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This is Bloomberg day Break Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world, and straight ahead on the program, we look ahead to this week's monetary policy decision from the Fed, plus a first batch of big tech earnings. I'm Tom Busby.
In New York.
I'm Caline Hecker here in London, where we're asking how the European Central Bank will negotiate the new World Order.
I'm Doug Prisoner looking at what we can expect from next week's print on CPI in Australia.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven to three yeh New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, Sirius XM one twenty one, and around the world on Bloomberg Radio, dot Com and the Bloomberg Business App.
Good day to you. I'm Tom Busby, and we begin today's program with the Federal Reserve. The FED, concluding its two day meeting on Wednesday, expected to issue its first monetary policy decision of the new year. For more on what we might expect to see and why, we're joined by Michael McKee, Bloomberg International Economics and Policy correspondent. Well, Michael, after cutting rates for three meetings in a row, what do you expect to see this week from the Fed?
Not much. The Fed is going to be on hold. They've pretty much made that clear. The markets have right now priced in a one basis point chance of any kind of FED move, So nobody's expecting a whole lot. It's more going to be the focus on j Powell and his press conference afterwards and what he might say
about future FED moves. All of this in the context of the new president and what his economic plans are going to be, since they don't know yet, and you know, we're kind of a week into this and we haven't heard yet what he's going to do with tariffs and things. At this point, the Fed's on hold until there's some more news.
Well, let's talk about what the FED is dealing with. As far as data, the US labor market remains strong December, job creation better than forecast on a plan, with right low wages outpacing inflation. Long term unemployment though that was a surprise at a three year high.
This week, though, right, yeah, it's not a total surprise in that what we have seen lately is companies are not hiring. They're not really firing. The total number of people who are filing initial jobless claims is still very low. It's sort of bounced around because of the holidays and seasonal adjustment factors. And now we have a little bit of input of people who've lost their jobs in the Los Angeles fires, But in general, people are not hiring, so if you do lose your job, it takes a
little bit longer now to find a job. The number of continuing claims rising up too, close to two million, but that's not telling us that the economy is in trouble at all. The labor market still feels strong. Of course, the Fed's going to be watching every jobs report very closely. And inflation has been well behaved, if not coming down.
Yeah, let's talk about inflation. So CPI in December two point nine percent year over year PCE two point eight percent, so not bad, not great, still a little far from the target. But as you say, you know, steady.
Treading water basically is kind of where we are, and the issue for the FAT is they look at PCE, which runs maybe three or four basis points below where CPI does, and so we're looking at two point four percent for PCE. End of this week, we're going to get the PCE report for the month of December, and betting is it's going to be restrained. But CPI is what Americans look at and makes it into the newspapers and things like that, and that has an effect on
inflation expectations. And we did see in the most recent University of Michigan reports that people were expecting, at least over a longer time horizon, inflation to rise. And if that's the case, then the FED is going to be keeping a close eye on that because they worry that if inflation expectations keep going up, then people are going to go back and ask their buses for raises and you get into the circular situation that they've been trying
hard to avoid for years. Doesn't look like we're really going to have that happen, but it's something to keep.
An eye on, so we kind of know what we're dealing with on inflation. We see the results of the labor market housing very uneven but still struggling. The wild cut here, as you alluded to before, is President Trump his new policies, how it affects the economy. It will affect the Fed's decisions. So let's talk about that. Last time he was in the White House, you appointed Jerome Powell to chair the FED, but when the Central Bank made some pretty difficult decisions, he did not agree with
I'm being kind here. He was unrelenting in his criticism, demanding to be consultant on rates and on policy. Is anything going to change other than you know, as you said, immigration, his raids that took place last week.
I mean, well, we're not expecting any major change in the President's attitude towards the Federal Reserve. I don't want to speak for him, because he certainly speaks enough. But he did insult Powell and the FED last time because they weren't cutting interest rates and weren't cutting interest rates as fast as he wanted, and so one can imagine that he's not going to be happy that the FED
is on hold now. I think there are enough areas in which he stuck his fingers immediately after taking the oath of office that he made not be too focused on this week's FED meeting. But if the Fed stays on hold for a while because they think some of his policies are going to be inflationary, then I would imagine we will hear from him on that.
