Daybreak Weekend: US Jobs, South Africa Conference, South Korea Shareholder Meetings

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1:21And when you're a Sinesta Travel Pass member, staying at Sinesta ES and Simply Suites means earning points toward free nights, upgrades, and more with every eligible stay. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, Rome tomorrow. Join now at Sonesta.com. Terms and conditions apply. 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 March jobs data in the U.S.

2:03and what they may mean for Fed policy. I'm Nathan Hager in Washington. I'm Caroline Hepker in London, where we're looking at the drive for investment in South Africa. I'm Doug Krisner, looking at the movement to reform corporate governance in South Korea.

2:20That'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.

2:45Good day to you. I'm Nathan Hager. We begin today's program with the latest read on the labor market in the U.S. The March non-farm payrolls report comes out Friday at 8.30 a.m. Wall Street time. And here with us now is the man who's going to break those numbers as soon as they cross your Bloomberg terminal later this week. Michael McKee is with us, international economics and policy correspondent for Bloomberg Radio and Television. So great to talk with you ahead of another Jobs Friday, Mike. Of course, we saw that surprise jobs loss in the February numbers. Can you make any expectations for March?

3:21Well, you can't have a whole lot of confidence, but this is going to be released on time, and all the data will be included, and we won't have any lingering problems from the government shutdown that we can really anticipate. So I think at this point, it will get attention as a realistic view of where the labor market was in the month of March. The issue is, what does that really mean to the Fed at this point? And I go back to Jay Powell at the last Fed meeting at the news conference where he said that we don't know what's going to happen and we don't know exactly why we saw the big drop in February jobs and why we might see it reversed because we've seen a big change in the number of people who are in the labor force.

4:14and we may not need so many jobs. And so the companies may not be hiring so many people. So whether it's a sign that the economy is falling off if the numbers are low or a sign that the economy is hanging in there if they're high, we're going to have to kind of guess at that for this moment. Now, before we get a little bit more into what the numbers could mean going forward. Let's talk about what we are expecting looking back. What is the expectation among economists about what we could see in terms of that March number? Well, remember the original February number was a negative 92 ,000. So the bet is we see 150 ,000 turnaround where we get about 50 ,000 jobs during the month of March, which would fit in with the guesstimation of economists for how many we need to keep the unemployment rate steady, given the decline in the labor force.

5:12And the forecast is that the unemployment rate stays at 4.4%. So it's kind of a conservative, let's go with the median view by economists. But I don't think anybody would be surprised if we saw another decline, or if we saw a bounce back to some of the numbers we were seeing in the fall. So we could have a pretty significant range, one way or the other, sounds like. In terms of what this could mean, though, for the Fed's planning going forward. Since we do have that uncertainty that you mentioned that Chairman Powell talked about, I mean, how do we gauge what the Fed could be considering here?

5:50Well, the thing to keep in mind is that at this point, the next meeting for the Fed is at the end of April. We are going to get this jobs report at the beginning of April, and then we'll get a couple of inflation reports before we get to the April 29th Fed meeting. So this is the last big employment number. And if you're on the side of the Fed that says we're worried about the economy falling off, then if we get a bad number, it'll help make the case that maybe you want to go back to rate cuts. If we don't get a bad number, then they can focus more on inflation, which is likely to go higher in March just because of the war.

6:35And we'll see oil prices push up headline inflation, and we'll see what tariffs are still doing. So there's more of a concern on the inflation side than on the job side, but jobs will still be important because it's the last one we get before the meeting. Well, is there a concern among economists about whether the job market could be affected if the war continues for an extended period of time. Is that something that's being considered? Well, it's something that's theoretically possible. It depends on how long the war goes and what kind of costs are imposed. If you get high enough gas prices and higher inflation in other areas of the economy and people stop spending because they can't afford it or don't want to spend into inflation, then you see a decline in demand.

7:26And then you see companies don't need to have as many employees. And so they may let some people go. That's the classic recession setup. There's not really a feeling that that's going to happen now. We're talking about gasoline prices going back to levels they've been at before. So people are somewhat used to that and somewhat used to dealing with it. But depending on how long the war goes and what happens, it's certainly a possibility down the road. All right, Mike, thanks for this, as always. That's Michael McKee, international economics and policy correspondent for Bloomberg Radio and Television.

8:02Again, look out for those March jobs numbers this Friday morning at 8.30 a.m. Wall Street time. Let's take a look now at some stocks making news in the week ahead. I'm Nathan Hager joined by Bloomberg Equities reporter Alexandra Seminova getting us ready for some stocks that are going to make news on earnings starting this Tuesday with Nike. You know, Alex, that the struggle for this company has been real. Yeah, Nathan, it is going to be an important company for investors to watch. Given its role as a retail and consumer bellwether, its results will test whether its long promise turnaround is gaining traction or not.

8:39So all in all, Nike anticipates low single-digit revenue declines and a gross margin contraction year-over-year for the fiscal third quarter. And analysts are also anticipating soft global sales momentum through March. China, of course, remains the swing factor for this company. Its turnaround still runs through China, where sales have been deeply negative and remain a major drag on both revenue and earnings. So any sign of stabilization for that sector, even something that is just less bad, could shift sentiment quickly. Sales in China are estimated to be down 16 percent, with operating margin down 500 basis points.

9:19And in North America, there are early signs of improvement helping offset some of the weakness in direct to consumer and international markets. When it comes to the stock reaction that people anticipate on the earnings, options markets are implying a 7.6 percent share move post-earnings. So going to be interesting to see the market reaction to its results. And looking at some of the Wall Street analyst reactions ahead of the reports, UBS lowered its price target on the company. Deutsche Bank did as well. Okay. So it sounds like the bar is pretty low when it comes to Nike, right? I mean, if they come out and beat earnings, does that imply that we could see a pretty significant boom for Nike?

10:02It certainly does indicate that if they do surprise to the upside, if they say anything positive, then we could see a pretty strong reaction from the results, hence that nearly 8 % move that investors are pricing in. Also on Tuesday, we hear from Beyond Meat, or are they calling themselves Beyond now? Did they drop the meat from the... I can't remember. Yeah, it's hard to keep up. So they have a new overhang that we are monitoring, which is accounting and control issues. So they delayed their earnings results after identifying accounting errors and material weakness tied to inventory. That's raised questions about its internal controls.

10:42And for investors now, the focus isn't just on the fundamentals from the earnings report, but about governance and execution risk as well, depending on what they say about those issues. So the company had found errors in its previously issued financial statements for the first three quarters of 2025. Management had tried to assure investors that these aren't material errors and they're going to get them fixed pretty quickly, but investors will be keen to hear what they say during the earnings call about those accounting mishaps. And then on the fundamental side, Beyond Meat is facing shrinking sales and ongoing losses.

11:18The company expects preliminary net revenues of about$61 million for the fourth quarter of 2025. That aligns with prior guidance of between$60 million and$65 million. And the company is still expecting to post a loss, highlighting how far it remains from any sustained profitability. This comes, of course, as consumers just pull back from their product due to higher prices, competition from cheaper animal protein, and a broader shift toward less processed food. Yeah, I mean, it's got to be tough just from the fact that traditional meats have gotten more expensive these days as well. So, So definitely keeping an eye on that stock as well.

11:58And then on Thursday, we get results from RH. I think a lot of us might remember this one better as Restoration Hardware. But this could be really interesting to hear from a furniture maker in this environment. It certainly will be because this company was kind of at the center of some of the tariff volatility last year. So RH is expected to experience sales gains extending into 2026. a positive there given its unique position with high-end consumers and a small share of the home furnishings market. And sales growth is projected to slow a bit to a six-quarter low in the fiscal fourth quarter, following a slight softening in 2025.

12:39RH is moving forward with its hospitality and international expansion strategies, so investors will be keen to hear what updates they have on that. Those, of course, could lead to stronger market share, but they also involve execution risk. And concerns still remain about the impact from tariffs and any ongoing investment spending. You might remember that the company had trimmed its full year outlook before, citing pressures from tariffs. And famously, last April, its CEO drew attention during the company's earnings call after blurting out a curse word, watching their stock decline as tariffs were implemented.

