Daybreak Weekend: Summer Travel, Jamie Dimon, China Data

0:00The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. If you listen to financial news, you know a lot of time to spend thinking about what's next. The next opportunity. The next investment. The next move.

0:39But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. Let Cincinnati insurance make your bad day better. Find an independent agent at CINFIN.com. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

1:26With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. 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, the nation's biggest retailers battle it out for your summer spending dollars and what earnings from Delta Airlines will tell us about travel demand right now. I'm Tom Busby in New York. I'm Caroline Hepker in London as J.P. Morgan's Jamie Darman visits Ireland ahead of the U.S.

2:04tariff deadline for Europe. I'm Doug Krishner looking ahead to next week's CPI and PPI reports for China. That'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.

2:37Good day to you. I'm Tom Busby. We begin today's program with what's become a Black Friday sales Bonanza in the middle of summer. Amazon's annual Prime Day July sales event kicks off with Target, Walmart, and others joining in. How much money is at stake? Are Americans expected to spend like we did before? And what role could the Trump tariffs play in sales? For more, we bring in Poonam Goyal, senior U.S. e-commerce and retail analyst at Bloomberg Intelligence. Poonam, thank you so much for joining us this holiday weekend. Millions of Americans gearing up to spend, spend, spend, at the nation's biggest retailers.

3:15And this year is a little different, I think. We have a couple of competing forces, a pullback in consumer spending, no doubt. Some people are spending less. And then fears about these Trump tariffs that are scheduled to kick in this coming Wednesday, July 9th. What do you see coming up on these big sales events? You know, you said it exactly right. They're really, consumers are pulling back and consumers are looking for deals. So what better way to find deals than on Amazon's Prime Day sales, which now is a four-day event versus a two-day event historically? Deals matter, and hopefully these deals draw consumers to Amazon to buy what they want.

3:57Now, this is a lot of money. Last year in 24 American, this is according to eMarketer,$14.2 billion. And as you said, this was only Amazon had a two-day sales event. This year, they've stretched it to four. Do you think we're going to see that kind of spending? I think spending will be up double digits, including on this Prime Day. Now, the fact that it's four days and two days, does that mean that you, you know, double what you're expected to get? Probably not double because there is spending that still occurs right on the Amazon platform after Prime Day. But I think what this helps do is if you think about what's happened since Amazon has introduced Prime Day, is that other retailers, as you mentioned, have followed suit.

4:39So Walmart has its deals, Target has its deals, Best Buy, Wayfair, you name it. But these deals aren't just two days. They're longer. So by Amazon going from two days to four days, they're now in play along with the rest of them for a longer duration. I think that's really what helps here. And Target is seven days. Walmart is a six-day event. I mean, they're really stretching things here, aren't they? Yeah, exactly. So, you know, Amazon being just two days, I think it's smart of them to go to four days. And I do think it'll help them draw higher sales because it is a longer event. Now, Amazon did something, I think, really smart this year.

5:17They moved up the dates. Last year, I'll say, there was a two-day event. It started July 16th. This year, it's starting July 9th. And that's an important day because that's the day that the across-the-board Trump tariffs are supposed to kick in. And we know anything could change before then. But I think it's a savvy move to move this up because people are afraid. People are worried. There's a lot of uncertainty about those tariffs, how much it's going to change prices on things, inflation rising. And it looks like everybody else has followed suit. Yeah, you're absolutely right. Look, that day is clearly going to be an important day and we'll find out what happens with tariffs.

5:58But as tariffs are top of mind on that day, consumers are also at the tip of their seats looking for deals because if things do change and if things get more expensive for the consumer, they're going to want to buy it now. And the prime day sale happens to be just that day and for the next four days. Now, this started kind of the dog days of summer. People were not spending a lot of money. It started in 2015 with Amazon. And they've grown into maybe stretching out not only the back-to-school sales, they've early those up. I mean, this has really become an annual event along the lines of Black Friday, hasn't it, for all these retailers and consumers?

6:40Absolutely. The Prime Day sale is a big event. It's not as big as Black Friday, but still a very big event. And it comes at a key shopping point in time, right? It's right ahead of back-to-school. So consumers have the intent to shop. They have the urgency to shop. They have the need to shop. And this year especially, they want the deals, right? They're looking to spend less and get more. And the only way to do that is to go shop on deal days. And this is one of Amazon's biggest deal days outside of Black Friday. Now, Amazon now has 220 million subscribers. And really, to get the full benefits of these Prime Days, you have to be a subscriber.

