WEBVTT - US-China Possible Trade Talks; Apple & Amazon Disappoint

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Good morning.

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<v Speaker 3>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 3>stories we're following today.

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<v Speaker 2>Karen, the move we're seeing in markets this morning comes

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<v Speaker 2>on optimism that trade tensions between the US and China

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<v Speaker 2>may be easing. China says it is assessing the possibility

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<v Speaker 2>of trade talks with the US. It is the first

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<v Speaker 2>sign since President Donald Trump hiked tariffs last month that

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<v Speaker 2>negotiations could begin between the two sides. We get more

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<v Speaker 2>from Bloomberg New senior editor Bill Ferries.

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<v Speaker 4>It's really hard to know what's happening here or if

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<v Speaker 4>it's the market really looking for any sign of a

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<v Speaker 4>potential change, any sign that one side or both sides

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<v Speaker 4>are simultaneously starting to blink here. I mean, the China's

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<v Speaker 4>Commerce Ministry said on Friday that it noted the willingness

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<v Speaker 4>of some senior US officials to talk about harriffs. On

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<v Speaker 4>the other hand, you've had the US saying that they

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<v Speaker 4>want China to reach out, that China can't sustain these

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<v Speaker 4>tariffs for very long. This latest statement doesn't seem that

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<v Speaker 4>different on the Chinese side, but it is being taken

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<v Speaker 4>as perhaps an ALI branch that could allow both sides

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<v Speaker 4>to maybe save some face and start talks, even if

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<v Speaker 4>that's at.

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<v Speaker 2>A lower level and Bloomberg's Bill Ferry says, the economic

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<v Speaker 2>fallout from the confrontation maybe giving new momentum to efforts

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<v Speaker 2>to bring both sides to the table. The US economy

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<v Speaker 2>contracted at the start of the year, China's factory activity

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<v Speaker 2>slipped into its worst contraction since December of twenty twenty three.

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<v Speaker 5>Let's turn to politics now, Nathan.

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<v Speaker 3>The White House is set to release its first budget

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<v Speaker 3>request of President Trump's second term, the so called the

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<v Speaker 3>Skinny Budget. We'll call for five hundred and fifty seven

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<v Speaker 3>billion dollars in non defense spending. That's a nearly twenty

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<v Speaker 3>three percent drop from current levels. National security spending, meanwhile,

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<v Speaker 3>would rise to a record one point zero one trillion

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<v Speaker 3>dollars thirteen percent increase. Administration officials say the budget includes

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<v Speaker 3>significant cuts to environmental programs, foreign aid, the Education Department,

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<v Speaker 3>National Institutes of Health and Housing, and urban development. The

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<v Speaker 3>military boost would pay for the Golden Dome missile defense,

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<v Speaker 3>as well as shipbuilding, border security, and a military pay raise.

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<v Speaker 3>It's not clear how the budget request would handle entitlements.

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<v Speaker 3>They represent the bulk of federal spending.

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<v Speaker 2>And Karen, the president has signed an executive order to

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<v Speaker 2>end federal funding of public broadcasters NPR and PBS. Bloomberg's

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<v Speaker 2>John Tucker joins us with that part of the story.

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<v Speaker 6>John and Nathan, the most shouldn't really come as a surprise.

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<v Speaker 6>Back in March, President Trump was asked if he had

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<v Speaker 6>any plans to yank funding for NPR and PBS.

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<v Speaker 5>I would love to do that.

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<v Speaker 3>I think it's very unfair.

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<v Speaker 5>It's been very biased. The whole group, I mean the

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<v Speaker 5>whole group of them.

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<v Speaker 6>Or Republicans have long sought to eliminate funding for NPR

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<v Speaker 6>and PBS, and President Trump has repeatedly criticized press coverage

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<v Speaker 6>of his administer. Both public media outlets do receive a

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<v Speaker 6>small portion of their funding from the federal sources. PBS

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<v Speaker 6>is set to take the larger hit. The broadcaster relies

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<v Speaker 6>on federal funds for about sixteen percent of its overall budget.

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<v Speaker 6>You know you yorkcome, John Tucker, Bloomberg Radio.

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<v Speaker 5>All right, John, thank you a while.

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<v Speaker 3>The other major story out of Washington, as a shake

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<v Speaker 3>up in the West wing, President Trump is naming his

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<v Speaker 3>national Security Advisor Mike Waltz to be the next UN ambassador.

