Christian all brick ulbrich joins in just a bit. I am Katie Garfield in new york. Welcome to bloomberg markets. We have a green start to the week with the s p 500 up about. 6 . If you take a look at the nasdaq 100, we are talking about. 6 . We have another big week of earnings coming up, so we will continue to watch these lines. Meanwhile, on the bond market it is a quite start to the week, the 10 year yield unchanged following a big rally. We are sitting at about 4. 5 percent. One stock we are keeping an eye on is apple after Warren Buffett praised the tech giant over the weekend. He said apple is better than American Express and cocacola. Despite that praise, buffett revealed he cut his stake in the tech giant. He said a lot of things about several different companies. Sonali he did. When we come to apple, that was one of the biggest headlines because he did praise apple despite trimming his stake. He hinted at tax implications. If you are facing a 21 tax rate, he says your tax rate as a corporation and investor are likely to go up in the future and it does make sense to start selling more today than you would in the future, so he did hint at tax implications. Apple has been on quite the ride. It has been a big boost to the portfolio since he took this stake years ago given that Berkshire Hathaway was not traditionally a Large Technology investor, yet he has loved apple and still says he loves American Express and cocacola. It is still likely to be one of the Biggest Stock Holdings in the portfolio at the end of the year. He also said, on the converse side of things, the sale of paramount was his decision at the end of the day. Paramount shares this morning are rising in reaction to the idea that paramount would be open to thinking through potential offers from sony and Apollo Global management. Paramount shares still up more than 4. 6 . If you look at shares over a fiveyear period, the stock has been down closer to 80 , so the concern here was the shift that paramount was making from Traditional Television to online platforms, which has been a difficult shift for and others. A tricky merger in a trick industry. Lets talk about the cash as well. 180 on billion dollars and he said 200 billion dollars does not seem far away. Sonali he said they could be at 200 billion dollars in cash by the end of the year and come out when it comes to Berkshire Hathaway, they are making the megadeals at times of stress. Think back to 2008. In the most recent downturn, berkshire was noticeably absent. A question that pervades is does berkshire face more competition from private equity than it had in prior years . And berkshire still do massive deals moving forward under future leadership . Succession was a major story at the annual meeting and a lot of credit given to the heir apparent over at Berkshire Hathaway who said he would be in charge of the keys and making decisions like that. Time will certainly tell. Its turn to the broader markets. Lets pick up on that thought. When it comes to Warren Buffett, Berkshire Hathaway has a lot of cash and nowhere to go. Does the average investor have the same problem . Know. Thank you for having me. I think there are still a number of attractive places to invest in this market. We focus on the seven, but there are a number of areas where you have High Quality Companies taking the ai story. I think there are places to go. I am not going to disagree with Warren Buffett. He has his own strategy that has worked brilliantly, but we like apple here. I know he does too, but i think you just want to hang on. Manus lets talk about that area of agreement, apple. Everyone will focus on him trimming. Maybe it was taking some profit, tell us about your faith in apple now. His comets were interesting after apple earnings. We had been trimming over the last five years because destocked got to an outsized position. As i wrote about, sometimes you think you are doing the right thing as a Portfolio Manager but you need to hang on, so we view apple as one of the stocks you can own for a lifetime, not just because of fundamentals but because with the commitment to buybacks they put a floor under the stock price and the latest announcement is supported by free cash flow, so we think you on this stock for the fundamentals, less overgrowth, but it is the defensive name now and we consider it one of our defensive holdings. That is why we continue to own it. Katie that is a fascinating point. One of the themes this year has been the subversion of what is a Growth Company and what is a value or tech company. When it comes to apple, one of the criticisms of the buyback is longterm shouldnt you be spending this on product development, something other than share buybacks . It sounds like if you shift how you are thinking about apple may be that is not a huge concern. Nancy i am not crazy about buybacks. I would like to see them invest in future innovation and return capital to shareholders because that is more reliable and see that dividend grow more than a penny a share, but it does put a floor under the price of the stock. What we heard from a separate ceo was we cannot invest for the future and be profitable. That is what we need to see from apple, innovation. Tim cook has been at this for a long time. We were buying the stock in 2014 when everybody was saying it is just a handset company, but one of the things you know about tim cook is he is not a plasterer blusterer. He said, we have advantages that other firms do not. That is one of the other reasons the stock was