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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the.

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Speaker 3: Bloomberg Dbacure podcast. Good morning, It's Friday, the seventeenth of July.

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Speaker 3: I'm Caroline hepkea in London and.

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Speaker 4: I'm Stephen Caroline Brussels. Coming up today, US President Donald

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Speaker 4: Trump accuses China of election meddling as he looks to

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Speaker 4: shift voters attention away from the Middle East.

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Speaker 3: The sell off in chipstocks deepens after the sector's blistering

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Speaker 3: rally earlier this year.

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Speaker 4: Plus the UK's soon to be Prime minister prepares a

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Speaker 4: policy blitz, including new licenses for North Sea oil.

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Speaker 5: Let's start with a roundup of our top stories.

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Speaker 4: As the United States becomes more deeply embroiled in its

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Speaker 4: conflict with Iran, President Donald Trump has used a primetime

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Speaker 4: TV address to accuse China of interfering in the twenty

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Speaker 4: twenty US presidential election. The allegations threatened to further strained

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Speaker 4: ties with the world's second largest aconomy as Trump seeks

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Speaker 4: to boaster Republican prospects ahead of November's midterm elections. US

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Speaker 4: intelligence agencies have previously said they found no evidence of

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Speaker 4: Chinese interference in the twenty twenty vote over. Trump claimed

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Speaker 4: Beijing stole hundreds of millions of US voter records.

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Speaker 6: Over a period of years.

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Speaker 7: Starting during the twenty twenty election cycle, the People's Republic

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Speaker 7: of China carried out what is believed to be the

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Speaker 7: largest compromise of election data in history, resulting in China's

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Speaker 7: illicit acquisition of two hundred and twenty million US voter files.

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Speaker 7: That information includes names, addresses, phone numbers, political party preferences,

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Speaker 7: and other sensitive data that would be needed to register

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Speaker 7: to vote.

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Speaker 4: Reacting to Trump's comments, a spokesperson for the Chinese Embassy

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Speaker 4: in Washington said it has never and will never interfere

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Speaker 4: in US presidential elections. President Trump's remarks risk complicating efforts

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Speaker 4: to stabilize US China relations ahead of Presidents Shooting Paying's

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Speaker 4: planned visit to Washington in September.

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Speaker 3: Trump's wenewed focus on America's biggest geopolitical rival comes as

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Speaker 3: divisions continue to deepen within his own Republican base over

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Speaker 3: the US Israel War with Iran. Tucker Carson was one

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Speaker 3: of Trump's most prominent allies during his re election campaign

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Speaker 3: and first year back in the White House. Speaking to

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Speaker 3: BLUEMBGGS Michelle Hausseain, the right wing political commentator and former

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Speaker 3: Fox News hosts, said that Trump no longer reflects the

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Speaker 3: priorities of the voters who elected him.

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Speaker 8: I was in agony when I criticized Trump. I liked Trump.

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Speaker 8: I didn't want to endorse Trump and campaign with Trump

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Speaker 8: and spoke at the Republican National Convention. And I've defended

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Speaker 8: Republicans for thirty five years in public, and I had

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Speaker 8: zero interest in having a spat with them, and so

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Speaker 8: I felt driven to my positions. Trump allowed the US

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Speaker 8: government to be completely steered by this tiny little country

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Speaker 8: in the Middle East, Israel. To you are a great detriment.

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Speaker 8: And I watched it happen. I was offended by that,

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Speaker 8: argued against it directly to him, that had no effect

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Speaker 8: at all, and then we went up in a war

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Speaker 8: with Iran that has grievely hurt the United States.

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Speaker 3: Tucker Carlson's comments come as Republicans prepare for November's mid

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Speaker 3: term elections, with Trump's approval rating below forty percent. However,

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Speaker 3: the latest filing show Republicans will enter the campaign with

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Speaker 3: a financial edge, backed by a one point one billion

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Speaker 3: dollar WACHESS, more than triple what Democrats have.

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Speaker 4: US military has carried out a sixth consecutive night of

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Speaker 4: strikes against Iran, targeting sites.

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Speaker 6: Washington says they're.

