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Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, Yeah, futures are following this morning after President Donald Trump unleashed his final round of tariff announcements on countries around the world hours before his August first deadline. The President slapped thirty five percent tariffs on Canadian goods not covered under the US Mexico Canada trade agreement. Switzerland's products were hit with a thirty nine percent rate, and Taiwan's exports are facing a twenty percent duty, though that country
says it expects to keep negotiating. We get more from Bloomberg News Global Trade editor Brendan Murray.
The bottom line here is that the average US tariff rate is going from about two and a half percent before Trump was sworn in in January to around fifteen percent according to Bloomberg Economics. And that's, in any economist book, a difficult thing for an economy to absorb. So I think we'll see some more talks going on in the weeks. In the days and weeks ahead.
Bloomberg's Brenton Murray says most countries are facing a baseline ten percent rate, while roughly forty nations are jumping to fifteen percent. The new tariffs won't take effect until August seventh, to give US Customs and Border Protection time to prepare. Former US trade negotiator Steven Olsen says that could add to market uncertainty.
We do have a week to go, and this is a man who thrives on chaos and unpredictability and sometimes seems to be running his trade policy like a reality TV show. So until these tariffs actually go into effect on August seventh, let's sit back and see what happens.
Former trade negotiator Steven Olsen says President Trump has embraced tariffs for decades, so these moves should not come as a surprise.
Well, Nathan.
President Trump is also escalating his campaign to pressure pharmaceutical companies to lower drug prices, and Bloomberg's John Tucker joins us with the very latest John, good morning.
And good morning Karen. In letters send to Eli, Lilly, Novo, Nordis, Pfizer, and others, Trump insisted the companies immediately lower what they charge Medicaid for existing drugs. He also asked them to guarantee that future medicines be launched and remain at prices on par with what they cost overseas. He gave the world's seventeen largest drug makers sixty days to comply. If they don't, he writes, his administration will quote deploy every
tool in our arsenal to protect American families. The pharmaceutical industry has long protested the idea of globally linked drug prices as a threat to years of US dominance in biomedical research. They've urged the administration instead to turn its attention to the middle men in the supply chain. Right now, in European trading, shares of Novo nordis down another four point eight percent. That company loses its spot among Europe's
ten most valuable companies. Peiser pre market is down six tenths of a percentw Yor Income John Tucker Bloomberg.
Okay, John, thank you. Earnings are also very much in focus this morning. We're watching shares of Amazon. They are down more than eight percent pre market. The online retail giants projecting weaker than expected operating income and is trailing the sales growth of its cloud rivals. That has investors questioning whether Amazon's huge investments and artificial intelligence are paying off. Anarag Rana is a senior tech analyst at Bloomberg Intelligence.
Do you see you know, they met expectations on Aw's growth of seventeen percent in constant currency. But you know, this is where we are saying that this is probably not good enough because Microsoft beat by a big number. Google beat by a big number, and the big question is going to be, you know, why didn't Amazon beat by a big number?
Bloomberg Intelligence is on arag Rana says Amazon spenter record thirty one point four billion dollars on capital expenditures in the quarter. That was up about ninety percent from the same period a year earlier.
On the flip side, Nathan shares of Apple are at more than one and a half percent. The iPhone maker posted as fast as corely revenue growth in more than three years. Strong iPhone sales and a rebound in Shana helped beat estimates despite a projected tariff hit.
Mark German covers Apple for Bloomberg.
There are people who still have iPhones that are several years old, four to six even older years of iPhone right, There's people on Android, there's people new to the smartphone market, and clearly the impact of tariffs didn't have a negative.
Impact on Apple.
It had a positive impact on Apple. That's because a lot of people were anticipating major price hikes to the iPhone and they flooded Apple retail stores.
Bloomer's Mark German says Apple predicted that fourth quarter revenue would be up by a percentage in the mid to high single digits. CEO Tim Cook also says the company is helping investment in artificial intelligence.
Well, this morning, Karen, the earnings focus turns from big tech to big oil. We'll hear from both ex On Mobile and Chevron. We get a preview from Bloomberg's Tom Busby.
Investors at Exon Mobile eager to hear about the company's progress and developing a massive oil field in Guyana, also the latest shale production plans in the Permian Basin. Bloomberg consensus calls for revenue of eighty point three nine billion dollars and adjusted earnings per share of a dollar fifty six. Chevron investors want to hear about the company's long delayed but now completed acquisition of Hess and how that'll impact
its share buyback plans. Bloomberg consensus calls for revenue of forty six point seventy five billion on adjusted earnings per share of a dollar seventy one. Tom buzzby Bloomberg.
