Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Instant View: Wall Street recoils 3% on Target, tightening concerns

Economy May 18, 2022 02:01PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 12, 2022. REUTERS/Brendan McDermid

(Reuters) - Wall Street's stock indexes tumbled more than 3% on Wednesday as a growth share rally reversed amid concerns about economic growth highlighted by a 26% plunge in Target Corp (NYSE:TGT) shares after the retailer became the latest victim of surging prices.

Target's first-quarter profit halved and the company warned of a bigger margin hit on rising fuel and freight costs. Its shares were on track for their biggest fall since the Black Monday crash on Oct. 19, 1987 (Full Story) and came a day after rival Walmart (NYSE:WMT) Inc WMT.N trimmed its profit forecast.

Rising inflation, the conflict in Ukraine, prolonged supply chain snarls, pandemic-related lockdowns in China and prospects of aggressive policy tightening by central banks have weighed on the markets recently.


* STOCKS: Dow down 3.36%, S&P 500 down 3.81%, Nasdaq fell 4.51%



“The action we’re seeing today affirms what we think has been underway for a little bit, shifting from an inflation scare to a growth scare. They’re obviously very closely intertwined but the key differentiation or flag for it has been that shift in the correlation between bonds and stocks. You're starting to see that bid come back into Treasuries when stocks are coming under pressure. That's what we're seeing play out here in those retailer disappointments today.

“Today is definitely feeding into that growth scare narrative. When you look at the performance, we’ve already priced in a mild recession but the growth catalysts out there are still far stronger than the market is currently appreciating right now."


“The market is has priced in some of the (economic) slowing and has priced in full rate hikes, assuming Powell stays in line with the plan to end historic tightening cycles, which should take the Fed funds rate probably just over 2% as we saw in the last tightening cycle.”

“I just think the market is on edge because (Powell) came out a little bit hawkish yesterday. As we see, potentially next month, the CPI numbers come in more reasonably because the comps are much higher from last May, the market will start to relax a little bit more. But for now, it's just a knee jerk reaction to Target and to hawkish rhetoric.”

“What people are worried about after seeing Target is, will more earnings have to be taken down? Or is it a one off event because if you look at overall for the S&P 500 earnings, they're still going to grow 10% for the year based on where earnings were as of last week.”


“This is a little bit of a retail apocalypse here today. It was Walmart yesterday and everybody thought it was a one-off. Now that Target misses earnings a lot more than Walmart even did, they're scared that the consumer is not as strong as everybody thinks it is.”

“Target is a lower-beta stock. When it falls 25% in one day, it turns people off of all stocks because this is a real company with real revenues and to fall 25% in one day is a serious issue for this market and that's going to spook a lot of investors.”

“Inflation input costs are a major issue for a lot of companies here now and that the consumer isn't spending as much money as we hope they will. So the Fed's plan is working. They need to bring inflation in and it will bring it in. But it's going to be a painful process and forget about a soft landing, I don't think there's any chance of a soft landing.”

“Now investors are looking well, what is safe? What should I go in here? I don't know. Is anything safe at this point in time? If we go into a recession, maybe everything gets hit. So I think investors are re-evaluating risk right now.”

“I think you've just got to sell into the strength. You're going to get easy whipsaw rallies like we saw the last few days and you've got to use that to keep raising cash because I think the worst is still ahead of us.”


“It’s a rather extreme reaction, but it does point out that there are inflation pressures on retailers and there are spending shifts by consumers occurring at the same time.”

“Target losing a quarter of its market cap is a concern for a company that has a strong long-term track record.”

“Overall, when times get tough, when there’s inflation in lots of categories especially in nondiscretionary categories, like gas for your car, the lower income consumers often get squeezed.”

“The consumer is getting squeezed but is not dead by any means. Investors are partially reacting to Target’s big earnings miss and it shows not so much in terms of revenues; where it missed was earnings, and that reflects inflationary pressures.”

“This is not a forgiving market, selling creates more selling. Buyers are demanding much lower prices to get pulled into investments. You’ve had these wild swings both up and down. It’s hard to get investors involved given the volatility and the uncertain economic and geopolitical outlook.”

“Technicians would suggest that (an S&P 500 bear market confirmation) could bring in some buyers, so there may be some resistance. But the fundamentals will continue to deteriorate if there are more earnings announcements like we’ve gotten from Target today, showing that our worst fears about inflation and supply chain cost pressures.”

“We’re used to big positive surprises. For now, the revenues are likely to remain intact, but if the earnings fall apart there’s potential downside to the market beyond the somewhat random definition of a bear market.”


“I think it’s economic fears. You have got a host of retailers that are coming out with results that are not great, and that is one more indication of perhaps a slowdown in the economy.”

“I just wonder if people are starting to really get pinched by fuel costs – both businesses as well as consumers... When you are paying north of $5 for a gallon of gas, that’s a hammer and that’s a hammer on everybody.”

Instant View: Wall Street recoils 3% on Target, tightening concerns

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
William Smith
William Smith May 18, 2022 2:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
A clueless "leader" destroying a country is in the making.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email