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Speaker 4: Being used to attack commercial shipping in the Strait of Hormuz.

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Speaker 4: Iran responded by attacking US bases in Kuwait, Jordan, and Bahrain.

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Speaker 4: Kuwait's military said it is up to thirty two drones

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Speaker 4: targeting what it called vital infrastructure, with falling debris damaging

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Speaker 4: residential areas. White House Press Secretary Carlyn Levitz has around

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Speaker 4: breached to last month's agreement with Washington by trying to

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Speaker 4: by continuewing to attack commercial vessels.

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Speaker 2: The reason for the recent strikes over the course of

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Speaker 2: the last several days is because Iran violated the memorandum

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Speaker 2: of understanding that we struck with them. Specifically, in the

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Speaker 2: memorandum of understanding that they signed, they were not to

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Speaker 2: fire on commercial vessels moving through the Strait of Hermus

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Speaker 2: and unfortunately they have made the tragic decision for them

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Speaker 2: to do that.

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Speaker 4: Love It spoke, as The Wall Street Journal and Associated

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Speaker 4: Press reported, the US has expanded its air campaign to

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Speaker 4: include strikes on bridges in Iran. Meanwhile, Tehrana is showing

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Speaker 4: those sign of backing down. State media quoted a senior

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Speaker 4: military spokesman is warning that any US strikes on Iranian

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Speaker 4: infrastructure would be met with attacks on all the infrastructure

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Speaker 4: in the region.

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Speaker 3: Kiyoshia became Japan's most valuable company last month, but since

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Speaker 3: then its market cap has halved. The Asian ship maker

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Speaker 3: sums up the growing investor skepticism around the AI valley.

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Speaker 3: Bloomberg's m Lie Garfield Reynolds says that the mood in

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Speaker 3: markets is shifting.

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Speaker 1: What change is The doubts have been creeping in about

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Speaker 1: whether the extremely high profit expectations that around the AI

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Speaker 1: boom can end up being realistic.

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Speaker 3: Garfield renolds as the companies like Yoshia are still well

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Speaker 3: performing companies, with analyst bullish about the firm, but sky

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Speaker 3: high expectations coupled with leverage retail bets on AI is

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Speaker 3: seen as a downside risk for.

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Speaker 5: The chip maker.

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Speaker 4: In the UK, Andy Burnham is preparing to announce drilling

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Speaker 4: in the North Sea and taking control of Thames Water.

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Speaker 4: Plomberg has learned that the next Prime Minister has asked

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Speaker 4: civil servants to draw plans to be unveiled next week

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Speaker 4: as part of a blitz of announcements. Speaking earlier this week,

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Speaker 4: Burnham stress he would focus on voters' economic issues.

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Speaker 9: We want to connect politics better with people. Well, let's

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Speaker 9: deal with some of the pressures people are under. You know,

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Speaker 9: life has changed with people and it's not necessarily got better,

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Speaker 9: and I think we just need to be relentlessly focused

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Speaker 9: on that.

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Speaker 4: Andy Burnham there, who is the only candidate in the

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Speaker 4: running in the race to replace Kerith Charmer as leader

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Speaker 4: of the Labor Party. The political party announces the results

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Speaker 4: of that contest later today, with Burnham expected to enter

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Speaker 4: a number ten Downing Street next week.

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Speaker 3: Bank bosses are turning their attention to Brussels and the

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Speaker 3: EU's long awaited answer to a deregulation drive by the

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Speaker 3: United States. European Commission will publish its report on bank

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Speaker 3: competitiveness later today. Brim Bank's Fairly Fullston has more.

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Speaker 10: It's been more than a year in the making, but

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Speaker 10: the financial industry risks being disappointed by EU plans to

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Speaker 10: shore up the continent's banks. The proposal is not expected

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Speaker 10: to cut headline capital requirements, a key demand from the industry,

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Speaker 10: but will make some changes which may lighten obligations on banks.

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Speaker 10: One measure aims to deal with the output floor capping.

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Speaker 10: Lender is used internal models to reduce capital requirements. Bloomberg

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Speaker 10: has learned that there is also a commitment to revisit

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Speaker 10: crisis era caps on bonuses in London. Freddie Fulston Bloomberg Radio.

