Deadlock in US-Iran Peace Talks; Navy Secretary Fired

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the
stories we're following today.
Karen, the ceasefire between the US and Iran has turned
into a standoff over control of the crucial straight of
horror moves. President Trump says the truce will stay in
effect indefinitely until Iran comes to the table with a
new peace proposal. White House Press Secretary Caroline Levitt says
the President has no timetable.
I know there's been some anonymous, sourced reporting that there
was maybe a three to five day deadline.
That is not true.
The President has not set a deadline himself. Ultimately, he
will dictate the timetable.
Press Secretary Caroline Levitt at the White House. For its part,
Iran says it has no immediate plans to take part
in negotiations. Iran's president posted on social media that the
US blockade and threats are main obstacles to diplomacy. Bloomberg's
Juman has more from Dubai.
You've still got two boockades in place. The strait is
still not safe, and it is a deadlock between the
two sides and the question here is whose side is
time on, because the longer this goes on for the
more you're going to see upper pressure on oil prices. Already,
we're beginning to see that public There's been public backlash
in the US against the war and against President Trump
himself and his handling of the war. At the same time,
President Trump also maintains that this is costing Iran five
hundred millions dollars a day the blockades, and again we
haven't been able to verify those numbers, but it is
a battle of the wills here.
Bloombergs Jumani Barsecci reports Iran is maintaining its own blockade,
firing on ships and reportedly seizing at least two of them.
The Washington Post reports the Pentagon told Congress this week
that clearing minds from the Strait of hormones could take
up to six months.
Nathan, With the war still unrigolved, there's been another high
profile shake up at the Pentagon. Maybe Secretary John Feelin
has been fine, and we get more with the Bloomberg
Deputy Washington Bureau Chief Laura Davison.
Just earlier this month, it was a dispute about promoting
specific generals that was the top uniformed officer at the
Army and just yesterday the top civilian leader at the Navy. Also,
after clashing with Stephen Finberg, who's the Deputy Defense Secretary
in Pete Heggs at the Defense Secretary over shipbuilding priorities
also was asked to resign.
Bloomberg's Laura Davison reports fhelanz Auster is not expected to
affect Navy operations around the Strait of Horror moves. He's
being temporarily replaced by Under Secretary Honk how Well.
Meanwhile, Karen Treasury Secretary Scott Besson has told lawmakers many
Persian Gulf allies and some Asian nations have requested foreign
exchange swap lines with the US. We get more from
Bloomberg Zamy Morris in Washington.
Swap lines allow one nation to deploy the currency of
another as needed to address liquidity demands. During his testimony
before the Senate Appropriation Subcommittee, Treasury Secretary bess And told
lawmakers that Persian Gulf allies are asking for swap lines
with the US.
Swap lines, whether it's from the Federal Reserve or the Treasury,
are to maintain order in the dollar funding markets and
to prevent the sale of US assets in a disorderly way.
Besant also pointed to the potential for swaplines to support
dollar denominated lending overseas. In Washington, Amy Morris Bloomberg Radio.
Right, Amy, thank you. On Capitol Hill, the Senate worked
through the night into this morning to take a first
step to reopen the Department of Homeland Security. Republicans approved
a seventy billion dollar budget plan to fund ice and
border patrol through a process that requires no Democratic votes.
Democrats proposed a series of amendments focused on lowering healthcare
and other costs.
The bill now heads to the House.
Where Speaker Mike Johnson can't afford to lose just two
Republicans to pass the narrow spending plan. Some Republicans are
pushing him to go for an even bigger affordability ahead
of November's midterms.
Let's turn to the markets now, Karen. A record setting
rally is taking a pause right now, as peace talks
in the Middle East remain in limbo. The S and
P five hundred is coming off another record close. It
has now gained more than nine percent this month, and
the Nasdaq one hundred also closed at an all time high.
Oil is on the rise as well.