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<v Speaker 3>Back in March, Waltz admitted he mistakenly added Atlantic Editor

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<v Speaker 3>Jeffrey Goldenberg to a signal group chat about attack plans

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<v Speaker 3>in Yemen. Now, if confirmed by the Senate, he'll be

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<v Speaker 3>moving out of the Oval Office to UN headquarters in

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<v Speaker 3>New York, began more from Bloomberg Washington reporter Tyler Kendall.

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<v Speaker 7>In terms of a promotion versus a demotion, the National

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<v Speaker 7>Security Advisor is in the West Wing. He sees the

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<v Speaker 7>President every day. He gets a security detail much like

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<v Speaker 7>the chief of Staff that other members of the administration

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<v Speaker 7>don't necessarily get. He also has been at the forefront

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<v Speaker 7>of most of, if not all, of these foreign policy negotiations,

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<v Speaker 7>particularly when it comes to Ukraine and Russia. As the

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<v Speaker 7>administration tries to push forward that they are making progress.

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<v Speaker 7>They're announcing that a critical minerals agreement just the other day.

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<v Speaker 7>He was the one that went to Saudi Arabia to

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<v Speaker 7>kick off those talks.

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<v Speaker 3>And that's Bloomberg's Tyler Kendall. The president says Secretary of

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<v Speaker 3>State Marco Rubio will serve as interim National Security Advisor

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<v Speaker 3>Rubio is also leading the US Agency for International Development

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<v Speaker 3>after it was targeted for cuts, and he's also acting

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<v Speaker 3>head of the National Archives and Karen.

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<v Speaker 2>President Trump is putting new pressure on Iran. He says

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<v Speaker 2>he will impose secondary sanctions on nations or companies that

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<v Speaker 2>buy Iran's oil. The president posted on social media quote,

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<v Speaker 2>they will not be allowed to do business with the

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<v Speaker 2>United States of America in any way, shape or form.

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<v Speaker 2>Negotiations over Iran's nuclear program hit a wall this week.

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<v Speaker 2>A meeting that had been set for tomorrow was postponed,

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<v Speaker 2>and US officials said they never agreed to take part

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<v Speaker 2>in the latest stround of talks in the first place.

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<v Speaker 3>Return to the markets now, Nathan, in futures are high.

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<v Speaker 3>You're following eight straight days of gains for the S

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<v Speaker 3>and P five hundred. As you mentioned earlier, there is

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<v Speaker 3>optimism the US and China will begin trade negotiations. Two

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<v Speaker 3>stocks that are not participating in the euphoria are Apple

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<v Speaker 3>and Amazon. Shares of Apple are down three percent. The

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<v Speaker 3>iphonemaker's earnings report failed to soothe investor concerns about its

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<v Speaker 3>biggest challenges, including escalating tariff costs and a slowdown in

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<v Speaker 3>China CEO Tim Cooks as sales from China fell more

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<v Speaker 3>than expected two point three percent to sixteen billion dollars

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<v Speaker 3>in the second quarter. Analysts say that shortfall is an

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<v Speaker 3>ominous sign for what was once a growth market.

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<v Speaker 2>And here and shares of Amazon are down more than

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<v Speaker 2>two percent. The world's largest online retailer says it's bracing

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<v Speaker 2>for a tougher business climate due to tariffs and economic turmoil.

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<v Speaker 2>Amazon CEO and the jazz highlighted at the guaranty.

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<v Speaker 8>Obviously, none of us know exactly where tariffs will settle

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<v Speaker 8>or when.

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<v Speaker 5>We haven't seen any attenuation of demand yet.

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<v Speaker 8>To some extent, we've seen some heightened buying in certain

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<v Speaker 8>categories that may indicate stalking up in advance of any

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<v Speaker 8>potential tariff impact.

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<v Speaker 2>And despite the headwinds, Amazon CEO Andy Jassey reported a

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<v Speaker 2>nine percent increase in first quarter sales.

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<v Speaker 3>In addition to earnings, Nathan, Investors will have a key

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<v Speaker 3>economic report to look forward to, the April Jobs report.

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<v Speaker 3>We get a preview with Bloomberg's Michael McKee.

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<v Speaker 9>The jobs report may be the most important economic indicator

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<v Speaker 9>going forward, but maybe not this one. The President's big

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<v Speaker 9>tariff announcements came just ahead of the April survey week,

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<v Speaker 9>so companies likely didn't have a lot of time to react.

