Market. Being a strong developing market. We do have some donut competition around the world. I think you have to come back to the fact that globally, the number one seller of donuts anywhere in the world is dunki donuts. Matt you mention the cold pressed coffee and i know youve recently done a partnership as well with cocacola. How do you see your coffee evolution . Youve moved away from drip coffee and more into espresso and customized drinks. I wouldnt say we moved away from it. Original blend coffee is still a significant part of our revenue. Young people like two things, which we are the Market Leader in iced coffee, and we enhanced our coffee range with the introduction of cold brew. We brought in more espressobased drinks. Millenials like espressobased drinks and maki otto ma cciato. Macchiato. They also like iced coffee. We are not going away from drip coffee, but the opportunity and espressobased drinks and iced coffee is spectacular and is growing. Matt probably because you can pack so much sugar into those iced coffees and espressobased drinks. I like the ice cream. Baskinrobbins seems to be a brand weighing a bit here in the u. S. Whats the story with ice cream and donut sales . For old guys like me, millenials arent into that waistline additive food . We allow our consumers to decide what they want to add themselves . Thats a way to put the responsibility on the individual. Baskinrobbins had a decline of. 9 . Over two years, 6. 6 . This is a business which five years ago had declining comps nad store and nstore count. We are excited about the future of baskin internationally and domestically. The message is donuts, coffee, and ice cream. They are all going north. Another quick check on time warner sales, they have shot up on this Bloomberg News report that Senior Executives there along with those at at t met in recent weeks to discuss Business Strategies including a possible merger. These talks are still informal. The share price is moving quite a bit with time warner up by better than 5 . We will speak with the reporter who broke the news in just a moment to read moment. This is bloomberg. Scarlet Senior Executives at at t and time warner had been meeting to discuss a possible merger. Our reporter joins us with more. This is a big one. Time warner would be the takeover target and at t the buyers here. Time warner had rejected an offer from 21st century fox not so long ago. Thats right. Late 2014, it was. Your understanding is correct. This is exceptionally preliminary. The nature of the discussion between the companies has been much more relationship building, executives meeting one another. In those talks the idea of a potential merger has been great. Matt i love to pull up comp charts. Its a great measuring stick to look at all companys. Return, ivetotalthe got time warner here in white. Telethon in yellow, and the s p has a benchmark in orange. At t has underperformed the s p 500 over the past few years. Time warner has outperformed the s p. What at t has on its site is absolute size, a 240 billion Company Versus a 56 billion company. Slightly larger. It can afford to take these big. Ets to move into new areas stevenson has been on the front foot about this. He said he needs to take a company into doing media and content. This is a logical fit thing for them to be looking at and a direction that they want to go in, some of their big rivals have already gone. Theres a lot of logical reasons why they would be interested. They also have the allout scale to pursue these kinds of things. Scarlet verizon buying yahoos web apps. This is a flavor of the moment for all of these very like a raisin, at t, verizon, at t, to pivot into the content and the pipes. They want to move into the content having the full sweep. Scarlet would it be overpaying at this point . There is such a premium put on content producers. Warner owner of hbo. Thats their like a raisin, at t, moneymaking. That is what they do. Matt its also a heck of a lot bigger business then yahoo . And maybe even less than that, because they are now contesting whether or not the price of yahoo is correct. Netflix, which is another potential asset in this space, is very expensive. Anything you buy that will get this much access this quickly will be expensive. At t is still going to do this in a way that moves the needle. There is no point in them picking up a couple of billion dollars here and there. Matt the f a strain offers a wealth of information on the bloomberg. I just graphed time warners adjusted and that don. And then the forecasts are in the sort of shady areas. We are looking at forecast fiscal year, 9 billion. What kind of multiple do you think companies are putting on this kind of asset . It would go at a full price. Clearly there has been other interests in this. They have come into this before, offered 85 bucks a share. Time warner said that wasnt enough. Their stock is held up very well, just looking at where they are trading now. I think this would be a fully priced asset. Its a good asset with a growth story. The chief executive of time warner, he has indicated that he would scarlet i cant help but compare what happened with time warner and aol in 2000 at the top of the dotcom bubble. That deal to go through, and it was terrible for both sides. They had to divest themselves of aol. What kind of reaction did you get from other people when you spoke to them about this . Has becomeneraol synonymous with all that was wrong in the previous big merger. Lets hope we are not at that point. People think this makes a lot of sense. At least at t moving more in this direction has been written about. Dave theyve talked publicly about their desire to expand here. Its not as wild as Something Like a well time warner. Aol time warner. Scarlet thank you so much. Matt congratulations. Im sure you want to get back to the m a desk. We will continue to monitor the story. We are awaiting earnings from tech names. Microsoft well, paypal is not bad either. Remember windows . Dont write it off just yet. Well show you why. Scarlet