Hi, It's Carol and Tim's here too, and today we want to introduce you to the Bloomberg Daybreak podcast.
We certainly do every day. Nathan Hager, Karen Moscow and Amy Morris bring you a roundup of the top stories from Wall Street to Washington and around the world. It's all in the Daybreak podcast feed by six am each morning.
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Good morning, I'm Nathan Hager.
And I'm Amy Morris. Here are the stories we're following today.
We're going to begin with the deal in the Middle East. Israel and Hamas have come to an agreement that we'll see dozens of hostages freed from Gaza in return for a four day pause in the fighting and the release of Palestinian prisoners. Bloomberg Simon Marx begins our team coverage in Tel Aviv.
In the fine print of the deal, there is an opportunity for additional days of so called pause. Israel said that for every ten additional hostages, they would be willing to add an additional day of pause in the war. But at the same time, Benjamin Natanyahu, the Prime Minister, has been very clear to say this does not mean the end of the conflict, and that their original goals to eradicate Harmas and deradicalize Gaza, etc. Is still very much the state today.
Bloomberg Sigmon Mark says the pause is expected to begin tomorrow morning.
This temporary ceasefire was pushed for by the US and its allies. We get more from Bloomberg political contributor Genie she and Zano.
It is a big, big move forward for many people because it's really the first diplomatic breakthrough we've seen since the war began after the October seventh attack. But it comes with so much trepidation and so many questions. This is not a ceasefire, it's a pause. It comes also as a result of enormous pressure both inside Israel and internationally that the Israeli government has been feeling, particularly from the relatives of these two hundred and thirty six hostages.
Bloomberg contributor Genie she and Zano says three Americans will be among the hostages, leaving Gaza. Amy.
Another major story we're following this morning is the return of Sam Aldman to open Ai, just days after he was fired then hired by Microsoft. Sam Aldman is back as CEO and the board at open Ai is in for an overhaul. We get more from Bloomberg Intelligence analyst Matthew Bloxham.
I kind of think the board were backed into a corner, and you know, I think they were just seeing the company unravel, so I don't think they had really any choice. I think from Nah, the big questions is going to be, ok, what's the detail? What beyond a new board that looks more supportive of sam Altman, are they going to be more profound changes to the structure of the company. What
does this mean for the possible IPO? How they're going to kind of commercialize things like chat GPT more effectively to take advantage of the opportunity this day.
Matt Bloxon with Bloomberg Intelligence says the initial board will be led by Brett Taylor, a former co CEO of Salesforce. Other directors include Quorra CEO, Adam DiAngelo, and Larry Summers, the former Treasury secretary and a paid contributor to Bloomberg and.
Sources say, Microsoft is also likely to get representation on the new board, certainly as an observer, possibly with one or more board seats. In a post on x Microsoft CEO Satya Nadella praised the changes at OpenAI, calling them quote a first essential step on a path to a more stable, well informed, and effective governance.
On a very busy morning, Amy, we're also following market reaction to one of the most highly anticipated earnings reports. Shares of Nvidia are down nearly one percent in early trading. That's despite an earning's blowout that went past analyst estimates. We get more on that from Bloomberg technology reporter at Ludlow in San Francisco.
We go to the outlook for the fiscal fourth quarter sales would be twenty billion dollars plus or minus two. And while that's a really strong outlook, there was some commentary from Nvidia that they expect sales or shipments of GPUs to China to drop in the current period or the fiscal fourth quarter, as a direct result of the expanded US technology export curbs. What we're talking about is in Vidia's inability to ship the cutting edge GPUs to
the Chinese market. But they were very clear that will be offset by demand from other markets around the world.
Bloomberg's Ed Ludlow says another reason behind in Nvidia's drop was its run up this year, and video was already higher by more than two hundred and forty percent.
And a big name in the cryptocurrency space is taking a legal fall. Binance, the world's largest crypto exchange, has pleaded guilty to anti money laundering and sanctions violations. Attorney General Merrick Garland says Binance failed to stop suspicious transactions with terror groups including Hamas, and violated several laws, including the Bank Secrecy Act.
These laws and were that our financial institutions are not available to designated terrorist organizations, drug traffickers, and sanctioned nation states that threaten public safety and our national security.
Attorney General Garland says Finance will pay four point three billion dollars under the deal and its CEO, CZZL, will step down and pay a fifty million dollar fine. Sal could face up to ten years in prison, but is expected to serve no more than eighteen months.
