thanks so much here is whats happening at this hour, everyone mark esper lashing out at turkey for its military assault across the border and Syrian Kurdish fighters he spoke at the German Marshall Fund in prbrussels saying turkey is running the wrong direction, closer to russia. Turkey put us in a terrible situation. The incursion was fixated on for one reason or another, there was not a possibility we were starting war with a nato ally. Moscow court ordering pale whelan remain in jail until december 29th on espionage charges. He says he was set up in a politically motivated state. Lawyers for carlos ghosn seek dismissal of charges against the former boss of nissan motors. They say it represents an unlawful collusion between the car maker executives and prosecutors to oust him. He is accused of misappropriation of funds and misconduct back downtown to you guys on squawk alley. Morgan, i will send it to you. Sue herera, thank you. More to come on todays big earnings movers, twitter and tesla. Later, why our next guest says Mark Zuckerberg needs to retire. W dmontck in a me doisown ten. Stay with us a trip, huh . Takin it off road station wagon, eh . You know its an suv your family is duckin and rollin. While we stowin and goin but thats cool, i know for a fact your suv does not suck. And why is that . It aint got that vacuum in the back, whoo sucking stuff up what else are we gonna find . We got to go. Vacuum in the back, hallelujah get 0 financing for 60 months plus 2,250 total bonus cash on the 2019 chrysler pacifica. Surprise profit, record deliveries mike volpi is with us. Talking about the quarter. Good morning good to see you. Good morning. Mike, how much to this price action is more than just a short squeeze on the cash position i certainly think theres something of that going on, at the same time, the number is are impressive you look at the number of vehicles tesla has delivered this quarter, close to 100,000, 400,000 vehicle year their march jingins are Getting Better the model 3 is a bit of a staple here in california you see evolution of business going from a niche provider of electric vehicles to mainstreaming, starting to compare to volumes that are quite like some luxury automobile manufacturers out there. You have to take your hat off to them, it is an impressive drive that theyve made. I do believe this is a real car company, not just a niche manufacturer. Interesting farhead bernstein says it is a step forward in validating the long term model. What do you think . I agree took awhile to get here, there were questions along the way on the production side. They are all over it i think the thing to be careful of, theres going to be more competition soon mike mentioned model threes on the road, theyve gotten stale i wish there was an alternative great electric car there are many coming on the market soon. Might be a thing theyll lose the federal tax credit, but it was impressive. I think theyve done a good job. Mike, i wonder what you think about all of the automation claims and the idea of self driving, software and technology that tesla is rolling out in its vehicles, idea of a self driving fleet as soon as next year realistic, do you think that could happen well, lets parse it two ways tesla does some things extraordinarily well separate from the notion of electric vehicle. If you looked at all of the systems, connectedness, the way they do software upgrades, the way it is constantly improved through software, thats phenomenal stuff yes, there is competition but thats unique, will keep them ahead for awhile i think the notion of autonomy is an interesting one. It will be out there i am not convinced it is in the next year time frame, and im not convinced a camera only approach, teslas desired approach is the right one to accomplish that with the right safety standard. If i were to take a guess at this, the time frame from autonomy and for fleets, whether commercial or otherwise that drive themselves are probably more in the two to three year time frame, probably need to be augmented with additional elements of sensors and technology that todays tesla vehicles dont have on board i think thats a little more of the classic tesla paint us a vision in the future, make us think it is one year, get there in three years i am confident theyll get there, i dont think it is realistically in the time frame theyre calling. You have regulatory friction as well. Not entirely in teslas hands. Lets switch to twitter, going the opposite way shares getting hurt on weak guidance, revenue miss, stock is down almost 20 . You had your own personal journey with twitter what do you think when people say a tech company should have had this bug figured out yeah. I mean, the bug is crazy i agree. I dont understand like a bug that effects revenue to that great a degree, for it to go on that way, points to fundamental product problems with the company which we have known for some time, theyre slow on changing and noticing problems with the product. I mean, the network is still in wide use they grew the user base, and it is obviously at the center of news and politics and the way everyone talks about everything. The bug, the product itself points to i think there are problems with this company i really wonder about whats going to happen to it in the long run. Big picture look at where twitter is trading versus ipo price, look where snap is trading. People talk about who is