Trump Opens Door to Shutdown Talks; National Guard Deployments Continue

0:28The news doesn't stop on the weekends. We put the past week's events into context, examining what happened in the markets and the world. Then on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television, listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast. That's Bloomberg this weekend, Saturdays and Sundays starting at 7 a.m. Eastern on February 28th. Make us part of your weekend routine on Bloomberg Television, Radio, and wherever you get your podcasts.

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 on day seven of the federal government shutdown. down. The Senate has voted for a fifth time on a stopgap spending bill that would reopen the government until November 21st, but would not include the health care subsidies that Democrats are demanding. That bill has failed for a fifth time. But now President Trump is signaling he's willing to negotiate. We have a negotiation going on right now with the Democrats that could lead to very good things.

1:48And I'm talking about good things with regard to health care. President President Trump did not say specifically which Democrats he's negotiating with. House Minority Leader Hakeem Jeffries says it's not him. Neither Leader Schumer or myself have heard a word from the administration about resolving this issue, making clear to us that the White House wanted to shut the government down. That's House Minority Leader Hakeem Jeffries. Later, President Trump posted on Truth Social that he'd be willing to work with Democrats, but only after they allowed the government to reopen. He's also suggested layoffs of federal workers could be triggered if the shutdown continues much longer.

2:24Those workers will begin to miss paychecks this Friday, and the military will start going without pay on October 15th unless the government reopens. Well, Nathan, President Trump is facing more pushback over his efforts to send the National Guard to counter immigration protesters in major cities. The state of Illinois is suing over the president's plan to deploy the Guard to Chicago. go. But a federal judge is declining to rule right away on the state's request for a two-week halt to the deployment. Illinois Governor J.B. Pritzker says the president's moves are entirely political. The Trump administration is following a playbook.

3:00Cause chaos, create fear and confusion, make it seem like peaceful protesters are a mob by firing gas pellets and tear gas canisters at them. Why? To create the pretext for invoking the Insurrection Act. Illinois Governor J.B. Pritzker denies the White House's claims that local police are not doing enough to protect immigration and customs enforcement. U.S. District Judge April Perry is not ruling immediately on the state's request for a temporary restraining order, but she says she's troubled by a lack of clarity on where troops would be mobilizing and what they'd be doing. She asked the Trump administration to delay its plans until she holds a hearing on Thursday.

3:42Karen, we turn now to the political crisis in France. President Emmanuel Macron is giving his outgoing Prime Minister, Sébastien Le Corneau, until tomorrow night to negotiate a last-ditch deal to salvage his government. The decision buys Macron a little more time to decide his next steps, and we get the latest in Paris from Bloomberg Daybreak Europe anchor Stephen Carroll. What a 24 hours it's been where we heard, you know, a cabinet only announced on Sunday night for the prime minister to resign yesterday morning only to be told no wait go back and try again you get an extra 48 hours to try and negotiate some sort of compromise that might eventually lead to a budget.

4:22Bloomberg's Stephen Carroll says President Macron's options include appointing a new prime minister calling a new parliamentary election or resigning. Opposition groups are clamoring for a fresh legislative vote. Well Nathan today marks two years since the October 7th attacks on Israel. Hamas and Israel are continuing indirect negotiations for a second day in Egypt. We get the very latest from Bloomberg Middle East correspondent Jumana Bersetchi. There is a degree of optimism that perhaps this is the diplomatic breakthrough that the families of those hostages have been waiting for, that Palestinians have been striving for.

4:57President Trump says, I really think we're going to have a deal. He's personally invested in this, and you can question his motivations. But what is very clear is the U.S. right now, the administration is very focused on getting a deal across the line because President Trump seems to think that he's the only world leader capable of getting to peace in Gaza. So there is a lot of stake. Right now, there's a lot of focus from the international community. Many people are saying that this is perhaps the last real effort and last attempt to get to some form of a resolution. So cautious optimism prevailing.

5:30And Bloomberg Middle East correspondent, Jumana Brasechi, there. 1 ,200 people were killed and another 250 were abducted on the attack on Israel two years ago. More than 67 ,000 Palestinians have been killed in the conflict, according to the Hamas-run health ministry in the territory. Turning to Wall Street now, Karen, futures are lower a day after stocks closed at yet another record high. The S &P 500 has now gained for seven straight sessions for its longest winning streak since early May. Leslie Marks is chief investment officer for equities at McKinsey Investments. When you look at the factors that are driving equities, it's been primarily, of course, price momentum, the things that are going higher are what people want, of course.

