Government Shutdown Ends; New Iran Negotiations

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 begin in Washington, where after just four days, the partial government shutdown is over. President Trump has signed his deal with Senate Democrats to reopen the government with less than two weeks of funding for the Department of Homeland Security. That's to allow more time to negotiate on Democrats' demands on new limits for immigration enforcement. President Trump says the new law won't stop his immigration agenda. It continues to fund deportation flights that are removing dangers of illegal aliens from our country.

1:46It continues historically successful efforts to reduce crime in our nation's capital. We have a very safe city right now. That was President Trump at the Oval Office bill signing Heard Live on Bloomberg Radio. Bloomberg's Eric Wasson reports lawmakers now have just nine days to come to an agreement on reining in ICE agents. Democrats have a long list of demands, including judicial warrants and taking masks off that Republicans are really not willing to entertain. And it's just very hard. The House would have to pass this very early next week for the Senate in order to take it up and get it done by February 13th.

2:19I don't see that happening. Bloomberg's Eric Wasson reports if they don't reach a deal by next Friday, FEMA and TSA employees could start to miss paychecks. ICE and Border Patrol would continue to receive funds under President Trump's one big beautiful tax and spending cut law. We now turn to geopolitics. Nathan, Bloomberg News has learned Iran is asking the U.S. to move diplomatic talks this Friday from Turkey to Oman. Sources say Tehran wants the talks to focus only on Iran's nuclear activities and not its support for proxy militias in the Middle East and its ballistic missiles. President Trump has threatened to strike Iran if it does not agree to a deal, which his administration has signaled must include Iran's missiles and militia support.

3:00Back in Washington, Karen, the dates are set for Bill and Hillary Clinton to testify about their ties to Jeffrey Epstein. The House Oversight Committee says the former president will appear before the panel on February 27th. The former secretary of state will testify the day before, February 26th. The full House had planned to hold a criminal contempt vote against the Clintons if they continue to defy subpoenas. President Trump commented on it in the Oval Office. So that takes care of Epstein as far as Trump is concerned. But you got a lot of Democrats out there that are very much involved with Epstein.

3:31But I'll be honest with you, you got to get back to running the country. President Trump again speaking in the Oval Office. The Oversight Committee says the Clintons have agreed to appear for transcribed, filmed depositions behind closed doors. The Clintons' attorneys say they want the hearings open to the public to address their concerns about fairness. We now turn to the markets, Nathan, where S &P futures are little changed, and gold is nearing$5 ,100 an ounce. Yesterday, tech stocks fell, led by the recent sell-off led by software stocks. And Bloomberg's John Tucker joins us with the latest.

4:04John? And Karen, the theme that seems to have gripped investors is that AI is going to be able to do much of the stuff that software companies do, making their products far less important. That was reinforced when the AI firm Anthropic released an AI tool that does legal work. It looks like a case of sell now and ask questions later. Now, add to that the fact that investors are growing impatient about returns for all that CapEx spending. Anika Gupta is at Wisdom Tree. Given the fact that now we're seeing CapEx intentions rise 60 to 80 percent, and they're rising off very high levels, we're now starting to see investors become a lot more discerning.

4:41Now, in this environment, Microsoft has been crushed down close to 3%. Yesterday, the software giant down close to 25 % from October. In New York, I'm John Tucker, Bloomberg Radio. John, thanks. Big tech earnings continue today when Alphabet reports this afternoon. We get a preview from Bloomberg's Tom Busby. Google's parent company, Alphabet, expected to post solid revenue and profit growth for last quarter, with its cloud computing division expected to get a big boost from the release of its latest Gemini AI models, which it also integrated into its Google search and its Chrome browser. Like rivals Meta and Microsoft, a big focus for investors, though, is all the spending it's done on AI infrastructure and efforts to power its data centers.