13:18So that's an interesting one to remember, and it's going to be really important to hear what they say about tariffs. Yeah, a lot of potential headwinds still for all of these companies. It sounds like the bar is pretty high all around. Yeah, I mean, the earnings reports will be a make or break moment for equity investors. given all the updates we're expected to get on the impact of oil prices on their businesses and on the continued unwind of tariffs. OK, Alex, thanks for this, as always. That's Alexandra Seminova, equities reporter for Bloomberg News. And coming up on Bloomberg Daybreak Weekend, we'll look ahead to the sixth South Africa Investment Conference.

14:00I'm Nathan Hager, and this is Bloomberg.

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16:06Thousands of businesses have made the switch, so why not you? Try Odoo for free at odoo.com. That's O-D-O-O dot com. 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 shareholder meetings in South Korea. But first, in the coming days, the South African government will intensify its efforts to attract two million rand in new investment commitments over the next five years. The upcoming South Africa Investment Conference, due to take place in Johannesburg, will be an attempt to build on the success of the country's previous five-year investment cycle, which surpassed its fundraising goal.

16:47But will geopolitical tensions and uncertain trade relationships threaten new commitments? For more, let's go to London and bring in Bloomberg Daybreak Europe anchor Caroline Hepker. Nathan, amongst the aims of the sixth South Africa Investment Conference is a desire to translate momentum into capital deployment, strategic partnerships and measurable economic outcomes. The country has some momentum now, expanding at the fastest pace in three years in 2025, helped by stronger output in agriculture, in terms of trade and in finance industries. GDP grew by 1.1%, according to a report earlier this month.

17:282025's figures represent the fastest pace of expansion since 2022. But the gains come after a period of stalling. South Africa's economy has underperformed for more than a decade, growing by an average of less than 1 % annually because of electricity shortages and logistics snarl ups that have curbed mining and manufacturing production and also deterred investment. Now, a prolonged war in Iran and sustained higher oil prices threaten progress once again. Speaking to Bloomberg earlier this month, South African Finance Minister Enoch Gorongwana described the situation as worrying. As I've indicated, oil prices, if they begin to go up, South Africa is a price taker.

18:17And that will have implications, inflationary impact for us. So the war is worrying. What are the potential implications for the debt profile of South Africa, which has been rising? And then, of course, you and your government have pledged to stabilise debt levels. Can you continue to commit to that in this environment? I think we will continue to commit to a destabilisation process. Of course, we'll have to take into account what the nature of the shocks. At the moment, we have not been able to model the shocks. but we'll have as time goes on we hope that is going to be four weeks as president trump has said if it is four weeks then that's it's going to be fine but it goes beyond four weeks we'll still have to have to pencil down the the implication that was south africa's finance minister inok gorongwana speaking to blueberg's tom mckenzie anna edwards and lizzie burden so So will South Africa make good on its growth projections or could geopolitical tensions derail plans?

19:22So joining me now, Bloomberg's Chief for Africa correspondent, Jennifer Zabasadja, and Africa economist, Yvonne Mango. Thank you so much for being with me. Jennifer, can I start with you? Do we expect to see any important names or businesses at this conference in the next few days? Yeah, thanks so much for having me. Look, this is a very important conference for the South African government. It's the sixth South African investment conference that we've seen. And if you speak to the government, they really do champion this event as one for the investors in the business community and also civil society and public to come together and talk about some of the nation's progress and what it will take to see some more progress.

20:07Potentially that comes through capital or other forms of reform. And so we always tend to see the president there. So President Cyril Ramaphosa, the deputy finance minister, is supposed to be there, as well as the minister of trade, of course, Parks Tao, which will be it'll be very interesting to hear from him, especially considering a lot of the back and forth that we've been hearing about trade and tariffs in South Africa's position. position. When it comes to the business community, our expectation is that potentially we will see the CEO of Anglo-American there as well as the CEO of Vodacom.

