From the 10 day average. Joe another very quiet day. With tech earnings coming up and , it feelsnk activity like its about to get interesting. Scarlet it is a waiting game for now. The dow, a 109 point swaying intraday, the most narrow move and one and a half weeks. Lets talk about the energy stocks, the best performers life far. By afterot a big lift standard chartereds results lifted the sector. Rally. Crossasset theres talk that the former Central Bank Governor could be the finance minister that the president is ousted. The 10 year yield in spain, where the king has announced new elections because they cannot form a new government. Look how low the yield is. Thestory is how the till market has been punishing spain given the fact there has been no new government. Yield has beenr taking higher, the highest since march 20 second, still pretty low, but that is one of the stories, a bit of an uptick in safe haven rates. Slightlythe dollar was lower, but that is not the big story. The polish currency bankgthening, deutsche recommending investors go along the polish currency. There has been some positioning that the central bank will keep its market rate at 11 . Is Malaysian Ringgit extending its losing streak to a fourth straight day because a state Investment Company confirmed it is in default. Joe the big story was oil. West texas intermediate crude up 3. 2 . The story,ues to be the buoyancy under crude prices, which are holding up. That is a major turnaround from earlier in the year. At tet breaking news from , earnings crossing the wire, First Quarter adjusted earnings per share beating consensus, higherrsus . 69, revenue versus 40. 4on billion. At t says fullyear guidance is on track. At t reporting a beat on bottom and top line, fullyear guidance is on track. Lets take a deep dive now. Macrom looking at is the market backdrop as we head into oc and the boj. Financial conditions have eased considerably since february 11. The blue line is the Bloomberg Financial conditions index. I have inverted it. Two dont always correlate, but since late august, right around the time that china devalued its currency, they have started to move in tandem and are coming down with conditions easing and volatility coming up. That is a great chart. There has been this great easing of financial conditions, putting some upside into the outlook. Scarlet you wonder how much the fed will acknowledge it tomorrow in their statement. Joe or how much theyre responsible for it. Scarlet im looking at due toity of the pound the briggs a debate, surging a lot this year, the white line on the chart. It has really come off over the last few days. There is this growing sense that probably britain is not going to vote to leave the eu, so that cause the rally, volatility coming off some of the opinion polls as they look better for the remain cap. Camp. As pound volatility peaked, u. K. Banks were weekend and they have strengthened somewhat with the pound. Is that in the past few days, and you can look at that gambling markets in britain where they show the same thing, there has been a growing belief that ultimately the u. K. Will vote to remain in the eu. Wonder how much of that is due to president obama . People are citing that as a crucial moment when he came out and expressed the importance of staying in the eu. Scarlet that has been one of his big talking points. Joe weve been tracking all the latest earnings, and we have a lot today. Despite better than ex expected forecast crosses, whats the story with earnings . It depends on what sectors you look at. Youre seeing a sector rotation. You still have the dow out there in the market. Positioning has been a huge part of the movements up or down, so you look at how people are thinking about whether they want to have exposure to equities, but ultimately the numbers are negative, and i think people are aware of that. It depends on the sector. If you look at the Consumer Discretionary sector, it is cylinders,on all Consumer Discretionary. The sector has a really done a lot in the past couple of weeks. They are beating sales by the Biggest Surprise amounts. They have huge profit surprises as well. Yet it is not going anywhere. I think that ties into valuations, because you have a group of stocks that trades at 20 times earnings. Colleague was short going into earnings season. It is about beating expectations. Really gotten the Big Energy Companies reporting. Exxon andnd tell chevron come out and say what their outlook is like, you wonder how much everyone is holding their breath for that. You think about the two big factors for earnings the past year, the dollar and oil, and where are we going to get the best insight, some of that by how investors are speculating, inventory reports, but people put value on what ceos of major corporations have to say about oil, and that will be a big deal. Seeing inelse are you the market that isnteresting . It is basically looking at stocks versus bonds. This has been a topic that has come up in several different records. It is looking at the treasury market, the 10 year yield versus what has been happening in cyclical versus noncyclical sectors. We have the u. S. 10 year yield and looking at cyclicals versus noncyclicals, so basically an index the best way to gauge this is looking at Consumer Discretionary minus consumer staples, that is your orange line, so when it goes up, the cyclicals are outperforming noncyclicals. There has been this move down and yields since the start of the year, and there has been discrepancy in this market, but i think what is interesting is there is a report that says if you look at yields, they are still pretty subdued. Basically what theyre saying is of stocksyclical type have done pretty well, even as yields have been rising sorry, as falling in the first couple of months of this year, but if you dive into it, i am not sure that is happening right now. I think that was a good trade to put on a couple of weeks ago. Scarlet twitter has just reported results. Adjusted earnings per share . 