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Kudlow, Retail Earnings, & Tech Uncertainty Create Mixed Investor Sentiment

On today’s episode of Free Lunch, Ryan McQueeney discusses Larry Kudlow’s latest comments on the White House’s trade talks with China and recaps earnings results from Best Buy, Target, and more. Later, he chats with Dave Bartosiak about Nvidia and gauging investor sentiment in today’s market.

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Free Lunch is presented by Zacks Investment Research. It is streamed live, four times per week, and features breaking news and analysis from Zacks strategists. Free Lunch is available on YouTube, Facebook Live, Twitter, Ustream, and more.

U.S. stocks were lower again in morning trading Tuesday, with investors shrugging their shoulders at Larry Kudlow’s attempt to drum up optimism about a trade deal with China and instead focusing on mixed earnings results from the retail sector.

Noteworthy earnings reports were delivered by Best Buy BBY, Kohl’s KSS, Target TGT, TJX Companies TJX, and more.

Best Buy comfortably topped earnings estimates and notched same-store sales growth of 4%, but its outlook for the holiday quarter was muted. Kohl’s also beat bottom-line expectations but watched its stock drop after issuing weak full-year guidance. It was a similar story for TJX, which extended its remarkable run of results but did not impress with its Q4 guidance.

Things were a bit different at Target, where earnings actually missed analyst estimates thanks to rising costs related to supply chain investment. Comps were still up a robust 5.1%, and Target expects to see a similar growth rate over the holidays, but Wall Street expressed concern with its margins and sent the stock tumbling in morning trading.

On the first half of today’s show, Ryan discusses Kudlow’s trade war rhetoric and shares the key numbers from each of the above reports. Later, he is joined by Zacks Strategist Dave Bartosiak to discuss these stories further.

Dave explains that, although Kudlow would like to ease the tension with China, he might be handcuffed by others in the administration that do want to square off with the economic behemoth. Dave also noted that investors are concerned about margins in retail, which is yet another sector that could be affected by rising import costs.

Ryan and Dave also put the spotlight on Nvidia NVDA. Shares of the GPU pioneer actually bounced into the green on Tuesday morning, putting the stock on track to end what has been a brutal post-earnings selloff on the back of bullish support from former Nvidia critic Citron Research.

Dave speculates as to what made Citron interested in NVDA at this valuation and elaborates as to why the stock plummeted in the wake of its report. Was it last quarter’s results, weak guidance, or frustration with management that contributed the most to the selloff? Make sure to check out the show to hear Dave’s answer.

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