Daybreak Weekend: Neflix Earnings, Hungary Election, Spain Prime Minister Visits China

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0:10This 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, we look to earnings from streaming giant Netflix and three of Wall Street's biggest banks. I'm Nathan Hager in Washington. I'm Caroline Hepker in London where we discuss the Hungarian election. I'm Doug Krizner looking at the visit to China by Spanish Prime Minister Pedro Sanchez. 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.

1:02Good day to you. I'm Nathan Hager. We begin today's program with earnings from Netflix. The streaming giant reports its latest quarterly results after the market close on Thursday. For more, we're joined by Bloomberg Intelligence Senior Media Analyst Geetha Ranganathan. Great to have you with us, Geetha. Of course, this was supposed to be the quarter when Netflix celebrated locking in its deal to buy Warner Brothers Discovery. But Paramount Skydance pulled the rug out from under that. What's that mean for what we could hear from Netflix when it comes to the results this week? Yeah, thank you so much, Nathan.

1:37This is actually good news for Netflix, right? This is back to business as usual. Netflix without Warner Brothers is a much cleaner, higher visibility business, lower volatility business. They have much better financial standing now. They have a lot more flexibility. And, you know, this is really now us just focusing on their fundamentals, both their short term as well as their long term fundamentals. as they kind of really focus on content, as they focus on engagement. And really the big numbers that investors are looking for are the revenue growth numbers as well as operating margins. So they just hiked prices in the U.S.

2:22and we're expecting to see that somehow flow through in their guidance. What they're guiding to right now for revenue growth for the entire year is 12 to 14 percent. We expect them to revise that guidance upwards and then also kind of revise their guidance for operating margin. So those are really the two most critical metrics for Netflix when they report. Yeah, I got to admit, I remember that price hike announcement coming and feeling a little bit of dread there just for myself. But are we expecting that that's going to lead to greater churn for Netflix? Is that something the company itself is concerned about?

2:57I don't think so. So what we've seen historically, this is actually its second price hike in just over a year. So last January, when they hiked prices, we didn't see any big spike in churn. You know, it's kind of been business as usual. People generally absorb these price hikes pretty nicely, pretty smoothly. We haven't really seen too much of a disruption in the past. And so we don't expect that to be the case, especially as you kind of look across the board, Nathan. So, you know, we've seen Apple TV, for instance, we've seen Disney, we've seen all of these other rival services hike their prices and hike their prices pretty dramatically.

3:37So just to provide some context, over the past four years, Netflix has definitely increased prices, but it's been about a 30 % increase over the past four years. You compare that to Disney Plus, where prices have gone up 75%, or Apple TV, where prices have gone up about 80 to 85%. So, yes, prices have gone up, but it seems to be much more digestible and definitely much more justifiable in the case of Netflix, just kind of given the depth and the breadth of their content. Well, now that Netflix isn't getting that slate of Warner Brothers IP like the DC Comics and Harry Potter and all that, where is it positioned when it comes to the content race?

4:21Was it important for Netflix to have all that Warner Brothers IP as part of its longer term strategy? It was definitely a nice to have, Nathan, but we don't think it was a must have. I mean, they have been able to build up this tremendous base of 325 million subscribers with a lot of original content, with a lot of licensed content, but without having to pay, you know,$100 billion for a studio. And so we think that they can, you know, continue to hold that dominance. And they are diversifying their content strategy. So first, it was a lot of focus on scripted content, on local language content.

4:58You know, they've played this game really well in terms of going after pieces of content in different territories, whether, you know, it's Korean series or, you know, a Japanese series or all across the world, really. But their latest foray is really into live events. So we're seeing them kind of now make a push for more NFL games. They already had Christmas Day NFL games. Looks like they're going for a slightly bigger package. And then we're seeing them do a lot of other different things in terms of live content. You know, whether you have the WWE Raw on Monday nights, whether you had the BTS, you know, first live concert in three years.