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<v Speaker 9>We may see some reduction in federal government employment, but

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<v Speaker 9>for the most part, the April figures should suggest private

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<v Speaker 9>sector hiring is on hold. Also, the FED watch is

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<v Speaker 9>the unemployment rate rather than overall job creation, and unemployment

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<v Speaker 9>is forecast to hold steady. Michael McKee, Bloomberg Radio.

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<v Speaker 5>All right, Mike, thanks well.

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<v Speaker 3>Stay with Bloomberg for special coverage as we break down

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<v Speaker 3>the numbers and get live expert analysis. That's at eight

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<v Speaker 3>thirty Wall Street time on Bloomberg Radio and the Bloomberg

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<v Speaker 3>podcast page on YouTube. Time now for look at some

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<v Speaker 3>of the other stories making news in New York and

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<v Speaker 3>around the world, and for that we're joined by Bloomberg's

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<v Speaker 3>Michael Barr.

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<v Speaker 5>Michael, Good Morning, Good morning, Karen.

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<v Speaker 10>Supreme Court Justice Katanjie Brown Jackson denounced what she called

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<v Speaker 10>relentless attacks on the federal judiciary. Jackson says efforts to

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<v Speaker 10>intimidate judges we're threatening the constitution and the rule of law.

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<v Speaker 10>She told a group of federal judges and lawyers at

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<v Speaker 10>a conference in Puerto Rico last night. The attacks are

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<v Speaker 10>not random. The Transportation Department is rolling out a new

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<v Speaker 10>plan to address a shortage of air traffic controllers across

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<v Speaker 10>the country. The new initiatives include financial incentives to graduates.

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<v Speaker 10>National Air Traffic Controllers Association President Nick Daniels says staffing

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<v Speaker 10>at US airports is nearing a thirty year low.

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<v Speaker 11>This is a commitment to the dedicated men and women

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<v Speaker 11>keeping our skies safe. It's a real tangible move towards

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<v Speaker 11>building and sustaining the workforce that America needs.

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<v Speaker 10>It's part of what caused a domino effect delaying air

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<v Speaker 10>traffic for several days at Newer Careport. New York Governor

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<v Speaker 10>Kathy Hockel join MTA officials and law enforcement to highlight

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<v Speaker 10>a state budget deal to make subways safer for all

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<v Speaker 10>riders and transit workers. Hochel, speaking from a subway station, says,

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<v Speaker 10>these major investments increase the presence of law enforcement and

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<v Speaker 10>make crucial safety upgrades and protective barriers and.

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<v Speaker 2>May be overstated, but this is the beating heart of

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<v Speaker 2>this city. This is what sets us apart from all others,

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<v Speaker 2>gets getting people anywhere.

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<v Speaker 5>They want to go within minutes. It's extraordinary.

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<v Speaker 10>The State Department says Secretary Marco Rubio has spoken with

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<v Speaker 10>senior officials in India and in Pakistan in an effort

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<v Speaker 10>to cool tensions. Pakistan's ambassador to the US, Risman Sayeed Shaik,

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<v Speaker 10>stresses that they want peace, but his country will stand

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<v Speaker 10>up for itself.

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<v Speaker 9>We need a peaceful neighborhood, and any allegations of that sort,

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<v Speaker 9>they would need evidence.

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<v Speaker 10>It comes after a deadly attack on Cashmere. Detailed Army

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<v Speaker 10>plans for a potential military parade on President Trump's seventy

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<v Speaker 10>ninth birthday call for more than sixty six hundred soldiers,

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<v Speaker 10>at least one hundred and fifty vehicles, fifty helicopters, and

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<v Speaker 10>seven bands. According to the Associated Press, the planning documents

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<v Speaker 10>represent the army's most recent blueprint for its long planned

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<v Speaker 10>two hundred and fiftieth birthday festival on the National Mall.

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<v Speaker 10>June fourteenth, Global News twenty four hours a day and

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<v Speaker 10>whenever you want it with the Bloomberg News Now, Michael

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<v Speaker 10>Barrn this is Bloomberg.

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<v Speaker 5>Karen.

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<v Speaker 3>All right, Michael barr thank you time now for the

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<v Speaker 3>Bloomberg Sports Update. Here's John Staneshawer.

