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 geopolitics. Tensions are heating up again as China threatens further retaliatory measures against US curbs on its shipping sector. Beijing announced the move after the US trade representative began an investigation into China's maritime industry. We get the very latest from Bloomberg's Jill Disus in Hong Kong.
>> This is an escalation in what really has been a long-standing dispute between, uh, both the US and China over maritime dominance. Uh, we've really seen, um, several months ago, uh, the US announced US port fees for Chinese ships that, uh, were coming into those ports, um, amounting to, you know, millions of dollars of potential fees, was set to go into effect this week. Uh, we've also seen these two countries really kind of trade, uh, tit-for-tat, uh, sort of retaliatory measures against each other over the last several days, even, um, involving some trade, uh, particularly when it comes on the China side to some new export curbs they were placing on materials related to rare earths issues. Um, and then now, obviously, you're seeing a lot of this kind of, um, snowball into, uh, what's happening on the shipping front.
Bloomberg's Jill Dies in Hong Kong says the dispute has consequences for the global economy. Vessels are involved in 80% of world trade.
Well, adding to the tensions between the US and China, Nathan, words from Scott Bessent. The Financial Times is reporting the Treasury Secretary has accused China of trying to hurt the world's economy. This comes after Beijing imposed sweeping export controls on rare earths and critical minerals. The paper says Bessant is expecting to meet Chinese Vice Premier Holly Fong one more time before Trump and she meet in South Korea later this month.
Well, now let's get to the latest from the Middle East. Karen, President Trump is back in Washington after a whirlwind trip to the region where he celebrated the ceasefire between Israel and Hamas and laid out a vision for a broader Middle East peace.
>> I'm not talking about single state or double state or two state. Uh, we're talking about, uh, the rebuilding of Gaza.
President Trump spoke to world leaders at a signing ceremony in Charmeal Shake, Egypt, but challenges remain for maintaining the peace. Stuart Livingston Wallace leads Bloomberg's Middle East coverage.
>> You have that international pressure, but also you potentially have boots on the ground. And while the US is deploying, I think something like 200 personnel within Israel to monitor the ceasefire, they have no intention of actually going into Gaza itself. So that probably has to be international force.
Number two, money. It is going to cost an enormous amount of money to rebuild Gaza. I mean, let alone clearing the rubble. Then you have to start again. That money has to come from somewhere, and I think the hope is that a lot of that will come in particular from the Gulf region.
>> Bloomberg Stewart Livingston Wallace reports other points of President Trump's 20-point peace plan remain unclear, like disarming Hamas, but the president predicts they will happen.
Well, elsewhere in Washington, Nathan, it is now day 14 of the government shutdown. On House Minority Leader Hakee Jeff is calling Democrats back to Capitol Hill today in a show of solidarity, even though they won't have anything to work on. Speaker Mike Johnson has canceled votes for a third week in a row and is keeping his members in their districts.
>> Our members are doing very productive work. We're in constant communication with them, and we are ready to come back and continue the work in our committees and everything on the House floor. We will return to legislative session as soon as the Democrats come to their senses and open the government.
And that was House Speaker Mike Johnson on Capitol Hill.
And as the shutdown continues, members of the military are set to miss their first paychecks tomorrow. Treasury Secretary Scott Besson told Fox Business his agency is prioritizing payments to ensure service members get paid. Past Treasury Secretaries have questioned whether it's possible to set aside some payments over others outside a fight over raising the debt ceiling.
>> Let's get to news outside Earth. Karen, SpaceX's Starship rocket has managed to launch satellites and make it back to this planet intact. The milestone is critical to CEO Elon Musk's aim of preparing the rocket for regular space missions. Here is the moment of launch from Star Base in South Texas.
>> 3, 2, 1. We have liftoff. Go Super Heavy. Go Starship. Thanks for all the historic flights, Bad One.
