LA Clashes Escalate as Trump Deploys National Guard; US-China Trade Talks
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Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Lisa Mateo. Here are the top stories we're following today. Lisa, we begin this morning with a tense situation in Los Angeles.

Anti-deportation protesters have been clashing with law enforcement for three days, in some cases committing violence and burning cars. L.A. Police Chief Jim McDonald says the demonstration started peacefully, but things have gotten worse. This violence that I've seen is disgusting. It's escalated now since the beginning of this incident. What we saw the first night was bad. What we've seen subsequent to that is getting increasingly worse and more violent.

Los Angeles Police Chief Jim McDonald spoke after President Trump deployed more than 2,000 National Guard troops to L.A. over the weekend. He says he would not wait for Governor Gavin Newsom to ask for the reinforcements.

We hit. But President Trump's move has local leaders saying it's only inflaming the situation. Here's Los Angeles Mayor Karen Bass. We're working with officials. We're organizing resources. But what we're seeing in Los Angeles is chaos that is provoked by the administration. And California Governor Gavin Newsom says he has formally asked the White House to rescind the, quote, unlawful deployment. He also says he plans to sue the administration over the action. Nathan, back here in Washington, Republican leaders are trying to

to keep President Trump's tax and spending cut bill on track. After the president's very public falling out with Elon Musk, House Speaker Mike Johnson is making it clear which side he's on. Elon's number one responsibility is to save his company. The president and I have the responsibility of saving the country, and that's what this bill does. And we're really excited and proud of this product, and we're going to get it delivered.

House Speaker Mike Johnson spoke on ABC's This Week, as heard every Sunday on Bloomberg Radio. Senate Republicans appear to be shrugging off Elon Musk's harsh criticism that the bill will add to the deficit. The Senate Finance Committee is expected to strip out some Medicaid and Medicare cuts from the House version of the bill that would have added to its cost savings.

Well, Lisa, we now want to turn to the latest developments over global trade. The U.S. and China are set to resume negotiations in London today following a phone call between leaders President Trump and Xi Jinping. We get the latest from Bloomberg's Katya Dmitrieva. There's certainly a lot more optimism in terms of what could come out of these talks than there was even last year, and that's before the call happened. These talks are really kind of resetting, is how I would put it, and how

perhaps investors and economists are looking at it because, you know, there was sort of a back and forth. There was some lobbying of accusations. The U.S. imposed some more restrictions on China. There was this whole issue of Chinese students coming to the U.S. So now these talks are sort of a way of resetting that after this call happened last week between the two leaders.

Bloomberg's Katya Dimitrieva says the talks aim to resolve issues such as rare earth exports, tariffs and restrictions on advanced technology. And Nathan, those talks between the U.S. and China come as the latest data shows Chinese exports to the U.S. saw the worst drop in more than five years. Official figures for May show shipments for America fell by 34 percent.

All right, let's turn to markets now, Lisa. Stocks are at their highest level since February as investors await a key bond sale and a pair of inflation reports. Let's bring in Bloomberg's John Tucker for more. John. And Nathan, the S&P 500, in fact, closed Friday just 2.3% below its February record. Since its April low, the index has climbed 20%.

Over at Goldman Sachs, Sharon Bale says investors seem to have thrown caution to the wind. I agree. The risks are still very much there, and the market seems at the moment prepared to look through those risks. Strategists at Citigroup, meantime, have raised their year-end S&P 500 target to 6,300. Investors looking for fresh catalysts will have several events this week. There's those U.S.-China trade talks in London Wednesday. We're going to get a reading on inflation with a consumer price index, along with a producer price data.

The following day, that will offer Federal Reserve officials a final look at inflation ahead of their policy meeting next week. On Thursday, the Treasury is set to sell $22 billion of 30-year government bonds. That will be closely watched as a test of market sentiment as investors push back against growing government debt.

In New York, I'm John Tucker, Bloomberg Radio. All right, thank you, John. Plenty of company news this morning. We have Apple kicking off its annual Worldwide Developers Conference in Cupertino. Bloomberg's Tom Busby has a preview. The highlight is expected to be a sweeping redesign of the software interfaces for the iPhone, iPad, Mac, Apple TV, the Apple Watch, and CarPlay, along with some tweaks to the Vision Pro mixed reality headset.

