Trump Takes Hard Line on Iran, China’s Xi to Skip UN Meeting

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1:41And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering, and claims experience developed over time. Learn more at thehartford.com slash risk mitigation. 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, President Trump is taking a harder line with Iran with the 60-day memorandum of understanding between the two countries officially expired. The president says he is not interested in seeking an extension, and now he's making a new threat to bomb Oman if that country gets in the way of the U.S.

2:28blockade in the Strait of Hormuz. Would you say you're out of patience with Oman, a strategic partner? I don't think they behaved very well, but we'd handle them very easily, just like we do others. President Trump spoke to reporters from the White House as Iran and Oman continue negotiations on how to manage the strait. Bloomberg Middle East correspondent Abir Abu Omar has more from Dubai. From the Iranian side, we know that there's a lot of complexities when it comes to finding that mechanism and a way around just finding those paths in the Strait of Hormuz to reopen and get oil moving once again through the waterway.

3:05That is when it comes to that agreement that is happening between Oman and Iran. Bloomberg's Abir Abu Omar reports the U.S. is not part of those negotiations, but President Trump insists the U.S. has total control of the strait, and he likes the idea of declaring it U.S. territory. Well, Nathan, a marathon meeting between U.S. negotiator Jared Kushner and Israeli Prime Minister Benjamin Netanyahu left the fate of the Gaza ceasefire unclear. Officials signaled moderate optimism after yesterday's talks, but offered no concrete commitment by Israel to the latest U.S.-proposed plan. American negotiators appear to acquiesce to Israeli demands that Hamas disarmament must come before any reconstruction of the devastated Palestinian enclave.

3:48Another geopolitical news, Karen. Chinese leader Xi Jinping is going to forego a stop in New York to address the U.N. General Assembly when he visits the U.S. next month. Politico is reporting she will be in the U.S. for three days. The highlight will be a meeting with President Trump on September 24th. This comes after the two leaders met in Asia last spring. Now to the latest on trade negotiations between the U.S. and Canada. Nathan, President Trump and Canada's Prime Minister Mark Carney spoke by phone yesterday about 24 hours before the U.S. is due to implement punishing new tariffs on Canadian products.

4:25Negotiators have been working for days to try to craft an agreement that would avert 50 % duties on a range of U.S. imports from Canada, including milk, beer, plywood and hockey equipment. Sources say automotive sector rules are proving to be a major obstacle toward an agreement. And Karen, President Trump is keeping up his push to overhaul this country's voting laws. In a social media post, he urged Congress to pass the Save America Act and held up India's voting system as an example to follow. He says India's chief election commissioner recently asked how the U.S. could hold elections without requiring voter ID.

4:59The Justice Department says it plans to send 1 ,000 monitors to watch voting during this year's midterms in November. We discussed that with the head of DOJ's Civil Rights Division, Harmeet Dillon. We are still formulating our final list, but the places where there may be language issues, the places where there may have been access of disability rights issues, places where there may be voter fraud issues that we've seen. We've had some prosecutions. I think you've seen some of those. There'll be some prosecutions in the pipeline of people who voted illegally who should not have. Assistant Attorney General Harmeet Dillon tells Bloomberg's Balance of Power her plans are consistent with DOJ policy, but she says the number of election monitors will probably be historic for a Republican administration.

5:42And speaking of elections, Nathan, it's primary day in Florida, Wyoming, and Alaska. And Bloomberg's Amy Morris reports. We begin in Florida, where voters will choose nominees to replace Governor Ron DeSantis. and to complete the remainder of Secretary of State Marco Rubio's Senate term. The state will also hold its first congressional primaries since adopting a redrawn district map designed to boost Republican candidates in November. Voters in Wyoming and Alaska will choose nominees for governor, Senate, and the House. And Alaska voters will also decide on a statewide ballot measure to impose contribution limits on state and local political campaigns.