Radio, All right, Tom, Thanks.
A busy week on the economic front concludes this morning with the July jobs report. Economists are forecasting a gain of one hundred and four thousand jobs at an unemployment rate of four point two percent. Begin more with Bloomberg's Michael McKee.
Job growth will slow and unemployment will have ticked up in July, economists forecasts. But it's not the end of the world or even the economic expansion. Once again, it's tariffs. Companies have been suspending guidance and announcing price increases to offset tariffs, but they have not yet resorted to cutting jobs.
It won't matter much to the FAD if unemployment does rise by a tenth or so, but a quick jump to say four and a half percent, would worry policymakers, who may take it as a signal policy is too tight. There will be time to consider the implications no matter what we get. The next FED meeting is not until September seventeenth. Michael McKee, Bloomberg radio.
All right, Mike, thanks and speaking of the Fed, President Trump is keeping up his pressure campaign on j. Powell to lower rates, once again, taking to social media to criticize the FED chair. Lyle Brainerd is a former vice chair of the Federal Reserve.
What has been surprising to me is to hear the President talk about lowering rates as though it is the Federal Reserves responsibility to lower rates for US Treasury debt management. And that, of course, is exactly how central banks go wrong in emerging markets.
Former FED Vice chair Lyle brainer also says she thinks the President's higher tariff rates will hamper economic growth.
And finally, Nathan and of an Era, Ray Dalio has sold his last remaining stake in Bridgewater Associates and also left the hedge Funds board. Dalio first announced his succession plan more than a decade ago, but he did not fully hand over the rains until twenty twenty two, when he transferred his voting rights to its board of directors and stepped down as one of its three co chief investment officers. He stayed on the board at the time,
and Dalio founded the firm in nineteen seventy five. Time now for a 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 and Michael Barr. Michael, good Morning, Good morning, Karen.
Storms have been lashing the East Coast from Virginia to Connecticut, flooding roadways in New York. Vehicles were stranded in pockets of high water and water pouring over a train in Manhattan's Grand Central Terminal. Commuter rail lines into suburban Long Island and New Jersey were suspended in places, flash flood warnings and effect for parts of New York City, New Jersey, and Philadelphia. States of emergency have been declared in New
Jersey and New York City. With more on the weather, here's Bloomberg meete religius Craig Allen.
The delus from last evening. That's gone. There are still some showers around. They'll be moving out of the area. All flood alerts have been canceled. I mean, it must have been frightening for some of those caught in the flooding range that caused the flash flooding on some of the major interstates around the region.
Bloomberg Media relogist Craig Allen. The storms delayed flights from Boston to Washington, d C. The NYPD and politicians gathered at the funeral Thursday for the officer killed in the Midtown Manhattan mass shooting this week. Ditital Islam was off duty working security when he was fatally shot by a gunman at three forty five Park Avenue. Islam is one of three funerals these past few days. Also yesterday, funeral
services took place for Blackstone executive Wesley Lapatner. Her fourteen year old daughter gave the eulogy.
My mom was like my Rocky.
I would talk to her and I can't or canny news, nothing else would make it better.
Funeral services were held for Roudent employee Julia Hyman on Wednesday. Israel's military intelligence agency is undergoing changes. The service is making profound revisions, including reviving an Arabic language recruitment program for high school students and training all troops in Arabic
and Islam. It comes after the October seventh, twenty twenty three attack by hamas global news twenty four hours a day and whenever you want it with the Bloomberg News Now Michael Barr and this is Bloomberg.
Karen all right, Michael Barr, thank you.
Time now for the Bloombergy sports Okay, brought to you by Flushing Bank, and here's John stash Hour.
John, good morning, Good morning, careen.
It was let's make a deal day throughout baseball and perhaps no team busier just before the trade deadline than the Yankees. They had already added three players. They added four more. There are three relief pitchers. David Bednar was a two time All Star in Pittsburgh. Camillo de Val had over one hundred career saves, while in San Francisco, Jake Bird comes from Colorado. And then in the eighth inning of the Yanks seven to four went over Tampa Bay.
They acquired a player who was in the opposing dugout. Jose Caballero has been Baseball's best base dealer of the past two seasons. Aaron Boom impressed with what the front office, SA chief.
Love what they were able to do.
