Trump Maintains Naval Blockade; Big Tech Earnings Wrap with Apple

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Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.

Karen, we begin with the latest on the standoff between the US and Iran. President Trump is promising not to let up on the naval blockade of Iran's ports to try to pressure Tehran back to the negotiating table. The President says Iran's economy is a disaster and the impact on US prices at the pump won't last.

The country's do really well, and that's despite a military operation.

I don't call it a work.

Could you rather have a military operation?

We're really.

I mean, Iran is dying to make a deal. I can only tell you that.

I was President Trump speaking to reporters in the Oval Office. But Iran is holding firm. As we hear from Bloomberg's Patrick Sykes in Istanbul.

The supreme leader in Iran, who we still haven't seen person or even heard his voice, is still in effective, hiding and thought to be wounded. He said very clearly that Iran wouldn't be compromising on its nuclear technology or its missile program. And then overnight as well Iran has said that incepted some drones overnight, So it still feels like it's very tense, even above Tehran itself.

Bill brigs Patrick Sykes reports Iranian officials are warning the blockade will keep driving up oil prices. Axios is reporting the President Trump got a briefing from US Central Command and the head of the Joint Chiefs of Staff about further military options against Iran.

Nathan Defense Secretary Pete Haygesith and other Pentagon officials wrapped up testimony on Capitol Hill, this time answering questions before the Senate Armed Services Committee. Haigesith defended the US position about the war with Iran to Democrat Kirsten Gillibrand up New York.

So the question I would ask to you and to others is what is the cost of a nuclear armed Iran? What is the cost to the American people's The world's most dangerous regime has a weapon.

But the truth is they don't want war coming to this shore, and when you do decapitation operation, the likelihood is going to be exchanged. In the United States, There's no evidence that we are safer because of this war. We did not have any evidence that Iran intended to eminently attack this country in any way, shape or form.

On Wednesday, Hey, Seth God, you'rerilled buy a House panel who questioned the US justifications for the war in Iran.

We're caring.

The longest partial government shut down ever is over. President Trump has signed the bill to fund most of the Department of Homeland Security except for immigration enforcement. Republicans planned to pass those funds separately in a budget bill that won't require Democratic votes. Here's House Speaker Mike Johnson, this.

Will relieve pressure from the Department of Homeland Security Sectuary Mullen.

We greatly relieve the President will, the administration will.

We were not going to have lines at TSA.

Everybody who get their paychecks.

Now we'll get moving forward.

House Speaker Mike Johnson says Republicans overcame their differences on the bill after the White House warned it had run out of funds to pay TSA workers. This month, Democrats had demanded restrictions on ice enforcement after the killings of two US citizens in Minnesota, but Republicans rejected their proposals. Democrats say the issue will come back to hunt Republicans in the midterms.

Let's turn to the markets now, Nathan, where the record run on Wall Street continues. The S and P five hundred and Nasdaq enter today's session at all time highs. The SNP rows ten percent in April, it's best month since twenty twenty. Matt Raw is senior portfolio manager at Men Group.

I think there's an assumption that at some point in the relatively near term, we're going to get a resolution to the straits being reopened, the normalization of crude. So for now, the market is saying that the AI benefit and the potential upcrash associated with AI has a higher weight than the potential near term consumer spending drag.

Matt Row of Man Group. The S and P five hundred closed above seventy two hundred for the first time ever yesterday.

Big company news to tell you Karen. Share of Apple are up more than two and a half percent in early trading. The iphonemaker delivered a surprisingly strong revenue forecast for the third quarter. We get more from Bloomberg Tech host ed Ludlow Change.

In Fortunes for the stock change in sentiment on how Apple's doing. The guide for the current period the June quarter is that revenue will grow fourteen percent to seventeen percent year on year. There is strong demand. There was one notable moment incoming. CEO John Turnis did speak briefly on the call. He said there's an exciting product roadmap,

The quarter gone.

This is Ed Ludlow for Bloomberg News in San Francisco.

All right, Ed, thank you well. Shares of Roadblocks, they are plunging down almost twenty twenty three percent. The video game company reported first quarter users that fell short of analyst estimates, and the drop comes after Roblocks implemented a safety features restricting how kids, who make up a majority of his audience can use the platform. Time now for look at some of the other stories making news in New York and around the world, and for that we're joined by Bloomberg's Michael Barr.

Michael, good morning, Good morning, Karen King, Charles and Queen Camilla have wrapped up their visit to the US. During his visit, King Charles gave a speech before Congress, attended a state dinner, and paid a visit to New York City. On their last day, the royal couple paid their respects at the tomb of the Unknown Soldier at Arlington National Cemetery, and they celebrated America's two hundred and fiftieth birthday at

We're incredibly stressed. The entire health system was already vulnerable, was already fairly weak prior to March second, when this round of conflict erupted. Since that time, one hundred and forty seven hits on medical facilities.

