Sometimes a little lipstick goes a long way

Summary

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Marketplace Morning Report – "Sometimes a little lipstick goes a long way"

Date: January 19, 2026
Host: Sabri Benishore (in for David Brancaccio)

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Episode Overview

This concise episode of Marketplace Morning Report, hosted by Sabri Benishore, delivers essential business and economic news to start your day. Today's highlights:

• President Trump's proposed tariffs on eight European countries tied to his interest in Greenland
• Analysis of the economic phenomenon called the "lipstick effect," expected to be prominent in 2026
• Global markets roundup, including Hong Kong and Japan
• A BBC report on the influx of global wealth into the United Arab Emirates, sparking a luxury real estate boom

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Key Discussion Points & Insights

1. Trump’s Tariff Threats Tied to Greenland (00:54 – 02:32)

• Context: President Trump has threatened new tariffs on goods from eight European nations opposing his effort to acquire Greenland.
• Effects of Existing Tariffs:
  • Expert Insight: Julia Coronado, President of Macro Policy Perspectives, states tariffs have bumped up consumer inflation and dampened the labor market, as companies hesitated to hire (01:28).
  • Quote:

    "We got some tariff boost to consumer inflation, but we also saw it take a bite out of the labor market...companies got really cautious about hiring."
    – Julia Coronado (01:28)

• Potential Consequences of New Tariffs:
  • Higher prices for U.S. consumers on European goods.
  • Companies face increasing cost pressures and heightened uncertainty from geopolitical conflict, making investments and hiring more difficult.
  • Quote:

    "It's not just the tariffs. It's the global conflict, the geopolitical conflict and the uncertainty...that could, you know, make it harder for companies to make decisions about investing and hiring people."
    – Julia Coronado (02:12)

2. The Lipstick Effect: Micro Splurges Amid Economic Stress (02:33 – 04:13)

• Concept: When under financial strain, consumers may cut back broadly but still indulge in small, affordable luxuries—known as the “lipstick effect.”
• 2026 Trend: Analysts predict a surge in small luxury purchases this year.
• Retailer Strategies: Personalized accessories (shoe charms, statement necklaces) offer emotional uplift and are cost-effective for retailers to market.
  • Quote:

    "Accessories like shoe charms and statement necklaces give consumers a sense of rebellion against a bleaker economic backdrop."
    – Jess Ramirez, Consumer Collective (02:50)

• Low-Income Consumers: For those left out of broader economic gains, micro-luxuries provide a sense of participation and novelty.
  • Quote:

    "Buying a small luxury can make you feel a little bit better about an economy that you feel increasingly left out of."
    – Sophia Begg, Morning Consult (03:38)

  • Accessories breathe new life into existing wardrobes, enhancing the feeling of newness without major expense.

    "You take an outfit that might have been boring and then you add a cool necklace and it feels like the whole outfit is new."
    – Uma Carmarker, UC San Diego (03:43)

• Wider Examples: Not limited to fashion—everyday items like gum or specialty chocolate count as micro-splurges.

3. Global Markets Update (04:13 – 04:40)

• Hong Kong's Hang Seng and Japan’s Nikkei both closed down; U.S. stock and bond markets closed in observance of Martin Luther King Day.

4. UAE: A Magnet for the World’s Wealthy (05:41 – 08:17)

• Migration of Millionaires: UAE, particularly Dubai, is attracting global high-net-worth individuals seeking business opportunities, safety, tax advantages, and an aspirational lifestyle.
  • Notable Moment: Lawrence Oakley, British boxer turned Dubai café owner, shares:

    "There was nothing but help provided, whether that's the government, whether that's locals, because it's a growing market and a growing economy. Everyone's pushing in that direction of growth and prosperity. And then you walk around, it's clean all the time, it's extremely safe."
    – Lawrence Oakley (06:12)

• Market Impact: Demand for luxury properties surges; residential towers sell out pre-completion. UBS reports UAE’s millionaire population rose by 13,000 in 2024.
• Affordability Challenge: As luxury housing dominates new construction, most locals find prices increasingly out of reach.
  • Quote:

    "At the moment, our estimates suggest that 92% of housing that is planned will be priced at over Dh1,000 per square foot."
    – Faisal Durrani, Knight Frank (07:44)

  • Benchmark for affordable housing: $270 per square foot.
    • "If we want to grow the population by circa 2 million people in the next 15 years, it is vital that ensure that we provide housing at all price points."
      – Faisal Durrani (08:06)
• Takeaway: Dubai’s luxury market is flourishing, but city leadership faces a critical need to plan for inclusion as population targets rise.

