Josh lipton talked to tim cook last night after the earnings print and joins us this morning. Josh reporter carl, investors want to see iphone trends improving. Thats what they got with the latest report. Iphone revenue dropped 9 in q4, but revenue dropped 12 in q3. Ceo tim cook telling me for iphone specifically we improved year over year performance even more compared to last quarter, and significantly compared to the first part of the year, and we are off to a really good start with the iphone 11, iphone 11 proand iphone pro11 max i asked about tariffs and trade tensions cook tells me he did not ship more iphones here to the u. S. To try to get ahead of potential new tariffs in december, nor does he plan to, as analysts know that means recent positive supply chain data points represent real demand. More broadly, cook is optimistic a trade deal gets done, saying i am still optimistic in the end there will be agreement between the countries where it will not solve everything, it will be a better position than where we are or where we have been. Speaking of china, i asked about removing the add that helped protesters track police. Apple said the app was used to ambush police. Some u. S. Lawmakers criticized apple for the decision, cook telling me we have to make tough decisions. If the app would have been in the u. S. Doing the same thing, we would have removed it in the United States as well. As for services, theres a big new one on the way, apple tv plus launches tomorrow would cook consider raising the price of the service cook telling me 5 is a starting point, in his words, well see what the future holds. Back to you. We sure will. Thanks. Door see versus zuckerberg Twitter Announces it will ban all political ads on the platform as facebook announced big earnings beat. Julia boorstin has more from los angeles. Reporter dorsey and zuckerberg facing off. Dorsey said he is stopping owl political ads. He started with a dig at political advertising, and defense it is key to free speech he said this isnt about free expression, it is paying for reach and paying to increase reach of political speech has significant ramifications that todays democratic infrastructure may not be prepared to handle its worth stepping back in order to address and zuckerberg saying it is not a political decision, theyll be less than 1 of the companys revenue, saying it is commitment to free speech so over the next year of campaigns were going to be at the center of the debate, anytime theres consent or policies on any of our services that people believe could advantage or disadvantage their side this may lead to more investigations and the candidates are going to criticize us i expect this is going to be a very tough year. We try to do what we think is right but were not going to get everything right facebook shares are trading up about 2. 25 on earnings that beat expectations on every metric, revenue, earnings per share, user growth and engagement facebook gave stronger than expected guidance for next year with lower Expense Growth than anticipated. Carl, back to you. Julia, that sets it up nicely to dive deeper into facebook and apple, jim suz a, and mark mahaney. Good morning good morning. Mark, lets take facebook you went up to 270 on your target on the twitter thing, are we making too much of the political ad given the. 5 zuckerberg talked about on revenue . Probably. I thought it would generate more revenue for facebook than zuckerberg indicated last night. I think hes sort of indicating less than a half billion in revenue for facebook i would think they could do 2 to 3 billion. I think it is an extremely useful tool for political advertisers. Im a little surprised the number is that low given it is that low, were probably making too much of it i think the point of increasing level of transparency. We have seen attack ads but usually transparency theres a way for facebook to amplify to see who is running that campaign, that would be useful for all people to know. Why is jack doing his thing then i think it is almost immaterial for twitter so it is an easier call on twitters part i think thats largely it. It is easy to dismiss ad revenue when it accounts for, if it is. 5 for facebook, it is probably. 1 for twitter i think theyre making the wrong call but thats a political view more than anything else. I was looking for reasons to be worried, concerned heading into apples quarter, particularly with tariffs, would they manage inventories differently. Tim cook blew that and a number of concerns out of the water given the really Strong Performance of apple that they just reported and the pretty strong guide, whats the bear case like . Well, the bear case is left you look at what the stock chart did to stock price and valuation metric known as price to earnings, it is materially expanded so some investors are wondering hey, whats left still for the up side. We face head winds with tariffs coming in as you said, but also to be fair, iphone sales have been declining year over year for four quarters in a row consecutively. You have to start to wonder about the installed base which tim cook mentioned is still growing, which is great, but at some point apple has to get back to growing its iphone sales. We think it may be in a few quarters from now, but simply put, the stock had a fantastic run, up over 50 year to date, meaningfully outperforming things look good but it is no longer a value stock like it was a year ago mark, instagram has been such a bright spot for facebook, such a source of growth comments from zuckerberg on the call last night that antitrust questions out there will be around the acquisition of instagram, how do you think this plays out, is this a situation where the most extreme scenario takes place for instagram, regulators say instagram needs to be spun off or broken up, what does that look like for investors and for the company . Thats probably a negative for investors. I think instagram is a key part of growth of the company, but if you step back, i