Trump's First 100 Days, Magnificent Seven Earnings in Focus
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Bloomberg Audio Studios, podcasts, radio, news. Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. There was a burst of relief in the equity market stateside on reports that President Trump would sign an executive order to ease tariffs for the auto industry. And this morning, the tone in the Asia-Pacific seems to be mildly positive, even though the

In a moment, we'll look at the market action with our friend Mary Nicola, Bloomberg Market Live strategist in Singapore. And a bit later, we'll preview tomorrow's MAG7 earnings with David Nicholson. He is the chief research officer at Futurum Group. But we begin this morning in the U.S. state of Michigan. President Trump spoke at a rally late Tuesday to mark his first 100 days in office for his second term. They're coming from India. They're coming from France. They're coming from Spain.

Yeah, they're coming from China too. Yeah, they're coming from China. They're coming from all over the world to see your president. They want to make a deal. They want to make a deal. And you know...

We'll make deals, but we don't have to. We are the ones that have the product. We are the ones at the United States. They want a piece of our product. We can just set the price. But I want to be respectful and I want to be nice. For a little bit of analysis, let's bring in Joe Matthew. He is co-host of Bloomberg's Balance of Power. Joe's on the line from Washington, D.C. Thank you so much for making time. I'm sure it's been a busy day. Can you summarize what we heard this evening from the president and try to make sense of this? Well,

Well, I'll tell you what, I don't know if I can do both of those for you, Doug, but I'll try. The White House framed this as an achievement speech. Oh,

100 days of greatness read the signs. But I have to tell you, we heard a lot about the same issues that we did on the campaign trail. This was largely a campaign style rally, as he did refer to Democrats cheating on the election, which is an allegation we cannot support. He talked about achievements at the border and he did get into inflation and prices, got into tariffs and trade, Doug, spoke about

Jay Powell and said about the Fed share, you're not supposed to criticize him, let him do his own thing. But I know much more than he does about interest rates. It sounds like an emboldened Donald Trump who really missed being on the trail. I'm going to go out on a limb here and say that underneath a lot of the words that we heard from the president, this sense that he is painfully aware, well aware of the level of disapproval on some of his economic policy. And I think center stage is obviously the story on tariffs. Is that a fair statement?

Sure, although he did address the polling. He said it's the result of bad polling by crooked people who interview more Democrats than Republicans. We, of course, see the sampling that these pollsters use, and they don't call more Democrats than Republicans and frequently even put a curve on numbers to make up for bias when it comes to political standing. So this is a White House and a president very familiar with the approval ratings. They don't always believe what they are saying.

But they do believe that in the second half of this year with trade policies in place, trade deals in place, that we could see growth that we're not enjoying right now. Doug, the jury's out on that. With the front-loading that we've been seeing and the front running ahead of tariffs, we could be well talking about a GDP contraction tomorrow morning and continued declines as we work our way through the year.

it's very interesting you mentioned the commentary around the fed chairman but very little in the way of uh... discussions about the volatility in the stock market isn't that true and something tells me that if we were at all-time highs we would be hearing about that it's an issue that the president of course obsessed over the markets in his first term and has really turned away from he said recently in washington dot almost like it was a different person that he's more concerned about main street than wall street whether or not he believes that is another question

We certainly did not hear about stocks and bonds tonight. So obviously for the Michigan economy, it's very much tied to the auto industry. And earlier in the day, the president did sign some directives aimed at easing the impact of these tariffs. Did he talk a lot about manufacturing?

Look, it was one of many issues that he brought up. He didn't dwell on anything, and he was really doing the so-called weave. He would talk about something for maybe a minute or two and go on to something else, but did speak to the auto sector. He said that the industry would be

slaughtered if he did not reshore manufacturing, which of course he's trying to do. And he was there to promote this new idea of giving relief to the big three by not stacking multiple tariffs on top of one another. He had a lot of automakers in that room, Doug, the hard hats. They love the idea of tariffs, not

the same as you would hear in the C-suites when you talk to Jim Farley or Mary Barra, as we have on Bloomberg. They are deeply concerned about what this will mean for their business. Before I let you go very quickly, Joe, does this kind of segue into the tax bill at any rate here in the near term?

