Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, the rise in futures follows yesterday's selloff on Wall Street. All three major indexes fell at least one and a quarter percent. Risk assets took a breather after this month's rally saw global stocks climb to their highest level of the year. Alan Zapfron is a founding partner in co CEO at IEQ Capital.
The market's probably a little bit ahead of itself with full anticipation rate hikes are over cuts are coming, but there's probably a bit too much near term enthusiasm. Albeit the long term constructive view on the American economy. Rates the same equities are part of a well diversified portfolio, and you can't deny that you still need to have some equity exposure.
I EQ Capitals. Alan Zaffren says overbought conditions also contributed to yesterday selling well.
Nathan helping give a lift to equities this morning, as Micron Technology shares are up about six percent after the company gave a strong revenue forecast for the current period. We get the story from Bloomberg's Charley Pellet.
Micron is the largest American maker of memory semiconductors, and the quarter indicates that data center demand is helping make up for a slowly recovering market for PCs and smartphones. Micron said fiscal second quarter revenue will be five point one to five point five billion dollars. Now that compares with an average analysestimate of four point nine to nine billion.
The outlook signals that Micron is through the worst of an industry wide slump, a moving back toward profitability in New York, Charlie Pellett Bloomberg Radio.
All right, Charlie, thank you, and other high tech companies in the spotlight.
Today is the day.
Apple plans to pull Series nine and Ultra two models of its flagship smart watch from its online store. Apple will also pull the watches from its physical retail locations on Christmas Eve. This is because of a patent dispute over technology that measures the amount of oxygen in a user's blood.
Nathan. The US is reportedly considering raising tariffs on Chinese electric cars. Bloomberg's Amy Morris has the details from Washington.
The Biden administration has for the most part left the trompera tariffs in place on about three hundred billion dollars of Chinese goods. Now, the White House is considering more levies on evs and solar products. The Wall Street Journal reports the US wants to limit reliance on China, which has become a global powerhouse in electric cars, while shielding its own green industry. A bipartisan group of lawmakers earlier this month recommended raising tariffs on goods from China and
restricting investment in the country. China says raising tariffs would undermine the security of the global supply chain. In Washington, Amy Morris Bloomberg Radio.
All right, Amy, thank you. Now let's get to the latest from the Middle East. The US continues to urge Israel to move its war with Hummas from a large scale assault to a more targeted operation in Gaza, but Secretary of State Antony Blincoln says there's been too much focus on calls for just Israel to end the war.
There seems to be silence on what Humas could do, should do, must do if we want to, and the suffering of innocent men, women and children. It would be I think good if the world could unite around that proposition as well.
The Secretary Blinken spoke as Israel's military says it's uncovered a major Hamas command center in the heart of Gaza City. The top Hamas leader is in Egypt for talks on a new ceasefire and hostage prisoner exchanges with Israel.
Well Nathan Yemen's Houthi rebels say they will continue targeting ships in the Red Sea, despite US moves to build an international naval task force to protect trade in the region. The Iran backed group also warrant it's willing to retaliate at the US attack who the bases, signaling possible for their escalation. Senior White House Advisor for Energy and Investment Almos Hakstein says the BODI and administration is focused on defensive action.
The United States has joined now in a coalition of approximately ten countries already in making sure that there are patrols, surveillance, patrols of aircraft and ships, and to take defensive measures if needed. We continue to have other conversations with allies to ensure that we have a coalition, and reason for that is because this is not a US concern, this is a global markets concern.
And Almos Hakstein spoke to Bloomberg after the US and UK Navy shot down fifteen drones launch from who decontrolled areas of Yemen over the weekend.
Back home, on the political front, Caaren Donald Trump's legal team is urging the Supreme Court to hold off on intervening in his election obstruction case. We get that story from Bloomberg's Ed Baxter.
This is the case brought by Special counsel Jack Smith, saying Trump conspire to overturn the twenty twenty election. Smith requested the consideration of Trump's immunity claim, seeking to ensure the trial can start on March fourth. Trump's lawyers are arguing there has not been identification of a compelling reason for the quote's extraordinary haste he proposes. Trump has long said he wants the cases put off until after the
twenty twenty four election. This is the first Trump criminal case to hit the Supreme Court, and the court could rule as early as this week whether it will hear it. Ad Baxter Bloomberg Radio, All.
Right, Ed, thank you, Let's turn to some company news. Toyota Motor is recalling about one million vehicles sold in the US that are at risk of having passenger side airbags failed to deploy properly due to a passenger seat sensor issue. They affect some Toyota and Lexus brand Sedan's. Toyota also said subsidiary Daihatsu Motors offices were rated over a safety scandal, and Toyota shares dropped four percent in Asia.
