Greenland Talks Loom Over Davos; Bessent Says Fed Pick Could Come as Soon as Next Week

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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 with the latest from the World Economic Forum in Davos, Switzerland. President Trump's push to take control of Greenland is already the talk of the annual gathering of global elites. The president says he has agreed to a meeting on the issue after speaking with NATO Secretary General Mark Rutte. We'll be talking about it with the various people. We've had tremendous success and I've done more for NATO than anybody else. The president spoke to reporters in Miami.

1:42Later, he posted a screenshot on social media of a text message he received, says he received from the NATO secretary general, saying that he was committed to finding a way forward on Greenland. Earlier, President Trump linked his claims to the Danish territory to not receiving the Nobel Peace Prize in a letter to Norway's prime minister. The Norwegian government does not decide the Nobel winner. While Nathan Treasury Secretary Scott Bessent is urging European allies to remain calm over President Trump's Greenland claims, he spoke this morning from the sidelines of the World Economic Forum. Sit back, relax.

2:16I am confident that the leaders will not escalate and that this will work out in a manner that ends up in a very good place for all, for national security, for the U.S. and for Europe. Secretary Besant is comparing the uproar to the political blowback over President Trump's tariff announcements last April. French President Emmanuel Macron has talked about unleashing the European Union's toughest trade tools in response to the Greenland threats, though German Chancellor Friedrich Merz has batted that down. Secretary Besant also says the idea of Europe selling U.S. treasuries in response to the president's Greenland claims is a false narrative.

2:56Along with the Greenland push, Karen, President Trump is also bringing his affordability agenda to Davos. He has pitched his populist economic platform in battleground states in recent weeks. Now he is targeting a different audience, the global elite gathered in the Swiss ski village. President Trump has vowed to unveil details of a sprawling affordability pitch, which has landed Wall Street banks, tech companies and home builders in his crosshairs. Plans to do it during a speech tomorrow at the World Economic Forum. Nathan, the Trump Davos speech comes as a new study shows his tariffs are paid almost entirely by Americans.

3:31We get more this morning from Bloomberg's John Tucker. And John, good morning. And good morning, Karen. Yeah, this study finds that only about 4 % of the tariff burden is shouldered by foreign firms, with a near-complete pass-through of 96 % to U.S. buyers that pay the levies and then must either absorb them or raise selling prices. This is the Keele Institute for World Economy. It says the$200 billion surge in customs revenue represents$200 billion extracted from American businesses and households. that the tariff functions not as a tax on foreign producers, but as a consumption tax on Americans.

4:08Based on shipment data, this covers 25 million transactions worth about$4 trillion. The kill study runs completely counter to the Trump administration's argument that the trading partners pay tariffs. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. President Trump is confirming he's invited Russian President Vladimir Putin to join his proposed Board of Peace for Gaza. Here is the president speaking again to reporters in Florida. Did you invite President Putin to join the... Yes, he's one of the people. These are world leaders. And the answer is yes. And this morning, China confirmed it also received an invitation to join the board, though there's no word whether it will accept.

4:48One world leader who is rejecting the invitation is Emmanuel Macron. And President Trump is taking a swipe at the French president. Well, nobody wants him because he's going to be out of office very soon. So, you know, that's all right. What I'll do is if they feel like Costo, I'll put a 200 percent tariff on his wines and champagnes and he'll join. But he doesn't have to join. President Trump also published a text message he says came from Macron in which he invited the president to have dinner in Paris on Thursday. A draft charter for the proposed Board of Peace seen by Bloomberg says that President Trump would serve as its inaugural chairman and have authority over membership decisions.

5:26The Trump administration is asking countries that want a permanent spot on the body to contribute at least a billion dollars. Nathan, Treasury Secretary Scott Besson says President Trump is coming close to announcing his pick for the next Federal Reserve chair. Besson spoke earlier today in Davos. We have four fantastic candidates. It will be up to the president, and I would imagine that he will have an announcement maybe as early as next week. Treasury Secretary Scott Besson speaking at Davos. BlackRock's Rick Reeder, National Economic Council Director Kevin Hassett, Fed Governor Christopher Waller, and former Governor Kevin Warsh are the final contenders to replace Jay Powell as Fed Chair.

