Tuesday, June 7, 2022

Markets rebound following early selling after Target profit warning

Dow rose 50 (reversing early losses), advancers over decliners about 3-2 & NAZ gained 68.  The MLP index went up 2+ to the 228s & the REIT index was flattish in the 435s.  Junk bond funds drifted lower & Treasuries were being purchased (more below).  Oil went up another 1+ to go over 120 & gold added 10 to 1853.

AMJ (Alerian MLP index tracking fund)

 

 

 




3 Stocks You Should Own Right Now - Click Here!

Target (TGT), a Dividend Aristocrat, warned hat its profits will take a hit in the near term while it implements several measures to reduce excess inventory.  The retailer, which is facing excess inventory in several categories, said it's planning in part to issue additional markdowns, cancel orders & remove excess inventory in order to "right-size its inventory for the balance of the year."  The company said last month that it had "softer-than-expected sales in several categories" during the first 3 months of the year, which resulted "in too much inventory in those areas."  Since then, CEO Brian Cornell said the company has "continued to monitor external conditions and have determined the necessary actions to remain nimble in the current environment."  As a result of the actions along with "current expectations for the economy and consumer environment," TGT slashed its Q2 operating margin rate, which is now projected to be around 2%.  Meanwhile, the company said that its operating margin rate would be "centered around our first quarter rate of 5.3%."  TGT also expects its full-year revenue growth to be in the low-to-single-digit range & expects to maintain or gain market share in 2022.  The stock dropped 4.49.
If you would like to learn more about TGT click on this link:
club.ino.com/trend/analysis/stock/TGT_aid=CD3289&a_bid=6ae5b6f

Top retailer warns its profits will take short-term hit

The top 2 most important issues on American voters' minds heading into the 2022 midterm elections are inflation & the economy according to a new poll, & Pres Biden's marks on handling the those issues could be a bad sign for congressional Dems.  The latest ABC News/Ipsos poll rshowed that inflation is the single most important issue to voters in determining how they will cast their ballots for Congress in Nov, with 80% of voters responding that it was either "extremely important" or "very important."  Respondents said they disapproved of the pres's handling of inflation, which is hovering around a 40-year-high, by a 71% to 28% margin.  An even higher number, 72%, said they disapproved of how Biden has addressed record-high gas prices, while 27% said they approved.  Another 83% of voters responded that the state of the economy would be an extremely or very important factor in dictating their vote.  61% said that they disapprove of how the pres is handling the economic recovery, compared to 37% who said they approved of the job he is doing.  The polling also found that Rep voters are more motivated to show up at the polls this fall, with 57% saying they are very enthusiastic about casting their votes compared to 44% of respondents who identified as Dems.  Biden has insisted in the past that he does not look at polling in making his decisions, but his numbers on economic conditions are becoming more difficult to ignore.

Inflation, economy top of mind for Americans heading into midterms: poll

Treasury yields retreated as investors continue to assess inflation, with key data out later in the week.  The yield on the benchmark 10-year Treasury note slid 5 basis points to 2.988%, having surpassed its highest level in almost a month yesterday, while the yield on the 30-year Treasury bond slipped more than 4 basis points to 3.143%.  Yields move inversely to prices.  Yields surged earlier this year as investors reacted to persistently high inflation ratings & a more hawkish outlook from the Federal Reserve.  Yields settled back down in recent weeks before the 10-year yield jumped back above 3% yesterday.  May's consumer price index reading on Fri could be the week's marquee moment.  Should last month's reading come in lower than Apr's, markets could look to deduce that inflation has peaked, rendering the path of monetary policy slightly more predictable.

Treasury yields fall slightly as markets await inflation indicators

Sellers came out at the opening when TGT gave a gloomy forecast.  But in the 2nd hour of trading buyers took the Dow up 250 from early lows.  The yield on the 10 Year Treasury dipping below 3% may have brought out buyers.  With all this volatility, it's difficult to tell were the market will go later today.

Dow Jones Industrials

 






No comments: