AI Spending Plans Under Scrutiny
"Bloomberg Markets" follows the market moves across every global asset class and discusses the biggest issues for Wall Street. Today's guests; Union Advisors Founder Nir Kaissar, Bloomberg's Caroline Hyde, and Rachel Morison. (Source: Bloomberg)
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Traders Reel In Fed Cut Bets as Strong Job Data Drags on Bonds
(Bloomberg) -- Treasuries slumped after stronger-than-expected US job and wage growth prompted traders to trim bets that the Federal Reserve will cut interest rates this year. Next Stop: Rancho Cucamonga! ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Where Public Transit Systems Are Bouncing Back Around the World US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. The Friday selloff lifted yields across maturities by as much as 10 basis points, led by shorter-dated tenors more sensitive to Fed rate changes. The benchmark 10-year note's rate rose eight basis points to 4.47%, and yields across the spectrum once again exceeded 4%. Interest-rate swaps showed traders now see a roughly 70% chance of a quarter-point rate cut by September, compared with a probability of about 90% on Thursday. Fewer than two rate cuts are fully priced in for the year. 'You are seeing a little bit of the bond market reaction here of pricing out a bit of the expectations in terms of the Fed,' Jeffrey Rosenberg, portfolio manager at BlackRock Inc., said on Bloomberg Television. 'The big takeaway is a slowing-but-still strong labor market.' Nonfarm payrolls increased 139,000 last month after a combined 95,000 downward revisions to the prior two months. The median forecast of economists was for an increase of 126,000. The unemployment rate held at 4.2%, while hourly wages picked up. Steep gains for US equities also curbed demand for bonds. The S&P 500 and other major benchmarks rose more than 1%. Following the job report, President Donald Trump urged the Fed to cut rates by a full point, intensifying his pressure campaign against Chair Jerome Powell. Fed policymakers have said they are waiting for more data before lowering rates as they balance the risks of still elevated inflation and a potential economic slowdown. Officials have said it could take months to gain clarity on the economic impacts of sweeping policy changes, particularly around trade. Consumer price index data for May, scheduled to be released June 11, is expected to slow acceleration, according to the median economist estimates in a Bloomberg survey. The overall rate is seen rising to 2.5% from 2.3%, the core rate to 2.9% from 2.8%. Fed officials traditionally observe a communications blackout beginning the second Saturday before a meeting, a period that begins June 7. Also ahead next week are Treasury auctions of three- and 10-year notes and 30-year bonds, whose expected yields are higher as a result of Friday's selloff. This week's data has painted a mixed picture of the job market amid the uncertainties of the Trump administration's tariff wars. ADP private-sector payrolls showed hiring decelerated in May to the slowest pace in two years, while job openings unexpectedly rose in April. 'There's nothing here to change the status quo for the Fed,' said Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investment, referring to Friday's report. 'Some downside bets on Fed cuts this summer will likely come out.' Wall Street views on how much Fed easing is likely to occur this year range from none to as much as 100 basis points. The most common forecast among major banks is for just one cut, in either September or December. Traders are still wagering on policymakers keeping rates on hold at their June 17-18 gathering, and seeing only 10% of a chance for a move in July. 'The jobs number takes June and July off the table,' said Kevin Flanagan, head of fixed income strategy at WisdomTree. 'We continue to play this waiting game and with no visible slowing in jobs, the market now turns to focusing on whether the disinflation trend continues with CPI next week.' What Bloomberg strategists say... 'While the initial bond reaction has focused on the earnings beat (and possibly the marginal headline beat), in aggregate this data doesn't really move the needle on our understanding of the labor market.' — Cameron Crise, Markets Live Blog macro strategist In the currency market, a Bloomberg gauge of the dollar rose to the day's high after the release of the report, then moderated gains. The measure remains on course for a 0.4% decline on the week, with currency markets increasingly focusing on economic data. --With assistance from Carter Johnson, Edward Bolingbroke and Alice Gledhill. (Adds commentary, updates prices.) Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling ©2025 Bloomberg L.P.
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SpaceX's valuation will likely be cut in half as Trump and Elon Musk publicly feud, longtime Tesla investor says
Elon Musk's escalating feud with President Trump could have serious financial fallout for the tech billionaire's companies. Tesla stock has already taken a hit, and now investors are warning that SpaceX's valuation may also be at risk due to Musk's behavior. Longtime Tesla investor Ross Gerber told Bloomberg Musk is no longer acting in shareholders' interests and the Musk empire may be unraveling in real-time. Elon Musk and Donald Trump's once-cozy relationship is deteriorating in a very public fashion. The two billionaires have been feuding and trading barbs on social media, while Musk's companies get caught in the crosshairs. Tesla stock has taken a dive, but some investors are now worried that SpaceX, which is heavily reliant on government contracts, may also be vulnerable. Ross Gerber, CEO of investment firm Gerber Kawasaki, told Bloomberg TV that Musk's recent antics risk triggering investor lawsuits — and could slash SpaceX's valuation by half. 'Elon isn't functioning to the benefit of his shareholders and hasn't been for many years,' said Gerber, who has significantly trimmed his Tesla stake in recent years. He called the feud a 'disaster' for Musk, adding the world was 'watching the dismantling of the Musk empire in real-time.' 'The truth is SpaceX's valuation was probably cut in half today because of this behavior,' he said, adding that it wasn't clear 'whether SpaceX investors will realize that on the short or medium term because it's a private company and insulated from the stock market, but this is devastating to SpaceX as well.' Representatives for SpaceX and Musk did not immediately respond to Fortune's request for comment, made outside normal working hours. Musk and his multiple companies originally benefitted from his close relationship with the U.S. president. In November, Tesla's market value surged significantly reaching a valuation of $1.1 trillion However, the billionaire's tenure in the White House has been marred by controversy that has impacted his companies, especially Tesla. Public anger at the billionaire's mass-firing of federal workers sparked widespread protests against the EV maker and tanked the share price. With Trump now also taking aim at Musk, it could be SpaceX that feels the pain as a result of the company's reliance on global government contracts, especially from the United States. 'Trump is the president of the United States, whether we like it or not, and Elon is going to have to live with this for quite some time and it could be very detrimental to him and his companies,' Gerber said. Trump has already vaguely threatened to terminate some of these. Taking to his social media platform, Truth Social, the President said: 'The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that Biden didn't do it!' In response, Musk threatened to decommission the company's Dragon spacecraft but later appeared to walk back the comments. The public spat between two of the world's most powerful men began over federal spending, specifically Trump's new spending bill. Musk has opposed the bill, calling it a 'disgusting abomination' and urging Americans to demand that their representatives in Washington 'kill the bill.' Musk's key role in the Trump administration was to reduce federal spending, something he did largely by firing federal workers, shuttering agencies, and canceling government contracts. Despite these efforts, his DOGE team did not meet their original target of $1 trillion saved. According to the team's official website, the current tally saved by DOGE is $180 billion. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
