Heathrow Airport Shuttered; Musk and China War Plans
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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 a breaking story impacting hundreds of thousands of travelers around the world. London's Heathrow Airport is closed all day. Let's get the very latest with Bloomberg Daybreak Europe anchor Caroline Hepker in London. Good morning, Caroline. What is happening? Good morning, Nathan and Karen. It is a fire at a power substation about two miles from the airport.

that broke out just before midnight that led to a cut in power for Heathrow. It has forced the cancellation of thousands of flights. Flight Radar 24 says that there were due to be 1,300 flights for today. Some 120 planes had to be rerouted away from Heathrow in the early hours of this morning. Heathrow says that the disruptions will continue over the coming days, adding that passengers should not travel to the airport

under any circumstances. The London Fire Brigade said in a statement that the blaze is now under control, no casualties, but the cause of the fire is not yet known. European travel and leisure stocks, Nathan, this morning down 2%. Heathrow, which is home to airlines including IAG's British Airways and Virgin Atlantic, IAG shares now down as much as 4.3%. Caroline, when do we expect things to get back to normal?

This is the unknown. He throws the busiest airport in Europe. The airport doesn't know when power will be restored. The Energy Secretary, Ed Miliband, has been speaking to media in the UK, including to Sky News. He says that he's spoken to the National Grid, who are really at the epicentre of this, he says, and we will be doing everything we can both to restore power and to help the National Grid. Jeffrey says that passenger compensation for delayed flights is likely going to have a big impact.

immediate impact on IAG. Some local people were evacuated. There was lots of smoke, but no doubt many thousands of frustrated passengers. All right, Caroline Hepger, thank you. We'll continue to follow this story throughout the morning. We turn to Washington now, though, with President Trump denying a bombshell report about Elon Musk being briefed about the Pentagon's plan for any potential war with China.

We get the very latest with Bloomberg's John Tucker. John, good morning. Good morning, Karen. The New York Times cites multiple unidentified U.S. officials as saying Musk would see details of American plans in a presentation led by the Defense Secretary Pete Hegseth and top U.S. military leaders. The Wall Street Journal also reported Musk would receive a briefing on U.S. plans for any potential China war.

In a social media post, President Trump says the Times report is "ridiculous and completely untrue." In a separate post, Hegsith confirmed that Musk will visit the Pentagon today, saying it's an informal meeting about innovation.

Well, the reports underscore the unprecedented roles that Musk holds across the heart of the U.S. government and the economy all at the same time. Any such briefing would expose some of the Pentagon's closely guarded strategic thinking to a billionaire with extensive business ties in China.

In the meantime, Musk is now threatening Pentagon employees. In a post on Axe, he says he looks forward to the prosecution of those at the Pentagon who are leaking false information. He warns they will be found. In New York, I'm John Tucker, Bloomberg Radio. John, thank you. President Trump's made a major move in his push to overhaul the federal government. He has signed an executive order to all but dismantle the Department of Education.

After 45 years, the United States spends more money on education by far than any other country and spends likewise by far more money per pupil than any country. And it's not even close. But yet we rank near the bottom of the list in terms of success. The president's order directs Education Secretary Linda McMahon to take all necessary steps to close the agency. But it doesn't give a clear blueprint. And shutting down an entire cabinet department would take an act of

Congress. In remarks heard here on Bloomberg, Trump said the agency's core functions like Pell Grants and funds for special needs children will remain. They're going to be preserved in full and redistributed to various other agencies and departments that will take very good care of them. And it's very important to Linda, I know, and it's very important to all of us. President Trump's already moved to cut nearly half the education department's workforce. This order is likely to face legal challenges.

Well, Nathan, President Trump also signed an executive order aimed at boosting critical mineral production, and that could include coal. The president is using the Defense Production Act to provide financing loans and other investment support to process rare earth elements and other minerals in the U.S.,

The move addresses long-held concerns that China controls the vast majority of rare mineral processing. Let's turn to markets now, Karen. Futures are lower as we close out the trading week. The S&P 500 has fallen for four straight weeks, and there could be more volatility than normal today. We get more from Bloomberg Markets reporter Valerie Teitel.

need to take an eye to triple witching. This is the option expiry event that happens at the end of every quarter. It's called triple witching because there are single stocks, ETFs, and indices. All three options tied to those equity indices expire this afternoon into the close. We normally see a very large surge in volume

and some volatile stocks, maybe some more less liquid single names have some pretty wild swings into the close. Bloomberg Markets reporter Valerie Teitel says $4.5 trillion of options contracts expire today.

