Oil Falls; Tech Stocks Slump; Big Jobs Report on Tap

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1:54Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for Business. Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank N.A. Member FDIC. Bloomberg 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 on peace talks with Iran. President Trump is hailing progress in indirect discussions as both countries look to move past last week's tit-for-tat strikes.

2:38The president's son-in-law, Jared Kushner, and Envoy Steve Witkoff are in Qatar for technical discussions. President Trump says he's aiming for lasting peace. The denuclearization of Iran is moving along well. They've had very good meetings, and we'll see. We hit them very hard for three nights, as you know. But we're getting along very well. President Trump isn't specifying what, if any, breakthroughs have been made. Vice President J.D. Vance says technical talks carried out by lower-level negotiators are continuing. Meanwhile, Nathan, oil falling for a third straight day. As flows through the Strait of Hormuz climb, checking prices right now, West Texas Intermediate is down more than 1 % at$67.84 a barrel.

3:21Brent is also down about 1 % at$70.81. And President Trump is touting that as well. Those boats are coming out of the Hormo Strait. They're coming out by numbers that nobody ever saw. We're setting records, actually. The oil is dropping. We have some great oilmen here. I don't know if they're happy or sad. I don't give a damn if they're happy or sad. I want the prices to go down, and the oil is dropping like nobody thought possible. President Trump made those remarks in North Dakota following his tour of the Theodore Roosevelt Presidential Library. Oil stockpiles in the U.S. have fallen to their lowest level since March of last year.

3:59Inventories outside strategic reserves are around 1.2 billion barrels after 12 straight weeks of declines. Well, Karen, the other major war overseas appears to be ramping up. Ukrainian officials say Russia carried out one of its most intense drone and missile strikes on Kiev this year, killing at least 13 people and injuring dozens. The country's foreign minister is calling for more air defense support from allies, calling the attacks, quote, grave war crimes. Meanwhile, Russia is indicating Ukraine may have used a ballistic missile in combat against it for the first time. The Kremlin says its air defenses shot that missile down.

4:34All right, let's stick with geopolitics. Nathan, the U.S. is suggesting giving greater benefits to NATO countries that spend more on defense. U.S. Ambassador to NATO Matthew Whitaker raised the prospect of a two-tier alliance in an interview with Fox News. You know, we are going to be in Ankara and we're going to have the first report card. We're going to demonstrate that our allies are stepping up, that they've spent in the first year since the Hague defense commitment, over$100 billion on hard defense and capabilities and a commitment to increasing that and ultimately equalizing with the United States.

5:10It's significant and it's only because of President Trump. U.S. NATO Ambassador Matthew Whitaker's remarks come ahead of a NATO summit in Turkey next week. President Trump is scheduled to attend. Germany's foreign minister is already rejecting Whitaker's proposal. He tells the German magazine Der Spiegel, quote, NATO is not about blind obedience. Karen, the Securities and Exchange Commission is looking into claims from Susquehanna International Group that unknown insider traders made$100 million on options bets ahead of a Chinese regulatory crackdown. The quant trading firm went public with its claims in a lawsuit this week.

5:46It says it lost more than$70 million on most of the alleged trades. A federal judge granted Susquehanna's request for an order freezing accounts at Interactive Brokers, as well as platforms at Futu and Up Fintech Holdings. In the interest of transparency, we should note that Interactive Brokers advertises on Bloomberg Radio. Let's turn to the economy now, Nathan, and a key piece of data ahead of the July 4th holiday. We get the June jobs report this morning, and Bloomberg's Michael McKee joins us with the preview. The holiday-shortened week means June jobs are reported a day early this month, and traders won't have as much time to guess what the data mean for the Fed.