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Notable Quotes

• “We got some tariff boost to consumer inflation, but we also saw it take a bite out of the labor market... companies got really cautious about hiring.” — Julia Coronado (01:28)
• "Accessories like shoe charms and statement necklaces give consumers a sense of rebellion against a bleaker economic backdrop." — Jess Ramirez (02:50)
• "Buying a small luxury can make you feel a little bit better about an economy that you feel increasingly left out of." — Sophia Begg (03:38)
• “There was nothing but help provided, whether that's the government, whether that's locals, because it's a growing market and a growing economy.” — Lawrence Oakley (06:12)
• "Our estimates suggest that 92% of housing that is planned will be priced at over Dh1,000 per square foot.” — Faisal Durrani (07:44)

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Timestamps for Major Segments

• Tariff Threats & Economic Impact: 00:54 – 02:32
• The Lipstick Effect & Small Luxuries: 02:33 – 04:13
• Market Numbers: 04:13 – 04:40
• UAE Wealth Boom/BBC Segment: 05:41 – 08:17

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Tone & Language

• The episode balances straightforward business reporting with accessible analogies and real-world context, using expert interviews and crisp, clear language.
• Quotes from analysts provide direct insight and maintain the slightly conversational tone typical of Marketplace.

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This summary captures the essential themes and takeaways for listeners who want a quick yet thorough grasp of the episode's business and economic stories, complete with expert analysis and real-world implications.

Transcript

[Marketplace Host]

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[Sabri Benishore]

President Trump's desired conquest of Greenland is taking an economic turn from Marketplace. I'm Sabri Ben, ashore in for David Brancaccio. Over the weekend, President Trump threatened new tariffs on goods from eight European countries because they are opposed to his desired takeover of Greenland, which is a Danish territory. Julia Coronado is here to talk about it. She's founder and president of Macro Policy Perspectives. Hi, Julia. So as a baseline, remind us what all the tariffs we already have have done economically.

[Julia Coronado]

So we got some tariff boost to consumer inflation, but we also saw it take a bite out of the labor market. So how did companies react? Faced with the turbulence and the pressure on costs, they got really cautious about hiring. So we did see the, the imprint on the economy a little bit differently than we had expected.

[Sabri Benishore]

Can we handle more tariffs at this point? I mean, what would these do for, for us, for the economy?

[Julia Coronado]

Well, of course, they raise prices on anything we buy from Europe. And that just adds to the pressures companies are feeling on costs. Probably the bigger impact is they just. It's not just the tariffs. It's the global conflict, the geopolitical conflict and the uncertainty that comes with that that could, you know, make it harder for companies to make decisions about investing and hiring people.

[Sabri Benishore]

Julia Coronado is founder and president of Macro Policy Perspectives. Thank you so much.

[Julia Coronado]

My pleasure.

[Sabri Benishore]

When people are stressed out economically, they may cut back, they may save. They may also micro splurge on small, comforting luxuries. This is what's known in economics as the lipstick effect, and it is expected to be big in 2026. Marketplace's Elizabeth Troval has that.

[Elizabeth Troval]

Accessories like shoe charms and statement necklaces give consumers a sense of rebellion against a bleaker economic backdrop, says Jess Ramirez, analyst with the Consumer Collective.

[Various Economic Analysts]

If you think of running outfits, you know, you have your vest, you have socks, you know, and it could be colored or it'll be something that's going to, you know, make your feet a bit drier as you're running.