5:34We had the New York Yankees versus San Francisco Giants on MLB opening night. We have the upcoming Ronda Rousey versus Gina Carano in, you know, in May. You have Mayweather Pacquiao, you know, so there's just a whole lot of different things that they're doing. And I think that will help them with their subscriber acquisition and retention strategy. A lot of live content, but we don't have K-pop Demon Hunters. We don't have another season of Stranger Things. In terms of the scripted content, what's out there for consumers to look forward to? Yeah, that's an excellent point. So it's interesting.

6:13They had some of their biggest pieces of content in 2025, and obviously that helped. But, you know, Netflix has said over and over again that no single piece of content contributes to, you know, more than 1 % of total engagement. And if you just kind of look at engagement on the platform, you know, it's approaching almost 200 billion hours here. So really, they have a whole breadth and a great pipeline in terms of content. And as we just look out to 2026, I mean, we have some of their they still have a lot of things that, you know, we can get excited about. You know, whether it is all of that live content or, you know, you have beef season two, you have the last airbender, you have Lupin, which is a French series.

6:58And then, of course, you have Narnia coming out in December, which people are really excited about. Outer Banks Season 5, Enola Homes Season 3. So there's just a lot of different things. And again, we think that they will continue to build their business with all of these diverse pieces of content. Of course, investors are going to get some content from the company itself in the call after the close when Netflix reports on Thursday. Thank you for this, Geeta, as always. That's Geetha Ranganathan, Senior U.S. Media Analyst for Bloomberg Intelligence. Let's take a look now at some stocks making news in the week ahead.

7:35I'm Nathan Hager, joined by Bloomberg Intelligence Senior U.S. Banks Analyst Herman Chan. And it is all about the banks this week with three heavyweights kicking off earnings season on Tuesday. JPMorgan Chase, Wells Fargo and Citigroup. Herman, let's start with the big guy. What are you watching for from Jamie Dimon and company? Yeah, it's going to be a great and interesting quarter for Jamie Dimon, J.P. Morgan, and the rest of the banks. We're in an interesting setup heading into earnings with heightened geopolitical concerns, stagflation potential, private credit worries. That's all been weighing on the group.

8:13On the other hand, 1Q earnings is looking to be pretty solid with J.P. Morgan expecting 15 % growth in trading revenues and also investment banking could be up that same level as well. We're also seeing a pickup in commercial lending activity, which is helpful across the group, and some margin stability and really good performance across the credit quality as well. So macro concerns, but the underlying fundamentals still look really strong. What has you thinking those underlying fundamentals still look strong, given so much of the concern we have in the market right now around all the uncertainties and the economic impact from the war on Iran?

8:54That's right. I would characterize the economy right now as really resilient. So we're seeing that resiliency flow through into the bank's earnings and profitability. On the other hand, really what we're focused on going forward is what's going to happen next. And guidance will be key for across the banks that we cover. Are we seeing any sort of cracks in credit due to higher energy costs that consumers are facing today? Are we seeing any cracks in credit on the commercial side as well? And is the market volatility affecting some of the backlogs for areas like investment banking and IPOs? So those are questions that bank management teams will need to answer on the first quarter earnings calls.

9:44And when it comes to Wells Fargo, Herman, How are they doing now that they're not under that asset cap restriction anymore? That's right. So that's going to be one of the growth stories for the banking group in the first quarter reporting, where another quarter outside of the asset cap, we're going to see some strong balance sheet growth for Wells Fargo, continuation of what they were reporting in the fourth quarter. That's really going to be reflected in areas like trading assets within the investment bank. and also in areas like lending in the markets business, lending to these non-bank financial institutions that I alluded to earlier.

10:27So another thing that we're looking for is maybe a rebound in the capital markets results relative to its peers. I would mention in the fourth quarter, they lagged a little bit. So hoping for a rebound there in the first quarter. And when it comes to Citigroup, we had some recent reporting from Bloomberg News that they might be thinking about buying a regional bank to grow their business further. How real is that? Do you expect that to come up in the call? I do. I think analysts will probe on that. I think in the near term, probably Jane Frazier, their CEO, pauses that potential in the near term.