>> And minutes after that, Starship Superheavy booster split from the spacecraft as planned before splashing down in the Gulf of Mexico. The success marks a step forward in Musk's ambitions to carry NASA astronauts to the moon in under two years and eventually to establish civilization on Mars.
Well, we turn to the markets now, Nathan, where bank earnings are front and center. JP Morgan Chase, Goldman Sachs, Cityroup, and Wells Fargo all report this morning. And we get the very latest with Bloomberg's John Tucker.
John, good morning.
>> Yeah, good morning, Karen. Yeah, Wall Street's biggest bank sent for another strong quarter, lifted by resilient trading desk and also a rebound in deal activity that's helped send their stocks to fresh highs.
Sema Principal Global expects the financials to help lift all boats.
>> We can see continued performance from financials. Um, so along with those tech stocks which continue to drive the market, we would think that financials, uh, can join in with that rally and help push the equity market a little bit further.
>> And then you have those two recent corporate blowups. Triricolor Holdings and First Brand, they're igniting concerns about potential cracks in credit. Bank executives likely get questioned about that during the earnings calls this morning. Questions on the outlook for more bank mergers will also probably come up after last week's announced 11 billion acquisition of commeric by fifth. The biggest US bank stocks, by the way, have outpaced the S&P 500's gains over the past 12 months.
In New York, I'm John Tucker, Bloomberg Radio.
>> Meanwhile, Nathan, Philadelphia Fed President Anna Pollson is signaling she favors two more quarter-point rate cuts this year. Pollson says monetary policy should look through the impact of tariffs and consumer price increases.
>> I anticipate that 2026 will see growth near potential and inflation rising and then sub subsiding as tariffs together with current and past monetary policy restrictiveness work their way through.
>> And Philadelphia Fed President Anna Pollson made those comments at the National Association for Business Economics annual conference in Philadelphia.
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. New York Attorney General Leticia James attended a rally for New York City mayoral candidate Zoron Mdani to offer her support for the Democratic frontr runner. It's her first public appearance since she was indicted on federal charges of bank fraud and making a false statement following President Trump's call for her prosecution. James defied the president Monday night, referring to her successful prosecution of the Trump business.
>> I will not bow. I will not break. I will not bend. I will not capitulate. I will not give in. I will not give up.
>> Audio courtesy of ABC7. James took the stage to thunderous and sustained applause and chants of "we love Tish" during the boisterous rally.
The nor easter that pummeled the east coast is finally moving out to sea. Wind gust reached 40 to 60 miles per hour across the northeast. A woman in New York was killed after heavy winds blew a solar panel off a carport and hit her in the head. Streets were swamped from Ocean City, Maryland to the New Jersey shore. Many coastal areas experience flooding and beach erosion.
This homeowner is in Bowowers, Delaware. With the heavy wind and the heavy surf and the high tide, we just had an extraordinary loss of sand here on the beachfront.
>> Off Cape Cod, Massachusetts, crews pulled a man to safety after he was spotted in the water near a ferry.
In Arizona, a micro burst ripped off roofs, knocked down semitrs, and flooded neighborhoods in Tempi Monday afternoon. Wind gusts of up to 71 mph hit the city.
Madagascar President Andre Ralina says he has fled the country to an undisclosed location in fear for his life following a military rebellion. Rajelina has faced weeks of anti-government protests which reached a pivotal point on Saturday when an elite military unit joined the protest and called for the president to step down.
Global news 24 hours a day and whatever you want it with the Bloomberg News Now. I'm Michael Bar, and this is Bloomberg.
Cameron, >> thanks, Michael.
Time now for our Bloomberg sports update. And for that, we bring in John Stashour.
>> Thanks, Karen. The Seattle Mariners with two more wins are going to the World Series for the first time ever. They won 10 to 3 in Toronto. They hit two three-run homers and a two-run shot. And now they go home with a two games to none lead in the ALCS. Game one of the NLCS are the Dodgers behind the pitching of Blake Snell. A 2-1 win in Milwaukee.
