WEBVTT - Bloomberg Surveillance TV: August 7th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.400 with Lisa Bromwitz and am Marie Hordern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.400 are live on Bloomberg Television weekday mornings from six to 0:00:27.480 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:35.840 Bloomberg Terminal and the Bloomberg Business app. 0:00:36.440 --> 0:00:40.760 Hey Moore of City has been cautioning people recently, writing this, 0:00:41.159 --> 0:00:44.400 we view a nearly newly announced tariffs as a headwind 0:00:44.400 --> 0:00:47.480 to further equity upside. We are moving to a new 0:00:47.520 --> 0:00:51.279 phase of policy and trade uncertainty. Kate joins us. Now, Kate, 0:00:51.320 --> 0:00:54.120 thank you so much for being with us. You've been cautious. 0:00:54.280 --> 0:00:57.360 You've been cautious for a while. You're still cautious. What 0:00:57.440 --> 0:00:59.360 makes you hold onto this position even though a lot 0:00:59.360 --> 0:01:01.120 of people have been It's a pain trade. 0:01:01.280 --> 0:01:03.440 Yeah, so, I mean we need to separate this out. 0:01:03.520 --> 0:01:06.479 I have been cautious, concerned with some of the policy 0:01:06.760 --> 0:01:09.920 headwinds with some of the challenges that individuals have in 0:01:10.000 --> 0:01:12.720 terms of making spending decisions. That doesn't mean we've been 0:01:12.880 --> 0:01:15.959 underweight equities. These two things are not the same. We 0:01:16.000 --> 0:01:18.720 have been neutral weight equities, but we prefer to express 0:01:18.720 --> 0:01:21.240 our view, you know, up in quality like a lot 0:01:21.280 --> 0:01:23.319 of people, and more concentrated in the kind of the 0:01:23.360 --> 0:01:27.280 megacaps and the secular growers. So if I felt really, 0:01:27.520 --> 0:01:29.440 really like we were going to be in an accelerating 0:01:29.440 --> 0:01:32.040 growth phase, I'd be rotating more into the small caps 0:01:32.080 --> 0:01:34.520 as something more than a trade and into like a 0:01:34.600 --> 0:01:36.560 kind of an investment. But that's not it. So my 0:01:36.600 --> 0:01:39.080 caution expresses itself in more of a neutral weighting and 0:01:39.120 --> 0:01:42.440 a bias towards high quality and a bias towards large caps. 0:01:42.480 --> 0:01:45.280 Although there is this issue of valuation at a time 0:01:45.319 --> 0:01:47.840 when everybody's hotalating out in this So at what point 0:01:47.880 --> 0:01:50.320 does that become a concern for you, given the fact 0:01:50.360 --> 0:01:52.920 that everyone's hiding out in these megacaps and big tech 0:01:52.960 --> 0:01:55.320 has been the story yet again of the year. 0:01:55.600 --> 0:01:57.040 You know, Lisa, I would be a little bit more 0:01:57.320 --> 0:02:00.480 concerned if the companies didn't put up good numbers in 0:02:00.520 --> 0:02:03.760 the second quarter, right you know, multiples can stay high 0:02:03.800 --> 0:02:06.240 for extended periods of time, they can send stay cheap 0:02:06.240 --> 0:02:08.520 for extended periods of time. And we're in an era 0:02:08.600 --> 0:02:11.839 where a lot of information gets priced into shares very 0:02:11.960 --> 0:02:15.640 very quickly. So you know, there's this mispricing that maybe 0:02:15.639 --> 0:02:17.600 some of us grew up with in earlier stages of 0:02:17.639 --> 0:02:21.440 our careers is less likely to persist. And things are 0:02:21.480 --> 0:02:25.000 expensive because they have secular earnings, because they have an 0:02:25.000 --> 0:02:27.120 ability to grow through all parts of the economic cycle, 0:02:27.320 --> 0:02:29.760 because they're in the fastest rivers. You know, this is 0:02:30.080 --> 0:02:33.840 I think justified for some of these megacaps. Even if 0:02:33.960 --> 0:02:35.880 I look at some of these numbers and like many 0:02:35.919 --> 0:02:37.799 people feel a little uncomfortable. 