11:07I think that's really reflected due to the fact that their valuation is relatively weaker than peers and they're going to need to improve in order to make an M &A deal work financially. That being said, they have an investor day coming up in May, so we'll hear more about that in the first quarter reporting. And we think first quarter results really lays the groundwork for some positive news heading into the investor day. Yeah, really interesting kickoff to earnings season, particularly around what we've seen around the war with Iran, of course. Thank you for this, Herman. Great having you with us.

11:49That's Herman Chan, Senior U.S. Banks Analyst for Bloomberg Intelligence. And coming up on Bloomberg Daybreak Weekend, we'll look ahead to the election in Hungary. Is it Viktor Orban's last stand? I'm Nathan Hager, and this is Bloomberg.

12:13As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit Bloomberg.com slash podcast offer to learn more. This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Nathan Hager in Washington. Up later in the program, we'll look to Spanish Prime Minister Pedro Sanchez's upcoming visit to China. But first, voters in Hungary are headed to the polls. We find out on Sunday whether the EU's longest-serving leader, Trump ally Viktor Orban, will keep his grip on power.

12:53To much of the world, Orban is best known for his support for Russia and his opposition to the European Union and Ukraine. But what are the issues that will decide this election for Hungarian voters and what to expect from a new government? For more, let's go to London and bring in Bloomberg Daybreak Europe anchor Caroline Hepker. Nathan, for 16 years, right-wing Prime Minister Viktor Orban has been building what he calls an illiberal laboratory in the EU state. Hungary has been the European Union's black sheep, cosying up to the Kremlin and obstructing assistance to Ukraine. But now, Orban faces a serious threat from leadership contender Peter Magyar, who leads the pro-European teaser party.

13:36Some voters are losing patience with a stagnating economy, plus allegations of government corruption and Russian interference. In the last few weeks, EU leaders accused Viktor Orban of disloyalty and blackmail after Hungary moved to veto the bloc's 90 billion euro loan to Ukraine. Here's Bloomberg's Oliver Krug. We should say that this was an issue, this 90 billion euro loan that was settled back in December. And as a consequence, with Viktor Orban pulling out of this, it has upset very greatly all the other European leaders, not just on the principle of not supporting Ukraine, but on the fact that it reduces the credibility of the European Union.

14:14Bloomberg's chief Europe correspondent Oliver Crook there, who went on to say that Orban has been tough on Ukraine in order to bolster support among his own voter base. But could the focus on foreign affairs be a short-sighted strategy, with the electorate at home increasingly preoccupied by domestic concerns and the cost of living? Joining me now is Zoltan Shimon, Bloomberg's Eastern Europe editor and formerly our Budapest bureau chief and Bloomberg's Brussels bureau chief, Suzanne Lynch. Welcome to both of you. Thanks for your time. Zoltan, can I start with you just to focus in on Hungary? Firstly, I want to ask about the opposition party, Peter Magyar, emerging as a serious contender in the election.

15:00What do we make of his chances in this vote? Well, yes, Peter Magyar founded his party two years ago, and really came out of nowhere. Actually, he came out of inside Prime Minister Viktor Orban's ruling elite to essentially call out corruption and mismanagement in Hungary. And he has found that his message has resonated incredibly over the past two years, pro-government pollsters, as well as some sceptics, say, Orban, who has been in power for 16 years, still has what they tend to call the quiet majority on his side. We'll find out soon enough. Yeah, indeed. What do you think are the issues then facing Orban?

15:47You know, if you see and agree with the polls that favour the opposition leader, what would you see as Orban's main failings? Well, Magyar has really tried to focus on Orbán's domestic failings, which included the economy, which has been in bouts of recession over the past four years. The economy has barely grown. There's been a cost of living crisis. During the pandemic, inflation was the highest in the European Union. There's also rampant corruption with Transparency International now ranking Hungary in last place in the European Union for graft. The European Union has in response suspended what we estimated is about still about 20 billion euros worth of funds due to the erosion of the rule of law and graft.

