Wall Street shot up after the U.S. and China agreed to bring the temperature down on their trade war — and the import-dependent fashion and retail crowd rode the stock roller coaster higher.
After high-level weekend talks in Switzerland, the U.S. cut its tariffs on Chinese goods to 30 percent from 145 percent, while China went to 10 percent from 145 percent in return.
For at least the next 90 days, that moves the trade situation from effective-embargo to a big, but much more workable increase in prices compared to before President Trump kicked off the tit-for-tat tariff battle.
Walmart Inc. — the world’s largest retailer and one of the companies that seemed to be best situated to navigate the tradewinds — was an outlier in the market on Monday, ending essentially flat at $96.75.
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Investors instead rushed into other companies that had been seen as more at risk.
A WWD market basket of 69 U.S. fashion and related retail and beauty companies gained $35.4 billion in market capitalization for the day after being buffeted by uncertainty for weeks.
The biggest gainers included Nike Inc., which was up 7.4 percent, adding $6.3 billion to its market cap; TJX Cos. Inc., up by 2.7 percent, or $3.8 billion, and Lululemon Athletica Inc., ahead by 8.7 percent, or $2.9 billion.
Some smaller companies moved up much faster, including Rent the Runway Inc., which was up 22.1 percent, and Stitch Fix Inc., which gained 17.2 percent.
Despite the sigh of relief from investors, the situation is still far from settled and a cloud of uncertainty hangs over the industry.
Steve Lamar, president and chief executive officer of the American Apparel & Footwear Association, said: “The 90-day pause is welcome and may temporarily help unstick the effective trade embargo that has been in place with respect to U.S./China trade since April 9. Sadly, the residual 30 percent tariff, stacked on top of the existing Section 301 and ‘most favored nation’ tariffs, will still make for an expensive back-to-school and holiday season for most Americans.
“If freight rates spike due to the tariff-induced shipping disruptions — which will take months to unwind — we could see costs and prices creep up even further. What’s needed now is a long-term deal — not just with China but with all our trading partners — so we can predictably make long-term trade, investment and sourcing decisions,” Lamar said.
