From bloombergs u. S. And asian headquarters. Im Ramy Inocencio in new york just after 7 00 a am. Yvonne it is just after 7 00 p. M. In hong kong. Im yvonne man. The tech earnings this week will be the big focus with alphabet kicking things off. Ramy i was trying to get ahold of what was moving the markets today but there really wasnt anything but it was earnings. Well get to that in a little bit. Yvonne yeah. It was good it seemed like, in line with expectations at google earnings but just not enough to really convince investors to get too excited about given the run we have seen on the stock already. Lets look at how things are playing out in the asia pacific. It was the Oil Companies that were in focus and kind of offset in tech yesterday. Flat day so far. To australia things could get a little more interesting. Oil being a bump higher overnight with the saudis promising deep cuts to crude exports next month. Shipments capped at 6. 6 Million Barrels a day as we see more analysts saying u. S. Shale is close to peak production. Perhaps final l i taking some bite. 7924. A little bump higher than yesterday but really equity futures marginally higher up about 13 points. Japan, expecting the b. O. J. Minutes out later this hour from the june meeting of course but a triple whammy in japan yesterday. Dollar yen breaking and the yield also falling and new polls suggesting shinzo abes Approval Rating at the lowest since he took office five years ago as he faces day two of grilling in parliament over cronyism allegations. A majority, ramy, of japanese now are not in favor of the Prime Minister seeking a third term. Ramy lets get the first word news. Thank you. Oil rose as saudi arabia promised new export cuts next month emphasizing its commitment to draining the glut and rebalancing the market. Shipments will be limited to 6. 6 Million Barrels a day, one million fewer than a year ago. The kingdom says it is not acting alone and other producers should maintain or strengthen supply curves though it is understood it will take time to push prices higher. Yes, we are indeed ready to review this but the key question is should the decision be made now or at the later date when we have more data and more details as to how the market is performing. So at this point here we have conveyed, we have discussed, and we have decided to recommend that all the ministers keep this option on the table. Deutsche bank may move about 350 billion from its u. K. Balance sheet to frankfurt as trading inclines migrate to the continent after brexit. It calls for trading in frankfurt to go live in september next year and for the assets to be moved over by the following march. That amount is the equivalent of almost 20 of deutsches Balance Sheet. Hina has confirmed that rising star is being investigated for serious violations of discipline which is code for corruption. The announcement comes a week after detention. He was the youngest member of the communist partys 25member polit bureau and considered a candidate for promotion in the leadership shuffle later this year. Chinas inquisitive h. M. A. Group has disclosed its control by two charities as it seeks to dispel concern about its structure and financing. The two entities hold 52 , one based in new york and the other in h. M. A. s island home. 12 officials including the founders hold about 47. 5 with the rest held by the Airlines Holding company. Global news 24 hours a day powered by more than 2400 journalists and analysts in more than 125 countries. This is bloomberg. Ramy thanks. Lets look at u. S. Stocks. They were missed today with investigators waiting for the feds meeting and the biggest week for s p 500 earnings. Here for a rundown of the trading day is su keenan. Markets were mixed but the nasdaq popped. Su yeah. This is a big week for tech earnings of course google a bit of a disappointment after hours but facebook one of the big movers as we go into the big moves, facebook is set to report earnings on the 26th and has been hitting records almost every day. Today was no exception, up about a percent. At a never before seen price. The stocks, facebook, netflix, come on strong. In terms of other earnings, hasbro a big disappointment. A lot of the toys not selling the way of Old School Toys if you will not getting traction with some of the younger kids so the toy industry down. Although a gamemaker which makes slot machines, scientific games, just blowing it out. Biggest shareholder was ron perelman, billionaire. Stocks have been doing well and the gamemaker really blew it out in terms of earnings. Lets look at the market snapshot. We have gold. Oil was higher. Treasuries under pressure. Gold, a nonevent day. The 10year also reflecting treasury is a bit under pressure. Lets go into the bloomberg because inflation is something that the fed is very keyed on as they start their meeting. Here is the inflation if we look at this, which is really fascinating here that inflation and the value of u. S. Assets is at concerning levels if you talk to a strategist at charles schwab. He points out that data showing the Federal Reserve on households net worth relative to disposable income which rose to a record in the First Quarter is of concern. Look at this blue and white line. Theyre married together here as the market goes up. You can see there were big gaps all throughout history. So that is a different way of looking at inflation and perhaps something the fed might comment on. Ramy earlier you mentioned oil around 46 bucks a barrel or so but still under i guess what some might say the psychological 50 mark. Thats having the impact on a lot of oil stocks. Halliburton in particular with the Share Price Falling. What is the story here . Su what they said was it looks like shale may have peaked. That is very good news for the oil market in that it will relieve