It's also rebranding its software, shifting from the current numbered-based naming to a year-based system. So next year's update to the current iOS 18 will be iOS 26. There is little chance, though, of any significant updates to its long-delayed AI product, Apple Intelligence. The conference runs through this Friday, June 13th. Tom Busby, Bloomberg Radio. All right, Tom, thanks. And Bloomberg News has learned that Meta Platforms is in talks to make a multi-billion dollar investment in AI startup Scale AI.

Valued at over $10 billion, the funding would rank among the largest ever for a private company. And we get more from Bloomberg Technology reporter Sarah Fryer. Scale has become really essential in the generative AI boom in part because what they specialize in is data quality. They have a mixture of human and AI technology.

fixing of data, where they're labeling images, they're categorizing things, they're improving models through this accuracy. And data accuracy is really important when you're trying to build the next big LLM. Bloomberg's Sarah Fryer says Scale AI generated about $870 million in revenue in 2024 and expects $2 billion this year. And Qualcomm making an acquisition. It's agreed to buy London-listed semiconductor company AlphaWave IP Group for about $1

$2.4 billion in cash. AlphaWave makes high-speed semiconductor and connectivity technology that can be used for data centers and AI applications. That's two growth areas in the chip industry that are being driven by demand for products like OpenAI's ChatGPT. That's not the only move happening in the UK, Lisa. L'Oreal has agreed to buy a majority stake in the British company Medicaid. The French cosmetics group is trying to strengthen its presence in the booming skincare market.

All right, it's time now for a look at the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Lisa. A new Trump administration travel ban takes effect starting today, banning citizens of 12 countries from visiting the U.S. Travelers from seven others would face restrictions.

Former Department of Homeland Security official Elizabeth Newman expects legal challenges. There will be many, many challenges. Some of the new countries that have been added, it would be wise of the administration to disclose some of the evidence that they have to demonstrate that they have these deficiencies. Former Homeland Security official Elizabeth Newman tells ABC the ban includes Afghanistan, Myanmar, Haiti, Iran, Libya and Yemen.

Israeli forces have stopped a Gaza-bound aid boat and detained Greta Thunberg and other activists on board.

The Freedom Flotilla Coalition, which had organized a voyage to deliver humanitarian aid to the Gaza Strip and protest Israel's blockade and wartime conduct, said the activists had been kidnapped by Israeli forces. Activists spoke as IDF boarded the boat. Everyone here is safe. No one is wounded right now. It's very important that you know no one is wounded until the time they boarded our boat. Okay?

Israel said the passengers would return to their home countries and the aid would be delivered to Gaza through established channels.

There is tropical storm activity off Mexico's Pacific coast. Bloomberg meteorologist Craig Allen has the latest. Barbara has 65 mile per hour winds and increasing, but is moving away west northwest at about 10 miles per hour. So the Mexico coastline may wind up with a flooding two to four inches of rain and rough surf and swells right along the coastline in the vacation areas and the mountainous terrain.

Bloomberg meteorologist Craig Allen. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr. This is Bloomberg. Lisa. Thank you, Michael.

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...

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Time now for our Bloomberg Sports Update, brought to you by Flushing Bank. For that, we bring in John Stashower. Good morning, John. Good morning, Lisa. The first playoff game for Oklahoma City nearly two months ago was a win by 51 points. They had wins over Denver by 43 and 32, and their series clincher against Minnesota was a 30-point round. Game two of the NBA Finals at OKC, not quite that one-sided, but the Thunder comfortably ahead all night. They beat the Pacers 123-107, and the series is tied at 1-2.

as it goes to indianapolis the first yankee red sox series of the season high scoring both teams scored 16 times through the first two games and then last night at the stadium eight home runs were hit between the two two run shots by aaron judge that came in the first and ninth innings five boston homers carlos narvaez came up with a six with two on

The former Yankee comes back to the stadium and delivers a three-run blast to put Alex Cora's Red Sox ahead. ESPN, the call. Sox went from down 3-2 to up 5-3. They went on to win 11-7 to win the series. In Denver, Mets over the lowly Rockies, 13-5 to sweep the series. Six Met home runs. Jeff McNeil, Pete Alonzo both hit a pair. The French Open final.

