Good morning.
I'm Nathan Hager and I'm Garen Moscow. Here are the stories we're following today.
We begin with a policy in China that has broad implications for the global tech sector. Beijing plans to expand its ban on Apple iPhone use in sensitive government departments and state owned companies. Sources say several agencies are already instructing staff not to bring iPhones to work. The restrictions may broad into more firms and organizations. Bloomberg Chief Tech correspondent Mark German says, this may just be a starting point for the Chinese government.
Is there something that's going to happen next in terms of the Chinese consumer being able to buy the Apple devices? Are there going to be limits? There is the Chinese government going to begin clamping down on Apple's ability to sell, offer services, offer retail stores, offer Apple care and support. So there clearly is a potential domino effect that I think investors are more afraid of, rather than just lost sales to Chinese government workers.
And Bloomberg's Mark German says the blockade coincides with China's effort to reduce its reliance on American software. Apple is popular in China. It gets about a fifth of its revenue there. Checking Apple shares in the pre market, they are down two point six percent.
Well elsewhere in tank This morning, Nathan Google is making a move aimed at protecting elections from artificial intelligence. In Bloomberg's Aid Baxter has the story.
Google is saying it will soon require all election advertisers disclosed when their messages have been altered or created by AI tools. The policy update, which applies starting mid November, requires election advertisers across Google's platforms to alert viewers when their ads contain images, video, or audio from generative AI. They will have to use prominent language like this audio as computer generated or this image does not depict real events.
Google says it will improve transparency. In San Francisco, I'm at Baxter Bloomberg Radio.
Okay, ed, thank you. President Biden's headed to the G twenty summit in India later this afternoon. He's aiming to seize on the absence of two key adversaries. Russian President Vladimir Putin and Chinese President Shi Jinping both opted to skip this year's gathering. President Biden will look to improve ties with countries like Brazil, South Africa and India. They've sought closer ties with China and declined to take sides after Russia's invasion of Ukraine.
Well back here at home, Nathan, Texas is teetering on the edge of blackout. It's the state's power grade operator ERKAD issued its first emergency declaration in over two years in response to shrinking power supplies. Spot power prices surged to more than five thousand dollars a megawatt hour, quadruple the cost of the average supply Urkatt had to draw on reserves, and officials are urging customers to take conservation efforts.
Texas is also warning medically fragile residents who need oxygen and similar aids to have backup plans in place.
In the nation's capital, Karen, the Justice Department plans to file new charges against President Biden's son, Hunter Bloomberg's Nancy Lyons has that story.
An indictment of Hunter Biden is expected by the end of the month. That's according to documents filed in a Delaware court by Special counsel David Weiss. The son of President Biden had agreed in principle to plead guilty to federal tax charges and enter a pre trial diversion agreement related to a gun charge, but that plea deal collapse back in July. Prosecutors have not specified what charges they intend to file against the President's son, Nancy lyons Bloomberg Radio.
Right, Nancy, thanks for a strike warning from the head of the United Auto Workers. Bloombergy. John Tucker joins us with the latest. Good Morning, John Karen.
President Sean fains as the union plans to go on strike against any Detroit automaker that hasn't reached a new agreement by the time contracts expire next week. The contracts with General Motors, Delantis, and Ford will all expire just before midnight September fourteenth. All in, the union's proposals would cost each of the big three automakers around eighty billion dollars. The union will meet today with GM Forward made an offer that includes nine percent wage increases plus payments. Those
talks are farthest along. An agreement with one automaker likely would set the template for the others. Live in New York. I'm John Tucker, Bloomberg Radio.
All right, John, Thanks, you got more company news this morning. Sources tell Bloomberg the online grocery delivery startup Instacart is preparing to set a price range for its initial public offering. Bloomberg's Charlie Pellett has that the.
Sources say the company is considering pricing it's listing September nineteenth, and then start trading the following day. They say the company's plans are fluid and the timeline could still change depending on market conditions. Instacart's listing could further energize an IPO market that has been warming and fits and starts.
Semiconductor designer ARM Holding set a price range for its IPO, which is expected to start trading in the biggest listing of the year as early as next week in New York. Charlie Pellett Bloomberg Radio.
