Markets slide following Trump's tariff plans

Dow was off 219, decliners over advancers better than 2-1 & NAZ gained 107.  The MLP index added 2 to 305 & the REIT index was off 1 to the 433s.  Junk bond funds crawled higher & Treasuries has some selling which increased yields after they plunged yesterday.  Oil rose fractionally to the high 69s tied to Israel-Hezbollah cease-fire hopes & gold recovered 11 to 2629.

Dow Jones Industrials

Pres-elect Trump said he would issue an exec order upon taking office to charge Mexico & Canada a 25% tariff on all products coming into the US, as well as additional tariff hikes on China over the flow of illegal immigrants & illicit drugs.   In a post, Trump, who takes office on Jan 20 2025, said thousands of people were "pouring through" Mexico & Canada "at levels never seen before."  "Right now a Caravan coming from Mexico, composed of thousands of people, seems to be unstoppable in its quest to come through our currently Open Border," he wrote.  "On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders."  "This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!" he added.  "Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem."  Dating back to his first administration, Trump has long pushed Mexico to be more proactive in preventing the flow of illegal immigrants & illicit drugs into the US.  "And until such time that they do, it is time for them to pay a very big price!" he added.  In a joint statement, Canada's Deputy Prime Minister, Chrystia Freeland, & Public Safety Minister Dominic LeBlanc said Canada & the US have "one of the strongest and closest relationships–particularly when it comes to trade and border security."  "Canada places the highest priority on border security and the integrity of our shared border. Our relationship today is balanced and mutually beneficial, particularly for American workers," they said.  "Today, Canada buys more from the United States than China, Japan, France, and the UK combined. Canada is essential to US domestic energy supply, and last year 60 percent of US crude oil imports originated in Canada."

Trump says he will issue executive order to charge Canada, Mexico 25% tariff on goods upon taking office

Abercrombie & Fitch (ANF) isn't giving up its crown anytime soon.  The apparel company issued strong holiday guidance after posting its 6th straight qtr of double-digit sales growth & another quarter of results that topped expectations.  The recent arrest of the company’s former CEO, Mike Jeffries, on charges of sex trafficking did not appear to affect results.  EPS was $2.50 compared with $1.83 a year earlier.  Sales rose to $1.2B, up 14% from $1.06B a year earlier.  For the all-important holiday shopping qtr, ANF is expecting sales growth of 5-7%, ahead of the 4.8% growth that had expected.  For the full year, the company is expecting sales to rise 14-15%, higher than the 12-13% range it previously anticipated.  That new outlook is higher than the 12.1% growth expected.  In a news release, CEO Fran Horowitz struck a positive note, leaving out the concerns she'd mentioned in the previous qtr about the “increasingly uncertain environment.”   “With broad-based growth across regions and brands, we continue to execute at a high level, leveraging our regional playbooks and operating model. Each of our regions grew double-digits in the quarter, with the Americas growing 14%, EMEA growing 15% and APAC growing 32%,” said Horowitz.  The Abercrombie & Hollister brands posted comparable sales growth of 11% & 21%, respectively.  She noted the strong performances lapped growth of 26% for Abercrombie & 7% for Hollister last year.  The stock dropped 6.99 (5%).

Abercrombie expects a strong holiday quarter as growth run continues

Best Buy (BBY) cut its full-year sales forecast & missed quarterly revenue expectations, as early holiday shopping & a fresh batch of iPhones & AI-enabled laptops weren’t enough to drive higher sales.  The consumer electronics retailer said it now expects full-year revenue of $41.1 - $41.5B, compared to prior guidance of $41.3 - 41.9B.  It expects full-year comparable sales to decline 2.5-3.5%, compared to its prior expectations of a 1.5-3% drop.  Comparable sales includes sales online & at stores open for at least 14 months.  CEO Corie Barry said the retailer saw “softer than expected sales,” particularly in Sep & Oct.  “We attribute this to a combination of overall ongoing macro uncertainty, customers waiting for deals and sales and distraction during the run up to the election, particularly in non-essential categories, [and] expected lower demand between sales events,” she said.  “But the impact was even steeper than we estimated.”  Barrie added that in recent weeks demand has picked up again as holiday sales gain momentum & election concerns ease.  For the holiday qtr, BBY has muted expectations.  The company expects comparable sales to be flat to a decline of 3% in its fiscal 4th qtr.  Barry said BBY is contending with a few challenging dynamics, including a holiday season that's 5 days shorter.  She said shoppers are responding to big deals & sales events.  Yet she expects the peak in sales during times like Black Friday & Cyber Monday to be higher, but the valleys before & after those to be lower.  In the 3-month period, EPS was $1.26 compared to $1.21, a year earlier.   Net sales fell to $9.45B from $9.76B in the year-ago qtr.  The stock fell 6.92 (7%).

Best Buy cuts full-year sales forecast due to softer demand for electronics

Stocks slid as investors weighed Pres-elect Trump's threat to impose fresh tariffs on China, Canada, & Mexico.  Markets were initially caught off guard by Trump's pledge to slap big tariffs on the US's biggest trading partners from his first day in office.  His comments fired up trade war fears & dented hopes that Treasury secretary nominee Scott Bessent could rein in any extreme moves by the new administration.