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<v Speaker 1>John, good morning, and we want to care in wild

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<v Speaker 1>game to and a wild series one where the road

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<v Speaker 1>team won five games in a row and each of

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<v Speaker 1>the last four games were decided by no more than

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<v Speaker 1>three points. Game six of Detroit Knicks had a great start,

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<v Speaker 1>led by fifteen, but as was so often the case

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<v Speaker 1>of the series, the Pistons responded. They had the lead

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<v Speaker 1>by halftime, a strong third quarter, by the next they

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<v Speaker 1>were backhead by thirteen. Sure enough, it was the Pistons

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<v Speaker 1>turn a twenty to two run on the fourth quarter

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<v Speaker 1>a seven point lead, and everyone then expecting there to

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<v Speaker 1>be a Game seven back in New York, but the

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<v Speaker 1>Knicks Valley had the ball with the game tie, brusts and.

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<v Speaker 10>Holding X trying to win till the ends.

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<v Speaker 11>Romson pucks up the three tag, Jalen Bruson hits the

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<v Speaker 11>three with.

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<v Speaker 2>Four point three reding of the Pistons call time out.

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<v Speaker 1>And Mike Breen saves those double bangs on MSG for

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<v Speaker 1>really big shots. This one a series winner by Brunson,

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<v Speaker 1>who scored forty points as the Knicks won one sixteen,

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<v Speaker 1>one thirteen to take the series for two and advance

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<v Speaker 1>to play the heavily favored Celtics. Game one Monday, in Boston.

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<v Speaker 1>Detroit still winless in home playoff game since two thousand

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<v Speaker 1>and eight. Denver and the Clippers headed into a game seven.

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<v Speaker 1>LA won one eleven one oh five. Three teams moving

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<v Speaker 1>around two of the Stanley Cup playoffs. Toronto, Vegas and Edmonton,

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<v Speaker 1>Colorado beat Dallas. They'll play a game seven. It appears

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<v Speaker 1>the Rangers have their new coach contract Top said to

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<v Speaker 1>be advanced with fifty seven year old Mike Sullivan, drafted

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<v Speaker 1>by the Rangers in nineteen eighty seven, that we never

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<v Speaker 1>played for them. He got fired by Pittsburgh three days

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<v Speaker 1>ago after spending a decade coaching the Penguins, winning two

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<v Speaker 1>Stanley Cups. Just the second two game losing streak for

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<v Speaker 1>the Mets Arizona one at City Field, four to two too.

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<v Speaker 1>The two met runs were solo homers by Juan Soto,

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<v Speaker 1>his first two homers hit at home. Met's played tonight

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<v Speaker 1>in Saint Louis. Yankees are home for Tampa Bay. Toronto

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<v Speaker 1>beat the Red Sox for to two. The Nationals won

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<v Speaker 1>four to two in Philadelphia. John Stashewer Bloomberg Sports count Nathan.

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<v Speaker 4>Coast to Coast on Bloomberg Radio nationwide on Sirius XM and.

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<v Speaker 12>Around the world on Bloomberg dot Com and the Bloomberg

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<v Speaker 12>Business app.

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<v Speaker 5>This is Bloomberg day Break. Good morning, I'm Nathan Hager.

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<v Speaker 2>On a morning we may be seeing the first sign

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<v Speaker 2>of a thaw in the trade freeze between the US

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<v Speaker 2>and China. With one hundred and forty five sent tariff's

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<v Speaker 2>still an effect on Chinese exports. The Chinese Commerce Ministry

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<v Speaker 2>now says it is evaluating the possibility of trade talks

0:12:08.679 --> 0:12:12.400
<v Speaker 2>after getting messages from the US through relevant parties. John

0:12:12.480 --> 0:12:15.480
<v Speaker 2>Gong is a former consultant to the Commerce Ministry. We've

0:12:15.520 --> 0:12:17.440
<v Speaker 2>been waiting for this for a long time. I think

0:12:17.480 --> 0:12:22.120
<v Speaker 2>the statement that the Ministry of Commerce is evaluating really

0:12:22.160 --> 0:12:25.199
<v Speaker 2>means that, first of all, there's a go ahead from

0:12:25.240 --> 0:12:27.880
<v Speaker 2>the very top of the leadership in China. John Gong,

0:12:27.920 --> 0:12:30.520
<v Speaker 2>now with the University of International Business at Economics, spoke

0:12:30.559 --> 0:12:32.840
<v Speaker 2>with Bloomberg from Beijing this morning, and we're joined now

0:12:32.840 --> 0:12:36.280
<v Speaker 2>by Bloomberg Radio and TV anchor Kritty Gupta. So, Critty,

0:12:36.679 --> 0:12:39.840
<v Speaker 2>how to take this statement from the Commerce ministry that

0:12:39.880 --> 0:12:42.280
<v Speaker 2>they're thinking about thinking.

