Bloomberg Daybreak: US Edition

Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) Dip buyers moved in to support the bruised artificial intelligence trade after the S&P 500’s steepest drop in more than a year. Global markets have been whipsawed this week as investors initially bet that a Democratic sweep would hasten an end to the Iran war. Fears of the worst-case scenario for the AI trade kicked in after the US midterm elections, in which Democrats secured majorities in the Senate and House of Representatives and won control of state houses and governor’s mansions across the country.
2) US lawmakers are looking to impeach Defense Secretary Pete Hegseth as soon as next week, after the Iran war he championed partly led to Republicans losing control of Congress. Representative Thomas Massie will reintroduce articles of impeachment against Hegseth, who has been criticized for waging the Iran war without congressional approval. Massie's bid to impeach Hegseth is expected to get widespread Democratic support, and possibly enough Republican support for it to pass, with some Republicans having no incentive to return to Washington to support Hegseth.
3) Secretary of State Marco Rubio is weighing whether to leave the Trump administration, people familiar with the matter said, as he considers his next moves following Republicans’ midterm elections wipeout. Rubio and his advisers are going over options for his future, and he hasn’t made a decision about whether to quit his posts as top US diplomat and national security adviser. Rubio dismissed the report that he is thinking about resigning, saying working for Trump through the end of his term has “always been my plan."
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Today's top stories, with context, in just 15 minutes.

On today's podcast:

1) The Republican Party’s defeat in the midterm elections has led to finger-pointing, with Vice President JD Vance distancing himself from President Trump and the war against Iran. Florida Governor Ron DeSantis and Senator Ted Cruz are positioning themselves as potential 2028 hopefuls, with DeSantis calling for Congress to outlaw stock trading by lawmakers and Cruz casting the election as a repudiation of tariffs and the Middle East war. The election results have dealt a series of blows to the Republican Party, with at least seven Senate seats lost and Democrats expected to gain a significant margin in the House of Representatives, leading to a fractious leadership contest and questions about the party's future direction.

2) Oil is continuing its decline after the threatened post-midterm escalation failed to materialize. Vice President JD Vance linked the poor Republican result to the war, which suggests a greater incentive to reduce geopolitical tensions ahead of 2028 and could pull the party towards a more moderate stance. There is a similar argument on the Democratic side: a larger coalition that now includes historically red states could exert a moderating influence.

3) Qualcomm gave a lackluster profit forecast, citing a “broad-based increase” in costs for components and manufacturing. Earnings will be $2.15 to $2.35 a share in the three months ending in December, with revenue expected to be $10.4 billion to $11.2 billion in the period. Shares of Qualcomm fell about 7% in extended trading following the announcement, despite a robust quarterly sales forecast lifted by a push into new markets.
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Today's top stories, with context, in just 15 minutes.

On today's podcast:

1) Democrats won control of both chambers of the US Congress in a midterm election landslide that amounted to a rejection of President Donald Trump following widespread voter discontent with the economy and the war in Iran. The Democratic rout sets up the first real check on Trump’s power in Washington since he returned to the White House last year, as the party rode a wave of voter dissatisfaction driven by the cost-of-living. The incoming Congress is sure to investigate Trump, his administration and businesses and stymie his legislative agenda.

2) Democrats' control of Congress is weighing on the shares of Tesla and SpaceX Shares. A so-called blue wave in the midterms will fan concerns about tighter regulations around artificial intelligence and call into doubt a potential merger of Tesla and SpaceX. Empowered Democrats may be able to slow down the potential merger, with Congress unable to single-handedly kill a deal, according to First New York's Vikram Rai.

3) Democrats scored a landslide victory in New York, flipping a marquee House seat and making deep inroads into some of the state’s most reliably conservative territory. Governor Kathy Hochul cruised to reelection by a double-digit margin, outperforming her six-point victory from 2022, while Democrat Cait Conley ousted Republican Representative Mike Lawler in the Hudson Valley. The victories marked a reversal from the political forces that reshaped New York in 2024, when Trump made striking gains across the state, particularly in New York City and its suburbs.
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Today's top stories, with context, in just 15 minutes.

On today's podcast:

1) America’s referendum on President Trump’s second term is underway with the US midterm elections. Democrats are expected to take control of the House of Representatives, and winning the Senate is a real possibility, which would throw a wrench into Trump’s presidency. The election results may take weeks to be known due to individual states’ rules around counting mail-in votes and legal challenges, with the Justice Department already appealing a federal judge’s decision and the Supreme Court rejecting the Trump administration’s bid.

2) Apple delivered a mixed outlook to investors in its first quarterly report under Chief Executive Officer John Ternus, with tightening profit margins overshadowing an upbeat sales forecast. The company predicted revenue growth of 7% to 10% during the holiday season, but warned that gross margins would be thinner than projected due to higher memory costs and expenses related to the new Siri AI digital assistant. Total revenue rose 12% to $114.5 billion during the fiscal fourth quarter, with sales growth decelerating from a 16% clip in the previous three months, and the numbers from Apple’s iPad, China and wearables businesses were disappointing.

3) Iran and the US are reviewing the latest proposals from mediators on how to bridge their divides and avert another round of all-out war, according to a diplomat briefed on the matter. Qatari mediators flew to Tehran for more talks with Iranian officials, and Iran's parliament speaker said his country had "delivered a strong and rational response to the American side". The US overnight struck targets on the Iranian island of Qeshm, but oil prices tumbled around 10% on Monday on signs the White House is willing to allow more time for a diplomatic resolution.
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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) Representative Haley Stevens backed Republican candidate Mike Rogers, breaking with Democratic nominee Abdul El-Sayed. Stevens' endorsement of Rogers sparked anger from prominent Democrats, with some calling for her to be stripped from her committees. The episode highlights fissures between ideological progressives and moderate party members, particularly over support for Israel in its wars with Iran and Gaza.
2) President Trump is concluding his final electoral campaign with a whirlwind sprint across the country to turn out his most fervent supporters and thwart Democratic designs to curtail his power. Most surveys give rival Democrats strong odds of gaining congressional seats needed to take control of the House, and Democrats are increasingly optimistic that they have multiple routes to the Senate. Republican insiders describe a Senate map that’s still largely in toss-up territory or within reach for a win, and they envision a path to Senate control that involves holding seats in states such as Iowa, Kansas, and Nebraska.
3) Howard Marks said recent artificial intelligence related market stumbles have burst the bubble of infallibility around the sector. Marks stated that investors are showing less tolerance for tech companies whose core businesses are cooling beneath an unprecedented AI spending spree. Jody Jonsson said a disconnect exists between what AI companies expect and the pace at which enterprises can actually adopt the technology.
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