The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Sebastian Pellejero
NEW YORK, April 22 (Reuters Breakingviews) - There are many reasons to dump U.S. stocks, but even in bad markets there are good opportunities. In these trade-ravaged times, some companies have positioned themselves, relatively speaking, to ride out the turmoil, for a while at least.
President Donald Trump’s aggressive approach to tariffs is rattling business confidence. American consumers are also now as pessimistic as they were during the peak of the pandemic, according to survey data from the University of Michigan. A record number of fund managers say they plan to slash their U.S. shareholdings, Bank of America strategists report. The S&P 500 Index .SPX is down 11% since the start of 2025.
This season of corporate financial results is further complicating already fuzzy and falling outlooks, too. Wireless provider Verizon Communications VZ.N and industrial conglomerate Danaher DHR.N both told investors on Tuesday that they intend to pass higher import costs onto customers. During the first quarter, analysts slashed their annual earnings per share estimates by more than the 15-year average, according to research outfit FactSet.
A few CEOs have adjusted accordingly. Birkenstock BIRK.N boss Oliver Reichert already imported 90% of the sandal-maker’s annual U.S. inventory, all of which is produced in Europe. About 46% of its $1.8 billion in 2024 sales were in the United States, meaning it would take just a 1% price hike to offset the cost of a 20% tariff on the remaining 10%, or roughly $80 million, of supply. The Federal Reserve Bank of Atlanta, meanwhile, projects 4% growth in personal spending prices for the second half of the year.
Peers facing lower stockpiles and steeper tariffs will have to charge more or eat the cost. Crocs CROX.O, for example, produces nearly half its foam clogs in Vietnam, which will soon be hit with a 45% levy. The company’s latest inventory tally fell from a year earlier.
Others have demand on their side. Cashmere merchant Brunello Cucinelli BCU.MI last week reported 11% first-quarter top-line growth at current exchange rates, outshining luxury rivals. To counter the impact from tariffs, the brand said it would raise U.S. prices 3% to 4%, keeping them 20% higher than in Europe and Asia, per Morningstar analysts. Shoppers ready to pay $1,250 for a linen T-shirt probably won’t notice an extra $40 on the bill.
At some point, even these advantages will start to erode if stiff U.S. tariffs remain in place or companies continue to be whipsawed by White House whims. For now, though, some CEOs are a step ahead.
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CONTEXT NEWS
Sweeping U.S. tariffs, including 10% on all imports and up to 245% on Chinese goods have erased more than $6 trillion in global stock market value through April 21. Economists warned that long-term GDP and wages could fall more than 5%, according to the Penn Wharton Budget Model report on April 10.
Trade turmoil sends stocks scrambling https://reut.rs/3GxBuUJ
(Editing by Jonathan Guilford, Jeffrey Goldfarb and Pranav Kiran)
((For previous columns by the author, Reuters customers can click on PELLEJERO/ Sebastian.Pellejero@thomsonreuters.com))
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