Yen Near Lows as Markets Await Bank of Japan Rate Decision, Euro Slips After ECB Signals Caution 
U.S. Dollar Steadies Near October Lows as Rate Cut Expectations Keep Markets on Edge 
Japan Exports to U.S. Rebound in November as Tariff Impact Eases, Boosting BOJ Rate Hike Expectations 
Gold and Silver Prices Dip as Markets Await Key U.S. Economic Data 
Austan Goolsbee Signals Potential for More Fed Rate Cuts as Inflation Shows Improvement 
Asian Stocks Slide as AI Spending Fears and Global Central Bank Decisions Weigh on Markets 
Asian Stocks Edge Higher as Tech Recovers, U.S. Economic Uncertainty Caps Gains 
Singapore Growth Outlook Brightens for 2025 as Economists Flag AI and Geopolitical Risks 
Bank of Korea Downplays Liquidity’s Role in Weak Won and Housing Price Surge 
BoE Set to Cut Rates as UK Inflation Slows, but Further Easing Likely Limited 
Oil Prices Rebound as Trump Orders Blockade of Sanctioned Venezuelan Tankers 
U.S. Stock Futures Edge Higher as Micron Earnings Boost AI Sentiment Ahead of CPI Data 
Silver Prices Hit Record High as Safe-Haven Demand Surges Amid U.S. Economic Uncertainty 
U.S. Stock Futures Slip After CPI-Fueled Rally as Markets Weigh Economic Uncertainty 
Asian Markets Rebound as Tech Rally Lifts Wall Street, Investors Brace for BOJ Rate Hike 
Trump Orders Blockade of Sanctioned Oil Tankers, Raising Venezuela Tensions and Oil Prices 
Oil Prices Climb on Venezuela Blockade, Russia Sanctions Fears, and Supply Risks 
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.