16:36So that's been basically Magyar's focus, as well as sort of the effects of all this, which is seen in social services, in health care, in education, in public transportation, especially dilapidated rail network. So he's saying essentially to Hungarians, please look around you, see if you think we can do better. What has been the focus of Orban's campaign then? Orban has really campaigned more on foreign policy. Since his return to power, he has essentially held up a sort of nemesis, a rotating cast of characters, really, which he suggested posed threats to Hungary and to their lives. Going back to 2010, when he returned to power, from the International Monetary Fund, to the European Union, to multinational companies, to George Soros, the Hungarian-born U.S.

17:40financier and philanthropist in the past several years. But most recently, he's held Ukraine, interestingly, up as the biggest threat to Hungary. He's saying Ukraine wants to drag Hungary into its war with Russia. Now, obviously, Orban has allied himself quite significantly with Moscow over the past several years, doubling down on energy contracts with Russia, even since, or especially since Russia's invasion of Ukraine. Well, Hungary, of course, is a member of the European Union and a NATO member too. So let's bring in now Suzanne Lynch as Bloomberg's Brussels bureau chief for a perspective on this.

18:24I mean, Viktor Orban has been a thorn in the side of the EU for many years, it's got to be said. So what do you think is going to be the response or what do you think is the thinking within the EU about the possibility of a change in leadership in this election? We don't know yet, but what do you think the EU is thinking? Well, look, I mean, as you say there, I mean, Orban has been a presence here in Europe for such a long time. He's been 16 years in power this time. He's the longest serving EU leader around the table. and I think it's fair to say there is an argument that the European Union has chosen to a large extent over the years maybe to look away to kind of hope Orban will one day be voted out of office and that Hungary will step back into line and become a good member of the European Union.

19:13Now that policy has not really worked until now because he has managed to survive politically this long and it's an extraordinary term. Even in the last few weeks there as Alton has alluded to We've seen an even more kind of brazen attempt by Hungary to undermine Brussels. The end of March there, we saw an extraordinary phone call was leaked. Other media outlets in Hungary reported this and it alleged that Sergei Lavrov, the foreign minister, spoke to the Hungarian foreign minister asking for individuals to be removed from a proposed EU sanctions list. So, you know, we now have the situation where the Hungarian government is talking to Russia about the EU sanction list.

19:55And it has worked at various points since the start of the Russian war against Ukraine. It has worked against the EU on a number of levels. So it has again and again blocked sanctions packages. We're now at the 20th sanctions package from the EU against Russia and Hungary is blocking that. And also it's currently, for example, blocking a 90 billion loan to Ukraine. So it's quite obvious that the European Union and the European Commission in particular has become a lightning rod for Orbán. He's obviously campaigning heavily against this, against what he sees as overly, you know, an intrusive European Commission.

20:34He's obviously campaigning heavily against continued support for Ukraine. That is part of his election playbook. Yeah. In terms of then the opposition parties in Hungary seem to be, you know, thinking about Hungary's place within Europe and maybe accessing more funding. That seems to be part of their drive. How much do you think, though, if there were a change of leadership in Hungary, that that might change the level in terms of the big support package for Ukraine? Yeah, it's interesting. I mean, Mayer, who has emerged as this serious threat now to Orbán, is a member of the European Parliament.

21:10He's here. That's his full-time role, if you like. So he's already a known figure in Brussels. He was, as Alton explained, part of the Fidesz fold. He was married to Judith Varga, a former Hungarian justice minister, who, for example, was very well known here in Brussels too. So, you know, I think there is a wariness here that it might not just be as simple as a more pro-EU person taking over if his party is successful. So let's see. And I suppose it is true to say to Orbán, yes, he is using the European Union as a foil in this election. But, you know, there is some sympathy for his view, particularly when it comes to, among people in Hungary, about support for Ukraine.

