Daybreak Weekend: US Jobs, Special European Council, Australia Eco

Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.720 --> 0:00:13.200 This is Bloomberg Daybreak Weekend, our global look at the 0:00:13.200 --> 0:00:15.840 top stories in the coming week from our Daybreak anchors 0:00:15.840 --> 0:00:18.119 all around the world. Straight ahead on the program, and 0:00:18.160 --> 0:00:20.680 look ahead to the latest on the US labor market 0:00:20.720 --> 0:00:24.159 how that could impact FED policy. I'm Tom Busby in 0:00:24.239 --> 0:00:24.720 New York. 0:00:25.040 --> 0:00:27.320 I'm Caroline Heatcer in London, where we're bringing you the 0:00:27.440 --> 0:00:29.840 latest on Europe's defining moments. 0:00:30.360 --> 0:00:33.760 I'm deg Prisner looking at Australia's economy ahead of some 0:00:33.880 --> 0:00:35.640 key data points in the week ahead. 0:00:38.440 --> 0:00:42.480 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.520 --> 0:00:46.200 eleven three to zero, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.720 --> 0:00:51.839 Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius 0:00:52.000 --> 0:00:55.520 XM one twenty one, and around the world on Bloomberg Radio, 0:00:55.560 --> 0:00:57.800 dot Com and the Bloomberg Business App. 0:01:02.480 --> 0:01:04.479 Good day to you. I'm Tom Busby, and we begin 0:01:04.520 --> 0:01:08.200 today's program with the February jobs report. Here in the US, 0:01:08.480 --> 0:01:12.160 we'll get non farm payroll numbers Friday, eight thirty am 0:01:12.200 --> 0:01:14.640 Wall Street Time, and for more on this and how 0:01:14.680 --> 0:01:18.240 it could possibly impact FED policy moving forward. We're joined 0:01:18.240 --> 0:01:23.759 by Michael McKee, Bloomberg International Economics and Policy correspondent. Well, Michael, 0:01:23.840 --> 0:01:25.880 let's start with what you expect to see in these 0:01:25.959 --> 0:01:27.280 numbers for February. 0:01:27.840 --> 0:01:30.440 Well, we're going to get a lot more data before 0:01:30.560 --> 0:01:34.560 Friday that will maybe lead economists to adjust some of 0:01:34.600 --> 0:01:37.720 these numbers. But basically, what we've seen is what we'll 0:01:37.760 --> 0:01:41.319 get is what they're saying. Last month, we had one 0:01:41.400 --> 0:01:43.880 hundred and forty three thousand jobs. This month, they're looking 0:01:43.880 --> 0:01:47.480 for about one hundred and fifty eight thousand, no change 0:01:47.520 --> 0:01:50.200 in the unemployment rate, expected to stick at four percent. 0:01:51.040 --> 0:01:54.200 Average hourly earnings will be a little bit lower on 0:01:54.360 --> 0:01:56.640 a month over month basis, a little bit higher on 0:01:56.680 --> 0:01:59.080 a year over year basis, just because of the number 0:01:59.080 --> 0:02:01.000 of weeks in the month and that sort of thing. 0:02:01.880 --> 0:02:05.680 The biggest thing is there is no confidence around any 0:02:05.720 --> 0:02:09.679 of these numbers because we don't know what's the impact 0:02:09.800 --> 0:02:16.600 of the new administration has actually been on all the numbers. 0:02:15.840 --> 0:02:19.560 Not just jobs, but everything else, everything else, well jobs, 0:02:20.240 --> 0:02:22.600 Speaking of jobs in this administration, we're not going to 0:02:22.639 --> 0:02:26.040 see all these massive layoffs till March. 0:02:26.200 --> 0:02:28.040 Numbers maybe April, maybe even later. 0:02:28.160 --> 0:02:32.400 Right, Yes, first thing is that they didn't really start 0:02:32.480 --> 0:02:35.280 all the layoffs till February fourteenth, and that was the 0:02:35.360 --> 0:02:37.080 last day of the survey period. And if you work 0:02:37.160 --> 0:02:40.360 for just an hour during the two week survey period, 0:02:41.120 --> 0:02:44.520 you're counted as employed. So that won't have an impact 0:02:45.440 --> 0:02:49.240 unless there was some changes the administration made really early on, 0:02:49.280 --> 0:02:52.880 but they would be small. We still aren't seeing it 0:02:52.919 --> 0:02:56.920 in the jobless claims numbers. What we might see is 0:02:58.000 --> 0:03:04.320 something in average hours, because we've seen these surveys that 0:03:04.400 --> 0:03:08.000 show a bit of a decline in enthusiasm. So if 0:03:08.000 --> 0:03:11.440 companies are being careful about putting people to work or 0:03:12.200 --> 0:03:14.840 working any overtime, they might cut back a little bit 0:03:14.840 --> 0:03:15.080 on that. 0:03:16.600 --> 0:03:19.200 Before we talk about some of the data that's coming 0:03:19.280 --> 0:03:21.320 up next week, let's talk about what we learned about 0:03:21.440 --> 0:03:25.840 this past week, because some very telling and again you 0:03:25.919 --> 0:03:28.959 mentioned the Trump administration, the great unknowns ahead of the 0:03:28.960 --> 0:03:33.400 Trump administration coming in like this. The merchandise trade deficit that. 0:03:33.360 --> 0:03:37.920 We got, Yeah, it was the biggest trade deficit ever, 0:03:38.000 --> 0:03:42.360 one hundred and fifty three billion dollar deficit, largely because 0:03:42.800 --> 0:03:45.800 companies were afraid of tariffs and they were importing a 0:03:45.840 --> 0:03:49.520 lot of supplies ahead of time industrial supply imports went 0:03:49.600 --> 0:03:54.400 up thirty three percent. People were stockpiling because they don't 0:03:54.440 --> 0:03:58.560 know exactly what's coming, which leads us to Tuesday and 0:03:58.760 --> 0:04:03.280 the administration's theoretical announcement of tariffs. Because we don't know 0:04:03.320 --> 0:04:06.160 whether the President will pull back or not. I think 0:04:06.200 --> 0:04:10.080 a lot of people are hoping he doesn't postpone them, 0:04:10.280 --> 0:04:13.440 in the sense that at least if you get a number, 0:04:13.800 --> 0:04:17.080 then you can start planning around it. And that's what 0:04:17.200 --> 0:04:20.320 the FED would like to see, and I'm sure a 0:04:20.360 --> 0:04:23.080 lot of companies would like to see to have an 0:04:23.080 --> 0:04:25.560 idea of exactly what's going to happen. Otherwise you're going 0:04:25.640 --> 0:04:27.200 to keep importing a lot of stuff. 0:04:27.400 --> 0:04:29.880 Yeah, yeah, yeah, you push it back, push it back, 0:04:29.920 --> 0:04:32.360 and it will be stockpiled here in the US. Now, 0:04:32.360 --> 0:04:35.680 we also got PCE numbers just on Friday, and what 0:04:35.720 --> 0:04:37.200 does that tell us about inflation? 