0:02:38.200 --> 0:02:39.799 Everyone on the street is talking about how they want 0:02:39.800 --> 0:02:42.280 to be a buyer of the pullback. Well, oh yeah, 0:02:42.320 --> 0:02:43.120 when's the pullback? 0:02:44.120 --> 0:02:46.480 A fullback? Can we get in that environment? You know, 0:02:46.520 --> 0:02:48.840 I think that's right. You know, we've looked at you know, 0:02:48.880 --> 0:02:53.280 seasonality like everyone else and said August and September weeker times, 0:02:53.480 --> 0:02:56.000 we tend to get some of these air pockets. You know, 0:02:56.120 --> 0:02:58.320 I have perhaps a little bit more cautious stance on 0:02:58.360 --> 0:03:00.400 some of the tariffs that hit today, and this is 0:03:00.400 --> 0:03:02.800 what I would say. Everyone's saying, if we get a 0:03:02.840 --> 0:03:05.480 five percent pullback or seven percent pullback, you know, they 0:03:05.560 --> 0:03:08.080 go all in, they back up the truck. The problem 0:03:08.160 --> 0:03:10.360 is is that no one's going to wait for those levels. 0:03:10.600 --> 0:03:12.640 I think these pullbacks are going to be quite shallow, 0:03:12.880 --> 0:03:15.480 even if we get a decent amount of volatility through 0:03:15.480 --> 0:03:17.960 what is normally a seasonally weaker period. 0:03:18.200 --> 0:03:21.240 They uncertainty around tariffs. On the other side of the coin, 0:03:21.320 --> 0:03:23.760 you are looking at potentially the incentives for the one big, 0:03:23.800 --> 0:03:27.520 beautiful bill you're starting to see that now actually take effect. 0:03:28.080 --> 0:03:30.280 I don't think corporates really know how to guide us 0:03:30.320 --> 0:03:32.399 on this one. So I hear a lot of people say, hey, 0:03:32.480 --> 0:03:34.920 we're only talking about a fifteen percent give or take 0:03:35.040 --> 0:03:37.680 like effective terriff, Right, it's not that much. Of course, 0:03:37.840 --> 0:03:39.680 we all know how much it is relative to where 0:03:39.720 --> 0:03:42.680 we ended twenty twenty four. But the bigger question I 0:03:42.720 --> 0:03:44.840 have is when people make these assumptions about it not 0:03:44.920 --> 0:03:47.880 having a large impact, how are they splitting the cost 0:03:48.000 --> 0:03:52.840 between the suppliers, the company, and the end consumer. And 0:03:53.000 --> 0:03:55.600 everyone has a lot of assumptions baked into why it 0:03:55.640 --> 0:04:00.600 won't be a big deal for XYZ company, companies don't 0:04:00.600 --> 0:04:02.040 know what to say, They don't know how much they're 0:04:02.040 --> 0:04:03.120 going to be able to push. 0:04:03.440 --> 0:04:04.200 I think a lot of. 0:04:04.160 --> 0:04:07.040 What's happened since the April second tarif announcements has been 0:04:07.080 --> 0:04:09.440 companies have been eating some of this in their margins, 0:04:09.680 --> 0:04:11.800 or they've been spreading out costs across a variety of 0:04:11.800 --> 0:04:15.000 different products, or they've been holding off an investment, you know, 0:04:15.040 --> 0:04:17.039 trying to fund as much of it as possible. But 0:04:17.080 --> 0:04:19.000 as some of these things get baked in for longer 0:04:19.040 --> 0:04:22.320 periods of time, there's going to be more durable impact 0:04:22.400 --> 0:04:25.640 on both margins and on the consumer. And frankly, I 0:04:25.680 --> 0:04:27.560 don't know either exactly what that looks like. 0:04:27.640 --> 0:04:28.800 Do you think it's going to be worse in the 0:04:28.920 --> 0:04:30.520 US than the rest of the world. 0:04:30.760 --> 0:04:32.920 I think it's going to be worse. I think it's 0:04:32.960 --> 0:04:35.120 going to be bad in a number of places. I 0:04:35.200 --> 0:04:37.640 will say that US companies and consumers are going to 0:04:37.640 --> 0:04:39.360 feel the pain. I think we're at the very beginning 0:04:39.360 --> 0:04:41.520 stages of seeing some of the teriff impacts on good 0:04:41.520 --> 0:04:44.799 price goods prices. Whether or not that changes the consumption, 0:04:45.880 --> 0:04:49.039 you know, our appetite for like the average household, I'm 0:04:49.040 --> 0:04:52.320 not sure or whether we see, as we've heard from 0:04:52.320 --> 0:04:55.200 some of the retailers, spreading out tariff costs across a 0:04:55.240 --> 0:04:58.000 variety of products that otherwise would not be directly hit 0:04:58.680 --> 0:05:00.320 in order to make sure that people still I'll come 0:05:00.320 --> 0:05:02.200 into the store and that we don't see a significant 0:05:02.240 --> 0:05:03.400 decline in retail sales. 