Daybreak Weekend: Housing Data, German Elections, Alibaba Earnings
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Bloomberg Audio Studios. Podcasts. Radio. News. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, a look ahead to some key housing data, plus a look ahead to corporate earnings from EV maker Rivian. I'm Tom Busby in New York.

I'm Stephen Carroll in London. We're counting down to a crucial election in Europe's biggest economy, Germany. I'm Doug Krisner looking at upcoming earnings from China's Alibaba, along with upcoming eco data out of South Korea. That's all straight ahead on Bloomberg Daybreak Weekend.

On Bloomberg 1130 New York, Bloomberg 99.1 Washington, D.C., Bloomberg 92.9 Boston, DAB Digital Radio London, Sirius XM 121, and around the world on BloombergRadio.com and the Bloomberg Business App.

Good day to you. I'm Tom Busby and we begin today's program with some key housing data out this week. January housing starts on Wednesday, existing home sales for that same month on Friday. Now for more on what to expect and a look at the housing sector right now, we're joined by Drew Redding, Bloomberg Intelligence U.S. Home Building Analyst. Well, Drew, thank you so much for joining us.

Last month brought brutally cold temperatures across much of the U.S., those devastating wildfires in Los Angeles. Is there any good news, any green shoots we can look for in new home construction and existing home sales for January?

Well, thanks for having me. It's a great question. There have been a lot of different forces at play. I think the market's looking for something about down 7% for housing starts this month. And we think that that starts going to remain volatile for the next couple of months. And the reason is that the large public builders are matching production levels with demand. Given what's happened with rates, the expectations

the expectation for volume growth is just not as strong as it was a couple months ago. And when we looked at demand in January, it's actually weaker than the typical seasonal pattern you would see.

you know, we're seeing builders be a bit more cautious on a relative basis. We still think that the large public builders will see stronger growth compared to their smaller peers who continue to struggle with, you know, the availability and cost of growth capital, because you have to remember a lot of time, this group is looking to regional and local banks for financing in an environment where there's a lot more uncertainty. It's certainly tougher to get access to that. In terms of existing home sales, we think we're going to,

continue to see sales be pressured in the near term. You know, again, we've had rates back up where I think 7.15% now. Prices continue to rise across much of the country. And, you know, there's just not a lot of urgency right now.

And are these builders you're talking about also having problems or fear of problems getting enough workers? I mean, I know skilled labor is hard to get, but any workers with the threats coming out of the White House and deportations, also land, you know, available land. Are they not building spec houses? Is that sort of what you mean by, you know, you know, just building on demand? Well, that's a great question on the labor front, because, you know,

the the inability of builders to get access to the trades has been an issue for much the last cycle now over the last several quarters we've seen that improve you know part of the reason is because the last couple of years we've had the largest influx of immigration on record we've also had slowing demand so the trades have kind of been able to catch up with production but you know in terms of immigration policy it's certainly a real threat to the construction industry you know

you know of course we still don't know exactly how this is going to play out but it's not a secret that farm born workers represent a significant portion of the u.s construction industry i think that the nhb estimates that it's about 33 percent of the trades but as you would expect that varies significantly by market so if you look at some

somewhere like California, Texas, Nevada, and Florida, you're talking about closer to 50% of the workers being farm-born. And there's some estimates out there that, you know, about one in 10 are undocumented. Wow.

Wow. You know, like I said, it remains to be seen how this will play out, but we certainly think that, you know, builders could have an issue getting products built. And certainly we would expect to see costs rise in the event of some type of, you know, large-scale deportation program. Wow. A lot of uncertainty. Well, right now it's the middle of February, just ahead of the busy spring housing season. And speaking of uncertainty, you mentioned home prices at or near all-time highs, mortgage rates around 7%.

