Gaza Hostage Exchange; Trump & Vance Open Door to China Deal

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1:09Bloomberg 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, we begin in the Middle East, where Hamas has released all 20 living Israeli hostages from the Gaza Strip after two years of war. The release comes as President Donald Trump has arrived in Israel on a Middle East trip to celebrate the ceasefire deal. Now from Bloomberg Middle East correspondent Jumana Bersetchi. President Trump has been saying that this is the end of the war and this is the beginning of peace. And so the expectation is that that is the message that he would like to hammer home.

1:52The fact that this really is a turning point for the region and that he has been the only U.S. president, he's likely to say that, that has been able to bring about this development. The war has been going on for two years now. Multiple failed attempts at negotiations, at diplomacy, shuttle diplomacy. and things were looking a little hairy a month ago after that Doha attack when Israel went after senior Hamas officials, senior negotiators operating in Doha. But since then, there's really been a renewed optimism, renewed push out of the Trump administration to bring about this breakthrough. And all of that came to fruition just in the last couple of days.

2:34Bloomberg's Jumana Bursette, she says under the terms of the agreement, Once the hostages are freed, Israel is obliged to release almost 2 ,000 Palestinian prisoners and has also agreed to allow much more aid into the devastated Mediterranean territory. Al Jazeera is reporting a group of Palestinian prisoners is now on buses on their way to the West Bank as part of that exchange. Well, Nathan, there are new developments on the trade front, and that has stock futures rallying following Friday's sell-off on Wall Street. Right now, S &P futures are up 1.4 percent. The White House is signaling it's open to doing a deal with China to calm fresh trade tensions days after announcing new 100 percent tariffs effective November 1st.

3:14The relationship soured last week when China announced new export controls on rare earths. Speaking to reporters on board Air Force One, the president expressed some optimism. I think we're going to be fine with China. Look, I have a great relationship with President Xi. He's a very tough man. He's a very smart man. He's a great leader for their country. He's a great leader and I have a great relationship with him. I think we'll get it said. I know what happened. I really understand what happened. And I'm not even saying he's wrong. But then we met him with something much tougher than what he did to us.

3:48And President Trump also posted on social media, quote, don't worry about China. It will all be fine. Well, Karen, there's no end to the spending standoff in Washington. This is day 13 of the federal government shutdown. and both sides are hardening their positions after the White House ordered the first round of permanent layoffs on Friday. Vice President J.D. Vance is pinning the blame on Democrats. We're trying to do everything that we can to ensure that low-income women and children get the food services that they need. We're trying to make sure that we pay our troops because that matters for national security.

4:20We also want our people to get their paychecks. That's where we've been focused. And unfortunately, what that does mean, Margaret, is that some federal bureaucrats are going to have to get laid off. Vice President J.D. Vance discussed the shutdown with Margaret Brennan on CBS's Face the Nation, as heard on Bloomberg Radio. But Democrats are sticking to their demand that Republicans negotiate an extension of health care subsidies before they'll agree to a stopgap spending bill. House Minority Leader Hakeem Jeffries addressed that on Fox News Sunday, also heard on Bloomberg Radio. Open enrollment starts on November 1st.

4:51Tens of millions of Americans are receiving notices right now that their premiums, co-pays and deductibles are about to explode, which is why we need to address it. Even Marjorie Taylor Greene agrees that we have to address this health insurance crisis right now. House Democratic Leader Hakeem Jeffries. And as the shutdown continues, military service members are set to miss their first paychecks on Wednesday. President Trump says his administration has found the funds to pay them, but it's not clear if they'll receive full paychecks or whether the president has the legal authority to deliver them.

5:22Let's go to Europe now, Nathan. And President Macron has announced a new French cabinet, including his last prime minister, Sébastien Lecornu. The announcement comes amidst growing pressure to prevent a political crisis and pass a budget. And Bloomberg's Carolyn Conan has more from Paris. I don't know if you know the movie Groundhog Day, but it feels like this in France at the moment, kind of living the same day again and again. So after he resigned last Monday, Le Cornu was appointed again on Friday night around 10 p.m. French time, saying he accepted the mission as of duty, that his only mission would be to pass a budget.