6:12But also earnings momentum has been a top factor. And earnings momentum is a very strong fundamental that we can really anchor ourselves on and say that actually with these companies reporting strong earnings, we can feel comfortable with the higher valuations that they're trading at today. That's Leslie Marks at McKinsey Investments. The S &P 500 rose four-tenths of one percent yesterday. Well, Nathan, the biggest winner was the NASDAQ 100 index, which rose another eight-tenths of a percent, leading the way advanced micro devices, which soared almost 24 percent after inking a deal with OpenAI.

6:46AMD will build out AI infrastructure in a pack that chipmakers said could generate tens of billions of dollars in new revenue. And we spoke with AMD CEO Lisa Su. Together, now we're embarking on a massive build-out of six gigawatts of AI compute. And it's a big deal for us, for our shareholders, for our teams, and for really the partnership and the overall AI ecosystem. And get the full conversation with AMD CEO Lisa Su and OpenAI President Greg Brockman on the Bloomberg podcast channel on YouTube. Karen, we've also been speaking with Citadel's Ken Griffin. He says investors are starting to see gold as safer than the dollar.

7:27He says that's something people should be worried about. The billionaire says it is clear many are now reassessing the greenback. As you see sovereigns around the world, central banks around the world, as you see individual investors around the world go, you know what? I now view gold as a safe harbor asset in a way that the dollar used to be viewed. That's what's really concerning to me. Ken Griffin made those comments in an interview with Bloomberg's Francine Lacqua at the Citadel Securities Conference. That conversation is also on the Bloomberg Podcast channel on YouTube. In company news, Nathan, Bloomberg News has learned Tesla plans to unveil a cheaper version of the Model Y later today.

8:09Sources say the cheaper vehicle will lack certain features and use less premium materials to offset the loss of the up to$7 ,500 federal tax credit that the U.S. stopped offering this month. Karen Tesla CEO Elon Musk has reportedly named a former Morgan Stanley executive, the chief financial officer of his artificial intelligence startup XAI. The Financial Times is reporting that Anthony Armstrong will help finance both XAI and Musk's social media platform X. The paper says Armstrong helped must complete the$44 billion acquisition of the former Twitter.

9:07child care and a freeze on rent-stabilized apartments. He spoke to ABC7 about how it will be funded. By increasing taxes on the top 1 % of New Yorkers, by 2%, it is by increasing the state's corporate tax rate to match that of New Jersey. Meanwhile, former New York Governor Andrew Cuomo, running as an independent, says if Mamdani wins the election in November, it would be a gift to President Trump. He said if they elect this person, then I, Donald Trump, am going to have to step in, take over New York to protect the good people of New York. Cuomo spoke yesterday on ABC's The View. Mamdani leads the field in the polls over Cuomo and Republican Curtis Lewa.

9:49On Bloomberg, Lewa says the polls have been wrong several times. Two months into the Democratic primary, they were preparing the coronation of Andrew Cuomo as our next mayor. 40 points ahead is Zohan Mondami. He lost by 13 points. I look at my mentor in this race, George Pataki, on November 2nd of 1994 against the better Cuomo Mario, they had him down by 12 points. He won by three points. Current Mayor Eric Adams dropped out of the race about a week ago. Former Mayor Michael Bloomberg, founder and majority owner of Bloomberg News, parent Bloomberg LP, endorsed Cuomo in the primary and has contributed to a PAC supporting his candidacy.

10:32Sean Diddy Combs' lawyers want the hip-hop mogul sent to a low-security federal prison in New Jersey to serve his four-year prison sentence. They were told a judge Monday that the facility's drug treatment program will help him stay clean. The Supreme Court has rejected an appeal from Ghislaine Maxwell, the imprisoned ex-girlfriend of Jeffrey Epstein. The justices declined to take up a case that would have renewed attention on the Epstein sexual abuse saga. Lawyers from Maxwell argued she never should have been tried or convicted for a role in luring teenage girls to be sexually abused by Epstein.

11:09Global 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. and a pair of NLDS Game 2s. The Dodgers, with four runs in the seventh inning, held on in the bottom of the ninth and beat the Phillies 4-3, and they go back to L.A. with a two-games-to-none lead. The Brewers hit three home runs. Two of them were three-run shots, a 7-3 win over the Cubs. Milwaukee leads the series two zip. Mother Night Football in Jacksonville.

11:40Kansas City had a two-touchdown lead, then trailed, retook the lead with less than two minutes to go. Trevor Lawrence slipped and fell getting a snap, but scored a one-yard run with 23 seconds left. The Jags won 31-28. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

12:21following 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.