think you saw accelerating ad impression growth, fastest in a year, 37 it occurred on core facebook i think investors underappreciate how much growth there is on core facebook, you layer in news, shopping, stories. There are three or four new Growth Drivers on facebook and by the way, you had accelerating ads, number of users on facebook in three of the four largest markets it tells you theres good Sustainable Growth at facebook here is instagram growing faster, maybe 50 faster than core facebook, has interesting commerce opportunity ahead of it as well. We like the combination. It would be a negative for investors if there was a forced did divestiture. You dont see some parts being greater if it were split some of the parts logic, it assumes investors arent smart enough to see the value of the different pieces and i think they are it only works if an asset is spun off thats materially dragging down profits. You could argue in the case of google with other bets, investments, i dont think you can argue that with facebook and instagram. I think instagram is just as profitable as facebook jim, seems to me that where apple is concerned sometime soon we have to pivot to the 5g story. Will apple have software and services built into ios to make 5g a musthave if we figure that out, maybe we have a hint next year, perhaps it means a big upgrade cycle this time next year. Is that the Way Investors should look at this, after the holiday season, the story turns to 5g and whether apple has Something Special . Thats a very good topic to talk about you think about the time line for 5g, you mention ww d. C. , thats june of next year we think that will be more of a Software Developer conference, less hardware. Importantly we do expect a lineup of iphones that are 5g in september of 2020. And with that, we will note that apple may not be first out with the newest phone having 5g, but they typically focus on the Consumer Experience to ensure its premium. What i mean by that is that the screen and the battery and radio frequency and connectivity is a Premium Experience when you turn back the clock and look at history, lte, 4g, 3g, apple was typically not the first one out with the new products a lot of first movers came out, batteries wouldnt last all day, they would drop cell phone connections, data would clock out. So apple typically is not the first to get there, but when they get there, the experience is a very Premium Experience we do expect them to have several 5g phones launching september next year, and well look to see if that indeed increases the uptake cycle for 5g and iphone. We look positively at that for next september, 2020 all right both names are doing well in obviously whats been a tumultuous morning jim, mark, see you soon. Thanks thank you so much a lot more ahead on facebook and Apple Earnings we ask business insiders Henry Blodget who had the most important quarter. And the fed cutting on the last trading day of the month. How are we poised to finish out the year we discuss with mike santoli stay with us next dow down 172, reacting to soft Economic Data out of chicago pmi. Mike santoli is here to talk about what it means. People writing about junk bond rallies ended for now. Yeah. I think there was about a three week kind of embrace of risk and cyclical trade, the idea well look past soft numbers to get to unturn in the industrial sector. The numbers today, i dont know, i mean, i think people are trying to take them with a grain of salt given gm noise and boeing but we are at a point where some numbers have to actually get better, cant be all anticipation for three weeks, s p is up 5 into the fed print, and i think that you have the muscle memory, we sold off after the fed a few times. I dont see it as much more than that, being a little bit of a stutter step at month end, but there is a test for the idea that the cyclicals can work. Transports are down big two days in a row it is getting to the point where the difference between it being a rebound and being a new trend is here. Also, i will say modest up side in apple and facebook, giving very good quarters often get to the second half of earnings season, first half is better than we thought and by second half, everyone says got it, we knew it, we positioned for it. Amazing, not Everyone Wants to report as early as they can if ism shows stabilization in the chicago side, it will help the case. That gives you traction for this case, absolutely. It is very telling that in july, the fed cut, they said mid cycle adjustment, market hated it. Now thats the premise everybody is operating under great, three quarter point cuts, history of that has been strong on forward going basis but as i say now you have to have numbers come through a little bit as opposed to positioning for that outcome. To put it in perspective, we did have what, three record highs for the s p this week. And i realize it has been a narrow trading range in general, but when you go back to start of october, it was really volatile. The fact that we are poised to end the month higher, in particular, s p up 2 for the month, how do you think about it theres not a lot to complain about. Even the full year, two 6 to 7 pull backs max, the market bent but didnt break at all in august and now it is about people getting more comfort on seasonals, the idea that maybe Third Quarter was the trap for earnings growth. Short term, youre seeing sentiment and tactical indicators, people got complacent or happy very, very short term, but i dont think it is because everyone is really in neck deep in stocks now going into the year end. You make a point that the reaction to apple and facebook arguably muted looking back, reaction to amazon which was not positive really also muted, reaction to microsoft, got a bit of a pop, went above a certain level, you can argue thats muted too whats the read on that, when reaction to up side and down side in major stocks that have gotten us to this point near record highs. Good point. The other faangs besides