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, it's day 10 of the war with Iran.

Once again, there is little sign of

letup on either side. The US and Israel

continue to launch heavy air strikes on

Tehran, while Iran is attacking Israel

and Arab Gulf states regularly with

drones and missiles. Iran says it can

keep up this level of fighting for at

least 6 months, but Defense Secretary

Pete Hegsth says at some point Iran will

surrender.

>> We're not flying a mission accomplished

banner uh like George W. Bush on on an

aircraft carrier. We're not doing that

and we haven't done that. But we can be

clear with the American people that this

is not a fair fight and that's on

purpose. Our capabilities are

overwhelming compared to what Iran's

are. In an interview on CBS's 60 Minutes

heard Sundays on Bloomberg Radio,

Defense Secretary Pete Hegathth said

President Trump will set the terms of

Iran's surrender. But former US

Ambassador to Israel Tom Naid says it's

important to take a step back.

>> We have to understand what the

objectives of this is and how do we

determine what success is? I'm not sure

success is necessarily quote regime

change, but one will have to debate

that. And I do believe Congress has a

role here, guys. I think it's important

for us to understand that. and former US

ambassador to Israel, Tom Nines, was a

guest on our new show, Bloomberg this

weekend. In the meantime, the US has

ordered non-essential diplomats in Saudi

Arabia to leave. That's after a US

service member wounded in in an attack

over the weekend died overnight,

bringing the US death toll to seven.

Iran says more than,300 people have died

in US and Israeli strikes so far.

Sources tell Bloomberg News that

President Trump is considering a special

forces ground operation to seize Iran's

enriched uranium. That's on growing

concerns it may have been moved.

President Trump says that's something he

could do later on, but he's not

considering it right now. Well, Nathan,

Iran is signaling no letup to the war

after naming the hardline son of the

assassinated Ayatollah Ali Kamani as its

new supreme leader. 56-year-old Moshaba

Kami has deep ties to the Islamic

Revolutionary Guard. Bloomberg senior

editor Wendy Benjaminson says the

decision was not a surprise. this was

the the man that the US really expected

would take over for his father. It's the

first generational succession since the

1979 revolution. Um and he seems to be

the kind of guy who will continue in his

father's footsteps in every way. And

Bloomberg's Wendy Benjaminson, President

Trump told Fox News he was unhappy with

Mashabas's appointment.

>> Well, Karen, oil has smashed through a

$100 a barrel this morning as the war

rages on. Checking NX crude right now.

It's up nearly 14% at $103.36 per

barrel. Brent is up 15% at $10662.

The price was even higher earlier, but

talks on a coordinated release of

reserves took some heat out of the

market. Steven Stapinsky leads

Bloomberg's team covering energy in

Asia.

>> I think some of the worrying things that

happened over the weekend is the the the

the retaliatory strikes um from Iran

continued. It did not look like there

was any easing of tension. In fact, it

looked like it was getting worse. The US

wasn't showing like it's going to back

down, especially rhetoric coming out of

the White House and from Trump himself.

And then on top of that, you had some

major producers. You had Kuwait and you

also had ADNO looking to adjust or lower

their oil production because their

inventories are getting high as they

can't export the fuel. Bloomberg

Stevenchinsky says the group of seven

finance ministers will discuss a

possible joint release of oil from their

reserves today. President Trump says a

$100 oil is a quote small price to pay

for world safety and peace.

>> Well, Nathan, oil is not the only thing

on the move this morning. We're seeing a

big sell off in stocks around the world

and Bloomberg's John Tucker joins us

with the very latest. John, good

morning.

>> And Karen, US stock futures down over

1%. Japan's Nikke plunged 5% this

morning, sending that market into

correction. Global bonds, they continue

to sell off. So that's pushing yields

even higher. About $6 trillion of market

value has now been erased from global

stocks since the war in Iran began.

Investors are pricing in a deeper and

longerlasting supply shock. This is one

that could squeeze growth while

reigniting inflation, what we know as

stagflation. The dollar has emerged as

the haven asset of choice with the

Bloomberg dollar spot index up almost 2%

since the war began. Now that adds to

cost pressure since oil is priced in

dollars. And Helen Juel of Black Rockck

says the war introduced more unwelcome

obstacles for investors.

>> Uncertainty about the Fed path, which we

didn't have just a few weeks ago.

