Midterm Elections a Referendum on Trump; US-Iran Pursue Diplomacy

0:02 Bloomberg Audio Studios.

0:04 Podcasts.

0:05 Radio.

0:06 News.

0:10 Good morning, I'm Nathan Hager.

0:11 And I'm Karen Moscow. Here are the stories we're following today. Karen, Election Day, it's here.

0:18 After months of campaigning and hundreds of millions of dollars spent, voters head to the polls today to determine control of Congress as well as a range of local issues. President Trump delivered his closing argument for Republicans in front of a local issue in the nation's capital, the Lincoln Memorial Reflecting Pool.

0:35 Very proud of it. We went through a lot with vandalism. The vandalism was unprecedented. People don't like talking about it.

0:41 Wearing a white USA baseball cap, the president spent about 20 minutes talking about the renovation before turning to attacks on Democrats.

0:49 The Democrats want to blow all of this up by electing communist jihadists and the United States Congress will not. allow that to happen.

1:00 President Trump's speech capped off nearly a month of rallies in mostly red states, including traditional GOP strongholds like Texas, South Carolina, Kansas, and Iowa, where Republicans are now playing defense.

1:12 Well, Nathan, about 57 million Americans cast ballots prior to Election Day, and the University of Florida Election Lab says In the 27 early voting states that track party registration, 43 percent have been cast by Democrats compared to 32 percent for Republicans. Yale School of Management lecturer Gautam Akunda says he wouldn't make predictions on tonight's outcome based on the early vote.

1:36 To the extent that we can decode data from the early vote, outside of Arizona, it is sort of somewhere slightly up Florida, which two days ago, I would have told you, two days ago, I would have told you Democrats have absolutely no.

1:53 Chance of a victory in Florida.

1:55 Florida is starting to look like it could go either way. That's how big the swings are right now.

1:59 Yale University's Gautam Mukunda is a columnist for Bloomberg Opinion, and the Cook Political Report projects Democrats picking up 12 to 25 seats in the House. And in the four seats, Democrats need to flip the Senate. All but one are in states President Trump won in 2024.

2:16 In the 11th hour before the election, Karen, the Supreme Court rejected a Trump administration fight over mail-in ballots in California. But the broader dispute over voting by mail may not be over. Bloomberg's Oliver Crook has more from our election night headquarters in New York.

2:32 And the midterms are already the focus of legal disputes across the United States. The US Supreme Court rejecting the Trump administration's effort to force thousands of California ballots to be set aside. The DOJ claims to have identified 20,000 likely non-citizens on California's voter rolls. California says the list is riddled with inaccuracies and accuses the president of trying to sow doubt. in the country's democratic process. At the same time, a D.C. district court ruled against Democratic Party groups in an effort to block the Trump administration from pressuring states to set aside mail-in ballots of people the U.S.

3:03 claims are likely non-citizens. The judge held that the Democratic group had not presented evidence that any state had segregated ballots on the government's behest. The issue of casting doubt on election results will be closely watched as President Trump still denies the outcome of the 2020 presidential election. In New York, Oliver Crook, Bloomberg Radio.

3:19 All right, Oliver, thank you. In the closely watched Senate race in Michigan, Democrat Abdul Al-Sayed says his campaign raised a one-day record of $ 2.

3:27 4 million.

3:30 And that's after his primary opponent, Congresswoman Haley Stevens, reversed her endorsement and backed Republican Mike Rogers. That move could blow back on Stevens when Congress returns in January, and Bloomberg's Amy Morris has that story from Washington.

3:44 House Minority Leader Hakeem Jeffries called Stevens' decision terrible, saying she's isolated herself from the House caucus. but he deferred discussion about her potential punishment until after the midterms. How Jeffries handles Stevens' defection will preview how he could handle intra-party feuds if Democrats flip the House. Democrats were also weighing whether to punish Representatives Marie Glucenkamp-Perez and Jared Golden for breaking with the party on key procedural votes. In Washington, Amy Morris, Bloomberg Radio.

