The potential impact of trade disputes may be a key issue for the week of May 20, when Home Depot (HD.N), Nordstrom (JWN.N), Kohl's (KSS.N) and Target (TGT.N) will announce their results.
Although Macy's (M.N) reported stronger-than-expected earnings, its share price fell in the week of May 17. The company had previously said that the latest round of tariffs imposed by the United States on Chinese imports had hit its furniture business and warned that further tariffs would affect business sectors such as clothing.
Last weekend, after the United States raised tariffs on $200 billion of Chinese imports to the United States to 25%, President Trump ordered trade officials to initiate procedures to impose tariffs on all other goods imported from China, which would threaten tariffs on Chinese goods worth about $300 billion.
The categories of products likely to face US tariffs cover almost all consumer goods, such as clothing, footwear, lawnmower, etc.
This year, the S& P 500 retail index has outperformed the S& P 500 as the stock market rebounded from its December decline and there has been growing optimism that the United States and China may soon reach a trade agreement.
But in recent weeks, with trade optimism fading, the index has fallen more than the broader market. Since April 30, the retail stock index has fallen by about 3.4%, while the S&P 500. SPX has fallen by 2.5% over the same period.
"It has had an impact. The question is how much impact it will have. Coupled with the slump in sales, confidence in the retail sector is now at a disadvantage, "said Michael James, general manager of stock trading at Wedbush Securities in Los Angeles.
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