The stock market fell 3% due to concerns about the purpose and tightening of monetary policy

Target’s profit for the first quarter halved, and the company warned of a bigger blow to profitability due to high fuel and freight costs. The target stocks are aimed at the biggest decline since the Black Monday crash on October 19, 1987 (full story), a day after Walmart Inc competitor WMT.N lowered its earnings forecast.

Rising inflation, the conflict in Ukraine, the long supply chain disruptions associated with the blockade pandemic in China, and the prospect of intensifying aggressive policies by central banks have recently affected markets.

MARKET REACTION:

* SHARES: Dow fell 2.95%, S&P 500 – by 3.41%, Nasdaq – by 4.08%.

COMMENTS:

THOMAS HAYES, CHAIRMAN, GREAT HILL CAPITAL, NEW YORK

“The market has estimated some of the (economic) slowdowns and prices for full rate hikes, suggesting that Powell will remain in line with a plan to end historic boost cycles that should boost federal fund rates, probably just above 2%, as we saw in the last cycle procrastination “.

“I just think the market is bold because (Powell) was a little bad yesterday. When we see that potentially next month the CPI will be more reasonable, because the figures are much higher, that in May last year the market will begin to weaken slightly more. But for now, it’s just Target’s reaction and hawk’s rhetoric. “

“What worries people after watching Target is whether they will have to reduce other profits? Or it’s a one-time event, because if you look at all the S&P 500’s earnings, they’ll grow another 10% year-over-year compared to last week. level of earnings “.

DENNIS DICK, TRADER, BRIGHT TRADING LLC, LAS VEGAS

“Today is a kind of retail apocalypse. Yesterday was Walmart, and everyone thought it was an isolated case. Now that Target is losing much more than Walmart, they fear the consumer is not as strong as everyone thinks.”

“Target – stocks with a low beta. When it falls by 25% in one day, it distracts people from all the stocks, because it is a real company with real profits, and it falls by 25% in one day, is a serious problem for this market, and it scares many investors.

“Inflation, the cost of inputs is a major problem for many companies now, and the consumer is not spending as much money as we expected. So the Fed’s plan works. They need to bring inflation, and it will bring it. But it will be a painful process and forget about soft landing, I don’t think there is a chance for a soft landing. “

“Now investors are watching what is safe? What should I do? I do not know. Is there anything safe now? If we go into recession, it may affect everyone. That’s why I think investors are assessing the risks right now. “

“I think you just need to sell hard. You will have light rallies, similar to the ones we have seen over the last few days, and you must use this to continue fundraising, because I think the worst is yet to come. “

TIM GREASKI, SENIOR PORTFOLIO STRATEGY, INGALLS & SNYDER, NEW YORK

“This is a rather extreme reaction, but it emphasizes that there is inflationary pressure on retailers and at the same time there are changes in consumer spending.”

“Target’s loss of a quarter of its market capitalization is a concern for a company with a strong long-term balance sheet.”

“In general, when hard times come, when inflation is observed in many categories, especially in non-discretionary categories, such as gas for your car, low-income consumers are often pressured.”

“The consumer is being pressured, but he is by no means dead. Investors are partially reacting to Target’s large deficit, and it is not so much reflected in terms of income; what it has lost is profit, and it reflects inflationary pressures.”

“It’s not a forgiving market, sales generate more sales. Buyers demand much lower prices to attract investment. You’ve had these wild fluctuations up and down. It’s hard to attract investors given the instability and uncertain economic and geopolitical prospects.”

“Technicians suggest that (confirmation of the bear market S&P 500) may attract some buyers, so there may be some resistance. But fundamentals will continue to deteriorate with more earnings-like announcements from Target today, which show our worst fears of inflation and pressure on supply chain costs. ”

“We are used to big positive surprises. For now, profits are likely to remain unchanged, but if profits fall, there is the potential for the market to decline beyond the somewhat random definition of a bear market.

CHUCK CARLSON, GENERAL MANAGER, HORIZON INVESTMENT SERVICES, HAMMOND, INDIANA

“I think it’s because of economic fears. You have a lot of retailers that show little results, and that’s another sign, perhaps, of the economic slowdown. “

“I wonder if people aren’t starting to care about the cost of fuel – for both business and consumers… When you pay more than $ 5 a gallon of gas, it’s a big blow, and it’s a blow to everyone.”

Leave a Comment

Your email address will not be published. Required fields are marked *