# Fed Leadership Shift and Tech Earnings Volatility

**Podcast:** Bloomberg Daybreak: US Edition
**Published:** 2026-01-30

## Transcript

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Good morning.
I'm Nathan Hager.
And I'm Karen Moscow.
Here are the stories we're following today.
Karen, we begin with President Donald Trump's choice to lead the Federal Reserve.
The announcement is expected later this morning.
Bloomberg's John Tucker joins us with the very latest.
John, what do we know?
Well, Kevin Warsh is the Trump administration's pick to be the next chairman of the Federal Reserve, at least according to our sources, Nathan.
Without mentioning Warsh, the president last night said an announcement would come this morning.
Just an outstanding person and a person that uh won't be too surprising to people.
The 55-year-old Wars served on the Central Bank's Board of Governors from 2006 to 2011 and has advised Trump on economic policy.
This would mark a uh comeback for Wars, whom the president passed over for the job back in 2017 when he selected Jerome Powell.
Now, for the moment, investors see Wars as less supportive of deep interest rate cuts.
In the past, he's warned of inflation risks and also delivered more recent calls for the Fed to reduce its balance sheet.
And the confirmation that's not uh necessarily going to be smooth sailing.
Uh, key Senator Tom Tillis, the North Carolina Republican who sits on the banking committee, has found to block any of the president's Fed nominees until the Justice Department resolves an investigation into the Central bank's renovation of its Washington headquarters.
In New York, I'm John Tucker, Bloomberg Radio.
Well, John, what's the market reaction to uh our reporting?
This is the uh almost uh the knee-jerk reaction, Nathan.
As a result, uh stocks failed the Treasury yields they pushed higher.
The dollar rose gold slid of traders dialing back bets on policy easing under Warsh.
Uh, but you have to keep in mind that Warsh has also aligned himself with the President in recent months by uh arguing publicly for lower interest rates, uh, going against his longstanding reputation as an inflation hawk.
So uh pick your stance, uh, Karen and Nathan.
All right, John Tucker, thank you.
We want to stay in Washington, and President Trump has reached a tentative deal with Senate Democrats to avert a government shutdown over immigration raids that have sparked a nationwide outcry.
The president is urging both parties to vote for the agreement, but House Speaker Mike Johnson says there might not be time before government funds run out tonight.
It may not be possible.
We have a we have a rule of a 72-hour notice for a return, and I can try to truncate that, but I've got people literally spread around the world right now.
So uh and we have a snowstorm.
Along with those comments from House Speaker Mike Johnson, Republican Senator Lindsey Graham has placed a hold on the bill.
The agreement would fund the Department of Homeland Security for two weeks to allow time to negotiate on Democrats' demands.
They want DHS agents to wear body cameras, obtain warrants, take off masks, and no longer conduct broad immigration sweeps.
Well, White House Borders are Tom Holman, Karen says broad sweeps will no longer be the strategy when it comes to immigration enforcement in Minneapolis.
Target enforcement operations, we've always done it.
I think we've got away from a little bit.
Wind chills are between zero and ten below from Boston to New York City, down to DC.
Now let's talk about the snow.
Oh, by the way, before I get there, the cold goes all the way down into deep Florida.
Even Miami has the possibility of freezing temperatures over the upcoming weekend.
All right, as for that snowstorm, there are winter storm warnings in effect for the northern sections of Georgia through the Carolinas to southern Virginia, just to the south of the DC area.
Very little expected around DC.
It moves off the coast, could brush eastern Long Island.
New York City, not likely to see very much.
You know who's going to get the worst of this?
It would probably be Cape Cod.
There will be a considerable amount of snow and wind, maybe even blizzard conditions for a brief period of time.
But Boston, that's this to show you how close things are.
Boston will probably end up with very, very little, just strong gusty winds.
So a very tight gradient on this, but I think the worst of the snow will stay offshore.
All right, Craig.
Thank you.
Of course, we're going to be checking back with Bloomberg Meteorologist Craig Allen throughout the morning as we continue to track the storm.
But now let's go back to the markets.
Maybe as we mentioned, futures are clower to close out the last trading day of the month.
So far this year, the SP 500 is up 1.8%.
But then, you know, that's just one month.
It is January.
Apple shares are little changed in early trading.
The iPhone maker delivered record quarterly sales and a better than expected forecast for the current period, but it did warn that rising component costs are threatening to squeeze margins.
Splumberg's Mark German has details.
Massive, massive quarter.
Uh, this is a home run.
Their greatest quarter ever by orders of magnitude.