>> Well, expectations for Federal Reserve

interest rate cuts have already been

paired back. And veteran strategist

Edard Denny has raised the probability

of a market meltdown. As he puts it, the

US economy and stock market are stuck

between Iran and a hard place. In New

York, I'm John Tucker, Bloomberg Radio.

>> All right, John, thank you. There's

another source of tension in New York

City. Authorities are investigating

potential terrorism linked to two

suspects in custody over what police

commissioner Jessica Tish says was an

improvised explosive device thrown near

Mayor Zoran Mandani's residence. Tish

says the device was thrown by a

counterprotester during an anti-Islam

demonstration. Witnesses reported seeing

flames and smoke as it traveled through

the air before it struck a barrier and

extinguished itself a few feet from

police officers.

>> New York City Police Commissioner

Jessica Tish says the confrontation

unfolded outside Mayor Mani's home

during a protest organized by far-right

activist Jake Lang to quote stop the

Islamic takeover of New York City. Well,

in Europe, Nathan Chancellor Frederick

Mertz suffered a sus setback after his

conservatives lost a crucial state

election to the Greens. The loss is

ominous for Mertz, whose authority will

be tested in four more regional

elections this year.

>> Turning back to markets now, Karen

Bloomberg News has learned Live Nation's

close to settling a federal antirust

lawsuit accusing the company of

illegally monopolizing the live music

industry. The settlement discussions

have intensified since a trial kicked

off last week. Under the proposed plan,

Live Nation's ticket master subsidiary

would eliminate some exclusivity in

ticketing contracts with concert venues

as well as make some concessions around

the use of its amphitheaters. Nathan

about a confidence for Nvidia

billionaire Leo Quuan doubled his stake

in the chip giant to 2 million shares.

While small relative to his 13.4 4

billion fortune as measured by the

Bloomberg billionaires index. The

acquisition is a notable move by Quan

whose net worth for years largely has

been tied up in just one stock Tesla.

>> And this program note Karen markets may

close on Fridays but the world doesn't

and that's why we are bringing you a new

live radio and TV show Bloomberg this

weekend. It looks beyond the daily

headlines to the bigger themes driving

politics, business and culture. Join

David Gura, Christina Rafini, and Lisa

Matteo for smart conversations and

in-depth interviews that help make sense

of the week that's been and what comes

next. Get Bloomberg This Weekend live

Saturdays and Sundays from 7 a.m.

Eastern on Bloomberg Radio, Television,

and the Bloomberg Business App.

>> 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 Michael Bar.

Michael, good morning.

>> Good morning, Karen. The partial

government shutdown at the Department of

Homeland Security is being felt by air

travelers spending hours in security

lines at airports like Louis Armstrong

International Airport in New Orleans and

Hobby Airport in Houston. This woman

waited for hours and missed flights out

of Houston. She says nerves are fried.

>> There's a lot of frustration. And a lot

of people are very upset, kind of sad

that they're not being where they're

supposed to be going and the trade

agents waiting in the line.

>> Officials in New Orleans told flyers to

show up 3 hours ahead of their flight

because of a shortage of TSA agents. The

New York Police Department is mourning

the loss of one of their officers while

helping the US mission in Iran. Officer

Sorfly Deavius suffered a fatal medical

emergency and died while deployed to

Kuwait. Davius, who was a major in the

Army National Guard, was a 12-year

veteran of the NYPD. The California

Public Health Department is warning the

bird flu virus is a serious problem

sickening marine mammals, too. Dr. John

Schwarzberg, clinical professor ameritus

at UC Berkeley School of Public Health,

alerts Bay Area residents bringing pets

to the beach to beware.

>> You should be careful when you're

approaching other mammals. Um,

particularly if you're going to be, for

example, on the beach and you see a

seal, particularly if the seal looks

sick, but a whale animal could certainly

be infected and spread the viruses as

well. The Marine Mammal Center in Marin

County reminds people and their pets

that they should not approach live or

dead animals. In Los Angeles, a person

fired shots into the home of singer

Rihanna on Sunday afternoon while she

was at home. Fortunately, no one was

hurt. A female suspect is in custody.

Global News 24 hours a day and whenever

you want it with Bloomberg News Now. I'm

Michael Bar and this is Bloomberg.

Karen,

>> thanks Michael. Time now for our

Bloomberg sports update and for that we

bring in John Stashour.

>> Thanks Karen. NFL free agents can begin

signing officially on Wednesday, but

we'll start hearing about some of those

signings today. Among the free agents,

quarterbacks like Kyler Murray and Kirk

Cousins, receivers like Mike Evans and

Tyreek Hill and a running back in

Kenneth Walker who was the Super Bowl

MVP. The golf in Florida was won by Akay

Batia in a playoff with Daniel Burgerer.