the president's agenda. Where does the whole industry stand right now, the home builders and new home construction? Well, we're still definitely dealing with the soft market. As you mentioned, affordability is near historically low levels. So we're seeing that impact at the demand side. We looked at some of the latest data from Redfin on the pending home sales side, and it's showing that from last month, we're down about 4%. We're down about 6% from last year. And on an absolute basis,

pending sales, which are kind of a more current reflection of the demand environment because their contract signings were at the lowest level on record. The data is also showing that we're starting to see more deals start to fall through, whether

that's due to qualification issues or buyers getting cold feet. You know, broadly speaking, we think, you know, on the existing home side, we're probably hovering around trough levels. The question is, when does that start to turn? You know, we think we can finish the year in positive territory, but you have to remember,

that were coming off the lowest level of volumes in multiple decades. So certainly still a challenging market. And we're seeing that in both the resale side and the new home sale side. - Yeah, and another troubling stat, you mentioned Redfin. They say more homes are now getting listed, many for the first time,

but they're staying unsold for the longest stretch in five years. Again, the unaffordability of so many of these homes and a 7% interest rate. It's like a one-two punch that's not helping at all. Yeah, I think the average time on market is getting close to two months. So the inventory dynamic has been something that has really supported the builders over the last couple of years. We've had a lack of

for sale inventory in the resale market, which funneled demand towards the builders who were then able to offer

incentives and rate buy downs to make the payments look better. But now we're in a situation where that competitive environment is really starting to change with active listings across many of the key markets now well above 2019 levels. And the ones that come to mind are in Florida and Texas. So builders are now having to face competition that they really haven't had the last couple of years. And we think that could put some pressure not only on volumes, but also on pricing.

Well, January housing starts out on Wednesday. Existing home sales for January out on Friday. Our thanks to Drew Redding, Bloomberg Intelligence, U.S. Home Building Analyst.

We move now to earnings from high-end EV maker Rivian, which reports its fourth quarter results this Thursday as it readies big plans for the future. For more on what to expect and a look at the broader EV auto sector, we're joined by Steve Mann, Bloomberg Intelligence Global Autos and Industrials Research Analyst. Steve, thank you so much for joining us. Thanks. Well, let's begin with what you expect to see in this earnings report. What?

What were sales like for Rivian? How did it do against Tesla, Lucid, GM and Ford? Well, Rivian actually had better than expected sales in the fourth quarter. So we do expect the company to actually report positive gross margin in their auto business. And that's something they've promised us.

for the last three quarters and I think they will be able to achieve that. They've done a lot of changes internally in their factories and their product to get there. And lastly,

Hell on high water, they have to hit gross profit because you remember they do have a partnership, a joint venture with Volkswagen. And for the next billion dollars that they're going to get from Volkswagen, they have to hit that gross profit target.

Now, that is a big boost. Anyone would take the billion dollars from the world's second largest automaker. But it's also facing a lot of uncertainties, or at least the EV industry in the U.S. with Donald Trump back in the White House. Yeah. Not only the tariffs, but, you know, he revoked the EV mandate of 50% cars sold by 2030, all EVs. The federal tax credit up in the air, emission standards. I mean...

Is Rivian and the whole industry really facing more challenges than ever before?

I think there's a lot of noise out there. I think there's going to be ups and downs in any market, and auto market is not immune to that. I think there's a lot of risk in terms of concerns about auto sales if the 7,500 tax credit goes away. There's also tariffs. The U.S., Mexico, Canada tariffs may...

come on online the 25 tariff and that could impact the auto industry i i i mean i think the tariffs on the supply chain won't impact rivian that much they've have been vertically integrating their process and some of the changes that made that they made in the middle of 2024 uh really uh brings a lot of production in-house um so they may not get hit that much on tariffs

But the $7,500, elimination of the $7,500 tax credit will probably temporarily subdue EV sales. It does make EVs a little bit more expensive for the consumer. But look, Rivian is going to launch a cheaper model.

later this year, and then a new and even cheaper model in 2026. That will expand their market and hopefully make their vehicles even more affordable for the average consumer. Well, speaking of expanding, Rivian is thinking big. Not only these new models, not only the partnership with Volkswagen, but

In the last remaining days of the Biden administration, it secured a $6.6 billion loan resuming work on a new assembly plant outside of Atlanta. I mean, that's big thinking. That is huge. I think it's really positive for Rivian because, you know, Rivian is...

