00:00DANI: IT'S 5:00 A.M. IN NEW YORK CITY. I AM DANI BURGER WITH YOUR BLOOMBERG BRIEF. HERE'S WHAT YOU NEED TO KNOW THIS WEDNESDAY. TRUMP'S FED GAMBLE. THE ADMINISTRATION LOOKS FOR WAYS TO EXERT INFLUENCE ZEROING IN ON THE FED'S REGIONAL BANKS. SKY HIGH TARIFFS. THE U.S. IS CRUSHING 50% LEVY ON INDIAN GOODS TAKE PLACE TODAY. THE RESULTS YOU'VE BEEN WAITING FOR. NVIDIA WILL REPORT ITS QUARTERLY EARNINGS AFTER THE BELL TODAY. THE DRAMA CONTINUES ON IN WASHINGTON, D.C. IS COOK FIRED, IS COOKED NOT FIRED, WHAT ELSE DOES THE TRUMP ADMINISTRATION PLAN TO DO WITH THIS FEDERAL RESERVE? YOU WOULDN'T KNOW THE DRAMA IS CONTINUING BASED ON THIS EQUITY MARKET. WE ARE UNCHANGED THIS MORNING ON THE S & P, NASDAQ, WE ARE .0 4% AWAY FROM AN ALL-TIME HIGH. THE MORE INTERESTING MOVES WHERE THIS BOND MARKET. SOME SERIOUS CURVE STEEPENING THAT TOOK PLACE YESTERDAY. IT CONTINUES TODAY EVEN THOUGH WE ARE RALLYING ACROSS THE CURVE. TWO-YEAR YIELDS ARE DOWN BY THREE BASIS POINTS, SO PRICING IN A MORE DOVISH FED. THE LONG AND HAS BEEN UNDER SERIOUS PRESSURE. 10 YEAR YIELDS FELL, 30 YEAR YIELDS ROSE, THE TWO-YEAR IS AT ITS STEEPEST SINCE 2022. STOCKS MOVING UNDER THE SURFACE, YOUR STOCKS TO WATCH. > > IT IS A GREAT AND IMPORTANT DAY WHEN THE FED, THE WHITE HOUSE, MAY BE TAKING SOME OF THE MOMENTUM AND LIMELIGHT AWAY FROM NVIDIA, BUT THE PREMARKET IS HIGHER BY HALF A PERCENT FOR THE MEGA CAP MOMENTS. NVIDIA INVESTORS, AT LEAST THIS EARLY IN THE MORNING, SEEM TO THINK IT WILL BE A GOOD READ. ELI LILLY IS ANOTHER STOCK WE ARE WATCHING. THE PARTY CONTINUES IN THE STOCK. AFTER 24 HOURS, THE NEWS THAT THEIR OBESITY PILL IS HITTING AN ENORMOUS THRESHOLD. 24 HOURS LATER. HIGHER BY 1.5%. ANOTHER STOCK THAT WE WATCH, AND THEIR EARNINGS WERE A BLOWOUT NUMBER. ALSO INCREASING THEIR FOR YOUR GUIDANCE AND NOW GETTING REWARDED HIGHER BY ALMOST 30%. DANI: ALSO, WE WILL DISCUSS MORE ON THE RISKS SURROUNDING THE FED WITH HENRY ALLEN OF DEUTSCHE BANK. LATER THIS HOUR RBC JOINS US AHEAD OF NVIDIA EARNINGS. THE TRUMP ADMINISTRATION IS LOOKING TO HAVE MORE INFLUENCE OVER THE FED.LISTEN TO HIM SPEAKING TO REPORTERS AT A CABINET MEETING YESTERDAY. PRES. TRUMP: WE WILL HAVE A MAJORITY VERY SHORTLY, SO THAT WOULD BE GREAT. ONCE WE HAVE A MAJORITY COME HOUSING WILL SWING, AND IT WILL BE GREAT. PEOPLE ARE PAYING TOO HIGH OF AN INTEREST RATE. THAT'S THE ONLY PROBLEM WITH HOUSING. DANI: WE HEARD FROM THE FOMC ITSELF, ISSUING A STATEMENT, REITERATING THAT GOVERNORS MAY BE "REMOVED BY THE PRESIDENT ONLY FOR CAUSE AND THAT THE FED WOULD ABIDE BY ANY COURT DECISION RESULTING IN COOK'S CHALLENGE." LET'S LOOK AT WHAT WE HEARD FROM THE FED, NOT NECESSARILY A FORCEFUL PUSH BUT THAT THEY WILL ABIDE BY WHATEVER THE COURT DECIDES. > > THAT'S RIGHT. THIS UNDERSCORES THE FACT THAT THE SITUATION WE'VE ENDED UP IN BETWEEN DONALD TRUMP AND LISA COOK IS UNPRECEDENTED, SOMETHING THAT IS ULTIMATELY GOING TO BE LEFT UP TO THE COURTS TO DECIDE. WE'VE HEARD TRUMP SAY THAT HE WAS PREPARING FOR A LEGAL FIGHT. WE'VE OBVIOUSLY HEARD FROM LISA COOK'S SIDE OF THINGS. THERE IS A POTENTIAL LAWSUIT IN THE WORKS. IT SEEMS LIKE THIS MAY BE SOMETHING LEFT UP TO THE COURTS. BLOOMBERG ECONOMICS KIND OF MEASURED EARLIER SAYING THAT IT COULD BE THAT MAYBE SHE GETS SOME KIND OF AN INJUNCTION FROM A COURT. THERE IS A LOT TO CONTINUE SERVING ON THE FOMC, BUT I THINK BETWEEN THIS AND WHAT YOU'VE ULTIMATELY HEARD FROM THE FED ABOUT LEAVING IT UP TO THE COURT, IT COULD BE THAT WE ARE PREPARED FOR OR NEED TO PREPARE IT FOR WHAT COULD BE A LENGTHY LEGAL BATTLE. DANI: ARE REPORTING ALSO SUGGESTS THAT THEY STARTED TO LOOK AT THE FED'S REGIONAL BANKS, SOMETHING THAT HAD BEEN PUSHED ASIDE AS MAY BE A TIN HAT KIND OF THEORY FROM THE TRUMP ADMINISTRATION BEING ABLE TO DO SOMETHING LIKE THAT. WHAT WOULD IT LOOK LIKE, THE TRUMP ADMINISTRATION BEING ABLE TO EXERT THAT KIND OF INFLUENCE? JILL: THERE ARE A COUPLE OF COMPONENTS AT PLAY. FIRST OF ALL, THERE ARE THE BOARD OF GOVERNORS ON THE FOMC. THOSE ARE THE SEVEN POSITIONS OF WHICH TRUMP HAS. THE ABILITY TO APPOINT OBVIOUSLY, THAT IS WHERE LISA COOK COMES INTO THE EQUATION. POSITIONS THAT ARE WHITE HOUSE NOMINATED AND SENATE CONFIRMED. IN ADDITION, YOU HAVE FIVE REGIONAL FED PRESIDENTS FROM AN OVERALL GROUP OF 12 OBVIOUSLY ROTATING THAT ARE NOT SENATE CONFIRMED, NOT NOMINATED BY THE WHITE HOUSE. IT APPEARS FROM OUR REPORTING THAT WHAT THE TRUMP ADMINISTRATION IS TRYING TO DO IS GAIN FURTHER INSIGHT INTO HOW EXACTLY THAT PROCESS WORKS, HOW THEY MIGHT BE ABLE TO EXPAND SCRUTINY OVER THE SELECTION OF THOSE FEDERAL REGIONAL BANK PRESIDENTS. THAT IS WHERE I THINK ALL OF THIS COMES INTO PLAY. I THINK THAT DOES UNDERSCORE THE IDEA THAT THIS IS A PRETTY UNPRECEDENTED SITUATION WE ARE IN. OBVIOUSLY, YOU HAVE THE PRESIDENT OF THE UNITED STATES WEIGHING IN ON FEDERAL RESERVE PERSONNEL MATTERS AND A WAY WE HAVEN'T SEEN IN THE PAST. THIS COULD BE AN EXTENSION OF THAT, LOOKING AT THE REGIONAL PRESIDENTS AND HOW THEY ARE SELECTED IN A WAY WE HAVEN'T SEEN BEFORE EITHER. DANI: THE WALL STREET JOURNAL REPORTING THE TRUMP ADMINISTRATION IS TRYING TO REPLACE COOK AS SOON AS POSSIBLE. WE WILL SEE IF THAT PERSON WILL BE ALLOWED