And on the economic front, Amy investors will have to navigate a number of reports this morning, almost all of Thursday and Friday's numbers have been compressed into today, so let's get a preview now from Bloomberg's Michael McKay.
The Marquee release is initial jobless claims. Wall Street wants to know if last week's surprise jumped to two hundred and thirty one thousand was a one off or assigned. The labor market is starting to cool significantly October durable goods orders. Meanwhile, we'll offer the first clues to business spending plans in the fourth quarter. A drop in Boeing jet sales may depress the over were all headline number, while capital goods orders, a proxy for business spending in GDP,
are forecast to eke out only a marginal gain. Finally, the University of Michigan's final reading of consumer sentiment for November may influence some investors views of holiday season consumer spending. Michael McKee, Bloomberg Radio.
All right, thank you, Nathan. Time now for a look at some of the other stories making news around the world, and for that were joined by Bloomberg's of John Tucker, Good.
Morning John, Good morning Amy. The Pentagon confirming it conducted an air strike against Iranian backed militants operating out of Iraq. Let's get more of the story this morning from Bloomberg's Ed Baxter.
The Pentagon says it was in response to several short range missile attacks. Pentagon spokeswoman Sabrina.
Sang Immediately following the attack, a US military AC one three aircraft in the area conducted a self defense strike against an Iranian backed militia vehicle and the number of Iranian backed us A personnel involved in this attack. This self defense strike resulted in some hostile fatalities.
Seeh says some US service members were injured in the attack. She also says the US conducted three additional strikes in Syria.
At Baxter Bloomberg.
Radio, Florida Governor Ron de Santis secure the endorsement of influential Iowa conservative Bob vnder Platz. Vander Platz backing is the second major endorsement for DeSantis in Iowa this month, following Governor Kim Reynolds. Both vnder Plants and Renolds are influential among evangelical voters, a sizeable bloc of the state. DeSantis is making a make or break prush shit in that state, banking on a strong showing they can give him momentum to stay in the race pull show DeSantis
trailing Donald Trump by over forty five points. For those early holiday travelers, leaving before dawn to avoid the rush may work in some parts of the nation, but not in other parts. Bloomberg meteorologist Rod Carolyn.
Most of the country looking good for travel on this Wednesday, ahead of the big Thanksgiving Day holiday. We have problems though, in the eastern United States with rain from North Florida along the coastal Carolinas and into parts of New England, especially northern New England, where we'll be dealing with some snow today. The Pacific Northwest will also deal with precipitation rain, likely at the lower elevations.
With snow in the mountains.
Today is one of the busiest travel days of the year. A Florida judge who's ruled Tesla's trial over at twenty nineteen fatal crash blamed on autopilot will include a claim against the company for punitive damages. The judge at Palm Beach County cited evidence that shows CEO Elon Muskin staff engineers knew its driver assistance system was defective. Global News twenty four hours a day and whenever you want it with Bloomberg News. Now I'm John Tucker and this is Bloomberg Amy.
All right, thank you, John. Time enough for our Bloomberg Sports update. For that, we bring in John stash Hour Emmy.
Only two weeks to go in the college football regular season, and the College Football Playoff Committee out with its latest poll last night. Georgia remains number one, with Ohio State second Michigan third. Those two teams play each other Saturday in ann Arbor. A change at the four spot, Washington moving ahead of Florida State, the Committee denying that it's due to Florida State having just lost its quarterback Jordan
Travis to a season ending injury. Oregon is currently sixth, will play Oregon State on Friday, Texas is seventh, the long Orange Plate Texas Tech on Friday, and Alabama is eighth, and the Crimston Tide play the Iron Bowl Game against Auburn on Saturday. College basketball, a lot of the top teams of the nation have.
Gone to MAUI.
Number one Kansas lost to fourth rank Marquette seventy three point fifty nine. Second ranked Purdue a seventy one sixty seven victory over seventh ranked Tennessee in the NBA A game between Indiana and Atlanta, and both teams scored over one hundred and fifty points. That's only the seventh time that's ever happened in NBA history. The Pacers beat the Hawks one fifty seven to one fifty two. Both teams shot sixty percent from the field. San Diego Padres have
named Mike Schilt their new manager. He managed the Cardinals for four years, got them into the playoffs three times. He replaces Bob Melvin, who left the Padres to go to the Giants. Willie Hernandez, who won the Cy Young Award and the MVP in nineteen eighty four pitching for the Tigers, has passed away at sixty nine. Johns Dashlee our Bloomberg Sport.
From coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on SYRIASXAM, the Bloomberg Business app in Bloomberg dot com. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. The relentless war in Gaza since Thomas's October seventh attack on Israel looks like it's taking a pause. Both sides have reached a deal that will see Hamas release dozens of hostages in exchange Palestinian prisoners. And for more on this agreement, we are joined by Bloomberg new senior editor Bill Ferries. Bill, thanks for being with us. Let's start off first with the terms of this deal. What exactly have Israel and Hamas agreed to after these days of talks.
Well, what we know from both sides and from the Qataris who have been really kind of leading the mediation efforts here is that within the next less than twenty four hours now at this point, what we call a humanitarian pause and the conflict will go into effect. Hamas has agreed to free initially fifty hostages. We expect these to be women and children who were taken when they
stormed into Israel on October seventh. In return, Israel we'll begin looking at releasing perhaps dozens of Palestinian prisoners, also likely to be women and children. But the interesting thing about this is it's a four day pause, but there's a potential for an extension here if Hamas agrees to release more hostages. So basically, for every additional ten hostages
the Hamas releases, that extends the pause by a day. Remember, Israel estimates about two hundred and forty people were taken hostage during those October seventh attacks, So this has the potential to extend the deal quite a bit. In return, as I said, Hamas gets some prisoner releases from Israeli prisons.
They also get an end to over flights and bombing air strikes of Gaza in that time, and really the chance to get a lot more aid flowing in in terms of medical supplies and fuel for nonprofit groups that do humanitarian work. So all sides I think had an interest at this point in getting reaching a deal. There were a lot of hiccups in the process, but it looks like it should be going into effect within the coming day.
Let's talk about some of those heys, because, as you know, Bill, Israeli Prime Minister Benjamin Netanyahu had said as these talks were underway that he wouldn't agree to any pause at all unless all the hostages were freed. So what did it take to get at least this kind of a deal done. The possibility that we could see more pauses, and this potential for a trickle of hostages to be released over time.
Well, you're right, it wasn't clear at all that a deal would ever happen. Qatar got involved soon after those October seventh attacks and started trying to find a way to focus really on hostages and getting them back the US. The Biden administration was deeply involved in these talks as well,
and you're right they did. There was this push to have all hostages released at once that didn't seem to be getting much traction, and Hamas came back with an offer of fifty fifty hostages in one trench and then put potentially more in the coming days. What we know is that the leader of Katar continued to stay very engaged in this and we uh, what we what we ended up seeing was was really in agreement to kind
of kind of bridge that divide with the fifty. President Biden had had a conversation with President Prime Minister Yahoo at one point, and they really felt like this was probably the best deal they could get for now. The US was really encouraged by the early release of a couple Americans who were taken in the October seventh grade and uh, and they basically built on that. So they went from an initial request of fifty to to what could be dozens more than that. We kind of have
to see where it goes. But the priority was always on initially on women and children and the elderly civilians, and then looking more at uh at soldiers from both sides, and I think that's where talks on further releases will get more complicated.
And even as we see this deal get implemented, as you say, possibly as soon as after tomorrow, Prime Minister Natan Yahoo is saying that this won't mean that the war itself is coming to an end. What should we expect when it comes to the fighting and the progress that Israel wants to make against Thamas once this potentially initial pause takes effect.
Yeah, I mean, I think it's important to note that all sides are calling this a pause. I think I've seen the word truth, so temporary truth, things like that. No one is calling this an end to the conflict. Before they voted to accept this agreement, they've said that the war will continue, they can they want to go after eliminating Hamas and returning all the hostages, and they said, you know, when this truce ends, they will they will
go back in the fighting will zoom. So it's an important, significant step here, but it's not the end of the conflict as we.
Know in Okay.
Bill Ferries, Bloomberg News senior editor, joining us this morning after we learn that a deal has been struck now between Israel and Hamas to pause the fighting in exchange for hostage releases at least some of the hostages initially being released from Gaza. Now we want to turn to the latest deal at open Ai. This saga that began last Friday may be over after intense pressure from investors. Sam Altman is returning as the CEO of the chat GPT parent company, and the board at OpenAI looks like
it is about to go through a serious overhaul. Let's bring in Alex Web for more on this story. Covers tech for us for Bloomberg News and has been following this since the sudden ouster last Friday and now the sudden return.
