It’s been weeks in the making, but for the first time in history, the Dow Jones Industrial Average today topped 20,000.
Experts say the milestone was bolstered by President Donald Trump’s decision to sign several executive orders Tuesday as well as his promises to slash corporate taxes, cut regulations and boost domestic growth.
And while Wall Street is in celebration mode — bank stocks have been among the biggest gainers following Trump’s victory — retail analysts are on the fence about whether the Dow’s big jump is of particular significance for fashion brands.
“I don’t think it’s particularly [significant] — it’s not going to make anybody’s [underlying] business better because the stock market goes up,” said Susquehanna Financial Group LLLP analyst Sam Poser. “Nike’s business isn’t better today because the Dow hit 20,000 — no other brand’s business is.”
Still, Poser acknowledges that with Wall Street momentum at an all-time high, there could be a trickle-down effect on consumer sentiment.
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“If this gives people an emotional lift, then that could be [beneficial],” Poser said.
But, for now, footwear and apparel retailers are battling a host of negative trends that have very little to do with stocks — or the economy, for that matter.
Several macroeconomic factors — including a low unemployment rate and cheap gas prices — have created a relatively healthy consumer backdrop during the past two years. Yet consumers have resisted the urge to spend on product, opting instead for experiential buys.
“The way consumers get and use information regarding brands and stores is so much different than it was years ago,” Poser said. “So if brands aren’t speaking to their consumers properly, then other companies that speak to consumers better [are able to] do better.”
He added, “And that has nothing to do with the stock market.”