The Celtics have gotten Jason Tatum back

from that leg injury. now played in two

games and the Celtics have won them

both. It was 1098 in Cleveland. That's

your Bloomberg sports update.

>> Stay with us. More from Bloomberg

Daybreak coming up after this.

>> Coast to coast on Bloomberg radio,

nationwide on SiriusXM, and around the

world on Bloomberg.com and the Bloomberg

Business app. This is Bloomberg

Daybreak.

>> Good morning. I'm Nathan Hager. On day

10 of the war with Iran, President Trump

has said there will be no deal with

Tehran until unconditional surrender.

Asked what that looks like, Defense

Secretary Pete Hegth had this to say on

CBS's 60 Minutes.

>> This is not a remaking of the Iranian

society from an American perspective. We

tried that. The American people have

rejected that. President Trump called

those wars dumb and we're not fighting

that way.

>> Defense Secretary Pete Hegathth on 60

Minutes heard Sundays on Bloomberg

radio. This morning we're joined by

Bloomberg News Deputy Washington Bureau

Chief Laura Davidson. And with us from

Dubai this morning is Bloomberg Middle

East correspondent Jumanna Bureti, the

anchor of Bloomberg Horizons. Good

morning to both of you. Jamanna, I'll

start with you just to give us the

latest on what has been happening in the

Middle East. Good morning.

>> Yes. Uh well, the main news over the

weekend was the appointment of the new

Supreme Leader, essentially the son of

the former Supreme Leader Mushab Kaban.

uh and many are taking that as an act of

defiance. He's essentially a continuity

candidate. Uh the IRGC are very very

close to Mushta Baham. Uh they've

already pledged full obedience to him in

a statement. And remember this is an

individual who was placed under US

sanctions in 2019. He's been accused of

influencing past elections uh and very

brutal security crackdowns in the past.

Uh and so the fact that he was appointed

and elevated to this position tells you

that Iran continued to be defiant and

that the security system, the military

system are going to continue to play a

very dominant role in terms of

decision-m around all of the nuclear and

military decisions that they've been

making around the war.

uh and uh you know, President Trump has

also in the run-up to this deemed the

selection of Musht to be an unacceptable

choice and has reiterated over the

weekend that they're going to be pushing

for a complete surrender. The fact that

the Iranians have actually appointed the

son of Ali K suggests that they are not

going to yield uh at least imminently to

some of the demands that the US have

been asking for. Let's bring you into

this, Laura, because as Jumanna

mentions, President Trump has said he's

not happy with the appointment. He's

said that he wanted a personal role in

choosing Iran's next leader. What kind

of a response can we expect from the US?

Now,

>> the US is looking at a bunch of

different options. Uh, you know, Trump

went into the weekend saying that he

would be striking uh different uh sites

in Iran that had not previously been

targeted. Uh, we've really seen a

broadening and an escalating of the war

over the weekend as there's been

additional strikes. The US is also uh

reportedly considering looking at some

sort of special operations ground

strike. This would go against what uh

Trump and other top officials have said

in recent days that they're not in

sending any uh ground troops. No ground

operation. Uh this one would

specifically focus on looking at uh

securing uh the enriched uranium

supplies and and somehow taking that

away from the Iranians. This of course

would be uh you know a really uh big um

escalation both in terms of of of

exactly you know the US's role here but

also in terms of risk um that this is a

a much uh riskier um expedition than

than what's been happening so far. Um

you know and this is really as we've

just seen um safety concerns spread

across the region uh the the US embassy

in Riyad Saudi Arabia. They've asked um

all uh diplomats who are not emergency

personnel to leave along with their

family members. This is the first of

such of those orders. Uh not to mention

all of the e economic spillover effects

we've seen with oil smashing through

that $100 a barrel uh marker and just uh

uh at least so far today uh both in in

Europe and Asia markets really not

responding well which creates a a

political problem for Trump at home.