the number two or three in a given market what happened in social . Was there even any is youtube the answer to who became number two in social, at the time it wasnt even considered a social company. How are you thinking about that as you look at potential investments on the vc side look, realistically it is really hard to think about a number two to facebook, in particular because of the case of facebook it is more than one product, you have facebook and instagram. You can argue facebook is number one and instagram is number two, all in one company i dont know that you can claim a number two definitely the landscape is very covered now. As a venture capitalist, thinking of investing social is extremely tricky now i do think if you compare the two smaller guys, snap and twitter, i think snap has demonstrated higher ability to do innovation on their product whereas the Twitter Product feels pretty much the same it was, one of the challenges, he brought up the issue, they have to be operationally better one of the challenges is that the company is basically the same company it was with the same product it was three, four years ago, and the innovation flywheel doesnt feel like it is moving for twitter for snap, it feels like something is going on there. If you want to call them number two, i would have better expectation around snap. Lastly, cant talk about social and not talk facebook you published this oped Mark Zuckerberg, have you considered retirement . Break it down for us i just think zuckerberg is in a no one situation we saw it in congressional hearings yesterday he went to talk about libra, no one wanted to talk about that other than to badger him on every other thing, which is legitimate, right . He is one of the most powerful people, one of the most wealthy people in the world. Feel like he is also unsure what to do with his power were in a tough spot where everyone, republican, democrats, regulators, everyone in the Tech Industry agree that Mark Zuckerberg has too much power, and Mark Zuckerberg is the reason, dont know what to do about it a strange situation. I feel like as we go through 2020, his position will become tougher and tougher. Google guys solved this by going away larry page and sergei, they arent heard from any more maybe thats what Mark Zuckerberg should do that is one way to go youre absolutely right. Time will tell great stuff, guys. Good insight see you soon thanks. Reminder, dont miss snap founder evan spiegel monday in a cnbc exclusive more squawk alley straight ahead. Stay with us at Southern New Hampshire university, we believe in education built for all people. [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Woi felt completely helpless. Hed online. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. I am scott wapner. Hear me out. Is microsoft now the best large cap tech stock for your portfolio . Just might be. We debate that and dan greenhouse is back he says the risk in the market is to the up side. Bill polti, why he is giving away a Million Dollars on twitter. All at noon on the half. See you in 15, little less than that all right, scott. See you then were going to keep talking microsoft meanwhile. Their shares are up nicely this year, havent moved much in four months muted reaction it is still in the trillion dollar club with apple with us to breakdown the quarter, Walter Prichard of citi good morning hi, good morning. Is this just a case of microsoft had gone so far up there, even with positive earnings there wasnt much room to move or are investors taking a worst Case Scenario look at cloud somehow, looking maybe at the azure number and wishing it were higher . It is more the former theres a mounting fear in tech and software the last few weeks. I think everybody flooded to microsoft as a sort of insurance. I think thats what youre seeing there isnt in the short term an incremental buyer. What should investors focus on when looking at microsofts growth areas theres not just azure, theres microsoft 365. Office growth. I wonder if investors ar looking closely enough at all of the Different Service type revenues that microsoft is getting and strength in those. I think the way with the Large Companies in the market a long time, they have a large existing revenue base, what investors want to see is they can transition into the new cloud era. You look at microsoft, they have a large on print server business that grew nicely in the quarter. There are factors driving that, maybe unusually high in terms of growth rate, but i think investors want to see somewhat of a growth handoff between the old business, server business and new business, which is azure. To some degree i think they need to be looked at together as well as you have an office in similar other businesses, old business and new business. Okay. Theres a lot of focus on company spending, tapping the brakes on capex and other investments, looking into the future would microsoft be immune to a slow down . I think ultimately they wouldnt be. The most recent work we have done suggested that cios, chief Information Officers did acknowledge the macro environment is getting worse i would say the last survey data, budgets appear to be stable what were seeing now is a sign of stability after having actually gotten worse throughout the first half of 2019 i think people will be looking at what happens in 2020 and generally have new budgets set in three or four months