All right, Charlie, thanks to the Broader Economy Now. The ism US Services Index rose to a six month high yesterday, but stocks declined amid speculation the strong data will keep rates higher for longer. Bloomberg Macros trateg just Mark Hudmore says evidence from yesterday's Major Book suggests the Fed's rate hike path remains uncertain.
I thought the most important dedies was actually the Beige Book which says backward looking, there's been some good stuff from the tourism and leisure sector, but the rest of the report was presenting warning signs about the consumer. I still believe that US softness is coming in the fourth quarter, and I think we're going to have a recession still starting around the end of the fourth quarter. Maybe a dirty next year, but I still go for the end of this year.
And it's time now for a look at some of the other stories making news around the world. For that, we're joined by Bloomberg. See Me, Morris, Save Me, Good morning.
Good morning, Karen. The Senate is going to start moving a package of government funding bills next week, as Congress is racing to avoid a shutdown at the end of this month. Senate Minority Leader Mitch McConnell says he appreciates the support that he's seen from President Biden.
He is supporting the uffard and I intend to continue to support it.
I hope the majority of my colleagues will field the same way.
Now, the President and congressional leaders are focused on a passage of a stop gap funding measure to buy a little time while lawmakers iron out a full budget. Time is running short though the House is scheduled to meet for only eleven days before the government's fiscal year ends on September thirtieth. It was the first televised hearing in
former President Trump's election interference case in Georgia. Fulton County Judge Scott McAfee laid out how these hearings involving the nineteen co defendants are going to move forward.
The plan would be to try to resolve as many of these issues as we can this week and to begin entering scheduling orders for the remaining defendants by either the end of this week or the early next week.
Now.
Judge McAfee denied a motion for one of Trump's co defendants, lawyer Kenneth Cheesebro, to sever his case. He said he would later decide on whether lawyer Sidney Powell would severhears. Prosecutors expect a joint trial to take four months. Former President Trump, meanwhile, says he's willing to take the witness stand in his own defense if his criminal cases do
go to trial. He told a radio interview that he would absolutely look forward to testifying, but he also said he believes the cases are going.
To be dismissed.
The former president has pleaded not guilty in four cases against him in New York, Georgia, Florida, and Washington, d C. The oppressive heat still impacting millions of Americans, and schools this week in New England to scramble to get air conditioning in classrooms. In Philadelphia, officials announcing schools that don't have air conditioning are going to be dismissed early for
the rest of this week. Englewood Health EMS medical director doctor Barbara Streedman says children are among the most at risk in the heat. Children have a different physiology than adults, and the very young and the very old don't tolerate heat as well, especially when the humidity is higher. More than fifty million people have been under heat alerts all week in the US, from Minnesota to Texas to Massachusetts.
Global News twenty four hours a day, powered by more than twenty seven hundred journalists and analysts in more than one hundred twenty countries. I'm Amy Morris. This is Bloomberg.
Karen, all right, thank you. Now we get a look at sports and they Brian John Stashauer. John, good morning, Karen.
It's opening night of the NFL. Not surprising. The Kansas City Chiefs are in the spotlight of the defending Super Bowl champions. They've won seven straight AFC West titles. They've played the NFC Championship Game each of the last five years. It is surprising for the Detroit Lions to be featured, usually an NFL doormat, but they finished last season winning eight of their last ten games. Chiefs may not have their start tight end Travis Kelsey. He's questionable with a
knee injury. The forty nine ers have gotten their star pass rusher Nick Bosa back in camp. He ended his forty four day holdout agreed to a massive contract with the Niners five years, one hundred and seventy million. Posta becomes the highest paid defensive player in NFL history. At the US Open Arena, Sablanki another easy victory. She has yet to lose a set. She's advanced of the semifinals. She's been in the semis of all four Grand Slam
this year. Coco Goff has her semifinal match in New York today and the men's semis will be played tomorrow. Danil Medvedev advanced with a straight set win over fellow Russian Andre rub Levin. Last night, Carlos Alcarez, the top seed independent champ, also won in straight sets. Baseball Red Sox lost again at Tampa Bay, three to one. They've lost fifteen of sixteen. At Tropiccanafield, the Nationals rally scored
nineteen ety to beat the Mets three to two. The Orioles fifth straight win was ten to three over the Angels. The Giants beaten by the Cubs eight to two. Rare win for the Eights five to two over Toronto. John stashaware of Bloomberg Sports.
From coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on siriusxam, the Bloomberg Business app in Bloomberg dot com. This is Bloomberg Daybreak.
Good morning.
I'm Nathan Hagar. Apple's business in China is getting a lot more complicated. We've reported this week that the Chinese government is barring its workers from using their iPhones while they're on the job. Now, sources tell Bloomberg News that band could be extended to state owned businesses and other government controlled enterprises. It's a move that could erode Apple's position in its biggest market outside the US and for more on this, we're joined by Alex Webb, who covers
the tech sector for US here on Bloomberg Radio. Alex, good morning. Why this push now to crack down on iPhones specifically in China. I mean, it wasn't that long ago that the CEO of Apple, Tim Cook, was praising his company's relationship with Beijing.
Yeah, and of course you know Apple employs millions of people both directly and indirectly, well Indre Lismos through Fox Gone another contract manufacturers in that part of the world, So there is a real kind of symbiotic relationship between the country and the company. But it sort of looks like we don't entirely know the rationale for this. It is based on sources reporting. It looks like there could be two reasons for it versus the sort of tit
for tap. We've seen obviously a crackdown on the supply of some important components into the Chinese market. We've also seen the US ban the use of TikTok in government agencies. This is on a state level at the moment, but it's been the case in many states where TikTok is
not allowed to operate on government networks. But at the same time you also want to well, maybe they can justify it through security reasons that actually in state controlled or state agencies, we have started to see a pushback on the role of for instance, consultants, and do they have an outsized role because of their proximity to foreign groupings. There are many reasons why this might be the case. That doesn't necessarily mean that it's significant for Apple itself.
And it is interesting to think about it potentially as a national security rationale for China when we've heard US government officials use that same rationale to try to limit China's access to cutting edge technology, how is China doing when it comes to its own development of some of that higher end technology despite US sanctions.
So we did see some really interesting news in the past week or so that Huawei, which is the biggest Chinese hardware maker technology hardware maker, has released a new phone called the Mate sixty Pro, which includes a chip
that can operate very close to the cutting edge. It's built on the advanced seven nanometer, an advanced nanometer processor, which, it seems, according to Bloomberg tear Down, has been manufactured by China's domestic chip making giant Semiconductor Manufacturing International Corp. Which is their equivalent of TSMC, is not quite as big, but that's their effort to really on shore and more of that. CORTEC themselves and many people didn't think that
China have these capabilities. The fact that it seems they do is a turn up for the books. Now it's a caveat to this. We don't know where they're able to do it at scale, where they can do it with the sort of it's getting to make the economics work in the same way that TSMC can, but it shows they're a bit closer to the cutting edge than many had anticipated.
Well, if China does continue to get closer to the cutting edge and keep up this crackdown on Apple devices, what could it mean for Apple's position in the Chinese market.
Well, I mean, it clearly doesn't help, but you just put it in a bit of context. Right, So Apple had has trailing twelve month revenue in the order of seventy three billion dollars in Greater China, which also includes Taiwan. But when we've looked at what has happened with say TikTok in the US and the crackdown and using that in government agencies doesn't really seem to have had any
meaningful impact on TikTok's trajectories. So yes, these government controlled companies, the likes of Petro China, they do employ millions of people. Let's wait and see when we get to earn his schools to see if that actually has any meaningful impact. If you judge it by the TikTok experience, the implication would be it may not be significant.
Our last minute, we're waiting and seeing for Apple's next product launch as well. I think it's coming up next week?
Right?
Does that put more pressure on Apple to deliver when it comes to what's coming next?
Look, there's always pressure on Apple in terms of what comes next. The thing they have managed to do we are going to see you, So they are going to We're going to see new iPhones lightly next week and
probably in new Apple Watch as well. But the big story of Apple is how they have managed to diversify away from the hardware into services, which not only is higher margin, but it also ties people more tightly to their hardware, and that is why people still keep buying these things even without major upgrades.
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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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