Grappling with the water crisis there since 2014. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. Is next. Technology caroline im caroline hyde, this is Bloomberg Technology. Alibaba leads the charge. How the bets on content and the cloud is paying off for chinas ecommerce giant. S p. T highs for the we will break down what stocks are leading the game. The verizonyahoo deal is still in play, but now going into overtime. We will look into potential impacts on the acquisition of the verizons worst governments report since 2014. Alibaba reported betterthanexpected quarterly results. The company lifted its yearly sales forecast. Ventures are bolstering the giant. Dig into the nittygritty for us. Reporter its almost too good to be true. They raised sales forecasts. Is thatg interesting the number of active buyers didnt cry too much, less than 10 . A lot of the growth and reasons why investors are pushing up stock is because of the growth and its more fledgling businesses. Thought triple digit growth in the Cloud Division and media and visual entertainment business. A lot of talk about how that is the next new Growth Strategy for alibaba and how they are going to integrate all of these businesses together. Digging into some of the bloomberg functions, if you go into Analyst Recommendations and get into anr on the bloomberg, you see a phenomenal 90 of analysts say by this stock. Not one single one says sell. See the price target is way off from where the share prices are currently trading. Elaborate on these new big bets that are potentially helping some of the by recommendations. We heard from salina about the entertainment. What it comes down to is this. Is a fledgling business, it is growing. If you dig through the numbers, the Cloud Business is actually rising and staying stable. Usually when we see them grow, you get less revenue per user because some of the lower tier users come in and start using. It is staying stable, that is a really good time for alibaba. It is still losing money, so that is not a good sign. But the fact that they are able to keep it stable is very important. On the entertainment side as well, it is losing money, but growing. These are two areas that show alibaba is looking into and can find some success at of their main business, selling products online. In these two areas, they are dragging on earnings, but the fact they are earning shows they have a few more tricks up their sleeve. Caroline salina, what it feels like is that alibaba is morphing into an amazon, taking a few leaves out of their book. What do the executives say about these new businesses . Reporter i think something people are clicking more details on was this deal with in time. They want to buy out this physical brick and mortar department store. This is part of their vision to transform Online Retail into some of these ecommerce initiatives. Analysts are still skeptical about if it is worth it to spend much on physical retail, but alibaba is all about ecommerce. They are about integrating digital media, using content to draw users, getting people to spend more time on their platforms, and transforming physical retail so that people in brickandmortar stores can use their technology to shop better. It is not too different from what amazon is doing. They recently open Grocery Stores that use very advanced technology and have some physical stores. Caroline i think we heard salina there talking about a little bit of caution out there. The Short Interest on this particular stock and it is particularly high. What are the risk factors that might be driving this Short Interest . One of the key ones that salina pointed out is that they use is that the user growth is slowing. As a problem for them. They are managing to grow the amount of sales per user. The other thing is that they have a lot of other businesses. They are invested in so many different kinds of businesses, and they are a little bit of a black box. A lot of the shorts are betting that there are problems here, but so far, the shorts have been ing to shorting the stock have been trying to take shorting the stock have been unsuccessful over the past three years. A lot of people are betting that perhaps there is something to come out of this that will be on the downside, but so far, they havent been able to make smart money to make much money from those short bets. Caroline what about the news earlier about the olympic bet being made by alibaba . Anything more on the direction they are going in terms of globalization . Reporter it is reiterating that this is something that is going to get their global brand out there. It is really important that they can elevate their brand. Tim was just talking about some risk factors, but lets not forget a were just but back on the u. S. Notorious markets list for being a haven for knockoffs. By sponsoring the olympics, they are now going to have their name associated with the lipid games around the world, and hopefully this can bolster their reputation and help more businesses to sign on to their platform. Caroline another brilliant analysis. Thank you. Front, someearning profits more than doubled in the last three months of 2016. It was also driven by recovery in its mobile business after the fire prone derrek lee note 7 galaxy note 7. We saw the shares popped up on the back of this due to the buyback. To try to placate the Investor Base . I think it is. There is a large buyback, but only around 10 or 12 of the cash they have. They have a lot more cash they could be given back to shareholders through buybacks or actual dividends. If you look at the actual earnings, year on year, the top didnt change. It came in almost exactly the same. Going through the line, we saw the gross margin