Wall St and Retailers adjusting to a random news flow world...
Remember the beginning of January? Retailers were pre-announcing strong Holiday sales and margins. Consumer Discretionary stocks were on a heater dating all the way back to pessimism lows last August. For every Kohl's or Target falling behind there were two or three Walmart's, Costcos, Victoria's Secret or Amazons; quality names near all-time highs based on nothing but old-fashioned execution.
It all seemed so rational. So fair. "Good news is being rewarded, everyone else is Target" we thought, "Surely nothing can stop us now"
Annnnnd that was the top. At least for now. As we wage into the Meat of retail earnings season next week a theme as emerged and it's sort of thorny. Companies are reporting strong results and guiding 2025 below estimates. Generally nothing disastrous. But words like "value conscious" and "promotional" are being used.
We could let it slide a bit when Amazon said it. Amazon has a lot of spending to do. Same for Walmart. But we're only a couple weeks into these reports and we've heard variants on Beat and Guide Lower from, off the top of my head:
