📈 Target's Bottom-Fishing Moment

Target's Wednesday earnings report could mark the inflection point where contrarian patience meets operational reality

Good Morning…

When a beloved retailer's stock craters 60% from its highs while customers still whisper "Tarzhay" with affection, savvy investors know to pay attention—because the market's pessimism rarely matches the brand's enduring power.

🔎 Market Trends → Nasdaq tumbles as Jackson Hole jitters hit tech stocks

And now…

⏱️ Your 5-minute briefing for Wednesday, August 20, 2025:

MARKET BRIEF
Before the Open 

As of market close 08/19/2025.

Pre-Market

  • Intel (INTC) with a +7% gain, the strongest performer on the S&P 500, buoyed by a $2 billion investment from SoftBank signaling renewed optimism in U.S. semiconductor manufacturing

  • Palantir Technologies (PLTR) with a −9.4% plunge, the weakest performer on the S&P 500, amid valuation concerns raised by Citron Research

Fear & Greed

 

Markets in Review

Tech Takes a Breather, But Dow Brushes Records

The S&P 500 slipped 0.59% to 6,411.37, the Nasdaq Composite fell 1.46% to 21,314.95, while the Dow edged up 0.02% to 44,922.27 — touching a fresh intraday high.

The Big Picture:

Markets gave back some ground Tuesday as megacap tech and chipmakers cooled after a blistering four-month rally. Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) all retreated, dragging the Nasdaq lower.

But beneath the surface, there’s strength. Home Depot (HD) popped 3% despite an earnings miss — its confidence in full-year guidance signaled resilience in consumer spending. Add in hedge funds rotating into cyclical plays and commodities staying firm, and the backdrop still tilts constructive.

Meanwhile, the macro winds are shifting: with Fed futures pricing an 85% chance of a September rate cut, liquidity support may arrive sooner than many expected. That could extend the bull case into year-end, especially as tariffs reshape supply chains but also drive investment in domestic industry.

Market Movers:

  • Tech slips: Nvidia down 3.5%, AMD off 5.4%, Palantir (PLTR) worst in the S&P, plunging 9%. Investors appear to be cashing profits, not abandoning the AI trade.

  • Retail resilience: Home Depot +3% on reaffirmed outlook. Watch Lowe’s (LOW), Walmart (WMT), and Target (TGT) earnings this week as consumer health takes center stage.

  • Defensives out, cyclicals in: Hedge funds rotated from staples/utilities into macro-sensitive sectors — a sign capital is bracing for rate cuts.

What They’re Saying:

“The AI trade may not be breaking, but it could be catching its breath,” said Jayson Bronchetti of Lincoln Financial. “Rotation into broader sectors may underpin a more durable advance.”

WHAT WE’RE WATCHING
Events

  • Today: Federal Reserve - Federal Open Market Committee (FOMC) Meeting Minutes - 2:00pm

    Why You Should Care: It's a detailed record of the FOMC's most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates;

Earnings Reports

  • Today: Target, Lowe’s, TJ Maxx, Estée Lauder, Coty, Baidu

  • Tomorrow: Walmart, Ross Stores, Zoom, Intuit, Newsmax, MINISO, Workday

MARKET INSIGHTS
Leading News 

Target's Bottom-Fishing Moment: Why Smart Money Is Watching Wednesday's Earnings

Photo Credit: Marques Thomas

Why it matters:

Target (TGT) reports Q2 earnings Wednesday morning, and after a 60% plunge from 2021 highs, contrarian investors are eyeing whether America's favorite "cheap chic" retailer has hit rock bottom.

Zoom Out:

The behavioral finance playbook suggests that when everyone hates a stock, it's time to pay attention. Target's shares have shed 22% this year alone, with weekly foot traffic declining since January—classic signs of peak pessimism.

Yet history teaches us that retail turnarounds often begin when expectations are basement-low. Think of how investors who bought Walmart in the early 1990s recession were rewarded when the company modernized its supply chain and embraced e-commerce.

Target faces real headwinds: half its merchandise is imported (tariff exposure), the profitable Ulta partnership ends next year, and CEO Brian Cornell is expected to step down soon. But these known negatives may already be baked into the stock price.

Key Insights:

  • Earnings expectations are modest: $2.03 per share on $24.93B revenue—low bars that smart management can clear

  • Valuation opportunity: Trading near multi-year lows creates asymmetric risk/reward for patient capital

  • Strategic pivot: New advertising revenue streams and operational efficiency initiatives could surprise skeptics

Market Pulse:

"When retail stocks get this beaten up, you're often buying at or near the trough," notes one veteran retail analyst.

Bull’s Take:

Target's "Tarzhay" brand loyalty remains intact—customers just need a reason to return. With expectations reset and new leadership transitions ahead, Wednesday's numbers could mark the beginning of a multi-quarter recovery story for investors willing to think beyond the current cycle.

Market Stories of Note

America's Fiscal Tightrope Walk Gets New Balance Beam:

S&P maintains America's AA+ credit rating on a bet that tariff revenues will offset the $4.5 trillion revenue loss from Trump's "Big Beautiful Bill," proving that even rating agencies now embrace the ancient art of fiscal alchemy. The math is surprisingly compelling: while the Congressional Budget Office projects a $3.4 trillion deficit increase over the next decade, S&P expects "meaningful tariff revenue" to cushion the blow as effective tax rates rise on imported goods. For bond investors, this creates a rare scenario where protectionist policies might actually strengthen the dollar's reserve currency status rather than undermining America's creditworthiness—though patience will be required as this economic experiment unfolds.

Uncle Sam's Chip Shop Investment:

The Trump administration is considering taking a 10% equity stake in Intel (INTC) using existing CHIPS Act funding, transforming government grants into potential taxpayer profits—a move that could finally align public investment with public returns. This represents a fascinating pivot from traditional subsidies toward sovereign wealth fund-style investing, where America gets upside participation in the companies it bankrolls rather than simply writing checks and hoping for the best. For Intel shareholders, government ownership might initially spook the market, but history suggests that when Uncle Sam becomes a co-investor rather than just a regulator, the alignment of interests often creates unexpected value over the long haul.

CRYPTO
Fear & Greed 

 

Headlines

  • Bitcoin Drops Below $114K, Ether Loses $4.2K as Jackson Hole Speech Might Bring Hawkish Surprise (link)

  • SoFi Taps Bitcoin Lightning Network for Global Remittances With Lightspark (link)

  • Polkadot Launches Institutional Arm to Bridge Wall Street and Web3 (link)