6:01And Bloomberg's Caroline Conan says it all leaves Le Cornu tasked with getting a budget approved before the end of the year, as well as fending off a no confidence vote later this week. And back here in the U.S., Karen, a nor 'easter is churning up the East Coast, prompting declarations of a state of emergency in New Jersey and parts of New York State. Let's get the very latest from Bloomberg meteorologist Rob Carroll. And good morning, Rob. Good morning, Nathan. We have an area of low pressure this morning, which is east of Atlantic City. It's producing rain from southern New England across the New York City area, down the coast all the way to Washington.

6:35The storm system is going to be moving very, very slowly. So it looks like more rain and wind throughout the day from the Boston area through New York City and on into Washington. We'll see coastal areas, seeing winds at times over 30 miles an hour. The New York City area is under a wind advisory through 6 p.m. Eastern Long Island. It's a high wind warning through 2 p.m. this afternoon. Well, Rob, when do you expect all this to end then? Well, it looks like the rain will come to an end as showers tonight, Nathan, in the district and also in the New York City area. But rain is likely to linger across Boston right on and through Tuesday evening.

7:07I'm Rob Carolyn, Bloomberg Radio. All right, Rob, thank you. Well, we turn back to the markets now where earnings are front and center this week. We get a preview with Bloomberg's Charlie Pellett. Big banks lead off, but we'll also hear from United Airlines, CSX, and Johnson & Johnson. The reports come amid heightened trade tensions and questions about a bubble in AI shares. Cam Dawson is chief investment strategist at New Edge Wealth. The big question is, will we see the same kind of big beats and raises that we saw in the second quarter, which certainly propelled stocks much higher over the course of the summer.

7:41Financials very much so the big story this week, with the likes of JPMorgan Chase, Citigroup, Wells Fargo, Bank of New York, Bank of America, Goldman Sachs, and Morgan Stanley all reporting. In New York, Charlie Pellett, Bloomberg Radio. Thank you, Charlie. Economists are marking up their estimates for U.S. economic growth this year and next. We get the details on that from Bloomberg's John Tucker. John, good morning. Good morning, Nathan. Yeah, this is the survey from the National Association for Business Economics. They see inflation adjusted GDP rising 1.8 percent this year. That's up half a percent from the forecast made in June.

8:16The survey respondents expect similar growth next year. But the economists also see job growth slowing to an average of only 60 ,000 this year. The job growth has slowed markedly in recent months, and that's a trend that prompted the Fed to lower interest rates in September. The NABE sees the Fed cutting rates once more this year before reducing borrowing costs by three-quarters of a point next year. In New York, I'm John Tucker, Bloomberg Radio.

8:43Time 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 Barr. Michael, good morning. Good morning, Karen. President Trump says he is looking into giving Ukraine more weapons after a recent conversation with President Volodymyr Zelensky. The president spoke to reporters on board Air Force One as he was traveling to Israel. We talked about the weapons they need, what kind of weapons. They need patriots very badly. They'd like to have tomahawks. Let's step up. They'd like to have tomahawks. We talked about that.

9:17President Trump added that he might tell Russia the U.S. could send the missiles if the conflict isn't resolved. Several people were killed and injured when gunfire erupted early Sunday morning in a crowded bar in St. Helena, South Carolina. At least four people were pronounced dead at the scene. The owner of the bar, Willie Terrell, was wiping away tears. I'm thankful. Thankful for everybody who walked away. You know, I'm thankful for everybody who is alive, who is safe. Officials say hundreds of people were inside at the time of the shooting. The search for the cause of a deadly blast at an explosives factory in Tennessee continues.

