Markets Poised for Seven-Month Low; Trump & Mamdani to Meet Friday

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1:02Bloomberg Audio Studios, podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Lisa Mateo. Here are the top stories we're following today. Lisa, we have some sobering facts for investors this morning. Global stocks, including the S &P 500, are poised for their worst week in seven months. Concerns over lofty valuations and artificial intelligence-related companies are continuing to weigh on markets. It's Bloomberg's Valerie Teitel has more on yesterday's big turnaround. We had a 4 % slide in the Nasdaq in an hour and 40 minutes. I mean, you don't see steep reversals like this very often.

1:44It was one of the biggest intraday swings we've seen in the Nasdaq since COVID, the second biggest since the price fluctuations we saw back in April 2020. We even saw stocks, you know, obviously NVIDIA, the reversal NVIDIA was leading that, But we also saw big reversals in some other chip names. Only 12 stocks in the Nasdaq yesterday ended in the green. The remainder were in the red. Bloomberg's Valerie Teitel says that huge reversal wiped away$2.7 trillion from the S &P 500. Well, it was also quite a reversal for NVIDIA yesterday, Nathan. At one point, the chip giant was up 5%, only to close the date more than 3 % lower.

2:26And one famed investor decided to scoop up shares. Kathy Wood bought NVIDIA yesterday for the first time since August. Her ARK Innovation ETF bought more than 93 ,000 shares on Thursday. Right now, NVIDIA shares, they're down more than 2.5%. Well, as dramatic as the sell-off in stocks has been, Lisa, it has not been nearly as eye-popping as the plunge in crypto. Bitcoin has shed about 23 % of its value this month. At one point, the token slipped below the 82 ,000 level, and it's below that this morning, down 6 % right now, just shy of 82. Institutions appear reluctant to buy the dip. A group of a dozen U.S.-listed Bitcoin exchange-traded funds saw$903 million in net outflows yesterday.

3:12That was the second largest single-day redemption since spot Bitcoin ETFs debuted in January of last year. Well, adding to the market angst this morning, Nathan, persistent uncertainty over whether the Fed will cut interest rates next month. Right now, traders pricing in a 30 percent chance. Treasury Secretary Scott Besson said the Fed should keep cutting. I think there are a lot of signals coming from the Fed, and some of them are very confusing. They said that they don't have data. and traditionally, if you don't have data, if you're flying blind, they've cut twice and they said that they're insurance cuts.

3:49So I would have thought that they would want to take out a third cut. We don't know where things are. We've been cutting and we should finish the cutting cycle. President made the comments on Fox Business. Meanwhile, Philadelphia Fed President Anna Paulson says she's taking a measured approach to the next policy gathering. I am approaching the December FOMC meeting cautiously. On the margin, I'm still a little more worried about the labor market than I am about inflation. But I expect to learn a lot between now and the December meeting. Philadelphia Fed President Anna Paulson made the remarks at the Reserve Bank's 80th annual field meeting capstone in Philadelphia.

4:26And Fed Governor Michael Barr says the central bank needs to proceed with caution in considering additional interest rate cuts due to inflation still around 3%. In Asia, Lisa, Japan has approved its biggest round of extra spending since the pandemic. The total package is valued at more than$117 billion. It has measures aimed at price relief, including cutting the gasoline tax and raising the tax-free income threshold. Well, we now turn to politics. President Trump will host New York City Mayor-elect Zoran Mamdani at the White House, even though the president incorrectly refers to him as a communist.

5:01Bloomberg's Amy Morris reports from Washington. Momdani has an agenda for his long-awaited meeting with President Trump. I have many disagreements with the president, and I believe that we should be relentless and pursue all avenues and all meetings that could make our city affordable for every single New Yorker. New York Republican Congressman Andrew Garbarino tells Balance of Power the president needs to flex his muscle. I hope the president makes clear to the mayor that his past anti-police rhetoric, he can't act this way as mayor. And if he does anything that makes New York less safe, the president has my support in doing what he needs to do and making sure it stays safe.

5:37The meeting comes after the Trump administration reviewed canceling or suspending funds that benefit New York City. In Washington, Amy Morris, Bloomberg Radio. Amy, thanks. Turn to another political story getting attention in Washington. President Trump is calling for sedition trials for a group of Democratic lawmakers who posted this video online. Right now, the threats to our Constitution aren't just coming from abroad, but from right here at home. Our laws are clear. You can refuse illegal orders. The video was organized by Michigan Senator and former CIA analyst Alyssa Slotkin. The other Democrats are also former military and intelligence officers.