And Karen, A mega media deal maybe in the works. Bloomberg News has learned Warner Brothers Discoveries held talks on a possible merger with Paramount Global. A combination would unite the Paramount and Warner Brothers film and TV studios and put a number of PayTV and broadcast stations, including HBO and CBS, under a single roof. This is Bloomberg, all.
Right, Nathan, Thanks time now for a look at some of the other stories making news around the world, and for that we're joined by Bloomberg's Amy Morris.
Amy, Good morning, Good morning, Karen. All ten Americans who were detained in Venezuela and exchanged in a prisoner swap are now back on US soil. Ambassador Roger Carstons flew with some of the freed Americans from Venezuela to Texas.
There were so Obviously the rumors that things might be happening, but I think it wasn't real until someone came to their cell this morning and said, you follow me.
Six of the Americans landed at Joint Base San Antonio last night. They'll be evaluated at the Brooke Army Medical Center. If next year's presidential election comes down to President Biden and former President Trump, a new poll indicates Americans are divided, Bloomberg. Scott car explains.
Quinnipiac poll Wednesday showed in a head to head matchup, forty seven percent of respondents supported President Biden, while forty six percent supported Donald Trump. Polster for the College Tim molloy says that's a statistical tie. But in a three way race with third party candidate Robert F. Kennedy Junior, Biden's support fell to thirty eight percent, Trump's to thirty six percent, as Kennedy Junior drew twenty two percent, pulling from the support base of both Biden and Trump.
Any of the pulling gun has shown that America is like another alternative to Biden and Trump.
He maybe he may not be, but he's showing up with a good number.
Scott Carr, Bloomberg radio.
In Boston, Mayor Michelle Wu has officially acknowledged and apologized for the harm caused to the black community decades ago when a man told police that his wife had been shot by a black man, but it turned out he had orchestrated the killing himself. Alan Swanson and Willie Bennett were wrongfully arrested for that crime.
There was no evidence that a black man had committed this crime, but that didn't matter because the story was one that confirmed and exposed the beliefs that so many shared.
The families accepted the mayor's apology, calling it a personal triumph. Several hundred families in Oklahoma City could lose their homes over the holidays. They're given only five days notice and then forty eight hours to get out amy cold try and with housing authority. Shelter Well says women face the brunt of those short term evictions.
Sixty one percent of those facing eviction are women, and seventy one percent of those are households with children.
State Senator Julia Kurt has introduced a bill giving families ten extra days to resolve those issues so they can avoid eviction. Global News twenty four hours a day and whenever you want it. With Bloomberg News Now, I may Nee Morrison. This is Bloomberg Karen.
All right, Amy, thank you, And as Amy said, you can get news throughout the day here on Bloomberg Radio. But now even better, you can get the latest news on demand. And that means whenever you want it. You just subscribe to Bloomberg News Now and you can get the latest headlines at the click of a button. You can get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot Com plus Apple, Spotify, and anywhere else you
get your podcasts. Time now for the Bloomberg Sport Update, Here's John Stashauer John.
Karon was National Signing Day in college football. Though rich get Richard, Georgia said to have had the best recruiting class, Three of the top twelve players in the country head into Athens. Twenty of Georgia's recruits a four star and a defensive back who's considered a five star was going
to go to Florida State. Change his mind. We'll go to Georgia, Florida State, and Georgia will play next week and the Orange Bowl, Ohio State able to keep top wide receiver Jeremiah Smith, who had said to be waivering. College basketball, Yukon was ranked fifth. I FEDY national champs were ten to one with four wins over top fifteen teams and three over top ten teams, but the Huskies
upset lost at Seaton Hall seventy five to sixty. NBA saw Philadelphia beat Minnesota one twenty seven to one thirteen. The Timberwolves leave the West. It's just their second loss in the last eleven games. For six Ers MVP Joe lmbing fifty one points seventeen of twenty five from the field, seventeen of eighteen from the free throw line. Lakers hoisted that championship battle when they won that in season tournament.
Since they did that, they're one and four. They lost at Chicago Lebron James in defeat twenty five points, just an assist, shy of a triple double. The next beat the Nets, they had lost their last six games in Brooklyn, was one twenty one to oneh two. The Celtics won at Sacramento one forty four till one nineteen. They did it without Jason Tatum. Capitol scored in overtime beat the Islanders three to two. The Mets have acquired pitcher Adrian
Helser from Milwaukee Johns Stashewer. Bloomberg Sports.
From coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on Syriasxam, the Bloomberg Business Appen Bloomberg dot Com. This is Bloomberg Daybreak.
Good morning.