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Speaker 4: Netflix is forecasting a second consecutive quarter of slowing sales growth,

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Speaker 4: feeding investor anxiety about its future. The streaming giant projected

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Speaker 4: revenue of just under thirteen billion dollars in the current

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Speaker 4: quarter and earnings of eighty two cents a share, just

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Speaker 4: shy of analyst estimates. Shares a Netflix of decli more

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Speaker 4: than forty percent over the last years. The company's pursuit

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Speaker 4: of Warner Brothers Discovery and subsequent results led to concerns

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Speaker 4: of slowing momentum. The company has sought to reassure investors

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Speaker 4: by out learning a plan to sustain growth in the

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Speaker 4: coming years.

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Speaker 3: Those are top stories for you today. Let's have a

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Speaker 3: look at the markets this morning. Socks continuing to drop

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Speaker 3: in Asia. The mscush Pacific index is down this morning

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Speaker 3: three percent, and you see a real slump for Japanese equities.

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Speaker 3: The NIK two to five down by five point four percent.

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Speaker 3: Set for its worst day since March. This is Europeans

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Speaker 3: DOT futures are also slumping down one percent. US STOP

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Speaker 3: futures are in the red, so there's a real reversal

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Speaker 3: of for the AI trade concerns.

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Speaker 5: About tech shares.

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Speaker 3: Looking at Brent with these renewed hostilities in the Middle East,

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Speaker 3: that you've got break CREWD futures up eight tens of

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Speaker 3: one percent at eighty four dollars ninety five. Gold is

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Speaker 3: on track for its biggest weekly loss since early June.

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Speaker 3: And again there is this speculation around the Federal Reserve

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Speaker 3: may have to keep interest rates higher for longer because

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Speaker 3: of these rising oil prices. Ten year treasury yields this

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Speaker 3: morning they were steady at four point five four percent.

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Speaker 5: Those are the markets.

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Speaker 4: In a moment, we'll bring you more on what we

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Speaker 4: learned from President Trump's primetime speech, plus can Andy Burnham

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Speaker 4: break the curse of the short lived UK Prime Minister?

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Speaker 4: But another story that's caught our eye this morning, as

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Speaker 4: Christopher Nolans The Odyssey is set for its first weekend

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Speaker 4: in cinemas, and as many people thinking about Homer's classics,

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Speaker 4: which they may might not have studied in their youth,

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Speaker 4: Daniel Mandelssohn, editor at Large of the New York Review

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Speaker 4: of Books, who published a translation of the Odyssey last year,

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Speaker 4: has been writing about this recently for Bloomberg Weekend, and

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Speaker 4: he says it's one of literature's most ancient questions, whether

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Speaker 4: you are an Iliad person or an Odyssey person. One's

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Speaker 4: a pome of war, one's a post war tale of

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Speaker 4: trying to return home. Do you prefer one in your

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Speaker 4: youth and one in later life? Daniel places the works

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Speaker 4: in a historical literary context, which I can't do justice

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Speaker 4: to when he looks at some of the debates and

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Speaker 4: how they've involved over time. But both works have inspired

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Speaker 4: so much writing since doesn't make me wonder if anything

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Speaker 4: being written today is going to involve so much scrutiny.

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Speaker 4: Scrutiny so many decades behind.

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Speaker 1: No.

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Speaker 3: There has also been a sea change really in the

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Speaker 3: way that people study the classics. They're taught in different

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Speaker 3: ways in lots of different countries. It was often seen

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Speaker 3: as very elitist. I think this is the ultimate, isn't it?

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Speaker 3: In terms of making it appeal to a very bored

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Speaker 3: audience of having this big, smash hit Hollywood movie.

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Speaker 5: I mean I know it's only coming out today.

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Speaker 3: I know people have already got tickets that are going

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Speaker 3: to be seeing it this afternoon, But I think this

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Speaker 3: kind of really broadens it out and kind of democratizes it,

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Speaker 3: doesn't it. And obviously, like the opening line of the

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Speaker 3: Odysses is such a well known one about you know,

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Speaker 3: the story of this man, resourceful man.

