Target Tightens Belt

Can retailer $TGT weather the shift in spending patterns?

Created with Midjourney

Setting the Table:

• After a float up into the close - always be paying attention to the last 30 minutes of the day! - the markets are softer this morning giving back all those gains. Yesterday’s rally was micro, heavily driven by NVDA, while today macro news from China and retailers sags optimism. 

• Options expiring the same day (0DTE) remain the focus of the industry, as the CBOE has just published their own paper analyzing the flows. Amongst the various nuggets are details about the growth in volume (as high as 56% of SPX trades!) as well as use cases. Some 95% of the trades are done in defined risk structures, with the plurality of them entered into right on the open. 

  • Follow me on twitter @harvested_dafe where I’ll dig into the full details of this report!

    

    Courtesy of CBOE

• Bank of America just put out a study of hedge fund managers that shows them as the least bearish they’ve been in the last 18 months. Perhaps they’ve seen YTD figures for the broad indices? Besides that, the swath of positive economic data has 3 in 4 managers expecting a soft landing. Still with an eye to inflation, they view the biggest tail risk as continued hawkishness. I’m inclined to agree, but see the risk more in any type of transition, regardless of the direction.