7:22What kind of deals are we talking about? And are there ones that stick out to you that you've seen that could really, really have a big impact on sales? So we'll see the deals this week when Amazon starts launching them. This year, they're doing it a little differently. They're dropping new deals every day on different categories. so they're being very targeted in how they get consumers to keep coming back right you don't want to go shop the first day and then not come back the second day so they're being targeted for their deals in terms of what the deals will be i think you're going to see the same as you've seen before you're going to see deals on electronics you're going to see deals on amazon gadgets whether it's a kindle or any of their other devices you're going to see them use their rufus and Alexa AI assistance to help consumers find deals.

8:10So that's the real new thing here, is that Amazon is going to try to have consumers lean into these AI tools, not only just to compare products on their website, but also to learn about them, get smarter, and really see the value in them to help them hit that button, buy now. Our thanks to Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence. We turn now to the airline industry with the latest earnings from Delta Airlines out on Thursday, just as the summer travel season is in full swing. Or is it? For more, we're joined by George Ferguson, Airlines Aerospace and Defense Senior Analyst with Bloomberg Intelligence.

8:48Well, George, thank you for being here. I want to start with what you expect to see from Delta's second quarter earnings this week, which comes after blowout earnings for Q1 three months ago. But since then, I think we both agree a lot has changed in the industry. It has, and thanks for having me on. Delta is always the first airline to report, and usually one of the stronger airlines in the U.S. industry, and we'd expect the same this time. I think the big things that we're going to watch is, first, U.S. domestic travel. We think U.S. domestic travel is probably cooling. It's the biggest driver of revenues, profits for the airlines.

9:28And so to give us a good sense for how much that is cooling right now, it's hard for these airlines to continue to push to higher profitability if that market isn't working. And we're expecting across the board that U.S. airlines are going to have lower profitability than last year in the same quarter. We'll also get a first look at Europe during the summer vacation season. That's been super strong for the big U.S. full service carriers, United, Delta and American. We suspect that this market is going to cool as well. Although this is probably because of a slowing economy, the U.S. dollar weakening a bit.

10:08We don't think it's going to fall off a cliff, but we just can't see it remaining as super strong as it has been. We kind of suspect that a lot of these travelers book pretty far in advance. I have sort of a joke that on Christmas morning, everybody wakes up, opens their presents, and then decides where they're going to travel to Europe that summer in the well-heeled families of America. And so we suspect that 2Q is probably going to hang in there pretty well. But we'll be listening closely for trends for 3Q and into 4Q because, again, we think there's a bit of a lag that occurs in bookings into Europe.

10:45But we still think 2Q may provide some insight into some potential softening in that market. And I think one of the challenges we'll also have as we look at Delta, like I said, is we're expecting that domestic market to soften. And we'll see some of that in Delta's earnings. But it won't be a good indicator, as good an indicator of what we expect out of low-cost carriers, because the low-cost carriers really catering to a different clientele. We would expect that anything Delta reports in the domestic industry is going to be even softer when we get to some of the low-costs like JetBlue, Southwest, Frontier, those kind of companies.

11:27Well, back to Delta. Now, they telegraphed this softening back in April, their last earnings report, right, where they withdrew a full year guidance because of softer demand. And since then, I mean, we've seen more unrest in the Middle East. These White House, you know, policies on migrants, travel bans, the Trump tariffs. I mean, have things even gotten a little worse than even you suspected? Yeah, I mean, I think that the backdrop is getting is definitely getting more difficult. I don't know that they totally telegraphed more difficult times ahead. You know, the sense I got was at earnings, there was just so much, so many things changing in the U.S., right?

12:04Tariffs were being announced. Everybody wasn't sure what it was going to do to GDP. But I think that the companies just decided that it was most prudent, maybe easiest, just to pull guidance for the year. but as we went through the call, there was a lot of discussion about how they hadn't seen the softening yet in many of these markets. But again, I agree with you. I think since then, the backdrop has gotten a little bit worse on all those fronts. Again, I think commentary on the back half of the year won't be as strong. We'll be listening very closely for that. But all this takes time to filter through.

12:42And so 2Q, we expect it to be okay, not more profitable than last year, but okay. Now, chances are, if you're traveling this summer, you've already made your flight and hotel bookings. But if not, could that mean right now, it's July, there are solid deals out there for consumers? Again, I think that some of the shortest distance between booking and travel is typically the domestic market. I would suspect that there's probably some interesting deals out there right now for the domestic market, because that's the one I think will get softest sooner. And then I think, you know, you'll see the airlines discount to try to fill those airplanes.

13:20You know, the way we see sort of revenue management at the airlines nowadays, all these carriers traditionally have sort of 80 plus percent capacity of every airplane that flies. You know, those revenue managers will get out there and try to fill those airplanes at the marginal cost of the seat. And so, like I said, that means you could get some pretty interesting opportunities. I suspect on some of the international travel, long haul Latin America, Asia-Pac and Europe, I suspect still a good amount of those seats have been filled and filled earlier in the year. And so I think you'll see maybe less great deals in the marketplace for those, but you'll probably see some.