21:52So it may not be as simple as that. Yeah, it's very interesting, isn't it, Zoltan, in terms of Orbán's brand of sort of populist illiberalism and Christian nationalism. I mean, there is already across Europe, this is being examined, you know, the rise of more right wing parties, maybe across different European countries. Is it really waning in terms of appeal? And what do you expect the opposition parties might do if they come into office? What kind of voice would they bring to Hungary? I mean, Tisa is a conservative party. Yes. Now, when it comes to the opposition, because of Orbán's sort of what he calls the sovereignist, very nationalist, you know, rhetoric, if Magyar were to come to power, it's not like he would switch that off from one day to the next.

22:43He very much wants to say and very much says that Hungary will remain or will be truly, he says, truly independent. He always says that Hungarians And history is not going to be written in Brussels or in Washington, nor in Moscow, he tends to say at rallies, it will be written here in Hungary. So he says he will stand up for the interests of Hungary, even if it were to go against, for example, the EU mainstream. But more broadly, though, he says he would bring back Hungary to the European fold and especially away from Russia's orbit. Yeah, I think that's very interesting, isn't it? I mean, Suzanne, is it going to be a free and fair election?

23:31There are worries, always persistent worries around Russian interference or influence in the election process in Europe. And that has become more acute since the war in Ukraine. Yes, the European Parliament actually has been a big voice on this, about issues like rule of law, about free and fair elections, and of course, about media freedom. In Hungary, there have been countless reports about the real challenges for independent media in Hungary and how that is driving the political conversation in a certain way in Hungary. But I think there will be a strong interest in this election, how it's monitored, when those results come in.

24:11Suzanne, thank you so much. That was Bloomberg's Brussels Bureau Chief Suzanne Lynch and Zoltan Shimon, Bloomberg's Eastern Europe editor. We will bring you all the latest on the story from Hungary as it develops. I'm Caroline Hepker here in London. You can catch us every weekday morning for Bloomberg Daybreak Europe beginning at 6am in London. That's 1am on Wall Street. Nathan. Thanks, Caroline. And coming up on Bloomberg Daybreak weekend, we'll look at what to expect when Spain's prime minister visits China. I'm Nathan Hager, and this is Bloomberg.

24:54This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Nathan Hager in Washington. This week, Spain's prime minister, Pedro Sanchez, heads to China. For more, we bring in Doug Krizner, host of the Daybreak Asia podcast. Thanks, Nathan. This will be Sanchez's fourth trip to China since 2023, and it follows a visit by King Philippe VI back in November. Incidentally, that was the first visit to China by a Spanish monarch in 18 years. Now, we're being told that Sanchez will travel with a group of business leaders. And to help us understand some of the dynamics, I'm joined by Bloomberg's Roz Matheson.

25:33Roz is our chief Asia correspondent, and she joins from our studios in Singapore. Thank you for being here. It seems like there is a strengthening of economic ties right now between Spain and China. It certainly has been the case in recent years. I'm wondering if you're getting the sense of this move becoming even closer right now. Well, certainly there's been a warming of the relationship between Spain and China for a while. And, you know, Sanchez, as you say, is making his fourth trip since 2023. And he's been slightly to the side of many other members of the EU in a way on China. He's repeatedly said that Europe needs to set its own terms for its relationship with China and not just follow what the US is doing.

26:21and he's been a little less willing to sort of talk about some of the frustrations that other member states have about Chinese dumping of goods in Europe, for example, or keeping control of technology in all of that. And the trade relationship has been growing between China and Spain, although it's very asymmetric because China exports a lot more to Spain than it buys from Spain. So they tend to sell cars, electronics, green energy to Spain because Spain's very big on renewables and Spain sells things like machinery. They're a big exporter of pork actually also to China. But this trip seems to be less about that trade dynamic and more about attracting investment because Spain is really keen to get more significant Chinese investments.

27:10So Sanchez is taking a business group with him, as you say. He'll be looking to get some deals on the table as part of this trip. So it's interesting that you point out that Sanchez has essentially differentiated himself among a number of European leaders who have been very strongly critical, especially when it comes to war in Iran between Iran and the US and Israel. Does that necessarily strengthen his connection with Beijing? Well, certainly he's been very vocal about his views on the war in the Middle East, and he barred American forces from using two military bases and he's put himself in the crosshairs again with Donald Trump directly.