US Sanctions Russian Oil Giants; China Says US Trade Talks Set for Friday

0:00Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London with the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled and so you know what actually matters as the day gets going. From Brussels, I'm following 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.

0:37So 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.

1:02Bloomberg Audio Studios, podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. And Karen, the jump in oil this morning comes as President Donald Trump is ramping up pressure on his Russian counterpart, Vladimir Putin, to negotiate an end to the war in Ukraine. The U.S. has announced sanctions on Russia's biggest oil producers, state-run giant Rosneft and Luke Oil. The sanctions mark a U-turn for President Trump, who just last week announced he wanted to meet with Putin in the coming weeks. Now he says he doesn't want a wasted meeting.

1:40We canceled the meeting with President Putin. It just, it didn't feel right to me. It didn't feel like we were going to get to the place we have to get. So I canceled it, but we'll do it in the future. Mr. President, can you tell us a little bit about why you're elevating sanctions against Russia right now? I just felt it was time. We've waited a long time. I thought that would go long before the Middle East. That was President Trump speaking at the White House. And this morning, the European Union has joined the U.S. with its own new sanctions package targeting Russia's energy infrastructure.

2:11We have new developments, Nathan, this morning on the trade front. China says Vice Premier Holly Fung plans to meet with U.S. officials, including Treasury Secretary Scott Besant and Kuala Lumpur, tomorrow for the next round of talks. The trade truce that's currently in place is set to expire on November 10th. The meeting comes as both sides have escalated retaliatory measures in recent weeks. Talks are expected later this month between Xi and President Donald Trump on the sidelines of the Asia-Pacific Economic Cooperation Leader Summit in South Korea. Well, back here in New York, Karen, the final debate for mayor is in the books.

2:46And Bloomberg's John Tucker joins us with the recap. John, good morning. And good morning, Nathan. Former Governor Andrew Cuomo sought to cast frontrunner and Democratic Socialist Zoran Bandani as inexperienced and unprepared. Affordable housing was just one issue on which they clashed. I understand my friend doesn't really understand government. The governor doesn't build housing in New York City. Not if it's you. No, no, legally, there are jurisdictions. Republican Curtis Sliwa was quick to remind everybody that Cuomo left office under a cloud of sex harassment allegations. Andrew, you didn't leave.

3:22You fled from being impeached by the Democrats in the state legislature. Leave. You fled. Trailing in the polls, Sliwa's under pressure to drop out and support Cuomo. A recent New York Post headline read, Just walk away, beret, referring to Sliwa's signature red beret. After the debate ended, political betting market, Polymarket showed Mamdani with a 93 % chance of becoming mayor and Cuomo with a 5.7 % shot. Little change from the weeks prior. The early voting starts Saturday. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Now we want to get the latest on the government shutdown.

4:01It's day 23 of the funding impasse in Washington, and a divide may be forming in the Republican Party on how to end it. Members of the ultra-conservative House Freedom Caucus are pushing for a long-term stopgap spending bill that could run well into next year. But House Speaker Mike Johnson has said he wants to negotiate individual spending bills for the fiscal year that began this month. That would probably require another short-term stopgap. House Ways and Means Chairman Jason Smith says the longer-term stopgap may be the way to go. I've been hearing this conversation from senators, from House members, that a CR not just for a year but to December 1st of next year.

4:42This has been conversations that I've been hearing in Washington, D.C. House Ways and Means Chair Jason Smith discussed the issue on Bloomberg's balance of power. The current stopgap that the Senate has repeatedly failed to pass would expire on November 21st. Stay with Bloomberg. We'll hear more from Democrats on the shutdown when House Minority Leader Hakeem Jeffries speaks with the Bloomberg's David Gurra in Washington. You can catch that conversation today at noon Wall Street time on Bloomberg Radio and the Bloomberg podcast page on YouTube. Meanwhile, at the White House, Karen, President Trump's plans for a massive ballroom at the executive mansion have gotten a lot more extensive than he originally planned.

5:22The president now says he will have to demolish the entire East Wing to make way for the project. We are using little sections of footings and various other things, but that's sort of irrelevant. In order to do it properly, we had to take down the existing structure. President Trump also says the cost is now up to$300 million. Last summer, he pegged it at$200 million, but he says it'll be paid for by himself and private donors. The National Trust for Historic Preservation is calling on the president to pause the East Wing demolition so it can go through public review. The group is also expressing concern that the size of the ballroom will overwhelm the White House itself.

