US Rejects Iran's New Offer; Trump Heads to Beijing This Week

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1:55Good morning. I'm John Tucker. And I'm Alexis Christophorus. Here are the stories we're following today. The rise in oil comes after the U.S. and Iran failed to agree on terms to end the war in the Middle East. The two sides rejecting each other's latest peace proposals to end the 10-week conflict. Let's get the very latest from Bloomberg's head of Middle East coverage, Stuart Livingstone Wallace. I think the key points of disagreement are pretty much everything. So that is specifically over the nuclear file, what happens to the enriched, highly enriched uranium that Iran is sitting on. what happens to control over Hormuz and the blockades, the double blockade that we've witnessed over the last several weeks, what happens to the proxies, the missile program, just about everything.

2:38So as far as we can tell, there's not a lot of common ground here. They don't seem to be moving towards something that potentially, you know, sets the clock ticking for a more definitive, long-lasting peace agreement and end to the war. Bloomberg's steward Livingston Wallace says President Trump has proposed that Iran permit passage through the Strait of Hormuz and Washington and its blockade on Iranian ports in the next month with nuclear talks to follow. Israeli Prime Minister Benjamin Netanyahu says the U.S.-Israeli war with Iran is not over. He tells CBS's 60 Minutes there's nuclear material in the country that still needs to be removed.

3:16I think it accomplished a great deal, but it's not over because there's still nuclear material, enriched uranium that has to be taken out of Iran. There are still enrichment sites that have to be dismantled. There are still proxies that Iran supports. There are ballistic missiles that they still want to produce. Now, we've degraded a lot of it, but all of that is still there, and there's work to be done. Israeli Prime Minister Netanyahu says he would like to end U.S. financial support for Israel's military over the next decade. And the standstill in the war comes as President Trump prepares to meet with China's Xi Jinping in Asia this week.

3:55Let's get that story from Bloomberg's Monica Ricks. President Trump's scheduled to meet with President Xi Jinping for a two-day summit in Beijing to discuss a trade framework that includes commodities such as Boeing aircraft, soybeans and rare earths, as well as export controls on AI semiconductors. U.S. Trade Representative Jameson Greer tells Bloomberg Iran will also be a big focus and China's purchases of Iranian oil. We're looking for stability with China. We don't want this to be something that derails the broader relationship or any agreements that might come out of our meeting in Beijing.

4:28The two leaders are expected to extend last year's trade truce. Monica Ricks, Bloomberg Radio. Thanks, Monica. And ahead of that presidential summit, some cooperation between both sides. China says it dismantled a cross-border drug trafficking network in a joint operation with the U.S. The official Xinhua News Agency says China's Ministry of Public Security and the U.S. Drug Enforcement Administration have detained two Chinese and three American nationals suspected of drug trafficking. And Treasury Secretary Scott Besson also making the trip to Asia, but his first stop is going to be in Japan.

5:02It's his third trip to Japan in a little more than a year as the Treasury Chief. Analysts say Besson's knowledge of Japan is unprecedented for a Treasury Secretary, and his comments on the country's economic policy are likely to be critical, with investors watching closely for any signs of tension during his visit. And John, in Europe, UK Prime Minister Keir Starmer will make a last-ditch effort to save his premiership today with a politically charged speech aimed at holding back calls for a leadership change. We get more from Bloomberg's James Woolcock in London. Starmer has given many big speeches about resetting the direction before, and it has never been quite as bleak for him.

5:43We used the word disastrous just there. They've lost more than 1 ,400 seats. By my counting, that's more than any sitting Labour government has ever lost in a cast election. Some of the language I was hearing from Labour campaigners over the weekend is the angriest I've certainly ever seen them. And it remains to be seen if one big speech can really turn it all around. Bloomberg's James Wilcox says among stormers, plan is a commitment to take the U.K. closer to the European Union. And an American and a French passenger linked to the Hondias cruise ship outbreak tested positive for the anti-strain of Hantavirus, a rare respiratory disease, less than a day after leaving the vessel.

6:25The French woman developed symptoms on the repatriation flight from the Canary Islands and worsened overnight. She's hospitalized and isolated, as are the other four French passengers of the 17 American passengers evacuated from the ship. One tested positive, but is not showing any symptoms, and another had mild symptoms. Dr. Carlos Del Rio, the distinguished professor in the Division of Infectious Diseases at Emory University School of Medicine, spoke with Bloomberg this weekend about the next step for officials. They'll put them on a plane, and the American citizens are going to come over to the Serious Communicable Disease Unit at the University of Nebraska, which is fairly large, And they're going to be then processed again over there.

7:05And if they happen to be symptomatic, if there's anything that is suggestions of infection, they'll be kept in isolation. Otherwise, if they still continue to be asymptomatic, they'll be sent home and encouraged to quarantine and to watch themselves for the next six to eight weeks. Emory, Professor Dr. Carlos de Rios, speaking of Bloomberg this weekend, heard live here on Bloomberg from 7 to 10 each weekend morning. Three people have died since the outbreak began. And five people who left the ship earlier were infected. And, John, we turn now to the markets where futures are a little changed as we begin the new trading week.

7:39The Nasdaq and S &P 500, though, are sitting at all-time highs. In fact, the S &P 500 has advanced for six straight weeks now. Wall Street will continue to focus this week on corporate earnings. We get a preview from Bloomberg's Charlie Pellett. It'll be all about artificial intelligence when we hear from Cisco Systems, Constellation Energy, and Applied Materials. they're expected to post robust revenue growth and offer optimistic annual guidance due to record spending on AI. Lori Calvacina is head of U.S. Equity Strategy at RBC Capital Markets. It really is the strength of the AI-related earnings story that is driving this market.