I'm Nathan Hager, headed to the Thursday morning open. Futures are on the rise, but global stocks have been taking a bit of a breather from this month's rally that's pushed equities to their highest levels of the year. Investors maybe dialing back some optimism about the FED cutting in interest rates early next year. For more, We're joined by Bloomberg's Critty Gupta Critty, Good morning. It almost looks like the Santa Claus rally got pulled forward just a bit. Is that how things look to you?
Yeah, it does actually kind of look like that, except now you're staring need to see the consequences of that decision, which is simply that you are going to see a bit of a selloff going into perhaps the new year. Remember January is seasonally a lower performing month right next to September, after the summer rally that we tend to see. So the natural pullback is already existing. But someone argue that this isn't necessarily a market narrative that we're seeing.
This is really a positioning story, because not only do the Santa rally get pulled forward, but some of the data, some of the rate cut narrative, and of course the market's anticipation of what Shairpow was going to say in his last press conference actually did a lot of the work for some of the bowls in the market.
There's a lot of questions still, though, isn't there about whether we are going to get a soft landing next year. A lot of analysts are thinking that a recession is still in the forecast. I mean, what could that mean for stock setting into twenty twenty four.
Well, that's part of actually the case for a rate cut. So if you actually look at what people are saying, the last time a rate cut had actually happened prior to COVID, it was in twenty nineteen. It was during the Trump era. We were talking about a trade war really upending global trade, and that was one Chair Powell of all people, by the way, said we're actually going to cut rates, not because we need to, but because
we might need to in the future. The idea of an insurance cut, and that's exactly what the market is saying is going to happen again. That it's not going to be a question of does the economy hit a recession, but do we start to go in that direction? And Chair Powell in this peers at the FMC actually say we see it coming, We're going to act very quickly, and we're going to basically ensure ourselves cut rates. That
postpone some sort of turn down. But a lot of pushback against that narrative is that recessions don't happen gradually. They happened very quickly and all at once, and the data deteriorates very very quickly, and the Federal Reserve naturally is data driven, so one data point may not be enough of a canary of the coal mine for them to catch it.
Well, we are going to get a pretty significant, well a couple of pretty significant data points even before the end of this year. We got GDP coming out and the Feds for Ferred inflation gauge tomorrow. I mean, what kind of volatility could we be looking at depending on how those indicators turn out.
Yeah, well, a lot of volatility. Because it's not just about the economic data itself. It's also about the geopolitics. And here's why this really matters. Of course, the war in the Middle East is going to be a big part of that equation. One of the big fears. I imagine what Chair Powell's worst nightmare is going to be is some sort of tick up in inflation. Where does that tick up come from, Nathan, It comes from potentially commodities, It comes from wages. It also comes from a sort
of geopolitical conflict that is long lasting. So if you start to see more of a read through into commodity prices or more of a read through into shipping costs, all eventually, if it lasts long enough, translates into prices for the American consumer. You're already seeing that with some of the shipping companies actually rally leating, the stocks actually
higher because they can pass on those costs. That is all inflationary, and that's going to really upend any of this dubvish narrative that the Chair is really setting right now.
So the market participants that you're talking to as we watch these ships you're around Africa to get around the way of the Red Sea. I mean, how do you play this well?
I mean the question of the day is how do you hedge it? And for so long the only people we are hedging it and using the US dollar. But Nathan, going into an election year, that is especially a trade that could go to hour very very quickly in terms of what the hedge actually is. People are buying back into commodities because at the end of the day, most of the trade that happens in the Red Sea is
oil related. So if you start to see oil prices get higher as a function of higher tanker rates, higher insurance rates of the shipping equation, that is all going to push oil prices higher as well. The reason you're not seeing that in the market right now is because most of it is actually kind of cushioned by the OPEQ plus supply narrative. But then hey, take a look at what you're seeing in the US benchmark, and that move is actually more substantial.
What's the bull case for stocks next year given so much of the uncertainty that we still have.
The ballcase is simply if the resilience lasts even longer, and you'll remember that a good chunk of the stock rally has really been what a lot might call a magnificent seven, which has really been a function of the AI frenzy. So now you have to see a lot of people deliver on it. Nathan, there is historical precedent for this when cloud was the buzzword a couple of years ago, where Oracle, Alphabet, Microsoft, we're all kind of competing for being the title of kind of the king
of the cloud. And I think what's really important here is that Microsoft really came out and won out on
that business because they were able to deliver. AI is very different because they are dealing with far more regulatory challenges, far more labor challenges, and of course a general understanding of whether or not you actually want AI in everyday societal matters, and that appetite is where you could see really the case for tech get made or broken and vice versa potentially lead to a rally or lead to a major correction.
This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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