Farage Party Gains MP, China Mulls US Talks, $900m Apple Tariff Hit
16:31 Share

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

There are presentations.

And then there are Canva presentations. With Canva, you can use AI to take your presentation to the next level. You can generate dynamic slides and text with a simple prompt. You can drag and drop graphics and charts from Canva's media library and add interactive elements to plus up your deck. And with collaboration tools built in, the whole team can work together better. You'll love the presentations you can easily design with Canva. Your clients and coworkers will too. Love your work with Canva presentations at canva.com.

Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Daybreak Europe podcast, available every morning on Apple, Spotify or wherever you listen. It's Friday the 2nd of May here in London. I'm Caroline Hepker. And I'm Stephen Carroll. Coming up today, a razor-thin victory for Reform UK. Nigel Farage's party wins another seat in Parliament by just six votes.

as they see a surge of support in England's local elections. China says it's considering trade talks with the US after overtures from senior officials in the Trump administration. Plus, taking a bite out of the bottom line, Apple warns tariffs will cost it $900 million this quarter as investor concerns mount. Let's start with a roundup of our top stories. Reform UK has won a seat in Parliament in the northwest of England, defeating the ruling Labour Party by just six votes.

It is the closest by-election result since World War I and in an area that Labour won by a 14,700 vote majority only last year. On top of the national seat, Right Wing Reform UK have also won 58 councillors from both the Conservative and Labour parties in

England's local elections that took place on Thursday. Here is Reform's deputy leader Richard Tice who was cautious but confident about the party's gains. I think we're going to have a very very good night. The seismic shift going on in British politics where Reform is taking huge chunks of votes and seats from both the two main parties.

Although the final results for the local council elections are still being counted, the large and consistent swing in votes suggests that the two main traditional parties in British politics, Conservatives and Labour, are out of favour with the public.

China has said it's assessing the possibility of trade talks with the United States. In a statement, China's Commerce Ministry said it had noted senior U.S. officials repeatedly expressing their willingness to talk to Beijing about tariffs and urged them to show sincerity toward China. The remarks hinted at potential de-escalation in the trade war between the world's two largest economies. But speaking to Fox News, U.S. Secretary of State Marco Rubio says it's China rather than the U.S. that wants the talks.

Can we reach some sort of short-term accommodation with them? That's what they want. I mean, the Chinese are reaching out. They want to meet. They want to talk. Rubio's comments underscore how delicate even starting negotiations may prove, with both sides eager to control the narrative and project strength.

Japan's finance minister has suggested the country's trillion-dollar holdings in U.S. Treasuries could serve as a bargaining chip in future negotiations with the White House. Speaking to Tokyo TV, Katsunobu Kato has said that it does exist as a card. Whether or not we use it is a different decision.

his words. Meanwhile, Japan's chief trade negotiator says the country is aiming to secure a trade agreement with the United States by June. Ryosei Akazawa spoke after the latest round of talks in Washington as the country continues to face U.S. tariffs of 25 percent on cars, steel and aluminium and a baseline 10 percent tariffs on all of its goods.

Apple has failed to soothe investor concern about the cost of tariffs and a Chinese slowdown with its latest earnings report. The tech giant announced higher costs and worse than expected sales, prompting shares to fall as much as 4.2% in after-hours trading yesterday. News of rising costs comes as the iPhone maker looks to source more than 19 billion chips

from the US this year in a bid to lessen its reliance on China. Apple is set to obtain tens of millions of advanced processors from a TSMC facility in Arizona this year and manufacture the majority of US-bound iPhones in India.

Staying with the tech earnings, Amazon is bracing for a tougher business climate due to tariffs and economic turmoil. The firm warned of weaker than estimated profits for the current quarter, citing trade policy and recessionary fears. Speaking to investors, CEO Andy Jassy highlighted growing uncertainty. Obviously, none of us knows exactly where tariffs will settle or when.

We haven't seen any attenuation of demand yet. To some extent, we've seen some heightened buying in certain categories that may indicate stocking up in advance of any potential tariff impact. Andy Jassy speaking there. Despite the headwinds, Amazon reported a 9% increase in sales over the first quarter of the year to $155.7 billion. The company's shares declined 3% in extended trading following the update.

Standard Chartered has joined the group of global banks whose profits have been boosted by the recent market volatility. The Asia-focused lender reported pre-tax profit for the first three months of the year of $2.28 billion, $130 million higher than estimates.

The gains were largely driven by the bank's financial markets and wealth units, but CEO Bill Winters has warned they are monitoring developments in the trade war. Standard Chartered stuck to a plan to return at least $8 billion to shareholders from 2024 to 2026.

Mike Waltz is leaving his job as US National Security Advisor after a few weeks after adding a journalist to a private signal chat group. US President Donald Trump nominated Waltz to be the next US ambassador to the UN over social media.

