Trump's Gaza Proposal; China Weighs Probe into Apple
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with controversy in the Middle East. President Trump says the U.S. should take control of the Gaza Strip. The president spoke during a White House news conference alongside Israeli Prime Minister Benjamin Netanyahu.

The U.S. will take over the Gaza Strip and we will do a job with it too. We'll own it and be responsible for dismantling all of the dangerous unexploded bombs and other weapons on the site. The reaction has been swift to President Trump's Gaza proposal. Former NATO Supreme Allied Commander in Europe Wesley Clark warns it would be exceptionally challenging to deliver.

There are huge problems at the bottom, not to mention strategic consent at the top. So, look, he's the president of the United States. Better listen to him. But...

I've done these things. I can tell you how difficult this is. This is unimaginably difficult. Former NATO Supreme Allied Commander in Europe Wesley Clark spoke as Saudi Arabia reiterated its support for a Palestinian state with East Jerusalem as its capital. The Saudis are rejecting any infringement on the legitimate rights of the Palestinian people.

Well, Nathan, new developments this morning involving Trump's trade war. The U.S. Postal Service has temporarily suspended the acceptance of inbound parcels from China and Hong Kong. According to its website, letters and flat packages from the region will not be impacted. The move comes after President Trump imposed 10 percent tariff increases on Chinese goods. I mean, Karen, China may be looking at ways to fire back. Bloomberg News has learned Beijing's antitrust watchdog is laying the groundwork for a potential probe into ASEAN.

Apple. We get more from Bloomberg News global tech editor Peter Elstrom. We see these tensions between the two countries rising. The US of course imposed the 10% tariffs on China and in response we're seeing some measured responses from Beijing right now. We have the investigation into Google and just to be clear

The Apple investigation was not announced. This is a sources-based story where we're reporting that we understand the regulators at SAMR are taking a look at Apple. They've informed the Apple executives in the country that they're concerned about some of these practices that they have in the App Store. These have been issues globally, really. It's not just in China, but they're taking a 30% cut of revenue from the App Store in certain cases, and they're also limiting your payment options so that you run through the Apple Store.

Bloomberg's Peter Elstrom says if Apple resists making changes, the Chinese government may launch a formal investigation. Well, Nathan Donald Trump and Elon Musk's efforts to slash the federal workforce have taken a new turn. Bloomberg's John Tucker is here with more. John, what's the latest? Well, Karen, most employees of the U.S. Agency for International Development

They're going to be placed on administrative leave. This starts Friday. The staff members stationed overseas, they have to return within 30 days, with exceptions to be considered on a case-by-case basis. This all comes after Trump ally Elon Musk signaled out USAID repeatedly on X. And even Trump described the agency as run by a bunch of radical lunatics.

Secretary of State Marco Rubio said he's now in charge of USAID and warned U.S. lawmakers the agency might be abolished altogether. And it doesn't stop there. The CIA has ordered staff buyouts.

That move comes after two million federal workers were given similar offers. That move initially excluded national security agencies. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. And as controversy swirls around Elon Musk's role and power in the Trump administration, the Treasury Department says Musk's government efficiency team has been given read-only access to coded data of the government's

payments system. Democratic lawmakers had raised concerns about that system's integrity stemming from the Musk team's access. Well, Nathan, President Trump's cabinet continues to take shape. Pam Bondi has won a full Senate vote to be the next attorney general. On this vote, the yeas are 54, the nays are 46. The nomination is confirmed.

And that was the final tally for Pam Abondi in the U.S. Senate. The new attorney general will now get a chance to reshape the 115,000-member Justice Department. Ahead of her confirmation, interim leaders forced out or reassigned many officials who investigated the January 6th attack at the U.S. Capitol, including career prosecutors and FBI officials. Meanwhile, Karen Moore cabinet nominees are moving closer to their confirmations. Both Robert F. Kennedy Jr. and Tulsi Gabbard have advanced through Senate committees on party-line votes.

Kennedy faced questions about his past efforts to link vaccines to autism at his hearing to lead the Department of Health and Human Services. Gabbard drew criticism for meeting with then-Syrian President Bashar al-Assad and refused to call NSA leaker Edward Snowden a traitor in her bid to be director of national intelligence.

