Bloomberg Businessweek Weekend: Retail, Tariffs, and US Economic Statecraft

Retail Sector Performance and Consumer Spending

• 🛍️ US consumers are showing resilience but with a note of caution due to rising prices and uncertainty from tariffs.
• 🛒 Retailers like Walmart are benefiting from consumers seeking value, attracting higher-income shoppers, while Target faces sales slumps and a new CEO.
• 💄 Luxury brands like Estee Lauder are experiencing a slowdown, contrasting with the overall stability in beauty.
• 💰 A bifurcation in consumer spending is evident, with lower-income consumers feeling pressured and higher-income households maintaining spending habits.

US Economic Statecraft and Geopolitics

• 🇺🇸 President Trump's administration is exploring direct government intervention in corporations for economic and foreign policy goals, including potential stakes in Intel and chip sales.
• 🛡️ This new approach to economic statecraft is unprecedented, moving beyond traditional trade policies and raising concerns about market fundamentals.
• 🇨🇳 The US sees competition with China as a driver for these actions, particularly in critical sectors like semiconductors and rare earth minerals.
• 🇬🇱 The US interest in Greenland is linked to its rare earth mineral reserves and strategic location, with potential for investment and a focus on national security.

New Zealand's Economic Outlook and Trade Relations

• 🇳🇿 New Zealand faces uncertainty from increased US tariffs, impacting farmers and manufacturers, while also dealing with a stalled economy and domestic headwinds.
• 🤝 New Zealand aims to be a beacon of stability with low inflation and declining interest rates, seeking stronger trade and investment ties with the US.
• 📉 The US tariffs, while disappointing, are a small proportion of New Zealand's overall trade, but global growth slowdown due to tariffs is a larger concern.
• 📈 New Zealand is actively encouraging foreign direct investment through initiatives like 'Invest New Zealand' and 'golden visas', attracting significant capital.

Digital Payments and Consumer Behavior

• 💳 Block (formerly Square) reports resilience in consumer spending and strong small business growth, with steady retention and new customer acquisition.
• 📱 Cash App shows continued growth in spending and earned wages, indicating strong user engagement and a growing share of wallet.
• 💰 Block's lending products (Square loans, buy now pay later, Cash App borrow) have shown healthy repayment behavior, with the ability to adapt underwriting models in real-time.
• ₿ Block holds Bitcoin on its balance sheet, viewing it as a potential future currency for the internet and investing 10% of gross profit from Bitcoin products back into Bitcoin.

Public Transit and Infrastructure Investment

• 🚇 The MTA is projecting an 80% subway ridership recovery by 2029, with railroads showing an even higher recovery rate.
• 💰 Fair increases are small and predictable, balancing the financial plan without burdening specific rider groups.
• 🛡️ Safety and reliable on-time performance are key to bringing riders back to the subways, with recent improvements in safety metrics.
• 💸 Congestion pricing is proving effective, reducing traffic by 11%, moving buses faster, and generating projected revenue for capital programs.
• 🏗️ The MTA's capital plan includes significant investment in climate resiliency and infrastructure upgrades, including the expansion of the Second Avenue subway line.