Transcription
Bloomberg Audio Studios, podcasts, radio, news.
Good morning. I'm Nathan Hager, and I'm Karen Moscow. Here are the stories we're following today.
Karen, we begin with the latest on the trade front just days before expected talks with China in Malaysia. President Trump has signed an agreement with Australian Prime Minister Anthony Albanese to boost access to critical minerals and rare earths. The deal is part of efforts to secure a stable supply of critical minerals with Australia positioning itself as a viable alternative to China. President Trump says his administration is still talking to Beijing about a trade deal.
"I expect we'll probably work out a very fair deal with uh President Xi of China. So uh most of you will be with us. It's going to be very exciting and I think we're going to work out something that's good for both countries."
President Trump spoke from the White House. The US-China trade truce is set to expire November 10th.
Well, Nathan, the Supreme Court is set to hear arguments next month over President Trump's global tariffs. But before that, a group of small businesses is weighing in. They filed briefs urging the high court to affirm lower court rulings that the tariffs amount to an illegal tax on American companies. One of the companies, Learning Resources, says the president usurped Congress's power to tax by invoking an emergency law that was never intended to be used to impose duties on other countries. A second brief, led by wine and liquor distributor VOS Selection, says the tariffs contradict what the nation's founders intended by giving Congress the power to levy taxes.
And Karen, we're seeing the impact of US tariffs on sales of luxury watches. Swiss watch exports fell in September, hurt by the Trump administration's 39% tariff on imports from Switzerland. In fact, there was a 55% plunge in exports to the US, which is the watch industry's largest market.
Meanwhile, in Washington, Nathan, the government remains shut down after the Senate failed to pass a Republican stop-gap funding bill again yesterday. Republican Senator Ted Cruz says he thinks Democrats are prolonging the shutdown.
"There are 14,000 air traffic controllers who expected to come in to work, but they didn't get a full paycheck. And this needs to end. It's not right. It's not fair. And I think Democrats are are are holding not only the US government hostage, but holding the American people hostage."
Senator Ted Cruz tells Bloomberg he does not know when the government will reopen. Meanwhile, Senate Minority Leader Chuck Schumer says Republicans need to negotiate.
"It's been over a month since the House of Representatives even took a single roll call vote. That's shameful. That's derelict. Government workers must work without getting paid. House Republicans get paid without working."
And Senate Minority Leader Chuck Schumer says healthcare premiums are a "fix it now" issue and should be negotiated before the government reopens.
Well, in the meantime, Karen, the shutdown is having an impact on dealmaking. Anglo-Dutch consumer goods company Unilever has pushed back its demerger of Magnum Ice Cream. The company says the Securities and Exchange Commission is unable to declare effective the registration statement that's required for the ice cream company's shares to be admitted to the New York Stock Exchange. Unilever does expect to complete the spin-off of Magnum this year after initially being on track for the middle of next month.
Now we get to the latest on the war in Ukraine. Nathan, Senate Majority Leader John Thune says he's hitting the pause button on new sanctions legislation against Russia until after President Trump's planned meeting with Russian President Vladimir Putin. The bill would formalize sanctions that are already in place and impose up to 500% tariffs on imports from countries that buy Russian energy products and are not actively supporting Ukraine.
During his meeting with Australian Prime Minister Anthony Albanese, President Trump was asked if he still thinks Ukraine could win the war.
"I don't think they will, but they could still win it. I never said they would win it. I said they could win. Anything can happen. You know, war is a very strange thing."
President Trump spoke at the White House. He plans to meet with Putin in Budapest after meeting last week with Ukrainian President Volodymyr Zelenskyy. The president came away from that meeting undecided on whether to supply Ukraine with long-range missiles.
Well, Karen, Amazon says all its cloud services are restored. This follows issues that disrupted internet use around the world for about 15 hours yesterday. Sarah Frier covers tech for Bloomberg News.