Well, Nathan, now we want to turn to the latest on the plane crash investigation in Washington, D.C. The remains of all 67 victims have been recovered from the collision between the American Airlines flight and the Army helicopter. The National Transportation Safety Board says the latest data show the Black Hawk was flying at about 300 feet

at the time of the accident. That's about 100 feet higher than the preliminary radar indicated. Investigators say they need more data from the Blackhawk itself. They expect to recover it from the Potomac River later this week. Turning to markets now, Karen. Futures are lower, led by tech shares following some disappointing earnings after the bell. Shares of Google Parent Alphabet are down 7.5% after missing earnings estimate

Sales from its cloud business slowed. On the company conference call, Alphabet CEO Sundar Pichai downplayed competition from China's DeepSeek. There's been a lot of observations on DeepSeek. First of all, you know, I think a tremendous team. I think they've done very, very good work. I would say both are 2.0 flash models or 2.0 flash thinking models.

you know, they are some of the most efficient models out there, including comparing to DeepSeek. Alphabet CEO Sundar Pichai also announced $75 billion in 2025 capital expenditures that far exceeds the $57.9 billion that analysts expected.

Nathan, cheers of AMD. Also taking it on the chin this morning, they're down more than 8.5% as it struggled to catch up with AI computing leader NVIDIA. The chipmaker's fourth quarter revenue topped estimates, but its data center division's revenue was below analyst projections. And shares of Chipotle Mexican Grill are down more than 6%. The fast food retailer's sales rose less than expected.

Chipotle had stood out as one of the few chains that managed to bring in more customers over the past year at a time when competitors were losing traffic.

Overseas, Nathan, Nissan is reportedly pulling out of plans to combine with Honda. The Nikkei newspaper is reporting talks between the two carmakers have stalled since tie-up plans were first announced in December. Without Honda's backing, Nissan's future is unclear, with the company facing chronic issues such as an outdated product lineup and bloated dealership incentives.

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. In New Orleans, security preparations are underway ahead of Super Bowl Sunday. The U.S. Department of Homeland Security special agent in charge for New Orleans, Eric Delon, is the lead federal coordinator for Super Bowl 59. He says visitors to the city are going to see a heavy police presence this weekend. This is going to be the safest city in America.

for this Super Bowl. We will have more federal assets, more federal law enforcement, more state and local law enforcement, probably than any other Super Bowl ever played. DeLon's comments come after the January 1st Bourbon Street terrorist attack that killed 15 people.

Sweden's worst mass shooting has left at least 11 people dead, including the gunman, at an adult education center as officials warn that the death toll could rise. Police believe the perpetrator acted alone but have not said if he was a student or what his motive may have been. Tuesday's violence occurred at a school west of Stockholm. It offers primary and second educational classes for adults.

Police say one person is dead. Five people have been wounded in a shooting at a cosmetics warehouse in New Albany, Ohio. A spokesperson says the subject is no longer believed to be at the warehouse, which belongs to a company that makes products including toiletries.

New Albany Police Chief Greg Jones. We believe we may know their location. We don't have any reason to believe that they are a general threat to society. More than this was, it appears at this point, to be a targeted type of attack. Chief Jones did not immediately provide details of the circumstances surrounding the shooting. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen. All right, Michael Barr, thank you.

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We'll be right back.

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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Busy Tuesday for New York area teams. The Knicks, Nets, Devils, Islanders, and St. John's all played. They all won. The Knicks in Toronto saw a 23-point lead get cut to one with just over three minutes remaining. But the Knicks held on 121-115 as Carl Anthony Towns had 27 points and 20 rebounds. Knicks have won seven of their last eight games in eight in a row.

versus the Raptors. The Nets hadn't won a home game in two months. Didn't look like they'd beat Houston down four with nine seconds left. A Keon Johnson three-pointer, a steal on the inbounds pass, and a D'Angelo Russell three. Six points in six seconds. The Nets beat the Rockets 97-93. Top two in the East met in Cleveland. Celtics beat the Cavs in L.A. The Lakers beat the Clippers by 25 with Luka Doncic

sitting on the Laker bench. He hasn't played since Christmas with a calf injury, but for the first time since the trade, Luka gave his reaction to it. I felt like this last 48 hours was one month. Like two days ago was one month ago, so emotionally it was really hard. But every day, like today, was much better. You know, I'm just very happy to be here.