6:19Amy Morris, Bloomberg Radio. Amy, thanks. Turning to markets now, futures are lower. following yesterday's declines on Wall Street and 30-year government bonds continue to drop around the world, pushing yields to multi-decade highs. We get more on the big moves from Bloomberg News executive editor Mark Cutmore. Look, we've got fiscal incontinence in most countries in the world, but particularly, or most relevantly, I should say, out of the US. And we've also got an inflation problem with clear high energy prices and not just high kind of crude prices, but high-end oil product prices, whether gasoline or diesel, etc., which affects the consumer.

6:57And again, particularly relevant for the US, and the US is the world's most important market, kind of drives the rest of the world on this, they've had inflation above target for five years now. So, you know, you've got fiscal incontinence at a time and they can't control inflation. And up until very recently, the economy looks very hot as well. I've been Bloomberg's Mark Cudmore. And in a note this morning, market strategist Ed Yardeny said there's no reason to panic on the U.S. bond just yet. Well, Nathan, Anthropic is on track to generate annualized revenue of more than$65 billion based on its current performance.

7:31That's more than a seven-fold increase from its pace at the end of last year. Mandeep Singh covers the company for Bloomberg Intelligence. Now we are talking, you know,$10 billion plus in a quarter. and they seem to be quite optimistic about sustaining this kind of, you know, five to ten times growth. So that will easily take them to$100 billion plus by the end of the year. And Bloomberg Intelligence Analyst Mandeep Singh notes that Anthropic, the developer of Claude and Fable, was valued at$965 billion after its latest funding round, making it one of the world's largest private companies and eclipsing rival OpenAI's valuation for the first time.

8:11Another big tech company, Meta Platforms, Karen, is going to be in federal court in Oakland, California today. A high-stakes jury trial is about to get underway, and we get more from Bloomberg's Doug Krizner. Four states, California, Colorado, Kentucky, and New Jersey, are alleging Meta broke consumer protection laws in deliberately designing Facebook and Instagram to encourage compulsive use among young users. Now, this case carries enormous risk with potential penalties of as much as$1.4 trillion. The state AGs are also seeking to force Meta to change how it operates its platforms. Now, the company denied the allegations and accused the AGs of seeking unreasonable design changes and an outlandish payout.

8:55A growing body of research shows heavy use of algorithm-driven platforms can be dangerously unhealthy. Doug Krizner, Bloomberg Radio. All right, Doug, thank you. And a note from the world of sports this morning. Jeannie Buss is challenging the sale of her family's stake in the Los Angeles Lakers to the team's new owners, Joshua Kushner and Bob Iger. The Buss family retained about an 18 percent stake after selling majority control of the Lakers to billionaire Mark Walter last year. The family has since agreed to sell its remaining interest to Kushner and Iger. Jeannie Buss' attorney says a court order requires the family to maintain enough ownership for her to stay in control of the team.

9:39Time 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. Luigi Mangione's murder trial in New York State Court has been delayed by at least three months while a judge weighs whether to dismiss the case. Mangione pleaded guilty Friday to separate stalking charges in federal court, where he admitted he fatally shot United Health Group executive Brian Thompson. His lawyers then asked a New York judge to dismiss the murder case on the grounds that Mangione, who is 28, can't be prosecuted twice for the same acts, even if the charges are different.

10:16Hurricane Lala and its remnants left a trail of destruction across Hawaii. Officials say a 90-year-old woman who was missing was found dead. Crews now working to clear roads and restore power to tens of thousands. After the storm dumped more than three feet of rain in some areas, mudslides taking down hillsides, those affected are grappling with the loss. Everything's just ruined. It's gone in seconds. Gone. Tree branches even littered the inside of Kona International Airport. Storms soaked Indiana now in cleanup mode after days of storms and flooding. The weather event left at least seven people dead, including a four-year-old boy.

10:58Indianapolis residents were finally able to return to their flooded homes Monday, and what they saw was heartbreaking. This man spent the day emptying his water log belongings from his trailer. I've been trying to keep a positive mindset. I've been trying to just not think about it too much, because I know as much as I want things to be all right, it's obviously not. Power outages peaked at more than 300 ,000 homes and businesses. 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.

