Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Good morning, I'm Nathan Hager and I'm Alexis Christophers.
Speaker 3: Here are the stories we're following today now.
Speaker 2: Like s as we begin with the latest developments in
Speaker 2: the Middle East, Iran is dismissing US threats of economic
Speaker 2: pain and isolation. Treasury Secretary Scott Besson says the Trump
Speaker 2: administration will give details of an initiative on Monday that
Speaker 2: President Trump describes as an economic d day. We get
Speaker 2: the very latest from Bloomberg News director Will Kennedy.
Speaker 4: Aren't that many added things the US can do? There
Speaker 4: are sanctions that have been in place for many, many years.
Speaker 4: There's this blockade of oil tankers, which is of course
Speaker 4: having an impact. Iranian oil exports are very close to zero.
Speaker 4: It would really take an effort to persuade other countries
Speaker 4: like China not to trade with Iran to make a
Speaker 4: big further difference. One presumes putting secondary sanctions on China
Speaker 4: would be a very big step for lots of reasons,
Speaker 4: given the broader context on the China US relationship, not
Speaker 4: least because Donald Trump is about to have a meeting
Speaker 4: with shishimping.
Speaker 2: And Bloombergswill Kennedy says China will provide the biggest test
Speaker 2: of Washington's determination to follow through. Beijing is the main
Speaker 2: buyer of Iranian oil and.
Speaker 3: Nathan There may be new tensions in the Asia Pacific.
Speaker 3: The US, Japan, and South Korea held a three way
Speaker 3: call to coordinate their response after North Korea fired a
Speaker 3: barrage of short range ballistic missiles yesterday. The volley came
Speaker 3: after President Trump stunned South Korea by abruptly canceling decades
Speaker 3: old joint military exercises, and the North rejected the president's
Speaker 3: bid to resume dialogue with leader Kim Jong un. North
Speaker 3: Korea says the two leaders may have an excellent relationship,
Speaker 3: but America's hostile policies haven't changed still, South Korea's president
Speaker 3: says he supports President Trump's decision to curtail the drills
Speaker 3: and reopen diplomacy.
Speaker 2: Well lexis new trade deadlines coming up for the the
Speaker 2: US and Canada. The two sides have till midnight to
Speaker 2: reach a broader trade deal after President Trump announced a
Speaker 2: tentative agreement to avert fifty percent tariffs on billions of
Speaker 2: dollars in Canadian goods sources tell Bloomberg the current deal
Speaker 2: with lower tariffs on certain Canadian steel and aluminum exports
Speaker 2: to twenty five percent and Canadian car duties would fall
Speaker 2: to fifteen percent. Chris Jiah Freeland is a former Canadian
Speaker 2: Deputy Prime Minister. She says both sides need a better outcome.
Speaker 5: I think that is a bad outcome for Canada to
Speaker 5: have permanent tariffs on our steel, aluminum, cars and carport parts.
Speaker 5: Really harmful for those sectors.
Speaker 6: But I think it's a bad outcome for the United
Speaker 6: States as well.
Speaker 5: It's really important for people to recognize that you can
Speaker 5: lose by winning.
Speaker 2: Former Canadian Deputy Prime Minister Christia Freeland, and you can
Speaker 2: catch more of her remarks on Bloomberg Wall Street Week
Speaker 2: tonight at six eastern on Bloomberg Radio, Bloomberg Television, and
Speaker 2: the Bloomberg Business app.
Speaker 3: Well, we have a winner in this week's special runoff
Speaker 3: in California to serve the rest of former Congressman Eric
Speaker 3: Swalwell's term. With ninety five percent of votes counted, the
Speaker 3: Associated Press Projects State Senator Aisha Wahab will beat fellow
Speaker 3: Democrat Bay Area Rapid Transit Board president Melissa Hernandez fifty
Speaker 3: three to.
Speaker 7: Forty seven percent.
Speaker 3: Wahab will become the first Afghan American to serve in Congress,
Speaker 3: and her campaign was backed by the Congressional Progressive Caucus.
Speaker 3: The result comes as Swalwell remains under investigation for sexual
Speaker 3: assault allegations. Federal agencized electronic devices from the former congressman
Speaker 3: at San Francisco Airport over the weekend and later searched
Speaker 3: his home in Washington, d C.
Speaker 7: Alexis.
Speaker 2: The bid term elections are now less than eighty days away,
Speaker 2: and Republicans have a huge war chest sitting on the sidelines.