A decision from the Federal Reserve this Wednesday about two pm Wall Street Time. Our thanks to Michael McKee, Bloomberg International Economics and Policy correspondent. We now turn to the current Q four earning season as Wall Street prepares to get its first batch of big tech results this week from Apple, Microsoft, and Meta platforms. And for more on what to expect, we're joined by man Deep Singh, Bloomberg
Intelligence senior tech industry analysts. The big question is artificial intelligence still the big driver for big tech and for each of those companies? What do you expect to see this week?
Yeah?
Look, I think four Q is typically a seasonally strong quarder for MAC seven companies, and I expect this time it will be no different. Although you know what we saw with President trump'son auguration and the project's target which
really impacts the AI spend. I mean, look, you know, once the government is behind something like this in a big way, and it's bringing in new dollars, which is the case here, you know, the one hundred billion dollars an dollars, and just to put it in context, the you know, the total capex spending in twenty twenty four from the four big hyperscalers was around two hundred and forty billion, and that was like fifty six percent growth.
So clearly, you know that momentum should be intact if we get these additional one hundred billion dollars in twenty twenty five, which I think was the aim of this discussion. So look, I mean when I look at the earnings, Meta is expected to grow earnings close to thirty percent, Alphabet also over twenty five percent, and these are you know, off a very strong comp So Microsoft's earnings growth will be somewhat slower because their depreciation expenses are going up now.
And we know Apple has been struggling, you know, with the China exposure, and their top line remains muted. So Apple is has continued to kind of struggle when it comes to really driving that top line. But again everyone is waiting for that big smartphone refers cycle with this AI wave.
Well that's coming, and well that brings us to Apple then, So Apple beaten to the punch. It looks like this year from Samsung with an ultra thin phone, they really think ultra thin is gonna boost sales right.
Well, so more than the foam factor. To me, what's really important here is the impact of tariffs and what goes on, you know, with the China exposure, because Apple supply chain is still predominantly in China, and even though they have you know, moved some of their manufacturing and
assembly to India and wait other locations. If there is you know, universal tariffs and that's the proposal right with China and Canada and Mexico, that will impact Apple and you know, anybody who gets parts or products of product
components there. So clearly that is a big risk with Apple and given its muted top line route and the other factor I would throw in there is the whole Google Chrome decision because one of the remedies that Google has proposed is there shouldn't be any contracts, you know, in terms of them being the default operating system on
iOS devices. And remember Google pays Apple over twenty billion dollars a year to be the default operating system, so all that revenue is in play here in terms of how it could impact Apple services revenue for that matter.
Well, let's talk about Microsoft. You brought that up with the stargate OpenAI. Microsoft has invested about seven hundred and fifty million into Ai. They've pulled back since then. But who else are the winners? We know, we know japan Soft Bank. Open Ai is privately held company. But who else among these big tech companies will be the beneficiary of this?
I mean to me, you know, the suppliers, the Nvidia and anybody who supplies to the data center kind of build out wins here. And that's where you know, for foundational model companies, it actually increases the pressure on a Google or a Meta or Anthropic to increase their capex because guess what, open ai has more compute available now for training their large agrid models for inferencing. So that
kind of creates an advantage for open Ai Microsoft. Microsoft has already told us they generate about ten billion in cloud revenue from AI workloads, So if they have more compute capacity through Oracle, and remember part of that open ai revenue flows through Microsoft because of the you know, the agreement they have, and so Microsoft clearly is a beneficiary. Even though this is not being built on their cloud.
It's on Oracle Cloud. So I think that's where all the other players on the LM and cloud side are somewhat excluded here. And and you know, at least the project target seems to have picked the companies that are involved, and you know they are the direct beneficiaries.
Would you consider Meta being excluded here?
Absolutely? I mean there was no mention.
No mention at all. We've heard of you know, Nvidia obviously a beneficiary, but yeah, I have not heard for a company that big and Meta.
Look, it's trying to develop its own hardware. They're doubling down when it comes to the ar glasses. The ray Bang glasses has been a success, but they really are going all in when it comes to developing their own
hardware to compete with Apple. Now we know Reality Labs will end up losing about twenty billion dollars in twenty twenty five, So whether it's going to be a creative to EPs, time will tell, but not in the near and that's I think something they have to be mindful of, given they're investing more in Capex for the GPU compute and now they are really doubling down in terms of the you know the glasses hardware.
