US at Odds With Allies Over Hormuz, G7 Summit in France Begins

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1:14And 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. This coffee shop? Running smooth thanks to Genius. From Global Payments, instant transactions, effortless inventory, and synchronized operations. Big League reliability for any business. That's Genius. 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 from the G7 Leaders Summit in Evian, France.

2:03President Trump has arrived at a gathering touting an interim deal with Iran to reopen the Strait of Hormuz. The president says the agreement is already having an impact. The deal's outside, and the strait is already partially opened. As you know, they're doing a little hunting for a couple of mines that they've already found. but it's essentially ships are starting to go out now on Friday. It'll be completely open. President Trump spoke alongside French President Emmanuel Macron at the G7. Vice President J.D. Vance made the rounds on television to defend the deal. The Iranians don't get a dime unless they behave and change their behavior.

2:41And this means that Iran will never have a nuclear weapon. When you say they don't get a dime, do they ever get an American dime, a taxpayer dollar? No. So number one, first of all, they never get a dime of American taxpayer money ever. Full stop. Not even close. Vice President J.D. Vance spoke with Fox News host Sean Hannity. He's expected to represent the U.S. when both sides signed the deal on Friday. Well, Nathan, despite those assurances from President Trump and Vice President Vance, European leaders are sounding less optimistic about the Strait of Hormuz reopening by Friday. Bloomberg Chief Europe Correspondent Oliver Crook is covering the G7 in Evian.

3:17There's also this effort by European leaders and their militaries to potentially have this demining mission that would go to the Strait of Hormuz. But they say they can really only do that once they understand this peace deal and once there is an actually durable peace deal. There's also a real question about whether or not some of these leaders like Georgia Maloney has suggested that she doesn't really want to participate in anything until there's a full deal that also includes Lebanon. So these are some of the concerns I think the G7 leaders will be having today. And Bloomberg's Oliver Crook reports, senior administration officials are saying it could take up to two weeks for shipping to increase through the strait and even longer to return to pre-war levels.

3:52Today, there will be a focus on Ukraine along with Iran. Ukrainian President Volodymyr Zelensky has arrived in Evian for a morning session focused on his country's war with Russia. And Karen, at least one key Gulf oil producer is already making plans for Hormuz to reopen. Bloomberg News has learned Qatar plans to rapidly boost production of liquefied natural gas once shipping through the waterway is restored. Qatar Energies told buyers it plans to raise output to about 50 percent capacity in the first month, then about 80 percent a month later. The energy provider says full capacity will take years to restore due to damage from Iranian missile strikes.

4:28Nathan, the slide in oil continues this morning. Right now, Brent is at$81.39 a barrel. NYMEX crude oil at$78.87. Oil is now headed for its longest losing streak of the year. It's down four days in a row. Both Morgan Stanley and Goldman Sachs have cut price outlooks for the coming quarters. In fact, Goldman predicts Persian Gulf exports will reach pre-war levels by the end of July. Meanwhile, the U.S. emergency supply of crude oil, Karen, has fallen to its lowest level since 1983. And we get details from Bloomberg's Charlie Pellett. It comes as the Trump administration moves toward completing its plan to release 172 million barrels to ease surging fuel prices spurred by the war in Iran.

5:14The SPR, the Strategic Petroleum Reserve, was created after the Arab oil embargo of the early 1970s. In March, the U.S. Energy Department announced a plan to release oil from the Strategic Reserve as part of a coordinated effort by nations around the world less than two weeks after the U.S. and Israel launched attacks on Iran. In New York, Charlie Pellett, Bloomberg Radio. All right, Charlie, thank you. In other news this morning, eight people have died after a B-52 bomber crashed shortly after takeoff from a U.S. Air Force base in Southern California. The aircraft was on a routine test mission when the incident occurred.

5:53Deputy Commander Colonel James Hayes says they aren't sure yet what led to the crash. At this point, we don't have any indication as to what the cause was of this. We won't be able to release that information, and we don't have an ability to get that anytime soon. And Colonel James Hayes says the investigation could take up to six months to complete. Let's turn back to markets now, Karen. stocks are coming off a major rally on Wall Street. The Dow Jones Industrial Average closed at an all-time high. The S &P 500 rose 1.7 percent, while the tech-heavy Nasdaq 100 added 3.1 percent. Nathan, it's also shaping up to be another good day for SpaceX investors.

6:34The stock is up 10.9 percent in pre-market trading, and that's building on its nearly 40 percent gain across its first two sessions as a public company. The Elon Musk-led company is now worth more than$2.5 trillion. David Bauer is co-head of ECM America's JPMorgan Chase. It's all systems go to make a pun intended for SpaceX. But I think if there was any hesitancy of, should I continue to buy up 20%, I think the answer is yes. And if you look long enough, this is a business that could be generationally transformational. J.P. Morgan's David Bauer. SpaceX is now one of the six biggest companies in the world.

7:14And that rally, Karen, has vaulted SpaceX CEO Elon Musk to even loftier wealth levels. The world's first trillionaire's net worth throws more than 10 % to$1.27 trillion. And Musk wasn't the only one to benefit. The 500 richest people on the globe added$336 billion to their collective fortunes. That is the biggest haul ever recorded in a single day on the Bloomberg Billionaires Index. In Asia, Nathan, the Bank of Japan has raised interest rates to a 31-year high of 1%. The BOJ hiked borrowing costs by 25 basis points to a level not seen since 1995. Sherry Ann is Bloomberg's editor-at-large in Tokyo.

7:55The BOJ wants the pace of hikes to depend on the Middle East to impact the economic outlook. of course, will be watching what the inflationary impact will be from a peace deal if, in fact, that agreement sticks. So far, we know that, of course, Japan, before the conflict, imported more than 90 percent of oil from the Middle East. So this will be very consequential. Bloomberg Sherry on also reports that BOJ plans to keep raising rates in response to developments in the economy and prices. And Karen, more central banks than ever expect to increase their gold reserves. In a survey of 74 central banks, 45 % said they plan to buy in the coming year.

8:31Gold prices more than doubled over the past three years, but some of those gains have been erased after the Middle East war fueled bets that interest rates will need to stay higher for longer. And checking gold prices right now in the COMEX, they're up four-tenths of one percent. Gold's trading at$4 ,367.90 per ounce. Well, speaking of gold, Nathan, let's talk about merchandise for the New York Knicks. They are now the top-selling championship team on online sports seller Fanatics. Bloomberg's Tom Busby has the numbers. It's over! It's over! Nick fans, this is not a dream! Your long, long wait has ended!

9:08But just after New York's victory on Saturday night, Fanatics released more than 300 Knick-branded championship hats, hoodies, t-shirts, and other products. At one point, the company said it was taking in 8 ,000 orders per minute. Added up, and the Knicks are now the top-selling championship team ever on the site, topping the NFL's Philadelphia Eagles for the record for sales in the 24-hour period after winning a title. Tom Busby, Bloomberg Radio.

9:42Time 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 John Tucker. John, good morning. Good morning, Karen. in New Jersey. An investigation underway after an ICE agent fired a weapon Monday morning in Ocean County. A person fled the scene with a vehicle allegedly striking the agent during the encounter. Local residents aren't too happy. All different kinds of police that you could imagine that we've never seen in our lives, like they're all parking in our parking lot. And we're like, what is going on here? According to local police, an ICE agent was attempting to apprehend somebody in a vehicle in Manahawken.

10:16It's unknown if the driver was struck. No official response from the Trump Justice Department after California Governor Gavin Newsom claimed he and his wife are under federal investigation because of his vocal opposition to President Trump. He's coming after me because I'm considering running for president. Newsom says federal agents have knocked on the doors of his family, friends, and former employees. The source tells Bloomberg Justice Department probing whether Newsom had any knowledge or took part in the alleged corruption involving his former chief of staff. Republicans are set to finalize their picks in marquee races for U.S.

10:49Senate and governor in a state primary runoff election today in Georgia. Representative Mike Collins and former University of Tennessee football coach Derek Dooley are the finalists for the Republican nomination to challenge Senator John Ossoff in November. President Trump endorsed Collins in the runoff. Louisiana and Texas face several days of heavy rain, bringing a risk of floods as a potential tropical storm tries to organize in the western Gulf of Mexico, a broad area stretching from Texas to Jackson, Mississippi, forecast to receive four to five days of heavy rain. Global News, 24 hours a day and whenever you want it with Bloomberg News Now.

11:26I'm John Tucker and this is Bloomberg Karen. Thanks, John. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. A twist in the Brendan Sorsby saga. He's the Texas Tech quarterback ruled ineligible by the NCAA after he admitted to heavy betting on games. A judge then ruled in his favor to allow him to play. That ruling was heavily criticized, and now Sorsby is going pro. He can be taken in an NFL supplemental draft. Four World Cup games were played, and they all ended a tie, including a stunning scoreless game between Spain, ranked second in the world, and Cape Verde, who had never before played a World Cup game.

