In a raincoat, Joe looks wonderful! (5)
I believe the answer is:
magic
'wonderful' is the definition.
(I've seen this before)
'in a raincoat joe' is the wordplay.
'in' means one lot of letters goes inside another.
'a raincoat' becomes 'mac' (macintosh is a type of raincoat).
'joe' becomes 'GI' (GI Joe).
'mac' placed around 'gi' is 'MAGIC'.
'looks' acts as a link.
I am not very happy about this link. It may belong to another bit of the clue.
Can you help me to learn more?
(Other definitions for magic that I've seen before include "Unexpectedly produce" , "Conjuror's art" , "Great" , "Enchanting quality" , "Supernatural power" .)