INTO THE BUILDING OR IF COOK WILL. THANK YOU VERY MUCH. HENRY ALLEN OF DEUTSCHE BANK WEIGHING IN ON THE LEGAL RESPONSE TO THE FIGHT, WRITING, "THE MARKET REACTION TO TRUMP'S MOOD TO FIRE LISA COOK HAS PROVEN RELATIVELY CONTAINED. THIS IS IMPORTANT, BECAUSE TO DATE IN AN ADVERSE MARKET REACTION HAS PROVEN A CONSISTENT BREAK ON POLICY." HENRY IS THE MACRO STRATEGIST AT DEUTSCHE BANK. STOCKS RALLIED YESTERDAY IN THE DOLLAR WAS LITTLE MOVED. WHAT DO YOU MAKE OF THE LACK OF REACTION AND MARKETS TO THE LATEST DEVELOPMENTS? HENRY: HI, DANI. SOME OF THE REACTION WAS WHAT YOU WOULD EXPECT, LIKE THE YIELD CURVE MOVING STEEPER, BUT THEN EQUITIES IN THE US AND -- THEN EQUITIES AND THE S & P 500 ALMOST MOVING BACK. EVERY TIME THE MARKET HITS ALL-TIME HIGHS, AND YOU SAW THIS IN THE FIRST TERM AS WELL, THE ADMINISTRATION FEELS MORE CONFIDENT AND EMBOLDENED. WHETHER THAT IS THINGS LIKE ATTACKING THE FED'S INDEPENDENCE ARE BEING MORE ESCALATORY ON THE TARIFF FRONT. YOU HAVE THE SITUATION WHERE IF WE HAVE A SELLOFF, AND WE SAW THIS IN APRIL AROUND LIBERATION DAY AND AGAIN WHEN YOU HAD ATTACKS ON POWELL IN JULY THAT WERE CONSIDERED CREDIBLE. AS LONG AS THE MARKET IS DOING WELL PARADOXICALLY THAT EMBOLDENS THE ADMINISTRATION TO KEEP BEING MORE AGGRESSIVE ON THE FED. DANI: DO YOU SEE THAT CHANGING THE IDEA THAT THE MARKET WILL DO WELL, THAT IT WILL PUSH BACK AGAINST TRUMP? IS THERE A SCENARIO WE COULD GET TO THAT POINT? IF IT'S NOT MOVING TO FIRE A FED GOVERNOR, WHAT WOULD IT BE? HENRY: I THINK THAT THE MARKET HASN'T QUITE WOKEN UP TO WHAT IS HAPPENING. I WAS QUITE SURPRISED WITH THE LACK OF FOLLOW-THROUGH IN YESTERDAY'S REACTION. AS YOU SHOWED IN YOUR CLIP AT THE START OF THIS PROGRAM, TRUMP SAID IF HE COULD GET A MAJORITY ON THE BOARD HE'S CAPABLE OF CHANGING A RANGE OF POLICY AREAS. YES, IF THE WIDER 12-MEMBER FOMC , BUT ACTUALLY THE 12 REGIONAL BANK PRESIDENTS HAVE TO BE REAPPROVED EVERY FIVE-YEARS BY THE FEDERAL RESERVE BOARD OF GOVERNORS. THAT NEXT APPROVAL IS ACTUALLY COMING UP IN Q1 2020 SIX. THERE ARE PROCEDURAL MECHANISMS THAT THEY COULD USE IN ORDER TO GET THEIR WAY ON THE FED MORE QUICKLY THAN THEY WOULD OTHERWISE IF THEY JUST WAITED FOR THE TERMS TO RUN OUT OF THE BOARD MEMBERS. ONE OTHER THING THEY CAN DO WITH CONTROL OF THE BOARD IS THE BOARD IS WHAT DECIDES THE INTEREST RATE ON RESERVE BALANCES. NORMALLY THAT FOLLOWS WITH THE FEDERAL FUNDS RATE IS SET AND IS MOVED ACCORDINGLY, BUT THEORETICALLY IF YOU HAVE A MAJORITY ON THE BOARD THEY COULD ADJUST IT IN A DIFFERENT DIRECTION EFFECTIVELY TAKING CONTROL OF POLICY. WITH CONTROL OF THE BOARD THIS IS CLEARLY A PARADIGM SHIFT IN THE WAY THAT MONETARY POLICY IS OPERATING, BECOMING MUCH MORE POLITICAL. DANI: IN TERMS OF WHAT ELSE THE FED COULD DO, IF IT'S MORE INFLUENCED BY THE WHITE HOUSE -- WE PLAYED A CLIP OF TRUMP EARLIER AND HE WAS EXPLICIT SAYING, I'M GETTING A MAJORITY ON THIS BOARD AND I WANT TO BRING MORTGAGE RATES DOWN. IT'S CLEAR THAT THAT IS WHAT THIS WHITE HOUSE ONCE. HOW EFFECTIVE WILL THAT EVEN BE CONSIDERING WE HAVE SEEN LONG END RATES MOVE HIGHER THROUGHOUT THE PAST COUPLE OF DAYS AND THE LAST COUPLE OF MONTHS? HENRY: THAT'S A VERY GOOD QUESTION. ACTUALLY IT'S SOMETHING I'M COGNIZANT OF THINKING ABOUT THIS ENTIRE EPISODE IS THAT ON ONE LEVEL IT'S UNPRECEDENTED THAT TRUMP IS SEEKING TO FIRE A FED GOVERNOR. THAT'S NOT HAPPENED BEFORE. IT'S ONLY IN THE LAST 30 YEARS OR SO THAT CENTRAL INDEPENDENCE HAS BEEN CONSIDERED SACROSANCT. EARLIER COME THE FED DID NOT EFFECTIVELY GET INDEPENDENCE UNTIL THE FED TREASURY ACCORD OF 1951 AND AFTER THAT HAD SEVERAL PRESIDENTS, LIKE LYNDON JOHNSON, RICHARD NIXON, RONALD REAGAN, THEY WERE PUTTING HEAVY PRESSURE ON THE FED FOR POLICY AND REELECTION. WE KNOW FROM THE NIXON TAPES AHEAD OF THE 1972 ELECTION. IN SOME SENSE WHAT THEY'RE DOING IS IN KEEPING WITH A LONGER HISTORICAL PATTERN WHEREBY MONETARY POLICY IS INHERENTLY A POLITICAL OUTCOME. AT THE END OF THE DAY, THIS WILL HAVE AN INFLUENCE ON WHO IS ELECTED, WHO IS NOT REELECTED, AND I THINK THAT THE TRUMP ADMINISTRATION KNOW, AS THE ADMINISTRATIONS BEFORE THEM, THERE IS A LONG-RUN COST FOR FED INDEPENDENCE, BUT THE TEMPTATION TO GET THE SHORT TERM GROWTH SPURT AS FRONT END RATES COME DOWN WILL ALWAYS BE TEMPTING FOR ANY ADMINISTRATION LED BY ANY PARTY. DANI: PART OF THE SCRUTINY COME THE INTEREST IN THE FED COME HENRY COME AS WE BOTH KNOW, THE FED PRACTICAL HAS AN UNLIMITED BALANCE SHEET. IT'S MORE THAN JUST POLICY RATES. IS THERE SCENARIO TO YOUR POINT WHERE YOU GET A FED THAT WORKS IN CONJUNCTION WITH THE TREASURY AND DOES THINGS LIKE SWITCHING TO QT LIKE THEY DID IN 2009 AS A MEAN OF BRINGING DOWN MORTGAGE RATES? HENRY: THAT WOULD BE A VERY INTERESTING SCENARIO. IF WE HAVE THAT THEN YOU ARE VERY MUCH IN FISCAL DOMINANCE TERRITORY. THERE ARE PRESIDENTS FOR THAT, THINKING BACK, IN WORLD WAR II, THAT WAS OF COURSE WARTIME FINANCING. THE FED WORKED HAND-IN-HAND WITH THE ADMINISTRATION. THE FED WANTS TO AVOID THE MONETIZATION, BUT THE FED AGREE THAT THAT WAS THE BEST WAY TO DO IT. EVEN LATER ON THE FED OFTEN RESISTED TIGHTENING POLICY BECAUSE THEY FEARED THAT THEY WOULD JUST EASE AND THE OTHER DIRECTION. WHERE