The reelection of President Obama freed Wall Street to worry in earnest about the looming fiscal cliff as well as the euro zone crisis and the general global economic malaise.
The Dow Jones Industrial Average on Wednesday sank back below 13,000, falling 2.4 percent, or 312.95 points, to 12,932.73 as the S&P 500 Retailing Industry Group fared somewhat better, declining 1.5 percent, or 9.82 points, to 649.15.
Among the fashion and related companies getting hit the hardest were Tumi Holdings Inc., down 5.1 percent to $21.75; The Bon-Ton Stores Inc., 5 percent to $11.97; Elizabeth Arden Inc., 4.7 percent to $46.61; Tiffany & Co., 3.7 percent to $62.92, and Abercrombie & Fitch Co., 3.5 percent to $32.84.
Obama logged a decisive win in the electoral college, but still faces a divided legislative branch. Together the two sides will face automatic tax increases and spending cuts at the end of this year — what Federal Reserve chairman Ben S. Bernanke dubbed the “fiscal cliff.” Should the taxes kick in without modification, many see dire consequences for the U.S. economy, which is already limping along and being propped up by Fed debt purchases and ultralow interest rates.
“The political landscape has changed little after the elections,” said Nigel Gault, IHS Global Insight’s chief U.S. economist. “Some uncertainties, over health care reform and the Federal Reserve, have been cleared up by President Obama’s reelection. But crucial uncertainties over fiscal policy remain just as severe as before.”
Gault noted the Obama victory means his health care program will stay in place and that there won’t be big changes at the Fed.
“But the key uncertainties over the future of fiscal policy remain in place,” he said. “Divided government, as before, could be a recipe for complete gridlock.”
Markets were also down in Europe, where investors were closely watching the U.S. election.
Milan’s FTSE MIB fell 2.5 percent to 15,291.78, as Frankfurt’s DAX declined 2 percent to 7,232.83, Paris’ CAC 40 dropped 2 percent to 3,409.59, and London’s FTSE 100 retreated 1.6 percent to 5,791.63.
The decliners included Burberry Group, down 2.8 percent to 12.17 pounds, or $19.45 at current exchange; LVMH Moët Hennessy Louis Vuitton, 2.4 percent to 125.90 euros, or $160.73; Marks and Spencer Group plc, down 2 percent to 3.91 pounds, or $6.25, and PPR, 1.8 percent to 134.20 euros, or $171.33.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)