Target (TGT) added to good news about the state of the U.S. consumer, emerging from a long sales slump and boosting its profit forecast; the Federal Open Market Committee (FOMC) publishes minutes from its July meetings today, giving investors another read on an expected September interest-rate cut; shares of JD.com (JD) are sinking in premarket trading after Walmart (WMT) sold its stake in the Chinese e-commerce giant for a reported $3.6 billion; China has launched an anti-subsidy investigation into dairy imports from the European Union (EU); and Netflix (NFLX) shares are in focus after a huge jump in ad sales drove its stock to a record high Tuesday. U.S. stock futures are edging higher ahead of the Federal Reserve meeting minutes after the benchmark S&P 500 index ended a streak of eight straight winning sessions yesterday. Here’s what investors need to know today.
1. Target Stock Soars as Retailer Raises Profit Forecast
Target (TGT) shares are jumping 12% in premarket trading after the retailer posted a return to higher sales and boosted its profit outlook for the year. The company reported higher-than-expected revenue of $25.45 billion for its fiscal second quarter, up 2.7% year-over-year. Earnings per share (EPS) of $2.57 also beat consensus estimates of analysts polled by Visible Alpha. Target’s results come following strong July retail sales data and an increase by rival Walmart (WMT) of its sales and profit outlook, signaling a resilient U.S. consumer. Chief Executive Officer (CEO) Brian Cornell said Target’s “growth was driven entirely by traffic in stores and our digital channels, with double-digit growth in our same-day delivery services.”
2. Fed Minutes Expected to Reinforce Expectations of September Rate Cut
The Federal Open Market Committee (FOMC) will publish minutes from its meetings from last month, when officials held the benchmark fed funds rate steady at a 23-year high to fight inflation. The minutes, due at 2 p.m. ET, will likely reinforce expectations of a September interest-rate cut by the Federal Reserve. The minutes come as markets await Fed Chair Jerome Powell’s speech Friday at the annual central bank symposium in Jackson Hole, Wyoming.
3. JD.com Sinks as Walmart Exits Stake
Shares of JD.com (JD) are falling 7% in premarket trading as Walmart confirmed to CNBC that it sold its stake in the Chinese e-commerce giant. The sale allows Walmart “to focus on our strong China operations for Walmart China and Sam’s Club, and deploy capital towards other priorities,” the retailer told CNBC. Bloomberg reported that Walmart raised about $3.6 billion in the stake sale, which marks the unwinding of an eight-year partnership between the two and comes after the Chinese company last week surprised investors by posting a near doubling of its quarterly profits. Walmart shares are about 1% higher.
4. China Launches Anti-Subsidy Probe on EU Dairy Imports
China has launched an anti-subsidy investigation into dairy imports from the European Union (EU), a day after the EU updated import tariffs on Chinese-made electric vehicles (EVs). China’s Ministry of Commerce said its investigation will run for the period of April 1, 2023 to March 31, 2024, and will cover EU dairy products including fresh and processed cheese, milk, and cream. On Tuesday, the European Commission (EC), the EU’s enforcement arm, announced cuts on import tariffs on Tesla’s (TSLA) EVs to 9% from 20.8%, while competitors BYD (BYDDY), Volvo parent Geely (GELYF), and state-owned SAIC will have to pay tariffs of 17%, 19.3%, and 36.3%, respectively.
5. Netflix in Focus After Shares Hit Record High on Strong Ad Demand
Netflix (NFLX) shares are in focus after the hitting a new record high on Tuesday after the streaming giant reported a huge jump in advertising sales, bolstered by robust ad demand for its upcoming films, series, and live events. Netflix, which launched its cheaper ad-supported tier in November 2022, has been ramping up its advertising business in recent quarters in an effort to score more ad dollars from premium live sports and help offset the costs of creating original content in a saturated streaming market.
