Markets are red, as investors saw a mixed batch of earnings, and are set for the Federal Reserve’s meeting minutes release. Remember, markets are looking for any sign of a potential rate cut by September.
Strengthening arguments for aggressive interest rate cuts, the Federal Reserve’s Michelle Bowman argues that interest rates should be lower after a weaker-than-expected jobs report.
U.S. employers added just 73,000 jobs in July, which was short of expectations of 115,000. Plus, revisions for May and June payrolls shaved off 258,000 jobs.
“A notable deterioration in U.S. labor market conditions appears to be underway,’’ said Scott Anderson, chief U.S. economist at BMO Capital Markets, as quoted by the Associated Press. “We have been forecasting this since the tariff and trade war erupted this spring, and more restrictive immigration restrictions were put in place. Overall, this report highlights the risk of a harder landing for the labor market.’’
That was a key part of Bowman’s argument for at least three rate cuts this year, with the central bank set to meet another three times in 2025.
Earnings Release: Target (TGT)
Shares of Target are down more than 10% or by $11.56 a share.
For one, Target’s CEO Brian Cornell is stepping down thanks to slumping sales. Two, while the company’s EPS of $2.95 beat by a penny, and revenue of $25.21 billion beat by $310 million, its comparable sales were down 1.9% year over year.
As noted by CNBC, “Target’s latest quarter reflected its ongoing struggles. Its net income fell to $935 million, or $2.05 per share, from $1.19 billion, or $2.57 per share, in the year-ago quarter. Revenue declined from $25.45 billion in the prior-year period. Comparable sales decreased by 1.9% year over year. That metric, also known as same-store sales, includes sales on its website and stores open at least 13 months.”
Earnings Release: Lowe’s (LOW)
Shares of Lowe’s are up about 3.4%, or by $8.64 a share.
Its EPS of $4.33 beat by nine cents. Revenue of $23.96 billion, up 1.6% year over year, was in line.
The company also sees full-year 2025 sales of between $84.5 billion and $85.5 billion, up from $83.5 billion to $84.5 billion. In addition, Lowe’s expects same-store sales to be between flat to up by 1% year-over-year.
Shares of Palantir are in the Red Again
After an explosive run with the artificial intelligence boom, Palantir is getting clobbered.
On August 12, it tested $190. Today, it’s down to $157.75. From here, we’re looking for a quick bounce off its 50-day moving average at $152.18. If that doesn’t hold, we’ll look to see if support at $130 a share can hold.
The pullback happened even with solid earnings and its first-ever $1 billion revenue quarter.
Even the best stocks need to take a breather, though – especially after PLTR’s run.
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Author: Ian Cooper
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