5:58Nathan, let's turn now to the markets and earnings. And shares of Tesla, they're down almost 3 % in early trading profit, plunged as rising costs undercut a record quarter of vehicle sales. CEO Elon Musk spent the end of Tesla's earnings call pleading with investors to ratify his upcoming$1 trillion pay package. He also blasted the shareholder advisory firms that have come out against the plan. Like I said, I just don't feel comfortable building a robot army here and then being ousted because of some asinine recommendations from ISS and Glass-Lewis who have no freaking clue. I mean, those guys are corporate terrorists.

6:38And shareholders will vote on Elon Musk's pay package at Tesla's annual meeting on November 6th in Austin. Well, it's a different stock story at Volvo this morning, Karen. Karen, those shares are zooming higher this morning by 33 percent. The Swedish automaker reported better than expected profit in the third quarter, benefiting from its nearly$2 billion cost saving program. And on Wall Street, Nathan, bonuses are expected to hit a record this year. And Bloomberg's Lisa Mateo has the details from New York. Lisa, good morning. Good morning, Karen. So after a long drought, big banks, while they've been pulling in profits from soaring stocks or return to more dealmaking, An annual report from New York State Comptroller Thomas DiNapoli, well, it shows profits at the 130 firms that belong to the New York Stock Exchange reached$30.4 billion in the first half of the year and will hit the highest level on record if that pace continues, which means higher bonuses.

7:32Compensation expenses increased by almost 10 % in the first half of 2025 from the prior year. bonuses hit a record last year with the average reaching$244 ,700. Lisa Mateo, Bloomberg Radio.

7:49Time 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. The U.S. military has launched its ninth strike against an alleged drug-carrying vessel, killing three people in the waters off the eastern Pacific Ocean. Defense Secretary Pete Hegseth announced the strike on social media last night. It further expands the Trump administration's campaign against drug trafficking in South America. Wednesday's strike followed a strike Tuesday night, also in the eastern Pacific, that killed two people.

8:23At the White House, President Trump said the strikes could expand even more. We will hit them very hard when they come in by land. And they haven't experienced that yet, but now we're totally prepared to do that. we'll probably go back to Congress and explain exactly what we're doing when we come to the land. We don't have to do that. The attacks were departures from the seven previous U.S. strikes that had targeted vessels in the Caribbean. They bring the death toll to at least 37 from attacks that began last month. Vice President J.D. Vance is seeking to ease concerns in Israel that the Trump administration is dictating terms to its closest ally in the Middle East.

9:03He and other top U.S. envoys are visiting Israel this week to support the Gaza ceasefire agreement. Secretary of State Marco Rubio will meet with Prime Minister Benjamin Netanyahu in Israel on Friday. Rubio expressed optimism about the peace deal. We feel good. We have a real opportunity to confront and solve those challenges and take advantage of the historic opportunities that this peace deal presents. The ceasefire that began on October 10th continues to hold. New clues in the search for the thieves who broke into the Louvre last weekend in Paris, stealing some of the crown jewels of France.

9:40Investigators in Paris say they found traces of DNA on a helmet and glove left behind by the thieves who made off with more than$100 million in jewels from the Louvre Sunday. The DNA now being analyzed in the hopes of identifying the suspects. Broadway musicians say if a settlement is not reached during negotiations by sometime this morning, they will go on strike. They have been without a contract since the end of August. Nearly 1 ,200 musicians say they have not gotten fair working conditions as Broadway thrives. Global News, 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr and this is Bloomberg Karen.

10:23Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. The new manager of the San Francisco Giants has never worked in professional baseball before. 47-year-old Tony Vitello gets the Giants job after being the head coach at the University of Tennessee. He's the first to go directly from a college job to the major leagues. Giants haven't made the playoffs the last four years. Eight of the last nine, Vitello replaces Bob Melvin. World Series starts tomorrow in Toronto. The Blue Jays have yet to name their game one starter. The Dodgers are going with Blake Snell.

10:55Vikings and Chargers play tonight to start Week 8. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit Bloomberg.com slash podcast offer to learn more. Coast 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. It is a major new bid to pressure Russia to end its war in Ukraine, a major reversal for President Trump, slapping sanctions on Russia's two biggest oil producers, Rosneft and Luke Oil, to try to bring Vladimir Putin to the table with Ukraine's Volodymyr Zelensky.

11:52These are tremendous sanctions. These are very big. Those are against their two big oil companies, and we hope that they won't be on for long. We hope that the war will be settled. That was President Trump announcing the sanctions at the White House. For more, we're joined this morning from Brussels by Bloomberg's Richard Bravo. Richard, good morning. The president says these sanctions are big. How big are they? Walk us through what the impact could be. Hi. Yes, this is a big deal. What we're seeing now is a coordinated push by Western allies, the EU, the U.S., and the U.K., to really tighten the screws on Vladimir Putin and try to bring him to the negotiating table.

