Stocks End Lower, Target Disappoints, But Retail Sales Up Sharply In October

Plus 5 New Strong Buys for Today Stocks End Lower, Target Disappoints, But Retail Sales Up Sharply In October [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Lower, Target Disappoints, But Retail Sales Up Sharply In October [Stocks End Lower, Target Disappoints, But Retail Sales Up Sharply In October]Image: Bigstock Stocks closed lower yesterday in uneven trade. Yesterday's pre-market earnings report by Target, where they posted a negative EPS surprise of -29.4%, and warned of reduced sales in Q4, sent shares tumbling by more than -13%. Sales were actually up for the quarter, with same store sales up 2.7%. And they posted a positive sales surprise as well of 0.45%. But higher markdowns to shrink inventory overhang, coupled with higher operating costs, weighed on the bottom line. Target's miss and reduced outlook came as a bit of a surprise after Walmart's positive EPS surprise of 13.6%, and positive sales surprise of 3.67% the day before. Moreover, they raised their guidance for fiscal 2023. WMT was up 6.54% on Tuesday after they reported. And another 0.72% yesterday. In spite of a lackluster showing by Target, other retailers posted positive surprises yesterday, such as Lowe's (positive EPS +5.14%), and TJX Companies (positive EPS surprise +7.50%). We also saw a better than expected Retail Sales report which showed sales up 1.3% in October vs. the consensus for 1.0%. Ex-vehicles, sales were up 1.3% m/m vs. views for 0.5%. Ex-vehicles & gas, sales were up 0.9% vs. views for 0.2%. No matter how you slice, it was a solid report. In other news, MBA Mortgage Applications were up 2.7% w/w, with purchases up 4.4%, while refi's were down -1.6%. No doubt falling mortgage rates last week helped mortgage activity. Although, the Housing Market Index slipped to 33 vs. last month's 38 and estimates for 36. Industrial Production slipped -0.1% m/m vs. the consensus for 0.2%, while Manufacturing Output rose 0.1% m/m vs. the consensus for 0.2%. The Capacity Utilization Rate came in at 79.9%, just under last month's revised 80.1%, and views for 80.4%. And Business Inventories were up 0.4% vs. the consensus for 0.5%. Additionally, last month was revised higher to 0.9% vs. the previously reported 0.8%. Today we'll get Weekly Jobless Claims, Housing Starts and Permits, and the Philadelphia Fed Manufacturing Index. The last 30 plus days in the market have been spectacular. Ever since the market's key upside reversal on October 13, stocks have been on a tear with the Dow up 11.7%, the S&P up 7.87%, the Nasdaq up 5.02%, and the Russell 2000 up 7.22%. Couple that with the post-midterm effect on the market (since 1950, stocks have always gone up in the year after midterms, with an average 12-month forward return of 18.6%), and it looks like we are at the very beginning of one of the best times for stocks. To learn all about why it looks like stocks have finally put in a bottom, and why it looks like there's a lot more upside to go, be sure to read our latest commentary... [The Case Why Stocks Have Bottomed, And Why There’s More Upside To Come]( Best, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Beginner's Guide to Pot Stock Investing]( Get burned by pot stocks in 2018? The market has matured and there are now serious opportunities for cannabis stocks to thrive in public markets. 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