I THINK THE RISK IS IS THAT THE MARKET IS THE ULTIMATE SAFEGUARD AGAINST THIS. IF YOU HAVE A SELLOFF ON THE LONG END OF THE CURVE WITH MORTGAGE RATES SENSITIVE TO THAT, THAT I THINK THAT MARKETS WOULD TAKE MORE ALARM. I THINK THAT THE U.S. IS STILL BENEFITING FROM THE FACT THAT THEY HAVE PRIVILEGE COME THEY HAVE THE WORLD'S RESERVE CURRENCY. I THINK OF ANY OTHER COUNTRY, ANY OTHER DEVELOPED COUNTRY, WERE TRYING TO DO THIS I THINK THAT MARKETS WOULD BE PANICKING MORE THAN THEY CURRENTLY ARE. DANI: WE ARE VERY CALM. WHAT IS MORE IMPORTANT, THE FED OR NVIDIA EARNINGS AFTER THE BELL TODAY? HENRY: YOU WOULD THINK THAT IT IS NVIDIA. I'VE BEEN STRUCK THAT AT THE CURRENT OF THIS BULL MARKET IN LATE 2022 ALMOST PERFECTLY COINCIDED WITH THE RELEASE OF CHATGPT. IN THAT TIME WE'VE SEEN THE S & P 500 BECOME MORE AND MORE CONCENTRATED IN THE MAGNIFICENT 7 IN THESE BIG TECH STOCKS. BY SOME MEASURES THIS IS THE MOST CONCENTRATED MARKET IN DECADES, FAR MORE CONCENTRATED IN TECH THAN IT WAS EVEN AT THE HEIGHT OF THE DOT COM BUBBLE. IN THAT SENSE NVIDIA MAKES UP 8% OF THE S & P 500, A HUGELY IMPORTANT THING. AGAIN, MONETARY POLICY IS PIVOTAL NOT JUST BECAUSE TECH IS PARTICULARLY SENSITIVE TO RATES, BUT IT AFFECTS THE ENTIRE MARKETING GROWTH OUTLOOK. IF THE CREDIBILITY OF U.S. INSTITUTIONS START TO BE ERODED BY TRUMP, THAT IS HARD TO REPAIR QUICKLY, PARTICULARLY WHEN IT COMES TO THE VALUE OF THE RESERVE CURRENCY STATUS AND THE WAY THAT ENABLES THE U.S. TO BORROW AT RATES MORE ADVANTAGEOUS THAN IT WOULD FOR A COMPANY THAT RENTS 6% PLUS DEFICITS. THE FED INDEPENDENCE QUESTION IS MORE IMPORTANT IN THE COMING MONTHS, BUT IN THE NEXT 24 HOURS ALL EYES ARE ON NVIDIA WITH THE MARKET AND ANOTHER RECORD HIGH AGAIN. DANI: HENRY ALLEN OF DEUTSCHE BANK, THANK YOU SO MUCH FOR YOUR TIME THIS MORNING. LET'S GET OTHER TOP STORIES THAT ARE TRENDING ON THE TERMINAL. THE JUSTICE DEPARTMENT'S CRIMINAL PROBE INTO UNITEDHEALTH'S OPERATIONS IS GOING BEYOND MEDICARE. SOURCES SAY THAT THE DOJ IS STICKING INTO ITS PRESCRIPTION MANAGEMENT SERVICES AND DR. REIMBURSEMENTS. UNITEDHEALTH SAYS THAT IT HAS FULL CONFIDENCE IN HIS PRACTICES. LEGO HIT A SALES RECORD AND PLANS TO DOUBLE DOWN ON ASIAN MARKETS WITH THE NEW STORES AND FACTORIES. THE DANISH TOYMAKER BROUGHT IN $5.4 BILLION IN SALES THE FIRST HALF OF THE YEAR OUTPACING ITS RIVALS. THE DUTCH GOVERNMENT IS IN TURMOIL. DUTCH LAWMAKERS HAVE FILED A NO-CONFIDENCE MOTION AGAINST THE GOVERNMENT FOLLOWING A PRIMARY SHOWDOWN TODAY THAT COULD LEAD TO THE PRIME MINISTER STEPPING DOWN. AGAIN, JUST CROSSING, DUTCH LAWMAKERS FILED A NO-CONFIDENCE MOTION THAT COULD CAUSE AN EARLY EXIT OF THE PRIME MINISTER AND HIS CABINET. IT ALSO FOLLOWS SOME TURMOIL IN THE FRENCH GOVERNMENT. THE U.S. SLAPS INDIA WITH A 50% TARIFF. YOUR TRADE UPDATE FOR YOU NEXT ON YOUR BLOOMBERG BRIEF. ♪ PRES. TRUMP: YOU KNOW, WE PUT A 50% TARIFF ON INDIA. YOU'LL SEE A LOT MORE. YOU WILL SEE A LOT MORE. YOU WILL SEE SO MUCH SECONDARY SANCTION. DANI: THAT 50% TARIFF HAS KICKED IN. PRESIDENT TRUMP FOLLOW THROUGH ON HIS THREAT TO SECONDARY SANCTION INDIA OVER THE COUNTRY'S PURCHASING OF RUSSIAN OIL. INDIA ATTEMPTED TO AVOID THIS, BUT THEY GET THE 50% TARIFF RATE STARTING TODAY. > > THAT 50% TARIFF WILL HIT MORE THAN HALF OF INDY'S EXPORTS TO THE U.S., TEXTILES IN PARTICULAR, AND JEWELRY AS WELL. THERE ARE THINGS THAT ARE EXEMPT LIKE ELECTRONICS AND SMART PHONES THAT WERE CARVED OUT OF THIS, BUT THERE'S NO QUESTION THAT THIS WILL CUT OFF A LOT OF TRADE BETWEEN THE U.S. AND INDIA. INDIA HAS BEEN ABOUT THE NUMBER NINE RANKED TRADING PARTNER IN GOODS WITH THE U.S.. THAT HAS BEEN THE CASE PRETTY STEADILY OVER THE PAST DECADE OR SO, SO IT IS NOT A HUGE AMOUNT OF COMMERCE, BUT IT IS A DECENT SIZE TRADING PARTNER THAT WILL TEST THE PAIN THRESHOLD OF A LOT OF INDIAN EXPORTERS. DANI: THIS IS OVER RUSSIAN OIL. I THINK THAT I SAID INDIAN OIL, BUT THAT IS SELF-EVIDENT. THE STORY JUST BREAKING FROM THE TEAM AT BLOOMBERG THAT THE EU IS PLANNING TO PROPOSE REMOVING SOME U.S. INDUSTRIAL TARIFFS THIS WEEK. WHY WITH THAT MOVE BE TAKING PLACE? WHAT WITH THE EU BE HOPING TO ACCOMPLISH? BRENDAN: THE EU IS TRYING TO ACCOMPLISH THIS QUICKLY. THIS IS ONE OF THE CONDITIONS THAT THE U.S. PUT ON BRUSSELS FOR CARRYING OUT THE FRAMEWORK TRADE AGREEMENT THAT THEY'VE ANNOUNCED IN RECENT WEEKS. IF THE EU CAN GET THAT THROUGH THE LEGISLATIVE PROCESS THE U.S., IN TURN, WILL LOWER AUTO TARIFFS ON EUROPEAN CARS FROM 27.5% TO 15%. IF THEY GET IT DONE THIS WEEK, THE EUROPEANS, THAT COULD BE RETROACTIVE TO AUGUST 1. THERE IS A LOT AT STAKE FOR THE GERMAN AUTO COMPANIES IN A QUICK IMPLEMENTATION OF THE EUROPEAN SIDE OF THAT ISSUE. DANI: I'M SURE THEY WOULD BE REALLY RELIEVED, BUT IT IS STILL A LOT OF STICKING POINTS. DOES IT ALLAY THE TRUMP ADMINISTRATION'S CONCERNS, FOR EXAMPLE, ABOUT DIGITAL TAXES? SOMETHING YOU AND I TALKED ABOUT YESTERDAY. BRENDAN: THE PRESIDENT THREW THE DIGITAL TAX ISSUE INTO THE MIX, AND THAT PROBABLY IGNITED SOME OF THE EUROPEANS TO MOVE MORE QUICKLY, BECAUSE YOU THROW SOMETHING, AN ISSUE LIKE THAT, WHICH IS BASICALLY A REDLINE FOR THE EUROPEANS, INTO THE TALKS AT THIS LATE STAGE AND AT THIS LATE STAGE AND