Global Markets Extend Selloff; Saudi Arabia's MBS to Visit White House

0:00Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London with 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. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens It's smart, calm and to the point And it fits into your morning You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris On Apple, Spotify, YouTube or wherever you get your podcasts

1:02Bloomberg 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 are in the midst of a global market sell-off this morning. And if the futures on Wall Street are any indication, the S &P 500 is on track for its fourth straight day of losses. That would be the index's longest losing streak since August. In Asia, the Nikkei 225 stock average closed down 3.2%. Paul Dobson is a Bloomberg Markets executive editor. We sort of know a few of the risks that are hanging over markets at the moment. Those about the valuation or the overvaluation potentially of the technology sector and particularly the AI companies which have had such a strong performance this year.

1:51And their very extensive investment plans and whether there's appetite to fund that. That's one thing that's worrying people at the moment. On top of that, there's also what the Federal Reserve policy is going to look like. They seem to have been giving us the signal they may not cut interest rates in December, which the market had been hoping for and expecting. And now Bloomberg's Paul Dobson says the S &P 500 is about 3 % below its October peak. Even harder hit than equities, Nathan, has been Bitcoin. It's wiped out all of its gains this year and earlier this morning fell below 90 ,000. Mike McGlone covers cryptocurrencies for Bloomberg Intelligence.

2:28So I'll give you a good indication. I think it's going to go lower. The Bloomberg Galaxy Crypto Index is down 10 % on the year. Now, about a third of that's Bitcoin. It's the rest of the space, I think, is finally realizing it's unlimited supply, massive hubris, and just speculative accesses look like they're just getting purred. And Bloomberg Intelligence senior commodities strategist Mike McGlone there checking Bitcoin right now. It is trading at$91 ,300. That's down half percent. Another worry for investors, Karen. What we get from NVIDIA earnings, that's coming up tomorrow. Bloomberg's Charlie Pellett continues our global team coverage of these markets.

3:06NVIDIA's report will be closely watched as investors are uneasy over high AI valuations. Cameron Dawson is chief investment officer at New Edge Wealth. NVIDIA has shown a very consistent ability to jump over that high bar. Earnings are expected to grow 60 % this quarter, and this is the third quarter 2026 earnings for them on a fiscal basis. So NVIDIA is very much living in the future. The chipmaker is widely expected to deliver another earnings beat in New York. Charlie Pellett, Bloomberg Radio. Meanwhile, Nathan, notices of impending mass layoffs by U.S. companies surged in October to among the highest levels on record.

3:46According to a tally by Federal Reserve Bank of Cleveland researchers, about 39 ,000 Americans were given advance notice of losing their job. In monthly data from 2006, that number has only ever been higher in 2008, 2009, 2020, and May 2025. And Karen Fed Governor Christopher Waller is repeating his view that the central bank should lower interest rates when policymakers meet next month. Waller spoke in London. My focus is on the labor market, and after months of weakening, it is unlikely that the September jobs report later this week or any other data that's going to come out in the next few weeks is going to change my view that another cut is in order.

4:28Christopher Waller was appointed to the Fed's Board of Governors by President Trump in 2020. He is one of five candidates that the White House is considering for the Fed chair position when Jay Powell's term expires in May. Well, on Capitol Hill, Nathan, the focus is about to turn to the Jeffrey Epstein files. The House is set to vote today on a bill that would force the Justice Department to release its documents on the late sex offender. Speaker Mike Johnson had resisted bringing the bill to the House floor for months, but a discharge petition forced his hand. And now President Trump says House Republicans should vote for it.

5:01Democratic Congressman Ro Khanna is one of the bill's sponsors, and he says today's vote could be overwhelming. We may get to a unanimous vote. Look, this is the most horrific, disgusting scandal in American history. You had Epstein with basically a rape violent, thousand plus victims and rich and powerful men who raped underage girls or covered it up and haven't had accountability. Democrat Ro Khanna spoke to ABC News. Meantime, the Epstein records that have been released are forcing a reckoning. Former Treasury Secretary Larry Summers says he's stepping back from his public commitments after emails showed he'd been in correspondence with Epstein.

5:41Summers is a paid Bloomberg TV contributor and a professor at Harvard University. He says he'll continue to teach but will step away from public duties to repair relationships with the people closest to him. At the White House, Karen, President Trump is getting ready for a visit from Saudi Crown Prince Mohammed bin Salman. The president says he's ready to offer the Saudi leader something he's wanted for years. F-35 fighter jets. They've been a great ally. They've got to like us very much. Look at the Iran situation, what we did. President Trump spoke there from the Oval Office. Former Vice President Mike Pence says the F-35 is America's most advanced fighter jet.