Speaker 2: The latest federal filings show President Trump's super pac Maga Inc.
Speaker 2: Has a nearly four hundred four million dollar cash pile.
Speaker 2: The committee received another three million dollars in donations last month,
Speaker 2: including from private prison operator Geogroup and sugar producer Florida Crystals.
Speaker 2: At the same time, Maga Inc. Spent just one hundred
Speaker 2: and thirty two thousand dollars in July, mostly on operating costs.
Speaker 2: President Trump has said he plans to use Maga Inc.
Speaker 2: To support Republicans. So far, though he hasn't signed off
Speaker 2: on a plan.
Speaker 3: And Treasury Secretary Scott Besson says he's prepared to ramp
Speaker 3: up buybacks of costly US government debt. That's despite the
Speaker 3: short lived impact so far on long term borrowing costs.
Speaker 3: Besson also hinted at a new fiscal plan to address
Speaker 3: the highest treasury yields in decades.
Speaker 8: Once the market understands that we are focusing on fiscal
Speaker 8: consolidation and that we are trying to bring the market
Speaker 8: back into equilibrium in a thinly traded market, I think
Speaker 8: you know, I'm confident that bonds will continue declining.
Speaker 3: Treasury Secretary Scott Besson added the expanded buyback could be
Speaker 3: more than the four billion dollars currently planned for next month.
Speaker 2: There's a warning this morning from former New York Fed
Speaker 2: Bank President Bill Dudley, the current Bloomberg opinion columnist, says
Speaker 2: the US equity market is in bubble territory.
Speaker 9: Look at the railroads and the internet, telecom boom. All
Speaker 9: those things did great things for the comedy. So two
Speaker 9: things can be true at the same time. The technological
Speaker 9: innovation can be really transformative, but at the same time
Speaker 9: you can have an investment boom and bus And in fact,
Speaker 9: if you look at history, it tells you that that's
Speaker 9: usually the case. So the question here is really it's
Speaker 9: just really not whether it's going to be a turn
Speaker 9: from a boom to a bus. It's really a question
Speaker 9: of timing and magnitude.
Speaker 2: That's former New York Fed President Bill Dudley. He says
Speaker 2: the stock market bubble will likely burst before the end
Speaker 2: of twenty twenty seven. You can hear his full remarks
Speaker 2: on the Bloomberg Video Hub at Bloomberg dot com and
Speaker 2: the Bloomberg Business app.
Speaker 3: And Nathan as warnings grow of an artificial intelligence fueled
Speaker 3: stock market bubble. Word this morning that Anthropic is preparing
Speaker 3: for a potentially record breaking IPO. Sources say the Claw
Speaker 3: developer expects to match or beat the record seventy five
Speaker 3: billion dollars raised in SpaceX is listing. Mandeep saying, is
Speaker 3: Bloomberg Intelligence is a global head of tech research.
Speaker 7: This kind of.
Speaker 10: Growth through r it is phenomenal at the scale Andthropic
Speaker 10: is at And that's where when you compare to SpaceX,
Speaker 10: which kind of pod with about eighteen to nineteen billion
Speaker 10: dollar revenue run rate growth rate, much slower than entropics,
Speaker 10: and still manage to get close to that two trillion
Speaker 10: dollar mark. So from that perspective, clearly Entropic with its
Speaker 10: growth rate, should be at least over where SpaceX traded initially.
Speaker 3: Bloomberg Intelligence is mandip sings as Anthropic may file publicly
Speaker 3: for IPO by the end of this month.
Speaker 1: Well.
Speaker 2: Meanwhile, Lexis broadcoms and talks with lenders to raise more
Speaker 2: than sixty billion dollars in debt for an AI chip
Speaker 2: financing deal that would benefit Anthropic and other companies. The
Speaker 2: potential deal would help those firms access chips and other
Speaker 2: key AI infrastructure. Ryan Gould covers the chip sector for Bloomberg.
Speaker 11: This would be among the largest that we've seen of
Speaker 11: this type of deal. I want to just throw us
Speaker 11: back a little bit to June when we saw all
Speaker 11: Common announced that partnership with black Zone and Apollo, where
Speaker 11: essentially they were looking to strike an agreements provide sort
Speaker 11: of twenty kigawats of compute to Glow for AI deployment.
Speaker 11: I mean, I think you could probably see this as
Speaker 11: some kind of extension of that agreement. This would essentially
Speaker 11: see Blackstone and Apollo participate again per our sourcing and reporting.