IF THE WHOLE THING COULD COME APART, OR AT LEAST ANGER SOME EU MEMBERS WHO STAND FIRMLY BEHIND THEIR DIGITAL REGULATIONS AND TAXES. YOU SEE THE EUROPEANS MOVING AS QUICKLY AS THEY CAN TO GET ACROSS THIS THRESHOLD WITH THIS FRAMEWORK AGREEMENT BEFORE PRESIDENT TRUMP DECIDES HE WANTS TO MAKE THOSE NEGOTIATIONS EVEN TOUGHER TO PULL OFF. DANI: THANK YOU VERY MUCH FOR THOSE LATEST UPDATES. THE EU IS LOOKING TO REMOVE SOME OF THE INDUSTRIAL U.S. TARIFFS. BRENDAN MURRAY LEADS OUR TRADE COVERAGE. SECRET TALKS BETWEEN EXXON AND ROSNEFT. AND DON'T MISS OUR CONVERSATION WITH HAKAN SAMUELSSON LATER THIS HOUR. THIS IS BLOOMBERG. ♪ DANI: YOU ARE WATCHING BLOOMBERG BRIEF, I AM DANI BURGER IN NEW YORK. LET'S LOOK AT THE FRONT PAGES, WHAT IS MAKING HEADLINES ON THE WORLD'S MAJOR PUBLICATIONS. THE WALL STREET JOURNAL HAS THIS ON THEIR FRONT PAGE, THAT EXXON HAS BEEN HOLDING SECRET TALKS WITH RUSSIA'S BIGGEST STATE ENERGY COMPANY ROSNEFT. SENIOR EXECUTIVES FROM BOTH FIRMS SKETCHED OUT A ROADMAP GOING BACK INTO BUSINESS AND RETURNING TO PUMPING OIL AND GAS FIELDS OFF OF RUSSIA'S FAR EAST COAST. ON THE FINANCIAL TIMES, REPORTING THAT COMPLEX DISCUSSIONS BETWEEN MICROSOFT AND OPENAI MAY PUSH OPENAI FOR STRUCTURING INTO NEXT YEAR. THE TWO COMPANIES HAVE BEEN LOCKED IN TALKS OVER EXISTING COMMERCIAL CONTRACTS AND COULD COMPLICATE OPENAI'S EFFORTS TO RAISE MORE CAPITAL. FINALLY COME ON THE WASHINGTON POST, MORE THAN A DOZEN FEMA EMPLOYEES WERE PUT ON LEAVE AFTER CRITICIZING THE PRESIDENT IN AN OPEN LETTER. AROUND 100 80 CURRENT AND FORMER STAFFERS SIGNED A LETTER SAYING THAT CURRENT LEADERSHIP AND EXPERIENCE COULD RESULT IN A HURRICANE KATRINA-LEVEL DISASTER. ELSEWHERE IN THESE MARKETS, THE EURO IS STRENGTHENING VERSUS THE DOLLAR 5.4%, THIS -- THE DOLLAR BY FOUR -- THE DOLLAR BY .4 %. HENRY ALLEN OF DEUTSCHE BANK SAID THAT MARKET TURMOIL WOULD BE THE THING TO PUSH BACK AGAINST PRESIDENT TRUMP. NOTABLY, IT IS NOT DOING SO. COMING UP, WE COUNT DOWN TO THE HIGHLIGHTS OF THE EARNINGS SEASON. NVIDIA REPORTS AFTER THE BELL AND WE WILL CATCH UP WITH RBC'S LORI CALVASINA. THIS IS BLOOMBERG. ♪ DANI: IT IS 5:30 AM IN NEW YORK CITY, I AM DANI BURGER WITH YOUR BLOOMBERG BRIEF. TRUMP'S FED GAMBLE. THE ADMINISTRATION IS LOOKING FOR WAYS TO EXERT INFLUENCE, ZEROING IN ON THE FED'S REGIONAL BANKS. SKY HIGH TARIFFS. THE U.S.'S 50% LEVY ON INDIAN GOODS TAKE EFFECT TODAY. IS THE RESULTS WE'VE BEEN WAITING FOR. NVIDIA SET TO REPORT QUARTERLY EARNINGS AFTER THE BELL TODAY. WE WILL SEE IF I CAN'S SHAKE UP THIS EQUITY MARKET THAT IS UNMOVED AT THIS MORNING WITH LITTLE CHANGE FROM THE S & P AND THE NASDAQ, WHICH, BY THE WAY, RALLIED YESTERDAY DESPITE ALL OF THE CHALLENGES TO GOVERNOR COOK. IS SHE FIRED, WILL SHE BE GONE, IS THE TRUMP ADMINISTRATION GOING TO NOMINATE SOMEONE SOON? WHAT HAS BEEN REACTING AS THE BOND MARKET WITH SIGNIFICANT STEEPING TAKING PLACE. THE 2'S AND 10'S FELL, LATE AGAIN BY THE FRONT END OF THE CURVE. THE 30-YEAR DROPS BY ONE BASIS POINT. WE HAVE CURVE STEEPENING, THE STEEPEST SINCE 2020 TWO. STOCKS MOVING IN THE PREMARKET. KRITI? KRITI: ELI LILLY IS HIGHER BY 1.7%. 24 HOURS AGO THE STOCK MOVED ON THE IDEA THAT THE OBESITY TILL IT WAS MOVING ON A KEY THRESHOLD. THE PARTY CONTINUES IN THE STOCK AFTER A MONSTER SESSION TO THE UPSIDE YESTERDAY, HIGHER BY 1.7 PERCENT THIS MORNING. IT IS NOT THE ONLY ONE RISING QUITE A BIT. MONGO DB PUTTING ELI LILLY TO SHAME IN TERMS OF GAINS IN THE PREMARKET, HIGHER BY ALMOST 30%. THE EARNINGS COMING OUT AFTER THE BELL, NOT ONLY DID THEY IMPRESS WALL STREET, THEY INCREASED THEIR GUIDANCE AND A VERY BIG WAY, GETTING REWARDED THIS MORNING AND THE PREMARKET. UNITEDHEALTH, HOWEVER, IS NOT HAVING THAT GREAT OF A MORNING. UNITEDHEALTH HAD A POOR SESSION YESTERDAY, THE IDEA THAT THE DOJ IS EXTENDING THEIR INVESTIGATION TO BEYOND MEDICARE, GOING AS FAR AS TO SAY THERE MAY BE OTHER ISSUES WITHIN THE COMPANY. FALLING AT THREE: 30 P.M. YESTERDAY. IT LOOKS LIKE THAT WE CAN IS MORNING. DANI: AN EXCELLENT ROUND UP, THANK YOU. ANOTHER STOCK THAT WE ARE KEEPING A CLOSE EYE ON THIS MORNING IS NVIDIA. THE CHIPMAKER IS SET TO REPORT ITS QUARTERLY RESULTS AFTER THE MARKET CLOSE. LET'S BRING IN TOM MACKENZIE, THE HOST OF BLOOMBERG TECH EUROPE, FOR MORE. WHAT ARE OUR EXPECTATIONS? TOM: IS THE DEMAND STILL THERE FOR AI ACCELERATORS? YOU GOT SOME SENSE FROM THE HYPERSCALERS THAT THEY CONTINUE TO SPEND MORE THAN 300 BILLION BY THE END OF THIS YEAR ON DATA CENTERS PACKED FULL OF GPU'S. THE EXPECTATION FOR THE RECENT QUARTER FOR NVIDIA IS THAT YOU WILL SEE APPROXIMATELY 54% YEAR ON YEAR JUMP OF REVENUE AROUND 46 BILLION U.S. DOLLARS WITH MARGINS OF OVER 72% FOR NVIDIA. THAT'S THE EXPECTATION. 