I think we're a better club today than yesterday, and certainly today than we were last week. And now we know what we were going with and what we got, you know.
Onward, they win over the Rays the third in a row. They jumped to a seven nothing lead. It was seven to four when there was a rain delay of nearly three hours and then no scoring after that. Yanks down three and a half behind Toronto, playing tonight in Miami and the Metz Hosta Giants. Mets have a new center fielder, Cedric Mullin spent eight seasons in Baltimore. A few years ago,
had thirty home runs and stolen bases. Carlos Correa, going from Minnesota back to Houston, where he spent seven years, helped the Astros win a World Series. The Red Sox landed pitcher Dustin May from the Dodgers. They beaten May in a game a few days ago at Benway. Taylor Rogers, whose twin brother Tyler was just acquired by the Mets, was traded for the second day in a row. He's touring the NL Central, went from Cincinnati to Pittsburgh and
now the Cubs. A year ago, the Knicks sent a boatload of draft picks to the Nets from Michel Bridges. He averaged eighteen points a game, led the NBA AD minutes played in. Bridges now has a new contract with the Knicks four years, one hundred and fifty million, he has never missed a game in his seven year career.
John Staneshawer Bloomberg Sports.
Coast to Coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business Altum. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager here. It is August first, and as promised, President Donald Trump has announced a slew of new terror frights on countries around the world, after announcing deals with a handful of them in recent weeks. But former US trade negotiator Steven Olsen says he wouldn't call these deals.
What we've got here are a series of extremely vague framework agreements which will require additional negotiations before they're actually translated into anything even approximating well, we could legitimately refer to a trade agreement.
Steven Olsen is now a senior fellow at the Institute of Southeast Asian Studies and for more. We're joined this morning by Bloomberg News Senior editor Bill Ferries. So, Bill, what do we have this morning?
Good morning, Good morning. So yeah, we're here.
It's been a long bumpy road since those April second Liberation Day tariffs were first announced, We've seen a lot of pauses and fits and starts since then. This does seem to be a kind of the moment.
Now.
President Trump, as you said, unleashed a whole slew of tariffs, some some big surprises in there, some countries getting more than they bargained for, and I think the baseline rate of ten percent kind of a pleasant surprise to other countries who maybe had been expecting that to increase. So the market's kind of still digesting this, and it's you know, there's still countries, big, big outliers there like China and
India still looking to make deals. So it does seem like the deadline has been reached, but there's still going to be a lot going on in the days and weeks in head.
Well, let's get into that. What could we see over the next few days here, particularly when we're seeing you know, some countries like Switzerland and Canada getting hit with much higher rates than that ten percent baseline you just mentioned.
Yeah, I think those are two of the big surprises, particularly Switzerland getting a thirty nine percent tariff when you consider that many of its neighbors who are EU nations got about a fifteen percent. Switzerland, of course, exports huge amount of pharmaceuticals to the US, so that's going to have an immediate hit on drug prices once that comes
into effect August seventh. And out in Asia, you've seen countries or governments like Taiwan getting twenty percent, while two of its biggest rivals, Japan and South Korea, were at fifteen percent. So the effect of these tariffs as it plays out in the days and weeks ahead, is going to be shifting kind of the competitive landscape between countries that may you know, have typically competed in similar products but have different rates when it comes to exporting to the US.
To your point, I guess we've heard from Taiwan as well that they consider that twenty percent rate that you just mentioned temporary and that more negotiations could be to come. Is that what we should expect here, that even more of these countries could keep negotiating even after this August first deadline that's coming gone.
Yeah, I mean, so the August first deadline that will those tariffs are sposed to kick in August seventh. In theory, I think there's going to be time there to negotiate But last, yes, I think nations, if they've learned anything about President Trump, it's that he's a deal maker. He likes to make deals. They the White House may feel
like it has made those deals. But I think if a if a country comes in, if India or a Taiwan comes in, and they say, you know, they find a way to perhaps buy more American products or or make some changes. I don't think that down the road we're you know, I think down the road, I think we're going to see more deals getting tweaked. And that's what a lot of governments are going to be banking on going forward.
So if we do see these terrif rates kicking in, as you mentioned on August seventh, once the US Customs and Border Protection gets that time to adjust to this, what's the potential economic impact from where these terif rates lie.
Now it's a huge global economic experiment and an experiment for the US economy. I mean, these tariffs, these US tariffs are now going to be at the highest rate since World War Two. And even if some countries are breathing a sigh of relief that they got just ten percent, and I'm thinking, you know, countries like Singapore for instance, ten percent. The average US tariff was about two percent
six months ago. So these are huge changes and they will continue to trickle through into the US economy and it's hard to not see that starting to affect inflation more seriously in the months ahead.