"When a large chunk of the internet is relying on one service, there are all these cascading effects, right? Uh, they said there was an issue in a database uh that was loading incorrectly and that just had this domino effect for a large portion of the internet. Yeah, hundreds of sites, according to Bloomberg, Sarah Frier, including financial services outfits Venmo and Robinhood Markets, Apple's music and TV offerings, software companies such as Zoom, Salesforce, and Snowflake, food services giants including McDonald's, and gaming companies like Epic Games. Even Amazon's own services, Alexa and the Ring home security system, were not immune."
Oh, well, Nathan, earnings start to pick up this week, and Netflix reports after the close of trading today. Bloomberg's Tom Busby has more on what investors expect to see.
"Expect a combination of new hits like that blockbuster K-pop Demon Hunters movie and returning hits like the latest season of Squid Games to give earnings a big boost, along with growing advertising sales from its live sporting events and its ad-supported subscription tier. Also expect to get a little boost from some favorable foreign exchange rates. Bloomberg consensus calls for revenue of $11.52 billion, less than half of that coming from the US and Canada, and earnings per share of $6.94." Tom Busby, Bloomberg Radio.
All right, Tom, thank you. Finally, maybe a little cheaper to buy that Thanksgiving turkey next month. Walmart says it will offer its lowest prices in years for Butterball turkeys: 97 cents per pound, the cheapest since 2019. Turkey production's been tight due to shrinking flocks and the resurgence of avian flu.
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 Bar. Michael, good morning.
Good morning, Karen. Israel's military says Palestinian militants in Gaza have handed over another body of a hostage. The remains of 13 hostages have been handed over since the ceasefire began. It is shaky at best after a weekend of deadly clashes between the two sides.
At the White House, President Trump says he still believes the ceasefire will hold and suggests other nations could get involved.
"We had a dark cloud over the Middle East and now it's all I mean, we have a little situation relatively with Hamas and uh that will be taken care of very uh quickly if they don't straighten it out themselves."
Meanwhile, White House advisors Jared Kushner and Steve Witkoff are back in Israel this week.
Police in Atlanta say they thwarted what could have been a mass shooting at one of the country's busiest airports. Authorities say Billy Kaggel of nearby Cartersville drove to the south terminal of Atlanta's Hartsfield-Jackson International Airport to assess crowd levels, but police say they were alerted to his activities by family members and arrested him at the airport. Chief Darren Schierbaum says they found an assault rifle in his pickup truck.
"I do believe that Mr. Kaggel was headed back to his truck to retrieve it and I do believe he was likely to use that weapon inside the crowded terminal that he had just seen."
Chief Schierbaum says Kaggel was not able to legally own a gun since he is a convicted felon.
New York City police are looking for answers after a newborn baby was left in a subway station during the busy Monday morning commute. An anonymous caller led police to the baby at the station on West 34th Street and 7th Avenue. Fortunately, the newborn girl was wrapped in a blanket and is okay. New York City Transit President Demetrius Critsotos called her the "miracle on 34th Street."
"Just grateful for the work of the NYPD in responding and caring for the baby."
Police brought the baby to Bellevue Hospital, and she's in stable condition. Nicolas Sarkozy entered prison after his conviction for criminal conspiracy, marking the first time a former French president goes to jail. Sarkozy, who was convicted last month after aides allegedly sought electoral funding from Libyan leader Muammar Gaddafi's regime, has consistently denied any wrongdoing.
Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Bar, and this is Bloomberg.
Karen, thanks Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashour.
Thanks, Karen. A thrilling Game 7 to end the American League Championship Series in Toronto. Seattle took a 3-1 lead to the seventh inning when George Springer hit a three-run homer off Edward Bazardo. The Blue Jays won the game 4-3 and won the series 4-3. The World Series starting Friday will be the Blue Jays against the Dodgers.
NFL Monday Night Football: Detroit at home beat Tampa Bay 24-9. Seattle at home beat Houston 27-19. That's your Bloomberg Sports Update.
Stay with us. More from Bloomberg Daybreak coming up after this.
