Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
We begin with a slew of news involving China this morning. Let's start with economic data. The latest reading show expansion in China's services industry slowed in June. Bloomberg Markets editor Eddie Vanderwald says the trend is troubling.
This number is above fifty, but it is terrible. So the weakness that we're seeing here, I think will probably start to push the authorities to deliver a broad based stimulus, which is something we haven't seen. Stimulus we've seen so far has really been targeted on the property sickness, so it needs to be a little bit more broad by.
Bloomberg's Eddie Vanderwald notes that tais China Services PMI declined to fifty three point nine, down from fifty seven point one in May.
Meantime, Nathan supply chain issues TI geopolitics are also in focus. It's been a common theme when it comes to US China relations. Now Chinese President Xi Jinping is calling on the world to turn away from decoupling and reconsidering supply chains. Bloomberg Day Break Asia anchor. Brian Curtis has details from Hong Kong.
It's ironic. The impassioned call came a day after China itself imposed limits on exports of two key medals. These are minerals used to make advanced semiconductors. President She told the Shanghai Cooperation Organization that China wants to work with nations to reject this setting up of barriers. It also comes a day after the Chinese government postponed a trip to Beijing by Europe's top diplomat, Joseph Perell. No reason was given for the postponement.
In Hong Kong. Brian Curtis, Bloomberg day Break.
Okay, Brian, thanks you. More details on that restriction of metal exports from China. Beijing says exports for two medals crucial to make semiconductors, must now apply for licenses to ship them out of the country. Analysts say the impact on the US tech sector depends on the current stockpile levels of these medals the companies have on hand, but if the restrictions drag on, prices will likely go up.
And that's not all when it comes to the US and China butting heads on tech and it appears the White House is planning another round of fresh restrictions on Beijing. Bloomberg's John Tucker joins US Now with the details.
John, Good morning, and Karen.
The Biden administration preparing to tighten export controls, and this time the focus is on cloud computing services like those provided by Amazon and Microsoft. The cloud's critical in training AI models. The Wall Street journalist as Washington may require cloud providers to get permission before they could do business with Chinese firms. The administration doesn't want China to get a leg up on the US when it comes to
artificial intelligence. Microsoft's Azure and Amazon Web Services are the global leaders in the business of providing Internet computing to enterprises. This would be an escalation of export controls from October, when the US said it would restrict sales of some artificial intelligence chips to China. You are John Tucker, Bloomberg Daybreak.
All right, John, Thanks, there's some positive news out of China this morning. It involves Tesla. The evmaker's China output increased almost twenty percent in June, according to preliminary data from China's Passenger Car Association. Earlier this week, Tesla smashed estimates by setting a company record in quarterly sales. But in the pre market, Tesla shares are giving back just a bit. They're down four tenths of one percent.
Well back here in the US, Nathan, we have a developing story in Washington. Multiple reports say the White House was briefly evacuated Sunday after the Secret Service discovered powder in a West Wing common area. Preliminary TAJ showed this substance was believed to be cocaine. President Biden was not at the White House Sunday evening. He was in Camp David for the weekend.
We also have news at the intersection of politics and social media. Karen a federal judge in Louisiana has ordered Key Biden administration officials and agencies not to contact social media platforms to suppress speakers in viewpoints they disagree with. The ruling could curtail efforts to combat misinformation about health
and other issues. It comes after Louisiana and Missouri filed cases claiming the administration with silencing views of the question COVID policies, and the legitimate of the twenty twenty election.
Wells.
In breaking news this morning, Nathan on labor negotiations between the Teamsters and UPS. The International Brotherhood of Teamsters says its negotiations with United Personal Service have collapsed. They walked away from the bargaining table around four am Eastern time. That increases the chances of a nationwide strike when the Teamsters contract with UPS expires at the end of this month.
Karen, We're coming off an Independence Day that was hot and humid for much of the country. At the same time, we've reached another milestone in the global battle against climate change, and Bloomberg Zed Baxter has that story.
Global temperatures hit a record high on Monday. The average worldwide temperature was sixty three degrees fahrenheit, topping the past high set in August of twenty sixteen. The National Centers from Environmental Prediction say the new high underscores the extremity of the twenty twenty three summer and the northern hemisphere and brings into focus the slow pace of global progress on curbing emissions and their estimates at the current NOS
phenomenon is set to push global temperatures still higher. In San Francisco, I'm at Baxter Bloomberg daybreak.