13:02Coast 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. 48 hours, that is the window that French President Emmanuel Macron has given his newest Prime Minister, Sébastien Lecornu, to salvage his government and keep their country from going even deeper into a political crisis that had Lecornu announcing his resignation only yesterday. Joining us from Paris for the very latest is Bloomberg Daybreak Europe anchor Stephen Carroll. Stephen, good morning. It took Prime Minister Le Cornu less than 24 hours to hand in his walking papers.

13:43Will another 48 make a difference? Good morning. Good morning, Nathan. I mean, that's the question that everyone in Paris here is wondering about and indeed across France, because we are looking at a situation where the first of those meetings that Sébastien Le Cornu was due to hold with the centre-right political parties has just finished in the past few minutes. It's no news of what was discussed just yet. But they were trying essentially to rebuild the coalition they had before it all fell apart yesterday morning and Sébastien Le Cornu resigned. So that's the first goal they have to try and get back to where they started from.

14:19But that still doesn't leave them with a sufficient number of parliamentarians to pass a budget, which is, of course, the broader goal. A question that we'll have to try and answer between now and tomorrow night is whether or not there's any hope for the original alliance or indeed an expanded alliance that might actually be able to make progress on this key point. The optimism is fairly thin at the moment, I think it's fair to say. The markets, though, have calmed down a little. We're still looking at that spread between French and German bonds at over 80 basis points. That's our critical measure of risk that we're watching in markets.

14:51Markets certainly got a fright when Sébastien Le Cornu resigned yesterday, but things are at least in a holding pattern for now. So what are the options for Le Cornu with this clock ticking down now? Well, look, he has to try and make sure, first of all, the original partners are on board. And we're talking mostly about the centre-right Republicans party, led by the outgoing interim interior minister, whatever term he'd like to apply at the moment, Bruno Retailo. He's not taken part in that meeting this morning at the prime minister's office, although he has spoken directly to Sebastien Lecornu.

15:22If he comes back on board, at least there is some hope of that coalition holding together. The issue is and was whether or not you can convince the centre-left Socialist Party to get on board and to help put together a budget plan, which is what they're all trying to work towards. If that doesn't happen by tomorrow evening, Emmanuel Macron has used this expression, he will take his responsibilities. Now, plenty of interpretation as to what that might mean, but it's seen as a sort of veiled threat to these parties. to that he will hold fresh parliamentary elections if there isn't an agreement reached.

15:55And those centrist parties, according to the polls, are those that are likely to suffer from the centre-left to the centre-right. Those are the parties likely to lose out. Voters seem more likely to go to the extremes, the far left and the far right. So that is the threat. Whether if you don't manage to put together a deal and agree to something now, is that you could end up in a worst-off position afterwards. And it sounds, Stephen, like that's the kind of threat that could hurt President Macron himself politically. I mean, we've talked before about how he's resisted all this time the idea of resigning himself.

16:28But what are the options for President Macron if it comes to the point that they could be calling a new election? Well, look, the same three options are on the table for him now that have been every time that he's found himself in this situation. And it's been fairly frequent over the past two years. he can find a new Prime Minister or even reappoint Sébastien Lecornu, by the way. That's still on the table. He can call those parliamentary elections we talked about, or he could go as far as resigning. One key development in the conversations this morning has been the commentary from one of Macron's closest allies, Édouard Philippe, who was his first Prime Minister when he was elected in 2017.

17:04Now, they've had somewhat of a political separation since, but have remained close allies. And Édouard Philippe said this morning that Emmanuel Macron should call early presidential elections once he has passed this budget. That is a big departure from Edouard Philippe's position. It's an indication of how even Macron's close allies are a bit fed up with him. The leader of Macron's own party on television last night, by the way, admitted he didn't understand the decisions that Emmanuel Macron was making anymore. Now, you have to think about this in a broader political context. All of these political figures and political parties are thinking about the next presidential election currently scheduled for 2027, they might want to put a bit of clear blue water between themselves and Emmanuel Macron to make things easier for them and to increase their own prospects of election.

17:48From the Elyse's point of view, no sign or sound that Emmanuel Macron's even considering resigning for now. That's been ruled out by everyone that we've heard of. And the last time we heard from Emmanuel Macron himself, he's also ruled it out. But a lot can happen, as we know, in French politics in a short period of time. And we're still about 36 hours away from that deadline set for tomorrow evening. 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.

18:22You 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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