0:04:37.680 --> 0:04:40.880 Tells us we're still making some progress. They came in 0:04:41.040 --> 0:04:45.479 as expected. It's pretty easy for economists to anticipate what 0:04:45.520 --> 0:04:47.880 the numbers will be because a lot of it comes 0:04:48.040 --> 0:04:50.320 out of the CPI and PPI reports, which we got 0:04:50.320 --> 0:04:53.200 a couple of weeks ago. So there was still some 0:04:53.240 --> 0:04:55.800 progress that is not a bad news story like the 0:04:55.839 --> 0:04:59.159 CPI was, and so it keeps the Fed on track 0:04:59.320 --> 0:05:02.919 to maybe at some point resumed lowering interest rates. But 0:05:03.040 --> 0:05:07.280 all this again depends on the President and what he's 0:05:07.360 --> 0:05:10.640 going to do. We saw a big decline in spending. 0:05:11.640 --> 0:05:14.960 After an eight tenths increase in December, we saw spending 0:05:15.120 --> 0:05:19.760 fall by two tenths of a percent, which is not 0:05:19.880 --> 0:05:24.520 good news. And it also parallels those bad consumer sentiment 0:05:24.680 --> 0:05:28.599 reports that we got. So the question for the Fed 0:05:29.080 --> 0:05:31.080 or for Wall Street about the Fed is are they 0:05:31.120 --> 0:05:35.680 going to cut rates anytime soon because inflation has behaved 0:05:35.720 --> 0:05:39.120 and they can as they were, or because the economy 0:05:39.160 --> 0:05:41.320 is slowing down and it's an emergency and we have 0:05:41.400 --> 0:05:42.320 to cut interest rates. 0:05:42.440 --> 0:05:44.919 Well, a lot to look forward to the February jobs 0:05:44.920 --> 0:05:47.839 report out this coming Friday. Our thanks to Michael McKee, 0:05:47.880 --> 0:05:52.359 Bloomberg International Economics and Policy correspondent. We moved next to 0:05:52.400 --> 0:05:55.760 some fourth quarter retail earnings in the US from Macy Easter, 0:05:55.760 --> 0:05:59.360 the nation's largest apartment store operator, and the clothing chain Gap. 0:05:59.360 --> 0:06:02.000 They're both out on Thursday. Now for more on what 0:06:02.120 --> 0:06:04.799 to look for in those Q four results, their outlooks 0:06:04.800 --> 0:06:07.240 for the year ahead, the impact of stubbornly high inflation, 0:06:07.360 --> 0:06:10.320 the threat of more US tariffs. What all that tells 0:06:10.400 --> 0:06:12.640 us about consumer spending? I know it's a lot, But 0:06:12.760 --> 0:06:16.600 we're joined by Mary Ross Gilbert Bloomberg Intelligence, senior equity 0:06:16.600 --> 0:06:20.440 analysts covering retail. Well, Mary, thank you for joining us. 0:06:20.720 --> 0:06:22.880 Let's start with what you expect to see in those 0:06:22.920 --> 0:06:25.680 earnings reports from Macy's and Gap, and this includes the 0:06:25.720 --> 0:06:27.279 all important holiday quarter. 0:06:28.000 --> 0:06:31.120 Yes, tom, so when we look at Macy's, Macy's already 0:06:31.160 --> 0:06:33.240 came out and gave us a little preview of what 0:06:33.279 --> 0:06:37.680 they saw quarter to date, and at that time they said, Okay, 0:06:37.760 --> 0:06:40.240 we're going to be at the lower end of their 0:06:40.279 --> 0:06:44.120 seven eight billion in revenues for the quarter, so it 0:06:44.160 --> 0:06:45.960 was going to be seven point eight to eight billion. 0:06:46.440 --> 0:06:49.680 Analysts are right around that low end at seven point 0:06:49.760 --> 0:06:53.600 eight billion, and based on consumer transaction data, we think 0:06:53.680 --> 0:06:57.039 they come in near that estimate, maybe even slightly beat. 0:06:57.680 --> 0:07:01.960 On the earnings per share side, analysts are at about 0:07:02.000 --> 0:07:05.560 a buck fifty four. We think they likely beat that estimate, 0:07:05.680 --> 0:07:08.720 as they have in the past eight quarters. But the 0:07:08.760 --> 0:07:11.960 real focus here is going to be on the go 0:07:12.120 --> 0:07:17.280 forward business for Macy's and also as you pointed out 0:07:17.600 --> 0:07:19.840 there's going to be a little discussion on tariffs. They 0:07:19.840 --> 0:07:23.080 don't have a huge exposure. Their private label business is 0:07:23.120 --> 0:07:27.120 probably around fifteen percent of sales, and then the portion 0:07:27.280 --> 0:07:31.160 that they source from China is less than that. They 0:07:31.200 --> 0:07:36.000 haven't disclosed specifically, but we estimate they're probably somewhere around 0:07:36.160 --> 0:07:39.480 under five percent of revenues in terms of exposure there. 0:07:40.160 --> 0:07:44.440 But we will get a little update with GAP. We 0:07:44.560 --> 0:07:49.000 think the company beats analyst estimates. So analysts are estimating 0:07:49.040 --> 0:07:51.920 revenue to fall five point three percent. We think sales 0:07:51.920 --> 0:07:54.680 may decline just one to two percent, and this is 0:07:54.760 --> 0:07:58.320 based on Bloomberg second measure transaction data as I mentioned 0:07:58.360 --> 0:08:01.760 earlier with Macy's, and also on the earnings per share side, 0:08:01.760 --> 0:08:04.320 we see them beating analysts are looking for just thirty 0:08:04.360 --> 0:08:08.800 seven cents a share. That company is really executing Old Navy, 0:08:08.840 --> 0:08:11.200 which is just over half of the business, just to 0:08:11.440 --> 0:08:15.080 debuted a new performance fabric for its activewear line called 0:08:15.120 --> 0:08:19.880 Studio Smooth. So think Viory and Lulu Lemon and the 0:08:19.920 --> 0:08:23.160 really buttery soft leggings that they have and they retail 0:08:23.200 --> 0:08:27.000 for ninety eight dollars. Old Navies is just twenty eight 0:08:27.040 --> 0:08:30.280 dollars and it's already selling very well, so I think 0:08:30.320 --> 0:08:34.440 that very very strong execution. Their Gap has just been doing. 0:08:34.600 --> 0:08:37.000 The Gap brand itself has been doing very well and 0:08:37.120 --> 0:08:43.720 just debuted a new video campaign featuring Parker Posey and 0:08:44.000 --> 0:08:48.439 talking about living Gap and gaps feel like Gap. 0:08:48.679 --> 0:08:51.839 Well well, and she's now on that hit HBO show, 0:08:52.280 --> 0:08:56.280 a White Lotus, So good timing there. Gap exactly not 0:08:56.559 --> 0:08:59.959 the same though at its two other brands, Banana Republic 0:09:00.080 --> 0:09:01.640 and Athleta, still lagging. 0:09:02.800 --> 0:09:05.880 Actually no, I think I think you're seeing both of 0:09:05.920 --> 0:09:09.760 those pick up. I'm more confident in Athleta in terms 0:09:09.800 --> 0:09:13.400 of where they are. With Banana Republic, I think they're 0:09:13.440 --> 0:09:16.640 doing fine according to the transaction data. I think those 0:09:16.840 --> 0:09:21.960 also are probably tracking a little bit better than analyst estimates. 