Witkoff Advised Russia on How to Pitch Ukraine Plan to Trump; Hasset Frontrunner For Fed Chair

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 Lisa Mateo. And I'm Karen Moskow. Here are the stories we're following today. Karen, we begin with the latest efforts to end the war in Ukraine. A Kremlin official says U.S. presidential envoy Steve Witkoff will visit Russia next week, along with other American officials. Now, this comes as Bloomberg has learned that Witkoff held a phone call last month with a senior Kremlin official to suggest they work together on a plan for Ukraine similar to the Gaza peace deal and that Vladimir Putin should raise it with Donald Trump. Now, in an October 14th phone call that lasted a little over five minutes, Witkoff advised Yuri Yushikov, Putin's top foreign policy aide, on how the Russian leader should approach the issue with Trump.

1:51Now, his guidance included suggestions on setting up a Trump-Putin call before Vladimir Zelensky's White House visit later that week and using the Gaza Agreement as a way in. And according to transcripts obtained by Bloomberg News, Whitcoff advised Russia on how to bring up the topic with President Trump. Well, Lisa, Kremlin spokesman Dmitry Peskov did not immediately respond to comment. However, when asked about Whitcoff's approach while on Air Force One, President Trump said he hadn't reviewed the call, but that he heard it was a standard negotiation. He's going to sell this to Ukraine. He's going to sell Ukraine to Russia.

2:27That's what a dealmaker does. You've got to say, look, they want this. You've got to convince them with this. And I would imagine he's saying the same thing to Ukraine because each party has to give and take. In a separate social media post yesterday, he wrote that there are only a few remaining points of disagreement with tremendous progress made over the past week. In Europe, Karen, UK Chancellor Rachel Reeves will set out her budget later today as she tries to win over her party, the public and the markets. Let's go to London and get the very latest with Bloomberg's James Woolcock. James, good morning.

3:03Good morning, Lisa and Karen. Look, elusive economic growth has helped make Rachel Reeves the most unpopular chancellor since polling began, with UK government bond yields also hitting multi-decade highs. Today, she's widely expected to announce a range of tax hikes to fill a£30 billion fiscal hole a year after raising taxes and promising she wouldn't come back for more. Bloomberg Economics says the risk for this government is if revenue and GDP projections are too optimistic. Traders will question the credibility of long-term projections and keep demanding a risk premium on gilts. In London, James Wilcock, Bloomberg Radio.

3:41All right, James, thank you. Well, back here in the U.S., the government's latest round of negotiated drug pricing could save you big bucks. And Bloomberg's Dan Schwartzman reports. The U.S. government says it has negotiated a 71 percent discount off the list price for both Novo Nordisk's obesity drugs, Ozemping and Wigobi for Medicare patients. The latest round of Medicare price cuts affect 15 drugs in total, with discounts ranging from 38 to 85 percent. The Trump administration says the lower prices would add up to$12 billion in savings compared with what Medicare spent on those drugs last year.

4:14Trump has argued that pharma companies have been charging Americans more for drugs than elsewhere. Dan Schwartzman, Bloomberg Radio. All right, Dan, we now turn to the latest on the race to be the next chairman of the Federal Reserve. White House National Economic Council Director Kevin Hassett has emerged as a frontrunner. Bloomberg News has learned The Economist would be a close ally to President Trump and implement his approach to interest rate cutting if he were to lead the central bank. Hassett said he would accept the position. If he were to ask me to be Fed chair, then of course I would have to say yes, because I want to serve my country and I want to serve my president.

4:48But, you know, we'll see how it goes. There are a lot of great candidates. Kevin Hassett made the comments on Fox News. Treasury Secretary Scott Bessent has run the selection process, interviewing candidates to replace Powell. Well, let's turn to the markets now, Lisa, where futures are higher once again after three straight days of gains on Wall Street. A rebound in tech has led to a 3.5 percent gain over the most recent rally. Nadia Lovell is senior U.S. equity strategist at UBS. It's not all about tech, but tech is an important part of the story, just given the overall weight in the index. We do expect as we get into 2026 that we'll start to see a broadening out in the market, into things like healthcare, which we're already seeing that's underway.