Help us make sense of this, Alex.
I mean, it's a big victory for Microsoft. Essentially, the thing that appears to have happened, and this is what's on the reporting suggests last week because that one of the reasons Sam Worton was ousted was concerned that he was prioritizing the commercial impulses of the company over what actually is mandate, namely to improve and this genuinely is the wording. It is to work for the benefit of
all humanity. Now Microsoft is almost certainly going to be getting greater oversight, greater sway at a board level over what happens at OpenAI, if the company is therefore going to be run there with so slightly more in the interest of Microsoft, not necessarily in the interest of all humanity. The three members have been appointed to the board Adam DiAngelo,
the See of Quorra, who was already on there. The new ones are going to be Larry Summers, of course, former Treasury Sector under Bill Clinton, and Brett Taylor, the former co CEO of Salesforce. They are going to be as many as nine additional board members. The expectation is perhaps two of those could be representatives of Microsoft, and Altman himself could well rejoin the board.
And we should, in the interest of transparency, that Larry Summers, along with joining the board at open Ai as a paid contributor to Bloomberg, with these additions, at least initial additions to the board Alex it sounds like that could be the bigger deal here. Than just simply the return of Sam Altman as the CEO.
Yeah, the thing we'd heard on Monday from sat In Adella, the Microsoft CEO, in an interview Bloomberg Television. He had said he wanted improvements to governance at open AI. It seems as though the board composition was the sticking point and why it took a good few days to reach a resolution, given that we had heard as early as Sunday that there were moved from both sides to bring
Sam Altman back into the fold. When Nadella says he wants improvements to governance, everybody more or less understood that to mean he wanted Microsoft to have better inside. Because this completely blindsided Microsoft is firing of Sam Mortman and subsequent departure of Greg Brockman, the president of the company. Microsoft had no forewarning of that. They learned it pretty much at the same time the rest of the world did.
The understanding is it was maybe a few minutes before they put the press release out or the post on their website app. So you know, surprises for big businesses are not considered good and that's clearly something that Microsoft wanted to fix.
To your point earlier about this signaling the idea that this could take the open AI in the direction of where Microsoft wants to go as opposed to the betterment of humanity. Talk a little bit more about what this could mean for open AI and the competition, this mass of competition that we're seeing between Microsoft and so many of the other players in the artificial intelligence space, what could this mean down the line.
So there are basically four big players, certainly in the Western hemisphere in this in you know, advanced artificial intelligence research. There's deep Mind, which is now Google deep Mind. It is part of Google. There is Microsoft sort of Meta AI research clearly part of Meta. There is open ai, which is very closely aligned with Microsoft. And there is also an Anthropic which was founded by a bunch of
departees from open ai a few years ago. Google, Microsoft, and Amazon are the ones really competing in the cloud. And at the moment, the real way to make money from AI is in the cloud. It is from not necessarily selling the AI services to companies to use. It's the processing power needed to run those AI services, and that's where the margin really is. Google, Microsoft hams and can compete very fiercely in that space. Microsoft has this huge benefit from the relationship with open Ai, but it
does not technically own open Ai. And then the way that Google owns DeepMind. So that's really the lay of the land when it comes to the battlefield. This will help Microsoft potentially by hewing them more closely still to their long term business goals.
Let's talk about the other ai story that everyone was waiting for even before last Friday. Of course, that's the earnings from Nvidia. Another is a solid quarter, but the the shares are dropping ever so slightly this morning. What's the disconnect?
I mean, look, the expectations for this company are absolutely sky high, and there was heading into the numbers some expectation that essentially a beat is a meat, right, People were expecting them to beat expectations, and if they didn't completely blow expectations out of the water, then there might
be a little bit of profit taking. That certainly looks like what is happening now that the shares have been on such a tear in recent months, there's an opportunity for you know, some investors to maybe just cash in a little bit on that. It doesn't appear to be anything particularly catastrophic. There's still a lot of growth left in this company. The only question mark hetting forward is
what is the exposure to China? They want more exposure, but it looks as though the government is cracking down on some of that. How big an impact.
Will that have?
This is Bloomberg Daybreak Today, your morning brief on the story's making news from Wall Street to Washington and beyond.
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