They'd have to sell a lot of smart watches and earbuds. Coming up well our thanks to mandeep Seeing Bloomberg Intelligence senior tech industry analyst, and coming up on Bloomberg day Break weekend, we'll look at how the European Central Bank will negotiate the new world Order. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break weekend, our global look ahead at the top stories for investors in
the coming week. I'm Tom Busby in New York. Up later in our program, we'll look ahead to a key inflation measure coming out of Australia. But first, Europe's policymakers meet for the first time this year. In the coming days. They're expected to cut interest rates again as inflation stabilizes right around the two percent target.
For more.
Let's go to London and bring in Bloomberg day Break europ Banker Caroline.
Hepgar Tom EU inflation is on track to hit its two percent target in the coming months, clearing the way for cuts to borrowing costs and building on the four rate reductions we saw in twenty twenty four. But with a new occupant in the White House and threats of punitive tariffs swirling. Twenty twenty five's European Central Bank trajectory is far from decided. The Bank's president, Christina gard has made it clear that policymakers will continue along their gradual
path irrespective of US economic policy. Officials from across the hawk doves spectrum have signaled openness to further moves after January in Europe, although of course without pre committing twenty cuts. Interest rates have been a hot topic at this year's meeting of the World Economic Forum in Davos, where Bloomberg's Jumana Bissecci has been speaking to a panel of experts about their predictions for central bank policy. In twenty twenty five.
She discussed what is to come with the French Central Bank governor Fanceva veilro De Gallo, State Street CEO Ron o'hanley, the economics professor Isabella Webber from the University of Massachusetts Amherst, and Nikolai Tangan, who is the CEO of Nahas Bank Investment Management.
Some words about inflation and I will keep the European perspective, but we have been collectively including the fair successful against inflation and if I take to European figures, we were to peak of more than ten percent October twenty two. We are now two point four and we expect for this year as an average two point one. So more or less on target for the effects of the Trumps
administration is probably too early to tell. We could expect, but I said very conciously this program to be to have inflationary effects in the US future tariff's fiscal expansions,
et cetera. But to be seen on the European side, I don't think that the inflationary effect will be that significant, so I would expect this dese inflation process to go on and our victory against inflation to be final if I may, because the tensions on the labor and good market in Europe are much spooler obviously, which means if I may somewhords about short term rates and long term rates, and using the very important difference you introduced on the
short term rates, this is about monetary policy, so this is our responsibility for the ECB. We were the earliest one to cut last June. We are now the lowest one.
We are three percent, while the FARED and the Bank of England are above four percent, and I would say that for the quarters to come, probably our task is the simplest, also due to the fact that we are vigilant but confident on this inflation, as I said, and we are still quite far of the neutral rate, which is probably estimated to be around two percent so seen from today, but it will be data to even to expect our policy rate to be around two percent by
next time is a plausible scenario which could mean a decaupling. Let us be clear, between EASYB and FED, the decaupling is not an issue. Both of us are independent on both sides of the Atlantic. The question of long term interest rates, so we'll.
See next summer the news person. That means in mean summer of twenty twenty five or summer of twenty twenty six. The market is.
Story from my English ambiguity, because this summer twenty five, so one.
Hundred basis points cut by the midsummer.
We will see again. It's that a written I'm a pragmat testing, you are a journalist. I'm a central banker. But no on long term, on long term interest rates, this is a different story here. There are belovers. Obviously, there is also a very significant difference of levels. If you look at the ten year interest rates, it was yesterday about two point five in Germany and four point six in the US. But there is some kind of core movement or core rise in the last month. It's
a partial core rise. But what explained this rise in the US perhaps a technical explanation which is important. As you know, when you look at long term interest rates, you can have two explanations. You can have monetary policy expectations, so the succession of short term interest rates forwarded, and then you have the term premier. What increased in the last four months is the term premier and this reflect
increase uncertainty. It's about inflation fears, it's about two lax fiscal policy starting with the US, and it's about global uncertainty. To say it with other words, and I will conclude with that, but this is a very important point on
the direction of interest rate. There is a risk that the benefits of this inflation and monetary easing is weighted or lost by increase uncertainty, economic fragmentation and a two lax fiscal policy, or to say it in other words, an economic policy in order to be efficient, including for growth, must be consistent and this is a very important for both sides of the Atlantic.
That was Blomberg's uman and bestually hosting a panel entitled where interest Rates will Go at this year's meeting of the World Economic Forum in Davos. So how will the shift in international relations shake up the ECB's plans. I've been speaking to Bloomberg's ECB reporter Janna Randau, asking her how much of a factor Trumpomics will be in ECB policymaking going forwards.