Oh, big time. Doug, you're putting your finger on the real news here. We're not going to get announcements on trade deals anytime soon. What starts tomorrow, though, is the process of marking up the legislation on the committee level that will fulfill that reconciliation bill. They need to get the budget component done here, tax cuts, and then try to put them all together for a vote they say that will take place by the 4th of July.

Joe, thank you so much. It's always a pleasure. That's Joe Matthew, co-host of Bloomberg's Balance of Power. So let's get to the market action in the Asia-Pacific. Joining me now is Mary Nicola, Bloomberg Markets Live strategist. Mary, joining from our radio studio in Singapore.

I'm sure it's been a busy day for you. It certainly has been here in New York. And one of the things that I've been sifting through, a lot of the corporate results that we have been getting, many companies have withdrawn their outlooks given a lot of the uncertainty that you and I have spoken about given the impact of the trade war. Is this something that's also kind of happening across the Asia Pacific? Just there is so much uncertainty right now. It's difficult to formulate an outlook. Yeah.

Yeah, absolutely. I think right now the pressure on these companies is greater than ever, because if we look at some of the trade deals that are coming through, obviously they're going to take time. So even U.S. Treasury Secretary Scott Besant had mentioned that, you know, you could see trade deals and some agreements of understanding as soon as this week with the likes of Korea, Japan. But the reality is that these trade deals do take time.

And if we look at some of the FTA negotiations over the years, they take several years to really come through. So looking for a quick win is not something that these companies really expect. So as a result, you're going to have a lot of uncertainty. Tensions are ratcheting up between the U.S. and China, and that's not abating anytime soon. So, of course, yes, you're seeing good

earnings results, but the fact that the outlooks are just completely murky just lays a very thick cloud over a sustainable equity rally. Well, you're kind of suggesting that there are some negotiations happening, at least a conversation going on between Washington and many other countries right now. But absent is a conversation between Washington and Beijing. It was an interesting story, and I'm sure you saw it on the Bloomberg Terminal, talking about this

new nationalism that is building in China, where it seems as though people are supporting President Xi and digging in their heels and fighting back against President Trump. Yeah, absolutely. Some of the story that you're talking about, the suggestion was that if they give in, that they're going to want a little bit too much and how far could it potentially go. So as a result, China's going to hold its ground because at the end of the day,

These two are the two largest economies in the world. So obviously, they both have leverage over each other. It's not like one is in a much weaker position than the other. Let's say for a lot of smaller open economies in the region, for the likes of Korea, for example, the U.S. probably has the upper hand.

as a result of its larger market. But if you look at China, China is in just as a strong position as the U.S. So it is being a little bit stronger in its words against the U.S. And of course, it's ready to dip in its toolbox.

if necessary, to keep growth going. And you can tell how they're going about in terms of their stimulus. I think investors will get eventually frustrated if you start seeing the numbers not coming through, and then the stimulus is not happening. And I think you'll see a more cautious, weary tone, especially from foreign investors, on how far China's stocks will

rally. But at the end of the day, it's that tensions between the two nations, that's going to really weigh on sentiment. So talk to me about the Chinese markets right now as we walk up to what I think is a three-day holiday, right? It's the Labor Day holiday? Yes. So markets are closed Thursday, Friday, and then also on Monday. And what you're likely to see is just more

tepid, muted price action, largely because of the fact that there are so many headwinds along the way. So you've got your tech earnings from the U.S. coming through. You have the U.S. labor market report as well. But also all these headlines coming out, you still have headline risks. So no matter what is going on in terms of on the data front,

you always have headline risk looming. And that's sort of the new era that we're now in. So as a result, I think a lot of investors are going to be paring back, squaring their positions, not really getting ahead of themselves. And conviction out there is a little bit wary. Sure, positive headlines are great in terms of

fueling the equity rally, but it's more about a sustainable, more convincing rally that really hasn't come through and is unlikely to come through given the amount of headwinds that we have in the upcoming days. So in the next week, I know we have the Chinese inflation data, the official readings. What type of data points have you been looking at for the Chinese economy right now that may help us understand what's going on in the macro?

