Retail’s race against tariffs

Hey Superheroes,

The RBA has cut the cash rate by 25 basis points to 3.85%, marking its lowest level in two years. This decision came amid easing inflation pressures and global uncertainty. 

For those holding Bitcoin ETFs, Bitcoin surged past US$110,000 this week to reach an all-time high, driven by renewed optimism surrounding U.S. cryptocurrency regulation and increased institutional investment. 

Gold prices are also on the rise, trading around US$3,300/oz, as investors seek safe-haven assets amid ongoing economic uncertainties.

Let’s break down the big news moving markets.

Tariff tensions hit the treadmill

Nike (NYSE:NKE) is lacing up for higher prices. 

From June, the sportswear giant will bump U.S. retail prices across multiple product lines. Officially, it’s “seasonal planning” – but the timing says otherwise.

Squeezed by supply chains

Behind the scenes, tariffs are biting. Nike depends heavily on imports from Vietnam, China and Indonesia, regions firmly in the crosshairs of Washington’s latest trade crackdown. A base 10% tariff is already in force, but a sharper 46% levy on Vietnamese goods could be reinstated in July if trade negotiations collapse.

Vietnam alone accounts for around 50% of Nike’s footwear production and over a quarter of its apparel. With that level of exposure, rising import costs may no longer be a rounding error but a direct hit to Nike’s margins.

Price-sensitive segments (i.e. those below the US$100 mark) have been spared from price increases for now.

Reopening the Amazon cart

To offset margin pressures and slowing online sales, Nike is also widening its distribution net – by making a return to Amazon.

After walking away from the platform in 2019 to focus on its own retail channels, Nike will resume direct sales through Amazon from July.

The move comes as Nike faces mounting pressure from rivals like On, New Balance and Adidas. Nike’s global sales fell 9% last quarter – with a massive 17% drop in China. Its share price is down nearly 20% year to date.

Helloworld’s bold bet on Webjet

Helloworld Travel (ASX:HLO) has quietly built a 10% stake in Webjet Holdings (ASX:WJL), scooping up another 5% last Wednesday at 89¢ a share.

That’s more than double the price it began accumulating at in April, and higher than the 80¢ takeover offer from BGH Capital recently rejected by Webjet’s board.

This now makes Helloworld the single largest shareholder. The move has sparked fresh M&A speculation, though no formal bid has been launched.

A new flight path for Webjet

Investor interest in Webjet comes just eight months after its demerger from Web Travel Group, which retained the corporate travel arm. The move allowed Webjet to focus on consumer bookings, backed by strong post-COVID travel demand.

While previously trading above $1, shares slipped to the 40¢ range by April as discretionary travel slowed and airfare prices dropped. 

Despite ambitions to double total transaction value to A$3.2 billion in five years, Webjet has flagged flat profits for FY25.

 Some other things we’re shining the Spotlight on:

QUANTUM JUMP: D-Wave, Rigetti and QUBT all experienced gains between 15% to 65% over the last five days. D-Wave announced its new Advantage2 quantum computing system, while QUBT posted a profitable first quarter, up from last year’s net loss. Rigetti on the other hand hasn’t announced anything material in the last week, with analysts suggesting its price jump may be due to positive sentiment for the broader industry.

MUSK IN THE DRIVER’S SEAT: Elon Musk announced plans to remain Tesla’s CEO for at least the next five years, focusing on advancing AI and robotics projects. This follows media speculation earlier this month that Tesla’s board had been searching for a replacement for Musk.

CHIP SHOT BACKFIRES: Nvidia CEO Jensen Huang says U.S. chip curbs on China have “failed,” costing the company billions while helping Chinese rivals catch up. Loopholes, stockpile and policy uncertainty have sparked a local AI boom in China, pushing Nvidia’s local market share down from 95% to 50%. Nvidia is set to report earnings next week.

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