0:12:41.960 --> 0:12:43.600
<v Speaker 5>About talks with the US.

0:12:43.600 --> 0:12:46.160
<v Speaker 2>It almost feels like how the FED used to talk

0:12:46.200 --> 0:12:49.319
<v Speaker 2>about thinking about thinking about doing something with Tristrad.

0:12:49.320 --> 0:12:49.920
<v Speaker 6>It's good morning.

0:12:50.280 --> 0:12:51.120
<v Speaker 5>Good morning, Nathan.

0:12:51.160 --> 0:12:52.640
<v Speaker 12>Yeah, it's a tricky one because, of course we know

0:12:52.640 --> 0:12:55.760
<v Speaker 12>a CCTV, which is media in China associated with the

0:12:55.800 --> 0:12:59.080
<v Speaker 12>Government of China earlier reported that that was kind of

0:12:59.120 --> 0:13:02.000
<v Speaker 12>happening earlier this week. So this is a confirmation now

0:13:02.120 --> 0:13:06.240
<v Speaker 12>from the government itself that this is largely being considered.

0:13:06.280 --> 0:13:08.800
<v Speaker 12>I think one guest this morning that I think summed

0:13:08.840 --> 0:13:12.000
<v Speaker 12>it up perfectly, so that this is a drizzle in

0:13:12.320 --> 0:13:14.960
<v Speaker 12>what's been a drought for weeks, if not months, and

0:13:15.000 --> 0:13:17.240
<v Speaker 12>I think that's one way to kind of assess perhaps

0:13:17.320 --> 0:13:19.640
<v Speaker 12>the early though that we're seeing in this terms of relationship.

0:13:19.640 --> 0:13:21.800
<v Speaker 5>But wishure remind our audience.

0:13:21.400 --> 0:13:23.560
<v Speaker 12>That this is just what we're hearing from China is

0:13:23.600 --> 0:13:26.400
<v Speaker 12>coming amid a backdrop of what Donald Trump has repeatedly

0:13:26.440 --> 0:13:29.200
<v Speaker 12>emphasized it needs to be the first step that comes

0:13:29.240 --> 0:13:32.120
<v Speaker 12>from China and not from Washington, d C. Whereas he's

0:13:32.160 --> 0:13:35.280
<v Speaker 12>also said in previous iterations that Shijinpin needs to contact

0:13:35.360 --> 0:13:38.079
<v Speaker 12>him directly in order to begin talks. Got best and

0:13:38.160 --> 0:13:40.520
<v Speaker 12>saying something similar, and that's up to Beijing to take

0:13:40.559 --> 0:13:43.000
<v Speaker 12>the first step to de escalate the dispute, so we

0:13:43.040 --> 0:13:46.360
<v Speaker 12>will actually see if China does that when they've repeatedly

0:13:46.400 --> 0:13:48.040
<v Speaker 12>asked for respect when.

0:13:47.920 --> 0:13:50.440
<v Speaker 5>It comes to taking that step.

0:13:50.200 --> 0:13:52.480
<v Speaker 2>Well, you had to think Critty that both sides have

0:13:53.200 --> 0:13:55.600
<v Speaker 2>sort of motivation to get to the table.

0:13:55.640 --> 0:13:56.720
<v Speaker 5>After the GDP.

0:13:56.559 --> 0:13:59.880
<v Speaker 2>Read we got here in the US and the shrinking

0:14:00.080 --> 0:14:02.640
<v Speaker 2>factory activity that we saw to China.

0:14:02.160 --> 0:14:03.640
<v Speaker 5>They absolutely have motivation.

