The markets plowed through the latest political upheaval in mixed fashion as earnings reports from retailers pointed to a strong US consumer and appeared to offset political disruption. The NASDAQ moved higher while the Dow fell on light trading volume to close at 25,733 off 88 points.
Shares of Target Stores moved higher after a strong earnings report. The company beat top and bottom line estimates. Gurus cheered the news and jumped on the stock like hungry bulldogs on the back of a meat wagon. Revenue was up 7% and net income was 20% higher but more interesting were comments by CEO Brian “Corporate” Cornell who said in a CNBC interview that in all his years of working in retail, he has never seen the consumer as strong as they are today. Apparently socks and underwear are flying off the shelfs!
Home improvement giant Lowe’s also reported numbers that were solid but mixed against Wall Street estimates. Revenue was up 7% and net income gained 32%. Comp store sales were a scorching 8.1% higher and gross margins were higher. The company also issued good forward guidance sending shares higher.
Fidelity Investments is one of the largest 401k plan providers in the country and they released a report on general 401k trends which noted the number of participants with account balances of a million dollars or more increased 42% over the past year. Fidelity has over 16 million 401k accounts and said the average balance across the board now stood at $104,000 up 6.4% from a year ago. They noted that savings rates are moving up along with company match amounts. This is interesting.