Like with like. As for the streaming numbers, Fourth Quarter streaming paid change plus 8. 76 million 8. 6 7 million subscribers. We estimated 7. 6 5 million. Disney plus and apple plus launched their services and people worried and fretted over whether netflix would lose subscribers, that does not appear to be the case. Netflix has plenty of momentum. Was eightbscriber ad point seven 6 million when you include domestic and international versus the consensus estimate of 7. 6 5 million. Joe so far we see markets liking the response. Obviously, up 3. 5 . That change to streaming additions obviously, the key number that people want to see. Scarlet as for the First Quarter, this quarter right now, netflix is giving a forecast of seeing an increase of 7 million. Analysts were looking for an increase of 7. 8 2 million. A little lighter than what had been anticipated. Analysts had made a point of noting the guidance for the First Quarter faces tough comparisons. Netflix added 9. 6 million users. Pretty hard to top that. Netflix Still Holding out 1. 1 pure lets dive deeper into the action with our reporters. Abigail, get us started. Abigail we have declines for stocks on the day. Fears around the coronovirus. The laggard from an index perspective, the dow transports down 1. 8 . The worst day in almost two months. This has to do with the idea that if this coronovirus continues to spread, it could put a halt to travel tourism, loss of Transportation Companies within this index. This could be a tell of what may be ahead for the broader indexes. That could be true because they had a lot of alltime highs. We see for the dow transports over the last 12 months, a range. Right above that range, but suggesting that the dow transports could drop back down into the range, if similar to the last drop that would be 10 or so. Look at that rsi coming down from overbought territory, right down into the rsi range suggesting there could be a drop ahead for the transports on these headlines. Renita thank you. The escalating Virus Outbreak is sending copper lower. Copper is being impacted. Because it is stirring up growth concerns in the Worlds Largest consumer of copper and user of industrial metals. Copper futures are down almost 2 intraday. Record metals output from china also weighed on copper today. The bloomberg metal industrials metal sub index, which tracks copper, aluminum, zinc, and nickel flipped today. It is still up for the year. Taylor i am a course taking a look at shares of netflix. Looks like they are fluctuating currently between gains and losses. Scarlet and joe highlighted the revenue for the Fourth Quarter, higher at 5. 5 billion. The First Quarter revenue guidance, looks like it is weak at 5. 7 3 billion versus estimates earlier of 5. 7 4 billion. I would note the one key thing we continue to wait on his average revenue per user and international profitability, given the domestic markets mature. It is a more Profitable Group of users. Some of the International Market which continues to grow at a faster pace. Maybe it is the First Quarter revenue guidance, some of the average revenue per user that we are waiting more details on. I want to look at a chart that im showing inside my terminal. We have another story out about netflix. It is all about david einhorn. He was raising his short position on netflix and the court in the Fourth Quarter giving the increase in competition. We do know that now 10 of equity flows outstanding is being shored in. Beinge getting 10 still shorted they are even as the stock continues to rebound. Today, again, with these earnings, waiting for average revenue per user numbers that should be coming out as well that will really dig into the profitability numbers that analysts are looking for. Scarlet im going to pick it up from here. Thank you so much. Especially with a round of netflix. We have more earnings coming out. Ibm is the latest one. Fourth quarter revenue, 21. 8 billion, beating the estimate of 21. 6 billion. Also two cents higher than anticipated. You can chalk it up to cloud. Cloud and Cognitive Software revenue, 7. 24 billion. The other parts of the business, aside from systems revenue, miss the average analyst estimates. Global technology services, Global Business services revenue, both of those coming in shy as opposed to what analysts for. Looking cloud coming in higher than expected. That has lifted the eps number as well. For 2020, ibm sees operating eps of 13. 35. Analysts were looking for 13. 29. Joe still with us is senior markets editor Michael Regan and Putnam Investment cohead of global Asset Allocation jason voll court. Jason, we have been talking about netflix and ibm earnings. How much pressure is there on big tech to deliver in terms of holding up overall market multiples . And do you think that a by a large, they are in a position to satisfy what the markets want given the extraordinary gains we have seen . Jason yeah, i think the contrast is very important. Two very different companies. I mentioned earlier cloud spending as a portion of budgets in general with Largecap Companies has been important. As opposed to the numbers i have seen, close to half of. Ibm is in a good place. Where we take a more dim view would be in the speculative growth names. Like netflix, tesla, where there is momentum there, yes, but let Earnings Quality numbers in the Balance Sheet numbers and the ability to generate profitability at some point in the future is very much in doubt. Scarlet mike, how do you look at netflixs results . It is not even a technology stock, is it . Mike consumer stock, yeah, if you are worried about tech as a relates to the overall market, netflix can go here or there. It is those big four or five, alphabet, apple, microsoft, facebook, those mega dominant players. Especially with alphabet, the growth picture