[Elizabeth Troval]

These are often cheaper purchases that add personalization, and retailers can cash in at.

[Various Economic Analysts]

A time where, you know, the consumer's being so laser focused and we are seeing less items in the basket. This is going to be key in terms of price and how else you can have the consumer buy more than just one item.

[Elizabeth Troval]

And in an economy that favors higher earners, Sophia Begg with Morning Consult says, for low income consumers, buying a small.

[Various Economic Analysts]

Luxury can make you feel a little.

[Elizabeth Troval]

Bit better about an economy that you.

[Various Economic Analysts]

Feel increasingly left out of.

[Elizabeth Troval]

These indulgent purchases also add novelty, says Uma Carmarker with UC San Diego.

[Various Economic Analysts]

In addition to treating yourself in the moment, it's also reviving things. And that's where accessories are fantastic, right? You take an outfit that might have been boring and then you add a cool necklace and it feels like the whole outfit is new.

[Elizabeth Troval]

And it's not just apparel. Everyday luxuries can include gum at the grocery checkout or a fancy chocolate. I'm Elizabeth Troval for marketplace.

[Sabri Benishore]

All right, let's do the numbers. Hong Kong's Hang Seng closed down a percent Japan's Nikkei closed down 7 10%. U.S. stocks and bond markets are closed today in observance of Martin Luther King Day.

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[Sabri Benishore]

In recent years, the United Arab Emirates has reportedly emerged as the top destination for the world's most wealthy. The BBC's Samir Hashmi looks at what's driving the rich to the Gulf and how their arrival is fueling a boom in luxury real estate.

[Samir Hashmi]

It's a busy evening at Tia Cafe, run by British boxer Lawrence Oakley. He moved to Dubai three years ago, joining thousands of millionaires now calling the UAE home.

[Lawrence Oakley]

There's a real boom here and a real boost. You know, where you talk about business and stuff like that. For example, we're sitting here now in my restaurant that me and my manager built and there was nothing but help provided, whether that's the government, whether that's locals, because it's a growing market and a growing economy. Everyone's pushing in that direction of growth and prosperity. And then you walk around, it's clean all the time, it's extremely safe.

[Samir Hashmi]

Oakley is part of a broader global shift of wealth towards the Gulf. According to the UBS wealth report, the UAE's millionaire population grew by nearly 13,000 in 2024, one of the fastest increases anywhere in the world. Dubai's tax friendly environment, safety and lifestyle have made it a magnet for the well being. And the number of family offices and wealth investment firms operating here has almost doubled in the past two years. I'm at Dubai Harbour where multimillion dollar yachts line the waterfront. And just across the road, nine luxury residential towers are under construction. But they are already sold out even before completion. It's a snapshot of how demand from the world's wealthy is reshaping the city's skyline. But with demand surging, some analysts warn that Dubai's housing market could face challenges. Faisal Durrani, partner and head of research for the Middle east and North Africa at Knight Frank, says much of the new housing being built is already out of reach for many residents.

[Marketplace Host]

The government has plans to increase Dubai's population to 5.8 million by 2040. At the moment, our estimates suggest that 92% of housing that is planned will be priced at over Dh1,000 per square foot.

[Samir Hashmi]

That's just over $270 per square foot, the benchmark that's used to define affordable housing.

[Marketplace Host]

If we want to grow the population by circa 2 million people in the next 15 years, it is vital that ensure that we provide housing at all price points.

[Samir Hashmi]

Still, luxury homes are expected to keep growing, helped by the fact that Dubai's high end properties remain far cheaper than those in London or New York. In Dubai, I'm the BBC Sameer Hashmi for Marketplace.

[Sabri Benishore]

In New York, I'm Sabree Benishore with the Marketplace Morning Report. From APM American Public Media. Ready to make the most of your money? Sign up to receive weekly tips from Marketplace designed to help you make smarter financial decisions. Plus, you'll also be the first to know about exclusive Marketplace merchandise and local events. Text Marketplace to 80568 to sign up.