Speaker 2: Bloomberg's Ryan Gould says Broadcom forecast back in March it
Speaker 2: would have AI chip sales topping one hundred billion dollars
Speaker 2: next year, and.
Speaker 3: Bloomberg News has learned in Nvidia is in early discussions
Speaker 3: with the Korean AI chip designer Rebellions about possible collaborations.
Speaker 3: Sources say the talks include a technical partnership and investment,
Speaker 3: or perhaps even an acquisition. Founded during the pandemic in
Speaker 3: twenty twenty, Rebellions is among a group of semiconductor startups
Speaker 3: designing and deploying their own chips to rival market leader
Speaker 3: in video.
Speaker 2: And South Korean chip giant Samsung Electronics plans to return
Speaker 2: as much as seventy nine billion dollars to its shareholders. Alexis,
Speaker 2: joining rival s k Heinez and handing investors a chunk
Speaker 2: of the windfall generated by the AI rush. The world's
Speaker 2: biggest memory maker is set to hold a board meeting
Speaker 2: to discuss shareholder returns.
Speaker 3: Five h nine on Wall Street Time Now for a
Speaker 3: look at some of the other stories making news in
Speaker 3: New York and around the world. For that, we're joined
Speaker 3: by a Bloomberg's Michael Barr. Good morning, Michael, Good morning.
Speaker 12: Alexis authority say a woman who had been plotting to
Speaker 12: bomb the New York State Capitol building in Albany, has
Speaker 12: been arrested in an FBI sting. Jessica Bowie allegedly believed
Speaker 12: laws were being passed that were affront to Islam. She
Speaker 12: is now facing a federal terrorism charge. Authority say Bowie
Speaker 12: had been under surveillance for more than a month as
Speaker 12: she communicated with at least one confidential informant posing as
Speaker 12: isis First Assistant US Attorney John Sarconne.
Speaker 8: The charge against Bowie carries a satutory maximum prison term
Speaker 8: of twenty years, a fine of up to two hundred
Speaker 8: and fifty thousand dollars, and a lifetime term of supervised release.
Speaker 12: New York Governor Kathy Okele.
Speaker 2: Political violence has no place in our state, and I've
Speaker 2: leave this suspect.
Speaker 6: She prosecuted to the fullest extent of.
Speaker 12: The law, according to a criminal complaint. After her arrest,
Speaker 12: Bowie told FBI agents that she expected to go to prison,
Speaker 12: saying there's no helping meet. You guys know enough. In Massachusetts,
Speaker 12: Representative Seth Moulton and Senator Ed Markey held their final
Speaker 12: Democratic Senate primary debate. At one point, the argument for
Speaker 12: generational change came up on artificial intelligence.
Speaker 8: I don't know what companies of my iPad might be using.
Speaker 13: If you don't even know what you're using on your
Speaker 13: phone your iPad, like this is why we need a
Speaker 13: new generation of leaders.
Speaker 12: Audio courtesy of WCVB. Both candidates brought up affordability issues
Speaker 12: while linking domestic prices to the war in Iran. The
Speaker 12: primary is set for September first in New York. Two
Speaker 12: tornadoes touchdown in Queens and on Long Island last evening.
Speaker 12: Officials say both started as water spouts and then made landfall.
Speaker 12: No one was heard. Democratic Congresswoman Joyce Beatty accused the
Speaker 12: Trump administration of violating a federal court order barring the
Speaker 12: Kennedy Center's board from renaming the performing arts venue for
Speaker 12: President Donald Trump. Attorneys for Beattie said the representative means
Speaker 12: it was a new, breathtaking act of defiance of Congress
Speaker 12: and of this court. Global news twenty four hours a
Speaker 12: day and whenever you want it. We're the Bloomberg News.
Speaker 12: Now now Michael Barr, and this is Bloomberg Alexis.
Speaker 2: Thanks Michael, time now for our Bloomberg Sports update, and
Speaker 2: for that we bring in Dan Schwartzman Baseball Scoreboard.
