🎯 Target earnings

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Good morning investors! Bitcoin surprised investors yesterday with sudden jumps while the stock market retreated.

Today we cover:

• Investors are leaving China. 🇨🇳 

• Target earnings. 🎯 

• BTC hits a new high. 💃 

Follow us on Twitter for more.

📊 Economy and News 

Chinese investors are moving abroad

Chinese capital is rapidly flowing into offshore asset funds, pushing against outbound investment restrictions and adding complexity to Beijing's attempts to rejuvenate domestic markets and stabilize the yuan.

The surge in offshore investments highlights waning confidence in the domestic market, as seen in the sales of funds issued under the Qualified Domestic Institutional Investor (QDII) program. This program serves as a crucial outbound investment channel, permitting Chinese investors to purchase overseas securities under Beijing's stringent capital controls.

Managers are facing difficulties in managing the influx and are either rejecting potential investors or seeking partnerships and alternative solutions to bypass restrictions.

Even Standard Chartered recently stopped its Chinese clients from making new investments in QDII products for "commercial reasons".

Global hits:

• iPhones sales fall 24% in China amid competition and headwinds.

• Credit card late fees capped at $8 as part of Biden government’s crackdown on junk fees.

• JD.com Inc Adr earnings beat by ¥0.09, revenue topped estimates.

Also check: Australian economy slows to a crawl, underscoring the case for rate cuts. Plus, British finance minister Jeremy Hunt is expected to cut the rate of social security contributions by two percentage points in his budget statement today.

📈 Stocks

S&P 500 5,078.65 (-1.02%)
DJIA 38,585.19 (-1.04%)
NASDAQ 17,897.87 (-1.81%)
BRENT CRUDE 82.15 (+0.13%)
* Prices as of Mar 6th, 12:20 AM UTC

Target hits target but misses some

The above is what we said about Target in our Pro newsletter recommending people to buy the stock for a quick profit. (To ensure you don’t miss out on such signals, join the PRO today – first month free for new subs).

This is what happened: The company reported better-than-expected holiday-quarter results but with low guidance.

Here are the numbers:

• Earnings per share: $2.98 vs. $2.42 expected

• Revenue: $31.92 billion vs. $31.83 billion expected

The key metric, which includes digital sales and takes out the impact of store openings, closures and renovations, fell 4.4% in the fiscal fourth quarter.

Profits jumped as the company better managed inventory and benefited from falling supply chain, freight and e-commerce fulfillment costs.

But why? The company did good numbers in the previous years due to the post-pandemic boom. Its annual total revenue grew by about $31 billion – or nearly 40% – from fiscal 2019 to 2022 before sales leveled out.

It says that revenue is falling not only due to inflation but also due to theft and backlash. However, it expects theft to reduce this year.

New channels: The company is planning a new membership package that it hopes will deliver.

Named Target Circle 360, it is aimed to spur delivery orders. Set to launch in early April, it will cost $99 annually. Meant to take on competitors like Amazon and Walmart, this program will offer unlimited free same-day delivery for orders over $35, free two-day shipping, and several other perks.

The future: Target believes it will take a while for sales to bounce back quickly. For the current quarter, the company expects comparable sales to drop by between 3% and 5% and adjusted earnings per share to range from $1.70 to $2.10.

Target said it expects full-year 2024 comparable sales to be flat to up 2% and adjusted earnings per share to range from $8.60 to $9.60.

Target is now focused on growing its consumer base and increasing revenue now that costs are under control.

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🔐 Crypto

Bitcoin $63,311 (-0.77%)
Ethereum $3,540 (-0.48%)
Total market cap $2.36 (-1.64%)
* Prices as of Mar 6th, 12:20 AM UTC

Bitcoin rises to record above $69,000, then quickly tumbles 8%

Bitcoin reached a new all-time high for the first time in more than two years, topping $69,210. However, the coin could not sustain the price and fell down to $61,453.

Experts believe that this bull run could cool down soon as the coin is already up 45% YTD.

“The market is positioned for a steep correction, possibly between 10% and 20%,” said Ed Tolson, CEO and founder of the crypto hedge fund Kbit.

Bitcoin notched its previous record of $68,982.20 on Nov. 10, 2021, about a year before the catastrophic failure of FTX plagued the crypto industry.

But, some see it as a new wave of retail investors re-engaging with the crypto market, which could push prices higher. Plus, some major events, including the halving event, may have an impact on the price.

💵 Personal Finance

Top ETFs

We discussed different ETF types in the previous issue, here are some top ETFs in each category:

Equity ETFs

• Vanguard S&P 500 ETF (VOO) with a YTD performance of 6.5%, a 5-year performance of 14.6%, and an expense ratio of 0.03 percent.

• SPDR S&P 500 ETF Trust (SPY) with a YTD performance of 6.5%, a 5-year performance of 14.6%, and an expense ratio of 0.095 percent.

• iShares Core S&P 500 ETF (IVV) with a YTD performance of 6.5%, a 5-year performance of 14.6%, and an expense ratio of 0.03 percent.

International ETFs

• Vanguard FTSE Developed Markets ETF (VEA) with a YTD performance of 1.4%, a 5-year performance of 6.7%, and an expense ratio of 0.05 percent.

• iShares Core MSCI EAFE ETF (IEFA) with a YTD performance of 1.8%, a 5-year performance of 6.6%, and an expense ratio of 0.07 percent.

• Vanguard FTSE Emerging Markets ETF (VWO) with a YTD performance of -0.4%, a 5-year performance of 2.9%, and an expense ratio of 0.08 percent.

Sector ETFs

• Vanguard Information Technology ETF (VGT) with a YTD performance of 6%, a 5-year performance of 22.7%, and an expense ratio of 0.1 percent.

• Financial Select Sector SPDR Fund (XLF) with a YTD performance of 7.3%, a 5-year performance of 11%, and an expense ratio of 0.09 percent.

In addition, there are dividend ETFs like the Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD), commodity ETFs like SPDR Gold Shares (GLD) and United States Oil Fund LP (USO), currency ETFs like Invesco DB US Dollar Index Bullish Fund (UUP) and Invesco CurrencyShares Euro Trust (FXE), and real estate ETFs (REIT ETFs) like iShares U.S. Real Estate ETF (IYR) and Vanguard Real Estate ETF (VNQ).

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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