rewarded. Nancy katie so do not necessarily count tim cook out. Lets zoom out from apple and talk about the broader stock market. Looking through research this morning, you had a note from mike wilson saying you did look at the broader market. The place you should be is defensive sectors such as Consumer Staples and the Economic Data we are getting is mixed from the fed perspective. I would be curious to hear your take on it if you look at your portfolio now. How are you thinking about your Sector Allocation . Nancy we thought the economy was slowing down before we got the gdp number and we thought the labor market was softening. One of the things you have to do is know how to pivot and we think i would rather own a Technology Company that has continued to deliver reliable Earnings Growth in 2022 and 2020 for than a consumer staple trading at a similar multiple and growing in the low single digits, so i think some of the Technology Names are the new defensives and the consumer staple names are expensive. We do on walmart and pepsi. We own these stocks for the next three to seven years. Walmart has demonstrated inability to embrace digitization to their demonstrate an ability to embrace digitization to their advancement. Katie we are going to take a quick check on what is moving under these markets with bailey lipschultz. Not a great monday for tyson foods. We saw stocks higher, but then you look at the analyst call. Management saying it would trail with the usda was projecting. They said u. S. Chicken production issues are not a shortterm fix, so when the stock started out up a few Percentage Points and now dropping, the biggest drop since august, uncertainty also about the ability to sell packaged goods. Think about chicken tenders and different types of breakfast meals. It seems like the stock that did close at a greater than 52 week high getting back a chunk given the uncertainty. Katie i do often think about chicken tenders. Rough day for tyson. A different story when it comes to fresh pet, executing well here. Bailey the big thing is executing on their ability to focus on profitability. It is one of those companies that caters to i do not want to call it boushey bougie pet parents but it is. It is trying to sell consumers to treat their pets like humans but it does seem like it is working with stellar results. The best is ahead of the company, up about 75 in the last 12 months, so really a winning move for this company and betting on consumers continuing to spend on pets. Katie it is fascinating to see where the pockets of resilience are and clearly fresh pet found their pocket. We have not heard yet from palantir. Bailey we have seen the stock up triple digits. The focus is on Artificial Intelligence and ability to offset weakness for government contracts. This is a company that jumped 30 after results, options pricing in a 15 move. All eyes and ears will be on what management talks about around their ability to beat expectations. The sell side is ahead of what management has guided to, so beating expectations will be the narrative for all things ai. Katie definitely a high bar to try to vault over. Thank you. Coming up, the former starbucks ceo has a lot to say about the earnings flop. This is bloomberg. [female narrator] they line up by the thousands. 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Katie former starbucks Ceo Howard Schultz is urging big fixes at his company after shares plummeted following his first sales drop since 2020. He is still the fifthlargest starbucks shareholder and wrote, any company that misses badly, there must be contrition and renewed focus and discipline. Own the shortcoming without excuse. Joining us for more is michael intelligence. Have we seen that contrition . I do not think so. I think there are a lot of excuses. So there was a lot of excuses. It seems there was a lot of panic, a lot of initiatives being thrown at the wall. You quoted howard and the sentence after that he talked about trying to do too much. That is what we wrote. Howard may have read our earnings review. There is a lot of trying to draw in overnight sales and four week upgrade cycles and some of these throughput things they are talking about that we do not think are going to move the needle. I think management needs to look at the mirror and take some accountability for the numbers they posted. Katie i read the earnings review. In his post, he did not name the current ceo by name. It was not a specific call out, although he did speak to the current management. What do you think the future of this csuite is . Before that, lets keep it real. Howard, i have a lot of respect for what he built. After he hired him, he had an investor day and outlined these plans that have been in motion since september 2022 and raised longterm guidance, setting him up for a difficult entrance into the business, very high expectations, so right now plans are scattered, many of them contradictory. They are talking about china and trying to turn things around but they want to keep premium positioning and move into lower tiered markets. Those things do not drive, so come because of that, i could see activist involvement in this stock. Katie it is going to be fascinating to follow. Im sure we will speak with you about this soon. Take a look at shares now, down about 23 year to date for starbucks, definitely a rocky year so far. Lets welcome back nancy tengler. When it comes to starbucks and other consumer focused businesses that have reported in the past couple weeks, i keep hearing the