6:06Well, this morning, Karen, geopolitical concerns are taking their toll on stocks as we kick off the holiday shortened trading week. And Nasdaq futures are hardest hit, down 2.2 percent. A slump in Japanese bonds is deepening. It's sending yields there to records. Investors are giving a thumbs down to Prime Minister Sana 'a Takeuchi's election pitch to cut taxes on food. We do have a deal in the drug industry this morning. Nathan, GSK has agreed to buy San Francisco-based biotech company Rappd Therapeutics in a deal valued at$2.2 billion. Rappd, which develops treatments for patients with inflammatory and immunological diseases, is up 63.5 % in early trading.

6:47And as far as company earnings go, Karen, we get more of those this afternoon from Netflix leading the way. Those results come as the streaming giant faces a fierce takeover battle for Warner Brothers' discovery. Geetha Ranganathan covers Netflix for Bloomberg Intelligence. I hope the focus really turns. And this is a distraction, you know, from this whole drama that we've seen. But fundamentals wise, you're absolutely right. The company has never been in a stronger situation. We think they will absolutely deliver on their revenue growth expectations of about 17 percent. Strong operating margin, strong free cash flow.

7:23They're expecting about nine billion dollars for the full year. That's Keith Ranganathan of Bloomberg Intelligence. Netflix shares are down 45 % from their all-time high. And finally, Nathan, it might cost you a little less money if you're in the market for an engagement ring. Bloomberg News has learned Beers is cutting its official diamond prices for the first time in more than a year. The diamond industry has been beset by a crisis amid a pullback in Chinese luxury spending and the rising popularity of synthetic stones.

7:57Time 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. It is cold this morning. Bloomberg meteorologist Craig Allen has the latest. It's an open door to the Arctic, and the bitter cold will come in bursts right through the next five to seven days. Each outbreak getting colder, and the daytime highs in the major I-95 cities from New England to New York City to D.C., only climbing into the 20s nights in the teens and wind chills below zero in some suburbs. Bloomberg meteorologist Craig Allen.

8:31It should remain chilly through the rest of the week across the Midwest and Northeast. Snow crippled travel nationwide over the long MLK weekend. In Michigan, more than 100 vehicles piled up on an interstate outside Grand Rapids Monday. Captain Jake Sparks of the Ottawa County Sheriff's Office says there are some injuries. I'm told that most of them are minor injuries at this time. So I don't believe that any of them are terribly serious or life-threatening. I know that there have been no fatalities reported yet, so that's one positive. Captain Jake Sparks is advising people to stay home until the cleanup is complete.

9:08It's a big day in New Jersey. Mikey Sherrill is set to be sworn in today as the state's first female Democratic governor. Sherrill will take over for Governor Phil Murphy, the former Navy pilot. and Congresswoman says we are going to very quickly show that we have a new agenda here in New Jersey. A Massachusetts police station appears to be the target of an intentional attack. It happened in Shrewsbury, about 45 minutes west of Boston yesterday. Shrewsbury Police Chief Kevin Anderson described what happened after the driver of a 2022 black BMW SUV used it as a battering ram to break through the front doors.

9:47The vehicle actually went through the front door and actually went into dispatch. So it went through the lobby and into dispatch. And there were three dispatchers working at the time. And obviously they're very shooken up. Chief Anderson, 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. The Indiana Hoosiers capped an amazing, perfect, 16-0. season, winning college football's national championship over Miami in Miami, 27-21.

10:24The Hoosiers never trailed. NFL coaching, hirings and firings. Jeff Halfley, the Green Bay defensive coordinator, is the new head coach of the Miami Dolphins. Robert Sala, the defensive coordinator of the 49ers, has a deal to become the new coach of the Tennessee Titans. The Buffalo Bills now need a new coach, surprisingly, that they fired Sean McDermott. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy.