Effectively sidelining him, here's the moment reporters told the State Department's spokesperson, Tammy Bruce, the news. "It's just come out from the president." "All right, great, terrific." "The president has just written on Truth Social that Mike Walz is going to become the new U.S. ambassador to the United Nations." "Well, there you go. Fabulous." "And in addition to that, he says

that in the interim, Secretary of State Marco Rubio will serve as national security advisor while continuing his strong leadership at the State Department. Do you know how long he's going to be serving in both roles? It is clear that I just heard this from you. I had, I, this is, the magic. No heads up that this is coming? Well, I have some insights as to the potential of certain things that might happen.

Waltz's fall from favour comes after he added journalist Jeffrey Goldberg to a Signal chat group set up to discuss military strikes on Yemen. The scandal has been damaging to the White House's foreign policy team, haunting Defence Secretary Pete Hegseth and raising questions over information security.

Those are our top stories for you this morning. Looking at stock futures, the S&P 500 even is up 0.8% U.S. stock. 50 futures gaining by 1.3%. The S&P 500 has logged eight straight sessions of gains. So, overall, in the past nine days, we would be close to about a 10% gain. Treasury has also ended their winning streak yesterday. We had 2%.

the manufacturing data out of the U.S., which looks solid. So, two-year treasury yield rose 10 basis points. Big disappointment from Apple and Amazon. Both traded more than 3% lower in the aftermarket because of disappointing results. But there does seem to be a new energy in the Asian equity markets. MSCI Asia Pacific Index up 1.5%. China is assessing the possibility of negotiations with the U.S.

And you've also got Japan stocks positive, again, because of trade negotiations, trade talks expected or ongoing with Japan. The Bloomberg Dollar Spot Index is weaker, three-tenths of 1%. Oil prices are higher this morning. That's a look at the markets.

In a moment, we'll bring you more on the possibility of thawing trade relations between the US and China, plus an update on those election results here in England. But first, a word on another story that we've been reading this morning, the latest Bloomberg Opinion newsletter from Jessica Carl, and an innovation in avoiding social anxiety, not at work, but by pretending to be at work.

I thought this was quite a strange and interesting story. Jessica Carl's been writing about this and it has a great story from a tick from basically a tick tock from a young worker who created an entire fake marketing strategy, basically to hide from the repair man who was coming to see her, I think, to sort of show that she was busy at work.

But apparently this is a massive thing. I mean, there's even apparently fake Zoom meetings on YouTube. So you can have something up on your screen and act like you're in a Zoom meeting so that you don't have to talk to the people around you. I mean, Carolyn, if you see me doing this, you'll know what's going on now.

Unfortunately, but this is also a symptom of something that a couple of our opinion writers have been talking about as well, which is the particular problem that young people who have finished or particularly those who graduated during COVID and have had difficulty entering the workforce. And they're falling into this category that statisticians refer to as NEETs. So they're not an employment education category.

or training. And it's that sort of thing that once you get into it, it can be very difficult to get out of. It's a big problem in the US, but also as Matthew Brooker has been writing about in the UK too. Yeah, absolutely. It's a massive issue for young people in Britain. And Matthew writes about how it goes alongside the kind of mental health challenges that Britain has, and it's particularly affecting young people. I mean, I think that's the kind of...

the not so funny, terrible kind of takeaway. But he is more optimistic in some of his opinion pieces about the future of Gen Zers, though. Let's move on, though, and talk about what's happening here in the UK. So Reform UK, their candidate in the

run corn by-election so for a seat in Parliament looks like the Reform UK candidate has now won above the Labour Party this amidst the local election campaign our UK correspondent Lizzie Burden joins us now good morning

morning, Lizzie. Just let's reflect on the fact that Reform UK look to have got another MP in Parliament. So adding to the four MPs that they have currently. Yeah, and this is a really nail biting result. So this by-election, I remember, came about because the Labour MP was convicted of assault. And then it was down to four votes in the initial count.

separating reform and Labour. So they had to recount it. It's been one of the closest parliamentary elections ever. And then now it's been confirmed that reformers won that seat by six votes. So this is a really bad look for Labour because, of course,

As with all local elections, Caroline, in reality, for many, it isn't just a vote about their local representative. It's a poll on the government. We're still four or five years away from an election, but this is a health check on how Keir Starmer is doing. It's the first big electoral test since he came to power last July. And this particular by-election result, being so close, giving reform another seat in Parliament, is not a good look for the Prime Minister.

Of course, this was the only parliamentary seat up for grabs in this round of elections. Elsewhere, it was local councils in England that were being voted on as well. What other sort of trends are emerging from what we've heard so far? Yeah, so you've got 1,641 council seats up for grabs across 23 local authorities in England.

