My top 10 things to watch Wednesday, May 21
1. Wall Street was headed for a modestly lower open as bond yields rose, the morning after the S&P 500 snapped its six-session, nearly 5.5% winning streak. The moves follow reports about finalizing the GOP budget bill to deliver tax cuts. Some members want higher SALT (state and local taxes) deductions. Others worry that a big number could exacerbate the deficit.
2. Most of April was weak because of the turmoil in Washington and President Donald Trump‘s “Liberation Day” tariffs, which froze a lot of CEOs. Will the upswing that started late last month and into May continue? During our Investing Club Monthly Meeting at noon ET, we’ll explore that — plus, give you five stocks to buy right now. It’s not too late to sign up and watch.
3. Nvidia CEO Jensen Huang condemns U.S. trade curbs on chip exports to China as a failure. During a news conference at the Computex tech show in Taiwan, Huang said the restrictions spurred Chinese rivals to accelerate development of their products. “Four years ago, Nvidia had 95% market share in China. Today it is only 50%. The rest is Chinese technology,” Huang said. “They will use second best. … If the U.S. wants to stay ahead, we need to maximize and accelerate our diffusion, not limit it.”
4. Palo Alto Networks quarter was fine. It beat on earnings and revenue but didn’t raise guidance. Why? We know that cybersecurity spending continues because of the need to prevent hackers from attacking using artificial intelligence. We’ve seen the Club stock drop after earnings, like today, before ultimately recovering. This time may not be any different.
5. Club named TJX beat expectations on first-quarter revenue and earnings, though same-store sales were a bit light. While the company behind T.J. Maxx, Marshalls, and HomeGoods reaffirmed its full-year guide, its outlook for the current quarter was light. However, management is known for under-promising and over-delivering.
6. Target missed on quarterly revenue and cut its full-year sales outlook. The retailer cited weaker discretionary spending, uncertainty about tariffs, and backlash to its rollback of diversity, equity and inclusion efforts. The Target report comes after Walmart last week affirmed its full-year outlook but said it would raise prices due to the tariffs.
7. Club name Home Depot reiterated its full-year guidance yesterday and got price target boosts from analysts. It said it would not raise prices, avoiding the kind of criticism that Trump directed at Walmart. Today, Home Depot rival Lowe’s reported a good quarter and stuck with its full-year forecast. Helping the numbers were perpetual productivity enhancements and the ability to manage through changes in tariffs.
8. Bank of America analysts raised their price target on Club name Capital One to $233 per share from $223. They talked about the closed-loop Discovery business, which I think will be huge.
9. New York may not block a proposed pipeline after all, which could be good for Club name Coterra. All of this looks like it’s part of an agreement with the Trump administration to allow a New York offshore wind project. Club name GE Vernova is part of that wind project.
10. Morgan Stanley defends every part of the Alphabet‘s Google universe. The analysts love scaled first-party data. BofA analysts said the same thing after Google’s I/O keynote. They said Google is playing offense and integrating Gemini. I don’t see it.
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