Trump Tariff Threat Wipes Out S&P Gains, Trump Travels to Davos, 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 are President Trump's demands regarding Greenland?

Amy Morris 0:13
Stocks are slumping and gold is at a fresh record high as trade tensions between the U.S. and Europe flare. We check markets for you all day long here at Bloomberg. The S&P 500 down 1.8%. NASDAQ down more than 2%. The Dow down 1.7%. Ten-year Treasury yield at 4.28%. The two-year yield at 3.58%. And safe havens, oil and gold. Checking gold now, it's up 3.7%, trading at $47.65 per ounce.

How are trade tensions affecting global markets?

Amy Morris 0:41
WTI crude up 1.7%. Brent crude up 1.4%. Checking Bitcoin now it's down 3.8%. Japan's finance minister called 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 need to prepare for a possible military invasion, although that does remain an unlikely scenario. The government will form a task force and distribute new guidelines for the population, including recommendations for having enough food stored for five days in their homes. Denmark's pension fund for teachers is planning to exit U.S. Treasuries at the end of this month.
Amy Morris 1:25
The fund's chief investment officer tells Bloomberg the U.S. is basically not a good credit. Guggenheim Partners chief investment officer Anne Walsh says that could be more of a sentimental move.
Unknown 1:36
Where do you invest when there's such uncertainty? So that sentiment is really pervading the markets. It hasn't really settled into the markets because I think there's really a sense that perhaps this will all settle down.
Amy Morris 1:52
Ann Walsh of Guggenheim Partners spoke with Bloomberg from Davos. Treasury Secretary Scott Besant urged allies to honor their trade agreements and dismissed the idea that countries would dump treasuries.
Scott Besant 2:03
I think that the NATO alliance is very safe, sound, and thanks to President Trump, it's never been more secure.
Amy Morris 2:10
Treasury Secretary Besson on the sidelines of the World Economic Forum's annual meeting in Davos with Fox Business Conversation. Former White House economic advisor Gary Cohn says he understands the president's ambition.
Gary Cohn 2:22
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 2:34
Gary Cohn is now vice chairman of IBM. He spoke with Bloomberg surveillance at Davos. UK Chancellor of the Exchequer Rachel Reeves says Britain wants to reduce tensions with the US over Trump's threat of tariffs ahead of his arrival in Davos tomorrow.
Rachel Reeves 2:48
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 3:02
We've said at Bloomberg House in Davos that everyone needs to keep a cool head. Trade Representative Jameson Greer says the trade's been lopsided between the U.S. and the rest of the world.
Jameson Greer 3:12
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 3:25
Trade Representative Greer spoke on the sidelines of the World Economic Forum, and French President Emmanuel Macron says U.S. tariffs used as leverage against sovereignty are unacceptable.

What is the response from Japan's finance minister to market instability?

Amy Morris 3:36
He argued that Europe should not hesitate to use its anti-coercion mechanism in retaliation.
Emmanuel Macron 3:41
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.

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