0:14:03.679 --> 0:14:06.520
<v Speaker 12>I would argue that the push from the American side

0:14:06.520 --> 0:14:08.720
<v Speaker 12>may have to do with some of the early readings

0:14:08.760 --> 0:14:10.920
<v Speaker 12>on the tariff impact that you're already seeing. And I

0:14:10.960 --> 0:14:12.960
<v Speaker 12>think a great example in just the last twenty four

0:14:12.960 --> 0:14:16.120
<v Speaker 12>hours of that has been coming out of Apple and Amazon,

0:14:16.280 --> 0:14:18.600
<v Speaker 12>who are already seeing pressures.

0:14:18.160 --> 0:14:20.480
<v Speaker 5>That are going to ultimately fall on the consumer.

0:14:20.600 --> 0:14:22.280
<v Speaker 12>Nathan, if I can go there and drive some numbers

0:14:22.280 --> 0:14:24.880
<v Speaker 12>around this, sure, Apple is a great example. They're talking

0:14:24.920 --> 0:14:28.080
<v Speaker 12>about a nine hundred million dollar cost in the current

0:14:28.160 --> 0:14:30.760
<v Speaker 12>period when it comes to the effect of the planned tariffs,

0:14:30.760 --> 0:14:34.520
<v Speaker 12>and that's just on one quarter. The SZILL hasn't fully

0:14:34.880 --> 0:14:37.040
<v Speaker 12>had the full effect. Not to mention what happens when

0:14:37.040 --> 0:14:40.960
<v Speaker 12>the ninety day reciprocal tariff kind of extension happens as well.

0:14:41.000 --> 0:14:44.440
<v Speaker 12>Amazon is another great example, really talking about headwinds when

0:14:44.480 --> 0:14:46.880
<v Speaker 12>it comes to tariff related turmoil, and we know that

0:14:46.920 --> 0:14:49.520
<v Speaker 12>this week as well, that was something that became a

0:14:49.560 --> 0:14:51.560
<v Speaker 12>bit of an issue, as you know in Washington, DC

0:14:51.760 --> 0:14:54.880
<v Speaker 12>as well, where it was reported and then later denied

0:14:54.920 --> 0:14:58.360
<v Speaker 12>by Amazon that tariff prices may show up in some

0:14:58.480 --> 0:15:00.800
<v Speaker 12>of the kind of the the number you see at

0:15:00.800 --> 0:15:03.440
<v Speaker 12>the checkout for example when you buy something from Amazon,

0:15:03.520 --> 0:15:07.760
<v Speaker 12>something that did of course get the ire of Washington

0:15:08.040 --> 0:15:11.280
<v Speaker 12>and the Trump administration. Of course, Amazon pulling back on

0:15:11.320 --> 0:15:13.240
<v Speaker 12>those comments, saying that it was never going to happen.

0:15:13.360 --> 0:15:15.680
<v Speaker 12>But I think it really highlights the uncertainty that a

0:15:15.680 --> 0:15:17.960
<v Speaker 12>lot of these corporations are dealing with when it comes

0:15:17.960 --> 0:15:21.400
<v Speaker 12>to keeping the consumer engaged while also adding pressure to

0:15:21.400 --> 0:15:22.360
<v Speaker 12>the Trump administration.

0:15:22.520 --> 0:15:24.520
<v Speaker 2>So just quickly, critty, what's the signal we could be

0:15:24.560 --> 0:15:27.040
<v Speaker 2>taking from the market with the broader market moving higher

0:15:27.040 --> 0:15:29.440
<v Speaker 2>while these big tech names are still moving lower on

0:15:29.760 --> 0:15:32.119
<v Speaker 2>some of these ongoing trade concerns.

0:15:32.600 --> 0:15:34.280
<v Speaker 12>Well, if you do start to see green on the

0:15:34.280 --> 0:15:36.600
<v Speaker 12>screen in today, sustain into the weekend, it would be

0:15:36.640 --> 0:15:39.000
<v Speaker 12>the nine straight winning day for the S and P

0:15:39.120 --> 0:15:41.840
<v Speaker 12>five hundred. That is the biggest winning streak going back

0:15:41.880 --> 0:15:43.680
<v Speaker 12>to twenty twenty one, so we'll see if that is

0:15:43.760 --> 0:15:46.720
<v Speaker 12>ultimately a sentiment change. But again we're going into a weekend.

0:15:47.040 --> 0:15:47.920
<v Speaker 12>Anything can happen.

0:15:48.280 --> 0:15:51.720
<v Speaker 3>This is Bloomberg Daybreak, your morning podcast on the stories

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