5:24Bloomberg Consensus calls for revenue of$111.4 billion on earnings per share of$2.65. Tom Busby, Bloomberg Radio. All right, Tom, thank you. Well, sticking with earnings, shares of advanced microdevices down more than 7 % in early trading. The chipmakers report topped analyst estimates, but its sales forecast underwhelmed investors. It's a sign that AMD is not making the kind of AI inroads that some investors anticipated. Another chipmaker is soaring in the pre-market, Karen. That's Silicon Labs. Those shares are up more than 32%. The Financial Times is reporting Silicon Labs is in talks to be acquired by Texas Instruments for around$7 billion.

6:04Nathan, Bloomberg News has learned NVIDIA is nearing a deal to invest$20 billion in OpenAI as part of its latest funding round. It marks the chip maker's single biggest investment in the chat GPT developer. OpenAI is looking to raise up to$100 billion in funding for a new round, with much of that coming from large tech firms. In Europe, Karen, shares of Novo Nordisk are plunging more than 17 percent. The pharma giant's warning of a steep decline in sales of its drugs. It says those sales will fall by as much as 13 percent. Novo blames increased competition and lower prices for its blockbuster weight loss medicines driven by a U.S.

6:40government push to bring down drug costs. We spoke with Novo CEO Mike Dustar. Of course, I can understand that negative numbers are not good news to the market. But once again, this is something that we have anticipated. And the obesity market is quite dynamic. And the reason the range has its numbers on each end is because so many things can happen. Elvinordisk CEO Mike Duestar says his company will start a new share buyback worth as much as$2.4 billion. Nathan, shares of UBS, they are down almost 5%. The Swiss lender reported stronger than expected earnings and also announced a$3 billion share buyback.

7:18But client inflows for its wealth management unit fell well short of expectations. We spoke earlier with CEO Sergio Armadi. The investment bank is growing well in the areas where we want to compete. Asset management is doing a good job. And the Swiss business is also holding up well, despite the low rates or negative rates almost environment. And we're making also good progress on the integration. 85 % of the Swiss clients of Credit Suisse have been migrated. We are delivering on our capital returns, so I can only be happy, to be honest. UBS CEO Sergio Armadi says the bank broadly maintained its previously signaled financial targets for the year.

8:00And a notable central bank move, Karen. Federal Reserve Governor Stephen Myron is stepping down from his post leading the White House's Council of Economic Advisors. Myron had been on unpaid leave from his White House role after President Trump nominated him to the Fed board in September on a temporary basis to fill a vacated seat. That drew criticism from Senate Democrats, who said Myron on the Fed undermined the central bank's credibility.

8:27Time 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. An ongoing search continues for the 84-year-old mother of today's show host, Savannah Guthrie. Nancy Guthrie was reported missing in Pima County, Arizona, Sunday. Investigators also found evidence showing there was a nighttime kidnapping. Police now trying to determine if alleged ransom notes are real. Pima County Sheriff Chris Nanno spoke to reporters. You were asked if there was any ransom and you didn't say no.

9:02You said we're following all leads. Does that mean a ransom has come in? We're following all leads we have. That's all I can tell you. We've got hundreds of leads. Sheriff Nano says Nancy Guthrie relies on medication that she has to take daily. The Trump administration has been sued again, this time by the states of New York and New Jersey, over its cutoff of financing for the$16 billion gateway rail tunnel under the Hudson River. A day after the public commission overseeing the project filed its suit, the states allege in a complaint Tuesday that the suspension of funds for the Hudson Tunnel Project is a politically motivated attempt to punish and coerce those with whom the president disagrees.

9:45The NFL says there's no planned ice enforcement at Super Bowl 60 in Santa Clara, California. NFL's chief security officer, Kathy Lanier. The federal presence here is consistent with past Super Bowls and other sporting events like what you will see around the World Cup and the Olympics as well. There are no planned ICE or immigration enforcement operations that are scheduled around the Super Bowl or any of the Super Bowl-related events. NFL's Chief Security Officer Kathy Lanier, the mayor of San Jose next door to Santa Clara, says he too has been told by federal agencies there will be no immigration enforcement that could disrupt Super Bowl events.