still not positive on the bottom line. So they have negative cash flow. So to have that backstop for their new plant, it's really positive. But look, I think it'll be a mistake if Rivian decides to go ahead with the construction of that Georgia plant now. I think they're going to have to wait. They should wait. They have the R2 supply.

smaller SUV coming up cheaper and then the R3 in 2026. I think they should wait until it's gauged the customer demand for those two vehicles before they go ahead and starting building a new plan. I think

If they do spend that capex now, it's gonna be a higher cost for the automaker, at least on a per unit basis, and they don't need that right now. So it's great that they have the money, but I think it'll be, I don't think the investors will look at this positively if they decide to build the plant now. - I see. Now up until now, it's bread and butter, from what I see, has been this deal to supply delivery trucks to Amazon.

I mean, tens of thousands. I see them everywhere here in New York. Now that deal has expired. So what does that mean for Rivian? Oh, it's really positive. It's a small business for them right now. It's kind of, you know, the impact to the bottom line is immaterial, but the upside, you know, it's huge because, you know, what really makes sense for EVs is,

these short haul delivery trucks, right? And they have to, they're selling to Amazon, but we've also heard that they've been talking to AT&T and AT&T are currently testing vehicles, their service vehicles from Rivian. So it opens up a door for a bigger market for Rivian's technology.

Well, that's great. Rivian Q4 earnings out this Thursday. And our thanks to Steve Mann, Bloomberg Intelligence Global Autos and Industrials Research Analyst. Coming up on Bloomberg Daybreak Weekend to look ahead to the upcoming German elections. I'm Tom Busby and this is Bloomberg.

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This is Bloomberg Daybreak 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 look ahead to earnings from China's biggest player in e-commerce. But

But first, Germans head to the polls this week with issues like economic growth, domestic security, irregular migration all on the ballot. Now for more, let's go to London and bring in Bloomberg Daybreak Europe anchor Stephen Carroll. Tom, according to the latest polling, the conservative Friedrich Merz of the Christian Democratic Union is the frontrunner to emerge as the next leader of Germany.

Time is fast running out for the incumbent Olaf Scholz and his Social Democrat party to close the gap between them and their opponents, currently about 14 percentage points wide according to an average of recent polls. But while there may be some indication or consensus about the expected result, the

path to stability in Germany remains uncertain. The recent bad blood between the mainstream parties, which was on show during a televised debate during this campaign, has sparked concern that it might prove more difficult to negotiate a coalition agreement after the election, a process that can take several months. Now,

Navigating the uncertainty as an investor in Europe's largest economy is something that I've been discussing with Elise Badoi, who's Citigroup's Global Markets Managing Director and Head of EMEA Research, who does see a potential upside to the results if all goes to plan. German elections on balance.

There hasn't been as much focus globally on them, but obviously they are a positive catalyst. For the first time, we could hear about deregulation. We could hear about boosting spending defence, depending on the outcome and the various coalition we might get. Now, of course, there's always a risk. It's elections that we get an extreme party blocking some of that. But I think on balance, we think 75% of the potential outcomes are positive.

market friendly. So that's one thing. That was Citigroup's Elise Badoe there speaking to myself and Valerie Teitel. So what's in store for Germany over the final week of campaigning? I've been discussing this with our Germany correspondent Oliver Crook. Yeah, listen, I think what is sort of most remarkable, the most remarkable feature of this election campaign is that

basically the polls have not moved a whole lot. No matter basically what has happened since this sort of snap election was called, it seems that basically everything has kept steady. And that's really in very sharp contrast to what we saw during the last federal election in 2021, where basically the CDU had been leading by like 23 points, gave up that full lead, and then was not in the government at all. So what we're seeing now is the CDU basically holding up at about 30%. Remember, this is Angela Merkel's traditional party now headed by Friedrich Merz with the AFP's