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Speaker 5: Yeah, so I think it's going to be.

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Speaker 3: Very interesting to see whether there's we newed interested in

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Speaker 3: Latin and Greek after this.

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Speaker 4: Oh, Caroline, I knew yet again, and you would proved

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Speaker 4: to be that the erudite one of the two of

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Speaker 4: us who's actually actually read.

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Speaker 5: Us bits of it. It is long and very dense.

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Speaker 6: Not enough pictures for me, I feel.

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Speaker 4: We'll put a link to dinieand Mandelson's piece, a really

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Speaker 4: great read if you want to think about the broader

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Speaker 4: literary debates before you go and see the film. We'll

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Speaker 4: put a LinkedIn in our podcast cill Notes bring you

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Speaker 4: more now, though, on President Trump's address to the nation,

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Speaker 4: which he used to revive on substantiated claims about election

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Speaker 4: fraud and security, Our senior US government editor Derek Wallbank

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Speaker 4: joins us for more. Derek, what did Donald Trump say,

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Speaker 4: and what evidence did he provide for his claims?

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Speaker 11: Well, the President had a nationwide address from the White House.

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Speaker 6: It's a very rare thing to be done.

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Speaker 11: It's not all that common, and it's usually a place

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Speaker 11: where presidents talk about the biggest thing on their mind.

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Speaker 11: In just a few months before the critical November midterm

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Speaker 11: elections to the United States, the biggest thing on Donald

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Speaker 11: Trump's mind was shown to be claims of election manipulation

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Speaker 11: with regards the twenty twenty elections.

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Speaker 6: Now, this is not necessarily where a.

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Speaker 11: Lot of Republicans have wanted his focus to be, but

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Speaker 11: it is where his focus is.

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Speaker 6: The White House at the same time.

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Speaker 11: Put forward a a fairly large repository of documents that

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Speaker 11: they said were recently declassified that we're going to bolster

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Speaker 11: his arguments.

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Speaker 6: That all sort of amount to the idea.

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Speaker 11: That Congress ought to do something, and the something that

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Speaker 11: Donald Trump is suggesting is passing a piece of legislation

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Speaker 11: that includes restrictions on absentee voting and some other things

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Speaker 11: like that. Now, all of this kind of taken together,

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Speaker 11: I think a lot of the claims that you heard

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Speaker 11: from the President are claims that you've heard from the

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Speaker 11: president before.

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Speaker 6: A lot of them relate to the.

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Speaker 11: Twenty twenty presidential election that Donald Trump lost, that Joe

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Speaker 11: Biden won. Joe Biden served four years as president, and

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Speaker 11: they're very much sort of in the rear view. But

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Speaker 11: one of the things that is important to note here

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Speaker 11: is that all of this here becomes foundation for things

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Speaker 11: that Trump wants to do. He wants changes to the

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Speaker 11: way the US runs elections, he wants changes that he

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Speaker 11: wants changes made before the twenty twenty six mid terms,

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Speaker 11: and all of this is meant to build a case

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Speaker 11: to support that. Unfortunately for the President walking into this speech,

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Speaker 11: he did not have the votes in either the House

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Speaker 11: or the Senate really, and especially the Senate for this

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Speaker 11: legislation as it currently sits. The Senate is held by Republicans,

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Speaker 11: but there wasn't necessarily a path forward.

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Speaker 6: Is there a path forward? Now?

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Speaker 11: It's not really clear that he's changed minds yet.

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Speaker 3: Those sorts of primetime addresses, then, as you say, they're

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Speaker 3: really unusual.

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Speaker 5: They're usually from major national events.

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Speaker 3: Did President Trump explain why he chose to highlight this

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Speaker 3: issue now?

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Speaker 5: Is it about the midterms?

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Speaker 11: Well, it's important to remember that this is something that

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Speaker 11: has not left Donald Trump's mind. It's something that has

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Speaker 11: been at the forefront of his mind for a while now.

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Speaker 11: He's even in recent months said that he would be

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Speaker 11: willing to stop a lot of the legislative agenda of

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Speaker 11: Congress until he gets this legislation through. So, even if

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Speaker 11: a lot of Republicans have said that they kind of

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Speaker 11: want to change the subject, it's really clear that the

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Speaker 11: president doesn't.