A pair of Monday Night Football games. The Falcons beat the Bills 24-4, and the Bears on a last-second field goal won in Washington 25-24.
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.
Another morning of trade tensions between the US and China. The latest move: sanctions on the US units of a South Korean shipping giant, Hanwa Ocean. That's after President Trump threatened 100% tariffs over China's rare earth export restrictions last week.
Treasury Secretary Scott Besson says there's still room to negotiate.
>> I believe that China is open to discussion on this, and, you know, if, if they're not, we have substantial levers on, on our own.
That was Treasury Secretary Scott Bessant in an interview on Fox Business.
We're joined now by Bloomberg Markets reporter Valerie Titel. And, uh, Valerie, in just the last few days, it seems like the back and forth has really ramped up here. How significant is this move by China on sanctioning Hanwa?
Good morning.
>> Well, it's definitely taken the risk rally of yesterday on a back foot, with those NASDAQ futures down nearly a percent. S&P 500 down 7/10. So, treasuries are rallying as well on the back of this. So, it is a broad, uh, risk-off on this announcement from China that they have launched a probe into US impacts on its shipping sector. They specifically call out the US trade representative's Section 301 investigation.
Now, they have sanctioned five companies, and this becomes a part of a long-standing dispute over maritime dominance. Now, back in April, Washington announced plans to ch to curb China's shipbuilding prowess, and it seeks to build up its own American capabilities, which has forced China to lose some market share in the space. Now, Chinese shipping, uh, has faced severe penalties even for calling at US ports. So, it does seem like there is some sort of tit-for-tat now happening over maritime dominance.
We also heard from Scott Bessant, writing in the FT in the early hours of this morning, accusing China of trying to damage the global economy with its sweeping export controls on rare earth. So, it doesn't seem like things are calming down at the moment. There was some pretty strong language in this FT oped from Scott Bessent, saying that China is trying to export their way out of a deflationary depression that will harm their standing in the world.
Nathan, the report also said that the US will be prioritizing this issue as world leaders convene in DC for the IMF meetings. They did report that Besson is still expecting to meet his Chinese counterpart Hiong one more time before Trump and she are set to meet in South Korea at the end of the month.
And, uh, to that point, Valerie, we also heard from Secretary Bessant that he still thinks China is willing to talk, that negotiations can happen. But given all this back and forth, is there sign, uh, that there is that willingness on the Chinese side?
>> Well, look, I think what markets are really watching for, Nathan, is whether this Trump meeting still happens at the end of October. If that is called off, I think there would be growing speculation that the relationship between US and China will be damaged, and damaged in almost an irreversible way, as the US tries to in some way dellink its economy from China.
Now, that's a hard, uh, thing to do, given the reliance, uh, that the US has on Chinese exports, especially when it comes to these rare earths that are critical for the defense space. So, all these topics are coming front and center.
Again, I think it was really the move last week on rare earth that caught Trump's eye, because if you think back to the beginning of this year, the first dant between the US and China was around agreeing about rare earth continuing their export from China into the US. And it seems like they've ripped up that script that was really a key part of their first agreement in order to back off the tariffs that Trump announced back in April.
And in just 30 seconds, I put, I guess, this put all puts into question whether there can be yet another pause, uh, in the, uh, China-US trade pause.
>> Yeah, that's right. The, the, the latest 3-month pause does lapse after the supposed Trump's meeting with Shei in November. So, that is just another risk event now on markets' minds for perhaps higher tariffs. Remember, Trump did threaten 100% additional tariffs on November 1st. That would take the all-in tariff rate to 155% between the US and China.
This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.
>> Look for us on your podcast feed by 6:00 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen.
You can also listen live each morning starting at 5:00 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 991 in Washington, Bloomberg 929 in Boston, and nationwide on SiriusXM channel 121.
>> Plus, listen coast to coast on the Bloomberg Business App, now with Apple CarPlay and Android Auto interfaces.
>> And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in 5 minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.
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.
[Music]