Wall Street Weekahead: Tariffs could lead to markdowns in retail shares

NEW YORK - U.S. retailer stocks have moved from buoyant to bruised this year and the intensification of the U.S.-China trade war makes them especially vulnerable because consumer products would be targeted in the next round of threatened tariff increases.

Although it reported better-than-expected earnings, Macy’s shares slipped this week after it said the latest tariffs on Chinese imports by Washington are hitting its furniture business and warned that additional tariffs would affect clothing and other areas. The S&P 1500 Retailing index had been outperforming the benchmark S&P 500 this year as the market bounced back from a December selloff and optimism grew that the United States and China may soon come to a trade agreement.

Retailers have been struggling from the tightening grip of Amazon.com, and, more recently, investors have worried that wage pressures could become a bigger risk for the group. That has eased worries that the S&P 500 would have a “profit recession” of at least two straight quarters of declining earnings this year, but the latest developments on the trade front only further cloud the earnings outlook for retailers and other companies.

“We see food and discount retailers as largely insulated from the recent tariff increase to 25% on $200 billion of Chinese imports,” they wrote in a note on Thursday.

keyword in this headline - retail shares, not retail prices in stores

realDonaldTrump Short term pain for long term gain? ICALL BS!!!!

Oh those poor poor shareholders.

yes

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