10:26A Doberman Pinscher named Penny won best in show in the 150th Westminster Kennel Club Dog Show last night. The four-year-old beat out six other finalists at the show at New York's Madison Square Garden. Global 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. A bunch of trades ahead of tomorrow's NBA trade deadline. James Harden goes from the L.A. Clippers to Cleveland. For Darius Garland, a swap of point guards. Veteran Jaron Jackson goes from Memphis to Utah.

11:02He was with the Grizzlies for eight years. Point guard Mike Conley moves from Minnesota to Chicago. And center Nikola Vucevic goes from Chicago to Boston. U.S. flag bearers at Friday's opening ceremonies will be Bob Slitter, Frank Del Duca, and speed skater Aaron Jackson. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

11:52tech journalist Cara Swisher. And the tech industry is running wild. You know, they've gotten what they wanted and they've seen a huge run up in their stock prices. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussain Show from Bloomberg Weekend, wherever you get your podcasts. You certainly ask interesting questions.

12:25Coast 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. The partial government shutdown may be over at four days, but an even tougher fight remains on Capitol Hill over funds for immigration enforcement. House Speaker Mike Johnson says he's ready for it. They say they want a real negotiation with President Trump and Republicans over immigration enforcement policy, and we are happy to have that debate. And that was House Speaker Mike Johnson on Capitol Hill. For more, we're joined by Bloomberg D.C.

13:00breaking news editor Alexander Pearson. Alex, how big a fight are lawmakers in for now over the next nine days? Good morning. Good morning, Nathan. Yeah, the fight is probably going to be a very big one. the gap between the Republicans and the White House on the one hand and Democrats on the other is still very large. So despite the fact that they came to this agreement to reopen parts of the government that were shut down, there is only now nine days to come to an agreement on restrictions that Democrats have demanded on immigration reinforcement. The problem is that Republicans are not accepting many of those demands.

13:38Those include things like immigration enforcement officers not wearing masks, wearing identification, stopping roving operations in cities. And for the most part, Republicans don't want to agree to any of these. The Democrats, for their part, say that they are not going to accept anything that does not meet at least some of those demands. So it's very likely that next week we could be seeing another partial shutdown that would affect the Department of Homeland Security. How would that partial shutdown affect the Department of Homeland Security specifically? Because we understand that even if there were a shutdown, ICE and Border Patrol are still funded under the tax and spending cut law, right?

14:22Yeah, that's right. So there's unlikely to be any major disruptions to ICE or Border Patrol because of the funding that was passed last year. Those operations could still tap into that funding for some time. What would be affected very quickly would be TSA and also FEMA. So people working in those services would miss a paycheck if there was no funding agreement by the end of next week. And that, of course, could be quite disruptive, particularly for anyone who's planning to travel to fly. We could see some major news later on this month when Bill and Hillary Clinton testify about their Jeffrey Epstein ties to the House Oversight Committee.

15:06a subpoena against a former president is almost unheard of, Alex. Yeah, that's right. It has happened before, but it's an extremely rare event. And this is obviously going to be a very high-profile hearing. At the moment, it is said to be behind closed doors. It will be filmed and recorded, but we won't see it live. That, of course, could still change, but that's how it's being done right now. And certainly, yeah, It's a very significant event, given that we've not seen for many decades a former president testifying to a congressional committee. Why the focus on the Clinton specifically by the House Oversight Panel, as far as we understand?

15:48Well, the focus is really their ties to Jeffrey Epstein. Certainly, we know from the files that were released by the Department of Justice and also prior to that, that there were close contacts between Bill Clinton and Epstein in previous decades. For his part, the former president says he was not aware of any crimes that Epstein committed and was not involved in any wrongdoing. But the House Oversight Committee will want to really check what those ties were and how that might have affected federal enforcement in terms of investigating Epstein and his ties to various parts of the government. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington.

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17:11I'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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