My Top 10 Things to See on Thursday, May 22nd
1. President Trump’s much-discussed tax bill seems to be heading to the Senate, but it doesn’t look promising. It really feels like a letdown. Still, the Treasury might start funding with short-term paper, possibly easing some long-term yield pressure. Speaking of which, Treasury yields have climbed to 5.131%, their highest since October 2023, while 10-year yields hit 4.613%. There was a slight dip in stock futures this morning following a downturn on Wednesday.
2. Solar stocks are struggling due to the absence of any new tax credits in the recently passed House bill. This is evidently tough for the solar sector. On a different note, Bitcoin has certainly made a comeback, soaring past $111,000 as investors increasingly view it as a safeguard against the massive U.S. deficit.
3. Walmart has announced job cuts affecting 1,500 employees. A company spokesperson clarified that these reductions aren’t linked to customs duties. Could this indicate some potential cost savings from artificial intelligence?
4. Melius has downgraded Marvell, a firm known for custom chip production for companies like Amazon and potentially Microsoft. This isn’t about slowing computing but is more a commentary on Broadcom shares. This news precedes an upcoming report on May 29 and a webinar on June 17 regarding future custom AI chips.
5. Urban Outfitters had a standout performance recently, bolstered by fashion trends and their Nuuly Rent-An-Outfit service, as well as stronger-than-expected quarterly results. However, dealing with tariffs might force price increases, but Morgan Stanley upped their price target from $62 to $77, which feels a bit high. Stocks surged over 9% to around $69.
6. Snowflake reported an impressive quarter with an adjusted EPS of 24 cents, exceeding the estimate of 21 cents. There’s a wave of price target hikes here, with estimates ranging from $201 to $245 and influences seen from several major firms. Last night, there was an engaging discussion with CEO Sridhar Ramaswamy on “Mad Money.”
7. An analysis from Moffettnathanson indicates that while Alphabet is performing moderately well, its core Google search may be sluggish. I find that perspective believable, especially given the surprising market movements yesterday.
8. Citi has reduced Target’s price target from $97 to $94, mentioning a loss of market share across more than half of its categories in the first quarter. Bernstein also brought their target down, from $82 to $80. It’s curious to me that Target hasn’t made bolder moves, though they do have a solid balance sheet.
9. VFC Corp has seen its price target slashed from $19 to $15 at Barclays due to soft Q1 guidance. It’s premature to judge the changing dynamics surrounding this global apparel and footwear company, which includes brands like The North Face and Vans.
10. Morgan Stanley has upped its price target for TJX from $133 to $140, which could be one of their more astute calls. I’m noticing a lot of promising products out there this month. Despite a drop in stocks on Wednesday, the club’s price target was adjusted upward after solid revenue figures and consistent guidance amid evolving customs challenges.