9:56At least 16 people died when the plant exploded Friday. The factory near Nonelli made supplies and explosives for the military. Families of the victims and neighbors tried to comfort each other during church services Sunday. This man was at a church service. It's going to take time, and it's going to take all of us banding together. but I know with this church family here and the other church families around, we'll come together and we'll help each other through it. To identify the victims, authorities have had to rely on DNA technology taking DNA samples from family members and then they're comparing that to DNA samples found at the scene.

10:39Global News 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr and this is Bloomberg. Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. The ALCS underway in Toronto. And Seattle's first pitch of the series was a home run hit by Toronto's George Springer. But the Blue Jays only had one hit the rest of the way. And the Mariners won game one, three to one. Sunday night football in Kansas City. The Chiefs beat the Lions 30-17. Patrick Mahomes threw three touchdown passes, ran for another. Big college football news.

11:11James Franklin fired midway through his 12th season as the coach at Penn State, who began the season ranked number two. They've lost their last three games. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going.

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12:30Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. A great and beautiful day, a new beginning. That was the message from President Trump as he arrived in Israel to celebrate the ceasefire in Gaza, which he says he is confident will hold. Everybody is happy, whether it's Jewish or Muslim or the Arab countries. Every country is dancing in the streets, and it's a point in time I don't think you'd ever see it again. That was President Trump aboard Air Force One on his way to Israel, where he is now due to address the Knesset.

13:12Joining us this morning from Tel Aviv is Bloomberg News Israel Bureau Chief Ethan Bronner. And Ethan, as we await those comments from President Trump, get us up to speed on where we are in the ceasefire, in the implementation. What is the latest? Good morning. Morning, Nathan. So, yes, the ceasefire has been holding for several days. 20 Israeli hostages, all of those who were alive still are out of captivity. And the seven that have already arrived in Israel, the 13 others are on their way, look, I think, healthier than many had feared. They're on their feet. They're speaking. And Israel is beginning the process of freeing some 2 ,000, just under 2 ,000 Palestinian prisoners.

13:56At the same time, President Trump is here. He's about to address the parliament, the Knesset in Jerusalem. He's just met with Prime Minister Netanyahu, and the announcement is now that in addition to all these Western and Arab countries and President Trump going to Egypt, that in fact Prime Minister Netanyahu is also going to go to that ceremony. It was not originally planned, and there's also going to be a Palestinian leader there, Mahmoud Abbas. So what's going to come of this? We shall have to see. While we wait to see, what are you watching for in terms of whether this ceasefire continues to hold?

14:35Well, the first thing to know is that the goal of Israel, and in theory both of the United States and all of those who declared, who signed on to the so-called New York Declaration at the UN General Assembly, is to remove Hamas from power in Gaza. But within minutes of the ceasefire beginning in Gaza, Hamas operatives, well-armed Kalashnikovs, took over the streets of Gaza City and of much of Gaza. And they are also now in the process of clashing with some of the clans that had said they were opposed to Hamas. So it feels like the ability to remove Hamas from power is not going to be simple. And that's going to be a major issue going forward.

15:17On his way to Israel aboard Air Force One, we heard President Trump say the war is over. What will you be watching for in terms of whether we get to that point where we can actually say this is more than just an open-ended ceasefire? Look, I think that either they're going to have to adjust their goals of what the war end means, that is to say, leave Hamas in some position relating to the Palestinian Authority or some multinational thing. We don't know. But from Israel's perspective until now, this has not been acceptable. Now, will it be possible that Israel will be told, just hold off for a while while we internationalize this, and we're going to rebuild the Gaza Strip and so on?

16:04Possibly. I mean, you know, one of the reasons Prime Minister Netanyahu did not want to go to Egypt is he did not want to take part in this kind of ceremonies always opposed internationalizing the conflict. But now that is changing with perhaps the help of President Trump. Maybe he's going to maybe Israel is going to change its mind. I don't know. The goal, of course, for Israel and the United States is to expand Israel's relations with its Arab neighbors to include one day Saudi Arabia. So all of those things are being balanced against what's going to happen in Gaza. And there's just so many unknowns, Nathan.

16:39It's impossible for me to tell you where we're headed. 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 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app, now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now.

17:18It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News 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.

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