12:30And in their eyes, they really want to get a ceasefire, something which Trump has been pushing for but has not been able to attain yet. So the fact that Trump, for the very first time is imposing sanctions directly on Russia, it's a very big deal. And we're seeing this European Union summit today in Brussels. The leaders are very happy that this is happening, and they see this as potentially a big move in trying to convince Moscow to change its course. And in terms of that coordination, the European Union has announced another round of sanctions of its own, right? That's exactly right. This is the 19th package of sanctions, which were adopted a little bit earlier this morning, just hours after Trump made his announcement.

13:20And this also is a very big deal. The ban will ban LNG imports from 2027. It will add more than 100 shadow fleet vessels to the sanctions list. And interestingly, it will also target third countries that are helping Russia evade sanctions, including Chinese companies. So a really big push to try and change Putin's mind about how he's waging this war. And we're seeing a big reaction in the oil market as well, with both West Texas Intermediate and Brent crude up about 5 % in the session just this morning. It's a pretty big reversal from the previous stance of just capping the price of Russian oil without trying to affect the flows.

14:08Is this the kind of thing that could blow back on Western economies? Well, what we don't know is how much Washington coordinated with Brussels and other European countries. And as you say, it is a surprise because we've seen countries like Germany really push back against this kind to move because they don't want it to blow back against their industry. What is not known right now is what degree of coordination there was before Trump made his announcement and whether these countries were included and if we do see any pushback. But right now, we haven't seen anything just yet. This is the kind of thing as well that could affect, obviously, buyers of Russian oil.

14:51President Trump has been very critical, particularly of India and to some respects, China as well. What kind of impact could this have on them and on the ongoing trade talks between the U.S. and those countries? Well, as is always the case with sanctions, it really comes down to enforcement. And if the U.S. and its Western allies do enforce these sanctions and they do really go after imposing secondary sanctions, as you mentioned, on countries like India and China. And this could have a very massive effect. And obviously, that will trickle into any kind of political discussions being had over things like trade.

15:30This is a very big step. And in terms of the EU sanctions, we've seen China already push back against them, saying that These are illegal moves. So we can definitely expect a lot more on that front as the day unfolds. So you're raising the question about enforcement. Does that raise a question for you about the seriousness of these sanctions, whether they will indeed be enforced not just by the U.S., but by the European Union? Well, that really remains to be seen. But all indications are that they really want to tighten the screws. And the U.S. didn't need to do this. So it would stand to reason that this is a move to try and actually bring Putin to the table in a way that he hasn't come before.

16:19So I think everyone is expecting that this time things are a little bit different and they really are tightening up measures. That is the ultimate question, isn't it? Because we've seen so many sanctions packages levied against Russia over the last nearly four years now of this war. And the Russian economy, as battered as it's been, has still managed to work its way through the punishments that have been put out there all this time. What's the likelihood that Russia could sort of wiggle its way out from under this latest round of sanctions? Well, that really is a million-dollar question. And as you mentioned, Putin is very good at evading sanctions.

17:02But what does feel different this time is the U.S. has not sanctioned Rosneft and Lukoil before. And these are Russia's two largest oil producers. So the potential impact is very, very big. But it does remain to be seen what happens on the enforcement side. As far as the reaction that we're hearing from the rest of the world, what are we hearing from Ukraine? What are we hearing from some of the oil producers? Have we gotten some of that response at this point? I've not seen reactions from the oil producers yet, but Zelensky is attending the European Summit in Brussels today. And on his way into the meeting, he seemed very pleased with the moves.

17:46And he applauded the joint effort to bring Putin to task. And he said the American sanctions are very important and that it's a good signal to other countries around the world that they also need to join this joint effort. And of course, this is coming after the Ukrainian leader was left sort of empty handed on the question of getting Tomahawk missiles from the U.S. in his last meetings with President Trump. In our last minute here, what does that mean for the for the war going forward? It still seems like it could be a pretty complicated dance here. Well, negotiating with with Donald Trump is always complicated.

18:24And he seemed to swing back and forth in terms of his support for Ukraine and then battering Zelensky. So the EU is really putting forward a concerted effort to try and just keep pressing Trump and trying to bring him on board. And it seems to work sometimes. And then he sort of swings back to the other side of the pendulum. But right now, Zelensky seems happy. The EU leaders seem happy. So we'll have to see if it sticks for a little bit longer this time. 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.

19:03Eastern 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. 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.

19:40And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

19:51Thank you.