13:59Well, Delta Airlines Q2 earnings out this Thursday ahead of Wall Street's opening bell. Our thanks to George Ferguson, senior analyst for Airlines aerospace and defense with Bloomberg Intelligence. And coming up on Bloomberg Daybreak Weekend, JPMorgan chases Jamie Dimon, visits Ireland ahead of the U.S. tariff deadline for Europe. I'm Tom Busby, and this is Bloomberg.

14:27Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com by selecting Work Mode, available on Plus and Pro plans.

15:10You already know how AI is changing how everyday work gets done, how much ground you can cover, and how fast a team can scale. To stay ahead, you need the tools that give you a competitive advantage built for this new era. Welcome to Agentic Revenue. Adio is the CRM for this world. It meets you where you work, compounds every customer signal into context, then ax on it across your pipeline to let you move it on match speed and scale. With agents and automations for every job in revenue, Adio orchestrates your work around the clock. Built to handle the scale of your workloads, extensible with API and MCP, and with the infrastructure to keep up with your most ambitious agents.

15:47Loved by high-growth startups like Granola, Modal, and Etched, Adio runs the work behind every win. That's Adio, the agentic CRM, the intelligent system that never sleeps. Picks up leads at 2 a.m. Catches renewals before they slip. Hands you the answer before you ask. Try Adio free at adio.com slash iHeart. That's adio.com slash iHeart.

16:12This holiday, the difference between buyers just checking things out and checking out comes down to the last few clicks. PayPal Checkout is a trusted conversion engine fueled by 400 million active PayPal and Venmo accounts. Add Pay Later and turn holiday shoppers into regulars. 96 % of Pay Later shoppers are repeat users. PayPal Open, built for all business. Get started at paypalopen.com. PayPal Pay Later date at 8 markets March 2025 to February 2026. Repeat users defined as more than one Pay Later purchase in the past year. This is Bloomberg Daybreak Weekend, and our global look ahead at the top stories for investors in the coming week.

16:49I'm Tom Busby in New York. Up later in our program, China firms locked in a race to the bottom when it comes to pricing artificial intelligence. But first, Jamie Dimon, chairman and CEO of J.P. Morgan, visits Ireland this week just ahead of this Wednesday's July 9th deadline for U.S. tariffs, which, if they go ahead as planned, would add 50 % duties to most European goods exported to the U.S. Ireland, a major beneficiary of global economic integration, that's according to the finance minister, is aiming to maintain formidable growth while balancing European interests with its traditionally strong relationship with America.

17:27For more, we turn to Bloomberg Daybreak anchor Caroline Hepker. In the midst of a boom in Europe's banking sector, JPMorgan Chair and CEO Jamie Dimon will head to Dublin for talks with the country's second-in-command on trade, tariffs and sustaining economic growth. The banking stalwart will meet with Ireland's Tornishta, in effect the Deputy Prime Minister, just as geopolitical uncertainty both drives interest in Ireland's Goldilocks business climate, but also could pose threats to its tech and pharma industry. Well, joining me now to discuss is Olivia Fletcher, Bloomberg's Dublin Bureau reporter, and here in London, Bloomberg's senior finance reporter, Laura Noonan.

18:06Welcome to both of you and thanks for being with me. Olivia, to you first. Jamie Dimon has raised the alarm on macroeconomic risk, on bond markets, on tariff uncertainty. What do you think he's going to be talking about and thinking about when he's in Ireland? How much is Ireland at risk from all of these? Well, the big question now is how Ireland can remain competitive. You know, its whole economic model has been based off attracting and allowing foreign direct investment internationally, especially from a lot of US firms. There are a lot of multinational hubs here, Apple, Pfizer, a lot of the investment banks are here as well.

18:48And the key is going to be staying competitive because Ireland was basically the envy of Europe. You know, it's got this huge budget surplus. Last year, you know, it reaped a record 39 billion euros in corporate tax receipts. Albeit they are kind of volatile, but that's a huge, huge amount of money that has transformed it from one of Europe's forests to one of its richest. But now it's kind of making headlines, I guess, for maybe the wrong reasons, because Ireland is now directly in Trump's line of sight. It has one of the biggest trade imbalances with the US, and Howard Lutnick has repeatedly singled out Ireland for its huge surplus.

19:28So the big question, I guess, is how does Ireland continue to attract and maintain the foreign direct investment that has kind of funded its coffers? just as Trump is trying to lure so many of those US companies back to American shores. Laura, a lot of uncertainty then around tariffs and trade and what that means for Ireland. There is certainly a lot of uncertainty. What I would say is Ireland has tried to tread a very fine line around tariffs and around the current Trump administration. So Ireland's always been in a particular position. I think where it is economically and politically is also similar to where it is from a geographic perspective.