some of the pressure. Not great news if you are a Service Provider and halliburton is the giant. They did report a return to profitability because of the past quarters rise in oil though it has come down as we talked about. And there were some analysts out there saying, hey, buy on the dip. Yes, it was under pressure. In terms of oil rising, the commodity, the saudis saying they are going to cut, very good for the market. If we go into the bloomberg, weve talked about how opec has been cutting as the drillers have been increasing. We actually had some data from on from baker hughes that the rigs have declined so we could actually see these divergent paths come and meet in a way that is positive for il prices. Yvonne seems like a turning point. A lot of companies are reporting on tuesday. Particularly the food chains as well as the auto makers. Su yeah. Two big food chains, mcdonalds and chipotle. Lets start with mcdonalds. Check out the stock prices up about 25 year to date. One of the stronger performers. Two years ago people were saying mcdonalds is old school, over. Chipotle is the way of the new. Mcdonalds has been up 70 over two years. Wow. Analysts expect continued strong same store sales and fresh initiatives such as ordering systems, fresh beef, delivery, all of that has sustained sales growth. Second quarter adjusted expecting to come in at a dollar 62. General motors under pressure. Again, it could slash car models to combat slum pleasing sales. That is the big story hanging over the company tas reports Second Quarter results. Can the companys sales base overcome weakness in the u. S. . Then there is chipotle, a brand new food outbreak, the neuro virus is associated with a chain store in virginia. Over 135 people reported ill in the past week. This is horrible news. As the Company Reports its latest results in a very challenging environment even though Health Officials say the kind of outbreak is not associated with a store but maybe perhaps the sickness for an individual. A that not for nonevent for any other company but for a company like chipotle where this has been an issue this is a very mortal wound and analysts are trd to see how they are able to come through this. Yvonne thank you. Over to d. C. Now white house adviser Jared Kushner has confirmed four contacts with russians during his fatherinlaws Election Campaign but denied any meetings were improper. Kushner was speaking after questioning by Senate Intelligence committee members. Ell get the latest now from washington. Joe, good to see you again. Of course, we have confirmed these meetings or at least Jared Kushner has. What do you make of the fact he says some of these why unmemorable, in fact he says he didnt recall their names or how many people were there . Joe it has been a problem in general for the Trump Associates with these meetings of not remembering meetings. And, perhaps, some of them were, but what their critics are pointing to are the pattern because some of these meetings, there was a brief meeting with the Russian Ambassador to the u. S. , the may flower hotel in which other ambassadors were present and it wasnt by itself necessarily inappropriate. But it gets left off their list and then another one of the meetings was the trump tower meeting with donald trump jr. , Paul Manafort with the russian lawyer that was billed as presenting information on Hillary Clinton from the russian government. Yvonne how does this all set up for the other hearings or i should say interviews from donald trump as paul metaford . Joe they have a set of questions on their own. Kushner is the first in the series. There are going to be going to he is going to be going tomorrow to the house of the Intelligence Committee interview as well. So it will give them other questions to pursue but they the investigators have their own questions for both of trump jr. And manafort. Ramy also this week the senates push to overhaul the health care bill. A few hours ago President Trump himself requested republicans to repeal obamacare. President trump the senate is very close to the votes it needs to pass a replacement. The problem is we have zero help from the democrats. Theyre obstructionists. Thats all theyre good at is obstruction. Ramy how likely is a senate vote going to happen before the lawmakers go on their recess . Joe Mitch Mcconnell at this point is still pressing a head with the procedural vote tomorrow to indicate whether they can even go further with the debate. It is not clear at this time that he has got the votes to do it. With john mccain out, recuperating from surgery, he can only afford to lose one republican. There are probably eight republican votes in flux. They are trying tonight, still meeting tonight trying to round up votes and theyll be doing, again tomorrow, lobbying members during their regular weekly lunches before having a vote in the middle of the afternoon. Ramy well be looking ahead to that. The latest on whats happening in the capital. Looking ahead, sowing the seeds. The u. K. Trade secretary meets his u. S. Counterpart and they work toward a post brexit deal. Well be joined by a former trade minister later this hour. Yvonne shares tumbled in late trade despite a profit by googles parent. Details live from San Francisco in a moment. This is bloomberg. Ramy welcome back, watching daybreak asia. Im yvonne mun in hong kong. Alphabet shares are lower in trading despite the Parent Company reporting profit that beat estimates. Joining us from San Francisco, mark, good to see you. The stock hasnt exactly been on an easy ride. We take a look at this youtube ad controversy, this e. U. Fine. What ultimately led investors to not like these results . Mark it wasnt really those two factors. A lot of it is that the market is just getting accustomed to Tech Companies really beating and google in the