Middle East Truce Setback; Biden Farewell Address
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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 in the Middle East and some late breaking news. Israeli Prime Minister Benjamin Netanyahu is accusing Hamas of reneging on parts of a ceasefire agreement that looked set to pause more than 15 months of fighting in Gaza starting Sunday. Netanyahu's office says new demands by the Palestinian group are an effort to extort last-minute concessions.

We get more from Bloomberg's Ethan Bronner. I mean, there are numerous, numerous details, which prisoners will be released, on what kind of schedule, all sorts of things that are not necessarily all written down. And so it's easy for one side to say suddenly the other side is making new demands.

And, you know, fundamentally, they have such different goals. The goal of Israel is for Hamas to be destroyed and eliminated in any position of power in Gaza. And the goal of Hamas is to retain its power and drive Israel out of Gaza. So ultimately, you know, they're on a kind of collision course, even though they're theoretically negotiating.

a compromise. Bloomberg's Ethan Brunner notes under the terms of the agreement, Hamas would release 33 hostages taken on October 7th, 2023, while Israel would pull out of populated areas in the Gaza Strip and release hundreds of Palestinian prisoners. Hamas says it is committed to the ceasefire deal announced by the mediators.

Well, Nathan, we want to turn to Washington now and a farewell from President Joe Biden. The president took to the cameras in the Oval Office to deliver a final address to the nation and a warning about the administration to come. Today.

An oligarchy is taking shape in America of extreme wealth, power, and influence that literally threatens our entire democracy. President Biden echoed former President Dwight Eisenhower's warning of a military-industrial complex, saying the nation now faces the threat of a tech-industrial complex. Turning to politics north of the U.S., Karen Canada has drawn up an initial list of more than $100 billion of U.S.-manufactured items that would hit with tariffs.

if President-elect Donald Trump decides to levy tariffs against Canadian goods. Sources tell us the list is a draft and would come into play only if the Trump administration moves first. Prime Minister Justin Trudeau and the premiers of Canada's provinces met yesterday to plot a strategy for dealing with U.S. protectionism.

Well, Nathan, Donald Trump's pick for Treasury Secretary is hedge fund investor Scott Bessent. He faces a Senate committee for his confirmation hearing later this morning. And Bloomberg's Amy Morris has a preview from Washington. Back in October, Bessent told Bloomberg TV Donald Trump tends to be more involved in the financial side of things. He has a deep understanding of financial markets as opposed to most politicians.

He wants to be involved in the conversation. He has very well-formed opinions. Bessette has said he plans to pursue policies that boost the U.S. economic output while slashing budget deficits and that his priority will be to deliver on Trump's tax cut proposals.

But he's been known to not be as supportive of tariffs. That will be a big focus for senators and investors. Scott Besson still is expected to win approval easily from the Senate. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. Well, in prepared remarks set for later this morning, Besson will say maintaining the dollar as the world's reserve asset is critical to U.S. economic health and the nation's future.

Stay with Bloomberg for full coverage of Besson's confirmation hearing starting at 10.30 a.m. Wall Street time on Bloomberg Radio and Television. And Karen, as TikTok continues to battle to keep its app operating in the U.S. after this Sunday, the CEO of the company is joining the list of tech moguls attending Trump's inauguration on

Monday. The New York Times is reporting CEO show Chu has been invited to sit in a position of honor on the dais where former presidents and other important guests traditionally are seated. Tick tock, which is owned by China's bite dance, does face a Sunday deadline to find a U.S. buyer in order to keep operating in the country.

Politicians from both parties are looking for ways to keep TikTok accessible in this country despite that impending ban. Well, Nathan, we now want to turn to the latest developments in the battle to contain the wildfires in Los Angeles. Bloomberg's John Tucker joins us for an update. John, good morning. Good morning, Karen. The traumatized region made it through yesterday without another major fire breaking out. And the last of the red flag warnings, they're expected to end this afternoon.

As fire crews work to gain control, officials also speaking to witnesses to find out the cause of the blazes, including the devastating Palisades and Eaton fires. Jose Medina is with the ATF. We are talking to individuals about not just what they saw, but what they smelled and they heard. The fires have killed 25 and destroyed more than 12,000 structures. The government has yet to release damage estimates, but private firms expect they'll climb into the tens of billions.

billions, and it could become the costliest fire disaster in U.S. history. I'm John Tucker, Bloomberg Radio. Thanks, John. Turning now to space, Blue Origin's new flagship rocket has lifted off for the first time and successfully reached orbit. All seven engines have pulled thrust. Checking for pressures are good. Vehicles clear the tower. Now passing 18 seconds into flight. Nice!