It's a gigantic beat on overall revenue.
Uh China is back.
Uh, you have a big beat on um the iPhone in particular, $85 billion quarter is just insane.
Uh, the installed base, two and a half billion.
The numbers are just beyond excellent.
Bloomberg's Mark German notes Apple had its biggest sales quarter in China in four years.
Well, Nathan, it was quite a different earnings reaction for another tech behemoth.
Microsoft shares plunged 10% yesterday, wiping out $357 billion in market value.
That's the second largest single session drop in stock market history.
The fall comes after Microsoft showed record spending on artificial intelligence as growth at its key cloud units slowed.
The only bigger one-day valuation drop was NVIDIA's $593 billion route last year after the launch of Deep Seek's low cost AI model.
Separately, Microsoft reached a $750 million deal with AI startup perplexity to use its Azure cloud service.
Sandisk was already up 127% so far this year before those earnings.
Nathan, Elon Musk is considering a potential merger with a few of his companies.
Um, Bloomberg's Alexis Christopher is joins us with the details.
Good morning, Alexis.
Good morning.
Yeah, it looks like Elon Musk is keeping it all in the family when it comes to his pending SpaceX IPO.
Sources telling Bloomberg that SpaceX is considering a potential merger with Musk's Tesla or his artificial intelligence firm XAI.
Now, any deal could attract interest from infrastructure funds and Middle Eastern sovereign investors and would potentially require a large financing component.
Space SpaceX is targeting a June IPO that would value the company at a record one and a half trillion dollars.
In New York, Alexis Christopher, Bloomberg Radio.
All right, Alexis, thank you.
New York City Mayor Zorn Mamdani says Wall Street's booming year will not be enough to stave off a financial crisis.
He says it's worse than the Great Recession nearly two decades ago, and that the city has a twelve billion dollar fiscal deficit.
The mayor spoke yesterday with Bloomberg.
In order to do so, we have to deal with these structural problems.
New York City Mayor Zoran Mamdani was a guest on Bloomberg's balance of power for the full conversation.
Time now for a look at some of the other stories making news in New York and around the world.
And for that, we're joined by Bloomberg's Michael Barr.
Michael, good morning.
Good morning, Karen.
A Minnesota man is charged with impersonating an FBI agent and trying to spring accused killer Luigi Mangioni from jail.
Manion has pleaded not guilty to charges of killing United Healthcare CEO Brian Thompson.
Federal prosecutors say Mark Anderson showed up at the Metropolitan Detention Center in Brooklyn with a barbecue fork and pizza cutter in his bag.
He claimed he had paperwork signed by a judge authorizing Magioni's release.
Meanwhile, Mangioni has a court appearance scheduled for today.
Officials in Fulton County, Georgia are vowing to fight a recent FBI raid of 2020 election materials in court.
FBI director Cash Patel says a federal judge determined there was probable cause for the search.
Certainly it feels as though this is the same case with the FBI.
For the shooting death of the Sonia Massey 2024 incident.
She had called 911 reporting a possible prowler.
Grayson says after he and his partner arrived, he felt threatened when Massey, a black woman, moved toward a pot of boiling water.
That's when he fired at her.
Cliff Jones, family attorney of Ben Crump Law spoke after the sentencing.
This outcome affirms a critical principle.
That no one is above the law.
And an unlawful use of force will carry meaningful consequences.
Grayson was convicted of second-degree murder.
Global News, 24 hours a day.
And whenever you want it with Bloomberg News Now, I'm Michael Barr, and this is Bloomberg.
Karen.
He had a two-set lead on Alex Averev.
Zaverev came back to force a fifth set.
Alcaraz pulled it out 7-5 in the fifth.
NBA Charlotte topped Dallas, but in defeat, Maz rookie Cooper Flagg scored 49 points.
The Red Wings Patrick King passed Mike Medano, most points in NHL history by U.S.
born player.
That's a Bloomberg Sports Update.
Stay with us.
More from Bloomberg Daybreak coming up after this.
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This is Bloomberg Daybreak.
And it's 514 on Wall Street.
Good morning.
I'm Karen Moscow alongside Nathan Hager, and we want to get more reaction to our top story this morning.
Sources telling Bloomberg the Trump administration is preparing for the president to nominate Kevin Warsh to be the next Federal Reserve Chair.
And for more, we're joined now by Michael McKee, Bloomberg News International Economics and Policy Correspondent.
Mike, good morning.
So, hey, was this choice a surprise to you when we heard about it late last night?
It wasn't really.