Joseph Bellevue with med Global. A suicide note purportedly written by the convicted sex offender Jeffrey Epstein is locked inside the case file of his former cellmate, convicted murderer Nicholas Tartaglioni. He told The New York Times it was written on paper from a yellow legal pad and tucked inside a book. Tartaglioni says he found the purported suicide note. In July of twenty nineteen, a school board meeting got so heated in Philadelphia that the board members shifted to a virtual format.

I'm horrified.

I'm like, how many times can these students and parents come and say we don't want to save our school.

District leaders say it's necessary because they have to address a three hundred billion dollar deficit. Global News twenty four hours a day and whenever you want it with Bloomberg News. Now Michael barrm this is Bloomberg Karrot.

All right, Michael Barr, thank you, Thanks Michael. Time now for our Bloomberg Sports update, and for that we bring in John stash Hour.

Thanks Darren An.

NBA playoff blowout that Nicks in Atlanta led forty to fifteen after the first quarter in eighty three to thirty six at halftime. The final was one forty to eighty nine. They win the series four to two. They'll find out tomorrow who they'll play the next round. The Celtics and Sixers are going to a game seven in Boston after

Both teams move on. That's your Bloomberg Sports update.

Stay with us more from Bloomberg Daybreak coming up after this.

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This is Bloomberg Daybreak. Good morning, I'm Nathan Hager.

Easily the biggest week for earnings this quarter is closing out with surprisingly strong results from Apple. The iphonemaker delivered a revenue forecast blowing past Wall Street estimates. So it did come with some warnings that memory chip costs you're going to keep going up and a shortage of Mac computers could last for several more months. Here with us for some morning after analysis is Dan Ives, the global

Tell me more, good morning.

Good morning. Look, I mean me and you.

You know, if you think about over the last year, there have been ups and downs, but we're actually really more downs and ups in terms of what we've seen the last few years.

This was as robust of a quarter and god as we've seen a few years.

I mean, this is almost a mini supercycle that's playing out. I think there's a stock that's going to have huge upside here and it's just as Cook's handing the baton to turnus.

Really a golden night, not just for the next but for Apple.

Okay, I did see your note as well, putting a focus in particular on the results out of China. Is it going to be particularly important for Apple to keep growing the market in China to keep its momentum going.

Look, Nathan, that's the hearts and lungs. And if you think about the last year, that's been a headwind. Now it's a talent.

Now, look, some of that is product cycle, some of it's also Cook being part politician navigating what we've seen China the last year. Now it's a talent and that's the hearts and lungs of Apple strategy. Twenty percent of iPhones come out of China, a huge sort of flex the muscles moment for Cooper tina.

I mentioned the memory chip costs.

This is something that's been coming up quite a bit of this particular tech earning cycle. The chip costs going up. Is that going to be a crimp on Apple's margins? Are consumer is going to have to start thinking about prices going up for their next round of iPhones.

It's really the latter.

I think you'll have one hundred and maybe one hundred and fifty dollars price increases. Book Some of that they'll absorb through the supply chain, but ultimately this is something that you know they're probably they're going to have.

To hike prices a bit.

Nothing significant, it's just what's happened in memory. It's a memory supercycle. And to get on the line for those chips, there's shortages.

We've seen across the board. Given AI revolution.

Do consumers stomach that those kinds of price increases?

Do you think?

Look?

I think when I think about called three hundred million and have an upgrade to iPhone, there will be a lot of in send thems out there from the carriers. Carriers will also probably you know, ultimately absorb some of that. It's maybe a one percent churn from that number, maybe one and a half percent, but that's not something too significant. Look, when it comes to pricing, navigating the supply chain when to raise prices, the Hall of Fame or Cook.

News when to do it? And I think that's what you'll see.

So how does this set things up for John Turnas when he does take the baton and thinking about the Worldwide Developers Conference coming up as well?

What about the AI story?

Dan?

Well, first off, if you go.

Back, I mean there's a surprise obviously when Cook announce, but now knowing these numbers, you see why he did it because he's he's handled the toon a great time, going to them with a mini supercycle.

But the reality is turnus, it's going to be about AI that will define Apple I.

Think in WWDC is where they ultimately released the first part of that strategy in terms of serie AI with Jem and I, we think ultimately is a subscription service that's going to be important. I think that's where seventy five to one hundred dollars per share as the consumer AI revolution go should get Fatina.

In our last minute, Dan, what's your overall take on how this week of earnings went? It seemed like it was kind of hit or miss when it comes to how these hyperscalers are monetizing AI.

Look, this is.

About as bullsh underlying fundamentals, guy, that you could have seen from big tech, specifically in terms of the cloud players, everything you're seeing from Microsoft, Google, Amazon, and even Meta from a cap Bax perspective.

Look, I think the bear thesis essentially got thrown out the window this week. I think tech stocks are up another ten to fifteen percent higher and there is no better validation you could have seen from big tech.

Fool's going to the weekend pretty happy.

In our last just ten seconds here you talk about what time it is in the AI party.

What time do you think it is now?

Well, it's about eleven thirty pm. Maybe the cops came try to break up the.

Party over the last month, they left the music's back on.

This is Bloomberg day Break, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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