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Wednesday, August 21

Some of the largest macro moves in the market today include: USD/CNH +0.2%. Some of the largest moves among US mega-cap stocks include: Alphabet Inc (GOOGL) -1.2%. Alphabet Inc (GOOG) -1.1%. Walmart Inc (WMT) +1.1%. 

The release of the Federal Open Market Committee (FOMC) meeting minutes later today is highly anticipated by investors. These minutes, along with upcoming speeches at the Jackson Hole Symposium starting Thursday and particularly Fed Chair Jerome Powell's speech on Friday, are expected to provide crucial insights into future U.S. monetary policy decisions.

In Japan, trade data revealed a significant increase in imports for July 2024, reaching a 19-month high and surpassing market expectations. However, export growth was slower than forecasted leading to an expanded trade deficit compared to last year which has implications for economic stability discussions within major global economies.

European markets have shown positive trends recently as indicated by slight gains across various indices including Germany’s DAX and France’s CAC 40 Indexes amidst ongoing analysis of public sector borrowing figures from the UK that significantly exceeded forecasts due primarily to increased government spending driven by inflationary pressures.

USD/CNH [+0.2%]
The USD/CNH has increased, influenced by the People's Bank of China setting its onshore yuan reference rate, which reflects a pullback in support for the currency amidst market actions to lower the USD. Expectations are growing around potential interest rate cuts from the Federal Reserve starting next month, as traders look forward to insights from upcoming FOMC minutes and Fed Chair Jerome Powell's speech at Jackson Hole this week. In parallel, the USD/JPY has also moved up, suggesting a correlation between these currency pairs in the current market environment.

XLP [+0.6%]
The Consumer Staples Select Sector SPDR Fund (XLP) has seen a price increase of 0.6% since Tuesday. Key contributors to this performance include Target Corporation, which reported strong second-quarter results with adjusted earnings and revenue exceeding expectations. Walmart Inc. announced plans to divest its stake in JD.com, prompting a decline in JD.com's shares. Costco Wholesale and Dollar Tree also contributed positively, with Dollar Tree set to release its second-quarter financial results soon, accompanied by a conference call featuring top executives to discuss performance.

TGT |+14.0%|+10.7B
Target Corporation reported strong second-quarter results, with adjusted earnings per share of 2.57, significantly above the consensus estimate of 2.20, and reflecting a notable increase from the previous year. Revenue reached 25.45 billion, surpassing expectations of 25.23 billion, marking a year-over-year rise. Comparable sales grew by 2%, exceeding the estimated growth of 1.07%. The company raised its fiscal year 2024 adjusted EPS outlook to a range of 9.00 to 9.70, up from the prior range of 8.60 to 9.60. For the third quarter, Target expects adjusted EPS between 2.10 and 2.40, compared to the estimate of 2.24. Digital comparable sales increased by 8.7%, contributing to overall traffic growth of 3%. Following these announcements, Target's stock moved up by 10% shortly after the earnings release.

JD | -8.0% | -5.7B
Walmart has announced the sale of its entire stake in JD.Com, concluding an eight-year partnership. The retailer plans to raise up to 3.74 billion by offering 144.5 million shares priced between 24.85 and 25.85 each. This decision aligns with Walmart's strategy to focus on its operations in China. Following this announcement, JD.Com shares experienced a significant decline, reflecting concerns regarding Walmart's exit as the largest shareholder. Morgan Stanley is managing the transaction. Despite this divestment, JD.Com expressed confidence in future cooperation with Walmart.

KEYS |+11.7%|+3.2B
Keysight Technologies reported robust third-quarter results, with adjusted earnings per share of $1.57, exceeding the consensus estimate of $1.35 by 16.3%. Revenue reached $1.22 billion, surpassing expectations of $1.19 billion. Although there was a year-over-year revenue decline, the company forecasted fourth-quarter adjusted EPS between $1.53 and $1.59, with revenue anticipated between $1.245 billion and $1.265 billion. Following the earnings announcement, Keysight's shares surged in after-hours trading. The stock increased significantly after the earnings release, reflecting positive sentiment surrounding the company's performance and guidance.

TJX |+3.9% | +5.2B
TJX Companies Inc has raised its full-year guidance for both pretax profit margin and earnings per share. The company now forecasts a pretax profit margin of approximately 11.2% and adjusted EPS in the range of $4.09 to $4.13, up from a previous estimate of $4.03 to $4.09. For Q2, TJX reported earnings of $0.96 per share, surpassing the consensus estimate of $0.91, with sales totaling $13.468 billion, also exceeding expectations. Additionally, TJX announced a $360 million investment for a 35% ownership stake in Brands for Less, a Middle Eastern off-price retailer, expected to be slightly accretive to EPS starting in fiscal 2026. Following these announcements, the stock has moved up significantly in pre-market trading.

WMT |+1.1% | +6.8B
Walmart Inc is experiencing an upward price movement, aligning with significant gains in the Consumer Staples Merchandise Retail sub-sector. The company is looking to raise up to $3.74 billion by divesting its entire stake in JD.com, concluding an eight-year partnership. It plans to sell 144.5 million shares priced between $24.85 and $25.85, with Morgan Stanley facilitating the transaction. This strategic decision allows Walmart to refocus on its operations in China. Following the announcement, JD.com's shares declined notably in pre-market trading, while Walmart's stock showed a slight increase. Additionally, Walmart's recent earnings report surpassed expectations, reinforcing positive sentiment around its stock performance.

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