4:13 Amy, thanks.

4:14 The first polls will start to close at 6 p.m. tonight, Wall Street time in parts of Indiana and Kentucky. The final polling places shut down at 1 in the morning in remote Alaska. Our coverage begins at 6 with America Decides. Bloomberg's David Gurra starts things off, followed by a special edition of Bloomberg Balance of Power with Joe Matthew and Kayleigh Lyons. They take you through the numbers with the context that matters. Live election night coverage starts at 6 p.m.

4:40 on Bloomberg Radio and Television and the Bloomberg Business app.

4:44 Nathan, rising energy prices is one of the key issues impacting investors. In fact, gasoline prices are up almost 35% since the war with Iran began. But in his closing message before the polls opened, President Trump said oil prices were coming down.

4:59 Oil prices are plunging now. They're plunging a record. Nobody's ever seen a plunge like this, and they'll be down. I hope people realize that when they go into the voting booth because we had to stop Iran from having a nuclear weapon. If we allowed Iran to have a nuclear weapon, this country could never function in the same way.

5:19 As for the war, some new developments. The Wall Street Journal is reporting the U.S. struck Iran's Qeshm Island in the Strait of Hormuz yesterday. And separately, a diplomat says Iran and the U.S. are reviewing the latest suggestions from mediators on how to bridge their divide.

5:34 And in Ukraine, Karen, President Volodymyr Zelensky says Russia carried out a massive overnight attack, primarily at power generation facilities and substations. In the country's central, northern, and western regions, the president says 29 people were killed in central Zaporizhia alone. In a post on social media, he said the Russians launched 289 attack drones, 17 ballistic missiles, and 59 cruise missiles.

6:00 Return to the markets now, Nathan, and futures, they are little change to mix this morning after another tech-led sell-off on Wall Street. The Nasdaq 100 is now down 10% from its peak and has entered a technical correction. Despite the sell-off, Jordan Jackson, global market strategist at JPMorgan Asset Management, says stocks are going higher.

6:21 It's a crisis of confidence is the way I would put it. And I think there's a growing kind of lack of confidence or at least euphoria around a trade that has done very well for investors over the last three and a half to four years. And so I think a little bit of this consolidation is healthy. Once we get past the midterms, you've got another cloud of uncertainty that's behind the market. And so we'll get a sense of what policies could look like on a go forward basis. But I think all things point to a market that this is.

6:49 A buying opportunity.

6:50 And JPMorgan Asset Management's Jordan Jackson, despite being up 11% this year, the Nasdaq 100 index has suffered three corrections in 2026.

6:59 Oh, we're taking a look at Apple shares this morning, Karen. They are down in the pre-market about 4.5%. Despite delivering a forecast for the holiday season that topped Wall Street estimates, investors are giving Apple a mixed first report card for new CEO John Ternes. Bloomberg Tech host Ed Ludlow says Apple does face headwinds.

7:18 This will be the first quarter where the iPhone Duo shows up. And the state of play is very much that demand for the iPhone Duo is running ahead of Apple's ability to supply. Memory pricing in particular is still an issue, and so memory supply as well. And going forward, they will ask, when does that kind of imbalance, demand running ahead of Apple's ability to supply, change? and reverse, and that it is too early to tell. Apple acknowledging that it's dealing with a sharply higher component cost.

7:50 Bloomberg's Ed Ludlow notes John Ternes became CEO on September 1st, putting him in charge for the final month of Apple's fourth quarter.

7:57 Well, we had more big tech earnings after the bell yesterday, Nathan. Despite raising its annual revenue forecast, Palantir Technologies issued a quarterly outlook that pointed to a potential slowdown in sales growth, and that has shares down more than 6% this morning. The AI-powered data and analytics platform that counts the U.S.

8:15 military among its chief customers has risen almost 900% over the past three years.

