TLDR : LONG Apparel/Footwear sector. Particularly: Nike, Vans, Adidas, Puma, Lululemon, Calvin Klein.
Few points on why i'm bullish on apparel as of today's price:
1. On reshoring of manufacturing, SWEATSHOPS are the last thing they would want. Someone correct me if I missed it, but I haven't heard anyone from the White House talk about bringing back the textile industry. It’s all semiconductors, autos, steel—high-tech or heavy industry. Apparel/footwear likely will end up getting a very light tariff or even a pass after Vietnam bends the knee and buy BOEING jets and treasuries.
2. Bessent’s already hinted these tariffs are the ceiling, not the floor—negotiations will bring them down. **Vietnam's Deputy Prime Minister is scheduled to talk to Bessent today**. And later-on executives from Boeing/Apple etc. Apparel/footwear’s taken a HUGE hit because Vietnam’s because these companies spent CAPEX to build manufacturing there to dodge those China tariffs. This broad based 40% tariff will end up causing US companies to pay their share.
3. On inventories, Levi’s CEO said two days ago guided next quarter’s gross margin steady. Why? Summer inventory’s are already in the US. **Most apparel companies have a 2-4 month lead-time before they have to reorder from Vietnam, Cambodia, or Bangladesh**. If negotiations wrap up in a month, it’s back to business—no disruption.
4. Bond Yields Screwed the Macros. US 10-Year jumped from 3.9% to 4.4% in two days—probably smoked a few macro funds. Trump has repeatedly talked about lowing the 10Y and China retaliating isn't helping. Negotiations has to happen NOW or someone has to fold soon --- either the FED, US or China.
5. And the cherry on top of all is the tariffs spooked consumers into panic buying. Next quarter’s YoY numbers will look juicy. All predicated that Vietnam bend's the knee, which I bet they will for most things.
There's other things like 2026 Nov Mid-terms election (which Trump wants to declare massive victory), and massive tax-cuts and deregulation to be bullish about, but i'll leave it for another day when it comes.
Downside:
A natural calamity totally wipes humanity out, and we return back to the ocean, reuniting with nature. At least you could claim you had the balls to buy the DIP.
**How I am playing this :**
60% shares on VFC, NKE
25% leaps on VFC, NKE
15% OCT call spreads, targeting a 15-20% move from here on VFC and NKE
NOT FINANCIAL ADVICE. THIS IS A CASINO.