6:18He notes Saudi Arabia has a close relationship with China. I have concerns about the sale of F-35s to Saudi Arabia or any nation that could not assure the United States that technology and the great advancements that we made with the F-35 don't fall into the hands of nations that are hostile to our interests. Former Vice President Mike Pence tells Bloomberg's critic Gupta he hopes today's visit with the crown prince brings Saudi Arabia closer to normalizing ties with Israel under the Abraham Accords. And Nathan, President Trump said his administration is making progress on lowering prices as he faces new political headwinds in a speech to franchise owners from McDonald's.

7:00He thanked the fast food giant for offering cheaper options. I hear you're recommitting to the affordable options of Americans that we really know and love, all of the items that we love. And I hear that McDonald's is playing a very big role in that. We're getting prices down for this country. And McDonald's and its franchisees brought back extra value meals at$5 and$8 price points.

7:26Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Monica Ricks. Monica, good morning. Good morning, Karen. The United Nations has overwhelmingly approved the Trump administration's plan for the future of Gaza. The draft resolution has been adopted as Resolution 2803. Russia and China abstain from the vote, but the approval is a crucial step now that provides international support for U.S. efforts to rebuild the war-ravaged region, in part by establishing a board of peace that would run Gaza over the next couple of years.

8:00Israeli officials have criticized the resolution since it also offers a pathway to Palestinian statehood. President Trump says he hasn't ruled out sending U.S. troops to Venezuela following an announcement from the Trump administration that it would designate a Venezuelan cartel as a foreign terrorist organization. President Nicolás Maduro is pleading for peace. Meantime, Trump is urging more foreigners now to apply for visas to watch next year's World Cup. This will be a once-in-a-lifetime opportunity to showcase the greatness of American world-class athletic competition as we celebrate our nation's 250th year.

8:37The World Cup will also be an incredibly significant economic opportunity for countless American workers and businesses. The massive tournament will feature more than 100 matches in the U.S., Canada, and Mexico next summer. And federal prosecutors are now being forced to turn over all grand jury material to former FBI Director James Comey's defense team over a, quote, disturbing pattern of profound investigative missteps in the handling of the case. Comey's accused of making false statements and obstructing a congressional proceeding relating to his testimony before the Senate Judiciary Committee back in 2020.

9:12Both sides expected in court tomorrow in Virginia. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Monica Ricks and this is Bloomberg. Karen? Thanks, Monica. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. Mother Night Football was in Las Vegas. A three-touchdown second quarter for the Cowboys. They beat the Raiders 33-16. Dak Prescott finished with four touchdown passes to four different receivers. Aaron Rodgers has an injury to his left wrist. He's 50-50 to play for the Steelers Sunday against the Vikings. The Atlanta quarterback Michael Penix has a knee injury.

9:47He's likely done for the season. James Franklin, surprisingly fired in midseason by Penn State, has landed as the new coach at Virginia Tech. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. This is Caroline Hyde. And I'm Ed Ludlow, inviting you to join us for Bloomberg Tech, a daily podcast focusing exclusively on technology, innovation and the future of business. Every weekday, we bring you the top headlines from the world's biggest tech companies. From finance to defence, AI to entertainment and from startups to the magnificent seven. We highlight the latest stories of the people and companies pushing the tech sector to new frontiers and the politics that shape global tech markets.

10:31We do this all every weekday, then bring you the most important conversations and analysis in our podcast. Search for Bloomberg Tech on YouTube, Apple, Spotify or anywhere else you listen. Join us every afternoon on your commute home and stay ahead of the tech news cycle. That's the Bloomberg Tech Podcast. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. Subscribe today wherever you get your podcasts.

11:01on SiriusXM and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. Not such a good morning if you're long equities. Markets are under pressure once again this morning on concerns around AI valuations, the Federal Reserve outlook, and a sell-off in Bitcoin. Grace Peters, co-head of Global Investment Strategy at J.P. Morgan Private Bank, says she'd sum up her outlook for next year in three words, pressure but promise. Pressure from AI. Are we in a bubble? Questions still around the meanings of global fragmentation and inflation as well.

