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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Good morning.

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Speaker 3: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 3: stories we're following today.

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Speaker 2: Karen, we begin with geopolitics. Tensions are heating up again

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Speaker 2: as China threatens further retaliatory measures against US curbs on

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Speaker 2: its shipping sector. Beijing announced the move after the US

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Speaker 2: Trade Representative began an investigation into China's maritime industry. We

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Speaker 2: get the very latest from Bloomberg's Jill Desis in Hong Kong.

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Speaker 4: This is an escalation in what really has been a

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Speaker 4: long standing dispute between both the US and China over

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Speaker 4: mariton dominance. We've really seen several months ago the US

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Speaker 4: announced US port fees for Chinese ships that were coming

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Speaker 4: into those ports, amounting to the tune of millions of

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Speaker 4: dollars of potential fees is set to go into effect

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Speaker 4: this week. We've also seen these two countries really kind

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Speaker 4: of trade tit for tat sort of retaliatory measures against

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Speaker 4: each other over the last several days, even involving some trade,

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Speaker 4: particularly when it comes on the China side, to some

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Speaker 4: new export curbs they were placing on materials related to

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Speaker 4: rare earth issues. And then now obviously you're seeing a

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Speaker 4: lot of this kind of snowball into what's happening on

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Speaker 4: the shipping front.

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Speaker 2: Bloomberg's Jill Lisis in Hong Kong says the dispute has

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Speaker 2: consequences for the global economy. Vessels are involved in eighty

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Speaker 2: percent of world trade.

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Speaker 3: Well, adding to the tensions between the US and China.

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Speaker 3: Nathan words from Scott bessen The Financial Times is reporting

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Speaker 3: the Treasury Secretary has accused China of trying to hurt

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Speaker 3: the world's economy. This comes after Beijing and post sweeping

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Speaker 3: export controls on rare earths and critical minerals papers as

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Speaker 3: Bessend is expecting to meet Chinese Vice Premier Hollifong one

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Speaker 3: more time before Trump and she meet in South Korea

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Speaker 3: later this month.

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Speaker 2: Well, now, let's get to the latest from the Middle

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Speaker 2: East and President Trump is back in Washington after a

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Speaker 2: whirlwind trip to the region, where he celebrated the ceasefire

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Speaker 2: between Israel and Hamas and laid out a vision for

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Speaker 2: a broader Middle East piece.

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Speaker 5: I'm not talking about single state or double state or

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Speaker 5: two state.

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Speaker 3: We're talking about the rebuilding of Gaza.

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Speaker 2: President Trump spoke to world leaders at a signing ceremony

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Speaker 2: in Shermail Shake, Egypt, but challenges remain for maintaining the piece.

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Speaker 2: Stuart Livingston Wallace leads Bloomberg's Middle East coverage.

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Speaker 6: You have that international pressure, but also you potentially have

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Speaker 6: boots on the ground, and while the US is deploying

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Speaker 6: I think something like two hundred personnel within Israelti monits

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Speaker 6: and the ceasefire, they have no intention of actually going

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Speaker 6: into Gaza itself. So that probably has to be in

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Speaker 6: international force number two.

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Speaker 7: Money.

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Speaker 6: It is going to cost an enormous amount of money

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Speaker 6: to rebuild Garza, I mean, let alone clearing the rubble,

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Speaker 6: then you have to start again. That money has to

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Speaker 6: come from somewhere, and I think the hope is that

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Speaker 6: a lot of that will come, in particular from the

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Speaker 6: Gulf region.

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Speaker 2: Bloomberg Stewart living Ston Wallace reports other points of President

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Speaker 2: Trump's twenty point piece plan remain unclear, like disarming Hamas,

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Speaker 2: but the President predicts they will happen well elsewhere.

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Speaker 3: In Washington, Nathan, it is now day fourteen of the

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Speaker 3: government shut down. House Minority Leader Haking Jeffries is calling

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Speaker 3: Democrats back to Capitol Hill today in a show of

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Speaker 3: solidarity even though they won't have anything to work on.

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Speaker 3: Speaker Mike Johnson has canceled votes for a third week

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Speaker 3: in a row and is keeping his members in their districts.