whatd you miss . Microsoft will be reporting earnings after the bell. Growth is certainly still coming through in its legacy business, windows or office. It is delivering the last quarter or two. What you see is the orange bar, the commercial pc related growth. For the firsttive time in seven quarters. The consumer business has done even better. Bill belichick notwithstanding. He had to buy a new one. This growth may be fleeting. We also heard from intel during this earnings season that the whole pc year end demand could be lackluster. You might see a drop off their. For now those legacy businesses are developing. Att Lisa Abramowicz wrote story for bloomberg gadfly that i just cannot get out of my head. Heres one of the charts she included in her story. This is based on blackrock saying they estimate investors are holding trillions of dollars in cash. Get your head around how much cash, 50 trillion is. These bars here show you the total gdp of these countries. That doesnt even add up to the 50 trillion in cash that investors that blackrock says investors are holding. The market close is up next. We are down across the board. Four minutes to go. Stay with us for that. This is bloomberg. Scarlet we are moments away from the closing bell. Whatd you miss . Markets were broadly steady as they digested comments from marquis odog eight mario draghi. I am scarlet fu. Matt i am matt miller. Welcome to all our viewers tuning in live around the world on twitter. You can watch closing bell coverage on twitter every weekday from 4 00 to 5 00 eastern. Scarlet we begin with our market minute. U. S. Stocks closed lower, although it was a marginal decline. You still have eight out of 11 major groups on the decline, with telecom the biggest la ggards. Matt take a look at the imap. You can see the Industry Groups broken down. 11 out of 10 are declining, but there is some green on the screen here. Health care is a gainer. You can see individual pockets, semiconductors, Semi Conductor equipment gaining. Individual pockets of financials, like banks, diversify financials gaining. Consumer discretionary. Media is up. That is obviously the time warner move. Consumer staples, retailing. Take a look at some stocks on the move. Lets just say, time warner is one of the big gainers today after that scoop was broken. You can see telephone moving down. Here you see at t down almost 2 . Time warner up almost 5 , not the 8 pop we saw initially. Ebay with a forecast that disappointed the market with its Earnings Report yesterday. American express with earnings that pleased investors. Those stocks going the other direction. Scarlet mixed day when it comes to earnings and we have m a news to contend with. In the bond market everyone was fixated on what the European Central bank data, or in this case didnt do did, or in this case didnt do. 30 year yields coming down a little bit after mario draghi downplayed the concept of more quantitative easing, to taper or extend it. If you look at the bund, the fiveday intraday chart, bunds have been rising for four Straight Days after the ecb punt. The yield is still positive, actually just barely positive if you go out couple decimal points, but certainly off the high of 10 basis points on monday. In currencies, the euro was in focus because of the ecb meeting today, declining. The actual rate announcement, no change, did not have an impact as you can see, but it initially spiked and then quickly gave up again. Now the lowest since june 24 a day after the brexit vote. Matt mario draghi, in a sense he disappointed the market by not giving details about what he was doing with qe, so they kind of freaked out at first, but the market does expect, and 73 of economists we surveyed do expect quantitative easing, the ecb Quantitative Easing Program to be extended through its march deadline, and as a result you see the currency weakness. Scarlet that will happen probably in december during their next meeting. Gaining for real the fourth day. The Central Bank Cut rates for the first time in four years. They did sound a hawkish tone. Tone. The lira making big swings, a little changed here, but did make big swings after the central bank unexpectedly kept rates on hold rather than cutting as many expected. The aussie dollar snapping a sixday gain. Jobs,was surprise drop in leading to speculation the reserve bank of australia will cut rates. Scarlet it is always confusing with the currency pairs, because there you are showing dollar weakness against the real. Scarlet in the aussie dollar, you are looking at the aussie falling versus the u. S. Dollar. Matt lets take a look at commodities. A little easier to read these charts. All you have to year is a dollar price against the underlying commodity. Crude coming down after comments from russia about whether or not it will boost production. It says it could boost production. Nigeria cutting prices for its crude, and as a result of uti coming down, 50. 43. Brent was down as well. Corn and cotton, big drops today. Soft commodities all down, and metals down as well, so a negative day for commodities. Scarlet those are todays market minutes. We want to bring in our Bloomberg Intelligence senior analyst, who covers microsoft. We are waiting for microsoft earnings any minute now. Microsoft reorganized its business is not long ago, so it has been hard to figure out which part of the business is related to the consumer side, the corporate side, versus the cloud. The way that they organize the business, how the ceo looks at the business, he looks at everything that is productivityrelated, everything cloudrelated, and everything computingrelated on the pc side. That is how they have mixed some things together. It also helps them to insulate, as they are moving products to the cloud, it gives them a little buffer to play around with it. Matt what does the trend look like . Has microsoft been doing better in the cloud than its competitors . Anurag certainly. One of the things that microsoft talked about recently. It is a two horse race now, between them and amazon. Matt and this is satya nadella, the ceo, this is his wheelhouse. Anurag absolutely, which is one of the reasons microsoft has been making this transition for some time, and doing relatively well. Scarlet lets get you microsoft results, which just crossed the bloomberg. First quarter earnings per share of . 