20:05It is midway between, it seems itself as being between the EU and between the US. And there has always been close ties between Ireland and the US, some of which predate Ireland's EU membership. So I think Ireland is trying to play a very fine line here. They are very conscious of not wanting to alienate the US administration any more than is definitionally necessary, because Ireland does have a low corporate tax base. That low corporate tax base has attracted a lot of multinational activity, a lot of US activity, which the US administration believes should be in the US. So that is a definitional problem.

20:41But beyond that, Ireland is trying to position itself as a friend to the US while also being a good European. So you won't see the Irish administration making the same kind of combative statements as what you have seen some of the other EU nations doing. in terms of Jamie coming to Ireland then, Jamie Dimon, JPMorgan Chase CEO. Jamie loves Ireland. That's the first thing to say. He's visited a number of times. He's visited several times. There's some Americans who love Ireland. Jamie is one of those. So he loves Ireland. I think he will be stressing the benefits of the Irish economy. He'll be stressing all the great things that the Irish landscape has delivered for JPMorgan.

21:22They've already got a couple of thousand people there. One of the jokes about Jamie coming to Ireland is that Jamie will come to Ireland to promise a couple of thousand jobs and then it's up for everyone else to figure out how to make that happen or like how to walk that back. Like he just loves the place. So I think he will be stressing the strengths of Ireland and also trying to encourage Ireland to stay the path from a stability perspective. One of the other assets Ireland has had through the recent geopolitical ups and downs is that there have been a lot of big elections. There's been a lot of political shifts in a lot of big countries, including the UK.

21:54So last year we had elections in a lot of major EU countries. We had elections in the US. There was a lot of public talk about that internationally. We also had Irish elections. Nobody cared because essentially they rearranged the chairs in a very similar order to the old chairs. And I think that stability as well has become an asset. So while it doesn't make Olivia's life any easier in trying to excite people about the Irish elections, it does become a selling point when you think about companies like JP Morgan, who in this world of a lot of uncertainty, I think people do look for stability. And I think Jamie will be stressing the stability they have found in Ireland and will be encouraging the country to continue on that route.

22:34And of course, some of these points were reflected in some recent interviews that we've had, including my Daybreak Europe co-host, co-anchor Stephen Carroll, who sat down with the Irish Finance Minister, Pascal Donoghue, when Bloomberg opened its brand new bureau in Dublin. So have a listen to what Delna Hugh had to say. We've a growth outlook for our economy even now of two, maybe even more than 2 % per year. The reason why these companies have part of their global supply chains here in Ireland is because we've the skill, the experience and the competitiveness built up to keep them in our country.

23:12And we will look then at how we can maintain that, even if the trade environment around it does begin to change. So quite a rosy vision then for Ireland's economy, despite the trade worries from Donoghue. Olivia, in terms of the reliance, as you say, on corporate tax receipts from large multinational companies and also what the government is going to do with the budget surplus that it's got in terms of setting up a sovereign wealth fund, what are the next steps for the Irish government? Well, like you say, the picture is perhaps not as rosy as it once was. You know, Pascal Donahue's finance department has revised down its domestic economic outlook and so has the central bank.

23:57You know, they're kind of saying that while Ireland will still see a surplus, the surplus might not be as high as it was once anticipated to be. And so the next steps for the Irish administration are, like I say, to continue to keep that competitive edge. You know, the finance department, you know, and also Ireland's foreign direct investment agency, the idea that keen to stress that while Ireland has in the past kind of attracted these companies because they are a strategic tax base. you know, Ireland also has a hugely skilled workforce. And like Lauren said as well, actually, when I went to see the IDA recently when the press conferences, their chair said that Ireland stands out as an oasis of stability to investors.

24:44So I think the key thing for Ireland is to, you know, remain stable, which seems like that's something they'll be able to do and to continue squirreling away some of that money into the sovereign welfare because Ireland isn't just thinking about the next three four years the problems potentially could come you know 10 years down the line when you know for example a company might not pull out of Ireland right away but they might just decide not to invest in a pharmaceutical plant in 10 years time so the issue isn't necessarily that all these companies are going to leave right away it's that what might just not be there in future which is harder to measure and so you know Ireland is having to look at all kinds of other ways to continue to attract companies also invest more in research and development that's quite another thing that's high up on their agenda things like that.

25:30Laura to bring you the context also amidst all of this is that European banks have done incredibly well in the first half of this year so there's also that context to kind of bring into to this that European banks are again sort of back in focus. Yeah I mean Irish banks are a bit of a different sector to European banks in the sense that what's happening there partly reflects the reprivatisation of the market. Ireland is a very particular banking market. So there are basically two very large banks, AIB and Bank of Ireland, who dominate the market, one slightly smaller bank. AIB has just returned to fully private ownership.