0:05:03.520 --> 0:05:05.840 Well, I guess I'm wondering how much of the dollar 0:05:05.880 --> 0:05:09.240 weakening story is really pegged to this ongoing belief that 0:05:09.279 --> 0:05:11.479 the United States is going to suffer the brun of 0:05:11.520 --> 0:05:14.159 any kind of economic slowdown on the keels of tariffs. 0:05:14.520 --> 0:05:17.800 That's been challenged certainly with some earnings, certainly with some 0:05:17.839 --> 0:05:19.919 of the rates that we've seen, as well as the 0:05:19.920 --> 0:05:22.680 commentary out of central banks. I mean, how much do 0:05:22.720 --> 0:05:25.600 you lean into that versus pushback against it and say, 0:05:25.600 --> 0:05:27.520 hold on a second, when you actually look at the 0:05:27.520 --> 0:05:30.200 corporate earnings, so still have performing in the US totally 0:05:30.240 --> 0:05:31.200 in a significant way. 0:05:31.480 --> 0:05:34.280 Yeah, I mean, I guess you know, the conversation we 0:05:34.279 --> 0:05:36.120 were having in the beginning part of this year about 0:05:36.160 --> 0:05:39.719 the end of US exceptionalism was really like, it is 0:05:39.760 --> 0:05:41.560 really not going to play itself out in the equity 0:05:41.560 --> 0:05:44.000 market in my view, you know, if we get fewer 0:05:44.040 --> 0:05:47.280 buyers or fewer marginal buyers of you know, long duration 0:05:47.360 --> 0:05:51.320 in US bonds or people thinking about their currency exposures. 0:05:51.480 --> 0:05:54.000 That's one thing, but we still have to invest, if 0:05:54.040 --> 0:05:56.880 you're at a global multi asse investor and equity investor, 0:05:57.040 --> 0:05:59.159 in the highest quality companies that are serving all parts 0:05:59.160 --> 0:06:01.360 of the world. And unfortunately, for those people that didn't 0:06:01.360 --> 0:06:03.440 want to own the US much of those, many of 0:06:03.480 --> 0:06:04.520 those are US companies. 0:06:04.560 --> 0:06:06.280 If you think we're in the start of potential to 0:06:06.360 --> 0:06:08.600 impact of the tariffs on inflation, what does the FED do? 0:06:09.320 --> 0:06:11.640 Gosh, I am so glad I'm not a FED policymaker. 0:06:11.760 --> 0:06:13.280 This is an incredibly difficult time. 0:06:13.360 --> 0:06:15.840 What are you baking in kind of impact corporate America. 0:06:15.920 --> 0:06:18.760 I think it's very likely that we will see some easing, 0:06:19.080 --> 0:06:20.679 but I think the FED is in a really difficult 0:06:20.720 --> 0:06:23.360 place here. You know, if they cut while the labor 0:06:23.400 --> 0:06:26.359 market is frozen but not deteriorating, right, I think we 0:06:26.400 --> 0:06:30.719 need to distinguish and inflation is continuing to percolate. You know, 0:06:30.960 --> 0:06:33.240 people are going to ask themselves, like, you know, if 0:06:33.240 --> 0:06:36.160 the FED is really anchored to this two percent target 0:06:36.200 --> 0:06:38.840 or getting to that two percent target, and we've been 0:06:38.880 --> 0:06:41.120 above that two percent target for four years, and the 0:06:41.200 --> 0:06:45.640 labor market is frozen but not deteriorating. You know, can 0:06:45.680 --> 0:06:48.560 we believe that you think in the frozen now or deterion. Well, 0:06:48.560 --> 0:06:51.240 we haven't seen huge layoffs at this point, right you know, 0:06:51.440 --> 0:06:55.000 job recks not failled for sure, and we certainly see 0:06:55.000 --> 0:06:57.719 a lot of companies talk about slowing down their hiring. 