0:09:22.440 --> 0:09:25.840 They're smaller because the two biggest pieces of the business 0:09:25.840 --> 0:09:29.560 are really Old Navy and Gap. But we're really looking 0:09:29.600 --> 0:09:33.559 for new leadership at Banana Republic to really set directions, 0:09:33.600 --> 0:09:36.720 so it doesn't it doesn't seem as exciting to me 0:09:36.800 --> 0:09:40.800 as it was before. But I think you know that 0:09:40.840 --> 0:09:43.319 could change once they bring in new leadership. But they 0:09:43.360 --> 0:09:47.680 do have a new speaking of White Lotus, Banana Republic 0:09:47.760 --> 0:09:51.800 is going to do a collaboration, so it's going to 0:09:51.840 --> 0:09:55.520 be you know, Banana Republic x White Lotus and that's 0:09:55.600 --> 0:09:59.040 going to be dropping next Wednesday. I know that in 0:09:59.080 --> 0:10:01.280 the store here and sen City. They just sent me 0:10:01.280 --> 0:10:04.000 an invite to come attend that, so I think that 0:10:04.040 --> 0:10:05.080 could be really exciting. 0:10:05.360 --> 0:10:05.640 Wow. 0:10:06.080 --> 0:10:08.400 Yeah, they're forward thinking by the gap. 0:10:08.480 --> 0:10:09.400 Huh. 0:10:09.480 --> 0:10:12.480 Well, let's go back to Macy's because Macy's and they 0:10:12.480 --> 0:10:15.400 also have some other brands that have been doing very well, 0:10:15.480 --> 0:10:19.560 right Blue Mercury, Bloomingdale's. But Macy's and it's addressed some 0:10:19.640 --> 0:10:22.360 challenges it has had, closing stores over the last year, 0:10:22.559 --> 0:10:25.240 investing more money and successful ones. So what's what's the 0:10:25.280 --> 0:10:28.120 strategy there and is it working for Macy's. 0:10:28.600 --> 0:10:32.040 Yes, Tom, So you're absolutely right. This new strategy which 0:10:32.080 --> 0:10:35.040 is where they're guess what, they're going back to their 0:10:35.080 --> 0:10:38.680 basics and that is adding more service in their stores. 0:10:38.720 --> 0:10:41.920 They've also really improved the store so when you go in, 0:10:41.960 --> 0:10:46.480 they're a lot more open, there's no clutter there, and 0:10:46.520 --> 0:10:49.880 they're bringing in more relevant brands. So a brand that 0:10:49.960 --> 0:10:55.360 they brought in its the a VC Luffy and this 0:10:55.559 --> 0:10:58.280 was a brand that was started in twenty seventeen by 0:10:58.320 --> 0:11:04.800 Max Azria's daughter Joyce Asria, and it's wonderful, beautiful, stylish 0:11:04.920 --> 0:11:09.079 clothes that really appeals to the millennial. They've Macy's had 0:11:09.120 --> 0:11:11.880 it since twenty seventeen, but it was just in a few, 0:11:11.960 --> 0:11:14.640 you know, in a limited amount of doors, and now 0:11:14.679 --> 0:11:17.400 that's been expanded and I just saw it in our 0:11:17.480 --> 0:11:19.960 store here in Century City, So that's brand new for 0:11:20.040 --> 0:11:24.080 this store. But I think it's absolutely on trend and 0:11:24.200 --> 0:11:26.320 relevant and should do really well. So they need to 0:11:26.320 --> 0:11:29.520 do more of that. And so in these stores that 0:11:29.559 --> 0:11:32.800 they are revitalizing, they did see a lift in positive 0:11:32.840 --> 0:11:36.640 comp sales, but it's small, right, because they did fifty stores. 0:11:37.080 --> 0:11:40.200 They're now adding another seventy five stores, including the one 0:11:40.240 --> 0:11:43.960 next door to me, and I've already seen the improvement there. 0:11:44.160 --> 0:11:46.800 But still when you look at Nordstrom, I mean the 0:11:46.800 --> 0:11:50.040 traffic there is always busier, and I think, you know, 0:11:50.240 --> 0:11:52.920 we'll see good numbers coming out of Nordstrom. So I 0:11:52.920 --> 0:11:55.720 think they have a ways to go with the mainline Macy's. 0:11:55.720 --> 0:11:58.920 But as you pointed out, Bloomingdale's and bloom Mercury are 0:11:59.000 --> 0:12:02.040 really doing well. Those are comping positive and we think 0:12:02.080 --> 0:12:05.559 they get a lift with the sax Nieman merger because 0:12:05.600 --> 0:12:08.520 they're having issues with vendors and customer service, and that 0:12:08.559 --> 0:12:12.679 could shift more luxury sales to Nordstrom and Bloomingdale's. 0:12:12.880 --> 0:12:15.040 Well, a lot to look forward to our thanks to 0:12:15.160 --> 0:12:19.840 Mary Ross, Gilbert Bloomberg Intelligence senior equity analyst covering retail. 0:12:20.360 --> 0:12:22.600 Coming up on Bloomberg day Break weekend, we'll look ahead 0:12:22.600 --> 0:12:26.040 to a special European Council summit how that may impact 0:12:26.080 --> 0:12:30.199 the war in Ukraine. I'm Tom Busby, and this is Bloomberg. 0:12:41.920 --> 0:12:44.440 This is Bloomberg day Break Weekend, our global look ahead 0:12:44.440 --> 0:12:46.760 at the top stories for investors in the coming week. 0:12:46.920 --> 0:12:50.080 I'm Tom Busby in New York. Up later in our program, 0:12:50.160 --> 0:12:52.840 we'll look ahead to the first reading of Australia's economy 0:12:53.160 --> 0:12:56.880 following the RBA's first rate cut since November of twenty twenty. 0:12:57.200 --> 0:12:59.160 But first, the path to peace in the war in 0:12:59.280 --> 0:13:02.360 Ukraine took our radical turn this week as a meeting 0:13:02.400 --> 0:13:06.520 between US President Donald Trump, Ukraine President Volodimir Zelensky, and 0:13:06.600 --> 0:13:10.560 US Vice President JD Vance devolved into an argument right 0:13:10.559 --> 0:13:12.679 in front of the White House Press. Here's what that 0:13:12.800 --> 0:13:15.480 sounded like when they met in the Oval Office on Friday. 0:13:15.960 --> 0:13:18.400 We're trying to solve a problem. Don't tell us what 0:13:18.400 --> 0:13:21.200 we're going to feel. I'm because you're in no position 0:13:21.280 --> 0:13:22.000 to dictate that. 0:13:22.240 --> 0:13:26.720 Remember this, you're in no position to dictate what we're 0:13:26.720 --> 0:13:29.120 going to feel. We're going to feel very good. 0:13:29.240 --> 0:13:33.520 Feel We're gonna feel very good and very strong influence. 0:13:33.600 --> 0:13:36.320 You're right now, not in a very good position. You've 0:13:36.320 --> 0:13:39.640 allowed you be in a very bad position to be 0:13:39.720 --> 0:13:40.400 right about from. 0:13:40.320 --> 0:13:41.760 The very beginning of the war. 0:13:41.960 --> 0:13:44.640 Not in a good position. You don't have the cards 0:13:44.720 --> 0:13:49.080 right now with us. You start having right now, you pay. 0:13:51.240 --> 0:13:54.400 You're gambling with the lives from millions of people. You're 0:13:54.440 --> 0:13:59.079 gambling with world War three. You're gambling with World War three. 0:13:59.720 --> 0:14:03.720 And what you're doing is very disrespectful to the country. 0:14:03.760 --> 0:14:07.200 This country. It's back to you far more than a 0:14:07.240 --> 0:14:09.240 lot of people said they should have have. 0:14:09.280 --> 0:14:12.160 You said thank you once this entire meeting. No, in 0:14:12.240 --> 0:14:14.480 this entire meeting, you said thank you. 0:14:14.480 --> 0:14:18.199 You went to Pennsylvania and campaigned for the opposition in October. 0:14:18.520 --> 0:14:21.480 Offer some words of appreciation for the United States of 0:14:21.520 --> 0:14:25.680 America and the president who's trying to save your country. 