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1. Markets react to new US tariff announcement
In his latest effort to rework the global trading system, U.S. President Donald Trump signed an executive order that makes changes to his tariff policies on Thursday, and the markets have responded to the announcement, The New York Times reported. The new tariffs of up to 41% for some countries will go into effect on Aug. 7.
"The declines started in Asia and gathered momentum in Europe," per the article. "Japan’s Nikkei closed down 0.7%, and the Shanghai Stock Exchange shed 0.4%. The Stoxx Europe 600 index, which includes the continent’s largest companies, dropped 1.4%."
Futures for the S&P 500 index were 1% lower, according to the NYT, which is a result of tariff-related anxiety as well as company news.
2. US consumer spending, inflation rose in June
According to the Commerce Department's report released Thursday, U.S. consumer spending rose 0.3% in June, compared to May, which was flat. Spending rose 0.1% in June when adjusted for inflation, according to CNN. Personal income also rose 0.3% and savings held steady at 4.5%.
The U.S. is also beginning to see a bigger impact on overall inflation from tariffs, but consumers are largely “holding up OK,” Gus Faucher, chief economist of The PNC Financial Services Group, told CNN. However, the incoming impact of Trump's tariffs as they go into effect will be felt by consumers.
“It’s going to be uncomfortable for consumers,” he said. “I think that they’re going to start to see it, and they’re going to notice that their paychecks aren’t going as far as they were.”
3. Leisure demand, Maui recovery help drive Host’s second-quarter performance
During the hotel real estate investment trust’s second-quarter earnings call, Host Hotels & Resorts President and CEO Jim Risoleo said transient revenue grew across the portfolio by 7% due to the Easter holiday calendar shift and the ongoing recovery in Maui from the 2023 wildfires. Maui saw 19% revenue per available room growth, giving a 100-basis-point boost to the overall portfolio’s RevPAR growth.
https://www.linkedin.com/in/jim-risoleo-134a806
While there are ongoing macroeconomic concerns, Risoleo said Host executives have enough confidence in their portfolio’s performance and demand for their properties that they are increasing their outlook for the full year.
“As we have said many times before, Host is well positioned to weather any environment because of our fortress investment grade balance sheet, a leverage ratio of 2.8 times, our size and scale, our diversified business and geographic mix, and our continued reinvestment in our portfolio,” he said.
4. Latest US employment numbers show mixed results
The U.S. Department of Labor reported initial jobless claims for the week ending July 26 rose by 1,000 to a seasonally adjusted 218,000, according to Reuters. The number of people receiving benefits after their first week of aid was unchanged at a seasonally adjusted 1.946 million for the week ending July 19.
That news comes with the Labor Department also reporting the U.S. economy added 73,000 jobs in July, coming in lower than economists predicted, according to the New York Times. It also revised down numbers for May and June, taking May hirings from 144,000 to 19,000 and June from 147,000 to 14,000. The unemployment rate rose to 4.2% from 4.1% in July.
“I think we’re looking at a labor market that’s not absolutely falling off a cliff, but it’s getting materially weaker,” Oliver Allen, a senior U.S. economist at Pantheon Macroeconomics, told the New York Times.
https://uk.linkedin.com/in/oliverjallen
5. Norwegian Cruise Line reports record advance ticket sales
In its second-quarter earnings call, Norwegian Cruise Line Holdings reported strong consumer demand and largely-met adjusted earnings expectations, Yahoo Finance reported. The cruise line's second-quarter occupancy was 103.9%, which was in line with its outlook, and advance ticket sales hit $4 billion, a record for the company.
“Demand has rebounded across all three of our brands, with bookings now ahead of historical levels in recent months and continued strength in onboard spend," Harry Sommer, president and CEO, said on the call. "This performance reflects the strength of our offerings across the fleet, along with our disciplined focus on driving both return on investment and return on experience."
The quarter's revenue of $2.52 billion is also a record for Norwegian and represents a 6% increase year over year, but missed the average analyst estimate of $2.55 billion.