Market Calm Breaks Over Greenland, Trump Doubles Down, More

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What is the main topic discussed in this episode?

Amy Morris 0:00
News when you want it with Bloomberg News Now. I'm Amy Morris. President Trump's demands to take over Greenland have transformed the World Economic Forum's annual meeting in Davos, Switzerland, into an emergency diplomatic summit.

What diplomatic crisis is President Trump creating over Greenland?

Amy Morris 0:13
European leaders want to use the president's arrival tomorrow to help de-escalate the crisis. Now the calm in markets is breaking because of the clash over Greenland, throwing the European and American alliance in disarray and causing Japanese bonds to plunge. Investors' willingness to shrug off earlier shocks is beginning to erode, with the VIX topping the highest since November. We check the markets for you all day long here. At Bloomberg, the S&P 500 down 1.25%. NASDAQ down 1.5%. The Dow down 1.2%. The 10-year Treasury yield at 4.27%. The 2-year yield at 3.59%. Checking the VIX now, it is up about 1%. Safe havens, oil and gold. NYMEX crude oil is up 1.6%. Brent crude oil up 1.3%. And COMEX gold up 3.4%.

How is the market reacting to the Greenland situation?

Amy Morris 1:03
Japan's finance minister is calling on market participants to calm down after an intense day of bond selling pushed up yields on long-term government debt to the highest levels in decades, with ripples reaching other global markets. Greenland's prime minister says the population and authorities there need to start getting ready for a possible military invasion, even as it does seem unlikely. The government will form a task force and distribute new guidelines to the population, including a recommendation to have enough food for five days stored in their homes. Treasury Secretary Scott Besant says there's a reason why President Trump has his sights on Greenland.
Scott Besant 1:41
There's the opportunity for the U.S. to become embroiled ex post into a kinetic war if another country moved in on Greenland and no country is going to assert control of Greenland if the U.S. controls Greenland.
Amy Morris 1:58
Treasury Secretary Besant on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland, with Fox Business Conversation. Former White House economic advisor Gary Cohn says he understands the president's ambition.
Gary Cohn 2:11
If we want to expand our air defenses, Greenland is a pretty strategic spot. So I understand what the president's interest is. They also have rare earths, which is something that we in the United States can't supply to ourselves.
Amy Morris 2:23
Gary Cohn is now vice chairman of IBM. He spoke with Bloomberg surveillance from the World Economic Forum in Davos. UK Chancellor of the Exchequer Rachel Reeves says Britain wants to reduce any tensions with the US over Trump's threat of tariffs ahead of his arrival in Davos.
Rachel Reeves 2:38
All of our focus is on de-escalation, not in worst case scenarios. We have worked incredibly closely with President Trump the last year. because we believe it's in our UK national interest to do so.
Amy Morris 2:52
Reeves said at Bloomberg House in Davos everyone must keep a cool head. U.S. Trade Representative Jameson Greer says the trade has been lopsided between the U.S. and the rest of the world.
Jameson Greer 3:02
Europe has done nothing to implement the trade deal. When we made the trade deal with the Europeans, we modified our tariffs to be much lower. We cut them a deal on autos that other people don't have. Europeans have not lowered a single tariff for us.
Amy Morris 3:15
U.S. Trade Representative Greer spoke on the sidelines of the World Economic Forum in Davos. French President Emmanuel Macron said U.S. tariffs used as leverage against sovereignty are unacceptable, arguing that Europe should not hesitate to use its anti-coercion mechanism in retaliation.
Unknown 3:31
Without collective governance, cooperation gives way to relentless competition. Competition from the United States of America, through trade agreements that undermine our export interests, demand maximum concessions, and openly aim to weaken and subordinate Europe, combined with an endless accumulation of new tariffs that are fundamentally unacceptable.
Amy Morris 3:54
Macron spoke in a special address to the World Economic Forum in Davos. Finnish President Alexander Stubb says there is a short-term need to de-escalate language on Greenland, adding that he's been communicating with President Trump over this.

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