Walmart (WMT) reported better than expected earnings this morning and upped its guidance for the full year. The stock, which I own, is up by about 7% as I’m writing this.

My overall take is that this is good news/bad news for the US economy. Good news, in that WMT is doing well, bad news in that we don’t appear to be seeing the upcycle rotation away from discounters toward more expensive retailers that typically happens when the economy gathers steam.

Part of the good news is WMT-specific, I think. Its online business is strong, as is ordering groceries for store pickup. My impression (a potentially dangerous thing to base an investment on) is that they’re a lot nicer–cleaner, brighter, friendlier employees–than I remember from, say, ten years ago. So it is arguably able to hold onto customers who traded down during the pandemic.

At the same time, we are beginning to see a slowdown in industrial capacity additions in the US. Firms seem to have decided to wait for the election results in November before committing more capital here. In the dystopia Trump has sketched out–The Handmaid’s Tale meets 1990s Japan, with a dose of apartheid–it would likely be much better to have operations in Canada or Mexico. Presumably, too, the government incentives for domestic investment now in place would be ended.