the alternative for Deutschland, the far-right party that wants to leave the Eurozone, very hard on immigration. They're at 20%. And then the SPD, the chancellor's current party, the current chancellor's party, holding at about 15%, 16%, and the Greens right after that. I mean, what I think is very sort of interesting, though, is perhaps a different feature from this election from the others, is that all the people that you sort of speak to, many of the people that I speak to, when I ask them who they're voting for, most of them, I will have to say, will say they don't know who they're going to vote for. So basically, they're

considering are they going to vote with their conscience? Are they going to vote more tactically? This is going to be a sort of big question. And it's hard for me to say because the polling is one thing. What people will actually do on the day of the election that could cause a real sort of discrepancy to what we've generally seen in German elections where the polling has been fairly accurate. What have been the key moments of the campaign so far?

Yeah, I mean, I think that the sort of first key feature of this election campaign is just the presence of the AFD, the Alternative for Deutschland, as the sort of far right wing party, as a serious political presence. They hold, you know, basically a fifth of the vote in this election. That has not happened since basically

post-war Germany. And they are in many ways setting the tone for a lot of the debate, certainly on immigration and some other economic policies as well. I mean, I think another sort of the sort of key moments was basically the questions around whether or not Olaf Scholz would be the candidate for the SPD going into this election. He obviously was very damaged by basically

his last term that was cut short because this basically coalition couldn't get along. They couldn't figure out how to solve a lot of problems, and it eventually brought the government down, calling for an early election. And I think the sort of final point that I think has really been significant here is basically the CDU and Frederick Merz, the sort of center-right party, voting for the very first time on this immigration bill in the same direction as the AFD, the alternative for Deutschland. That has never happened, basically, in post-war Europe.

where you have a mainstream party voting with the AFD. He has said that this does not really amount to working with them. He has ruled out working in coalition with them. But for much of the political system here within Germany, it was seen as sort of breaking the far-right firewall and really sort of sundering that taboo. And for many people, that made him potentially untrustworthy and ineligible to be the candidate. Others say that he's just being practical and he's dealing with an intensely fragmented political landscape here in Germany.

This concept of the firewall is really central to the political conversations happening in Germany. And as you say, that moment with the CDU putting forward this motion, the Bundestag, that, you know, although condemning the AfD in the motion itself, did ultimately end up using some of their votes effectively.

So thinking about what happens post the election, how intact is that firewall now? Is there a chance that any of these centre parties could end up doing work with the AFD?

Listen, I don't think that there's going to be anything that they're going to be able to do in terms of formal coalitions. But again, I mean, Friedrich Merz was testing the water. At the end of the day, what he is dealing with is a real political problem within Germany, which is the fact that you basically have this massive fragmentation. You have basically, as you get closer to the election, more and more of this vote being sort of spread across several different parties who have very, very different sort of views of the world and how to deal with problems within Germany. And the reality of the situation

is they're very unwilling to compromise. This is the issue. So you have the CDU basically won't compromise on the debt break. The SPD won't cut social benefits. The Greens shut down nuclear power in the middle of an energy crisis. This is not a sort of situation in which the mainstream parties are able seemingly to get along and make some sort of sacrifices in order to get things done in Germany. And that is exactly the fact that the AFD is exploiting, saying basically the mainstream parties have failed you.

Let's think about what happens on Sunday, the 23rd of February, when we will get polling day, but also when we will get the results of this election. Talk us through what happens when the results start to come in. Polls close at 6pm local time. We'll get exit polls almost immediately on that. What happens next?

Yeah, so that's what happens. Basically, at 6 p.m., you get these exit polls. You get sort of sentiment from people being polled that walk outside of the polling station from the TV stations. That tends to give you a pretty good steer on how things will pan out. And then basically within the hour, you have a pretty good idea of what the outcome of the election is going to be. So the

main thing to look forward here to is if you actually don't get a huge sort of move in what the sort of polling for the main parties are, actually what's going to be most important are the parties that got the least number of votes. Because for every party that gets under 5% of the vote, they basically get knocked out of the Bundestag. And that basically rewrites the whole arithmetic of what

more than half of the parliament will look like. So let's say three parties get knocked out, then suddenly that's 12% of the vote that's no longer part of the party. That means that potentially you could get a coalition with two parties where previously you will have needed three. So this is going to be some of the sort of nitty gritty that we get into on the election night and really talk about and looking at basically what this next government is going to look for. But I also think that there's going to be sort of this

dawning reality that at a certain point that these mainstream parties within Germany will have to learn to compromise. Otherwise, the next election is going to be a very different one. And I think that there are some ways in which the AFD has grasped in ways that many other parties in Germany have not grasped the sort of new politics of 2025.