6:13In a series of social media posts, President Trump said the lawmakers should be arrested and put on trial. In one post, he called it seditious behavior punishable by death. That's drawing an angry reaction from House Minority Leader Hakeem Jeffries. We had patriotic members of the House and the Senate have their lives threatened by Donald Trump in the most unhinged, unacceptable, unconscionable and un-American way. Minority Leader Hakeem Jeffries says he's discussed lawmaker security with the House Sergeant-at-Arms and Capitol Police after the president's posts. House Speaker Mike Johnson is defending the president.

6:48Sometimes he uses heated rhetoric, OK? But do any of you agree that that's appropriate, that they should be telling young members of the military to defy orders? You should think about the implications of that. The president's trying to make a point. I think he made the point. And Speaker Mike Johnson says members of Congress should not be telling troops to disobey orders. Well, now to the latest on efforts to end the war in Ukraine. Ukrainian President Volodymyr Zelensky is under pressure to accept a peace plan floated by U.S. and Russian envoys. The 28-point proposal would force Ukraine to surrender large portions of its east to Russia, cap the size of its military, lift sanctions on Moscow over time, and give up any hopes of NATO membership.

7:28Zelensky says he'll discuss the plan with President Trump in coming days. Ukraine needs peace. And Ukraine will do everything to ensure that no one in the world can say that we are undermining diplomacy. This is important. Zelensky, he spoke through an interpreter after meeting with Pentagon officials in Kiev. We get more from Bloomberg's Oliver Crook in Brussels. This is sort of Zelensky's approach ever since that catastrophic meeting in the Oval Office back in February when Trump says jump, Zelensky says basically how high. He has learned from that meeting in the most difficult possible way that you never want to be perceived to be the impediment to peace or the impediment to an American plan.

8:07Bloomberg's Oliver Crook reports President Zelensky plans to discuss the peace proposal today with leaders of the European Union, Germany, France, and the UK. Back on Wall Street, Lisa, the stage is set for one of Hollywood's biggest companies to be sold. Sources tell Bloomberg that Netflix, Comcast, and Paramount Skydance all submitted bids for Warner Brothers Discovery, the parent of HBO, CNN, and the Warner Brothers movie and TV studios. Comcast and Netflix are most interested in the film and TV library. Paramount is willing to buy the whole company. The Warner's board is expected to make its final decision by Christmas.

8:42And changes in the C-suite at Citigroup. Mark Mason is stepping down as chief financial officer as the bank revamps its leadership ranks under a new structure. Mason will be replaced by Gonzalo Lucchetti, who will take over that role early next year.

8:59Time now for a look at some of the other stories making news in New York around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Lisa. A federal judge says she'll rule soon on whether to order the release of Kilmar Abrego Garcia from immigration custody. The Maryland man was mistakenly deported to El Salvador in March. Since he returned in June, the government has been trying to deport him to one of several African nations. Meanwhile, Costa Rica has given Abrego Garcia a guarantee of acceptance. Abrego Garcia's attorney, Simon Sandoval Motionberg.

9:33And so we're very, very hopeful that we will win a release from detention. And then what comes after that, I guess we'll all have to see. The Justice Department is examining the handling of the mortgage fraud investigation into Senator Adam Schiff, including potential involvement of people claiming to be acting at the behest of two Trump administration officials. Federal authorities interviewed a Republican congressional candidate who promoted mortgage fraud allegations against the California Democrat. They are said to have questioned her about communications with DOJ official Ed Martin and Federal Housing Finance Agency director Bill Pulte.

10:13Senate Republicans rejected a Democratic attempt to pass a bill that allows senators to sue the government if their phone records are obtained without being notified. The repeal passed unanimously in the House. The issue stems from Special Counsel Jack Smith's investigation into any efforts to overturn the 2020 election. Democratic Senator Martin Hunrich said the provision means senators can pocket millions of dollars while Americans are struggling. Even House Speaker Mike Johnson agrees with me. And when Speaker Johnson and I agree something is bad, you know it's really, really bad. But Senator Lindsey Graham says it's about making sure no one can access personal phone records of senators without notice ever again.