New Glenn thundered off the launch pad at Cape Canaveral, Florida just after 2 a.m. Eastern time. This mission is expected to last several hours. It put the company's Blue Ring Pathfinder test satellite into orbit. That was the main objective of the flight. But launch commentators did confirm that the booster portion of the New Glenn rocket was destroyed as it attempted to land on a barge in the Atlantic Ocean. That fell short of the mission's secondary goal.

On to the markets now, Nathan, where futures are higher following Wednesday's 1.8% rally on Wall Street. That was the S&P 500's biggest gain since the aftermath of the election. The rally came after core inflation eased for the first time in six months. Chicago Fed President Austin Goolsbee says he's optimistic about the Fed's inflation battle. The trend continues to be improvement in inflation. I'm still optimistic.

for 2025, that we can continue growing and have a soft landing.

Chicago Fed President Austin Goolsbee. Investors are now betting the central bank is likely to lower its benchmark interest rate by half a percentage point this year. And bank earnings continue this morning, Karen. They come after blowout results yesterday from JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo. We get more from Bloomberg Intelligence Senior Banking Analyst Allison Williams. Certainly the bar has been raised for Bank of America and Morgan Stanley after strong sets of results from the other four banks.

big U.S. banks. We're expecting to see at Bank of America net interest income growth. We could see upside to the guidance in the near term. We've also seen good expense control and solid credit trends. We also expect to see at Bank of America

However, we note that their first quarter does tend to have seasonally higher expenses. So we could see that in their guidance. Allison Williams of Bloomberg Intelligence says so far the big banks have notched their second most profitable year ever.

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. Welcome back, Michael. Thank you very much, Karen. President-elect Trump's pick for Attorney General, Pam Bondi, was in the hot seat on Capitol Hill yesterday in the latest in the series of confirmation hearings for the incoming administration.

During her confirmation hearing, Bondi refused to say that Trump lost the 2020 election. Democrats on the Senate Judiciary Committee pressed Bondi on whether she will truly be independent from President-elect Trump. If confirmed, I will do everything in my power, and it will be my great responsibility to make America safe again.

Bondi's confirmation is all but assured with Republicans praising her. President-elect Trump has repeatedly expressed interest in either buying Greenland from Denmark or taking it by force. During his Senate confirmation hearing, Senator Marco Rubio explained buying Greenland would be an important piece of land for the U.S.

Trump has nominated Rubio as his next Secretary of State. Rubio says talking about acquiring Greenland isn't new. Harry Truman had made an effort to try to buy it for like $100 million. He was rebuffed. And then the U.S. has maintained, through a mutual defense agreement there, the opportunity to have military bases, and it had them for a while. It's believed the Senate will begin to start voting this Monday on Inauguration Day to confirm some of Trump's picks.

The U.S. Federal Trade Commission and two states sued tractor giant Deere, alleging the company illegally monopolized agricultural equipment repairs. The FTC and state attorneys general from Illinois and Minnesota filed a complaint in federal court in Chicago saying the tractor manufacturer withheld key information and diagnostic tools from farmers and independent repair shops.

FTC Chair Lina Khan spoke to Bloomberg. They've been steered into Deere's network of authorized dealers, which practically means they're paying more. And especially for farmers that live in rural areas, it means they sometimes have to drive hours to even get to the nearest dealer. Deere's vice president of aftermarket and customer support said in a statement the lawsuit is meritless.

The FDA is ordering food and drug makers to remove a dye called red number three from the products consumers eat and drink. The colorant was banned from cosmetics and non-oral medications decades ago because the study showed it caused cancer when eaten by rats. 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.

I'm Alpine skier Michaela Schifrin. I've won the most World Cup ski races in history. But what does success mean to me? Success means discipline. It's teamwork. It's the drive and passion inside of us that comes before all recognition. And it's why Stiefel is one of the fastest growing global wealth management firms in the country. If you're looking for success, surround yourself with the people who will get you there.

At Stiefel, we invest everything into our advisors so they can invest everything into their clients. That means direct access to one of the industry's largest equity research franchises and a leading middle market investment bank. And it's why Stiefel has won the J.D. Power Award for Employee Advisor Satisfaction two years in a row.

If you're an advisor or investor, choose Stiefel. Where success meets success. Stiefel Nicholas & Company, Inc. Member SIPC and NYSE. For J.D. Power 2024 award information, visit jdpower.com slash awards. Compensation provided for using, not obtaining the award.