6:21Recent hiring has been strong and the unemployment rate stable. Most Fed officials, including new chairman Kevin Warsh, have said they're not worried about the labor market sending any signals about a slowdown in the economy. Their main concern at the moment is inflation, which puts more emphasis on any change in average hourly earnings. They have been falling, but if hiring is picking up, that could reverse. Raising fears the Fed will be raising interest rates. Michael McKee, Bloomberg Radio. Ahead of that report, Karen, we have heard from Fed Chair Kevin Walsh. She spoke at the ECB's annual forum in Centra, Portugal, on a panel with other central bankers.

6:57Walsh says price risks have come down in recent weeks, and he is determined to bring inflation back to the Fed's 2 % target. We don't want to over-determine things, But if there were people in household or the business sector and the financial markets who thought that this central bank was going to be comfortable with an inflation objective above 2%, well, I guess they'd be disappointed. Fed Chair Kevin Warsh also announced he's tapped former Bank of England Governor Mervyn King to co-chair the Fed's new task force on communications. To markets now, Nathan, a massive sell-off in Asian chip stocks is reviving concerns that the AI rally has gone too far, too fast, and South Korea's Kospi, which is heavily exposed to the sector, fell by almost 8%.

7:41Chipmaker SK Hynix, which makes up close to a third of the index, sank 14%. Charlotte Yang is an Asia equities reporter for Bloomberg News. Because of the promise they have to track the performance, they have to go through a rebalancing process every afternoon, which is buy into the rallies and sell into the declines. So this mechanical flow will happen regardless of the use on the fundamentals. And because of the size of this product and also together with the smaller peers, on volatile days, they can contribute to around 60 percent of SK Hynix's daily turnover. And the other Charlotte Yang's reporting comes as Meta also announces planning a new cloud business that will sell AI computing capacity.

8:24And another note out of the tech world, Karen, permable tech analyst Dan Ives is leaving Wedbush Securities. He's planning to launch a new firm that will include research, capital raising, advisory and investing. Ives describes it as a modern merchant bank across sectors such as tech, energy, infrastructure and financials. Ives says he will continue as a research analyst and commentator on TV and radio. Well, Nathan, let's turn now to the latest on the sweltering heat wave across the mid-Atlantic and northeast. Bloomberg meteorologist Craig Allen says the most brutal part of the forecast comes today and tomorrow.

8:59New York City topped out at 93 yesterday, could approach 100 today. Newark got to 99 yesterday. Boston hit 92. You could probably add another 4 to 6 degrees onto that. And Washington Dulles broke a record at 97, and you could easily reach or tap out above 100. And, of course, the heat index with the high humidity will give the feel of a sweltering 105 to 115 in many places. Nights probably won't get below 80 in the urban areas, too. And as for brief cooling thunderstorms, as for a little bit of help, chances are slim until we get to the July 4th weekend. And Bloomberg meteorologist Craig Allen there.

9:35Power prices from New York to Virginia are surging as heat threatens to overwhelm grids heading into the holiday weekend. Moving from the hot weather, Karen, to a hot ticket.

9:48New York City is preparing to host the nuptials of Taylor Swift and Travis Kelsey tomorrow at Madison Square Garden. Sources say about a thousand celebrity guests are expected to attend. And the celebration actually begins tonight with a smaller 100-guest affair with the rehearsal dinner on the floor of MSG's Infosys Theater. Security over the next two days, we are told, will be on par with a regular season sporting event at Madison Square Garden.

10:20Time 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. and the death toll is near 2000 from last week's twin earthquakes in Venezuela. But there are stories still of survival. Hundreds of rescuers have been working to save a Venezuelan man who has survived for a week under the ruins of a seven-story building. The 43-year-old security guard is trapped inside his booth under the building where he worked when the twin earthquakes hit. And a 12-year-old boy was rescued after five days in the rubble.

