Here's your daily analysis on the stock market: It's now going to go up right until the jobs report on Friday, provided Donald Trump keeps quiet on the tariff front and Jerome Powell stays off TV and out of the public eye. When the jobs report (expected to be solid) hits the wires on Friday that will be the fresh test of this short-term rally. If the wage number is anything that seems hot, look for stocks to tank on fears of higher interest rates. If stocks rally on the solid jobs report, that will be nicely short-term bullish.
Go Ahead, Buy That Target Stock ... I Dare You
The market is generally confused about what of Target's (TGT) fourth-quarter results and full-year outlook. The big box retailer certainly gave investors some eye candy packed at the top of the press release (which is always by design): fourth-quarter same-store sales growth of 3.6% (Walmart's (WMT) U.S. division saw 2.6% growth); traffic increased; digital sales rose 29% following a 34% increase a year ago; earnings came in-line relative to consensus; the full-year 2018 outlook of $5.15 to $5.45 a share was reasonable compared to estimates for $5.27. Despite said eye candy, the quarter has to be worrisome to anyone that wants to hold Target shares for the next 10 years. The company's gross profit margin continues to be under pressure due to higher fulfillment costs (see efforts to speed up shipping times) and efforts to become more competitive on price. With Target, and other big box retailers for that matter, feeling the pinch from going all out to take on Action Alerts Plus holding Amazon (AMZN) , investors should really be questioning any outlooks that are overly bullish (as Target's first crack at guidance looks). Watch some instant analysis of the results I did on Periscope. Then go add to your Amazon position.
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One of our top stories the past two days has been a take on an analyst predicting almost 50% upside on General Electric's (GE) stock. This tells me that legions of people continue to be caught on the wrong side of the General Electric trade - these are folks that bought the dips throughout 2017 on the hopes the bottom was in and GE was an unbeatable value stock. Obviously that proved to be the wrong move (the stock has plunged 52% the past year). But seeing as they still hold the industrial giant, investors are wondering if they should just keep on buying here on the prospect Warren Buffett buys the company. Might as well go all in, right? At the margin, the interest suggests one more bad quarter from GE could lead to a fresh round of selling that takes the stock down even further. It's then when the selling is finally exhausted that GE could be that unbeatable value play ... and Buffett buys the company in total or in parts.
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