| PROSPERITY PUB MARKET TALK
Way off Target & Waiting on NVDA
Target (TGT) crashed as much as 10% overnight before recovering slightly.
Target’s pre-market earnings report left a lot to be desired, with the retailer falling short of Wall Street expectations for last quarter and lowering forward-looking expectations for the current quarter.
The retailer placed the blame at the feet of weakening consumer demand, saying consumers were tightening their wallets and seeking out value.
That falls in line with an article that our own Nate Tucci wrote 3 weeks ago, finding that consumer confidence has been weakening for months.
But all isn’t bad in retail land. Walmart, possibly the ultimate value-retailer, actually reported better-than-expected earnings last week, telling inventors that shoppers were prioritizing food and essentials.
Some recent economic data — such as a weakening labor market — has been pointing to signs that the Fed’s rate hike campaign, in which it raised rates between March 2022 and July 2023, might finally be having its desired effects.
This point is an important one that our friend, Jeffry Turnmire has often brought up: The Fed’s interest rate campaign is inherently flawed — not only because the Fed is making decisions based on backward-looking data, but because rate hikes take 18-24 months to filter down and have their effects on the economy.
In other news, Fed minutes were released at 2pm Eastern today, with markets initially reacting down sharply, as the S&P took out the lows of the past two days.
Meanwhile, all eyes are on NVDA’s after-hours earnings report. A positive report could send the world’s 3rd largest company by market cap shooting upward.
If the company doesn’t deliver on earnings, Jeffry Turnmire has downside targets of 720 and possibly even 300.
— The Prosperity Pub Team
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