Yeah, so the PMIs today, I think, are absolutely critical. And we have both the, I believe we have both the official PMIs and the Kaixin PMIs. And those are really setting the stage of what, how businesses are thinking, how businesses are reacting, right?

to the trade. Because we know in Q1, we had strong numbers because there was a lot of front-loading. Now you're looking at, okay, now front-loading isn't happening. We've seen the impact of the tariffs are now coming through now that the tariffs have been imposed. And of course, we've seen container and freight traffic collapse to the United States. And that's been indicative of where things are going in terms of

between trade between the U.S. and China. So I think PMIs will be absolutely critical in terms of how sentiment is moving. But of course, CPI, in the sense of we've seen a deflation coming through in the economy, and how much worse does it get?

Mary, is it your sense that when you look at the way that the U.S. is going about negotiating these trade deals with other countries in the AIPAC, that the Trump team is really trying to create a unified front against China and box China in a little bit? And maybe that's one of the reasons why Beijing is fighting so fiercely against this type of control.

I mean, that's the headlines and that's what they're suggesting. So some of the comments from Scott Besant has been exactly that in terms of they want Asian nations to work together so that they can box in China and isolate China. But meanwhile, you've got...

China going on a charm offensive. So I think it was last week or the week before where President Xi Jinping was traveling through Southeast Asia and on the charm offensive saying that we need to work together. So they're coming out and saying that we still need to work within the rule B system and the system that everyone knows rather than taking on a very different approach. I think

Either way, it just puts these economies in a huge predicament because of the fact that for a lot of them, it's China that's the main trading partner, especially with the likes of, let's say, Malaysia in the region and other countries. So it's really hard for them to choose sides at this point. Mary, thank you so much. Enjoy the weekend if I don't talk to you beforehand. Mary Nicola there, Bloomberg Markets Live strategist, joining from Singapore here on the Daybreak Asia podcast.

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Welcome back to the Daybreak Asia podcast. I'm Doug Krisner. So we are gearing up for earnings from four of the Mag7 companies over the next 48 hours. And if you add Broadcom to the mix, you have the collective that Futurum Group calls the eight aces. Joining me now for a preview of these numbers is David Nicholson. He is chief research officer at Futurum. David, thank you for making time to chat with us.

So much of the conversation in markets these days has been around the impact of tariffs. We get that. Is it likely to show up in anything that we're going to hear from any of the MAG7 members this week? I think so. I think it's sort of baked in implicitly, though, and it's based on the unknown and the chaos that is before us. So I would say minus tariffs,

everyone would be reporting better guidance, likely better results. So I think

all of the chaos associated with tariffs is a headwind. It's just nearly impossible to figure out exactly how much that will impact each of these companies. So is it really a lack of confidence in the C-suite and very little in the way of visibility that can drive the outlook? 100%. Look, take a step back. 70% of the U.S. economy is driven by consumer spending.

The number one driver of consumer spending is consumer sentiment. And we're seeing declining consumer sentiment numbers because people don't like chaos. People don't like being concerned about losing their jobs. People don't like not knowing what things are going to cost in the future. Do you race out and buy that new iPhone today for fear that something will change? Chaos is not good. And we're essentially watching economic sausage being made

And it's a bloody affair. It's not good for anyone, not for consumers, not for the C-suite. So to what extent are we going to hear from these companies increases in CapEx spending that are really aimed at satisfying demands from the Trump administration that corporations, big corporations in particular, invest more in the American economy? I think we'll continue to see those moves. We'll hear those things. A bit of it will be for show.

