Retail Stocks Jump on Report GOP Border Tax Plan Doesn't Have White House SupportBy
Axios reports Gary Cohn said border-adjustment tax a no-go
SPDR Retail ETF gains as much as 2.6 percent after report
A heavily-shorted exchange-traded fund that holds retail stocks jumped amid a report that the White House is not on board with the border-adjustment tax plan preferred by House Republicans.
Gary Cohn, chief economic adviser to President Donald Trump, told a group of executives at a private event in Washington that the White House does not support this initiative, Axios reported, citing an unidentified attendee of the meeting. Axios later said that the White House called the website’s report inaccurate and said that no statement of support or opposition was made.
Trump had initially deemed the House Republican plan to encourage domestic production and exports by taxing imports to be "too complicated," but touched on more of the potential positives of the proposal during an interview with Reuters on Thursday.
Retailers would be among the biggest losers if such a proposal were implemented in full, as the majority of their sales are of imported goods. The SPDR S&P Retail ETF extended its gains to as much as 2.6 percent minutes after the Axios report. It was up 1.4 percent as of 3:38 p.m. in New York.
Short interest in the ETF was 191 percent of float as of Jan. 31.