You're going to be...

champion, not once, but many, many times. It's a privilege to share the court with you in every tournament, making history with you. They are 22 and 23. No reason to think Alcaraz and Sinner are not going to meet in several Grand Slam finals in the years to come. John Stasiewicz, Bloomberg Sports, Lisa and 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. Three days of protests have gotten more intense over immigration raids in Los Angeles. Local leaders are concerned deploying the National Guard is further inflaming the situation. But President Trump says L.A. can expect even more of a show of force if the violence continues.

We're going to have troops everywhere. We're not going to let this happen to our country. We're not going to let our country be torn apart like it was under Biden and his auto pen. President Trump spoke with reporters on his way to Camp David last night. This morning, we're joined by Bloomberg News senior editor Bill Ferrys just to get an update on what's been happening over the last just a few days in Los Angeles. Bill, it does seem like the tensions have gotten quite a bit worse in just the last 24 hours.

Yeah, it does. Nathan, thanks for having me. We've had, you know, the third day now of these anti-deportation protesters. We've seen these clashes taking place. They have tended to be more peaceful during the day and then later in the day getting a little bit more violent.

There were a number of cars, Waymo cars set on fire as well. And really the escalation of the rhetoric between both sides here, between the Trump administration and California, has really helped fan some of the concerns that

this will the violence will continue or that it might even spread to other cities in the state or other states. So far, that hasn't really happened so far, thankfully. But it is hard to see from the last 72 hours how this de-escalates in the coming days. I mean, and it's also an escalation really between President Trump and local leaders as well, just from the fact that

The National Guard was deployed over the head of Governor Newsom. This kind of takes us into uncharted territory.

It's almost unprecedented to see this kind of deployment. The White House saying that it authorized the deployment of 2,000 National Guard troops. I think so far we know that at least 300 have been sent into the streets. Usually, of course, it's the governor who has control over National Guard forces or asks the White House to deploy them. I think you have to go back to the civil rights era in the 60s,

to see a federalized national guard force, you know, working in opposition to a governor. So how that plays out in the coming days, we'll have to see. The California side, the mayor, Karen Bass, and Governor Newsom have said that that deployment of the National Guard is what is actually escalating tensions on the street right now. I don't think those guard troops are going to be going away or back to their

back to their home. So it's a situation, I think, Monday morning, as that begins in California, we're going to have to see how this plays out again. And we've also heard Defense Secretary Hegseth and President Trump support the idea of bringing in Marines from Camp Pendleton if things continue to escalate. How seriously to take that potential threat?

You know, that would take it to another level as well. I mean, of course, there is this, you know, this law from the late 1800s, the Posse Comitatus law that says you really you cannot deploy active duty U.S. forces on U.S. soil in that way. So it would be an unprecedented move if the Trump administration tried to go in that direction. So far, we haven't seen that full 2000 move.

those full 2,000 troops that were authorized by the White House out there. I would expect that would be the next step if this does continue to escalate. And while we see this fight now between President Trump and local leaders in California, it seems as though Republicans are trying to get past the fight between President Trump and Elon Musk over the big, beautiful bill. Where does that stand in our last-minute bill?

Yeah, the bill is, listen, the Senate Finance Committee is expected to put out their draft of that legislation at any time early this week, most likely. You know, we know what the sticking points are going to be. The SALT, the state and local tax deduction, is going to be a big part of that. That puts a $350 billion hole in the budget that the Senate Republicans may be looking to tweak next.

It's also those changes to Medicaid that some Republicans have been speaking out against ever since that legislation passed the House. It's not going to be the same bill as the House passed. That means it will have to go back to the House. It's going to be a lot of very tough negotiating to get to the president's desk by July 4th. 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 app

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 Nathan Hager. And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak. This is an iHeart Podcast.