Coast to coast on Bloomberg Radio, nationwide on SiriusXM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak.
Good morning. I'm Nathan Hager. President Donald Trump has signed a landmark deal with Australia to counter China's dominance in rare earths, but the president is still sounding optimistic on making a trade deal when he meets with Chinese President Xi Jinping at the end of the month.
"If we don't make a deal, we'll charge them a very substantial tariff, and they'll be paying us hundreds of billions of dollars a year, which they're basically paying right now."
And that was the president during his meeting with Australian Prime Minister Anthony Albanese at the White House. And for more, we're joined this morning from Hong Kong by Jenny Marsh, Bloomberg's team leader for Greater China Economy and Government. Jenny, good morning. Uh, walk us through this deal that was struck between uh, President Trump and Prime Minister Albanese, and what it could mean for uh, China's stranglehold on rare earths.
So Trump and Albanese um have struck this deal to help the US secure um better access to China rare earths um to rare earth, rather. I mean, for China, this is interesting because it shows that uh the US is now sort of turning to other countries to try and secure these rare earths. It's an $8.5 billion agreement. Um, and, you know, the US is a significant ally in this because it is currently um home to the only um the only um company that is actually sort of mining and uh processing heavy rare earths at the moment. So Australia already in the past has helped Japan sort of wean itself off rare earth dependence, and so now the US is sort of turning to Australia to do a similar thing for it as China sort of uh wields its chokehold over these supply chains.
So, will this be enough in the short term for the US to sort of wean itself off its dependence on Chinese rare earths?
It's going to take a long time. I mean, this uh $8.5 billion deal, you know, it's going to uh take things to the next level. They said that it's going to take years. You know um, there are sort of various estimates out there of how long it takes for new mines to come online, but, you know, I think Goldman Sachs had a note this morning saying it can be 8 to 9 years just for a new mine, and then to build out sort of the processing capabilities as well also takes a very long time um, and these plants are often dependent on Chinese machinery, as we've seen in Malaysia. So this is a step in the right direction. It's a good thing that the US is sort of um looking beyond its own borders, you know, to that stake in MP Materials, but now it's sort of turning to the experts in Australia as well to try and beef up its capabilities. But, you know, this isn't going to produce results of any sort of meaningful scale that will allow the US to sort of reduce its dependence on China for years. You know, probably until after Trump's presidency um finishes.
And of course, this all comes after China announced these restrictions on rare earth exports, and that uh sort of upset reaction that we heard from President Trump regarding that. Is this kind of deal what the US has struck with Australia the kind of thing that uh could move China when it comes to its own plans for rare earth?
I think this is exactly the kind of thing that China's latest restrictions are aimed at stopping because those restrictions um, you know, that China unveiled uh this month put curbs on um the export of machinery, and that sort of the ability of foreign companies and plants to process the rare earth that China is helping to extract from the ground. And so when you look at those curbs, what they're sort of really the intention there is they want to try and keep this leverage for as long as they can. You know, the thing about putting these sort of export controls on on a product is they immediately sort of start a race for other countries to reduce their dependency on you. So you're telling everybody, you know, we're going to use this as a weapon. So people then want to sort of um find alternatives. And I think China understands that. And what it just wants to do is slow down the sort of collaboration that the US and Australia really are kicking off here so that it can use this leverage for as long as it possibly can do.
So in our last 30 seconds, what could this mean uh for the meeting that we're still expecting between Presidents Trump and Xi in South Korea at the end of the month?
Yeah, I mean, rare earth will be a big part of that. I think this enables Trump to go to Xi and say, "Look, you know, you've got this big leverage over me, but we have friends and allies around the world who are willing to work with us to sort of expedite our ability to mine and process our own rare earth." So, it gives Trump a little bit more sort of uh clout going into that meeting, but I think Xi probably knows he has a pretty good hand when it comes to rare earths.
This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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I'm Karen Moscow.
And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day, right here on Bloomberg Daybreak.