Well, frankly, it depends entirely on how it actually affects the era's an economy. We've learned already that election campaigning isn't governing and isn't running a government. So we'll we'll see how much of the threats that he's made over the past month's you know, running for office, how much of that will actually materialize. On tariffs, we know the sentiment seems to be bad for growth unclear you know
what it will do to inflation. So there's there's a lot of uncertainty and that is surely going to stick around, which of course is never good for an economy that's already struggling, Which makes you know, the UCB stands for a data dependent meeting by meeting approach all you know, all the more reasonable.
Yes, absolutely, President Chum saying only recently that the EU could be in for tariffs given how badly as he sees it, it treats the United States. So in terms of the punitive measures, what economists think that it risks in terms of the hit to growth versus a hit to inflation.
Yeah, so so on growth, it seems pretty clear that the impact will be negative. What's more interesting is to look at inflation, just because there are different forces at play. Of course, you know, you're raised tears. They will push up prices and goods we import from the US. But the EU of course is not the only region, you know, facing facing those threats and facing tariffs. So if China, for example, becomes part of the part of the game, then we might see a redirection of Chinese exports that
were once going to the US flooding into Europe. And we of course know that China is already facing deflationary risks that that producer prices there have have declined and have been weak, so that might actually bring some deflationary pressures into the Eurozone as well. So the balance is going to be interesting. And from where I am and from where policymakers are at the moment, it's next to impossible to tell.
Yes, But traders are pricing in cuts for January and March solid of those and what is the picture beyond them?
Those meetings, Yeah, January March, from from what we've heard over the past couple of days, seem to be almost a done deal. Even hawks like a Dutch governor a class not said he's fine with with you know, those those two meetings being being on the table for for rate cuts. After that it gets a lot more interesting, just because we're expecting for services to reprice. Don't forget services prices are still running at a four percent clip,
so twice the ECB's target. We we should have more information by March about or by April about Trump's policies. We should be a bit smarter on how much of a spring revival the economy can can produce. Uh and so what we're seeing in markets, and also when you ask us some speak to some economists that April is is kind of a bit of a wild card. So the market is currently pricing three cards through June fourth.
By the end of the year and and a lot will depend on the forecast that will come out, on the information that we receive until.
Then, how well has the ECB done, how well has Europe done to get inflation, you know, back down towards the two percent target you mentioned services inflation, So on.
The headline rate, we're not doing badly. We are at two point four percent right now. It was a bit of an optic at the end of last year, but that came as expected and policymakers said, don't be you know, don't be upset about that too much. The UCB forecasts show inflation reaching target this year and then kind of hovering around it. So they are reasonably confident that the
that the target is inside. They haven't declared victory yet, and that's partly to do with those services prices, with domestic inflation, with core inflation, which is still a bit sticky.
They expect that to change over the coming months, just because, for example, if you think of insurance prices, they get you know, contracts get repriced once a year, so a lot of movement is expected there in the next weeks and probably months, But that really needs to happen, and if that doesn't happen, and that's why we talk about April.
That will be the moment when we know whether those expectations that the last bastion, if you want, of really sticky price pressures is falling, whether that is happening, and then they might have to If that doesn't, then they might have to think again.
Blueberg zion a round looking ahead to the ECB rate decision, which we expect of course on the thirtieth of January. We will have full coverage of the first rate decision of this year. Here on Bloomberg. I'm caring Hepco in London. You can catch us every week day morning for Bloomberg day Break. You up beginning at six am in London. That's one am on Wall Street.
Tom, thanks Caroline, and coming up on Bloomberg day Break Weekend, we'll look ahead to next week's read on Australian consumer prices. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. The Reserve Bank of Australia doesn't meet until next month, but a key metric on inflation is out this week and it may sway policymakers in Sydney
on how they'll proceed. For more on what to watch from next week's read on Australian consumer prices, let's get to the host of the Daybreak Asia podcast, Doug Krisner.
Tom. A number of the world central banks are in the midst of easing cycles, although recently many markets have been forced to adjust expectations on the pace of rate cuts. That's because of concern over inflation being stubborn. It's certainly true where the Fed is concerned. Interestingly, the Serve Bank of Australia has yet to pivot to cutting intrast rates. Let's explore why joining us now is James McIntyre. He is Bloomberg economist with a focus on Australia and New Zealand.