15 yetus estimate of . 10, when you look at the revenue and the outlook for revenue, that is where things fall short. The Second Quarter, the current quarter, revenue of 590 million to 610 million dollars, analysts were looking for 677 million in revenue. That is amiss on the outlook for revenue. Monthly active users, user growth has slowed down at twitter, 310 million active monthly users in the First Quarter, analysts looking for 308 million. Joe that is a tiny be there. Revenue, 531 ,illion, firstquarter revenue 595 million versus consensus imate of 607 . 5 million estimate of 607. 5 million. Joe you can see how the market is taking this news, not doing much versus those financial numbers, down 9 in the aftermarket, still waiting on that big turnaround, even with givingt on eps, market the instant thumbs down. We will be tracking this for a while. Scarlet we heard from google, yahoo , advertising growth has slowed down a little bit here, and although advertising growth is typical, there is the tick tick by tick there. This is not a good sign for the cyclical industries. Will be specific company issues, whether or not twitters Value Proposition will allow it to keep growing, expand new types of users, but that certainly going to be the type of thing that people can look for an earnings besides the top line numbers. What can we read through about the economy and what the companies are saying, and is easy cyclical and those types of companies doing better, if those numbers turn a positive way, then i think it will be positive for the market as a whole because people still want to know. The u. S. Economy is still important. I got off the phone with just a bunch of investors, and it is still about the u. S. Economy. Joe thank you for joining us. Scarlet twitter reporting results, stock down 9 . We dig in and get the takeaways for investors. Also, a quick glimpse of shares of at t rising in late trading as its earnings beat analysts estimate is. Analyst estimates. Joe whatd you miss . Twitter earnings, but now ebay earnings. Scarlet First Quarter adjusted pershare up . 47, slightly higher than . 45 consistence estimate. 8. 6 billion and 8. 8 billion, narrowing its previous range. Were looking for 8. 7 3 billion, well within the range. In terms of firstquarter revenue, net revenue of 2. 14 billion dollars. That is higher than what analysts were looking for, the estimate was 2. 14 billion. Ebay coming in with earnings per share on an adjusted basis higher than what was looking for. Joe the market liking that come up 6 . Lets bring in paul sweeney. Just broke,ings another corridor where they cant seem to get anyone excited. Can twitter turn around . It here wenot seen have had several quarters now with essentially flat user growth. It has stalled out here. You hate to compare it to facebook, which continues to grow. Joe the idea that we would compare them at all is ridiculous. I agree, but if you are twitter you have to sit back and say i have to grow my user base or get more revenue per user today. I think they would like to do both, but they really havent been able to innovate on the product side to the degree that they can get new users to come onto the platform. Do in nfley footballng deal with games, will that bring in new users to twitter . I think they are banking on, but we have not seen it. Scarlet we say whether we should compare twitter with facebook. Twitter has become a cnn like destination when you need breaking news but otherwise it is limited. Sheryl sandberg last quarter said if you are a big brand advertiser and want to advertise on the internet, there are only two places, google and facebook. That is what we are seeing. Revenue call down on the guidance for the Second Quarter for twitter, so they continue to have problems monetizing the user base. Scarlet i want to jump in here. Twitter release, brand marketers did not boost spending as quickly as expected. Joe twitter has made this argument for a while that we should not even be talking about Monthly Average users and that we should look at the fact that they have a lot more people who see tweets somewhere in the twitter. Com,ual on so they have more users than active users, but if the brand marketers arent coming in, then that argument is not resonating with advertisers. Have 500t says we see ourusers that tweets, but we are not able to monetize them and go to advertisers and say this is our audience and advertises are not buying it. They cant measure it. F you watch tv as you say, they cant seem to turn that around. Super users and high profile users, but to bring up a good point, if tweets are seen by everyone, but then there is a limitation to that service. Thats right. If you are twitter and an advertising salesperson for twitter and you say i have 300 million registered users, but 500 million that sees our tweets all over the place, that advertiser will not pay unless you can measure and demonstrate that they are there, so theyre having a very difficult time monetizing that. We see it in weaker than expected guidance. Scarlet i wonder what extent twitter is used as a Political Tool overseas. It was a big deal in egypt and hong kong. Does its use as a Political Tool make it a threat in certain places like facebook is a threat in china . It may be. Theyre hoping, the president ial election will draw more users and engagement to twitter, which they can then monetize. Lots of people point out how influential twitter is, but do people want to advertise. Are those the moments that brands want to connect with . Meanwhile, ebay rallying 4 after hours. What is the story there . You want singles and doubles if you are an investor. You are ebay, trying to transition your company, a long transition from an auction site to a retail site like amazon. There is lots of competition in the Online Retail is is, so i think investors are trying to hit the numbers and show some growth and build from there, so it was a modest beat, but for these stocks and this investor is enough. Scarlet thank you so much. Find his you can research and full analysis on the bloomberg. Up, apple expected to release secondquarter results at the bottom of the hour. We take a deep dive into apple. We had charts featuring the worlds most viable company. The worlds most valuable company. Scarlet i am scarlet fu. Whatd you miss . We take a look at apple from different perspectives. Apple haslook how been an underperformer versus the broader market, specifically against the nasdaq 100. It has an 11 weighting. We care because it is the qqq. Lying index for the apple has dragged the nasdaq 100 down about 1. 