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The will-he, won’t-he on a proposed border-adjustment tax goes on. But this time, retail stocks are on the right side of the rumour mill.
On Friday, digital news organisation Axios reported that a top advisor to US President Donald Trump, Gary Cohn, has nixed the possibility that a border-adjustment tax — which would levy a tax on imports, from which exports would be exempted — be part of a proposed tax overhaul.
The White House has denied any differences between Mr Cohn and Mr Trump on the policy — nevertheless, stocks of retailers that depend heavily on imported goods to stock their shelves with cheap products breathed a sigh of relief, posting some of the biggest gains on the S&P 500.
Just a day earlier, Mr Trump made some of his most positive comments yet on the idea of a border tax in an interview with Reuters, sending many import-reliant retailers’ shares down.
That trend had largely reversed by Friday afternoon, following the Axios report, with the following stocks sitting near the top of the S&P 500′s gainers:
Nordstrom’s was up 6.4 per cent
Kohl’s up 5 per cent
L Brands up 4.3 per cent
Gap up 3.6 per cent
Best Buy up 2.6 per cent
Macy’s up 2.4 per cent
Urban Outfitters, Target and Hanesbrands all up 2.3 per cent
Wal-Mart up 1.6 per cent
The quick turnaround shows how sensitive stocks have become to the slightest crumbs of policy detail dropped from the Trump White House table, as markets continue their post-election bull run despite the fact that few specifics are available yet on some of the agenda items seen as most business-friendly, including infrastructure spending and corporate tax reform.
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