In that complicated negotiation that will happen after the election, Germany is used to having coalitions in government. It's also had a coalition of those two traditional centrist parties, the SPD and the CDU-CSU as well in the past. Who are the other candidates that could be in focus when we're thinking about potential coalition building? What other parties should we be watching?

Yeah, so listen, I think it's interesting that there's basically only been one absolute majority in Germany since the end of the Second World War. I mean, this is basically a nation that really is built on building coalitions. I think that the other parties that you're going to have to pay attention to are the Greens. They're the ones who are likely to come into the sort of fourth place potentially. So there could be a scenario in which the CDU actually would prefer to work

with the Greens over the SPD, though they may be slightly farther on some issues. There's a lot of bad blood right now between the SPD and the CDU. So that is going to be absolutely key. I mean, there's the FDP, the liberals who are basically natural sort of mates for the CDU and the center right. You know, they're sort of into sort of fiscal disciplines, deregulation, a little bit more progressive socially, but they're not really going to be they're going to be potentially a marginal player. They could maybe be a third party within that. But I think the big concern here, Stephen, is that basically you get

a situation in Germany where you don't have a decisive outcome and you just have general European limping in terms of political progress, economic progress at a time when the United States is really sprinting ahead and basically leaving everyone behind and saying, basically, you need to sort of walk to the beat of our drum. And really what you need are stronger European nations, particularly when you need to sort of bring the European project closer together in order to compete with the likes of Donald Trump and, of course, China.

Yeah, because of course, whoever is Chancellor in Germany will also play a key part in the decision making process that happens in Brussels as well. A word on the economy and all of this, Oliver, you know, two years of negative growth in Germany. How central has that issue been to the campaign?

Listen, I think it's basically the fundamental issue. I don't know that it's the one that's grabbing the most headlines, but again, just to put into context what we're talking about here in Germany, there's a statistic that I think bears mentioning and repeating and repeating. We are looking potentially here, particularly if we had tariffs on German industry from the Trump administration, that would almost guarantee another year of contraction in 2025. That would mean three years of consecutive contraction. That has not happened since the Berlin Wall fell in 1989.

this is a very difficult period for the German economy. And that is what's behind so much of what is going on here. And I think that it is partially also why there is so much vulnerability within the German society, why there's so much vulnerability of feeling around that. And of course, often the impulse towards that is to be very concerned with how much money you're

spending, yes, but also on immigration, partly what is driving the conversation around that. And I think that that is basically, and there's no way of ignoring that, in a nation that has been very, very wealthy for a very, very long period of time and whose economic model is now basically failing and is only going to catch increasing headwinds, the question is going to be,

in this election, do people realize, do the politicians realize the scale of what's going on? And are they willing to take very potentially deep cuts to the welfare state, potentially look at taking debt and breaking the debt break and looking to basically boost the economy in that way? And honestly, I don't know the answer to that question. It may not be bad enough quite yet for the Germans to take those steps that many think are absolutely necessary in order for Germany to stay relevant into the 20th century.

My thanks to Bloomberg's Oliver Crook speaking to us from Munich. We'll have full coverage of the upcoming German elections on Bloomberg Radio. I'm Stephen Carroll in London. You can catch us every weekday morning here for Bloomberg Daybreak Europe beginning at 6am in London and 1am on Wall Street. Tom? Thank you, Stephen. And coming up on Bloomberg Daybreak Weekend, we look ahead to earnings from an e-commerce giant. I'm Tom Busby and this is Bloomberg.

