- House Freedom Caucus Chairman Mark Meadows suggested yesterday that Congress move ahead with tax reform without including a border adjustment tax.
- The striking public stance from Meadows could be enough to tip the scale against the proposal if other members of the Freeedom Caucus follow suit. The threat of a border adjustment tax has lingered over certain retailers since the U.S. election, and in some cases held share prices back.
- Though it's unclear if the statement by Meadows was even partially behind yesterday strong retail rally (Target +4.2%, Dollar General +2.2%, Under Armour +3.4%, VF Corp +3.2%, Hanesbrands +3.6%, Iconix Brand Group +4.6%, Gap +2.4%), there's no question that certain industries will benefit if the wildcard is removed, especially in the apparel and automobile sectors.
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RHS, RETL, FXG, FDIS, FSTA, IYK, FXD, PEJ, RCD, UGE, PMR, SZK, FTXD, CNSF, JHMS, CNDF, JHMC.
- Related apparel/automobile stocks: KATE, LULU, PVH, VNCE, CRI, UAA, HBI, VFC, COLM, GIL, SQBG, JCP, KSS, DDS, M, JWN, ARO, AEO, ANF, TLYS, ZUMZ, EXPR, BKE, GIII, SQBG, HBI, VRA, ICON, SHOO, PERY, DXLG, BONT, GES, URBN, RL,GIL, NKE, OXM, HBI, VNCE, PERY, ICON, FL, OTCPK:NSANY, TM, HMC, OTCPK:BMWYY, OTCPK:DDAIF.
- Now read: Macy's: Investor Meeting News Wasn't All Bad
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