Markets brace for Trump-era volatility

Key takeaways

Netflix's shift towards live sports has significantly boosted subscriber growth, demonstrating the value of diversifying content offerings.
Market optimism following Trump's inauguration suggests that investors are banking on pro-growth policies, but volatility may persist due to unpredictable rhetoric.
ByteDance's large investment in AI underscores the tech company's ambition to diversify its revenue streams, even amid regulatory pressures in the U.S.
Growing skepticism surrounding China's official economic growth figures highlights the disparity between reported statistics and the lived experiences of the populace.

Summary

Netflix's Record Subscriber Growth

In the latest earnings report, Netflix boasted the addition of 19 million new subscribers in the last quarter alone, bringing its total to over 300 million. This surge is attributed to the platform's pivot towards live sports, highlighted by a boxing match between Mike Tyson and Jake Paul that attracted considerable viewership. Following this news, Netflix's shares rose over 10% in after-hours trading, reflecting strong market confidence.

Market Response to Trump’s Inauguration

In the wake of President Donald Trump’s inauguration, US stocks showed a general optimism. Financial analyst George Steer explained that investors felt relief, interpreting Trump’s approach as a positive sign for the US economy, particularly his commitment to bring back manufacturing jobs and avoiding immediate issues with China. The initial euphoria led to a strong performance in equities, although it also sparked volatility in currencies, particularly with shifts in the Mexican peso and Canadian dollar.

ByteDance's Investment in AI

ByteDance, the parent company of TikTok, is making headlines with a massive investment plan, intending to spend over $12 billion on artificial intelligence chips in 2025. About half of this expenditure will go towards domestic suppliers, with significant portions allocated to partners like Huawei and Nvidia. This strategic move aims to enhance ByteDance's computing capabilities as they seek new revenue streams amidst regulatory challenges in the US.

Doubts Over China's Economic Growth Claims

Chinese citizens are increasingly skeptical about the reported economic growth rate of 5% for 2024, especially as everyday experiences do not align with these figures. FT's Beijing Bureau Chief Joe Lay notes that many citizens feel economic pressures, with significant reductions in lending portfolios reported by bank employees. Concerns have been raised about the accuracy of official statistics, and economists suggest the actual growth may be closer to half of the government's claims. This divergence between reported data and public sentiment poses a challenge for the Chinese government.

Show notes

Netflix added a record 19mn subscribers in the fourth quarter, fuelled by live sports. US stocks rallied while currencies swung the day after Donald Trump’s inauguration, and TikTok-owner ByteDance plans to spend $12bn on AI chips in 2025. Plus, Chinese citizens’ doubts grow over the government’s economic growth claims.

Mentioned in this podcast:

Netflix shares jump as it adds record number of subscribers

Wall Street stocks climb as investors parse Donald Trump’s executive orders

TikTok-owner ByteDance plans to spend $12bn on AI chips in 2025

Chinese citizens’ doubts grow over official economic growth claims

The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian, Lulu Smyth, and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

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