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Why Carter's Stock Climbed 16% in June

Steve Symington, The Motley Fool

What happened

Shares of Carter's (NYSE: CRI) jumped 16% in June, according to data from S&P Global Market Intelligence, despite a lack of company-specific news. Rather, after plunging more than 20% in May along with the broader market amid trade tensions between the U.S. and both Mexico and China, last month's gain only partially recouped those losses as trade concerns eased and the broader markets rebounded.

White and blue shirts hanging from a store rack.

IMAGE SOURCE: GETTY IMAGES.

So what

To be clear, there were no new press releases, analyst reports, or regulatory filings on Carter's that might otherwise have driven the move. But with the S&P 500 up 7%, the rising tide unsurprisingly lifted most boats that had sank over the previous several weeks.

But while the U.S. and China recently agreed to restart trade talks, there's no guarantee those talks will be fruitful -- and macroeconomic concerns remain. Around the middle of last month, for example, the CEO of the American Apparel & Footwear Association insisted that imposing new tariffs on imported Chinese goods would be a "disaster in the making," saying that much of the industry -- including companies like Carter's -- is "deeply entrenched ... with nowhere to go" to reduce costs.

Now what

It's worth noting, however, that China tariffs in their current form aren't technically hurting Carter's today. But during the company's last quarterly conference call in late April, Carter's Chairman and CEO Michael Casey noted they're watching the situation closely, as new tariffs could pose a risk, and added they were thankful "the tone of those negotiations [had] improved" at the time.

As such, at least between now and Carter's second-quarter report toward the end of this month, I suspect Carter's stock price will remain at the mercy of both broader market movements and global trade developments.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Carter's. The Motley Fool has a disclosure policy.