On Target
The FOMC did not announce a whole lot in the way of surprises yesterday. Chairman Yellen is not too concerned about the global tumult and probably with good reason. The USA is starting to get back to normal without Fed help. There are big bills to pay but it is doable. The Fed’s paid back WWII debt and they can do it again with reasonable policy. The future looks ok and lower gas prices are not hurting. Confident consumers will take those bucks and go spend.
It looks like they are spending them at Target (TGT). While it is not the exact demographic as Wal-Mart (WMT), TGT shoppers go there for nice products at good prices. If you look at the OptionVision™ realized volatility landscape, TGT was the best performing big retailer on the back of surprisingly good earnings. Stage Stores, Inc. (SSI) was the other performer but not a blue chip. TGT was up sharply and running ahead of most of the industry with some momentum.
TGT has some catching up to do since it has spent most of the headline news on data issues and turnover at the upper levels. The stock just turned positive for the year last week. As petrol dollars flow back into the US, that should only get better. Selling Jan OTM puts to pick up the stock for unchanged on the year is probably a good do.
OptionVision™ – data from ORATS
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