from now. I think generally we see companies that have large amounts of large deal exposure signing multi Million Dollar deals as percentage of revenue being more exposed microsoft is not in that camp, but ultimately nobody would be immune. The service work across the street from citi looking at kpch expectations next three years, you dont put much weight in those . What we see, we focus on last 12 months, next 12 months spending index what we have seen is stability in terms of next 12 weve seen from that perspective in terms of next 12 months spending growth looks like the last 12 months spending growth mind you that versus where spending growth was a year ago have ticked down things have ticked down versus what weve seen in 2018. We havent seen things in the last one to two months tick down further. Meanwhile, microsoft trading pretty close to 140 a share, up about 2 walter from citi, thanks. Thank you the tech earnings spread continues after the bell with az s tamoneto report well get a preview of what to expect after the break dont go anywhere. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Amazon earnings are after the bell josh lipton is in San Francisco with more on what investors and analysts are expecting josh here is what the street expects from amazon after the close today. Q3 eps of 462 on revenue of 68. 8 billion. If thats right, thats a jump of 22 on the top line stock is up nearly 20 this year, but since amazon last reported results back on july 25th, its down about 10 and that underperforms the s p 500 which is basically flat over that same time period. Analysts highlight a couple issues a potential concern, they say checks indicate healthy u. S. Ecommerce spending trends throughout the quarter but they also note that amazon continues to invest a lot of money to reach one day shipping goals how much does that weigh here on profit marginses the growth rate for aws, its Cloud Services unit, increasing competition from big cloud rivals like microsoft and google, they are looking for aws revenue here of 9. 1 billion and that would be a jump of 37 . Thats the same growth rate as last quarter microsoft just told us that azure, its answer to aws, jumped 59 , remember, though, microsoft doesnt disclose azure revenue in dollar figures. The street is interested to hear about the companys increasingly important online ad business too. Last quarter the socalled other category which includes that business jumped nearly 40 sebastian says thats a fast growing, really profitable business, and theres growing optimism he says among amazon investors that the company can take share from rival google, back to you. We talked about all the different places where amazon is spending and certainly they have so many different businesses to talk about i mean the streaming wars, how big could the content piece of the spending puzzle be listen, its a market everybody wants to compete in, obviously. Amazon, apple soon releasing its own streaming service, disney too. Obviously theres a lot of competition there. We asked what that means for costs to secure that content does that mean more players bidding on it and is there a ceiling with that and more competition on how much you can charge as well with apple and disney and others undercutting each other another thing to think about government scrutiny here and abroad if you talk to analysts, their concern isnt that amazon will get broken up but the near term is what does that mean for innovation and acquisition, and how much distraction is that for the company. Maybe well hear about that on the call later today too. Another wild card is projected shipping costs we are right ahead of the holiday season. Oh, yeah. Interesting to see what they have to say about that. And theyre not working with fedex for most of their contracts anymore either but still, speaks to the fact that theyre building out their own transportation network. We will watch that. Headlines from the Vice President hitting right now. Stocks are in a holding pattern. Dow down 34. Back in three minutes. Who says our bank isnt tech enough . Everyone, look at your phones. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. Woman what gives me confidence about Investment Decisions . Rigorous fundamental research. With Portfolio Managers focused on the long term. 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Overall it tends to be dovish, says u. S. Not seeking to contain chinas development, not seeking to decouple the u. S. Economically from china but does say a couple things about individual entities, namely nike one headline says nike has checked social conscious at the door regarding hong kong and a bit on the nba saying that in siding with the Chinese Communist party and silencing free speech the nba is acting like a wholly owned subsidiary of the authoritarian regime. These are just headlines wait to see what he fills it out. To the judge and the half. Thanks. Im scott wapner front and center, a question five years ago would have seemed unthinkable. Is microsoft now the best stock to own in tech it is 12 noon and this is the halftime report. An earnings avalanche big beats and misses what the latest round of results mean for this market amazon and intel getting ready to report after the bell the traders take their position. Southwest airlines posting a strong beat, despite a hit from the boeing 737 max grounding the flight path ahead for the stock an