West Texas Intermediate's up about two and a half percent
at ninety five dollars thirty four cents of barrel Brent
is at one hundred and four to fifty.
That's a gain of two and a half percent.
Nathan Tesla unveiling plans for a massive ramp up in
spending on AI and robotics. The electric car maker says
capital expenditure will triple to more than twenty five billion dollars.
CEO Elon Moscow line the expansion plan during the earnings call.
I think you've seen most, if not all, certainly the
major technology companies substantially increasing their CAPO investments and U
and we're going to be doing the same. I think
it's uh, it's just going to pay off in a
very big way.
That's CEO Elon Musk, who spoke as Tesla for the
second quarter in a row, announced better than expected earnings
and shares of Tesla. They're down three point two percent
in early trading.
And the earning sprey continues today, Karen, with more than
thirty companies reporting, including chip maker Intel. Bloomberg's Tom Busby
has a preview.
Keifer investors Intel's efforts to restore its technological edge and
benefit from the extraordinary demand for all things AI related.
Also of note any update on Intel's admission three months
ago that it hadn't devoted enough production to server chips
and at that time was not able to meet all
the orders that came in. Bloomberg consensus calls for revenue
of twelve point three six billion dollars, more than half
of that from client computing, on adjusted earnings for share
of one cent and Intel shares of about eighty percent
so far this year.
Tom Busby, Bloomberg Radio.
All right, Tom, thank you well. It's been quite a
run for Intel and the rest of the chip stocks.
In fact, it's been a historic one. The Philadelphia Semiconductor
Index is now gained for a record sixteen straight sessions.
It's up thirty percent in April and set for its
second best month ever that was set in two thousand
and We.
May see more gains today. Karen Texas Instruments gave a
surprisingly strong forecast, helped by booming spending on data centers
and industrial equipment. Those shares are up more than ten
percent in early trading well.
On the flip side, software related stocks are under pressure
this morning. Nathan shares of IBM there down seven and
a half percent. Big Blue it posted quarterly sales and
its software unit now we're in line with estimates, but
that's failing to shake investor concerns about AI disruption to
its business. Shares of service now they're also lower, down
more than thirteen percent. The provider of software for business
Task reported results that disappointed investors and said some sales
deals have been delayed by the war in the Middle East.
Well, Microsoft is making a deal Karen, announcing its biggest
ever investment in austral pledging to spend almost eighteen billion
dollars by the end of twenty twenty nine as it
pushes deeper into the artificial intelligence market in the Asia, Pacific.
And Robinhood markets. Nathan expanding its global footprint. The financial
technology company has received an initial regulatory stamp of approval
in Singapore to offer brokerage services. Robinhood first announced it
would be expanding into Asia and December twenty twenty four,
eyeing Singapore for its headquarters. 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. Health Secretary Robert F. Kennedy Junior concluded a
marathon of budget hearings with federal lawmakers on Capitol Hill.
Kennedy was grilled on the country's worst measles outbreak in decades.
This heated exchange was between Kennedy and Democratic Senator at
Lisa Blunt Rochester of Delaware.
Does the President know there is a historic measle surge
occurring nationwide?
You want me to answer the question. It's just a
very simple question.
Yes, grandstand.
You're going to get your opportunity on.
A grant stand, can you answer? You can answer that question. Yes,
just started before I came answer.
I'm there's oportunity to answer the question.
Does the President know there is a historic measle surge
occurring nationwide?
I'm sure he does.
In response to bipartisan concerns about funding reductions, Kennedy said
they were painful. Officials in West Virginia say two people
were killed after a chemical leak at a plant just
west of Charleston. More than a dozen others, including seven
EMS workers responding to the leak were sent to the hospital.
Governor Patrick Morsey the.
Families of those we lost today, our hearts are with
you and are State griefs for you. We stand ready
to support you in every way possible.
State officials say all shelter in place orders have been lifted.