2026, THE FORECAST ASIDE THAT THIS COMPANY COULD TURN AROUND REVENUES OF 200 BILLION U.S. DOLLARS. IT IS THAT GAUGE IN TERMS, OF THE AI IMPULSE THE DEMAND-SUPPLY DYNAMICS AS SOVEREIGN START TO BELT OUT AND THE HYPERSCALERS COMMIT TO FURTHER CAPEX SPENDING AROUND THESE DATA CENTERS AND AI. THE AI BULLS SAY THIS WILL BE AN OPPORTUNITY ONCE AGAIN FOR JENSEN HUANG AND THE TEAM AT NVIDIA TO FLEX THEIR MUSCLES ON THE AI REVOLUTION. THEN I'VE SAYING THAT INVESTORS AND OF THE MARKETS ARE STILL UNDERESTIMATING HOW MUCH DEMAND THERE IS OUT THERE, BUT SKEPTICS WOULD SAY THAT THIS IS BECOMING A MORE COMPETITIVE SPACE AND THERE ARE QUESTION MARKS ABOUT CHINA AND WILL MARGINS FILE SQUEEZE, IF NOT THIS QUARTER AT SOME POINT IN THE FUTURE? DANI: HOW MUCH WILL POLITICS PLAY A CENTRAL ROLE? NOT JUST CHINA BUT AMERICAN POLITICS TOO IN THIS EARNINGS REPORT? TOM: IT WILL BE FASCINATING IF JENSEN HUANG IS ASKED ANYTHING ABOUT THE STAKE THAT THE GOVERNMENT HAS TAKEN IN INTEL AND IF IN FACT HE AND THE COMPANY, NVIDIA, WILL BE PRESSURED TO USE INTEL IN THEIR FUTURE FOUNDRIES TO PRODUCE NVIDIA CHIPS. MOST OF THEM ARE PRODUCED BY TSMC IN TAIWAN. THAT COULD BE ONE ELEMENT, THE DOMESTIC POLITICS. THE LENS WILL BE ON CHINA. SOME ANALYSTS HAVE PULLED THEIR FORECASTS IN TERMS OF REVENUE EXPECTED FROM NVIDIA OUT OF THE CHINESE MARKET BECAUSE OF THE LACK OF CLARITY. ON ONE FRONT, THE FACT THAT THE TRUMP ADMINISTRATION SAID THAT YOU CAN HAVE THOSE EXPORT LICENSES AND EXPORT THE H20 AND WE WILL TAKE 15% OF SALES, ON ONE LEVEL THAT IS A POSITIVE. THE DOWNSIDE IS THAT BEIJING HAS SAID, YOU KNOW WHAT, THEIR MAIN LARGE LANGUAGE MODELS, BUY DOMESTICALLY, DON'T BUY NVIDIA, WE HAVE SECURITY CONCERNS. IT IS ABOUT $50 BILLION ON THE SIDELINES IN THE CHINESE MARKET READY TO BE PUT TO WORK TO BUY NVIDIA CHIPS IF THOSE COMPANIES GET CLARITY ON THAT FRONT. MAYBE JENSEN HUANG WILL HAVE SOMETHING TO SAY ABOUT THE CHINESE MARKET AND HIS EXPECTATIONS. DANI: THE FT PUSHING OUT A STORY THAT CHINA IS LOOKING TO TRIPLE ITS OUTPUT OF AI CHIPS TO BOOST ITS DEEPSEEK INITIATIVES. BLOOMBERG TECH EUROPE ANCHOR, TOM MACKENZIE. JOINING US IS LORI CALVASINA, THE HEAD OF U.S. EQUITY STRATEGY AT RBC CAPITAL MARKETS. IT'S WONDERFUL TO SEE YOU THIS MORNING. THINKING ABOUT NVIDIA, NOT JUST THE INDIVIDUAL COMPANY REACTION, BUT HOW BIG OF AN EVENT IS THIS FOR THE ENTIRETY OF THE MARKET? LORI: AUGUST HAS BEEN INTERESTING. WE SAW THE TARIFF-RELATED SECTORS SEE MARGIN EXPECTATIONS FOR Q2 AND Q3 COME IN AND TECH MARGIN EXPECTATIONS MOVED OUT, RIGHT. WE OFTEN SEE IN REPORTING SIEGE -- REPORTING SEASON IS THE LIGHT IS SHOWN ON CYCLICAL VALUE PART OF THE MARKET AND INVESTORS ARE REMINDED THAT THIS EXISTS AND THINGS ARE PRETTY GOOD. SO YOU SEE SOME BROADENING OF MARKET LEADERSHIP, ROTATION. THAT DID NOT HAPPEN THIS TIME. WE GOT TO THE END OF THE REPORTING SEASON AND ALL OF A SUDDEN, ALMOST FROM NOWHERE, WE GOT SKEPTICISM ON THE AI TRADE AND WE SAW A BROADENING HAPPEN AGAIN, WE SAW THE NASDAQ 100, TOP 10 NAMES OF THE S & P 500 HIT PEAK VALUATIONS AND TREND BACK DOWN. CAN THE AI FASCINATION GET BACK ON TRACK? AS WE CLOSE OUT AUGUST, TO ME, THAT IS THE INTERESTING ANGLE. DANI: DOES THAT LEAVE US LESS VULNERABLE TO DISAPPOINTMENT FROM NVIDIA GIVEN THAT SOME OF THE SENTIMENT AROUND AI HAS DAMPENED? LORI: GROWTH RELATIVE TO VALUE, IT HAS BEEN BACK AND FORTH, BACK AND FORTH THE LAST COUPLE OF YEARS. WE HAVE BEEN AT THE TIPTOP OF -- WE BROKE THROUGH THE TOP OF THE RANGE AND WE ARE STILL PRETTY EXTREME, THE VALUATIONS ARE PRETTY EXTREME. THE WHOLE MARKET, FRANKLY, IS VULNERABLE FROM A VALUATION PERSPECTIVE, BUT THE NARRATIVE HAS BEEN SO CHOPPY. CAN WE GET THE FOCUS BACK ON THE AI NARRATIVE IS WHAT I'M LOOKING TO SEE. DANI: THE NARRATIVE ON EARNINGS, JEFFRIES HAS A STATISTIC THAT 44% OF COMPANIES THAT ISSUED GUIDANCE RAISED THEM FOR THE QUARTER THE HIGHEST SINCE 2021, BUT YOU AND THE TEAM HAVE BEEN DIGGING THROUGH EARNINGS COMMENTARIAT IT SEEMS THERE'S A LOT OF TALK ABOUT TARIFF COMPLEXITIES AND UNCERTAINTY. IS THAT IN TENSION WITH EACH OTHER, THAT COMPANIES ARE RAISING GUIDANCE AND ON THE OTHER HAND THEY ARE STILL SAYING WE DON'T KNOW WHAT THE OUTLOOK LOOKS LIKE. LORI: ARE THEY RAISING FULL YEAR 2020 FIVE GUIDANCE WHICH HAS BEEN PRETTY STRONG IF YOU LOOK BACK? WE SPENT TIME LOOKING GROWTH RATES FOR 2026, AND IT DOESN'T LOOK LIKE YOU'VE SEEN A LOT OF INCREMENTAL EXCITEMENT COME INTO THE 20 OUTLOOK IF YOU LOOK AT THE SHIFT IN THE ANTICIPATING GROWTH RATE NEXT YEAR. WE HAVE BEEN THROWING A LITTLE COLD WATER ON THE IDEA THAT THIS WAS THE MOST FANTASTIC EARNINGS REPORTING SEASON EVER. IF YOU LOOK AT WHAT CHANGED IN A LOT OF THE NUMBERS WE SAW A COMPANY SAY THAT TARIFFS WILL IMPACT US BY XYZ, THIS IN THREEQ, THIS IN 4 Q AND IT WAS LOWER THAN THE LAST REPORTING SEASON. WOULD WE THINK OF THAT? THE MARKET RALLIED FEROCIOUSLY. THE HOTTEST GROWTH SCARE REBOUND THAT WE'VE EVER SEEN OUTSIDE OF 2023. I THINK INVESTORS KNEW THAT THE MATH WAS GOING TO PAN OUT THAT WAY AS WE WERE GETTING SOME OF THE DIALING DOWN OF THE DIFFERENT TARIFF ANNOUNCEMENTS, BUT I LOOK AT IT AND A LOT OF IT FEELS MECHANICAL. IF YOU COMPARE IT TO WHAT WAS ALREADY BAKED IN, I'M NOT SURE THINGS WERE AS FANTASTIC AS SOME WERE SAYING. DANI: YOU SOUND ANYTHING BUT BULLISH. WHAT DOES THAT MEAN FOR YOUR EXPECTATIONS OF WHERE WE GO FROM HERE AND IF WE CAN STAY AROUND ALL-TIME HIGHS? LORI: WE SAID WE ARE NEUTRAL ON EQUITIES THE BACK HALF OF THE YEAR. OUR TARGET IS TO 50. 