Israeli Cabinet Backs Gaza Deal; New York AG James Indicted

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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 with the latest developments in the Middle East. Israel's government has approved a ceasefire deal with Hamas that will include releasing thousands of Palestinian prisoners in exchange for any remaining hostages in Gaza. Stuart Livingston-Wallace heads Bloomberg's Middle East coverage. It all seems to be going reasonably smoothly. It went to the Israeli cabinet last night, was approved. So we're now in a sort of a 24-hour initial phase where the IDF, that is the Israeli army, will start withdrawing from its current positions to sort of a pre-agreed line.

1:54I mean, they will still be inside Gaza, but it's going to be over a significantly smaller amount of territory. So basically, we're looking at the next four days. It's going to unfold. And again, this is very much phase one. And then in terms of the next hurdles, I mean, I think there's a long way to go. And, you know, we should be under no illusion about how difficult some of those questions are, notably on the question of the, you know, the complete disarmament of Hamas, the future governance of the Gaza Strip, and perhaps most importantly, the reconstruction of the Gaza Strip. Bloomberg's Stuart Livingston-Wallace says President Trump will travel to Israel, he says, to be on hand for the release of the hostages.

2:32And we have some breaking news here, Nathan. Venezuelan opposition leader Maria Corina Machado has won the 2025 Nobel Peace Prize. And, of course, we'll be watching this morning for any reaction from President Trump, who has waged an aggressive lobbying campaign ahead of today's announcement. And again, that's just crossing the Bloomberg. All right, Karen, thank you for that. Now to the latest on the federal government shutdown into day 10 of the stalemate in Washington. Both sides continue to blame each other for the impasse. And President Trump is doubling down on threats to take advantage of it.

3:05We'll be cutting some very popular Democrat programs that aren't popular with Republicans, frankly, because that's the way it works. They wanted to do this. So we'll get a little taste of their own medicine. President Trump spoke at a cabinet meeting at the White House, heard live on Bloomberg Radio. but Republicans may be feeling political heat as well. House Speaker Mike Johnson took questions about the shutdown on C-SPAN. One caller on the Republican side said her husband serves at Fort Belvoir, Virginia, and their medically sensitive children might have to go without medication if they miss a paycheck.

3:37You could stop this and you could be the one that could say military is getting paid. And I think that it is awful. And the audacity of someone who makes six figures a year to do this to military families is insane. Speaker Johnson responded to that caller saying the Democrats are the ones keeping her from getting a check. Well, Nathan, the Trump White House has decided there's a group of federal staffers they can't do without during the shutdown and the people who put together the economic data are the ones they're talking about. Let's get more from Bloomberg's John Tucker. John, good morning.

4:10Good morning, Karen. The White House Office of management and budget has directed the Bureau of Labor Statistics to recall staff. They need them to assemble the September Consumer Price Index. That is the report that determines the size of next year's Social Security checks. Dozens of economists and IT specialists are typically involved, so it's still unlikely this report's going to be released by its original publication date of October 15th. You'll recall President Trump fired the BLS commissioner in August after the release of a weaker-than-expected jobs report he didn't like. In New York, I'm John Tucker, Bloomberg Radio.

4:45All right, John, thank you. We have this red headline crossing the Bloomberg terminal. China is probing Qualcomm for suspected violations of the country's anti-monopoly law. That's according to a statement from Beijing's state administration for market regulation. Qualcomm shares in the pre-market down 3.25%. Well, Nathan, the Justice Department is still working through the shutdown, and it's bringing charges against another one of President Trump's perceived political enemies. New York Attorney General Letitia James has been indicted on counts of bank fraud and making false statements to a financial institution.

5:17The grand jury indictment stems from a property James purchased in Norfolk, Virginia in 2020. It's the second indictment brought by U.S. Attorney Lindsay Halligan, who was recently appointed by Trump and also secured charges against former FBI Director James Comey. Attorney General James says she'll fight the charges. This is nothing more than a continuation of the president's desperate weaponization of our justice system. He is forcing federal law enforcement agencies to do his bidding, all because I did my job as the New York State Attorney General. Attorney General Letitia James posted that statement on X.