Speaker 14: The Yankees finish off a sweep of the Orioles six
Speaker 14: to one. The Rays fall to the Blue Jays five
Speaker 14: to one. Well, the Braves one hit the White Sox
Speaker 14: in a two nothing win. Elsewhere, Jacob de Grom becomes
Speaker 14: the second fastest pitcher in baseball history to reach two
Speaker 14: thousand strikeouts as a Rangers. Ace does it in the
Speaker 14: fewest innings pitched outside of Chris sale to Gram and
Speaker 14: Texas at the Nationals to nothing. NFL preseason Week two
Speaker 14: began Thursday night as a Raiders gone past the Texans
Speaker 14: twenty two to twenty, but number one overall draft pick
Speaker 14: Heisman Trophy winner Fernando Mendoza struggled, completing just eight of
Speaker 14: fifteen passes for eight eighty six yards and an interception,
Speaker 14: while the forty nine Ers dominated the Chargers forty one
Speaker 14: to seventeen.
Speaker 7: That's your Bloomberg Sports update.
Speaker 2: Stay with us more from Bloomberg Daybreak coming up after this.
Speaker 1: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
Speaker 1: and around the world on Bloomberg dot Com and the
Speaker 1: Bloomberg Business app.
Speaker 6: This is Bloomberg daybreak.
Speaker 7: Good morning, I'm Nathan Hager.
Speaker 2: Treasury Secretary Scott Besson says he is prepared to go
Speaker 2: even further to bring down yields on long day to debt.
Speaker 2: He's teasing a new fiscal initiative after this week's announcement
Speaker 2: from the Treasury of expanded bond buybacks. Besson says, any
Speaker 2: initial moves in the market ahead of all this are
Speaker 2: just noise.
Speaker 8: Our announcement is for economics action, and I think that
Speaker 8: the economic action will mean that oil prices will come
Speaker 8: down sooner.
Speaker 2: That was Treasury Secretary Scott Besson at the White House
Speaker 2: and for more. We're joined by Bloomberg News FX and
Speaker 2: rates reporter Alice Gledhill.
Speaker 7: Good to have you back with us. Alice.
Speaker 2: Of course we saw the big purchase after the initial announcement,
Speaker 2: but the reversal, of course on yesterday's session should Beston
Speaker 2: be concerned that this is more than just noise.
Speaker 13: Good morning, Good morning, Thanks for having me back. Yeah.
Speaker 13: I mean, best might say he's not concerned, but I
Speaker 13: think he is concerned, and I think he probably should
Speaker 13: be concerned. I think, you know, coming into this job,
Speaker 13: he had a KPI Key Performance Indicator and that was
Speaker 13: get yields down sustainably, and it just doesn't seem like
Speaker 13: he's succeeding at that so far.
Speaker 6: You know, the problem is well known.
Speaker 13: The US has too much debt, it's growing, It has
Speaker 13: this almost two trillion dollar budget deficit, and crucially, you know,
Speaker 13: the debt is growing at a time when interest rates
Speaker 13: a high, So borrowing costs a high. Your debt service
Speaker 13: and costs a high, and that's money that you can't
Speaker 13: spend on other things. And of course, you know, high
Speaker 13: US Treasury eels also push up things like interest bills
Speaker 13: and mortgages other loans, and that's unpalatable I think from
Speaker 13: a political perspective, certainly ahead of the midterms. So yeah,
Speaker 13: I think there's a wides bread viewer market that the
Speaker 13: US can't keep on, can't sort of keep going on
Speaker 13: like this. It's not sustainable, you know, and does it
Speaker 13: all end with some sort of crisis? And I think
Speaker 13: that's what the US administration is trying to avoid.
Speaker 2: So what kind of fiscal initiative could the Treasury Secretary
Speaker 2: announce here they could really take a bite out of
Speaker 2: these rising dead costs. We heard the secretary talk about
Speaker 2: going after fraud I mean, would that be enough.
Speaker 13: Yeah, I think that's the key question for investors, certainly
Speaker 13: heading into the weekend. I mean, obviously we had Best
Speaker 13: and comeback on screens yesterday and talk a little bit
Speaker 13: more about the measures that he's announced this week. So
Speaker 13: he sort of talked up the size of these potential
Speaker 13: buybacks and the longer dated bonds that had a very
Speaker 13: small impact on yields, but it was pretty fleeting, to
Speaker 13: be honest, and then he sort of flags this upcoming
Speaker 13: fiscal initiative. But yeah, I mean details are pretty unclear.
Speaker 13: I think, yeah, you mentioned the potential sort of fraud
Speaker 13: task force there, but I mean, I'm not sure the
Speaker 13: market is really buying this all that much at the moment.