62.50 IS HALFWAY THROUGH AND TRYING TO BRIDGE THE GAP BETWEEN SOME OF THE WAR SENTIMENT-DRIVEN INDICATORS AND WHAT WE'VE SEEN ON SOME OF THE MORE FUNDAMENTAL INDICATORS. THE LATTER IS MORE PESSIMISTIC IN THE FORMER ARE MORE OPTIMISTIC. WE LOOK AT THE SENTIMENT RUN AND IT FEELS LIKE THE VIBES ARE MIXED AT THE END OF THE SUMMER. WE HAVE SEEN SOME OF THE CONSUMER SENTIMENT SURVEY'S PULL BACK A LITTLE BIT. IF YOU LOOK AT INVESTOR POSITIONING, AAII IS SINKING LIKE A STONE. -14% LAST WEEK. THE FOUR-WEEK AVERAGE IS -7.8% AND IT ONLY PEAKED AT AVERAGE. THE LAST TIME THIS INDICATOR FELL WITHOUT A BIG DECLINE IN THE MARKET WAS 1Q OF THIS YEAR. DATA IS LOOKING PRETTY FROTHY IF YOU LOOK AT NASDAQ 100'S FUTURES POSITIONING. SOME SIGNS OF BULLISHNESS WHICH MAY BE GETTING OVERDONE INTO SOME INDICATORS WHICH HAPPEN VERY EARLY BUT VERY PRESSING AND ALSO FALLING. WE ARE PREPARED FOR CHOP. DANI: WHAT DO YOU MAKE OF A MARKET THAT FEELS MORE EXUBERANT ABOUT CUTS AND A SMALL CAP THAT OUTPERFORMS YESTERDAY BECAUSE THEY LOOK AT THREATS TO THE FED INDEPENDENCE AND READ IT AS MORE DOVES, MORE CUTS, GO SMALL CAPS? LORI: THIS IS MY STOMPING GROUND FROM 2007-2014, THIS IS ALL I DID WITH MY LIFE. I HAVE NOTICED A LOT OF OTHER STRATEGIST TRYING TO MAKE THESE BULLISH SMALL-CAP CALLS. THE REALITY IS THAT CUTS ARE ONE THING THAT CAN GET SMALL CAPS GOING. IF YOU LOOK TO THE MID-1990'S WE HAD ADJUSTMENT CUTS AND I SPENT SOME TIME WITH MY RATE STRATEGY TEAM LAST YEAR SORTING THROUGH THIS ISSUE. YOU ENDED UP GETTING SMALL-CAP OUTPERFORMANCE. THAT'S A GOOD REMINDER BECAUSE A LOT OF THE TIMES PEOPLE DO THESE STUDIES AND YOU SEE CUTS, BUT THEY ARE IN THE CONTEXT OF RECESSION. LET'S LOOK AT THE ECONOMIC ANGLE. SMALL CAPS NEED A QUICKLY ACCELERATING ECONOMY, HOT ECONOMY TO SUSTAIN OUTPERFORMANCE. THAT CAN COME FROM BREAKING THE ECONOMY AND RUNNING FAST OFF THE BOTTOM OR FROM A HOT ECONOMY WITH A 3% GDP FOR OTHER REASONS. LOOKING AT IT GDP AT THE 1% TO 2% RANGE AND SO IS CONSENSUS IS NOT A HOT ECONOMY. JOBS GROWTH, WE TYPICALLY WANT TO SEE THE NFP DATA RENT FOR SMALL CAPS OUTPERFORM. IT HAS BEEN KIND OF STAGNANT TO DECLINING. THAT'S NOT A RECIPE FOR SMALL-CAP OUTPERFORMANCE EITHER. THE HEDGE FUND SINCE LATE 2023 HAS TRY TO JACK UP THIS PART OF THE MARKET WHEN THEY WANT TO MAKE DOVISH BETS. IT'S VERY FICKLE MONEY. AS SOON AS THEY TAKE THAT OVER THEIR SKIS AND THEY REALIZE THAT THE ECONOMY ISN'T SO HOT, THEY DIAL IT BACK DOWN. SO, ENJOY IT WHILE IT LASTS. IT CAN GO FOR A LITTLE LONGER, BUT I'M REALLY PUSHING BACK AGAINST A LONGER TERM OVERWEIGHT. WE WANT TO BE NEUTRAL. DANI: IT FEELS LIKE THIS OVER SCORES AN ASSET IN THE MARKET THAT IS A DISCONNECT BETWEEN THE MACRO NARRATIVE AND WHAT STOCKS ARE DOING. WHAT RESOLVES THAT DISCONNECT? LORI: WHATEVER RESOLVES IT, WHATEVER THE CATALYST, WE ARE CLOSER TO IT NOW THAN WE WERE A COUPLE OF MONTHS AGO. IF WE LOOK AT S & P 500 MARKET CAP WAITED AND THE TOP 10 MARKET CAP NAMES, WE ARE TRADING ONE AT 29 TIMES AND ONE AT 26, I FORGET WHICH IS SWITCH BECAUSE IT HAS BEEN A LONG SUMMER, BUT BOTH ARE AT THE TIP TOP OF THE RANGE. THAT TELLS YOU THAT THERE IS NOT A LOT OF ROOM. IF I LOOK AT S & P EQUAL RATED OR THE MARKET CAP NAMES, TRADING MART 18 TIMES. YOU COULD MOVE UP A LITTLE MORE, SO THERE IS SOME SCOPE FOR ROTATION, BUT IF YOU LOOK AT SMALL-CAP VALUATIONS YOU WERE AT 16.3 TIMES BEFORE JACKSON HOLE IN THE AVERAGE IS AROUND 15.2. WE TOPPED OUT IN JANUARY AT 17. WE LOOKED AROUND 18 LAST NOVEMBER.THERE IS NOT A TON OF ROOM THERE EITHER. YOU CAN HAVE A COUPLE OF GOOD WEEKS, I DON'T WANT TO PUT A TIMEFRAME ON IT, BUT IF YOU THINK WE ARE OFF TO THE RACES FOR THE NEXT YEAR OR TWO YEARS, I DON'T THINK THAT'S RIGHT. DANI: IT FEELS FITTING FOR THE WANING DAYS OF SUMMER TO HAVE A NOTE OF CAUTION. IT'S ALWAYS A PLEASURE HAVING YOU, LORI CALVASINA OF RBC CAPITAL MARKETS. COMING UP, VOLVO LOOKS TO BOOST ITS CHINA SALES IN THE FIERCE COMPETITION IN ASIA'S LARGEST MARKET. HAKAN SAMUELSSON WILL BE JOINING US NEXT. THIS IS BLOOMBERG. ♪ DANI: WELCOME BACK TO BLOOMBERG BRIEF, DANI BURGER HERE IN NEW YORK. BACK TO TRADE. LINES CROSSING EARLIER THIS HOUR. SOURCES TELL BLOOMBERG THAT THE EU WILL PROPOSE REMOVING U.S. TARIFFS THIS WEEK. FOR MORE JOINING US IS BLOOMBERG'S BRENDAN MURRAY. WHAT DO WE KNOW? BRENDAN: THIS IS THE EUROPEAN UNION TRYING TO CLOSE LOOSE ENDS THAT THEY'VE REACHED WITH WASHINGTON ON THE FRAMEWORK TRADE AGREEMENT THAT WILL BRING TARIFFS DOWN ON BOTH SIDES, INDUSTRIAL GOODS. BRUSSELS NEEDS TO ACT ON QUICKLY BECAUSE IF THEY CAN DO THAT THEN THE U.S., WHICH HAS PROMISED TO LOWER TARIFFS ON EUROPEAN CARS IMPORTED INTO THE U.S., THOSE WILL TAKE EFFECT AND COULD TAKE EFFECT EVEN RETROACTIVELY TO THE BEGINNING OF WHATEVER MONTH THE EUROPEAN UNION ACTS UPON, IN THIS CASE AUGUST 1. THIS IS A BIG DEAL FOR EUROPEAN CARMAKERS IF BRUSSELS CAN GET THIS FINISHED BY THE END OF THE MONTH. DANI: SOMETHING THAT EUROPE, TO YOUR POINT, REALLY WANTED FOR THESE CARMAKERS, BUT HOW DOES IT UNDERSCORE THE FACT THAT WE'VE ALREADY HAD A FRAMEWORK IN PLACE AND STILL NEGOTIATIONS ARE GOING ON? WHAT DOES THIS SAY ABOUT FURTHER INTO THE FUTURE AS WE TRY TO GET A CERTAINTY JUST ON WHERE TARIFFS STAND? BRENDAN: EXACTLY. IT SUGGESTS THAT THESE NEGOTIATIONS CAN FLAREUP WITH RETALIATION OR DE-ESCALATE AT ANY GIVEN TIME, REALLY. WE HEARD PRESIDENT TRUMP TALK ABOUT THE DIGITAL