8:17That's why we do think people will continue to sort of follow the earnings and follow that big cap growth trade. Also reporting this week, Klarna, Barrick Mining, Figma, and HIMSS &HERS health. In New York, Charlie Pellett, Bloomberg Radio. Thanks, Charlie. And Alphabet may be on the verge of overtaking NVIDIA as the world's most valuable company. The gap between the two has narrowed considerably over the past six months with just$400 billion market cap between them as Alphabet takes the lead in nearly every aspect of artificial intelligence technology. Alphabet shares, they were up 34 % in April alone.

8:52It's best month since 2004. Investors say it's logical that Alphabet would ultimately seize the title of world's largest company because its tentacles reach into so many important parts of the tech industry and AI trade.

9:10Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Alexis. The remains of a U.S. soldier missing during military exercises in Morocco have been recovered in the Atlantic Ocean. The Army announced that First Lieutenant Kendrick Lamont Key Jr., who was 27 years old, was found by a Moroccan military search team. Key was one of two soldiers who fell off a cliff during a recreational hike. The two were reported missing May 2nd. The search continues for the second missing soldier.

9:46The CEO of Denver International Airport responded yesterday to Friday's runway death of a trespasser, calling it a horrible and preventable tragedy. A person who was not authorized to be on the tarmac crossed in front of an oncoming Frontier Airlines plane taxiing before taking off. The collision sparked an engine fire. Smoke filled the cabin and passengers were evacuated. This man was on the plane. He was getting ready to take off, and then it felt like a big speed bump. And then I look to the right, I see the wing is on fire and it's sparking. The person scaled a fence near the runway and made it onto the tarmac.

10:28Just two minutes later, the plane with 231 people and more than 21 ,000 pounds of fuel on board ran over the pedestrian. A Texas man accused of killing his pregnant wife and then fleeing the U.S. is due in court in Italy today. Lee Gilly is accused of strangling his wife Krista in their Houston home in 2024. His attorney, Dick DeGarren, speaking to Houston affiliate KTRK, expressed his concern about Gilly facing the death penalty back in Texas. When you flee, it can be taken as consciousness of guilt. I'm concerned about that. Attorney Dick DeGarren says his client didn't strangle his wife, adding he loved his wife.

11:08Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr, and this is Bloomberg. Alexis. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. The New York Knicks moving on to the Eastern Conference Finals. Second year in a row, they finished a second-round sweep of Philadelphia, winning by 30. The Knicks have won seven straight playoff games and have won by an average of 26 points. They tied a playoff record in Game 4. They made 25 three-pointers. San Antonio star Victor Wimbenyama threw an elbow at Naz Reed in the second quarter, got kicked out of the game, and the Spurs lost Game 4 at Minnesota.

11:46Anthony Edwards scored 36. The series is tied at 2. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Is passive investing costing you more than you think? Active ETFs aim to beat the benchmark, while passive ETFs just settle for them. Embrace an active strategy that helps you build stronger portfolios. Invest with a global leader in active fixed income ETFs with JPMorgan Asset Management. Visit jpmorgan.com slash get active to learn more. JPMorgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.

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14:02Abir, can you tell us how much daylight is there between the United States and Iran? Good morning, John. Look, I mean, both sides remain quite far apart on a framework to end this war that's been going on for about 70 days at this point and has effectively led to the closure, the full closure of the Strait of Hormuz. What we know is that the Trump administration was expecting a response from Iran on Friday. Now, that response came yesterday. The response was called totally unacceptable by President Trump. He said that he did not like it. Now, Iran came briefly to the table a few hours ago saying through the foreign ministry that everything it proposed during that in that proposal was reasonable and generous.

14:55And I quote here that they said those words, reasonable and generous. So what we know in that response that Iran had put through is that Iran essentially suggested that it wants its assets unfrozen. It also wants the oil sales that it puts through to be unsanctioned. And the Wall Street Journal reported earlier that Iran had suggested in its response that it would lift or move some of its highly enriched uranium to a third country, but completely refuse to dismantle all its nuclear program. Now, that is obviously something that the Americans had refused in the past. They continue to refuse to accept.

15:34But that is what Iran had put through. According to the Wall Street Journal, Iran did come out and say that they say that that report was inaccurate. Bloomberg was able to independently confirm that that came in the Iranian response as well. But as of now, what remains at the heart of the issue is that the Strait of Hormuz is still closed. It's facing a double blockade by both the American side and the Iranian side, John. Where does the ceasefire stand right now? That's still in effect. That's a good question. Look, I mean, the ceasefire still holds despite some sporadic attacks that we saw across the Persian Gulf.

16:10So what we know is that from the United Arab Emirates, where I am right now, and Kuwait, but also Qatar, a vessel across the coast in Qatar were attacked. That was what the government had said. But the ceasefire holistically remains in place. That is what also was said by American officials after a bunch of attacks across the United Arab Emirates happened at the beginning of last week on Monday here in Dubai. We had missile threat alerts that came through our phones starting at 7 p.m. And after that, the American side came out and said, actually, the ceasefire as it stands is still in place. So what we're seeing right now is an effective standing of the ceasefire agreement between the two, but no one really knows for sure what happens next, right?

17:00Do they come to the table again? Do the negotiations go into a different phase. That is certainly what we're looking out for over the next few days or so. And that is what remains to be seen. And again, part of the issue remains the Strait of Hormuz and weather. More shipments are going to go through the waterway here. 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, and anywhere else you get your podcasts. You can also listen live each morning starting at 5 a.m.

17:40Wall 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. 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 Alexis Christophorus. And I'm John Tucker. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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