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Speaker 8: Our members are doing very productive work. We're in constant

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Speaker 8: communication with them, and we are ready to come back

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Speaker 8: and continue the work in our committees and everything on

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Speaker 8: the House floor. We will return the legislative session as

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Speaker 8: soon as the Democrats come to their senses and open

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Speaker 8: the government.

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Speaker 3: And that was how Speaker Mike Johnson on Capitol Hill.

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Speaker 3: And as the shutdown continues, members of the military are

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Speaker 3: set to miss their first paychecks tomorrow. Treasury Secretary Scott

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Speaker 3: Besson told Fox's Business his agency is prioritizing payments to

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Speaker 3: ensure service members get paid. Past Treasury secretaries have questioned

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Speaker 3: whether it's possible to set aside some payments over others.

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Speaker 3: Outside of fight over raising the Dutch Seal.

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Speaker 2: Let's get to news outside Earth. Karen SpaceX's Starship rocket

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Speaker 2: has managed to launch satellites and make it back to

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Speaker 2: this planet intact. The milestone is critical to CEO Elon

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Speaker 2: Musk's aim of preparing the rocket for regular space missions.

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Speaker 2: Here is the moment of launch from Starbase in South Texas.

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Speaker 7: Three two one.

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Speaker 2: We have liftoff, Go super Go Starship, thanks for all

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Speaker 2: the historic flights.

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Speaker 7: Pad On.

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Speaker 2: Ten minutes after that, Starship super Heavy boosters split from

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Speaker 2: the spacecraft as planned, before splashing down in the Gulf

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Speaker 2: of Mexico. The success marks a step forward in Musk's

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Speaker 2: ambitions to carry NASA astronauts to the Moon in under

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Speaker 2: two years and eventually to establish civilization on Mars.

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Speaker 3: Well, we turned to the markets now, Nathan, where bank

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Speaker 3: earnings are front and center. JP Morgan, Goldman, Sag City Group,

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Speaker 3: and Wells Fargo all report this morning, and we get

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Speaker 3: the very latest of Bloomberg's John Tucker John good morning.

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Speaker 5: Yeah, good morning, caring Yeah. Wall Street's biggest bank sent

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Speaker 5: for another strong quarter, lifted by resilient trading desks and

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Speaker 5: also a rebound and deal activity that's helped us send

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Speaker 5: their stocks to fresh eyes. Seema Shad, Principal Global, expects

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Speaker 5: to the financials to help lift all boats.

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Speaker 9: We can see continued performance from financials, so along with

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Speaker 9: those tech stocks which continue to drive the market, we

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Speaker 9: would think that financials can join in with Roddy and

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Speaker 9: help push the aktimak a little bit further.

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Speaker 5: And then you have those two recent corporate blow ups

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Speaker 5: tring Color Holdings and First Brands. They're igniting concerns about

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Speaker 5: potential cracks, and credit bank executives likely to get a

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Speaker 5: question about that during the earnings calls this morning. Questions

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Speaker 5: on the outlook for more bank mergers will also probably

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Speaker 5: come up after last week's announced eleven billion dollar acquisition

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Speaker 5: of Comerica by fifth third the biggest US bank stocks,

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Speaker 5: by the way, have outpaced the S and P five

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Speaker 5: hundreds gains over the past twelve months. In New York

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Speaker 5: Home John Tucker Bloomberg Radio.

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Speaker 3: Meantime, Nathan Philadelphia FED President Anna Paulson is signaling she

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Speaker 3: favors two more quarter point rate cuts this year. Paulson

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Speaker 3: says monetary policy should look through the impact of tariffs

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Speaker 3: and consumer price increases. I anticipate that twenty twenty six

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Speaker 3: we'll see growth near potential and inflation rising and then

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Speaker 3: succeed subsiding as tariffs, together with current and past monetary

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Speaker 3: policy restrictiveness, work their way through. And Philadelphia Fed President

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Speaker 3: Anna Paulison made those comments at the National Association for

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Speaker 3: Business Economics Annuel Conference in Philadelphia. Time now for a

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Speaker 3: look at some of the other stories making news in

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Speaker 3: New York and around the world, and for that we're

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Speaker 3: joined by Bloomberg's Michael Barr.