0:14:26.800 --> 0:14:30.720 Please, you're saying that if you will speak very loudly 0:14:30.760 --> 0:14:31.320 about the war. 0:14:31.600 --> 0:14:34.680 He's not speaking loudly. He's not speaking loudly. Your country 0:14:34.720 --> 0:14:37.360 is in big trouble. No, No, you've done a. 0:14:37.360 --> 0:14:40.320 Lot of talking. Your country is in big trouble. I 0:14:40.400 --> 0:14:42.600 know you're not winning. You're not winning this. 0:14:43.400 --> 0:14:45.920 You have a damn good chance of coming out okay, 0:14:45.960 --> 0:14:47.200 because of the President. 0:14:47.240 --> 0:14:50.800 We're staying Yawa country staying strong. From the very beginning 0:14:50.800 --> 0:14:53.320 of the war, we've been alone, and we are thankful. 0:14:53.360 --> 0:14:54.080 I said, thanks. 0:14:56.600 --> 0:14:59.640 We gave you, through this stupid president, three hundred and 0:14:59.680 --> 0:15:01.040 fifty billion dollars. 0:15:01.520 --> 0:15:03.240 We gave your military equipment. 0:15:03.320 --> 0:15:05.200 You and your men are brave, but they had to 0:15:05.280 --> 0:15:09.240 use our military If you didn't have our military equipment, 0:15:09.840 --> 0:15:13.080 If you didn't have our military equipment, this war would 0:15:13.120 --> 0:15:14.880 have been over in two weeks. 0:15:14.920 --> 0:15:17.800 In three days, I heard it from Putin in three days. 0:15:18.080 --> 0:15:20.120 This is how maybe less in two weeks. 0:15:20.120 --> 0:15:22.120 Of course, Yes, it's gonna be a very hard thing 0:15:22.160 --> 0:15:24.920 to do business like this. I tell you this. They 0:15:24.960 --> 0:15:25.560 thank you. 0:15:25.880 --> 0:15:29.560 I accept, except that they're accept the American except that. 0:15:29.560 --> 0:15:33.360 There are disagreements, and let's go litigate those disagreements rather 0:15:33.440 --> 0:15:35.920 than trying to fight it out in the American media. 0:15:35.840 --> 0:15:36.520 When you're wrong. 0:15:37.080 --> 0:15:38.560 We know that you're wrong, but you see, I think 0:15:38.600 --> 0:15:41.240 it's good for the American people to see what's going on. 0:15:41.880 --> 0:15:43.480 I think it's very important. That's why I kept this 0:15:43.560 --> 0:15:47.600 going so long. You have to be thankful. You don't 0:15:47.640 --> 0:15:51.640 have the cards. You're buried there, your people had died. 0:15:52.000 --> 0:15:56.360 You're running low on soldiers. Listen, you're running slow on soldiers. 0:15:56.680 --> 0:15:57.920 It would be a damn good thing. 0:15:58.120 --> 0:16:00.200 And then you then you tell us I don't want 0:16:00.200 --> 0:16:02.400 to cease fire. I don't want to cease fire. I 0:16:02.440 --> 0:16:03.760 want to go and I wanted this. 0:16:04.440 --> 0:16:07.560 Look, if you could get a ceasefire right now, I 0:16:07.640 --> 0:16:09.920 tell you you take it. So the bullets stopped flying, 0:16:09.920 --> 0:16:11.840 and your ment stuff courting kills. 0:16:11.960 --> 0:16:13.720 Want to stop the war. But I'm saying, you don't 0:16:13.720 --> 0:16:14.840 want to see you. 0:16:15.000 --> 0:16:17.720 I want to see guarantee because you'll get a ceasefire 0:16:17.760 --> 0:16:19.160 faster than any Greelet's cow. 0:16:19.240 --> 0:16:22.760 Are people about fire? What they see? That wasn't with me. 0:16:23.440 --> 0:16:27.120 That wasn't with me. That was with a guy named Biden, 0:16:27.160 --> 0:16:29.960 who was not a smart person. That was your That 0:16:30.040 --> 0:16:32.200 was with Obama. Excuse me. 0:16:32.360 --> 0:16:34.680 That was with Obama who gave you sheets, and I 0:16:34.760 --> 0:16:38.040 gave you javelins. I gave you the javelins to take 0:16:38.080 --> 0:16:42.400 out all those tanks. Obama gave you sheets. In fact, 0:16:42.440 --> 0:16:46.200 the statement is Obama gave sheets, and Trump gave javelins. 0:16:47.480 --> 0:16:50.520 You got to be more thankful, because let me tell you, 0:16:50.520 --> 0:16:53.440 you don't have the cards. With us, you have the cards, 0:16:53.920 --> 0:16:56.600 but without us, you don't have any cards. 0:16:56.600 --> 0:17:00.320 The sharp encounter between Presidents Trump and Zelensky plus Vice A. 0:17:00.400 --> 0:17:00.600 JD. 0:17:00.760 --> 0:17:03.680 Vans overshadowed what was supposed to be a moment of 0:17:03.760 --> 0:17:06.760 unity between the leaders and put any possibility of a 0:17:06.760 --> 0:17:10.720 peace deal between Russia and Ukraine in question. Now does 0:17:10.760 --> 0:17:13.520 it fall to Europe to form a resolution for more 0:17:13.600 --> 0:17:15.960 Let's go to London and bring in Bloomberg Daybreak Europe 0:17:15.960 --> 0:17:18.199 anchor Caroline hepgar Tom. 0:17:18.400 --> 0:17:22.840 This week, Vladimir Putin's new Envoy for Foreign Economic Cooperation 0:17:23.080 --> 0:17:26.360 took to X for the first time since twenty twelve. 0:17:26.920 --> 0:17:30.680 Kiril Dimitriyev used the platform to declare the importance of 0:17:30.920 --> 0:17:35.800 US Russia cooperation to address what he's described as world challenges. 0:17:36.280 --> 0:17:39.240 His sudden re emergence on the site after years of 0:17:39.320 --> 0:17:44.159 silence highlights the rapid rehabilitation of Russia by President Trump 0:17:44.600 --> 0:17:50.480 and the new challenge now facing the international community. European leaders, meanwhile, 0:17:50.520 --> 0:17:54.200 are holding a special European Council in the coming days, 0:17:54.560 --> 0:17:58.520 taking place just two weeks before a planned quarterly summit. 0:17:58.920 --> 0:18:02.320 They're going to discuss defense spending and Russia's war on 0:18:02.480 --> 0:18:08.760 Ukraine in a world without the historically assured US security guarantee. 0:18:08.800 --> 0:18:12.080 The emergency summit will aim to take stock of US 0:18:12.200 --> 0:18:16.280 EU relations after various leaders have held meetings at the 0:18:16.320 --> 0:18:20.080 White House to get FaceTime with the US President. So 0:18:20.080 --> 0:18:23.240 what will happen next in this extraordinary few weeks for 0:18:23.440 --> 0:18:27.760 global politics, and who, if anyone, will succeed in winning 0:18:27.840 --> 0:18:31.600 the favor of President Trump. I've been speaking to Bloomberg's 0:18:31.640 --> 0:18:34.200 EMEA News director of Roslyn Matheson. 