Georgia's Democratic Congressman David Scott has died at a eighty
Scott was the first black chairman of the House Agriculture
Committee and was seeking his thirteenth term in Congress. Scott's
death creates a sudden fifth vacancy in the Chamber amid
three resignations just this month. Until special elections are held
to fill the empty seats, there will be two hundred
eighteen Republicans and two hundred twelve Democrats in the House.
Global news twenty four hours a day and whenever you
want it with Bloomberg News Now. I'm Michael Barr, and
this is Bloomberg.
Hearron, Well, thanks Michael.
All time now for our Bloomberg Sports update, and for
that we bring in John Stashauer.
That's during the NFL Draft again tonight in Pittsburgh. The
Las Vegas Raiders set to take Indiana quarterback Fernando Mendoza
first overall. He led the Hoosers the national championship, and
he won the Heisman Trophy. The top seeds of the
NBA Playoffs both won at home. That's Oklahoma City beat
Phoenix once twenty to one oh seven. The Shay Gilgess
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The Magic ninety eight eighty three a to Bloomberg Sports Update.
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This is Bloomberg Daybreak. Good morning, I'm Nathan Hager.
The ceasefire between the US and Iran has turned into
a standoff over control of the Strait of Horror Moves.
President Trump has said the truce could go on indefinitely,
while hinting talks could happen this week. White House spokeswoman
Caroline Levitt says, the timing is up to the president.
He is satisfied with the naval blockade, and he understands
that Iran is in a very weak position and the
cards are in President Trump's hands right now.
Press Secretary Caroline Levitt at the White House for more.
We're joined by Bloomberg opinion columnist Mark Champion. Mark, it's
good to have you with us. Where do things stand
on this morning of what appears to be an indefinite
truth between the US and Iran?
Good morning, Yes, So you know.
We are in a place where we, you know, just
don't know whether the war will resume. It seems clear
that neither side really wants that, and therefore you have
this kind of standoff, overhauled moves, and the great difficulty
in going back to talks because their positions are so
distant from each other, and that runs from your homers.
It's homos itself and the control of hormos that the
Iranians want after the war. The Americans obviously do not
want that, nor do their allies in the Gulf. And
then you have the nuclear file, you have but listed missiles,
you have the whole range of things that we're under
discussion before the war or at least the US wanted
to be under discussion, and are still unresolved. Essentially, you know,
the Iranians are still able to fire missiles, ballistic missiles,
they are they still have a nuclear program, badly damaged,
but it exists and they have not given up the
principle that they'll keep it. So, you know, we're really
in this place where everything remains unresolved. The war has
not achieved US goals. It's done enormous damage to the
Uranian state and to its economy, and we're now in
a standoff, and the question is who can.
Last longer well as this standoff continues, Mark, what's the
potential economic impact. We've heard reports that just clearing the
minds that Iran has laid through the and around the
Strait of Hormus could take up to six months.
Yes, so you know, for now, you know, the oil
price is up again above one hundred dollars. That's a
you know, a significant increase from before the war. But
it is quite manageable for you know, parts of the
global economy. Certainly for the US it's a political issue,
but it's a it's a manageable issue for the US.
Economy much harder in Asia, which relies very heavily on
the Gulf for its oil, and there the issue is
just the you know, physical supply that about ten percent
of the world's supply has been taken off the market,
and that is a very significant problem in Asia, which
is the biggest consumer of Gulf oil, not so much
for the US, which consumes rather little. It's just affected
by you know, global price trends. So it's you know,
it's it is uncertain. The Iranians will also be hard hit,
but they are still getting some tankers through the US blockade.
Whether that is the US turning a blind eye because
they don't want this to become an existential issue that
prompts the Iranians to carry through on their threats to
attack energy infrastructure in the Gulf, or whether they simply
aren't able to control these ships once they turn off
their black boxes. It's not quite clear yet, but you know,
it will it will take a toll on both sides.
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