What Happened?
A number of stocks fell in the afternoon session after stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for all countries. This reminded markets that the global trade environment remained volatile, limiting the potential for sustained gains.
Also, President Trump said he was willing to accept pain in the short term, and was aware his policies could cause a recession, but he remained more mindful of a more severe case of economic depression (higher unemployment and prolonged downturn). For investors, this suggested that the administration could prioritize long-term structural shifts over near-term economic stability, further increasing policy-driven risk in the markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Engineered Components and Systems company NN (NASDAQ:NNBR) fell 10%. Is now the time to buy NN? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Magnite (NASDAQ:MGNI) fell 10.5%. Is now the time to buy Magnite? Access our full analysis report here, it’s free.
- Apparel Retailer company Victoria's Secret (NYSE:VSCO) fell 13.3%. Is now the time to buy Victoria's Secret? Access our full analysis report here, it’s free.
- Wireless, Cable and Satellite company Altice (NYSE:ATUS) fell 8.9%. Is now the time to buy Altice? Access our full analysis report here, it’s free.
- Specialized Consumer Services company 1-800-FLOWERS (NASDAQ:FLWS) fell 7.4%. Is now the time to buy 1-800-FLOWERS? Access our full analysis report here, it’s free.
Zooming In On Victoria's Secret (VSCO)
Victoria's Secret’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. But moves this big are rare even for Victoria's Secret and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 21.8% on the news that the company announced the appointment of Hillary Super as Chief Executive Officer and Board Member, effective September 9, 2024. Most recently, Super served as CEO of Savage X Fenty. Prior to that, she was Global CEO of Anthropologie Group, an Urban Outfitters Company.
Separately, the company provided preliminary guidance for the Q2 2024 quarter. Management expected net sales, adjusted operating income, and adjusted diluted earnings per share to "fall within or exceed the previously issued guidance range." This suggested there would be no major surprises when the company officially reports earnings for the second quarter.
Victoria's Secret is down 57.5% since the beginning of the year, and at $17.19 per share, it is trading 64.7% below its 52-week high of $48.71 from December 2024. Investors who bought $1,000 worth of Victoria's Secret’s shares at the IPO in July 2021 would now be looking at an investment worth $404.48.
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