10:57This was coordinated with people in the Senate in power. This wasn't an attempt to enrich anybody. It was an attempt to deter what was wrong, in my view, never happened again. Senator Graham says he intends to sue. Global news 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barron. This is Bloomberg Lisa. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Week 12 underway with an AFC battle in Houston and a big performance by the Texans defense. They intercepted Buffalo QB Josh Allen twice, including once in the final minute.

11:32They sacked him eight times. Houston beat the Bills 23-19. NBA in Milwaukee. Philadelphia won in overtime for the Sixers. Tyrese Maxey, a career high, 54 points. NHL in Montreal. Washington won 8-4. The 33rd career hat trick for Alex Ovechkin. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. I'm Carol Masser. And I'm Tim Stenevek, inviting you to join us for the Bloomberg Business Week Daily Podcast. Now, every day, we are bringing you reporting from the magazine that helps global leaders stay ahead. We've got insight on the people, the companies, and trends that are shaping today's complex economy.

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13:04Coast 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. Worries about AI valuations may be taking hold for markets, even after NVIDIA's earnings kept them at bay for a few hours. Global stocks are now on track for their worst week since April. Salman Ahmed is Global Head of Strategic Asset Allocation at Fidelity International. AI is a powerful technology. This theme is not going anywhere. So I think at this stage, we are taking it as a more of a positioning change.

13:39And our mantra remains the same, diversify. Now it was Fidelity strategist Salman Ahmed joining us now as Bloomberg Markets reporter, Valerie Teitel. A bit of a calming message, Valerie, but calm seems to be anything but what this market feels like right now. Good morning. Good morning, Nathan. Yes, Nasdaq futures have erased their earlier gains from the European session. We're now trading at session lows and we're keeping an eye on Bitcoin. We've just broken through 82 ,000 as we speak, down 6 % on the cryptocurrency. It was really crypto and the move in NVIDIA yesterday, which drove the biggest, one of the biggest swings in the Nasdaq I have seen in my career.

14:17We dropped nearly 4 % in yesterday's session in an hour and 40 minutes, Nathan. A kind of intraday swing like that doesn't come around often, and it probably put some hair on some trader's chest yesterday. Huge U-turn in the market sparked by what we are unsure, and that is what is unnerving investors on this Friday. Might I add to all of this that this is ahead of the Thanksgiving week, which is known historically to be quite an illiquid week of trading. Perhaps those investors who were maybe sitting on the sidelines or might be choosing this Friday afternoon to de-risk ahead of the holiday. But we are seeing shares of NVIDIA drop 2.5 % in pre-market trade.

14:56MicroStrategy, one of those Bitcoin holders, down 5%. And shares of Bitcoin dropping 6 % below$82 ,000 as we speak. Is this just about concern around AI valuations or are concerns about what the Fed could do next month feeding into this as well? You know, I mean, I like to, as someone who comes from a fixed income background, I do believe the Fed is always instrumental in moves like this. We have had a hawkish round of Fed speak in the last three weeks. And essentially what we got from that employment report yesterday didn't necessarily help. Yes, it was delayed. It was September's data. But again, it plays into the hands of the hawks that might want to argue that the labor market has found some ground.

15:37There was a big beat with a headline number coming at 119K versus estimates of 51. And we did have some hawkish Fed speak yesterday as well. heard from Goolsbee saying he's essentially uneasy about cutting in December, Barr focusing on inflation concerns. So perhaps the weight of tilt when it comes to the Federal Reserve is to stay on hold in December. And that is essentially not something that the equity market can hang its hat on on this Friday evening or Friday session, where we did look like we were trying to bounce, but now Nasdaq futures are down eight tenths of one percent. In our last 30 seconds, You mentioned the sell-off in Bitcoin now below$82 ,000.

16:15Is there further support level for Bitcoin? Look,$80 ,000 was one talked about. But look, it is really hard to nail down the technical factors here of Bitcoin. One superlative I do have for you, Nathan, is we've had 11 straight days of lower lows for the cryptocurrency. And that is something we have not seen in its history. So momentum is on a back foot. These retail traders are underwater on their ETF holdings. Who knows how far Bitcoin can go? 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.

16:53Eastern 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. 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 Nathan Hager.

17:30And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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