Well, let's check some stocks on the move this morning, Nathan. And shares of FedEx are down 7%. The shipping company has lowered its full year guidance for a third consecutive quarter. Inflation and uncertain demand for packages are squeezing the company's bottom line. Lee Clasco covers FedEx for Bloomberg Intelligence. The demand picture is probably not as good as we thought it might have been three months ago when President Trump was elected and people thought the animal spirits will be released.

And we'd have a less regulation, kind of lower tax environment, which is obviously better for business. But fast forward to today, companies are reeling in their capex because they just don't know what the future holds.

Bloomberg Intelligence's Lee Klasko says FedEx's latest outlook assumes the global economic, political and trade environment does not worsen any further. And Karen, shares of Nike are down 5%. The sportswear maker is signaling further declines in revenue and profitability due to an inventory clearance. Nike also expects its gross margins to decline sharply in the current quarter from a year earlier, in part due to U.S. tariffs on products from China and Mexico.

We're also watching Micron Technology, the largest U.S. maker of computer memory chips, gave a strong sales forecast for the current quarter, bolstered by demand for artificial intelligence products. And AT&T is going to be in focus today, Karen. Bloomberg News has learned BT Groups approached major telecommunications companies, including AT&T, about partnerships to help turn around its struggling international business. When asked about a potential BT partnership recently, AT&T's chief financial officer declined to comment.

Well, we turn to the economy now, and former Treasury Secretary Larry Summers says he is astonished that Fed Chair Jay Powell used the word transitory to describe the effects of President Trump's tariff policy. I would have thought the chairman would retire the word transitory. That is perhaps the most notoriously ill-chosen phrase of his excellent seven-and-a-half-year run as Fed Chair.

And Summers made the comments on Bloomberg's Wall Street Week with David Weston. Hear the full conversation tonight at 6 p.m. Wall Street time on Bloomberg Radio and Bloomberg Television, or get the Wall Street Week podcast after the show airs wherever you get your podcasts.

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. The National Transportation Safety Board is issuing sweeping recommendations for state departments of transportation to immediately assess the vulnerability of their bridges.

The report comes after the collapse of the Francis Scott Key Bridge in Baltimore after it was struck by a cargo ship almost a year ago. NTSB Chair Jennifer Humendy says the report should be a warning to other bridges across the country and is urging owners to comply. Had they ran the calculation on the Francis Scott Key Bridge, the MDTA would have been aware that the bridge was almost destroyed.

30 times greater than the risk threshold AASHTO sets for critical essential bridges. NTSB Chair Jennifer Homody is calling on the vulnerability assets of nearly 70 bridges across the U.S., including 15 in New York and New Jersey.

Transportation Secretary Sean Duffy says he's granting New York a 30-day extension to end its congestion pricing program in Manhattan. The Trump administration's original deadline was today. New York Governor Kathy Hochul and the MTA pledged to keep the congestion pricing cameras on no matter what the administration did. Congress member Jerry Nadler of New York says the elected officials who run the city know it best.

The value pricing program is solidly established under federal law. It is clearly delivering tangible benefits. Simply put, congestion pricing is no different than New Jersey's ability to set tolls on the New Jersey turnpike. Meanwhile, opponents of the tolls, like Representative Josh Gottheimer of New Jersey, say congestion pricing is destined to fail. To the MCA, enjoy your last hour screwing over hardworking commuters with the congestion tax.

Gottheimer, audio courtesy of News 4. Israel's cabinet has approved Prime Minister Benjamin Netanyahu's decision to fire the country's domestic intelligence chief, Ronan Barr, despite thousands of protesters rallying against his removal. 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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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashour. John, good morning. Good morning, Karen. Nobody at St. John's wants this storybook season to end. The Red Storm began the NCAAs in Providence against Omaha. And a slow start took St. John's three and a half minutes to score a point. Thirteen minutes into the game, they had yet to take a lead. But up five at halftime, the second half, all Red Storm.