Anthony Davis also hurt, didn't play for Dallas in a two-point loss at Philadelphia. At UBS Arena, the Islanders made it eight wins in the last nine games, 2-1 over Vegas. Devils won 3-2 in a shootout at Pittsburgh. At the Garden, St. John's' 20th win of the season. It's so far been a terrific one. The Red Storm atop the Big East. They beat Marquette 70-64. The Yankees have re-signed lefty reliever Tim Hill. John Staschauer, Bloomberg Sports, Canada News.

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, and it could be a dramatic shift in the Middle East. President Trump says the U.S. should take over the Gaza Strip and develop it into what he calls a Riviera. And he says it's not an idea he comes to lightly. Everybody I've spoken to loves the idea of the United States moving

owning that piece of land, developing and creating thousands of jobs with something that will be magnificent in a really magnificent area that nobody would know. Nobody can look because all they see is death and destruction and rubble.

And that was President Trump speaking alongside Israeli Prime Minister Benjamin Netanyahu at the White House. Joining us now is Bloomberg News managing editor Derek Walbank. And Derek, to say this would upend Middle East policy may be just scratching the surface. What do you make of this?

Yeah, Nathan, it was really interesting watching that press conference because when Donald Trump started going into this, you know, I think that the initial reaction was, hold on, did he just say what we think he said?

And then Trump went on to, as you noted, make very clear that not only did he say it, he meant it. You know, there are infinite questions that it raises. There has been a pretty stiff pushback.

unanimous among Democrats, overwhelming out of the Arab world. Not so much from Republicans. We have heard a couple of congressional Republicans, Lindsey Graham being one, suggest that maybe this was

you know, this was a little bit of a bad idea. But other than that, Republicans have been pretty well supportive of the idea of doing something different. Now, Trump...

went out and said a whole range of things about what he would want to do with Gaza if the U.S. got heavily, heavily involved and effectively took it over, not least of which redeveloping the entire place. He compared it at one point to a potential Middle Eastern Riviera. You know, as I say, it was bombshell comments from the U.S. president. I think Nathan

You know, I've been following this along so, so long. The Middle East is really one of those areas, especially issues related to Israel and the Palestinians, where U.S. presidents have had to choose their words exceptionally carefully. And it's sort of like every single word and phrase is litigated.

Trump went and smashed through all of that. And I think that there will be there will be effects of this for a very, very long time. Well, this idea is sort of a bull in the China shop of diplomacy from President Trump. It was very interesting to see Prime Minister Netanyahu alongside President Trump not necessarily dismissing this idea out of hand.

No, not necessarily dismissing, but, you know, it's hard to know exactly how read in he is and how much he wanted, you know, that level of a statement. You know, Netanyahu was making, you know, statements that were generally positive toward Trump's ideas. More, I would say, positive.

flattering of Trump than endorsing necessarily exactly specific prescriptions. But I think that this is one of those things that, look, the White House does not appear to have given a lot of people a heads up that this kind of titanic policy shift was coming, right? It took a lot of people by surprise. But this is also something that Trump is leaning into in his first days. And you could say this across

of different policies and foreign policies where he sees an advantage to surprise and he sees an advantage to volatility many times the volatility he himself is creating. Well, we think through this potential volatility in Middle East policy, Derek, there are new developments in the trade tensions between the U.S. and China after the 10% tariffs. Now this word from Bloomberg News that China's

considering an antitrust probe into Apple's App Store. Where could this go?

Yeah, this one's an interesting one, Nathan, and it's very much a breaking news story. So there's a lot to digest here. But the short version of it is that China's antitrust watchdog is laying the groundwork for a potential probe into Apple's policies and the fees it charges app developers. Now, the idea of scrutiny over Apple's App Store, not necessarily new, but at the same point, we have to consider what moment we're in.

and all of the things going on between the U.S. and China and the potential that this could sort of stack up on top of that. There's a lot to sort of follow through here. One thing I will say as well, though, is we were talking to a lot of analysts yesterday ahead of this story coming out, but after the United States Postal Service said it was going to freeze taking in small packages from China

from China and from Hong Kong for temporarily freeze. And one of the things that stood out to me was there was one analyst who noted that essentially you have a macro risk from all of these micro things going on and they do stack up and there is that sort of

you know, complication risk going on. 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. Eastern 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. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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