England. Labour defending four out of six mayoral contests, the other two newly created. A lot of analysts, by the way, expecting a wipeout for the Conservatives in this vote because many of these seats were last contested at the height of Boris Johnson's popularity. So they've got the most to lose here. But as I say, it's also a test of how much Nigel Farage's Reform Party can translate the polling into votes. And his party really has everything to gain. It's never put in such a serious offensive.

And it's trying to build on those seats that it won at the general election. OK, Lizzie Burden, our UK correspondent, thank you very much for joining us with the latest as we're looking at those results continue to come in this morning. But the main headline from the elections that took place in England yesterday is the Reform UK party winning that by-election by that narrowest of margins, six votes in it over the Labour candidate.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on Emirates.com. Fly Emirates. Fly better. Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance today.

Let's bring in more now, though, on possibility of trade talks between the U.S. and China. Our Hong Kong News Desk Editor, Jill Desus, is with us for more. Jill, we've had these...

overtures or hints of overtures coming from both sides here. But what do we know at this stage about who made the initial approach and what does that matter?

Good morning. Well, I think at this point you're hearing from either side that they were the ones that were approached. I mean, you know, really, I think kind of underscoring what we were talking about earlier in terms of both the U.S. and China trying to control this narrative. I mean, you just heard Marco Rubio say, you know, Chinese officials have been coming and talking to the United States. On the Chinese side, the Commerce Ministry in a statement today said that senior U.S. officials had repeatedly been expressing their willingness to talk to Beijing about tariffs.

And so kind of implying that it's the U.S. that's starting to court them. I mean, again, all of this kind of just boils down to posturing, it seems. And it kind of does underscore that, I mean, both of these countries, these are the world's two largest economies. They need to have a conversation about trade. They need to figure out exactly how they're going to negotiate. But they're both going to be pretty stubborn about determining or trying to determine who exactly is in control of the narrative. And it really just kind of emphasizes how powerful of a point

it is for them each to feel like they've got control of how this narrative is going to develop as of if and when they do end up negotiating. Yeah, absolutely. I mean, you say stubborn, but it's fascinating to see the differences in terms of style and strategy from these two sides. How significant is it that President Trump and President Xi, though, have not actually spoken since Trump returned to office?

Yeah, I think that's pretty significant. I mean, look, it really does indicate that the relationship between the U.S. and China has, you know, cooled pretty significantly, especially over the last several years. I mean, you know, dating back to the start of the trade war under the Trump

1.0, the first administration. I mean, you know, we also went pretty long stretches of time during the Biden administration where she and Biden weren't talking to each other, really kind of characterized by, you know, these periods where there was a lot of concern about ratcheting up tensions between these two nations. Now you've got Trump basically saying that it's really up

Xi Jinping that needs to contact him in order to begin these trade talks. And the fact that these two leaders of the world's two largest economies haven't spoken yet, I think, again, really just does underscore how serious of a rift we really have here. And look, one of the key illustrations of this trade tensions, small value packages shipped from China to the U.S. from today will no longer be exempt from tariffs. How significant is the end of this de minimis exception?

So I think what we're really going to see the impact of this play out is in, you know, sort of how that impacts the American consumer when it comes to, you know, some cheaper goods that they may purchase. So the idea behind this loophole is that previously it's allowed items from Hong Kong and China valued at no more than $800 U.S. to enter the U.S. without customs declarations and import duties. This was a large part of the business model behind Chinese marketplaces like

Timu and Shien, you know, companies that were shipping really low-cost goods, including clothing, et cetera, to the United States. I mean, the fact that there's no longer this loophole that they can use to really sort of support this business model does indicate that, you know, anyone who is, you know, used to buying those types of goods from those marketplaces in the United States is likely to see some pretty significant price rises in terms of, you know,

trying to buy those things. So I do think that if you're an American consumer, there's a pretty big risk that, you know, an American consumer that's really interested in buying these types of cheap goods, there's a pretty big risk that you could see prices rise.

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London DAB Radio, the Bloomberg Business App and Bloomberg.com.

Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa, play Bloomberg 1130. I'm Caroline Hepke. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe.

Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online quote at Hiscox.com. That's H-I-S-C-O-X dot com.

There's no business like small business. Hiscox Small Business Insurance.

It's true that some things change as we get older. But if you're a woman over 40 and you're dealing with insomnia, brain fog, moodiness, and weight gain, you don't have to accept it as just another part of aging. And with Midi Health, you can get help and stop pushing through it alone. The experts at Midi understand that all these symptoms can be connected to the hormonal changes that happen around menopause. And Midi can help you feel more like yourself again.

Many healthcare providers aren't trained to treat or even recognize menopause symptoms. Middie clinicians are menopause experts. They're dedicated to providing safe, effective, FDA-approved solutions for dozens of hormonal symptoms, not just hot flashes. Most importantly, they're covered by insurance. 91% of Middie patients get relief from symptoms within just two months.

You deserve to feel great. Book your virtual visit today at joinmidi.com. That's joinmidi.com.