Your one buddy at Burning Man right now (who also keeps reminding you they've been going for __ years)? They picked a good time to get away.
Markets plummeted Friday to secure a 4th-straight weekly drop as the US/China trade war gets aggressively more intense and more personal.
Who's up...
Retail-pocalypse survivor = Target... Shares surged 17% for Minnesota's pride-and-joy because its $7B Millennial makeover is winning — Target has remodeled 500 locations and just unveiled its 100th mini-store, where sales are actually rising. It also launched its biggest ever food brand, Good & Gather, which is smothered in organic-ness.
5.6M wrists... Fitbit just snagged them via a big new client: the government of Singapore wants its citizens wearing quasi-cool fitness trackers for a nationwide public health initiative. Sales for Fitbit's "health solutions", through partnerships like this, have jumped 42% from last year.
11... That's how many times Estée Lauder dropped the term "travel retail" in its latest earnings report. The makeup legend is squeezing splurge-cash from captive audiences stuck in airport terminals. The trend isn't limited to just EL's makeup and skincare sales — spending overall at airports tripled over 15 years, hitting $69B in 2017.
...and who's down
New card, who dis?… Apple’s digital-first credit card with Goldman Sachs went live nationwide to everyone with iPhones. Apple’s proud of its hoverability (you don't "swipe" your iPhone), privacy (the number changes with each transaction), and rando-coolness (it turns colors based on your purchase). But Apple's most innovative creation since AirPods couldn’t save the stock from the trade war cross-fire — nearly all Apple hardware is made in China.
Fewer angel sightings... More bralettes and inclusive sizing. Victoria's Secret missed that trend — and shares of its owner L Brands plummeted to a 10-year low after the lingerie icon's sales fell another 6% last quarter. The Chief Marketing Officer behind its push-up culture is out after 30 years and the company will stop broadcasting its fashion show.
Propagandists ❤️ Twitter, Facebook, and Google... As activists in Hong Kong protest for more democracy, Chinese authorities started buying ads online. And posting a lot of false details. The social media platforms acted to crush the state-sponsored disinformation — a reminder to investors that online ads are good for mattress companies that want to sell to you... and dishonest governments that want to mislead you.
4 moments that made Friday the worst day of the Trade War
If you snoozed news Friday... you missed a 24-hour drama of Twitter squabbling and real economic punching that unfolded in 4 parts:
- 🇨🇳 🤜 🇺🇸 China announced it was increasing tariffs on a hefty $75B worth of stuff it buys from the US every year (including cars).
- 🇺🇸 🤜 🇺🇸 President Trump wondered aloud on Twitter who was a bigger enemy to the US: China's President Xi or the Chairman of the Fed, Jerry Powell.
- 🇺🇸 🤜 🇨🇳 🇺🇸 Trump ordered US companies to start the process of removing production from China.
- 🇺🇸 🤜 🇨🇳 Trump increased all existing and planned tariffs on China by 5%.
As always with tariffs, there are plenty of losers...
- Cars: Besides Americans, China buys the 2nd-most US-made cars. Tariffs are like a tax raise on Tesla (-5%), Ford (-3%), and BMW (-3% — the Carolina-made X5 is the #1 exported car in America, going mostly to China).
- Toys: Mattel fell 7% because most of Barbie is made in China.
- Electronics: Entertainment staples Best Buy, Apple, and GoPro were destined for punishment after producing in China.
- Everything else: Tariffs will look to us like price increases on the stuff we buy, which JP Morgan estimates will cost every American household $1K/year.
The crazy curve is getting steeper... We've never seen so many economic punches thrown in one day. A crucial element of economic growth is business investment — and it's hard out there for a CEO to do that right now. With President Trump and President Xi openly calling each other names, both sides are less likely to back down and cooperate if it could make them look weak-ish.
What else we’re Snackin’
- Work: How unpaid internships hurt basically everyone
- Life: Many 3-day vacations, or a few long vacations. Who ya got?
- Money: Preferred stock vs. Common stock
- Venture: This guy invested in 2 unicorns — these are his 8 tips to finding the next one
- Crypto: The future of cryptocurrencies and blockchain in the NBA
- Policy: How traffic jams in Atlanta today explain a history of racial segregation
This Week
- Monday: National Women's Equality Day (99th anniversary of women getting the right to vote in America)
- Tuesday: Earnings from Smucker's, Scotiabank
- Wednesday: Earnings from Box, Movado, Tiffany's
- Thursday: America's 2nd Quarter GDP Report. Earnings from Abercrombie & Fitch, Ulta Beauty, Best Buy
- Friday: The Consumer Sentiment poll tells us how we're all feeling about the economy right now. Earnings from Campbell Soup
Disclosure: Authors of this Snacks own shares of Tesla.
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