First Quarter traditionally not beat but this past quarter their revenue and e. P. S. Was much higher than expectations and this quarter they clocked in right exactly in the middle. The growth in the advertising business was around 18 and some analysts are getting used to 20 . You saw what was their traffic acquisition costs, the amount they pay out to partners and it rose pretty high and has been rising for several quarters. Yvonne so what are the things people are, i guess, excited about . I mean, i know they mentioned a little bit about the ads, the 52 growth in pay clicks but the cost per click has been coming down, and other bets of course. A lot of questions about the cost discipline that google has tried to implement here. Do we see a little more of that . Mark i think we did. We saw the losses in the spending on a lot of the other bets like selfdriving cars and google fiber fell dramatically. Part of that is theyre really cutting back on the expansion plans they had for google fiber. A lot of the spending is now going into the Cloud Business. Google does not share much about that but said it is one of the Fastest Growing parts of alphabet. They gave one stat about the number of businesses theyve netted in the past year has grown threefold through really big contracts. There is a lot of hope aroupped round youtube, a lot of investors interested in mobile search and the progress there and the cloud but these are much more expensive than the core desk top business thats been this Profit Center for years. Ramy as we see the after hours Share Price Fall roughly 3 or so i want to pull it back. One, it is sort of unfair to say, oh, you didnt over beat analysts expectations. Looking ahead does this really change anything for the company . Or is there something really ruly there to worry about . Mark the fundamentals are fairly strong. Investors said the advertising business is growing, money is moving from tv into digital. Google and facebook are the two biggest beneficiaries there. I think investors are happy with the progress of what they can see from the Cloud Business but you see this persistent problem the google had for years where mobile advertising is not as profitable as desk top. I think theyve shown wall street theyve been able to handle this but its still an ongoing question of how much they can continue to squeeze as more and more mobile devices take over desk top search. Ramy well leave it there, mark bergen. Thanks very much. Well have to see how the shares react in real time trading on tuesday. Meanwhile, the start of the tech earnings season, and later this week well have reports from many more, facebook, paypal on wednesday, twitter and amazon on friday. Lets look ahead to all of that with the founder and c. E. O. Lee, looking at alphabet right here, i want to go into bloomberg terminal and ask you about Analysts Recommendations and im also wondering if people are going to change off of that. Hop into the bloomberg terminal. I want to show you the a. N. R. Function here. This basically is a sea of green. The greens of course are the buys. The reds are the sells. 34 buys. Six holds yellow. One sell. You think that is going to change and fall . Lee Analysts Recommendations to begin with are always going to be skewed toward the positive realm. The interesting thing that we find with Analysts Recommendations is exactly when they change and how much they change. If you saw it this morning, the company the banks that brought blue apron public came out and upgraded and we saw the stock up a lot. We know, im a former arbitrage trader that looks at data like this. We know that you want to basically play off of that change in the ratings. But, yet, it always tends to revert that trade. So it is a very short lived trade and it doesnt mean anything for the longterm nature of the stock. So when analysts change ratings will they change ratings . Probably not. You probably wont see google buy sell hold ratings change at all. As you were talking about, i think it is interesting that the what theyre getting on the cost per click data continues to decrease and at a faster rate than our estimates were expected. So they missed that number by a pretty good amount. Now the number of pay clicks was up a lot more than people expected. That kind of balances things out. You saw they did beat the revenue numbers, which was nice. But, yes. Some things could be changing a little bit there. Ramy looking ahead we have facebook, amazon, paypal, twitter all on the docket here. Overall, in the general scheme of things, positive, negative . Leigh i think super positive. Ramy super positive. Leigh yeah. One thing you always want to look for as a trader as an investor in terms of the earnings estimates is what is the trend in the estimate revisions over the course of the quarter . We find that as the consensus numbers trend up and Companies Beat several quarters in a row it is very hard to stop the momentum in a stock like that. Normally estimates on average come down over the course of a quarter. Analysts want to come in to beat. Facebook estimates are straight up this quarter, e. P. S. And revenue, amazon estimates straight up. Paypal estimates straight up. Twitter estimates straight down. So i would not, you know, if you want to put all the odds in your favor here the twitter numbers are not going in the right direction. Although there are a lot of other factors that play, m a and stuff like that. But the facebook numbers, now doing 250 million daily active users with the instagram stories, which is that blows snapchat out of the water in terms of numbers already holistically, mobile video ad numbers are great. I would not bet against that stock at all. Yvonne you take a look at the moves on the s p were up more than 10 year to date and i think a third of the moves come from these bank