James joining us from our studios in Sydney. We're expecting the report on Australian consumer prices in the week ahead. We can talk about the various inputs into retail inflation in a moment, but James, can you begin by giving me an overview on the health of the Australian economy.
Yeah, well, thank you again for having me always great to be with you, dog. So Australia's economy, where as we look forward for twenty twenty five, we're looking for a bit of a shift from how things have gone in twenty twenty four. So the economy has been quite weak. Now you might not see that sometimes of Australia's GDP data and many Australian economic indicators, and that's because we
have this super strong population growth. So the population grew by about two point four percent, but GDP was only zero point eight so per person, the economy is going backwards. It's it's a really bad outcome or in terms of weakness for the economy, and you can see it especially around the consumer side of the story and interest rates being high for a very very long time. It's one of the longest holds that the Reserve Bank of Australia has had in the inflation targeting era over the last
thirty years or so. And what we've got there is we've got an economy that's been very weak and we're looking for it to pivot. We're pivoting from public demand, which has been a key driver of growth with the private sector being weak, to consumers stepping up this year but they're not really going to do that unless the RBA starts to play ball and begins to join the rate cup parade.
So when I think of household spending, there is a connection obviously to what's happening in the labor market. How was the Australian jobs market right now?
Well, despite the growth being so terrible, the labor market's really surprised on the upside. So we've had bumper jobs growth and the unemployment rate has gone pretty much nowhere over the course of the last twelve months. Been expecting we had the RBA had everyone has been caught on the hop by the strength of jobs growth that's been going on.
Now.
Some of the public demand part or flavor of growth in the economy or demand in the economy has been helping that. And we look at sort of market sector jobs and it's been weak. But nonetheless the labor market has just remained rock solid. And that's one of the things that if you're looking at it, you might kind of go, well, is the RBA really really going to cut with that backdrop there?
As I recall, one of the concerns on the part of the RBA in the past had been the heat in the real estate market. How is the housing market right now?
Well, it depends where you sit. If you're in the smaller capitals, people probably won't know the cities of Brisbane, Perth and Adelaide. They're probably more familiar with Sydney and Melbourne being the big Australian capital cities. Those smaller ones. Property prices still quite affordable and they've been running and running hard. But there's been a very different story. It's not even there's no middle of the Goldilocks. It's hot
and cold. It's been quite cold and cooling in Sydney and Melbourne over the last as we went into the end of the year, with buyers sitting on their hands, rate cuts hurting capacity to pay, and the very very high mortgage interest rates. In Australia, we don't have fixed rates.
They're all variable floating rates off the RBA cash rates, so it really packs a punch and it's really been punching on those property markets in the big capital cities and we've seen listings begin to rise, weak demand and that's been a recipe for softening prices in those two major capitals, which are really important for financial stability, for confidence, for spending and probably are going to be what the RBA cares about more.
I'm also curious about the knock on effect. What is happening in China. Maybe there is a modest recovery that's beginning to take hold. We may need a little bit more in the way of data before we can make that statement, but I'm trying to understand what's happened in Australia as a function of what's going on in China right now, particularly in regard to things like the mining industry.
Yeah, I think one of the key sort of takeaways or linkages or things that we need to think about when we're thinking about Australia and China is that key benjmark is the iron ore price and it hasn't really fallen away as much. And what we have seen is that US dollar strength. So not just China, but if we think about the international environment new Trump administration tariffs,
what is the global economic shakeup going to be? Well, Australia already has the type of trade position with the US that the Trump administration might like for others to see. We run a big deficit with the US. We buy far much much more than from the US than we export to the US, so we're not likely to be a tariff target. But Japan, China, these are Australia's major
export destinations. So any tariff impacts on those economies that might soften potentially already weak economic outcomes when it comes to China is going to be a key worry for US. So have we seen it in the iron ore price? Not yet. What policy makers in China and Japan do and how they respond to any global economic shakeout is really going to be one of the key important things to watch over twenty twenty five For Australia.
I mentioned a moment ago that in the week ahead we're going to be getting Australian consumer prices. When you look at the inputs that go into calculating CPI, is there any concern that something may come in a little on the hard side.
Not especially we've been seeing what we've been seeing in Australia over the CPI basket over the last little while is the impact of some cost of living support measures or subsidies from federal and state governments, and they've really especially in that third quarter data. Australia has a monthly inflation indicator, but the quarterly is the big deal. It's the main game, and that's what we've got next week.