improve a lot. That is because the seventh dr. Side and lcd side did very well so when salesiod, go up, you have better gross margins. If they can go forward into the next few quarters, that is great. Ive been skeptical that they could because the earth because these are very cyclical businesses, and we need to see something that would drive demand forward for flash memory and lcds, there is that a lot out there in the market in terms of new products that look like they could drive these areas. That would be a real last threat for samsung going into these few quarters. Caroline a bit of a stay of execution if youre looking at the share price. Beenabout what has unfolding over the embroiled in a samsungs leader or heir that hasin the scandal consumed the south korean politicians . Is there any update in that respect . What is amazing is that investors dont seem to be that worried about it. They kind of dismissed it and brushed it off. Jay y. Lee not has not been arrested or put in prison. There are a lot of problems that could be ahead. Today, if you look at the Share Trading of the shock of the stock over the last few weeks, most of the bad news seems to be priced in and some investors are betting this could be a weakness. Priceearnings ratio seems to be rising quite high. The galaxy note 7 problem, we found out overnight what was behind that, the badly problem the battery problem. I think most of the risk is behind them and they will go towards rebuilding the brand that samsung has. Caroline digging into that particular company. Thank you for all your insights today. Staying on the earnings beat, s p raise their targets. The updated outlook came out with the companys fourthquarter sales, and light onlines transitioning to sap is transitioning to online cloud computing. Clearly, any Enterprise Company operating in the Global Economy is almost always running sap. We would like to think our purpose in the United States will only get stronger because we can help the new president take cost out of the equation and focus on growth. That is why do need Global Players like sap to be great partners, and we will be. Caroline still to come, President Trumps trade agenda will head to washington to hear from the republican senator who said he could curb the powers of the oval office when it comes to terrorists. When it comes to tariffs. All episodes Bloomberg Technology can be streamed on twitter. This is bloomberg. Caroline now for a look at the markets. U. S. Stocks rose the most in three weeks. The s p has an alltime high. Large iss editor at here to pour through all the numbers. We are looking at the s p 500. I think what you see is all caution being front of the wind. We saw in the s p 500 and in the nasdaq. We see different sectors of the market, these are the sectors of is a lotq, and there of different utilities. The only thing that didnt go up is in the red here, the health care. Those stocks in the nasdaq might be those that arent the dividend heavy paying ones. Certainly the strong move into these Technology Stocks shows that investors look at this world dont see a lot of risk. Caroline are we seeing any particular flavors that are outperforming . Is it based on trump at the moment . We are seeing hints at the way that policy might be forming. Thatthink its the idea tax policy is going to favor these companies and that Congress Might not stand in the way of some of those things. From the trunken administration thus far is still a lot of talk, but they have a lot to prove. The market is believing that everything is going to be rosy. We will see if everything plays out. Caroline one my favorite other geek functions is ea. You can see, if youre looking at the s p 500 thus far, 100 of the big tech players that have earnings so far. The nasdaq, as you see, we havent had a lot of companies report. Thus have two companies far. In the s p 500, it is different. We look at all the companies that are reporting, and to me, this is an Analyst Report card. This is in showing how a companys are doing, this is showing how poorly the analyst are analyzing. Analyst have killed early have clearly expected it when it comes to sales. The analysts have gotten it wrong. When it comes to sales, we have seen these companies averaging in with the nasdaq, but with Telecommunications Services and i. T. , we only have 70 come in report out of the 71. Have 17 Companies Reporting out of the 71. Caroline we will keep 18 i on the analysts. Great to have you on. Cory johnson running through the numbers. President trumps trade agenda will head to washington. A u. S. Republican senator says he can curb the oval office when it comes to tariffs. This is bloomberg. Caroline it has first days as president , donald has taken swift action on u. S. Prayed on u. S. Trade policies, withdrawing from the transit partnership. He has also vowed to hit companies that manufacture outside the u. S. And try to sell within the states with a tariff. Senator mike lee, thank you for joining us. You introduced a bill that would give Congress Control or authority over approving any executive action taken by the president over whether or not to fs or to approve withdrawing from e trade agreement. Why was this necessary withdrawing from a trade agreement. Why was this necessary . We see a being handed over to the executive branch. Reporter critics say you are trying to take away power from President Trump. Is that what youre trying to do . At giving power to congress to make laws about things like tariffs. We have provision in the tariff act of 1930 and the trade act of 1974 that give immense discretion to the executive branch to decide unilaterally to make certain decisions to raise tariffs. That is a policy decision