11:34And for that, we bring in John Stashauer. Thanks, Karen. The NBA has not yet finished its examination as to whether the Clippers illegally paid star player Kawhi Leonard through a company to circumvent the salary cap. An ESPN report out says that the investigation will find that team owner Steve Ballmer did not illegally funnel money to Leonard. Baseball in Chicago, White Sox and Cubs both having strong seasons at Wrigley Field. Pete Crow Armstrong hit a leadoff home run, then a walk-off shot in a Cubs victory. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

12:16Coast 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. The U.S. and Iran are now officially past the 60-day interim peace deal that they'd largely abandoned. And now President Trump says he's not interested in extending it, as he insists the U.S. has total control over the Strait of Hormuz. The street is open and the oil prices are coming down and they will continue to come down unless we decide to do something far more drastic than we're doing. That was President Trump speaking from the Oval Office.

12:53Joining us this morning from Dubai is the head of Middle East coverage for Bloomberg News, Stuart Livingston Wallace. So, Stuart, the interim peace deal seems like it hadn't really been in effect for quite a while now. But with the president now saying he's not interested in extending it, where does that leave things now? Good morning. Good morning, Nathan. No, I mean, it leaves us exactly where we were a week ago. I mean, effectively, that deal was dead, you know, a few days after it started. And Trump himself effectively said it was over several weeks ago, the Iranians been making similar noises.

13:23And look, the reality on the ground is that we had a second wave of hostilities in the middle of July that was not on the scale of what we saw in March and April. But nonetheless, you know, it was a pretty serious exchange of fire. So I don't think anyone was anticipating that it was necessarily going to be rolled over or extended. Where we are is in effect, you know, these ongoing and very vague talks that seem to be going on via the mediators with a very little clarity about what's actually being discussed. Though I suspect we can assume that the kind of the contours of what you saw in the memorandum of understanding will be largely the contours of what you're going to see and what's being discussed right now.

14:00So it's going to be along those lines because those are the key issues and that's fundamentally how you're going to address them. Okay, so that gets to the negotiations that Iran and Oman say that they're still underway with. And, you know, President Trump has also talked about there being a back channel with the Islamic Revolutionary Guard Corps. Is that part of what you're saying is the murkiness around what kind of discussions are happening right now? Yeah, that's exactly right. So, I mean, in some respects, the Iran-Oman negotiations are over a very specific issue of control or rather governance of the Strait of Hormuz.

14:34So that would include which navigation routes, what if any fees can be extracted, and those sorts of things. But that's very much a preamble to these wider negotiations. So I think the idea is always restore some semblance of normality to Hormuz, which is going to be a stretch, but let's assume you can get that done. And that gives everyone enough breathing space then to have those much wider discussions about the nuclear file and the missiles and the support for proxies and this very, very long list of very complex issues that have basically been going on for decades. So that's kind of a sequence that we're anticipating.

15:08All right. And what do we understand then about the reality on the ground when it comes to the status of the Strait of Hormuz? When President Trump is saying that the naval blockade is acting as a wall of steel, he says it's totally open. while, as we've been saying, Iran and Oman are still negotiating over their own control of the strain. So, I mean, I can categorically say that Strait of Hormuz is not open, if by open we mean, you know, what it was six months ago where ships would go through freely. And the clearest evidence for that is the fact that most ships that are going through, and there are some, are having to go through with their transponders shut off.

15:44That is, you know, these so-called basically dark sailings where you can't tell where the ship is and it's much harder to identify their position until they emerge on the other side of the strait and suddenly, you know, they're in the middle of the Indian Ocean. So if that constitutes open, then yes, maybe. But the reality is, is that you're having to do a lot of these kind of dark voyages and shuttle services, and it's all by subterfuge. That is not the normal practice or has not been the normal practice in the lifetime of the strait. On the other hand, the US blockade does seem to be quite effective in terms of certainly curbing, if not entirely halting the flow of Iranian oil out.

16:18But to what extent is really hard to tell. So, you know, does the U.S. have control over Hormuzin? No. The reality is that both sides seem to have a degree of control and are certainly continuing to hamper the free flow of goods. 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.

17:00Plus, 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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