And on top of all this bill, I guess we're still waiting for a lot of sectoral tariff announcements as well. I mean, what could that mean when it comes to certainty in the market.
Yeah, there is still a lot of uncertainty. There are products pharmaceuticals are chief among them, semiconductors, those are still being subject to what the US calls these Section two three two investigations to see if there's a national security risk, and presumably if there are, that allows Donald Trump to
put additional tariffs on those products. So, by no means is this the end of it, just because countries have gotten their number some of the products they export Switzerland I said thirty nine percent, but a big pharma exporter, they could be seen increased tariffs on those products once the US reaches those decisions.
And not the end of it, but maybe the market adjustment to what's happening now is just beginning. Thank you.
For this.
Bloomberg News Senior editor Bill ferries with us on this August first, Karen.
Nathan, we're also focusing on the markets in big tech earnings this morning. Shares of Amazon, they are down more than eight percent, Apple up. It's higher by almost two percent right now. And this follows yesterday's After the Bell reports for more, We're pleased to welcome Bloomberg Radio and TV anchor Kreedie Goopta Creedy.
Good morning, Hey, Chriatie.
Let's start with Amazon, because it's really hard to ignore the stock move this morning.
What are investors reacting to?
Good morning, Karen, Yeah, it's been a really interesting tech earning story, A tale of two. I think is fair to say Amazon cheres down by eight percent, treating about two hundred and fifteen.
Dollars a share.
This is all about weakness when it comes to Amazon Web services. When you think Amazon, we think about the packages, we think about the e commerce business. But ultimately they are pivoting firmly in the tech direction and that's where they've disappointed the market.
Now.
It doesn't help that we also got Microsoft earnings just twenty four hours before, which really set a positive tone for cloud adoption for the Asia kind of services that they had, So the expectations were pretty high for Amazon to impress the market, and to be fair, they did in some ways. Their revenues did come in better than expected, but not by much. And this is a market that is very tough on tech companies right now that the expectations are high and you have to be even better
than the expectations. You have to get an A plus plus instead of just and a plus. And this is where Amazon kind of finds itself right now because they're also talking about weaker than expected operating income as well as some of the sales growth when it comes to aws.
So that big idea of spend.
Big on AI, spend big on cloud and see that kind of multiply ultimately over time. That's the shadow of doubt that's being cast from Wall Street this morning.
And it really did seem like CEO Andy Jasse he had a longer view when it came to all of this, but he still couldn't ease those concerns on the earnings call, could he?
He couldn't.
He's trying to use that magic word that I think we've seen and not just the tech companies in the tech space, but across corporate America and arguably the global corporate sphere, which is artificial intelligence. And there was an era where every time you said artificial intelligence, the stock would just spike because of this kind of momentum driven story. And he's making that point. He says, look, we're very
early days in that investment story. We know Amazon has that massive anthropic venture as well, and they are competing with the likes of Alphabet, Microsoft, Oracle among others as well in the out space.
There. He's saying, give it some time.
But this is now at a point where Wall Street is looking at these AI kind of expectations, looking at these AI investments and say when is it going to pay off? And Andy Jesse wasn't able to make that case.
All right, well, we're seeing better reaction to Apple this morning it reported fastest revenue growth in more than three years.
What else did you take away from this?
You know, it's funny because we go into Amazon with such a strong earnings expectations. With Apple, you went in with some pretty beat up earnings expectations.
The idea that the tariff story would really.
Eat into the bottom line, would eat into the supply chains, especially as Apple tries to move their supply chain from China to India. And you actually saw the opposite on two key fronts. One that so much of those tariffears actually showed up and people buying iPhones ahead of time expecting the prices to go up, So that was good news for their bottom line revenue. But also the fact that they are actually doing better than expected in China. And this has been a key sticking point for Apple.
Because Apple is ultimately an American lug product, there are plenty of competitors in Asia as well, and they haven't been able to have the foothold and the growth in that part of the world that they were really hoping for, to the point that just this week has been reported that they shuttered their first retail store in China, really kind of showing that weakness that they've had there. I think it's crucial though, that Apple has at least today
convinced investors that is no longer the narrative. The question now moving forward is cand of sustain that growth in the iPhone picture, but also in Asia.
This is Bloomberg day Break, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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