8:20 And now, Karen, some of Wall Street's biggest investors are weighing in on the pros and cons of artificial intelligence. We get that story from Bloomberg's John Tucker.

8:28 John.

8:29 And PIMCO CEO Manny Roman, among a growing number of investment managers, warning of bubble risks in AI.

8:36 But someone is going to lose. It's not a win-win situation for everybody.

8:40 More bullish sounding is Goldman Sachs CEO David Solomon, who sees potential business from the hyperscalers desperate to raise money.

8:48 I can't tell you.

8:48 That it'll go without bumps in the coming years, but I can say when you step back and you look kind of five, ten years from now, I'm very excited. Well, the executives are gathered at the 2026 Global Financial Leaders Investment Summit in Hong Kong. The world's biggest alternative asset managers and securities firms have been pouring money into AI at unprecedented pace, betting that surging demand is going to underpin returns. But many of them are now on watch for ripples in the market. after a painful downturn. I'm John Tucker, Bloomberg Radio.

9:20 All right, John, thank you. While job cuts are coming to Disney, Bloomberg News has learned the entertainment giant is moving toward eliminating thousands of positions. It's also asking some managers to target 20% in annual cost savings. Sources say some of Disney's operations, which include theme parks, TV channels, and the movie studio, will be affected. Disney has cut billions of dollars worth of costs and eliminated thousands of positions in recent years. 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.

9:54 Michael, good morning.

9:54 Good morning, Karen. We're learning about some of the nine victims of Sunday's Learjet crash.

9:59 In Florida.

10:00 The victims included a 20-year-old woman who got her pilot's license in 2023 while still in high school and a technology entrepreneur and his family. Natalia Figueroa was among nine people who died in the crash near West Palm Beach. Vergara's mother says her daughter was the co-pilot flying from Austin, Texas to the Bahamas. As for the crash itself, NTSB board member Tom Chapman talked about what the crew told air traffic control.

10:29 While in contact with Miami Air Route Traffic Center, the crew transmitted that they were at 35,000 feet with moderate turbulence with altitude deviations of about 700 feet. The crew reported the outside temperature was minus 47 Celsius, which is minus 53 Fahrenheit, and they were managing the ice but were in moderate turbulence.

10:55 The crash also killed Adam Robinson, his wife, and their two young children. Robinson was founder of Retention.com. Three motions were presented to the judge overseeing the case against Lindsay Clancy. The Massachusetts mother accused of killing her three children. Clancy's defense attorney argued in a Plymouth courtroom Monday the case should be dismissed on the grounds of double jeopardy. Kevin Reddington also asked Judge William Sullivan to preserve jury records regarding the holdout juror. The juror's attorney, Heather O'Connor, spoke outside of court following the arguments.

11:28 I personally do not think that the threshold for the judge to even really consider any of the evidence that was presented was met. Whether they will or not, the judge will, I don't know.

11:40 A hearing is scheduled for November 16th with a potential retrial set for March. A child died of measles in New York State amid an ongoing outbreak in the state that has affected more than 170 people. According to Governor Kathy Hochul, the death is New York's first measles-related death in 30 years. The death occurred in Lewis County, located in northwestern part of the state. The U.S. is experiencing its largest measles outbreak in decades, with the CDC recording more than 4,050 cases in 2026. Global news 24 hours a day and whenever you want it with Bloomberg News Now.

12:17 I'm Michael Barr and this is Bloomberg.

12:20 Thanks, Michael.

12:21 Time now for our Bloomberg Sports Update. And for that, we bring in John Staschauer.

12:26 Thanks, Karen. Mother Night Football in Seattle and Chicago got three touchdown runs from DeAndre Swift. The Bears beat the Seahawks 34-17 to go to 6-2. The Seahawks last year won the Super Bowl, won 17-3. They've now lost three of their last four games. Quarterback change at Arizona after Gardner Minshew came off the bench, replaced Jacoby Brissett, and led the Cardinals to that comeback win at Dallas State.