This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. Earnings out this week from China's biggest player in e-commerce, Alibaba.

Let's get to Daybreak Asia podcast host Doug Krisner for a preview. Tom, Alibaba stock has been on a tear lately. So far this year, Baba's Hong Kong listed shares are up more than 40%. So what's driving this price action? Let's find out. I'm joined by Bloomberg's Catherine Lim. She is Senior Consumer and Technology Analyst for Bloomberg Intelligence, joining us from Singapore.

Catherine, thank you so much for making time to chat with us. Let's talk first about the macro story in China, because I know that Alibaba derives so much of its business from the domestic consumer in China. What's happening right now with the Chinese consumer?

Right. You know, on the Chinese consumption side, as we step out of the Lunar New Year holidays, which likely stimulated retail sales in January because of the big festival itself, I do think that with the recent consumption stimulus that Beijing has been putting in, taking a step back, we've seen them offering

literally cash handouts, you know, shopping vouchers to the consumers ahead of the Lunar New Year holidays. We're going to need to see whether that is going to hold up after the holidays itself and how much of these perks are we still going to get from the central government through the rest of the year. But I think we should be

should be on a trajectory whereby consumption sentiment in general have stabilised. Doug, you've actually mentioned the markets in general, equity markets, they are up in general. Sentiment has recovered from the rock bottom that we've seen last year. So I would say that things should stabilise this year.

from a buying sentiment perspective so that's on the business to consumer side what is happening on the b2b side in china is alibaba doing a lot of business on that front

Oh, yes, absolutely. You know, there are B2B platform, whether it's 1688.com, as it is known, or Alibaba.com that targets more of the businesses overseas. You know, they have and continue to be the gateway for businesses into the factories within China. So, you know, the transactions are actually still ongoing.

Now, of course, with the rumblings that we have seen in the recent two weeks with regards to tariffs on made-in-China goods itself, what I would say is that this is not totally unexpected. There will be near-term disruptions to logistics, to supply chain, but there are solutions being put in place by platforms like Alibaba,

as well as businesses itself to try to mitigate and operate in this new environment. I'm so glad you brought up the idea of tariffs here because I'm also curious about Alibaba's overseas e-commerce business, particularly in the United States. What do we know about what's happening? Right. You know, they have light PDDs turmoil.

been looking to diversify outside of China into new markets, including US. And US tends to be an attractive market for most of the e-commerce players for region that it is a more homogeneous market.

And there is demand for a variety of products out there, which again, the Chinese e-commerce platforms, they do have an advantage because they are so much closer to factories and the source of these goods. So they have also been selling more into US, but also

on a less aggressive basis, if I can put it this way. Not a day goes by when we're not discussing artificial intelligence. And I know that Alibaba has a big business in terms of cloud computing. How well is that performing right now? Well, do you know what? Cloud computing, the revenue, the profitability of this business for Alibaba, it's actually been on the uptrend for the last two quarters or the first half of their fiscal year. So, you know, the company...

had expressed that they were fairly confident in driving a double-digit cloud revenue growth ahead. And I do think that the latest development, as they tied up with Apple, hopefully we get confirmation of that from the company themselves, definitely is icing on the cake for this trajectory. Again, depending on how much they are sinking into Apple,

R&D, infrastructure. I will not be surprised if we get upfront investment outlays over the next 12 months. But I do think that this will

and can potentially set a very strong foundation for their growth ahead. The issue of CapEx has been so important when we're looking at what's happening in the AI industry in the United States and whether or not we're going to see at some point a meaningful return on investment. But you mentioned Apple there working perhaps with Alibaba to roll out some AI features in China. Do we know much about what's happening? I think this story was first reported last week by The Information.