St. John's really stayed attached. Osborne left side three. Missed it long. Run down by Scott. Here come the Johnnies on the move. Three on one. Give left. Wiltshire. Lobbed for Lewis and a two-edged slam. Johnnies start to pull away.

On West Midwands, St. John's won 83-53. R.J. Lewis scored 22. It's their first NCAA win in 25 years. And tomorrow afternoon, they'll take on Arkansas. It was earlier in Providence where the biggest upset took place. Not only that 12th-seeded McNeese knocked off 5th-seeded Clemson, but that at halftime,

McNeese led 31-13. They led by 12 with a minute to go. Ended up winning by only two. First NCAA win in school history. The Knicks really missed Jalen Brunson. Last two nights have made that obvious. A 15-point loss in San Antonio. A 17-point loss in Charlotte. The Hornets have lost 51 games. They've had five losses this month by more than 30 points, and yet they outscored the Knicks in every quarter and won 115-98. The Nets at Indiana were up 10 at the half.

Pacers came back to win in overtime. Another Rangers loss at the Garden. Lost to Toronto 4-3. That's three home losses this week. Maple Leafs never trailed. Got two goals from John Tavares. Islanders with a 4-3 win over Montreal. Now tied with the Rangers. The Devils lost to Calgary.

Five to three of the Celtics being sold. The price tag is $6.1 billion, a little more than what the Washington Commanders just went for, so it's the most in North American sports history. $2 billion more than any NBA team has gone for. The new ownership group, led by Bill Chisholm from the Symphony Technology firm, is a lifelong Celtics fan. John Staschauer, Bloomberg Sports, Karen Nathan.

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. This morning, Europe's busiest airport is shut down.

down. A power outage has forced London's Heathrow to close all day, causing travel chaos for the hundreds of thousands who rely on the transatlantic flight hub each day. For the very latest, we are joined by Bloomberg Global Aviation Editor, Benedict Kamo. Benedict, good morning. What do we know at this point about what caused this fire? We understand it happened at a power substation.

Yes, good morning. That's right. So this is a power substation nearby, about two miles away from the airport. That caught fire in the middle of the night. We don't know why. That's going to be one of the main thrusts of the investigation. It has now been extinguished, but the damage is done. So not only are people in the vicinity without power, but Heathrow Airport is entirely shut off.

Give us a sense of just how much chaos this is causing right now. As we said, this is the busiest airport in Europe. Yeah, this is an unprecedented breakdown, really, for the airport. There have been disruptions in the past. You know, there might have been strikes. There might have been weather-related disruptions. But for the airport to close down for an entire day, that is unheard of. This is an airport that handles about 1,000 flights.

400 flights a day, 200,000 passengers, you know, give or take an aircraft taking off about every minute. So this is going to have a massive ripple effect. There were planes in the air already that were coming in from the Middle East, from Asia. Those planes had to be rerouted to places like Frankfurt, like Birmingham in the UK.

Some were able to land at Gatwick Airport, which is the other big London airport. So those people were lucky. But for a lot of people, they're out of position or they didn't even get to where they wanted to be. Everyone flying from the US will have to think twice. Hopefully by tomorrow, things will be back to normal. But usually a disruption on this scale leads to...

to several days, if not into next week, of disruptions because you'll have aircraft out of position, you'll have crew out of position. So this is not just today. This is something that will stay with the airport for the next couple of days. Whenever something like this happens at an airport, your mind goes to sabotage. Are authorities going there yet, Benedict?

It's too soon to say. The blaze has just been extinguished. But this will certainly be one line of inquiry that they will look at. Another question that will come up is how can it be that something like Heathrow, an airport that is so critical to the UK infrastructure, didn't have the necessary redundancy systems in place? How can it be that a single power station didn't

regardless how big and important it is, could really take out this airport. What kind of precautions might there have been? This comes at a time where the airport is trying to expand. The UK is really pitching its we're open for business, we're open for expansion kind of idea. And this is not a good look for the airport or for the government at large. And those will be some tough questions that will be asked.

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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