20:46So very different sectors there, but just illustrating just how varied potentially the attendees are and really a lot of what potentially will go into some of the progress and the growth of the economy that South Africa needs to see and investors want to see. Yeah, absolutely. There has been lots of fanfare, hasn't there, ahead of this event. Yvonne, recent projections for South Africa are encouraging, despite a long period of lackluster growth. What has the country done to turn its economic story around? What's it going to be telling people? Yes. So I think the growth number that came out for 2025 is symbolic of the reforms we've been seeing.

21:31We saw growth double its pace to 1.1 % last year from 0.5 % in the previous year. And that's a reflection of reforms that we've seen in the power sector that have resulted in the return of more reliable power. Also in the logistics sector, that's also helped ease trade on that front. So those have manifested in a pickup in demand. We're seeing household consumption pickup. that's also on the back of lower inflation and easing of rates that's helped credit-driven demand pick up and I think most encouraging is that we've seen a return of growth in gross fixed capital formation particularly in the second half of 2025 suggesting that we are seeing a recovery on that front as well.

22:20So Yvonne just compare this how does the growth in South Africa compare to its regional peers? That's a good question. So I've just mentioned that growth doubled its pace in South Africa, but it still falls far short of what we're seeing in the region. Sub-Saharan Africa is expected to grow at around 4 % this year. So this gives you a good idea of the sort of growth rates we're seeing on the continent. The fastest growing countries, particularly in Eastern Africa, where we're seeing growth in the mid to high single digits. Also in West Africa, we have countries such as Cote d 'Ivoire and Senegal also growing pretty rapidly.

22:59So compared to its peers, yes, South Africa's growth is rather weak. But when we compare ourselves here to where we're coming from, it is a recovery. Jennifer, tell us about the political situation in South Africa then and how that is affecting and influencing economic policy then as South Africa tries to boost growth. Yeah, I think, you know, South Africa has been balancing quite a bit of different developments, I think, when it pertains to some of the bilateral relationships that it has. And also when you look at just what's going on ongoing in the Middle East with the war in Iran and the potential stance of the BRICS nations, which, of course, South Africa makes up part of that.

23:47And the challenge that the bloc has had in at least coming to some sort of consensus on the stance of where they position themselves at this point. And just to Yvonne's point about some of the growth that we had seen over the past few years, it really is a priority for this government to actually show not just South Africans, but also the investment community that they really can accelerate some of the promises that they are making. And so time and time again, we hear the government trying to at least put forward this rhetoric that illustrates that they are non-aligned when it comes to some of the conflicts and the politics of today.

24:26But, you know, that behind the scenes, I think, is a bit more complex, as some of our Bloomberg reporters have been able to uncover in the past few days and weeks. Yeah, indeed. So that's on the view of the Iran war, geopolitics that's happening from the South African perspective. But this, of course, is layered with this period of strained relations with the United States. And that's also hugely important to consider, isn't it? What's been happening recently on that front? Yeah, we've seen relations between South Africa and the U.S. really deteriorate sharply since President Trump came back into the White House last year.

25:06We saw the U.S. president falsely accusing South Africa of what he believes was subjecting white farmers to a genocide, also seizing their land. We should note that there have been many findings and reports that actually deny that claim. We also had seen concerns about what South Africa had said about their own stances on relations with Iran and Hamas. And Trump has also rejected the black economic empowerment policies of South Africa. And so I think it has been a relationship quite tense over over the past year. And it doesn't seem like this is a relationship that is going to be repaired anytime soon.

25:49But it's one that South Africa definitely needs to repair, especially if you think about its trading relationship with the US. Yeah. OK. Interesting points, Jen. Thanks. Yvonne, in terms of then the need to try to drum up investment, external investment, what is being sought at this investment conference? How important will it be to South Africa's economic trajectory as it tries to also build trade and just, you know, revive the economy? What do they want to see from investors, do you think? So investment is important, particularly for countries that run current account deficits like we do in South Africa.

26:30It implies that you don't have sufficient domestic savings to invest as much as you'd like in your economy. So in order to attract investment, what governments typically do is try to improve the regulatory environment and just make it attractive and conducive for investors to come into the country. So that's the sort of position South Africa is in. They're seeking investment probably in the logistics sector and telecommunication sector, and particularly in sectors that can absorb labour. But as you know, South Africa has a particularly high unemployment rate. One third of its labor force is without a job.