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Speaker 6: This is the thing that.

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Speaker 11: He really wants to focus on, whether whether that's what

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Speaker 11: other people want to focus.

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Speaker 6: On or not.

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Speaker 11: And indeed, you heard some of this from Democrats. The

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Speaker 11: immediate response almost unanimously from Democrats that we've heard from

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Speaker 11: and that we've talked to, who said that this is

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Speaker 11: just a distraction from other things, including from cost of

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Speaker 11: living issues, from affordability issues that they think that the

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Speaker 11: president doesn't want to talk about because, in their argument,

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Speaker 11: looking very closely toward that twenty twenty six mid term election,

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Speaker 11: they don't think that he has something to talk about.

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Speaker 11: And so the idea from the Democrats is that this

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Speaker 11: is just sort of this is just sort of trying

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Speaker 11: to change the subject.

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Speaker 6: How will that be successful?

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Speaker 11: I think that's one of the key things, And again,

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Speaker 11: as I say, even though there was a bunch of

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Speaker 11: stuff put forward, was there anything really really new here?

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Speaker 6: Not really?

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Speaker 4: The Stark Worldbank, our senior US government editor, thank you.

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Speaker 6: Stay with us.

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Speaker 4: More from Bloomberg Daybreak Europe coming up after this.

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Speaker 3: Now let's turn our attention to the UK. Andy Burnham

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Speaker 3: becomes leader of the Labor Party today after he was

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Speaker 3: unchallenged to replace Kis Starmer.

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Speaker 5: From next week.

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Speaker 3: He will join a long list of prime ministers who

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Speaker 3: have led the UK in a tumultuous decade since the

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Speaker 3: Brexit referendum. Are UK Politics reported. James Wilcock joins us

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Speaker 3: now for more. Good to see you, James. Firstly, what

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Speaker 3: do we know about the Burnham administration. Who's going to

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Speaker 3: get the top jobs and what his key policy parties

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Speaker 3: are going to be.

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Speaker 12: On the top jobs. We simply don't know. I mean

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Speaker 12: that there's been some reporting this week in the Ft

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Speaker 12: that Shaban Mahmood, the current Home Secretary, is in line

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Speaker 12: to replace Rachel Reeves as the chancellor. A spokesman Forrandy

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Speaker 12: Burnham says that no founders has been made and like

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Speaker 12: the latest we have on this and form our own

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Speaker 12: reporting is that it does appear to be true that

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Speaker 12: Mamood has sort of jumped ahead of Ed millerban the

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Speaker 12: Energy Secretary in the kind of Westminster rumor mill as

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Speaker 12: the person who are tipped to be the chancellor. But

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Speaker 12: it still does seem to be up in the air.

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Speaker 12: And I say that three days out from Burnham walking

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Speaker 12: into number ten down, that shows the level of uncertainty

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Speaker 12: around this project that I can't give you a final

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Speaker 12: answer count and that's applies to the entire top team

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Speaker 12: across the cabinet. But look in terms of the vibes,

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Speaker 12: what I can tell you is Andy Burnham is going

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Speaker 12: to be giving a speech today about quote the courage

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Speaker 12: to fix the big things now. He needs to show

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Speaker 12: that he is different to Keir Starmer and that he's

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Speaker 12: going to do sort of make the change that was

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Speaker 12: promised in twenty twenty four. So that we're reporting that

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Speaker 12: civil servants are being asked to draw plans to take

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Speaker 12: times to walk into public ownership, to drill in the

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Speaker 12: North Sea, and you could imagine this goes beyond our reporting.

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Speaker 12: Their debates being held in Burnham Camp right now about

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Speaker 12: tax reform, well taxes, land taxes. I could point to

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Speaker 12: social care, defense spending. There are big, big, big challenges ahead.

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Speaker 12: What we are going to hear today is he is

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Speaker 12: willing to front up to those big challenges. What we

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Speaker 12: will wait to see in the coming weeks is what

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Speaker 12: that exactly looks like.

