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Pre-market shares: investors are betting on the rebirth of a Macy’s.  Should they be?
But in stock Macy’s (M) is now trading near what it was before Covid-19 rocked the markets, while Kohl’s (KSS) recovered all his losses. This begs the question: are these stores on the verge of a comeback, or have investors gotten ahead? There are clear signs that the outlook for retailers is starting to improve.
Macy’s surprised Wall Street on Tuesday by announcing it had made a profit for the first time since the pandemic began, grossing $ 160 million in the 13 weeks ending Jan. 30. Shares jumped almost 4%.

Retail sales in the United States increased 5.3% in January from the previous month, much better than expected. A Conference Board measure of consumer confidence improved again in February after rising in January.

However, the coming months could still be difficult. Macy’s CEO Jeffrey Gennette told analysts he believes current trends will hold for the first half of the year. That would mean home businesses and some luxury lines like designer skin care continue to thrive, while apparel sales – especially formal wear – are expected to remain weak. He predicted that clothing sales would start to recover in the second half of 2021.

The point is, Macy’s troubles won’t end with the pandemic.

Traditional department stores have been in a hurry in recent years by Amazon (AMZN) and online brands, supermarkets such as Target (TGT) and discount clothing chains like TJMaxx (TJX). Competitors JCPenney (JCP) and Neiman Marcus filed for bankruptcy last May.

Macy’s has cut costs and is trying to switch to online sales. He predicts that about $ 10 billion in sales will be digital by 2023. But even his most optimistic forecast for net sales for his current fiscal year is more than 15% lower than he reported in the last year. fiscal year 2019. This is not a good sign.

Meanwhile, a group of activist investors leaned into Kohl’s, announcing a 9.5% stake in the company and the appointment of nine new members to its board earlier this week.

“Investor Group’s belief that change is necessary stems from the company’s performance in the decade leading up to 2020, before the pandemic, and the implication for future performance, once the economy reopens, due to the company’s systemic inability to execute a plan that creates shareholder value, ”the group said in a letter Monday.

News of the move has increased shares. The activist group has had some success in the past, executing a push similar to Bed bath and beyond (BBBY) in 2019.

But the action clearly shows that even after the pandemic has passed, the way forward for struggling retailers remains uncertain. This makes the large increases in stock for department stores a little squeaky.

Jerome Powell calms nervous markets

Investors are desperate for reassurance that central banks won’t change their plans to stimulate the economy anytime soon.

Federal Reserve Chairman Jerome Powell delivered a speech on Tuesday, telling members of the US Senate that “the economic recovery remains uneven and far from complete.”

“The best thing [the Fed] can do about this is to maintain accommodative monetary policy, ”he said.

Investor insight: Powell’s remarks calmed unruly markets, allowing the S&P 500 to break a five-day losing streak. The Nasdaq Composite closed 0.5% lower on Tuesday, after falling more than 3% earlier in the session.

Very low interest rates and huge bond buying programs have fueled the euphoria that has gripped the markets since last March. But the mood has changed in recent days as Wall Street assesses the risk that a strong economic recovery this spring and summer could push prices up, forcing central banks to raise interest rates or curb purchases of ‘bonds sooner than expected.

This triggered a rise in government bond yields, which move opposite to price, and a selloff in tech stocks, which have been among the best performers during the pandemic.

Coming up: Investors are not out of the woods yet. Powell’s testimony is expected to continue on Wednesday, this time before House lawmakers.

If he sticks to Tuesday’s scenario, Wall Street could be appeased.

“Its success struck a balanced tone,” Stephen Innes, chief global markets strategist at Axi, told clients on Wednesday.

If Powell had been too accommodating, Innes said, he “risked exacerbating short-term inflation fears.” If he had been too hawkish, it might have fueled fears that the Fed was letting its foot off the pedal.

5 reasons Tesla’s stock is crashing

After a year of breakneck gains, one of the hottest stocks in the world is retreating.

The last: the actions of You’re here (TSLA) entered bear market territory, down 20% from their recent closing high of $ 883.09 in late January. They finished Monday at $ 698.84.
My colleague at CNN Business, Chris Isidore, points out a few factors behind this decision. Bitcoin prices have fallen, exposing Tesla after the automaker announced it had invested $ 1.5 billion in cryptocurrency. There has also been confusion over pricing for the cheaper version of the Model Y and growing competition from Apple and GM, who launched an SUV version of its Chevrolet Bolt a week ago.

Investors may also have simply acted too quickly, notes Chris. Tesla shares peaked a day before a report on earnings fell short of Wall Street expectations. CEO Elon Musk also warned the company was scrambling to source enough batteries.

Another from me: Tesla has been a major beneficiary of the recent wave of risk-taking in the markets. It is therefore not surprising that its action suffers as sentiment becomes more cautious.

Shares are up 4% in pre-market trading, indicating that the rout may have taken its course. But the recent drops are a reminder that Tesla’s dramatic rise to power leaves it vulnerable to big drops and its rich valuation is not a given.

following

Casper (CSPR), Lowe’s (LOW), Office depot (ODP) and TJX (TJX) publish the results before the US markets open. Reservation of tickets, Hostess marks (TWNK), Brands L (KG), Nvidia (NVDA) and ViacomCBS (VIACA) follow after the close.

Today also:

  • Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee at 10 a.m. ET.
  • New US home sales for January are also posted at 10 a.m. ET.
Coming tomorrow: income from Anheuser-Busch InBev (BUD), Domino Pizza (DMPZF), Best buy (BBY) and Etsy (ETSY).

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