What the RBA will be really looking at that third quarter data was very, very heavily suppressed from those subsidy impacts. There'll be a little bit of that coming through. We should also see the last of energy price declines coming through in terms of fuel prices at the pump for motorists.
So that's the fourth quarter CPI. When we look ahead, though, it's really going to be a question that the RBA's going to be having to ask itself is is a government and the federal government is facing an election of the first half of this year. Are they going to announce more subsidies in the next couple of months to
keep voters happy before they go to the polls. And will the pickup that we've seen in domestic fuel prices with a little bit of a lower Aussie dollar and some improvement in that oil price starting to feed through
to the pump. These are going to be the kind of questions that not necessarily from what the backward looking data is showing, but as we look forward, those are going to be the ones that the RBA is going to be grappling with as to whether they feel comfortab or not beginning to ease in February, or if they want to see a little bit more data and maybe see that labor market weakness finally beginning to show up and deliver those cuts in April or May.
Hey, James, thank you so much for helping us understand what's happening in the Australian economy as we look ahead to this week's report on consumer prices. James McIntyre is Bloomberg economist with a focus on Australia and New Zealand. We moved to mainland China next. Donald Trump is wrapping up his first week back at the White House and
we have seen numerous executive actions. He was expected to pursue long threatened tariffs on day one, well not so, although he has floated the idea of ten percent tariffs against China, possibly going into effect on February first. I spoke with Wa Chung, director of Asia Credit Research at Alliance Bernstein, and we explored how US China trade relations may shift and how that may play into markets. Unlike the years of the first Trump term, China is now
struggling with a or weaker a economy. I think it's fair to say, and given very weak domestic demand, the economy we have seen has become a lot more reliant on exports than it was during the first Trump trade war. Are you concerned about the negative impact that tariffs might have on the overall economy in China?
As you rarely pointed out US China religion has always been a very important watch point for US has always been a very important driver of how investors view this region. Right, view Asia, and what we're see is that you know, China's economic roles, it is indeed desalrating, but we do want to point out that, you know, we really had a policy pivot in September last year that shows that China is really aware of the slowdown and will take
more forceful measures to address the slowdown. And also when it comes to external pressures, right, I think with the new administration in the US as what we are going to have is an exhalation of tension i e. A trade war in the form of higher terrorists for the region. So the impact of US tariff will be greater on China than to you know, other Asian economies. So that is something we're going to be watching very very closely.
But you know, if you simply look at the number, right, I think China actually successfully reduced the reliance on US asport over the past over the past years, at least, you know, from one point zero.
That is very true. But if you go back to what we learned last week, GDP for all of twenty twenty four was five percent. But what was really striking about economic growth in China at the end of last year, during the fourth quarter, I think the number was five point four percent growth. So clearly many companies were concerned about how tariffs might impact their business, and they were trying to get product out of as sooner rather than later.
Do you expect economic growth to hold up now that basically that event has subsided, We think it's.
Very important to engage with the companies to understand what they are doing in order to assess the impact. First of all, you know, you know, I think given the fundamental headwinds to the China economy, to Chinese corporates, we don't want to be too pessimistic, right. I think it's important for us to have a very balanced view. As you said, you know, the economic growth, it is slowing down and you know, higher US tariff, it is the
fundamental headwinds. But a very important point we want to make, we want the audience to know is, you know, higher US tariff does not really necessarily translate into the worstening of corporate quite fundamentals, because if you look at most of the Asian corporates, most of the Chinese corporates, we look at. A very important point I want to make is that there are more even by domestic demand, right or they have very little reliance on US or supply.
What are your expectations for additional stimulus from the government in the year ahead.
That's a that's a very good question. I guess the good news we have so far is that we really had a policy pivot in September last year, right, you know, it gives a lot of comfort to investors. That shows that China is really you know, acknowledging that the economy is slowing down, so we have to do something about it.
But what we hope to see more is you know, more monetary policy a support and more physical policy support more importantly, so these are really needed to support the economy, to stabilize the economy.
Well, thank you very much for joining US that is Wat Chung, director of Asia Credit Research at Alliance Bernstein, joining us from Hong Kong. I'm Doug Christner. You can catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast. Tom.
Thanks Doug. And that does it for this edition of Bloomberg day Break Weekend. Join us again Monday morning at five am Wall Street Time for the latest on markets overseas and the news you need to start your day. I'm Tom Buzzby. Stay with us. Top stories and global business headlines are coming up right now.