0:06:57.800 --> 0:07:00.839 But from my perspective, I can't desactgate how much of 0:07:00.839 --> 0:07:03.680 that is because of tariffs and economic uncertainty, and how 0:07:03.760 --> 0:07:06.080 much of it is because the technology they're investing in 0:07:06.480 --> 0:07:09.920 may displace workers. I mean, these things are all happening concurrently. 0:07:10.360 --> 0:07:12.520 Right now. You see a market pricing in fifty basis 0:07:12.520 --> 0:07:14.640 points of rate cuts. Yeah, if the FED were to 0:07:14.720 --> 0:07:18.000 cut more this year, does that make you more bearish 0:07:18.200 --> 0:07:19.440 on longer term treasures? 0:07:20.320 --> 0:07:23.080 It makes me cautious, I think on longer term treasuries, 0:07:23.240 --> 0:07:25.160 you know, we have had a more cautious stance. I 0:07:25.160 --> 0:07:27.040 think it's very consensus for a lot of us in 0:07:27.040 --> 0:07:29.600 the multi asset space to have been really anchored to 0:07:29.640 --> 0:07:33.920 the short duration and we're all waiting for an opportunity 0:07:33.960 --> 0:07:37.640 to add to duration. I just I'm just not excited 0:07:37.680 --> 0:07:38.680 about it. In the near term. 0:07:38.960 --> 0:07:40.640 Kate Moore, thank you so much for being with us. 0:07:40.800 --> 0:07:53.000 As always, Kate, more of City. Well, I'm joining us 0:07:53.040 --> 0:07:57.080 now as former NYC deputy director, Everett Eisenstadt. Everett, thank 0:07:57.120 --> 0:07:58.960 you so much for being with us. I want to 0:07:59.000 --> 0:08:01.960 just start with what we know today in terms of 0:08:01.960 --> 0:08:04.680 the tariffs that have gone on, the details of that 0:08:05.000 --> 0:08:07.520 and what's to come over the next three weeks. 0:08:08.440 --> 0:08:10.360 Well, this is a really big day. You know. The 0:08:10.400 --> 0:08:13.520 President has been signaling these tariffs on the way for 0:08:14.360 --> 0:08:17.240 well since he was elected on January twentieth, with his 0:08:17.280 --> 0:08:21.600 America First Trade agenda, and he's put different measures to 0:08:21.680 --> 0:08:25.200 kind of tease out the rates in different methodologies, using 0:08:25.240 --> 0:08:27.760 different statutes, and now we've come to the place where 0:08:28.240 --> 0:08:30.080 today they're actually going to go into effect, and we 0:08:30.160 --> 0:08:31.800 know what the teriff rates are going to be on 0:08:31.840 --> 0:08:34.760 the reciprocal tariffs for particular countries. You have some of 0:08:34.800 --> 0:08:37.440 them up there, as you know do They range from 0:08:37.440 --> 0:08:42.480 fifteen to fifty percent and for different purposes. We also 0:08:42.520 --> 0:08:45.320 have a number of the sectoral tariffs in place, in 0:08:45.320 --> 0:08:48.480 addition to investment commitments from some of our trading partners, 0:08:49.040 --> 0:08:51.640 so there's a lot of the President's trade agenda that 0:08:51.720 --> 0:08:55.520 is now in place, including the Framework Agreements. Now, the 0:08:55.559 --> 0:08:59.440 Framework Agreements are going to be a guidepost really about 0:08:59.520 --> 0:09:02.240 how to move forward with these economies. They're not perfect, 0:09:02.280 --> 0:09:07.600 they need continued negotiation, but they do demonstrate directionality. So 0:09:07.640 --> 0:09:09.480 I think we've got a bit more clarity than we 0:09:09.520 --> 0:09:12.240 did a few months ago, and we really now see 0:09:12.440 --> 0:09:15.880 what the President's agenda is going to look like in operation. 