Retail stocks took a hit in trading late last week after GDP numbers came in lower than expected and concerns reverberated about a potential trade war with Mexico as President Trump battles it out with Mexico over covering the cost of his wall.
In trading Friday (Jan. 27), a slew of retail stocks declined, including Stein Mart, Express, Guess, Nordstrom, Gap, L Brands, Francesca’s, Abercrombie & Fitch, JCPenney, Kohl’s and a host of others.
For the fourth quarter, gross domestic product expanded at a rate of 1.9 percent from October to December, which is much lower than the 3.5 percent growth rate lodged in the third quarter. It’s also below the 2.2 percent growth economists polled by MarketWatch were looking for. For the full year, growth was just 1.6 percent, which is lower than the 2.6 percent growth rate seen in 2015. According to MarketWatch, it’s the weakest performance since 2011. In 2005, the U.S. surpassed 3 percent growth.
While President Trump has said he will get the growth up in the U.S. economy by reducing regulation and increasing government spending on infrastructure improvements, economists said it will be a period of time before the country benefits from any of that. Most economists, according to MarketWatch, expect the economy to grow at a rate of about 2 percent in 2017 or a little faster than that.
“The U.S. economy was in decent, if unspectacular, shape at the end of 2016,” Gus Faucher, senior economist at PNC Financial Services, said in the report. MarketWatch noted that what is still up in the air is if Trump’s tougher stance on trade will hurt his pro-growth policies at home. Trump, for example, has threatened to place a tax on imports from Mexico if the country doesn’t pay for the wall.