5:54She campaigned on a promise to investigate President Trump and won a civil case against him and his company in 2022. Her first appearance in federal court in Virginia is set for October 24. Turning overseas now, Karen, French President Emmanuel Macron is expected to pick a new prime minister by this evening after the resignation of Sébastien Le Corneau earlier this week. Richard Bravo leads Bloomberg's coverage of Western European government. I don't think we're any closer to knowing exactly who he will pick to be the next prime minister. But the important thing to focus on is the fact that he's naming a prime minister at all.

6:29Earlier this week, it was increasingly looking like Macron would call another snap election. that would have meant even more political chaos and financial instability. So even though it's not clear who exactly Macron could name, and the list is very long and it does run the political gamut, most see this as the least bad option. Bloomberg's Richard Bravo reports France's caretaker finance minister, Roland Lascour, says the country's on course to meet its budget promises to the European Union even after outgoing Premier Le Corneau indicated there will be less fiscal consolidation next year than previously planned.

7:05Well, in Asia, Nathan, Japan's decade-old ruling coalition has collapsed. It comes after talks between liberal Democratic Party chiefs tonight, Kaishi, and junior partner Kometo leader Tetsuo Saito ended without agreement. The collapse was due to a disagreement over the needs for the LDP to regulate political donations. The coalition has maintained political stability for LDP administrations for most of the past quarter century. And looking at the yen, it's at 152.70 against the dollar. Back to this country, Karen, there's a warning from Ray Dalio. The Bridgewater Associates founder says U.S. government debt is rising too quickly, creating a climate, he says, is very much analogous to the years before World War II.

7:46Dalio spoke with Bloomberg's Francine Lacroix. We're in wars, okay? There is a financial money war, there's a technology war, there's geopolitical wars and there are more military wars. And so we have a civil war of some sort, which is developing in the United States and elsewhere, where there are irreconcilable differences. Bridgewater founder Ray Dalio has long cautioned of the risks of spiraling U.S. debt. Last month, he said it poses a threat to the monetary order. And Nathan Paramount Skydance chief executive David Ellison, who is reportedly weighing a merger with Warner Brothers Discovery says he sees a lot of opportunity for consideration in the industry.

8:29We spoke with him at the Bloomberg Screen Time Conference in Los Angeles. First and foremost, what's good for the talent community, what's good for our shareholders in value creation, and what's good for basically storytelling at large. And so from our standpoint, whether we were approached any acquisition, and I actually do think there's a lot of options out there in terms of what actually might be actionable in the near future, We would approach that through the lens of wanting to make more, not less. And David Ellison took over Paramount, the parent of CBS, Nickelodeon, MTV and the namesake movie studio in August after completing an eight billion dollar merger with his film production company, Skydance Media.

9:08Get that full conversation and all of the biggest names we spoke with at screen time on the Bloomberg podcast channel on YouTube.

9:18Time 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. National Guard troops are expected to begin patrolling in Memphis. The patrols are expected today after a federal judge in Illinois ruled Thursday to block a deployment in the Chicago area for at least two weeks. Illinois Attorney General Kwame Rawls says the deployment was never legally justifiable. This is an important decision not just for the state of Illinois, but for the entire country. September 12th was the weekend ICE operations moved into Chicago ahead of Mexican Independence Day celebrations.

10:00Virginia gubernatorial candidates, Democrat Abigail Spanberger and Republican Winsome Earl Sears, clashed over issues in a debate at Norfolk State University. The debate also focused heavily on a text message scandal involving Democratic nominee for Attorney General Jay Jones, with Earl Sears pressing Spanberger to demand Jones suspend his campaign. Really what I want to ask this first question is, Abigail, when are you going to take Jay Jones and say to him, you must leave the race? He has said that he wants to murder his political opponent, and not only that, but his political opponent's children, two and five years old.

10:43Earlier, Spanberger condemned Jones' remarks, but stopped short of calling for him to exit the race. As we move forward, the voters now have this information, information that was withheld for them. You're running presumably for political reasons. But the voters now have the information, and it is up to voters to make an individual choice based on this information. Spanberger, a former U.S. representative, has maintained a consistent polling lead. Tropical Storm Raymond has formed in the eastern Pacific Ocean. It is the third system now off the western coast of Mexico. Global News 24 hours a day.