Warsh has been sort of the uh favorite from the beginning.
Policy and controlling inflation.
He's a critic of QE.
He wants a much smaller balance sheet for the Fed.
He thinks the Fed could probably give up bank supervision.
Uh, and he thinks Fed officials overcommunicate.
So if he can get control of the committee, he will probably make a lot of changes at the Fed, and that is something I assume that Donald Trump would be happy with.
If he can get control of the committee, you really emphasize that.
So there could be trouble doing that, it sounds like, of course.
Well, it depends.
Uh a lot depends now on Jay Powell and whether he's going to stick around or not, whether he feels the Fed's in in independence is threatened.
Uh if uh Powell were to decide that uh Walsh is good enough and he can quit, then that might open up uh two other uh Biden nominees uh to to leave uh Philip Jefferson and Michael Barr, and then the president would have a full uh complement of people on the Fed that he appointed.
But uh it will also take legislation to make changes.
So there is the possibility that if the midterms don't turn out as the way the Republicans would like, that a lot of this gets stymied.
But he can still make a very strong imprint on the Fed, even if he's uh not uh totally uh changing things around.
Big question, uh Karen, is what he's gonna do about monetary policy and interest rates.
The president, of course, wants sharp cuts.
Uh Warsh has not uh uh Walsh has a reputation as a hawk, which is why we've seen uh interest rates go up this morning in the markets.
So we'll see how he balances that.
We will indeed.
So what is the next step before we let you go?
What happens next?
Well, the next step is a formal nomination, and then we have uh hearing nomination hearing, and uh Senate has to confirm him as Fed chair.
Now, there's plenty of time to do that.
The big question here is whether Senator Tom Tillis of North Carolina will vote for him because Tillis, uh key Republican on the banking committee, said he won't vote for anybody until the subpoenas uh that the administration has issued to Jay Powell are withdrawn.
All right, Michael McKee, Bloomberg News International Economics and Policy Correspondent.
Thanks for joining us this morning.
Nathan.
All right, Karen, thank you.
Repeating some of our top stories this morning.
A tentative deal is in place to avert a government shutdown over the Minneapolis ice surge, but it might not pass before funds run out tonight.
But the Mid Atlantic and Northeast may be spared the worst.
It's expected to dump heavy snow in the Carolinas, but only give a glancing blow to DC, New York, and Boston.
And Bloomberg News has learned Elon Musk's SpaceX is considering a merger with one of his other companies, Tesla.
Sources say the billionaire's rocket company's also considering a tie-up with Elon Musk's AI startup, XAI, ahead of an initial public offering.
The reaction it seems from Apple investors this morning is kind of a shrug.
For more, let's bring in two of the biggest names in big tech on Wall Street.
Dan Ives is with us this morning, global head of tech research at Wedbush Securities, Gene Munster, managing partner at Deepwater Asset Management.
Great to have the both of you back with us on Bloomberg Daybreak.
Uh just to get your reaction to this record sales quarter for Apple.
Uh sales up 16%, and the revenue projected to be 13 to 16 percent in the upcoming quarter.
The stock, little change to lower.
Gene, what's going on?
Well, just I think Mark did a good setup in your segment uh a minute ago, just kind of enumerating the numbers.
They're impressive.
Um it's pretty clear there's like two tracks going on here.
One is that the fundamentals of Apple is uh customers are just loving the products.
And this uh conversation about AI having a negative impact as uh there really is nothing going on on the hardware side to get people to change their behavior.
And so uh that has been a big benefit to Apple as they're kind of navigating uh improving their AI features.
And so uh what's going on?
That's just been uh, you know, it's hard to get the right adjectives to describe.
I I suspect Dan's gonna do a uh good job of framing those adjectives in.
But um, you know, my bigger question is why is the market reacting like it is to these incredible results?
You know, Dan, what's your reaction to this this market reaction?
Like I said, uh, the shares are little change to the downside um after a blowout quarter, at least as far as the top line numbers go.
Yeah, look, I mean, these are staggering numbers in terms of iPhone, especially what they saw in China.
And to Gene's point, you know, it's always put to great look.
Look, I think the stock should be up five to eight percent at least.
And I think part of it, but Nathan, go back to a year ago.
Look at Google.
No one would touch it.
New York City cab driver's bearish on it.
Apple will be Google in 2026.
I believe like we will sit here at year end, and that's where I think you're looking at you know 325, 350.
And I think this is the first start of what's gonna be like a hall of fame chapter for Cook as he defines the AI in Kucutinum.