5:31We also like areas like financials as well as utilities. So while tech will remain important, it won't be the whole story in 2026. UBS senior U.S. equity strategist Nadia Lovell and JP Morgan predict stocks will head even higher. Strategists expect the S &P 500 to trade around 7 ,500 points by the end of 2026, and that's about 11 % above current levels. Awesome stocks on the move this morning, Karen. Shares of Dell, they're up almost 5%. The computer maker is raising its annual projections for the key artificial intelligence server market. While shares of HP are down more than 5%, the PC and printer maker gave a profit outlook for the current year that fell short of estimates.

6:16HP also said it will cut 4 ,000 to 6 ,000 employees through fiscal 2028 by using more AI tools. And there are also job cuts over at McKinsey. The consulting firm says it's eliminated about 200 global tech jobs in the past week. McKinsey is joining rivals and using artificial intelligence to automate some positions. Well, Lisa, Warner Brothers Discovery has asked potential buyers to submit new sweetened offers after receiving an initial round of bids. Sources say the parent of HBO and CNN asked bidders to provide improved offers by December 1st. Paramount, Skydance, Comcast and Netflix are looking to buy some or all of Warner Brothers.

6:56Well, Bitcoin on the rise this morning. Right now, it's trading above 87 ,000, but that's well above its peak of 125 ,000. Reached earlier this year, Wayland Global Advisors founder and chairman Chris Wayland thinks we've seen the best from Bitcoin. I think this summer was actually the high point in many crypto assets, particularly Bitcoin, which is the leader. Wall Street killed Bitcoin. When we started putting up ETFs and everything else, we correlated these kind of interesting tokens to Wall Street. And that was the end. Well, Whelan Global Advisors founder and chairman Chris Whelan, Bitcoin remains on track for its worst month since 2022.

7:37And finally, Lisa, airlines are bracing for what stands to be the busiest Thanksgiving travel period on record. Carriers are anticipating more than 31 million passengers through December 1st. The travel period will be affected by factors such as air traffic controller shortages, fuel supply constraints, and tech outages, which may cause disruptions and extra stress for travelers.

8:03And time 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, speaking of extra stress for travelers, how will the weather across the nation play a role on the roads and in the air this Thanksgiving holiday? Bloomberg meteorologist Craig Allen has the latest. Some of the most disruptive weather today will be across the northern plains into the upper Midwest and then spread east of the Great Lakes. Rain is going to change to heavy snow, perhaps a foot or more, in Wisconsin from Madison to Milwaukee, then to Lansing, Detroit, Toledo, Cleveland, and then the heavy lake affects snow off Lake Erie in Ontario.

8:43And the south and east is going to be warm but showery, no severe weather like we had yesterday. A new storm pushing into the Pacific Northwest, and that one could really hamper travel home over the weekend. Bloomberg's Craig Allen. Democratic lawmakers who appeared in a social media video urging U.S. troops to defy illegal orders say the FBI has contacted them to begin scheduling interviews. It comes a day after the Pentagon announced it is investigating Democratic Senator Mark Kelly of Arizona over potential violations of military law. Senator Alyssa Slotkin of Michigan says that President Trump is attempting to use the FBI to scare us.

9:23Regardless of whether you agree with the video or don't agree with the video, the question to me is, is this the appropriate response for a president of the United States to go after and seek to weaponize the federal government against those he disagrees with? We're not the first group of people that he's done that with. We are not going to be the last group of people to do that. Senator Slotkin says President Trump's tweets against the lawmakers in the video has led to death threats against them. The National Park Service says it is going to start charging international tourists an extra$100 to enter some of the most popular U.S.