12:48 Minshew will get the start this Sunday. Opening night in college basketball in number one. Florida opens the season with a win over Miami. That's your Bloomberg Sports Update.

12:58 Stay with us. More from Bloomberg Daybreak coming up after this.

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13:14 This is Bloomberg Daybreak. Good morning.

13:17 I'm Nathan Hager.

13:17 The months of campaigning and onslaught of political ads in key battleground states come down to this. It is Election Day in the USA. And joining us this morning is Lindsay Newman, Associate Fellow at Chatham House. It is great to speak with you. on this election day. Lindsay, thanks so much for being here. We do know that Democrats need to pick up three seats in the House to win the majority, four in the Senate. It has seemed like it could have been a tough map for the Democrats in the Senate just a few months ago. Where do things stand on this election day?

13:48 Good morning.

13:49 Good morning, Nathan. Thank you for having me on. Yes, we're finally here at the actual election day. Here's what we need to know about midterm elections. Incumbents almost always fare poorly in them. In fact, since 2000, the only time in a midterm election cycle that the incumbent managed to hold on to both chambers of Congress was in 2002, and that was President George W. Bush after 9-11. So from a historical perspective, Democrats are positioned to do well tomorrow.

14:16 And add that to the fact that the latest polling at betting markets, as you have alluded to, make it that the Democrats should be in a pretty good position to easily retake the House of Representatives. As you said, that's three seats only that they need to take up. Right now, they lead in congressional, generic congressional balloting by about just under 9%. And that should translate to a dozen or even more seats. And then the real question is the Senate, which is a closer call. Momentum seems to be very clearly moving in the direction that the Democrats should be able to defend their seats and then take up additional four seats. Betty Marquez in polling has also put them in likely position to retake the Senate.

15:01 But I think that's going to be a bit of a closer margin that we're going to see there. It's you know, where we need to exercise caution is what we make of the election results. So I expect us not really to see major surprises tomorrow. The surprise will be if we see surprises around the Democrats. And we're always sort of hamstrung by polling. But I think what we need to be cautious about is how much we read into even if we see a blue wave tomorrow.

15:27 Well, I have to ask how much stock we should take in prediction markets and polling. As you know, polling has been off in the past, and Republicans are arguing in this cycle that they've been undersampled.

15:38 Yeah, absolutely. I mean, look, we tend to think that in midterm elections, polling is a bit more robust than In the case of national elections and presidential elections, betting markets have performed better than polling in recent examples of midterm elections. And, you know, the sort of conventional wisdom is people are putting their money behind it. But that does not mean that there aren't vulnerabilities baked into these systems.

16:01 And exactly as you say. There are instances where pollers are having to call multiple people who are registered as Republicans just to get a single Republican on their phone with them. And so there is this perceived idea that there are less Republicans that are being reached by these polls, which could very well convert into realities of voting behavior tomorrow at the polling booths.

16:24 Only about a minute left, but if the polls are right and we do get a return to divided government in at least one chamber of Congress, what does that mean for policymaking in Washington? What could it mean for the markets?

16:34 Yeah, I mean, this is the real issue, which is that the president is not a president with a vast legislative agenda, right? So even if we see a divided government or if Democrats take back both chambers, we can't expect that Trump is going to be relying on Congress for any of the sort of ambitions that he has.

16:49 He's going to continue to run his policy out of the White House, out of his office. As for Democrats, if they take both chambers, we know that Trump has already said he's going to be Mr. Veto. And it's very unlikely, Nathan, that the Democrats are going to see such a blue wave tomorrow that they're going to have a supermajority in both houses, which is what they would need in order to overturn any of Trump's vetoes there.

17:10 So we have to be very cautious about what this is going to mean about a radical, dramatic policy environmental change immediately after the elections.

17:19 This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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18:06 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.