11:38But, you know, as the title suggests, we do think promise is going to win out. That's Grace Peters of JPMorgan Private Bank. For more, we're joined by Bloomberg Markets reporter Valerie Teitel. So that's the long-term outlook, Valerie. But this morning, it feels like pressure is front and center. Good morning. Hey, good morning, Nathan. Yeah, S &P futures are in the red for a fourth straight session in a row. We're continuing to see underperformance in these tech shares. NVIDIA was one of the worst decliners on the NASDAQ yesterday. And the NASDAQ, frankly, we really want to see these tech shares at least find some balance, find some ground somewhere before those earnings release from NVIDIA on Wednesday night.

12:18We know that can really be something that could set the tone for tech stocks into year end. And as Grace Peters was pointing out there, you don't really want to end your end on a wobbly foot because come January, when these slates are wiped clean for the year, investors really begin to rethink their allocations. And possibly the course is growing for those to rethink their allocations away from U.S. big tech. Now, what really started the weakness yesterday was another hyperscaler approaching the bond market. We had Amazon announcing a$15 billion bond offering, raising debt through investment-grade credit.

12:55This has been a theme of late now that these hyperscalers have been needing to fund their next stage of their build-out when it comes to data centers using debt. And that does tie this tech story in with the broader narrative when it comes to the U.S. Central Bank, to the Federal Reserve. if they're needing to use debt financing in order to scale up, they are going to be dependent on whether the Federal Reserve has been hawkish or dovish. And lately, the Federal Reserve has been hawkish, putting that December cut wildly in doubt. We're now down to around 40 % chance of a Federal Reserve cut in December, their last meeting of 2025.

13:31Yeah, it's adding to all this debate about whether we're in an AI bubble right now. From the analysts and strategists that you've been speaking to, Valerie, Is it a feeling that the bubble is popping or that some of the air is just getting let out? Look, I think that all really comes down to NVIDIA and what we hear on Wednesday night, frankly. There has been a lot of two-way discussion about whether this huge investment that we've seen into data centers is something that's going to pay off. Or is it going to be something that's going to have to mark down from PARD? Now, it goes without saying that the investment in data centers this year has been something that has held up GDP growth broadly for the U.S.

14:09economy. We've been hearing from the likes of other CEOs across the world saying that data center spending and investment is still holding up into the fourth quarter. So whether or not it will pose another boom to GDP in 2026, or perhaps will investors start to shy away from this investment and perhaps cause this AI bubble to burst, I think time is, we're going to need some time on our hands to tell. But I think what the equity market is telling us right now is that there's a lot of jitters going into NVIDIA's release. Adding to those jitters, some technical signals as well with the S &P 500 falling below its 50-day moving average for the first time in months.

14:47We've been talking about how we could be on track for the four-day losing streak here for the S &P 500. What's the technical signal that we're getting? Well, look, yesterday, the S &P 500, as you mentioned, did close below the 50-day moving average. It's been something that it's been battling with, though, throughout this equity weakness for the month of November. It's whether, Nathan, we have a sustained break lower from that. Then that will be a key tell that momentum is on a back foot. And essentially, the market needs more good news outweighing anything of just being the status quo in order to rally back.

15:23But that being said, you know, we do have to frame this in the fact that the Nasdaq is still up 17 percent on the year. The broader S &P 500 is up some 12 and a half percent. So it has still been a good year for the equity market. It's just the last few weeks have been a struggle. And when it comes to breaking news and gaming out what the Fed could do, we are starting to get a trickle of official economic data. We just got the first round of weekly jobless claims from a month ago. What does that tell us? Yeah, so this is a very odd one. The Department of Labor, which runs the Bureau of Labor Statistics, posted figures for jobless claims for the week ending October 18th.

16:02Now, this does seem like to some a random week in October that they were publishing figures for. However, it is the survey week for nonfarm payrolls. That is their monthly survey of how many jobs the U.S. economy has added alongside the unemployment rate. So perhaps this is telling us that the BLS is getting that October jobs report in line. However, what the jobless claims figures did show us, that the jobless claims were at 232k that week in October. That is broadly in line with what city economists had penciled in using statewide level data. And that gave some solace to the market that economists who have been estimating essentially seasonally adjusted jobless claims from the non-seasonally adjusted state level figures have been broadly in line.

16:48that did give some calm to the market when that was released earlier this morning. 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.

17:26And don't forget to subscribe to Bloomberg News Now. It'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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