tantamount to making law. This is not the executive branch or the president s fault. Reporter do you agree with President Trumps actions on trade policy . Those policies are still unfolding. It is not entirely clear what actions he wants to take in this area. I concern is a deeper and broader one, brewing since long before we knew who the president would be. This is a question about the peoples elected representatives in washington being able to make law, what we are here to do. Reporter we are hearing President Trump will announce next week who he will choose to a point to the Supreme Court. You were on the short list that he put forth during the campaign. Are you interested in becoming a Supreme Court nominee . Have you had in discussions the white house about it . Of course i am. I have been watching Supreme Court arguments since i was 10 years old. I am on her to be considered on the list. Regardless of what choice he makes on this, it is going to be a good one. The people on that list are good and we are going to get that person confirmed. I look forward to pushing through that person once he or she has been nominated. Reporter have you had conversations with the white house since election day . Of course, along with any other issues. We have talked about the issue broadly. Reporter i think caroline has a question. Caroline thank you joining us. Im going to take it back to technology, if i will. We were talking about trade policies, and it seems as though , at the moment, donald trump is trying to fight cheap labor abroad with trade tariffs, but its not the actual threat to jobs. I dont think that the government response ability. Responsibility. We have to make sure government isnt putting undue burdens on companies. We can at least make sure that we are no longer the country with the highest Corporate Tax rate in the developed world. Can make sure we are no longer putting 2 trillion in Regulatory Compliance costs on americans everything will year. All those costs get passed down to americas poor middleclass, who pay through higher prices, diminished wages, underemployment, and unemployment. Theres a lot we can do to increase the competition of american manufacturers and american employers and to get more opportunities to american workers. Issues and on those reducing areas that the government itself has put in place. Caroline i want to get into one of your other key roles. You are on the committee for antitrust policy. There is a definitely argue and grew in between two tech heavyweights, apple and qualcomm. Is there a particular view you take on apple suing in terms of its licensing process . Im not getting into that right now. I dont have any interest in commenting on that. Reporter if they offer you the Supreme Court job, would you accept it . Of course i would. How serious are we . Not today. Ive not had these conversations today or yesterday. Reporter senator mike lee, we appreciate your time. Both yahoo and verizon reported earnings this week and gave a new timeline of its highly anticipated deal. We will discuss who benefits from pushing the sale back. You has been delaying that sale to verizon. Yahoo shares to ridley trading a little bit higher. This is bloomberg. Anchor im elisa for anti, you youre watching Bloomberg Technology. Donald trumps plan to renegotiate the north American Free trade agreement was received in mexican with a call to protect tariff free trading. Canadian officials are worried about avoiding unintentional damage as the u. S. Targets mexico. Prime minister Justin Trudeau says canada will continue to pursue trade agreements worldwide to make sure Workers Benefit from higher wages driven by export intensive industries. Welcomedinisters President Trumps decision to greenlight the keystone pipeline. 500el says it has approved west Bank Settlement homes. The defense minister says the majority of the Housing Units will be built in blocks where most settlers live and which israel was to keep under its control. French president Francois Hollande that with leaders of colombias largest Rebel Movement today in an area where guerillas will begin turning over weapons. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Anti im elisa plenty this is bloomberg. I am joined by paul allen with a look at the markets. Good morning. To a niced is off start. Things looking good on the nikkei. 6 10e expecting gains of of 1 on the afx when we open here in a little under 30 minutes. Everyone will be watching bhp billiton. It all up pretty good. 60 million tons for the second quarter. Fullyear guidance has been lowered. Big piece of data out today. Also getting preliminary gdp as south korea that is expected to confirm a slowing economy. Im paul allen in sydney. More from Bloomberg Technology next. Caroline this is Bloomberg Technology. Verizon saw their worst performance since 2011 in tuesday trading after adding er monthly wire lists monthly wireless customers than expected. They wanted to inform themselves into more than just a phone company. Yahoo is delaying their sale to verizon because it needs more time to be closing conditions after the disclosure of two massive data breaches. Has is a look back at what been said on Bloomberg Television about the deal and yahoo s most recent hacking disclosure. The yahoo brand is an excellent brand. The yahoo team is an excellent team. It fits into the larger strategy that verizon has. The transaction isnt just about the strategic future for yahoo , that also about unlocking value for our shareholders and the remaining equity stakes. This is an opportunity to kill two birds with one stone. Great for the company and great for show murders. For shareholders. Some of you whose key websites are still value to a a com