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Speaker 7: Michael, Good Morning, Good morning, Karen. New York Attorney General

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Speaker 7: Letitia James attended a rally for New York City mayoral

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Speaker 7: candidate Zoron Mamdani to offer her support for the Democratic

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Speaker 7: front runner, first public appearance since she was indicted on

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Speaker 7: federal charges of bank fraud and making a false statement.

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Speaker 7: Following President Trump's call for her prosecution, James defied the

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Speaker 7: President Monday night, referring to her successful prosecution of the

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Speaker 7: Trump business.

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Speaker 3: I will now, I will wake, I will then I will.

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Speaker 7: Pick audio courtesy of ABC seven. James took the stage

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Speaker 7: to thunderous and sustained applause and chance of we Love

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Speaker 7: Tish during the boisterous rally. The northeaster that pummeled the

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Speaker 7: East Coast is finally moving out to sea. Wind gust

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Speaker 7: reached forty to sixty miles per hour across the Northeast.

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Speaker 7: A woman in New York was killed after heavy winds

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Speaker 7: blew a solar panel off a carport and hit her

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Speaker 7: in the head. Streets were swumped from Ocean City, Maryland

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Speaker 7: to the New Jersey shore. Many coastal areas experienced flooding

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Speaker 7: and beach erosion. This homeowner is in Bowers, Delaware.

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Speaker 10: With the heavy wind and the heavy surf and the

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Speaker 10: high tide, we just had an extraordinary loss of sand

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Speaker 10: here on the beach front.

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Speaker 7: Off Cape Cod, Massachusetts. Cruise pulled a man to safety

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Speaker 7: after he was spotted in the water near a ferry

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Speaker 7: in Arizona. A microburst ripped off roofs, knocked down semi trucks,

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Speaker 7: and flooded neighborhoods in Tempe Monday afternoon when gusts up

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Speaker 7: to seventy one miles per hour hit the city. Madagascar

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Speaker 7: President Andre Rogelina says he has fled the country to

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Speaker 7: an undisclosed location in fear for his life. Following a

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Speaker 7: military rebellion. Rogelina has faced weeks of anti government protests,

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Speaker 7: which reached a pivotal point on Saturday when an elite

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Speaker 7: military unit joined the protest and called for the president

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Speaker 7: to step down. Global News twenty four hours a day

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Speaker 7: and whatever you wanted with the Bloomberg News Now Michael Barr.

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Speaker 7: This is Bloomberg.

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Speaker 3: Hearn he thanks Michael. Time now for our Bloomberg Sports update,

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Speaker 3: and for that we bring in John Stashauer.

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Speaker 1: Thanks Gavin.

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Speaker 10: The Seattle Mariners, with two more wins, are going to

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Speaker 10: the World Series for the first time ever. They won

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Speaker 10: ten to three in Toronto. They hit two three run

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Speaker 10: homers in a two run shot and now they go

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Speaker 10: home with the two games to non lead on the ALCS.

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Speaker 10: Game one of the NLCS are the Dodgers, behind the

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Speaker 10: pitching of blakesnew a two to one win in Milwaukee,

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Speaker 10: a pair of Mond of Night football games. The Falcons

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Speaker 10: beat the Bills twenty four to fourteen, and the Bears

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Speaker 10: on a last second field goal won in Washington twenty

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Speaker 10: five twenty four. That's your Bloomberg Sports update.

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Speaker 3: Stay with us. More from Bloomberg day Break coming up

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Speaker 3: after this.

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Speaker 1: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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Speaker 1: and around the world on Bloomberg dot Com and the

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Speaker 1: Bloomberg Business out. This is Bloomberg Daybreak.

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Speaker 2: Good morning, I'm Nathan Hager. Another morning of trade tensions

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Speaker 2: between the US and China. The latest move sanctions on

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Speaker 2: the US units of a South Korean shipping giant Hanwah Ocean.

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Speaker 2: That's after President Trump threatened one hundred percent tariffs China's

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Speaker 2: rare earth export restrictions last week. Treasury Secretary Scott Besson

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Speaker 2: says there's still room to negotiate.

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Speaker 11: I believe that China is open to a discussion on this,

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Speaker 11: and if they're not, we have substantial levers.

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Speaker 7: On our own.

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Speaker 2: That was Treasury Secretary Scott Besson in an interview on

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Speaker 2: Fox Business. We're joined now by Bloomberg Markets reporter Valerie

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Speaker 2: Titel and Valerie. In just the last few days, it

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Speaker 2: seems like the back and forth has really ramped up here.