10:03parks. The announcement declaring America first entry fee policies comes as national parks deal with the strain of a major staff reduction and severe budget cuts. Global News 24 hours a day and whenever you want it with the 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. An 18-team college basketball tournament ends tonight in Las Vegas. The Players' Era Festival championship game will be Michigan against Gonzaga. Michigan beat Auburn in a battle of ranked teams by 30.

10:39Gonzaga beat Maryland by 39. The Lakers beat the Clippers 135-118. Luka Doncic 43 points, 13 assists, 9 rebounds. Orlando with a 51-point second quarter. The Magic won by 41 in Philadelphia. Just the second win of the year for the Wizards. 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.

11:23Nationwide on Sirius XM. and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. It is 512 on Wall Street. And yeah, Karen just said it. Stocks advancing, markets really pricing, and an almost certain reduction in borrowing costs. Here to dive more into the reason why, we have Daniel Morris joining us. He's Chief Market Strategist, BNP Paribas Asset Management. Daniel, thanks for joining us. I want to start with eco data. Okay, so it's finally starting to trickle in after the government shut down. Yesterday, we had some weak U.S. consumer data. Retail sales rose modestly.

11:59How did the markets digest it? Well, I guess we're still asking ourselves the question on one hand, are we going to see a slowdown? Don't forget, a lot of people think that this year, next year is going to be a story of stagflation. Whereas on the other hand, there are reasons to think growth could pick back up. And unfortunately, we're getting, well, the little data that we are getting seems to be telling a mixed story. So you probably can pick whichever data that you like to support the view that you have. So certainly the weakness on the retail sales side wasn't too encouraging. On the other hand, generally speaking, the labor market data was positive.

12:34So we could use some more data and in addition use some more recent data. The labor market data was from September. And I think you're going to see the volatility, therefore, in the markets given the lack of the data until we get a better sense of how the economy is doing. Yeah, Daniel, you mentioned that. So the data is, yes, still playing catch up a lot from September. Does that matter to the Fed? Well, one hopes to have other sources to get a sense of what's happening with the economy. Certainly it's meaningful for them and to the degree that they're focusing now more on, potentially more on the labor market than necessarily on the inflation data.

13:13But I think, like everyone else, there are other sources of data that you can look at to get a sense of how that's evolving. But, you know, without question, it's not ideal to not have all the data that you can't have. And the market pricing about a 90 percent probability of a Fed rate cut next month. Do you agree? We are anticipating that you're going to get a cut. I think to keep in mind, though, I mean, that's relevant for the markets in the short term. You know, let's say that's been priced in and priced out at different points over the last few weeks. So that would have an effect on the equity market, but ultimately not such a big effect, because we think you're going to get the cuts eventually if it's December versus January.

13:51It isn't going to matter too much for the medium-term outlook, and I think that's what investors need to keep in mind. And we can't forget, first, about AI. There's been worries about overvaluations, kind of pushing investors to sell shares earlier in the month, kind of a pullback from riskier parts of the market. Is that still a concern for the markets? Well, it's something you should always be conscious of. Our view is that, yes, multiples are above average historically. But the scenario that we envision for next year is that, on one hand, you get pretty good earnings growth. Consensus assessments for NASDAQ are about 15 % earnings growth next year.

14:28But if you get somewhat less price appreciation in the index, your multiple is actually going to fall. So you have an environment where valuations actually do normalize at the same time that you still get pretty good market return. So alongside all of that, you're going to have the volatility that we've seen. But we think the median term trend is upward for tech stocks. And what else could spark some new momentum in the stock markets? I mean, there's geopolitical concerns, a lot going on. What are you keeping an eye on? Well, certainly what's going on in Europe, the negotiations with Ukraine is the big thing.

15:02I think we also want to keep in mind that generally relations between the U.S. and China seem to be a bit smoother. So if that were to change, that could have an impact on the market. But that's something that we'll always keep an eye on because it's hard to predict, needless to say. But it really does still seem an environment where geopolitics matter alongside everything else that you're always looking at in terms of employment and inflation. 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.

15:35Eastern 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.

16:13And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.