>> Well, what do we know, Jim, about the

situation on the ground in Thran right

now, where the possibility is of the

uranium being located and what kind of

damage Thrron has been under at this

point. Well, you know, let me just go

back to your first question. Uh, I

think, you know, in many respects, to go

back to what I was saying about Mushab,

he does represent continuity of of the

of the of the regime and the very strong

presence of the revolutionary guard

corps. So, uh, from that perspective, he

represents everything that all of those

demonstrators were protesting against

uh, earlier this year. However, there's

little sign of the system collapsing

from within and there has not been any

reporting or recent reporting of

demonstrators taking to the streets. If

anything, there has been reporting of uh

the Iranian regime preparing the paral

paramilitary force, the bas

in case people start taking to the

streets again. Now, as for the location

of uh the enriched stockpile, you know,

this has been a question that is that

has been toying, I think, the minds of

experts ever since the 12-day war uh

from last June. Um but satellite imagery

even in the run-up to this war, the most

recent war suggested a bit of activity

around the Isvahan site. Uh and the

latest reporting that uh Laura was just

citing there, you know, that US

officials are considering uh sending a

specialized force over there to help

somehow retrieve that enriched stockpile

uh would take place around the Isvahan

site because of increased detected

activity on satellite imagery that we

saw in the run-up to the war. So of

course it is very risky uh and

ultimately it boils down to two choices.

you know, if they want to take on that

risk and put troops on the ground to go

and try to retrieve the stockpile,

they've got two things that they can do

with this. They can try to extract it

from the country, uh, which is similar

to what happened in the run-up to the

JCPOA, or they can try to dilute it. But

at a time of, you know, extreme uh war

and targeted military operations with

Iran on the offensive, again, it raises

a lot of question marks about sort of

what the security situation would be if

the US were to commit to sending troops

or extra uh personnel to Iran to try to

retrieve this uranium.

>> We're speaking with Bloomberg Middle

East correspondent Jamanna Bureti in

Dubai along with Bloomberg News Deputy

Washington Bureau Chief Laura Davidson.

And uh just picking up on what Jamanna

was saying in terms of the security

situation in the Middle East right now.

Of course, we've seen Iran respond uh to

US and Israeli attacks with retaliatory

strikes across the Middle East. And now

the news overnight that the US embassy

in Riad uh is being ordered and all of

Saudi Arabia is being ordered to uh get

out of the country in terms of American

citizens there. Uh what is the potential

now of a wider war? Uh what is the

signal that the US is sending by

essentially evacuating Saudi Arabia?

>> This is a signal that the US expects

that there will be more strikes, bigger

strikes, broader strikes. Um it was the

same uh you know uh a a similar but more

targeted um signal we saw the state

department send uh before the uh the war

began you know just nine days ago um

asking uh uh diplomats and non-essential

people you giving them the option to to

leave uh uh some of the the embassies in

in the region. um you know these orders

are the essentially a precursor for an

expectation that that things will get

more dangerous not less. Um and this is

kind of the the same sort of uh you know

uh sentiment that we've really seen uh

ripple across the globe today of uh you

know both from in on the market side as

well as from the diplomatic and and

geopolitical side realizing that this is

likely not going to be a short-term

conflict and that this is something that

will last weeks if not months uh but

there's no real clear um end in sight

you know with both sides both Iran and

the US saying that they uh you know want

the other side to surrender. They're not

willing to negotiate. Um and there's no

clear out yet particularly because the

US has not articulated what it sees as

success here. Trump has talked about

regime shade and she's talked about uh

you know Iran uh being disarmed uh but

there's been no clear sense here about

you know what the US is actually seeking

>> and the response from the Middle East as

you know Jumanna has been curtailment of

oil production from several countries

including uh Kuwait and Qatar with the

liqufied natural gas. Uh this news that

the G7 might be considering a joint

release uh from their reserves has taken

some pressure off the market this

morning. But what are you looking at in

terms of market impact right now?

>> Yeah, I mean the oil price moves this

morning have been nothing short of

extraordinary. When I was on air a

couple of hours ago, we got very close

to $120 a barrel uh where Brent was

trading. At around the same time, these

reports came out suggesting that the G7

finance ministers were having an

emergency meeting to discuss the release

of strategic petroleum reserves, those

SPRs. And on the back of that, you saw

some of the gains uh get get erased that

were still up anything from 10 to 15%

just today. Uh and so this really does

speak to tightening physical supply. And

you know speaking to many experts in the

industry, the analysts around the the

the main problem here is not necessarily

the fact that uh these uh these sites

have sustained uh a lot of damage

because they haven't. Um they can still

produce if they want to produce. The

issue is getting the oil and the gas and

the other products derived from gas out

there and through the straight of

hormones. And so that is the major

concern here. And effectively what it

means is as long as the straight of

Hormos remains effectively closed for

for for uh the safe safe passage of

vessels, you're going to continue to be

in a situation where many of these key

OPEC producers are getting increasingly

concerned about their storage getting

filled up and they have many of them

announced that they are either cutting

production, slowing down production or

announcing force measures with some of

their key customers. this morning. Um,

Bahin also joined the list of some of

the refiners in the region that have

announced a force major with their

customers. So, this squeeze, the

physical squeeze on the market doesn't

seem to be letting up even though the

announcement and the potential release

of SPR from an oil perspective could

help ease some of the upward price

upward movement in price.