facebook had negative reactions but modestly or were kind of corrected after that i think the idea is first of all theyre all well below highs, aside from alphabet. It is not as if people had tremendous hopes based on this number, it was make or break, this would be the difference thats one take away also, youve seen smaller stuff, people walk away from it, smaller internet, grub hub, etsy, wayfair, a lot of stocks theyre not the dominant platform i added shopify and etsy. Jims point this morning, we reverted to faang. Went back to the big guys for safety i think that essentially you have comfort in those and in fact it is even more than choosing between them. The whole idea of faang as growing platforms that have kind of won means it is harder for other guys you thought had a shot to make their name. Great insight as always. Shares of lyft were up earlier, now down more than 6 were taking you through that quarter next and a bit of a reminder, euro close moved back an hour, just this week, due to daylight savings. Catch more on todays overseas rs12 30 on the half. Back in a moment it was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Shares of lyft are down this morning, just shy of 6 . The Company Raised guidance, getting an upgrade at goldman. Tom white has a buy on the stock, increased price target this morning joins us at post nine. Tom, it seems like at long last theres easing in who can spend more incentive war between lyft and uber, but at the same time i wonder if the riders will dry up somewhat because it seems to be having that impact whats your take look, i think there are a couple things going on as far as Stock Performance this morning you know, the company sort of reiterated, echoed recent comments about moderating competitive intensity in the u. S. , and thats very good exiting last quarter, lyft was able to push through pricing optimizations to raise prices, that contributed to a nice top line beat in raise on the ebitda, it looked better than consensus, included sort of a nuance i think investors are balking at, insurance related adjustment that made the beat not look as high quality as it otherwise would. In terms of riders drying up, i think the interesting thing to watch there, what will happen with fare pricing the next several years. You have things like ab 5, congestion pricing tax in new york and other municipalities pursuing that, if prices generally rise for riders, does that bite into the number of use cases that ridesharing works for and what does it mean for the Addressable Market and growth runway for companies whats your bet on what happens to driver churn with incentives drying up incentives arent just for ridership but to keep riders going. I dont know which one theyre easing up on more. Could it have negative impact on their ability to keep the most valuable drivers on the platform as well . It could. On the flip side, you have things like ab 5 and pushes in other states and municipalities to provide more benefits, minimum wage or better to drivers. That could help offset potentially some reduced incentive activity but for the next several years until we get autonomous vehicles, these Companies Need more drivers, not less, if theyre going to continue to execute on the forecast that the street has lyft versus uber. Lyft is more pure play, north america focused, it is a ride share company. Uber, more conglomerate with trucking and freight stuff, eats stuff going on which one has the Better Business model look, i think it is a question of time horizon in a lot of ways. If you can be long term focused, theres a legitimate argument i think to ubers multi platform, multi Product Offering generating more liquid marketplace, having more drivers into the ecosystem because they can drive for ridesharing or eats maybe more habitual dayin and dayout use from consumers one app you have eats and ridesharing as well. In the interim, fighting battles on a lot of fronts in a lot of countries where there are private vc backed competitors pouring money into it. So it is a tough one for us to get comfortable with on the next 12 to 18 month basis as a stock over that time frame which is what ratings are based on. We much prefer lyft. All right were going to interrupt there, go to d. C. We have breaking news on the steps of the house impeachment inquiry. Ylan mui has the latest. Reporter morgan, democrats have the votes they need to pass a resolution that would open up and formalize impeachment investigation into president trump. Party leadership has been calling it a vote on process, but make no mistake, this is a critical test of the depth of support for impeachment within the Democratic Party so far only two democrats have voted against the resolution 223 democrats and counting have voted for it republicans, meanwhile, calling it a soviet style impeachment inquiry. No republicans have voted for this so far. Practically what the resolution would do is set rules of the road for the next phase of the impeachment inquiry. It would set forth open hearings in the Intelligence Committee, allowing for 45 minutes of questioning for the chairman and Ranking Member of the committee, including staff. Republicans can request to have witnesses appear or request certain subpoenas, and finally the Intelligence Committee would compile a final report, send it to judiciary which would then be responsible for deciding whether to bring forth articles of impeachment. Once the vote series is over, the house is on recess through veterans day. We could see public hearings start after they come back back to you. Easier way to explain the difference between this vote and the sort of formal authorization the republicans have been calling for for weeks. Reporter well, this, democrats say, is a way for them to take that criticism off the table by setting out a process by which this impeachment inquiry will occur democrats dont need to have a vote in order to move forward with their investigation republicans have been saying they havent been setting out the