0:09:16.440 --> 0:09:18.400 When it comes to the President's agenda, though, there's two 0:09:18.440 --> 0:09:21.320 countries that it does seem like they're still a negotiating mode, 0:09:21.480 --> 0:09:23.440 India and Switzerland. Do you think we're going to see 0:09:23.440 --> 0:09:24.360 those rates come down? 0:09:25.280 --> 0:09:28.280 I do certainly with Switzerland. I look at the US 0:09:28.320 --> 0:09:32.280 Swiss relationship and it is so interconnected and we're such 0:09:32.440 --> 0:09:35.120 important allies. I think the Swiss were a bit shocked, 0:09:35.360 --> 0:09:38.240 candidly at the rate. I don't know if that was 0:09:38.280 --> 0:09:40.960 just a botch negotiation or how they ended up in 0:09:41.280 --> 0:09:45.040 one of the highest rates in the world. Of course, 0:09:45.080 --> 0:09:46.520 a lot of it has to do with the trade 0:09:46.559 --> 0:09:49.560 deficit and how the President sees that trade deficit. But 0:09:49.640 --> 0:09:53.480 there's a lot that we share with with Switzerland, particularly 0:09:53.559 --> 0:09:56.440 on intelligence and things of that nature. So I think 0:09:56.480 --> 0:10:00.000 that one it will come to settlement at some point. 0:10:00.559 --> 0:10:04.320 In fact, they were in Washington yesterday seeking to find 0:10:04.360 --> 0:10:08.040 a framework deal. India's a much much more complicated equation 0:10:08.200 --> 0:10:10.760 that one was noted was started out with such a 0:10:10.760 --> 0:10:15.400 great dynamic between President Modi and President Trump. It really 0:10:15.440 --> 0:10:20.720 has deteriorated, and if anything, that become more polarized over 0:10:20.840 --> 0:10:22.319 time and almost every day. 0:10:22.679 --> 0:10:24.920 When it comes to well when it comes to India, 0:10:25.320 --> 0:10:29.959 is the President basically putting geopolitical priorities in terms of Russia, 0:10:30.080 --> 0:10:32.119 ahead of some of the economic priorities. 0:10:32.800 --> 0:10:35.160 I think it's a combination of both. And if you 0:10:35.240 --> 0:10:38.880 noted that the secondary sanctions, which are a new concept 0:10:39.200 --> 0:10:42.400 that the President actually authorized himself to deploy not just 0:10:42.440 --> 0:10:46.640 against India but other countries yesterday, are being used on India, 0:10:46.679 --> 0:10:49.280 not China. So I think it's selective, but I think 0:10:49.280 --> 0:10:52.080 it's a tool that he will use and when he 0:10:52.200 --> 0:10:55.040 feels like a relationship is not moving in the right direction, 0:10:55.679 --> 0:10:57.760 he'll use every tool he can to get leverage. And 0:10:57.840 --> 0:11:01.120 if it's a geopolitical reason, then that certainly a valid 0:11:01.160 --> 0:11:04.120 reason to do that. So I think it's a combination 0:11:04.160 --> 0:11:06.520 of factors. It's going to take some work and time 0:11:06.640 --> 0:11:10.360 to rebalance that relationship. I don't know that's going to 0:11:10.400 --> 0:11:13.760 happen soon, but we're definitely going to have to watch. 0:11:13.840 --> 0:11:16.880 And of course the secondary sanctions has noted. New tool 0:11:17.080 --> 0:11:19.400 could have new dynamics for other economies, So that's going 0:11:19.440 --> 0:11:22.040 to be an important concept that we'll need to keep 0:11:22.040 --> 0:11:22.560 your eye on. 0:11:23.000 --> 0:11:25.080 R Does it sound like something that is going to 0:11:25.120 --> 0:11:27.920 be used with China? Is that sort of the objective here, 0:11:28.040 --> 0:11:31.040 not only to pressure Russia, but also to put this 0:11:31.120 --> 0:11:34.480 on the table ahead of some sort of g Trump 0:11:34.760 --> 0:11:37.040 meeting to say we could go there too. 0:11:38.200 --> 0:11:40.360 It could. I mean, we tried that right the President 0:11:40.400 --> 0:11:44.360 put prohibitive terrorists on China. It didn't work out so well. 0:11:44.440 --> 0:11:48.960 It really was incredibly disruptive, and China responded by withholding 0:11:49.120 --> 0:11:52.360 exports of materials that were needed for manufacturing in the 0:11:52.440 --> 0:11:54.640 United States. So I'm not sure that we're to go 0:11:54.679 --> 0:11:57.800 there again that quickly, but the fact that the tool 0:11:57.920 --> 0:12:01.560 is there is definitely signal, and we'll see how the 0:12:01.600 --> 0:12:05.079 relationship between the US and China unfolds. The President wants 0:12:05.120 --> 0:12:08.240 to get to a place with China where we can 0:12:08.320 --> 0:12:11.520 have a more productive relationship. I think that's clear. He's 0:12:11.559 --> 0:12:14.240 moving in that direction, I think putting sanctions on China's 0:12:14.240 --> 0:12:16.640 secondary sanctions would not lead to that goal, so I 0:12:16.679 --> 0:12:19.320 don't expect that to happen in the near term. On 0:12:19.360 --> 0:12:22.760 the other hand, he is meeting with Russia, and so 0:12:23.080 --> 0:12:25.520 in many ways these sanctions could be as a message 0:12:25.520 --> 0:12:28.360 to Russia as much as they are to India and China. 