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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. Knicks and Sixers in Philadelphia. Knicks had a 16-point lead led by 13 at the half in a 53-minute game. They never once trailed, yet their victory was anything but easy. Philly made up the deficit in the third quarter. The game was tied several times in the fourth. It went to overtime, and with Carl Anthony Towns out with an injured thumb, Jalen Brunson stepped up. Clock at 10. Game time.

Game pocket 22. Brunson races inside. Leads and hits. Jalen Brunson the closer. Brunson 30 points, 5 rebounds, 4 assists. You hear the Knicks' chants in Philadelphia. Brunson's 3. He's good.

On ESPN, Knicks won 125-119. Brunson scored 38 points. Josh Hart had a triple-double. And Los Angeles Nets and Clippers tied after the first quarter, but L.A. won the second quarter by 23 points and the third by 28. In the fourth, they were up by 64. The Clippers won 126-67. It's their biggest blowout win ever and the most lopsided loss ever.

In Nets history, they lost by 52 to Houston in 1978. Celtics lost at Toronto 110-97. The Big East Seton Hall lost at Butler. At Fordham's venerable Rose Hill Gym, they celebrated the 100th anniversary of college basketball's oldest still active arena. And then Fordham lost to UMass in triple overtime. Quinn Ewers, the quarterback at Texas the past three seasons going pro.

which means Arch Manning will finally take over as the Longhorns starting QB. At the Australian Open, Taylor Fritz lost only three games in three sets, but fellow American Francis Tiafa lost in five sets. Top seed Yannick Sinner playing now, tied one set off. John Stashower, 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. Israel and Hamas appeared on the cusp of a pause to 15 months of fighting after agreeing to a six-week ceasefire aimed at freeing hostages and moving in aid to Gaza. But as the deal was announced, White House National Security Spokesman John Kirby sounded a tentative note.

Now comes the real hard work of putting the modalities of the plan in place and executing to it over the course of the weeks and months ahead. And that's going to be tough work. John Kirby's words may be ringing true this morning as Israel now accuses Hamas of reneging on parts of the deal. For the very latest, we go to Tel Aviv and check in with Bloomberg News Israel Bureau Chief Ethan Bronner.

Ethan, good morning. What is Israel accusing Hamas of? Do we have a sense of what aspects of the deal that Hamas is accused of reneging on?

They haven't specified. Earlier in the day, the prime minister's office complained that Hamas was asserting that it had the right to choose all of the prisoners that were going to be released by Israel rather than clearing them with Israel, and that Israel said that was not part of the agreement. So that may be more of the same. It may be other details. There's so many details here that one could accuse the other side of suddenly changing

course on. I think it's important to say something else, which is that the deal is facing a fair amount of opposition in the government, on the far right of the government. Two parties that the coalition relies on to continue to exist are threatening to possibly leave the government over this deal. So these two phenomena may be related. The

the prime minister's statement complaining about Hamas and the opposition here in Israel. So then, Ethan, does this mean at this point that the deal is off or is there still a chance that this can be salvaged?

Well, the deal is not yet on. I wouldn't call it off. I have to – I just don't know the answer to that. I think that if in theory Hamas responds – it's already responded and said that's not true. We're not doing anything that you're accusing us of. But if they somehow work out those details, I would imagine that the cabinet here would pass it, but they have –

The prime minister has announced that he's not even going to hold a vote in the cabinet until he solves this Hamas last minute problem. And it's very hard to know what this amounts to. I really can't answer. I don't know. OK, well, in the speech that President Biden gave last night, his farewell address, he mentioned the Gaza ceasefire deal as one of his accomplishments, saying it was going to be something that was going to be left to the next administration to implement. We've talked before about the

the massive U.S. pressure that's been put on both sides in these last few weeks during the transition. What could this mean for the U.S. in terms of its influence as we start to see this sort of tentative doubt raised about this proposal?

I think you're right to raise the question, Nathan. I mean, in theory, everyone was giving a lot of credit to President Trump, incoming President Trump, for having squeezed this out of the Netanyahu and also from Qatar onto Hamas.

All those things, I think it's true. But on the other hand, it's also the circumstances of the last six months that really made the difference, which had to do with the neutering of Hezbollah and the killing of a number of Hamas leaders, the collapse of the Syrian regime under Hafez al-Assad, and the difficulties that Iran has faced. So all those things are still here, but

And so we thought that the circumstances were ripe for a deal, but it turned out that inside Israel—and it must be said on the right side of the American jury—there is a great concern that too much is being given to Hamas, that too many people with so-called blood on their hands are going to be freed.

that this organization that's vowed to destroy Israel will be reconstituted. That seems to be what's driving the anger on the right of the opposition, and it

Took me a little by surprise this morning that it has become so powerful, but we are in a situation where I don't know what's going to be. 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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