0:18:34.520 --> 0:18:36.119 If you're a leader in Europe at the moment, you 0:18:36.160 --> 0:18:38.399 spend a lot of time saying very much out loud, 0:18:38.680 --> 0:18:41.480 We're going to spend more on defense, that's very clear, 0:18:41.840 --> 0:18:44.840 and we are starting to see some numbers come around then, 0:18:44.920 --> 0:18:48.240 including in the UK of course obviously as well. But 0:18:48.320 --> 0:18:50.960 what we're understanding in Europe is that the EU is 0:18:51.040 --> 0:18:54.840 basically trying to find a way to unlock hundreds of 0:18:54.840 --> 0:18:59.199 billions of euros in extra funding for defense, and that 0:18:59.240 --> 0:19:02.639 could come in a bunch of different ways, including potentially 0:19:02.680 --> 0:19:07.560 the joint issuance of bonds for example, repurposing existing funds, 0:19:07.600 --> 0:19:11.679 as well shifting spending from other places. But that's going 0:19:11.760 --> 0:19:14.360 to be part of the conversation when EU leaders meet, 0:19:14.480 --> 0:19:17.679 is how practically they can all start to increase the 0:19:17.760 --> 0:19:20.760 defense spending, both at a national level and also at 0:19:20.760 --> 0:19:23.960 a European level, and how they can show that very clearly, 0:19:24.000 --> 0:19:27.080 in particular to the US President Donald Trump, that they're 0:19:27.119 --> 0:19:30.520 meeting their words with action. The question is will there'll 0:19:30.560 --> 0:19:34.080 be agreement across the EU and the leaders meet about 0:19:34.119 --> 0:19:36.560 a doing that and then b how to do it 0:19:36.600 --> 0:19:39.840 and what's the best mechanism to do so, because of 0:19:39.920 --> 0:19:42.880 course these all come with costs at home, and if 0:19:42.880 --> 0:19:47.720 you're talking about potentially ramping up joint issuance about shifting spending, 0:19:48.119 --> 0:19:50.959 that may come at the expense of other programs that 0:19:51.040 --> 0:19:54.600 Europeans want, and so you could see some domestic comparatives 0:19:55.040 --> 0:19:57.000 feed in their way. People say, well, hang on, my 0:19:57.080 --> 0:19:59.119 voters don't want that to happen, and they could be 0:19:59.720 --> 0:20:02.840 a backlash for me. So we're expecting there to be 0:20:02.880 --> 0:20:06.400 a proper conversation about the mechanism to increase defense spending. 0:20:07.040 --> 0:20:09.040 Are we going to see an actual agreement come from 0:20:09.080 --> 0:20:10.920 this meeting? That's really up in the air. 0:20:11.400 --> 0:20:15.760 There is European leaders are speaking to president from making 0:20:15.840 --> 0:20:21.000 visits to Washington, took us through their communication priorities with 0:20:21.240 --> 0:20:22.040 the presidents. 0:20:22.880 --> 0:20:25.560 Well, we had Emmanuel mccron obviously from France there, and 0:20:25.600 --> 0:20:29.960 we've also got the UK Prime Minister Kirstarma meeting with 0:20:30.080 --> 0:20:32.480 Donald Trump. And the message from that is really that 0:20:32.760 --> 0:20:36.159 the US cannot afford to go it alone when it 0:20:36.200 --> 0:20:39.199 comes to things like Ukraine and Russia, that really Europe 0:20:39.200 --> 0:20:43.119 does need to be very much in the conversation. So 0:20:43.200 --> 0:20:45.560 it was the UK when it comes to things like 0:20:46.000 --> 0:20:50.440 conversations around future security guarantees for Ukraine for example, when 0:20:50.440 --> 0:20:54.600 it comes to conversations around mutual defense for example. So 0:20:54.680 --> 0:20:57.439 there'd be a message about how yes, Europe and the 0:20:57.520 --> 0:21:00.520 UK have gotten the message and they're going to increase 0:21:00.560 --> 0:21:03.879 their own defense spending and their own security. But also 0:21:04.040 --> 0:21:07.920 that when Donald Trump talks about resolving things like Ukraine 0:21:07.960 --> 0:21:11.280 for example, that he really does need Europe in the conversation. 0:21:12.920 --> 0:21:16.119 What do you think the attitude of the newly elected 0:21:16.480 --> 0:21:21.040 chancellor and waiting Fred Mertz might be as he looks 0:21:21.040 --> 0:21:25.760 to form a government. And whilst President Trump has used 0:21:25.800 --> 0:21:31.440 his strongest language yet in recent days about the EU 0:21:31.520 --> 0:21:35.159 I either the European Union set up to screw the 0:21:35.280 --> 0:21:38.560 US in his words, what do you think the attitude 0:21:38.600 --> 0:21:41.840 of Germany is going to be to this obviously central 0:21:41.960 --> 0:21:44.320 to policy making in Europe, will. 0:21:44.200 --> 0:21:47.520 Be very interesting because in fact Friedrich Merz is obviously 0:21:47.560 --> 0:21:49.480 not chantilly yet and he has got to work out 0:21:49.480 --> 0:21:52.320 how to form a government. But he's already met with 0:21:52.359 --> 0:21:55.440 the French President Emanuel Macron. So he's getting his ear 0:21:55.960 --> 0:21:58.960 to the door there at least in the conversations as 0:21:59.000 --> 0:22:02.200 things are moving so quickly these days when it comes 0:22:02.240 --> 0:22:06.200 to the political landscape and the geopolitical landscape, and so 0:22:06.280 --> 0:22:10.160 he's obviously part of the conversation already, which is very important. 0:22:10.560 --> 0:22:12.879 Frederick Motz actually might have a bit of a rapport 0:22:13.480 --> 0:22:17.480 with Donald Trump. They are both conservative of though conservative 0:22:17.920 --> 0:22:21.439 in different ways. And Donald Trump did congratulate Fredrick Matz 0:22:21.520 --> 0:22:25.879 on his election win in Germany quite quickly, and you know, 0:22:25.920 --> 0:22:29.560 welcoming a conversation with him sometime soon, and so there 0:22:29.600 --> 0:22:31.520 might be a little bit of common ground just in 0:22:31.600 --> 0:22:34.440 terms of how they talk to each other and really 0:22:34.520 --> 0:22:37.760 having a rapport is probably the very first and most 0:22:37.800 --> 0:22:41.160 important step these days in dealing with the US under 0:22:41.200 --> 0:22:43.800 Donald Trump. So it's possible he might actually gel a 0:22:43.800 --> 0:22:47.800 bit with Donald Trump. That said, Frederick Mots has also 0:22:47.840 --> 0:22:51.080 been a fierce advocate for Ukraine and for the need 0:22:51.080 --> 0:22:53.760 for Ukraine to be supported, and so there might be 0:22:53.800 --> 0:22:56.200 some points of difference around that. And obviously, of course 0:22:56.560 --> 0:23:00.560 if there are to be tariffs on European goods as well, it's. 0:23:00.400 --> 0:23:04.760 Not just about hot wars, about military wars, it's also 0:23:05.080 --> 0:23:09.919 possibly about economic war, certainly about trade tariffs. How do 0:23:09.960 --> 0:23:14.280 you think Europe is thinking about this? The tit for 0:23:14.359 --> 0:23:18.399 tat idea that there could be retaliation from the EU 0:23:18.800 --> 0:23:21.480 if President Trump does impose, as he has said he 0:23:21.560 --> 0:23:26.000 wants to twenty five percent tariffs. It's very murky, actually, 0:23:26.760 --> 0:23:30.040 the rhetoric versus the reality of tariffs out. 0:23:29.840 --> 0:23:33.040 Of the Trump White House currently, and we don't know 0:23:33.080 --> 0:23:35.879 exactly what a twenty five percent tariff on the EU 0:23:36.600 --> 0:23:38.600 would look like. We don't know whether that would be 0:23:39.080 --> 0:23:43.359 all exports that are sent from the EU into the US, 0:23:43.520 --> 0:23:47.320 or only certain sectors or certain products. It's very unclear 0:23:47.359 --> 0:23:49.440 what exactly we're looking at. And that's why you can 0:23:49.480 --> 0:23:53.000 see for now that while European leaders and the European 0:23:53.119 --> 0:23:57.679 Union are saying they will very firmly retaliate if needed, 0:23:57.880 --> 0:24:00.280 and they are drawing out plans indeed to do so, 0:24:00.320 --> 0:24:03.000 and they have lists indeed to do so, that they're 0:24:03.000 --> 0:24:06.159 holding their fire a little bit because it's very unclear 0:24:06.200 --> 0:24:09.680 exactly what they're dealing with. We can see, for example, 0:24:09.680 --> 0:24:15.080 with Canderine Mexico that tariffs are not being implemented immediately. 