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12:44Coast 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. Between his desire to take control of Greenland and his push to form a new board for peace in Gaza and potentially the world. President Trump is promising this year's World Economic Forum will be, as he put it, a very interesting Davos. I think I have a lot of messages for Davos, but the primary message is how well the United States is doing. That was President Trump in Miami before he heads to the Swiss Alps later today.

13:19Bloomberg Surveillance Host Lisa Abramowitz is already there, anchoring our coverage of the World Economic Forum. And very pleased to say that Lisa is here with us now. Great to have you on Daybreak, Lisa, head of the World Economic Forum. The theme this year, a spirit of dialogue. What is the spirit of dialogue with all these geopolitical risks preceding the forum? Good morning. Good morning, Nathan, and thank you for having me. I want to just first say that the spirit of dialogue is quite an ironic name, considering the fact that this is a Davos about fissures in the global order and a rearranging in some of the alliances.

13:55And That really is one of the hot topics. Greenland, obviously, is sucking a lot of oxygen out of the room. And you have some 400 world leaders here, a record getting together. And Donald Trump is very much on the forefront of their mind. So, yes, perhaps President Trump will talk about housing affordability and the strength of the United States. But really, people want to understand what the commitment is to NATO, how much the U.S. is serious about taking Greenland and what exactly it's willing to do to get there, and just how much of an obstacle the Euro region is planning to be, as well as some of the other allies like Canada as well.

14:33So very much a focus in geopolitics. What's interesting, Nathan, I'll just point this out. If you talk to CEOs, they will talk about optimism. They will talk about artificial intelligence. They'll talk about a consumer that's strong. They will avoid at all costs weighing in on any of these bigger geopolitical issues other than just saying there could be volatility ahead. Well, can they avoid these geopolitical issues when they are already seeming to overshadow the events that are going to be coming in the next few days? They have found very creative ways to do so. I mean, they could talk about resilience.

15:04They could talk about how they have managed through either the supply chain disruptions, the pandemic, or even just the post-Liberation Day tariffs and how they were passed through or not. People are clearly more concerned in private conversations. Let's be honest. There is clearly a sense that the rules of the road are shifting, and it's unclear how permanent some of these rules are. I'll give you one anecdote. I was speaking to a leader of a business yesterday who was saying, for us, we just want to know what the rules are. And we want them to be consistent in different regions so that we know how to plan.

15:39Because if they're shifting around at this speed, adapting is very difficult. So that's what they'll say privately. Publicly, they'll just say we can't know what we don't know. But right now we're on good footing and et cetera, et cetera. So that's kind of how people are navigating this. Well, publicly, we have already heard from Treasury Secretary Scott Besson sort of appealing for calm from allies, comparing it to the sort of the uproar before or after the the tariff announcement back in April. How is the Treasury Secretary's message being received and how could that color what we hear from the president later on this week?

16:11Well, I think that a lot of people have heard this type of message before. It was also interesting that Treasury Secretary Scott Besson talked about how any kind of sales of treasuries seems preposterous in the wake of some of these fears and this idea that you saw a similar shift after Liberation Day last April. That said, there clearly is a sense, as I was just speaking to the foreign minister of Canada a bit ago earlier this morning, and she was saying, look, the world order has changed. It is changing. And this comes after Canada just went to China to feel a trade deal with that nation. So there is a feeling that trade alliances are shifting.

16:49Alliances in general are more in question. There is a sense that there are certain players that are a bit hamstrung, right? They don't have an option other than to work things out with the United States, Canada among those, considering the fact that we're neighbors. So these are some of the issues that are on the table, but clearly there is a sense of unease that is permeating the entire event. And this is a big event and is more heavily fortified than I've ever seen it before with lines that look like they're going into an airport. So very much it is present in people's minds. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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18:07I'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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