11:20And 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. Crazy. Finish to the Dodgers-Phillies series in L.A. The Dodgers scored in the 11th inning on a Phillies throwing error. Won the game 2-1, won the series 3-1. The Cubs shut out the Brewers 6-0 at Wrigley. That series is heading to a decisive Game 5 tomorrow in Milwaukee. Upset in the NFL to start Week 6. The Giants shut the Eagles out in the second half. The rookie quarterback Jackson Dart with a touchdown run and pass in the first quarter.

11:57Cam Scadaboo scored three times. The Giants won 34-17. 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. From Brussels, I'm following the politics, policy and the people shaping the European Union right now.

12:36And 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.

13:11Coast 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. It is a major step toward ending two years of brutal war in Gaza. Israel's government has approved a deal for Hamas to free its remaining hostages in exchange for more than 2 ,000 Palestinian prisoners. Israeli Prime Minister Benjamin Netanyahu says this clears the way for those hostages to come home in the next three days. We couldn't have achieved it without the extraordinary help of President Trump and his team, Steve Witko and Jared Kushner.

13:51Israeli Prime Minister Benjamin Netanyahu spoke after the vote flanked by the White House special envoy and President Trump's son-in-law. For the very latest, we go to Tel Aviv and welcome Bloomberg News Israel Bureau Chief Ethan Bronner. Ethan, good morning. This morning after the vote, is the ceasefire holding? Well, the ceasefire is actually only just starting officially, right? I mean, the deal was that after the vote, Israel would begin to redeploy its forces from controlling approximately 70 percent of Gaza to about half of it. So Israel has begun, actually, I think in just the last minutes, to start to move its troops back to that first line agreed to between the two sides.

14:35Interesting to see the White House envoy and President Trump's son-in-law side by side with Netanyahu as he was surrounded by his cabinet during this vote. We've spoken before about U.S. influence on Israel throughout this conflict. What does this say to have them in the room at this moment? You know, this is something, honestly, that was done even during the Biden administration. President Biden, Tony Blinken, and others would sit in the cabinet meeting during the beginning of this war in a sign of solidarity. So, of course, it is, as you point out, a sign of an incredible sort of shoulder-to-shoulder, you know, no daylight.

15:15We're all in this together approach. And obviously, there have been tensions between Netanyahu and Trump. But I think the point, and again, in addition, President Trump is planning to be here in a couple of days. So the point is to say whatever tensions there have been, we're basically together in our views of how they go forward here. Going forward, there are still plenty of unanswered questions as to whether this will be just a first step or whether this 20-point plan can be fully implemented, aren't there? Yeah, many, many, many. I mean, in fact, fundamentally, what's most striking about this is that for a variety of reasons which we can talk about, Hamas is going to give up all the hostages in front.

16:02That is to say, in the next 72 hours. And then Israel is going to free about 1950 Palestinian prisoners. And then we shall see. Then there's a whole bunch of stuff that's supposed to happen. But it's going to have to be negotiated in terms of who's going to rule the Gaza Strip and whether Hamas is going to disarm and how and so on and so forth. Lots and lots of stuff ahead of us, for sure. So then, Ethan, what are we expecting when those negotiations continue? I imagine it's going to be a fraught conversation still in Sharm el-Sheikh. Deeply, deeply. I don't know that it's going to happen in Sharm el-Sheikh.

16:43I don't know where these negotiations are going to take place or, you know, over what period of time, but absolutely hugely fraught. I mean, I think that my instinct is that the reason Hamas is giving up all the hostages up front, which is something it had refused to do consistently for two years, is that Qatar and Turkey and Egypt, its sponsors and friends, have said to it, do that and then work hard on the question of your role in the future and who gets amnesty and so forth and so on. So Israel is still saying it's not going to allow Hamas to have any role in the future of Gaza rulership. So we shall see.

17:22You know, it's going to be a lot. There's no question about it. But the other question is once Israel gets its hostages back, will it, A, will Prime Minister Netanyahu call an early election? Reasonably likely. Will he win? Another question. And also, will the public say, look, our hostages are home. We don't want to fight anymore no matter what's going on in Gaza. I don't know. 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.

18:00You 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. 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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