0:24:15.160 --> 0:24:18.639 There's further talk potentially about them being pushed back again. 0:24:18.720 --> 0:24:21.159 So if you come out too strongly there, you know, 0:24:21.240 --> 0:24:23.800 do you risk Donald Trump's iron does he then pushed 0:24:23.800 --> 0:24:26.600 her head quickly on tariffs that he didn't intend to 0:24:26.640 --> 0:24:29.960 move so fast on, for example, And so it's really 0:24:30.040 --> 0:24:32.959 about the game of trying to work out how to 0:24:33.040 --> 0:24:36.720 manage the situation with Donald Trump in a theoretical sense 0:24:36.760 --> 0:24:40.199 when tariff's not yet real but are possibly coming and 0:24:40.240 --> 0:24:43.000 we don't know what those tariffs might look like, but 0:24:43.119 --> 0:24:46.600 certainly we do know that European Commission has drawn up 0:24:46.640 --> 0:24:50.159 list of goods for potential retaliation and have said very 0:24:50.200 --> 0:24:52.040 clearly they're willing to use them if needed. 0:24:52.440 --> 0:24:55.960 My thanks to Bloomberg's EMEA News director Roslyn Matheson for 0:24:56.000 --> 0:24:58.840 speaking to me and will continue to bring you full 0:24:58.920 --> 0:25:02.960 coverage of the special European Council planned for Thursday, the 0:25:03.040 --> 0:25:05.639 sixth of March. I'm Caline Hepge here in London. You 0:25:05.640 --> 0:25:08.600 can catch us every weekday morning for Bloomberg Daybreak Europe, 0:25:08.600 --> 0:25:11.119 beginning at six am in London. That's one am on 0:25:11.200 --> 0:25:11.720 Wall Street. 0:25:11.800 --> 0:25:14.760 Tom, Thank you, Caroline. And coming up on Bloomberg day 0:25:14.760 --> 0:25:16.920 Break Weekend, we'll look ahead to a slew of economic 0:25:16.960 --> 0:25:20.720 data out of Australia next week. I'm Tom Busby and 0:25:20.840 --> 0:25:34.600 this is Bloomberg. This is Bloomberg day Break Weekend, our 0:25:34.640 --> 0:25:36.800 global look ahead at the top stories for investors in 0:25:36.840 --> 0:25:39.760 the coming week. I'm Tom Busby in New York. A 0:25:39.880 --> 0:25:42.720 ton of economic data coming out of Australia this week, 0:25:42.760 --> 0:25:46.439 including the first reading of the country's economy following the 0:25:46.480 --> 0:25:49.560 Reserve Bank of Australia's first rate cut since November of 0:25:49.600 --> 0:25:52.240 twenty twenty. For more, let's get to the host of 0:25:52.280 --> 0:25:54.760 the Daybreak Asia podcast, Doug Krisner. 0:25:55.160 --> 0:25:58.160 Tom, we're looking ahead to the report on Ozzie GDP, 0:25:58.840 --> 0:26:01.480 along with numbers on Reek hell sales and trade. They're 0:26:01.520 --> 0:26:04.359 all on tap for more on what we can expect. 0:26:04.359 --> 0:26:07.800 I'm joined by Swati Pondi, Asia Eco GUV reporter for 0:26:07.880 --> 0:26:11.680 Bloomberg News. Swati joins us from our radio studio in Sydney. 0:26:12.040 --> 0:26:14.160 Thank you for making time for us. Can we begin 0:26:14.240 --> 0:26:16.439 by taking a step back because it was only a 0:26:16.480 --> 0:26:19.640 few weeks ago that the Reserve Bank of Australia cut 0:26:19.680 --> 0:26:21.760 the policy rate for the first time in more than 0:26:21.800 --> 0:26:24.439 four years. So a lot has been happening with the 0:26:24.480 --> 0:26:27.800 Australian economy. Maybe it's a little complicated. Can you help 0:26:27.840 --> 0:26:29.760 me understand where things stand at the moment. 0:26:30.240 --> 0:26:34.040 Yes, it's all happening in Australia, Doug. We had the 0:26:34.200 --> 0:26:38.439 first rate cut in four years. The Reserve Bank of 0:26:38.480 --> 0:26:42.440 Australia had been a laggard in this easing cycle and 0:26:42.640 --> 0:26:46.800 finally it delivered a cut and that was largely driven 0:26:46.880 --> 0:26:53.200 by inflation report which showed that price pressures are indeed cooling, 0:26:53.560 --> 0:26:57.600 which was one of the RBA's biggest concerns last year 0:26:58.359 --> 0:27:03.560 when it decided to keep rates unchanged, and then come January, 0:27:04.680 --> 0:27:10.160 the data showed that prices are cooling in. Consumer sentiment 0:27:10.359 --> 0:27:14.080 was weak. People weren't spending, and so the Reserve Bank 0:27:14.119 --> 0:27:17.439 thought it's a good time to start easing cycle. But 0:27:18.200 --> 0:27:22.520 it was really cautious as well. It sounded very hawkish 0:27:23.480 --> 0:27:26.960 despite the rate cut and signaled to the market that 0:27:27.480 --> 0:27:32.879 do not expect many more cuts. Maybe it's one and done, 0:27:33.040 --> 0:27:33.960 or maybe one more. 0:27:34.119 --> 0:27:35.840 So I mentioned that we're going to get the retail 0:27:35.960 --> 0:27:40.000 sales data. How are consumers in Australia behaving right now 0:27:40.040 --> 0:27:41.000 in the major cities. 0:27:41.480 --> 0:27:46.760 Look, since pretty much all of twenty twenty four, consumers 0:27:46.920 --> 0:27:51.600 were being very stingy. People weren't spending at all. People 0:27:51.640 --> 0:27:56.920 were waiting for big discounting events like the November Black 0:27:56.960 --> 0:28:02.360 Friday sales and events like that to actually spent. However, 0:28:02.840 --> 0:28:06.800 the government gave everybody tax cuts which kicked in in 0:28:06.920 --> 0:28:11.800 July twenty twenty four. We also got some subsidies on energy, 0:28:12.359 --> 0:28:16.720 we got some subsidies on rents, and that basically gave 0:28:16.840 --> 0:28:20.080 people a little bit more of spending power. And then 0:28:20.119 --> 0:28:23.000 we also, like I said, inflation came down, so the 0:28:23.080 --> 0:28:27.760 real purchasing power of people improved so towards the end 0:28:27.760 --> 0:28:31.960 of last year, so kind of November, December January period, 0:28:32.040 --> 0:28:35.640 we have seen people spending more and if you go 0:28:35.760 --> 0:28:41.160 out in Sydney, it's buzzing. It's crazy buzzing pubs, restaurants, 0:28:41.560 --> 0:28:46.200 shopping centers, everything. People are feeling a little bit more 0:28:46.240 --> 0:28:49.920 confident and I'm sure the rate cut that we got 0:28:50.000 --> 0:28:52.600 in February will further help that too. 0:28:52.840 --> 0:28:55.200 So from what I understand, the labor market is holding 0:28:55.280 --> 0:28:56.560 up very well, right. 