Speaker 13: I think these are kind of seen as sort of
Speaker 13: stopgap measures and the issue, you know, the things we
Speaker 13: were just talking about, the enormous deficite and so on,
Speaker 13: that's the big problem and that's what needs to be tackled.
Speaker 13: And I'm not quite sure that sort of Best in
Speaker 13: the kind of dancing around these issues this week, with
Speaker 13: these sort of kind of piecemeal ideals ideas, is really
Speaker 13: sort of convincing anyone in the market to that point.
Speaker 2: I mean, we heard strategistic JP Morgan Chase come right
Speaker 2: out and say that expanded bond buybacks could test the
Speaker 2: Treasury's credibility. I mean, what's the risk that this could
Speaker 2: all back for you're on the department.
Speaker 6: I think that absolutely is the risk.
Speaker 13: Yeah, I agree with JP Morgan, and I think you know,
Speaker 13: if you come out and say, you know, we've got
Speaker 13: this tool, it's you know, it's going to help liquidity
Speaker 13: in a part of the market where I think some
Speaker 13: people doubt there is actually a liquidity problem. I think, yeah,
Speaker 13: it just feels like the treasure is maybe flailing a
Speaker 13: little bit here and that you know, I think that's
Speaker 13: damaging to its credibility, and that's sort of why you
Speaker 13: saw the decline in yields earlier this week reverse pretty quickly.
Speaker 13: I had an interesting conversation actually with one big investor
Speaker 13: here in Europe yesterday who was saying, there's not much
Speaker 13: that Beston can do kind of right now, Like what
Speaker 13: the long end really needs is a hike actually from
Speaker 13: the Fed, and that will sort of sure up its
Speaker 13: inflation inflation fighting credentials, and that's going to help sort
Speaker 13: of restore confidence at the long end of the curve.
Speaker 6: So yeah, an interesting response from him.
Speaker 13: He was, you know, he said, besn't kind of need
Speaker 13: sort of signal kind of so much, but you know
Speaker 13: that the FED needs to be involved here as well.
Speaker 2: An interesting point considering we just tarned from San Francisco
Speaker 2: FED President Mary Daily on Bloomberg just yesterday saying that
Speaker 2: she's more focused on the short end of the curve
Speaker 2: as opposed to the long end.
Speaker 7: But I mean, we've also seen throughout all this.
Speaker 2: AI companies coming out with massive debt offerings as well.
Speaker 2: I mean, is that the kind of thing that can
Speaker 2: have an impact on what we're seeing in the government
Speaker 2: bond space.
Speaker 6: Yeah, for sure.
Speaker 13: I mean I think it's very hard to quantify the
Speaker 13: extent to which that mega issuance in the AI in
Speaker 13: tech space particularly is impacting government bonds. But you know,
Speaker 13: Betten himself sort of mentioned this as being a factor
Speaker 13: in the rise in US BONN yields in his comments yesterday.
Speaker 13: I think, I guess the point is that you have
Speaker 13: a lot of this corporate issuance is long dated, a
Speaker 13: lot of it is highly rated, so you got because
Speaker 13: it's a credit, you got a bit more pick up
Speaker 13: in yield over the comparable US treasury. So you know,
Speaker 13: if you're an investor hunting for yield, a court like,
Speaker 13: why wouldn't you buy that stuff? And of course, you know,
Speaker 13: it's not just the US government that's issuing an enormous
Speaker 13: amount of debt. It's governments everywhere, whether that's while certainly
Speaker 13: in Europe, it's the UK, it's Germany, it's France, it's
Speaker 13: you know, Japan has increasing issues.
Speaker 6: So there's just more debt everywhere.
Speaker 13: And I think that's another deep structural forces that's driving
Speaker 13: up eels on treasuries and other sovereign debt everywhere.
Speaker 2: Sort of last minute alice from the people that you're
Speaker 2: speaking with, what are they telling you when it comes
Speaker 2: to what they would like to hear from the Treasury
Speaker 2: Department in terms of a credible move to bring these
Speaker 2: borrowing costs down.
Speaker 13: So I think it's it's kind of back to that
Speaker 13: point about tackling the underlying issue on a sort of
Speaker 13: serious fundamental level, and that's kind of I suppose a
Speaker 13: significant fiscal program that starts to bring down that deficit significantly,
Speaker 13: but I think from a political point of view that
Speaker 13: you know, that's not easy, and I think that's why
Speaker 13: the market is going to keep on testing the US administration.
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Speaker 7: And I'm Nathan Hager.
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Speaker 9: Ran