All right, and thank you turning to the markets now, we're seeing movement in the oil market this morning. Brent crude is weaker after a Tuesday rally that came on the heels of output cuts by Russia and Saudi Arabia. Traders are following commentary from Saudi's energy minister today when he addresses the eighth Opek International Seminar in Vienna.
Time now to take a look at some of the other stories making news in New York and around the world with Bloomberg's Michael Barr.
Good morning, Michael, Good morning, Nathan.
Philadelphia police say as suspected gunman will be in court today after five people were killed and two children injured when he opened fire apparently at random, across several city blocks with an ar style rifle. Authority to say the gunman was wearing body armor and a ski mask. Philadelphia Mayor Jim Kenny I.
Was today at city at the Independence Hall where they wrote that Constitution and the Second Amnis was never intended to protect this.
There were also mass shootings in Baltimore and ford Worth, Texas ahead of the fourth of July holiday. Flights again were canceled or delayed yesterday in the US, as Americans begin to head home from the long weekend. United had its problems rain at Newark Airport costed flight delays last week. The flight schedule came unraveled due to weather at Newark. At least two more possible shark bites were reported off Long Island beaches the fourth of July. Incidents happened just
today after another two cases were reported. One victim was swimming in chest deep water when he was bitten on the right knee. Meanwhile, another swimmer was bitten on the hand off Fire Island pines. Both men in their forties were taken to the hospital with non life threatening injuries. The Israeli military says it has withdrawn its troops from
a militant stronghold in the occupied West Bank. The pullout this morning and Jeanine ended an intense two day operation that killed at least twelve Palestinians and drove thousands of people from their homes, and Israeli soldier was also killed. The head of the UN Nuclear Agency is in Japan this week as the country prepares to release waste water from the damaged Fukushima nuclear plant. The International Atomic Energy Agency is trying to reassure people that the water release
is safe. UN Nuclear Agency Chief Rafieo Grossi says dumping the treated water would have, in his words, negligible environmental impact.
The plan as it has been proposed and devised is in conformity with the agreed international standards.
Local reports say utility operator Tepco could start dumping wastewater as early as August. Cities across the nation held Fourth of July fireworks shows. In New York City, crowds gathered along the East River last night for the May Sea's fireworks show. Global News twenty four hours a day, powered by more than twenty seven hundred journalist nailysts in over one hundred twenty countries. I'm Michael Bard. This is Bloomberg, Nathan.
Okay, Michael, thanks time now for our Bloomberg sports up date.
Good morning, John Stanshawer, Good.
Morning, Nathan. It's been such a surprisingly strong first half of the season for the Baltimore Orioles, a rather disappointing one for the Yankees, and yet the Yanks win tonight and again tomorrow they'll have tied the Orioles for second place in the Al East. Yanks had to come from behind win Mouday Night came back for a holiday matinee at the stadium and won eight to four. A big
day for Glaver Torres. He always hits well versus Baltimore to run homer before the first out of the first, getting the later doubled and scored him.
With the game tie at three.
Torres, who's been at times criticized for lack of ustle, walked and scored all the way from the first on a single. Mets at Arizona used the long ball.
Won to to Marte swaying a high fly ball to left field Carol going back to the track, he turns and it's gone, a three run, go ahead home run first starling Barte about ten rows into the seats.
And left WCBS also home runs for Brandon Nemo Francisco Alvarez. MaTx beat the Diamondbacks eight to five. Max Scherzers struck out nine and proved to.
Eight and two.
Rough day for the La Angels, they lost to San Diego. Shoe Otani gave up back to back home runs, had to leave the game of the blister, and Mike Trout put on the injured list with a broken hand. He's gonna miss at least a month, maybe two. The Padres released forty free year old Slaver Nelson Cruz four hundred and sixty four career home runs. Only four players ever
have hit more after the age of twenty nine. Rain at Wimbledon's the only matches completed where they're on the two courts that have a roof easily wins for the top seed, Carlos Alcarez and thirty six year old Andy Murray. The defending champe Lana Rabakaa, needed three sets but got by American Shelby Rogers. Novak Djokovic plays today, so does the women's top seed us Yonte John Stanhelli.
