Trump-Xi talks test trade, technology and agricultural ties

Daybreak Weekend: US Housing, German Elections & President Xi's US Visit

The episode connects weak U.S. housing, Germany’s far-right surge and a high-stakes U.S.-China summit to the economic pressures shaping markets and governments.

3 key takeaways

1U.S. housing remains constrained by mortgage rates above 7%, weak activity and builder incentives that pressure margins.
2AfD gains in Saxony-Anhalt intensify pressure on Friedrich Merz as Germany confronts unresolved pension, tax and spending reforms.
3Trump and Xi could seek limited progress on trade, technology, electric vehicles and soybean purchases despite broader strategic tensions.

Don't miss

The summit preview narrows the possible Trump-Xi deliverables to concrete questions about soybeans, EVs, technology and trade truces.

The brief

Weak housing activity meets mortgage rates above 7%, leaving affordability strained and builders reliant on incentives that can erode margins. Drew Redding assesses the outlook for the rest of the year.

Consumer earnings add another pressure point: General Mills faces a turnaround, Darden contends with demand and beef costs, and Costco confronts same-day-delivery competition.

Suno shows how generative AI is lowering the barrier to making songs, opening new routes to musical stardom while challenging familiar ideas about creation.

AfD strength in Saxony-Anhalt raises the stakes for Friedrich Merz, whose coalition options and reform agenda remain constrained by pensions, taxation and social spending.

The Trump-Xi meeting could produce practical deals on trade, AI governance, EVs and agriculture, but the discussion underscores how narrow those openings may be.

What was said on this episode

20 statements · 8 positive · 10 negative · 2 neutral

Drew Reddingon U.S. existing-home marketNegative3:35
Existing-home activity is about 20% below normalized levels.
“Activity is about 20% below what a normalized level is.”
Listen at 3:35
Drew Reddingon U.S. housing demandNegative3:48
Mortgage rates above 7% have stalled housing demand.
“Mortgage rates now back above 7%, which has certainly stalled demand.”
Listen at 3:48
Drew Reddingon Builder mortgage applicationsNegative5:44
Builder mortgage applications fell about 6% sequentially and year over year.
“the applications were down about 6% sequentially and from last year.”
Listen at 5:44
Drew Reddingon U.S. new-home salesNegative6:20
New-home sales will decline mid-single digits in 2026.
“we've got sales down mid-single digits for all of 2026.”
Listen at 6:20
Drew Reddingon U.S. housing demandNegative7:08
Weakness in housing demand will persist.
“we expect to see that weakness persist.”
Listen at 7:08
Drew Reddingon Interest rateNegative7:59
Interest rates will remain higher for longer.
“we're in a higher for longer rate environment.”
Listen at 7:59
Drew Reddingon Mortgage ratesNeutral8:07
Mortgage rates will remain within their current range temporarily.
“I think we're kind of stuck in this range for the time being.”
Listen at 8:07
Stephen Engleon General Mills promotionsNegative10:24
General Mills promotions reduce gross and other margins.
“that ultimately impacts gross margins and other margins.”
Listen at 10:24
Stephen Engleon Darden Restaurants portfolioPositive11:35
Longhorn could offset a potential Olive Garden earnings miss.
“Longhorn, at least from the Wall Street perspective, looks like that could help carry. a potential miss, again, for Olive Garden”
Listen at 11:35
Stephen Engleon Costco Wholesale CorporationPositive13:52
Costco is arguably best positioned to monetize memberships and product usage.
“Costco is... arguably best positioned to make money off of people having memberships and continuing to use their products.”
Listen at 13:52
Christoph Rawaldon Alternative for GermanyPositive18:39
AfD is leading in Mecklenburg-Vorpommern and Berlin regional polling.
“the AFD has been leading in the Mecklenburg-Vorpommern region and the Berlin region where Merz's CDU governs.”
Listen at 18:39
Drew Reddingon Friedrich MerzNegative22:50
Friedrich Merz canceled his UN trip to focus on domestic political pressure.
“to focus on the domestic situation at home where the pressure has been really building.”
Listen at 22:50
Stephen Engleon U.S.-China trade trucePositive36:04
The best summit outcome would be extending the U.S.-China trade truce.
“the best case scenario would be an extension of the truce”
Listen at 36:04
Stephen Engleon China-Iran relationsNegative37:43
China will not use its influence in Tehran for the American war effort.
“That's not going to happen.”
Listen at 37:43
Stephen Engleon China AI governance discussionsPositive38:30
China wants discussions on artificial-intelligence governance.
“the Chinese want to have that discussion.”
Listen at 38:30
Stephen Engleon BYD Company LimitedPositive40:40
BYD is the world’s largest electric-vehicle maker.
“the biggest EV maker in the world”
Listen at 40:40
Stephen Engleon BYD electric vehiclesPositive40:43
BYD produces lower-cost, high-quality electric vehicles globally.
“they're the ones flooding the world with lower cost EVs, but they're not cheap EVs. These are high quality.”
Listen at 40:43
Stephen Engleon Chinese EV manufacturing in the United StatesPositive41:15
Allowing Chinese EV makers to build U.S. factories may be under consideration.
“That might be on the table.”
Listen at 41:15
Stephen Engleon AI-infused roboticsNeutral43:00
AI-infused robotics will eventually perform much manufacturing.
“eventually a large proportion of the manufacturing is going to be done by AI-infused robotics.”
Listen at 43:00
Stephen Engleon Chinese EV imports into CanadaNegative43:57
Chinese EV imports could hollow out Canada’s auto-parts industry and manufacturing.
“How much is that going to hollow out potentially their auto parts industry as well and overall manufacturing”
Listen at 43:57

Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.