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Speaker 5: But there are plans to address it.

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Speaker 4: James Andy Burnham willie a substantial majority in Parliament, but

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Speaker 4: it's a party that's seen its popular support evaporate while

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Speaker 4: in power.

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Speaker 6: Can he revive Labour's fortunes?

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Speaker 5: It seems like a very difficult tasked.

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Speaker 6: Even the polling for Labor is dire.

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Speaker 12: There is clearly a frustration in the UK that the

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Speaker 12: change that was voted for in twenty twenty four hasn't arrived.

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Speaker 12: That is why Kirstamer leaves office, you know, as soon

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Speaker 12: as next week, despite having the largest landslide Labours seen

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Speaker 12: in decades. But look four weeks ago Andy Burnham couldn't

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Speaker 12: have come Prime Minister. That is the fairy tale Labor

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Speaker 12: are banking on. This man from Manchester has beaten back

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Speaker 12: Reform had a more than twenty point vote swing and

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Speaker 12: for Labor MPs who thought there was no hope they

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Speaker 12: were going to be out of office within three years,

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Speaker 12: and there was nothing to turn it around. This is

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Speaker 12: what they are banking on. This is where they're putting

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Speaker 12: their chips. What I am curious to see is if

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Speaker 12: they can turn that hope, that kind of optimism, if

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Speaker 12: that's a fleeting thing, or if they can turn it

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Speaker 12: around and on that I'm very curious to see what

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Speaker 12: the burn administration, when it becomes that does on welfare reform.

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Speaker 12: It's what effectively scuppered or started to scuffer the star

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Speaker 12: administration with these fiscal problems they have. It's seen as unavoidable.

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Speaker 12: Something has to be done, but quite what and how

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Speaker 12: they get it across the light? That will be a

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Speaker 12: test that we'll watch deems see if he can revive

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Speaker 12: Labor's fortunes.

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Speaker 3: Yeah, and so there are big challenges for Burnham as

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Speaker 3: Prime Minister, aren't there? But there does seem and when

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Speaker 3: you talk about that optimism, there was also quite a

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Speaker 3: lot of optimism when Kis Starmer won the landslide of victory,

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Speaker 3: you know, only two years ago, and that was very

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Speaker 3: kind of quickly that political capital went. There does seem

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Speaker 3: to be more awareness maybe with Labor MPs and Andy

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Speaker 3: Burnham that that capital could be short lived?

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Speaker 12: Is there It's so funny because when I was thinking

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Speaker 12: about what I was going to say about this, Caroline,

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Speaker 12: I said.

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Speaker 6: That when we covered twenty twenty four, we were.

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Speaker 12: All saying at the time there are these big physical challenges,

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Speaker 12: and despite having a detailed manifesto had a lot of optimism,

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Speaker 12: it was unclear what choices Kiirstam would make about the

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Speaker 12: big political trade offs. I think I can kind of

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Speaker 12: copy and paste that analysis too right now. If anything,

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Speaker 12: the physical trade offs are even more stark. The UK's

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Speaker 12: borrowing costs are the highest in the G seven yields

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Speaker 12: have risen more sharply related to G seven p's compeditor

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Speaker 12: start of the year, and this fiscal math comes when

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Speaker 12: the UK's tax birds already at a post war high,

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Speaker 12: and since then there have been big defense spending pledges

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Speaker 12: that kirs Starmer has made. These are all big, big challenges.

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Speaker 12: I The only real difference, I think is that, like

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Speaker 12: you say, Andy Burnham is a much more veteran politician

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Speaker 12: the Kirs Starmer, and they come into this sort of

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Speaker 12: second administration in a five year government, very much aware

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Speaker 12: of how the first one has gone and how they

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Speaker 12: aren't magically different than the Conservative Party. They have the

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Speaker 12: same fiscal constraints, and they are also going to have

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Speaker 12: political constraints too. Whether the magic that showed itself in

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Speaker 12: Makerfield will continue for a number ted administration.

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Speaker 5: That is the big question and challenge that Andy Burnhaman faces.

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Speaker 4: Thanks for listening to Bloomberg Daybreak Europe.

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