there still looks very solid. All up and down the line for the top four of accounts of the huge percentage. They look like they are in that position for a reason. That the growth is stable, it will continue. Netflix i think can hit or miss and not really sour sentiment for the entire space, where the others perhaps could turn aside. Joe jason, what else are you looking for for earnings season . We have been talking about overall, tech. Are there any areas of the market that you think investors should be more interested in than they are now, where maybe things will be surprising to the Positive Side . Jason i think the big large Global Industrial names are important to watch as we go through the next couple of weeks. Those companies that have been exposed to the frictions of the trade war with globally integrated supply chains and do their sales outside the u. S. , to see any evidence that there is the bloomberg orange book in terms of tracking commentary will be very important as we go through the next several weeks to see if companies are able to look through that and get some indication of what of what the first half of 2020 will look like for those companies now that we have signed the trade deal. Scarlet we have signed the trade deal, we have not solved any of the persistent problems between the u. S. And china. How come the headline we got today from china that there is no timetable set for discussions on a phase two or further trade discussions, how come they did not hit the market harder in any way . Jason you know, i think so much around this has been about laying out a mechanism. What do we know from the commentary from u. S. Trade representative lighthizer is that it is very likely that there will not be very higherlevel going through and confirming the metrics of the purchase numbers that were agreed to probably until the first half of the year. That hashat is just just removed it from the conversation until we can go through ansi and see if the robber has met the road in terms of the size and volumes of the purchases that have been agreed to. I dont think there is a lot to talk about with respect to trade until that happens. Withmike, we are in a lull respect to ecodata. There is no trade deal that needs to be signed imminently. We dont have to worry about that per se. Will earnings be the top story for the markets for a while . Mike absolutely. I think we showed that with netflix coming out and ibm. You see the markets move instantly, you see the futures following netflix along the way. This virus story happened on a monday. When there was not a lot of earnings to talk about. I think it does bring the focus back to the fund metals now that earnings are back on the table. Scarlet and it looks like this is a little bit of, if you want to call it profittaking, but it was not much of one given the lower. Closed barely our thanks to senior markets editor Michael Regan and cohead of global Asset Allocation jason vallen court. That does it for the closing bell. What did you miss is up next where we will dig into fourthquarter results from netflix and what it signals about sending ahead. From new york, this is bloomberg. Scarlet live from bloomberg World Headquarters in new york, im scarlet fu. We come off of our highs. The dow off by. 5 . Russell 2000 falling further. We are still near record highs. Joe the question is, whatd you miss . Scarlet netflix hits pause on its host on its subscriber growth. Misses analyst estimates. So it begins. President trumps impeachment trial formally started in the senate with senators already locking over the rules. And going green the World Economic forum has something new topping its agenda. The environment. Intolets get right netflix earnings. We are joined by paul sweeney, cohost of bloomberg surveillance and markets for bloomberg radio. You know this company very well. It looks like the market is selling off a little bit after hours, may be reacting to the q1 subscriber forecast. Down a little bit from expectations. What is your take on this . Paul a pretty solid quarter. The stock is up 33 from a last september lows. It has had a nice run. Looking back, a very good Fourth Quarter. Subscriber numbers came a million above where the street was looking. Strong beat on the eps line. Revenue was not lying. Looking ahead to the First Quarter, the eps guidance is very good about the net streaming subscriber add numbers are coming lower than where the street is expecting. You have a couple of ways to look at this. The stocks trading down slightly. It has had a really good move off of a low. I think the real key issue on the Conference Call at six or wall street time will be reed hastings, talk to us about how you think the Competitive Landscape will develop here . Scarlet and perhaps netflix is being more conservative. Do they usually come in and lowball guidance the way apple did for years . Paul they typically dont. They say listen guys, this is our best guess of how we think subscribers will go up. There is some seasonality. We try to factor in new markets. Sometimes we get it wrong. And on either side. That is with the stock around historically, around earnings since the company has been public. Now they have the added uncertainty of competition out there. When disney launches and apple tv launches in this quarter that they finished and next year they have hbo max and so on and so forth. That will make it more difficult. Scarlet just to repeat the numbers, First Quarter streaming paid net change of 7 million subscribers. The first order of last year was an incredible quarter. They added 9. 