50. On an adjusted basis, . 76 a share and analysts were looking for . 68, so thats better than the highest estimate from the analysts we have surveyed. In terms of revenue, First Quarter adjusted revenue of 22. 3 billion, also better than what analysts when looking for, anticipating 21. 7 billion, so that 22. 3 billion is at the high end of what analysts were looking for, so a beat on the bottom line and the top line. More personal computing, thats one of the business lines. The revenue for the quarter was 9. 29 billion. Analysts with him for 8. 9 million, so a beat. Intelligence crowd intelligent cloud, the consensus estimate was just over 6. 1 he 5 billion. Anurag, i have been looking at these headlines. First quarter total unearned revenue. Is that bookings they can expect to read the benefits of later on . Anurag yes. I am no surprise by the personal computing once, which we discussed ones, which we discussed before the earnings came out. That is an area, pcs are still declining, dont get us wrong, but the pace of decline has improved, and it will be interesting to see what they talk about, how the partners are pricing the products coming into the holiday season, and that will be a big driver for the next quarter and the quarter after. Scarlet what happened to the surface . Anurag it is doing very well, actually. Scarlet is it more personal computing . Anurag more personal computing. It is a much more expensive device than the sub 500, 500 pc, so you get a bump in that as well, even though you might be shipping less units. But your average price is very high. Matt Phil Belichick is not happy with the microsoft Bill Belichick is not happy with the mica subsurface. He broke one on the sideline, because he says its not reliable. Anurag the results show otherwise, i would think. Scarlet i think he gets angry a lot. Another headline, microsoft sees closing the linton deal by the Second Quarter of 2017 linkedin deal by the Second Quarter of 2017. . The thing anurag the thing is, they have said they will that linkedin run as an independent unit, and the numbers will run into one of their divisions, the Productivity Division that they have, just because that ties in very well with their cloud enterprise products. Matt let me break paypal, because those earnings came out as well. First off, i will give you the stock, which is down in the afterhours because paypals adjusted forecast for 2016 eps trails the midpoint of that, trails the streets estimates. Paypal gives its forecast a lot of times in a range. For example, fullyear eps of 1. 48 to 1. 50, and the street is looking for 1. 50, so the midpoint of their forecast is 1. 49 and that slightly trails what the streets estimate was. To be fair to paypal, it is higher range. They previously said 1. 47 to 1. 50. I need a whiteboard to go through all of this. In any case, the outlook is disappointing. Thirdquarter revenue beat, 2. 67 billion, in the street was looking for 2. 65 billion. And as far as thirdquarter eps, adjusted pro forma number, but it was . 35 and the street was looking for . 35, so they didnt really beat in the thirdquarter profit. They did in revenue, and they didnt impress as far as their outlook is concerned for the full year, so you can see the shares moving down a little over 3 right now. Scarlet to mention, since we are looking after the trade, microsoft shares are moving higher in extended trading. We mentioned how the company beat on the bottom line and the top line. Anurag rana here with us from Bloomberg Intelligence. First quarter capex, 2. 16 billion, and analysts were looking for spending of 1. 84 billion. What is my croissants spending on . Anurag this is one of the most important things. To grow in the cloud business, you have to invest in a lot more data centers. This is one of the reasons why if you look at microsofts expenditures, it has gone up quite a bit, but that is paying off right now. I think it is much higher than much higher than the last quarter, 108 . Matt so intelligent cloud is a Good Business for them. We were talking about windows as well. Obviously it is linked to their personal computer sales very strongly, and it is a business and a consumer product. Is windows still a big revenue generator . Do people get excited about windows . Anurag yes. Investors should, because from a profit point of view those are cash cows. Operating system, windows, the office suite, those are the two products that allow microsoft to be creative, to go out and make new acquisitions, to try all these new products, because those are the anchors around which the transformation of the company is being done. Scarlet anurag rana, thank you for the instant analysis. Great to have you on set as we break down these microsoft numbers. For more information from Bloomberg Intelligence go to bigo on bloomberg. Matt so much in the afterhours. At hammond and his team at ed hammond and his team at Bloomberg News broke that Senior Executives at at t and Senior Executives at time warner meet in recent weeks to discuss strategies,ness including a possible takeover of time warner by at t, so as a result you have a big boost in time warner shares. Ups is the close, you saw 3. 75. At t shares down a little at the close. In the afterhours, you see some big moves in microsoft and paypal shares after their earnings, so paypal down after missing a bit, and microsoft shares down just a smidgen as well after their Earnings Report is released. This is bloomberg. Mark lets get to first word news. Donald is mocking his muchcriticized comment at last nights president ial debate that he might not accept the results of next months election. Trump kicked off a rally in ohio by saying he would like to promise and pledge to all of my voters and to all o