0:12:29.280 --> 0:12:33.320 But again, new tool. It's unprecedented. President has used tariffs 0:12:33.320 --> 0:12:37.400 in ways they couldn't have even been imagined really to know, 0:12:38.320 --> 0:12:40.760 prior to his election. So I'm sure there's a lot 0:12:40.800 --> 0:12:44.040 more creativity there, and it's something you know that's going 0:12:44.120 --> 0:12:46.760 to continue to be a factor even though we've got 0:12:46.800 --> 0:12:50.200 a lot of the central elements of the president's trade 0:12:50.400 --> 0:12:50.800 in place. 0:12:50.880 --> 0:12:54.240 Now I've rediss had a former NEC deputy director. Thank 0:12:54.280 --> 0:13:05.840 you so much for being with us, Bloomberg Standy Berger 0:13:05.920 --> 0:13:08.080 joins us now with a special guest, Danny Lisa. 0:13:08.080 --> 0:13:10.240 Thank you so much. It is such an important earning 0:13:10.280 --> 0:13:13.800 season for just that understanding the consumer and their sensitivity 0:13:14.080 --> 0:13:15.960 to this economy. I'm pleased to say joining us now 0:13:16.000 --> 0:13:19.040 is someone who understands the consumer very well. It is 0:13:19.200 --> 0:13:22.520 Mark Hopomasian, the CEO and president of Hyatt. Mark thank 0:13:22.559 --> 0:13:24.920 you so much for joining this morning. You're out with 0:13:25.000 --> 0:13:27.760 earnings moments ago. Earlier this year you had to cut 0:13:27.800 --> 0:13:30.320 earnings because of your outlook on some of the weaker 0:13:30.440 --> 0:13:33.960 reservation trends. Going forward, you've mostly held on to that look. 0:13:34.280 --> 0:13:37.280 So what if anything has changed for the consumer and 0:13:37.320 --> 0:13:38.320 the demand you're seeing? 0:13:39.960 --> 0:13:42.920 Well, Danny, first of all, thanks for having me. You know. 0:13:43.240 --> 0:13:44.800 The first point that I have to make is that 0:13:44.920 --> 0:13:49.760 travel is extraordinarily resilient. It's become a necessity for both 0:13:49.840 --> 0:13:54.440 leisure travelers and for business travelers. The second quarter was 0:13:54.559 --> 0:13:57.880 a weaker quarter for business travel, but leisure held up 0:13:57.920 --> 0:14:01.480 really really strongly, and are us orts were up mid 0:14:01.480 --> 0:14:04.240 single digits for the first half of the year. Europe 0:14:04.280 --> 0:14:09.400 was up almost seven percent in leisure. So leisure, especially 0:14:09.559 --> 0:14:12.960 the luxury segment, in the luxury segments, which luxury has 0:14:13.000 --> 0:14:15.280 been up about six or seven percent year to date, 0:14:15.280 --> 0:14:19.200 as well the higher end customer, which is that our 0:14:19.240 --> 0:14:21.800 core customer base with seventy percent of our portfolio and 0:14:21.880 --> 0:14:25.560 luxury and full service is alive and well. So I 0:14:25.560 --> 0:14:28.840 would say a couple of things have happened right now. 0:14:29.440 --> 0:14:33.920 The first is that our largest corporate customers have told us. 0:14:33.960 --> 0:14:34.280 They're not. 0:14:34.280 --> 0:14:37.840 They're going to lean in and continue to travel, and 0:14:37.960 --> 0:14:43.000 they're making more commitments, especially for customer facing events and meetings. 0:14:43.360 --> 0:14:47.359 The second thing that happened is that we saw bookings 0:14:47.400 --> 0:14:51.160 for twenty twenty six really improve for big group meetings. 