0:28:56.880 --> 0:29:01.520 That's true, So like the Usustralia's labor market is pretty 0:29:01.560 --> 0:29:05.400 strong as well. Our unemployment rate is hovering in that 0:29:05.520 --> 0:29:09.600 four to four point one territory, which is really low 0:29:09.680 --> 0:29:14.240 by Australian standards, also very low by historical standards. That 0:29:14.560 --> 0:29:18.840 is driven by really strong employment growth. It has surpassed 0:29:18.840 --> 0:29:24.120 all expectations, and that is because government demand has been 0:29:24.120 --> 0:29:27.120 really strong. Government has been spending left, right and center 0:29:27.600 --> 0:29:32.200 and that has supported GDP as well as the labor market. 0:29:32.400 --> 0:29:35.520 So I mentioned we will also get figures on trade 0:29:35.640 --> 0:29:38.080 in the coming week. Can we talk a little bit 0:29:38.120 --> 0:29:41.960 about the potential impact on these US tariffs on Australia. 0:29:42.240 --> 0:29:45.840 Is it likely that there will be any impact at all? 0:29:46.640 --> 0:29:51.160 Trade is an interesting topic right now, so quite topical 0:29:51.200 --> 0:29:55.240 as well. And Australia is a small, open economy. One 0:29:55.400 --> 0:29:59.960 fourth of Australia's GDP comes from trade and thirty per 0:30:00.080 --> 0:30:03.040 cent of our exports go to China, so you can 0:30:03.120 --> 0:30:08.360 see how vulnerable we are to anything that happens in 0:30:08.480 --> 0:30:13.040 the trade side of things. We have had seven years 0:30:13.080 --> 0:30:17.960 of trade surplus, so pretty much from twenty eighteen through 0:30:18.160 --> 0:30:21.440 til the end of twenty twenty four, every single month 0:30:21.600 --> 0:30:26.440 we have had trade surplus. Is that at risk? Not really, 0:30:26.960 --> 0:30:31.920 because China's demand still seems really strong. We've had a 0:30:32.000 --> 0:30:37.200 period where China puts some embargo on Australian products and 0:30:37.240 --> 0:30:42.120 Australia was able to still sell to other markets. Now, 0:30:42.280 --> 0:30:47.400 as far as Donald Trump's policies are concerned, Australia does 0:30:47.440 --> 0:30:52.280 not export too much to the US. We import a lot, 0:30:53.160 --> 0:30:55.520 which is good from Donald Trump's perspective. 0:30:55.680 --> 0:30:59.200 Yeah, but I'm wondering about something like steel and aluminum. 0:30:59.320 --> 0:31:02.280 I know that a lot of the ores and minerals 0:31:02.320 --> 0:31:06.320 are exported from Australia to China for processing, and if 0:31:06.400 --> 0:31:10.200 Chinese demand in those areas were to contract a little bit, 0:31:10.240 --> 0:31:12.920 couldn't that have a knock on effect in Australia. 0:31:13.440 --> 0:31:17.560 Yeah, so there is a risk from the cascading effects 0:31:17.640 --> 0:31:21.000 or reciprocal effects, and you know, there are a lot 0:31:21.000 --> 0:31:25.280 of permutations and combinations that people have been talking about. 0:31:25.600 --> 0:31:28.960 The direct impact so far from people I have spoken to, 0:31:29.080 --> 0:31:33.360 from economists, and also the responses we have seen from 0:31:34.400 --> 0:31:38.680 trade bodies and stuff, seems like from a macro perspective, 0:31:38.760 --> 0:31:43.000 Australia will be fine. Obviously, individual companies who are at 0:31:43.040 --> 0:31:46.840 the receiving end of these tariffs will be affected, and 0:31:47.000 --> 0:31:50.600 they have been lobbying as well, and Australia's Prime Minister 0:31:50.760 --> 0:31:54.480 and Trade Minister have been lobbying too to get some 0:31:54.640 --> 0:31:57.960 relief from the US. The last time that Donald Trump 0:31:58.200 --> 0:32:02.120 was in office, Australia did win no reprieve, so we're 0:32:02.200 --> 0:32:04.640 keeping our fingers crossed that happens again. 0:32:04.840 --> 0:32:07.760 I mentioned the GDP report that we're also expecting in 0:32:07.800 --> 0:32:09.800 the week ahead. Give me a sense of what the 0:32:09.840 --> 0:32:13.040 market is expecting in terms of overall economic growth. 0:32:13.320 --> 0:32:17.160 So, like I mentioned earlier, Australia's economy has been pretty 0:32:17.200 --> 0:32:20.440 weak pretty much since the middle of twenty twenty three. 0:32:20.720 --> 0:32:24.400 All of twenty twenty four was very tepid. We are 0:32:24.560 --> 0:32:29.080 in the deepest per capita slump since nineteen ninety one 0:32:29.640 --> 0:32:32.760 excluding the pandemic, which means people have been feeling like 0:32:32.800 --> 0:32:35.720 they are going backwards even though the economy has been growing. 0:32:35.760 --> 0:32:38.840 So we have not had a recession as such, but 0:32:39.080 --> 0:32:45.400 individually people have gone back so that is unlikely to change. 0:32:45.440 --> 0:32:49.040 That per capita recession probably is unlikely to change. But 0:32:49.600 --> 0:32:53.280 this data that we are expecting is for the last 0:32:53.320 --> 0:32:56.840 three months of twenty twenty four. It does look like 0:32:56.960 --> 0:33:00.840 the economy did pick up and that was by consumer 0:33:00.920 --> 0:33:06.320 spending people feeling more confident about their finances. Public demand 0:33:06.440 --> 0:33:10.520 has been strong as well government spending. We have election 0:33:10.640 --> 0:33:13.280 this year or two, so some of the spending is 0:33:13.560 --> 0:33:18.760 driven by that. So together with consumer spending, trade and 0:33:19.160 --> 0:33:22.440 public demand, it looks like the last three months of 0:33:22.440 --> 0:33:25.680 twenty twenty four were good and so far the momentum 0:33:25.720 --> 0:33:28.320 it's only been like two months of the year, it 0:33:28.400 --> 0:33:29.600 looks good as well. 0:33:29.800 --> 0:33:32.240 Swati, thank you so much for helping us understand the 0:33:32.320 --> 0:33:35.960 nuances of what's been happening these days in the Australian 0:33:36.000 --> 0:33:38.720 economy as we look ahead to this week's ECO data. 0:33:38.960 --> 0:33:42.720 Swati Pondi Asia Eco GUV reporter for Bloomberg News, joining 0:33:42.800 --> 0:33:45.760 us from our studios in Sydney. Let's turn next to 0:33:45.880 --> 0:33:48.800 China and the rally that we have seen lately in 0:33:48.920 --> 0:33:52.800 tech talks. So far, these gains have far surpassed those 0:33:52.800 --> 0:33:57.000 of their American counterparts. Bloomberg opinion columnist July Wren has 0:33:57.040 --> 0:34:00.680 been writing about the Chinese alternative to the MagX. She's 0:34:00.760 --> 0:34:03.959 in our Hong Kong radio studio. Truly, it's always a pleasure, 0:34:04.040 --> 0:34:07.160 Thank you so much. How would you describe what's been 0:34:07.240 --> 0:34:09.319 happening with Chinese tech right now? 0:34:09.600 --> 0:34:14.040 Well, deep Seak really has changed the perception of Chinese investors. 