TAXES. HE DIDN'T SPECIFY THE EUROPEAN UNION, BUT THAT SEEMS TO BE WHAT EVERYONE THOUGHT WAS THE INTENDED TARGET. HE RAISED THOSE AS AN ISSUE THAT THE U.S. DOESN'T LIKE, AND HE WILL HIT THOSE COUNTRIES WITH TARIFFS AND EXPORT CONTROLS. IT SEEMS LIKE WE ARE IN THE BEGINNING OF THE CYCLE OF TARIFF THREATS. THE PRESIDENT SAID IN THE OVAL OFFICE THAT YOU WILL BE SEEING A LOT OF WHAT HE WAS REFERRING TO AS THE SECONDARY TARIFFS. WE HAVE SEEN THE EXTRA 25% COME ON TOP OF TARIFFS ON IMPORTS FROM INDIA. THOSE ARE NOW 50%. THAT WILL CUT OFF A LOT OF TRADE FROM THE U.S.'S NINTH BIGGEST TRADING PARTNER. DANI: TODAY STARTS THE OFFICIAL DAY OF INDIA RECEIVING 50% TARIFFS, SOMETHING THAT THEY TRIED TO AVOID. IS 50% THE FINAL NUMBER OR OUR NEGOTIATION STILL ONGOING? BRENDAN: WELL, IT DEPENDS ON HOW THE MODI GOVERNMENT REACTS. WHILE THEY CAVE IN LIKE THE EUROPEANS AND CANADIANS DID WHEN FACED WITH THE SKY HIGH TARIFFS? WE DON'T KNOW YET. INDIA HAS A LOT OF BIG TRADING PARTNER ALLIES IN ITS CORNER THAT IT CAN LEAN ON, BUT THIS IS DEFINITELY REALLY GOING TO LEAVE INDIA AT A COMPETITIVE DISADVANTAGE ACROSS ASIA IN INDUSTRIES WHERE IT EMPLOYS A LOT OF PEOPLE. SO, YOU'LL START TO SEE LAYOFFS AND PRODUCTION SHUTDOWNS, THOSE KINDS OF THINGS, IN THE MEANTIME. BUT THIS IS ONE OF THE FIRST USES OF A VERY HIGH TARIFF BY PRESIDENT TRUMP TO TRY TO ACCOMPLISH THIS GEOPOLITICAL GOAL IN STOPPING INDIA FROM BUYING RUSSIAN OIL. WE HAVE SEEN SIMILAR MOVES WITH HIGH TARIFFS ON BRAZIL, BUT THIS ONE REALLY IS STRIKING AT THE HEART OF THE INDIAN ECONOMY AND MODI'S EFFORTS TO MAKE INDIA A MANUFACTURING POWERHOUSE THAT CAN RIVAL CHINA. DANI: IT'S INTERESTING TO HEAR FROM MODI. WILL THEY CAVE LIKE THE EUROPEANS? MODI IS PUSHING BACK AND OFFICIALS ARE ENCOURAGING INDIANS TO BUY MORE DOMESTIC GOODS. WE UNDERSTAND HOW THIS KIND OF TACTIC MAY WORK AGAINST THE TRUMP ADMINISTRATION? BRENDAN: WE HAVE SEEN SOME OF IT IN CANADA WE ARE BOYCOTT AMERICAN PRODUCTS WHERE THEY CAN. WE HAVEN'T SEEN A LOT OF IT IN EUROPE. SO, THERE IS ONLY SO MUCH DOMESTIC GOODS THAT YOUR LOCAL POPULATION CAN BUY INTO IT HAS TO PURCHASE SOMETHING THAT IS IMPORTED INTO THE COUNTRY. SO, IT'S YET TO BE SEEN OF SOMETHING LIKE A BOYCOTT OR A BUY LOCAL MOVEMENT PUSHED BY THE GOVERNMENT IN INDIA WILL HAVE ANY SORT OF LEVERAGE BACK ON THE TRUMP ADMINISTRATION, BUT AT THE MOMENT THE PRESSURE IS REALLY ON INDIA'S ECONOMY. 50% TARIFFS, IF THEY STAY IN PLACE FOR A WHILE, ARE GOING TO LEAVE A BIG HEADLAND FOR -- HEADWIND FOR INDY'S COMPANIES THAT EXPORT TO THE U.S. DANI: THANK YOU, THAT IS BLOOMBERG'S BRENDAN MURRAY. TOP STORIES TRENDING ON THE TERMINAL THIS MORNING. THE JUSTICE DEPARTMENT'S CRIMINAL PROBE INTO UNITEDHEALTH'S OPERATION IS GOING BE ON MEDICARE. BLOOMBERG SOURCES SAY THAT THE DOJ IS DIGGING INTO ITS PRESCRIPTION MANAGEMENT SERVICES AND A DOCTOR REIMBURSEMENT. UNITEDHEALTH SAYS THAT IT HAS FULL CONFIDENCE IN ITS PRACTICES. LEGO HIT A SALES RECORD AND SAYS THAT IT PLANS TO DOUBLE DOWN ON THE ASIAN MARKETS WITH NEW STORES AND FACTORIES. THE DANISH TOYMAKER BROUGHT IN 5.4 BILLION DOLLARS IN SALES FOR THE FIRST HALF OF THE YEAR, OUTPACING ITS RIVALS, MATTEL AND HASBRO. THE DUTCH GOVERNMENT IS IN TURMOIL. THE NETHERLANDS IS FACING A PARLIAMENTARY SHOWDOWN TODAY THAT COULD LEAD TO THE PRIME MINISTER STEPPING DOWN. EARLIER THIS HOUR, DUTCH LAWMAKERS FILED A NOTION OF NO CONFIDENCE THAT COULD CAUSE AN EARLY EXIT FOR THE PM AND HIS CABINET. THE LAST LEG OF EARNINGS POUR IN AND A TREASURY AUCTION. WE WILL GET YOU SET UP FOR YOUR TRADING DAY NEXT. YOU ARE WATCHING BLOOMBERG TV. ♪ DANI: WELCOME BACK TO BLOOMBERG BRIEF, I AM DANI BURGER IN NEW YORK. LET'S GET YOU SET UP FOR YOUR TRADING DAY THIS WEDNESDAY. MORE RETAIL EARNINGS WITH KOHL'S, ANCHOR CALL AND FITCH, WILLIAM SONOMA WITH -- ABERCROMBIE & FITCH, WILLIAMS-SONOMA. WILLIAMS-SONOMA WAS CRUSHED AFTER TARIFF INVESTIGATIONS INTO FURNITURE. THE TREASURY WILL BE AUCTIONING $7 BILLION WITH A FIVE-YOUR NOTES. THE BIG EVENT IS NVIDIA THAT WILL BE REPORTING RESULTS AFTER THE MARKET CLOSE. SOME INDIVIDUAL MOVERS, FIRST A CHECK ON NVIDIA AHEAD OF SECOND-QUARTER EARNINGS SHARES, LITTLE CHANGE AS WE AWAIT THAT COME UP HALF OF 1%. UNITEDHEALTH IS DOWN 1/10 OF 1%. THE SCOOP ABOUT A DOJ CRIMINAL PROBE BEING BROADER THAN EARLIER REPORTED. ELI LILLY IS ANOTHER DAY OF GAINS FOR THEM. IT WOULD APPEAR THAT THEIR WEIGHT LOSS PILL IS MOVING AHEAD WITH A PIVOTAL TRIAL. THOSE SHARES ARE UP 1.7%. A CHECK ON THIS BOND MARKET, BECAUSE THAT IS WHERE WE SEE MOST OF THE REACTION TO THE CONCERN OVER THE FED. WILL LISA COOK BE LEAVING THE FED? TRUMP IS TRYING TO FIRE HER. WE HAVE SEEN A CHANGE IN THIS BOND MARKET IN THE PAST 30 MINUTES AND WE ARE NOW LOOKING AT MORE CURVE STEEPENING. THE TWO-YEAR YIELD FALLS BY TWO BASIS POINTS. LITTLE CHANGE FOR THE 10'S AND 30'S. LET ME SHOW YOU THE YIELD CURVE BECAUSE THAT HAS BEEN PICKING UP. AS A MATTER OF FACT, WE ARE NOW LOOKING AT THE STEEPEST YIELD CURVE SINCE 2021. THE LONG AND IS BEING MOVED BY INDEPENDENCE THREATS, INFLATION, OR OTHERWISE KEEPING THAT ELEVATED. THAT IS IT FOR YOUR BLOOMBERG BRIEF. SURVEILLANCE TAKES THINGS FROM HERE. YOU ARE WATCHING BLOOMBERG TV. ♪