word transition and how this is a transitory year and a lot of blaming of the macroeconomic environment. How are you reading these reports . How much should we stock up chalk up to the macroeconomic environment . Nancy i am working on a piece now titled and you thought golf was frustrating. This is a Company Specific problem. It feels reminiscent of disney, where you have the iconic founder who leaves and comes back and now he is undermining his handpicked successor. You said, starbucks aside, we have not figured out what we are going to deal. Mcdonalds reported disappointing earnings. Chipotle, in our 12 best ideas portfolio, was able to raise price and volume. It matters what you own in this environment. The consumer is being discreet and careful in their purchases but still spending. We heard that from amazon. Consumers were spending but becoming more pricesensitive. You need to be with great management teams ahead of the trend and not behind it. Starbucks is behind. Katie consumers are still spending. Take a look at fresh pet earnings, a Strong Quarter even though it is expensive pet food. Looking through your list, we are talking about ceos out there. When it comes to apple, you would not underestimate tim cook. When it comes to tesla, that is another ceo that is dangerous to underestimate. Nancy and i have done it, to my own peril many years ago when he was sleeping on the factory floor and his lieutenants were quitting right and left. I thought, this is no longer investing, this is gambling. I think what i have learned about elon musks he thrives in chaos, the kind of chaos the rest of us run away from so you have to really dig in. This company is trading as an electric vehicle company, but look at the business which is utility grade Battery Storage and that business is growing faster and is more profitable than the rest, so we think the Company Looks different in the next three to five years. Robotaxis is not really up my alley. It is happening. The question is how long it will take for the rest of the world to adapt. Katie also on your list you have uber, stepping up to the plate in a couple days time. It has been a strong run for uber. Do you think the company can keep that momentum going . Nancy i do. Recently, it has been weak and it is on the anticipation. The ceo is ahead of the curve. It is growing. We will see where we go from here. I would not buy in advance of earnings, but if you get weakness, depending on the issue , if it is a starbucks epic minutes, then no. If it is really from the market, i think you step in because they are a long terms a longterm Earnings Growth story. Katie always great to speak with you. Still ahead, we will take a look at the Companies Making the most social bus today in our social climber segment. Pittsburgh. Is time now for social climbers making waves on social media but hood has been warned and may face an enforcement action tied to his cryptocurrency dealings. The result could be an injunction. Robinhood says it is cooperating with the investigation. Despite problems on earthly terrain, boeing will attempt to send humans into space. After years of delays, the plane manufacturer will launch two nasa astronauts to the International Space station later today. If the launch is successful, boeing could challenge space x, which has been very nasa astronauts varying ferrying nasa astronauts. Box office sales have remained a third below prepandemic levels. Analysts say it is possible that no film tops 1 billion this summer. That would be the first time that has happened in over 20 years. The biggest challenge for theaters is getting film buffs off of their couches. You can follow the latest company buzz on your bloomberg terminal. Take a quick look at markets. The s p 500 is holding onto those gains of about. 6 . Coming up, a Global Real Estate giant posted a strong first quarter. We will speak to the companys ceo next. Ning here. Productivity is growing exponentially. Thats because cdw configuration specialists are deploying fleets of Microsoft Surface devices. Built in security, simplified management and flexibility help streamline busy work, which means everyone can get more done. Make amazing happen. Microsoft and cdw. Katie the International Real estate giant jll posting a strong start to 2024. The complaint handily beating estimates and generating over 5 billion in revenue. Joining us now in an exclusive interview is Christian Ulbrich, the jll ceo. Great to have you with us. Adjusted eps coming in at 1. 78, the estimate was for . 88 so i will go ahead and call that a beat. What drove that . Christian we worked very hard last year to increase productivity in our platform, and we were not very optimistic about Interest Rate declines. So overall market expectation was ended on more muted than the average was. For that we prepared. And we had a pretty good performance on the top line. If you put these two things together, you can deliver those types of numbers. Katie it sounds easy when you put it like that. I think more companies to do that, but lets talk about the different business segments. My understanding is you have Office Leasing down so i am curious where you are growing your other businesses. Where is the most growth coming from right now . Christian the strongest growth is coming into our work dynamics business and our Property Management business where we had a 12 topline growth and also Strong Performance on the bottom line due to the productivity measures we did over the last 18 months. And then Capital Markets ca