Yes, do you know what? Not at this juncture. Company has been in blackout and I'm quite sure that will be something that questions will be raised around it to the best of the ability that a company can share what they are working with Apple about. But again, taking a step back on the developments on CapEx, let's not forget that this is a company that has committed to share buybacks.

as well as they also started paying out dividends the last fiscal year. So as the CapEx demand increases on the cloud front, as well as logistics, let's not forget that. Let's see how they will

look to actually maintain this commitment to actually try and improve shareholders in the next one year. Catherine, thank you so much for helping us understand more about what's happening with Alibaba as we look to the company's earnings report in the week ahead. She is Catherine Lim, Senior Consumer and Technology Analyst for Bloomberg Intelligence, joining us from Singapore.

We go next to South Korea, where we'll get a report this week on consumer confidence. We thought it would be a good time to take a look at what's happening in the broader economy in South Korea. And for that, we'll bring in Bloomberg's Sam Kim. Sam covers the economies of South Korea and Japan from our bureau in Seoul.

Sam, it's always a pleasure. Can you give me an understanding of what's been happening with consumers, broadly speaking, in South Korea? Yeah. Consumer inflation is generally seen as stable right now in South Korea, although it did pick up a little bit last month. That's because of higher energy and food prices.

What happened was the Lunar New Year holiday, when families gather and they travel out of town, that happened in January this year, whereas last year it happened in February. So we do get a little bit of year-on-year pickup in inflation. And that's a good reason for the central bank here to kind of downplay the importance of that pickup. And we're kind of expecting that the Bank of Korea is going to

continue to move its rate down in order to ease the interest expenses for consumers. But at the same time, there are clear signs that consumers are not feeling very happy because

of the political turmoil that's been disrupting a lot of the political processes here. And there was a plane crash in December that really hurt the consumer confidence. And then, of course, we have the Trump effect. There's a lot of people who are concerned about what that person is going to do in terms of tariffs on a country like South Korea, which is very, very reliant on exports for growth.

Before we get to the tariff part of the story, I'm curious to get back to the consumer. You and I have spoken in the past about the degree to which the Bank of Korea was concerned about elevated property prices. What's the story on the real estate market in South Korea right now?

What happened last year was the Bank of Korea, which is the central bank in South Korea, basically maintained its interest rate at a higher than usual level for an extended period of time, longer than people thought they would keep it there.

and that's really helped out uh... temp down the household debt increases which are usually correlated with the howling prices so from late last year we've been seeing the apartment and housing market prices

more or less behaving, you know, staying a little bit under pressure, not going up too high. So there's a lot of concerns surrounding the housing market have calmed down so far. And that's what's allowed the Bank of Korea to shift their focus. So let's take a closer look now at the export part of the economy and the degree to which

U.S. tariffs may negatively impact that. I think it was in the last week that South Korea's top economic think tank cut the growth forecast for South Korea for the second time in four months. How much of that is due to the story on exports and the expectation that U.S. tariffs will curtail export activity?

The biggest part of South Korea's exports is semiconductors. And those semiconductors are produced by companies like Samsung Electronics and SK Honix. That semiconductor rally that South Korea enjoyed last year

is starting to cool now. From late last year, we've been seeing the expert growth numbers for semiconductors starting to go down to the single-digit levels year-on-year basis. So a lot of people are expecting, given that the chip industry has this notorious boom and bust cycle,

Korean economy is going to start to suffer because cheap exports are going to start to soften. That's at least the expectation of many economists and semiconductor watchers here. And it is particularly concerning given that the U.S. government under Trump is likely to impose tariffs

countries not just South Korea but basically all around the world and what happens because of that would be South Korea not being able to sort of export enough to not just the US but other countries that are impacted by the terrorists Sam we're looking forward to learning a little bit more about how the South Korean consumer is performing

When we look at the data on consumer confidence, that's due in the week ahead. Bloomberg's Sam Kim covers the economies of South Korea and Japan from our bureau in Seoul. And I'm Doug Krisner. You can catch us weekdays for the Bloomberg Daybreak Asia podcast. It's available wherever you get your podcast.

Tom? Thank you, Doug. And that does it for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at 5 a.m. Wall Street time for the latest on markets overseas and the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now. Feeling buried in a never-ending to-do list that comes with running a business, managing orders, tracking expenses? It's a lot.

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