No schedule data available.

BTV Channel FinderWatch BTV in your area

Traders Look to Nvidia Results; Trump Slaps India with 50% Tariffs | Bloomberg Brief 8/27/2025

US equity futures are muted as investors await Nvidia's earnings for an update on the AI boom and whether it has staying power. President Trump imposes a 50% tariff on Indian goods to punish the country for buying Russian oil. The Trump administration is said to be weighing options to exert more influence over the Fed's 12 regional banks. Henry Allen of Deutsche Bank says US exceptionalism is reducing panic over the Fed. Lori Calvasina of RBC Capital Markets is neutral on equities for the back half of 2025. “Bloomberg Brief” delivers the market news, data and analysis you need to set your agenda. (Source: Bloomberg)

More From Bloomberg Brief
All episodes and clips

Bloomberg Markets
"Bloomberg Markets" is focused on bringing you the most important global business and breaking markets news and information as it happens.
More episodes and clips

See all shows

Traders Look to Nvidia Results; Trump Slaps India with 50% Tariffs | Bloomberg Brief 8/27/2025

Less Substance Than Meets The Eye: Manuel on Modi, China

Democrats Have Leverage: Rep. Malliotakis on Funding Fight

Google Not Required to Sell Chrome in Court Antitrust Ruling

The Labubu Effect, Bombas On Track for $500M in Sales, J.Crew's Cultural Capital

AI Fuels Stocks Despite Tariffs: Stevenson

M&A Downturn is Coming: Freshfields' Ethan Klingsberg

Crime Statistic are Down: Rep. Casen on Trump, National Guard

China’s Xi Redraws Geopolitical Map, Embracing Putin, Modi

US Pulls TSMC China Waiver, Tech Stocks Fall | Bloomberg Tech 9/2/2025

Google Doesn't Have to Sell Chrome Browser, Judge Says

S&P, Nasdaq Fall on Tariff Uncertainty | Closing Bell

Kraft Heinz to Split into Two Publicly Traded Companies | Bloomberg Markets 9/2/2025

Trump Is Not Looking to Lower Tariffs on India

Tariff Legal Battle Continues as China, India, Russia Tighten Ties | Bloomberg Businessweek Daily

US Astronomers Warn Research Cuts Are a Gift to China

Traders Look to Nvidia Results; Trump Slaps India with 50% Tariffs | Bloomberg Brief 8/27/2025

Bloomberg Brief

More From Bloomberg Brief

Inflation Risks; Trump Says India Offered to Cut its Tariffs to 'Nothing' | Bloomberg Brief 9/2/2025

Where Does US, India Trade Stand Amid Tariff Tensions?

Fed-Related Negatives Priced-In to US Dollar: Marinov

Waller Sees Quarter-Point Cut Next Month; Lisa Cook Emergency Hearing | Bloomberg Brief 8/29/2025

Bloomberg Markets

Less Substance Than Meets The Eye: Manuel on Modi, China

Democrats Have Leverage: Rep. Malliotakis on Funding Fight

Crime Statistic are Down: Rep. Casen on Trump, National Guard

Kraft Heinz to Split into Two Publicly Traded Companies | Bloomberg Markets 9/2/2025