Like the Four Horseman of the Apocalypse, the financial crisis in Greece, economic woes in China, a strong dollar and the possibility of an interest rate hike have pummeled fashion apparel, beauty, accessories and retail stocks over the past three months.

The WWD Global Stock Tracker is down 2 percent to 111.87 with 67 of the 100 components showing declines and 33 issues that have advanced. And the consumer and retail is down again today over concerns of a rate hike as well as a global economic slowdown.

Despite economists and analysts noting that the short-term impact of the Greek financial crisis is not as bad as first anticipated, stocks retreated on every woeful headline. In China — as previously noted in WWD — the Chinese luxury consumer is expected to continue their spending spree even as China devalued its currency. Regarding the strong dollar, investor sentiment is accurate. A robust dollar impacts the top and bottom line for many multinational companies.

But when it comes to a possible hike in interest rates, why would stocks be punished? After all, the Federal Reserve raising rates is a reflection of a strong economy. Well, the short answer is that higher rates translates into higher costs for companies. And consumers would face higher bank rates and fees, which might impact overall consumer spending. Also, raising interest rates now could bolster the strength of the dollar even more.

Economists are split on the imminence of a rate hike. Half say the fundamentals are strong — from a recovering labor market to increases in disposable income. So a hike is good medicine for an economy that has recovered — like a booster shot. The other half of economists are noting that real wages remain stagnant and inflation is low. And then there’s consumer spending to consider, which is up about 2.9 percent. Then again, inventories are swelling — especially at retail.

So what’s Janet Yellen, chair of the board of governors of the Federal Reserve System, to do?

Earlier this week, Yellen’s Federal Open Market Committee released its minutes from its July meeting along with a statement. The committee said in the statement that “economic activity has been expanding moderately in recent months. Growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft. The labor market continued to improve, with solid job gains and declining unemployment.”

The statement went on to note that inflation continued to “run below the Committee’s longer-run objective, partly reflecting earlier declines in energy prices and decreasing prices of nonenergy imports.”

The committee said various market-based measures of inflation compensation are low while surveys on the long-term outlook on inflation is stable. As a result, the committee said it will take a “balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent” in deciding on the rate hike, which is expected at the FOMC’s next two-day meeting starting Sept. 16. In the meantime, gold prices have jumped up — a possible sign of a rate hike, but oil prices remain low (which, by the way, helps apparel companies).

And low fuel costs is a boost to consumer spending, which the Fed said its in minutes “appeared to have risen at a solid pace in the second quarter.”

The FOMC minutes noted that the “components of the nominal retail sales data used by the Bureau of Economic Analysis to construct its estimate of [personal consumer expenditures] edged down in June, but the decline for that group of components followed a strong reading in May.”

And the Fed acknowledged that “real disposable income rose in May and gains in households’ net worth were supported by further advances in home values. Moreover, consumer sentiment in the University of Michigan Surveys of Consumers in early July remained near its highest level since before the most recent recession.”

At this point, more signs point to a rate hike than not. But it is unclear if one is really needed.

Patrick Newport, economist at IHS Global Insight said, “[FOMC] members are satisfied with improvements in the labor market, but it is inflation that has members leaning one way or the other. That’s probably because the inflation numbers are a puzzle. The economy is nearing full employment, productivity has stalled, yet inflation shows no signs of taking off.”

For retail and fashion apparel, the Fed’s apparent fence-sitting will mean ongoing volatility to public company stocks.

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