0:14:51.160 --> 0:14:56.080 And third, the Conference Board and the Business Council released 0:14:56.080 --> 0:15:02.240 their CEO sentiments surveyed this morning and things have turned now. 0:15:02.360 --> 0:15:07.120 Tariffs and volatility have declined to number three on the 0:15:07.280 --> 0:15:11.080 list from number one, and their outlook with respect to 0:15:11.160 --> 0:15:14.600 potential recession has dropped dramatically. So I think the attitude 0:15:14.920 --> 0:15:17.640 and mindset for a lot of CEOs is shifting. 0:15:17.400 --> 0:15:20.320 Mark that's very fascinating because the tarff picture is still 0:15:20.960 --> 0:15:23.960 evolving as we go on. So are there any pockets 0:15:24.000 --> 0:15:27.200 where you're still seeing those fears of economic anxiety or 0:15:27.240 --> 0:15:29.640 to your point, is it now confidence restored? 0:15:30.840 --> 0:15:34.800 No, we are, And in a word, it's China. The 0:15:34.880 --> 0:15:40.720 caution and conservatism in China is clear, and a lot 0:15:40.720 --> 0:15:44.360 of people are uncertain about what a so called tariff 0:15:44.360 --> 0:15:48.240 war or the tariff picture might do to the economy. Overall, 0:15:48.920 --> 0:15:53.120 there's an increasing I think body of thought that says 0:15:53.640 --> 0:15:58.360 that Beijing pays a lot of attention to sentiment, and 0:15:58.720 --> 0:16:01.760 the sentiment is definitely one of a very significant caution 0:16:01.880 --> 0:16:04.760 right now. So I think there's an expectation that sometime 0:16:04.800 --> 0:16:07.880 in the fall there may be policy shifts that alleviate 0:16:07.920 --> 0:16:11.200 some of that and bring back a stimulus for growth. 0:16:11.560 --> 0:16:12.960 So I would say you. 0:16:13.440 --> 0:16:15.880 Jump in because I wanted to get to luxury because 0:16:15.920 --> 0:16:17.560 you mentioned that this is one of the strong suits 0:16:17.600 --> 0:16:20.360 and really resilient. Of course you've doubled down on the 0:16:20.440 --> 0:16:23.320 luxury strategy too, but it is a time where there 0:16:23.360 --> 0:16:26.960 is more competition and maybe that aspirational traveler needs a 0:16:26.960 --> 0:16:29.520 little bit more convincing that they should be paying up 0:16:29.520 --> 0:16:31.680 for the one thousand plus a night type of all 0:16:31.720 --> 0:16:34.280 inclusive resorts. So what do you need to do in 0:16:34.360 --> 0:16:37.120 terms of strategy to convince them that paying up is 0:16:37.120 --> 0:16:37.520 worth it. 0:16:38.800 --> 0:16:41.760 Well, our awn inclusive business is up six or seven 0:16:41.760 --> 0:16:44.840 percent year to date, eight percent if you include Europe. 0:16:45.200 --> 0:16:48.480 It's been wildly resilient. We are the leader in five 0:16:48.520 --> 0:16:53.360 star luxury all inclusive resorts. I think the certainty of 0:16:53.440 --> 0:16:57.960 what your vacation will cost you and the experience on 0:16:58.040 --> 0:17:02.960 property where our college are not thinking about or engaged 0:17:03.000 --> 0:17:07.960 in how much something costs but rather full on human 0:17:08.000 --> 0:17:11.520 to human service makes a difference to people, and so 0:17:11.560 --> 0:17:14.920 the format has really really proven to be very, very 0:17:14.960 --> 0:17:18.000 popular and will continue to do so. We just closed 0:17:18.800 --> 0:17:21.480 on the acquisition of Apply Hotels and Resorts, twenty six 0:17:21.520 --> 0:17:26.280 hundred new hotel rooms in premier beachfront locations, and we 0:17:26.320 --> 0:17:28.000 have a deal to sell all the real estate, so 0:17:28.040 --> 0:17:31.680 we will maintain our assetlite status. It's a great deal 0:17:31.880 --> 0:17:35.240 and adds sixty five million dollars in new fees to 0:17:35.320 --> 0:17:38.000 our run rates, so I think we're quite pleased with that. 0:17:38.800 --> 0:17:41.040 So we're definitely doubling down on luxury, and we're definitely 0:17:41.080 --> 0:17:43.440 doubling down on all inclusive well mark. 0:17:43.600 --> 0:17:45.919 Just to that point, it's been a really hot summer, 0:17:46.160 --> 0:17:48.200 a really hectic summer. I think a lot of people 0:17:48.280 --> 0:17:50.960 are