There are instances where investments in data center infrastructure and the like have already been planned. But whenever you can get credit for investing in the U.S., you will. I think it's impossible to deny that we are in a global economy. There's nothing that we can do to reverse that. And really, the whole tariff question, I think, will be settled in the next three to six months, where I hope we can get to a reasonable and sane tariff.

trade policy. So we heard from Supermicro Computer after the closing bell, the company reported preliminary adjusted earnings for the latest quarter, well below expectations. And Supermicro was saying that some customers have delayed their decisions. Is this something that's going to be a part of the narrative that the customers that these companies serve that we'll hear from this week still have a customer base that's pretty fragile?

I believe that there is, I wouldn't really call it fragility. And frankly, I think that tariffs will be used as a bit of an excuse for a lot of these companies to

when the real reason is that the answer to the question, AI, ROI, WTF, question mark, just haven't gotten there yet. And I think that there is a pent up demand for show me how I can make money with AI. There's been a lot of front loaded investment

a lot of expectations that AI will deliver us from all of our prior monetary sins, as an example, and those things will come over time. But we sense a rising level of anxiety around this idea of

the value of AI needing to be proven at the street level. And I think tariffs will be used as sort of an excuse to mask that larger fear that's a subcurrent. So we also heard from Snap. Now, the company beat estimates for the revenue side in the first quarter, but in terms of the outlook, they declined to issue a sales forecast for the current period because of macroeconomic headwinds.

affecting the company's ad business. Now, for a company like Meta that we will hear from this week, also looking to the ad business as a primary revenue driver, does that same thing, could that same thing hold true? Macroeconomic uncertainty or macroeconomic headwinds?

Frankly, I think that's a fair thing to hang your hat on, to say, hey, look, it would be disingenuous to make too tight a prediction in the face of such uncertainty. However, I'm not sure. I don't think Meta can get away with it. The good news for Meta is, at least based on what we've recently seen from Alphabet, from Google ads, the impact that this has all had on ad revenues is

Has it been as bad as maybe we would have expected? So I don't think Meta can get away with the same idea of, hey, we're not going to issue guidance based on chaos. But I think actually that's a reasonable thing to assert at this stage of the game. So I want to get your reaction to news that we had today from Meta Platforms, the release of a new standalone AI app, Meta AI. This is aimed at competing with a chatbot like OpenAI's ChatGPT. Is this something that the company...

potentially has the ability to really put out in force, given the fact that Meta's tentacles seem to cover so much of the social media landscape? Do they have an inherent competitive advantage? I think they're starting from a position of strength,

I still think that Apple has the greatest inherent advantage in this space. And if the game is-- and by the way, what Meta is doing right now with their LamaCon, having a developers conference to foster unity and community in this space to create an ecosystem, to create a platform that people will gravitate to,

That's something that Microsoft is doing. It's something that AWS and Amazon are doing. It's something that Apple is doing. So the sort of clash of the titans there is it remains to be seen who will be successful. I would put Meta at middle of the pack in that race.

I would say that arguably Google slash Alphabet is a bit more well positioned with Gemini 2.5. And I think that Apple will be the quiet dark horse that will get a lot of criticism over the next year or so. But I think that they will emerge better.

looking very, very well in the future. So how do you understand regulatory risk in the current environment, the possible breakup of a company like Alphabet or even Meta, where certain assets have to be spun off? Is that something that you're considering, or do you feel as though these companies will avoid that type of outcome?

It's very, very real. It's something to be taken seriously. But that is a bit of a nuclear option. Historically, we've seen things with, if you go back to AT&T and the baby bells, and IBM attempts to go after IBM and Microsoft. It never ends well if something has to be done legislatively.

punitively. So I think that in both cases, there will be satisfactory outcomes that will include the injection of AI into this mix

to sort of take the pressure off both ads and search as monopolies. So there is volatility there that people have to consider when consider owning each of those stocks. But I think we will get through this and both companies will be stronger coming out of whatever the resolution is. David, we'll leave it there. Thank you so much for joining us. David Nicholson, he is the chief research officer at the Futurum Group, joining us here on the Daybreak Asia podcast.

Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the stories shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Krisner, and this is Bloomberg.

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