>> Thanks to both of you for this.

Bloomberg's Jamanna Bureti with us this

morning from Dubai along with Bloomberg

Deputy Washington Bureau Chief Laura

Davidson. Aaron

>> Nathan and stocks are tumbling as the

war in the Middle East fuels turmoil in

energy markets, sending oil above $100 a

barrel for the first time since 2022.

Bond losses are accelerating while the

dollar hits its highest level since

January. S&P futures, they're down

9/10en of a percent down 62 points. Dow

futures down 1.1% or 524 points. And

Nasdaq futures down 1% or 255 points.

We're joined now by Ethan Devit, senior

investment adviser at Monet Group. And

Ethan, good morning. Thanks for being

here. You say the oil price shock is the

story of the week, but is this a

shortterm story? What if this drags on?

>> Could very well be a short shortterm

story. We don't know yet. That is

exactly the uncertainty. I'd say if we

look to predictions say that's built

into inflation expectations they may be

stale now but nobody foresaw this shock

as you mentioned the spike in oil and

the rest of the picture for inflation

was looking quite subdued up to now we

had based our interest rate expectations

on that and the consumer was feeling

relatively complacent based on that.

This of course is a shock and we know

it's going to just start to have

collateral damage throughout different

sectors as importers are affected and

the question is whether this will come

to the weak kind of resolution that had

been the narrative and whether this gets

dragged on this very much a fluid

situation. So I think investors are

watching just like everybody else.

>> Well, a fluid situation indeed. You also

talk a bit about shock absorbers and if

they'll be effective. So where should be

where should we be watching to see if

that's the case?

>> Great great question and I'd say there's

a retail investor and an institutional

investor in this. You spoke about stocks

tumbling. I doubt that the retail

investor is already participating in

that. They do not have the access to the

early access to be able to make

decisions on the fly. And most retail

investors have been coached by their

adviserss to stay the course, be more

long-term and not try to tactically

maneuver here. But where are the shock

absorbers in markets? A diversified

portfolio should have exposure to that.

I would say gold is the traditional

shock absorber when there is this kind

of geopolitical shock. We know that gold

itself has been a bit distorted by the

high degree of retail selling. So we

have to almost put that on the side for

the moment. Cash is a typical shock

absorber, but no investor wants to be in

cash for too long today because they're

afraid of missing out. Oil itself and

energy will be a shock absorber. We can

see that we should have had exposure to

energy stocks. We know that energy is in

short supply. And then the AI and tech

story which has been the big long-term

shock absorber that has sustained

markets for years, that's got its own

cracks today. So that really has to to

be on its own. So it's not clear where

the traditional shock absorbers are.

>> But if there is cash out there, will

people eventually see this as a buying

opportunity? Should we expect a bounce

or is there still some reticence as we

we can't really predict what's going to

happen?

>> It's a it's a great question and the the

million-dollar question indeed is

whether the cash will stay on the

sidelines particularly if inflation

starts to erode it. It doesn't look

particularly safe or whether there will

be that knee-jerk reaction to which to

buy the dip which is something that

we've seen quite a bit in recent

downturns. A very swift turnaround and

desire to buy the dip. We saw that in

the software as a service. the SAS

apocalypse already. We have many

commentators in a sort of a feeding

frenzy over where the the SAS stocks

that are being oversold are. So my

suggestion is that because of this

strong need to have growth in a

portfolio, there is a strong need not to

be out of equities for too long and

that's where the equities on the

sidelines are.

This is Bloomberg Daybreak, your morning

podcast on the stories making news from

Wall Street to Washington and beyond.

>> Look for us on your podcast feed by 6:00

a.m. Eastern each morning on Apple,

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Now on your favorite podcast platform to

stay informed all day long. I'm Karen

Moscow.

>> And I'm Nathan Hager. Join us again

tomorrow morning for all the news you

need to start your day right here on

Bloomberg Daybreak.