looking for inspiration of where to travel right now? 0:17:51.359 --> 0:17:53.680 Where is the most demands? Where are you seeing most 0:17:53.680 --> 0:17:55.840 people go to? What's in fashion right now? 0:17:56.920 --> 0:18:02.000 Yeah? I would say the US traveler has headed to 0:18:02.040 --> 0:18:05.240 Europe this summer. We thought we would see a massive 0:18:05.280 --> 0:18:09.040 decline from last year, be given the Olympics and Taylor Swift, 0:18:09.080 --> 0:18:12.680 but they're back in Europe and Europeans are staying in Europe, 0:18:12.840 --> 0:18:18.160 but I would say the diversity of destinations has increased 0:18:18.240 --> 0:18:22.200 a lot of interest in Central and South America and 0:18:22.359 --> 0:18:25.920 the Caribbean, and Mexico continues to be in great demand 0:18:26.280 --> 0:18:30.960 both amongst Europeans, and the Canadian volume into our Mexican 0:18:31.160 --> 0:18:36.200 and Caribbean resorts is significantly above last year. A lot 0:18:36.200 --> 0:18:38.840 of people have talked about the flyover effect where Canadians 0:18:38.880 --> 0:18:42.679 are heading over the US to get to Mexican and 0:18:42.760 --> 0:18:45.719 Korean destinations, and we're seeing it significantly. 0:18:45.240 --> 0:18:48.600 All right, So Europe staying in Europe, Canadians skipping over 0:18:48.600 --> 0:18:50.480 the US definitely a trend there. Mark, thank you so 0:18:50.560 --> 0:18:53.960 much for joining us this morning. Mark Hopplomasian, the CEO 0:18:54.040 --> 0:18:57.240 of Hyatt Lisa, you are seeing a rebound in business travel, 0:18:57.240 --> 0:18:58.879 but China remains a weak spot. 0:18:59.040 --> 0:18:59.200 Yeah. 0:18:59.320 --> 0:19:02.080 That's something that has been a theme for a number 0:19:02.080 --> 0:19:04.320 of you as companies. Stannyburger, great work. Thank you so 0:19:04.400 --> 0:19:05.560 much for the. 0:19:15.560 --> 0:19:16.000 Joining us. 0:19:16.040 --> 0:19:19.639 Now is Ylena Soeteva of the conference board. Yolena, just 0:19:19.680 --> 0:19:22.760 on that point, how much is this indicating some sort 0:19:22.800 --> 0:19:25.399 of weakness the idea that it is so difficult for 0:19:25.400 --> 0:19:28.120 people or more difficult, I should say for people out 0:19:28.160 --> 0:19:29.800 of the workforce to find their way back in. 0:19:30.960 --> 0:19:36.600 Look, the data this morning actually shows the same kind 0:19:36.600 --> 0:19:39.120 of thing that it's been showing over the next Over 0:19:39.119 --> 0:19:44.040 the last several months, the in short unemployment rate remained 0:19:44.040 --> 0:19:48.280 at around one point three percent, and you know that's 0:19:48.359 --> 0:19:51.600 why it's been over the last several months, so we 0:19:51.720 --> 0:19:54.040 have seen a little bit of a pickup from the trough. 0:19:54.280 --> 0:19:58.240 But the idea is that you know, there's not been 0:19:58.640 --> 0:20:02.800 that much more in the unemployment rate despite the fact 0:20:02.840 --> 0:20:07.200 that the pace of job creation has slow And that's 0:20:07.200 --> 0:20:07.960 the point that. 0:20:07.880 --> 0:20:08.560 You empowered me. 0:20:09.160 --> 0:20:10.800 Kay mor was just talking about the fact that is 0:20:10.800 --> 0:20:14.000 the labor market frozen or actually deteriorating. What do you think? 0:20:14.800 --> 0:20:17.760 I think it's frozen. So a couple of things to mention. 0:20:17.920 --> 0:20:20.800 So if you look at the data from the employment 0:20:20.880 --> 0:20:24.840 report last week, you'll see that the increase in the 0:20:24.920 --> 0:20:28.600 unemployment rate since its through back in twenty twenty three 0:20:29.040 --> 0:20:34.280 has mainly been driven by people's inability to find a job, 0:20:34.400 --> 0:20:39.560 so kind of long term unemployment, and not by new layoffs. 0:20:39.640 --> 0:20:43.639 So that's point number one. Another thing is that this 0:20:43.800 --> 0:20:48.160 morning we saw a release of CEO Confidence, a report 0:20:48.240 --> 0:20:51.719