5 , but if you take you see is that index has climbed 8. 5 . Me wo things make strike me there. That is a remarkable gap without apple. Long that for so apple was the only thing driving the nasdaq and s p 500 higher, so now to be looking at charts talking about how much higher it would have been without apple, it blows my mind. Preview for Apple Earnings coming out any minute now. Im looking at what the Options Market is telling us. This is on the terminal. You can see based on the options implied move right here 4. 63 move. The implieds saying move after earnings is 4. 63 . Scarlet not insignificant. Ae that is a big move for big company. You can look at this to seep rise changes around past earnings. The average is 4. 79 . The january earnings fell 6. 5 after earnings. In october, it rose 4 . The one before that, felt for percent. Phil 4 thats why we cant wait to find out what happens. Some pretty serious action when the numbers come out. Scarlet we will bring in cory johnson. And on the phone is Shannon Cross. A buy rating with a price target of 140. The big story for fiscal secondquarter, the First Quarterly sales drop since 2003. Apple is in a new world now. We have not seen this in 13 years. It is interesting to look at the size of this business and how these big moves have occurred. They apple watch sold more in the first year than the iphone, yet it is seen as a disappointment. Charts onouple of where apple is coming into these numbers. Growth, revenues expected to decline 10 , but iphone growth, Revenue Growth just 1 in the last quarter. Suddenly falling off a cliff. , in spiteat happened of the watch, in spite of services, ipad and resurgence of the macintosh, they iphone has become more and more percent, 66 of trailing 12 month revenue. It strips out the effect of new product releases. To bring in Shannon Cross. Thank you for joining as. Everybody will be looking at that iphone number. What do you want to see in this report and what do you expect, not just for this quarter, but for the quarters ahead for apple . What people are going to be looking for is 52 million iphones in this quarter. When you look forward, there is million,roversy, 45 probably closer to 42 million, the question is how much has the iphone sd contributed. Of cause doing get prior to the launch of the iphone seven in september . At the end of the day, everyone is focused on the iphone. The other thing is growth somen, because we will see impact on gross margin versus further out in the year when you get more benefit from currency, so there are a lot of lovers in play right now. Scarlet we have 30 seconds before apple reports. The time when apple decides what it will do with its extra cash. What you looking for there . A 10 increase in the dividend and, 60 billion increase in Share Repurchase, 20 billion 220 billion for the program, which is fairly reasonable. They tend to look at the cash generated in the u. S. Sector apple reporting, Second Quarter, one dollar . 90, missing estimates by . 10. Eps of 1. 90. Number of iphones, 51. 2 million iphones in the Second Quarter, higher than what analysts were looking for, so that is a good number. Its outlook for the thirdquarter revenue, 41 billion to 43 billion, a disappointing outlook, although apple is notorious for giving conservative guidance. Were also seeing a 10 increase of quarterly dividend, and Share Repurchase authorization now up to 175 billion. Growthguidance for margins really disappointing, a key number for this company. Toss margins were expected be 39 , in line with what we have seen before. They are saying Gross Margins will come down to 37. 5 to 38 for the third quarter. , but ita disappointment could reflect the introduction of a new phone, a new smaller phone, where Gross Margins might not be as good. Can they keep Gross Margins up as they introduce a smaller iphone . Clearly that answer is no. Scarlet are they willing to sacrifice margin to sustain market share . One thing we find interesting with apple is the other products segment. Ands kind of nebulous includes itunes, the watch, all those other things that apple needs to develop to take the reliance off the iphone. Billion for the quarter, not a lot when you consider how much money apple brings in over all. With 4. 35pared billion in the First Quarter, so other revenue really dropping off, presumably to the apple watch . I am not sure. Joe meanwhile youre seeing the postmarket moment by moment action. To what the Options Market was expecting. Options market looking right in line. Anythingre you seeing in these earnings jumping out to you . The math, eps implied of 1. 31 to 1. 43 compared to 1. 76, so than miss , and thenenue side again, gross margin is where youre getting the really big mess in eps. Clearly the street will need to digest these numbers but it shows a cause and overall demand, some pressure from currency and hedging, and i think investors will have a lot of questions on the call. I just found the average selling price for the iphone in the Second Quarter, 641 dollars . 83, where as analysts were looking for 651. You compare that with the fact that apple sold more iphones than expected, is it doing with discounts. Or is this fx . The big iphones in c