12:02That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

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15:00Coast 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. President Trump is using the G7 leader summit in France to tout his interim deal with Iran to reopen the Strait of Hormuz. And Vice President J.D. Vance has been making the TV rounds to boost the agreement as well. Their conventional military is destroyed. Their nuclear weapons program is destroyed. The Strait of Hormuz is now open. Now, we have two pathways. Is it open toll-free? It is open toll-free, and that's very explicit in the agreement.

15:34Now, as Vice President J.D. Vance speaking with Sean Hannity on Fox News last night, for more on how the deal is being received at the G7, we're joined by Bloomberg Chief Europe Correspondent Oliver Crook, who's covering this year's gathering in Evian, France. Oliver, is the deal being well-received among G7 allies? Good morning. I mean, good morning. I mean, the initial reaction, obviously, by European leaders and probably the rest of the world was that sigh of relief that there was sort of an end to the most kinetic part of this war, that we can transition from something from a ceasefire to something a little bit more durable.

16:06But shortly after that, we really have the questions flowing in, right? What is this actual deal? What is the timeline for it? What are the milestones? And critically, what has Iran actually agreed to? You know, the Europeans from the very beginning, as we've heard from Emmanuel Macron, they said, listen, they're also willing to help sort of militarily on the day after, once you have a more sort of established peace proposal, to help, for example, demine the Strait of Hormuz, to sort of, you know, make this sort of security arrangement on Hormuz a little bit stronger. But they're really only willing to do that if they can get their heads around what is exactly in this deal.

16:37There's also the question of the toll. We heard from the Iranians that that's, you know, it's only going to be toll-free for about 60 days. So these are a lot of the questions for the leaders here. Speaking with Donald Trump, we should say they're sitting around the table with him right now. An additional complication, for example, the Italians have said, Georgia Maloney, that they're only going to get in on this and help the United States with that arrangement if there's a deal not just with Iran but also for Lebanon. So there are a ton of questions here for the leaders. We should say that the Europeans are also relevant here because they have a number of economic sanctions on Iran.

17:06If the U.S. wants to have this sort of sanction relief be part of that proposal, the Europeans really need to understand the deal. And I think it's fair to say at the moment, A, they don't particularly understand it. And there's a bit of skepticism about sort of how robust it is. So what are the challenges ahead of the signing ceremony on Friday? Are we expecting our European leaders expecting any answers on some of those questions before that signing? Well, they are hoping to get some answers from the president himself. As I mentioned, they're having their Ukraine session right now. So you have the G7 leaders are around a table right now with Volodymyr Zelensky having that conversation.

17:40We should say that at noon here, so in about 45 minutes' time, you have the main Middle Eastern session. I think that that's where you're going to get a lot of the discussion about what the picture looks like going forward in the Gulf and the Strait of Hormuz in the future. We should say they're also joined not just by the G7, but also the leaders of Qatar, the UAE, and Egypt. So these guys are going to be people who are very active in the sort of architecture for the next day. There's also been a report doing the rounds from the Financial Times that the U.S. is thinking potentially about this reconstruction fund that could be, you know,$300 billion.

18:10It could involve the Gulf countries. And that would really set the kind of carrot side of this equation. The Americans have been dealing really with the stick, with the military intervention in Iran to try to motivate them to do what the United States would like. This would be a way to kind of sweeten it and create a sort of carrot. Whether or not that will be effective for the Iranians is entirely a different question. But again, Nathan, we're just trying to make sense of all this information as it's coming through and look at what the sort of power dynamic is going to look like in a couple of days.

18:34Unfortunately, Ali, we have just 30 seconds left, but you mentioned Ukraine's president is there. What's on the agenda as far as Ukraine goes? Yeah, I think for Zelensky, really the main issue here is the president of the United States, Donald Trump, yesterday said that basically now that we're all done and dusted with Iran, he's ready to re-engage with Ukraine, with Russia. For the Ukrainians, of course, they want him to re-engage in a way that is positive. So it's really a moment for him right now, literally as we speak, to convince the president of the United States to sort of craft what the next chapter of American involvement would look like in Ukraine.

19:05And we should say that since the Americans checked out of that process, the Ukrainians are in a much more dominant position. We can point to just the strikes overnight with the Ukrainians striking an oil refinery right near the Russian Federation's capital in Moscow. 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.

19:45Plus, 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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