South Korea Assures U.S. on Trade Deal Commitments Amid Tariff Concerns 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
Oil Prices Slip as U.S.–Iran Talks Ease Supply Disruption Fears 
Thailand Inflation Remains Negative for 10th Straight Month in January 
Gold and Silver Prices Rebound After Volatile Week Triggered by Fed Nomination 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
Asian Stocks Slip as Tech Rout Deepens, Japan Steadies Ahead of Election 
Asian Markets Slip as AI Spending Fears Shake Tech, Wall Street Futures Rebound 
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
Trump Endorses Japan’s Sanae Takaichi Ahead of Crucial Election Amid Market and China Tensions 
Oil Prices Slide on US-Iran Talks, Dollar Strength and Profit-Taking Pressure 
Vietnam’s Trade Surplus With US Jumps as Exports Surge and China Imports Hit Record 
South Korea’s Weak Won Struggles as Retail Investors Pour Money Into U.S. Stocks 
Gold Prices Slide Below $5,000 as Strong Dollar and Central Bank Outlook Weigh on Metals 
Global Markets Slide as AI, Crypto, and Precious Metals Face Heightened Volatility 
U.S. Stock Futures Edge Higher as Tech Rout Deepens on AI Concerns and Earnings 
Japan Economy Poised for Q4 2025 Growth as Investment and Consumption Hold Firm 
Morgan Stanley analysts indicate that consumer optimism seems to be on the rise as the US presidential election approaches. The AlphaWise US Consumer Pulse Survey revealed Americans have a "significantly more constructive" six-month outlook since May, while the University of Michigan’s sentiment index increased for the second month in a row in September. This suggests a "more upbeat consumer," according to the analysts.
Stable Earnings Outlook for Textile Retailers
Although textile retailers face headwinds in the latter half of 2024, Morgan Stanley sees limited risk to Wall Street’s earnings estimates. Historically, "Softline" stocks — which include apparel and textile companies — have fared well during election seasons. This could be due to their stronger fundamentals compared to market concerns during this period.
Mall Foot Traffic May Not Signal a Downturn
While foot traffic in malls typically slows from September to December in election years, this does not necessarily indicate a "fundamental deterioration" for textile retailers’ returns. The analysts advise caution in interpreting high-frequency demand data, as it may overstate the potential impact on the sector's fundamentals.
Impact of Election on Corporate Tax Policies
The analysts' report coincides with a tight race between Democratic candidate Kamala Harris and Republican Donald Trump, with national polls showing a slight lead for Harris but tight contests in swing states. Strategists highlight that both candidates' tax plans could significantly affect corporate returns. Trump proposes corporate tax cuts that could boost 2025 profits by approximately 5%, while Harris’s plan to increase taxes may reduce earnings by about 3%.
Textile Firms’ Exposure to Tax Changes
According to the report, Burlington Stores Inc. (NYSE:BURL), Foot Locker Inc. (NYSE:FL), and Nordstrom Inc. (NYSE:JWN) are among the textile retailers most affected by potential changes to the corporate tax rate. In contrast, companies such as Lululemon Athletica Inc. (NASDAQ:LULU), Nike Inc. (NYSE:NKE), and Skechers USA Inc. (NYSE:SKX) are expected to be less impacted by such changes.