6 million user in that users in that period. They said they would see a drop in 8 million users would be more likely. Joe the company note in the earnings that it is still Free Cash Flow negative because we know it is investing like crazy on all kinds of new content. That is an old story. Is not improving . Is there science that at some point not only is it earnings part of earnings positive . Paul though Free Cash Flow negative amount last year, and it will get better and better probably by 2022. The street is forecasting to breakeven on a Free Cash Flow basis. What do they do to fund all the billions of dollars of programming every year . They go to the debt markets. They have been a big borrower on the high yields and the markets have been open for them because there is 150 billion dollars of equity value underneath the bondholders. They feel comfortable. Even though there is no Free Cash Flow today, there is a lot of equity support. Joe something i noticed in the earnings, theres only one man of the irishman, it did not say a lot about it. Im curious whether you think funding the very expensive future quality cinema style movies is going to be a growing part of the business or will these be rare and we will see more shows . Paul i think they feel like content is going to be a real key differentiator. Disney has great content but they are starting to scratch. They write the biggest checks in hollywood for the alist talent. That has been their strategy, it is generally looking working. Scarlet youscarlet mentioned that most shares are struggling. The worst performing faang stocks, down 8 10 of 1 . What was dragging you down . Was it fears about competition or was it something more substantial to the company itself . For instance, the negative Free Cash Flow. Paul the real differential on the trailing 12 months was new competition. The anticipation of new competition. Disney had a good successful launch of disney plus. The fear of competition brings up all the other more fundamental issues you mentioned, like the fact that it is not making money on Free Cash Flow. Like that their cost of programming continues to escalate. They brought up those fundamental issues. It will simply be a question of how many subscribing services will the market bear . And will netflix be one of them . Most people feel comfortable that never licks will be one. Scarlet how many subscriptions do you have . Paul im going to say two or three. I dont even know and i have four kids so i really dont know. Scarlet you do the complete bundle. Paul exactly. And plus the cable bundle. Joe thanks to bloombergs paul sweeney breaking down netflix. Coming up, last week we had five days of market records and economic indicators. Is that data justifying the strong start to 2020 . I will talk to neal dunn up. This is bloomberg. Joe last week ended on a string of strong u. S. Economic data. Number for consumers sentiment came in with impressive superlatives. Houses surges to the highest level in a few years. Of this recent data justify the market rally . Here to take us through that question is neil dutta, head of u. S. Economics at renaissance micra research. Thank you very much for joining us. There is this big debate about whether the market is being driven by fundamentals or whether some sort of Balance Sheet, qe, repo something bubble, you come down on the ecocide. Neil i think there is not much evidence other than ridiculous linear correlation charts about the fed driving everything. I think the fed is a small factor in putting a floor under sentiment. Ultimately, if you look at how the markets have behaved over the last year, they have been rallying on days of good economic and earnings news. And also, on days of the towns around the trade issues. I think those have been the primary drivers of u. S. Equities. I think the fed has a smaller role to play. Joe people love to talk about innings or late cycle or whatever that is. When you look at the data, do you see any particular reason that we must be getting near the end of this expansion for some reason or another . Neil no. The expansion is old in terms of its duration. It is still relatively young at heart when you look at cyclicals, components of the economy. You mentioned housing earlier. Residential investment is well below what you would expect in terms of longer run gdp. Auto buying even. We keep lamenting the weak Capital Spending environment and inventories that are quite lean. There is no area of cyclical access in the u. S. Economy right now. What goes down if you have a recession . I dont really see it. Joe do you see in these cyclical areas on these questions like Business Investment, do you see any prospect for reacceleration or is it going to be like what we have seen over the last decade . Which is not terrible but not amazing. Is all about what is priced in on what the likely outcome is going to be. If you look at your own Bloomberg News consensus for gdp, the consensus has growth basically rounding under running under 2 . That is a conservative forecast considering he mentioned capex. Thirds oil prices have rebound. My guess is mining structures will not be as much of a drag this year as it was last year. A headwind that his faith that is fading. Inventories are likely to swing in a more positive direction. Commercial real estate is likely to be stronger. I think 2020, you will see more improvement from the cyclical sectors. Pushshowed, i think, estimates for gdp growth higher this year as the year progresses. Housing,he residential are we under house . I know that was a big bowl case, an argument from the bulls that there was this inherent tailwind because we hat because housing got so depressed postcrisis. Is that the natural thing that will keep the market healthy . Neil if you look at demographics, we are sure to several million households. I do think we are in an excess demand environment for housing and that will continue to underpin construction for a number of years. The housing data in the last week has basically made the recession of 2019 b