0:34:14.200 --> 0:34:16.640 They do feel, I mean, going back, like we know 0:34:16.760 --> 0:34:19.920 that the Hong Kong listed is mostly Chinese companies, right 0:34:20.080 --> 0:34:25.760 they are deep value traps after the Beijing's regulator crackdown 0:34:25.800 --> 0:34:29.880 some big tech and the whole property bubble bust, like 0:34:30.239 --> 0:34:32.920 the Chinese shares are very cheap. But deep Sea basically 0:34:33.000 --> 0:34:36.600 said that, you know, China is not just a manufacturing powerhouse, 0:34:36.760 --> 0:34:39.680 it's also good with the software and digital stuff, right, 0:34:39.760 --> 0:34:44.640 Like deep Sea does a generative AI and the people 0:34:44.719 --> 0:34:49.480 didn't really expect that the Chin, a small unknown startup 0:34:49.960 --> 0:34:52.840 even to the Chinese until a month ago could do 0:34:53.000 --> 0:34:56.359 so well despite all the export controls, and that really 0:34:56.400 --> 0:34:59.200 fired up. And then what we're seeing is that you know, 0:34:59.320 --> 0:35:02.360 the tech stock, the software companies, they're doing very, very well, 0:35:02.560 --> 0:35:04.719 and there is a sense that the China can be 0:35:04.760 --> 0:35:05.480 a growth market. 0:35:05.480 --> 0:35:05.760 Again. 0:35:06.000 --> 0:35:09.040 In the latest column that you authored for Bloomberg Opinion, 0:35:09.080 --> 0:35:13.240 you write that a Chinese alternative to the Magnificent Seven arrives. 0:35:13.280 --> 0:35:15.680 And I'm wondering whether you're really focused on a lot 0:35:15.680 --> 0:35:18.320 of these e commerce names that we hear so much about, 0:35:18.360 --> 0:35:19.960 like Ali Baba Tencent. 0:35:20.520 --> 0:35:24.120 Yes. One thing though, is like a lot of it 0:35:24.160 --> 0:35:28.480 is about the positioning, like global asset managers positioning. Coming 0:35:28.480 --> 0:35:32.680 into this year, everyone is overweight on basically the big 0:35:32.719 --> 0:35:35.480 seven tax stocks, right the so called the notion of 0:35:35.520 --> 0:35:39.879 a US exceptionalism, and everyone agrees that the US store 0:35:39.960 --> 0:35:43.520 market is overvalued because just simply because so much money 0:35:43.560 --> 0:35:46.719 has been coming in and there is this genuine need 0:35:46.800 --> 0:35:49.640 to diversify, and now the question is where do you 0:35:49.680 --> 0:35:53.520 diversify to? Right, Like China, tex stock is one story. 0:35:53.680 --> 0:35:57.040 Another story is European stocks. They have been doing quite 0:35:57.040 --> 0:36:00.800 well as well, and there is expectation that the Donald 0:36:00.840 --> 0:36:04.560 Trump however you like it politically or not, could propel 0:36:04.640 --> 0:36:08.200 peace over Ukraine, which means that it could be good 0:36:08.280 --> 0:36:10.560 for European economies, especially Germany. 0:36:10.920 --> 0:36:13.879 You know, Beijin seems to have kind of changed its 0:36:13.920 --> 0:36:16.440 attitude where some of the big tech stories in China 0:36:16.480 --> 0:36:18.799 are concerned. I'm thinking back to the meeting a few 0:36:18.840 --> 0:36:21.239 weeks ago that chi Jinping had with some of the 0:36:21.320 --> 0:36:23.560 leaders of these big companies, and I'm thinking of Jack 0:36:23.680 --> 0:36:28.120 Ma in particular, as Chijin Ping changed his attitude when 0:36:28.120 --> 0:36:29.120 it comes to big tech. 0:36:29.560 --> 0:36:33.720 He has to because, believe it or not, just because 0:36:34.000 --> 0:36:38.359 China's economic outlook it's not so good. Right, like the 0:36:38.400 --> 0:36:43.080 big tech, the big e commerce platforms political fortunes actually 0:36:43.200 --> 0:36:47.440 are improving because they actually soak up a lot of employment. 0:36:47.600 --> 0:36:51.440 Right like young people. The unemployment rate for young people 0:36:51.440 --> 0:36:54.360 in China is very high. And if young people have 0:36:54.480 --> 0:36:58.400 no jobs, they could become delivery workers unfortunately, or like 0:36:58.600 --> 0:37:01.200 they could be uber Try in China that would be 0:37:01.239 --> 0:37:03.799 d D. Or they could set up a small e 0:37:03.880 --> 0:37:09.319 commercer shops selling stuff, or they could be influencers. And 0:37:10.200 --> 0:37:14.120 I think Beijing does recognize that these big platforms, they 0:37:14.160 --> 0:37:16.800 are job creators and they need to be nice to them. 0:37:16.880 --> 0:37:20.040 When you look at valuation, you're a financial analyst by training. 0:37:20.080 --> 0:37:21.520 What do you see when you look at some of 0:37:21.560 --> 0:37:24.360 these companies Chinese firms that trade in Hong. 0:37:24.320 --> 0:37:28.640 Kong, everything is relative. I mean Tesla trades at over 0:37:28.719 --> 0:37:32.240 one hundred times forward earnings. Shell me and the Bid 0:37:32.440 --> 0:37:36.240 they both do evs. They trade at the roughly forty 0:37:36.280 --> 0:37:40.600 and twenty five times, and relatively speaking, everyone everyone else 0:37:40.760 --> 0:37:43.719 is cheap compared to Tesla, right, And it's not just 0:37:43.840 --> 0:37:47.359 that a lot of Chinese feel that the Ela Musk 0:37:47.400 --> 0:37:50.239 has been very distracted lately and then that he's not 0:37:50.320 --> 0:37:54.040 paying attention to Tesla's business, and that opens a window 0:37:54.080 --> 0:37:57.080 for Chinese EV makers and in fact, like a lot 0:37:57.080 --> 0:37:59.880 of EV makers, they are adding like a lot of 0:38:00.719 --> 0:38:01.879 advanced technology. 0:38:02.120 --> 0:38:04.880 July, thank you so much. It's always a pleasure. Shuly Ran, 0:38:04.920 --> 0:38:08.719 Bloomberg opinion columnist, Joining us from our studios in Hong Kong, 0:38:09.000 --> 0:38:11.319 and I'm Doug Krisner. You can catch us weekdays for 0:38:11.360 --> 0:38:14.919 the Daybreak as your podcast. It's available wherever you get 0:38:14.960 --> 0:38:16.240 your podcast. Tom. 0:38:16.800 --> 0:38:19.160 Thank you Doug, and that does it for this edition 0:38:19.200 --> 0:38:22.080 of Bloomberg day Break Weekend. Join us again Monday morning, 0:38:22.120 --> 0:38:24.440 five am Wall Street Time for the latest on markets 0:38:24.440 --> 0:38:26.719 overseas and the news you need to start your day. 0:38:27.160 --> 0:38:30.080 I'm Tom Busby. Stay with us. Top stories and global 0:38:30.080 --> 0:38:32.200 business headlines are coming up right now