Wednesday, August 19, 2020

Markets edge higher on retail earnings

Dow rose 64, advancers were modestly ahead of decliners & NAZ added 14.   The MLP index was even at 132  & the REIT index dropped 4+ to the 353w.  Junk bond funds drifted lower & Treasuries edged higher,   Oil slid back again in the 42s & gold dropped 41 to 1971.

AMJ (Alerian MLP Index tracking fund)

stock chart

CL=FCrude Oil42.4310:18AM EDT-0.46-1.07%

GC=FGold1,996.3010:19AM EDT-16.80-0.83%







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Target (TGT). a Dividend Aristocrat, blew past forecast for its fiscal Q2 as it attracted Ms of new customers online, setting a record for same-store sales that drove profits up by an eye-popping 80.3% to $1.7B.  Sales online & at stores open for at least a year climbed by 24.3% — an all-time high for the retailer.  Same-store sales climbed by 10.9% while digital sales nearly tripled from a year earlier.  CEO Brian Cornell said that the mix of merchandise & online options resonated with customers who sought out safe & convenient ways to shop in the midst of the pandemic.  The company benefited from its designation as an essential retailer during US lockdowns that forced some competitors to close.  “Throughout the year and over the last few years, we’ve built tremendous trust with the guest,” he said.  He said that relationship with customers has “been one of the big drivers behind our success.”  Shopping traffic picked up, customers filled up their baskets with more items, & even beauty & apparel sales were strong.  Sales were also up across all 5 of merchandise categories.  The company attracted 10M new digital customers in H1 & also picked up $5B in market share in the period, while many 44 retailers laid-off workers.  Q2 EPS soared to $3.35 compared with $1.82 a year earlier.  After excluding items, EPS was $3.38, more than double the $1.63 expected.  Total revenue rose 24.7% to $23B from $18.4B a year prior & beat expectations of $20.1B.  Cornell did not provide a financial outlook for the rest of the year.  The stock went up 91¢.

If you would like to learn more about LOW, click on this link:

club.ino.com/trend/analysis/stock/LOW?a_aid=CD3289&a_bid=6ae5b6f7

Target reports a monster quarter — profits jump 80%, same-store sales set record

Lowe's (LOW) blew past forecasts with a 30% surge in revenue & 68.7% jump in profit as consumers shifted spending from restaurants & travel to home improvement projects during the coronavirus pandemic.  EPS soared to $3.74, up from $2.14 a year earlier even as it spent more money to keep employees at work & safe during the pandemic.  The company spent $460M on higher pay for hourly workers, store safety & supporting communities.  It also will pay out a record bonus of $107M to employees at all of its locations for surpassing its targets.  Excluding the impact of restructuring its Canadian business, the retailer reported EPS of $3.75, beating the $2.95 expected.  Net sales rose 30% to $27.3B, topping expectations of $24.3B.  The company reported same-store sales growth of 35.1% for its US home improvement business & its website sales soared 135% as the pandemic pushed more customers to shop online.  “Sales were driven by a consumer focus on the home, core repair and maintenance activities, and wallet share shift away from other discretionary spending,” CEO Marvin Ellison said.  All merchandising divisions saw same-store sales growth of more than 20% & all regions in the US reported same-store sales growth exceeding 30%.  The stock jumped 15.98 (12%).  If you would like to learn more about LOW, click on this link:

club.ino.com/trend/analysis/stock/LOW?a_aid=CD3289&a_bid=6ae5b6f7

Lowe’s reports blow-out quarter with 30% surge in revenue

Japan's exports plunged 19.2% in Jul from a year earlier, as the coronavirus pandemic sapped global demand for goods from the 3rd largest economy, gov data showed.  The Finance Ministry's provisional numbers showed Japan's imports fell 22.3% in Jul.  Exports to the US especially suffered, declining 19.5%.  Shipments of plastic goods, iron & steel & computer parts weakened.  But Japan recorded its first trade surplus in 4 months on the back of a recovery in China, where the coronavirus outbreak began.  Exports to China, including metals, paper products & machinery, grew 8.2% in Jul.  Japan's economy is heavily reliant on exports, so weak demand in major overseas markets is constraining its growth.  The pandemic has caused some plant production to be temporarily halted, squelched tourism & generally hurt economic activity.   The economy has been in recession for all of 2020 so far even though it has never had full lockdowns.  Instead, authorities have encouraged people to work from home, wear masks & practice social distancing.  Some stores have closed or shortened their hours.  Japan has reported about 1100 deaths attributed to COVID-19 so far, fewer than harder hit nations like the US & Brazil.  But worries are growing over a recent surge in cases, especially in Tokyo & other urban areas.

Japan's exports plunge amid crush from coronavirus pandemic

Stocks are meandering, looking for direction.  Earnings from the big retailers looked good while many of the little guys suffered or went out of business.  The virus keeps fighting, it does not want to give up.  As shown below, the Dow has been little changed near 28K for a week.

Dow Jones Industrials








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