Breakingviews – Corona Capital: Fiscal stimulus, Fitness riches

NEW YORK/LONDON/MILAN/MELBOURNE (Reuters Breakingviews) – Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.

U.S. Federal Reserve Chairman Jerome Powell speaks to reporters after the Federal Reserve cut interest rates in an emergency move designed to shield the world’s largest economy from the impact of the coronavirus, during a news conference in Washington, U.S., March 3, 2020. REUTERS/Kevin Lamarque

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– Central bankers

– Icon Health & Fitness

FISCAL KNUCKLE-RAPPING. Federal Reserve Chair Jerome Powell delivered a mild rebuke to squabbling Washington lawmakers on Tuesday. While praising the fiscal stimulus as Covid-19 plunged the United States into recession, he effectively said they needed to do more to avoid a “tragic” reversal of progress. Listen up, House Speaker Nancy Pelosi, Senate Leader Mitch McConnell and Treasury Secretary Steven Mnuchin.

One way Powell expressed this in Fedspeak was by saying “the risks of policy intervention are still asymmetric.” At least he clarified that, adding the dangers of overdoing stimulus seem smaller than those from providing too little support. It’s a theme echoed the same day by European Central Bank executive board member Philip Lane and reinforced by fears of a resurgence in coronavirus infections. U.S. President Donald Trump says he’s over the worst of the disease, but the global economy isn’t. (By Richard Beales)

“MIRROR, MIRROR…” Could it be time to cycle out of stationary bikes and into treadmills? Icon Health & Fitness, the parent company of NordicTrack, has raised $200 million from private equity investors, valuing the firm at more than $7 billion, according to Bloomberg. It joins a wave of at-home workout outfits including Peloton Interactive, Lululemon-owned Mirror and privately held Zwift that are basking in extraordinary valuations thanks to a booming home gym market due to Covid-19.

Companies like Icon, which makes fitness equipment and is expanding an online-workout app, should seize the moment. At-home gym equipment is more needed than ever. Cash injections not only ramp up production but bolster marketing tactics that lure in subscribers.

The trouble is there are too many companies chasing each aspiring athlete. Just as hope triumphs over experience when setting health and fitness targets, those investing in workout companies might find reality falls short of their lofty goals, too. (By Lauren Silva Laughlin)

TAKEAWAY. The Great Depression popularized layaway plans, where shoppers paid for items in installments and then took them home when paid in full. The pandemic is universalizing the reverse – and Macy’s wants in. The $2 billion retailer is joining the likes of Silver Lake and Snoop Dogg and investing in Klarna, the Swedish payments group, and under a five-year partnership, customers can pay in four interest-free installments after purchase.

Nearly a century may separate the two financing inventions, but the consumer impetus is the same. Consumers’ wallets are shrinking, and they are looking to spread out payments. Likewise, retailers are desperate for sales, and buy-now-pay-later plans do that in exchange for giving away a