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Speaker 2: How significant is this move by China on sanctioning Hanwa

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Speaker 2: Good morning, Well.

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Speaker 11: It's definitely taken the risk rally of yesterday on a

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Speaker 11: back foot, with those Nasdaq futures down nearly a percent,

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Speaker 11: s and P five hundred down seven tents, so treasuries

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Speaker 11: are rallying as well on the back of this. So

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Speaker 11: it is a broad risk off on this announcement from

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Speaker 11: China that they have launched a probe into US impacts

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Speaker 11: on its shipping sector. They specifically call out the US

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Speaker 11: trade Representatives Section three oh one investigation. Now they have

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Speaker 11: sanctioned five companies, and this becomes a part of a

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Speaker 11: long standing dispute over maritime dominance. Now. Back in April,

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Speaker 11: Washington announced plans to curb China's shipbuilding prowess and it

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Speaker 11: seeks to build up its own American capabilities, which has

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Speaker 11: forced China to lose some market share in the space.

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Speaker 11: Now Chinese shipping has faced severe penalties even for calling

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Speaker 11: at US ports, so it does seem like there is

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Speaker 11: some sort of tit for tat now happening over maritime dominance.

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Speaker 11: We also heard from Scott Bessant, writing in the FT

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Speaker 11: in the early hours of this morning, accusing China of

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Speaker 11: trying to damage the global economy with its sweeping export

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Speaker 11: controls on rare Earth. So it doesn't seem like things

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Speaker 11: are calming down at the moment. There were some pretty

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Speaker 11: strong language in this ft op ed from Scott Bessent,

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Speaker 11: saying that China is trying to export their way out

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Speaker 11: of a deflationary depression that will harm their standing in

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Speaker 11: the world Nathan. The report also said that the US

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Speaker 11: will be prioritizing this issue as world leaders convene in

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Speaker 11: DC for the IMF meetings. They did report that Besson

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Speaker 11: is still expecting to meet his Chinese counterpart, Holy Punng

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Speaker 11: one more time before Trump and She are set to

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Speaker 11: meet in South Korea at the.

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Speaker 2: End of the TA And to that point, Valerie, we

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Speaker 2: also heard from Secretary Besson that he still thinks China

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Speaker 2: is willing to talk, that negotiations can happen. But given

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Speaker 2: all this back and forth, is their sign that there

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Speaker 2: is that willingness on the Chinese side?

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Speaker 11: Well, look, I think what markets are really watching for,

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Speaker 11: Nathan is whether this Trump She meeting still happens at

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Speaker 11: the end of October. If that is called off, I

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Speaker 11: think there would be growing speculation that the relationship between

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Speaker 11: US and China will be damaged, and damaged in almost

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Speaker 11: an irreversible way as the US tries to in some

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Speaker 11: way delink its economy from China. Now, that's a hard

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Speaker 11: thing to do given the reliance that the US has

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Speaker 11: on Chinese exports, especially when it comes to these rare

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Speaker 11: earths that are critical for the defense space. So all

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Speaker 11: these topics are coming front and center again. I think

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Speaker 11: it was really the move last week on rare earth

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Speaker 11: that caught Trump's eye because If you think back to

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Speaker 11: the beginning of this year, the first detente between the

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Speaker 11: US and China was around agreeing about rare earth continuing

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Speaker 11: their export from China into the US. And it seems

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Speaker 11: like they've ripped up that script that was really a

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Speaker 11: key part of their first agreement in order to back

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Speaker 11: off the tariffs that Trump announced back in April.

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Speaker 2: And in just thirty seconds. I guess this all puts

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Speaker 2: into question whether there can be yet another pause in

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Speaker 2: the China US trade pause.

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Speaker 11: Yeah, that's right. The latest three month pause does lapse

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Speaker 11: after the supposed Trump's meeting with she in November, so

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Speaker 11: that is just another risk event now on market's minds

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Speaker 11: for perhaps higher tariffs. Remember Trump did threaten one hundred

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Speaker 11: percent additional tariffs on November first. That would take the

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Speaker 11: all in tariff freight to one hundred and fifty five

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Speaker 11: percent between the US and China.

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