Boolberg sports.
From coast to coast, from New York to San Francisco, Boston to Washington, d nationwide on Syrias Exam, the Bloomberg Business app and Bloomberg dot Com.
This is Bloomberg Daybreak.
We had a Tai Shehen Services Purchasing Managers index for the month of May that came in quite a bit weaker than expected. And it comes as Treasury Secretary Janet Yellen heads to China to try to find common economic ground with China.
Let's get more on all this now. In a roundtable discussion.
We are joined by Bloomberg opinion columnist Matthew Brooker and Rebecca Chung Wilkins, Bloomberg's Asia Government and Politics correspondent.
Good to speak with both of you. Let's start with you, Matthew.
With these signs of weakness in the Chinese economy, what's the potential impact for the global economic outlook?
Well, I'd say not good. I mean, I think the restrictions that China has put these these these export of metals that they use in semiconductors are not I mean, they're not disastrous. There are there are alternatives that can be developed, but it's a it's a it's another sign of the of the amount of tension that's in the relationship at the moment.
I think, yeah, we are seeing that tension given the export controls that you mentioned, and it seems like continuing signs as well from the Biden administration as almost a step by step move to limit China's access to technology. Rebecca, let's bring you in on this here, because we're waiting for Treasury Secretary Yellen to head to China to try to reset the Chinese relationship to some extent.
But when we have these moves happening. Is it possible to have a reset?
Yeah, it's certainly going to be a challenge for Yell.
And obviously it's positive that the trip is going ahead, and this sort of ability to you know, disagree together and still have these open lines of communications at the top level is somewhat at least a somewhat present somewhat of a thaw at least they're speaking at the same time. Obviously, we see now both China showing this new willingness to push back against what it sees as containment efforts in
those ways that Matthew points to. But the US also now reportedly considering curbing Chinese companies access to cloud computing services for anything that pertains to AI chips, so again closing that loophole.
So, you know, with Beijing and the US both kind of.
Ratcheting up these policies, it's hard to see any big sort of significant debt on or agreement coming out of Yellen's visit.
Is there a dot to connect here, Matthew with the Biden administration's moves to limit access by China to technology and now the economic impact here.
I mean, I feel there's a kind of a tip for tap game.
Going on here.
I mean, if you look at the tone of the discourse between China and the US and the EU as well, there's a lot of talks, I think from the Chinese side about how cooperation is the only way forward and that decoupling isn't going to work. We've got an independent world, and at the same time, you know, things like these export controls. I feel it looks to me like, you know, they're kind of trying to say, send the signals what
we should be doing is cooperating. But you know, if you're going to if you're going to restrict our access to things that damage our economy, then we have the same tools available to us.
What is the potential economic impact to China for putting on these export controls, Rebecca, Is the Chinese economy insulated enough that it can withstand these kinds of export controls without doing damage to its economy even further Well.
There are two sort of risks.
The first is the media, and the risk is if China does cut off access to these two different metals, that it will just simply accelerate other country's efforts to find alternatives.
And we have seen that happen before when China kind of ramped.
Up its restriction exports of rare earth previously, and simply what happened was it diminished its own market share in the world.
Now, that takes some time.
To happen, you know, over a decade or more, to fully move away from Chinese supplies of rare earths and minerals and so on. The other sort of consequence, potentially economically is if the US then does respond in Kine and we see a ratting up of this tip for tats Mat that Matthew points to, that that longer term, you know, those restrictions to developing its strategic technology and so on, that does also hobble economic recovery more broadly.
So those are these two elements here.
This is Bloomberg Daybreak Today, your morning brief on the story's making news from Wall Street to Washington and beyond.
Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify and anywhere else you get your podcasts.
You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three to zero in New York, Bloomberg ninety nine to one in Washington, Bloomberg one oh sixty one in Boston, and Bloomberg ninety sixty in San Francisco.
Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.
Listen coast to coast on the Bloomberg Business app, serious XM Channel one nineteen, the iHeartRadio app, and on Bloomberg dot Com.
I'm Nathan Hager and I'm Karen Moscow.
Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak