Walmart Wallops Amazon for a While

Today’s Agenda

• Walmart shows big-box retail, at least, can still keep up with Amazon.
• The Fed has put China in a terrible fix.
• Italy is another financial crisis waiting to happen.
• Is Uber sustainable?
• Trump has led Republicans far astray.

Walmart Strikes a Blow for the … Big Guy

(Bloomberg Opinion) -- Walmart Inc. and Amazon.com Inc. are, in many ways that I just made up, the Godzilla and Mechagodzilla of retail, fighting to command whatever is left of the wreckage they leave at their feet. In that battle, Godzilla – Walmart in this tortured analogy – won the day today.

The big-box behemoth reported its best quarterly sales growth in more than a decade, and its shares jumped 10 percent. It posted staggeringly good numbers in both e-commerce and grocery – which, as Sarah Halzack points out, are one-two punches to e-commerce giant Amazon, which has recently gotten into the grocery business in a big way. Most telling is how lumbering, old Walmart schooled Amazon on in-store grocery pickup, a service the latter only recently introduced at some Whole Foods stores. “Amazon is effectively acknowledging that Walmart’s model is a good one, and that stores will be a vibrant part of the grocery ecosystem for a long time,” Sarah writes. Stores! Imagine that. Click here to read the whole thing.

Amazon wants to dominate more than just the U.S., and one juicy target is India, a booming, relatively open economy with a lot of potential consumers. Walmart recently bought Indian e-commerce retailer Flipkart, opening a new front in its battle with Amazon for global domination. But Andy Mukherjee writes Walmart isn’t Amazon’s biggest threat in India – it’s really a company called Reliance Retail Ltd., India’s biggest retailer, whose biggest shareholder is India’s richest man, Mukesh Ambani. Let’s call this Mothra.

But please don’t worry too much about Amazon. It is constantly finding new businesses to bother, from health care to now maybe movie theaters for some reason? Oh, and also insurance – or at least insurance-price comparison. But while most industries rightly tremble at the shuddering footfall of Amazon’s big feet, the insurance industry should welcome it in this case, writes Alex Webb.  

Meanwhile down in the rubble, J.C. Penney Co. Inc. shares fell 25 percent today to levels not seen since the 1980s after it warned it would lose money this year. Walmart and Amazon barely noticed.

China’s Dilemma

China is in a bit of a pickle, writes Christopher Balding: It needs to boost its economy to weather a trade war with the U.S. It also needs low interest rates to keep its companies from being crushed by a massive debt load. But the Federal Reserve is raising interest rates, making China increasingly less appealing to foreign investors. China could raise rates too, luring back foreign investment to help its economy in one way, but that would also squeeze its economy in a different, everybody-going-bankrupt kind of way.

China’s real-estate developers, though, are loving that the trade war means they have free rein again, after a temporary crackdown on debt, writes Nisha Gopalan. But the real measure of China’s health could be the commodities market – and that is not looking good, warns David Fickling.

Italy’s Rising Risks

Half a world away, Italy is also being squeezed by rising rates, slowing growth and suffocating debt. The country’s banks are not prepared for the consequences, warns Ashoka Mody – and its politicians don’t seem prepared to do anything about it.

Investors have other concerns about Italy right now – namely, that its new populist government will, in an effort to goose the economy, ignore European Union rules about spending. It’s hard to sort out such a worry from all the worry about contagion from Turkey’s financial crisis, but Marcus Ashworth has found a telling indicator in Italy’s bond market.

You Can’t Spell ‘Burning Money’ Without ‘Uber’

For being such a relatively old – it’s nearly 10! – and valuable company, Uber sure does burn a lot of cash, notes Shira Ovide after taking a look at the company’s latest financials, released last night. It’s almost like a lot of other young tech companies and a certain electric-car maker that way. It’s enough to make Shira wonder: “Is Uber viable?” What happens to Uber, in other words, if it stops being able to tap deep pools of money for fresh cash to burn? Click here to read the whole thing.

Trump Sets a Bad Example

Corruption is pretty much a constant in politics. The only question, in American politics, is which side seems to bear the taint of malfeasance more at any given time. Right now, it’s the Republican party, writes Al Hunt – and you can mainly thank President Donald Trump for that. 

The other big question now is whether Republicans are so partisan that they will defend Trump to the bitter end, even if the Mueller investigation finds impeachable wrongdoing on his part. The evidence so far suggests yes, they will support him no matter what. But Jonathan Bernstein looks back on Watergate and remembers  Republicans supported Nixon too, right up until the bitter end, when they suddenly didn’t. Will history repeat?

Bonus Trump Reading: Trump pulling John Brennan’s security clearance may violate the First Amendment. But the Supreme Court’s recent decision in the travel-ban case gives Trump reason to expect he can get away with it. Expect him to keep testing his limits. – Noah Feldman 

Chart Attack

Sarah Sanders was wrong in more ways than one about black job gains under Trump, writes Stephen Gandel.

Turkey’s dumping of U.S. Treasury debt is an ominous sign – for Turkey, warns Brian Chappatta.

Quick Hits

The Catholic Church’s endless sexual-abuse problem is costing it millions of dollars – and converts. – Joe Nocera 

Brett Kavanaugh will probably rule states can’t ban payments to religious schools; but that isn’t the end of the world. – Noah Feldman 

The liberal global order can be saved. – Hal Brands (Part 3 of a 3-part series. Click here for part one and part two.)

Artificial intelligence still isn’t all that intelligent. – Noah Smith  

ICYMI

China-U.S. trade talks are about to resume. Trump wants to crack down on opioid makers. Paul Manafort’s jury is deliberating. 

Kickers

RIP Aretha Franklin. Read David Remnick’s New Yorker profile of her. Watch her epic Kennedy Center Honors performance in 2015. And watch her absolutely destroy a room in 1968.

She’s Trump’s spokeswoman. He can’t stand Trump. You can guess what this is doing to their marriage.

What is a “monumental horror” in film? You’ll know it when you see it. 

Note: Please send monumental horror, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

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To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.

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