Just to pick up on that, Dan, is that because of the the AI ramp up?
It's been a slow go as far as AI goes for Apple, hasn't it?
Yeah, look, they've been on treadmill at 2.5 speed.
I mean, they've been watching it from the stands.
But the but our point, and Gene talked about this as well so much, like the Google deal is so important on Gemini.
That's the first step to bringing new blood in from the outside.
And I think they're and and even some acquisitions are starting to finally change DNA.
And I think that's very, very important.
What about monetization concerns?
We saw that reflected in the reaction to Microsoft's results, certainly, Gene.
Yeah, well, with uh, I just want to make one more point about Apple too.
Just trying to like uh dissect what's going on and why this market reaction is, you know, Dan's talking about the AI.
I want to put a finer point on that.
Is they really don't give us a ton around the substance of what the A what AI is going to look like.
And we go from Dan and I go from call to call, and it's just like euphoric around uh AI and specifics.
But then you get to Apple and these precious once every three months opportunities, they they're not uh they don't say much to the street.
And uh when they don't really frame in, like, for example, they acquired a company for two billion dollars Israeli AI audio company.
It was uh that news broke yesterday, QAI, and there's no comment on the call.
No one even mentioned it, and I think it kind of speaks to investors just want to hear more.
And uh because of what happened with Apple on the missteps out of the gate, that treadmill speed that Dan's talking about, because of that, Cook doesn't want to say much, and which is fine, but that's uh I think what's happening is that that disconnect.
Um, you know, on the Microsoft side, uh it's that that small change in terms of how they think about Azure growth has a massive impact on uh to the downside, at least to on shares recently.
Uh Dan, let's pick up on that as far as Amazon.
Well, what was your reaction when you saw that the plunge in Microsoft stock uh after their earnings?
I mean, look, uh, I don't think that was Nadella, the Microsoft's best call.
I I think they didn't really give clarity as much about Azure in terms of what growth's gonna look like.
CapEx, look, we saw it from Meta a quarter ago, right?
I mean, obviously strong quoting this quarter, but CapEx investors want to see the monetization.
Microsoft, it was a little disappointing relative to whispers, and obviously the stock across that's gonna be a G and I talk back.
That's gonna be the narrative this year.
If you excel, look at Meta.
But if you if you chip over the shoe leases like Microsoft dossering it, and I believe it's an opportunity, but it speaks to the scrutiny.
Is this a leveling off of valuations, Gene?
This reaction to what we saw from Microsoft.
Could that uh uh be reflected in in some of the other big tech names as well?
I think it speaks to um this this uh some of the the concern that investors have that you know we're one quarter away from uh things kind of getting bad.
And uh I mean that's kind of been around for a year or so, but um, you know, you look what happened to software yesterday more broadly, it was you know down five, six, ten percent.
And so I think it's um you know it's it's still this kind of skepticism, and I think ultimately uh uh what's gonna happen is that this is gonna be more significant, the growth is gonna be higher for longer, and I think some of this uh concern, the fundamentals will just kind of show that there is no need to worry.
I'll just put uh a quick context onto it.
We use these models internally.
Um we have uh strategies that use AI for picking stocks as well.
We have humans, and we're deep in uh these these models, and our experience is that the inference side, the thinking side, is gonna be uh hundreds of thousands of times bigger.
I know it sounds crazy than the uh the training side.
And I think that reality just hasn't uh come close to sinking into the market.
And I think when that happens, you're gonna see investors start to turn more positive on these companies.
Dan, I want to ask you uh how this sets up uh for Amazon's results next week.
Is the bar higher now for AWS to outperform after what we've seen from Microsoft and Apple?
Look, I I think I mean to some extent, I think the Amazon bar is something where I think they're gonna excel from a cloud perspective.
I actually think Microsoft's one where the bar it it it may be a little higher.
I think Amazon's actually being underestimated.
I think you're gonna should look in terms of earnings, Google, Amazon, I view it as just another step in the right direction.
As Gene said, you come out of this earnings season.
This is not a bubble.
It's actually more validation of the spending, but investors are digesting it, and you're seeing some just general nervousness.
And just 30 seconds left, unfortunately, but Dan, I got to get your reaction to our reporting from Bloomberg News that SpaceX is considering either a merger with Tesla or with XAI.
What what could that mean for Tesla since you follow that company so closely?
I think it's very bullish.
It speaks to our view in terms of this is something that always is what we thought should happen in terms of XAI and SpaceX, and it speaks to what's gonna be, I think, a historical year for Musk and Tesla.
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