10:55His cousin Myra Heredia in Miami is calling it a miracle. Here we are day seven and they're still finding people and hope is still there and hope is still alive even though it's been so many days. And we just the emotional roller coaster continues. Meanwhile, the flow of aid and relief efforts continue out of South Florida. Miami's new stadium and Fort Lauderdale's inter-Miami CF stadium hosted a supply drive. Alistair Kiigi is with Global Empowerment Mission. We're working with all the sports teams. Many of them have committed their facilities for drop-off donations, and that is super helpful.

11:35Alistair Kiigi with Global Empowerment Mission says they have been sending regular plane loads of relief to Venezuela since the quake struck. New York City is ready for a weekend of America 250 events that include the largest ever international flotilla, tall ships, Navy vessels, and the Macy's 4th of July fireworks. Mayor Zoran Mamdani stressed that with all the events going on in the city, they are taking every precaution, which includes a huge police presence. We continue to operate in a heightened threat environment. At this time, there are no specific and credible threats, and we are taking every possible precaution to safeguard our city.

12:14And this Independence Day, join Bloomberg this weekend for a special live show from the Intrepid. David Gurra, Christina Ruffini, and Lisa Matteo will be celebrating America's 250th birthday all morning on the deck of the intrepid right on the Hudson River. Watch and listen live on Bloomberg Television, Bloomberg Radio, and the Bloomberg Business App, Saturday, July 4th, starting at 7 a.m. Eastern. 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.

12:52Thanks Karen, a victory for the U.S. At the World Cup, they scored a goal in each half. The one in the second half came when they were playing with only 10 men after a red card. 2-0 over Bosnia. The U.S. moves into the round of 16. The next game is Monday against Belgium who rallied to beat the Senegal. NBA trade, Jalen Brown, after 10 years as a star with the Celtics, goes from Boston to Philadelphia in exchange for Paul George and two first-round draft picks. Mitchell Robinson had helped the Knicks win the championship, signed with the Celtics. That's your Bloomberg Sports Update. Stay with us.

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16:17Coast 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 counting you down to the key economic data report of the week coming a day early due to the Independence Day holiday. The nonfarm payrolls report for June is coming out this month on the first Thursday of the month, 830 Wall Street time. And here to preview it with us now is Bloomberg International Economics and Policy Correspondent Michael McKee. So, Mike, the consensus on the Bloomberg terminal is 113 ,000 new jobs added in June.

16:57But they saw the note from Bloomberg Intelligence, Bloomberg Economics, calling for much more than that. I mean, this report has managed to surprise to the upside, it seems, month in and month out. Good morning. Good morning. I knew there was a reason I was here on a Thursday. There you go. The labor market has been stronger than people anticipated, particularly the Fed. And that's given them reason for hope that they could at least leave interest rates where they are and not have to cut them so that they can continue to push down on inflation. And inflation is probably going to be the underlying story of this jobs report.

17:36We have seen average hourly earnings continue to fall, and they've fallen behind the inflation rate. So Americans are feeling that. And you've heard a lot about affordability. So we'll see if average hourly earnings start to rise. If you have a lot of people looking for jobs and you have a lot of jobs you want to fill, then you might have to pay them more. Yeah. So, I mean, that could certainly feed into the dynamic that we've been hearing ever since. Even before Fed Chair Kevin Warsh took the helm, the laser focus on bringing inflation down to the 2 % target. So how could this jobs report potentially shift pricing around whether we're going to see a rate hike from the Fed this year?

18:15I suspect it would take a big number to shift the pricing, but it would take nothing more than perhaps meeting the estimate for pricing to remain the same that we will see sometime in the fall a rate increase. Now, Wall Street is betting on that because the whisper number is 137 ,000, which is higher than the economic consensus at this point. So if we get that, then you'll see people still feeling that the Fed is going to be raising interest rates. If we get a big increase in average hourly earnings, you'll also get maybe some movement because then people think that inflation is causing problems again.

18:56But this is incrementally, month by month, it doesn't make a big difference, but it does to the psychology of those who are on Wall Street. 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. 2021. Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

19:41And 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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