Target had weak vacation sales. Investors hope better that it is an outlier


Can US Consumers Still Spend Money? To aim (TGT) Weak sales were recorded during the critical vacation period. This question deserves new attention.

What Happened: Target's sales increased by only 1.4% in at least one-year stores in November and December, an important measure of the retailer's health. That was below the company's expectations – and far behind the growth of 5.7% in the previous year.

Watch this stock: The retailer's shares, one of the few traditional brick-and-mortar retailers that flourished in the Amazon era, declined more than 6%. It was a rare moment of weakness for a stock that had grown over 80% in the past year.
Investors must now determine whether Target's performance was the exception or the rule. The US consumer has kept the American economy going and must continue to spend money for growth to continue. Shares of Walmart (WMT) and Best Buy (BBY)who still have to report Christmas sales fell on Wednesday as concerns spread.

A good sign: Costco said sales rose more than 9% in December. The stock ticked higher.

It is clear that businesses with a strong online presence will continue to be the winners. MasterCard (MA) At the end of last month, holiday sales on vacation grew by 3.4% compared to 2018. However, online sales increased by almost 19% compared to the previous year.
Those tied to shopping centers keep fighting. Macy & # 39; s (M) announced last week that it would close 29 stores. JCPenney (JCP). Kohls (KSS). Bed bath beyond (BBBY) and other staples in shopping centers also reported weak Christmas sales, my CNN business colleagues Nathaniel Meyersohn and Chris Isidore report.

It's worth watching: US retail sales for December arrive Thursday. Expect a market reaction when there are signs of weakness. (Economists expect 0.5% growth compared to the previous month, excluding cars.)

A world trade war is brewing. The US-China agreement won't stop it

The United States has signed a first trade agreement with China. But that doesn't mean that smoldering conflicts and trade uncertainty won't weigh on the global economy this year, my CNN business colleagues Jill Disis and Charles Riley write.
A world trade war is brewing. The US-China agreement won't stop it

Her opinion: "Tensions between the two largest economies in the world are likely to continue in 2020 as Beijing and Washington enter a second round of trade talks, which are expected to be more difficult than the" Phase 1 "process that took place on Wednesday led to a deal in Washington.

… The European Union is also involved in its own trade dispute with the United States, which has strained relations between the major Western powers. And the forthcoming breakdown of the UK with Europe poses a number of challenges as the country tries to re-establish a relationship with its largest export market. "

Read her full analysis here.

Prepare to be surprised: President Donald Trump and high-ranking Chinese politicians signed an 86-page agreement on Wednesday. It included a promise from Beijing to buy more US agricultural products and finished goods in two years. In return, the United States agreed to cut tariffs on Chinese products worth $ 120 billion from 15% to 7.5%.

"Are we in an ideal location? No," said Robert Lighthizer, Trump's leading negotiator, before signing to reporters at the White House. "Is that a very good first step? Yes."

Could the market predict the next president?

Only 55% of Americans own stocks. Still, markets could help predict the outcome of the 2020 presidential election – at least according to Sam Stovall, chief strategist for US investments at CFRA Research.

If the S&P 500 goes up in an election year between July 31 and October 31, the incumbent wins 80% of the time, Stovall said on CNN Business' live digital show "Markets Now".

"Investors don't like insecurity, and a new regime creates insecurity," he said. If the shares fall, the incumbent operator loses 88% of the time.

And what about all the voters who don't own shares? "While people on Main Street may not benefit directly from the stock market, they benefit indirectly because companies are hiring [and] Salaries are rising, "said Stovall.


BNY Mellon (BK). Charles Schwab (SCHW) and Morgan Stanley (MRS) Report results before US markets open.

Even today:

  • US retail sales for December arrive at 8:30 am ET.
  • The January NAHB Housing Market Index will be released at 10 a.m.CET.

Tomorrow is coming: Shortly after signing a first trade agreement between the United States and China, Beijing will publish its GDP data for the last three months of 2019.